In the matter of the estate of Wendy Elizabeth Hall

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
IN ITS PROBATE JURISDICTION
TRUSTS, EQUITY AND PROBATE LIST

S PRB 2023 34679

IN THE MATTER of the Estate of WENDY ELIZABETH HALL (deceased)

BETWEEN:

GRAHAM TREVOR HALL	Plaintiff
v
KARINNA JOY MARONEY	Caveator

---

JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	14 November 2024
DATE OF JUDGMENT:	17 December 2024
CASE MAY BE CITED AS:	In the matter of the estate of Wendy Elizabeth Hall
MEDIUM NEUTRAL CITATION:	[2024] VSC 781

---

PROBATE — Application to strike out caveat seeking to pass over executor — Whether caveator has standing — Supreme Court (Administration and Probate) Rules 2014 (Vic), r 8.02 — Caveator has potential Part IV claim under Administration and Probate Act 1958 (Vic) and is the beneficiary of a discretionary family trust — Whether contingent interest in the estate is sufficient to confer standing — No real prospect of establishing that passing over named executor would result in a material enlargement of the estate — Insufficient evidence adduced despite ample time and opportunity — Mataska v Brown [2013] VSC 62, distinguished — Caveator lacks standing — Caveat struck out.

EXECUTORS AND ADMINISTRATORS — Passing over named executor — Allegations of ill-health, unsound mind, and conflict of interest — Historical diagnosis of dementia — Recent medical evidence of cognitive capacity and fitness to act — Mini-Mental State Examination score 30/30 — Presumption of competence following VCAT revocation order — Alleged financial mismanagement and trust dealings — Analysis of transactions shows no misappropriation of estate assets — Executor’s conduct and hostility towards caveator — Family conflict insufficient to impede administration of estate — No prima facie case established — Application dismissed.

PRACTICE AND PROCEDURE – Summary dismissal — Civil Procedure Act 2010 (Vic), ss 63 and 64 — Prima facie case requirement — Allegations of executor’s unsuitability based on ill-health, cognitive impairment, conflict of interest, financial mismanagement and hostility — Whether caveator’s objections disclose a real prospect of success — Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 47 VR 27, referred to — Evidence establishes that there are no grounds for passing over the executor — Whether matter should proceed to trial under s 64 of the Civil Procedure Act 2010 (Vic).

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms C Sparke KC of counsel	G E Law Services
For the Caveator	Ms E Konstantinou of counsel	Aitken Partners

HER HONOUR:

Introduction and background

This proceeding concerns the administration of the estate of the late Wendy Hall (‘Wendy’).[1] Wendy passed away on 12 August 2023, aged 79 years. The plaintiff, Graham Hall (‘Graham’), is Wendy’s surviving spouse and the sole executor and beneficiary under Wendy’s last will, dated 23 July 2012 (‘will’). Graham, who is also now aged 79, was married to Wendy for 42 years prior to her death.
[1]For ease of reading, first names are used for the parties and other family members. No disrespect is intended.

Wendy and Graham headed a blended family. Wendy brought a daughter, Karinna, into the family. Graham brought two children, Kelly[2] and Troy, into the family. Together, Wendy and Graham had one child, Bryce.
[2]It seems that Kelly is estranged from the family.

Graham, who is now largely retired, had his own wholesaling business, supplying goods to pharmacies. After that business was sold or wound up, he operated a business selling products at weekend markets, primarily Dandenong market. Prior to her losing capacity as a consequence of dementia in or about April 2021,[3] Wendy provided administrative and bookkeeping support for Graham’s businesses. She also managed the couple’s household finances.
[3]It is not clear from the evidence as to precisely when Wendy lost capacity. It seems that the parties agree that Wendy lost capacity no later than April 2021. It is not clear whether the parties agree that Wendy lost capacity only from April 2021, given that there is reference in some of the reports to Wendy being diagnosed with dementia in late 2020. For the purpose of the financial analysis I undertake later in these reasons, I have adopted a conservative approach, and have assumed that Wendy no longer had capacity as at 1 January 2021.

Wendy was also the director of Lendor Pty Ltd (‘trustee’), the trustee of the Wendy Hall Family Trust (‘trust’), a discretionary trust established in December 2000. Wendy was the appointer of the trust, and Wendy, Graham and their children are the beneficiaries of the trust. The main asset of the trust is a residential property at Inverloch (‘Inverloch property’), although it seems from the evidence that part or all of Wendy’s share of the proceeds from the sale of an investment property in Bentleigh (‘Bentleigh property’)[4] may have been deposited by Bryce into a bank account held by the trust (‘trust bank account’).
[4]And possibly nearly half of Graham’s share of the proceeds of sale.

The principal assets of Wendy’s estate (‘estate’) include a refundable accommodation bond valued at $350,000, a Bank of Melbourne account containing $182,000, and shares in the trustee.[5]
[5]While this issue is not capable of resolution in the context of the current application, Graham, through his accountant and attorney, Mr Dominic Boffa, contend that any part of Wendy’s share of the proceeds of sale of the Bentleigh property which have been deposited in the trust’s bank account or have otherwise been retained by Bryce should also form part of the estate.

At the time of Wendy’s death, Wendy’s financial affairs were being managed by Bryce as the holder of Wendy’s enduring power of attorney (‘EPOA’). On 20 August 2021, Bryce became the director of the trustee. However, under the terms of the will, the shares in the trustee and the right to be appointed as the appointor of the trust passes to Graham.

There is no dispute about the validity of the will. Pursuant to the terms of the will, had Graham pre-deceased Wendy, the estate would have been distributed equally among Karinna, Bryce and Troy, Kelly having been excluded from Wendy’s estate under the will. Apparently, Graham executed a will in similar terms (‘mirror will’). However, as Wendy pre-deceased Graham, the entire estate passed to Graham. He is also now the sole registered proprietor of the family home in Langwarrin by way of survivorship.

In May 2021, Wendy moved into a residential aged care facility as her health declined. Wendy’s departure from the family home hit Graham hard. Then followed increasing conflict between Graham on the one hand and Bryce and Karinna on the other hand, regarding, among other things, Graham’s hoarding habits.

In September 2022, Bryce made an application to the Victorian Civil and Administrative Tribunal (‘VCAT’) for the appointment of a guardian and administrator for Graham, on the basis that Graham lacked capacity to make personal and financial decisions for himself (‘VCAT proceeding’). On 14 November 2022, VCAT made orders appointing the Office of Public Advocate (‘OPA’) as Graham’s guardian, and professional administrators as Graham’s administrators (‘administration order’). At around this time, Graham moved into supported accommodation, and had his driver’s licence taken from him.

The relationship between Graham and the administrators was fraught,[6] and in September 2023, with the support of his current solicitors and the OPA, Graham was successful in having the administration order revoked, on the condition that he executed a power of attorney with respect to financial matters in favour of his long time accountant, Mr Domenic Boffa. Bryce has applied for a rehearing of the decision of VCAT to revoke the administration order (‘revocation order’). The rehearing application has not yet been heard by VCAT.
[6]That much is evident from the reports in evidence prepared by Suzanne Lyttleton Lawyers Pty Ltd (‘administrators’) to VCAT in September 2023.

Prior to the revocation order, in July 2023, Graham moved back to his home, and remains living there. On or about 11 August 2023, during Wendy’s final days, Bryce, Karinna and Troy made an urgent (and unsuccessful) application to this Court for a statutory will to be made leaving Wendy’s assets to Bryce, Karinna and Troy in equal shares, thus excluding Graham from the estate entirely.

On 14 December 2023, Karinna lodged a caveat seeking to prevent the grant of probate of the will to Graham. Karinna contends that Graham is unsuitable to act as executor on the grounds of ill-health, alleged financial mismanagement, conflicts of interest, and bad character. She contends that Graham’s personal circumstances and conduct render him incapable of discharging the fiduciary obligations required of an executor and, as such, he should be passed over as executor.

On 15 December 2023, Graham filed an originating motion seeking a grant of probate of the estate. On 9 January 2024, a notice pursuant to r 8.05 of the Supreme Court (Administration and Probate) Rules 2014 (Vic) (‘Probate Rules’) was served upon Karinna, requiring her to file and serve detailed grounds of objection and any supporting evidence.

Karinna’s grounds of objection filed on 8 February 2024 (‘grounds’) set out her position with respect to the issue of standing and her objections to the grant of probate of the will to Graham. In the grounds Karinna contends that she has standing by reason of the following matters:

(a) that Wendy owed a moral duty to provide for her proper maintenance and support pursuant to Part IV of the Administration and Probate Act 1958 (Vic) (‘Act’); and

(b) her status as a general beneficiary of the trust, which is controlled by Graham in his capacity as executor.

Karinna also asserts that Graham is unsuitable to act as the executor of the estate, and should be passed over as executor for the following reasons:

(a) Graham is suffering from ill-health and is of unsound mind, rendering him incompetent to take probate;

(b) Graham’s dual role as executor and as controller of the trustee creates a conflict of duty and interest;

(c) Graham’s alleged mismanagement of Wendy’s assets, including cash withdrawals from Wendy’s bank accounts totalling $261,783.03, which warrants independent investigation; and

(d) Graham’s history of hostile and abusive conduct demonstrates his unsuitability for fiduciary responsibilities.

In the grounds, Karinna referred to a number of physical health conditions suffered by Graham, which are not necessary to refer to in detail here, save that:

…
(x) In or about November 2021:
(A) the plaintiff was diagnosed with Alzheimer’s dementia;
(B)an MRI brain scan revealed minor atrophy with mild to moderate chronic vascular changes;

(C)      the plaintiff commenced taking memantine.
...
(xiv)Since at least in or about October 2022, in the opinion of Dr Karen Bird, a neuropsychologist, the plaintiff:
(A)      has suffered from dementia; and
(B)      has suffered from a hoarding disorder;

(xv) Shortly after 14 November 2022, the plaintiff moved into respite care.
(xvi)Since at least in or about May 2023, in the opinion of Dr Leonie Keall, a neuropsychologist, the plaintiff has suffered from vascular cognitive impairment.
(xvii)In May 2023, the plaintiff was diagnosed with overt type II diabetes by his Endocrinologist Dr Mark Tang Fui.

(xviii) The plaintiff is in receipt of a level 3 home care (aged care) package.

