Plaintiff v Defendant

ADMINISTRATION AND PROBATE - Application by beneficiary for removal of the executor of their late father's estate - Administration and Probate Act 1958 (Vic), s 34 - Brito-Babapulle v Brito-Babapulle [2024] VSC 281 referred to - Significant delays in the administration of the estate primarily due to ongoing dispute between the plaintiff and defendant relating to the disposition of real property forming part of the estate - Where the defendant has not complied with terms of a settlement deed executed by the parties and has failed to finalise the estate - Defendant is disqualified from continuing to act as executor where she has failed to fulfil her executorial duties in a timely and responsible manner - Application granted.

1 These reasons concern a proceeding originally brought in December 2021 seeking the removal of the defendant, Ms Chrisoula Milekovic, as the executor of the estate of the late Stavros Vrantsidis ('estate'), who died in late 2019. The defendant is a daughter of the deceased, and the plaintiff, Ms Freda Vrantsidis, is the defendant's sister, and a co-beneficiary of the estate. The parties have been in dispute since early 2021 regarding the administration of the estate.

2 The originating motion filed on 9 December 2021 sought the removal of the defendant as the executor and her replacement by the plaintiff or some other person ('removal application'). The originating motion also sought a direction that any new executor would be justified in immediately listing and advertising for sale by way of public auction the main asset of the estate, being a residential property in West Preston ('property') and deducting any capital gains tax ('CGT') payable on the sale of the property from the defendant's share of the estate.

3 An application for leave to amend the originating motion was filed on 15 March 2024 ('amendment application'). Following a hearing on 4 July 2024, on 1 August 2024, I granted the plaintiff leave to amend the originating motion to seek the following relief, the property having now been sold:

A direction pursuant to r 54.02(2)(c)(ii) of the Supreme Court (General Civil Procedure) Rules 2015, the ... person appointed as the administrator of the estate by the Court, is justified in:

a) Refraining from seeking a Private Ruling from the Australian Tax Office in relation to capital gains tax payable on the sale of [the property];

(b) Instructing BNR Partners, or another suitably qualified accountant to apply for a tax file number and finalise the estate's tax returns;

(c) Administering the estate on the basis that the plaintiff and the defendant will each be liable for capital gains tax in relation to their respective half share of the proceeds of sale of the [property]; and

(d) Paying the plaintiff the balance of her entitlement to the estate within 7 days of receiving the final income tax assessment for the estate.

4 The property was sold after the parties entered into a deed of settlement dated 15 June 2022 ('settlement deed'). The settlement deed provided, among other things, that:

By 31 July 2022, the Defendant will engage a licensed real estate agent and prepare and list the [property] for sale by public auction...and upon settlement of the sale of the [property], the proceeds of sale will be paid to the Madgwicks trust account and combined with all other funds held by the estate in Madgwicks trust account and will be applied as follows:

...

(e) the balance of any funds remaining will be divided as follows ('residuary estate'):

(i) 50% to the Plaintiff ('the Plaintiff's Entitlement'); and

(ii) 50% to the Defendant ('the Defendant's Entitlement').

...

Within 14 days of the sale of the [property], the Defendant shall instruct BNR Partners to prepare and submit a private ruling application to the ATO for the purposes of determining whether Capital Gains Tax is payable by the estate on the sale of the [property].

Within 30 days of settlement of the [property], the Defendant shall instruct BNR Partners to prepare and file the final tax return for the estate.

The balance of the Plaintiff's entitlement as beneficiary shall be paid within 7 days of receipt by the Defendant of the final income tax assessment for the estate to the plaintiff's solicitors.

5 The potential liability for CGT arises from the fact that the property was not sold within two years of the date of the death of the deceased ('CGT grace period').

6 Both parties were represented by solicitors when they entered into the settlement deed. The settlement of the sale of the property was completed on or around 21 September 2022. The net proceeds of sale, less $100,000 (which was retained in the trust account of the defendant's former solicitors, Madgwicks, to meet any tax liabilities and other expenses ('estate funds')), were distributed equally between the plaintiff and the defendant in late 2022.

7 However, no private ruling has been applied for, and the amount due to the plaintiff from the estate funds has not been calculated and paid by the defendant. While it is not entirely clear from the evidence what is outstanding, the estate may have some liability to pay legal and accounting fees, and the defendant also claims that she is entitled to reimbursement from the estate on account of funds paid by her to the estate's former solicitors ('estate solicitors') in 2021.

8 On 13 September 2023, following the receipt of tax advice from the estate's accountants, the plaintiff made an offer to the defendant proposing that the following variations be made to the settlement deed:

That a private ruling is not sought from the ATO;

That any CGT liability be payable in the hands of each beneficiary as to their half share of the proceeds of the [property];

That BNR Partners be immediately instructed to prepare and file the final tax return for the estate; and

That within 7 days of a receipt of the final income tax assessment for the estate, the balance of our client's entitlement be paid to our trust account.

9 On 2 October 2023, the defendant, who was by then no longer represented by Madgwicks, issued a summons seeking the following relief against the plaintiff and her former solicitor, Ms Gabrielle McManus (together 'respondents'):

1. Pursuant to Section 29 of the Civil Procedure Act 2010 for contravention of the following Overarching Obligations -

(a) No. 16 - Paramount Duty;

(b) No. 17 - To act honestly;

(c) No. 18 - Requirement of proper basis;

(d) No. 21 - Not to mislead or deceive.

1. That this Application be conducted via Affidavit otherwise I would be extremely disadvantaged.
2. That the Plaintiff and/or the Plaintiff's Solicitor pay for all legal costs in relation to these Court Proceedings against me and also this Application.
3. That the Plaintiff solely pay for any Capital Gains Tax in relation to the sale of the [property].
4. That I be compensated for the damage these proceedings have caused me and continue to cause me as Executor and personally.

6. That the Court Proceedings against me be dismissed.

1. All such further or other Orders as this Honourable Court considers just and equitable.

('section 29 application').

10 Among other things, the issue of the s 29 application reinforced the plaintiff's concern that the defendant would not comply with her outstanding obligations under the settlement deed, which in turn precipitated the amendment application (see paragraph 3 of these reasons). The plaintiff also pressed the removal application.

11 The defendant opposed the amendment application on the basis that the proposed amendment:

...serves to conceal that the Plaintiff relied on overarching obligations contraventions to commence this [proceeding] against me - that the Plaintiff has no proper basis for this [proceeding] against me.

12 The defendant further submitted that the amendment application should be refused because the administration of the estate cannot be finalised prior to the resolution of the following issues:

(a) her claims in the s 29 application, which could affect the amount ultimately due to the plaintiff from the estate;

(b) the need to obtain appropriate tax advice, because the tax advice provided to the estate was based upon the settlement deed, which was invalid; and

(c) a dispute between the defendant and her former solicitors, Madgwicks, regarding the accuracy of the trust account statements provided to her by Madgwicks ('trust account issue').[1]

13 The amendment application and the s 29 application were both returnable on 4 July 2024. One would ordinarily expect that the s 29 application would be heard and determined at the conclusion of the proceeding, bound up as it is with the substantive merits of the case and the question of costs. However, all parties were keen to proceed with the hearing of the s 29 application, with the defendant submitting that its outcome would materially affect the administration of the estate, given that she sought compensation for any CGT liability incurred by her in relation to the sale of the property.

14 However, during the course of considering the amendment application and the s 29 application, I formed the view that it was inappropriate to determine the s 29 application prior to the trial of the proceeding. On 30 July 2024, my associate wrote to the parties as follows:

Her Honour is in the process of considering her decision in relation to the plaintiff's application to amend her originating motion and the defendant's s 29 application (including the defendant's application to dismiss the proceeding). Upon reviewing the parties' evidence and submissions, and noting the relatively modest size of the balance of the estate, her Honour considers that it is in the interests of the parties and the administration of justice to postpone the determination of the defendant's s 29 application and set the matter down for trial. A considerable amount of evidence has been filed regarding the administration of the estate, and the parties' submissions make their positions abundantly clear. Regardless of how the plaintiff's application to amend the originating motion is determined, the primary relief sought by the plaintiff in this proceeding remains the same, being the removal of the defendant as the executor of the estate. Her Honour is also concerned that there is a significant overlap between the issues raised in the s 29 application and the trial of the proceeding, such that determining the s 29 application beforehand may prejudice the trial of the proceeding.

15 On 1 August 2024, I made orders for the filing and service of further affidavits and submissions, and listed the proceeding for a further hearing on 24 October 2024. On 26 September 2024, the parties informed the Court that they did not require a further hearing.

16 Despite the modest balance of the estate funds and the relatively limited steps required to finalise the administration of the estate, the matters raised by the removal application and the s 29 application necessitated a detailed review of the entire course of the administration of the estate, as reflected in the length of these reasons. Further, there is a significant overlap between the issues raised in the removal application and those in the s 29 application, including issues concerning the defendant's conduct as executor, the validity and propriety of the plaintiff's claims in this proceeding, and the conduct of the respondents in this proceeding.

17 The plaintiff contended that the removal application should be granted because the defendant has indicated that she will not comply with her obligations under the settlement deed and finalise the estate until matters largely irrelevant to the administration of the estate have been dealt with. The estate remains unadministered more than five years after the death of the deceased.

18 The defendant asserted that her removal as executor is neither warranted nor justified, and maintains that she has acted in a manner consistent with her fiduciary duties and the best interests of the estate and the beneficiaries. She contended that the removal application is not founded on any substantive concerns regarding the proper administration of the estate, but is instead driven by personal animosity on the part of the plaintiff.

19 Accordingly, the issues in the proceeding are as follows:

(a) whether the defendant should be removed as the executor of the estate;

(b) if the defendant is to be removed as the executor of the estate, who should be appointed in her place;

(c) whether I should make the ancillary orders sought by the plaintiff in her amended originating motion;

(d) whether the s 29 application should be granted on the basis that the respondents misled the Court by making false statements and by failing to include certain documents ('executor's correspondence') in the affidavit filed by the plaintiff in support of the originating motion ('original affidavit'),[2] and whether the respondents breached their overarching obligations by commencing this proceeding without a proper basis.

The s 29 application

20 Turning now to the s 29 application, s 29(1) of the Civil Procedure Act 2010 (Vic) ('CPA') provides as follows:

(1) If a court is satisfied that, on the balance of probabilities, a person has contravened any overarching obligation, the court may make any order it considers appropriate in the interests of justice including, but not limited to -

(a) an order that the person pay some or all of the legal costs or other costs or expenses of any person arising from the contravention of the overarching obligation;

(b) an order that the legal costs or other costs or expenses of any person be payable immediately and be enforceable immediately;

(c) an order that the person compensate any person for any financial loss or other loss which was materially contributed to by the contravention of the overarching obligation, including -

(i) an order for penalty interest in accordance with the penalty interest rate in respect of any delay in the payment of an amount claimed in the civil proceeding; or

(ii) an order for no interest or reduced interest;

(d) an order that the person take any steps specified in the order which are reasonably necessary to remedy any contravention of the overarching obligations by the person;

(e) an order that the person not be permitted to take specified steps in the civil proceeding;

(f) any other order that the court considers to be in the interests of any person who has been prejudicially affected by the contravention of the overarching obligations.

21 The s 29 application is based on two specific complaints against the respondents, and one more general complaint. The first specific complaint is that the respondents failed to disclose the executor's correspondence in the original affidavit. The defendant claims that this non-disclosure was in breach of the overarching obligation to act honestly (s 17 of the CPA), and the overarching obligation not to mislead and deceive (s 21 of the CPA). The defendant contends that if the plaintiff had disclosed the executor's correspondence when she commenced this proceeding, it would have been clear to the Court that the application to remove the defendant as executor had no proper basis and the plaintiff would not have been granted leave to bring her claims in the originating motion.[3] The second specific complaint is that the plaintiff's statement to the effect that the defendant had failed to respond to some of Ms McManus's correspondence was untrue.

22 The defendant's general complaint is that the respondents initiated this proceeding without any proper basis to do so (s 18 of the CPA), and as such, the proceeding should be dismissed, and the respondents should pay her costs of the proceeding to date, and reimburse her for any CGT liability incurred in connection with the sale of the property. The defendant also seeks unspecified compensation for the trauma and the adverse impact upon her health caused by this proceeding and the associated disputes.

23 The respondents oppose the s 29 application, asserting that the plaintiff was under no legal obligation to disclose the executor's correspondence, given that this proceeding was not brought ex-parte and as such, the defendant's allegations of procedural unfairness are misconceived. They deny that the original affidavit contained any false or misleading statements. The respondents contend that the defendant's complaint regarding CGT liability is without merit, as any such liability arises as a direct consequence of the defendant's actions as executor, including her alleged failure to administer the estate in a timely manner. The respondents further contend that the defendant's claim for compensation on the grounds of distress and adverse health effects lacks a proper basis and should be dismissed.

24 The following evidence was relied upon by the parties in relation to both the removal application and the s 29 application:

(a) the original affidavit, which was sworn by the plaintiff on 8 December 2021;

(b) an affidavit sworn by the defendant on 10 January 2022 ('reply affidavit');

(c) an affidavit sworn by the defendant on 27 September 2023 in support of the s 29 application;

(d) an affidavit sworn by Mr Christien Corns, the solicitor for Ms McManus, on 17 November 2023;

(e) affidavits sworn by the plaintiff on 14 February 2024 and 15 March 2024 in support of the amendment application, and the defendant's affidavit in opposition to the amendment application sworn on 10 April 2024;

(f) an affidavit sworn by Ms McManus on 16 May 2024;

(g) an affidavit sworn by the defendant on 22 May 2024;

(h) an affidavit sworn by the plaintiff on 12 August 2024; and

(i) an affidavit sworn by the defendant on 26 August 2024.

25 On 13 August 2024 the defendant filed a Notice of a Constitutional Matter seeking that an Attorney-General intervene to require me to deliver my decision with respect to the s 29 application prior to the parties taking any further steps in the proceeding. Further, it appears from the court file that the defendant has applied to the Court of Appeal from the orders I made on 1 August 2024 allowing the amendment application and directing that the s 29 application be dealt with at the trial of the proceeding. However, no Attorney-General has given notice of any intention to intervene in this proceeding, and, as far as I am aware, the application for leave to appeal has not been heard or determined.

26 In the original affidavit, the plaintiff deposed as to the following matters:

(a) uncontroversial factual background matters regarding the terms of the will and assets of the estate;

(b) the negotiations between her and the defendant in 2020 and early 2021 regarding the defendant's proposal that the defendant purchase the plaintiff's share of the property ('buy-out proposal'), and the plaintiff's concerns that the defendant had made little progress in readying her own property ('Doncaster East property') for sale to enable her to fulfil her obligations under the buy-out proposal;

(c) she briefly contemplated that the property be transferred to the beneficiaries prior to the expiry of the CGT grace period;

(d) she deposed as follows:

On 23 March 2021, in the letter I wrote to the Defendant sent by email, I said, 'I do not want to own dad's house in any capacity. I made it clear that I wanted the property to be sold and we both get our share - 50/50'. I wrote that she had three choices:

(a) to get a bridging loan and buy me out within the two years;

(b) to leave the property in the estate and whatever happens in relation to Capital Gains happens;

(c) to vest the property in her name, but for her to sign a loan agreement acknowledging how much she owes me.

...

I remained concerned about the CGT ramifications of not selling the [property] within the two year period from our father's death. I did not want to take on the responsibilities of being a co-owner of the [property], including the usual liabilities and outgoings associated with a property. I did not want to be a co-owner with the Defendant because I did not want to expose myself to future issues with her or to a future CGT liability.

