Re Chomley [2014] VSC 220

The deceased was survived by 3 children (Alistair, Michael and Sally) who were granted administration of her estate.

The deceased had an estimated estate worth $1.2 million which included a property in Glenmaggie worth $770,000.   

All of the children agreed to sell the property at public auction.  Alistair and Michael were interested in purchasing it from the estate.  Sally, however, disagreed with this, saying the ‘self-dealing rule’ prohibited any of the children from purchasing the property.

Alistair sought a declaration in the Supreme Court of Victoria that each of the children be allowed at liberty to bid at the auction.

The Court refused to allow any of the children to bid at the auction. Justice McMillan found that there was a clear conflict between the interest and duty of the children who were administrators of the estate and who also wished to purchase the property.

Justice McMillan also ordered Alistair to pay Sally’s costs. In making this determination, it was observed that the application was in truth motivated by Alistair’s own desire to purchase the property.   

A Will can give an executor an option to purchase estate property, if this is the intention of the will maker.