Re Estate of Valerie Day
[2025] VSC 303
•30 May 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S PRB 2025 05387
IN THE MATTER of the estate of VALERIE EVELYN DAY, deceased
BETWEEN:
| PETER LEO DAY | Plaintiff |
| v | |
| MICHAEL GERARD DAY | Defendant |
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JUDGE: | GRAY J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 24 April 2025 |
DATE OF JUDGMENT: | 30 May 2025 |
CASE MAY BE CITED AS: | Re Estate of Valerie Day |
MEDIUM NEUTRAL CITATION: | [2025] VSC 303 |
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ADMINISTRATION AND PROBATE — Administrator — Application for independent legal practitioner to be appointed as limited administrator pendente lite — Plaintiff alleged defendant dissipated funds as attorney under enduring power of attorney during the deceased’s life — Plaintiff alleged defendant in control of estate assets, and associated family trust and superannuation fund — In related proceeding, defendant seeking probate of a will appointing him sole executor, specific beneficiary of deceased’s former home and sole residuary beneficiary — Plaintiff alleged defendant was in a position of undue influence over deceased during last five years of her life as her live-in carer — Plaintiff alleged defendant had remained in possession of deceased’s former home since her death rent free — Necessary to appoint independent person to preserve estate assets and ascertain potential debts to and property of the estate while the defendant’s application for probate is pending — Limited administrator is empowered to sell the property if necessary to fund costs of estate administration — Sale of property will defeat a specific bequest but is permitted in absence of other estate assets to fund costs of estate administration — Henderson v Executor Trustee Australia Ltd & Ors (2005) 93 SASR 337; [2005] SASC 477 — Administration and Probate Act 1958 s 22.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms A Bartfeld | Davis Lawyers |
| For the Defendant | Mr T Staindl | Bastian Hancock Stynes Lawyers |
TABLE OF CONTENTS
Overview.............................................................................................................................................. 1
Applicable principles and questions for determination............................................................ 3
Facts...................................................................................................................................................... 5
Background facts and other assertions in the evidence.......................................................... 6
Estate assets.................................................................................................................................. 12
Submissions, offers and undertakings in this proceeding...................................................... 12
Consideration.................................................................................................................................... 16
Conclusion and orders.................................................................................................................... 21
HIS HONOUR:
Should the Court appoint an independent legal practitioner to be the administrator of this deceased estate while a dispute concerning probate is occurring and, if so, on what terms?
Overview
The plaintiff applies for an order granting letters of administration pendente lite (‘during litigation’) over the deceased estate of Valerie Evelyn Day (Ms Day).
The plaintiff, Peter Leo Day (Peter), and the defendant, Michael Gerard Day (Michael), are Ms Day’s sons. Michael opposes Peter’s application. Ms Day’s daughters, Suzanne Day (Suzanne) and Andrina Eileen Day (Andrina), consent to Peter’s application.
Ms Day died on 30 July 2022, predeceased by her husband.
From November 2013 Ms Day made five wills. Michael was named sole executor of Ms Day’s estate (estate) in the last three wills. In a related proceeding, S PRB 2024 12678, Michael seeks probate of Ms Day’s final will (probate proceeding).
Peter has lodged a caveat and objects to any grant of probate to Michael.
During the last five years of Ms Day’s life, Michael had an enduring power of attorney for Ms Day’s financial affairs and was living with her and caring for her at her home, 11 Ellabella Way, Mornington, Victoria (Mornington property). The last three wills were made in this period. They are significantly more advantageous to Michael than the earlier wills, and include a specific bequest of the Mornington property to Michael. Peter has also raised concerns about Michael’s use of his power of attorney during Ms Day’s final years. Matters relating to Michael’s use of the power of attorney are the subject of a proceeding in VCAT brought by Peter.
Peter seeks an order appointing a limited administrator pursuant to s 22(1) of the Administration and Probate Act 1958 (the Act)[1] on the basis of his concerns that Michael:
[1]Pursuant to his originating motion filed 21 March 2025 and his notice to produce filed 21 March 2025.
(a) used the power of attorney during Ms Day’s final years to dissipate Ms Day’s money, including by moving funds from accounts in Ms Day’s name and superannuation fund into a family trust, the trustee company of which (Roday Pty Ltd) Michael controls as its sole director and shareholder;
(b) thereby reduced the estate to the extent that only Michael stands to inherit anything from the estate (in the form of the specific bequest of the Mornington property) if any of the last three wills is admitted to probate; and
(c) has been in possession of the Mornington property since Ms Day’s death without paying the estate anything in return.
I am satisfied that it is appropriate — and in fact necessary — to appoint an independent administrator to the estate.
Peter obtained consents from two experienced wills and estates practitioners to act as administrators of the estate. Initially those consents were given on the express condition that the administrator be permitted to sell the Mornington property to fund their administration costs. Early in the hearing I expressed some concerns about empowering the administrator to sell the Mornington property, because it would render the specific bequest in the last three wills impossible to perform. Later in the hearing, Peter obtained varied consents that did not include this condition.
I have decided to appoint Ms Ines Kallweit (Ms Kallweit) as the limited administrator pendente lite. Despite having expressed concerns about any sale by the limited administrator of the Mornington property at the hearing, I have ultimately decided that the limited administrator should be expressly empowered to sell the Mornington property, and she may do so if she considers that there is a need to do so to fund the administration of the estate, including her remuneration and expenses. The Mornington property will be vested in her upon the grant of letters of administration pendente lite,[2] and she is empowered to sell it should she consider it necessary to do so to fund her administration. Ms Kallweit may take this step even though it will defeat the specific bequest contained in the last three wills. If one of those wills is ultimately admitted to probate, it is likely that principles of ademption or abatement may have to be considered. If the limited administrator is able to fund the administration from contributions such as voluntary loans to the estate by any of the children in the meantime, the sale will not be necessary.
[2]Administration and Probate Act 1958 s 13 (Act).
Ms Kallweit may make an application seeking advice and any necessary orders from the Court as to the details of how any sale is to be achieved, should the need arise.[3]
[3]Supreme Court (General Civil Procedure) Rules 2015 ord 54 (Rules).
Applicable principles and questions for determination
Section 22 of the Act is entitled ‘Administration pending litigation’ and provides:
(1) Where any legal proceedings touching the validity of the will of a deceased person or for obtaining recalling or revoking any grant are pending the Court may grant administration of the estate of the deceased to an administrator who shall have all the rights and powers of a general administrator other than the right of distributing the residue of the estate and every such administrator shall be subject to the immediate control of the Court and act under its direction.
(2) The Court may out of the estate of the deceased assign to any administrator appointed under this section such reasonable remuneration as the Court thinks fit.
Section 22 confers a broad discretion on the Court to appoint an administrator in the circumstances described in sub-s (1). Although that discretion is not expressly limited, it is clear from the context provided by s 22 as a whole that the discretion is to be exercised if the Court considers it necessary or appropriate to do so to preserve an estate during litigation about the validity of a relevant will or otherwise about a grant of probate or administration. The case of Henderson v Executor Trustee Australia Ltd and Others[4] distils the principles relating to the role of an administrator pendente lite, and so is of assistance in guiding the exercise of the Court’s discretion to appoint one. The applicable principles include that:
[4](2005) 93 SASR 337; [2005] SASC 477.
(a) the duty of an administrator pendente lite is to manage and preserve the assets ‘for the benefit of those found to be entitled to those assets’;[5]
[5]Ibid [44] (Debelle J, Anderson J agreeing at [131]). Debelle J then went on to note at [45] that an administrator’s duty is similar to that aspect of a trustee’s duty and requires them to act impartially between the beneficiaries, citing Knox v MacKinnon (1888) 13 App Cas 753, 768.
(b) the duty of an administrator pendente lite to preserve estate assets cannot be ‘elevated’ to undertake actions that would ‘prefer the interests of one potential … beneficiar[y] over another’, for example in cases where beneficiaries have ‘differing views as to how particular assets of the estate will be best administered’;[6]
[6]Ibid [48] (Debelle J).
(c) the administrator should be ‘totally dissociated from the litigation and is not to be seen to act in the role of an agent for any party’;[7]
[7]Ibid [121] (Anderson J), noting Tomkinson v Hersey (1983) 34 SASR 181.
(d) the administrator ‘must act impartially as between the potential beneficiaries’ and ‘cannot prefer the interests of one … potential beneficiar[y] over another’;[8]
(e) where potential beneficiaries cannot agree and the steps ‘proposed by the administrator might adversely affect one or more of the beneficiaries, the court will, as a general rule, give directions which will preserve the status quo’;[9] and
(f) the role of an administrator pendente lite is manifestly different to an administrator appointed under the Corporations Act 2001 (Cth), where the latter has wider powers.[10]
[8]Ibid [45], [51]–[53], (Debelle J); [121] (Anderson J).
