Shaw v Blanchett
[2006] VSC 295
•9 August 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 9307 of 2005
| KEVIN ERIC SHAW | Plaintiff |
| v | |
| JULIE KRISTINE BLANCHETT | Defendant |
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JUDGE: | Hansen J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23 February 2006 | |
DATE OF JUDGMENT: | 9 August 2006 | |
CASE MAY BE CITED AS: | Shaw v Blanchett | |
MEDIUM NEUTRAL CITATION: | [2006] VSC 295 | |
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Administration and probate – Administration and Probate Act 1958, s 15 – Executor administered estate without probate – Plaintiff desiring to bring claim for provision out of estate under Part IV – Application for executor to bring will into court and for letters of administration with the will annexed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms D Lyle | Macpherson + Kelley |
| The Defendant appeared in person |
HIS HONOUR:
This is an application by originating motion under s 15 of the Administration and Probate Act 1958 (“the Act”). The plaintiff is Kevin Eric Shaw. The defendant is Julie Kristine Blanchett, a daughter of Patricia Anne Gaffney, deceased, who died on 24 April 2004 aged 64 years leaving a will dated 6 March 1987 in which she appointed the defendant sole executor of her estate. The defendant, who has not applied for a grant of probate, opposes the application.
The relief sought in the originating motion is, in substance, that the defendant bring the will into court, and that letters of administration with the will annexed be granted to the plaintiff. The latter order is sought to enable the plaintiff to bring a claim for an order for provision out of the estate of the deceased under Part IV of the Act. The plaintiff put the matter thus in his first affidavit:
“15.For many years the deceased and I lived in a de facto relationship.
16.In a proceeding under Part IV of the Act I would intend to rely on, among other things, my contribution to the building up of the deceased’s estate by means including those pleaded in the statement of claim in proceeding No 5852 of 2005.
17.In the absence of a grant of probate of the Will, I am unable to commence a proceeding under Part IV of the Act.”
Counsel submitted that the fact that the plaintiff could not sue himself in such contemplated proceeding was not a difficulty. First, as between the plaintiff and the defendant the plaintiff was the more appropriate person to administer the estate. Secondly, down the track the appointment could be handed over to State Trustees. Alternatively, pursuant to the Family Provision rules (Chapter II, Order 16.04(2)) where the plaintiff is the sole personal representative of the deceased, the present executor (Ms Blanchett) or her siblings would properly be the defendant or defendants as a person or persons having a substantial interest in opposing the application.
I note that in bringing the application by originating motion the plaintiff did not follow the procedure authorised by s 15 of the Act. Experience in the Practice Court indicates that it is not uncommon for the correct procedure to be overlooked or not understood. The defendant objected to the proceeding on this ground. I considered it appropriate to proceed on the basis that the matter came before the Court as though in accordance with the procedure in s 15. If it were necessary to do so I would make any order that regularized the application accordingly. Acting on this basis I will determine the application as one properly brought under s 15.
Both parties relied on affidavits they had sworn in the proceeding. An affidavit was also sworn by the plaintiff’s solicitor. There was no cross-examination.
It is necessary to provide a brief outline of the circumstances and context of the present application.
The plaintiff and the deceased were in a de facto relationship for some 24 years. Throughout this period they lived together at a house at 32 Baldwin Avenue, Boronia (“the Boronia property”) of which they were registered as joint proprietors. The deceased’s interest in this property passed to the plaintiff as the surviving joint tenant and hence did not form part of her estate. I interpolate that there was a dispute in the affidavits as to the length of the relationship. The plaintiff deposed that the relationship began in 1980 and was still in existence at the time of the deceased’s death in 2004. The defendant disagreed, deposing that although the relationship began in about 1980, it was then only as a friendship with a more intimate relationship not developing until later, around 1983, and that the intimate relationship ceased in about 2000, with the plaintiff and the deceased keeping separate bedrooms although they continued to live at the same house. It is impossible to make any finding as to these matters.
The deceased had four children by her marriage to Justin Gaffney from whom she was divorced. The children survived her and at her death were aged between 44 and 36 years. The defendant is the third child.
By her will, the deceased bequeathed to the defendant her jewellery, pets, coin and stamp collections and all of her personal effects. She left the balance of her estate to her four children as tenants in common in equal shares.
The deceased’s will made no provision for the plaintiff.
