Edtmaier v Lewis
[2010] VSC 617
•9 December 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
PRACTICE COURT
No. 3480 of 2010
IN THE MATTER of the Will and Estate of ANDREW HERMAN EDTMAIER, deceased
and
IN THE MATTER of s 34 of the Administration and Probate act 1958 and ss 48 and 51 of the Trustee Act 1958
BETWEEN
| JASON ANDREW EDTMAIER and JESSICA MICHELLE EDTMAIER (by their litigation guardian MICHELLE SMITH) | Plaintiffs |
| and | |
| GREGORY JAMES LEWIS (who is sued as the Executor of the Will of the abovenamed deceased) | Defendant |
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JUDGE: | OSBORN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 9 December 2010 | |
DATE OF RULING: | 9 December 2010 | |
CASE MAY BE CITED AS: | Edtmaier v Lewis | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 617 | |
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PROBATE – Application to set aside – Order for removal of executor.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms U Stanisich | Macpherson+Kelley Lawyers |
| For the Defendant | Mr S Grahame | Henderson & Ball |
HIS HONOUR:
On 25 November 2010, I ordered that the defendant be removed as the executor in the will of Andrew Hermann Edtmaier (deceased) and I gave further consequential directions with respect to the administration of the estate. The defendant now seeks to have the order for removal set aside and consequential directions.
The deceased died on 14 February 2008, leaving a net estate valued for probate purposes in 2009 at approximately $430,000. By his will the deceased left his residuary estate to be divided equally between such of his three children who attained 25 years of age. The deceased has one son who has attained the age of 25. He has two further children who are aged 13 and 15 respectively. They are the plaintiffs in this proceeding, which is brought by their mother as litigation guardian. The defendant was a friend of the deceased.
In essence the plaintiffs complain that the defendant has failed to administer the estate with due diligence, has failed to properly account for the administration of the estate, and has failed to have due regard to their interests in respect of the administration of the estate.
The defendant makes the present application pursuant to r 46.08(a), and in the alternative, r 49.02 of the Supreme Court (General Civil Procedure) Rules2005. His application was initially supported by an affidavit sworn by his solicitor, explaining and accepting responsibility for some of the extended delay which has occurred in this matter and explaining and accepting responsibility for the failure by the defendant to appear before this Court on 25 November 2010, when the orders now in issue were made.
On 2 December 2010 I formed the view that this material did not adequately meet the plaintiffs’ case, and put the matter over to today in order, amongst other things, for the defendant to have the opportunity to file further explanatory material in respect of his own part in the sorry history of the administration of this estate.
The orders which are in issue were obtained regularly after notice to the defendant. The failure to appear was the culmination of a long sequence of delays and inaction. Nevertheless, I accept that the reason for the non-appearance of the defendant on 25 November 2010 has been explained by his solicitor and that the application to set aside the orders which I made on that date has been made speedily.
Further, I accept that the plaintiffs are not prejudiced in their ability to present their case as to the merits of the matter as a result of the delay which the non-appearance of the defendant may be said to have caused in enabling the Court to come to grips with the underlying situation.[1]
[1]See Rosing v Ben Shemesh [1960] VR 173.
There is a further issue as to whether the defendant’s material discloses a prima facie defence to the plaintiffs’ claim. Although in my view it does not adequately explain away a number of matters of grave concern, and those matters in turn on their face provide a basis for drawing inferences adverse to the defendant with respect to his fitness to act as an executor, I accept that there is a triable issue as to whether or not the defendant should be removed, having regard to the advanced stage which the administration of the estate appears now to have achieved in terms at least of the getting in of the assets and the satisfaction of liabilities.
In turn, I accept Mr Grahame's submission that if this view be reached, the issue should go for trial. I also accept that if the matter goes to trial, that trial should be expedited in order to protect the interests of the plaintiffs. I further agree that the trial should proceed on affidavit, subject to a right of cross-examination controlled by the trial judge. I propose to fix the matter for trial on 1 February 2011 and make further directions which provide a framework for it to be advanced satisfactorily by that date.
Ultimately I have had to form a view as to whether the defendant's material is such as to persuade me that he should be given a reasonable opportunity to put his case. The right to put his case is one which our system of justice recognises to be fundamental.[2] And despite the history of the matter which Ms Stanisich has eloquently elaborated, I am not prepared to resolve the matter against the executor today effectively on a summary basis.
