Nicholson v Kollias; Re Dyke (dec'd)

[2007] VSC 555

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. Prob 19 of 2005

In the matter of the Will and Estate of Elsbeth Jean Dyke
Colin Roderick Nicholson & Ors	Plaintiffs / Respondents
v
Brian Charles Kollias & Ors	Defendants / Appellants

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JUDGE:	Warren CJ
WHERE HELD:	Melbourne
DATE OF HEARING:	13 September 2007
DATE OF JUDGMENT:	20 December 2007
MEDIUM NEUTRAL CITATION:	[2007] VSC 555

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PROBATE – Surviving executor of executor – Remaining executors of estate subject of proceeding – Surviving executor joined by order of a master – Appeal against master’s order – Appeal allowed

Administration and Probate Act 1958 s 17 and s 29
Supreme Court Rules Chapter I, Order 9

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr R Kendall QC with Mr A Phillips	Hicks Oakley Chessell Williams
For the first Defendant	Mr M G R Gronow
For the second to seventh Defendants	Mr R L Berglund QC with Mr N P Jones	Hunt McCullough Kollias & Co

HER HONOUR:

1. Elsbeth Jean Dyke (“the deceased”) died on 25 May 2004.  Brian Charles Kollias (“Mr Kollias”), Gary Wayne Smith, Robert Laurence Allen and Timothy Peter Knaggs were appointed executors of the Will of the deceased dated 12 January 2001.  Mr Kollias was a solicitor who acted for the deceased on various occasions in her lifetime. 

1. By originating motion Messrs Kollias, Smith, Allen and Knaggs applied for a grant of probate of the Will.  Probate was granted on 11 October 2004.  By summons filed 29 August 2005, various parties being beneficiaries to other Wills of the deceased, namely, Julie Anne Nicholson, John Bailey, Judith Bailey and various charities, namely, Deaf Children Australia, Animal Welfare League trading as Lort Smith Animal Hospital and Blue Cross Animal Society, applied for revocation of the grant of probate, the appointment of a new executor and an injunction restraining distribution of all dealing with the deceased estate.

1. They rely on want of testamentary capacity, undue influence and want of knowledge and approval of the contents of the last Will of the deceased. 

1. Subsequently, various interlocutory steps occurred.  On 26 January 2007 Mr Kollias died.  Probate of his last Will was granted to Kerry Joy Kollias (“Mrs Kollias”).  In the course of various interlocutory applications, an oral application was made before a master for the substitution of Mrs Kollias for Mr Kollias as the first defendant to this proceeding.  The master so ordered and in other matters recorded:

1.“ The Master was handed a copy of the Grant of Probate of the Will of Brian Charles Kollias who was the First Defendant in the application. 

2.The addition of the Executrix is solely for the purpose of enabling her to context (sic) issues which may render the estate liable for the costs of this proceeding.”

1. The defendants appeal the order of the master pursuant to order of Chapter I of the rules of the Supreme Court.  The matter proceeds, therefore, as a hearing de novo.

Circumstances of the Deceased

1. The deceased lived alone in poor circumstances and was fully occupied by the care and maintenance of her animals and exotic birds.  Despite her circumstances the deceased owned valuable farming land at Mornington.  The Estate is valued at approximately $15 million. 

1. During her life time the deceased formed acquaintances with the other defendants, Messrs Smith, Allen and Knaggs and their families.  For convenience I will refer to each of those family groups variously as “the Smiths”, “the Allens” and “the Knaggs”.  In 1999 the deceased excised and sold part of her land.  The sale was handled by Mr Kollias as the solicitor for the deceased.  The land was sold for $1.2 million and each of the families of the Smiths, Allens and Knaggs received inter vivos gifts of about $400,000 each from the proceeds of the sale. 

The Will history of the deceased. 

