Deak v Estate of the Late Carolina Nacinovich and Ermanno Giurina
[2024] VSC 710
•18 November 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
GENERAL LIST
S ECI 2022 05227
BETWEEN:
| MARIA (AKA MARI) DEAK & ORS (according to the attached Schedule) | Plaintiffs |
| and | |
| ESTATE OF THE LATE CAROLINA NACINOVICH & ANOR (according to the attached Schedule) | Defendants |
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JUDGE: | Steffensen AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 26-27 March 2024, 5 April 2024, 10 May 2024 |
DATE OF JUDGMENT: | 18 November 2024 |
CASE MAY BE CITED AS: | Deak v Estate of the Late Carolina Nacinovich and Ermanno Giurina |
MEDIUM NEUTRAL CITATION: | [2024] VSC 710 |
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OWNERS CORPORATION – Consequences of owners corporation failure to comply with s 18(1) of the Owners Corporation Act 2006 (Vic) to commence legal proceedings – Non-compliance gives rise to procedural irregularity – Proceeding not a nullity – Application of Burbank Australia Pty Ltd v Owners Corporation PS 447493 [2015] VSC 160 – Where owners corporation put on substantial notice of non-compliance – Court’s discretion exercised to summarily dismiss proceeding brought by the owners corporation – Whether dismissal of proceeding by the owners corporation affects standing of the joint judgment creditors – Consideration of joinder of necessary parties under r 9.03(1) – Order made for proceeding to continue in the absence of the owners corporation to ensure just and efficient resolution of issues in dispute.
EXECUTION – Judgment debt for sum of money – Warrant of seizure and sale – Property available to meet judgment debt – ss 208 and 219 of the Property Law Act 1958 (Vic), s 42 of the Supreme Court Act 1986 (Vic) and s 23 of Sheriff Act 2009 (Vic) considered – Where judgment debtor is the sole beneficiary of real property under a will – Whether beneficiary’s rights under a will are available to meet judgment debt – Beneficiary only has an interest in real property upon the estate being administered – Judgment debtor’s right of due administration of deceased estate is not recoverable property.
ADMINISTRATION AND PROBATE – Factors to consider to determine when the administration of an estate is complete – Whether distribution required to complete administration – Consideration of Easterbrook v Young (1977) 136 CLR 208 – Where all debts of testator, testamentary and funeral expenses paid over 22 years ago – Where only estate asset remaining is real property – Where executor’s evidence that administration of the real property was completed in 2003 – Where executor is sole beneficiary of real property under will – Where executor claims administration is continuing to enable investigation of fraud on the deceased – Where Court has decided the administration of the estate is continuing – Consideration of Greater Geelong City Council v Giurina & Anor [2023] VSC 59, Giurina v Greater Geelong City Council [2023] VSCA 299, Ermanno Giurina v The Sheriff of the State of Victoria (Supreme Court of Victoria, S ECI 2024 00204, Forbes J, 26 February 2024) and Giurina v Sheriff (Vic) [2024] VSCA 112 – Where real property sold by Sheriff in execution of warrants for debts incurred by the executor - Whether proceeds of sale of real property are estate assets – Administration completed by Sheriff sale of property and execution of warrants for executor debts – Where executor made inconsistent claims in other legal proceedings as to the completion of the administration of the estate – Scope of Sheriff’s duties in Part IV of Sheriff Act 2009 (Vic).
EXECUTION – Jurisdiction to make declarations and orders for aid in enforcement of a warrant – Declaratory relief in aid of enforcement – Where relief will clarify competing arguments as to ownership of the asset – Where relief will clarify the Sheriff’s obligations on execution of a warrant – Where judgment debtor denies liability under the judgment – Where judgment outstanding for over five years – Scope of rr 66.11 and 66.15 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) – Discretionary factors in favour of the grant of relief.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | D Mence | Mills Oakley |
| The First Defendant in person | ||
| The Second Defendant in person |
TABLE OF CONTENTS
A.. Introduction
B.. Summary of decision
C.. What is the consequence of non-compliance with s 18(1) of the OC Act?
C.1 Is non-compliance a procedural irregularity, or is the proceeding a nullity?
C.1.1 Applicable principles
C.1.2 Consideration
C.2 How should the Court exercise its discretion?
C.3 Is the standing of the other plaintiffs affected?
D.. What property is available to meet the Costs Orders?
D.1 Terms of the Warrant
D.2 What property may the Sheriff seize and sell?
D.2.1 Property available to meet a judgment debt
D.2.2 Property that is not available to meet a judgment debt
D.3 Are a beneficiary’s rights to a deceased estate available to meet a judgment debt?
D.3.1 What is the nature of a beneficiary’s rights to a deceased estate?
D.3.2 Is the right to due administration available to meet a judgment debt?
D.3.3 Is property gifted under a will available to meet a judgment debt?
E... Has the Estate been administered?
E.1 When is an estate administered?
E.2 Evidence of administration of the Estate
E.2.1 The will and the Estate
E.2.2 Other proceedings concerning the Property and the Estate
E.2.3 Evidence of executorial duties
E.3 Consideration
E.3.1 Has the Court already determined this question?
E.3.2 Is the administration now complete?
E.3.3 Conclusion
F... Should the Court grant the relief sought?
F.1 Relief sought
F.2 Does the Court have jurisdiction to grant the relief sought?
F.2.1 Inherent jurisdiction to make orders in aid of enforcement
F.2.2 Declaratory relief
F.2.3Rule 66.11 of the Rules
F.2.4Rule 66.15 of the Rules
F.3 Should the Court grant the relief sought?
G.. Costs
H.. Orders
HER HONOUR:
A Introduction
This proceeding concerns the enforcement of costs orders made in favour of the plaintiffs against the second defendant, Mr Giurina on 30 July 2018 in S CI 2018 00168, which were taxed by the Costs Court on 6 December 2018 (‘Costs Orders’).[1] A warrant of seizure and sale in respect of the Costs Orders has been issued (‘Warrant’),[2] but the Sheriff has reported that a search of the Warrant address failed to locate any seizable goods of Mr Giurina.[3]
[1]Orders 4 and 5 of the Orders made in S CI 2018 00168 on 30 July 2018 by Ierodiaconou AsJ, set out at paragraph 54 below, and Costs Court Order dated 6 December 2018 in S ECI 2018 01147, pursuant to which the costs were taxed and allowed in the sum of $39,840.13 to be paid by Mr Giurina.
[2]Warrant of Seizure and Sale issued on 1 November 2023, Exhibit P-1 to Affidavit of Tara Leigh Plumbe filed on 28 November 2023, 1-2 (‘Warrant’). The terms of the Warrant are set out in Part D.1.
[3]Sheriff’s Office of Victoria Field Report dated 30 November 2023 in respect of warrant W23014885470, Exhibit P-2 to Affidavit of Tara Leigh Plumbe filed on 12 December 2023, 3-4 (‘Sheriff’s Field Report’).
The plaintiffs seek declarations and orders which will enable the Costs Orders to be executed as against the proceeds of the Sheriff’s sale of real property located at 120 Elizabeth Street, Geelong West VIC 3218 (‘Property’). However, the registered proprietor of the Property is not Mr Giurina. Accordingly, the Warrant is not able to be registered against the Property, and the plaintiffs are not in a position to execute the Costs Orders against the proceeds of sale of the Property absent the Court granting the relief they seek.
The registered proprietor of the Property is Carolina Nacinovich, who died on 10 February 2002.[4] The executor of the deceased’s estate (‘Estate’) is Mr Giurina, who obtained probate on 13 September 2002.[5] The Estate is the first defendant in this proceeding. Mr Giurina represented the Estate in person in this proceeding in his capacity as executor of the Estate.
[4]Death Certificate of Carolina Nacinovich dated 6 March 2002 (‘Death Certificate’), Exhibit CJ-1 to Affidavit of Callum Jubb filed on 23 August 2023, 3 (‘August 2023 Jubb Affidavit’).
[5]Order of the Registrar for Grant of Probate dated 13 September 2002 (‘Probate Grant’), Exhibit TP-3 to Affidavit of Tara Leigh Plumbe filed on 8 March 2024, 16 (‘March 2024 Plumbe Affidavit’).
It is not contested that Mr Giurina has inherited the Property under the deceased’s will. However, despite over 22 years passing since the grant of probate, title to the Property has not been transferred into his name.
At the time of the hearing of this proceeding, the Property was in the process of being sold by the Sheriff in execution of a warrant for seizure and sale issued at the request of the Greater Geelong City Council (‘Council’) for the purpose of enforcing costs orders made in the Council’s favour against Mr Giurina in his capacity as executor of the Estate.
Mr Giurina has lodged caveats and instituted various proceedings and applications seeking to stop the sale of the Property by the Sheriff. In each of these applications, Mr Giurina claimed that he owns the Property on the basis that the administration of the Estate has been finalised, and the Property is no longer an asset of the Estate.
None of Mr Giurina’s attempts to stop the sale of the Property have been successful at first instance or on appeal. The Court has declared that Mr Giurina, in his capacity as executor of the Estate, is the proprietor of the Property, and that the Property is affected by the Council’s costs orders and associated warrants.[6] The Court has made orders for the removal of caveats lodged by or on behalf of Mr Giurina claiming an interest in the Property, and ordered that no further caveats be lodged without leave of the Court.[7] Mr Giurina’s applications for leave to lodge caveats on the Property’s title have been refused.[8] Mr Giurina has sought injunctive relief against the Sheriff to prevent the seizure and sale of the Property, which was refused.[9] Neither of Mr Giurina’s appeals have been successful.[10]
[6]Orders of Matthews AsJ in Ermanno Giurina as Executor of the Estate of C Nacinovich v Greater Geelong City Council (Supreme Court of Victoria, S ECI 2019 04286, 24 May 2022) (‘Warrant Declarations’).
[7]Orders of Matthews AsJ in Greater Geelong City Council v Ermanno Giurina (Supreme Court of Victoria, S ECI 2022 03279, 9 March 2023) (‘Caveat Removal Order’); Greater Geelong City Council v Giurina & Anor [2023] VSC 59, (Matthews AsJ) (‘Caveat Removal Decision’), upheld on appeal in Giurina v Greater Geelong City Council [2023] VSCA 299 (Beach and McLeish JJA) (‘Matthews AsJ Appeal’).
[8]Giurina v Registrar of Titles [2023] VSC 784 (Barrett AsJ); Order of Forbes J in Ermanno Giurina v Registrar of Titles (Supreme Court of Victoria, S ECI 2024 00272, 26 February 2024) (‘Forbes J Order’), upheld on appeal in Giurina v Sheriff (Vic) [2024] VSCA 112 (Walker and Orr JJA) (‘Forbes J Appeal’). The Forbes J Appeal was handed down after the trial of this proceeding had concluded.
[9]Ibid Forbes J Order, upheld in Forbes J Appeal.
[10]Forbes J Appeal (n 8) and Matthews AsJ Appeal (n 7).
