Grey v Youngson [2006] WASC 123

Supreme Court of WA|2006-06-29|Before: Hasluck J

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : GREY -v- YOUNGSON [2006] WASC 123

Succession - Executors and administrators - Application to revoke grant of Letters of Administration in favour of sole administration - Administrators unable to agree - Allegation that defendant failed or refused to sign papers necessary for administration of estate - Nature and scope of power to revoke - Orders for revocation and appointment of plaintiff as sole administrator - Turns on own facts

Current grant of Letters of Administration dated 7 May 2004 revoked

Letters of Administration granted to Joyce Olive Grey as sole Administrator of Estate of David Youngson

Porteous v Rinehart (1998) 19 WAR 495

Tobin v Dodd [2004] WASCA 288

Bates v Messner (1967) 67 SR (NSW); (1967) 86 WN (Pt 2) (NSW) 35

Phelan & Phelan v Booth (1941) 43 WALR 60

1 The plaintiff, Joyce Olive Grey, seeks an order in these proceedings that a grant of Letters of Administration made to parties herein with respect to the estate of the late David Youngson be revoked and in lieu thereof there be a grant of Letters of Administration to the plaintiff solely.

2 The plaintiff was represented by counsel at the trial of the action. The defendant appeared in person. I satisfied myself prior to the commencement of the trial that the defendant did not have any prospects of obtaining legal representation and that there was no basis for an adjournment. I satisfied myself also that the booklet containing papers for the Judge dated 31 January 2006, which included a statement of defence, reflected the matters in issue and that the defendant was opposed to the relief sought. A degree of assistance was afforded to the defendant during the trial in formulating certain of the questions that he wished to put to the plaintiff in cross-examination and in receiving his evidence-in-chief. This was done in accordance with the reasoning set out in Tobin v Dodd [2004] WASCA 288.

3 The deceased, David Youngson, died on 30 November 2002. It appears from the death certificate that he was 70 years of age and was living at a residential property owned by him known as 77 Dorothy Street, Gosnells, in the State of Western Australia. He was single and did not have any children. He had three surviving siblings, being his two brothers, Harold Youngson and Ian Youngson (the defendant), and his sister (the plaintiff). It seems that the plaintiff and her husband, Geoff Grey, live at Mandurah. The defendant lives by himself at a residence in Collie, not far away from his son.

4 Shortly before his death, the deceased had given instructions to the Public Trustee to prepare a Will. However, he died before he could execute the Will prepared in response to his instructions. The plaintiff and her two brothers were the parties interested in the winding-up of the estate, and so, between themselves, they arranged for the plaintiff to act as spokesperson in liaising with the Public Trustee.

5 As a result of the plaintiff's approach to the Public Trustee, an attempt was made to obtain a grant of probate referable to the document prepared in response to the deceased's instructions, upon the basis that it was an informal Will. In the meantime, consistently with advice received from the Public Trustee, the plaintiff and her brother, Harold Youngson, proceeded to sell off some of the deceased's belongings, such as his vehicle, lawnmower and trailer. They took steps to ascertain the value of the deceased's residence.

6 As a consequence of these events, a statement of assets and liabilities of the estate was brought into existence in the usual way. This reflected an estimation of the deceased's assets and liabilities as at the date of death. The estimated net value of the estate was said to be $252,722.68.

7 The assets included the deceased's property at 77 Dorothy Street (estimated to be worth $120,000) and certain term deposits. The liabilities included funeral expenses and outstanding power and telephone accounts. I am able to find that the funds raised from the sale of the deceased's chattels, amounting to $2300 or thereabouts, were applied towards meeting ongoing expenses referable to the property, such as land tax, shire rates and lawn-mowing.

8 I understand that not long after the deceased's death, the plaintiff's brother, Harold, moved to the east coast, with the result that the plaintiff and her husband took on the responsibility of progressing the administration of the estate. The intention was to dispose of the property at Dorothy Street as soon as probate was granted.

9 By letter dated 12 August 2003, the plaintiff wrote to the defendant, referring to her role as "spokesperson" and mentioning that a nearby landowner known as Amaroo Village had valued the property at about $155,000 and could offer up to $160,000. She said also that she had received three appraisals from real estate agents operating in the Gosnells area and the consensus was that the property might be worth $175,000 to $182,000 on the open market.

