Johnson v Trotter; Estate of Trotter [2006] NSWSC 67 (9 February 2006)

Last Updated: 23 February 2006

NEW SOUTH WALES SUPREME COURT

CITATION: Johnson v Trotter; Estate of Trotter [2006] NSWSC 67



CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): 4570/03

HEARING DATE{S): 06/02/06, 07/02/06, 08/02/06

DECISION DATE: 09/02/2006
EX TEMPORE DATE: 09/02/2006

PARTIES:
Pamela Anne Johnson
v
Peter Glenn Trotter; estate of the late Lucy Mary Trotter

JUDGMENT OF: White J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:
Plaintiff: G L Turner
Defendant: A Ogborne

SOLICITORS:
Plaintiff: CKB Partners
Defendant: Michael Saunders & Associates


CATCHWORDS:
WILLS, PROBATE AND ADMINISTRATION - Son and daughter of deceased named co-executors and beneficiaries under deceased’s will – Son took possession of house of deceased – Status of son as both beneficial co-owner and executor – Whether son, as co-executor, liable to account for profit arising from occupation of house;
WILLS, PROBATE AND ADMINISTRATION – Obligation of son to swear affidavit describing dealings with personal papers of deceased;
WILLS, PROBATE AND ADMINISTRATION – Division between beneficiaries of personal chattels of decease.

ACTS CITED:
Supreme Court Rules 1970 (NSW)
Trustee Act 1925 (NSW)
Conveyancing Act 1919 (NSW)

DECISION:
Direct the plaintiff to bring in short minutes of order in accordance with these reasons.


JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION


WHITE J

Thursday, 9 February 2006


4570/03 Pamela Anne Johnson v Peter Glenn Trotter; estate of the late Lucy Mary Trotter

JUDGMENT

1 HIS HONOUR: Ms Johnson and Mr Trotter, the plaintiff and the defendant, are sister and brother. They are the executors of the estate of the late Lucy Mary Trotter, who died 7 October 2001. They also are sole beneficiaries of the estate, taking in equal shares. Probate was granted on 5 July 2002.

2 These proceedings were commenced on 29 August 2003. Each party complains about the conduct of the other in the administration of the estate. With the passage of time, many of the issues have been resolved. Subject to disputes about some personal chattels, the assets have been collected and distributed to the beneficiaries.

3 The principal asset of the estate was a house at 17 Clanalpine Street Eastwood. By a contract entered into on 4 September 2003, Ms Johnson bought Mr Trotter's half share of the property.

4 More disputes were resolved during the hearing. Ultimately the issues requiring resolution are :

(a) whether Mr Trotter should pay a rent, or occupation fee, for all or part of the time he was in occupation of the Clanalpine Street property, up to 4 September 2003;

(b) whether he should be required to swear a further affidavit describing how he dealt with personal papers of the deceased including those of her late husband; and

(c) how the personal chattels of the deceased should be disposed of or distributed to the beneficiaries.

5 A substantial level of agreement was reached on the last question.

6 For the benefit of the Registrar, who will have the task of passing accounts, it is desirable to record certain matters upon which the parties reached agreement during the course of the hearing.

7 Mr Trotter has prepared accounts of his receipts and distribution of estate assets. Ms Johnson's solicitor had objected to a claimed expense of $800 for work done, or said to have been done, by Mr Trotter. He acknowledges he will not claim reimbursement of, or to charge for, that expense. On that basis, and subject to her claims that Mr Trotter should be charged rent or occupation fee and should account for personal chattels, including documents he allegedly received, Ms Johnson does not object to the items in his account.

8 Secondly, the parties are agreed that Mr Trotter is entitled to keep the deceased's engagement ring, and Ms Johnson is entitled to keep her eternity ring. There is now no argument about the deceased's wedding ring, which was buried with her.

9 Thirdly, Mr Trotter accepts that the stamp collection, which was originally his father's, is an asset of the estate.

10 Fourthly, Ms Johnson accepts that Mr Trotter is entitled to 892 and 98 shares in BHP Steel Limited, and that the shares are not to be accounted for as assets of the estate held by both parties.

11 Mr Trotter does not dispute that orders should be made permitting the plaintiff to inspect papers and other chattels of the deceased in his possession.

12 Ms Johnson consents to orders dispensing with the requirements under Pt 78 Rules 75 and 76 of the Supreme Court Rules in relation to the commencement of proceedings for the passing of accounts, or for commission, by summons, and associated requirements. The short minutes of order to be brought in following the delivery of these reasons should include provision for this.

Is Mr Trotter Liable to pay an Occupation Fee?

13 The amended statement of claim pleads at paragraphs 5, 6, 7, 8, 9 and 23 the following:

“5. On or about 23 May 2002, the Defendant assumed occupation of the property.

6. At no time prior to the occupation of the property had the Defendant:

(a) sought the consent of the Plaintiff as an appointed executor and trustee of the Will to assume occupation of the property;

(b) been granted the consent of the Plaintiff to assume occupation of the property.

7. On or about 4 September 2003, the Plaintiff agreed to purchase the Defendant’s interest in the property requiring the Defendant to give the Plaintiff vacant possession of the property on 4 December 2003.

8. The Defendant remained in occupation of the property from 23 May 2002 to 4 December 2003 on which vacant possession was given to the Plaintiff in accordance with the Contract for Sale dated 4 September 2003.

9. The Defendant did not pay rent or an occupation fee to the Plaintiff or to the estate in respect of his occupation of the property.


...

23. In the circumstances, the Defendant as executor and trustee of the Estate of the Late Lucy Mary Trotter has failed to execute his duties in accordance with the law and has breached his duties owed to the estate of the Late Lucy Mary Trotter."

