Five separate proceedings have been commenced in this Court concerning the estate of the late Maria Constantinidis, who died in May 2015. Four of those proceedings are still pending. This judgment relates to motions brought in two of the pending proceedings.
The deceased was 61 years old when she died. She left four adult children: Eric Constantinidis; William (known as Bill) Constantinidis; Mary Stamoulos; and Annette Constantinidis. The deceased's husband, Achilles Constantinidis, survived her but they had been estranged for many years before her death. For convenience and without disrespect, I will refer to the members of the deceased's family by their given names.
The deceased died of cancer, which was diagnosed in late 2014. Her last will was made on 30 April 2015, only three days before she died on 3 May. By the will, she appointed Eric and Bill as her executors and trustees. She acknowledged a debt to Eric in the sum of $500,000 "in respect of monies lent to me by him at my request over the last 10 years." She also acknowledged a similar debt to Bill in the sum of $300,000 "in respect of monies lent to me by him over the last 5 years at my request."
She directed her executors to discharge these debts from the estate along with her other debts, funeral and testamentary expenses. She left a property in Greece to Annette and her interest in a personal protection portfolio insurance policy to Eric, acknowledging that he had made all of the payments on that policy. The residue of her estate was to pass to her children in four equal shares.
Probate of the will was granted to Eric and Bill by order of this Court in December 2015. The inventory of property disclosed assets with an estimated value of approximately $4.31 million. This included the property in Greece valued at approximately $180,000 and three properties in New South Wales. It also included a boat berth and a number of expensive motor cars, namely two Porsches and a Bentley.
However, in their affidavit as executors, filed for the purposes of one of the proceedings with which I am concerned, Eric and Bill estimated the deceased's liabilities as at the date of her death as approximately $4.15 million, thus leaving a net value of the estate of only $160,000. Those liabilities included the debts in favour of Bill and Eric acknowledged in the will totalling $800,000. Given the specific gift of the Greek property to Annette, on these figures there would be nothing in the residue to be shared by the deceased's children, and Mary would get nothing from the will.
During her lifetime, the deceased was the owner of a share in a company called Post Settlement Services Pty Ltd ("PSS"). This was the sole issued share in the company, and the deceased was also the sole director of the company. On 12 May 2015, nine days after the deceased's death, a notification was lodged with the Australian Securities and Investments Commission of the transfer of the deceased's share to Christiane Constantinidis, who is Bill's wife. The form bore the printed date of 10 April and the signature of the deceased, but the signature itself was undated, and it is common ground that it was not signed by the deceased until after 10 April. Subsequently, the single share in PSS has been transferred from Christiane to a company called Vasilaki Pty Limited ("Vasilaki"), which is a family company of Bill and Christiane.
According to Mary, she had always been close to the deceased until they had a falling out in February 2015, approximately three months before the deceased's death. Mary says that although she was aware her mother had cancer and was gravely ill, she was not aware of the extremity of her mother's condition and did not learn of her mother's death until after it had happened.
Starting in November 2015, solicitors acting for Mary wrote to Eric and Bill, raising questions as to dealings between them and the deceased prior to her death and about their administration of the deceased's estate. Eric and Bill retained a firm of solicitors, and lengthy correspondence ensued. It appears Achilles also had questions about the circumstances in which the will had been executed.
Among the questions raised were the genuineness of the loans acknowledged by the deceased from Eric and Bill, and also the circumstances surrounding the PSS transaction. It appears the deceased had derived significant income before her death from PSS, and that income had been relied upon in support of a loan application which had been made by the deceased before her death.
These questions form the background to the five proceedings to which I have referred being commenced in the Court. I will refer to the proceedings numerically, in the order in which they were commenced.
The first was commenced on 29 April 2016 by Mary as plaintiff against Bill and Eric, in their capacity as the executors, as defendants. The relief sought was a family provision order in favour of Mary out of the deceased's estate. This proceeding was not pursued to hearing, and it was dismissed by consent on 7 July 2016.
The second proceeding was commenced on 2 May 2016 by Annette as plaintiff against Bill and Eric, in their capacity as the executors, as defendants. The relief sought was also a family provision order out of the estate, this time in favour of Annette. Although Mary's family provision proceeding, to which this proceeding was apparently a response, has now been dismissed, Annette's family provision proceeding has been maintained as a defensive one, in the light of the family provision aspect of Achilles' claim, to which I refer below. No steps appear to have been taken to prepare the case for hearing.
