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Re will and estate of Zurcas (dec'd) [2012] VSC 441 (16 October 2012)

Last Updated: 4 December 2012

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2010 02735

IN THE MATTER of Part IV of the Administration and Probate Act 1958

and

IN THE MATTER of the will and estate of Vassilios Zurcas, deceased

B E T W E E N

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TESTATOR’S MAINTENANCE – Application – Procedure – Discovery by Beneficiaries –Part IV, Administration and Probate Act 1958 s 91(4) – Civil Procedure Act 2010 (Vic) s 7 – Supreme Court (General Civil Procedure) Rules 2005, Ch 1 r 29.07(2).

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HER HONOUR:

1 The plaintiffs, Daphne Dinakis and Connie Zurcas, commenced proceedings against the executors of the will of Vassilios Zurcas, seeking an order for provision under Part IV of the Administration and Probate Act 1958 (“the Act”).

2 The plaintiffs seek discovery of 16 categories of documents from the defendants.

3 The plaintiffs are daughters of Vassilios and Dosta Zurcas. Their parents, Vassilios and Dosta, died on 1 August 2009 and 5 March 2001 respectively. They both left wills dated 31 July 2008.

4 Vassilios and Dosta had three children, the plaintiffs and Stan, the first defendant. The second and third defendants, Sam and Nick Zurcas, are Stan’s sons (the deceased’s grandchildren).

5 Under the two wills, the current provisions for the plaintiffs are approximately $950,000 each and approximately $4.7 million to the defendants.

6 By summons dated 9 May 2011, the plaintiffs seek discovery of 16 categories of documents pursuant to r 29.07(2) of the Supreme Court (General Civil Procedure) Rules 2005, (“the Rules”) namely:

(1) financial statements for Sacruz Nominees Pty Ltd as trustees of the Zurcas Family Trust;

(2) documents relating to the transfer of the power of appointment from Vassilios Zurcas in the Zurcas Family Trust;

(3) the Zurcas Family Trust deed;

(4) documents relating to the negotiation and acquisition of the Sherbourne Hotel by Caszur Nominees in or about 1978, including documents relating to who negotiated the acquisition and how it was financed;

(5) documents relating to the negotiation and acquisition of the St Albans Hotel by Caszur Nominees in 1979, including documents relating to who negotiated the acquisition and how it was financed;

(6) documents relating to the negotiation and acquisition of the Target store in Shepparton by Caszur Nominees in or about 1984, including documents relating to who negotiated the acquisition and how it was financed;

(7) documents relating to the negotiation and acquisition of the Venture store in Shepparton by Caszur Nominees in or about 1989, including documents relating to who negotiated the acquisition and how it was financed;

(8) documents relating to the negotiation and acquisition of the Avram Family Interests in the Target store by Caszur Nominees in about 2000/2001, including documents relating to who negotiated the acquisition and how it was financed;

(9) documents relating to the negotiation and acquisition of an 80 per cent interest in the Sherbourne Hotel by interests associated with the second and third defendants in about 1995, including documents relating to who negotiated the acquisition and how it was financed;

(10) documents relating to the negotiation and acquisition of units in Zurgaul Nominees Pty Ltd as trustee for the Fine Food Centre Unit Trust by interests associated with the second and third defendants in or about 1984, including documents relating to who negotiated the acquisition and how it was financed;

(11) documents relating to the negotiation and acquisition of Simson’s Orchard by Allendale Pty Ltd in or about 1989, including documents relating to who negotiated the acquisition and how it was financed;

(12) documents relating to the negotiation and acquisition of Caszur Nominees units in the Allendale Unit Trust by interests associated with the second and third defendants in or about 1992, including documents relating to who negotiated the acquisition and how it was financed;

(13) documents relating to the negotiation and/or redemption of Steve and Daphne Dinakis’ units in the Allendale Unit Trust, resulting in V. and D. Zurcas Holdings Pty Ltd on the way part and interest associated with the second and third defendants on the other part holding 50 per cent each of the units in the Allendale Unit Trust, including documents relating to who negotiated the acquisition and how it was financed;

