Morris v Smoel
[2013] VSCA 11
•15 January 2013
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2012 0251
| PATRICIA MOLLY MORRIS | |
| Appellant | |
| v | |
| KERRYN LINDA SMOEL and SUSan carolyn Wooster (as Executors of the Will of MAXWELL VERNON MORRIS, Deceased) | Respondents |
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JUDGES: | MAXWELL P and WHELAN JA |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 15 January 2013 |
DATE OF JUDGMENT: | 15 January 2013 |
MEDIUM NEUTRAL CITATION: | [2013] VSCA 11 |
JUDGMENT APPEALED FROM | Smoel v Morris (Unreported, Supreme Court of Victoria, McMillan J, 21 December 2012) |
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WILLS AND ESTATES – Executors – Application seeking judicial advice – Proposed sale of assets – Estate needing liquidity to meet liabilities – Largest debt owed to executors’ solicitors – Whether debt properly incurred – Opposing beneficiary sought to rely on late‑filed affidavit – Judge refused to receive affidavit – Whether procedural discretion miscarried – Whether judge bound to consider disputed history of administration of estate – Limited scope of advice proceeding – Court’s power discretionary – No error established – Appeal dismissed – Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 applied – Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 54.02.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Ms C Sparke SC | K & L Gates |
| For the Respondents | Mr P Crofts | Aitken Partners Pty Ltd |
| For Peter Morris | Melbourne Legal Chambers |
MAXWELL P:
Introduction
On 21 December 2012, McMillan J made orders under rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2005 authorising the respondents, in their capacity as executors of the will of Maxwell Vernon Morris (the ‘executors’), to sell two assets: a Rye property and a motor vehicle. The proceeding had been commenced by originating motion on 4 December 2012. There was substantive argument before her Honour on 14 December and again on 21 December 2012.
On the day the orders were made, the appellant, who is the widow of Mr Morris (‘Mrs Morris’), filed a notice of appeal against that part of her Honour’s decision which authorised the sale of the Rye property. Three days later, on 24 December, Mrs Morris filed a summons seeking a stay of that part of the decision, pending the hearing and determination of the substantive appeal. That stay application was due for hearing today.
The Court took the view, however, that for the saving of Court time and for the saving of costs for the estate and the parties, it would be sensible to proceed directly to the hearing of the substantive appeal. There was, in addition, the consideration that — at least as argued on behalf of the executors — the sale of the property was a matter of some urgency. The property in question is a seaside property and — so it is said — is best put on the market in the summer months.
Accordingly, the Court proposed and the parties agreed that the entire appeal be heard today. To that end, the parties consented under r 64.27(1)(c) to the appeal being heard by two judges of appeal. As substantial costs have already been incurred in litigation concerning this estate, the assets of which are relatively limited, this was obviously in the best interests of all concerned.
The fact that the Court is in a position to deliver judgment so soon after the conclusion of argument should not be thought to indicate that there has been any lack of attention to the legal and factual questions raised in the appeal. The Court is always — and again in this case — well served by high quality affidavit material and written submissions from the parties, which enable us to familiarise ourselves with the issues quite thoroughly before the hearing begins. Of course, there is a very great deal of expense incurred in the preparation of all that written material.
That process of familiarisation in advance ensures that oral argument is of greatest assistance, as it enables the Court to explore, clarify, test and question. The responses of counsel for Mrs Morris, to whom we addressed a number of questions, have been most helpful in clarifying the issues. Having come to a clear view, namely that the appeal should be dismissed, it seemed to us that we should announce that decision today and give our reasons. It seemed important that those involved in this difficult litigation should know as quickly as possible, and with the minimum of cost and delay, what their position was.
The hearing before the judge
Counsel for the executors explained to the trial judge that the estate had debts of approximately $300,000 but no liquid assets with which to meet those liabilities. Her Honour quickly appreciated the commercial exigencies which confronted the executors. Responding to a submission made on behalf of Mrs Morris, to the effect that the creditors were not pressing for payment, her Honour said:
Whether or not the people who are owed that money are pressing or not, nevertheless, it’s an obligation to pay accounts if the work has been done …
Later her Honour said:
[E]state moneys need to be realised so accounts can be paid.
