Application of NSW Trustee & Guardian; Estate of Dudley Keith Vaughn

1. [1]

   This is an application for judicial advice by the NSW Trustee & Guardian under s 63 of the Trustee Act 1925 (NSW) and r 54.3(2) of the Uniform Civil Procedure Rules 2005 (NSW) regarding the distribution of the net estate of the late Dudley Keith Vaughan (the deceased).

2. [2]

   The deceased died on 14 February 2015, leaving a will dated 4 May 2000. Probate of the will was granted to the NSW Trustee & Guardian on 27 July 2015.

3. [3]

   The issue faced by the NSW Trustee & Guardian as executor of the deceased’s estate, is that despite extensive searches, two of the beneficiaries named in the will - Maureen Paeblso and Karin Paeblso - cannot be located. With no disrespect, I refer to Maureen Paeblso and Karin Paeblso by their first names in these reasons.

4. [4]

   The NSW Trustee & Guardian wishes to complete the administration of the deceased’s estate and seeks an order, in the nature of a “Benjamin order”, to enable the will to be distributed as if Maureen and Karin predeceased the deceased.

The Will

1. [5]

   The deceased’s will provides that, after payment of estate liabilities, the deceased’s property is to be divided into enough equal parts to pay the gifts set out in the will. It also provides that no parts are to be set aside for any gifts which do not take effect.

2. [6]

   The gifts set out in the will are to be made in twenty-three parts to various people, including a gift as to four parts to Maureen and Karin.

3. [7]

   At the time of making the will, the deceased completed a “Will Information Form” which suggests that Maureen and Karin are mother and daughter and lived in or were from Rylstone, NSW.

4. [8]

   The value of the deceased’s estate at the time of his death was estimated to be $665,809.15.

5. [9]

   Other than the gift of four parts to Maureen and Karin, all of the gifts under the will have been distributed by the NSW Trustee & Guardian to the other beneficiaries, who are all members of the deceased’s extended family, including his ex-wife.

6. [10]

   The current gross value of Maureen and Karin’s shares under the will is $136,750.28, which comprises funds held in the trust account of the NSW Trustee & Guardian.

Legal principles

1. [11]

   A “Benjamin order” (In re Benjamin; Neville v Benjamin [1902] 1 Ch 723), is an order made by the Court that permits an executor to distribute the deceased’s estate on a particular factual basis notwithstanding there is some uncertainty about a factual matter relevant to the distribution, such as the existence of particular beneficiaries. The order protects the executor from liability if a person who has an entitlement subsequently appears, who will not be able to claim against the executor but may claim against beneficiaries who have been incorrectly paid out pursuant to the order: Application of NSW Trustee & Guardian [2014] NSWSC 1857 at [4] – [5]; see also generally, Gonzales v Claridades [2003] NSWSC 508 at [75]; NSW Trustee and Guardian (Estate of Peter Urso) [2013] NSWSC 903 at [39]; Application by NSW Trustee and Guardian (Estate of the late Marco Sijakovic) [2012] NSWSC 1532 at [23] – [25].

2. [12]

   A Benjamin order does not amount to a positive declaration of rights but enables the trust property to be distributed by an executor in accordance with the “practical probabilities” reflecting inferences from the proved facts: Hansell v Spink [1943] Ch 396; Re Green’s Will Trusts [1985] 3 All ER 355 at 462; Application of NSW Trustee & Guardian [2014] NSWSC 1857 at [5].

3. [13]

   Certainty of the factual position is not required before a Benjamin order is made. An order for a proposed distribution may be made where there is a measure of uncertainty, such as where inquiries have proved inconclusive or suitable advertisements for a missing beneficiary produces no responses. As Hallen J said in NSW Trustee and Guardian (Estate of Peter Urso) [2013] NSWSC 903 at [39]:

4. [14]

   In West v Weston [1998] NSWSC 419, Young J, as he then was, took the view that even for a Benjamin order, all that is required is that the Court should be satisfied that it is probable that the persons entitled on intestacy have been ascertained and that no further reasonable inquiries should be made which would improve the state of the evidence.

5. [15]

   The view of Young J in West v Weston [1998] NSWSC 419 has been supported and applied in subsequent cases: Re Meyerstein [2009] VSC 564; Application by NSW Trustee & Guardian (Estate of the late Marko Sijakovic) [2012] NSWSC 1532 and NSW Trustee & Guardian; Estate of the late Jan Szczudlik [2015] NSWSC 1529.

6. [16]

   Where there is any doubt about the proposed distribution, it is appropriate for an executor to seek advice under s 63 of the Trustee Act, which enables an executor as trustee to apply to Court for advice or a direction on a question regarding the management or administration of trust property, or under r 54.3(2) of the Uniform Civil Procedure Rules 2005 (NSW), which provides for proceedings to be brought for the determination of a question arising in the administration of an estate: Gonzales v Claridades [2003] NSWSC 508 at [57].

Determination

1. [17]

   In order to establish the factual basis for the orders sought, the NSW Trustee & Guardian has undertaken a variety of enquiries and searches to identify Maureen and Karin, the results of which are contained in and exhibited to the affidavit of Kelvin Kwan, a legal officer at the NSW Trustee & Guardian, sworn on 10 April 2019. Those enquiries and searches comprised:

2. [18]

   I am satisfied that the NSW Trustee & Guardian has carried out the necessary and proper investigations to locate Maureen and Karin and that there are no further reasonable enquiries that should be made and would be likely, in any event, to identify either of Maureen or Karin. The absence of any positive identification or response leads to the inference that they have died and will not be identified.

3. [19]

   The outcomes of the investigations undertaken to date do not completely exclude the possibility that Maureen and Karin survive the deceased or that the deceased provided the incorrect spelling for their names. Orders of the type proposed may be made despite a degree of uncertainty where the proposed basis of distribution is justified by facts as a “matter of practical certainty” or where the possibility that those facts might ultimately be false is a “remote contingency”: Application of NSW Trustee and Guardian [2014] NSWSC 1857 per Brereton J at [7]. In my view, this is such a case. The prospect that either Maureen or Karin are alive or will be identified as a beneficiary appears to be very remote.

4. [20]

   It is, therefore, appropriate to make the order sought that the NSW Trustee & Guardian be at liberty to distribute the estate of the deceased as if Maureen Paebslo and Karin Paebslo had predeceased the deceased. This will result in the other beneficiaries under the will sharing in Maureen and Karin’s gift in accordance with the allocations made to those other beneficiaries.

5. [21]

   Accordingly, I make the orders claimed in the summons in the terms of the short minutes of order handed up to the Court and initialled by me and dated today in the following terms:

   1. (1)

      The plaintiff be at liberty to distribute the estate of the late Dudley Keith Vaughan as if Maureen Paebslo and Karin Paebslo had predeceased Dudley Keith Vaughan.

   2. (2)

      The plaintiff’s costs be paid out of the estate of Dudley Keith Vaughan on an indemnity basis.