Probate: initial shortcomings of executor insufficient to warrant removal

Budulica v Budulica [2017] QSC 60

Mullins J

The applicant sought, inter alia, removal of the respondent as the executor and trustee of the deceased’s will and ancillary relief in relation to the appointment of a substitute administrator and trustee. There was hostility between the applicant and respondent, who were siblings, with a history founded in a protection order in favour of the applicant against the respondent, together with previous applications including a dismissed family provision application Budulica v Budulica [2016] QSC 184.

The grounds for the application included:

[18] … that the respondent did not identify Mrs Budulica’s Travel Card account at the outset of the administration, but ultimately ascertained it had a credit amount only of $21.52; that the respondent claimed his legal expenses of $1,500 in responding to the protection order application as an estate expense, on the basis the expenditure arose out of his attempting to undertake executorial duties, but subsequently reversed that expense; and that the respondent did not treat the Toyota Corolla motor vehicle registered in Mrs Budulica’s name as an estate asset, because the respondent withdrew the funds from his personal home loan account to purchase the vehicle and he made the repayments on his home loan account …

[19] … the delay in the administration of the estate and the failure of the respondent to bank all the rents collected from tenants of the Stuart Street and Barton Road properties until July 2016. The applicant alleges she is significantly prejudiced by the delay due to her circumstances. She describes herself “in dire financial circumstances” and “unable to work as a result of significant health problems”.

The applicable law

Section 6 of the Succession Act 1981 (Qld) provides:

Subject to this Act, the court has jurisdiction in every respect as may be convenient to grant and revoke probate of the will or letters of administration of the estate of any deceased person, to hear and determine all testamentary matters and to hear and determine all matters relating to the estate and the administration of the estate of any deceased person; and has jurisdiction to make all such declarations and to make and enforce all such orders as may be necessary or convenient in every such respect.

Justice Mullins noted the relevant authorities:

Consideration

Relevantly, the respondent had offered explanations in the manner which he conducted the administration of the estate and maintained spreadsheets recording estate expenses.

In relation to the delay in renting out two units, the respondent explained that they required extensive renovations and that it was difficult to obtain quotations from tradespeople and in getting tradespeople to carry out the work. Her Honour found that while the applicant may have approached this in a different manner, it did not mean that the respondent’s conduct was not prudent or proper administration of the estate.

Her Honour accepted that the continuing requests made by the applicant for substantial information and documents had also contributed to the delay in the administration of the estate.

Ultimately, dismissing the application, Mullins J found:

[31] The willingness of the respondent by July 2016 to address the shortcomings in this manner in which he had administered the estate, however, and what that indicates about his approach to completing the administration of the estate in a proper manner are relevant considerations on this application. It is also relevant that the respondent has personally undertaken the day to day management of the rented properties and applied his experience in managing properties, in order to preserve the income from the estate properties. The applicant herself by her demands and conduct has contributed to the delays in the administration of the estate.

[32] Even though the applicant remains largely unsatisfied with the spreadsheets prepared by the respondent to show the income and expenses of the estate and the steps he has undertaken in the course of the administration of the estate, the respondent has managed eventually from the viewpoint of the court, even if not from the applicant’s viewpoint, to respond sufficiently to this stage of the administration to inquiries made by the applicant in relation to the estate that were appropriate to address …

[34] It was the choice of Mrs Budulica to appoint the respondent as her executor and trustee. The antipathy between the respondent and the applicant has not prevented the respondent from carrying out his duties as executor. I am not satisfied that the applicant has discharged the onus she bears to prove that, at this stage of the administration, there are grounds that make it necessary or desirable to remove the respondent as the executor and trustee …

[35] It was vexatious for the applicant to make a further application for the disclosure of Mrs Budulica’s bank accounts when an application for similar relief had previously been unsuccessful. The issue about Mrs Budulica’s personal effects had been exhaustively traversed in the correspondence between the parties’ solicitors and the applicant has not shown why the court should interfere at this late stage over the personal effects some of which are held by each of the parties. Until one of the real properties is sold, there are no liquid funds in the estate for making any interim distribution to the applicant. It is therefore not appropriate to grant any of the ancillary relief …

David Cormack – Brisbane Barrister & Mediator

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