Re Ciantar
[2022] VSC 116
•9 March 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S PRB 2020 33195
IN THE MATTER of the estate of CARMEL MARY CIANTAR, deceased
| ANTHONY JOSEPH CIANTAR | Plaintiff |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 7 May 2021 |
DATE OF JUDGMENT: | 9 March 2022 |
CASE MAY BE CITED AS: | Re Ciantar |
MEDIUM NEUTRAL CITATION: | [2022] VSC 116 |
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WILLS AND ESTATES — Where plaintiff seeks to be appointed as administrator ad litem — Where plaintiff in a position of conflict of interest — Where plaintiff unable to provide an administration guarantee.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Rizzi | KHQ Lawyers |
| For the non-party, Aimee Lauren Ciantar | Mr D W Laidlaw | Stenta Legal |
HER HONOUR:
Introduction
Carmel Mary Ciantar (‘the deceased’) died on 24 June 2019, aged 81 years. The deceased’s will dated 2 April 2014 appoints her granddaughter, Aimee Lauren Ciantar (‘Aimee’), as her executor and distributes the residue of her estate to Aimee and the deceased’s son, Anthony Joseph Ciantar (‘the plaintiff’), subject to a right of residence to the deceased’s long term domestic partner, John Windsor Milne (‘John’), allowing him to continue to reside in the deceased’s property at 117 Harold Street, Middle Park (‘the Middle Park property’) until he dies or is no longer able to live there. The residue of the estate is to be distributed in the proportions of 60 per cent to Aimee and 40 per cent to the plaintiff. The plaintiff is Aimee’s father.
In February 2014, the deceased transferred the Middle Park property into the joint names of herself and Aimee. The solicitor acting for the deceased in both the inter vivos transfer and the deceased’s will was Ms Gina Faba (‘Ms Faba’) of the firm Stenta Legal.
In September 2015, the deceased and Aimee were registered as the joint proprietors of the Middle Park property. On the death of the deceased, Aimee was the surviving proprietor of the Middle Park property and in December 2019 was registered as the sole proprietor. As the deceased held no assets in her name at the date of her death, it was unnecessary for Aimee to obtain a grant of probate of the deceased’s will.
In late 2020, Aimee sold the Middle Park property for $5,900,000. She then purchased properties in Amstel Court, Hoppers Crossing for $1,670,000 and Liardet Street, Port Melbourne for $520,000. The plaintiff agreed to the sale and purchases in exchange for Aimee agreeing to allow the estate of the deceased to lodge caveats on the titles of the two properties and the balance of the sale proceeds after expenses, amounting to approximately $2,700,000 being deposited into an interest bearing account in the joint names of Aimee and the plaintiff pending finalisation of a proposed proceeding by the estate or other agreement.
Plaintiff’s application
By originating motion filed 15 December 2020, the plaintiff sought a grant of letters of administration ad litem of the estate of the deceased for the purpose of commencing and having the conduct and carriage of a foreshadowed proceeding against Aimee for the recovery of the Middle Park property.
The plaintiff’s affidavit sworn on 14 December 2020 describes the family history and the details of the deceased’s last will and penultimate will dated 16 September 1997. While the last will was prepared by Stenta Legal, the deceased’s penultimate will was prepared by Lawson Hughes McComas.[1] Under the penultimate will, the plaintiff was the sole beneficiary of the estate with a gift over to the plaintiff’s three children.
[1]Counsel referred to the firm Lawson Hughes Peter Walsh, however, the will records the solicitors as Lawson Hughes McComas. For the purposes of this proceeding, it is presumed that at some stage the firm changed its name to Lawson Hughes Peter Walsh.
The plaintiff deposes that he has been advised there are three possible causes of action to attempt to set aside the transfer of the Middle Park property to Aimee, being equitable undue influence, unconscionable conduct or that the deceased lacked capacity to transfer the property, noting that he did not waive privilege over such advice.
