SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title: / Drakakis v Makas
Citation: / [2016] ACTSC247
Hearing Date: / Determined on written submissions
DecisionDate: / 26 August 2016
Before: / Mossop AsJ
Decision: / See [62]
Catchwords: / COSTS – Proceedings involved an application for the making of a statutory will – Parties members of an extended family – Proceedings were discontinued following discovery of a valid will – Where testator had deliberately kept existence of will secret from the plaintiff – Where plaintiff had a substantial, albeit indirect, interest in the making of the proposed statutory will – Not appropriate to conduct hypothetical trial to assess strength of plaintiff’s application – Circumstances meant application was arguable until discovery of will – No order as to costs of the plaintiff
COSTS – Public Trustee appointed to represent first defendant pursuant to s 24(1) of the Public Trustee and Guardian Act 1985 (ACT) – First defendant to pay costs of Public Trustee as between solicitor and client and in accordance with s 24(2) of the Public Trustee and Guardian Act 1985 (ACT)
COSTS – Where second defendant not named in originating application –Only joined as party after commencement of proceedings on application of her solicitor – Strength of application not determinative of costs issue – While second defendant could have performed role of contradictor, she also had an interest in opposing application – No order as to costs of the second defendant
Legislation Cited: / Court Procedures Rules 2006 (ACT), rr 259, 278
Guardianship and Management of Property Act 1991 (ACT), s14
Public Trustee Act 1985 (ACT), ss 24, 44(2)
Wills Act 1968 (ACT), s 16A
Cases Cited: / Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622
Parties: / Chris Drakakis (Plaintiff)
Grigoria Makas (First Defendant)
Constance Terend (Second Defendant)
Representation: / Solicitors
TressCox Lawyers (Plaintiff)
Snedden Hall & Gallop (Public Trustee and Guardian)
KJB Law (Second Defendant)
File Number: / SC439 of 2015

MOSSOP AsJ:

Introduction

1.These proceedings involve an application for the making of a statutory will pursuant to s 16A of the Wills Act 1968 (ACT). That provision permits the Court to make a will for a person who does not have testamentary capacity. The proceedings were commenced by originating application dated 17 November 2015. They were discontinued by the plaintiff by leave of the Court granted on 9 February 2016. All questions of costs were reserved. The reason that they were discontinued was because it was discovered that the first defendant had made a later will of which the plaintiff had been unaware. This later will took away the basis for the plaintiff’s application.

Dramatis personae

2.The plaintiff is the guardian and manager of the first defendant. He was appointed to that position on 22 October 2013. The proceedings involve an extended family of Greek extraction. Some of the members of that extended family live in Australia, some in Greece.

3.The relationship between the various persons involved in the present proceedings is best understood by reference to their relationship with two brothers Peter Makas and Emmanuel Makas.

4.Peter Makas died in July 2005. He was married to the first defendant. The first defendant had six siblings. All of those siblings are now dead. Four of those siblings had children. It is only necessary to refer to one of those children, the second defendant who is the niece of the first defendant.

5.The other brother, Emmanuel Makas, died in March 2015. He was married to Panayiota Makas. They had one child, Irene Drakakis, who is married to the plaintiff, Chris Drakakis. The plaintiff is therefore the son in law of the brother of the first defendant’s husband.

6.Another Emmanuel Makas, who I will refer to as Manuel Makas, is the son of Nick Makas another brother of Peter and Emmanuel Makas. He is therefore the nephew of the first defendant. Nektaria Makas is his sister.

7.The second defendant, Constance Terend, is the daughter of one of the first defendant’s sisters. She is therefore the first defendant’s niece.

8.In the reasons which follow I will generally refer to the first defendant by her first name. I do so for convenience and without intending any disrespect to her.

Background

9.The proceedings were commenced by originating application dated 13 November 2015 filed 17 November 2015. The orders sought in that application were that:

(a)the Court grant leave to the plaintiff to apply for an order under s 16A of the Wills Act for a willto be made in the terms of the document annexed to the application;

(b)the willannexed to the application be approved;

(c)the matter be remitted to the Registrar to sign and seal the said will; and

(d)the plaintiff’s costs of the proceedings be paid out of the estate of the first defendant on an indemnity basis.

10.The grounds of the application were set out in the originating application as follows:

1. The Defendant Grigoria Makas is a person who has lost testamentary capacity.

2. The Defendant made her last will on 4 July 1990, the named beneficiaries having predeceased her.

3. In the circumstances that have occurred, in the event of her death the Defendants estate will pass as on intestacy, which the Plaintiff contends is contrary to the wishes of the Defendant.

4. The Plaintiff further contends that a statutory will (within the meaning of the provisions of Part 3A Wills Act, 1968) in the form and substance of the will filed with this application, is one which is, or is reasonably likely to be, one that would have been made by the defendant if she had testamentary capacity.

11.The will which was annexed appointed Irene Drakakis and Chris Drakakis (the plaintiff) as executors and trustees. It would have the effect that all of Grigoria’s interest and assets within the Petros Property Group,including “all of my commercial real estate properties together with all bank accounts and investments held by me [to] myniece Irene Drakakis”. The residue of her estate was to pay all debts and testamentary expenses and the balance would be held for five of her nieces, one of whom was the second defendant.