(14) documents relating to the negotiation and acquisition of the commercial property in View Street, Bendigo by interests associated with the second and third defendants, including documents relating to who negotiated the acquisition and how it was financed;

(15) documents relating to the transfer of interests held by Vassilios Zurcas (or entities of which Vassilios Zurcas was director or shareholder) and/or Dosta Zurcas to the defendants or entities associated with the defendants, or one or other of them, including documents relating to who negotiated the acquisition and how it was financed;

(16) all financial and trust records for the financial years ending 30 June 2006 to date for the following trusts:

(a) the Zurcas Family Trust;

(b) the V. Zurcas Unit Trust;

(c) the View Street Unit Trust;

(d) Zurcas Avram Unit Trust;

(e) Fine Food Centre Unit Trust; and

(f) the Allendale Unit Trust.

Discovery and Part IV Applications

7 Where proceedings are issued by originating motion the Court may order discovery. In determining whether to grant discovery some type of special circumstance must be established.[1]

8 In Harris v Bennett (No 3),[2] Redlich J, as he was then, refused an application made by the plaintiff for discovery from the defendant about their financial position. The Court determined that issues were to be determined by the affidavits and that as the defendant and the beneficiaries had not put any material about their financial position there was no relevant issue before the Court.

9 In Re Borthwick; Borthwick v Beauvais (“Borthwick’s case”),[3] the Master of the Rolls described the jurisdiction as a peculiar one in which it is known:[4]

... that if the procedure were to be abused and not kept under proper control, it might lead to litigation of the greatest acrimony and the thrashing out of a lot of irrelevant material which would not be in the public interest.

10 Later, at p 650, his Lordship continued:

The plaintiffs, however, have not put forward a single shred of fact or a single suggestion casting doubt on the fairness or accuracy of the executors’ evidence on the subject of value. Indeed their complaint is this: ‘We cannot do that without some materials and the reason why we want discovery is to enable us to test what the executors have said and to see whether or not we can find something on which to attack their estimate.’ In ordinary litigation, of course, the ordinary rules of discovery enable litigants to conduct such an examination, but this is a very special jurisdiction under a very special Act governed by very special rules. The judge has ample power, if he is not satisfied or if he thinks there is a reasonable ground for doubting the accuracy of such an estimate as this, to require further evidence on the point, to summon the executors before him, to put questions to them and to subject them to crossexamination. If he thought that was the proper course and if the matter was a matter of doubt or if suspicion was aroused, that no doubt would be the course the he would take. But here we have what on the face of it is sworn testimony by reputable people, the accuracy of which has been subjected to the not too easy test of an investigation by a government department. Everybody who has a little experience of these matters knows that the valuation of shares in private companies is often an extremely difficult matter, and also, I think, everybody knows that where such shares come up for valuation for death duty purposes they are a subject matter on which the death duty officials are particularly vigilant and particularly inquisitive. A judge who is asked to exercise his discretion in a case of that kind has to weigh in his mind these considerations. Here are plaintiffs who cannot suggest any doubt about this prima facie reliable method of arriving at the valuation, who merely ask for the instrument of discovery be put into their hands to enable them to see if they can find something on which to attack it. If ever there was a case where a judge should decline to exercise discretionary jurisdiction to grant an order for discovery, I think this is such a case. If any reasonable suggestion of doubt could be raised, I have no doubt the judge in his discretion under the power given to him by these specific rules would require further information.

11 In Blair v Blair,[5] Harper J, as he was then, was concerned with a subpoena directed to third parties. His Honour was satisfied that the documents could never assume any relevance. Redlich J in Harris v Bennett (No 3),[6] considered that Harper J’s comments were apposite to the discovery application before him. Redlich J cited Harper J’s comments in Blair v Blair with approval:

It cannot follow however that in every case the Court must examine to the last minute detail the financial resources of every beneficiary of every estate upon which a claim is made under Part IV of the Act. On the contrary, the Court should in my opinion make it clear to both the parties and their legal representatives that the mere commencement of proceedings under the Part does not carry with it a general and unrestricted licence (including the use of discovery and the power to subpoena documents) to delve into the affairs of actual or potential claimants or beneficiaries.

