Hanna v Hanna
[2010] VSCA 268
•18 October 2010
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2009 3749
| JOSEPH HANNA | |
| Appellant | |
| v | |
| JACK HANNA | Respondent |
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JUDGES: | MANDIE, HANSEN, TATE JJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 11 October 2010 | |
DATE OF JUDGMENT: | 18 October 2010 | |
MEDIUM NEUTRAL CITATION: | [2010] VSCA 268 | |
JUDGMENT APPEALED FROM: | Hanna v Hanna [2009] VSC 188 (Harper J) | |
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ADMINISTRATION AND PROBATE – Intestacy – Dispute concerning appointment of administrator.
CONTRACT – Construction of heads of agreement in relation to appointment of administrator – Whether parties bound to advance appointment of ‘preferred administrator’.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr M J Campbell | Eales & Mackenzie |
| For the Respondent | Mr W F Rimmer | Gavan J Black |
MANDIE JA:
George Moussa Hanna (the deceased) died intestate in Victoria on 19 October 2002. The appellant (defendant), Joseph Hanna, is a brother of the deceased. The respondent (plaintiff), Jack Hanna, is a nephew of the deceased. The estate of the deceased has unadministered real estate in Victoria and also in Lebanon.
Joseph Hanna appeals from an order made by a judge in the Trial Division on 26 March 2009 as follows:
THE COURT DECLARES THAT:
1.The caveat filed by Joseph Hanna in this proceeding on 27 June 2008 has expired.
2.No consent or authorisation is required from Joseph Hanna for an application by ANZ Trustees Limited for letters of administration of the unadministered estate of George Moussa Hanna, deceased.
THE COURT ORDERS THAT:
3.Joseph Hanna be made defendant to this proceeding and that the title to the proceeding be amended accordingly.
4.Joseph Hanna take such steps as may be appropriate or necessary to further the application by ANZ Trustees Limited for letters of administration of the unadministered estate of George Moussa Hanna, deceased.
5.Joseph Hanna pay the costs of the plaintiff of and incidental to the application of the plaintiff made by his summons filed on 24 February 2009.
The substance of the appeal is directed to paragraph 4 of the above orders, being an order in the nature of an injunction requiring Joseph Hanna to further an application by ANZ Trustees Ltd for letters of administration of the unadministered estate of the deceased.
The background to the appeal is as follows. The persons entitled to a share of the deceased’s Victorian assets include three brothers and four sisters of the deceased together with six nephews and nieces (being the children of a brother of the deceased who predeceased him and one of whom is Jack Hanna). For reasons not presently relevant, no person was administering the estate of the deceased as at December 2005 and in that month Joseph Hanna filed one application for letters of administration and Jack Hanna filed another. Each of them objected to and opposed the other’s application. The proceedings were directed to be heard together and came on for hearing on 6 February 2008. On 7 February 2008, terms of settlement were signed by Joseph Hanna, Jack Hanna and a niece of the deceased, Jeanette Hanna, which relevantly provided as follows:
1(a)An independent professional be appointed as administrator of the estate of George Moussa Hanna and ANZ Trustees are the preferred administrator.
(b)It is noted that the unadministered estate of George Moussa Hanna includes real estate in Victoria and Lebanon.
2(This clause provided for each party’s costs of the Supreme Court proceedings to be paid from the estate to a maximum of $25,000 each).
3(This clause provided for the construction of a monument on the deceased’s grave and dealt with the cost thereof and how it was to be borne).
4These Heads of Agreement may be embodied in a fuller and more complete document (or set of documents) if necessary and agreed and Joseph Hanna and Jack Hanna agree to do all things reasonably necessary to give full effect and force to these Heads of Agreement.
5The proceedings in relation to the appointment of Joseph Hanna or Jack Hanna as Administrator are to be adjourned pending application by an independent administrator and Joseph Hanna and Jack Hanna will join in any such further proceeding (if necessary) to enable the appointment of the ANZ Trustees or such other independent professional administrator as may be necessary to give full effect and force to these Heads of Agreement, and once such application by an independent administrator has been made, both proceedings of Joseph Hanna and Jack Hanna shall be discontinued.
On this basis the Court on 2 February 2008 noted that the parties had compromised their disputes, adjourned the applications and made provision for costs upon the filing of notices of discontinuance or withdrawal of the applications.
An affidavit of Jack Hanna sworn on 23 February 2009 in support of the application that led to the orders now under appeal deposed to a number of matters as follows.
In about May 2008, Jack Hanna took steps to have ANZ Trustees Ltd make application for letters of administration.
