SZWECOW v Wojcik
[2003] WASC 95
SZWECOW -v- WOJCIK [2003] WASC 95
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 95 | |
| Case No: | CIV:2036/2001 | 5 MAY 2003 | |
| Coram: | BARKER J | 28/05/03 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Orders made for final administration of deceased estate | ||
| B | |||
| PDF Version |
| Parties: | JAN SZWECOW PIOTR SIGMUND WOJCIK |
Catchwords: | Wills Trustees Delay in administration of estate Originating summons for orders that will achieve final distribution of deceased estate |
Legislation: | Trustees Act 1962 (WA), s 92, s 94 |
Case References: | Nil Biviano v Natoli (1998) 43 NSWLR 695 Forgeard v Shanahan (1994) 35 NSWLR 206 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
and
Administration of the Will of IRENE WOJCIK (DEC)
- Applicant
AND
PIOTR SIGMUND WOJCIK
Respondent
Catchwords:
Wills - Trustees - Delay in administration of estate - Originating summons for orders that will achieve final distribution of deceased estate
Legislation:
Trustees Act 1962 (WA), s 92, s 94
(Page 2)
Result:
Orders made for final administration of deceased estate
Category: B
Representation:
Counsel:
Applicant : Mr H O Moser
Respondent : In person
Solicitors:
Applicant : Sutherland Legal
Respondent : In person
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Biviano v Natoli (1998) 43 NSWLR 695
Forgeard v Shanahan (1994) 35 NSWLR 206
(Page 3)
1 BARKER J: By an originating summons dated 23 July 2001, Mr Jan Szwecow (the applicant) seeks orders that will result in the final distribution of the estate of the late Irene Wojcik in accordance with the provisions of her will dated 23 October 1968.
2 The deceased died on 12 March 1998. By her will, the deceased appointed her sons, the applicant and Mr Piotr Sigmund Wojcik (the respondent), to be the executors and trustees of her will. She bequeathed "all cash held by me in my house at my death" to the applicant. She devised and bequeathed the rest and residue of her estate to her trustees upon trust to pay therefrom her just debts, funeral and testamentary expenses and subject thereto to hold the same upon trust:
"for themselves my said sons as tenants in common in the following proportions namely:
(a) to the said [respondent] three equal one-quarter shares thereof and
(b) to the said [applicant] the remaining equal one-quarter share thereof."
4 At the time of her death, it appears that the deceased's estate comprised some cash held by her at her house, money standing to her credit in certain building society and bank accounts, the contents and personal effects to be found in her home, as well as the house and land at 83 David Street, Albany.
5 The applicant and the respondent are brothers or, more precisely, half-brothers, in that the deceased was their mother, but their fathers were different. The applicant is older than the respondent.
6 Following the death of their mother, probate of the will of the deceased was granted to the applicant on 26 November 1998, with leave reserved to the respondent to apply for probate. Subsequently, in April 1999, the respondent elected to apply for probate. In between the applications of the applicant and the respondent respectively for grants of probate, there was a degree of conflict between the two men, which has
(Page 4)
- resulted in a delay of the final administration of the estate of their late mother.
7 The applicant now seeks the following orders in respect of the estate which are designed to overcome the delay in its final administration:
(1) The respondent deliver to the applicant all cash funds located at 83 David Street, Albany on 12 March 1998.
(2) The respondent deliver to the applicant's solicitor all passbooks, term deposit and other bank account and investment records of the estate and sign such documents as may be necessary to place all funds currently held in bank accounts, term deposit and other investments of whatever nature in the trust account of the applicant's solicitor, to be held on trust for the estate for distribution in accordance with these orders.
(3) The property situated at 83 David Street, Albany be sold by public auction.
(4) The proceeds of sale of the property at 83 David Street, Albany be applied as follows:
(a) in discharge of any valuation, selling and advertising expenses
(b) in payment and/or reimbursement of each party's legal fees in connection with the administration of the estate only
(c) the balance to be paid into the trust account of the applicant's solicitor for distribution in accordance with these orders
(5) The funds held for the estate in the trust account of the applicant's solicitor, including any interest accrued on them since 12 March 1998 be disbursed to the parties as follows:
(a) as to 25 per cent to the applicant
(b) as to 75 per cent to the respondent
(6) From the amount receivable by the respondent pursuant to (5) the respondent is to pay and discharge all liabilities by way of rates, taxes and utility charges in respect of the property at 83 David Street, Albany and is to indemnify the applicant and the estate and keep them indemnified from and against those costs and expenses and the applicant's costs of and incidental to this application.
