Visevic v Kashian

1. [1]

   The plaintiff, Ms Vera Visevic, a solicitor and partner of Mills Oakley Lawyers, is named as executor in a will of Mr Alexander McDougall made on 10 March 2014. By the will, Mr McDougall left his estate (valued at some $5 million) to five charities. Mr McDougall died on 31 January 2016.

2. [2]

   In the circumstances that I describe below, on 22 September 2016, Ms Visevic commenced these proceedings seeking a grant of probate in respect of the 2014 will against the defendants, Mr Kegan and Mrs Vicki Kashian.

3. [3]

   Ms Visevic was obliged to take this step because Mr and Mrs Kashian, on 9 March 2016 and again on 6 September 2016, lodged a caveat requiring that no grant of probate should be made “unless we are given the opportunity to be heard on the question of whether a declaration as to the Court’s satisfaction under s 8 of the Succession Act 2006 (NSW) [(“the Act”)] should be made in respect of a document made by the deceased” (being a draft will that Ms Visevic arranged to have prepared on 22 January 2016, in the circumstances to which I refer below).

4. [4]

   On 19 December 2016, Mr and Mrs Kashian, through their solicitor, offered (on a “without prejudice except as to costs” basis) to “withdraw from the proceedings and lift the caveat on the basis that each party bears their own costs of the proceedings to date”.

5. [5]

   On 23 December 2016, Ms Visevic was appointed executor of Mr McDougall’s estate pendent lite.

6. [6]

   Now, by notice of motion filed on 13 April 2017, Ms Visevic seeks advice, pursuant to s 63 of the Trustee Act 1925 (NSW) that she would be justified in accepting the offer referred to in [4].

Decision

1. [7]

   I am prepared to give Ms Visevic the advice she seeks.

Mr and Mrs Kashian

1. [8]

   Mr and Mrs Kashian were friends, evidently close friends, of Mr McDougall.

2. [9]

   Ms Visevic met Mr Kashian in 2008 at a social event. Mr Kashian was then the chief financial officer of the Uniting Church in NSW. Through Mr Kashian, Ms Visevic later did some legal work for the Uniting Church in the period 2008 to 2010.

3. [10]

   Ms Visevic met Mrs Kashian through Mr Kashian. Their contact was entirely social.

4. [11]

   Since 2010, Ms Visevic has seen Mr and Mrs Kashian socially, but infrequently.

5. [12]

   Ms Visevic acted for Mr Kashian on a conveyancing matter. Her firm, Mills Oakley Lawyers, acted for him in an employment dispute.

6. [13]

   Mr and Mrs Kashian introduced Ms Visevic to Mr McDougall. Mr McDougall retained Ms Visevic to prepare his March 2014 will. As I have mentioned, he named her as his executor.

January 2016

1. [14]

   On 22 January 2016, Mr Kashian telephoned Ms Visevic and said that Mr McDougall had been admitted to hospital. He said:

2. [15]

   The house to which Mr and Mrs Kashian referred was a property in Russell Lea, then worth something in the order of $2 million.

3. [16]

   Ms Visevic arranged for her partner at Mills Oakley, Ms Lisa-Marie McKechnie, to “amend the will”.

4. [17]

   Ms Visevic then travelled to the hospital. When she arrived, Mrs Kashian said:

5. [18]

   Ms Visevic took instructions from Mr McDougall. Mr McDougall confirmed he did wish to change his will and said that:

6. [19]

   Ms Visevic and Mr McDougall had this exchange:

7. [20]

   In an affidavit sworn on 19 September 2016, Ms Visevic said:

8. [21]

   However, shortly thereafter, Ms Visevic spoke to the geriatric specialist who was attending on Mr McDougall, Dr Emily Deck. Dr Deck expressed, in strong terms, her opinion that Mr McDougall did not have testamentary capacity.

9. [22]

   Dr Deck said:

10. [23]

    Ms Visevic told both Mrs Kashian that Mr McDougall “can’t change his will today” because “he has no testamentary capacity”. Mrs Kashian asked Ms Visevic to call Mr Kashian. She did so, and said that Mr McDougall’s “doctors say he has no testamentary capacity. That means he can’t change his will”.

11. [24]

    Understandably, Ms Visevic concluded that she should take no further steps to have Mr McDougall change his will.

12. [25]

    In any event, Ms Visevic noticed some errors and omissions from the draft. She did not show it to Mr McDougall.

13. [26]

    Ms Visevic again visited Mr McDougall in hospital on 24 January 2016. She was not able to see either of Doctors Deck and/or Chong. She did not raise with Mr McDougall the question of his will.

14. [27]

    On 28 January 2016, Mr Kashian telephoned Ms Visevic and said:

15. [28]

    Ms Visevic said to Mr Kashian “I thought [Mr McDougall] wanted to leave you the house”. Mr Kashian replied:

16. [29]

    Ms Visevic asked Mr Kashian to tell Mr McDougall that she would come to hospital to see him on Sunday 31 January 2016. However, Mr McDougall died early on the Sunday morning.

Events thereafter

1. [30]

   On 9 March 2016, Mr and Mrs Kashian lodged the caveat to which I have referred.