[9]Ibid [45] (Debelle J), citing In the Estate of Hanna (1881) 7 VLR (IP & M) 44.
[10]Ibid [46]–[47] (Debelle J).
In my view, the principle of preservation of the status quo is directed to the preservation of the estate’s assets for the benefit of those who will ultimately, after resolution of the underlying litigation, be found to be entitled to it. It does not require strict adherence to whatever the current state of affairs may be. That is, where a person claiming as a beneficiary under an unproved will happens to be in possession of estate property without any present entitlement to do so, the court need not require that that state of affairs must necessarily continue until the underlying litigation is resolved. On the contrary, I regard the preservation principle as meaning that estate assets must be subject to the stewardship of the administrator and the estate should be protected from loss until the entitlements of any potential beneficiaries are made clear by the resolution of the underlying litigation.
The key questions for my consideration and determination are:
(a) Do the circumstances of this case warrant the appointment of an independent person as limited administrator pending the conclusion of the current litigation affecting probate?
(b) If so, on what terms and subject to what limitations should letters of administration be granted? In particular, should the administrator be expressly empowered to sell the Mornington property if she considers this to be necessary, for example because no funds are available to her to meet the costs of the administration?
Facts
Peter’s affidavit, affirmed 20 March 2025, provided an overview of the circumstances relating to the estate and exhibited various documents, including the five wills and Peter’s grounds of objection as caveator in the probate proceeding. Michael, by his affidavit affirmed 11 April 2025, agreed with parts of Peter’s summary. He also noted points of divergence from Peter and other additional points, and included in his exhibits his position statement in the probate proceeding, answering allegations in Peter’s grounds of objection. I have drawn on both affidavits and on the contents of the grounds of objection and responding position statement in the account that follows.
Background facts and other assertions in the evidence
On 21 November 2013 Ms Day executed the first of her final five wills (2013 will). On 24 May 2016 Ms Day executed another will (2016 will). The 2013 will and 2016 will each:
(a) appointed both Michael and Suzanne as executors of Ms Day’s estate; and
(b) bequeathed Ms Day’s animals to Suzanne and the residue of Ms Day’s estate to all four of her children in equal shares.
In November 2016 Michael moved in to live with Ms Day at the Mornington property and to provide care for her.
On 5 July 2017 Ms Day executed an enduring power of attorney appointing Michael to manage her financial affairs.
Also on 5 July 2017 Ms Day executed the third of her final five wills (2017 will). On 11 May 2018 Ms Day executed another will (May 2018 will). On 5 December 2018 Ms Day executed her final will (December 2018 will).
There are certain differences between these three wills. To explain them, I will describe the December 2018 will in some detail and then explain how the other two differ from it. By the December 2018 will:
(a) Michael is appointed sole executor and no alternative executor is mentioned;
(b) the Mornington property is specifically bequeathed to Michael;
(c) the contents of the Mornington property are also specifically bequeathed to Michael;
(d) Ms Day’s roll-top desk is bequeathed to her granddaughter Matilda Day, Suzanne’s daughter;
(e) the proceeds of the sale of Ms Day’s Mercedes Benz are bequeathed to her granddaughter Kataleah Day, Michael’s daughter;
(f) Ms Day’s mother’s engagement ring is bequeathed to Suzanne;
(g) Suzanne, Andrina, Michael and Peter are bequeathed ‘an equal share of [Ms Day’s] personal investments, share portfolio HIN X0016575399 and APN Property Trust funds account no. AREIT02265 and ANZ cheque and savings account proceeds [personal investments] equal to 25% of the total value with the value of the share received by Suzanne … being reduced by the sum of $200,000 and the share received by Andrina … being reduced by the sum of $50,000 such reductions being in adjustment for moneys already given to each…’;
(h) the beneficiaries are bequeathed ‘all [Ms Day’s] paintings, Lladro, ornaments and jewellery to be divided equally’;
(i) Michael is appointed as the director of Roday Pty Ltd (Roday) and beneficiary of the L&V Day Superannuation Fund (superannuation fund) and LH Day Family Trust (family trust);[11] and
(j) the residue of Ms Day’s estate is bequeathed to Michael absolutely.
[11]By exchange of correspondence, the solicitors for Peter and Michael agreed that this clause was void: it was beyond the scope of valid testamentary disposition. However, Michael’s solicitors stated that in any event he had been appointed director of Roday on 18 May 2017 and that Roday was corporate trustee of both the superannuation fund and the family trust.
