Fatseas v Fatseas bht Basha (No 2)
[2022] NSWSC 487
•26 April 2022
Supreme Court
New South Wales
Medium Neutral Citation: Fatseas v Fatseas bht Basha (No 2) [2022] NSWSC 487 Hearing dates: On the papers; submissions received 12, 19 and 21 April 2022 Date of orders: 26 April 2022 Decision date: 26 April 2022 Jurisdiction: Equity - Probate List Before: Stevenson J Decision: First defendant to indemnify plaintiff in respect of amount referred to at [4]; plaintiff not entitled to amount referred to at [11]
Catchwords: CONTRACTS – heads of agreement executed following mediation – ambit of indemnity – whether expenses incurred by plaintiff recoverable under indemnity – whether quantum meruit available
Cases Cited: Fatseas v Fatseas bht Basha [2022] NSWSC 402
Category: Procedural rulings Parties: Stella Maria Fatseas (Plaintiff/First Respondent)
John Emanuel Fatseas bht Gerard John Basha (First Defendant/Applicant)
Maria Katina Fatseas (Second Defendant/Second Respondent)Representation: Counsel:
Solicitors:
M R Pesman SC with C E Alexander (Plaintiff/First Respondent)
P Wallis (First Defendant/Applicant)
Bay Legal (Plaintiff/First Respondent)
Pryor Tzannes & Wallis (First Defendant/Applicant)
File Number(s): 2017/85791
Judgment
-
The background to this matter is set out in my judgment of 6 April 2022. [1]
1. Fatseas v Fatseas bht Basha [2022] NSWSC 402.
-
I shall use the same abbreviations, and refer to the parties in the same manner, as in that judgment.
-
A number of further issues require resolution.
-
First, Stella, as the former administrator of George’s estate, seeks an order that John pay her $32,846 for expenses incurred by her as administrator.
-
Those expenses were described by Stella’s solicitor, Mr Nathan James, in an affidavit made on 12 April 2022 as follows:
“Since 26 May 2021, the estate has incurred the following costs and expenses in the course of administration of the estate which were not contemplated under the 26 May 2021 Heads of Agreement, including:
a) Five invoices from RSM Australia totalling $25,740.00 (Including GST) for taxation work carried out in the administration of the estate which are still currently outstanding;
b) Two invoices from Cobia Consulting Pty Ltd totalling $4,356.00, of which $2,662.00 has been paid; and
c) Two invoices from All Property Valuations totalling $2,750.00, which have been paid,
Totalling $32,846.00 of which $5,412.00 has presently been paid.”
-
Stella claims these amounts under the indemnity given by John to Stella in the Heads of Agreement:
“John indemnifies Stella in respect of any taxation or other liability that Stella has or may have in respect to the administration of the assets of the estate, including but not limited to any liability arising from or incidental to the Pagewood Property, the Condobolin Property or the Kingsford Property. For the avoidance of doubt, this indemnity does not extend to the legal costs or disbursements of Bay Legal.”
-
RSM Australia is a firm of accountants engaged by Stella on 13 September 2021, that is after the date of the Heads of Agreement, to prepare tax returns on behalf of the estate. That expense is a liability that Stella has “in respect of the administration of the assets of the estate” and is thus the subject of the indemnity in cl 30 of the Heads of Agreement. John must pay this amount to Stella.
-
Cobia Consulting also provided accounting services to the estate. The invoices suggest that the work involved updating balance sheets and updating and reviewing various spreadsheets concerning the financial position of the estate. Mr Wallis, who appeared on behalf of John, submitted that these expenses should be seen as being “legal disbursements of Bay Legal” (Stella’s solicitors) because of a handwritten note “#1160” on one of the Cobia Consulting’s invoices. “#1160” is, evidently, the file number allocated by Bay Legal to its file in relation to Stella. However, whether or not Bay Legal has for its own purposes characterised Cobia Consulting’s fees as a “disbursement”, Cobia Consulting’s invoices suggest it was providing accounting services as I have described. This appears to me to be a liability Stella has incurred “in respect of the administration of the assets of the estate” and is recoverable from John under cl 30 of the Heads of Agreement. John must also pay this amount.
-
Mr Wallis accepted that the final amount, owing to all property valuations was the subject of the cl 30 indemnity.
-
Accordingly, John should pay Stella the amount of $32,846.
-
Stella also seeks to recover from John an amount of $25,215.30.
