Clancy v Santoro [1998] VSC 196

5. The evidence indicates that in about mid-1988 a verbal offer was made to Mrs. Santoro to purchase her property for $3 million. That property had become of interest to developers, the two adjacent blocks between her property and Grange Road having been purchased and application made for the construction of units on those sites. On 2 August 1988 a letter was forwarded to Mrs. Santoro by the hand of James Bundred, the managing director of Bundred & Co. Pty. Ltd. Licensed Estate Agent and Auctioneer indicating a client of that firm would be prepared to pay in the vicinity of $2.5 million for the property. Both these figures contrasted dramatically with the price for which Mrs. Santoro purchased the Toorak Road property in 1975, namely $92,000.

8. On 7 August 1988 Mrs. Santoro was admitted to the Epworth Hospital having suffered a cardiac arrest at 11 p.m. She died in the Epworth Hospital on 19 August. In the meantime, on 11 August, Mrs. Santoro executed a second codicil to her will. It was in these terms:-

"1. I DECLARE AND DIRECT that Clause 3(b) of my said Will shall be deleted and the following Clause 3(b) inserted therefor:- (3.(b)) As to my freehold property situate at and known as 545 Toorak Road Toorak in the said State and being the whole of the land more particularly described in Certificate of Title Volume 5822 Folio 397 UPON TRUST to be sold by my Trustees by way of public auction and after payment there out of all expenses of sale and net proceeds of same to be equally divided between my Son GEORGIO ROMANO SANTORO and my Daughter MIRELLA VALDA ANTOINETTA CLANCY and I DECLARE that my reason for doing so is because of the substantial increase in the value of the said property. 2. IN ALL other respects I confirm my said Will and the First Codicil thereto."

12. The variation of clause 3(b) reduced the benefit that the defendant would receive under the will by 50 per cent.

15. The second codicil was drawn up and witnessed by Mr. Peter Walsh, a partner of the firm Walsh and Carroll, who had, for a number of years, been Mrs. Santoro's solicitor. It was also witnessed by Ms Jane Teasdale, a family friend. In the succeeding days, weeks and months, Mr. Walsh prepared and sought the signature of the parties on the application for probate. On 7 February 1989 solicitors Corrs Pavey Whiting & Byrne wrote to Mr. Walsh advising that the defendant believed his mother lacked testamentary capacity at the time of executing the second codicil. On 9 February the defendant informed Mr. Walsh that he would not be signing the application for probate. Ultimately, on 26 April of that year a caveat was lodged on behalf of the defendant. On 7 June the application for probate was lodged on behalf of the first plaintiff.

18. Between 23 and 30 March 1990 the probate action relating to Mrs. Santoro's testamentary capacity was tried before Mr. Justice Nathan. On 11 April his Honour discharged the caveat and admitted the second codicil to probate. By agreement between the parties the transcript of evidence in the proceeding before Mr. Justice Nathan was tendered in evidence in this case. Probate was granted to the first plaintiff and the defendant on 30 April and 5 June 1990 respectively. Thereafter, on 13 June, the Toorak property was auctioned and passed in without any genuine bids. A further attempt to auction the property occurred on 29 March 1995 when it was passed in below the reserve fixed at $1.2 million. The next day the property sold for the reserve price.

21. It is against that general factual background that this action comes before this Court.

24. In a statement of claim accompanying a writ issued on 26 September 1994 the plaintiffs claimed damages against the defendant pursuant to a number of causes of action. Those persisted with before this Court were breach of executorial duty, malicious prosecution, abuse of process, and breach of an agreement whereby the defendant obtained furniture from the residence of Mrs. Santoro in return for an undertaking to sign the application for probate in the first week of February 1989. It was also pleaded that the doctrine of election applied to such furniture having been acknowledged by the defendant to form part of the assets of Mrs. Vida Santoro's estate.

27. The amended counterclaim filed by the defendant in May 1998 was not pursued in these proceedings.

Finding of Facts and Application to Causes of Action

32. In determining the various claims it is necessary first to make a number of findings of fact from the voluminous material presented to the Court. I will set out only those matters which I regard as relevant to the legal issues raised. In the course of final addresses counsel made submissions relating to the credit of each of the parties to this action. I do not propose to canvass those submissions and thereby further aggravate the ongoing internecine struggle in which this Court has been the principal battleground. It is sufficient to state that I have taken relevant issues of credit into account in arriving at my factual findings.

35. It is common ground that, prior to her admission to Epworth Hospital, Mrs. Vida Santoro was in good health for an 85 year old woman. She was intelligent, mentally alert, and a person of independent spirit with firm opinions. She was on good terms with both her children. Indeed, the defendant, who was a medical practitioner, spoke to her daily on the telephone. He acted as her general practitioner in conjunction with a Dr. Robin Murray (who was primarily an endocrinologist).

38. On 7 August, at about 3.30 a.m. Mrs. Santoro complained of chest pains. The defendant attended her, and, after an injection of pethidine, he arranged for his mother to be admitted to the intensive care ward at Epworth Hospital. There, her treatment was under the control of Dr. William Chan, a specialist cardiologist, who the defendant had never met before.

41. On the evening of 8 August, the defendant was contacted by Dr. Chan. His recollection of what Dr. Chan told him was that his mother's heart had stopped "two or three times" and she had required ventricular fibrillation (being the use of an electric current to arrest irregular heart spasms). His mother was unconscious. A priest (Father Romanin) was called and the last rites administered. In the circumstances Dr. Chan suggested that future heroic efforts of resuscitation should not be attempted. According to the defendant, his sister, who was also present, agreed to this course. Given the existing circumstances I regard this as highly likely.

44. The defendant again visited his mother on 9 August and, according to his evidence, she accused him of lying when he told her that she had nearly died of a heart attack and that a priest had been called. Further, she effectively accused the nursing staff of stealing her bed jacket and suit case.

47. On 10 August his mother was aggressive and attempted to throw a knife (which had accompanied an apple on a plate) at a retreating nurse.

50. Up until this time Mrs. Santoro had never exhibited any impaired judgment.

53. On this occasion she also stated that her house was worth $7M.

56. About lunchtime on 11 August the defendant was rung by Dr. Chan who indicated that he no longer wished to treat Mrs. Santoro. He retailed allegations made by her, that her family wished her dead and that the defendant wanted to kill her. Dr. Chan requested that the services of a geriatrician be sought. On the same day, in conversation with the defendant, Mrs. Santoro confirmed these allegations and reiterated the value of her property was $7M. She also claimed that the nursing staff were not looking after her. The defendant said he had never seen his mother in this state before.

59. Unbeknown to both the plaintiffs and the defendant, it was on this day that Mr. Peter Walsh, who had had professional involvement with Mrs. Santoro since 1974, attended on her at Epworth Hospital together with a Ms Jane Teasdale (a daughter of a friend of Mrs. Santoro), to execute the second codicil to her will.

62. It was the opinion of Mr. Walsh that Mrs. Santoro was as good mentally as ever when she signed the second codicil. In other words, that she had testamentary capacity. This view was shared by Ms Teasdale who gave evidence in this matter before Mr. Justice Nathan.

65. Insofar as is relevant, the defendant described his mother as still being disorientated and complaining bitterly about her treatment on 12 August (although she was calmer), and on 13 August she had told her sister, Mrs. Sylvia Lloyd that the house was worth $7M and that the family were all trying to sell it.

68. Subsequently, at Mrs. Santoro's funeral (on 23 August) Mrs. Lloyd, in the presence of all the parties to this action, expressed the opinion that on 11 August, her sister had lacked testamentary capacity.

71. Again, on 14 August, the defendant visited his mother with a Mr. Raymond Joseph, a pharmacist who had known her since 1965. She did not recognise the pharmacist. Mr. Joseph attended in his capacity as a Commissioner for Taking Affidavits and on this occasion for the purpose of having Mrs. Santoro sign a declaration of her identity. Mrs. Santoro apparently believed the document was for the sale of her house and that her son was trying to sell it and that it was worth $7M. Based on his knowledge of Mrs. Santoro over many years, Mr. Joseph formed the view that she lacked testamentary capacity on that date (14 August). He later provided the defendant with a note to that effect dated 23 August 1989.

