Wood v Inglis

[2009] NSWSC 1495

CITATION:	Wood v Inglis [2009] NSWSC 1495 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	7 December 2009
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	7 December 2009
DECISION:	Orders for payment of pecuniary legacies
CATCHWORDS:	SUCCESSION – Wills, probate and administration – Construction and effect of testamentary dispositions – whether pecuniary legacies should be paid when belated family provision proceedings foreshadowed – SUCCESSION – Executors and administrators – Removal and discharge – removal of joint executor by consent
LEGISLATION CITED:	(NSW) Family Provision Act 1982 s 16 (NSW) Uniform Civil Procedure Rules r 53.4
CATEGORY:	Consequential orders
CASES CITED:	Wood v Inglis [2009] NSWSC 601
PARTIES:	Pamela Ruth Wood (plaintiff) Helen Margaret Inglis (defendant) First Cross Claim: Helen Margaret Inglis (cross-claimant) Inglis Research Trust P/L (first cross-defendant) Kathryn Margaret Clark (second cross-defendant) Michael William Inglis (third cross-defendant) Pamela Ruth Wood (fourth cross-defendant) Fiona Jane Narlini Inglis (fifth cross-defendant) William Keith Inglis (sixth cross-defendant) Second Cross Claim: Kathryn Margaret Clark (cross-claimant) Helen Margaret Inglis (first cross-defendant) Pamela Ruth Wood (second cross-defendant) Third Cross-Claim: Pamela Ruth Wood (cross-claimant) Helen Margaret Inglis (cross-defendant)
FILE NUMBER(S):	SC 1595/08
COUNSEL:	First Cross Claim: Ms J A Needham SC (plaintiff/fourth cross-defendant) Mr J E Thomson (defendant/cross-claimant) Mr B J Burke (second cross-defendant)
SOLICITORS:	First Cross Claim: DSC Law (plaintiff/fourth cross-defendant) Michael C Smith (defendant/cross-claimant) Courtenay & Co (second cross-defendant) Molloy & Schrader (third cross-defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Monday, 7 December 2009

1595/08 Pamela Ruth Wood v Helen Margaret Inglis

JUDGMENT (ex tempore)

1 HIS HONOUR: By his will dated 7 December 2005, probate of which was granted to the plaintiff Pamela Ruth Wood and the defendant Helen Margaret Inglis on 27 November 2007, the deceased Dr William Inglis inter alia devised his home at 34 Hope Street, Pymble, to his widow, the defendant; gave pecuniary legacies totalling $250,000 ($20,000 each to ten named beneficiaries and $50,000 to his son William Keith Inglis); and left the rest and residue of his estate to his widow, the defendant.

2 At an early stage, when the plaintiff and the defendant were co-operating in administration of the estate, the Hope Street property was transmitted into the defendant’s name, and (in accordance with the residuary gift) the deceased’s share portfolio (valued for probate purposes at $1,153,000, though now said to be worth considerably less) was also transmitted to the defendant. Those transactions had taken place by December 2007. At about the same time, the plaintiff proposed that the pecuniary legacies be paid out of a fund constituted by a refund of a retirement home bond.

3 The relationship between the executrices deteriorated as a result of matters which are the subject of my judgment of 30 June 2009, Wood v Inglis [2009] NSWSC 601. The defendant resisted, at that stage at least, the payment of the pecuniary legacies, on the basis that the sufficiency of the estate to pay them was unclear.

4 Since the judgment of 30 June 2009, the monetary judgment in favour of the deceased’s estate against the first cross-defendant Inglis Research Trust Pty Limited, as well as that in favour of the defendant herself, has been satisfied, although in the first case an appeal is pending. As a result, there is standing to the credit of the estate account some $1,729,000, of which $1,434,000 represents the judgment. In the event that the estate were required to give restitution of the judgment upon a successful appeal from the 30 June 2009 judgment, that would still leave a balance of $295,000. Accordingly, if the appeal does not succeed, then there are plainly sufficient funds to satisfy the pecuniary legacies; and even if the appeal does succeed, prima facie the remaining $295,000 would be sufficient to satisfy them.

5 The deceased’s son, William Keith Inglis, has instituted a claim for provision out of the estate under the (NSW) Family Provision Act 1982. In addition, the deceased’s daughter, Fiona Inglis, has foreshadowed the institution of such a claim, although she has not yet instituted proceedings, and would now require an extension of time under Family Provision Act s 16, to do so. On what little is known to the court, it cannot be said that either of those claims is, or would be, without prospects of success. The result is that if the appeal were to succeed, and the pecuniary legacies were to be paid, then there would be no funds remaining in the estate out of which any successful family provision claim might be satisfied.

