Elga Steinecke (bht Robert John Gardos) v Peter Martin Wayne, Diana Lindner, Beate Stricker, Gerhard Levy; Re Estate of Henry Herbert Stricker & Karl Heinz Lindner

Judgment 1HIS HONOUR: The plaintiff Elga Steinecke is shown by the evidence to be incapable of managing her affairs and thus to be a person under legal incapacity within the definition provided by (NSW) Uniform Civil Procedure Rules (2005) r 7.13. In those circumstances, UCPR r 7.14 has the consequence that she is not able to commence or carry on the current proceedings except by her tutor. These proceedings were purportedly instituted on her behalf by Ruth Gardos, Nicholas Gardos and Robert John Gardos, who were appointed by her under an enduring general power of attorney dated 24 January 2010. For the plaintiff, it was submitted that either: (1) in the circumstances it was not necessary for a tutor to be appointed, or (2) the Court should exercise its general dispensing power under the (NSW) Civil Procedure Act (2005), s 14, to dispense with r 7.14. 2In paragraph 7.14.5 of the commentary in Ritchie's Uniform Civil Procedure New South Wales , it is said that the ordinary rule is that an incapable person cannot conduct proceedings except by a tutor or guardian [ Rudeforth v Crawford [1926] VLR 303] and that this ordinary rule applies unless a contrary statutory or procedural rule otherwise provides [ Myers v Nominal Defendant [1966] 1 NSWR 659]. The headnote to Myers is to the effect that an infant cannot make "any application to a court without the intervention of a next friend, unless there are express procedural rules enabling them to do so". But closer examination of the judgment has not revealed the existence of or reference to the exception mentioned in the headnote, although it might be implicit in the discussion by Isaacs J of the case of McNamara v Bodkin (1960) 1 FLR 351 (at page 667 of Myers ). 3What Myers does make abundantly clear is that the requirement for a tutor issue is more than a mere procedural matter, but a requirement of substantive law imposed because a child or an incapable person is not capable of binding themselves by the institution of proceedings. This is particularly important, to ensure not only that the proceedings and the conduct of litigation is under the conduct of a responsible person, but also to ensure that the parties to the proceedings are bound by the outcome, and to secure a successful defendant's costs. Because of the importance of that rule and its substantive nature, I do not accept that it would be appropriate to dispense with it. 4As to whether there is in any event some contrary statutory rule, it might be suggested that (NSW) Powers of Attorney Act 2003, s 21, is such a rule. That section is to the effect that an act done by an attorney within the scope of a power conferred by an enduring power of attorney, which is of such a nature that it is beyond the understanding of the principal as a result of mental incapacity at the time of the act, is as effective as it would have been had the principal understood the nature of the act at that time. 5While I accept that it is arguable that that provision is inconsistent with UCPR r 7.14, closer reflection persuades me that it was not intended to override well-established rules regarding the conduct of litigation by and on behalf of incapable persons. In this respect, it is significant to observe that even where expressly authorised to do so under a power of attorney, an attorney under power is not entitled to commence proceedings in his or her own name as attorney for the principal; such proceedings, though they may be commenced in a sense by the attorney, must be commenced in the name of the principal [ Campbell v Pye (1954) 54 SRNSW 308; Spellson v George and others (1987) 11 NSWLR 300, 313; Urquhart and Another v Lanham and Others (2002) 11 BPR 20,765, 16]. 6The principle that appears to underlie this rule is that the attorney has no cause of action, only the principal having a cause of action, and that it must therefore be the principal, and not the attorney, who brings the proceedings on that cause of action. Authority given to an attorney to sue on behalf of the principal means authority to sign the initiating process on behalf of the principal and authority to instruct solicitors to bring proceedings and sign the initiating process without reference to the principal. It is not an authority to sue in the name of the attorney. Thus, the addition of the title of proceedings of the matter "by the plaintiff's attorneys, Ruth Gardos, Nicholas Gardos and Robert John Gardos", achieves nothing in this case. The plaintiff is, and remains, Elga Steinecke. She cannot sue, being an incapable person, without a tutor. It is for that reason that I have insisted on the appointment of a tutor and have declined to dispense with r 7.14. Orders bringing about that result have already been made this morning. 