Barron v Barron
[2016] VSC 302
•1 June 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST
S CI 2014 04209
IN THE MATTER of Part IV of the Administration and Probate Act 1958
IN THE MATTER of the will and estate of PATRICK JAMES BARRON, deceased
BETWEEN
| CHERYLL AIMEE BARRON | Plaintiff |
| v | |
| MARK RICHARD BARRON (as executor of the estate of Patrick James Barron, deceased) | Defendant |
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JUDGE: | Derham AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 31 May 2016 |
DATE OF JUDGMENT: | 1 June 2016 |
CASE MAY BE CITED AS: | Barron v Barron |
MEDIUM NEUTRAL CITATION: | [2016] VSC 302 |
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ADMINISTRATION AND PROBATE – Testator’s Family Maintenance – Application to dismiss proceeding due to concluded compromise – Offer of Compromise – Offer not accepted by plaintiff within time – Offer by plaintiff to compromise proceedings on the same terms – Deed of Family Arrangement prepared including further terms – Deed not accepted – Plaintiff puts further offer – Whether further offer accepted by defendant making payment to plaintiff – No concluded agreement to compromise the proceeding established – Application dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Newton | Suzanne Jones Lawyers |
| For the Defendant | Mr J Smith | The Probate Professionals |
HIS HONOUR:
Introduction
The defendant applies by summons filed on 16 May 2016 that this proceeding be dismissed and that the plaintiff pay the defendant’s costs on an indemnity basis. The basis of the application is that the plaintiff’s claim, which is a claim under Part IV of the Administration and Probate Act 1958 (‘the Act’), has been compromised by a binding agreement.
The application is supported by the affidavit of the defendant’s principal, Mr David Boots, sworn on 16 May 2016 (‘Boots’ affidavit’). There is no answering affidavit from the plaintiff.
In my view, in summary, there has been no finally concluded and binding agreement to compromise the proceeding.
Background
By originating motion filed on 13 August 2014, the plaintiff sought an order under Part IV of the Act for such provision for her proper maintenance and support out of the estate of her father, Patrick James Barron (‘the deceased’) as the Court thinks fit.
The defendant, a son of the deceased, is the executor and trustee of the estate. The deceased was married to Aimee Constance Barron (‘Aimee’). They had three children, the plaintiff, Patrick James Barron and the defendant. The deceased died on 13 December 2013 leaving a will dated 9 November 2012. Probate of the will was granted by this Court to the defendant on 17 February 2014. By his will, the deceased appointed his wife as executor and trustee or, alternatively, his three children. He left his estate to his wife or, if she predeceased him, to his three children in equal shares. Aimee predeceased the deceased, having died on 27 December 2012.
When the will was proved by the defendant, the inventory of assets disclosed an estate valued at $1,187,828.00, comprised of various financial assets located within and outside Victoria.[1]
[1]Boots’ affidavit, Exhibit ‘DB-2’.
Shortly after the commencement of the proceeding, on 21 August 2014, the plaintiff’s solicitor wrote to the defendant’s solicitor advising of the commencement of the proceeding and asked whether the defendant’s solicitor had instructions to accept service. On 28 August 2014, the defendant’s solicitor informed the plaintiff’s solicitor that he had such instructions. But at that time, the originating motion was not served whilst the parties negotiated.
On 13 December 2014, the defendant’s solicitor made an offer of compromise pursuant to r 26.02 of the Supreme Court (General Civil Procedure) Rules 2005 (‘the Rules’). The offer was:[2]
The defendants (sic) offer to the plaintiff the total sum of $75,000 and $5,000 costs (in addition to her one-third entitlement under the Will) in full and final settlement of the matters in this proceeding. This offer remains open for fourteen (14) days and, if accepted, payment will be made within fourteen (14) (sic).
[2]Boots’ affidavit, Exhibit ‘DB-3’.
The date for acceptance of this offer was 27 December 2014. No response was received by the defendant by that date. However, by letter dated 13 January 2015 the plaintiff’s solicitor wrote to the defendant’s solicitor advising that she had instructions that her client ‘will accept’ the offer. The letter was in the following terms:[3]
I refer to your offer of settlement made on the 13th December 2014.
I have only just received instructions from my client today that she will accept the offer of an addition amount of $75,000 plus $5,000 for her costs in full and final settlement of this matter.
I acknowledge that this acceptance is out of time and hope that your client is prepared to sign Terms of Settlement which reflect this agreement between the parties.
I look forward to receiving Terms of Settlement for my client to sign in due course.
