Cavanagh v Mace
[2023] VSC 670
•21 November 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S PRB 2021 21341
| MARGARET CATHERINE CAVANAGH | Plaintiff |
| v | |
| CHRISTOPHER MARSHALL MACE | Defendant |
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JUDGE: | Moore J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 16 November 2023 |
DATE OF JUDGMENT: | 21 November 2023 |
CASE MAY BE CITED AS: | Cavanagh v Mace |
MEDIUM NEUTRAL CITATION: | [2023] VSC 670 |
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WILLS AND ESTATES – Where defendant seeks passing over of himself and plaintiff and appointment of independent administrator – Where plaintiff mismanaged the estate and neglected executorial duties – Where plaintiff has a conflict of interest – Where plaintiff unfit to hold office as executor – Application granted - Administration and Probate Act 1958, s 15 – O’Halloran v Coffey (No 2) [2023] VSC 51; Re Estate of Crane (2005) 93 SASR 198; In the Estate of S Dec’d [1968] P 302.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | In person | |
| For the Defendant | Ms R Morison | Gauld & Co., Solicitors |
HIS HONOUR:
Marshall Raymond Mace died on 18 September 2019 at 57 years of age, leaving a will dated 17 May 2018. By his will he appointed three executors: his domestic partner Margaret Cavanagh, who is the plaintiff in this proceeding; his son from a previous marriage Christopher Mace, who is the defendant in this proceeding; and Linda Morrish, the plaintiff’s sister. Linda Morrish has renounced probate.
An inventory of assets and liabilities filed by the plaintiff in December 2021 recorded that the net value of the deceased’s estate was $417,972. The main asset of the estate is a half interest in a property at 175 Bairnsdale-Dargo Road, Bairnsdale (the farm). The plaintiff is the registered owner of the other half interest in the farm.
By his will, the deceased gave a life interest in his interest in the farm to the plaintiff, with the remainder of his interest going in equal shares to the defendant, his daughter Laura Mace, and to the plaintiff’s son from a previous relationship, Luke Dogger. The residue of his estate passes to the plaintiff.
By grounds of objection filed on 31 March 2022, the defendant seeks that the plaintiff be passed over as executor of the deceased’s estate; at trial he proposed that he too be passed over.[1] The defendant contends that the plaintiff is unfit to act and should be passed over on four grounds:
[1]As noted above, the third executor nominated by the deceased in his will has renounced probate.
(a) that she has mismanaged the estate in its dealings with his grandmother and the deceased’s mother, Beverley Joyce Frances Mace (Mrs Mace), thereby exposing the estate to liability;
(b) that she has neglected her duties as executor to preserve the assets of the estate, allowing the estate property to be wasted and converted both personally and by her son Mr Dogger;
(c) that she has a conflict of interest and duty between her duty as executor and her interest as a life tenant of the farm; and
(d) that she is of bad character.
The defendant seeks that an independent administrator be appointed to administer the estate. Mark Maier, a solicitor, has consented to being appointed administrator of the estate with the will annexed.
At the conclusion of the trial of the proceeding I informed the parties that I would grant the defendant’s application. The Court made the following orders:
1 Pursuant to s 15 of the Administration and Probate Act 1958, and the inherent jurisdiction of the Court, the plaintiff, Margaret Catherine Cavanagh, and the defendant, Christopher Marshall Mace, be passed over as executors of the Will of the deceased, Marshall Raymond Mace, dated 17 May 2018.
2 Leave be granted to Mark Albert Maier of McNab McNab & Starke to apply for a grant of administration with the Will dated 17 May 2018 annexed, subject to any requirements of the Registrar of Probates, and the Court will dispense with the requirements to:
(a)provide any administration guarantee in relation to his administration of the estate of the deceased; and
(b)post a notice of his intention to apply for a grant of representation on the Court’s website.
3 Mark Albert Maier be permitted to uplift the original Will of Marshall Raymond Mace dated 17 May 2018 from the Registrar of Probates for the purpose of his application for letters of administration.
4 Mark Albert Maier be entitled to payment of his costs of administration of the estate from the estate of the deceased, including payment of any disbursements.
These are my reasons for making these orders.
Witnesses & evidence
In support of his application, the defendant relied upon an affidavit made by Mrs Mace filed on 7 December 2022, affidavits made by his solicitor, Peter Gauld, filed on 24 October 2022 and 26 April 2023, as well as an affidavit by Mark Maier sworn on 3 October 2023. Although Mrs Mace and Mr Gauld were required for cross examination, ultimately neither were challenged on any aspect of their evidence.
The plaintiff relied upon affidavits made by her on 23 May 2023, 20 June 2023 and 7 July 2023. It is important to make two general observations about these affidavits. First, to a significant event they did not engage with or respond to the grounds for passing over relied upon by the defendant referred to in [4] above. Secondly, their contents were, to a significant extent, repetitive, argumentative and otherwise contained a significant amount of inadmissible material.
The plaintiff was cross examined by counsel for the defendant. I did not find her to be a reliable witness. On a number of occasions she was not responsive to questions asked of her, or only became so when directed by counsel or by the Court. On several occasions, she took the opportunity in answering questions to argue the merits of her case from the witness box. These forays into the broader controversy between the parties in turn revealed her hostility towards the defendant and the deceased’s brother, Greg Mace, and her unqualified support of her son, Mr Dogger, in respect of all matters. I have also found that the plaintiff invented claims in relation to a particular and important matter for the purpose of assisting her case.[2]
[2]See below at [26].
It was also apparent that the plaintiff had limited ability to recall relevant details in respect of important events, in particular those which occurred in January and February 2020. To some extent this is understandable given the passage of time and the proximity of those events to the deceased’s passing. However, even making allowances for such matters, I have little confidence in the plaintiff’s recollection of important matters or, as will become apparent, her understanding of her responsibilities as executor. This was exemplified by the submissions the plaintiff made about other legal proceedings brought by Mrs Mace against her in her personal and representative capacities to which I later refer.[3] She initially submitted from the bar table that no such proceedings had been commenced, a submission which was patently wrong. Ultimately her evidence about the nature of the claims brought in that proceeding demonstrated a profound confusion and lack of understanding about those claims.
[3]See below at [33].
For these reasons, where there is any conflict between Mrs Mace’s uncontested evidence and the evidence given by the plaintiff, I have accepted Mrs Mace’s evidence.
Facts
Mrs Mace and her husband, Ian Mace, became the registered proprietors of the farm in 1990, building a house on it in 1992 or 1993. After her husband died in 2004, Mrs Mace became the sole registered proprietor of the farm. The deceased’s brother and Mrs Mace’s other son, Greg Mace, then came to live at the farm and assisted Mrs Mace with its day-to-day operations.
Mrs Mace, who is now 86 years of age, began to consider selling the farm in about 2015 after she and Greg began to suffer minor physical ailments which posed greater challenges for them in maintaining the farm. Those difficulties increased in 2016 when Mrs Mace injured her shoulder.
In early 2017, Mrs Mace and the deceased had a conversation in which the deceased said that he and the plaintiff might be interested in purchasing the farm. In about mid-2017, Mrs Mace, the deceased and the plaintiff agreed that Mrs Mace would sell the farm to the deceased and the plaintiff for $400,000, although it was valued between $470,000 and $520,000. They agreed that the deceased and the plaintiff would pay Mrs Mace $300,000 in exchange for an advance of $100,000 from Mrs Mace which the deceased and the plaintiff would then use to build Mrs Mace a ‘granny flat’ on the farm. This occurred and a granny flat was constructed on the farm which Mrs Mace moved into around Christmas 2017.
In May 2018, the sale of the farm was completed and the deceased and the plaintiff became registered proprietors of the property as tenants in common in equal shares.
On 14 May 2018, Mrs Mace, the deceased and the plaintiff executed a written ‘Granny Flat Agreement’ which included the following terms:
(a) The deceased and the plaintiff would be responsible for the structural maintenance and upkeep of the granny flat.
(b) The deceased and the plaintiff, together and individually, would care for Mrs Mace, providing meals, cleaning and laundry, assisting her with bathing and dressing as well as assisting her with her personal affairs, health care and the like.
