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[2025] NSWSC 223
General information, not legal advice.
Supreme Court of NSW
2025-03-18
Slattery J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Re the Estate of Dean John Edmunds [2025] NSWSC 223
Hearing dates: 25 February 2025
Date of orders: 18 March 2025
Decision date: 18 March 2025
Jurisdiction: Equity - Probate List
Before: Slattery J
Decision: Plaintiff appointed administrator of the estate of the deceased under Probate and Administration Act 1898, s 74. Orders made limiting the distribution of the estate without the further approval of the Court. Order made that the costs of the plaintiff’s application for administration of the estate be paid out of the estate on the indemnity basis.
Catchwords: SUCCESSION – Probate and administration – Entitlement to grant – deceased dies intestate leaving a small net estate of approximately $250,000 – deceased’s mother, an unsecured creditor of his estate, but not his next of kin, applies for administration of the estate – plaintiff gives reasonable notice of her application to the next of kin, the deceased’s four children, who do not apply for administration of the estate – satisfactory evidence that the plaintiff is a creditor of the estate – the plaintiff claims that after the estate satisfies the unsecured debt owed to her that the remaining assets of the estate are held on trust for her other two children, the deceased’s siblings – the next of kin have shown interest in receiving an account of the future administration of the estate from the plaintiff – further conflicts of interest are in prospect in the administration of the estate between the deceased’s siblings and the deceased’s children – it is not economically viable to appoint an independent professional administrator to administer the estate for a fee to manage these conflicts independently – whether the plaintiff should be appointed administrator of the estate – consideration of the conflicts of interest to be encountered in the administration of the estate – whether the plaintiff should be appointed administrator of the estate – whether constraints should be placed upon the plaintiff’s administration of the estate due to the prospective conflict of interest.
Legislation Cited: Conveyancing Act 1919, s 23C(1)
Civil Procedure Act 2005, ss 14 and 26
Probate and Administration Act 1898 ss 63, 69 and 74
Succession Act 2006, s 127(3)(b)
Supreme Court Rules 1970, Part 78 Rules 19, 53 and 64
Uniform Civil Procedure Rules 2005, r 7.6
Cases Cited: Estate of Maynard (1886) 12 VLR 313
Hawke v Wedderburne (1868) LR 1 P&D 594
Re Cable (1969) 89 WN (Pt1) (NSW) 516
Texts Cited: J.D. Heydon, M.J.Leeming and P.G.Turner, Meagher Gummow and Lehane’s Equity – Doctrines and Remedies, Fifth Edition, 2014, Chapter 7
Category: Principal judgment
Parties: Plaintiff: Janice Isabella Edmunds
Representation: Counsel: S Reuben
Solicitors: David Kotthoff Solicitor, Corowa
File Number(s): 2021/00300250
Publication restriction: N/A
Until his sudden death on 15 November 2019, Dean John Edmunds (“the deceased”) was the publican of the Oaklands Hotel in the Riverina hamlet of Oaklands. The evidence indicates he died intestate. No one has found a will. He was divorced and has four children, his next of kin. By Summons dated 24 May 2022, his mother, the plaintiff, Janice Isabella Edmunds, applies as a creditor of the estate for administration of the estate (“the estate”) on intestacy.
The deceased’s estate is modest. It has a gross value of $380,257 and a net value of $256,827. It consists of a half interest as tenant-in-common in two parcels of real estate in Oaklands: one parcel is the freehold of the Oaklands Hotel and the other is a residential property in Corowa in which the plaintiff, and her partner live. More than five years after his death, the deceased is still the registered proprietor of these property interests.
The evidence in support of the plaintiff’s application makes clear that the substantial delay of more than five years in the administration of this estate has been a source of anxiety and inconvenience especially to the plaintiff but also for other family members. The plaintiff has engaged a solicitor at Corowa, Mr David Kotthoff to seek this grant of administration.
The deceased’s children are entitled to apply for administration of his estate, but they have shown no interest in making an application. Probate and Administration Act 1898 s 63 gives primacy in applying for administration of an estate to a spouse of the deceased or to the deceased’s next of kin before a creditor of the deceased.
