Farano v Arcaro - [2021] WASC 461

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   FARANO -v- ARCARO [2021] WASC 461
CORAM:   STRK J
HEARD:   13 AUGUST 2021 WITH FURTHER WRITTEN SUBMISSIONS ON 20 AUGUST 2021 & 27 AUGUST 2021
DELIVERED          :   16 DECEMBER 2021
FILE NO/S:   CIV 1189 of 2020
BETWEEN:   CON FARANO
Plaintiff
AND
INES MARIA ARCARO
First Defendant
ANTONIO MICHELE FARANO
Second Defendant
GIOVANNI COSIMO FARANO
Third Defendant
ANTONIO MICHELE FARANO
GIOVANNI COSIMO FARANO
Plaintiff by counterclaim
CON FARANO
Defendant by counterclaim

Catchwords:

Probate - Administration of estates - No grant of probate or administration pending dispute over validity of a will and adjudication of counterclaim - Application for the appointment of an administrator pending grant of probate or administration - Administration Act 1903 (WA) s 35 - Who should be appointed and scope of power in dispute - Turns on own facts

Legislation:

Administration Act 1903 (WA) s 35
Rules of the Supreme Court 1971 (WA) O 73 r 22

Result:

Application granted
Appointment of administrator and receiver pending grant of probate or administration

Category: B

Representation:

Counsel:

Plaintiff	:	M G Pendlebury
First Defendant	:	J Henderson
Second Defendant	:	C V Eastwood
Third Defendant	:	C V Eastwood
Plaintiff by counterclaim	:	C V Eastwood
Defendant by counterclaim	:	M G Pendlebury

Solicitors:

Plaintiff	:	Summers Legal
First Defendant	:	Croftbridge
Second Defendant	:	Eastwood Law
Third Defendant	:	Eastwood Law
Plaintiff by counterclaim	:	Eastwood Law
Defendant by counterclaim	:	Summers Legal

Case(s) referred to in decision(s):

Fazio v Naso [2016] WASC 385
Goodsall v Keen [2006] NSWSC 1143
Lee v Australian Executor Trustee Ltd as Trustee of the Estate of the Late Ronald William Lee [No 4] [2021] WASC 257
Midgley v Midgley (1893) 3 Ch 282
Munro v Munro [2017] SASC 48
Public Trustee (WA) v Brumar Nominees Pty Ltd [No 2] [2012] WASC 337
The Public Trustee in and for the State of Western Australia v Seow & Anor [2003] WASC 62
Vallelonga v Sorgiovanni [2017] WASC 323
Woodley v Woodley [No 3] [2015] WASC 425

STRK J:

Introduction

This is an application made by the plaintiff, Con Farano, seeking an order to appoint an administrator pendente lite to the estate of his late father, Raffaele Farano, pursuant to the Administration Act 1903 (WA) s 35. The appointment is intended to be an interim one, pending final determination of the proceeding.
The deceased died on 13 April 2018, survived by his four adult children who are all parties to this proceeding. As three of the children share the same surname as their parents, I will refer to the children and to their now deceased parents by their given names. No disrespect is intended.
The application was made by a chamber summons filed on 30 April 2021. Immediately prior to the hearing of the application, by a minute of proposed orders filed on 12 August 2021, Con indicated that he pressed for a revised form of orders. A copy of the minute of proposed orders filed on behalf of Con on 12 August 2021 is reproduced at sch A to these reasons.
Ines joined Con in support of his application, and generally supported orders being made as proposed by Con in the minute of 12 August 2021.
Antonio (known as Tony) and Giovanni (known as John) accept that it is appropriate that an administrator be appointed. They seek to be appointed as administrators for limited purposes. A copy of the minute of proposed orders filed on behalf of Tony and John on 13 August 2021 is reproduced at sch B to these reasons.
The dispute as between Con and Ines on the one hand, and Tony and John on the other, concerns who ought be appointed as administrator, and the scope of the appointee's power.[1]
[1] ts 10 - 11 (13 August 2021); see also the second and third defendants' submissions filed 9 August 2021, par 7.

Background and procedural history

Raffaele died on 13 April 2018. Raffaele's wife, Carmina Nicolina Farano, predeceased him. Carmina died on 15 October 1992.
On 21 August 2019, John entered a caveat on probate of Raffaele's estate pursuant to the Non-contentious Probate Rules 1967 (WA) r 33.
Con commenced this probate action on 10 February 2020 by filing a writ of summons indorsed with a statement of claim. It is Con's contention that no valid will of Raffaele has been located that is compliant with the Wills Act 1970 (WA) s 8, and thus Raffaele died intestate. On an intestacy, each of the children of Raffaele are entitled to 25% of Raffaele's estate pursuant to the Administration Act s 14. By this action, Con seeks, among other things, an order that John's caveat be removed and that letters of administration be granted in Con's favour.
All of Raffaele's children are represented in this proceeding. Tony and John are represented by the same solicitors and on 4 May 2020 filed a defence and a counterclaim. Tony and John claim that Raffaele died leaving a will dated 1992 (the 1992 will). They seek an order that the court pronounce the force and validity of the 1992 will, and grant in their favour letters of administration with the 1992 will annexed. By their counterclaim, Tony and John also seek a number of declarations. Tony and John make proprietary estoppel (or constructive trust) claims in respect of certain property and interests in property held by Raffaele as at his death. If successful, I understand the size of the Raffaele's estate to be substantively reduced. (The counterclaim is discussed in further detail below.)
On 17 July 2020, a reply and defence to Tony and John's defence and counterclaim was filed on behalf of Con. In short, Con denies that the 1992 will represented Raffaele's testamentary wishes. He also denies that Tony and John are entitled to the relief claimed in their counterclaim, or any relief at all.[2]
[2] Plaintiff's reply and defence to second and third defendants' defence and counterclaim filed 17 July 2020, pars 2 and 37.
Ines has been joined as a defendant to the proceeding, and a defence was filed on her behalf on 27 May 2021. I understand that her position is largely aligned to Con's. She also denies that Tony and John are entitled to the relief claimed in their counterclaim, or any relief at all. All of the children have now filed affidavits of scripts.

The property of the deceased and the claim made by Tony and John

By their counterclaim, Tony and John seek a number of declarations concerning Raffaele's property. For the purpose of this application, Tony and John depose to circumstances which they say give rise to their counterclaim. Among other things, both Tony and John say that they have worked on the Orchard without any remuneration.[3]

The Orchard

[3] Affidavit of GC Farano sworn 16 July 2021, par 21; affidavit of AM Farano sworn 16 July 2021, par 19.

Tony and John plead that on or about 13 September 1957, Raffaele purchased two properties, being 18 Lissiman Street, Gosnells, and 22 Lissiman Street, Gosnells. They plead that some time later, Raffaele and Carmina purchased 16 Lissiman Street, Gosnells. They refer to the three properties together as 'the Orchard'. They plead that the children were raised on the Orchard, and that Raffaele and Carmina resided on the Orchard until their respective deaths.
From the papers filed for the purpose of this application, I understand that the Orchard has a total area in excess of 16,064 m².[4] At the time of his death, Raffaele held a one half share as tenant in common in 16 Lissiman Street, Gosnells. The other half interest had been held by Carmina and upon her death, had passed to Ridan Pty Ltd as trustee for the Ridan Unit Trust.[5] The sole directors and shareholders of Ridan Pty Ltd are Tony and John.[6] I also understand that at his death, Raffaele alone was the registered proprietor of 18 Lissiman Street, Gosnells and 22 Lissiman Street, Gosnells.
[4] Affidavit of C Farano sworn 30 April 2021, par 78(c); see also the plaintiff's submissions filed 30 July 2021, par 6.
[5] Affidavit of C Farano sworn 30 April 2021, pars 5(c), 6 and 46; affidavit of GC Farano sworn 16 July 2021, par 5.5; see also the plaintiff's submissions filed 30 July 2021, par 6(a) and footnote 5.
[6] Affidavit of C Farano sworn 30 April 2021, par 10, CF3.
Tony and John plead that they worked on the Orchard as children together with Carmina, while Raffaele had off-farm jobs. They plead that Ines completed the accounts for the Orchard until about 1970, from which time she stopped contributing time and effort to the Orchard, and from 1970, John completed accounts for the Orchard.
Tony and John plead that from about October 1992, Raffaele represented to each of them and to their respective wives that the Orchard was theirs if they worked it and kept it going (described in the counterclaim as the Assurance). They also plead that Raffaele repeatedly reaffirmed the Assurance, and from October 1992 onwards, they and their wives acted in reliance upon the Assurance to their detriment.

46 Fremantle Road, Gosnells

Tony and John plead that Raffaele also owned the property at 46 Fremantle Road, Gosnells; that in about 1984, Con married and moved into that property; and from about 1984 onwards, Con stopped contributing his time and effort to the Orchard.
From the papers filed for the purpose of this application, I understand that Raffaele held a one half share as tenant in common in 46 Fremantle Road, Gosnells.[7] The other half share as tenant in common in 46 Fremantle Road, Gosnells is held by Con.[8]

63 Fremantle Road, Gosnells (now known as 69 Fremantle Road, Gosnells)

[7] Affidavit of C Farano sworn 30 April 2021, par 5(d); see also the plaintiff's submissions filed 30 July 2021, par 7(b).

[8] Affidavit of C Farano sworn 30 April 2021, par 8(d).

Tony and John plead that some time before 1970, Raffaele and Carmina became the registered proprietors of a 21,848 m² property then known as 63 Fremantle Road, Gosnells. They plead that Tony assisted Raffaele in building a house on that property in response to a representation made to him by Raffaele.[9]
[9] Defence and counterclaim of the second and third defendants filed 4 May 2020, pars 41 - 43. The parties refer to 63 Fremantle Road, Gosnells and 69 Fremantle Road, Gosnells interchangeably. For consistency, in these reasons I refer to the property as 69 Fremantle Road, Gosnells.
They further plead that Raffaele and Carmina borrowed money from Tony (described in the counterclaim as the Principal Loan Sum), which was secured by a mortgage in favour of Tony over 69 Fremantle Road, Gosnells.
In or about September 1973, Tony and John plead that Raffaele and Carmina gave the house and land at 69 Fremantle Street, Gosnells to Tony and his wife as a wedding gift. In summary, it is pleaded that Tony and his wife have acted in reliance on the gift representation and continue to reside in the property.
Tony and John also plead that in about 1984, Raffaele and Carmina gave a part of 69 Fremantle Street, Gosnells to John and his then fiancé to build a house on as a wedding gift (described in the counterclaim as the Second 63 Fremantle Road Property Assurance). In summary, it is pleaded that John acted in reliance on that gift representation, built a house on that land using his own funds, and continues to reside there.
Tony and John plead that they will suffer detriment if the pleaded Assurances in respect of the gifts were not enforced by transferring 69 Fremantle Road, Gosnells to them.
From the papers filed for the purpose of this application, I understand that Raffaele held a one half share as tenant in common in 69 Fremantle Road, Gosnells.[10] The other half share as tenant in common is held by Ridan Pty Ltd. As noted above, the sole directors and shareholders of Ridan Pty Ltd are Tony and John.

