Lucas v Konakas [2014] NSWSC 786
Executor Trustee Australia Ltd v McDougall (2011) 110 SASR 462
Source
Original judgment source is linked above.
Catchwords
Lucas v Konakas [2014] NSWSC 786
Executor Trustee Australia Ltd v McDougall (2011) 110 SASR 462
Judgment (4 paragraphs)
[1]
Judgment
These proceedings concern the administration of the estate of Philip Charles Tomlinson Mack (the deceased), who died on 9 April 2019.
The first and second Plaintiffs, Ian Henry Mack and Paul Godfrey Hickman, are the executors named in the Will dated 23 June 2016 of the deceased, to whom the Court granted Probate on 6 May 2019. The third Plaintiff named in the Summons, to which reference will be made, is John Anthony Snelgrove, the solicitor who had acted for the deceased for many years, and who was the substitute executor named in Clause 2 of the deceased's Will, in the event that one, other, or both, of the executors, was, or were, unable, or unwilling, to act.
By Summons filed on 14 October 2022, the Plaintiffs seek, inter alia, an order for revocation of the grant of Probate, accompanied by an order for a fresh grant of administration with the deceased's Will annexed, being made to the first and third Plaintiffs. In broad summary, the application is based upon the second Plaintiff's desire to relinquish his position as one of the executors, that is to say, he no longer wishes to be involved with the ongoing administration of the deceased's estate and the attendant obligations in relation thereto, particularly as the administration is likely to continue for an extended period.
Nothing in the evidence that has been filed and served suggests any misconduct, unjustified delay, ineffective co-operation among the joint executors, or any conflict of interest and duty. This is not a case of an unfit, or recalcitrant, executor.
The deceased was a successful businessman and conducted his business affairs though, or companies associated with, the Mainmark Group of companies and trusts. The deceased was the founder of the Mainmark Group which has business operations in Australia, New Zealand, Japan and the United Kingdom.
Bates v Messner [2022] NSWSC 1629 | Case summary | Zoe
In August 2021, the second Plaintiff resigned his position as Chief Executive Officer, and director, of the companies within the Mainmark Group, for what were said to be "personal and health reasons".
The matter was referred to me by the acting Senior Deputy Registrar in Probate, perhaps because there is a question concerning the revocation of the grant of Probate, and also because the third Plaintiff is, in effect, currently, a stranger (in the Probate sense) to the estate. A question that arises is whether he could be appointed as a joint administrator, with one of the executors named in the deceased's Will, if Probate were revoked and letters of administration, with the deceased's Will annexed, were to be granted.
There is no Defendant named in the Summons and there is said to be no person who opposes the Plaintiffs' application. There is a difficulty in finding someone with a sufficient interest to oppose the relief sought since, relevantly, the beneficiaries named in the Will are his widow, Tanakorn Meaw Mack, and the three sons of the deceased, being the first Plaintiff, Ian Mack, Robert Mack and David Mack. Each is said to have signed a Consent to the orders proposed.
The matter was first in the Succession List on Friday, 18 November 2022. Mr B DeBuse of counsel appeared for the Plaintiffs.
On that occasion, I raised a number of matters. First, I required the original Probate parchment to be delivered to the Court. This requirement was met almost immediately, and it has been placed in the Court file.
Second, there was no evidence, from the second Plaintiff going to the matters stated in the affidavit of the third Plaintiff. In response, counsel tendered a copy of a letter, dated 10 August 2022, addressed to the first Defendant, and signed by the second Plaintiff, which I marked as Ex. A, and which I have also placed with the Court papers.
In the copy letter, the second Plaintiff stated his understanding of the steps that had been taken to administer the deceased's estate to that date; confirmed that he had, effectively, retired from his occupation, "for personal and health reasons"; that he considered himself "retired from business"; stated that he would be content to sign such documents as were necessary to enable him to cease to be a joint executor; and finally, he believed "that it is in the best interests of the estate, that I cease in my role as joint executor".
Subsequently, the second Plaintiff filed an affidavit, sworn on 22 November 2022, which outlined the matters referred to in the copy letter being Ex. A. Commendably, the second Plaintiff also confirmed that he would need to approve the estate's financials, and the income tax return, in each case, for the financial year ending 30 June 2022.
