Grant MacDonald -v- Public Trustee of New South Wales [2007] NSWSC 1237

CATCHWORDS : Trusts and trustees. Intestate estate. Administrator fails to administer estate for almost forty years. Obligation of administrator to ascertain identity of persons entitled upon intestacy and to distribute estate to those persons. Failure of administrator to ascertain indentity of such persons, by way of next of kin inquiry or otherwise. Assets of estate transferred to Treasury, which seems now unable to locate those funds. Claim by a person entitled to share in intestate estate. Whether Plaintiff is entitled to claim on behalf of other persons so entitled or only on behalf of himself. Application by Plaintiff for leave to amend summons. Application by administrator for dismissal of proceedings. Administrator not entitled to recoup from estate its costs in respect to either application.

PARTIES : Grant MacDonald (Plaintiff) Public Trustee of New South Wales (Defendant)

SOLICITORS : Mr Grant MacDonald (in person) Mr Gordon A Salier (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2077 of 2007 GRANT MACDONALD -v- PUBLIC TRUSTEE OF NEW SOUTH WALES JUDGMENT 1 HIS HONOUR: These proceedings were instituted by summons filed on 30 March 2007 by Grant MacDonald. He has instituted the proceedings in person and has appeared before me today without any legal representation. 2 The defendants named in that summons were the Public Trustee of New South Wales and the State Treasury of New South Wales. Subsequently, the plaintiff filed a notice of discontinuance against the second defendant, the State Treasury of New South Wales, and the proceedings have continued against only the first defendant, the Public Trustee. The relief sought in the summons is as follows:

1. A declaration that the defendant holds all money paid to him in respect of the sale of 106 Joseph St, Lidcombe on trust for the plaintiff.

2. An order that the defendant forthwith disclosed to the plaintiff the sum of money received by him with respect to the said sale, when it was received and all facts within his knowledge as to the present whereabouts of the said sum of money.