(Page 5)
- (7) Any interest accrued on the funds referred to in (5) be paid to the applicant.
- A further order was initially sought in the originating summons in a par (8), but was not pursued at the hearing. The applicant also seeks an order that the respondent, within seven days sign all documents and deliver them to the applicant's solicitor that are necessary or required to be signed to perfect the orders hereby made.
8 The applicant appears to seek these orders pursuant to either or a combination of s 92 and s 94 of the Trustees Act 1962 (WA). By s 92(1), any trustee may apply to the Court for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee. While the term "trustee" does not appear to be identified in the Trustees Act, it is clear the applicant is a trustee under the will of the deceased and has standing to make an application for directions concerning the property the subject of the deceased's estate pursuant to s 92.
9 The applicant also appears to seek orders against the respondent pursuant to s 94 of the Trustees Act 1962 on the basis that that provision is applicable to the respondent as one of the executors and trustees to whom probate of the will of the deceased has been granted. By s 94(1), any person who has, directly or indirectly, an interest in any trust property and who is aggrieved by any act, omission or decision of a trustee in the exercise of any power conferred by the Act may apply to the Court to review the act, omission or decision, or to give directions in respect of an apprehended act, omission or decision. The Court may also require the trustee to appear before it and to substantiate and uphold the grounds of the act, omission or decision that is being reviewed, and may make such order in the premises as the circumstances of the case may require. Each of the respondent and the applicant are trustees under the will. The complaint of the applicant is that the respondent has, in effect, frustrated the winding up of the estate by failing to co-operate with the applicant's reasonable requests or demands as executor and trustee of the will.
10 At the hearing, it appeared that there was little left between the applicant and the respondent by way of matters in dispute. It was apparent on the affidavits made by the parties and relied on by them at the hearing, and from their oral evidence, particularly in cross-examination, that each now agrees that the estate of their late mother should be wound up as soon as possible.
(Page 6)
11 In particular, the respondent did not object to an order being made in terms of (1) above. He indicated, and there is no evidence to suggest that his account is false or misleading, that the deceased only left a small amount of cash in her home at 83 David Street, Albany at the time of her passing. He estimated something in the order of $50 in notes and coins was left in the house and remains there. The respondent is prepared to deliver those cash funds to the applicant. The reason why this accounting has not taken place until the hearing of this application is explained in part by the events described below. It is unfortunate that, by reason of suspicions that developed between the applicant and the respondent soon after the death of their mother, this and other issues were not resolved sooner.
12 It also appears that the respondent is prepared to hand over all passbooks, term deposit and other bank account investment records of the estate as may be in his possession as requested in (2) above. He is presently holding funds belonging to the estate in an ANZ Bank account. He apparently took control of a bank account and the records relating to it that the deceased had maintained with the Commonwealth Bank of Australia. He had them placed into the ANZ Bank account maintained in his name. He holds records relating to the old Commonwealth Bank accounts and is prepared to provide them, as well as the records relating to the current accounts held with the ANZ Bank, to the applicant to enable the estate to be wound up.
13 Apart from the house and land at 83 David Street, Albany, to which I will return shortly, the only other property belonging to the estate is the contents of the house and personal effects of the deceased to be found at 83 David Street, Albany. These have already been dealt with and the respondent has accounted to the applicant in respect of them. The contents and personal effects are agreed to have a value of approximately $1000. Under the terms of the will, the applicant is entitled to 25 per cent thereof. The respondent said in evidence that he caused a cheque for $250 to be forwarded to the applicant in this regard. The applicant denies receiving a cheque for that sum from the respondent or his solicitors. The respondent stated that he had obtained a bank cheque from the ANZ Bank payable in favour of the applicant for that sum and had asked his solicitors at the time to forward it to the applicant. The respondent produced a bank slip from the ANZ Bank which appears to confirm the fact that he had obtained a bank cheque for the sum of $250 from the ANZ Bank. There is no evidence before the Court that the solicitors then acting for the respondent forwarded that cheque either to the solicitors then acting for the applicant, or to the applicant personally. However, there is no
(Page 7)
- evidence that any inquiry has been made of the applicant's then solicitors to clarify the respondent's claim. In these circumstances, I am not prepared to make any findings concerning the payment or non-payment of the $250.
