Re Estate Kleinlehrer, Deceased

The question for determination in this judgment is whether one of two executors named in a will (of the two plaintiffs, the first) who has intermeddled in the affairs of a deceased estate should be granted leave to renounce probate.

A third named executor (not a party to these proceedings) has filed a “Renunciation of Probate” in the Approved Form which contains a declaration that she had not intermeddled in the estate of the deceased. She may be taken to have renounced probate without qualification. She is not a necessary party to the proceedings.

The remaining two executors (the plaintiffs) applied for a grant of probate (by a summons filed on 21 August 2023) and, in the ordinary course, were met with requisitions from the Probate Registry. One of those requisitions drew to the executors’ attention that the first plaintiff is a barrister and that the will of the deceased contemplates that he would be remunerated for his work as an executor, thereby engaging rule 13 of the Legal Profession Uniform Conduct (Barristers) Rules 2015 NSW.

So far as is relevant, rule 13 is in the following terms:

Rules 14 and 15 are in the following terms:

As the will of the deceased, and a separate deed between the two plaintiffs and the deceased’s beneficiaries, contemplate that the first plaintiff be remunerated for his work as an executor, a decision was taken by the plaintiffs, quite properly, that the first plaintiff should apply to the Court for leave to renounce probate, leaving the second plaintiff, as the one remaining executor, to apply for probate on the basis that the two other persons named in the deceased’s will had renounced.

The law governing a general renunciation of probate remains, essentially, the general law; but subject to the Probate and Administration Act 1898 NSW (“the PAA”), section 69(a), read with section 41 of the Act and rule 17(1) of Part 78 of the Supreme Court Rules 1970 NSW (“the Probate Rules”) and the Court’s Approved Form 123. A general renunciation of probate stands in contrast with a renunciation of probate in favour of the NSW Trustee, governed by PAA section 69(a) and SCR Part 78 rules 17(1) and 18(2) and Approved Form 124.

Incidental reference needs also to be made to PAA section 75 (which provides a procedure, alternative to that found in PAA section 69(c), for dealing with a nominated executor who neglects or refuses to prove a will or to renounce probate) and the Trustee Act 1925 NSW section 10, which provides inter alia that “[if] a person who is appointed by will both executor and trustee thereof renounces probate, or after being duly cited fails to apply for probate, the renunciation or failure shall be deemed to be a disclaimer of the trust contained in the will.”

PAA sections 41 and 69 are in the following terms (with emphasis added):

SCR Part 78 rules 17 and 18 are in the following terms (with emphasis added):

The Court Approved Form (number 123) for a renunciation of probate requires the person renouncing probate to sign a declaration in substantially the following terms:

The general law governing renunciation of probate is informed by the purpose of the law and the means available to a court to serve that purpose. It is closely aligned with the law’s concern to address problems arising from the conduct of a person who, without a grant of probate or administration, “intermeddles” with estate property, and with the concepts of an executor, executor de son tort; probate, devastavit, fiduciary obligations and the due administration of a deceased estate.

These concepts, together with that of “intermeddling” itself, are products of historical developments in which (characteristically of probate law and practice) modern distinctions between substantive and adjectival law are not everywhere to be found and the different perspectives of common law, equity and ecclesiastical courts in the Anglo-Australian tradition have made pragmatic contributions.

Although learned judges (such as Needham J in Mulray v Ogilvie (1987) 9 NSWLR 1) have sought principled consistency in precedential reasoning, based on a collation of particular decisions, any quest of that nature, in search of universal rules, courts disappointment. Attention must, rather, focus upon the overarching purpose of an exercise of probate jurisdiction, pragmatically applied.

I draw comfort from the following observations of Needham J in Mulray v Ogilvie:

At a high level of abstraction the purpose of the law is to facilitate the orderly administration of a deceased estate, including protection of the interests of beneficiaries and creditors as persons who have an interest in due administration of the estate and ensuring that a person who has dealt with estate assets, or otherwise interfered with administration of an estate, without due authority can be held accountable to the estate.

By requiring a person who seeks to renounce a right to apply for a grant of probate to declare that he or she has not intermeddled in the estate, or to submit to orders of the Court addressing problems arising from intermeddling, the Court has an opportunity to facilitate the orderly administration of an estate.

Whether a person has intermeddled in an estate is a fact-sensitive question. A person may be found to have intermeddled if he or she has taken steps to administer the estate indicative of acceptance of the office of an executor, or taken possession or control of estate assets (or otherwise dealt with them) so as to render himself or herself accountable to beneficiaries or creditors of the estate. Conduct limited to steps taken to preserve estate assets may be classified as not constituting intermeddling: Howling v Kristofferson (Supreme Court of NSW, Cohen J, 14 October 1992, unreported) BC 9201556 at [11]-[16].

