Conflict within the Estate of the Late Jocelyn Margaret Richardson
- In Richardson v Richardson Ward CJ in Eq dealt with a claim commenced in 2019 ("the 2019 proceedings") in the administration of the estate of the deceased brought by Gregory and Mark Richardson against their brother Wayne for possession of an estate property, mesne profits and damages. Wayne Richardson had been occupying the main asset of the estate, a property in Epping after the deceased's death without paying an occupation fee.
- The deceased's will had appointed the three sons, Gregory, Mark and Wayne as executors of the estate. Because of the conflict among the executors, the original 2017 grant of probate to the three brothers was revoked and Mr Hartmann was appointed as an independent administrator in December 2019.
- Wayne did not vacate the property in accordance with orders of the Court. Mr Hartmann sought the issue of a writ of possession and as a result the sheriff entered the property, changed the locks and evicted Wayne, although some of his personal property remained on the property.
- Wayne had left chattels and other personal possessions on the property. Mr Hartmann therefore took the course of authorising Ms Ninette Maddrell, Gregory's partner, to dispose of all furniture and effects that remained at the Epping property as she deemed fit. He notified Wayne and Mark that he was proposing to take this course by email dated 11 August 2020: Richardson v Richardson at [63].
- Ms Maddrell located a storage facility to store Wayne's possessions. Mr Hartmann wrote to Wayne that his goods would be stored at the storage facility until he contacted Ms Maddrell. Mr Hartmann warned Wayne that he would be seeking orders to dispose of Wayne's personal effects unless Wayne, made arrangements with the storage proprietor and Ms Maddrell to pay for the storage and collection of the goods. Mr Hartmann warned the parties that all the expenditure of the goods left on the Epping property would be deducted from monies due to Wayne on the sale of the residence.
- Despite Wayne seeking to prevent the sale, the Epping property was sold in December 2020.
- Mark and Gregory's claims against Wayne in the 2019 proceedings were more wide ranging. They included a claim for damages for breach of his executorial duties, because as one of three executors he had obstructed the orderly administration of the estate. Wayne represented himself in the proceedings. He disputed the rent payable, his degree of possession of the property and he criticised the administrator's conduct and that of Ms Maddrell in taking his possessions from the property. It is evident from her Honour's findings that there was significant tension between Wayne Richardson on the one side and Ms Maddrell and Gregory Richardson on the other: Richardson v Richardson at [132]. Wayne also strongly disputed the amount of work that both Ms Maddrell and Mark Richardson had claimed to undertake on the property to clean it up for sale.
- In the result in the 2019 proceedings Ward CJ in Eq ordered Wayne to pay damages for breach of his executorial duties including for lost rent, for utilities' costs and rates, for costs of the independent administrator, and for interest on a mortgage over the Epping property to Westpac. Her Honour also made a lump sum costs order against Wayne. All of these sums were permitted to be deducted from Wayne's share of the estate.
- This background in relation to the 2019 proceedings leads to the issues that arose in the present proceeding.
- Mr Hartmann's Summons divided the payment into Court of $569,742.35 into two parts: $449,176.95 to Mark Richardson; and the sum of $120,565.40 paid to Wayne Richardson, both as beneficiaries of the estate. The lower amount paid to Wayne Richardson was because of the orders made Ward CJ in Eq made in the 2019 proceedings against Wayne. Gregory had already accepted his share of the estate before the administrator's payment into Court.
- After completion of the sale of the Epping property, Mr Hartmann wrote to the three residuary beneficiaries on 5 August 2022 in which he referred to the continuing issues in the administration of the estate. These included: the quantification of the legal cost to be deducted from Wayne's share, the value of the deceased's jewellery, allegations of dishonesty made against Ms Maddrell which she denied (Mr Hartmann accepted her denial), compensation to Ms Maddrell for work she undertook at the property in the sum of $18,018.90, a bequest to one of the deceased's grandchildren (a child of Mark who had been adopted out and made the subject of an adoption order), and a claim by Mark that he had had a wife and child who had died in the Indonesian tsunami (but evidence of their existence was disputed and the administrator was not satisfied about Mark's claims about them).