Declarations sought by Tony and John

[10] Affidavit of C Farano sworn 30 April 2021, pars 5(c), 8(c) and 75(a); see also the plaintiff's submissions filed 30 July 2021, par 7(a), which refers to 69 Fremantle Road, Gosnells.

In addition to seeking that the court pronounce the force and validity of the 1992 will and make a grant in favour of them, Tony and John make proprietary estoppel claims in respect of the Orchard and the interest of Raffaele's estate in 69 Fremantle Road, Gosnells.
In this regard, Tony and John seek a declaration that the interest of Raffaele's estate in the land comprising the Orchard is held on trust for them as tenants in common in equal shares, with an order that the executor or administrator of the estate (as may be applicable) do all things reasonably necessary to convey the estate's interest to them. Further, they seek a declaration that the interest of Raffaele's estate in 69 Fremantle Road, Gosnells is held on trust for them as tenants in common in equal shares, with an order that the executor or administrator of the estate (as may be applicable) do all things reasonably necessary to convey the estate's interest to them.
Finally, they seek a declaration that the Principal Loan Sum in respect of 69 Fremantle Street, Gosnells, with interest, remains due and payable by the estate of Raffaele to Tony, together with an order that the debt be paid out of the estate to Tony forthwith.
A reply and defence to Tony and John's defence and counterclaim was filed on behalf of Con, by which Con denies that Tony and John are entitled to the relief they seek.

Application - papers relied upon

The appointment of an interim administrator was proposed on behalf of Con prior to the parties attending mediation in the substantive proceeding, and conferral in relation to the same was deferred to the mediation. I understand that the parties were unable to resolve the issues between them at mediation conferences which took place in July 2020 and November 2020, including whether and on what terms an interim administrator ought be appointed.
Con's application for the appointment of an interim administrator was made on 30 April 2021 and was supported by three affidavits: Con's affidavit sworn on 30 April 2021, with attachments CF1 to CF28; Con's supplementary affidavit sworn on 30 July 2021; and the affidavit of McLane William Edinger, solicitor, sworn on 12 August 2021 with attachments MWE1 and MWE2. All three affidavits were read at the hearing of the application on 13 August 2021. Con also relied upon the memorandum of conferral filed on 30 April 2021 pursuant to the Rules of the Supreme Court 1971 (WA) (RSC) O 59 r 9; a written outline of submissions filed on 6 August 2021; and the minute of proposed orders filed on 12 August 2021.
Ines supported the appointment of an interim administrator. On 13 July 2021, Ines swore an affidavit with attachments IA-1 to IA-6, which was read at the hearing of the application. A written outline of submissions was also filed on behalf of Ines on 6 August 2021.
In opposition to the orders promoted by Con, Tony swore an affidavit on 16 July 2021, with attachment TMF-1; and John swore an affidavit on 16 July 2021, with attachments JCF-1 to JCF-8. Both affidavits were read at the hearing of the application. Tony and John also relied upon a written outline of submissions filed on their behalf on 9 August 2021; and a minute of proposed orders filed immediately prior to the hearing on 13 August 2021.
After hearing submissions made on behalf of each party, I made orders for the parties to file further written submissions as to whether an interim administrator appointed under the Administration Act s 35 could properly be empowered to consider taking (and if considered appropriate, take) an active role in resisting claims made against the estate by Tony and John. A written outline of further submissions was filed on behalf of Con on 20 August 2021; on behalf of Ines on 20 August 2021; and on behalf Tony and John on 27 August 2021. In the determination of the application, I weighed in the balance all of the papers filed.

The applicable principles

Under the Administration Act s 35 and the RSC O 73 r 22, the court has the power to appoint an administrator and/or a receiver pending any suit concerned with the validity of a will. The Administration Act s 35 provides as follows:
The court may, pending any proceedings touching the validity of any will, or for obtaining, recalling, or revoking any probate or administration, appoint an administrator of the personal estate and a receiver of the real estate of any deceased person, at such remuneration and with such full or limited powers as the Court may think fit.
By the orders Con seeks and the submissions made on his behalf, it is clear that he seeks the appointment of an administrator of the personal estate and a receiver of the real estate of Raffaele pending this proceeding.
Section 35 is the statutory means of addressing circumstances in which, first, a grant of probate has not been made; secondly, there are pending probate proceedings; and thirdly, there is a need for the interests of the estate in question to be represented in the interim.[11]
[11] Woodley v Woodley [No 3] [2015] WASC 425 [15] (Beech J).
As was observed by EM Heenan J in The Public Trustee in and for theState of Western Australia v Seow & Anor [2003] WASC 62:[12]
[12] Cited with approval in Public Trustee (WA) v Brumar Nominees Pty Ltd [No 2] [2012] WASC 337 [82] (Pritchard J).
21The section in its present form is the result of an amendment to the earlier s 35 made in 1976. The origin of that section, plainly is s 163 of the Judicature Consolidation Act 1925 of England and Wales which provides:
"163(1) Where any legal proceedings touching the validity of the will of a deceased person, or for obtaining, recalling or revoking any grant, are pending, the High Court may grant administration of the estate of the deceased to an administrator, who shall have all the rights and powers of a general administrator, other than the right of distributing the residue of the estate, and every such administrator shall be subject to the immediate control of the court and act under its direction.
(2) The Court may, out of the estate of the deceased, assign to an administrator appointed under this section such reasonable remuneration as the Court thinks fit."
(See now Supreme Court Act (1981) UK - s 117.)
22 The differences between the original English provisions and s 35 of the Western Australian Act, obviously enough, are, first, the amplitude of powers expressly conferred upon a general administrator under the English prototype and the situation under s 35 of the State Act where the powers are limited to such, full or limited powers, as the court confers at the time of appointment and, second, the express power for the court to assign remuneration under the English provision. I have no doubt this can be done pursuant to the powers of the court otherwise conferred in this State. There is also a third small difference between s 35 and its model, which is mainly of historical interest. Under s 35 there is a distinction recognised between the appointment of an administrator of personal estate and a receiver of real estate, no doubt reflecting the old rule that personal estate devolved on the personal representative and real estate devolved upon the heir. That rule has long since been abolished in England and in Western Australia. That distinction is not maintained in the English provision which treats administration of the estate as carrying the right to deal with both real and personal estate. As I have mentioned, apart from historical interest, nothing appears to turn on that distinction.
23 The origin and effect of the jurisdiction conferred under s 163 of the old English Act is discussed in an earlier edition of Tristram and Coote's, 'Probate Practice', (22nd ed (1964)) at 384 and following and at 976 and in Halsbury's Laws of England, 4th ed, vol 17, at pars 1003 to 1005. In those sources it is emphasised that to found the jurisdiction to make such a grant or appointment there must be a probate action actually pending. … The commentators observe that:
"The application may be made by any person, whether or not a party to the pending action, as for instance a creditor ... The jurisdiction is not exercised where there is a person legally entitled to represent or take possession of the property as in the case of the surviving partner, but it is not confined to cases of necessity."
and a reference is made to the case of Bellew v Bellew (1865) 34 LJPM & A 125, which has been cited to me in argument, where the Court said that it would not follow the established practice of requiring a case of necessity to be made out before making the grant but would adopt the Chancery practice and make the grant wherever a Chancery Court would appoint a receiver. The same principle was later followed In Re Bevan, Bevan v Houldsworth [1948] 1 All ER 271, a decision of the English Court of Appeal.

While necessity need not be established, as observed by Master Sanderson in Vallelonga v Sorgiovanni [2017] WASC 323, the appointment of an interim administrator in circumstances such as this is referred to as a grant of administration pendente lite (that is, pending suit), and such an appointment will only be made if there is sufficient reason to do so.[13] The learned Master further observed that the appointment of an interim or limited administrator ought be made having regard to whether the appointment is in the interests of justice and in the best interests of all parties connected with the estate.[14]
[13] Vallelonga v Sorgiovanni [5], Sanderson M citing Goodsall v Keen [2006] NSWSC 1143 (Campbell J).
[14] Vallelonga v Sorgiovanni [9].
If there is sufficient reason to appoint an interim administrator, questions arise as to who should be appointed, and what powers they might have.[15] Master Sanderson observed that as a general rule, the authorities suggest that a party to the dispute ought not be appointed as the administrator. In this regard, the learned Master noted at [6] that:
In Tomkinson v Hersey (1983) 34 SASR 181 Cox J after reviewing the authorities concluded:
It is hardly surprising that the textbooks and the few reported decisions on the question are generally opposed to the notion of appointing as an administrator pendente lite someone who is personally and actively involved in the lis itself. The desirability of having the estate administered by someone who stands quite outside the litigious battle is obvious. The cases support the Acting Master's conclusion that, as a general rule, a person unconnected with the action is the most suitable person to be appointed as administrator pendente lite (184).
That decision was referred to and followed by McMeekin J in Hempsteed v Ward [2013] QSC 348.
[15] Vallelonga v Sorgiovanni [9].
However, in Fazio v Naso [2016] WASC 385, Master Sanderson did appoint one of the parties to the litigation in circumstances where he was satisfied that the appointment of the party would not adversely affect the estate in question. The case of Fazio v Naso concerned an application by a party for a grant of administration ad colligenda bona defuncti. Literally translated, the plaintiff sought a form of limited administration 'to collect the deceased's goods', which application was opposed by the first and second defendants. The learned Master concluded the appointment of someone independent of the parties in the circumstances of that case to be unnecessary. The Master at [11] observed:
As was pointed out by counsel for the plaintiff the plaintiff's solicitor is very experienced and has taken the advice of counsel at every turn. The plaintiff appears to have followed that advice without question. There is nothing in the evidence to suggest that the plaintiff will not properly administer the estate knowing as he does he will be answerable to the court for any maladministration. In the circumstances the additional cost occasioned by appointing an independent administrator would not in my opinion be justified.