14 At the commencement of the hearing the plaintiff's counsel opened the claim for an occupation rent by saying:

“the facts on this issue have been in evidence between the parties by way of exchange of affidavits for some year (years) let alone some days ... It is a benefit received by a fiduciary which he should account for and pay to the estate. It is probably a breach on the basis of a breach of fiduciary duty to go into occupation and use an asset of the estate.”

15 Ms Johnson's counsel, Mr Turner, accepts that a joint owner of property who enters into possession is not liable to pay an occupation fee to his co-owner unless he has excluded or ousted his co-owner or has constituted himself a bailiff, although he will be required to account for the benefit of his occupation if he claims an allowance for improvements he makes to the property (Forgeard v Shanahan, (1994) 35 NSWLR 206). When application was made at the beginning of the hearing to file the amended pleading, Mr Turner expressly disclaimed any contention that Mr Trotter had ousted Ms Johnson from possession of the property.

16 The principle of Forgeard v Shanahan has been applied as between persons who are co-owners of property at law, or who are equitable co-owners, (Brown v Brown [1999] NSWSC 383 at paragraph 53). However, Mr Turner seeks to outflank this principle by recourse to the principle that a trustee is not entitled, without the informed consent of his principal, to use his office as a means of profit or benefit to himself, and must account for any gains he derives where there is a conflict, or significant possibility of conflict, between his personal interest and his fiduciary duty. This principle, he submits, applies to executors whether or not they have assumed the office of trustee. It must be acknowledged that one co-owner at law or in equity, can derive a profit from the principles in Forgeard v Shanahan, but, counsel says, a trustee or executor cannot take such a profit from his beneficiary.

17 Mr Ogborne appeared for Mr Trotter. His first riposte was that this claim is not pleaded. In my view it is. It is also the ground on which the issue was fought.

18 Mr Turner sought to amend, if necessary. But in my view, no amendment is necessary. Mr Trotter's office as executor, his appointment jointly with Ms Johnson as executors, and his taking possession from 23 May 2002 are pleaded. His remaining in occupation without paying rent or a fee is also pleaded. It is also pleaded, perhaps unnecessarily, that this was done without Ms Johnson's consent. Paragraph 23 pleads a breach of duty as executor and trustee.

19 I do not accept the pleadings should be read as if they said that it was only Ms Johnson's consent as executor and trustee which was not given, leaving it open, or implicitly saying, that consent as a beneficiary was not given. That would make no sense. The case was opened as a case of breach of fiduciary duty. If an amendment were needed, I would give leave. But in my view it is not.

20 Mr Ogborne also submitted that an executor does not owe a duty to obtain his co-executor's consent before taking possession of property of the estate. It is well settled that one of several personal representatives can act separately from the others, and bind them and the estate in so doing. (Harrison Jones and Devlin Limited v Union Bank of Australia [1910] HCA 44; (1910) 11 CLR 492 at 508, 516, 520). In that case, Isaacs J said (at 516, 520):

“When it is said that co-executors are to be regarded as an individual person, it is not meant that all must unite in the performance of each act, but that their official personality is not divisible or distinguishable, and that they have individually and collectively all the rights and duties of the office they undertake". (At 516).

and

“... the law makes the distinction that each has, by virtue of his office, and therefore so long as that office continues, and by reason of his personal representation of the testator, such an interest authority, and power, as enables him to deal with the whole estate, for the purpose of the administration".

21 In this respect executors differ from trustees who must act unanimously, although in certain respects in New South Wales they may act by a majority under s 49 of the Trustee Act. (See Exception Holdings Pty Ltd (in liq) v Albarran & Ors [2005] NSWSC 677).

22 Mr Ogborne submitted that Mr Trotter owed no duty to Ms Johnson as co-executor to seek her consent to occupy the property. He also submitted that the executors had not assumed the character of trustees when Mr Trotter took occupation. There was still an executorial duty to perform in respect of the property, as no transmission application had been lodged. The executors were not trustees but were the full owners of the property. Ms Johnson's rights as a beneficiary under the will was a personal right to compel due administration of the estate.

23 Whilst I accept the premises of this argument, I do not think they meet the point that the executors are nonetheless fiduciaries, and are no more entitled to profit from their office at the expense of beneficiaries than are trustees. It is true the beneficiaries are also the executors, but it cannot be doubted that each party as executor owes a fiduciary duty to the other, as beneficiary. It should not therefore be surprising that they may be precluded from dealing with the estate property in a way that would be open to them if they were merely co-owners in equity, where no fiduciary obligation was owed.

24 I was referred by Mr Turner to Brown v Brown [1999] NSWSC 383, where Bryson J considered the position of one of several trustees who occupied trust property. In earlier proceedings, his Honour, and the Court of Appeal, had held that certain land, registered in the names of the sons of Mrs Alice Brown, was held by them on a resulting trust for themselves and her according to their respective contributions to the purchase price. (See Brown v Brown (1993) 31 NSWLR 582). One of the sons in the family was in occupation of one lot. Mrs Brown had sought orders for sale under s 66G of the Conveyancing Act. She died during the hearing, but the suit was continued by her daughters as her personal representatives.

25 His Honour said:

“[53] The simple fact that Mr Jack Brown has been in occupation is not of itself a ground upon which he is liable to pay an occupation fee. As an equitable co-owner his occupation has been lawful and he would not ordinarily incur any obligation to another co-owner. Forgeard v Shanahan (1994) 335 NSWLR 206 shows that liability of a co-owner to pay an occupation fee would arise only if there had been some wrongful exclusion of the claiming co-owner from occupation. In the last years of her life Mrs Brown lived in a nursing home and was unable to occupy the premises and there could be no claim in respect of the period from 29 April 1987 until 29 August 1990. I would think that entitlement to an occupation fee would arise only if some event established the plaintiffs’ entitlement to sale of the property and distribution of the proceeds.