6 Against that, the payment of the $50,000 legacy left to William Keith Inglis would to that extent reduce if not satisfy his family provision claim.

7 The plaintiff Mrs Wood accepts that, as she remains an executrix, in the event of a family provision claim succeeding and there being insufficient assets in the estate to satisfy it as a result of a distribution of the estate, she would be personally liable to do so. The defendant Mrs Inglis must be in the same position, having regard to her receipt of the premature distribution of residue in late 2007 when the deceased’s share portfolio was transferred to her.

8 It seems to me that payment of the pecuniary legacies now will not prejudice Mrs Inglis’ interests. At the highest, it would affect the estate’s ability to argue that any family provision order should be borne out of the fund required to meet pecuniary legacies, rather than out of residue. That would be an improbable argument, given the size of the residue in this case, even if one has regard to the now diminished value of the share portfolio. It would leave Mrs Inglis in the position that at least Fiona Inglis, whose family provision application if made would be out of time, would not only have to obtain an extension of time, but would also have to establish special circumstances to obtain a designating order in respect of distributed estate. Moreover, there has to be at least a substantial prospect that the issue will not arise at all as – without endeavouring for a moment to foretell the outcome of the appeal – if the appeal fails, the sufficiency of funds to pay the pecuniary legacies and satisfy any family provision claim is clear enough.

9 While I can see that it is an issue on which minds could reasonably differ, the fact that Mrs Inglis has already received a substantial distribution of residue, as well as the home, in my mind is a telling factor in favour of payment of the pecuniary legacies now. To the extent that that means that Mrs Inglis may have to accept some responsibility for funding the response to the appeal, whether out of the funds that have already been distributed to her or otherwise, I do not think that is an unjust consequence in the context of the early distribution of residue to her.

10 Accordingly:

1. Pursuant to (NSW) Uniform Civil Procedure Rules r 53.4, I order that the defendant and the plaintiff as executors of the will of the late William Inglis do all things on their part necessary to make payments of:

(a) the specific legacy in the will of $20,000 to Carolyn Hagl;

(b) the specific legacy in the will of $50,000 to William Keith Inglis; and

(c) the specific legacies in the will of $20,000 each to Sasha Kate Wood, Vanessa Jane Wood, Mark Alexander Wood, Kathryn Eleanor Wood, Alexander Inglis, Victoria Larsson, Michael Matthew Inglis, Thomas Clark, and Dana Randall.

2. I order that the plaintiff's costs of the claim for relief in prayer 1 of the Summons be paid out of the estate.

On revocation of probate:

11 The cross-claimant, Mrs Inglis, seeks an order for removal of the cross-defendant, Mrs Wood, as an executor, and a fresh grant of probate to herself alone.

12 Mrs Wood maintains that she is willing and able to work with Mrs Inglis in the administration of the estate, and points to the established principle that a testator is entitled to choose his or her executors, even if there is likely to be a conflict between them. But in my view fairly, properly and responsibly, Mrs Wood also, without admission, recognised that in the current circumstances – where a significant part of the residuary estate has already been distributed to Mrs Inglis, where the balance of the residuary estate will (subject to any family provision order) pass to Mrs Inglis, where the transfer of the shares in Inglis Research that were bequeathed to Mrs Wood and Mrs Inglis-Clark has now been made out of court, and where the burden of the family provision claims, if successful, will almost inevitably be borne substantially if not exclusively by Mrs Inglis, who will be their true contradictor – it is appropriate that it be Mrs Inglis who administers the estate in the future.

13 On that basis, and without admissions, Mrs Wood consents to an order revoking the grant of probate to her and to Mrs Inglis, and making a fresh grant to Mrs Inglis alone.

14 I therefore order that the grant of probate made to the plaintiff and the defendant on 27 November 2007 be revoked. In lieu thereof, I order that probate of the will of the late Dr William Inglis of 34 Hope Street, Pymble, in the State of New South Wales, retired medical practitioner, dated 7 December 2005, be granted to the defendant Helen Margaret Inglis. I refer the grant to the Registrar for completion.

15 I order that the third cross-claim be dismissed.

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10/09/2010 - Additional order - Paragraph(s) 10 & 15