English v Stewart

Service of documents upon the Defendant

1. On 23 July 2021, Tomislav Gajic, a process server, served the Defendant, personally, with a notice dated 28 June 2021 pursuant to s 93(1) of the PA Act, calling on the Defendant to take proceedings to enforce his claim.
2. On 5 August 2021, McArthur Legal sent a letter dated that day, by express post, to the Defendant, at his place of residence, enclosing a copy of the affidavit of service of the s 93(1) notice.
3. There is no evidence that the Defendant responded orally, or in writing, to the notice or to the correspondence.
4. During the 3 months following the date of service of the notice, and thereafter, the Defendant has not taken any proceedings to enforce his claim.
5. On 22 December 2021, Roderick Bruce Duncombe, a licensed process server, served the Defendant, personally, with the Plaintiff's Summons.
6. The Summons disclosed that it was returnable, in the Succession List, on 31 January 2022. The Defendant had not, and still has not, filed an Appearance in the proceedings, and he did not then appear.
7. McArthur Legal sent a letter dated 31 January 2021, to the Defendant, seeking his acknowledgement of receipt of the Summons and his consent to the orders set out therein. There is an affidavit of service sworn on 9 February 2022, of Mr Duncombe, deposing to service upon the Defendant of the letter and a copy of the Summons, at Glentarkie Aged Care Living, at Boggabri, personally, on 7 February 2022.
8. Mr Duncombe states that the Defendant responded that he refused to provide the acknowledgement or his consent and that "I will speak to my lawyers who are in the UK". The Defendant was also notified in the letter that the proceedings had been stood over to Monday, 14 February 2022.
9. Once again, the Defendant did not appear, personally, or by a legal representative, on this occasion. So far as is known, nor has the Defendant, communicated, otherwise, with the Plaintiff's solicitors or the Court.
10. On 14 February 2022, the matter was referred to Chambers, in order to save delay, and unnecessary costs being incurred by setting the matter down for a hearing. The Court directed the Plaintiff to deliver, in hard and soft copy, an outline of submissions, which was to include an index of affidavits upon which reliance was to be placed, by 4:00 p.m. on Friday, 18 February 2022. The direction was complied with and I have carefully read the written submissions that were provided.
11. Rule 6.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), relevantly, provides that except by leave of the court, a party may not take any step in proceedings (including any appearance in court) unless the party has entered an appearance in the proceedings. UCPR rule 6.10(1)(b), relevantly, requires an Appearance to be filed, in the case of proceedings commenced by summons on or before the return day stated in the summons. In the circumstances, the defendant is not an "active party" in the proceedings (UCPR r 1.2).
12. I am satisfied that all reasonable efforts have been made to bring the commencement, and the nature, of the proceedings, as well as the contents of the Summons and the principal affidavit of the Plaintiff, and also the dates on which the matter has been listed in the Succession List, to the attention of the Defendant. In light of all of the evidence, I am also satisfied that the Defendant has, for some time, continued to ignore contact made with him and has chosen to not engage, at all, in the litigation.

Submissions

1. The Plaintiff submits that, in the circumstances of this case, it is appropriate for the Court to make an order under s 93(2) of the PA Act barring the Defendant's claim. She submits that she has good reason to seek the order. Having been on notice of the Defendant's "claim", before the notice of intention to distribute the estate was published, s 92(2) makes the Plaintiff, as administrator, liable with respect to the distribution of assets affected by the claim if it were proved. An order under s 93(2) will relieve her of that risk.
2. It is also submitted that the Defendant has had sufficient opportunity, over some years, to pursue his claim. Furthermore, he has been on notice, since July 2021, of the Plaintiff's intention to seek an order barring his claim, and has been personally served with the documents informing him of the relief that she has sought.
3. Very fairly, if I may say, the Plaintiff has stated that, in the event that the Court grants the relief sought, she does not seek an order for costs against the Defendant, but does seek an order that her costs, calculated on the indemnity basis, of the proceedings be paid out of the deceased's estate.