In addition to the appointment as an administrator ad litem of the estate of the deceased, the plaintiff sought orders:
(a) enabling the plaintiff to access all documents and legal files, including file notes, of the deceased’s former lawyers relating to the transfer of the Middle Park property;
(b) obtaining access to all medical or like reports or records concerning or relating to the capacity of the deceased at or before the transfer of the Middle Park property;
(c) if appropriate, compromising the proceeding upon such terms as the plaintiff may think fit;
(d) giving consent on behalf of the estate of the deceased to the making of orders and the entry of judgment by the Court to conclude the proceeding;
(e) otherwise prosecuting the proceeding to judgment and taking all such steps as may be appropriate to enforce any such judgment on behalf of the estate of the deceased; and
(f) dispensing with the requirement that the plaintiff provide an administration guarantee in relation to his administration of the estate.
The plaintiff submits that he is the appropriate person to investigate the transfer and instigate a proceeding to set aside the transfer of the Middle Park property as he stands to benefit if the transfer is set aside.
The plaintiff is unable to provide an administration guarantee in respect of any potential breaches of duty by him as a limited administrator of the estate as he has been unable to find an insurer in Victoria or any family members who are prepared to provide such a guarantee.
On the first return of the application, the plaintiff was required to file a further affidavit addressing his standing to obtain a limited grant ad litem on behalf of the estate, a confidential advice by counsel as to the merits of the plaintiff’s proposed claims and an outline of a proposed statement of claim. The advice and proposed statement of claim suggested three possible bases to attempt to set aside the sale of the Middle Park property, however, both rely more on the requirements or elements of the suggested claims, rather than any facts.
Aimee’s summons
Prior to the return date of the proceeding on 26 March 2021, Aimee filed a summons on 23 March 2021 seeking to be joined as a defendant to the proceeding and for orders that the plaintiff’s application for a limited grant ad litem be dismissed. Alternatively, in the event that a limited grant ad litem is issued, Aimee sought that the administrator be an independent person and the grant limited in time for the purpose of enquiring as to whether to institute a proceeding against Aimee.
In support of her summons, Aimee relied on an affidavit sworn by John on 9 March 2021 and an affidavit affirmed on 16 March 2021 by Ms Faba, the solicitor who advised the deceased in relation to the transfer of the Middle Park property and the making of the deceased’s will dated 2 April 2014.
These affidavits detail the circumstances leading up to and including the transfer and the making of the deceased’s last will, the deceased’s health over the years and her relationship with the plaintiff.
At the hearing on 26 March 2021, the plaintiff consented to the joinder of Aimee. On 7 May 2021, the plaintiff and Aimee addressed the Court on both applications. Subsequently the plaintiff emailed further written submissions to the Court and further submissions were filed by Aimee.
Plaintiff’s submissions
The plaintiff submits that, but for the transfer, the Middle Park property would form part of the estate of the deceased to be dealt with in accordance with her will.
Foreshadowed further causes of action
Consequent to the filing of the affidavits in support of Aimee’s summons, the plaintiff raised two possible further causes of action. The first is that Aimee was in a fiduciary relationship with the deceased as her financial attorney when the transfer was signed and she profited from her position by accepting the transfer. The second is that the ‘gift’ of the Middle Park property may not have been completed in equity prior to the deceased losing capacity, noting that an email from Aimee dated 9 July 2015 to the plaintiff states that the deceased ‘was deemed cognitively impaired in September 2014’.
Aimee’s summons
The plaintiff submits that Aimee’s proposed summons seeking to dismiss the plaintiff’s application is essentially an application for summary dismissal of the plaintiff’s foreshadowed claims to recover the Middle Park property on behalf of the estate. On that basis, the plaintiff submits that a similar legal test ought to apply to Aimee’s application.
The plaintiff submits that if his application is dismissed, the conduct that gave rise to the transfer would never be investigated and given the significance of the transfer of the Middle Park property to Aimee for no consideration, it is appropriate that the plaintiff be accorded procedural fairness by the Court making directions for the further hearing of Aimee’s summons. The plaintiff and Aimee agreed that if that course were to be taken, further procedural orders, including discovery against non‑parties, would be required before Aimee’s application could be heard. The proposed discovery orders against non-parties include discovery from Stenta Legal, Lawson Hughes Peter Walsh, all medical or like reports or records, including hospital records, concerning or relating to the capacity of the deceased from 1 January 2010 to 31 December 2016 and further orders for the filing of affidavits by both the plaintiff and Aimee, submissions and a trial date.
