Australian Securities Commission v Aust-Home Investments Ltd

Some Further Background

1. Before dealing with these motions, some supplementary history should be recorded. The deceased died suddenly and tragically in a motorcycle accident on 9 September 2013. He left assets in New South Wales, all moveable property, which have been the subject of the estate's administration. The deceased was not married and had no children. His closest surviving relatives were his father and his sister, both still residents of his native land, Hungary.
2. The deceased's personal effects only had a value for probate purposes of less than about $35,000. But he was entitled to a death benefit under the Host PLUS Superannuation Fund of which he was a member, as an employee within the hospitality industry. The death benefit payable upon his death from that superannuation fund was a sum slightly in excess of $230,000.
3. The earlier contests in these proceedings centred around two instruments that were the subject of the applications for probate by Messrs Boskovitz. The first is an instrument of 25 May 2013 (sometimes referred to in these reasons as "the first Will") and the second an instrument of 13 July 2013 (sometimes described as "the second Will").
4. Shortly after the deceased's death on 9 September, and on or about 18 September Messrs Boskovitz claimed to Mr Kristofferson and Ms Katalin Borbely, as Ms D'Arney then was known, that a document bearing the date 25 May 2013 and the purported signature of the deceased was his final Will. The 25 May 2013 instrument was in the form of a printed form completed in handwriting which, on its face, appointed Mr Anthony Boskovitz and Mr Gabor Leslie Boskovitz as the deceased's executors.
5. The 25 May 2013 instrument had apparently been witnessed by two persons in the presence of the deceased and of each other. It gave 75 per cent of the estate of the deceased to the second plaintiff Csilla Melegh and the other 25 per cent to one Michael Major, who has been described in these proceedings as an investment advisor to the deceased.
6. On 12 November 2013 Messrs Boskovitz filed a probate application as solicitor-executors seeking a grant of probate for the 25 May 2013 instrument. But the first probate application did not proceed, in circumstances and for reasons that Mr Gabor Boskovitz describes in his affidavit sworn on 6 May 2016 and which are detailed later in these reasons.
7. But on 20 December 2013 Messrs Boskovitz propounded a later instrument as the last Will of the deceased, one bearing date 13 July 2013 and which also purported to be signed by the deceased as his final Will.
8. This purported second Will differed from the 25 May instrument in a number of respects. It purported to appoint Messrs Boskovitz as executors, but together this time with one Ian Chipchase, another solicitor. The 13 July 2013 instrument declared too that it was the last Will of the deceased. It revoked all prior testamentary instruments and stated that it was witnessed by two persons in the presence of the deceased and of each other. But on this occasion the estate was given to the third defendant, Brigitta Plosz, who was described in the instrument as the deceased's de facto partner.
9. In the Statement of Claim filed in these proceedings in August 2014, the plaintiff sets out in paragraphs 25, 26 and 27 a number of suspicious circumstances attending upon the 25 May 2013 and 13 July 2013 instruments. They are detailed and present in light of the subsequent handwriting expert evidence that the signature on both instruments was unlikely to be that of the deceased. Paragraphs 25, 26 and 27 provide as follows: "Suspicious circumstances concerning the 25 May 2013 instrument and the 13 July 2013 instrument 25. The creation, execution and production of the 25 May 2013 instrument and the 13 July 2013 instrument occurred in circumstances which are such that the Court cannot be satisfied that the 13 July 2013 instrument (in respect of which a grant of probate is sought by the First and Second Defendants) or the 25 May 2013 instrument (in respect of which a grant of probate might be sought by the First and Second Defendants if the 13 July 2013 instrument is pronounced against) is the last will (or any will) of the deceased including the circumstances identified in paragraphs 26 (13 July 2013 instrument) and 27 (25 May 2013 instrument) hereof. 26. The propounding of the 13 July 2013 instrument followed the propounding of a 25 May 2013 instrument which evoked suspicion for the reasons noted in paragraph 27 below. In addition, separately from the matters apparent from the 25 May 2013 instrument, the 13 July 2013 instrument: a. was produced from the custody of Michael Major after Csilla Melegh resisted his request that she enter confidentiality agreements in relation to the estate and the 25 May 2013 instrument and after Katalin Borbely, a long time friend of the deceased, questioned the authenticity of 25 May 2013 instrument; b. was produced from the custody of Michael Major about 5 days after the Supreme Court issued requisitions in relation to the application for probate of the 25 May 2013 instrument requiring inter alia, an affidavit from one of the attesting witnesses to the 25 May 2013 instrument; c. bore the purported signature of deceased which was markedly different from the signature on the deceased's passport and elsewhere and was, to the untrained