The Estate of Arthur Michael Falco; Falco v Lambert (No 4)

Summary

1. [1]

   The Court delivered its judgment in relation to two notices of motion on 14 September 2015:, Falco & Ors v Lambert & Ors (No 3) [2014] NSWSC 1343 (the “Judgment’). Defined terms in the Judgment have the same meaning in these reasons.

2. [2]

   The parties were given an opportunity to consider the Judgment. A further hearing was held on 17 September 2015 about orders required to give effect to the Judgment, including as to costs. On that occasion, in addition to those who had appeared in relation to the argument which gave rise to the Judgment, the Court was assisted by the appearance of Ms E.A. Cohen of Counsel, representing the interests of Mr Michael Falco. While not a party to these proceedings, Mr Michael Falco has a real interest as one of the four adult beneficiaries under the Will.

3. [3]

   It is unnecessary to set out all the argument and particular reasons which give rise to the final orders that appear below. However, for the sake of good order it is desirable that the Court should record four matters.

4. [4]

   First, a reader of the Judgment would note (Judgment paragraph [6]) that the Court had expressed its conclusion as being to vary the amount which the Senior Deputy Registrar ordered Mr Lambert to refund to the Estate by increasing that amount to $29,371 plus GST. The final order which the Court will make requires a refund of $7,468.01 (inclusive of GST). The reason for this is that not all of Mr White’s accounts that were moderated by the Senior Deputy Registrar had in fact been paid by the Estate. The parties (correctly) accepted that the amount of any refund should be confined to those amounts which had in fact been paid out of the Estate to Mr White but had subsequently been disallowed on moderation.

5. [5]

   The legal representatives for the Plaintiffs and Mr Lambert agreed the actual amount which had been paid and now was to be refunded was $7,468.01 (inclusive of GST). The Court notes that Mr White’s counsel indicated that his client did not wish to be heard as to that calculation. The Court’s final orders reflect the figure agreed between the Plaintiffs and Mr Lambert.

6. [6]

   Second, the refund order contemplates the possibility of the obligation to refund being satisfied by some means other than an actual payment from Mr Lambert to the Estate. This possibility arises because the Court was informed from the Bar table by Mr Lambert’s counsel that various credits and set offs which it was hoped the parties would agree were correct could have the result that no actual payment would have to be made. The final orders have been fashioned to cater for that possibility. However, the Court emphasises that such a resolution will only be possible with the agreement of all interested parties. If that agreement cannot be reached within the 28 days limited by the order which the Court will make, then Mr Lambert will have to comply with the order by making an actual payment to the Estate.

7. [7]

   Third, the parties have (if I may say so, with respect) sensibly agreed that the proceedings should be the subject of a mediation. The final orders reflect the consensus of the parties that the mediation should occur as soon as possible after the Plaintiffs file a further amended statement of claim against Mr White (either by consent or with leave). That will occur if the Plaintiffs decide that they wish to continue to prosecute a claim against him. The parties’ consensus extended to a recognition that, while not a party to the proceedings, Mr Michael Falco would be a necessary party at any mediation. Furthermore, the parties accepted that in addition to the various matters raised in the proceedings, an additional matter for mediation could be Mr Lambert’s personal liability to Mr White in respect of those fees in relation to the Estate which Mr Lambert incurred but that were disallowed on moderation.

8. [8]

   Fourth, and related to the immediately preceding point, the Court acceded to the submission put on behalf of Mr White that any further amended pleading should give proper particulars – to the extent the Plaintiffs are able to provide them – of any amount which the Plaintiffs allege they are entitled to recover from Mr White. That is an important piece of information for the purposes of any mediation.

9. [9]

   In addition, the Plaintiffs’ quantification of (or inability to quantify) any claim against Mr White may also be significant in determining whether or not leave should be granted for the filing of a further amended statement of claim in the absence of consent. While readily acknowledging that it is a matter for the Plaintiffs and not expressing any final view, on the material which the Court has seen it is difficult to see what will be left in any Barnes v Addy claim (Barnes v Addy (1874) LR 9 Ch App 244) which the Plaintiffs might wish to bring. That is because the Estate will have been made whole by the refund which Mr Lambert will be ordered to make. Insofar as disallowed amounts had never in fact been paid to Mr White, then he received nothing which could be the subject of such a claim.

10. [10]

    In making these observations the Court has not overlooked that the Plaintiffs may wish to replead their more general breach of duty claim (Judgment paragraphs [191]-[192]). Irrespective of how the Plaintiffs may wish to frame their case against Mr White, the Court is satisfied for these reasons that they should, to the extent they are able, give particulars of the amount of damages they claim.

11. [11]

    The Court’s orders to give effect to the Judgment are: