Poulos v Pellicer In the Estate of Culina

Supreme Court of NSW|2004-05-31|Before: Windeyer J, Waddell J, Powell J

CITATION : Poulos v Pellicer In the Estate of Culina [2004] NSWSC 504 HEARING DATE(S) : 31 May 2004 JUDGMENT DATE : 11 June 2004

CATCHWORDS : SUCCESSION - probate and letters of administration - application for letters of administration cta - general caveat filed by defendant against a grant in the estate - caveator white of son of deceased involved in Family Law proceedings against son - son not entitled to benefit under last will of motion but sole beneficiary under earlier will - son did not intend to challenge later will or claim provision under Family Provision Act - evidence, casting doubt on validity of last will sufficient for contested proceedings if caveator had an interest - order for contested proceedings raising the question of interest - interest issue tried as separate question - if son took whole estate of his mother very big fund available out of which Family Court could, if appropriate, order provision for wife - whether caveator wife had interest entitling her to contest proceedings - STATUTES - interpretation - Wills Probate and Administration Act 1898 s144 - proper meaning of "any person" Family Provision Act 1982 Family Law Act 1975 s106B LEGISLATION CITED : Wills Probate and Administration Act 1898 s144 Williams and Mortimer: Executors Administrators and Probate 3rd Edition at page 339 Mortimer on Probate 2nd Edition at page 533 Arbuz v Sanderson (unreported Waddell J 24 March 1986) Bascombe v Harrison (1849) 2 Rob Ecc 118; 163 ER 1262; Dixon and Dickenson v. Allinson and Wife [1864] 3 Sw & Tr 572 Gertsch v Roberts (1993) 35 NSWLR 631. Hendy v Jenkins (1900) Vol XXI NSWR (Bankruptcy and Probate cases) 43 Hogarth v Johnson (1987) 2 Qd R 383) Hughes v Public Trustee (unreported NSWCA 19 August 1980; In Re Devoy: Fitzgerald v Fitzgerald [1943] Qd R 137 In re Seymour [1934] VLR 136 In the Goods of Crause [1858] 1 Sw & Tr 146; 164 ER 668 CASES CITED : Kipping v Ash [1845] 1 Rob Ecc 270; 163 ER 1035 Lindsay v Lindsay (1872) 42 LJ P & M 32 Lindsay v Lindsay (1872) 42 LR P & M 32 Menzies v Pulbrook [1841] 2 Curt 845; 163 ER 605 Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 Partington v Attorney General [1869] LR 4 HL 100 Re Devon; Fitzgerald v Fitzgerald [1943] SR Qd 137; Re the Estate of Aaldert Van Den Berg deceased [1999] ACTSC 82 The will and codicils of Simeon [1910] VLR 335 Whiteley v Clune: the estate of Brett Whiteley (unreported Powell J 19 March 1993) Will of Adcock (1905) 10 ALR 268 PARTIES : Archibold George Poulos (Plaintiff) Delores Pellicer (Defendant) FILE NUMBER(S) : SC 110253 of 2002 COUNSEL : Mr C M Simpson (Plaintiff) Mr M D Broun QC (Defendant) SOLICITORS : Cameron Gillingham & Boyd (Plaintiff) John R Quinn & Co (Defendant)