eye, similar to the signature of Michael Major, a putative witness to the testator's execution of the 13 July 2013 instrument; d. was made on a printed form the origin of which unknown (but was seemingly the same as 25 May 2013 instrument); e. was completed in handwriting by a person or persons who have not been identified (but which, insofar as the substance of the 13 July 2013 instrument is concerned was seemingly the same as the handwriting in the 25 May 2013 instrument); f. was seemingly executed (if at all) in circumstances where it has not been shown or suggested that the testator had received legal advice (as is the case also in the 25 May 2013 instrument); g. was seemingly executed (if at all) in circumstances and at a place and time (or places and times) that are unexplained (as is the case also in the 25 May 2013 instrument); h. was seemingly executed (if at all) in circumstances where it has not been shown or suggested that the contents were explained to the testator (as is the case also in the 25 May 2013 instrument); i. identified an attesting witness as Ashley Rake who is not known to have been an associate of the deceased and has provided only scant evidence as to the circumstances of its creation and execution (as is the case also in the 25 May 2013 instrument); j. was produced on 25 November 2013 from the custody of Michael Major who is identified as a witness to the deceased's execution of the 13 July 2013 instrument and who: i. has provided no evidence as to its creation, execution or having come into and remained in his possession; ii. has provided no evidence as to how he overlooked it and the 25 May 2013 instrument and failed to mention to both Katalin Borbely and Viktoria Papp or either of them on 14 or 15 September 2013 when he met in person with them and others at 8/37 Penkivil Street Bondi and enquired of Katalin Borbely and Viktoria Papp as to whether the deceased was known to have made a will; iii. has provided no evidence as to how he overlooked it and the 25 May 2013 instrument and failed to mention to either of them on 17 September 2013 when he met in person with Katalin Borbely at 4/126 Francis Street Bondi and by telephone call with Csilla Melegh and enquired of them as to whether the deceased was known to have made a will; iv. has provided no evidence as to how he overlooked it and failed to mention it on 18 September 2013 when propounding the 25 May 2013 instrument to the executors and to The Supreme Court of New South Wales holding out also to Katalin Borbely and also to the Second Plaintiff (and later to her solicitor Peter Kristofferson in correspondence to him) as being the last will of the deceased notwithstanding; v. has provided no evidence as to how he overlooked it and failed to mention it on 27 October 2013 when he forwarded an email to the deceased's sister and principal beneficiary under the 25 May 2013 instrument informing her advising that the grant of probate of the 25 May 2013 instrument was delayed by the wait for the Coroner's issue of a death certificate; vi. has provided no evidence as to how he overlooked it and failed to mention it at all times from 9 September 2013 until 25 November 2013 when he produced the 13 July 2013 instrument to Stacks Goudkamp, the Law Firm; vii. has provided no evidence as to when and how the 13 July 2013 instrument came to his notice and why he produced it to Stacks Goudkamp, the Law Firm; viii. has declined or failed to enter into discussions with the deceased's family and representatives and legal representatives of the deceased's family in relation to the estate and his knowledge of the circumstances surrounding the 25 May 2013 instrument and or the 13 July 2013 instrument and his knowledge of assets in the estate; ix. has failed to even offer any explanation either directly to the deceased's family as to as (sic) why he has chosen not to enter into discussions with the deceased's family and representatives and legal representatives of the deceased's family in relation to the estate and his knowledge of the circumstances surrounding the 25 May 2013 instrument and or the 13 July 2013 instrument and his knowledge of assets in the estate; x. has provided no evidence and failed even to explain how he came to become a beneficiary under the 25 May 2013 instrument as to 25% of the estate and why he produced the 25 May 2013 to the First Defendant and the Second Defendant and then to The Supreme Court of New South Wales holding out also to Katalin Borbely and also to the Second Plaintiff (and later to her solicitor Peter Kristofferson in correspondence to him); xi. has provided no evidence and failed to explain even directly to the deceased's family as to as (sic) how and why he has selected out of the 2 will instruments that he has propounded at different times as being the final will and testamentary intentions of the deceased to the First Defendant and the Second Defendant; xii. has provided no evidence and failed even to explain how he resiled from his representations to Katalin Borbely and to Viktoria Papp and also subsequently by telephone that he would assist the Second Plaintiff obtain a grant of representation in relation to the estate of the deceased; xiii. additionally or in the alternative to the preceding paragraph, has provided no evidence and failed even to explain how he resiled from his representations to Katalin Borbely and to the Second Plaintiff and that he would