Re Giannakis; Giannakis v Cyngler & Anor
[2024] VSC 693
•12 November 2024, first revision 19 December 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S ECI 2022 04553
IN THE MATTER of an application pursuant to Order 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 for directions in relation to the administration of the Estate
- and –
IN THE MATTER of the Will and Estate of NICK GIANNAKIS, deceased
BETWEEN:
| SARA GIANNAKIS (a minor who sues by her litigation guardian SHEENA SALIM GIANNAKIS) | Plaintiff |
| and | |
| JACK CYNGLER and ARTHUR GIANNAKIS (in their capacity as executors and trustees of the will and estate of NICK GIANNAKIS, deceased) | Defendants |
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JUDGE: | GRAY J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 March 2024, last submission 22 April 2024 |
DATE OF JUDGMENT: | 12 November 2024, first revision 19 December 2024 |
CASE MAY BE CITED AS: | Re Giannakis; Giannakis v Cyngler & Anor |
MEDIUM NEUTRAL CITATION: | [2024] VSC 693 |
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PROBATE — Practice and procedure — Proceeding on behalf of minor beneficiary of deceased estate against executors to furnish accounts and deliver up documents relating to estate and a related trust — Proposed compromise submitted by parties — Unpublished reasons for decision of a judicial registrar refusing approval of a compromise and raising issues for response by executors — Executors subsequently agreed to be discharged — Orders made by consent discharging executors — Former executors sought an order that the judicial registrar’s reasons for decision remain unpublished — Former executors also sought orders that an exhibit and affidavits not be available for inspection — Whether publication would not be in the interests of justice — Whether reasons are unfairly prejudicial and publication serves any remaining purpose — Administration and Probate Act 1958 s 34; Supreme Court (General Civil Procedure) Rules 2015 r 28.05(4) — Civil Procedure Act 2010 ss 7–9, 47(1)(a) — Open Courts Act 2013 ss 8A, 16.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T Mah | HQ Law |
| For the Defendants | Mr S Pitt SC | CKL Lawyers |
HIS HONOUR:
A Judicial Registrar provided written reasons to the parties in this proceeding in which she explained her refusal of a proposed compromise involving a minor and raised issues for response by the defendants, including the question of whether the defendants should continue in their office as executors of the deceased’s estate.
Should I order that the reasons remain unpublished and that affidavit material filed by the defendants in response remain confidential?
I have decided that the Judicial Registrar’s reasons should be published, subject to the excision of certain passages, in the form set out in the Annexure to these reasons. The affidavit material, however, will remain confidential.
Introduction
The deceased died on 23 June 2020, leaving his only child, the plaintiff, then aged 11 years old.
The defendants are a solicitor, Mr Cyngler of CKL Lawyers, and the deceased’s brother, Mr Arthur Giannakis.
By his Will made on 7 November 2012, the deceased appointed the defendants as executors and, after some minor gifts to Mr Arthur Giannakis, left his estate to the plaintiff.
On 30 March 2021, the defendants obtained a grant of probate of the Will. The probate inventory sworn by them showed assets of $165,992.61 and included as a liability a debt to ‘Giannakis Pty Ltd ATF Giannakis Family Trust’ of $470,000.
In August 2021, the plaintiff’s surviving parent and litigation guardian in this proceeding, Ms Sheena Salim Giannakis, was sent a ‘notice of demand’ by the defendants, which stated it was ‘for and on behalf of the Giannakis Family Trust’. It stated that the deceased ‘withdrew funds from the Trust by way of loans between the dates of 1 July 1999 and 23 June 2020’ and demanded from the estate a ‘loan balance owing’ as at 30 June 2020 of $307,306. This document is annexed to the Judicial Registrar’s ruling and is reproduced in the Annexure to these reasons.
