Bose v Bose

25 and 28 September 2012: Hurlstone Park Legal (Defendant)

26 March 2013: Defendant self-represented by telephone File Number(s): SC 2010/387508

EX TEMPORE Judgment 1The plaintiff seeks, by a further amended summons, various forms of relief. The principal relief is in relation to the estate of the late Satyakam Bose. The deceased appointed his brother, Satyajit Bose, his executor and trustee. What is sought is that the executor be ordered to get in the proceeds of all policies in the name of the deceased with the AMP Life Limited and to pay those funds to the plaintiff to be added to an existing trust for the benefit of the daughter of the plaintiff and the deceased. 2Clause 7(d) of the will, of which probate was granted to the defendant, is in the following terms: "POWER in respect of all or any moneys requiring investment in my estate to invest such moneys in the name of my Trustee or under the legal control of my Trustee (in the name of any nominee for my Trustee) in any one or more of the following forms of investment with liberty to vary and transpose the same from time to time - (i) any of the investments for the time being authorised by law for the investment of trust funds; (ii) the stocks, shares, debentures, notes or securities of any company in which I hold any such investments at the date of my death; (iii) the stocks, shares, debentures, notes or securities of or in any public company quotated [sic] on any recognised or official stock exchange in Australia of or in any wholly owned subsidiary of any such public company; (iv) on deposit in any bank, banking company, financial institution, public company or proprietary company at such rate of interest, for such period and upon such terms as my Trustee may think fit. PROVIDED FURTHER that any investment authorised or nominated by this paragraph may be made by my Trustee in any State or Territory of Australia or under the law of any such State or Territory." 3Mr O'Loughlin, who appears for the plaintiff, submits that the proviso governs the power of investment and requires all investments to be made in Australia. He submits that the orders sought can be made because of the limitation of the power of investment to Australian investments. He submits that the proceeds of the AMP policies should be invested in Australia. He says that as a matter of practicality, with an existing trust in favour of the daughter who is the major beneficiary under the will, it should be accepted that the investment be made in that existing trust. 4The problem with those submissions is that the power of investment is expressed generally and in relation to Australia and the proviso is not expressed as a limitation upon the general power. Secondly, the investment of funds in Australia could only be in the name of the defendant as trustee. It would not extend to divesting the trust of the proceeds of the AMP policies and vesting them in a different trust in favour of the daughter. 5On 25 September 2012, because the estate was small, I suggested a winding-up of the trusts of the will of the deceased, to which the parties agreed. No consent orders were made because on 28 September 2012 the solicitor for the defendant sought, and was granted, leave to re-open the defendant's case. What was contemplated on 25 September 2012 could only be achieved as a matter of consent of all parties. Consent was not forthcoming. 6By his will the deceased left his real estate at Thornleigh on trust for the daughter should she attain the age of 21. He left the residue of the estate on trust for the daughter, should she attain the age of 21, and in the event that no one was entitled to a vested interest, he left his estate to the defendant. 7There was power in the defendant to postpone the getting in of the assets of the estate under cl 7(b) of the will, which was in the following terms: "I DECLARE that in the administration of my estate and in the performance of the provisions of this Will and in augmentation of any express or implied power which my Trustee may have by law and notwithstanding any rule of law or statutory provision or enactment to the contrary my Trustee shall have the following powers:- ... (b) POWER for my Trustee to postpone the sale calling in or conversion into money of any part of my real or personal estate until such time as my Trustee shall see fit so to do AND my Trustee shall not be liable to account notwithstanding that such estate or part thereof may be of a wasting speculative or reversionary nature." 8There was also a power to advance income or capital to a presumptive beneficiary for the maintenance, education, benefit, support or advancement in life of the beneficiary under cl 7(c), which was in the following terms: "POWER in the sole discretion of my Trustee from time to time and as often as my Trustee may think fit to pay or apply the whole or any part or parts of the income or capital to which any presumptive beneficiary under this Will is entitled or contingently entitled to the beneficiary's parent or guardian or to any other person or to any school, education body or institution for the maintenance, education, benefit, support or advancement in life of the beneficiary without being responsible to see to the application of any such income or capital so paid or applied." 9Under that power, the defendant advanced estate funds to the plaintiff, which she put in a trust for the daughter. The plaintiff intended to use those funds and the proceeds of the AMP policies to pay for the daughter's secondary education at a private school. The defendant intends to honour the deceased's wish that the funds be available for tertiary education of the daughter. 