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[2025] NSWSC 330
Supreme Court of NSW
2025-04-07
Slattery J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Estate of Boes [2025] NSWSC 330
Hearing dates: 13 March 2025
Date of orders: 20 March 2025
Decision date: 07 April 2025
Jurisdiction: Equity - Probate List
Before: Slattery J
Decision: Plaintiff appointed administrator pendente lite. Orders made to ensure that the plaintiff’s administration of the estate is as open to ready scrutiny by the Court, by the defendant and by any other beneficiary as is practicable. Costs reserved.
Catchwords: PROBATE – Probate and administration – administration of estates – Administration pending contested probate suit – plaintiff is the named executor in both the deceased’s will and a codicil to that will – plaintiff is not a beneficiary of either the will or the codicil – contest as to whether the codicil should be admitted to probate – the deceased’s estate includes a nursery business requiring management and other estate assets which require superintendence pending the completion of the probate litigation – the defendant, a daughter of the deceased, is a substantial beneficiary of the will and a lesser beneficiary under the codicil plaintiff – the defendant’s experience of the plaintiff has caused her to deeply distrust him – the defendant applies for the appointment of an independent administrator – whether the plaintiff or an independent administrator should be appointed.
Legislation Cited: Probate and Administration Act 1898, s 73
Cases Cited: Estate Ritossa, Deceased [2022] NSWSC 1083
Labraga v Pomfret; Highland v Labraga [2005] NSWSC 973
Re Stewart (1869) LR 1 P & D 727
Uniting Church in Australia Property Trust NSW v Millane [2002] NSWSC 1070
Category: Procedural rulings
Parties: Plaintiff: Douglas John Eaton
Defendant: Sabine Annegret Charlotte Boes
Representation: Counsel:
Plaintiff: L Ellison SC
Defendant: S Clemmett
Solicitors:
Plaintiff: MJM Lawyers
Defendant: O’Rourke & Associates
File Number(s): 2025/95746
Publication restriction: N/A
The plaintiff, Douglas John Eaton, is the executor named in the will of the late Christian Heinrich Boes (“the deceased”) dated 23 December 2022 who died on 16 February 2025 aged 93. The defendant, Dr Sabine Annegret Charlotte Boes, is the eldest of the deceased’s 2 children. The plaintiff sought that he be appointed as interim administrator of the deceased’s estate. The defendant sought the appointment of an independent interim administrator.
The proceedings were commenced urgently in the Probate list late in the afternoon of Tuesday 11 March 2025, less than four weeks after the deceased’s death. An interlocutory hearing took place on Thursday 13 March 2025. The deceased was a small business owner, operating a plant nursery in Ourimbah, (known as "Big Flower") on the Central Coast of this State. The immediate need to support and curate the nursery stock led to this urgency.
The Court made orders on 20 March 2025 appointing the plaintiff as the administrator of the deceased’s estate. But the Court has placed limits and close controls on the plaintiff’s exercise of powers to administer the estate, until a full grant of administration is made.
The orders made in this case demonstrate that the frequent struggles in the Probate jurisdiction to take interim control of estates often represent a nearly illusory contest. The perceived benefits of control are dubious. If one of the competing parties is appointed, the Court may fashion orders, as it has done here, that require the party given the appointment to share information on a regular basis, consult about specific decisions, engage professional advisers based on mandated transparency and exercise only limited powers. The objective in moulding such orders is to build confidence in the proper and orderly administration of the estate pending hearing of the probate suit.
Mr L Ellison SC appeared for the plaintiff instructed by MJM Lawyers and Ms S Clemmett appeared for the defendant on 13 March instructed by O’Rourke & Associates. Solicitors and counsel all presented the case efficiently. All the evidence was ready on the first return date. Cross examination and submissions followed. When the Court published orders on 20 March, it indicated that reasons would be published later. These are those reasons.
The deceased died on 16 February 2025. He was survived by his two children, Sabine Boes and Hans Boes, five grandchildren and one great-grandchild. A future contest is likely as to whether the deceased was in a de facto relationship with Ms Hussan Bano, who also survived him.
The deceased made a will on 23 December 2022 (“the 2022 will”) and a later codicil to the 2022 will on 21 February 2024 (“the 2024 codicil”). The 2024 codicil was prepared by the plaintiff, a solicitor and a long-standing acquaintance of the deceased. Its validity is contested by the defendant on various bases which are not material for present purposes.
