HIS HONOUR: This is an application by the NSW Trustee & Guardian ("the trustee") as administrator of the estate of the late Karl Rex. Without disrespect, I shall refer to the various persons connected with this application by their given names.
Karl died on 27 February 2012 in Concord Hospital. He died intestate and his estate is therefore to be administered in accordance with the intestacy law contained in Chapter 4 of the Succession Act 2006 (NSW) (the "Act").
Karl was born in Germany on 19 April 1939. The evidence discloses that his father, Emil, was born in what was then East Prussia around 1900. Emil is said to have died in action during the Second World War in the Crimea in 1943. Strictly speaking, there is only hearsay evidence of Emil's death.
Karl's mother was born in East Prussia in 1911. Her name was Martha. Martha and Emil married in Germany in 1937. As far as the records disclose, Emil and Martha had three children: Karl (born in 1939), Willi (born in 1941 and still living) and Olga (born in 1938 and killed in a traffic accident in 1949).
The Court is satisfied that all reasonable searches have been undertaken to determine whether or not Karl had or has any other half or full-blooded siblings in Germany and Poland. The fungibility of Central European borders during the twentieth century makes it appropriate for searches to have been undertaken in both of those countries.
Karl emigrated to Australia in 1962, landing in Melbourne. According to his Australian immigration records of that time, he had never married and had no children. At some point Karl came to Sydney, where he settled in Dulwich Hill. Because Karl landed in Melbourne and subsequently came to Sydney, searches have been undertaken in both New South Wales and Victoria to ascertain whether he had any children in Australia, had ever married or was ever in a relationship. All of those searches have yielded a negative result.
The outcome of all of these enquiries is that it appears that Karl's only surviving relative is his brother, Willi. Those searches, of course, do not exclude the possibility of Karl having been in a relationship, or produced children of whom no-one knows, or of Karl having a sibling of whom no-one knows. However, the Court is satisfied that, in all the circumstances, all reasonable searches have been undertaken to explore those possibilities. To require the trustee to undertake further searches would be to engage in an unnecessarily expensive and time consuming exercise with no reasonable prospect of finding out any further information.
In those circumstances, the trustee applies for what is known as a "Benjamin order" derived from Re Benjamin; Neville v Benjamin [1902] 1 Ch 723. In NSW Trustee & Guardian (Estate of Peter Urso) [2013] NSWSC 903, Hallen J discussed Benjamin orders. I gratefully adopt what his Honour said.
38. In Application by NSW Trustee & Guardian (Estate of the late Marko Sijakovic), I dealt with the nature of a Benjamin Order. I said:
23 In Williams, Mortimer & Sunnucks, Executors, Administrators and Probate, 17th ed, (1993), at 938, the learned authors state:
It may happen that distribution is held up because the representatives cannot be sure who is entitled. Thus a person's right to share in the estate may turn on the question whether another predeceased the testator, predeceased him without issue, and it may be uncertain on the facts whether this happened. In these circumstances, the representatives may apply to the court for a "Benjamin" order - Re Benjamin [1902] 1 Ch 723, that is, an order permitting them to distribute the estate on the footing that certain events have or have not happened. The effect of such an order is to relieve the representatives of liability in their capacity as representatives should the hypothesis on which they are to be permitted to distribute turn out to be wrong. Thus, where a beneficiary who was thought to have predeceased a testator subsequently appears, he will not be entitled to bring a claim against the representatives for his share of the estate. He may, however, be entitled to claim in equity against the beneficiaries who have been wrongly paid or perhaps bring a tracing action against the recipients of the share - Re Diplock [1951] AC 251.
24 In Gonzales v Claridades [2003] NSWSC 508; (2003) 58 NSWLR 188, at [75], Campbell J (as his Honour then was) said:
The Court can, in some circumstances, where there is uncertainty about a factual matter relevant to the distribution of a deceased estate, make an order that the executors are at liberty to distribute on some particular factual basis - eg that a missing beneficiary under the testator's will was unmarried and predeceased the testator without issue (Re Benjamin [1902] 1 Ch 723). Parry & Clark, The Law of Succession, 10th edition (1996) page 471-2 say:
"The particular footing set out in the order is, of course, based on probable inferences from the proved facts, but the order does not constitute a positive declaration of rights (Hansell v Spink [1943] Ch 396, 399; Re Green's Will Trusts [1985] 3 All ER 455 at 462 ("the true view is that a Re Benjamin order does not vary or destroy beneficial interests. It merely enables trust property to be distributed in accordance with the practical probabilities.")) and, according, it does not prevent any missing beneficiary (if he subsequently appears) from pursuing his remedy against a recipient of the deceased's assets. Sometimes a Benjamin Order is made after an inquiry by the court has proved inconclusive, but such an order may be made without any prior inquiry by the court if suitable advertisements for a missing beneficiary produce no claims, or even without any advertisements if the inference from the proved facts is irresistible (as in Re Green's Will Trusts, supra (by her will T, who died in 1976, gave her estate to her son B; B had been a gunner in a bomber which went missing in a raid on Berlin in 1943; nothing ever heard of the bomber or its crew; irresistible inference crew perished, though T believed when she died that B was still alive)."