Karinna alleged that Graham is of unsound mind, referring to the diagnosis of dementia. The grounds provide further in relation to Graham’s cognitive capacity:

(i)Since at least in or about March 2022, in the opinion of the plaintiff’s treating general medical practitioner, Dr Nadir Nahem, the plaintiff has been unable to make any decision by himself relating to lifestyle, medical and financial matters.
(ii)Since at least in or about October 2022, in the opinion of Dr Karen Bird, a neuropsychologist, the plaintiff:
(A) has poor insight into the concerns of family and professionals;
(B)has executive function and memory difficulties that interfere with decision making and functional abilities necessary to manage his lifestyle and financial affairs;
(C)has a vague understanding of his estate and difficulty determining how to apportion gifts to potential beneficiaries

(iii)Since at least in or about May 2023, in the opinion of Dr Leonie Keall, a neuropsychologist, the plaintiff:
(A) The plaintiff has cognitive deficits;
(B)The plaintiff has deficits in attention and some executive abilities;
(C)The plaintiff requires support in making decision regarding his financial affairs;
(D)The plaintiff requires the assistance of a supportive administrator to be fully informed and implement his decision; and
(E)The plaintiff does not have decision making capacity to manage his own personal affairs.

In support of her claim that Graham has a conflict of duty and interest, Karinna provided the following particulars in the grounds:

Grounds for investigation in relation to the dissipation of the proceeds of sale of the Bentleigh property
(i)On or about 9 October 2020, the deceased appointed her son, Bryce Hall, as her attorney under an enduring power of attorney.

(ii) By at least in or about April 2021:
(A)the deceased was severely affected by dementia, and did not have capacity to manager [sic] her financial lifestyle and medical affairs; and
(B)the deceased and the plaintiff did not have sufficient funds to pay for the deceased to receive care.

(iii)Prior to in or about May 2021, the plaintiff and the deceased were proprietors of a property at Unit 1, 21 Hobart Street, Bentleigh (the Bentleigh property).
(iv)The Bentleigh property had been acquired from the estate of the deceased’s mother.
(v)On 20 April 2021, the plaintiff executed an auction authority agreement with Jellis Craig. By this date, the deceased did not have decision making capacity to understand or sign the agreement.
(vi)On or about 20 May 2021, the Bentleigh property was sold for $1,100,000 by the plaintiff and by Bryce Clifford Hall, acting as the deceased's attorney.
(vii)Half of the net proceeds of sale of the Bentleigh property were paid into an account accessible by the plaintiff (the joint account).
(viii)Between 27 July 2019 and 10 November 2022, the plaintiff made cash withdrawals of $217,403.03 (the withdrawn sum) of which $82,975 was from joint accounts and $44,380 from the Wendy Hall Family Trust account.
(ix)The plaintiff has only been able to give partial explanations for withdrawals and expenditure of the withdrawn sum from the joint account.
(x)There are grounds for careful investigation of any claims that the deceased's estate may have against the plaintiff for the dissipation of the withdrawn sum, such that the legal personal representative of the deceased is under a duty to investigate the plaintiff's conduct.

Grounds for investigation in relation to the use of trust income
(xi)Lendor Pty Ltd, in its capacity as trustee of the Wendy Hall Family Trust, is proprietor of a property at 22 Norman Road, Inverloch (the Inverloch property).
(xii)Lendor Pty Ltd derives an income stream from renting out the Inverloch property (Inverloch property income).
(xiii)In or about September 2021, the plaintiff depended on the Inverloch property income.
(xiv)At the time that the plaintiff was relying on the Inverloch property income:
(A) The deceased lacked decision-making capacity; and
(B)The plaintiff was not authorised to make distributions on behalf of the Wendy Hall Family Trust.

(xv)There are grounds for careful investigation of any claims that the Wendy Hall Family Trust may have against the plaintiff for the use of the Inverloch income stream, such that the trustee of the Wendy Hall Family Trust is under a duty to investigate the plaintiff’s conduct.
(xvi)If a grant of probate is made to the plaintiff, the plaintiff may be in a position to control decisions made by Lendor Pty Ltd in its capacity as a trustee of the Wendy Hall Family Trust.

Conclusion
(xvii)If a grant of probate is made to the plaintiff, the plaintiff will not undertake an investigation of his own conduct and has an interest in that conduct not being investigated.
(xviii)In the circumstances, the plaintiff has a conflict between his duty to investigate his own conduct, and his interest in his own conduct not being investigated.

In support of her claim that Graham is of bad character, Karinna provided the following particulars:

The plaintiff is irresponsible with money
(i) The plaintiff has a preference for transacting in cash.
(ii)The plaintiff has a habit of making large cash withdrawals where he has control of bank accounts.
(iii)The plaintiff stores cash in his home in un-labelled envelopes, between other items, and mixed in with stock and personal items.
(iv)Where the plaintiff made large cash withdrawals, the plaintiff has not been able to account for those withdrawals.
(v)The plaintiff purports to operate a business by a trading entity, Graham Hall Brokerage Pty Ltd.

(vi) The plaintiff does not keep accurate records or a detailed inventory.
(vii)As at in or about December 2022, the aged debtors for the business were $87,443.77.
(viii)In the circumstances, it may be inferred that the plaintiff is irresponsible with money.

The plaintiff is not responsible with property
(ix)Prior to her death, the plaintiff and the deceased were joint proprietors of a property at 42 Appleberry Avenue, Langwarrin.
(x)The deceased and the plaintiff lived at the Langwarrin property from 2006 to 2021.
(xi)In or about May 2021, the deceased was moved out of the Langwarrin property and into aged care.
(xii)Since May 2021 and up until the plaintiffs respite admission in November 2022, the plaintiff lived alone at the Langwarrin property, and had been solely responsible for the upkeep and condition of that property.

(xiii) Since at least September 2022:
(A)the extent of the hoarding and rubbish collected by the plaintiff at the Langwarrin property has posed serious health, safety, insurance, and fire risks; and
(C)the Langwarrin property has been the subject of a clean-up notice issued by Frankston City Council.

(xiv)Since at least in or about November 2022, the Langwarrin property has been un[in]habitable and unsafe.
(xv)In the circumstances, it may be inferred that the deceased is not responsible with the management of property.

The plaintiff is disloyal and has acted in bad faith
(xvi)The plaintiff has two children from a previous marriage, Troy Hall and Kelly Healey.

(xvii) The plaintiff and the deceased have a child, Bryce Hall.
(xviii)In or about 23 July 2012, the plaintiff and the deceased made mirror wills.
(xix)If the mirror wills were not revoked, on the death of the first to die of the plaintiff and the deceased, the survivor would receive the whole of the estate.
(xx)If the mirror wills were not revoked, on the death of the survivor of the plaintiff and the deceased:
(A)By reason of clause 6 of the mirror wills, the deceased’s children, being the caveator and Bryce Hall, would share equally in the deceased’s properties which had been acquired from the estate of the deceased's mother;
(B)By reason of clause 11 of the mirror wills, each of Troy Hall, the caveator and Bryce Hall would share equally in the residuary estate.

(xxi) The deceased died with her mirror will unrevoked.
(xxii)Since at least in or about November 2022, the relationship between the plaintiff and the caveator has deteriorated significantly, and the plaintiff has limited his contact with the caveator.
(xxiii)Sometime after November 2022, the plaintiff changed his will, such that its terms do not reflect the terms of the mirror will, and the plaintiff and Bryce Hall have been excluded as beneficiaries from the deceased's will.
(xxiv)At the time that the plaintiff changed his will, the deceased lacked capacity to make a new will.

(xxv)   In the circumstances, the plaintiff is disloyal and has acted in bad faith.
The plaintiff is hostile and abusive
(xxvi)During the period from in or about November 2022 to date, the plaintiff has been hostile and abusive towards the caveator, including by:
(A)      Threatening to punch the caveator in the throat;
(B)      Threatening to shoot the caveator;
(C)      Accusing the caveator of conspiring against him;
(D)      Accusing the caveator of elder abuse;
(E)      Accusing the caveator of assaulting him;
(F)Trying to have the caveator removed from the deceased’s [bedside] while she was in hospital the day before she died.

(xxvii)In or about 14 November 2022, Patrick Lyttleton and Hayley Hunter were appointed as administrators for the plaintiff.
(xxviii)During the period from in or about November 2022 to in or about August 2023, the plaintiff was hostile and abusive towards his administrators, including by:
(A)Saying words to the effect that Ms Hunter was “the reason why men bash their wives”;

(B) Threatening to punch Ms Hunter in the face;
(C)Making inappropriate jokes about Ms Hunter’s marital status and sexuality;
(D)Calling Ms Hunter names such as “fuckwit”, “wanker”, “moron” and “cunt”;
(E)Calling Mr Lyttleton a “fuckwit”, a “useless cunt”, someone who didn’t “know what you are fucking doing” and “fucking thieves”.

(xxix) In the circumstances, the plaintiff is hostile and abusive.

The strike-out/summary judgment application

On 16 May 2024, Graham filed a summons applying to strike out the caveat pursuant to r 23.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) and for summary judgment pursuant to s 63 of the Civil Procedure Act 2010 (Vic) (‘CPA’).

Graham’s primary contention is that Karinna lacks standing to maintain her caveat under r 8.02 of the Probate Rules. Her claimed interest arises from her eligibility to make a claim for further provision under Part IV of the Act (‘proposed Part IV claim’), and from her status as a discretionary beneficiary of the trust. Graham submitted that neither of these interests constitutes a sufficient connection with or interest in the estate to justify the caveat.

Graham contended further that, even if Karinna has standing, the grounds fail to disclose a prima facie case warranting further investigation as to whether he should be passed over as executor. He submitted that the allegations of ill-health, lack of capacity, conflict of interest, financial mismanagement, and hostility are speculative and unsupported by evidence, and/or do not constitute valid grounds for passing him over as executor.

In response, Karinna submitted that she has standing by reason of the prospective Part IV claim, relying upon the decision of McMillan J in Mataska v Browne[7] (‘Mataska’). Karinna submitted that her financial circumstances, including limited assets, reliance on her estranged husband for rent, and her responsibility for two dependent children, demonstrate a prima facie need for further provision from the estate.
[7][2013] VSC 62.

Accordingly, the issues in the current application are as follows:

(a) whether Karinna has standing to lodge and maintain the caveat; and

(b) if so, whether the grounds disclose a prima facie case that justifies further investigation and evaluation at a full hearing.

The evidence

Graham relied upon an affidavit of Mr Boffa sworn on 15 May 2024. In his affidavit, Mr Boffa deposed, in summary, as follows:

(a) he has been the accountant for Graham, Wendy, and the trust for twenty years, and has been the holder of a power of attorney from Graham since October 2023;

(b) he referred to the terms of the will, the caveat and the grounds, and what transpired in the VCAT proceeding;

(c) Graham has some concerns about the administration of the trust. Graham has received no payments from the trust since Bryce has taken control of the trust. He does not know how Bryce came to be appointed as the director of the trustee. Further, someone, presumably Bryce, has made transactions on the bank accounts of both Wendy and Graham which require further investigation; and

(d) while he has been in regular contact with Graham for about twenty years, he has been in more frequent contact with Graham since the revocation order. Since then, he has met and/or spoken with Graham fortnightly. Mr Boffa deposed as follows:

From my observations and having visited his family home…Graham is living a full and happy life. We discuss business matters, tax matters and his personal arrangements.

