Re Meyerstein

[2009] VSC 564

IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE PRACTICE COURT

No. 9865 of 2009

IN THE WILL and ESTATE of WERNER

LUDWIGK MEYERSTEIN deceased

and

Ex parte an application by STATE TRUSTEES	Plaintiff
LIMITED (As Administrator of the estate of the Deceased)

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JUDGE:	ROSS J
WHERE HELD:	Melbourne
DATE OF HEARING:	8 December 2009
DATE OF JUDGMENT:	8 December 2009
CASE MAY BE CITED AS:	In the will and estate of Werner Ludwigk Meyerstein deceased and State Trustees Limited
MEDIUM NEUTRAL CITATION:	[2009] VSC 564

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Application pursuant to Rule 54.02 for the determination of questions arising in the administration of an estate – Administration and Probate Act 1958 – s 52(i)(f) – entire estate to be divided amongst all fifth degree relatives who survived the deceased – level of certainty required that all of those relatives have been identified and located – West v Weston [1998] NSWSC 419 considered and applied – Court satisfied on the balance of probabilities that the substantial majority of the beneficiaries have been ascertained and that no reasonable inquiries could be made which would improve the situation – application granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Boaden

!Undefined Bookmark, I

SC:RD
HIS HONOUR:

1. This is an application by State Trustees Limited for an order that they are justified in distributing the estate of the deceased to first cousins once removed, in the absence of evidence of any nearer next of kin surviving the deceased. The current value of the estate is $2,334,798.53. In the alternative the plaintiff seeks an order that all monies be paid into court and the plaintiff be discharged from further responsibility.

2. The deceased was born on 29 July 1912 in Ellenburg Germany and died in Melbourne on 21 February 2001, at the age of 88.

3. He died intestate because his last will, dated 3 July 2000, appointed his wife his executrix and universal beneficiary, and she predeceased him, and there was no gift over. Letters of administration to his estate were granted to State Trustees on 4 June 2001.

4. Since 2003 Mr William Corbettt, a Genealogical Researcher employed by State Trustees Ltd, has been engaged in, among other things, establishing the deceased’s next of kin. The deceased was widowed at the time of his death. He did not leave any issue in Victoria between 1924 and 2002. There is no evidence that he lived anywhere other than Victoria. Mr Corbett engaged external researchers in Italy, Germany, and Poland. They have searched the archives in Hanover, Poland and Berlin. Obtaining details about the Deceased’s next of kin is difficult because his family was Jewish and a number of his family members perished during the holocaust.

5. The aim of the provisions dealing with intestacy in the Administration and Probate Act 1958 is to provide a scheme of distribution for a deceased’s residuary estate (as defined in s 38(4)), where the deceased dies without leaving a valid will or where the will does not effectively dispose of all of the residuary estate.

6. The scheme of distribution in Part 1, Division 6 of the Act provides benefits (with certain priorities) to the deceased’s:

• Spouse or domestic partner;

• Children (and other issue);and

• Next of kin.

1. The word ‘issue’ while including the child or children of a deceased person, has been interpreted as including lineal descendants, ie grandchildren and great grandchildren[1] and adopted children.[2]

   [1]              Matthews v Williams (1941) 65 CLR 639 at 650. Perpetual Trustees Co Ltd v Wilson [1995] ACL Rep 395 NSW 51.

   [2]              GE v KM [1995] 1VR 471.

2. Where a person dies intestate, and is not survived by a spouse or domestic partner, parents, children or more remote issue, then s 52(1)(f) of the Act directs that the estate be distributed amongst the next of kin of the intestate who are in equal degree.

3. Section 52(1)(f) provides, relevantly:

“(f) Subject to the above-mentioned rights such estate or the portion thereof to which these rights do not extend shall be distributed in equal shares among the children of the intestate living at his or her decease and the representatives then living of any children who predeceased the intestate or if there are no such children or representatives among the next of kin of the intestate who are in equal degree and their representatives:

1. The provisos in s 52(1)(f)(i) to (viii) are not relevant in this case.

2. If there are no relatives then the residuary estate will pass to the Crown (s 55).

3. In this case Mr Corbett’s investigations have established that there are no surviving issue, siblings, nephews and nieces, great-uncles and aunts, or cousins. No next of kin closer than fifth degree relatives survived, and accordingly the entire estate is to be divided amongst all of the fifth degree relatives who survived the deceased.

4. The practical problem which commonly arises in cases such as this is: how can the person representative be sure that all of those relatives have been identified and located?

