Sampson v Charleton

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST

S ECI 2021 03828

IN THE MATTER of the Will and Estate of MAVIS MARTHA CHARLETON (deceased)

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IN THE MATTER of section 34 of the Administration and Probate Act 1958 and sections 48 and 51 of the Trustee Act 1958

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IN THE MATTER of section 65A of the Administration and Probate Act 1958

BETWEEN:

PIPPA ROSALIND SAMPSON (in her capacity as Executrix of the Will and Estate of GORDON BARRY CHARLETON (deceased))	Plaintiff
v
ROBYN GAYE CHARLETON (who is sued in her capacity as Executrix of the Will of MAVIS MARTHA CHARLETON (deceased))	Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	15 August 2022
DATE OF JUDGMENT:	6 October 2022
CASE MAY BE CITED AS:	Sampson v Charleton
MEDIUM NEUTRAL CITATION:	[2022] VSC 597

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ADMINISTRATION AND PROBATE — Application by beneficiary under s 34 of the Administration and Probate Act 1958 (Vic) — Application for removal of executor — Meaning of “unfit” — Paramount consideration of the welfare of beneficiaries — Dimos v Skaftouros (2004) 9 VR 584 referred to and applied — Protection of beneficiaries of estate — Hostile attitude of executor to legal personal representative of one beneficiary — Unreasonable conduct of executor — Antagonism and animosity of executor towards beneficiary — Richard v Johnson [2018] VSC 85 referred to and applied — Executor removed and independent administrator appointed.

COSTS — Application for orders to release of funds transferred to solicitor’s trust account pursuant to orders made in a separate proceeding — Power to make orders in subsequent proceeding where parties have a liberty to apply in original proceeding — Application should be made in original proceeding.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Mah	GE Law Services
The Defendant in person

HER HONOUR:

Introduction and background

These reasons concern an application by the plaintiff, Ms Pippa Sampson, a solicitor and the executor of the estate of Gordon Barry Charleton (‘Barry’) to, among other things, remove the defendant, Ms Robyn Charleton, Barry’s younger sister (‘Ms Charleton’), as the executor of the estate of their late mother, Mavis Charleton (‘estate’). Mavis Charleton died in January 1999, while Barry died in January 2019. Two other siblings, John Charleton and Brian Charleton, are also now deceased, along with their youngest sibling, Peter, who died as an infant. Mavis’ will of 3 March 1994 provided that her estate be divided equally between the five children living at the time of her death.

The dispute between Ms Sampson and Ms Charleton arises as a consequence of the fact that, at the time of her death, the major asset of the estate was Mavis’ beneficial interest in a rural-residential property located in Healesville (‘Healesville property’). Barry was, prior to his death, the registered proprietor of the Healesville property, but by a deed made in June 1993 (‘deed’), Barry declared that he held a two-thirds share of the Healesville property on trust for his parents. Both Barry and Brian lived at the Healesville property until their deaths, Brian living there in accordance with the terms of Mavis’ will.[1] Mavis’ will also envisaged Ms Charleton living at the Healesville property, but she left the Healesville property in 1999 owing to conflict between her and Barry.
[1]Mavis’ will provided that the executor have the power to defer the realisation of the estate’s interest in the Healesville property in the event that either or both of Brian and/or Ms Charleton were living there at the date of Mavis’ death, with the period of any deferral to be agreed by a majority of Barry, Brian, and Ms Charleton.

By all accounts, relationships within the family were not particularly cordial. By way of example, Ms Charleton deposed that at a meeting at a solicitor’s office in 1999 held for the reading of Mavis’ will, her sister, Margaret Groat, said the word “Mitcham”, following which Barry violently assaulted Margaret, leading to police and ambulance being called and the will reading being suspended. Ms Charleton also put into evidence correspondence between her former solicitors and Ms Sampson (in her capacity as Barry’s solicitor) in 2003 which referred to disputes within the family regarding, among other things, Mavis’ ashes, the insurance of the Healesville property, photographs, Ms Charleton’s claim for executor’s commission, and a “coffee set” apparently in the possession of Margaret Groat, but which Ms Sampson said should be delivered to the estate’s then solicitors and smashed in accordance with Mavis’ instructions, so that no party could obtain the benefit of it. At the hearing, Peter Charleton[2] gave evidence that he believed that there was an agreement between Barry and Brian that the survivor of them would burn the Healesville property down.
[2]I refer to Barry and Brian by their first names and to Peter Charleton by his full name for ease of reading, given the common surname of the relevant parties. No disrespect is intended.

The beneficiaries of Barry’s estate, which held a one-third share of the Healesville property along with an entitlement to a one-fifth share of the balance pursuant to the terms of Mavis’ will, are two of his adult daughters.[3] However, nothing could be done about selling the Healesville property until after Brian’s death, as neither Brian or Barry wished to sell the Healesville property during their lifetimes.
[3]Barry had three daughters. In December 2020, an agreement was reached between Ms Sampson (in her capacity as executor of the estate) and one of his daughters to compromise a claim by her for further provision from Barry’s estate for a fixed sum, with the balance of Barry’s estate to be shared between the remaining two daughters, from whom Ms Sampson takes instructions from in this proceeding. It appears that the beneficiaries of Barry’s estate are also estranged from other family members, with Peter Charleton attempting to intervene in the dispute between Barry’s daughters regarding their entitlements to Barry’s estate.

The executor of Brian’s estate (which is also entitled to one-fifth of the assets of the estate) is Peter Charleton, Brian’s nephew. The sole beneficiary of Brian’s estate is Cameron Charleton, Peter Charleton’s brother.

After Brian died in July 2020, Ms Sampson took steps to take possession of and sell the Healesville property. At that time, there were two caveats lodged on the title of the Healesville property: a caveat lodged by Ms Charleton in her capacity as the executor of the estate, claiming an equitable interest in the property pursuant to the deed, and a caveat lodged by Brian claiming an interest as chargee pursuant to a loan agreement made between him and Barry on or about 20 April 2000.

The debt said to be owing by Barry to Brian, along with Ms Sampson’s refusal to take custody of or pay for the upkeep of Barry’s dog, became a point of contention between Ms Sampson and Peter Charleton, resulting in Peter Charleton issuing a proceeding in this Court in 2021 to recover the alleged debt, which was resolved at a judicial mediation in May 2022.

Another dispute which had its genesis in events prior to Barry’s death arose out of Barry’s alleged misappropriation of part of an insurance payout received by Barry following the Black Saturday bushfires in 2009, which destroyed some outbuildings and goods at the Healesville property (‘insurance payout issue’). Ms Charleton also says that certain of her possessions and Mavis’ possessions (‘missing goods’) which should have been at the Healesville property have disappeared. Ms Charleton contends that all of the responsibility for the missing goods should be sheeted home to Barry (and hence his estate), not both Barry and Brian, despite the fact that Brian also lived at the Healesville property for many years, including for a period after Barry’s death.

Given that Barry’s estate and the estate were in effect co‑owners of the Healesville property, some degree of cooperation between them to sell the Healesville property would have been desirable, albeit not essential. Of course, the primary responsibility for selling the Healesville property rested with Barry’s estate, being the only party with the capacity to deal with the legal title to the Healesville property.

One would have expected that the appointment of Ms Sampson, a solicitor, as the executor of Barry’s estate would have enabled everything to run smoothly, given her professional qualifications and skills. However, that expectation was not borne out, as Ms Sampson’s dealings with both Ms Charleton and Peter Charleton were afflicted by conflict almost from the start, culminating in the current application. On one view of the world, the only stumbling block to the finalisation of the administration of the estate is Ms Charleton’s refusal to agree to grant Ms Sampson a release with respect to her conduct of the sale of the Healesville property (‘sale process’). While that refusal may arise from a misunderstanding on Ms Charleton’s part regarding the consequences of her unwillingness to provide Ms Sampson with a release in those terms (given that, save in exceptional circumstances, Ms Sampson would be entitled to an indemnity from the assets of Barry’s estate if sued for the conduct of her duties as the executor of Barry’s estate) it is also clear from the evidence and submissions that Ms Charleton bears considerable personal animosity towards Ms Sampson, and intends to pursue various claims against Ms Sampson. However, Ms Charleton says that her feelings are well‑founded, and that her claims are justifiable.

I do not propose to go into too much detail regarding the causes and occasions of conflict between Ms Sampson and Ms Charleton, and Ms Sampson and Peter Charleton, save to say that the main issues between them included:

(a) Ms Sampson’s conduct in assuming exclusive control of the sale of the process, and some of the decisions she made during the course of the sale process;

(b) Ms Sampson’s resistance to repaying the debt said to be owing by Barry’s estate to Brian’s estate;

(c) the legal and conveyancing costs incurred by Ms Sampson for the sale of the Healesville property (‘sale costs’);

(d) the estate’s claims against Barry’s estate with respect to the missing goods and the insurance payout issue; and

(e) what are said by Ms Sampson to be unjustifiable disbursements and premature distributions made from the estate to some of the beneficiaries of the estate by Ms Charleton, including the quantum of the legal costs incurred by Ms Charleton and paid from the assets of the estate (‘legal costs’).

Further, both Ms Charleton and Peter Charleton consider that Ms Sampson has adopted an overbearing and non‑consultative approach to finalising the family’s affairs, which was in turn said to justify their own antagonistic behaviour towards her. They have also insinuated that Ms Sampson is motivated by her own financial interests, and that of her solicitors in this proceeding, GE Law Services (‘GE Law’), Ms Sampson being a principal of GE Law. Ms Charleton and Peter Charleton contend that there has been “suspicious” conduct on the part of Ms Sampson and GE Law which suggests that Ms Sampson is “calling the shots” in this litigation, referring to, among other things, discrepancies in electronic signatures and date errors on correspondence sent to them by Ms Sampson and GE Law.

This proceeding

In her originating motion filed on 18 October 2021, Ms Sampson seeks the following relief:

…
2. An order authorising the Plaintiff to pay $23,219.94, being her Trustee costs and Conveyancing costs and disbursements, from the funds paid into GE Law’s Trust Account in accordance with the Orders.
3. An order pursuant to section 65A of the Administration and Probate Act 1958 that the Defendant repays to the deceased’s estate such amount as the Court considers appropriate of the legal costs and fees for which the Defendant has been reimbursed or claims to be reimbursed out of the estate.
4. An order pursuant to section 34(1)(c) of the Administration and Probate Act 1958 that the Defendant be removed as the executor of the Will and Estate of the deceased.
5. An order pursuant to section 48(1) of the Trustee Act 1958 that the Defendant be removed as the trustee of the Estate of the deceased.

6. An order appointing a proper person or a trustee company as the:
(a) administrator with will annexed of the Will and estate of the Deceased; and
(b) trustee of the estate of Deceased.

7. An order pursuant to section 51 of the Trustee Act 1958 vesting the property and assets of the Estate of the deceased in the new administrator.
8. An order that the Defendant deliver up to the new administrator all estate records and documents in her possession.
9. For all or any of the purposes aforesaid, all such necessary and consequential orders, accounts, directions and inquiries.

…

This proceeding commenced with an urgent application by Ms Sampson in the Practice Court seeking an injunction to prevent the estate’s then solicitors, MDL Law (‘MDL’) from disbursing part of the funds in their trust account (‘estate funds’) to Ms Charleton and Brian’s estate. Ms Sampson sought (and obtained) the following orders on 19 October 2021:

1. An order restraining MDL Law from making any payments or distributions from the funds belonging to the estate of Mavis Martha Charleton and which have been paid into MDL Law’s Trust Account in accordance with the order made on 16 June 2021 in Supreme Court Proceeding number SECI 2021 02003 (“the Estate funds”).
2. An order restraining the Defendant, whether personally or by her servants or agents or otherwise, from making any payments or distributions from the Estate funds.