Mr Boffa deposed, under the heading ‘Graham’s health’, in summary, as follows:

(a) any physical ailments Graham may have do not affect his ability to discuss financial matters with him, and Mr Boffa has no reason to believe that they would adversely affect his ability to manage the estate;

(b) in relation to Graham’s intellectual abilities:

…I have found him well able to discuss matters of finance with me. I understand that he has a past formal diagnosis of dementia or cognitive decline, but it has not, at least since around… September 2023… been apparently affecting his ability to manag[e] his affairs;

(c) he deposed as to what Graham told him about his depression and decline after Wendy went into residential care in May 2021, with the management of his business and his household ‘getting out of hand’. Graham has told him that his mental abilities improved while he was living in supported accommodation;

(d) he referred to the evidence before VCAT at the hearing of the application for the revocation order; and

(e) he deposed as follows:

Since the making of [the revocation order], Graham has recovered control of his bank accounts and now attends to payment of his expenses personally.
Graham has had his licence reinstated with Vicroads and is driving during daylight hours.
On visiting Graham’s home, I have found no evidence of hoarding or clutter in the house. There continues to be a lot of old stock in the shed and garage which Graham is now working through disposing of. He sells a little bit of his stock at the market, at a ‘hobby’ level.
Graham is continuing to use the services of Wintringham, though he does his own washing, shopping and cooking. Wintringham provides his cleaners who come weekly.
Graham is socialising and happy. He is working towards reinstating the maintenance around the house and garden with assistance both from Wintringham and friends. A lot of maintenance of the garden had deteriorated when Graham was not living at the property and it was unoccupied. This is a project he is continuing to control and manage.
Whilst Graham has suffered greatly with the loss of his wife and the lack of support from his immediate family, he has found much support in the community and has regular social and other activities both at home with visitors and with groups he has now joined who support him.
Graham has not had not [sic] had any recent medical events or problems of which I am aware, hospitalisations or other medical services to the best of my knowledge.

In relation to what occurred with the sale proceeds of the Bentleigh property, Mr Boffa deposed that Karinna’s allegation concerning this issue is unclear. While an investigation of Graham’s use of those funds is not necessary, an investigation of the use of funds in bank accounts held by both Wendy and Graham, (presumably by Bryce), is appropriate.

Mr Boffa deposed, in summary, as follows, in relation to the management of Graham and Wendy’s affairs:

(a) Wendy and Graham executed powers of attorney in favour of Bryce on 9 October 2020;

(b) Graham’s documents concerning his and Wendy’s financial affairs, including the financial affairs of the trust, were removed from Graham’s home while the administrators held office. Only the administrators and Bryce had keys to the property, and the administrators have said that neither they nor cleaning contractors engaged by them removed any financial documents;

(c) Mr Boffa deposed as follows:

There are two issues which arise from the deposit of the house sale proceeds I set out above:-
(i)the account into which Wendy's half share of the sale proceeds (both the deposit and the balance) was deposited was Bank of Melbourne Account #0785. That is not Wendy’s account. It is actually an account in the name of the Wendy Hall Family Trust;
(ii)Graham's half of the sale proceeds was deposited to the account in the joint names of he and Wendy, rather than an account in his own name.

…
Thus, Wendy’s estate ought to contain the balance of the sale proceeds of the Bentleigh house, but it apparently does not. Presumably Bryce Hall, using his Power of Attorney, has directed that funds be paid into the Family Trust rather than to Wendy.

(d) there were a number of internet banking transactions upon the bank account in the joint names of Graham and Wendy (‘joint account’) around the time shortly after the settlement of the sale of the Bentleigh property, which led to the funds in the joint account being depleted. Graham does not use online banking services. In January 2023, the administrators withdrew half of the balance of the funds in the joint account and paid them to Bryce, apparently under the mistaken belief that they were joint funds. Bryce has not accounted to Graham for those funds; and

(e) Mr Boffa deposed to reviewing the statements for one of Wendy’s bank accounts, and referred to a number of transactions which were said to support his contention that an investigation into Bryce’s use of Wendy’s funds seems to be warranted. In particular, Wendy’s bank account had a balance of $262,000 in January 2023 (after the receipt of the payment referred to above), but at the time of her death seven months later the balance was only $182,000. While some payments appeared to relate to expenses connected with Wendy’s care, others did not, including payments of $56,000 made to solicitors coinciding with the time of the VCAT proceeding and the statutory will application. He also referred to an allegation by Graham that Bryce sold Wendy’s vehicle at an undervalue.

In relation to the withdrawals from the trust bank account, Mr Boffa deposed as follows:

I do not know the basis on which it is said that Graham received money which was ‘trust’ money. Wendy received all of the income distributions from the Trust for tax purposes, but they were used as part of Wendy and Graham’s joint living expenses. Graham ran a successful marketing and sales business distributing goods to pharmacy businesses (Graham Hall Brokerage Pty Ltd (‘Graham’s business’). Wendy ran the book keeping for Graham’s business. Wendy ran their financial affairs generally before she lost capacity. Graham and Wendy received collective income from Graham’s business, dividend income from their jointly owned share portfolio which they lived off and the Trust’s share portfolio and the Inverloch properties (owned by the Wendy Hall Trust). Graham and Wendy both made contributions to set up the Trust, which enabled the purchase of shares and property in the Trust, including the remaining Inverloch property. Graham was a signatory of the family trust bank account at the Bank of Melbourne. Their income was pooled and applied to their expenses including the costs of upkeep and maintenance of the Wendy Hall Trust property.

Under the heading ‘Graham supposedly irresponsible with money’, Mr Boffa deposed as follows:

Having looked at Graham’s financial circumstances I can say that Graham is living within his financial means and appears very frugal in his expenses.
As explained above, Graham has run a successful marketing business. He was always able to provide me with sufficient information when he was running that business, for me to do tax returns for him.
As I note above, Graham is still running a small sales business and working through disposing of his remaining stock.
As I note above, the bank statements I have seen show that there were transactions which took place without his control. I have not otherwise seen any sign of unusual expenditure by Graham himself.

Under the heading ‘Graham supposedly aggressive’, Mr Boffa deposed as follows:

I can say, based on what he has told me, that he felt very aggrieved and frustrated with the actions of the administrators. He perceived that the contents of his home contained stock for his business, and as far as I am aware, there was in fact a good deal of stock for his business (as well as other things and personal papers and items). The Administrators had the house cleared out with what seemed like little regard for his stock and his business. Whilst they have provided explanations for what they have done, which Graham does not entirely accept, he was angry at what he saw as being his stock and his and Wendy's personal possessions and papers being thrown away whilst he was living in supported accommodation.
I do not know anything myself about Karinna’s allegation that Graham has directed anger or aggression at Karinna in particular. I can say what Graham has told me. He was angry at the VCAT application, which had the result that Dr Bird assessed him as having dementia. At that time, his driver’s licence was suspended (which meant he could not get around, shop or sell stock and neither could he visit his wife Wendy in care). Bryce took control of his finances, and re-directed his mail. By November 2022 he was moved from his home, separated from his dog, and lost control of his stock and his finances. It was said in VCAT that in November 2022 he was outside Wendy's aged care home and had something of a breakdown.

Mr Boffa also referred to Karinna’s support for Bryce’s application in the VCAT proceeding, Graham’s response to what occurred around the time of Wendy’s death, including the application for the statutory will, and to not being told about the severity of Wendy’s condition while she was in hospital.

Annexed to Mr Boffa’s affidavit were copies of the enduring power of attorney executed by Graham in his favour on 4 October 2023, the revocation order, a settlement statement showing the disbursement of the proceeds of sale from the Bentleigh property, and an extract of the bank statement from the joint account showing a withdrawal of $228,610.17 by the administrators on 23 January 2023.

On 7 October 2024, an affidavit was filed by Graham’s solicitor, Ms Pippa Sampson, exhibiting a copy of Graham’s Annual Health Assessment Report, which included the results of a Mini Mental State Examination (‘MMSE’) conducted on 14 August 2024 by Dr Nahem, Graham’s general practitioner. The report showed that Graham scored 30/30 on the MMSE.

On 25 October 2024, Karinna filed an affidavit expanding upon her grounds of objection. In this affidavit, Karinna deposed to the following matters:

(a) the background to this proceeding;

(b) the matters she will rely upon in the proposed Part IV claim;

(c) the affairs of the trust;

(d) how the proceeds of sale of the Bentleigh property were dealt with;

(e) the medical reports filed in the VCAT proceeding concerning Graham’s capacity;

(f) what occurred in the VCAT proceeding and during the course of the administration; and

(g) Graham’s behaviour towards her in recent years.

In relation to the proposed Part IV claim, Karinna deposed that she is a sole parent living in rental accommodation with her daughters (aged 23 and 18), who are still engaged in full-time education. She receives contributions to rental payments and other payments from her estranged husband and her step-mother. She is employed as a personal assistant with Monash Health, earning $70,000 per annum. Apart from some modest savings and superannuation, she has no significant assets.

Karinna deposed that she is a beneficiary of the trust, and that the trustee is the sole proprietor of the Inverloch property. She believes that Graham intends to take control of the trust if and when probate of the will is granted in his favour, and referred to a table showing cash withdrawals from the trust bank account between August 2019 and August 2021 totalling $44,380.

In relation to the Bentleigh property,[8] Karinna deposed as follows:

From the Bentleigh property sale proceeds, approximately $40,000 was paid into an account with the Commonwealth Bank (BSB 063-144, account number 1007 3503) in the names of Graham and Wendy, being a portion of the deposit, and then a further $490,000 or so was paid into this account after settlement. From these sale proceeds, I believe based on discussions with Graham and Bryce and reviewing copies of bank account statements for my mother’s bank accounts, Graham began to withdraw substantial amounts of cash for unexplained purposes. …
I am informed by Bryce and believe that between July 2019 and November 2022, during my mother’s lifetime, Graham made substantial cash withdrawals between $200,000 to $250,000 from my mother’s various bank accounts which has been mostly unaccounted for.

[8]It seems that Wendy inherited the Bentleigh property from a family member, but the settlement documents suggest that both Wendy and Graham were the registered proprietors of the Bentleigh property, presumably at Wendy’s direction.

