Estate of Boes

The plaintiff, Douglas John Eaton, is the executor named in the will of the late Christian Heinrich Boes (“the deceased”) dated 23 December 2022 who died on 16 February 2025 aged 93. The defendant, Dr Sabine Annegret Charlotte Boes, is the eldest of the deceased’s 2 children. The plaintiff sought that he be appointed as interim administrator of the deceased’s estate. The defendant sought the appointment of an independent interim administrator.

The proceedings were commenced urgently in the Probate list late in the afternoon of Tuesday 11 March 2025, less than four weeks after the deceased’s death. An interlocutory hearing took place on Thursday 13 March 2025. The deceased was a small business owner, operating a plant nursery in Ourimbah, (known as "Big Flower") on the Central Coast of this State. The immediate need to support and curate the nursery stock led to this urgency.

The Court made orders on 20 March 2025 appointing the plaintiff as the administrator of the deceased’s estate. But the Court has placed limits and close controls on the plaintiff’s exercise of powers to administer the estate, until a full grant of administration is made.

The orders made in this case demonstrate that the frequent struggles in the Probate jurisdiction to take interim control of estates often represent a nearly illusory contest. The perceived benefits of control are dubious. If one of the competing parties is appointed, the Court may fashion orders, as it has done here, that require the party given the appointment to share information on a regular basis, consult about specific decisions, engage professional advisers based on mandated transparency and exercise only limited powers. The objective in moulding such orders is to build confidence in the proper and orderly administration of the estate pending hearing of the probate suit.

Mr L Ellison SC appeared for the plaintiff instructed by MJM Lawyers and Ms S Clemmett appeared for the defendant on 13 March instructed by O’Rourke & Associates. Solicitors and counsel all presented the case efficiently. All the evidence was ready on the first return date. Cross examination and submissions followed. When the Court published orders on 20 March, it indicated that reasons would be published later. These are those reasons.

The deceased died on 16 February 2025. He was survived by his two children, Sabine Boes and Hans Boes, five grandchildren and one great-grandchild. A future contest is likely as to whether the deceased was in a de facto relationship with Ms Hussan Bano, who also survived him.

The deceased made a will on 23 December 2022 (“the 2022 will”) and a later codicil to the 2022 will on 21 February 2024 (“the 2024 codicil”). The 2024 codicil was prepared by the plaintiff, a solicitor and a long-standing acquaintance of the deceased. Its validity is contested by the defendant on various bases which are not material for present purposes.

The 2022 will appointed the plaintiff as his executor. Under the 2022 will, the defendant is given the nursery business, the deceased’s land in Ourimbah on which the nursery business operates and the deceased’s residential property in Yarramalong, following the grant of a life estate in that property to Ms Bano. The 2024 codicil cancels these gifts to the defendant and gives these assets to Ms Bano and her son, Mr Muith Singh.

The deceased was the sole director and majority shareholder of Boes Technology BT Pty Ltd ("the Company"), which conducts the nursery business at Ourimbah. The issued share capital of the Company is 20160 ordinary shares. The deceased held 19000 ordinary shares, the defendant held 1000 and the remaining shares are held by employees of the nursery business, Lynette and Rex Smoothie, with 80 ordinary shares each.

It was not disputed that the business has an annual turnover between $500,000 and $700,000. The Company’s bank accounts are all in the name of the deceased. As a result of the dispute and the lack of a grant of probate, the deceased’s bank accounts, including the Company’s bank accounts are inoperative. The Company’s tax returns are overdue, its accountant, Mr Peter McIntyre lacks confidence in its financial controls and its compliance with tax, corporations and employee superannuation obligations.

At the time of the deceased’s death, Mr McIntyre was on the verge of terminating his retainer because of the deceased’s inability or unwillingness to follow his advice about the Company’s financial affairs. The problems with those financial affairs was a suspicion that Ms Bano was being partly paid in cash and that her son, Mr Singh was receiving cash even though he said he was working voluntarily for the Company because he was under visa related employment restrictions in Australia.

An appointment of an administrator is necessary. The Company is without a director to guide its business affairs and ensure its compliance with tax, corporations and superannuation legislation. The nursery business has a small number of employees, and its goodwill and viability depend to a degree upon the continuity of their employment, at least in the short to medium term.

Unless an administrator is appointed urgently the estate and the Company face the risk of financial loss.