Third, I commented that the Consent of each of the beneficiaries named in the Will of the deceased, a copy of which had been annexed to the affidavit affirmed on 7 October 2022 of the third Plaintiff, had an illegible signature (albeit the name of the beneficiary typed underneath), which had not been witnessed by any party. (Whilst I am not aware of a specific requirement for the signature of a person who signs a consent to have been witnessed, when it is witnessed, there is someone who sees what has happened and who bears witness to the consent actually having been given. This eliminates any risk of forgery of the signature and the consequent failure to obtain consent.)
Subsequently, on 28 November 2022, the Court received an affidavit sworn by Ms J Kim, a solicitor in the employ of the Plaintiffs' solicitors, to which affidavit was annexed signed consents from each of the four beneficiaries, the signature of each having been witnessed by her in accordance with s 14G of the Electronic Transactions Act 2000 (NSW). I am now satisfied that Ms Kim observed each of the beneficiaries, being Ian Henry Mack, Robert Charles Mack, David Mack and Tanakorn Mack, sign a Consent, respectively.
[2]
Some general principles
A grant of Probate, or administration, is a judicial act, and becomes an order of the Court. A grant in common form, or a non-contentious grant, is usually, and in this case, was, made by a Registrar of the Court. The grant provides an authority to the executors who are named in the testamentary instrument to deal with the assets of the deceased's estate as directed in the deceased's Will and to exercise the powers of the office of executors.
However, a grant in common form is not a final judgment and it is open to a Court, exercising probate jurisdiction, to revoke the grant, at any time, upon a proper case being established. That the Court possesses an inherent power, by reason of the conferral of the power to make a grant of probate or administration, to revoke its own grant for just cause cannot be disputed: Bates v Messner (1967) SR (NSW) 187.
The grant of Probate in common form is in the nature of an interlocutory judgment: Caldar v Public Trustee [2003] NSWCA 187 at [5] (Handley JA, Ipp and Tobias JJA agreeing), followed in Mullins-Trnovsky v Adams (2014) 121 SASR 155; [2014] SASC 116 at [8] (Gray J); Estate Kouvakas; Lucas v Konakas [2014] NSWSC 786 at [223] (Lindsay J); Pye v Pye [2021] NSWSC 686 at [63].
The sorts of situation that may reflect a "proper case" are not rigidly confined. As was written by Asprey JA in Bates v Messner at 191-192:
"The exercise of this Court's jurisdiction to revoke a grant of probate, unlike the Court's power to revoke a grant of letters of administration, depends upon the inherent jurisdiction of the Court …. I shall make no attempt to define all circumstances which may attract the exercise of the court's jurisdiction, but where circumstances clearly appear to have arisen after a grant of probate which impel the court to the firm conclusion that the due and proper administration of an estate has either been put in jeopardy or has been prevented either by reason of acts or omissions on the part of the executor or by virtue of matters personal to him, for example, mental infirmity, ill-health, or by virtue of the proof of other matters which establish that the executor is not a fit and proper person to carry out the duties which he has sworn to the court that he will perform, the court may exercise its inherent jurisdiction to revoke the grant."
Also see Richardson v Rearden [2006] NSWSC 1252 at [16] (Campbell J). However, as was noted in Neilson v Public Trustee - The Estate of Ellen Letitia Neilson (Supreme Court (NSW), Powell J, 8 May 1992, unrep), it was written that:
"the classes of case in which the power has, in the past, been exercised being usually described as being: 1. where the grant is, in effect, a nullity; 2. where the surname or first Christian name, of the deceased in the grant is seriously incorrect; 3. where the grant has been obtained on a false, or incorrect, basis; 4. where, by reason of supervening events, the grant has become defective".
More recently, in Executor Trustee Australia Ltd v McDougall (2011) 110 SASR 462; [2011] SASC 140 at [21], Kourakis J referred to Re Estate of Crane (2005) 93 SASR 198; [2005] SASC 379, in which Besanko J, at [25], identified nine well-accepted, but non-exhaustive, grounds, for the revocation of a grant of probate, the fifth of which was "the executor was suffering from ill-health". Also see, Re Arklie (No. 2) [2019] VSC 350 at [11] (Moore J).