7The plaintiff's substantive application is for orders pursuant to the (NSW) Conveyancing Act 1919, s 66G, appointing trustees of the sale of property at Strathfield. That land is comprised in three sub-folios of the register. Sub-folio A comprises a one-quarter share in the subject land, of which the plaintiff is a registered proprietor. Sub-folio C comprises a one half share in the property, of which the register shows Karl Heinz Lindner to be the registered proprietor. Mr Lindner, who is the brother of one of the plaintiff's attorneys Ruth Gardos, and a first cousin of the plaintiff, acquired his interest, pursuant to a transmission application, in his capacity as executor of the will of Sofia Steinecke. Sofia and her husband Gerhard were the parents of the plaintiff. Sofia had two sisters: Maria, to whom we shall come, and Regina; the plaintiff's attorney Ruth Gardos is Regina's daughter. Sofia's will left the residue of her estate to her trustee Mr Lindner, upon trust to pay debts and testamentary expenses, and thereafter for the benefit of the plaintiff alone. Accordingly, subject to the claims of any creditors - and as probate of the will was granted many years ago, and presumably duly advertised, it can be inferred that there are none remaining - the plaintiff was beneficially entitled to the remainder of Sofia's estate, and the one-half interest in the subject property confirmed in sub-folio C was at least part of that remainder. It therefore seems clear that the plaintiff was beneficially entitled to that half interest in the subject property. However, Mr Lindner died on 16 May 1987. As at his death, the property had not been transmitted to the plaintiff; and it has not been since. 8Mr Lindner's will was admitted to probate on 1 February 1998. His executors were Henry Herbert Stricker and Diana Lindner. Henry Herbert Stricker, in turn, died on 19 March 1996, and probate of his will was granted on 22 August 1996 to the first defendant Beate Stricker, Peter Martin Wayne and Gerhard Levy. However, the other executor, the second defendant Diana Lindner survives. As the sole surviving executor, she represents Mr Lindner's estate, which is therefore properly before the Court for the purpose of these proceedings, Ms Lindner having filed a submitting appearance. 9The other quarter interest in the property is comprised in sub-folio B, of which Amelia Fleishman is the registered proprietor. She, however, died in January 1979. Her death certificate shows that she was never married and had no children. Other evidence, of family members, confirms that to be the case. A will, dated 5 October 1954, has been found and is in evidence. It seems that an application was made for probate of it, as there are in evidence various requisitions relating to it; however, probate was apparently never granted. That will appointed the plaintiff's father Gerhard Steinecke, as executor and trustee, and after various specific requisitions and legacies - which, in the events which have happened, would have ultimately benefited the plaintiff - left the residue, which necessarily included Amelia's interest in the subject property, in equal one-fifth shares to Mr Lindner, Ruth Lindner, the plaintiff, and two nieces of Amelia (Susan and Eva) who resided in Tel Aviv and who apparently are still alive and still resident in Israel. 10As has already been mentioned, Mr Lindner is deceased, but his sole surviving executrix Ms Diana Lindner is a submitting defendant. Ms Ruth Lindner is now Ms Ruth Gardos and is one of the plaintiff's attorneys and, it may therefore be inferred, submits to the relief sought. Elga Steinecke is, of course, the plaintiff. But the two nieces, Susan and Eva, are not parties and are not represented. In any event, even if they were, there is the further difficulty that the will of 5 October 1954 has not been proved, and the Court cannot act on the basis that an unproved will was the last will and testament of the relevant deceased. 11It therefore follows that the estate of Amelia Fleishman has an interest but is not represented in the proceedings. UCPR r 7.10 applies in any proceedings in which it appears to the Court that a deceased person's estate has an interest in the proceedings, but is not represented in the proceedings. UCPR r 7.10(2) provides that the Court may order that the proceedings continue in the absence of a representative of the deceased person's estate - or may appoint a representative of a deceased person's estate for the purposes of the proceedings, but only with the consent of the person to be appointed. Circumstances in which the Court may proceed in the absence of a representative include where there are other parties to the proceedings who have the same interests as the estate, where the interest in question is small or contingent, or where the deceased had no practical beneficial interest in the property involved in the proceedings [ Curtis v Caledonian Fire & Life Insurance Co (1881) 19 Ch D 534; Crossley v City of Glasgow Life Assurance Co (1876) 4 Ch D 421]. 