State Trustees Ltd v Wheeler
[1998] VSC 115
•22 October 1998
SUPREME COURT OF VICTORIA
CAUSES JURISDICTION
Not Restricted
No. 6783 of 1997
STATE TRUSTEES LTD. Plaintiff v NORMA INVERMAY WHEELER and ANOR Defendants
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JUDGE: HEDIGAN, J. WHERE HELD: Melbourne DATE OF HEARING: 28 September 1998 DATE OF JUDGMENT: 22 October 1998 CASE MAY BE CITED AS: State Trustees Ltd. v. Wheeler & Ors. MEDIA NEUTRAL CITATION: [1998] VSC 115
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ADMINISTRATION AND PROBATE - Wills - Provision by will by way of specific gift of chattels to daughter - Beneficiary declining to respond to trustees' attempts to arrange delivery of chattels - Whether chattels should be sold.
TRUSTEES -Trustee Act 1958 s.63 - Whether Court should confer power of sale on trustees - No power of sale of specific legacy arising under will - Sale not ordered.
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APPEARANCES: Counsel Solicitors For the Plaintiff Mr. R.R. Boaden State Trustees For the First Defendant No appearance For the Second Defendant Ms C. McOmish Lawson Hughes McComas
STATE TRUSTEES v. WHEELER
HEDIGAN, J.:
This proceeding is by way of originating motion and summons thereon concerning the will and estate of Invermay Walker, deceased. The motion is brought by State Trustees Ltd. as executor of the will and trustee of the estate of Invermay Walker. The defendants to the motion are Norma Invermay Wheeler, the daughter of Invermay Walker, deceased, and Geoffrey Stephen Wheeler, the son of Norman Invermay Wheeler. A daughter of Norma Invermay Wheeler, namely Diana Invermay Morrisby was, by way of an order of Master Kings, offered the opportunity to be joined as a defendant in the proceeding but did not avail herself of that opportunity. Notwithstanding that, Diana Morrisby purported to and did file affidavits in the proceeding to which I will subsequently refer. I will briefly summarize the mainstream facts concerning the proceeding. They are derived from a number of affidavits of Marina Paleologoudis, a solicitor employed by State Trustees Ltd.; an affidavit of Risto Dimitri Christou, another solicitor with the State Trustees; two affidavits of the second defendant Geoffrey Wheeler and affidavits of John Frederick Ainger, Alwyn Painter, Margaret Quin, Helen Seamer and David Hughes.
The late Invermay Walker died on 13th August 1996 aged 101 years. Her husband had died many years before and there was one child of the marriage, the first defendant Norma Invermay Wheeler. The evidence indicates that the late Invermay Walker had lived a remarkably fulfilled and active life up until the period not long before her death. She had lived in her own home in Kew. She is described in the affidavit of Mr. Alwyn Painter, who knew her for 40 years, as being "a dignified lady of high moral values possessing a strong character and being independent in nature and holding firm ideas about every aspect of life." It is apparent also from his affidavit and the affidavit of Mr. Ainger that she had over her lifetime been a collector of antiques and jewellery and in particular her porcelain. At some time in 1996, the late Mrs. Walker's doctor concluded that she could no longer live alone. She did not agree to appointing any person to act for her pursuant to power of attorney. As she deteriorated, this led to the Guardian and Administration Board appointing the plaintiff State Trustees Ltd. as her administrator on 25th June 1996. She then moved briefly to hospital and then to Calmsworth Nursing Home in Kew where she remained until her death on 13th August 1996. Officers of the State Trustees arranged for the removal of her antiques, including porcelain from her then home in Kew. Ultimately the porcelain collection which was valued by Mr. Ainger in February 1998 as being worth $150,000-$200,000, was stored in a warehouse owned by Aingers. It is still there, insured. Aingers is not currently making any charge for accommodating or insuring the collection. However, this was probably on the basis of a belief held by Aingers, founded on matters to which I do not find it necessary to elaborate, that the collection was likely to be catalogued and sold. It appears that it was likely that if the collection were not assumed by the legatee or sold, that charges for continuing storage and insurance would be made. The late Mrs. Walker died leaving a will made on 5th November 1993. Mr. Alwyn Painter was appointed to be the executor of the will and trustee of her estate. By a specific legacy (clause 2(b)) the deceased Mrs. Walker bequeathed all her jewellery, porcelain and pictures to her daughter Norma Wheeler, the first defendant. The residuary estate was disposed of by half to the defendant Norma Wheeler and one quarter each to Norma Wheeler's children, Geoffrey Wheeler the second defendant and Diana Morrisby. As at August 1998 the residuary estate was valued at $313,763. The house and land in Kew was sold for $325,000. There were some bank accounts. Of this net estate, the share of both the second-defendant Geoffrey Wheeler and Diana Morrisby was $78,140 of which $35,000 has been paid. Norma Wheeler's half-share of the estate was in August 1998 $156,881. I was informed from the Bar table by Mr. Richard Boaden, who appeared on behalf of State Trustees Ltd., that efforts by State Trustees to distribute to Norma Wheeler have not met with her co-operation. The money is still presently held in an interest-bearing account by State Trustees.