The evidentiary foundation

The following matters are deposed to by Con.
Raffaele died widowed on 13 April 2018, leaving real and personal estate within Western Australia.[16]
[16] Affidavit of C Farano sworn 30 April 2021, pars 4 - 13.
On or about 30 January 2019, Con attended a meeting with the defendants at which the 1992 will was read out.[17] Con had concerns regarding the validity of the will, having noticed that among other things, it was stamped 'DRAFT' on the front page; the word 'File' had been handwritten on the front page; it had only been signed on the last page (but Con did not know who by, where at or in what circumstance); no witnesses had signed the will; and other than the typed words 'One thousand nine hundred and ninety-two', it was not dated.[18]
[17] Affidavit of C Farano sworn 30 April 2021, par 16.
[18] Affidavit of C Farano sworn 30 April 2021, par 17.
At the time Con commenced this proceeding, no application had been made in the estate for a grant of probate or letters of administration.[19] Con commenced this proceeding after informing his siblings of his intention to make an application for letters of administration on the basis that Raffaele died intestate; and after John had entered a caveat on probate. Con deposed to his belief that no legal personal representative would be appointed to administer the estate for a period of approximately 10 - 18 months, given the progression of the matter to date and the potential length of time to proceed to trial.[20] Con further deposed to his belief that the delay is contrary to the best interests of the estate given its size, nature and complexity, together with the conduct of John and Tony with respect to the estate.[21]
[19] Affidavit of C Farano sworn 30 April 2021, par 18.
[20] Affidavit of C Farano sworn 30 April 2021, par 38.
[21] Affidavit of C Farano sworn 30 April 2021, par 39.
Con believes that the Orchard contains some 300 - 400 trees, comprising a mixture of mandarin trees, orange trees and approximately 15 - 20 avocado trees. He believes that the machinery and various equipment used by Raffaele to operate and maintain the Orchard also form part of the estate.
Con complains that the profit of the Orchard since Raffaele's death has not been accounted for.[22] He deposes that despite the Orchard being an estate asset, in the period since Raffaele's death and without Con's permission or consent, John and Tony have:[23]
(a)accessed the Orchard regularly;
(b)harvested any viable fruit from the Orchard;
(c)sold any viable fruit from the Orchard, mostly at the markets known as 'Farmers Market on Manning';
(d)kept all income earned from the sale of the fruit from the Orchard; and
(e)despite request, failed to adequately account to Con or to Con's solicitors with respect to the income earned from the sale of the fruit from the Orchard.
[22] Affidavit of C Farano sworn 30 April 2021, pars 53, 57 - 58.
[23] Affidavit of C Farano sworn 30 April 2021, par 47.
Con is also concerned about the status of a surface water licence. Con believes that Raffaele had been issued with a surface water licence which had authorised the pumping of water from the Canning River to irrigate the Orchard, which licence expired on 30 June 2018. Con deposes to the basis for his belief that the Orchard presently does not have a surface water licence.[24]
[24] Affidavit of C Farano sworn 30 April 2021, pars 80 - 85.
Con also deposes to his knowledge of the existence of other assets of the estate, and the need for arrangements to be made in relation to insurance; the payment of rates, taxes and charges; maintenance, upkeep and security; and ascertaining any amounts due and payable to mortgagees.[25]
[25] Affidavit of C Farano sworn 30 April 2021, par 86.
Ines also deposes to not having received any open correspondence from Tony or John in relation to the total value of Raffaele's estate; the use of the Orchard; or any income earned by the estate.[26] Ines also deposes to her concern about the status of the surface water licence, and the basis for the same.
[26] Affidavit of IM Arcaro sworn 13 July 2021, par 16.

Con's position

The form of relief sought by Con in the chamber summons filed on 30 April 2021 was not pressed at the hearing of the application.[27] Immediately prior to the hearing of the application, an amended minute of proposed orders was filed on behalf of Con. By the amended minute, Con sought to address concerns that had been expressed as to the breadth of power that had been pressed by the chamber summons.[28]
[27] Affidavit of C Farano sworn 30 April 2021, par 59.
[28] ts 13 - 14 (13 August 2021).
Con says that he is concerned that the estate be brought in and conserved, including interests in properties in addition to those referenced in the parties' pleaded claims.[29] Further, Con says that he is troubled by the surface water licence that previously existed to irrigate the Orchard, and is concerned that water has continued to be taken notwithstanding that the licence has expired and no application for a renewal has been granted.[30]
[29] Plaintiff's submissions filed 30 July 2021, par 8.
[30] ts 28 - 29 (13 August 2021).
Con says that a key issue for the administrator will be the basis of future operation of the Orchard, including whether the operation is to be managed by the administrator (through subcontractors), or by a lessee on commercial terms. Such lease need not be granted to either John and/or Tony. He says that similar considerations apply in respect of the continued occupation by various family members of properties of the estate.[31] Given the nature of the Orchard and its current operation, it was submitted on behalf of Con that the appointment of an administrator with a lesser power would be of questionable utility.[32]
[31] Plaintiff's submissions filed 30 July 2021, par 31.
[32] ts 22 (13 August 2021).
Con asks the court to appoint Shaun William Boyle of BRI Ferrier WA as administrator on the basis that he is a registered liquidator, independent of the estate and willing to act as confirmed by the letter of consent annexed to Con's affidavit of 30 April 2021 at CF28,[33] and confirmed in Mr Boyle's letter of consent dated 26 July 2021, annexed to Con's affidavit filed on 30 July 2021 at CF1. Con opposes the appointment of John and Tony.
[33] See also the affidavit of C Farano sworn 30 April 2021, pars 103 - 106.
By proposed order 1(g) of the minute filed on behalf of Con on 12 August 2021, the power of the proposed administrator is to include the power to represent the estate in respect of the defence of the claims made by Tony and John in their counterclaim in this proceeding, including obtaining such professional advice and representation as considered appropriate.
Con complains that there are claims pursued by Tony and John in the form of a counterclaim in the probate action commenced by Con, but there is no administrator to fulfil the function that ought be fulfilled by an administrator in relation to such counterclaim.
It was submitted on behalf of Con that if a grant of probate or letters of administration had been made prior to the commencement of the counterclaim by John and Tony (as would be the normal course), it would have been necessary for the personal representative to have been named as a defendant to the counterclaim. Further, it would have been appropriate for the representative to enter an appearance to the action on behalf of the estate and, depending on the circumstances, to actively defend the counterclaim. It was submitted that this course of action has been recognised in many decisions of this court, including by Kenneth Martin J in Lee v Australian Executor Trustee Ltd as Trustee of the Estate of the Late Ronald William Lee [No 4] [2021] WASC 257. Further, Con submits that it would have been appropriate for that personal representative to seek protective orders under s 92 of the Trustees Act 1962 (WA) confirming that he or she is justified in defending John and Tony's claims, and for orders concerning indemnification for costs and the like.[34]
[34] Plaintiff's submissions filed 20 August 2021, pars 6 and 7.
Con notes that the claims by John and Tony are being made against the estate prior to a grant of either probate or letters of administration, but that they need not have been made prior to the grant. He complains that at present:
(a) the defence of the counterclaim is being carried out solely by him and (more recently) by Ines from their own financial resources;
(b) should he and/or Ines not have sufficient resources available to fund the defence of the claims made against the estate by John and Tony (or not wish to substantially if not completely exhaust their financial resources in the defence of such claims), there is a serious risk of injustice occurring (particularly if the claims made by John and Tony might fail if properly defended by appropriately resourced legal representatives); and
(c) despite he and Ines having to personally fund the defence of John and Tony's claims against the estate, it can be said that the facts and circumstances giving rise to such claims (as asserted by John and Tony, or in any event) were caused by the conduct of Raffaele during his lifetime, at least partly if not solely, but certainly not by reason of any conduct on his part or on the part of Ines.
Con says that he contemplates the proposed interim administrator entering an appearance on behalf of the estate and, if considered appropriate by that administrator, taking advice on whether the claims made by John and Tony ought to be actively defended (and be indemnified by estate assets for so doing).
He says that if the interim administrator forms the view that active defence of the proceeding is appropriate, he may then (should he wish to) seek orders pursuant to s 92 of the Trustees Act, or the like in respect of, among other things, the application of estate assets towards payment of legal fees and disbursements incurred in defending the counterclaim (and be indemnified for so doing).
Con submits that making an order to facilitate the same is within the court's power when making orders pursuant to the Administration Act s 35.

Ines' position

Ines supports Con's application for the appointment of an independent interim administrator to the estate, and presses that the administrator have the power to take an active role in the proceeding.
Ines also raises as a significant concern regarding the irrigation of the Orchard, the status of the surface water licence, and the potential impact of the same on the viability of the Orchard as a going concern moving forward.[35]
[35] Affidavit of IM Arcaro sworn 13 July 2021, par 12, 'IA-5', 'IA-6'.
Ines pressed for the administrator to be granted powers with a different emphasis than that initially promoted by Con, submitting that:
(a)the administrator ought properly be the person to enquire into the historic running and accounting of the Orchard for the purpose of informing the court on matters relevant to the defence and counterclaim of Tony and John, and the current assets and liabilities of the estate; and
(b)the administrator ought properly be the person to defend the assets of the estate against the counterclaim of Tony and John founded in estoppel.[36]
[36] First defendant's submissions filed 6 August 2021, pars 3(c) and 19.
As to the counterclaim, counsel for Ines observed that ordinarily, a claim against estate property founded on an allegation of proprietary estoppel would be commenced against the legal personal representative of the estate. Further, it is relatively unusual that proprietary estoppel claims have been meaningfully progressed whilst the administration of the estate is still outstanding.[37] As to the determination of the validity of the 1992 will, counsel for Ines accepted that an interim administrator would not have an active role.[38]
[37] First defendant's submissions filed 20 August 2021, par 2.
[38] ts 35 (13 August 2021).
It was submitted on behalf of Ines that the court has authority or power to appoint an administrator ad litem to take an active role in investigating the extent of the estate's assets and liabilities and take appropriate steps to either defend or abide in the estoppel claim, which in practice will only occur after they are fully informed and properly advised.[39] Further, it was submitted that the administrator ought to be empowered to make all enquiries necessary to secure reliable valuations of the various properties and of the Orchard operations.[40]
[39] First defendant's submissions filed 20 August 2021, par 15.
[40] ts 33 - 34 (13 August 2021).
Ines opposed the appointment of Tony and John as interim administrators on the basis that their appointment would give rise to a conflict, particularly as they claim constructive ownership of property that would otherwise form part of the estate.