Unless this is made clear, a potential danger may become real. It is that, given the relatively recent amendments to the provisions of Part IV, courts will be swamped with evidence merely because that evidence concerned matters to which (following those amendments) the courts must have regard. But ‘having regard’ to a matter does not necessarily mean examining it under a microscope. It is vitally important that a sense of proportion be retained. Otherwise, cases under Part IV will become a travesty of wasted time, money and other resources. Justice cannot be administered by such means.^[7]

12 Finally, in Harris v Bennett (No 3), Redlich J concluded:[8]

There may be circumstances in which a beneficiary’s resources or needs or the benefits given to the beneficiary during the testator’s lifetime may be relevant though the beneficiary makes no claim based upon need. In the present case there is nothing about the defendant’s personal circumstances which can attenuate the plaintiff’s claim. On the basis of the evidence and provision of the further documentation which expressly disavows any intention by the defendant to make any claim against the estate based upon her financial needs, no proper purpose would be served by requiring the defendant to make discovery.

13 In Reed v Reed,[9] an application for discovery was made on behalf of the plaintiff, a child aged 12, requiring the defendants to give discovery of financial documents relating to the assets and liabilities of the deceased’s estate. The inventory of assets and liabilities of the deceased’s estate filed in support of the defendant’s application for probate on its face showed that at the time of the application the estate was bankrupt. The plaintiff challenged the assertion. Beach J found:

Without the discovery the plaintiff seeks the plaintiff’s prospects of proceeding further with this proceeding are remote. The consequences of that would be that the infant child of a well-known Melbourne architect would not receive any benefit from the estate of her father. If I may say so, a most remarkable situation.

In my opinion the circumstances of this case are so unusual as to justify the making of the order for discovery the plaintiff now seeks.^[10]

14 Finally, it is worth noting the recent reforms to discovery. Discovery has been the subject of reform over many years. The Victorian Law Reform Committee report in March 2008[11] and the Australian Law Reform Commission report in March 2011[12] were critical of the time and costs devoted to discovery often for a comparatively small result in identification of documents relevant to the eventual resolution of the dispute.

15 The shift is seen in the recent amendments to the Civil Procedure Act 2010 (Vic) (“CPA”) and Order 29 of the Rules. The overarching purpose of the CPA is to facilitate the “just, efficient, timely and cost-effective resolution of the real issues in disputes”.[13]

16 Accordingly, in determining this application the Court must have regard to the overarching purpose of the CPA and the requirement of special circumstances as set out in Harris v Bennett (No 3).[14]

The Plaintiffs’ Submissions

17 The plaintiffs submit that the deceased over a 30 year period was a successful entrepreneur in Shepparton. He was involved in the acquisition of a hotel, orchards, shopping centres and retail premises on a large scale. The plaintiffs submit that the affidavit material filed by the defendants in this proceeding, confirmed the deceased controlled business assets during his lifetime which were significantly in excess of the estate’s assets. The plaintiffs contend that almost all of the product of the 30 years successful entrepreneurial work of the deceased has been transferred as a benefit to the plaintiffs’ brother Stan and his family, through gifts, trusts and other mechanisms.[15]

18 The plaintiffs submit that the fact that the deceased has conducted 30 years of successful entrepreneurial activity for the benefit of his son Stan is a relevant factor under s 91(4)(i) of the Act in determining whether the deceased had made adequate provision for the proper maintenance and support of the plaintiffs and the amount of the provision which the Court should order pursuant to s 91 of the Act.[16]

The Defendants’ Submissions

19 The defendants submit that the documents sought by the plaintiffs are not relevant to this proceeding based on the plaintiffs’ affidavit material in support of their claim. The defendant beneficiaries do not assert they have a financial need or financial competing claim. The beneficiaries confirm that they have interests in non-estate entities, for which they worked with the deceased and the deceased’s various entities, and that they earned what they received. The defendants do not assert a competing claim or put in issue the extent to which they have been compensated or the provision they have received.