Karinna then went on to refer to letters and reports concerning Graham from Graham’s general practitioner, a geriatrician, two neuropsychologists, and an endocrinologist, and as to what occurred during the course of the VCAT proceeding. She referred to the appointment of the administrators and the notices issued by the local council regarding the hoarding issue. She referred to the hostile, abusive and threatening conduct of Graham towards the administrators, as documented in the reports prepared by the administrators in September 2023 (‘administrators’ reports’).

In conclusion, Karinna deposed, under the heading ‘Graham’s behaviour towards me’, as to what she described as ‘concerning incidents’, which were also summarised in the relevant section of the grounds (see paragraph 19 of those reasons).

Karinna’s affidavit concluded as follows:

By reason of the above, I do not believe that Graham is a fit and proper person to act as executor, and I believe he will not be able to capably administer the estate and deal with my claim for provision in an impartial manner.

Exhibited to Karinna’s affidavit were, among other things, the following documents:

(a) a copy of the trust deed for the trust;

(b) ASIC searches in relation to the trustee;

(c) a title search showing that the trustee is the registered proprietor of the Inverloch property, which also shows that a caveat was lodged by Graham on 30 May 2023 claiming an interest based upon an ‘implied, resulting or constructive trust’;

(d) a letter from Graham’s solicitors to Bryce’s solicitors dated 28 February 2024 contending that Bryce’s appointment as a director of the trustee was invalid, and stating that as soon as Graham was appointed as Wendy’s legal personal representative, he will take steps to have the shares in the trustee transferred to him and to have Bryce removed as a director of the trustee;

(e) a table said to show cash withdrawals from the trust bank account totalling $44,380 between 21 August 2019 and 27 August 2021;

(f) a bundle of receipts for cash withdrawals from the trust bank account and an account in Graham’s name in 2019, 2020 and 2021 said to have been found by Bryce on the dining table at Graham’s home;

(g) an extract from a bank statement for the joint account for the period between 24 March 2021 and 14 July 2021;

(h) a spreadsheet showing cash withdrawals from five bank accounts between 24 June 2019 and 10 November 2022 totalling $246,351.53 (‘spreadsheet’). From other information in the evidence I can identify the joint account, the trust bank account, and two accounts in Graham’s name (‘Graham’s accounts’) in the spreadsheet. I cannot identify the account holder(s) for another account referred to in the spreadsheet, being a Commonwealth Bank Business Transaction Account;[9]
[9]The bundle of cash withdrawal slips exhibited to Karinna’s affidavit has enabled me to identify the trust bank account in the spreadsheet, and also two accounts in the name of Graham alone. Mr Boffa in his affidavit exhibited an extract of the statement for the joint account which enabled me to identify the joint account in the spreadsheet.

(i) various referrals from medical practitioners and medical reports concerning Graham, notably a report prepared by a neuropsychologist, Dr Karen Bird at the request of Bryce’s solicitors dated 30 October 2022, and a report prepared by another neuropsychologist, Dr Leonie Keall dated 16 May 2023, prepared at the request of Graham’s solicitors;

(j) the administrators’ reports;

(k) correspondence passing between Graham’s guardian, Ms Ann Dotson of the OPA, and the administrators between 3 August 2023 and 9 August 2023; and

(l) the revocation order, along with the reasons for decision published by the VCAT member making the revocation order (‘VCAT member’) on 21 November 2023.[10]

[10]The factual findings made by the VCAT member to support the making of the revocation order are inadmissible by reason of s 91 of the Evidence Act 2008 (Vic). However, much of the material before VCAT, such as the medical opinions and the administrator’s reports, are in evidence before me, and as such may be taken into account in the current application.

Relevant legal principles

Prior to turning to the issues in the current application in more detail, I shall briefly outline the key legal principles applicable to:

(a) this Court’s approach to applications of the current kind;

(b) the standing issue; and

(c) whether an executor should be passed over.

Applications to strike out caveats

Under s 63 of the CPA, the Court may summarily dismiss a claim if it is satisfied that the claim has no real prospect of success. The principles governing summary judgment, as articulated in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[11] emphasise the distinction between claims that are ‘hopeless or bound to fail’ and those that merely face evidentiary challenges. Further, notwithstanding that the Court may find that a party’s claims in a proceeding have no real prospect of success, s 64 of the CPA provides that the Court must consider whether the proceeding should be permitted to proceed to trial, because it is not in the interests of justice to summarily dispose of the proceeding, or because the dispute is of such a nature that only a full hearing on the merits is appropriate.
[11](2013) 42 VR 27.

The approach to be taken to the question of whether the caveator has established a prima facie case was summarised by Moore J in Re Robustelle (No 2),[12] as follows (omitting footnotes):
[12][2023] VSC 72.

The Court of Appeal authoritatively set out the approach to determining the existence of a prima fade case in Gardiner v Hughes (No 2). Although made in the context of an application for the revocation of a grant, the statements of principle by the Court are equally applicable to cases involving the objection to the making of a grant.
The Court of Appeal identified that the task for a caveatrix is to show that there is a ‘case for investigation’, or ‘something to go on’. The question is whether the allegations made by the caveatrix, assuming them to be true, call for further investigation. Mere speculation will not, however, suffice. As to how this test is to be applied, the Court stated that:
…it will not simply be a question of deciding whether an inference justifying revocation should be drawn from the facts relied upon, or which of two possible inferences is to be preferred. Those would be matters for trial. Nor is the true question even whether the inference sought to be relied on is available on the facts (although if that were so, there would be a prima facie case for investigation as to whether or not the inference should be drawn). There may be a case for investigation even if all the facts needed to justify the inference in question are not yet known or alleged, but there is enough to ‘go on’ to call for a trial. That will be the case if there is a reasonable explanation for the facts relied upon which, if shown to be correct, would justify revoking probate. Each case will of course depend on its particular facts. But in every case the onus rests on the party raising the doubt as to validity.

In Gardiner v Hughes (No 2), the Court of Appeal criticised an approach to determining the existence of a prima facie case in which particulars of objection were separately examined in isolation from each other. The Court emphasised that the- task is to determine ‘whether the particulars as a whole constituted a narrative warranting further investigation’, with the weight to be attached to individual particulars to be determined with regard to the 'overall narrative.[13]

[13]Ibid [14]-[16].

In Lynch v Perpetual Trustees Co Ltd,[14] Walker JA (sitting in the Trial Division) observed as follows:

The onus of making out a prima facie case rests upon the party asserting that case; but that onus is relatively easy to discharge …[15]

[14][2002] VSC 702.

[15]Ibid [50].

Further, her Honour stated as follows:

I accept Perpetual’s submission that the question of whether a prima facie case is made out falls to be evaluated by reference to both the grounds of objection (and the particulars thereto) and any evidence filed by the parties. That is because there may be cases where the strength of the evidence filed in response to an application for revocation is so overwhelming that it makes clear that, notwithstanding that the applicant has marshalled some evidence in support of his or her case, when that evidence is assessed in light of the responsive evidence it is plain that there is no prima facie case. ... However, that evaluation must also proceed on the basis that the evidence filed by the parties may not reflect all of the evidence they might seek to rely on at trial. As the Court observed in Gardiner [No 2], the notion of ‘investigation’ permit regard to be had to the evidence ‘reasonably thought likely to be available’ at trial, and additional evidence may emerge in the course of pre-trial steps.[16]

[16]Ibid [57].

In some cases, when determining whether there is a prima facie case which warrants investigation, the Court relies solely upon the particulars in the grounds lodged by a caveator, on the assumption that the factual matters asserted in the grounds are true.[17] However, in Re Munro,[18] Derham AsJ stated as follows:

When a caveator’s grounds and particulars are challenged by the applicants for probate under the procedure in the CPA it is incumbent upon the caveator to support its particulars by evidence, including by reference to undisputed documents discovered or revealed by the estate of the deceased. This follows from the nature of the procedure under the CPA and the Rules made to regulate applications for summary dismissal.[19]

[17]Gardiner v Hughes (No 2) [2019] VSCA 198 [80].

[18][2018] VSC 747.

[19]Ibid [19].

The cases referred to above (save for Re Munro[20]) concerned applications to prevent or revoke a grant of probate based upon the validity or otherwise of the will, not the question of whether an executor should be passed over. It seems to me that where a caveator seeks to pass over an executor, the bar for establishing whether there is a prima facie case should be somewhat higher than in cases where the validity of the will is being challenged. In the latter case, the Court has recognised that an investigation into the testamentary capacity of a deceased person may necessarily be quite involved and forensically complex, complicated of course by the fact that the testator is deceased. In cases involving the passing over of an executor, the protagonists are all, by definition, available to give evidence, and the relevant factual matters are capable of being investigated and resolved quite promptly.
[20]Ibid.

Further, proceedings of the current kind, if allowed to proceed to trial, necessarily impede the administration of an estate created by an indisputably valid will. As such, such disputes may lend themselves more appropriate for summary disposition as compared with proceedings involving investigations into the testamentary capacity of a deceased person or the suspicious conduct of beneficiaries, particularly where the parties have descended into evidence, and given the Court’s power to remove an executor after the grant of probate, such that the question of the suitability of an executor can be revisited at a later stage if necessary.

The standing issue

Standing in probate matters is concerned with whether the caveator has a sufficient legal or equitable interest in the relevant estate to justify maintaining a caveat. Standing is a threshold issue and must be established under r 8.02 of the Probate Rules, which provide that a person may lodge a caveat if they demonstrate that their rights ‘would or might be affected by the grant of probate’.

Standing in probate matters requires the caveator to demonstrate a legal or equitable interest in the estate that is direct, real, and tangible, as opposed to being speculative or abstract. This principle was articulated in Re Devoy, deceased; McKenzie v Devoy,[21] where the Court referred to the requirement that any challenge to the grant of probate must be grounded in a demonstrable connection to the administration of the estate or the validity of the will. Further, in Re Przuchodski,[22] McMillan J stated as follows:

In order to establish standing in a proceeding relating to a deceased estate, a person must be able to show that his or her rights will, or may, be affected by the outcome of the proceeding. Standing is usually established by the Caveator having a beneficial interest in the deceased's final will or under the penultimate will or the intestacy provisions where there is no penultimate will.[23]

[21][1943] VLR 269.

[22][2016] VSC 781.

[23]Ibid [17].

Karinna relied upon the decision of McMillan J in Mataska v Browne (‘Mataska’),[24] where her Honour recognised that a prospective Part IV claim could, in limited circumstances, confer standing upon a contingent beneficiary of an estate for the purposes of an application to pass over an executor.
[24][2013] VSC 62.