The third proceeding was commenced also on 2 May 2016 by Achilles as plaintiff against Bill and Eric, in their capacity as the executors, as defendants. In the proceeding, it was alleged on behalf of Achilles that he and the deceased made mutual wills in favour of each other in 1996 and subsequently agreed, on separation, that they would not revoke their wills. The deceased's will of 30 April 2015 was said to be in breach of this agreement. It was also alleged that, as at the time the April 2015 will was executed, the deceased lacked testamentary capacity. In the alternative, a claim was made for a family provision order in favour of Achilles out of the deceased's estate.
It appears nothing has been done to prepare this proceeding for hearing. I was informed today that Achilles abandons the mutual will contention, and also the challenge to the deceased's testamentary capacity in connection with the April 2015 will. In the course of today's hearing, I made consent orders for the amendment of Achilles' Statement of Claim so as to abandon those claims.
The fourth proceeding was commenced on 13 May 2016 by Mary as plaintiff against Bill and Eric as defendants. In those proceedings, Mary sought preliminary discovery against Bill and Eric of documents relating to their dealings with the deceased before her death and their administration of the estate. The application was made under Uniform Civil Procedure Rules 2005 (NSW), r 5.3 ("UCPR").
Mary has subsequently decided not to pursue this application for preliminary discovery. By notice of motion dated 23 August 2017, Mary seeks leave to discontinue the proceeding on the basis that there be no order as to costs. The discontinuance of the proceeding is not opposed by Bill and Eric, but they submit that the Court should not grant leave except on the usual basis that Mary, as discontinuing plaintiff, should pay their costs. This is the first motion with which I am concerned.
The fifth proceeding was commenced on 26 May 2016 by Bill and Eric as plaintiffs against Achilles as first defendant, Mary as second defendant and Annette as third defendant. The relief sought includes declarations that the "net value for probate purposes of the Estate" was $2,868.41 as at the date of the deceased's death, and is at the date of the declaration (presumably on the assumption the declaration relates back to the commencement of the proceedings) -$259,577.14. The Summons also seeks, apparently by way of alternative, declarations that "the nature and value of the assets and liabilities of the deceased" as at the date of her death, and of the estate as at the date of the declaration, "are as certified" by a referee to be appointed pursuant to r 20.14 of the UCPR.
The evident purpose of the proceeding was to obtain orders binding on all interested parties as to the value of the estate, presumably so the estate could be administered accordingly. In particular, Bill and Eric sought to establish in a binding way that the net value of the estate was negative, so that Mary, whose only interest under the will was a one-quarter residuary interest, had no entitlement.
In October 2016, a cross-claim was filed on behalf of Mary as cross-claimant, naming Eric as first cross-defendant, Bill as second cross-defendant, Christiane as third cross-defendant and Vasilaki as fourth cross-defendant. The relief sought is very elaborate. It includes orders removing Bill and Eric as executors, and replacing them with an independent person to act as administrator, or accordingly, as receiver. It also includes declarations that certain transactions entered into by Bill and Eric as executors represented a breach of their fiduciary duties, orders that those transactions be set aside and consequential relief by way of account, and the sale by the administrator of the assets in question.
The cross-claim also seeks a declaration "as to whether [Vasilaki] holds on trust for the administrator of the estate of the deceased" the PSS share formerly owned by the deceased. Orders are sought that the transfer of the PSS share to Christiane and the further transfer to Vasilaki be set aside. Orders are also sought by way of account with respect to the loans made to the deceased by Bill and Eric, and also in relation to certain items of personal property which it appears Mary contends the deceased owned prior to her death and should have been included in the estate. These include jewellery, crockery sets, handbags etc.
Steps have been taken to prepare this proceeding for hearing. Extensive affidavits have been served. By notice of motion dated 9 August 2017, Mary seeks orders for disclosure against Bill and Eric of numerous categories of documents relating to transactions which are the subject of the cross-claim. Eric and Bill resist these orders.