The 2022 will appointed the plaintiff as his executor. Under the 2022 will, the defendant is given the nursery business, the deceased’s land in Ourimbah on which the nursery business operates and the deceased’s residential property in Yarramalong, following the grant of a life estate in that property to Ms Bano. The 2024 codicil cancels these gifts to the defendant and gives these assets to Ms Bano and her son, Mr Muith Singh.
The deceased was the sole director and majority shareholder of Boes Technology BT Pty Ltd ("the Company"), which conducts the nursery business at Ourimbah. The issued share capital of the Company is 20160 ordinary shares. The deceased held 19000 ordinary shares, the defendant held 1000 and the remaining shares are held by employees of the nursery business, Lynette and Rex Smoothie, with 80 ordinary shares each.
It was not disputed that the business has an annual turnover between $500,000 and $700,000. The Company’s bank accounts are all in the name of the deceased. As a result of the dispute and the lack of a grant of probate, the deceased’s bank accounts, including the Company’s bank accounts are inoperative. The Company’s tax returns are overdue, its accountant, Mr Peter McIntyre lacks confidence in its financial controls and its compliance with tax, corporations and employee superannuation obligations.
At the time of the deceased’s death, Mr McIntyre was on the verge of terminating his retainer because of the deceased’s inability or unwillingness to follow his advice about the Company’s financial affairs. The problems with those financial affairs was a suspicion that Ms Bano was being partly paid in cash and that her son, Mr Singh was receiving cash even though he said he was working voluntarily for the Company because he was under visa related employment restrictions in Australia.
An appointment of an administrator is necessary. The Company is without a director to guide its business affairs and ensure its compliance with tax, corporations and superannuation legislation. The nursery business has a small number of employees, and its goodwill and viability depend to a degree upon the continuity of their employment, at least in the short to medium term.
Unless an administrator is appointed urgently the estate and the Company face the risk of financial loss.
The plaintiff’s Motion filed on 11 March 2025 seeks a grant of administration of the deceased’s estate with powers to take proactive steps to stabilise the nursery business, represent the estate in legal proceedings and attend to the financial affairs of the Company and of the deceased’s estate. The plaintiff put forward a plan that should he be appointed as administrator and stand in the shoes of the deceased as a shareholder of the Company, that he would appoint Ms Smoothie as a director of the Company so that she could conduct the day-to-day affairs of the nursery business.
The Court accepts the plaintiff’s evidence that the nursery business needed urgent attention. At the time of the application, the nursery business had an estimated $700,000 worth perishable plant stock, the business bank accounts in the deceased’s name were suspended, and employees were going unpaid.
The defendant’s evidence painted a similar picture of financial disarray adding that the deceased had not lodged tax returns either for the Company or himself from business for some time.
The defendant’s evidence showed that she genuinely and strongly distrusted the plaintiff. She acknowledged a long-standing acquaintance between the plaintiff and the deceased but said that the relationship was not one which promoted the best in the deceased. Details of the defendant’s criticisms are not material for present purposes. The defendant believed that the plaintiff would administer the estate to favour Ms Bano and members of her family and that he would promote their interests rather than the defendant’s interests. The plaintiff contended that he would administer the estate objectively.
The case for the urgent appointment of an administrator is made out. The Court accepts that unless an appointment is made that the value of the business, an important estate asset, is likely to be impaired. But the question this case raises is a familiar one: whether someone known to the deceased (in this case the plaintiff) or an independent administrator should be appointed.
The plaintiff submitted that he was suitable for appointment as administrator because he is the executor nominated by the deceased in the will. There is no challenge to the deceased's capacity. The deceased is presumed to know all his executor's shortcomings, as well as the advantages appointment.
The plaintiff further submitted that notwithstanding his entitlement to charge his ordinary professional fees as a solicitor to the estate, he knows the business and the business premises, has an established rapport with the employees, and is familiar with the issues which require resolution, including the deceased’s relaxed attitude to compliance with the regulatory obligations of the nursery business. The Court accepts that appointing the plaintiff has these practical advantages.
The plaintiff contended that Ms Smoothie was a suitable appointee for the office of director of the Company given she had been working at the nursery for over 30 years and was familiar with the other employees and is one of the key personnel of the business. The plaintiff’s familiarity with Mr and Ms Smoothie weighs in favour of his appointment because it would promote their continuity in the nursery business.
The defendant objected to Ms Smoothie’s appointment. She submitted with some force that whilst Ms Smoothie may have practical day-to-day familiarity with the business, she was much less qualified to negotiate the regulatory compliance tasks required of a company director. Looking at Ms Smoothie’s background, the Court agrees with this submission.
