Coffey v O'Halloran

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0037

JOHN LAWRENCE COFFEY	Applicant
v
RUTH STANISLAUS O’HALLORAN	Respondent

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JUDGES:	WALKER and KAYE JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	13 June 2023
DATE OF JUDGMENT:	16 June 2023
MEDIUM NEUTRAL CITATION:	[2023] VSCA 146
JUDGMENT APPEALED FROM:	[2023] VSC 51 (Justice Moore)

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PRACTICE AND PROCEDURE – Appeal – Stay – Wills and estates – Eight year delay since death of testatrix – No application filed for a grant of probate – Delay occasioned by ongoing disputes between members of the family, in particular, between the applicant and the respondent – Order by trial judge, that the applicant and respondent be passed over as executors of the will, and that leave be granted to an independent administrator to apply for a grant of letters of administration with the will annexed – Application for stay refused.

Administration and Probate Act 1958, ss 15, 28; Supreme Court (General Civil Procedure) Rules 2015, rr 64.39, 66.16.

Asea 1 Pty Ltd v Rudyard Pty Ltd [2020] VSCA 122; Cross Country Realty Victoria Pty Ltd v Ubertas 350 William Street Melbourne Pty Ltd [2015] VSCA 347; Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653; Maher v Commonwealth Bank of Australia [2008] VSCA 122; Neate v Thoroughbred International Marketing Pty Ltd (2012) 34 VR 314.

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Counsel
Applicants:		In person
Respondent:		Ms R G Morison
Solicitors
Applicants:	In person
Respondent:	McNab, McNab & Starke

WALKER JA
KAYE JA:

