Sleiman v Alwan [2009] NSWSC 484

New South Wales Supreme Court

CITATION : Sleiman v Alwan [2009] NSWSC 484

HEARING DATE(S) : 16 February; 3 March 2009

JUDGMENT DATE : 4 June 2009

JURISDICTION : Equity Division

JUDGMENT OF : Young JA

DECISION : Order that probate granted to the defendant be revoked. Order that Public Trustee be appointed administrator cta subject to his consent.

CATCHWORDS : SUCCESSION [258]- Order for removal of executor- When made.

LEGISLATION CITED : Probate and Administration Act 1898, s 93

Chellew v Excell [2009] 1 NZLR 711 Holder v Holder [1968] Ch 353 Hordern v Hordern [1910] AC 465 CASES CITED : Morgan v MacRae [2001] NSWSC 1017 Re One.tel Networks Holdings Pty Ltd (2001) 40 ACSR 83 Rutter v McCusker [2008] NSWSC 1289 Upton v Downie [2007] NSWSC 1095 Vyse v Foster (1874) LR 7 HL 318

PARTIES : Marta Antonios Sleiman (P) Sajih Alwan (D)

FILE NUMBER(S) : SC 5993/06

COUNSEL : N Obrart (P) J Jobson (D)

SOLICITORS : Webb Lawyers (P) Baldock Stacy & Niven (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG JA

Thursday 4 June 2009

5993/06 – SLEIMAN v ALWAN JUDGMENT 1 HIS HONOUR: Wajih Antonios Alwan (the deceased) died on 1 June 2002. The deceased made and published his last will on 9 January 1992. Probate of that will was on 18 November 2002 granted to the defendant who was a brother of the deceased and was the executor named in the will. The deceased left an estate with a gross value of $1.95 million with a net value of $1.28 million. 2 The basic provisions of the will were that the deceased gave $10,000 to various children of his brothers and sisters and then gave the remainder upon trust for the defendant, the plaintiff, one of his sisters, another brother, another two sisters and a sister-in-law as tenants in common in equal shares, ie one-sixth of the residue each. 3 On 1 June 2004, the plaintiff's solicitors wrote to the solicitors for the defendant to the effect that: "There appears to be a number of discrepancies between what was offered to the beneficiaries and what is noted in trust account statements and the Summons [for probate]." 4 The plaintiff's solicitors put 17 questions to the defendant's solicitors. They noted that the defendant contended that the plaintiff was only entitled to $141,238.99 for her one-sixth share of the estate, but that the defendant had received $15,000 more than that for his one-sixth share, and also appeared to have purchased the estate property at an under value. The plaintiff's solicitors indicated that she would be prepared to accept $860,265 in lieu of what was offered to her. 5 The defendant's solicitors answered the plaintiff's letter by way of a letter dated 10 June 2004, not however to the plaintiff's solicitors' satisfaction and mentioned that the defendant and his family were very close to the deceased, there had been many mutual dealings between the parties and that the deceased had in fact owed the defendant considerable sums of money. They also revealed that an estate property had been sold, allegedly for full value, to the executor. 6 There was further correspondence, but no satisfaction and on 24 August 2006, the defendant's solicitors formally called on the plaintiff under s 93 of the Probate & Administration Act 1898, to commence proceedings to enforce any claim the plaintiff had within three months and to prosecute that claim. 7 The plaintiff issued a summons filed on 27 November 2006. An amended summons of 9 February 2007 seeks that the defendant be removed as executor and trustee and that two of the plaintiff's solicitors be appointed trustees of the estate in his place and that accounts be taken on the basis of wilful default. 8 During 2007 and 2008 there were interlocutory skirmishes based on a very searching subpoena and notice to produce issued by the plaintiff. During those interlocutory proceedings the possibility was canvassed that the Public Trustee might take over the estate. On 21 March 2007, the Public Trustee declined voluntarily to accept administration of the estate. 9 On 23 June 2008, a notice of motion was heard by Associate Justice McLaughlin by the defendant to strike out the proceedings. The transcript of that hearing shows that the defendant filed a motion on 23 November 2007 for the proceedings to be dismissed on two grounds: (a) that the plaintiff's solicitor had no authority to commence them; and (b) that they had not been prosecuted with due despatch. 10 As to the first ground, the Associate Judge was concerned that a lot of time had been wasted in challenging the fact that the plaintiff had given her daughter a power of attorney which may not have been effective under NSW law. This was quite irrelevant because the solicitor had personally been instructed by the plaintiff by telephone and told that her daughter would provide the details. 11 As to the second ground, the Associate Judge was not at all impressed with the way in which the plaintiff had progressed the case, but gave her a further opportunity to get the thing in order. He ordered the plaintiff to pay costs. 12 The case was then referred to Justice Hammerschlag as List Judge and his Honour fixed the hearing of the case for three days before me commencing on 16 February 2009. 13 When the matter came before me it had really progressed no further. However, it was futile to allow the case to proceed on the evidence available, but it was clear that it was not vexatious because of the prima facie voidable transaction to which I have already referred. The way forward, accordingly, was to appoint a new executor or trustee and then, under the supervision of a capable person, it could be seen whether there were specific items that needed to be investigated in a cheap and efficient manner. 14 I made orders on that occasion appointing the Public Trustee as the new trustee of the estate on the basis that I was told all the executorial duties save the final distribution and the settling of accounts had been done. I made orders dealing with the costs of both parties up to 7 May 2007 (the date when the defendant had agreed that the Public Trustee should take over the estate), and stood over matters as to costs to 3 March 2009. 15 It was not, as far as I remember, brought to my attention that the Public Trustee had already declined voluntarily to take over the estate, although that information is disclosed in Mr Webb's affidavit of 22 February 2008. 16 I made provision to allow the Public Trustee to be heard before the order was taken out. Correspondence has since been received from the Public Trustee which suggests that despite his earlier declining not to be involved, he is prepared to be involved at this stage. However, it is regrettable that it was not brought to the Court's attention as to the attitude the Public Trustee had taken in 2007. Be that as it may, the situation now is that the Public Trustee is prepared to take over the administration of the estate if that is the Court's wish. 17 The case has, of course, not finished. All that has really happened is that it has been put in some form of logical order. What the plaintiff wanted to do was to spend three days going through a whole series of matters dealing with the conduct of the estate by the defendant without any isolation of the real problems. 18 As I pointed out during discussion with counsel on 3 March, the proper way of proceeding is to have the defendant file accounts, work out (either by the traditional process of surcharges and falsifications or by some more informal manner), what matters are in dispute, and then have an associate judge or one of the ordinary judges decide those items. 19 It would appear that when probate was granted there was no special order for the executor to file accounts. Thus, if the plaintiff as a beneficiary wants an account she must show that she has a right to obtain an account. As appears in Jacobs' Law of Trusts in Australia 7th ed (LexisNexis Butterworths, Australia, 2006) [1714]: "If a beneficiary asks for accounts or for information, the trustees are entitled to be paid by the beneficiary the cost of supplying the accounts or information and if they choose, may require payment in advance."