Vallelonga v Sorgiovanni

[2017] WASC 323

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   VALLELONGA -v- SORGIOVANNI [2017] WASC 323

CORAM:   MASTER SANDERSON

HEARD:   8 NOVEMBER 2017

DELIVERED          :   10 NOVEMBER 2017

FILE NO/S:   CIV 3177 of 2016

MATTER                :IN THE MATTER of the will and estate of MARIA STELLA GIANINI late of RSL Menora Gardens Residential Aged Care Facility, 51 Alexander Drive, Menora, Western Australia (formerly of 32 O'Neile Parade, Redcliffe, Western Australia) (Dec)

BETWEEN:   ELSIA VALLELONGA

Plaintiff

AND

LEO TONI SORGIOVANNI
First Defendant

FRANCESCO SORGIOVANNI
Second Defendant

PETER SILVESTRI by guardian ad litem XAVIER VINCENZO PASQUALE SILVESTRI
Third Defendant

ANTONIO  SORGIOVANNI
Fourth Defendant

Catchwords:

Probate - appointment of a limited administrator - Turns on own facts

Legislation:

Administration Act 1903 (WA)

Result:

Administrator appointed

Category:    B

Representation:

Counsel:

Plaintiff:     Mr J C Hammond

First Defendant              :     Ms S E Bruce

Second Defendant         :     Ms S E Bruce

Third Defendant            :     Ms L M McFarlane

Fourth Defendant           :     No appearance

Solicitors:

Plaintiff:     Hammond Legal

First Defendant              :     Jackson McDonald

Second Defendant         :     Jackson McDonald

Third Defendant            :     McFarlane Lawyers

Fourth Defendant           :     No appearance

Case(s) referred to in judgment(s):

D'Unienville v Sakalo [No 2] [2013] WASC 469

Fazio v Naso [2016] WASC 385

Goodsall v Keen [2006] NSWSC 1143

Hempseed v Ward [2013] QSC 348

Tomkinson v Hersey (1983) 34 SASR 181

1. MASTER SANDERSON:  By chamber summons filed 24 August 2017, the first and second defendants sought an order appointing an administrator to the estate of the late Maria Stella Gianini 'pending suit'.  The application was made in proceedings where the plaintiff is seeking probate of a will made in 2013 in solemn form.  It is the defendants position the plaintiff lacked testamentary capacity.  They seek to propound a 2001 will.

2. The estate is relatively modest.  It comprises cash held in a number of accounts and a residential property in Redcliffe.  It is this residential property which is causing concern.  As at the date of the death of the deceased, tenants were in the property and they were paying rent.  Those tenants departed in September of 2016.  Since then the property has been vacant.  Evidence led by the first and second defendants indicated the property had fallen into disrepair.  It would seem some work has been undertaken recently on the property by the plaintiff and at least, in so far as the garden is concerned, the property is now in reasonable condition (see exhibit A).  But, the fact remains the Redcliffe property is vacant and it is in the interests of all parties that someone should take control of and be responsible for it.

3. Prior to the hearing the plaintiff had maintained steadfast opposition to the appointment of a limited administrator.  When the matter was called on for hearing, counsel for the plaintiff produced a minute which anticipated the plaintiff being appointed as limited administrator (although counsel maintained she was not to be appointed an administrator at all but simply to be invested with certain powers by the court).  In any event, the position changed.  The parties were really arguing about whether or not the plaintiff should be appointed as administrator or whether an independent third party should be appointed. 

4. The first and second defendants rely on s 35 of the Administration Act 1903.  That section is in the following terms:

   The Court may, pending any proceedings touching the validity of any will, or for obtaining, recalling, or revoking any probate or administration, appoint an administrator of the personal estate and a receiver of the real estate of any deceased person, at such remuneration and with such full or limited powers as the Court may think fit.

5. The appointment of an interim administrator in circumstances such as this case is referred to as a grant of administration pendente lite - that is pending suit.  It is generally said, rather cryptically, that the appointment will only be made if there is sufficient reason to do so.  That is a test applied by Campbell J in Goodsall v Keen [2006] NSWSC 1143. Here both parties are in agreement that an administrator should be appointed. That being so, there are only two real questions. The first is who should be appointed and the second is what powers the appointed person should have.