The demand was accompanied by three documents, also annexed to the Judicial Registrar’s ruling and reproduced in the Annexure:
(a) an ‘interim statement of account and distribution’ dated 23 August 2021, referring to the distribution of $100,000 to Mr Arthur Giannakis as ‘a beneficiary of the Giannakis Family Trust’, referring to $60,482.48 to be retained for ‘accountant’s fee/tax/CKL fees and final distribution’, and showing an ‘estate shortfall’ of $146,823.52;
(b) a release in favour of the defendants and CKL Lawyers to be signed by Ms Sheena Karim (who appears to be Ms Sheena Giannakis) and referring to the provision of $100,000 from the estate to Mr Arthur Giannakis; and
(c) a release in favour of Mr Cyngler and CKL Lawyers to be signed by Mr Arthur Giannakis, also referring to the provision of $100,000 from the estate to Mr Arthur Giannakis.
After an exchange of correspondence in which solicitors for the plaintiff requested verifying material and the defendants responded, on 3 November 2022 the plaintiff issued this proceeding. The plaintiff sought directions that the defendants furnish accounts and deliver up documents that they relied on to substantiate the alleged debt owed by the estate to the trust and the alleged fees, costs and expenses.
After filing of affidavit material and certain other steps, the plaintiff applied ex parte for approval of a compromise, to which the defendants agreed. The proposed compromise provided for the payment of $50,000 to the plaintiff from the estate, inclusive of her costs, subject to the approval of the Court. It also involved releases in favour of the defendants.
Following hearings on 4 July and 12 September 2023, on 6 October 2023 Judicial Registrar Englefield refused the application to approve the compromise.
The Judicial Registrar’s reasons for refusing to approve the compromise are evident from the Annexure, [59]–[62] (under the heading ‘Lack of Merit in the Proposed Compromise’).
In the course of explaining her refusal to authorise in the compromise, especially at [62], the Judicial Registrar referred to three related aspects of her reasons, each of which had some influence on her rejection of the compromise:
(a) firstly, her view that the Court should consider removing the defendants from their office as executors;
(b) secondly, her view that the Court should consider ordering the defendants to pay the costs of the proceeding and possibly also the administration of the estate; and
(c) thirdly, her view that the defendants should not be granted releases from potentially having acted while in a conflict of interest and duty.
These three aspects of the reasons are set out in detail in earlier passages in the reasons as follows:
(a) firstly, [14]–[34] (under the headings, ‘Ought the Executors be Removed?’ and ‘Have the Defendants Failed to Perform Executorial Duties?’);
(b) secondly, [44]–[58] (under the headings ‘Who Should Pay Costs of the Proceeding?’ and ‘Costs of the Probate Application and the Estate Administration prior to Proceeding’); and
(c) thirdly, and specifically on the issue of potential conflicts, [18]–[23] (again, part of the passage under the heading, ‘Ought the Executors be Removed?’).
Also on 6 October 2023, the Judicial Registrar made orders that were consistent with her reasons for decision, including an order that the proceeding be referred to a Judge for consideration of orders:
(a) removing the defendants under s 34 of the Administration and Probate Act 1958;
(b) that the defendants prior to their removal pay from the estate–
(i) the sum of $50,000 into Court for the plaintiff, absolutely; and
(ii) the sum of $115,000, said to be the remaining gross estate, to the administrator appointed to replace them as legal personal representative of the estate;
(c) appointing the litigation guardian or some other suitable person proposed by the litigation guardian as administrator of the estate;
(d) disallowing the defendants’ legal costs of the proceeding and of the administration of the estate, such that they must bear all their legal costs personally and without recourse to the estate;
(e) that the defendants pay the plaintiff’s costs of the proceeding, on a solicitor/own client basis, taxed in default of agreement; and
(f) disallowing the plaintiff’s costs of the proceeding not recovered from the defendants, if any.
The Judicial Registrar made timetabling orders permitting the defendants and the plaintiff to file and serve affidavit material. The affidavit material to be filed on behalf of the defendants was described as material on which they rely to show cause why the abovementioned orders ought not be made.
On 29 November 2023, the Judicial Registrar made further orders, having noted that the plaintiff had changed solicitors.
In November 2023, the defendants filed and served the following three significant affidavits:
(a) affidavit of Mr Arthur Giannakis, sworn 10 November 2023 and filed 20 November 2023;
(b) affidavit of Mr Cyngler, sworn and filed 19 November 2023; and
(c) affidavit of David Stares, accountant, sworn 21 November 2023 and filed 22 November 2023.
In addition, the defendants filed a further affidavit of Mr Cyngler on 19 March 2024. The affidavit appended as exhibit ‘JC1’ a letter to the Court marked ‘Confidential’ and signed by Mr Cyngler and Mr Arthur Giannakis.
On 20 March 2024, I made orders by consent that the defendants be discharged and removed as executors and trustees of the estate of the deceased. I also ordered by consent that the defendants bear the costs of their administration of the estate personally and without recourse to the estate. I appointed an independent person, Jennifer Maher, to be the administrator of the estate. After hearing argument, I further ordered that the defendants personally pay the plaintiff’s costs of and incidental to the proceeding without recourse to the estate.
Oral applications were made on behalf of the defendants that the reasons of the Judicial Registrar remain unpublished and that exhibit ‘JC1’ to the affidavit of Mr Cyngler sworn 19 March 2024 remain confidential. I reserved my decision on these applications. I made an interim order protecting the confidentiality of the three affidavits filed on behalf of the defendants in November 2023.
On 22 April 2024, the Court received submissions of senior counsel on behalf of the defendants in support of the applications. The defendants confirmed that they consented to a determination on the papers.
The defendants advanced seven key contentions in support of the application that the Judicial Registrar’s reasons remain unpublished. Certain of these contentions covered similar or overlapping ground. My distillation of the contentions is as follows:
(1) The reasons had a limited purpose, which has now been achieved.
(2)The orders were not announced in open court and the requirements of open justice do not apply in relation to the reasons supporting those orders.
(3)Akin to (1), the reasons set out preliminary views on the understanding that the reasons would not be published unless and until the defendants had been heard from and the matter ruled upon by a Judge. The defendants responded to the reasons by taking advice and effectively ending the conflict, leaving the ruling in an uncertain or suspended position with no real purpose to be served by publication.
(4)The facts deposed to in the affidavit material submitted by the defendants in response to the reasons has not been (and need never be) the subject of a judicial determination because no purpose would be served by this.
(5)If published, the reasons would be likely to cause prejudice, reputational damage and embarrassment in circumstances where affected persons have not been afforded an opportunity to have the issues heard and determined.
(6)There is nothing in the reasons of ‘precedent value’ that would justify publication.
(7)Finally, akin to (1), (3) and (4) above, while the reasons were effective in case management of the proceeding, owing to their preliminary nature, the interests of justice would not be served by their publication. In other words, the administration of justice no longer requires the finalisation of the matters in the reasons or their publication.
The defendants submitted that I should be guided by the purpose of facilitating the just, efficient, timely and cost-effective resolution of the real issues in dispute.[1] So guided, the defendants submitted that the Court should not allow publication.
[1]Civil Procedure Act 2010 ss 7–9; see also Supreme Court (General Civil Procedure) Rules 2015 rr 1.14(1)(a), 34.01, Supreme Court Act 1986 s 29(2), and Civil Procedure Act 2010 s 47(1)(a).
The gist of contentions (1), (3), (4) and (7) above was that, as there are no longer any issues that require determination, and as the concerns in the reasons were only based on preliminary views, the defendants submitted that it is not necessary for the proper administration of justice for the ruling to be published.
The defendants’ submissions identified various paragraphs of the reasons which were said to be matters that remained as loose ends and which were simply directed to case management matters that would now be unnecessary to run to ground.
In support of the application to keep the affidavits confidential, the defendants pointed out that the three affidavits filed in November respond directly to the issues raised in the reasons and in some places reproduce text from the reasons. In short, they are intertwined with the reasons and should be kept confidential. Contention (4), noted in paragraph 24 above, was also relevant.
As to exhibit ‘JC1’, the defendants submitted that it was provided in confidence with the consent of the plaintiff in an effort to respond as expeditiously as possible to specific concerns raised in relation to the defendants by the Judicial Registrar in her reasons. It was thought that the letter might assist the Court to deal expeditiously with the question of the non-publication of the reasons at the directions hearing that was listed on 20 March 2024. For various other reasons, the defendants submitted that the interests of justice are better served by the letter remaining confidential.
