Kirsten v Miller

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
KIRSTEN & ANOR v MILLER
[2023] SASC 116
Reasons for Decision of the Honourable Justice Stein
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - PROCEDURE
The applicants filed an originating application seeking orders for the revocation of a grant of probate in the estate of Detlef John Kirsten to the respondent and the removal of the respondent as the trustee of a testamentary trust established under the will of Detlef John Kirsten. The respondent sought an order that the action continue on pleadings.
Held:
1.The application for the proceedings to continue on pleadings is refused.
2.The applicants are to file further affidavit material to articulate the basis for removal of the respondent as trustee of the testamentary trust. The parties will be heard in relation to a timetable for filing further affidavit and responding affidavit material.

Uniform Civil Rules 2020 (SA); Trustee Act 1936 (SA), referred to.
Neagle v Executor Trustee Australia Ltd [2006] SASC 383; Jerome Properties Pty Ltd v Hamilton [2021] SASC 77, considered.

KIRSTEN & ANOR v MILLER
[2023] SASC 116
Civil: Application

STEIN J: The applicants, Ernst and Karl Kirsten, have filed an originating application seeking orders for the revocation of a grant of probate in the estate of Detlef John Kirsten (the “deceased”) to Ms Miller, the respondent, and for the removal of Ms Miller as trustee of a testamentary trust established under the deceased’s will.
The originating application is supported by two affidavits. The main supporting affidavit is that of Mr Dominic Calabro, solicitor for the applicants, made 11 May 2023. The basis for the application, expressed in very general terms, is that the respondent has breached her duties in conflict of interest, neglected her duties and failed to account.
The respondent has sought an order that the action proceed on pleadings. The primary basis for the application is that the application and supporting affidavits do not provide fair notice of the applicants’ case and that it would facilitate the just, efficient, timely and cost effective disposition of the proceedings for the action to proceed on pleadings.
Respondent’s submissions
The respondent submits that to give fair notice of the case to be met, the applicants need to make clear what are the asserted actions which amount to dereliction of duty by the respondent and what conflicts are alleged and on what basis.
The respondent complains that the supporting affidavit of Mr Calabro is not as precise as practicable, contains inconsistencies and deficiencies, contains material the relevance of which is not clear and does not give fair notice.
The respondent also complains that to require the respondent to respond would be wasteful of costs including in preparation for trial and at trial.
Particular criticisms are made of the Calabro affidavit which I will not summarise fully. One such criticism is that the grounds set out in [3] and [60] of Mr Calabro’s affidavit are inconsistent.
The respondent submits that the affidavits fail to provide any details of the basis upon which the removal of the respondent as trustee of the testamentary trust is sought.
Applicants’ submissions
Pursuant to the Uniform Civil Rules 2020 (SA) and Trustee Act 1936 (SA), probate actions and proceedings for the removal of a trustee are to be by way of application and supporting affidavit, as opposed to pleadings. The applicants submit that the test for whether to order pleadings is one of the interests of justice.[1]
[1] Neagle v Executor Trustee Australia Ltd [2006] SASC 383; Jerome Properties Pty Ltd v Hamilton [2021] SASC 77.
The applicants dispute the assertion that the affidavit of Mr Calabro does not give fair notice of the case to be met and contend the affidavit clearly identifies the grounds for removal.
The applicants submit there is no inconsistency between [3] and [60] of Mr Calabro’s affidavit and [60] includes additional grounds.
The applicants contend that the respondent’s submissions do not indicate that the respondent is confused about the allegations, but rather go to the substantive merits of the application for removal.
The applicants dispute that the respondent will be put to considerable cost in responding to the affidavit material or that the court will be burdened with a mass of potentially irrelevant documents.
The applicants contend that any pleadings would repeat the complaints made in the affidavit and the respondent can accept or reject allegations in the affidavit and address them by response and responding affidavits.
The applicants express concern that if the action is to proceed on pleadings, disputes may arise regarding the pleadings, increasing cost and delay. The applicants contend that any pleading will simply repeat the allegations in the affidavit of Mr Calabro.
Analysis of Mr Calabro’s affidavit
Mr Calabro’s affidavit sets out the grounds upon which the orders are sought in [3] and [60]. The affidavit deposes to a number of matters including aspects of the will of the deceased, the deceased’s shareholdings in various companies, the appointment and removal of Karl Kirsten as director of various companies, the filing of the statement of assets and liabilities, dealings with certain shares and the history of various proceedings commenced in this Court and in the Federal Court.
