Proud v Arkell

• Jurisdiction: Northern Territory
• Court: Supreme Court
• Judge: Grant CJ
• Judgment Date: 22 May 2019
• Neutral Citation: [2019] NTSC 35
• Docket Number: FILE NO: 106 of 2018 (21842912)
• Date: 22 May 2019

[2019] NTSC 35

SUPREME COURT OF THE NORTHERN TERRITORY

IN THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA AT DARWIN

JUDGMENT OF:

Grant CJ

FILE NO: 106 of 2018 (21842912)

Between:

Jane Proud as guardian ad litem for Jake Christopher Michael Mcardle (a minor)

Plaintiff

and

Karen Louise Arkell

Defendant

REPRESENTATION:

Counsel:

Plaintiff: MS Macdonald

Defendant: T Liveris, D McConnel

Advance Civil Engineering Pty Ltd v Norbuilt Pty Ltd [1996] NTSC 45; Agar v Hyde (2000) 201 CLR 552; Aldrich v Attorney-General [1968] P 281; Australian Can Co Pty Ltd v Levin and Co Pty Ltd [1947] VLR 332; Baldwin v Greenland [2007] 1 Qd R 117; Bates v Messner (1967) 67 SR (NSW) 187; Brabender v Brabender [1949] VLR 69; Budd v Silver (1813) 2 Phill 115; Civil and Civic Pty Ltd v Pioneer Concrete (NT) Pty Ltd [1991] NTSC 3; Clarke v Union Bank of Australia Ltd (1917) 23 CLR 5; Fancourt v Mercantile Credits Limited [1983] HCA 25; Fysh v Coote [2000] VSCA 150; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; Goods of Wilson [1929] St R Qd 59; Haque v Haque (1962) 108 CLR 230; Harrison v Mills [1976] 1 NSWLR 42; Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405; Heller Financial Services Ltd v Solczaniuk (1989) 99 FLR 304; Hunter v Hunter [1937] NZLR 794; [1938] NZLR 520; In the Goods of Gill (1828) 1 Hagg 342; In the Goods of Loveday [1900] P 154; In the goods of Mary Carr (1867) LRP and D; In the Estate of Wayland [1951] 2 All ER 1041; Letterstedt v Broers (1884) 9 App. Cas 371; Lubis v Walters [2009] NTSC 23; Mavrideros v Mack (1998) 45 NSWLR 80; Miller v Cameron (1936) 54 CLR 572; Monty Financial Services Ltd and Anor v Delmo [1996] 1 VR 65; Passingham v Sherborn (1846) 9 Beav 424.; Re Atkinson (deceased) [1971] VR 612; Re Aylmore [1971] VR 375; Re Beddoe (1893) 1 Ch 547; Re Bowes [1963] QWN 35; Re Hall [1923] QWN 40; Re Registered Trade Mark “Certina” (1970) 44 ALJR 191; Riccardi v Riccardi [2013] NSWSC 1655; Shew v Police and Citizens Youth Club [2013] NTSC 15; Skaftouros v Dimos [2002] VSC 198; Sportsbet Pty Ltd v Moraitis [2010] NTSC 24; Sperrer v Rasla Pty Ltd [2011] NTSC 2; Thrifty Rent-a-Car Pty Ltd v Darwin Marketing Services Pty Ltd [1987] NTSC 67, referred to.

Dal Pont & Mackie, Law of Succession, (Lexis-Nexis Butterworths, 2nd ed, 2017) Principles of Australian Succession Law (LexisNexis Butterworths, 3rd ed, 2017) Williams, Mortimer and Sunnucks, Executors, Administrators and Probate, 17th ed

Administration and Probate Act 1969 (NT) s 6, s 14, s 22, s 26, s 32, s 33, s 41, s 54, s 55, s 61, s 62, s 66, s 67, s 89, s 96, s 110A

De Facto Relationships Act 1991 (NT)

Domicile Act 1987 (NT) s 7, s 9

Supreme Court Rules 1987 (NT) r 22.01, r 22.03, r 22.04, r 22.05, r 22.06, r 54.02, r 88.11, r 88.24, r 88.27, r 88.41, r 88.27

WILLS, PROBATE AND ADMINISTRATION — PROBATE AND LETTERS OF ADMINISTRATION — EXECUTORS AND ADMINISTRATORS — RIGHTS, POWERS AND DUTIES — ADMINISTRATION — PROCEEDINGS AGAINST EXECUTORS AND ADMINISTRATORS

Whether deceased domiciled in Western Australia at date of death — whether deceased left property in the Northern Territory at date of death — whether Court had jurisdiction to grant letters of administration — whether grant irregular — whether grant of letters of administration to defendant should be revoked — whether administrator's conduct in breach of fiduciary duty — whether conflict between duty as executor and personal interest as beneficiary — whether estate funds may be applied in payment of legal costs without court authorisation — whether failure to file proper accounts relating to the administration of the estate.