In Mataska,[25] standing was established by a potential Part IV claimant established that an inter vivos transaction raised material concerns about the executor’s impartiality and ability to discharge her fiduciary obligations, creating a tangible conflict of interest that warranted judicial scrutiny. McMillan J noted that in such cases, the intersection of a prospective Part IV claim and concerns about the executor’s impartiality could justify the maintenance of a caveat. In the case before her Honour, the named executor refused to apply for a grant of probate, because the testator’s assets had been completely exhausted by the transfer of the deceased’s real estate to the named executor prior to the death of the deceased, in suspicious circumstances. Her Honour found this created a conflict between interest and duty of a kind which warranted the named executor being passed over, and that the prospective Part IV claimant had a sufficient interest in the estate to have standing to apply to pass over the named executor.
[25]Ibid.

When an executor can be passed over

In Halloran v Coffey (No 2),[26] Moore J undertook a comprehensive survey of the authorities and the legislative history of s 15 of the Act, and confirmed that this Court has the power to order that the named executor of a will be passed over where required for the due and proper administration of an estate.[27]
[26][2023] VSC 51.
[27]Ibid [58], [71].

His Honour referred to the decision of Besanko J in Re Estate of Crane,[28] as follows (omitting citations):
[28](2008) 93 SASR 198.

In Re Crane, Besanko J considered an application to pass over an executor in circumstances where, shortly before the testator’s death and when the testator was ill, he purported to transfer to the person appointed as executor two substantial assets for relatively nominal consideration. Besanko J identified two general principles which will guide a Court in the exercise of its jurisdiction to pass over an executor, with which I respectfully agree:
…First, it is clearly established that a Court will not readily pass over a named executor and, in general, a person who is named as executor by a testator is entitled to a grant of probate. Section 67 of the Testamentary Causes Act refers to “special circumstances” and the jurisdiction to pass over an executor is properly described as a limited jurisdiction. Secondly, when a court does exercise the jurisdiction it does so having regard to the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate ....

Justice Besanko identified the following circumstances in which the Court of Probate has decided in a variety of English cases to pass over a named executor:
1.The executor was of bad character, had been convicted of manslaughter in relation to the death of the testator and was in prison.

2. The executor had neglected his duties.
3.The executor had intermeddled in the estate and refused to take a grant.

4.        The executor was absent abroad.
5.        The executor was suffering from ill-health.
6.        The executor was of unsound mind.
7.        The executor was not competent to take probate.
8.        The executor had disappeared.
9.        The estate was insolvent.[29]

[29]O’Halloran [100]-[101].

However, not all conflicts between interest and duty result in an executor being removed or passed over.[30] In Re Munro,[31] Derham AsJ summarised the position as follows (omitting footnotes):

Where the Court exercises the power to pass over a named executor, it does so having regard to the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate. The consequence is that either the other named executors will receive a grant of representation or letters of administration with the will annexed will be granted to someone else.
In Uniting Church in Australia Property Trust (NSW) v Millane Windeyer J, considered an application by two nominated executors for an order, in effect, that the third nominated executor be passed over. The third nominated executor, the defendant, applied to strike out the application. The plaintiffs’ application was based on the allegation that the defendant was involved in an inter vivos property transaction with the deceased under which he received a benefit in circumstances alleged to involve unconscionable conduct by him towards the deceased. It was said by the plaintiffs that it would not be possible to commence proceedings against the defendant on behalf of the estate without his consent, which he would be unlikely to give. The plaintiffs relied on the inherent jurisdiction of the court. Justice Windeyer said that the application to pass over the defendant was bound to fail. He said that pleaded misconduct was very different from proved misconduct and that it was undesirable for the administration of estates to be delayed by having to determine in prior proceedings, or perhaps the same proceedings, disputed claims of unconscionable conduct. He noted that if the defendant was to misconduct himself then he could be removed. If he did not consent to the bringing of proceedings, the Court could allow proceedings to be brought. In ordinary circumstances, the proper course is to assume that a named executor will act properly and not to have some prior determination of proceedings which will properly arise in the administration of the estate of the deceased person. …[32]

[30]See, for example, Denby v Power [2016] VSC 535 [34], following a survey of the relevant authorities.

[31][2018] VSC 747.

[32]Ibid [37]-[38].

While the authorities show executors may be removed when conflicts between executors have hampered the orderly administration of an estate, there are fewer examples of executors being removed because of conflicts between executors and beneficiaries and/or potential beneficiaries.[33]
[33]But see Denby v Power [2016] VSC 535, where McMillan J removed the named executors because of their attempts to undermine the interests and entitlements of the sole beneficiary of the estate.

The parties’ submissions – the standing issue

Karinna contended that she has standing to apply to pass over Graham as executor on the basis of the prospective Part IV claim, and on the basis that there are financial transactions which warrant further investigations which may result in the enlargement of the estate.

Karinna submitted that her financial vulnerability, her reliance on her estranged husband for rent, and her responsibility for two dependent children establish a prima facie need for provision under Part IV of the Act. The prospective Part IV claim establishes her legitimate interest in the proper administration of the estate and the impartiality of the executor.

Karinna referred to Graham’s plans to take control of the trust once probate of the will is granted to him, and submitted as follows:

Karinna has a material interest in Graham not obtaining a grant of probate, because she has a real concern that Graham will take control of the Wendy Hall Family Trust, of which she is a General Beneficiary, and will exclude her from benefiting. That is a material interest sufficient to establish standing.

Graham challenges Karinna’s standing on the basis that:

(a) a prospective Part IV claim does not create a direct or immediate interest in the administration of the estate, or confer standing to interfere with probate unless the validity of the will is challenged; and

(b) the trust is a distinct legal entity from the estate, and thus its administration does not directly impact the estate or Karinna’s rights as a potential beneficiary of the estate.

Graham referred to the decision in Govindan v Charan,[34] where Mukhtar AsJ confirmed that ‘a potential Part IV applicant cannot interfere with the grant of probate unless the validity of the will itself is called into question’.[35] However, at the hearing of the current applications, senior counsel for Graham accepted that a prospective Part IV claimant may have standing in other circumstances, such as those considered by McMillan J in Mataska.[36]
[34][2020] VSC 137.
[35]Similarly, in Re Przychodski [2016] VSC 781, it was emphasised that a Part IV claim does not of itself confer a direct interest in the administration of the estate sufficient to sustain a caveat.
[36][2013] VSC 62.

Graham submitted that while Karinna is an eligible person under s 90 of the Act, eligibility alone does not satisfy the standing requirements under the Probate Rules. Eligibility must be accompanied by evidence of a tangible interest in the estate or an impact on the administration of the will. Graham distinguished the present case from Mataska,[37] submitting that Karinna had failed to identify any specific transaction or asset that would enlarge the estate, that Graham, in his role as executor, would be unwilling to investigate or unable to call in. Further, Graham’s role as executor is separate from his control of the trust, as the trust is outside the scope of the caveat.
[37]Ibid.

Graham submitted, in summary, as follows:

In the present case, at the highest, the Grounds … (without supporting evidence) allege a conflict of duty and interest by reason of the ‘dissipation’ of proceeds of sale of a property in Bentleigh. The actual allegation about Graham’s use of money, and how it is a ‘transaction which needs to be investigated’ is not clear. The affidavit of the Caveator provides little clarity.

Graham submitted further, in summary, as follows:

(a) the allegation that Graham dissipated the proceeds of sale of the Bentleigh property is not supported by the evidence;

(b) the suggestion that Graham is required to account for household and business expenditure by him and his late wife to their children is nonsensical;

(c) there is no allegation (or any evidence) of any withdrawals by Graham from any bank account in Wendy’s name;

(d) Graham, as the co-owner of the joint account, was entitled to transact upon the joint account. In any event, it was not said how many transactions on the joint account which pre-dated Wendy’s loss of capacity are liable to be investigated, given that Wendy managed the household finances;

(e) if there are any investigations to be carried out, they are investigations into the use of funds paid to Bryce on Wendy’s behalf;

(f) it is difficult to see how any concerns about transactions on the trust bank account could confer standing upon Karinna to object to the grant of probate to Graham. In any event, there is no evidence to contradict Mr Boffa’s evidence that income from the trust was used to fund Graham and Wendy’s living expenses, and the amounts concerned are minimal; and

(g) Graham submitted as follows:

There is no foundation for [Karinna] to allege there is any ‘inter vivos’ transaction which has benefited Graham which ought to be investigated. Any trust transaction ought not prevent the appointed executor from taking probate of the estate.

Graham submitted that Karinna has failed to show that there was any evidence to support a finding that there was a real prospect that further investigations would enlarge the estate so as to enliven her standing to bring an application to pass over Graham as the executor. Graham submitted that he is entitled to rely upon the presumption that executors will act properly, and in any event, Graham will have solicitors and accountants assisting him in the administration of the estate.

The parties’ submissions: whether there is a prima facie case

Karinna submitted in relation to the question of whether the grounds establish a case for investigation, as follows:

The grounds, and the material in the caveator’s affidavit, amply support the existence of a case for investigation, and the existence of a real prospect of success.
From 2022 onwards, there has been contested litigation in VCAT between the plaintiff and his son, concerning the plaintiff’s decision-making capacity. Orders for the appointment of an independent administrator and guardian were made in 2022, and revoked in 2023.
In the course of that litigation, numerous experienced medical practitioners have expressed the view that the plaintiff has cognitive issues which interfere with his decision-making. Ill health, unsoundness of mind, and competence are all recognised grounds upon which this Court may pass over an executor.
Additionally, the plaintiff’s conduct of his own affairs, and his treatment of both professional administrators and the caveator, raise real questions as to whether the plaintiff is a suitable person to obtain a grant of probate.

In rejecting Karinna’s contentions regarding his fitness to act as executor, Graham submitted that the evidence relied upon by Karinna is largely historical in nature. Following the revocation order, Graham is presumed to be legally competent. He submitted that Karinna’s evidence and submissions reveal the real reason why Karinna lodged the caveat was to prevent Graham taking control of the trust.

Ill health and cognitive capacity

Karinna’s submissions regarding Graham’s capacity were primarily founded upon the neuropsychological assessments conducted by Dr Bird and Dr Keall, both of which document substantial impairments in Graham’s executive functioning and insight. Dr Bird’s report, in particular, highlights memory impairments and poor decision-making skills, which, according to the assessment, would hinder Graham’s capacity to manage financial affairs.

Karinna submitted as follows:

Dr Bird and Dr Keall are highly-qualified medical practitioners, who have produced detailed reports following assessments of Graham’s cognitive capacity. They should be given significant weight. On the basis of those reports, there is both a case to investigate as to whether Graham has capacity to act as executor, and a real prospect that the Court will find he does not.

Karinna also referred to Graham’s hoarding practices and his business practices, as referred to in the medical reports and the administrators’ reports, as raising real concerns regarding Graham’s competence to administer the estate. These business practices include storing cash in unmarked envelopes, often mixed up with stock and personal items, failing to keep proper records, including inventories of stock, and operating a business at a loss.

