In the matter of the Will of Dorothea Agnes Baird

[2019] VSC 59

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

TRUSTS, EQUITY & PROBATE LIST

S ECI 2019 00203

IN THE MATTER of the Will of DOROTHEA AGNES BAIRD

PETER MICHAEL BAIRD (as the Executor of the Will of Dorothea Agnes Baird)	Plaintiff
v
MICHAEL JOHN BAIRD	First Defendant
and
REGISTRAR OF TITLES	Second Defendant

---

JUDGE:	KEOGH J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 January 2019
DATE OF JUDGMENT:	13 February 2019
CASE MAY BE CITED AS:	In the matter of the Will of Dorothea Agnes Baird
MEDIUM NEUTRAL CITATION:	[2019] VSC 59

---

REAL PROPERTY – Application to remove caveats – Administration of estate – Caveats lodged by residuary beneficiary – No serious question to be tried – Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12.

SUMMARY RECOVERY OF LAND – Application by executor of deceased estate under order 53 Supreme Court (General Civil Procedure) Rules 2015 for orders to allow sale of deceased’s property – Residuary beneficiary in possession as licensee – Order for possession made – Parker v Mielicki [2003] VSC 263 (4 July 2003) – Kempson v Davison [2016] VSC 366 (27 June 2016).

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	B Barr	Matthew Delahunty Lawyer
For the First Defendant	B Rothschild (Solicitor)	Brendan Rothschild Legal Group
For the Second Defendant	No appearance

HIS HONOUR:

1. Dorothea Agnes Baird died on 25 April 2018.  Her will, dated 25 January 2012, named the plaintiff, Peter Baird, executor of her estate.  On 24 August 2018 orders were made proving the will and appointing Peter as the executor of Dorothea’s estate.

1. Peter and the first defendant, Michael Baird, are Dorothea’s sons.  In this proceeding Peter applied for orders to remove caveats lodged by Michael against two estate properties and an order for possession of one of the properties which Michael currently occupies.  Michael opposed Peter’s application on the basis that as a beneficiary of Dorothea’s estate he had an interest in the properties which entitled him to maintain the caveats and to remain in possession.  When I heard this matter in the Practice Court on 24 January 2014 I made the orders Peter sought and provided brief reasons.  I now set out my reasons.

Background

1. Dorothea’s will provided for the following gifts:

(a)   Dorothea’s one-third interest in a property at 84 Chisholm Road, Wonthaggi, being the property contained in Certificate of Title Volume 10028 Folio 822 (the ‘Wonthaggi property’), was left to Peter.

(b)   Royalties from Fair Weather Homes (a business formerly operated by Dorothea’s late husband) were left to Peter.

(c)    $50,000 was given to Dorothea’s foster son, Allan Queary, provided he survived Dorothea, and otherwise to Peter and Michael in equal shares.

(d)  $10,000 was given to Dorothea’s grandson (Michael’s son), Jackson Cook-Baird.

(e)   After payment of estate debts and expenses the residuary estate was left to Peter and Michael in equal shares as tenants in common.

1. Allan Queary died in 2017.  Accordingly, the gift of $50,000 was to be divided equally between Michael and Peter.

1. The inventory of assets filed in support of the application for probate discloses that Dorothea’s estate was comprised as follows:

(a)   a property at 3 Mcilwraith Road, Rhyll, being the land contained in Certificate of Title Volume 10013 Folio 772 (the ‘Rhyll property’);

(b)   the one-third interest in the Wonthaggi property;

(c)    personal estate valued at $64,303.02; and

(d)  a liability of $3,921.36.

1. Michael has lived at the Rhyll property, rent-free, since 2012.

1. From about July 2018, Peter had discussions with Michael in relation to the sale of the Rhyll property.

1. An email from Michael’s solicitor to the estate solicitor sent on 5 September 2017 reads in part:

Our client would like to know when the uncontested $50,000 can be divided and released.

1. In early October an interim distribution of $25,000 each was made to Peter and Michael, which was payment of the specific gift referred to in paragraph 3(c) above.

1. Peter has personally paid estate expenses of approximately $20,000.

1. The estate has liabilities which total almost $11,000.  Further expenses for which the estate will be liable will accrue in the near future.

1. Through his solicitors Michael has given notice that he intends to make a claim against the estate for family provision pursuant to s 91 of the Administration and Probate Act 1958 (Vic). Michael proposed that the claim be mediated before proceedings are issued.