An affidavit of Geoffrey Wheeler of 17th February 1998 was apparently sworn in support of the plaintiff's application (to which I shall shortly refer) for orders enabling it to sell the porcelain and jewellery collection. The affidavit details his recollection of his mother's breakdown and affected mental state in the 1960s, including periods in institutions for the mentally ill, so much so that her demeanour changed markedly. It refers to the first defendant's resentment towards her mother over these matters and continuing animosity and coldness shown by her towards her mother. It also describes the rejection by the defendant of offers by the late Invermay Walker to her of gifts of porcelain and other valuable items, the rejection being accompanied by agitation and hostility. It expressed the view that the first defendant had placed no value on the porcelain, antiques or jewellery, would not accept them and might give them to strangers, destroy them or bury them in her back yard. It appears from this affidavit that the first defendant is living, pursuant to a life interest in it, in the former family home in Pascoe Vale South, obtaining that life interest occupancy pursuant to the will of her late father. It also provides information that the first defendant Norma Wheeler has lived on her own for the past ten years, not keeping the house locked and secure, with the front and back doors usually unlocked, with both doors and windows left open. It expresses the concern of the son that the mother is vulnerable and that if valuable antiques, porcelain and jewellery were located in the house, there might be some well-based concern for her physical safety and the security of the items. For that reason he expresses a preference for the antiques, porcelain, etc. to be sold.
As I have indicated Mrs. Diana Invermay Morrisby filed in the court voluminous affidavits. She is not a party to the proceedings and strictly speaking the affidavits should not have been accepted by the Prothonotary's office as they were not being filed by or on behalf of any party to the proceeding,. They were received, I daresay, because the frontispiece pages was unexceptional in form and correctly described the action, so much so that it would be easy for those in the Prothonotary's office to accept them as being a legitimate part of the material to be filed. Notwithstanding their status, I have read these detailed affidavits and they have provided some useful information. It should be said, however, much of them is concerned with intemperate criticisms, even vilification of State Trustees Ltd. and its officers and of many of the legitimate deponents in this proceeding, particularly Mr. Geoffrey Wheeler. Mrs. Morrisby also appeared, accompanied by her son, at the hearing of this matter and made a number of unsworn statements to me at my request (and some not at my request) in the presence of the parties. It is apparent from her affidavits that she has considerable differences of opinion about many, if not most, matters. The main theme of the affidavits is that since the antiques, jewellery and porcelain were a specific gift by will to Norma Wheeler and there has never been stated by her any objection to them, no steps should be taken to deprive her of them by sale or other disposition.
The affidavit of Marina Paleologoudis of 25th August 1997 contains detailed information. Some of it appears to be derived from statements from Mr. Painter to the effect that Norma Wheeler's mental health was a closely guarded family secret and that she rarely appeared at family functions including her mother's 90th and 100th birthday celebrations. It is stated in Marina Paleologoudis's affidavit that Mr. Painter claimed that Norma Wheeler never forgave her mother for the time spent by her at Willsmere and that the defendant had told Mr. Painter on numerous occasions that she did not want anything to do with her mother's estate.
After the testatrix's death, Mr. Painter became conscious of what he described as the "deep antagonism on the part of Diana Morrisby for her brother Geoffrey Wheeler". He concluded that it would be impossible for him to administer the estate, and authorized State Trustees to make application for probate of the will in the best interests of the estate.