Tony and John's position

In circumstances where no resolution had been reached at mediation, Tony and John accept that an interim administrator ought be appointed.
Tony and John agree that an interim administrator is required to ensure the proper maintenance of Raffaele's estate pending the determination of this proceeding. However, they contend that the administrator should not be a court-appointed, independent professional administrator for a number of reasons, including the limited disposable income of the estate and the potential cost of an external administrator.[41]
[41] Affidavit of AM Farano sworn 16 July 2021, pars 88 - 91.
John deposes that he and Tony are more suited for appointment as joint administrators given their familiarity with the estate assets, particularly the Orchard which requires ongoing maintenance.[42] Further, John and Tony say that there is no cogent evidence of any misappropriation of funds on their part, or any wrongdoing.[43]
[42] Affidavit of AM Farano sworn 16 July 2021, par 95.
[43] ts 42 (13 August 2021).
John and Tony say that the appointed administrator should be granted powers limited to:
(a)obtaining and renewing insurance policies over the assets of the estate;
(b)paying from the estate moneys, rates, taxes, strata fees, insurance premiums, utility expenses and the cost of maintenance, and necessary repairs to the estate properties;
(c)renewing (if required) the water licence; and
(d)doing such acts as may be necessary for the preservation of the assets and the proceeds of the estate until further order or further representation be granted.
Tony and John say that the additional powers of the administrator proposed by Con and Ines go beyond the remit of an interim administrator's function.[44] They oppose the administrator having the breadth of powers proposed by Con and Ines, and say further that it is only the additional powers sought by Con and Ines that inform the need for the appointment of someone independent to the proceeding.
[44] Second and third defendants' submissions filed 9 August 2021, par 15.
Tony and John say that the appointment of an independent administrator will result in the estate incurring significant cost which it cannot meet.They submit that in the circumstances, they ought to be appointed, allowing the estate to be preserved without incurring the expenses of an independent professional administrator. In this regard, they say that in order to preserve the Orchard pending determination of this proceeding, they are willing to, among other things, continue to undertake the management of the Orchard (foregoing remuneration for the time being); and to pay to the estate a reasonable market rent for the Orchard until the completion of this proceeding.[45]
[45] Affidavit of GC Farano sworn 16 July 2021, pars 95.6 - 95.7.
As to whether the court should now make an order in the terms proposed by Con at order 1(g) of the minute of proposed orders filed on 12 August 2021, John and Tony say such an order ought to be sought under s 92 of the Trustees Act.
Tony and John accept that the observation made on behalf of Con that the role of a legal personal representative includes 'protecting the estate from claims that are defensible',[46] is correct as a matter of general principle. However, they submit that it is not always the role of the legal personal representative to defend at the expense of the deceased estate.[47] They say that accordingly, the question of whether it is appropriate for an administrator to actively defend legal proceedings must be the subject of a separate application. That is because 'every application of this kind depends on its own facts and is essentially a matter for the master or judge who hears it'.[48]
[46] Second and third defendants' submissions filed 27 August 2021, par 2.
[47] Second and third defendants' submissions filed 27 August 2021, par 2.
[48] Second and third defendants' submissions filed 27 August 2021, par 3.

It was further submitted that for present purposes, it is significant that there is no evidence of Con having raised the prospect of the administrator's role being extended to that of actively participating in the proceeding, nor that Mr Boyle has acceped such a mandate.[49]
[49] Second and third defendants' submissions filed 27 August 2021, par 9.
Finally, they say that neither Con nor Ines have been able to cite any relevant authority for the proposition that the Administration Act s 35 gives the court the power to make any order permitting an interim administrator to actively defend the estate.[50]
[50] Second and third defendants' submissions filed 27 August 2021, par 10.

Disposition

Is there sufficient reason to appoint an interim administrator?

There is now no contest as between the parties that an interim administrator ought be appointed. The concession is appropriately made by Tony and John, made good by the following.
It has been over three years since Raffaele died. The probate action has been on foot since February 2020. Having regard to the status of the action and the progress to date, it would appear likely that it will be at least some months before this action might be listed for substantive hearing and a formal grant in this estate can be made.
In the meantime, the estate continues to be unadministered. The estate includes a number of properties, including an operating orchard. The properties must be maintained and there are associated expenses, including insurance and rates and taxes. While Tony and John are in possession of the Orchard, it is clear that they do not at present have any legal title to hold 18 Lissiman Street and 22 Lissiman Street, Gosnells, or to enter into obligations in relation to that land. Securing the surface water licence appears to be a conspicuous example of this hiatus in authority.[51] Whether the properties held by Raffaele, or in which Raffaele held an interest, are insured is not clear in the evidence filed.
[51] Adopting and applying the reasoning of EM Heenan J in The Public Trustee in and for the State of Western Australia v Seow & Anor [27].
The evidence discloses sufficient reason to appoint an interim administrator and that such appointment is in the interests of justice. In all of the circumstances disclosed in the affidavits filed, I am satisfied that the power which the court possesses under the Administration Act s 35 should be exercised, and that there should be an appointment of an administrator of the personal estate and the appointment of a receiver of the real estate in respect to all the property of the deceased. It is appropriate that the estate is managed and preserved for the benefit of those persons who may ultimately be found to be entitled to it.

Who should be appointed?

I am satisfied that Mr Boyle is an appropriate person to be appointed as an administrator and receiver. This does not mean that I have concluded that there has been some misappropriation of funds or wrongdoing on the part of John or Tony. While I accept that Tony and John are familiar with the assets of the estate, there remains conflict as between Con and Ines on the one hand, and John and Tony on the other, with respect to the estate. Con and Ines complain that their requests for information have not been adequately addressed. There remain unresolved allegations that John and Tony have failed to account for any profit generated by their working of the Orchard. The appointment of an independent third party is appropriate in circumstances where there is conflict, and particularly so where there is controversy as to whether certain property forms part of the estate.
Con and Ines also seek that Mr Boyle have the power to represent the estate in respect of the defence of the claims made by Tony and John in their counterclaim, including obtaining such professional advice and representation as Mr Boyle considers appropriate. For the reasons set out below, I find that it is appropriate for the appointee to have the power to defend John and Tony's counterclaim. Clearly, John and Tony cannot exercise such power.
In all of the circumstances, the appointment of an independent third party, who stands apart from the litigation, is the appropriate course. Mr Boyle has consented to the proposed appointment. His appointment is also supported by Ines in the proceeding.
Accordingly, I am satisfied that it is appropriate and preferable for Mr Boyle, who is an independent person with no interest in the distribution of the estate, to be appointed. I am satisfied that the benefits of appointing an independent administrator and receiver outweigh any adverse cost effect on the estate.

What power should the appointee have?

While the parties appear to have made their own enquiries, at this time there appears to be no certainty as to the nature and extent of assets held by Raffaele as at the date of his death (beyond the interests held by Raffaele in land), nor his liabilities.
It is appropriate that first, the administrator have the power to make such enquiries and do all things reasonably necessary to ascertain the nature and extent of any assets and liabilities of the estate.
Secondly, the administrator should have the power to collect, get in and receive the estate of the deceased and to do such acts as may be necessary for the preservation of the same.
That power should extend to opening and operating a bank account in the name of the estate, and to deposit estate moneys into an interest‑bearing account. Further, it should extend to carrying out maintenance or necessary repairs to the real property forming party of estate.
Thirdly, the administrator should have the power to satisfy liabilities or other expenses of the estate from the funds of the estate as may be necessary to preserve the assets of the estate pending the grant of letters of administration in intestacy or with will annexed. The power should include the power to pay from the estate rates, taxes, outgoings, maintenance, insurance and other expenses in relation to the real property forming part of the estate. That power should also extend to entering into and/or renewing insurance contracts.
Fourthly, upon production of appropriate receipts, the administrator should have the power to reimburse any estate expenses properly incurred by any third party, including the parties to this action.
Fifthly, the administrator should have the power to enter into managing agency and/or lease agreements in relation to the real property forming part of the estate.

The Orchard and 63 Fremantle Road, Gosnells

Sixthly, the administrator should have the power to renew (if required) the surface water licence with the Department of Water and Environmental Protection.
From the papers filed, I do not understand any of the powers and functions described above to be controversial.
However, the broad powers described at [87] to [93] above, which includes power to call in any assets of the estate should not extend to taking possession of the properties the subject of the counterclaim (that is, the Orchard and 63 Fremantle Road, Gosnells), or calling in income earned by the utilisation of that property.
It has not been resolved whether the Orchard and 63 Fremantle Road, Gosnells are held beneficially by John and Tony. I understand that the Orchard has operated as such for about 65 years.[52] It would appear uncontroversial that it has been operated by Tony and John and their respective wives exclusively since Raffaele died in April 2018.[53] To take possession of these properties or to call in income at this time would be premature, going beyond what is required at this time.
[52] Affidavit of C Farano sworn 30 April 2021, par 40.
[53] Affidavit of AM Farano sworn 16 July 2021, par 47; affidavit of GC Farano sworn 16 July 2021, par 95.
It would be appropriate in the circumstances for Tony and John to continue to occupy the Orchard and 63 Fremantle Road, Gosnells, subject to them paying all land rates and water rates, utility bills and any future land tax without prejudice to any claim that may be made against them for rent, or perhaps mesne profits, since Raffaele's death.
The administrator should however have such powers as facilitates an ongoing right of inspection as to the affairs, performance, business and operation of the Orchard. That is, the administrator should have power to access the Orchard and all records associated with the same, so as to ensure appropriate records and accounts are kept including records as to the sale of any fruit, the payment of any expenses, and collection of any income.

