MARKAS SALKONOVIC [2025] SASC 101

Applicant: MARKAS SALKONOVIC Counsel: MR G EDMONDS-WILSON KC - Solicitor: O’DEA LAWYERS George Constantine Polites: Counsel: MR RJ WHITINGTON KC WITH MR T MCFARLANE - Solicitor: GRIFFINS LAWYERS Hearing Date/s: 14/01/2025 File No/s: PROB-24-007927 B SUPREME COURT OF SOUTH AUSTRALIA (Testamentary Causes Jurisdiction) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. In the Estate of FLORENCE GEMENIS POLITES SALKANOVIC v POLITES (No 2) [2025] SASC 101 Judgment of the Honourable Justice Stanley 18 June 2025 SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - GRANTS OF PROBATE AND LETTERS OF ADMINISTRATION - LIMITED, SPECIAL AND CONDITIONAL GRANTS OF PROBATE AND ADMINISTRATION SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - JURISDICTION AND DISCRETION OF COURT - SOUTH AUSTRALIA PROCEDURE - STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY - INHERENT AND GENERAL STATUTORY POWERS - TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY Florence Gemenis Polites (the deceased) died on 5 March 2024. The applicant, Markas Salkanovic, is the grandson of the deceased and a beneficiary of her estate. The respondent, the deceased’s son, is the named executor under the will. On 13 December 2024 the respondent filed a notice of appeal against the orders made by the Court on 10 December 2024. Those orders appointed Sarah Hooper as administrator ad colligenda bona of the estate of the deceased and refused the respondent’s application for security for costs. On 16 December 2024 the respondent applied to the Court for a partial stay of the orders made by the Court on 10 December 2024 pending the determination of the appeal. On 20 December 2024 the Court made an interim order pending the hearing and determination of the executor’s stay application. The appeal is considered arguable for the purpose of the stay application. In support of the stay application the executor made several submissions, one being that the sole “urgent” purpose in which a grant of letters of administration ad colligenda bona was sought by the applicant was to enable the bringing of a claim for further provision of the estate under the Inheritance (Family Provision) Act 1972 (SA) (IFP Act), prior to its repeal by the Succession Act 2023 (SA) on 1 January 2025. The executor raised concerns as to the anticipated expenditure of time and cost, and -- 1 of 11 -- the risk to confidentiality in responding to a potential claim. The applicant opposed the executor’s submissions. The Court has a discretionary power to order a stay of execution of a judgment pending the hearing and determination of an appeal both under its inherent jurisdiction and as expressly provided for under r 12.1(1)(o) and r 215.4(1) of the Uniform Civil Rules 2020 (SA) (UCR) and s 17 of the Enforcement of Judgments Act 1991 (SA). In considering such an application the Court is required to evaluate whether the balance of convenience favours the granting of the stay, including whether the refusal of the stay would result in a risk of significant prejudice to the applicant, which could not be remedied by a successful appeal. Held, dismissing the respondent’s application for a partial stay and revoking the interim stay orders made on 20 December 2024, save and except order 3: 1. An order to stay a decision pending appeal is not appropriate in circumstances where an applicant for a stay fails to identify a real risk of prejudice of some significance being suffered if a stay was not granted, which prejudice could not be redressed by a successful appeal. 2. Where there is a failure to identify the nature of private “matters”, a desire to conduct affairs in private and on a confidential basis without evidence that establishes a real risk following disclosure to third parties or to the public generally is not a proper basis for the stay sought. 3. The executor’s interests in other capacities is not a relevant consideration to be weighed in the assessment of the balance of convenience on the application for a stay pending the hearing and determination of the appeal. The executor is bound to take the steps necessary for the due administration of the deceased’s estate, and where the executor is unable or unwilling to do so, an administrator is required to do no more than the executor was obliged to do. 4. An interest in avoiding the time and cost involved in responding to an administrator’s inquiries and investigations does not detract from the duty of an administrator to undertake such inquiries and investigations, and in the circumstances is not a proper basis upon which to grant a stay pending the hearing and determination of the appeal where those investigations and inquiries are necessary in the timely and due administration of the estate. Enforcement of Judgments Act 1991 (SA) s 17; Uniform Civil Rules 2020 (SA) r 12.1(1)(o) and r 215.4(1), referred to. Atkins v Australian Broadcasting Corporation [2024] SASCA 96; Teachers