In October 2007 PG died leaving a will dated 18 May 2006. At the time of his death, PG was the sole director and shareholder of, a company holding a parcel of 7,385,586 shares in A. At the date of PG’s death, the value of each share was $8.73 and the total value of the shareholding was $64.5 million.
PG received the shares in A as payment for work he did for them. The shares were held in escrow to be released in three tranches, in October 2007, September 2008 and September 2009. By September 2008, A’s share price had fallen to $0.13 per share, A went into administration prior to the release of the third tranche.
Probate was granted to the executors on 22 May 2008, at which time the value of A shares were $0.48. In September 2008 the executors sold approximately two million shares at a price of $0.13 per share. In November 2008 administrators were appointed to A, the shares were deemed to be valueless and the company was delisted on 31 August 2009.
The proceedings, brought against the executors, allege that from the death of the Deceased to the date of obtaining probate on 22 May 2008 they intermeddled in the estate, thereby becoming executors de son tort (a person who intermeddles in the estate without having obtained a grant. A creditor is entitled to rely on this fact and hold the intermeddler liable as if they were the executor) and becoming subject to duties which rendered them liable for not having sold the shares at an earlier time, and secondly, that after they obtained probate they did not sell the shares promptly. In this way they are said to have committed a devastavit on the estate of the Deceased.
The damages figure ranged from $731,000 & $17.5 million based upon a sale of available shares on or about 8 November 2007, well prior to the grant of probate. The lower figure was based on a failure to sell the remaining available shares in the week ending 4 October 2008, when the price had appreciated from $0.13 to $0.25 per share.
A person appointed as an executor, who takes steps in relation to the assets of the estate, is properly described as “intermeddling”. The Court held that advertising, conferring with the co-executors about the obtaining of a grant may in total be described as intermeddling, as it incurs liability to creditors or beneficiaries.
An executor would be liable for devastavit (that they failed to properly preserve protect, and administer estate assets which causes loss to the estate) only to the extent that he was liable to account for assets which he had “taken into his possession or dealt with” and obtaining valuations of assets for the purposes of an application for probate did not involve taking assets into possession or dealing with them.
However in the appointment of an executor as the director of PMG Holdings made by all of the executors took into their possession the estate asset constituted by the share in the holding company however this was not an act that amounted to a devastavit nor an act that rendered him liable to creditors or beneficiaries of the estate