[54] Mrs Alice Brown claimed the sale of the property by trustees under s66G of the Conveyancing Act in her Summons and her daughters have always maintained this claim since her death. No express terms place the trustees under any active duties and the circumstances of the time of the acquisition of the house show that while Mrs Alice Brown was alive all that was then required of the trustees was to hold the property available for occupation by the beneficial owners as their home. Mrs Alice Brown’s claim for sale was a turning point in trust affairs. It was not in Mrs Brown’s power as one beneficiary whose interests were outweighed by those of the trustees to compel sale of the property; but her claim under s66G, although dependent on a discretionary decision of the Court, was so strong, in the absence of any circumstances which could ground resistance to an order for sale, that it was no longer appropriate for the trustees to use the trust property as a home for one of them and for Mr Jack Brown to continue to occupy the premises rather than to sell the property and distribute the proceedings. [sic] The death of Mrs Brown and the end of any possibility of occupation by her marks a further distinct turning point. By the date of my order of 29 October 1990 Mrs Alice Brown had left the premises because she was in need of care and could not live in them, she had brought proceedings claiming an order for sale by trustees, she had died and it was established by the Court’s order that the resulting trust existed. The accumulation of events produced the result that with fair certainty, trust affairs had to be wound-up and the property had to be sold. In my opinion from that time onwards resistance to a claim for sale by trustees was no longer reasonable. Mr Jack Brown continued to occupy the house and did not concede the obviously appropriate course of selling it. Trust affairs ought to be administered on the basis that he should pay a reasonable occupation fee to the trust in respect of his occupation, or should pay the appropriate proportion of the occupation fee to the plaintiffs. ...

...

[58] ... The only fair and equitable adjustment for the occupation of the property by one of the trustees is that the trustees should account as if they had made a fair charge in the nature of rent to Mr Jack Brown for his occupation, and they should pay the Estate a proportion of that charge.”

26 This indicates that where a trustee who takes possession of trust property is also a beneficial co-owner and is entitled in that latter capacity to possession, he is not automatically required to account for his profit arising from his taking possession. In Brown v Brown, the trustee's profit was derived as a result of his beneficial co-ownership. However, a trustee is required to act impartially between beneficiaries. If the trustee does not do so, or if his occupation of the property is contrary to the terms of the trust or his duty to the beneficiaries as a whole, he will be liable to account for the profit, notwithstanding it is a profit which he would be entitled to derive in his capacity as beneficiary.

27 In this case, considered as a joint tenant at law, Mr Trotter was entitled to occupy the property without being liable for rent. Once he and Ms Johnson became trustees, he would likewise be entitled, as beneficiary, to occupy the property without paying rent. In both cases, this would be the position where he did not oust or exclude her possession.

28 In my view, it follows from Brown v Brown that it is only where his possession is inconsistent with the performance of the duties of the executors or trustees to act in the interests of both beneficiaries to realise the property to the best advantage, that he will be liable to pay an occupation rent. Put another way, Mr Trotter is not liable to pay an occupation rent if, in taking possession, he was acting in accordance with his duties as executor to seek to realise the estate for the best price obtainable, even if he also derived a benefit in doing that.

29 Further, he could not be liable to account for his occupation if he had the informed consent of Ms Johnson.

30 Mr Trotter deposed that in the first half of 2002 both parties agreed the house would have to be sold. Ms Johnson agrees this was her view. In paragraph 13 of his first affidavit, Mr Trotter says that before moving in he had a conversation with Ms Johnson to the following effect:

“Firstly:

Trotter: ‘I have been thinking about coming to live here [in the deceased’s house]. I don’t like leaving the house unattended so much. And I’d like to live here for a while before the house is sold.’

Johnson: ‘Tiffany’s living here.’

Trotter: ‘I think that would be okay. It’s a big house. And we would both be at work a lot of the time. I think we would get on alright.’

‘It would give me more time to mow the lawns and keep the garden in order. It would make it easier for me to finish the work I’ve been doing here and get the house ready for sale.’

Johnson: ‘I’ll speak to Tiffany about it.’

Subsequently:

Trotter: ‘I would like to move here next week.’

Johnson: ‘That will be alright.’”

31 He gives evidence, which I accept, of doing repairs around the house after he moved in. Ms Johnson denied that any such conversation took place and denied having consented to Mr Trotter's moving in.

32 To resolve that conflict of evidence, Mr Trotter and Ms Johnson were cross-examined on many matters relating to the administration of the estate. These were said to go to their credit, and in a general sense they did. But I do not think much of the evidence was useful in assessing either party's veracity. Both parties were shown to be at fault in administering the estate. The conduct of both was affected by personal antipathy. Given that antipathy I approach both parties' oral and affidavit evidence with caution.

33 As far as their demeanour as witnesses may be useful, I found Mr Trotter to be the more convincing witness. As he answered questions, he appeared collected and rational and was not prone to emotional outbursts. The same was not true of Ms Johnson. However such demeanour is an unsafe guide in deciding who to believe. I look rather for any objective evidence to support Mr Trotter's version of his conversation with Ms Johnson, or her denial.

34 Mr Turner submitted that such objective evidence could be found in Ms Tiffany Johnson's evidence of her conversations with Mr Trotter. She was not cross-examined. Neither she nor Mr Trotter said that Mr Trotter had told her he was moving in with the consent of her mother. However, there was no reason on Mr Trotter's version of events for him to do so. His right to move in was not questioned by Tiffany Johnson. If, as he said, he had her mother's consent, there would be no reason for him to feel he had to justify moving in.