In addition to the matters and events already referred to in these reasons, Ms Sampson’s trial document[4] referred to a number of what I accept to be non‑contentious factual matters, as follows:
[4]On 18 February 2022, in accordance with the usual directions made in the Trusts, Equity and Probate List, Englefield JR ordered that the parties file an “agreed joint trial document” to include, among other things, a list of agreed facts and documents, and a list of the legal issues to be determined. As it turns out, the parties each filed their own trial documents.

The Plaintiff took control and possession of the Healesville property on 8 November 2020 when she changed the locks on the vacant house and the gates at the road access. By Contract of Sale dated 20 February 2021 the Plaintiff sold the Healesville property at public auction for a sum of $1,200,000.00.
On 9 June 2021 the Plaintiff commenced proceedings SECI 2021 02003 against the Defendant and Peter Charleton (in his capacity as the executor of Brian’s estate) for the removal of the Defendant’s caveat and Brian’s caveat.
On 16 June 2021 the Supreme Court of Victoria made orders in proceeding number S ECI 2021 02003 (“the 16 June 2021 Orders”). That orders directed the Registrar of Title to remove Brian’s caveat. The 16 June 2021 Orders further directed that the net proceeds of sale of the Healesville property, after certain deductions, be paid as follows:
(a) one-third to the Plaintiff in her capacity as the executrix of Barry’s estate; and
(b) two-thirds into the trust account of MDL Law, the Defendant’s then solicitors, in the Defendant’s name as executrix of Mavis’ estate.
The 16 June 2021 Orders also recorded the following undertakings:
(a) the Defendant undertook to withdraw the Defendant’s caveat prior to the settlement of the sale of the Healesville property; and
(b) MDL Law undertook not to make any payments from the sums it received in accordance with the orders without giving the Plaintiff 7 days’ notice.

The sale of the Healesville property settled on 24 June 2021.
The balance of deposit from the sale of Healesville property of $93,233.50 (being the full 10% deposit of $120,000.00 less the agent’s commission of $26,766.50) was transferred to GE Law Services’ Trust Account on 10 March 2021 and held by GE Law Services pursuant to section 24(3) of the Sale of Land Act 1962 until settlement on 24 June 2021 when it was distributed together with the balance of the sale proceeds and adjustments.
A sum of $743,661.54 (“the Estate funds”) was paid into MDL Law’s trust account at settlement of the Healesville property.
The 16 June 2021 Orders also contemplated that the Defendant’s conveyancing costs of the sale of the Healesville property and other legal costs and expenses she had incurred in relation to the administration costs in relation to the Healesville property to be paid from the proceeds of sale. A sum of $33,372.14 (“the Retained funds”) was paid into GE Law Services’ trust account. Pursuant to the 16 June 2021 Order this sum is not to be disbursed except by an order of the Court or by consent between the Plaintiff and the Defendant.

Ms Sampson’s trial document then went on to detail the distributions made from the estate funds, being (in summary):

(a) repayment of debts/other expenses: $13,392.50;

(b) legal costs: $49,164.14;

(c) distributions of $136,691.72 to each of Margaret Groat and Shirley Charleton (John Charleton’s widow); and

(d) partial distributions of $50,000 to each of Ms Charleton and Brian’s estate.

Ms Sampson’s trial document concluded as follows:

On 19 October 2021 the Supreme Court made orders in this proceeding restraining MDL from make any further payments or distributions from the balance of the Estate funds until further orders.
As at 17 December 2021 MDL was holding $306,871.46 in its trust account.
The Defendant has also incurred further legal costs totalling $12,779.47 with MDL Law.
Negotiations between the parties

Between September 2021 and February 2022, the Plaintiff and the Defendant exchanged a number of proposals as set out in paragraphs 22 to 44 of the Plaintiff’s affidavit sworn on 11 March 2022.

Ms Sampson’s trial document identifies what she says are the following issues in this proceeding:

1. Should the Court make an order removing the Defendant as the executrix and trustee of the will and estate of Mavis Charleton?
2. If so, should the Court appoint Ms Ines Kallweit as the administrator and trustee of the will and estate of Mavis Charleton?
3. Can the Plaintiff retain the following sums as payments of her costs from the Retained funds:
(a) $8,699.20, being the Plaintiff’s conveyancing costs of the sale of the Healesville property as assessed by Castra Legal Costings;
(b) $1,530.14, being the disbursements for the conveyance of the Healesville property; and
(c) $12,989.90, being the costs of the Plaintiff’s administration of the Healesville property as assessed by Castra Legal Costings?

4. Are the legal costs and fees which have been paid, or for which the Defendant has been reimbursed or claims to be reimbursed out of the estate, excessive?
5. If so, should the Court make an order pursuant to section 65A of the Administration and Probate Act 1958 that the Defendant repay to the deceased’s estate such costs and fees and if so what amount should be repaid?

6. What orders in relation to costs should be made?

However, at the hearing of the application, Ms Sampson did not press her application under s 65A of the Administration and Probate Act 1958 (Vic) (‘APA’), as this provision came into force after Mavis’ death. However, Ms Sampson relied upon what she says were excessive legal costs incurred by Ms Charleton as one of the grounds for removing Ms Charleton as the executor of the estate.

Ms Charleton’s trial document identifies the following issues for determination in this proceeding:

1. Does the Plaintiff come to these proceedings with “clean hands”?

2. Are these proceedings an “abuse of process”?
3. Are these proceedings in accordance with the Plaintiff’s “overarching obligations”?
4. When did the Plaintiff’s role as Trustee for the Mavis Martha Charleton Trust commence, and at what point did it cease?
5. What items have been included (charged for) in order for Castra Legal Costings to have calculated, and then issued the two Certificates of alleged Costings?
6. What (if any) funds from the $93,233.50 (deposit funds) were used, disbursed or relied upon by the Plaintiff/Firm at any stage prior to 24^th June 2021 Settlement?
7. Should the matter proceed to trial, what (if any) deductions and/or charges should be calculated and then applied “solely” to (against) the Estate of Gordon Barry Charleton?
8. Has the Plaintiff charged the Mavis Martha Charleton Estate any fees or charges, which there was no lawful basis and/or the necessary permissions to charge same?
9. Has the Plaintiff charged the Mavis Martha Charleton “Trust” (administered by the Plaintiff), any fees or charges, which there was no lawful basis and/or the necessary permissions to charge same?
10. Did/Does the Plaintiff have conflicts? And if so, are/were those conflicts adequately addressed?

While the events and disputes referred to in the preceding paragraphs of these reasons form the background to Ms Sampson’s application and Ms Charleton’s resistance to the application, the primary focus of Ms Sampson’s application is the events during the period in which she and Ms Charleton (through their respective solicitors, until MDL ceased to act for the estate in late January 2022) attempted to reach agreement with respect to the outstanding issues between them, between September 2021 and February 2022.

The evidence

The trial of the proceeding was largely conducted by affidavit. The parties relied upon the following affidavits:

(a) affidavits sworn by Ms Sampson on 15 October 2021 and 11 March 2022;

(b) two affidavits affirmed by Ms Charleton on 10 February 2022 and a further affidavit affirmed on 23 February 2022; and

(c) an affidavit of Ms Ines Kallweit, a solicitor with experience in the probate and estates jurisdiction, sworn on 4 May 2022, confirming her willingness to accept the appointment as administrator and trustee of the estate.

None of the deponents were cross‑examined on their affidavit evidence. In addition, I permitted Peter Charleton to give oral evidence at the hearing on behalf of Ms Charleton. He was not cross‑examined.

In her affidavit filed on 18 October 2021 in support of her application for an injunction, Ms Sampson deposed as to the following events and correspondence between the parties after the settlement of the sale of the Healesville property on 24 June 2021:

(a) the sum of $743,661.54, being the estate funds, was paid to MDL, while $33,372.14 was retained by GE Law on account of the (disputed) sale costs, in accordance with the orders made on 16 June 2021 (‘retained funds’);

(b) on 30 July 2021, MDL informed GE Law that Ms Charleton intended to make a number of payments from the estate funds, including payments to various law firms previously engaged by Ms Charleton, and distributions of $136,691.72 to two of the beneficiaries of the estate;

(c) on 10 September 2021, MDL advised that Ms Charleton also proposed to make partial distributions of $50,000 to herself and Peter Charleton (on behalf of Brian’s estate);

(d) on 16 September 2021, she received an assessment of the sale costs, being $12,989.90 for her professional fees and $8,699.20 in conveyancing costs;

(e) on 13 October 2021, MDL informed GE Law that Ms Charleton had terminated their retainer, and that Ms Charleton proposed to distribute a further $60,000 to each of Ms Charleton and Peter Charleton;

(f) on 15 October 2021 GE Law objected to the further distributions to Ms Charleton and Brian’s estate, provided MDL with copies of the assessments referred to at (d) above, and commented upon the various issues in dispute between the parties;

(g) the correspondence and various disputes between Ms Sampson and Peter Charleton, which are not necessary to detail here; and

(h) Ms Sampson deposed as follows:

I am concerned that, should the payments foreshadowed in Ms Amro’s email of 13 October 2021 are made, there would only be approximately $180,000 remaining in the estate, and that such amount would be insufficient for distribution of the full entitlement of Barry’s estate and any legal costs that may be involved in finalising the issues concerning the administration of Mavis’ estate.
I note that the draft distribution statement suggests that [Ms Charleton] intends to make a claim for executor’s commission. I further note that, as set out in MDL Law’s letter dated 12 May 2021, she alleges that there are missing items belonging to Mavis. I also note that Peter’s affidavit of 11 December 2020 alleges that Barry had improperly retained insurance payments for damages to items belonging to Mavis’ estate.
I further note that Ms Amaro’s [sic] email of 13 October 2021 indicate that [Ms Charleton] will be liaising with Peter in relation to the estate. In light of Peter’s past conduct, and his statement that my assumption that Barry’s estate would receive “may prove to be extremely ambitious and a long way from reality”, I am concerned that [Ms Charleton], with Peter’s assistance, would deliberately inflate her claim for commission, in relation to the alleged missing items, and in relation to the alleged insurance payments, and that Barry’s estate would not receive its full entitlement.

Ms Sampson filed a further affidavit sworn on 11 March 2022. She deposed, in summary, as follows:

(a) before Barry’s death in January 2019, she had acted for him on a number of occasions. All of her dealings with Ms Charleton prior to Barry’s death were in her capacity as Barry’s solicitor;

(b) she deposed as to the issues raised by Ms Charleton and Peter Charleton regarding the sale of the Healesville property, and the sale costs she proposed to recover from the retained funds; and

(c) she deposed as follows:

The Defendant has made many allegations against me in relation to my conduct of the administration and sale of the Healesville property. I do not intend to respond to her specific allegations individually, save to say that I deny all allegations of misconduct. Throughout my administration of Barry’s estate I have always aimed to sell the Healesville property as efficiently as possible and achieve the best possible price. The Healesville property was sold for $1.2M at auction and I have not received any complaints in relation to the sale price.

Ms Sampson also deposed as to the various attempts at settlement made by the parties since 16 September 2021, as follows:[5]
[5]In her written outline of submissions, Ms Sampson contended that she should be permitted to rely upon evidence of the settlement negotiations between the parties, because in Ms Charleton’s affidavit of 10 February 2022, Ms Charleton made reference to, and exhibited correspondence concerning the settlement negotiations between the parties. Accordingly, Ms Sampson submitted that the exception in s 131(2)(c) of the Evidence Act 2008 (Vic) applies. In any event, Ms Charleton consented to evidence of the settlement negotiations between the parties being adduced, provided that all relevant material was allowed into evidence.

(a) on 16 September 2021, Ms Charleton made an offer via MDL that Barry’s estate keep the retained funds, and receive a further $40,000 from the estate;[6]
[6]Noting that at around that time, distributions of $136,691.72 were made to two other beneficiaries of the estate. This letter also provided some details about the potential claims of the estate against Barry’s estate, rejected Ms Sampson’s claim with respect to the sale costs, and foreshadowed an argument to the effect that Barry’s estate had no entitlement to the assets of the estate by reason of the terms of Mavis’ will.