Analysis and consideration
The purposes to be served by the publication of reasons for decisions of judicial officers are not limited to the objectives reflected in the overarching purpose set out in s 7 of the Civil Procedure Act 2010. They are broader and encompass the public interest in the transparency of the administration of justice, and the public interest in promoting an informative or educative effect as to why particular circumstances meet with particular legal outcomes.
In VicForests v Environment East Gippsland Inc,[2] in the course of explaining the importance of the provision of reasons for judgment to the parties concerned, the Court of Appeal referred to an allied public interest:
… a failure by a judge to provide adequate reasons can engender a real sense of grievance on the part of an unsuccessful party who is left in ignorance as to why the decision, adverse to its interest, has been made. Allied to that purpose is the public interest in maintaining public acceptance of judicial decisions and the integrity of the curial process.[3]
[2][2023] VSCA 159, [276].
[3]Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430, 442 (Meagher JA) ; Sun Alliance Insurance Ltd v Massoud [1989] VR 8, 18 (Gray J; Fullagar and Tadgell JJ agreeing at 20).
The authorities cited by the Court of Appeal include Beale v Government Insurance Office of New South Wales.[4] In that case, Meagher JA identified (amongst other purposes) that the publication of reasons:[5]
(a) maintains public acceptance of judicial decisions and the judicial system; and
(b) has an educative effect on judges, lawyers, government and the public, exposing the judge to review and criticism and facilitating consistency in decisions, and influencing the way in which society acts.
[4](1997) 48 NSWLR 430.
[5](1997) 48 NSWLR 430, 441–442.
In Oil Basins Ltd v BHP Billiton Ltd,[6] the Court of Appeal said that, ultimately, the judicial obligation to give reasons is grounded in the notion that justice should not only be done but be seen to be done.[7]
[6](2007) 18 VR 346, 366–7 [56].
[7]See also Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, at 259, 278–79, 281.
In my view these principles necessitate disclosure of much of the reasoning of the Judicial Registrar in refusing the compromise and referring the matter of potential removal of the executors and related issues to a Judge of the Court.
However, it is not necessary or appropriate for all of the details of the Judicial Registrar’s preliminary views or concerns to be published. Specifically, I have decided that it would not be in the interests of justice to publish the following paragraphs and passages of the Judicial Registrar’s reasons:
(a) [11];
(b) [35]–[43], following the heading ‘Should the Proposed Payment to the Plaintiff be paid into Court?’;
(c) [50]; and
(d) [63]–[67], including the heading of that passage.
I note s 8A(1) of the Open Courts Act 2013, which provides:
(1) A court or tribunal does not contravene any rule of law relating to open justice if, instead of handing down or delivering a judgment in a court room or hearing room that is open to the public, the court or tribunal—
(a) gives the parties notice that the judgment is to be handed down or delivered as described in paragraphs (b) and (c); and
(b) sends the judgment to the parties by electronic communication; and
(c) makes the judgment available to—
(i) the public generally; or
(ii) a member of the public on request.
This provision appears to imply that, at least in some circumstances, it is conceivable that a rule of law relating to open justice might be contravened if reasons for judgment are not made publicly available. Section 16 of the Open Courts Act also implies the existence of such duties, at least in some circumstances.
I heard no submissions on this issue and put it to one side. I have not relied on the Open Courts Act in reaching my conclusions.
I will now explain my reasons for the excisions noted in paragraph 35 above from the version of the Judicial Registrar’s reasons to be published in the Annexure to these reasons.
Paragraph 11 of the Judicial Registrar’s reasons set out various preliminary impressions the Judicial Registrar had formed from the material that was available to her at the time. The defendants’ affidavits filed in November 2023 addressed many of these impressions. It is not necessary for me to reach findings on the issues raised by the Judicial Registrar to which the affidavits respond, for the reasons advanced by the defendants. In the absence of a live controversy over those issues, it would be inutile and contrary to the Civil Procedure Act for me to do so. On a preliminary impression basis, I am satisfied that there may be answers to the various points of detail raised by the Judicial Registrar in paragraph 11, or at least to some of them. That suffices to lead me to conclude that it would not be in the interests of justice to publish that paragraph. In essence, I accept that contentions (1), (3), (4) and (7) as distilled in paragraph 25 of my reasons, above, apply to paragraph 11 of the Judicial Registrar’s reasons. I also accept that contentions (5) and (6) apply to paragraph 11: some of the impressions formed by the Judicial Registrar could prejudice the defendants, and there is little or no precedent value or educative content in them.
