Jee v Jee[2012] QSC 210

SUPREME COURT OF QUEENSLAND

HER HONOUR:  The applicant, Dennis Meng Kit Jee, has made application by originating application that the respondent, his brother Thomas Jee, be removed as executor and trustee of the estate of their mother, Fook Neng Jee.  I shall hereafter refer to the brothers by their given names so as to avoid confusion. 

The applicant also applies for Michael Karl Klatt to be appointed as administrator of the estate of their mother, Mrs Jee, and pursuant to rule 638(5) of the Uniform Civil Procedure Rules 1999 (Qld), the Court to fix the remuneration of Mr Klatt as Administrator of the Estate, 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.

The applicant also seeks such vesting orders as may be necessary to allow the appointed administrator to carry out the duties of trustee, and lastly seeks his costs.

The deceased, Mrs Jee, died on 8 August 1998, so it is just nine days short of 14 years ago.  Thomas was appointed executor in the last will of Mrs Jee, which was dated 29 June 1995.  Thomas and Dennis are two of the three sons of Mrs Jee and they have five sisters.

Under clause 4 of the will Mrs Jee gave all the moneys in her bank account to her daughters-in-law and her grandchildren who attain the years of 18 years in equal shares as tenants in common.  It should be noted that even the children who were only four years old at the time of her death will now have reached or are about to reach that milestone of 18 years.  The residue of her estate was divided into 11 parts to be left in various proportions to her eight children.

The history of what happened, unfortunately, is one of those tragic cases of a very unhappy family following the death of a parent unable to resolve their differences without resort to court process.  On 1 March 1999, an action for proof in solemn form was commenced by Thomas to prove Mrs Jee's last will.  Four of the children were defendants to that action, and after a substantial trial, an order for a grant of probate of the will in solemn form was made on 17 December 2001.

On 6 May 1999, three of Mrs Jee's daughters had brought separate applications for further provision from her estate under Part 4 of the Succession Act 1981 (Qld).  On 11 January 2002, another daughter lodged an appeal against the decision which granted probate, but that appeal was dismissed by consent before it was heard.

On 26 September 2003 one of the daughters, Diana, was given leave to proceed with an application for further provision by substituting her as the applicant in an application commenced by one of her sisters.  She was the only one then left making an application for family provision.  That application proceeded to trial and judgment was delivered on 23 December 2010.  A costs order was made with respect to it on 9 February 2011.  It concerned one part of the estate of the deceased, and ordered the transfer of certain real property to Diana.

This application is made because of the unacceptable delay, it is alleged, by the executor getting in the assets of the estate and dealing with them such that the administration of the estate can be brought to an end.  The serious nature of those delays can be seen by considering the property that has not yet been brought into the estate and the neglect to deal with property that is already in the estate.

After probate was granted, there is no reason, notwithstanding the application for family provision, that the other assets of the estate could not have been brought in and appropriately dealt with.  These matters have been pressed by in particular the applicant Dennis since the beginning of 2011 to little avail, apart from a flurry of activity as this application was due to come on for hearing.

On 14 February 2011, Thomas as executor sent a letter to the applicant and his sister and brother, Catherine and Gerald who reside in Papua New Guinea, about what had happened with the estate.  He raised the question of who actually possessed title to the plantations on which Catherine and Gerald lived in Papua New Guinea.

On 6 May 2011, Dennis's solicitors wrote to Thomas's solicitor, Mr Toogood, who appears today for the executor, requesting an update on the administration of the estate.  It appears that no reply was received to that.  Another letter was sent by the applicant's solicitors on 17 June 2011 again asking for an update on the administration of the estate and informing the respondent through his solicitor that if they did not have a satisfactory reply within seven days, they would seek their client's instructions to have Thomas removed as executor of the estate.  A reply was received on 21 June 2011 from Mr Toogood, but it failed to make any reference at all to the administration of the estate, and certainly did not give an update as to what was occurring. 

On 24 June 2011, Dennis's solicitors again wrote to Mr Toogood and again repeated their request for information as to specifically at what stage was the estate administration.  That did evince a reply which said that:

"1.We are still attempting to obtain probate of the will in Hong Kong.  We have just received a letter from Hong Kong querying the certified copy will provided by the Supreme Court. 

2.We are awaiting instructions from our client in relation to the land in Papua New Guinea which in the writer's opinion is clear [sic] part of the estate.  As your client will appreciate this is a matter of some delicacy amongst the beneficiaries of the estate."

There is no explanation as to why those matters had not been dealt with promptly upon the receipt of grant of probate on the will, which as I have said, occurred back in 2001.  The fact that probate was not granted until three years after the death of the deceased might explain that delay, but a delay of a further 11 years is extremely difficult to understand and no explanation is offered.

What that email did not mention was the other parts of the estate, about which, as it turned out on this application, there continue to be difficulties in dealing with properly.  On 29 July 2011, Dennis's solicitors again wrote to Mr Toogood asking for further advice on the status of the estate administration, particularly in relation to the properties in Papua New Guinea and Hong Kong, as raised in Mr Toogood's last correspondence.  It does not appear that any further information was forthcoming with regard to that matter.

