FIONA JANICE GRIFFITHS As trustee of the Estate of MURIEL EILEEN GRIFFITHS

Trustees - Administration of estate - Originating summons for orders for removal of trustee and audit of administration of estate - Interim injunction - Order preventing trustee further dealing with assets of estate

1 ROBERTS-SMITH J: This is an application by way of chamber summons filed 11 March 2003 for an interim injunction which would prevent the defendant as executrix of the estate of the late Muriel Eileen Cooper from selling, disposing of, charging or otherwise dealing with the assets of that estate already proceeds of the estate. An originating summons was filed in this matter on 4 July 2002, seeking orders that the defendant be removed as trustee, that a new trustee be appointed, that the property the subject of the estate vest in the new trustee and that, in brief, a proper examination, audit and accounting of the defendant's dealings with the property of the estate be undertaken.

2 The present application is based primarily on the affidavit of the plaintiff sworn 25 June 2002 but filed on 4 July and the considerable number of documents attached to that. The defendant relies upon her own affidavit sworn and filed on 28 October 2002, to which again is annexed a considerable amount of documentation.

3 The deceased died on 13 June 2000. Probate was granted to the defendant on 10 April 2001 and on 13 December the defendant filed a statement of assets and liabilities of the estate.

4 There was a further statement of assets and liabilities in an affidavit of the defendant on 24 February 2003.

5 There are, as I understand it, four major objections by the plaintiff to the basis upon which the defendant has been or intends to continue administering the estate. They have been somewhat elaborated upon in submissions before me today. The first, and probably the most significant, is that the amount of the entitlement that is shown initially as being that of the defendant's is in the order of $140,000 whereas the amount shown as the plaintiff's entitlement is $48,952.

6 Mr Horton for the plaintiff concedes that the amount to which the plaintiff should be entitled under the estate, he and the defendant being joint residuary legatees, should be somewhat less than $140,000 but considerably more than the $49,000 (approximately) shown initially. The difference appears to be that a significant amount by way of legal costs has been deducted. On the face of the documentation it appears that those costs were deducted from the plaintiff's entitlement after distribution rather than from the estate before distribution.

7 There may be some dispute about the quantum of the legal costs but whether that be so or not the plaintiff's concern is that, even assuming the costs are properly payable out of the estate, then they should come from the estate before distribution and not from the entitlements of the individual beneficiaries. The position of the plaintiff as expressed to me by Mr Horton is that there are patent defects in the administration of the estate thus far and there have now been concessions made by the defendant which demonstrate some of those defects and deficiencies.

8 The position appears to be that it appears common ground that the defendant has paid herself an amount in the order of $95,000 as her entitlement from the estate but at this stage no distribution whatever has been made to the plaintiff. On the material before me, and again on the basis of what I have been told from the bar table, particularly by Mr Stamatiou for the defendant, it appears that the residual which still remains in the estate is still being eroded by further legal costs arising out of ongoing litigation which the defendant says is a responsibility of the estate.

9 There is apparently something in the order of $36,000 remaining in the trust and, as I say, that is still being eroded.

10 I do not propose to canvass the factual material contained in the affidavits and documentation before me. The matter can I think be dealt with fairly broadly on the basis of the matters which I have already mentioned.

11 The principles relevant to the grant of an interlocutory injunction are that the applicant must first satisfy the Court there is a serious question to be tried. If there is a serious question to be tried then, secondly, the Court will not grant an injunction if common law damages would be an adequate remedy. Thirdly, if there is a serious question to be tried and damages would not be an adequate remedy, the court must consider where the balance of convenience lies; that is to say, whether it lies in favour of granting or refusing the relief as sought.

12 So far as the serious question to be tried aspect is concerned, the question here is the fitness of the defendant to continue as executrix of the estate and also the question whether or not the way in which the estate has thus far been dealt with has been in accordance with the provisions of the will and the law.

13 There is no doubt that the defendant has fiduciary obligations as executrix; that is the nature of the role.

14 There is material before me, even on the basis of what Mr Stamatiou has said, which would suggest there may be some serious questions arising in relation to that. I express no view about aspects of the way in which the defendant has apparently administered the estate, as I say, even on the basis of what has been put to me by Mr Stamatiou.

15 I have been told that the defendant was under an honest mistake for some time that she would not have to make any payment to the plaintiff. It was not until Mr Stamatiou gave her different advice that she understood that was not so. Nonetheless, what is apparent from the material before me is that on any view there is a serious question to be tried about the way in which the estate has been administered and the defendant's fitness to remain as trustee.

16 The question whether damages would be an adequate remedy is one which has troubled me. I accept the formulation of the test expressed by Sacks LJ in Evans Marshall and Co Pty Ltd v Bertola SA [1973] 1 WLR 349 at 379 as being the question:

"Is it just in all the circumstances that a plaintiff should be confined to his remedy in damages?"

17 The material before me, and again in which I include the matters put to me by Mr Stamatiou from the bar table, very clearly raise the prospect that the defendant does not have, and would not have, means of meeting any substantial award which might be made to the plaintiff were he to be successful in the ultimate action. That is one aspect. Just as importantly, if not more so, is the point that the remedy sought by the plaintiff is in part a replacement of the defendant as trustee and an accounting of her administration of the estate.

18 It seems to me in the circumstances that the plaintiff should not be confined to the remedy of damages in these circumstances. That brings me then to the question of the balance of convenience. That includes a consideration of the relative strength and weaknesses of the plaintiff's case. I need go no further in relation to that, I think, in the present context than to say that on the material the plaintiff has a strongly arguable case.

19 The hostility between the parties is manifest and pervades all of the material before me. One of those who has had to deal with them has described it as vitriolic. I would describe it as poisonous. That consideration in itself is one which has potentially considerable relevance to the question whether the defendant should be replaced as trustee. I say that on the basis of the observations made by Crispin J in Titterton v Oates (1998) 143 FLR 467 at 481.

20 In addition to that, of course, there are the other matters which are, as counsel for the plaintiff puts it, conceded or admitted in the material by the defendant as to the way in which the estate has been administered to date, at least in some aspects. For these reasons it seems to me that the application should succeed and I will accordingly grant the interim injunction sought.