have "our solicitors" the First Defendant and the Second-Defendant assist the Second Plaintiff obtain a grant of representation in relation to the estate of the deceased; k. identified Michael Major as an attesting witness but is propounded without evidence from Michael Major as to its due execution or the circumstances of its creation and execution; I. named executors and an alternative executor with whom the deceased had no prior association and no apparent reason to so nominate, m. referred to the First Defendant as "Gaby" an informal term of familiarity which suggest that the author of the insertions of the 13 July 2013 instrument had some familiarity with the solicitor-executor named as "Gaby" Boskovitz; n. named an alternate executor with no professed expertise in estates, wills or probate but rather one with specialist accreditation in personal injury and dispute resolution; o. named as alternate executor a solicitor from a firm which would, after the death of the deceased, be (apparently coincidental) instructed by Brigitta Plosz to propound a claim for compensation to relatives based on an asserted de facto relationship with the deceased; p. described Brigitta Plosz as the "de facto partner" of the deceased in circumstances where: i. neither the deceased nor Ms Plosz are known to have informed or otherwise demonstrated to any friend, family member or other person the existence of such a relationship; ii. where the untutored use of such an expression by the deceased is improbable; iii. it is probable that, in the context of making a claim for compensation to relatives based on an asserted de facto relationship, Brigitta Plosz was at the time the 13 July 2013 instrument produced likely to be seeking evidence to establish the existence of a de facto relationship. q. was produced to the alternate executor (rather than the primary executors) on 25/11/2013 from the possession of Michael Major who: i. had, on his earlier and then unretracted assertions, presented an earlier and different "will" to the 13 July 2013 instrument to different solicitors as the last will of the deceased, ii. had sought but failed to secure the entry, by the First Plaintiff (the principal beneficiary under the earlier "will") into a needless "confidentiality agreements"; iii. was assisting the beneficiary under the 13 July 2013 instrument in prosecuting claims for compensation on the basis that she had been the de facto partner of the deceased at the time of his death; r. was furnished to the named executors (who had notice of the suspicious circumstances herein identified) by the alternate executor, it having been provided to the alternate executor by Michael Major without notice to the primary executors to whom Michael Major had already furnished the 25 May 2013 instrument; s. was provided by the named executors to the solicitor for the family of the deceased (the Cross-Claimants), Peter Kristofferson on 20 December 2013 in response to a letter of 19 December 2013 with the bare explanation: "We advise that a subsequent Will of the deceased has been forwarded to us by Stacks the Law Firm - copy enclosed' and without any indication that it had originated from the custody of Michael Major or when it had come to the notice of Mr Major or the executors, notwithstanding that on 25 November 2013 the executors had responded to queries raised by Kristofferson in relation to the 25 May 2013 instrument and was known to be proceeding under the misapprehension, reinforced by the executors letter of 25 November 2013, that the only "will" was the 25 May 2013 instrument; t. was in a form not dissimilar to the 25 May 2013 instrument which the executors had been informed by Ms Katalin Borbely was not the writing and signature of the deceased; and u. in the circumstances at sub-paragraphs 'a' to 't' above the First Defendant and the Second Defendant nevertheless saw fit to file an Application for Probate of the 13 July 2013 instrument. 27. The propounding of the 25 May 2013 instrument preceded the propounding of the 13 July 2013 instrument which evoked suspicion for the reasons noted in paragraph 26 above. In addition separately from the matters apparent from the 13 July 2013 instrument, the 25 May 2013 instrument: a. bore the purported signature of the deceased which was markedly different to the signature on the deceased's passport and elsewhere; b. was made on printed form origin of which unknown (but which is seemingly the same as 13 July 2013 instrument); c. was completed in handwriting by a person or persons who have not been identified (but which is seemingly the same as the handwriting in the 13 July 2013 instrument); d. was seemingly executed (if at all) in circumstances where it has not been shown or suggested that the testator had received legal advice; e. was seemingly executed (if at all) in circumstances and at a place and time that are unexplained; f. was seemingly executed (if at all) in circumstances where it has not been shown or suggested that the contents were explained to the testator; g. identified as the attesting witnesses, Samuel Score and Alfred Lampron, each of whom were not known to have been associates of the deceased and have provided no substantive evidence as to circumstances of creation or execution; h. was produced on 18 September 2013 from the custody of Michael Major who, i. has provided no evidence as to its creation, execution or having come into and