The notice of motion of 9 August (in the fifth proceeding) came before me, along with the notice of motion of 23 August (in the fourth proceeding), for hearing on 8 November. At that hearing, it was contended by counsel for Bill and Eric that the evidence clearly demonstrated that the transfer of the PSS share had happened before the deceased's death. Reference was made to an affidavit filed on behalf of Bill and Eric from an accountant, who described being given the transfer and asked to register it before the deceased's death. The reason he did not do so is that he received the transfer on his way to the airport and did not return from his journey until after the deceased's death, when the transfer was promptly registered. There is no reason to doubt the accuracy of what he says in that regard.
In its current form, Mary's cross-claim proceeds on the basis, or at least on an alternative basis, that the share in PSS formed part of the estate. On the basis of the evidence to which I have referred, that claim is not sustainable. Counsel for Mary in effect accepted that, insofar as the cross-claim asserted that the PSS share was an asset of the estate, it could not be sustained, but indicated that she might wish to amend the cross-claim.
Eventually, a further notice of motion was filed for Mary on 1 December, seeking leave to amend the Statement of Cross-Claim in this regard. That amended claim would, if permitted, involve allegations that the transfer was procured from the deceased shortly before her death in circumstances which make it open to be set aside in equity. It is alleged, among other things, that having regard to the deceased's state of health, she was in a position where her will was overborne or some form of undue influence may have been brought to bear so as to secure the transfer. The motion to amend was also opposed by the cross-defendants, and is the third motion with which I am concerned.
As has been seen, both Bill and Eric as plaintiffs in the fifth proceeding, and Mary as cross-claimant in that proceeding, seek, among other things, orders which would involve an independent third party in the process of determining the value of the estate: as a referee in the case of Bill and Eric's claim, or as an administrator or receiver in the case of Mary's claim. Given the overlap for practical purposes between the relief sought by the parties, I suggested they might be able to reach agreement, or at least narrow the areas of dispute, on the appointment of such a third party and that this might obviate the need to determine the motions, or at least some of them.
In response, counsel for both parties indicated that they would seek at this stage to have orders made for the involvement of such a third party although they differed on various details. It is convenient to deal with this issue first before returning to the questions raised by the motion.
[2]
Administrator or referee?
It is, in my view, clear that an independent investigation must be undertaken into the affairs of the estate, at least to the extent of determining whether there are claims which should be pursued between the estate on the one hand and Bill and Eric and entities associated with them on the other. As I see it, so much is in effect accepted by Bill and Eric in their application for the appointment of a referee to determine the value of the assets of the estate. Counsel for Mary submitted that the appointment of an administrator was the proper way to achieve this objective. Counsel for Bill and Eric resisted that course. Counsel submitted that there was no demonstrated need for an administrator and the estate had just about been fully administered in any event. Counsel pointed to the likely cost of having an administrator, in view of the extent to which the issues had already been debated between the parties (and before that had presumably been considered by Bill and Eric). Counsel submitted that the appointment of a referee was preferable as it was likely to be cheaper and quicker, and Bill and Eric could then be left in place as executors to administer the estate in accordance with the findings of the referee (to the extent adopted by the Court). Counsel submitted that the ideal person to carry out this exercise would be an accountant.
In my opinion, however, determining the value of the estate in a final way is not a matter of mere calculation. It involves the identification of potential claims and then, to the extent that pursuit of such claims is justified in the interests of the estate, their pursuit either of settlement or to judgment. The pursuit of such claims will involve legal analysis but also commercial judgments of a cost/benefit nature.
A referee appointed by the Court operates under terms of reference specified by the Court which must be defined in terms of issues in the proceedings in which the reference is made. Ultimately, the referee can only report to the Court. In my view, the reference procedure is inherently unsuitable to the identification and pursuit of potential claims such as those which must be considered in this case. Even if the referee could identify potential claims and report on their existence or otherwise and perhaps on their strength, he could not himself pursue them. The Court would have to decide on whether any claim should be pursued and how it should proceed, presumably either by way of a continuation of the inter partes litigation in the fifth proceedings or by the bringing of some separate action. Once the claims are fully resolved and any monies recovered, the executors would then have to return to administering such monies in accordance with the provisions of the will.