20 The defendants contend that the documents sought by the plaintiffs in this discovery application are not relevant, as determined at law. That is, the Court’s task is to determine the extent to which proper provision ought to be made for the plaintiffs. This involves an assessment of the moral claim and financial position of the plaintiffs. The defendants submit that the plaintiffs do not meet the necessary test by demonstrating that the beneficiaries would not have a claim of their own by reason of their financial position. Further, the plaintiffs’ submissions amount to a claim that the children of the deceased should be treated equally. The Court has held that there is no expectation that children will be treated equally.[17]

21 Finally, the defendants submit that the discovery sought by the plaintiffs is fishing and oppressive.

Decision

22 The starting point in determining whether the defendants should make discovery of the 16 categories of documents sought in the summons is the plaintiffs’ affidavit material. That is, what have the plaintiffs put in issue in their affidavit material?

23 Daphne Dinakis in her affidavit dated 4 August 2010 deposes at a very general level to her understanding of the family business.

...

(8) I recall when I was growing up my parents worked hard in the orchard especially during the fruit season. The orchard was owned by a family company. My grandfather and my father and my father’s two brothers were members of the company.

(9) Eventually, a trucking arm was set up. Other farmers in the Shepparton district who had produce used our families’ trucks to collect their produce and deliver it to markets. ...

(15) During the 1960s the family purchased the GV Hotel and a cool store. Accordingly the family company had four arms being the orchard, the trucking business, the cool store and the hotel. ...

(17) In or about 1974 my father and his two brothers agreed to split the business. My father kept two farms and the other two brothers each got two farms also. One of my uncles retained the GV Hotel. The trucking arm was sold. The cool store was retained by my father together with one of my uncles. My father, or entities controlled by him, subsequently acquired the Sherbourne Hotel. ...

(20) ... As my father was assisting Stan and his family financially, I asked him to give me a sum of money equal to the sum of interest that we had paid to the bank. My father had assisted other people in the Shepparton region financially and did a lot for other people. I believed the least he could do was reimburse my husband and I for the interest we had paid on the property and he did so. ...

(21) In or about 1988 my family purchased a 220 acre orchard in Tatura with shares in SPC Pty Ltd formerly Ardmona Cannery Pty Ltd. The property was purchased in three shares. My father and Stan had one share. A cousin, Michael who was also a partner in the cool store with my father, had a one-third share and Steve, my son Garry and I had the other one-third share. ...

(32) In or about 2005 my father bought out my interest in the orchard with Steve ...

24 The substance of Daphne Dinakis’ affidavit deals with her relationship with her father, the contributions her father made to her and her husband and the care she provided to her father in the later stages of his life.

25 Connie Zurcas’ affidavit sworn 4 August 2010 does not refer to the deceased’s businesses or what, if any, involvement a benefit the defendants derived from the businesses.

26 In his affidavit sworn 17 September 2010, Stan Zurcas sets out in considerable detail the financial structure of the deceased’s businesses. The relevant parts are:

(9) In 1971 V&D Zurcas Holdings Pty Ltd was incorporated with my father and I being the sole and equal shareholders. In 1976 the partnership was dissolved and the partnership assets were divided equally between my father and his two brothers Tom and Angelo. My family’s share of these assets were transferred to V&D Zurcas Holdings Pty Ltd, which also recognised my many years working for my father for little pay or return prior to that date. Subsequently my father’s 50% shareholding was transferred as to half to my mother Dosta and my 50% shareholding was transferred as to half to my wife Dimitroula such that the shares were then held as 25% each by my father, mother, Dimitroula and I.

