Baggaley v Richards

Case •

[2023] NSWSC 1262

•

26 October 2023

No judgment structure available for this case.

Supreme Court


New South Wales

Medium Neutral Citation: Baggaley v Richards [2023] NSWSC 1262
Hearing dates: 14, 16 and 22 August 2023
Date of orders: 26 October 2023
Decision date: 26 October 2023
Jurisdiction:Equity
Before: Robb J
Decision:

The Court's orders are:

(1) Order the defendant to pay to the plaintiff $4,841.55 in compliance with order 9 made by the Court in these proceedings on 25 May 2022.

(2) Order the defendant to pay the plaintiff's costs of securing compliance by the defendant with orders 5(a) and 6 made by the Court on 25 May 2022, as well as his costs of the notice of motion filed on 10 August 2023.

Catchwords:

COSTS – party/party – notice of motion – where defendant unilaterally refused to comply with settlement orders that a refundable accommodation deposit be paid to an aged care facility – where parties subsequently entered into deed of settlement – where plaintiff’s daughters gave personal guarantee that refundable accommodation deposit be repaid to defendant upon plaintiff’s death out of filial duty rather than legal obligation – defendant to pay plaintiff’s costs despite achieving defendant’s desired outcome

CIVIL PROCEDURE – whether a lacuna existed in orders made for disposal of the proceedings – no lacuna found

CIVIL PROCEDURE – where settlement orders clear that interest payable if orders not complied with within 90 days – orders not complied with – interest payable by defendant to plaintiff

Legislation Cited:

Probate and Administration Act 1898 (NSW), ss 63(d), 84A

Succession Act 2006 (NSW), s 59

Cases Cited:

Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302

Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6

Category:Consequential orders
Parties: George Richard Baggaley (Plaintiff)
Kylie Richards (Defendant)
Representation:

Counsel:
M Pringle (Plaintiff)
J Hard (Defendant)

Solicitors:
Brander Smith McKnight Law (Plaintiff)
RN Legal (Defendant)
File Number(s): 2021/00291331
Publication restriction: Nil

JUDGMENT

  1. These reasons deal with residual issues arising out of a notice of motion filed by the plaintiff on 10 August 2023 in the Duty List.

  2. The plaintiff, George Richard Baggaley, commenced these proceedings to obtain an order for further family provision under s 59 of the Succession Act 2006 (NSW) against the defendant, Kylie Richards. The proceedings were settled by the parties and the settlement was effected by orders made by consent by Hallen J on 25 May 2022 (the settlement orders).

  3. The purpose of the plaintiff's notice of motion was to obtain orders to compel the defendant to implement a number of the settlement orders.

  4. I will provide an elaboration of the dispute below, but, in essence, one of the settlement orders had the effect that additional family provision would be provided to the plaintiff by way of a loan of $550,000, payable to an aged care facility nominated by the plaintiff to provide a Refundable Accommodation Deposit (RAD) to provide for his accommodation during his lifetime. The amount of the loan was repayable on the plaintiff's death, or his ceasing to need accommodation that required payment of a RAD. The settlement orders did not deal specifically with the manner in which the loan would be repaid. As it happened, the aged care facility nominated by the plaintiff advised that it would only repay the RAD to the plaintiff, or his estate in the event of his death, rather than it being repaid directly to the defendant. This arrangement was unsatisfactory to the defendant, who failed to pay the amount of the loan by the date specified in the settlement orders. The defendant sought to negotiate a repayment arrangement with the aged care facility that was satisfactory to herself. As the plaintiff had already been admitted to the aged care facility, he began to incur daily costs, and would eventually have been at risk of being forced to leave the aged care facility if the RAD was not paid.

The notice of motion

  1. In these circumstances, the plaintiff relevantly sought the following relief in his notice of motion:

1.    An order that the defendant pay the sum of $550,000 to Arcare Glenhaven to be applied to the plaintiff's refundable accommodation bond in accordance with Order 5(a) made on 25 May 2022.

2.    An order that the defendant is to pay interest calculated at 5.10% per annum on the sum of $550,000 from 14 June 2023 to the date of payment in full.

