BETWEEN : THE PUBLIC TRUSTEE in and for the State of Western Australia

Administration of estates - Will disposing of property in Australia - Earlier will disposing of foreign property - No grant of probate or administration pending dispute over validity of last will - Application for appointment of receiver and administrator pending grant of probate or administration - Administration Act, s 35 - Grounds for appointment

Appointment of administrator and receiver pending proof of wills in solemn form

Bolderston v Walker (1901) 7 ALR (CN) 94

Duffy v Super Centre Development Corporation Limited [1967] 1 NSWR 382

Horrell v Witts [1866] P 103

In the Will and Estate of Chin Yoong Tee; Ex parte Bank of Western Australia Ltd, unreported; SCt of WA; Library No 980318; 2 June 1998

Re Cameron; Cameron v Public Trustee [1982] WAR 55

Re Griffin; Griffin v Ackroyd [1925] P 38

Re Henderson (1886) 2 TLR 322

Salter v Salter [1896] P 291

Tomkinson v Hersey [1983] 34 SASR 181

1 EM HEENAN J: Before the Court is the adjourned hearing of an originating summons for orders appointing a receiver and administrator of the estate of Qwat Ewe Khoo deceased brought by the Public Trustee. The application was heard in part before Parker J in June 2002. It was adjourned to allow the parties to negotiate and mediate. Regrettably, no consensus has emerged from those initiatives and the application has now been fully argued before me this morning and it is necessary to deal with it.

2 Before doing so, I must explain the background which has led to this dispute. It concerns the estate of Qwat Ewe Khoo who died in Sir Charles Gairdner Hospital, Nedlands, on 31 August 2000 at the age of 66 years. Mrs Khoo had been hospitalised for some months before her death at the Royal Perth Rehabilitation Hospital in Shenton Park, no doubt for treatment for the illness which ultimately led to her demise. The causes of death shown on the death certificate are sepsis, Hickman line infection and chronic renal failure. The affidavit evidence shows that in early 2000 she had been undergoing regular renal dialysis, because of the renal failure, and this was the reason for her hospitalisation.

3 Mrs Khoo had been born in Georgetown, Penang, Malaysia, and had been living in Western Australia for about six years before her death. Before she was hospitalised, she had lived at her home at 28 Robertson Place, Bibra Lake. She died leaving two children surviving, her son, Jimmy Ewe Qwat, aged 45 years at the date of death, and her daughter, June Ewe Chye, aged 41 at the date of death. Mrs Chye is the first defendant in the present application but Jimmy Qwat is not a party.

4 Despite the death occurring more than three years ago, there has been no grant of probate or representation of the will or estate of the deceased. The deceased made a will, which appears to have been duly executed at the Royal Perth Rehabilitation Hospital on 31 August 2000. Under that will, evidently made by the Public Trustee, the Public Trustee was appointed the executor and trustee but the dispositions under the will are restricted to real and personal estate situate in Australia. The significance of that restriction needs to be appreciated in the light of facts which I will mention later.

5 Under that will the deceased granted a specific legacy of $20,000 to her brother, Khoo Teng Haw, if he should survive her, as he evidently has. Next, she made a specific devise and bequest of the house and land at 28 Robertson Place, Bibra Lake, and moneys standing to her credit and also all investments, including shares, units, stocks, debentures and bonds with Zurich Financial Services and Armstrong Jones Management Ltd, to her son Jimmy if he should survive her, as he has. Thirdly, there is a residuary bequest subject to the payment of all debts, funeral and testamentary expenses, of all the residue of the real and personal estate to her daughter, June, if she should survive her, as she has. This residuary bequest is subject to the restriction, which I have already mentioned, to real and personal estate situate in Australia. As is evident from my recitation of the terms of the will of 2000 that there is no disposition made of property located outside Australia, and accordingly, if there is property located outside Australia, which is not in law deemed to be sited within Australia (perhaps because of the manner in which it might conceivably be held), that is not dealt with by this will.