10 The Public Trustee wrote to the plaintiff on 2 September 2003 to say that the application for a grant of probate had been refused. This meant that the Public Trustee had no formal authority to deal with the estate, and no authority to collect moneys, pay debts or distribute assets to the beneficiaries. The Public Trustee advised that an administrator would have to be appointed to attend to the administration of the estate and to distribute the assets in accordance with s 14 of the Administration Act 1903 (WA).

11 The plaintiff was of the view that it would be easier to engage a firm of solicitors closer to her home at Mandurah to take the necessary steps. Accordingly, she made an appointment to see Mr Brett Clement of Clement & Co at Mandurah on 12 September 2003. She and her husband contacted the defendant and arrangements were made for him to be picked up from Collie and brought to the meeting.

12 It was common ground at the trial that a meeting was held at Mr Clement's office on the appointed day which was attended by the plaintiff, her husband and the defendant. According to the plaintiff, Mr Clement explained what had to be done. In the course of a general discussion, a consensus emerged, consistently with the earlier arrangements, that Letters of Administration should be applied for by the plaintiff alone, to the intent that, on behalf of the estate, she would act as spokesperson and work through Clement & Co in attending to the administration of the estate. The balance remaining after the liabilities of the estate had been discharged would be distributed to the three beneficiaries in due course. The plaintiff insisted that all moneys should be received and distributed via the solicitors' trust account and this was agreed to by those present at the meeting.

13 I pause here to say that the defendant in his evidence at trial presented a different picture of this meeting. According to him, the purpose of the meeting had not been explained to him and he did not fully understand what was being said to him at the meeting. To the best of his recollection, the plaintiff's husband did most of the talking. At one stage during the meeting, the plaintiff's husband made a comment which seemed to suggest that the proceeds from the sale of the deceased's belongings had been made available to the beneficiaries. The defendant regarded this as a misrepresentation because he (the defendant) had not actually received any funds. I note in passing that the plaintiff's husband (if he did make such a statement) may have meant only that the beneficiaries were receiving the benefit of the proceeds because the money in question was being used to maintain the deceased's house, but it seems that this did not occur to the defendant.

14 The tenor of the defendant's evidence at trial was that he did not agree to anything at the meeting, and certainly did not agree with the proposition that Clement & Co was being engaged as solicitors for the estate, rather than as solicitors acting for the plaintiff personally. Under cross-examination, the defendant accepted that he did not actually voice any opposition to the notion that the plaintiff would apply for Letters of Administration in her own name and that Clement & Co would act as solicitors for the estate.

15 Clement & Co proceeded to prepare an application for Letters of Administration and forwarded consent forms for signature to the defendant and his brother, Harold. However, at about this time, the defendant formed a view, after talking to a friend, that Letters of Administration should be applied for jointly by he and the plaintiff.

16 I gather from the evidence given on both sides at trial that, when he mentioned this to his sister in the course of a telephone conversation, she dismissed the idea summarily, saying that such a proposal would be unworkable in practice because the defendant lived at Collie, he did not have a phone, and he never answered any of the letters that were sent to him.

17 Perhaps the plaintiff's tone was too peremptory. With the benefit of hindsight, it now seems, as I review the evidence as a whole, that this phone call simply reinforced the defendant's determination to play a more active role in the matter. Moreover, I am able to infer from the evidence that, in the defendant's view, the plaintiff's husband had been too dominant at the initial meeting with the solicitor, and this, too, played upon the defendant's mind. Under cross-examination, the defendant accepted that he received, but did not sign the consent form sent to him.

18 The defendant went to see Mr Formby of the law firm at Bunbury known as Formbys, and instructed him to act on behalf of the defendant. Mr Formby did not give evidence at the trial, and it is difficult to determine exactly what instructions were given to him. However, it is an undisputed fact that, by letter dated 12 January 2004, Mr Formby wrote to the plaintiff to say that he had instructions to act for the defendant.

19 Mr Formby put up a proposal to resolve certain "perceived differences". In essence, the proposal in the Formby letter was "that Mr Clement be instructed to prepare the necessary application to the Supreme Court of Western Australia for a grant of administration in the name of our client and yourself". Further, "Our client's proposal is Mr Clement handle the administration of the estate subject to the overriding control of our client and yourself." The letter referred also to some minor assets having been sold and the defendant requiring that an account of the assets and proceeds be provided to Mr Clement for inclusion in the final estate statement of assets and liabilities.