12.The Petros Property Groupis the trading name of Grigoria Makas. The assets of the group comprise a number of commercial and other properties. The affidavit of the plaintiff filed in support of the originating application described the total value of the Petros Property Group as just over $26,055,000, generating a total rental revenue of $2.8 million per annum as at 2013. The liabilities are just short of $14 million. Therefore, the effect of the proposed willwould be to give very substantial benefits to Irene Drakakis, the wife of the plaintiff.

13.At the time of, or shortly after, commencement of the proceedings, the plaintiff filed in support of the application:

(a)an affidavit of Irene Drakakis dated 16 November 2015;

(b)affidavits of the plaintiff dated 16 and 17 November 2015;

(c)an affidavit of Panayiota Makas (the wife of Emmanuel Makas) dated 16 November 2015;

(d)an affidavit of Guy Maloney, a solicitor employed by the solicitors for the plaintiff, dated 23 November 2015; and

(e)an affidavit of Ramila Varendran, consultant geriatrician, dated 3 December 2015.

14.At the time the proceedings were commenced an application in proceedings was also filed seeking that the proceedings be expedited.

15.The proceedings came before me on 27 November 2015. The plaintiff and the solicitor forConstance Terend appeared on that occasion. I made an order joining Constance Terend as the second defendant to the proceedings. I listed the proceedings for hearing on 22-24 February 2016 and made various directions.The second defendant filed a notice of intention to respond on 30 November 2015.

16.The later willwas first disclosed to the plaintiff on 13 January 2016. I will describe the circumstances leading to the creation and discovery of the later willbelow.

17.The solicitor who held the will refused to produce it to the plaintiff. A subpoena, returnable on 8 February 2016, was issued on 20 January 2016 and required the solicitor to produce the will and various other documents.

18.On 27 January 2016 a request was made to have the proceedings relisted pursuant to a grant of liberty to apply. As a result of the request the proceedings were listed on 5 February 2016.

19.On 4 February 2016 the second defendant filed an application in proceeding seeking that the originating application be set aside because “there exists a more recent will of the First Defendant, made on 29 August 2008, under which no part of her estate will pass as on intestacy.”

20.On 5 February 2016 the solicitorwho held a copy of Grigoria’swilldated 29 August 2008 (John Bradley of the firm Bradley Allen Love) appeared and made a claim for privilege in relation to certain documents which were subject to the subpoena. That was done because the solicitors considered themselves to be under an obligation to claim privilege on behalf of their former client in circumstances where she was unable to provide present instructions as to whether or not privilege should be claimed or waived. An affidavit of her solicitor was read relating to the circumstances surrounding the making of the willand the maintenance of its confidentiality in the period since then. As a consequence of that claim, the return of subpoena was adjourned to a date to be fixed. The potential for the plaintiff, as guardian and manager of Grigoria’s affairs, to waive privilege or confidentiality overthe documents the subject of the claimed privilege was canvassed and a direction was made requiring the plaintiff to give notice of any such intention.

21.On 9 February 2016 the plaintiff was granted leave to discontinue the proceedings and questions of costs were reserved. I made an order for the representation of Grigoria by the Public Trusteepursuant to s 24 of the Public Trustee Act 1985 (ACT) for the purposes of the issue of costs. (I will continue to refer to the Public Trustee notwithstanding the change of name to Public Trustee and Guardian which took effect from 1 April 2016.)

22.On 25 February 2016 Grigoria was represented by the Public Trustee. I made directions relating to the filing and service of written submissions in relation to the costs of the proceedings.

23.Although the parties did not formally read the affidavits that had been filed in the proceedings, the submissions appeared to proceed on the basis that I should have regard to the affidavit evidence filed in order to determine the question of costs. In deciding this application on written submissions I have proceeded on that basis.

The circumstances surrounding the later will

24.The chronology surrounding the making and disclosure of the 2008 willis, as I understand it and for the purposes of this application, largely uncontroversial.

25.On 4 July 1990 Grigoria executed her 1990 will.

26.On 27 August 2008 Manuel Makas, Grigoria’snephew and the son of the late Nick Makas, contacted Mr Bradley conveying to him Grigoria’s desire to make a new will. An appointment was arranged for Grigoria to see her general practitioner to confirm she had testamentary capacity. On 29 August 2008 there was a lengthy meeting with Mr Bradley during which instructions were taken and the will drafted. Manuel was present during that meeting which was cut short when Grigoria had to attend another engagement. Grigoria returned later that afternoon by herself to execute the will. She told Manuel that day that nobody should be told about the will.

