Pendergast v Ewhelski & Anor (Variation of orders)
[2024] VSC 602
•26 September 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S ECI 2023 01209
| MARGUERITE FLORA PENDERGAST | Plaintiff |
| v | |
| MICHAEL RALPH THOMAS EWHELSKI | First Defendant |
| and | |
| PATRICK J CANNON COBURN & ASSOCIATES | Second Defendant |
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JUDGE: | KEOGH J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 September 2024 |
DATE OF RULING: | 26 September 2024 |
CASE MAY BE CITED AS: | Pendergast v Ewhelski & Anor (Variation of orders) |
MEDIUM NEUTRAL CITATION: | [2024] VSC 602 |
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PRACTICE AND PROCEDURE — Application to vary orders granting administration of deceased estate — Whether parties should be passed over as executors in order to give effect to orders — Whether requirement for surety should be dispensed with — Whether court has inherent jurisdiction to vary orders disposing of proceeding — Application to pass over parties as executors granted.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | K Mihaly | Local Lawyers |
| For the First Defendant | Self-represented | |
| For the Second Defendant | No appearance |
HIS HONOUR:
Introduction
Waltraut Margarete Hertha Ewhelski (‘deceased’) died on 16 August 2022. The plaintiff, Marguerite Pendergast (‘Pendergast’), and the first defendant, Michael Ewhelski (‘Ewhelski’), are the deceased’s children.
The deceased left a will dated 3 March 1989 appointing Pendergast and Ewhelski as joint executors and gifting them her estate in equal shares.
The main assets of the estate are a property at 90 Northumberland Road, North Sunshine (‘property’) and cash of approximately $125,000.
Pendergast brought this proceeding alleging that Ewhelski had frustrated the administration of the deceased’s estate. She sought orders including that Ewhelski be passed over as an executor.
The proceeding was listed for trial before me on 25 March 2024. In preliminary discussions before the trial commenced, Pendergast confirmed she sought an order that Ewhelski be passed over as executor which would allow her to apply for a grant of probate of the deceased’s will. Pendergast said that her alternative position was that both she and Ewhelski be passed over as executors, and that solicitor Lachlan Hughes (‘Hughes’) of Lawson Hughes Peter Walsh Lawyers (‘LHPW Lawyers’) be granted letters of administration with the will annexed.
Ewhelski acknowledged that there was animosity between him and Pendergast, and said that in those circumstances it would be better if an independent third party was appointed to administer the estate. He said that the controversy between the parties was about who that third party should be. Ewhelski said:
My recommendation is that the Court appoint an independent administrator, and therefore the plaintiff and myself are passed over.
Before the trial commenced, I stood the matter down to allow the parties to discuss their positions. When the matter resumed the parties presented me with a signed minute of consent orders. I had the following discussion with Ewhelski in relation to the minute of consent:
HIS HONOUR: …Mr Ewhelski. You’ve signed the minute of consent.
MR EWHELSKI: That’s right.
HIS HONOUR: So, you agree to Mr Hughes being granted letters of administration of your mother’s estate?
MR EWHELSKI: Well, I would prefer a more independent person, but if it gets the deal done, let’s do it.
HIS HONOUR: You agree that you’ll vacate 90 Northumberland Road, North Sunshine, by 1 May 2024?
HIS HONOUR: Yes.
MR EWHELSKI: I was actually already out the door today.
HIS HONOUR: And you agree that the plaintiff’s costs of the proceeding be paid from your mother’s estate on an indemnity basis?
MR EWHELSKI: Yep, essentially.
HIS HONOUR: So, you consent to orders in these terms.
MR EWHELSKI: Yep.
On 25 March 2025, I made the following orders by consent (‘March orders’):
1. Subject to compliance with the formalities prescribed by the Supreme Court (General Civil Procedure) Rules 2015 and the filing of the necessary advertisement, letters of administration (with the will annexed) in respect of the will and estate of the deceased be granted by the Registrar of Probates to Lachlan Owen Stuart Hughes.
2. By 1 May 2024, the first defendant vacate the property at 90 Northumberland Road, Sunshine North VIC 3020.
…
4. The proceeding is otherwise dismissed.
In accordance with the March orders, LHPW Lawyers filed an application with the Probate Office of the Supreme Court on behalf of Hughes for letters of administration of the deceased’s estate. On 17 June 2024, an Assistant Registrar of Probates wrote to LHPW Lawyers communicating the following requisitions in relation to the application:
•The contents of paragraphs 8 and 9 of the affidavit of administrator filed herein are noted, however the orders of the Honourable Justice Keogh made on 25 March 2024 in S ECI 2023 01209 made no reference to Marguerite Flora Pendergast (Marguerite) or Michael Ralph Thomas Ewhelski (Michael) being passed over as executors.