Between 26 March 2021 and 16 April 2021, the Defendant and I sent email correspondence to each other, in which she maintained (amongst other things) that we had reached an agreement to put the [property] in both our names prior to the two years period expiring if she were unable to complete the renovations/sale of the Doncaster East Property in time. She did not acknowledge my request in my letter dated 23 March 2021 that the property be sold and that I did not want to become co-owner with her of the [p]roperty ...

(e) in about April 2021 she engaged Ms McManus to act on her behalf. Ms McManus corresponded with the estate solicitors urging that the property be sold. The estate solicitors responded by saying that the defendant had instructed them that the parties had made an agreement in May 2020 regarding the buy-out proposal and the administration of the estate ('informal agreement');

(f) on 30 June 2021, Ms McManus wrote to the estate solicitors, as follows:

We refer to the above matter and your letter dated 10 June 2021.

Despite two letters to your client providing her with the opportunity to progress this matter, your client appears unwilling to make any attempt to resolve the dispute.

Your client's conduct gives rise to genuine concern as to her capacity to honestly manage the conflict that exists between her role as an Executor/Trustee of the Estate and her interest as a beneficiary given her interest in acquiring [the property].

We accordingly provide her with this last letter before filing an application for a direction that the property be sold and seeking her removal as Executor and seeking she pay our costs.

1. Legal and Fiduciary Obligations of Trustees

As Executor and Trustee, your client holds legal title to the Estate assets subject to the trusts established in Stavros' last Will for the benefit of both herself and our client as the beneficiaries of the Estate.

Trustees owe fiduciary duties to the beneficiaries of a trust who hold the equitable title in those assets. Those fiduciary duties include:

a. the duty to act honestly and in good faith;

1. the duty to act with due care, skill and diligence in relation to the best interests of beneficiaries;

c. the duty not to profit from the trust; and

d. the duty to avoid conflicts of interests (the no-conflict rule).

At this stage, we submit that your client is in breach of at least three of the above duties.

2. Consent to acquire the property

The only means by which your client may acquire the property herself, is with·our client's informed consent. To be absolutely clear, your client does not have our clients informed consent to any arrangement at this stage.

Our client has made a very clear offer to provide her informed consent to your client's acquisition of the property on certain conditions, as stated in our letter dated 27 April 2021. To summarise, that offer allowed your client to purchase our client's share of the property for the agreed amount of $550,000 repayable upon the sale of [the Doncaster East property] or within 6 months of the agreement, whichever was the sooner.

Our client is very keen to resolve this matter and despite our advice, is agreeable to making further concessions to resolve this matter promptly.

Our client has instructed us to make the following final offer to your client:

1. Our client will allow your client to acquire our client's half share on an agreed value of $550,000 (the Payment) conditional upon:

   1. Your client entering into a Loan Agreement in which our client will loan your client the amount of $550,000 to acquire her interest in the property (the Loan);

   2. The Loan will be secured by mortgage against the property and is repayable within 14 days after settlement of the sale of your client's own property;

   3. Your client be solely liable for any stamp duty, transfer costs, related disbursements and any capital gains tax in respect to the transfer and forever indemnify our client in respect to same;

   4. The agreement be documented by way of a Deed of Family Arrangement drawn by this firm and the estate be liable for the costs of the Deed in the amount of $1750;

   5. Your client be solely liable for the costs of Loan Agreement and Mortgage in the amount of $2400;

   6. In the event that your client fails to make the Payment on the above terms, the Property be sold, and following costs of sale, the proceeds be split 50/50 with your client to be solely liable for any capital gains tax on the sale.

...

(g) the letter above ('30 June offer') then went on to state that the offer was made in accordance with the principles in Calderbank v Calderbank,[4] and that if the defendant failed to accept the 30 June offer, and then refused to place the property on the market, the plaintiff would apply to the Court for directions that the property be sold. Further, if the defendant continued to assert that the parties had made an agreement in accordance with the informal agreement, the plaintiff would apply to the Court to remove the defendant as the executor of the estate;

(h) on 15 July 2021, the estate solicitors wrote to Ms McManus accepting '[the plaintiff's] offer of a gift';

(i) later that day, Ms McManus responded as follows:

We refer to your letter dated 15 July 2021 in which you state your client has agreed to our client's offer.

Please have your client make payment to our trust account in the amount of $2400 which will be applied to the cost of the Mortgage and the Loan Agreement.

...

Once payment is confirmed we will commence work on drafting the Deed of Arrangement and will arrange for the loan documentation to be drawn together with the mortgage.

We confirm that our client's offer was for a loan of $550,000 to be made to your client by our client. There is no gift component.

Please provide an update on the state of renovations on your client's property and when it will be ready for sale as this will inform our client as to a potential loan repayment date.

(j) despite a follow up email from Ms McManus to the defendant on 2 August 2021, no response was received from the estate solicitors until 31 August 2021, when the estate solicitors confirmed the defendant's agreement to the terms of the 30 June offer, as well as a repayment term being on the earlier of the date of the sale of the Doncaster East property or one year from the date of the agreement, and confirmed that they had received cheques from the defendant for stamp duty and other fees associated with the proposed transfer of the property;[5] and

(k) on 14 September 2021, a draft loan agreement ('loan agreement') and draft Deed of Family Arrangement ('DFA') were sent to the estate solicitors. The DFA provided, among other things, as follows:

That within 14 days of signing this Deed:

(a) Beneficiary 1[6] and Beneficiary 2[7] enter into a Loan Agreement in which Beneficiary 1 will loan Beneficiary 2 the amount of $550,000 on the terms contained in the draft Loan Agreement attached to this Deed (Loan Agreement).

(b) Beneficiary 2 will make Payment to the Estate and the Executor/Trustee will transfer to Beneficiary 2 the freehold title to the Property (Transfer). The Transfer will be made in satisfaction of Beneficiary 2's half share legacy in the residue of the Estate.

For clarity, the amount of $550,000 will be notionally advanced from Beneficiary 1 as a loan to Beneficiary 2 with which Beneficiary 2 will make Payment to the Estate;

(c) Beneficiary 1 will secure a first registered mortgage over the Property directly following the Transfer; and

(d) The Executor/Trustee will make a notional distribution of $550,000 to Beneficiary 1 in satisfaction of her half share legacy in the residue of the Estate.

27 The DFA also provided that, in the event of any default by the defendant under the loan agreement, the plaintiff could, at her discretion, require the sale of the property in order to discharge the amount owing to her under the loan agreement.

28 However, neither the loan agreement nor the DFA were executed by the defendant. Instead, what transpired (based upon what was deposed to in the original affidavit, noting the defendant's submissions regarding the absence of any reference to the executor's correspondence in the original affidavit) was as follows:

(a) on 4 October 2021, Ms McManus wrote to the estate solicitors, as follows:

Our client received an email from your client on 10 September 2021 stating that she had instructed your office to take all steps to finalise the matter within three weeks. The two year anniversary of the date of death of the deceased is coming up shortly on 31 October 2021, which is when the capital gains tax exemption on the sale of the property expires.

We would be grateful if you could please provide an update as to the progression of this matter as matter of urgency. Understandably, our client is very anxious to ensure that she bears no capital gains tax liability as a beneficiary of the estate on account of your client's delay and accordingly reserves all rights.

(b) on 14 October 2021, the defendant wrote to the plaintiff, as follows:

Just confirming that due to the delay caused by your Solicitor, on the 28th September I instructed the Estate Solicitor to transfer the Estate property to the two beneficiaries thereby ensuring that no party is liable for Capital Gains Tax from when the property was originally purchased in 1977.

(c) on 15 October 2021, the estate solicitors wrote to Ms McManus as follows:

We have received fresh instructions from our client that she will not proceed to purchase your client's share of the property on a mortgage back arrangement.

Our client requires the property to be transferred into the beneficiaries' names in accordance with the terms of the deceased's Will.

As you are aware we have a tight deadline to take any action that the parties agree to, to avoid the imposition of capital gains tax on the estate.

We would be pleased to receive your advice as to whether your client will agree to this transfer taking place.

We look forward to hearing from you at an early date.

(d) on 19 October 2021, the plaintiff sent the defendant a lengthy email. The email commenced with the following statement:

I cannot believe that we are in this position. You should have told me the truth from the start, you had a legal and moral obligation to tell me, but you chose to hide pertinent facts from me. And even at this late stage you are still withholding information and expecting me to just blindly sign. I will not be forced to make a blind decision, and the law does not allow you to force a person to make a blind decision. So what you are asking your solicitor to do, that is transfer the property into our names without my approval or a court order, is not a real option.

(e) the plaintiff's email then went on to outline and comment upon various options as to how to proceed, concluding as follows:

I suggest you read the letter my solicitor sends to your solicitor so you can make an informed decision. The letter will be sent midday today. To ensure there are no further delays by your solicitor I will send the copy she sends me to you as well. I will read her letter as well and make my final decision, but unlike you I cannot make an informed decision because I don't know what is happening.

So my choices are to relinquish my rights to Dad's property; go to court to have you removed as executor and get the property sold and divided; or keep negotiating after the 31 October and you can sue me as you threatened.

Your choices are to sign the loan agreement and family deed that is already prepared and we can renegotiate the terms afterwards or you take me to court.

It seems to me that the loan agreement is the one option that gives us the breathing room we need to fix this situation. It is the one thing that gives me evidence that you are prepared to negotiate in good faith and more importantly that allows you to fulfil dad's wishes.

The next move is yours. I really do strongly suggest you ring (don't email) the estate solicitor and make an appointment to sign the documents. You have my word, in writing in this email, that we will renegotiate the loan arrangement to both our satisfaction.

(f) on 19 October 2021, Ms McManus sent the estate solicitors a letter refuting in some detail any allegations of delay on her part, and went on to state as follows:

Options

Our client is desirous of resolving this matter without litigation.

As she has reiterated constantly throughout the matter, she does not wish to receive the property in species as a beneficiary.

Your client cannot lawfully transfer the title to our client without her consent as transferee.

Accordingly, your client has two options:

1. to reach agreement with our client;

2. to make an application to court for directions.

We have advised our client that given your client's conduct, the only reasonable option available to her is to make an application to Court. She has strong case, and is likely to obtain an order that your client be removed as executor, the house sold and that her costs be paid by your client. Nonetheless our client maintains that she is desirous of keeping the matter out of court to save expense, time and further emotional energy, not just for herself but also for your client.

Matters for your client

Our client has expressed a desire to be released from the ongoing trauma this matter is causing her and to disclaim her remaining interest in her father's estate.

If she were to relinquish her rights, which is against our advice, your client would need to consider the possible consequences of retaining the property as her asset, and thereby likely to form part of her matrimonial property pool potentially available for division in any family law property matter. Furthermore, in the event your client obtains or hopes to obtain government support payments, she will need to consider the effect the property will have on her assets test and how the gifting rules will apply to her should she later wish to dispose of some or all of the property for less than market value.

We await your client's suggestion for expedient resolution of this matter.

(g) on 26 October 2021, the defendant sent the following email to the plaintiff and the estate solicitors:

On the 24th October at 14:45pm, I provided beneficiary Freda Vrantsidis with a copy of my email sent to you on the 22nd October at 9:00am and I have provided you with Freda's response dated 24th October at 16:38pm.

The Agreement, Family Arrangement and Loan Agreement are between the two beneficiaries. Please refer to my letter to you dated 28th September sent via Express Post. All parties have a copy of this.

The evident obsession with entwining my role as Executor with matters between the two beneficiaries - is shameful.

This matter started with what beneficiary Freda Vrantsidis - wants and does not want - and it appears that it will end - with what beneficiary Freda Vrantsidis - wants and does not want.

When you are served with legal documents against me, would you please provide me with copies immediately.

(h) on 26 October 2021, Ms McManus wrote to the estate solicitors, as follows:

We refer to your letter dated 15 October 2021, in particular your request for our client's agreement for "the property to be transferred into the beneficiaries' names in accordance with the terms of the deceased's Will".

With due respect, your reading of the Will is incorrect. The Will establishes a trust for sale and your client as executor is under the obligation to sell the property within a reasonable time and for a fair price.

We direct your attention to clause 4, in which it is expressly stated that the executor is "to sell call in and convert into money so much and such parts of my said estate as shall not consist of ready money".

Whilst clause 5 empowers the trustee to postpone the sale, such postponement still attaches to the requirement to sell the property and distribute the proceeds to the beneficiaries listed in clause 4.

Accordingly, your client has no right to transfer the property in specie according to the terms of the Will.

Sale

We hereby request your client's agreement within 7 days of this letter that she will immediately place the property on the market for sale. If notice of her agreement is not received by 5pm on Wednesday 3 November 2021 we will immediately thereafter make an application to the Supreme Court that your client be removed as executor, that the property be sold and that your client (in her personal capacity) pay our costs in this proceeding.

Noting that your client's last minute retraction of her agreement to a settlement of this matter has resulted in our client being forced to foreshadow this action a few days before the expiry of the two-year capital gains tax exemption period, we ask for your response as a matter of urgency and no later than 5pm on 3 November 2021. Should litigation commence before the end of the two year exemption period, an application of the safe harbour rule referred to in our letter dated 19 October 2021 may arguably apply.

(i) the plaintiff deposed that no response to Ms McManus' letters of 19 October 2021 and 26 October 2021 was received from the estate solicitors or the defendant,[8] and deposed as follows:

Throughout this matter, I have tried my best to accommodate the Defendant's desire to retain the [property]. I delayed making this application earlier, because I hoped that the Defendant would respond firstly to my solicitor's request for timelines for the sale of her Doncaster East Property as all that I initially wanted was certainty as to the terms of any agreement reached.

Based on the protracted negotiations between myself and the Defendant and through our solicitors, including the Defendant's recent withdrawal of her agreement to purchasing my half interest in the [property], I believe I have exhausted all possible avenues of achieving agreement with her.

The [property] remains unsold and the two-year CGT grace period has now expired. The Estate remains largely unadministered despite my father dying more than two years ago and the Defendant being granted probate 21 months ago.

29 The reply affidavit was prepared by the defendant personally. In the reply affidavit, the defendant deposed to the history of negotiations between herself and the plaintiff concerning the administration of the estate and the buy-out proposal, in summary, as follows:

(a) initially, the plaintiff and the defendant had agreed to sell the property, but following the onset of COVID-19 lockdowns both parties became concerned that property values would fall;

(b) a spreadsheet prepared by the plaintiff at around this time, and an email sent by the plaintiff to the defendant in March 2021 indicated that the plaintiff would accept $550,000 for her share of the property, and that the plaintiff was also prepared for the property to be transferred into their names as co-owners should the property not be sold within the CGT grace period;

(c) on 20 May 2020 the parties entered into the informal agreement, which included the following terms:

(a) [The plaintiff accepted] the sum of $550,000 for her share of the estate property based on the probate figure at $1,100.000 [sic].

(b) The Plaintiff also agreed that she will receive payment after renovating and from the sale of the Doncaster East property.[9]

(c) The Plaintiff further agreed that in the event the Doncaster East property was not finished and sold before the second anniversary - the Plaintiff agreed to transfer the estate property into our names as co-owners.

(d) There was no time frame for payment due to the uncertainty covid presented and also the Plaintiff was prepared to wait for two years after the second anniversary for her share of the estate property as confirmed by Plaintiffs Spreadsheet marked "CM-6" herein.

(a) [the defendant] would not claim Executor fees for administering the Estate or out-of-pocket expenses, for example, petrol costs driving to and from the Doncaster East property, for example, to maintain the gardens.

