Tuohey v Tuohey

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 6315 of 2001

In the matter of an application pursuant to s. 34 of the Administration and Probate Act
AND s. 48 of the Trustees Act
AND pursuant to Order 54 of the Supreme Court Rules of Civil Procedure
AND in the Will and Estate of Mercia Tuohey (deceased) and in the Will and Estate of Patrick John Tuohey

BETWEEN:

PATRICK GERARD TUOHEY	Plaintiff
v
ANTHONY JOSEPH TUOHEY (who is sued as executor of the Will and Estate of each of the above deceased and personally)	Defendant

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATES OF HEARING:	7 and 8 November 2001
DATE OF JUDGMENT:	8 May 2002
CASE MAY BE CITED AS:	Tuohey v Tuohey
MEDIUM NEUTRAL CITATION:	[2002] VSC 180

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Administration and Probate – Executor – Trustee – Application for removal on ground that unfit to act – whether conflict of interest and duty in the administration of two estates by same executor and trustee – application dismissed.

Magistrates’ Court Act 1989, jurisdiction in proceedings in detinue.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms L. Sparke	A.B. Natoli
For the Defendant	Mr J. Arthur	Dwyer & Co

HIS HONOUR:

These proceedings were commenced by originating motion filed on 18 June 2001. The plaintiff is the brother of the defendant who is the executor of the wills and/or trustee of the estates of Mercia Tuohey, his mother, and Patrick John Tuohey, his father.

Mercia Tuohey, the mother of the plaintiff and defendant, died on 19 August 1996 leaving a will dated 11 July 1982. Patrick John Tuohey, the father of the plaintiff and the defendant, died on 1 December 1996 leaving a will dated 11 July 1982. The mother and father were survived by their children, John Tuohey, Anthony Tuohey (the defendant) Denise Rafton and Patrick Gerard Tuohey (the plaintiff). By her will the mother appointed her husband, Patrick John Tuohey, the father, as the sole executor of her estate, however, she provided that should he predecease her or die while any portion of her estate remained undistributed then she appointed her sons, John Tuohey and the defendant, Anthony Tuohey, as executors of her will and trustees of her estate. By her will made on 11 July 1982 the mother devised and bequeathed the residue of the whole of her real and personal estate, after the payment of her just debts, funeral and testamentary expenses, to the father. She provided, however, by paragraph 4 of her will –

“I give and bequeath my gold necklet marked ‘Mizpah’ and my Rick Lipp piano to my daughter Denise Tuohey.”

No other specific bequest was made by the mother by her will.

By his will also made on 11 July 1982 the father appointed the mother as executor of his will, however, he provided that should she predecease him then he appointed his sons, John Tuohey and Anthony Tuohey, the defendant, as executors of his will and trustees of his estate. By his will the father bequeathed his real and personal estate, after payment of his just debts and funeral and testamentary expenses to the mother. He further provided that should the mother predecease him, then he devised and bequeathed the whole of his estate after the payment of such debts and expenses to be divided equally between his children. It is to be noted that the father made, by the terms of his will, no specific bequest as to any part or portion of his property whether personal or otherwise.

After the death of the mother and before the death of the father no person obtained a grant of probate of her will. With the involvement of solicitors Dwyer & Co, the estate of the mother was wound up. The net residue of the estate, but taking no account of the specific bequest made by the mother to Denise with respect to the piano and the necklet, amounted to $3,246. By a letter dated 7 November 1996 the solicitors forwarded to the father a cheque for $3,246. The letter advised that the solicitors had attended to the lodgement of a survivorship application at the Titles Office and that, in due course, the title to the property referred to would issue in his name. This related to a property registered in the joint names of the mother and father. The letter further advised –

“The other items in the Estate should be distributed in accordance with the will namely a gold necklet marked ‘Mizpah’ and a Rick Lipp piano were left to Denise.”

By an order made on 19 October 1999 the defendant, Anthony Tuohey, was appointed executor of the will of the mother reserving to the son, John Tuohey, to come in and prove the will. On 21 October 1999 an order was made appointing the defendant, Anthony Tuohey, executor of the will of the father reserving to John Tuohey to come and prove the will.

By the originating motion in this proceeding the plaintiff, Patrick Gerard Tuohey, sought a number of orders and directions with respect to the estates of each of the mother and father. The orders sought included an order that the defendant, Anthony Tuohey, be discharged and removed as the executor and/or trustee of the estate of the mother and that John Tuohey be appointed as administrator with the will annexed and/or as trustee of the estate of the mother and an order that the defendant, Anthony Tuohey, be discharged and removed as executor and trustee of the estate of the father and that John Tuohey be appointed as administrator with the will annexed and/or trustee of the estate of the father. Further orders and directions were sought with respect to that which were referred to as “the Piano proceedings”. To these proceedings, which are pending before the Magistrates’ Court at Melbourne, I shall return as they are central to and dominate the reason why the plaintiff has issued and has prosecuted the present proceedings.

In his affidavit sworn on 13 June 2001 the plaintiff, Patrick Gerard Tuohey, has deposed, in part, “the disputes which give rise to these and other proceedings concern the ownership of the piano [the Rick Lipp piano]. I believe, from what members of my family have told me that the piano belonged to my father. I believe it did not belong to my mother. Further, both my father and my mother gave the piano to me whilst they were still alive. My father confirmed that in a written deed of gift”. As I shall deal with hereafter the “Piano proceedings” were instituted by the defendant, Anthony Tuohey, in the Magistrates’ Court pursuant to procedures available to that court for it to resolve the question of the ownership of the piano. There is exhibited to the affidavit of the plaintiff a statutory declaration made by the father’s brother, Laurence James Tuohey, and declared on 19 April 2001. On 19 June 2001, Laurence James Tuohey swore an affidavit which was filed in these proceedings verifying the facts and matters set out in his statutory declaration. In that statutory declaration Laurence James Tuohey declared that to the best of his knowledge and belief the piano was purchased by his grandmother in or around 1902 and remained in her possession until her death in 1912. He further declared that to the best of his knowledge and belief that upon the death of his grandmother the piano was transferred to the possession of his father, Patrick John Tuohey, where it remained until his father died in 1961 and that upon the death of his father, who died without a will, he and his brother, Mathew Gerard Tuohey, attended to his estate and gave the piano to their brother, Patrick John Tuohey. Laurence James Tuohey further declared that on a number of occasions during the last years of the life of his brother, Patrick John Tuohey, both separately and in the presence of his wife, Mercia Tuohey, told him that he had given the piano to his son the plaintiff, Patrick Tuohey.

Further, in his affidavit sworn on 13 June 2001 the plaintiff, Patrick Gerard Tuohey has deposed that he has had possession of the piano since 1986. He has deposed that the piano was given to him by his father with the knowledge of his mother, Mercia Tuohey. Exhibited to this affidavit of the plaintiff was a document being that which was referred to in his affidavit as a “deed of gift”. That document dated 29 March 1996 and signed by the father, Patrick John Tuohey, in the presence of Helen Gartland, solicitor, stated –

“I Patrick John Tuohey of Airlie Retirement Home, Upper Heidelberg Road, Ivanhoe hereby declare that I gave my Richard Lipp & Son Stuttgart piano to my son Patrick Gerard Tuohey.”

The plaintiff further deposed that during the lifetime of his parents neither of his parents nor his sister, Denise, took any action against him to seek possession of the piano and after the death of his mother, Mercia, neither his father nor Denise took any action to seek to recover possession of the piano. He deposed that it was after the death of his father that demands were made that the piano “be relinquished” by him.

On 30 July 1999 the plaintiff’s solicitors wrote to the defendant’s solicitors providing a copy of the “declaration” executed by the father, Patrick John Tuohey. At all times the plaintiff has maintained and asserted that the piano was not the property of the mother, Mercia Tuohey, for her to give by her will to Denise, but, rather, it was the property of the father, Patrick John Tuohey, who gave it to him in 1986.