REASONS FOR JUDGMENT

(Delivered 22 May 2019)

1 Paul McArdle (“the deceased”) died intestate at some time on 17 or 18 August 2017. These proceedings involve the administration of his estate. The Registrar of this Court granted letters of administration to the defendant on 24 October 2017. That grant was made on the basis of the defendant's depositions that she was the de facto partner of the deceased at the date of his death; that the deceased left property in this jurisdiction; that there were no claims against the estate other than those set out in the affidavit of assets and liabilities sworn by her on 17 October 2017; and that the gross value of the deceased's estate was in the order of $150,000.

2 By Writ with Statement of Claim filed on 11 October 2018, the plaintiff pleads that the defendant was not the de facto partner of the deceased at any material time; that the deceased left no real or personal property in this jurisdiction; that on and from 1 September 2017 the deceased knew of the claim on the estate by the deceased's son (on whose behalf the proceeding is brought) 1; that the net assets of the deceased's estate were in excess of $350,000; and that at the date of his death the deceased was domiciled in Western Australia.

3 The plaintiff pleads that the consequences of those matters are that:

• (a) the defendant is not a beneficiary of the deceased's estate;

• (b) the defendant was not entitled to a grant of letters of administration of the deceased's estate by operation of s 32 of the Administration and Probate Act 1969 (NT); and

• (c) this Court had no jurisdiction to grant letters of administration to the defendant.

4 The prayer for relief seeks final orders in the nature of a declaration that the defendant was not the de facto partner of the deceased at any material time; a declaration that the deceased was domiciled in Western Australia at the date of his death; the revocation of the grant of letters

of administration to the defendant; in the event that it is found the deceased had assets within this jurisdiction, the grant of letters of administration to the deceased's son; and an accounting to the plaintiff for all assets of the estate and all disbursements therefrom

5 By her Defence the defendant pleads, inter alia, that she had been in a continuous de facto relationship with the deceased from in or about April 2012 until the time of his death; that she gave notice to the plaintiff on 7 September 2017 that she was the deceased's de facto partner and was entitled to apply for letters of administration in the Northern Territory; that the deceased left no real property in this jurisdiction (with the implication that he left personal property here); and that the deceased was working in New South Wales on a temporary basis at the time of his death but domiciled in the Northern Territory at the time of his death.

The interlocutory proceedings

6 By summons filed on 8 November 2018 the plaintiff sought interlocutory orders that the grant of letters of administration be revoked; that the defendant pay all moneys forming part of the estate into court; that the defendant preserve the other assets of the estate and not deal with them; that the defendant file and serve an inventory of the assets of the estate; and that the defendant file and serve an account of dealings and transactions concerning the estate. In the alternative to revocation and payment into court, the summons sought orders that the defendant deposit the grant of letters of administration into court and take no further action relating to the estate save for the protection and preservation of assets.

7 In short form, the basis of the interlocutory application was as follows. The only significant asset of the estate was the proceeds of superannuation and life insurance paid to the defendant as administrator in July 2018 in the sum of $416,000. On 2 November 2018 the defendant's legal representatives informed the plaintiff that she had paid the estate to herself six months previously. That distribution was made in circumstances where the defendant was put on notice of the son's claim to the estate on 1 September 2017, together with the dispute in relation to the defendant's status as a de facto partner, the existence of any property in this jurisdiction, and the deceased's place of domicile. Those challenges had been formally advised to the defendant's legal representatives in the context of pre-suit communications on 1 August 2018. For the defendant to have distributed the estate to herself in those circumstances was said by the plaintiff to be in breach of her duty as a trustee of the estate and in breach of her fiduciary duties.

8 When the interlocutory application came before the Court on 15 November 2018 the parties sought orders by consent that the defendant repay the moneys she paid to herself out of the assets of the estate within two days, and account to the plaintiff pursuant to s 89 of the Administration and Probate Act for all moneys received and paid out by her as administrator of the estate within seven days. Those orders were made by consent and the application on summons was adjourned to 29 November 2018. The plaintiff also undertook to file an amended summons in accordance with directions made by the Associate Judge. Those amendments formalised the application for the orders which had been made by consent, and a further application for the execution by the defendant of an administration bond in the sum of $430,000 pursuant to s 26 of the Administration and Probate Act (which application had been refused). The amended summons was filed on 21 November 2018.

9 When the application came back before the court on 29 November 2018, counsel for the plaintiff advised the Court that it would be pressing the application for summary judgment, and that the parties would be seeking certain further orders by consent in relation to the accounting to the plaintiff and dealing with the assets of the estate pending hearing of that application. Consent orders were made in the terms sought, and a timetable was fixed for the filing and service of any further affidavits, the filing and...