After the plaintiff applied for administration as a creditor of the estate the Court issued requisitions to be satisfied that the deceased’s children had sufficient notice of the proceedings. Responding to those requisitions and attempting to locate and correspond with the deceased’s children has occasioned some of the delay in the grant of administration.
The Court is satisfied that it should make a grant of administration to the plaintiff. Applications such as this are mostly dealt with by orders in chambers, without written reasons for decision. But from the evidence, the Court anticipates that this small estate will encounter legal issues that might consume it in legal costs, unless the Court sets out a plan to facilitate their fair resolution in the best interests of the parties. These reasons are published to assist the parties to navigate these legal issues.
The plaintiff applied by Motion filed on 11 December 2024, for orders under Civil Procedure Act 2005, s 14 dispensing with the requirement under Supreme Court Rules 1970 Part 78 Rule 64 (“SCR”), which requires notice of the plaintiff’s application for administration to be given to the deceased’s next of kin.
The plaintiff applies for administration as a creditor of the estate, because the deceased’s next of kin, his children, have not applied. Creditors in the circumstances of the plaintiff may be granted administration of an estate under Probate and Administration Act 1898 s 63 and under the general power conferred by s 74.
Probate and Administration Act s 63 provides:
“63 To whom administration may be granted
The Court may grant administration of the estate of an intestate person to the following persons, not being minors, that is to say to—
(a) the spouse of the deceased, or
(b) one or more of the next of kin, or
(c) the spouse conjointly with one or more of the next of kin,
or if there be no such person or no such person within the jurisdiction—
(i) who is, of the opinion of the Court, fit to be so trusted, or
(ii) who, upon being required in accordance with the rules, or as the Court may direct, to apply for administration, complies with the requirement or direction,
then to—
(d) any person, whether a creditor or not of the deceased, that the Court thinks fit.
“74 Power as to appointment of administrator
The Court may, in any case where a person dies—
(a) intestate, or
(b) leaving a will, but without having appointed an executor thereof, or
(c) leaving a will and having appointed an executor thereof, where such executor—
(i) is not willing and competent to take probate, or
(ii) is resident out of New South Wales,
if it thinks it necessary or convenient, appoint some person to be the administrator of the estate of the deceased or of any part thereof, upon the appointed person giving such security (if any) as the Court directs, and every such administration may be limited as the Court thinks fit.
Ordinarily, where a creditor/applicant for administration is competing with an application for administration by the next kin, the next of kin’s application will be preferred. A creditor’s claim for administration is weaker than that of any other applicant with an interest: Hawke v Wedderburn**e (1868) LR 1 P&D 594; Estate of Maynard (1886) 12 VLR 313; R**e Cable (1969) 89 WN (Pt1) (NSW) 516 at 521.
The hierarchy in Probate and Administration Act, s 63 and the Court’s caution in appointing a creditor as administrator are explained by the position of conflict of duty and interest in which such an appointment places the creditor/administrator. The creditor’s duty, if appointed administrator, is to administer the estate for the benefit of the beneficiaries and therefore to resist claims against the estate. But the creditor’s self-interest is to prosecute and recover the full amount of the creditor’s claim from the estate.
The deceased had four children, three sons, Bradley, Matthew, Luke and a daughter, Jesse by his first wife, Lynette. According to his death certificate, he was married twice, once at the age of 22 to Lynette Brooks and again at the age of 32 to Tricia Dowling.
The plaintiff’s evidence about the deceased’s spouses is not based on objective materials such as divorce papers but the Court infers that he was divorced from his first wife at that time of his death. There is some uncertainty in the evidence as to whether he was divorced from his second wife but that certainly appears to be the thrust of the evidence advanced. This must be clarified with evidence of a divorce decree for the second wife, because these reasons assume that the deceased had no legal spouse, and the children are his next of kin: see Succession Act 2006, s 127(3)(b). There will need to be substantial revision to the Court’s directions, if this assumption turns out to be incorrect.
