Gibson v Buchanan [2004] NSWSC 957

New South Wales Supreme Court

CITATION : Gibson v Buchanan [2004] NSWSC 957 HEARING DATE(S) : 11 October, 2004 JUDGMENT DATE : 11 October 2004 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Judgment for Defendant, with costs.

CATCHWORDS : EXECUTORS & ADMINISTRATORS - REMOVAL - extremely complex administration involving five unadministered estates and seventeen real estate properties - whether administrator guilty of inexcusable delay in administration. LEGISLATION CITED : Wills Probate and Administration Act 1898 (NSW) - s.66 CASES CITED : Bates v Messner (1967) 67 SR NSW 187 Mavrideros v Mack (1998) 45 NSWLR 80 PARTIES : Shirley Gladys Gibson - Plaintiff Kym Patricia Buchanan - Defendant FILE NUMBER(S) : SC 1901/02 COUNSEL : M. Gorrick - Plaintiff J.B. Whittle SC - Defendant SOLICITORS : Pike Pike & Fenwick - Plaintiff Willis & Bowring - Defendant

Ex tempore

1 The Plaintiff, Ms Gibson, seeks an order under s.66 of the Wills Probate and Administration Act 1898 (NSW) revoking the grant to the Defendant, Ms Buchanan, of substituted Letters of Administration of the estate of the late William Joseph Alexander Veney ("WJV") made on 10 September 1999. 2 Ms Gibson claims that Ms Buchanan should be removed as administrator because she has neglected or omitted to carry out the administration of the estate with due expedition and because she has, in the administration of the estate, preferred her own interest or the interest of her father, Roy William Veney, to her duties as an administrator. 3 The circumstances in which Ms Buchanan came to be appointed an administrator of the estate of WJV and the activities required in the administration of that estate are extraordinarily complex. Ms Buchanan has described them as an absolute nightmare. I do not think that that is too strong a description, as the merest glance at the family tree, which has been prepared for the purpose of administering the estate, shows. 4 As at the date of grant of the Letters of Administration to Ms Buchanan, there were five unadministered estates to be investigated, one of them going back to 1945. Those estates involved some seventeen different properties, all of which required investigation. For the purposes of this application, I need give no more than a brief summary of the difficulties involved in the administration. 5 The family tree commences with William "The Saddler" Veney ("William") and Emily Letitia Veney ("Emily"), the parents of WJV and George Christopher Veney ("George"). For the sake of comprehensibility, and without disrespect, I will refer to members of the family by abbreviations or their forenames. 6 Emily died on 12 October 1945 and Probate of her will was granted to WJV and George, her sons. Emily had an interest in two properties at Alexandria and Randwick. William died on 5 August 1955. He had an interest in another property at Alexandria. WJV and George took interests in these three properties under the wills of their parents. 7 WJV died intestate on 18 July 1968 not having completed the administration of Emily's estate. He had property in his own name and interests in the unadministered estates of Emily and William. Letters of administration of WJV's estate were granted to George. 8 George died intestate on 1 August 1986 not having completed administration either of Emily's estate or WJV's estate. George had property in his own name and interest in the unadministered estates of Emily, William and WJV. Probate of George's will was granted to his widow, Bessie May Veney ("Bessie"). 9 WJV's widow, Gladys Estelle Veney ("Gladys"), died on 2 March 1970. Ms Gibson, Gladys' niece and sole beneficiary, was granted Probate of Gladys' will. Gladys, of course, was a beneficiary of WJV's estate on intestacy. 10 George's widow, Bessie, died on 12 July 1992 not having completed the administration of George's estate. Bessie owned property in her own name and had interests in the unadministered estate of George, who had in turn interests in the unadministered estates of Emily, William and WJV. 11 The beneficiaries of Bessie's estate were Roy William Veney ("Roy") – Ms Buchanan's father – and Ken George Veney ("Ken"), each of whom therefore had interests in the unadministered estates of Emily, William, WJV, George and Bessie. 12 Ken died on 20 September 1997 and Probate of his will was granted to his sole beneficiary, his widow, Nola. 13 As executor of Bessie's estate, Ms Buchanan had to investigate the assets and interests in these estates. In the course of her investigations, she discovered that WJV had died possessed of real estate assets which were unknown to Ms Gibson as executor of the estate of WJV's widow, Gladys. Because the administration of Bessie's estate was inextricably intertwined with the administration of WJV's estate, Ms Buchanan sought and was granted Letters of Administration of WJV's estate on 10 September 1999. 14 Ms Gibson's complaint of inexcusable delay on the part of Ms Buchanan in administering WJV's estate now focuses on four matters, although, properly speaking, they may be compressed under two headings. 