Unsurprisingly, the executors had formed the view that the debts should indeed be paid. They rely on s 37 of the Administration and Probate Act1958, which makes unambiguously clear that all of the assets of the estate are available for the payment of debts of the deceased, and that no disposition by will can stand in the way of payment of creditors.
The largest single debt of the estate proposed to be met out of the proceeds of realisation of the two assets is for some $147,000 owed to the solicitors acting for the executors. This is for work done and disbursements made up to 30 June 2012. A further $90,000—$120,000 is said to have been incurred by the solicitors — and hence by the estate — for unbilled work and disbursements since then, but those amounts form no part of the relevant debt.
The fees to 30 June 2012 have been assessed by a costs consultant on the Supreme Court scale though, as I will mention in due course, there is a live dispute as to whether all of those fees have been properly incurred. Importantly, according to the unchallenged evidence filed on behalf of the executors, their solicitors have advised them that they will not continue to do work for the estate unless arrangements are made for payment of the outstanding accounts.
At the hearing before the judge, the only real opposition to the making of the orders sought came from Mrs Morris, who was married to Mr Morris for almost 20 years until his death in February 2010. She has a life interest in the Rye property under the will and that interest, like the reversionary interest of the estate in the property, will disappear if the property is sold.
In the course of argument before the judge, counsel for Mrs Morris acknowledged that the estate needed liquidity in order to pay its debts, but submitted that the proposed sale could not be justified in the circumstances. She relied on the following matters. First, it was premature to sell an asset to meet a temporary liquidity problem when it was expected that by 8 March 2013 a decision would have been made resolving a dispute between the estate and the Morris Family Trust. The dispute concerns a very large asset, which the estate says is a loan of some $367,000 from the estate to the trust.
Secondly, there was no evidence that, apart from the solicitors, any creditors were pressing. Thirdly, there were real issues about the quantum of the solicitors’ costs and whether they had been properly incurred. Fourthly, for two years the executors had not ‘bitten the bullet’ to clarify what the assets of the estate actually were. In the meantime and against that background of uncertainty, enormous costs had been incurred on all sides, including by the estate itself, in the various Part IV proceedings which are under way.
As to this last point, the critical question as to the quantum of the assets of the estate is whether the disputed loan is an asset of the estate or not. There is also a related dispute between the executors (in their personal capacity) and the Morris Family Superannuation Fund, regarding the validity of a death benefit nomination by the deceased in their favour. By orders made on 25 September 2012, senior counsel from the Victorian Bar was appointed as special referee to determine both those disputed questions.
Counsel for Mrs Morris submitted to the judge that that special reference was the first time that the executors had ‘in a concrete way’ grappled with the question of what was required to be done in order to determine the value of the assets in the estate. I will return to this topic later in these reasons. Counsel submitted to the judge that, while her client had not caused any delay, ‘she is now the one who’s been asked to pay the price’.
Her Honour responded:
This estate is too small to enable everyone to have their wishes, or the will to be followed, because necessarily, the estate is depleted substantially.
…
I’m looking at what is before me now, and there are substantial debts and they need to be paid. The history you can develop in another forum in terms of how that goes forward, but the executors should not be put … in a position where they are unable to pay estate debts.
Counsel for Mrs Morris sought to rely on a late‑filed affidavit which had been received by the judge’s associate at or after 6:00pm the previous evening. As will appear, the non-receipt into evidence of that affidavit, and what is said to be her Honour’s failure to take into account the relevant matters contained in it, is the sole ground of appeal against her Honour’s decision.
At the conclusion of argument, her Honour said she was satisfied that the orders sought should be made, authorising the executors to sell the relevant assets. Her Honour invited the parties to confer as to the form of orders, and adjourned the hearing for a week. When the matter came on again on 21 December 2012, Mrs Morris had given notice of an application to stay the orders. Her Honour first proceeded to finalise the form of orders with counsel. (The order made is attached as an appendix to these reasons.) It will be seen that her Honour made express provision, in relation to the proceeds of sale of both assets, that so far as concerned the utilisation of those proceeds to pay the legal expenses, they could not be used to pay costs and disbursements which were ‘disputed on reasonable grounds’ by any of the respondents to the application.
