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Tong v Emery [1996] SBHC 104; HCSI-CC 32 of 1991 (26 April 1996)

CC, 32, 91.HC

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No.32 of 1991

MADALENE TONG

-v-

ROBERT V. EMERY AND
JOHN SULLIVAN (Co-Administrators)

High Court of Solomon Islands
(Palmer J)
Civil Case No. 32 of 1991

Hearing: 23rd April 1996
Judgment: 26th April 1996

C. Ashley for Madalene Tong
Administrators in person

PALMER J: By summons filed with the court’s leave in the hearing on 23rd April, 1996, the Administrators seek orders inter alia for directions to be given to the Administrators and for approval of the Administrators claims for remuneration.

SOL-LAW TO ACT FOR ADMINISTRATORS

The first direction sought is for Sol-Law firm to be authorised to act for the Administrators. Currently, Mr Kama was the Solicitor acting for the Administrators but recently his sole practice had merged into a partnership with I think 3 other Solicitors and Barristers from Brisbane and at the same time taking over the former practice of Jennifer C. Corrin. Mr Sullivan has indicated that if Sol-Law takes over as the firm to act for the Administrators then a number of obvious savings can be noted. First, whichever Solicitor or Barrister in the firm is acting will not charge his professional fees; only outgoings will be charged. Also there shouldn’t be any future charges on the Estate for such things as airfares, car hire charges and accommodation. If he was to come to Solomon Islands then he would travel under his firms business and therefore would not need to make any further claim on the Estate for airfares. Regarding car hire charges, the firm now has a car and so that can be used. The firm also has a unit and so accommodation charges would no longer be necessary, because he would be residing in their unit.

The other alternative is for the Administrators to instruct someone else. Whoever it is however, will be charging their professional fees, and it seems that the expenses mentioned above may still have to be charged to the Estate.

A number of concerns have been raised against the suggestion made by Mr Sullivan, namely the question of conflict, and secondly whether priority would be given to the affairs of the Estate.

Both are reasonable concerns and therefore will be addressed separately.

Conflict of interest

Mr Sullivan has appropriately disclosed very clearly that he has a significant interest and is the majority shareholder in Sol-Law. Apart from that, what he has stated to this Court, shows that no significant advantage or benefit will be derived from this arrangement by Sol-Law. If anything Sol-Law will be performing services more on a charitable basis, if at all its services will be required. The situations in which Sol-Law will be involved that would entail a conflict appear to be quite slim. Most of the instances in which Mr Kama had been asked to act for the Administrators had been done at the instruction of the Administrators. If Mr Sullivan is present in the country then normally he would attend to matters pertaining to the law. It is only when he is out of the jurisdiction, that a separate legal Counsel is instructed. I am also aware too that where necessary, the Administrators have sought objective legal opinions from Queens Counsels in complex issues to assist them in making an important decision as to the administration of the estate.

My assessment of the issue of conflict of interest, with respect, is that its likelihood of ever occurring is minimal. If anything, having the services of Sol-Law at the disposal of the Administrators can only be to the benefit of the administration of the Estate in terms of costs and legal services.

However, and I make this point as a safety net, if at any time, a real conflict of interest should arise then the Administrators in their professional capacity should instruct another lawyers to act for them.

PRIORITY TO THE AFFAIRS OF THE ESTATE

Again the possibility of low priority being given to the affairs of the Estate by a Solicitor or Barrister of Sol-Law would seem to be fairly remote, bearing in mind that Mr Sullivan is a lawyer by profession and that anything that needed to be done pertaining to the law would be done on the instruction of the Administrators, and in particular by Mr Sullivan. That has been the practice with Mr Kama, the Counsel retained by the Administrators. If such practice is maintained, then I don’t think the concern raised regarding low priority should arise. In more complex issues, Queens Counsels have been instructed by the Administrators, and there is no impression, allegations or suggestions, that low priority has been given to the Estate’s affairs.

The point raised that the Estate should be wound up expeditiously has always been one of the primary concerns of the Administrators and at the back of everyone’s mind; the sooner the better.