By contrast, an administrator would be able to obtain his own legal advice (if he needed it) and, if necessary, himself pursue claims either to the point of compromise or resolution. He could then proceed to administer any proceeds accordingly. Of course, in doing so, the administrator may need to seek directions or advice from the Court. But there is at least a hope that the administrator can make his own decisions and exercise his own judgment in such a way that the need for the Court to advise him is relatively confined.
I see this as particularly beneficial in the present case because, for reasons which I will touch on to some extent at a later point, I am not convinced that there are necessarily strong grounds for bringing claims on behalf of the estate against Bill and Eric, at least with respect to all of the issues which have been identified by Mary.
I accept that administration will be costly but so would a reference procedure followed by continued proceedings of some sort after the adoption of a report (if that was the recommendation). It will be open to the parties ultimately to apply for orders which impose the costs of administration by the independent third party on the unsuccessful party to any subsequent dispute. In particular, if the position taken by Bill and Eric so far is vindicated it may be expected that the Court would order Mary to indemnify the estate against all of the costs associated with the independent administration. No one suggests that Mary lacks the capacity to meet these costs. If she is prepared to take the risk that the independent administration will come up with nothing of value and that she must then pay the cost of it, then it seems to me that the costs becomes a less important consideration. For these reasons, I consider that the appropriate course is to appoint an administrator.
In taking this step, I am not making any finding that Bill and Eric necessarily have not administered the estate properly or that the possible claims foreshadowed against them are necessarily justified. It is simply that Bill and Eric, having an interest in the matters which are to be investigated, cannot possibly be expected to do the investigation themselves; and, as I have indicated, their own application for the appointment of a referee in effect acknowledges that. I should make it clear also that to the extent that Bill and Eric have, up to the appointment of an administrator, incurred costs of an administrative and uncontentious nature, they will be entitled to payment for the costs out of the estate. This would include, it seems to me, the costs of the first, second and third proceedings to the extent not recovered from any other party.
It is agreed between Bill and Eric on the one hand and Mary on the other that the initial incidence of the administrator's costs should be 50/50 between them. Counsel for Mary pointed to a sum of approximately $90,000 still held in the estate and suggested that the administrator should in the first instance have recourse to those monies. But I am not inclined to proceed on that basis. I think the monies in question should be held in the estate so that there is something available to pay the uncontentious costs of Bill and Eric to this point.
There is some disagreement between the parties as to the identity of the person to be appointed. Counsel for Mary suggests that it should be a solicitor. In particular, counsel proposed a solicitor with experience of dealing with mental health questions in a legal context. On the other hand, counsel for Bill and Eric suggested that an accountant was the appropriate person. I think there is little to separate these two positions. On the one hand, appointing a solicitor may result in some saving in that the solicitor may not need to obtain external legal advice. On the other hand, though, there are many accountants used to administering companies and estates who not only have practical experience with the sorts of legal questions that can arise but are also very experienced in retaining and deploying external legal advice. Practical experience with mental health issues in a legal context may be of some marginal benefit but the questions which arise, it seems to me, in relation to the potential PSS claim are equally capable of being investigated by someone who does not have that particular type of experience.
Counsel for Bill and Eric suggested David Nicholas Iannuzzi as an appropriate person to appoint. Mr Iannuzzi has experience as a Court appointed receiver and manager and also as a Court appointed trustee under the Conveyancing Act 1919 (NSW), s 66G. He also acts as an official liquidator of corporations. Counsel for Mary indicated that should an accountant be chosen, his client's preference was for Mariano Rossetto or Chris Katehos. Both of those gentlemen have experience principally in the area of forensic accounting; that is, the presentation of expert assessments and calculations to the Court for the purpose of litigation.
In my view, having regard to the nature of the task, the most suitable candidate is Mr Iannuzzi. I say this because, in essence, I see the task as being one to administer an estate and the sort of expertise which Mr Iannuzzi has derived as an official liquidator (as well as, of course, having acted as receiver and manager) is the sort of expertise which is directly relevant. None of this should be seen as a criticism of the other persons who were proposed.
[3]
Further steps in the proceedings
As I understood counsel for Mary, he sought to have the Court make orders in the fifth proceeding for disclosure and for amendment of the Statement of Cross-Claim as sought in the two motions irrespective of whether an administrator was appointed. He also sought an order which would require Bill and Eric to provide a detailed account of each of the amounts allegedly lent to the deceased which make up the loans which are the subject of the acknowledgment of the will.