On 27 June 2008 Joseph Hanna filed a caveat in the Office of the Registrar of Probates in relation to the unadministered estate of the deceased.
By letter dated 6 August 2008 from Holt & Macdonald P/L, solicitors for Joseph Hanna, to ANZ Trustees, those solicitors referred to the fact that their client had executed terms of settlement purporting to give ANZ Trustees the right to seek letters of administration but then indicated that their client proposed to take a different course which they described as obtaining probate of a will of a brother of the deceased whose death had followed the death of the deceased and then their client appointing himself as trustee of the deceased’s estate. On the next day, another firm of solicitors (Macpherson + Kelley) also acting for Joseph Hanna filed a statement of grounds of objection of caveator dated 6 August 2008. The grounds of objection purport to say why Joseph Hanna has a better entitlement to letters of administration than ‘the applicant for the grant, Jack Hanna’. In addition, on 7 August 2008, Joseph Hanna personally signed and filed a caveator’s grounds of objection stating that he, as a brother of the deceased, had a better right to a grant of representation than Jack Hanna who was only a nephew. I interpolate here that the letter from Joseph Hanna’s solicitors, the caveat lodged by his second firm of solicitors and his own caveat all took a position contrary to that provided for in the Heads of Agreement, namely, the appointment of an independent professional as administrator (not to mention with a preference for ANZ Trustees as that administrator).
On 7 August 2008, Macpherson + Kelley filed with the Registrar of Probates a summons for directions but the summons was never served on Jack Hanna or his solicitors but was apparently served on ANZ Trustees.
On 18 August 2008, ANZ Trustees wrote to Jack Hanna’s solicitors stating that it had instructed solicitors to apply for letters of administration but had received the letter from Holt & Macdonald (referred to above) and that ANZ Trustees ‘will not proceed with its application until the parties abide by the terms of the Settlement’.
On 19 August 2008, the summons for directions issued by Macpherson + Kelley came on for hearing before Hargrave J. A solicitor appeared for ANZ Trustees but there was no appearance for Joseph Hanna and the summons was adjourned sine die and his Honour noted in other matters that Joseph Hanna’s solicitor had filed a notice of ceasing to act that day.
On 5 September 2008, Jack Hanna’s solicitors wrote to Holt & Macdonald summarising the relevant history of the matter and requiring Joseph Hanna to consent to the appointment of ANZ Trustees as administrator and to withdraw his caveat, failing which application would be made for the removal of the caveat together with costs on an indemnity basis.
By letter dated 9 October 2008, the solicitors for ANZ Trustees advised the solicitors for Jack Hanna that ‘until such time that all parties are in agreement that ANZ Trustees should proceed to lodge the application for letters of administration, our client will not take any further action in relation to the estate’. On the same day the solicitors for ANZ Trustees wrote to Holt & Macdonald stating that their client’s lodging of the caveat was clearly in breach of the terms of settlement and that their client would not take any further action until the beneficiaries resolved their issues and their client withdrew his caveat. Apparently the solicitors for ANZ Trustees had received a letter from Holt & Macdonald dated 15 August 2008 in relation to which they stated that ‘until our client obtains letters of administration … our client will not incur any costs in relation to ascertaining whether or not as administrator of the estate … it has standing to make any application in Lebanon relating to assets held in Lebanon’ and ‘[w]ithout knowing the process in Lebanon, our client cannot make any commitment as to the administration of the assets in Lebanon’ but ‘[w]e note however that our client has no intentions of delaying the administration of estate once letters of administration have been obtained’.
Nothing further having been heard from Joseph Hanna or any solicitors acting on his behalf, on 23 January 2009, Jack Hanna’s solicitors wrote to Holt & Macdonald advising that they proposed to file and serve a summons and supporting affidavit to bring the matter before the Court and asking if they had instructions to accept service of process. Holt & Macdonald replied by letter dated 27 January 2009 that ‘[w]hilst we have had instructions to advise Mr Joseph Hanna in relation to the Estate of George Hanna, our instructions are specific that this firm will not be involved in any litigation’. The solicitors went on to say that:
Accordingly, you should serve Mr Hanna direct. We are not at liberty to divulge [his] current address.
As a result, a summons was filed by Jack Hanna’s solicitors on 24 February 2009 and made returnable on 12 March 2009. It came on for hearing before the judge in the Practice Court on 26 March 2009. Jack Hanna and Joseph Hanna were each represented by counsel and on that day the judge gave reasons for judgment.[1]
[1]Hanna v Hanna [2009] VSC 188.