27.Mr Bradley continued to have communications with Manuel. Mr Bradley inferred from the circumstances that Grigoria under no circumstances wanted her brother-in-law Emmanuel Makas or any of his family, including the plaintiff, to become aware of the existence or terms of the 2008 will. Manuel Makas appears to have been the conduit by which Grigoria conveyed instructions to Mr Bradley. Because of some concerns about the 2009 accounts for the Petros Property Group and the need to confirm his authority to deal with the accountant, Mr Bradley attended Grigoria’s house on 11 January 2010. During the meeting she signed the letter to the accountant to confirm that Mr Bradley continued to act for her. Their meeting was interrupted when Emanuel Makas’ wife Panayiota came to the door and was persistent in ringing the doorbell. It was clear to Mr Bradley that Grigoria was not happy about the persistence of her intending visitor. Upon Grigoria’s instructions Mr Bradley was told to escape into the garage so that he would not be seen and then exit the garage after a few minutes. He was unable to readily exit the garage and was required to climb, with his briefcase, over the neighbour’s fence in order to make his way back to his car undetected.

28.Mr Bradley did not have any direct contact with Grigoria after this.

29.A week later he received a deed poll executed by Grigoria stating that her brother-in-law (Emmanuel Makas) was in charge of her legal and financial affairs and had full power to appoint accountants and lawyers on her behalf.

30.Correspondence between Emanuel Makas and Manuel Makas clearly indicated that Emanuel perceived Manuel to be interfering in his family’s affairs.

31.On 1 February 2010 Mr Bradley received an email from Manuel which reported an adverse interaction between Emanuel and Grigoria. It recorded in relation to the execution of the deed poll:

She told me that [the plaintiff] had taken a document for her to sign and that she did so because she wanted to be left alone. The main priority is to make sure that they not only leave her alone but also don’t unearth her will. She told me that she will tell me more when she sees me next.

32.On 8 September 2010 Mr Bradley received a letter from Meyer Vandenberg on behalf of the plaintiff attaching an authority to release documents dated 26 August 2010 which extended to all “files, safe custody packets and other documents in your possession” relating to Grigoria Makas, Peter Makas and the Petros Property Group.

33.On 8 September 2010, the authority was conveyed to Manuel. Manuel spoke to Grigoria who told him that “under no circumstances” did she want Emmanuel and his family to get hold of the will. The next day Manuel told Mr Bradley that Grigoria “definitely wanted her will to stay with us and definitely not to hand over the will nor the doctor’s certificate”.

34.On 10 September 2010 Mr Bradley received a second direction signed by Grigoria directing him to give the will to her niece Nektaria. He complied with that direction on 10 September 2010 by handing it to her. Mr Bradley was informed that Nectaria Makas intended to place it in a packet at the law firm Snedden Hall and Gallop.

35.On 20 September 2010 Mr Bradley then responded to the letter from Meyer Vandenberg dated 7 September 2010 enclosing an original revocation of power of attorney and stating “this is the only document we are holding”.

36.On 11 April 2012 the plaintiff met with Mr Bradley at Mr Bradley’s office. There is a contest over the facts as to what occurred at that point. On the one hand, the affidavit of Guy Maloney dated 27 January 2016 includes the following:

We are further instructed that at 3pm on 11 April 2012, our client met with John Bradley at his office. At this meeting:

(a) our client produced his Power of Attorney to Mr Bradley;

(b) our client informed Mr Bradley of Grigoria’s health and shortened life expectancy and his need to ensure her affairs were in order;

(c) our client referred to the other documents produced by Mr Bradley in relation to Grigoria to that point and asked whether, other than those documents, there was any other material relevant to Grigoria’s estate that remained in his or his firm’s possession, and if so, that it should be sent to Meyer Vandenberg;

(d) Mr Bradley informed our client that there were no such documents;

(e) Our client asked Mr Bradley whether he had visited Grigoria or she had attended his office;

(f) Mr Bradley said he had not seen Grigoria since her husband Peter’s death in 2005.

37.On the other hand, in Mr Bradley’s letter dated 18 January 2016 he stated:

Neither I nor my firm has ever been asked by your client, you, or Meyer Vandenberg whether we prepared any Will for Grigoria after 4 July 1990 and neither I nor my firm has ever been asked whether we are aware of any Will subsequent to the will of Grigoria dated 4 July 1990.

38.It is not possible on the present application to resolve what was said by the plaintiff or Mr Bradley at this meeting.

39.Emmanuel Makas died in March 2015. The proceedings were commenced in November 2015.

40.Manuel Makas commenced proceedings in the ACT Civil and Administrative Tribunal on 23 December 2015 seeking to have Chris Drakakis removed as Grigoria’s guardian and financial manager. At that stage he was not aware of these proceedings. He first spoke to the second defendant’s solicitor on 11 January 2016 and was told about these proceedings.

41.On 13 January 2016 the solicitors for the second defendant wrote to the solicitors for the plaintiff identifying that Bradley Allen Love had disclosed that Grigoria’s solicitor, John Bradley, had prepared a willexecuted on 29 August 2008 and consequently, as matters stood, no part of Grigoria’s estate would pass by intestacy. Although the evidence does not say so expressly, I infer that this information came to the knowledge of the second defendant as a result of contact with Manuel Makas, who was aware of the will’s existence. Understandably, that revelation led to some correspondence between the parties, in particular the plaintiff pointing out the efforts that he had gone to to obtain documents from Bradley Allen Love in September 2010 and April 2012.