  1. In the alternative, the plaintiffs sought an order to enforce one of the settlement orders that required the defendant to sell a property owned by the relevant estate if she was in default of making the loan to the plaintiff in accordance with the settlement orders. In the events that have happened, it is not necessary to refer further to this alternative claim.

Resolution of the notice of motion

  1. The plaintiff's notice of motion came before me for hearing in the Duty List on 14, 16 and 22 August 2023. On the first of those days, I was informed that the parties were negotiating to resolve the dispute. On the second day, I was told that the parties had agreed the terms of a deed of loan (the deed) to resolve the dispute, but that the deed had not yet been executed by all parties. On the third day, I was told that the deed had been executed and the substance of the dispute had been resolved. The deed did not resolve the issue of the costs of the notice of motion and whether the defendant should be ordered to pay interest on the basis of her late payment of the $550,000 loan. I made orders for the filing of further evidence and submissions on the outstanding issues. These reasons deal with those issues.

The parties’ submissions

  1. The plaintiff relied on submissions dated 29 August 2023, and the affidavit in support of the notice of motion made by the plaintiff's solicitor on 9 August 2023.

  2. The defendant relied on submissions dated 5 September 2023, and the defendant's solicitor's affidavit made on 14 August 2023. The defendant also relied upon a receipt that established that she had paid the $550,000 to the aged care facility nominated by the plaintiff, Arcare Glenhaven (Arcare) on 17 August 2023. The defendant also provided to the Court a copy of the deed signed by the parties.

  3. In essence, the plaintiff submitted that the Court should order the defendant to pay to him interest in accordance with the relevant order in the settlement orders, and that it should also order the defendant to pay the plaintiff's costs of the notice of motion. The plaintiff submitted that his entitlement to both of those orders simply flowed from the fact that the defendant had contravened the orders by not making the loan by the time specified in the orders that was necessary to enable the plaintiff to satisfy his obligation to Arcare to pay the RAD.

  4. The defendant's submissions were slightly more complex. The defendant submitted that she had acted with promptness at all relevant times and tried to resolve the issue created by Arcare's position, but that the same could not be said of the plaintiff. The defendant submitted that the plaintiff should be ordered to pay her costs, and that she should not be ordered to pay any interest. In the alternative, the defendant submitted, the Court should not make any order for costs on the basis that each of the parties should be required to bear their own costs.

  5. The defendant relied upon a submission that an analysis of the terms of the deed executed by the parties demonstrated that the defendant had substantially succeeded in responding to the plaintiff's notice of motion, and that that outcome demonstrated that the defendant was the successful party, so she should be awarded an order for costs in her favour.

  6. Relying upon the judgment of McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624; [1997] HCA 6, the defendants submitted that, even though the plaintiff's notice of motion was compromised by the parties, the Court retained the ability to award costs, and that an order for costs should be made in her favour because she would almost certainly have succeeded if the matter had proceeded to the determination by the Court of the notice of motion. That was because the terms of the compromise of the notice of motion essentially vindicated the case advanced by the defendant: see Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302 at [5] per Davies AJA (Mason P and Meagher JA agreeing). The defendant submitted that she had succeeded in obtaining a substantial victory and the plaintiff had suffered a substantial loss. I will return to consider further aspects of the defendant's submissions on the issue of costs after I have considered the factual matters relevant to the dispute.

  7. On the issue of the plaintiff's claim for interest, the defendant submitted there should be no order for interest, on the basis that the loan of the $550,000 was to be interest-free, the delay in payment of 61 days was explained by what the defendant described as a lacuna in the settlement orders, and the need for the parties to resolve the lacuna. Finally, the defendants submitted that s 84A of the Probate and Administration Act 1898 (NSW), on which the order for interest was based, does not apply because it only applies to legacies or annuities, and not the $550,000 loan.

The settlement orders

  1. In order to explain the Court's reasons for the orders that it will make in respect of the residual issues, it will be necessary to set out the settlement orders made by Hallen J on 25 May 2022 in full, as follows:

THE COURT:

1. Orders, pursuant to s 91 Succession Act 2006 (NSW), that administration in respect of the estate of Jennifer Kay Richards (“the deceased”), be granted to the Defendant, for the purposes only of permitting the Plaintiff’s application for a family provision order to be dealt with.