It is clear enough that because of divorce acrimony the deceased was estranged from all his children. The Court accepts the evidence that the deceased was not in a de facto relationship at the time of his death. But the evidence that he was divorced from two spouses at the time of his death still needs to be clarified.
The Court is satisfied that the plaintiff is a creditor of the estate. The deceased shared his half interest as tenant-in-common in the Oaklands Hotel with his brother, Wade, the plaintiff’s other son. Mr Alan Garner, the plaintiff’s partner, was the deceased’s co-owner as tenant-in-common in the residential property.
The ANZ Bank holds mortgage security over both the hotel property and the residential property. At the time of filing the plaintiff’s application the mortgage balance outstanding on the residential property was $92,960.86 and the amount outstanding on the Oaklands Hotel property was $61,000.
The plaintiff has been unable to secure the express consent of all the next of kin to her application for administration. She encountered lengthy difficulties seeking that consent from the deceased’s children and in notifying them of these proceedings. The Court is satisfied she has now done enough.
Here, the plaintiff is only one of several persons within Australia entitled to apply for administration of the deceased’s estate. SCR Pt 78 r 19 requires, such an applicant to provide the written consent of persons entitled to apply for administration who are not applying, or evidence that those other persons have been served with notice of the plaintiff’s intention to apply in the form of a Notice to Apply for Administration (Form 136). SCR Pt 78 r 53, allows any person to require the spouse, or one or more of the next of kin of the deceased, to apply for administration by filing and serving a Form 136.
Mr Kotthoff’s affidavit of 1 December 2024 explains the efforts he has made to notify the deceased’s children of these proceedings and either seek their consent or serve on them a Form 136.
The deceased died suddenly on 15 November 2019. On 22 November 2019, Mr Kotthoff met with the deceased’s siblings, his sister, Suzanne, his brother, Wade, and his four children, Bradley, Luke, Matthew and Jesse. He advised the children at this meeting to retain independent solicitors to consider applying for Letters of Administration.
This resulted in the children retaining the firm, Cassidys Morrison & Teare solicitors of Cobram, Victoria (“Cassidys”). Mr Malcolm Dickson of Cassidys told Mr Kotthoff on 11 February 2021 that the deceased’s children would not be making an application for administration. Mr Dickson's February 2021 letter made clear that should other members of the deceased’s family, such as the plaintiff or the deceased’s siblings wish to apply for administration that Mr Dickson would cooperate in sending Forms 136 to the deceased’s children.
Mr Kotthoff wrote to Cassidys on 16 February 2021 asking whether the children would sign the necessary consents to the plaintiff applying for administration. Mr Dickson replied seeking the necessary forms of consent from Mr Kotthoff. On 4 March 2021, Mr Kotthoff forwarded the forms of consent to Cassidys. Signed consents were not returned to Mr Kotthoff.
In the absence of consents to administration from the children, Mr Kotthoff caused Form 136 Notices to be issued for service, which were returned to the Court on 18 November 2024. Mr Kotthoff succeeded in personally serving Jesse Edmunds, the deceased’s daughter, with a Form 136 Notice but was unsuccessful in achieving personal service on the deceased’s three sons.
At the behest of the plaintiff, in November 2023 process servers attended a house it was believed the deceased’s three sons occupied. But the process server discovered the house was vacant. Mr Kotthoff emailed Mr Dickson pointing out that the sons could not be located at the address he had supplied in 2021 and sought an alternative current address. No address was supplied.
"In return I would like all correspondence of statement of asset and liability [sic] when all is settled with the Oaklands Hotel. When Janice is appointed executor, I also request my late father's TFN number for a lost super search, thank you.”
It may be inferred from this limited communication that Jesse Edmunds was interested in examining the balance sheet of the hotel to see what equity might be available to the children for distribution and was also interested in the deceased’s superannuation.
Nothing further was heard from the deceased’s children. On 1 March 2024, Mr Kotthoff emailed Jesse Edmunds again requesting the deceased’s sons to contact him for signing the final documents for administration of the deceased’s estate, commenting to her that "the continued delay is seriously stressing your grandmother!"