There was a lack of precision in the evidence as to the value of the estate, which comprised personal property in Victoria and real property in Queensland, being three blocks of vacant land. It was common ground that the defendant sold the Queensland property in early 2005. The net proceeds of sale were $187,856.82. As to the value of the personal property, the plaintiff deposed that the deceased left the following: (a) four cars, having a total value not exceeding $6,500, which the defendant intends to sell in due course, (b) $420.54 in a bank account with Westpac Banking Corporation, (c) shares in Telstra which the defendant had realized for $5,148.10, shares in Biogreen Ltd valued at $7.20 and an investment in WA Pines Unit Trust to be redeemed for $1,274.00, a total value of $6,429.30, (d) jewellery and articles of personal and household use and ornament in the defendant’s possession not exceeding $2,500, (e) jewellery and articles of personal and household use and ornament, valued at not less than $20,000, that the defendant has not recovered and which she believes are in the possession of the plaintiff - this included items specifically bequeathed to the defendant other than the deceased’s rings and her 3 dogs and 6 horses which were now in the defendant’s possession. The defendant further referred to a sum of $20,000 which was the redemption value of an investment bond that matured prior to the deceased’s death, and which the deceased gave the defendant prior to her death to assist with her expenses. The defendant said that she had fully expended this sum in defraying expenses of her mother’s estate.
I further note that the deceased held a funeral policy with Westpac Banking Corporation under which the defendant made a claim for the funeral expenses. The defendant deposed that the claim was “rejected on a technicality” and the defendant received $462 as a refund of premium.
Seemingly in response to this material, counsel for the plaintiff submitted that the estate was worth at least $245,842, including a figure of $190,000 for the Queensland properties and personal property in Victoria valued at $55,842. This latter figure includes the defendant’s estimate of $20,000 referable to the jewellery and articles of personal and household use and ornament that the defendant has not recovered, in addition to the $20,000 referable to the redemption value of the investment bond. I note as to the first $20,000 amount that the plaintiff provided no list of the subject items held by him and not recovered by the defendant and no evidence of the value of such items.
The evidence adduced by the plaintiff as to the value of the estate was ultimately derived from the defendant’s evidence. As to that evidence, I note in particular the document entitled “administration account” exhibited to the defendant’s affidavit sworn 14 February 2006 which sets out the overall asset position of the estate. The account states that the total receipts for assets outside Victoria were $187,856.82 (being the net proceeds of sale of the Queensland properties) and that the total receipts for personal estate in Victoria were $5,575.84. Thus, the total value of assets received was $193,432.66. This did not include the value of the investment in WA Pines Unit Trust of $1,274.00, the cars estimated at $6,500, the jewellery and other personal effects bequeathed to the defendant and valued at not more than $2,500 and the deceased’s three dogs and six horses bequeathed to the defendant and in her possession. Nor did it include the estate assets believed by the defendant to be retained by the plaintiff and valued at not less than $20,000, nor the $20,000 referable to the redemption value of the investment bond. The account showed that the defendant had paid funeral expenses and debts and liabilities of the deceased and the estate in the amount of $32,596.81, leaving a balance of $160,835.85. The defendant made distributions to the four beneficiaries under the deceased’s will in several instalments between February and October 2005, with three of the beneficiaries receiving $40,000 each, and a fourth beneficiary receiving $45,000. This was an overpayment of $5000 and is to be refunded to the estate. The present position then is that the estate has a negative balance of $4,164.15. At the time of the hearing the defendant had only to receive a cheque for the redemption of the units in the WA Pines Unit Trust and sell the motor cars. In addition were the items of personal property believed to be held by the plaintiff.
Within two weeks of the deceased death on 24 April 2004, the plaintiff caused to be lodged, through his solicitors’ agents in Queensland, caveats on the titles of the three Queensland properties. I note that the caveats, or copies thereof, were not produced. The defendant deposed that the caveats put her in the position of being unable to cover estate debts or borrow money as she had not yet transferred the land into her name as legal personal representative. These difficulties continued throughout 2004 and “forced her into a position of needing to liquefy the estate assets”. I should add that the only evidence as to the caveats came from the defendant, who also made submissions as to the effect of the Queensland legislation, in particular that she did not need to obtain a grant of probate in order to sell the properties. It is unnecessary to determine the effect of the Queensland legislation; the properties have been sold and the net proceeds remitted to Victoria and distributed among the beneficiaries. The defendant said that the caveats lapsed on 24 January 2005 as the plaintiff did not institute proceedings within nine months of the deceased’s death. As representative of the deceased’s estate the defendant sold the properties on 31 January and 1 March 2005. As mentioned, the net proceeds of sale was $187,856.82. She applied $15,000 of this money against estate expenses and the balance of $172,856.82 was deposited into an account in her name with the Commonwealth Bank of Australia. The money was subsequently distributed to the beneficiaries under the deceased’s will.