[3]Boots’ affidavit, Exhibit ‘DB-4’.
When this letter was received by the defendant’s solicitor he was overseas, and on his return did not become aware of it until considerably later. In the meantime, on 20 February 2015, the defendant’s solicitor wrote to the plaintiff’s solicitor seeking an informal mediation of the plaintiff’s claim in order to avoid unnecessary costs and further litigation. No response was received and the defendant’s solicitor wrote again on 1 April 2015 to the same effect.[4]
[4]Boots’ affidavit, Exhibit ‘DB-5’.
On 12 May 2015, the plaintiff’s solicitor brought to the attention of the defendant’s solicitor (presumably by telephone or email), the letter of 13 January 2015 and in consequence the defendant’s solicitor prepared a Deed of Family Arrangement (‘Deed’) which purported to give effect to the offer made by the plaintiff’s letter of 13 January 2015. This Deed was sent to the plaintiff’s solicitor on 10 June 2015, executed by the defendant. That Deed included a confidentiality term which was not a part of any offer by either party and provision, clause 2(d), pursuant to which the executor and trustee reserved the right to partition or appropriate any part of the real of personal property of the estate in or towards the satisfaction of each share of the estate due to the beneficiaries.
Between 26 and 31 July 2015, there was correspondence between the solicitors concerning the Deed. Relevantly, that correspondence included a letter from the plaintiff’s solicitor dated 27 July 2015 in which it was said that the plaintiff wishes to delete the confidentiality term in the Deed and after enquiring whether that was acceptable went on as follows:[5]
I understand that your clients propose to withdraw their offer by close of business today however I am unable to obtain final instructions until close of business on the 27th July 2015 in San Francisco PDT which would be 10.00am 28th July 2015 here. I would appreciate the opportunity to try to resolve this matter between the parties before formal proceedings are commenced.
[5]Boots’ affidavit, Exhibit ‘DB-7’.
With the letter there was attached an amended form of the Deed signed by the plaintiff. It deleted the confidentiality term and added a further provision relating to the partition of certain assets and the receipt by the plaintiff of certain family photographs and documents.
On 28 July 2015, the defendant’s solicitor wrote to the plaintiff’s solicitor in the following terms:[6]
[6]Boots’ affidavit, Exhibit ‘DB-7’.
On 13 December 2014 – some seven months, two weeks and one day ago my clients made an offer to your client which had two elements:
·Your client would receive the total sum of $75,000 and $5,000 costs (in addition to her one-third entitlement under the Will) in full and final settlement of the matters in this proceeding.
·Payment will be made within fourteen days.
Your client – and in writing – purported to accept this offer unconditionally. The terms of settlement provided to your client post acceptance reflect exactly the terms of that offer.
We note your client’s recent attempt by letter of 28 July 2015 to amend the offer.
Your client has unilaterally altered clause 2(d) which defines the payment terms and makes payment conditional on a legal proceeding in another jurisdiction. Axiomatically your client is estopped from altering a fundamental term of the offer.
On Sunday 26 July 2015 your client was asked to either serve her original motion or sign the terms provided which reflect exactly the terms of the agreement. My office was neither served with an originating motion nor provided with the signed terms. On any view your client has waived her right to prevaricate in this regard.
I will seek instructions from my clients but unless your office hears from me otherwise your client can presume that subject to counsel advice my clients will be proceeding to distribute the estate immediately in accordance with the acceptance.
Should your client decline to provide her bank account details then I will seek instructions to forward a cheque to your office for the amount of her entitlement under the estate.
TAKE NOTICE that your client is in breach of 26.07.01 of the rules of court by not signing the terms of settlement.
This letter will be relied upon and produced to any court and my clients would be seeking costs against your client for her conduct and blatant breach of her paramount duty.
By letter dated 31 July 2015, the plaintiff’s solicitor responded to this letter saying that she is seeking instructions regarding it and proceeds as follows:[7]
With respect, your client has unilaterally altered the terms of agreement reached. The Deed of Family Arrangement already having been signed by your client and the other beneficiary of the estate was forwarded some five months after my client indicated she would accept the offer made on the 13th December 2014. The Deed contains a clause in respect of confidentiality. This was not discussed at any stage during negotiations. The Deed also changes the rights of my client in a manner which is unacceptable to her in respect of clause 2(d) which purports to give the right to partition and appropriate any part of the estate in satisfaction of an entitlement to the executor and trustee. This was also not agreed to. The will itself is silent as to the power of appropriation and therefore s 31(5) of the Trustee Act 1958 applies and the consent of the beneficiary absolutely entitled is required so the Deed of Family Arrangement seeks to alter the rights of my client and this was certainly not agreed to in the acceptance of the offer.