(10) On the division of the assets of the partnership V&D Zurcas Holdings Pty Ltd received:

(a) a one half interest in the property containing Zurcas cool stores and packing shed;

(b) a 75 acre orchard known as “the depot”;

(c) a 75 acre orchard known as “Birangi”.

...

(12) The Sherbourne Hotel was purchased in 1978, in the name of Caszur Nominees Pty Ltd ATF V. Zarcus Unit Trust the units in which were held by Sacruz Nominees Pty Ltd ATF Zurcas Family Trust which is my family trust. From the outset the intention was this hotel was being purchased to be operated by me and my sons, Sam, Peter and Nick. ...

(13) Save for my father’s role as head of the family, and as the effective chairman and finance director of the family Companies and Businesses his great love was the orchard and fruit business, and that was where he focussed his interest and time. From the 1970s each orchard had its own management team but my father had provided oversight of the orchards and my father and my cousin Michael provided oversight of the operation of the cool store and packing shed. ...

(15) In 1979 and 1989 the following further properties were purchased by Zurav Nominees Pty Ltd ATF Zurcas Avram Unit Trust, 50% of the units of which were held by Caszur Nominees Pty Ltd ATF v. Zurcas Unit Trust and as to 50% by Bill and Alex Avram’s corporate entity. The shares in the trustee Zurav Nominees Pty Ltd were held as one by $1 share each by my father, and Bill or Alex Avram. The shares in Caszur Nominees Pty Ltd were held as to one by $1 share by my father and the remaining shares by my wife and I and our sons.

(a) 1979 St Albans Hotel;

(b) 1984 Target Store, Shepparton;

(c) 1989 Venture Store, Shepparton.

In 1989 Simsons Orchard at Tatura was purchased by a company established for that purpose being Allendale Pty Ltd ATF Allendale Unit Trust the units in which were held as to one-third thereof by Caszur Nominees Pty Ltd ATF V. Zurcas Unit Trust, one-third thereof by Michael Zurcas, and one-third thereof by Steve and Daphne. In 1992 Sam and Nick’s family trust purchased Caszur Nominees units in Allendale’s Unit Trust. In 1996 the McCamish orchard at Ardmona was purchased by Ardmona Orchards Pty Ltd ATF Ardmona Orchards Unit Trust, the units in which were held by V&D Zurcas Holdings Pty Ltd, Michael Zurcas and M. DeMazzi.

27 In paragraphs 16 to 19, Stan Zurcas outlines the various business entities in which the deceased had some involvement and the breakdown of the ownership of each of those entities.

28 At paragraph 21 and following, Stan Zurcas deposes:

(21) As the head of the family and chairman and finance director of the extended family companies and businesses my father carried a great deal of authority and was the one who primarily dealt with the companies’ bankers, accountants and lawyers and enjoyed those roles. However, the family companies and businesses were run on a consensus basis and no decision of any significance was made without first being discussed at a family meeting. Save for decisions affecting other family groups, these meetings initially comprised my parents, Dimitroula and I, and subsequently my children Sam, Peter and Nick, as they assumed more responsibility for the family businesses. Their wives were also included at times. Daphne and Connie were not involved in these meetings. Save for Steve and Daphne’s interests in Allendale Pty Ltd their involvement in these businesses was as employees, for which they were paid normal wages and conditions. They were not directly involved and carried no business risk as my parents, my wife and I, and my sons did. ...

(22) Our family business group comprised my parents, my wife and I, and my three sons Sam, Peter and Nick. While my father was the driving force, the rest of us were the support team. ... We put our personal assets on the line to follow through on these projects, most of which, if not all were fully or substantially funded by borrowings and provided our personal guarantees to the bank to support these loans. In every sense of the term my sons and I and our family were in business together with my father, with his emphasis being the orchards and cool store and packing businesses, and ours being the hotel and commercial properties.

(23) It cannot be overstated the role which my sons and I played in supporting my father in the conduct of these family businesses. My father was not a one man band. My father always sought the advice, consensus and participation of others in the family business dealings. ...

