Goodsall v Keen - Estate of Sydney Arthur Keen [2006] NSWSC 1143

New South Wales Supreme Court

CITATION : Goodsall v Keen - Estate of Sydney Arthur Keen [2006] NSWSC 1143

HEARING DATE(S) : 30 October 2006

JUDGMENT DATE : 30 October 2006

JURISDICTION : Equity Probate List

JUDGMENT OF : Campbell J

EX TEMPORE JUDGMENT DATE : 10/30/2006

DECISION : Application for appointment of administrator pendente lite refused, but with liberty to restore. Order for segregation of money accruing due to estate

CATCHWORDS : SUCCESSION – EXECUTORS AND ADMINISTRATORS – administration – administrator pendente lite – when appointed – orders short of appointment of administrator pendente lite to enable specific practical problem to be dealt with.

LEGISLATION CITED : Wills, Probate and Administration Act 1898

CASES CITED : Horrell v Witts and Plumley (1866) LR 1 P & D 103

PARTIES : Paul Millington Goodsall - Plaintiff/Applicant Timothy Garth Keen - Defendant/Respondent

FILE NUMBER(S) : SC 102244/06

COUNSEL : E Cox - Plaintiff M Willmott SC; R Potter - Defendant

SOLICITORS : Gillis Delaney Lawyers - Plaintiff Teece Hodgson & Ward - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROBATE LIST

CAMPBELL J

MONDAY 30 OCTOBER 2006

102244/06 PAUL MILLINGTON GOODSALL v TIMOTHY GARTH KEEN – ESTATE OF SYDNEY ARTHUR KEEN JUDGMENT – Ex Tempore 1 HIS HONOUR: This is the hearing of a Notice of Motion which seeks amongst other things the appointment of an administrator pendente lite of a deceased estate. The estate is that of the late Sydney Arthur Keen, who died on 1 July 2005. There is a contest about the capacity of the deceased at the time he executed his last will. 2 The deceased was the proprietor of a private hospital. That hospital was conducted through a company, Hirondelle Private Hospital Pty Limited. That company had 100 shares, of which 99 were held by the deceased, and the remaining share was held by the deceased's son, Mr Timothy Keen. 3 In the years shortly before the death of the deceased most of the practical decisions about the operation of the hospital had been taken by Mr Timothy Keen. 4 The substantial assets of the estate are some parcels of land at Chatswood on which the hospital is conducted, a home at Killara, and the shares in Hirondelle Private Hospital Pty Limited. There is also a Rolls Royce motorcar, and various other smaller assets. 5 Since the death of the deceased the company has been continuing to conduct the hospital. Prior to the death of the deceased the company paid him rental, at the rate of $20,000 plus GST per month, for the premises. As well, it made substantial distributions to him. In the year ended 30 June 2005 dividends of some $280,000 were paid to him. 6 Since his death the hospital has continued to be operated, under the management of Mr Timothy Keen, and the Director of Nursing of the hospital, who is a longstanding employee. 7 There have been some unusual transactions, in that tax invoices, purportedly issued on behalf of the estate, have been sent to the company for the monthly rentals. As well, it is not altogether clear, on the documentation which has been produced today, exactly what has happened concerning some transfers of funds from the company's bank account, apparently to a term deposit. However, there has been no material put before me today which suggests that any money or other assets have disappeared. 8 The appointment of an administrator pendente lite, under section 73 Wills Probate and Administration Act 1898, is made only when there is sufficient reason to do so. In Horrell v Witts and Plumley (1866) LR 1 P & D 103, Sir J P Wilde declined to appoint an administrator pendente lite when the deceased was a partner in a business, and the partnership business was being operated by the surviving partner. 9 In my view, there is insufficient reason to appoint an administrator pendente lite on the basis of the evidence before me at the moment. 10 Having said that, however, it is desirable for information about the operation of the hospital business to be made available, so that the manner of operation remains transparent. 11 It is necessary to regularise the manner in which rental is paid. That can be dealt with by an order short of appointment of an administrator pendente lite. I order that until the hearing of the suit, or further order, the defendant cause the rental accruing due from Hirondelle Private Hospital Pty Limited to be paid into a separate account, maintained in the name of that company, and invested at a rate of interest which is the highest obtainable from the bank with which the company customarily deals for deposits of less than 12 months. The intention is that that account be held on trust for the estate. 12 Since the death of the deceased, there have been no dividends paid to the estate. That is hardly surprising, when there is nobody who has been appointed who could receive those dividends. Indeed, the evidence does not establish whether the directors have yet made any decision about declaration of a dividend from the profits accruing during the year ended 30 June 2006. 13 In my view the preferable way to deal with the desirability of there being transparent administration of the company is to stand over the present Notice of Motion to the trial, and grant liberty for it to be restored on seven days notice. Without restricting the circumstances in which that liberty could be exercised, one such circumstance is if the plaintiff does not get answers which he considers satisfactory to reasonable questions which he asks relating to the administration of the hospital. 14 I order that the Notice of Motion stand over to the trial, and grant liberty for it to be restored on seven days notice. 15 I will reserve the costs of today's application. I indicate that those costs may be dealt with by the Trial Judge, as the basis upon which the application has been dealt with today emerges from these reasons for judgment. 16 I order that the exhibits be returned. **********