The applicant applies for a stay of an order made by a judge of the Trial Division on 23 March 2023, the effect of which is that both the applicant and the respondent be passed over as executors of the will of their late mother, and that leave be granted to an independent administrator, Mr Lachlan Vallance, of Hicks Oakley Chessell Williams, to apply for a grant of letters of administration with the will annexed.
The applicant and the respondent are respectively the son and daughter of Joan Jackman Coffey (‘the deceased’), who died on 17 February 2014, leaving a will dated 26 September 2008. By the terms of that will, the deceased devised and bequeathed her estate, in differing proportions, in effect to each of her six children.
Since the death of the deceased, there has been considerable delay in the filing of an application for a grant of probate of the will, and no such application has, as yet, been filed. The delay has been occasioned by ongoing disputes between members of the family, and, in particular, between the applicant and the respondent, as to the content of the inventory of assets and liabilities, which is required to be filed with the application for probate. In addition, the parties have engaged in extensive correspondence concerning various issues relating to the administration of the estate, many of which have remained unresolved.
As a result of the impasse, the respondent issued an originating motion by which she sought orders calling on the applicant to show cause why he should not bring the will into Court and either apply for probate or renounce probate, or, in the alternative, an order that the respondent be entitled to prove the will. Subsequently, the respondent informed the Court that, in place of the orders sought in the originating motion, she sought orders that both she and the applicant be passed over, and that an independent administrator be appointed to approve the will and administer the estate.
In response, the applicant issued a summons, by which he sought orders that the respondent be passed over as an executor of the will, and that he be entitled to make application for a grant of the probate of the will.
The originating motion, and the applicant’s summons, came on for hearing before the judge in November 2022. At a pre-trial hearing, the judge identified three specific issues for determination by him, namely:
(a)whether the Court has power to order that both the applicant and the respondent, or the respondent alone, be passed over as executors of the estate of the deceased;
(b)if so, whether the power to pass over should be exercised by the Court ordering that both the applicant and the respondent, or solely the respondent, be passed over as executors in the estate of the deceased;
(c)if both the applicant and respondent are passed over as executors, whether an independent person should be appointed to administer the estate.
In detailed reasons for judgment,[1] the judge stated his conclusions in the affirmative in respect of each of those three issues.
[1]O’Halloran v Coffey & Anor (No 2) [2023] VSC 51 (‘Reasons’).
In respect of the first issue, having the relevant authorities, the judge concluded that the Court does have power, both under s 15 of the Administration and Probate Act 1958, and by reason of the inherent jurisdiction of the Court, to make an order that one or both of the executors of the estate be passed over.
In respect of the second issue, the judge further concluded that, in the circumstances of the case, it was in the interests of all the persons beneficially entitled under the estate, and the due and proper administration of the estate, that the Court exercise its power to pass over the applicant and respondent as executors of the estate.[2] The judge reached that conclusion for a number of reasons, including four in particular.
[2]Ibid [120].
First, there had not been an application for a grant of probate made in the eight years that had passed since the death of the deceased, which his Honour characterised as a ‘profound failure’, by both the applicant and the respondent, to discharge one of their essential responsibilities as executors of the estate.[3]
[3]Ibid [109].
Secondly, the judge noted that the extent of the disagreement as between the applicant and the respondent is very significant and entrenched, which underlined the need for an inventory to be prepared by an independent person capable of impartially assessing the value of the deceased’s estate.[4]
[4]Ibid.
Thirdly, the judge considered that, as a consequence of the fact that the respondent is a beneficiary of the estate, coupled with the history of the matter, the applicant was most unlikely to bring an impartial, independent mind to the discharge of his duties as executor. His inability to do so was underpinned by an ‘array of conflicting interests’, which would arise in connection with his administration of the estate. The judge considered that, if appointed as an executor, the applicant would have a number of conflicts of interest, so that he was ‘hopelessly conflicted’ between, on the one hand, his role of executor, and on the other hand, his interests as a residuary beneficiary.[5]
[5]Ibid [118].
Fourthly, the judge noted, from the evidence, that the administration of the estate had become effectively paralysed under the weight of the applicant’s and the respondent’s ‘dysfunctional and conflictual relations and a plethora of actual and alleged conflicts of interest’.[6]
[6]Ibid [119].
It was for those reasons that the judge was satisfied that the interests of all of the parties beneficially entitled under the deceased’s estate, and the due and proper administration of the estate, would be best served by exercising the Court’s power to pass over both the applicant and the respondent as executors, and the appointment of an independent executor.
In respect of the third issue, the judge considered the proposal made by the applicant that his brother, and/or the domestic partner of his sister, be appointed as administrators of the estate. The judge noted that, in view of the ongoing acrimony within the family, the fact that the applicant’s brother and sister were beneficiaries under the will, and the size and complexity of the estate, it would not be appropriate to appoint those persons as executors. His Honour considered that it was important that the person who administers the estate would have the requisite professional expertise, and be a person with a ‘firmly independent disposition’, with which to navigate the strongly held positions of the applicant and the respondent, and the other beneficiaries.[7]
[7]Ibid [136].
In his application for leave to appeal, the applicant has specified some 21 proposed grounds of appeal. In his written case in support of the application for leave to appeal, he has grouped those grounds into some seven separate issues. In response, the respondent has filed a written case, responding to each of those proposed grounds.

The application for a stay

In support of the application for a stay, the applicant, who was unrepresented, submitted that the grounds of appeal, on which he proposes to rely, are arguable. He submitted that, until the appeal is heard and determined, it is highly desirable that no grant of letters of administration should be made to Mr Vallance, and that no excessive expenses be incurred on behalf of the estate. It was submitted by the applicant that, in order to save expense, he should be appointed as a ‘caretaker administrator’ in a limited capacity, or, alternatively, that the majority of the beneficiaries be permitted to choose a temporary administrator.
In response, the respondent did not oppose the grant of a stay, but opposed the application for the appointment of a temporary administrator of the estate. The respondent did, however, submit that the application for leave to appeal has no real prospects of success.