(c) The deceased and the plaintiff would pay 67% of the outgoings of the farm, including the granny flat, and Mrs Mace would pay the remainder.
(d) The parties to the agreement acknowledged that circumstances may arise which could bring the agreement to a voluntary end including, for example, the deterioration of their relationship, a change in Mrs Mace’s care needs or the ability of the deceased and the plaintiff to continue providing such care. They also acknowledged that circumstances may arise which could bring the agreement to an involuntary end including, for example, relationship discord, default of obligations or the death of a party. In either eventuality, the agreement would come to an end upon the giving of 30 days’ written notice.
(e) The deceased and the plaintiff would indemnify Mrs Mace for any loss and damage she may suffer because of the actions of the deceased and the plaintiff; and
(f) The agreement was binding on each party’s estate.
Consistent with the provision of the Granny Flat Agreement referred to in the last subparagraph above, the deceased’s will contains an acknowledgement that Mrs Mace has:
… a Granny Flat Agreement with [the plaintiff] and I which affords her rights in relation to the granny flat situated on 175 Bairnsdale-Dargo Road, Bairnsdale. To the extent that I was, during my lifetime, bound by the provisions of the Granny Flat Agreement, my Trustees are to [sic] similarly bound.
Mrs Mace lived in the granny flat without incident from Christmas 2017 until about April 2019 when the plaintiff’s son, Mr Dogger, and his domestic partner, Angelina De Brincat, arrived at the farm. Mr Dogger and Ms De Brincat came and went at all hours of the day and night and Mrs Mace felt intimidated.
Then, on 18 September 2019, the deceased died. A month later, the plaintiff told Mrs Mace that she would have Mr Dogger on the farm whenever she wanted. By the end of 2019, the plaintiff and Mr Dogger often said to Mrs Mace that the farm was theirs.
By the end of 2019, Mrs Mace felt unsafe and unsettled and did not want to continue to be on the farm alone. Sometimes she stayed elsewhere with friends and her son Greg provided her with support and sometimes stayed with her at the granny flat. I note the plaintiff’s evidence that Greg effectively lived at the granny flat on a full time basis from after the deceased’s death until 3 February 2020.
The summer of 2019 and 2020 was a bad fire season. The plaintiff was not diligent in keeping the grass down on the farm. When Mrs Mace expressed her concern about this, the plaintiff’s response was to say that ‘it’s just stuff’ and that insurance would pay for it.
In January 2020, the plaintiff removed Mrs Mace’s possessions from the main house on the farm and put them in one of the sheds.
By mid-January 2020, Mrs Mace began staying with a friend in Bairnsdale. On 21 January 2020, Mrs Mace returned to the farm with Greg but felt threatened by Mr Dogger who began driving the deceased’s car continuously around the granny flat. Mrs Mace left the farm the next day and returned to Melbourne.
Mrs Mace returned to the farm with her son Greg on 3 February 2020. While she was on her verandah that day, Mr Dogger came up behind Greg and said to Greg: ‘if you don’t leave the police will come and drag you away’. Mrs Mace obtained an interim intervention order against Mr Dogger on 10 February 2020.
On 15 February 2020, Mrs Mace and Greg attended the farm with the police to gain access to the granny flat. Mr Dogger approached the police, with the plaintiff behind him and one of them said to her, ‘you no longer live here, you moved out and I did this the right way – I got a locksmith to change the locks’. During the visit, Ms De Brincat said to Mrs Mace ‘if you set one foot on this place I will murder you myself’. That night Mrs Mace stayed in a motel in Bairnsdale.
The police removed Mr Dogger and Ms De Brincat from the farm on 17 February 2020.
I am readily satisfied that the plaintiff had changed the locks on the granny flat, or permitted Mr Dogger to do so, without Mrs Mace’s permission. Later on 17 February 2020 after Mr Dogger and Ms De Brincat had been removed from the farm, Mrs Mace attended the farm with a locksmith. While she was there, the plaintiff said to her, ‘you moved out, you don’t live here anymore. I own the unit’. There was no truth to the claim that Mrs Mace had moved out of the granny flat and I reject the plaintiff’s evidence that Mrs Mace told her that she had left the granny flat to live on a farm which she had purchased.