File an order of the Court passing over both Marguerite and Michael. Alternatively, file renunciation(s) of probate executed by Marguerite and Michael.
•As the plaintiff has no beneficial interest in the estate, file a surety guarantee to the value of $911,471.70 from an independent person other than the plaintiff. An affidavit of justification must also be filed. See rules 7.01, 7.02 and 7.03 of the Supreme Court (Administration and Probate) Rules 2023.
LHPW Lawyers wrote separately to each of the parties advising them about the Registrar of Probates’ requisitions, and requesting that they each execute renunciation of probate and consent to dispensation of surety documents enclosed with the letters. LHPW Lawyers advised that if the parties were not willing to consent to dispensation of the surety, Hughes was unwilling to assume the role of administrator of the Estate.
Pendergast subsequently executed a renunciation of probate consenting to be passed over as executor, and a consent to dispensing with the need for Hughes to provide a surety.
Ewhelski has declined to renounce probate or to dispense with the surety requirement.
On 22 August 2024, Pendergast issued a summons seeking to vary the March orders to include that both she and Ewhelski be passed over as executors, and that the requirement of a surety be dispensed with.
The following affidavits were filed by the parties in relation to Pendergast’s summons:
(a) affidavits of Stephen Kirby (‘Kirby’), solicitor for Pendergast, affirmed 22 August and 6 September 2024; and
(b) affidavits of Ewhelski sworn 3 September and 9 September 2024.
In his affidavit of 22 August 2024, Kirby recorded briefly the history of events following the March orders being made as set out above.
Ewhelski’s affidavit of 3 September 2024 contains a series of allegations against Pendergast, her lawyers, and Hughes. There is no basis for the allegations apparent in the affidavit. Ewhelski also states that the minute of consent which formed the basis of the March orders was ‘signed under duress in unfair proceedings which is unconscionable’. Ewhelski then states:
31.I rely on the inherent powers of the Supreme Court of Melbourne and the overarching obligations upon the Court under the Civil Procedure Act (Vic) s8, s9 and s11 for Orders in remedy:
32.That the agreement between the parties signed on 25th of March 2024 be rescinded in equity.
33.That a temporary stay in proceeding be allowed for the construction of a proper settlement agreement between the parties.
34.The Court secure the property title to 90 Northumberland Road, North Sunshine from the plaintiff.
35.That the Plaintiff pay all costs in relation to this application and those costs be deducted from the plaintiff’s share of the estate on an indemnity basis.
Kirby’s affidavit of 6 September 2024 briefly sets out Pendergast, Kirby and Hughes’ denial of Ewhelski’s allegations. Further, Kirby says:
In light of the content of the first defendant’s affidavit, on 4 September 2024, I sent a letter by email to the first defendant that warned him that:
a.I did not consider that the Court had the power to make the orders he sought;
b.In any event, the Court would not likely consider making any of the orders he sought unless he made a formal application for those orders;
c.he should make the application, if he was going to, urgently, so that it could be heard on 13 September 2024 along with the plaintiff’s application, so as to minimise the number of court appearances.
Ewhelski’s affidavit of 9 September 2024 contains some matters in relation to Pendergast’s lawyers that do not appear relevant, makes a minor correction to his first affidavit, and briefly repeats the allegations against Pendergast, her lawyers and Hughes.
Relevant authorities
The inherent jurisdiction of the Court to vary or set aside orders finally disposing of a proceeding is limited to well-known exceptional circumstances, and is to be exercised with caution. In Lollis v Loulatzis (No 3),[1] Kaye J said:
… It is a well established principle that once an order of a Court has been perfected in a form which accurately expresses the intended form of the order (such as by being authenticated under the Rules of the Supreme Court), the Court which made that order has no jurisdiction to alter or rescind it, save in particular exceptional circumstances. Those exceptions are, in general, confined to circumstances which involve clarification of the recorded judgment, or to making minor alternations to a judgment which do not affect the operative and substantive part of the judgment, and to circumstances (such as fraud and breach of natural justice) which impeach the obtaining of the judgment or order.[2]
[1][2008] VSC 231.