1. The deceased made three Wills: on 10 May 1985 (“the first Will”), 20 September 1999 (“the second Will”) and 12 January 2001 (“the last Will”).  It was the last Will in which Mr Kollias and the others were appointed executors.  The plaintiffs to the proceeding seek orders, inter alia, that the first Will be admitted to probate.  The second Will was drawn up by a solicitor, Mr Ian Moffat.  In December 2000, a codicil was drawn up to the second Will appointing Mr Kollias as an additional executor and making other changes to the beneficiaries.  Later the deceased made the last Will.

1. The differences between the three Wills are demonstrated in the following Table:

Table 1: Beneficiaries under three Wills
Beneficiary	First Will	Second Will	Last Will
Peninsula Animal Aid	$200.000	$0	$0
Cat Protection Society	$20,000	$50,000	$10,000
Blue Cross Animal	$30,000	$0	$0
Lort Smith Hospital	$50,000	$0	$0
Anti Cancer Council	$20,000	$0	$0
Royal Vic. Institute for the Blind	$20,000	$0	$0
Vic. School for Deaf Children	$20,000	$0	$0
Uniting Church	$20,000	$0	$0
RSPCA	$0	$100,000	$100,000
Denise & Tim Knaggs	$20,000	1/3 residuary	1/3 residuary
John & Judith Bailey	$30,000	$60,000	$20,000
Gary & Diane Smith	$40,000	1/3 residuary	1/3 residuary
Enid Nicholson	$10,000	$20,000	$20,000
Maida Pitchford	$10,000	$20,000	$20,000
Robert & Sandra Allen	$20,000	machinery 1/3 residuary	machinery 1/3 residuary
Ronald & Lynette Raymond	$20,000	$40,000	$20,000
Berniece Parfitt	$0	$20,000	$20,000
Doug Edwards	$0	$10,000	$0
Geoffrey Edwards	$0	$20,000	$20,000
Norman Allen	$0	$20,000	$10,000
Jane Leech	$0	$30,000	$30,000
Julie Nicholson	$0	$10,000	$0
Wendy Parfitt	$0	$10,000	$10,000
Steven Allen	$0	$20,000	$10,000
Residuary	3 charities: Animal welfare Deaf welfare Blind welfare	3 parts: D&T Knaggs R&S Allen D&G Smith	3 parts: D&T Knaggs R&S Allen D&G Smith
Executor:	National Trustees Executors & Agency Company of Aus. Ltd.	Ross Wadeson (accountant) Alternate: Ian Moffat (solicitor)	Gary Smith, Robert Allen, Tim Knaggs, Brian Kollias

The Questions of the Appeal

1. The question on the appeal is whether Mrs Kollias is properly joined to the proceeding in her capacity as executor of the estate of Mr Kollias.

1. Mr Kollias was joined as first defendant in his capacity as a co-executor. In the ordinary course, he and his co-executors, also as co-defendants, would defend the last Will in the usual way. As Mr Kollias was not a sole executor of the deceased estate no application of s 17 of the Administration and Probate Act 1958 arises. Section 17(1) provides:

1.An executor of a sole or last surviving proving executor of a testator is the executor of that testator.

This provision shall not apply to an executor who does not prove the will of his testator, and, in the case of an executor who on his death leaves surviving him some other executor of his testator who afterwards proves the will of that testator, it shall cease to apply on such probate being granted.

1. Mr Kollias was not joined to the proceeding in his personal capacity. No cause of action appears to lie against him other than in his capacity as co-executor of the deceased estate. Hence, s 29 of the Administration and Probate Act does not apply. Section 29(1) provides:[1]

1.Subject to the provisions of this section, on the death of any person, all causes of action subsisting against or vested in him shall survive against or (as the case may be) for the benefit of his estate…

[1]See, also, Jolliffe v Fera & Ors [1973] 2 NSWLR 702; Also, Halsbury’s Laws of England (4^th ed) vol 17(2), [47].

1. Significantly, no allegation of undue influence, misconduct or other wrong doing as an executor has been made against Mr Kollias or for that matter Mrs Kollias. 

1. Order 9 of Chapter I of the rules of the Supreme Court provide that a party may be joined where liability devolves upon another.[2]  Again, the Will has no application to the present circumstances of the litigation.  Further, Mrs Kollias is not a necessary or proper party to the proceeding for the purposes of Order 9.[3]

   [2]See Supreme Court Rules r 9.09 (2).