(b) The Estate would pay for removal of waste, utility bills, rates and home insurance whilst the property remained in the Estate and for legal costs associated with finalising the Estate.

(c) That if the Doncaster East property was not finished and sold within the second anniversary that we would transfer the estate property into our names as co­owners, thereafter -

(i) That [the defendant] will live in the property.

(ii) That [the defendant] will pay utility expenses, rates and home insurance;

(iii) The property needs work therefore you cannot rent it out and for this reason the Plaintiff would not charge rent for her share of the property.

(iv) To discuss Capital Gains Tax if and when we needed to.

(e) subsequently, she opened two bank accounts in the name of the estate, and on 5 August 2020 made a partial distribution of the funds of the estate to the beneficiaries;

(f) in early 2021, she informed the plaintiff that it was likely that they would need to transfer the property to them both. She arranged for the removal of an asbestos-clad shed on the property and told the plaintiff that she would move into the property to expedite the renovations on the Doncaster East property in preparation for its sale;

(g) the plaintiff expressed no concerns about the informal agreement until after hearing a fleeting remark about the value of the property from a tradesperson, following which the plaintiff engaged Ms McManus to represent her;[10]

(h) on 23 March 2021, the plaintiff sent her a lengthy email (see paragraph 26(d) of these reasons), which the defendant contended confirms the plaintiff's agreement to the buy-out proposal;

(i) a series of further email exchanges took place between March 2021 and May 2021, following which there was correspondence between Ms McManus and the estate solicitors, culminating in the 30 June offer;

(j) in relation to these negotiations, the defendant deposed as follows:

In our 2020 agreement there were two options as to how the Estate would be finalised:

(a) If the Doncaster East property was finalised and sold before the second anniversary, the Plaintiff would be paid out and the estate property transferred into my name.

(b) If the Doncaster East property was not finalised and sold before the second anniversary, that the Plaintiff and I would transfer the estate property into our names as co-owners as confirmed by the Plaintiff in her long letter attached to her email dated 23rd March 2021 (Exhibit marked 'CM-9'. herein) wherein the Plaintiff stated that she-

"agreed to put things in our names if you could not settle the selling of your home and the estate within the two years."

The 30th June 2021 offer provided a third option - a Loan Agreement.

I accepted this third option offer and -

(a) On the 16th July 2021, I organised a personal NAB Bank cheque dated 16th July 2021 payable to the Estate Solicitors Phillips and Wilkins in the sum of $2,400 for Loan Agreement.

(b) Also as part reimbursement to the Estate (for removal of asbestos shed on the estate property as agreed) on the 28th July 2021, I organised a personal NAB Bank Cheque in the sum of $1,750 for the Deed of Family Arrangement.

(k) the steps she took to finalise the estate in August 2021, including closing the estate's bank accounts;

(l) she received the loan agreement and DFA from the estate solicitor on about 16 September 2021. She deposed as follows:

Looking at the paperwork, it is obvious that fresh terms and conditions were inserted without my knowledge and consent and I sought legal advice from the estate solicitor who confirmed that 'there are some differences'.

There was no time for further negotiations - ...

(m) on 28 September 2021, the defendant wrote to the estate solicitors, as follows:

The agreement between the two beneficiaries last year determined the outcome of the Estate property, how estate monies would be distributed and provided two options as to how the Estate would be finalised - leaving the only task remaining as Executor - to instruct the Estate Solicitor how and when to finalise the Estate. Any steps the beneficiaries have taken thereafter was, is and continues to be - between the two beneficiaries. I also wish to point out that a family arrangement is exactly that, a family arrangement - an arrangement between family members, in this case - between the two beneficiaries. Beneficiary Freda Vrantsidis provided a third option as to how to finalise the Estate via an offer this year. The core ingredients of the agreement between the two beneficiaries last year- did not change. We are approaching three months since this third option was offered however, to date, the Solicitor representing Beneficiary Freda Vrantsidis has failed to produce original paperwork pursuant to this third option thereby enabling the Estate to be finalised before the end of this week as planned. Taking all of the above into consideration, would you please take all necessary steps in order to finalise the Estate pursuant to the second option as fo1lows. Would you please transfer the Estate property to the two beneficiaries. Would you please inform Ms McManus of the above.

(n) she emailed a copy of the above letter to the plaintiff on 15 October 2021;

(o) the contents of the executor's correspondence (see paragraphs 31 to 42 of these reasons);

(p) it was the plaintiff's refusal to consent to the transfer of the property to the beneficiaries prior to the expiry of the CGT grace period which resulted in the estate not being finalised within the CGT grace period; and

(q) the defendant deposed as follows:

With the $65,014.58 that I received from my father's Estate - as per Exhibit "CM-8 herein - l purchased shares with this money and sold some of these shares in order to meet the requirements of our Agreement.

Expecting that the Estate would be finalised well before the second anniversary, on the 13th August 2021, 1 closed the Estate Bank Account that I was administering and sent balance estate monies to the Estate Solicitor to finalise the Estate.

As a result - with the sale of share money - from the 17th August 2021 to date - I am personally paying for the estate property expenses.

I have learnt the most hardest of ways that the Plaintiff- cannot be trusted.

The Plaintiff's Spreadsheet marked "CM-6" herein and also the Plaintiffs long letter attached to her email dated 23rd March 2021 marked "CM-9"' herein - confirms that the Plaintiff - cannot be trusted.

The Plaintiff's Affidavit sworn on the 8th December 2021 in these proceedings - confirms that the Plaintiff - cannot be trusted.

And now the Plaintiff asks this Honourable Court to disregard and to dismiss my father's wishes and remove me as Executor.

The Plaintiff has absolutely no regard whatsoever as to how the Estate has been affected or my role as Executor - let alone respect the wishes of our father - that I be the Executor of his Will - why then would the Plaintiff have any regard or concern for me as a sister.

30 The defendant exhibited the executor's correspondence to the reply affidavit, which is described in the following paragraphs of these reasons.

31 On 10 September 2021, the defendant emailed the plaintiff, stating as follows:

Just letting you know that I have instructed the Estate Solicitor to proceed to take all steps necessary in order to finalise Dad's Estate within the next three weeks.

32 On 14 October 2021, the defendant again emailed the plaintiff, asserting that the delays in finalising the estate were due to Ms McManus' conduct, and confirming that she had instructed the estate solicitors to transfer the property to the plaintiff and the defendant as co-owners.

33 On 15 October 2021, the defendant sent the following email to the plaintiff:

I refer to my emails to you dated 10th September and 14th October.

Attached herein letter dated 28th September sent to the Estate Solicitor via Express Post and delivered on the 29th September.

The Executor decision to transfer the property to the two beneficiaries was made in order to - protect - all parties from being liable for Capital Gains Tax from when the property was originally purchased in 1977.

34 The above email attached a letter from the defendant to the estate solicitors dated 28 September 2021 (see paragraph 29(m) of these reasons).

35 On 16 October 2021, the plaintiff responded, copying in Ms McManus, as follows:

1. The delays were caused by you and your solicitor - the loan and deed were sent on the 14 Sept to your solicitor.
2. Letter dated 14. Oct from your solicitor advises he has received new instructions from you.

3. Dad's wishes were to sell the property NOT put it in our names.

1. and capital gain in Dad's case is from date of death NOT date of purchase.

I have instructed my solicitor of my next step but she has asked me to think it over the weekend. So I suggest you make yourself available to your solicitor so that there are no further delays in him trying to contact you for further clarification or further instruction.

36 On 18 October 2021, the defendant emailed the estate solicitors, copying in the plaintiff, confirming her instructions to transfer the property to the beneficiaries:

It is not about what the beneficiaries want or do not want. There are ten working days before the end of the second anniversary. To ensure that the property does not remain in the Estate so that no party will be liable for the consequences. Please transfer the property to the two beneficiaries and finalise the Estate immediately. There is $4,141.77 in the Estate Account held in your Trust Account which should cover costs associated with finalising the Estate and I trust as my Solicitor that you will finalise the Estate immediately as instructed. Whatever the parties wish to do thereafter - is between the parties.

37 Later that day, the plaintiff emailed the estate solicitors, copying in the defendant and Ms McManus:

I have provided instructions to my solicitor to contact you today by phone and email in order to finalise the estate. But given my sister's email, I will respond to you directly. The property will go in my sister's name only (no loan agreement) and then after that it is up to her what she intends to do to honour my father's wishes.

I advised her right from the start that I had no interest in owning that property and that I did not want to incur any costs associated with that property. I have no idea what my sister's intentions are in terms of selling her property own property in order to pay me out and I cannot sign my name under such ambiguous circumstances.

So please put that property in my sister's name. I give you authority to do so. If the only way I can do that is to relinquish my rights to that property, then I do so.

Please send me what papers need to be completed. I want this finalised ASAP.

38 Later again on 18 October 2021, the plaintiff wrote to the defendant, as follows:

I want you to take this serious [sic] - you cannot force me to become a joint owner and you cannot force the solicitor to force me to become a joint owner of that property. I have a right to withdraw my claim to that house, you cannot stop me doing that. I have instructed my solicitor to inform them that I have withdrawn my rights to the house.

You still have a chance to do the right thing - which currently is to put that property in your name for now. And as per your email, we can then work out the rest.

Please don't be stubborn. The only person who will end up losing is you Chrisoula, so please talk to your solicitor and put that property in your name. Not doing so will only make this worse for you.

I will not put that property in our name. Please put the house in your name.

39 On 22 October 2021, the defendant provided the following instructions to the estate solicitors:[11]

To ensure that the property does not remain in the Estate indefinitely - please:

(a) transfer the property to the two beneficiaries;

(b) distribute the remaining Estate Funds in the sum of $4.141.77 - held in your Trust Account on behalf of the Estate - as detailed in my above letter/authority to you dated 20th October;

(c) and finalise the Estate immediately.

There are now six working days before the second anniversary therefore please inform Ms McManus of the above immediately.

I have nothing more to add as Executor.

40 On 26 October 2021, the defendant sent the email to the estate solicitors reproduced at paragraph 28(g) of these reasons.

41 On 27 October 2021, the defendant sent a further email to the estate solicitors, copying in the plaintiff:

I refer to my email dated 22nd October sent at 9:00am and to my further email dated 26th October sent at 8:45am. All parties have copies.

Freda's Solicitor had approximately one month to file a Court Application against the Executor decision. Please refer to my letter dated 28th September sent via Express Post and delivered on the 29th September.

Now there are three working days before the end of the second anniversary.

42 Finally, on 28 October 2021, the defendant sent the following email to the estate solicitors, copying in the plaintiff, referring to Ms McManus' letter of 26 October 2021 (see paragraph 28(h) of these reasons):

As Executor, under the circumstances, please refer to the following:-

1. My letter dated 28th September 2021 sent via Express Post.

2. My email dated 18th October sent at 8:37am.

3. My email dated 22nd October sent at 9:00am.

All parties have copies of the above.

I believe I have made the right decision, taking into consideration that the alternative consequences as detailed in legal advice to me and the consequences as outlined in Ms McManus' recent letter dated 26th October.

As I have stated previously, it is not about what the beneficiaries want or do not want.

It is about what is best for the Estate - and ultimately the two beneficiaries -under the circumstances.

And that is, I believe, that the Estate be finalised before the second anniversary and this, under the circumstances, can only be achieved if the property is transferred to the two beneficiaries as per my above correspondence.

Mr MacKenzie, you have my authority dated 20th October sent via Express Post and delivered on the 21st October in order to transfer the property to the two beneficiaries and finalise the Estate. If you require a fresh Electronic version to transfer the property to the two beneficiaries, please send it to me immediately.

(Emphasis in original).

43 Following the issue of this proceeding on 9 December 2021, the proceeding was referred to mediation, which was held on 14 June 2022. The plaintiff was represented at the mediation by Ms McManus, and the defendant was represented by Madgwicks. Following the execution of the settlement deed, the proceeding was adjourned by agreement on a number of occasions to allow time for the parties to comply with their obligations under the settlement deed. The s 29 application was issued on 2 October 2023, and the amendment application was filed on 15 March 2024.

44 The defendant filed an affidavit in support of the s 29 application on 2 October 2023, deposing that the respondents' breaches of the overarching obligations were evidenced by a comparison of the original affidavit and the reply affidavit. She deposed further as follows:

(a) the dispute between the parties in October 2021 was not about the acquisition of the property by the defendant, it was about how the estate should be finalised;

(b) the plaintiff wanted to transfer the property to the defendant alone, which the defendant refused to do; and

(c) she believed that she was acting in the best interests of the estate and the beneficiaries in taking steps to transfer the property to the beneficiaries prior to the expiry of the CGT grace period.

45 On 16 November 2023, Mr Christien Corns of K&L Gates, the solicitors for Ms McManus, wrote to the defendant inviting the defendant to withdraw the s 29 application, or alternatively, to provide a properly particularised summons. Later that day, the defendant responded as follows:

Mr Corns, my allegations are that the Plaintiff relied on overarching obligations breaches to commence these proceedings against me - a manipulated Affidavit.

The evidence I rely on are the Affidavit the Plaintiff relied on to commence these proceedings against me filed on 9th December 2021 and my Affidavit filed on 6th January 2022 and the Affidavit in support of this Application.

Mr Corns, there is no point at this stage in me providing you with what damages I have suffered as a result of these proceedings until after the Court investigation outcome.

I have asked the Court that your client answer to the above allegations via Affidavit.

The matter is now in the Court's hands.

46 The affidavits filed by the plaintiff and the defendant in the early months of 2024 largely concerned the amendment application, the s 29 application, and the removal application. Relevantly for the purpose of the removal application, in her affidavit of 14 February 2024, the plaintiff deposed, in summary, to the following matters:

(a) the history of this proceeding, the terms of the settlement deed, and the sale of the property in October 2022;

(b) the defendant's failure to apply for a private ruling, prepare a final tax return for the estate, or pay the plaintiff her share of the estate funds in accordance with the terms of the settlement deed;

(c) the allegations made by the defendant in the s 29 application, along with the defendant's failure to fulfil her obligations under the settlement deed, caused her to be concerned that the defendant 'no longer intend[ed] to be bound by her obligations under the [settlement deed];

(d) the further relief sought by the proposed amended originating motion;

(e) the correspondence between the parties regarding the alleged breaches of the settlement deed, including a proposed deed of variation put forward by her solicitors;

(f) the trust account issue;[12] and

(g) the plaintiff deposed as follows:

By reason of the Defendant's:

a) failure to comply with the terms of the Deed and refusal to enter into a Deed of Variation in relation to the capital gains tax liability or payment of the remainder of my entitlement to the estate;

b) failure to engage with my lawyers in relation to the distribution of the remaining $100,000, save for seeking orders in this proceeding against her former solicitors;

c) insistence that the Defendant's summons be dealt with before she considers matters arising from her breaches of the Deed;

I am deeply concerned that she does not intend to finalise the estate.

It has now been almost five years since the death of my father and the estate has not been finalised.