The concept of an executor de son tort is explained in Hutley, Woodman & Wood, Succession: Commentary and Materials (Lawbook Co, Sydney, 4th ed, 1990) at page 268 in the following terms (with editorial adaption and omitting case references):

The rationale and historical derivation of the concept of an executor de son tort is explained in GE Dal Pont, Law of Succession (Lexis Nexis, Australia, 3rd ed, 2021) at [10.15], (with editorial adaption and omitting footnotes):

A convenient summary of the general law governing a renunciation of probate can be found in the Queensland Law Reform Commission’s Report No 65 of April 2009 entitled Administration of the Estates of Deceased Persons: Report of the National Committee for Uniform Succession Laws to the Standing Committee of Attorneys General.

As will become apparent, in this judgment I take issue with an observation in paragraph [4.28] of the Report about a limitation on the liability of an intermeddling executor (or an executor de son tort) to account for intermeddling conduct, a factor which may bear upon whether an intermeddling executor should be granted leave to renounce probate.

Chapter 4 of Volume 1 of the Report (entitled “Appointment of Personal Representatives”) includes the following summary of the law, here reproduced without footnotes, in an editorially adapted form and with emphasis added:

That the purpose of the law governing renunciation of probate is to facilitate an orderly administration of a deceased estate is confirmed by authorities to the effect that PAA section 69 (which provides that, upon a renunciation of probate, “the right” of a renouncing executor “in respect of the executorship shall wholly cease”) does not prevent a renunciation being retracted (withdrawn) with the leave of the Court on a proper cause shown: Re Estate of Daphne Lillian May Thurston [2001] NSWSC 144 (Young CJ in Eq); Re Lim [2020] NSWSC 322; 20 ASTLR 158 (Hallen J).

Whether an executor is granted leave to renounce probate, or to retract a renunciation, an underlying feature of the law governing renunciation of probate is that the process is “at all times under the control of the Court”, to quote the leading Australian judgment, In the Will of Lyndon [1960] VR 112 at 114 (Pape J).

To this, I would add (and it is not disputed in these proceedings, but needs to be made explicit) that a renunciation of probate (or a grant of leave to renounce probate) does not, of itself, operate as a release of a renouncing executor from any liability he or she might have arising from his or her intermeddling in an estate.

The authorities do not, in terms, suggest otherwise; but I apprehend that:

Subject to the terms of the order, an order granting an intermeddling executor leave to renounce probate should not be taken to operate to absolve the executor from any liability which, but for his or her renunciation of probate, he or she would otherwise have had arising from his or her conduct before renunciation.

In Re Lyndon [1960] VR 112 at 115, Pape J made the following cautious observations, with emphasis added:

In the context of an application by an intermeddling executor for leave to renounce probate, I am not comfortable with the binary distinction implicit in the proposition that the executor “is liable only for what he has actually received, and is not liable to account on the basis of wilful default”. An intermeddling executor may have acted to the detriment of an estate without “actually receiving” estate property. This might have occurred, for example, by provision of negligent advice not involving a receipt of property by the executor.

For completeness, I note that the concept of a liability to account on the basis of wilful default generally refers to accounts being taken on the footing that the accountable party is liable not only for sums actually got in, but for all monies which, without his or her wilful neglect or default, might have been possessed or received: Osborn’s Concise Law Dictionary (Sweet & Maxwell, London, 10th ed, 2005), page 8; Armitage v Nurse [1998] Ch 241 at 252C-D.

I acknowledge the force of the following observations in GE Dal Pont, Law of Succession (Lexis Nexis, Australia, 3rd ed, 2021) at [10.19] (omitting footnotes, with emphasis added):

In these observations I am uncomfortable with the proposition that “an executor de son tort, having no obligation to get in estate assets, cannot by definition be liable in respect of assets he or she has not dealt with”. That proposition is based upon language that implicitly assumes that the liability of an intermeddling executor who seeks to renounce probate is limited to “assets the subject of the intermeddling” and does not extend to liability “in respect of assets he or she has not dealt with”, apparently in the sense of “getting in estate assets”.

The proposition, baldly stated, is commonly repeated as if an inflexible, self-evident rule of law (but, commonly, in the context of a discussion about the nature of intermeddling or whether a right to renounce probate is available to an intermeddling executor): eg, Re Orloff [2010] VSC 48; 3 ASTLR 260; Re Estate of Abat, Deceased [2020] VSC 560 at [32].

A more nuanced treatment of the topic is found in Griffin v Coe [2012] NSWSC 412 at [25] and [28] (Davies J):

On an intermeddling executor’s application for leave to renounce probate there may be an element of risk management directed to protection of an estate (and, ultimately, beneficiaries and creditors of the estate). Even if, as I accept in the current proceedings, the first plaintiff has made a bona fide endeavour to disclose the full nature and scope of his or her intermeddling the risk of an unanticipated claim cannot be excluded, particularly as the practice of the Court does not ordinarily extend to requiring an application for leave to be advertised at large. For that reason, I prefer to focus on the proposition that a grant of leave to renounce probate (or a renunciation) does not, of itself, operate as a release of a renouncing executor from any liability he or she may have arising from his or her intermeddling in an estate.