(b) on 25 October 2021, Barry’s estate, via GE Law, made a counter‑offer to the effect that Barry’s estate keep the retained funds and receive a further $130,236.54 from the estate. This offer provided that Ms Charleton would agree to make no further claims against Barry’s estate or Ms Sampson;

(c) on 8 November 2021, Ms Charleton, via MDL, made an offer which provided that Barry’s estate would keep the retained funds, and receive a further $97,066.55 from the estate;

(d) GE Law then instructed Mr Mah, counsel for Barry’s estate, to make a counter‑offer to Ms Charleton’s counsel to the effect that Barry’s estate would keep the retained funds, and receive a further $125,000.00 from the estate. On 2 December 2021, Mr Mah informed Ms Sampson that this offer had been accepted;

(e) in the following days the parties, via their solicitors and counsel, exchanged draft terms of settlement (‘draft terms’). The draft terms, which were signed by Ms Sampson on behalf of Barry’s estate and sent to MDL on 13 December 2021, included the following clause:

the Defendant (both personally and in her representative capacity) agrees that she will thereupon release and forever discharge the Plaintiff and Barry’s estate from all actions, claims and demands which she or Mavis’ estate had, now has, or may hereafter have, arising out of or in connection with the sale of the Healesville property, the Plaintiff’s conduct as trustee of the Healesville property, and Mavis’ estate including the foreshadowed claims.[7]
[7]The ‘foreshadowed claims’ are defined, somewhat unhelpfully, in the draft terms as claims against Barry’s estate foreshadowed by Ms Charleton in her personal capacity, and in her capacity as the executor of the estate. Based upon the correspondence between MDL and GE Law in September and October 2021, I assume the foreshadowed claims include any claim regarding the insurance payout issue and any claims with respect to the missing goods.

(f) on 17 December 2021, Ms Sampson received an email from Peter Charleton which, among other things, foreshadowed making an application that she be removed as the executor of Barry’s estate;

(g) on 20 December 2021, GE Law received an email from MDL containing revised terms of settlement (‘revised draft terms’), including the following amendment to clause 4(b) of the draft terms:

Upon compliance with these terms:
(a) the Plaintiff will thereupon release and forever discharges the Plaintiff and Mavis’ Estate from all actions claims and demands which she or Barry’s estate had, now has, or may hereafter have, arising out of or in connection with Mavis’ estate; and
(b) the Defendant (both personally and in her representative capacity) agrees that she will thereupon release and forever discharge ~~the Plaintiff and~~ Barry’s Estate from all actions, claims and demands which she or the Mavis’ Estate had, now has, or may hereafter have, arising out of or in connection with ~~the sale of the Healesville property, the Plaintiff’s conduct as trustee of the Healesville property, and~~ Mavis’ Estate including the foreshadowed claims.

(h) on 21 December 2021, GE Law wrote to MDL rejecting the revised the draft terms, and foreshadowed that Ms Sampson would apply to the Court to enforce what they said was a concluded settlement agreement;

(i) on 23 December 2021, MDL wrote to GE Law pressing the revised draft terms;

(j) on 20 January 2021, Ms Sampson received instructions from the beneficiaries of Barry’s estate not to sign the revised draft terms and to press on with her applications in this proceeding;

(k) on 31 January 2022 MDL filed and served a notice of ceasing to act;

(l) also on 31 January 2022, Ms Charleton sent a lengthy letter to GE Law (’31 January letter’). The 31 January letter stated as follows:

For clarity, I Robyn Gaye Charleton am not prepared to sign the Terms of Settlement of 7 December 2021 as proposed by you/your client. The waivers and protections sought at point 4 of the said document, along with the privacy clause, is not reasonable, workable nor in the interests of fairness and justice.

(m) the 31 January letter then went on to explain the basis for the estate’s claims against Barry’s estate, including the insurance payout issue, an allegation that an incomplete extension of the home on the Healesville property commenced by Barry (which had not been removed) devalued the Healesville property, the alleged failure of Barry (and Brian) to maintain the Healesville property as required by the terms of Mavis’ will, and the legitimacy of the entitlement of Barry’s estate to a share of the estate, given that Barry’s daughters were expressly excluded as beneficiaries under Mavis’ will. No reference was made to the missing goods;

(n) in the 31 January letter, Ms Charleton made the following proposal to Barry’s estate:

In an attempt to satisfy all beneficiaries, thus enabling me to complete my duties and finalise the Estate of Mavis Martha Charleton, I propose to make one full and final disbursement directly from the Estate of Mavis Martha Charleton, to the Estate of Gordon Barry Charleton, for the amount of $136,691.72, in full accordance to the final entitlement distributions previously paid to Ms Groat and Ms Shirley Charleton.
The amount of $136,691.72 is in excess of what I believe to be the entitlement for the Estate of Gordon Barry Charleton. However, due to the pressure and stress I am being subjected to, and to enable ALL beneficiaries of the Estate of Mavis Martha Charleton, to receive their full entitlements most efficiently, this generous offer is made.
Post the disbursements to Ms Margaret Ann Groat and the Estate of John Robson Charleton, the Estate has incurred additional costs in administering same. Should this offer be accepted, it is me alone, who shall receive a lesser distribution from the Estate than every other beneficiary.
The offer of $136,691.72 can be combined with the usual waivers/releases for the Estate of Gordon Barry Charleton and, the 3 named beneficiaries of the said Estate, (Kim Charleton, Christine Cutts and Kathleen Charleton). However, I will not provide any waivers/releases for any other individual or entity, this includes Ms Pippa Rosalind Sampson, Ms Adriane Whiticker, G E Law Services, Mr Ben Reed[8] and others.
[8]Mr Ben Reed was the vendor advocate engaged by Ms Sampson to assist her with the sale of the Healesville property.
I inform you/your client, that neither Ms Groat, Ms Shirley Charleton or Mr Peter Charleton received any special releases or waivers from myself personally or, in my capacity as Executrix of the said Estate. The waivers/releases I am prepared to provide, as stated in previous paragraph, appear reasonable under the circumstances. I would be forever precluding myself, from later suing the Gordon Barry Charleton Estate and/or its beneficiaries, for matters which would be contrary to the intent of this settlement proposal.

(o) the 31 January letter then went on to comment upon various issues in this proceeding, and then said the following in relation to Ms Sampson’s requirement that the estate provide releases and/or waivers to her and to Barry’s estate:[9]
[9]See also the extract of the 31 January letter reproduced at paragraph 26(t) below.

The offer at point 6. provides the usual waivers, indemnities and undertakings for the Estate of Gordon Barry Charleton and the 3 named beneficiaries of same.
I am not prepare to provide waivers, indemnities and/or protections for your client, Ms Pippa Rosalind Sampson and a number of others. I point out, indemnities and protections are rarely needed to be relied upon by those who have no wrongdoing.
Your client has acted as a solicitor in her administering the Estate of Gordon Barry Charleton. She has a duty to put the best interests of her clients/beneficiaries ahead of her own interests.
In consideration of all the circumstances, I am of the view that rejection of my offer as stated at point 6. could be considered a breach of your clients [sic] overarching obligations.

(p) the 31 January letter concluded by saying that the offer did not include the sale costs and the retained funds, which Ms Charleton suggested could be dealt with by negotiation between her and Ms Sampson, or by the Court. The 31 January letter concluded as follows:

Irrespective of your client’s response to this letter and the proposal contained herein (point 6), I require and demand that your client immediately furnish the documents, requested numerous times by my former legal representative (Ms Amro). This includes, itemised tax invoices, costs agreement and disclosure statement, the Castra Costings Certificates and uninformative and completely inadequate.
In the interests of all beneficiaries and to finally bring to an end, an Estate which has been ongoing for more than 22 years, I call upon you/your client to do what is necessary and right.

(q) on 17 February 2022, there was an exchange of emails between GE Law and Ms Charleton. In their letter, GE Law stated as follows:

It is clear, from your correspondence and your recent affidavits, that you intend to maintain your dispute with our client in relation to the sale of the Healesville property. Such intention is also clear from your insistence to removing the emphasised part of clause 4(b) of the agreed terms.
Your intention is also evident from your proposed orders for tomorrow’s direction hearing. Under paragraph D under “Other Matters”, you specifically state that the orders do not relate to the funds held in trust by our firm.
We wish to make it very clear that our client and the beneficiaries of Gordon Barry Charleton’s estate will not contemplate any settlement whereby the issues concerning the sale of the Healesville property, including our client’s costs incurred to [sic] the sale, remains unresolved. Our client’s initial offer was made on the basis that all disputes would be resolved, including any disputes over the sale of the Healesville property. The matter was resolved on that basis. As the above history clearly shows, it was your lawyers who inserted the emphasised part of clause 4(b) of the agreed terms which clearly provided for a release for any claims in relation to the sale of that property.
Your repeated allegation that our client is refusing to resolve the matter to protect herself is misguided. Our client sold that property as the executrix of Gordon’s estate. Accordingly, any disputes and any litigations concerning the administration and the sale process of that property can only be against her as the executrix of Gordon’s estate. It follows that any such disputes would affect Gordon’s estate and its beneficiaries.
Our client and the beneficiaries of Gordon’s estate remain open to a resolution. However, we emphasise that any resolution would only be on the basis that all disputes, including any disputes concerning the sale of the Healesville property and our client’s conduct in relation to that property is also resolved. It is futile for you to continue to make any proposals on any other basis.
We strongly recommend that you seek legal advice in relation to these matters.

(r) Ms Charleton replied later that day, as follows:

I have noted that your client has not provided any proposed orders, which offer to resolve and end matters, instead your orders seek to only delay the finalisation of my mother’s Estate, at further cost.
In direct response to your email of today, I ask;

(1) Will your client agree to orders which allow, the Disbursement of $86,691.73 to the Estate of Brian Charleton, without further delay?
(2) What does your client demand, in order to bring S ECI 2021 03828 proceedings to an end, before or during tomorrow’s Directions hearing?
I ask that you provide your response as promptly as possible, so as to allow me some time to consider further and respond accordingly.

(s) on 21 February 2022, Ms Sampson made a further proposal to Ms Charleton in the same terms as the draft terms, save that the amount payable to Barry’s estate would be $130,236.54 (compared with $125,000 in the draft terms), which was rejected by Ms Charleton the following day in another lengthy letter; and

(t) Ms Sampson deposed as follows:

The Defendant has made repeated assertions of various claims that she personally and the estate of Mavis Charleton has against Barry’s estate. In MDL’s letter of 16 September 2021 the Defendant asserts that there are missing items belonging to Mavis Charleton valued at $25,647.11, and she sought to deduct that amount from Barry’s entitlement. In her administration account filed on 7 February 2022 she included a large number of items valued at approximately $27,000 as estate having been distributed in specie to Barry. I have not received any documents or evidence to support the value of these allegedly missing items, or that Barry was responsible for their loss.
Further, in MDL’s letter of 16 September 2021 the Defendant threatened that, unless the offer contained in that letter was accepted, she would issue proceedings to, among other things, raise issue [sic] that Barry’s estate is in fact not entitled to any benefits.
As a result of the Defendant’s conduct I was concerned that Barry’s estate would not receive its full entitlement under the Will of Mavis Charleton. My concerns were heightened when MDL advised on 13 October 2021 that the Defendant had terminated their retainer, and had instructed MDL to make further distributions from the estate. As a result I immediately commenced this proceeding and applied for an injunction to prevent any further payments from the funds currently held by MDL.
Although the Defendant’s proposal contained in her letter of 31 January 2022 would lead to distributions of Mavis Charleton’s estate, the proposal would not finalise all disputes between the parties. In that letter the Defendant wrote, at paragraph 16:
“NO WAIVER SUMMARY
I make it known, that due to what I believe to be a prolonged, unnecessary, unfair, biased, costly, unethical, obstructionist, improper, conflicting and/or the self-serving, antics of your client, waivers and protections for certain individuals will not be provided.
Many of the decisions and/or actions of Ms Sampson, and/or representatives of or for, have contributed to several questionable, inflated, and/or totally unnecessary, expenses, fees and charges being incurred against the Estate of Mavis Martha Charleton.
Further, I believe at times, Ms Sampson and/or some of her agents may have acted outside the bounds of the required professional standards and at times, may have violated the law.
In the interest of justice alone, I am of the firm view that waivers and/or protections for G E Law Services and its representatives, are absolutely inappropriate given the circumstances.
I also wish to make it known, that due to many of my poor experiences with Ms Sampson and others, I have suffered tremendously, mentally, emotionally and even physically.
I consider it to be totally unreasonable, for your client to expect waivers and protections, which would deny me of my lawful rights to seek reimbursements and damages.
I place you on notice, that in order to maintain the right to pursue justice against wrongdoing, and to ensure my legal rights to litigate are not diluted. It is me alone, who is facilitating this offer and opportunity for your clients’ [sic] beneficiaries to obtain a full and final, but equal distribution, from the Estate of Mavis Martha Charleton, to my own detriment.”
I am concerned that, even if I were to accept the Defendant’s proposal of 31 January 2022, she would continue to agitate issues concerning my conduct of the sale of the Healesville property. As I only became involved in the sale of that property due to my role as the executrix of Barry’s estate, any further disputes or litigation concerning the sale process would affect Barry’s estate and delay finalisation of that estate to the detriment of Kathleen and Christine.