remained in his possession; ii. has provided no evidence as to how he overlooked and failed to mention it on 14 or 15 September 2013 when he met with Katalin Borbely and Viktoria Papp at 8/37 Penkivil Street Bondi and enquired as to whether the deceased was known to have made a will; iii. has provided no evidence as to how he overlooked it and failed to mention it on 17 September 2013 when he met with Katalin Borbely at 4/126 Francis Street Bondi and (by telephone) Csilla Melegh and again enquired of them as to whether the deceased was known to have made a will; iv. under the 25 May 2013 instrument was to receive a bequest of 25% of the estate; v. had demonstrated a past willingness or propensity to utilize or exploit the deceased by soliciting from the deceased and the deceased's self-managed superannuation fund money for investment in unproven and risky investments; vi. later asserted and may have asserted to the deceased that, in the absence of a will, an estate will revert to the State on intestacy; vii. later asserted and may have asserted to the deceased that a payment of 25% to an advisor/administrator was normal; viii. later asserted and may have asserted to the deceased that the bequest to Michael Major of 25% was appropriate because the estate was very complicated; ix. had, on his later assertions, witnessed a later and different will to the 25 May 2013 instrument; x. had at that time, on his later assertions, in his possession a later and different will of the deceased; xi. had sought but failed to secure the entry, by the principal beneficiary, (the Second Plaintiff) and Katalin Borbely into needless "confidentiality agreements"; xii. has declined or failed to enter into discussions with representatives of the deceased's family in relation to the estate and the 25 May 2013 instrument and the 13 July 2013 instrument; i. named executors with whom the deceased had no prior association and no apparent reason to so nominate; j. referred to the First Defendant as "Gaby" an informal term of familiarity which suggest that the author of the insertions of the 25 May 2013 instrument had some familiarity with the First Defendant; and k. was produced to a long time friend of the deceased, Ms Katalin Borbely, on 18 September 2013 at which time Ms Borbely immediately stated that the writing and signature did not appear to be that of the deceased."
10. Not least among these suspicious circumstances is the fact that it is uncontested on all sides that the named executors, Messrs Boskovitz were unknown to the deceased at any time before his death. And the quick change between the two instruments was very odd so soon after an affidavit was sought from the attesting witnesses to the first Will. And in the first Will the deceased gave most of his property to family members, but in the second to someone who was described as a de facto partner, not mentioned in the first Will with all the family members being left out of the second Will.
11. Mr Gabor Boskovitz throws some light as to what was happening behind the scenes. He says that Mr Major and Ms Borbely attended his office in September 2013 and gave him what he describes as the 25 May 2013 instrument. He explains that Mr Major had been a client of his and that Ms Borbely was introduced to him for the first time as having been a flatmate of the deceased. This contact apparently came through Mr Major.
12. He took steps to go to the residence of Ms Plosz and the deceased to collect the deceased's belongings. He made telephone calls to Csilla Melegh, the deceased's sister, and received instructions from her in Hungarian about the disposition of jewellery and about some other items of estate administration.
13. Mr Gabor Boskovitz deposes to having received an email on 18 September 2013 from Csilla Melegh. Among other things this email says: "Dear Mr Boskovitz, 'This is Csilla Melegh, Akos Melegh's sister. Thank you for your time today. However, I have a few questions: I wish to clarify the authenticity of the Will. Are you legally authorised to do so?'".
14. Although Mr Boskovitz had apparently been named as one of the executors by the Will that was extant at that time, the 25 May instrument, it was clear from this email that the deceased's sister was keen to get an understanding about whether or not that Will was indeed authentic.
15. This together with the other circumstances identified in paragraphs 25, 26 and 27 of the Statement of Claim should have alerted Mr Boskovitz to the fact that complete and thorough inquiries should be made about the provenance, authenticity and execution of the Will. Relatives were concerned about the authenticity of the Will.
16. Mr Anthony Boskovitz attended at the residence of the deceased and collected assets. Mr Gabor Boskovitz and Mr Anthony Boskovitz took steps that executors normally would with the assistance of Mr Major to collect, gather assets and to sell them, to arrange for the cremation of the deceased and sending of his ashes to Hungary. But before a grant of probate they were acting as executors de son tort. Mr Anthony and Mr Gabor Boskovitz advertised their intention to apply for probate and filed a summons for probate in November 2013.
17. But shortly after filing the Summons for probate Mr Boskovitz received a requisition on 20 November from the Probate Registry of this Court to file an affidavit by one of the attesting witness as to the due execution of the Will.