I think this involves a misconception of what the Court intends to achieve by appointing an administrator. Once that happens, it will be for the administrator to identify potential claims. No doubt the administrator will consider representations from the parties as to what he should do, but ultimately he will act independently and it will be his decision what to do. It may be that, for the purpose of considering whether to bring claims or for the purpose of prosecuting such claims if they are brought, the administrator would seek particulars, or further documents, from Bill and Eric in support of their position. But I do not think that there is anything to be gained at this point in seeking to anticipate what the administrator will wish to do in that regard. I bear in mind in particular that the administrator, and his external lawyers if he involves them, will have the benefit of the work already done in the form of the pleadings, particulars and evidence in the fifth proceeding. I think the best course is to allow the administrator to make his own decisions about what further material, if any, he requires. It should not be assumed at this point that the administrator will necessarily even pursue the claims that have so far been advanced by Mary or that, if he does so, he will pursue them in the same way as she has.
It seems to me that, in reality, the declarations sought by Bill and Eric in their claim and the elaborate relief in the nature of the accounts, declarations and the like sought by Mary in the cross-claim are in each case an alternative to the relief sought by way of a referee or administrator. There is now no need for that alternative relief to be pursued any further by the parties, at least at this stage. It is conceivable that issue could somehow later be re-joined between the parties. But it may well be that the only issue remaining in the fifth proceeding will be the incidence of the administrator's costs and who is to bear the costs that have been incurred to date.
In the course of debate before me, it was suggested that mediation might be appropriate and that the appointment of an administrator receiver should be stayed to allow that to happen. Until today, the claims made by Achilles concerning the mutual wills and lack of testamentary capacity were a potential obstacle to the administration. Had those claims been pursued, it might have been necessary to ensure that they were determined before the administrator spent a great deal of time and effort on administering the estate in accordance with a will which was challenged. Now that those claims have been withdrawn, there will be no reason not to proceed immediately with the appointment of the administrator apart from the question of mediation.
The parties disagree about whether the mediator should be a Court-annexed one or a private mediator. As I understood it, counsel for Mary also suggested that the documents sought by way of disclosure should be produced so that they would be available to be considered before the mediation. I am also somewhat unclear as to whether Annette would attend the mediation and what the arrangements proposed are for it to happen. Given the time of year, I think the best course is to make orders appointing an administrator and to stay those orders until early in the new Term, in the hope that by then the parties can agree on a regime for mediation.
I make it clear that I do not propose to order production of documents so as to assist the mediation process. While the Court favours mediation between the parties, I do not think that the ordinary order in which steps take place should be distorted because one party would like to have something for the purposes of mediation. Mary's choice is to participate in the mediation at this stage in the hope of saving costs which will no doubt follow as soon as an administrator starts work, or not to participate and to engage in mediation at a later stage. I propose to leave this question to the parties and take it up to the extent necessary early in the new Term.
[4]
Disposition of motions
The theme running through Mary's position in both the fourth and fifth proceedings in general, and the motions in particular, is one of her supposed entitlement as a beneficiary of the estate to litigate, in her own name, claims against Bill and Eric. But Mary's legal rights are more qualified than this.
In Alexander v Perpetual Trustees WA Ltd (2004) 216 CLR 109 at 129 [55], the High Court approved the following statement of principle in relation to trust litigation:
The interests of the beneficiaries of a trust are protected against a third person acting adversely to the trustee through proceedings brought against him by the trustee and not by the beneficiary. As long as the trustee is ready and willing to take the proper proceedings against the third person, the beneficiaries cannot maintain a suit against him.
There is an exception to this rule but only where there are "special circumstances". As well as applying to trusts, the rule applies in the context of a deceased estate.
Part of the rationale for this rule is to protect the interests of the third person because the rule prevents that person from being oppressed by a multiplicity of suits on the part of the beneficiaries. But another rationale for the rule is to require decisions about the pursuit of litigation which will benefit the estate as a whole to be made by the trustee as the party having responsibility for the estate. If a beneficiary of an estate, who was convinced that there was a claim that ought to be pursued in the interests of the estate and who had sufficient funds to do so, was able to pursue the claim on the estate's behalf as of right, the estate could be embroiled, against the will of the executor, in costly and time-consuming proceedings not under the executor's control. Such a course is unlikely to serve the best interests of the estate as a whole.
