O'Halloran v Coffey (No 3)
[2023] VSC 130
•23 March 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS EQUITY AND PROBATE LIST
S ECI 2019 00898
| RUTH STANISLAUS O’HALLORAN | Plaintiff |
| v | |
| JOHN LAWRENCE COFFEY | First Defendant |
| and | |
| JOHN BLANCH | Second Defendant |
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JUDGE: | Moore J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | Written submissions |
DATE OF JUDGMENT: | 23 March 2023 |
CASE MAY BE CITED AS: | O’Halloran v Coffey (No 3) |
MEDIUM NEUTRAL CITATION: | [2023] VSC 130 |
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COSTS – Estate litigation – Application for passing over of plaintiff and first defendant and appointment of independent administrator – Application successful – Where no good reason to depart from usual order as to costs – Costs follow the event - Supreme Court Act1986, s 24 – Supreme Court (General Civil Procedure) Rules 2015, O 63 – Warton v Yeo (2015) 15 ASTLR 462; Northern Territory v Sangare (2019) 265 CLR 164.
ORDERS – Where parties disagree on orders giving effect to reasons for judgment – Where first defendant seeks orders unrelated to reasons for judgment – Where first defendant opposes dispensing with requirements that the independent administrator provide an administration guarantee and give notice of intention to apply for a grant – Orders made in the terms sought by the plaintiff – Supreme Court (Administration and Probate) Rules 2014, r 2.03 and r 3.02(1)(c) – Greenway v McKay (1911) 12 CLR 310; In the Estate of Freebairn (2005) 93 SASR 415; Re Curran [2010] VSC 455.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms Reegan Grayson-Morison | McNab & Starke |
| For the First Defendant | In person | |
| For the Second Defendant | No appearance |
HIS HONOUR:
On 17 February 2023, I delivered my reasons for judgment in this proceeding in which I decided, amongst other things, that Mrs O’Halloran and Mr Coffey should be passed over as executors of the deceased’s estate and that an independent person should be appointed in their place to administer the estate.[1]
[1]O’Halloran v Coffey (No 2) [2023] VSC 51 (the reasons for judgment). In this judgment I use the abbreviations as defined in the reasons for judgment.
Subsequent to delivering my reasons for judgment, Mr Lachlan Vallance, a principal lawyer of Hicks Oakley Chessell Williams, provided the Court with his written consent to accept appointment as administrator of the deceased’s estate.
On 22 February 2023, I made orders establishing a timetable for the parties to provide proposed orders to give effect to the reasons for judgment, including in relation to costs, and any supporting submissions.
The parties have been unable to agree on the form of orders to be made to give effect to the reasons for judgment and in relation to costs.
On 3 March 2023, Mrs O’Halloran filed submissions and a minute of the orders which she proposed should be made by the Court. On 3 March 2023, Mr Coffey emailed to chambers a minute of the orders which he proposed should be made by the Court and, on 17 March 2023, he emailed to chambers submissions on costs.
Having considered all the materials filed by the parties, the Court will make the following orders:
1.Pursuant to s 15 of the Administration and Probate Act 1958, and the inherent jurisdiction of the Court, the plaintiff, Ruth Stanislaus O’Halloran, and the first defendant, John Lawrence Coffey, be passed over as executors of the Will of the deceased, Joan Jackman Coffey, dated 26 September 2008.
2.Leave be granted to Lachlan Vallance of Hicks Oakley Chessell Williams to apply for a grant of letters of administration with the Will dated 26 September 2008 annexed, subject to any requirements of the Registrar of Probates, and the Court will dispense with the requirements to:
(a)provide any administration guarantee in relation to his administration of the estate of the deceased; and
(b)post a notice of his intention to apply for a grant of representation on the Court’s website.
3.Lachlan Vallance be permitted to uplift the original Will of Joan Jackman Coffey, deceased, dated 26 September 2008 from the Registrar of Probates for the purpose of his application for letters of administration.
4.Lachlan Vallance be entitled to payment of his costs of administration of the estate from the estate of the deceased, including payment of any disbursements.
5.The plaintiff’s costs of and incidental to the proceeding, including the summons filed by the first defendant on 13 August 2021, be paid on a standard basis out of the first defendant’s share of the residuary estate of the deceased pursuant to clause 5(b)(vi) of the deceased’s will dated 26 September 2008.
6.The proceeding otherwise be dismissed.
My reasons for making orders in these terms, insofar as the parties were in disagreement about the form of orders, are set out below.
The form of orders to be made generally accords with those proposed by Mrs O’Halloran as they accurately give effect to my reasons for judgment. Mr Coffey inappropriately sought that the Court include in its judgment matters which were not the subject of the reasons for judgment, including a claim that the deceased’s will was invalid.
