Re Kelly; Kelly v Denney - [2021] VSC 580

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST

S ECI 2018 01593

IN THE MATTER of ord 54 of the Supreme Court (General Civil Procedure) Rules 2015

and

IN THE MATTER of the will and estate of JOSEPH BERNARD KELLY, deceased

PATRICK ANTHONY KELLY and BRENDAN JOHN KELLY (sued in their capacity as executors of the will and estate of JOSEPH BERNARD KELLY, deceased)	Plaintiffs
v
MARIA ANNE DENNEY and CATHERINE MARY SKUDDER	Defendants

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	27–30 October, 23 November 2020
DATE OF JUDGMENT:	17 September 2021
CASE MAY BE CITED AS:	Re Kelly; Kelly and Anor v Denney and Anor
MEDIUM NEUTRAL CITATION:	[2021] VSC 580

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WILLS AND ESTATES – Judicial advice – Request for approval of sale of estate assets including to executors – Where persons under legal disability yet to receive settlement entitlements – Claim by executors for costs of administration and this proceeding on a trustee basis – Failure to provide adequate accounting in respect of estate – Judicial advice withheld.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Ms C Sparke QC	Pearce Webster Dugdales
For the Defendants	Mr M McKenzie	Wisewould Mahony

HER HONOUR:

Introduction

The plaintiffs are the executors of the estate of Joseph Bernard Kelly (‘Bernie’) who died on 23 July 2008, leaving a will dated 31 March 2008 (‘Bernie’s will’).

By originating motion filed on 1 October 2018, pursuant to ord 54 of the Supreme Court (General Civil Procedure) Rules 2015, the plaintiffs seek a variety of directions in relation to Bernie’s estate, the details of which can only be understood from the multitude of facts and issues that emerged in more detail at trial.

While the proceeding was commenced only in relation to Bernie’s estate, it is also necessary to deal with the administration of the estate of Bernie’s wife, Anne Margaret Kelly (‘Anne’) who died on 8 March 2008 leaving a will dated 30 January 2002 (‘Anne’s will’).

During their lifetime, Anne and Bernie lived in Warrnambool and owned and operated a dairy farm in western Victoria.

They were survived by their ten children: Brendan John Kelly (‘Brendan’), Patrick Anthony Kelly (‘Patrick’), Elizabeth Marie Murphy (‘Elizabeth’), Catherine Mary Scudder (‘Catherine’), Maria Anne Denney (‘Maria’), Paul Gerard Kelly (‘Paul’), Jacinta Christine Berlingeri (‘Jacinta’), Clare Maree Cockayne (‘Clare’), Bernadette Therese Kelly (‘Bernadette’) and Matthew Kelly (‘Matthew’). They were also survived by Bernadette’s child, Michael Bernard Kelly (‘Michael’). Both Matthew and Michael suffer from a legal disability.

Maria and Catherine are the defendants in the proceeding.

On 16 March 2009, probate of Bernie’s will was granted to Brendan, Patrick and Neville Peter Smith (‘Mr Smith’), a solicitor who was also a friend of Bernie.

On 22 April 2009, probate of Anne’s will was granted to Brendan and Patrick.

Initially, Tait Leishman Taylor Lawyers in Warrnambool were engaged to assist with the administration of Anne’s estate. Bill Bradley (‘Mr Bradley’) of Bradley Lawyers in…

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: [2021] VSC 580
Decision Date: 17 September 2021

CaseChat Overview and Summary

In Re Kelly; Kelly v Denney, the court was asked to provide judicial advice regarding the sale of assets belonging to the estate of the deceased. The executors of the estate sought approval to sell various assets, including to themselves, while individuals under legal disability who were yet to receive their settlement entitlements contested the sale. The executors also sought costs of administration and of the proceedings on a trustee basis, arguing that they had not received adequate accounting from the parties contesting the sale. The court was tasked with determining whether to grant the executors' requests, considering the nature of the assets, the rights of those under legal disability, and the adequacy of the accounting provided.

The central legal issue before the court was whether the executors were entitled to sell estate assets to themselves and others, and whether they were entitled to costs on a trustee basis given the lack of adequate accounting. The court also had to consider the rights of the individuals under legal disability who had not yet received their settlement entitlements, and whether their interests were being adequately protected. The court had to balance the interests of all parties involved, ensuring that the executors' actions were in the best interests of the estate and that the rights of those under legal disability were not being prejudiced.

The court held that it would not provide the requested judicial advice due to the executors' failure to provide adequate accounting of the estate. The court found that the executors had not demonstrated that the sale of assets was in the best interests of the estate, particularly given the unresolved claims of those under legal disability. The court was also concerned about the executors' request for costs on a trustee basis, as this would effectively allow them to profit from their own actions without proper oversight. The court concluded that withholding judicial advice was necessary to protect the interests of the estate and the individuals under legal disability.

The court did not grant the executors' requests for approval of the sale of estate assets or for costs on a trustee basis. The court's decision emphasised the importance of adequate accounting and the need to protect the interests of all parties involved in an estate. The court's refusal to provide judicial advice in this case highlights the importance of executors acting in the best interests of the estate and ensuring that all parties' rights are adequately protected.

Orders