Re Nanut; Nanut v Nanut

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S PRB 2022 02319

IN THE MATTER of the estate of RADOVAN BASIL NANUT (deceased)

ELIZABETH MARGUERITE DOWLING NANUT	Plaintiff
v
MARGUERITE MARY NANUT	Defendant

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JUDGE:	Richards J
WHERE HELD:	Melbourne
DATE OF HEARING:	12–14 February 2024
DATE OF JUDGMENT:	6 May 2024
CASE MAY BE CITED AS:	Re Nanut; Nanut v Nanut
MEDIUM NEUTRAL CITATION:	[2024] VSC 212

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WILLS, PROBATE AND ADMINISTRATION — Application for grant of probate — Where probate already granted to defendant as one of four named executors — Where plaintiff mistakenly believed she was a proving executor — Whether plaintiff should be passed over — Probate granted — Re Munro [2018] VSC 747 — O’Halloran v Coffey (No 2) [2023] VSC 51.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Evans KC with Ms RG Morison	Moray & Agnew
For the Defendant	Mr S Wotherspoon with Mr J Acutt	King & Collins

TABLE OF CONTENTS

Legal principles

Grounds of objection

Delay in applying for probate

Residence overseas

Did Lizzie obstruct the sale of St Georges Road?

Was Lizzie uncooperative in the distribution of the Ferraris?

Did Lizzie delay in communication about Rado’s personal items?

Has Lizzie failed to review or comment on the draft accounts?

Has Lizzie misconducted herself in relation to the estate?

Is administration of the estate almost complete?

Is Lizzie a suitable person to act as co-executor?

Disposition

HER HONOUR:

Radovan Basil Nanut (Rado) died on 29 November 2004 at the age of 64, leaving a will dated 3 April 2003 and a substantial estate. Rado was survived by his wife, Marguerite Mary Nanut (Maggie) and their three children, Pia Elizabeth Dowling Nanut (Pia), James Rado Dowling Nanut (James) and Elizabeth Marguerite Dowling Nanut (Lizzie).[1] At the time of Rado’s death, Pia was aged 30, James was aged 28, and Lizzie was just 21 years old.
[1]For clarity and convenience, I refer in this judgment to Rado Nanut and members of his family by their given or preferred names. No disrespect is intended.

In his will, Rado appointed Maggie, Pia, James, and Lizzie as his executors and trustees. The will provided for the following dispositions:

(a) All Rado’s shares in the ‘Thycon Companies and any other companies’ were bequeathed to Pia and James in equal shares; and

(b) The residuary estate was to be divided into 100 parts and held on trust as to both capital and income as to:

(i) 50 parts to Maggie;

(ii) 12.5 parts each to Pia and James; and

(iii) 25 parts to Lizzie upon reaching the age of 30 years.

In addition to Rado’s estate, a company called Jampia Pty Ltd held assets including a property at Cape Schanck, as trustee for the Nanut Family Trust.

In February 2005, Maggie applied for a grant of probate of the will. The inventory filed with her application valued the estate at over $26 million. The main asset of the estate was the family home at 17 St Georges Road, Toorak, which had been registered in Rado’s name and was then valued at $20 million. The other assets listed in the inventory included a 1964 Ferrari 275 and a 2001 Ferrari 550.

On 4 March 2005, probate of the will was granted to Maggie, with leave reserved to Pia, James, and Lizzie to come in and prove the will. While Maggie was the only executor who applied for and was granted probate, for many years each of Maggie, Pia, James, and Lizzie believed that all four of them were proving executors, and they acted on that basis.

Some initial steps were taken to administer Rado’s estate, as follows:

(a) Before 30 June 2005, Rado’s shares in the Thycon companies were transferred to Pia and James.

(b) In 2006, Maggie, Pia, James, and Lizzie became the registered proprietors of St Georges Road, in their capacities as Rado’s legal personal representatives.

(c) In January 2007, Maggie, Pia, James, and Lizzie took out a $3,000,000 line of credit with the ANZ bank secured by a mortgage over St Georges Road. The account was named ‘Pia James Marguerite Elizabeth Nanut in their capacity as executors of the Will of R Nanut’, with payments from the account requiring the authorisation of all four account holders.

However, it was Maggie’s wish to remain living at St Georges Road, which the family had first moved into in 1988. It is a unique two acre heritage property in Toorak with a heritage listed home, Blair House, and a second house on the same title. From 1988 onwards, Rado and Maggie renovated the houses, and Maggie lavished attention on the extensive gardens, which she described as her ‘pride and joy’. For about 15 years, Pia, James, and Lizzie were content for Maggie to continue to live at St Georges Road, and no steps were taken to sell it. Pia also lived at St Georges Road, and from time to time James lived in the second house on the property.

Lizzie moved to the United States in 2003, and has mainly lived there since then. She did not live at St Georges Road at any time after Rado’s death, although Maggie kept a bedroom for Lizzie and she stayed there when she visited Melbourne. By January 2020, no distribution had been made from the estate to Lizzie, although she had been entitled to one quarter of the residuary estate since turning 30 in 2012.

By 2019, family harmony had deteriorated, with Pia and James in dispute about the business. In September 2019, Pia commenced an oppression proceeding against James in this Court in relation to the Thycon companies.

In 2020, the disharmony spread to Rado’s estate.

(a) In January 2020, James advised Maggie, Pia, and Lizzie that he had engaged a lawyer with the intention of executing Rado’s will, liquidating the estate’s assets — including selling St Georges Road — and distributing the estate to the beneficiaries.

(b) Maggie was devastated at this prospect and engaged lawyers of her own. On 19 May 2020, she commenced a proceeding under Pt IV of the Administration and Probate Act 1958 (Vic), seeking a right to remain living in St Georges Road (TFM proceeding).

(c) By August 2020, Lizzie had joined with James in asking that the estate be administered and distributed to the beneficiaries as soon as reasonably practicable. They wrote to Pia and Maggie asking them to agree to immediately commence administering the estate, including preparing clear estate accounts for the previous 15 years, selling St Georges Road, realising the other assets of the estate, and discharging its liabilities.

(d) On 2 December 2020, James commenced a proceeding in this Court seeking the removal of the four named executors and the appointment of an independent administrator of Rado’s estate (removal proceeding).

(e) Soon after the commencement of the removal proceeding, it was discovered that probate had never been granted to Pia, James, or Lizzie, and that Maggie was in fact the sole executor of the estate.

While Pia and James resolved the oppression proceeding in June 2021, and Maggie’s TFM proceeding was dismissed by consent in October 2021, the family were unable to reach agreement about the administration of the estate. On 24 December 2021, Lizzie’s solicitors advised Maggie’s solicitors that Lizzie intended to come in and prove the will, and would take the steps necessary to do so in the new year. Later that day, Maggie lodged a caveat against the making of a grant of probate to Lizzie.

On 14 February 2022, Lizzie commenced this proceeding, applying to the Court for a grant of probate pursuant to the leave reserved in the original grant. The proceeding was defended by Maggie, who contended that Lizzie should be passed over as an executor. The removal proceeding is in abeyance pending the determination of this proceeding.

After the commencement of this proceeding, Maggie made arrangements to sell St Georges Road. On 17 August 2022, she signed a conditional contract for the sale of St Georges Road for $74.5 million. The sale was conditional on obtaining the Court’s approval of the sale, which was the subject of an application for judicial advice. On 26 August 2022, McMillan J made orders approving the sale of St Georges Road. The sale settled on 19 December 2022, and shortly afterwards Maggie made an interim distribution of the proceeds of the sale to the four beneficiaries.

I heard the trial of the proceeding over three days commencing on 12 February 2024. Between the commencement of this proceeding and the conclusion of the trial, the parties had between them spent more than $800,000 on legal costs in this proceeding alone.

For the reasons that follow, I will make an order granting probate to Lizzie.

Legal principles

The principles that govern the exercise of a court of probate’s power to pass over a named executor have been comprehensively examined in two recent decisions of this Court, Re Munro[2] and O’Halloran v Coffey (No 2)[3] (O’Halloran No 2). The following summary is drawn from those two authorities:
[2][2018] VSC 747 (Re Munro).
[3][2023] VSC 51, [52]–[72], citations in original (O’Halloran No 2). Leave to appeal this decision was refused in Coffey v O’Halloran [2024] VSCA 52.

(a) The power to pass over a named executor is to be exercised ‘having regard to the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate’.[4]
[4]Re Munro, [36], citing Re Estate of Crane (2005) 93 SASR 198, [24] (Re Crane), In the Goods of William Loveday [1900] P 154, 156; O’Halloran No 2, [53].

(b) The Court will not readily pass over a named executor and, in general, a person named as an executor is entitled to a grant of probate.[5]
[5]Re Munro, [38], citing Re Crane, [24]; O’Halloran No 2, [54].

(c) While a possible conflict of interest does not of itself justify passing over a named executor,[6] a named executor may be passed over because of a conflict of duty and interest of a kind likely to affect the efficient and satisfactory administration of the estate.[7]
[6]Re Munro, [37], citing Uniting Church in Australia Property Trust (NSW) v Millane [2002] NSWSC 1070 (United Church in Australia Property Trust (NSW) v Millane), Re Crane, [30].
[7]Re Munro, [46]–[48], citing Monty Financial Services Pty Ltd v Delmo [1996] 1 VR 65, 82–3, Fysh v Coote [2000] VSCA 150, [20].

(d) Circumstances in which the courts have passed over an executor or revoked a grant of probate include where:

(iv) the executor was of bad character;[8]
[8]Re Munro, [38], citing Re S [1968] P 302, Re Crane, [25]; O’Halloran No 2, [54].

(v) the executor had neglected their duties,[9] or refused to take a grant;[10]
[9]Re Munro, [38], citing Re Potticary [1927] P 202, Re Crane, [25]; O’Halloran No 2, [54].
[10]Re Munro, [38], citing Re Biggs [1966] P 118, Re Crane, [25]; O’Halloran No 2, [54].

(vi) the executor was absent abroad,[11] or had disappeared;[12]
[11]Re Munro, [38], citing Re William Taylor [1892] P 90, Re Crane, [25]; O’Halloran No 2, [54].
[12]Re Munro, [38], citing Re Sawtell (1862) 2 Sw & Tr 448, Re Crane, [25]; O’Halloran No 2, [54].

(vii) the executor was suffering from ill health,[13] or was of unsound mind;[14]
[13]Re Munro, [38], citing Re Galbraith [1951] P 422, Re Crane, [25]; O’Halloran No 2, [54].
[14]Re Munro, [38], citing Re Atherton [1892] P 104, Re Crane, [25]; O’Halloran No 2, [54].

(viii) the executor was not competent to take probate;[15] and
[15]Re Munro, [38], citing Re Stewart (1875) LR 3 P & D 244, Re Crane, [25]; O’Halloran No 2, [54].

(ix)the relationship between named executors had deteriorated into dysfunction and acrimony, to the point where there was no realistic expectation that they would be able to work together in the best interests of the estate.[16]

(e) The grounds on which a named executor may be passed over are not limited to these examples.[17]

[16]O’Halloran No 2, [55]–[56], citing Re Arklie (No 2) [2019] VSC 350, [12], [25] (Re Arklie No 2).

[17]O’Halloran No 2, [55], citing Re Arklie No 2, [12].

While the decided cases provide considerable guidance, each case turns on its own facts. The overriding consideration in each case is the due and proper administration of the estate and the interests of the beneficiaries.

Grounds of objection

In further amended grounds of objection filed on 20 February 2023,[18] Maggie identified the following grounds on which she objected to Lizzie’s application for a grant of probate:[19]
[18]Maggie’s original grounds of objection were filed on 25 March 2022, and her amended grounds of objection were filed on 21 September 2022.
[19]Further amended grounds of objection dated 20 February 2023, [19].

