Lawless v Donaldson; Estate of Donaldson [2012] NSWSC 570

Supreme Court New South Wales

Medium Neutral Citation: Lawless v Donaldson; Estate of Donaldson [2012] NSWSC 570 Hearing dates: Monday, 21 May 2012 Decision date: 21 May 2012 Jurisdiction: Equity Division - Probate List Before: White J Decision: Refer to paras [14], [16], and [17] of judgment. Catchwords: WILLS, PROBATE AND ADMINISTRATION - probate - application for revocation of probate - where due and proper administration of estate prevented by omissions of one of two executors in office - failure to comply with duties as an executer to realise the assets with reasonable diligence to enable debts to be paid and distributions made - defendant not a fit and proper person to carry out the duties of executor - form of orders - existing grant of probate revoked - probate granted to plaintiff alone Legislation Cited: Local Government Act 1993 Cases Cited: Bates v Messner (1967) 67 SR (NSW) 187 Mavrideros v Mack (1998) 45 NSWLR 80 Category: Interlocutory applications Parties: Lynette Anne Lawless (Plaintiff in 2010 proceedings) Alan John Donaldson (Defendant) Representation: Counsel: J Trebeck (Plaintiff) A Hill (Defendant) Solicitors: Lucas & Associates (Plaintiff) Armstrongs Solicitors (Defendant) File Number(s): 2010/274165; 2012/113956