Ms Charleton filed three affidavits on her own behalf, two affirmed on 10 February 2022 and a further affidavit affirmed on 23 February 2022. One of Ms Charleton’s affidavits of 10 February 2022 responded directly to the evidence given by Ms Sampson in her affidavit sworn on 15 October 2021. Given that events had moved on by then, it is not necessary to traverse the contents of this affidavit in any great detail, save to note the following matters:

(a) Ms Charleton made some comments regarding Barry’s will (which was drafted and witnessed by Ms Sampson), and the administration of Barry’s estate;

(b) Ms Charleton said that Ms Sampson initiated the proceeding to remove the caveats lodged over the title of the Healesville property (‘caveat proceeding’) without making any genuine attempt to negotiate with her and Peter Charleton;

(c) Ms Charleton says that Ms Sampson demanded an additional $8,372.14 at the settlement of the sale of the Healesville property on account of the sale costs;

(d) Ms Charleton questioned the validity of the appointment of GE Law as Ms Sampson’s solicitors;

(e) Ms Charleton defended her decision to make full distributions to Margaret Groat and Shirley Charleton; and

(f) Ms Charleton said that, like Peter Charleton, she was considering litigation against Ms Sampson for, among other things, ‘pain and troubles’.

In her other affidavit of 10 February 2022, Ms Charleton deposed in some detail as to events up until her appointment of solicitors in the period after Barry’s death in early 2019, which is not necessary to recount for present purposes. She then deposed as to the correspondence between her then solicitors, Maurice Blackburn, and Ms Sampson (by this time the executor of Barry’s estate), regarding the following matters:

(a) why the inventory of assets for Barry’s estate erroneously included the whole of the value of the Healesville property (said at that time to be valued at $500,000) instead of one‑third of the value of the Healesville property;

(b) Ms Sampson’s rejection of Ms Charleton’s proposal that the sale process be conducted jointly by the estate and Barry’s estate;

(c) various complaints Ms Charleton had about Ms Sampson’s conduct of the sale process; and

(d) disputes about the release of the title of the Healesville property to Ms Sampson’s solicitors, and Ms Sampson’s alleged breach of her undertaking to allow Ms Charleton some time after the end of the COVID‑19 restrictions in late 2020 to visit the Healesville property and remove her possessions and other property of the estate.

Ms Charleton deposed that Ms Sampson prematurely and unilaterally excluded her and Peter Charleton from the Healesville property by taking possession of the Healesville property and changing the locks. She deposed that she terminated Maurice Blackburn’s retainer after she saw correspondence between them and Ms Sampson which led her to believe that they were conspiring against Peter Charleton.

Ms Charleton deposed that she retained MDL in February 2021, and, following their advice, reluctantly allowed Ms Sampson to manage the sale process, despite her concerns.

Ms Charleton deposed as to the caveat proceeding, the disputes over Ms Sampson’s claim for the sale costs, and the negotiations which led to the settlement of Barry’s daughter’s claim for further provision from Barry’s estate.

Ms Charleton deposed further, in summary, as follows:

(a) she referred to events within the family since she was appointed as the executor of the estate, including the violent and hostile conduct by Barry towards her, the disbursements she made to two of the beneficiaries, her engagement of lawyers and her acceptance of their advice, and her belief that she was entitled to make a claim for executor’s commission from the estate;

(b) her belief that there were issues about the entitlements of Barry’s estate to the assets of the estate given the potential claims of the estate against Barry’s estate on account of the insurance payout issue and the missing goods, but that in the interests of finalising the administration of the estate, she was prepared to agree to paying Barry’s estate its full entitlement of $136,691.72, which would result in her personally taking a lesser distribution from the estate;

(c) however, she does not accept Ms Sampson’s claims for the sale costs, noting that the assessments obtained by Ms Sampson do not contain itemised accounts;

(d) she deposed as follows:

In relations [sic] to any claim Ms Sampson may make regarding the Estate of Gordon Barry Charleton having not been issued with any partial or full disbursement. These are matters of her own making. Ms Sampson has refused to discuss, negotiate or even attempt to inform herself of the Insurance matters, whereby Gordon Barry Charleton made insurance claims against property losses of the 2009 Bush fires, but filed to reinstate all lost and/or alleged lost property and belongings. Barry pocketed a sum of money and caused a loss to the estate, this was a financial Benefit to Barry, but to the exclusion of all other beneficiaries.
The settlement offer of 31 January 2022 forgoes any claim the Estate of Mavis Martha Charleton might otherwise make against the Estate of Gordon Barry Charleton. Ms Sampson’s failure to accept the offer is mind boggling, but then again it may be an accurate indications [sic] of just how important it is for Ms Sampson to attempt to extract (force) releases and waivers from myself, for the manner in which she has conducted herself as both Executor for the Estate of Gordon Barry Charleton, but also in the role that she took/demanded, that being the Trustee for the Mavis Martha Charleton Trust.

(e) she made other complaints about Ms Sampson, accusing her of engaging in misleading conduct in relation to various matters, and querying the legitimacy of the appointment of GE Law. Essentially, Ms Charleton (and, it appears, Peter Charleton) suspect that GE Law is merely a ‘front’ for Ms Sampson, by reason of some of the expressions used in correspondence from GE Law, and apparent discrepancies in signatures on their correspondence.

Ms Charleton affirmed a further affidavit on 23 February 2022, titled “Affidavit B”, which largely annexed correspondence between her and GE Law regarding various settlement proposals and the proposed orders for a directions hearing in this proceeding on 24 February 2022. She also deposed that she had not received a response to the 31 January letter from either Ms Sampson, GE Law, or Ms Sampson’s counsel.

Ms Charleton exhibited to her affidavit of 10 February 2022 an affidavit sworn by Peter Charleton, also on 10 February 2022.[10] Peter Charleton deposed, in summary, as follows:
[10]While this affidavit was in evidence as an exhibit to Ms Charleton’s affidavit, I was content to accept it into evidence as if it was a stand-alone affidavit.

(a) Brian’s estate was due to receive a further distribution of $60,000 from the estate, but that has been “delayed and denied” by this proceeding;

(b) he has written to Ms Sampson on numerous occasions to request that she resolve matters between her and Ms Charleton, but she has failed to do so;

(c) he believes Ms Sampson’s dealings with Ms Charleton are consistent with her conduct in dealing with disputes between Barry’s estate and Brian’s estate over various issues, which have resulted in proceedings being issued in this Court;

(d) he deposed as follows:

Despite being beaten in the Supreme Court on 2 February 2022, Ms Sampson still refuses to discuss and/or negotiate these matters. It is my view that she is abusing the courts processed [sic] to only delay, deny and wear me down. However, such tactics will not work against me.
In the time I have had dealings with Ms Sampson, I have been alerted to her discriminating against me with her instructions for Anthony Knight or Noble Knight Real-estate to “not” deal with me. I have also learned of Ms Sampson telling Ms Narelle Neagle of Maurice Blackburn that I was a liar, I was going behind people’s back, trying to do back door deals, and more. I have seen many letters to other parties and solicitors where Ms Sampson makes a range of offensive and inaccurate comments about myself. I have also been provided with an email chains [sic] which demonstrates Ms Sampson having colluded with another Legal Practitioner to work against myself.
I am aware of Ms Sampson doing a range of things which could be called unethical, improper, unlawful, inappropriate, unreasonable, unlawful and/or misleading, to name a few.
I am fully supportive of my aunt, Ms Robyn Gaye Charleton in her role as Executrix for the Estate of Mavis Martha Charleton. She has my absolute confidence, backing and support, not simply because she is my aunt, but because I KNOW WHAT MS SAMPSON IS DOING and it is quite frankly WRONG!

(e) he complained about Ms Sampson’s failure to disclose that she had received the deposit monies for the Healesville property in March 2021, and he believes that these funds were used to pay other beneficiaries of Barry’s estate, and to pay other third parties; and

(f) he concluded as follows:

It is my firm position that Ms Sampson has not acted in good faith, nor ethically at various times. This current proceeding, in my mind is bring [sic] the Court into disrepute, in that Ms Sampson, who is a Solicitor is seemingly abusing the processes of the Court unfairly and unreasonably.

Peter Charleton exhibited to his affidavit, among other things, a bundle of emails between him and GE Law, and correspondence between him and the Court seeking leave to appear at the original hearing of this application. The thrust of this correspondence was critical of Ms Sampson’s conduct, and supportive of Ms Charleton remaining as the executor of the estate.

As earlier indicated, Peter Charleton gave oral evidence at the hearing. While he presented as being far less combative in person than in writing, the evidence he gave was consistent with the complaints made by him in his affidavit and correspondence. He concluded his evidence by saying that his grandmother (Mavis Charleton) would have been “absolutely disgusted” with the way Ms Charleton has been treated by Ms Sampson, and that she would not have wanted an independent administrator to financially benefit from the estate. He observed that Ms Charleton would need to be careful to ensure that she did not “bend too far” in favour of Barry’s estate, as that would expose the estate to litigation by him on behalf of Brian’s estate.

While not formally in evidence before the Court, Ms Sampson’s written submissions annexed the administration account prepared by Ms Charleton on 17 December 2021 and filed with the Court on 7 February 2022.[11] The administration account shows the receipts and disbursements summarised in Ms Sampson’s trial document (see paragraph 16 above). Part C of the administration account, headed “Portion of estate distributed in specie” includes a list of the missing goods, the value of which is said to total $27,215.09, each of which are said to have been lost in the 2009 fires and claimed by Barry. Part D of the administration account refers to the statement of adjustments for the settlement of the sale of the Healesville property, and says that the sum of $56,338.46 remains in dispute.[12]
[11]In the proceeding in which the application for probate of Mavis’ will was made, being S PRB 2000 04609.
[12]The statement of adjustments includes three cheques payable to GE Law totalling $39,771.84 (which included the retained funds). It is therefore not clear how the figure of $56,338.46 was arrived at.

The parties’ submissions
Ms Sampson’s submissions

Ms Sampson’s submissions referred to some of the authorities concerning applications of the current kind, including the following statement of the Court of Appeal in Dimos v Skaftouros:[13]

[T]he Court will not lightly exercise its discretion to remove a person who has been chosen by the testator as the personal representative. However, it is the welfare of the beneficiaries and the protection of their interests in the estate which must be regarded by the Court as the paramount considerations in exercising the discretion.[14]

[13](2004) 9 VR 584.