(a) There has been a ‘substantial delay’ of 17 years in Lizzie applying for probate.

(b) Lizzie has lived out of the jurisdiction in the United States continuously since Rado’s death, and does not make regular visits to Australia. According to Maggie, if Lizzie were appointed as executor:

(x) there would be delays in communication and practical difficulties between them as co-executors, to the detriment of the due and proper administration of the estate; and

(xi)Lizzie would be beyond the immediate supervision of the Court.

(c) Maggie claimed that Lizzie is not a suitable person to act as co-executor, due to events that have occurred since the first grant of probate, and so her appointment would be adverse to the due and proper administration of the estate.

(d) Rado could not have been expected to know that the relationship between Maggie and Lizzie would break down when he appointed his executors, and so Maggie said that the importance of his choice of executor was tempered by the need to ensure the due and proper administration of the estate.

(e) Maggie contended that her continued administration of the estate would inevitably be disrupted if Lizzie is appointed as an additional executor, due to their broken relationship, physical distance, and lack of direct communication between them.

(f) Appointing two executors who are separately represented would inevitably result in increased costs to the estate.

(g) James opposed Lizzie’s appointment as executor, as demonstrated by the removal proceeding in which he sought the removal of Lizzie as an executor.

(h) If both Maggie and Lizzie were to be executors, the unworkable relationship between them would inevitably result in a further removal application being brought by either or both of them, resulting in further costs and delays in administering the estate.

(i) Since the administration of the estate is almost complete, it would be inappropriate to grant probate to a second executor, particularly in a hostile environment.

In addition, Maggie alleged that Lizzie:

(a) had been obstructive in the sale of St Georges Road;[20]
[20]Grounds of objection, [18A].

(b) was uncooperative in the distribution of the two Ferraris;[21]
[21]Grounds of objection, [18B].

(c) had delayed in communication about distribution of Rado’s personal items;[22]

(d) had failed to review or comment on draft accounts for the estate, despite repeated requests to do so;[23]

(e) had misconducted herself in relation to the estate, including in her conduct of this proceeding.[24]

[22]Grounds of objection, [18C].

[23]Grounds of objection, [18D].

[24]Grounds of objection, [18H].

Additional contention raised at trial

In her opening submissions at trial, Maggie sought to advance an additional contention, based on a claimed agreement between the four beneficiaries of the estate not to administer the will in accordance with its terms, including not preparing estate accounts. She argued that, as a party to this agreement, Lizzie had acquiesced in estate funds being paid out without reference to the terms of the will and without any accounting being undertaken, and could not now complain about Maggie’s administration of the estate.[25] Maggie sought to argue further that, having eschewed the terms of Rado’s will, Lizzie should not now be permitted to rely selectively on the clause appointing her as an executor.
[25]Relying on the following statement in J W Harris, Variation of Trusts (Sweet & Maxwell, 1975) 2–3: ‘But, since no beneficiary can complain of a breach of trust to which he has expressly consented, they can collectively authorise the trustees to administer the trusts in a way not permitted by the trust instrument’.

Lizzie objected to this additional contention being raised for the first time at trial, without notice, and without having been particularised in Maggie’s grounds of objection. While Lizzie raised this point immediately after Maggie’s opening submissions, Maggie did not apply to amend her grounds of objection to include the additional contention, or seek leave to rely on an additional ground of objection.

Instead, in closing submissions, Maggie submitted that the grounds of objection did not control or limit the issues for determination, and that the correct approach was to consider all of the evidence before the Court. She characterised the grounds of objection as having a gatekeeping function of ensuring that there is a case to be tried, and did not accept that they defined the issues for trial in the same way as a pleading. Maggie submitted that she was free to advance a case outside her grounds of objection, so long as that case was contained in her affidavit material and did not take Lizzie by surprise.

In support of that proposition, Maggie relied on two decisions of the Court of Appeal, Gardiner v Hughes (2017) 54 VR 394 (Gardiner No 1) and Gardiner v Hughes (No 2) [2019] VSCA 198 (Gardiner No 2). Both decisions involved the same proceeding, in which the applicants challenged the validity of wills left by the deceased and sought revocation of a grant of probate.

Gardiner No 1 was an appeal from a decision on a separate question, that the applicants lacked standing. The primary judge had determined that the applicants were unable to establish a prima facie case for an interest in the deceased’s estate, and so did not have standing to seek to revoke the grant of probate or to challenge the validity of the wills. The appeal was allowed. The Court of Appeal held that the applicants had standing because their rights would or might be affected if the grant of probate were to be revoked, and that it was not necessary to establish a prima facie case. In relation to that procedure, the Court of Appeal observed:[26]

Probate courts have often required a party challenging a grant of probate to show a prima facie case at an early stage of proceedings, in recognition of the significant implications of upsetting a grant. However, such a requirement does not apply automatically and the stage, if any, in a proceeding dealing with an application for revocation at which the applicant may be required to establish a prima facie case for revocation, or a real prospect of success, is governed by rules of court and such directions as the court may make consistent with the [Civil Procedure Act].

[26]Gardiner v Hughes (2017) 54 VR 394, [93] (McLeish JA, Tate and Kyrou JJA agreeing) (citations omitted).

Subsequently, the applicants filed their grounds of revocation with particulars. The primary judge dismissed their summons for revocation of probate on the basis that their particularised grounds of testamentary incapacity did not establish a prima facie case. Gardiner No 2 was the applicants’ appeal from that decision. In allowing the appeal, the Court of Appeal found that the primary judge had erred in assessing the particulars as though they were evidence at trial. The Court of Appeal held that application of the prima facie test did not require a determination whether or not the particulars, in isolation or taken together, justified an inference of testamentary incapacity.[27] Rather, the question was whether the allegations, assuming them to be true, called for further investigation of the deceased’s testamentary capacity.[28] The Court of Appeal concluded that the particulars, taken together, did call for investigation, and that the matter should proceed to trial.[29] The Court of Appeal further observed:[30]

It may prove at the trial of the present matter that the proper inference is that the matters relied on, even taken together, do not warrant drawing the inference that Mr Gardiner lacked testamentary capacity. However, a trial would proceed on evidence, rather than particulars, and the nature of the case for revocation may itself change as a result of pre-trial steps. All that needs to, and can, be decided at this point is that the applicants have shown a prima facie case for trial. To this extent, the applicants have also established their first proposed ground of appeal.

[27]Gardiner v Hughes [2019] VSCA 198, [79] (Gardiner No 2).

[28]Gardiner No 2, [80].

[29]Gardiner No 2, [96].

[30]Gardiner No 2, [98].

None of this supported the argument that Maggie’s case at trial was not confined by her grounds of objection. There was recognition in Gardiner No 2 that the case for revocation might ‘change as a result of pre-trial steps’,[31] which would include possible amendment of the particularised grounds of testamentary incapacity. Otherwise, the issues for trial were defined by the particulars that demonstrated a prima facie case.
[31]Gardiner No 2, [98].

In any event, the subject matter of the Gardiner litigation was different from this case, as was the applicable procedure. Here, there was no requirement for either party to establish a prima facie case.

Maggie filed a caveat on 24 December 2021, in anticipation of Lizzie’s application for a grant of probate. The grounds of objection were filed on 25 March 2022, in compliance with r 8.06 of the Supreme Court (Administration and Probate) Rules 2014 (Vic) (Probate Rules).[32] With the leave of the Court, Maggie amended her grounds of objection on 21 September 2022, and again on 20 February 2023. Rule 8.06(4) of the Probate Rules precludes Maggie from relying on any other ground of objection, unless the Court otherwise orders. However, no such order was sought, and no basis to make one was demonstrated.[33]
[32]On 1 March 2024, these rules were revoked and replaced by the Supreme Court (Administration and Probate) Rules 2023 (Vic). Rule 8.06 was remade in substantially the same form, but with an additional requirement, in r 8.06(3.1), for the caveator to give particulars of any fact or matter raised in the grounds of objection.
[33]Transcript, 14 February 2024, 254:1–9.

For those reasons I will not consider further Maggie’s additional contention based on an alleged agreement between the four beneficiaries. It is possible that the contention will be advanced in future litigation in relation to Rado’s estate, in which case the alleged agreement will have to be properly particularised before trial.

I turn now to the grounds of objection of which notice was given in accordance with the Probate Rules. I consider the contentions raised by the grounds of objection in the following order:

(a) Lizzie’s delay in applying for probate;

(b) Lizzie’s residence overseas;

(c) whether Lizzie obstructed the sale of St Georges Road;

(d) whether Lizzie was uncooperative in the distribution of the Ferraris;

(e) whether Lizzie delayed in communication about distribution of Rado’s personal items;

(f) whether Lizzie failed to review or comment on the draft accounts;

(g) whether Lizzie misconducted herself in relation to the estate;

(h) whether the administration of the estate is almost complete; and

(i) whether Lizzie is a suitable person to act as co-executor.

Much of the evidence was not in dispute. In their joint trial plan, the parties agreed many of the relevant facts, and a large volume of documents were tendered by consent.[34] However, as will become apparent, Lizzie and Maggie have very different points of view about many matters concerning Rado’s estate.
[34]Joint trial plan dated 14 February 2023.

Delay in applying for probate

Lizzie applied for probate of Rado’s will more than 17 years after his death. On any view, this is a long delay that requires explanation.

Lizzie’s explanation for the delay was that, until December 2020, she believed that she was a proving executor.[35] Maggie confirmed that, regardless of the legal technicalities, she, James, Pia, and Lizzie believed they were all executors.[36] This shared belief is consistent with the fact that in 2006, Maggie, Pia, James, and Lizzie became the registered proprietors of St Georges Road in their capacities as Rado’s legal personal representatives.[37] It is also consistent with the fact that they established the line of credit secured by St Georges Road on the basis that all four of them had to authorise withdrawals and sign bank documents related to the loan.[38]
[35]Affidavit of Elizabeth Marguerite Dowling Nanut dated 15 June 2022 (Second Lizzie affidavit), [17].
[36]Affidavit of Marguerite Mary Nanut dated 9 November 2022 (First Maggie affidavit), [19]; Joint trial plan, Part A, Agreed facts [8].
[37]First Maggie affidavit, [18]; Joint trial plan, Part A, Agreed facts, [9].
[38]First Maggie affidavit, [19]–[20]; Joint trial plan, Part A, Agreed facts, [12].

On 9 December 2020, Maggie’s solicitors advised the other beneficiaries, by letter, that they had reviewed the estate’s probate file and discovered that only Maggie had applied for and been granted probate.[39] Lizzie’s evidence was that, until she received that letter, she believed that she was a proving executor of the will. She explained that she did not immediately seek to obtain probate because by then the TFM proceeding was pending, and she believed that the estate could not be administered until that proceeding had been finalised.[40] She explained further that she did not immediately apply for probate after the TFM proceeding was dismissed in October 2021 because she believed that Maggie would promptly take steps to administer the estate, including selling St Georges Road.[41] That did not occur, and the property had not been sold when Lizzie filed her application on 14 February 2022.
[39]Joint trial plan, Part A, Agreed facts, [16]–[17].
[40]Second Lizzie affidavit, [18].
[41]Second Lizzie affidavit, [19].

In cross-examination, it was put to Lizzie that the TFM proceeding was no impediment to her applying for probate and the estate being administered. She responded that she was not aware of that, and reiterated that she was waiting for the TFM proceeding to be finished because she thought the estate would be administered then. She agreed that steps could have been taken towards administering the estate while the TFM proceeding was pending, such as preparing accounts, and distributing the Ferraris and Rado’s personal effects.

I accept Lizzie’s explanation for her delay in applying for probate, which was not challenged or contradicted at trial. For 16 years, Lizzie believed — along with the other three named executors — that they had all been granted probate. On learning that was not the case, she reasonably waited for Maggie’s TFM proceeding to be finalised, which occurred in October 2021. Several months later, when no steps had been taken to sell the estate’s principal asset, she commenced this application.

Residence overseas

Lizzie has lived in the United States since before Rado’s death, and intends to continue living there. Her residence overseas created no practical difficulty during the 16 years that she wrongly believed she had been granted probate, and there was no evidence of communication delays during that time.[42]
[42]Second Lizzie affidavit, [34].

Lizzie did not agree that her physical distance from Victoria would disrupt the administration of the estate, and said that she is able to communicate by phone, email, and Zoom. She acknowledged that recent communication between her and Maggie had been conducted through solicitors, but said that was because there was litigation on foot between them. She said that she can provide instructions and respond to correspondence quickly, despite not being in Melbourne.[43]
[43]Second Lizzie affidavit, [35]–[36].

In her first affidavit filed in this proceeding, Lizzie undertook to the Court that she would:[44]

(a) well and truly collect and administer the Estate 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.

[44]Affidavit of Elizabeth Marguerite Dowling Nanut dated 10 February 2022 (First Lizzie affidavit), [22].

She confirmed these undertakings in her second affidavit, and said that she would return to Victoria to complete the administration if necessary.[45]
[45]Second Lizzie affidavit, [37].

Historically, a named executor has been passed over due to absence abroad.[46] This is less likely to be a decisive consideration where modern means of communication are available, as they are in this case. I do not consider that Lizzie’s residence overseas would be an impediment to the due and proper administration of the estate; any past communication difficulties have not been due to physical distance. I accept that she could return to Victoria if and when her presence is required.
[46]Re Munro, [38] and the authorities cited there; O’Halloran No 2, [54].

In the course of the trial, Maggie raised a concern about the effect of s 30(1) of the Trustee Act 1958 (Vic), which provides that a trustee who is absent from Victoria may delegate to any person the execution or exercise of any trusts, powers or discretions exercised in them as trustee. Maggie said the risk that Lizzie might appoint someone else to act in her place as executor was ‘profound’ in the context of the Nanut family and its dynamics.[47]
[47]Transcript, 14 February 2024, 91:8–22.

This concern was resolved by an undertaking given by Lizzie through her senior counsel that, if she was appointed as executor, she would not seek to delegate her functions as an executor to any other person. Maggie’s counsel indicated that she was content with the undertaking.[48]
[48]Transcript, 14 February 2024, 301:14–302:2.

In light of this undertaking, and the undertakings previously given by Lizzie to the Court, I am not troubled by her residence outside the jurisdiction.

Did Lizzie obstruct the sale of St Georges Road?

Agreed facts and documents

On 9 November 2021, following the dismissal of the TFM proceeding, Lizzie’s solicitors wrote to the solicitors for Maggie, James, and Pia. The letter stated that it was in all parties’ interests that the estate be administered, commencing with the sale of St Georges Road without further delay. The letter proposed a sale process, and sought the other parties’ agreement to that process ‘so that the administration of the Estate can proceed in a prompt and orderly way’.[49]
[49]Letter from Arnold Bloch Leibler to King & Collins, Holding Redlich, and Madgwicks, 9 November 2021, 3.

On or about 7 December 2021, Maggie through her solicitors engaged Scott Keck of Charter Keck Cramer to act as transaction adviser in relation to the sale of St Georges Road.[50] At around the same time, Maggie invited two real estate agents to provide written proposals to sell the property.[51] Lizzie agreed to these steps.[52]
[50]Letter from King & Collins to Charter Keck Cramer, 6 December 2021; Email from Charter Keck Cramer to King & Collins and Marguerite Nanut, 9 December 2021.
[51]Letter from King & Collins to Arnold Bloch Leibler, Madgwicks, and Holding Redlich, 9 December 2021.
[52]Letter from Arnold Bloch Leibler to King & Collins, 16 December 2021.

On 20 December 2021, Maggie’s solicitors wrote to the solicitors for Lizzie, James, and Pia enclosing sale proposals from Marshall White and Kay & Burton, and sought the beneficiaries’ views on their preferred agent and the reserve price they would agree to. The letter also set out a number of repairs to be completed before St Georges Road was marketed for sale, including resolving an ongoing dispute with a neighbour about a shared wall.[53]
[53]Letter from King & Collins to Arnold Bloch Leibler, Madgwicks, and Holding Redlich, 20 December 2021.

On 24 December 2021, Lizzie’s solicitors responded by email that Lizzie supported the appointment of Mr Keck and the choice of the agents who had provided proposals to sell the property, but remained concerned about the conduct of the administration of the estate. The email conveyed that, in the circumstances, Lizzie intended in the new year to take the necessary steps to come in herself and prove the will.[54] On the same day, Maggie lodged her caveat on the estate.[55]
[54]Email from Arnold Bloch Leibler to King & Collins, 24 December 2021; Joint trial plan, Part A, Agreed facts, [29].
[55]Joint trial plan, Part A, Agreed facts, [29].

On 4 February 2022, Maggie’s solicitors sent a letter seeking, among other things, Lizzie’s response to the request for her views about the real estate agents and the reserve price.[56]
[56]Letter from King & Collins to Arnold Bloch Leibler, 4 February 2022.

On 14 February 2022, Lizzie filed her application for probate of the will, and her solicitors served the initiating documents by email to Maggie’s solicitors. The covering email sought Maggie’s confirmation that she would not put St Georges Road on the market pending Lizzie’s and James’ agreement to the process, and conveyed Lizzie’s position that Maggie ought not take any further steps to realise estate assets until Lizzie’s application was completed.[57]
[57]Email from Arnold Bloch Leibler to King & Collins, 14 February 2022.

In an email dated 18 February 2022, Maggie’s solicitors reiterated that they were waiting for a response to their request for Lizzie’s and James’ views on the sale process. The email conveyed Maggie’s willingness to work with Lizzie, James, and Pia to find a sale process acceptable to all beneficiaries, but said that Maggie would not wait indefinitely while they do not respond.[58]
[58]Email from King & Collins to Arnold Bloch Leibler, 18 February 2022.

In a letter dated 10 March 2022, Maggie’s solicitors pointed out that James sought to progress the sale of the property as soon as possible, while Lizzie sought to delay the sale until her application for a grant of probate was resolved. They reiterated their request for Lizzie’s and James’ views about their preferred agent and the reserve price they would agree to.[59]
[59]Letter from King & Collins to Arnold Bloch Leibler, Madgwicks, and Holding Redlich, 10 March 2022.

On 24 March 2022, Maggie’s solicitors wrote to the solicitors for Lizzie, James, and Pia, conveying that Maggie had obtained funding to pay out their interests in the estate based on a valuation of St Georges Road of $70 million.[60]
[60]Joint trial plan, Part A, Agreed facts, [32].

On 8 April 2022, Lizzie filed a summons seeking summary dismissal of Maggie’s caveat and grounds of objection, and on 9 May 2022, Lizzie filed a further summons seeking expedition of her summary dismissal application. The application for expedition was dismissed with costs on 17 June 2022,[61] and the summary dismissal application was dismissed with costs on 29 August 2022.[62]
[61]Joint trial plan, Part A, Agreed facts, [34]–[35], [37]; Order of Associate Justice Matthews in Re Nanut (Supreme Court of Victoria, S PRB 2022 02319, 17 June 2022).
[62]Joint trial plan, Part A, Agreed facts, [41]; Order of Associate Justice Matthews in Re Nanut (Supreme Court of Victoria, S PRB 2022 02319, 29 August 2022).

On 16 June 2022, Lizzie’s solicitors wrote to Maggie’s solicitors conveying that Lizzie wished to progress the administration of the estate and to minimise any delay in the resolution of outstanding matters, including the sale of St Georges Road. The letter further stated that Lizzie had applied for a grant of probate ‘with the sole aim of furthering the administration of the estate in an open and transparent manner’.[63]
[63]Letter from Arnold Bloch Leibler to King & Collins, 16 June 2022, 1.

In a letter dated 24 June 2022, Maggie’s solicitors advised the solicitors for Lizzie and James that Maggie had, on the advice of Mr Keck, engaged Marcus Chiminello of Marshall White to conduct the sale of St Georges Road. The letter noted that Lizzie and James had not responded to questions about their preferred agent and the reserve price they would agree to, made in letters dated 20 December 2021, 4 February 2022, 18 February 2022 and 10 March 2022.[64]
[64]Letter from King & Collins to Arnold Bloch Leibler, 24 June 2022.

Lizzie’s solicitors responded by email on 28 June 2022, conveying Lizzie’s position that it was not appropriate for Maggie to take steps to sell St Georges Road unilaterally where there was a live question as to who should administer the estate. The email stated Lizzie’s view that an efficient, transparent and fair sale of the property could not occur while Maggie alone was executor, and her support for James’ position that the sale should not proceed as planned by Maggie.[65] The email advised that Lizzie shared James’ concerns that the middle of winter was not an appropriate time to sell the property, that the necessary repairs had not been completed, and that the expression of interest period was shorter than recommended by Mr Keck.[66]
[65]Email from Arnold Bloch Leibler to King & Collins, 28 June 2022.
[66]James had also communicated these concerns: Letter from Mazzeo Lawyers to King & Collins, Arnold Bloch Leibler, and Holding Redlich dated 27 June 2022.

Maggie’s solicitors responded in a long letter dated 4 July 2022 that traversed many matters. Relevantly, the letter enclosed written advice from Mr Keck addressing the queries about the wisdom of a winter sale campaign and its length, and advised that the repairs to the house were complete with the wall repair progressing with a difficult neighbour. It went on to outline key dates in the sales campaign, proposed a weekly video meeting with Mr Keck and Mr Chiminello, and enclosed requested marketing information.[67]
[67]Letter from King & Collins to Arnold Bloch Leibler and Mazzeo Lawyers, 4 July 2022.

On 11 July 2022, Lizzie’s solicitors wrote a long letter to Maggie’s solicitors, which also traversed many matters. In relation to the sale process, the letter conveyed the views of two property experts to the effect that the timing and duration of the proposed sale campaign was not appropriate, and not likely to achieve the maximum sale price. The letter stated: ‘It is clear that the parties have just one opportunity to sell the Property and there is no room for missteps’, and expressed concern that Maggie was progressing the sale in a manner that appeared rushed and lacked transparency. The letter conveyed an offer for the appointment of an independent administrator to the estate, and requested the immediate suspension of the sale campaign due to commence the following day.[68]
[68]Letter from Arnold Bloch Leibler to King & Collins, 11 July 2022.

A great deal of correspondence between solicitors ensued.[69] Maggie and Pia did not accept Lizzie’s offer of an independent administrator, and the sale campaign proceeded over Lizzie’s and James’ objections, with them reserving all of their rights.
[69]Letter from King & Collins to Arnold Bloch Leibler, 12 July 2022; Email from Arnold Bloch Leibler to King & Collins, 14 July 2022; Letter from Mazzeo Lawyers to King & Collins, 14 July 2022; Letter from Holding Redlich to King & Collins, Mazzeo Lawyers, and Arnold Bloch Leibler, 17 July 2022; Letter from King & Collins to Mazzeo Lawyers, Arnold Bloch Leibler, and Holding Redlich, 18 July 2022; Email from Arnold Bloch Leibler to King & Collins, Mazzeo Lawyers, and Holding Redlich, 19 July 2022; Letter from King & Collins to Arnold Bloch Leibler and Mazzeo Lawyers, 25 July 2022; Email from King & Collins to Charter Keck Cramer, 29 July 2022; Letter from King & Collins to Arnold Bloch Leibler, Mazzeo Lawyers, and Holding Redlich, 1 August 2022.