47 The plaintiff exhibited to this affidavit correspondence between the parties with respect to the administration of the estate and the defendant's alleged breaches of the settlement deed, including the following correspondence:

(a) a letter from Ms McManus to Madgwicks dated 27 July 2023 to the effect that the defendant was in breach of her obligations under the settlement deed, and which put the defendant on notice of the various options open to the plaintiff as a consequence of the defendant's defaults. This letter noted that Madgwicks had been unable to obtain instructions from the defendant;

(b) a letter from Ms McManus to the defendant dated 13 September 2023 which referred to previous correspondence in which the defendant told Ms McManus that she had received the advice in September 2022 to the effect that the beneficiaries would be personally liable for CGT (of a modest sum), and proposed varying the settlement deed to dispense with the requirement to obtain a private ruling regarding CGT;

(c) an email from the defendant to the plaintiff dated 8 November 2023 attaching the defendant's correspondence with Madgwicks, which included an email from Madgwicks to the effect that to the extent that the defendant required trust account records from the estate solicitors, those enquiries needed to be directed to the estate solicitors;

(d) an email from the estate's accountants to the defendant dated 9 October 2023 withdrawing from any further engagement by the estate, and subsequent correspondence regarding their unpaid fees, the payment of which the defendant requested be deferred until the finalisation of the s 29 application;

(e) correspondence between the plaintiff's current solicitors and the defendant in November 2023, whereby the defendant refused to consider executing a deed of variation to the settlement deed until after the s 29 application was finalised, and a letter from the plaintiff's solicitors to the defendant foreshadowing the amendment application; and

(f) emails sent by the defendant to the Court in January and February 2024 regarding, among other things, the trust account issue, and a letter from the plaintiff's solicitor to the defendant refusing to consent to an order requiring Madgwicks to '...resolve the Trust Account issues and provide accurate Trust Account Statements'.

48 In a further affidavit sworn on 14 March 2024, the plaintiff referred to a letter sent by her solicitors to the defendant on 12 March 2024, which stated, among other things:

We have not received your acceptance to resolve the matter on the reasonable terms outlined in paragraph 3 above and instead received submissions you filed with the Court on 19 February 2024, concluding 'I am keen to finalise the Estate but this cannot be achieved until after Ms Dunn[13] provides accurate Trust Account Statements.'

As previously advised in our letter dated 31 January 2024, the issues you have raised between you and Ms Dunn is a matter between you and her, and not our client. Ms Dunn was solely retained as your lawyer and has never acted for our client. Our client therefore cannot assist with clarifying your concerns with Ms Dunn, even if she wanted to.

49 The defendant swore an affidavit in opposition to the amendment application on 10 April 2024. In short, the defendant opposed the amendment application on the basis that allowing the amendment would in effect conceal the various breaches of the CPA referred to in the s 29 application. Further, the defendant considered that the terms of the settlement deed were contrary to her interests. The defendant also referred to a dispute between her and the accountants engaged by the estate to provide advice on taxation issues pursuant to the settlement deed and the trust account issue as matters hampering the finalisation of the estate.

50 Ms McManus swore an affidavit on 16 May 2024 in opposition to the s 29 application. She deposed that she ceased to act for the plaintiff on 1 November 2023, after having been served with the s 29 application.

Before the proceeding commenced, the Plaintiff and Defendant engaged in correspondence concerning the estate property and how to finalise the estate and discussed ways of resolving the dispute without recourse to litigation. After engaging legal representation the Plaintiff and Defendant would still contact each other directly.

I assisted the Plaintiff to prepare her affidavit of 9 December 2021 and did so on her instructions and on the basis of the material exhibited to the affidavit. I am not aware of any reason that any part of the affidavit was "manipulated" or was otherwise false or misleading.

52 Ms McManus then deposed as to the events leading up to the issue of this proceeding, largely by reference to the correspondence exhibited to the original affidavit, which I will not repeat here. She deposed as follows:

On 14 December 2021, I also caused an Overarching Obligations Certification and a Proper Basis Certification to be filed. A true copy of the Overarching Obligations Certification and the Proper Basis Certification is at pages 35 to 36 of the bundle exhibit.

I signed the Proper Basis Certification and in doing so certified to the Court that each allegation of fact in the originating motion had a proper basis and each claim in the originating motion had a proper basis. I affirm that certification.

53 In response to the evidence relied upon by the defendant in the s 29 application, Ms McManus deposed as follows:

I have reviewed the Defendant's three affidavits filed in this proceeding:

(a) affidavit of Chrisoula Milekovic sworn on 10 January 2022 and filed on 6 January 2022 (the Defendant's first affidavit), in reply to the Plaintiff's affidavit sworn and filed on 9 December 2021;

(b) affidavit of Chrisoula Milekovic sworn on 27 September 2023 and filed on 2 October 2023, in support of the Defendant's Summons (the Defendant's second affidavit); and

(c) affidavit of Chrisoula Milekovic sworn on 10 April 2024 and filed on 11 April 2024, in reply to the Plaintiff's summons filed on 15 March 2024 (the Defendant's third affidavit).

In the Defendant's second affidavit the Defendant alleged at paragraph 12 that "the other side relied on Overarching Obligations breaches to commence these proceedings against me" and at paragraphs 13 and 14 stated that in so alleging she relied on the Plaintiff's 9 December 2021 affidavit and the Defendant's first affidavit and said that "the Overarching Obligations breaches are evident. when you compare the abovementioned two affidavits".

In the Defendant's first affidavit she set out her own evidence as to the history of negotiations with the Plaintiff at paragraphs 9 to 92. This includes the following matters, among other things:

(a) a spreadsheet prepared by the Plaintiff in 2020 "detailing expenses associated with transferring the estate property" into the names of the Plaintiff and Defendant as co-owners - paragraph 11 and exhibit CM-6;

(b) a "long letter" dated 23 March 2021 from the Plaintiff to the Defendant - paragraphs 33-38 and exhibit CM-9;

(c) 18 October 2021 emails from the Plaintiff that referred to the Plaintiff relinquishing her rights to the estate property - paragraphs 63 and 64 and exhibits CM-19 and CM-20.

The Plaintiff cannot be trusted - as confirmed by the Plaintiff's own correspondence and also her Affidavit in these proceedings.

I was aware of each of the matters listed at paragraph 16 above when I acted for the Plaintiff in commencing this proceeding, and each of them was included in the Plaintiff's 9 December 2021 affidavit:

(a) The spreadsheet was exhibited as part of annexure FV-6 and the Plaintiff deposed to her considerations at this time at paragraphs 14 to 15.

(b) The 23 March 2021 letter was exhibited as annexure FV-7 and referred to in paragraph 19.

(c) The instructions from the Plaintiff on 18 October 2021 are referred to in my letter of 19 October 2021 at annexure FV-25 under the heading "Matters for your client" where I noted the prospect that the Plaintiff desired "to be released from the ongoing trauma this matter is causing her" and may "relinquish her rights".

In the Defendant's third affidavit she again stated that she relied on a comparison of the Plaintiff's 9 December 2021 affidavit and the Defendant's first affidavit and referred to the Plaintiff's 9 December 2021 affidavit as a "deliberately manipulated affidavit". At paragraph 51 and exhibit page 80 the Defendant referred to a 12 December 2022 communication she had sent to her then solicitor, copied to me, asserting that the Plaintiff commenced the proceeding upon a "deliberately manipulated Affidavit designed to intentionally mislead". I do not agree with the Defendant's characterisation of events as deposed to in the Defendant's third affidavit.

I read that email of 12 December 2022 and set it aside as I felt confident that both I and the Plaintiff had always complied with our overarching obligations in the dispute with the Defendant including pre-action negotiations and upon issuing the proceeding. All relevant materials had been disclosed in the Plaintiff's affidavit and I had taken pains to ensure that each claim was made on a proper basis. I was also confident that every effort had been made to resolve the proceedings before making the claim.

I affirm that I commenced the proceeding upon an honestly and competently prepared affidavit and reject any suggestion that I had any involvement in any "manipulation" or false or misleading statement.

54 In an affidavit sworn on 22 May 2024, the defendant repeated her earlier evidence about the steps she had taken to finalise the estate in August 2021, referred to the instructions she provided to the estate solicitors on 28 September 2021 (see paragraph 29(m) of these reasons), and referred to the contents of the executor's correspondence.

55 The plaintiff filed a further affidavit in support of the removal application on 12 August 2024, which exhibited a letter from her solicitors to the defendant requesting that the defendant provide information regarding the balance of the estate funds, and the quantum of any claims upon the estate funds, to which her solicitors had not received any reply. She deposed that the defendant had not taken any further steps to finalise the estate or comply with her obligations under the settlement deed since the plaintiff swore her last affidavit on 15 March 2024.

56 Finally, the defendant swore a further affidavit on 26 August 2024. In her affidavit, the defendant repeated her allegations that the settlement deed was contrary to her interests, and served to conceal a range of matters. As such, it would not have been appropriate to apply for a private ruling, as the tax advice received was predicated on the terms of the settlement deed, which may be affected by the outcome of the s 29 application.

57 The defendant referred to the trust account issue, and exhibited an email from her to Madgwicks dated 30 October 2023 relating to the trust account issue and other alleged discrepancies in the trust account statements, and deposed that the trust account issue had prevented the finalisation of the estate. The balance of this affidavit largely repeated the evidence contained in the defendant's previous affidavits.

58 The defendant filed 11 separate written submissions in opposition to the amendment application and the removal application, and in support of the s 29 application. However, a number of these submissions were repetitive of earlier submissions and the matters canvassed in the defendant's affidavits. For the purpose of preparing these reasons, I have focussed upon the defendant's written submissions in support of the s 29 application filed on 6 June 2024, the defendant's written submissions in opposition to the removal application filed on 23 September 2024, her oral submissions at the hearing on 4 July 2024, and a further document titled 'Defendant crucial submissions' sent to my chambers on 15 July 2024.

59 The defendant made the following submissions in support of the s 29 application:

(a) she had prepared the estate for finalisation from 17 August 2021;

(b) she considered that she could finalise the estate and discharge her function as executor by transferring the property to the beneficiaries by 31 October 2021 (the date the CGT grace period expired), and, thereafter, any negotiations between herself and the plaintiff would be in their capacity as beneficiaries of the estate;

(c) she kept the plaintiff and Ms McManus informed of what she intended to do and her reasoning, but Ms McManus ignored her; and

(d) Ms McManus ignored the executor's correspondence and misrepresented the position in the original affidavit, failed to exhibit the executor's correspondence to the original affidavit, and concealed any material that would have worked to the plaintiff's disadvantage, thus breaching the respondents' overarching obligations under the CPA.

60 In her submissions filed on 23 September 2024, the defendant addressed both the s 29 application and the removal application. The defendant referred again to the executor's correspondence, and submitted that an honest and reasonable person would consider that the executor's correspondence should have been disclosed in the original affidavit, and would conclude that it had not been disclosed because it would not have led to a favourable outcome for the plaintiff in the removal application.

61 The defendant submitted that the executor's correspondence demonstrates that the plaintiff's statements to the effect that the dispute between the parties was about the sale of the property and that the estate remained unadministered at the time the proceeding was commenced were untrue.

62 The defendant submitted that she had taken all steps necessary for the estate solicitors to finalise the estate within the CGT grace period. However, the DFA provided that the estate would not be finalised within that time, as it stipulated that the defendant's notional payment[14] for the plaintiff's share of the property would be made to the estate, not to the plaintiff.

63 The defendant submitted that the decision she made to transfer the title of the property to the beneficiaries prior to the expiry of the CGT grace period was in the interests of both beneficiaries. However, the plaintiff did not consent to this, despite having been prepared to do so in 2020. If the plaintiff had so consented, the estate would have been finalised before the expiry of the CGT grace period, and there would have been no need for this proceeding and its associated costs.

64 The defendant submitted that the finalisation of the estate was also prevented by the fact that the tax advice provided to the estate was based upon the settlement deed, which was contrary to the defendant's interests, and which concealed the truth, along with the trust account issue.

65 The defendant submitted that the amendment application has caused further cost and delay, and was made in circumstances where the plaintiff knew that the estate could not be finalised because the tax advice was based upon the settlement deed, and because of the trust account issue. Until the s 29 application is determined, it is not possible to determine how to finalise the taxation issues associated with the estate.

66 The defendant then went on to refer to the trust account issue in some detail, and said that Madgwicks had failed to assist her to resolve the trust account issue.

67 The defendant referred to the advice that she had received from Madgwicks not to issue the s 29 application, but said that this advice was inconsistent with s 12 of the CPA, which provides that '...the overarching obligations prevail over any legal obligation, contractual obligation or other obligation which a person to whom the overarching obligations apply may have...'.

68 The defendant's submissions also canvassed what occurred in 2020, when the plaintiff prepared a spreadsheet which confirmed that she was prepared to keep the property for four years, as well as the making of the informal agreement. The defendant submitted that the administration of the estate was predicated on the informal agreement, but that in March 2021 the plaintiff breached the informal agreement after hearing a 'fleeting remark' about the value of the property.

69 The defendant then referred to the correspondence between the parties during the course of 2021, including the 30 June offer. She submitted as follows:

The October 2021 dispute -

(a) had nothing to do with the sale of the Estate property;

(b) it had nothing to do with me acquiring the Estate property;

(c) it had nothing to do with 'calling in and converting' in relation to my Father's Will;

(d) it had nothing to do with the administration of the Estate because -

(i) on 13 August 202l - I closed the Estate Account that I was administering;

(ii) and I prepared the Estate Accounts dated l7 August 2021.

(iii) I forwarded balance Estate monies and Estate Accounts -

(iv) together with my personal Bank Cheque in the sum of $26,576.14 that the then Estate Solicitor calculated for Stamp Duty, Titles Office Registration and Pexa Fees pursuant to the 'Calderbank v Calderbank' offer the Plaintiff made and I accepted and I sold my shares to meet this 'Calderbank v Calderbank' condition.

(v) and I forwarded all of the above to the then Estate Solicitor so he was in a position to finalise the Estate within the second anniversary which was on 31 October 2021:

(vi) I also forwarded copy Estate Accounts to the Plaintiff at her home address in order to keep the Plaintiff fully informed.

70 The defendant then referred to the DFA, its inconsistency with the terms of the informal agreement and her reasons for instructing the estate solicitors to transfer the title of the property to the beneficiaries, and said that she had kept the plaintiff informed of what steps she had taken to finalise the estate before the expiry of the CGT grace period, which was not disclosed in the original affidavit. She submitted that the decision she made was the right decision in the circumstances, and was in the best interests of the beneficiaries.

71 In her oral submissions at the hearing on 4 July 2024, the defendant made the following submissions:

(a) she referred to the trust account issue, which she said she only discovered in September 2022, and why the trust account issue prevented the finalisation of the estate;

(b) she referred to the tax advice received by the estate, which she said was inappropriate, as it was based upon the terms of the settlement deed, not upon the way the estate was actually administered;

(c) she referred to Ms McManus' letter of 13 September 2023 (see paragraph 47(b) of these reasons), where she said Ms McManus acknowledged that the trust account issue was hampering the finalisation of the estate;

(d) while she took the steps necessary to finalise the estate within the CGT grace period, the terms of the DFA were not consistent with the estate being finalised within the CGT grace period, as the property would remain in the estate beyond that time, which was not foreshadowed by the 30 June offer;

(e) the respondents have lied to the Court, and have failed to disclose to the Court the fact that the defendant had taken the steps necessary to finalise the estate; failed to disclose the fact that the terms of the DFA provided that the estate would not be finalised within the CGT grace period, and failed to disclose the executor's correspondence;

(f) by making the informal agreement, the terms of the will were 'left behind' and no longer governed the administration of the estate; and

(g) she now believes that the plaintiff did not want to have the property transferred to her because she did not want to miss out on a health care card or other government benefits, and as a consequence, the plaintiff destroyed the estate and destroyed her health.