Submissions were then advanced on behalf of Mrs Morris as to why the judge should stay her own order. The submissions canvassed many of the same matters as had been the subject of argument at the substantive hearing a week earlier. Her Honour rejected the stay application, explaining her decision as follows:
The discretion to be exercised in this application is to be exercised according to the justice of the particular case. The discretion which confers the power to order a stay is only exercised where special circumstances exist which justify the departure from the ordinary rule that a successful litigant is entitled to the fruits of litigation.
In my view the justice of the case requires the sale of the Rye property to proceed for the following reasons. (A) There are pressing creditors in the estate, in particular the National Australia Bank. (B) There are obligations on the executors to pay the debts and they have no funds to meet those obligations and the executors should not be out of pocket personally in relation to those obligations.
(C) Provision has been made in the orders authenticated this morning for the provision for the identification of the disputed debts of the [executors’] solicitor’s costs and disbursements and they will not be paid at this stage. That is to say the disputed debts will not be paid at this stage under the orders made.
(D) All assets are available under s 37 of the Administration and Probate Act and the Rye property and the Porsche Boxter are the only assets available at present.
(E) Depending on the outcome of the special reference the value of the estate may increase or decrease. (F) The estate has significant multiple proceedings to defend in the near future.
(G) Whilst there is a sentimental attachment on the part of [Mrs Morris] to the property and that is understandable it being her holiday house for a long period of time, in the context of this case it must be considered in the wider context and no special circumstances exist to justify a stay.
(H) The executors can assist [Mrs Morris] or arrange for assistance with the giving by [Mrs Morris] of vacant possession of the property.
The nature of the court’s power under Order 54
As mentioned earlier, the executors invoked the jurisdiction of the Court under r 54.02, which provides as follows:
54.02 Relief without general administration
(1)A proceeding may be brought for any relief which could be granted in an administration proceeding and a claim need not be made for the administration or execution under the direction of the Court of the estate or trust in respect of which the relief is sought.
(2)Without limiting paragraph (1), a proceeding may be brought for—
(a)the determination of any question which could be determined in an administration proceeding, including any question—
(i)arising in the administration of an estate or in the execution of a trust;
(ii)as to the composition of any class of persons having a claim against an estate or a beneficial interest in an estate or in property subject to a trust; or
(iii)as to the rights or interests of a person claiming to be a creditor of an estate or to be entitled under the will or on the intestacy of a deceased person or to be beneficially entitled under a trust;
(b)an order directing an executor, administrator or trustee to—
(i)furnish and, if necessary, verify accounts;
(ii)pay funds of the estate or trust into court; or
(iii)do or abstain from doing any act;
(c)an order—
(i)approving any sale, purchase, compromise or other transaction by an executor, administrator or trustee; or
(ii)directing any act to be done in the administration of an estate or in the execution of a trust which the Court could order to be done if the estate or trust were being administered or executed under the direction of the Court.
Importantly, that rule provides the only statutory basis in Victoria for the personal representative of a deceased estate, or the trustee of a trust, to seek the advice and direction of the Court. The Trustee Acts in other States generally make express provision for such applications to be made. One such provision is s 63 of the Trustee Act1925 (NSW), which was the subject of an illuminating analysis by the High Court in the Macedonian Church case.[1]
[1]Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 (‘Macedonian Church’).