[7]Ibid.
On 7 August 2015, the plaintiff’s solicitor wrote to the defendant’s solicitor serving the originating motion. The letter is relevant and states as follows:[8]
Given that we do not have a signed Deed or Terms of Settlement which reflect the arrangement the parties have come to, I enclose by way of service Originating Motion filed on the 13th August 2014.
My client reiterates that she will agree to the settlement of this matter on the payment of $75,000 to her and $5,000 costs provided that her other rights pursuant to the Will are preserved namely that she has a right to one-third of the personal documents being all family photographs, official documents, correspondence and personal diaries of Aimee Constance Barron and Patrick James Barron including birth, educational, navy-related, marriage & death certificates and a right to copies of the balance of personal documents of which she does not receive in original form, such copies to be made at her expense within 30 days of settlement.
[8]Boots’ affidavit, Exhibit ‘DB-8’.
On 14 August 2015, the defendant filed a notice of appearance to the originating motion and also wrote to the plaintiff’s solicitor asking that she send her client’s proposed terms and conditions signed by the plaintiff for the defendant’s perusal.[9] No response was received. On 26 August 2015, the defendant’s solicitor again wrote to the plaintiff’s solicitor asking that she forward the proposed terms and conditions signed by the plaintiff for the defendant’s perusal.[10] Again no response was received.
[9]Boots’ affidavit, Exhibit ‘DB-9’.
[10]Boots’ affidavit, Exhibit ‘DB-10’.
On 21 September 2015, the defendant’s solicitor wrote to the plaintiff’s solicitor enclosing a cheque for $313,159.00 by way of interim distribution from the estate of the deceased. Attached to the letter was a schedule setting out how the amount had been arrived at. That schedule reveals that the sum includes an interim distribution of $233,159.00 to each of the beneficiaries plus the sum of $80,000.00 to the plaintiff by way of payment of the purported settlement sum. The letter went on as follows:[11]
I note that the estate retains funds in the form of shares including 5,120 Telstra shares, 4,310 shares of CBA and 800 Woolworth shares. The estimated value of those shares together with this interim distribution to your client exceeds the amount of her initial ambit claim.
[11]Boots’ affidavit, Exhibit ‘DB-11’.
On 1 October 2015, the cheque sent with the letter of 21 September 2015 was receipted into the plaintiff’s solicitor’s trust account and the defendant’s solicitor received a trust account receipt confirming that deposit. But there was no response to the letter of 21 September 2015.
On 24 December 2015, the defendant’s solicitor wrote to the plaintiff’s solicitor in the following terms:[12]
We refer to previous correspondence in this matter.
The originating motion was filed 13 August 2014 and a notice of appearance filed 14 August 2014.
It was our understanding that your client accepted an offer made by our client and unconditionally. The terms of settlement provided to your client post-acceptance reflected the terms of that offer.
Your client altered by hand the terms of settlement. Specifically she altered clause 2(d) which defines the payment terms and makes payment conditional on a legal proceeding in another jurisdiction.
As such, no signed terms of agreement exist.
Unless your client provides us signed copy of the terms of agreement as provided by us or provides us an affidavit by 4.00pm Friday, 15 January 2016 we will issue a summons to have the proceeding dismissed.
[12]Boots’ affidavit, Exhibit ‘DB-12’.
No response was received to this letter and on 8 March 2016 the defendant’s solicitor wrote to the plaintiff’s solicitor saying that in order to avoid the costs of an application to the Court to dismiss the matter, he proposed the plaintiff sign and return a consent order, which was attached to the letter, by which the proceeding was dismissed with no order as to costs by consent.[13] There was no response to this letter.
[13]Boots’ affidavit, Exhibit ‘DB-13’.
Submissions
The defendant submits that there is a concluded agreement arising out of:
(a) the acceptance by the plaintiff of the offer of compromise by the plaintiff’s letter of 13 January 2014. Although that acceptance was out of time, the parties treated the acceptance as effective; and
(b) the defendant discharged his obligation pursuant to the agreement by the payment by cheque sent with the letter of 21 September 2015, and that payment was accepted by the plaintiff.
The plaintiff contends that the agreement reached by the parties by the letter of 13 January 2015 falls within the first class identified in Masters v Cameron,[14] namely:
….one in which the parties have reached finality in arranging all the terms of the bargain and intend to be immediately bound to the performance of those terms, but at the time propose to have the terms restated in a form which will be fuller and more precise but not different in effect.