72 On 16 July 2024, my chambers received, unsolicited, a further document titled 'Defendant crucial submissions' dated 15 July 2024. In those submissions, the defendant:

(a) asserted that, in response to the plaintiff's claim that she had failed to administer the estate before the expiry of the CGT grace period, the DFA contemplated the estate not being finalised until a year after the expiry of the CGT grace period;

(b) referred to selected clauses of the DFA, and said 'I was not aware of any of the above-mentioned terms and conditions until I received the Deed of Family Arrangement and Loan Agreement';

(c) referred to the evidence in the reply affidavit and deposed as follows (emphasis in original):

Legal action was taken against me based on me not finalising the Estate within the second anniversary however a Deed of Family Arrangement was presented that required the Estate to be finalised one year after the second anniversary.

Even though I prepared the Estate ready for the then Estate Solicitor to be in a position to **finalise the Estate within the second anniversary - ** as substantiated by the evidence annexed to my abovementioned Affidavit in reply.

During the hearing on 4 July 2024, I informed the Court that I gave the then Estate Solicitor crystal clear instructions to finalise the Estate within the second anniversary.

And I read out the following email from the then Estate Solicitor which further substantiates that I wanted the Estate finalised within the second anniversary wherein in this email dated 13 September 2021 at 14:44 the then Estate Solicitor stated -

"I note your wish to have all matters relating to the administration of your father's estate finalised as soon as possible.

I believe that the loan agreement mortgage documents are being prepared. When I have received them, I will contact you to arrange for their signing."

Nevertheless, I RECEIVE A DEED OF FAMILY ARRANGEMENT - CONTRARY TO EXECUTOR WISHES -AND CONTRARY TO THE INTERESTS OF THE ESTATE.

A Deed of Family Arrangement based on the Estate NOT being finalised within the second anniversary.

A Deed of Family Arrangement based on the Estate being finalised ONE YEAR AFTER the second anniversary.

And I was being pressurised to sign a 'Client Declaration For Private Ruling' so the Estate would not pay any capital gains tax wherein this Client Declaration stated that "the information provided to BNR Partners for the preparation of the private ruling application is true and correct."

And what about the ten month period that the Estate property was not placed on the market as a result of our 20 May 2020 agreement - how would this also affect the outcome of the Private Ruling?

And in an email dated 13 December 2022 at 10:15 addressed to Ms Debra Dunn I stated -

"...And now I am asked to sign a client declaration so the Accountant can parrot the lies the other side presented to the Court.

And I cannot do this ......"

(d) referred to the agreement she had reached with the plaintiff in May 2020 regarding the buy-out proposal, and repeated her assertion that she had the plaintiff's informed consent to purchase the plaintiff's share of the property, and the plaintiff's agreement to transfer the property to both of them after the expiry of the CGT grace period if necessary;

(e) repeated her assertion regarding the plaintiff's failure to disclose the executor's correspondence;

(f) said she stood by her decision in September 2021 to instruct the estate solicitors to transfer the property to the plaintiff and the defendant; and

(g) concluded as follows (emphasis in original):

I stand by this Executor decision to this very day.

As for transferring the Estate property into our names as beneficiaries, as I stated during the hearing on 4 July 2024

(a) It was the Plaintiff who first bought to the table that we transfer the Estate property into our names as co-owners until property prices improve;

(b) It was the Plaintiff, on her own accord, who prepared the Spreadsheet - Exhibit "CM-6" in my abovementioned Affidavit in reply - where.in this Spreadsheet details expenses associated with having the Estate property into our names as co-owners for a period of TWO YEARS AFTER the second anniversary;

(c) It was the Plaintiff who confirmed that she was prepared to wait for a period of two years after the second anniversary for her share of the Estate property;

(d) And it was the Plaintiff who confirmed that she was prepared to transfer the Estate property into our names as co-owners until the East Doncaster property was finished and sold and that she was prepared to wait for a period of two years after the second anniversary for payment for her share of the Estate property.

The Affidavit the Plaintiff relied on to commence this proceeding against me is based on lies and manipulation as substantiated by the Plaintiff's own Affidavit sworn 8 December 2021/filed 9 December 2021 and my Affidavit in reply sworn 10 January 2022/filed 6 January 2022.

The Plaintiff was present during the hearing on 4 July 2024.

73 In relation to the s 29 application, in her submissions filed on 6 June 2024 and 13 June 2024, the plaintiff submitted that the defendant has failed to establish any evidentiary or legal basis for the allegation that the respondents have breached any overarching obligations. There is otherwise no basis upon which the defendant is entitled to have the proceeding dismissed.

74 The plaintiff observed that the defendant has raised three primary complaints about the conduct of the respondents said to have breached the overarching obligations, namely:

(a) in the original affidavit, the plaintiff did not refer to the executor's correspondence, which was said to be a breach of ss 17 and 21 of the CPA;

(b) in the original affidavit, the plaintiff said that Ms McManus had not received a response to her letters of 19 and 26 October 2021, which was said to be a breach of ss 17 and 21 of the CPA; and

(c) as the defendant had stated that she was prepared to finalise the estate prior to the plaintiff issuing this proceeding, this proceeding was unnecessary, and, as such, the respondents breached s 18 of the CPA.

75 In relation to the first complaint, the plaintiff, referring to the decision of John Dixon J in Bolitho v Banksia Securities Ltd (No 18) (remitter)[15] ('Bolitho'), submitted as follows (omitting citations):

To establish a breach of s 17 of the [CPA], it must be shown that a person subjectively intended to do the acts which are said to be objectively dishonest by the ordinary standards of reasonable and honest people. A conclusion that something is said dishonestly cannot be reached if the person whose conduct is in issue believes in the truth of the statement.

The obligation under s 21 of the [CPA] not to mislead or deceive can be tested by considering, objectively, whether the conduct induces or is capable of inducing error.

The plaintiff contravened neither overarching obligation by reason of confining her evidence to matters which were relevant to the issue in dispute; indeed that is incumbent on her by operation of s 56 of the Evidence Act 2008. That the defendant's narrative of the events of October 2021 differed to that of the plaintiff does not amount to dishonesty, nor an attempt by the plaintiff to mislead or deceive.

Further, the substantive proceedings are not an ex parte application. It is not for the plaintiff to lead evidence in support of the defendant's case. As is the case in any inter partes adversarial proceedings, the defendant has had ample opportunity to put on responsive material and has indeed done so.

76 In relation to the second complaint, the plaintiff submitted as follows:

The allegedly offending statements in the plaintiff's affidavit are, however, accurate; the further emails from the defendant were not responsive to the issues raised in the plaintiff's solicitor's emails and were directed not to the plaintiff, but to the defendant's then solicitor. The plaintiff's affidavit contains no inaccuracy in the regard alleged and the decision by the plaintiff not to include every interaction between herself and the defendant in her affidavit does not amount to a breach of either s 17 or 21 of the [CPA].

77 In relation to the third complaint, being the complaint that the plaintiff had no proper basis to bring this proceeding, the plaintiff submitted as follows (omitting citations):

The requirement of a proper basis for each factual and legal matter alleged in a document may be discharged by demonstrating a reasonable belief based on the factual material available at the time.

The plaintiff's statement at paragraph 57 of her affidavit made on 9 December 2021 that 'the Estate remains largely unadministered', and her actions in bringing the substantive proceeding lack no such proper basis in circumstances where:

a. the Property remained in the name of the executor;

b. the estate's tax obligations remained uncrystallised;

1. this state of affairs had persisted for some two years following the death of the deceased;

2. negotiations between the plaintiff and defendant as to the defendant retaining the Property had reached an impasse; and

3. following the plaintiff's solicitor's letter dated 26 October 2021, the defendant had failed or refused to place the Property on the market for sale.

Paragraph 4 of the defendant's submissions in fact demonstrates that the basis upon which the defendant was prepared to administer the estate was at odds with the terms of the will, which did not direct the in specie transfer of the Property. Nor did the defendant's proposed finalisation of the estate address the outstanding tax issues.

The complaints agitated by the defendant in her summons demonstrate a fundamental misunderstanding on her part as to why the substantive proceeding was issued against her. In brief, she refused to perform her executorial duty to call in the assets of the estate so as to enable distribution to the beneficiaries.

At the time the substantive proceeding was commenced, the estate had been on foot for over two years and the plaintiff was entitled to take steps to obtain what was due to her from the estate.

Given that the defendant remains, in 2024, in default of her executorial duties, most recently characterised by her breach of the Terms of Settlement, it cannot be said the plaintiff's application was lacking in a proper basis.

The propriety of the basis of the substantive proceedings is reinforced by the fact that Terms of Settlement provided relief in almost identical terms to that sought pursuant to r 54.02(2) in the plaintiff's originating motion; that the Property indeed be sold.

78 In her oral submissions during the course of the hearing on 4 July 2024, counsel for the plaintiff submitted, in summary, as follows:

(a) counsel observed that the defendant refers to herself as a 'beneficiary' when she wants to remain unburdened with the fiduciary responsibilities of an executor, and as the 'executor' when she wants to make a unilateral decision over the objections of the plaintiff;

(b) counsel referred to the terms of the will, and the defendant's obligation to administer the estate in accordance with the terms of the will, but the defendant was only prepared to finalise the estate on terms favourable to her, despite being under a fiduciary obligation not to profit from her position as executor;

(c) the informal agreement was never formalised in writing;

(d) the executor's correspondence included two emails from the defendant to the plaintiff dated 18 October 2021 and 28 October 2021, which made it clear that the defendant proposed to finalise the estate in a manner contrary to the terms of the will. That this course was impermissible was made abundantly clear to the defendant by Ms McManus in her letters of 19 October 2021 and 20 October 2021;

(e) as for the defendant's submissions regarding the terms of the DFA, if she did not agree with the loan repayment mechanism provided by the DFA, she could have raised those concerns at the time, but she did not do so; and

(f) counsel denied the defendant's allegation that the plaintiff commenced this proceeding in order to obtain government benefits, and said that as early as March 2021, the plaintiff had made it abundantly clear that she did not want to have a co-ownership relationship with the defendant.

79 In her submissions in opposition to the s 29 application filed on 14 June 2024, Ms McManus submitted that while the Court may order that a legal practitioner pay the costs of a party, such as wasted costs, or for breach of the overarching obligations, such an order is exceptional.

80 Ms McManus observed that the defendant's main complaint seems to be that the original affidavit omitted the executor's correspondence. Ms McManus submitted as follows:

A number of features of the pre­action negotiation are highlighted in the defendant's reply affidavit, and it seems that the complaint arises somehow from these. None of these matters were overlooked in the plaintiff's first affidavit so it is not clear how any of this supports the suggestion that the affidavit was 'manipulated' or that there has been any deception or misleading conduct.

10.1 First, a spreadsheet prepared by the plaintiff in 2020. This was exhibited to the plaintiff's affidavit and the plaintiff deposed to her considerations of the document.

10.2 Second, a letter sent by the plaintiff dated 23 March 2021. This was also exhibited and referred to.

10.3 Third, a 'final offer' made by the plaintiff by letter dated 30 June 2021, which the defendant accepted but then did not agree to the necessary documentation, namely a loan agreement and deed of family arrangement. This was discussed at some length and appropriate documents exhibited, including the content of the 30 June offer, the sending of the proposed loan agreement and deed of family arrangement to the defendant, and Ms McManus's attempts to contact the estate solicitor. In her reply affidavit the defendant confirmed that she had received the documents but said she did not sign them because there were 'differences' to what had been agreed when she accepted the 30 June offer and that '[t]here was no time for further negotiations'. In her most recent affidavit, the defendant has repeated the evidence about 'differences' but not explained what the differences were that caused her to not sign the documents and has also, improbably, asserted that she never received the documents.

10.4 Fourth, emails from the plaintiff on 18 October 2021 where the plaintiff discussed the relinquishing of her rights to the estate property. This was adequately covered by the exhibiting of correspondence from Ms McManus that directly referred to the plaintiff relinquishing her rights as a possible prospect. The plaintiff evidently did not relinquish her rights, as she chose to commence the proceeding.

10.5 Fifth, instructions from the defendant to the estate solicitor to transfer the property to the plaintiff and defendant, and correspondence discussing and repeating these instructions, sent by correspondence dated 28 September 2021, 22 October 2021, 26 October 2021, and 28 October 2021. The defendant's instruction to the estate solicitor to transfer the property was referred to in the plaintiff's affidavit. Prudent collation of affidavit material does not require the inclusion of every piece of correspondence. It is not surprising that a reply affidavit may contain additional material.

A dispute between siblings is regrettable, and it is (to some extent) only natural for one party to look back on the 'to and fro' of negotiation and be disappointed that they reached the point of a court proceeding or to consider that material was left out of the initiating affidavit. That is, however, no cause for a non-party costs order. There can be no serious challenge to Ms McManus's conduct in preparing the plaintiff's first affidavit and commencing the proceeding. The affidavit properly canvassed the course of pre-action negotiations and nothing was left out such as to justify a finding that there has been any breach of the overarching obligations.

81 In his oral submissions at the hearing on 4 July 2024, counsel for Ms McManus submitted that the substance of the matters referred to in the executor's correspondence was disclosed in the executor's affidavit. Counsel observed that seven of the nine documents the defendant suggested should have been included in the original affidavit essentially communicated the defendant's instructions to the estate solicitors, and that those instructions were disclosed in the original affidavit and the exhibits to the original affidavit, including Ms McManus' letters of 19 October 2021 and 26 October 2021.

82 Counsel submitted that nothing in the original affidavit violated any duty of candour. The plaintiff's statement in the original affidavit to the effect that Ms McManus had not received any response from the defendant or the estate solicitors to her letters of 19 and 26 October 2021 was substantively correct.

83 On 19 July 2024, in response to the additional written submissions filed by the defendant both before and after the hearing on 4 July 2024, the plaintiff filed and served the following submissions in opposition to the s 29 application:

1. On 4 July 2024 in her oral submissions and by her further written submissions emailed to the court on 16 July 2024 the defendant provided, for the first time in the proceeding, a particularised explanation of her refusal to sign the Loan Agreement and Deed of Family Arrangement (DOFA) in September and October 2021.
2. Her refusal was said to be on the basis that the Loan Agreement and DOFA included new terms which meant that the administration of the Estate would continue beyond the second anniversary of the deceased's death. It was implied that this fact justified the defendant's refusal to sign the Loan Agreement and DOFA, or otherwise engage into negotiation in relation to them.
3. Whilst it will be the position of the plaintiff at trial that this explanation is inadequate and that a prudent executor ought to have:

a. Signed the Loan Agreement and DOFA; or

1. Negotiated the Loan Agreement and DOFA if they were unsatisfactory; or

2. Placed the Property on the market if no agreement could be reached;

the relevance of this newly articulated rationale for the defendant's refusal to engage with the plaintiff in relation to the Loan Agreement in the context of the defendant's section 29 application is limited.

1. The requirement of a proper basis for each factual and legal matter alleged in a document may be discharged by demonstrating a reasonable belief based on the factual material available at the time.
2. The explanation for the defendant's refusal to sign the Loan Agreement and DOFA, having only been relayed by the defendant as recently as July 2024, was not available to the plaintiff at the time of her swearing her affidavit of 9 December 2021, and commencing the removal application against the defendant.
3. Accordingly, this new information can have no bearing on an assessment of the plaintiff's discharge of her obligations pursuant to s 18 of the Civil Procedure Act 2010 as at December 2021.

84 Turning now to the removal application, the plaintiff submitted that since late 2022, when the sale of the property was finalised, the defendant has:

(a) issued the s 29 application;

(b) failed to apply for a private ruling or amend the settlement deed to remove the requirement for a private ruling;

(c) refused to take any steps to finalise the estate; and

(d) failed to take any steps to resolve the trust account issue since November 2023.