5. In some cases the problem is solved through a next of kin inquiry. In West v Weston[3], Young J gave this description of that procedure:

   “Essentially, if the evidence adduced by the parties is insufficient to enable the inquiries to be satisfactorily answered, then an advertisement is placed, prepared by the parties and approved by the Master, fixing a time within which each claimant is to come in and prove his or her claim, appointing a day for adjudicating thereon. Unless otherwise ordered, all persons who do not come in and prove their claims within that time will be excluded from the benefit of the order.”

   [3] [1998] NSWSC 419 at [24].

6. But in this case that procedure is not appropriate since it is clearly impractical to publish advertisements throughout the world which would have any realistic chance of alerting any distant relatives of the deceased to their entitlements to share in the distribution of this estate.

7. In Re Benjamin[4], the testator had 13 children of whom 12 survived him and one son was missing, having disappeared nine months before the testator died. After an inquiry the Master was unable to certify whether the son was living or dead. No-one responded to the advertisements. The trustees sought permission to distribute the estate on the basis that the son had predeceased the testator. Joyce J held that the son must be presumed dead, and gave that permission.

   [4] [1902] 1 Ch 723.

8. Such orders are now known as Benjamin Orders. They are regularly made in such circumstances including in relation to intestate estates.[5]

   [5]              Re Aldersley, [1905] 2 Ch. 181; Re Hickey, [1925] VLR 270; Re Dolling, [1956] VLR 535; and Re Albert, [1967] VR 875, (a case where a Benjamin order was made in relation to an intestate estate).

9. Returning to West v Weston that was a case which dealt with the requirements of certainty for will trusts (whether or not it was necessary to be able to compile a complete list of beneficiaries for the trust to be valid) as well as with the procedure to be followed where beneficiaries cannot be found. The relevant trust was to divide the residue amongst the issue living at the date of death of the testator of his four grandparents. The researches of a genealogist over two years found 1,225 persons who qualified as beneficiaries from one side of the family, and 450 from the other. It remained possible that more claimants might come to light. In relation to the problem of finding beneficiaries Young J then referred to Re Saxone Co Ltd’s Trust Deed[6] where Cross J said (at p 912) that

   “When the court directs an inquiry to ascertain next of kin, or distributes a fund on the master’s certificate given in answer to the inquiry, it is always possible that the class will never be or has not been completely ascertained…All that is necessary is that the court should be satisfied that it is probable that the class can be or has been ascertained.”

   [6] [1962] 2 All ER 904.

10. Young J examined the authorities including the only relevant Australian decision, Kinsela v Caldwell[7], and said at [37] that whilst they indicated he should follow the English rule,

    “…it seems to me that I would be justified in slightly modifying its

    operation for Australian conditions of the present day.”

    [7]              (NSW), unrep Mahoney J, 28 June, 1973.

11. Young J expressed the rule, so modified, in these words:

    “The rule will be satisfied if, within a reasonable time after the gift comes into effect, the court can be satisfied on the balance of probabilities that the substantial majority of the beneficiaries have been ascertained and that no reasonable inquiries could be made which would improve the situation.”

12. In my view the modified rule as formulated by Young J ought to be applied to the matter presently before me. I agree with the submissions of counsel for the plaintiff that a next of kin inquiry, and the publication of advertisements, would be nothing more than an empty charade in the circumstances of this case. A Benjamin order is required.

13. In terms of the rule suggested by Young J, I am satisfied that the evidence shows that, on the balance of probabilities

(a)	if not all, then at least the substantial majority of the beneficiaries have been ascertained; and
(b)	there no further reasonable inquiries which should be made and which would be likely to identify any further beneficiaries.

1. The next of kin entitled under s 52(1)(f) of the Act to participate in the distribution of the intestate estate are the next of kin in the fifth degree who were living on 21 February 2001 when the Deceased died. Annexure to “WGC-7” to Mr Corbett’s affidavit is a chart showing relatives who fall into the category of fifth degree relatives. There are twelve such persons.

2. The estate of Deceased has been administered in that all of the assets have been collected and realised, and all debts and liabilities have been paid and discharged. Subject to providing for the costs of this proceeding, and paying the current income tax payable by the estate, all that remains to be done to complete the administration is to distribute the net funds to the recipients.

3. In the circumstances and having regard to Mr Corbett’s evidence I am satisfied that it would be appropriate to distribute the estate of the Deceased to his first cousins once removed who are named in the schedule to the originating motion.

4. The costs of this application are to be paid or retained out of the estate.