Finally, the plaintiff submitted that his objective, if appointed, would be to stabilise the Company’s situation, regularise the Company’s accounts and make the Company compliant with applicable standards such that the nursery business may continue to run as a going concern.
The defendant also submitted that the plaintiff had conflicts between his own interests and the duties he would owe to the estate as administrator. For example, she submitted that the estate may have a claim against him for his role in drafting the codicil and other documents related to separate proceedings in which the deceased was involved. The plaintiff also owns a 48% interest in a hardware company that has a commercial relationship with the nursery business, and which owns land that supplies bore water to the nursery, presently on a no or low-cost basis. The defendant was also concerned that the plaintiff might continue to run the nursery business for the benefit of Ms Bano and the current employees, when in truth it was not financially viable and should be shut down and the land redeveloped to its highest and best use.
But the defendant’s main concern was her perception that the plaintiff would be biased against her. This in turn led to fears on her part that if he were appointed as administrator of the estate that he would cause an increase in the cost of bore water or hardware supplies to the nursery business. The defendant was firm in her opposition to the plaintiff having any control of the deceased’s estate.
“73 Administration pendente lite and receiver
(1) The Court may--
(a) pending any suit touching the validity of the will of any deceased person, or for obtaining, recalling, or revoking any probate or any grant of administration, or
(b) during a contested right to administration,
appoint an administrator of the personal estate and the same or any other person to be receiver of the real estate of any deceased person, with such full or limited powers and with or without a bond or sureties as the Court may think right.
(2) The Court may make such orders for the remuneration of such administrator or receiver out of the personal and real estate of the deceased as it may think right.”
The appointment should be crafted to meet the convenience or necessity of the situation. For example, the appointment of a creditor will usually be limited to collecting the estate to pay the debt due to the creditor: Re Stewart (1869) LR 1 P & D 727. A common objective of such appointments is to preserve the estate by collecting, securing and prevent the wasting of estate assets, as the old Latin title of this form of appointment suggests – the administration is ad colligenda bona defuncti. Such limited grants do not normally encompass the investment, sale or distribution of estate assets.
In Estate Ritossa*, Deceased* [2022] NSWSC 1083 (at [21]–[24]), Lindsay J summarised the approach of the Courts exercising their discretion to appoint an administrator pendente lite as follows:
[21] The appointment of an interim administrator pending the determination of a contested probate suit (upon an exercise of the Court’s inherent probate jurisdiction, traditionally effected by a grant of administration pendente lite or by reference to section 73 of the Probate and Administration Act 1898) is not made merely as a matter of routine or simply because a contested probate suit is pending. The Court must be satisfied that an order for the appointment of an interim administrator advances the due and proper administration of the estate and the interests of persons beneficially entitled to the estate.
[22] In Gooley v Gooley [2020] NSWSC 798 at [125]-[126] Williams J made the following observations (with editorial adaption):
“[125] In my opinion, … [a search for a] “necessity” or “sufficient reason” for the appointment of an administrator pendente lite is directed to a need for the Court to be satisfied that, in all the circumstances of the case, the assets of the deceased estate are in some jeopardy, and the appointment of an administrator pendente lite will remove, or at least reduce, that jeopardy. As the plaintiffs’ submissions acknowledged, it is not necessary that the jeopardy arise from some misconduct on the part of a person dealing with or claiming to preserve the assets of the deceased estate. …
[126] The object of an appointment of administrator pendente lite is to ensure that the deceased estate is managed and preserved for the benefit of those persons who may ultimately be found in the suit to be entitled to it. The administrator is required to act impartially as between the potential beneficiaries. Section 73 of the PA Act allows the Court to mould the powers of the administrator in a manner best designed to achieve that object in the specific circumstances of the case: Henderson v Executor Trustee Australia Ltd (2005) 93 SASR 337; [2005] SASC 477 at [44]–[45], [53] (Debelle J, Anderson J agreeing); Hempseed v Ward [2013] QSC 348 at [14] (McMeekin J).”
[23] A court giving effect to the purposive nature of probate proceedings, and the particular object of the appointment of an interim administrator pending the determination of a probate suit, is not required, as a condition precedent to the appointment of an administrator, to make a formal finding that an estate is or would be “in jeopardy” absent the appointment of an administrator. Reference to an estate being “in some jeopardy” is a convenient way of giving practical expression to a perceived “necessity” or “sufficient reason” for engagement with the object of the appointment of an administrator. This requires an exercise of judgment in each case, not a formalistic search for “jeopardy”, as the plaintiff in the present proceedings urged upon the Court. I do not understand Williams J to have suggested otherwise.