There is, moreover, or may be, artificiality in the operation of a proposition that an intermeddling executor who applies for leave to renounce probate “is liable only for what he has actually received, and is not liable to account on the basis of wilful default” in circumstances in which:

It is not necessary for me, in these proceedings, to dwell on the question of “compulsion” beyond extracting the following extract from Stephen Janes, David Liebhold and Paul Studdert (eds), Wills, Probate and Administration Law in New South Wales (Lawbook Co, Sydney, 2nd ed, 2020) at [PAA.69.30]-[PAA.69.50], omitting footnotes, with editorial adaption and emphasis added:

Where only one of two jointly intermeddling nominated executors takes a grant of probate a question may arise as to whether the fact of taking the grant increases his or her liability, a question raised, but not determined, by Vaughan Williams LJ in In re Stevens [1898] 1 Ch 162 at 178:

These observations were made on appeal from a judgment (reported as In re Stevens [1897] 1 Ch 422) in which it was held that the executor who had not proved the will, having informally accepted the office of executor, could not renounce probate and was liable (with the executor who did prove the will) to account as an executor for what he had received on behalf of the deceased’s estate. In the absence of a finding of devastavit, both executors were required to account on a common (not a wilful default) basis.

On the analysis of the law, and probate practice, in Janes, Liebhold and Studdert the approach to be taken to an application for leave to renounce probate may depend upon the Court’s perception of whether an intermeddling executor has omitted to do things which he or she “ought” to have done rather than factors directed specifically to due administration of an estate. As the editors notice in a footnote, an executor forced to apply for probate may inevitably be an “unsuitable person” to perform the duties of the office of an executor.

In any event, the utility of an order that a nominated executor be compelled by a direction of the Court to take probate may be doubtful in light of PAA section 69(c), which attributes the effect of a renunciation to a failure to comply with the Court’s direction.

In my opinion, the Court’s focus should be, and at all times remain, on what is required for the due administration of an estate. If an intermeddling executor applies for leave to renounce probate that application should be determined (with or without the imposition of terms) by reference to what is required for due administration of the deceased’s estate.

Ultimately, the personal liability of an intermeddling executor to account to an estate (in essence, creditors and beneficiaries) for losses incurred, or unauthorised gains, depends upon the nature and scope of conduct of the intermeddler in his or her assumption of the role of an executor, or his or her engagement with the process of administration of an estate, rather than a putative rule that he or she “is liable only for what he or she has actually received and is not liable to account on the basis of wilful default”. The gravamen of an intermeddler’s liability is his or her conduct, giving rise to a liability to account for losses or unauthorised gains, not limited to an “actual receipt” of property but including, for example, negligence in administration of an estate.

Part of the problem in analysing questions about intermeddling and a renunciation of probate is that discussion proceeds by reference to discrete topics rather than by express reference to the broader question of what is required for the due administration of an estate.

Re Estate Abat, Deceased [2020] VSC 560 at [45]-[46] (McMillan J) illustrates the correct focus (although her Honour did not address the question of the intermeddling executor’s liability to account to the estate in which she intermeddled), reproduced here with editorial adaptation and emphasis added:

The principle identified by her Honour as informing an exercise of the Court’s inherent jurisdiction was implicitly on show in her Honour’s judgment in Re Burstyner [2021] VSC 531 at [28], where she held that an executor’s renunciation of probate need not preclude an application for a grant of representation of an estate in another capacity, however, the discretion whether or not to make a grant in another capacity is left to the court.

The necessity for a broad overview of estate administration in the context of an application for leave to renounce probate is illustrated by the following extract from GL Certoma, The Law of Succession in New South Wales (Lawbook Co, 4th ed, 2010) at paragraph [13.20], pages 255-256 (omitting footnotes, with emphasis added), which nevertheless embraces (as do other texts) an axiomatic view of an executor de son tort’s “limited” liability:

Having reviewed case law and modern probate texts, I am inclined to the view that the proposition that “an executor who has administered the estate without taking probate is liable only for what he has actually received, and is not liable to account on the basis of wilful default” is essentially an intuitive acceptance of the logical reasoning articulated in Dal Pont’s Law of Succession (extracted in paragraphs [20] and [32] above) and Certoma’s The Law of Succession in New South Wales (extracted in paragraph [48] above) that “an executor de son tort, having no obligation to get in estate assets, cannot by definition be liable in respect of assets he or she has not dealt with”.

Beyond logic, the proposition under review has ostensibly derived authority more by repetition than by concrete examples of intermeddling executors who have been held to account. Many of the authorities relied upon in legal literature dealing with a renunciation of probate and associated concepts are of ancient (or, at least, not a recent origin). In reading cases, practice books, textbooks and commentary on probate law and practice care needs to be taken in the application of old authorities to modern problems in the administration of a deceased estate. Rules of law and rules of practice often tend to be intermingled. What to one era might be perceived as a rule of law might to another be viewed as a rule of practice, and vice versa. What is generally constant, however, is that all rules are informed by the purpose they serve; namely, the due administration of a deceased estate.