State Trustees' affidavits show clearly that even during the lifetime of Invermay Wheeler, State Trustees' efforts to obtain from the first defendant her views as to the future of the house and contents met with no success; for example, on 24th July 1996 when the plaintiff's officer, with Geoffrey Wheeler, visited the defendant (she had been notified of the impending visit), the defendant immediately left the house. Thereafter letters and telephone calls made over the next 18 months drew no response. Letters were not returned to the plaintiff. Telephone calls produced silence. On 29th October 1996 the plaintiff wrote to the first defendant asking her to complete a formal declaration confirming her identity as the daughter of the deceased and asking for details of her bank account if she wished to have her entitlements paid into such an account. There was no response to this letter either and the letter was not returned to the plaintiff. This apparently accounts for the continued retention by State Trustees of Norma Wheeler's entitlements to the residue. After other fruitless calls, two officers of the State Trustees went to Norma Wheeler's home and called out her name but she would not open the door, although they believed that she was in the house. In April 1997 Risto Christou of State Trustees succeeded in speaking to Norma Wheeler by phone but she said she was too busy to discuss anything to do with her mother's estate and hung up. The affidavit indicated additional attempts throughout 1987, both direct and through a former solicitor of the first defendant to make contact. On 22nd May 1997 the plaintiff's representatives went to the first defendant's home in Pascoe Vale where she was observed sitting watching television. The front door was open. The first defendant came to the door and was told who those representatives were and that they needed to get some instructions concerning the estate of her late mother. The first defendant interrupted saying she was "too busy cutting down trees and burning off", and closed the screen door. As she departed she was asked if they could come back later to which she said "Time will tell". It was also stated that there was no evidence of any trees being cut down and burned off.
The affidavits of Margaret Quin and Helen Seamer, a cousin and niece of the deceased respectively, provide some evidence of the disinterest of Norma Wheeler in antiques and at least the non-objection to their sale. The Quin affidavit describes events which would indicate Norma Wheeler's lack of affection towards the mother (e.g. not attending her funeral). Mrs. Seamer's affidavit was much to the same effect.
The endorsement on the amended originating motion of 3rd April 1988 seeks the following orders and directions: (1) an answer to the question whether the power of sale contained in clause 4(a) of the will extends to the personal chattels the subject of the bequest in clause 2(b) to the first defendant; (2) alternatively, pursuant to s.63 of the Trustee Act on order conferring upon the plaintiff the power to sell the chattels; (3) alternatively directions from the Court as to whether it is an appropriate exercise of the duties of the Trustee to deliver the chattels to the first defendant at her place of residence in Pascoe Vale; (4) 6 and 7 as questions rather than the formulation of sought orders or directions "6. Has the first defendant accepted the gift in clause 2(b) of the will? 7. Does the property the subject of the gift falls into residue?"
I move first to the paragraph of the indorsement on the claim as to whether the power of sale in clause 4(a) extends to the personal chattels dealt with in clause (b). Mr. R. Boaden spent no time on this matter, which occasions no surprise. Clause 4(a) of the will is to the following effect:
"4. In addition to the usual powers of the trustee I empower my
trustee to;
(a) sell or let any part of parts of my estate or to retain the whole or any part or parts thereof for such period or periods as my trustee in his absolute discretion deems fit without being liable to any losses suffered by my estate because of such retention."
In my view, this power could not be exercised so as to sell property the subject of a specific bequest or legacy. There could be no discretion in the trustee to sell the property by virtue of that power. Counsel for the plaintiff described it as not an attractive proposition. I take the view that not only does the power of sale not extend to these personal chattels but that ultimately the trustee did not support any view that it does.
The second way in which the issue of the power of sale is addressed is in connection with s.63 of the Trustee Act 1958 which is in the following terms:
" 63. Power of Court to authorize dealings with trust property
(1) Where in the management or administration of any property vested in trustees, any sale, lease, mortgage, surrender, release or other disposition, or any purchase, investment, acquisition, expenditure or other transaction, is in the opinion of the Court expedient, but the same cannot be effected by reason of the absence of any power for that purpose vested in the trustees by the trust instrument (if any) or by law, the Court may by order confer upon the trustees, either generally or in any particular instance, the necessary power for the purpose on such terms and subject to such provisions and conditions (if any) as the Court thinks fit and may direct in what manner any money authorized to be expended, and the costs of any transaction are to be paid or borne as between capital and income.
