Miller v Coward

[1998] VSC 47

SUPREME COURT OF VICTORIA

PRACTICE COURT JURISDICTION

Not Restricted

No. 5474 of 1998

STEWART JAMES MILLER	Plaintiff
v.
JUDITH ANNE COWARD (AS EXECUTOR OF THE	Defendant
ESTATE OF BRIAN ARTHUR COWARD)

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JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	17 AUGUST 1998
DATE OF JUDGMENT:	31 AUGUST 1998
MEDIA NEUTRAL CITATION:	[1998] VSC 47

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CATCHWORDS: Executor - Application to remove - Conflict of duty and interest -
Potential for mischief.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. P. Murley	Raelene A. Murley
For the Defendant	Ms. C. Sparke	Nicholas O'Donohue & Co.
For the Applicant	Mr. K. Sparks	Gary C. Burgess

HIS HONOUR:

1. This is an application by a non-party to the proceeding to remove the defendant who is sued in her capacity as executor of the estate of Brian Coward deceased, as executor of the estate. The somewhat unusual background to the application may be summarised as follows.

2. In 1992 the deceased and an acquaintance named Stewart James Miller who is the plaintiff in the proceeding, agreed that the deceased would purchase each week tickets in the Tattslotto lottery on the joint behalf of the deceased and the plaintiff. The agreement was that they would share equally in the cost of the tickets and any prizes a ticket might win. If I may say so, a very common enterprise in this country.

3. Between June 1992 and July 1996 the deceased purchased Tattslotto tickets on a regular weekly basis, the plaintiff reimbursed the deceased for half the cost of the tickets, and the plaintiff and the deceased shared equally in a number of small prizes.

4. On 18 February 1995 a ticket purchased at the request of the deceased by the defendant, who is a niece of the deceased, won a prize of $1,090,909. The deceased did not give the plaintiff half the prize. On 11 May 1997 the deceased died and on 11 August 1997 probate of his will was granted to the defendant. On 20 April 1998 the plaintiff filed this proceeding in the Court whereby he seeks to recover what he contends is his share of the prize from the deceased's estate.

5. The deceased was survived by three adult children who are the beneficiaries of his estate. It is the three beneficiaries who wish to have the defendant removed as executor of the deceased's estate. The ground upon which they seek to have the defendant removed is that the defendant is not defending the proceeding brought against the estate vigorously enough, and indeed, has expressed the view that the plaintiff's claim should be accepted by the estate.

6. The evidentiary basis for the beneficiaries complaint appears in open correspondence passing between the solicitors for the parties.

7. On 15 August 1997 the defendant's solicitors wrote the following letter to the beneficiaries solicitor:

   "Gary C. Burgess
   Barrister & Solicitor
   PO Box 229

   BELGRAVE VIC 3160.

   Dear Sir,

   Estate Brian Arthur Coward

   We refer to your letter of 13 August 1997. Can you please note that
   Jan Williamson of our office is now handling this matter.

   We confirm that we act for the Executor of the deceased's Will, Judith Anne Coward. We further confirm that Probate was granted on 11 August 1997.

   As requested we enclose the following:

   1.        Copy letter from Eastside Conveyancing Service to our firm dated 12 June 1997.

   2.        Copy letter dated 23 June 1997 from Eastside Conveyancing Service to our firm.

   We advise that it is our recommendation that the claim of Mr. Miller be accepted by the Executor. We are instructed that whilst the deceased resided with the Executor's family the Executor would put the Tattslotto on for the deceased and Mr. Miller. The Executor and her family will provide Affidavits that it was their understanding that a partnership existed between the deceased and Mr. Miller and that Mr. Miller would reimburse his share of the tickets to the deceased on a regular basis.

   We are instructed that your clients deny the claim that a partnership existed and if your clients wish to dispute the claim they should provide compelling reasons and information why the claim should not be admitted. We would ask those reasons be provided to us within 14 days to enable us to adequately consider those reasons.

   We await your early response.

   Yours faithfully,

   Jan Williamson (Ms.)

   Senior Litigation Lawyer

   NICHOLAS O'DONOHUE & CO."

8. The beneficiaries' solicitor's reply to that letter is dated 1 September 1997 and reads:

   "Nicholas O'Donohue & Co.
   180 Queen Street

   MELBOURNE VIC. 3000.

   Dear Madam,

   Re: Estate of Brian Arthur Coward

   I thank you for your letter of the 15th August 1997 which I have referred to my clients for their instructions.

   I should be pleased if you would provide me with concise details as to how your client and her family came to the understanding that the alleged partnership existed.

