Tatchell v Soph - [2019] SASC 187

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
TATCHELL & ANOR v SOPH & ANOR
[2019] SASC 187
Judgment of Judge Bochner a Master of the Supreme Court
8 November 2019
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - GRANTS OF PROBATE AND LETTERS OF ADMINISTRATION - TO WHOM PROBATE GRANTED - PASSING OVER OF EXECUTOR AND OTHER MATTERS
Application to pass over executor - costs of professional administrator.
Held: application granted.
Health Practitioner Regulation National Law Act 2010 (SA); Administration and Probate Act 1919 (SA) s 70, referred to.
In the estate of Crane [2005] SASC 379; In the Estate of Thornton (Deceased); Australian Unity Bank Ltd v JT Holdings (SA) Pty Ltd [2019] SASC 49; The Matter of the will of Marjory Ellen Jane Warner, deceased [2019] VSC 656; Re Gambling [1966] SASR 134, considered.

TATCHELL & ANOR v SOPH & ANOR
[2019] SASC 187

The plaintiffs in this matter were named as the executors in the will of Mark David Soph (“the deceased”), who died on 24 September 2018. By this application, they seek orders that they be passed over, and that an administrator be appointed who will be permitted to charge on a fee for service basis.
The deceased was a pharmacist, and prior to his death, operated two pharmacy businesses. This application was dealt with urgently, as, pursuant to s 51 of the Health Practitioner Regulation National Law (SA) Act 2010, a pharmacy business can only be operated by a deceased pharmacist’s personal representative, for a period of 12 months after the death of the pharmacist. At the time that this proceeding was issued, almost 12 months had passed since the deceased’s death.
Given the urgency, I made final orders at the time of the hearing, on 15 September 2019. These are my reasons for making those orders.
Background
The deceased made his last will on 4 August 2017. The validity of this will is not in dispute. The deceased was survived by his two children, the first and second defendants in this matter, and his wife, from whom he was separated.
I understand that at the time of his death, the deceased and his wife were in the process of negotiating a property settlement. By his will, the deceased divided his estate into two equal shares, to be held on trust for each of his children. The trust only vests when the child turns 40.
Probate has not been granted in relation to the will.
Prior to his death, the deceased, was involved in a number of entities. They are:
·The Kapunda Trust (“the Kapunda trust”), through which the deceased operated his two pharmacy businesses. He was the sole trustee of the trust.
·The Pamisoph Trust, of which Pamisoph Pty Ltd is the trustee. The deceased was the sole director and shareholder of Pamisoph Pty Ltd. The Pamisoph Trust largely comprises real property at Stansbury and some managed investments.
·Bladel Pty Ltd (“Bladel”). At the time of his death, the deceased was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Tatchell v Soph

Details

AGLC: Tatchell v Soph [2019] SASC 187
Case: [2019] SASC 187
Decision Date: 8 November 2019

CaseChat Overview and Summary

In the Supreme Court of South Australia, Tatchell v Soph involved an application to pass over the executors of the deceased's estate and consider the costs associated with the professional administration of the estate. The deceased, who had passed away on 4 August 2017, left a will that was not contested. The estate was complex, involving multiple entities such as trusts, companies, and a superannuation fund. The deceased's children and estranged wife were the beneficiaries of the estate. The executors, who were close friends of the deceased, lacked the necessary expertise and understanding to manage the estate effectively, leading to significant intermeddling.

The legal issues in this case centered around whether the Court should exercise its jurisdiction to pass over the named executors and grant letters of administration to a professional administrator. The Court had to consider the due and proper administration of the estate and the interests of the beneficiaries. The Court referenced previous cases such as The Estate of Crane and The Estate of Thornton to determine the appropriate circumstances for passing over an executor. The Court concluded that the complexity of the estate and the inexperience of the named executors justified passing over them in favor of a professional administrator.

The Court granted letters of administration with the will annexed to Mr. Alfio Macolino, a professional administrator, and considered the costs associated with his appointment. The Court's decision was based on the need for efficient management of the estate's complex corporate and other structures. The Court emphasized that even if the named executors had obtained a grant, they would still heavily rely on professional advice. The Court found that the assistance provided by the deceased's accountant and lawyer was insufficient to ensure proper estate administration.

The final orders included the passing over of the named executors and the appointment of Mr. Alfio Macolino as the administrator of the estate. The Court also directed that the costs of the professional administration be assessed and determined in accordance with the relevant legal provisions.