18. Mr Boskovitz sent a letter on 21 November to each of the attesting witnesses of the first Will, seeking an affidavit from them as to due execution of the first Will by the deceased.
19. Neither of these letters was answered. Instead on 26 November 2013 Mr Boskovitz received advice from Messrs Stacks Goudkamp that they had in their possession another Will dated July 2013, indeed the 13 July 2013 instrument.
20. Messrs Boskovitz received the 13 July 2013 instrument on 5 December 2013 and on 19 December 2013 they re-advertised their intention to apply for probate of the new instrument.
21. Shortly thereafter, Mr Boskovitz received another requisition from the Court. It drew to his attention that a caveat had been lodged in the matter on 30 December 2013. The requisition of 10 April 2014 informed him of the Caveat and requested an affidavit by an attesting witness to the second Will.
22. There were said to be two attesting witnesses to the second Will. One was a Mr Ashley Rake. An affidavit was obtained from him. The other was Michael Major. Although Mr Major was known to Messrs Boskovitz, he did not provide an affidavit of attesting witness from him. Mr Boskovitz says that as a result of his receiving these documents which included an affidavit of Ms Plosz herself he believed the second Will was signed by the deceased.
23. This brought the matter into early 2014. Soon after the various motions already identified were filed.
24. This is sufficient general background to deal with the motions now before the Court. First, the Court will deal with the claim for commission. This is brought under the Boskovitzs' Motion of 23 March this year.

(1) The Claim for Commission

1. Messrs Boskoviz make their claim for commission under Probate and Administration Act 1898, s 86(1), which provides: "86 Executors etc may be allowed commission (1) The Court may allow out of the assets of any deceased person to the deceased person's executor, administrator, or trustee for the time being, in passing the accounts relating to the estate of the deceased person, such commission or percentage for the executor's, administrator's or trustee's pains and trouble as is just and reasonable, and subject to such notices (if any) as the Court may direct."
2. The Court has considered the operation of s 86 on many occasions. The parties referred the Court to one of my own decisions in the matter of Hawkins v Barkley-Brown & Anor [2010] NSWSC 48 (at [33]), which made the following observations about the structure of s 86(1): "The large estate argument seeks to constrain a power which is given in an unconstrained form by s 86(1). Section 86(1) says that the Court may allow out of the assets of the deceased "such commission or percentage for the executor's,…..pains and trouble as is just and reasonable" (emphasis added). This combination of words means that the "percentage" that is fixed by the Court is "for", that is it may bear a relationship to, the executor's "pains and trouble". The legislation itself contemplates that the percentage selected shall be selected by the Court because of the Court's assessment of the executor's "pains and trouble". The selection of a particular percentage (as distinct from some other percentage) is the way the legislation contemplates that the Court will recognise a proper relationship between the amount of "pains and trouble" of the executor and the amount received by the executor in compensation. Although Ms Barkley-Brown may argue that the relationship between percentages of the estate and "pains and trouble" lacks rigour, it is a relationship created by the very words of s 86(1)."
3. Section 86(1) permits the Court to allow out of the assets of the deceased a commission for the executors "pains and trouble as is just and reasonable". The percentage which is fixed should be related to the pains and trouble according to notions of what is just and reasonable. The decision whether or not to award commission is discretionary.
4. Messrs Boskovitz did occupy not inconsiderable time in collecting the deceased's moveable property. Mr Anthony Boskovitzs' affidavit shows that the total of sales of the items collected was some $2,780. These funds were expended on funeral expenses of $2,149, the costs of returning the deceased's ashes to Hungary of $206 and other Court related fees of $459, totalling $2,814.40. Therefore a slight shortfall resulted in the amount of money available from the sales proceeds to meet these expenses.
5. Messrs Boskovitz put their claim for commission on the basis that they are solicitors and that they were able to charge their full fees as solicitors. They estimate that they undertook 45 hours of work at $350 an hour, plus GST, and that their fees for all they did would actually be of the order of $17,325. But they submit that a percentage for commission, which gave them about $5,000 plus GST would be just and fair on account of the work they have done.
6. But two fundamental issues arise before such a commission award could be given. The first is, do they meet the threshold requirements for commission under s 86? The second issue is even if they do so qualify, would the Court exercise its discretion in their favour.
7. As to the first issue, Messrs Boskovitz's claim for commission does not qualify under s 86. The Court has a discretion under s 86 to allow out of the assets of the deceased person to an executor, administrator or trustee for the time being "in the passing of accounts relating to the estate of the deceased person", relevant commission [emphasis added].