85 In her written submissions filed on 6 September 2024,[16] the plaintiff submitted that the removal application should be granted because:

The plaintiff seeks that the defendant be removed as executor and trustee of the estate on the following grounds:

1. The defendant has failed or refused to administer the estate in accordance with the terms of the will and law insofar as:

2. Her failure to sell the Property and attempt to unilaterally transfer it to herself and the plaintiff necessitated the commencement of these proceedings; and

3. She has breached, and remains in breach of the Deed of Settlement entered into by her in her executorial capacity on 15 June 2022;

4. She has refused to administer the estate, including paying outstanding professional fees until such time as either the Defendant's Summons has been dealt with or the Alleged Trust Account Issue has been resolved; and

5. She has failed to distribute the balance of the estate of approximately $100,000 for over two years;

6. The defendant has unreasonably delayed in administering the estate, it having been some five years since the death of the deceased and the estate being remarkably simple;

7. The defendant's engagement with her sister as a beneficiary has been antagonistic, voluminous yet non-responsive, and entirely unsatisfactory;

8. The defendant has taken unreasonable steps in the administration, including:

i. Issuing the Defendant's Summons;

1. Conducting the proceeding in such a manner as to exacerbate the cost of the proceeding and the delay in administering the estate.

86 The plaintiff referred to the negotiations between the parties prior to and following the 30 June offer, and noted that the defendant did not provide any reasons for failing to execute the loan agreement and DFA, but proceeded to attempt to transfer the property to the beneficiaries, inconsistent with the terms of the will.[17]

87 While the plaintiff no longer presses all of the relief originally sought in the originating motion, she submitted that the removal application should be granted, as:

... the conduct of the defendant and the necessity to issue proceedings in order to compel the proper administration of the estate remains relevant insofar as it relates to the defendant's fitness to continue to act as executor. This is particularly so in circumstances where the administration of the estate, whilst tantalizingly close to finalisation, has been at a stand-still for over two years. As the Court observed in Jortikka v Haukka, past executorial performance is indicative of future performance.

The history of the commencement of the proceeding, as set out between paragraphs 13(a)-(l) above demonstrates, on the part of the defendant:

1. A preference by her of her own interests - to retain the property - over her duties as executor - to call in the assets of the estate and administer them pursuant to the terms of the will;

2. A disregard of her obligations as executor, as prescribed by the Will, insofar as clause 4 of the Will required her to sell the Property and distribute the proceeds, and provided her with no power of appropriation to take the steps she attempted to take.

3. The necessity that she be compelled to perform her duties by the commencement of court proceedings, rather than performing her role of her own accord.

Each of these deficiencies in the defendant's past performance of her role as executor persist in her current approach to the tasks remaining in the estate administration.

...

The defendant's past conduct is indicative of her likely future conduct, which, if the defendant remains as executor, the Court has no reason to believe will improve.

88 The plaintiff's submissions then went on to recount in some detail what she says were the defendant's breaches of the terms of the settlement deed and her failure to take the steps necessary to finalise the estate. The plaintiff referred to the tax advice received from the estate's accountants in September 2022, and submitted that '[n]otwithstanding the existence of a clear path through the tax affairs of the estate, the tax affairs of the estate remain unfinalized'. The defendant has failed to respond to a request regarding the outstanding liabilities of the estate to the estate's accountants and solicitors.

89 The plaintiff referred to the defendant's alleged breaches of the settlement deed, and submitted as follows:

That the breach that she finds herself in could so easily be remedied, and yet remains, is demonstrative of the level of respect that the defendant has for her obligations imposed on her by the will, the Deed of Settlement and by the law. She does not appear to be troubled by breaching those obligations.

90 The plaintiff referred to the trust account issue and made the following observations:

(a) no attempt appears to have been made by the defendant to resolve this issue with Madgwicks since November 2023; and

(b) no attempt appears to have been made by the defendant to resolve this issue with the estate solicitors.

If there is a legitimate issue with historical trust accounts, the defendant is either unable to resolve that issue herself, now having had abundant opportunity to do so, or is unwilling to do so.

92 The plaintiff submitted that the defendant's conduct towards the plaintiff has been 'wholly unsatisfactory', in that the defendant has:

(a) failed to engage with reasonable enquiries or requests;

(b) corresponded with the plaintiff and her solicitors in a 'florid, non-responsive, and inflammatory' manner, in contrast with the patient attempts by the plaintiff to resolve the matters in dispute;

(c) been 'waylaid' in her administration of the estate by her animosity to the plaintiff; and

(d) taken unreasonable steps which have 'exacerbated the time, cost and complexity of the administration of the estate', including issuing the s 29 application, opposing the amendment application, and conducting herself in this proceeding in a manner likely to cause unnecessary costs to the parties.

93 The defendant's submissions in opposition to the removal application are to be found at paragraphs 60 to 72 of these reasons, which I will not repeat again here.

94 A helpful summary of the principles governing the removal application is to be found in the recent decision of Gray J in Brito-Babapulle v Brito-Babapulle,[18] as follows (omitting citations):

Section 34(1) confers power on the Court to order the discharge or removal from office of an executor, including where the executor desires to be discharged (sub-s (1)(b)), or the executor is unfit to act or incapable of acting in that office (sub-s (1)(c)). It also provides that the Court may make 'such order as to costs as it thinks fit'. Unfitness as a ground for removal can arise from a conflict of interest and breach or neglect of duty, including unwarranted delay. This can include where the executor turns 'what should have been a straightforward administration of a simple estate into a protracted and complicated affair'.

Courts will not lightly interfere with the testator's choice of executor. However, it is the welfare of the beneficiaries and the protection of their interests in the estate that is the paramount consideration in exercising the discretion. Whether the executor is or is not fit does not depend on any kind of intention on the executor's part, and it does not matter whether their incapacity or unfitness is born of intent, carelessness or incompetence. Misconduct need not necessarily be present, and 'the only guide is the welfare of the beneficiaries'.

The leading case is Monty Financial Services Ltd and Anor v Delmo. The facts differed from the present case. The primary focus of Ashley J in Monty was on conflict of interest and duty. Here, Ms Brito's conflicts of interest and duty play a secondary role; the key issues concern Ms Brito's inability to distinguish between significant and insignificant issues and the prolix and confusing way she has communicated with her co-executor and others. Nevertheless, this case comes within the general principles for removal of executors as identified in Monty.

Further, the fact that the administration of an estate may be close to an end is no barrier to exercising the discretion to remove an executor of an estate - indeed, in some cases the fact that the administration of the estate is close to the end may be a relevant matter in favour of the executor's removal. In any event, I am not convinced that the finalisation of the estate could be achieved any time soon if Ms Brito is left in place.[19]

95 Other relevant factors in assessing whether an executor is fit to remain in office or should be removed include whether there is conflict and acrimony between executors, or between executors and the beneficiaries of an estate, any delay in fulfilling executorial duties, and the capacity and track record of an executor to focus on the essential tasks of an executor.[20]

The s 29 application

96 While the defendant refers in the s 29 application to the overarching obligations in ss 16, 17, 18 and 21 of the CPA, it is clear from the materials that the defendant primarily relies upon the respondents' alleged breaches of the overarching obligations in ss 18 and 21 of the CPA, being the obligation not to bring a claim without a proper basis (s 18) and the obligation not to engage in conduct which is misleading and deceptive or likely to mislead or deceive (s 21).[21]

97 As observed by John Dixon J in Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 5)[22] ('Dura Constructions'), '...[i]t is the proper administration of justice that is the Court's concern when enforcing the overarching obligations. These duties are paramount'.[23]

In Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd (No 4), I described the objectives of the jurisdiction under s 29 of the Civil Procedure Act as primarily compensatory rather than punitive. I agree with the Court of Appeal in Yara that the court has been armed with broad disciplinary powers and is expected to use them to implement the statutory purposes. In that sense, I accept it is not appropriate to diminish the disciplinary function of s 29. In a practical sense, the disciplinary function may not always be disentangled from the compensatory function. In each of the wasted costs jurisdiction and s 29, the touchstone for its exercise is unprofessional conduct whether expressed as a breach of an overarching obligation or a failure to act with reasonable competence when discharging a duty to the court. Each case will be determined on its own circumstances and, depending on those circumstances, the court's objective may be both compensatory and disciplinary.[24]

99 In respect of the overarching obligation to not make a claim without a proper basis, his Honour said as follows:

The term 'claim' is not defined. Primarily, claim refers to a cause of action or the assertion of a right that entitled the asserting party to relief from the court. Although it was not in issue, I see no reason to confine the concept of claim to exclude interlocutory applications, such as, for security for costs, or for better discovery, or an objection to a question asked of a witness. In each case, there is a time at which an assessment of proper basis is necessary, which might be the filing of a pleading, of a summons, or on making an oral application during a trial. The overarching obligation requires that, at that time, the claim or response to a claim has a proper basis to be assessed on the factual and legal material available to the person making the claim or response.[25]

100 Further in relation to the overarching obligation in s 18 of the CPA, his Honour made the following observations:

Section 18 of the Civil Procedure Act expresses the overarching obligation to operate more broadly than the proper basis certification requirements under s 42 of the Act. When a substantive document is filed, a legal practitioner making a proper basis certification must certify that on the factual and legal material available each allegation of fact, each denial, or each non-admission in a document has a proper basis. The legal practitioner's determination for the purpose of a proper basis certification must be based upon a reasonable belief as to the truth or untruth of an allegation or denial or, in the case of a non-admission, that the legal practitioner does not know, and therefore cannot say, whether a fact alleged or denied is true or untrue. Ultimately whether a claim has a proper basis is a question for the court. A person discharging the overarching obligation can do so by demonstrating a reasonable belief based upon the factual and legal material available at the time. If that is done, the obligation is discharged. The legislature appears to have intended that the s 18 obligation be complementary with the obligation to certify under s 42.[26]

101 His Honour also said that the question of whether a party or practitioner has complied with their obligation under s 18 is to be assessed at the point in time the claim is made or responded to, as this obligation does not have a continuing operation.[27]

102 In Bolitho,[28] John Dixon J held that whether a party or practitioner has complied with the obligation in s 21 of the CPA not to mislead or deceive is to be assessed objectively. His Honour stated as follows:

An intention to mislead or deceive is irrelevant for the purposes of s 21. The issue is whether, tested objectively, the conduct induces or is capable of inducing error. Considering its application begins by identifying the conduct that is said to meet the statutory description of 'misleading or deceptive or ... likely to mislead or deceive'. The first question is always 'What did the alleged contravener do (or not do)?'[29]

103 The overarching obligations apply to legal practitioners as well as parties. In relation to the obligations of legal practitioners, John Dixon J said as follows:

(a) A lawyer must be candid with the court and not mislead the court in any way.

(b) A lawyer must not corrupt the administration of justice, which requires them to conduct cases with due propriety and not to further any dishonest conduct on the part of the client. A lawyer must not assert a case they know is false, connive at or attempt to substantiate a fraud, or assist in any way in dishonourable or improper conduct. If a client insists on a lawyer conducting the case improperly, the lawyer must withdraw.

(c) If a lawyer discovers that a witness intends or is likely to give false testimony, they are duty bound not to present that individual as a credible witness. A lawyer must not produce a witness statement which they know to be false, or where they know that the witness does not believe it to be true in all respects. If the lawyer is put on inquiry as to the truth of the facts stated in the statement, they should, where practicable, check whether those facts are true. If a lawyer discovers that a witness statement they have served is incorrect, they must inform the other parties immediately.[30]

104 The obligations of legal practitioners to the Court were also considered by the Court of Appeal in Forster v Legal Services Board,[31] where Kyrou AJA stated as follows:

In Meek v Fleming, Holroyd Pearce LJ agreed with the proposition that while a lawyer must not knowingly mislead the Court as to the facts or the law, he or she may put such matters as he or she believes will best advance the client's case. A party need not reveal something to the discredit of that party. However, this does not mean that the party can by implication falsely pretend that a particular state of affairs exists, and knowing that the court has been misled with respect to a material matter, foster and confirm the misrepresentation through answers given by the party. A lawyer who is a party to the presentation of evidence or the making of a statement to the court that is partly true, but which does not amount to the whole truth, can create a misleading impression to the Court and thereby breach his or her duty to the Court. Once a misleading impression has been created, even if innocently, the lawyer has an obligation to correct that impression as soon as he or she becomes aware of the true position. That obligation continues until judgment is given.[32]

105 Under s 29 of the CPA, the Court may grant compensation for any financial loss caused by any breach of the overarching obligations, over and above making any award for legal costs.[33] The general principles of causation apply to claims for financial loss said to arise from any breach of the overarching obligations,[34] although where what is claimed is wasted legal costs, a broad-brush approach is usually taken.[35]

106 While claims may be made under s 29 for financial loss caused by any breach of any overarching obligation, I am unaware of any published decision where orders have been made under s 29(1)(c) of the CPA in respect of claims for personal injury. Further, if the term 'financial loss or other loss' in s 29(1)(c) of the CPA does encompass claims akin to a claim for damages for personal injury, then a number of subsidiary questions arise, including, but not limited to:

(a) whether the common law principles governing claims in tort apply to claims under s 29, such as, for example, foreseeability of injury; and

(b) whether the provisions of the Wrongs Act 1958 (Vic) which govern (and limit) claims for personal injury apply, such as the need for a claimant to obtain a significant injury certificate, and the imposition of caps for damages for claims for non-economic loss.

107 I am also not aware of published decisions regarding the interaction between the overarching obligation not to bring any claim without a proper basis and the powers of the Court to summarily dismiss a proceeding under s 63 of the CPA on the basis that the claims (or defences) in the proceeding have no real prospects of success. In the current application, the defendant contends that the proceeding should be dismissed because there was no proper basis for the plaintiff to bring her claims in this proceeding. While such an order might be within the residual power of the Court under s 29(1)(f) of the CPA, the general power conferred by that provision must yield to the specific power granted by s 63 of the CPA. Accordingly, I should only grant the relief sought by the defendant in the s 29 application if I am satisfied that the plaintiff's claims in the proceeding at the time it was issued had no real prospects of success.

108 Conversely, it seems to me that the bringing of claims which are found not to have any real prospects of success would not necessarily contravene the overarching obligation not to bring a claim with no proper basis. A legal practitioner may be completely misled and deceived by their client about the facts, or not be provided with all relevant documents. What appears to be a quite tenable claim might be met with compelling defences, and information often comes to light during the course of the litigation process which substantially alters the evaluation of the merits of any claim or any defence.

109 Given that the s 29 application focuses upon the past administration of the estate and the respondent's conduct at the time this proceeding was issued, and the removal application concerns the conduct of the estate after the parties entered into the settlement deed and the future conduct of the estate, I shall deal with the s 29 application first.

Section 29 application

110 As noted earlier in these reasons, three complaints are made against the respondents in the s 29 application.

111 The more specific complaints concern the contents of the original affidavit. The defendant claimed that by not including the executor's correspondence in the original affidavit, the respondents misled the Court, because if the executor's correspondence had been exhibited to the original affidavit, then it would have been apparent to the Court that the plaintiff's claims had no merit, and the Court would not have granted leave to bring the proceeding by way of originating motion pursuant to r 45.05(2)(b) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules'). The second complaint concerned the plaintiff's statement in the original affidavit to the effect that neither the estate solicitors nor the defendant had responded to Ms McManus' letters of 19 and 26 October 2021. The defendant says that this statement was false, as she did in fact respond to that correspondence, as is evidenced by the executor's correspondence.