15 First, Ms Gibson says that distribution from WJV's estate has been inexcusably delayed by the dilatory fashion in which Ms Buchanan and her solicitors have dealt with a foreshadowed claim against the estate by Ms Buchanan's father, Roy. 16 Second, Ms Gibson says that in dealing with her father's claim, or foreshadowed claim against the estate, Ms Buchanan has endeavoured to advance that claim at the expense of the estate, and this in itself has lead to unjustifiable delay in administration. 17 Third, Ms Gibson says that Ms Buchanan has failed to ascertain with due expedition the capital gains tax liability which attaches to real property which she has sold in the course of administering WJV's estate. 18 Fourth, Ms Gibson says that Ms Buchanan has manifested an intention to neglect her duties as administrator by selling a property at Sussex Inlet which was an asset of WJV's estate before she had actually obtained administration of that estate. 19 The principles upon which the Court acts in determining whether to remove an executor or administrator of an estate are well known and require no further elaboration. They are discussed in cases such as Mavrideros v Mack (1998) 45 NSWLR 80 and Bates v Messner (1967) 67 SR NSW 187. 20 For the purposes of this case, I need only refer to the principles set out in Mavrideros v Mack as follows: "In exercising the discretion to revoke a grant of probate, the question is whether the due and proper administration of an estate has been put in jeopardy or has been prevented by acts or omissions of the executor, or by matters personal to the executor, or by other matters establishing that the executor is not a fit and proper person to carry out the duties that the executor has sworn to perform." 21 At the heart of the exercise of the discretion, of course, is the protection of the interests of the estate and those entitled to benefit from it. I turn now to examine the circumstances relevant to the various complaints made by Ms Gibson. 22 The circumstances relevant to the claim against the estate foreshadowed by Roy may be summarised thus. On 14 March 2001 Ms Buchanan's solicitors wrote to Ms Gibson's solicitors advising that Roy intended to make a claim against the estate. This had been foreshadowed in earlier correspondence between the parties and their solicitors. Roy had had separate solicitors acting for him and they had also been in communication with Ms Buchanan's solicitors. 23 In the letter of 14 March 2001, Ms Buchanan's solicitors said that in the light of the claims that had been made by Roy and the fact that there was evidence to corroborate the alleged agreement between George and Gladys: "… the prudent thing to do is to hold back any possible entitlement Shirley Gladys Gibson may have in the estates until the issues have been resolved by Court or by agreement. As the estate funds are invested your client will not be prejudiced by any brief delay." 24 I should add that the claim foreshadowed by Roy was a claim that Gladys had agreed to give up her interest in the estate of WJV. If that claim had succeeded then of course Ms Gibson, as beneficiary of Gladys's estate, could have no claim against the estate of WJV. 25 On 19 March 2001, the solicitors for Roy wrote to Ms Gibson's solicitors confirming that they had requested Ms Buchanan's solicitors to refrain from distributing funds in the estate to Ms Gibson pending resolution of proceedings in the Supreme Court which Roy intended to commence. The solicitors suggested the advisability of some family compromise. 26 The solicitors for the parties corresponded backwards and forwards enquiring as to whether Roy intended to commence proceedings. For example, on 8 May 2001 Roy's solicitors wrote to Ms Buchanan's solicitors advising that counsel had been instructed to draw documents to be filed in Court seeking the relief which Roy claimed. By letter dated 27 July 2001, Ms Buchanan's solicitors advised Ms Gibson's solicitors that, according to the advice of Senior Counsel, the estate should not be distributed until Roy's claims against it had been litigated. 27 On 10 September 2001 Ms Buchanan's solicitors wrote to Roy's solicitors noting that Roy had not yet commenced proceedings to vindicate the claim which he was making against the estate. They noted that the distribution of the estate was impeded and prevented pending resolution of Roy's claims and concluded: "In the circumstances we must put you on notice that unless proceedings have been commenced within 14 days from the date of this letter, we will seek instructions to once and for all distribute the remainder of the estate." 28 On 29 November 2001, Ms Buchanan's solicitors wrote to Ms Gibson's solicitors noting that Roy was contesting the entitlement of Ms Gibson to benefit from the estate of WJV and suggested that Roy's claim might be resolved if he were to be compensated for: "His significant efforts over many years in maintaining the various properties that comprise the estate."