74. On 15 August the defendant spoke to a Dr. John Matthew who was taking over the care of Mrs. Santoro from Dr. Chan. At this time Dr. Chan forwarded a letter to the defendant as the referring doctor in which he stated (inter alia):

"As discussed over the phone, I have invited a general physician to be involved in her [Mrs. Santoro's] continuing care as I can envisage that her recuperation will be a long drawn-out affair requiring skills of a general physician more than those of a cardiologist. Her mental state, from what I gathered after speaking with you, is far from normal and her physical condition after this moderate-sized myocardial infarction could also deteriorate."

78. The reference to speaking to the defendant related to his answer to Dr. Chan's question as to what his mother was like previously in which he said that her mental state had always been normal.

81. In the days that followed, until Mrs. Santoro's death on 19 August, she was, according to the defendant quieter and fading out.

84. It was the defendant's evidence that, having seen the codicil dated 11 August, he immediately came to the view that his mother lacked testamentary capacity. In relation to the document itself, he noted that his mother had first initialled it V.R. (which he assumed related to her earlier brief marriage to a Bill Ryan), before crossing out that notation and substituting V.S.

87. Given his own views, and the comments of his aunt and Mr. Joseph, and armed with the letter of 15 August from Dr. Chan, the defendant sought legal advice on the issue of his mother's testamentary capacity, from a solicitor, Mr. Mark Pruden of Price Brent. The date of their meeting appears to have been 28 August 1988. File notes from that time are consistent with the defendant's assertion of his mother's conduct and comments at Epworth Hospital.

90. Mr. Pruden suggested a further letter be sent to Dr. Chan seeking his views on Mrs. Santoro's testamentary capacity. A letter was compiled on 29 August, but, if sent, was not received by Dr. Chan. Consequently, a subsequent letter in identical terms was sent on 18 October. It provoked a response from Dr. Chan in these terms:

"It is my opinion that, from my intimate knowledge of Mrs. Santoro's medical condition on August the 10th, 1988, I do not believe that she has the requisite testamentary capacity as defined by you in your letter dated the 18th October 1988." [Letter from Dr. Chan dated 8 November 1988.]

94. In the meantime, in September or October of that year, the defendant examined the Epworth nursing notes. Annotations such as "very agitated and aggressive; calling me a liar; suicidal; running up and down the corridors"; reinforced his opinion of his mother's lack of testamentary capacity.

97. On 12 December 1988 the defendant changed solicitors and consulted a Mr. Neville Colbran of Corrs Pavey Whiting & Byrne (Corrs) on the issue of his mother's testamentary capacity. Mr. Colbran advised the defendant that he could not be a propounder of the will at the same time as he was a caveator. This advice was confirmed in a letter from Mr. Colbran to the defendant dated 7 February 1989 together with the suggestion of attempting to negotiate a settlement of this matter.

100. On the same day a letter was forwarded by Corrs to Mr. Peter Walsh, as the solicitor for the Estate, stating the defendant's belief that his mother lacked testamentary capacity. That was the first intimation to Mr. Walsh that such was the defendant's state of mind. Thereafter, letters were exchanged between the parties' solicitors. These letters included an offer of settlement from the defendant on the basis of an equal distribution of assets bequeathed to the parties This offer of compromise, was effectively rejected by the first plaintiff on 12 April 1989. Consequently, by letter dated 24 April the defendant's solicitors foreshadowed the lodging of a caveat against the granting of probate of the will and codicil. A caveat bearing the date of 26 April 1989 was subsequently lodged.

103. Battle lines having been drawn, the matter proceeded to hearing before Mr. Justice Nathan on 23 March 1990. Prior to that date the first plaintiff, applied for probate with leave reserved on 7 June 1989. The praecipe was endorsed by authorities at the Probate Office: "Medical evidence on oath as to the testamentary capacity of the deceased as at date of execution of 2nd codicil". As to the effect of such a notation, evidence, which I accept, was adduced from Mr. Andrew Dickson, who was the Registrar of Probates between 1987 and 1993, as to the necessity of obtaining actual medical evidence. Mr. Dickson deposed to discussions held with Mr. Walsh as to the need for such a requisition given his (Mr. Walsh's) own views as a witness to the document that Mrs. Santoro had testamentary capacity. None the less the Registrar maintained the need for medical evidence as to testamentary capacity. Consequently, Mr. Walsh, in a letter dated 14 June 1989, in which he made his own views of Mrs. Santoro's testamentary capacity crystal clear, wrote to Dr. Robin Murray seeking his opinion as to the deceased's testamentary capacity at the relevant time. Ultimately Dr. Murray responded by letter dated 30 August 1989 indicating that he was not the treating doctor and conducted no examinations or tests upon Mrs. Santoro. However, he added: "I do recall that it was my impression (from the end of the bed) that during my visits Mrs. Santoro was significantly dyspnoeic and distressed and that she appeared cyanosed". He enclosed a copy of a medical report he had written for the defendant on the same date. This had been in response to a letter from the defendant dated 21 August 1989 in which he had sought the same information. The reply the defendant received contained the following further expression of opinion: "While I did not test her mental capacity, in my limited experience patients who have suffered a cardiac arrest and subsequent defibrillation are often disorientated and confused as well as having memory loss, for days to several weeks".

106. I accept the defendant's evidence that he regarded Dr. Murray's view, insofar as it went, as supporting what he believed.

109. On 19 September 1989 the defendant had also sought the views of a psychiatrist, Dr. George Mendelson, who was a senior lecturer at Monash University and also associated with Prince Henry Hospital. Dr. Mendelson was provided (inter alia) with the letters received from Dr. Chan on 15 August and 8 November 1988 and that of Dr. Murray of 30 August 1989. Additionally he received the statement of Mr. Raymond Joseph of 23 August 1989.

112. It is unnecessary to detail Dr. Mendelson's opinion. It is sufficient to note that he regarded the deceased as lacking testamentary capacity. Coming as it did from a psychiatrist, the defendant deposed to having regarded this assessment as having great significance.

115. Dr. Mendelson was overseas at the time of the hearing before Mr. Justice Nathan.

118. Dr. John Matthew, who took over the treatment of Mrs. Santoro, was not prepared to venture an opinion about her testamentary capacity.

121. Whatever criticisms may be made of the opinions of Drs. Chan, Murray and Mendelson, and whatever weight might ultimately be placed on their assessments, it is clear that their reports provided material which, together with the views of Mr. Joseph and Mrs. Lloyd, was confirmatory of the defendant's view of his mother's mental condition at the time of executing the second codicil. I am quite unpersuaded on the material that the doctors' views of Mrs. Santoro's testamentary capacity were other than honestly expressed. Criticisms of the appropriateness of the treatment provided by Dr. Chan are irrelevant to that issue. Insofar as the second plaintiff (Dr. Michael Clancy) was prepared to state that Dr. Chan and the defendant had agreed to murder Mrs. Santoro, such evidence, in my view, serves only to undermine his credibility as a witness.

124. As I indicated, the relevant evidence given in the hearing conducted by Mr. Justice Nathan was before this Court. Apart from the present plaintiffs evidence was given by Mr. Walsh, Ms Teasdale, Michelle Clancy (a grand-daughter of Mrs. Santoro) as to the testatrix having testamentary capacity at the relevant time. Opinion evidence was led from Dr. George Hale and Dr. Edward Tomlinson which lent some support to this view.

127. The defendant gave evidence of his mother's incapacity together with Susan Santoro (a daughter-in-law of Mrs. Santoro) and Mrs. Lloyd (Mrs. Santoro's sister). The pharmacist Mr. Joseph and Dr. Murray and Dr. Chang and Sister Dianne Trott (the latter two having played a role in the treatment of Mrs. Santoro at Epworth Hospital) each gave evidence favourable to the defendant's case.

130. An examination of the transcript of the proceeding does not, of course, enable any assessment to be made of the demeanour of individual witnesses. However, the transcript of the case before Mr. Justice Nathan may be regarded as revealing what was described in the outline of submissions of Dr. Pannam, (senior counsel for the defendant), as "an evenly balanced probate dispute".

133. In the present case evidence was adduced by the defence from Mrs. Bettina Evert, the instructing solicitor in the action before Mr. Justice Nathan, and from the defendant's counsel, Mr. Bernard Bongiorno, Q.C., and Mr. Anthony Southall (now also senior counsel). Each of these witnesses deposed to having the view that the defendant had a strong case which they had expected to win. Moreover, those views were communicated to the defendant.