112 The final, more general complaint was that as at the time the proceeding was commenced, the plaintiff (with the assistance of Ms McManus) was not justified in bringing her claims in this proceeding. Essentially, the defendant contends that the claim was bought without a proper basis, and should be (or should have been), summarily dismissed.

113 All of the defendant's complaints are misconceived, and the s 29 application will be dismissed, as explained further below. Given the outcome of the s 29 application, it is not necessary for me to deal in any detail with some of the issues associated with the defendant's claim for compensation, such as the availability of compensation for personal injury under s 29(1) of the CPA, and the causation issues arising from the defendant's claim to be reimbursed for CGT, although I will refer to the latter issue briefly later in these reasons.

114 I will turn first to the defendant's specific complaint regarding the failure of the original affidavit to include the executor's correspondence. Setting aside for the moment the question of whether the respondents had an obligation under the CPA to disclose the executor's correspondence, the defendant's complaint is predicated on the proposition that the inclusion of the executor's correspondence would have led the Court to form a different view about the merits of the removal application.

115 However, my conclusion that the plaintiff was justified in bringing this proceeding in order to, at the very least, seek orders for the sale of the property, as discussed later in these reasons, was based upon a review of all of the evidence, including the executor's correspondence. The executor's correspondence largely concerned the defendant's decision to instruct the estate solicitors to transfer the property to the beneficiaries, which, as will be discussed in the following section of these reasons, was unlawful in the absence of consent from the plaintiff.

116 In any event, the defendant's submission to the effect that the respondents were under an obligation to disclose all relevant material in the original affidavit is misconceived. Provided that parties do not mislead the Court, there is no obligation upon a party in an application which will be served upon the other party to disclose any evidence which may not support that party's evidence or position provided that they do not mislead the Court.[36] The position is different where a party is making an application ex-parte, that is, in the absence of the party against whom the relief is claimed, such as where an application for an urgent injunction or freezing order is made. There, the party seeking relief must disclose all facts and matters relevant to the determination of whether to grant the relief concerned, even if that fact or matter is contrary to the position or interests of the party seeking relief.

117 But that is not this case. The proceeding was issued and served in the usual way, and the defendant filed and served the reply affidavit. At no stage was the defendant denied the opportunity to put any relevant material before the Court, and, she has in fact taken the many opportunities available to her to do so.

118 Furthermore, the defendant's submissions regarding the omission of the executor's correspondence from the original affidavit are founded upon an assumption that the inclusion of the executor's correspondence in the original affidavit would have undermined the plaintiff's claims in this proceeding. However, as will be seen from the discussion later in these reasons regarding whether the respondents have breached their obligations under s 18 of the CPA, the contents of the executor's correspondence in fact reinforce the merits of the plaintiff's claims in this proceeding. I also accept the submissions advanced by the plaintiff and Ms McManus that the contents of the executor's correspondence would not have materially added to the body of knowledge before the Court, and that its omission did not amount to a breach of any duty of candour owed to the Court by the respondents or either of them.

119 The defendant's complaint regarding the absence of the executor's correspondence from the original affidavit was also in part based upon an erroneous assumption that the Court was required to grant leave to the plaintiff to issue the proceeding, and in fact did so, based upon the contents of the original affidavit. It can be inferred from the defendant's submissions that she contends that, if the Court did grant leave to proceed by way of originating motion, the Court did so having been misled by the absence of the executor's correspondence from the original affidavit, and, if the executor's correspondence had been included in the original affidavit, the Court would not have granted the plaintiff leave to proceed. Again, this submission is misconceived.

120 Rule 45.05 of the Rules provides as follows:

(1) In this Rule "plaintiff" includes a person who proposes to commence a proceeding by originating motion.

(2) The Court may by order -

(a) dispense with the requirements of Rules 5.03(1) and 8.02; and

(b) authorise the plaintiff to commence a proceeding by originating motion in Form 5C.

(3) Without limiting paragraph (2), an order may be made -

(a) in an urgent case;

(b) to save time and expense for the parties; or

(c) where the defendant consents.

(4) An order may be made on application by the plaintiff before or after the proceeding is commenced and, except where the originating motion has been served on the defendant, application may be made without notice to the defendant.

121 The special procedure under r 45.05 permits the Court to dispense with the requirement in r 5.03 that the originating motion must specify a date for the defendant to file a notice of appearance, prior to which a plaintiff is unable to obtain judgment against the defendant. The special procedure also dispenses with the requirement for a defendant to file and serve an appearance before taking a step in a proceeding.

122 The heading to and contents of r 45.05 show that this rule is intended to facilitate the speedy hearing and determination of urgent disputes. The grant of leave would generally be based upon a determination of whether the Court is satisfied that the proceeding falls within the categories of proceedings referred to in r 45.05(3), not upon the Court's assessment of the merits of the case.

123 No order has been made by the Court granting leave to the plaintiff to commence or continue this proceeding by way of Originating Motion in Form 5C. That is unsurprising, because the plaintiff has not sought to invoke the special procedure under r 45.05. Rather, the originating motion was issued in Form 5B, for which no leave of the Court is required.

124 Accordingly, the failure of the respondents to include the executor's correspondence in the original affidavit did not amount to a breach of any overarching obligation, and in any event, the absence of the executor's correspondence from the original affidavit had no practical consequence for the conduct of the proceeding.

125 As for the allegation that the plaintiff's statement in the original affidavit that neither the defendant nor the estate solicitors had responded to Ms McManus' letters of 19 and 26 October 2021, this issue can be dealt with quite promptly. The estate solicitors did not respond to either of Ms McManus' letters. The only correspondence emanating from the defendant after 19 October 2021 were the following documents:

(a) an email from the defendant to the estate solicitors on 18 October 2021, copying in the plaintiff, confirming her instructions to transfer the property to the beneficiaries;

(b) on 24 October 2021 the defendant forwarded to the plaintiff an email sent by her to the estate solicitors on 22 October 2021;

(c) on 27 October 2021 the defendant sent a further email to the estate solicitors, copying in the plaintiff; and

(d) on 28 October 2021, defendant sent an email to the estate solicitors, copying in the plaintiff, which referred to Ms McManus' letter of 26 October 2021, but did not directly engage with the matters raised in that letter. The defendant simply restated her instructions to the estate solicitors to transfer the property to the beneficiaries, and reiterated her position that transferring the property to the beneficiaries prior to the expiry of the CGT grace period was in the best interests of the estate and the beneficiaries.

126 Furthermore, Ms McManus' letters of 19 and 26 October 2021 were addressed to the estate solicitors, not the defendant, such that the plaintiff's statement to the effect that Ms McManus had received no reply to her correspondence from the estate solicitors was completely accurate. Ms McManus received no response from the defendant either. While the plaintiff's statement in the affidavit could have been qualified by a statement along the lines that 'while between 24 and 28 October 2021 the defendant sent me copies of communications she had with the estate solicitors...', the failure to include such a qualification did not render the statement dishonest. In any event, given that the defendant's instructions to the estate solicitors amounted to a clear rejection of the plaintiff's position, as set out in Ms McManus' letters of 19 and 26 October 2021, the failure to include a qualification of that kind made no material difference to any assessment of the merits of the plaintiff's claims in this proceeding.

127 Turning finally to the general complaint to the effect that the removal application lacked merit and should be summarily dismissed, it should be kept in mind that at the time this proceeding was issued, the parties were at an impasse, and there was some degree of urgency. The defendant had instructed the estate solicitors to transfer the property to the beneficiaries, over the strident opposition of the plaintiff (both directly and via Ms McManus). While the CGT grace period had expired, it seems to be the case that the prospects of receiving a dispensation from the requirement to pay CGT would improve if there was litigation on foot regarding the administration of the estate.

128 The defendant says that the removal application lacked merit, because instructing the estate solicitors to transfer the property to the beneficiaries was justified and was in the best interests of the beneficiaries, and in any event, in 2020 the plaintiff had signalled her agreement to either the buy-out proposal or to transferring the property to the beneficiaries. However, as explained to the defendant in some detail and on numerous occasions by Ms McManus, the defendant's contentions in that regard were both factually and legally untenable.

129 Contrary to the defendant's contention to the effect that the terms of the will were somehow superseded by the informal agreement, the starting point of any analysis of the merits of the plaintiff's claims must be the terms of the will. Clause 4 of the will directed the defendant to:

UPON TRUST to sell call in and convert into money so much and such of my said estate as shall not consist of ready money and to hold the net proceeds arising from such sale calling in and conversion together with any ready money of which I may die possessed AFTER PAYMENT thereout of all my just debts funeral and testamentary expenses and State Probate and Federal Estate Duties which may be payable on my estate to hold the net remaining balance of my estate UPON TRUST for my daughters the said CHRISOULA VRANTSIDIS and FRIDERIKI VRANTSIDIS in equal shares.

130 Accordingly, in the absence of the consent of the plaintiff, the will did not enable the defendant to compel the plaintiff to accept the buy-out proposal, or authorise the defendant to distribute the property in specie to the beneficiaries.[37] In the absence of any agreement evidenced in writing regarding the buy-out proposal,[38] or any consent by the plaintiff to the transfer of the property to the beneficiaries, the defendant was obliged by the terms of the will to sell the property and distribute the proceeds equally between the beneficiaries. Her failure to do so, and in particular her failure to do so prior to the expiry of the CGT grace period, means that the defendant was in breach of her duties as executor, and as such, the removal application (which also sought an express order for the sale of the of the property and the distribution of the proceeds in accordance with the terms of the will) had, on its face, reasonable prospects of success.

131 In any event, even if the plaintiff had not been successful in removing the defendant as the executor of the estate, the plaintiff would have almost certainly been successful in obtaining an order compelling the defendant to sell the property, given the defendant's refusal to fulfil the conditions of the 30 June offer, and the plaintiff's opposition to the transfer of the property to the beneficiaries. As it is clear from the evidence, including the pre-proceeding correspondence and the terms of the settlement deed, that the sale of the property was the plaintiff's primary goal when she commenced this proceeding, it could not be said that the proceeding, at the time that it was issued, lacked any merit or utility.

132 The defendant relied upon the following matters to justify her conduct in the period leading up to the issue of this proceeding:

(a) the plaintiff had contemplated and consented to the estate, or the beneficiaries, retaining the property beyond the expiry of the CGT grace period, as evidenced by the spreadsheet prepared by the plaintiff in early 2020;

(b) in May 2020, the parties entered into the informal agreement, and the administration of the estate proceeded on the basis of the informal agreement, not the terms of the will. The plaintiff only reneged on the informal agreement when she learnt that the property may have been worth more than the value agreed under the informal agreement;

(c) she was justified in refusing to execute the loan agreement and the DFA, because the terms of those agreements contemplated the repayment of the plaintiff's notional loan to the defendant to the estate, not the plaintiff, and accordingly, the estate would not have been finalised within the CGT grace period;

(d) the proposed transfer of the property to the beneficiaries was entirely justified in light of the looming expiry of the CGT grace period. The plaintiff's refusal to consent to that course of action was unreasonable, and was the substantial cause of this litigation; and

(e) she had otherwise taken all steps necessary to finalise the estate.

133 None of the above matters justify the defendant's refusal to sell the property in a timely fashion after the plaintiff demanded that she do so, or, at the very latest, promptly after she decided not to comply with the conditions of the 30 June offer.

134 Turning first to the alleged consent of the plaintiff with respect to the possible retention of the property, the defendant relied upon a spreadsheet prepared by the plaintiff between March 2020 and May 2020. The spreadsheet calculated the possible costs and benefits of retaining the property for two years or longer (including by the beneficiaries as co-owners after the expiry of the CGT grace period) based upon what turned out to be a mistaken assumption that property prices would fall as a consequence of the COVID-19 pandemic.

135 However, that the plaintiff was prepared to contemplate a particular course of action in the course of discussions and negotiations cannot be relied upon to evidence the plaintiff's consent to an appropriation of the property contrary to the terms of the will nearly two years later, particularly in the light of her express refusal, on multiple occasions, to provide such consent. This contention lacks merit.

136 As for the informal agreement, while there appears to be little doubt that an oral agreement of the nature asserted by the defendant was reached between the parties, it is trite law that an agreement for the disposition of an interest in land must be in writing, or memorialised in writing.[39] No doubt the defendant has been advised by either or both of the estate solicitors or Madgwicks that the informal agreement was legally unenforceable, or otherwise the defendant would have taken action to compel the plaintiff to give effect to the informal agreement.

137 In any event, the terms of the 30 June offer largely mirrored the terms of the informal agreement (including as to price), save for the inclusion of more rigorous repayment terms, which, in the circumstances revealed by the evidence, were not unreasonable for the plaintiff to demand.[40] The contention that the informal agreement somehow displaced the terms of the will, or that the plaintiff acted unreasonably in failing to give effect to the terms of the informal agreement lacks any legal or factual basis.

138 The defendant's contention that the terms of the loan agreement and the DFA were inconsistent with the terms of the 30 June offer, and if the defendant executed those documents, she would not be acting in the interests of the estate, because the estate would not be finalised within the CGT grace period, was only articulated in full during the hearing on 4 July 2024 and in the submissions filed by the defendant after that hearing. The only explanation provided by the defendant and the estate solicitors at the time (in mid October 2021, a fortnight prior to the expiry of the CGT grace period) was that Ms McManus had delayed providing the DFA and the loan agreement to the estate solicitors.[41]

139 The loan agreement and the DFA did in fact contemplate the repayment of the notional loan by the plaintiff to the defendant to the estate after the expiry of the CGT grace period, which would have meant that the estate would not have been finalised within the CGT grace period. But, while it would have been cleaner for the DFA to provide for a repayment from the defendant to the plaintiff rather than from the defendant to the estate, and then subsequently a payment by the estate to the plaintiff, there was no prejudice to the estate or the beneficiaries arising from that term of the DFA. The liability to pay CGT (and, accordingly, the exemption from CGT) attaches to the relevant asset (being the property) not to the estate itself. As long as the defendant in her capacity as the executor of the estate disposed of the property within the CGT grace period, which was in fact contemplated by the DFA, no CGT would be payable by the estate or the beneficiaries, regardless of whether or not the administration of the estate remained on foot after the expiry of the CGT grace period.

140 The terms of the DFA (see paragraph 26(k) of these reasons) provided that the property would be transferred to the defendant within 14 days of the date of the execution of the DFA. The plaintiff executed the DFA on 14 October 2021, that is, 17 days prior to the expiry of the CGT grace period.

141 Accordingly, the defendant's explanation as to why she did not execute the DFA and loan agreement is completely misconceived. In any event, if she genuinely held those concerns in September/October 2021 (and there is room for doubt that she did hold such concerns), those concerns could have been resolved by seeking a further explanation from Ms McManus, or suggesting some reasonably simple drafting changes, neither of which occurred.

142 Finally, I have already observed that the defendant was not authorised to transfer the property to the beneficiaries without the plaintiff's consent, and the evidence makes it clear that, whatever may have been considered in the past, that consent was not forthcoming. Indeed, that the plaintiff's consent was required was implicitly conceded in the letter from the estate solicitors to Ms McManus of 15 October 2021 (see paragraph 28(c) of these reasons), where the estate solicitors asked '...as to whether your client will agree to the transfer of the property to the beneficiaries taking place.'

143 Notwithstanding the subjective belief of the defendant regarding what was in the best interests of the estate and the beneficiaries, it cannot be, objectively speaking, in the best interests of the beneficiaries to act contrary to the terms of the will save where expressly authorised by law. The proposed transfer of the property to the beneficiaries was not authorised by law.