[14]Ibid [13].

Ms Sampson also referred to the decision of Ashley J in Monty Financial Services Ltd v Delmo,[15] where his Honour stated that the term “unfit to act” in s 34(1)(c) of the APA extended beyond physical or mental “unfitness” to circumstances where there has been a serious dereliction of duty on the part of the executor. His Honour said as follows:

It cannot matter whether the dereliction is born of intent, of carelessness, or of incompetence. In each case the actual or potential deleterious effect upon the estate and the beneficiaries is the same.[16]

[15][1996] 1 VR 65.

[16]Ibid, 73. See also Denby v Power [2016] VSC 535.

Ms Sampson submitted that Ms Charleton is unfit to continue to act as executor of the estate because:

(a) she has discriminated, and will continue to discriminate against Barry’s estate;

(b) she has made a number of unmeritorious claims against Ms Sampson; and

(c) she has preferred her own interests ahead of the interests of other beneficiaries of the estate.

Ms Sampson submitted as follows:

The Defendant continues to threaten to make further claims against Barry’s estate. She also continues to threaten to make unspecified claims in relation to the sale of the Healesville property. Those claims would be costly and result in further delay in finalisation of the estate. Her personal animosity against the Plaintiff is evident. She will be unable to properly and independently assess the merits of her foreshadowed claims.
In the interest of protecting the welfare of Barry’s estate as a beneficiary to Mavis’ estate, the Defendant must be removed as the executrix and trustee of Mavis’ estate.

Ms Sampson submitted that the Court should appoint as administrator “someone who can assess [Ms Charleton’s claims and the estate’s claims] objectively, independently, impartially, and [who is] not coloured by any personal feelings against [Ms Sampson]”. She submitted that it is Ms Charleton’s personal animosity towards Ms Sampson that is delaying the finalisation of the administration of the estate. Further, it is obvious from the evidence what Peter Charleton’s views of Ms Sampson are.

Ms Sampson submitted, referring to both Ms Charleton and Peter Charleton, as follows:

… with respect, both [Ms Charleton] and Mr Peter Charleton’s attitude can be described as this, they believe they are right simply because they say so …

And:
They consider anyone who disagrees with them to be obstructive, and to be wrong, and to be difficult.

Ms Sampson conceded that Mavis’ wishes, as expressed in her will, are relevant to the current application, but submitted that the paramount consideration is the interests of the beneficiaries of the estate. Further, while the estate funds are modest, there are still disputes to resolve, and administration to complete, such that the appointment of a new executor would not be futile.

Ms Sampson explained that the offer in the 31 January letter (and other like offers made by Ms Charleton) were unacceptable, because of the threat of ongoing litigation against Barry’s estate and Ms Sampson.

Ms Sampson submitted that if Ms Charleton is not removed as executor, she will carry out her threat to unilaterally deduct amounts from Barry’s share of the estate with respect to what she considers to be just claims against Barry’s estate, in circumstances where she has no evidence to support those claims. The administration account shows that she considers the amounts referable to the missing goods and the insurance payout issue as in specie distributions to Barry’s estate.

Ms Sampson submitted as follows:

It is clear that the Defendant intends to pursue the claims against Barry’s estate. On the face of it, those claims are difficult to substantiate. There may be statute of limitations issues with the Defendant’s claims. It is not in the interest of this small estate, especially where there already have been substantial distributions to all beneficiaries (including the Defendant) except the Plaintiff, for those claims to be pursued in the manner that the Defendant is likely to pursue those claims.

Ms Sampson referred to the following matters in support of her contention that Ms Charleton is prejudiced towards Barry’s estate:

(a) Ms Charleton’s failure to provide a distribution statement to Ms Sampson, even though it was provided to all of the other beneficiaries of the estate;

(b) when a distribution statement was provided, it was provided in the form of a “without prejudice” letter signalling various claims against Barry’s estate; and

(c) every other beneficiary of the estate has received a full or partial distribution from the estate, save for Barry’s estate, and Ms Sampson has grave concerns that Barry’s estate will not receive its proper entitlement from the estate.

Ms Sampson also submitted that Ms Charleton’s refusal to accept the sale costs, the excessive amounts she has incurred with respect to legal costs, and the unmeritorious allegations made against Ms Sampson with respect to the sale of the Healesville property illustrates her unfitness to remain as the executor of the estate.

In relation to the sale costs, Ms Sampson submitted that these charges (which total $23,219.24) are fair and reasonable (noting that she was required to deal with voluminous correspondence and numerous complaints from Ms Charleton and Peter Charleton prior to the sale of the Healesville property), and have been assessed as such by independent costs lawyers. She submitted that she should be permitted to recover the sale costs from the retained funds, with two‑thirds of the balance of the retained funds to be returned to the estate.

Ms Sampson submitted that the legal costs of approximately $50,000 were excessive, given that the main asset of the estate was the estate’s share of the Healesville property, and the sale of the Healesville property was conducted by Ms Sampson, not the estate. In particular, Ms Sampson submitted that the fees charged by Maurice Blackburn related to Ms Charleton’s repeated demands with respect to the Healesville property, which did not contribute to the sale of the Healesville property, and were unnecessary, given that the estate’s solicitors conceded that Ms Sampson was entitled to conduct the sale of the Healesville property. Further, Ms Sampson submitted that the fees charged by MDL largely concerned the unjustifiable claims made by Ms Charleton against Barry’s estate, and this proceeding. The incurring of excessive and unnecessary legal fees of itself justifies Ms Charleton’s removal as executor.

Ms Sampson’s submissions concluded as follows:

The finalisation of this estate has been long delayed. The Defendant’s conduct and her intentions to make further claims will result in further delays and the attendant costs to the detriment of Mavis’ estate and Barry’s estate, causing financial hardship to the beneficiaries of Barry’s estate. The Defendant’s obvious hostility against the Plaintiff personally means that the Defendant will be unable to impartially assess the merits of her intended claims.
It is therefore in the interest of the estate for Ms Kallweit, as an independent person, to be now appointed as the administrator of Mavis’ estate to finalise the estate. Ms Kallweit can assess, independently and not driven by any personal emotions towards Barry or the Plaintiff, the threatened claims.
The determination of the issues in relation to the Defendant’s costs and the Plaintiff’s costs sought in the originating motion will facilitate the finalisation of Mavis’ estate.

Ms Charleton’s submissions

Ms Charleton’s written submissions commenced with a list of documents, largely concerning the sale of the Healesville property, which she had sought from Ms Sampson but had not been provided to her. In her submissions, Ms Charleton rejected the thrust of Ms Sampson’s submissions, but made no suggestion that the legal principles identified in Ms Sampson’s written submissions did not apply to the current application.

Ms Charleton submitted that she should have been living at the Healesville property, not Barry, and that she made a number of personal contributions to the Healesville property, including the installation of a modular kitchen and other fixtures and fittings. She said that she had received legal advice to the effect that she was entitled to seek recompense from the estate for those contributions, and that the estate was entitled to pursue claims for any failure to maintain the Healesville property.

Ms Charleton’s submissions then went on to justify the legal costs on the basis that it was necessary for her to seek legal advice about the sale process in the interests of protecting the estate and the beneficiaries of the estate. The submissions also explained why Ms Charleton did not accept Ms Sampson’s claim to recover the sale costs, given that Ms Sampson has refused to provide her with itemised accounts.

As for the question of whether she should be removed as executor of the estate, and Ms Kallweit (or another professional person) should be appointed in her place, Ms Charleton’s submissions sought to defend her conduct as executor, and to attack the conduct of Ms Sampson.

In relation to her own conduct, Ms Charleton submitted that she was entrusted by her late mother with the administration of the estate, and that her removal as executor would violate Mavis’ wishes, and cause the estate to incur additional fees and charges. She submitted that she has diligently and carefully attended to her duties over 23 years, despite the difficulties she has faced, first by reason of the (on occasion, violent) conduct of Barry (and others), and later by reason of the conduct of Ms Sampson. She rejected any suggestion that the distributions made to Margaret Groat and Shirley Charleton were inappropriate.

Ms Charleton rejected the contention that she has discriminated against Barry’s estate. Rather, she submitted that there were very real questions about the entitlements of Barry’s estate to a one‑fifth share of the estate. These issues include:

(a) the refusal of Barry and Brian (and Ms Sampson herself, in her capacity as Barry’s solicitor) to allow her to inspect the Healesville property during their lifetimes to ensure that they were complying with their obligations to clean and maintain the Healesville property;

(b) the insurance payout issue, where Ms Charleton submitted that Barry “under‑claimed” for the outbuildings and goods destroyed by the bushfires, and then failed to use the insurance payout he received to reinstate the outbuildings and replace the goods, resulting in a cash windfall to him of approximately $30,000, for which he is obliged to account to the estate; and

(c) concerns raised by other beneficiaries that the failure of Barry to agree to the sale of the Healesville property prior to his death meant that his children, who were expressly excluded from Mavis’ will, would now receive one‑fifth of the estate, contrary to Mavis’ wishes and intentions.

Ms Charleton submitted that, despite the questions about the proper value of the entitlement of Barry’s estate, and her concern that Barry had “put a lot of money in his own pocket”, she was prepared to agree to Barry’s estate receiving the same amount as the other beneficiaries of the estate in order to avoid the costs associated with litigation, but this was not possible because of Ms Sampson’s demands for releases and waivers to be provided to her personally. Further, as this proceeding cannot conclusively deal with the question of the proper entitlement of Barry’s estate to the assets of the estate, removing her as the executor of the estate will only shift the burden of determining that issue from her to another, at further cost to the estate.

As for the conduct of Ms Sampson, Ms Charleton submitted as follows:

(a) Ms Sampson rejected her settlement proposal made in the 31 January letter, which has caused further delays and costs;

(b) Ms Sampson appointed a colleague from her firm, GE Law, to act for her, which failed to address her concerns about Ms Sampson’s conflicts of interest, and means that Ms Sampson makes substantial financial gains from every dispute between the parties;

(c) Ms Sampson relies upon unsubstantiated facts and assumptions, and has arguably deliberately failed to resolve disputes for her own financial gain, and her conduct has contributed to those disputes;

(d) Ms Sampson demanded to be appointed as trustee of the Healesville property, a role she was not entitled to assume, and neither Barry’s will or Mavis’ will authorised Ms Sampson to charge a trustee fee in relation to the Healesville property;

(e) Ms Sampson installed security cameras at the Healesville property at a significant cost, but failed to take out an insurance policy to protect the Healesville property;

(f) Ms Sampson prematurely changed the locks at the Healesville property, excluding Ms Charleton and Peter Charleton from the Healesville property, which, among other things necessitated the engagement of a contractor to mow the grass (this having previously been done by Peter Charleton);

(g) Ms Sampson engaged a vendor advocate to assist with the sale of the Healesville property, at a significant cost, who did not provide the assistance and services he was engaged to provide;

(h) Ms Sampson did not notify Ms Charleton that the purchaser had released the deposit to her in March 2021, or provide a trust account statement to Ms Charleton. Ms Sampson also never provided her with a trust account statement for the retained funds;

(i) Ms Sampson did little to maximise the value of the Healesville property, presenting it for sale in a well below acceptable condition;

(j) Ms Sampson refused to allow Ms Charleton to obtain valuations for the Healesville property, or to have any involvement in any aspect of the sale process; and

(k) Ms Sampson has made numerous misrepresentations and misleading statements to various parties, including other solicitors. Ms Charleton submitted as follows:

The Plaintiff has refused to negotiate, refused to provide necessary documents, failed to disclose receipt of trust monies, denied the Defendant numerous reasonable requests and more. From the outside, the Plaintiff has maintained an attitude of “her way or no way”. At no stage has the Defendant be [sic] free to execute duties as Executrix of Mavis’ Estate, instead the Plaintiff has attempted to oversee and control the Defendant.
Typically, an Executor or Executrix is free to do as they deem fit, appropriate and in accordance with the testators [sic] Will. However, the Plaintiff has imposed unreasonable demands and unnecessary restrictions upon the Defendant. In effect, the Defendant has been penalised without reasonable justification.
The Plaintiff seeks an order releasing funds held in trust by GE LAW pursuant to the 16 June 2021 Court Orders. As the Plaintiff has failed to provide the necessary information to assess the reasonableness, accuracy and/or appropriateness of the items being charged, the Defendant respectfully suggests that the Court faces a difficult question at best but an impossible one at worst.
The Plaintiff is rejecting the 31 January 2022 settlement proposal cemented [sic] the suspicion of the Defendant. The Plaintiff is desperate to obtain a waiver/release from the Defendant, along with authorisation to claim the bulk of the $33,381.00 currently held by GE Law.
The Plaintiff has done noting improper, why is a release required?
If the Plaintiff’s invoice accords with Orders, Wills and Trusts, why refuse to provide a detailed tax invoice?