Registration Board of South Australia v Kourlas [2024] SASCA 88; Salkanovic v Polites [2025] SASC 86, discussed. Harris Scarfe Ltd (Receivers and Managers Appointed) (In Liq) & Ors v Ernst & Young & Ors (No.2) [2005] SASC 16; Playford Vineyard Pty Ltd v Wishford Nominees Pty Ltd (No 2) [2018] SASC 152; Roberts v Roberts [2021] SASCA 81; Ryan v Urban Construct (SA) Pty Ltd (No 2) [2012] SASC 193, considered. -- 2 of 11 -- In the Estate of FLORENCE GEMENIS POLITES SALKANOVIC v POLITES (No 2) [2025] SASC 101 Testamentary causes jurisdiction STANLEY J: Introduction 1 On 10 December 2024 the Court made orders on the application of Markas Salkanovic appointing Sarah Hooper as administrator ad colligenda bona of the Estate of Florence Gemenis Polites (deceased) and refusing the application for security for costs made by the executor of her estate, George Polites (the executor). 2 The executor opposed the application for the appointment of the administrator ad colligenda bona. 3 The basis of the opposition was that the estate had already been fully administered by the executor; and that the estate was insolvent. 4 The order appointing Ms Hooper as administrator was made on 10 December 2024 for the limited purposes set out in paragraphs 2 and 3 of the orders. It provided: 1. Sarah Hooper of Track Legal, 73 Magill Road Stepney South Australia, legal practitioner, be appointed as administrator ad colligenda bona of the estate of Florence Gemenis Polites deceased late of 80 Moseley Street Glenelg South South Australia 5045 (“the deceased”) and that the appointment of the administrator ad colligenda bona take effect on the making of this order and the powers granted to the administrator ad colligenda bona by this order are effective upon the making of this order. 2. Sarah Hooper is directed to obtain a grant of letters of administration ad colligenda bona as soon as practicable after the date of this order and the Registrar of Probates is directed to issue a grant of letters of administration ad colligenda bona to Sarah Hooper upon an application in suitable form being received by her. 3. The appointment of Sarah Hooper as administrator ad colligenda bona is limited for the purposes only of: a. Collecting getting in and receiving all of the personal estate of the deceased as at the date of death of the deceased and doing such acts as may be necessary or proper for the preservation of the same; b. Doing such acts as may be necessary or proper to investigate and make inquiries about and determine the property comprising the personal estate of the deceased as at the date of death of the deceased; c. Doing such acts as may be necessary or proper to investigate and make inquiries about and determine the value of the personal estate of the deceased as at the date of death of the deceased; -- 3 of 11 -- [2025] SASC 101 Stanley J 2 d. Doing such acts as may be necessary or proper to investigate and make inquiries about and determine the liabilities of the deceased as at the date of death of the deceased; e. Doing such acts as may be necessary or proper to investigate and make inquiries about whether the deceased was indebted to Nominated Manager Limited as at the date of death of the deceased and, if so, the amount of such indebtedness; and limited until further representation be granted but no further or otherwise. 4. Sarah Hooper is to be remunerated for all work undertaken by her in relation to the estate of the deceased, whether in the ordinary course of her profession or business or not, with such remuneration to be allowed in accordance with the Higher Courts costs scale in Part 2 of Schedule 6 of the Uniform Civil Rules 2020 and paid from the assets comprising the estate of the deceased. 5. The administrator ad colligenda bona and the parties be at liberty to apply further herein from time to time. 5 The Court made the order for the appointment of Ms Hooper on the basis that it would publish reasons for doing so later. Those reasons were published on 30 May 2025.1 6 The respondent additionally sought an order for security for costs in an amount of $25,000 and for the proceedings to be stayed until such time as payment was made. That application was opposed by the applicant. 7 For reasons published on 30 May 2025 I refused to make the order for security for costs.2 8 On 13 December 2024 the respondent filed a notice of appeal against the orders made by the Court on 10 December 2024. 9 On 16 December 2024 by way of email correspondence to my chambers the respondent applied to the Court for a partial stay of the orders made by the Court on 10 December 2024 pending the hearing and determination of his appeal from those orders. Mr Griffin deposed various matters in his fifth affidavit sworn on 19 December 2024 relevant to and in support of the stay application. He gave evidence that by dint of having acted for the executor and various entities in the Group for more than 10 years he has obtained a detailed working knowledge of the Group, its structure and affairs and those of the executor and various other members of the Polites family, including the deceased.3 However, much of the fifth affidavit appears to have been made on the basis of information and belief,4 or matters he anticipates occurring in the future.5 1 Salkanovic v Polites [2025] SASC 86. 