Skaftouros v Dimos [2002] VSC 198

Skaftouros v Dimos [2002] VSC 198 - VSC 2002 case summary — Zoe

[73]

"? In relation to our services being terminated, we assume that the possibility of a conflict of interest may be the reason for your decision. If it is otherwise, we would appreciate an explanation. ? Normally, when an Accountant is succeeded by another, it is standard and expected practice to receive an Ethical Letter from the successor. We still require this as a matter of courtesy, as well as for our file. ? Our fees of $672.00 includes an amount of $480.00 dating back to 14th December, 1998. For reasons unknown, since my Uncle's death and your undertaking his financial affairs, payment of his Taxes has fallen alarmingly into arrears. For the first time since I commenced to act for my Uncle, my account has not been paid in good time. I would be disappointed if the payment of my account is being withheld as a lien over his files. ? We note that, to date, we have not received back from your Office the 1998 Tax Return sent to your Office for signature on 14th December, 1998. I believe that Mr Dimos was reluctant to sign the Return because he was required to make the declaration to the effect that all information in the Return was true and correct. In accepting the role of Executor for the Estate, one of the requirements is to provide instructions for the preparation of the Returns and to sign the Tax Returns. If Mr Dimos is unwilling to sign the Return, he should examine the responsibilities that come with the role. Lastly, the matter of our files. We have received confirmation from our advisers that our files belong to this practice as they contain working papers and no original documents, and we are not obliged to forward them on. However, in the interests of settling all matters relating to the Estate, we will `loan' the files to you on the following provisions:- 1. Receipt of the Ethical Letter from our successor; 2. Immediate payment of our fees; 3. Immediate receipt of the signed 1998 Tax Return and attached accounts; 4. Sign and return the attached document relating to the use and subsequent return of our files."

[99]

"I have your letter of 19 September 2000. I am deeply concerned by your letter. I make the following observations and comments: 1. Executors Commission Executors commission is not an issue in dispute in this case. It requires consideration by all of the beneficiaries. At present it seems inappropriate to consider the question of executors commission, and your client's claim for commission should not delay the settlement of the Plaintiff's claim. 2. Costs in the Terms of Settlement. I am reluctant to insert the costs agreed to by each party in the Terms of Settlement. They may be agreed promptly, or they may be taxed. These are what the Terms of Settlement presently provide. Insertion of amounts at the moment, which may not be agreed, will only delay settlement not advance it, contrary to your contention. 3. Obligation of the Trustee to protect the interest of the Beneficiaries I note that your client is concerned to carry out his obligation of protecting the interests of the beneficiaries who are not named in the proceeding. The only manner in which their interests are affected, is in relation to the legal costs of my client and Lee Skaftouros coming out of the estate. Bearing in mind that they are contributing the only amounts that are payable to the Plaintiffs in order to resolve this proceeding, and that no further payment is coming from the estate, and the likely costs to the estate if the matter is litigated further (leaving aside any payment which may be ordered in favour of the Plaintiffs or either of them out of the estate) it is inconceivable that any of the other beneficiaries would object to the Terms of Settlement. In summary then I cannot see any reason why it would not be in the interests of the estate for your client to sign the Terms of Settlement as drafted, and I therefore can see no reason why I should prepare this case for trial. Your client should therefore take notice that in the event that your client unreasonably delays or frustrates the settlement of this proceeding, which results in further legal expense to my client, my client reserves her rights to take separate proceedings against your client in his personal capacity for negligence in administration of the estate. I look forward to hearing from you promptly, that the Terms of Settlement will be executed without further delay."

[113]

"... My father passed away in October 1998 and his estate has not yet been settled. This was in part due to a legal challenge on the will by Paul & Anita Skaftouros. My concern is with the executor Leo Dimos who, as my dad's solicitor, drew the will and is the Executor and Trustee and also appointed his own company to deal with any legal problems. During this period he has (a) Refused to give his costing charges when asked. (b) Failed to give beneficiaries any information on the estate. (c) Refused to take phone calls from the beneficiary's. (d) Failed to expedite the settlement of the will. Family members had agreed in April 1999 (sic) to a settlement. Nothing was signed until October 1999 (sic). (e) Tried to include an `Executors commission' of 3% as part of terms of settlement. After charging a substantial amount in legal and management fees. (f) Sacked my dad's accountant and real estate agent without justification or explanations. It has since come to light that one of these flats has been vacant for over 12 months. I would call that mismanagement given the flats are in the highly sort (sic) Brunswick area. (g) Mr Dimos went back to Greece in October and his office wouldn't say when he would be back. (h) Refused to answer several letters from other solicitor's and beneficiaries. I believe that the will was drawn incompetently, and that the legal challenges were, I would have thought were less than unexpected. I list my concerns below. (a) The seemingly `conflict of interest' in being Executor/Solicitor who drew the will and appointing his own company for any legal work. (b) I worry that $20,000 is to be held in `Trust' by him for my two children until they are 21. Is there anything I can do without more expense to get it held in trust by someone else? (c) The fact he says he was a friend of my dad's since 1953, so he knew the family yet he drew the will without one mention of my sister Anita Skaftouros. Did he advise the legal ramifications? (d) The fact that I have had to mortgage my house to settle with Paul & Anita Skaftouros, wrongly assuming that terms of settlement meant that the will would be finalized on the day I settled the $120,000 and I am currently paying $800 in interest a month. My sister also faces monthly interest charges on a $40,000 loan for her part in the settlement. (e) The concern that the will finalization is being held up only for more unwanted legal and management fees. (f) Not one statement has been seen by any of the beneficiary's. I have enclosed the last letter I sent Mr Dimos, which as of this date has met with no reply. Again I notify you to ask, "Is this common practice?" and am I worrying needlessly? I await your swift response."