During the course of the hearing of the application, Ms Charleton identified a number of letters from Ms Sampson and GE Law which had been incorrectly dated, which supported her suspicions about Ms Sampson’s motivations and conduct. Later, she said of Ms Sampson “she does not play fair”, and “she’s been in the game so long and knows every trick in the book”.

Ms Charleton confirmed that if she remained as executor, she would continue to seek to verify the sale costs, as she wants to make sure that Ms Sampson does not get overpaid. She confirmed that she would continue to pursue the insurance payout issue, and that the offer in the 31 January letter was the best offer that she could make to Barry’s estate.

Ms Charleton’s submissions also made the following observations regarding her dealings with Peter Charleton:

(a) she has been able to successfully negotiate with Peter Charleton on behalf of Brian’s estate; and

(b) Peter Charleton has undertaken that should Ms Sampson’s claims in this proceeding be dismissed, and the entitlement of Brian’s estate be paid to him immediately, he would consent to the sum of $136,691.72 being paid to Barry’s estate, provided that Ms Sampson agree to pay the equivalent of ten months’ penalty interest on the estate’s funds and the retained funds, and pay two‑thirds of the retained funds to the estate.

Ms Charleton’s submissions concluded as follows:

The Defendant has provided details and circumstances surrounding the legal costs incurred by the Estate of Mavis Martha Charleton. At all times the Defendant has only had the best interests of the Estate and its beneficiaries in mind. To a large extent the legal costs have increased as a direct consequence of the Plaintiff’s conduct, refusing to provide documents when requested and all too easily resorting to Court proceedings, are some of the examples of how the Plaintiff has contributed to additional legal costs for both Estates. The Defendant submits that the Plaintiff’s claims relating to Legal costs incurred by the Defendant be dismissed.
The Defendant has stood the test of time, some 23 years as Executrix of Mavis’ Estate. At various times the role has been extremely difficult, frustrating and even upsetting, but at no stage did the Defendant throw in the towel. It could be said that it would have been far easier for the Defendant to relinquish the role many years ago, but quitting is not in the Defendant’s make-up, nor would it be what Mavis’ wanted.
The Defendant has the finish line in sight with only one hurdle to overcome, that being the unreasonable conduct of the Plaintiff. Should this Honourable Court rule favorably for the Defendant, the Defendant stands ready, willing and will be able to make final distributions to the Estate of Gordon Barry Charleton, The Estate of Brian Charleton and to myself, Robyn Gaye Charleton. The Defendant submits that the Plaintiff’s application for Removal of Executrix be dismissed.

Discussion

Section 34 of the APA provides as follows:

Discharge or removal of executor or administrator
(1)Notwithstanding anything contained in any Act where an executor or administrator to whom probate or administration has been granted whether before or after the commencement of this Act or where an administrator who has been appointed under this section or any corresponding previous enactment—
…
(c)after such grant or appointment refuses or is unfit to act in such office or is incapable of acting therein—

the Court upon application in accordance with the Rules of Court may order the discharge or removal of such an executor or administrator and also if the Court thinks fit the appointment of some proper person or trustee company as administrator in place of the executor or administrator so discharged or removed upon such terms and conditions as the Court thinks fit; and may make all necessary orders for vesting the estate in the new administrator and as to accounts and such order as to costs as the Court thinks fit.
…
(4)Upon such appointment the property and rights vested in and the liabilities properly incurred in the due administration of the estate by the executor or administrator so discharged or removed shall become and be vested in and transferred to the administrator appointed by such order who shall as such have the same privileges rights powers duties discretions and liabilities as if probate or administration had been granted to him originally.

The relevant authorities concerning what amounts to “unfitness”, and the relevant principles governing applications of the current kind, were referred to earlier in these reasons.

I should say at the outset that Ms Charleton is a warm and pleasant lady and has impressed me as someone who has acted diligently as an executor, and who genuinely believes that she has acted in the best interests of the beneficiaries of the estate, and in accordance with her late mother’s wishes. Further, Ms Charleton cannot be criticised for considering whether the estate has any legitimate claims against Barry’s estate, or for seeking to scrutinise the sale costs. However, her dogged pursuit of what on their face appear to be fairly weak claims, and the disputes over relatively trivial amounts of money (and not all of the blame for that can be sheeted home to Ms Charleton) has to stop. And the only way that will occur, unfortunately, is for Ms Charleton to be removed as executor, and an independent person to be appointed in her place.

The evidence before me, in particular, the voluminous correspondence between the parties, compels no other conclusion that Ms Charleton’s hostility towards Barry, and now her hostility towards Ms Sampson, has affected her ability to carry out her duties as executor of the estate wisely and impartially, which in turn has adversely affected, and will continue to adversely affect the interests of the beneficiaries of the estate, or at least those beneficiaries which have not yet been paid their full entitlements.[17] That she has drawn some support from the representative of another beneficiary, Peter Charleton, may have given her some comfort that she was pursuing the right course of action, but does not alter the fact that the continual disputation between Ms Charleton and Ms Sampson was largely Ms Charleton’s fault, and has caused unnecessary costs and delays in the finalisation of the estate, and, as a consequence, Barry’s estate and Brian’s estate. In particular, the following conduct justifies Ms Charleton’s removal as the executor of the estate:

(a) her conduct in relation to the sale of the Healesville property (including the dispute over the sale costs); and

(b) her conduct in the course of the settlement negotiations in late 2021 and early 2022.

[17]Both Margaret Groat and Shirley Charleton have accepted the distributions made to them as their final distributions from the estate, such that any ‘windfalls’ to the estate (which seem unlikely to eventuate) will be shared between Ms Charleton, Barry’s estate, and Brian’s estate.

In the following section of these reasons, I will explain in more detail why Ms Charleton’s conduct in relation to these matters illustrates why she is unfit to continue as the executor of the estate. However, I would make the overarching observation that the tone and contents of Ms Charleton’s affidavits and submissions defending her conduct and approach themselves support Ms Sampson’s contention that Ms Charleton’s hostility towards Barry, and now Ms Sampson, has blinded her to her responsibilities as an executor and, most importantly, that she does not recognise or accept the need to change her approach. As alluded to by Ms Sampson’s counsel in his submissions at the hearing, Ms Charleton has exhibited a tendency to consider and suggest that anyone who disagrees with her must be somehow misconducting themselves.

In Richardson v Johnson,[18] I made the following observations regarding the responsibilities of an executor:

These duties are entrusted to the executors by the deceased, and are imposed upon them by the law. An executor is not relieved of those duties, or of the consequences of failing to perform those duties, by the fact that they hold animosity towards the beneficiaries, or any one of them. The fact that the executors might subjectively think that a beneficiary’s conduct is unreasonable does not relieve them of the obligation to carry out their duties, or respond to reasonable requests. An executor ought not let their personal prejudices cloud their judgment as to how to properly administer the affairs of an estate. Their privileges (including their right of indemnity from the assets of an estate) bring with them responsibilities.[19]

[18][2018] VSC 85.

[19]Ibid [54].

Unfortunately, these observations are also of relevance to the current application.

The sale of the Healesville property

It is not necessary for present purposes to detail the correspondence and disputes between the parties over the sale of the Healesville property. That there was much correspondence and many disputes is not itself in dispute. It is not necessary to do so, because of one simple proposition: as the legal personal representative of Barry’s estate, and given that Barry was the registered proprietor of the Healesville property, Ms Sampson was the proper party to have carriage of the sale of the Healesville property, and no other party had any right to be consulted or “involved in” the sale of the Healesville property. Only Ms Sampson had the capacity to perform the fundamental element of the transaction, which was to convey the legal title of the Healesville property in exchange for the purchase price.[20] However, she was not left in peace to do so until February 2021, after (and no doubt by reason of) the appointment of MDL as the solicitors for the estate.
[20]See Trustee Act 1958 (Vic) ss 13, 20 and 22(2).

As the legal personal representative of the holder of an equitable interest in the Healesville property, Ms Charleton had only one interest in the sale process, being to maximise the financial return to the estate from the sale of the Healesville property. She was entitled to complain if Ms Sampson sold the Healesville property at an undervalue, but that does not seem to have been the case: no complaint to that effect has been made, and it seems that Ms Charleton attended the auction of the Healesville property, and the sale price for the Healesville property exceeded all expectations.[21] She was entitled to query the sale costs (as that affected the net return to the estate) and has done so, but these disputes are relatively trivial in the context of the price obtained for the Healesville property, and, as explained further below, the sale costs (to the extent they concern Ms Sampson’s own professional fees) are at least in part referable to the conduct of Ms Charleton and Peter Charleton in seeking to unnecessarily insert themselves into the sale process.
[21]While there is no pre-sale valuation of the Healesville property in evidence, in a letter dated 10 March 2021, GE Law informed Ms Charleton that the sale price of $1.2 million “was significantly over the reserve price”. Further, Ms Charleton exhibited to her affidavit of 10 February 2022 an email from her former solicitors dated 16 July 2019 which referred to them having received two free market appraisals from local real estate agents, one of which valued the Healesville property at $760,000–$835,000, and another at $1.0–1.05 million.

Ms Charleton and Peter Charleton have complained about Ms Sampson changing the locks at the Healesville property and excluding them from the Healesville property. Peter Charleton claims that Ms Sampson indicated to him that she was prepared to entertain an offer from him to purchase the Healesville property at what in hindsight would have been a significant undervalue,[22] but later reneged and decided to sell the Healesville property at public auction. Ms Charleton claimed that Ms Sampson obtained the title to the Healesville property from the estate’s former solicitors prematurely, complained that Ms Sampson had instructed the estate agent with carriage of the sale of the Healesville property not to deal with Peter Charleton, and that she had prevented Peter Charleton from accessing the Healesville property to collect Brian’s possessions, her possessions, and Mavis’ possessions. She complained that Ms Sampson failed to present the Healesville property for sale in good condition.
[22]Peter Charleton gave evidence that on 6 February 2021 he offered to buy the Healesville property for $670,000.

However, apart from the complaint about the missing goods, and the sale costs, I cannot locate anywhere among the voluminous correspondence between the parties (including the lengthy and often inflammatory emails sent by Ms Charleton and Peter Charleton to Ms Sampson and/or GE Law) any allegation to the effect that Ms Sampson sold the Healesville property at an undervalue, or otherwise caused any loss to the estate. Accordingly, Ms Charleton’s “claims” with respect to the sale process are no more than (largely unjustified) complaints, given that Ms Sampson was entitled to sell the Healesville property, and to have exclusive control of the sale process.

