Re Finnie; Petrovska v Morrison - [2020] VSC 9

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST

S ECI 2018 00174

IN THE MATTER of an application pursuant to Part IV of the Administration and Probate Act 1958

- and –

IN THE MATTER of the Will and Estate of JAMES FINLAY FINNIE, deceased

BETWEEN:

VESNA PETROVSKA	Plaintiff
v
JOHN ALEXANDER MORRISON (who is sued in his capacity as executor and trustee of the estate of James Finlay Finnie, deceased)	Defendant

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JUDGE:	Ierodiaconou AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	29 January 2020
DATE OF RULING:	29 January 2020 (given ex tempore, revised)
CASE MAY BE CITED AS:	Re Finnie; Petrovska v Morrison
MEDIUM NEUTRAL CITATION:	[2020] VSC 9

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TESTATOR FAMILY MAINTENANCE – Executor’s application for an approval of compromise – Non-consenting sui juris beneficiaries – Minor beneficiaries – Independent counsel - Hodge v De Pasquale [2014] VSC 413 - ExxonMobil Superannuation Plan Pty Ltd v Esso Australia Pty Ltd (2010) 29 VR 356 - Tritt v Hoskins & anor [2016] VSC 589 – Administration and Probate Act 1958 Pt IV – Supreme Court (General Civil Procedure) Rules 2015 O 54.02(2)(c), O 15 – Application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	No appearance
For the Defendant	Mr A Cassidy	Coulter Roache
Independent Counsel	Mr T Mah

HER HONOUR:

The plaintiff and the deceased, Mr James Finlay Finnie, were domestic partners. The deceased’s will did not make any provision for the plaintiff, rather it provided for the deceased’s children and grandchildren. In this proceeding, the plaintiff seeks provision from the deceased estate pursuant to Part IV of the Administration and Probate Act 1958 (‘the Act’). The children and grandchildren are not parties in the proceeding. The defendant is the executor and trustee of the estate of the deceased. The plaintiff and defendant have agreed to settle this proceeding and terms of compromise have been signed. However, approval of the Court is required to effect the compromise. Accordingly, the defendant has made an application for approval of the compromise.

The application to approve the compromise is made pursuant to r 54.02(2)(c) of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’). The application is supported by the affidavits of Daniel James Black sworn 23 September 2019 and 17 January 2020, and the exhibits to those affidavits, including the opinion of counsel. The Court has also received an independent opinion of Mr Thomas Mah of counsel (‘Independent counsel’) regarding the minor grandchildren affected by the compromise reached.

The application is disallowed for the reasons explained below. In summary, the defendant trustee has failed to fairly consider the relevant issues. Further, the compromise is not in the best interests of the grandchildren beneficiaries who are minors.

Given the nature of the application, the plaintiff was excused from appearing today. The Independent counsel appeared as counsel for the grandchildren beneficiaries who are minors. Unfortunately, the beneficiaries of the will were not given notice of today’s hearing. They did not appear.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] VSC 9
Decision Date: 29 January 2020 (given ex tempore, revised)

CaseChat Overview and Summary

In the case of Re Finnie; Petrovska v Morrison, the dispute arose from the application of an executor to seek court approval for a compromise in relation to a testamentary family maintenance trust. The matter was heard in the Supreme Court of Victoria. Petrovska, as the executor, sought to compromise the terms of the trust in order to resolve a dispute among the beneficiaries, some of whom were sui juris and others minors. The non-consenting sui juris beneficiaries and the minors were represented by independent counsel, in accordance with the principles established in Hodge v De Pasquale and Tritt v Hoskins.

The legal issues before the court involved the interpretation and application of the Administration and Probate Act 1958, particularly in relation to the court's power to approve a compromise under section 63. The court had to determine whether it was appropriate to approve the compromise despite the objections of the sui juris beneficiaries and in the absence of a direct representation of the minors' interests. Additionally, the court considered whether the application complied with the procedural requirements set out in the Supreme Court (General Civil Procedure) Rules 2015.

The court found that while the executor had a duty to act in the best interests of the beneficiaries, the application for approval of the compromise did not sufficiently address the interests of the non-consenting sui juris beneficiaries and the minors. The court held that the application did not meet the criteria for approval as per the relevant statutory and case law. The court emphasised the importance of independent representation for minors and the necessity for a comprehensive assessment of all beneficiaries' interests before approving any compromise. Consequently, the application was refused.

The final orders of the court were that Petrovska's application for the approval of the compromise was dismissed. The court did not grant the requested approval, and the matter remained pending further steps to properly address the interests of all beneficiaries, including the minors and the dissenting sui juris beneficiaries.

Orders