10It is argued that the principal relief can be given under the power in the Uniform Civil Procedure Rules 2005, Pt 54 r 54.3(1) and Pt 54 r 54.3(3)(d). The former provides that proceedings may be brought for any relief that could be granted in administration proceedings. The latter provides that proceedings may be brought for an order directing any executor, administrator or trustee to do or abstain from doing any act. 11But wide though the words are, the rules are confined to acts within the scope of the trust or the proper administration of the estate. They are not a basis for authorising or directing departures. In Gonzalez v Claridades [2003] NSWCA 227; (2003) 58 NSWLR 211 at 218 [30]-[34], Mason J said this: "30 ...The particular powers conferred by r 2 are broad and extend, literally, to the ordering of an executor 'to do or abstain from doing any act' (r 2(3)(d)). But like all language, these words must be read in context and that context relates to acts in the administration of the estate that fall within the scope of an administration suit. 31 Fundamentally, the purpose of an administration suit is to give assistance or protection to the personal representatives as well as protecting creditors or beneficiaries of the estate (David v Frowd (1833) 1 My & K 200 at 208; 39 ER 657 at 660). Administration proceedings (and proceedings under Pt 68, r 2 and its counterparts) are designed to deal with problems arising within the administration of the estate. Rule 2 does not confer jurisdiction to decide questions which could not have been decided in an administration suit (Re Royle (1889) 43 Ch D 18; Hudson v Gray (1927) 39 CLR 473 at 502). 32 The executrix submitted that the appellant is not a plaintiff entitled to invoke Pt 68 because of the unresolved (and unaddressed) issue of his role in the death of his father. I do not agree. The appellant has standing as a named beneficiary whose disentitlement has yet to be established. 33 In administration suits, the general rule was stated by Farwell LJ in Re Hazeldine's Trusts [1908] 1 Ch 34 at 40-41 (emphasis in original): ' ... if the trustees cannot do it, neither can the Court, for, as Lord Chancellor Law says in Fitzpatrick v Waring [(1882) 11 LR Ir 35, 44]: "In the exercise of its jurisdiction for the administration of trusts this Court, I apprehend, has no power to make or authorize any leases or other dispositions of the trust property which the trustee could not have made himself. The Court, in such a case, whether it assumes the place of the trustee, or guides him in the discharge of his duties, is still confined within the limits of the trust as constituted by its author, and has no authority to go beyond those limits. Its business is to execute the trusts, not to alter them."' 34 This passage was cited with approval by the High Court in Templeton v Leviathan Pty Ltd (1921) 30 CLR 34 at 56, 65, 73. It shows that there is a general principle to the effect that administration proceedings are designed to enforce administration according to legal and equitable principle, not to authorise or direct departures from it. 12In Westfield QLD No 1 Pty Ltd v Lend Lease Real Estate Investments Ltd [2008] NSWSC 516 Einstein J discussed the authorities. At [39] his Honour said this: "I accept as correct the defendants' submission that the rules do not provide a source of jurisdiction for an order in terms of the termination and winding up of the trusts." 13His Honour went on at [40]: "The powers conferred by Part 54 are broad and extend, literally, as far as directing a trustee 'to do or abstain from doing any act' (r 2(3)(d). Nonetheless, the words are not to be read literally. The Court of Appeal in Gonzalez v Claridades observed as follows." (citation omitted) 14Having set out the above passage, his Honour said at [41]: "To similar effect is Suffolk v Lawrence (1884) 32 WR 899, in which Pearson J held that 'rule 3(e) of Order 55 only authorises a direction to trustees to do or abstain from doing some act within the scope of their trust'." 15Finally, at [45] Einstein J quoted from Barrett J's judgment in Re Gaydon [2001] NSWSC 473 at [29] as follows: "...the Court cannot dissolve a trust in the same way that it would dissolve, for example, a partnership. It is the duty of the Court to uphold and protect trusts, not to destroy them, although where the terms of the trust envisage, in certain circumstances, realisation of property, winding up of the trust's affairs and final payments to beneficiaries, the Court will, naturally enough, give effect to those 'winding-up' provisions." 16In this case the plaintiff seeks a departure from the proper administration of the estate. She seeks an order that the defendant pay her a substantial amount of the remaining estate to avoid the postponement of the vesting of the daughter's interests until she attains the age of 21 years so that the plaintiff may apply the funds to the cost of secondary education for the daughter. 17Much as I think that is a good idea, I am bound to uphold the deceased's wishes unless there be power for me to act under the above rule. In my view, I cannot. I am asked to order a departure from the proper administration of the estate. The rules do not extend so far. 18To direct the defendant to get in the AMP policies if no order is to be made transferring the funds to the plaintiff is of no advantage to her, and in light of the power to postpone the getting in of the estate I decline to make such an order. 19Mr O'Loughlin sought to withdraw the abandonment of a claim under the Family Provision Act 1982 (NSW), which he made following the hearing on 25 September 2012. The application was under the Family Provision Act and not the Succession Act 2006 (NSW) because the deceased died before 1 March 2009 (Succession Act, Sch 1, Pt 3, cl 11(2)). 