On 23 October 2000 the defendant “as executor of the estate of Mercia Tuohey” brought proceedings in the Magistrates’ Court at Melbourne against the plaintiff, Patrick Gerard Tuohey, wherein he alleged, inter alia, that Mercia Tuohey, the mother, was the beneficial owner of the piano, that by her will she had given it to Denise, that the piano was in the possession of the present plaintiff, Patrick Gerard Tuohey, and that despite demands he had refused to deliver it up. He alleged, in part –

“The plaintiff as executor has at all material times acted for and on behalf of Denise Tuohey with respect to the gift.”

The present defendant, Anthony Tuohey, in such proceedings sought an order that the defendant in those proceedings, Patrick Gerard Tuohey, return the piano to him. Alternatively he sought an order for damages. The present plaintiff has defended those proceedings. He has deposed in his affidavit sworn on 13 June 2001 that he proposes to file an amended defence which in terms was exhibited to his affidavit. By such intended amended defence the present plaintiff Patrick Gerard Tuohey admits that he has possession of the piano, he denies that the present defendant, Anthony Tuohey, has any legal basis to make the demands made by him and he further alleges that the proceedings are statute barred by virtue of the Limitation of Actions Act.

The plaintiff, Patrick Gerard Tuohey, in his affidavit has complained that should the defendant, Anthony Tuohey, be not successful in the proceedings in the Magistrates’ Court he, the plaintiff, will be unable to recover his costs as there are no assets in the estate of the mother, Mercia Tuohey, from which to recover such costs. The plaintiff has further alleged in his affidavit, that in respect of the Magistrates’ Court proceedings, the defendant, Anthony Tuohey, is utilising moneys belonging to the estate of the father, Patrick John Tuohey. There is exhibited to the affidavit of the present plaintiff a letter written by Dwyer & Co, the solicitors acting for the present defendant, Anthony Tuohey, in the administration of the estate of each of the mother, Mercia Tuohey, and the father, Patrick John Tuohey. Annexed to that letter is a statement headed: “Statement of Position as at 1/3/2000 estate of Mercia and Patrick Tuohey”. That statement makes no reference to the sum of $3,204.32 paid to the father, Patrick John Tuohey, by such solicitors on 7 November 1996 which payment was accompanied by the letter to which I have already referred. There appears from that “Statement of Position” no reference to any matters which can be seen to relate to the administration of the estate of the mother, Mercia Tuohey. On its face it appears to be a statement of account relevant to the administration of the estate of the father, Patrick John Tuohey. As appears from that statement an interim distribution has been made from the estate of Patrick John Tuohey to each of the defendant, Anthony Tuohey, John Tuohey, the present plaintiff, Patrick Gerard Tuohey, and Denise Rafton in the sum of $55,000 being in total $220,000. There remains a balance, undistributed, in the sum of $4,788.11. In a letter written by Dwyer & Co solicitors dated 3 May 2001 to the solicitors for the plaintiff it was said, in part:

“The balance of $4,788.11 was retained pending finalisation of the estates and this, of course, includes finalisation of the only matter now outstanding which is a dispute in relation to the ownership of a piano. We would expect this to be resolved by arbitration set for 28 June 2001.”

The date, 28 June 2001, was a return date relevant to proceedings instituted by the present defendant, Anthony Joseph Tuohey, in the Magistrates’ Court at Melbourne.

In a letter dated 10 April 2001 the present plaintiff’s solicitors wrote to the solicitors for the present defendant, Anthony Tuohey, “re Estate of Patrick John Tuohey” requiring that a full accounting be made for the balance due from the father’s estate to the present plaintiff. In that letter it was stated:

“If in fact funds from the deceased’s estate are being used to fund the claim by the Estate of Mercia Tuohey for return of the piano then we are at a loss to see why the administration of the deceased’s estate need be delayed, and more importantly, be used to fund the claim. Such behaviour is not justified and the executors will be called upon to account for the unauthorised use of the estate’s funds. We trust as solicitors for the estate you have not knowingly allowed this to happen.”

Such statement provides evidence of the animosity existing between the present plaintiff, Patrick Gerard Tuohey, and the defendant, Anthony Tuohey, over the subject as to who owns and has right to the possession of the piano which has caused the present proceedings to be instituted and prosecuted before this Court.

In an affidavit sworn by John Tuohey on 15 June 2001 he has deposed, inter alia, that he has been told of the Magistrates’ Court claim with respect to the piano, and stating that he has “no vested interest in the outcome or ownership of the piano”. He deposed to a conversation which he stated took place between him and the present defendant, Anthony Tuohey, in which the defendant stated to him, inter alia, that it was his intention to get the piano back from the present plaintiff, Patrick Gerard Tuohey. He expressed the view, “that the ownership of the piano is something which needs to be resolved between Patrick and Denise. It ought to be resolved according to whatever evidence is available of the ownership…” He has further deposed that if necessary he would consent to being appointed legal personal representative of the estate of his father, Patrick John Tuohey, and that of his mother, Mercia Tuohey.

In an affidavit sworn by Denise Rafton on 21 September 2001 she has deposed that she resided in the family home of her parents until she was married on 23 March 1970. She has deposed that in or about mid-1982 when visiting her parents at the family home and during a conversation that she had with her mother she was told that her mother and father had been to see their solicitor to draw up wills and that she was told by her mother that she had bequeathed her “Mizpah” necklet and the Rick Lipp piano to her. She has deposed to matters which constitute her understanding as to matters of fact and many other matters which are not admissible as evidence of fact as to whether the mother, Mercia Tuohey, had the capacity to will the piano to her but constitute evidence as to the basis of her assertions that the piano was considered to be her piano which resulted in her being encouraged by her mother and father to accept the responsibility for cleaning and maintaining the piano. She has deposed that in 1988 when she was living in Sydney she was contacted by telephone by her brother, the plaintiff, Patrick Gerard Tuohey, who said to her –

“I’m after a favour, can I borrow the piano, the boys want to learn to play.”

She deposed that she asked the plaintiff whether their parents were agreeable to the request and on the plaintiff stating, that it was all right with them if it was all right by her, she indicated to the plaintiff that she was happy for him to take the piano provided that it was returned to her when she required him to do so. She deposed that the plaintiff, Patrick Gerard Tuohey, stated that if this happened he could not afford to buy a piano himself, but accepted the condition that she had placed on the loan and that in or about 1988 the piano was removed by the plaintiff from the family home and taken to his home. Denise Rafton further deposed that in 1992 when the plaintiff was “relocated” to Brunei with his family the piano was returned to the family home where also certain personal possessions of the plaintiff were stored. She deposed that in late 1995 when the plaintiff, Patrick Gerard Tuohey, returned to Melbourne from Brunei he removed the piano from the family home to his home and that this was done without prior notification or discussion with her.

In her affidavit Denise Rafton has deposed to other matters relevant to the dispute existing between her and the plaintiff, Patrick Gerard Tuohey, as to the ownership of the piano and setting out matters forming the basis of her claim that she is the owner of the piano and entitled to possession of the same. She has asserted that the defendant, Anthony Tuohey, as executor of the estate of her mother, Mercia Tuohey, was duty bound to seek to carry out her mother’s wishes and faced with the refusal of the plaintiff, Patrick Gerard Tuohey, to give up the piano she has maintained that the defendant had no choice but to issue proceedings to seek to resolve the issue as to the ownership of the piano. She has further deposed in her affidavit that insofar as it was within her power to consent to the bringing of the Magistrates’ Court proceeding she did so and further that she has informed the defendant that she is willing to indemnify him for his costs of the Magistrates’ Court proceedings. She has further deposed that by reason of the fact that she and the present plaintiff, Patrick Gerard Tuohey, are unable to resolve the dispute as to the ownership of the piano between them and between other members of the family ultimately the question will need to be determined by a court.

In the affidavit of the defendant, Anthony Tuohey, sworn on 21 September 2001 he has deposed that he is by occupation a company director who has served as trustee of various superannuation schemes and that from 1996 to 1997 he was a member of the Superannuation Complaints Tribunal. He has asserted that in these roles he has become aware of the duties and responsibilities of trustees including, “to act in the interests of all beneficiaries and discharge the terms of a trust instrument or will”.