Indeed, if criticism could be levelled at anyone with respect to the sale of the Healesville property, it should be directed at Ms Charleton and Peter Charleton. They bombarded Ms Sampson and GE Law with demanding and inflammatory emails, and apparently Ms Charleton made a number of attempts to postpone or cancel the auction. Arguably, the refusal of Ms Charleton and Peter Charleton to remove the caveats over the Healesville property prior to the auction may have depressed the price obtained for the Healesville property, but no claims have been made by Ms Sampson in that regard. It was only until after Ms Charleton appointed MDL as the estate’s solicitors that she conceded that Ms Sampson was the proper person to sell the Healesville property: indeed, her own evidence is to the effect that she reluctantly accepted their advice to allow Ms Sampson to conduct the sale of the Healesville property.

None of the above reflects well upon Ms Charleton (or for that matter, Peter Charleton). However, given that the sale of the Healesville property went ahead, and a good price achieved, Ms Charleton’s conduct during this period may not, of itself, be sufficient to justify Ms Charleton’s removal as executor. However, her conduct during the course of the sale process is relevant to the current application, for the following reasons:

(a) it indicates that any claims (as opposed to complaints) against Ms Sampson in relation to the sale of the Healesville property are not well founded, particularly given that Ms Charleton cannot identify how Ms Sampson’s conduct of the sale of the Healesville property caused any loss to the estate;

(b) Ms Charleton’s conduct (and Peter Charleton’s conduct) no doubt contributed to the quantum of the sale costs, which undermines her contention that the sale costs were excessive; and

(c) the barrage of insults and misguided complaints directed at Ms Sampson provided the context in which the disputation in the latter part of 2021 arose, evidenced the discriminatory attitude of Ms Charleton towards Barry’s estate, and does not auger well for the future conduct of the affairs of the estate should Ms Charleton remain as the executor of the estate.

The settlement negotiations

It seems to me that what transpired during the course of the settlement negotiations between September 2021 and February 2022 provides the strongest support for Ms Sampson’s contention that Ms Charleton is unfit to remain as the executor of the estate.

Prior to explaining how Ms Charleton’s conduct during the course of the settlement negotiations has caused me to consider that she is unfit to remain as the executor of the estate, it is necessary to step back a bit and consider the nature of the claims and allegations going back and forward between the parties following the settlement of the sale of the Healesville property in June 2021, and give some consideration to their strengths and weakness, so as to have a clearer understanding of what the parties stood to gain and what they were giving up during the course of the settlement negotiations.

While much of the focus of the evidence and submissions in this application has been upon potential claims by the estate against Barry’s estate and Ms Sampson, it is important to note that Barry’s estate had criticisms of the manner in which Ms Charleton had administered the affairs of the estate. Accordingly, Ms Charleton personally stood to benefit from any successful resolution of the disputes between her and Barry’s estate. In particular:

(a) Ms Sampson criticised the final distributions made to Margaret Groat and Shirley Charleton in late 2021; and

(b) Ms Sampson claimed that the legal costs were excessive.

Ultimately, I doubt whether any claims arising out of the matters referred to in (a) or (b) above would amount to much in financial terms, at least insofar as they would affect the final entitlement of Barry’s estate, and I accept that there are sound arguments in favour of Ms Charleton reaching an early accommodation with some of the beneficiaries of the estate. However, for present purposes, all that needs to be said is that, contrary to the thrust of Ms Charleton’s submissions, Barry’s estate and Ms Sampson were not the only parties to benefit from the releases included in the draft terms.

The claims advanced by Ms Charleton against Barry’s estate are set out in some detail in a letter from MDL to GE Law dated 16 September 2021, the 31 January letter, in Ms Charleton’s written submissions filed on 11 August 2022, and the administration account for the estate prepared by Ms Charleton and filed with the Court on 7 February 2022.

In MDL’s letter of 16 September 2021, Ms Charleton claimed that she was entitled to recover $10,310.00 from the estate and Barry’s estate for improvements she made to the Healesville property prior to 1999, and for personal property valued at $7,388.05. Further, the estate claimed $25,647.11 from Barry’s estate from goods which went missing when Barry was in “possession/legal control” of the Healesville property.[23] Ms Charleton also claimed that Barry pocketed the insurance payout on the understanding that the goods and any damaged structures would be replaced. The letter stated:

We understand that the replacement has not been attended to and thus two‑thirds of the value and the whole value of the chattels should have been paid to [the estate] …

[23]In the administration account filed on 7 February 2022, this claim increased to $27,215.09.

MDL’s letter of 16 September 2021 then went on to offer Barry’s estate the sum of $40,000 (plus the retained funds) in full and final settlement of its claim to the estate, with the balance of the estate funds (then approximately $400,000) to be shared between Ms Charleton and Brian’s estate. The letter then went on to say as follows:

Please seek your client’s instructions on the above matters and we look forward to a satisfactory response by no later than 4:00pm 23^rd September 2021.
In the meantime, we will be corresponding with the other remaining beneficiary, Mr Peter Charleton, seeking his consent to the Executor’s Commission and possibility of bringing a claim against the Estate of Gordon Barry Charleton should a satisfactory response not be received by the above deadline.
We note that Mr Peter Charleton previously indicated his willingness to pay a high Executor’s Commission to our client.
We also note that should this matter not settle as proposed above, our client will be instructing us to issue proceedings in breach of the Court Orders dated 16/06/2021 and also raise the issue that the Estate of Gordon Barry Charleton should not be entitled to any benefit at all from the Estate of Mavis Charleton as the solicitor who drafted the Will of the late Mavis indicates that the deceased’s intentions were never to provide for Gordon Barry’s family.
Clearly, should such an approach be adopted, further legal costs will be incurred and thus the entitlement for each of the beneficiaries will be deducted accordingly.

It appears that GE Law did not respond to this letter immediately, but rather took steps to commence this proceeding. However, in a letter sent to MDL on 25 October 2021, GE Law made the following observations regarding the claims against Barry’s estate:

We respectfully suggest that your client’s other claims have no prospect of success. She will be unable to prove that our client was responsible for the allegedly lost items, and the value of those items. The claim in relation to the insurance appear [sic] to be outside the limitation period. She will not succeed in obtaining any executor’s commission in light of her conduct, the distributions already made, and in circumstances where she had incurred $57,000 in legal costs. Were she to bring any of those claims and be unsuccessful, the Court is likely to order that she personally bears the costs of those proceedings.

Turning first to Ms Charleton’s claims against the estate, it would have been up to her, in her capacity as the executor of the estate, to determine the validity of those claims and whether to pay the claims. If she had done so, she may have exposed herself to criticism from and possible claims by the beneficiaries of the estate, but that is not particularly relevant to the issue currently before the Court.

As for the claims against Barry’s estate, it seems to me to be rather odd that, to the extent that the missing goods are not goods which were destroyed in the Black Saturday bushfires, Ms Charleton contends that the sole responsibility for their disappearance should rest with Barry, given that Brian was also living at the Healesville property during the relevant period. The suggestion that Barry’s position was somehow different because he was the legal proprietor of the property misses the point: any responsibility for any goods located at the Healesville property arose from his occupation of the property, not his ownership, and in that regard he was in no different position than Brian. That Ms Charleton seeks to assign responsibility for the missing goods to Barry alone has contributed to my view Ms Charleton has not carried out her duties as executor impartially.

As for the foreshadowed claim regarding the insurance payout, the explanation of this claim is a little muddled. There seems to be no dispute that during the Black Saturday bushfires, some outbuildings (stables and a hayshed), goods (mainly, but not exclusively, saddlery and other equestrian equipment) and some fencing was destroyed. Barry was the holder of the insurance policy for the Healesville property, and made a claim, which was no doubt assessed and paid in the usual way, apparently in the sum of $58,846.40.[24] However, Ms Charleton says that not all of the funds were used to reinstate the outbuildings and fencing, and the goods claimed for were not replaced.
[24]A number of figures have been referred to in the correspondence, but this is the amount referred to in Ms Charleton’s written submissions filed on 11 August 2022.

Setting aside the question of whether Barry was negligent in allegedly underinsuring the Healesville property (this issue is a little difficult to understand, given that the claim was assessed and paid), there seem to be a number of complications with this claim. First, it appears that some reinstatement works were carried out at the Healesville property, with the construction of a barn, and some fencing. Accordingly, any claim by the estate would have to take those works into account. Secondly, there seems to be some overlap between the estate’s claim with respect to the missing goods, in that some of the missing goods appear to be goods which Ms Charleton had said should have been replaced using the insurance payout. While it is not necessary to attempt to reconcile the two claims here, there is a possibility that there has been some double counting on Ms Charleton’s part. Finally, while I am not convinced that Ms Sampson’s assertion that Barry, as the policyholder, could do whatever he wanted with the insurance payout is entirely meritorious given that Barry was a trustee (which might also affect the merits of any limitation defence advanced by Barry’s estate), there is a real question mark as to whether the estate has suffered any loss by reason of the insurance payout issue, at least insofar as the failure to reinstate outbuildings and fencing was concerned.

To elaborate, there has been no complaint about the sale price of the Healesville property. The sale price for the Healesville property was significantly in excess of the estimate of the value contained in the inventory of assets and liabilities for Barry’s estate, which suggests that the value of the Healesville property was largely based upon the value of the land, not its improvements, such that the poor condition of the house and the other infrastructure had little bearing on the sale price.[25]
[25]This is probably also an answer to Ms Charleton’s complaint about the unfinished extension to the house on the Healesville property, which may not have fallen within the definition of the foreshadowed claims in the draft terms, but was first raised in the 31 January letter.

In that context, it is difficult to see how Barry’s actions in failing to reinstate the infrastructure caused the estate any loss. The estate would have to establish that, had the works been carried out, the Healesville property would have achieved a higher price some seven to eight years later. Alternatively, if Barry’s estate was in fact required to account to the estate for the part of the insurance payout not spent on reinstatement works, the estate would have to contend with the arguments that Barry was the policy holder, had paid the insurance premiums, and the possibility that any claim has been extinguished by the operation of the Limitations of Actions Act 1955 (Vic).

Finally, the suggestion by Ms Charleton that Barry’s estate may not be entitled to any part of the estate because Mavis intended that Barry’s children not benefit from the estate is untenable. Mavis’ will means what it says, and the clause excluding Barry’s children from the estate would only take effect if Barry pre‑deceased Mavis. He did not. If Mavis wished to exclude Barry’s children from the assets of the estate if she pre-deceased Barry (as she in fact did), the solicitors who drew up her will would have been able to draft the will in a manner which would give effect to that intention.

All of the above suggests that any claims the estate may have against Barry’s estate are quite modest, and pursuing and proving them would not be straightforward. This is not to suggest that Ms Charleton was at fault in investigating any potential claims, and seeking advice upon those claims, to the contrary. But the problems with these claims means that pursuing these claims would be costly, and the returns uncertain. Those problems no doubt contributed to Ms Charleton’s willingness to forego those claims in the context of the settlement negotiations.

A brief summary of the settlement negotiations can be found at paragraph 26 above. What is clear from the chronology of events is that, by the end of December 2021, the only point of difference between Ms Sampson and Ms Charleton was the provision of a release to Barry’s estate and Ms Sampson personally in connection with the sale of the Healesville property. The amount payable to Barry’s estate had been agreed, the other outstanding issues in this proceeding, being the sale costs and the legal costs, had been agreed, and the draft terms in effect required Ms Charleton to abandon the estate’s claims against Barry’s estate with respect to the insurance payout issue and the missing goods. If settlement had been reached in accordance with the draft terms, the payments could have been made to Barry’s estate, the residue of the estate funds paid to Ms Charleton and Brian’s estate, and the estate would have been wound up many months ago.

In my view, the refusal of Ms Charleton to agree to release Barry’s estate and Ms Sampson from any claims with respect to the sale of the Healesville property, all other matters having been agreed, was, in all of the circumstances, unreasonable and irresponsible. I appreciate that Ms Charleton has a number of complaints about Ms Sampson’s conduct, and that her criticisms are heartfelt. However, as I have noted earlier in these reasons, the practical effect of the refusal of Ms Charleton to provide Ms Sampson a release is that any release granted to Barry’s estate has no real value.