Dealing with the matter in Chambers

1. Section 11 of the Supreme Court Act 1970 (NSW) provides: "11 Distinction between court and chambers (1) The distinction between court and chambers is abolished. (2) The business of the Court, whether conducted in court or otherwise, shall be taken to be conducted in court."
2. Under s 11, there is no restriction on where the Supreme Court may exercise its powers, apart possibly from constitutional limits, not relevant in this case, requiring there to be a nexus with New South Wales. This is apparent from s 11(2) of the Supreme Court Act, which, by the use of the phrase "or otherwise", contemplates no restriction on where the business of the Court might be conducted: King Investment Solutions v Hussain (2005) 64 NSWLR 441; [2005] NSWSC 1076 at [147] (Campbell J). Indeed, the section specifically "abolishes the distinction between court and chambers": Hassan v Sydney Local Health District (No 4) [2021] NSWCA 187 at [9].
3. In addition, the business of the Court, whether conducted in court, or otherwise, is taken to be conducted in court.
4. I should also refer to s 71 of the Civil Procedure Act 2005 (NSW), which section permits the business of a court, in relation to any proceedings, to be conducted in the absence of the public, "...(f) if, in proceedings in the Equity Division of the Supreme Court, the court thinks fit".
5. Whilst a chambers hearing is in private, in the sense that members of the public are not given admission as of right to the courtroom, dealing with a matter "in chambers" does not mean that the proceedings are dealt with in secret. To deal with a matter in chambers means no more than a less formal procedure may be adopted by the Court where there is no opposition to the Court making the orders sought: Le Grand v Criminal Justice Commission (No 2) [2001] QCA 432 at [19] (White J with whom Davies and Williams JJA agreed).
6. In the Succession List, the Court, frequently, makes orders in chambers. The procedure enables matters to be determined informally and expeditiously. Dealing with the matter in chambers still requires the documents in the Court file, where relevant, to be read, and those documents to be identified in the Court's record of proceedings: Kelly v Kelly (2019) 17 ASTLR 429; [2019] NSWSC 994 at [79].
7. In the present case, having regard to the apparent lack of opposition to the orders sought, I am satisfied that it is appropriate to deal with the matter in this way. That determination will still enable the Court to deal with the proceedings justly and at proportionate cost.
8. I am also satisfied that the Defendant has had adequate notice of the application and has done nothing to advance any claim that he asserts he has against the estate or to defend the current proceedings. Indeed, other than making his assertions in correspondence, there has been a complete failure by him to engage in the processes of the Court.