Should an independent administrator ad litem be appointed?
The plaintiff submits the appointment of an independent administrator ad litem would unduly stultify the ability of the estate to pursue a potential arguable case, would bring few benefits and otherwise cost the estate a lot more in fees, which would need to be funded in the first instance by the plaintiff personally.
An independent administrator would charge for their own time in obtaining appropriate discovery and investigation of the transfer and there would also be charges for the legal work undertaken by their solicitor. This would cost a lot more than the plaintiff performing the same tasks with the plaintiff paying for these costs personally. Further, an independent administrator would not commence a proceeding unless the estimated costs of their legal team were paid by the plaintiff and would also require an indemnity for any adverse costs orders in a potential proceeding.
The overall cost of the proceeding would be a lot more if an independent administrator needed to be funded, rather than the plaintiff funding the estate’s action without the involvement of an additional professional person charging significant fees.
The plaintiff has already incurred significant expense in providing a confidential advice and a proposed draft statement of claim to the Court and these expenses would be wasted if an independent person were appointed.
The plaintiff submits that an independent administrator ad litem would not be able to compromise a proceeding against Aimee without the plaintiff’s agreement. If that occurred, both the independent administrator and the plaintiff would need to receive their own legal advice before any proposed compromise could be accepted. This would mean that the costs to compromise the proceeding would effectively be doubled.
Administration guarantee
The plaintiff submits that an administration guarantee is not appropriate at this stage of the proceeding because the estate currently contains no assets which the administrator ad litem can lose as all that the estate has is a potential claim to recover the Middle Park property. If the claim to recover the Middle Park property fails, the only beneficiary of the estate that would suffer a loss would be the plaintiff. Aimee, as the other residuary beneficiary under the will, would not suffer any loss if the claim fails as she has already received the full proceeds from the sale of the Middle Park property. Similarly, John no longer has an interest in the claim as Aimee has allowed John to live in one of the properties purchased by her using the funds from the sale of the Middle Park property. If the claim to recover the Middle Park property is successful, then the estate would have some value and assets to lose and, in those circumstances, an administration guarantee may be appropriate.
The proposed orders granting administration ad litem specifically state that the plaintiff would not be authorised to distribute any part of the estate of the deceased until a further order of the Court is made. In addition, the plaintiff intends to provide an undertaking to notify the Court within 14 days of any property being recovered for the estate and not distribute any part of the estate of the deceased until the Court otherwise orders.
The plaintiff submits that the combination of his proposed orders and undertaking provides significant protection against any potential loss the estate may suffer if the foreshowed claim is successful in recovering the Middle Park property.
Independent counsel
At the hearing on 7 May 2021, Aimee expressed concern that because of the plaintiff’s close personal connection to any potential claim by the estate, the plaintiff would be unable to bring an independent mind to the role of administrator ad litem.
The plaintiff responded that if he were the administrator ad litem for the estate of the deceased, he would undertake to seek advice from alternative counsel on the prospects of the foreshadowed claim to recover the Middle Park property after all documents relevant to the foreshadowed claim were received and would not commence a proceeding on behalf of the estate unless he were advised in writing by the alternative counsel that the estate has a reasonable prospect of recovering the Middle Park property for the estate.
The plaintiff submits that the alternative counsel would have the benefit of all of the discovered documents to enable them to consider any foreshadowed claim to recover the Middle Park property and they would be able to provide a considered second opinion. This would provide the Court with confidence that the plaintiff was acting on considered independent advice before proceeding with the foreshadowed claim.
Plaintiff’s conclusions
The plaintiff is the only beneficiary of the estate that benefits from the foreshadowed claim to recover the Middle Park property. Aimee has no interest in the claim for obvious reasons and John no longer has an interest in the claim. Therefore, the plaintiff is the only person with a real interest in the foreshadowed claim.