Taking all matters into account, I am satisfied Sol-Law can be authorised to act for the administrators as and when necessary. When a possible conflict of interest should arise in any particular matter then the Administrators in their professional capacity should be vigilant to detect that and take appropriate action. Also the responsibility lies on the Administrators to ensure that matters of the Estate in which the firm is required to act are given due priority.

The direction sought for Sol-Law to be instructed as the firm representing the Administrator as and when required is granted subject to the specific matters raised above.

DESIGN COLLEGE FEES FOR SHARON TONG

Approval is sought for payment of her Design College Fees for 1996, which stand at AUD.7, 110.00. The Administrators however point out that this can only be paid as and when funds become available.

That approval is granted on the terms sought.

METWAY MORTGAGE PAYMENTS

The Administrators’ grant of Letters of Administration in respect of the property in Queensland was limited to the minority of the eldest child (Sharon Tong) see paragraph 3.3.1 of the Sixth Report of the Administrators. Sharon Tong has turned 18 in mid-December 1995 and therefore ceased to be an infant. The Administrators’ grant of Letters of administration consequently has lapsed. This meant that the Brisbane property no longer forms part of the Solomon Islands estate. The Administrators accordingly are not obliged to continue with the Metway Mortgage payments. They now seek a formal direction that they be released from any further payment.

I think the situation here is fairly obvious. The Administrators responsibility have lapsed as a matter of law and there is nothing that this court can do about that. In the joint affidavit of Robert Victor Emery and John Sullivan filed on 16 April, 1996, at paragraph 2, they pointed out that they had sought to discuss matters pertaining to that property with Sharon Tong and Madalene Tong, but to no avail.

The Administrators have ceased payments since January, 1996. It seems that no further discussions have been held concerning the Brisbane property. I do not think any further directions need be made as to the responsibilities of the Administrators. By law their obligations have ceased and they have done the right and reasonable thing in the circumstances. The direction sought is granted.

ADMINISTRATORS CLAIMS FOR REMUNERATION

I have had the opportunity to go through the claims for remuneration of the Administrators. Nothing of substance has been raised in opposition to each specific item claimed for remuneration. Accordingly approval is also granted as follows:

R.V. Emery - period from 20.02.95 to 31.03.96, the sum of SBD $62,319.23
J. Sullivan - period from 20.02.95 to 28.03.96, the sum of AUD. $36,882.72.

SERVICE CHARGES OF R.V. EMERY

The rate per hour which R.V. Emery currently charge for his professional services stand at SBD350.00 per hour. The last time it was increased was from July 1993. It was then $300.00 per hour. Mr Emery’s rates have not been increased therefore for the last two years ten months. His normal professional fees stand at SBD500.00 per hour. He has been working all along it seems at a discount rate for the estate. He now asks for an increase but leaves it to the court to decide on the figure. That is not an easy task. On one hand I am satisfied that he is entitled to an increase. On the other hand, it is not so easy to decide on an appropriate figure for the increase, bearing in mind that he is already charging for his professional services at a much discounted rate. I do bear in mind that he is not asking for an increase to his normal rate of $500.00 per hour, but is asking for some increase. The increase that will be given at this stage will be on a 10% basis. If the Administrators feel that the increase is too little, then it is open to be appealed against. A 10% increase will give an increase of SBD35.00. The new rate of R.V. Emery per hour therefore will be SBD385.00 per hour, with effect from date of this ruling.

THE EAST KOLA RIDGE PROPERTY - PARCEL 191-034-119

What is of priority now is to have the arrears of rent owing to the estate by the current tenant recovered and to have the eviction orders against the tenant enforced. The matter in my view should not be allowed to remain static, but should be pursued as a matter of urgency with the Office of the Registrar of High Court who currently oversees the Office of the Sheriff. If transport is a problem then the Administrators may be able to assist with that and make a claim for refund of expenses.

THE AMOUNT OF SBD11, 176.69

It has been agreed that maintenance for the children be paid for the month of February as a payment of priority, at the rate of AUD220.00 per child for five children. This payment is accordingly approved.

OTHER PRIORITY PAYMENTS

These include payment for insurance plus security charges for the safe-keeping of some property at Atori. These are also approved.

Costs of the Administrators and Madalene Tong to be costs of the Administration.

Rights of appeal to Court Of Appeal.

R. PALMER
JUDGE