Ruschinek v Tiernan - [2016] VSC 197

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2014 06298

BEREK RUSCHINEK	Plaintiff
v
DAMIEN TIERNAN (WHO IS SUED AS EXECUTOR OF THE WILL OF SCHAJA RUSCHINEK, DECEASED)	Defendant

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JUDGE:	BONGIORNO JA
WHERE HELD:	Melbourne
DATE OF HEARING:	13, 15 and 19 April 2016
DATE OF JUDGMENT:	5 May 2016
CASE MAY BE CITED AS:	Ruschinek v Tiernan
MEDIUM NEUTRAL CITATION:	[2016] VSC 197

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SUCCESSION — Administrators and executors – Alleged malfeasance by executor – Parties consented to be bound by forensic report – Whether beneficiary permitted to challenge report – Civil Procedure Act 2010 – Application refused – Whether breach of fiduciary duty by delay in transferring final assets of estate while proceedings unresolved – No breach of fiduciary duty.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr B Orow	David Davis & Associates
For the Defendant	Mr J L Smith	Strongman & Crouch

15 APRIL 2016

HIS HONOUR:

I will commence by delivering the ruling as to paragraphs 1 and 2 of the summons.

Schaja Ruschinek died on 31 January 2008. His wife predeceased him so that in accordance with his will his entire estate went to his two children, a daughter Eva and a son Berek (or Ben), the plaintiff in this proceeding. The executor of the testator’s will and the defendant in this proceeding is Damien Tiernan, an estate agent and long-time friend of the deceased. The property of the testator at the time of his death comprised mainly rented real estate with only a small sum in personal estate; less than $8,000.

On 19 September 2008 the executor obtained a grant of probate of the testator’s will in this Court. He was familiar with the rented properties forming the bulk of the testator’s estate as a company, of which he has control, had acted as the testator’s letting agent for those properties for many years before he died. Those properties consisted of 11 residential properties and four shops.

The testator’s will was such as to dispose of his estate approximately equally in value between his two children: his former home and four adjoining flats to Eva absolutely, and six flats and four shops to Berek via a discretionary trust controlled by him.

Almost immediately after the testator obtained a grant of probate, then-solicitor Isaac Brott on behalf of Berek commenced a proceeding in this Court for revocation of that grant on the ground of alleged lack of testamentary capacity in the testator. Whilst the revocation proceeding was still on foot, on 3 June 2009 the plaintiff commenced another proceeding against the executor, this time seeking further provision for himself from the deceased’s estate pursuant to Part IV of the Administration and Probate Act 1958. These two proceedings were not finally disposed of by settlement until about April 2013.

The current proceeding was brought by originating motion on 27 November 2014 seeking a number of different orders: that the executor refund a sum of money to…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2016] VSC 197
Decision Date: 5 May 2016

CaseChat Overview and Summary

The case of Ruschinek v Tiernan involved a dispute concerning the administration of an estate. The deceased had appointed the respondent as the executor of her estate, and the applicant, as a beneficiary, sought to challenge the executor's conduct. The matter was brought before the Supreme Court of New South Wales. The applicant argued that the executor had delayed the transfer of the final assets of the estate while the proceedings were unresolved and that this constituted a breach of fiduciary duty.

The legal issues before the court included whether the applicant could challenge the forensic report to which the parties had consented to be bound, and whether the executor's delay in transferring the final assets of the estate while proceedings were unresolved amounted to a breach of fiduciary duty. The court had to consider the application under the Civil Procedure Act 2010 and assess the executor's actions in light of the fiduciary duties owed by executors.

The court determined that the parties had effectively agreed to be bound by the forensic report and that the applicant was not permitted to challenge it. The court also found that the executor's delay in transferring the final assets of the estate while proceedings were unresolved did not constitute a breach of fiduciary duty. The court held that the executor had acted reasonably and within their powers in managing the estate, and that the delay was not indicative of any improper conduct. The application was accordingly dismissed.

The court made no orders regarding the forensic report, as it found that the applicant was not permitted to challenge it. The court also made no orders regarding a breach of fiduciary duty, as it found that the executor had not breached their fiduciary duties. The court's decision was based on the specific facts of the case and the applicable law.

Orders