[14](1954) 91 CLR 353 at 360.
In this case, the defendant submits that the intention to have the agreement set out in a form fuller and more precise, but not different in effect, was overtaken by events and in consequence of the payment made on 21 September 2015, and acceptance of the payment by the plaintiff there was an accord and satisfaction.
The plaintiff submits that there has been no binding agreement to compromise the proceeding because:
(a) it was clear from the letter of 13 January 2015 that the acceptance of the offer of compromise proposed by that letter was itself conditional upon terms of settlement being executed by the parties (that is the third class in Masters v Cameron);
(b) the execution of satisfactory terms of settlement is also the usual practice in negotiations to settle Part IV applications unless the contrary is clearly stated;
(c) the Deed sent by the defendant’s solicitor is evidence of the fact that the parties contemplated that terms of settlement would be required before a concluded bargain was arrived at;
(d) the Deed did not reflect any agreement constituted by acceptance of the offer of compromise because the Deed included terms not the subject of the offer or the acceptance;
(e) the plaintiff did not accept the terms of the Deed and proposed different terms;
(f) the defendants response on 28 July 2015 was that these alterations were not acceptable and that what had occurred in consequence of the letter of 13 January 2015 was an unconditional acceptance of the offer of compromise and a threat to distribute the estate in accordance with that acceptance;
(g) this was not accepted and the plaintiff countered the defendant’s arguments accurately in her letter of 31 July 2015;
(h) the plaintiff then served the Originating Motion because ‘we do not have a signed Deed or Terms of Settlement which reflect the arrangement’;[15]
(i) the defendant’s letter of 24 December 2015 itself acknowledged there were no signed terms of agreement and demanded the plaintiff return the signed terms provided by the defendant or an affidavit, otherwise an application to dismiss would be issued; and
(j) there was no accord and satisfaction arising from the acceptance of the payment made with the letter of 21 September 2015 because the context was such that no agreement had been reached and that letter clearly contemplates that the defendant has retained in the estate sufficient assets to allow the further prosecution of the plaintiff’s claim in the proceeding. That is clear from the words of the letter ‘the estimated value of those shares together with this interim distribution to your client exceeds the amount of her initial ambit claim.’ This can only mean that the defendant is retaining funds to cover such claim as the plaintiff may successfully prosecute in addition to the amount of $75,000.00 plus costs of $5,000.00.
[15]Letter of 7 August 2015.
Consideration
The reliance by the defendant on the High Court decision in Masters v Cameron needs to be put in its proper context. In the paragraph from which the passage quoted above was taken, the Court said:[16]
Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any one of three classes … .
[16](1954) 91 CLR 353 at 360.
It can be readily seen that the three classes, class one of which the defendants say is attracted, turn on establishing that an agreement has been reached and that the matter the subject of the agreement will be dealt with by a formal contract. The resolution of the question of whether or not there has been any agreement reached of a kind referred to in Masters v Cameron, and if there has been such an agreement, whether it falls into class 1, class 2 or class 3, is dependent upon the particular facts of the case. Reference to similar cases is of limited value.[17]
[17]See for example Osborn v McDermott [1988] 3 VR 1, 11-12 per Phillips JA.
The first question in the matter before me is whether by the plaintiff’s letter of 13 January 2014 there was an agreement reached between the parties. The question depends on the intention of the parties as disclosed by the language they have employed. No special form of words is essential to be used in order that there shall be no contract binding upon the parties before the executions of their agreement in its ultimate shape.[18]
[18]Masters v Cameron (1954) 91 CLR 353, 362.
In my view, there was no agreement reached and the parties intended that there would be no final and binding agreement until execution of a Deed or Terms of Settlement.
Although it may be obvious, it is important to recognise that any assessment of whether an agreement was reached must be resolved by an objective assessment of the communications between the parties. In this regard, the New South Wales Court of Appeal in Australian Broadcasting Corporation v XIVTH Commonwealth Games Ltd,[19] observed:
The problem which arises is that they [the parties] have exchanged communications which, on the one hand, use the language of agreement but, on the other hand, disclose that at some future time a document embodying the terms of their contractual arrangement will be brought into existence. Where, as in the present case, the communications which the parties have exchanged are in writing, the question of their ‘intention’ is, prima facie, to be resolved objectively, and as a matter of construction of the relevant documents.
[19](1988) 18 NSWLR 540, 548-9 per Gleeson CJ, Hope and Mahoney JJA agreeing.
