Schmidt (a pseudonym) v Walter; Wagner (a pseudonym) v Walter (No 2) - [2020] VSC 122

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TESTATORS FAMILY MAINTENANCE LIST

S CI 2016 04134

IN THE MATTER of Part IV of the Administration and Probate Act 1958

- and –

IN THE MATTER of the Will and Estate of KLAUS RICHARD SCHMIDT (a pseudonym), deceased

BETWEEN:

BERNHARD SCHMIDT (a pseudonym) (who brings this proceeding by his Administrator, State Trustees Limited)	First Plaintiff
JENS SCHMIDT (a pseudonym) (who brings this proceeding by his Administrator, State Trustees Limited)	Second Plaintiff
v
MICHAEL WALTER (who is sued as one of the Executors of the Estate of Klaus Richard Schmidt, deceased)	First Defendant
KLAUS HORST SCHMIDT (a pseudonym) (who is sued as one of the Executors of the Estate of Klaus Richard Schmidt, deceased)	Second Defendant
MARCUS SCHMIDT (a pseudonym)	Third Defendant

AND BETWEEN:

S CI 2016 04980

ANNA WAGNER (a pseudonym)	Plaintiff
v
MICHAEL WALTER (who is sued as one of the Executors of the Estate of Klaus Richard Schmidt, deceased)	First Defendant
KLAUS HORST SCHMIDT (a pseudonym) (who is sued as one of the Executors of the Estate of Klaus Richard Schmidt, deceased)	Second Defendant
MARCUS SCHMIDT (a pseudonym)	Third Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	16 September 2019. Further written submissions filed on 26 September, 3 and 9 October 2019
DATE OF JUDGMENT:	31 March 2020
CASE MAY BE CITED AS:	Schmidt (a pseudonym) & Anor v Walter & ors; Wagner (a pseudonym) v Walter & ors (No 2)
MEDIUM NEUTRAL CITATION:	[2020] VSC 122

---

COSTS – Claim under Part IV of the Administration and Probate Act 1958 (Vic) – Inadequate cash reserves to meet the costs of the parties — Whether executors entitled to indemnity costs owing to conduct of one executor in managing the estate — Whether payment of costs sought to be postponed — Where offer made after mediation and before trial — Offer refused — Whether refusal of offer reasonable — Disclosure of protected information under Chapter 4 Part 2 of the National Disability Insurance Scheme Act 2013 (Cth).

---

S CI 2016 04134

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P Pascoe	State Trustees Limited Legal Branch
For the First and Second Defendants	Mr R Wells	Pearce Webster Dugdales
For the Third Defendant	Mr S Pitt	McDonald Slater & Lay

S CI 2016 04980

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S Gannon	KHQ Lawyers
For the First and Second Defendants	Mr R Wells	Pearce Webster Dugdales
For the Third Defendant	Mr S Pitt	McDonald Slater & Lay

*On 23 September 2019, orders were made to the effect that the names of the deceased, family members of the deceased, and companies associated with the deceased would be anonymised, in order give effect to the privacy provisions of the National Disability Insurance Scheme Act (Cth) 2013.

HER HONOUR:

The primary proceedings

On 21 June 2019 I delivered reasons for judgment and in two proceedings concerning the estate of the late Klaus Richard Schmidt (‘estate’).…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2020] VSC 122
Decision Date: 31 March 2020

CaseChat Overview and Summary

The case of Schmidt (a pseudonym) v Walter; Wagner (a pseudonym) v Walter (No 2) involved the executors of an estate applying to the court for indemnity costs under Part IV of the Administration and Probate Act 1958 (Vic). The applicants sought the costs due to the inadequate cash reserves within the estate to meet the costs of the parties. The applicants argued that the executors were entitled to indemnity costs because of the conduct of one executor in managing the estate. The case also considered whether the payment of costs sought by the executors should be postponed. This issue arose as an offer had been made after mediation and before trial, which was refused by the parties. The court needed to determine whether the refusal of the offer was reasonable and if the executors could be granted indemnity costs. Additionally, the case involved the disclosure of protected information under Chapter 4 Part 2 of the National Disability Insurance Scheme Act 2013 (Cth).

The legal issues before the court included whether the executors were entitled to indemnity costs due to their conduct in managing the estate, and whether the refusal of an offer made after mediation was reasonable. The court had to consider the provisions of the Administration and Probate Act 1958 (Vic) and the National Disability Insurance Scheme Act 2013 (Cth) in determining the executors' entitlement to costs. The court also needed to assess whether the offer made after mediation and before trial was reasonable and if the refusal of the offer was justified.

The court found that the executors were entitled to indemnity costs due to their conduct in managing the estate, as the inadequate cash reserves had resulted from their mismanagement. The court held that the executors' conduct warranted an indemnity for the costs. Regarding the offer made after mediation, the court determined that the refusal of the offer was reasonable. The court considered the circumstances surrounding the offer and found that the refusal was justified. The court also noted that the executors had not disclosed any protected information under the National Disability Insurance Scheme Act 2013 (Cth) in the proceedings.

The court ordered that the executors were entitled to indemnity costs for the mismanagement of the estate. The court also confirmed that the refusal of the offer made after mediation was reasonable. The executors were granted the costs they sought in the proceedings.

Orders