Neither the mere desire of an executor to whom Probate has been granted, nor the consent of all interested parties, is a sufficient basis, without more, to revoke a grant of probate. In Alexander Learmonth, Williams, Mortimer and Sunnucks, Executors, Administrators and Probate (21st ed, 2018, Thomson Reuters) at [22-23], the learned authors state:
"Grants are occasionally revoked because grantees wish to be relieved of their duties, but special circumstances must be shown."
In Master Paul Treverson, Roland d'Costa, and Terry Synack, Tristram and Coote's Probate Practice (32nd ed, 2020, LexisNexis Butterworths), at [17.21], the learned authors state:
"Application is occasionally made for revocation on the ground that the grantee, though not incapable, wishes to be relieved of his responsibility for some reason, such as increasing age. Such an application is allowed only by express direction of a district judge or registrar, which is not readily given."
The court may relieve an executor of his, or her, duty, if, for example, through advancing age, the executor is no longer able to continue with his duty under the grant: In the Goods of Galbraith [1951] P 422. The guiding principle was stated by Jeune P, in In the Goods of William Loveday [1900] P 154. Whilst the case concerned an application in circumstances where the administrator of an estate could not be found, at 156, it was written that in exercising the jurisdiction to revoke a grant of administration, a court must have regard to the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate:
"…After all, the real object which the Court must always keep in view is the due and proper administration of the estate and the interests of the parties beneficially entitled thereto; and I can see no good reason why the Court should not take fresh action in regard to an estate where it is made clear that its previous grant has turned out abortive or inefficient."
In The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 at [23], E M Heenan J wrote:
"There is a wide variety of circumstances under which revocation of a grant of probate or letters of administration, which have not been the subject of proof in solemn form, may be made. Broadly, these may be divided into two categories. The first being where it is discovered that there is some error which has been made in the grant of representation or where the particular grant should not have been made (for example, the discovery of a later will, or of a subsequent marriage which revoked the will in question). The second category includes revocations made necessary or desirable to ensure the due administration of the estate such as, for example, where the grantee becomes sick or disabled, or has disappeared. The ultimate purpose of the court is to ensure the due and proper administration of the estate and of the interests of the parties beneficially entitled to it."
Whilst it may not be necessary to allude to this aspect in the circumstances of the case, it seems to me that the making of an order revoking the grant of Probate does not relieve the second Plaintiff from liability, if any, for conduct occurring prior to the making of the order.
It may be appropriate that the new grant record that the second Plaintiff was an executor and trustee of the estate until the making of the order. To revoke the grant and issue a fresh grant of administration would result in an incomplete picture being presented to those relying upon the new grant unless reference was made to the orders in that grant. (I state this for completeness and as stated earlier do not suggest that there is any such conduct or any liability.)
Section 40D of the Probate and Administration Act 1898 (NSW) makes provision consequent on revocation of a grant of probate or administration.
With these principles in mind, I turn to the determination of the Plaintiffs' application.
[3]
Determination
The case before the Court clearly falls into the second category identified by E M Heenan J, being revocation of the grant by reason of matters personal to one of the executors. The second Plaintiff has clearly, and unequivocally, stated that he is no longer able to carry out the duties involved in the due administration of the estate. Practically speaking, he feels he cannot continue to discharge his duties as one of two executors in administering the affairs of the estate. If he is not consensually removed, the future administration of the deceased's estate may be stultified. In my view, there is a sufficient factual basis for the ground of revocation.
One must remember the basic rule when the court is considering whether to revoke a grant and to make a new grant is that to do so must be for a reason or reasons that advances the real object of administration, that is, the due and proper administration of the estate. Therefore, I have also considered the consent of the beneficiaries in the exercise of discretion to revoke the grant.
The Court has also had regard to the testamentary intention of the deceased in nominating the third Plaintiff as a substitute executor, as well as the interests of parties beneficially entitled to the deceased's estate. To not make an order would not be to the best interests of the estate. The Court's discretion should be exercised in a pragmatic way.