The May 2018 will and December 2018 will are essentially the same except for the adjustment against Andrina’s share of Ms Day’s personal investments. The 2017 will is similar to the December 2018 will except for the omission of adjustments against both Andrina and Suzanne’s shares of Ms Day’s personal investments.
In early March 2019 Ms Day was admitted to Beleura Private Hospital (Beleura) for cellulitis in one of her feet.
In later March 2019, during her admission, notes made by Beleura record, among other things, that Ms Day:
… was increasingly agitated having previously complained about Michael’s management of her money as attorney pursuant to an Enduring Power of Attorney. She later told medical staff that she had resolved all issues with him and wanted to go home;
…
expressed concerns that her son had taken credit cards and won’t allow her access to any money;
…
made her son her power of attorney and “feels that he is abusing the power” …
On 24 March 2019 Ms Day left Beleura.
On 21 January 2020 Dr Vikram Bhalla, a geriatrician, wrote to Ms Day informing her that she had been diagnosed with ‘at least … moderate severity of dementia’ and noted that the:
MRI Brain showed changes of volume loss in parts of the brain and an old cerebellar stroke.
Ms Day was admitted to Beleura again in August 2021.
Following a conversation with Michael, a social worker’s note dated 16 August 2021 stated:
Serious psychiatric concerns – son noted Dr Leibowitz [sic] has seen Pt + diagnosed split personality, multiple personality disorder and psychophrenia [sic]. Son mentioned he believed pt is delusional …
Ms Day died on 30 July 2022.
On 21 October 2022 the Deputy Director of Medicine at Peninsula Health, Dr Elisabeth Nye, wrote to Peter explaining that Dr Nye had received an email from Michael in which Michael said he was not aware of the diagnoses documented for Ms Day — being schizophrenia and personality disorder — and wondered where they had come from. Dr Nye’s email noted that Michael had said he was Ms Day’s ‘Medical Treatment Decision Maker’.
Between August 2022 and February 2024 four caveats were lodged on Ms Day’s estate:
(a) On 18 August 2022 Aitkens Partners, the former solicitors for Andrina, Suzanne and Peter, lodged the first caveat. It expired six months after the date it was lodged.[12]
[12]Supreme Court (Administration and Probate) Rules 2014 r 8.03(1).
(b) On 22 February 2023 Suzanne lodged a second caveat. It expired on 24 August 2023.
(c) On 7 September 2023 Suzanne lodged the third caveat. It expired on 7 March 2024.
(d) On 19 February 2024 Davis Lawyers lodged the fourth caveat on Peter’s behalf, followed by grounds of objection (mentioned in more detail below).
In March 2023 Peter commenced a proceeding in VCAT (VCAT proceeding) pursuant to s 77 of the Powers of Attorney Act 2014. I assume that this proceeding remains on foot.
On 29 February 2024, in correspondence between their solicitors, Peter foreshadowed to Michael his intention to bring an application under s 15 of the Act.
On 12 March 2024 Michael, through his solicitors, proposed to have a mediation session with his siblings in order to resolve any issues relating to the estate and limit the number of proceedings foreshadowed by Peter. Michael says his mediation proposal was motivated by his unease regarding mounting legal costs, especially with the recent indication of a fresh proceeding.
In April 2024 Peter commenced an application pursuant to s 15 of the Act, S ECI 2024 01618 (s 15 proceeding).
Peter says the purpose of this proceeding was to compel Michael to bring Ms Day’s wills into Court and have him passed over as executor since Michael had declined to either apply for or renounce probate of Ms Day’s wills.
Michael’s primary reason given for not seeking a grant of probate after Peter brought the s 15 proceeding was that he was concerned that doing so would trigger further contested legal proceedings and the resulting fees. Michael says that this was of particular concern to him in light of the financial pressure he had felt from the VCAT proceeding, which had been on foot throughout most of 2023.
On 27 June 2024 Michael commenced the probate proceeding, this is his application for probate of the December 2018 will.
On 7 August 2024 Peter filed and served grounds of objection in support of his caveat lodged on 19 February 2024, which will have to be addressed in the course of hearing and determination of the probate proceeding.
The grounds of objection include the following:
(a) the 2017 will, May 2018 will and December 2018 will were invalid; and
(b) Michael is not a fit and proper person to be executor of any of Ms Day’s wills and should be passed over due to:
(i) his conduct as Ms Day’s attorney pursuant to the Enduring Power of Attorney dated 5 July 2017, where there was a conflict between his personal interests and his fiduciary duties as executor; and
(ii) his conduct in relation to the management of estate assets after Ms Day’s death, showing neglect of his duties as executor.