This does not mean, where "special circumstances" cannot be demonstrated, a person interested in the estate can do nothing about potential claims involving the personal interests of the executor or of third parties.
Under UCPR Pt 54, the Court has power to grant relief of the type which could formerly have been granted in what were known as administration proceedings. The Court has wide powers to direct acts to be done in the administration of the estate and to determine questions arising in the administration of the estate, including questions as to the rights or interests of a person who claims to be a creditor of the estate: r 54.3(2)(c).
These powers are amply wide enough to ensure that the interests of the estate can be protected. But, of course, the making of such orders is not a matter of right on the part of the beneficiary who applies for them. Ultimately, it is a matter for the Court to consider whether the orders should be made and, in doing so, the Court will take into account such questions as to the strength of potential claims or arguments available to the estate as against creditors or other third parties, and other practical questions such as the degree of likely recovery.
UCPR Pt 54 also contains specific rules directed towards the provision of accounts by executors or others: r 54.3(3)(a). But, again, these are not matters of right and it is always a matter for the Court as to whether it should require an account and, if so, the scope of the account, the detail involved and the extent to which supporting documents or other material needs to be produced.
In the present case, some of the issues or potential issues raised by Mary may involve how assets were disposed of after they had got into Bill and Eric's hands as executors but the most contentious ones do not. For instance, whether the estate is truly indebted in accordance with the acknowledgements in the deceased's will depends upon the transactions between the deceased on one hand and Bill and Eric on the other during the deceased's lifetime. Although Bill and Eric are executors, for the purposes of resolution of that potential issue, that fact is immaterial. Similarly, it is now clear that (and it is clear from the proposed reformulation of Mary's cross-claim) that any claim concerning the PSS transaction is a claim concerning the potential to set aside a transaction entered into by the deceased during her lifetime. Mary has no right to litigate directly as between herself on the one hand, and Bill and Eric on the other, the resolution of these issues.
Turning to the three motions before me, counsel for Mary argued in relation to the fourth proceeding (the preliminary discovery application) that the requests for documents had been justified and reasonable as part of an investigation as to whether there were claims against Bill and Eric. Counsel submitted that this had, in effect, been accepted by Bill and Eric in commencing the fifth proceeding after the fourth proceeding had been instituted.
I cannot agree with this analysis. Preliminary discovery proceedings under UCPR r 5.3 are made in aid of a person who "may be entitled to make a claim for relief" against the prospective defendant where the prospective claimant has been unable, despite having made reasonable inquiries, to obtain sufficient information to decide whether or not he or she is in fact so entitled: see O'Connor v O'Connor [2017] NSWSC 1648 at [33]-[41]. The documents sought by Mary in her preliminary discovery application related to the substance of potential claims against Bill and Eric either in their capacity as executors administering the estate or as parties who had previously dealt with the deceased in such a way as to create claims against them on behalf of the estate. These were not Mary's claims but, rather, they were claims to be made on behalf of the estate as a whole. It seems to me that in such circumstances UCPR r 5.3 may not really apply.
If attention is confined to claims for relief that Mary herself could have sought from the Court in her own name, then that would have included orders under UCPR Pt 54. But deciding whether Mary was "entitled to make" such a claim for relief did not require the production of all of the documents underlying the claims foreshadowed against Bill and Eric. As applicant Mary would be concerned only to show the Court that there was sufficient reason for the Court to make the Pt 54 orders sought. That could be done by demonstrating to the Court's satisfaction that there were potential claims against Bill and Eric that were available or were at least worth investigating.
I was referred to the decision of Mukhtar AsJ in Supreme Court of Victoria in Guest v Guest [2015] VSC 761 where his Honour discussed the overlap between a beneficiary's application for preliminary discovery and the invocation of the beneficiary's rights under general law for access to documents concerning a trust estate. If the preliminary discovery application had continued to hearing, then it would have been necessary to consider whether, having regard to rights Mary already had under the general law, it would have been appropriate in the exercise of discretion to make orders for preliminary discovery. But it is not necessary for present purposes to consider how that question might have been resolved nor, in particular, the controversial question as to the scope and nature of the beneficiary's entitlement to trust documents. It is enough to say that, having regard to the limitations on preliminary discovery under UCPR r 5.3, it was not an appropriate way for Mary to proceed in this case.