2. [31]

   On 17 March 2016, Ms Visevic’s partner, Mr Ward, wrote to the solicitors for Mr and Mrs Kashian (Mr Kemp) stating that:

3. [32]

   Mr Ward concluded:

4. [33]

   Correspondence was thereafter exchanged between Mr Ward and Mr Kemp.

5. [34]

   The caveat was not removed (indeed, a further caveat was lodged on 6 September 2016), thus necessitating the commencement of these proceedings.

6. [35]

   On 24 November 2016, Mr Kemp wrote to Mr Ward:

7. [36]

   Ultimately, and without waiting for a response to that letter, on 19 December 2016, Mr Kemp made the ‘walk away’ offer referred to at [4].

8. [37]

   Mr Ward replied on 22 December 2016 saying that the “offer is in principle accepted” but “given the particular position our client is in, we propose seeking judicial advice in relation to accepting the offer”.

9. [38]

   Evidently, the reference to “the particular position our client is in” was a reference to the possibility of a professional negligence claim, foreshadowed in the letter of 24 November 2016 (see [35] above).

10. [39]

    In that regard, on 29 March 2017, Mr Kemp, when confirming that the offer of 19 December 2016 remained open for acceptance, said:

11. [40]

    The letters of 3 and 21 March 2017 referred to are not in evidence before me, but evidently make a claim of the kind foreshadowed in the letter of 24 November 2016 (at [35] above).

12. [41]

    The caveat lodged on 6 September 2016 has now lapsed. There is thus, now, no impediment to an order for probate being made in respect of Mr McDougall’s will of 10 March 2014.

The costs incurred

1. [42]

   Thus far, the estate has incurred costs in the order of approximately $95,000, of which some $60,000 is likely to be recoverable from Mr and Mrs Kashian were an order for costs to be made against them on the party/party basis at this stage.

Opinion of Parker SC

1. [43]

   Ms Visevic sought the advice of Parker SC (as his Honour then was) as to the course she should take about the 19 December 2016 offer.

2. [44]

   Parker SC gave a written advice dated 7 March 2017.

3. [45]

   The terms of that advice are confidential.

Consideration

1. [46]

   Were Ms Visevic not to accept Mr and Mrs Kashian’s offer of 19 December 2016, Mr and Mrs Kashian may continue to defend the proceedings and seek to establish that the 22 January 2016 document is an informal will for the purposes of s 8 of the Act.

2. [47]

   That does appear unlikely (given that their second caveat has now lapsed), but it remains a possibility.

3. [48]

   In that event, were the s 8 question to be determined on the basis of the evidence adduced thus far (that of Ms Visevic), it appears to be unlikely to succeed. But Mr and Mrs Kashian may adduce further evidence, which may place a different complexion on matters.

4. [49]

   Alternatively, Mr and Mrs Kashian may simply withdraw.

5. [50]

   In that event, the question would arise as to what prospects Ms Visevic would then have of obtaining an order that Mr and Mrs Kashian pay the estate’s costs of the proceedings.

6. [51]

   Where there is no hearing of a case on its merits, the Court will not usually make any order for costs as there is often difficulty in "discerning a clear reason why one party, rather than the other, should bear the costs": One.Tel Limited v Commissioner of Taxation (2000) 101 FCR 548; FCA 270 at [6] (Burchett J).

7. [52]

   The Court will not hear a case which has become moot merely to determine the question of costs.

8. [53]

   However, if one of the parties has acted so unreasonably as to warrant a costs order against that party, or unless (even if those parties have acted reasonably), one was almost certain to have succeeded, a costs order may be made (Re Minster for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622).

9. [54]

   In my opinion, it is by no means certain what decision a judge would make about the costs of these proceedings, were Mr and Mrs Kashian simply to withdraw.

10. [55]

    Acceptance of the 19 December 2016 offer will have the effect that the estate, and thus the five charities named as beneficiaries under the will, must bear the costs incurred in the proceedings to date.

11. [56]

    However, it will also have the effect, for all practical purposes, of putting an end to the proceedings and thus the risk of Mr and Mrs Kashian’s argument under s 8 of the Act succeeding and Mr and Mrs Kashian obtaining a costs order against the estate.

12. [57]

    It will also avoid the incurring of further irrecoverable costs. Such irrecoverable costs will be incurred even if Mr and Mrs Kashian simply withdraw, and even if a costs order is made against them. There is no evidence before me of the likelihood of recovery of any costs ordered against Mr and Mrs Kashian.

13. [58]

    Overall, I am satisfied I should give Ms Visevic the advice she seeks.

14. [59]

    The fact that Ms Visevic has sought this advice makes clear that she is not motivated to accept the 19 December 2016 offer by any extraneous consideration associated with the threats of a “separate claim in professional negligence” foreshadowed in Mr Kemp’s correspondence.

Order

1. [60]

   Pursuant to s 63 of the Trustee Act, I advise the plaintiff that she would be justified in compromising these proceedings on the basis that the defendants withdraw their opposition to the grant of probate in respect of the will of the late Alexander McDougall dated 10 March 2014, and on the basis that there be no order against the defendants as to the costs of the proceedings.

2. [61]

   I grant liberty to the plaintiff to apply as to the precise form of the order referred to in [60].