In each case, the Court refused the relief sought by Mr Giurina on the basis, inter alia, that the Property remains an asset of the Estate as Mr Giurina’s executorial duties in respect of the Property have not been completed, such that he, as the beneficiary of an unadministered estate, has no legal or equitable interest in the Property. The Court found that the Estate was not yet administered because the Council’s costs orders against Mr Giurina in his capacity as executor had not been paid, and the Property has not been transferred into his name.
The plaintiffs in this proceeding seek declarations that the proceeds of the Sheriff’s sale of the Property are the property of Mr Giurina, such that the Warrant may be executed against the proceeds. The plaintiffs argue that the Estate has been administered, or at least will be administered upon the sale of the Property by the Sheriff, such that Mr Giurina is entitled to the proceeds of sale absolutely.
Alternatively, the plaintiffs seek a declaration which permits the Warrant to be executed against the proceeds of sale even though they are property of the Estate. The plaintiffs submit that in the unique circumstances of this Estate and its administration, and Mr Giurina’s conduct, it is appropriate for the Court to make the alternative declaration to enable the plaintiffs to have the Costs Orders satisfied out of the proceeds of sale, even if those proceeds are the property of the Estate.
In addition, the plaintiffs seek an order pursuant to rr 66.11 or 66.15 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) to direct the Sheriff to pay the Costs Orders out of the proceeds of sale of the Property in execution of the Warrant.
Mr Giurina opposes the orders on two main grounds.
First, Mr Giurina argues that this proceeding should be summarily dismissed as a nullity by reason of the third plaintiff, Owners Corporation Plan No 1579 (‘OC’), failing to obtain a special resolution of its lot owners that authorised the commencement of this proceeding, as is required by s 18(1) of the Owners Corporations Act 2006 (Vic) (‘OC Act’). Mr Giurina submits that the standing of the first and second plaintiffs is contingent upon the OC’s compliance with s 18(1), and that therefore, the proceeding should be dismissed in its entirety.
Secondly, Mr Giurina claims that he does not have any legal or equitable interest in the proceeds of sale of the Property as the administration of the Estate has not been completed. Mr Giurina says that he only has a right to due administration of the Estate. Mr Giurina submits that the proceeds are the property of the Estate, and that the Warrant may not be executed against the proceeds of sale of the Property because the underlying Costs Orders are not against Mr Giurina in his capacity as executor of the Estate. Mr Giurina submits that the Court has determined that he does not have an interest in the proceeds by reference to the orders and declarations made in the other proceedings in this Court, which he submits finally determine this issue. Further, he says that the administration of the Estate is ongoing by reason of the need to investigate a suspected fraud on the deceased that may result in assets being recovered for the residuary beneficiaries.
The Court has had regard to the following documents:
(a)the affidavit evidence filed by the plaintiffs in this proceeding, namely the affidavit of Callum Jubb filed on 23 August 2023, the affidavits of Tara Plumbe filed on 28 November and 12 December 2023, 8 March and 27 March 2024;
(b)the affidavits filed by Mr Giurina in this proceeding on 11 July, 23 August, 25 September and 9 October 2023, and 10 and 20 March 2024;
(c)materials that were filed in proceeding S ECI 2024 00204 between Mr Giurina and the Sheriff and heard by Forbes J and tendered in this proceeding, namely a summons filed by Mr Giurina on 20 February 2024, Mr Giurina’s affidavit dated 16 February 2024, his written submissions dated 19 February 2024, the Sheriff of Victoria’s written submissions dated 22 February 2024, the transcript of the ruling of Forbes J delivered on 26 February 2024 (‘Forbes J Ruling’),[11] and the Order made by Forbes J on 26 February 2024 (‘Forbes J Order’);[12]
(d)a letter from the Sheriff of Victoria’s solicitor to the plaintiffs’ solicitors dated 25 March 2024;
(e)the Order of Registrar Burns dated 24 October 2013 in the Federal Court of Australia proceeding VID1020/2013 between Mr Giurina and the OC setting aside a bankruptcy notice;
(f)an Order made by Judicial Registrar Baker on 15 November 2023 in S ECI 2022 02430 between Mr Giurina as executor of the Estate and the Council;
(g)an application book index in Court of Appeal proceeding S EAPCI 2023 0035, between Mr Giurina, the Council and Registrar of Titles, being the appeal of the Order made by Matthews AsJ (as her Honour then was) on 9 March 2023 (‘Matthews AsJ Appeal’);[13] and
(h)the plaintiffs’ written submissions filed on 8 March and 20 March 2024 and Mr Giurina’s revised written submissions filed on 4 April 2024;[14] and further written submissions in response, also filed on 4 April 2024.
[11]Transcript of Proceedings, Ermanno Giurina v The Sheriff of the State of Victoria (Supreme Court of Victoria, S ECI 2024 00204, Forbes J, 26 February 2024) (‘Forbes J Ruling’).
[12]Forbes J Order (n 8).
[13]Caveat Removal Order and Matthews AsJ Appeal (n 7).
[14]These written submissions updated and replaced those filed by Mr Giurina on 18 March 2024.
B Summary of decision
This proceeding raises the following questions for determination by the Court.
First, the Court must address the consequences that arise from the OC failing to obtain a special resolution of its lot owners that authorised the commencement of this proceeding, as is required by s 18(1) of the OC Act. This requires consideration of whether non-compliance with s 18(1) makes this proceeding a nullity, such that it must be summarily dismissed. Alternatively, non-compliance may give rise to a procedural irregularity, such that the Court has a discretion as to how that irregularity might be addressed. If it is appropriate to dismiss the proceeding insofar as it is brought by the OC, the Court must then consider whether the OC’s failure to comply with s 18(1) affects the standing of the first plaintiff, Maria Deak and the second plaintiff, Strata Connect Pty Ltd (‘Strata Connect’) to commence this proceeding.
As addressed in Part C, following the decision of Burbank Australia Pty Ltd v Owners Corporation PS 447493 (‘Burbank’),[15] I have found that the OC’s non-compliance with s 18(1) of the OC Act gives rise to a procedural irregularity, such that the Court has a discretion to either summarily dismiss the proceeding, or alternatively, grant a temporary stay to allow the non-compliance to be rectified. In the circumstances of this case, where the OC has been on notice of the requirements of s 18(1) since the outset of the proceeding and have elected to not take steps to cure its non-compliance, I can see no justification for granting a temporary stay to allow the OC further time to seek an authorising resolution. Accordingly, I will summarily dismiss this proceeding insofar as it is brought by the OC. I do not accept Mr Giurina’s submission that the first and second plaintiffs only have standing to bring this action if a resolution is passed under s 18(1) of the OC Act. The Costs Orders are in favour of the three plaintiffs jointly, and the first and second plaintiffs bring this proceeding in their capacity as judgment creditors. To the extent that it is necessary for an order to be made under r 9.03(1) of the Rules for this proceeding to continue in the absence of the OC, I consider it appropriate to make such an order to ensure the just and efficient resolution of the real issues in dispute between the parties.
[15][2015] VSC 160 (McDonald J) (‘Burbank’).
Next, the Court must determine whether the Warrant may be executed against the proceeds of sale of the Property, either on the basis that the proceeds are Mr Giurina’s property (as per the primary declaration sought by the plaintiffs), or alternatively, that the Warrant may be executed against the proceeds as property of the Estate (as per the alternative declaration sought by the plaintiffs).
This requires considering the nature of the property available to meet a judgment debt, and whether this includes, as argued by the plaintiffs, a right to due administration of a deceased estate, or a judgment debtor’s interest in property they are due to receive from a deceased estate. This is addressed in Part D. The terms of the Warrant are set out in Part D.1. At common law, and pursuant to the Property Law Act 1958 (Vic) (‘Property Law Act’), any property in which a judgment debtor has a legal or equitable interest is available to meet a judgment debt (Part D.2). To the extent that the property is able to be seized and sold by the Sheriff, it is available for execution pursuant to a warrant of seizure and sale. In order for land to be seized and sold by the Sheriff, the warrant must specify the land, and the warrant must be registered against the title of the land (see Part D.2.1). Here the Warrant does not specify the Property, as its legal title is held in the name of the deceased. However, property of a judgment debtor that would not be divisible under a bankrupt’s creditors is not available to meet a judgment debt, and neither is property that they hold, but is owned by another person (see Part D.2.2). Accordingly, the proceeds of sale of the Property will only be available to meet the Costs Orders in execution of the Warrant if the proceeds belong to Mr Giurina either at law or in equity.
Any interest that Mr Giurina has in the proceeds of sale derives from his interest as beneficiary under the deceased’s will. In Part D.3, I address the circumstances in which a beneficiary’s rights to a deceased estate are available to meet a judgment debt. As addressed in Part D.3.1, a beneficiary of an unadministered estate does not have any legal or equitable interest in the estate’s assets. Rather, they have a right to compel the due administration of the estate. A beneficiary of a deceased estate will only acquire an interest in the estate assets upon completion of the administration of the estate. Where an executor has completed executorial tasks in respect of an estate asset, but has not distributed it to the beneficiary pursuant to the terms of the will, they will hold the asset as trustee for the benefit of the beneficiary, and the beneficiary will be the equitable owners of the asset.
I do not accept the plaintiff’s contention that a judgment debtor’s right to due administration of a deceased estate is available to be seized and sold by the Sheriff in execution of a warrant. This is because the enforcement of such a right requires the commencement of litigation to enforce the right of due administration, and the Sheriff Act 2009 (Vic) (‘Sheriff Act’) does not give the Sheriff power to commence litigation to recover property of a judgment debtor in execution of a warrant of seizure and sale (Part D.3.2). I also do not accept that the judgment debtor’s interest in real property due to them from a deceased estate is available to meet a judgment debt, unless the estate has been administered, such that the beneficiary has an equitable interest in the land (Part D.3.3).
Accordingly, in order to determine whether the proceeds of sale of the Property are Mr Giurina’s and available to be seized and sold by the Sheriff turns on whether the Estate has been administered. This is addressed in Part E.
In Part E.1, I consider the authorities that address when an estate has been administered. Whether an estate has been administered is a question of fact to be determined in all the circumstances, and is considered on an asset-by-asset basis. In Part E.2, the evidence of the Estate’s administration is summarised by reference to the terms of the will, the evidence filed in support of the application for probate, the Court’s findings in proceedings concerning the Property, and the evidence of the executorial duties undertaken by Mr Giurina. In Part E.3, I address whether the administration of the Estate has been completed.
As discussed in Part E.3.1, I do not accept Mr Giurina’s submission that the question of whether the Estate remains under administration has already been determined by the Court. Whether an estate has been administered is a question of fact, and since those decisions have been handed down, the Sheriff has sold the Property and will soon distribute the proceeds of that sale, inter alia, to meet the debts incurred by Mr Giurina in his capacity as executor.[16] Further, since the Property has been sold, formal transfer of its legal title under the Transfer of Land Act 1958 (Vic) (‘Transfer of Land Act’) is no longer required in order to effect its distribution to Mr Giurina. These factual matters must now be taken into account in determining whether the Estate has been administered.
