Steiner v Strang [2015] NSWSC 14

Supreme Court New South Wales

Medium Neutral Citation: Steiner v Strang [2015] NSWSC 14 Hearing dates: 28 January 2015 Decision date: 03 February 2015 Jurisdiction: Equity Division - Duty List Before: Ball J Decision: The plaintiff's application for interim distribution pursuant to s 84 of the Probate and Administration Act be dismissed with costs. Catchwords: WILLS AND ESTATES – application for interim distribution pursuant to Probate and Administration Act 1898 (NSW), s 84 – whether sufficient funds available in estate to make interim distribution – where estate has a number of unquantified liabilities – where separate proceedings on foot with potential to affect size of estate – where claimant unable to repay any amount distributed to it in the event of over distribution Legislation Cited: Probate and Administration Act 1898 (NSW), s 84 Succession Act 2006 (NSW), s 62(1) Cases Cited: John Steiner v Kenneth Ross Strang and Jason Tang [2014] NSWSC 1250 Gonzalez v Claridades [2003] NSWSC 508; (2003) NSWLR 188 Category: Procedural and other rulings Parties: John Steiner (Plaintiff) Kenneth Ross Strang (First Defendant) Jason Tang (Second Defendant) Representation: Counsel:

R Jefferis (Plaintiff) L Ellison SC (Defendants)

Solicitors:

Gells Lawyers (Plaintiff) Glass Goodwin (Defendants) File Number(s): 2012/185566

Judgment 1. Before the Court is an application by the plaintiff, one of the beneficiaries of the Estate of Dorothy Margaret Steiner (the plaintiff's mother), that the defendant executors make further distributions of such amount of the plaintiff's pecuniary legacy as the Court thinks proper. 2. The application was originally foreshadowed to the Court at the time the plaintiff made an application for leave to serve on short notice a notice of motion seeking the order. That leave was granted and the notice of motion was made returnable on 28 January 2015. It appears, however, that the notice of motion, although served, was not filed. Nonetheless, there was an appearance for the defendants on 28 January 2015 and I proceeded to hear the application. The application was said to be urgent because of the financial position of the plaintiff. 3. The application is made under s 84 of the Probate and Administration Act 1898 (NSW), which relevantly provides: If the executor or administrator, after requesting in writing, neglects or refuses to: (a) … (b) … (c) pay or hand over to the person entitled any legacy or residuary bequest, the Court may, on the application of such devisee or person, make such order in the matter as it may think fit. The notice of motion also sought an order for interim provision to the plaintiff pursuant to s 62(1) of the Succession Act 2006 (NSW). However, the plaintiff did not press that relief. 1. It is not disputed that the executors may have a duty to make interim distributions where it is prudent to do so: see Gonzales v Claridades [2003] NSWSC 508; (2003) 58 NSWLR 188 at [47]. Nor is it disputed that the plaintiff has requested in writing that the executors make a further interim distribution so as to satisfy the requirements of s 84 of the Probate and Administration Act. 2. The executors neither consented to nor opposed the plaintiff's application. However, Mr Ellison SC, the executors' counsel, submitted that, having regard to the financial position of the Estate and the distributions already made to the plaintiff, it would not be prudent to make a further distribution to him at this time. For the reasons which follow, I accept that submission. It follows that the application must be dismissed with costs. 3. The deceased was survived by three children: the plaintiff (John), two daughters (Robyn and Lesley) and a number of grandchildren and great-grandchildren. The deceased left legacies of $2 million to each of John and Robyn. She left further legacies totalling $3.8 million to her grandchildren and great-grandchildren with the result that she left pecuniary legacies totalling $7.8 million. The deceased also made a number of specific gifts to Lesley and to Lesley's husband and daughter, including the deceased's half interest in a house at East Killara and shares in two private companies. The deceased left the residue of her Estate to be divided equally between John and Robyn. She also provided that, if the pecuniary legacies totalling $7.8 million exceeded the available funds, then each beneficiary's share should be reduced proportionately. 4. Finally, in cl 10 of her will, the deceased drew her executors' attention to an acknowledgement of loan between herself and John dated 18 December 2007 and requested that the terms of that acknowledgement be implemented and observed. The loan was for $881,000. It is not disputed that, if the Estate is entitled to recover that loan, John is entitled to set off the loan against the legacy due to him. 5. 8 John is involved in a number of court proceedings relating to the Estate. Relevantly, there are three. First, both John and Robyn have brought family provision proceedings under Pt 3 of the Succession Act. Second, the executors have filed a cross‑claim in the family provision proceedings brought by John seeking an order that they were entitled to set off the amount of the loan of $881,000 against the legacy payable to John. It was John's contention that he was not obliged to repay the sum of $881,000 to the Estate. The cross‑claim was heard separately by Sackar J and, on 12 September 2014, his Honour delivered judgment in favour of the executors: see John Steiner v Kenneth Ross Strang and Jason Tang [2014] NSWSC 1250. John has appealed that judgment. The appeal is yet to be heard. 6. Third, John has commenced proceedings against the executors, Lesley, her husband and daughter, and one of the companies in which the deceased held shares, claiming on behalf of the Estate long service leave, holiday pay and unpaid salary said to be payable by the company to the Estate in respect of the deceased's employment by the company. Those proceedings are currently before Slattery J. Evidence is complete, but his Honour is yet to hear final submissions, following a delay resulting from the Martin Place siege on 15 December 2014. The executors have filed a submitting appearance in those proceedings. The only significance of the proceedings to the present application is that, if they are successful, that will increase the assets of the Estate. 7. The executors have made interim distributions to John of $788,872 and to Robyn of $1,335,000. 8. The evidence is that the executors have or expect to have the following amounts from which to pay the legacies totalling $7.8 million: Cash held by executors $5,473,639.18 Expected tax refund $42,416.98 Total: $5,516,056.16