An independent administrator would not be appropriate and is not required. Such an appointment would unduly add to the costs of the proceeding and may stultify the ability of the plaintiff to pursue a clearly arguable case on behalf of the estate. With alternative counsel advising the plaintiff in his role as administrator ad litem, the Court can have confidence that the plaintiff and the estate will receive further independent and dispassionate advice before proceeding with any claim. Such additional advice goes a long way to achieving the independence desired by the Court. Further, the additional undertakings proposed to be made by the plaintiff ought alleviate any concerns the Court may otherwise have in appointing the plaintiff as administrator ad litem to represent the estate.
Aimee’s submissions
Aimee has an interest in the proceeding as she is the named executor in the deceased’s last will, a beneficiary under the last will and is the prospective defendant in the claim proposed by the plaintiff. Aimee concedes she is in a position of conflict as regards the potential claim by the plaintiff.
Aimee seeks to be joined to the proceeding to be heard on the question of whether the plaintiff ought be appointed as administrator ad litem for the purpose of bringing or investigating a potential claim against her in relation to the inter vivos transfer of the Middle Park property.[2]
[2]Pursuant to r 9.07 of the Supreme Court (General Civil Procedure) Rules 2015.
Aimee’s primary position is that an ad litem grant ought not be made. She submits there is no utility in seeking a grant of probate given that the estate has no assets. She submits that in order to seek the appointment of an administrator ad litem, the plaintiff must establish that the due and proper administration of the estate requires ‘careful investigation, and, as near as one can tell at this stage, litigation in relation to one or more claims is likely’.[3]
[3]Re Crane (2005) 93 SASR 198, 207 [41] (Besanko J).
She relies on the affidavits of John and Ms Faba, both of whom were involved at the time of the transfer. Their evidence is to the effect that the deceased was clear and consistent in her desires to benefit Aimee to the exclusion of the plaintiff. She submits their evidence demonstrates that the deceased acted on her genuine, independent and long-standing will and intent, without influence from Aimee and in circumstances where there was no indication of any lack of capacity on the part of the deceased.
She rejects the plaintiff’s position that the deceased’s last will suggests that the deceased did not understand that the effect of the transfer was that the Middle Park property would not form part of her estate upon death as it ignores the evidence of Ms Faba, a solicitor and officer of the Court.
While Aimee does not know the content or conclusions of the confidential advice, she submits there is no evidence amounting to actual undue influence and, to the extent that the plaintiff may contend that the support and closeness of the relationship that existed between Aimee and the deceased gave rise to any presumed undue influence, that contention is rebuttable by the evidence of the deceased having acted upon the exercise of an independent and informed will as supported by the affidavits of Ms Faba and John. Further, she submits there is no evidence of any weakness amounting to a special disadvantage suffered by the deceased. Even if age or infirmity were to amount to a special disadvantage generally, the inter vivos transfer of a joint proprietorship to Aimee was fair, just and reasonable. By the transaction the deceased did not surrender any of her own interest in the Middle Park property and she continued to enjoy the security arising out of full ownership thereof. The transfer met the deceased’s long-held desires of benefitting Aimee and excluding the plaintiff upon her death and the deceased clearly required Aimee to fund the necessary stamp duty implications of the transfer, which was done at no cost to the deceased.
Aimee submits that the evidence meets, and ought dispel, any concerns the plaintiff has raised based entirely on suspicion, unsupported by any evidence. On that basis, the threshold of there being circumstances that merit careful investigation is not met.
Further, Aimee has indicated her consent to orders providing the discovery proposed by the plaintiff as she is confident that there are no documents that will support any of the potential claims seeking to impugn the transfer of the interest to her.