136. As is clear from the evidence, the defendant sought legal advice on the issue of testamentary capacity prior to the end of August 1988. In cross-examination he conceded that one of the motivating reasons for the course he pursued, was self-interest. In particular he wanted the Toorak property for himself.

139. The fact that he was seeking legal advice was never revealed to Mr. Walsh or to his sister, as the co-executor of the will. Indeed, neither Mr. Walsh nor the first plaintiff was aware of any proposed challenge to the second codicil until receipt of the letter of 7 February 1989 from Corrs.

142. I should add that on 10 February 1989 Mr. Walsh informed Mr. Colbran of his view that Mrs. Santoro had testamentary capacity. Mr. Walsh was sure that this view would have been passed on to the defendant. Further, on 13 February in a telephone conversation between the defendant and Mr. Walsh, the former gave his views as to why his mother did not have testamentary capacity and the latter was quite sure he had put his own contrary view to the defendant. Mr. Walsh's view was further confirmed in a letter sent to Corrs on 12 April 1989.

145. Since Mr. Walsh had, from the time of the meeting on 24 August 1988, been handling the probate of the will and both codicils, his view had been apparent at an early stage. Consequently any criticism that the defendant should have made more detailed inquiries of Mr. Walsh, has an air of unreality about it.

148. On the face of it the defendant's challenge to his mother's testamentary capacity was based upon a genuine belief by him as to her state of mind at the time the second codicil came into being and was supported by credible information from a number of disparate sources.

151. It was however submitted on behalf of the plaintiff that any genuineness of the defendant's belief was inconsistent with his subsequent ongoing efforts to settle the matter. I shall return to this aspect of the case when considering the claim of malicious prosecution.

154. It is clear on the evidence that in the months after his mother's death, and prior to that date, the defendant procrastinated whilst seeking medical and legal advice about the second codicil.

157. On 24 August, together with his sister, the defendant met with Mr. Walsh and instructed him to take the normal steps for obtaining probate of the will and codicil. The discussion on that occasion, according to Mr. Walsh, included the defendant canvassing the possibility of putting the Toorak Road property up for public tender. In any event, instructions to proceed with the application for probate were given.

160. On 2 August, 1988, Mrs. Santoro had received a written offer from real estate agents Bundred & Co. Pty. Ltd., of $2.5M for the Toorak Road property. On 11 September, the parties met at the property and, according to Mrs. Clancy, the defendant indicated that this offer had been increased to $3M. However, given Mr. Walsh's subsequent notation of what Mrs. Clancy told him, it seems that what the defendant said was that the offer equated to $3M free of commission. In any event, Mrs. Clancy's enthusiasm at this turn of events was met by the defendant indicating that he would only consider an offer of $4M for the property. His evidence was that he would have been interested at that price. Mrs. Clancy's evidence was that he told her to ring 15 agents. Certainly, the defendant agreed that he told her to get the views of numerous estate agents. It may be that the defendant would have agreed to the sale of the property for $4M. Whether that be so or not, given his expressed view that the market was rising at this time, he had nothing to lose by delaying any sale whilst further exploring the testamentary capacity issue.

163. In the ensuing months, Mrs. Clancy spoke to a number of real estate agents. These were Mr. Peter Cole, and Mr. Phillip Dodwell (of Abercromby and Beatty), Mr. Thomas Keck (a valuer of Herron Todd White) and Mr. Peter Kudelka (of Kay Burton). Of these, she could remember only mentioning Mr. Cole by name in her discussions with the defendant about auctioning the Toorak Road premises. It is common ground that an auction authority prepared by Abercromby & Beatty, which contemplated an advertising campaign in November and an auction in December of 1988, was never shown to the defendant. Nor was he told of a letter from Kay & Burton dated 16 November 1988 containing an offer of $3.1M for the property.

166. However, the situation remained that Mrs. Clancy, (actively supported by Mr. Walsh), wished to sell the property whilst the defendant wanted $4M and did not wish to sell at this time.

169. Indeed, the defendant having, on 28 September 1988, met with a Mr. Robert Briglia, a chartered accountant engaged on behalf of the estate by Mr. Walsh, knew that the sale of the property could be put off for 12 months without any capital gains tax being incurred. (This was confirmed by Mr. Briglia in a letter to the defendant dated 10 March 1989).

172. Meanwhile on 14 September 1988, agreement was reached between the parties as to the format of a Notice of Application for Probate which was inserted in "The Age" newspaper on 27 September of that year.

175. On 1 November 1988 Mr. Walsh advised the defendant that the documentation in support of the application for the grant of probate was ready for signature. Mr. Walsh reiterated that the Toorak Road property should be put on the market and stated this could not be done until probate was granted. In that telephone conversation the defendant confirmed he was not prepared to do anything at that stage about the sale of the property. On 3 November the solicitor wrote to the defendant confirming that the documentation was ready for signature.

178. According to the first plaintiff, about this time the defendant began to give her reasons why he would not sign the probate document. He first wanted furniture which he regarded as his; he wished to go through their mother's papers and photocopy those he wanted; and he wished to inspect her books, selecting those he desired. The first plaintiff deposed to the defendant stating that once these matters had been effected, he would sign the probate documents in the first week in February.

181. The defendant agreed that he made various excuses to his sister from time to time in relation to signing the probate documents. However, he denied ever telling her that he would sign the probate documents in consideration of her doing anything. The reason advanced by the defendant for adopting this course of conduct was that he was awaiting professional opinions to support his own view as to his mother's lack of testamentary capacity. The defendant claimed that, during this period, he believed he was only acting as executor in relation to the will and first codicil. He was evasive as to the basis of this belief and I regard his evidence on this point as constituting a subsequent rationalization of the situation. In any event what is clear is that the defendant did nothing to indicate to Mr. Walsh or his sister that this was his state of mind. On the contrary, he dissembled and led them to believe he was acting as an executor in relation to all of the testamentary instruments. Moreover, in pursuing this course of action, the defendant was able to control, for his own benefit, the speed at which the administration of the estate proceeded.

184. It is now necessary to examine each of the specific claims made by the plaintiffs.

188. As I have indicated it is alleged that, as part of this delaying strategy, the defendant agreed to sign the probate documents in the first week of February if he was given furniture from his mother's house which he claimed belonged to him.

191. It is clear from the evidence of the first plaintiff that the defendant was proclaiming his entitlement to items of furniture immediately after the first meeting with Mr. Walsh on 24 August 1988. The defendant referred to an agreement signed by him and dated 14 August 1961, the relevant portion of which is in these terms:

"I agree to abide by my father's will and in the wording of clause 2. I consider that the wording 'and facilities' includes that part of the household furniture which I deem having belonged to my father. I give my mother Vida Santoro complete right to use and enjoy this furniture during her lifetime. I do not by this agreement waive any of my rights of ownership. Signed: G. Santoro Witness: M. Santoro [Mrs. Clancy]".

195. The part of the will of Soccorso Santoro to which this agreement referred was the bequest to the defendant of a property in Molesworth Street Kew subject to the testator's wife (Vida) being permitted to reside in the premises until death or remarriage and the testator's daughter (Mirella) being permitted to live at the premises until death or marriage. The phrase used in clause 2.1 was: "personally to use such house and its facilities". Hence the agreement.

198. The defendant stated that his mother had signed an identical document. The reason for the document was that he was unmarried at the time and was prepared to allow his mother to have the furniture during her lifetime.

201. It is to be noted that after leaving the meeting with Mr. Walsh on 24 August, the defendant had produced to the first plaintiff the documents witnessed by her and re-asserted his right to the furniture. On the following day, in her presence, the defendant had photographed and recorded the various items of furniture on the premises.

204. It was arranged by Mr. Walsh that all the chattels in the property be valued by Graham Joel. The reason he had advocated such a valuation was his view that there may be a dispute as to whether some chattels belonged to the defendant through his father's estate. It is unclear on the material whether the defendant wanted some or all of the chattels valued. The first plaintiff's evidence was that he wanted all of them valued, whilst Mr. Walsh's file note of 5 September suggests the opposite. Ultimately nothing turns on this point. The valuation occurred on 14 September 1988. Later that same day there was a meeting in Mr. Walsh's office. His file note, insofar as it is relevant, reads:

"Discussed chattels, G.S. [the defendant] wants to remove his. Mrs. Clancy said would he leave them in the house. Would present better for auction".

