A grant of administration pendente lite allows an administrator to recover, call in and preserve the estate’s assets for the proceeding until the Court has delivered a judgment. The administrator is required to treat potential beneficiaries with impartiality.
A grant of letters of administration pendente lite enables the Court to fashion the administrator’s powers to ensure that the deceased estate is managed and preserved for those beneficiaries the Court ultimately finds entitled to it. As a result, beneficiaries have no direct entitlement to the estate during the administration pendente lite.
In New South Wales, s73 of the Probate and Administration Act 1898 provides that the Court can grant letters of administration pendente lite where litigation prevents the estate from being administered. The general jurisdiction of the Court to make limited grants of administration should only occur in circumstances that require the interference of the Court to protect the assets of the estate.
Background
The deceased, a Jewish widower whose wife (Katherine) passed away in 2012, had no children or close family members. He was born in Budapest, Hungary, and had a significant connection to Australia, having migrated to the country in 1951. His life and the subsequent legal proceedings profoundly impact the local community. He passed away on 28 October 2020 at the age of 97.
On 28 September 2018, the New South Wales Civil and Administrative Tribunal issued a financial management order concerning the deceased, appointing the NSW Trustee and Guardian as the financial manager.
Mr Bloom first encountered the deceased around January 2017, upon moving to Penkivil Street in Bondi, New South Wales. The deceased resided at Unit 603, 56A–62 Penkivil Street, Bondi, New South Wales, and they would occasionally engage in conversation when they crossed paths. Their first meeting occurred when the deceased was in the company of his then-carer, Terez Fulop, who had previously lived in the same building as Mr Bloom on Carlisle Street, Tamarama.
In June 2018, after discovering that Mr Bloom was also Jewish and a solicitor, the deceased, in a professional capacity, requested Mr Bloom to type up a former Will and make some changes to it. This professional relationship, marked by its formality and seriousness, adds a layer of complexity to the case. Mr Bloom, in his professional capacity, agreed to help the deceased with this task at various times between June and November 2018.
According to a Will made by the deceased on 8 November 2018 (2018 Will), which Mr Bloom witnessed along with another individual – Mr Bloom is the deceased’s executor. Further details regarding preparing the 2018 Will and the deceased’s mental capacity at its creation are subjects for evidence and arguments during the substantive proceedings.
Upon the grant of probate for the 2018 Will on 28 January 2021, Mr Bloom, as the deceased’s executor appointed Peter Arnott of Arnotts Lawyers, as the estate’s legal advisor. The deceased’s former accountant, David Johnson of DWS Johnson + Co, was appointed by Mr. Bloom as the estate accountant, further ensuring the legal expertise in the case. It’s important to note that Mr. Bloom has not charged any fees for acting as the executor, although he has reserved the right to do so in the future.
Rosenberg v Bloom [2024] NSWSC 114,
In Rosenberg v Bloom [2024] NSWSC 114, initiated by Ms. Rosenberg in May 2021, are complex and involve several disputes. These disputes, which are intricate and multifaceted, revolve around a series of wills created by the deceased and involve various professionals, carers, and friends of the deceased. The issues at stake in these proceedings are significant and the subject of extensive evidence and arguments.
Ms Rosenberg, (the plaintiff) sought enforcement of an alleged agreement made between her and the deceased around 2010, under which she claims that the deceased agreed to transfer the O’Donnell Street property and the 3–5 Denham Street property to her. Alternatively, Ms Rosenberg seeks to annul the probate grant to Mr Bloom of the 2018 will and, instead, obtain an administration grant based on a will of the deceased dated 24 April 2013 (April 2013 Will). Essentially, Ms. Rosenberg contends that the deceased promised her each of the O’Donnell Street property and the 3–5 Denham Street property in exchange for her care.
This is an application brought by Judit Albecz (the second defendant/second cross-claimant) by way of an amended notice of motion filed on 16 May 2023 in Rosenberg v Bloom [2024] NSWSC 114, primarily seeking an order under s 73 of the Probate and Administration Act 1898 (NSW) or the inherent jurisdiction of the court for a special grant of administration of the estate of the late Paul Lenkey (the Deceased) to Leah Sewell (an experienced estates solicitor) and several ancillary orders concerning the administrator arising from that grant.
Albecz v Bloom [2024] NSWCA 166
There are three counterclaims brought in Albecz v Bloom:
The first counterclaim was filed by Mr. Bloom, seeking
a) Repeal of the grant of probate made on 28 January 2021 regarding the 2018 Will; and
b) A probate grant of probate for the 2018 Will. (Mr. Bloom thus supports the 2018 Will.)
The second counterclaim was filed by Ms. Albecz seeking:
- The revocation of the grant of probate for the 2018 Will;
- A declaration that the will dated 14 March 2014 of the deceased (March 2014 Will) is the last will of the deceased; and
- A declaration that the March 2014 Will annulled the will dated 6 July 2013 of the deceased (July 2013 Will).
In the alternative, Ms. Albecz seeks a declaration that the July 2013 Will is the deceased’s last will.
In a further alternative, Ms Albecz seeks a declaration that the will dated 8 July 2014 (July 2014 Will) was the last will of the deceased but not the codicil dated 13 November 2014 (November 2014 Codicil) or the codicil dated 30 June 2016 (June 2016 Codicil).
Ms Albecz thus supports the March 2014 Will, the July 2013 Will, and the July 2014 Will (without the November 2014 Codicil or the June 2016 Codicil).
David Johnson (the former accountant of the deceased and now accountant of the estate), the third defendant/third cross-claimant, sought (the third counterclaim):
- Repeal of the grant of probate of the 2018 Will;
- A declaration that the July 2014 Will is the last will of the deceased;
- Declarations that the November 2014 Codicil and the June 2016 Codicil are valid codicils to the July 2014 Will; and
- A declaration that the effect of the July 2014 Will was to revoke the March 2014 Will.
Mr. Johnson thus supports the July 2014 Will (with the November 2014 Codicil and the June 2016 Codicil).
The deceased also made wills dated 15 September 2008, 24 February 2011, 20 January 2012, and 15 June 2012
In her written summary of the argument (pars 28-31), three reasons were advanced in support of her application for leave to appeal, namely:
(1) “there are serious questions of principle that arise in the proposed appeal which are also questions of public importance”, namely the proper approach to the utilisation of estate funds by an administrator to pay litigation costs and disbursements;
(2) there is a seriously arguable and indeed “compelling” case that the 2018 Will was invalid and for a grant of probate concerning a will in which she is listed as a residual beneficiary, and there was an “abundantly clear” injustice to the Applicant in permitting the respondent to incur substantial legal expenses to be indemnified by the estate; and
(3) it was “unfair and inappropriate” for Mr Arnott to continue to represent the respondent in the administration of the estate, the appointment of an independent administrator being the only way to rectify this unfairness.
Substantially, the orders seeking the appointment of an interim administrator and challenging the respondent’s entitlement to recoup his costs of the estate administration rested upon a challenge to the respondent’s “honesty and veracity.” Additionally, there were questions about his honesty and integrity in defending the proceedings; he was not protecting the interests of the estate but his interests; therefore, the estate shouldn’t pay the costs of that exercise.
The primary judge was not satisfied that there was “some necessity” or “sufficient reason” for the appointment of an interim administrator to advance the due and proper administration of the estate in the best interests of the ultimate beneficiaries: applying Ritossa v Ritossa [2023] NSWCA 14. Thus, it was not necessary or appropriate to appoint an administrator pendente lite.
‘The power to appoint an interim administrator [pursuant to Probate and Administration Act 1898, s 73] is constrained only by the requirement to advance the due and proper administration of the estate in the best interests of the ultimate beneficiaries’
(Ritossa v Ritossa [2023] NSWCA 14 (at [39]).
The Applicant contends that before taking steps in the proceedings, the respondent should have obtained judicial advice, according to s 63 of the Probate and Administration Act, on whether to defend the claim that the primary judge correctly rejected the primary judge. The Applicant sought to rely on principles as to obtaining judicial advice set out by the High Court in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42 at [74].
However, that case concerned claims made against a trustee and the power to seek judicial advice under s 63 of the Trustee Act 1925 (NSW), and the principles stated do not apply to an executor seeking a grant of probate in the solemn form of a will. The costs and practical consequences of imposing some far-reaching obligation on executors to seek judicial advice are not to be contemplated.
As to the adverse costs order, challenged by proposed ground 12, the Applicant’s motion having been unsuccessful, it was entirely orthodox for the primary judge to make an order that costs follow the event, thus requiring her to pay the costs of the motion.
Conclusion and orders
This application needs to meet the necessary threshold for a grant of leave to appeal. The Applicant did not.
- raise any question of principle,
- establish any material error of fact or
- demonstrate any reasonably clear injustice to the Applicant.
In the circumstances, the Court makes the following orders:
(1) Dismiss the summons for leave to appeal filed on 2 May 2024.
(2) Order that the Applicant pay the respondent’s costs in this Court.