(2)
The Court may from time to time rescind or vary any order made under this section, or may make any new or further order.
(3)
An application to the Court under this section may be made by the trustees, or by any of them, or by any person beneficially interested under the trust."
Self-evidently, the section vests in the Court the power to confer upon trustees lacking a power of sale by virtue of the trust instrument the power to sell if in the opinion of the Court the sale is expedient, on conditions set out in the sub-section. I shall return to this aspect shortly.
Questions numbered 6 and 7 were apparently added to the originating motion as a consequence of some matters that were raised before Harper, J. of this Court at an earlier time. Mr. Boaden expressed little enthusiasm as to this course, either on the basis of doubt whether the Court could declare an unaccepted gift to form part of the residue or on the basis that the facts in this case do not support the conclusion that Norma Wheeler had refused to accept the gift of chattels in clause 2(b). He also appeared to accept to accept there was no evidence of a refusal to accept the bequest made by way of will, although there was some evidence of a refusal to accept proffered gifts of porcelain during the lifetime of the deceased. In my view, on the evidence before me, Normal Wheeler has neither accepted nor refused to accept the antiques, jewellery and porcelain. She has persistently refused to acknowledge correspondence, or engage in any conversation with representatives of the trustees concerning the disposition of her mother's will and estate. This goes so far as a refusal to even sign some relatively innocuous forms in connection with the desire and intention of the State Trustees to pay to her her share of the proceeds of the sale of the Kew house. I am not disposed to infer that her persistent refusal to discuss the issue amounts to a refusal to accept the porcelain, sufficient to groundthe claims being raised.
The case of In Re Young; Fraser v. Young (1913) 1 Ch. 272 raised an issue of disclaimer of a legacy. In that case the trustees held by way of trusts of the will a legacy entrusted for the plaintiff for life, being income, and after her death for her son for life and after his death for the residuary legatees. The plaintiff was apparently annoyed with the terms of the will and told the defendant Young that she preferred to have no interest whatever in the will. The estate's solicitors forwarded a cheque for the interest due which was returned by the plaintiff stating "I made it very plain ... to you and Mr. Young that I have no interest whatever in Miss Young's will and wish for none, so please do not let me be troubled further." Thereafter the income was paid to the plaintiff's son who died some eight years later. After his death the plaintiff's solicitors wrote to the estate solicitors making formal demand for the income since the death of her son. The residuary legatees took the view that the plaintiff had disclaimed her interest and could not retract it. Swinfen Eady, J. held that the plaintiff's refusal to receive the trust income could not be treated on the footing of a disclaimer of the legacy and that, as neither the trustees nor residuary legatees had changed their position on the basis of that refusal, it could be retracted with respect of future income. If anything, the case In Re Young is an even stronger case, as in that case the legatee specifically stated that she had no interest in the will and wished for none and did not wish to be troubled further. In my opinion (and it seems to me that the Trustees do not disagree) the conduct in this case does not amount to a disclaimer or refusal to accept the porcelain.
Essentially, the trustee's position is that it requires direction to enable the estate to be wound up. It wants to know whether or not it should deliver the jewellery, antiques and porcelain in specie to the home of the first defendant or whether it should sell them if empowered by the conferring of the power to sell by the Court pursuant to s.63. It accepts there is a third situation namely that it should continue to retain the gift, presumably properly stored and insured, at the cost of the estate or at the cost of the first defendant.
Ms McOmish, who appeared on behalf of the second defendant, submitted that the porcelain, antiques and jewellery etc. should not be delivered to the first defendant both for security reasons and her physical safety. She submitted that the power should be conferred on the trustees to sell, and they ought to sell, the chattels which would be in the interests of all the beneficiaries. By that she meant that the estate would be better enabled to be wound up and the money held on trust if the chattels were converted to money.