This can be seen in a foundational case for the equitable principle that the office of an executor is prima facie a gratuitous one. In Robinson v Pett (1734) 3P.WMS.249; 22 ER 1049 Lord Chancellor Talbot held that a nominated executor who had renounced probate (but remained at liberty to accept the office of an executor) could not evade “the established rule” against unauthorised remuneration of an executor:

Tying the liability of an intermeddling executor who, with the leave of the Court, renounces probate to the concept of an executor de son tort has an appearance of logical coherence unless one appreciates that the concept of an executor de son tort has itself been regarded as an anomalous but expedient device to protect the interests of creditors and beneficiaries in an era in which an executor’s title to an estate derived solely from a testator’s will without a need for a prior grant of probate by a court: FC Hutley “The Executor De Son Tort in the Law of New South Wales” (1952) 25 ALJ 716; Joseph Warren, “Problems in Probate and Administration” (1918-1919) 32 Harvard Law Review 315. Hutley (who ultimately found his way to the Court of Appeal) was the leading probate lawyer of his generation.

The following extract from the paper of Joseph Warren drawn to attention by Frank Hutley (with editorial adaption, footnotes omitted and emphasis added) places the concept of an executor de son tort in historical context:

Re Lyndon was not a case in which the (potential or actual) liability of an intermeddling executor seeking leave to renounce probate was an issue. Pape J was satisfied that all beneficiaries of the deceased’s estate were adults and, with the benefit of legal advice, had given their fully informed consent to the executor’s application for leave to renounce probate. He was also satisfied that no creditors of the deceased would be adversely affected by a renunciation of probate.

His Honour’s judgment is reported principally as an application of the Irish judgment of Warren J in In the Goods of Honoria Fitzpatrick (1892) 29 LR (Ir) 328 on the question (answered in the affirmative) whether the Court had power to accept an intermeddling executor’s renunciation of probate. In that case, Warren J doubted that any intermeddling of the executor before him had been sufficient to render the executor an executor de son tort (he had only sought to preserve the estate); the only person interested in the estate consented to the executor’s renunciation; and it would have been a hardship on the executor to refuse his application for leave to renounce. Warren J relied upon the 8th edition of Williams on Executors as a work of high authority.

The authority relied upon by a Pape J in Re Lyndon in support of the proposition that “[the] law appears to be that an executor who has administered the estate without taking probate is liable only for what he has actually received, and is not liable to account on the basis of wilful default” is the judgment of Vice-Chancellor Shadwell in Lowry v Fulton (1839) 9 Sim 104; 59 ER 298.

The headnote of that judgment includes a statement that appears to have taken on a life of its own:

That statement is preceded by recognition that, on the facts of the case, the executor sought to be charged had never applied for probate or acted in the capacity of an executor. He had acted only as an agent for a co-executor who had held himself out and acted as such.

Relying upon a judgment of the Privy Council in Orr v Newton (1791) 2 Cox Eq Cas 274; 30 ER 127, Shadwell VC made the following observations:

Lowry v Fulton involved a claim by residuary beneficiaries for compensation for neglect on the part of an executor to withdraw funds invested in a company before the company failed. The executor who had, and exercised, decision-making responsibility for investment of the estate was not, in the subject proceedings, sued. The beneficiaries sued instead an executor who had not applied for probate and who denied that he had acted, or intended to act, as an executor, claiming to have been no more than an agent for the active executor. He having died during the course of the proceedings, his widow (as executrix of his will) was sued in his stead.

In concluding his judgment Shadwell VC stated the following (with emphasis added):

The judgment of the Privy Council in Orr v Newton relied upon in Lowry v Fulton may be read as going no further than its headnote:

The defendant was one of three executors who “acted” in relation to a deceased estate. Only one of them proved the will of the deceased. He undertook to act solely, and did act solely, until he died. After his death the other two executors joined in acting, but the defendant acted only with, and under the advice of, his surviving co-executor (who was a “professional man”) and with “no act of receipt, payment, activity, or interference” proved against him during the life of the professional man. Upon the death of the professional man the defendant acted alone. In acting alone, “he did his utmost to possess himself of the testator’s effects, and took the best advice to be had”. Lord Camden, in announcing the decision of the Privy Council, accepted that the defendant seemed “to have been more than ordinarily industrious, and there is no colour to charge him with fraud, dishonesty, or embezzlement”.

The plaintiff, representing residuary beneficiaries, charged the defendant with not having recovered a debt (secured by a mortgage) due at the testator’s death. Throughout the time he had been acting alone, following the death of the professional man, he had been endeavouring to recover the debt without effect, and therefore was not able to account to the plaintiff for the amount of it.

The plaintiff’s suit was brought 21 years after the deceased’s death, in circumstances in which, after the payment of two legacies, the residue of the estate had been paid to the beneficiaries represented by the plaintiff. The Board held that, unlike the defendant, the deceased’s beneficiaries must have known of neglect in recovery of the debt, ostensibly secured by a mortgage which was apparently good security but ultimately became deficient.

