Wood & Anor v McLean & Anor [2011] VSCA 37

2 The applicants, who are two of the children of Alfred Basil Jack deceased, commenced a proceeding against the executor of the estate of the deceased and against another child of the deceased, a daughter, seeking to set aside, on equitable grounds, a transfer inter vivos made by the deceased in favour of that daughter of his residential property. The applicants are not beneficiaries under the deceased's will and the estate of the deceased still contains assets, despite the above transfer, valued in excess of $400,000.

3 The applicants have a separate proceeding on foot under Part IV of the Administration and Probate Act 1958 (Vic) seeking provision out of the estate of the deceased.

4 In the proceeding seeking to attack the transfer, the applicants allege that they are entitled to the relief sought in circumstances where the executor has himself failed or refused to institute a proceeding attacking the transfer. The respondents applied to have this proceeding struck out on the basis that the applicants had no standing to bring it given that they are not beneficiaries of the estate and do not have even a contingent interest therein despite their proceeding under Part IV. An associate justice declined to strike out the applicants' proceeding but, on appeal, the judge made an order for a permanent stay thereof.

5 The parties have proceeded from the mutual assumption that the applicants would have had no standing to bring the proceeding but for the fact that the applicants had also commenced a proceeding under Part IV of the Administration and Probate Act. The respondents submitted and the judge held that the existence or nature of the Part IV proceeding did not assist the applicants' contention that they had standing to bring a proceeding attacking the transfer.

6 The applicants rightly point out that the question of whether they are entitled to any, and if so what, provision out of the estate of the deceased may well depend, at least in part, on the size of the estate. The applicants therefore submit, inter alia, that they have a real interest in seeking to increase the size of the estate and that they therefore have a sufficient interest and, thus, standing to bring the proceeding attacking the transfer. The respondents submitted that the applicants' statutory position under Part IV of the Administration and Probate Act was not a relevant present interest for the purposes of standing.

7 This appears to be a novel question and the parties have been unable to point to any direct authority one way or the other. A number of authorities recognise that, in special or exceptional circumstances, a beneficiary under a will may institute proceedings in his own name, joining the executor as a defendant, seeking some relief to protect the estate.[1] Of course, the applicants are not beneficiaries.

8 Nevertheless, the question might be thought to arise as to whether, in all the circumstances, the applicants have a sufficient financial or economic interest, if no other, as to support a conclusion that they have standing to bring the proceeding.[2] The possible relevance of what was said by Hargrave J in Russo v Russo[3] as to parties with a 'real financial interest' having standing to apply for removal of an executor may also require to be considered. A subsidiary question might be thought to arise as to whether it would have been appropriate, rather than to permanently stay the proceeding, to defer the question of standing to the trial. We think that these questions need to be fully ventilated and that the decision below is attended by sufficient doubt as to justify a grant of leave to appeal. We are also satisfied that the applicants would be prejudiced if the decision below were left undisturbed as they would be denied the opportunity to advance their claims in the stayed proceeding. Indeed the contrary was not argued.

9 Accordingly we consider that leave to appeal should be granted. In the circumstances, we would also grant leave to appeal in relation to the costs issue raised by the applicants.

[1] See for example Ramage v Waclaw (1988) 12 NSWLR 84 and, in relation to trusts, Lidden v Composite Buyers Ltd (1996) 67 FCR 560 and Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432.

[2] Compare what was said by Mason J, in the public law area, in Australian Conservation Foundation Inc v The Commonwealth of Australia (1980) 146 CLR 493, 547-8.

[3] [2009] VSC 491, [31].