PROCEDURE - application for summary judgment in part - resistance to claim for possession doomed to failure - transfer of remainder of proceedings to Equity Division
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Catchwords
PROCEDURE - application for summary judgment in part - resistance to claim for possession doomed to failure - transfer of remainder of proceedings to Equity Division
Judgment (2 paragraphs)
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Judgment
Introduction
Although the notice of motion filed on 11 October 2016 on behalf of Mr John McCooe (the plaintiff) seeks a number of orders, his counsel explained at the hearing of the motion before me that it can be understood as being based on the following proposition: the resistance by Mr Lakshmi Pande and Mrs Ashwani Pande (the defendants) to the claim made by the plaintiff for possession of residential premises at Chatswood is doomed to failure. If I were to accept that proposition, it was submitted, I would order summary judgment for possession only against the defendants, despite the fact that on 22 August 2016 they filed a defence to the claim, and on 8 February 2017 (at the hearing before me) leave was granted to their counsel to file an amended cross-claim in court.
Each counsel agreed that I would only take the serious step of ordering summary judgement if I were affirmatively satisfied that resistance to the claim for possession is doomed to failure, in accordance with the test set out in General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125; [1964] HCA 69, subsequently applied in countless cases.
Background
In order to explain the circumstances of the dispute that I am called upon to resolve, I shall set out a thumbnail sketch of the facts, analysing them (in accordance with the concession of counsel for the plaintiff) in the light most favourable to the defendants. In order to aid the comprehension of the reader, and to differentiate between a large number of persons who share family names, I shall adopt a short hand with regard to some of them; of course, I mean not the slightest disrespect in doing so.
Laurie Kathleen Molloy (Mrs Molloy) was the owner of the premises in question at XXX, Chatswood, New South Wales 2067, being Lot X in Deposited Plan X (the Chatswood premises). A well-loved person, she died in the year 2013 at the age of 74. She left a will, pursuant to which her son Michael Lawrence Molloy (the deceased) was the sole beneficiary. In due course he inherited the Chatswood premises.
Mrs Molloy had at least two siblings who remain alive, the first of whom is her brother, William Garth Molloy (William Molloy, also known by the nickname "Ginger"), who is himself married to Dorothy Claire Molloy (Claire Molloy, also known by the nickname "Auntie Claire"). Mrs Molloy was also survived by her sister Karen Jocelyn Hutchins (Karen Hutchins), who is married to James Hutchins (known as "Jim"); they have a daughter Lynne, who is married to her husband Kris.
The defendants were neighbours of Mrs Molloy. They became close to her, and to the extended family generally. During the time that Mrs Molloy's health was declining, the deceased moved from Tasmania to live with her in the Chatswood premises.
The deceased died sometime between July and August 2014. He had not made a will, and accordingly his estate (including the Chatswood premises) is to be distributed in accordance with the Succession Act 2006 (NSW) and the Probate and Administration Act 1898 (NSW).
After his death, the defendants hosted a dinner at their then-residence of XXX, Chatswood to honour his life and to mark his passing. On that occasion, there were conversations between the defendants and Claire Molloy, Karen Hutchins, and Jim Hutchins to the effect that the house would be sold to the defendants (in truth, how one should characterise legally the communications between members of the Molloy family and the defendants is firmly in dispute between the parties).
Thereafter, there were a large number of emails passing between Claire Molloy and the defendants confirming that the house was to be sold to the defendants at a particular price. At that time, Claire Molloy confidently expected that she would be appointed the administrator of the estate of the deceased.
As well as that, it was believed that the only possible beneficiaries of the estate of the deceased would be his uncle William Molloy and his aunt Karen Hutchins, he having died without spouse, partner, or children. In fact, there was for a time a serious question whether the only people entitled to benefit from the estate of the deceased were his uncle and his aunt.
Furthermore, the assumption that Claire Molloy would become the administrator was incorrect: her application was refused by the Registrar in Probate of the Supreme Court of New South Wales on 27 April 2015.
Instead, on 1 February 2016, the plaintiff (a solicitor associated with the Molloy family) was appointed administrator of the estate of the deceased. He was entitled to apply for the appointment by way of the combined operation of ss 63 and 72 of the Probate and Administration Act, because he had been given a power of attorney to do so by William Molloy and Karen Hutchins.