He has deposed that despite the specific bequest in the will of his mother, Mercia Tuohey, whereby she gave to her daughter Denise the “Rick Lipp piano” and numerous requests made to the plaintiff, Patrick Gerard Tuohey, for him to make it available and to be given to Denise, the plaintiff has refused to give up possession of the piano. He has deposed that after the death of his grandfather, Patrick John Tuohey, in or about 1961 his mother, Mercia Tuohey, arranged and paid for the piano to be moved to Melbourne and to be restored. He has deposed that it was always his understanding that the piano was to be retained by them or by his mother for the benefit of his sister, Denise, and that it was commonly understood in the family that the piano was always to be Denises. He has deposed that on 23 January 1993 his mother appointed him her attorney, pursuant to an enduring power of attorney, and that on that day he asked his mother if she clearly understood the document that she had signed. He has deposed that she responded, “perfectly. I want you to promise me that you will make sure that the Denise gets the piano”.

Anthony Tuohey has deposed to, in his affidavit, the facts and circumstances relating to the administration of his mother’s estate and the circumstances in which he made application for a grant of probate of the wills of both his mother, Mercia Tuohey, and his father, Patrick John Tuohey. It is not necessary to refer to those matters at this time. He has deposed that after the house, forming the major property comprising his father’s estate, was sold no resolution had been reached concerning the issue of the ownership of the piano and that the plaintiff, Patrick Gerard Tuohey, was not willing to give the piano up, and his sister, Denise, was not willing to relinquish her claim. He has deposed that he was of the view that as an executor he had a moral and legal obligation to ensure that the estate of his mother was finalised in accordance with her wishes and he consulted his solicitor, Mr Dwyer, who advised him that while it was open to commence proceedings in this Court to have the matter resolved, given the value of the piano, which was approximately $750, it would not necessarily be the most appropriate course of action given the likely costs which would be incurred. He has deposed that he was advised by his solicitor that the likely costs of seeking resolution of the matter in the Magistrates’ Court would be in the vicinity of $3,000 whereas the estimated costs of a contested application in this Court would be in the vicinity of $25,000. He has deposed that having regard to these matters he instructed his solicitor to issue proceedings in the Magistrates’ Court to seek to have the matter relating to the piano resolved. Those proceedings were issued in October 2000. He has deposed that whereas he remains of the firm view that the piano was intended by his grandfather and his father and mother to pass to Denise Rafter that, in his capacity as executor, he has made it clear that his priority has been to finalise the estates as expeditiously and inexpensively as possible. He has deposed that he sought to identify and access a process by which the dispute in relation to the piano could be resolved and had the matter been allowed to proceed to arbitration in the Melbourne Magistrates’ Court, the issue of the ownership of the piano could have been resolved and both estates could in all likelihood have been finalised in an inexpensive manner.

In his affidavit Anthony Tuohey has disputed various facts deposed to by the plaintiff in his affidavits as previously referred to. He has deposed that when visiting the home of the plaintiff, Patrick Gerard Tuohey, around Christmas 1995 and noticing the piano there, he said that he hoped that the plaintiff had his sister’s permission, to which the plaintiff had replied that their parents had given the piano to him, to which he in turn replied, “You know it’s Denises”. He has deposed that he considers that he is duty bound to seek to carry out his mother’s wishes as expressed in her will, that given the refusal of his brother, John Thomas Tuohey, to cooperate in obtaining grants of probate in the administration of their parent’s estate he was compelled to seek grants of representation and to appoint solicitors to finalise the estate. He has deposed that he considered that he had no choice but to issue proceedings to seek to resolve the issue of the ownership of the piano.

The defendant, Anthony Tuohey, has further deposed that he is and has been willing to underwrite the estate’s costs of and incidental to the proceedings brought in the Magistrates’ Court in the first event. He has deposed that he would, in the first event, be primarily and personally liable for costs if the claim against the plaintiff, Patrick Gerard Tuohey, in the Magistrates’ Court was unsuccessful, subject to exercising any right of indemnity against the sum retained in his father’s estate, namely, the sum of $4,788.11. He has deposed that this amount has been retained by him in the administration of his father’s estate, “in case either of the estates should incur expense in the resolution of the issue of the ownership of the piano”. The defendant, Anthony Joseph Tuohey, in his affidavit has denied using words attributed to him by his brother, John Thomas Tuohey, in his affidavit and has taken issue with other statements deposed to in the affidavit of his brother, John. I do not need to refer to those matters in detail in this judgment.

In an affidavit sworn by Phillip Dwyer, a barrister and solicitor of this Court, and the solicitor acting on behalf of the defendant, Anthony Tuohey, in these proceedings, he has deposed that in or about June 1982, in his capacity as a partner of Coady Dwyer & Associates, he was approached by Mercia Tuohey and Patrick John Tuohey, the mother and father, and requested by them to prepare their wills. He has deposed that they both attended his office together and he took instructions from them jointly. He has deposed that in the course of receiving instructions from them both, Mercia Tuohey made it clear that she wanted to include specific bequests in her will in relation to her gold necklet marked “Mizpah” and her Rick Lipp piano which were both to pass to her daughter, Denise. He has deposed that Mercia Tuohey gave those specific instructions to him in the presence of her husband, Patrick John Tuohey, who made no comment in relation to the specific bequests. Dwyer has deposed that acting in accordance with the instructions that he had received from each of them he prepared wills for Mercia Tuohey and John Patrick Tuohey and sent the wills to them for their approval. He has deposed that the wills were signed by Mercia Tuohey and Patrick John Tuohey on 11 July 1982 in the presence of witnesses, Eileen A. Costigan and Winifred M. Costigan. He has deposed that both wills were executed at the same time before the same witnesses and returned to him for safe keeping. Dwyer has further deposed that following the death of Mercia Tuohey and on ascertaining that the estate was simple and straightforward and it was not necessary to obtain probate to collect the assets, he wrote to Patrick John Tuohey care of the Airlie Special Accommodation Home, at which he was then residing, sending to him documents to be signed by him and returned, being a withdrawal from the Commonwealth bank passbook account of Mercia Tuohey and an application by him as surviving proprietor of their home, for it to be transferred into his name. He has deposed that the letter was returned to which there was attached a “with compliments” card with the name of the plaintiff, John Gerard Tuohey, printed on it. In his affidavit Dwyer deposed to the facts set out in paragraph 4 of this judgment, that on 7 November 1996 he sent to Patrick John Tuohey a statement of position of the estate of Mercia Tuohey together with a cheque for $3,246 which was accompanied by a letter containing that set out in that paragraph.

In his affidavit Dwyer has further deposed to the facts and circumstances preceding the defendant, Anthony Joseph Tuohey, obtaining grants of probate of the wills of each of Mercia Tuohey and Patrick John Tuohey.

Dwyer has deposed in his affidavit that the assets of the estate of Patrick John Tuohey were collected and that the family home was sold on 28 February 2000. He has deposed that he prepared a final account being an Account Sales and Statement of Position, that he sent the same to the defendant, Anthony Tuohey, on 1 March 2000 and on his approval cheques for $55,000 were sent to each of the four beneficiaries by way of an interim distribution with a copy of the Account Sales and Statement of Position. Dwyer deposed that he understood that the defendant had not proposed to seek to charge any executor’s commission in respect of the administration of the estates of his parents and that the sum of $4,788.11 was retained in the estate of Patrick John Tuohey pending “finalisation of the outstanding matter being the piano”. Dwyer has deposed to the fact that as the plaintiff, Patrick Gerard Tuohey, and Denise Rafton were equally insistent upon their respective positions and given the dispute which had developed in relation to the piano’s ownership, on instructions of the defendant a Complaint was issued in the Magistrates’ Court on 23 October 2000. He has expressed his view that the only other choice would have been to bring an application to this Court under Order 54, which he has deposed was considered, but that having regard to the value of the piano, estimated to be between $750 and $1,000 that course could not be justified. He has deposed that as to the Complaint filed in the Magistrates’ Court, the defence initially taken by the plaintiff, Patrick Gerard Tuohey, in the proceedings, was, that at no material time was the testatrix, Mercia Tuohey, the sole beneficial owner of the piano, that the piano was gifted to Patrick Gerard Tuohey by his parents subsequent to the date of the will and that such facts were relayed both verbally and in writing to the plaintiff in those proceedings, Anthony Tuohey, on a number of occasions. Dwyer has exhibited the undated amended defence of the plaintiff, Patrick Gerard Tuohey, to the proceedings in the Magistrates’ Court. To his affidavit, Dwyer has exhibited an application made by the plaintiff, Patrick Gerard Tuohey, in the Magistrates’ Court proceedings which was filed on 27 July 2001 whereby Patrick Gerard Tuohey sought an order that those proceedings be stayed pending the determination of the present proceedings and a further order that Anthony Joseph Tuohey, the plaintiff, to those proceedings, personally or alternatively Denise Rafton provide security for the costs of the Magistrates’ Court proceedings.