Aimee’s position if an ad litem grant is made
In the event that the Court considers that a grant of administration ad litem is warranted, Aimee submits that the plaintiff is also conflicted in relation to the outcome of any such careful investigation, such that it is appropriate that an independent party be appointed. Aimee submits that the plaintiff’s proposal that advice of alternate counsel be sought as a pre-condition to a proposed proceeding is problematic. First, the plaintiff’s objectivity in this decision is no less conflicted than that of Aimee. The plaintiff would be most unlikely to accept the decision of an independent mind on the matter or an alternate proposition whereby Aimee would brief alternate counsel to advise on whether a claim ought be brought.
Secondly, counsel so briefed would be placed in an invidious position. It is clear that the plaintiff is desirous of commencing a proceeding. If the plaintiff has nothing to lose in doing so, he will of course proceed, subject only to meeting the minimum threshold of a proper basis certification. It is obvious that he will be motivated to do so even in the face of a claim that is not necessarily strong, as the associated costs and risks will be expected to at least drive some settlement, by reason of which his interests will be advanced. The decision-making process in the hands of the plaintiff is likely to be something other than the objective and independent decision of an administrator ad litem acting properly for the purposes of the due and proper administration of the estate and having regard to the interests of the parties beneficially entitled to the estate. Notably, both Aimee and John are also beneficiaries under the deceased’s will and it is inaccurate for the plaintiff to waive this issue away and claim that only he is interested in the outcome of the threatened litigation. The need for independence is also consistent with the fiduciary nature of the appointment as administrator whereas the plaintiff’s obvious self-interest stands in contrast.
If the Court is of the view that upon the whole of the available evidence the threshold of there being circumstances that merit careful investigation has been met, then such investigation and subsequent decision as to whether to proceed or not ought be made by an independent person selected and appointed by the Court.
Costs
Costs issues are relevant, both in terms of the plaintiff funding such appointment, if it is to occur and, further, of Aimee in responding to the plaintiff’s application.
If an independent administrator ad litem is to be appointed, at least in the first instance the costs incurred ought be borne by the plaintiff. It is the plaintiff alone that seeks to advance this issue for his personal gain.
In response to the plaintiff’s submission to the effect that ‘an independent administrator ad litem would bring few benefits to the estate and otherwise cost the estate a lot more in fees’, Aimee submits this minimises the importance of the objective and independent mind required of a person who is to act on behalf of the interest of all beneficiaries and not in self-interest. It is not necessarily the case that the administrator, who may be a legal practitioner experienced in the jurisdiction, would charge more than the plaintiff’s present legal representatives, nor is there any evidentiary basis for such a submission. The costs of an administrator no doubt are required to be necessary and proportionate, as would be the case of any legal professional representatives engaged directly by the plaintiff should he succeed in obtaining the appointment. The costs associated with drawing a single statement of claim is not a weighty issue in the context of the interests of justice and, in any compromise of a later proceeding, all interested parties will consider obtaining their own advice. That is proper and to be expected in such claims. It does not mean that the costs, comparatively, will be doubled, as is suggested by the plaintiff.
Administration guarantee
If an independent administrator ad litem is appointed, arguably the risk of maladministration is reduced, and the prospects of recovery would be commensurately greater. Critically, this would not be the case if the plaintiff is appointed as the conflict arising out of self-interest raises the risk of maladministration, as does his conflictual relationship with Aimee, given the diametrically opposed position each holds in relation to the issues.
Further, the plaintiff urges the Court to approach the question of a guarantee on the basis that the estate contains no assets which the administrator ad litem can lose. Rather, if the Court is to accede to the plaintiff’s application, it is his position that the estate stands possessed of a chose in action representing the value of the Middle Park property in the order of $5,900,000.
Conclusions
Aimee submits that the threshold of there being circumstances that merit careful investigation have not been met. In the event that the Court is against her, then an independent administrator ad litem should be appointed for the limited purposes of conducting such enquiries as that person sees fits, through pre-issue discovery or otherwise, and making a decision as to whether the claim as postulated or similar ought be instigated and, if so, to carry out all the usual functions associated therewith. The plaintiff ought fund those costs as required.
In the event of the appointment of the plaintiff as an administrator ad litem, Aimee’s strong submission is that an administration guarantee be required.
In the event that the plaintiff is unsuccessful in seeking his appointment as an administrator ad litem, then Aimee seeks the costs of her summons.