The parties were at odds in relation to the provision of an administration guarantee by Mr Vallance, and the giving of notice of his intention to apply for a grant. Mrs O’Halloran proposed that those requirements be dispensed with; Mr Coffey opposed that course.
Rule 2.03 of the Supreme Court (Administration and Probate) Rules 2014 requires that, at least 14 days before applying for Probate, an executor is required to publish a notice on the Supreme Court website advertising their intention to apply for Probate. Rule 3.02(1)(c) provides for Order 2 to apply to applications for Letters of Administration with the Will Annexed, as is the case here.
The purpose of this notice period is to provide an opportunity for anyone with doubts as to the validity of a will, or with possession of a later will, to raise their objection before a grant is made. The Court does, however, have power to dispense with the requirement for advertisement; that power is often exercised where a judicial officer is considering making an ‘unusual’ grant.[2] In such circumstances, the purpose of posting an advertisement is instead realised by making orders requiring that notice of the application be given to all beneficiaries, or persons otherwise affected by the application.
[2]Greenway v McKay (1911) 12 CLR 310.
The circumstances of this case warrant dispensing with the requirement of notice. All persons with an interest in the deceased’s estate have been on notice of the application to appoint an independent administrator to prove the Will and administer the deceased’s estate since about 17 May 2019.[3] The deceased died on 17 February 2014. Mr Coffey (and all other interested persons) have had extensive opportunity to lodge a caveat disputing the validity of the Will.
[3]Reasons for judgment [26].
As to the issue of an administration guarantee, Ferguson J (as her Honour then was) succinctly summarised the relevant principles as follows:[4]
As a condition of making a grant, the court may require that a guarantee be given.[5] Where, as here, the applicant for Letters of Administration has no immediate beneficial interest in the estate, the court has a discretion whether to require a guarantee. The court should require a guarantee unless there is a good reason why it is not required.[6] …
[4]Re Curran [2010] VSC 455, [26].
[5]Administration and Probate Act 1958 (Vic) s 57; Supreme Court (Administration and Probate) Rules 2004 (Vic) r 7.01.
[6]Re Tratt [1980] VR 657.
The rationale and purpose of an administration guarantee was explained by Besanko J in In the Estate of Freebairn:[7]
The guarantee is in effect a guarantee against the maladministration of the estate … . It is a guarantee against a breach by the administrator of his or her duties in administering the estate. The cases in which a guarantee is required are cases where the estate is vulnerable in the sense that there is an increased risk of maladministration or an increased difficulty in recovery should there be maladministration. The guarantee provides an additional assurance of the due and proper administration of the estate and an additional remedy should there be maladministration. …
[7](2005) 93 SASR 415, [22].
Mr Vallance is an officer of the Court. He is accordingly subject to various professional and ethical obligations in the performance of his work as a lawyer. He is also experienced in the administration of deceased estates. There is no basis to consider that, upon Mr Vallance’s appointment as administrator of the deceased’s estate, the estate will be vulnerable to maladministration in the manner described by Besanko J. There is accordingly good reason why an administration guarantee is not required in this case.
Both parties proposed that the Court order that Mr Vallance be entitled to the payment of his costs of administration of the deceased’s estate. However, Mr Coffey sought that this entitlement be qualified by the words: ‘after providing an itemized [sic] bill at the end of each month to the beneficiaries for approval by at least two of the beneficiaries’.
The effect of this qualification would be to negate the first part of the proposed order giving Mr Vallance an entitlement to his costs. Mr Vallance has informed the Court that, if he is appointed as administrator of the deceased’s estate, professional fees for all legal and non-legal work of a non-litigious nature would be charged in accordance with the Practitioner Remuneration Order (Vic) as it applies from time to time, and that any professional fees for litigious work would be charged in accordance with the relevant Court scale. Those arrangements are entirely conventional and unexceptionable; it is inappropriate to fetter the obligation to pay the independent administrator’s fees in the manner proposed by Mr Coffey.
Costs
Unless otherwise expressly provided by an Act or by any Rules made pursuant to the Supreme Court Act 1986, the Court has a general discretion in respect of costs, including in relation to the administration of estates and trusts.[8] The discretion is to be exercised judicially and in accordance with Order 63 of the Supreme Court (General Civil Procedure) Rules 2014.
[8]Supreme Court Act 1986 (Vic) s 24.