I infer from the Board’s judgment that the beneficiaries themselves had taken no steps to call for payment of the debt and that the defendant had no reason to suspect the solvency of the debtor. If the beneficiaries had demanded that he take action to recover the debt, “the want of a probate in [the defendant] would have been a bar to his recovering in any suit whatever”.

The defendant submitted “to account for his own single acts” and was not required to do more. The Board concluded that “[as] the court below, upon [the facts here summarised] charged [the defendant] with the whole original mortgage money and interest, we cannot but think they have done wrong”.

[It did not help the plaintiff’s case that he had apparently bid at a sale of the mortgaged estates and, had he “kept his contract”, the estate would have been sold for much more than it did at last.]

This case is not a strong foundation for the proposition that “an executor who has administered the estate without taking probate is liable only for what he has actually received, and is not liable to account on the basis of wilful default”. On the facts found, there was no wilful default by the defendant. There was nothing that he “ought” to have done that he did not do. He was innocent of any wrongdoing. The beneficiaries who sought to hold him to account for something they contended he “ought” to have done were themselves neglectful of their own interests in administration of the estate.

In Re Lyndon, Pape J cited In the Goods of Badenach (1864) 3 Sw&Tr 465; 164 ER 1355 as an illustration that to allow an executor who has intermeddled in an estate to renounce probate might well seriously affect the rights of beneficiaries. It was relied upon for nothing more than that. And in that case, after an executor had been held liable to an infant beneficiary, in separate Equity proceedings, as having (in common with a co-executor) accepted the trusts and executorship of the deceased’s will before renunciation, he himself applied to the court for a declaration that his renunciation was invalid. On his own application, the renunciation (on an incorrect statement that he had not intermeddled in the estate) was held not to be valid because, at the time he renounced, he was “not in a position to execute the renunciation”. The renunciation was formally declared invalid and the executor was given leave to take probate of the will.

Incidentally, in the course of argument as briefly reported in Badenach, the Probate Judge (Sir JP Wilde) is recorded as having said that there was nothing in the Court of Probate Act 1857 UK, the equivalent of PAA section 69(a), that operated to prevent the court from allowing a retraction of a renunciation “according to the old practice in a case fit for it”.

The idea that “an executor who has administered the estate without taking probate is liable only for what he has actually received and is not liable to account on the basis of wilful default” may have its roots in common law reasoning if it is correct (as Latham CJ appears to have held in National Trustees Executors and Agency Co of Australasia Limited v Dwyer (1940) 63 CLR 1 at 18) that “[a] personal action against an executor in which the plaintiff relies upon a devastavit” is “an action on the case”, implicitly a tort, a description called into question by Perram J in a paper entitled “The [Origins] and Present Operation of the Action in Devastavit” [2012] (FCA) FedJSchol [Federal Judicial Scholarship] 23, commended in Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (Sweet & Maxwell, London, 21st ed, 2018), page 954 ([52-02]), footnote 7.

Latham CJ’s characterisation of a devastavit claim as an “action on the case” was directed to consideration of a “personal action” against an executor as distinguished from an “administration action” for an order that an estate be administered by the court. That distinction was expressly noted by Starke J (at 63 CLR 30) and Dixon J (at 63 CLR 36).

The context in which the Chief Justice characterised a personal action against an executor as an action on the case and, implicitly, as a tort appears in the following extract of his judgment (at 63 CLR 17-18):

One of the cases relied upon by the Chief Justice (In Re Blow [1914] 1 Ch 233) expressly referred to a devastavit claim as a “tort”, more explicit in that characterisation than Latham CJ’s characterisation of a personal action in devastavit as an action on the case.

Latham CJ’s implicit characterisation of a devastavit claim as tortious may at best draw qualified support from Sir Francis Buller’s classic common law practice text, An Introduction to the Law Relative to Trials at Nisi Prius (London, 7th ed, 1817) which treats devastavit under the headings of assumpsit (an action in trespass on the case, but generally seen as contractual or “quasi-contractual” restitutionary in nature), as well as debt (paragraphs [141a] and [169a]), the remedy for which would be a judgment in a money sum for the payment of damages or a debt.

The context in which Latham CJ discussed the characterisation of “devastavit” was one in which the question was whether a claim was barred by a Limitation Act. So too were each of the cases principally relied upon by his Honour: Thorne v Kerr (1855) 2 K&J 54; 69 ER 691; In re Gale (1883) 22 ChD 820; In re Hyatt (1888) 38C 8D 609; Lacons v Warmell [1907] 2 KB 350, 361; and In re Blow [1914] 1 Ch 233, 240. That context may not have lent itself to a definitive treatment of the jurisprudential origins of particular types of claim in the context of what is necessary for the due administration of a deceased estate because the focus was upon characterisation of a claim for the purpose of particular legislation and outcomes did not necessarily depend upon differences between law and equity.

Be that as it may, the current edition of Williams, Mortimer & Sunnucks (as the following extract demonstrates) is dismissive of characterisation of an action in devastavit as a tort.