The legal principles

1. It is next convenient to refer to the legal principles that apply in such an application.
2. One starting principle that is to be kept in mind is that an executor or an administrator, in administering an estate, is responsible for the proper distribution of the assets amongst those entitled to them, whether creditors or beneficiaries. The creditors of the deceased and the estate must be paid in priority to the beneficiaries. If the executor or administrator fails to fulfil her, his or its, obligations, she, he or it, may be personally liable. Yet, the duty placed on the executor or administrator to pay the debts and liabilities of the estate is not an absolute one.
3. Section 92 of the PA Act, relevantly, provides: (1) The executor or administrator of the estate of a testator or an intestate may distribute the assets, or any part of the assets, of that estate among the persons entitled having regard to the claims of beneficiaries (including children conceived but not yet born at the date of the death of the testator or intestate), creditors and other persons in respect of the assets of the estate of which the executor or administrator has notice at the time of distribution if: (a) the assets are distributed at least 6 months after the testator's or intestate's death, and (b) the executor or administrator has given notice in the form approved under section 17 of the Civil Procedure Act 2005 that the executor or administrator intends to distribute the assets in the estate after the expiration of a specified time, and (c) the time specified in the notice is not less than 30 days after the notice is given, and (d) the time specified in the notice has expired. (2) An executor or administrator who distributes the assets or any part of the assets of the estate of a testator or an intestate in accordance with subsection (1) is not liable in respect of those assets or that part of those assets to any person who has a claim in respect of those assets or that part unless the executor or administrator had notice of the claim at the time of the distribution or the distribution was not made in the circumstances described in subsection (2) (a) or (b) of section 28 (Protection of personal representatives who distribute as if will had not been rectified) or section 125 (Sharing between spouses) or 126 (Distribution orders) or Part 4.4 (Indigenous persons' estates) of the Succession Act 2006.
4. Section 92 is designed to enable an executor or administrator of an estate to distribute the assets of an estate to the beneficiaries leaving out of account any claims of which she, he, or it, does not have notice. In this way, the executor or administrator may distribute the assets free of the risk that she, he, or it, will remain liable to pay creditors of which she, he, or it, has no notice, by means of the publication of the approved notice, and delaying the distribution of the assets for the period required by the section.
5. Thus, at least one purpose of s 92 is to facilitate the due administration of the deceased's estate.
6. As will be appreciated, the section does not apply to a claim of which the executor or administrator, at the time of distribution, had "notice". In Scottish Equitable Life Assurance Society v Beatty [1889] 29 LR (Ir) 290, Fitzgibbon LJ wrote, at 298: "The Act is intended to protect honest administration carried out in ignorance, not to enable representatives to get rid of demands within their knowledge. On the face of section 29 [the equivalent predecessor to s 92] itself the discharge from liability is confined to claims of which the executor has no notice at the time of distribution. Therefore, any notice up to the time of parting with the assets is enough."
7. There is no definition of "claims" in the PA Act. However, a wide view has been taken of the word. In McGrath v Troy as administratrix of the estate of the Late Warren Terence Wade [2010] NSWSC 1470, White J, in a case concerned with ss 92 and 93, wrote at [92]: "Counsel submitted that prior notifications were not notices of a claim within the meaning of s 92, but mere "assertions" or "conjectures". The dictionary meaning of "claim" in the Macquarie Dictionary includes an assertion of a right or alleged right and includes the assertion of something as a fact. To make an assertion is to make a claim."
8. At [99], his Honour added: "The Act does not protect against claims or demands of which the administrator has notice or knowledge. If the administrator knows or has notice of facts which entitle a person to distribution of the estate, or knows or has notice of a demand, then he or she distributes at his or her peril. If an administrator wishes to bar a claim of which he or she has notice, then he or she must proceed under s 93."
9. For the purposes of s 93, a claim against the estate not only includes a claim by a creditor, but also includes claims by the deceased's next of kin or a legatee: Aitken; Re Maier v Hearne [2020] VSC 432 at [35] (McMillan J).
10. An executor or administrator cannot disregard the claim, because she, he or it, honestly believes that the claim is without substance: Guardian Trust & Executors Company of New Zealand Limited v Public Trustee of New Zealand [1942] AC 115 at 128.
11. Thus, if the executor or administrator knows, or has notice, of a claim, then she, he or it distributes at her, his or its, peril. If the executor or administrator wishes to bar a claim of which he, she, or it, has notice, then he, she, or it must proceed by giving notice under s 93 of the PA Act, the effect of which would require the claimant to institute a proceeding within three months, failing which the claim would be barred.
12. Section 93 of the PA Act relevantly provides: (1) When the executor or administrator of the estate of a testator or an intestate has published the notices referred to in section 92 (1) and a claim in respect of the assets of that estate is submitted to the executor or administrator, the executor or administrator may, if the executor or administrator disputes the claim, serve on the person by whom or on whose behalf the claim was submitted a notice calling on the person to take proceedings to enforce the person's claim within a period of 3 months from the date of service of the notice and to prosecute the person's claim. (2) If, after a notice has been served on a person in accordance with subsection (1) and the period of 3 months referred to in the notice has expired, that person does not satisfy the Court that the person is prosecuting the person's claim, the Court may, on an application in that behalf made by the executor or administrator: (a) make an order barring the claim of that person as against the executor or administrator, subject to such conditions (if any) as it thinks just and equitable, or (b) make such other order in respect of the application as it thinks just and equitable, having regard to the circumstances of the case.
13. It can be seen that s 93 provides a mechanism for giving reasonable notice to a claimant to prosecute the claim, and, in the absence of such proceedings being commenced, to obtain an order from the Court barring the proposed claim. By s 93, relevantly, the executor or administrator is relieved from liability for claims of which she, he, or it, has had notice, if the necessary steps are taken and, not being the NSW Trustee and Guardian, she, he, or it, subsequently obtains the order of the Court barring the claim.
