Brereton v Brereton
[2012] NSWSC 1372
•05 November 2012
Supreme Court
New South Wales
Medium Neutral Citation: Brereton v Brereton [2012] NSWSC 1372 Hearing dates: 5 November 2012 Decision date: 05 November 2012 Before: White J Decision: Counsel to bring in short minutes in accordance with reasons.
Catchwords: WILLS, PROBATE AND ADMINISTRATION - plaintiff and defendant siblings and executors of mother's will - consent orders made on 23 August 2010 noting agreement resolving dispute - further dispute as to implementation of agreement Cases Cited: Harvey v Phillips (1956) 95 CLR 235 Category: Interlocutory applications Parties: Jonathon Victor Le Gay Brereton (Plaintiff)
Christine Janet Le Gay Brereton (Defendant)Representation: Counsel:
A Gruzman (Plaintiff)
W Washington (Defendant)
Solicitors:
Mark Evans, Solicitor (Plaintiff)
Leonie J Hansen (Defendant)
File Number(s): 2009/306570
Judgment
HIS HONOUR: On 23 August 2010, Palmer J made orders by consent in these proceedings. The orders, and an agreement that the Court noted, were intended to resolve disputed claims in relation to the administration of the estate of the late Catherine Carmichael Le Gay Brereton. The plaintiff and the defendant are the executors of her will. A number of issues arose over which the parties remained in dispute concerning the attempted implementation of the agreement and the consent orders. Counsel have helpfully narrowed the issues that now call for a decision.
The first issue concerns a payment of $6,000 that the defendant contends should be made out of an account that stands in the defendant's name for payment to three carers of the deceased.
The account is known in these proceedings as the "Echidna account". The defendant deposes that moneys in that account were given to her by her mother to be used to make payments after her mother's death.
The defendant deposes that the deceased asked her to hold the Echidna account for the three carers, to split it between them three ways, and that whatever was left after she was gone should be shared between those three persons up to a sum of $15,000. According to the defendant, the deceased said that this was in addition to an amount that was left to one of the carers in her will.
The defendant's evidence is that the solicitors acting for the deceased prepared a note for the deceased's signature to confirm that, on her death, any moneys up to $15,000 in the account were to be held by the defendant and then to be divided after paying day-to-day expenses between her three carers for whom she expressed support for their care over a number of years.
The defendant's evidence is that the deceased sought advice as to whether she should change her will, but was told that she would have to make a whole new will. She did not want to take that course and accordingly, proceeded by way of recording her wishes by a written direction.
In his statement of claim, the plaintiff pleaded that the assets of the estate comprised a number of items of property, including the moneys retained by the defendant in the Echidna account in her name, that is, the defendant's name. That paragraph is admitted.
The will has been admitted to probate. It is clear, and indeed there is no dispute about it on the pleadings, that the moneys in the Echidna account were beneficially owned by the deceased, even though the defendant has legal title to the asset. Accordingly, the asset has to be dealt with in accordance with the will. The fact that the deceased intended to benefit her carers and took steps to seek to have that done in the ways I have described, is not a sufficient reason for the executors to deal with the estate other than as the will provides.
The directions given by the deceased in her lifetime did not amount to an immediate declaration of trust of the moneys in the account in favour of her three carers. The deceased was the beneficial owner of the moneys at her death and accordingly, the moneys have to be dealt with in accordance with the will. For these reasons, I do not accept the defendant's contention that $6,000 should be paid from the moneys in the estate account to the three carers.
A related question concerns a payment of $9,000 that the defendant made from the same account to the carers. It was her evidence that she made those payments to give effect to her mother's wishes. It was her understanding that the payments totalling $9,000 to the three carers satisfied her mother's wishes and obligations to them. It was only after she saw documents produced on subpoena by the deceased's solicitor that she learned that her mother had intended that a sum of up to $15,000 should be paid to them.
The plaintiff seeks an order to the effect that the defendant should account to the estate for the $9,000 that she paid. However, this was an issue that seems to me to have been resolved by the consent orders. Whatever right the third beneficiary of the estate might have to complain about those payments, it does not appear to me that the plaintiff can complain.
The defendant had sworn an affidavit verifying accounts on 30 July 2010. Those accounts recorded the distribution of $9,000 described as "payment to carers". The orders included an order that those accounts were approved and passed subject to the "notations below". There was no notation by the plaintiff reserving any right to complain about that distribution.
By clause 8, the court noted an agreement between the parties that included a term that, other than certain items of personal property in the sum of $1,000, there was a balance to the estate remaining to be distributed which amounted to $66,588.23 in cash. It was agreed that, of that sum, $51,911.23 would be applied in payment of commission and the balance would be used to pay unpaid estate expenses as were detailed or estimated at page 15 of an exhibit to the defendant's affidavit sworn 30 July 2010.
The page of that exhibit recorded what sums were held in three accounts and listed outstanding expenses. There was recorded a sum of $6,000 described as "payments owing to carers", but against that figure there was an asterisk stating that its inclusion in the report was disputed. There was no reference made to the payment of $9,000 that had been disclosed in the defendant's affidavit verifying the accounts.
In my view, any claim that the plaintiff had in relation to that payment was compromised by the orders and the agreement of 23 August 2010.
The parties are agreed that, subject to that claimed deduction of $9,000, the defendant is entitled to payment of commission of $51,911.23. They are also agreed that the defendant is entitled to interest on that sum, being interest in the amounts of interest that have been earned on the estate accounts with Macquarie Bank, and I include in that expression the account number 123611931 known as the Echidna account in the defendant's own name.