As to the proceedings in the Magistrates’ Court I shall hereafter refer to. However at this point reference should be made to the power of the Magistrates’ Court to make an order against a plaintiff for security of costs. Rule 31.02 of the Magistrates’ Court Civil Procedure Rules 1999, which is in the same terms as R. 62.02(1) of the Civil Procedure Rules of this Court makes provision for an order being able to be made for security for costs and when such an Order may be made. Rule 31.02(b) provides that the Magistrates’ Court may, on application of a defendant to civil proceedings, order that the plaintiff give security for costs, “Where” (as is relevant to this case):

“(b)the plaintiff is a corporation or (not being a plaintiff who sues in a representative capacity) sues, not for the plaintiff’s own benefit, but for the benefit of some other person, and there is reason to believe that the plaintiff has insufficient assets in Victoria to pay the costs of the defendant if ordered to do so.”

The proceedings in the Magistrates’ Court are brought by Anthony Tuohey – “as executor of the estate of the late Mercia Tuohey”. In such circumstance as Anthony Tuohey has brought the proceeding in the Magistrates’ Court, as the executor of Mercia Tuohey’s estate, there is no power in that court to order that he provide security for the defendant’s costs in those proceedings.

There is also filed in these proceedings two affidavits sworn by Helen Gartland who, as appears from correspondence exhibited to the affidavit of Phillip Dwyer, has acted on behalf of the plaintiff in these proceedings. She has deposed in her first affidavit sworn on 14 June 2001 that she witnessed the declaration made by Patrick John Tuohey on 29 March 1996, and to which I have previously referred. In her second affidavit sworn on 3 October 2001 she has deposed that when Patrick John Tuohey signed that document he appeared to be of sound mind and quite capable of understanding what he was doing. She has sworn that the document was signed in her presence and she had no reason to believe that, “it was not a freely given signature”. There is no explanation given by her as to the circumstances which brought about Patrick John Tuohey’s execution of such declaration.

In a further affidavit sworn by the plaintiff, Patrick Gerard Tuohey, on 3 October 2001 and filed in these proceedings he has deposed to facts which he has sworn to as demonstrating the difficulties which the defendant, Anthony Tuohey, and his sister, Denise, had with their parents adding, “It is not surprising that our father with the knowledge of our mother decided to give the piano to me”. Such facts as deposed to, demonstrate, to my mind, not only the state of the extent of the enmity which the plaintiff, Patrick Gerard Tuohey, has towards his brother, the defendant, Anthony Tuohey, and Denise Rafton, but also demonstrates, to my mind, the difficulty that the defendant to these proceedings has faced and had to contend with when the plaintiff, Patrick Gerard Tuohey, claims ownership of the piano and Denise Rafton also claims ownership by reason of the gift of it to her by her mother as contained in her will. It is that state of affairs that has brought these proceedings to this Court where the subject central to the issues before this Court is a dispute between two members of a family over a piano, the value of which is between $750 and $1,000. Much of this affidavit of Patrick Gerard Tuohey contains statements which are not admissible in evidence in these proceedings. In his affidavit the plaintiff has stated that he maintains his application that the defendant be removed as executor of the wills of each of the two deceased. One reason which is given is that Anthony Tuohey’s “intended expenditure of my father’s estate moneys to pursue an asset of my mother’s estate show that he is not properly acting to the benefit of the beneficiaries of the estates”. Those moneys are the sum of money, not to this point distributed in the estate of John Patrick Tuohey, being the sum of $4,788.11. The interest of the plaintiff in that undistributed sum at best is $1,197.02.

I was informed by counsel during the course of these proceedings that the proceedings before the Magistrates’ Court have not proceeded to this point of time by the consent of both parties to those proceedings although no order has been made in the Magistrates’ Court specifically staying those proceedings pending the hearing and determination of these proceedings.

Before addressing the submissions made on behalf of each party to these proceedings it is appropriate to have regard further to the nature of the proceedings brought by the defendant, Anthony Tuohey, as executor of the estate of Mercia Tuohey in the Magistrates’ Court at Melbourne. As previously referred to, in those proceedings Anthony Joseph Tuohey seeks an order that the defendant, Patrick Gerard Tuohey, return the piano to him, the plaintiff. In the alternative Anthony Tuohey claims damages. From the material before this Court it is said that the piano has a value of between $750 and $1,000. Pursuant to s. 102(1) of the Magistrates’ Court Act 1989, which is within Division 2 of Part VI of that Act it is provided that the Magistrates’ Court of Victoria must refer a “complaint under which the amount of monetary relief sought is less than $5,000 to arbitration in accordance with [that] Division”. Sub-section 2(a) provides that sub-s. 1 does not apply if the complaint is of a class prescribed by regulations to be a complaint to which Division 2 does not apply. The nature of the complaint brought by Anthony Tuohey, as executor of the estate of Mercia Tuohey, is not a complaint of a nature exempt from arbitration under the Magistrates’ Court Act - see Schedule 2 Magistrates’ Court (Arbitration) Regulations 2000 [S.R. No. 51/2000]. It is provided by sub-s. 3 of s. 102 of the Act that the Court may, on application of a party or without such application, order that a complaint be heard and determined by the Court and not referred to arbitration if it is satisfied as to one or other of the matters set out in sub-ss. (a)-(f). Further, provision is made by sub-s. (4), that if arbitration of a complaint is commenced and the Court is satisfied on the application of a party or without such application that the complaint ought to be determined by the Court, the Court may order that the complaint be determined by the Court. By s. 103(2) of the Act it is provided:

“In conducting an arbitration, the court –
(a)is not bound by rules of evidence but may inform itself on any matter in such manner as it thinks fit; and
(b)is bound by the rules of natural justice; and
(c)is not required to conduct any proceeding in a formal manner; and
(d)may exercise any powers that the court may exercise in hearing and determining a complaint.”

However, it is provided by s. 103(4) that:
“The Court must determine in accordance to law any question that arises for determination in an arbitration”.

The claim of Anthony Tuohey against Patrick Gerard Tuohey in the Magistrates’ Court is that he alleges that the piano was beneficially owned by Mercia Tuohey, that she bequeathed it to Denise Rafton, that he is executor of her will and trustee of her estate, that Patrick Gerard Tuohey has possession and control of it, that Patrick Gerard Tuohey refuses, despite demands to give to him possession of the piano and detains and still detains the piano. Anthony Tuohey seeks an order that Patrick Gerard Tuohey return the piano to him. Alternatively Anthony Tuohey claims damages.

The claim of Anthony Tuohey is in the nature of a claim in detinue. It would appear from material before the Court in this proceeding, that Anthony Tuohey seeks to have determined by the Court the issue as to whether at her death Mercia Tuohey was the owner of the piano, and able by her will to bequeath it to her daughter, Denise Rafton, or whether Patrick Gerard Tuohey is the owner of the piano, in consequence of a gift of it being made to him by his father, Patrick John Tuohey.

By s. 59(3) of the Justice Act 1890 the Court of Petty Sessions had jurisdiction to enquire into the title of goods, of a value not exceeding the amount provided, and to order that the goods be returned to the owner. By s. 67(3) of the Justice Act 1958 the Court of Petty Sessions continued to be vested with that jurisdiction.

By s. 50(c) of the Magistrates’ Court Act 1971, as inserted by Act No. 8427 of 1973 the Magistrates’ Court, was vested with the same jurisdiction with respect to goods not exceeding the value provided by that section.