8. A threshold for the operation of s 86 is that accounts are "passed". That does not simply mean the production of some informal documents setting out an estate balance sheet and sending them onto an administrator. The filing and passing of accounts is a formal process required by the Court under Probate and Administration Act, s 85 and in accordance with the rules of Court.
9. Messrs Boskovitz have not passed accounts under s 85. Nor have they applied to pass accounts. They do not qualify for commission under s 86. For this reason it is not necessary for the Court to consider whether Messrs Boskovitz would otherwise have qualified for commission, as they were only executors de son tort.
10. But they have not conducted themselves in a way that would entitle them to commission for several reasons. Firstly as to the accounts themselves, there is no doubt that Mr Anthony Boskovitz set out in his affidavit of 17 February 2016 an explanation of what estate assets were sold and how estate monies were received and expended. But even that account was incomplete. It did not, for example, deal with the sum of $3,000 which Mr Major had advanced to the estate. He was pressing for repayment of this sum from Ms D'Arney. Mr Kristofferson on behalf of the estate had been seeking information about these funds for some time.
11. Ms D'Arney had no idea where that money was until the Court ordered the production of documents which revealed that it was in the trust account of Messrs Boskovitz. The Court has now been told the money will be repaid to Mr Major, which will relieve Ms D'Arney from pressure from Mr Major for its repayment. But Mr Anthony Boskovitz's affidavit does not set out estate accounts in any conventional form. And the accounts were incomplete until the hearing on 6 May when the $3,000 was located.
12. In my view, this is not the conduct of executors who should be compensated for their pains and trouble. Their failure to provide full accounting information was not complete until 6 May, months after the appointment of Ms D'Arney on 22 February.
13. Another discretionary factor against the award of commission is the size of this estate and what has happened to deplete it. Whilst the Court is mindful that Messrs Boskovitz have done something to get in estate assets, the evolving financial position of this estate is one which can only be greatly disappointing to the father and sister of the deceased in Hungary who are entitled on intestacy. They must wonder how an estate worth $240,000 will, as a result of the various contests that have taken place in these proceedings, now only produce to them as beneficiaries, an amount between $50,000 and $70,000. This course of events is a source of considerable disquiet to the Court.
14. The size and depletion of the estate is not irrelevant to the exercise of the s 86 discretion. It is by no means the main reason why I deny commission but it is one of the factors the Court takes into account. Because of the rising costs of this estate, the Court has expressed its concern about that subject to the solicitor acting for Ms D'Arney, Mr Kristofferson. He has now undertaken not to charge any more fees to the estate beyond those that are already the subject of his costs affidavit, which, I may say in the circumstances is a laudable position to take. This will ensure something can be obtained from this estate for the deceased's relations in Hungary.
15. Another reason against awarding a commission is that Messrs Boskovitz did not conduct the administration of this estate in a way that would justify the award of commission as is just and reasonable.
16. The reasons for this are best examined by reference to the other two motions. The reasons for making the orders on the other two motions demonstrate that Messrs Boskovitz did inappropriately and unreasonably pursue proceedings on behalf of the estate to strike out a caveat and then a Statement of Claim, instead of investigating what should have been obvious: that there were seriously questionable features of the two purported Wills.

(2) The 9 July 2014 Motion

1. The Boskovitzs' 9 July motion was one to strike out the Caveat dated 30 June 2014 filed in the proceedings. On its face the Caveat raises a number of issues concerning the Will of 25 May 2013.
2. On 24 November 2014 Lindsay J reserved all questions of costs in these proceedings. His Honour by that order reserved costs on this motion and on the 26 September 2014 motion to which I will shortly come. I do not accept the submissions put on behalf of Messrs Boskovitz that Lindsay J did not reserve costs on these motions. Even if that were wrong, the cost of the motions have not been determined. They can be determined now.
3. The applicable law in this situation is that where a motion is undetermined and will not be resolved by contest before the Court, one or other party may apply for an order for costs. The Court has discretion to make a costs order either where defendants have consented to a grant of final relief, or if there is consensus as to the outcome of the proceedings. There is in this case consensus in the sense that no one wishes to pursue either of these unresolved motions and the Boskovitzs' abandoned their application for probate.
4. The applicable law is as stated by Hill J in Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194; 116 ALR 523 ("Aust-Home") and by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6 ("Lai Qin") at 264 - 265.