14 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROBATE LIST

110253/02 ARCHIBOLD GEORGE POULOS V DELORES PELLICER IN THE ESTATE OF THE LATE ANTONIJA CULINA JUDGMENT Outline 1 The question for decision is whether a wife of a man, whose mother has died leaving a will giving all of her very large estate to a niece, which will has the effect of revoking a former will giving everything to her son, has an interest so as to entitle her to defend proceedings for a grant of letters of administration with the will annexed of the later will, the wife being engaged in property adjustment proceedings against the husband in the Family Court of Australia. Facts 2 Mrs Culina (the deceased) died on 22 December 2000. She executed a document, which for convenience I will call "the last will", on 28 November 2000. That will appoints her son, John Culina, sole executor. It names her niece, Durda Burjan, who resides in Croatia, as sole beneficiary. John Culina has not applied for probate. Mrs Burjan has appointed the plaintiff, Mr Poulos, as her attorney to apply for letters of administration with the last will annexed of the estate of Mrs Culina. 3 The defendant, Delores Pellicer, is the estranged wife of John Culina. She is involved in proceedings for property adjustment against her husband in the Family Court. She was so engaged at the date of death of Mrs Culina and the proceedings were commenced a few days after the date of execution of the last will. 4 Under a prior will dated 4 March 1989 Mrs Culina had appointed a solicitor as sole executor and her son as sole beneficiary. It is agreed for the purpose of these proceedings that if John Culina inherited the whole estate of his mother then there would be a substantial sum of money out of which the Family Court of Australia would be able, if appropriate, to make orders for the benefit of the defendant wife. Procedure 5 The defendant filed a general caveat against a grant in the estate of Mrs Culina. She set out details of her claimed interest based on the Family Court proceedings in which, inter alia, she sought orders setting aside the last will of Mrs Culina and other orders relating to property of the deceased. The first order was sought under s106B of the Family Law Act 1975. The Family Court proceedings remain on foot. Mr Culina applied to have various parts of the property application dismissed. O'Ryan J by orders of 17 October 2003 dismissed those parts of the defendant's application as (a) sought to challenge the last will, (b) sought to set aside the will pursuant to s106B, (c) sought an order under the Family Provision Act 1982 and (d) sought an order requiring the husband to commence proceedings in the Supreme Court of New South Wales under the Family Provision Act for provision out of the estate of his mother. The balance of the property claim remains on foot. An application for leave to appeal and an appeal from the orders of O'Ryan J has been adjourned pending the outcome of these present proceedings in this Court. 6 There has been considerable delay with the proceedings in this Court. The plaintiff, Mr Poulos, the applicant attorney for the grant, commenced proceedings by summons filed on 5 July 2002 for an order that the caveat cease to be in force. Hearing of the summons was stood over from time to time pending the outcome of proceedings before O'Ryan J, the hearing of which took place on 24 October and 10 December 2002 but in which judgment was not given until 17 October 2003. 7 On 15 December 2003 I fixed the summons for hearing on 1 March 2004. On that date I suggested that rather than try the matter on the summons it would be preferable to have the matter pleaded with the statement of claim including a challenge to the interest of the caveator, who would be the defendant. I made this suggestion because the question of interest raised was of considerable importance and because there could be some question as to whether any order made on the summons would be final or interlocutory. It was accepted and remains accepted that the caveator had provided evidence sufficient to question the validity of the last will and to make it appropriate that an action proceed on a defended basis if she had the necessary interest. I indicated that upon issue being joined I would make an order for separate trial of the interest question. The necessary pleadings by way of statement of claim and defence having been filed putting in issue the standing or interest of the defendant, on 10 May 2004 I ordered a trial of the interest question as a separate and preliminary issue. 