- As a result of that letter, Gregory advised he was satisfied with the distribution proposed on 5 August 2022. Mr Hartmann heard nothing from Wayne. Mark filed a motion for an order for a passing of accounts for the administration of the estate. On 16 August 2023, Hallen J made orders to refine the issues in the accounting dispute by the provision of information to Mark and requiring him to identify the matters he was disputing and the documents which Mark was alleging were missing from estate records.
- Mark's motion came on for hearing before Hallen J on 20 March 2023. Mark did not proceed with the motion and Hallen J ordered that Mark pay his own costs with Mr Hartmann's costs being paid out of the estate. The matter was then stood over before the Probate Registrar to deal with the passing of accounts. Mark later explained that he was in prison at the time that the motion was heard.
- The administrator sought to bring these issues to a head in a letter to the beneficiaries (copied to Ms Maddrell) dealing with all the outstanding issues and calculating the distribution from the estate to each of the beneficiaries dated 25 October 2023. The letter methodically went through Ward CJ in Eq's judgment. The administrator reached the conclusion that the proper deduction from Wayne's share of the estate was $353,785.76.
- The administrator calculated that the balance of the estate available for distribution after the role of the Epping property was $1,422,303.48. Divided three ways each beneficiary would receive $474,101.16. The administrator then made various deductions and additions to each beneficiaries share. In Mark's case, adjustments were necessary to reimburse him for expenditure on behalf of the estate and to deduct amounts already paid on his account by the estate and to credit him with a half share of the deceased's jewellery, leaving an amount due to him of $449,176.95. Similar calculations were undertaken to produce the amount due to Gregory of $354,101.16, and the amount due to Wayne of $120,565.40.
- The administrator's correspondence produced a response from Mark raising issues that disputed the administrator's conduct and the quantum of the proposed distribution to Mark. They were as follows:
1. the administrator's alleged failure to issue accounts for the estate;
2. the administrator's alleged refusal to accept expert advice about Mark's adopted child not being entitled under the will;
3. Mark contesting that he had added to the cost of administering the estate by wasting time and causing unnecessary expense;
4. a challenge to the payments made to Ms Maddrell;
5. the administrator's alleged failure to investigate and refer to the police the alleged theft of the estate's jewellery;
6. the loss of other estate assets including wine allegedly taken by Gregory Richardson or by Ms Maddrell;
7. allegations of the conversion of estate goods by Ms Maddrell, and the alleged failure of the administrator to prevent that conversion or to investigate it;
8. allegations of delay in the distribution of the estate and allegations of the administrator charging excessive professional fees; and
9. alleged lack of transparency in the accounts provided.
- Mark is an accountant. Regrettably his correspondence does not detail the precise ways in which the administrator was said to have failed to properly account to the beneficiaries in the administrator's 25 October 2023 letter. The administrator replied on 26 October 2023 to all the beneficiaries, rightly pointing out that Mark's comments were of a general nature and inviting specific objections to his calculations especially given that Mark has professional qualifications as an accountant.
- The following day the administrator invited the parties to execute a deed of release and indemnity between the administrator and his service entity on the one side and Gregory, Mark and Wayne on the other. The deed provided for a joint and several release of and on indemnity to the administrator by the three beneficiaries in consideration of the distribution in accordance with the administrator's calculations.
- Mark responded to the administrator's letter of 26 October 2023 in an email on 30 October 2023 in polemical terms as follows:
In your letter of 26th, how on earth can you claim what I have raised is general in nature. They were specific as far as what was paid out and my objections to them and how can you expect me to rely on what you have calculated when you won't support with documentation. Also you changed the distribution amount so many times and relied upon others to make calculations when you should have done it. Also your failure in your due diligence and not acting as you should effects the distribution.
- This was unhelpful and did not get to grips with the real issues. The administrator's criticism of Mark's correspondence was correct:
- The administrator decided to distribute to Gregory, who was prepared to execute a release and indemnity in the form provided by the administrator. The administrator responded to Mark stressing that he had complied with the orders made by Hallen J to provide information to Mark and that Mark did not proceed further within his motion. The administrator invited Mark to make any fresh complaints but to particularise them and made clear that he remained "willing to consider any reasonable submissions" provided they were made quickly. The position taken by the administrator was reasonable in the circumstances.