Jesse Edmunds replied the same day advising that she had contacted her brothers, Bradley and Luke and that she expected that they would be in contact with him. Jesse Edmunds correspondence is consistent with her having communicated the nature of this correspondence with her brothers. The deceased’s sons have not contacted Mr Kotthoff since then. Mr Dickson informed Mr Kotthoff that Cassidys no longer held instructions to act for the children. Nevertheless, Mr Dickson generously offered on 12 March 2024 that he would "see what he could do to find them”.
Further unsuccessful correspondence between mid-March and in mid-June passed between Mr Kotthoff and Mr Dickson. But Mr Dickson left Cassidys in June 2024. About the same time Cassidys file relating to the children was closed. Cassidys then indicated they were not then prepared to do anything further to assist the plaintiff.
The Court is satisfied from these exchanges that the deceased’s children (a) are likely to be aware of the plaintiff’s present application and (b) have no intention of applying for administration of the deceased’s estate.
The affidavit evidence and the correspondence disclose that apart from collecting the debt due to her from the estate, the plaintiff is likely to encounter other conflicts of interest with her duty as administrator if she is granted administration. Such conflicts not uncommonly occur in the appointment of executors. Testators often prefer to choose family members to be their legal personal representatives despite such conflicts. But the Court is cautious about appointing administrators with such conflicts where there are alternatives available.
The plaintiff says in her affidavit of 10 May 2023 that the land on which the Oaklands Hotel stands “was purchased by the deceased with Wade Edmunds as trustees of an undocumented family trust in respect of which the deceased, Wade Edmunds and my daughter Sue Edmunds, were the beneficiaries”. If there is no written acknowledgement by the deceased of this trust, Conveyancing Act 1919 s 23C(1) may create issues as to the terms and enforceability of the claimed trust for the benefit of the deceased’s siblings: see J.D. Heydon, M.J. Leeming and P.G. Turner, Meagher Gummow and Lehane*’s* E**quity – Doctrines and Remedies, Fifth Edition, 2014, Chapter 7.
The plaintiff claims that she is owed money by the deceased as a creditor, and she is being granted administration of the estate on that basis. This would make any contention difficult that she had the benefit a resulting trust exception s 23C(1).
There is considerable uncertainty about the terms of this trust. The plaintiff’s affidavit of 24 July 2024 deposes that the deceased’s trusteeship in the Oaklands Hotel was for the benefit of he and his siblings as to 1/3 to each. The plaintiff says that the deceased died unexpectedly before a trust deed could be prepared to define the terms of the trust. Whether the deceased is thought to have held beneficially one third of one half of the hotel property or one third of the hotel property is unclear. All of this is sufficient to see that the deceased’s children may wish to contest the beneficial ownership of the Oaklands Hotel land.
The plaintiff also says that the deceased’s sibling, Suzanne, is owed wages by the hotel business because she moved from Queensland to manage the hotel following the deceased’s death. This history may well be correct. But the plaintiff can be assumed to wish to have her other children fully compensated out of the deceased’s estate for this work, another conflict with her duty as administrator.
Finally, the plaintiff says that the other principal asset in the estate is the half share held by the deceased in the residential property in Corowa. The plaintiff explains in her 24 July 2024 affidavit that the time the property was purchased the deceased needed a co-owner to secure finance as he was unable to otherwise qualify for a home loan. The property was leased out initially but then badly damaged by a tenant. The plaintiff explains that after the deceased acquired the Oaklands Hotel, he moved into the hotel. He offered for the plaintiff and Mr Garner to move into the residential property in Corowa and repair it on the basis that they could live in it whilst they could live independently. This seems to have involved Mr Garner making mortgage payments. The precise nature of Mr Garner’s interest in this property competing with the estate is uncertain. But on the present evidence, the deceased appears to have been beneficially entitled to much of the Corowa property. This is another matter that the administrator will have to resolve and in respect of which she has a conflict of interest.
The Court can grant administration of this estate to the plaintiff as a creditor of the estate under Probate and Administration Act, s 63(d) or s 74. This estate demands finalisation. More than five years have elapsed since the deceased’s death. The real property and the deceased’s name must be transferred to the persons entitled to it. No one other than the plaintiff is willing to undertake its administration. It is not economically viable for an estate with a net value in the order of $250,000 to appoint an independent administrator charging professional fees at commercial rates of remuneration. No other independent volunteer to administer the estate has come forward.
