Estate Ritossa, Deceased

These reasons for judgment have been published on (12 August 2022) at the request of the plaintiff in contested probate proceedings for a formal statement of reasons for orders made on (10 August 2022), on the application of the defendant, for the appointment of an interim administrator of a deceased estate.

Maria Ritossa (“the deceased”) died on 30 April 2019, leaving wills respectively dated 27 March 2007, 26 February 2015 and 6 January 2018, which are the subject of competing claims for a grant of representation in these proceedings.

The deceased was survived by her two sons (her only children), the plaintiff and the defendant.

The beneficiaries of the 2007 will are the plaintiff and the defendant in equal shares.

The sole beneficiary under the 2015 will is the defendant.

The beneficiaries of the 2018 will are the children of the plaintiff.

In the principal proceedings:

The principal proceedings have been listed for final hearing before Slattery J, commencing on 26 April 2023, with an estimated duration of seven days.

It is common ground that the most significant asset in the deceased’s estate comprises two unencumbered, adjoining, freehold parcels of land at 44 and 44A Mons Avenue, Maroubra (“the property”), the value of which is not agreed by the parties. On any view, the two parcels of land are jointly and severally worth several million dollars.

The property has been unoccupied since the death of the deceased.

Without any grant of authority to do so, the plaintiff has managed the property without reference to the defendant. He claims personally to have spent $157,824 to date in maintenance of the property. That sum is said to comprise the following outlays:

The evidence adduced on the hearing of the defendant’s motion did not extend to itemisation of the plaintiff’s claim.

Presumably the plaintiff will at some future time seek to be indemnified from the estate of the deceased for some, if not all, of his claimed expenditure.

The parties have been engaged in hotly and bitterly contested proceedings concerning the estate (and, before her death, the person) of the deceased for many years. Their litigation has been conducted in Australia and Croatia. My own engagement with the Ritossa family, upon an exercise of protective jurisdiction, is reported as IR v AR [2015] NSWSC 1187. The relationship between the brothers is toxic.

On 8 April 2021 the defendant filed a notice of motion seeking the appointment of an interim administrator of the deceased’s estate. Although mentioned from time to time during the course of case management hearings, the motion was not pressed by the defendant until recently. On 30 June 2022 I ordered that it be listed for hearing before me on 3 August 2022.

At the end of a short hearing on that day, I formally recorded the following notations:

Those notations having been made, the proceedings were adjourned to 10 August 2022 in anticipation of orders being made disposing of the defendant’s notice of motion.

On their return to Court on 10 August 2022, the defendant tendered draft orders designed to give effect to the provisional ruling made on 3 August 2022. The plaintiff maintained his resistance to any appointment of an interim administrator, contending that there is no necessity for, or convenience in, the appointment of an administrator because, he submitted, the estate of the deceased, under his informal management, is “not in jeopardy”.

The plaintiff expressly disclaimed any challenge to the jurisdiction of the Court to appoint an interim administrator, whether by reference to section 73 of the Probate and Administration Act 1898 NSW (which speaks in terms of an administrator of personal estate and a receiver of real estate) or the Court’s inherent probate jurisdiction. He contended, rather, that, because the estate is “not in jeopardy” under his management, it would be a wrong exercise of discretion on the part of the Court to appoint an administrator.

In my opinion the plaintiff’s opposition to the appointment of an interim administrator is misconceived. Despite his failure to acknowledge the fact, the deceased’s estate is, in his terms, “in jeopardy” because of his unilateral, unauthorised “management” of the estate, leaving its most significant asset unproductive and, he says, in such a state of disrepair as to be untenantable. This, despite his claim to have personally spent a substantial amount on maintenance of the property.

The appointment of an interim administrator pending the determination of a contested probate suit (upon an exercise of the Court’s inherent probate jurisdiction, traditionally effected by a grant of administration pendente lite or by reference to section 73 of the Probate and Administration Act 1898) is not made merely as a matter of routine or simply because a contested probate suit is pending. The Court must be satisfied that an order for the appointment of an interim administrator advances the due and proper administration of the estate and the interests of persons beneficially entitled to the estate.

In Gooley v Gooley [2020] NSWSC 798 at [125]-[126] Williams J made the following observations (with editorial adaption):

A court giving effect to the purposive nature of probate proceedings, and the particular object of the appointment of an interim administrator pending the determination of a probate suit, is not required, as a condition precedent to the appointment of an administrator, to make a formal finding that an estate is or would be “in jeopardy” absent the appointment of an administrator. Reference to an estate being “in some jeopardy” is a convenient way of giving practical expression to a perceived “necessity” or “sufficient reason” for engagement with the object of the appointment of an administrator. This requires an exercise of judgement in each case, not a formalistic search for “jeopardy”, as the plaintiff in the present proceedings urged upon the Court. I do not understand Williams J to have suggested otherwise.

With that explanation, I agree with her Honour’s observations. They are consistent with, and reflect, the purposive nature of an exercise of probate jurisdiction, which is to carry out a deceased person’s duly expressed testamentary intentions, and to see that beneficiaries entitled to a deceased estate get what is due to them, without delay: In the Goods of William Loveday [1900] P154 at 157; Bates v Messner (1967) 67 SR (NSW) 187 at 189 and 191-192.

By taking possession and control of estate property without any authority to do so, the plaintiff has intermeddled in the affairs of the deceased; more particularly, as he has done so without consultation with the defendant, knowing that there is a contest about which of the deceased’s wills should be admitted to probate.

The fact that the parties have been unable to agree upon an orderly interlocutory arrangement for administration of the estate is, in itself, indicative of an estate in jeopardy and in need of an independent administrator: somebody clothed with legal authority to administer the estate and able to do so with skill and impartiality, preserving the estate for those in due course found to be beneficially entitled to it.

The plaintiff has left the property vacant since the death of the deceased, incurring expenses and eschewing opportunities for rental income. Although he claims to have expended a substantial amount on maintenance of the property, he contends that it is not in a fit state to be let out to a tenant without repairs likely to cost more than liquid funds presently available to the estate. He opposes any steps being taken towards the property being leased or sold.

The plaintiff’s management of the property has been informed, not altogether consistently, by self-interest. On the one hand, he expresses a desire to retain the property for himself and his children because of a sentimental attachment to it as a former family home. On the other hand, he contends that the property might best be valued, for the purpose of a prospective sale, as a “knock down and rebuild” opportunity. He would have the property remain unoccupied, under his exclusive management, without supervision, pending the final determination of the principal proceedings, the trial for which is eight months away. The prospect of a reserved judgment and an appeal cannot be excluded. Despite the possibility that, upon determination of the principal proceedings, the defendant may be found to have a beneficial interest in the estate, he seeks to pursue his own agenda without accountability.

The plaintiff’s intermeddling in the affairs of the estate, and his lack of insight in a failure to appreciate the need for an accountable interim administration regime pending the determination of the principal proceedings, ground a finding that administration of the estate cannot be left in his hands pending the determination of the proceedings, but should be placed in the hands of an independent administrator to whom the parties can make representations about how the property should best be dealt with.

In deciding that an independent interim administrator should be appointed, I preserved for the plaintiff an opportunity to be heard in the event that the administrator forms the view that the property should be sold. The administrator’s powers are constrained by an order that the property not be sold without the prior written consent of the parties or the leave of the Court. I have reserved to the administrator and the parties liberty to apply for directions in the conduct of the administration, a means by which any dispute about repairs to the property or the granting of a lease can be determined in an orderly way.

There has been no dispute between the parties as to the identity of the interim administrator or the terms of her entitlement to remuneration. She is a person suitably qualified for appointment as administrator.

In deference to submissions made by counsel for the plaintiff, I determined the plaintiff’s notice of motion by reference to section 73 of the Probate and Administration Act as well as the Court’s general probate jurisdiction. For that reason, a special grant of administration was made in terms that acknowledged that the office of interim administrator incorporated the roles of administrator of personal estate and receiver of the real estate.

The juristic character of a special grant of administration upon an exercise of probate jurisdiction, limited to accommodate the pendency of a contested probate suit, and an appointment expressed in the terms of section 73, is essentially the same and governed by similar considerations. To the same effect could be the appointment of a receiver and manager upon an exercise of equitable jurisdiction. Each form of order is just that: an order of the Court, for a defined purpose, authorising the management of property, with a duration and powers limited in a manner designed to serve the purpose of the order.

For these reasons, on 10 August 2022 I made orders and notations as follows:

The powers conferred on the administrator by these orders are those which were proposed by the defendant, without objection by the plaintiff as to their form. If the parties, or the administrator, perceive a need for those powers to be supplemented (for example, to enable the administrator to borrow funds on the security of the property in order to effect repairs to it) an appropriate application can be made to the Court, preferably with the agreement of the parties, but, in any event, after consultation of all affected interests and with the benefit of a specific proposal.