   I should also be pleased if you would kindly provide me with copies of any relevant documents you retain including any correspondence between your client, her family and Stuart Miller.

   Thanking you in anticipation.

   Yours truly,
   GARY C. BURGESS."

9. Reminder letters in relation to the matter were sent by the defendant's solicitors to the beneficiaries' solicitor on 17 December and 16 March 1998 but the information sought in the last paragraph of the letter of 15 August 1997 has not been forthcoming. Indeed the request for the information has still not been complied with.

10. On 30 April 1998 the defendant's solicitors wrote the following letter to the solicitor for the beneficiaries:

    "Gary C. Burgess
    Barrister & Solicitor
    PO Box 229

    BELGRAVE VIC 3160.

    Dear Sir

    Estate of Brian Arthur Coward deceased

    We refer to previous correspondence and note that we have not received any response from you regarding your clients' attitude to the claim by Mr. Miller.

    Our client has now been served with a Supreme Court Writ and we enclose a copy of that for your information. A Notice of Appearance has been filed on behalf of the Defendant and we have also filed and served a Request for Further and Better Particulars, a copy of which is enclosed.

    A Defence is required to be filed and served by 1 June 1998.

    On the evidence in our possession it is our opinion that the Plaintiff will probably succeed in his claim. Your clients, as yet have not been able to supply us with evidence which would tend to refute the Plaintiff's claim and the evidence of Mrs. Joan Coward and to a lesser extent Mrs. Judith Coward. For the claim to be successfully defended your clients need to provide us with compelling reasons why the claim should not be admitted.

    Previously we suggested a without prejudice round table conference be held in an attempt to settle the matter. There is no reason why that still cannot be held either informally or as a formal mediation with a view to attempt to negotiate a settlement for an amount less than the amount claimed, but again we would need some evidence which could be used to refute or weaken the claim.

    We would ask that you provide us with your clients' instructions and comments in relation to the claim, as requested previously, over the past 6-8 months and that be provided to us as a matter of urgency so that we can formulate a Defence.

    Further, provide us with your clients' instructions regarding a without prejudice conference or formal mediation to be held at this early stage.

    We look forward to your early response in relation to these matters.

    We also refer to our letter of 16 March 1998 from Miss Coral Leech of our Estates Department. She has not received a response to that letter and requires those tax returns and financial information to be provided as a matter of urgency. It may now be the fact that penalties may be incurred by theTaxation Office and we would ask that information be provided to us.

    Yours faithfully

    Jan Williamson (Ms.)
    Senior Litigation Lawyer

    NICHOLAS O'DONOHUE & CO.

    Attachment: Writ

Request for Further & Better Particulars."

1. The parties are now at loggerheads in relation to the proceeding - hence the present application on the part of the beneficiaries.

2. It is now well established that if an executor faces a conflict of duty and interest in performing his or her functions such as to create a potential for mischief of a level of seriousness that is reasonably high, the Court may remove that executor and appoint an administrator in his or her stead. See Monty Financial Services Ltd. v. Delmo (1996) 1 V.R. 65 at p.83 and Gowans v. Watkins & Anor. (Teague, J., unreported 21 February 1996 at p.14).

3. Can it be said in the present case that to leave the affairs of the estate in the hands of the defendant will create such a potential for mischief? In my opinion it cannot. The fact that an executor may be aware of matters supporting a claim made against the estate by a creditor, and indeed able to give evidence in support of such a claim, is not of itself sufficient in my opinion to justify the removal of that person as executor of the estate. In the present case the defendant, through her solicitor, is defending the claim brought by the plaintiff and there is no sound reason for believing she will not continue to do so. Indeed if anyone can be criticised insofar as the defence of this proceeding is concerned it is the beneficiaries themselves. They have steadfastly declined to provide the defendant's solicitors with the evidentiary material on which they rely in resisting the plaintiff's claim and if that has had a prejudicial effect upon the defendant's defence of the claim it is something of their own doing. It is unfortunate that in the letter of 15 August 1997 the defendant's solicitors were so forthright in stating that the defendant and her family would provide affidavits as to their understanding of the partnership between the plaintiff and the deceased, but if in such affidavits the defendant and her family are doing no more than truthfully recording their recollections in the matter, how can it be said that that is creating a potential for mischief.

4. The summons filed on behalf of Lorraine Margaret Coward on 6 August 1998 is dismissed. I order that the said Lorraine Margaret Coward pay the plaintiff and the defendant's costs of the application including any reserved costs.

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