2.    Orders that compliance with the Court Rules in relation to Order 1 above be dispensed with.

3. Orders, pursuant to Uniform Civil Procedure Rules 2005 (NSW), rule 7.10(2)(b), that the Defendant be appointed to represent the deceased’s estate for the purposes of these proceedings.

4.    Orders that any order entered, or made, in the proceedings binds the deceased’s estate to the same extent as the estate would have been bound had a personal representative of the deceased person to whom administration had been granted been a party to the proceedings.

5. Orders, pursuant to s 59 of the Succession Act, that the Plaintiff receive, by way of provision, out of the estate of the deceased:

a.    A lump sum of $550,000, by way of an interest-free loan, which lump sum shall be paid to such aged care facility as the Plaintiff directs as a Refundable Accommodation Deposit (RAD), to provide for his accommodation during his lifetime; and

b.    A lump sum of $80,000 absolutely.

6.    Orders that each lump sum referred to in Paragraph 5 above be paid within 90 days of the issue of the grant of Letters of Administration with the Will dated 22 December 1977 of the deceased annexed, to the Defendant.

7.    Notes the agreement of the parties that:

(a)    The Defendant will make an application for Letters of Administration with the deceased’s Will annexed within 14 days of the date of the making of these orders and notations.

(b)    The Defendant’s solicitors will inform the Plaintiff’s solicitors of the application for Letters of Administration with the deceased’s Will annexed, within 3 business days of the application having been made.

(c)    The Defendant’s solicitors will inform the Plaintiff’s solicitors of the application for Letters of Administration with the deceased’s Will annexed having been granted, within 3 business days of the application being granted.

(d)    The Plaintiff’s solicitors, within 7 days of being informed that Letters of Administration with the deceased’s Will annexed have been granted, will inform the Defendant’s solicitors of the identity of the aged care facility directed by the Plaintiff to which the RAD is to be provided and will provide a document signed by the Plaintiff that the RAD is to be repaid to the Defendant, as administrator of the deceased’s estate, when the Plaintiff permanently ceases to occupy the aged care facility which requires the payment of a RAD.

(e)    The lump sum provided by way of interest-free loan:

i.    may be transferred between aged care facilities in the event the Plaintiff requires higher level care in the future; and

ii.    shall be repaid to the Defendant as administrator of the deceased’s estate, when the Plaintiff permanently ceases to occupy an aged care facility which requires the payment of an RAD.

8.    Orders that the Plaintiff’s costs and disbursements of the proceedings, being a specified gross sum instead of assessed costs, agreed in sum of $80,000 (including GST), be paid out of the estate of the deceased.

9. Orders, that if each of the lump sums and the amount of the Plaintiff’s costs is not paid, respectively, within 90 days of the issue of the grant of Letters of Administration with the deceased’s Will annexed, to the Defendant, interest shall be paid on any unpaid part thereof, respectively, calculated at the rate provided by s 84A(3) of the Probate and Administration Act 1898 (NSW) from the 91st day after the grant, until it is paid in full.

10.    Orders the Defendant’s costs, calculated on the indemnity basis, of the proceedings, be paid, or retained, as the case may be, out of the deceased’s estate.

11.    Orders that the provision made for the Plaintiff be provided out of the residuary estate of the deceased.

12.    Notes that the Defendant and [another person], the two residuary beneficiaries named in the deceased’s Will each consents to these orders and notations.

13.    Notes the agreement of the parties that, in the event the Defendant does not comply with these orders, she will within 7 days after the date on which the payments are to be made, list, or cause to be listed, for sale, by public auction, the property situated at, and known as, [property identified] and from the proceeds of sale, will make payment of any outstanding lump sums not otherwise paid pursuant to these orders and any interest payable thereon.

14.   Grants liberty to any party to apply, in these proceedings, for consequential, and ancillary, orders, for the purpose of, or with respect to, giving effect to, and implementing, the family provision orders made in favour of the Plaintiff.