20 The clear implication of this letter was that Clement & Co was to act on behalf of the estate and proceed as proposed at the 12 September meeting, save that joint Letters of Administration were now to be obtained. According to the evidence given by the plaintiff at trial, she agreed to this proposal (albeit reluctantly), as it appeared to be broadly consistent with what had been discussed at the 12 September meeting. It seemed that some of her reservations about her brother acting as joint administrator had been put to rest because he was now represented by a solicitor.

21 On the other hand, according to the evidence given by the defendant at trial, the Formby letter did not accurately reflect his instructions. It was never the defendant's intention that Mr Clement should be regarded as acting for the estate (as opposed to being simply the plaintiff's lawyer). Moreover, on the defendant's view of the matter, there was no need for the sale of the residential property to be handled by Mr Clement.

22 The defendant agreed under cross-examination that, after receiving a copy of the Formby letter, he did not complain to either the plaintiff or to Mr Formby himself that the letter did not properly represent the defendant's instructions. He let matters run on.

23 On 7 May 2004, Letters of Administration were granted to the plaintiff and to the defendant jointly, as a result of steps taken by Clement & Co. In the meantime, the plaintiff had continued to meet the outgoings due in respect of the residential property and was proceeding on the assumption that she would be reimbursed by the estate for expenses incurred by her in respect of the property.

24 The plaintiff then discovered that the owners of Amaroo Village had been visited by the defendant and had delivered an offer to buy the property to Formbys. This reflected a proposed price of $154,500.

25 The plaintiff informed Mr Clement that this offer was not acceptable to her, as she believed the estate would receive between $185,000 and $192,000 if a sale were effected on the open market utilising a real estate agency known as Darnell Sears Realty. Mr Clement raised this matter with Mr Formby, but was told that Formbys were no longer acting for the defendant. The evidence given by the defendant at trial indicated that he had withdrawn his instructions because he was dissatisfied with the services provided by Formbys and objected to their legal costs.

26 By letter dated 29 July 2004, Mr Clement pressed the defendant to sign a transmission application form in respect of the deceased's property and some withdrawal forms concerning the bank accounts. This gave rise to an angry response from the defendant by fax dated 11 August 2004.

27 The defendant said in his fax that arrangements were being made with BankWest (by him presumably) to establish a joint bank account in the name of the administrators as a means of retaining control of the estate by the administrators. This made any further use of the Clement & Co trust account unacceptable. The defendant went on to allege that the plaintiff had failed to reveal an offer from Amaroo Village which was the only real offer the estate had received, and there was no sufficient explanation for the rejection of that offer.

28 The defendant suggested that the plaintiff was trying to obtain a commission on the sale and alleged that the plaintiff's husband had lied in saying that money belonging to the estate was shared among the beneficiaries. He said, further, that the plaintiff had taken money from the estate and failed to account for it. The only correspondence acceptable to him would be correspondence from the plaintiff in her handwriting.

29 It is apparent from the defendant's 11 August fax that he had now arrived at a position where he was minded to accuse the plaintiff of improper conduct, possibly fraud, and would not accept that Clement & Co were acting as solicitors for the estate and had a role to play in attending the sale of the property and the winding-up of the estate. I feel obliged to say in passing that he did not put up any clear evidence to substantiate his allegations at the time, or at the trial. I am of the view, and so find, that his apprehensions were based upon misunderstandings of the kind mentioned earlier concerning the proceeds of sale, and an erroneous belief that Clement & Co were acting simply as solicitors for the plaintiff.

30 By letter dated 3 September2004, Clement & Co responded to the defendant's allegations. They referred to the history of the matter and indicated that appraisals of the property had been received which justified the plaintiff's stance in regard to the sale of the property. The Clement & Co letter concluded in this way:

"Mrs Grey sees no reason why the administration of the estate should not be conducted in accordance with the suggestions first made by you through your solicitor and accordingly we would be grateful if you could sign the withdrawal forms which you have in respect to the various accounts and the Transmission Application and return them to us promptly."

31 This was followed by various other exchanges, including a faxed letter from the defendant to Mr Clement stating that he (Clement) was not, and never had been, administrator of the estate. He was only the plaintiff's lawyer and his account was the plaintiff's responsibility. The defendant failed or refused to sign the forms in question.

32 In due course, as a consequence of complaints made by the defendant to the Legal Practice Board, Clement & Co felt obliged to advise the plaintiff that they could not continue to act in the matter. For the sake of completeness, I feel obliged to mention that complaints made by the defendant to the Legal Practice Board against Clement & Co and Formbys were dismissed.

33 In essence, the defendant continued to maintain the stance reflected in his 11 August fax, namely, that the plaintiff had acted improperly and Clement & Co had no instructions to act on behalf of the estate; the estate was not obliged to meet the law firm's legal costs. It was against this background that the plaintiff felt obliged to commence the present legal proceedings.

34 In her statement of claim dated 11 March 2005, the plaintiff set out facts and matters bearing upon the dispute between the parties. The plaintiff pleaded that, as a consequence of the 12 September meeting and the following exchanges between Formbys and Clement & Co, an agreement was made whereby the plaintiff and the defendant would jointly apply for Letters of Administration on the basis that Clement & Co would act for the administrators, subject to their joint overriding control.

35 It is said that, in breach of the agreement, the defendant failed or refused to sign and return certain documents necessary for the administration of the estate, namely, the transmission application concerning the deceased's residence and withdrawal forms in relation to the estate bank account. It is said that, by his letter of 8 September 2004 and subsequent conduct, the defendant evinced an intention not to be bound by the agreement and has thereby repudiated the same.

36 The plaintiff pleaded in the alternative at par 13 that the defendant had acted and conducted himself in a manner that prejudiced the due and proper administration of the estate in that he not only failed to observe the agreement and attend to the matters mentioned earlier, but also repeatedly insisted on a final distribution of the estate funds to the beneficiaries without having regard to the need to discharge the undischarged liabilities of the estate. (This is a reference to that part of the evidence presented by the plaintiff at trial that the defendant will not accept that the estate is obliged to cover the costs of Clement & Co and the outgoings due in respect of the subject property.)

37 The plaintiff seeks an order pursuant to s 29 of the Administration Act that the grant of Letters of Administration be revoked and in lieu thereof there be a grant of Letters of Administration to the plaintiff solely. I pause here to note that, by s 29 of the Administration Act, where administration of an estate of a person has been granted, the Court may, at any time, upon the application of any person interested in the estate or of its own motion on the report of the Principal Registrar, revoke the administration.

38 I note in passing that there is evidence before me in the form of an affidavit of Harold Youngson sworn 27 March 2005 to the effect that he is aware that the plaintiff has applied orders of the kind just mentioned. By his affidavit, Mr Youngson declares his support of the plaintiff's application and consents to the relief sought.

39 In the alternative, reliance is placed upon s 45 of the Act which provides that the Court may make such order with reference to any question arising in respect of any administration, or with reference to the distribution or application of any real and personal estate which an administrator may have in hand, or as to the residue of the estate, as the circumstances of the case may require. No final order for distribution shall be made except upon notice to all the parties interested, or as the Court may direct.

40 In the further alternative, the plaintiff seeks orders of the kind proposed pursuant to such other power as this Honourable Court may have. This is clearly a reference to the inherent jurisdiction of the Court.

41 The defendant, by his statement of defence, pleaded that the agreement contended for by the plaintiff was not made as alleged and does not exist. In his statement of defence and in his evidence at trial, it is said that Formby had no instructions to make an agreement with the plaintiff of the kind contended for.

42 The defendant pleaded that the transmission application and withdrawal forms were not signed because insufficient information was provided to him and there were various irregularities in the way in which the plaintiff and her legal advisers purported to administer the estate and account to the beneficiaries.

43 By s 6 of the Administration Act, the Supreme Court has jurisdiction to grant administration of the estate of any deceased person leaving property, whether real or personal, in Western Australia. By s 25, the Court may grant administration of the estate of a person dying intestate to one or more of the persons entitled in distribution to the estate of the intestate or to any other person, whether a creditor or not, if there be no such person entitled as aforesaid resident within the jurisdiction and fit to be so entrusted, or if the person entitled as aforesaid fails, when duly cited, to appear and apply for administration.

44 The statutory power to revoke a grant contained in s 29 of the Act does not set out criteria bearing upon the circumstances of a case such as the present. This can be contrasted with s 77 of the Trustees Act 1962 (WA), whereby the Court may, whenever it is expedient to appoint new trustees and it is inexpedient, difficult or impractical to do so without the assistance of the Court, make an order for the appointment of new trustees in substitution for any existing trustees.