The release in the draft terms provided for the release of any claims the estate may have against Barry’s estate and Ms Sampson arising out of or in connection with the sale of the Healesville property, Ms Sampson’s conduct as trustee of the Healesville property, and the estate, including the foreshadowed claims. Ms Charleton was prepared to surrender what I have suggested are complicated claims against Barry’s estate (there being no possibility that there could be any claims against Ms Sampson with respect to the foreshadowed claims, given that the foreshadowed claims arose out of Barry’s alleged conduct, not Ms Sampson’s conduct), but was not prepared to provide any releases to any party with respect to the sale of the Healesville property.

Ms Charleton later indicated, in the 31 January letter and her affidavit of 10 February 2022, that she would not make the foreshadowed claims against Barry’s estate, or any claims in relation to the sale of the Healesville property against Barry’s estate, and that she was prepared to release Barry’s estate from all claims. However, as I attempted to explain to Ms Charleton during the course of the hearing (which had already been explained by GE Law in their letter of 12 February 2022), the only basis for Ms Sampson’s involvement in the sale of the Healesville property was in her capacity as the executor of Barry’s estate. Accordingly, if any claim was made against Ms Sampson in relation to her conduct with respect to the sale of the Healesville property, she would, save in exceptional circumstances, be entitled to an indemnity from Barry’s estate, so that any legal costs and damages payable by Ms Sampson would be recoverable by her from Barry’s estate, thus rendering any release in favour of Barry’s estate valueless. Accordingly, it was quite reasonable for both Barry’s estate and Ms Sampson to refuse to settle with the estate other than on terms which provide for full releases for both of them with respect to any claims the estate may have against Ms Sampson.

In her submissions, Ms Charleton suggested that Ms Sampson’s requirement that releases be provided to her suggested that she must have done something very wrong, and must have known that she had done something wrong, as otherwise why would she need a release? Two observations can be made about that submission: first, the converse question could also be asked, being, if Ms Charleton does not intend to make any claims against Ms Sampson or Barry’s estate, why was she not prepared to provide a release? In any event, the evidence and submissions make it clear that Ms Charleton is contemplating a claim against Ms Sampson, which, as previously explained, has the same practical consequences as a claim against Barry’s estate.

Secondly, Ms Charleton’s observations about the motivations of parties who seek releases ignore the fact that the draft terms contain releases in her favour, and fail to recognise that the vast majority of agreements made for the purpose of compromising legal proceedings will involve the provision of releases, illustrating the value of finality and closure to parties engaged in litigation.

In reaching the conclusion that it was unreasonable of Ms Charleton to refuse to grant a release to Ms Sampson, and that the maintenance of this position continues to be unreasonable, I am conscious that Ms Charleton is self‑represented. However, less weight can be given to that matter than might usually be the case. It was clear from the correspondence between the parties in December 2021 and January 2022 that the sticking point between the parties was the proposed releases to Barry’s estate and Ms Sampson. Ms Charleton was represented by MDL at the time, and I can infer that they would have explained to her why the releases were important to Ms Sampson and Barry’s estate, including the implication of Ms Sampson’s right of indemnity from Barry’s estate. Ms Sampson’s right of indemnity was explained to her in GE Law’s letter of 17 February 2022, and again by me at the hearing of the applications. As an intelligent, educated person, I doubt that Ms Charleton does not understand the issue. Rather, Ms Charleton has made it quite clear that she does not want to release Ms Sampson, because she wants to and intends to make claims against Ms Sampson with respect to the conduct of the sale of the Healesville property, despite what I consider to be the dubious merits of any such claims, and despite the fact that her pursuit of such claims will almost certainly further erode the assets of the estate.

In reaching my conclusion that Ms Charleton’s refusal to provide Ms Sampson with a release with respect to her conduct concerning the sale of the Healesville property was unreasonable, I make no comment one way or another as to the appropriateness of the amount proposed to be paid to Barry’s estate, either under the draft terms, or the sums being put forward by either party in the course of the settlement negotiations in early 2022. However, it seems to me that whatever sum is agreed, the only sensible resolution of the matter would have to involve full releases being given to all parties. After all, what is the point of Barry’s estate agreeing to take a particular sum in final settlement of its claims to the assets of the estate, only to face an action by Ms Charleton to have part or all of it clawed back via claims against Ms Sampson? However, Ms Charleton has made it clear that she is simply not prepared to do that, and it appears that her position has hardened as the application has progressed, save perhaps in the unlikely event that Barry’s estate was prepared to forego entirely any entitlement it may have to the assets of the estate. The possibility of further ongoing disputes regarding what in the end are rather modest amounts of money cannot be in the interests of the estate or any of its beneficiaries.

In her submissions, Ms Sampson relied upon my decision in Richardson v Johnson[26] in support of her contention that the fact that the administration of the estate was close to an end was no barrier to acceding to her application that Ms Charleton be removed as the executor of the estate. In that decision I observed that the Court of Appeal in Dimos v Skaftouros[27] had said that the timing of the application is not determinative. In the current case, the fact that the administration of the estate is close to the end is in fact a relevant matter in favour of appointing a new executor, as it is Ms Charleton’s conduct which is preventing the finalisation of the administration of the estate.
[26][2018] VSC 85.
[27](2004) 9 VR 584.

In summary, I have concluded that Ms Charleton is unfit to remain as the executor of the estate, in that she has not been impartial in her dealings with the beneficiaries of the estate, and has acted unreasonably in her dealings with Barry’s estate during the course of the settlement negotiations. Significantly, it is clear from her evidence and submissions that if she is permitted to remain as the executor of the estate, the disputation over relatively trivial matters will continue unabated. While the appointment of an independent professional executor will cause additional fees to be charged to the estate, I consider that those fees are unlikely to exceed the costs to the estate of ongoing disputation.

For completeness, in making my findings regarding Ms Charleton’s conduct as executor of the estate, I have not reached any conclusion that Ms Charleton has favoured her own interests above the interests of other beneficiaries. And, while I have made reference to the evidence and conduct of Peter Charleton in these reasons, those references were made in order to explain what has occurred in the course of the dealings between the parties and this proceeding: I am not seeking to attribute responsibility for Peter Charleton’s conduct to Ms Charleton.

Accordingly, I will make orders removing Ms Charleton as the executor of the estate, and for the appointment of Ms Kallweit, who I accept is appropriately qualified to carry out the duties of executor of the estate.

The sale costs

Ms Sampson also sought an order authorising her to recover the sum of $23,219.24 from the retained funds on account of the sale costs, with two-thirds of the balance of the retained funds to be paid to the estate, and one-third of the retained funds to be paid to Barry’s estate.

I do not understand Ms Charleton to be submitting that Ms Sampson should not be entitled to recover anything on account of the professional fees charged by her, or the costs and disbursements incurred by her for the sale of the Healesville property, although she has submitted that the terms of Mavis’ will do not allow Ms Sampson to recover what are described as “trustee” costs. However, Ms Charleton’s main complaint is that Ms Sampson has failed to provide her with the itemised accounts upon which the costs assessments were based.

The difficulty with the orders sought by Ms Sampson with respect to the sale costs is that the source of my power to make any such order in this proceeding is unclear. No legislative provision is referred to in the originating motion which is said to empower me to make the order sought by Ms Sampson with respect to the sale costs, and I doubt that I otherwise have the power to make orders with respect to the conduct of the financial affairs of an estate “at large”. This is not, for example, a proceeding where Ms Sampson, in her capacity as the executor of Barry’s estate, is seeking the advice of the Court with respect to the disposition of the retained funds.

Rather, any power of this Court in relation to the disposition of the retained funds arises from the orders made by Randall AsJ in the caveat proceeding.[28] Paragraph 3 of the orders made in the caveat proceeding on 16 June 2021 (’16 June orders’) provides as follows:
[28]S ECI 2021 02003.

The Plaintiff is to distribute the proceeds of sale of the Land as follows:
a. to pay for the following:
i. all reasonable costs associated with the sale of the Land including the agent’s commission, the auctioneer’s fee, advertising and other expenses of the sale;
ii. any outstanding rates, charges, taxes and imposts in relation to the Land which have not already been paid;
iii. all expenses incurred by the Plaintiff in preparing the Land for sale, including cleaning and removing and disposing of any chattels, belongings, possessions or rubbish on the Land, and securing the Land prior to settlement;
iv. subject to sub-paragraph (b), the Plaintiff’s reasonable legal costs and expenses associated with the conveyance of the Land;

b.to pay the sum of $25,000 to the trust account of GE Law which is not to be disbursed except by an order of the Court or with the consent of the Plaintiff (in her capacity as the executrix of the estate of Gordon Barry Charleton) and the Second Defendant;
c.to pay the balance then remaining as follows:
i. one-third to the Plaintiff (in her capacity as the executrix of the estate of Gordon Barry Charleton); and
ii. two-thirds into the trust account of MDL Law, solicitors for the Second Defendant, in the name of Robyn Gaye Charleton (in her capacity as the executrix of the estate of Mavis Martha Charleton).

Paragraph 7 of the 16 June orders provides that the parties have liberty to apply.

I do not consider that the reference to “the Court” in subparagraph 3(b) of the 16 June orders should be construed to mean “this Court in any proceeding before it”. After all, orders of that kind might be made in proceedings where it is contemplated that the substantive dispute between the parties would be determined in another court, such as the County Court. It seems to me to be unlikely that any other court would have the power to deal with funds held in trust pursuant to an order of this Court without the relevant orders made by this Court expressly providing for such an eventuality. Similarly, it seems that, in the absence of any agreement for the disposition of the retained funds, any order with respect to the disposition of the retained funds would need to be made in the caveat proceeding.

In my view, the correct approach is for the parties (being Ms Sampson and the new executor of the estate) should seek to agree upon the disposition of the retained funds. If they cannot agree, then Ms Sampson can exercise her rights under the liberty to apply granted by the 16 June orders, and the issue can be determined by the Court in the caveat proceeding. If the new executor forms the view that she cannot reach a concluded view regarding the validity of the sale costs without viewing the underlying invoices, then she can make an application for particular discovery in the caveat proceeding. As the associate judge who made the 16 June orders has now retired, any application can be heard by me or another associate judge.

Given Ms Sampson’s concession that Barry’s estate does not have standing to make an application that part or all of the legal costs be disallowed, it is not necessary for me to deal with that application in these reasons.

However, it seems to me that once the question of the costs of this proceeding have been determined, the new executor will be in a better position to assess whether she seeks to take any action with respect to the legal costs, or any part of the legal costs. The new executor would, given her experience and her access to the records of the estate, be in a position to make an assessment as to whether the legal costs were justifiable, and to adjudicate between the views of the beneficiaries in that regard, to the extent that they differ. If she forms the view that a part or all of the legal costs were unjustifiable, she can make the appropriate deduction from the final distribution to Ms Charleton. Conversely, the new executor may also form the view that disputes over the reimbursement of legal costs should not be a barrier to finalising the administration of the estate, particularly given that the administration of the estate would not have been completely straightforward even in the best of circumstances, given the time that had elapsed between Mavis’ death and the sale of the main asset of the estate.

Conclusion and orders

Accordingly, I will make orders pursuant to s 34(1)(c) of the APA that Ms Charleton be removed as the executor of the estate, orders appointing Ms Ines Kallweit in her place, and consequential orders in accordance with s 34(4) of the APA. I will dismiss the applications in paragraphs 2 and 3 of the originating motion concerning the sale costs and legal costs, without prejudice to Ms Sampson’s rights to apply to the Court to recover the retained funds in the caveat proceeding, and/or to make submissions to the new executor that the legal costs, or any part of them, be repayable by, or not be recoverable by Ms Sampson. I shall hear further from the parties on the appropriate form of orders and the question of costs.

[2022] VSC 597

6 October 2022