Application for stay — principles

The Court has jurisdiction to stay the execution of a judgment or order under rr 64.39 and 66.16 of the Supreme Court (General Civil Procedure) Rules 2015. The principles that are applicable to such an application are well-established. Ordinarily, a successful party in a proceeding is entitled to the benefit of the judgment. Accordingly, the onus is on the applicant for a stay to establish that such a stay should be granted.[8] It is recognised that the power to order a stay is to be exercised only where special or exceptional circumstances exist.[9] Such special circumstances may exist if there is a real risk that an appeal, if ultimately successful, would be rendered nugatory if the stay were not granted.[10] In such a case, the Court is required to balance, on the one hand, the prospect that an appeal may be rendered nugatory in the absence of a stay, against the principle that the successful party in the proceeding should be entitled to the fruits of the judgment.[11] A stay should not be granted, however, unless there is at least an arguable ground of appeal.[12]
[8]ASEA 1 Pty Ltd v Rudyard Pty Ltd [2020] VSCA 122, [12] (Kaye and McLeish JJA) (‘ASEA 1’); Cross Country Realty Victoria Pty Ltd v Ubertas 350 William Street Melbourne Pty Ltd [2015] VSCA 347, [81] (Kyrou and McLeish JJA) (‘Cross Country’).
[9]Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653, 657 (Young CJ, Brooking J agreeing at 358); Maher v Commonwealth Bank of Australia [2008] VSCA 122, [20] (Dodds-Streeton JA, Redlich JA agreeing at [1]) (‘Maher’); Cross Country [2015] VSCA 347, [81]–[82] (Kyrou and McLeish JJA). See also Federal Commissioner of Taxation v Myer Emporium Ltd (No 1) (1986) 160 CLR 220, 222 [8]; [1986] HCA 13 (Dawson J).
[10]Cross Country [2015] VSCA 347, [82] (Kyrou and McLeish JJA); Maher [2008] VSCA 122, [25] (Dodds-Streeton JA, Redlich JA agreeing at [1]).
[11]ASEA 1 [2020] VSCA 122, [13] (Kaye and McLeish JJA).
[12]Maher [2008] VSCA 122, [27] (Dodds-Streeton JA, Redlich JA agreeing at [1]); Neate v Thoroughbred International Marketing Pty Ltd (2012) 34 VR 314, 320 1 [8]; [2012] VSCA 65 (Mandie JA and Cavanough AJA).