The fact that the defendant wanted his furniture before any auction took place was confirmed in the evidence of the first plaintiff.

209. The Joel valuation was faxed to the parties on 3 October 1988. After receipt of this documentation, at a meeting which occurred at the Toorak Road property, those items of furniture which the parties agreed belonged to the defendant were highlighted in texta-colour brought by the defendant to the meeting for that purpose. The first plaintiff agreed that this had occurred. Her evidence was that an agreement for the defendant to take the furniture in return for his signature of the probate documents, was reached in early November (although in the writ and the Further and Better Particulars, the date of 14 November is specified.)

212. In a statement to the Coroner prepared by the second plaintiff, a telephone conversation, said to have occurred on 14 November, is detailed. The first plaintiff agreed that she was the source of that material. In that conversation the defendant had indicated that he wanted the furniture before signing the probate application. Discussion ensued in which she had expressed the wish that the furniture remain in position until after the auction. The entry continued:

"3. Dr. Santoro said he wanted to meet at the house and discuss the furniture with her and have a couple of hours to go through the books in the bookcase 'and everything' at the Toorak Road property, so he'd have no further interest in the house, 'and once that's gone everything's fine'." 4. My wife then asked him 'So, you're refusing to sign for Probate so we can auction the property before Christmas?' and he replied "I've already told Peter Walsh and you what my rights are. I'll have to take legal action to get $3,000 worth of furniture. It will be two years." In an effort to 'get the show on the road' she then agreed to his taking the furniture he wanted and going through the books and other things...."

216. In the course of her cross-examination the first plaintiff agreed that this material revealed no specific agreement of the type to which she had deposed. Further, there was no contemporaneous note of any such agreement.

219. On 1 December 1988 Mr. Walsh sent an Affidavit of Executors and Inventory of Assets to the parties for perusal and awaited further instructions. On 5 December his file note of a conversation with the defendant reads:

"G. Santoro telephoned confirming he had copy of affidavit and inventory but too busy until early February to come in and sign. Says he will sign then but first M. Clancy must have given him chattels and also got on with getting that tombstone done. I said I would again tell her."

223. On 15 December the defendant had examined Mrs. Santoro's personal effects and books in the manner he had earlier requested, and, on 19 December, he had collected the furniture. On that date, (which was over a month after the 14 November conversation) the first plaintiff brought with her a note she had typed up. It was in the following terms:

"After I receive the items of furniture I have highlighted in the Joel's inventory my only interest in the remaining contents of my mother's house are the photos and papers I have discussed with Mirella. She has agreed to show me anything of interest to me and I shall copy or photostat them. The only access I shall then require to the house is in relation to the sale or lease of the property and I agree with the arrangement that Michele continues to live in and take care it [sic]. Both executors have joint access to the garage and garden. G.R. Santoro."

227. Whether this note was dictated by the defendant or was the result of discussions between he and his sister, it is common ground that she typed it up and read it back to him over the telephone. Later, at the Toorak Road premises, the defendant added the words "and garden" to ensure his access to the garage. He then signed the document.

230. Significantly, therefore, in the only relatively contemporaneously document to the 14 November conversation, there is no reference to any agreement about the defendant obtaining the furniture in return for signing the probate document.

233. Also of importance is the fact that no such allegation was made by the first plaintiff in the hearing before Mr. Justice Nathan, although such an agreement would clearly have been relevant to the issue of the genuineness of the defendant's professed belief as to his mother's lack of testamentary capacity. Indeed, no such allegation surfaced until the issue of the writ in the present matter.

236. It was argued on behalf of the plaintiffs that the defendant's assertion of ownership of the furniture taken by him was contradicted by an affidavit sworn by him on 22 May 1990 to which was exhibited the Joel inventory listing as part of the personal property of the deceased, the furniture taken by the defendant. It is to be noted that this affidavit came into being at a date subsequent to the probate judgment and some 18 months after the furniture claimed by the defendant had been consensually removed from the Toorak Road premises. Further, the documentation was not introduced into evidence until final submissions and, consequently, the defendant was not given the opportunity to explain this apparent inconsistency. In the circumstances I am not satisfied that the inclusion of approximately $3,000 worth of furniture in the inventory was other than inadvertent.

239. As the first plaintiff conceded in her evidence: "I was happy to give him what he wanted from the property to get the show on the road". She may have hoped or believed that permitting the defendant to remove the furniture would result in his signing the probate documents. However, it is quite another matter to contend that the surrendering of the furniture was part of a contractual arrangement to this effect. It may well be that the prism of time has distorted her recollection on this subject. In any event I am quite unable to accept that any such agreement, as pleaded, existed. The preponderance of the evidence is to the contrary.

243. I have indicated that the assertion of a contractual agreement relating to the furniture obtained by the defendant is not made out. It was pleaded in the alternative that, pursuant to the doctrine of election, the defendant would be required to compensate his sister for the furniture taken by him.

246. The doctrine of election is set out in a number of texts. For example, in Williams' Law Relating to Wills, Sherrin, Barlow & Wallington (5th edn., Butterworths, 1990) where, at p.257 it is stated:

"... if the testator gives to A property which in fact belongs to B and by the same will makes a gift to B, then B will not be allowed to take such gift unless he undertakes to give effect to the gift to A or, in the usual phrase, he is prepared to carry into effect the whole of the testator's dispositions." [Cases cited]

250. Fundamental to this doctrine is the purported disposition by a testator, or in this case the testatrix, of property in her will to which she is not entitled. In the instant case the reference in clause 3(d) of the will is to "my personal chattels" and "my furniture". Given the limited nature of the disposition the doctrine of election is simply not sustainable.

255. As I indicated earlier in this judgment, a number of offers to settle this matter were made by the defendant. It was put in the course of argument on behalf of the plaintiffs that I should infer such offers stemmed from the defendant's lack of belief in his mother's testamentary incapacity and, accordingly, I should characterise the subsequent proceedings brought before Mr. Justice Nathan as constituting a malicious prosecution. In order to test this assertion it is necessarily to further examine the relevant factual material.

258. According to Mr. Walsh, it was as early as the telephone conversation of 13 February 1989 that the defendant expressed a willingness to settle the claim on a 50/50 division of the whole estate. That conversation was subsequent to the advice of Mr. Colbran of Corrs as to the desirability of negotiating a settlement, being, as he said in his evidence, a typical approach he adopted to a resolution of such disputes. That advice was confirmed in the letter sent to the defendant by Mr. Colbran dated 7 February 1989.

261. Subsequently such an offer of settlement was communicated to Mr. Walsh by letter dated 21 February 1989. The relevant passage read:

"... our client would be prepared to agree to an overall settlement on the basis that the bequests in the Will and Codicils to both he and his sister are shared equally without disturbing the specific devises or bequests to other members of the family. This proposal is made in the belief that insofar as she had capacity to do so, Mrs. Santora [sic] desired to treat both her children equally when disposing of her estate."

265. The first plaintiff deposed to regarding such a proposal as "stupid" and "silly" in light of her view that his mother clearly had testamentary capacity.

268. That letter was followed by one from the defendant to the first plaintiff dated 27 March 1989 enclosing a copy of the letter from Mr. Paul Briglia of 10 March 1989 on the subject of a possible capital gains tax on the Toorak Road property. The defendant's letter pointed out that if the property was sold after 19 August 1989 it could attract capital gains tax payable from the residue of the estate. The first plaintiff claimed to have regarded this aspect of the letter as a threat. Certainly it may be seen as exerting some pressure to induce a settlement of the matter. The letter went on to talk of the settling of the parties' problems, the granting of probate and the auctioning of the property and suggested that, given the time frames, the parties had only about ten days to make up their minds. The first plaintiff informed Mr. Walsh of the letter but otherwise apparently did not respond to it.

271. Following a letter from Mr. Walsh to Corrs on 12 April 1989 (to which I have already referred) in which Mrs. Santoro's testamentary capacity was asserted, the defendant wrote to his sister on 20 April 1989 suggesting a meeting at the Toorak Road property on 23 April and stating: "I shall suggest a proposal for resolution before expensive third parties are involved". Her response to that letter was that all further communication should be through the parties' solicitors.

