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Afele v Public Trustee [2010] WSSC 52 (11 June 2010)

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU

MISC 1311/09

BETWEEN:

BEATRICE AFELE
of Palisi, Business Woman and
FLORY SHIRLEY ABIGAIEL LAM
of Singapore, Education Consultant
Applicants

AND:

THE PUBLIC TRUSTEE
a Corporation sole established pursuant to the Public Trust Office Act 1975 as the Administrator of the Estate of David Stout Parker, Deceased
Respondent

Presiding Judge: Justice Slicer

Counsel: R Drake for the Applicants
A Roma for the Respondent

Hearing: 13 May 2010
Written Submission: 13 and 14 May 2010
Judgment: 11 June 2010

JUDGMENT OF SLICER J

1. The Applicants seeks declaratory and directory orders against the Respondent ("The Public Trustee") effecting the transfer of their interest in their claimed interests in land at Motootua which were the property of the estate of Abigail Fruean.

2. The First Applicant Beatrice Afele is the Executrix of the estate of Jack Ronald Parker ("Jack Parker") her maternal grandfather. He had devised his interest in the land to the Second Applicant Flory Abigail Lam ("Flory Lam"). Probate was granted to the Parker estate in March 1990 but its administration remains incomplete.

3. Parker's father ("David Stout") had two families with 12 children from those relationships. Jack Parker was a son by the first marriage.

ESTATE OF DAVID STOUT PARKER

4. David Stout Parker died on 26 December 1959 and his estate is administered by the Public Trustee. His property had been mortgaged, and in order to keep the land Jack Parker committed himself to pay off the mortgage and arranged for his siblings, with one exception, to assign to him their respective 1/12th interest. The exception was Abigail Fruean who had previously died.

5. The mortgage was discharged in July 1975. Between November 1970 and 30 July 1977, the remaining siblings provided to the Public Trustee a written surrender of their share in the estate to Jack Parker. The status or validity of those 'surrender documents' are central to this controversy.

6. On 28 April 1989, the solicitors for Jack Parker wrote to the Public Trustee asking that the title to the Motootua be conveyed to him as to an undivided 11/12th share to himself and 1/12 share to the late Abigail Fruean. Jack Parker died the following day before any reply was provided by the Public Trustee.

ESTATE OF JACK RONALD PARKER

7. Jack Parker devised his interest in the land to Flory Lam by his will dated 5 February 1988. If the surrenders were validly made that interest amounted to 11/12th of the land Lot 318. His death precluded any assignment of the title to him personally. The remaining 1/12th share is that to which Abigail Fruean or her estate had been entitled. The competing claims to that interest, as between the claimants will be separately considered. Tupa'i Se Apa had been appointed the Executor of the estate.

8. On 9 June 2000 the Assistant Public Trustee executed a Deed of Conveyance from the Respondent to Tupa'i Se Apa as Executor. On the same day the Defendant, through its officer, executed a Deed of Conveyance of the 1/12th interest of the Estate of Abigail Fruean to Flory Shirley Lam.

9. Different considerations arise in those dispositions.

CONVEYANCE TO THE ESTATE OF JACK PARKER

10. The Deed of Conveyance was not registered. The failure is unexplained. When, in 2007, Flory Lam discovered the omission the Executor in December of that year requested the Defendant to sign the counterpart copies of the original signed Deed as required for duty stamping and registration. The Defendant refused. In 2006, the Public Trust office had conducted a review of the estate file. On 2 April 2007, Dan Parker the son of David Stout Parker purported to revoke his earlier surrender of interest signed and witnessed on 30 June 1977. Between April and October 2008, subsequent to the refusal by the Respondent to sign the counterparts 10 of the children purported to either affirm or revoke their earlier relinquishments.

11. In 2002, the Public Trust office had altered its previous practice and policy and required that all consents by beneficiaries seeking to relinquish their entitlements under an estate must be witnessed and authorized.

12. The Respondent's refusal to sign the counterpart was that the original statements of surrender except that of Dan Parker had not been witnessed and were thereby invalid or ineffectual.

EFFECT OF ORIGINAL EXECUTION

13. The question central to the resolution of these proceedings is whether the Public Trustee was entitled in 2007 to refuse the request to sign the counterpart of a deed executed by him in 2000. Two issues arising from that question can be identified as;

1) Were the original un-witnessed surrenders valid instruments requiring him to give effect to their terms and deal with the estate accordingly?