Citing Bacon’s Abridgement (an ancient legal encyclopaedia) under the heading “Executors”, paragraph [52-02] of Williams, Mortimer and Sunnucks defines devastavit in the following terms with editorial adaption and (omitting footnotes):

The final section of this paragraph recognises the shift in focus from a cause of action governed by “tort law” (or a restitutionary cause of action at common law) to an administration suit in equity under “modern doctrine”. Characterisation of “a devastavit” as a tort or by reference to another common law cause of action (such as “quasi-contract” or debt) is not to be displaced by recognition that most devastavit actions are in “modern” times procedurally subsumed in an administration suit, characteristic of an exercise of equity jurisdiction.

In a system of court administration that favours a partial administration suit (authorised by UCPR rule 54.3 or an equivalent provision) over a general administration order (explained in McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623) differences in the approaches of common law and equity to devastavit (more commonly called “waste”) might have no significance outside the context of a Limitation Act.

Older texts (such as the 1829 edition of Wentworth, The Office and Duty of Executors; Williams’ 1841 edition of his Treatise on the Law of Executors and Administrators; and Holdsworth and Vickers’ The Law of Succession, here extracted) do not discuss devastavit in the context of a breach of fiduciary duty. Although the essential concept of a “fiduciary” predates the 19th century its modern usage as a routine expression dates from the mid-19th century: Paul Finn, Fiduciary Obligations (Lawbook Co, 1st ed, 1977; Federation Press, Republication, 2016), page 1, paragraph [2]; LS Sealy, “Fiduciary Relationships” (1962) 69 Cambridge Law Journal 69 at 71-72.

Perhaps the best and most authoritative account of how an action in devastavit played out in the days when court procedures were defined in shorthand Latin is found in the judgment of Dixon and Evatt JJ in Levy v Kum Chah (1936) 56 CLR 159 at 167-173. A useful exposition of old style thinking about an action of devastavit and defences to such an action can be found in a paper by Archie J Rabinowitz published as “Plene Administravit: Obscure but not Obsolete” (2009) 28 Estates, Trusts & Pensions Journal 110.

The different roles of the common law and equity in dealing with “devastavit” (or “waste”) can be found in WS Holdsworth and CW Vickers, The Law of Succession: Testamentary and Intestate (Oxford, 1899) at pages 222-223, here extracted with footnotes integrated in the text and emphasis added:

In this treatment, as in other texts, an assumption is that the liability of “a representative” was tied to possession of estate assets.

Even if one accepts that the proposition that “an executor who has administered the estate without taking probate is liable only for what he has actually received and is not liable to account on the basis of wilful default” has a foundation in older case law, practice books or textbooks based upon them, an axiomatic confinement of the liability of an executor de son tort to “what he has actually received” is not consistent with developments in the law (evidenced by equitable principles governing fiduciary relationships, the common law’s expansion of liability for negligence and evolving concepts of property to include, for example, intellectual property or confidential information) or the way deceased estates are commonly administered by professionally qualified lawyers, accountants and financial advisors.

In any event, neither a grant of leave to renounce probate nor a renunciation of probate should, of itself, be taken to release an intermeddling executor from such, if any, liability he or she might have arising from the fact of intermeddling. Whether an intermeddling executor has, in fact, a liability arising from intermeddling, and the nature and scope of any such liability, should be open for determination when (a remedy having been sought or specifically identified) all the facts of the case can be considered.

Depending upon the nature of his or her intermeddling, an intermeddling executor who is or may be personally liable for a breach of trust may seek from the Court an order that he or she be relieved from personal liability on the basis that he or she has acted honestly and reasonably and ought fairly to be excused: Trustee Act 1925 NSW, section 85, read with the definitions of “trust” and “trustee” in section 5: JD Heydon and MJ Leeming, Jacobs’ Law of Trusts in Australia (Lexis Nexis Butterworths, Australia, 8th ed, 2016), paragraph [22.12]; Re Kay [1897] 2 Ch 518 at 521; National Trustees Executors and Agency Co of Australasia Ltd v Dwyer (1940) 63 CLR 1 at 30-31; University of Adelaide v Attorney General (SA) [2018] SASC 82; (2018) 18 ASTLR 11 at [51]; JD & KZ Zohs Properties Pty Ltd v Ferme [2015] SASC 55 at [60] (all cases dealing with an executor, not an executor de son tort).

The expression “trust” is defined by section 5 to include “implied and constructive trusts, and cases where the trustee has a beneficial interest in the trust property, and the duties incident to the office of legal representative of a deceased person”. An intermeddling nominated executor who does not apply for a grant, or who renounces probate, may be a constructive trustee (of property) and is ordinarily judged by reference to the duties incident to the office of a legal personal representative.

In an appropriate case, the expansive definition of “trust” in the Trustee Act 1925 may invite consideration of other provisions of the Act. For example, section 59 provides that a trustee is “chargeable only for money and securities actually received by the trustee” and is “answerable and accountable only for the trustee’s own acts, receipts, neglects, or defaults, and not for those of any other trustee … unless the same happens through the trustee’s own wilful neglect or default”. Section 86 provides that “[where] a trustee commits a breach of trust at the instigation or request of, or with the written consent of a beneficiary, the Court may, if it thinks fit, make any such order as to the Court seems just for impounding all or any part of the interest of the beneficiary in the trust estate by way of indemnity to the trustee or person claiming through the trustee”.