[16]Affidavit of Julia Racheha filed 21 August 2024, [5], which was filed after the trial had concluded (‘Racheha Affidavit’).
I have found that upon the Sheriff conducting a sale of the Property and executing the warrants delivered to the Sheriff, which are in respect of debts owed by Mr Giurina in his capacity as executor, the administration of the Estate will have been completed. This is because the evidence from Mr Giurina demonstrates that at that point, all executorial duties with respect to the Estate will have been completed. I do not accept that the administration of the Estate remains ongoing by reason of the asserted need to investigate a suspected fraud upon the deceased. Nothing has been done to pursue this suspected fraud in 22 years, and the need for investigation rises no higher than an unsubstantiated assertion by Mr Giurina. Regardless, even if the administration continues for the purpose of investigating this fraud, it does not affect the administration of the Property, which will be complete upon the proceeds of its sale being paid to Mr Giurina by the Sheriff.
For the reasons outlined in Part F, I consider that the Court has jurisdiction to grant the relief sought by the plaintiffs subject to certain amendments. The relief will provide the Sheriff with appropriate guidance in light of the parties’ competing arguments as to the ownership of the proceeds of sale of the Property. Further, despite the Costs Orders being regular and perfected, Mr Giurina does not consider that he is liable to comply with them. Accordingly, absent the Court granting the relief sought, it is highly unlikely that Mr Giurina will pay the judgment sum to the plaintiffs.
There are a range of matters regarding the manner in which this proceeding has been conducted which will be relevant to the question of whether the plaintiffs are entitled to all of their costs. These are summarised in Part G. I have summarised the orders that I will make, including directions as to any further submissions on the form of orders and costs in Part H.
C What is the consequence of non-compliance with s 18(1) of the OC Act?
Section 18(1) of the OC Act provides that an owners corporation must not commence any legal proceeding unless it is authorised by special resolution to do so.
It is not in dispute that s 18(1) has not been complied with. Throughout the proceeding, and up until the last day of trial, the plaintiffs argued that it was not necessary for the OC to comply with s 18.[17] However, on the last day of trial, the plaintiffs’ counsel accepted that s 18 did apply, and that a special resolution would need to be passed in order for the OC to continue to be a party of this proceeding.[18]
[17]The plaintiffs argued there were two reasons for this. First, it was argued that s 18(1) of the Owners Corporations Act 2006 (Vic) had no application as this proceeding concerns the enforcement of a costs order made in proceedings to which the Owners Corporation Plan No 1579 (‘OC’) was a respondent, and secondly, because this proceeding was commenced by the plaintiffs’ insurer in the name of the OC pursuant to a right of subrogation.
[18]Transcript of Proceeding, hearing on 10 May 2024, T447, T505 (‘May 2024 Transcript’).
Thus, the remaining dispute between the parties concerns the appropriate consequence of the OC’s failure to obtain a special resolution authorising this proceeding. Mr Giurina submits that the proceeding is a nullity and the Court must dismiss the proceeding as an abuse of process. The plaintiffs submit that non-compliance gives rise to a procedural irregularity, which ought to be resolved by the Court granting a temporary stay so as to allow the OC an opportunity to pass the s 18(1) resolution ratifying the commencement of this proceeding.
C.1 Is non-compliance a procedural irregularity, or is the proceeding a nullity?
C.1.1 Applicable principles
In 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No. 73943 (‘2 Elizabeth Bay Road’)[19] the New South Wales Court of Appeal considered the consequences of non-compliance with s 80D of the Strata Schemes Management Act 1996 (NSW), which is similar in form to s 18(1) of the OC Act. The Court of Appeal found that failure to obtain a special resolution authorising the proceeding did not render the proceeding a nullity, but rather led to the Court considering whether to exercise its discretion to stay or summarily dismiss the proceeding.[20] The Court of Appeal found that an owners corporation may ratify the commencement of proceedings by passing a special resolution after the proceedings have been commenced.[21] Relevant factors to the exercise of that discretion include (a) whether the non-compliance has been cured, (b) if it has not been cured, whether it will be cured reasonably promptly, and (c) whether non-compliance is inadvertent or deliberate.[22] In that case, the non-compliance had been promptly cured, and the Court of Appeal refused to dismiss the proceeding.[23]
[19](2014) 88 NSWLR 488.
[20]Ibid 490-491 [1]-[8] (Basten JA), 499-501 [44]–[52] (Barrett JA), 507-511 [89]–[107] (Leeming JA, with whom Basten JA agreed).
[21]Ibid 501-502 [54]–[59], 503 [65] (Barrett JA); 511-512 [106]–[109] (Leeming JA, with whom Basten JA agreed).
[22]Ibid 511 [107] (Leeming JA).
[23]Ibid 511-512 [108] (Leeming JA, with whom Basten JA agreed).
In Burbank, the Court accepted that the reasoning in 2 Elizabeth Bay Road applied with equal force in circumstances where there has been non-compliance with s 18 of the OC Act.[24] McDonald J found that non-compliance with s 18 did not render the proceeding invalid or a nullity, but rather constituted a procedural irregularity which could be cured by ratification by the owners corporation passing a subsequent special resolution.[25] In Burbank, there was evidence that the owners corporation had attempted to pass a special resolution, but in doing so, it had not complied with the necessary statutory requirements. The Court concluded that the appropriate course of action was to stay the proceeding until such time as the owners corporation was authorised by special resolution to bring the proceeding.[26]
[24]Burbank (n 15) [41] (McDonald J).
[25]Ibid [35]–[43].
[26]Ibid [42].
In Owners Corporation PS341151A v Gilmore (‘Gilmore’),[27] the Victorian Civil and Administrative Tribunal summarily dismissed proceedings brought by an owners corporation, as the owners corporation had not passed a valid ordinary resolution authorising the proceeding, as was required under s 18(2) of the OC Act. Section 18(2) provides that an owners corporations requires an ordinary resolution to commence proceedings within the jurisdictional limit of the Magistrates’ Court.
[27][2022] VCAT 1203 (Member D Kim) (‘Gilmore’).
The Tribunal concluded that the owners corporation would not be able to resolve the non-compliance with s 18(2) through subsequent ratification, saying:
The language of s 18 of the OC Act is clear – the authorisation by way of ordinary resolution must be obtained prior to the proceeding being issued.[28]
[28]Ibid [77(f)].
The Tribunal summarily dismissed the proceeding on the basis that it was an abuse of process because the owners corporation lacked standing.[29] However, the Tribunal noted that this dismissal would not prevent the owners corporation commencing fresh proceedings once an ordinary resolution had been passed.[30]
[29]Ibid [77(g)]–[78].
[30]Ibid [78].
C.1.2 Consideration
Mr Giurina submits that in light of amendments to s 18 of the OC Act that came into force in 2021, Burbank is no longer good law. Mr Giurina submits that for the reasons set out in Gilmore, which considers s 18 as amended, the Court has no discretion to stay the proceeding, but rather, the proceeding must be dismissed. Further, Mr Giurina submits that 2 Elizabeth Bay Road should not be followed given the differences in the statutory language used in the New South Wales Act.
I do not accept Mr Giurina’s contention that Burbank is no longer good law. Whilst s 18 was amended in 2021,[31] the changes to s 18(1) were minimal, as shown in the following mark up:
[31]Owners Corporations and Other Acts Amendment Act 2021 (Vic), s 9, which commenced on 1 December 2021.
18 Power to bring legal proceedings
(1) Subject to subsection (2), an owners corporation must not commence any
bringlegal proceedings unless it is authorised by special resolution to do so.More substantive changes were made to s 18(2) which addresses the types of legal proceedings which require authorisation by way of an ordinary resolution of an owners corporation. Sub-section (2) is not relevant to this proceeding.
I disagree that replacing the word “bring” with “commence any” gives rise to any relevant change to the legislative intention that warrants departure from Burbank. The phrase “bring” and “commence any” are analogous. The explanatory memorandum provides no explanation for why this change of words was employed.[32]
[32]Explanatory Memorandum, Owners Corporations and Other Acts Amendment Bill 2019 (Vic), 5, cl 9.
Insofar as the Tribunal in Gilmore found that a failure to comply with s 18 is not capable of subsequent ratification, in my view, it was wrongly decided. In this regard, I note that the Tribunal in Gilmore did not consider Burbank, other than to note that that it was decided prior to the 2021 amendment to s 18.[33] It does not appear that the Tribunal was referred to 2 Elizabeth Bay Road.
[33]Gilmore (n 27) [23(a)].
I accept Mr Giurina’s submission that the NSW provision considered in 2 Elizabeth Bay Road differs from that in s 18 of the OC Act. However, I do not consider that the variances between the two provisions makes any difference. Both provisions provide for a mandatory requirement of obtaining approval of the owners corporation prior to the commencement of proceedings. Section 80D of the Strata Schemes Management Act 1996 (NSW) provides that the owners corporation ‘must not…initiate legal action, for which any payment may be required unless a resolution is passed at a general meeting of the owners corporation approving the…taking of that action’ (emphasis added). This is no different in effect to s 18(1) of the OC Act, which provides that the owners corporation ‘must not commence any legal proceeding unless it is authorised by special resolution to do so’.
Given that Burbank is binding upon me, it is not necessary for me to express a view as to the correctness of the decision. However, for what it is worth, in my view, the Court in Burbank was correct to conclude that ‘the reasoning of the New South Wales Court of Appeal in 2 Elizabeth Bay Road applied with equal force in circumstances where there has been non-compliance with s 18 of the [OC Act]’.[34]Further, the reasoning equally applies to the 2021 amendments to s 18(1).
[34]Burbank (n 15) [41].
For these reasons, there is no basis for me to diverge from the conclusion reached in Burbank that a failure to comply with s 18(1) gives rise to a procedural irregularity, in respect of which the Court has a discretion as to how best to address in accordance with the principles which apply to summary dismissals or stays of proceedings.
C.2 How should the Court exercise its discretion?
For the reasons that follow, it is appropriate to summarily dismiss the proceeding insofar as it is brought by the OC.
The plaintiffs have been put on notice since at least 23 August 2023 as to Mr Giurina’s argument that this proceeding ought to be dismissed for suspected non-compliance with s 18 of the OC Act.[35] The opportunity for any procedural irregularity to be cured was expressly noted in the ruling that I delivered on 15 December 2023 in respect of the defendants’ summons for summary judgment.[36]
[35]The argument was first raised in the Supplementary Affidavit of Ermanno Giurina filed on 23 August 2023, [3] (‘August 2023 Giurina Affidavit’). See also supplementary submissions of Ermanno Giurina filed on 25 September 2023, [20]–[25].
[36]Transcript of Ruling, hearing on 15 December 2023, T54:19-T55:23.
The plaintiffs submitted that the OC has attempted to obtain a special resolution, but it was not achieved in time.[37] Counsel submitted that he expected that the resolution will be passed in the fullness of time. [38] However, there is no evidence that the OC has made any attempt to obtain a special resolution authorising this proceeding. Given that up until the last day of trial the plaintiffs argued that it was not necessary for the OC to comply with s 18 of the OC Act, I infer that any attempts to obtain a special resolution were only made very recently.