144 As for the question of whether the plaintiff acted unreasonably in withholding her consent to the transfer of the property to the beneficiaries, it would have been open to the defendant, once the tax liabilities of the estate had crystallised, to seek judicial advice on the question of whether she was justified in adjusting the beneficiaries' entitlements in order to reflect the parties' responsibility for causing the estate or the beneficiaries to incur unnecessary CGT liabilities. But that is not what she did. Rather, the defendant proposed a course of action which was unlawful.

145 In any event, when one reviews what transpired over the course of 2020 and 2021, in my view, the plaintiff's refusal to consent to the transfer of the property to the beneficiaries was not unreasonable. Notwithstanding the terms of the will, the plaintiff had attempted, for over a year, to accommodate the defendant's desire to acquire the property. Even after the plaintiff retained Ms McManus, she continued to agree to facilitate the buy-out proposal at a price consistent with the informal agreement.[42] The plaintiff's explanation for not wishing to become an owner of the property was entirely reasonable. As well as the stated reasons of not wishing to have the financial liabilities associated with the ownership of the property, by October 2021 she must have (reasonably) been quite wary of being in an ongoing legal relationship with her sister.

146 After all, it is clear from the evidence that the defendant was very keen to retain the property, but did not necessarily have the financial wherewithal to acquire the plaintiff's share of the property within a reasonable period of time. If the plaintiff became the co-owner of the property, she faced having a significant amount of capital tied up in the property, which, given the defendant's attachment to the property, she may not be able to realise promptly without taking legal action. It is clear from the contents and tone of the plaintiff's correspondence with the defendant that the plaintiff is a competent and cautious person when it comes to her personal financial affairs, and no doubt such concerns loomed large in her deliberations.

147 For completeness, I reject the defendant's submission to the effect that the plaintiff's conduct in refusing to consent to the transfer of the property to the beneficiaries was motivated by a desire to obtain government benefits, including a health care card, and as such was self-serving and unreasonable. Regardless of whether that allegation is in fact true (it is denied by the plaintiff), people are entitled to structure their affairs in a way which maximises their entitlements to government benefits, provided they act within the law. Indeed, why should a person in the position of the plaintiff put herself in a position of financial disadvantage for the benefit of someone who, by that time, was acting unreasonably and contrary to her fiduciary duties?

148 Accordingly, as at the time she commenced this proceeding, the plaintiff had reasonable grievances regarding the conduct of the defendant, and was justified in bringing this proceeding. The removal application had reasonable prospects of success, and her application for an order that the property be sold had overwhelming prospects of success. Indeed, the merits of the plaintiff's initial claims in this proceeding were reflected in the terms of the settlement deed, which was agreed to by the defendant with the benefit of legal advice. While the settlement deed did not require the defendant to cease acting as the executor, the settlement deed required the property to be sold. The respondents have not breached their obligations under s 18 of the CPA.

149 Accordingly, given that the s 29 application will be dismissed, it is not necessary for me to consider any of the issues arising from the defendant's compensation claim, save to make some observations regarding the defendant's claim that she be compensated by the plaintiff for any CGT payable by her by reason of the sale of the property after the expiry of the CGT grace period.

150 The main difficulty with this part of the defendant's claim (apart from the merits of the claim) is one of causation. While the Court has broad powers under s 29(1) of the CPA, the overarching obligations only apply to participants in civil proceedings (s 10 of the CPA), and then only in respect of their conduct of a civil proceeding (s 11 of the CPA). Setting aside the question of where the responsibility for the failure to transfer the property prior to the expiry of the CGT grace period should lie, the CGT grace period expired prior to the issue of this proceeding, so the conduct of either party prior to that time did not give rise to any obligations under the CPA, or attract any remedies under s 29 of the CPA.

151 Further, any claim for compensation, even if available and tenable, may need to take into account any increase in the value of the property after the expiry of the CGT grace period.[43] However, there is no direct evidence before the Court about the price at which the property was ultimately sold.

152 In my view, both the manner in which the defendant has approached her executorial duties and her failure to fulfil these duties in a timely and responsible manner disqualify the defendant from continuing to act as the executor of the estate.

153 In this section of these reasons, I have largely focussed upon the defendant's conduct after the execution of the settlement deed for the purposes of the determination of the removal application, although the defendant's conduct of the administration of the estate prior to the issue of this proceeding is also relevant to the determination of the removal application. As I have said on earlier occasions, past performance is an indicator of future performance,[44] and the defendant's conduct in the period leading up to the issue of this proceeding was unreasonable and in breach of her duties as executor, as explained in the preceding section of these reasons.

154 The conduct of the defendant since the execution of the settlement deed, and in particular since she parted company with Madgwicks in about September 2023, has been characterised by delay, disputation, and a complete misconception of her role and responsibilities as executor. Her conduct seems to have stemmed from what appears to be a case of buyer's remorse with respect to the settlement deed, in that she now claims that it was not in her interests to execute the settlement deed.

155 By way of example, the defendant's decision not to progress the finalisation of the tax affairs of the estate was said to have been based upon the defendant's view that the tax advice received by the estate was based upon the settlement agreement, which in turn was said to 'conceal' certain unspecified matters. But, assuming that the tax advice received by the estate is otherwise sound (and there is nothing before me to suggest that it is not), the executor is entitled to, and indeed is obliged to proceed upon the tax advice received by the estate. While the settlement deed is in force (and no action has been taken by the defendant to have it set aside), it governs the rights and obligations of the parties and the disposition of the estate. There is no rational basis for the defendant's apparent belief that the taxation affairs of the estate cannot be finalised, and no excuse for the defendant's failure to cooperate with the plaintiff to amend the settlement deed to reflect the taxation advice to the effect that no private ruling on CGT is required to be sought by the estate.

156 As for the trust account issue, the nub of the defendant's complaint seems to me that the $26,000 she paid to the estate solicitors in 2021 in order to fund the costs associated with the buy-out proposal have not been properly accounted for. I understand the defendant to be saying that these funds should have been refunded to her by the estate solicitors after the buy-out proposal did not proceed, or should have been reflected in the accounts of the estate as a debt owing to her, which presumably should be taken into account in any final distribution of the estate funds.

157 The defendant may well have a legitimate grievance here. But it is an issue which should have been resolved within weeks or at most months of the defendant becoming aware of this issue in late 2022.[45]

158 The trust account issue is an issue which should have been capable of prompt investigation and resolution by the defendant. There is no reason to doubt the defendant's evidence that she paid the funds to the estate solicitors. If those funds have not been returned to her they should be, or an appropriate adjustment should be made to the estate's accounts. This is not an issue which should impede the finalisation of the estate.

159 The evidence shows that the defendant has been informed on numerous occasions that in order to resolve the trust account issue, she needs to make inquiries of the estate solicitors, who were in receipt of and apparently dealt with the funds in question. But there is no evidence that she has done so, or even acknowledges the need to do so. Rather, she has focussed upon attempting to have this Court compel Madgwicks to solve a problem that is not in their capacity to solve, given they no longer act for the defendant.

160 The defendant also contended that the estate could not be finalised before the resolution of the s 29 application because in the s 29 application she sought compensation for any CGT payable by her with respect to the sale of the property, and as such, the estate funds could not be entirely distributed. On one view, that is correct, in that if any order for compensation was made, one source of funds for the recovery of any compensation payable by the plaintiff (although, I note, not any compensation payable by Ms McManus) would be the estate funds. That said, I note my earlier observations to the effect that any liability to pay CGT with respect to the sale of the property is not compensable under s 29 of the CPA, regardless of the merits of such a claim.

161 Further, while recourse to the estate funds would be a convenient way of meeting any successful compensation claim by the defendant, there would be no legal barrier to finalising the taxation affairs of the estate, paying out any other creditors of the estate, resolving the trust account issue, and distributing the balance of the estate funds to the beneficiaries prior to the resolution of the s 29 application. If there was a judgment in favour of the defendant as a result of the s 29 application against the respondents or either of them, then any judgment debt could be recovered in the ordinary way without recourse to the estate funds. There is no evidence to suggest that the plaintiff otherwise has no assets, and the respondent is no doubt backed by an insurer.

162 Accordingly, none of the matters relied upon by the defendant justify the defendant's delay in taking the relatively modest steps involved in finalising the estate. The estate should have been administered by, at the latest, the end of 2023, but arguably, by the end of 2022. Instead, the defendant issued the s 29 application, which I have found to have been without merit, and indeed misconceived, and has taken no positive steps to finalise the estate.

163 The defendant's delay in finalising the administration of the estate seems to arise from her belief that this proceeding was unjustified, and the settlement deed was invalid. There is no proper legal or factual basis for either of those propositions, as discussed earlier in these reasons. Further, the defendant's conduct of this proceeding, along with her conduct which precipitated the issue of this proceeding, provides me with no confidence that she can be relied upon to carry out the relatively minor tasks required to finalise the estate with diligence, competence, and with due regard to the interests of the beneficiaries of the estate.

164 Indeed, the conduct of the defendant in this proceeding, along with the evidence, reveals that the defendant is strong willed, stubborn, and completely unreceptive to any advice that she does not wish to hear, whether it is advice from her sister, or legal and accounting professionals engaged to act for her and the estate. While professional advisers are not infallible, the defendant's refusal to accept professional advice does not augur well for the future administration of the estate if it remains in her hands.

165 Having determined that the executor should be removed as the executor of the estate the question remains as to whom should be appointed in her place. In the amended originating motion filed on 12 August 2024, the plaintiff did not press her original application that she be appointed as the executor of the estate, by reason of a perceived conflict arising out of the s 29 application, which at that time remained on foot. With the dismissal of the s 29 application, that is no longer a material consideration, but I have not heard any submissions on the question of who would be an appropriate executor.

166 Accordingly, the s 29 application will be dismissed, and the removal application will be granted. I will also grant the ancillary relief sought by the plaintiff in the amended originating motion, and hear further from the parties on the question of costs and the question of who should be appointed as the executor of the estate in place of the defendant.

[1] The evidence regarding the trust account issue is a little confusing, but I understand that the defendant contends that the estate solicitors had wrongfully characterised a payment to them by the defendant of approximately $26,000 as estate funds, rather than as the defendant's personal funds, and that Madgwicks has, despite the defendant's repeated requests, failed to investigate and/or rectify this error. Further, the defendant has criticised the estate solicitors for deducting their legal fees from the funds held by them on trust prior to their transfer to Madgwicks, but it is not clear from the materials whether the defendant contends that the estate is not liable to pay those fees.

[2] The executor's correspondence includes mainly email correspondence between the defendant, the estate solicitors and the plaintiff (but not Ms McManus) in September and October 2021.

[3] Rule 45.05(2)(b) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) provides that '[t]he Court may by order authorise the plaintiff to commence a proceeding by originating motion in Form 5C'. The defendant submitted that the Court must have considered the validity of the claims disclosed in the original affidavit prior to granting leave to the plaintiff to commence this proceeding. As explained later in these reasons, this submission is misconceived.

[4] (1975) 3 All ER 333.

[5] This payment was the amount said by the defendant to have been wrongly characterised by the estate solicitors as funds of the estate (see fn 1).

[8] The defendant says in the s 29 application that this evidence is false, referring to the executor's correspondence.

[9] This is a reference to a property owned by the defendant, which the defendant intended to sell in order to fund the purchase of the plaintiff's share of the property.

[10] I infer that the defendant is contending that the plaintiff only changed her mind about the buy-out proposal when she learnt that the value of the property may have been higher than she originally anticipated at the time she entered into the informal agreement.

[11] Neither the plaintiff nor Ms McManus were copied into this email, but this email was forwarded to the plaintiff by the defendant on 24 October 2021.

[13] The solicitor at Madgwicks with care and conduct of the defendant's file.

[14] The loan agreement and DFA provided that the plaintiff's half-share of the property would be loaned by the plaintiff to the defendant to enable the defendant to purchase the plaintiff's share of the property, with the loan repayable to the estate, not the plaintiff.

[15] (2021) 69 VR 28 ('Bolitho').

[16] The plaintiff did not directly address the removal application in her submissions at the hearing on 4 July 2024, because all that was on foot at that hearing was the amendment application and the s 29 application.

[17] Administration and Probate Act 1958 (Vic), s 46(1).

[18] [2024] VSC 281.

[20] See also Richardson v Johnson [2018] VSC 85; Sampson v Charleton [2022] VSC 597; Jortikka v Haukka [2023] VSC 20; Re Johnson; Blackham v Blackham [2024] VSC 497; Re Nanut; Nanut v Nanut [2024] VSC 21.

[21] To the extent that the defendant relies upon the obligation in s 17 of the CPA, being the obligation to act honestly, the position is correctly summarised in the first paragraph of the plaintiff's submissions extracted at paragraph 75 of these reasons.

[22] [2014] VSC 400; (2014) 48 VR 1 ('Dura Constructions').

[28] [2021] VSC 666.

[31] [2013] VSCA 73; (2013) 40 VR 587.

[33] CPA s 29(1)(c). See also Gabelich v Donaghey [2018] VSC 184.

[34] Gabelich v Donaghey [2018] VSC 184 [90]. This principle is relevant to the defendant's claim to be indemnified for any CGT liability incurred by her as a consequence of the sale of the property after the expiry of the CGT grace period.

[35] Yunghanns v Colquhoun-Denvers (s 29 application) [2021] VSC 243 [111].

[36] Forster v Legal Services Board [2013] VSCA 73; (2013) 40 VR 587 [161].

[37] Administration and Probate Act 1958 (Vic), s 46(1).

[38] Instruments Act 1958 (Vic), s 126.

[39] Instruments Act 1958 (Vic), s 126.

[40] It seems that what the parties originally contemplated in about May 2020 was that the defendant and her husband would take steps to prepare the Doncaster East property for sale, following which that property would be sold, and the proceeds used by the defendant to buy out the plaintiff's share of the property. However, by March 2021, there had apparently been little progress in preparing the Doncaster East property for sale, which the plaintiff acknowledged was at least in part owing to COVID-19 restrictions. The delays caused the plaintiff to revisit her position with respect to the informal agreement, as evidenced by the correspondence between the parties in March and April 2021 (see paragraph 26(d) of these reasons).

[41] The evidence shows that the defendant accepted the 30 June offer on 15 July 2021. On 17 July 2021, Ms McManus wrote to the estate solicitors requesting funds for the preparation of the DFA and loan agreement, which were provided on 5 August 2021. On 19 August 2021, Ms McManus telephoned the estate solicitor seeking the defendant's agreement to the one year repayment term, and received confirmation of the defendant's agreement to that term on 31 August 2021. The loan agreement and DFA were sent to the defendant and the estate solicitors on 14 September 2021. No communication was received from the estate solicitors or the defendant until 14 October 2021. On that day, the plaintiff executed the loan agreement and DFA, and she also received an email from the defendant to the effect that owing to Ms McManus' delays, she had instructed the estate solicitors to transfer the property to the beneficiaries (see paragraph 28(b) of these reasons).

[42] Contrary to the defendant's insinuation that the plaintiff's failure to honour the informal agreement was motivated by greed.

[43] Jortikka v Haukka [2023] VSC 20 [68].

[44] See Richardson v Johnson [2018] VSC 85 [57]; Sampson v Charleton [2022] VSC 597 [102]; Jortikka v Haukka [2023] VSC 20 [43]. See also Re Estate of Vaughan; Dunn v Dunn-Vaughan [2024] VSC 7 [639]; Brito-Babapulle v Brito-Babapulle [2024] VSC 281 [22].

[45] Although the defendant must have been aware in late 2021 that the money she paid the estate solicitors to facilitate the buy-out proposal had not been refunded to her.