The Court’s options are limited. The Court will appoint the plaintiff under Probate and Administration Act, s 74. It is both “necessary and convenient” to do so. No other course is practicable for this estate. But the Court will put in place controls to ensure that despite the several conflicts of interest that the plaintiff faces to complete the administration of the estate, the deceased’s children’s interests will be adequately protected. This must be done with as little expense as possible; so, the Court sets out here a framework for that to occur.
Protection of the interests of the deceased’s children can be achieved by preventing the distribution of the estate until the potentially contentious issues that have been identified are resolved. This estate will not be distributed without the Court’s approval. Hopefully the issues can be resolved without litigation which would destroy this estate. The Court’s free court-annexed mediation service is probably the best way to achieve this. At the appropriate time the Court can order that these proceedings be referred to mediation under Civil Procedure Act, s 26.
The deceased’s children need to be notified of their rights and urged to seek legal representation again. There will be an immediate difficulty in dealing with the children, because only Jesse Edmunds seems to be communicative and has been a reliable correspondent at an identified email address. The solution to this is probably to recognise that Jesse and her three brothers are all in a single class holding the same interest as the next of kin in their dealings with the estate. If the matter becomes contentious, a representation order can be made under Uniform Civil Procedure Rules (“UCPR”) 2005, r 7.6 for Jesse to represent her brothers to bind her brothers in any settlement. To save costs this can all be done by amendments to the existing Summons.
There may be unexpected twists and turns in attempting to administer this estate at a low cost. The plaintiff may wish to refer the matter to the probate judge for directions to assist in the estate’s administration. She will have liberty to apply for that purpose.
In short, once she is appointed the administrator should take the following steps.
(a) the quantum of the present debt owed by the estate to the plaintiff, (b) a claim that interests in the Oaklands Hotel and the hotel business are held on trust for the deceased’s siblings, (c) a claim that the deceased’s sibling, Suzanne, is entitled to wages from the estate for working at the Oaklands Hotel, and (d) a claim that Mr Garner or the plaintiff may have a claim over part of the residential property in Corowa.
Arrange a Court annexed mediation, if the proceedings cannot otherwise be resolved consensually.
It is unfortunate that such complications arise in so small an estate, but the Court must be satisfied that the interests of the deceased's children as well as any claimants upon the estate will be dealt with fairly and according to law. The practical way to achieve this is to ensure that the deceased’s children are closely involved in the decisions that are made to finalise the assets of this estate.
A contradictory part of the evidence will need to be resolved by the administrator. The correspondence between Jesse Edmunds and Mr Kotthoff shows that she is interested in the deceased’s superannuation being made available to her and her brothers. Jesse Edmunds’ March 2024 correspondence seems to indicate that she had not received any superannuation. It is unclear whether the deceased had executed a binding death benefit nomination dealing with his superannuation. But as he did not make a will, it is reasonably likely he did not execute such a nomination.
In contrast the plaintiff’s evidence is to the effect that she believes that the deceased’s children have already been paid the deceased’s superannuation. The basis for her holding that opinion is unclear. Before distribution of the estate the administrator will need to resolve whether all the deceased’s superannuation has been paid either to the children, or whether any of it, due to expiry of binding death benefit nominations, should be paid to the estate and distributed. This is another potential area of conflict of interest for the plaintiff.
Should any problems arise, the parties are encouraged to relist the matter before the Probate Judge for further directions. The plaintiff’s solicitor, Mr Kotthoff can appear by AVL to save costs on such occasions. The Court will appoint one directions hearing after the publication of these reasons to assess the administrator’s progress with the matters set out in these reasons.
But given the history of this matter, the plaintiff must achieve this within a reasonable time, showing openness to the claims of the deceased’s children over the estate, and at a modest cost. Otherwise, the Court will revoke the grant and take the unpalatable course of appointing a professional administrator.