- On 31 October Mark wrote again to the administrator, declaring he had received legal advice that he did not have to sign the deed of release until the administrator had given complete disclosure of income and expenses and the calculation of the amounts of the payments made. Once again this was an allegation in very general terms which the administrator was not in a position to deal with without a more detailed critique being provided. The Court accepts that the administrator had provided the estate accounts to Mark as a result of Hallen J's orders of August 2023. Mark's email went on to say the following:
I also refrain [sic] you from distributing any money until the matter is resolved as it could effect the assets and balance of the estate impacting on my and their distribution amount.
- This restraint on distribution is to be contrasted with a later position taken by Mark in which he also requests this Court to accelerate distribution. Mark wrote again on 1 November, complaining that the amounts paid to beneficiaries cannot be confirmed "without extensive detailed paperwork and complete breakdown of income and expenses and how the totals of these were arrived at to which you refuse to provide". Mark's email continued to raise the issue of whether Ms Maddrell had converted estate movable assets.
- On 13 November 2023, Mr Hartmann confirmed that after Gregory had provided him with a signed release and indemnity that the administrator had paid estate funds to him in accordance with the calculation previously provided.
- This lead to a further standoff on 16 November in which Mark wrote to the administrator taking issue with the administrator's refusal to distribute because Mark had not signed a release. Mark protested that he did not have to sign a release to obtain his entitlements and he threatened to commence legal proceedings. But he did not commence any proceedings.
- On 17 November 2023 the administrator wrote to Mark reiterating that in response to Mark's motion he had prepared documents and served them upon Mark in response to Mark's motion heard on 20 March 2023 seeking further documents and that Mark had elected not to proceed with the motion.
- The administrator then communicated to Mark that he considered that the estate should not be put to further expense and that he proposed to pay the balance of estate funds available for Mark and Wayne into Court. Mark took issue with this email, indicating that he had not proceeded with the March 2023 motion because he was in custody on criminal charges. He reiterated that he was not obliged to sign documents before receiving distribution of the money due to him.
- A stalemate had been reached. The lack of satisfactory correspondence after this time lead to the administrator filing a Summons on 7 December 2023.
- The Summons was returnable before the Registrar on 14 February 2024. The Registrar referred the matter to the Probate List Judge that day. Mark appeared and sought to explain his position. He said that he had to withdraw his Notice of Motion because he, Mark, was in custody. He appeared to have as a principal complaint in his oral submissions that the administrator had charged $130,000 in legal fees and allegedly had not provided "a single invoice" for those fees. Mark complained about the retention by the administrator of $20,000 from the sum paid into Court and about the requirement that he sign a release as a condition of receiving his money. Moreover, he had difficulty seeing that his brother Gregory should not have to bear some of the costs of disputing the administrator's legal fees and having the administrator give more detailed accounts.
- The matter next came before the Court on 1 March 2024. Between 14 February and 1 March there was further contact between Wayne and the administrator and Mark and the administrator, encouraged by the Court. This correspondence did not in the end raise anything new. On 1 March both Mr Mark Richardson and Mr Wayne Richardson appeared. The positions taken by Wayne and Mark differed slightly.
- As to Wayne's position, he indicated he wanted to take "whatever share I am allowed as quickly as possible". He wanted a little more information from the administrator about the administrator's stewardship of the estate but his fundamental message to the Court was "I don't want to delay it" as he said in oral submissions. The administrator reiterated his position that he wanted the matter brought to an end. Mark reiterated the issues that he had raised in correspondence.
- The Court indicated that it would approach the matter by requiring Mark and Wayne, if he wished, to provide a list of what issues were outstanding with the administrator so that the Court could make a decision about whether the beneficiaries claims had any merit. Mark also protested that the money should never have been paid into Court. But that submission can be rejected because of the general right available to the Trustee Act 1925, Part 4 to pay money into Court. Then Mark indicated that he wished to press his motion for payment out of Court of the amount that Mr Hartmann had calculated. Mark continued to assert that he was entitled to unspecified "documentation" from the administrator prior to any distribution being made. But he nevertheless pressed his motion for distribution to him.