2 Salkanovic v Polites [2025] SASC 86 at [19]. 3 See affidavit of Gregory Michael Griffin made on 19 December 2024 at [6]. 4 See affidavit of Gregory Michael Griffin made on 19 December 2024 at [12]-[13]. 5 See affidavit of Gregory Michael Griffin made on 19 December 2024 at [10] – [11]. -- 4 of 11 -- [2025] SASC 101 Stanley J 3 10 On 20 December 2024 the Court made an interim order pending the hearing and determination of the executor’s stay application on 14 January 2025. The interim order was in the following terms: 1. Subject to Ms Sarah Hooper obtaining any grant of letters of administration ad colligenda bona in respect of the estate of the testator Florence Gemenis Polites (Estate), the orders made by the Honourable Justice Stanley on 10 December 2024 be stayed on an interim basis and until further order, save and except that Ms Hooper be entitled upon obtaining a grant as aforesaid to accept service of any proceedings instituted by the Applicant under the Inheritance (Family Provision) Act 1972 (SA) for further provision out of the Estate. 2. For avoidance of doubt, in the event of Ms Hooper obtaining a grant as aforesaid or order 1 of the orders on 10 December 2024 operating without more as a grant as aforesaid, such grant is not to take effect except on the basis provided in order 1 hereof. 3. Liberty to apply. Principles applicable to an application for a stay pending appeal 11 An appeal does not operate automatically to stay execution of a judgment pending appeal. However, upon application, the Court may grant a stay for any proper reason and on such terms as are considered appropriate in the circumstances. An appeal may constitute such a proper reason for granting a stay.6 However, as the Court of Appeal has recently observed in Atkins v Australian Broadcasting Corporation,7 the Court is reluctant to grant leave to appeal against interlocutory orders that do not, whether directly or by their practical effect, finally determine the substantive rights of the applicant seeking leave.8 12 The onus lies on the respondent to establish that a stay should be granted in the interests of justice.9 The Court has a discretionary power to order a stay of execution of a judgment pending the hearing and determination of an appeal both under its inherent jurisdiction and as expressly provided for under r 12.1(1)(o) and r 215.4(1) of the Uniform Civil Rules 2020 (SA) (UCR) and s 17 of the Enforcement of Judgments Act 1991 (SA). 13 Recently in Teachers Registration Board of South Australia v Kourlas,10 Livesey ACJ observed:11 The discretion to order a stay is not fettered by the use of adjectives such as “special” or “exceptional”. The Court will ordinarily act in the interests of justice, endeavouring to fairly balance the interests of the parties having regard to the balance of convenience. In 6 Playford Vineyard Pty Ltd v Wishford Nominees Pty Ltd (No 2) [2018] SASC 152 at [20]. 7 [2024] SASCA 96 at [25]. 8 Harris Scarfe Ltd (Receivers and Managers Appointed) (In Liq) & Ors v Ernst & Young & Ors (No.2) [2005] SASC 168 at [14] citing Niemann v Electronic Industries Ltd [1978] VR 431; Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170. 9 Roberts v Roberts [2021] SASCA 81 at [17]. 10 [2024] SASCA 88. 11 [2024] SASCA 88 at [8]-[9]. -- 5 of 11 -- [2025] SASC 101 Stanley J 4 many cases, the applicant seeking a stay must demonstrate serious issues for determination on appeal, together with the real risk of irreparable prejudice or damage if a stay is not granted and the appeal succeeds. Whilst it is conventional to address a stay by asking whether the appeal raises serious issues, whether prejudice will be sustained if the stay is not granted, together with the balance of convenience, these considerations are neither immutable nor to be considered in isolation. They are inter-dependent. An apparently strong appeal may justify a stay even where there is scant evidence of prejudice or the balance of convenience is evenly poised. By contrast, even if there are doubts about appeal prospects a stay may be appropriate where the balance of convenience strongly favours it. [citation omitted]. 