Conroy v Smith[2007] QSC 182

SUPREME COURT OF QUEENSLAND

[1] The applicant seeks the revocation of a grant of probate made on 27 May 2004 to him as executor of the estate of Marjorie Phyllis Smith and the appointment of an administrator with consequential directions, including as to the remuneration of the administrator.

[2] In 2004 the applicant as plaintiff brought a solemn form action in which the second respondent in this action was the defendant and the first respondent intervened.  The outcome of that action was that the court pronounced for the full force and validity of a will of 9 December 1998 and dismissed an application for a grant of probate in respect of a later will. 

[3] It was ordered that the plaintiff and the defendant’s costs be paid out of the estate on an indemnity basis.  There was no order as to the costs of the intervener. 

[4] The basis of the application for revocation is that, as a consequence of ‘serious without prejudice allegations’ made by the second respondent against the applicant in his capacity as executor and as solicitor for the deceased prior to her death the applicant is no longer capable of acting in the administration of the estate.

[5] It is accepted that the Public Trustee is not a suitable substitute given the conflict of interest arising as a consequence of it being the executor of the will of Royalie Elvira Helmrich.  The principal asset of that estate is an interest in the estate of Marjorie Phyllis Smith.

[6] It is proposed that the applicant be replaced by an administrator, one of two solicitors willing to act as administrators for the purpose of winding up an estate.  Either is accepted as competent and suitable. 

[7] The first respondent agrees that it is appropriate for the applicant to withdraw.  The second respondent opposes the application.  The third respondent took no part in the proceeding.  The fourth respondent, while not opposing the substitution order pointed to certain difficulties in giving effect to.

[8] The administration of the estate is some way from completion.  The first respondent has sued the estate in the District Court for $51,732.15; the causes of action arose both during the testator’s lifetime and after her death.  A defence and counterclaim has been filed on behalf of the estate which among other things, makes a claim in respect of property, including rent, in which the deceased and the first respondent had an interest and there are other outstanding issues.

[9] The estate is small and its liabilities are quickly approaching, if not exceeding, the total value of its assets.  This will accelerate and increase if the parties cannot reach a consensual resolution. 

[10] The second respondent, who appeared in person, raises further issues in respect of the applicant’s claim for costs in the general administration of the estate in terms of particularity, entitlement and amount and as to the applicant’s failure to collect the rent.  These are matters to be dealt with if the estate is to be finalised.

[11] The second respondent also makes the points that the applicant has known of his concerns for some time but continued with the administration of the estate and that the removal of the applicant and the appointment of an administrator may involve additional costs.

[12] Section 6 of the Succession Act 1981 (Qld) (the Act) relevantly provides:

6(1). Subject to this Act, the court has jurisdiction in every respect as may be convenient to grant and revoke probate of the will or letters of administration of the estate of any deceased person, to hear and determine all testamentary matters and to hear and determine all matters relating to the estate and the administration of the estate of any deceased person; and has jurisdiction to make all such declarations and to make and enforce all such orders as may be necessary or convenient in every such respect.

[13] I note that s 52 of the Act deals with the duties of personal representatives and subsection (2) provides that if a personal representative neglects to perform the duties imposed by the Act the court may make such order as it thinks fit, including as to damages and interest.  In any event an executor who has caused loss by breach of duty in administering an estate may be liable. 

[14] The Uniform Civil Procedure Rules 1999 (Qld) deal with procedural issues; UCPR 642 relevantly provides:

642 Revocation of grants and limited grants

(1) The court may, on application, revoke a grant or make a limited grant if—

(a) it appears to the court that—

(i) the personal representative is no longer capable of acting in the administration; or

…

(b) the personal representative wants to retire from the administration.

…

(3) If the court revokes a grant or replaces it with a limited grant, the personal representative must bring the original grant into the registry as soon as practicable after the order is made.

UCPR 603 deals with the priorities of appointment for administrator of a will.

[15] The applicant has proved the will of which he is the executor in solemn form in a fully contested probate application and has collected the estate incurring considerable costs in both the application and in the course of administration and is actively defending the District Court action. 

[16] In those circumstances the court will not lightly intervene to revoke the appointment and substitute an administrator.  An added consideration in this case is the size of the estate and the diminishing if not disappearing surplus of assets over liabilities. 

[17] The view is open that the court has an inherent power to remove an executor for just cause by revocation of the grant and the appointment of a substitute; see for example Williams v Williams[1] and the cases there cited.

[18] In any event s 6(1) of the Act gives the court wide powers to determine matters relating to the estate of a deceased person and to grant appropriate relief; Williams v Williams;[2] Baldwin and Neale v Greenland;[3] Williams and Williams and Bates v Messner.[4]

[19] This is not a case where the court is in a position that there has been proven misconduct by the executor justifying revocation and the appointment of an administrator as occurred in cases such as Baldwin v Neale and Greenland;[5] Williams v Williams[6] and Monty Financial Services Ltd & Anor v Delmo.[7]

[20] The second respondent has declined to waive privilege in respect of the without prejudice correspondence making the allegations which have led the applicant to conclude that he should bring this application. 

[21] No inference adverse to either him or the applicant is to be drawn from that.  This simply means that there may be unresolved issues as to the applicant’s conduct of the affairs of Marjorie Phyllis Smith both prior to her death and subsequently. 

[22] In that circumstance there is a conflict of interest, or at least a perception of conflict is open, between what might be described as the applicant’s obligations to his client and her estate and his own interests.  An administrator can deal with those issues and finalise the estate.

[23] In addition there appears to be a breakdown in relations as between the applicant and the second respondent; the second respondent’s dissatisfaction appears likely to continue.

[24] In the circumstances I am satisfied that it is appropriate to revoke the grant of probate of the will of 27 May 2004 and to appoint an administrator to finalize the administration of the estate. 

[25] Subject to submissions I therefore propose an order as follows:-

1.That the grant of probate issued to Martin Benedict Conroy as executor on 27 May 2004, file number S4493 of 2004 by the Supreme Court, Brisbane be revoked pursuant to s 6 of the Succession Act 1981 (Qld) and/or rr 642(1)(a)(i) and 642(1)(b) of the Uniform Civil Procedure Rules 1999 (Qld).

2.Subject to the formal requirements of the registry, that the applicant, within seven days after the time limited for an appeal from any order made herein shall have expired, bring into the registry of this Honourable Court at Brisbane the original grant of probate (file number S4493 of 2004 at Brisbane).

3.That a copy of this order be placed in probate file number S4493 of 2004 at the Supreme Court, Brisbane.

4.Either of Mr Phillip McGowan, partner in the firm de Groots Lawyers at Brisbane or Mr Tim Whitney, partner in the firm McCullough Robertson  be appointed the administrator and trustee of the estate of Marjorie Phyllis Smith (deceased), with the will dated 9 December 1988, in the place of the applicant, subject to the formal requirements of the Registrar.

5.Pursuant to r 638(5) of the Uniform Civil Procedure Rules 1999 (Qld), the court fix the remuneration of $(to be resolved), such remuneration to be assessed by an independent cost assessor pursuant to the Supreme Court scale, as varied from time to time, on an indemnity basis, his fees to be assessed at approximately two monthly intervals, and on completion of the administration.

6.The applicant executor’s costs of and incidental to this application be paid from the estate on an indemnity basis.

7.Liberty to apply.