Morgan v Morgan [2000] VSC 445

Supreme Court of Victoria|2000-11-02|Before: BEACH, J.

This is the return of an originating motion whereby the plaintiff Frederick Hugh Morgan seeks to have his brother Raymond Sidney Morgan removed as an executor and trustee of the will and estate of their late father Sidney Morgan deceased (the deceased).

The deceased died on 26 February 2000. He was survived by his three sons, the plaintiff, the defendant and a son called James.

The estate of the deceased consists of his home at 50 Collins Street, Thornbury which is valued at between $250,000 and $300,000, and cash totalling approximately $40,000.

On 29 May 2000 probate of the deceased's will and estate was granted to the plaintiff and the defendant.

In early 1999 the deceased was admitted to a nursing home. At about the same time his affairs were placed in the hands of the State Trustees Ltd. In August 1999 the deceased's wife died. Since November 1999 the deceased's home at Thornbury has been vacant.

Following the death of the deceased in February 2000 the plaintiff and the defendant appointed a solicitor Mr. Frank Sagaria to administer the estate of the deceased.

In April 2000 Mr. Sagaria advised the plaintiff and the defendant to have the house and its contents valued so that they could be sold.

The defendant agreed to the contents of the house being valued but as he contended that some of the contents of the house, in particular some family photographs, a pair of hand carved walking sticks, a vacuum cleaner and a band-saw, were missing from the house, refused to consent to the house and contents being sold.

The dispute between the plaintiff and the defendant over the sale of the house reached the stage whereby in early July 2000 it was necessary for them to seek separate legal representaton in the matter.

On 24 July 2000 the plaintiff's new solicitors wrote to the defendant proposing that the Thornbury property be sold by public auction as soon as possible and that the net proceeds be distributed in accordance with the deceased's will.

The plaintiff's solicitors did not receive a reply to their letter and on 8 August 2000 they wrote to the defendant's new solicitor informing him that unless within 7 days of that date they received written confirmation from him that arrangements had been made for the sale of the property they would make an application to the Court for the removal of the defendant as an executor.

The plaintiff's solicitors did not receive a reply to their letter of 8 August.

On 21 August they wrote a further letter to the defendant's solicitor informing him that they had been instructed to issue proceeding in this Court.

On 5 October the present originating motion was filed in the Court by the plaintiff's solicitors.

In his answering affidavit of 20 October 2000 the defendant has sworn that he did not authorise the sale of the house because he believed that if he did so, the administration of the estate would be finalised "with those items of personal property remaining unrecovered". He has further sworn that having seen counsel he now sees that the question of the sale of the house should be separate from the question of recovery of the personal property and has undertaken to join in all steps necessary for a sale of the house by public auction as soon as practicable.

It is clear that the defendant's change of heart in the matter has been brought about by the institution of this proceeding.

Having regard to the defendant's past behaviour to the date upon which he consulted counsel one could be forgiven for concluding that had this proceeding not been instituted, and had he not consulted counsel, he would have remained intransigent.

Section 34(1)(c) of the Administration and Probate Act 1958 provides that "where the executor or administrator to whom probate or administration has been granted ... refuses or is unfit to act in such office ... the court ... may order the discharge or removal of such an executor or administrator."

In Hoxha v. Hoxha[1] Jenkinson, J. held that the word "unfit" where used in s.34(1)(c) may be satisfied by demonstrated incapacity to perform the duties of the executorial office within a reasonable time and it may be satisfied by demonstrated unwillingness to perform those duties within a reasonable time.

In Monty Financial Services Ltd. and &Anor. v. Delmo[2] Ashley, J. agreed with the views of Jenkinson, J. At p.73 his Honour said:

"... That done, the few cases which have directly raised the interpretation of s.34(1)(c) all involved misconduct or neglect of duty by the executor in the period between grant of probate and application for removal. The misconduct or neglect was constituted by matters such as unwarranted delay in administration of the estate, failure to communicate with beneficiaries, failure to account, and unreasonable delay in paying beneficiaries their entitlement. Turner apart, the authorities are consistent in holding that unfitness is demonstrated by the presence of such a factor. I find it impossible to accept that serious dereliction of duty as an executor does not make that person unfit to hold the office. It cannot matter whether the dereliction is born of intent, of carelessness, or of incompetence In each case the actual or potential deleterious effect upon the estate and the beneficiaries is the same. In consequence, in my respectful opinion, the restrictive construction advanced in Turner must be rejected; although (subject to any statutory provisions to contrary effect) the matters falling within that narrow construction would also constitute unfitness."

22 Turner is a reference to In re Turner[3]. In Turner it was held that the word was to be treated as:

"referring to unfitness occasioned by some such disqualification such as an adjudication of bankruptcy or a conviction for felony, but not to unfitness indicated by a breach or neglect of duty."

Both Jenkinson, J. and Ashley, J. considered that statement of principle to be too narrow. I agree with their views in that regard.

In my opinion simply because assets of the deceased of the nature of the assets in question had been removed from the house by the plaintiff or some other member of the deceased's family, was no justification for refusing to agree to a sale of the house.

At most, the value of the assets could not have exceeded $500. Surely a commonsense round-table discussion by the parties could have resolved the matter.

The house on the other hand is vacant and for a significant period of time after the death of the deceased was uninsured.

It was uninsured because those insurance companies which had been approached by the parties' solicitors with a view to taking out appropriate cover had declined to do so simply because the house was vacant.

The risks of vandalism to a vacant property are notorious.

In my opinion the defendant's failure to agree to a sale of the house until after this proceeding had been instituted and until after he had consulted counsel, demonstrated a clear incapacity on the part of the defendant to perform his executorial duties within a reasonable period of time.

What then of his undertaking to now agree to a sale of the house?

In view of the defendant's behaviour in the past I would not be confident that any auction approved by him would proceed smoothly. I consider that there is a not unreal risk that if the defendant remains as an executor, disputes will arise as to the identity of the agent to auction the house, the reserve price to be put on the house and so on.

In the circumstances, including the fact that the house is the one substantial asset in the estate, it is my opinion that it is now appropriate to remove the defendant as an executor of his father's estate.

1. Raymond Sidney Morgan, executor of the Will of Sidney Morgan, deceased, be removed from the office of executor.

2. From this date all property in the estate of Sidney Morgan, deceased, vest in Frederick Hugh Morgan as executor of the Will of Sidney Morgan, deceased.

3. The defendant pay the plaintiff's costs of this application including reserved costs.

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