As is explained in the majority judgment in that case, and as appears from the language of r 54.02 itself, the purpose of establishing a procedure of this kind was to enable a trustee or executor to obtain the direction or opinion of the Court on a matter of administration or management, or as to the construction of the will or trust instrument, without the need to commence an administration suit with all its attendant delay and cost. As the High Court noted in Macedonian Church, the 19th century United Kingdom legislation which first established a procedure of this kind was designed:
to give trustees a summary right by petition … to obtain the opinion of the Court of Chancery upon any point which might arise in the administration of the trust estate. This would be of great benefit to trustees, and, by substituting a cheap and simple process of determining questions, prevent the necessity of expensive suits.[2]
[2]United Kingdom, Parliamentary Debates, House of Lords, 11 June 1857, col 1557 (Lord St Leonards), quoted in Macedonian Church (2008) 237 CLR 66, 91 [62].
The procedure invoked by the executors is thus a summary procedure, intended to enable questions arising in the administration of an estate or a trust to be resolved cheaply and simply. Moreover, as the High Court also pointed out, provisions of this kind operate as an exception to the Court’s ordinary function of deciding disputes between competing litigants. These procedures afford a facility for the Court to give ‘private advice’. It is private because the function of the judicial advice is to give personal protection to the trustee or executor in respect of the course of action sought to be authorised.[3]
[3]Macedonian Church (2008) 237 CLR 66, 91 [64].
The High Court in Macedonian Church emphasised that there were no implied limitations on the Court’s power to give advice of this kind. Under r 54.02(1) such an application may be brought for any relief which could be granted in an administration proceeding. Without limiting those very general words, r 54.02(2) lists a number of purposes for which such a proceeding may be brought, including the obtaining of an order ‘approving any sale by an executor’.
It was accepted by both parties to the appeal that what Crockett J said in 1972 in Re Green,[4] about the nature of the Court’s consideration of a proposed course of conduct, remained a correct statement of the law. That is, it is no part of the Court’s function to pass judgment on whether what the executors (or trustees) propose to do is wise or unwise.[5] That is a matter for the executors or the trustees, as the case may be. Rather, in a case such as the present, the question for the Court is whether there is power in the administrator to do what is proposed and — assuming that there is power — whether it is:
improper [for the executors] to exercise the power which they possess in the postulated manner.[6]
[4]Re Green, deceased [1972] VR 848.
[5]Ibid 850.
[6]Ibid.
It is also common ground that the exercise of power by the Court, to authorise or refuse to authorise a proposed course of action, is discretionary. It follows, on ordinary principles, that this is not an appeal by way of rehearing. The appeal falls to be determined in accordance with House v The King.[7] The High Court in Macedonian Church emphasised that this was so, and stressed the need for appellate restraint, as follows:
Upon one view, what was involved in these proceedings was the consideration by this Court of little more than the disturbance of orders made in the exercise of discretionary power by a judge empowered to superintend the conduct of a trustee under provisions afforded to him, in that respect, by the Act. We have dealt with the proceedings at some little length for a number of reasons. They involved a consideration of powers that, despite their long history, rarely reach the consideration of final appellate courts. Those powers are of frequent practical importance in the administration of the Act which has a distinct provenance in legislation first enacted in England and later in Australia. They also find reflection in statutes operating in Australian jurisdictions other than that to which the Act applies. They arise in bitterly contested proceedings between parties who have asserted, and litigated, their legal rights up to this Court by advancing numerous complex and detailed submissions. And they illustrate the particular care that must be taken by appellate courts, in such circumstances, in disturbing the conclusions of a trial judge in arriving at such decisions, except in the limited circumstances explained by this Court in House v The King. Unless restraint is employed in cases of the present kind, in disturbing the orders of trial judges, the risk is run that escalating litigation is encouraged; the resolution of the substantive dispute is delayed; legal costs are incurred in disproportion to the value of assets at stake; and other public and private costs are improvidently incurred. Against such outcomes, this Court has frequently expressed, and reasserted, the need for particular appellate restraint.[8]
[7](1936) 55 CLR 499.
[8]Macedonian Church (2008) 237 CLR 66, 125 [190].
Against that background of fact and principle, I turn to the grounds of appeal. There are two grounds. Ground 1, in substance, complains that the judge erred, in the exercise of her procedural discretion, in failing to allow Mrs Morris to read into evidence and rely on the affidavit of Mr Hope sworn 13 December 2012. Ground 2 is that there was a substantive error of law in the exercise of the power under r 54.02, constituted by a failure to consider or take into account the contents of that affidavit. In my opinion, both grounds of appeal must be rejected, for the following reasons.
