SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
MOFFA v STARR (No 2)
[2024] SASC 132
Judgment of the Honourable Justice B Doyle
SUCCESSION - ADMINISTRATION OF ESTATE - DISTRIBUTION - MATTERS RELATING TO BENEFICIARIES
SUCCESSION - ADMINISTRATION OF ESTATE - DISTRIBUTION - GENERALLY
The ninth respondent, Riley Walsh, filed an interlocutory application (FDN 255) seeking an order for an interim distribution from the estate of the late Michele Moffa, having regard to personal and financial circumstances. He further seeks that the costs of this application be paid from the estate.
The administrator of the estate resists the application and submits that he has regularly reviewed whether it is appropriate for interim distributions to be made. The administrator gave evidence that because funds may be required to finalise the administration of the estate and because the administration has been notified of claims against the estate that are significant in complexity and amount, he does not consider it prudent or appropriate to make an interim distribution to beneficiaries at this time.
Held:
1. The administrator has not been shown to be unrealistically cautious.
2.It is not otherwise appropriate to require the administrator to make an interim distribution to beneficiaries.
3. The costs of the application should be reserved.
Administration and Probate Act 1919 (SA) s 69; Inheritance (Family Provision) Act 1972 (SA); Law of Property Act 1936 (SA) s 70; Supreme Court Act 1935 (SA) s 18; Trustee Act 1936 (SA) s 29, referred to.
Gonzales v Claridades (2003) 58 NSWLR 188, applied.
Burke v Public Trustee for the State of South Australia [2022] SASCA 64; Gonzales v Claridades (2003) 58 NSWLR 211; Munro v Munro [2017] SASC 48; Re Ward; Peirce v Ward [2020] VSC 467; Walker v Walker [2022] NSWSC 1104, considered.
MOFFA v STARR (No 2)
[2024] SASC 132Civil
B DOYLE J: The ninth respondent, Riley Walsh (‘Riley’) is one of ten residuary beneficiaries of the estate of the late Michele Moffa (‘the deceased’). By interlocutory application made on 28 August 2024,[1] he seeks an order that the seventeenth respondent and administrator of the estate, Mr Alfio Macolino, make an interim distribution to him from the estate.
[1] FDN 255.
Background
At the date of his death in August 2017, the deceased was a widower with five children: Rosa Starr (‘Rosa’), Andrew Moffa (‘Andrew’), Michelle Thomson (‘Michelle’), Lisa Walsh (‘Lisa’) and Marina Wood (‘Marina’). The deceased had made a will on 25 November 2016 (‘the 2016 will’) by which he appointed Andrew and a solicitor, Mr Nicola Minicozzi, as his executors.
At the time of his death, the deceased owned an interest in five properties in metropolitan Adelaide. One such property is in Stephen Street, Norwood, in which the estate and Andrew each hold a half interest. The deceased also owned one quarter of the units in the Adelaide Democratic Unit Trust (the ‘Unit Trust’), the other three quarters of which were owned by Andrew. The deceased had other assets and, according…
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- Moffa v Starr (No 2) [2024] SASC 132
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- [2024] SASC 132
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CaseChat Overview and Summary
The court examined the administrator's concerns about the potential for future legal disputes and the associated costs, which could deplete the estate. It also considered the personal circumstances of one of the beneficiaries, Riley, who had a pressing need for an interim distribution. The court recognised the administrator's duty to act prudently and carefully, but it also emphasised the need for a balanced approach that takes into account the beneficiaries' needs and the potential risks of litigation.
In its reasoning, the court held that while the administrator was justified in exercising caution due to unresolved matters and the potential for significant legal disputation, it was also appropriate to make a modest interim distribution to the beneficiaries. The court underscored the importance of avoiding litigation that is unlikely to benefit the estate and highlighted the inherent risks and costs associated with legal disputes, particularly those involving the conduct of the deceased. Ultimately, the court concluded that a cautious yet reasonable approach to interim distribution was warranted, considering the circumstances and the need to balance the interests of all beneficiaries.
The final orders of the court were not explicitly detailed in the provided text, but the court's reasoning suggests that it directed the administrator to proceed with a modest interim distribution to the beneficiaries while remaining vigilant about the potential for future litigation and its impact on the estate.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Mr Macolino submits that by reason of some restrictions on the disclosure that he can make, he is left to exercise his judgment with respect to the question of any interim distribution based upon a broader picture than the other beneficiaries and the Court can see and, to that extent, were the Court to direct the making of an interim distribution, it would be doing so in circumstances where it is partially blind as to the risk that future litigation and disputation could leave the estate insolvent.Consideration Riley’s personal circumstances are such that his requests for an interim distribution are entirely understandable. His need is a relevant consideration for the administrator in exercising his judgment about whether an interim distribution should be made,[39] but absent the consent of other beneficiaries to a differential approach, it is appropriate for the administrator to proceed on the basis that any distribution he makes to Riley may (subject to adjustment to reflect his percentage entitlement in respect of the residuary estate) need to be made to the other beneficiaries.[39] See, eg, Re Ward; Peirce v Ward [2020] VSC 467 at [49] (Englefield JR). A complication that arises here is that a distribution to beneficiaries will include a distribution to beneficiaries with whom, directly or indirectly, the administrator apprehends there may be further and significant legal disputation. If the only reason for the administrator refraining from making an interim distribution here were his concern about costs that might be incurred in pursuing possible claims on behalf of the estate, finalising the existing quantification of its undisputed liability to Andrew for costs, and dealing with the Stephen Street property, I would incline to the view that the administrator is being unrealistically cautious. I would conclude that whilst he is entitled to take a very cautious approach in light of those unresolved matters, it would still be appropriate, particularly in view of Riley’s need, to make a modest interim distribution to each of the residuary beneficiaries. That is in part because, as Riley submits, the administrator ought not embark on litigation, or incur significant expenditure in relation to the unresolved matters, which is not more likely than not to augment, rather than deplete, the estate, on a net basis. There is, however, more to it than that. The administrator is on notice of potentially complex and significant claims against the estate. It is an unfortunate but notorious fact that litigation generally, including litigation on behalf of, against, or in respect of, deceased estates, has the potential to become complex and expensive. In particular, claims against estates which may involve the conduct of a deceased give rise to their own difficulties. Apart from the possible exposure to adverse claims, and the costs that might be involved in defending them, the administrator is concerned that if the estate is, to the knowledge of possible claimants, depleted to the point that its ability robustly to defend claims that he might consider should be defended is compromised, this might be highly prejudicial to the estate. In considering the weight to be given to that concern, I bear in mind that the administrator is himself an experienced legal practitioner without any personal interest in prolonging the administration.