Fatseas v Fatseas bht Basha (No 2)

The background to this matter is set out in my judgment of 6 April 2022. [1]

I shall use the same abbreviations, and refer to the parties in the same manner, as in that judgment.

A number of further issues require resolution.

First, Stella, as the former administrator of George’s estate, seeks an order that John pay her $32,846 for expenses incurred by her as administrator.

Those expenses were described by Stella’s solicitor, Mr Nathan James, in an affidavit made on 12 April 2022 as follows:

Stella claims these amounts under the indemnity given by John to Stella in the Heads of Agreement:

RSM Australia is a firm of accountants engaged by Stella on 13 September 2021, that is after the date of the Heads of Agreement, to prepare tax returns on behalf of the estate. That expense is a liability that Stella has “in respect of the administration of the assets of the estate” and is thus the subject of the indemnity in cl 30 of the Heads of Agreement. John must pay this amount to Stella.

Cobia Consulting also provided accounting services to the estate. The invoices suggest that the work involved updating balance sheets and updating and reviewing various spreadsheets concerning the financial position of the estate. Mr Wallis, who appeared on behalf of John, submitted that these expenses should be seen as being “legal disbursements of Bay Legal” (Stella’s solicitors) because of a handwritten note “#1160” on one of the Cobia Consulting’s invoices. “#1160” is, evidently, the file number allocated by Bay Legal to its file in relation to Stella. However, whether or not Bay Legal has for its own purposes characterised Cobia Consulting’s fees as a “disbursement”, Cobia Consulting’s invoices suggest it was providing accounting services as I have described. This appears to me to be a liability Stella has incurred “in respect of the administration of the assets of the estate” and is recoverable from John under cl 30 of the Heads of Agreement. John must also pay this amount.

Mr Wallis accepted that the final amount, owing to all property valuations was the subject of the cl 30 indemnity.

Accordingly, John should pay Stella the amount of $32,846.

Stella also seeks to recover from John an amount of $25,215.30.

Mr James has described the manner in which that liability was incurred as follows:

Mr James has annexed to his affidavit documents narrating the work done by Bay Legal in relation to these matters. On behalf of Stella, it was submitted that these were “estate administration expenses” rather than “legal fees in these proceedings”.

However, there is excluded from the indemnity in cl 30 of the Heads of Agreement “the legal costs or disbursements of Bay Legal”. Implicit in Stella’s argument appears to be the proposition that the last sentence of cl 30 should be construed as relating only to such costs as Stella incurred otherwise than “in respect of the administration of the estate”. But that is not what the exclusion says, and the parties may well have had reason to exclude from the indemnity any of Stella’s legal costs. In any event, it is not appropriate that I embark, at this stage, and in this context, on a further exercise in determining the proper construction of this agreement.

Stella seeks to mount an alternative case on a quantum meruit basis.

However, as the parties have addressed, in cl 30 of the Heads of Agreement, the ambit of the indemnity to be given by John arising out of the administration of George’s estate, I see no room for the operation of a quantum meruit claim. Stella cannot step outside the terms of the contract to which she has agreed and seek to assert a wider liability in restitution to that for which she bargained.

Next, Stella seeks to recover from Maria $31,122 in the circumstances described by Mr James as follows:

The amount the subject of Stella’s claim is a total of the amounts referred to in pars 16(b) to (e) of Mr James’ affidavit.

Mr Pesman SC’s and Mr Alexander’s submissions for Stella in relation to this claim are:

Although Mr Wallis, inappropriately, offered some submissions on this topic, I have not received any submissions on behalf of Maria in relation to this claim and am not aware whether she, through her separate legal advisers, is aware of the claim.

I agree with Mr Pesman and Mr Alexander, for Stella, that “Maria may make submissions separately, if she wishes, but she does not get to make submissions twice”.

Stella’s legal advisers should make arrangements for Maria’s separate legal advisers to become aware of the claim, and for them to provide to me, in writing, such response as they wish to make to the submissions that I have set out.

As to costs, it is agreed between Stella and John that there should be no costs of these proceedings save in relation to John’s Notice of Motion of 1 April 2022 and Stella’s Notice of Motion of 8 April 2022.

Mr Pesman and Mr Alexander said that “Stella reserves the right to make submissions on the costs of each motion at the appropriate time”.

The notation to the orders I made on 7 April 2022 recorded that the parties were to confer and agree on a timetable for short submissions as to costs (as well as to the matters to which I have referred earlier in these reasons). If any party wishes to make any further submissions concerning the costs of the two motions to which I have referred, they should do so by 5 pm on 29 April 2022, with submissions not exceeding 2 pages.

The parties should liaise with my Associate concerning Maria’s further involvement.