The Magistrates’ Court Act 1989 did not carry forward within Part 5 Division 1, those jurisdictional statutory provisions that had been part of and relevant to the Court of Petty Sessions and then the Magistrates’ Court since 1890. Section 100(1)(a)(b) and (d) of the Magistrates’ Court Act 1989 provides:

“(1)(a)The Court has jurisdiction, subject to sub-section (2)(a) to hear and determine any cause of action for damages or a debt or a liquidated demand if the amount claimed is within the jurisdictional limit; and
(b)to hear and determine any claim for equitable relief if the value of the relief sought is within the jurisdictional limit, and
(c)…
(d)to hear and determine any other cause of action if the Court is given jurisdiction to do so by or under any Act other than this Act.”

A claim in detinue founded on the wrongful detention of goods, when a demand for their return has been made to the possessor of the goods, is a claim in tort. At common law judgment in an action in detinue was an order for return of the goods or payment of the assessed value of the goods when they could not be returned. It was not the plaintiffs election whether the defendant would pay to the plaintiff the value of the goods or return the same. However pursuant to s. 78 of the Common Law Procedure Act 1854 the law was altered by empowering a judge in an action for detinue to order that the goods be returned without giving the defendant the option to pay to the plaintiff the value of the goods assessed while retaining the goods[1]. This Court has the power to make such order as provided by Rule 22.13.
[1]General and Finance v Cooks Cars [1963] 2 All ER 314.

In the proceedings before the Magistrates’ Court, pursuant to s. 100(1)(a) of the Magistrates’ Court Act 1989 it would be competent for the Court to assess the value of the piano and determine that while the same is retained by Patrick Gerard Tuohey the estate of Mercia Tuohey has suffered damage by being deprived of it, in the sum as assessed as its value, and to award any further sum by way of damages within its jurisdictional limit which may be shown to have been suffered by the estate by being deprived of possession of the piano.

However having regard to the provisions of s. 100(1)(a) of the Magistrates’ Court Act, whereas the Court has jurisdiction to hear and determine “any cause of action for damages” the question that arises is whether the Magistrates’ Court has jurisdiction, separate from that referred to, to determine who has title and ownership in the piano and in the event of it being determined that on the death of Mercia Tuohey she was the owner of the piano and it formed part of her estate, to order, regardless of awarding damages, that the piano be returned by Patrick Gerard Tuohey to Anthony Tuohey, the executor of the will and trustee of the estate of Mercia Tuohey. Section 100(1)(b) of the Magistrates’ Court Act gives the Magistrates’ Court jurisdiction to hear and determine any claim for equitable relief within the jurisdictional limit of the Court.

Section 31(a) of the Supreme Court Act 1986 provides:

“Every inferior court which has jurisdiction in equity or at law and in equity –
(a)has as regards all causes of action within its jurisdiction, power to grant in any proceeding before the Court such relief, redress or remedy or combination of remedies either absolute or conditional, as the Court has power to grant in the like case.”

In the circumstances of this case, particularly having regard to the value of the piano, it would appear that in the event of Anthony Tuohey being successful in the proceeding against Patrick Gerard Tuohey in the Magistrates’ Court, it would seem likely that it would be contended on behalf of Anthony Tuohey that an award of damages against Patrick Gerard Tuohey would be an inadequate remedy.

If the Magistrates’ Court, in hearing and determining the proceeding before it, determined that at the death of Marcia Tuohey she was the owner of the piano and on her death it formed part of her estate, that Patrick Gerard Tuohey wrongfully retains possession of it despite the demand of Anthony Tuohey, as executor of the will and trustee of the estate of Mercia Tuohey, and it is also determined that in the circumstances, that an award of damages would be an inadequate remedy, then it would be within the discretionary equitable jurisdiction of the Magistrates’ Court to make an order in the nature of a mandatory injunction requiring Patrick Gerard Tuohey to deliver up possession of the piano to Anthony Tuohey, as executor of the will and trustee of the estate of Mercia Tuohey.[2]
[2]See Salmond on Torts – 11^th Ed., R.F.U. Heuston, p. 354: Spry, Equitable Remedies, 5^th Ed., p. 386-8.

The Magistrates’ Court, whether by way of proceeding pursuant to s. 103 of the Magistrates’ Court Act or otherwise, has jurisdiction to hear and determined the present action of Anthony Tuohey against Patrick Gerard Tuohey and has power and jurisdiction, in the event of Anthony Tuohey being successful, to order that Patrick Gerard Tuohy deliver up to Anthony Tuohey possession of the piano in order that he may deal with it according to the will of Mercia Tuohey.

However, it is the plaintiff’s case in this proceeding that the proceedings in the Magistrates’ Court should not proceed at the suit of Anthony Tuohey, as executor of the will and trustee of the estate of Mercia Tuohey, as he should be removed from that position.

On behalf of the plaintiff in this proceeding it was submitted that the defendant, by not distributing the sum of $4,788.11, held by him as executor of the will and trustee of the estate of Patrick John Tuohey, to the beneficiaries’ of the will of Patrick John Tuohey and particularly a quarter share of the same, to each of the plaintiff and John Tuohey, but retaining such sum to fund the proceedings in the Magistrates’ Court to have determined the question whether the plaintiff Patrick Gerard Tuohey is the owner of the piano and entitled to possession of the same or whether Denise Rafton was given the piano by the will of her mother and entitled to possession of the same, the defendant had placed himself in a position of conflict between his position of executor of the will and estate of each of Mercia Tuohey and Patrick John Tuohey. It was submitted that by the defendant placing himself in that position he had demonstrated that he was unfit to continue as the executor or trustee of the will and estate of each of Mercia Tuohey and Patrick John Tuohey.

Further, it was submitted on behalf of the plaintiff that when regard is had to the evidence before this Court, as may be relied on to establish that Patrick John Tuohey gave the piano to his son, the plaintiff, which it is said on his behalf cannot be refuted, that it was imprudent and wasteful for the defendant, Anthony Tuohey, to commence and prosecute the proceedings in the Magistrates’ Court as such proceedings are doomed to fail. It was submitted that when regard is had to this matter together with the failure of the defendant, Anthony Tuohey, to consult with the beneficiaries of the estates of Mercia Tuohey and Patrick John Tuohey before such proceedings were instituted again demonstrates that the defendant, Anthony Tuohey, is unfit to be the executor of the will and trustee of the estate of each of Mercia Tuohey and Patrick John Tuohey. Further, it was submitted, that in the estate of Mercia Tuohey the Court should direct the defendant, Anthony Tuohey, that it was improper in the administration of the estate of Mercia Tuohey for the proceedings in the Magistrates’ Court to continue.

By the Originating Motion, in addition to the relief sought as already referred to, the plaintiff, Patrick Gerard Tuohey, sought orders and directions, inter alia, that the “Piano proceedings” are an imprudent proceeding on behalf of the estate of Mercia Tuohey, that such proceedings ought to be discontinued, that the estate of Mercia Tuohey ought not bear the costs of such proceedings and that the executor and trustee of the estate of Mercia Tuohey seek an indemnity from Denise Rafton, for such proceedings.

Further, it was submitted that by the defendant, Anthony Tuohey, retaining in the estate of Patrick John Tuohey the sum of $4,788.11 and not distributing that sum among the beneficiaries of that estate, and by not consulting the beneficiaries of the estate before commencing the proceedings in the Magistrates’ Court the defendant, Anthony Tuohey, had sided with Denise Rafton against the plaintiff, Patrick Gerard Tuohey, against whom he had instituted and sought to prosecute proceedings which were doomed to fail and that by those acts and omissions the defendant, Anthony Tuohey, had demonstrated that he was unfit to be the executor of the wills and trustee of the estates of each of Mercia Tuohey and Patrick John Tuohey.

Further, it was submitted on behalf of the plaintiff, Patrick Gerard Tuohey, that as the estate of Mercia Tuohey had been distributed to Patrick John Tuohey as the beneficiary of that estate he could not have been compelled to refund the amount received by him to the executor of the will of Mercia Tuohey and, therefore, in such circumstances the defendant, Anthony Tuohey, had no entitlement to retain funds from the estate of Patrick John Tuohey to fund the proceedings in the Magistrates’ Court. As previously referred to the sum of money sent by the solicitors, Dwyer & Co, to John Patrick Tuohey by letter dated 7 November 1996 was $3,204.32. It was submitted that at least there was sufficient doubt as to the ability of the defendant, Anthony Tuohy, to use a sum equivalent to that received by John Patrick Tuohey from the estate of Marcia Tuohey, to fund the proceedings in the Magistrates’ Court, without first consulting the beneficiaries of the estate of John Patrick Tuohey, rather than requiring Denise Rafton to be responsible for the costs of these proceedings, as to demonstrate that the defendant, Anthony Tuohey was unfit to be the executor of the wills and trustee of the estates of each of Mercia Tuohey and John Patrick Tuohey.