(Some footnotes omitted) See also Hardingham Neave & Ford, Wills and Intestacy in Australia and New Zealand, 2nd edition, paragraph [3604].
76 The basis for making such orders was explained by Mahoney J in Wilcox v Poole [1974] 2 NSWLR 693. At 697, his Honour quoted from Daniell's Chancery Practice, 8th edition, pages 1539-40,
"There are some cases in which, although the interest of a party in the fund is not absolute, but subject to a contingency, it has been ordered to be paid out at once, the contingency being remote; and formerly the parties receiving the money entered into a recognizance or undertaking to refund it, in the event of the happening of the contingency; but it is no longer the practice, on making orders presuming death, to require security to refund. This has been done when the right of the parties for subject to the contingency of a female who is past the age of child-bearing, having children, or where a person has been presumed to be dead."
Mahoney J at 697 described the principle as,
"a beneficial one which may enable parties to have the early enjoyment of property to which they will, as a matter of practical certainty, ultimately become entitled".
At 699, his Honour said:
"the principle ... does not affect the legal rights of the parties in the strict sense, and concedes that there is no entitlement as of right to the distribution of the property in question. The principle is one which is invoked merely by way of convenience in administration."
25 In Lempens v Reid [2009] SASC 179, Gray J, at [32], said:
"The effect of a Re Benjamin order is to enable the executor to distribute the estate to those members of the class which have been ascertained at the time of distribution, whilst ensuring protection of the executor if a person entitled to a portion of the estate subsequently appears. If such a person does appear, he or she is not entitled to make a claim against the executor for that portion but may claim against beneficiaries who have been paid incorrectly. If a Re Benjamin type order were considered appropriate in the circumstances of these proceedings, it may be necessary for the Court to order that further enquiries be undertaken, to ascertain whether members of the class can be located, prior to any distribution of the gift contained in the subject clause." (Omitting citations)"
39. Thus, in a case where a trustee is faced with a practical difficulty in establishing the existence of possible beneficiaries or other claimants, the Court will give a direction to the trustee enabling it to distribute the trust property on an assumption of fact that there is no such beneficiary or claimant. In the case where a beneficiary has disappeared in circumstances where the absence leads to an inference of death, an order may be made that the trust estate be distributed on the basis that the beneficiary is dead: Re Reynolds Trusts (No 2) [1942] QWN 40; Nolan As Administratrix of the Estate Of Barbara Nolan, deceased v Nolan [2011] WASC 224 at [33].
40. As Nourse J explained in Re Green's Will Trusts [1985] 3 All ER 445, at 446:
"The true view is that a Re Benjamin order does not vary or destroy beneficial interests. It merely enables trust property to be distributed in accordance with the practical probabilities..."
At 462, his Lordship added:
"I do not think that the question whether such an order should be made depends on whether or not there will be administrative inconveniences caused by the trustees retaining the fund. I think it depends on whether in all the circumstances the trustees ought to be allowed to distribute and the beneficiaries to enjoy their apparent interests now rather than later."
As Nourse J noted, the making of a Benjamin order does not destroy the rights of other beneficiaries who may be undiscovered at the time of the making of the order. However, the order does permit for the orderly administration of the estate in accordance with, to borrow His Lordship's language, the "practical probabilities". The Court is satisfied that the practical probabilities in the present case are that Karl's only surviving relative is Willi.
Given that it appears that Karl left his brother Willi but no surviving parents, spouse, children or nieces or nephews, s 129 of the Act is applicable, which provides:
129 Brothers and sisters
(1) The brothers and sisters of an intestate are entitled to the whole of the intestate estate if the intestate leaves:
(a) no spouse, and
(b) no issue, and
(c) no parent.
(2) If no brother or sister predeceased the intestate leaving issue who survived the intestate, then:
(a) if only one survives-the entitlement vests in the surviving brother or sister, or
(b) if 2 or more survive-the entitlement vests in them in equal shares.
(3) If a brother or sister predeceased the intestate leaving issue who survived the intestate:
(a) allowance must be made in the division of the estate between brothers and sisters for the presumptive share of any such deceased brother or sister, and
(b) the presumptive share of any such deceased brother or sister is to be divided between the brother's or sister's children and, if any of these children predeceased the intestate leaving issue who survived the intestate, the deceased child's presumptive share is to be divided between the child's children (again allowing for the presumptive share of a grandchild who predeceased the intestate leaving issue who survived the intestate), and so on until the entitlement is exhausted.
It follows that, by operation of section 129(1), Willi is entitled to Karl's estate, in the absence of any other siblings, spouse, parents, nieces or nephews or issue being identified.
Accordingly, the Court orders:
1. That the NSW Trustee & Guardian be at liberty to distribute the Estate of the late Karl Rex (the "deceased"), who died on 27 February 2012 in the manner set out below in the absence of conclusive evidence that the deceased was survived by:
1. any person who was his spouse;
2. any issue;
3. his father; and
4. any siblings other than Willi Rex.
1. That the trustee be at liberty to distribute the deceased's estate to Willi Rex.
2. That the trustee's costs of these proceedings be paid out of the Estate of the late Karl Rex on the indemnity basis.
3. The exhibit may be returned.
[2]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 26 June 2015