Ground 1: the late‑filed affidavit
As best I can ascertain, Mrs Morris, as a respondent to the executors’ application, was served on 4 December 2012 and was aware that the matter was listed for hearing on 11 December. Further, through her solicitors, she was in communication with the associate to the trial judge in the period 7–13 December 2012. The relevant affidavit was received by the Court and by the executors, or their solicitors, at or after 6:00pm on 13 December 2012, the rescheduled hearing being fixed for 10:30 the following morning. It is conceded — properly, in my view — by counsel for Mrs Morris that that affidavit was not served or filed ‘in accordance with the usual procedures of the Court’. It is nevertheless maintained that the judge should have received it into evidence, it not having been submitted that the executors would suffer any irremediable prejudice by the receipt of it.
A decision by a judge about whether or not to allow a late affidavit to be relied on would almost never be a matter with which this Court would interfere. Senior counsel for Mrs Morris has properly drawn attention in her supplementary submissions to the authorities which say, very firmly, that there is a high threshold to be overcome before an appeal court would even entertain an argument about a decision of this character.[9]
[9]Lovell v Lovell (1950) 81 CLR 513; Norbis v Norbis (1986) 161 CLR 513; Adam P Brown Male Fashions Pty Ltdv Phillip Morris Inc (1981) 148 CLR 170.
In any event, in my view, her Honour’s decision was unimpeachable. Counsel for the executors was entitled, in my view, to take objection to reliance on the late‑filed affidavit. It contained matters which were in dispute and response to the affidavit would likely have required further instructions and hence caused delay. Her Honour made perfectly clear in the course of argument why it was that it was not appropriate for material to be filed as late as that. She was, with respect, properly concerned to resolve the matter expeditiously.
In my opinion, if those representing Mrs Morris had formed the view that the content of the affidavit was crucial to the presentation of her case, the proper course for them to take — given her Honour’s view that she would not receive it — was to seek an adjournment. Naturally, Mrs Morris would have, in the ordinary course, been liable for the costs of such an adjournment, but that would have been the price of the late filing of the material and of securing the opportunity at an adjourned date to rely on it.
No such application was made, however, and it follows that no complaint can subsequently be made about a breach of natural justice when, in effect, an election was made to proceed with the hearing without that material.[10] There is no ground raised of breach of natural justice as such but that is, in truth, the substance of the complaint. It cannot be said that a judge did not take particular matters into account when, by virtue of the procedural ruling she had made, those matters were not before her for consideration.
[10]See, eg, Southwick v Moore Stephens Melbourne Pty Ltd [2008] VSCA 164, [31].
I intend no criticism of the decision evidently made by those representing Mrs Morris not to seek an adjournment. The judge had made clear her view of the scope of her inquiry. She had said she was not interested in the rights and wrongs of the past, and she was obviously concerned that any interruption or delay would impede the speedy resolution of what was, on her Honour’s view, a relatively straightforward question. It may be inferred that a judgment was made by the representatives of Mrs Morris that the adjournment, with all its risks and costs, was unlikely to produce any different outcome. In the circumstances, it seems to me, that was a forensic judgment which it was well open to those representing Mrs Morris to make. It is precisely the kind of cost‑benefit evaluation which has to be made during litigation, when questions of costs are involved.
Ground 2: Failure to consider relevant matters
The second ground of appeal is that her Honour failed to consider relevant matters. As I have indicated, once it is accepted that she was entitled to ignore the affidavit, that ground fails at the threshold. These were not matters that she was bound to consider. Those representing Mrs Morris had failed to comply with the procedural requirements in order to place those matters before her for consideration.