5. In Aust-Home Hill J said (at 201): "(1) Where neither party desires to proceed with litigation the court should be ready to facilitate the conclusion of the proceedings by making a cost order ... (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial ... This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (3) In determining the question of costs it would be appropriate, however, for the court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them. (4) In a particular case it might be appropriate for the court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation... (5) Where the proceedings terminate after interlocutory relief has been granted, the court may take into account the fact that that interlocutory relief has been granted ... [Footnotes omitted]".
6. In Lai Qin McHugh J said (at 264-265): "In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Latoudis v Casey (1990) 170 CLR 534; 97 ALR 45. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. Latoudis (1990) 170 CLR 534 at 543, 566-8; 97 ALR 45. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201; 116 ALR 523 at 530. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council ; Ex parte Raysun Pty Ltd [1971] QWN 13, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans. Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission Fed C of A, 10 February 1989, unreported, where his Honour ordered the respondent to pay 80% of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases. The critical question in this case then is whether or not the prosecutrix acted reasonably in bringing these proceedings and whether the respondents acted so unreasonably in not informing the prosecutor that an application to review the decision to refuse a visa was being considered that it would be proper for the minister to pay the whole or part of the cost of the proceedings. In determining whether or not the prosecutor acted reasonably, it is necessary to mention some further facts in the matter."
7. In general summary, a costs order can be made in these circumstances if it can be determined that one or other party would certainly have succeeded in the proceedings, or if one or other party has acted unreasonably in pursuing or defending the proceedings. Without entering upon the question of what would have been the outcome of these motions had they been heard, the Court can say that it was unreasonable for either motion to be brought by Messrs Boskovitz.
8. This is so for several reasons. First, rather than seeking to strike out the Caveat by motion within 1 week of the Caveat being filed as they did, the appropriate course for these named executors was first to do some basic investigation of the serious claims made in the Caveat. Messrs Boskovitz say in their defence that they had an affidavit from one of the attesting witnesses. But for the reasons set out in the Caveat or elaborated in the Statement of Claim filed later, there still was every reason to investigate the claims in the Caveat.
9. Secondly, Csilla Melegh had raised very early the issue of the authenticity of the first Will. Thirdly, there were objective factors concerning the Will that made it suspicious, as these reasons have already indicated. Fourthly, the fact that when information was sought about the first Will, there was no response from the attesting witnesses, and the second Will dated only a few weeks later was suddenly produced, should have raised real suspicions and prompted further investigations. Finally, the Caveat itself sets out detailed reasons to question both instruments. Those and other grounds are recorded in paragraphs 25, 26 and 27 of the Statement of Claim set out above.
10. In my view, the appropriate course therefore is to award costs of this motion against Messrs Boskovitz and I so order. I further order that in light of their conduct identified here that they not be permitted to recover from the estate those costs in their role as executors.

(3) The September 2014 Motion

1. The motion to strike out the Statement of Claim was filed on 26 September 2014, just over a month after the Statement of Claim was filed on 27 August 2014.
2. In my view, the same logic applies to the costs of this motion as applies to the motion to strike out the Caveat. The Lai Qin principles also apply. This motion is now not being proceeded with and there is consensus as to its outcome.
3. Any reading of paragraphs 25, 26 and 27 of the Statement of Claim should have caused persons in the position of Messrs Boskovitz to hesitate before seeking just to strike out the Statement of Claim. Instead some basic investigation as to whether any of those matters had substance was appropriate, before expending costs which would potentially reduce the quantum of the estate.
4. In relation to the costs of the strike out motions regarding the Caveat and the Statement of Claim, the Court's reasons infer that Messrs Boskovitz should not be indemnified out of estate assets for these orders for costs against them. They must pay the estate's costs of those motions. They should not be entitled to be indemnified for that cost liability out of the estate.

(4) The Claim for Costs of the Proceedings

1. The fourth application is the plaintiffs' application for the costs of, or part of, the proceedings.
2. The administrator's submissions for such an order for costs are set out in paragraph 27 of her submissions. The Court should not make such a costs order for several reasons. First, the Court does not know the relative proportion of the costs that have been incurred in the whole proceedings, as distinct from those incurred by the Boskovitzs.
3. Secondly, the Court has already made costs orders against Messrs Boskovitz in respect of the two motions they did not pursue. The Court is able to fix with some precision upon their conduct deserving of a costs order with respect to those motions. But that cannot be done with this general claim for costs.
4. Thirdly, it is difficult to apportion the costs of the proceedings that are referrable to the period of time when the Boskovitzs were involved as named executors up until November 2014, when they retired from that role.