The plaintiff’s Motion filed on 11 March 2025 seeks a grant of administration of the deceased’s estate with powers to take proactive steps to stabilise the nursery business, represent the estate in legal proceedings and attend to the financial affairs of the Company and of the deceased’s estate. The plaintiff put forward a plan that should he be appointed as administrator and stand in the shoes of the deceased as a shareholder of the Company, that he would appoint Ms Smoothie as a director of the Company so that she could conduct the day-to-day affairs of the nursery business.

The Court accepts the plaintiff’s evidence that the nursery business needed urgent attention. At the time of the application, the nursery business had an estimated $700,000 worth perishable plant stock, the business bank accounts in the deceased’s name were suspended, and employees were going unpaid.

The defendant’s evidence painted a similar picture of financial disarray adding that the deceased had not lodged tax returns either for the Company or himself from business for some time.

The defendant’s evidence showed that she genuinely and strongly distrusted the plaintiff. She acknowledged a long-standing acquaintance between the plaintiff and the deceased but said that the relationship was not one which promoted the best in the deceased. Details of the defendant’s criticisms are not material for present purposes. The defendant believed that the plaintiff would administer the estate to favour Ms Bano and members of her family and that he would promote their interests rather than the defendant’s interests. The plaintiff contended that he would administer the estate objectively.

The case for the urgent appointment of an administrator is made out. The Court accepts that unless an appointment is made that the value of the business, an important estate asset, is likely to be impaired. But the question this case raises is a familiar one: whether someone known to the deceased (in this case the plaintiff) or an independent administrator should be appointed.

The plaintiff submitted that he was suitable for appointment as administrator because he is the executor nominated by the deceased in the will. There is no challenge to the deceased's capacity. The deceased is presumed to know all his executor's shortcomings, as well as the advantages appointment.

The plaintiff further submitted that notwithstanding his entitlement to charge his ordinary professional fees as a solicitor to the estate, he knows the business and the business premises, has an established rapport with the employees, and is familiar with the issues which require resolution, including the deceased’s relaxed attitude to compliance with the regulatory obligations of the nursery business. The Court accepts that appointing the plaintiff has these practical advantages.

The plaintiff contended that Ms Smoothie was a suitable appointee for the office of director of the Company given she had been working at the nursery for over 30 years and was familiar with the other employees and is one of the key personnel of the business. The plaintiff’s familiarity with Mr and Ms Smoothie weighs in favour of his appointment because it would promote their continuity in the nursery business.

The defendant objected to Ms Smoothie’s appointment. She submitted with some force that whilst Ms Smoothie may have practical day-to-day familiarity with the business, she was much less qualified to negotiate the regulatory compliance tasks required of a company director. Looking at Ms Smoothie’s background, the Court agrees with this submission.

Finally, the plaintiff submitted that his objective, if appointed, would be to stabilise the Company’s situation, regularise the Company’s accounts and make the Company compliant with applicable standards such that the nursery business may continue to run as a going concern.

The defendant also submitted that the plaintiff had conflicts between his own interests and the duties he would owe to the estate as administrator. For example, she submitted that the estate may have a claim against him for his role in drafting the codicil and other documents related to separate proceedings in which the deceased was involved. The plaintiff also owns a 48% interest in a hardware company that has a commercial relationship with the nursery business, and which owns land that supplies bore water to the nursery, presently on a no or low-cost basis. The defendant was also concerned that the plaintiff might continue to run the nursery business for the benefit of Ms Bano and the current employees, when in truth it was not financially viable and should be shut down and the land redeveloped to its highest and best use.

But the defendant’s main concern was her perception that the plaintiff would be biased against her. This in turn led to fears on her part that if he were appointed as administrator of the estate that he would cause an increase in the cost of bore water or hardware supplies to the nursery business. The defendant was firm in her opposition to the plaintiff having any control of the deceased’s estate.

The defendant therefore proposed that an independent administrator be appointed to coordinate with the Company’s accountant, Mr McIntyre, to evaluate the business and determine what should be done based on the findings of that investigation.

The Court has broad discretion by its inherent probate jurisdiction and under Probate and Administration Act 1898, s 73 to appoint an administrator pendente lite.

