Re Fletcher
[2023] VSC 170
•4 April 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S PRB 2022 03287
IN THE MATTER of the will and estate of GREGORY GORDON FLETCHER, deceased
-and-
IN THE MATTER of an application pursuant to s 22(1) of the Administration and Probate Act 1958
APPLICATION BY:
| LORNA FLETCHER (in her own capacity and in her capacity as the sole beneficiary of the Estate of IAN FLETCHER deceased) (by her litigation guardians Jennene Fletcher and Suzanne Burmeister) | Plaintiff |
| v | |
| MITCH KARAFILI and VINCENT TRALCI | Non-parties |
---
JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 4 April 2023 |
CASE MAY BE CITED AS: | Re Fletcher |
MEDIUM NEUTRAL CITATION: | [2023] VSC 170 |
---
COSTS – Application for limited grant - Where plaintiffs in contested informal will application refused to agree to limited grant pendente lite – Where refusal misconceived and contrary to clearly established principles.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms A S Bartfeld | Carbone Lawyers |
| For the non-parties | Merhi Lawyers |
HER HONOUR:
Introduction
Gregory Gordon Fletcher (‘the deceased’) died on 9 August 2021. He was survived by his parents, Lorna Fletcher and Ian Fletcher, who are the beneficiaries of the deceased’s estate on intestacy.
At the date of his death, the deceased was the registered proprietor of a property in Eltham and the sole proprietor of a business trading as ‘To Your Health’ that sells chemical free products.
By originating motion filed 29 November 2021 Mr Mitch Karafili and Mr Vincent Tralci sought a grant of probate of the deceased’s will dated 6 August 2021 (‘the will’). The will appoints Mr Karafili and Mr Tralci as his executors and leaves the residue of the estate to Mr Tralci, Sally Catherine Juhasz, Harry Tournas and the deceased’s siblings, Jennene Fletcher and Suzanne Burmeister.[1]
[1]Proceeding S PRB 2021 20876.
On 9 December 2021, the Probate Office forwarded requisitions to Mr Karafili and Mr Tralci requiring evidence to establish that the deceased had testamentary capacity when executing the will and evidence of the due execution of the will.
On 21 December 2021 Lorna Fletcher and Ian Fletcher, by their litigation guardians, Jennene Fletcher and Suzanne Burmeister, filed their grounds of objection to a grant of probate of the will claiming that the deceased lacked testamentary capacity, Mr Karafili and Mr Tralci unduly influenced the deceased, and suspicious circumstances surrounding the execution of the will.
As a result of the then solicitors for Mr Karafili and Mr Tralci, MCK Legal, filing the affidavits of Lucinda Smarrelli affirmed 8 March 2022 and Mirka Carmelli of MCK Legal affirmed 24 March 2022, it was established that the will was not signed in conformity with s 7 of the Wills Act 1997.
On 26 April 2022 the parties held the first of a number of unsuccessful mediations in relation to the contested will proceeding. Prior to the first mediation Jennene Fletcher and Suzanne Burmeister filed an originating motion on 24 February 2022 seeking a limited grant of letters of administration ad colligendum bona, in their capacity as litigation guardians for their parents. The discussions at the first mediation included the need for a limited grant of letters of administration to deal with the deceased’s real estate and business interests pending the outcome of the contested informal will proceeding. An in-principle consent was reached regarding the appointment of a limited administrator. Jennene Fletcher and Suzanne Burmeister, with the consent of Mr Karafili and Mr Tralci, sought to appoint Ms Natalie Talia, of Hicks Oakley Chessell Williams, as the limited administrator of the estate on behalf of the deceased.
Despite proposed consent orders being forwarded to the Court in late April 2022, the Court required further affidavits and answers to further queries in relation to the orders to be made in the limited grant application.
On 27 May 2022 Ian Fletcher died intestate. Ian Fletcher held no assets at the date of his death, save for his chose in action in the will proceeding, if successful. In the event that the will is invalid, Lorna is entitled to the deceased’s estate upon intestacy in her own right and as the sole beneficiary of the estate of Ian Fletcher. Subsequently orders were made that the title to the proceeding be amended, then for 27 May 2022, to reflect that the estate of Ian Fletcher is represented by Lorna Fletcher, in her capacity as the sole beneficiary of the estate of Ian Fletcher, by her litigation guardians, Jennene Fletcher and Suzanne Burmeister.