It was not disputed before me, that, pursuant to s 44 of the Probate and Administration Act, between the date of the death of the deceased and the date of appointment of the plaintiff as administrator, the estate was formally vested in the New South Wales Public Trustee. Nor was it disputed that, upon his appointment as administrator, the plaintiff became the registered proprietor of the premises, at least for the purposes of this dispute.
On about 8 December 2014, the defendants, along with their young son Laksh, had moved into the Chatswood premises with the knowledge and consent of the Molloy family generally. Not only did the defendants bring the premises out of a state of serious disrepair, they also expended a great deal of time and money renovating the premises in significant ways. All of that was done on their understanding that they had entered into a contract whereby it was agreed that, once all formalities had been attended to, the home would be sold to them.
Submissions of the plaintiff
By the end of his submissions before me, counsel for the plaintiff had helpfully refined his position, as follows. He submitted that resistance to the claim for possession of his client is doomed to failure for two reasons.
First, even taking the evidence of the defendants at its absolute highest as to what was said, written, and done by themselves and members of the extended Molloy family, the proposition that a contract for sale of the premises had been entered into is doomed to failure. Taking the case for the defendants at its highest, he submitted, and analysing the objectively determined intentions of the purportedly contracting parties, the evidence cannot be said to show the formation of a contract; rather, it shows nothing more than pre-contract negotiations and aspirations.
Secondly, and perhaps more fundamentally, counsel submitted that, in truth, at no time was Claire Molloy, her husband William Molloy, Karen Hutchins, or her husband Jim Hutchins authorised or empowered to deal with the premises in any way whatsoever. That is because, up until the time of his death, the deceased (being the sole registered proprietor) was the only person who was entitled to sell the premises. After his death, the Public Trustee was the person who could conceivably have done so. And after his appointment, the plaintiff could do so as part of his duties in realising the estate on behalf of its beneficiaries; indeed, he is seeking to obtain vacant possession of the premises so that he can do exactly that.
But, counsel submitted, Claire Molloy was never entitled to sell the premises; she was nothing more than a person who thought (wrongly as it turns out) that she would one day be entitled to do so. Nor were William Molloy or Karen Hutchins so entitled; they were nothing more than potential beneficiaries of an intestate estate.
In short, it was conceded without admission that whatever may have been said or done by those persons may conceivably give rise to some sort of personal claim against them by the defendants. But their words and actions cannot mean that the defendants can resist a straightforward claim for possession brought against them by the registered proprietor, the plaintiff.
In answer to the basal submission of counsel for the defendants that the words and actions of members of the extended Molloy family prior to the appointment of the plaintiff could be attributed to him, and through him to the estate, whether by way of the formation of a contract or by way of estoppel, counsel for the plaintiff respectfully submitted that that was a misconception of the role of the plaintiff in administering the estate.
In particular, it was said that the fact that the administrator was appointed by William Molloy and Karen Hutchins as their attorney is irrelevant to the question for determination by me. That is because the fact that the plaintiff has been appointed in that way does nothing to relieve him of his responsibility, pursuant to statute, judicial authority, and to this Court, to administer the estate faithfully. Counsel referred to the decisions of Chambers v Bicknell (1843) 2 Hare 536; Perpetual Trustee Co Ltd v Satchwell (1939) 39 SR (NSW) 335; and Rosemblum v Gridiger (Supreme Court (NSW), Holland J, 24 June 1980, unrep).
In short, he respectfully submitted that the proposition that the defendants can rely upon a purported contract made with members of the Molloy family, or words or conduct of them said to constitute an estoppel, as against the plaintiff, because he is said to be the agent of William Molloy and Karen Hutchins, fundamentally misconceives his role.
Separately, counsel for the plaintiff accepted that, if summary judgment for possession were granted, a writ for possession should be issued only four weeks after the date of this judgment, in order to permit the defendants to make alternative arrangements with regard to their accomodation.
Furthermore, although he did not accept that the defendants have any valid claim against the estate, as against that possibility, his client would undertake to hold on trust (after the sale of the premises) a sum sufficient to compensate the defendants fully for any such claim.
Finally, as can be seen from the notice of motion, he proposed a number of mechanistic orders designed to speed the resolution of all outstanding disputes between the parties involved.
Submissions of the defendants
The submissions of counsel for the defendants in resistance to the motion may be summarised as follows.