Further, it was submitted on behalf of the plaintiff that the defendant could not merely adopt the attitude that he was “doing his duty” as executor of the will and trustee of the estate of Mercia Tuohey in instituting and prosecuting the proceedings in the Magistrates’ Court against the plaintiff, Patrick Gerard Tuohey. It was submitted that the defendant, Anthony John Tuohey, was obliged to consider before commencing such proceedings whether there existed a reasonable prospect of success in such proceedings and that if he had properly considered that question or been advised as to the same, the proceedings should not have been instituted and the moneys held by the defendant, Anthony Tuohey as executor of the will and trustee of the estate of Patrick John Tuohey, being the sum of $4,788.11, should have been distributed among the beneficiaries of the estate.

On behalf of the defendant it was submitted that in this proceeding the question of the ownership and the right to possession of the piano can not and should not be determined. This matter was not disputed or put in issue on behalf of the plaintiff, Patrick Gerard Tuohey. It was submitted on behalf of the defendant that in the administration of the estate of Mercia Tuohey, on the question having arisen, as to the ownership of the piano, that is whether it was owned by Mercia Tuohey at her death and given by her will to Denise Rafton or whether at that time it was owned by the plaintiff, Patrick Gerard Tuohey, that having regard to the value of the piano, the manner and forum in which such issues could best be determined, were in the proceedings as issued by the defendant in the Magistrates’ Court. It was submitted that by such proceedings the defendant, Anthony Tuohey, as executor of the will of the deceased Mercia Tuohey and as trustee of her estate, was doing no more than performing his duty to “get in” the assets of the estate in circumstances where Patrick Gerard Tuohey resisted the endeavours of Anthony Tuohey to have him deliver up possession of the piano to him. It was submitted on the material before the Court that it could not be said that the proceedings in the Magistrates’ Court were of a nature that could be classified as being fruitless and, in such circumstances, it should not be held that by instituting and prosecuting such proceedings the defendant, Anthony Tuohey, was unfit to be the executor of the will and/or trustee of the estate of Mercia Tuohey. It was submitted that, when, in the circumstances of this case, regard is had to the amount or size of assets of the estate of Mercia Tuohey, the fact that Anthony Tuohey had not obtained an indemnity from Denise Rafton for the costs of the Magistrates’ Court proceedings, before issuing the proceedings, and he may not have been obliged to issue such proceedings, it should not be held that by issuing and prosecuting such proceedings he is unfit to be the executor of the will and/or trustee of the estate of Mercia Tuohey. It was submitted that this was particularly so when, as it now appears in this proceeding, Denise Rafton has sworn that she is prepared to indemnify Anthony Tuohey against the costs incurred by him in the conduct of such proceedings. It was submitted on behalf of Anthony Tuohey that, as the personal representative of Mercia Tuohey, there was no obligation on him to obtain the consent of the beneficiaries of either estate before issuing the proceedings. Although counsel for the plaintiff, John Gerard Tuohey, accepted the proposition that, as a matter of principle, a personal representative of an estate did not need to obtain the consent of beneficiaries before bringing legal proceedings relevant to the estate, she submitted as previously referred to that, in the circumstances of this case, consent should have been obtained by the defendant, Anthony Tuohey, before commencing the Magistrates’ Court proceedings.

It was further submitted on behalf of the defendant, Anthony Tuohey, that, on the evidence before this Court, it was established that from the estate of Mercia Tuohey there had come into the hands of Patrick John Tuohey, the executor of her estate as named in her will, the total sum of $5,342.32 which after the payment of funeral expenses, fees and legal expenses there remained $3,204.32 with respect to which his solicitors, Dwyer & Co, accounted to him. It was submitted that, as is now apparent, there then existed a dispute concerning the ownership of and right to possession of the piano, which gave rise to a contingent liability in the estate of Mercia Tuohey in relation to costs and expenses to resolve or have determined that dispute. It was submitted that in such circumstances that have occurred, the obligation to resolve or have determined that dispute passed to Anthony Tuohey on him obtaining a grant of probate of the will of each of Mercia Tuohey and Patrick John Tuohey and, when considering the fact that the dispute was between siblings, it was reasonable for Anthony Tuohey to not distribute this sum but retain it in the event that he was entitled to be indemnified by the estate of Patrick John Tuohey against costs incurred by him in the Magistrates’ Court proceedings. It was submitted that Anthony Tuohey acted in good faith and for real or genuine reasons in not distributing this sum, that it did not cause him to be in a position of conflict as between the two estates and, further, it gave rise to no matter which should cause the Court to hold that Anthony Tuohey is unfit to be the executor and/or trustee of the will or estate of either or both Mercia Tuohey or Patrick John Tuohey. It was submitted that on the material before this Court the Court should not make an order as sought by Patrick Gerard Tuohey removing Anthony Tuohey from his position as executor of the will and/or trustee of the estate of either or both of Mercia Tuohey and Patrick John Tuohey. It was submitted that, in the circumstances as revealed by the evidence in this case, Anthony Tuohey had no other real or reasonable choice, but to issue the proceedings in the Magistrates’ Court, that he did so for bona fide reasons, and in good faith, and that by selecting such a forum to have the dispute determined he chose the least expensive forum in which the dispute could be determined and that, having regard to all the circumstances, the proceedings of the plaintiff should be dismissed.

These proceedings provide sad if not tragic testimony of how the very fabric of a family relationship which should bind members of a family together to give to each other support and comfort as each encounters the vicissitudes of life, can be torn apart when a dispute arises as to the distribution of the estate of a deceased relative or parent particularly when the object of the dispute is an article or property of small value.

Section 34(1)(c) of the Administration and Probate Act 1958 vests in the Court the discretionary power to discharge or remove an executor to whom probate has been granted in circumstances where after the grant the executor “is unfit to act in such office”. Where the Court by order discharges or removes such executor, the Court may by order appoint some proper person or trustee company as administrator in place of the executor so removed or discharged. Pursuant to s. 48(1) of the Trustee Act 1958 the Court is vested with power to make an order appointing a new trustee in substitution for an existing trustee. It is in reliance on these provisions that the plaintiff in this proceeding seeks orders with respect to each of the estates of Mercia Tuohey and Patrick John Tuohey discharging or removing Anthony Tuohey as the executor and the appointment of a new trustee in substitution for Anthony Tuohey.

In Monty v Delmo[3] Ashley J addressed the question as to what “unfitness” means within the context of s. 34(1)(c) of the Administration and Probate Act. His Honour reviewed a number of decisions of this Court dealing with this subject, commencing with in re Turner[4]. In that case Weigall A-J held that “unfit” within the meaning of s. 8(1) of the Administration and Probate Act 1915 was to be treated as referring to unfitness occasioned by some disqualification as an adjudication of bankruptcy or a conviction for a felony, but not unfitness occasioned by breach or neglect of duty. In Monty v Delmo, Ashley J, having reviewed the decisions cited by him, put to one side when “considering principle” the decision in Re Whitchurch[5] and at p. 73 said:

“… the few cases which have directly raised the interpretation of s.34(1)(c) all involved misconduct or neglect of duty by the executor in the period between grant of probate and application for removal. The misconduct or neglect was constituted by matters such as unwarranted delay in administration of the estate, failure to communicate with beneficiaries, failure to account, and unreasonable delay in paying beneficiaries their entitlement. Turner apart, the authorities are consistent in holding that unfitness is demonstrated by the presence of such a factor. I find it impossible to accept that serious dereliction of duty as an executor does not make that person unfit to hold the office. 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. In consequence, in my respectful opinion, the restrictive construction advanced in Turner must be rejected; although (subject to any statutory provisions to contrary effect) the matters falling within that narrow construction would also constitute unfitness.”

[3][1996] 1 VR 65.

[4][1923] VLR 189.

[5][1990] VR 719.