The proceeding

By proposed order 1(g) of the minute filed on behalf of Con on 12 August 2021, the power of the proposed administrator was to expressly include the power to represent the estate in respect of the defence of the claims made by Tony and John in their counterclaim in this action, including obtaining such professional advice and representation as considered appropriate.
In this case, there is a claim pursued by Tony and John in the form of a counterclaim in the probate action commenced by Con. There is no person appointed to fulfil the function often fulfilled by an executor or administrator in relation to such a claim against an estate.
I accept that the duties of a duly appointed executor or administrator are not limited to simply identifying assets and liabilities, but extends to protecting the estate from defensible or illegitimate claims.[54] I also accept that the court may confer upon an interim administrator the power to defend proceedings.[55]
[54] Munro v Munro [2017] SASC 48 [25]; Midgley v Midgley (1893) 3 Ch 282, 299, cited by the plaintiff in the plaintiff's submissions filed on 20 August 2021, par 4.
[55] The Public Trustee in and for the State of Western Australia v Seow & Anor [21] - [23], [33].
Section 35 does not upon appointment confer on an administrator 'all the rights and powers of a general administrator, other than the right of distributing the residue of the estate' as found in s 163 of the Judicature Consolidation Act 1925 of England and Wales. Instead, the powers of an administrator appointed under s 35 are limited to such, full or limited powers, as the court confers at the time of appointment. There are no words of limitation in the text of s 35, or other basis having regard to the Administration Act, to construe the words 'full powers' as necessarily excluding the power to defend proceedings.
Satisfied that there is no constraint, I find that in the circumstances warrant Mr Boyle being granted the power to defend proceedings. There is a lacuna that ought be filled.
However, I note that the grant of the power to defend proceedings does not compel its exercise. Further, the power to defend proceedings ought not be confused with a direction made pursuant to s 92 of the Trustees Act. Whether the administrator ultimately seeks to exercise the power, with the benefit of a direction under s 92 or otherwise, is not predetermined or compelled by the grant of the power.
The administrator will have the power to defend proceedings, and the power to do all things necessary in the exercise of that power, such as the power to obtain legal advice and representation as considered appropriate, and liberty to apply in this proceeding. Further, the administrator will not be constrained in his power to seek directions pursuant to s 92 of the Trustees Act at any time.

An account

The outcome of Tony and John's counterclaim will determine whether or not 63 Fremantle Road, Gosnells and the Orchard form part of Raffaele's estate, available for distribution under the 1992 will or in intestacy, and whether the properties are charged with any of the estate's liabilities, such as the costs of the appointment of the interim administrator.
Depending upon the outcome of the counterclaim, different claims may arise. For example, if Tony and John succeed in their claim for declaratory relief grounded upon promissory estoppel, the estate may have a claim as against them to recover estate moneys spent in the preservation and maintenance of property that was not property of the estate. If their claim fails, then the estate may claim against Tony and John for rent, or perhaps mesne profits, whereas Tony and John may have a claim as against the estate to recover moneys spent by them in the preservation and maintenance of property that was property of the estate.
The taking of an account now, prepared having regard to possible ultimate beneficial ownership scenarios, would appear to be premature and a task that goes beyond what is presently necessary.
To the extent that there are estate books and records, the administrator should have the power to gather them and preserve them, and of course, prepare and keep records of expenditure incurred and by whom.

Administrator's costs

The hourly rates specified in the document entitled 'BRI Ferrier - Fees & Charges Policy Statement', which is attachment CF28 to the affidavit of Con sworn 30 April 2021, are appropriate.
However, I note that the payment of the administrator's fees is not a straightforward issue. No party to this proceeding has deposed to knowledge of Raffaele having held a bank account in his name. It appears unlikely that the administrator will have ready access to cash.
Further, there remains a question as to whether the Orchard and 63 Fremantle Road, Gosnells form part of Raffaele's estate. If Tony and John establish their claim of proprietary estoppel, the estate will not necessarily enjoy a charge over those assets and they may not be available to meet estate expenses (such as the administrator's costs and expenses incurred).[56] I understand that Raffaele did not hold an interest in any other property outright, so realising Raffaele's interest in property to meet the administrator's ongoing costs may not be straightforward, and the administrator may be required to carry, and may ultimately be at risk in relation to his costs and expenses.
[56] Lee v Australian Executor Trustees Ltd as Trustee of the Estate of the Late Ronald William Lee [No 4], [45] - [47].
Con suggests that in the event the cash funds of the estate are insufficient or considered likely to be insufficient after 12 months from the date of appointment to meet the administrator's fees incurred, that the administrator have liberty to apply for directions from the court in respect of the sale of any assets of the estate in order to pay such fees.
I do not propose to make an order in such terms. In not making such an order, I make no observation or comment in relation to the possible or likely outcome of such an application if it were made. Rather, I think it most appropriate to simply record that the administrator will have liberty to apply in this proceeding, and may seek directions pursuant to s 92 of the Trustees Act at any time.

Conclusion and orders

For these reasons, I will grant the application, and I will hear the parties as to the form of orders which reflects these reasons.

I note that it is my preliminary view that in all of the circumstances, the costs of the application should be reserved and determined once this proceeding has been substantively heard and determined. However, I will hear the parties in relation to costs.

Sch A: The plaintiff's minute of proposed orders filed on 12 August 2021

THE SUPREME COURT OF WESTERN AUSTRALIA

HELD AT PERTH CIV 1189 of 2020

BETWEEN:

Con FARANO Plaintiff

AND

Ines Maria ARCARO First Defendant

and

Antonio Michele FARANO Second Defendant

and

Giovanni Cosimo FARANO Third Defendant

PLAINTIFF’S MINUTE OF PROPOSED ORDERS FOR SPECIAL APPOINTMENT

Date of document:	12 August 2021
Filed on behalf of:	The Plaintiff
Date of filing:	12 August 2021
Filed by:
Summers Legal		Telephone: (08) 9420 8222
104 Colin Street		Facsimile: (08) 9420 8223
WEST PERTH WA 6005		Reference: MWE:CB:107054

_______________________

The Plaintiff seeks the following orders at the Special Appointment before her Honour Justice Strk at 10.30am on Friday, 13 August 2021:

Shaun William Boyle of BRI Ferrier WA, Unit 3, 99-101 Francis Street, Northbridge WA 6003 (the Administrator) be appointed the administrator pendente lite of the estate of the late Raffaele Farano (Estate) pending the determination of this action pursuant to section 35 of the Administration Act 1903 (WA) with powers limited to the following:
a)make such enquiries and do all things reasonably necessary to take possession of, maintain, protect, manage and control the Estate’s interest in the following properties:
i.7 Gambia Place, Madora Bay, WA 6210, more particularly described as Lot 486 on Plan 7911 being all of the land on Certificate of Title Volume 18 Folio 174A;
ii.Lot 401 on Deposited Plan 405708 being all of the land on Certificate of Title Volume 2930 Folio 124;
iii.69 Fremantle Road, Gosnells, WA 6110 (formerly 63 Fremantle Road, Gosnells), more particularly described as Lot 1174 on Plan 2566 being all of the land on Certificate of Title Volume 1142 Folio 881;
iv.46 Fremantle Road, Gosnells, WA 6110, more particularly described as Lot 13 on Diagram 23717 being all of the land on Certificate of Title Volume 1273 Folio 725;
v.16 Lissiman Street, Gosnells, WA 6110, more particularly described as Lot 6 on Diagram 20828 being all of the land on Certificate of Title Volume 1248 Folio 418 (16 Lissiman Street);
vi.18 Lissiman Street, Gosnells, WA 6110, more particularly described as Lot 7 on Diagram 20828 being all of the land on Certificate of Title Volume 1206 Folio 6 (18 Lissiman Street); and
vii.22 Lissiman Street, Gosnells, WA 6110, more particularly described as Lot 1106 on Plan 2566 being all of the land on Certificate of Title Volume 1206 Folio 5 (22 Lissiman Street);
b)in respect of the orchard contained on the 16, 18 and 22 Lissiman Street properties (Orchard):
i.subject to iii. below, take all reasonably necessary steps to maintain and operate the Orchard, including the sale of any fruit, payment of any expenses and collection of any income;
ii.collect and account for any income earned from the utilisation, operation or otherwise in respect of the Orchard (historical or current);
iii.as soon as reasonably practicable, take all steps considered appropriate to assess the viability of the Orchard and, following such assessment, if it is considered in the best interests of the Estate to do so, operate the Orchard as a going concern, including via a third party or otherwise and/or lease or licence to a third party;
c)make such enquiries and do all things reasonably necessary to ascertain and call in any assets of the Estate, including income earned by the utilisation of the assets of the Estate since the death of the late Raffaele Farano;
d)make such enquiries and do all things reasonably necessary to ascertain the nature and extent of any liabilities of the Estate and to satisfy any such liabilities or other expenses of the Estate from the funds of the Estate;
e)upon production of appropriate receipts, the Administrator be authorised to reimburse any Estate expenses properly incurred by any third party, including the parties to this action;
f)do all things reasonably necessary to preserve, protect, maintain and maximise the assets of the Estate; and
g)represent the Estate in respect of the defence of the claims made by the Second and Third Defendants in their Counterclaim in this action, including obtaining such professional advice and representation as considered appropriate.

Subject to order 3 below, the Administrator be entitled to be paid out of the Estate on a time/hourly basis at the hourly rates specified in the document entitled ‘BRI Ferrier – Fees & Charges Policy Statement’ which is attachment ‘CF28’ to the affidavit of Con Farano sworn 30 April 2021 and filed herein.

In the event the cash funds of the Estate are insufficient or considered likely to be insufficient after 12 months from the date of this order to meet the Administrator’s fees incurred in accordance with order 2 above, the Administrator have liberty to apply for directions from the Court in respect of the sale of any assets of the Estate in order to pay such fees.
The Plaintiff and First Defendant’s costs of this application be paid on an indemnity basis:
a)by the Second and Third Defendants, to be taxed if not agreed, and to the extent that the Plaintiff and First Defendant are unable to recover their complete costs of the application from the Second and Third Defendants, those further costs be paid by the Estate; or in the alternative
b)from the Estate, to be taxed if not agreed.
The parties and Administrator have liberty to apply.

Sch B: The second and third defendants' minute of proposed orders filed on 13 August 2021

IN THE SUPREME COURT OF WESTERN AUSTRALIA

HELD AT PERTH CIV 1189 of 2020

B E T W E E N:

CON FARANO Plaintiff

and

INES MARIA ARCARO First Defendant

and

ANTONIO MICHELE FARANO Second Defendant

and

GIOVANNI COSIMO FARANO Third Defendant

SECOND AND THIRD DEFENDANTS’ MINUTE OF PROPOSED ORDERS

Date of Document	13 August 2021
Filed on behalf of:	The Second and Third Defendants
Date of Filing

Prepared by:

Eastwood Law	Telephone: (08) 9481 8460
Level 1	Fax: (08) 9481 5465
26 Railway Road	Reference: CVE:19026
SUBIACO WA 6008

___________________________________

John Cosimo Farano and Tony Mike Farano be appointed joint administrators of the personal estate of the late Raffaele Farano (Deceased) pursuant to s35 of the Administration Act 1903 for the following limited purposes only and until further representation may be granted:

a.collecting and getting in and receiving the estate of the Deceased and doing such acts as may be necessary for the preservation of the same;
b.without limiting the above:

i.paying from estate monies owing by the Deceased and/or his estate including (without limitation) rates, taxes, outgoings, maintenance, insurance and other expenses in relation to the real property forming part of the estate;

ii.carrying out maintenance or necessary repairs to the real property forming party of estate;

iii.investing estate monies in an interest bearing account;

iv.entering into and/or renewing insurance contracts;

v.entering into managing agency and/or lease agreements in relation to the real property forming part of the estate;

vi.to renew (if required) the water licence with the Department of Water and Environmental Protection; and

vii.all things ancillary to the above.