After referring to the factual background, his Honour said in substance that the existence of the terms of settlement or Heads of Agreement was not disputed and that the principal area of dispute was ‘whether a reference or references in the Heads of Agreement to the position of ANZ Trustees as the preferred administrator should now result in declarations and orders that would advance the appointment of that company as the administrator … ‘.[2]
[2][2009] VSC 188, [7].
His Honour said that it was submitted on behalf of Jack Hanna that properly construed the Heads of Agreement should be read as a statement in effect binding upon the parties that ANZ Trustees is the preferred administrator and the parties to the Heads of Agreement are to act in such a way as to advance the appointment of that company as administrator unless that company were to decline appointment. His Honour said that was, in his opinion, the correct construction. His Honour said that the reference to ANZ Trustees as the preferred administrator bound the parties to the Heads of Agreement ‘certainly to the extent that unless either ANZ Trustees declines appointment or unless material is put before the court indicating that for some sufficient reason ANZ Trustees should not be appointed, the appointment of that company should be advanced by the parties to the Heads of Agreement’.[3]
[3][2009] VSC 188, [11].
His Honour then continued and concluded as follows:[4]
[4][2009] VSC 188, [11]-[21].
There is no material before the court presently (and none in the 13 months that has elapsed since the Heads of Agreement were signed has been put before the court) to indicate either that ANZ Trustees has declined appointment or for some reason such appointment would be inappropriate.
As I understand the submissions put upon behalf of Mr Joseph Hanna by Mr Willis - who, it seems to me, has put forward everything that can be properly said on behalf of his client - the qualification his client has to a successful application by ANZ Trustees for appointment as administrator is that the company has not unequivocally stated that if appointed, it would be in a position adequately and appropriately to administer that part of the estate of George Hanna which is situated in Lebanon.
The evidence being as I have described it, it seems to me that there is no basis upon which the court could now say that the status of ANZ Trustees as the preferred administrator, a status given to it by the parties to the Heads of Agreement, should no longer obtain. In other words, there is nothing before the Court to indicate any reason why ANZ Trustees should not be now, as it was on 7 February 2008, the preferred administrator.
I have no reason to think that if an appointment were made of that company by this Court, the authorities in Lebanon would not accord the company appropriate standing or would otherwise inhibit the company from properly carrying out its duties as administrator in relation to that portion of the estate which is in Lebanon.
If, as circumstances turn out, it were to appear that ANZ Trustees could not appropriately and efficiently administer the Lebanese assets of the estate, then as I apprehend the duties of the company in those circumstances, it would seek the appointment of an administrator that was in a position to appropriately and properly administer the Lebanese estate about which the parties are concerned.
It has been suggested (largely in material or in statements put to me from the Bar table) that Mr Joseph Hanna has sought in the 13 months since 7 February 2008, improperly to hinder the appointment of an appropriate administrator of George Hanna's estate and thereby to adversely effect the beneficiaries of that estate. I make no findings in relation to those matters. It is I think sufficient for me to say that, in my opinion, Mr Joseph Hanna has had ample opportunity to put before the Court material to the effect that ANZ Trustees are either unwilling to be appointed or, if appointed, would be unable to execute its duties as it should.
There is no material, as I have said, to that effect, and accordingly it seems to me now appropriate that the Court take what steps are properly open to it to advance the appointment of ANZ Trustees as the administrator of the unadministered estate of George Hanna.
In that respect, it seems to me that it is appropriate that the court declare first, that the caveat filed by Joseph Hanna in this proceeding on 27 June 2008, has expired, and secondly, that no consent or authorisation is required from Joseph Hanna for an application by ANZ Trustees Limited for letters of administration of the unadministered estate of George Hanna.
It also seems appropriate to me to order, first, that Joseph Hanna be made a defendant to this proceeding and that the title to the proceeding be amended accordingly. Secondly, that Joseph Hanna takes such steps as may be appropriate or necessary to further the application by ANZ Trustees Limited for letters of administration of the unadministered estate of George Hanna.
The plaintiff seeks, in addition to orders generally in the form of those I have already pronounced, an order that Mr Joseph Hanna be restrained from taking any step in a court or tribunal or otherwise to oppose, prevent or delay any application by ANZ Trustees Limited. I have not heard the parties on that particular application. It seems to me unnecessary to specifically restrain Joseph Hanna in the terms put forward by the plaintiff given that he will be under an obligation to assist in the application. I would expect Mr Joseph Hanna to obey that order and if he does, then the question of any restraint will not arise.