[2]See Taylor v Taylor (1978) 143 CLR 1.
I turn then to the question of directions. There is some substantial agreement between counsel as to the critical elements for which the directions should provide, and I propose to base the directions I make upon the draft which Ms Stanisich has submitted to me. There are, however, some material alterations to that draft which I have discussed with her, and which will provide among other things for the costs relating not only to today but also to the costs of 25 November 2010.
The principal procedural disagreement which I must resolve is whether this matter should go for mediation or not. I have expressed some preliminary views about what I will call the shape of the proceeding during the course of counsel's submissions from both sides today.
This is not a substantial estate. It appears to me that it has now, despite inexcusable delay, been substantially got in. What really needs to be resolved is the final getting in of the estate which appears to involve relatively simple steps and a resolution of its future administration which it appears will principally involve the administration of a trust for the plaintiffs.
I accept that previous attempts to mediate the matter have not even been able to crystallise in an actual mediation. I also accept that the history of the administration of the estate has been very frustrating for the plaintiffs and their litigation guardian. Nevertheless it seems to me that there is a real prospect that with the assistance of an appropriate mediator, this matter could be resolved. If it were capable of being resolved by agreement that would be the optimal outcome for it. Accordingly, I do propose to order that there be a mediation in this matter within 14 days. I understand that this is a busy time of the year and that this may present logistical problems, nevertheless, I would urge the parties to cooperate and try to facilitate a mediation. I propose to make orders to the following general effect.
First, that Paragraphs 1, 2, 3, 7 and 8 of the orders which I made on 25 November 2010 be set aside.
Secondly, that the defendant pursuant to r 6.03 of Supreme Court (Administration and Probate) Rules 2004, file with the Registrar of Probates and serve on the plaintiffs by 4:00 pm on 17 December 2010 a true and just account in Form 3-6AA verified by affidavit of the administration of the estate of Andrew Hermann Edtmaier deceased, up to and including seven days after this day.
Thirdly, the solicitor for the defendant shall file by 4:00 pm on 17 December 2010 an affidavit containing full particulars of all work in progress in respect of which a claim is made against the estate of Andrew Hermann Edtmaier, up to and including seven days after this day.
Fourthly, the defendant file and serve any further affidavits in opposition to the plaintiff's application by 4:00 pm on 17 December 2010.
Fifthly, that the proceeding be referred to mediation within 14 days. Such mediation to take place before a mediator to be agreed between the parties or in default of agreement, nominated by the chairman of the Victorian Bar Council. I will further direct that such mediation be attended by the litigation guardian and the defendant and I will order that the costs of such mediation be borne by the defendant in the first instance.
I am satisfied by the affidavit material before me, which has been filed by the plaintiffs, and by the nature of the explanation contained in the affidavit material filed on behalf of the defendant, that the need for the present mediation arises from the defendant's conduct of the administration, and accordingly it is appropriate that in the first instance he pay the cost of that mediation.
Sixthly, I will order that any affidavits on which the plaintiff desires to rely in reply to the defendant's material be filed and served on the defendant by 4:00 pm on 21 January 2011. I will order that within seven days, the plaintiffs provide to the defendant's solicitors, Henderson & Ball, all documents delivered to the plaintiff's solicitor pursuant to [5] of the orders made by this Honourable Court on 25 November 2010, but that the plaintiffs be permitted to retain copies of such documents.
I will order that within seven days the Registrar of Probates deliver up to the defendant's solicitors the grant of probate granted to the defendant by the Registrar of Probates on 17 July 2009, and subsequently surrendered by him pursuant to the order of this Honourable Court of 25 November 2010.
I will order that the application for removal of the executor be listed for trial on an estimate of one to two days before the Honourable Justice Osborn or such other judge or associate judge as the Associate Justice in charge of listing may nominate on 1 February 2011. I will order that each party have liberty to apply. I will order that the defendant’s solicitors pay the plaintiffs’ costs of and incidental to this day, and of 25 November 2010 on a solicitor/client basis in default of agreement, and I will order that the defendant shall personally bear his own costs of and incidental to this day, and of 25 November 2010.
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