Bird v Bird (No 3)
[2012] NSWSC 647
•06 March 2012
Supreme Court
New South Wales
Medium Neutral Citation: Bird v Bird (No 3) [2012] NSWSC 647 Hearing dates: 6 March 2012 Decision date: 06 March 2012 Jurisdiction: Equity Division Before: Rein J Decision: The plaintiff's motion dismissed.
Catchwords: PROCEDURE - Supreme Court procedure - New South Wales - leave to amend pleadings - where plaintiff's motion brought at commencement of hearing - where amendments make fresh claims against fourth defendant - where plaintiff has been on notice for a long time of those claims - where plaintiff has in the past stated in pleadings that relief is not sought against fourth defendant - where fourth defendant, now deceased, has not been given an opportunity to defend herself - amendment would be to the prejudice of the defendants Legislation Cited: Civil Procedure Act 2005 Cases Cited: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Dennis v Australia Broadcasting Corporation [2008] NSWCA 37Category: Procedural and other rulings Parties: Deborah Michelle Bird (Plaintiff)
Warrick Lindsay Bird (First defendant)
Rodney David Bird (Second defendant)
Herbert James Cannington (Third defendant)
Mona Ethel Bird (Fourth defendant)Representation: Counsel:
J S Drummond (Plaintiff)
D E Grieve QC and M K Condon (First and second defendants)
C Champion (Third defendant)
Solicitors:
Wilson & Co Lawyers (Plaintiff)
Hills Solicitors (First and second defendants)
Middletons (Third defendant)
File Number(s): SC 2005/262267
ex tempore Judgment
These proceedings relate to the estate of the late Percy Clifford Bird ("Percy") who died on 2 September 1996. Percy was survived by his wife, Mona Ethel Bird ("Mona"), and his three children Warrick Lindsay Bird ("Warrick") (first defendant), Rodney David Bird ("Rodney") (second defendant) and Deborah Michelle Bird ("Deborah") (plaintiff). By his will he gave a legacy of $500,000 to Mona and the residue of his estate to Warrick, Rodney and Deborah.
Warrick and Rodney were, together with Mr James Herbert Cannington ("Mr Cannington") (third defendant), Percy's solicitor, appointed trustees and executors of Percy's estate. Probate of Percy's will was granted on 8 November 1996.
Mona died in January 2011. Probate of her will was granted on 4 April 2011. By her will she appointed Rodney as her executor.
Mona's will left the net estate to Rodney and Warrick. The pleadings, as they currently stand, involve the following claims by Deborah against Warrick and Rodney:
(1) Whilst Percy was still alive, Mona, acting pursuant to powers of attorney, sold property owned by Percy and placed proceeds in an account or accounts operated solely by her. It is claimed that a total of $847,349.75 was paid into her account in this way. It is alleged that the payment so made was a breach of Mona's duties owed to Percy under the powers of attorney, and that she is liable to account to the estate and that Warrick and Rodney were knowing participants in the breach of fiduciary duty to which Mona was subject and that they are therefore liable under the knowing assistance and knowing receipt limbs of Barnes v Addy (1874) LR 9 Ch App 244.
(2) Warrick, Rodney and Mr Cannington breached a duty owed to Percy's estate by failing to collect the monies due to the estate from Mona and possibly themselves, and are liable to compensate the estate for the monies which could have been recovered from Mona and themselves.
Deborah wishes to amend the further amended statement of claim to:
(1) join the estate of Mona and to amend the statement of claim to one claim against the estate of Mona in the amount $847,349.75, which is the amount presently claimed from Warrick and Rodney, or so much of it as can be recovered from Mona's estate, there being I think the agreement that the estate is limited, having been verified for probate purposes in the order of half a million dollars;
(2) claim against the estate of Mona for a further figure of $91,000, being the proceeds of a Westpac Life Bond that was obtained by or in the name of Mona and placed in her account over a number of years up to and including and withdrawn 2001; and finally
(3) claim against each of Warrick and Rodney for the amount of $80,000 each, being the balance of the deposit produced as a consequence of the investment of the $91,000 by Mona to a deposit account in her name. I shall refer to the $91,000 and the $80,000 as the "Westpac Bond Monies".
