Sergent v Glass

Supreme Court of NSW|2017-10-13|Before: Ward CJ

EX TEMPORE Judgment

HER HONOUR: Before me in the Family Provision List is an application by notice of motion filed on 12 October 2017 by Jeremy Neil Glass, the defendant in family provision proceedings.
Mr Glass was appointed on 11 August 2017 pursuant to r 7.10 of the Uniform Civil Procedure Rules to represent the estate of the deceased, the late Andrew Paul Sergent, for the purposes of defending these proceedings.
A direction was made by me in the Family Provision List on 6 October 2017 that any application for a limited grant for letters of administration, in favour of Mr Glass, for the purpose of defending these proceedings, be filed on or before 12 October 2017 and be made returnable before the family provision list judge today. This is that application.
Mr Glass seeks, relevantly, the following orders: 1. An order that special letters of administration of the estate of Andrew Paul Sergent, deceased be granted to the defendant, limited: 1. to defending proceedings 2017/00194970, brought by Thomas Declan Sergent and Clive Raymond Sergent, as tutor for William James Sergent ("the proceedings"); 2. to compromising the proceedings; 3. until an unlimited grant of administration of the estate is made or until further order of this Court. 1. An order dispensing with: 1. publication of notice of intention to make this application; 2. the need for an administration bond or sureties; and 3. the further requirements of the Probate Rules in relation to the defendant's application for these orders.

Background

The deceased died on 2 July 2016. The deceased did not leave a will. The agreed value of the estate of the deceased, after allowing for debts and funeral expenses, is about $432,560.
The deceased was survived by his second wife, Sandra Shin, whom he married on 12 January 2013 and from whom he had been separated since about March 2014; and by his two children (Thomas Declan Sergent and William James Sergent) who are the plaintiffs in these proceedings. Ms Shin is not the mother of either of the two children of the deceased. It is believed that Ms Shin is residing in Hong Kong but her address in Hong Kong is not known.
Mr Glass deposes that the only means of contacting Ms Shin, known to Clive Raymond Sergent (who is the father of the deceased and the tutor for the second plaintiff), is by email to a particular email address. That belief is based upon email correspondence that was found between the deceased and Ms Shin. Mr Glass also deposes that Mr Clive Sergent has identified Ms Shin as the person depicted in photographs upon a facebook page styled: "Sandra Shin. Lives in Hong Kong. From Hong Kong."
There have been attempts to inform Ms Shin of these proceedings by way of mail to the abovementioned email address and messages posted to her Facebook page. Those attempts to contact Ms Shin have also included an attempt to notify Ms Shin of the present application. In respect of which a read receipt notification in respect of the email communication was requested. The response from the email server, while noting that the message had been delivered to the specified email address, is that there has been no read receipt acknowledgment provided. So it is unknown whether Ms Shin has opened the email sent to that email address, and it is also unknown whether Ms Shin has read the Facebook message or any of the earlier Facebook messages.
Ms Shin, as the widow of the deceased, is entitled pursuant to s 113 of the Succession Act 2006 (NSW), among other things, to a statutory legacy (calculated by Mr Glass as comprising the sum of $350,000 increased by reference to the formula set out in s 106 of the Act, which he calculates to be $453,579.95, and interest upon that sum from the first anniversary of the death of the deceased at the relevant rule defined in that section, and calculated up to 10 October 2017 to be $1,864.03). The statutory legacy to which Ms Shin is entitled exceeds the gross value of the estate of the deceased.
Mr Glass has deposed that, because he has had no communication from Ms Shin in response to his email letter or Facebook message sent to her, he does not know her whereabouts other than he believes she lives in Hong Kong. He is not confident that he will be able to seek Ms Shin's consent in relation to any compromise of the plaintiffs' claims or to consult with her in relation to compromising them, or to give notice in relation to any proposed compromise.
Mr Glass has deposed that any attempts to compromise will result in the diminution of Ms Shin's entitlement in the estate because, as earlier noted, she is entitled to the whole of the intestate estate of the deceased. Mr Glass is concerned that if he compromises the claims without Ms Shin's consent or without notifying her of the terms of compromise, then he may be personally liable to her to the extent of any diminution of her entitlement in the estate as a result of the compromise. As Mr Glass is not a trustee in relation to the estate of the deceased, within the meaning of the definition of that term under s 5 of the Trustee Act 1925 (NSW), Mr Glass does not have standing to apply to this Court for its opinion, advice or direction in relation to any proposed compromise of the proceedings pursuant to s 63 of the Trustee Act. It is for the purpose of being able to seek such opinion, advice or direction that Mr Glass now seeks a special grant of administration of the estate of the deceased, limited to defending and compromising the proceedings and also limited until an unlimited grant of administration is made.
I am informed by Counsel appearing on the present application that what is undisputed is that, if the orders sought in the notice of motion are made, then application will be made for a judicial settlement conference to take place before the Family Provision List judge, at which Mr Glass will make an oral application for judicial advice in relation to a proposal for compromise or settlement of the family provision proceedings which have been brought by the children of the deceased.