Judgment 1HIS HONOUR: These proceedings concern the estate of Lorna June Donaldson, who died on 9 April 2010. By her last will of 15 October 2003, the deceased appointed the plaintiff and the defendant as the executors and trustees of her estate. After some pecuniary legacies, she left the residue of her estate to the plaintiff and the defendant in equal shares. Probate of the will was granted on 25 August 2010. 2This is an application by the plaintiff to revoke that grant and for an order that probate of the deceased's will be granted to the plaintiff alone. In substance, the application is for the removal of the defendant as one of the executors. 3The plaintiff and the defendant are sister and brother. The principal asset of the estate is a property in Fishing Point, New South Wales. Apart from that property, the estate consisted of only a cash sum of approximately $2,876. The defendant was in occupation of the Fishing Point property for more than 10 years before his mother's death. 4After the deceased's death, the plaintiff has endeavoured to obtain the defendant's agreement for the doing of those steps that have to be done for the property to be sold. The Fishing Point property has to be sold not only because the plaintiff is beneficially entitled to half of the estate, but also because there are testamentary expenses which have to be paid from the estate. 5The defendant states in his defence that he has not resisted attempts to sell the property and has not refused to vacate the property, but has rather expressed his willingness to do so. Notwithstanding those averments, the defendant has done nothing to allow the property to be sold. 6On 14 October 2010 the solicitor retained to act for the estate, Ms Lucas, wrote to the defendant, asking him to make an early appointment to discuss what needed to be done to prepare the property for sale and for the finalisation of the estate. Ms Lucas expressed concern about the consequences of not proceeding with the sale in a timely fashion and reminded the defendant of his duty as an executor and his having sworn to administer the estate according to law. 7It is the executors' duty to realise the assets with reasonable diligence to enable the debts to be paid and distribution to be made to beneficiaries. Notwithstanding further correspondence from Ms Lucas and repeated attempts to communicate with the defendant, he has not co-operated, as he was bound to do, in selling the property. He is in occupation of the property, but has not paid rent or otherwise paid an occupation fee, notwithstanding that occupation. In not doing so, he is profiting from the trust; something that, as an executor, he is not entitled to do. 8The property is in extensive disrepair. The Lake Macquarie City Council has given notice of its intention to serve an order under s 124(21) of the Local Government Act 1993, requiring the slashing or mowing of grass and weeds and the removal of all excess debris. The letter advising that intention states that the land is not in a healthy condition, there being excessive growth of vegetation consisting mainly of grass and weeds, which has reached a height of up to a metre. Various repairs need to be made to the fabric of the house. The plaintiff has incurred expenses in relation to the maintenance of the property. Expenses have been incurred in relation to a dispute with a neighbour regarding the removal of a tree from the property. That was resolved only through the plaintiff's intervention and payment of necessary costs for removal of the tree. 9There is a strong suggestion in the evidence that the defendant may be suffering from depression or other health problems which make it difficult for him to deal with these issues. Whilst one might feel some sympathy for the defendant if this is so, it is not a reason for the defendant to continue to have responsibility for the administration of the estate. As the due and proper administration of the estate is being prevented by reason of the defendant's omissions, whether or not that is due to mental infirmity, it is established that he is not a fit and proper person to carry out the duties he has sworn to perform (Bates v Messner (1967) 67 SR (NSW) 187 at 191-192; Mavrideros v Mack (1998) 45 NSWLR 80 at 102, 108). 10It is inevitable that the property will have to be sold. For that to be done and for vacant possession to be given to a purchaser, it will be necessary for the defendant to remove his belongings. The plaintiff does not today seek an order for possession. Upon orders being made which will vest the estate in her as sole executor, she will be entitled to possession of the property. However, counsel for the plaintiff correctly accepts that as the relief claimed in these proceedings includes liberty to apply for an order for possession, the plaintiff could not by extra-curial means force the defendant to vacate. However, in the interests of minimising the costs for the estate, the defendant should appreciate that he will be bound to vacate. 11The costs of this application will have to come from the defendant's share of the estate if that order is sought. The defendant should appreciate that if the plaintiff is put to the costs of obtaining orders for possession, those costs may well also have to come from his share of the estate. 12A question was raised as to whether the appropriate order is for the revocation of the existing grant and the making of a fresh grant of probate to the plaintiff alone, or whether an order should be made for the removal of the defendant as executor. This is not a matter of substance. It will make no difference which form of order is made. The relief sought in the statement of claim is for the revocation of the existing grant and for the making of a new grant of probate to the plaintiff alone. Counsel for the defendant submitted that if the plaintiff was entitled to the substantive relief sought, that would be the appropriate form of order. I will proceed accordingly. 13 The plaintiff and the defendant have become registered as the proprietors of the property. I understand that a transmission application was lodged and that they presently hold the legal title to that property in their capacity as executors, the estate not being fully administered. I will make a vesting order as sought in the statement of claim, to provide for that property to vest in the plaintiff as sole executor, to be held on the trusts of the will. 14For these reasons I make the following orders, subject to any submissions that counsel may have as to the terms of the orders to be made: 1. Order that the grant of probate made in proceeding 2010/274165 on 25 August 2010 to the plaintiff and the defendant of the will dated 15 October 2003 of the late Lorna June Donaldson be revoked. 2. Order that probate of the said will be granted to the plaintiff. 3. Order that the proceedings be remitted to the Registrar to complete the grant. 4. Order that the property in the estate presently held by the plaintiff and the defendant as co-executors vest in the plaintiff as sole executor. 5. Make order 4 in accordance with the statement of claim. 15I will hear the parties as to the appropriate costs orders. [Parties address.] 16In relation to costs, the defendant must be liable for the costs of this proceeding. The proceeding has become necessary because of his failure to comply with his duties as executor. The plaintiff is entitled to her costs on the indemnity basis. As earlier indicated, those costs must be borne out of the defendant's share of the estate. I make the following further orders: 6. Make orders 5 and 6 as sought in the statement of claim. [Parties addressed in relation to a related application for family provision orders.] 17In proceeding 2012/113956: 1. I order that the plaintiff in those proceedings serve the affidavit or affidavits to be relied upon by no later than 6 June 2012. 2. Direct that by 20 June 2012 the defendant to those proceedings serve any affidavit to be relied upon. 3. Make the usual order for hearing and abridge the time for the provision of documents required by the usual order for hearing to Friday, 22 June 2012. 4. List proceeding 2012/113956 together with any application that might be made in proceeding 2010/274165 for hearing before me on 25 June. 18I note that the plaintiff foreshadows that she will be applying for orders in accordance with the liberty reserved by the preceding orders; that is to say for orders for possession. I also note that the court book used on this application can be used on the hearing on 25 June and further documents can be added by way of supplementation to that court book. The matter is fixed for hearing on 25 June. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 May 2012