35 Tiffany Johnson had lived in the property for about nine years before her grandmother's death. A couple of weeks after Mr Trotter moved in, she moved out. If anything, the absence of discussion between Mr Trotter and Tiffany Johnson about his right to move into the property is suggestive that her mother had consented to his taking occupation. If she had not, it is likely she would have communicated that to Tiffany Johnson, who would have at least referred to it in conversation with Mr Trotter, and deposed to it in her affidavit. There is no evidence that she did.

36 Nor did Ms Johnson depose in her affidavit to making any contemporaneous complaint about Mr Trotter’s moving into the property. The first time the matter of his doing so was raised was in a letter of 9 December 2002 from Ms Johnson's then solicitor, Mills Cameron Gallagher. I infer they were retained because of events of 22 November 2002, not because of Mr Trotter's having earlier taking occupation of the premises.

37 On 22 November 2002 a contretemps occurred at the Clanalpine Street property. Ms Johnson said she was there by appointment. Mr Trotter said he surprised her and her partner, Mr Cardiff, taking property out of the house. She denied that, in relevant respects. Whatever the true facts, the matter got to a point that Mr Trotter called the police, and thereafter Ms Johnson retained solicitors. It is unnecessary to resolve the disputed evidence about what took place then.

38 After that event, Mr Trotter changed the locks to the Clanalpine Street property.

39 In their letter of 9 December 2002, Mills Cameron Gallagher said that the property should be transmitted into the names of the executors and arrangements made for sale by public auction. They noted discussion had taken place concerning the sale of Mr Trotter's interest to Ms Johnson. They said that unless this was resolved promptly, the sale should proceed without delay. They also said:

“Our client requires access to the property and your possession is contrary to its (sic) joint ownership. As there is no right for any beneficiary to occupy the house free of rent, our client seeks one-half of the reasonable market rental value from 23 May 2002, when you took up occupation. In the meantime, keys should be furnished to our client and reasonable access allowed.”

40 I infer they did not have in mind the principles of the right of co-owners to possession of the property established in Forgeard v Shanahan. Leaving aside the question of whether their view of the law was right or wrong, it is to be noted that the claim for half of the rental value of the property was made on the bare fact of Mr Trotter's occupation. It was not suggested he took up occupation without Ms Johnson's consent. On the other hand they asked for access to the property on behalf of their client.

41 Mr Trotter retained solicitors, then Patrick Grimes and Co, who wrote on 14 February 2003:

“In relation to access to the estate property, our client moved into the house after his mother’s death. Your client agreed to this on the basis that our client would be caretaker of the property and attend to maintenance work that they both agreed on. Your client said that she did not want our client to pay rent and the maintenance work would be in lieu of any rental payment. At the time, our client agreed to pay half the rental for the time he was to occupy the property before it was sold but your client was happy that the maintenance of the property be in lieu of any rent.”

42 Their version of the agreement is not wholly consistent with Mr Trotter's. Mr Trotter does not give evidence that Ms Johnson said she did not want him to pay rent and that maintenance work would be in lieu of rental. Mr Trotter was not cross-examined on this discrepancy. The differences are not such as to lead me to reject his evidence at paragraph 13 of his affidavit.

43 Patrick Grimes & Co went on to say that the locks were not changed until 22 November 2002, after the police had been called. They said the locks were changed because Mr Trotter felt threatened and unable to secure the estate property. They said he agreed on reasonable notice to meet with Ms Johnson at the house to discuss matters relating to the estate which would assist in its distribution.

44 It should be noted at this stage that the plaintiff does not rely on the changing of the locks after 22 November as an ousting of possession. She was given leave to amend the statement of claim on the basis that ouster was not alleged. The rights or wrongs of the events of 22 November 2002, which Mr Trotter claimed justified the changing of the locks, were not explored in cross-examination.

45 Mills Cameron Gallagher replied on 26 February 2003. They said:

"5. The house – your client must leave the house immediately, as no beneficiary or executor is entitled to receive a unilateral benefit from the estate. No agreements are in place concerning the house and our client requires keys to be given to her, so that she can enter and exercise her rights as executor. On your client’s vacation, the property should be placed on the open market for sale by auction in its present condition. At this stage, our client feels that her one-half interest is in the order of $500,000.00, as a valuation of Ray White Eastwood in November 2002 was up to ‘middle $900,000.00’s’. If your client wishes to submit a firm proposal for prompt purchase at this amount, it will be considered by our client.

6. Access to the property – your client has no right to reside rent-free in the property and our client seeks the access referred to above and one-half of the reasonable market rental value from 23 May 2002. Outstanding rates can be paid by your client and deducted from his debt to the estate for occupation fees.”

46 The expression "no agreements are in place concerning the house" is ambiguous. It is not a denial that any agreement was made, but rather that no agreement then stood.

47 Considering the objective circumstances, including the lack of contemporaneous complaint and the correspondence, I conclude Mr Trotter did have Ms Johnson's consent when he moved into the property on 23 May 2002. That consent was withdrawn by the letter of Mills Cameron Gallagher of 26 February 2003.

48 In reaching the conclusion that Mr Trotter had Ms Johnson's consent in May 2002, I have taken into account the various credit points advanced by Mr Turner. I have said why I do not find them to be of particular assistance in resolving the issue of what was, or was not, said between the parties in May 2002. Counsel submitted that when all the points were considered, I should conclude that Mr Trotter was motivated in his dealings with the estate to attempt, as far as he could, to obtain for himself more than one half of the value of the estate. The reason for this was that he asserted an agreement had been made that, because of gifts made by the deceased to Ms Johnson, he would be entitled to receive $100,000 from the estate before the balance was divided equally. That agreement was denied by Ms Johnson and there is no corroboration of it.