15.    Notes the agreement of the parties that:

(a)    The application was made within time

(b)    The Plaintiff is an eligible person;

(c)    The Plaintiff has served a notice identifying all other eligible persons on the administrator at the time of serving the Summons;

(d)    The administrator has filed the administrator’s affidavit and the affidavit of service of the notice of the Plaintiff's claim on any person who, in the administrator's opinion, is, or who may be, an eligible person, as well as upon any person beneficially entitled to the distributable estate, and any person holding property of the estate as trustee or otherwise;

(e)    The administrator has filed an Appearance.

  1. The following considerations arising out of the terms of the settlement orders are relevant to the resolution of this dispute:

  1. Order 5(a) required the defendant to make further provision for the plaintiff out of the estate of the deceased pursuant to s 59 of the Succession Act by way of a lump sum of $550,000. That lump sum was to be in the form of an interest-free loan. Though a loan, it was to have the character of a lump sum for further provision, and was not a bare loan. Although the defendant was ordered to pay the amount of the loan to the aged care facility nominated by the plaintiff, it was still a loan to the plaintiff and not a loan to the aged care facility.

  2. By order 6, the lump sum loan was to be paid within 90 days of the grant of letters of administration with the will of the deceased annexed to the defendant. The parties are agreed that the steps that the orders required the parties to take to trigger the obligation of the defendant to pay the lump sum by way of loan occurred.

  3. As noted, the defendant asserted that the payment was made 61 days late (see par 14 of her written submissions). The plaintiffs submitted that the delay was 63 days (see par 21). The plaintiff submitted that the applicable interest rate was 5.10% per annum and that the amount of interest payable was therefore $4,841.55. As the difference between the parties is de minimus, and the defendant did not specifically challenge the calculation made by the plaintiff, I intend to accept it.

  4. Order 7(e)(ii) simply required that the interest free loan was to be repaid to the defendant when the plaintiff permanently ceased to occupy an aged care facility which required the payment of a RAD. By itself, that order would simply impose upon the plaintiff or his estate a personal obligation to repay the loan to the defendant. However, it is to be noted that order 7(d) required the plaintiff to provide to the defendant a direction signed by the plaintiff that the RAD was to be repaid to the defendant when the plaintiff permanently ceases to occupy an aged care facility that required the payment of a RAD. This order appears to have contemplated that the plaintiff would sign a direction that would have the effect that the aged care facility would repay the amount of the loan directly to the defendant.

  5. The settlement orders, reflecting the compromise between the parties, provided in order 6, order 7(b), order 7(d) and order 13 that specific steps that the orders required the parties to take would be performed within stipulated (mostly short) time periods. However, order 7(e)(ii) did not stipulate any timeframe for the repayment of the loan by the plaintiff to the defendant after the date when the plaintiff permanently ceased to occupy an aged care facility that required the payment of a RAD. That circumstance is likely to have reflected the fact that, at the date the settlement orders were made, the parties were not in a position to specify how long it would take for the plaintiff to be able to repay the loan, as that would require the aged care facility to satisfy itself that, under its agreement with the plaintiff, it was required to repay the RAD. It is likely that order 7(e)(ii) was subject to an implication that the plaintiff or his estate would take the steps necessary to repay the loan within a reasonable time.

  6. Order 9 imposed on the defendant an obligation to pay interest if the lump sum was not paid within 90 days of the grant of letters of administration, from the 91st day after the grant, until it was paid in full. The 90 days was to run from the date of the grant of letters of administration, not any other date for compliance with any of the settlement orders. The obligation to pay interest was imposed by order 9, not by s 84A(3) of the Probate and Administration Act. That Act was only relevant insofar as the interest rate provided by the named section was to be the rate of interest payable under the order. The defendant's submission that interest cannot be ordered because the loan is not a legacy or an annuity is misconceived, because the obligation arises under the order and not under the Act.

  7. Importantly, by order 14, the parties were given liberty to apply for consequential and ancillary orders for the purpose of giving effect to the settlement orders.

The deed

  1. It will now be convenient to consider the relevant terms of the deed, which has obviated the need for the Court to decide the plaintiff's claims for relief in his notice of motion. Relevantly:

  1. The parties to the deed are the plaintiff, the defendant, and the plaintiff's two daughters, who are apparently his attorneys.