274. On 24 April of that year a further letter was sent from Corrs to Mr. Walsh which relevantly read:

"With respect, it seems most unfortunate that the matter must now proceed to litigation as, on our assessment, the difference in distribution of the Estate between the proposal made in the final paragraph of our letter of the 21st February last and a distribution of the Estate in accordance with the terms of the second Codicil would be a mere 13%. The pending litigation will also necessarily involve a considerable delay in the Grant of Probate whether or not the Caveat proceedings are successful. This in turn will unfortunately delay the sale of the Toorak Road property, possibly resulting in a Capital Gains Tax liability which will be borne by the residuary estate to which your client is entitled ..."

278. What this re-adjustment would have involved was, (inter alia), re-valuing the real estate left to the first plaintiff and the other assets and shares and dividing all the assets equally. Whether or not this would have resulted in a variation of 13 per cent as the defendant suggested, the rationale for such a division may well have been the defendant's view (which gained some support from the initial testamentary instruments) that his mother wished to treat her two children equally. What is clear, in my view, is that the self-interest to which the defendant referred initially impelled him, (no doubt encouraged by legal advice) to seek the most money possible for the least outlay. In pursuing such a settlement, I am satisfied that he sought to exert pressure on his sister. The reference to possible constructive trust in his favour in relation to the Toorak Road property (Corrs' letter of 21 February 1989); the reference to potential payment of capital gains tax out of the residuary estate (his letter of 27 March 1989 and the letter of Corrs of 24 April 1989) together with the reference to possible entitlement to half the rent paid on the Toorak Road property by the first plaintiff's daughter Michelle and the foreshadowing of legal action if that property sold for less than the $3.1M Kay & Burton offer (a letter from Corrs of 9 April 1990) all fall into this category.

281. It does not, however, logically follow that a settlement is evidence of a disbelief in the rightness or justice of a litigant's cause. The exigencies of litigation and the potential costs involved frequently provoke the compromise of an action.

284. In a letter to Mrs. Clancy dated 10 September 1989, which included an invitation to attend a formal dinner party to celebrate the defendant's 25th wedding anniversary, the defendant wrote (inter alia):

"In addressing our present problem, I have attempted direct negotiation with you, but you have rejected this. We shall now have negotiations between our representatives. These are costly and not necessarily an improvement on direct negotiations. Perhaps you should consider a qualified arbitrator who can negotiate much cheaper and may not require legal representation. When entering into legal action, it is always important to consider a 'worst case scenario'. I have, at worst, my cost to consider. You, at worst, stand to lose all your equity in Toorak Road and costs. My without prejudice offer of equality has been refused by you."

288. Counsel for the plaintiffs referred to portions of this letter, including expressions of regret by the defendant at his sister's refusal to attend the dinner party, as sheer humbug. This may be so. None the less, it is instructive as to the factors exercising the defendant's mind in terms of the prospective litigation.

291. As late as 9 April 1990, two days before the decision of Mr. Justice Nathan, the defendant was offering that each party receive 50 per cent of their late mother's estate (excluding specific bequests for third parties) and that he and his sister each bear their own costs.

294. I am not prepared to draw the inference that the defendant's offers of settlement evince a lack of belief in the rightness or strength of his case. This is particularly so in the context of the advice he received from his solicitor and counsel.

297. Against this factual background I turn to consider the law relating to malicious prosecution.

300. The elements necessary to found a claim of malicious prosecution (or malicious proceedings) are set out, for example, in Little v. Law Institute of Victoria & Ors. (No.3) [1990] VicRp 25; [1990] V.R. 257. The plaintiff must plead and prove:

(1) that the proceedings complained of were instituted or continued by the defendant,

(2) that the defendant instituted or continued the proceedings maliciously,

(3) that the defendant acted without reasonable and probable cause, and

(4) that the proceedings were terminated in the plaintiff's favour. (p.262)

307. Additionally, for any action to lie, the plaintiff must have suffered damage.

310. The nature of civil proceedings encompassed by this tort has been the subject of on-going legal consideration. Traditionally the tort appears to have been limited to bankruptcy petitions and applications to wind up companies. Recently, however, in Little's Case the Victorian Court of Appeal consisting of Kaye, Beach and Ormiston, JJ. countenanced a form of tort where a solicitor had been made the subject of an injunction restraining him from acting or practising his profession. In the course of the judgment Kaye and Beach, JJ. remarked:

"In our opinion, there is no longer justification for confining to a bankruptcy petition and an application to wind up a company, the remedy for malicious abuse of civil proceedings where the damages claimed is to the plaintiff's reputation." (p.267)

314. It was submitted by Dr. Pannam that this tort had no application to the instant case. It was pointed out that all the defendant had done was to lodge a caveat placing testamentary capacity in relation to the second codicil in issue. Thereafter the plaintiffs, as the propounders, had moved for probate of that codicil proving their case as they were required to do. The result was simply a grant of probate. It was argued that the situation was akin to that found under s.118 of the Transfer of Land Act 1958 enabling a person sustaining damage in the event that a caveat was lodged under that Act "without reasonable cause" to obtain compensation. It was not without significance, so it was argued, that the situation of caveators who act without reasonable cause is the subject of specific legislation.

317. On behalf of the plaintiffs it was argued by Mr. Galbally that the lodging of the caveat and the appearing to show cause amounted to the institution of a proceeding and the continuation of it. The fact that the current plaintiffs initiated the probate proceedings, (as the propounders), was incidental to the essential element of the malicious prosecution.

320. On its face this type of action does not fit well within the original ambit of the tort of malicious prosecution or its extension to the civil area of bankruptcy, to winding up petitions and to injunctions brought against specific parties. This view is reinforced to some extent when the heads of damage required to be proved are examined. The classic statement remains that of Holt, C.J. in Savile v. Roberts [1792] EngR 2096; [1698] 1 Ld.Raym. 374 in which he is quoted as saying that there were three forms of damage, any one of which would support an action for malicious prosecution:

"(1) The damage to a man's fame, as if the matter whereof he is accused be scandalous ... (2) The second sort of damages, which would support such an action, are such as are done to the person; as where a man is put in danger to lose his life, or limb, or liberty, which has been always allowed a good foundation of such an action ... (3) The third sort of damages, which will support such an action, is damage to a man's property, as where he is forced to expend his money in necessary charges, to acquit himself of the crime of which he is accused, which is the present charge. That a man in such case is put to expenses, is without doubt, which is an injury to his property, and if that injury is done to him maliciously, it is reasonable that he shall have an action to repair himself."

324. Again, none of these heads of damage would appear to be applicable to the present case. Indeed, in the course of submissions, Dr. Pannam referred to a number of other reports of this case (1 Salkeld 14; 5 Mod. 406; Holt K.B. 9, 139-4, and 150, 12 Mod. 209 and Carthew 416) in which it is asserted that it is the expense of successfully answering the malicious prosecution which may be recovered.

327. It was argued, however, on behalf of the plaintiffs that the nature of damages which may now be recovered has been extended in recent decisions. For example, although in Quartz Hill Consolidated Gold Mining Co. v. Eyre (1883) 11 Q.B.D. 674 it was held that a plaintiff could not recover the difference between party-party costs and solicitor-client costs, the case of Berry v. British Transport Commission [1962] 1 Q.B. 306 held that the difference between an award of costs in a criminal case and the actual costs incurred constituted damage within the third category.

330. More recently again, in Jervois Sulphates (NT) Ltd. v. Petrocarb Explorations NL & Ors. [1974] 5 A.L.R. 1 Forster, J. in dealing with malicious prosecution in relation to an injunction which was subsequently quashed, and which had prevented the plaintiff from operating mining leases and utilising a housing camp in the Northern Territory, commented (p.23):

"In addition to this [the plaintiffs] were kept out of the housing and ... off the leases so long as the injunction improperly obtained was in force and there was damage to property of each involved. I do not consider that the judgment in Savile v. Roberts, supra, restricts damage to property to the matter of costs and that case does not as it seems to me prevent me from finding that there was damage of a different sort to the property of the plaintiffs."

The reasoning behind such a conclusion, which arguably extended this head of damage, was not set out, and no authority was cited.

335. Subsequently, in Little's Case, in discussing the issue of damages, Kaye and Beach, JJ. ventured the view (which was clearly obiter) that the suffering of loss by the plaintiff in the practice of his profession as a solicitor could constitute loss of property under the third category of damages stipulated in Savile's Case.