The defendants all contend that the case against them is hopeless in its entirety, and they resist the amendment on a number of grounds. Firstly, that it is too late to join Mona's estate, given that the proceedings have been on foot for a very long time, and that although threatening to do so, the plaintiff did not join Mona when she was alive until 2008.
A second matter is the fact that when Mona was joined following a direction of his Honour Palmer J in 2008 that this should occur, which I think is agreed to have occurred in October 2008, a notice of motion seeking joinder was filed by the plaintiff in court and it was served on Mona with a letter which told her:
"The notice of motion seeks an order that you be joined as a party to the above mentioned proceedings in the Supreme Court.
You will note from paragraph 65(a) of the amended statement of claim that no relief is sought against you in those proceedings and the application for your joinder relates solely to you being a beneficiary under the will of Percival Clifford Bird."
There is some confusion about whether a formal order was made for the joinder of Mona but there is no dispute that subsequently when the plaintiff wished to amend her claim, Mona was listed as the fourth defendant in that claim and par 65(a) of that amended claim, which became the further amended statement of claim, consistent with what Mona had been told, did not make any claim against her in the proceedings.
A further ground is that, in relation to the Westpac Bond Monies, there is now no opportunity for the defendants, either in their own capacity or Rodney on behalf of Mona's estate, to obtain instructions from Mona as to the circumstances in which monies were deposited by her and the use made by her and whether or not her late husband was appraised of those steps and the processes involved.
There is also a strong attack, brought on behalf of the first and second defendants, on the form of the proposed pleadings. The particulars provided by the plaintiff yesterday, which have become Exhibit B in this application, have been responded to by Mr Donald Grieve SC and Mr Miles Condon on behalf of the first and second defendants. Although there is a slight disconformity, because Exhibit B involves particulars amended from yesterday afternoon, nevertheless, one can gain the sense of the objections from Exhibit 4, involving trenchant attack upon the sufficiency of the particulars provided, particularly having regard to the fact that what is asserted against the defendants and the estate is breach of duty on the part of Mona and knowing assistance in that by the defendants.
Further, the defendants rely on the principles identified in the High Court decision in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 ("Aon") and make reference also to ss 56 and 57 of the Civil Procedure Act 2005 which, to a large degree, is reflected in the Aon decision.
In making orders or directions in relation to the management of proceedings, regard is required to be paid to the objects set out in s 57(a) - (d) of the Civil Procedure Act which are:
"(a) the just determination of the proceedings;
(b) the efficient disposal of the business of the court;
(c) the efficient use of available judicial and administrative resources,
(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties."
Recent cases have reinforced the approach set out in the Civil Procedure Act as they demonstrate that the Court needs to have regard not only to the interests of the parties but also to the interests of other litigants in the allocation of judicial resources when considering whether or not, for example, an adjournment should be allowed or amendments allowed which will lead to an adjournment. See the judgment in Aon, in particular, [98] to [103] and [96] to [102] per Gummow, Hayne, Crennan, Kiefel and Bell JJ; and [133] to [134] per Heydon J. Also see: Dennis v Australia Broadcasting Corporation [2008] NSWCA 37 per Spigelman CJ at [28] and [29], with whom Basten and Campbell JJA concurred at [34] and [35], which deals with s 56 of the Civil Procedure Act.
There is correspondence which, in recent times, shows that the plaintiff has been seeking to press the first and second defendants, as executors of Percy's estate, to bring proceedings against Mona's estate and eventually when it became clear that they would not do so, in December last year the plaintiff's solicitor wrote advising that the plaintiff would seek to join the estate of Mona. Indeed by 24 January 2012 a new proposed statement of claim had been prepared and the draft had been served on the first and second defendants' solicitors for their consideration. The first and second defendants indicated that they would not consent to the amendment.