[37]May 2024 Transcript (n 18) T445:6-8.
[38]Ibid, T445:10-11.
The plaintiffs have had substantial notice of the requirements under s 18, and it has made no attempt to cure the breach. It therefore appears that the OC has made a deliberate decision not to cure its non-compliance with s 18. Given this, I can see no justification for granting a temporary stay for the purpose of giving the OC further time in which to obtain a special resolution.
C.3 Is the standing of the other plaintiffs affected?
Mr Giurina submits that the OC’s failure to comply with s 18 of the OC Act impacts upon the standing of Ms Deak and Strata Connect to bring this proceeding. Mr Giurina argues that Ms Deak and Strata Connect rely upon the OC’s authority to commence this proceeding, such that if the proceeding by the OC is dismissed, the claims brought by Ms Deak and Strata Connect should also be dismissed.
As I understand this argument, Mr Giurina submits that Strata Connect, as the manager of the OC, does not have the power to commence proceedings absent a special resolution passed under s 18 of the OC Act. In support of his argument, Mr Giurina relies upon s 11(3)(a) of the OC Act, which provides that an owners corporation must not delegate a power or function that requires a special resolution at a general meeting. He also relies upon what he believes are the terms of Strata Connect’s contract with the OC.[39] Clause 3.2 of this contract addresses the delegation by the OC and the committee to Strata Connect of all the powers and functions of the OC that are necessary for Strata Connect to perform its duties.[40] The delegation expressly includes the power to sign documents on behalf of the OC, other than documents requiring a unanimous resolution, special resolution or the seal of the Owners Corporation.[41]
[39]Contract of Appointment Owners Corporation Manager dated on 1 February 2017 (‘OC Contract’), Exhibit EG- 1 to Affidavit of Ermanno Giurina filed on 25 September 2023, 1-16 (‘September 2023 Giurina Affidavit’). Mr Giurina deposes that he believes the current contract between the OC and Strata Connect Pty Ltd (‘Strata Connect’) is in the same form, see September 2023 Giurina Affidavit (n 39) [10]-[12].
[40]OC Contract (n 39) 6.
[41]Ibid.
Mr Giurina submits that as Ms Deak is Strata Connect’s director, she will only have the power to commence this proceeding if the OC and Strata Connect are also so empowered.
I do not accept Mr Giurina’s submissions that s 11(3)(a) of the OC Act, or cl 3.2 of the management contract, restrict Strata Connect and Ms Deak’s ability to bring this proceeding.
This is because Strata Connect and Ms Deak do not bring this proceeding on behalf of the OC, or in the name of the OC. They are not purporting to exercise a power or function of the OC which requires a special resolution under the OC Act or under the management contract. Rather, Strata Connect and Ms Deak bring this proceeding in their capacity as judgment creditors pursuant to the Costs Orders.
The terms of the Costs Orders are:
4.The applicant pay the respondents’ costs of its application made by summons filed on 13 March 2018 and the respondents’ costs of the applicant’s application made by summons filed on 19 April 2018 on an indemnity basis.
5.The applicant otherwise pay the costs of the proceeding, including any reserved costs, on an indemnity basis. The costs order made on 2 July 2018 is an exception to this order.[42]
[42]Order of Ierodiaconou AsJ in Ermanno Giurina v Mara Deak & Ors (Supreme Court of Victoria, S CI 2018 00168, 30 July 2018).
The applicant in those proceedings was Mr Giurina, and the respondents were Ms Deak, Strata Connect and the OC. The Costs Orders are in favour of Ms Deak, Strata Connect and the OC jointly as the respondents to the proceeding.
The plaintiffs’ counsel submitted that Ms Deak and Strata Connect have the right to recover the Costs Orders, and the relief can be granted to those plaintiffs with or without the OC remaining as a party. This submission was made without reference to authority.
Contrary to the plaintiffs’ submission, it is arguable that the rights of the judgment creditors sought to be exercised in this proceeding ought to be exercised jointly.[43] That is, it may be arguable that given the Costs Orders were made jointly in favour of Ms Deak, Strata Connect and the OC, all three of them must be party to this proceeding.
[43]See, for example, Australian Workers Union v Bowen (1946) 72 CLR 575 where the High Court upheld a decision to dismiss a bankruptcy petition because it was based upon a bankruptcy notice issued by some but not all of the joint judgment creditors.
Rule 9.03(1) of the Rules provides for this as the default position. It states:
Joinder of necessary parties
(1) Except by order of the Court or as provided by or under any Act, where the plaintiff claims any relief to which any other person is entitled jointly with the plaintiff—
(a) all persons so entitled shall be parties to the proceeding; and
(b) any person who does not consent to being joined as a plaintiff shall be made a defendant.
No submissions were made by the parties as to whether it was necessary for the OC to remain a party to this proceeding by reason of the Costs Orders being made in favour of the plaintiffs jointly.
To the extent it is necessary for an order to be made under r 9.03(1) for this proceeding to continue in the absence of the OC, I consider it is appropriate to make such an order. This is because the Warrant has been issued by the plaintiffs jointly, and the Warrant is the process by which the joint judgment is sought to be enforced.[44] There is no requirement in s 18 of the OC Act for a special resolution authorising the OC to issue the Warrant. The Warrant is a process of the Court, but it is not a proceeding.[45] This proceeding seeks orders to aid enforcement of the Costs Orders via the Warrant. Accordingly, given that the OC issued the Warrant as a joint creditor, this is not a case where it would be appropriate for the OC to be joined as a defendant to the proceeding as contemplated by r 9.03(1)(b) of the Rules. The dismissal of this proceeding insofar as it is brought by the OC is the consequence of its failure to comply with s 18 of the OC Act, which gave rise to a procedural irregularity. Whilst the OC’s failure to comply with s 18 may found grounds for refusing to allow the proceeding to continue in its absence, in my view, this would not promote the overarching purpose that the Court is required to give effect to under s 8 of the Civil Procedure Act 2010 (Vic) (‘Civil Procedure Act’). Such an outcome would not promote the just, efficient, timely and cost-effective resolution of the real issues in dispute in this proceeding. The absence or presence of the OC as a party to this proceeding is not germane to the real issues in dispute. Rather the real issues in dispute are whether Mr Giurina has an interest in the proceeds of sale of the Property, and if so, whether it is appropriate to grant the relief sought by the plaintiffs. It is appropriate for those issues to be determined without further cost and delay.
D What property is available to meet the Costs Orders?
[44]The Warrant (n 2) states that it was ‘issued at the request of the defendants’, being Ms Deak, Strata Connect and the OC.
[45]See for example, the definition of ‘proceeding’, r 1.13 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) to mean any matter commenced by writ or originating motion (‘Rules’).
D.1 Terms of the Warrant
The Warrant instructs the Sheriff to levy on the property of Mr Giurina which is authorised by law to be taken in execution. The Warrant says:
To the Sheriff
In respect of the judgment (or order) made by Gourlay JR on 6 December 2018 (pursuant to the orders made by Ierodiaconou AsJ on 30 July 2018) by which it was adjudged (or ordered) that Ermanno Giurina pay $39,840.13 to the Defendant, Levy on the property of Ermanno Giurina which is authorised by law to be taken in execution of the sum of –
(a)$39,840.13, being the amount now due and payable for which judgment was entered or giving.
(b)$1,492.90 being the amount now due and payable in respect of professional costs and fees.
(c)$19,538.04, being the amount due and payable for interest accrued in the [sic] respect of the judgment amount and the amount of costs at the date of the issue of the warrant, at the rate fixed in accordance with law.
(e) your fees and expenses for this (and for any prior) warrant.
And Pay the amount so levied other than your fees and expenses to the Defendants or otherwise as the law requires…[46]
[46]Warrant (n 2).
The plaintiffs attempted to have a warrant issued in respect of the Costs Orders that included a statement that the Property is affected by the warrant. That warrant was rejected by the Court’s registry, as Mr Giurina is not the registered proprietor of the Property.[47] The consequence of this is that the Warrant may not bind or affect the Property, and therefore the Property is not able to be sold pursuant to the Warrant.[48]
[47]March 2024 Plumbe Affidavit (n 5) [8].
[48]Transfer of Land Act 1958 (Vic) s 52. See paragraph 69 below.
In order to determine whether the proceeds of sale of the Property are available to meet the Costs Orders in execution of the Warrant, it is necessary to consider the law relating to the property that may be seized and sold by the Sheriff in execution of the Warrant, which I address in Part D.2.
As any interest Mr Giurina may have in the proceeds of sale of the Property arises pursuant to the deceased’s will, I address the circumstances in which a beneficiary’s rights in a deceased estate are available to meet a judgment debt in Part D.3.
D.2 What property may the Sheriff seize and sell?
Pursuant to s 23 of the Sheriff Act, the Sheriff has the power to seize or take possession of ‘recoverable property’ of the judgment debtor regardless of who has possession of it, in accordance with the relevant court and enforcement legislation or a warrant that authorises seizure of the property.[49] ‘Recoverable property’ is defined to mean property specified in a warrant that may be lawfully seized under the warrant.[50] The Sheriff has the power to sell or otherwise deal with seized property for the purpose of applying the proceeds of sale to the payment of a ‘payable amount’.[51] Relevantly, ‘payable amount’ is defined to mean the amount specified in a warrant of seizure and sale as being required to be paid by the person named or described in the warrant.[52]
[49]Sheriff Act 2009 (Vic) ss 23 (‘Sheriff Act’).
[50]Ibid s 3.
[51]Ibid s 24.
[52]Ibid s 3, definition of ‘payable amount’ which incorporates the definition of a ‘money warrant’, which is defined to include a ‘civil warrant’, which in turn is defined to include a warrant of seizure and sale directed to the sheriff.
As neatly summarised in Zuckerman on Australian Civil Procedure:
The property which may be seized by the sheriff must be owned (either wholly or jointly) by the judgment debtor. Such property may include money and property in which the judgment debtor has an equitable interest.[53]
[53]Adrian A S Zuckerman et al, Zuckerman on Australian Civil Procedure (LexisNexis, 2nd ed, 2024) [24.32] (‘Zuckerman’).
The common law, together with ss 208 and 219 of the Property Law Act , and s 42 of the Supreme Court Act 1986 (Vic) (‘Supreme Court Act’) govern the property of the judgment debtor that is available to be seized and sold by the Sheriff.
D.2.1 Property available to meet a judgment debt
The following property is available to meet a judgment debt:
(a)at common law, all goods and chattels belonging to the judgment debtor that are capable of sale;[54]
(b)pursuant to s 208(1) of the Property Law Act, all land, or interest in land belonging to the judgment debtor, including an equity of redemption, and powers vested in the judgment debtor in respect of their interest in the land. This provision has been described as applying to ‘every possible estate and interest in land of every possible description’,[55] and it extends to equitable interests in land;[56] and
(c)pursuant to s 219 of the Property Law Act, all money, bank notes, cheques, bills of exchange, promissory notes, bonds, specialities or other securities for money belonging to the judgement debtor.