14 Usually an applicant for a stay will need to show that the appeal raises serious issues for determination and that there is a real risk of prejudice of some significance being suffered if a stay was not granted, which prejudice could not be redressed by a successful appeal.12 15 In considering the balance of convenience, an important consideration is that a successful appellant ought not be deprived of the fruits of a successful appeal.13 Conversely, the Court should be satisfied that the appeal mechanism is not being used as an instrument of oppression or merely as a delaying tactic.14 Merits of appeal 16 The executor has been significantly hamstrung in fully articulating the grounds of appeal in the absence of published reasons and out of deference to the Court has not attempted to do so. Be that as it may, he submits that in light of the submissions made and the evidence before the Court at the hearing on 10 December 2024 there are likely to be credible and arguable grounds of appeal available and serious issues for determination in respect of any challenge to the orders made. The executor seeks to rely on the fifth affidavit of Mr Griffin. For the purpose of this application I am prepared to proceed on the basis that the appeal is arguable. Balance of convenience - prejudice to applicant 17 The executor submits that there is no prejudice to the applicant by reason of the proposed stay of the Court’s orders of 10 December 2024 pending the hearing and determination of his appeal from those orders. 18 The executor submits that the intended purpose of the application for an appointment of an administrator ad colligenda bona by the applicant was solely to 12 Ryan v Urban Construct (SA) Pty Ltd (No 2) [2012] SASC 193 at [18], (2012) 114 SASR 410 at 415; Food and Beverage Australia v P J Nash Pty Ltd (No.2 ) [2020] SASC 82. 13 Playford Vineyard Pty Ltd v Wishford Nominees Pty Ltd [2018] SASC 152 at [22]. 14 Playford Vineyard Pty Ltd v Wishford Nominees Pty Ltd [2018] SASC 152 at [23]. -- 6 of 11 -- [2025] SASC 101 Stanley J 5 provide the basis for a claim to be made under the IFP Act prior to the repeal of that Act on 1 January 2025. 19 The executor submits that so much was made clear by paragraphs 59-68 of the applicant’s affidavit of 3 October 202415 and as put to the Court at the hearing on 18 November 2024 before the Registrar of Probates. 20 The executor submits that the only urgency identified by the applicant in respect of the application was to overcome the risk that any claim for provision out of the estate of the deceased would not have survived the repeal of the IFP Act on 1 January 2025.That contention ignores the submissions made by the applicant on the hearing of his application on 10 December 2024 that the evidence of the executor’s failure to perform his duties as executor to protect the assets of the deceased’s estate provided a further basis for urgent action to be taken by the Court to appoint an administrator ad colligenda bona. 21 The executor further submits that under the partial stay granted by the Court Ms Hooper was able to apply for a grant of letters of administration ad colligenda bona in accordance with order 2 of the interim stay orders made 20 December 2024 which allowed the applicant to file a claim for provision under the IFP Act. 22 In the meantime the executor has given an undertaking in support of the proposed stay, not to transfer, deal with or diminish the value of the shares other that in the ordinary course of business. Balance of convenience - prejudice to executor 23 In his fifth affidavit Mr Griffin deposes that to the extent that the administrator, Ms Hooper, is to undertake investigations and inquiries into the shares of the Group held by the deceased’s estate and their value as at the date of death, it is anticipated that this will be a time consuming and costly exercise for the Group.16 Mr Griffin also deposes that he anticipates the same would be the case in respect of any investigations to be undertaken by the administrator prior to the determination of the appeal in relation to the liabilities of the deceased at the time of her death concerning the alleged outstanding loan account to Nominated Manager Ltd and to the account called Gem Holdings Pty Ltd M3 account.17 24 Mr Griffin further deposes to a concern that the time and resources involved in having to respond to any investigations to be carried out by the administrator prior to the determination of the appeal would be a considerable imposition on the Group, and that Mr Polites as the effective controller of the Group wants to avoid “the time and cost” involved in responding to any investigations, including in relation to the liabilities of the deceased by way of an outstanding loan account to Nominated Manager Ltd. 15 Affidavit of Markas Salkanovic sworn 3 October 2024. 16 Affidavit of Gregory Michael Griffin sworn 19 December 2024 at [10]. 