Consideration
The plaintiff’s submission that Aimee’s summons should be considered on the basis that it is an application for summary dismissal of the plaintiff’s foreshadowed claims to recover the Middle Park property on behalf of the estate and that a similar test to a summary dismissal claim ought be applied in respect of Aimee’s summons is rejected. Aimee’s application is twofold: she objects to the appointment of the plaintiff as the administrator ad litem but, if such a limited grant is warranted, she considers that the administrator ad litem must be an independent person.
The plaintiff’s further submission that if his application is dismissed, the conduct that gave rise to the transfer of the Middle Park property would never be investigated is incorrect and misunderstands the role of an administrator ad litem. A grant ad litem provides for an administrator to represent a deceased’s estate for the purpose of enabling an estate to bring or defend legal proceedings and generally confers powers with respect to the management of the legal proceeding on behalf of an estate.[4]
[4]Greenway v McKay (1911) 12 CLR 310; Re McGown [1947] VLR 113; Hewitt v Gardner [2009] 3 ASTLR 407.
Such a grant will usually be made where there is no personal representative willing or able to take out a grant of probate or administration and where a proceeding involving the deceased cannot be continued or finalised without a representative of the deceased’s estate.[5] An order for a limited grant ad litem will not be made where there is an appropriate person available to take out a general grant of administration. As the deceased held no assets in her name at the date of her death, it was unnecessary for Aimee as the executor to obtain a grant of probate of the deceased’s will.
[5]Hewitt v Gardner (n 4) [89] (Ward J).
The plaintiff suggests that the estate has possible causes of action to set aside the transfer of the Middle Park property on the grounds of equitable undue influence and unconscionable conduct, and that the deceased lacked capacity at the time of the transfer. In addition, he foreshadowed two further causes of action: that Aimee was in a fiduciary relationship with the deceased as her financial attorney when the transfer was signed and she profited from her position by accepting the transfer, and that the ‘gift’ of the Middle Park property may not have been completed in equity prior to the deceased losing capacity.
If a limited grant ad litem is made, Aimee intends to rely on the evidence set out in the two affidavits filed in this proceeding. The affidavits address both the inter vivos transfer of one half of the Middle Park property to Aimee and the making of the deceased’s last will. As these affidavits provide extensive details of the plaintiff’s issues with the inter vivos transfer, the plaintiff or an independent administrator have the details of the circumstances of the inter vivos transfer by the deceased.
However, as a beneficiary under the deceased’s will, the plaintiff has no personal right and thus no standing upon which he can seek to set aside the inter vivos transfer by the deceased.[6] If there are proper grounds to set aside the inter vivos transfer, such a proceeding would be a chose in action held by the estate of the deceased and would be conducted in a separate proceeding.
[6]Scallan v Scallan [2001] NSWSC 1129, [9]–[12] (Windeyer J).
In certain circumstances, a beneficiary may pursue a claim that ordinarily vests in the executors of an estate, such as where an executor is unable or unwilling to bring the proceeding and the action is meritorious.[7] In the usual course, the executor would be joined as a defendant to any proceeding. While Aimee is the named executor in the will and a beneficiary, she acknowledges that she is in a position of conflict. John also has a limited beneficial interest under the will. Although the plaintiff recognises that he is not the only beneficiary of the estate of the deceased, he dismisses the interests of Aimee and John as beneficiaries on the basis that Aimee has received the sale proceeds of the Middle Park property and John lives in a property purchased by Aimee from the sale proceeds. If the plaintiff is appointed administrator ad litem, it is likely that he would pursue his own interests, rather than the interests of the estate. Such a position is contrary to the role of an administrator ad litem who is for all purposes the representative of the estate within the limits of the grant, with the administrator’s actions having the effect of binding the estate of a deceased and the entitlements of beneficiaries of an estate.[8]
[7]Ramage v Waclaw (1988) 12 NSWLR 84; Alexander v Perpetual Trustees WA Ltd (2004) 216 CLR 109; Hewitt v Gardner (n 4); Porker v Richards [2016] SASC 98; De Lorenzo v De Lorenzo [2019] NSWSC 534 (‘De Lorenzo’).