Paragraphs 35 to 43 of the reasons set out the reasoning of the Judicial Registrar supporting her referral to a Judge on the question of whether the defendants should be ordered to pay $50,000 into Court. When this proceeding came before me on 20 March 2024, the plaintiff (who had new legal representatives) did not seek any such order. Further, the plaintiff’s counsel specifically explained that such an order was not sought as it was not thought appropriate for such a payment to be ordered while the question of indebtedness of the estate to the trust was open and would be the subject of inquiry by the new administrator. I was satisfied that no such order should be made, and refrained from making any such order. In those circumstances, publishing this passage could cause uncertainty, and I consider it contrary to the interests of the administration of justice to publish it.
Paragraph 50 and the heading and passage at paragraphs 63 to 67 of the reasons were directed to peripheral matters. Further, not all persons who may be affected by them appeared before me and some may not even be on notice of the application I am currently considering. In those circumstances, I consider it contrary to the interests of the administration of justice to publish those passages.
Save for the excision of [11], [35]–[43], [50], and [63]–[67] of the Judicial Registrar’s reasons, I am satisfied that the reasons should be published.
As to the defendants’ key contentions (1), (3), (4) and (7) (as distilled in paragraph 24 above), I do not consider that the utility of the reasons was exhausted when the defendants consented to being discharged from their office as executors. I give great weight to the need for open justice and transparency in explaining how the proceeding arrived at the point where the defendants consented to being discharged from their office as executors, following refusal of a proposed compromise and the raising of issues for consideration by a Judge.
As to contention (2), namely the contention that the Judicial Registrar’s orders to that effect were not pronounced in open court, I give no weight to that argument. In my view, the principles of open justice and transparency apply even though the order was made in chambers.
I disagree with contention (6): those aspects of the reasons which I have decided to publish (in the Annexure to these reasons) are in my view important for their potential educative and informative effect. It is, for example, a matter of great importance that legal practitioners and lay persons understand the risks of having dual roles in relation to deceased estates and related pre-existing family trusts, especially in the event that any question of liabilities owed between them may arise. This case illustrates the difficulties that can arise in such situations.
In my view, publication of the Judicial Registrar’s reasons, in the form of the Annexure to these reasons, is necessary and appropriate to promote the principles of open justice and transparency, and to discharge the informative or educative function served by reasons for judgment of judicial officers.
Upon publication of the Annexure, it will not be necessary to go any further in order for those purposes to be adequately served in this case.
I acknowledge that I read and had regard to the three affidavits filed by the defendants in November 2023. However, I am satisfied that I should order that they not be made available for inspection by persons other than the administrator and the parties. Access to their contents is not necessary in order to understand the course this proceeding has taken. The affidavit of Mr Stares, in particular, contains a lot of financial detail that the administrator will no doubt have to consider in performing her role. It is possible that general publication of at least some of this material may prejudice the proper performance of that role and impact the reputations of one or more persons. I am satisfied that it is in the interests of the administration of justice that the affidavits not be made generally available for inspection.[8]
[8]See Lighthouse Corporation Limited & Anor v Republica Democratica de Timor Leste & Anor (No 4) [2023] VSC 363, [108]-[112] (M Osborne J).
I am likewise satisfied that inspection by non-parties of the letter constituting exhibit ‘JC1’ should not be permitted, in the interests of the administration of justice. I gave no weight to that document in deciding these applications, and it has had no impact on the course of the proceeding. Further, its contents might be prejudicial to the reputations of one or more people.
Pursuant to the Supreme Court (General Civil Procedure) Rules 2015, r 28.05(4), I will make orders for the continued confidentiality of the three affidavits filed by the defendants in November 2023 and of exhibit ‘JC1’ to Mr Cyngler’s affidavit of 19 March 2024.
Publication of these reasons for judgment was delayed for 28 days, and they were revised in minor respects following a communication from the defendants.
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ANNEXURE
The next 25 pages are the Annexure referred to in the reasons for judgment of Gray J on 12 November 2024 revised 19 December 2024.
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