- The Court assesses Mark as well able to gather a final list of what he was complaining about. In its orders on 1 March, the Court noted that Mr Hartmann had received documents from Wayne and Mark, marked up to reflect the "final matters which they seek to have addressed by the administrator". Mr Hartmann was directed to provide a concise summary of those requests and to comply with them or to indicate that he could not comply with them by 20 March and to report to the Court on the next occasion. The matter was adjourned to 22 March 2024 to allow that to occur. After 1 March the administrator filed an affidavit attaching the documents received from Wayne and Mark respectively, setting out the matters they sought to have explained by the administrator.
- As to the document from Wayne, it was his original request of 11 July 2023 which was a comprehensive demand for the funds due to him, a $20,000 cheque for his claimed grandchild, the administrator's complete disbursement records, a complete list of all estate assets, a complete list of all costs associated with the auction of the Epping property, and answers to some 17 interrogatories about Ms Maddrell and Gregory.
- The administrator's response to Wayne was comprehensive and showed proper attention to Wayne's queries. The administrator replied to the issues raised as follows:
1. Wayne's complaint that he had not received a disbursement cheque was answered by the administrator explaining that because Wayne had not replied to the administrator's correspondence, Wayne's share had been paid into Court;
2. the administrator said he could not provide Wayne with the $20,000 cheque for his child because Wayne had not provided the administrator with any evidence that he was the father of a child and had not provided this information, as far back as when it was asked for by Ward CJ in Eq. in the 2019 proceedings;
3. Wayne's request for full and complete disbursement records and all receipts, debts paid and costs was answered by the administrator explaining they had been provided in his letter of 25 October 2023 and a list of liabilities had been provided to Mark and to the Court as a result of Mark's 2022 motion;
4. the administrator gave complete listings of all the estate assets but he explained that a detailed account of the disposal of each asset could only be obtained from the selling agent (Bargain Hunt). But the Court notes that the total amount auctioned by Bargain Hunt was only $1,962.92. All other requests for assets were met by access to the administrator's trust account;
5. the administrator was unable to produce documents recording the costs of preparing the Epping property for auction, but this is not surprising as this task was delegated to Ms Maddrell;
6. complaints about Ms Maddrell by Wayne were largely vexatious and irrelevant but dealt with by the administrator despite their lack of relevance. It is not reasonable to require the administrator to answer detailed interrogatories in relation to Ms Maddrell. The Court is satisfied that she was engaged to assist in preparing the Epping property for sale;
7. requests for documents in relation to Gregory turned out to be inquiries as to matters about which the administrator had no documents.
- The Court regards the administrator as having adequately satisfied all Wayne's requests with the administrator's response of 14 March 2024, in addition to the response to Wayne. The administrator wrote to Bargain Hunt seeking information but Bargain Hunt did not respond. The administrator has done all he reasonably could in relation to dealing with that aspect of Wayne's request. The administrator pointed out that the deceased died on 20 April 2016 and the administrator's list of estate items sold extends to sales up to 30 April 2021, which is more than 5 years later and 2 months after the deceased's death and after the sale of the deceased's residence that was completed on 19 February 2021. The administrator has acted upon Ms Maddrell's statements to him that 30 April 2021 is the last of the payments she received for the sale of goods. This seemed reasonable in the circumstances. The administrator said in his affidavit and to the Court that if any information came in from Bargain Hunt that he would provide it to Mark and Wayne.
- As to the document from Mark, he ultimately only asked for information about four matters. Those four matters and the administrator's response dealt are with below:
1. Documentation from Bargain Hunt
The administrator answered Mark's request for documentation from Bargain Hunt's specifying what was sold and for how much by Ms Maddrell, responding that the administrator was waiting for a reply for Bargain Hunt. The questioned Bargain Hunt sales amount is less than $2,000 and it is not reasonable to expend any further costs in seeking to verify this expenditure.
1. Break-up of money paid to Ms Maddrell
The administrator provided a complete breakdown of the total sum of $19,259.15 paid to Ms Maddrell, explaining how the sum was calculated.
1. Invoices for the administrator's costs
In response to Mark's request for invoices of the administrator's costs, the administrator has provided a full set of invoices issued to date which the Court has reviewed and which will be the subject of later comment in these reasons. The administrator's response to this request was adequate and comprehensive.