6 The revocation clause in the will of 2000 revokes all previous wills and testamentary writings only insofar as they dispose of real and personal estate situate in Australia thus leaving in effect any prior testamentary dispositions relating to foreign property, if any. Accordingly, if the will of February 2000 is valid there is a will disposing of the Australian-located property, namely, the testament of 9 February 2000, and either an intestacy with respect to foreign property not mentioned in any previous will, or the disposition of foreign property will be governed by a previous valid will, if any. That being the case it may be necessary for two wills to be proved or the will relating to the Australian property to be proved and Letters of Administration relating to any foreign property to be obtained, in order to deal entirely with the estate of the deceased in Australia and any foreign property respectively. This does not seem to have been noticed by the parties in these proceedings before now.

7 There is, indeed, an earlier will of the deceased made on 3 January 1999. Under this will there is a revocation of all former wills and codicils which is not confined to either Australian or foreign property. There is an appointment of the second defendant, the daughter June Seow, as the sole executrix of the will and then there is a series of specific bequests and devises. First, the proceeds of the Zurich and Armstrong Jones investments and $10,000 constitute a specific legacy to the testator's son, Jimmy Seow. Next, there are specific legacies of $5000 Malaysian to each of the deceased's two brothers, Teng Haw Khoo and Teng Leong Khoo. Then, there is an allocation of money in the deceased's BankWest cheque account for the payment of funeral expenses and other testamentary expenses; followed by a gift of Malaysian cash term deposits to the first defendant, June Ewe Seow. There is a specific devise of the house at 24 Robertson Place, Bibra Lake to June Seow; a specific bequest of the contents of a safe deposit box at BankWest to June Seow and a residuary bequest of antique furniture and all remaining property of whatever kind to June Seow.

8 On the face of it this will made in 1999 appears to have been duly executed and witnessed. As I have described, it specifically purports to dispose of Malaysian property as well as Australian property. To the extent that it disposes of property outside Australia it is, as I have already indicated, apparently unrevoked by the testament of February 2000 and may therefore remain, to a limited extent, a valid testamentary disposition of that foreign property. When probate or administration of the wills or estate of the deceased is being sought it would seem to me to be necessary for this will to be propounded, in addition to the 2000 will, at least in relation to the foreign property. Again that does not seem to have been addressed in these proceedings so far.

9 This state of affairs has produced a dispute about the validity of the will executed at the Royal Perth Rehabilitation Hospital in February 2000, it being alleged, apparently, that the deceased was not of full testamentary capacity when she made the will in February 2000. When I say it is "apparently" alleged that the testator was not of full testamentary capacity it is necessary to explain that this is as an inference drawn from what has since happened. Mrs Seow, the daughter, has demanded proof in solemn form of the will of February 2000 and in her defence in the probate action commenced by the Public Trustee for the proof of that will, has, at present, simply confined her position to a desire to cross-examine the witnesses about the circumstances of the execution of that will. Her defence makes no positive allegation of lack of testamentary capacity. On that defence one would expect that at the hearing of the action to propound the will the first defendant would be restricted to cross-examining witnesses on grounds confined to the formal validity and due execution of the will and that she would not be permitted to allege lack of testamentary capacity.

10 When this was pointed out in the course of argument it was foreshadowed by counsel for Mrs Seow that it was intended to amend the defence in the probate action to allege, positively, lack of testamentary capacity because of an alleged effect upon the consciousness and mind of the deceased by her illness. Again, however, in response to a question from me as to whether it was intended by Mrs Seow to propound for proof the 1999 will in a counterclaim, this was disavowed, it being asserted that the parties were agreed that that was a valid will and could be admitted to proof in common form if the will of 2000 were held to be invalid. It is not possible for me in these proceedings to ascertain whether that is the true position or not but it does appear that there is every reason to have the will of 1999 propounded as a counterclaim if the Court is to arrive at a full and correct disposition of the dispute between the parties.