In this case, the offer of compromise was not open at the time that the plaintiff’s solicitor wrote her letter of 13 January 2014. This was clearly known to both parties and was acknowledged in the letter of 13 January 2015. In that circumstance, the willingness of the plaintiff to resolve the proceeding on the basis that it had previously been the subject of the offer of compromise must be seen as a fresh offer. But through inadvertence, the defendant did not accept that offer but proposed an informal mediation until later alerted to the 13 January 2015 letter. That then led to the Deed, which self-evidently included terms that had not been the subject of any communications that have been disclosed before me. Those terms were the confidentiality term and clause 2(d) which reserved to the executor and trustee the right to partition or appropriate any part of the real of personal property of the estate in or towards the satisfaction of each share of the estate due to the beneficiaries.
This introduced new terms and demonstrated that the parties had not reached agreement as to the terms of their proposed bargain. In any event, it is clear from the plaintiff’s letter of 13 January 2015 that the plaintiff contemplated acceptance of the defendant’s offer in futuro by the signing of terms of settlement which reflect the agreement. It is also clear from the response from the defendant’s solicitor in sending the Deed that the defendant contemplated the entry into the Deed as a condition of the resolution of the proceeding.
It is self-evident from the account of the facts as I have set them out above that the Deed did not reflect an agreement that might have been reached by an acceptance of an offer of compromise, as it included (as I have mentioned) additional terms not included in the offer of compromise. Those terms were not acceptable to the plaintiff as was made clear by the letter from the plaintiff’s solicitor dated 27 July 2015 and the amended Deed that accompanied that letter.
That position is made doubly clear by the plaintiff’s letter of 7 August 2015, by which the plaintiff reiterated her preparedness to agree to settle the proceeding on the terms set out in that letter. That the settlement on those terms was considered by the defendants to be conditional upon execution of terms of settlement or a deed of settlement is made plain by the responses from the defendants dated 14 and 26 August 2015. In those letters, the defendants asked for a draft of the proposed terms and conditions and in the first of the two letters the request was expressed to be ‘subject to our client’s instructions’.
The final step upon which the defendants relied to substantiate a concluded compromise of the proceeding was the unilateral payment made to the plaintiff under cover of the letter of 21 September 2015. Had there been an agreement reached prior to that date, the payment made under cover of that letter might have constituted satisfaction sufficient to conclude the compromise. But there was no prior agreement, or accord, for the reasons I have already given. Moreover, the terms upon which the payment was made acknowledge the absence of that agreement because by the second paragraph of the letter the defendants’ solicitor clearly indicates that a fund is being retained in the estate that will accommodate further provision for the plaintiff pursuant to Part IV of the Act in addition to the sum of $75,000.00 plus costs of $5,000.00 paid by cheque and sent with that letter.
For these brief reasons, it seems to me to be clear that there was no concluded agreement reached between the parties. If I am wrong in concluding that the letter of 13 January 2015 did not constitute an acceptance of the offer made by the offer of compromise, the agreement constituted by that acceptance was overtaken by the subsequent tendering of the Deed containing terms not contemplated by the offer, and the rejection of those further terms.
In addition, the subsequent events, to which I have referred, clearly demonstrate, despite the assertions by the defendant to the contrary, that not only had the parties not agreed upon all the essential terms of their agreement but they had made the entry into the agreement conditional on the execution of either a Deed or Terms of Settlement.
There is a further matter that has not been mentioned by either party that needs to be identified. It is evident from the communications between the parties’ solicitors that there were privileged communications, which have rightly not been referred to, and other communications that are not the subject of evidence. This is clear from paragraph 11 above and from the absence of the receipt for the payment sent with the letter of 21 September 2015. There were, therefore, more communications than those referred to in the defendant’s solicitors affidavit. There was no answering affidavit from the plaintiff’s solicitor. It is unsafe to conclude from the incomplete material that there has been a concluded and binding compromise of the proceeding.
Conclusion
I therefore conclude that the defendant has not established that there is any binding agreement to compromise the proceeding. Because the defendant’s application to dismiss the proceeding with costs is based upon the existence of such an agreement, the application must be dismissed.
In relation to the question of costs, however, I consider that the lack of response from the plaintiff to the letters from the defendants’ solicitors from 14 August 2015 through to 8 March 2016 is itself conduct that has contributed to the misconception by the defendant that an agreement had been reached. In those circumstances, I propose not to order costs against the defendants at this stage, but to reserve the costs.
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