Farlow v Fincher; Estate of Fincher [2012] NSWSC 1515

Supreme Court New South Wales

Medium Neutral Citation: Farlow v Fincher; Estate of Fincher [2012] NSWSC 1515 Hearing dates: Monday, 3 December 2012 Decision date: 03 December 2012 Jurisdiction: Equity Division - Probate List Before: White J Decision: Orders in accordance with the short minutes of order. Catchwords: WILLS, PROBATE AND ADMINISTRATION - due and proper administration of estate prevented by omissions of one of two executors in office - existing grant of probate revoked - grant of probate to plaintiff alone Cases Cited: Mavrideros v Mack (1998) 45 NSWLR 80 Lawless v Donaldson, Estate of Donaldson [2012] NSWSC 570 Baird v Logan [2008] NSWSC 1029 Category: Principal judgment Parties: Heather Margaret Farlow (Plaintiff) Trevor Ronald Fincher (Defendant) Representation: Counsel: J Curtin (Plaintiff) Solicitors: Hughes & Taylor (Plaintiff) File Number(s): 2012/298408

Judgment 1HIS HONOUR: This is an application for the revocation of a grant of probate and consequential orders. It concerns the estate of Eileen Annie Fincher, who died on 1 March 2009 aged 85. 2By her will, dated 23 June 1997, the deceased appointed her son, Mr Trevor Fincher, and her daughter, Ms Heather Farlow, as the executors and trustees of her will. 3After certain specific legacies to each of them, the deceased left the residue of her estate to her son and her daughter in equal shares. Probate of that will was granted to the plaintiff and the defendant on 5 November 2009. 4In their joint affidavit seeking a grant of probate, both the plaintiff and the defendant swore that if probate were granted to them, they would administer the estate according to law. 5The principal asset of the estate is a property located in Tathra, New South Wales. The plaintiff and the defendant have become registered as the proprietors of that property pursuant to a transmission application. Money in the bank accounts has been distributed to the plaintiff and the defendant equally after the payment of debts and testamentary expenses. 6The defendant moved into the property in about May 2010. Since the deceased's death the plaintiff has paid for the outgoings associated with the property, including insurance, council and water rates. For more than two years the plaintiff has been endeavouring to persuade the defendant to take the necessary steps to complete the administration of the estate. The outstanding matter is the realisation of the Tathra property. 7On 9 August 2010 the plaintiff's solicitor, Bray Jackson & Co, wrote to the defendant asking him to contact their firm urgently in relation to the real estate. On 10 November 2010, Clark Rideaux, solicitors, who had acted for both parties on the obtaining of the grant of probate, wrote to the plaintiff. They advised they had written to the defendant on several occasions asking for his instructions on how the Tathra property was to be dealt with, but had not received a response. 8On 18 August 2011, the plaintiff wrote to the defendant in relation to the property. She put various proposals in relation to dealing with the property, including an offer that she buy the defendant's 50 per cent share of the property at a reasonable agreed price, or, alternatively, for the house to be sold and the net proceeds of the sale to be divided equally in accordance with the will. 9She advised that if the defendant refused or further prolonged his decision, she would not hesitate to apply to the Court for the power to sell the property. 10On 25 November 2011, her new solicitors, Hughes & Taylor, again wrote to the defendant. They stated that it was the plaintiff's wish that the property at Tathra be sold, or, alternatively, that there be a buyout of the interest of one of the parties by the other. They said, despite a number of approaches, the defendant refused to co-operate in relation to the sale or buyout, but continued to occupy the property and the defendant had not made payments in respect of outgoings. They foreshadowed the commencement of proceedings if there were no substantive response. 11A further demand threatening proceedings if the defendant did not co-operate in respect of the sale of the property was made on 16 January 2012. The defendant did not respond to this correspondence. These proceedings were commenced on 25 September 2012. The defendant was personally served on 27 September 2012. The matter first came before the Registrar on 8 October 2012, when it was stood over to 5 November 2012. 12The plaintiff's solicitor was directed to advise the defendant of the adjourned date. A notice of listing was sent to the defendant on 8 October 2012. He appeared on the adjourned date, although he has not filed a notice of appearance. On that day the Registrar ordered the defendant to serve his evidence by 26 November 2012 and the proceedings were stood over to today. 13There has been no appearance by the defendant today. The Court endeavoured to make contact with him on a mobile telephone number provided by the plaintiff's solicitor, but his phone was not answered. There is no explanation for his non-appearance, save that I was informed that on Friday, 30 November and Sunday, 2 December the defendant contacted the plaintiff and asked for the matter to be mediated. The plaintiff, I was informed, rejected that proposal. 14Counsel for the plaintiff has handed up a copy of an affidavit of the defendant dated 29 November 2012, which I have marked as an exhibit and read on the application. The substance of the defendant's position, as expressed in that affidavit, is that the will gives the executors a discretion as to when the house is to be sold, that he had been living in the house on and off with his mother before her death and that he does not want the house sold, if at all possible, as he would like to purchase it and remain living there. 15The defendant gives no evidence of having made any proposal to the plaintiff for the purchase of her interest in the property. Nor does he provide in his affidavit any explanation for his failure to co-operate with the plaintiff in administering the estate. 16There is some evidence that the property is falling into a state of disrepair. The defendant does not appear to have paid rent or any other occupation fee for the benefit of the estate whilst he has benefited from his occupation of the property. 17There is inherent jurisdiction to remove an executor. That jurisdiction is to be exercised having regard to whether or not an executor's failure has put the due and proper administration of the property in jeopardy; whether that be by reason of matters such as ill health or mental infirmity, or the proof of other facts which establish that the executor is not a fit and proper person to carry out the duties he or she has sworn to perform (Mavrideros v Mack (1998) 45 NSWLR 80 at 108). 18It is the duty of executors to realise the assets with reasonable diligence, both so as to repay any debts of the deceased, and also to enable distribution to be made to beneficiaries. I am satisfied that the defendant, by his inaction, has shown that he is not a fit and proper person to carry out the duties of executor. He has not adhered to the promise he made on oath when he applied for a grant of probate, that he would administer the estate according to law. 19As counsel for the plaintiff observed, the facts of this case are indistinguishable in principle from those in Lawless v Donaldson, Estate of Donaldson [2012] NSWSC 570 in which, earlier this year, I revoked a grant in order to make a fresh grant to one of two co-executors where one executor occupied the property of the estate and refused to carry out his duties. 20In Baird v Logan [2008] NSWSC 1029, Palmer J observed (at [19]): "An obdurate refusal to do something necessary for the administration of the estate without sufficient reason for that refusal is a circumstance in which the Court can use its power." 21 The property is currently registered in the names of both parties. I will make a vesting order to provide for the property to vest in the plaintiff as sole executor to be held on the trusts of the will. 22No question was raised as to whether I should make an order directly removing the defendant as executor, or whether I should revoke the existing grant and make a fresh grant to the plaintiff alone. The plaintiff seeks orders in the latter form. It makes no difference in substance which approach is taken and I will make those orders as sought. 23The plaintiff seeks an order that the defendant pay the plaintiff's costs on the indemnity basis, and if they cannot otherwise be recovered, that such costs be paid out of the defendant's share of the estate. The costs of these proceedings have been occasioned by the defendant's breach of his duties as executor. There is no reason that the plaintiff should be out of pocket by reason of that breach. 24I will make those orders. 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: 12 December 2012