First, taking them at their highest both factually and legally, I could not confidently say that the oral and written communications between the defendants and members of the extended Molloy family did not constitute a binding contract. As a result, I could not be affirmatively satisfied that the defence to the claim for possession, and the related claim for specific performance of the contract, are doomed to failure. The result is, it was submitted, that I could not order summary judgment on the basis that all that passed between the relevant persons were nothing more than pre-contractual negotiations.
Relying upon Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72 at [9], he submitted that, taken at its highest, what occurred here falls within the second category of cases discussed in that judgment; that is, a case "in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document". It was also emphasised that one may validly contract to do something in the future, not merely immediately.
As for the separate submission of counsel for the plaintiff that things said or done by extended members of the Molloy family are neither here nor there in support of resistance to a claim of possession made by the registered proprietor, counsel explained the following.
It is indeed his case that the fact that the registered proprietor was appointed administrator of the intestate estate by way of a power of attorney granted to him by two expected beneficiaries of that estate, who engaged in the discussions to which I have referred, does give the defendants a valid claim against the administrator and, through him, the estate. In discussion between the Bench and Bar table, counsel for the defendants agreed with the following encapsulation of his thesis: "[B]ecause [the plaintiff] was appointed, seemingly, pursuant to s 72 [of the Probate and Administration Act] and as the attorney for those two persons, things that your case is they had said are sheeted home to him and sheeted home to the estate." That is so, he submitted, as a result of the fact that the administrator, having been appointed by way of a power of attorney by those two persons, is (for present purposes at least) their agent, and must therefore accept legal responsibility for their own acts. That includes not only entry into any contract, but also any conduct giving rise to an estoppel.
Finally, although counsel accepted that I must determine the motion on the evidence that was placed before me by the parties, he referred to the decision of Wickstead v Browne (1993) 179 CLR 688. He relied upon that decision for the proposition that one should be cautious in entering summary judgment when it is possible that a party will tender evidence at the trial that changes the predicted position. Here, he submitted, there may be further evidence available, not only to show more clearly that Claire Molloy purported to speak on behalf of other members of the extended family, but also to show the relationship between the administrator and the purported beneficiaries.
Determination
Turning to my determination, one may seriously doubt the proposition that a binding contract was entered into here. Even accepting the truthfulness and accuracy of the entirety of the contents of the affidavit of the defendants for the sake of the exercise, I consider that what is recounted as having been said and done very much has a flavour of negotiations, hopes, and aspirations about what may occur in the future. Having said that, and bearing in mind the very high test for summary judgment, I do not consider that I can be affirmatively satisfied that the proposition of the defendants that a contract for the sale of the premises did indeed come into existence is doomed to failure.
My refusal to enter summary judgment on that basis, however, is not the end of the matter.
I do not accept the submission of the defendants that the administrator of the estate is somehow to be bound by things said or done by members of the extended Molloy family, whether by way of contract or estoppel. I say that because I do not accept that, simply because he was appointed administrator by way of a power of attorney pursuant to s 72 of the Probate and Administration Act, by persons who could have been appointed administrator pursuant to s 63 of the same Act, means that he is their agent, with the result that things said and done about the premises by them when they were not authorised to do so can bind the administrator subsequently appointed, or bind the estate that he is administering to its disadvantage.
There is authority directly to the contrary: Rosemblum v Gridiger, and Perpetual Trustee Co Ltd v Satchwell. In the former case at p 13, it was said that the effect of a power of attorney granted pursuant to s 72 of the Probate and Administration Act "is not that under this form of grant the attorney is bound to act in the administration for or to prefer the principal's benefit, as if an agent of the principal, or is bound to act on the principal's instructions." In the latter case it was said at p 338 that "[t]he administrator is an officer of the Court and not the holder of a mere authority, even if the grant had been to him as attorney".
Learned authors have also firmly expressed the contrary view: RS Geddes, CJ Rowland, and P Studdert, Wills Probate and Administration Law in New South Wales, (1st ed 1996, LBC Information Services), and LG Handler and R Neal, Mason and Handler Succession Law and Practice New South Wales (LexisNexis Butterworths). In the former work at para 72.15, it is said that "[t]he attorney administrator is responsible to the court, not the principal. He or she is an officer of the court and not a mere agent." In the latter work, the statement of principle that I have provided from Rosemblum v Gridiger is referred to without demur or controversy: at [1369.3].
Speaking more generally, in my opinion, an administrator (or executor) surely has a fiduciary duty to exercise his or her duties in the interests of the beneficiaries; statutory duties to similar effect; and furthermore a duty to this Court, he or she having been appointed to the role by it. I do not accept that a person in such a position is to act in the interests of a separate, purported principal.