6. The authorities suggest that as a general rule a party to the dispute ought not be appointed as the administrator.  In Tomkinson v Hersey (1983) 34 SASR 181 Cox J after reviewing the authorities concluded:

   It is hardly surprising that the text books and the few reported decisions on the question are generally opposed to the notion of appointing as an administrator pendente lite someone who is personally and actively involved in the lis itself.  The desirability of having the estate administered by someone who stands quite outside the litigious battle is obvious.  The cases support the Acting Master's conclusion that, as a general rule, a person unconnected with the action is the most suitable person to be appointed as administrator pendente lite (184).

7. That decision was referred to and followed by McMeekin J in Hempseed v Ward [2013] QSC 348.

8. Having said that, in Fazio v Naso [2016] WASC 385 I did appoint one of the parties to the litigation as interim administrator. The application was made for a grant of administration ad colligenda bona defuncti - that is the administrator was to collect the goods of the deceased. In fact, in that case there was litigation on foot between the parties. So it is at least arguable although the application was made on one basis the administrator actually appointed could properly be regarded as an administrator pendente lite.

9. There is not really much value in applying these Latin tags to various appointments of a limited administrator.  They speak from another age.  The appointment of an interim or limited administrator ought in my view be made on the basis that the appointment is in the interests of justice and in the best interests of all parties connected with the estate.

10. The position in Fazio was somewhat different to the position in this case.  The estate was substantial amounting to more than $6 million.  There was a shopping centre with which the administrator appointed was familiar.  The plaintiff's counsel was very experienced and had sought advice from counsel.  Counsel's advice had been followed every step of the way.  I was satisfied appointment of a party to the litigation would not adversely affect the estate.

11. This is a slightly different position.  On the one hand the only asset of the estate which requires the attention of an administrator is a modest dwelling house.  There appears to be no reason why the plaintiff, if directed to engage agents, could not adequately deal with the property.  It is true that there is animosity between the plaintiff and the first and second defendants and whatever steps the plaintiff takes are likely to be carefully scrutinised by the first and second defendants.  But that was the case in Fazio in circumstances where the estate was far more complex than is the case here.

12. If that was the end of the matter I would have been inclined to appoint the plaintiff as administrator.  But there is a complicating factor.  If the Redcliffe property is not disposed of within two years of the date of death of the deceased, it will become subject to the payment of capital gains tax.  The anniversary is fast approaching.  That means someone has to make a decision as to whether the property is to be sold or retained.  The course of litigation to date suggests there is unlikely to be agreement between the plaintiff and the first and second defendants.  That being the case, I am of the view that an independent third party should be appointed.  He can take the necessary taxation advice and if he concludes it is in the interests of the estate to do so he can conduct the sale process.

13. It is not generally the case that a limited grant of administration, be it administration ad colligenda bona defuncti or administration pendente lite, anticipates the sale of part of the property of the estate.  In D'Unienville v Sakalo [No 2] [2013] WASC 469 EM Heenan J outlined the practical application of a limited grant of administration. However, it must be borne in mind that the whole purpose of an interim or limited grant of administration is to advantage the estate. In times gone by the possibility of a capital gains tax assessment may not have been an issue. But in the present day and age such matters can have a significant impact upon an estate. I see no reason to adhere blindly to past decisions when to do so would have a detrimental effect on the estate.

14. Having carefully considered the competing arguments I am satisfied I ought make orders in terms of the first and second defendants' minute.  Mr Ian Blatchford who is proposed as the administrator is very experienced and has been appointed by this court on many occasions in the past.  His charges are reasonable and there is nothing to suggest he will do anything other than what is necessary to preserve the interests of the estate.  He should have the power, if he believes it is in the interests of the estate to do so, to sell the property.  It is not necessary for Mr Blatchford to take steps with respect to funds (the property of the estate) which are held in various accounts.  They are not under threat and there is no need for him to deal with these funds.  To that extent, the minute proposed by the first and second defendants requires amendment.

15. On publication of these reasons I will give the parties the chance to confer as to the precise form of the orders.  So far as costs are concerned they should be reserved.  They can be dealt with once this action is heard and determined.