Esplin v Timms [2010] NSWSC 339

New South Wales Supreme Court

CITATION : Esplin v Timms [2010] NSWSC 339

HEARING DATE(S) : 6 & 21 April 2010

JUDGMENT DATE : 27 April 2010

JURISDICTION : Equity Division, Probate

JUDGMENT OF : Tamberlin AJ

DECISION : Grant of probate revoked. New administrator to be appointed. Plaintiffs to bring in Short Minutes of Order.

CATCHWORDS : PROBATE – revocation of grant of probate – failure to act in accordance with the terms of the will – duty to account by administrator for period of administration – PROBATE – application for appointment of replacement administrator – duty to account to estate for benefits received by plaintiff beneficiaries – whether the duty to account constitutes sufficient conflict of interest to refuse application for appointment – whether appointment of independent administrator preferred – PROBATE – whether vesting order necessary to transfer land to replacement administrator

CATEGORY : Principal judgment

Bates v Messner (1966) 67 SR (NSW) 187 CASES CITED : Labraga v Pomfret [2005] NSWSC 973 Mavrideros v Mack (1998) 45 NSWLR 80 Morgan v MacRae [2001] NSWSC 1017

Kari Anne Esplin (First Plaintiff) PARTIES : Nicholas John Timms (Second Plaintiff) Terence Henry Charles Timms (Defendant)

FILE NUMBER(S) : SC 2009/311272

COUNSEL : P Lane (Plaintiffs) No Appearance (Defendant)

SOLICITORS : PA Tierney, Bega (Plaintiffs) No Appearance (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

TAMBERLIN AJ

27 APRIL 2010

112572/09 KARI ANNE ESPLIN & ANOR v TERENCE HENRY CHARLES TIMMS JUDGMENT 1 HIS HONOUR: By Amended Statement of Claim the plaintiffs seek orders that probate of the Estate of the late Marie Timms ("the Estate"), in favour of the defendant, Terence Charles Timms, be revoked; that the defendant verify and file accounts in respect of his administration; that the plaintiffs be appointed as administrators de bonis non of the Estate; and that certain land be vested in the plaintiffs as administrators. The plaintiffs also seek an order as to costs. 2 The original Statement of Claim, seeking a grant of administration to the plaintiffs, was filed on 23 July 2009. There has been no appearance filed nor have any steps been taken by the defendant to either oppose or participate in these proceedings. The defendant did not appear when the matter was called on for hearing. I am satisfied, however, having regard to the affidavits filed, that the defendant is aware of the proceedings and of its hearing today. Background 3 The deceased, Marie Timms, died on 6 December 1994 leaving property in New South Wales. The first plaintiff, Kari Anne Esplin, is a daughter of the deceased and the second plaintiff, Nicholas Timms, is a son of the deceased. The defendant is also a son of the deceased. In addition the deceased had two other sons, Michael and Roger, each of whom survived her. As at the date of the deceased's death both Michael and Roger had been, or were, bankrupt. 4 Probate of the will of the deceased was granted to the defendant, as sole executor, on 15 July 1996. At the time of the grant of probate the estate of the deceased was estimated to be worth $3,998,590.00. Under the will the deceased bequeathed the whole of the estate to her trustee on trust to sell, call in and convert into money but with power to retain the trust assets in their present state; to hold the proceeds upon trust to pay expenses and debts; and thereafter to hold the proceeds from its sale on trust as to one twenty percent share for the defendant and each of the two plaintiffs. Another twenty percent share was to be held on trust for two infant grandchildren of the deceased, Kenneth Timms and Julian Timms, provided they attained the age of 18 years. These funds would be held as tenants in common in equal shares. The remaining twenty percent share was to be held on the same terms for four other infant grandchildren. As at the date of the deceased's death, none of the grandchildren beneficiaries had attained the age of 18 years. 5 The bulk of the deceased's estate consisted of assets in the form of land situated in Eden, New South Wales ("the land"), valued at around $3.8m. 6 The powers and duties of the defendant, as executor and trustee, under the will, included a power to invest, to change investments and to borrow money and use it for any purpose for which the capital could be used. The defendant was given power to carry on any business in which the deceased had been engaged, and to acquire property and perform other commercial actions in relation to any such business. However, as at the date of her death, the deceased was not engaged in any business which would enliven this power. The defendant, as executor and trustee, has a duty to act impartially in the interests of the beneficiaries as a whole and to conserve the assets of the estate. The defendant did not have authority to borrow or sell, save for the purpose of realising the assets of the estate. Revocation of Grant 7 The Court has inherent jurisdiction to revoke a grant of probate. This jurisdiction is exercisable by reference to the principle that the Court must have regard to what is necessary and appropriate to the due and proper administration of the estate, in the interests of the parties beneficially entitled thereto. In Bates v Messner (1966) 67 SR (NSW) 187 at 191 Asprey JA (with whom Herron CJ and Sugerman JA agreed), said: "I am of the opinion that the essential basis of the exercise of the court's inherent jurisdiction to revoke a grant of probate is that emphasised by Jeune P, namely, that the real object which the court must always keep in view is the due and proper administration of the estate in the interests of the parties beneficially entitled thereto on the part of the person to whom and by whose oath as to the faithful performance of his duties the court has been induced to entrust the office of executor ... I shall make no attempt to define all circumstances which may attract the exercise of the court's jurisdiction, but where circumstances clearly appear to have arisen after a grant of probate which impel the court to the firm conclusion that the due and proper administration of an estate has either been put in jeopardy or has been prevented either by reason of acts or omissions on the part of the executor or by virtue of matters personal to him, for example mental infirmity, ill health, or by virtue of the proof of other matters which establish that the executor is not a fit and proper person to carry out the duties which he has sworn to the court that he will perform, the court may exercise its inherent jurisdiction to revoke the grant ." (emphasis added)