I therefore do not see the decision to discontinue the preliminary discovery proceedings as something resulting from a change of circumstances occurring after the proceedings were commenced which makes them otiose. Rather, I see the discontinuance as an inevitable recognition of the unsuitability of the procedure in the first place. It follows that I will grant leave to discontinue but Mary will be required to pay the costs of the proceedings as a discontinuing plaintiff in the ordinary way.
At first sight, the claim in Mary's cross-claim in the fifth proceeding gives rise to similar considerations. It would have been open to Bill and Eric, when the claims were articulated in correspondence, to take the position that they should be resolved in the ordinary way by the seeking of appropriate relief under UCPR Pt 54 or perhaps by way of derivative proceedings, and to maintain in each case that it was up to Mary to demonstrate to the Court's satisfaction that the issues were sufficiently substantial that they should be raised and determined. But Bill and Eric did not do this. Instead, they instituted the fifth proceedings themselves seeking declarations and naming the other parties interested in the estate as defendants, as if the question of the estate's interests, assets and entitlements was something that could be litigated in the ordinary way between them on the one hand and the other beneficiaries on the other.
As I have indicated, it is not appropriate now that an order has been made for the appointment of an administrator for disclosure orders to be made and the motion of 9 August will be dismissed. But, having regard to the conduct of both sides in the fifth proceeding, I think that the appropriate order is that costs of the motion should be costs in the cause, to the intent that they will fall to be determined after the administrator's work is complete, as part of the ultimate debate about the incidence of the administrator's costs and the costs of the fifth proceeding to this point.
So far as the amendment application in the motion of 1 December is concerned, counsel for Mary argued that the need for the amendment only arose when the evidence from the accountant to which I have referred became available concerning the PSS transaction. Again, given that an administrator has been appointed, there is no point in permitting the amendment and the motion should be dismissed. But I do not accept that the costs should be left to lie where they fall.
In response to the submission by counsel for Mary, counsel for Bill and Eric pointed out that the affidavit from the accountant in question had been available for approximately three months before the application came forward. It is clear that the application only did come forward because of issues that were raised by counsel for Bill and Eric and by the Court concerning the maintainability of the claim in its current form. Furthermore, the claim is a highly speculative one. The mere fact that a mother on her deathbed transfers an asset to her daughter-in-law apparently for the benefit of her son and daughter-in-law and their family does not of itself give rise to any suspicion which would impugn the transaction. Nor does it assist to add that the asset might be a valuable one. The submissions in support of the proposed amendment did not point to any cogent evidence to suggest that the deceased's will was overborne in connection with the PSS transaction. This is not to say that the administrator should not at least give some consideration to whether it is in the interest of the estate to seek to have the transaction set aside, but I am not satisfied on the material currently before the Court that there would have been sufficient justification to permit an amendment at this belated stage if an administrator had been appointed and the proceeding had continued inter partes. Accordingly, Mary will have to pay the costs of the amendment application.
The orders in the fourth proceeding (2016/147733) are:
I order that the proceedings be dismissed.
I order that the plaintiff pay the defendant's costs of the proceedings.
The orders in the fifth proceeding (2016/162195) are:
Order that probate of the will of the late Maria Constantinidis to the plaintiffs be revoked.
Order that David Nicholas Iannuzzi of Veritas Advisory be granted Letters of Administration with the will annexed.
Direct that the papers be referred to the Registry for the completion of the grant.
Order that the commencement orders 1, 2 and 3 be suspended until further order of the Court.
List the proceedings for further directions before me at 9.30am on 7 February 2018.
Grant liberty to restore the matter to the list on 3 days' notice to my Associate.
Order that the cross-claimant's notice of motion dated 9 August 2017 be dismissed.
Order that the costs of the motion be costs in the cause.
Order that the cross-claimant's notice of motion dated 1 December 2017 be dismissed.
Order that the cross-claimant pay the cross-defendant's costs of that motion.
[5]
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Decision last updated: 22 December 2017