[24] With that explanation, I agree with her Honour’s observations. They are consistent with, and reflect, the purposive nature of an exercise of probate jurisdiction, which is to carry out a deceased person’s duly expressed testamentary intentions, and to see that beneficiaries entitled to a deceased estate get what is due to them, without delay: In the Goods of William Loveday [1900] P154 at 157; Bates v Messner (1967) 67 SR (NSW) 187 at 189 and 191-192.
The defendant disputes the validity of the 2022 will as varied by the 2024 codicil. Thus there will be a contest as to the validity of the will, which enlivens s 73(1)(a).
The Court makes an appointment in circumstances such as these to preserve the estate so that once the dispute as to what the deceased’s testamentary intentions is resolved, his testamentary bounty can be distributed.
It is also well-established that if a person appoints their business partner as executor, then the testator has consented to any conflict of duty and interest that must invariably arise: see Labraga v Pomfret; Highland v Labraga [2005] NSWSC 973 at [113] (Young J) citing Hordern v Hordern [1910] AC 465 at 475.
Moreover, a testator's choice of executor is important and implies that the deceased reposed trust in the executor and considers the executor to have been both suitable and capable of performing the duties required, so such a person is not passed over lightly: Uniting Church in Australia Property Trust NSW v Millane [2002] NSWSC 1070 at [9].
Both the plaintiff’s and the defendant’s proposals have disadvantages, which presents to the Court a familiar contest. The defendant’s proposal will incur the significant costs and fees associated with appointing a professional independent administrator. Because of the poor state of the Company’s books, it is not yet clear if the nursery business is profitable and that there is sufficient cash flow and profitability to support incurring such fees.
On the other hand, the plaintiff will be charging professional fees. But he has the advantage of not having to familiarise himself with the business and should be expected to immediately command the confidence of the employees with whom he is familiar. It is this very familiarity which arouses the defendant’s suspicion. But the Court can put in place appropriately robust controls to ensure transparency and accountability of the plaintiff’s conduct as administrator, to overcome the suspicions that might arise in the mind of a reasonable person in the position of the defendant.
The plaintiff’s present proposal seeks his appointment with few of the controls which the Court regards as necessary to contain any damage from potential conflicts of interest that he might have. Once those controls are put in place overall there are practical and financial efficiencies that favour the plaintiff being appointed as administrator because of his familiarity with the nursery business, which is likely to be the most time-consuming part of the estate’s administration.
The plaintiff’s competing commercial interests and the mistrust the defendant has of him cannot be ignored. The Court accepts that the Company’s inadequate bookkeeping and regulatory compliance has deprived the defendant of information. But the vectors generating that mistrust can be reduced by appropriately moulded relief.
Finally, there given the above authorities in relation to a testator’s choice of executor, there is force in the plaintiff’s submission that as the executor appointed under the 2022 will (and the 2024 codicil), that he is the most suitable person to be appointed administrator while the issues in these proceedings are being disputed.
But how can the disadvantages of appointing the plaintiff be contained? Orders can made to (a) reduce the impact of identified conflicts of interest or perceived bias and (b) to ensure that the plaintiff’s administration of the estate is as open to ready scrutiny by the Court, by the defendant and by any other beneficiary as is practicable.
As to reducing the impact of identified conflicts of interest or perceived bias, the orders below target that problem directly by preventing the administrator without prior leave of the Court from changing the structure of the Company, from paying wages to Mr Singh, from paying Ms Bano more than she is presently paid on average, from contracting personally with the Company, from paying wages in cash or from causing suppliers to the Company in which he has a financial interest to materially change their terms of trade with the Company.
For these reasons, the Court makes the following interim orders and procedural directions.