"... it may be contended that the injunction itself caused damage to his [the solicitor's] property of a kind which is compensable. Such conclusion as to the effect of an injunction was reached by Forster, J. in relation to a somewhat different kind of injunction in Jervois Sulphates [reference cited]."

His Honour found it unnecessary to reach a concluded view on this matter.

343. In the course of argument reference was made to the leading texts on the law of torts. In only one of them, namely Salmond and Heuston, Law of Torts 21st edn. (1996) is the proposition advanced that proof of financial loss is enough for the third head. This contrasts with the contention in earlier editions of that text, and no authority is cited for the proposition.

346. Even if the cases of Jervois and Little constitute an extension of the category of damages in the third limb of Savile's Case, that category may, in my view, be regarded as limited to situations where the specific effect of an injunction is to destroy the plaintiff's capacity to earn income. That is not the present case.

349. In my opinion the better view is that these probate proceedings are not amenable to an action for malicious prosecution, and further, that any damage which may have been suffered as a result of those proceedings does not fall within any of the categories postulated in Savile's Case in either their original or any extended form. However, given the view I have formed of the facts, I do not need to finally decide either of these matters.

352. Assuming for the purposes of the argument that the defendant, in lodging the caveat, instituted proceedings falling within the definition of this tort, the question then arises as to whether he acted maliciously. What is required to be proved by the plaintiff is detailed in the case of Mitchell v. John Heine & Son Ltd. (1938) 38 S.R.(N.S.W.) 466 where the leading authorities are conveniently collected. In this decision of the New South Wales Court of Appeal, Jordan, C.J. stated (p.469):

"In an action for malicious prosecution the burden of proof is on the plaintiff to prove (inter alia) that the defendant in instituting or maintaining the prosecution acted without reasonable or probable cause and also acted maliciously. In order that one person may have reasonable and probable cause for prosecuting another for an offence, it is necessary that the following conditions should exist: (1) The prosecutor must believe that the accused is probably guilty of the offence. (2) This belief must be founded upon information in the possession of the prosecutor pointing to such guilt, not upon mere imagination or surmise. (3) The information, whether it consists of things observed by the prosecutor himself, or things told to him by others, must be believed by him to be true. (4) This belief must be based upon reasonable grounds. (5) Information possessed by the prosecutor and reasonably believed by him to be true, must be such as would justify a man of ordinary prudence and caution in believing that the accused is probably guilty. In order that the plaintiff may succeed on the issue of reasonable and probable cause, it is essential that he should establish that one or more of these conditions did not exist. This he may do by proving, if he can, that the defendant prosecutor did not believe him to be guilty, or that the belief in his guilt was based on insufficient grounds."

"Merely to prove that the defendant had before him information which might or might not have lead a reasonable man to form an opinion that the plaintiff was guilty supplies no evidence that the defendant did not believe him to be guilty. If this ground is relied on the plaintiff must give some evidence from which an inference may be drawn as to what the defendant's belief actually was. It is not sufficient to give evidence from which a guess may be made as to what it was. Nor is it sufficient merely to supply evidence of reasons for non-belief; and if such evidence is relied on there must also be evidence that these reasons were in fact operative. [Cases cited] It may, for example, be supplied by evidence that the defendant had before him facts pointing to the plaintiff's innocence so overwhelming that no reasonable man could have believed in his guilt; ... but the necessary evidence is not suppled by proof that the defendant was aware of facts which might or might not have satisfied him of the plaintiff's guilt, or that he had before him information, some of which pointed to guilt and some to innocence."

358. Translating that exposition of the law to the civil context of this case, the plaintiff would be required to approve that the defendant did not believe on reasonable grounds at the time he lodged the caveat and thereafter contested the validity of the second codicil, that his mother lacked testamentary capacity or, if he did have such a belief, it was not such as would justify a man of ordinary prudence and caution in believing that the deceased lack testamentary capacity. It is also necessary for the plaintiff to prove that the institution of proceedings was actuated by malice. Commenting on this aspect of the tort, Jordan, C.J. stated (474):

"It has been somewhat loosely said that evidence of absence of reasonable and probable cause is evidence of malice, but that evidence of malice is not evidence of absence of reasonable and probable cause. In truth, neither of these statements is accurate. Proof of a particular fact may supply evidence both of malice and of absence of reasonable and probable cause, as where it is established that when the defendant instituted the prosecution he knew that the plaintiff was innocent. The proof of the defendant was animated by a desire to injure the plaintiff would not supply evidence of absence of reasonable and probable cause. And evidence that the defendant had formed the belief in the plaintiff's guilt which, though genuine, was based on unreasonably insufficient grounds, would afford no evidence of malice. On the other hand proof that the defendant had instituted the prosecution in the complete absence of any information pointing to guilt, or upon information which was ludicrously and obviously insufficient, might of itself supply evidence warranting an inference of malice in a particular case."

362. On the facts as I have found them, the plaintiffs have failed to demonstrate either a want of reasonable and probable (sometimes referred to as proper) cause for lodging the caveat and contesting the subsequent proceedings or the existence of malice on the part of the defendant.

367. A further cause of action upon which the plaintiff sought to rely was the tort referred to as abuse of process. The general principles relating to this tort were recently analysed by the High Court in Williams v. Spautz [1992] HCA 34; (1992) 174 C.L.R. 509. In the joint judgment of Mason, C.J., Dawson, Toohey and McHugh, JJ. it was stated (p.522-523)

"The tort of collateral abuse of process differs from the older action for malicious prosecution in that the plaintiff who sues for abuse of process need not show: (a) that the initial proceeding was terminated in his or her favour; and (b) want of reasonable and probable cause for institution of the initial proceeding. Central to the tort of abuse of process is a requirement that the party who has instituted proceedings has done so for a purpose or to effect an object beyond that which the legal process offers ..."

371. Further, any award of damages would not be limited to the three heads specified in relation to malicious prosecution.

"... the existence of an unworthy or reprehensible motive for bringing the action [was] not enough and that it must appear that the purpose sought to be affected by the litigant in bringing the proceedings was not within its scope and was improper."

"To say that a purpose of a litigant in bringing proceedings which is not within the scope of the proceedings constitutes, without more, an abuse of process might unduly expand the concept. The purpose of a litigant may be to bring the proceedings to a successful conclusion so as to take advantage of an entitlement or benefit which the law gives the litigant in that event. ... It is otherwise when the purpose of bringing the proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed or some collateral advantage beyond which the law offers."

"It has been suggested that the criterion for abuse of process is whether the improper purpose is the sole purpose of the moving party. However, in more recent times it has been said, in our view correctly, that the predominant purpose is the criterion. ... It is, of course, well established that the onus of satisfying the Court that there is an abuse of process lies upon the party alleging it. The onus is 'a heavy one'."

It is unnecessary to refer to the other judgments in this case or, to any of the other authorities referred to therein.

383. It was submitted on behalf of the plaintiffs that the predominant purpose for which the defendant instituted these proceedings was to extort from the first plaintiff more than he was legally entitled to inherit under the will of the deceased.

386. I have already expressed the view that, on the facts, the defendant was entitled to institute the proceedings to determine Mrs. Santoro's testamentary capacity. The fact that such action was also motivated by self-interest does not render the proceedings an abuse of process. Nor am I prepared to draw the inference that the defendant's endeavours (on his solicitor's advice) to settle the matter on terms favourable to himself (and even allowing that some pressure was exerted upon the first plaintiff in the negotiating process), demonstrate that the proceedings were initiated predominantly for an improper purpose.

389. It is unnecessary to go into further detail in relation to this tort. It is sufficient to state that, on the facts as I have found them, the plaintiffs have failed to satisfy the heavy onus required to establish any abuse of process.

393. The plaintiffs' final cause of action may be shortly described as breach of executorial duty. The facts upon which this claim is based are effectively the same as those already canvassed in this judgment. In para.34 of the statement of claim it is pleaded as follows:

"The defendant by his conduct in refusing to join with the first plaintiff to obtain a grant of probate, by lodging the caveat thereby causing the institution of the probate proceeding, his opposition to the plaintiff's application for probate and his refusal to authorise the sale of the property, were in breach of his duties as executor of the will and codicils and trustee of the Estate with the result that the Estate and first plaintiff as beneficiary have suffered loss." [Particulars follow.]