14. Thus, a notice given under s 93 is not designed to give to an executor or administrator a means of determining questions that have arisen in the course of her, his, or its, administration, as to her, his, or its, rights or obligations. It has a different object. Having made up her, his, or its, mind that a claim against the estate is not maintainable, the executor or administrator is faced with the difficulty, that if the claim is disregarded and the estate property is distributed, an action might subsequently be brought against the estate, and if she, he or it, were wrong in the opinion upon which she, he or it had acted, would find herself, himself, or itself, liable to pay the quantum of the proved claim out of her, his or its, own pocket.
15. In In the Will of Walker (1943) 43 SR (NSW) 305, the relevant notices calling on the defendants to take proceedings to enforce their respective claims by instituting proceedings within six months had been published, but neither of them had done so. Nicholas CJ in Eq held that the claims of the two respondents should be barred. His Honour wrote, at 307: "If there are disputable claims, then it appears to me that the executor has the right under s. 93 to call upon a claimant to prosecute his claim and, if he fails to do so, the executor is entitled to apply to the Court for an order barring the claim."
16. In In re Long (decd) [1951] NZLR 661 at 672, the New Zealand Court of Appeal summarised the conclusions which were reached following the review of the case law relating to an equivalent section and said that the section: "... provides a special procedure for the benefit of administrators, a procedure which is not available to ordinary persons. Presumably, administrators were given this advantage because of the special difficulties of their position; uncertain claims might make it impossible for them to ascertain the amount of the estate assets so as to have duty assessed and paid and might also prevent beneficiaries from obtaining payment of moneys or transfer of properties to which they would otherwise be entitled. We think, therefore, that it is proper to give the section its full, natural meaning as applying in every case where there is a claim of any sort against the administrator as such, requiring to be met by him in the due course of his administration, whether it affects the assets of the estate directly or affects them indirectly through the administrator. In either case, the administrator cannot safely distribute without the protection of the Court and that protection is as valuable in the one case as in the other. ..."
17. In Olsen v James [2020] NSWSC 1015, Parker J at [118] described the s 93 procedure as "the most direct way of bringing the question about the potential claim … to a head". It requires a potential plaintiff to "put up or shut up", particularly in respect of allegations which impact on the proper administration of the deceased's estate.
18. His Honour had earlier written in Application of Lewis; Estate of the late Shirley Jean Coleman [2020] NSWSC 192 at [21], that if the procedure were followed and no claim were brought within the three-month period, then the administrator could make an application for a barring order, which would: "… be an ordinary adversarial application inter partes, and the Court directly considers the underlying issue, namely whether the claim should be extinguished. The Court also has power to impose appropriate conditions on the belated bringing of any such claim, and that power would enable the Court to impose appropriate conditions (for example, the giving of an undertaking to pay interest) which would protect the interests of the beneficiaries of the estate from any delay."
19. Ordinarily, the service of a s 93 notice, and the failure of the person upon whom it is served to prosecute the claim, provides a jurisdictional basis for the court to then make an order barring the claim, if in the circumstances the court thinks that is appropriate.
20. Of course, if the s 93 notice is given and proceedings are then brought in response to that notice, no question of protecting the executor or administrator will arise. The executor or administrator will simply defend those proceedings in the usual way.
21. There are a limited number of reported decisions on an application under s 93. It seems to me that the following procedure and principles should be remembered in an application to bar a claim: 1. Section 93 recognises that claims are often raised with executors or administrators of a deceased's estate. It is only if she, he or it, disputes the claim, that the section provides a mechanism for giving notice to the claimant to commence proceedings and, in the absence of such proceedings being commenced within 3 months, to obtain an order from the Court barring the proposed claim, so that the estate may be administered, despite the threatened claims. 2. If the claimant has provided information in support of her, his, or its, claim, the executor or administrator must consider that information to determine whether the claim should be disputed. Then, the service of a s 93 notice provides further impetus, if that is needed, to the claimant to pursue the claim by the issue of proceedings. 3. The application under s 93 is usually made ex parte, with the applicant being under the obligations of frank disclosure which attach to any ex parte application: Ludwig v The Public Trustee (2006) 68 NSWLR 69; [2006] NSWSC 890 at [273] (Campbell J). 4. An application under s 93 is commenced by way of summons, and should be accompanied by a supporting affidavit(s). 5. The court is not required to undertake a substantive assessment of the merits of the claim that has been made. However, if it appears that the claim has merit, that may be taken into account when considering if it should be barred: Graham v Graham [2015] NZHC 1571 at [14] (Dunningham J). Even then, and if there is an explanation for the failure to initiate the claim at the date of the hearing, the court may only make such other order in respect of the application as it thinks just and equitable, having regard to the circumstances of the case. 6. Naturally, a court is reluctant to bar a party from pursuing a claim that may have merit. However, the period of notice and the requirement of an application of this kind recognises that this may be an available outcome in certain circumstances. 7. The affidavit in support of the Summons should include details of the following: 1. That the plaintiff is the executor or administrator, the date of death of the deceased, and the date of the grant of probate or letters of administration, including a copy of the grant. 2. The publication of the Notice of Intended Distribution of an Estate, including a copy of the notice. 3. When the claim was first made, and when it was responded to, by the executor or administrator, who stated that the claim was disputed. A copy of the claim should be annexed. 4. That the executor or administrator disputes the claimant's claim, and the reasons for that dispute with a copy of the relevant document. 5. Evidence of service of the executor's or administrator's notice disputing the claim on the claimant and the date on which the notice was served. 6. That the claimant has been advised that an order has been sought from the Court that the claimant's claim be barred, with a copy of that advice annexed. 7. Whether the claimant had legal assistance at the time of the claim. 1. The stage of the administration of the deceased's estate may be relevant factors in considering whether to make an order, as will evidence of any steps taken by the claimant following the service of the s 93 notice. Any explanation advanced by the claimant going to why proceedings have not been commenced should be considered.