14 As to the house and land at 83 David Street, Albany, the parties are now in agreement that that land should be sold. The question is whether it should be sold by public auction or by some other means. The parties are agreed that the respondent should have the opportunity to purchase the interest of the applicant in the property, rather than have the property put up for sale at public auction or by some other means. The evidence of Grant Solomon, practising valuer, before the Court shows that, as of November 2002, the property had a value of $160,000. The applicant says that the value of the property has not changed between the date of the valuation and the date of the hearing. The respondent does not suggest that the value at the date of the hearing is any different from the $160,000 valuation placed on it by Mr Solomon in November 2002. The question is whether the respondent wishes to purchase the applicant's 25 per cent interest in it and, if so, at what price. Subject to what is stated below, I am prepared to order that the respondent should have the opportunity to purchase the applicant's interest in the property.
15 The applicant says that all proper expenses on effecting a sale of the property should be deducted from the proceeds of sale before distribution of those proceeds in accordance with the will. However, the applicant says that there should be an exception in respect of the rates, taxes and utility charges that have been incurred in respect of the property since the date of death of the deceased - a period of approximately five years. The applicant says that, if the respondent had not frustrated the administration of the estate, those rates, taxes and utility charges would not have been incurred and he would not now be called upon, in effect, to meet 25 per cent of those charges. It was in respect of this issue that the parties were most concerned at the hearing of the application.
16 The applicant gave evidence as to this issue. He relied on his affidavit previously sworn and filed in the proceedings and dated 23 July 2001. He was cross-examined on the content of the affidavit by the respondent, who appeared in person. The applicant says that, notwithstanding attempts by his solicitor at various times to have the respondent, either personally or through the solicitors who at various times acted for him, to co-operate in the administration of the estate, he refused or neglected to do so. The applicant produced correspondence said by him to establish the respondent's marked delay.
(Page 8)
17 While in some respects it appears that the respondent did not, either personally or through his solicitors, deal with responses to proposals or requests for assistance in relation to the administration of the estate promptly after the applicant first obtained probate of the will, I am not satisfied that the extent of his conduct is such that I should make an order that the respondent should bear the cost of all of the outgoings in respect of rates, taxes and utility charges related to the Albany property from the date of the death of the deceased.
18 From the outset, the applicant and the respondent appear to have fallen into an unfortunate dispute concerning the will and the estate. The applicant says that, soon after the death of their mother, the applicant and the respondent met to discuss the terms of the will. The applicant says that he believed the respondent was unhappy with the fact that he only received three-quarters of the residuary estate and not all of it. On the other hand, the respondent says that, upon the will being read, the applicant was unhappy with the fact that he was only to receive a one-quarter share of the residuary estate and not more of it.
19 I do not think it profitable to make any judgment about where the truth of the matter lies as to what the two brothers said to each other in the period immediately following the death of their mother. Each of the men presented before me and gave his evidence in good faith and attempted to recall, as best he could, events that occurred some five years ago. However, what is clear is that soon after the death of their mother, the respondent obtained her will from Haynes Robinson, solicitors in Albany, who held the will of the deceased, and met with the applicant. Both then lived in Albany. The original will was provided to the applicant, who later took it to his solicitor for advice. He consulted Mr Christopher J Cook, a sole practitioner in Albany. By letter dated 28 May 1998, Mr Cook wrote to the respondent concerning the estate of their late mother. The letter discloses that, by the end of May, the applicant entertained suspicions concerning the respondent. On behalf of the applicant, Mr Cook stated in his letter to the respondent (in material parts):
"As you can see, the Will provides that all cash in the house at the date of your mother's death is to pass to my client. My client is aware that you removed the bundle of cash from the house and it will be necessary to bring that [to] account in the probate documents.
…
(Page 9)
- However, I understand you have told my client that you wish to seek the whole of the balance of the estate and it would seem you wish to keep all the cash in the house, so that my client gets nothing under the Will.
… Your late mother made the Will in 1968 when you were much younger and failed to change it to take into account the respective mature years of both yourself and your step-brother.
My client seeks your agreement to assist with the winding up of the estate of your late mother and the distribution of the assets according to her Will.
However, if you do not agree, then my client will proceed to exercise his rights at law without further notice and this letter will be used in connection with an application for the costs put to my client in that regard.
Further, my client may consider challenging the Will himself on the grounds that since the Will has been made:
1. you have received certain loans from your deceased mother and advances which have not been repaid and need to be brought to account;
2. except for approximately three years prior to the death of your late mother, you lived in Perth and my client made a significant contribution to the day-to-day care and welfare of your late mother, which should be recognised in the distribution of her estate.