(24) In summary my father was the head of the family, and chairman and finance director of the family groups of company and business entities with particular focus on finance issues and the operation of the orchards and cool stores and packing sheds. He did not own everything, and his interests in various entities changed over time. There was no gifting of interest and to the extent that my father or his corporate entities transferred interest they were reflected in inter entity loans many of which were repaid from dividends over time and the balance of which remain in the Company Books.

29 At paragraph 25, Stan Zurcas deposes to further details of the purchase and operation of the Sherbourne Hotel; V&D Zurcas Holdings Pty Ltd; Simsons Orchard; Allendale Pty Ltd ATF Allendale Unit Trust.

30 Nick Zurcas, filed an affidavit sworn 17 September 2010, the substance of which supports the matters deposed to by Stan Zurcas. In addition, he notes that he and his brother Sam each acquired a 40% interest in the Sherbourne Hotel at a price of $1.5 million each.

31 In response to Stan Zurcas’ affidavit sworn 17 September 2010, Daphne Dinakis filed an affidavit in reply dated 18 November 2010. In the 18 November 2010 affidavit, Daphne does not contest or put into issue the matters referred to in Stan Zurcas’ affidavit of 17 November 2010.

32 Connie Zurcas filed an affidavit in reply dated 17 November 2010. In her affidavit she disputes Stan’s involvement in her father’s business affairs, particularly in the decision making process and describes Stan’s involvement as minimal.[18] At paragraph 4 she deposes that although Stan says he worked for many years for his father with little pay or return, “he has accumulated considerable assets during his life”.[19] Connie deposes that it is her belief that the income from the Sherbourne Hotel was used to pay Stan’s family’s household bills and assist in the accumulation of assets which were purchased by Stan and his children.[20]

33 In support of the discovery application, the plaintiffs rely upon affidavits of Nicholas Lambros, solicitor, dated 8 May 2012 and 12 June 2012. In his affidavit of 8 May 2012, Mr Lambros makes a series of assertions as to the makeup of the various business entities referred to in the estate’s Inventory of Assets and Liabilities. At paragraph six Mr Lambros deposes:

(6) The plaintiffs seek that provision be made out of the estates of both the deceased and Dosta Zurcas for their proper maintenance and support. In making this determination it is asserted that the extent of the gifts to the first defendant and his family must be taken into account. The plaintiffs allege that the defendants have sufficient financial resources and no financial needs to be taken into account pursuant to s 91(4)(h) of the Administration and Probate Act (“the Act”) and that the deceased gave substantial benefits to the defendants during the course of his life pursuant to s 91(4)(l) of the Act including, inter alia, (a) gifting a one half interest in V&D Zurcas Holdings; (b) transferring the power of appointment over the Zurcas Family Trust to the first defendant at or shortly prior to his death; (c) arranging transfers from the Zurcas Family Trust to the defendants’ of interest in the Sherbourne Hotel and the Target store; (d) arranging by personal exertion or by provision of security and/or finance the acquisition of the defendants’ interests in the Fine Food Centre, Allendale and the commercial property at View Street, Bendigo.

(7) I am informed that the plaintiffs and believe that the deceased was the person who established the family business structure and controlled the business affairs operated through the various entities. Further, the family business affairs were organised in a manner whereby the assets controlled by the deceased were held by different entities. I am further instructed by the plaintiffs and believe that substantial assets which were effectively controlled by the deceased were transferred to the benefit of the defendants over many years.

34 In opposition, the defendants rely on the affidavit of Anthony Brooke Watson dated 8 June 2012 and Travis Robert Payne dated 11 September 2012. Both affidavits provide further detail of the assets of Vassilios and Dosta Zurcas at the time of their death. The Payne affidavit provides a breakdown of the shareholdings issued in V&D Zurcas Holdings in June 1971 and June 1987. The evidence is that in June 1971 the following ordinary shares were issued in V&D Zurcas Holdings:

1. 99 to Vassilios Zurcas;
2. 99 to Stan Zurcas;
3. 100 to Dosta Zurcas; and
4. 100 to Dimitroula Zurcas.