In short, I do not accept the fundamental characterisation by counsel for the defendants of the administrator as being an agent of William Molloy and Karen Hutchins, simply because he was appointed pursuant to their power of attorney.
That proposition of agency is the foundation of the submission of the defendants upon which all else was built. Once it is accepted that acts and words of extended members of the Molloy family are not to be sheeted home to the estate or its administrator, the resistance to the registered proprietor having vacant possession of the premises so that he can sell them, realise the estate, and distribute it according to law, falls away. So does the proposition that there is a possibility that the administrator could be ordered to specifically perform the purported contract for sale of the premises.
Finally, I consider that the principle in Wickstead v Browne does not assist the defendants here. In that case (at pp 11-12) it was explained that caution must be exercised in ordering summary judgment against a plaintiff in favour of a defendant, when there is another defendant whose evidence, may, in due course, be of assistance in proving the case of the plaintiff. So much may be respectfully accepted; but here the interests of the two defendants are ad idem. Furthermore, all parties had ample opportunity to collate and tender before me all of the evidence upon which they relied, for and against the application for summary judgment.
In short, I am affirmatively satisfied that, taken at its highest both factually and legally, the resistance by the defendants to the claim of possession by the administrator of the estate of the deceased is doomed to failure. For that reason, I am persuaded that summary judgment for possession should be entered against the defendants, and that those portions of their cross-claim that are ancillary to that resistance should be struck out.
Ancillary matters
Counsel for the plaintiff, as I have said, expressed his contentment with the writ for possession lying in the Registry for a period of four weeks from the date of this judgment. As against the contingency of the writ for possession being issued, counsel for the defendants sought a longer period. But the fact is that the evidence shows that the plaintiff has been seeking vacant possession of the premises for well over a year. Furthermore, one knows that, even once the writ issues from the Registry, there will be a logistical delay of quite some weeks before possession is enforced by the sheriff. Finally, a period of four weeks passed between the hearing of the matter and the delivery of this judgment. Whilst I accept that finding a new home will not be easy for the defendants, I consider that a pause of four weeks is sufficient.
Separately, I consider that, for abundant caution, the plaintiff should indeed retain $500,000.00 in his trust account after the real property is sold so that, as against the possibility the defendants have some monetary claim against the estate, one can be confident that it will be met.
Thirdly, the orders contained in the motion designed to speed the resolution of the remainder of the dispute were not the subject of contention by counsel for the defendants, and I consider that they are soundly based.
Costs
Neither party submitted that costs of the motion should not follow the event.
Separately, counsel for the plaintiff submitted that the plaintiff should have his costs thrown away by the necessity of preparing a new defence to the amended cross-claim filed at the hearing. But, to my mind, events have well overtaken that; in any event, much of the dispute in the amended cross-claim (in particular, with respect to the claim of estoppel against the plaintiff) has been resolved by me. In the circumstances, I shall make no separate order as to costs in favour of the plaintiff with regard to the filing of the amended cross-claim by the defendants.
Orders
For the foregoing reasons, and noting the undertaking given by the plaintiff, a solicitor of this Court, through his counsel at the hearing on 8 February 2017, that, once the premises at XXX, Chatswood, New South Wales have been sold, the plaintiff will retain in his trust account, until further order of this Court, the sum of $500,000.00, I make the following orders:
1. Summary judgment for the plaintiff against the defendants for possession of the premises at XXX, Chatswood in the State of New South Wales.
2. The plaintiff is granted leave to issue a writ of possession in respect of the premises at XXX, Chatswood in the State of New South Wales, such writ not to issue before Thursday 6 April 2017.
3. Order 1 of the cross-claim of the defendants of 8 February 2017 is struck out.
4. The defendants must pay the costs of the plaintiff of the hearing before me.
5. The remainder of the Proceedings No 2016/214453 (including the orders sought in the statement of claim of the plaintiff of 15 July 2016 and the cross-claim of the defendants of 8 February 2017), not disposed of by my orders 1,2, 3 and 4, are transferred to the Property List in the Equity Division of the Supreme Court of New South Wales.
6. The matter is listed for directions before the Equity Registrar at 9.30AM on 23 March 2017.
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Decision last updated: 09 March 2017
Parties
Applicant/Plaintiff:
McCooe as Administrator of the Estate of Michael Lawrence Molloy