Accordingly, my client would maintain that your late mother's property should be distributed to you in equal shares.
I should be pleased to hear from you or your solicitor as a matter of some urgency as my client, as well as you, have a legal duty to carry out your mother's wishes expressed in her Will without delay."
20 The demands made in this letter did not receive a prompt reply from the respondent, who said in evidence that he was offended by the terms of the letter as the allegations made in it were untrue. In my view, they set the scene for a degree of disputation.
(Page 10)
21 Before me, the question whether the respondent had "removed the bundle of cash from the house" after the death of the deceased, as alleged in the letter, was explored. It soon became apparent that there was no basis for that allegation, apart from a suspicion of the applicant that his late mother had, at one time, a practice of holding large amounts of cash in the house. At the date of her death, the evidence was that she held most of her moneys in a Home Building Society account and in Commonwealth Bank accounts and it totalled about $40,000. Accordingly, on the evidence before me, there is no basis to the allegation that the respondent removed a bundle of cash from the house. As noted above, it appears that there is only a small amount of cash in notes and coins totalling somewhere in the vicinity of $50.
22 The further allegation in the letter that the respondent had received "certain loans" from the deceased and advances which had not been repaid, was also explored in the hearing before me. On the evidence before me, there is no basis to suggest that the respondent is liable to repay any moneys to the estate of the deceased. It appears that the deceased may have gifted some moneys to the son of the deceased to enable him to purchase a motor car, but in other respects there is no substance to the allegation that loans were made to him by the deceased which remain outstanding.
23 Unfortunately, the disputation which developed between the parties after their mother's passing was not quickly resolved. As the letter of Mr Cook makes clear, the applicant believed that the respondent wanted the whole of the estate and was not content to accept the 75 per cent share given to him under the will and the applicant seemingly responded to that perception by demanding a half share of the estate.
24 The applicant soon after obtained probate of the will. The parties' solicitors then exchanged correspondence or the solicitors for the applicant dealt with the respondent directly in relation to the administration of the estate. The respondent cross-examined the applicant extensively concerning much of this correspondence. It appears that, at particular times, the solicitors acting for the parties dealt with settlement proposals put forward on behalf of the applicant that involved the applicant receiving a cash payment in return for the respondent becoming the sole owner of the David Street property.
25 On the face of it, some of the settlement proposals put forward on behalf of the applicant reflected a desire on his part to receive something greater than a 25 per cent share in the total value of the estate, as provided
(Page 11)
- for by the will. At least one of those proposals put forward by Mr Cook on his behalf was said by the applicant to have been a "mistake", that is to say, a proposal not authorised by the applicant.
26 Be that as it may, the fact of the matter is that the parties continued to engage in negotiations and disputation as to the proper way in which the estate should finally be administered. On the evidence I have heard, I am not satisfied that I should make an order which penalises one party as against the other for the manner in which they conducted those negotiations, or the delays said by the applicant to be attributable to the respondent in the winding-up of the estate.
27 It is unfortunate that there has been a five-year delay in the winding-up of the estate since the passing of the mother of the parties. I consider that the delays have been largely attributable to the early distrust that arose between the parties soon after the death of their mother. It may well have existed prior thereto. While it may be observed that, over the past two years or so, the respondent has been less than active in assisting in the winding up of the estate, it is also plain that, during this period, he has at times been without legal representation and has attended to matters by himself and has been unwell.
28 All in all, I do not consider that any order, apart from that requiring the sale of the David Street property, is called for.
29 In my view, the most appropriate order is that the David Street property be sold by public auction. However, I am prepared to make provision for the respondent to purchase the applicant's 25 per cent in that property on the basis that the property is currently worth $160,000. I am not prepared to accede to a submission of the respondent that he should be permitted to purchase the applicant's interest on the basis of the property's value at his mother's date of death. It will be necessary for the respondent to make an unconditional election to purchase the applicant's 25 per cent interest in the property for the sum of $40,000 within 30 days of the date of this order. Thirty days provides a sufficient time for the respondent to confirm his financing arrangements. It will then be necessary for that sum to be paid to the applicant within a further 30 days of that election being exercised. In the event that these terms are not met, then the property should be sold by public auction, essentially on the terms proposed in order (4) above.
30 I will hear further from the parties as to the formal terms of this order.
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