While it would be possible to dispose of the point on that technical ground, it is important to deal with the substance. The supplementary submission prepared by senior counsel for Mrs Morris sets out in full the matters which, it is said, her Honour would have appreciated if she had read the affidavit, namely:
(a)One of the creditors, the National Australia Bank (‘NAB’), was not pressing for payment, was not imposing default interest, and had written to advise of such;
(b)The Family Trust had previously offered solutions to have it, or Mrs Morris, take over the NAB mortgage;
(c)There was an opinion from a real estate agent that the condition of the Rye property was such that the timing had little impact on saleability;
(d)Mrs Morris had a connection to the property.
According to the submission:
Referral to the affidavits, and properly considering the contents, would have permitted [Mrs Morris] to properly argue that:
(a)The debt of the major creditor of the estate, the executrices’ lawyers, was seriously under question. The quantum had been queried, but more fundamentally, substantial costs had been incurred by reason of defending the various Testators family maintenance claims, which may not have had to be incurred, or could have been much reduced, by dealing with the question of what monies were ‘in or out’ of the estate. The Hope affidavit referred to the Morris affidavit which set out the steps and correspondence since late 2010 in which she (through her lawyers) had sought information and raised concerns about the size of the estate, and asked for that issue to be addressed. Mrs Morris issued proceedings (before the expiry of the time limit) on 15 March 2011. She says in the Morris affidavit that if she is successful in the determination as to the superannuation, she would likely discontinue her claim.
(b)The executrices, until recently having failed to take active steps since late 2010 to determine the issue of what monies were ‘in or out’ of the estate, now take urgent steps to sell the Rye properly when the answer may only be a short time away. They ought not be able to rely upon two years of accrued costs to now force the sale of an asset in which the appellant has an interest.
(c)The executrices have taken no steps (prior to their application to sell Rye), to put the parties on notice as to the (substantial) level of the Estate’s alleged debts and liabilities, which might otherwise have enabled the parties to reach agreement on whether those debts and liabilities were proper and how they might be funded (eg mortgaging the Croydon property, the Trust taking over the Rye mortgage, etc).
These issues were explored in oral argument this morning, and senior counsel for Mrs Morris helpfully crystallised her central complaint, as follows. Asked to identify what it was that the judge had been bound to consider but had failed to consider,[11] counsel contended that the judge was bound to consider the manner in which the large liabilities (that is, the liabilities for legal costs) had been accumulated and, hence, was bound to pose the following question for herself:
Should I permit this interest in property (or this property in respect of which Mrs Morris has a special interest) to be disposed of when part of the debt may not have been properly incurred?
[11]Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24.
In my opinion, there are two answers to that submission, each of which leads to the conclusion that there was no error. First, by virtue of the oral submissions which senior counsel for Mrs Morris had already made, the judge was well aware that this was the primary point of attack on the executors’ proposed course of action. I referred earlier, in summary form, to the matters which were argued. As the earlier extracts show, the judge had made clear that she was not proposing to explore the history of the matter or to investigate the allegations made on behalf of Mrs Morris about maladministration by the executors and the consequent incurring of legal costs.
In my respectful opinion, that view was well open to her Honour. As has become clear in the course of argument today, these were hotly‑contested questions. Mrs Morris blames the estate for being dilatory; the estate blames Mrs Morris, in her capacity as the sole director of the trustee company of the family trust, for withholding information. And Mr Peter Morris blames both the estate and the trust, for taking altogether too long to achieve what everyone desires, which is clarification of the status of the disputed assets.
To investigate those competing claims would, in my view, be outside the scope of a proceeding such as this, and contrary to the purpose for which this procedure was established. The judge was asked to decide a narrow question, namely, whether there was there anything improper about the proposed sale of the assets. It was neither necessary nor appropriate for her to investigate disputed questions of fact about the history of the incurring of one of the debts now proposed to be paid by the executors.
I do not mean to say that the investigation of disputed facts is beyond the scope of a proceeding of this kind. The High Court has made clear that it is not.[12] But this would have been a lengthy and costly investigation in order to determine who, if anyone, was to blame — or whether anyone was to blame — for the level of the costs having reached $147,000 by 30 June 2012 and whether, as alleged, the executors had been slow to move to have the disputed asset issues resolved. It is quite unlikely, on the information available to this Court, that there could have been any conclusive answer to those questions. One thing is clear. Investigating the history of the matter would have been costly for all. This was, in substance, a complaint about maladministration by executors. That is a matter which, if it is to be investigated at all, will need to be fully investigated at another time.