Determination

1. With these principles in mind, the question the Court must answer is whether the threatened claim by the Defendant should be barred.
2. The documents submitted to the Plaintiff, by the Defendant's solicitors, satisfies me that the Plaintiff was given notice of "a claim". It is to be remembered that the notice of claim submitted to the administrator needs not be formal, and here, some particulars of the Defendant's claim were also provided to her.
3. Having read the evidence, I am satisfied that: 1. At least 6 months has passed since the deceased's death. 2. The Plaintiff has published a Notice of Intended Distribution of an Estate under s 92(1). 3. More than 30 days have elapsed (having expired on 17 June 2021) since publication of that notice and before she served a notice under s 93(1) calling on the Defendant to take steps to enforce the Claim. 4. She has waited more than 3 months to file the Summons seeking an order under s 93(2) as required under the terms of that provision. 5. No claim in respect of the assets of that estate has been submitted to her, as administrator, which means that the Court would not be satisfied that the Defendant is prosecuting his claim. 6. She has fulfilled the statutory time requirements to enable the making of an application for an order under s 93(2).
4. The threatened claim by the Defendant should be barred. The deceased died almost 5 years ago. The administration of the estate has proceeded since then. Notice of the claim was given within 18 months of the deceased's death and particulars concerning the claim were provided to the Plaintiff, as administrator, over 2 years later. In this way, the Plaintiff had notice of the Defendant's claim.
5. The Defendant has known that the Plaintiff disputed his claim since at least July 2020, if not before that date. Then, at one time, the lawyers acting for the Defendant stated explicitly that his claim was not being pressed.
6. Virtually nothing has been done by the Defendant since that time and no explanation has been given going to why no steps have been taken to commence proceedings from when he had knowledge that the Plaintiff, as administrator of the deceased's estate, was disputing the claim. All this reveals that the Defendant's asserted claim has not been prosecuted with due diligence.
7. Even since July and August 2021, the Defendant has failed to take any steps to progress his claim and even now, over 6 months since the notice was served upon him, he has still done nothing. He has provided no, let alone no satisfactory, reasons for his failure to do so.
8. The proceedings were commenced in November 2021, were served in late December 2021 and have been before the Court twice since then, with no appearance by, or on behalf of, the Defendant. I am satisfied that the Defendant does not appear to wish to proceed with any claim that he has asserted that he has against the estate, and I am satisfied the Plaintiff has taken more than reasonable steps to advise the Defendant of these proceedings and to provide him with an opportunity to be heard.
9. I am satisfied that the actions of the Defendant have caused some delay in the administration of the deceased's estate. In all the circumstances, the orders sought by the Plaintiff should now be made. Otherwise, it would be oppressive and prejudicial not only to the administrator, but also to those entitled to the distribution of the estate.
10. The Court in Chambers: 1. Orders, pursuant to s 93(2) of the Probate and Administration Act 1898 (NSW), that the Defendant is barred from making any claim against the Plaintiff as administrator of the estate of Vivienne Violet Snape, who died on 30 March 2017. 2. Orders that the Plaintiff's costs, calculated on the indemnity basis, of the proceedings, be paid out of the estate of the deceased.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 March 2022