3. An order that the defendant account to the plaintiff for the said sum of money. 3 There is presently before the Court a notice of motion filed by the plaintiff on 26 July 2007 by which the plaintiff seeks leave in the terms sought in that notice of motion "to amend summons and affidavit". 4 The present hearing has proceeded on the basis that it is an application by the plaintiff for leave to amend the summons. 5 The plaintiff has placed before the Court a document which is the form of the proposed amended summons. The first difference to be observed between the proposed amended summons and the summons as originally filed is that in the initiating document the plaintiff is named as "Grant MacDonald as nominated representative of Elizabeth Ingoldsby, the deceased." In the proposed amended summons the plaintiff is identified merely as Grant MacDonald and the descriptive capacity of the plaintiff is omitted. The relief sought in the proposed amended summons is as follows: " The plaintiff claims that the defendant has shown breach of statutory duty, a breach of fiduciary duty, breach of trust, breach of duty of care, and negligence and seeks equitable compensation or relief at the Courts discretion if interest can be awarded on Theresa Stapleton's estate. The plaintiff asks for a consideration of compound interest." 6 In order to understand the basis upon which the plaintiff seeks the leave of the Court to amend the summons and the basis upon which that leave is opposed by the defendant, it is necessary that I should refer, at least in summary, to the factual background of the proceedings. That factual background has emerged from a considerable quantity of affidavit evidence filed by the plaintiff, consisting essentially of affidavits of himself and affidavits of two other persons. The factual background also emerges from a number of affidavits filed on behalf of the defendant, being affidavits of Margaret Pringle, who is a solicitor employed by the Public trustee and who has the carriage of this matter. The source of information presented to the Court by Ms Pringle are the books and records of the Public Trustee. 7 The present proceedings relate to the estate of the late Theresa Stapleton, née Carter (to whom I shall refer as the "deceased"). She died intestate on 23 June 1968. Letters of administration of her intestate estate were granted to the Public Trustee on 5 November 1968. 8 The deceased was not survived by any spouse or by any children. It would appear, however, that she was survived by two siblings. The plaintiff is the grandson of one of those two siblings of the deceased; that is, the deceased was the plaintiff's great aunt. 9 The picture which emerges in respect to the administration of the estate of the deceased in the period of almost 40 years since the death of the deceased is a disturbing one. The estate appears to have had only one significant asset, being a house property situate at 106 Joseph Street, Lidcombe. For probate purposes that house property was valued at $6,750. It was subsequently sold to the Department of Main Roads for $6,000, that sale being completed on 17 November 1970. All other assets of the estate were got in, and funeral and testamentary expenses were paid, including death duties of $336. 10 For reasons which did not emerge with any clarity from the voluminous material placed before the Court, a decision appears to have been made by a functionary in the office of the Public Trustee that various relatives and kinsfolk of the deceased (including the present plaintiff and other members of his family) would not be able to establish to the satisfaction of the Public Trustee that their respective parents and grandparents were siblings of the deceased, and that therefore the Public Trustee should not proceed to carry out its statutory duty to administer the estate of the deceased but should hold the assets of the estate in abeyance. 11 Subsequently, the Public Trustee in 1988 and 1990 transferred those assets, then totalling (as a result of income earned on the proceeds of sale of the house property) in excess of $11,000, to the Treasury of New South Wales. 12 The Public Trustee had at the time, and still has, a statutory duty to distribute the intestate estate of the deceased to those entitled upon intestacy. If the Public Trustee was not satisfied by the material which it held as to the identity of the persons entitled upon intestacy, then it could have availed itself, as it frequently does in this Court in other estates, of the right to approach the Court by way of a next of kin enquiry. It apparently chose not to do so. 13 It would appear that the concern of the functionary in the office of the Public Trustee, who in 1978, some ten years after the death of the deceased, chose to place the administration of the estate in abeyance, was that the kinsfolk of the deceased were not able to produce to the Public Trustee a certificate of the marriage of the parents of the deceased, which would thus have an established that the two surviving siblings of the deceased were in fact her siblings. 14 It was not the obligation of the kinsfolk to produce such a certificate of marriage to the Public Trustee. It was the obligation of the Public trustee to administer the intestate estate by distributing it to those entitled upon intestacy. If the Public Trustee did not know the identity of those persons, then it should have approached the Court. To merely have placed the administration in abeyance was a failure on the part of the Public Trustee to carry out its statutory duty. 15 For the Public Trustee then to transfer the assets of the estate from out of its control to the Treasury of New South Wales seems to have been unnecessary. No adequate explanation has been offered for the conduct of the Public Trustee in that regard. However, it would appear that the Public Trustee has now attempted to recreate what might be described as an account in respect to the intestate estate of the deceased, so that for practical purposes the funds representing the estate of the deceased will ultimately be available for distribution to the persons entitled to those funds. 16 I would also record that it would appear that the Treasury has not maintained its records in this regard with any degree of precision, and seems now to be unable to locate the specific funds transferred to it by the Public Trustee representing the assets of the estate of the deceased. However, as I have observed, the evidence placed before the Court by the Public Trustee indicates that for practical purposes there will be no disadvantage or detriment to the estate resulting from either the transfer of the funds to the Treasury or the inability of the Treasury presently to locate the specific funds. 