Michael denies any improper conduct as Ms Day’s attorney. Michael says that while Ms Day was alive the transfer of any assets out of her personal name was done in accordance with her advice and/or in consultation with her, and that he discharged his duty in good faith. His position statement in the probate proceeding says that, from 2021, Ms Day faced very expensive aged care costs leading to transfers of money from Ms Day’s name into other structures.
On 11 October 2024 the Supreme Court made orders in the probate proceeding requiring each party to file and serve a position statement.
On 20 February 2025 a mediation session was held with the intention to resolve issues pursuant to orders in the probate proceeding. The probate proceeding did not resolve. On this same day, after the mediation, Michael gave a limited one-month undertaking not to expend funds from the family trust (until 22 March 2025).
Michael says he could not extend the undertaking indefinitely owing to legal and accounting fees and to avoid higher taxation.
Michael says that since the expiration of this undertaking he has not expended any family trust funds.
On 17 March 2025 Michael’s solicitors wrote to Peter’s solicitors stating that Michael would pay out $166,890.48 from the trust fund of the family trust for the purpose of paying his legal fees.
On 18 March 2025 Peter’s lawyers responded, indicating that Peter did not consent to any dissipation of funds from the family trust, since those funds are the subject of a dispute, and sought an undertaking from Michael that he would not dissipate any funds until all disputes relating to the estate and Michael’s conduct as Ms Day’s attorney had been resolved.
As at 20 March 2025 Michael had not given this undertaking.
On 21 March 2025 Peter commenced this proceeding.
I am satisfied that the matters noted in paragraphs 18–23, 30, 32–36, 39, 40, 43–44, and 47–49 above did occur and are true, and make findings accordingly. I do not make findings that the representations and other assertions reproduced at paragraphs 24–29, 31, 37–38, 41–42, and 45–46 are true; however, I am satisfied that the representations were made and that they and the other factual assertions in those paragraphs raise matters that merit inquiry as to their truth.
Estate assets
The inventory of current assets and liabilities of Ms Day’s estate set out below was submitted by Michael in support of his application for probate on 27 June 2024 (see paragraph 39 above).
(a) The [Mornington] property valued at $1,355,000.00
(b) Jewellery, ornaments and furniture valued at $71,200.00
(c) ANZ bank account totalling $0.02
(d) APN AREIT investments totalling $183.39
No liabilities were noted in the inventory.
Michael’s evidence is that the estate currently comprises the Mornington property, jewellery, ornaments and furniture noted above. Michael says that he has resided at the Mornington property since November 2016 when he began caring for Ms Day. He continues to reside there now and does not pay rent to the estate.
Peter does not know whether the rates and other property holding costs have been paid. Michael says that they have been paid by him from his personal bank account. I cannot resolve this issue on the evidence before me, but it certainly merits inquiry.
Peter and Michael are in dispute about the composition and value of Ms Day’s estate. I address this in more detail in the next section of these reasons.
Submissions, offers and undertakings in this proceeding
Peter alleges that Michael appears to have misappropriated assets for his own benefit and the benefit of his immediate family members while Ms Day was still alive. Peter points in this regard to evidence in the VCAT proceeding (that he obtained leave of VCAT to rely upon in this proceeding and reproduced in his caveator’s grounds of objection) about Ms Day’s assets when the power of attorney in favour of Michael was made on 5 July 2017.
Peter says there is evidence that the ANZ bank account and APN AREIT investments, noted in Michael’s inventory to effectively have nothing in them, had substantial credit balances when Michael was appointed as Ms Day’s attorney, totalling more than $430,000. He also points to a Bell Direct portfolio account owned by Ms Day in July 2017 that had a credit balance of about $742,000. Peter points to a substantial accreditation of funds within the family trust, held by Roday, and suggests that funds drained from these sources might have been transferred to the family trust. Peter’s allegations raise the possibility that Michael or other entities, perhaps including the family trust, owe debts to the estate or may be holding money subject to a constructive trust in favour of the estate.
On 22 April 2025 Michael’s solicitors sent an open letter of offer (offer letter) on his behalf to each of the solicitors for Peter, Andrina and Suzanne. The offer was open for 14 days from the date of the letter. It proposed that income to the family trust be distributed equally to each of the four siblings on an ongoing basis, amounting to $1,508.25 monthly and $18,099 annually. In a section titled ‘offer’, it proposed:
(a) that net assets of the family trust, around $1.79 million, be distributed equally to each of the four siblings, including cash funds of approximately $823,000 (for distribution as soon as practicable) and approximately $965,000 (to be liquidated and distributed in March 2026);
(b) that parties agree to do all things reasonably practicable to facilitate the probate of the December 2018 will (and failing that, the May 2018 will, and failing that, the 2017 will); and
(c) that the parties agree to full releases of the family trust and estate.