I next turn to the method of providing the relief sought. Where Probate has been granted to more than one person, and where one, or more, of the other executors to whom Probate has been granted is to be removed for proper reasons, the usual practice of the Court is to recall, and revoke, the original grant, and make a fresh grant of administration, with the deceased's Will annexed to the remaining executor or executors. The revocation of the grant is a revocation in toto, not a partial revocation, and the fresh grant to the remaining executor, or other executors, entirely supplants the former grant: Sandra Elizabeth Lester v Terrence Myles Brown [2022] NSWSC 716 at [112]. Also see Gorman v McGuire: Estate of J.M. Gorman [2002] NSWSC 1089 (Palmer J).
In this regard, I repeat what was written by Lindsay J in Riccardi v Riccardi [2013] NSWSC 1655 at [8(a)], that "the appropriate (and traditional) form of relief", is an order for the revocation of the grant of Probate, coupled with an order making a fresh grant of letters of administration with the Will of the deceased annexed. Consequential orders are also appropriate.
Most respectfully, I agree with his Honour's view, expressed at [9] that:
"(a) an order for grant of administration (whether by way of a grant of probate or a grant of letters of administration) is in the nature of an instrument of title;
(b) an order the revocation of a grant, coupled with orders for delivery up of the revoked grant and for the issue of a fresh grant, is likely, in this as in most cases, to facilitate the due administration of an estate by removing a spent grant from circulation or, at least, making express, clear provision for its removal from circulation; and
(c) there remains utility in the distinction (albeit sometimes difficult in practice to differentiate) between the office of an executor (or administrator), on the one hand, and, on the other hand, the office of a trustee following completion of executorial duties: Estate Wight; Wight v Robinson [2013] NSWSC 1229 at [11]-[22].
(d) in a case in which, as here, the grant sought to be revoked is a grant of administration with a will annexed (rather than a grant of administration in respect of an intestate estate) there is no material distinction between the process involved in revocation of a grant of probate and that involving revocation of a grant of administration. In each type of estate, in decision-making about the identity of a legal personal representative, allowance may need to be made for any expression of testamentary intention in a will of the deceased."
To ensure that the former executors can no longer deal with estate property, it may be noted that the original grant of Probate has been recalled and has been delivered up for cancellation. It remains in the Court file. That the original grant should be recalled and revoked and that a fresh grant should be made is necessary because a grant of probate is a public document and, often, must be produced to third parties so that the executors can get in, and administer, the property of the deceased. The grant must be, and must appear to be, complete on its face so that third parties may act upon it without concern that it may have subsequently been varied as to the continuance in office of one of the named executors: Gorman v McGuire: Estate of J.M. Gorman at [7].
In my view, the estate should bear the costs of the application. It is clear that all of the parties have brought the proceedings in the interests of the estate.
For these reasons, the Court:
1. Orders that the grant of probate issued by the Court on 6 May 2019, in respect of the estate of Philip Charles Tomlinson Mack be revoked.
2. Notes that the original revoked grant has been delivered up and has been placed in Court file 2022/307239.
3. Notes that the second Plaintiff, Paul Godfrey Hickman, one of the executors named in the deceased's Will, to whom the Court granted Probate on 6 May 2019 wishes to retire as an executor.
4. Orders that letters of administration, with the Will dated 6 May 2019, of Philip Charles Tomlinson Mack, be granted to the first and third Plaintiffs, Ian Henry Mack and John Anthony Snelgrove.
5. Orders that the matter be remitted to the Senior Deputy Registrar in Probate to complete the grant.
6. Orders that further compliance with the Probate rules of Court be dispensed with.
7. Orders that the first and second Plaintiffs do all such acts as are necessary to vest any property of the estate of the deceased which has been transmitted into their names as executors, into the names of the first and third Plaintiffs.
8. Orders that the Plaintiffs' costs, calculated on the indemnity basis of the proceedings, be paid, or retained, as the case may be, out of the estate of the deceased.
9. Notes that the second Plaintiff and the beneficiaries named in the Will of the deceased, each consents to these orders and notations.
[4]
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Decision last updated: 01 December 2022