[2]Ibid [12].
In Gamboni v Bendigo and Adelaide Bank Ltd (No 2),[3] the Court of Appeal discussed the scope and effect of the Court’s inherent jurisdiction to make a supplemental order, and referred with approval to the following description of that jurisdiction in VFS Group Pty Ltd v BM2008 Pty Ltd:[4]
The inherent jurisdiction of the court permits the setting aside or recall of an order which was intended to be made but which has had unforseen or unintended legal consequences. The inherent jurisdiction is not confined by the scope of the slip rule ...An application of the inherent jurisdiction of the court to correct an order which, although made in the terms the court pronounced, had legal consequences that were unforseen or unintended, has the effect that the rights and obligations of the parties at the time the initial order was made, are to be deemed to be, at that time, the rights and obligations in accordance with the order as corrected. With similar effect to an application of the slip rule, the ‘later order corrects the earlier order, and speaks from the date of the earlier order, which then operates with full force as corrected’. The earlier order is deemed or treated as having always operated as corrected. The presence of supervening events is a consideration to be taken into account in the exercise of discretion; it does not preclude the correction.[5]
[3][2013] VSCA 282 (‘Gamboni’).
[4](2010) 80 ACSR 240 (‘VFS Group’).
[5]Gamboni (n 3) [62], quoting VFS Group (n 4) [24]-[25].
Consideration
The March orders provided for letters of administration (with the will annexed) in respect of the estate of the deceased to be granted to Hughes. Pendergast has not applied to vary or set aside that order.
When the order was made, it was contemplated that to give effect to the order, Pendergast and Ewhelski would be passed over as executors of the deceased’s estate. Since the order was made, Pendergast has consented to being passed over as executor. Ewhelski has declined to give that consent.
I conclude that I have jurisdiction to make supplemental orders that Pendergast and Ewhelski be passed over as executors of the deceased’s estate. The passing over of the parties as executors was an unstated but inherent feature of the consent agreement to settle the proceeding, and of the March orders. At the time the order was made, it was not foreseen that it would be impossible for it to be put into effect because the parties, or one of them, would decline to renounce probate.
Ewhelski’s opposition to this aspect of Pendergast’s application appears to be based on his challenge to the consent order appointing Hughes administrator of the deceased’s estate. Ewhelski has not applied to set aside that order. On the basis of the materials before me, such an order would not be justified.
I conclude for the above reasons that an order should be made under s 15 of the Administration and Probate Act 1958 (Vic) that Pendergast and Ewhelski be passed over as executors of the deceased estate.
Pendergast also submitted that an order should be made dispensing with the requirement for a surety for the following reasons. First, Hughes is a solicitor and there is no genuine suggestion that he would misappropriate the deceased’s estate in a way that would require a surety. She submitted that the surety is excessive and ought be dispensed with. Second, Hughes is unwilling to further his application for letters of administration if the requirement for a surety stands, because his entitlement to be indemnified from the deceased’s estate is unclear. Given the March orders, neither Pendergast nor Ewhelski can now apply for a grant of probate. The administration of the deceased’s estate cannot progress if the surety requirement is not dispensed with.
Pendergast did not challenge the jurisdiction of the Assistant Registrar of Probates to require that Hughes file a surety guarantee to the specified value under rr 7.01, 7.02 and 7.03 of the Supreme Court (Administration and Probate) Rules 2023.
In the circumstances, any request by Hughes that the requirement for a surety guarantee be dispensed with ought, at least in the first instance, be directed to the Registrar of Probates.
Conclusion
I will make the first order sought by Pendergast that both she and Ewhelski be passed over as executors of the deceased estate.
Pendergast submitted that if her application was successful, the costs order in the March orders would remain in effect but that the court had a discretion to make a further costs order. She submitted that if the court were to make such an order, the costs of her application should be either:
(a) paid for by the estate on a standard basis; or
(b) paid for by Ewhelski, in circumstances where he had previously consented to the appointment of Hughes as administrator of the deceased’s estate and then refused to consent to being passed over as executor in order to give effect to that position.
Ewhelski submitted that Pendergast should bear the costs of the application, because she was the cause of any uncertainty in the March orders resulting in the need for a further application.
In circumstances where the result of the application is to give effect to an inherent feature of the March orders, I will make a further costs order that the costs of the application are borne by the estate on a standard basis.
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