On 24 April 2025 I heard Peter’s application in this proceeding for the grant of an independent administrator pendente lite.
At the hearing, counsel for Michael, Mr Staindl, indicated a general form of undertakings that Michael would be willing make if an administrator was not appointed, and these were subsequently received in written form and accepted into evidence. Michael’s undertakings were:
In the event the Court does not appoint an administrator pendente lite, Michael Gerard Day undertakes to:
1. Not dissipate any Trust assets for 90 days, subject to the below.
a. Payment of any proper Trust expenditure (including ASIC fees and like expenses, and reasonable legal fees incurred in the administration of the Trust).
b. Distribution of income, as agreed between the four children or equally between them.
c. Distribution of a capped capital sum of $50,000 to each of the four children (with each having a right to refuse to receive that capital sum).
2. Not encumber or otherwise diminish the value of the Mornington Property.
3. Not oppose Peter making an application against Roday in its capacity as trustee.
Through his counsel, Ms Bartfeld, and through his caveator’s grounds of objection in the probate proceeding, Peter submitted that the circumstances surrounding Michael’s relationship with Ms Day in her final years gave rise to a presumption of his undue influence on her at the time she made her 2017 and 2018 wills,[13] and that Ms Day was ‘completely reliant’ on Michael for her primary care and as her proxy financial and personal decision-maker. He says that Ms Day’s physical and mental issues positioned her as vulnerable. This, in turn, positioned Michael in a place of power and influence over her. Michael’s position statement in the probate proceeding denies alleged issues about Ms Day’s testamentary capacity, suspicious circumstances or undue influence.
[13]The affidavit of Peter Leo Day affirmed 20 March 2025 attaches exhibit ‘PLD-1’, which includes the Caveator’s grounds of objection, where at [71] Peter makes this assertion regarding undue influence.
Peter sought appointment of an independent practitioner as administrator for the purpose of preserving the estate assets until the determination of the probate proceeding and s 15 proceeding, pointing to the following supporting circumstances:
(a) following the unsuccessful mediation, both the probate proceeding and the s 15 proceeding remain on foot;
(b) it appears unlikely that the probate proceeding will resolve in the immediate future;
(c) Ms Day’s estate assets are currently unadministered, which exposes the estate to risk, including costs and loss of income related to the Mornington property;
(d) Peter makes serious allegations regarding Michael’s conduct as Ms Day’s attorney prior to her death and his continuing conduct since her death in relation to the family trust; and
(e) none of Peter, Suzanne nor Andrina are able to communicate or cooperate with Michael regarding the administration of Ms Day’s estate.
Michael opposed Peter’s application to appoint a limited administrator, pointing to the following circumstances:
(a) the Mornington property is the main asset of the estate and Michael has no intention of disposing of or encumbering the property; and
(b) the Mornington property, as the main estate asset, is only capable of funding an independent administrator through being sold, which would prejudice:
(iii) Michael, who lives at the Mornington property and is unemployed with limited financial resources, and also his family; and
(iv) Ms Day, whose testamentary intention in her most recent three wills was to specifically bequeath the Mornington property to Michael.
Michael says that he and his family have nowhere else to live. He also says that all four siblings have equal entitlements to the family trust funds.
Consideration
On the evidence before me, and within the scope of the current application, I cannot determine the truth or falsity of the allegations against Michael. However, I am satisfied that they reflect suspicions sincerely held by Peter and that they merit inquiry. I do not reach this conclusion lightly. They are very serious allegations. But the evidence and circumstances are such as to raise reasonable suspicions that the allegations might be true and are such that they merit inquiry by an independent person into their truth.
Doing the best I can on the available material, and without making any concluded findings, the information I have set out in the following table attempts to identify the known assets of or associated with Ms Day and to assign values to them at different points in time. The information in the ‘July 2017’ column comes from Peter’s grounds of objection in the probate proceeding, and is purportedly reproduced from the statement of assets filed by the Michael in the VCAT proceeding. The ‘2024/2025’ column draws on information from the estate inventory in the probate proceeding and correspondence from Michael’s solicitors in April 2025.