His Honour thereafter addressed the question whether “unfitness to act” does comprehend a situation in which an executor has a conflict of duty and interest in carrying out his executorial duties.

In the case before his Honour the asserted unfitness of the executor was based on the proposition that if and when the executor continued with his duties he would be faced with and obliged to resolve a conflict of duty and a personal interest concerning a debt which he claimed was due to him from the estate, the resolution of which was said to impact adversely on the other residual beneficiary.

His Honour held at p. 82 “that unfitness to act does comprehend a situation in which an executor has a conflict of duty and interest in carrying out his executorial duties”. One reason for reaching that conclusion as stated at p. 82 is that where it is accepted that there exists a “close connection in the offices of executors and trustees” it is clear that the Court may in exercise of its inherent jurisdiction remove a trustee where there is a conflict of duty and interest. The other eight considerations which led his Honour to that conclusion are set out at p. 82-83. I do not set the same out in this judgment.

At p. 83 his Honour further said:

“It is not every conflict of duty and interest which should result in removal of an executor. The intention of the testator that the executor be a particular person should not lightly be set aside – whether before or after the grant.”

At p. 75 of his judgment his Honour said that such selection “should not be disregarded except at least for serious reasons”.

In this case it is not contended that Anthony Tuohey has any conflict between any personal interest he has in either estate and the performance of his duties as executor and/or trustee of the estates. On the evidence, is it not demonstrated that such conflict exists or may exist. Rather that contended on behalf of the plaintiff, Patrick Gerard Tuohey, is that by not distributing among the residuary beneficiaries of the estate of Patrick John Tuohey the sum of $4,788.11, but retaining it to meet any costs that may be incurred by him in the Magistrates’ Court proceedings in seeking to have resolved, in the administration of the estate of Mercia Tuohey, the previously referred to issue, there exists a conflict which Anthony Tuohey has in exercising his duties as executor of the wills of each deceased and trustee of each of their estates.

It is to be observed that in the will of each of Mercia Tuohey and Patrick John Tuohey which were each made on the same day and in the presence of each other each deceased named the other as the executor of her and his respective will, but provided that in the event of the other predeceasing her or him or dying while their respective estates remained “undistributed” they each appointed John Thomas Tuohey and Anthony Tuohey as executors of their respective wills. It was these respective provisions which provided the foundation for the grant of probate to Anthony Tuohey in respect of each will and the order being made in the form referred to. The selection of Anthony Tuohey as an executor in her and his will by each of Mercia Tuohey and Patrick John Tuohey should not be disregarded and should not be lightly put aside.

With respect to the basis of the conflict asserted by Patrick Gerard Tuohey in this case, account must also be taken of that deposed to by Anthony Tuohey in his affidavit that he has been willing to underwrite the estate’s costs of and incidental to the proceedings brought in the Magistrates’ Court in the first event and that in the first event he would be primarily and personally liable for the costs of those proceedings subject to exercising any right of indemnity that he may have against the sum of $4,788.11 retained and not distributed in the estate of Patrick John Tuohey. Anthony Tuohey was not cross-examined on his affidavit filed in this proceeding. Having reviewed the evidence before the Court and having regard to the fact that numerous matters deposed to have been challenged in my view there exists no good reason why I should not accept this evidence of Anthony Tuohey, which I do. From this it would appear that in order to resolve and have determined the issue in the administration of the estate of Mercia Tuohey as to who is entitled to the ownership and possession of the piano, Anthony Tuohey has been prepared to personally bear and expose himself to the costs of the Magistrates’ Court proceedings, reserving to himself any right that he may have to be indemnified from the small sum of monies presently held and not distributed in the estate of Patrick John Tuohey. I am satisfied that Anthony Tuohey commenced the proceedings in the Magistrates’ Court and has sought to prosecute the same in an endeavour to have these issues determined and that in doing so he acted bona fide.

It is the contention of Patrick Gerard Tuohey in substance that Anthony Tuohey has no right in the administration of the estate of Mercia Tuohey to use, or have resort to or be indemnified against, any costs thereby incurred from that sum of money. It is in part put on behalf of the plaintiff that in such circumstances by Anthony Tuohey failing to distribute that sum to the residuary beneficiaries of the estate of Patrick John Tuohey, of which Patrick Gerard Tuohey would be entitled to $1,197.02, that Anthony Tuohey has demonstrated that he is unfit to be executor of each estate. It is contended on behalf of the plaintiff that as executor of the will of the estate of Patrick John Tuohey and trustee of his estate, Anthony Tuohey had a general duty to pay and distribute this money among the residuary beneficiaries of this will.[6] Further, as referred, it was submitted on behalf of the plaintiff that Patrick John Tuohey had received as beneficiary of the will of Mercia Tuohey the sum of $3,204.32 and having so received it as beneficiary of that will he had no obligation to repay it to the estate of Mercia Tuohey and in such circumstances the sum of $4,788.11 could not and did not in any part represent moneys forming and being part of the estate of Mercia Tuohey.
[6]Jacobs Law of Trusts in Australia 6^th Ed, para 1735.

In McCreadie, Wills Probate and the Administration of Deceased’s Estates in Victoria 2^nd Ed at para 1001 the learned author states:

“As a general rule, the beneficiaries to whom assets have been properly distributed cannot be compelled to refund those assets to the personal representative to meet outstanding liabilities of the estate.”

The author however identified “two exceptions” to that general rule.

Following the death of Mercia Tuohey, it was the solicitors for Patrick John Tuohey, the executor named in her will, who attended to the administration of the simple estate on his behalf and after collecting the small amount held in bank accounts by Mercia Tuohey and attending to the meeting of expenses including the payment of the account of the funeral director and deducting $300.00 for costs accounted to Patrick John Tuohey for the sum of $3,204.32. At that time, as appears from the letter of the solicitors to Patrick John Tuohey, it was not known by them, as solicitors for Patrick John Tuohey, that Patrick Gerard Tuohey claimed absolute ownership of the piano and the right to possession of the same, although from the evidence now before the Court it appears that such was the position at the date of the death of Mercia Tuohey on 19 August 1996. It further appears from evidence before this Court that Patrick John Tuohey received from his solicitors their letter dated 7 November 1996 which was written within the “executors year” that he had on 29 March 1996 made the aforesaid declaration in the presence of Helen Gartland, that he had given the piano to Patrick Gerard Tuohey. From the letter of the solicitors it does not appear that they were aware of any fact which should cause the disposition of the piano as provided by the will of Mercia Tuohey not being carried out. The circumstances in which Patrick John Tuohey made that declaration are not apparent on the evidence before this Court. However, on the face of the declaration, the will of the deceased Mercia Tuohey, and the letter of the solicitors to Patrick John Tuohey, it ought to have been reasonably understood by him that there existed a reasonable likelihood that there would need to be resolved the issue as to who owned the piano and whether the will of Mercia Tuohey effected a disposition of it to Denise Rafton. In the circumstances and having regard to what has occurred, as is apparent from the evidence in this case, it ought to have been appreciated by Patrick John Tuohey that the resolution of such matter was not likely to be simple, and that it was likely to cause him, as the executor named in the will of Mercia Tuohey, to incur costs. In such circumstances there existed a contingent liability in the estate of Mercia Tuohey to meet the costs which were likely to be incurred in having this matter either resolved or determined in proceedings undertaken by Patrick John Tuohey, which would probably have necessitated further costs being expended to obtain a grant of Probate.

In my opinion the accounting of the solicitor to Patrick John Tuohey of the sum of $3,204.32 is not to be properly regarded as a “distribution” of part of the estate of Mercia Tuohey to Patrick John Tuohey as residuary beneficiary of the estate, but rather it constituted an accounting of the solicitor for the executor named in the will to the executor for that sum. In such circumstances Patrick John Tuohey was required to hold that sum, pending the resolution or determination of the dispute concerning the ownership and right to possession of the piano, as trustee for the estate of Mercia Tuohey. As that dispute had not been resolved at the death of Patrick John Tuohey, his estate was required to account for the same to the estate of Mercia Tuohey.

It is to be noted that it appears from the evidence, that Anthony Tuohey has not had resort to the sum of $4,788.11, but rather it is held at this time, as a fund, should he seek to be indemnified for costs that he may incur in or arising out of the Magistrates’ Court proceedings.