397. Paragraph 34A was inserted by leave of the Court and is in these terms:

"By reason of the defendant's failure to advise the first plaintiff that he did not propose to join the application for Probate and consent to the sale of the property, the first plaintiff lost the opportunity to apply for letters of administration limited to the sale of the property which would have enabled the property to have been auctioned at the most beneficial time."

401. In the plaintiffs' Further and Better Particulars of the claim the relevant period during which it was asserted the property could have been sold was August 1988 to February-March 1989. (The sale price which could have been obtained during that period was said to be between $3M and $3.5M.) However I note that in a letter dated 27 September 1996 from Purcell & Purcell (the plaintiffs' solicitors) the possible sale date is put at early December 1988. Subsequently, in the course of his final address, Mr. Galbally fixed a time of mid to late 1989 as the probable sale date. I shall return to this issue later in this judgment.

404. During the final submissions two propositions advanced on behalf of the defendant were conceded by the plaintiffs' counsel. Firstly, that a named executor, (such as the defendant), could seek probate of a will and codicil whilst, at the same time, challenging the validity of a subsequent codicil. Secondly, that it was the duty of such an executor to be satisfied that the testamentary instruments were valid.

407. In relation to the first proposition the authorities cited by Dr. Pannam were: In the Estate of Day [1940] 2 All E.R. 544; Tristram & Coote Probate Practice 26th ed. (1983) p.57; Williams on Executors and Administrators 14th ed. (1960) p.142; L. McCredie Wills, Probate and the Administration of the Estates of Deceased Persons in Victoria 2nd ed. (1989) p.55. In support of the second proposition those cited were Hallows v. Lloyd (1888) 39 Ch.D. 686 at 691; Snell's Equity 29th ed. (1990) p.213-14 and Ford & Lee Rules of the Law of Trusts 2nd ed. (1990) at 394.

410. It was, however, argued by Mr. Galbally that such propositions related solely to the manner in which a matter ought to be dealt with by a Court. Here the defendant was clandestinely influencing the administration of the estate without disclosing his interest in challenging the validity of the will (that is the second codicil) upon which he had advertised for probate. It would have been different, so the argument proceeded, if the matter had been expeditiously brought before the Court. In this regard counsel referred to In the Will of Steward, deceased [1964] VicRp 26; [1964] V.R. 179. That was a case in which the sole executor initially advertised for probate of his father's will made in February 1961 but subsequently, after a period of some months (precisely how many is unclear), sought to propound an earlier will made in August 1959.

413. Insofar as it is suggested that the action taken by the executor was expeditious, the facts of that case do not appear to me to bear out that proposition. None the less, it was submitted that the defendant in the present case should have revealed his intentions in relation to administering the estate by 11 September 1988 (a date at which a meeting in relation to the estate took place between the parties at the Toorak property).

416. The obligation to elect whether or not to administer the will and codicils expeditiously was said by counsel for the plaintiffs, to gain some statutory support from s.15 of the Administration and Probate Act 1958 which enables a Court to summon a named executor where a period of six weeks has elapsed and the executor has neglected to prove or renounce probate of a will. However any assistance which may be derived from this essentially enabling provision is extremely limited.

419. In the course of argument extracts from a number of texts were quoted by Mr. Galbally including, Principles of the Law of Trust, Ford & Lee 3rd ed. (1996) para.1740, where the learned authors distinguished between the roles of executors as personal representatives, and as trustees; and Williams Mortimer & Sunnucks, Executors Administrators and Probate 17th ed. (1993) p.40-41. There appear to be two aspects to the submissions based upon the principles enunciated in these texts. First, it was asserted that, in undertaking any activities attributable to the testamentary instruments, the defendant must be regarded as having accepted executorship and consequently was compelled to prove the will. If this is regarded as precluding an executor challenging testamentary capacity in relation to a codicil to a will, then it would conflict with the earlier enunciated principles as to the rights and duties of an executor. Particularly is this so, when any specific act in relation to the property the subject of the second codicil, was limited to requesting the first plaintiff to obtain a valuation of it. Certainly it was not argued before Mr. Justice Nathan that the defendant's prior actions prevented him from contesting the validity of the second codicil.

422. Ancillary to this argument was the assertion that there was a requirement to obey the instrument under which the defendant was appointed executor and not seek to contest the title of any beneficiary. The comments advanced in support of this proposition (see for example, Underhill's Law Relating to Trusts and Trustees (11th ed.) (1959) pp.259 and 384 are, however, directed towards the necessary assumption by an executor of the valid title of beneficiaries. This is quite different from a challenge to the validity of the testamentary instrument itself.

425. As for the submission made in reliance on Underhill (ibid) p.273 that:

"A trustee must be impartial in the execution of his trust, and not exercise his power so as to confer an advantage on one beneficiary at the expense of another."

It is, like many general statements, undoubtedly correct. It is, however, quite another matter to advance it as authority precluding an executor challenging a codicil the invalidity of which may advantage him as a beneficiary. Once the defendant chose to challenge (or even explore the possibility of challenging) the second codicil, there was a conflict between his interests as a beneficiary and his sister's interests as a beneficiary. But the mere fact of such conflict, which had its genesis in the differing dispositions in the will and second codicil, was not such as to prevent him embarking upon such challenge while remaining executor of the will and first codicil.

430. The second aspect of the plaintiffs' submissions based on the principles enunciated in the text appeared to be that the role of personal representative was such as required the defendant to administer the trust for sale of the property, but in a capacity other than that of a traditional trustee. In any event what was created, it was argued, was an immediate binding trust for sale. That concept is the subject of a definition in s.5 of the Administration and Probate 1958 but it carries the matter no further. It was asserted that such a trust did not include any power to postpone that sale.

433. Even if this is so it does not follow that there is any immediate obligation to sell. In the text referred to by Mr. Galbally, namely Ford (ibid) para.12180, the highest the trustee's obligation is put is that:

"... it is the duty of the trustee to sell as soon as a fair price can be obtained; although it is not the trustee's duty to sell as soon as possible at any price. Support for this proposition is found in cases where trustees have failed to sell quickly property which fell in value, but who acted in the honest exercise of their discretion, have not been held liable for breach."

437. Moreover, such a power of postponement may be found in the combined provisions of s.44(1)(b) of the Administration and Probate Act 1958 and s.32 of the Property Law Act 1958. Indeed, in Cox v. Archer [1964] HCA 18; (1964) 110 C.L.R. 1 at p.7 the High Court (Kitto, Taylor and Owen, JJ.) state:

"A trust for sale for whatever purpose with no special power of postponement must be exercised within a reasonable time. It does not imperatively oblige the trustees to sell at once, or at any precise, definite or particular time; they are entitled to use a reasonable discretion."

441. I interpolate that passing reference was made by both parties to s.49 of the Administration and Probate Act 1958. It reads:

"Subject to the foregoing provisions of this Act, a personal representative is not bound to distribute the estate of the deceased before the expiration of one year from the death."

445. It was faintly argued by Dr. Pannam that such a provision envisaged time for a personal representative to pursue any doubts about the validity of a testamentary document. It might have that effect but it may be doubted that it is specifically directed to the postponing of the sale of assets for such a period. As was pointed out on behalf of the plaintiffs, the section says nothing about the time limit for realisation of assets. On the other hand I note that Mr. Park, a solicitor specializing in probate practice called by the plaintiffs, referred to "the executors year" in relation to the time-frame for exercising powers given to an executor by a will. If this view be correct it would re-enforce the conclusion I have reached on the issue of postponement of sale.

448. In my view, whatever the distinction between the roles of trustee and personal representative, a trust for sale may be regarded as arising immediately under the testamentary instruments. As the statute and case law indicate, it carries with it a qualified power of postponement.