It is not clear to me whether or not interest has been earned at the same rate on both accounts. I accept the submission of counsel for the plaintiff that, if there is any difference in the rates of interest that have been earned on the two accounts, the defendant should receive the sum of $9,274.49, which was the balance in the account number 123611931 when the August 2010 orders were made, and that she should also receive the difference between that sum and the agreed amount of commission of $51,911.23. In addition, she should receive the interest that has been earned on account 123611931 since 20 August 2010, together with the interest that has been earned on account 123660565 in the proportion that the sum of $42,636.74 bears to $51,571.90.
The next issue in dispute concerned moneys payable to Cutcher and Neale Pty Limited, accountants, of Newcastle. The initial dispute concerning a debt of $2,500 has been resolved by agreement and I understand no orders are needed in relation to that matter.
The dispute concerns an amount of $4,950 that was the subject of an invoice from Cutcher and Neale Pty Limited to the defendant dated 10 August 2009. This debt was referred to at page 15 of the exhibit to the defendant's affidavit of 30 July 2010, but the exhibit noted that the inclusion of that debt and its value was disputed. There is no evidence that the debt arose as a result of a retainer of Cutcher and Neale Pty Limited by both the plaintiff and the defendant.
The description of the services provided by Cutcher and Neale Pty Limited is entirely consistent with their services having been retained for the purposes of the defendant's defending the proceedings that were brought against her by the plaintiff in relation to the administration of the estate. That is to say, it has not been shown that that the debt of $4,950 is an estate expense, as distinct from a personal expense incurred by the defendant for the purposes of the proceedings that were resolved by the consent orders of 23 August 2010. One of those orders was that there be no order as to costs to the extent that each party bear his and her own costs and that no party was to have any of their costs reimbursed from estate funds.
The next issue concerns photographs. The agreement contained in the consent orders which were signed by the parties on 20 and 22 August 2010 included an agreement that:
"(f) The personal property of the estate includes various photograph albums and a box of memorabilia that were present at Glen Gary Cottage on 15 March 2010 which are currently in the possession of the Cross-Claimant [the defendant] (the Family Memorabilia). Within 14 days, the Cross-Claimant will, at her cost, make the Family Memorabilia available for collection from the estate's solicitors, Rankin & Nathan at Newcastle. Within a further 14 days, the Second Cross-Defendant will, at his cost, arrange for the Family Memorabilia to be collected, duplicated and then returned to Rankin & Nathan at Newcastle. Within a further 14 days after that, the Plaintiff/First Cross-Defendant will, at his cost, arrange for the Family Memorabilia to be collected, duplicated and then returned to Rankin & Nathan at Newcastle. Thereafter the Cross-Claimant will, at her cost, collect the Family Memorabilia from Rankin & Nathan at Newcastle."
The defendant says that she continues to hold in her possession the two boxes of photographic material; that they contain a large number of loose photographs, some of which are behind glass and some are very small; and that some of the photographic material contains images that apparently date back to the 1800s which are fragile and irreplaceable. The defendant is concerned that proper care be taken to ensure that no items become damaged or lost during any process to duplicate the photographic material and that the future preservation of the material is not compromised by any duplication being carried out by persons who do not have appropriate skill and expertise. By her notice of motion, the defendant seeks orders that the family memorabilia and photographs be delivered to new solicitors by an approved copying service, apparently a service to be approved by the court.
The agreement of 20 and 22 August 2010, which is referred to in the consent orders made on 23 August 2010, operates as a contract between the plaintiff and the defendant. Indeed, the orders provide for the final resolution of the proceedings, albeit that further proceedings have become necessary to implement the parties' agreement.
Nonetheless, whether the matter is considered as a matter of a consent order or a simple contract between the parties, their agreement can only be set aside on a ground which would render a simple contract void or voidable, or entitle a party to equitable relief against it (Harvey v Phillips (1956) 95 CLR 235 at 243-244). The fact that the defendant now has concerns as to the fragility of this material is not a sufficient reason to set aside the parties' agreement. Any mistake under which she may have laboured at the time the agreement was made in August 2010, is not a mistake that would vitiate the contract. Therefore I refuse the orders sought by the defendant, the effect of which would be to vary the agreement that the parties made in 2010.
The only remaining issue in dispute concerns a sum of $650 that the defendant contends is an estate expense arising from the work done by a pest inspection and treatment service in February and March 2010. This sum was described on page 15 of the exhibit to the defendant's affidavit of 30 July 2010 as an outstanding estate expense, namely a debt payable to Swot Pest Services. There was no asterisk against that item recording that its inclusion in the report or its value was disputed.
The defendant tendered an invoice dated 17 March 2010 that shows that Swot Pest Services rendered an invoice or invoices totalling $1,650 of which the defendant was paying $1,000 and of which $650 was to be paid through the estate. That invoice also recorded that an invoice had been sent to the Glen Gary Partnership.
The plaintiff's position is that this was a partnership expense that was resolved in proceedings on the taking of partnership accounts. It appears from the invoice, and from the defendant's affidavit, that it is said to be an estate expense because furniture, which is an asset of the estate, was stored on the premises where the work had to be done. Swot Pest Services has apportioned the cost of its services accordingly.
In my view the defendant has established that this was an estate expense. Indeed, I consider that the effect of the agreement and the orders of August 2010 is that it was accepted as an outstanding estate expense and should be paid from the estate.
There is a number of other issues raised in the notices of motion filed for each party. But I am told that the other issues have been resolved as a result of negotiations during the course of today.
I will stand the matter over to a convenient time for counsel to bring in short minutes of order to give effect to these reasons and I will hear the parties on costs. My prima facie view is that each party has had a measure of success and failure on the application and there should be no order as to costs to the intent that each party bear his and her own costs of the applications, but I will hear the parties if either party seeks a different costs order.
Decision last updated: 14 November 2012
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