1. On 6 November 2018, Michael’s solicitor emailed the estate solicitor advising that Michael had paid $10,000 to Jackson in satisfaction of his estate entitlement, and requesting an adjustment for that payment on distribution of the estate.  Currently, there is no evidence that Jackson acknowledged receipt of $10,000 in satisfaction of his estate entitlement.

1. In December Peter instructed the estate agents to sell the Rhyll property.  In late December, the agents, acting on Peter’s instructions, advertised the Rhyll property for sale by expressions of interest, to close on 31 January 2019.  The closure date of the expressions of interest campaign has now been extended to 22 February.  The parties are in dispute as to whether, and the extent to which, Michael has acted to frustrate the sale and to prevent repairs and maintenance to the property to prepare it for sale.

1. Through his solicitor, Michael lodged caveats against the Rhyll property and the Wonthaggi property, stating as the grounds of his claim that he is a beneficiary under Dorothea’s will.  Michael declined requests to remove the caveats.  Peter requested that Michael vacate the Rhyll property to allow for the sale to proceed.  Michael declined to do so.  He wishes to retain the property and maintains he has an interest in it, under the will which entitles him to maintain the caveat, and to remain in possession.

1. Peter issued this proceeding on 18 January 2019, and filed a summons the same day seeking orders for removal of the caveats, possession of the Rhyll property, and an injunction restraining Michael from interfering with the sale of the property.  On 23 January Michael’s lawyers filed a document titled, ‘Defence and Counterclaim’, in which he opposed the orders sought by Peter, and claimed additional relief that Peter be removed as executor of the estate and, if the Rhyll property was to be sold, an order freezing the proceeds of sale and Peter’s interest in the Wonthaggi property pending resolution of the proposed family maintenance claim.  At the hearing on 24 January Michael did not persist with his claim for this additional relief.

1. I was provided with an affidavit of Peter Baird sworn 18 January, and an affidavit of Michael affirmed 23 January, together with various exhibits.  Those affidavits went in some detail to contentious matters which are not strictly relevant to the orders I have made.  There was also a brief affidavit of Patricia Martin, which was of no significance to the orders sought.

Analysis

1. For the caveats to be maintained Michael was required to establish, first, that there is a serious question to be tried that he has the interest in the Wonthaggi and Rhyll properties which he claims, and second that the balance of convenience favours the caveats being maintained.[1]

   [1]Piroshenko v Grojsman (2010) 27 VR 489 [7].

1. Peter applied under order 53 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) for an order for summary possession of the Rhyll property. A prerequisite to Peter succeeding with the application was that Michael, having been a licensee of the Rhyll property, remained in occupation without Peter’s licence or consent. The relevant authorities, and matters to consider on such an application, were set out in the judgment of Derham AsJ in Framlingham Aboriginal Trust v McGuinness and Chatfield.[2]  I adopt his Honour’s helpful summary.

   [2][2014] VSC 241 (23 May 2014) [34]–[45].

1. Michael submitted the residuary estate will consist solely of the Rhyll property, and in those circumstances, as residuary beneficiary, it was arguable he had an equitable interest in the property pursuant to Dorothea’s will which entitled him to maintain the caveats and to remain in possession of the Rhyll property.

1. I rejected that submission for the following reasons.  First, as a residuary beneficiary Michael does not have a legal or equitable interest in a specific asset of the estate during the course of administration. A beneficiary only has a chose in action, or personal right, to compel proper administration of the estate by the executor.  Further, the residue does not come into existence until administration of the estate is complete.[3]  Second, the proposed family provision claim does not give Michael an interest in the property.[4]  Third, Michael’s submission ignored the funeral and other estate expenses which continue to accrue.  Peter has paid over $20,000 on behalf of the estate already and further expenses are accumulating.  The legal costs to the estate in relation to the proposed family provision claim, which may be significant, are likely to be paid from the residue.  Consequently, the residuary estate will amount to something less than the value of the Rhyll property. 

   [3]Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12, 23 (‘Livingston’).

   [4]Parker v Mielicki [2003] VSC 263 (4 July 2003) [7]–[9]; Kempson v Davison [2016] VSC 366 (27 June 2016) [14].