17 Affidavit of Gregory Michael Griffin sworn 19 December 2024 at [11]. -- 7 of 11 -- [2025] SASC 101 Stanley J 6 25 The final concern expressed by Mr Griffin is that the executor holds a concern “on behalf of the Group” about certain unspecified matters being made public and disclosure being given to third parties once the administrator commences her investigations and inquiries should that occur before the hearing and determination of the appeal.18 26 It appears from the submissions made before me that the executor is concerned that if the administrator was to commence an investigation into the affairs of the Group connected with the estate there is a real possibility she would have to disclose the subject matter to the applicant and to the Court, including in the context of the likely IFP proceedings in due course and the otherwise confidential information of the Group could, as a result, enter the public domain. The executor submits any loss of confidentiality in the Group’s affairs, once it occurs, is not something that could then be unwound were the respondent to succeed on appeal. A submission was put that any access to confidential information and materials belonging to the Group potentially opens the door to other parties, presumably including Marcus and Alex Polites, the sons of the executor, getting access to the same and it forming part of the public record. 27 Mr Griffin also expressed a concern on behalf of the executor that in the event that the appeal was successful the executor would be unable to recover costs incurred by him or the Group in responding to the administrator’s investigations or in relation to the IFP proceedings. 28 The submission that there would be considerable imposition on the Group’s time and resources in having to respond to any investigation by the administrator is not made out on the evidence before the Court. The submission is contrary to Mr Griffin’s evidence that the shareholdings of the deceased and their value at the date of death were already determined by the Leadenhall valuation.19 I accept the submission of the applicant that if that is so, the time and resources required by the executor in responding to any inquiries by the administrator would appear likely to be minimal. 29 I do not accept the executor’s submission that considerable time and resources will have to be devoted to responding to any investigations by the administrator into the outstanding loan account to Nominated Manager Ltd. This is a statement of bare assertion. No evidence or explanation is advanced to support this submission. On the contrary, Mr Griffin gave evidence that at the date of death of the deceased she was indebted to the Ambassador’s Trust in the amount of $4,431,293.04. I accept the submission of the applicant that to have identified the indebtedness of the deceased’s estate in that precise amount must have involved the identification and consideration of documents, available to the executor, by which this indebtedness and its extent had been identified by him. If there was a 18 Affidavit of Gregory Michael Griffin sworn 19 December 2024 at [13]. 19 See the list of shareholdings of the deceased in Annexure B to the affidavit of Mr Griffin sworn 18 October 2024 which the executor has refused to disclose to the applicant. -- 8 of 11 -- [2025] SASC 101 Stanley J 7 loan account between the deceased and the trustee of the Ambassador’s Trust then I expect such loan account or accounts would have been recorded in the financial statements for the Trust for each financial year from 2010 when the deceased was allegedly being supported by the Polites Group using funds advanced by the Trust, until her death in 2024. I accept that it is improbable that the provision of presently existing documents evidencing a loan account would be a time consuming and costly exercise for the executor. 30 Mr Griffin also expresses concern about the time and resources required by the Group in responding to the administrator’s investigations concerning the deceased’s account known as Gem Holdings Pty Ltd M3 Account, the subject of clause 6 of the deceased’s will. 31 Even if such investigations, if undertaken by the administrator, does result in costs being incurred, I accept the applicant’s submission that any investigations by the administrator as to the existence or not of an asset of the deceased at the time of making her will, which meets that description, and what became of that asset between the making of the will and the death of the deceased, would involve doing no more than meeting the executor’s duty to account for the administration of the deceased’s estate. Doing so would include making investigations and inquiries as to the assets of the estate on request by the beneficiaries, particularly the applicant. 32 It appears from the available evidence that at no time has the executor addressed the relevant inquiries which he should have made in that regard. The fact that the administrator may wish to make the inquiries which the executor has failed to make is not a proper basis for the stay sought by him. 33 Likewise, as I have said, the concern of the executor, as the effective controller of the Group, to avoid the time and cost involved in responding to the administrator’s inquiries and investigations is not a valid basis for the grant of the stay pending the hearing and determination of the appeal. The executor is bound to take the steps necessary for the due administration of the deceased’s estate. The financial cost involved may be a concern of the Group, but these concerns are not obviously a reason for the executor to neglect or avoid the performance of his executorial duties. Whatever might be in the interests of the Group, they do not justify the executor avoiding taking those steps necessary for the due administration of the estate before the appeal is heard and determined. Those steps would have been required regardless of whether it was the executor or an administrator administering the estate. 