   [3]See Supreme Court Rules r 9.06

1. In my view it is unnecessary and involves a misapplication of the purpose of  Order 9 to join an executor in the executorial chain solely for the purpose of enabling that subsequent executor to contest issues that may potentially arise in litigation and render the estate of the deceased executor liable for costs in the substantive proceeding.  Indeed, it is speculative to join Mrs Kollias on the issue of cost because the matter of the cost of the proceeding is yet to be determined.  For example, it may eventuate that the plaintiffs fail in the proceeding and no order for costs or other order is made ultimately against the defendants.  In any event, even if the plaintiffs succeed in the proceeding they may obtain an order for costs from the deceased estate.  Such order is the usual form of order in these types of matters and is capable of being made without the necessity of joining Mrs Kollias as an added defendant or substituted defendant for Mr Kollias.  Whilst it remains open to the Court to order costs personally against the defendants, and in this respect the estate of Mr Kollias, then such application should be made at that time.  It is inappropriate and speculative for that order to be made by way of an insurance policy well before the matter has proceeded to trial.

1. For the plaintiffs it was submitted that Mr Kollias was properly joined as a party and, therefore, Mrs Kollias ought remain as a defendant because of the involvement of the former in the estate and affairs of the deceased.  There are allegations in the affidavits filed in the proceeding to the effect that Mr Kollias  played an active and significant role in the affairs of the deceased.  The fact that Mr Kollias obtained the instructions for the preparation of the codicil of December 2000, whereby he became executor of the second Will, is not of itself sufficient to render him liable or give rise to a course of action as the matter is presently alleged.  Whilst Mr Kollias acted as solicitor during the time of the excision and sale of the deceased’s land, it is not suggested that he received any financial benefit or gain as the proceeds of sale were divided among the Knaggs, the Smiths and the Allens.  Furthermore, the last Will of the deceased was prepared by another member of Mr Kollias’ firm, a relative, Elizabeth Kollias.  Again no impropriety or wrong doing has been alleged against Mr Kollias with respect to the preparation of the last Will. 

1. Whilst there is no allegation of undue influence against Mr Kollias with respect to the preparation of the last Will, the plaintiffs seek to rely upon want of testamentary capacity and want of knowledge.  Mr Kollias whilst alive filed an affidavit on 7 August 2006 deposing to various matters including the health of the deceased at the time of the execution of the last Will and the fact that he had not observed any deterioration in her condition.  The plaintiffs suggest that there is a remarkable lack of notes recording the instructions for the codicil drawn in 2000 or the instructions for the last Will.  For the plaintiffs it was submitted that Ms Elizabeth Kollias will be subjected to cross examination about the making of the last Will.  It was submitted that all these matters relate to the background concerning the ongoing conduct by Mr Kollias of the sale of the land and the distribution of the proceeds of sale to the other defendants, Messrs Knaggs, Smith and Allen and their families.  Ultimately it is submitted that the changes to the Will by virtue of the last Will excite great suspicion. 

1. It is apparent that the concerns of the plaintiffs revolve around suspicion, suggestion and speculation.  If the plaintiffs consider there is a cause of action that lies against the estate of Mr Kollias then it should be asserted before his estate would be looked to other than in its executorial capacity with respect to the deceased estate.  One additional argument made for the plaintiffs was to the effect that if the estate of Mr Kollias is distributed then the deceased estate will be deprived the opportunity of redress.  In any event it would remain open to Mrs Kollias as executor of the estate of Mr Kollias to serve notice under s 30 of the Administration and Probate Act upon the surviving executors to the deceased estate. 

1. I am not persuaded that Order 9 of Chapter I of the Supreme Court Rules applies.  For the reasons already considered there is no basis upon which Mrs Kollias stands to be joined.  In my view it is appropriate that the appeal be allowed and the orders made by the Master on 14 August 2007 be set aside.