[131]

"I refer you to the Terms of Settlement of the Supreme Court proceeding number 7257 of 1999, which you signed on behalf of the estate. I refer you in particular to term 1B which requires payment out of the estate of my clients and Lee's costs of the proceeding. I note that on 1 December 2000 I forwarded by fax a copy of my account for your attention. That bill remains unpaid, despite the fact that none of the parties have indicated that they disagree with the account. I therefore require on behalf of my client that the account be paid by no later than 4.00 pm Thursday 15 February 2001. In the event that it is not so paid, my instructions are to apply to the Court for the proceeding to be reinstated, and for orders against Mr Dimos for payment of the account forthwith, and for an order that Mr Dimos personally pay the cost of the application. I note that in my letter of 1 December 2000 I requested that you immediately let me have copies of any bills of account that you have tendered to the estate. The only response that I had to that request was your letter of 22 December 2000 which enclosed a copy of a tax invoice dated 22 December 2000. I referred your tax invoice to my client for consideration, and my client requests that in accordance with the Terms of Settlement, you submit your files to the Law Institute of Victoria's costing service and be bound by their assessment of fees and disbursements. I understand that Lee's solicitor has already written to you and told you that Lee's instructions are that the costs of the executor should be taxed. I understand that no response has been received to that request. I have spoken to Mr Woodhams, Lee's solicitor today, and have been told by him that he would agree to the executor's solicitor's files being submitted to the Law Institute of Victoria's costing service, and that he would agree to be bound by that determination. Accordingly, I request that you take this action forthwith. I note that I have had no response to the third matter that I raised in my letter of 1 December last, which was that the real estate transferred to the beneficiaries in specie, as directed by the will, and that an interim distribution of cash in the estate take place. My instructions are that none of this has happened. This is unsatisfactory, and my client demands that this occur forthwith. In the event that the executor is not prepared to carry out his duties and comply with the Terms of Settlement and transfer the property to the beneficiaries, then my client will make application to the Court for removal of the executor without further notice to you. Please respond immediately."

[183]

"We refer to the hearing of this matter before the Listing Master yesterday. We confirm that your client was not prepared to agree to waiting until the afternoon to see if a judge was available to hear the matter today. We confirm that an undertaking was requested by counsel for the plaintiffs that the defendant take no further steps in the estate until determination of this application. Counsel for your client indicated that no such undertaking would be given. We note that over six months ago both Catherine Pearce's then solicitors and ourselves sought access to the books accounts [sic] of the estate and to date nothing has been provided. Your client commenced as executor of this estate prior to the 4th day of November 1998. Mr Dimos, as an officer of the Supreme Court, and as executor of the estate of Dimitrios Skaftouris [sic], has an obligation to keep proper accounts. As your client is aware, he has a duty at the very least to prepare accounts on an annual basis and provide copies to the beneficiaries. Our clients have not received any accounting whatsoever from Leo Dimos since he commenced as executor of this estate. The estate had assets totalling $1,000,000 when your client filed the affidavit in support of the application for probate. This included money held at the bank, rental and other properties. Given that our clients had to settle with their siblings there must be a substantial sum due to our clients. We also remind you that Ms Giavris undertook to deliver to this office the costs of Lee Skaftouros and also to pay the costs of Catherine Pearce and the Plaintiffs on acceptance of your client's costs. They were accepted on the 22nd August and payment still have not been received. Our clients still have not received the titles to their properties despite undertakings made in August that they would be delivered. Nor have transfers been delivered to other properties. Our clients wish to inspect the trust account records for the income and expenses of the estate during the 2 years and 11 months Mr. Dimos has been handling the estate. Our clients also wish to inspect the certificates of title held by your client and any mortgage deed, receipt and payment vouchers he has in his possession. Given your counsel's refusal to give any undertaking and the fact that our clients expectation that the application would be finalised by Friday have been thwarted our clients' now seek access to these documents by Monday the 10th September 2001. Our clients' entitlement to view such trust deeds is a right of a beneficiaries and is supported in the decision of Re Fairbairn [1967] VicRp 72; [1967] VR 633. We advise that we require, by midday on Monday 19th September 2001, a copy of any trust records your client has prepared for the estate, for which we undertake to pay the costs of copying if necessary, and an arrangement put in place for our clients to inspect the other documentation held by your client. If we do not receive the document and undertaking we have instructions to apply to the Supreme Court for such to be provided. On the question of costs we refer you to the decision of Re Skinner 1904 A.C. 289."