On 8 August 2022, Maggie received an offer to purchase St Georges Road for $74.5 million.[70] The following day, Lizzie’s solicitors advised that Lizzie would accept that sum and any higher sum offered for the property, while continuing to reserve her rights in respect of the sale process.[71]
[70]Email from King & Collins to Arnold Bloch Leibler, Holding Redlich, and Mazzeo Lawyers, 8 August 2022.
[71]Letter from Arnold Bloch Leibler to King & Collins, 9 August 2022.

Maggie wished to accept the offer, but would only do so with the Court’s approval, or if Lizzie, James, and Pia released her in respect of all claims related to the sale. In a letter dated 10 August 2022, Maggie’s solicitors provided a draft deed of release that Maggie required the other beneficiaries to sign before she signed the contract of sale.[72] For reasons explained in her solicitors’ letter of 16 August 2022, Lizzie declined to sign the release, but was prepared to sign the contract of sale.[73]
[72]Draft Deed of Family Agreement and Release, 10 August 2022.
[73]Letter from Arnold Bloch Leibler to King & Collins, 16 August 2022.

On 17 August 2022, Maggie signed a contract of sale for St Georges Road, conditional upon Maggie obtaining the Court’s approval.[74]
[74]Joint trial plan, Part A, Agreed facts, [38].

The agreed settlement period was the later of 45 days, or 14 days after Maggie gave the purchaser written notice that the title had been rectified to identify Maggie as the sole registered proprietor. If notice of rectification was not given by 16 November 2023, either party would be entitled to terminate the contract.[75]
[75]Contract of sale of land for 17 St Georges Road, Toorak dated 17 August 2022, particulars of sale and special condition 2.

On 22 August 2022, Maggie applied to the Court for judicial advice and approval of the sale.[76] Counsel for Lizzie appeared at the hearing of the application on 26 August 2022, when McMillian J made orders approving the sale of the property and giving Maggie conduct of the sale.[77]
[76]Joint trial plan, Part A, Agreed facts, [39].
[77]Joint trial plan, Part A, Agreed facts, [40].

Settlement of the sale of St Georges Road was completed on 19 December 2022.[78]

Maggie’s point of view

[78]Joint trial plan, Part A, Agreed facts, [44].

Maggie’s account of these events, which took place against a background of litigation and disagreement regarding the estate, was set out in her affidavits of 9 November 2022 and 8 June 2023. The affidavits exhibit and summarise a large number of letters between the solicitors for Maggie, Lizzie, James, and Pia. In addition to the agreed matters set out above, Maggie deposed:

(a) In March 2022, she secured confirmation of a loan sufficient to buy out Lizzie and James’ interests in the estate, on the basis that St Georges Road was valued at $70 million and proposed this course to them. The proposal would have fully paid out Lizzie and James while letting Maggie stay in the home that she had loved for over 30 years. Neither Lizzie nor James replied to this offer.[79]
[79]First Maggie affidavit, [121]–[122].

(b) For a while Maggie was determined to apply to the Court for approval of this proposal, but ultimately did not proceed with the application. She explained that it became clear to her that the issues between them were more than monetary, and ‘James and Lizzie would not stop until I had lost my home’.[80]
[80]First Maggie affidavit, [129].

(c) On 8 June 2022, Maggie informed Mr Keck that she wished to proceed with the sale of St Georges Road. On 22 June 2022, she engaged Mr Chiminello as estate agent to sell the property, and signed Marshall White’s proposed advertising schedule. On 24 June 2022, a buyer inspected St Georges Road, and the upcoming sale was reported in the media.[81]
[81]First Maggie affidavit, [135], [137]–[138].

(d) Instead of being happy that Maggie had put the property up for sale, ‘Lizzie and James, through their lawyers, embarked on a relentless bombardment of correspondence criticising the sale process’ and the decisions Maggie had taken in relation to the sale. They threatened an injunction to stop the sale and threatened damages claims against Maggie. They also disputed that the title to St Georges Road was in error and ‘demanded’ to be signatories to any contract of sale.[82]
[82]First Maggie affidavit, [139].

(e) The advertising campaign began on 11 July 2022, as planned. While Lizzie did not attend the first weekly meeting with Mr Keck and Mr Chiminello on 19 July 2022, she and her advisors attended the remaining meetings on 26 July 2022 and 9 August 2022.[83]
[83]First Maggie affidavit, [147], [152], [154], [158].

(f) The sale process was not rushed or flawed. Rather, the level of marketing exposure showed that the property’s advertising success was unprecedented.[84]
[84]First Maggie affidavit, [159].

(g) Given the continued threats of litigation by James and Lizzie against her regarding the sale process, Maggie considered it prudent to seek Court approval of the sale.[85] Maggie’s solicitors also wrote to the solicitors for Lizzie, James, and Pia on 10 August 2022, stating that Maggie would only accept the offer if they released her in relation to the sale, and committed to cooperating to rectify the title and resolve the land tax issue.[86]
[85]First Maggie affidavit, [159].
[86]First Maggie affidavit, [160]; Letter from King & Collins to Arnold Bloch Leibler, Mazzeo Lawyers, and Holding Redlich, 11 August 2022.

(h) The conditional contract of sale signed by Maggie on 18 August 2022 contained two conditions. The first was that she had to obtain the Court’s approval of the sale, and the second was that she had to rectify the title before settlement.[87]
[87]First Maggie affidavit, [164]. It was an agreed fact that Maggie signed the contract on 17 August 2022, not 18 August 2022: Joint trial plan, Part A, Agreed facts, [38]. Nothing turns on the discrepancy.

(i) At the hearing of the approval application on 26 August 2022, Lizzie’s barrister told the Court that Lizzie did not oppose the application. This was news to Maggie, since Lizzie had opposed her making the application and had threatened to seek costs against her.[88]
[88]First Maggie affidavit, [168].

(j) Maggie and the purchaser agreed to aim for an earlier settlement date of 21 November 2022, and Maggie informed her solicitors accordingly.[89]
[89]First Maggie affidavit, [179].

(k) Lizzie visited St Georges Road on 4 October 2022, and returned on 11 October 2022 to collect her things.[90]

(l) In early October, Maggie’s solicitors corresponded with Lizzie, James, and Pia’s solicitors explaining the steps that would be taken to rectify the title. On 12 October, Maggie’s solicitors wrote again, requesting that they complete the outstanding steps. Further correspondence followed with some urgency between 14 and 17 October 2022. Lizzie signed the documents required to rectify the title on 19 October 2022. James did not do so, which held up the settlement of the sale of St Georges Road.[91]

Lizzie’s point of view

[90]First Maggie affidavit, [180]–[182].

[91]First Maggie affidavit, [176], [184]–[189], [193].

Lizzie’s account of her approach to the sale of St Georges Road was largely set out in her third affidavit affirmed on 28 March 2023.[92] She said that she determined to seek to be appointed as an executor in part because she was concerned about the accounts and the overall administration of the estate, and she thought the best way for it to be done was cooperatively between herself and Maggie.
[92]Affidavit of Elizabeth Marguerite Dowling Nanut dated 28 March 2023 (Third Lizzie affidavit).

By late 2021, when she informed Maggie of her intention to come in and prove the will, Lizzie alone had received nothing from the estate. She formed the view that decisions about the estate were not being made in the best interests of all beneficiaries, and that it was best for her to come in as a second executor so that decisions could be made in everyone’s interests. She therefore thought that she should object to any further steps towards the sale of St Georges Road until she was a co-executor.[93]
[93]Third Lizzie affidavit, [52]–[55].

Lizzie’s response to the matters raised by Maggie above was as follows:

(a) Lizzie denied obstructing the sale process, and said that she had in fact encouraged the sale from August 2020 onwards.[94]
[94]Third Lizzie affidavit, [71](b).

(b) She did not accept Maggie’s proposal to buy out her interest in the estate because her view was that the will should be executed according to Rado’s wishes. In any case, Lizzie said, Maggie had never presented the proposal in a developed form. The proposal glossed over significant issues with the accounts, and would have required the beneficiaries to pay their own legal costs to that point, which Lizzie found unacceptable.[95]
[95]Third Lizzie affidavit, [57].

(c) Lizzie denied engaging, through her lawyers, in a ‘relentless bombardment’ of Maggie or her lawyers about the sale process. Instead, she had raised genuine concerns that were urgent and which she thought were reasonable. Lizzie said that she wanted St Georges Road to be sold as quickly as possible, but also wanted it to be done properly so that the best price was obtained. She understood James had the same view. Given the advice that James had received about the sale campaign, she did not think it was unreasonable to ask for the sale process to be suspended until it was independently reviewed.[96]
[96]Third Lizzie affidavit, [60].

(d) During the sale campaign in July and August 2022, Lizzie said that she had, through her solicitors, expressed concerns and sought information, attended meetings with the agent, and responded to Maggie’s offers. Lizzie did not think it proper for an executor to demand a release as a condition of selling the property. She also considered that the release was too broad, and did not resolve her concerns about the accounts.[97] Her solicitors explained in their letter of 24 August 2022 her reasons for not signing the release.[98]

(e) As to the approval application, Lizzie did not object to the sale of the property itself and so did not object to the orders sought from the Court. She considered that the application was unnecessary, and had made that clear through her lawyers.[99]

(f) Lizzie denied that she had delayed in executing the documents to rectify the title. There were some queries and her lawyers needed time to look at the documents, which was not unreasonable. Lizzie signed the documents despite uncertainty about whether the title rectification would cause a stamp duty issue.[100]

[97]See [141]–[145] below.

[98]Third Lizzie affidavit, [61]–[62].

[99]Third Lizzie affidavit, [63].

[100]Third Lizzie affidavit, [65](b).

In submissions at trial, Lizzie said that, rather than being obstructive, she had been instrumental in pushing the sale process along so that St Georges Road was ultimately sold. Before the dismissal of the TFM proceeding in October 2021, Maggie had refused to contemplate a sale and had taken no steps to sell the property. Lizzie submitted that it was plain from the correspondence that, when she made her application for probate in February 2022, she was seeking a quick grant of probate so as to be able to advance the sale process. As late as April 2022, Maggie put forward a proposal by which the sale process would not occur, based upon a sale price of $70 million. Lizzie said that the correspondence about the sale process showed she had done no more than protect her position, and pointed out that the sale price that was achieved was higher than the valuation on which Maggie’s proposal had been based.

Lizzie acknowledged that Maggie’s affidavit referred to a lot of correspondence between Maggie’s solicitors and James’ solicitors, which did not appear to be relevant to her application. I understood her submission to be that she was not responsible for James’ conduct in relation to the sale of St Georges Road, or any difficulties or delays he may have caused.

Findings

I have reviewed the extensive correspondence between Maggie’s and Lizzie’s solicitors in relation to the sale of St Georges Road. It does not support a conclusion that Lizzie obstructed the sale. To the contrary, from August 2020 she consistently sought the sale of the property, as part of the administration of Rado’s estate. For more than a year, it was Maggie who obstructed the sale, most significantly by commencing the TFM proceeding, in which she sought a right to remain living in St Georges Road.

Maggie took her first steps towards selling the property in December 2021, engaging Mr Keck and obtaining sale proposals from two estate agents. Instead of responding to Maggie’s requests to choose an agent and agree on a reserve price, Lizzie decided to apply to prove the will and become a joint executor with Maggie. I accept that Lizzie genuinely came to the view that this was the best way to make sure that decisions about the estate were made in the interests of all four beneficiaries. I also accept that she thought her application would be decided relatively quickly, within months rather than years. In those circumstances, it was not unreasonable for Lizzie to ask Maggie to wait until the probate application was determined before proceeding to sell St Georges Road.