Upon entering the granny flat on 17 February 2020, Mrs Mace saw that all of her clothing and possessions had been removed, most of her furniture was missing and that her washing machine was missing as well. She identified that $4,000 in cash was missing and that her safe had been ripped from the wall. She also saw dog food and urine in the bathroom. It would appear that most of her possessions, other than the cash and the safe, were put in one of the sheds on the farm. Mrs Mace was distressed, Greg called an ambulance and Mrs Mace was later attended to by a paramedic and the police arrived. She then returned to her motel in Bairnsdale. Eleven days later, Mrs Mace moved to a friend’s home in Bairnsdale because the motel was too expensive.
On 19 March 2020, Mrs Mace obtained a further interim intervention order against Mr Dogger which required him not to come within 200 metres of the farm or any other place where she lived.
Mrs Mace maintained her own insurance on the granny flat. On 20 March 2020, a building surveyor from her insurer attended the granny flat to assess the damage and provide a quotation for repair.
On 20 March 2020, the plaintiff’s then solicitors sent a letter to Mrs Mace’s then solicitors referring to the Granny Flat Agreement and purporting to give notice to revoke her licence to reside in the granny flat.
On 31 March 2020, an occupational hygienist assessed the granny flat for methamphetamine contamination. A report was later prepared which concluded that methamphetamine was detected on all sampled surfaces in the granny flat, with the assessment having been undertaken of all interior areas. The granny flat was found to be unfit for occupancy and as requiring ‘extensive decontamination works’. Mrs Mace later received a quotation for remediation works of the granny flat at a cost of some $36,000.
On 9 May 2020, Mrs Mace obtained crisis accommodation in Wy Yung where she continues to reside.
Proceeding brought by Mrs Mace
On 22 December 2022, Mrs Mace commenced a proceeding in this Court against the plaintiff (in her personal capacity) and against the deceased’s estate (Mrs Mace’s proceeding).[4] Mrs Mace claims that the plaintiff breached the terms of the Granny Flat Agreement in various ways and as a result she suffered loss and damage in the amount of $263,694.39. Damages are sought against both the plaintiff and the deceased’s estate. Mrs Mace also alleges the Granny Flat Agreement was not terminated in conformity with its terms.
[4]S ECI 2022 05333.
On 2 March 2023, interlocutory judgment for damages in default of defence was entered against the plaintiff in Mrs Mace’s proceeding.
Consideration
In O’Halloran v Coffey (No 2),[5] I considered in detail the Court’s power in an appropriate case to pass over the executor of a deceased estate. The exercise of the power must be informed by an appreciation of the limited nature of the jurisdiction. In general, a person named as an executor by a testator is entitled to a grant of probate; the Court will not readily pass over a named executor. The jurisdiction is to be exercised having regard to the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate.[6]
[5][2023] VSC 51, [52]-[73].
[6]Ibid [100]-[105].
The need to ensure that the deceased’s estate is properly administered and the interests of all of persons beneficially entitled to it makes this a clear case for the Court to pass over the plaintiff and defendant as executors of the estate. I am readily satisfied that the plaintiff’s acts and omissions have jeopardised the security of the estate property and the remainder beneficiaries’ interests, conduct which leaves the plaintiff entirely unsuitable to act as executor and trustee of the deceased’s estate. These failures principally relate to the mismanagement of the deceased’s estate in its dealings with Mrs Mace, the failure to preserve the property of the estate and the existence of numerous conflicts between interest and duty. It is sufficient to record that a compelling basis for the exercise of the power is established by the following matters.
First, as I have found, before the plaintiff’s solicitors gave notice to Mrs Mace's solicitors purporting to revoke her licence to reside in the granny flat, the plaintiff changed the locks on the granny flat, or permitted Mr Dogger to do so. In doing so, the plaintiff thereby exposed the estate to potential liabilities for breach of the Granny Flat Agreement which Mrs Mace has subsequently pursued in the proceeding commenced by her in this Court.