[191]

"We refer to your letters dated 6 September 2001 and 12 September 2001 and make the following comments. We note that you were not present in Court when this matter was called before the Listing Master, our Ms Giavris was. The Listing Master informed Counsel that there would be no Judge available to hear the matter and that the parties could return in the afternoon but there was no likelihood that the case would commence. Mr Southall QC advised the Court that he did not think it appropriate that Counsel should wait under the circumstances and requested a new date fixing the case as a part heard matter. You are correct that Counsel for the defendant refused to give an undertaking. Senior Counsel was of the opinion that there was no basis for such a request. Regarding the allegation made by you that Ms Giavris gave undertakings, we deny that any such undertakings were given. We note that there was no mention of these undertakings by you in previous correspondence or affidavit material. We confirm that your firm has now received payment of its costs in the `TFM' proceeding. We also confirm that you have received titles to the properties as 40 Whitby Street, Brunswick and 5 Alden Court, Cheltenham. Your allegation concerning this firm's behaviour regarding the above mentioned properties is surprising given that your firm has known that the said properties were transferred to your respective clients' in about February this year. We are at a loss to understand why your clients' did not at that time assume the responsibility of managing those properties and collecting the rents. We note that when this matter was raised with you in July 2001, you stated `we will collect everything at the end of the case'. (Emphasis added.) We consider that your client's have no entitlement to the receipt of any further property titles. We note that from the outset of the executors appointment your clients' behaviour in particular Lee Skaftouros, has hindered the executor from finalising the estate as expeditiously as would otherwise would be expected and preferred [sic]. In particular we note that Harry Skaftouros (the son of a beneficiary) has refused to deliver documents to the executor. Clearly that can only be as a result of instructions to him by your clients, in breach of their duty to assist the executor in the administration of the estate. Finally we object to your constant threats to report our conduct to the Law Institute. This firm has always acted in a professional and ethical manner and your allegations are not only denied but serve little purpose other than perhaps impressing your clients. If your attitude and threats to this firm and the executor continue we will re-consider our position regarding your conduct."

[225]

"We refer to your letter of 10 October 2001, (received 11 October 2001), which constitutes yet another step in the long series of self-serving correspondence which you appear to believe will advance your client's case in this proceeding, fixed for trial on 5 February 2001. In fact, your firm's tactics - which we must assume are conducted on specific instructions - only serve to prejudice the proper, objective and efficient administration of the deceased's estate. In addressing the specific matters raised in your letter, we summarise the position of the real estate assets comprised in the estate as follows: (a) The property situate at 5 Alden Court, Cheltenham, being the subject of a specific bequest in clause (4) of the Will, has been transferred in specie to the relevant beneficiaries identified in that clause; (b) The property situate at 40 Whitby Street, West Brunswick, being the subject of a specific bequest in clause 4(d) of the Will, has been transferred in specie to the relevant beneficiaries identified in that clause; (c) The remaining properties, namely the unit at Bedina Avenue, Queensland and the three units at 21 Mena Avenue, Cheltenham (held in a single title) constitute part of the residue of the deceased's estate; (d) As part of the resolution of the Part IV proceeding instituted, Interrogatory alia, by your clients amongst themselves, it was agreed that the Queensland property be transferred in specie; (e) Despite your letter of 21 February 2001, neither your firm nor your clients have yet provided the executed instrument of transfer for the Queensland property, to enable the executor to fulfil the agreement referred to in (d). Our client, the Executor, is and has at all times been ready willing and able to transfer that property in fulfilment of the agreement. The property at 21 Mena Avenue, Cheltenham is held and retained as part of the residue of the deceased's estate. In that regard we draw your attention to the absolute discretionary powers conferred on the executor pursuant to, inter alia, clauses 6 and 7 of the Will, including discretionary powers relating to: `any part of the real and personal estate' of the deceased. As you would be well aware, the executor was a long-standing friend and confidante of the deceased, as well as being his solicitor; in that context, prior to his death the deceased expressed to the executor his grave concerns as to the personal animosities between his children (including, of course, your clients) and the implications that this would have on the fair, orderly and efficient administration of the deceased's estate. It is for that reason he appointed Mr Dimos as the executor. Regrettably, the conduct of the deceased's children inter se subsequent to his death has more than justified those concerns. Accordingly, the executor reserves all his rights in respect of the exercise of his absolute discretionary powers to deal with the Mena Avenue property pursuant to the terms of the Will, including but not limited to the right to sell same in the interests of all beneficiaries, including the infant beneficiaries referred to in clause 6 of the Will and for the purposes therein set forth. We trust that this sufficiently answers the `queries of the beneficiaries' - presumably being your client beneficiaries - referred to in paragraph 1 of your letter under reply. As with our letter to you of 10 October 2001, please again note that this letter will be used on the question of solicitor/client costs, in the event of yet another frivolous application being made to the Court on behalf of your clients prior to the trial fixed for 5 February 2002."

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