However, Graham submitted that the probative weight of the medical evidence relied upon by Karinna is diminished given its age and given the availability of more recent evidence addressing Graham’s current cognitive health.

Graham submitted the contemporaneous medical evidence supersedes the opinions relied upon by Karinna, referring to the MMSE conducted by Dr Nahem on 14 August 2024. In the MMSE, Graham achieved a perfect score of 30/30, and Dr Nahem opined that Graham’s cognitive function has not further deteriorated and that he continues to manage his personal and financial affairs effectively.

Graham also referred to the evidence of Mr Boffa to the effect that Graham is living well at home and is able to discuss financial matters. This is consistent with the report provided by Ms Dotson of the OPA to VCAT for the hearing of the application for the revocation order. The evidence shows that Graham is not hoarding, has had his driver’s licence reinstated, and manages his own bank accounts.

Conflict of interest and financial mismanagement

Karinna also alleges that Graham has failed to account for substantial cash withdrawals from various bank accounts, totalling $246,351.52 over several years. These withdrawals are said by the caveator to raise a serious question as to whether Graham has acted, and will continue to act in conflict with his fiduciary obligations.

Karinna submitted as follows:

Between the dates of 21 August 2019 and 27 August 2021, cash withdrawals were made from a bank account held by the trust totalling $44,380,66 despite the deceased very rarely transacting in cash, or making cash withdrawals.
Bryce became aware of a pattern of withdrawals in around mid 2021, and took steps to try to prevent further withdrawals. On 20 August 2021, Bryce was appointed as director of the trustee company, Lendor Pty Ltd, and the withdrawals from the trust account stopped shortly thereafter.
However, large withdrawals from the deceased[‘s] and Graham’s joint bank account continued. For example, on 28 June 2021, a deposit for the sale of the deceased and Graham’s Bentleigh property (which had been sold in about May 2021) was paid into the deceased[‘s] and Graham’s joint account. Within less than a month, $11,533.45 had been withdrawn as cash out of the account.
Over the period from June 2019 to November 2022, withdrawals totalling $246,351.52 were made across five accounts. Graham has refused to accurately account for the use of those funds.
Withdrawals of such a substantial sum, in cash, out of (a) a trust account, from which Graham had no legal authority to make distributions and (b) a joint account, which was used to pay both Graham and the deceased’s living expenses, requires careful investigation. The evidence of the cash withdrawals in Karinna’s affidavit, and Graham’s failure to account for those withdrawals, raises both a case to investigate the potential for conflict, and a real prospect that Graham would not be an appropriate person to obtain a grant.
For the avoidance of doubt, Karinna does not suggest she is an appropriate person to obtain a grant and conduct that investigation. Rather, if Karinna succeeds in obtaining an order that Graham be passed over, she intends to seek orders that an independent person be appointed to administer the estate.

Counsel for Karinna submitted that in order to establish a prima facie case, it is not necessary for Karinna to identify particular bank accounts and particular transactions in her evidence. Counsel submitted as follows:

That is all evidence for trial, and that is all evidence that the trial judge can determine, properly tested by cross-examination, full discovery and inspection of all the records that my client has concern about. That’s all we need to do for today’s purposes. It is not, with respect -you don’t need to go to the effort of understanding what transactions are complained about.
The submissions clearly state the period in which the withdrawals were made, the amount that totals those withdrawals, and why my client says she has concerns about them. She says Graham has refused to accurately account for the use of those phones across five accounts. That is a matter for investigation. That is something that my client is entitled to go on and that is something that my client is entitled to test at a full trial of the matter.

Karinna submitted further that the existence of suspicious transactions also confers standing upon her, because if they are investigated, and funds are recovered by the estate, the estate will be enlarged, which is material to the success of the prospective Part IV claim.

In response, Graham submitted that his prospective control of the trust is unrelated to his role as executor and could not impact upon the administration of the estate.

Graham submitted further that Karinna has not provided any evidence to corroborate her allegation to the effect that he has a conflict of interest and duty by reason of his transactions upon various bank accounts.

Graham relied upon the affidavit of Mr Boffa, which rejected allegations of financial impropriety on the part of Graham, and provided an explanation of the transactions upon the joint account and the destination of the proceeds of sale from the Bentleigh property. Mr Boffa deposed that half of the proceeds of sale from the Bentleigh property were deposited into the joint account, and subsequent withdrawals were made for household expenses.

As for the $246,000 allegedly withdrawn from five accounts referred in the spreadsheet, Graham submitted that Karinna has not adduced any evidence linking these withdrawals to any improper conduct by Graham, noting that many of the withdrawals were made during periods when Wendy retained capacity, or were made from the joint account.

Graham also relied upon his submissions with respect to the question of whether Karinna has standing in relation to the alleged conflict of interest, which are summarised at paragraphs 64 to 67 of these reasons. It is difficult to see how transactions upon bank accounts while Wendy had capacity warrant further investigation, and to the extent that transactions upon Wendy’s bank accounts by Bryce warrant investigation, they will be investigated by Graham.

Graham submitted that the evidence relied upon by Karinna is wanting. There is no evidence of any suspicious transactions upon a bank account in Wendy’s name. There is no evidence of any asset of Wendy’s which has been disposed of, and no evidence of Graham being asked to account for any money having been taken from Wendy’s bank accounts and refusing to do so.

Bad character and hostile behaviour

Karinna referred to the conduct of Graham towards her and the administrators as particularised in the grounds, and submitted as follows:

In circumstances where Karinna has foreshadowed making an application for further provision, under Part IV of the Administration and Probate Act 1958, Graham’s conduct towards Karinna raises real concerns about whether he would be an appropriate person to act as executor, with obligations to consider whether to compromise Karinna’s claim. Personal conflicts, manifest bitterness and resentment towards beneficiaries, and hostility and division that is unlikely to be healed, raise the kind of conflict for which an executor will be removed. There is both a case to investigate as to whether Graham’s conduct towards Karinna does preclude his appointment, and a real prospect that the Court would consider that to be the case.

Karinna submitted further as follows:

The office of executor is a fiduciary office, and high standards of conduct are expected. Graham’s inability to deal in a courteous manner with professional VCAT-appointed administrators raises a concern that he would be unable to deal appropriately with the professionals that an executor must inevitably. interact with, include any solicitors acting on Karinna’s behalf in respect of a Part IV claim. Again, there is a case to investigate as to whether Graham is likely to be able to conduct himself in a manner fitting for the office of executor, and a real prospect that a Court would find he is not.

Counsel for Karinna accepted that bad character and poor conduct do not of themselves amount to grounds to pass over an executor. However, in the context of the conflict within the family, there is conduct and behaviour which had caused Karinna to feel threatened and intimidated, and she does not believe that Graham will deal with the prospective Part IV claim fairly and commercially. Given the ongoing litigation, including the litigation between Bryce and Graham in the VCAT proceeding, the appointment of an independent administrator to the estate will alleviate Karinna’s concerns in that regard.

Graham submitted that Karinna’s allegations, even if true, do not disqualify him from acting as executor. Karinna does not explain why transacting in cash disqualifies Graham from being an executor. To the extent that it is relevant, the evidence concerning Graham’s hoarding and home management is historical. It is not explained how any hostility towards Karinna or any other person could amount to disloyalty to the estate. And, in any event, Graham’s animosity towards his children, including Karinna, was explained by Mr Boffa in his affidavit as being based upon:

… the facts that Graham did not cope well with Wendy going into care, was the subject of an administration order application, had his licence removed, faced his house being cleaned out by administrators, faced a Supreme Court action to change Wendy’s will while she was on her death bed, to remove him from the will and replace him with the children.

Senior counsel noted that in the VCAT proceeding and in the statutory will application, the children, not Graham, were the moving parties. In any event, if it were the case that a proper ground for the removal of executors was the existence of conflict between an executor and a potential Part IV claimant, then the majority of Part IV claimants would have grounds to apply to pass over or remove executors, as such claims are often made in the context of significant family conflict.

Discussion

Prior to turning to the substantive issues in the application, at the hearing of the application, counsel for Karinna submitted that I should not rely upon the evidence of Mr Boffa in relation to questions of capacity, because Mr Boffa is not medically qualified, and the evidence amounted to hearsay. Counsel said that Mr Boffa deposed to matters that should really have been the subject of evidence given by Graham himself.

I disagree. I accept that Mr Boffa cannot give evidence of a medical nature, but there is ample medical evidence before me for the purposes of the current application. Rather, I understand Mr Boffa to be giving evidence in his capacity as an experienced professional, with qualifications in financial matters, who has known Graham for a long time, and is a regular visitor to his home. He no doubt experienced in dealing with clients regarding their personal financial affairs. He is quite capable of giving evidence about his observations of and interactions with Graham.

In that regard, Mr Boffa is far better placed to give evidence about Graham’s ability to understand and provide instructions regarding matters of the kind he would be likely to deal with as the executor of the estate than Graham himself, whose evidence would be no doubt sought to be discredited on the basis that it was self-serving. And, insofar as Mr Boffa gives evidence about financial matters, as an accountant, he is well placed to do so. Finally, insofar as Mr Boffa purports to give evidence about Graham’s conduct and character, it is implicit from Mr Boffa’s affidavit and Graham’s submissions that Graham does not deny the factual allegations made with respect to his dealings with the administrators and with Karinna. Rather, the point is made that Graham’s conduct was explicable in the circumstances.

Turning now to the standing issue, I accept Graham’s submissions that Karinna has not established that there is a real prospect that the estate could be enlarged as a result of the investigations which Graham could not be relied upon to carry out, or, for that matter, whether there is a real possibility that this could occur. Despite having had Mr Boffa’s evidence for several months, the evidence relied upon by Karinna to support her allegation that Graham had misappropriated Wendy’s funds prior to her death remains vague and unconvincing, despite there being ample opportunity to respond to that evidence.

I am prepared to accept, for present purposes, that the prospective Part IV claim has some merit. Karinna is a daughter of the deceased, and is in a precarious financial position for a woman of her age and stage. Given the estrangement between her and Graham, there seems to me to be a real risk that Graham has altered, or will alter the mirror will. However, the prospective Part IV claim faces the rather high bar that any claimant faces when the main beneficiary of the relevant estate is the surviving spouse of the deceased, especially when the estate is relatively modest in size. However, I can draw the necessary implication that the larger the estate, the better the prospects of success the prospective Part IV claim has.