[54]David L Bailey, Daniel D Nguyen and Nicolas C Dour, LexisNexis, Civil Procedure Victoria, vol 1 (at Service 338) [69.01.10] (‘Civil Procedure Victoria’); Pyke v Duncan [1989] VR 149.
[55]Stanley Robinson, The Property Law Act Victoria (The Law Book Company Limited, 1992), 453. See also the Victorian Law Reform Commission, Review of the Property Law Act 1958 (Final Report No 20, 30 September 2010), 98 [6.134]–[6.135] (‘VLRC Property Law Act Review’).
[56]Trustees Executors and Agency Co Limited v Butler [1905] VLR 650, 667A (Beckett J, with whom Madden CJ agreed), (‘Butler’). Butler considered s 125 of the Real Property Act 1890 (Vic), which is the predecessor to s 208(1) of the Property Law Act 1958 (Vic) (‘Property Law Act’) and is in almost identical language. See also Re Cox; Perpetual Trustee Co Ltd v Cox (1903) 3 SR (NSW) 356, 362 (Simpson CJ) (‘Re Cox’), citing Evans v Stephen (1882) 3 NSWR 154. The plaintiffs’ counsel also relied upon Simpson v Forrester (1973) 132 CLR 499 to the effect that at common law a writ of fieri facias attaches to equitable interests in land. This case confirms that the Queensland sheriff may sell an equity of redemption in execution of a writ of fieri facias at common law. However, s 208(1) of the Property Law Act extends to equitable interests in land, and expressly provides that an equity of redemption is liable to satisfy debts.
Where the property of the judgment debtor includes real property, the Property Law Act, Transfer of Land Act, and the Rules provide a regime by which that property may be seized and sold. In order for land to be subject to execution under a warrant of seizure and sale, the warrant must specify the land, and the warrant must be registered against the title of the land.[57] Where the Prothonotary is satisfied that the judgment debtor is the registered proprietor of land, a warrant of seizure and sale will include a statement to the effect that the land is affected by the warrant.[58]
[57]Property Law Act (n 56) s 209; Transfer of Land Act 1958 (Vic) s 52(2). See also Property Law Act s 208(2), which gives the sheriff the power to seize and take possession of land held on trust for the judgment debtor where the warrant specifies that land. See also the VLRC Property Law Act Review (n 55), 99 [6.139]–[6.144].
[58]Rules (n 45) r 68.04(3.1).
The Rules do not provide for a procedure for specifying land in which the judgment debtor has an interest other than that of a registered proprietor, such as an equitable interest. To address this, the Court may grant declaratory relief to clarify that the land is affected by a warrant,[59] or may appoint a receiver to assist in the enforcement of a judgment over the equitable interest.[60] Where there is evidence that the judgment debtor may have an equitable interest in land, but there is some doubt, the Court may appoint a receiver over the judgment debtor’s equitable interest in the land so that the receiver has standing to apply for a declaration that the judgment debtor has an interest in the land.[61]
[59]See for example, Warrant Declarations [made by Matthews AsJ] (n 6).
[60]Caird Seven Pty Ltd v Attia and Shopsmart Pharmacy Franchising Pty Ltd (No 3) (2016) 92 NSWLR 457, 462 [16], (Emmett AJA), most recently cited in Jaken Properties Australia Pty Ltd v Naaman (2023) 112 NSWLR 318, 351 [120] (Leeming JA).
[61]See Mosman v Sachs [1885] 2 QLJ 57 (Lilley CJ).
D.2.2 Property that is not available to meet a judgment debt
The following property is not available to meet a judgment debt:
(a)property that the judgment debtor holds, but is owned by another person. For example, property held by the judgment debtor as trustee of a trust, or of which the judgment debtor is bailee, or goods which have been sold to a third party and the like. Such property will not belong the judgment debtor, and accordingly, the Sheriff is not empowered under a warrant to seize and sell it;[62] and
(b)pursuant to s 42 of the Supreme Court Act, property that would not be divisible amongst a bankrupt’s creditors is excluded from being available to satisfy a judgment debt. That is, certain prescribed household property, property used for earning income by personal exertion, and primary means of transport are not available to satisfy a judgment debt.[63]
[62]Civil Procedure Victoria (n 54) [69.01.85] and the authorities cited therein.
[63]Supreme Court Act 1986 (Vic) s 42 and Bankruptcy Act 1966 (Cth) ss 116(2)(b)(c), (ca).
Mr Giurina argues that the Warrant may not be executed against the Estate’s land because the Costs Orders were not made against the Estate, and the Estate was not a party to the proceeding in which the Costs Orders were made. Mr Giurina argues that in order for the Warrant to be executed against the proceeds of the Property, the Court would need to re-open the Costs Orders and make them against the Estate. I disagree. The relevant enquiry is not to ensure the judgment debtor and the legal title holder are one in the same. Rather, the question is whether the judgment debtor has an interest in the land within the broad definition provided in s 208 of the Property Law Act, no matter who holds the legal title. Consistent with this, s 23 of the Sheriff Act expressly provides that recoverable property includes property of the judgment debtor ‘regardless of who has possession of it’.
D.3 Are a beneficiary’s rights to a deceased estate available to meet a judgment debt?
D.3.1 What is the nature of a beneficiary’s rights to a deceased estate?
As Mr Giurina’s rights to the Property or the proceeds of its sale derive from his entitlements under the deceased’s will, it is necessary to first consider the nature of a beneficiary’s rights under a will.
The relevant principles were not in dispute. A beneficiary of an unadministered estate does not have any legal or equitable interest in the estate’s assets. Rather they have a right to have the estate duly administered, and an expectation that the bequeathed assets will pass to them upon completion of the administration, subject to the assets being realized to meet any outstanding liabilities of the estate and to defray the cost of administration.[64]
[64]Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12; [1965] AC 694; Official Receiver in Bankruptcy v Schutlz (1990) 170 CLR 306, 312 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ) (‘Schultz’).
Administration of an estate is the performance by the executor of their role to execute the instructions of the testator as to the disposition of their estate. This limited function comes to an end vis-à-vis each asset of the estate, once that asset has been administered in accordance with the testator’s directions.[65] The end of executorial duties is ordinarily evidenced by the assent (which may be express or implied) or distribution of the estate to the beneficiaries, at which time a beneficiary’s interest in the estate assets is vested.[66]
[65]G E Dal Pont, Law of Executors and Administrators (LexisNexis, 2022) [3.2] (‘Law of Executors and Administrators’).
[66]Ibid [3.6], citing Pagels v MacDonald (1936) 54 CLR 519 (‘Pagels’) at 526 (Latham CJ) and Probert v Commissioner of State Taxation (1998) 72 SASR 48 at 53 (Olsson J).
Upon completion of the administration of an estate, the beneficiary acquires an equitable interest in the assets due to them under a will, rather than a mere chose in action against the executors to ensure the due administration of the estate.[67] In Jacobs’ Law of Trusts in Australia, the learned authors summarise the position as follows:
An executor who has performed all executorial functions may become a trustee by merely continuing to hold property. When the executor becomes a trustee of ascertained property, the beneficiaries then become owners of equitable interests in that property.[68]
[67]G E Dal Pont, Law of Succession (LexisNexis, 3rd ed, 2021) 324-325 [10.43] (‘Law of Succession’).
[68]J D Heydon and M J Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis, 8th ed, 2016) 29-30 [2.40] (‘Jacobs’ Law of Trusts’), citing Pagels (n 66) at 526; Martin v Martin (1903) 3 SR (NSW) 156 (Simpson CJ in Eq); Attenborough v Solomon [1913] AC 76, 83 (‘Solomon’); In the Estate of Just (deceased) (No 2) (1974) SASR 515,523 (Jacobs J); Sullivan v Brett [1981] 2 NZLR 202,207 (Somers J, with whom McMullin and Barker JJ agreed) (‘Sullivan’).
I address the authorities that consider when the administration of an estate will be complete in Part E.1 below.
D.3.2 Is the right to due administration available to meet a judgment debt?
The right of a beneficiary under a will to due administration of the deceased estate vests in their bankruptcy trustee, together with any fruits that may fall to the bankrupt as a consequence of due administration.[69] The plaintiffs submitted, without reference to authority, that the converse of s 42 of the Supreme Court Act applies, such that all property that is divisible amongst a bankrupt’s creditors is available to be seized and sold to satisfy a judgment debt, and that therefore, a beneficiary’s right to due administration of an estate is an asset available to the Sheriff under a warrant for seizure and sale.[70]
[69]Schultz (n 64) 314 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ).
[70]Transcript of Proceeding, hearing on 27 March 2024, T147:20-25 (‘March 2024 Transcript’).
I accept that the intention of s 42 of the Supreme Court Act is to ensure consistency between the assets available to a bankrupt’s creditors and those available to judgment creditors. This is supported by:
(a)the second reading speech when the provision was first enacted as s 63C of the Supreme Court Act 1958 (Vic), where it was said that the purpose of the provision was to provide consistency between the assets available to judgment creditors and those available to the creditors of a bankrupt; [71] and
(b)the explanatory memorandum for the Supreme Court Act, which states that s 42 ‘provides that only property divisible among creditors in bankruptcy may be seized to satisfy a judgment’.[72]
[71]Victoria, Parliamentary Debates, Legislative Assembly, 1 May 1984, 4165.
[72]Explanatory Memorandum, Supreme Court Bill 1986 (Vic) cl 42.
However, in my view, this is subject to the assets being ‘recoverable property’ that the Sheriff has power to seize or take possession, as provided for in s 23 of the Sheriff Act. For the reasons that follow, I do not accept that a beneficiary’s right to due administration of an estate is recoverable property that may be lawfully seized under a warrant of seizure and sale.
A person’s right to due administration of a deceased estate is a chose in action. The exercise of a beneficiary’s chose in action involves commencing proceedings against an executor to enforce the due administration of the estate. Even if that litigation is successful, it may not result in the judgment debtor obtaining title to any real or personal property gifted to them under the will. This is because due administration may see the entire estate being used to meet a testator’s debts or the costs of administration.[73]
[73]Law of Executors and Administrators (n 65) 69 [3.6].
The Sheriff Act does not give the Sheriff the power to commence litigation to recover property of a judgment debtor when executing a warrant of seizure and sale, and the plaintiffs did not take me to any authority which supports the proposition that the Sheriff has that power. Rather, the powers of the Sheriff are all aligned with the power to seize and take possession of recoverable property, such as the power to enter and search premises for recoverable property, the power to take possession of real property, and the power to seize, sell and otherwise deal with recoverable property.[74] Consistent with this, the Court has expressed doubt as to whether a sheriff may seize and sell a judgment debtor’s right, title and interest in an action to satisfy an execution.[75]
[74]Sheriff Act (n 49) ss 19, 20, 21, 23, and 24.
[75]Evans v Crosby (1893) 5 QLJ 95 (Griffiths CJ).