On 18 January 2012, once again Dennis's solicitors wrote to Thomas's solicitor, Mr Toogood, asking very specific questions.  They asked for an update concerning the estate administration, in particular but not limited to the following:

"1. Have the properties in PNG been sold and if so please provide details of same.  If they have not been sold, what is your client's proposal concerning same;

2. Has your client received rental income from the PNG properties since date of death and if so please provide details of same;

3. Has probate been obtained in Hong Kong and if so please provide us with a copy of same.  If probate has not yet been obtained, pleased [sic] details of same;

4. Has your client received rental income from the Hong Kong property since date of death and if so provide details of same;

5. Please provide details of the moneys currently held in your trust account on behalf of the estate as well as your trust account statement from November 2010 to date;

6. Please provide a current statement of the account 'Thomas Chow Jee ATF Estate Fook Neng Jee Deceased’;

7. Please advise whether the orders in relation to Diana Jee have been complied with and if so when."

On 3 February 2012, Mr Toogood advised that the letter had been sent to his client for instructions; that probate had not yet been obtained in Hong Kong, although they anticipated it would be obtained shortly; that they did not hold any moneys in their trust account; and that all matters in relation to Diana Jee had been complied with, except nobody knew the whereabouts of the Certificate of Title for the Woodsiana Street property.  There was no reponse to any of the other matters raised.

No further communications were received by Dennis's solicitors prior to the filing of this application.  However, affidavit material has been filed by Thomas and more extensive affidavit material by Mr Toogood, and on the hearing today, various documents were tendered by Mr Toogood in an endeavour to show that the estate was being conscientiously administered.  Unfortunately, they appear to have precisely the opposite effect.

For example, Mr Toogood handed up copies of recent bank statements with regard to the account in the name of Thomas Chow Jee ATF Estate of Fook Neng Jee Deceased, a bank account held at the Westpac Bank at Sunnybank.  That account had an opening balance of $363,714.90 as at 1 February 2012.  Some $4,361.40 has been debited from that account after that date, apparently for solicitors' fees.  It has only been credited with interest over a period of three months of $8.88, a clearly inadequate, indeed almost risible, amount of interest on such a substantial amount of money still held in the estate and obviously not being properly attended to.  A bank statement for another account for a period from 14 February to 14 May 2012 that has been produced shows receipts of dividends from some Telstra shares which also have not yet been realised. 

With regard to the Hong Kong property which remains to be sold, it is clear that probate has still not been obtained in Hong Kong, let alone the property being sold.  The material provided with regard to the Papua New Guinea properties show that it is only this application that has caused anything to happen with regard to them, and they are still a long way off being brought into the estate, if indeed they are part of the estate, a matter to which the respondent does not seem to have conscientiously applied himself.

This is not a case where there is any suggestion of misapplication of trust funds by the executor.  However, in addition to the other matters of extreme delay which I have mentioned and neglect to get in and tend to the assets of the estate, there appears to be a large number of notes and coins in a safety deposit box, which again have not been dealt with except to have been kept in that safety deposit box.  Those which are worth only their face value have not been put into a bank account to earn interest.  Mr Toogood says he has spoken to a valuer, but no valuation is provided of various items in the safety deposit box, and I have said, it is some 14 years since the death of Mrs Jee.  No explanation is offered for this omission.

In Miller v Cameron (1936) 54 CLR 572 at 580 Dixon J reviewed the exercise of the jurisdiction to remove a trustee.  His Honour said:

“The jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, to the security of the trust property, and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee. In deciding to remove a trustee the court forms a judgment based upon considerations, possibly large in number and varied in character, which combine to show that the welfare of the beneficiaries is opposed to his continued occupation of the office. Such a judgment must be largely discretionary. A trustee is not to be removed unless circumstances exist which afford ground upon which the jurisdiction may be exercised. But in a case where enough appears to authorise the court to act, the delicate question whether it should act and proceed to remove the trustee, is one upon which the decision of a primary Judge is entitled to especial weight.”

The jurisdiction to remove a trustee applies in equal terms to the jurisdiction to remove an executor.  It is important that the Court give weight to the fact that the executor was appointed under a will by the deceased, and so the deceased has chosen that executor.  Nevertheless, if the executor's extraordinary delay in dealing with the estate is such that it is not in the interests of the beneficiaries for that executor to continue, the Court clearly has power under s 6 of the Succession Act 1981 (Qld) to remove that executor and appoint a substitute, because, as Wilson J said in Williams v Williams [2005] 1 Qd R 105 at 115:

"[The] ultimate concern [of the Court] must be with the due administration of the estate in the interests of creditors and beneficiaries."

Here, the interests of the beneficiaries of the estate are not being met because of the extraordinary delay in the administration of the estate, the end of which does not appear to be in sight.  Further, the executor feels under personal difficulties because of his relationship with his sister and brother in Papua New Guinea in litigating against his brother and sister, if it is in the interests of the estate that he do so.

Mr Toogood referred me to the case of Re Grief; Kantor v Wilding [2005] VSC 266, a decision of Justice Byrne of that Court where his Honour also said at paragraph 17 that his “abiding concern is the interest of the estate and that of the beneficiaries”.  He observed that in that matter there remained little to be done and that costs and further delay would be occasioned by the appointment of another executor. 

That does not appear to be the case here.  Certainly, there will be costs incurred by the appointment of an independent executor, but the advantage of the appointment of an independent executor will be the appointment of someone competent, who is within the jurisdiction, who has no interest in doing anything but acting swiftly to bring the administration of this estate to an end by getting in all of the estate assets - which is a primary duty of an executor - and distributing the estate in accordance with the executor's wishes under the terms of the will.

In all of the circumstances I am satisfied that the respondent, because of his extraordinary delays, should be removed as executor and trustee of the estate of Fook Neng Jee, and that Michael Karl Klatt be appointed as the administrator of the estate.

The order will be as per the draft except that paragraph 6 will read:

"The applicant's costs of and incidental to this application be assessed on the indemnity basis and paid out of the estate, and there be no order as to the costs of the respondent."

...