After the deceased died, it is apparent that there was a dispute between the plaintiff and the defendant concerning the defendant’s access to the Boronia property to enable her to collect property of the deceased and thus administer the estate. The plaintiff sought advice from solicitors who wrote to the defendant on 3 May 2004 as to her access to the Boronia property. She responded by letter on 5 May 2004 providing a copy of the will and requesting a meeting at the house to collect her mother’s property which was duly specified.
On 17 May 2004 the defendant’s solicitors wrote to the plaintiff’s solicitors saying, among other things, that they acted for the defendant and had been instructed to apply for probate of the deceased’s will and would do so. The defendant deposed that this letter was written without her instructions and before the exact nature of her mother’s estate was known to her and that after examining her mother’s finances and making relevant enquiries, she was able to ascertain that the size of the estate was such that it could be fully administered without obtaining a grant of probate.
The defendant ultimately decided, for reasons of cost relative to the size and lack of liquidity of the estate, to handle the estate matters without the assistance of solicitors. She deposed to various attempts to contact the plaintiff’s solicitor, both by telephone and letter, to request that future correspondence be addressed to her personally. It appears that there was a breakdown in communication between the defendant on one hand and the plaintiff and his solicitor on the other, although the defendant did receive a letter from the plaintiff’s solicitor on 10 December 2004 outlining the plaintiff’s position in relation to a further dispute between the plaintiff and the defendant concerning a farm property at 111 Tonkins Road, Labertouche purchased by the defendant in 2002 and of which the defendant is the sole registered proprietor.
As to that dispute, on 4 May 2005 the plaintiff commenced a proceeding (No. 5852 of 2005) against the defendant in which he seeks a declaration that he is entitled to a one-third interest in the Labertouche property by virtue of a constructive trust arising from an oral funding agreement between the plaintiff, the deceased, and the defendant, whereby the plaintiff was to and did provide one-third of the purchase price, (the deceased and the defendant each providing one-third), namely $110,000 which the defendant applied in payment of the purchase price. Counsel for the plaintiff said that if the plaintiff’s evidence in that case was accepted, not only he but also the estate would be entitled to a one-third interest in the property. The writ was not forthwith served, indeed the fact of a writ was first disclosed in a letter on 30 May 2005, the writ being provided to the defendant’s solicitor as “background” when the plaintiff was seeking a meeting of the parties. The writ was not served until August 2005 following a meeting on the 15th of that month at which the matter was not resolved. On 23 September 2005 the defendant filed a defence and counterclaim in which the funding agreement and the provision of funding by the plaintiff are denied. The counterclaim seeks damages in respect of the plaintiff’s occupation of the property and the costs of maintaining the property. The proceeding remains on foot. In her affidavit sworn on 16 December 2005 the defendant said that she had incurred legal costs of $9,179.30 in relation to the proceeding.
In May 2005 the defendant sought advice from a solicitor. Subsequently, on 12 May 2005 the defendant caused to be placed in the Victoria Government Gazette and The Age a notice which stated that the defendant as trustee of the deceased’s estate required those persons having claims against the deceased’s estate to send particulars of their claims to her by 13 July 2005, after which date she may convey or distribute the assets of the estate having regard only to the claims of which she then has notice. No claims were made in response to that notice.
There was a dispute as to whether the defendant was on notice of the plaintiff’s intention to claim against the estate at the time of publishing the notice. Counsel for the plaintiff submitted that earlier correspondence between the parties made clear that the defendant was on notice, while the defendant argued that she was only on notice as to the claim in respect of the Labertouche property, but not in relation to the estate. I note however that in a letter dated 27 May 2004 from the plaintiff’s solicitor to the defendant’s then solicitor it was stated that the plaintiff had been the de facto partner of the deceased for 24 years and “As such, the deceased clearly failed in her obligation to make provision for him in her will”. I note that on 3 September 2004 the defendant herself replied to that letter in the course of which she disputed that the de facto relationship had lasted 24 years. Hence, while correspondence from the plaintiff’s solicitor subsequent to the notice in May 2005 did not make explicit reference to a claim for provision out of the estate, the 2004 letter did. It is reasonable that the later correspondence be understood in light of that earlier explicit reference.
I note that prior to publishing the notice, the defendant had made distributions to her three siblings in the amount of $125,000 and a distribution of $20,000 to herself. She made further distributions of $14,000 to herself by 6 June, with a final distribution to herself of $6,000 in November 2005.