8 The statement of claim is in the usual form although as usual - and wrongly as I keep explaining - it alleges that the deceased knew and approved of the contents of the last will. The defendant in her defence denies that the signature on the last will is that of the deceased, denies testamentary capacity, incorrectly raises a defence based upon a contract to make mutual wills not appropriate for a probate action, and claims that the execution of the last will was obtained through the undue influence of John Culina. As I have said, it is not disputed that if the defendant has an interest sufficient to entitle her to be joined as a party to the proceedings, then there is sufficient evidence to justify the action proceeding to trial. The defence in paragraph 3, in response to the claim of lack of interest, gives detailed particulars, some of which are admitted for the purpose of the separate issue, some of which are relevant, some of which might be relevant to a defence of want of knowledge and approval if pleaded, and one of which, (s), is neither a pleading nor particulars. However, the agreement set out in paragraph 4 of this judgment really overtakes all of this. If the plaintiff's claim for property settlement, which will obviously be influenced by the extent of her husband's estate, is sufficient to amount to the necessary interest, then the action should proceed. If not, the defence must be struck out at this stage. The question of interest 9 There is no doubt the defendant is likely to benefit if the will is not admitted to probate. It is not suggested that the earlier will is not a valid testamentary instrument. Presumably if the last will is not admitted to probate then the executor of the earlier document will take steps to prove it. Unless he takes his mother's estate Mr John Culina has little in the way of assets. If he does receive his mother's estate he may have some seven million dollars in assets. 10 The general law is reasonably clear. First s144 of the Wills Probate and Administration Act 1898 does not mean what it says. Probate litigation is interest litigation. It is not to be undertaken or interfered in by outside busybodies. This has been established here and in England for many years. See for example Bascombe v Harrison (1849) 2 Rob Ecc 118; 163 ER 1262; Re Devon; Fitzgerald v Fitzgerald [1943] SR Qd 137; Hughes v Public Trustee (unreported NSWCA 19 August 1980); Gertsch v Roberts (1993) 35 NSWLR 631. 11 Second, any interest or reasonable possibility of an interest, however remote, will be sufficient to entitle a person to become a party: Kipping v Ash [1845] 1 Rob Ecc 270; 163 ER 1035 and Bascombe. 12 Third, although in earlier times it might have been held that next of kin entitled on intestacy had sufficient interest to challenge a will even if, in the event of a challenge succeeding, there was an earlier will not yet subject to dispute not benefitting the next of kin: Hendy v Jenkins (1900) Vol XXI NSWR (Bankruptcy and Probate cases) 43, that is no longer the position unless there is some evidence casting doubt upon the earlier will or wills as the grant or lack of grant will not be either beneficial or detrimental to the next of kin. 13 Fourth, at least in this State, irrespective of the position in Queensland (see Hogarth v Johnson (1987) 2 Qd R 383) a possible claim under the Family Provision Act is not sufficient interest to challenge a will: Arbuz v Sanderson (unreported Waddell J 24 March 1986) the interest being dependent upon order, not validity of the will. This does not matter in this case, irrespective of the somewhat conflicting decisions on Family Provision Act type claims, because as appears from the judgment of O'Ryan J Mr John Culina has no intention of making a claim under that Act, surprising as it may be as the whole of his mother's estate has been left to a cousin of his in Croatia. 14 Fifth, a creditor has no sufficient interest to challenge a will because the claim will be against the estate, whether any particular will is admitted to probate or whether there is an intestacy: Menzies v Pulbrook [1841] 2 Curt 845; 163 ER 605. 15 The sufficiency of interest is usually stated to depend upon whether the person seeking to challenge the document propounded will take a different, meaning greater or even lesser, benefit in the estate if that document is not admitted to probate: Will of Adcock (1905) 10 ALR 268. 16 The question however is whether interest is interest in the outcome or interest in the estate or perhaps whether the interest required must be direct or can be derivative. An appointee under a power of appointment exercised under one will has, it seems, the necessary interest to defend the proceedings for a grant of probate of a later will under which the power is exercised against that appointee. In Re Devoy: Fitzgerald v Fitzgerald [1943] Qd R 137 the following passage appears at page 147 of the judgment of Philp J: If the argument for Miss FitzGerald be correct, then presumably the only persons who can intervene are those "interested in the estate of the deceased," which must mean the estate of the testator whose will is in issue. This would involve that persons interested in the action but not in the estate cannot intervene. Now, the validity of a will exercising a power of appointment over property not part of the testator's estate must, like any other will, be determined in a probate action - Tatnall v. Hankey ([1838] 2 Moo. P.C. 342, at p. 350: 12 E.R. 1036, at p. 1039) - and no one would doubt that a person interested in the validity of the will only in so far as it purported to be an exercise of such a power could intervene prior to 1895 just as he could contest the will as an original party. See Hogarth-Swann v. Weed ([1931] 274 Mass. 314). I cannot believe that a construction of 0. XII., r. 17, which would deprive such a person of his right to intervene is correct.