2) Independent of validity did the execution of the conveyance in 2000 preclude the Public Trustee from making a subsequent decision to refuse the 'counterpart request'? The question can be framed in a different way namely, whether he is either estopped from claiming error identified after the execution of the conveyance or, absent fraud, entitled to refuse to give effect to that execution?

VALIDITY OF SURRENDER DOCUMENTS

14. The Respondent opposes the application on the ground that:

"That apart from that of one Dan Parker, the consents of the other signatories referred to in the Schedule of the Applicants' Motion in respect of 11/12th interest in the land were not witnessed and/or notarised."

15. The Public Trust Office 1975 ("The Act") section 88 provides:

"Public Trustee may act on written statement, etc - (1) Unless expressly prohibited by any Act or by the terms of any particular trust, the Public Trustee may, in the administration of any trust or estate, or the performance of any power or duty under this or any other Act, act on credible information (though less than legal evidence) as to matters of act.

"(2) The Public Trustee may allow any claim which is made upon or before him or her upon the affidavit, declaration or statement of the claimant alone, or, where the Public Trustee thinks fit to call for other evidence, upon such evidence as he or she requires.

"(3) The Public Trustee may at any time require a statutory declaration or other sufficient evidence that a person is alive and is the person to whom any money or property is payable or transferable, and may refuse payment or transfer until the declaration or evidence is produced.

"(4) If acting in good faith, he or she shall not be liable for accepting as correct and acting upon the faith of any written statement or statutory declaration by any person, in or out of Samoa, whom he or she believes to be trustworthy, as to any birth, death marriage or other matter of pedigree or relationship, or other matter of fact upon which the title to any estate or any part thereof may depend."

16. The Act provides the Public Trustee with discretion to act on credible information as to matters of fact. It does not require him to act only on a witnessed or notarized instrument or document. In the case of a debt payable to or by the estate, he may accept an invoice or bank statement which forms part of business or corporate records. He might be satisfied of the validity of a personal loan payable to a family member by the estate. He is entitled to allow a claim made by a statement of the claimant alone. If he is not satisfied with the validity of a claim, he may require the provision of additional evidence, the nature of which he may determine. He is entitled to refuse payment or transfer unless the evidence, satisfactory to him, is provided. He is protected if he acts in good faith in 'acting upon the faith of any written statement...or other matter of fact upon which the title to any estate...may depend'.

17. In 2000, the Respondent had received a claim for the transfer of the land to the estate of Jack Parker. He acknowledged the discharge of mortgage which supported the claim and which, in fact, had been paid with a cheque provided by his office. He was entitled to pay regard to the terms of the will and the Letters of Administration appointing Tupa'i Se Apa as Executor granted on 20 March 1990. He had received written notices of surrender signed by persons entitled to claim an interest in the estate. They provided details of addresses, dates and relationship were sufficient to satisfy him, as a matter of fact of their accuracy and provenance.

18. The conveyance itself recites the names of the children surviving the death of Jack Ronald Parker and the grant of Letters of Administration granted on 18 August 1961. It further recites the agreements of surrender by the potential beneficiaries, excepting Abigail Fruean, of their interests in favour of Jack Ronald Parker.

19. The evidence clearly establishes that the documents provided to the Public Trustee were validly made. There was no statutory requirement that they be witnessed or notarized. They complied with the reasonable requirements of the Public Trustee.

20. The Respondent contends that he was entitled to rely upon the Act section 88 in refusing to sign the counterpart as at 2007. He relied on the subsequent revocations of surrender, in particular those of Dan Parker, whose surrender had, in fact been witnessed, and Esau Fruean. The issue of the 1/12th share to which Abigail Fruean would have been entitled will be separately considered.

21. The Respondent was entitled to determine the changes in practice and procedure, as he did, in 2002. In doing so he provided criteria governing the requisite standard or quality of evidence or verification in cases of entitlement or surrender of interest. The changes provided a more certain and consistent standard or criteria for the operation of the Act section 88. Even had they been legislative enactments or regulatory provisions they would not have operated retrospectively unless clearly stated in an Act of Parliament. The Respondent's regime affected matters in progress or future estate managements but did not operate to alter decisions already made. Here the test of validity or formal and evidentiary compliance was that as at the time of the conveyance. Absent statutory requirement to the contrary the documents of surrender, together with the other material provided by Tupa'i Se Apa, were valid and the Respondent entitled, as he did, to accept their import.

22. The Respondent's contention ought fail.

DECISION OF THE PUBLIC TRUSTEE

23. The Public Trustee is a statutory office with a duty akin to that of a fiduciary. In dealing with estates, the office acts in accordance with the obligations and rules required of an ordinary executor or trustee. The Act, Part IV affords the Public Trustee wide powers, but equally great responsibility. The office may not accept joint appointment (s.41) and when acting has the 'same rights, powers, duties and immunities as a private person acting in any of those capacities would have' (s.42). He or she is often appointed by the Courts to protect the young, mentally afflicted, small estates and the intestate (Slater v Global Finance Group Pty Ltd [1999] 150 FLR 264). In those cases, a Court must be shown very cogent reasons before it will order that the estate in question be placed in the hands of a private trustee rather than the Public Trustee (Flood v Williscroft [1987] 2 Qd R 358).

24. Following the death of Tupa'i Se Apa, the First Applicant was appointed as the present Executor by this Court on 25 March 2009. She was entitled to rely on the validity of the conveyance executed in 2000. The Respondent contends that with knowledge of the revocation by Dan Parker in April 2007 he was required to act in good faith as provided for by the Act s.88 (4) and refused to undertake any further action in the light of challenge. In fact, the surrender of Parker was witnessed and, on the Respondent's 2002 criteria, acceptable. Parker also claimed that the document, as a matter of fact had not been witnessed and his consent obtained in the absence of full advice or understanding. That concern was repeated, not at the time of the refusal to sign the counterpart, but later as justification for the earlier refusal. The Court accepts the responsibility of the Public Trustee to act with caution and due diligence. The Court also accepts the need for proper dealing with the interests of beneficiaries including the Second Applicant.

25. The Trustee had executed the conveyance and was entitled to do so. Signing of the counterpart was but incidental to the original acceptance of the claim. Revocation did not permit the Respondent to negate a decision lawfully and properly made.

26. The Court concludes that the Respondent ought complete or perfect his original duty to convey title of the 10/12th of the share in the title to the estate.

THE ABIGAIL FRUEAN PORTION

27. Different considerations are raised in the determination of the 1/12th share claimed by Esau Fruean, the surviving husband of Abigail. Abigail died intestate in April 1967 leaving a husband Esau and their children. There is a separate dispute to be considered by this Court as to the respective claims or interests between Flory Abigail Lam, her niece and their children. Here the question is whether the Respondent is entitled to refuse to sign the counterpart documents because of his belief that Esau had no right to assign his interest to the Second Applicant, because of the entitlement of the children as beneficiaries.

28. Abigail Fruean died on 25 April 1967, survived by her husband and 11 children. She had made no will and neither Probate nor Letters of Administration were granted. On 22 June 1999, Esau conveyed his interest in the land to his niece, the Second Applicant. Consideration was stated as ST$10.00. Esau now seeks to revoke his conveyance or gift to Flory and contends that he had no right to affect the instrument. His revocation and claims are irrelevant to the determination of these proceedings. Relevant is the evidence that in November 2006, Su'a Henry Fruean, Abigail's grandson was appointed by this Court Administrator of his mother's estate.

29. The Respondent refused to sign the counterpart documents on the basis that Esau had claimed that the surrender document had not been properly witnessed. The Court has rejected that contention for the reasons stated above. He contends as a second basis, his duty to protect or preserve the interests of other potential beneficiaries stating in his notice:

"That the said Esau Fruean was not the only successor to the late Abigail Fruean and could not have therefore validly gifted his deceased wife's 1/12 interest in the land."

30. The Respondent had dealt with this portion of the land interest separately from that already considered. The conveyance dated 9 June 2000 recited the intestacy and the entitlements;

'...of the widower Esau Fruean under and by virtue of Section 44 (a) and 44 (1)(a)(c) of the Administration Act 1975 as at the 19th day of May far exceeds the valuation of the said land as at the said date'.

and the deed of gift to Flory Abigail Lam.

31. The recital was a pragmatic recognition of the potential costs burden placed on Esau, the children and the transferee. It may be that the recital was correct in fact. But the deed was flawed. The entitlement arose by the operation of the Administration Act 1952 (NZ) section 56 as recognized by the 1975 Act section 42. There is no evidence, on this hearing of notice being given to the children of Abigail Fruean of the intended disposition or consideration of their possible entitlements. The conveyance did not provide a valid root of title.

32. The Public Trustee had notice as at December 2007 that Dan Parker had purported to revoke his surrender to his brother Jack Ronald Parker and claimed an equitable interest. That notice of a claimed equitable interest required the Trustee to take no steps which would irrevocably destroy the interest or expose the office to a claim for damages.

33. These reasons do not concern the respective interests as between Flory Abigail Lam and members of the Parker family.

34. The Applicants meet the objection of the Respondent by repeating the earlier proposition that the estate had been drained of any residual entitlement by the operation of the Administration Act (NZ) section 56. That section provides:

"Succession to real and personal estate on intestacy - (1) Where any person died intestate as to any real or personal estate, that estate shall be distributed in the manner or be held on the trusts mentioned in this section, namely;

(a) If the intestate leaves a husband or wife, the surviving husband or wife shall take the person chattels absolutely, and, in addition, the residue of the estate shall stand charged with the payment of a sum of one thousand pounds to the surviving husband or wife with interest thereon from the date of the death at the rate if four percent per annum until paid or appropriated, and subject to providing for that sum and the interest thereon, the residue of the estate shall be held, -

(i) If the intestate leaves issue, in trust as to one-third for the surviving husband or wife absolutely, and as to the other two-thirds on the statutory trusts for the issue of intestate..."

35. The Applicants provided opinion evidence of the likely value of the land as at May 1999 which suggested that the value of a 1/12th share was ST$6,000.00. It followed, on their argument, that Esau, as the spouse, would have been entitled to the whole of the value leaving no residue. It may be that on evaluation by an Administrator the calculation might be correct, especially if the interest component is taken into account. But the argument is misconceived.

36. The question is whether Esau was entitled to assign the interest in the land, thus providing the transferee with valid title. He was entitled, as at the date of Abigail's death to a fixed amount of money (NZ$1,000.00) and one-third of the residue. He was not entitled to demand an interest component of 4% per annum simply because he had done nothing to initiate administration proceedings. Even if he had such a right, his statutory entitlement did not supplant the requirements of title.

37. Here the Public Trustee was required, at least, to protect any interest which might be held by the children until the primary interests were determined.

38. Resolution of the issue of entitlement requires two further answers namely:

1) Whether, in the circumstances of this case, the Public Trustee was required to perfect his 2000 decision in the light of information existing as of 2007 which he knew to raise competing interests and the invalidity of the original conveyance?

2) Whether this Court ought to require him to perfect the conveyance in the light of that information?

39. The answer to both those questions must be No.3. The defect in the conveyance was of substance not form. The conveyance did not, in law, transfer the title. The Public Trustee could not perfect a nullity. Nor could he perform an act in the knowledge that there was an impediment to transfer by virtue of an arguable claim of equitable interest.

40. Nor should this Court. Even if the Public Trustee had been wrong in his 2007 refusal this Court ought not compound the error in the light of the nature of the transfer and an arguable claim of competing interests.

41. The Respondent was entitled to refuse to sign the counterpart instrument. The Court, in accordance with its own duty, ought not now direct the Respondent to so do.

42. The application in so far as it relates to the 1/12th share (the Abigail Fruean interest) ought be refused.

CONCLUSION

43. The Applicants are entitled to their remedy in respect of the 11/12th interest. One of those interests is held by the Second Applicant in her own right. For completeness the Order will direct the Respondent to transfer or perfect the 2000 conveyance to the estate. The Applicants are not entitled to their remedy in respect of the 1/12th interest in the Abigail Fruean share.

ORDERS

The Court declares:

1) that the conveyance dated 9 June 2000 between the Respondent and the Estate of Jack Ronald Parker was valid and transferred both the legal and equitable interest in 11/12th of the share in the interest in the Land described in Parcel 259/40 comprised in Certificate of Title Volume 8 Folio 120 as delineated on Plan 66U/VIIS presently entitled as Plan 2530.

and directs:

2) That the Respondent sign and execute the counterparts to the conveyance in a form which permits its registration.

3) The application concerning the validity and transfer of the 1/12th share in the land to Flory Abigail Lam is dismissed.

4) Liberty is given to apply as to consequential Orders.

(JUSTICE SLICER)