Uniting Church in Australia Property Trust (NSW) v Millane

[2002] NSWSC 1070

CITATION:	Uniting Church v Millane [2002] NSWSC 1070
CURRENT JURISDICTION:	Equity Division Probate List
FILE NUMBER(S):	SC 112864 of 2002
HEARING DATE(S):	11 November 2002
JUDGMENT DATE:	13 November 2002
PARTIES :	The United Church in Australia Property Trust (NSW) (First Plaintiff) Brian Melville Banfield (Second Plaintiff) John Carey Millane (Defendant)
JUDGMENT OF:	Windeyer J at 1

COUNSEL :	Mr C Harris (Plaintiffs) Mr P Hallen SC (Defendant)
SOLICITORS:	Hunt and Hunt (Plaintiffs) Kemp Strang (Defendant)
CATCHWORDS:	SUCCESSION - probate - claim for summary dismissal - claim for probate by 2 of 3 executors seeking that the defendant executor be passed over on the grounds of pleaded unconscionable conduct towards deceased - whether defendant not competent to take a grant - whether inherent power to refuse grant could be exercised
LEGISLATION CITED:	Administration and Probate Act 1958 (Vic), s34(1) Supreme Court Rules Pt13 r5 Wills Probate and Administration Act 1898 s74
CASES CITED:	Bowler v Bowler unreported Young J 7 June 1990 In Re Hunter (deceased) Hunter v Hunter [1932] NZLR 911 Monty Financial Services Limited v Delmo [1996] 1 VR 65
DECISION:	See paragraphs 11 and 12

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
PROBATE LIST

WINDEYER J

WEDNESDAY 13 NOVEMBER 2002

112864/02 THE UNITING CHURCH IN AUSTRALIA PROPERTY TRUST (NSW) & ANOR V JOHN CAREY MILLANE RE THE ESTATE OF OTTERLEY LYNDA MAY RITCHIE

JUDGMENT

Outline

1 The two plaintiffs and the defendant are the three executors named in a will dated 16 March 2000 of Otterley Lynda May Ritchie who died on 11 March 2001.

2 By statement of claim filed on 19 August 2002 the plaintiffs seek a declaration that the defendant is not competent to take probate and an order that probate be granted to them. In the alternative, they seek an order that they be granted probate with leave reserved to the defendant to come in and prove after proceedings against him on behalf of the estate have been concluded.

Issue

3 By notice of motion filed on 16 October 2002, the defendant seeks to have the proceedings dismissed pursuant to Pt13 r5 of the Supreme Court Rules on the basis that they are doomed to fail.

Pleaded facts

4 The basis of the plaintiffs’ claim is as follows:

(a) The deceased and the defendant purchased a property, 28 Austin Street Lane Cove as joint tenants. The whole of the purchase money of $950,000 was paid by the deceased. At one stage it was apparently intended to develop the property.

(b) The joint tenancy was severed by a deed made on 11 February 2000 pursuant to which the deceased and the defendant took the property as tenants in common in equal shares.

(c) By contract of sale dated 4 November 2000 the property was sold for $1,325,000.

(d) On 11 February 2001 the deceased signed a direction under which the solicitor acting on the sale was directed to pay the deceased’s half share of the proceeds of sale of a North Sydney property, less $105,000 to the defendant. It is alleged by the defendant that the reference to the North Sydney property was a mistake and was intended to refer to the Austin Street property.

(e) By deed dated 21 February 2001 the deed of 15 February 2000 was revoked and purportedly the title to Austin Street was restored to a joint tenancy. The sale of that property was completed on 2 March 2001 and the defendant received the moneys.

5 In the statement of claim it is alleged that the defendant was guilty of unconscionable conduct in bringing about the result obtained so that if he obtains a grant of probate it would not be possible to commence proceedings against him on behalf of the estate without his consent which he would be unlikely to give.

6 Counsel for the plaintiff, being the respondent to the motion, says that the relief claimed, namely a grant to two out of three named executors can be given either pursuant to s74 of the Wills Probate and Administration Act 1898 on the basis that the defendant is not a “competent” person, or under the inherent jurisdiction of the court. Section 74 in its terms does not really apply because the purpose of that section is to appoint an administrator if a person dies leaving a will having appointed an executor where such executor is not willing and competent to take out probate. In this case there is no need to exercise the power under s74 because there are at least two named executors competent and willing to take probate. In ordinary terms competent would mean a person not disqualified by infancy or lunacy or the like. These questions were discussed by Young J in Bowler v Bowler (unreported 7 June 1990) when he made it clear that generally all executors named are entitled to apply for a grant and only in very special circumstances can a named person be passed over.

7 Counsel for the plaintiff relied on two decisions. The first was In Re Hunter (deceased) Hunter v Hunter [1932] NZLR 911. In that case the New Zealand Court of Appeal held that there was power to pass over a named executor as incompetent if that person had so misconducted himself in relation to the estate as to show he was not a proper person to be entrusted with its administration. In the same way the court said that if after an executor has been granted probate he is found to be guilty of such misconduct in his office as renders it proper to remove him then he should be removed. There can be no doubt about any of this but the fact that an equitable type claim is pleaded in a statement of claim in probate proceedings, does not in my view give sufficient ground to pass over a named executor. Proved misconduct is very different from pleaded misconduct. It would be highly undesirable if the administration of estates were delayed by having to determine in prior proceedings or perhaps in the same proceedings, disputed claims of unconscionable conduct as would be the position here.

8 I should add to this that if the defendant were to misconduct himself as an executor then he could be removed. If he did not consent to the other executors bringing proceedings against him on behalf of the estate, then there is no doubt that the court would allow proceedings to be brought by the other executors or by the beneficiaries on behalf of the estate, if those executors refused to bring appropriate proceedings. Thus the fact that there could be some conflict of interest does not in itself justify passing over a named executor who wishes to take a grant. Many executors named and appointed have some conflict such as being a debtor to the estate. That does not justify their being passed over. Counsel also placed reliance on the Victorian case of Monty Financial Services Limited v Delmo [1996] 1 VR 65. That was a case for removal of an executor on the ground that he was unfit to act. Section 34(1) of the Administration and Probate Act 1958 (Vic) gave the relevant power. This section referred to removal of an appointed executor who was “unfit to act in office”. While I do not think that s74(1) is really relevant to the present question, unfitness and questions of competence are not necessarily the same thing.

9 The proper course in proceedings such as this is, in ordinary circumstances, to assume that a person named by a deceased person as his or her executor will act properly and that the testator expects that person will do so. The proper course is not to have some prior determination of proceedings which will properly arise in the administration of the estate of the deceased person. It is my view that the proceedings as constituted are bound to fail and ought to be dismissed.

10 The proper order is that the proceedings be dismissed and that the respondent/plaintiffs pay the applicant/defendant’s costs. Whether or not they will be entitled to an indemnity out of the estate is something which need not be considered at this stage as the beneficiaries may well agree to this.

11 The applicant has asked for indemnity costs. Counsel points to some correspondence as to this, but really that only goes to assert the strength of the defendant’s position. I do not think that it could be said that the action of the plaintiffs in bringing the proceedings which they have, was such as to justify an order for indemnity costs. In particular I would not be prepared to make such an order as that would presumably involve the plaintiffs paying the fees of senior counsel on this application as I would not necessarily consider such fees justified, although they may be.

Last Modified: 11/22/2002