Orders

Orders of the court

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Background

Background to the litigation

Given the urgency, I made final orders at the time of the hearing, on 15 September 2019. These are my reasons for making those orders. Background The deceased made his last will on 4 August 2017. The validity of this will is not in dispute. The deceased was survived by his two children, the first and second defendants in this matter, and his wife, from whom he was separated. I understand that at the time of his death, the deceased and his wife were in the process of negotiating a property settlement. By his will, the deceased divided his estate into two equal shares, to be held on trust for each of his children. The trust only vests when the child turns 40. Probate has not been granted in relation to the will. Prior to his death, the deceased, was involved in a number of entities. They are:·The Kapunda Trust (“the Kapunda trust”), through which the deceased operated his two pharmacy businesses. He was the sole trustee of the trust. ·The Pamisoph Trust, of which Pamisoph Pty Ltd is the trustee. The deceased was the sole director and shareholder of Pamisoph Pty Ltd. The Pamisoph Trust largely comprises real property at Stansbury and some managed investments. ·Bladel Pty Ltd (“Bladel”). At the time of his death, the deceased was a director of Bladel jointly with his wife. He held 4 shares in Bladel and his wife held 2 shares. ·The Soph Family Trust (“the family trust”), of which Bladel is the trustee. The family trust receives distributions from the Kapunda trust.·Blandford Pty Ltd (“Blandford”). At the time of his death, the deceased was a director of Blandford jointly with his wife, and he held 6 shares while she held 2 shares. Blandford receives distributions from the family trust and has retained earnings and unpaid entitlement loans to the family trust.·The Bladel Super Fund (“the super fund”). The members and trustees of this self-managed superannuation fund were the deceased and his wife.[1][1] See FDN 5 at [4]. There is no doubt that the administration of the deceased’s estate will be complex. The plaintiffs and the administration of the estate to date The plaintiffs were close friends of the deceased, and agreed to act as his executors after his separation from his wife. After the deceased’s death, they met with the defendants, and the deceased’s accountant, Ms Alderman and lawyer, Mr Hart. From that time onward, the plaintiffs acted very much at the direction of Ms Alderman and Mr Hart. It appears that they did not understand the gravity and importance of their task as executors, had no previous understanding of the deceased’s financial affairs, and little understanding of the business structure in place, even once it had been explained to them. They allowed Ms Alderman to make the day to day decisions in relation to the estate, and they simply “signed off” on them. I do not set out in full the actions undertaken by the plaintiffs in relation to the deceased’s estate. They are described in detail in FDN 3 and FDN 6. Suffice to say that there has been significant intermeddling.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Mr Alfio Macolino has now consented to act as administrator of the estate. All of the parties also consent to his appointment. All of the parties consider it appropriate that the estate be administered by a legal practitioner experienced in such matters. Consideration In The Estate of Crane,[2] Besanko J set out the circumstances in which the Court would be prepared to make an order passing over an executor named in a will. He said:In my opinion, this Court does have jurisdiction in limited circumstances to pass over an executor named in a will. That jurisdiction is given to this Court by s 18 of the SCA and the provisions of the Administration and Probate Act 1919. This Court also has the power to remove an executor who has been given a grant of probate. The more difficult question is when the jurisdiction will be exercised. Two general principles may be stated at the outset. First, it is clearly established that a Court will not readily pass over a named executor and, in general, a person who is named as executor by a testator is entitled to a grant of probate. Section 67 of the Testamentary Causes Act 1867 refers to “special circumstances” and the jurisdiction to pass over an executor is properly described as a limited jurisdiction. Secondly, when a court does exercise the jurisdiction it does so having regard to the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate.[3] [2] [2005] SASC 379.[3] [2005] SASC 379 at [23]-[24]. He went on to reiterate:In considering whether this is an appropriate case to exercise the jurisdiction to pass over Kevin, I must have regard to the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate. That is the guiding principle.[4][4] [2005] SASC 379 at [40]. Besanko J’s decision has been relied on numerous times since then, most recently in South Australia, in The Estate of Thornton (Deceased); Australian Unity Bank Ltd v JT Holdings (SA) Pty Ltd[5] and in Victoria in The Matter of the will of Marjory Ellen Jane Warner, deceased.[6][5] [2019] SASC 49.[6] [2019] VSC 656. It is clear to me that, having regard to the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate, the plaintiffs should be passed over, and letters of administration with the will annexed should be granted to Mr Macolino. This estate is a complex one, with interacting corporate and other vehicles which need to be managed efficiently. Even if the plaintiffs obtained a grant in their favour, they would be heavily reliant on professional advice. Without meaning any disrespect to the plaintiffs, it is clear that they lack the expertise and knowledge to administer an estate of the complexity of the deceased’s. It is also clear that the assistance that they received from Ms Alderman and Mr Hart, while well intentioned, was not sufficient to ensure that the estate was administered in an appropriate fashion.