Determination

The circumstances in which letters of administration ad litem can be granted under s 40 or s 74 of the Probate and Administration Act 1893 (NSW) or under the inherent jurisdiction of the Court, for the purpose of commencing or carrying on proceedings, have been considered in a number of cases including In the Estate of Coe [2013] NSWSC 968. There, the applicants were seeking to bring a claim against a deceased person where no grant of administration had been made and the expiry of a limitation period was said to be imminent. Young AJ noted that there was clearly power in the Court appointing an administrator ad litem, referring to s 40 of the Probate and Administration Act 1898; and to cases such as Davis v Chanter (1848) 2 Ph 545; 41 ER 1054, Maclean v Dawson (1859) 1 Sw & Tr 425; 164 ER 796; Greenway v McKay (1911) 12 CLR 310; [1911] HCA 25, and Re Simpson [1936] P 40.
His Honour noted (at [10]) that: The authorities clearly say that an administrator ad litem is not merely a token representative of the deceased in the proposed action. He or she is virtually for all purposes the representative of the estate within the limits of the grant. and noted (at [12]) that: ...to appoint an administrator ad litem without the involvement of the persons named as the deceased's executor or the beneficiaries under the will, is an extreme step.
His Honour further noted (at [12]) that: The administrator ad litem not only has to be the defendant in the suit; he or she also needs to raise moneys to retain lawyers and to investigate the allegations made by the plaintiffs and, if a verdict is suffered, then he or she needs to raise moneys by selling the deceased's assets or otherwise so as to provide for the verdict. That probably means, though this has never been decided in any case that I have found to date, that that person also has fiduciary duties, so that he or she cannot do what might be called a 'sweetheart deal' with the plaintiffs and must be fair in and about raising the funds to meet costs and verdict. So that it is an extreme step to appoint an administrator ad litem.
In Coe there were a number of difficulties related to the form of the order and as to the question of an administration bond being required.
In the present case, as already noted, the notice of motion seeks an order dispensing with the need for an administration bond or sureties. It is said, in submissions on this application, that such a bond or surety would not be necessary because Mr Glass will not be administering the estate. Rather, it is anticipated that, if the family provision proceedings are compromised, and a family provision order is made, this will have the effect of amounting to a will and give to the minor beneficiaries an interest in the estate of the deceased, such that the tutor for the minor beneficiaries will then have standing to become an administrator of the estate and to apply for the filing of letters of administration.
As to the application to dispense with the notice of intention to make the application, it is said that the only person who would be entitled to such notice would be Ms Shin, and I have already noted that there have been a number of attempts to notify Ms Shin of various matters in relation to proceedings, the latest being in relation to this particular application.
I should also note, in terms of process, that ordinarily in relation to an application for an ad litem grant, the application is made by summons supported by affidavit setting out the relevant facts. I have, however, in effect, dispensed with the requirement for a summons by directing last week that any application for a limited grant of letters of administration could be made by notice of motion in the existing proceedings.
I note that the proposed administrator is a solicitor, who is independent of the parties to the proceedings, and has already been appointed to represent the estate. So there is no issue as to the particular identity of the person to be appointed as the proposed administrator, and I do not consider that it is necessary for there to be any further evidence from the proposed administrator as to his position. Similarly there is no issue as to costs of any anticipated proceedings arising in the present case.
In Estate of Terry [2012] NSWSC 927, White J (as his Honour then was) was prepared to grant letters of administration ad litem to the brother of the deceased in order to enable proceedings that had been brought by the deceased in the District Court to be continued. The deceased's estranged spouse would be entitled to the estate on intestacy but his whereabouts were unknown and he was uncontactable. White J noted that the authors of Wills, Probate and Administration Law in NSW (RS Gedder, CC Rowlands and P Studdert) at [40.82] had expressed the view that it was generally preferable that the grantee be the person who is likely eventually to obtain a general grant but that was not possible in the case before his Honour.
In Estate of Terry, his Honour did not grant letters of administration in relation to the anticipated family provision application given that s 91 of the Succession Act provided a mechanism for a grant of administration to be made to an applicant for family provision for the purposes only of permitting the application to be dealt with. His Honour did not consider he should exercise any residual power there might be to make a grant of administration for the purposes of the child bringing a family provision application, in circumstances where Parliament had provided a mechanism for that to occur.
The present situation is distinguishable from the Estate of Terry in that the grant is not sought in order to enable a family provision application to be sought but, rather, to allow that existing application to be determined; and the application is not being sought by an applicant (or one of the applicants) for family provision; rather, it is the representative defendant who seeks the grant in order to be eligible to seek judicial advice and to defend or compromise those proceedings. I note that Hallen J discussed the operation of s 91 of the Succession Act in some detail in Curnow v Curnow [2014] NSWSC 896 at [60]-[90].
In the circumstances, I am satisfied that the making of the orders sought is appropriate in order to enable the current impasse in relation to the prosecution of the family provision proceedings to be resolved. I am also satisfied that this is a case where it is appropriate to dispense with publication of notice of intention to make the application and the need for an administration bond or sureties.
Accordingly, I make the orders as sought in paragraphs 1 and 2 of the notice of motion filed on 12 October 2017.
To the extent that service of the Mr Glass' notice of motion, or any other documents in these proceedings, is required to be effected on Ms Shin, I direct that the documents will be taken to have been served on Ms Shin if emailed to the email address "smart21vision@hotmail.com" and sent by Facebook messenger to the Facebook page styled: "Sandra Shin. Lives in Hong Kong. From Hong Kong".
I also order that Mr Glass' costs of the notice of motion be paid on the indemnity basis out of the assets of the estate.

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: 24 October 2017

Probate and Administration Act 1893(NSW)

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