49 Mr Trotter has not sought to enforce any such agreement. But it was put that it was because he contended such an agreement had been made, and because he realised it was unlikely it could be enforced, that he conducted himself in relation to the estate's affairs in such a way as to take for himself, as far as he could, the benefit to which he contended he was entitled.

50 Consistently with that motivation, it is said, he deposed to Ms Johnson's having given him consent to occupying the property, when no such conversation had taken place.

51 Numerous matters were advanced to support this contention, most of them relating to the way in which Mr Trotter had taken control of the estate assets, or represented to third parties that he was the sole executor of the estate, or had delayed in distributing the estate.

52 In no order of importance, the matters pointed to were the delay in preparation and registering a transmission application, delay in readying the property for sale, notifying the Commonwealth Bank that he alone was the executor, providing draft letters in blank to the plaintiff for her to sign with provision for any balance in the estate account to be paid into an account in his name, asserting that the stamp collection was his and not accepting until during the course of the hearing that it was an estate asset, expressing a disinclination to provide Ms Johnson with a copy of the will to be shown to the Commonwealth Bank, notifying an insurer that the property was in the name of the deceased and him to the exclusion of Ms Johnson and notwithstanding the deceased's death. It was also said that this may have been an attempt to obtain cheaper insurance by misrepresenting the matter to the insurer, and was a matter which went to his credit generally.

53 Next, Mr Turner referred to Mr Trotter’s performance in the witness box when asked to give the name of the landlord and address of the property in which he is currently storing estate property. Next, his removal of goods from the premises on 1 December 2002, being the day before mediation was due to be held with a view to the parties agreeing on distribution of the chattels of the estate and notwithstanding there was then no agreement from Ms Johnson for him to take estate chattels with him. Next, his refusing to allow Ms Johnson and those accompanying her access to a cabinet in the property when she attended the property on 23 September 2004 for the purpose of taking an inventory. Next, his keeping control of photos and slides which were important to Ms Johnson and taking over a year to respond to requests to allow her to inspect those photos and slides. Next, his refusing to distribute moneys of almost $200,000 in the estate bank account on the pretext that he would only do so upon Ms Johnson arranging for the transfer of shares in BHP Steel Limited in accordance with the parties' agreement.

54 All this, it was submitted, was consistent with his endeavouring to keep control of assets with a view to righting what he perceived to be a wrong done to him. Hence, it was said, his version of these events should be viewed in the same way.

55 These matters are to be taken into account cumulatively, but there were disputes about many of the matters relied on.

56 I accept there were substantial delays in the administration of the estate, both in readying the property for sale and in distributing the moneys in the bank account, although, as will be seen later in these reasons, that was not wholly due to the acts or omissions of Mr Trotter. It is to be remembered that the parties were joint executors, and it was open to Ms Johnson, as well as he, for example, to prepare a transmission application and submit it to the other party for signature and registration.

57 Some matters such as the notifications to the bank and the insurance company indicate a desire by Mr Trotter to have control of the administration, but they do not in my view go to his veracity, and are not matters indicating that he sought to derive a personal advantage.

58 There are things to be said on both sides of the question of whether he ought to have sought to remove the goods from the property on 1 December 2002, into which I do not find it necessary to go. Whilst I think it is likely, contrary to his evidence, that he denied access to Ms Johnson and those with her on 23 September 2003 to a cabinet in the attic, he did so because it contained the stamp collection which he then not only asserted, but believed to be his property and not estate property. The fact that during the hearing, through his counsel, he accepted the stamp collection is estate property, does not indicate that he accepts that there were no words of gift.

59 I also accept that he was using the distribution of moneys from the bank account as a way of seeking to put pressure on Ms Johnson to arrange to complete the transfer of shares in BHP Steel Limited. But again, I do not consider that is a matter that goes to his veracity on the present issue, as there were faults on both sides in relation to those matters. I do not think the events of 5 October 2002 in relation to his request that Ms Johnson complete and sign forms which were then in blank addressed to the Commonwealth Bank is a matter which goes to credit. Indeed, had the amount in those forms been filled in, it was likely that he would have been subject to criticism. The fact that he asked for the balance of the account to be transferred into an account in his own name merely reflects the fact that neither party sought to open an account in their joint names, and arose from him having paid expenses on behalf of the estate from his own funds.

60 Having considered the credit issues upon which counsel, in his able submissions, relied, I am not nonetheless of the view that Mr Trotter's version of the conversation prior to his taking up possession of the property in May 2003 should be preferred.

61 I return to the position as at 26 February 2003. As I said, I accept that when Mr Trotter took possession, he did so with Ms Johnson's consent and I also accept that his doing so was for the benefit of the estate. As I have also said, on 26 February 2003 her consent was withdrawn. By that time there had been ample opportunity for Mr Trotter to effect such repairs as were to be effected to ready the property for sale. There might still be a benefit to the estate in the property being occupied, rather than being left vacant with estate assets still in it, or with the estate assets having to be stored elsewhere at a cost to the estate. However, Mr Trotter would not be entitled to delay the finalisation of the estate and reap the benefit of rental free accommodation. The executors’ duty was to sell the house with reasonable despatch, or if a long delay were anticipated, to rent it.

62 Mr Trotter was entitled to reasonable notice to vacate. He had given up his lease to move into the property and could not be expected to leave it immediately following the demand of 26 February 2003. On 18 March 2003, which I consider to be within such a reasonable period, Patrick Grimes & Co replied to Mills Cameron Gallagher's letter of 26 February 2003. They said:

“Our client wanted to vacate the property in August last year, but remained in the property to maintain it and attend to maintenance work in accordance with an agreement between the joint executors. He wants to move out of the property as soon as possible, however he requests that this be after your client has arranged the valuation as he would like to move all his possessions in one move.”