Significant disputes occurred between the parties as to the powers of the proposed limited administrator. On 28 October 2022, the Court adjourned the proceeding so that Jennene Fletcher, Suzanne Burmeister, Mr Karafili and Mr Tralci could provide a joint report setting out whether the parties had reached agreement in relation to the orders sought in the proceeding.
By email dated 3 November 2022, Jennene Fletcher, Suzanne Burmeister, Mr Karafili and Mr Tralci confirmed that the application for a limited grant should be amended from an ad colligendum bona grant to a pendente lite grant. They were not in agreement regarding the terms of the appointment or form of the proposed orders, and the Court directed the filing of short submissions outlining their respective positions.
Jennene Fletcher, Suzanne Burmeister, Mr Karafili and Mr Tralci subsequently agreed on the form of the orders, save for one paragraph. Jennene Fletcher and Suzanne Burmeister had concerns in regard to the deceased’s allegedly missing collection of rare collectible die-cast motor vehicles and sought an order for the limited administrator:
… doing all things necessary to recover and secure the contents of the Eltham property and otherwise protect, maintain and preserve those items including but not limited to insuring and securely storing such items.
Mr Karafili and Mr Tralci sought the removal of the word ‘recover’ on the basis that it was inappropriate for the limited administrator to have the power to recover items that were specifically bequeathed to an individual in the deceased’s will. It was also their position that as Mr Tralci was named the sole beneficiary of the die-cast motor vehicle collection in the will, he would not consent to grant further powers to the limited administrator other than the powers contained in the signed orders dated 28 April 2022 and the additional power to deal with household items.
By email dated 16 November 2022 the Court informed Jennene Fletcher, Suzanne Burmeister, Mr Karafili and Mr Tralci that the position taken by Mr Karafili and Mr Tralci was misconceived because the object of the limited grant pendente lite was to ensure that the estate was managed and preserved for the benefit of those eventually found to be entitled to it. Those persons would not be determined until the contested informal will application was finalised. In the meantime, the independent administrator was the only person who could undertake the administration of the estate of the deceased.
On 1 March 2023 letters of administration pendente lite of the estate of the deceased were granted to Ms Talia.
Costs submissions
By orders made on 1 March 2023 the plaintiff was required to file costs submissions by 10 March 2023, including the quantum of costs claimed. In the plaintiff’s submissions, save for the preliminary costs of the application in the proceeding, the plaintiff seeks orders that Mr Karafili and Mr Tralci personally pay the plaintiff’s costs, assessed on an indemnity basis, from late April 2022 until the date of appointment of the limited administrator on 1 March 2023.
By email dated 17 March 2023 the Court informed Mr Karafili and Mr Tralci of the costs orders sought by the plaintiff. As Mr Karafili and Mr Tralci were not formally parties in the proceeding, for the purposes of considering the costs, orders would be made that they be added as non-parties to the proceeding and, if they wished to file submissions as to the costs of the proceeding, the submissions were to be filed no later than 24 March 2023.
In written submissions filed 24 March 2023 Mr Karafili and Mr Tralci submit that any alleged delay incurred by the plaintiff in advancing the limited grant application was not caused by them and they should not be liable for such costs personally, nor should any costs that may be ordered be assessed on an indemnity basis. They also submit that the limited grant application was substantially resolved by consent with orders forwarded to the Court on 28 April 2022. Further, they submit that such costs as have been incurred should either be costs in the administration of the estate of the deceased or otherwise reserved to the trial judge who determines the contested informal will application.
Applicable principles
Costs are in the Court’s discretion, unless otherwise provided by an act or the Rules.[2] The ‘usual order as to costs’ is that a successful party in litigation is entitled to an award of costs in its favour and the unsuccessful party bears liability for the costs of the unsuccessful litigation; that is, costs follow the event.[3] The Court’s discretion must be exercised through the prism of modern civil procedure reforms, which stress the quick, cheap and efficient resolution of the real issues in dispute.[4]
[2]Supreme Court Act 1986 (Vic) s 24(1).
[3]Oshlack v Richmond River Council (1998) 193 CLR 72, 97 [67] (McHugh J).
[4]Civil Procedure Act 2010 (Vic) s 7(1); GE Dal Pont, Law of Costs (LexisNexis Australia, 4th ed, 2018) 159 [6.15].