I therefore do not accept that a judgment debtor’s right of due administration of a deceased estate is recoverable property against which the Sheriff may execute a warrant of seizure and sale. It may be that a court could appoint a receiver over a judgment debtor’s chose in action for due administration of an estate, and property that the judgment debtor receives thereafter, as a form of equitable execution.[76] However, as this is not the relief sought by the plaintiffs in this proceeding, it is not necessary for me to consider this issue further.
[76]See for example, Zuckerman (n 53) 1063 [24.67]–[24.68].
D.3.3 Is property gifted under a will available to meet a judgment debt?
The plaintiffs submit that the Sheriff can sell the judgment debtor’s interest in real estate gifted under a will in execution of a warrant of seizure and sale. In support of this argument, the plaintiffs rely upon Re Cox; Perpetual Trustee Co Ltd v Cox (‘Re Cox’)[77] and Trustees Executors v Butler (‘Butler’),[78] which consider the assets available in execution of a writ of fieri facias (or fi fa), the predecessor to a warrant of seizure and sale.
[77]Re Cox (n 56).
[78]Butler (n 56).
I accept that the Sheriff may sell a judgment debtor’s equitable interest in land forming part of a deceased estate in execution of a warrant of seizure and sale. This is provided for in s 208(1) of the Property Law Act, and facilitated by s 208(2).[79] Thus, a property held by a trustee on a fixed trust for a beneficiary would be available to meet a judgment debt. However, as I have already addressed, whether a beneficiary under a will has an equitable interest in property passing to them from a deceased’s estate turns on whether or not the estate has been administered. In both Re Cox and Butler, the judgment debtor had an equitable interest in the land. This was because the estates had been administered, such that the land in question was held on trust for the judgment debtor. Accordingly, I do not accept that Re Cox and Butler support the plaintiff’s submission that a debtor’s interest in property due to them under an unadministered estate is available to meet judgment debts.
[79]See paragraph 68(b) above, and authorities cited therein.
The plaintiffs’ counsel also submitted that where the judgment debtor is also the residuary beneficiary under a will, the Sheriff may seize and sell property held by the judgment debtor in their capacity as executor, citing Nugent v Gifford[80] and Graham v Drummond.[81] However, neither of these cases stand for the propositions advanced by the plaintiffs. Rather, they address the principle that where an executor who is also residuary legatee sells or mortgages an asset of the testator for valuable consideration to a person who has no notice of the existence of unsatisfied debts of the testator, or of any ground which rendered it improper for the executor to deal with the testator’s asset, the transfer of the asset to that person is valid as against any unsatisfied creditor of the testator. In that situation, the creditor of a testator only has a personal demand against the executor for the debt owed, and is not entitled to a lien on the testator’s assets.[82] The Court in Graham v Drummond describes this principle as ‘settled law’, citing, amongst other cases, Nugent v Gifford.[83] Neither Nugent v Gifford nor Graham v Drummond address the rights of a sheriff to seize estate property held by a judgment debtor who is both executor and sole beneficiary of the estate.
[80][1738] 1 Atkyns 463; 26 ER 294.
[81][1896] 1 Ch 968.
[82]Ibid 976.
[83]Ibid 974.
E Has the Estate been administered?
The consequence of the analysis in Part D above is that:
(a)if the proceeds of sale of the Property are Mr Giurina’s property, either at law or in equity, then they are available to meet Mr Giurina’s judgment debts owed to the plaintiffs; and
(b)whether the proceeds of sale of the Property are Mr Giurina’s property is dependent upon whether the Estate or at least the Property, has been administered, such that the proceeds of sale are no longer an asset of the Estate.
E.1 When is an estate administered?
Whilst the parties made submissions to the Court as to whether the administration of the Estate was complete, neither party took the Court to authorities which consider this question, other than the authorities of this Court addressing the status of the administration of this Estate. Consequently, the following summary of the legal principles to be applied is a result of the Court’s own research.
The failure of the parties to make submissions as to the legal principles to be applied came to my attention after the conclusion of trial and I gave consideration as to whether I should invite the parties to make further submissions. However, the parties each made submissions to the Court which reflect the applicable principles set out below. Both sides made submissions as to the length of the administration, whether the Estate’s debts, testamentary expenses and funeral expenses had been paid, and as to the remaining tasks to be undertaken to finalise the administration of the Estate. In light of this, and the manner in which this proceeding was conducted by the parties (details of which are addressed in this judgment), and where the trial took double the estimated trial length, I did not invite further submissions from the parties. This is because taking this course would have increased the costs expended by the parties, caused delay, and led to further use of the Court’s limited resources in respect of a proceeding seeking to enforce Costs Orders taxed in the amount of $39,840.13. Given that the parties’ submissions were consistent with the principles set out below, calling for further submissions would have been disproportionate, and would not facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. Accordingly, having regard to the Court’s obligation pursuant to s 8 of the Civil Procedure Act to give effect to the overarching purpose, I did not invite further submissions from the parties.
As referred to in Part D.3.1 above, an estate will be administered when the executorial duties have been completed.[84] An executor’s duties chiefly involves getting in the assets of the testator, paying the deceased’s debts, paying testamentary and funeral expenses, paying the legacies given by the will, distributing the assets in accordance with the will and producing accounts.[85]
[84]Forbes J Appeal (n 8) [57] (Walker and Orr JJA); Yule v Irwin (No 2) [2016] SASC 178, [161] (Nicholson J) [158]; Jacobs’ Law of Trusts (n 68) 29-30 [2.40], 30-31 [2.44], citing Re Claremont [1923] 2 KB 718 (‘Re Claremont’).
[85]Law of Executors and Administrators (n 65) 74 [3.16].
Whether an estate has been administered is a question of fact to be determined taking into account all the circumstances.[86] Relevant factors include:
(a)the length of time since the death of the testator, and/or a long lapse of time after the completion of the executor’s normal functions, that is, the getting in of assets and payment of all debts, funeral and testamentary expenses associated with the estate.[87] For example, where there has been a protracted holding of estate property available for distribution with the consent of the person entitled to it under the will, the court will find that the estate has been administered, and that the executor is holding the property as trustee with the consent of all the beneficiaries;[88]
(b)the purpose for which the executor holds the remaining assets of the estate. If they are held for the purpose of administering the estate, that is, to sell the assets to pay the debts of the estate, then the administration of the estate will clearly be continuing.[89] If there are no significant debts of the estate, there may be insufficient evidence to justify any assumption that that the asset held by the executor is for the purpose of administering the estate;[90]
(c)the executor’s subjective understanding as to whether all duties have been undertaken or whether there has been assent is relevant, but not decisive;[91] and
(d)whether final accounts in respect of the estate have been prepared will also be relevant, but not decisive.[92]
[86]Ibid 73-74 [3.15]–[3.16]; Hiralal v Hiralal [2013] NSWSC 984, [158] (‘Hiralal’).
[87]Hiralal (n 86) [159], citing Australian Olympic Committee Inc v The Big Fights Inc [1999] FCA 1042, [413] (Lindgren J) (‘Big Fights’); In the Estate of Dunn [1963] VR 165, 166 (Herring CJ) (‘Dunn’); Easterbrook v Young [1974] 1 NSWLR 676, 682 (Holland J) (‘NSW Easterbrook’); Re Clark [1937] WALawRp 17; (1937) 39 WALR 118, 123 (Dwyer J, Northmore CJ agreeing at 124) (‘Re Clark’).
[88]Re Clark (n 87) 123; Dunn (n 87) 166; Blake v Bayne (1908) 6 CLR 179.
[89]Holdway v Arcuri Lawyers [2008] QCA 218, [77].
[90]Curran v McGrath [2010] QSC 172, [26]–[27].
[91]Hiralal (n 86), [159]; Dunn (n 87) 166; Stokes v Churchill; Estate of Fryer (1994) NSW ConvR 55-694, 59-968 (‘Stokes’); Solomon (n 68) 83; Sullivan (n 68),207 (Somers J, with whom McMullin and Barker JJ agreed); Law of Executors and Administrators (n 65) 77 [3.23].
[92]Hiralal (n 86); Big Fights (n 87) [413], [415]; Re Claremont (n 84) 721; Stokes (n 91) 59-968.
Most of the authorities that consider whether a deceased estate or assets within it have been administered do so in the context of needing to decide whether a particular asset is held by a person in their capacity as executor, or alternatively as trustee, as the distinctions between executors and trustees have particular significance in the context of deceased estates.[93] This is often in circumstances where the will provides for a testamentary trust of which the executor is the trustee, such that distribution is not necessary in order for the executor to translate from the role of executor to trustee. However, the absence of a specific reference to a trust in the will does not deny the scope for trusteeship.[94] Once administration of the estate is complete, the executor holds the assets as trustees for the beneficiaries. The beneficiaries may then obtain an order for the assets to be transferred to them.[95]
[93]See for example, Law of Executors and Administrators (n 65) 71 [3.10], 73 [3.15].
[94]Ibid 71 [3.11].
[95]Simmons v Ross [2018] VSC 306, [78]–[79] (Derham AsJ), citing Jacobs’ Law of Trusts (n 68) 29-30 [2-40].
The precise turning point as to whether executorial duties have been performed may need to be considered in relation to each specific item of property in an estate.[96] This is because an executor may become the trustee of different assets of the estate at different times, and so can act in both capacities at the same time in relation to different property.[97]
[96]Porteous v Rinehart (1998) 19 WAR 495, 503 (White J) (‘Porteous’).
[97]Ibid 503, citing Re Earl of Stamford; Payne v Stamford [1896] 1 Ch 288, 297 (Stirling J); Re Cockburn's Will Trusts; Cockburn v Lewis [1957] 1 Ch 438, 439-450; Solomon (n 68) 82-83; Wise v Whitburn [1924] 1 Ch 460,468-469 (Eve J); Re Donkin, Deceased; Riechelmann v Donkin [1966] Qd R 96, 119 (Gibbs J). See also Law of Succession (n 67) 323-324 [10.46].
It is not necessary for all testamentary and administration expenses and debts to be paid before an executor may hold specific assets as trustee. In Porteous v Rinehart, White J held that in relation to particular assets, namely shares in a company left to the executors as trustees on certain trusts, the executors were probably trustees despite it being likely that not all testamentary and administration expenses and debts had been paid. [98]
[98]Porteous (n 96) 503-504; see also Re Roth [2022] VSC 511, [66] (McMillian J); Partridge v Equity Trustees Executors and Agency Co Lts (1947) 75 CLR 149, 166 (Starke, Dixon and Williams JJ).
It has been held to be arguable that an executor may assent to holding the position of trustee rather than executor in respect of specific assets notwithstanding the administration is incomplete, particularly in circumstances where the residuary estate is sufficient to pay all debts, funeral expenses and testamentary expenses, such that the property the subject of specific gifts can be distributed.[99]
[99]Alexiou v Alexiou [2020] NSWSC 748, [41]–[42] (White J).