As mentioned, on 15 August 2005 both parties and their solicitors attended a ‘round table conference’ to attempt to resolve the dispute. No settlement was reached.
On 17 August 2005 the plaintiff’s solicitor wrote to the defendant’s solicitor seeking advice whether the solicitors would accept service of the writ, and whether the defendant would apply for a grant of probate. The latter was important as the executor was bound to administer the estate, the estate may be involved in the proceeding concerning the Labertouche property, and the plaintiff intended to bring a testators family maintenance claim.
On 24 August 2005 the defendant’s new solicitor wrote to the plaintiff’s solicitor advising that:
“My client has no intention of applying for a Grant of Probate of the estate of her late mother. Acting as the executor named in the Will of her mother she has fully administered the estate without the need to obtain a grant. A notice to creditors in the form prescribed by the Trustee Act has been lodged in the Government Gazette and the Age and expired on 13 July 2005 and what assets there were have been distributed to the beneficiaries.”
After further correspondence, which it is not necessary to set out, the plaintiff brought the present application.
Submissions
Plaintiff
Counsel for the plaintiff submitted that the Court should grant the relief sought as the requirements of s 15 of the Act were satisfied. That is, the defendant is the executor named in the will, had failed to bring the will into Court or prove or renounce probate thereof within six weeks from the death of the deceased, the plaintiff is a party interested in the estate by reason of his standing as a long term de facto partner of the deceased who wished to claim under Part IV of the Act, but such claim could not be commenced until there has been a grant of probate.
Counsel accepted that the defendant had distributed the estate, but pointed out that this was done without a grant of probate. Further, it did not matter that part of the estate assets (the land) was in Queensland as the land had been sold and converted to personalty in the hands of the defendant who lives in Victoria.
At the time of publishing the notice seeking creditors of the estate, the defendant was on notice that the plaintiff wished to make a claim against the defendant in respect of both the estate and the Labertouche property. The plaintiff was not obliged to repeat the notice he had already given to the defendant. The defendant’s subsequent distribution of the estate was an artifice designed to defeat the plaintiff’s claim. Further, the defendant was estopped from relying on the plaintiff’s alleged failure to pursue his rights in Queensland, as the plaintiff had relied on the letter of 17 May 2004 from the defendant’s solicitors to the plaintiff’s solicitor which had led the plaintiff to believe that the defendant would seek a grant of probate, when in fact the defendant changed her mind and did not advise the plaintiff of that fact.
Defendant
The defendant submitted that the plaintiff was not a person “interested” in the estate. The defendant then submitted that, in the present circumstances, there was no good reason for her to obtain a grant of probate. A grant of probate had not been required in order to deal with any of the assets in the estate or otherwise administer the estate. That was indicated by the fact that she had largely administered the estate. To now seek a grant of probate would be a waste of resources and not in the interests of the estate.
The Court can only grant probate where there are assets within the jurisdiction; Re Aylmore, deceased[1]. Once the funeral and testamentary expenses are taken into account, there is simply no estate. In any event, the defendant having already administered the estate (and not renouncing) it would not be appropriate for the Court to make a grant of representation to somebody else, especially not somebody in the plaintiff’s position; In the Will of Lyndon, deceased[2].
[1][1971] VR 375.
[2][1960] VR 112.
Further, there was no basis for the plaintiff’s proposed claim for provision out of the deceased’s estate. There were never sufficient assets in the estate for a claim to be made. The estate in Victoria had been $35,849.74. In any event, the plaintiff’s relationship with the deceased ended at least three years before her death, and he had become the sole registered proprietor of the Boronia property as surviving joint tenant. Further, the plaintiff retained assets of the deceased’s, which she estimated to be worth approximately $20,000 to $25,000, which were never handed over to the defendant as executor. Thus, he has no moral claim to provision out of the estate.
Next, as to the Queensland land, the Court did not have jurisdiction in relation to it; Re Paulin[3]. The next point was that the defendant sold that land because she needed money to pay estate expenses. She referred to the Queensland family provision legislation[4] and emphasised that under it a claim for family provision must be brought within nine months of the deceased’s death, that a claim may be brought even though there has been no grant of probate, and that a claim can only be brought by a dependant of the deceased, whereas here the relationship had broken down and the plaintiff was not a dependant. Although the plaintiff caused caveats to be lodged on the properties, he did not commence a proceeding in the Supreme Court of Queensland within nine months of the deceased’s death. In short, the plaintiff had ample opportunity to lodge a claim against the defendant in Queensland, but did not do so.