63 The valuation referred to was one which had been requested by Mills Cameron Gallagher in their letters of 9 December 2002 and 26 February 2003. They had said, and this was not disputed, that the items in the house should be valued for the purpose of their being divided equally between the parties. On my reading of the correspondence which followed, Ms Johnson agreed to the request in Patrick Grimes & Co’s letter of 18 March, 2003.

64 On 8 April 2003 Mills Cameron Gallagher wrote that:

"Our client is arranging for a valuer to attend at the premises with her daughter, so that as mentioned in point 1 of your letter of 18 March, all can be done at the same time and items removed ready for the sale of the home".

65 In my view this was an acceptance of Mr Trotter's proposition that all possessions, including his, should be moved at the one time and after valuation. He could not be expected to leave the property leaving his possessions behind. Hence Mills Cameron Gallagher's letter of 8 April 2003 necessarily conveyed Ms Johnson's consent to his continuing to live in the property until the valuer attended. It should be noted she also undertook to arrange the valuation.

66 On 29 April 2004, Mills Cameron Gallagher wrote to Patrick Grimes & Co about a number of matters. At the conclusion of the letter they said that once they had the details of the valuer and appropriate dates, they would be in touch again.

67 On 15 May 2003 they returned to the topic. They confirmed they were arranging for the inspection by the valuer in respect of the personal property and the attendance of their client, Ms Johnson, for identifying the property of her daughter and that they would be in touch as soon as this could be finalised, for convenient dates.

68 I do not think Ms Johnson can complain about the delays in the property being made ready for sale when both parties accepted that there should first be a valuation of the items of personal property on the premises, and where she had undertaken to arrange dates for such valuation but had not to that point done so. The delay was not caused by Mr Trotter.

69 On 13 June 2003 Miller Cameron Gallagher wrote to Patrick Grimes & Co and said:

“E. Either Tuesday 1 July 2003 or Tuesday 8 July 2003 at 9.30am are satisfactory dates for the inspection of the property and valuation of the personalty. [sic] Please confirm which date is suitable to your client. We are confirming the date with the valuer.

F. Our client maintains her reservation of the right to claim a reasonable licence fee for your client’s occupation of the property since he took possession.

...

H. Unless the property is listed for auction promptly after the valuation referred to above, your client must vacate the premises unless appropriate arrangements are made for access and payment of a licence fee.”

70 The last sentence confirmed what had already been conveyed, namely, that Mr Trotter could stay in the property, at least until the valuation was carried out. It also conveys that Ms Johnson consented to his staying on the property after the valuation of the personal items, if the property was then listed promptly for sale by auction. Ms Johnson asserted the right to a reasonable licence fee, but her consent, or rather the confirmation of her previous consent, to Mr Trotter's occupation was not conditional upon his agreeing to pay such fee. It was rather an assertion of a legal right, the correctness of which I now have to decide.

71 The dates for the valuer to attend to value the property identified in the letter of 13 June were not firm dates. By 25 June 2003, a new firm of solicitors took over for Ms Johnson, CKB Partners. On 25 June 2003, they wrote that Ms Johnson was currently arranging potential dates for a valuation. They made proposals as to how the process should proceed and how the parties might select the objects they wished to retain.

72 Somewhat confusingly, on the following day Mills Cameron Gallagher, whose instructions had apparently been withdrawn, wrote to say that 8 and 15 July were dates still available for a valuation. These dates were confirmed on 2 July by CKB Partners.

73 On 3 July 2003 there was a conversation between the solicitors for Mr Trotter and the solicitor from CKB Partners who acted for Ms Johnson.

74 In CKB Partners' letter of that date, they noted that Mr Trotter “requires that Ms Johnson attend the Deceased's home at some time this weekend to identify items that have no sentimental or commercial value with a view to throwing them out”. This was proposed because it would reduce the amount of time that would be taken by the valuer for the formal valuation exercise.

75 It is common ground that there was a vast amount of material in the deceased's house at this time. Indeed, when Ms Johnson took possession on 4 December 2003 she removed a skip bin full of rubbish which was in the house. She said her parents had never thrown anything out apart from commercial flyers and the like.

76 On the face of it, therefore, the proposal to throw out items which the parties were agreed had no sentimental or commercial value was a sensible one. It was rejected by Ms Johnson. Her solicitors said that one of the reasons she wanted an independent valuer to assist the parties was to have an independent witness so that there was no risk of her being falsely accused of taking items that were not hers. Hence to avoid such future allegations she required an independent witness such as the valuer. Given that it was not proposed that any items be taken from the property, but only that items which were agreed had no sentimental or commercial value should be thrown out, it is a little difficult to see what was to be feared by her attending, with or without independent witnesses, for that purpose. Be that as it may, I infer that she did not.

77 Thereafter, Mr Trotter's solicitor complained about the lack of cooperation from Ms Johnson. Ms Johnson solicitor's pressed for confirmation of a date for the valuer to attend. On 5 August 2003, he asked when Mr Trotter would vacate the premises taking his chattels with him and noted that he was still awaiting advices as to a convenient date for a valuer to attend and value the household items.

78 On 12 August 2003, Mr Trotter withdrew his instructions from his then solicitors. Arrangements were attempted to be made for a real estate agent to inspect the house. Thereafter things moved fairly promptly. Proceedings were commenced on 29 August 2003. On 4 September 2003 the parties agreed upon consent orders, including mediation, to attempt to resolve their differences. On the same day they entered into a contract for sale of Mr Trotter's half interest in the property to Ms Johnson.

79 Special condition 40 of the contract for sale provides:

“The purchaser waives and releases any claims she might have against the vendor for any rent or occupation fees arising from or relating to the vendor's occupation of the property from the date of his contract up to and including the completion date."