For a period from March 2022, Maggie chose to explore whether it would be possible for her to retain St Georges Road by buying out Lizzie’s and James’ interest in the estate. The proposal that was outlined in Maggie’s solicitors’ letter of 24 March 2022 was not acceptable to Lizzie, for a number of valid reasons. During this period, Maggie did not take any steps to progress the sale. Lizzie’s decision not to explore Maggie’s proposal was not unreasonable, and did not amount to obstruction of the sale.

By June 2022, Maggie had decided to proceed with the sale of St Georges Road. From that point, things moved quickly. Maggie engaged an agent and took steps to put the property on the market. By the end of June, at least one prospective buyer had viewed the property and news of the impending sale had been reported in the media.

Both Lizzie and James, through their solicitors, raised concerns about the timing and duration of the proposed sale campaign. These were legitimate queries, about which Maggie obtained advice, and to which her solicitors provided a substantive response.

I do not consider that Lizzie’s solicitors engaged in ‘relentless bombardment’ of Maggie’s solicitors in relation to the sale. There was certainly a lot of correspondence between the solicitors for all four members of the family, which reached a crescendo as the property was finally placed on the market. The communications from Lizzie’s solicitors asserted her position in a way that sought to protect her interests; in contrast with James, she did not threaten litigation. In circumstances where Lizzie was actively seeking to become a joint executor and was concerned that the sale was being rushed and would not achieve the best possible price, she proposed that the sale process be suspended while an independent administrator was appointed. Maggie did not accept that proposal and the sale campaign commenced on her instructions on 11 July 2022.

From that point, Lizzie did no more than reserve her rights in relation to the sale process. She attended two of the three weekly meetings with the agent, she promptly agreed to accept the $74.5 million that was offered on 8 August 2022, and she consistently said that she would sign the contract of sale. Her reasons for refusing to sign the deed of release sought by Maggie were, in my view, entirely valid. While Lizzie considered the approval application unnecessary, she did not oppose it. She collected her belongings from the house and signed the documents needed to rectify the title in a timely way.

To some extent, Maggie appears to have conflated James’ and Lizzie’s conduct in relation to the sale of St Georges Road. James was separately represented throughout the sale, and a lot of the correspondence about which Maggie complained came from his solicitors. James was less amenable than Lizzie during the sale process — for example, he did not attend any of the sale meetings, he threatened litigation, and he delayed in signing documents to rectify the title for so long that Maggie applied to the Court for an order compelling him to sign. None of that reflects on Lizzie’s fitness to become an executor.

Was Lizzie uncooperative in the distribution of the Ferraris?

Agreed facts and documents

Rado’s estate included the Ferrari 275 and the Ferrari 550, which were valued in the inventory at $300,000 and $200,000 respectively.[101]
[101]Memorandum of issues to be considered by executors, 17 January 2005.

In her solicitors’ letter of 9 November 2021, Lizzie proposed that the Ferraris be valued and distributed to her within two months of the parties reaching agreement, with the value of the cars to be adjusted against her entitlement to the estate.[102]
[102]Letter from Arnold Bloch Leibler to King & Collins, Holding Redlich, and Madgwicks, 9 November 2021.

On 19 November 2021, Hughes Supercar Services valued the Ferrari 550 at $375,000.[103]
[103]Valuation of the Ferrari 550 from Philip Hughes, Hughes Supercar Services, 19 November 2021; Joint trial plan, Part A, Agreed facts, [28].

On 21 December 2021, Shannons Auctions valued the Ferrari 275 in the range $2,750,000 to $3,000,000.[104]
[104]Valuation of the Ferrari 275 from Shannons Auctions, 21 December 2021; Joint trial plan, Part A, Agreed facts, [28].

On 23 December 2021, Maggie’s solicitors wrote to Lizzie’s solicitors enclosing the two valuations, and advising that:

(a) James had no objection to Lizzie receiving the Ferrari 550, and if Lizzie wished to receive the Ferrari 550 she would need to arrange with James to obtain possession from him and accept it in whatever condition it is in, at the value of $375,000; and

(b) Maggie had determined that Pia would receive the Ferrari 275, and that the value of the Ferrari 275 at $3,000,000, related roadworthy costs, and transfer fee would be charged to Pia in the estate accounts.[105]

[105]Letter from King & Collins to Arnold Bloch Leibler, 23 December 2021; Joint trial plan, Part A, Agreed facts, [28].

In a letter dated 4 February 2022, Maggie’s solicitors requested confirmation whether Lizzie still wanted to take the Ferrari 550.[106] In subsequent letters dated 10 March 2022 and 31 August 2022, they inquired which of James or Lizzie would take the Ferrari 550 as part of their share of the estate.[107]
[106]Letter from King & Collins to Arnold Bloch Leibler, 4 February 2022.
[107]Letter from King & Collins to Arnold Bloch Leibler, Madgwicks, and Holding Redlich, 10 March 2022; Letter from King & Collins to Arnold Bloch Leibler and Mazzeo Lawyers, 31 August 2022.

In a letter dated 7 September 2022, Lizzie’s solicitors responded that it was reasonable for the beneficiaries to have a complete list of the personal property of the estate before expressing any preferences.[108]
[108]Letter from Arnold Bloch Leibler to King & Collins, 7 September 2022.

In a letter dated 27 September 2022, Maggie’s solicitors asked that James and Lizzie advise by 11 October 2022 which of them was taking the Ferrari 550, failing which Maggie would exercise her power of appropriation to distribute the vehicle to James.[109]
[109]Letter from King & Collins to Arnold Bloch Leibler and Mazzeo Lawyers, 27 September 2022.

In a letter dated 26 October 2022, Maggie’s solicitors advised that the Ferrari 550 had been appropriated to James at a value of $375,000.[110]
[110]Letter from King & Collins to Arnold Bloch Leibler and Moray & Agnew, 26 October 2022.

Maggie’s point of view

Maggie said that, after Rado died, Pia drove and was responsible for the maintenance of the Ferrari 275, and James drove and was responsible for the maintenance of the Ferrari 550. When Lizzie was visiting Melbourne she had exclusive use of a Ferrari 308 registered to a Thycon subsidiary, Powerlab Pty Ltd.[111]
[111]First Maggie affidavit, [17].

Maggie was surprised by Lizzie’s request on 9 November 2021 for both the Ferrari 275 and the Ferrari 550. She explained that was because she had always known, even before Rado died, that Pia would get the Ferrari 275, James would get the Ferrari 550, and Lizzie would get the Ferrari 308. Maggie said that Rado had spoken to her about the Ferraris before he died, and had said that he wanted Pia to have the Ferrari 275 because she was the only one who would look after it properly. In Maggie’s view, Lizzie knew that Pia drove the Ferrari 275 and that James drove the Ferrari 550, and they had been driving those cars and maintaining them since Rado died. Maggie added that, when Lizzie was in Australia and had obtained her driver licence (some years after Rado died), she drove the Ferrari 308. James had taken the Ferrari 550 in December 2020.[112]
[112]First Maggie affidavit, [80].

Pia objected to the Ferrari 275 being distributed to Lizzie. Pia’s position, as conveyed by her solicitors in a letter dated 8 December 2021, was that Rado had told her that she would receive the Ferrari 275, James would receive the Ferrari 550, and the Ferrari 308 would be left to Lizzie. Pia sought that the Ferrari 275 be distributed to her.[113]
[113]First Maggie affidavit, [93]d.

Maggie believed that Lizzie’s request for the Ferrari 275 was intended to hurt Pia, and that Lizzie never intended to take the Ferrari 550 from James.[114]
[114]First Maggie affidavit, [128].

The only way the distribution of the Ferrari 275 to Lizzie would have resulted in cash for her is if it had been sold. The Ferrari 275 is of sentimental value to the family, and Pia had been paying for its maintenance and driving it since Rado’s death. In those circumstances, Maggie considered that an appropriation to Pia was justified. Maggie transferred the Ferrari 275 to Pia on 27 January 2022.[115]
[115]Affidavit of Marguerite Mary Nanut dated 8 June 2023, [37] (Second Maggie affidavit).

Lizzie’s point of view

Lizzie accepted that she once drove the Ferrari 308 owned by Powerlab. As far as she was aware, there was no agreement or expectation in the family that the Ferraris were the responsibility of any of the children.[116] Not living in Australia, she did not know that Pia drove the Ferrari 275.[117]
[116]Third Lizzie affidavit, [27].
[117]Transcript, 13 February 2024, 128:16–24.

Lizzie explained that she asked for ownership of the two Ferraris in the estate in November 2021 because there had been no substantial distribution from the estate, there was no sale of St Georges Road imminent, and she needed some financial security.[118] Her intention in asking for the cars was to sell them or to borrow against them in order to have money.[119]
[118]Third Lizzie affidavit, [39].
[119]Transcript, 13 February 2024, 130:19–131:14.

In Lizzie’s view, Maggie’s decision in December 2021 to transfer the Ferrari 275 to Pia was extraordinary. At that time, Lizzie was in a dire financial position. She had received nothing from the estate, while equity in the family business had been distributed to Pia and James in 2006. The estate had no cash to meet its expenses or make distributions to the beneficiaries, and there was no urgency to any transfer of the Ferraris.[120]
[120]Third Lizzie affidavit, [53].

She explained further:[121]

54.… I had little money of my own; Maggie had spent all of her available cash, from the line of credit (largely to support her lifestyle); she intended to spend further funds to complete bathroom renovations I knew nothing about; and none of us children was entitled to be involved in the decision-making. In those circumstances Maggie distributed the Estate’s second most valuable asset (the Ferrari 275) to a beneficiary whose needs were lesser than mine. I felt that it was appropriate that I become a co-executor and be involved in the decisions which moved the Estate forward for everyone, not just Maggie and Pia.
55.Otherwise, in the position I have described, whilst I was in financial need at the time, I felt that decisions were not being made in the best interests of all beneficiaries. I took the view that it was best for me to come in as a second executor, so that decisions could be made in everyone’s interests. I therefore took the view that I ought to object to any further steps towards the sale of the Property, or the transfer of the 550 Ferrari, until I was a co-executor.

[121]Third Lizzie affidavit, [54]–[55]. See also Transcript, 13 February 2024, 131:20–29.

Lizzie did not take the Ferrari 550 when it was offered to her in December 2021 because she had instead decided to seek probate.[122] If she is granted probate, it is her intention to look fairly at the appropriation of the Ferrari 275 to Pia and to recover it if that is possible.[123]
[122]Transcript, 13 February 2024, 131:20–24.
[123]Transcript, 13 February 2024, 133:13–16.

Findings

I accept that the Ferrari 275 has sentimental value for Pia, that both Maggie and Pia believed Rado wished the Ferrari 275 to go to Pia, and that Maggie felt strongly that Pia should own it. However, Maggie and Pia’s understanding of Rado’s wishes about the Ferraris was not reflected in his will, and was not shared by Lizzie.

From Lizzie’s point of view, the Ferraris were valuable assets of the estate that should have been dealt with in accordance with the will. In November 2021, having not received any distribution from the estate, Lizzie put forward a proposal for the administration of Rado’s estate, which involved the sale of St Georges Road, distribution of the Ferraris to her, valuation and distribution of Rado’s personal effects, auditing the estate accounts, and making any necessary adjustments to the beneficiaries’ entitlements.

Lizzie’s intention in asking for the Ferraris was to sell them or borrow against them to raise much needed funds. There is no evidence that she made this request in order to hurt Pia, as Maggie believed.

Maggie did not accept Lizzie’s proposal for the administration of the estate. In relation to the Ferraris, Maggie agreed that Lizzie could take the Ferrari 550, but appropriated the Ferrari 275 to Pia.

It was Maggie’s decision to appropriate the Ferrari 275 to Pia that precipitated Lizzie’s decision to apply for probate. With some justification, Lizzie felt that the decision had not been made in the best interests of all the beneficiaries, and from that time onwards she has pressed her claim to become a co-executor with Maggie.

Viewed in this context, Lizzie’s responses to Maggie’s repeated offers of the Ferrari 550 do not indicate a lack of cooperation or unsuitability to be an executor. Rather, they are an aspect of her disagreement with Maggie about how the estate should be administered. Since December 2021, in the face of Lizzie’s application for probate, Maggie has pressed ahead with the administration of the estate with new-found urgency. Lizzie’s position has been that her application for probate should be determined before the estate is administered, and that distribution of the Ferrari 550 could wait. I consider Lizzie’s position to be a reasonable one.

Did Lizzie delay in communication about Rado’s personal items?

Agreed facts and documents

Rado’s estate included personal effects that were valued in the inventory at $20,000.[124]
[124]Application and Grant for Probate of Will including Inventory of Assets and Liabilities, 28 February 2005.

In her solicitors’ letter of 9 November 2021, Lizzie proposed that Rado’s personal effects should be valued and distributed to the beneficiaries or sold, and where a personal effect is distributed to a beneficiary it should be adjusted against the beneficiary’s entitlement to the estate.[125]
[125]Letter from Arnold Bloch Leibler to King & Collins, Holding Redlich, and Madgwicks, 9 November 2021.

On 10 March 2022, Maggie’s solicitors wrote to the solicitors for Lizzie, James, and Pia enclosing a paginated bundle of photos of Rado’s personal items, and inviting Lizzie, James, and Pia to let them know which items each wished to receive.[126]
[126]Joint trial plan, Part A, Agreed facts, [31]; Letter from King & Collins to Arnold Bloch Leibler, Madgwicks, and Holding Redlich, 10 March 2022.

In letters dated 24 June 2022 and 31 August 2022, Maggie’s solicitors wrote to the solicitors for Lizzie and James, asking them to identify which of Rado’s personal items they wished to receive.[127]
[127]Letter from King & Collins to Arnold Bloch Leibler and Mazzeo Lawyers, 24 June 2022; Letter from King & Collins to Arnold Bloch Leibler and Mazzeo Lawyers, 31 August 2022.

In a letter dated 7 September 2022, Lizzie’s solicitors requested that Maggie complete an itemised inventory of personal property in the estate with current values ascribed.[128] On 9 September 2022, James’ solicitors wrote that Maggie’s list of Rado’s personal items was incomplete, provided a list of some of Rado’s personal items that James instructed had not been included in Maggie’s list, and requested a complete list with values ascribed.[129]
[128]Letter from Arnold Bloch Leibler to King & Collins, 7 September 2022.
[129]Letter from Mazzeo Lawyers to King & Collins, Arnold Bloch Leibler, and Holding Redlich, 9 September 2022.

In a letter dated 27 September 2022, Maggie’s solicitors provided a valuation by Artvisory and a Personal Inventory listing Rado’s personal items with their ascribed value. The total value of the items, excluding the Ferraris, was $15,070. The letter also provided a detailed response to James’ query about personal items that had not been listed. Maggie’s solicitors asked both James and Lizzie to respond to a number of questions by 11 October 2022, including which of Rado’s personal items they wished to receive, and whether they accepted that the Personal Inventory was complete.[130]
[130]Letter from King & Collins to Arnold Bloch Leibler and Mazzeo Lawyers, 27 September 2022.

On 26 October 2022, Maggie appropriated Rado’s personal items as between Lizzie, James, Pia, and herself. Maggie’s solicitors wrote to Lizzie’s and James’ solicitors to inform them of the appropriations, and the personal items appropriated to Lizzie were delivered with the letter to her solicitors.[131]
[131]Joint trial plan, Part A, Agreed facts, [42].

Maggie’s point of view

When Maggie put together the bundle of photographs of Rado’s personal items in March 2022, she believed that they were mainly of sentimental value and not significantly valuable in the overall context of the estate. She wanted each of her children to have items of their father’s that meant something to them.[132]
[132]First Maggie affidavit, [119]b.

On 8 April 2022, Pia’s solicitors sent a letter listing the personal items that Pia wanted. Maggie did not share this letter with Lizzie’s and James’ solicitors, because Lizzie and James had not indicated which items they wanted to receive and she did not want their request for items affected by knowing the items that Pia wanted.[133]
[133]First Maggie affidavit, [128].

Maggie found the claim, made in September 2022, that Lizzie and James could not select which of their father’s personal items they wanted until they knew what the items were worth to be disappointing and distasteful. The items were not particularly valuable in the context of the millions of dollars of the inheritance that Lizzie and James would receive, and she thought they would select items based on their sentimental attachment to them. Nevertheless, she did as they had requested and engaged a valuer to inventory and value Rado’s personal items.[134]
[134]First Maggie affidavit, [173].

Contrary to Lizzie’s understanding, Maggie considers that all of the furniture and effects in St Georges Road were jointly acquired by her and Rado during their marriage and that, on his death, she became the sole owner by survivorship.[135]

Lizzie’s point of view

[135]Second Maggie affidavit, [34].

Lizzie’s evidence was that agreement had not been reached on the distribution of Rado’s personal items because Maggie’s list was incomplete. Lizzie considered that the initial list prepared by Maggie in March 2022 left out any furniture, artwork, a gold Ferrari watch, silverware, Venetian glassware, antiques, and so on.[136]
[136]Third Lizzie affidavit, [56].

Lizzie said that if she is appointed executor, she will seek to make a complete list herself which could then be used to make a distribution of Rado’s personal items — after discussing and hopefully confirming that list with Maggie.[137] She continued to believe that the best way to advance the administration involved her taking on the role of co-executor, the estate procuring an independent analysis of the accounts, and a complete list being made of Rado’s personal effects.[138]
[137]Third Lizzie affidavit, [3].
[138]Third Lizzie affidavit, [57].

Lizzie remains of the view that Maggie identified only a modest number of Rado’s personal possessions, and that there are items that were not listed or appropriated. She understands that James shares this view, and is aware that there has been a lot of correspondence between his solicitors and Maggie’s about that.[139] If Lizzie is appointed as co-executor, the complete identification of Rado’s personal items is an issue that will require her consideration, hopefully in cooperation with Maggie.[140]
[139]Third Lizzie affidavit, [65]–[66].
[140]Third Lizzie affidavit, [71](d).

Findings

There is an unresolved issue between Maggie and Lizzie about whether the furniture, artwork, and other valuables that were in the house St Georges Road belonged to Rado personally, or were jointly owned with Maggie. With this issue unresolved, there was little to be gained by insisting that Lizzie choose items from what she believed to be an incomplete list of her father’s personal effects. Consistent with her approach to other outstanding matters in the estate, Lizzie wishes to resolve this issue once she has been granted probate, and to do so in consultation with Maggie. I do not consider that approach demonstrates that Lizzie is unfit to be an executor.

Has Lizzie failed to review or comment on the draft accounts?

Agreed facts and documents

In their August 2020 letter to Maggie and Pia,[141] Lizzie and James said the steps that should be taken to administer the estate included the preparation of clear estate accounts for the last 15 years, to the extent that this had not already been done.[142]
[141]Referred to at [10](c) above.
[142]Letter from Lizzie and James to Maggie and Pia, August 2020.

On 14 February 2021, Maggie sent an email to Lizzie, James, and Pia, attaching draft accounts prepared by Michael Heath of Allmand Jones & Partners for the estate and the family trust for the financial years 2005 to 2020, and explaining that the accounts were in draft because they need to be agreed by everyone before being finalised.[143]
[143]Joint trial plan, Part A, Agreed facts, [18]; Email from Maggie to Lizzie, James, and Pia, 14 February 2021.

On 24 February 2021, Maggie’s solicitors sent the draft accounts to the solicitors for Lizzie, James, and Pia, and asked that they review the draft accounts and provide any questions.[144]
[144]Joint trial plan, Part A, Agreed facts, [19]; Email from King & Collins to Arnold Bloch Leibler, Madgwicks, and Holding Redlich, 24 February 2021.

On 24 March 2021, Lizzie’s solicitors wrote to Maggie’s solicitors with some comments and requests in relation to the draft accounts, including in relation to entries characterised as ‘Shared Family Costs — General’, ‘Shared Family Costs — St Georges Road’, and various inter-entity loans owing to the estate.[145]
[145] Letter from Arnold Bloch Leibler to King & Collins, 24 March 2021.

On 25 March 2021, Maggie’s solicitors circulated revised draft accounts for the estate and the family trust for the financial years 2005 to 2020 to the solicitors for Lizzie, James, and Pia.[146]
[146]Joint trial plan, Part A, Agreed facts, [20]; Email from King & Collins to Arnold Bloch Leibler, Madgwicks, and Holding Redlich, 25 March 2021.

On 25 May 2021, in the removal proceeding, James served on Maggie a notice to produce the documents she had provided to Mr Heath or were otherwise relied upon by Mr Heath to prepare the revised draft accounts.[147]
[147]Joint trial plan, Part A, Agreed facts, [21].

On 30 May 2021, Maggie’s solicitors provided the solicitors for Lizzie, James, and Pia with further revised accounts for the estate and the family trust for the financial years 2005 to 2020.[148]
[148]Letter from King & Collins to Arnold Bloch Leibler, Madgwicks, and Holding Redlich, 30 May 2021.

In her solicitors’ letter of 9 November 2021,[149] Lizzie proposed that the estate accounts should be audited by an accounting firm nominated by the President of the Chartered Accountants Australia and New Zealand, or such other person as agreed between the parties, including any necessary adjustments to each party’s loan account.[150]
[149]Referred to at [45], [82], and [107] above.
[150]Letter from Arnold Bloch Leibler to King & Collins, Madgwicks, and Holding Redlich, 9 November 2021.

Maggie’s solicitors responded in a letter dated 23 December 2021, stating that the estate would not bear the cost of an audit of the accounts, but that beneficiaries are entitled to inspect the accounts. The letter stated that, if Lizzie wished to audit the estate accounts at her own expense, Maggie would in the new year make arrangements with Mr Heath to make the records available to Lizzie’s chosen accountant.[151]
[151]Letter from King & Collins to Arnold Bloch Leibler, 23 December 2021.

On 24 March 2022, Maggie’s solicitors wrote to the solicitors for Lizzie, James, and Pia, enclosing draft accounts for the estate and the family trust for the financial year ending 30 June 2021 and from 1 July 2021 to 23 March 2022. They sought any questions about the accounts by 7 April 2022.[152]
[152]Letter from King & Collins to Arnold Bloch Leibler, Madgwicks, and Holding Redlich, 24 March 2022.

On 8 August 2022, Maggie’s solicitors wrote to the solicitors for Lizzie, James, and Pia, enclosing financial statements and general ledgers for the estate and the family trust for the financial year ending 30 June 2022 and for the month of July 2022. They sought any questions about the accounts by 15 August 2022.[153]
[153]Letter from King & Collins to Arnold Bloch Leibler, Mazzeo Lawyers, and Holding Redlich, 8 August 2022.

In their letter of 7 September 2022 to Maggie’s solicitors, Lizzie’s solicitors said that Lizzie would review the accounts provided and they would revert as soon as they were in a position to do so.[154]
[154]Letter from Arnold Bloch Leibler to King & Collins, 7 September 2022.