20Since I allowed the defendant to reopen his case it is appropriate to allow the plaintiff to withdraw the abandonment, which I do. 21The summons seeking relief under the Family Provision Act was filed out of time. Application is now made under s 16 to extend the time up until the filing of the summons. It is in the following terms: "16 Time for application for provision (1) In this section, prescribed period in respect of an application in relation to a deceased person, means: (a) where the Court has, in an order made under section 17, specified a period in relation to the application - that period, or (b) in any other case - the period of 18 months after the death of the deceased person. (2) An order under section 7 shall not be made unless the application for the order is made within the prescribed period in respect of that application or within such further period as the Court may, having regard to all the circumstances of the case but subject to subsection (3), by order, allow. (3) The Court may not make an order under subsection (2) allowing an application in relation to a deceased person to be made after the end of the prescribed period unless: (a) the parties to the proceedings concerned have consented to the application being made after the end of that period, or (b) sufficient cause is shown for the application not having been made within that period. (4) The Court may make an order under subsection (2) with respect to an application in relation to a deceased person whether or not: (a) the prescribed period in respect of the application in relation to the deceased person has expired, (b) the application for the order under that subsection was made before that period expired, or (c) the application in relation to the deceased person has been made. (5) Notwithstanding subsections (2) and (3), where administration has been granted in respect of a person whose date of death is so uncertain as to make it impossible to apply subsections (2) and (3) with respect to an application in relation to the person, the Court may, whether or not the application in relation to the person has been made, by order, allow the application in relation to the person to be made within such period as it thinks reasonable and such an order has effect according to its tenor." 22In Lewis v Lewis [2001] NSWSC 321, Hodgson J commented on the meaning of "sufficient cause" in s 16(3) of the Family Provision Act. His Honour said this at [82]-[83]: "82 In general terms, it seems clear that matters relevant to the exercise of discretion to extend time under s.16 include the existence and strength of a case for relief under the Act, the explanation given for failure to commence proceedings in time, any prejudice caused by the late commencement of proceedings, and any unconscionable conduct by either side. The second factor, the explanation, is specifically dealt with in s. 16 of the Act, which, in the absence of consent, precludes an extension being granted unless 'sufficient cause is shown for the application of not having been made within' the prescribed period. 83 The wording of that provision is a little curious. If read literally, it would appear to be a tautology: the application was not made within the prescribed period, so in some sense there must have been sufficient cause for this to happen. In the expression 'sufficient cause' must be taken to mean 'sufficient explanation' or 'sufficient justification or excuse'. The question then is, sufficient for what? Again, it cannot be sufficient for the application not having been made because again that would seem to give rise to a tautology. Rather, it must be something like 'sufficient in all the circumstances to justify the granting of an extension of time'." 23In Allchin v Allchin [2012] NSWSC 1028, Macready AsJ, having quoted this passage, summarised the authorities at [32] and following. 24One matter of significance to be taken into account is the strength of the case under the Family Provision Act. As Needham J said in Fancett v Ware (Supreme Court of New South Wales, 3 June 1996, unreported) there is no point in extending time with respect to a claim that must fail. 25The daughter, as a child of the deceased, is an "eligible person" within par (b) of the definition of that term in s 6 of the Family Provision Act. 26In Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 the High Court prescribed a two-stage process for applications under the Family Provision Act. At 209-210 Mason CJ, Deane and McHugh JJ said this: "The first question is, was the provision (if any) made for the applicant 'inadequate for [his or her] proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc. were explained in Bosch v Perpetual Trustee Co Ltd. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance." (citation omitted) 27In this case the first question in the two-stage process must be answered in the negative. The provision made for the daughter was not inadequate. She was given the entire estate with a power of advancement in the defendant as executor and trustee. 28Since the daughter's claim under the Family Provision Act must, therefore, fail there is no point in extending the time for making the application. 29The Court declines to specify a period in relation to the daughter's application under the Family Provision Act. Paragraphs 8 and 9 of the further amended summons are dismissed. 30The plaintiff does not object to an order that the need for the defendant to file accounts be dispensed with and an order that, otherwise, the further amended summons be dismissed. I will make those orders. 31So far as costs are concerned, not only has the plaintiff failed to obtain an order for the payment of the proceeds of the AMP policies to her, but she has failed to obtain the other relief claimed in the further amended summons - the revocation of the grant of probate; the grant to her of administration of the estate with will annexed; an order that the defendant furnish accounts as to his administration; an order that the defendant administer the estate in accordance with the trusts of the will; that further provision be made in favour of her daughter pursuant to s 7 of the Family Provision Act and that the time for making the application under s 7 be extended up to and including the filing of the summons. 32In the circumstances, I will not make the order sought by the plaintiff that her costs be paid out of the proceeds of the AMP policies, whether capped or in full. I make no order as to the plaintiff's costs. 33The defendant is self-represented. I order that the defendant obtain from the estate the amount of out-of-pocket expenses, of a type that would have been recoverable as disbursements, if the defendant had been legally represented, that the defendant has actually and reasonably incurred concerning the further amended summons.