One can understand the dilemma and frustration occasioned to the State Trustees Ltd. by the non-responsive silence or disinclination of the first defendant to address the practical implementation of the testator's wishes and bounty. Although the residuary beneficiaries Geoffrey Wheeler and Diana Morrisby have had an interim distribution of part of the net proceeds of the sale of the Kew House and the other assets and residue, the first defendant has not responded to attempts to distribute her share or part of it to her. The winding-up of the estate has been frustrated by this stance. Although there is some evidence that many years before she had had some form of mental illness, there is no evidence that she is suffering from any mental incapacity of the type relevant to the questions in this proceeding. It may not even be accurate to characterize her behaviour as eccentric, as many elderly people (and she is 75 years of age) are set in their ways and do not wish to be troubled by the burdens and responsibilities of the management of assets which mean nothing to them at this stage of their lives. There is a provisional inclination, I think, to take the view that there is not much to be said in favour of leaving the valuable porcelain and the other chattels sitting in 40 boxes in a warehouse and perhaps to take the view that the conversion of them into money by way of sale is both prudent and practical.
The delivery of the chattels to the first defendant in specie would enable the estate to be finalized virtually immediately and would relieve the trustees of their difficulty. But I am of the view that that course should not be followed. Indeed, it would seem to me that the plaintiff has held a similar view,as the Trustees might have followed that course at any time over the last 12 months. It would have been understandable enough in view of Mrs. Wheeler's failure to respond to all attempts to discuss matters with her. The delivery of 40 boxes of porcelain and perhaps more to a 75-year-old woman living alone in relatively insecure circumstances in Pascoe Vale seems to be the least attractive of the options, carrying with it as it does risks of the kind referred to in the affidavit of Geoffrey Wheeler.
Whilst I think that the circumstances as revealed by the affidavits would probably provide a sufficient basis for me to conclude that it was expedient in the circumstances to confer a power of sale on the trustees pursuant to s.63(1) of the Trustee Act, I do not favour that course at this time. Mrs. Norma Wheeler's apparent disinterest in the porcelain is matched by her apparent disinterest in receiving the moneys due to her from the sale of the Kew home. The turning of the porcelain and antiques into a substantial sum of money removes the imponderables, such as they may be, and the cost of preservation of the porcelain in storage but that is all it does. The testatrix's intention was that her daughter should have these chattels. I am not convinced in my own mind that she will never come to the position where she will take them or some of them, or give directions about it. One cannot have much optimism about that aspect but it seems to me premature to order a sale of the chattels, particularly the porcelain at this point of time. I note that Mrs. Morrisby suggested that one of the boxes should be taken to her mother to see if that produces some altered perspective. I have nothing to say about that but note that the Trustees is a body charged with specific duties. Whilst it endeavours to carry them out without completely ignoring the human elements and questions which arise, it is not the role of the trustees to attempt to negotiate or persuade beneficiaries to act in any particular way.
No solution to the conundrum created by Norma Wheeler's silence is beyond criticism. However, I have reached the conclusion that the better course is to direct that the State Trustees Ltd. continue to hold in storage through such agents or persons who may be authorized by them the chattels referred to in paragraph 2(b) of the will of Invermay Walker. The costs of any safe storage and insurance is to be met from the first-defendant's share of the residue of the estate, first from interest accrued and accruing on the sums invested, but remaining untaken by the first- defendant. If such income is insufficient to meet annual charges, next from capital, the retention of part of which by the State Trustees Ltd. to meet foreseeable future costs of storage and insurance is hereby authorized.
I authorize the Trustees to distribute the balance of the estate moneys less proper commissions and costs due, and to hold any funds due to the first defendant in an account in her name (such as now exists) if she fails or refuses to accept distribution on usual and proper terms. The costs of storage and insurance are to be met as I have indicated.
I propose, subject to hearing from the parties if they choose to be heard, to adjourn this application for not less than 18 months, to be brought on after the expiration of that period on 30 days' notice to the defendants, or at an earlier time with the leave of the Court, on proper grounds. It is my view that if the present situation concerning the chattels remains unchanged, that a further application for their sale should be made. It does not seem appropriate to make a self-executing order. Liberty to the parties to apply.
Before making these proposed orders, I would wish to hear the plaintiff in particular as to their form and substance, as well as on the issue of costs. If there is no different form of order sought, I direct the plaintiff to prepare an order in accordance with what I have indicate.
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