These proceedings concern the estate of Aron Kleinlehrer (“the deceased”) who died on 20 January 2023 leaving a will dated 1 January 2013 and an estate (ostensibly free of debt) valued at about $36.7 million.

The wife of the deceased died in October 2015, leaving a will dated 1 January 2013 probate of which was granted to the plaintiffs on 12 December 2023. That will provided for the deceased (as he is in these proceedings) to have a life interest in the matrimonial home (with a gift over in favour of an unrelated entity) and named the deceased as the sole residuary beneficiary.

Predeceased by his wife, the deceased was survived by his two children (Robert and Esther) and their respective children, his grandchildren, totalling five in number.

The deceased’s will named as “executors and trustees” of his estate the two plaintiffs and a third person who has uncontroversially renounced probate. Clause 4(b) of the will expressly provides that, if a “Trustee” renounces or is otherwise unable to continue acting as Trustee, the remaining Trustees or Trustee will become the Trustees of my estate, and if only one of them, will become the sole Trustee of my estate”.

The will was drafted by the first plaintiff (formerly a solicitor) and bears a back sheet that identifies him as a “barrister” with a residential address which I take to be his home address, not a professional address.

The will contains a number of specific gifts (some of them subject to conditions) and names the deceased’s five grandchildren as residuary beneficiaries. Gifts in favour of the deceased’s children are expressed to be conditional.

The will provides, in terms, for each of the three named executors to receive a specific, indexed annuity (in a different amount for each executor), with provision for the payment of a capital sum on the 10th anniversary of the deceased’s death and another capital sum upon finalisation of the deceased’s affairs or upon a particular grandson attaining the age of 21 years, in lieu of any other entitlement they may have to remuneration.

The first plaintiff’s intermeddling was active and extensive (although ostensibly limited in nature and scope) over a substantial period of delay in administration of the estate attributed to a need to investigate the deceased’s affairs and to consider how best to resolve disputes involving parties outside the deceased’s family circle. It was not limited to preservation of estate assets.

Both plaintiffs must be taken to have accepted their appointment as executors, and the burdens of that office, in anticipation of an application for probate being made. In the meantime, no application was made for an interim grant of administration. The affairs of the estate were not obviously neglected but, rather, managed informally, I infer with the acquiescence of the deceased’s family.

The first plaintiff seeks now to renounce probate because a failure or refusal to do so could expose him to disciplinary proceedings as a barrister. His application for leave to renounce probate is dictated by the prudence of doing so in that context, not an abstract unwillingness or incapacity to perform the obligations of an executor.

His renunciation of probate, if leave is granted, will come at the cost to him of disclaiming a substantial entitlement to remuneration which the family of the deceased (by a Deed of Arrangement dated 6 July 2023) agreed to pay him for work undertaken in administration of the deceased’s estate. By consenting to his application for leave, I take it that the deceased’s family has agreed to release him from any obligation he may otherwise have had under the Deed to apply for probate of the deceased’s will and to act as executor and trustee in administration of the deceased’s estate.

In an affidavit affirmed on 23 April 2024 the first plaintiff deposes to his “intermeddling in the deceased’s estate”. As disclosed in the affidavit, that “intermeddling” largely involved his conduct (in common with the second plaintiff) in instructing the estate’s solicitors about steps taken by or through the solicitors in administration of the estate, in relation to dealings with third parties, in preparation of the plaintiffs’ application for probate and dealing with requisitions, in anticipation of an application for judicial advice relating to management of the deceased’s estate in light of events that occurred between the date of his will and the date of his death, and in a response to claims made by each of the deceased’s children for a family provision order under Chapter 3 of the Succession Act 2006 NSW.

It is difficult to imagine that the first plaintiff did not bring to bear upon the steps taken by the plaintiffs in administration of the deceased’s estate his professional experience as a lawyer. Nor is it difficult to imagine that his professional expertise was a factor in the deceased’s family agreeing (in the Deed of Arrangement dated 6 July 2023) to allow him, as an executor, a higher rate of remuneration than that for which the deceased’s will provided.

The first plaintiff’s affidavit discloses that the plaintiffs have incurred legal costs with respect to the instructions given by them to the estate’s solicitors. I am assured, however, that those costs can and will be paid out of the estate of the deceased by the second plaintiff should a grant of probate be made to her and that no beneficiary objects to that course.

The affidavit includes the following express declarations:

In relation to administration of the related estate of the deceased’s wife the affidavit contains the following statements:

Under the heading “Creditors of the Estate [of the deceased] at the Date of Death”, the first plaintiff deposes that “[at] the time of the filing of the probate application [by a “summons for probate” filed on 21 August 2023] the deceased’s estate had a net value of $36,784,570.74 and had no liabilities as set out in the “affidavit of executors” affirmed by the plaintiffs on 17 August 2023.