Mrs O’Halloran sought an order that her costs of and incidental to the proceeding including the summons filed by Mr Coffey on 13 August 2021 be paid:
(a) on a standard basis out of Mr Coffey’s share of the residuary estate of the deceased pursuant to clause 5(b)(vi) of the deceased’s will; or, alternatively
(b) out of the residuary estate, excluding her interest in the residuary estate pursuant to clause 5(b)(v) of the Will and the shares to establish the Janice Trust Fund and the Edwina Trust Fund as contemplated in clauses 5(b)(i) and (ii) of Will.[9]
[9]This alternative order was sought on the basis that the other named residuary beneficiaries in clauses 5(b)(iii) and (iv) of the Will (being Frances Coffey and Michael Coffey) had, in effect, supported Mr Coffey’s position generally and his opposition to her application.
The only order in respect of the costs of this proceeding contained in Mr Coffey’s minute of proposed orders was an order that Mrs O’Halloran’s costs be paid by her solicitor personally on an indemnity basis. However, in his submissions on costs, Mr Coffey variously claimed that he, the deceased’s estate and the beneficiaries should not bear any costs; that Mrs O’Halloran’s solicitor should pay ‘at least all legal costs’; and that there should be ‘no cost orders’.
To a significant extent, Mr Coffey’s submissions on costs proceeded from his dissatisfaction with the reasons for judgment and his view that they are wrong in various respects. That is not a proper basis upon which the Court’s discretion as to costs is to be exercised. Mr Coffey also made a number of scandalous allegations about the conduct of Mrs O’Halloran’s solicitor in an attempt to justify the making of costs orders against him personally; those allegations are also without any proper basis. His submissions on costs are otherwise without merit.
The usual rule as to costs is that a successful party to litigation is entitled to an award of costs in its favour, with the unsuccessful party bearing liability for the costs of the unsuccessful litigation. In Northern Territory v Sangare, the High Court stated that: [10]
A guiding principle by reference to which the discretion is to be exercised — indeed, “one of the most, if not the most, important” principle — is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party. The application of that principle may be modified or displaced where there is conduct on the part of the successful party in relation to the conduct of the litigation that would justify a different outcome.
[10](2019) 256 CLR 164, 173 [25] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ).
The usual rule as to costs is capable of application in litigation concerning the administration of estates. In Warton v Yeo, Ward JA summarised the position as follows:[11]
There are circumstances in which the costs of litigation concerning the administration of estates should be borne by the parties personally (Re Buckton; Buckton v Buckton [1907] 2 Ch 406). Three classes of case can be identified (see Buckton at 414–415). In the first, the applicants are trustees of a will who ask the court to construe the will for their guidance, in order to ascertain the interests of the beneficiaries. In the second class, the application is made not by the trustees (who are respondents) but by some of the beneficiaries because, for whatever reason, that course has been deemed more convenient. In the third class of case, the application is made by a beneficiary who makes a claim adverse to other beneficiaries, and as such, the proceedings are properly characterised as adversary litigation. In the first two classes of case, the costs of all parties are borne by the estate; in the third class, the costs are borne by the parties themselves.
… On the other hand, if such litigation falls into the third class of case, the Court is concerned only with who, out of the parties before it, should pay the costs of any other of the parties before it (that is, it applies the usual rule as to costs), and does not need to be concerned about indemnification from the estate (Murdocca at [78]). …
[11](2015) 15 ASTLR 462, 479 [78]-[79].
That this proceeding has been adversarial litigation between two executors and beneficiaries of the deceased’s estate is incontrovertible. Mr Coffey has been wholly unsuccessful in his case and should bear Mrs O’Halloran’s costs of and incidental to the proceeding and to his summons dated 13 August 2021. That outcome is also justified by the fact that Mr Coffey vigorously opposed Mrs O’Halloran’s application in circumstances where:
(a) he has approached his role as executor in an obstructionist, unresponsive and uncooperative manner;[12]
(b) he has not brought a dispassionate approach to the discharge of his functions as executor as he is hopelessly conflicted between those duties and his private interests;[13] and
(c) he carries, at a minimum, a high level of culpability for the paralysis which has beset the administration of the deceased’s estate.[14]
[12]Reasons for judgment [113].
[13]Ibid [116], [118].
[14]Ibid [119].
Mr Coffey has not advanced any tenable reason why the usual rule as to costs should not apply. Given her complete success in the proceeding, it would be unjust in the circumstances if Mrs O’Halloran was not awarded her costs.
As I have noted, Mrs O’Halloran also submitted that the Court should order that Mr Coffey’s liability for costs be charged against his share of the residuary estate. Mrs O’Halloran’s concern that Mr Coffey will not be able to comply with any costs order made against him personally is well-founded for the reasons set out in her submissions. The Court will so order.
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