35 In June 1987 the following ordinary shares were issued in V& D Zurcas Holdings:

1. 393 to Vassilios Zurcas;
2. 393 to Stan Zurcas;
3. 392 to Dosta Zurcas; and
4. 392 to Dimitroula Zurcas.

36 In his affidavit dated 8 June 2012, Mr Watson deposes to the potential cost of the plaintiffs’ discovery application and the impact on the future conduct of the proceeding. Mr Watson considers that if no order is made for discovery, this matter is effectively ready for trial which could be concluded in three days, save for a report from a financial adviser as to the plaintiffs’ likely future income which the defendants proposed to file and serve. Mr Watson considers that the defendants’ costs of the proceeding, including trial, if no further discovery is ordered, would be in the vicinity of $72,250 and that the plaintiffs’ costs would be similar, maybe slightly more, and he estimates that the plaintiffs’ costs and disbursements up to and inclusive of trial could be in excess of those of the defendants by about $40,000.

37 Mr Watson considers that if the plaintiffs are successful in the discovery application, it would take an additional six months for this matter to be ready for trial and that the estimate of the trial could be as long as ten days. Mr Watson estimates that the defendants’ legal costs and disbursements would increase as follows:

1. Provision of the further discovery $20,000;
2. obtaining instructions and preparation of further evidence $50,000;
3. legal fees in connection with further conduct of the proceedings including preparation for and attendance at trial to instruct counsel (assuming ten day trial) $100,000 to $120,000;
4. fees to counsel to assist in the preparation of further evidence to prepare for and appear at trial $100,000;
5. preparation of expert evidence and attendance to give evidence at trial $10,000;
6. transcript for each day of hearing $7,500:

Total: 287,500 to $300,500

38 Mr Watson estimates that the costs and disbursements of the plaintiffs would be similar.

39 Mr Lambros in his affidavit dated 12 June 2012 states that he does not agree with Mr Watson’s contentions in relation to the estimate and costs. He states: “I am unaware of the factors which have caused him to make the increased estimate.”

40 The evidence before the Court is that the plaintiffs do not conduct their claim on the basis that the deceased provided substantial benefits to the defendants. There is only a reference in Connie Zurcas’ responding affidavit dated 17 November to the issue of inter vivos gifts from the deceased to the defendants.

41 Affidavits of Nicholas Lambros do not assist in that he makes a series of assertions with no evidentiary foundation. The plaintiffs rely on the affidavit material filed by the defendants to support their contention that the deceased advanced benefits to the defendants during his lifetime and that the deceased was ultimately in control of the family businesses. I do not consider the evidence supports this contention. Stan Zurcas’ affidavit sets out a fulsome history of the family businesses and entities, their formation and control and ownership. This is not a case where the defendants make a financial competing claim. While the defendants have not expressly gone on affidavit on this point, there is nothing in the affidavit material filed by the defendants to suggest such a claim is made. Further, the defendants’ submissions in this application are made on the basis that they do not profess to have a financial need or a financial competing need.[21]

42 Importantly, the fact that the categories of documents sought by the plaintiffs relate to specific matters enumerated in s 91(4)(e) – (o) of the Act, does not demonstrate that the proposed discovery relates to an issue in the proceeding or that a special circumstance exists warranting the making of the discovery order.[22]

43 As in Harris v Bennett (No 3),[23] the defendants in this proceeding make no special claim on the deceased other than their relationship and that they have adequate resources on which to live and will have adequate resources in respect of any order the Court may pronounce in favour of the plaintiffs. The Court in the present proceeding will not be required to have regard to the defendants’ financial resources or needs.

