Browne v Meinhardt
[2006] VSC 97
•16 March 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. of
| TIMOTHY BROWNE AND RODERICK McKENZIE | Plaintiffs |
| v | |
| WILLIAM EDWARD MEINHARDT | Defendant |
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JUDGE: | COLDREY J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 9 MARCH 2006 | |
DATE OF JUDGMENT: | 16 MARCH 2006 | |
CASE MAY BE CITED AS: | BROWNE & ANOR v MEINHARDT | |
MEDIUM NEUTRAL CITATION: | [2020] VSC 97 | |
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Application for Probate – Caveat – Directions.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Ms C. Sparke | Dibbs Abbott Stillman |
| For the Defendant | Dr I. Hardingham QC with Mr K. Lyons | Chambers & Co |
HIS HONOUR
It is not necessary to canvas the details of this matter. It is sufficient to note that the caveator, William Edward Meinhardt, opposes the making of a grant of probate to the Executors of the will of William Lindsay Meinhardt who died on 30 November 2003, on the grounds of dilatoriness (they having failed to make application for a grant of probate between the date of death and 22 December 2005), and also on the ground of conflict of interest. This application is in addition to another proceeding in the Supreme Court of Victoria in which the Caveator seeks the removal of the Executors under s.15 of the Administration and Probate Act 1958 (No. 9484 of 2005). It was not until that proceeding was instituted that a grant of probate was sought. The plaintiffs who propounded the will are Timothy Browne and Roderick McKenzie.
I was informed that the discovery had been given in proceeding No. 9484 of 2005 but not in relation to the present conflict of interest ground. This ground asserts that:
"There is or may be a conflict of interest between the plaintiffs acting as executors of the estate in the interests of all beneficiaries thereof when they act or have acted, or have been partners in firms which act or have acted, for or on behalf of one of the beneficiaries of the estate, Victoria Treyvaud, and companies controlled by her."
There was no objection taken by the plaintiffs Timothy Browne and Roderick McKenzie to the joining of the Caveator as a defendant to the originating motion for the grant of probate which is before this Court; nor was there any objection generally to the directions contained in the proposed order drafted by the Caveator. Indeed, one of the orders agreed was that the Caveator, having been added as a defendant, file and serve particulars of the allegation of conflict of interest on or before 31 March 2006.
Objection was, however, taken to that part of the proposed order contained in paragraph 4 which reads:
“On or before 7 April 2006, the plaintiffs make discovery of the following documents in their possession custody or power:
(a)documents in relation to any professional or personal relationship between each of the plaintiffs (individually or as members of, consultants to or employers of any firm) and Victoria Treyvaud or any company controlled by her or of which she was a director at the time of that relationship;
(b)documents in relation to any assets of the Estate of William Lindsay Meinhardt (deceased) ('the Estate') which assets:
(i)are or may be in the possession of Victoria Treyvaud or any company controlled by her or of which she is a director;
(ii)relate to debts or liabilities which are or may be owed by Victoria Treyvaud or any company controlled by her or of which she is a director;
(iii)include or may include any right of the deceased in relation to any trust or trusts of which the trustee is or was a company controlled by Victoria Treyvaud or of which she is or was a director;
(c)documents in relation to any liabilities of the Estate which relate to debts which are or may be owed to Victoria Treyvaud or any company controlled by her or of which she is a director.”
In support of the making of this order, counsel for the Caveator submitted that the issue of conflict had been raised by the Executors in affidavit material sworn in relation to the proceeding brought under s.15 of the Administration and Probate Act. Specifically, paragraphs 9 and 10 of the affidavit of Timothy Browne sworn on 20 December 2005, were relied upon. Paragraph 9 reads as follows:
"Shortly after the Testator's death my partner at BJT Legal, Andrew Byrne, told me that he had had a discussion with Mr Peter Czech of State Trustees, and that Mr Czech had told him that I should not apply for probate of the Will because there were conflicts of interest which I would face if I were to be granted probate. I did not agree with this view, and I still do not agree with it. However, in an attempt to avoid a problem arising after the grant of probate, I wrote to each of the beneficiaries advising them of the steps I had taken to protect the Estate and asking each of them to indicate whether they perceived any conflict of interest which might exist for either Mr McKenzie or me."