11 However, the situation is even more complicated than that because, as I have already said, even if valid, the testament made in 2000 does not dispose of foreign property and, accordingly, there would seem to be a need to propound the earlier will at least in relation to foreign property. The effect of doing this would be to propound two wills relating to different parts of the estate of the deceased. One will dealing with the Australian assets and naming the Public Trustee as executor; the other, the 1999 will, naming Mrs Seow as executor and, possibly, being restricted to foreign property. So one might have the situation where there were two executors or trustees appointed with different responsibilities over different assets.

12 Whether it is desirable that this procedure should be followed and whether it will be likely to produce a workable arrangement, will need attention and consideration by the parties. It may be that there is scope for agreement that there should be two executors with powers over different parts of the estate as I have indicated, or that there may be one executor/administrator appointed to hold all the assets. Those are possibilities which I need only mention but they do seem to require consideration.

13 Unfortunately, the application for proof in solemn form of the will of 2000 does not appear to have proceeded very far. I have already alluded to the absence of any proposal to propound the 1999 will in respect of foreign property, and to the absence of a counterclaim by Mrs Seow to propound the 1999 will as the last valid testamentary disposition of all the deceased's property. This suggests to me that it will be some months at least, probably longer, before a formal grant of probate or letters of administration in this estate can be achieved. In the meantime the estate continues to be unadministered.

14 This summary of the provisions of the two testamentary documents has, to an extent, identified the principal assets of the estate but, to recapitulate, they appear to be, first, the house and land at 28 Robertson Place, Bibra Lake; second, the proceeds of the investments in Zurich and Armstrong Jones Investments with, perhaps, some cash; third, the contents of a safe deposit box held at the Bank of Western Australia which is said to contain the deposit documents for the investments as well as some jewellery and perhaps other minor items, and, finally, foreign investments, if any.

15 Despite the reference to foreign investments in the will of 1999 there is, as I have already indicated, no express reference to any foreign property (except for the purposes of exclusion) contained in the 2000 will, but there is evidence before the court that the deceased sold land in Malaysia some six years or so before her death and that the proceeds of that sale have not been fully accounted for. It is believed that the proceeds were, to some extent, distributed among other members of the deceased's family and that there was a surplus which, in some way or another, was, at least for a time, retained by the deceased. However, there is no evidence available about the value, location or nature of investment of those sale proceeds. Hence, some inquiry into the location, extent and value of such foreign estate is obviously part of the task of administration which will be necessary. Although, if the unrevoked portion of the 1999 will is proved to apply to that foreign property it is a matter which can be left solely to Mrs Seow as the executrix named in that earlier will. Again, that is a matter which will require further consideration on another occasion.

16 Of the known property comprising the estate of the deceased, the Zurich and Armstrong Jones investments continue in their former state of investment, presumably accruing income, but there is no evidence before me as to what, if any, arrangements have been made for the preparation and filing of taxation returns in relation to that revenue or, indeed, whether any liability for income tax is accruing, although one would expect that it would be. The contents of the safe deposit box seem to be secure at the bank.

18 The land and buildings at Bibra Lake are said to be worth somewhere between $200,000 and $250,000 or perhaps a little more. They remain largely in the state they were at the date of the deceased's death more than three years ago; that is, the house is presently being occupied by the first defendant, the daughter of the deceased, Mrs June Chye. She continues in occupation. According to affidavits which have been filed on her behalf she is maintaining the property, attending to payment of regular expenses, presumably electricity, water supply, rates and taxes, is also maintaining insurance cover and is attending to such incidental repairs and improvements as are necessary due to natural deterioration and the effects of wear and tear.

19 It is suggested by the first defendant that the property at Bibra Lake is well maintained and is in no danger of depreciation. However, in response to questions which I posed to counsel for the first defendant during the course of argument, it appears that the insurance on the house is in the name of Mrs June Seow personally and, possibly, also in the name of the deceased. No-one has been able to inform me of what basis, if any, Mrs Seow has a personal insurable interest in the property and therefore there may well be every reason to be concerned about the efficacy of that insurance cover to the extent that it is in her name. To the extent that the insurance cover is in the name of the deceased, again there may be some reason for apprehension unless it can be established that, in effect, the insurance is held on behalf of the estate of the deceased and that the actions of Mrs Seow in taking out that insurance are, or will be, ratified by a person with authority to contract on behalf of the estate. At the moment no such person has been authoritatively identified.