[8]Re Coe [2013] 9 ASTLR 287, [10] (Young AJ), citing Faulkner v Daniel (1843) 3 Hare 199; 67 ER 355, 359 (Wigram VC).
In the event that an administrator ad litem is appointed, the plaintiff and Aimee agreed on extensive proposed discovery from the deceased’s former solicitors, Lawson Hughes Peter Walsh, of files for the making of the deceased’s penultimate will and any subsequent contact with the deceased or Aimee; the files from Stenta Legal, relating to the transfer and the making of the deceased’s powers of attorney and last will and all medical and hospital records and any medical reports concerning the capacity of the deceased from 1 January 2010 to 31 December 2016. The proposed orders are wide-ranging and include non-party discovery orders. Where the question to be determined in this proceeding is whether the plaintiff ought be appointed as administrator ad litem it is not appropriate to make such orders in this proceeding.
In making an order appointing an administrator ad litem, the Court exercises careful consideration of the form and scope of such a grant. The usual form of orders in a grant ad litem appoints an administrator to represent a deceased’s estate for the purpose of enabling the estate to bring or defend legal proceedings and to confer powers with respect to the management of the legal proceeding on behalf of the estate. It is also usual for a proposed statement of claim to be filed so that the Court can evaluate the causes of action proposed to be issued by administrator ad litem.
In the usual course, a proposed administrator ad litem must file an affidavit confirming that they are independent and cognisant of their fiduciary duties when taking up the appointment, so as to protect innocent third parties.[9] An administrator ad litem represents the estate within the limits of the grant and the administrator’s actions bind the estate, may affect the entitlements of all beneficiaries and will have cost consequences for the estate. Prima facie, an administrator ad litem may also be perceived to have an entitlement to indemnification from the estate for costs incurred as administrator.[10]
[9]Ibid [23] (Young AJ).
[10]De Lorenzo (n 77) [60]–[62] (Ward CJ).
The plaintiff’s objections to the appointment of an independent administrator ad litem rests mainly on the basis that an independent person would bring limited benefits and increased costs and the plaintiff would be required to fund those costs. The proposal that the plaintiff would obtain advice from alternative counsel fails to provide the necessary independence required by the Court when appointing an administrator ad litem to act on behalf of an estate.
The plaintiff is also unable to provide an administration guarantee. Pursuant to s 57 of the Administration and Probate Act 1958 (Vic) and r 7.01 of the Supreme Court (Administration and Probate Rules) 2014, the Court may require an appropriate bond or guarantee to secure the performance of the duties of an administrator. In the ordinary course, a guarantee is required when an application is made to bring or defend a proceeding, unless good reason is shown to the contrary.[11] The reasons for an administration bond or guarantee were explained by Besanko J in Re Freebairn[12] as follows:
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.[13]
[11]Re Tratt [1980] VR 657, 663 (Brooking J); Re Curran [2010] VSC 455, [26] (Ferguson J).
[12](2005) 93 SASR 415 (‘Re Freebairn’).
[13]Ibid 420 [22] (Besanko J).
The reasons provided by the plaintiff for being unable to provide an administration guarantee to secure his performance of the duties as administrator is that he has been unable to find an insurer or family member willing to provide a guarantee. These reasons do not amount to a good reason for the Court to dispense with the requirement for an administration guarantee.
Conclusion
The Court is not satisfied that a grant of administration ad litem should be made to the plaintiff.
Orders
The Court orders that:
a) Pursuant to r 9.07 of the Supreme Court (General Civil Procedure) Rules 2015, Aimee Lauren Ciantar be added as the defendant to the proceeding;
b) The plaintiff’s application for appointment as administrator ad litem of the estate of Carmel Mary Ciantar, deceased, be dismissed; and
c) If the parties are unable to agree on costs, written submissions as to the costs of the plaintiff’s application for appointment as administrator ad litem be filed and served by 30 March 2022 and thereafter determined on the papers.
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