There remains the question of costs. In my opinion, it is appropriate that Joseph Hanna pay the costs of the plaintiff of and incidental to this application which was made by the plaintiff by his summons filed on 24 February 2009.
The appellant appeals on the following grounds:
1.That the learned trial judge erred in his construction of the Heads of Agreement between the appellant and the respondent made 7 February 2008 in concluding that:
a.ANZ Trustees Ltd was the agreed appointee of the parties as administrator of the Estate of George Moussa Hanna (deceased), subject only to its consent or other proper ground preventing its appointment;
b.the appellant had not provided sufficient evidence that ANZ Trustees had not yet demonstrated that it was an appropriate appointment as administrator of the Estate of George Moussa Hanna.
2. The learned trial judge should have concluded that:
a.On the correct construction of the Heads of Agreement, the appellant was at liberty to withhold his consent to the appointment of ANZ Trustees;
b.In addition or instead, on the correct construction of the Heads of Agreement, the appellant was at liberty to withhold his consent to the appointment of ANZ Trustees on proper grounds;
c.That the refusal of ANZ Trustees to confirm to the appellant that it was able to deal with the real property of the Estate situated in Lebanon justified the appellant in withholding his consent to the appointment unless and until ANZ Trustees confirmed that it could deal with those assets;
d.That the plaintiff’s application was unnecessary and should be dismissed and the plaintiff should pay the appellant’s costs of the application.
In addition to the notice of appeal, Joseph Hanna applies by summons filed 8 July 2009 for an order that the Court of Appeal receive fresh evidence. This application is supported by a number of affidavits sworn by Joseph Hanna.
In his first affidavit sworn 6 July 2009, Joseph Hanna says, in substance:
·The estate contains 7 properties in Lebanon and his concern has always been that they should be properly handled, efficiently and inexpensively.
·ANZ Trustees was only the ‘preferred appointee’ and that ‘before I was willing to confirm their appointment, I needed assurance from ANZ Trustees that they could do the job’.
·Joseph Hanna had a number of communications with ANZ Trustees and its representatives in an endeavour to find out whether they could administer the properties in Lebanon but that his enquiries were either ignored or not meaningfully answered. These communications took place from early 2008 to October 2008.
·After he was served with the summons by Jack Hanna, he obtained an adjournment (over objections by the other side). He then located a Melbourne solicitor of Lebanese descent who was prepared to act as administrator and this was proposed to Jack Hanna’s solicitors but the case started before the judge on 26 March 2009 before he had time to prepare an affidavit for the hearing and his barrister had to proceed with only the papers filed on behalf of Jack Hanna.
·The response to his proposal that an alternative administrator be appointed was dealt with by a letter from Jack Hanna’s solicitors dated 26 March 2009 in which they rejected his proposal, mentioning that the same person had been mentioned but rejected when the Terms of Settlement were under discussion and that ANZ Trustees had been selected as a compromise by the negotiating parties. The solicitors for Jack Hanna said that they would be relying on the Terms of Settlement.
In a second affidavit sworn 7 July 2009, the purpose of which Joseph Hanna says is to clarify why by the exercise of reasonable diligence such evidence could not have been discovered in time to be used in the original trial, he further says that it is reasonably clear that if the evidence had been available at the trial an opposite result would have been produced. Joseph Hanna says that if the material in his first affidavit had been before the judge there would have been an opposite result. He says that his first affidavit shows that rather than doing nothing he was busy attempting to get the appropriate assurance from ANZ Trustees which they had failed to give. The appellant contends that the evidence sought to be led is reasonable and credible and would have produced an opposite result.
In an outline of submission dated 1 October 2009 and personally signed by Joseph Hanna, the appellant submitted that on a proper construction of the Heads of Agreement they were subject to the parties being satisfied as to ANZ Trustees’ capacity to undertake the task. It was submitted that it was an implied condition that the independent professional administrator could deal with the Lebanese assets efficiently and expeditiously. It was further submitted that the Court of Appeal should in its discretion receive the further evidence and that this would not put the respondent to any forensic disadvantage. On the hearing of the appeal, Joseph Hanna appeared by counsel and the submission was put a little differently. It was not submitted that it was an implied condition of the Heads of Agreement that the independent professional administrator could deal with the Lebanese assets efficiently and expeditiously. Rather it was submitted that, as a result of the parties’ use of the word ‘preferred’ in clause 1(a) of the Heads of Agreement, the Heads of Agreement should be construed as conferring a right upon each of the parties to withhold their consent to the appointment of ANZ Trustees as administrator (or, at least, a right to object to such appointment). In that regard it was further submitted that Joseph Hanna was therefore entitled to withhold his consent to the appointment of ANZ Trustees as administrator, alternatively to object to such appointment, on the ground that ANZ Trustees had failed to give any assurance, in substance, that it could deal with the Lebanese assets efficiently and expeditiously, as requested by Joseph Hanna. It was submitted that there were no words such as ‘must’ or ‘shall’ indicating that the parties were to be ‘bound’ to support the appointment of ANZ Trustees.
