Sutton v Wahlen

[2000] NSWSC 1063

CITATION:	Sutton v Wahlen [2000] NSWSC 1063
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 2967/2000
HEARING DATE(S):	12/10/2000; 02/11/2000 and 14/11/2000
JUDGMENT DATE:	14 November 2000
PARTIES :	Mary Sutton (P) Joyce Wahlen (D)
JUDGMENT OF:	Young J

COUNSEL :	M K Meek (P) No appearance for defendant
SOLICITORS:	Carty & Cox (P)
CATCHWORDS:	SUCCESSION [263]- Realizing estate- Joint executors- One recalcitrant- Procedure to be adopted when one executor requires sale.
LEGISLATION CITED:	Conveyancing Act 1919, s 153 Supreme Court Act 1970, s 100 Trustee Act 1925, ss 5, 63, 81 Wills Probate & Administration Act 1898, ss 84, 85
CASES CITED:	Colyton Investments Pty Ltd v McSorley (1962) 107 CLR 177 Cox v Archer (1964) 110 CLR 1 Re Mayo [1943] Ch 302 Neill v Public Trustee (1978) 2 NSWLR 65
DECISION:	Orders made

THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

YOUNG J

TUESDAY 14 NOVEMBER 2000

2967/2000 - SUTTON v WAHLEN

JUDGMENT

1    HIS HONOUR: The plaintiff and the defendant are daughters and joint executors of the will of the late Ivy May Humphris, who died on 27 May 1999. Probate was granted on 18 October 1999 to the plaintiff and the defendant, who are the sole beneficiaries under the will in the events which have happened.

2    The major asset in the estate is real estate at 3 Lyon Street, Bellingen. The debts of the estate have been paid with the exception of the costs of the solicitor who acted on the probate, which costs total $5987 and which are, of course, a testamentary expense. The estate has thus not been fully administered.

3    The plaintiff wants to sell the real estate to pay the testamentary expenses and so that the estate can be distributed. The evidence shows that despite repeated correspondence and service of the summons in these proceedings, the defendant has declined to respond. She did not appear in the present proceedings.

4 The plaintiff seeks an order to sell the real estate. Strictly speaking, what she is doing is making an application under section 153(4) of the Conveyancing Act 1919. That subsection provides:

"Some or one only of several executors or administrators shall be entitled to exercise such powers with the leave of the court and not otherwise, and the court may make such orders as it thinks fit for the purpose of carrying out any such sale, mortgage, or lease."

5    The reference to "such powers" are powers to sell or mortgage the deceased’s real estate for the purpose of administration.

6 In Colyton Investments Pty Ltd v McSorley (1962) 107 CLR 177 at 185, the High Court made it clear that in an application under this subsection the Court needs to be satisfied of the propriety of any sale, especially the price and the terms of sale, before leave is granted under the subsection. A similar practice is followed when an application is made by a trustee to be empowered to sell under s 81 of the Trustee Act 1925. There the Court does not usually confer an unlimited power of sale but rather sanctions a sale within a certain time, with a certain reserve, on terms which are stated. Alternatively the Court may sanction a specific sale. In either case proper valuation evidence is needed.

7    After initially adjourning the present matter because evidence was not available to satisfy the test, an affidavit was proffered by a local real estate salesperson who said she had a buyer for $10,000 more than the probate valuation. I did not consider that was sufficient and the matter was stood over again.

8    Today, an affidavit of a valuer together with an affidavit setting out the draft contract has been proffered. I am satisfied that the proposed sale is proper and will authorise it.

9    However, because there have in recent years been a plethora of cases where joint executors have not been able to agree on selling, and cases such as the present where one executor just seems to ignore her obligations, it seems to me it would be useful to state the general propositions that guide the Court in this sort of case because this may assist solicitors advising executors so that such matters do not actually reach the Court.

1. It is always vital to consider what stage the administration of the estate has reached. Is the estate fully administered or not? Only if the estate is fully administered are the executors trustees in the true sense. The remedies which must be pursued are different, depending on whether the representatives are still executors or have become trustees.

2. The High Court ruled in the Colyton Investments case that one of several executors acting alone does not have the statutory power of sale. Accordingly, if the matter cannot be resolved, the Court must be approached for the appropriate power.

3. If the estate is not fully administered the remedy may be (though it is not in the present case) an order under ss 84 or 85 of the Wills Probate and Administration Act 1898, or appointment of a receiver of the estate. It may also be simply an order under section 153(4) of the Conveyancing Act 1919.

4. If the estate is fully administered then the proper application may be to remove the trustees or for an order under s 81 of the Trustee Act for empowerment. In either case, s 63 of the Trustee Act 1925 may be available and the executors/trustees can seek judicial advice. Under s 5 of the Trustee Act 1925 the definition of "trustee" for the purposes of that Act includes executors and administrators. However, such an application will not usually obtain the executive order giving power to sell, it will merely remove any barrier there might be between the executors as to what should be done.

6. As I have said earlier, under s 153(4) of the Conveyancing Act the Court will only exercise its power if satisfied on proper evidence that the price and terms of sale are appropriate.

7. Point 6 is equally applicable to trustees of fully administered estates applying under s 81 of the Trustee Act.

8. The Court prefers to authorise a particular transaction or sale within a fixed time, at a particular reserve, and on the basis of a particular form of contract of sale, either by auction or by private treaty.

9. Where property needs to be sold for the purposes of administration or distribution and there is power to sell, but there is no power to postpone sale, executors and trustees have a duty to sell as soon as a fair price can be obtained and within a reasonable time of the grant; see Cox v Archer (1964) 110 CLR 1, 7; Neill v Public Trustee (1978) 2 NSWLR 65, 70 and Ford and Lee on Trusts at para [12180].

10. Where there is power to postpone sale, if the executors or trustees disagree, then, prima facie, the property must be sold as per point 9 because all the executors need to agree to postpone sale; see Re Mayo [1943] Ch 302. However, the Court may otherwise order; see Ford and Lee, op cit at para [12190].

11. Where there needs to be a registered document the Court will authorise one trustee to sell and, on my reading of the section, the Registrar General will accept that order and register the proper transfer accordingly. However, for the sake of peace of mind of the purchasers’ solicitors and mortgagees, it is usually appropriate to include a back up order that the recalcitrant executor or trustee execute the transfer. If that order is disobeyed, the recalcitrant executor or trustee may be fined, or more usually imprisoned, until the order is obeyed unless the plaintiff executor thinks it is more appropriate to apply for an order under s 100 of the Supreme Court Act 1970 authorising execution in lieu of the defendant by a Deputy Registrar.

12. The Court will make an order for costs of any such application that has been occasioned by reason of an executor or trustee failing to meet his or her obligations against that executor or trustee personally, to be retained out of his or her share of the estate.

10    In the instant case the evidence now satisfies me that it is appropriate to make an order. I make orders in accordance with short minutes which I have initialled and dated and placed with the papers.

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Last Modified: 11/21/2000