  2. By clause 2, the plaintiff acknowledged that the lump sum of $550,000, to be paid from the deceased's estate to the plaintiff and held by Arcare as a RAD, was to be repaid to the deceased's estate when the plaintiff permanently ceased to occupy an aged care facility which required the payment of a RAD or upon his death (whichever was the earlier). This date was defined as “the Repayment Date”.

  1. Clause 3 then provided:

3.    [The plaintiff's daughters] hereby:

(a)    acknowledge that upon the Repayment Date they are jointly and severally liable for the repayment of the $550,000;

(b)    unconditionally and irrevocably guarantee to the Defendant the payment of the $550,000 on the Repayment Date; and

(c)    as a separate and additional liability under this Deed indemnify the Defendant for any losses, damages, costs, charges and expenses which the Defendant at any time may suffer or incur, whether directly or indirectly, in recovering the $550,000 or any part of it.

  1. By clause 7, the parties agreed to provide a copy of the deed and an irrevocable direction in the terms of annexure A to the deed to Arcare, and to any other aged care facility to which a RAD must be paid on the plaintiff's behalf. The draft irrevocable direction was to be signed by all four parties and it directed Arcare to pay the $550,000 directly to the defendant.

  1. It will be noted that, to the extent that the settlement orders may have been ambiguous as to whether the $550,000 would be paid by the aged care facility directly to the defendant, and whether the obligation on the aged care facility to make that payment would fall due precisely on the day when the plaintiff ceased to occupy the aged care facility, the deed secured for the defendant the right to repayment on the Repayment Date. Furthermore, the deed secured to the defendant a guarantee by the plaintiff's daughters to be personally liable to ensure repayment on the Repayment Date, together with any losses, etc, incurred by the defendant in recovering the $550,000 or any part of it. It is clear that on no view did the settlement orders oblige the plaintiff's daughters to undertake these liabilities.

Background

  1. I do not think it is necessary for the Court to review in precise detail the relatively extensive correspondence between the parties concerning the implementation of orders 5(a) and 6 of the settlement orders. It is clear, in my view, that the defendant's submission that it was the plaintiff rather than her that was dilatory is entirely unsustainable. An unjustifiable number of communications from the plaintiff's solicitor to the defendant's solicitor were either not responded to or were responded to after considerable delay. That delay is not, however, particularly material, save that it in part was responsible for the delay in the defendant paying the $550,000 to Arcare, which may have the effect of increasing the amount of interest payable by the defendant under order 9 of the settlement orders.

  2. After the elapse of some time, it became apparent from the defendant's solicitor's correspondence with the plaintiff's solicitor that the defendant had discovered that Arcare was not willing to repay the amount of the $550,000 RAD directly to the defendant in the event of the plaintiff's death while residing at its aged care facility. On 9 June 2023, the defendant's solicitor advised the plaintiff's solicitor that the defendant was liaising directly with Arcare to negotiate an arrangement satisfactory to herself.

  3. This was in the context that, starting on 24 March 2023, the defendant's solicitor advised the plaintiff's solicitor that letters of administration had been granted to the defendant, and that the defendant's intention was to comply strictly with the settlement orders. The plaintiff's solicitors nominated Arcare on 24 March 2023 and provided account details for the payment of the $550,000.

  4. Commencing in about April 2023, there appear to have been negotiations between the parties' solicitors as to the terms of a deed of loan to be executed by the parties. The Court cannot be sure when this correspondence began, because the earliest correspondence on the subject, an email from the plaintiff's solicitor to the defendant's solicitor dated 20 April 2023, simply says: "Please see attached for your review", with the attachment not being in evidence. It is sufficient to note that, on 30 May 2023, the plaintiff's solicitor provided the defendant's solicitor with a deed of loan signed by the plaintiff. The draft deed in clause 3 effectively acknowledged order 7(e)(ii) of the settlement orders, and clause 4 acknowledged that neither the plaintiff nor his estate had a legal right to receive or retain the $550,000. Clause 6 obliged the parties to provide a copy of the deed of loan to Arcare.

  5. It was following the provision of this signed draft deed to the defendant that the defendant's solicitor advised the plaintiff's solicitor that the defendant was liaising directly with Arcare.