17 The considerable correspondence which has been placed before the Court reveals that in relatively recent times the Public Trustee has indicated that it is prepared, without the existence of a marriage certificate relating to a marriage which would have occurred in Ireland probably in the 1860s, to be satisfied that the two persons who asserted themselves to be siblings of the deceased were in fact the legitimate siblings of the deceased. 18 Why the Public Trustee has waited the best part of 40 years before making that acknowledgement is not explained. As I have attempted to emphasise, if the Public Trustee was concerned about the relationship of the asserted siblings of the deceased, then the Public Trustee should have approached the Court by way of a next of kin enquiry. 19 The present substantive proceedings were instituted by a summons by which the plaintiff asserted that he was the nominated representative of Elizabeth Ingoldsby, deceased. Elizabeth Ingoldsby was one of the siblings of the deceased herself. The plaintiff is not the executor of any will or administrator of the estate of Elizabeth Ingoldsby; neither is he the executor or administrator of any deceased executor or administrator of Elizabeth Ingoldsby. 20 The plaintiff does not have the standing to bring the present proceedings on behalf of anyone else. This is despite a document from persons who are cousins to the plaintiff, purporting to authorise the plaintiff to bring these proceedings on their behalf. To the extent that the proceedings were instituted by the plaintiff in a representative capacity, the proceedings were improperly constituted and improperly instituted. The plaintiff appears now to recognize that fact and the proposed amended summons which the plaintiff presently seeks the leave of the Court to file omits the assertion of the plaintiff that he brings the proceedings in some form of representative capacity. 21 The relief which is claimed by the plaintiff in the proposed amended summons is relief in respect of the plaintiff's own rights. The Public Trustee acknowledges that the plaintiff is entitled as a beneficiary in the estate of the deceased. He is entitled to either a one twentieth interest in the estate or, upon information communicated to the Court by the solicitor for the defendant during the course of today's hearing, the plaintiff is entitled to a one tenth interest in the estate of the deceased. It will be appreciated that in either case the monetary amount to which the plaintiff is entitled in respect of an estate which has a present value of less than $12,000 is relatively small. 22 However, the plaintiff is desirous of asserting that in its administration of the estate the defendant has been guilty of breaches of statutory duty, fiduciary duty, breach of trust, breach duty of care, and negligence. The plaintiff seeks equitable compensation or discretionary relief and seeks interest and asks for the interest to be by way of compound interest. 23 As a beneficiary in the estate of the deceased the plaintiff is certainly entitled to raise the various matters concerning the conduct of the defendant administrator in the administration of the estate of the deceased over the past 39 years. As I have already observed, the picture concerning that administration, or lack of administration, is a most disturbing one. 24 Whilst the precise form of relief may not be presented in the proposed amended summons with that degree of specificity or particularity which one would expect from a qualified legal practitioner, nevertheless it seems to me to be reasonably clear what it is that the plaintiff is alleging. 25 Accordingly, I propose to grant to the plaintiff the leave which he seeks, to file an amended summons in the form of the document which has been annexed to his outline of submissions dated 11 October 2007, being the document headed "summons" and bearing the handwritten endorsement "A2". 26 I record that I have had the benefit of receiving a number of written outlines of submissions from the plaintiff and a written outline of submissions from the solicitor for the defendant. Those documents will be retained in the Court file. I should also here record that it was not until after the filing of the notice of motion by which the plaintiff sought leave of the Court to amend the summons, the notice of motion being filed on 26 July 2007, that the defendant became aware (essentially only during the course of today's hearing) of the precise document which was the proposed amended summons. 27 The opposition to the filing of any amended summons which the defendant had earlier manifested was, as I understand it, based to a considerable extent upon the attempt by the plaintiff to bring the proceedings in some form of representative capacity rather than in his own interest as a beneficiary in the estate of the deceased. 28 Accordingly, I propose, as I have already indicated, to grant to the plaintiff the leave he seeks to file an amended summons in the form of the document which I have earlier identified. 29 There has also been filed a notice of motion on behalf of the defendant on 27 July 2007, by which the defendant seeks that the proceedings be struck out, and seeks certain costs orders. It was indicated by the solicitor for the defendant that, in the light of the document which the plaintiff was now seeking to file as his amended summons, and which no longer sought relief in any form of representative capacity, the defendant's notice of motion to strike out the proceedings as originally constituted had become superfluous and, as I understand it, that the defendant no longer wishes to proceed upon that notice of motion. 30 The only matter remaining is the question of costs of the various applications.

[The parties addressed on the question of costs] 31 I make the following orders: 1. I order that the plaintiff have leave to file an amended summons in the form of the document annexed to the outline of plaintiff's submissions dated 11 October 2007, endorsed as A2. 2. I make no order in respect of the costs of the notice of motion filed by the plaintiff on 26 July 2007, to the intent that each party will bear his own costs thereof. 3. I order that the defendant not be entitled to recoup its costs of the aforesaid notice of motion filed on 26 July 2007 from the estate of the late Theresa Stapleton ("the deceased"). 4. I order that the notice of motion filed by the defendant on 27 July 2007 be dismissed. 5. I order that the costs of the aforesaid notice of motion filed on 27 July 2007 be the plaintiff's costs in the proceedings. 6. I order that the defendant not be entitled to recoup its costs of the aforesaid notice of motion filed on 27 July 2007 from the estate of the deceased. 7. I stand the matter over to 1 November, 2007 before the Registrar, for directions.

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