Type and Location of Asset
July 2017
2024 / 2025
Personal Assets
The Mornington property - $1,355,000 Jewellery, ornaments, furniture - $71,200 Mercedez Benz B200 vehicle - (perhaps sold in 2020) ANZ bank accounts ~$12,000 $0.02 APN AREIT investments ~$420,000 $183.39 Bell Direct portfolio account ~$742,000 - L&V Day Super Fund Assets
APN investments ~$392,000 - Bell Direct portfolio account ~$147,000 - ANZ bank account ~$32,000 - The family trust – LH Day Family Trust Assets (trustee: Roday)
Trilogy Funds - ~$965,000* ANZ bank account $11 ~$823,000* Bell Direct portfolio account ~$181,000 - Other Roday Assets
Bank account[14] less than $1 - Bell Direct portfolio account ~$120,000 - [14]The particular banking institution for this account was not identified.
*Neither of these amounts were disclosed in the inventory of assets filed with Michael’s application for probate; they were instead outlined in Michael’s letter of offer dated 22 April 2025.
Peter has pointed out concerns regarding the statement of assets Michael filed in the VCAT proceeding for Ms Day’s assets as at 5 July 2017, as reproduced in Peter’s grounds of objection. He says that it did not include the value of the Mornington property, any chattels, or Ms Day’s Mercedes Benz. He says that Michael incorrectly valued Ms Day’s personal Bell Direct portfolio at around $742,000 while the correct valuation was around $817,000. He also points out that Ms Day’s shares in Roday were not disclosed, and that Michael has not explained why Roday held assets outside the family trust and superannuation fund.
Even noting that the information provided by Michael about Ms Day’s assets as at July 2017 might be deficient, the above table suggests a marked deterioration in Ms Day’s assets by the time Michael applied for probate in June 2024. There also appears to have been an increase in assets held by the family trust, and a question mark over the current state of the superannuation fund.
Michael should be able to address these sorts of questions. For example, he should be able to address whether(and if so why) the estate’s liquified personal assets in the ANZ account and the APN AREIT investments have dropped from around $432,000 to less than $200, and why the Bell Direct portfolio account, which held around $742,000 in mid-2017, was not listed as a current estate asset in June 2024. It seems possible that these funds may have been moved into the family trust. That trust is controlled by Michael through Roday. Michael’s affidavit material does not answer these questions in detail, although the position statement refers to a spreadsheet of transactions, said to have been previously provided, that may do so.
I am making no findings on these matters. Upon further inquiry it may emerge that the information in the table is inaccurate or incomplete. Michael may have an explanation for some or all of the points made above. However, an explanation is not apparent on the current material before me. The differences shown in the table between 2017 and 2024/2025 raise real questions about where money has been moved and whether it has been misappropriated over that period.
Further, it is unclear in the material before me what the current value of the superannuation fund assets are. It appears that the assets of both the superannuation fund and family trust are in Michael’s sole control, leaving Peter and their sisters in the dark.
I also note that Michael seems to have been in possession of the Mornington property without paying rent for an extended period, and this raises the question of whether he owes a debt to the estate for this.
An independent person should conduct the necessary inquiries. Such inquiries may also be capable of being pursued, at least to some extent, in the course of the VCAT proceeding also.
It is possible that, once an independent person has access to all relevant records, it will emerge that the family trust, Michael and/or other entities owe a substantial debt to the estate, or may be holding assets on constructive trust for the estate.
For the purpose of facilitating such inquiries, and while the VCAT proceeding and the probate proceeding are on foot, it is manifestly inappropriate that things remain as they are, with no personal representative of the estate.
Answering the first key question I posed for determination earlier in these reasons, I am satisfied that it is appropriate and indeed necessary to appoint an independent person to administer the estate. The limited administrator may, at her discretion, decide to pursue inquiries into some or all of the issues I have mentioned.
There is a real risk of the estate assets not being preserved by Michael. It would be inappropriate to leave Michael in a position of de facto advantage compared with his siblings as regards estate assets and records. An independent limited administrator will manage and preserve estate assets for the benefit of those who may ultimately be found to be entitled to the assets of the estate, including ascertaining (to the extent they decide appropriate) any debts owed to the estate by Michael, the family trust and any others, or constructive trust claims in favour of the estate. The limited administrator may also decide that she should take steps that appear to her to be practicable and appropriate to pursue any such debts and entitlements, or at least to ensure the ability of the estate to pursue them is not lost through dissipation. For this reason, I am in no doubt that an independent limited administrator must be appointed.