The Court:
(a) the collection and preservation of all assets of the deceased, (b) the payment of liabilities of the deceased, or the estate of the deceased, incurred in the ordinary course of business, including insurance premiums and utilities, (c) corresponding with the Australian Taxation Office in respect of the taxation affairs of the deceased and/or the estate of the deceased, (d) taking all reasonable steps as may be necessary to investigate the existence of assets forming part of the deceased's estate, including but not limited to
(i) assets located outside of New South Wales, (ii) assets located outside of Australia, and (iii) funds held on trust for the estate,
(e) obtaining valuations of the assets of the deceased's real estate, (f) establishing and operating, in the ordinary course, of a bank account or accounts in the name of the estate of the deceased, (g) keeping an account of all receipts and disbursements of the administration of the estate of the deceased, (h) leasing (for a period of no more than twelve (12) months) real estate comprising part of the deceased's estate, (i) appointing an agent (including a solicitor, accountant, or real estate agent), to do any business that the Administrator is unable to do, or that it is unreasonable to expect the Interim Administrator to do, in person, (j) doing all such things, and executing all such documents, as are incidental to the powers hereby conferred, and (k) the administrator shall proceed no further or otherwise than as aforesaid or in any other manner whatsoever and shall not distribute the estate until further order.
(a) publication of notice of intention to apply for this interim grant of administration, (b) an administration bond and sureties; or (c) further compliance with the Probate Rules for this grant of administration of the estate.
(a) shall not without the prior leave of the Court
(i) make any application to wind-up the Company, or place it in any form of external control or administration, (ii) deal with any of the assets of the Company other than in the normal course of business, (iii) appoint anyone other than himself a director of the Company, (iv) issue any shares in the Company to any person, (v) pay any wages to Mr Mohit Singh or any agent to receive wages on his behalf, (vi) pay wages to Ms Hussan Bano (or any agent to receive wages on her behalf) beyond the quantum of the weekly earnings paid to her by the deceased before his death, averaged over the six months prior to his death, (vii) contract personally with the Company to supply services to it,
(b) shall
(i) within 28 days of the date of these orders take all necessary steps to ensure that the payment of wages to the Company's employees, the recording of the Company's financial transactions, and the Company's bookkeeping systems are compliant with applicable taxation laws and accounting standards, (ii) within 28 days of the date of these orders record the company's financial affairs on current accounting software acceptable to Mr McIntyre, (iii) and thereafter provide to the defendant or her nominee within three business days of the end of each calendar month, a printout of the Company's management accounts, showing cash flow, a profit and loss statement and a balance sheet (or electronic file copy of the same information at the defendant's option); (iv) promptly attend to filing the deceased's outstanding tax returns, and (v) promptly inform the defendant, if any company in which the administrator has a financial interest, which trades with, or provides supplies or resources to the Company, materially changes its terms of trade with or the availability of supply to the Company.
(c) shall not
(i) pay wages in cash to any employee or amounts in cash to any contractor to the Company, (ii) do any act or take any step to facilitate any company in which the administrator has a financial interest, which trades with or provides supplies or resources to the Company, to materially change its terms of trade with or the availability of supply of any resource to the Company.
(a) shall provide a copy of these orders to Mr McIntyre within seven days and request Mr McIntyre to assist the administrator in the implementation of these orders, and (b) engage McIntyre on behalf of the Company to provide a written report to the administrator, the plaintiff and the Court within six weeks (or such further period as Mr McIntyre reasonably requires), which report gives his professional opinion in answer to the following questions:
(i) whether the nursery business conducted by the Company is financially viable as it is presently being conducted, (ii) whether financial, structural or other changes are needed to make the nursery business financially viable, and if so, what those changes are, (iii) whether he is satisfied that the Company's affairs are being conducted in compliance with applicable taxation and superannuation laws and accounting standards, (iv) if he is not satisfied that the Company's affairs are being conducted in compliance with applicable taxation and superannuation laws and accounting standards, what changes are required to ensure that the company's affairs do comply.
(a) The formal affidavits as required by the Rules; (b) an Affidavit setting out the circumstances by which he took instructions, drafted and had executed the 2024 Codicil.
**********
(2005) 93 SASR 337
The defendant therefore proposed that an independent administrator be appointed to coordinate with the Company’s accountant, Mr McIntyre, to evaluate the business and determine what should be done based on the findings of that investigation.
As to opening the plaintiff’s administration of the estate to ready scrutiny, the orders made require the plaintiff upon appointment to prioritise the proper recording of the Company’s financial transactions in a manner acceptable to the estate’s accountant, Mr McIntyre. In addition, at the end of each calendar month, a written report of the payments and transactions in relation to the estate and a printout of the Company's management accounts, showing cash flow, a profit and loss statement and a balance sheet shall be provided to the defendant. Finally, the administrator will be required to engage Mr McIntyre on behalf the Company to provide a written report to the administrator and the Court in relation to the financial viability of the nursery business.