The Plaintiff and the First Defendant pay the Second and Third Defendants’ costs of the application, to be tax if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

MH
Associate to Justice Strk

16 DECEMBER 2021

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: FARANO -v- ARCARO [2021] WASC 461 (S)
CORAM:   STRK J
HEARD:   7 APRIL 2022, AND UPON AFFIDAVITS FILED ON 2 MAY 2022 AND 3 MAY 2022
DELIVERED          :   31 MARCH 2023
FILE NO/S:   CIV 1189 of 2020
BETWEEN:   CON FARANO
Plaintiff
AND
INES MARIA ARCARO
First Defendant
ANTONIO MICHELE FARANO
Second Defendant
GIOVANNI COSIMO FARANO
Third Defendant
ANTONIO MICHELE FARANO AND GIOVANNI COSIMO FARANO
Plaintiffs by counterclaim
CON FARANO
Defendant by counterclaim

Catchwords:

Costs - Application for the appointment of an administrator pending grant of probate or administration - Administration Act 1903 (WA) s 35 - Turns on own facts

Legislation:

Administration Act 1903 (WA)
Legal Profession Act 2008 (WA)
Rules of the Supreme Court 1971 (WA)
Supreme Court Act 1935 (WA)

Result:

Costs orders made

Category: B

Representation:

Counsel:

Plaintiff	:	M G Pendlebury
First Defendant	:	J Henderson
Second Defendant	:	C V Eastwood
Third Defendant	:	C V Eastwood
Plaintiffs by counterclaim	:	C V Eastwood
Defendant by counterclaim	:	M G Pendlebury

Solicitors:

Plaintiff	:	Summers Legal
First Defendant	:	Croftbridge
Second Defendant	:	Eastwood Law
Third Defendant	:	Eastwood Law
Plaintiffs by counterclaim	:	Eastwood Law
Defendant by counterclaim	:	Summers Legal

Cases referred to in decision:

Blatchford v Laine [2018] WASC 207
Corporate Systems Publishing Pty Ltd v Lingard [2009] WASCA 158 (S)
Farano v Arcaro [2021] WASC 461
Goodsall v Keen [2006] NSWSC 1143
Great Southern Managers Australia Ltd v Thackray [2010] WASC 138 (S)
Hempseed v Ward & Anor [2013] QSC 348
Hughes v Western Australian Cricket Association (1986) ATPR 40‑748
James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296
Jones v Toomer [2021] WASC 207
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
Naidoo v Williamson [2008] WASCA 179; (2008) 37 WAR 516
Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164
Ohn v Walton (1995) 36 NSWLR 77
Re Bradshaw [1902] 1 Ch 436, 450 (1902) 71 LJ Ch 230
Re Buckton [1907] 2 Ch 406
Re Kelly [2022] QSC 117
Re Koroneous; Koroneous v Koroneous [2021] VSC 734
Ritossa v Ritossa [2022] NSWSC 1083
Ritossa v Ritossa [2023] NSWCA 14
Rowe v Storer [No 2] [2013] VSC 635
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388
Vallelonga v Sorgiovanni [2017] WASC 323
Wentworth v Attorney‑General (NSW) [1984] HCA 70; (1984) 154 CLR 518
Woodley v Woodley [2017] WASC 94 (S)

Table of Contents

Introduction

Positions adopted at the hearing

Papers relied upon at the hearing of the application

Competing positions of the parties with respect to costs

Con's position

Ines' position

Tony and John's position

Applicable principles

Disposition

Conclusion and orders

Sch A - Orders made on 16 December 2021

STRK J:

Introduction

For reasons published, I made an order appointing an administrator pendente lite to the estate of the late Raffaele Farano (also known as Raffaelo Farano) pursuant to s 35 of the Administration Act 1903 (WA): Farano v Arcaro [2021] WASC 461. A copy of the orders appointing Shaun William Boyle of BRI Ferrier WA as administrator of the personal estate and receiver of the real property of the deceased pending determination of the proceeding is reproduced at sch A to these reasons.
At [116] of the primary reasons, I recorded my preliminary view that in all of the circumstances, the costs of the application made by the plaintiff seeking an order to appoint an administrator pendente lite to the estate of his late father should be reserved and determined once this proceeding had been substantively heard and determined, but that I would hear the parties in relation to costs. Two of the parties opposed the making of an order that reflected the preliminary view expressed at [116], and the parties were not able to agree an appropriate form of costs order.
Counsel for the parties were subsequently heard in relation to costs. To facilitate disposition, after hearing counsel on 7 April 2022 I directed that each party file and serve an affidavit which disclosed the costs and disbursements incurred in relation to the application made by the plaintiff by chamber summons filed on 30 April 2021 by way of a draft bill, prepared on a party/party basis and solicitor/client basis. By the consent of the parties, the time for compliance with that direction was extended until 2 May 2022.
These reasons concern the costs of the application and should be read with and as if they incorporate my primary reasons. As was there noted, the deceased was survived by his four adult children who are all parties to this proceeding and were parties to the application.[57] As three of the children share the same surname, I will refer to them and to their now deceased parents by their given names. No disrespect is intended.
[57] Since the appointment of an administrator pendente lite to the estate of Raffaele, additional parties have been joined to the action, including Shaun William Boyle in his capacity as administrator of the personal estate and receiver of the real property of Raffaele, as second defendant by counterclaim. The additional parties were not parties to the application.
For the reasons set out below, in the circumstances of this case it is fair and just between the parties to allow Con and Ines to recover their costs of the application from the estate as a testamentary expense in any event. It is also fair and just in the circumstances to allow Antonio (known as Tony) and Giovanni (known as John) to recover 50% of their costs of the application from the estate in any event. If quantum is not agreed as between the parties, such costs are to be taxed on a solicitor/client basis.

Positions adopted at the hearing

Con's application to appoint an administrator pursuant to s 35 of the Administration Act was filed on 30 April 2021. I understood that conferral as to the potential appointment of an interim administrator was initiated by Con through his solicitors, but was deferred at the suggestion of Tony and John pending mediation.[58]
[58]Farano v Arcaro [30]; ts 68 (7 April 2022).
The form of relief sought by Con in the chamber summons was not the form of relief pressed at the hearing of the application. As was noted at [3] to [6] of the primary reasons, immediately prior to the hearing of the application, by a minute of proposed orders filed on 12 August 2021, Con indicated that he pressed for a revised form of orders.[59] By the amended minute, Con sought to address concerns that had been expressed as to the scope of power that Con proposed be vested in an interim administrator, as had been contemplated in the orders sought by chamber summons.[60] Con asked the court to appoint Shaun William Boyle of BRI Ferrier WA as administrator on the basis that Mr Boyle was a registered liquidator, independent of the estate and willing to act.[61]
[59] A copy of the minute of proposed orders filed on behalf of Con on 12 August 2021 was reproduced at sch A to the primary reasons.
[60] Farano v Arcaro [51].
[61] Farano v Arcaro [54].
In response to the application filed by Con, Tony and John indicated that they accepted that it was appropriate that an administrator be appointed. However, they opposed the appointment of Mr Boyle (or any independent professional administrator) and they sought to be appointed as administrators for limited purposes.[62] Further, they sought that the interim administrator be granted more limited powers than had been proposed by Con.
[62] A copy of the minute of proposed orders filed on behalf of Tony and John on 13 August 2021 was reproduced at sch B to the primary reasons. Tony and John's position was summarised in Farano v Arcaro [68] ‑ [77]; see also the affidavit of J C Farano sworn 16 July 2021 pars 87 ‑ 97.
In summary, Ines supported Con's application for the appointment of an independent interim administrator to the estate, and also pressed that the administrator have the power to take an active role in the proceeding.[63] Further, Ines opposed the appointment of Tony and John as interim administrators on the basis that their appointment would give rise to a conflict, particularly as Tony and John claimed constructive ownership of property that would otherwise form part of the estate.[64]
[63] Further submissions on behalf of Ines filed on 20 August 2021.
[64] Farano v Arcaro [62] - [67].
At the hearing of the application, the dispute as between Con and Ines on the one hand, and Tony and John on the other, concerned who ought be appointed as administrator and the scope of the appointee's power. The background to the application and the relevant procedural history was otherwise recorded at [7] to [29] of the primary reasons.

Papers relied upon at the hearing of the application

The papers that were filed and relied upon for the purpose of the application were described at [31] to [34] of the primary reasons. As was noted at [34], in the determination of the application I weighed in the balance all of the papers filed.