34 Finally, the concern that the executor holds “on behalf of the Group” about unspecified matters being made public and disclosure given to third parties if the administrator commences her investigations and inquiries before the hearing and determination of the appeal, is not a proper basis upon which to grant a stay having regard to the balance of convenience and evidence of actual prejudice to the executor. -- 9 of 11 -- [2025] SASC 101 Stanley J 8 35 The executor’s desire to conduct the Group’s affairs in private and on a confidential basis does not detract from the duty of the administrator to undertake such inquiries and investigations she considers necessary. 36 The evidence before me does not establish a real risk that, if the administrator commences inquiries and investigations before the hearing and determination of the appeal, materials or information of the Group, which are presently not publicly available, would be disclosed to third parties or to the public generally. The evidence does not establish any rational basis for the existence of a risk that disclosure of evidence relevant to the deceased’s estate and its alleged insolvency would be made public if disclosed to the administrator. In any event, I am not satisfied that such materials or information of this nature would not presently be amenable to disclosure to the applicant as a beneficiary with an interest in the proper administration of the deceased’s estate. However, if there are materials or information which the administrator might be interested in, the executor could always bring an application to the Court seeking protective orders to prevent such materials or information from unjustified disclosure by the administrator. 37 These concerns are opaque given the failure to identify the nature of the private “matters” which apparently concern the executor. The circumstances necessarily arouse a suspicion that the “matters” of which the executor is concerned will be made public are matters to do with the interests of the Group rather than the administration of the deceased’s estate. Accepting, for the moment, that the executor holds legitimate concerns related to disclosure of materials and confidential information on behalf of the Group, that would not be a proper basis for the stay sought. I accept the submission of the applicant that consideration of the balance of convenience on the stay application does not extend to weighing interests of the Group companies. To the extent that the administrator is entitled to obtain information and materials from the Group companies relating to assets held by the deceased at the time of her death, and concerning the value of those assets, the duties which the administrator has to undertake and her corresponding entitlement as the administrator, simply mirror the existing duties and obligations of the executor. The administrator is required to do no more than the executor was obliged to do but is unable or unwilling to do. 38 The administrator has duties to perform in relation to the deceased’s estate in the interests of the due administration of the estate and for the benefit of the beneficiaries of the estate and all persons who may have claims in relation to the estate, which depends on its due administration. The executor’s interests in other capacities, or the interests of the Group companies, do not form any of the matters to be weighed in the assessment of the balance of convenience on the application for a stay pending the hearing and determination of the appeal. 39 The executor has failed to identify a real risk of irreparable prejudice or damage of a relevant kind if a stay is not granted and the appeal succeeds. -- 10 of 11 -- [2025] SASC 101 Stanley J 9 40 On this basis, even allowing that the executor has an arguable case on the merits of his appeal, the balance of convenience does not favour the stay sought by him pending the hearing and determination of the appeal. I am reinforced in this conclusion by the fact that the executor’s appeal is listed for hearing before the Court of Appeal in September. This renders it a real risk the appeal will not be decided this year. Conclusion 41 For these reasons I dismiss the respondent’s application for a stay of my decision of 10 December 2024 pending appeal. Accordingly, I would revoke the interim stay orders made by me on 20 December 2024,20 save and except order 3. 42 I will hear the parties as to costs. 20 FDN 25. -- 11 of 11 --