In a letter dated 18 April 2023, Maggie’s solicitors wrote to Lizzie’s solicitors, referring to concerns raised in Lizzie’s third affidavit about the draft accounts.[155] They said:[156]

Ms Nanut seems to believe that if she becomes a co-executor of the Estate she can cause an audit of the Estate administration accounts to occur at the expense of the Estate. That is misconceived. Her demand in December 2021 for an external audit at the expense of the Estate was rejected at that time. As was offered to Ms Nanut in our letter to ABL on 23 December 2021 and copied to Mr Nasimi, if Ms Nanut wishes to audit the Estate accounts, she remains welcome to do so, at her cost.

Lizzie rejected Maggie’s claim that it would not be possible for them to work together as co-executors. She said:[207]

If I am appointed an executor, I will seek to work with both Maggie and James and Pia as the other beneficiaries, without the further engagement of lawyers, if possible. Unlike at present, that will ensure that allowance is made for the views of all beneficiaries, whatever those may be. It will give James and me transparency and, I hope, lay a foundation for the rebuilding of trust among the family. To the extent that I speak with James in our approach to these proceedings, it will create efficiency in the conduct of the proceeding, and I understand that it is appropriate for an executor to consult beneficiaries. If Maggie and I work together as executors, as I intend, then it would hopefully avoid any “lengthy and repeated” correspondence of the kind that has previously occurred.

[207]Third Lizzie affidavit, [5].

Lizzie reiterated her intention to cooperate with Maggie throughout her third affidavit, in cross-examination, and in her submissions at trial.[208]
[208]Third Lizzie affidavit, [24], [52], [70]–[71]; Transcript, 13 February 2024, 136:24–28; Plaintiff’s closing submissions dated 14 February 2024, [85]–[86]; Transcript, 14 February 2024, 297:31–298:16.

Lizzie accepted that her recent communications with her mother have mostly been conducted through solicitors. She said that was because there was litigation on foot, and she understood that it was usual for parties involved in litigation to communicate through solicitors.[209] She submitted that these communications have been, in effect, to seek information regarding the due and proper administration of the estate, in light of issues and queries that have arisen between the beneficiaries.[210]
[209]Second Lizzie affidavit, [35].
[210]Plaintiff’s closing submissions dated 14 February 2024, [85].

As to their personal interactions, Lizzie denied that she had screamed at Maggie during their telephone conversation on 8 February 2021, but accepted that she felt frustrated. She explained that she was in dire financial circumstances, and tried to speak to Maggie about selling the house to allow everyone to get on with their lives. Lizzie said that Maggie was refusing to do anything other than stay in the house, which did cause them to argue. Lizzie felt that Maggie was putting her own interests ahead of the interests of all of the beneficiaries, and was not really trying to resolve things or carry out the will so that they could all benefit.[211]
[211]Third Lizzie affidavit, [41].

Since then, Lizzie said she had been polite to her mother on the occasions she had seen her. She objected to Maggie’s speculation about why she had been polite, and felt that she could achieve a workable relationship with her.[212]
[212]Third Lizzie affidavit, [41].

Lizzie was asked in cross-examination about the occasions on which she had seen her mother in 2022 and 2023. She said she had been in Melbourne for six weeks at the end of 2022, and during that time she went to the house at St Georges Road three times.[213] On the first occasion she went with two friends, and met Maggie and Pia at the door. She continued:[214]

Everything was very polite and cordial and my mother was very excited to see my friends and took them on a tour of the house and it was a couple of hours of friendly - very friendly interaction.

[213]Transcript, 13 February 2024, 155:1–11.

[214]Transcript, 13 February 2024, 155:4–7.

Lizzie was also asked about the chance encounter with her mother and Pia in December 2023 at the Chateau Marmont in Los Angeles. Lizzie was in the bar with one of her friends who had been with her when she visited St Georges Road in late 2022, when they ran into Maggie. She said:[215]

My friend was doing a lot of the talking and saying everybody should be able to work things out, ‘We’re family, family is everything.’ And Maggie said that she was - she felt used and abused by everybody. She said that Pia is the only person that she feels she has left and I said to her that that sounds like hell, really, and not desirable. And she said yes, she agrees, and it is, and I said, ‘Well, why don’t we turn it around?’, and she said, ‘Not at my age.’ And that was it.

[215]Transcript, 13 February 2024, 155:23–156:1.

As to her relationship with James, Lizzie agreed that their interests were aligned on some things, and that they talked to each other in the absence of Maggie and Pia.[216] She said that she did not believe Maggie’s disturbing allegations against James to be true, while acknowledging that she was not a witness and was not there.[217]
[216]Transcript, 13 February 2024, 157:26–158:10.
[217]Transcript, 13 February 2024, 161:24–162:5.

Findings

Maggie referred to a number of cases in which conflict between named executors was found to be a ground on which to pass over one or more of them:

(a) In Tsaknis v Lilburne,[218] Mr Tsaknis and Mr Lilburne had not spoken since an argument two years previously, in which Mr Lilburne lost his temper and threatened to kill Mr Tsaknis. This, and other evidence of Mr Lilburne’s past conduct, established an arguable case for the refusal of a grant of double probate for the purposes of a summary dismissal application.[219]

(b) In Re Arklie (No 2),[220] the evidence established that the relationship between the three named executors was so dysfunctional and acrimonious that there was no realistic expectation that they would be able to work together in the best interests of the estate. Evidence of the ‘highly conflictual and mistrustful relationship between the parties’ included a refusal by one of them to produce the deceased’s will for almost a year after her death, an ongoing stalemate about the estate’s chattels in which police involvement had been threatened, and one of the parties unilaterally changing the locks on the house that was the estate’s principal asset. Orders were made passing over all three named executors.[221]

(c) In O’Halloran No 2, both named executors had failed to obtain probate nine years after the deceased’s death, because they were unable to agree on the contents of an inventory of the deceased’s assets and liabilities. In circumstances where the administration of the estate had been paralysed by significant and entrenched disagreement between the two named executors, the due and proper administration of the estate was best served by ordering that both be passed over.[222]

[218][2010] WASC 152 (Tsaknis).

[219]Tsaknis, [28]–[31].

[220][2019] VSC 350.

[221]Re Arklie No 2, [25]–[31].

[222]O’Halloran No 2, [109]–[120].

In my view, the circumstances of this case are quite different, and do not demonstrate that Lizzie is unsuitable to be appointed as a co-executor.

While Lizzie has been a party to proceedings brought by Maggie and James, this proceeding is the only one that Lizzie has instigated. In this proceeding, she has done no more than assert and maintain her claim to be granted probate of a will that names her as an executor, where everyone concerned believed until December 2020 that she had already been granted probate. In the other proceedings, Lizzie has merely acted to protect her interests as a beneficiary. In any event, the TFM proceeding is long over, having been abandoned by Maggie, and the removal proceeding is unlikely to continue if Lizzie becomes a co-executor. The fact that Lizzie and Maggie have been on opposite sides of litigation concerning the estate is, of itself, not a reason to find that Lizzie could not work with Maggie in the administration of the estate.

However, the litigation is also a manifestation of underlying family disharmony. There is no doubt that there are some very strained relationships between family members, and that there have been some episodes of bitter conflict. It is a sad state of affairs that, for many years, each of Maggie, Lizzie, James, and Pia had their own firm of solicitors, and their main form of communication was through their solicitors. I can understand that this situation is deeply hurtful for Maggie, and that she feels it is too late to turn it around. The evidence before me suggests that the relationship between James and Maggie may be beyond repair, but it is not James who is seeking to become an executor.

Lizzie’s position is distinct from the other three family members. She was not involved in the conflict between James and Pia about the Thycon business and, until February 2021, was on reasonable terms with Maggie. Lizzie and Maggie had an argument over the telephone in February 2021, which both of them found upsetting. I accept that Lizzie raised her voice during that conversation, although not that she screamed at Maggie throughout. I also accept that Lizzie had good reason to be frustrated with Maggie’s insistence on staying in St Georges Road without accommodating Lizzie’s interests as a beneficiary.

Apart from that conversation, Lizzie’s personal interactions with Maggie have been polite and cordial. Lizzie initiated her visits to St Georges Road in October 2022, when she could easily have arranged for someone else to collect her things from the house. When they met by chance in Los Angeles last year, Lizzie held out an olive branch to Maggie, which unfortunately was rebuffed on that occasion.

I have reviewed the correspondence sent by Lizzie personally in 2020, and by her solicitors since Maggie commenced the TFM proceeding. In my assessment, Lizzie has consistently sought to find a way to resolve the ongoing conflict within the family, while seeking to protect her interests as a beneficiary of the estate. Lizzie’s steady focus on seeking a solution, rather than escalating conflict, suggests to me that she will be able to work with Maggie as a co-executor.

The fact that Lizzie has maintained her relationship with James, and that their interests are aligned in some respects, is clearly a concern for Maggie. The evidence does not support Maggie’s claim that Lizzie and James together seek to nullify Maggie’s position as executor. If Lizzie wished to remove Maggie as an executor, she could simply have joined forces with James in the removal proceeding. Lizzie’s pursuit of this application for probate is the strongest evidence that she does not wish to supplant Maggie, but rather to work with her to finalise the administration of the estate.

In my view, it is positive that James supports Lizzie’s appointment as a co-executor. He has already indicated that he intends to discontinue the removal proceeding if Lizzie is appointed, and is unlikely to dispute steps that Lizzie and Maggie agree should be taken to administer the estate. I do not accept Maggie’s contention that the relief sought by James in the removal proceeding demonstrates his opposition to Lizzie’s appointment as an executor. The evidence is that James supports Lizzie’s appointment and will not pursue the removal proceeding if she is appointed.

In her affidavits, Maggie said that she did not believe that she could have a workable relationship with Lizzie if they were co-executors. Her evidence at trial was different. She agreed that if Lizzie was appointed she would try to collaborate and cooperate with her in the administration of the estate, and said she understood that it was her duty as an executor to do so.

I am not persuaded that appointing Lizzie as a co-executor will inevitably result in a situation where the two executors are separately represented, or increase the costs to the estate. Nor do I consider that their relationship will be so unworkable that a further removal application is inevitable. They have both expressed a willingness to cooperate with each other in the administration of the estate, and have said that they understand the duties of an executor to act in the best interests of all beneficiaries. I take those statements at face value.

On the other hand, further litigation is inevitable if Lizzie’s application for probate is refused. James will revive the removal proceeding, which until August 2022 was hotly contested between James, Maggie, and Pia. As things stand, there is no prospect of the estate being finalised without further litigation. There is a long list of issues that remain in dispute, which Maggie as sole executor has been unable to resolve. Instead, she has foreshadowed applications to the Court for judicial advice on matters including the estate accounts.

If Lizzie is appointed as a co-executor with Maggie, there is a prospect that they will be able to work together to complete the administration of the estate without the need for further litigation. If she is not, litigation between the four beneficiaries will certainly continue, and likely multiply.

Disposition

None of Maggie’s grounds of objection has been made out, and there is therefore no reason to pass over Lizzie as an executor. Moreover, I am positively satisfied that appointing Lizzie as a co-executor with Maggie will further the due and proper administration of the estate and is in the best interests of all beneficiaries.

I will order that probate of Rado’s will be granted to Lizzie, pursuant to leave reserved in the original grant of probate made on 28 February 2005.

I will hear the parties in relation to the costs of the proceeding, if they are unable to reach agreement on that question.

APPENDIX ONE

Exhibit D1

PLAINTIFF’S LIST OF ISSUES REMAINING FOR RESOLUTION IN RESPECT OF THE ESTATE OF RADO NANUT

Estate of Rado Nanut (Executor: Maggie Nanut)

No.