While this statement was obiter the conclusion is compelling. A will or a codicil may do nothing other than exercise the power of appointment. The appointee has a direct interest in supporting the document or resisting the grant of a later document contrary to the interests of the said appointee. Nevertheless, the person taking under the power of appointment exercised by a will has no interest in the estate of the deceased person exercising the power. To that extent the statement in Williams and Mortimer: Executors Administrators and Probate 3rd Edition at page 339: Where a party can show that the court has jurisdiction to make a decree in a probate action which may affect his interest or interests in the estate of a deceased however slightly, such person has a right to be a party to the action.

and the somewhat shorter statement in Mortimer on Probate 2nd Edition at page 533: The interest must be an interest in the estate of the deceased so as can be affected by victory in the suit.

may be too limiting. 17 In Gertsch v Roberts at page 630 Powell J held that a person whose interest was clearly derivative had no sufficient interest to become a party. In that case a forged will had been admitted to probate and it was necessary to make an application for revocation of the grant. The estate after revocation would go on intestacy, in this case to the mother of the deceased who had survived him but died before application for revocation was made. It was held that those persons who would take through the mother's estate could not be made parties to the proceedings for revocation and that it would be necessary for them to obtain a grant of letters of administration in the mother's estate and then bring revocation proceedings. There were other complications but so far as it is relevant here it was held, following In the Goods of Crause [1858] 1 Sw & Tr 146; 164 ER 668 that an ultimate interest by expected devolution through an intermediate estate was insufficient without grant of administration in the intermediate estate. See also Partington v Attorney General [1869] LR 4 HL 100. 18 In part of the litigation in the Whiteley estate, namely Whiteley v Clune: the estate of Brett Whiteley (unreported Powell J 19 March 1993) His Honour was dealing with an application of Mrs Whiteley, the former wife of the deceased, to be added as a party for the purpose of seeking an order that she be appointed with Mr Clune an administrator ad litem of her former husband's estate. Her claim was based on entitlement to part of the estate of her former husband pursuant to an order of the Family Court made some three years earlier when both she and the deceased were alive, under which she was given the right to choose certain paintings. Her interest in those circumstances was not an interest in the estate which would be affected by the outcome of the contested proceedings but rather an interest pursuant to a court order placing her, as His Honour found, in much the same position as a creditor. Whether any, and if so, what instrument should be admitted to probate would not bear upon her claim against the estate which existed irrespective of the terms of any will or any entitlement on intestacy. 19 It might seem to follow from these decisions the defendant caveator in the present case has no interest entitling her to contest the will of the deceased. Her interest in the estate, if it could be said to be that, is even one step further away from the interest of Mrs Whiteley. Mrs Whiteley had an entitlement to part of the assets of the estate pursuant to a court order. The defendant has the possibility of obtaining an order that part of any moneys which Mr John Culina may receive from the estate of his mother should go to her. It is not a direct or even an indirect interest in the estate. But it is necessary to consider cases which might require a different conclusion. 20 The case upon which counsel for the defendant relied which is contrary to the requirement for direct rather than derivative interest is the case In re Seymour [1934] VLR 136. That was a decision of Mann ACJ apparently delivered ex tempore without it seems a great deal of argument. Nevertheless the Acting Chief Justice appears to have relied upon a decision of a'Beckett J in The will and codicils of Simeon [1910] VLR 335 which held that a person having an interest in the will, included all persons "having an interest in the will being set aside". There is, I think, nothing to support so wide a statement, as an interest of that kind could be very remote from the estate of a deceased person. In Seymour a bankrupt son received substantial benefits under an earlier will and far lesser benefits under a later will of his father. The mortgagee from the bankrupt holding a second mortgage over an hotel property over which the deceased held a first mortgage filed a caveat. The question was whether he had a caveatable interest. If the later will were not admitted to probate then the caveator's mortgage would advance to a first mortgage over the hotel property because the first mortgage from the mortgagor's son to his deceased father had been effectively discharged pursuant to the terms of the will. His Honour said at page 137: Deciding this case for myself, I have before me a caveator who is a secured creditor of, a son of the testator, and that son, if the present will is set aside, would appear to be a substantial beneficiary under an earlier will, and the benefit he would take under the earlier will is a benefit that would fall within the security of the present applicant. So that in that sense the present appli-cant is an assignee of property which under the earlier will would fall to his assignor, and under the will now propounded that security or advantage entirely disappears. In my opinion, such an applicant has an interest which entitles him to lodge a caveat. I think that view is to some extent supported by the case of Dixon and Dickenson v. Allinson and Wife (1), though, having regard to the difference of procedure and to the fact that I have here to deal with a statutory provision calling for interpretation, I doubt whether it is direct authority. On that view I think that the caveat is a good caveat, in that it is lodged by a competent litigant. (1) [1864] 3 Sw & Tr 572; 164 ER 1397