[12]Macedonian Church (2008) 237 CLR 66, 102–3 [105]–[108].
Her Honour was well aware that the orders sought would affect Mrs Morris. But, as mentioned earlier, she was equally well aware that, in the administration of the estate, especially with the kinds of divisions which appear to exist between the various beneficiaries here, it is not possible for executors to satisfy everybody. As was explained by counsel for the executors this morning, the assets proposed to be sold are those likely to cause the least inconvenience and distress to Mrs Morris.
Her Honour was also aware of the impending date for a decision by the special referee, but considered that the creditors should not have to await the outcome of that process, let alone the making of payment one way or the other consequent upon a decision. Her Honour’s scepticism about an early resolution of those questions seems to have been borne out by recent indications of real uncertainty about whether the special reference will proceed as scheduled.
In my respectful opinion, the judge discharged her function, of providing advice to executors who were properly seeking it, in exemplary fashion and in a most timely and efficient way. It was well open to her to make the orders she made
on the material before her, and no error has been established.
Counsel for Mrs Morris made, as the transcript shows, all the arguments that could properly have been advanced in opposition to the application. It needs to be emphasised that the lateness of the affidavit made no difference. On the view her Honour took, the executors were entitled to have their proposed course of action authorised, given the exigencies of their situation, accepting that this would cause a degree of hardship and distress.
I conclude by saying this. It is always a matter of deep concern to the Court when assets in an estate are being used up in litigation about who should receive what share of the estate. It is clear from the material that there have been efforts to resolve the disputes and there has been mediation. The Associate Justices who have had conduct of various parts of these multiple proceedings have themselves been urging the parties to try and seek a resolution. But the fact that we have an appeal regarding the disposal of one asset shows that there is a spirit of disputation abroad.
In my respectful view, the time has come for someone (other than the lawyers, who are doing their best to represent the warring parties in the litigation) with an interest in maximising the return to beneficiaries, to take control of the situation and show leadership, imagination and a spirit of compromise. There is an urgent need to work out some way, outside the limited powers of the Court (and they are, at best, limited), to resolve the matter, so that as little as possible of the remaining assets are consumed in litigation and that all of those entitled to share in the estate are able to do so, as Mr Morris no doubt intended they should. The alternative is potentially endless litigation, and no‑one will benefit from that.
I would dismiss the appeal.
WHELAN JA:
I agree.
MAXWELL P:
Application is made by the solicitor appearing for Peter Morris, who is a beneficiary under the will and who was a respondent to the application at first instance, for his costs of the appeal. Mr Morris was not named as a respondent to the appeal but he was named in the notice of appeal as an addressee and was served with it. He must therefore have been viewed by the appellant as a person ‘affected by’ the appeal.[13] Moreover, he was served with the summons of 24 December 2012, requiring him to attend before the Court at the hearing to be held on a date to be fixed, which was today. Mr Morris must therefore have been viewed by the appellant as a ‘person interested’ in the application.[14] It is said by senior counsel for Mrs Morris that she should not have to pay his costs because he was not a necessary party.
[13]Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 64.04(1).
[14]Ibid r 65.02(3).
In the circumstances we think it unnecessary to decide finally whether there was a distinct interest which Mr Morris had to defend. Given that the appellant summonsed Mr Morris to be here, we think, in the circumstances, he was entitled reasonably to take the view that he should be here. Accordingly, we will order that Mrs Morris pay the costs of Mr Peter Morris of today’s hearing. He remains a non‑party, but it would be clear from these short reasons to whom the order relates.
The order of the Court is:
1. Appeal dismissed.
2. The appellant pay the respondent’s costs of and incidental to the appeal.
3. The appellant pay Mr Morris’ costs of and incidental to the appeal.
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APPENDIX
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