Analysis and conclusion

Applying those principles, in our view, there is no appropriate basis upon which to grant a stay in this case.
The first and foremost consideration concerns the extraordinary and undue delay that has so far taken place in the filing of any application for a grant of probate. That delay could not have been in the interests of the estate or any of the beneficiaries. If a stay of the orders of the judge were granted, the delay would be further exacerbated, pending the hearing and determination of the appeal. In that respect, it must be noted that the intended grounds of appeal are numerous, and, on their face, quite difficult to understand. There is no basis upon which to expect that the appeal could be expeditiously heard and determined. But even if it were expedited, there would nonetheless be a further delay in the filing of an application for probate, adding to the already significant delay.
On the other hand, if a stay is not granted, Mr Vallance would be able to apply for letters of administration and, on grant of them, proceed with the overdue administration of the estate. Thus, it might be said that there is a real risk that, if no stay is granted and the administration of the estate is completed prior to the hearing and determination of any appeal, the applicant’s appeal might be rendered nugatory.
However, it is necessary to balance that matter against the principle that a successful party should not be deprived of the fruits of the judgment. In that regard, we consider it is significant that the respondent’s (and the other beneficiaries’) interest in the due administration of the estate was vindicated by the judge’s decision. The estate consists of a number of substantial farm properties. It is important that those assets be properly collected, and administered in the interests of the beneficiaries under the will. The applicant has not been able to identify any irreparable disadvantage to the estate, which would be incurred if Mr Vallance were able to proceed with the administration of the estate, even if, in due course, the applicant were to succeed on his application for leave to appeal and the appeal.
It is also necessary to consider whether the proposed appeal is arguable. Due to the nature of the proposed grounds of appeal, there are some limitations in expressing any conclusion, other than one of a preliminary nature, in respect of them. Nevertheless, on the face of the grounds, they each appear to have a number of difficulties. It is only necessary for us to refer to those matters in brief compass.
The first seven proposed grounds of appeal contend that the original proceedings should have been brought by way of writ and pleading, rather than by way of originating motion. In our view, there is nothing in those grounds. It was quite appropriate that the proceeding be commenced by originating motion. From an early stage, the applicant was on notice that the respondent’s application was that both she and the applicant be passed over as executors. Before the commencement of the hearing, the judge identified the three critical issues, which he needed to determine. It would appear that each of those issues were addressed by the parties in the course of the proceeding.
The next three grounds (grounds 8–10) contend that the primary judge did not comply with the orders of the Court of Appeal. That complaint seems to be directed to a decision of the Court of Appeal, which had upheld an appeal by the applicant from a previous order made by a different member of the Trial Division ‘on the papers’.[13] In that decision, the Court remitted the matter to the Trial Division for hearing by a different judge on all issues.[14] Pursuant to that disposition, the judge conducted the hearing de novo and considered the matter anew. There is no basis for any argument that the judge did not comply with the orders made by the Court of Appeal.
[13]Coffey v O’Halloran [2021] VSCA 29 (Beach, Niall and T. Forrest JJA).
[14]Ibid [60].
Grounds 11–12 contend that the judge failed to apply remedies, provided under s 15 of the Administration and Probate Act, and also failed to advert to s 28 of that Act. Those grounds do not have any substance. As we have noted, the judge, in his reasons, identified the relevant powers of the Court to pass over executors, including a power under s 15 of the Administration and Probate Act. In that context, s 28 was not relevant.
The next set of grounds (grounds 13–14), contend that the judge failed to consider alternatives, and, in particular, that the judge ought to have passed over one executor (the respondent), particularly in view of the circumstance that the respondent, herself, had asked to be passed over. The short answer to those submissions is that the fact that the respondent was prepared to be passed over did not lead to the conclusion that the applicant should have been appointed executor alone. Further, at least two of the residuary beneficiaries had not indicated their agreement to the applicant’s appointment as sole executor or administrator.
The applicant then relies on four proposed grounds under the rubric ‘Evidentiary failings’ (grounds 16–19). Those grounds contend that the judge failed to consider matters relating to the draft inventory of assets and liabilities, and failed to take into account that the applicant had made an undertaking not to enrich himself from the disputes. It is not clear how those grounds relate to the orders that were made.
The final set of grounds (grounds 20 and 21) entitled ‘Beneficiaries’ rights’ contend that the judge failed to take into account the wishes of the beneficiaries. However, as the judge noted, there was no evidence of the position of two beneficiaries in respect of the issue whether the applicant should be passed over.
Importantly, none of the proposed grounds point to any relevant error in the conclusions formed by the judge in respect of the three critical issues his Honour was required to determine. Specifically:
(a)none of the proposed grounds put into any doubt the judge’s conclusion as to the power of the Court to pass over nominated executors;
(b)none of the proposed grounds are directed to, or impugn, the reasons provided by the judge for concluding that it was in the interests of the estate that both the applicant and the respondent be passed over as executors; and
(c)none of the matters contained in the proposed grounds at all affect the reasons provided by the judge for his decision to appoint an independent person as the administrator of the estate with the will annexed — they do not impugn his Honour’s conclusion that there is a real need for the estate to be administered by a person who is totally independent, and who has the necessary experience and expertise for that role.
For those reasons, we are not persuaded, on the materials before us, that there is any arguable error in the decision by the judge. Further, for the reasons we have outlined, it is very much in the interests of the estate that the orders, made by the judge, not be stayed. On the other hand, if a stay were granted, there would be further delay, and consequential prejudice, in the administration of the estate.
It follows that the application by the applicant for a stay of the orders made by Moore J on 23 March 2023 shall be refused.
We note that the applicant has also sought further orders directed to the appointment of a temporary administrator of the estate pending the determination of his application for leave to appeal. As we have refused a stay of the judge’s orders, the further orders sought by the applicant would be inappropriate. We thus refuse the application for those further orders.

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[2023] VSCA 146

16 June 2023