(Copies of those letters, to which no responses were forthcoming, were exhibited.)
Mr Browne further deposes in paragraph 10 that nonetheless, he was subsequently advised by Mr Byrne that BJT Legal would no longer act for him if he were to proceed to apply for probate. Since then he had either conducted his own correspondence or retained other solicitors.
Later in his affidavit (paragraphs 30 and 31), Mr Browne deposed as follows:
“30.In mid-2005 I became aware of a dispute that had arisen between certain beneficiaries of the Estate in relation to a family trust. Since I had acted for the Testator and had drawn documents which had transferred control of certain of the entities, I was concerned that my so acting might have compromised my position in regard to acting as his Executor, even though I had nothing to do with actions subsequently taken by those entities. Upon my solicitor’s advice I approached the Law Institute of Victoria on 2 September 2005 to obtain a Ruling from the Ethics Committee and supplied them with information. . . .
31.After supplying the Ethics Committee with further information I received a letter from them indicating that the did not consider that I had a conflict.”
In a subsequent affidavit sworn on 21 December 2005, Mr Browne elaborated on the material contained in his earlier affidavit indicating (inter alia) that he had acted for the Testator at the time when control of certain family trusts were passed by the testator to his daughter Victoria Treyvaud and that subsequently certain distributions of the assets of those trusts had been made, the validity or propriety of which might be questioned by the Testator’s other children. Although Mr Browne had had nothing to do with the subsequent distribution, he was concerned that an actual or potential conflict of interest might exist. This motivated his seeking of the ruling from the Law Institute of Victoria. I have already mentioned the result of that ruling.
I interpolate that Mr Browne’s affidavit of the 20 December 2005 indicates that a claim is made by one of the transferred entities, Meinhardt (Hong Kong) Limited that it had lent to the Testator approximately $1.66M. If that claim were pursued and made out, it could render the Estate insolvent.
It was put on behalf of the plaintiffs that any concern about the possibility of conflict was mentioned in a letter sent to beneficiaries on 3 February 2004 by Mr Browne. It had elicited no expressions of concern, nor was conflict an issue in the application pursuant to s.15 of the Administration and Probate Act. That allegation only surfaced in February 2006. Moreover, it was submitted on behalf of the plaintiffs, that the issue of conflict had been appropriately addressed as was clear from the affidavits of Mr Browne.
It was further submitted that an allegation of a conflict of interest brought against professional persons such as Mr Browne (who was a solicitor) and Mr Roderick McKenzie (who was an accountant) was a serious one and a proper relevant basis for it needed to be established before proceeding to discovery. Accordingly, it was argued that the no order for discovery should be made as a flow-on direction but rather, the appropriateness of an order for discovery should be gauged following the receipt of particulars from the Caveator of the conflict allegations. Indeed, it was argued that the discovery sought by the Caveator was merely a “fishing expedition”.
I do not think that the lack of any earlier claim of conflict of interest can be determinative of this matter. It has now been made and is before this Court.
On the other hand the fact that a possible conflict of interest has been raised in the mind of Mr Browne himself or such other persons as Mr Czech of State Trustees or Mr Byrne of BJT Legal, does not mean there was such a conflict. Indeed, Mr Browne appears to regard the matter as having been resolved by the Law Institute of Victoria ruling. However, this is a matter for this Court.
In my view the allegations of conflict of interest are, on the present state of the material, quite inchoate. Indeed the precise formulation may depend on future events. For example, whether entities in which Victoria Treyvaud has an interest were to sue the Estate.
One reason advanced by counsel for the Caveator for an order automatically requiring discovery was to avoid the cost of re-attending Court in circumstances where the Estate may possibly prove to be insolvent.
It seems to me that there is a simple practical resolution to the current stand-off between the parties. Since the orders already contain a provision for liberty to apply, the order may remain in its present form with the plaintiff, upon the receipt of the particulars of the conflict of interest ground, determining whether to give the discovery sought or to bring he matter back before this Court.
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