Costs assessed on the standard basis are all costs reasonably incurred and of reasonable amount.[5] Costs assessed on an indemnity basis are all costs except insofar as they are of an unreasonable amount or have been unreasonably incurred.[6]
[5] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.30.
[6] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.30.1.
The prima facie position in respect of costs in litigation is for standard costs to be ordered by the Court. A special costs order will only be made where the proceeding exhibits a special or unusual feature or special circumstances.[7] Each proceeding must be considered on its own facts and, specifically, whether those facts support the making of a special order for costs. In Ugly Tribe Co Pty Ltd v Sikola, Harper J identified the types of circumstances that warranted a special costs order, noting that the categories of circumstances are not closed:
[7]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 230 (Sheppard J), quoting Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, 400–1 (Woodward J).
(a) the making of an allegation, known to be false, that the opposite party is guilty of fraud;
(b) making of an irrelevant allegation of fraud;
(c) conduct which causes loss of time to the court and to other parties;
(d) the commencement or continuation of proceedings for an ulterior motive;
(e) conduct which amounts to a contempt of court;
(f) the commencement or continuation of proceedings in wilful disregard of known facts or clearly established law; and
(g) the failure until after the commencement of the trial, and without explanation, to discover documents, the timely discovery of which would have considerably shortened and very possibly avoided, the trial.[8]
[8]Ugly TribeCo Pty Ltd v Sikola (‘Ugly Tribe’) [2001] VSC 189 (14 June 2001) [7]–[8] (Harper J) (citations omitted). See also Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225, Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399 (14 September 2012). Costs: Sunland Waterfront (BVI) Ltd & Anor v Prudentia Investments Pty Ltd & Ors [2013] VSCA 237 (6 September 2013) [538]–[551].
Consideration
Where a proceeding concerns the validity of a deceased’s will, the Court may grant administration of an estate pendente lite so that an estate may be administered pending the decision in a contested proceeding.[9] A pendente lite administrator must be an independent person and the only person to undertake the administration of the estate of the deceased. The beneficiaries of an estate will not be known until the contested will proceeding is determined. The position taken by Mr Karafili and Mr Tralci would favour Mr Tralci in circumstances where there has not been a determination of the validity of the informal will.
[9]Administration and Probate Act 1958, s 22. See also G E Dal Pont Law of Executors and Administrators 6.35- 6.38. In the Goods of Graves (1828) 1 Hagg Ecc 313; 162 ER 597.
The disputed issues were a fundamental bar to the making of the limited grant pendente lite and caused delay from the end of April 2022 until the grant was made. It is not the case, as claimed by Mr Karafili and Mr Tralci, that the application was substantially resolved on 28 April 2022. The position taken by Mr Karafili and Mr Tralci substantially delayed the appointment of an administrator pendente lite. In adopting the position that Mr Tralci was named the sole beneficiary of the deceased’s die-cast motor vehicle collection, and that they would not consent to grant further powers to the limited administrator other than the powers contained in the signed orders dated 28 April 2022 and the additional power to deal with household items, they were in wilful disregard of known facts and clearly established law.
The submissions of Mr Karafili and Mr Tralci that costs should either be costs in the administration of the estate of the deceased or otherwise reserved to the trial judge hearing the contested informal will application are rejected. The application for the limited grant pendente lite is a discrete issue and the costs should be determined in the proceeding where the decision maker is aware of all the facts and circumstances, unlike the trial judge in the contested probate proceeding who will be determining completely different issues.
The position taken by Mr Karafili and Mr Tralci was incorrect and should not have been made. Their position falls within the categories of circumstances that warrant an order that they pay the plaintiff’s costs on an indemnity basis from late April 2022 until the date of the appointment of the limited administrator pendente lite on 1 March 2023. Mr Karafili and Mr Tralci should pay personally their own costs of the application.
The Court orders:
(a) The costs of the plaintiff up to 28 April 2022 be paid, on the standard basis, out of the estate of the deceased;
(b) Mr Karafili and Mr Tralci personally pay the plaintiff’s costs of and incidental to the proceeding, on an indemnity basis, to be taxed in default of agreement, from 28 April 2022 to the date of the appointment of the limited administrator pendente lite on 1 March 2023;
(c) Mr Karafili and Mr Tralci bear their own costs of and incidental to the proceeding personally; and
(d) otherwise the proceeding be dismissed.
0
4
0