In relation to the application to adduce fresh evidence, it was submitted on behalf of Jack Hanna that the proposed new evidence could have been given at the hearing on 26 March 2009 by the exercise of reasonable diligence and that in any event it would not have produced an opposite result. In that regard, counsel for Jack Hanna referred to the fact that his client’s application had come on 14 days before it was heard and that, by reason of its adjournment, Joseph Hanna had had sufficient time to file the material that was now sought to be led. It was also submitted that, insofar as the additional evidence related to conversations, it was inappropriate to admit such evidence to be adduced in the absence of an opportunity to answer it.
In relation to the issues on the appeal itself, it was submitted that the construction of the Heads of Agreement urged by Joseph Hanna would leave an unfettered discretion to him to oppose the appointment of ANZ Trustees and, in effect, that was not a reasonable construction of the Heads of Agreement.
It was further submitted that, upon a proper construction of the Heads of Agreement as a whole and by reference to the circumstances in which they were signed, the parties must have intended to bring finality to the administration of the estate. There was a clear contractual obligation on the parties to join in a proceeding (if necessary) to advance the appointment of an administrator, and, in the first instance, ANZ Trustees. The appointment of any other administrator was only contemplated by the Heads of Agreement if it proved ‘necessary’ to do so in order to give full force and effect to the agreement. It was submitted on behalf of Jack Hanna that the appointment of another administrator was not ‘necessary’ simply because one party was not satisfied with the capacity of ANZ Trustees to undertake the task.
Dealing first with the application to lead fresh evidence, in my opinion, the appellant has failed to demonstrate that such evidence could not with reasonable diligence have been produced at the hearing below. In any event, I am satisfied that it would not have produced an opposite result. That is because of my conclusion in relation to the proper construction of the Heads of Agreement which I will set out below. In addition, it is because, in my opinion, Joseph Hanna’s lack of satisfaction with the capacity of ANZ Trustees to administer the Lebanese assets together with the failure of ANZ Trustees to provide any assurance in relation thereto was and remains insufficient to establish the necessity to appoint an alternative administrator. I consider it to have been reasonable of ANZ Trustees not to expend moneys investigating the position in relation to the Lebanese assets until appointed as administrator (and I note that counsel for Joseph Hanna conceded that ANZ Trustees had not been unreasonable in taking this position). I would refuse leave to adduce fresh evidence but, even if leave were granted, I do not think that the ultimate result would be affected.
In the end, the propriety of the orders made below, in particular the injunction in paragraph 4, depends upon the proper construction of the Heads of Agreement. Indeed that is the primary issue that was debated on appeal. In my opinion the judge was correct in his construction of the agreement. The parties bound themselves to advance the appointment of ANZ Trustees as administrator and, in that sense, the parties bound themselves to treat ANZ Trustees as the ‘preferred’ appointee. It is true, as the appellant submitted, that the words ‘must’ or ‘shall’ do not appear in the Heads of Agreement but, as the respondent pointed out, clause 5 provides that the parties ‘will’ join in the proceeding (if necessary) to enable the appointment of ANZ Trustees. The interpretation that gives effect to what, in my view, was the purpose and intent of the parties, and that accords with common sense, is that, unless it became apparent that the appointment of an alternative administrator was ‘necessary’, it was the obligation of the parties to advance the appointment of ANZ Trustees. The construction advanced by the appellant gives minimal efficacy to what after all were terms of settlement concluded in order to avoid expensive litigation.
Finally, there was no evidence before the Court below (and, even if, contrary to the view I take, the Court should take into account the ‘fresh evidence’, there is still no evidence) that the appointment of an alternative administrator is ‘necessary’.
In the foregoing circumstances, I consider that the orders made by the judge were correct - save that I would favour the variation of the injunction by the insertion of the words ‘until further order’ in order to allow for the contingency that, for some reason, circumstances might change in relation to the question of ‘necessity’ referred to above. Counsel for Jack Hanna accepted that such a variation would be appropriate.
For the foregoing reasons, I would vary paragraph 4 of the order below to that extent, but otherwise dismiss the appeal.
HANSEN JA:
I agree.
TATE JA:
I also agree.
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