Ms Kallweit has consented to this appointment. She has made two affidavits outlining the terms of her consent.[15]
[15]See the affidavit of Ines Kallweit sworn 18 March 2025 as one of the attachments to exhibit ‘PLD-1’ within the affidavit of Peter Leo Day affirmed 20 March 2025; see also the affidavit of Ines Kallweit sworn 24 April 2025.
In all the circumstances I am satisfied that it is appropriate to appoint Ms Kallweit as independent administrator for the estate pendente lite.
The remaining question is about the terms and limits of the appointment, and in particular whether I should limit Ms Kallweit’s appointment so as to prevent her from selling the Mornington property.
In each of her two affidavits Ms Kallweit’s consent is given on the basis that her fees will be charged on an indemnity basis in accordance with the 2024 Supreme Court Scale, without commission fees.
I am satisfied that Ms Kallweit is to be fully and regularly remunerated for her work: she is entitled to meet her costs of administration from the estate on an indemnity basis. As to the sources of that remuneration, and any other expenses of the administrator:
(a) In her first affidavit, Ms Kallweit’s consent was provided on the understanding that:
… one of the purposes of the grant is to permit the limited administrator to sell the deceased’s property at 11 Ellabella Way, Victoria …
(b) In her later affidavit, Ms Kallweit instead required the grant to be made on the assurance that she is:
… [a]ble to be indemnified for [her] costs of doing so out of the estate or by advances paid by any of the interested beneficiaries (for which they will be reimbursed out of estate funds in due course) when those costs fall due.
In this regard, I note the consent of Ms Day’s daughters, Suzanne and Andrina, to appoint an independent administrator. Suzanne acknowledges that she may need to personally make a financial contribution to the payment of the administrator, in light of the minimal liquidity in the estate. Although Andrina’s consent did not make a similar acknowledgement, I am content that because she notes that she has been provided with all documents in support of Peter’s application, and because she is supportive of the application, that she is aware that a financial contribution from her is a possibility. I also note that it is of course open to Michael to provide such advances to Ms Kallweit.
However, none of the beneficiaries will be under any obligation to make contributions or loan advances to the administrator.
If I limit Ms Kallweit’s ability to sell the Mornington property, leaving her to seek advances from beneficiaries, that leaves considerable uncertainty as to whether and how Ms Kallweit will be remunerated and will be able to meet the other costs of her administration on an ongoing basis.
The conundrum posed by this case is that sale of the Mornington property will defeat any specific bequest of that property to Michael, yet that sale may be required in the near future to enable Ms Kallweit to be remunerated for her administration of the estate due to the lack of sufficient voluntary advances from the beneficiaries. If that happens, I acknowledge that this will render nugatory the specific bequest of the Mornington property to Michael in the last three wills. And if that occurs, in due course it may be necessary for the principles of ademption or abatement to be applied. I express no view on which of those two principles might apply, or what other steps might be necessary. Those issues must await the resolution of the probate proceeding.
Having carefully reflected on the weight to give to the competing considerations, I have decided to give more weight to the consideration of ensuring that Ms Kallweit receives the ongoing remuneration she is entitled to as administrator.
I do not think that expressly authorising her to do so impugns her independence from the underlying dispute between the beneficiaries as to Michael’s application for probate. It does not represent the taking of a side in that dispute; it is simply a necessary consequence of the overriding need for appointment of an independent person to be the personal representative of the estate while the probate proceeding is heard and determined.
I will therefore expressly authorise Ms Kallweit to sell the Mornington property should she decide that this is necessary — for example, if she decides that any voluntary advances from the beneficiaries are insufficient.
If Ms Kallweit forms such a view, she may (if she thinks necessary) seek advice and orders from the Court as to the measures needed to sell the house, such as requiring Michael to provide vacant possession.
Conclusion and orders
I will appoint Ms Kallweit on the basis of her undertakings that she will:
(a) well and truly collect and administer the estate of the deceased according to law;
(b) if required by the Court or by the registrar, make and file or cause to be made and filed in the Court a true and just account of the administration of the estate; and
(c) if required by the Court deliver up the grant to the Court.
The administration will be limited to the period until the s 15 proceeding, the probate proceeding and any equivalent litigation regarding a full grant of probate of administration of the estate (including any appeals) are finally determined, and will be limited to the purposes of:
(a) selling and getting in the proceeds of the Mornington property, if the administrator considers that no other funds for her regular remuneration and for meeting the other costs administration are available; and
(b) otherwise ascertaining and preserving the assets of the estate, including any debts that may be owing to the estate or entitlements it may have under constructive trust claims.
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