1. Michael does not have an arguable case to an interest in the Rhyll property (or the Wonthaggi property). Accordingly, there is no serious question to be tried,[5] and the caveats should be removed.

   [5]Meynert v Leafdale Pty Ltd [2005] WASC 102 (25 May 2005) [20]; Gangemi v Gangemi [2009] WASC 195 (22 July 2009) [51]; Fazio v Fazio [2013] WASC 443 (13 December 2013) [58]; Briffa v Briffa [2016] WASC 406 (14 December 2016) [18].

1. If it were necessary, I would have determined the balance of convenience favoured removal of the caveats because:

(a)   the estate cannot be administered unless this occurs;

(b)   Peter and Michael both have a significant interest in administration and distribution of the estate;

(c)    estate liabilities are accumulating, and cannot be satisfied until the estate is administered and distributed; and

(d)  Michael’s interest in residing rent free at the Rhyll property, to the extent it is a relevant matter to consider, is addressed by the stay I have, in effect, granted in respect of the order for possession. 

1. From the time he commenced residing at the Rhyll property Michael was a licensee.  He has now been called on by Peter to leave the property and he has no right to remain.[6]

   [6]Parker v Mielicki [2003] VSC 263 (4 July 2003) [7]–[9]; Kempson v Davison [2016] VSC 366 (27 June 2016) [14].

1. I concluded that Michael should be allowed 60 days to vacate the Rhyll property.  For the purposes of this application I accept that Michael suffers health problems and is dependent on Centrelink benefits, and that this will make relocation difficult.  On the other hand, Michael has had the benefit of the $25,000 distribution made late last year, though the funds available to him are likely to reduce with time.  As stated above, Michael has an interest in the administration and distribution of the estate, which will provide him with access to considerable funds.  Possession of the Rhyll property by Michael is delaying sale of the property and administration of the estate.  Balancing all these issues, I consider an effective stay of 60 days on the order for possession to be appropriate.

1. There is a three-bedroom residence on the Rhyll property.  Michael occupies one of those bedrooms.  In part, the dispute between the parties relates to the condition of Michael’s bedroom, and the inability of Peter to gain access to the bedroom for tradespeople to undertake painting and maintenance, and in relation to the proposed sale.  Michael argues that for so long as he remains in possession, he should be entitled to quiet enjoyment of his bedroom.  Peter has duties in relation to estate property, which he must perform.  Arguments about access to the bedroom while Michael remains at the Rhyll property will only inflame tensions between the parties and make it more difficult to resolve outstanding issues in relation to the estate, including the proposed family provision claim.  The issue of Michael’s quiet enjoyment of his bedroom during the period until the order for possession comes into effect is best resolved by Peter giving an undertaking to provide at least seven days’ notice of any intention to access the bedroom, which he agreed to do. 

1. Peter submitted I should grant an injunction to prevent Michael interfering with sale of the Rhyll property because Michael had refused access to his bedroom for painting and maintenance work, refused the estate agents’ access to the Rhyll property, and refused to remove the caveat, which strongly indicate an intention to frustrate sale of the Rhyll property.  In my view, the circumstances do not justify granting the injunction.  Michael’s actions to date have been motivated by a belief that he has a proprietary interest in the Rhyll property, and his strong desire to keep the property after resolution of the family provision dispute and distribution of the estate.  Those circumstances are altered by the orders I will make.  Michael will not be in possession of the Rhyll property when the next serious steps are taken to sell the property.  Accordingly, I refused Peter’s application for injunctive relief.

Conclusion

1. For the above reasons I ordered that;

(a) Pursuant to section 90(3) of the Transfer of Land Act 1958 (Vic) the second defendant is ordered to remove caveat AR495653S from the title of the land situated at 3 McIlwraith Road, Rhyll and contained in Certificate of Title Volume 10013 Folio 772.

(b) Pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic) the second defendant is ordered to remove caveat AR495677C from the title of the land situated at 84 Chisholm, Wonthaggi and contained in Certificate of Title Volume 10028 Folio 822.

(c)    Within 60 days the first defendant vacate and provide the plaintiff with vacant possession of the property situated at 3 McIlwraith Road, Rhyll.

(d)  The first defendant pay the plaintiff’s costs of and incidental to the proceeding on a Trustee basis, such costs to be paid out of the first defendant’s share of the estate of Dorothea Agnes Baird.

(e)   The proceeding is otherwise dismissed.