To the extent that there is held by Anthony Tuohey a sum in excess of $3,204.32 for that purpose, namely, the sum of $1,583.79 the interest in that sum which the plaintiff, John Gerard Tuohey, has, as a residuary beneficiary of the estate of Patrick John Tuohey, is one quarter of that, namely, $395.95. To the extent that the plaintiff claims that the defendant is unfit to remain as executor of the will and trustee of the estate of Patrick John Tuohey because that sum has not been distributed to him, the fact that such sum has not been so distributed does not in my view constitute, in the circumstances of this case, any good reason why Anthony Tuohey should be removed from such offices. I do not propose to make a specific order or give a direction that distribution of the sum of $1,583.79 be effected, amongst those residuary beneficiaries of the estate of Patrick John Tuohey who seek to receive it, as I would expect that this matter would be attended to by Anthony Tuohey. If the plaintiff and/or John Tuohey seeks such final distribution from the estate of their father it should be made. Having regard to the contents of the affidavit of Denise Rafton I would expect that she would, at this time, not seek to recover that amount from the executor of the will of Patrick John Tuohey.

If I am in error as to the proper categorisation of the payment to Patrick John Tuohey of the sum of $3,204.32 and it amounted to a distribution of that sum to him as the residuary beneficiary of the estate of Mercia Tuohey, in the circumstances of this case it does not mean that Anthony Tuohey is not able to recover that sum from the estate of Patrick John Tuohey as executor of the will of Mercia Tuohey.

In Jervis v Wolferston[7] Sir George Jessel MR held:

“That whereas notice had by an executor of a remote contingent liability of a testator is not sufficient to cause the executor from distributing the testator’s residuary estate, if the estate is distributed with that notice and liability ripens into a debt the executor is able to call upon the residuary legatee to refund the amount distributed.”

[7](1874) LR 18 Eq 18.

In Whitaker v Kershaw[8] Cotton LJ at p.325, after stating that “if an executor pays money to the residuary legatee with knowledge of a debt and he is afterwards obliged to pay that debt, he no doubt cannot call on the residuary legatee to refund….”, and after referring to the decision of Jessel MR in Jervis v Wolferston he said, “Now it was held by Jessel MR, … that notice of a liability when the executor pays over a residue does not take away his right to make the residuary legatee refund it if afterwards it becomes a debt. It is true that the Master of the Rolls speaks of the shadowy nature of the liability in that case; but he does not proceed on that, he goes on the principle that notice of a mere liability is not enough, there must be notice of a debt… The Shadowy nature of the claim was not the principle of the decision of the Master of the Rolls. The principle was that where there is no notice of a debt the executor does not lose his right to recover”. See also Fry LJ at p. 329.
[8](1890) 45 Ch.D 320.

In Jeffrey v Webster[9] Hodges J applying Jervis v Wolferston held that the liability of an estate to indemnify a trustee did not apply only to debts which existed at the time when a settlement was made and the trustee accepted the trust but also applied to debts which were incurred because of acts done pursuant to the trust and which was the trustees duty to do.
[9](1895) 1 ALR 65.

At the time that Patrick John Tuohey, as the residuary beneficiary of the will of Mercia Tuohey, took to himself the residue of the estate of Mercia Tuohey, if that is the way in which his receipt of the sum of $3,204.32 should be properly categorised, there existed no debt owing by the estate. However, at that time there existed circumstances which were likely, in the future, to need the expenditure of money on behalf of the estate to resolve and/or have determined the issue as to the ownership of the piano and the right to possession of the same. At the time that Anthony Tuohey obtained a grant of probate of the wills of each of Mercia Tuohey and Patrick John Tuohey this contingent liability in the estate of Mercia Tuohey had not then become a debt against the estate of Mercia Tuohey. However, it was far more likely that there would be created by the actions of Anthony Tuohey, as executor of the will and trustee of the estate of Mercia Tuohey, such a debt, as he sought to have determined the issue of ownership of and right to possession of the piano. On the evidence it is clear that this dispute could not be resolved without taking proceedings of the nature taken by him in the Magistrates’ Court. That such was the fact is evidenced by the very proceedings now before this Court and instituted by John Gerard Tuohey.

On the evidentiary material before the Court and to which I have referred, I conclude that Anthony Tuohey instituted the Magistrates’ Court proceedings for bona fide reasons in an endeavour to resolve the issue as to the ownership of and right to possession of the piano which was an issue which arose directly by him endeavouring to get in the estate of Mercia Tuohey. I am of the view that otherwise he would not have instituted such a proceeding and exposed himself to the costs of the same, merely for some ulterior motive. Such proceedings can not properly be regarded as hopeless and without any chance of success. For the reasons previously expressed the Magistrates’ Court has jurisdiction to hear and determine the same whether the proceeding is determined by way of arbitration or otherwise on a full trial.

Anthony Tuohey took advice as to the appropriate court in which the proceedings should be issued. The advice, having regard to the value of the chattel in dispute, was sound advice. After “getting in” and making a distribution in the estate of Patrick John Tuohey, as referred to, there remains in the hands of Anthony the sum of $1,583.79 which small amount exceeded the amount received by Patrick John Toohey as residuary beneficiary of the estate of Mercia Tuohey. In consequence of the actions taken by Anthony Tuohey in seeking to have determined the dispute of the ownership and right to possession of the piano, which actions, in my view, were appropriate and proper for him to take in the circumstances with which he was faced as executor of the will of Mercia Tuohey, there exists a real likelihood that a debt will be or has been incurred in the proper administration of the estate of Mercia Tuohey, which was merely contingent at the time that Patrick John Tuohey received the residue of his wife’s estate. In such circumstances there exists a very real likelihood that Anthony Tuohey, as executor of the will of Mercia Tuohey, will be able to recover the sum of at least $3,204.32 from the estate of Patrick John Tuohey.

It is my view that in such circumstances it was proper and prudent for Anthony John Tuohy to retain in the estate of Patrick John Tuohey the sum of $3,204.32. By retaining that sum, for the purposes to which I referred earlier, no conflict arises in the positions held by Anthony Tuohey as the executor of the wills and/or trustee of the estate of each of his parents. As to the sum of $1,583.79 previously referred to, Anthony Tuohey, as executor of the will and trustee of the estate of Patrick John Tuohey, should distribute that sum or offer to distribute it among the residual beneficiaries of that estate.

No act or omission or conduct of Anthony Tuohey as executor of the will of or as trustee of the estate of either or both of Mercia Tuohey and Patrick John Tuohey leads me to the conclusion that in exercise of the Court’s discretion it should be ordered that he be removed from any of such positions. On the evidence before the Court I have reached the conclusion that Anthony Tuohey has acted properly in the aforesaid offices, that he holds, in seeking to have determined the question of the ownership and right to possession of the piano, when Denise Rafton, the named beneficiary in the will of her mother claims to be entitled to the ownership and right to possession of it and Patrick Gerard Tuohey claims that at the time of his mother’s death she did not have ownership of the piano as it had been given to him by his father.

In my view there exists no conflict nor has there existed any conflict in the offices held by Anthony Tuohey as executor of the will and trustee of the estates of Mercia Tuohey and John Patrick Tuohey. The fact that Anthony Tuohey has not distributed the sum of $1,583.79 among the four residual beneficiaries of the estate of Patrick John Tuohey does not, in the circumstances of this case, constitute an omission on his behalf which would warrant that he be removed from the office of executor of the will and/or trustee of the estate of Patrick John Tuohey.

I have also concluded that I should give no directions or make orders as sought by the plaintiff, Patrick Gerard Tuohey, with respect to the Magistrates’ Court proceedings or otherwise sought by him by Originating Motion.

Throughout this trial I sought to find a way to determine the issue as to the ownership and right to possession of the piano on this trial. Regretfully I could find no way for this to be done.

For the reasons expressed, the plaintiff’s applications for orders and relief as sought by his Originating Motion in respect of the estate of each of Mercia Tuohey and Patrick John Tuohey fail, and the proceedings of the plaintiff must be dismissed.

The order of the court is that the proceedings of the plaintiff be dismissed.

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[2002] VSC 180

8 May 2002