12In this case, relevant circumstances including whether the proceedings should continue in the absence of a representative include the lengthy passage of time since Amelia Fleishman's demise, that there is nothing to suggest any interest or claim by any relevant person in respect of the property, other than the potential beneficiaries under the 1954 will, if it were to be proved; that three of those potential beneficiaries have submitted, or may be taken to submit, to the relief sought, and that the two others are overseas and have been overseas for many years; that the effect of the order sought would not be to alter the interests of or visit liability on any party, but simply to convert this extant interest from an interest in real property into cash; that while it is true that the Court has a (limited) discretion to decline to make an order under s 66G, such orders are made almost as of right; and that the plaintiff, with a 75% beneficial interest in the property, has a very powerful claim, even in the event of a contest. 13All taken together, it means that this is a case in which it is appropriate to proceed in the absence of a representative of the estate of Amelia Fleishman. It will then be a matter for the appointed trustees to decide how they go about discharging the trust, insofar as the one-quarter interest to which her estate is entitled is concerned. As presently advised, it would seem to me that they could not act on the 1954 will unless it were proved. 14However, it occurs to me that the requisitions previously made suggest that there may have been a difficulty in proving due execution of a will, and that the novel facility of having informal wills admitted to probate might overcome any such difficulty that then existed. In any event, it would seem that an application for probate of that will would be required, and perhaps the proceeds of its one quarter share will have to be invested in the meantime, while that takes place. 15Consents to act as trustees have been provided by David Solomons (an accountant and official liquidator) and David Levi (a chartered accountant and official liquidator). It is worth recording that the practice of the Court is to require that consents be verified: verification of a consent involves an affidavit by the witness verifying and deposing, inter alia , that the witness was present and saw the named trustee execute the annexed consent, and that the signature of the trustee or trustees and of the witness appearing on the consent "are in the proper handwriting of the said [name of trustee] and myself respectively" [see Nevill and Ashe, Equity Proceedings With Precedents (New South Wales), p.283]. 16It is also worth recording that on an application under s 66G, it is necessary that the fitness of any individual trustee be established by affidavit, and this applies, at least for s 66G applications, whether or not the appointee is an official liquidator (it is otherwise in the case of the appointment of a provisional liquidator or receiver). The affidavit of fitness of a trustee must depose to knowledge and good acquaintance with the proposed trustee, the trustee's occupation and any other relevant matters as to the trustee's experience, that the trustee is known to the deponent to be of respectability, exemplary character, integrity, good credit, of good repute and - critically - that, "in my opinion he (or she) is a fit and proper person to be appointed for sale of the land the subject of these proceedings" [see Nevill and Ashe, p.283]. 17Those requirements have now been satisfied, the plaintiff being a co-owner - and, a fortiori, one with a 75% beneficial interest - is prima facie entitled to an order under s 66G. Nothing appears as to why such an order should not be made. 18Pursuant to UCPR r 7.10(2), I order that the proceedings continue in the absence of a representative of the estate of Amelia Fleishman. I order that David Levi and David Solomans be appointed as trustees of the land being lot five in deposited plan lxxxx, being the land comprised in sub-folios x/xxxxxA, x/xxxxxB, x/xxxxxC, situate at and known as x xxxx Avenue Strathfield in the state of New South Wales. 19I order that the said land be vested in such trustees subject to any encumbrances affecting the entirety of the land, but free from any encumbrances affecting any undivided shares therein, upon the statutory trust for sale under Division 6 of Part 4 of the Conveyancing Act 1919. 20I order that from the proceeds of such sale the trustees may deduct the commission and other expenses of the real estate agent, the legal expenses of the trustees in respect of the sale, the legal expenses of transferring the property to the purchaser, and the costs of these proceedings, and that the portions of the balance payable to the parties be determined by the trustees. 21I reserve liberty to the parties and the trustees to apply to the Court on three days notice, including to seek the advice of the Court as to distribution and as to the expenses of the attorneys. I order that Exhibit RG2 be returned. I direct that these orders be entered forthwith.