20 It is in those circumstances that the present application has been made by the Public Trustee, the executor named in the will of 2000 to be appointed receiver and administrator under s 35 of the Administration Act. That section provides:

"The court may, pending any proceedings touching the validity of any will or for obtaining, recalling or revoking any probate or administration, appoint an administrator of the personal estate and receiver of the real estate of any deceased person at such remuneration and with such full or limited powers as the court may think fit."

21 The section in its present form is the result of an amendment to the earlier s 35 made in 1976. The origin of that section, plainly is s 163 of the Judicature Consolidation Act 1925 of England and Wales which provides:

" 163 (1) Where any legal proceedings touching the validity of the will of a deceased person, or for obtaining, recalling or revoking any grant, are pending, the High Court may grant administration of the estate of the deceased to an administrator, who shall have all the rights and powers of a general administrator, other than the right of distributing the residue of the estate, and every such administrator shall be subject to the immediate control of the court and act under its direction.

(2) The Court may, out of the estate of the deceased, assign to an administrator appointed under this section such reasonable remuneration as the Court thinks fit."

(See now Supreme Court Act (1981) UK - s 117.)

22 The differences between the original English provisions and s 35 of the Western Australian Act, obviously enough, are, first, the amplitude of powers expressly conferred upon a general administrator under the English prototype and the situation under s 35 of the State Act where the powers are limited to such, full or limited powers, as the court confers at the time of appointment and, second, the express power for the court to assign remuneration under the English provision. I have no doubt this can be done pursuant to the powers of the court otherwise conferred in this State. There is also a third small difference between s 35 and its model, which is mainly of historical interest. Under s 35 there is a distinction recognised between the appointment of an administrator of personal estate and a receiver of real estate, no doubt reflecting the old rule that personal estate devolved on the personal representative and real estate devolved upon the heir. That rule has long since been abolished in England and in Western Australia. That distinction is not maintained in the English provision which treats administration of the estate as carrying the right to deal with both real and personal estate. As I have mentioned, apart from historical interest, nothing appears to turn on that distinction.

23 The origin and effect of the jurisdiction conferred under s 163 of the old English Act is discussed in an earlier edition of Tristram and Coote's, "Probate Practice", (22nd ed (1964)) at 384 and following and at 976 and in Halsbury's Laws of England, 4th ed, vol 17, at pars 1003 to 1005. In those sources it is emphasised that to found the jurisdiction to make such a grant or appointment there must be a probate action actually pending. That is of course the situation here where the application for the proof of the will of 2000 in solemn form is pending. The commentators observe that:

"The application may be made by any person, whether or not a party to the pending action, as for instance a creditor ... The jurisdiction is not exercised where there is a person legally entitled to represent or take possession of the property as in the case of the surviving partner, but it is not confined to cases of necessity."

and a reference is made to the case of Bellew v Bellew (1865) 34 LJPM & A 125, which has been cited to me in argument, where the Court said that it would not follow the established practice of requiring a case of necessity to be made out before making the grant but would adopt the Chancery practice and make the grant wherever a Chancery Court would appoint a receiver. The same principle was later followed In Re Bevan, Bevan v Houldsworth [1948] 1 All ER 271, a decision of the English Court of Appeal.

24 At the end of the submissions, counsel for the first defendant, Mrs Seow, accepted that there was a case shown for the appointment of an administrator of the personal estate of the deceased in order to make all necessary arrangements to secure the assets.

25 The mistaken assumption, common to both parties, at that point was that the disposition of any foreign property was governed by the testamentary document in 2000 whereas, as I have pointed out, it appears to be governed by the 1999 testament. Nevertheless, there is still a necessity for investigations into the existence of any foreign property to be conducted so that it might be brought under the control of the estate by whomever has the power to deal with the foreign property.