I can also accept, at least for present purposes, that it would not be in Graham’s interests to pursue any investigations into his dealings with Wendy’s assets, or his dealings with the trust, at least for the purposes of determining a summary judgment application. That said, this statement should not be taken as amounting to a positive conclusion that Graham would not conduct an investigation, particularly given the involvement of solicitors and accountants in his affairs. However, for the purposes of this current application, I shall assume, in Karinna’s favour, that if Graham is the executor of the estate, he would not undertake any such investigations.

However, I am not satisfied that there is any probative evidence that raises valid suspicions that there has been any inappropriate dealings by Graham with Wendy’s assets. To the extent that there have been dealings with funds in the joint account, those funds were joint funds, and, in any event, there is uncontradicted evidence that most of the funds in the joint account at the time the challenged withdrawals were made were in fact Graham’s share of the proceeds of sale of the Bentleigh property, not joint funds.

As for the allegedly unauthorised dealings with the funds in the trust bank account, the evidence shows that a substantial proportion of the cash withdrawals from the trust bank account referred to in the spreadsheet took place prior to the time that Wendy lost capacity. The uncontradicted evidence of Mr Boffa was to the effect that, prior to losing capacity, Wendy managed the financial affairs of the household and the trust, so I can infer that she would have been aware of any transactions conducted upon the trust bank account, and other bank accounts operated by her and Graham.

Mr Boffa’s evidence was largely uncontradicted by Karinna, despite Mr Boffa’s affidavit having been filed (and presumably served) some six months prior to the hearing of the application. While one would not expect Karinna to respond with the degree of detail that might be required at trial, one would expect there to be more than just a vague reference to withdrawals said to have been made by Graham from bank accounts where the account holders were unidentified. I find it difficult to believe that the person who prepared the spreadsheet was unable to identify the holders of the accounts referred to in the spreadsheet, such that I can infer that none of the five bank accounts was in the name of Wendy alone. Indeed, the evidence is that four of the five bank accounts were not in Wendy’s name alone.

The spreadsheet shows that cash withdrawals were made from five different bank accounts between 24 June 2019 and 10 November 2022 (a period of just over 40 months) totalling $246,351.53 (that is, on average, just over $6,000 per month, or $72,000 per annum). One of the accounts was the joint account, one of the accounts was the trust bank account, and two of the accounts were Graham’s accounts.

An analysis of the spreadsheet reveals the following:

(a) the value of the total cash withdrawals made from the five accounts in the 18 month period prior to 1 January 2021 was $160,967.08, and the total value of those made after that date was $85,384.45;

(b) between 24 April 2020 and 18 November 2021 (a period of 19 months), a total of $42,580 was withdrawn from the joint account, of which $20,480 was withdrawn prior to 1 January 2021, and $22,100 after that date;

(c) between 21 August 2019 and 27 August 2021 (a period of 24 months) the value of the total cash withdrawals from the trust bank account was $41,580, of which $20,480 pre-dated 1 January 2021, and $21,100 post-dated 1 January 2021;

(d) between 27 July 2019 and 19 August 2021 (a period of 25 months), cash withdrawals totalling $85,320.05 (that is, approximately 35 percent of the value of the total of the cash withdrawals identified in the spreadsheet) were made from Graham’s accounts;

(e) of the balance of cash withdrawals of $161,031.48, $26,833.45 were made from the joint account (largely from Graham’s share of the proceeds of sale from the Bentleigh property), $42,580 were made from the trust bank account (which cannot be recovered by the estate), with the balance of $87,428.03 having been withdrawn from an account where I cannot discern from the evidence who was the account holder. Of this amount, $50,278.03 was withdrawn prior to 1 January 2021; and

(f) the settlement statement for the completion of the sale of the Bentleigh property shows that Wendy’s half share of the proceeds of sale from the Bentleigh property was paid into a Bank of Melbourne account not referred to in the spreadsheet.

Significantly, the amount of cash withdrawals from all five accounts declined after Wendy went into residential aged care in May 2021. Between 4 May 2021 and 10 November 2022, cash withdrawals of $3,300 were made from one of Graham’s accounts, cash withdrawals of $10,800 were made from the trust bank account, cash withdrawals totalling $15,933 were made from the joint account, and cash withdrawals of $16,600 were made from the Commonwealth Bank Business Transaction account. The total cash withdrawals during this period were $46,633, or approximately $2,500 per month, which was significantly less than the average of the cash withdrawals made over the entire period covered by the spreadsheet (being approximately $6,000 per month). Prior to 1 January 2021, the average cash withdrawals were approximately $9,000 per month.

Accordingly, a fairly simple analysis of the information in the spreadsheet (without the benefit of knowing the identity of the account holders of one of the accounts) shows that, if one excludes cash withdrawals from bank accounts where Graham was the sole or joint owner of the funds concerned and cash withdrawals from the trust bank account, the value of the cash withdrawals which are said to require investigation falls from $246,351.53 to $87,428.03, of which $50,278.03 pre-dated 1 January 2021. And, even if all cash withdrawals from the trust bank account, the joint account and the unnamed account after 1 January 2021 (which totalled $75,183.45) were found to be unauthorised appropriations of Wendy’s funds (which seems to me to be highly unlikely, if not impossible), the increase in the size of the estate is not likely to be so significant so as to materially increase the prospects of success of the prospective Part IV claim.

Despite the time available since the filing of the grounds and the filing of Mr Boffa’s affidavit, there is no evidence that either Karinna or those assisting her have undertaken the fairly rudimentary analysis above (which took a couple of hours to undertake) for the purposes of providing more convincing evidence in support of Karinna’s allegation that during Wendy’s lifetime, Graham made cash withdrawals from Wendy’s bank accounts which remain unaccounted for. Mr Boffa’s evidence that Graham’s share of the proceeds of sale from the Bentleigh property was deposited into the joint account was not contradicted by Karinna. There was no evidence from Bryce, who has held the EPOA since October 2020, and has had effective control of Wendy’s affairs since August 2021, to the effect that the unidentified bank account in the spreadsheet was in the name of Wendy alone, and there was no evidence of any request made to Graham to account for those funds.

Given the seriousness of the allegation against Graham to the effect that he has misappropriated Wendy’s funds, the obligations of parties and practitioners under the CPA, and the time available to compile and present the evidence in support of this allegation, the absence of cogent evidence to support the allegation is significant. The evidence, as it stands, does not raise a case for investigation that Graham ought to be passed over as executor because the appointment of an independent executor is likely to result in investigations and/or recoveries which would materially add to the size of the estate. To the extent that there are transactions upon the trust bank account which might cause concern, any accounting by Graham with respect to those transactions will not enlarge the estate. To the extent that there are transactions on the unnamed bank account which might cause concern, there is no evidence that any of these funds were Wendy’s funds, and a substantial proportion of these transactions occurred prior to Wendy losing capacity, taking a conservative view of when she lost capacity.

The position is to be contrasted with the facts and circumstances in Mataska,[38] where the relevant estate had been completely denuded by a transaction which took place in highly suspicious circumstances, for the sole benefit of the named executor.
[38][2013] VSC 62.

Accordingly, I am not satisfied that Karinna’s contention that she has the necessary standing to lodge the caveat has any real prospect of success.

However, if I am found to be wrong about the question of whether there is a real prospect that Karinna will be found to have standing to seek to pass over Graham as the executor of the estate, I would in any event strike out the caveat and grant summary judgment on the basis that Karinna has not made out a prima facie case that Graham should be passed over as the executor of the estate.

Karinna says that Graham should be passed over as executor (or at least, there is a prima facie case that warrants investigation as to whether he should be passed over as executor) on the following grounds:

(a) Graham’s ill-health;

(b) Graham is of unsound mind, and/or is incompetent;

(c) Graham has a conflict of duty and interest; and

(d) Graham is of bad character.

The first ground, ill-health, can be dealt with quite promptly. Ill-health alone is not and could not be a disqualifying factor. What needs to be established is that there is a real prospect of establishing that Graham’s health conditions incapacitate him from carrying out his duties as executor.

In my view, there is no real prospect of that proposition being established. The medical reports and other associated documents confirm that Graham does suffer, or has suffered from various chronic health conditions, for which he takes medication, some orthopaedic problems, and he has had some occasional acute illnesses, one of which required hospitalisation in 2022. However, none of these conditions or illnesses, which are relatively commonplace, particularly among older Australians, could ever be considered to incapacitate, at least for any significant amount of time, an executor from carrying out the task of administering what is a relatively simple estate. If Graham were to be passed over on this ground alone, a substantial proportion of the Australian population over the age of 50 would be disqualified from acting as an executor.

As for the question of whether there is a case for investigation as to whether Graham has the cognitive capacity to act as the executor, I accept that, given that there has been a formal diagnosis of dementia in the past, then some caution must be exercised in concluding that there is no case for further investigation regarding Graham’s cognitive capacity.

Doctor Karen Bird prepared her report in September 2022, at the request of Bryce’s solicitors. She undertook a thorough assessment and provided a detailed report, stating, among other things, that Graham ‘presents with a neuropsychological and clinical profile consistent with an early-stage dementia, with features of both Alzheimer’s and vascular etiology’, and that his decision-making capacity was impaired by difficulties with memory and executive functioning. A considerable focus of Dr Bird’s report was Graham’s hoarding issues and his lack of insight into those issues.

Doctor Leonie Keall prepared a report on 16 May 2023 upon the instructions of Graham’s solicitors. Dr Keall also conducted a very thorough assessment, over three separate sessions. Dr Keall had reviewed Dr Bird’s reports and other medical reports. She opined as follows:

Current neuropsychological assessment revealed essentially stable performances relative to the initial assessment in October 2022. There was evidence of slight improvement in some verbal memory performances and there was significant improvement on a visual problem-solving task. Many of Mr Hall’s new learning and memory performances were at age expectations. There were some variable inefficiencies in his verbal new learning and memory but these likely reflected the impact of his attentional difficulties rather than a primary memory problem. There was no evidence of an unusually rapid rate of forgetting, which is a hallmark feature of dementia of the Alzheimer’s type.
Mr Hall exhibited some difficulties with attention and cognitive inhibition. His other cognitive skills such as basic language, visuo-spatial processing, planning, and verbal reasoning were relatively preserved.
Mr Hall exhibits cognitive deficits on formal testing. He has deficits in attention and some executive abilities such as the ability to inhibit impulsive responding. I note that it has previously been documented that an MRI brain scan in October 2021 revealed minor atrophy with mild to moderate chronic vascular changes. Taking together the history and assessment findings, in my opinion Mr Hall’s current deficits are most likely due to a vascular cognitive impairment. This vascular cognitive impairment is a permanent cognitive disability.
There is nothing, however, in my opinion to suggest a dementing process at this time. I note in particular that the informant history indicates no pattern of progressive decline. The cognitive profile is not characteristic of a dementia of the Alzheimer’s type. There is no evidence of decline and in fact some areas of improvement on the current assessment relative to the assessment by Dr Bird in October 2022, though I acknowledge there is only a six-month separation between the two assessments.