44 The plaintiffs submit that the inter vivos benefits received by the defendants are relevant to this proceeding. If relevant, I consider the affidavit material before the Court is adequate to ventilate this issue at trial. As noted in Borthwick’s case, in ordinary litigation, the rules of discovery may permit an order requiring the defendants to provide discovery of the 16 categories of documents. But in this jurisdiction, there must be more than just relevance. There must be special circumstances. The plaintiffs’ application is premised on no more than a possible train of enquiry. A careful consideration of the plaintiffs’ affidavits does not demonstrate a clear link between the issues raised and the documents sought.

45 The defendants’ sworn affidavits go to the establishment of the various business entities, the control and ownership of those entities and the parties’ respective contributions. At trial, the defendants can be crossexamined if there is doubt as to their sworn evidence. This case, as many Part IV claims under the Act, raises issues about relationships and questions of benefits given by the deceased testator. However, as Harper J noted in Blair v Blair,[24] the Court cannot entertain orders requiring the examination of financial resources of every beneficiary of every estate upon which a claim is made under Part IV of the Act. An order for discovery in the form sought by the plaintiffs has the real risk of wasting time, money and other resources. Any order for discovery in a Part IV claim or in any civil litigation must balance the benefit the discovery may provide against the potential cost and delay to the litigation. I do not consider the making of an order for discovery in the terms sought by the plaintiffs will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible.

46 Given the peripheral nature of the issue of “benefit” in this claim, and the likelihood that discovery on such a significant scale as sought by the plaintiffs is unlikely to provide information that is of real forensic value, an order for discovery in the terms sought would be inappropriate.

47 I do not consider it appropriate for the defendants to be ordered to embark on an discovery onerous task given the relative value, if any, that such documents may provide to this litigation. As noted on numerous occasions, discovery is ordered in this jurisdiction if there are special circumstances, not just an arousal of suspicion between family members involved in emotionally charged litigation.

48 Finally, while it is not possible for the Court to assess the accuracy of Mr Watson’s estimates of increased cost and delay that the discovery would impose, common sense tells us that discovery of the 16 categories of documents would inevitably lead to increased cost and delay.

49 The discovery application has been brought very late in the proceeding. I do not consider it would be in the interests of justice to allow such an order.

50 Accordingly, I dismiss the plaintiffs’ application for discovery.

51 I will hear the parties on costs.

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^[1] Reed v Reed [2001] VSC 54; Harris v Bennet (No 3)  [2004] VSC 171 ; [2004] 8 VR 425; Re Borthwick; Borthwick v Beauvais [1948] Ch 645; Blair v Blair [2002] VSC 131.

^[2] No 3  [2004] VSC 171 ; [2004] 8 VR 425 at  [29]  and [43].

^[3] [1948] Ch 645.

^[4] Ibid at 648 per Lord Greene MR. See also Blair v Blair [2002] VSC 131 at [2] per Harper J.

^[5] [2002] VSC 131.

^[6]  [2004] VSC 171. 

^[7]  [2004] VSC 171 , [50].

^[8] Ibid, [51].

^[9] [2001] VSC 54 .

^[10] Reed v Reed [2001] VSC 54, [37] and [38].

^[11] Victorian Law Reform Commission, Civil Justice Review, Report No 14 (2008).

^[12] Australian Law Reform Commission, Managing Discovery: Discovery of Documents in Federal Courts, Report No 5 (2011).

^[13] Civil Procedure Act 2010 (Vic) s 7.

^[14]  [2004] VSC 171. 

^[15] Plaintiffs’ outline of submissions at paragraphs 12 and 13.

^[16] Plaintiffs’ outline of submissions at paragraph 13.

^[17] Carey v Robson [2009] NSWSC 114.

^[18] Affidavit of Connie Zurcas dated 17 November 2010 at [3].

^[19] Ibid at [6].

^[20] Ibid at [6].

^[21] Defendants’ written submissions paragraph 9.

^[22] Harris v Bennet (No 3)  [2004] VSC 171  at  [11] -  [14] .

^[23] Ibid.

^[24] [2002] VSC 131 at [2]- [3].