1. List of income received and expenses paid
The administrator replied to Mark's request for financial accounts of all the income he received and expenses he paid as administrator by reporting that there had been no income received since the ledger was provided to the beneficiaries in accordance with Hallen J's orders of March 2023. And the administrator provided an updated list of expenses since 21 March 2023 through the provision of a trust account statement.
- In the Court's view the administrator's response to Mark and Wayne's inquiries was cooperative, reasonable and complete. He verified that response in his affidavit of 19 March 2024 which was considered in the directions hearing that took place on 22 March 2024.
- The matter came back to Court for further directions on 22 March 2024. Both Mark and Wayne were served notice of this date but Wayne did not appear. In submissions, on this occasion, the Court foreshadowed various approaches it could take in resolving the matter on a final basis, including limiting claims that Mark or Wayne might make against the estate after the Court determined the current claims. The material was still not available from Bargain Hunt according to the administrator. But the matter could not proceed because Wayne had not appeared. But Mark began to complain to the Court about the quality of the documents that had been provided to him by the administrator. Mark asserted that "it is as clear as a bell that there are errors" in the material that the administrator had provided, but without being specific as to what those errors were. The Court decided to adjourn the matter to give Wayne an opportunity to be present during final argument on Mark's motion. Wayne was given notice of the adjourned date of Friday, 12 April 2024.
- On the final adjourned date of 12 April 2024 Wayne did not appear. Satisfied that Wayne had been served with notice of the adjourned date, the Court proceeded to hear argument from the administrator and Mark. The administrator reported on that occasion that Bargain Hunt was prepared to provide the information requested but had changed their accounting system and wanted $480 to retrieve the information requested. But in the Court's view given the small amount involved the expenditure of such sum is not reasonably proportionate to the importance of the information being sought. The Court will therefore not require that material to be provided.
- The administrator confirmed that he had received no further correspondence or complaints from Wayne and had received a formal acceptance from Gregory of the monies paid to him. But the administrator reported that the $20,000 that he had retained from the estate funds paid into Court had run out. The Court requested that he provide a memorandum of fees showing how the $20,000 had been expended. The Court will need to determine whether the shortfall in the administrator's fees will be borne by Mark or by Wayne or a combination of the two.
- The administrator submitted on this occasion made that he wanted finality in the issues raised by Wayne and Mark because as he explained, "I have repeatedly asked for specific complaints, and I haven't received them".
- But Mark maintained his complaints, even small ones such as Bargain Hunt. The Court has decided it will determine the validity of these various complaints.
- Mark put full submissions in support of his application for the money to be distributed to him, as his motion requested. The administrator also read his three affidavits of 5 December 2023, 26 February 2024 and 19 March 2024.
- Mark submitted that the administrator was refusing him money and should not have required him to enter into a Deed of Release. He disputed that the administrator was entitled to charge any more professional fees for the present proceeding. Mark further submitted that if the administrator had not demanded the Deed of Release that it would not have been necessary to have paid the money into Court and incur the costs of the present contest. Mark submitted, "if he would have paid the money to start with, we wouldn't be in Court".
- The Court pointed out to Mark that there was another way of looking at this: that Mark was continuing to threaten legal claims against the estate and it was in the interest of the estate for those claims to be finalised and the trustee was entitled to take action which to promote their finalisation and protect himself as to costs.
- Mark then shifted position and began to complain that the administrator had changed how much would be distributed. Mark questioned why the estate had not been finalised in 2021 and complained that he was out of pocket by about $74,000 because of the delay. Mark asked, "why has it taken two years after that to get to this point?"
- Much of that delay was caused by factors which should not be laid at the feet of the administrator. The Epping property needed to be cleared and sold. The deceased's possessions needed to be valued and distributed. Mark's, Wayne's and Gregory's various claims against the estate and one another needed to be investigated and answered. Mark's submissions do not appear to recognise that any of this was necessary. The estate could not have been finalised without selling the Epping property. Moreover, some of the costs were being expended on Mark's motion which he did not ultimately pursue.
- Beyond these matters Mark's submissions became repetitive. The Court does not always publish reasons for making orders on motions in the Probate List. But given the contentious nature of these proceedings the Court has decided to publish reasons for making the orders that it has.