Mr Grieve contends that if the plaintiff is now permitted to bring a claim against Mona's estate for the $847,349.75 and the Westpac Bond Monies, that puts Rodney in a position of conflict. I am inclined to think that the conflict is more imagined than real, given that Rodney and his brother are the only beneficiaries under Mona's will and that they have an interest in these proceedings in resisting any claim of wrongdoing by Mona as part of their defence of the proceedings against them. In other words, I am not sure that Rodney has any interest in Mona's estate being held liable. He may escape personal liability in the plaintiff's claim against him but it does not seem to be of any advantage to him to have Mona's estate liable.
Having said that, I am inclined to think that if I were to allow the amendment, Rodney should at least be given the opportunity to consider whether or not there is a conflict, obtain advice on that and also, I think that he would need to consider whether or not he should seek judicial advice in his role as executor of Mona's estate as to whether or not he should resist the proceedings, a matter also put by Mr Grieve in opposition to the amendment.
One answer to that last possibility is that since Rodney and his brother are the only beneficiaries under the will, they are the only persons who might have a claim against Rodney and it might be the advice from solicitors that he would not need to take any steps for judicial advice because he would not be at risk of any claim by either himself or Warrick for having expended money in resisting the claim.
I think the most important point in relation to the defendants' arguments is that the plaintiff has been on notice for a long time that there could be a claim made against Mona and she has chosen, whilst Mona was alive, not to take that step. Mona was informed, as I have indicated, that no claims were brought against her and I think there is an element of considerable unfairness in permitting the plaintiff to now launch proceedings against the estate when Mona had no knowledge that there would be such proceedings and was told there would not be and was not, in effect, given an opportunity to do whatever she could do to defend herself against such a claim as is now brought.
It is true that she has assisted the first and second defendants by providing an affidavit or affidavits in support of their case, but her position if she had been told that there was a claim against her may have been different to that position which she has taken simply as someone asked to assist her sons. This is particularly acute in relation to the Westpac Bond Monies because that is a claim which was never advanced against her or her sons and they have not had the opportunity to obtain any input from her about the matters.
In those circumstances, I think there is a significant reason why, as a matter of fairness, the amendment should not be allowed, given that the plaintiff has made a decision in the past not to sue Mona when she could have readily done so.
There is also material which shows that the plaintiff's solicitor has been on notice for considerable time and has done nothing about it in relation to the $91,000 claim. Again, if that had been advanced earlier, that could have been the subject of inquiries made both by Mona and the defendants.
The case has been fixed for hearing for seven days and, as I have indicated, although I am not sure that there is any real conflict insofar as Rodney is concerned, I think I would be minded, if otherwise persuaded that amendment was appropriate, to grant him time to take proper advice about his position, which would lead to an adjournment and probably vacation of this hearing.
I did ask Mr John Drummond of counsel to obtain instructions as to whether, if I was to allow the amendment on terms that Rodney would need to be given time to consider his position with the consequence of vacation of the hearing date, his client would wish to proceed with the amendment and he informed the Court that the plaintiff would not wish to do so.
I note that, in submissions, Mr Drummond told me that his client could commence proceedings against the estate separately but he indicated that it was seen as preferable that all of the proceedings be heard at the one time.
Were I to grant the amendment, I would not put the plaintiff in any better position so far as any limitations argument is concerned and treat the claims as having been commenced as at today's date, there having been no claim previously been brought against Mona or her estate.
The claims which the plaintiff wishes to ventilate against Mona's estate relate to conduct alleged to have occurred prior to 1996. There are said to be serious questions about whether or not all or some of the claims against Mona, and I might add the other defendants, are statute-barred or, if not statute-barred, then the subject of laches, matters raised in submissions by the defendants.
I was asked to have regard to the overall merits of the case contained in the amendments and, as I say, there was a strong attack on the sufficiency of the particulars, but I do not base myself on this for refusing the amendment. I think it is a matter in which the plaintiff had a long time within which to join Mona and make the claims which are now brought against Mona's estate, but has not done so to the prejudice of Mona's estate and the defendants if the amendment were allowed and I therefore refuse the amendment.
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Decision last updated: 02 July 2012
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