-
Mr James has described the manner in which that liability was incurred as follows:
“The Estate has also incurred professional costs of Bay Legal in connection with estate administration after 26 May 2021, for which the plaintiff has sought indemnity from the first defendant which total $25,215.30 (GST Incl.) including:
a) Invoice #3547 dated 31 August 2021, which included estate administration costs totalling $6,427.30 (GST Incl.) which has been paid;
b) Invoice #3598 dated 29 September 2021, which included estate administration costs totalling $2,132.90 (GST Incl.) which has been paid;
c) Invoice #3599 dated 29 September 2021, totalling $618.20 (GST Incl.) which has been paid; and
d) Work in progress totalling $16,036.90 (GST Incl.).”
-
Mr James has annexed to his affidavit documents narrating the work done by Bay Legal in relation to these matters. On behalf of Stella, it was submitted that these were “estate administration expenses” rather than “legal fees in these proceedings”.
-
However, there is excluded from the indemnity in cl 30 of the Heads of Agreement “the legal costs or disbursements of Bay Legal”. Implicit in Stella’s argument appears to be the proposition that the last sentence of cl 30 should be construed as relating only to such costs as Stella incurred otherwise than “in respect of the administration of the estate”. But that is not what the exclusion says, and the parties may well have had reason to exclude from the indemnity any of Stella’s legal costs. In any event, it is not appropriate that I embark, at this stage, and in this context, on a further exercise in determining the proper construction of this agreement.
-
Stella seeks to mount an alternative case on a quantum meruit basis.
-
However, as the parties have addressed, in cl 30 of the Heads of Agreement, the ambit of the indemnity to be given by John arising out of the administration of George’s estate, I see no room for the operation of a quantum meruit claim. Stella cannot step outside the terms of the contract to which she has agreed and seek to assert a wider liability in restitution to that for which she bargained.
-
Next, Stella seeks to recover from Maria $31,122 in the circumstances described by Mr James as follows:
“16. Since 26 May 2021, Maria Fatseas has received the following amounts out of the Estate:
a) On 27 May 2021, the sum of $15,000.00 via electronic funds transfer (this was the amount referred to in clause 16(b) of the Heads of Agreement);
b) On 18 August 2021, the sum of $10,000.00 via Trust account cheque;
c) On 31 August 2021, the sum of $10,000.00 via Trust account cheque;
d) On 8 October 2021, the sum of $7,122.00 via Trust account cheque; and
a) On 8 October 2021, the sum of $4,000.00 via Trust account cheque.
17. When excluding the amount in the pre-ceding paragraph (a) above, Maria has received a total amount of $31,122 which I understand was not provided for by the Heads of Agreement.”
-
The amount the subject of Stella’s claim is a total of the amounts referred to in pars 16(b) to (e) of Mr James’ affidavit.
-
Mr Pesman SC’s and Mr Alexander’s submissions for Stella in relation to this claim are:
“19. Since 26 May 2021, Maria has received payments out of the estate, for which she has no entitlement under the [Heads of Agreement]. Those amounts sum to $31,122.
20. Now that Maria has belatedly decided to perform her obligations under the Agreement, it follows that she must repay these funds forthwith.
21. Accordingly, it is appropriate as a corollary for the enforcement of the Agreement that Maria be ordered to repay $31,122.”
-
Although Mr Wallis, inappropriately, offered some submissions on this topic, I have not received any submissions on behalf of Maria in relation to this claim and am not aware whether she, through her separate legal advisers, is aware of the claim.
-
I agree with Mr Pesman and Mr Alexander, for Stella, that “Maria may make submissions separately, if she wishes, but she does not get to make submissions twice”.
-
Stella’s legal advisers should make arrangements for Maria’s separate legal advisers to become aware of the claim, and for them to provide to me, in writing, such response as they wish to make to the submissions that I have set out.
-
As to costs, it is agreed between Stella and John that there should be no costs of these proceedings save in relation to John’s Notice of Motion of 1 April 2022 and Stella’s Notice of Motion of 8 April 2022.
-
Mr Pesman and Mr Alexander said that “Stella reserves the right to make submissions on the costs of each motion at the appropriate time”.
-
The notation to the orders I made on 7 April 2022 recorded that the parties were to confer and agree on a timetable for short submissions as to costs (as well as to the matters to which I have referred earlier in these reasons). If any party wishes to make any further submissions concerning the costs of the two motions to which I have referred, they should do so by 5 pm on 29 April 2022, with submissions not exceeding 2 pages.
-
The parties should liaise with my Associate concerning Maria’s further involvement.
**********
Endnote
Decision last updated: 26 April 2022