5. Fourthly, even in that period it is very hard to determine to what extent, apart from the two motions that I have mentioned, Messrs Boskovitz prolonged the administration of the estate. They did not prolong the administration of the estate so far as the gathering of the deceased's effects and attending to his funeral and cremation expenses is concerned. I will not make the order sought.

A New Administrator

1. The final matter to be dealt with is a Notice of Motion filed on 6 May 2016 in which Mr Kristofferson now seeks to be made the administrator of the estate.
2. Ms D'Arney has indicated to the Court that she wishes to cease to act as administrator of the estate. She was appointed on 23 March this year. She has now contacted Mr Kristofferson, the solicitor for the estate, the second plaintiff, and the attorney for the deceased's father and sister. She has indicated to Mr Kristofferson that she has been pressed by Mr Major about the payment of moneys to him from the estate. She is concerned as a mother with a new baby about the pressures of having to deal with Mr Major and in dealing with the estate's liabilities. She would prefer not to continue.
3. When she consented to becoming an administrator she did not reasonably expect that it would be as onerous as it has turned out to be for her as a volunteer in the role.
4. Extensive inquiries took place previously about who could be an administrator of the estate. Ms D'Arney came forward. But there is no-one else who could be made an administrator.
5. Mr Kristofferson puts himself forward to be appointed the administrator. Ordinarily the Court would not appoint a person such as a solicitor acting for the estate to be an administrator. There is an obvious conflict of interest between a person charging fees to the estate and then authorising the doing of work that will incur those fees.
6. But in the very unusual circumstances of this case, I propose for several reasons to make that appointment. First, Mr Kristofferson has undertaken to the Court not to charge further fees to the estate. Secondly, Mr Kristofferson knows a great deal about the administration of the estate. It is highly convenient for him to wind up an estate administration, which seems to me to be at least two-thirds complete. Thirdly, there is no-one else to take the appointment. Fourthly, the Court can review Mr Kristofferson's final work on behalf of the estate and will relist the matter in October of this year. When he is in a position to present final accounts and show what money is about to be, or has been, distributed to the beneficiaries in Hungary, final approvals to his fees can be given by the Court.
7. So for that reason I will make orders on Mr Kristofferson's motion of 6 May 2016. And I note the undertaking of Mr Kristofferson given to the Court set out in paragraph (3) of that motion.
8. The Court therefore orders: 1. Order pursuant to Probate and Administration Act 1898 s 66 that the administration of the intestate Estate of the late Akos Balazs Melegh ("the estate") granted to the Third Plaintiff Katalin D'Arney on 23 March 2016 be revoked, with such order to take effect on 13 May 2016. 2. Order pursuant to Probate and Administration Act 1898 s 63 that the administration of the intestate Estate of the late Akos Balazs Melegh be granted to the First Plaintiff, Peter David Kristofferson, subject to any further requirements of the Probate Registry on the terms set out in his undertaking in paragraph (3) with such order to take effect on 13 May 2016. SCHEDULE 1. Peter David Kristofferson undertakes to the Court that upon a grant to him of administration in accordance with paragraph (2): 1. he will make no claim for solicitor-client costs or in respect of counsel's fees beyond the sums identified in his affidavit sworn 17 February 2016, other than with leave of the court. 2. he will not initiate any legal proceedings on behalf of the estate without first seeking judicial advice and the leave of the Court, and 3. he will pass accounts of moneys and other property received and disbursed on behalf of the estate at such time or times as the Court many require. 1. List the matter before me at 9.30am on 4 October 2016 for mention. 2. Dismiss the motion for commission of Gabor and Anthony Boskovitz ("Messrs Boskovitz") dated 23 March 2016 ("the commission motion"). 3. Order that Messrs Boskovitz pay the estate's costs of the commission motion. 4. Dismiss the motion of Messrs Boskovitz dated 9 July 2014 for the striking out of the Caveat dated 30 June 2014. 5. Order that Messrs Boskovitz pay the costs of the estate of the 9 July 2014 motion. 6. Order that Messrs Boskovitzs' motion filed on 26 September 2014 to strike out the Statement of Claim of 27 August 2014 be dismissed. 7. Order that Messrs Boskovitz pay the estate's costs of the 26 September 2014 motion. 8. Order that Messrs Boskovitz not recover any of their own costs of their motions of 9 July 2014 or 26 September 2014 or their commission motion from the estate nor any of their liability to pay costs pursuant to orders (6), (8) and (10) hereof.

Amendments 13 May 2016 - Amendment to numbering in the orders. 04 October 2016 - [42] last sentence added. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 October 2016