451. This discussion assumes, that, in the circumstances of this case, such a trust exists. However, on this topic it was the submission of Dr. Pannam that, in the situation disclosed by the second codicil, where legal and equitable estates were enjoyed by the same persons, there was no trust. In support of this proposition counsel cited Re Selous [1901] 1 Ch. 921; Re Turkington [1937] 4 All E.R. 501 at 504. Additionally he referred to the commentary in Ford & Lee, Principles of the Law of Trusts 2nd ed. (1990) para.502 which discusses the general implications of Re Selous in the following terms:

"The decision has been criticised. It is said that at law X and Y were joint tenants, each owning the whole whereas in equity X and Y had no interest in each other's share; each had a several title to one-half only. It follows, according to the criticism, that their estates in equity were not co-extensive and commensurate with their estates at law. Although many of the cases where a trust has terminated because the trustee has become identical with the beneficiary can be explained in terms of merger of legal and equitable estates, that explanation will not meet the case where the subject matter of the trust is itself an equitable interest. Nor will it serve where X is trustee of property subject to a trust-power to distribute amongst Y and Z and their respective residuary beneficiaries and X becomes the residuary beneficiary of both Y and Z. In that case the benefit of the trust-power is not an estate or interest but the trust would terminate. The reason for termination is the fundamental proposition that X cannot owe duties to X. If that is the basic reason, should it follow that where property is given to X and Y to hold as joint tenants upon trust for X and Y as joint tenants there will be an effective trust? The question is whether the addition of a trust deprives either party of the right to sever the joint tenancy without reference to the other. Although a settlor may have intended that result, a Court in England or Australia is likely to lay stress on the equitable interest given to the beneficiaries rather than duties intended by the settlor. Given that bias, the result would be a merger on the footing that the legal and equitable interest of the beneficiaries are co-extensive and commensurate."

455. It was put that what would occur in a case such as the instant one, would be the transfer of the property into the names of the first plaintiff and the defendant for co-operative sale or alternatively there could be an application for partition under the Property Law Act 1958. Moreover, any trust would be unusual in that each trustee, as beneficiary, would be entitled to pursue self-interest and each would hold a half interest in the property on trust for himself or herself.

458. Dr. Pannam very properly indicated that a different approach was found in some American authorities. One American commentator has remarked:

"A trust may be created in which the trustees are A and B and the beneficiaries are also A and B. In such a case it might be argued that A and B hold the property free of trust. It has, indeed, been held in some cases that in such a situation there is no trust, with the result that either may insist upon partition against the will of the other and contrary to the expressed intention of the settlor. It would seem, however, that there is no good reason for thus defeating the intention of the settlor. A rule which would defeat the intention of the settlor on the ground that there is necessarily a merger of the equitable in the legal interest would be purely arbitrary. .... It would seem to be the better view, therefore, that an intended trust is effectively created although the trustees and beneficiaries are the same persons, and that a valid trust is not extinguished merely because the trustees and beneficiaries later become identical. The mere fact that A and B originally are or later become the trustees of a trust of which the beneficiaries are A and B is not sufficient reason for terminating the trust if either does not consent or if such termination would be contrary to the intention of the settlor in creating the trust.": Scott & Fratcher The Law of Trusts (4th ed., para.99.5).

462. However, it is certainly arguable that, at the very least, where a trust has no active element, such as, for example, the receipt and distribution of income from the property subject to it, the English approach should prevail. That is the situation in the current case. Accordingly, in the terms of the bequest in the second codicil, I do not regard there as having been a trust created.

465. If the foregoing analysis is correct then, despite the temporisation and dissembling of the defendant, such conduct does not give rise to a breach of executorial duty.

468. Let it be assumed however that this analysis is wrong and that the defendant, in not revealing to Mr. Walsh, as the estate solicitor, and to his sister as his co-executor, his views as to his mother's testamentary incapacity and the inquiries he was pursuing until 7 February 1989, (being almost six months after the death of the testatrix) was in breach of an executorial duty. The next question which must be asked and answered is what was the result of such procrastination and pretence? If the defendant had revealed his views and the line of inquiry he was engaged upon at an earlier time (11 September is the date nominated by the plaintiffs), or immediately subsequent to receiving Dr. Chan's views on 11 November 1988, it is clear that any sale of the property could not have proceeded until the issue of testamentary capacity had been resolved. (I put to one side as to whether it was reasonable to expect the defendant to lodge a caveat prior to the receipt of Dr. Chan's advice, or the legal advice of Mr. Colbran or attempting to negotiate with his sister.)

471. It is central to any claim for damages by the plaintiffs that, had notification been received earlier, the whole issue could have been resolved and the property sold by mid to late 1989. Various figures for sale were canvassed by the plaintiffs but a sale price of the order of $3.1M was eventually settled upon in final submissions. I do not intend to go through the evidence upon which it was based. I will assume, for the sake of argument, that such a figure is an accurate one for the period up to mid to late 1989 and hence provides a basis for calculating any loss on the subsequent sale. This immediately raises the question as to whether the plaintiff has proved, on the balance of probabilities, that the conduct of the defendant prevented the issue of testamentary capacity being heard by the Court within a time frame to enable a sale within the specified period (extending it from February/March 1989 as originally claimed by the plaintiffs to mid to late 1989 as put in the final address.) The original time-frame may well have been abandoned following the evidence of Mr. Park. It was conceded by the plaintiffs (consistently with the evidence of both Mr. Park and Mr. Dickson) that no limited grant of probate could realistically have been achieved in the circumstances where, in disputing the second codicil, the defendant effectively sought to obtain the Toorak Road property outright.

474. I interpolate that it follows that the allegation in para.34A of the statement of claim is not sustainable.

477. Further, on the hypothetical time-frame presented to Mr. Park and based upon the lodging of a caveat within 14 days of the advertisement for probate of 27 September 1988, the earliest the matter would have been ready for trial was the first week in January 1989 (during the Court vacation). This is quite distinct from the matter being listed for trial, the conduct of the trial, and the delivery of judgment. Of course the reality of the situation is that the documentation relating to the application for probate was not ready for signature until the beginning of November 1988.

480. An examination of the subsequent course of events is instructive. Firstly there is no evidence that the first plaintiff sought to expedite proceedings in any way after receipt of notification of the defendant's attitude through the Corrs' letter of 7 February 1989. An offer of compromise contained in that letter was rejected two months later in the letter of 12 April 1989 sent by Mr. Walsh. Understandably no application was made for a limited grant of probate, but between the lodging of the caveat by the defendant on 26 April and the application for probate on 6 June, a further six weeks elapsed. The endorsement on the praecipe required Mr. Walsh to seek medical evidence which he commenced to do, albeit that ultimately the requisition was never answered. An order nisi having been made on 27 July 1989, the matter came before the Chief Justice of this Court on 10 August 1989 when it was placed in the Causes List. Thereafter further medical evidence was sought by each of the parties. The matter did not come on for trial until April 1990, some eight months later. No application for a speedy trial was made by the plaintiff in the interim, and there is no specific evidence before this Court as to the state of the Causes List at any relevant period of time. The clear inference is that neither party had expected the property market to drop dramatically in the near future. It is perhaps trite to observe that it was not in the interest of either that the value of the asset, the subject of their dispute, should be reduced.

483. The evidence also reveals that no formal demand was ever made by the first plaintiff of the defendant, to put the property up for sale by auction on any particular date. Moreover the evidence indicates that earlier offers of $3.1M and $3.2M, and the proposal to auction the property in December 1988 were never communicated to him. In these circumstances one is constrained to agree with counsel for the defendant that the objective facts indicate a claim for damages based upon hindsight.

486. Before leaving this aspect of the case I should refer briefly to the evidence of the real estate agents and valuers (relevantly being that given by Messrs. Major, Dodwell and Kech). These witnesses were called by the plaintiffs. The effect of their varying testimony is that the property market in the Toorak area remained strong (or at a peak) up to early 1989 (the month being unspecified) or until October 1989 or, with fluctuations, until mid-1990. Given the breadth of this time-frame, even if the defendant had lodged a caveat within 14 days of 27 September 1998 (the date of the advertisement in The Age newspaper) the issue of testamentary capacity may, or may not have been able to be resolved during the peak period of the property market. Similarly, taking the actual sequence of events following the notification of the defendant's intention to contest his mother's testamentary capacity on 7 February 1989 it may, or may not have been possible to resolve the matter while the market remained at a high level.

489. In the final analysis the state of the evidence is such that the plaintiffs have failed to demonstrate on the balance of probabilities the causal link between any delay occasioned by the defendant's conduct and the loss incurred upon the ultimate sale of the Toorak Road property.

492. It follows that any claim for damages based on the breach of executorial duty cannot succeed.

496. In light of the conclusions I have reached in relation to each of the causes of action, it is unnecessary to canvass the submissions of the parties on the subject of damages.

499. None of the claims of the plaintiffs are made out and accordingly I propose that judgment be entered for the defendant.