[3][1950] VR 462.
[4]Succession Act 1981 (Q), Part IV.
Finally, the beneficiaries under the will would be prejudiced if the application was granted. These beneficiaries included “several pensioners who can ill afford to pay any funds distributed to them almost twelve months ago”.
Decision
The relevant requirements of s 15 are met. First, the defendant is named as the executor in the will, has possession of the will, and has not proved the will or renounced probate thereof within six weeks of the deceased’s death. Secondly, I accept that as a person desiring to make an application for provision out of the estate under Part IV of the Act, the plaintiff is a “party interested … in the estate”. As I read the Act, as to which see in particular s 97(3), such a proceeding requires that a grant has been made. In the circumstances the application under s 15 is an appropriate way of bringing to a head the matter of a grant.
As to the value of the property left by the deceased, I accept that the value of the property left by the deceased in Victoria did not exceed $50,000. I also have no reason to doubt the defendant’s evidence as to the amount received on the sale of the Queensland land and the amount she has expended in paying the funeral and related expenses and the debts and liabilities of the deceased and the estate. As to the Queensland land, whether or not it would have been covered by a grant of probate in Victoria, or affected by an order made under Part IV of the Act (because it was an immovable located in Queensland), the fact is that the land has been sold and thus converted to personalty in the control of the defendant, and distributed.
In getting in and selling assets of the deceased the defendant acted without a grant of probate. There was debate as to whether she was authorised to do this by s 71 of the Act. The defendant also referred to Queensland legislation as justifying her sale of the land in Queensland. But s 71 was irrelevant. That section provides a simple way of obtaining a grant. The defendant did not obtain a grant under s 71. Indeed, there is no evidence that she applied under s 71. There was merely the defendant’s assertion that she had contacted the Probate office on four occasions and was notified that there was no need to obtain a grant of probate under the law of Victoria for this estate. What she then did was administer the estate without a grant. It is obvious enough that she was able to do that because the persons who had to transfer an asset to her were prepared to do so without the production of a grant.
In the result, almost the entire net estate has been distributed to the beneficiaries named in the will. Doubtless it is unfortunate if to a greater or lesser extent the defendant and her siblings are required to disgorge what they have received. That, however, may be the consequence if the plaintiff were to succeed on an application under Part IV.
That brings me to the point of the appropriate disposition of the application. It is at this point that two aspects concern me. The first is the level of vexation between the parties evident in the evidence and the oral submissions to me. Such vexation, in a family context, can produce high costs in a relatively modest estate. The second is that the plaintiff has the other proceeding pending against the defendant. In that proceeding he contends that the deceased’s estate is also entitled to a one-third interest in the Labertouche property. The property is registered in the sole name of the defendant who denies the plaintiff’s claim and, as I understand it, would also deny that the deceased’s estate was entitled to any interest.
In these circumstances it is readily seen that the plaintiff’s application to be appointed as administrator has a broader context than that of merely facilitating the making of a claim under Part IV. Tactical and commercial advantages in the conduct of both sets of proceedings, and as between the parties, seem readily apparent. It might even be that clothed with the authority of a grant the plaintiff might sue the defendant to account for her administration and reimburse the estate. In the context of this case, and having regard to the actions of the parties and what I observed, it would not be surprising if there was prolongation of litigation with attendant expense.
I also take into account that the plaintiff has only given the barest indication of the grounds of a claim under Part IV. In his first affidavit the plaintiff said merely that for many years he was in a de facto relationship with the deceased and that in a proceeding under Part IV he would rely on, among other things, his contribution to building up the deceased’s estate by means including those pleaded in the statement of claim in the proceeding concerning the Labertouche property. But a claim under Part IV and the claim in the Labertouche proceeding are different things. It is also to be borne in mind that the plaintiff has acquired sole ownership of the Boronia property by survivorship. On analysis it is seen, in my view, that the basis of a claim under Part IV thus advanced by the plaintiff is skimpy, and such as to cause me to hesitate.
It seems to me, having regard to all the circumstances, that the course most appropriate to the situation is this: in the first instance the plaintiff should file and serve an affidavit which more specifically states the basis of an application under Part IV; then, in light of such further material I will consider the application further. I would indicate now that if the matter were appropriate to proceed to relief under the application my disposition would be to allow the defendant a limited time in which to apply for probate failing which, or if she stated that she would not apply for probate, I would consider to whom a grant should be made.
For the moment I will adjourn the further hearing of the proceeding to a convenient date and reserve costs.
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