26 That person would seem to be Mrs Seow, either because the will of 2000 is invalid, leaving the 1999 will as the last valid will, or because the dispositions in the 1999 will of which she is executor in relation to foreign property have not been revoked by the later testament. Consequently, consideration of any need to appoint the Public Trustee to take control of or search for foreign property can probably be put to one side. I say "probably" because there remains the possibility that, by consent or otherwise, the Public Trustee may yet become administrator with the will annexed of any foreign property.

27 However, this does not deal with the situation of the house and land at Bibra Lake presently occupied by the first defendant, June Seow. Accepting that it is carefully preserved and maintained by the first defendant, it is nevertheless clear that she does not at present have any legal title to hold that property or to enter into obligations in relation to it. Obtaining insurance is just one conspicuous example of this hiatus in authority.

28 It is true that if the first defendant were to succeed in showing that the will of 2000 was invalid and in obtaining a grant of probate of the 1999 will, that grant of probate would confirm the authority given by the deceased by the will, conferring an interest in that land to her. But, at present, she is in the position where, if called upon to demonstrate authority to contract or engage in obligations in respect of the Robertson Place property, she will not be able to do so without being able to produce a grant of probate, and one which may never come to her if the will of 2000 is valid.

29 That leaves a vacuum in relation to the legal control of that land, a most undesirable state of affairs even if the property is not at present at risk or in any form of jeopardy. For the testator's home and land to continue in such circumstances for over three years since the date of the death of the deceased is a regrettable situation. For it to continue further for any appreciable length of time is even more regrettable. One simply cannot foresee exactly the eventualities which might arise, but eventualities may well occur requiring some person with lawful authority to take steps in relation to that land or incur obligations with respect to it. For reasons which I have given Mrs Seow does not have that authority and has no prospect of obtaining it unless and until probate of the 1999 will is granted in her favour. As I have said, that may never occur.

30 In this situation I am satisfied that the power which the Court possesses under s 35 of the Administration Act should be exercised, that there should be a full grant of administration of personal estate and the appointment of a receiver of the real estate in respect to all the property of the deceased located within Western Australia.

31 I will hear further submissions from counsel on the question of whether or not the appointment should extend to powers of administration and receivership over foreign property which has not been dealt with in the submissions so far.

32 As to the choice of the appointment of the proposed administrator and receiver I am satisfied that the considerations favour the appointment of the Public Trustee. The Public Trustee is nominated as the executor of the will later in time. There is evidence before me suggesting that the deceased was of full dispositive mental power at the date she made that will although I immediately acknowledge that that is by no means conclusive. The first defendant has not come today to adduce evidence raising an arguable case of lack of testamentary capacity. Most importantly, the Public Trustee is an independent statutory officer who has no interest in the distribution of the estate, whereas Mrs Seow is claiming the full legal and beneficial interest for herself in the Bibra Lake property. Accordingly, I will appoint the Public Trustee as administrator and receiver as proposed.

33 In relation to the minute of proposed orders I note that the powers which are to be conferred will enable the administrator to take possession of, collect and protect the assets of the estate, to defend any claim, to inspect documents, to inspect the contents of the safe deposit box and to inspect the property at Robertson Place, Bibra Lake and its contents for the purpose of carrying out a valuation and inventory and that by par 5 the first defendant may continue to occupy the property subject to her paying all land rates and water rates, utility bills and future land tax without prejudice to any claim that may be made against her for rent, or perhaps mesne profits, since the date of the death of the deceased and that she may continue to retain in her possession those personal assets of the estate currently in her possession on condition that she does not alienate, dispose of or encumber any such assets. Those provisions seem to me to be adequate to preserve what is somewhat erroneously called the status quo. It will give authority to the Public Trustee to enter, inspect and make an inventory and valuation of the house and contents at Bibra Lake. This will allow the Public Trustee the sole power to contract for and in respect of that property but it will also permit the first defendant to enjoy continuing possession until the resolution of the action for a grant of probate or administration. Those are the orders I am prepared to make subject to hearing the parties about whether or not the power of administration and receivership should extend to foreign assets.