In Giurina v Sheriff for the State of Victoria,[100] the Court of Appeal considered whether the administration of the Estate the subject of this proceeding was complete. In doing so, the Court of Appeal found that distribution of an estate’s assets is required before the administration of the estate will be complete, and that where real property is bequeathed, formal distribution of real property by transferring legal title is required. The Court of Appeal said:
[i]n our opinion the estate cannot be regarded as fully administered until the assets of the estate have been distributed in accordance with the will. Insofar as money or chattels are concerned, distribution may be informal. But in so far as real property is concerned, attention must be paid to the registered title. Where real property is devised to a specific beneficiary, the administration of the estate cannot be regarded as complete for so long as the legal title remains registered in the name of the deceased person and has not passed to the beneficiary.[101]
[100][2024] VSCA 112, Forbes J Appeal (n 8).
[101]Forbes J Appeal (n 8) [50] (Walker and Orr JJA) (citations omitted).
The Court of Appeal reiterated this at paragraph 57, saying:
But again, the question in this case is whether the executor has performed all his or her executorial functions. As we have explained above, in our view an executor cannot be said to have performed all his or her executorial functions if real property is devised to a specific beneficiary but legal title to the real property has not been conveyed to that beneficiary.
The authority cited by the Court of Appeal in relation to the need for distribution is the High Court’s decision of Easterbrook v Young,[102] where Barwick CJ, Mason and Murphy JJ describe actual distribution of an estate as ‘its removal from the hands or name of the personal representative and its placement in the hands or name of the testamentary or statutory beneficiary’.[103] That is, the Court of Appeal refers to Easterbrook v Young for its definition of ‘actual distribution’, rather than for the proposition that distribution is required in order for an estate to be fully administered.
[102](1977) 136 CLR 308, (‘HCA Easterbrook’), referred to in Forbes J Appeal (n 8) [50], footnote 30.
[103]Ibid; 316-317 (Barwick CJ, Mason and Murphy JJ) quoted in Forbes J Appeal (n 8) [50], footnote 30.
Easterbrook v Young was an appeal from the New South Wales Supreme Court which had found that the estate had been administered. The Court reached this conclusion on the basis that as there was nothing left to be done in the administration of the estate, other than the transfer of the title of real estate from the personal representative to the beneficiaries entitled to it.[104] All debts, duties, administration expenses and other liabilities of the estate had been paid 14 years earlier.[105] The Court found that as such, the personal representative held the real estate as trustees for the beneficiaries entitled to it out of the estate, and did not hold the property in their capacity as administrator of the estate.[106] The Court concluded that therefore the estate had been finally distributed, and an extension of time could not be granted for a family maintenance application.[107]
[104]NSW Easterbrook (n 87).
[105]Ibid 682.
[106]Ibid 682.
[107]Ibid 681-682.
The High Court did not cavil with the trial judge’s conclusion that the estate had been administered, but found that the failure to transfer title to the beneficiaries meant that the estate had not been finally distributed, such that an application for family maintenance was not out of time.[108] In doing so, the High Court accepted as ‘settled law’ that upon completion of executorial duties, the executors cease to be executors and hold the property as trustees for the beneficiaries.[109] However, the High Court found that this was not relevant to the question of whether the estate had been distributed within the meaning of the testator’s family maintenance legislation.[110]
[108]HCA Easterbrook (n 102) 324.
[109]Ibid 319-320.
[110]Ibid 320.
In light of this, it might be that the proposition that distribution of an estate is required in order to complete its administration is expressed too broadly in Giurina v Sheriff for the State of Victoria.[111] This is because it fails to draw a distinction between the administration of an estate as compared to its distribution, at least when considered from the perspective of the beneficiary’s rights in the estate’s assets, and whether they have an equitable interest in the estate property as a consequence of an executor administering the estate, but failing to distribute the estate assets to the beneficiaries entitled to them under the will.
[111]Forbes J Appeal (n 8) [50].
The distinction between administration and distribution may also be relevant in circumstances where the executor is also the sole beneficiary of an estate, or a particular asset within it. This is because, once executorial duties have been completed, the executor could not hold any undistributed assets in their capacity as trustee, as a person may not be the trustee of a trust of which they are also the sole beneficiary.[112] In such circumstances, there is no distinction between the legal and equitable interest in the trust asset, rather the person holds a single, absolute interest in the asset, and they will no longer hold it in their capacity as executor.[113]
[112]DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431, 463-464 (Aickin J), cited with approval in Peldan v Anderson [2006] HCA 48; 227 CLR 471, 485 [37] (Gummow ACJ, Kirby, Hayne, Callinan and Crennan JJ).
[113]See Giurina v Registrar of Titles [2023] VSC 784, [23]–[24] (Barrett AsJ).
The plaintiffs’ counsel asked Mr Giurina whether the Costs Orders would be paid out of the proceeds of sale of the Property paid to him by the Sheriff, he said:
That’s a hypothetical situation but it would again depend all on the circumstances at the time because if - and it’s a big if, if the property were my property and this had been undertaken on the basis that it is my personal property with the proceeds that are my personal proceeds, which is in essence what I’m arguing they are not, what I would do would seek – and I’m going to anyway, would seek a resolution of the issues that I have against the current plaintiffs. When I say the current plaintiffs, being the Owners Corporation. So I would initiate a writ, that’s why I tried to get some resolution vis-à-vis the two summonses which I brought, but I was told that can’t be done within the context of those two proceedings.[242]
[242]Ibid T323-324.
That is, Mr Giurina does not accept he has a present liability in respect of the Costs Orders, but rather, he considers that his liability has not yet crystallised and is subject to some sort of set off that he may obtain through a judgment against the plaintiffs in proceedings that he has yet to commence. This is an extraordinary position for a man of legal learning to take. The Costs Orders are regular and perfected orders of this Court, made over five years ago. They are due and payable now, and Mr Giurina’s liability to the plaintiffs is not contingent in any way.
The two summonses that Mr Giurina refers to in the above extract of the transcript of Mr Giurina’s cross-examination are those filed by him on 7 December 2023 in S CI 2018 00168 and S CI 2018 02290. By those summonses, Mr Giurina sought stays of execution of two of the costs orders made in favour of the plaintiffs, including the Costs Orders sought to be enforced in this proceeding. In addition in S CI 2018 00168, Mr Giurina sought an order setting aside an order made on 10 April 2019 which stayed the proceeding until further orders by reason of Mr Giurina’s failure to provide security for costs. He also sought an order for payment from the plaintiffs in the sum of $167,941.61 (plus interest) for his ‘Monetary Claims’. The Monetary Claims are claims that Mr Giurina says he has against the OC dating back to the time that he was its manager, being a loan (outstanding since 2014), fees for legal services (outstanding since 2012) and management expenses (outstanding since 2011). The plain purpose of Mr Giurina’s summonses was to prevent the plaintiffs from enforcing the debt owed to them pursuant to the Costs Orders, including by way of the relief sought in this proceeding.
On 16 February 2024, I delivered a ruling dismissing Mr Giurina’s two summonses with costs.[243] I found that it would not be in the interests of justice to deprive the plaintiffs of the benefit of the Costs Orders on the basis of the proposed appeals, which had not yet been instituted and were out of time. I found that the asserted Monetary Claims against the plaintiffs did not warrant a stay of execution, because inter alia, despite being raised by a letter of demand issued more than 10 years ago, they had not otherwise been pursued, and are prima facie out of time.[244] Further, the claim for the loan and legal fees appears to have been considered and rejected by VCAT.[245] I refused to set aside the order staying S CI 2018 00168, because Mr Giurina had not articulated a valid basis to vacate the order.[246] I also refused to make an order for payment to Mr Giurina of the Monetary Claims on the basis that it is not appropriate for the Monetary Claims to be brought by summons in S CI 2018 00168. Rather they ought to be pursued by instituting proceedings in the appropriate jurisdiction.[247]
[243]Ermanno Giurina and Maria Deak & Ors (Supreme Court of Victoria, S CI 2018 00168 and S CI 2018 02290, Steffensen AsJ, 16 February 2024) (‘Stay Ruling’).
[244]Ibid [43]-[72].
[245]Ibid [51], referring to Owners Corporations RP001579 v Giurina [2017] VCAT 1509, [176]-[178], [189], [192], [214] (Member A Dea).
[246]Stay Ruling (n 243)[73]–[88].
[247]Ibid [48]–[54].
Mr Giurina said that upon finalisation of the administration of the Estate, the Property (and presumably its proceeds), would not necessarily be distributed to himself personally and thereby available to his judgment debtors. Mr Giurina submitted that:
The point is this, I’m not obligated to put it in my name, I could hold it on trust under a family trust. There are all sorts of options. When the estate – and this is the point, if I had the opportunity, when the estate is finally administered my option is [to] go to an estate planner, what’s the best way of structuring the holding of the estate.[248]
…
So you may have a situation where you have a family trust where it’s not required that there be an actual transfer. And there are all sorts of – and I’m not an expert in this area, all sorts of benefits, taxation wise and so forth.[249]
[248]April 2024 Transcript (n 150) T371.
[249]Ibid T371-372.
Aside from the Warrant, the plaintiffs have sought to enforce the Costs Orders through a sequestration order. However, on application by Mr Giurina, the bankruptcy notice issued by the plaintiffs was set aside on 24 October 2013 on the grounds that his Monetary Claims constituted an offsetting claim.[250]
[250]Order of Registrar Burns in Ermanno Giurina v Owners Corporation No 1579 & Ors (Federal Court of Australia, VID1020/2013, 24 October 2013); March 2024 Transcript. (n 70) T224 (examination of Mr Giurina).
The plaintiffs asked the Court to infer that Mr Giurina has delayed administration of the Estate and distribution of the Property to himself so as to ensure that the Property remains out of the reach of his creditors. I accept that this inference may be drawn from the same facts from which I have concluded that subject to payment by the Sheriff of the debts incurred by Mr Giurina as executor, that the administration of the Estate is complete. The only explanation given by Mr Giurina for the need for the administration to remain on foot is his unsubstantiated assertion that a fraud on the deceased requires investigation – an investigation he has not conducted despite the 22 plus years that have passed since he says he became aware of it.
Concerningly, Mr Giurina has characterised the ownership of the Property in whichever manner suits him for the forum that he happens to be in. From the first hearing in this proceeding on 12 July 2023, Mr Giurina has contended that the Property is property of the Estate and is not owned by him personally. However, in the proceedings concerning the Council, which have been ongoing throughout 2023 and 2024 before other judicial officers of this Court, Mr Giurina’s contention is that he owns the Property personally. These are not isolated events, and they cannot be chalked up to an honest mistake or confusion, particularly given that Mr Giurina’s has practised law. This pattern of behaviour was noted by Matthews AsJ in the caveat removal judgment handed down on 9 March 2023, where her Honour noted that:
Also significantly, the case now advanced by Mr Giurina is completely contradictory to the position he took in the Graffiti Proceeding …I infer that it suited Mr Giurina to portray the Property as part of the Estate in that proceeding, whereas it does not suit him here.[251]
[251]Caveat Removal Decision (n 7) [140].
In the appeal of that decision, the Court of Appeal found that from the outset of the dispute between Mr Giurina and the Council in 2019, until he lodged a caveat claiming a personal interest in the Property on 27 July 2022:
Mr Giurina conducted matters as the executor of the estate, on the basis that the property formed part of the estate. In the course of doing so, he asserted that the property was part of the estate and that he had no personal interest in it.[252]
[252]Matthews AsJ Appeal (n 7) [16].