For these reasons the Court:
ORDERS on the plaintiff’s Motion dated 11 December 2024 pursuant to Civil Procedure Act, s 14 that the requirement of SCR Pt 78 r 64 for personal service on Bradley John Edmonds, Luke Anthony Edmonds and Matthew John Edmonds of the Notice to Apply for Administration – Form 136 is dispensed with on the basis that sufficient steps have been taken to bring Form 136 to the attention of those persons;
GRANTS letters of administration of the estate (“the estate”) of the late Dean John Edmunds late of Oaklands (“the deceased”) to the plaintiff under Probate A**dministration A**ct, s 74 subject to the following terms, namely that the plaintiff will:
(a) not distribute the estate without the consent of the next of kin, or the approval of the Court; (b) keep the next of kin informed about the progress of administration of the estate on a regular basis and no less than every two months; and (c) not pay or compromise any claim against the estate, including a claim by the administrator, without first giving 21 days’ advance notice to the next of kin with full particulars of the claim and the reasons for the payment or compromise proposed to be made;
(a) the publication of the notice of intention to make this application; and (b) the need for any administration bond or sureties;
**********
[38] - correction
The plaintiff’s evidence was ultimately completed and filed in February 2025. The Motion was referred on 25 February 2025 by the Probate Registrar to the Probate Judge. Mr S Reuben of counsel presented the application instructed by Mr Kotthoff. The plaintiff’s motion was adjourned into chambers for further consideration after additional materials were provided to the Court.
In March 2016, the plaintiff advanced $62,500 to the deceased to assist him and his brother Wade to purchase the freehold of the Oaklands Hotel and the business conducted on the freehold. Bank statements substantiate that the plaintiff made this advance on 15 July 2015. Thereafter, the plaintiff made regular weekly advances of $200 to support the business to ensure that deceased could keep up with monthly mortgage payments.
These payments appear to have come from a joint account conducted by the plaintiff and her partner, Mr Garner. But the plaintiff gives evidence that she advanced the funds, and the Court does not need to enquire into the state of accounts between her and Mr Garner.
A recent letter from the plaintiff’s accountant, Ms Jeaninne Kinghorn of Matthews partners, certified practising accountants of Caroline Springs, Victoria, states that the amount advanced was as much as $81,452.69, comprised of $10,000 to become security for an overdraft for the business with the balance being paid to the vendor. A balance sheet prepared by the accountant for the business as at 30 June 2016 shows that the partnership of the deceased and his brother Wade owed the plaintiff (and perhaps her partner Mr Garner) the sum of $81,452.69.
By the time the plaintiff brought this application, the Court accepts the amount owing to the plaintiff was $43,430. This amount was the net amount still owing after the deceased and Wade partly fulfilled a family plan to pay down the loan advance out of the profits of the hotel business. But the deceased’s death interrupted that plan and the debt to the plaintiff was not fully discharged. The dislocation to the business upon the deceased’s death required the plaintiff to make further advances to the business, including to ensure that mortgage payments were made to the ANZ Bank. Since the filing of the Summons, the amount the estate owes to the plaintiff has accrued beyond $43,430.
The ownership structure associated with the plaintiff’s 2016 advances has led to other questions, which must be resolved before this estate can be fully administered. But first these reasons examine the notice the plaintiff has given of these proceedings to the deceased’s children.
Mr Kotthoff nevertheless managed to contact Jesse Edmunds on 9 January 2024. In response, by email, she volunteered to let her brothers know about the request that Mr Kotthoff had made for a consent to a grant of administration to the plaintiff. But she added the following specific request in her reply email to Mr Kotthoff:
Confirm to the Court that the deceased was divorced from both spouses.
Contact Jesse Edmunds and provide her with a copy of these reasons and urge her to contact her brothers and seek legal representation.
Unless the deceased’s three sons show they are willing to engage with the estate, if Jesse Edmunds consents and if the sons are given sufficient notice, the administrator should seek UCPR r 7.6 making Jesse Edmunds a representative party for her brothers.
Identify the best available evidence surrounding the identifiable potential areas of conflict of interest described in these reasons (there may be others), which are: