Wills and Probate

By Julie Lee and Eloise Parrab

In a recent decision of the NSW Civil and Administrative Tribunal (NCAT) Appeal Panel the question of whether a home can be sold (onsite in a community) without a grant of probate has been answered.

When a home owner in a residential land lease community passes away ownership of the home is usually / often transferred to another person through a Will. Probate is the name of a court order granted by the Supreme Court of NSW. Being granted probate confirms that the Will is valid and the named executor (legal personal representative) has permission to distribute the estate of the deceased according to the provisions in the Will.

Following the death of Alvin Jenkins in March 2019, a dispute arose between the sole beneficiary and executor of the estate regarding interference by the operator with the proposed sale of the home. The late Alvin Jenkins was a home owner at Surfrider Caravan Park on the NSW south coast at the time of his death. He had occupied the home on site 4 under a site agreement. Alvin’s final Will named his son Lee Jenkins as sole beneficiary and executor of the estate. 

Lee asked the operator of Surfrider if they could advertise and sell the home on his behalf. The operator responded by saying they couldn’t list the home for sale, or enter into a site agreement with a purchaser until a grant of probate had been obtained.

Probate is a court order which confirms that the Will of the deceased is valid and gives permission to the executor to distribute the estate. A grant of probate can only be obtained if there is a valid Will and a named executor. The executor is responsible for applying for the grant of probate. The executor cannot distribute the deceased person’s property until they apply for and are granted probate by the Supreme Court of NSW. For various reasons Lee did not obtain a grant of probate until 4 August 2020 and by this time a considerable amount of site fees were owing on the site. 

Mr Jenkins applied to the Tribunal for compensation for the site fees paid on the basis that the operator had interfered with the sale of the home. The Tribunal found there had been interference and awarded Mr Jenkins compensation of $2,845.80 for site fees between March 2019 and 4 August 2019 (which the Tribunal erroneously recorded as the date probate was granted). Neither party was happy with this outcome and both lodged appeals against the decision.

The Appeals

The operator appealed on six grounds including that the Tribunal had failed to properly interpret the definition of “home owner” in the Residential (Land Lease) Communities Act 2013 (RLLC Act) and had failed to properly consider the operator’s decision to require Lee to obtain a grant of probate.

Mr Jenkins appealed on the basis the Tribunal erred in determining the date of probate and in calculating the damages he was awarded.

The decisions 

The Appeal Panel determined the Tribunal was correct to find that Mr Jenkins was a “home owner” within the meaning of the RLLC Act. It said:

"The RC Act confers rights under that Act on those defined as a home owner. In the present case they are a “personal representative or a beneficiary of the estate”. In either case, Mr Jenkins fits within the definition and is therefore a home owner for the purpose of the RC Act...

"At the point in time when Mr Alvis Jenkins died, Mr Jenkins became a beneficiary of the estate. This status as a beneficiary was not dependent upon the grant of probate. Rather, it was dependent upon the death of the testator and a valid Will."

Regarding whether the operator interfered with Mr Lee Jenkins’ right to sell the home, the Appeal Panel found that statements made (to Mr Jenkins) by the operator could constitute interference. Additionally, declining to advertise the property and/or act as agent was also conduct that could amount to interference within the meaning of s107 (RLLC Act).

However, on the issue of whether the operator’s actions caused Mr Lee Jenkins to suffer a loss the Appeal Panel differed from the Tribunal. It found the operator was entitled to insist upon a grant of probate prior to signing a transfer of the existing site agreement to a prospective purchaser or entering into a new site agreement with a prospective purchaser:

"because without such a grant the operator would be at risk of dealing with the estate property inappropriately. Similarly, acting as agent and promoting a sale on behalf of Mr Lee Jenkins prior to the grant of probate may also have placed the operator at risk of liability to prospective purchasers concerning statements made."

The Appeal Panel said:

"it seems to us that the identified conduct, although constituting interference, did not relevantly cause the loss and damage in question to be suffered. Rather, it remained for Mr Jenkins, who had independent legal advice, to appoint his own selling agent and obtain probate and thereby facilitate a sale at an earlier point in time."

The Appeal Panel found the Tribunal had erred at first instance on 2 June 2021 in awarding compensation to Mr Jenkins. It set aside the order for compensation and dismissed Mr Jenkins appeal.

What this decision means for deceased estates

This decision has important implications for deceased estates in RLLCs. 

Operators are entitled to refuse to:

• act as an agent and promote the sale of a home and
• transfer an existing site agreement or enter into a new agreement with a prospective purchaser; if there has been no grant of probate obtained where there is a valid Will.

(The Appeal Panel decision did not address circumstances of where a Grant of Letters of Administration would be required where a home owner died intestate i.e where there was no valid Will. Under Part 4 Succession Act 2006 (NSW) the order in which eligible relatives will inherit the estate of a deceased person is set out.) 

For home owners in similar circumstances to Mr Lee Jenkins the safest course of action is to apply for a grant of probate before starting the process of selling the home. Even if a private agent is appointed to sell the home before probate there may be problems when asking the operator to either (i) assign the existing site agreement under a Deed of Assignment or (ii) enter into a new site agreement with a prospective purchaser which could ultimately result in the sale of a home falling through. 

If the deceased person’s Will does not name an executor, one of the beneficiaries can apply for letters of administration to enable them to deal with the estate.

The steps to obtain probate:

1. Publish a probate notice on the NSW Online Registry website. There is specific information that is required to be included in this notice
2. After 14 days from when the notice is published an application for probate can be lodged in the Supreme Court. There are a number of documents which must be included in the application
3. If there is any information that is missing or incorrect there may be a requirement to re file the form or file an affidavit and this could cause delays
4. There is usually no need to attend court to obtain probate and the application will be processed by the court Registrar in Chambers

The Tenants’ Union of NSW strongly encourages people to obtain legal advice before they commence the process of applying for probate because if it is not followed correctly there can be lengthy delays and additional costs incurred which, in Mr Jenkins’ case, also led to a large amount of unpaid site fees accruing.

The full decisions can be found in Barrack Point Holdings Pty Ltd v Jenkins (No 2); and Jenkins v Barrack Point Holdings Pty Ltd [2022] NSWCATAP 10.

If you don’t have a Will you may wish to consider making one – information on getting started can be found at: service.nsw.gov.au/transaction/get-started-making-will

Some of the content of this article appeared in a recent Outasite Lite 42.

This article was published in Outasite magazine issue 8. Outasite is published annually. Outasite Lite email newsletter, is sent several times a year – subscribe here. All past issues are available in the archive.