Beneficiary unsuccessful in seeking to institute litigation on behalf of the Estate regarding transactions during the Deceased's lifetime

Wills and Estates: 16 September 2019

In Shannon v Shannon [2019] VSC 605 a beneficiary was unsuccessful in seeking to institute litigation on behalf of the Estate regarding transactions during the Deceased's lifetime.

Shannon v Shannon [2019] VSC 605

Judgment: 6 September 2019

Judge: Her Honour Justice McMillan

This application was made by one of the beneficiaries of her late Grandmother's Estate. The Grandmother's Will appointed her daughter, the Applicant's mother, as the Executor but the Executor had not taken out a Grant of Probate in the Estate as there were no assets to administer. The Defendant was an interested party and Grandson.

The Granddaughter sought a grant of letters of administration ad litem which is a limited form of grant of representation from the Supreme Court of Victoria allowing the administrator to conduct litigation on behalf of the Estate. Generally, this type of grant is made where there is no personal representative willing or able to take out a Grant. The Granddaughter sought to investigate certain transactions occurring prior to the Deceased's death (transfer of shares in private companies) which ultimately reduced the assets comprising the Estate on her death. Part of the investigations were to include an analysis of the Deceased's capacity at the time of the transfer of the shares and whether the transfer was a result of undue influence or unconscionable conduct.

The Court noted that, generally, a beneficiary of a deceased estate does not have a personal right to seek to set aside a transaction that occurred during the deceased's life time. This may only occur where there is an Executor but that Executor is unable or unwilling to bring the claim and the claim is meritorious (has good prospects of success). In this case, the Executor appointed in the Will had indicated a willingness to assist the Plaintiff by obtaining and providing her with the information sought and that if circumstances warranted, she would apply for a Grant. The reason a Grant had not been sought was because there were insufficient assets in the Estate to warrant the application.

The Granddaughter's application was unsuccessful and dismissed with the Granddaughter ordered to pay the Grandson's costs as the Granddaughter was not an appropriate person to take out such a Grant due to her failure to comply with Court orders in this and related proceedings that were plagued with delay and uncertainty. The Court referenced the Granddaughter's "scant regard in complying with orders made in any of the proceedings that she had initiated and all of the proceedings were plagued by substantial delays and a lack of clarity.

This application by the Granddaughter was subsequent to another earlier, unsuccessful, application as well as a related proceeding.

Aitken Partners' Wills & Estates team acted for the successful Grandson in this (and the earlier) proceeding.