The “inventory of property” annexed to the “affidavit of executors” identifies as assets of the deceased’s estate eight parcels of land, several bank accounts, shares in two private companies and the deceased’s interest in the estate of his wife, as well as household furniture and personal effects with the total estimated value of $36,784,570.74. The inventory also discloses that the deceased died with bank investments held outside New South Wales, with an estimated value in excess of $1 million.

The plaintiffs’ disclosure of intermeddling extended, in response to inquiries made by the Court, to disclosure of three deeds entered into by the plaintiffs in their assumed capacity as executors of the estate of the deceased. The first in time was the “Deed of Arrangement” dated 6 July 2023 earlier mentioned. On 15 December 2023 a “Deed of Indemnity” was entered into between the plaintiffs, the deceased’s family and an unrelated entity relating to administration of the deceased’s estate. On 6 March 2024 a “deed of release” was entered into by the plaintiffs in their capacity as executors, the deceased’s family and two unrelated entities relating to administration of the deceased’s estate.

It is not necessary for the purpose of this judgment to articulate the terms of any of these deeds or to place on record the nature of confidential settlements with parties unrelated to the deceased’s family.

The first plaintiff’s application for leave to renounce probate is supported by the second plaintiff as his co-executor and (leaving aside the two unrelated entities who have entered into a Deed of Release) is the subject of what appears to be fully informed consent on the part of the deceased’s beneficiaries, all of whom are adults, independently advised.

The second plaintiff’s support for the first plaintiff’s application has been given notwithstanding my expression of a concern that her interests and those of the first plaintiff may be in conflict. No such concern appears to be shared by either plaintiff or any beneficiary.

On the evidence before the Court, the deceased’s estate is without any substantial liabilities beyond a liability for legal costs arising from work done by or through the solicitors acting (upon instructions of the plaintiff) on behalf of the estate. The beneficiaries’ consent to the first plaintiff’s application for leave to renounce probate and the second plaintiff’s application that she be granted probate as a sole executor can be taken to extend to an acceptance that all legal fees payable by the plaintiffs to date can, and will, be paid from funds amply available in the estate.

The due administration of the deceased’s estate is unlikely to be prejudiced in any substantial way by the first plaintiff’s renunciation of probate and entrustment of administration of the estate to the second plaintiff alone.

On the other hand, any insistence by the Court that the first plaintiff adhere to his application for a grant of probate would expose him to a risk of disciplinary proceedings by reason of the prohibitions contained in rule 13 of the Legal Profession Uniform Conduct (Barristers) Rules 2015 and, incidentally and unnecessarily, potentially embroil the estate in a controversy collateral to a due administration of the estate.

For these reasons, I propose to grant the first plaintiff’s application for leave to renounce probate.

Having heard from the plaintiffs’ counsel, I propose to facilitate administration of the deceased’s estate by waving outstanding requisitions and making orders for a grant of probate, in common form, to be made to the second plaintiff without further delay.

Upon an assumption that all executorial duties of the plaintiffs in administration of the estate of the deceased’s late wife have been performed, and that the plaintiffs presently hold her estate on trust for the estate of the deceased, I propose, subject to allowing the parties an opportunity to be heard, to order, not that the grant of probate made to the plaintiffs be revoked and a fresh grant be made to the second plaintiff alone, but that (as contemplated in Profilio v Profilio [1999] NSWSC 657 at [33]-[34] and McKerracher v McKerracher [2011] NSWSC 1288 at [10]-[14], departing from the usual practice noted in Riccardi v Riccardi [2013] NSWSC 1655) to order that the first plaintiff be removed from the office he presently holds as a trustee and that the second plaintiff be confirmed in her office as trustee, taking care to endorse the original grant of probate with a notation of those orders so as to preserve its currency as an instrument of title. As presently advised, I propose to make orders to that effect in the proceedings in which the plaintiffs were granted probate of the will of the deceased’s wife.

In my assessment prudence dictates that the first plaintiff cease to have any role to play in administration of either of the two estates under present consideration.

Subject to allowing the parties an opportunity to be heard as to the form of the orders to be made, and costs, I propose to make orders to the following effect:

I have been invited to make an order that commercial documents tendered in evidence (as Exhibit “MP-2” to an affidavit affirmed by Martin Pooley, solicitor, on 29 April 2024) either be made the subject of a confidentiality order or be returned to the plaintiffs’ solicitors. I decline to take either of those proposed courses. In my opinion, it is sufficient if the exhibit be placed in an envelope marked “Not to be opened without the leave of a judge”. The exhibit should remain in the custody of the Court in case, for proper cause shown, reference needs to be made to it in the course of administration of the deceased’s estate.

On 30 May 2024 Lindsay J made orders and notations substantially to the effect proposed in paragraphs [120] and [121] of these reasons for judgment, noting that the original of the will admitted to probate had been deposited in the Court. Counsel for the plaintiffs also foreshadowed an application in the estate of the deceased’s wife for orders of the nature identified in paragraph [118] of the reasons.