  6. Importantly, the plaintiff moved into the Arcare aged care facility on 19 June 2023, and became subject to his residential care agreement with Arcare. On my calculation, as the letters of administration were granted to the defendant on 15 March 2023, the 90 day period for the payment of the $550,000 lump sum expired on 14 June 2023.

  7. On 20 June 2023, Arcare advised the plaintiff's daughters that the RAD had not been paid, so that the plaintiff was incurring a legislated interest obligation of 7.46% per annum, and therefore a daily accommodation payment of $173.73 would be charged.

  8. On 22 June 2023, Arcare asked the plaintiff's daughters to "act on this urgently as we need to advise our accounts department".

  9. On the same day, the plaintiff's solicitor forwarded the emails that had been received from Arcare to the defendant's solicitor, advising that interest would be payable under order 9 of the settlement orders, and that if the RAD was not paid promptly, the defendant would be required to sell the property in accordance with order 13 of the settlement orders.

  10. On 23 June 2023, the defendant sent an email to the relevant employee of Arcare. Among other things, the defendant stated her understanding that the full $550,000 would be refunded to the defendant directly, without any deduction for the plaintiff's daily fee or any other fees, and added: "4. This is an agreement between Arcare & Myself, and I will assume this will not be disclosed with any third-party."

  11. Arcare advised the defendant on 28 June 2023 that her email had been sent to its finance and legal departments with a copy of the settlement orders and the proposed deed between the plaintiff and the defendant, and that "they have advised that there is no agreement between Arcare and yourself, our agreement is between our client George Baggaley and Arcare Pty Ltd." In essence, this email added that it was Arcare's position that when the plaintiff passed away: "Probate will still be required before the funds will be released to the Estate. The Deed will then come into effect as part of his Estate." The email asked for payment of the RAD by 29 June 2023 and noted that the plaintiff was incurring interest at the rate of 7.46% per annum.

  12. Considerable correspondence then ensued between the parties' solicitors that does not require detailed analysis.

  13. By email dated 31 July 2023, Arcare's Group General Counsel advised the defendant (with copies to the plaintiff's daughters):

I am instructed that the $550,000 lump sum payment to be paid from the Estate by you for the benefit of George Baggaley to Arcare as a RAD, remains outstanding.

I note that the Orders made for proceeding 2021/00291331-001 required that payment be made together with a further payment of $80,000 to George Baggaley absolutely.

Given that Mr Baggaley has lived with us for over a month, the RAD is immediately due and payable. If it is not paid to us by 4:00pm on Wednesday 2 August 2023, I will be required to seek instructions to approach the Court to obtain enforcement orders concerning the Orders noted above.

We look forward to hearing from you.

  1. On 2 August 2023, the defendant's solicitor responded to Arcare's Group General Counsel, to advise that the defendant was taking steps to bring the matter back before this Court to seek clarity as to the meaning of the settlement orders.

  2. As noted, in fact, the plaintiff filed his notice of motion on 10 August 2023.

Consideration

  1. I am satisfied that the settlement orders were sufficiently clear for them to be complied with by the defendant in accordance with their terms. The effect of orders 5(a) and 6 was that the defendant was required to pay the $550,000 to Arcare within 90 days of the grant of letters of administration, which occurred on 15 March 2023.

  2. I am satisfied that, by means of the draft deed of loan signed by the plaintiff, the plaintiff had adequately complied with order 7(d).

  3. Had the defendant complied with orders 5(a) and 6, the plaintiff, or the plaintiff's estate, as the case may be, would have been required to repay the $550,000 to the defendant within a reasonable period after the plaintiff permanently ceased to occupy an aged care facility that required the payment of a RAD.

  4. I do not accept that there was in any strict sense a lacuna in the settlement orders, in that some order was missing that was essential to the settlement orders as a whole operating effectively.

  5. I do accept that there may have been a misunderstanding when the parties agreed to the settlement orders, and they may have assumed that any aged care facility nominated by the plaintiff would comply with the plaintiff's direction given in accordance with order 7(d), and repay the $550,000 directly to the defendant.