Assets and liabilities

Issues

Facts and evidence

Assets of the estate:

Ferrari 275 GTB

In specie distribution by Maggie to Pia (January 2022):

occurred while Removal proceeding on foot;

occurred at a time when Lizzie had notified Maggie of her intention to commence this proceeding

Occurred where Lizzie had also indicated desire to acquire the car;

Determined to be done at a particular value, in reduction of Pia’s rights as a residuary beneficiary;

Can/should the distribution be set aside?

The will at clause 4(m) empowered the executor to distribute the Ferrari.

Distribution based on high end of valuation: Maggie 9 November 2022 affidavit at [98] to [106] (CB93-95).

Transfer is recorded at $3,000,000 in Estate ledger at 31 January 2022.

It appears Pia accepted this valuation.

Assets of the estate:

Ferrari 550 GTB

In specie distribution by Maggie to James.

What value is to be attributed to the car?

Valuation is at $375,000

No evidence that James accepted this valuation.

Assets of the estate:

Balance of ANZ cheque account no. 013-259 0060-89536: $99,159.55

Was it collected by Maggie as executor?

How was it accounted for?

21 December 2006:

Rado’s account closed and $63,181.38 transferred to Maggie’s CBA account no. 063177 10133124. (CB309)

No bank statements for Rado’s account produced. No explanation of difference in balances.

No bank statements for Maggie’s account produced. Maggie has acknowledged that she received the $63,181.38 personally

Spreadsheet coding all transactions only has one transaction for Maggie’s account.

Maggie has produced bank statements from June 2007 onwards, however the earlier statements have not been produced.

Estate ledger for 2005 (CB218) records the $63,181.38 to Maggie’s loan account on 30 June 2005, with a corresponding journal entry on same date of $66,298.53 in Maggie’s favour. No documents supporting this journal entry produced.

Assets of the estate:

Security deposit held with Mt Sinai Hospital (New York):

$165,678.02

Was it collected by Maggie as executor?

Maggie has produced bank statements from June 2007 onwards, however earlier statements have not been produced. The draft Estate ledger and financial statements record the Estate having no cash at bank in FY05 or FY06. (CB214 and CB225). The first cash at bank record is as at FY07: a figure of $4,675.79.

The Estate Ledger appears to seek to address this amount by Journal entries at Account 660 – Sundry Debtors (CB213). No documents supporting these journal entries produced.

Assets of the estate:

Microdigital entitlements: $128,509.82 and

$76,053.01

Was it collected by Maggie as executor?

Maggie has produced bank statements from June 2007 onwards, however earlier statements have not been produced. The draft Estate ledger and financial statements record the Estate having no cash at bank in FY05 or FY06. The first cash at bank record is as at FY07: a figure of $4,675.79.

The Estate Ledger appears to seek to address this amount by Journal entries at Account 654 – Employee Leave Entitlements. (CB213) No documents supporting these journal entries produced.

There seems to be no evidence that Microdigital ever paid this amount to the Estate.

Assets of the estate:

Jampia (Trust) loan balance: $104,921

Did this exist?

Was it collected by Maggie as executor?

The Estate ledger records a receivable in the Estate on 29 November 2004 of $104,921. (CB214)

Not in the inventory of assets and liabilities. (CB278).

No supporting documents identified.

Assets of the estate:

Thycon Systems loan balance: $332,547

Did this exist?

Was it collected by Maggie as executor?

The Estate ledger records a receivable in the Estate on 29 November 2004 of $332,547. (CB214)

Not in the inventory of assets and liabilities. (CB278)

No supporting documents identified.

Journal created on 30 June 2005 transferring $293,303 of this to Powerlab. (CB214) No documents supporting these journal entries produced.

Assets of the estate:

Powerlab loan balance: $154,144

Did this exist?

Was it collected by Maggie as executor?

The Estate ledger records a receivable in the Estate on 29 November 2004 of $154,144. (CB214)

Not in the inventory of assets and liabilities. (CB278)

No supporting documents identified.

Journal entries created subsequently dealing with this. No documents supporting these journal entries produced.

Assets of the estate:

Thycon International loan balance: $83,904

Did this exist?

Was it collected by Maggie as executor?

The Estate ledger records a receivable in the Estate on 29 November 2004 of $83,904 (CB215)

Not in the inventory of assets and liabilities. (CB278)

No supporting documents identified.

Journals created subsequently dealing with this. No documents supporting these journal entries produced.

10.

Assets of the estate:

Thycon Services loan balance: $6,450

Did this exist?

Was it collected by Maggie as executor?

The Estate ledger records a receivable in the Estate on 29 November 2004 of $6,450 (CB215)

Not in the inventory of assets and liabilities. (CB278)

No supporting documents identified.

Journals created subsequently dealing with this. No documents supporting these journal entries produced.

11.

Assets of the estate:

Claim vs Maggie Nanut arising from her use and occupation of 17 St Georges Road from 2005 onwards without paying rent to the estate

Maggie owed a duty to the Estate not to take advantage of her position as executor (i.e. by occupying 17SGR rent free) without accounting to the estate for the value of that occupation. Beneficiaries can acquiesce, but only if fully informed.

Maggie had control of 17 SGR, without objection by any of Pia, James and Lizzie, from Rado’s death, until 2020. She permitted Pia and James to live in dwellings on the property.

Lizzie says that she was not informed of the fact that Maggie, as executor of the Estate, could be required to accept a liability for rent in exchange for her continued occupation of 17SGR after Rado’s death.

No evidence that Maggie sought the informed consent of Lizzie (or James or Pia) in this respect.

While the will empowered Maggie to delay sale, and to “lease assets for occupation use or enjoyment by a beneficiary”, no evidence that she exercised that power.

Maggie appears to assert that she contributed to the maintenance of 17SGR and its gardens as her “contribution”

12.

Assets of the estate:

Claim vs Maggie Nanut arising from the use and occupation of 17 SGR from 2005 onwards without requiring her to pay rent to the estate

Executor owes a duty to the Estate to act impartially between beneficiaries.

Possible common law claim for use and occupation against each of Maggie, Pia and James – enforceable by executor.

Maggie had control of 17 SGR, without objection by any of Pia, James and Lizzie, from Rado’s death, until 2020. She permitted Pia and James to live in dwellings on the property.

Lizzie says that she was not informed of the fact that Maggie, as executor of the Estate, could be required to accept a liability for rent from her continued occupation of 17SGR after Rado’s death.

No evidence that Maggie sought the informed consent of Lizzie (or James or Pia) in this respect.

While the will empowered Maggie to delay sale, and to “lease assets for occupation use or enjoyment by a beneficiary”, no evidence that she exercised that power.

13.

Assets of the estate:

Maggie’s debt to the estate for advances of living expenses

How much was advanced to Maggie from the estate line of credit?

Has she paid it back in full?

Maggie received $21,000 per month from January 2007 to February 2011 – a total of more than $1 million.

Maggie received $10,000 per month from March 2011 to October 2015 – a total of more than $500,000.

Estate ledgers have 3 main accounts which appear relevant: Account 87001 Maggie loan account, 87005 Shared Family Cost re St Georges Road, 87006 Shared Family Costs – General. The allocation appears to have been determined by either Maggie or Michael Heath.

Maggie has provided a detailed spreadsheet with coded transactions for all bank transfers.

No journals produced.

Maggie paid $2M to the estate line of credit on 5 January 2018. This appears to be the proceeds of the sale by Jampia Pty Ltd of the Cape Schanck property

14.

Assets of the estate:

Debts of others to the estate arising from use of the ANZ line of credit

Who are the debtors and what are the debts?

Have the debts been repaid?

15.

Assets of the estate:

Debts owed by Thycon Engineering Pty Ltd: $934,761

Debts according to the draft Estate financial statements for period ended 14 December 2022

Need to track through ledger.

These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

16.

Assets of the estate:

Debt owed by Pia $3,048,298;

Debts according to the draft Estate financial statements for period ended 14 December 2022

Need to track through ledger.

These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

Pia’s “debt” includes the $3,000,000 which is for the Ferrari 275GTB (and is not a debt).

17.

Assets of the estate:

Debt owed by James $164,816

Debts according to the draft Estate financial statements for period ended 14 December 2022

Need to track through ledger.

These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

18.

Assets of the estate:

Debt owed by Lizzie $670,939

Debts according to the draft Estate financial statements for period ended 14 December 2022.

Need to track through ledger. These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

Lizzie will say that she did not have the understanding that these were “debts”. Assuming they are debts, they are probably statute-barred if more than 6 years old at the time a proceeding is commenced by the Estate for their recovery.

19.

Assets of the estate:

Debt owed by “Shared Family Costs” re 17SGR $3,703.958

Debts according to the draft Estate financial statements for period ended 14 December 2022

Whose debt is this?

Need to track through ledger.

These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

20.

Assets of the estate:

Debt owed by “Shared Family Costs – General” $232,639

Debts according to the draft Estate financial statements for period ended 14 December 2022

Whose debt is this?

Need to track through ledger.

These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

21.

Assets of the estate:

Rado’s personal property

Is there final agreement between Maggie and the children that all property has been identified correctly? In particular, is there any dispute regarding items at 17SGR being Rado’s and not Maggie’s?

22.

Assets of the estate:

Furniture at 17SGR

Did the estate pay for furnishings of 17SGR, or was the cost of this recorded as a loan to Maggie?

See Heath memo December 2006 at [5]. (CB301)

23.

Assets of the estate:

Claim against Maggie for breach of duty in selling 17SGR with a licence to occupy back in favour of her and Pia

Is Maggie potentially required to account to the estate for a benefit derived by her from the licence back?

Might a higher price have been obtained on the sale without the licence back?

Are the terms of the licence excessively favourable? Did Maggie make the court aware of her licence?

Maggie has provided no information to the beneficiaries regarding the terms of her occupation of 17SGR between 19 December 2022 and 16 July 2023

24.

Assets of the estate:

Claim for land tax refund - 2018

Pending application for land tax refund of $672,975 for 2018

Application filed by Maggie. Waiting for response. Proceeding may be required – to be issued by 20 June 2024

25.

Assets of the estate:

Claim for land tax refund - 2018

Pending application for land tax refund of $3,866,782.50 for 2019 to 2022

Unclear whether any application filed by Maggie.

26.

Assets of the estate:

Claim of estate against Lizzie for reimbursement of land tax?

This identified as a claim in distribution calculation in July 2022 (CB1121).

Unclear if Maggie intends to pursue this.

27.

Assets of the estate – costs orders

Untaxed costs orders as referred to in Maggie’s opening submissions at [39]

28.

Liabilities of the estate:

Liability to Jampia atf Nanut Family Trust:

$2,178,701

Reconcile the accounts of the estate and the NFT.

Debts according to the draft Estate financial statements for period ended 14 December 2022.

Need to track through ledger.

These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

29.

Liabilities of the estate:

Thycon Energy Pty Ltd: $815,233

Debts according to the draft Estate financial statements for period ended 14 December 2022.

Need to track through ledger.

These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

30.

Liabilities of the estate:

“Thycon Entities” $2,016,795

Debts according to the distribution calculator dated 22 December 2022 (CB1484).

Why is it so different to the draft Estate financial statements as at 14 December 2022?

A lengthy loan ledger is at CB1462-1474.

These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

31.

Liabilities of the estate:

Jampia atf Nanut Family Trust $2,178,701

Debts according to the draft Estate financial statements for period ended 14 December 2022.

On 21 December 2022, only $100,803 paid to Jampia (see CB1484) – why the difference?

Need to track through ledger.

These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

32.

Liabilities of the estate:

Maggie: $1,298,188

Debts according to the draft Estate financial statements for period ended 14 December 2022.

Debts according to the distribution calculator dated 22 December 2022 (CB1484) is $1,349,610.

Need to track through ledger.

These are a result of Maggie’s allocations and journal entries.

No journals have been produced.

[2024] VSC 212

6 May 2024