Dr Keall opined that Graham has the capacity to be involved in financial decision making, but requires the assistance of a supportive administrator.

The VCAT member delivered written reasons on 21 November 2023. In the reasons, the member referred to the evidence of both Dr Bird and Dr Keall. The reasons record that Dr Keall gave evidence that Graham’s functional decline may have been related to non-cognitive factors, such as his changed circumstances. The VCAT member also recorded that Dr Bird accepted that Graham’s cognition and memory may have improved with a change in environment and circumstances, and that Dr Keall’s opinion, being more recent, may have been more reflective of Graham’s current cognitive capacity.

Further to the above, the more recent evidence regarding Graham’s cognitive capacity and mental state establishes that there has been a marked improvement since what seems to have been a crisis period in 2022. There was no contemporaneous evidence to contradict Mr Boffa’s evidence to the effect that he has found Graham well able to discuss financial matters with him, has been attending competently to his own affairs, and that there has been no sign of his hoarding behaviour returning. Further, since the making of the revocation order, he is presumed to be legally competent.

I accept that Mr Boffa is not a medical practitioner, but for the reasons set out earlier in these reasons, I also accept that Mr Boffa is in a good position to assess the impact of any cognitive impairment Graham may have on his day to day functioning and his ability to deal with financial matters. In any event, there is further, recent medical evidence relevant to the question of cognitive impairment. Dr Nadi Nahem, Graham’s general practitioner who made the original diagnosis of cognitive decline in September 2021 conducted the MMSE on 14 August 2024, where Graham achieved a score of 30/30. Dr Nahem also certified that Graham was fit to drive a motor vehicle.

The question of Graham’s capacity also has to be viewed in the context of the size and complexity of the estate, the support and assistance Graham has available to him, and the fact that Graham is currently the only beneficiary of the estate. The size of the estate is relatively modest, and currently comprises cash at bank, a refundable accommodation bond, and Wendy’s shares in the trustee. The only tasks required to be done are to recover the accommodation bond, which is presumably a straightforward matter, transfer Wendy’s shares in the trustee to himself (also a straightforward matter), investigate whether any of Wendy’s assets need to be brought back into the estate, and defend the prospective Part IV claim, if made.

When it comes to investigating whether any assets need to be brought back into the trust, this will presumably be a task which Graham will seek and obtain assistance of Mr Boffa and his solicitors. Likewise, I would expect that Graham would have the assistance of solicitors in defending the prospective Part IV claim.

Furthermore, the task of investigating whether any assets need to be brought back into the estate is not overly complex. I have said that I have dealt with the application on the assumption that Graham would not undertake any investigation and/or assessment of any cash withdrawals from Wendy’s accounts by him in the period prior to the appointment of the administrators. However, a prudent executor in Graham’s position, particularly in the context of the prospective Part IV claim, would take advice as to whether any of the transactions were untoward. As for any investigations into transactions involving Bryce, it would be a relatively straightforward matter for Graham, as the legal personal representative of Wendy, to instruct his solicitors to seek an accounting from Bryce for the period he held the EPOA and was the director of the trustee. Again, Graham’s solicitors and Mr Boffa can assist him in analysing any response, and in taking any appropriate action, if need be.[39]
[39]Indeed, while there is no direct evidence of this, senior counsel for Graham informed me that Graham has issued a proceeding in VCAT seeking all accounting from Bryce with respect to his conduct as the holder of the EPOA.

Finally, while I accept that, for present purposes, there is no real case to investigate that Graham lacks the capacity to undertake the administration of the estate, if the position deteriorated and Karinna did in fact acquire standing to intervene in the administration of the estate, it is always open for Karinna (or any other interested party) to take action to remove Graham as the executor of the estate should the position change.

As for the alleged conflict of duty and interest, Karinna relies upon two matters, being the alleged dissipation by Graham of cash in the joint account and the withdrawals from the trust bank account. I repeat my earlier observations to the effect that Karinna’s allegations regarding the alleged withdrawal of funds by Graham from the trust bank account are largely irrelevant to Graham’s role as executor, as assets held by the trust cannot be brought back into the estate.

As for the funds said to have been withdrawn from other bank accounts, including the joint account, I refer to my earlier analysis of the cash withdrawals itemised in the spreadsheet (see paragraphs 100 to 103 of these reasons), and the lack of any probative evidence adduced by Karinna to support an inference that Graham has misappropriated funds properly belonging to the estate. Rather, the evidence establishes that:

(a) nearly three quarters of the proceeds of sale of the Bentleigh property were paid to Bryce on behalf of Wendy;

(b) a substantial proportion of the cash withdrawals itemised in the spreadsheet were from Graham’s accounts;

(c) a substantial proportion of the cash withdrawals itemised in the spreadsheet were made in the period prior to Wendy losing capacity; and

(d) there was a considerable decline in the value of the cash withdrawals after Wendy moved into aged care in May 2021, consistent with there being less need for cash to fund the couple’s living expenses after that time.

Accordingly, the alleged conflict of interest and duty is illusory rather than real. Further, I agree that any concerns Karinna has or may have about Graham taking control of the trust are not relevant to the current application.

Further, while these matters were not the focus of Karinna’s submissions at the hearing of the application, the grounds provide some detailed particulars as to how it is said that Graham is irresponsible with money (referring to Graham’s preference for transacting in cash), and is not responsible with property (referring in particular to the hoarding behaviour). There is not much to be said about both of those issues: it is not yet against the law or completely beyond the pale to conduct business in cash. That Graham conducts his business in cash is understandable given the nature of the business concerned. As for the hoarding issue, the best (and uncontradicted) evidence available to me is that after the administrators cleaned out Graham’s home, the hoarding issue has not returned.

Again, the concerns raised by these issues need to be viewed in the context of the size and complexity of the estate. There is no case to investigate Graham’s suitability as executor based upon his alleged irresponsibility with money and/or property.

Finally, as for Graham’s alleged bad character and unpraiseworthy conduct, I note that neither Mr Boffa (nor Graham) deny the allegations in the grounds concerning Graham’s conduct, although Mr Boffa provided an explanation of sorts as to why Graham may have acted in the way that he did. Accordingly, there is nothing further required to ‘investigate’. I shall proceed on the basis that the matters referred to in this section of the grounds are true.

I largely accept the submissions advanced on behalf of Graham to the effect that Graham’s conduct is explicable in circumstances where his son, supported by his step-daughter, has, among other things, made an application for guardianship against his wishes, has made an application for a statutory will excluding him from the estate while Wendy lay dying in hospital, and opposed the application for the revocation order. It is correct to say that Graham has not been the main aggressor in the litigation involving the family. And, while I accept that some of his behaviour towards the administrators was unreasonable, it is understandable in the circumstances.

I accept that Graham’s conduct towards Karinna and the administrators has been intemperate to say the least. Further, I accept that Graham is likely not to be well disposed towards the prospective Part IV claim. However, I agree with the submissions advanced by senior counsel for Graham to the effect that the existence of family conflict alone cannot be grounds for disqualification of an executor, given the inherent likelihood of family conflict in this jurisdiction. A party seeking to rebut the presumption that executors can generally be relied upon to perform their duties properly must establish more than just family conflict: they must show that the family conflict would impede the proper administration of the estate.

Significantly, in most instances where this Court has removed or passed over an executor based upon conflict, the Court is generally concerned with circumstances where conflict between executors of an estate have caused a deadlock or substantial difficulties with finalising an estate. One exception is the case of Denby v Power,[40] where McMillan J removed executors who had actively sought to undermine the interests of the sole beneficiary of an estate in favour of the interests of non-beneficiaries. This is not the case here, where the named executor and sole beneficiary are one and the same.
[40][2016] VSC 535.

As for Graham’s attitude to the potential Part IV claim, I repeat the observations made during the course of the hearing of the application to the effect that there are rules and principles governing the litigation process which operate to deter parties to litigation from acting unreasonably. I have no reason to believe that Graham would not take legal advice when dealing with the prospective Part IV claim, if it eventuates.

As for the allegation of the effect that, by revoking or threatening to revoke the mirror will, Graham has acted or will act ‘disloyally’, I understand that to mean that Graham has been disloyal to Wendy, not disloyal to the estate. That may well represent a reasonable interpretation of Graham’s conduct and/or intentions, and maybe a ground for exercising the Court’s discretion in Karinna’s favour in the prospective Part IV claim should she establish an entitlement to further provision. However, in the absence of any evidence of any trust or binding contract arising from the making of the mirror wills, it cannot be that revoking or threatening to revoke the mirror will could be grounds for passing Graham over as executor, given the importance of the principle of freedom of testation.

To conclude, during the course of her submissions, counsel for Karinna emphasised the importance of considering the entire ‘narrative’ conveyed by the grounds and the evidence regarding Graham’s capacity, behaviour and character, rather than focussing upon whether any individual grounds or particulars are or are not made out. Having done so, it seems to me that the narrative is quite clear. Here, Graham, a financially independent man used to running his own affairs somewhat unravelled with Wendy’s declining health and admission to care. His hoarding tendencies got out of control, and he reacted to the appointment of the administrators, at the instigation of his children, unreasonably but understandably. However, with the assistance of professional and other social supports, he has passed through a very rough patch, and has come out the other side. In all the circumstances, and having regard in particular to the nature and the size of the estate, Karinna’s application to pass Graham over as executor, even if she could establish the necessary standing, has no real prospect of success.

For completeness, for all of the reasons outlined above, there is no basis for ordering that, notwithstanding the fact that Karinna’s claim to pass over Graham has no real prospect of success, the matter should proceed to trial pursuant to s 64 of the CPA. It is in fact in the interests of justice to summarily dismiss the proceeding. Karinna’s caveat is impeding the orderly administration of an otherwise simple estate, and in turn, is impeding Karinna’s ability to pursue the prospective Part IV claim.

Further, given that I have found that there is no real case for investigation into the question of whether Graham should be passed over as executor, it cannot be that the dispute is of such a nature that there should be a full trial on the merits. Karinna has had ample opportunity to put on evidence regarding, in particular, the alleged conflict of interest and duty, and has failed to adduce any evidence in support of her allegation that Graham may have misappropriated Wendy’s funds. Unlike in cases involving disputes about the validity of a will, it is not clear to me as to what additional evidence might be available at a trial which is now not available. Given the burden upon Karinna to establish that there was a real case for investigation, it is not appropriate to exercise the Court’s discretion under s 64 of the CPA to relieve her of that burden.

I shall hear further from counsel as to the form of order to give effect to these reasons, and the question of costs.

[2024] VSC 781

17 December 2024