Secondly, the plaintiff’s evidence in relation to Mrs Mace’s proceeding reveals that she has little understanding about the legal issues raised by it and is confused and bewildered about how to respond to it. The beneficiaries of the estate can have no confidence that their interests in relation to that proceeding will be protected if the plaintiff remains as executor. Furthermore, the plaintiff’s evidence about Mrs Mace’s proceeding left me with grave concerns about her capacity to distinguish between her own personal interests and her interests as executor of the deceased’s estate, and indeed whether she has a satisfactory understanding of her essential duties and responsibilities as executor.
Thirdly, the plaintiff is seriously and irreconcilably conflicted in various ways. She is conflicted between her duties as executor to preserve the estate and to uphold the Granny Flat Agreement, and her personal interest in excluding Mrs Mace from the granny flat so that she is able to use the farm as her own. She is conflicted as between her interest in defending Mrs Mace's proceeding in her personal capacity, as against her duty as executor in relation to the defence of that proceeding. The plaintiff has demonstrated no capacity to manage these conflicts which are profound and readily distinguishable from ordinary types of conflicts which executors may confront when they are also beneficiaries. It cannot be suggested that these conflicts are of a type which the deceased might be taken to have anticipated in appointing the plaintiff as executor of his estate.
Fourthly, the plaintiff has failed to prevent loss and damage to the estate property. While the plaintiff has been the executor and living on the farm, the granny flat has been damaged and has been rendered uninhabitable because of methamphetamine contamination, thereby jeopardising the security of the estate property and the remainder beneficiaries’ interests. Furthermore, the beneficiaries would be well-entitled to be alarmed about the plaintiff’s capacity to preserve the estate property in light of her evidence, allegedly based on what she was told by an unidentified person from the local council, that the granny flat just needed a ‘good wipe over’ with ‘soapy water’ to clean up the methamphetamine contamination. That she maintained such a cavalier view after having been taken in cross examination through the report from the occupational hygienist merely confirmed the plaintiff’s manifest unfitness to act as executor.
Fifthly, I am readily satisfied that there is entrenched and irreconcilable conflict between the plaintiff and the defendant as a result of which there is no realistic prospect that the deceased’s estate will be properly administered in the interests of the beneficiaries while they remain executors. The plaintiff’s many criticisms of the defendant’s alleged conduct did not assist her case, given that the defendant has volunteered to be passed over and because these matters did not engage with or respond to the reasons advanced as to why the plaintiff should be passed over.
Sixthly, by her conduct the plaintiff has demonstrated deficiencies in character[7] which fortify my conclusion that she is unfit to hold office as executor. The following matters have led me to this conclusion:
[7]The relevance of this principle in the context of passing over applications is referred to in Re Estate of Crane (2005) 93 SASR 198, 204 [25]; and In the Estate of S Decd [1968] P 302.
(a) The plaintiff’s dismissiveness of expert opinion about the methamphetamine contamination of the granny flat to which I have referred in [40] above.
(b) The making by the plaintiff of wild and unsubstantiated allegations about her former legal representatives having deliberately drafted an untruthful affidavit on her behalf.
(c) The plaintiff’s preparedness to invent claims to advance her personal interests.[8]
(d) The plaintiff’s failure to prevent damage to Mrs Mace’s personal property and its removal from the farm and granny flat, and/or contributing to same.
(e) The plaintiff’s conduct (and conduct by Mr Dogger which she permitted to occur) in late 2019 and early 2020, as reflected in my findings of fact, which amounted to a coercive campaign to drive Mrs Mace from the farm by threats and intimidation. I regard such conduct towards a vulnerable elderly person, whose occupancy of the granny flat was apparently supported by contractual rights, as an instance of what is now described as ‘elder abuse’.
[8]See [26] above.
Except to a limited extent at an evidentiary level, the plaintiff failed to properly challenge the case for passing over as advanced by the defendant. I do, however, take into account the modest size of the deceased’s estate. This is a matter which militates against the appointment of an independent administrator because of the associated costs of such an appointment. However, this consideration does not outweigh the other important matters to which I have referred which overwhelmingly support the plaintiff being passed over. In any event, the estate is at least of a size which is able to meet the costs associated of an independent administrator.
I will hear the parties on costs.
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