Competing positions of the parties with respect to costs

Con's position

Con's position as to costs was outlined in the written outline of submissions filed on his behalf on 31 March 2022 and by counsel at the hearing on 7 April 2022.
In summary, it was Con's position that he should recover his costs on a party/party basis from Tony and John to be paid forthwith, and to the extent that additional costs were incurred that could not be recovered on a party/party basis from Tony and John, they ought be recovered on a solicitor/client basis from the estate, also to be paid forthwith.[65]
[65] Submissions filed on behalf of Con on 31 March 2022 pars 3, 7 - 9, 12.
On behalf of Con it was noted that the application was filed about six months after correspondence proposing the appointment of an administrator had been sent by his representatives to the representatives of the defendants; and at the time the application was filed, the solicitors for Tony and John had not responded to certain correspondence and there had not been an acceptance on the part of Tony and John of the need for the appointment of an administrator (independent or otherwise).[66] It was submitted that Con had no alternative, if the assets of the estate were to be protected, but to bring the application.[67]
[66] Submissions filed on behalf of Con on 31 March 2022 par 1; ts 69, 71 (7 April 2022).
[67] ts 72 (7 April 2022).
It was Con's position that he had substantively succeeded in his application, and having succeeded and thereby having been found to have acted to protect the interests of the estate (and not just his own interests), he ought be awarded his costs of the application.
While counsel acknowledged that the orders sought by Con may have 'sought a little too much in certain respects' (which I understood to be a reference to the scope of powers that Con sought be granted to the interim administrator as initially framed in the chamber summons filed on 30 April 2021 and then in the minute of proposed orders filed on 12 August 2021), it was submitted that that there was no ruling that the orders sought by Con were inappropriate;[68] Tony and John were not appointed; and Con had been 'substantially successful'.[69]
[68] ts 69 (7 April 2022).
[69] ts 69 (7 April 2022).
On behalf of Con, it was submitted that consistent with the general rule, Con should be indemnified in respect of his liability for professional fees and expenses reasonably incurred in connection with the application. Further, it was Con's position that his costs ought be paid by Tony and John, rather than from the assets of the estate, and submitted that the following matters informed the same.[70]
[70] Submissions filed on behalf of Con on 31 March 2022 pars 4 - 6.
First, it was only shortly before the hearing of the application (when Tony and John's affidavits in opposition were filed on 16 July 2021) that there was any indication from Tony and John of their acceptance that the appointment of an administrator may be warranted.
Secondly, from then on there was (albeit reluctant) acceptance by Tony and John of the need (or sufficient reason) for the interests of the estate to be represented pending the outcome of the contested probate proceeding.
Thirdly, Tony and John maintained that they should be appointed as administrators (that is, they opposed any appointment of an independent administrator).
Counsel for Con further submitted that Tony and John's position (that they be jointly appointed interim administrators) was rejected by the court for reasons which included the following:[71]
(a)the complaint made by Con and Ines that their requests for information in respect of the affairs of the estate had not been adequately addressed;
(b)the unresolved allegations that Tony and John had failed to account for any profit generated by the working of the Orchard; and
(c)the existence of a clear conflict between the interests of the estate and the substantial claims made against the estate by Tony and John by their counterclaim (and in this regard, counsel for Con noted that the court's primary reasons stated that it was clear that Tony and John could not exercise the power to represent the estate in respect of those claims).
[71] Submissions filed on behalf of Con on 31 March 2022 par 5.
Counsel for Con further submitted that the need for Con to bring the application in order to protect the interests of the estate arose due to the failure on the part of Tony and John to adequately respond to each of the matters outlined above.[72]
[72] Submissions filed on behalf of Con on 31 March 2022 par 6.
Con maintained that Tony and John's conduct was improper and unreasonable (and clearly so), and their stance in respect of the conflict issue alone was, from the outset and until the determination of the application, unreasonable and unsupportable.[73] It was submitted that the hiatus in authority,[74] and the appropriateness of an independent administrator,[75] ought to have been obvious to John and Tony from the outset.[76] Further, any preparedness to share responsibility on the part of Tony and John was not tenable in light of their conflict.[77]
[73] Submissions filed on behalf of Con on 31 March 2022 par 6, citing Re Koroneous; Koroneous v Koroneous [2021] VSC 734 [15].
[74] See discussion in Farano v Arcaro [80].
[75] See discussion in Farano v Arcaro [82] - [85].
[76] ts 72 - 73 (7 April 2022).
[77] ts 74 (7 April 2022).
Having regard to these matters, it was submitted that Tony and John should be ordered to pay Con's costs on a party/party basis.[78] Further, to the extent that there was a shortfall as between the costs incurred by Con recovered from Tony and John on a party/party basis and the costs that would be recoverable on a solicitor/client basis, it was Con's position that the estate should meet that shortfall.[79]
[78] Submissions filed on behalf of Con on 31 March 2022 par 7.
[79] Submissions filed on behalf of Con on 31 March 2022 par 8, citing Woodley v Woodley [2017] WASC 94 (S) [76], [95].
In the alternative, Con sought that his costs ought be paid from the assets of the estate, and if required, assets of the estate be sold in order to provide the administrator with sufficient funds to pay his costs.[80] However, counsel submitted that the alternative ought not be the preferred course as a costs order out of the estate will in the end, in some form, be a costs order borne in part by Con and by Ines as beneficiaries of Raffaele's estate in an intestacy or otherwise.[81]
[80] Submissions filed on behalf of Con on 31 March 2022 par 9.
[81] ts 71, 75 (7 April 2022).
Finally, it was submitted that irrespective of whether Tony and John or the estate were made liable to pay costs, Con should not have to await the outcome of the probate proceeding (including Tony and John's counterclaim) before such costs and expenses were paid. Counsel submitted that the application was a 'discrete application' and there was no reason for the payment of the costs of the application to be stayed until after the resolution of the probate and related proceeding.[82]
[82] ts 72 ‑ 73 (7 April 2022); submissions filed on behalf of Con on 31 March 2022 pars 10 - 12; Re Koroneous; Koroneous v Koroneous [19].
Counsel submitted that there is nothing to be decided in the unresolved substantive proceeding that could have any bearing on whether the costs and expenses incurred by Con in the application ought be paid; and the amount of costs and expenses to be paid in respect of the application. Further, to not order that those costs be assessed now and paid forthwith would be to effectively discourage any party contemplating an action to protect the interests of an estate, and in effect provide a large degree of encouragement to those contemplating acting contrary to the interests of an estate.[83]
[83] Submissions filed on behalf of Con on 31 March 2022 pars 11 - 12.

The discretion to make an order inter partes for taxation of costs on a solicitor/client basis is commonly exercised in favour of trustees in proceedings brought by them as to questions in the administration of their trust.[128] It is also commonly ordered in respect of the costs of all parties necessarily incurred in the proceeding, with payment out of estate.[129]
[128] LexisNexis, Civil Procedure Western Australia vol 1 (185-12-19) at [66.1.32], with reference to Re Bradshaw [1902] 1 Ch 436, 450 (1902) 71 LJ Ch 230.
[129] LexisNexis, Civil Procedure Western Australia vol 1 (185-12-19) at [66.1.32], with reference to Re Buckton [1907] 2 Ch 406, 414.
I adopt and apply these principles in determining the question of costs.
I further note that there have been a number of decisions which concern the appointment of an administrator pendente lite, which reasons record the costs orders made. While not all record the considerations weighed in the balance with respect to the costs order, in each instance the order turned on the facts of that particular case.
There are various examples of the court reserving the costs of such an application pending the conclusion of the substantive probate proceeding.
By way of example, I note that in Hempseed v Ward & Anor [2013] QSC 348, three applications came before the court for determination. The parties were agreed an administrator pendente lite should be appointed pursuant to r 638 of the Uniform Civil Procedure Rules 1999 (Qld), and among other things, the applications dealt broadly with a dispute as to the identity of the person to be so appointed. At [61], McMeekin J recorded that the question of costs on all applications would be reserved.
In Vallelonga v Sorgiovanni [2017] WASC 323, prior to the hearing the plaintiff had maintained steadfast opposition to the appointment of a limited administrator. When the matter was called on for hearing, counsel for the plaintiff produced a minute which anticipated the plaintiff being appointed as limited administrator (although counsel maintained she was not to be appointed an administrator at all but simply to be invested with certain powers by the court). In any event, the position of the plaintiff had changed and the hearing concerned whether or not the plaintiff should be appointed as administrator or whether an independent third party should be appointed.[130] In the end, an independent interim administrator was appointed, as had been promoted on behalf of the first and second defendants, and Sanderson M reserved the costs of the application, noting at [15] that costs could be dealt with once the action had been heard and determined.
[130] Vallelonga v Sorgiovanni [3].
In Goodsall v Keen - Estate of Sydney Arthur Keen [2006] NSWSC 1143, the application for an administrator pendente lite was made in circumstances where the deceased was the proprietor of a private hospital, which hospital was conducted through a company. In the end, Campbell J refused the application, finding that there was insufficient reason to appoint an administrator pendente lite on the basis of the evidence before the court. As to the costs of the application, Campbell J at [15] of the reasons for decision recorded as follows:
I will reserve the costs of today's application. I indicate that those costs may be dealt with by the Trial Judge, as the basis upon which the application has been dealt with today emerges from these reasons for judgment.
A different approach was adopted in Ritossa v Ritossa [2022] NSWSC 1083, where an interim administrator was appointed upon the application of the defendant in circumstances where the plaintiff opposed the same, having contended that there was no necessity for, or convenience in, the appointment of an administrator because, the plaintiff submitted, the estate of the deceased, under the plaintiff's informal management, was 'not in jeopardy'.[131] Lindsay J granted the application and in the reasons for decision, comments were made as to the conduct of the plaintiff, who had intermeddled in the affairs of the estate and had sought to pursue his own agenda without accountability.[132] As to the costs of the application, it was ordered that the parties' costs referable to the motion be their respective costs in the proceedings.[133]
[131] Ritossa v Ritossa [2022] NSWSC 1083 [18].
[132] Ritossa v Ritossa [2022] NSWSC 1083 [28] and [29].
[133] An application for leave to appeal was refused with costs: Ritossa v Ritossa [2023] NSWCA 14.
In Re Koroneous; Koroneous v Koroneous (a decision of McMillan J referred to by counsel on behalf of Con), the court considered an urgent application by the plaintiff for the removal of the defendants as administrators. The application was successful and an independent administrator was appointed. In circumstances where there was an obvious conflict as between the interests and duty of the defendants (as administrators and residuary beneficiaries of the estate), and where the plaintiff had made early and reasonable attempts to resolve the proceeding, a personal costs order was made against the defendants. As noted at [20] of the reasons for decision, the court considered that the nature of the dispute as to the appointment of an independent administrator did not in that case fall within the rubric of estate litigation in the true sense, but rather bore the hallmarks of adversarial litigation of a personal nature.
There are also examples of costs having been granted to the applicant from the estate. They include the following.
In Jones v Toomer [2021] WASC 207, the uncontentious application for the appointment of the plaintiffs as joint interim administrators was granted. The second defendant had no objection to the first and second plaintiffs being appointed administrators pendente lite of the estate of the deceased, providing that the plaintiffs undertook not to use any estate funds to support their claims in the proceeding.[134] As to costs, it was ordered that the first and second plaintiffs' costs of the application be paid by the estate as a testamentary expense fixed in the amount of $3,597.78; and the second defendant's costs of the application be paid by the estate as a testamentary expense fixed in the sum of $495.[135]
[134] Jones v Toomer [14].
[135] Jones v Toomer [28].
In Re Kelly [2022] QSC 117, the applicants were granted letters of administration ad colligenda bona of the will of the deceased, pending a grant of probate of the will or further order of the court, limited to preserving, operating and negotiating the restructure and sale of certain of the deceased's corporate and business interests. The reasons for decision suggest that the application was made ex parte and Williams J determined that the costs of and incidental to the application were to be assessed on an indemnity basis and paid out of the estate of the deceased.[136]
[136] Re Kelly [17].
In Rowe v Storer [No 2], McMillan J had cause to consider the costs of an application to appoint an administrator pendente lite which, before the application had been determined, was superseded by a grant of letters of administration. As to such circumstances, McMillan J observed:
[32]Further, I consider that, where a pendente lite application is made by a party in circumstances where it is reasonable to make such an application, and, before the pendente lite application is decided, a grant of letters of administration is made to that party that in effect supersedes the pendente lite application, that party should ordinarily be entitled to his or her costs of the pendente lite application from the estate.