80 Mr Trotter moved out of the property on 3 December 2003, prior to completion.

81 In my view, Ms Johnson consented to Mr Trotter's continuing to reside in the property up to a period after a valuation of estate chattels in the house was to take place. It was not until about the beginning of August that it was established that no such valuation would take place. I think the letter of 5 August 2003 from CKB Partners could fairly be read as requiring Mr Trotter to leave the premises within a reasonable time.

82 I should say that I do not consider that the evidence shows that Mr Trotter was to blame for the delay in arranging for the valuation.

83 Within a month of the attempted arrangements for the attendance of a valuer breaking down, the parties had entered into the contract for sale of Mr Trotter's interest in the property. Under that contract Ms Johnson agreed to his continuing to occupy it.

84 In these circumstances, not withstanding the terms of Mills Cameron Gallagher's letters of 9 December 2002 and 26 February 2003, I consider Ms Johnson consented to Mr Trotter's continued occupation at least up to 5 August 2003. As he would be entitled to reasonable notice to vacate from that date which would extend up to 4 September 2033, I think in substance that he had Ms Johnson's consent to his continuing to occupy the property for the whole of the period of his occupation.

85 It is true that she insisted that he was required to pay an occupation fee. But he did not agree to that demand. I do not consider his remaining in occupation was a breach of his fiduciary duty not to obtain a benefit from the estate.

86 Although he was partly responsible for the delays affecting the estate generally, that responsibility was shared by both parties. I do not find that he delayed the administration of the estate or the sale of the property for the purpose of reaping a benefit in occupying the property at the expense of Ms Johnson. His continuing in possession was not inconsistent with his duty to act in the interests of both beneficiaries to realise the property to best advantage.

87 I will therefore dismiss the plaintiff's claim that he is liable to pay an occupation rent.

Private Papers

88 I turn to the question of whether Mr Trotter should be required to file an affidavit identifying papers and items taken by him from the Clanalpine Street, Eastwood property up to 4 December 2003, or deposing to how the papers in the house following the deceased's death were dealt with by him.

89 The basis for the claim that Mr Trotter should be required to file such an affidavit is Ms Johnson's evidence that there was a vast quantity of documents in various locations throughout the house following the deceased's death. She deposed to there being many drawers of papers in each of the three bedrooms, in a cupboard on the landing, in the late Mr Trotter's study, in a cabinet in the lounge room, in another cabinet in the veranda, in the kitchen cupboard, and throughout the garage.

90 She said that when she inspected the house on 23 September 2003 she observed a great number of papers throughout the house although they had been moved from where they had been previously.

91 She expressed the opinion, in general terms, that the volume of papers which she saw on 23 September was significantly greater than the volume of papers that were left behind in the property when the defendant moved out on 3 December 2003, together with papers which she was able to inspect as recently as 10 January 2006.

92 In relation to this last matter, at the end of last year when the hearing of these proceedings was becoming imminent, and early this year, Mr Trotter made available two boxes of documents for inspection at the offices of his solicitors.

93 Ms Johnson does not identify particular documents which she says are missing. She says that she does not know what has been taken except that a vast quantity of documents which should be in the house is no longer there. Hence the claim for Mr Trotter to file an affidavit.

94 Ms Johnson, as I have said, attended the house on 23 September 2003 in company with others for the purpose of taking an inventory. The inventory includes reference to an expanding file of the deceased's writing and notes contained in the hall, miscellaneous items of paper work in the right front bedroom, a tin of correspondence in the front left bedroom, thirty-three ship books in the front left bedroom, a drawer full of deceased's personal papers in the master bedroom, and double-drawers full of papers in a low boy in the upstairs attic. There may be other references to papers in the inventory which I have missed.

95 Ms Johnson did not attempt, by reference to the documents identified in the inventory, to show that documents which were on the premises and recorded in the inventory in September 2003, were not there on 4 December 2003.

96 Mr Trotter has given an account of his dealings with the deceased's papers. He says that on 3 December he removed and placed into storage some such documents. From time to time before 23 May 2002 he removed papers of the estate to work on them in connection with the preparation of the probate application but later returned them.

97 In his affidavit of 29 December 2005, he deposes that he placed into storage some documents that could be described as "original financial records" as well as "personal documents", but otherwise denies removing any such records from the Eastwood property. Apart from the occasions referred to in his affidavit, he denies having removed any estate papers, or having disposed of any estate papers.

98 There is some suggestion that he may have treated some papers as rubbish and thrown them out, although he does not say so in his affidavit. Assuming, contrary to his evidence, but without deciding, that he did so, there is nothing to show that he was acting improperly. He would have been acting properly in disposing of documents which were rubbish.

99 More to the point for present purposes, I do not think that any useful purpose could be served by requiring Mr Trotter to prepare a further affidavit as is sought. The documents about which the affidavit is sought have not been identified with sufficient particularity to enable that to be a useful exercise, assuming Mr Trotter could remember how he dealt with documents in a way other than as described in his last affidavit.

100 As I read his evidence, any further affidavit which he was required to swear would not go beyond what he has already sworn to. There have been some documents placed in storage which are available for Ms Johnson's inspection and for division between the parties. Requiring the service of any further affidavit could not bring back into existence any documents that have been disposed of.

101 I decline to make the order which is sought for the swearing of such an affidavit.

Division of Personal Chattels

102 That takes me to the last issue in relation to the division of estate chattels, where there is a certain measure of agreement. I will indicate my views on matters where there has not been agreement on how chattels should be divided, so that the details of the orders can be considered when short minutes of order are brought in. It may be that what I am about to say will need further refinement.