And later:
On one view of the history of this proceeding, and notwithstanding Mr Giurina’s protestations to the contrary, if the costs orders have been made against him in the wrong capacity because he is entitled to be registered on the title of the property as the freehold owner, all of this has come about through his failure to say at any stage of the various proceedings prior to lodging the caveats, that the property in fact belonged to him personally.
If there was any doubt in Mr Giurina’s mind as to his rights personally or as the executor of the estate, he should have commenced the various proceedings he has taken against the Council in both his personal capacity and his capacity as executor. Contrary to his submissions, the fact that the two emergency notices issued under the Building Act were addressed to ‘Estate of C Nacinovich’ was no impediment to Mr Giurina being frank with the Council and the courts which heard his proceedings and applications about the ownership of the property — a matter peculiarly within his own knowledge given his dealings with himself as both executor and beneficiary.[253]
[253]Ibid [52]–[53].
Mr Giurina’s predilection to say whatever might suit him in a particular forum, including in sworn evidence, lends further weight to the conclusion that his unsubstantiated assertion that the Estate remains under administration for the purpose of investigating the suspected fraud on the testator ought to be given very little weight. It is also a discretionary factor that weighs in favour of granting the plaintiffs the relief they seek.
I therefore accept that absent the Court granting the relief sought by the plaintiffs, it is highly likely that Mr Giurina will not pay the Costs Orders of his own accord out of the proceeds of sale of the Property, and further, that he will seek to challenge any enforcement action the plaintiffs may take. This will lead to further costs, time and expense, and use of the Court’s limited resources.
The plaintiffs may have other remedies available to them for the purpose of enforcing the debt. The plaintiffs suggested that the appointment of a receiver by way of equitable execution may be available. I agree with the plaintiffs submission that this is not necessary given the common law remedies available to the plaintiffs as outlined in this judgment.
If the declaration and ancillary order are made, Mr Giurina will be deprived of the right to address the Costs Orders in such a manner as he sees fit upon receipt of the proceeds of sale of the Property. It will also restrict his ability to deal with the full amount of the proceeds, as the Sheriff will pay the Costs Orders, leading to Mr Giurina receiving a lesser amount following execution of the Warrant. However, given Mr Giurina’s sworn evidence that he does not consider himself to be liable to pay the Costs Orders, in my view, this factor is of limited weight against granting the relief sought.
I have not identified any other discretionary factors that might weigh against granting the plaintiffs the relief they seek, and Mr Giurina did not raise any further matters that have not already been addressed in this decision.
In my view, the relief sought by the plaintiffs is consistent with the overarching purpose that the Court must seek to give effect to pursuant to s 8 of the Civil Procedure Act. That, is the facilitation of the just, efficient, timely and cost-effective resolution of the real issues in dispute. Here the real issues in dispute are whether the proceeds of sale are Mr Giurina’s property, and Mr Giurina’s compliance with the costs judgment made against him. The relief sought by the plaintiffs resolves these issues.
For these reasons, it is appropriate to grant relief of the nature sought by the plaintiffs pursuant to r 66.15 and the inherent jurisdiction of the Court.
I will declare that:
(a)the proceeds from the sale of the Property by the Sheriff, subject to the Sheriff first applying them in accordance with the Sheriff Act and in execution of any warrants issued in respect of debts owed by the executor of the Estate (‘Proceeds’), are the property of Mr Giurina; and
(b)the Proceeds are affected by the Costs Orders and the Warrant.
This wording is intended to make clear that if the Sheriff holds warrants issued to Mr Giurina in his capacity as executor of the Estate, that these amounts are paid out of the proceeds of sale in priority to the amount due under the Warrant. The reason for this is that payment of these amounts will finalise the administration of the Estate.
It is also appropriate to ‘clear the air’ and make an order directing that the Sheriff execute the Warrant as against the Proceeds (as defined). I do not consider that the balance of the ancillary relief sought by the plaintiffs in paragraph 3 of their proposed orders is necessary, as it seeks to set out what the Sheriff is obligated to do under the Sheriff Act when executing a warrant. Namely, applying proceeds from the sale of seized property to payable amounts in accordance with Division 2 of Part IV of the Sheriff Act. Upon clarification that the Warrant may be executed as against the Proceeds, it is not necessary to spell out these mechanics.
G Costs
The plaintiffs seek a costs order in the following terms:
An order that Mr Giurina pay the Plaintiffs’ costs of and incidental to the proceeding, together with the costs reserved by Steffensen AsJ on 23 February 2023 in S CI 2018 00168, and that such sum is to be paid by the Sheriff to the Plaintiffs, out of the Proceeds, in addition to the sum described in Order 3 above.
The Court has reserved the question of costs in relation to the following:
(a)the plaintiffs’ application for leave to further amend the Amended Originating Motion, which was granted by order made on 12 July 2023 with costs reserved;
(b)Mr Giurina’s summons dated 11 July 2023, as amended on 11 October 2023, seeking that the proceeding be struck out or alternatively, be summarily dismissed, which was dismissed by order made on 15 December 2023 with costs reserved;
(c)the plaintiffs’ application for leave to file and serve a second further amended originating motion, which was granted by order made on 15 December 2023, but in respect of which no consequential costs order has yet been made; and
(d)Mr Giurina’s summons filed on 5 March 2024, pursuant to which an order was made on 13 March 2024 setting aside a subpoena issued to him by the plaintiffs, with Mr Giurina’s costs reserved.
In addition, the Court has made costs orders in favour of the plaintiffs in respect of Mr Giurina’s summonses filed on 7 December 2023 in S CI 2018 02290 and S CI 2018 01168 seeking, inter alia, a stay of execution of the Costs Orders (as referred to in paragraphs 201-202 above). On 23 February 2024, the Court ordered that Mr Giurina pay the plaintiffs’ costs of and incidental to the summonses on a standard basis and in a gross sum to be fixed by the Court, and such costs to be costs in this proceeding. The gross sum has not yet been fixed by the Court, as the plaintiffs have not yet adduced evidence or made submissions as to the appropriate gross sum.
The plaintiffs have been successful in this proceeding, and ordinarily, costs ought to follow the event. However, the manner in which this proceeding has been conducted by the plaintiffs will be relevant to the consideration of the appropriate costs order, and the extent to which the plaintiffs will be entitled to payment of all of their costs. For example, the plaintiffs have changed the form of orders sought on a number of occasions and made late concessions, in that:
(a)initially, the plaintiffs sought to enforce seven costs orders made against Mr Giurina.[254] Ultimately, however, after a number of changes of position, the plaintiffs confirmed on the last day of trial that they only seek to enforce one costs order;[255]
(b)initially, the plaintiffs sought an order that following the sale of the Property, the executor of the Estate pay into Court an amount equivalent to the seven costs orders.[256] Next, they sought orders for payment out of Court of that amount into the plaintiffs’ solicitor’s trust account.[257] For the period between 6 October 2023 until 3 April 2024, the plaintiff sought declarations that the Property and any proceeds of its sale is property of Mr Giurina.[258] During the course of trial, on 3 April 2024, the plaintiffs advised that they no longer pressed for declarations that the Property is Mr Giurina’s, and confined their case to seeking orders with respect to the proceeds of sale of the Property;[259] and
(c)the plaintiffs conceded on the last day of trial that s 18(1) of the OC Act applies, such that the OC did require a special resolution to authorise the commencement of this proceeding. This concession was made after much time and effort was spent by the parties traversing evidence and submissions on this issue, including the affidavit of Ms Tara Plumbe filed on 27 March 2024, after the trial had commenced.[260]
[254]Originating Motion filed on 9 December 2022, relief or remedy sought, [1(a)–(g)].
[255]May 2024 Transcript (n 18) T501.
[256]Originating Motion filed on 9 December 2022, relief or remedy sought, [1].
[257]Further Amended Originating Motion filed on 20 July 2023, relief or remedy sought [3]. In addition, the originating motion was amended to specify that the plaintiffs sought interest on the costs orders to be calculated pursuant to the Penalty Interest Rates Act 1983 (Vic).
[258]The plaintiffs’ proposed further amended originating motion, Annexure A to the plaintiffs’ outline of submissions filed on 6 October 2023, relief or remedy sought, [2]. This was the first time the plaintiffs sought ancillary orders pursuant to rr 66.11, 66.15 of the Rules (n 45) and/or the Court’s inherent jurisdiction (relief or remedy sought, [3]). On 15 December 2024, the plaintiffs were granted leave to file a second further amended originating motion by 22 December 2024 which included this relief. However, that order was not complied with, as the wrong document was filed by the plaintiffs. The Second Further Amended Originating Motion was eventually filed on 26 March 2024 pursuant to an extension of time granted that day.
[259]March 2024 Transcript (n 70) T215.
[260]May 2024 Transcript (n 18) T447, T505.
Insofar as the plaintiffs seek an order that the Sheriff pay to the plaintiffs their costs of this proceeding out of the Proceeds, it is not immediately apparent to me that this is appropriate given the costs have not yet been taxed, and no warrant has yet been issued in respect of their recovery.
In light of these matters, I direct the parties to confer as to the appropriate costs order to arise from this ruling. In the event that the parties are unable to reach agreement, I will hear the parties on the question of costs, as outlined below.
H Orders
I will therefore grant the following relief:
(a)I will order that:
(i)the proceeding insofar as it is brought by the OC is summarily dismissed; and
(ii)to the extent necessary, that leave be granted pursuant to r 9.03 of the Rules to the first and second plaintiffs to continue this proceeding without the OC being joined as a party.
(b)I will declare that:
(i)the Proceeds[261] are the property of Mr Giurina; and
(ii)the Proceeds are affected by the Costs Orders and the Warrant.
(c)I will order that the Sheriff execute the Warrant as against the Proceeds.
[261]As defined in paragraph 215 above.
I direct the parties to confer on the form of order to arise from this decision, including on the question of costs. By 29 November 2024 the parties are to provide to my Chambers with consent or competing minutes of order, and if there is no agreement, short written submissions not exceeding five pages addressing the form of order.
I also direct the plaintiffs to forthwith provide a copy of this decision to the Sheriff and her solicitors, and direct that any written submissions from the Sheriff as to the form of order be provided to the Court and the parties by 28 November 2024.
In the event of disagreement, the matter will be listed for a short hearing on 5 December 2024 at 9:30 am for the purpose of making final orders.
SCHEDULE OF PARTIES
| S ECI 2022 05227 | |
| BETWEEN: | |
| MARIA (AKA MARI) DEAK | First Plaintiff |
| STRATA CONNECT PTY LTD (ACN 143 294 900) | Second Plaintiff |
| OWNERS CORPORATION PLAN NO 1579 | Third Plaintiff |
| - and - | |
| ESTATE OF THE LATE CAROLINA NACINOVICH | First Defendant |
| ERMANNO GIURINA | Second Defendant |
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