Paragraph 3 of the affidavit asserts in general terms that the respondent has breached her duties in conflict of interest by not getting in estate assets and instead asserting those assets are assets of a trust in which she is the primary nominated beneficiary; the respondent has engaged in litigation in furtherance of the conflict; the respondent has neglected her duties by failing to disclose certain assets of the deceased; the respondent has engaged in pointless litigation involving assets of no value; the respondent has caused unnecessary and significant legal costs and the respondent has failed to account to the applicants. Paragraph 60 refers more expressly to a failure to get in for the estate certain Sound Diagnostic shares; the respondent asserting that those shares are held on trust for the Kirsten Miller Investment Trust (“KMI Trust”) of which she is a beneficiary; the respondent taking steps to deregister the trustee of the KMI Trust; the fact the respondent has the power of appointment of the trustee of the KMI Trust; the respondent prosecuting proceedings against the best interests of the estate; the respondent causing costs to be incurred in substantial litigation; the respondent neglecting obligations by dealing with the Sound Diagnostic shares prior to disclosing them; engaging in pointless litigation and failing to account to the applicants. Paragraph 60 asserts that the respondent has a conflict of interest and it is appropriate an independent executor be appointed.
Paragraphs 3 and 60 largely overlap. Paragraph 3 is articulated more broadly and in some respects [60] is more detailed.
The applicants’ submissions explain which paragraphs of the affidavit are provided for background context and which relate to the assertions of conflict, failure to perform duty, the conduct of the litigation and the failure to account.
Some of the complaints made by the respondent are matters which relate to the merits and the likely defence of the action.
In some respects, there is a lack of precision in the affidavit, for example, there are references to court proceedings without specifying which proceedings. Some matters are expressed generally, such as general references to acts being contrary to the best interests of the estate without specifying why it is said that the conduct is contrary to those best interests. However, I consider that when [3] and [60] of the affidavit of Mr Calabro are read together, and in the context of the balance of the affidavit, it is tolerably clear that the applicants’ application for revocation is based on the following contentions:
1.The respondent is in a position of conflict between an asserted duty to get in for the estate and distribute the shares/proceeds of the sale of the Sound Diagnostic shares and an asserted self interest in alleging those shares/sale proceeds are held on trust for the KMI Trust of which she is a beneficiary and has a power of appointment of the trustee.
2.The respondent has acted in conflict in failing to take steps to get in the Sound Diagnostic shares for the estate, by asserting those shares are not estate assets and by actively prosecuting litigation in this Court in support of that position at significant cost.
3.The respondent has failed properly to perform her duties as executor by the respondent transferring Sound Diagnostic shares to herself personally prior to disclosing them and by demanding the transfer of the shares the subject of the Federal Court Action prior to making disclosure of them.
4.The respondent has engaged in costly litigation in the Federal Court to obtain the transfer of shares in five companies which are said to be of no value.
5.The respondent has failed to account to the applicants upon request.
However, the affidavit does not specify in any way which of the allegations are relied upon in relation to the application to remove the respondent as the trustee of the testamentary trust. If the same matters are relied upon, there is no explanation of the basis upon which those matters relate to the respondent’s role as trustee of the testamentary trust or give rise to the application for removal.
While the respondent complains of the relevance of some paragraphs, the applicants submit those paragraphs provide background and context to the allegations. Some of those matters concern the history of the various proceedings which relate to the disputes between the parties. It is not apparent that there is any significant contest in relation to the history of steps taken. I am also not persuaded that being required to respond would be unduly difficult for the respondent.
If an order is made requiring the material filed by way of affidavit to be dealt with in pleadings, it will result in cost to all parties, further delay and give rise to the associated potential for further pleadings arguments, which may be likely given the submissions made by the respondent.
There is nevertheless force in the respondent’s submissions in relation to the lack of explanation of the basis for removal of the respondent as trustee of the testamentary trust.
Accordingly, while I do not consider it in the interests of justice to make an order for the action to proceed on pleadings, I consider it appropriate to make an order for the applicants to file further affidavit material to articulate with clarity the basis for removal of the respondent as trustee of the testamentary trust. Further, if the applicants base, or intend to base, their originating application on any grounds in addition to those I have set out in [21] above, or if the applicants intend to support their originating application with any factual material in addition to that referred to in the supporting affidavits filed thus far, those additional matters will need to be addressed in the further affidavit material. For example, if the applicants intend to rely on an allegation of conflict based on the respondent’s position in relation to a trust other than the KMI Trust, that should be specified. If additional grounds are not clearly specified, the respondent will have a basis to assert she has not been put on notice of any such additional grounds.
I will hear the parties in relation to a timetable for the filing of further affidavit material and responding affidavit material. I will make orders for the filing of that material after hearing from the parties.
Orders
1.The oral application made on 25 May 2023 for the proceedings to continue on pleadings is refused.
2.The parties are to notify Chambers in relation to the orders they seek to give effect to these reasons.

[2023] SASC 116

15 August 2023