  6. Insofar as the defendant has submitted that the settlement orders may not have been effective because the plaintiff's nominated executors, who I take to be his daughters, may not have sought a grant of probate, it must be noted that the defendant, as a creditor of the plaintiff, would have had standing to apply for letters of administration with his will annexed: see s 63(d) of the Probate and Administration Act. I accept that this would have been inconvenient to the defendant, and would justify an argument that, even though the settlement orders may have been effective, they would have operated in an inconvenient way that the parties did not expect.

  7. As the settlement orders as made were capable of operation in accordance with their terms, it was, in my view, a matter for the defendant to have promptly exercised the leave granted by order 14 of the settlement orders to approach the Court for appropriate orders varying the settlement orders, if that is the result that the defendant sought to achieve. It was not appropriate for the defendant to have let the 90 day period for payment of the lump sum to expire without first having exercised the leave in a timely way. The defendant was not entitled unilaterally to decide not to comply with the letter of the Court's order, simply because of its inconvenience.

  8. The Court cannot now be sure what, if any, variation orders the Court may have made if the defendant had exercised the leave in a timely way. That may have depended upon whether there was evidence of an alternative aged care facility that was equally suitable for the plaintiff's purposes to the facility provided by Arcare that would agree to be bound to repay the RAD directly to the defendant. In the absence of such evidence, I consider that it is probable that the Court would, at most, have made additional orders to protect the defendant's entitlement to receive repayment of the lump sum from the plaintiff or the plaintiff's estate. It is unlikely that the Court, having made order 5(a) of the settlement orders in the first place, would have made additional orders that jeopardised the plaintiff's ability to reside at an aged care facility of his reasonable choice. I cannot see how the Court would have made an order that bound Arcare to repay the RAD directly to the defendant.

  9. I consider that it is extremely doubtful that the Court would have denied the plaintiff the benefit of the settlement orders unless the plaintiff's daughters volunteered to make themselves personally liable for the repayment of the lump sum directly to the defendant, immediately upon the plaintiff ceasing to need the money for the payment of a RAD. The Court would definitely not have had jurisdiction to impose personal liability on the plaintiff's daughters involuntarily.

  10. While it is clear that the defendant was the 'winner' in the dispute as a result of achieving the agreement of the plaintiff's daughters to accept personal liability in the terms imposed upon them by the deed, it does not at all follow that the defendant should be treated as being vindicated as to the position she adopted in her dispute with the plaintiff. In my view, the defendant was not vindicated at all. Rather, by her unilateral refusal to comply with the settlement orders and to pay the RAD to Arcare, even though the plaintiff had gone into occupation of the aged care facility after the expiration of the 90 day period, the defendant had the plaintiff and his daughters, as it were, over a barrel. In particular, the plaintiff's daughters were in the position where their father's entitlement to reside in the aged care facility was put in jeopardy, and he was incurring interest payments at a rate that was in excess of the rate of interest payable by the defendant under order 9 of the settlement orders. The proper way for the Court to characterise the plaintiff's daughters' agreement to execute the deed was that, out of filial affection or duty, they acted to protect their father by granting the defendant rights that she was clearly not entitled to under the settlement orders.

  11. In these circumstances, the proper order for costs is an order that the defendant pay the plaintiff's costs of the dispute, which should extend both to the strict costs of the notice of motion and the consequences of the defendant not having complied with the settlement orders in accordance with their terms.

  12. Quite independently of the costs order that is appropriate, an order should be made that the defendant pay to the plaintiff interest in accordance with order 9 of the settlement orders. Order 9 has effect in accordance with its terms. None of the events related above would justify the defendant being released from the requirement to comply with order 9. Even compliance with that order will not fully compensate the plaintiff for the interest liability that he has incurred to Arcare as a consequence of the defendant's failure to pay the RAD to Arcare in accordance with order 9.

Orders

  1. The Court's orders are:

  1. Order the defendant to pay to the plaintiff $4,841.55 in compliance with order 9 made by the Court in these proceedings on 25 May 2022.

  2. Order the defendant to pay the plaintiff's costs of securing compliance by the defendant with orders 5(a) and 6 made by the Court on 25 May 2022, as well as his costs of the notice of motion filed on 10 August 2023.

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Decision last updated: 26 October 2023

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