103 Chattels can be divided into the following categories: coin and stamp collections; photos and slides; personal papers of the deceased; other estate papers which are required by law to be kept or are necessary to be kept for the purpose of the administration of the estate and the passing of accounts; other chattels on the inventory where one party has indicated that he or she wishes to receive the item in specie and the other party does not also claim it; items on the inventory where both parties claim the items in specie; items where neither party seeks the item in specie; and chattels located in the garage in Edensor Street which the defendant agrees to make available for inspection which are not yet on the inventory.

104 In relation to the coin collection, and in particular the 1937 coin, I have indicated during the course of argument my view that that property should be dealt with in the way proposed in the letter of CKB Partners of 30 January 2006. I understand there to be no dispute about that. Short minutes of order should make provision accordingly.

105 In relation to the stamp collection, the orders should provide for the stamp collection to be made available at the offices of the defendant's solicitor for inspection by the plaintiff and/or the valuer nominated by her. Following that inspection, the stamps should be sold at auction. The order should provide that each party have the right to bid at the auction.

106 The photos and slides and the deceased's personal papers are items of no commercial value, but undoubtedly would have sentimental value to the parties. I do not accept the defendant's proposal that one or other of the parties should have the first right to take one half in number of the photos, slides and personal papers with the right then of the other party to obtain copies of any such documents or photos or slides taken by the first party. In my view that course is likely to lead to further protracted delays and in the circumstances of this case it should be avoided.

107 Those items should be divided by random division by the solicitors, in specie, by one photograph or document or slide at a time being taken out of a box and given to one party or the other in the way proposed in CKB's letter of 30 January 2006. Those observations apply to personal papers as well as to photos and slides.

108 In relation to other estate papers which still exist, certain of them will be required by law to be kept in compliance with the obligations under, for example, income tax legislation, or they will be required to be kept for the purposes of the passing of accounts. They should be retained by whichever party has possession of them at the moment. Of course, any documents which both parties agree can be thrown out should be thrown out. Otherwise such papers should be distributed in the same way as personal papers.

109 In relation to the chattels on the inventory where one party has indicated by an asterisk that he or she wants the item, I note that it is agreed by both parties that the person so indicating is entitled to receive the item without having to account for its value, and there is no need for such items to be valued.

110 Therefore in cases of those items where one party, but not the other, has indicated that he or she wants to receive it, the asset, if it is not already in his or her possession, should be given forthwith to the person claiming it.

111 In relation to the items where both parties have indicated that they want to receive the item, I consider that those items should be distributed by a process of sealed tenders in the way I foreshadowed at the beginning of yesterday. In coming to that view I take into account that a beneficiary is entitled to have estate property realised at the best available price, and that other methods of division would be unlikely to achieve that objective as effectively.

112 As I indicated yesterday, the sealed tenders should be unconditional and the item should be distributed to the party which makes the higher offer. In the event of both parties making the same offer the distribution of the items should be determined by the toss of a coin by the solicitors.

113 In the event that payment is not made forthwith - although I will hear the parties on this if necessary - then the property should be distributed to the other party at the price he or she offered.

114 For those items where neither party has indicated that he or she wants to receive it, the items should be sold by auction. The allocation of such items into lots should be left to the discretion of the auctioneer, unless the parties are agreed on it.

115 In relation to items which will become available for inspection which are not on the inventory, an inventory should be prepared of those items. As they have done to date, both parties should indicate in respect of those items whether they want to receive them in specie. Depending on what they indicate, the items will be dealt with in the same way as other items on the inventory are to be dealt with.

116 It will be necessary for an estate bank account to be opened to receive the proceeds of sale. An order should be made requiring parties to open an estate account in their joint names.

117 The orders will also make provision for the plaintiff to be allowed to inspect the property contained in the garage at Edensor Street. The orders should also make provision for the matter to be reserved for further consideration.

[Counsel addressed on costs].

118 Each party seeks orders for costs.

119 Counsel for the defendant observes that his client has obtained, in substance, all the relief that is sought in the cross-claim and that he should be entitled at least to the costs of that cross-claim.

120 In my view these proceedings should be considered as an entire dispute and that costs should not be ordered separately in relation to the cross-claim and the summons or statement of claim considered as an entire dispute, both parties have had a measure of success and a measure of failure. It is true, as Mr Ogborne said, that the issues which took up most of the time at the hearing, namely the defendant's liability to pay an occupation fee or his liability to provide a further affidavit in relation to his dealings with papers, are matters upon which the defendant has succeeded. That is not necessarily to say however that they were matters of the most importance for the parties.

121 The plaintiff's solicitor submitted that whatever other orders were made she should have the costs of the summons up to at least the time consent orders were made on 4 September 2003, because she was forced to commence these proceedings to avoid what would otherwise have been adverse capital gains tax consequences to the estate owing to the delay in the sale of the house.

122 On the principles in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622, where there has been a resolution of an issue without a hearing, the Court would ordinarily make no order as to costs, unless it is satisfied that one party or the other has acted unreasonably in the conduct or defence of the proceedings, or it can be seen that one party has effectively capitulated to the other's demand.

123 I accept that these proceedings were necessary. I think the need for them and the length of time which they had taken is attributable to the fault of both parties. Both parties have had a measure of success and failure. In those circumstances I think they should bear their own costs of the proceedings. I make no orders as to costs of proceedings.

124 Finally, I should express my thanks to the legal representatives of the parties, both counsel and solicitors, for the way in which they have professionally conducted this litigation.

125 I list the matter for 9.30 next Tuesday for the purpose of the parties bringing in short minutes of order. If that time is inconvenient to either of the parties then they can contact my Associate this week to get a different convenient date.

126 I direct the plaintiff to bring in short minutes of order in accordance with these reasons.

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LAST UPDATED: 22/02/2006