The facts are not very clear from the report and the assignment proposition seems to have been given considerable weight. 21 Dixon & Dickenson v Allinson does provide support for the decision in Re Seymour, although the application involved was not contested. By her will and codicil a Mrs Wilson had given certain property to her husband; the husband survived his wife but died nine days later. A bank was a creditor in his estate; the bank was placed into liquidation; the executors named in the will of Mrs Wilson sought leave to serve a citation on the liquidators as representing all creditors of Mr Wilson. This was not opposed. The complete judgment is as follows: December 6. - Sir J.P. Wilde: In this case the plaintiffs propound the will and codicil of Ann Wilson, wife of William Stitt Wilson, who survived his wife, but is since dead. The executors of the will of the deceased are also executors of the will of the husband. There are certain persons representing the East of England Bank as creditors of the husband; these are official liquidators of the bank; the question is, what interest have they in the matter? They are creditors of the husband, and, as such, interested in supporting the codicil propounded, by which the husband's estate would be benefited; thus, though somewhat circuitously, they have a real and substantial interest. In Kipping and Barlow v. Ash, 1 Rob. 270, Sir H Jenner Fust considered that the bare possibility of an interest was sufficient to enable a person to oppose a testamentary instrument. In the present case I think it is quite proper to cite the official liquidators.

The effect of this case and Seymour is to place a creditor of a beneficiary in the estate in a better position than a creditor in the estate the former being interested in the outcome, the latter being interested in the estate and unaffected by any particular grant. 22 There is a further case decided by Master Connolly in the Supreme Court of the ACT, namely Re the Estate of Aaldert Van Den Berg deceased [1999] ACTSC 82. There the deceased's wife had brought proceedings in the Family Court prior to his death in relation to the ownership of the matrimonial home. That home passed to Mrs Van Den Berg by survivorship on the death of her husband and under his will she was named as sole executor and beneficiary. The son of the deceased wished to make a claim against his father's estate under the Family Provision Act and for that purpose sought to continue the proceedings in the Family Court. Naturally enough Mrs Van Den Berg would have brought those proceedings to an end if she obtained a grant of probate of the will of her husband. The son wished to obtain a grant of letters of administration ad litem to continue those proceedings. Again the facts are not very clear but it seems that an application was made that a caveat lodged by the son cease to be in force. That application failed. The learned Master held that the caveator had a sufficient interest. It seems to me reasonably clear that he had no such interest. He had no basis whatsoever to contest the application for a grant of probate. What may or may not have been the position with the Family Court proceedings it is not necessary to determine, but on any basis it could not bear on the right of the wife to a grant of probate of a will, the validity of which was not subject to challenge. It may well have been a case for the application of Pt6.2 r6.65 of the Family Court Rules. 23 Finally to complete the survey it was held in Lindsay v Lindsay (1872) 42 LJ P & M 32 that purchasers from an administrator of part of the estate of a deceased person had an interest entitling them to intervene in proceedings for revocation of the grant of administration on the ground that a will had been found. (It should be noted that the reference to the report of this case given in Williams & Mortimer 3rd Edition as [1872] LR P & D 459 is not on this point). It would probably follow that an assignee of a hope of succession bearing fruit under a particular will, or the assignee of any interest of a beneficiary under a will revoked by a later will if valid, would have sufficient interest to oppose proceedings for a grant of probate of the later will. What is the necessary interest? 24 It is difficult to reconcile all these decisions but the following conclusions are available:

(a) The discussion on wills exercising a power of appointment makes it apparent that interest in the estate is not a pre-condition to being a party. Nor is it necessary for whatever interest is necessary to be financial. An executor of a prior will has the interest necessary to challenge a later will.

(b) In Re Devoy and Dixon & Dickenson v Allinson have not been overruled in subsequent cases. This would make it undesirable not to follow them in like circumstances unless local cases are inconsistent with them. They are authorities against a requirement for a direct interest in the estate. They support the "interest in the result" requirement but do require a direct benefit.

(c) Gertsch v Roberts and In re the Goods of Clause are not necessarily contrary to Devoy and Dixon . The first two cases relate to interest through devolution of estates and the requirement to establish the intermediate right to representation rather than to rely upon an ultimate subsequent expectant right dependent upon an intermediate claim which might not be proved. A creditor of a beneficiary does not need a judgment to establish a right. The position would be different if the debt were disputed.

(d) An interest can be acquired by purchase making the required interest one not necessarily coming from the terms of the will but deriving from assignment.

None of these conclusions can assist the defendant in this action. Her interest is far more remote. It is a claim for an order for transfer of property from her husband to herself and the expectation of a more favourable order if her husband inherits the estate of his mother. In terms of the cases discussed it is not direct or indirect or derivative. It is conditional upon an order being made which may not be made. It is a hope without assignment. I consider it is too remote. Conclusion 25 In some ways this decision may seem unfortunate. The somewhat extraordinary facts of this case would appear to make it desirable that there be contested proceedings in respect of this will. As there will be no opposition at least at this stage, it seems that an application by the plaintiff in common form would be successful, subject to compliance with the requirements of the Rules, but it is not necessary to go into that as the necessary affidavits to support such a grant have not yet been filed. In those circumstances the appropriate course is to return the matter to the Registrar to be dealt with by him in accordance with the Rules in due course. 26 I should add that this does not necessarily bring to an end the rights of the defendant. Counsel for the plaintiff said that Mr John Culina would have, as part of his property, the right to due administration of his mother's estate. He said that the Family Court could order assignment of that right to the defendant in these proceedings (which would carry its fruits) and then as I understood it he said the defendant would then be in a position to bring proceedings for revocation of any grant. According to him this followed from the decision of the High Court in Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306. The relevant passage appears on page 314 of that decision. Whether or not that be the position is not for me to determine, but it does appear that the rights of the defendant may not yet have been exhausted. As I have said Lindsay v Lindsay (1872) 42 LJ P & M 32 supports the argument that the assignee of an interest has standing to intervene. 27 The order necessary to dispose of the separate issue is as follows:

Declare that the defendant has no standing or interest to oppose the plaintiff's claim.

It follows that the following additional orders should be made: 2. Order that the defence be struck out. 3. Order that the caveat cease to be in force. 4. Order that the defendant pay the plaintiff's costs of the proceedings to date including the costs of the summons filed on 5 July 2002. 5 Order that the matter be referred to the Registrar to be dealt with in accordance with the Rules. **********

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