45 In Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572, Dixon J, at 580, indicated that the jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, to the security of the trust property, and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustees.

46 His Honour went on to say that the Court forms a judgment based upon considerations which combine to show that the welfare of the beneficiaries is opposed to the trustee's continued operation of the office. Such a judgment must be largely discretionary. A trustee is not to be removed unless circumstances exist which afford ground upon which the jurisdiction may be exercised.

47 However, it emerges from Porteous v Rinehart (1998) 19 WAR 495 that a distinction must be drawn between the duties of a trustee and the role of an executor or administrator who is concerned with getting in the assets of the deceased, paying his debts, distributing the assets and producing accounts. As matters progress, a person will commence to hold the property as trustee when his executorial duties in respect of that property have ended. Accordingly, a situation might arise in which the executor is simultaneously (albeit in respect of different assets of the estate) an executor and trustee under the Will.

48 In that case, the defendants were named as executors and trustees in a Will for which probate was granted. The plaintiff, a named beneficiary, made an application to remove them as executors and as trustees. The Hon Justice White held that the Court has an inherent jurisdiction to remove an executor and appoint a replacement by revocation of the grant of probate where it is necessary to ensure the due and proper administration of the estate.

49 His Honour said that the jurisdiction will be exercised cautiously, the dominant consideration being the welfare of the beneficiaries and the preservation of the trust estate. Where the ground for removal is alleged to be a conflict of interest and duty, the Court will only exercise its inherent jurisdiction to remove a trustee where it is satisfied the conflict has caused, or is likely to cause, mischief at a reasonably high level of seriousness.

50 Counsel for the plaintiff submitted that where there are otherwise equal competing claims for a grant of Letters of Administration, the Court has the right to select an administrator. Counsel contended that the selection ought to be based on the Court's assessment as to who is most likely to be able to ensure the due and proper administration of an estate. It followed, having regard to the principles mentioned earlier, and the circumstances of the present case, that the joint Letters of Administration should be revoked, because the intransigence of the defendant had rendered the administration of the estate unworkable. The plaintiff should be appointed the sole administrator upon the basis that such an appointment would best serve the welfare of the beneficiaries and the preservation of the estate.

51 Further, in making its determination, the Court should have regard to the parties' past conduct in the administration prior to the revocation and whether they have shown an understanding, or lack of understanding, of what is required to discharge the functions of administrator in a proper and accountable manner. The preference of the majority of the beneficiaries is also relevant to the choice where there are otherwise equal competing claims for a grant of Letters of Administration. In this case, the third beneficiary, Harold Youngson, favoured the sole appointment of the plaintiff.

52 On the evidence before me, I cannot find any fault in the way in which the plaintiff has proceeded. I found her to be a straightforward and reliable witness, who was principally concerned to have the affairs of the estate dealt with in a businesslike way. I am left with an impression that the defendant may have found his sister's decisive manner not entirely to his liking because he was reclusive by nature. Personality differences of this kind are not uncommon in families, but they must not be used to mount unsubstantiated allegations of impropriety.

53 I am satisfied, on the balance of probabilities, that the plaintiff has provided good and sufficient explanations as to how the assets and liabilities of the estate have been dealt with. I find that she acted in a reasonable manner in seeking to instruct Clement & Co to act as solicitors for the estate, and that she endeavoured to keep the defendant fully informed.

54 I consider that an agreement of the kind contended for by the plaintiff was made between the parties as alleged. The Formbys' letter is persuasive evidence that such an agreement was made and this is corroborated by the defendant's failure to object to the contents of that letter and by the plaintiff's account (which I accept) as to what happened at the meeting. It was therefore unreasonable for the defendant to repudiate the agreement as alleged, and to fail or to refuse to sign the forms sent to him by the solicitors instructed to represent the administrators.

55 The defendant admitted under cross-examination that the parties cannot work together and administration of the estate is in a state of deadlock. It is clear to me that this impasse must be resolved so that matters can move forward. I am of the view that the welfare of the beneficiaries and proper preservation and administration of the estate will best be served if the current grant is revoked and the plaintiff is appointed sole administrator. I am prepared to make an order pursuant to s 29 of the Administration Act and related provisions accordingly.

56 I will hear from the parties as to whether any further orders or directions are required.

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