[33]In my view, the defendant acted reasonably in bringing the application. She was unaware at the time how long the informal will proceeding would go on. The real property that formed the main asset in the estate was vacant, and needed to be insured and maintained. There was no suggestion that the application was urgent, but it was appropriate in the circumstances, and was not granted only because the court, in hearing the matter swiftly, enabled a grant of letters of administration making the pendente lite application unnecessary.

The reasons for decisions described above are by no means an exhaustive list of those which address or record a costs outcome in this context, nor do they necessarily reflect all of the possible approaches that may be adopted with respect to costs. They are instructive in so far as they demonstrate that there is not one usual approach to costs in this context, and that context and circumstances inform how discretion is exercised so that what is fair and just between the parties may be achieved.

Disposition

In formulating the appropriate costs order, in light of the respective positions adopted by the parties, it is necessary to consider and determine who (if any) of the parties ought recover their costs of the application and whether costs ought be recovered from any particular party or from the estate as a testamentary expense; when should costs be recovered (that is, forthwith or in any event); on what basis ought costs be recovered; and might quantum be fixed.
After hearing the parties with respect to costs, I consider the following disposition will achieve an outcome that is fair and just between the parties having regard to the circumstances of this case.
First, it is appropriate that Con and Ines recover their costs of the application from the estate; and that Tony and John recover 50% of their costs of the application from the estate.
In so concluding, I am cognisant that Con made the application, among other things, concerned that Raffaele's estate be brought in and conserved, including interests in properties in addition to those referenced in the parties' pleaded claims.[137] While the form of relief sought by Con in the chamber summons filed on 30 April 2021 was not pressed at the hearing of the application, I consider that Con acted reasonably in bringing the application and in the end, an independent interim administrator was appointed on the application made and prosecuted by Con.[138] It is just and fair that Con should recover his reasonable costs of the application.
[137] Farano v Arcaro [52].
[138] Farano v Arcaro [51].
Ines supported Con's application for the appointment of an independent interim administrator to the estate, and pressed that the administrator have the power to take an active role in the proceeding.[139] Benefit was derived from the submissions made on behalf of Ines concerning the scope of power to be vested in the interim administrator.[140] The contribution made on behalf of Ines was valuable and I consider that she should recover her reasonable costs of the application.
[139] Farano v Arcaro [62].
[140] See [34] above, and Farano v Arcaro [62] - [67].
While I understand that Tony and John were not supportive of the appointment before the application was filed, once filed they expressed agreement that an interim administrator ought be appointed. The controversy in the end concerned whether the administrator should be a court‑appointed, independent professional administrator, and the scope of the appointee's powers.
For a number of reasons, including the limited disposable income of the estate and the potential cost of an external administrator, Tony and John argued that they ought to be appointed as joint interim administrators.[141] The concern as to how an independent administrator's costs would be met was a sensible one in circumstances where, as was noted in the primary reasons at [111], no party to this proceeding had deposed to knowledge of Raffaele having held a bank account in his name, there was no evidence that the estate could meet the costs of an interim administrator from cash reserves, and there was a real question as to what property might be available within the estate to be realised to meet such costs after the disposition of the counterclaim. As was acknowledged in the primary reasons, meeting the interim administrator's ongoing costs is not going to be straightforward, and the administrator may be required to carry and may ultimately be at risk in relation to his costs and expenses.[142] It was appropriate that this concern be ventilated and that Tony and John be heard in this regard.
[141] Farano v Arcaro [69] - [70].
[142] Farano v Arcaro [112].
In determining who should be appointed, I was satisfied that Mr Boyle was an appropriate person to be appointed as an administrator and receiver. As was noted at [82] of the primary reasons, this did not mean that I had concluded that there had been some misappropriation of funds or wrongdoing on the part of Tony or John. While I accepted that Tony and John were familiar with the assets of the estate, there remained a conflict as between Con and Ines on the one hand, and John and Tony on the other, with respect to the estate. I concluded that the appointment of an independent third party was appropriate in circumstances where there was conflict, and particularly so where there was controversy as to whether certain property formed part of the estate. While the costs concerns expressed by Tony and John were real and reasonable, I was satisfied that the benefits of appointing an independent administrator and receiver outweighed any adverse cost effect on the estate.[143]
[143] Farano v Arcaro [85].
While the application might have been prosecuted without Tony and John's opposition, I do not accept that an appointment made by the court under s 35 of the Administration Act is an appointment that typically might be made by the consent of the parties reflected in a memorandum of proposed consent orders, without the court having the benefit of affidavit evidence in support of the appointment and submissions.[144]
[144] For example, as discussed at [74] above, in Re Kelly the relevant application was made ex parte to the court.
Further, while Tony and John were not in the end successful in being jointly appointed as interim administrators, they served a useful role as contradictors and some benefit was derived from the submissions made on behalf of Tony and John concerning the scope of power to vest in the interim administrator. I note that I accepted that the broad powers described at [87] to [93] of my primary reasons, which include the power to call in any assets of the estate, should not extend to taking possession of the properties the subject of the counterclaim (that is, the Orchard and 69 Fremantle Road, Gosnells), or to call in income earned by the utilisation of that property.[145] Indeed, some of the concerns expressed by Tony and John as to the scope of the appointee's powers proposed by Con in his chamber summons were shared by Ines, whose submissions filed on 6 August 2021 preferred a narrower approach to the scope of the appointee's powers than did Con's chamber summons.[146]
[145] Farano v Arcaro [95].
[146] Submissions on behalf of Ines filed on 6 August 2021 pars 18 - 19.
On balance, in light of the ambit of the dispute at the hearing of the application, it is appropriate to allow Tony and John to recover 50% of their costs of the application as a testamentary expense. However, the circumstances do not warrant that I accede to Con and Ines' submission that they ought recover from Tony and John their costs of the application. All of the parties had a genuine interest to protect the estate, and it was reasonable in the circumstances that they appear.
Turning to the question of when the costs of the application ought be recovered, I note that in my primary reasons, I expressed a preliminary view that costs ought be reserved pending the conclusion of the proceeding. The preliminary view was in part informed by there being a real question as to what property might constitute the estate after the counterclaim is determined. As was noted at [112] of the primary reasons, there remains a question as to whether the Orchard and 69 Fremantle Road, Gosnells form part of Raffaele's estate. If Tony and John establish their claim of proprietary estoppel, the estate will not necessarily enjoy a charge over those assets and they may not be available to meet estate expenses (such as the administrator's costs and expenses incurred). I understand that Raffaele did not hold an interest in any other property outright, and so I was cognisant that realising Raffaele's interest in property to meet the costs of any party would not necessarily be straightforward.
After hearing the parties with respect to costs, the lack of certainty as to what assets constitute the estate was a circumstance that I had regard to and informed the exercise of discretion. As was noted in the primary reasons at [111], no party to this proceeding had deposed to knowledge of Raffaele having held a bank account in his name, and there was no evidence that if it was ordered that the parties' costs were to be met by the estate as a testamentary expense and such costs be payable forthwith, that the estate could meet such expense from cash reserves.
Given this lack of certainty, it is necessary and appropriate to order that the parties recover their costs in any event from the estate as a testamentary expense (and not from any particular portion or property of the estate). That is, unless the action is settled without costs, those costs are only to be payable after taxation at the conclusion of the proceeding as a testamentary expense.
As to the basis upon which costs ought be recovered, I considered whether they ought be recovered on a party/party basis or on a solicitor/client basis. I proceeded on the basis that the cost scales serve an important function as the basis of 'reasonableness' as to the rates which a legal practitioner may charge and the time reasonably spent to perform certain tasks.[147]
[147] LexisNexis, Civil Procedure Western Australia, vol 1 (185-12-19) at [66.0.3].
Having regard to the affidavit evidence before the court, the submissions filed, the nature of the application and proceeding and the questions for determination at the hearing of the application, it is appropriate that costs be recoverable on a solicitor/client basis.
Finally, I turn to consider whether I can fix costs and I note that judicial officers can be expected, in the usual run of routine matters, to fix the costs payable by reference to the schedule set out in the court's Consolidated Practice Directions at 4.7.1.1, rather than ordering them to be taxed, which schedule had been prepared by reference to the applicable determination of the Legal Costs Committee.[148] The schedule suggests that costs of a special appointment before a judge, which includes drafting the application, conferral, one affidavit, preparation, submissions, appearance and reporting, might be fixed at $2,227 for a hearing of no more than two hours duration.
[148] Consolidated Practice Direction 4.7.1 pars 8 and 9.
All parties considered that the quantum suggested in the court's Consolidated Practice Directions at 4.7.1.1 was too low.
As a judicial officer fixing costs will not engage in a taxation, in most cases it is necessary for counsel to make no more than the briefest submissions as to whether there should or should not be an order for fixed costs, and the amount of the costs.[149]
[149] Consolidated Practice Direction 4.7.1 par 11.
In the end, I was not prepared to fix costs in the amounts quantified by the parties in the draft bills. I was not satisfied that the costs sought to be recovered on a solicitor/client basis, particularly on behalf of Con, were reasonable in circumstances where the application was not a novel one and the legal issues presented were not particularly complex. However, the parties ought be afforded the opportunity to proceed to taxation where the parties will be given an opportunity to justify as being reasonable the amounts incurred and sought to be recovered.

Conclusion and orders

For these reasons, subject to hearing from the parties as to the form of orders, I consider the following orders will achieve an outcome that is fair and just between the parties having regard to the circumstances of this case.
1.The reasonable costs of the plaintiff and the first defendant of and in relation to the plaintiff's application by chamber summons filed on 30 April 2021 be paid out of the estate of the late Raffaele Farano (also known as Raffaelo Farano) as a testamentary expense in any event, to be taxed on a solicitor/client basis if not agreed.
2.Fifty percent of the reasonable costs of the second and third defendants of and in relation to the plaintiff's application by chamber summons filed on 30 April 2021 be paid out of the estate of the late Raffaele Farano (also known as Raffaelo Farano) as a testamentary expense in any event, to be taxed on a solicitor/client basis if not agreed.

Sch A - Orders made on 16 December 2021

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

RW
Associate to the Honourable Justice Strk

31 MARCH 2023