The appointment should be crafted to meet the convenience or necessity of the situation. For example, the appointment of a creditor will usually be limited to collecting the estate to pay the debt due to the creditor: Re Stewart (1869) LR 1 P & D 727. A common objective of such appointments is to preserve the estate by collecting, securing and prevent the wasting of estate assets, as the old Latin title of this form of appointment suggests – the administration is ad colligenda bona defuncti. Such limited grants do not normally encompass the investment, sale or distribution of estate assets.

In Estate Ritossa, Deceased [2022] NSWSC 1083 (at [21]–[24]), Lindsay J summarised the approach of the Courts exercising their discretion to appoint an administrator pendente lite as follows:

The defendant disputes the validity of the 2022 will as varied by the 2024 codicil. Thus there will be a contest as to the validity of the will, which enlivens s 73(1)(a).

The Court makes an appointment in circumstances such as these to preserve the estate so that once the dispute as to what the deceased’s testamentary intentions is resolved, his testamentary bounty can be distributed.

It is also well-established that if a person appoints their business partner as executor, then the testator has consented to any conflict of duty and interest that must invariably arise: see Labraga v Pomfret; Highland v Labraga [2005] NSWSC 973 at [113] (Young J) citing Hordern v Hordern [1910] AC 465 at 475.

Moreover, a testator's choice of executor is important and implies that the deceased reposed trust in the executor and considers the executor to have been both suitable and capable of performing the duties required, so such a person is not passed over lightly: Uniting Church in Australia Property Trust NSW v Millane [2002] NSWSC 1070 at [9].

Both the plaintiff’s and the defendant’s proposals have disadvantages, which presents to the Court a familiar contest. The defendant’s proposal will incur the significant costs and fees associated with appointing a professional independent administrator. Because of the poor state of the Company’s books, it is not yet clear if the nursery business is profitable and that there is sufficient cash flow and profitability to support incurring such fees.

On the other hand, the plaintiff will be charging professional fees. But he has the advantage of not having to familiarise himself with the business and should be expected to immediately command the confidence of the employees with whom he is familiar. It is this very familiarity which arouses the defendant’s suspicion. But the Court can put in place appropriately robust controls to ensure transparency and accountability of the plaintiff’s conduct as administrator, to overcome the suspicions that might arise in the mind of a reasonable person in the position of the defendant.

The plaintiff’s present proposal seeks his appointment with few of the controls which the Court regards as necessary to contain any damage from potential conflicts of interest that he might have. Once those controls are put in place overall there are practical and financial efficiencies that favour the plaintiff being appointed as administrator because of his familiarity with the nursery business, which is likely to be the most time-consuming part of the estate’s administration.

The plaintiff’s competing commercial interests and the mistrust the defendant has of him cannot be ignored. The Court accepts that the Company’s inadequate bookkeeping and regulatory compliance has deprived the defendant of information. But the vectors generating that mistrust can be reduced by appropriately moulded relief.

Finally, there given the above authorities in relation to a testator’s choice of executor, there is force in the plaintiff’s submission that as the executor appointed under the 2022 will (and the 2024 codicil), that he is the most suitable person to be appointed administrator while the issues in these proceedings are being disputed.

But how can the disadvantages of appointing the plaintiff be contained? Orders can made to (a) reduce the impact of identified conflicts of interest or perceived bias and (b) to ensure that the plaintiff’s administration of the estate is as open to ready scrutiny by the Court, by the defendant and by any other beneficiary as is practicable.

As to reducing the impact of identified conflicts of interest or perceived bias, the orders below target that problem directly by preventing the administrator without prior leave of the Court from changing the structure of the Company, from paying wages to Mr Singh, from paying Ms Bano more than she is presently paid on average, from contracting personally with the Company, from paying wages in cash or from causing suppliers to the Company in which he has a financial interest to materially change their terms of trade with the Company.

As to opening the plaintiff’s administration of the estate to ready scrutiny, the orders made require the plaintiff upon appointment to prioritise the proper recording of the Company’s financial transactions in a manner acceptable to the estate’s accountant, Mr McIntyre. In addition, at the end of each calendar month, a written report of the payments and transactions in relation to the estate and a printout of the Company's management accounts, showing cash flow, a profit and loss statement and a balance sheet shall be provided to the defendant. Finally, the administrator will be required to engage Mr McIntyre on behalf the Company to provide a written report to the administrator and the Court in relation to the financial viability of the nursery business.

For these reasons, the Court makes the following interim orders and procedural directions.

The Court: