Bristow v Bristow

[2014] NSWSC 1636

Supreme Court

New South Wales

Medium Neutral Citation:	Bristow v Bristow [2014] NSWSC 1636
Hearing dates:	Friday, 14 November 2014
Date of orders:	14 November 2014
Decision date:	14 November 2014
Jurisdiction:	Equity Division
Before:	Brereton J
Decision:	Leave to file cross-claim refused. Paragraph 2 of the notice of motion filed 2 October 2014 dismissed with costs.
Catchwords:	EQUITY – trusts and trustees – constitution of trust – capacity to constitute trust PROCEDURE – miscellaneous procedural matters – cross-claim – cross-claim by defendant against third party – sufficiency of connection to original proceedings – where leave sought to join parties to proceedings for the purpose of precluding them from raising like issues in subsequent proceedings – leave refused
Legislation Cited:	(NSW) Civil Procedure Act 2005, s 18, s 19, s 22(2) (NSW) Uniform Civil Procedure Rules 2005, r 9.1
Cases Cited:	Chatsworth Investments Ltd v Amoco (UK) Ltd [1968] 1 Ch 665 DG Madin Ltd v Gordon [1964] SASR 64 Walker v Commonwealth Trading Bank of Australia (1985) 3 NSWLR 496
Category:	Procedural and other rulings
Parties:	Margaret Scarvell Bristow by her tutor NSW Trustee & Guardian (plaintiff/first respondent) Sandra Ann Bristow (defendant) Susan Elizabeth Maclarn (second respondent) Catherine Margaret Bristow (third respondent)
Representation:	Counsel: JJ Loofs (plaintiff/respondent) I Davidson SC w A Norrie (defendant/applicant) Solicitors: de Groots Wills & Estate Lawyers (plaintiff/respondent) Williams Woolf & Zuur Lawyers (defendant/applicant)
File Number(s):	2013/265606

Judgment (Ex tempore)

1. HIS HONOUR: By statement of claim filed on 2 September 2013 and about to be amended, the plaintiff Margaret Scarvell Bristow, by her tutor NSW Trustee and Guardian, seeks a declaration that her second daughter the defendant Sandra Ann Bristow holds upon trust for the plaintiff certain proceeds of bank accounts amounting to some $1.282 million and certain securities, upon the basis that they were received by the defendant as a result of gifts purportedly made by the plaintiff when she was lacking capacity to make such gifts, and alternatively were procured by the undue influence of the defendant.

2. The relevant gifts were made from July 2004 onwards, and the plaintiff specifically pleads that as at July 2004 she did not have the capacity to make such gifts.

3. On 6 August 2004 the plaintiff made a Will appointing the defendant her executor and trustee, and after some small legacies giving the rest and residue of her estate to the defendant.

4. By notice of motion filed on 2 October 2014, the defendant seeks leave to file a cross-claim, the effect of which would be to join as cross-defendants, in addition to the plaintiff, her two other daughters namely Susan Elizabeth Maclarn and Catherine Margaret Bristow and to claim declarations that on 6 August 2004 the plaintiff/first cross-defendant had testamentary capacity to make the Will she in fact made on that date, and in addition a declaration that on 6 August 2004 she made a valid Will. The plaintiff, Ms Maclarn and Ms Bristow all oppose leave being granted to bring the cross-claim in these proceedings.

5. (NSW) Civil Procedure Act 2005, s 22(2), limits the right to bring a cross-claim against a person who is not a plaintiff in the proceedings to circumstances in which the relief claimed relates to or is connected with the subject of the first proceedings. The degree of connection sufficient to justify a cross-claim against a third party is described in general terms that do not expressly require a substantial degree of similarity, but the presence or absence of similarity is likely to influence the exercise of any procedural discretion in relation to the conduct of any proceedings on the cross-claim [Chatsworth Investments Ltd v Amoco (UK) Ltd [1968] 1 Ch 665, 674].

6. Similarly, (NSW) Uniform Civil Procedure Rules 2005, r 9.1, which provides for cross-claims, is by the operation of Civil Procedure Act, s 22, limited to cross-claims against non plaintiffs where the relief claimed relates to or is connected with the plaintiff's claim in the original proceedings. Where the cross-claim is against both third parties and an existing plaintiff, it still requires a sufficient relationship between the cross-claim and the plaintiff's original claim [DG Madin Ltd v Gordon [1964] SASR 64, 66].

7. In the present case, it is clear that the capacity of the plaintiff to make gifts inter vivos shortly before August 2004 and continuing thereafter will be in issue in the case. The evidence indicates that the plaintiff suffers from a progressive dementia, so it would seem likely that her capacity has progressively decreased. At least so far as the evidence before me goes – although it has not been necessary to address this question in detail – it does not appear to be suggested that this is a case in which there have been periods of lucidity interspersed in periods of declining cognition.

8. The test applicable to testamentary capacity at the date of the Will in August 2004 and that applicable to the capacity to make gifts inter vivos does not differ in any material respect. It is unlikely – even very unlikely – that the evidence adduced on the question of inter vivos capacity would not include all the evidence that could be adduced also on testamentary capacity.

9. The proposed cross-defendants, Ms Maclarn and Ms Bristow, have each made affidavits in the proceedings, which have been filed in the plaintiff's case and which are plainly enough supportive of the contention that the plaintiff lacked capacity in 2004 and subsequently. It seems to me that, to the extent that Civil Procedure Act, s 22(2), imposes a restriction there is a sufficient relationship between the present proceedings and its proposed cross-claim that the Court could grant leave to bring the cross-claim in these proceedings.

10. The cross-claim claims only declaratory relief. The jurisdiction of the Court to grant declaratory relief is admittedly a very wide one, which is constrained more by discretion than by jurisdictional limits. Some of the conventional discretionary limits are where the question is hypothetical, or where it is a question that ought to be resolved in other proceedings (typically, criminal proceedings).

11. It seems to me that there can be no doubt that the Court would have jurisdiction to grant the declarations sought in the proposed cross-claim. However, it also seems to me that there is little doubt that, were it not for the proceedings instituted by the statement of claim in respect of inter vivos transactions, the Court would decline as a matter of jurisdiction to entertain a claim for a declaration as to testamentary capacity where it was sought, before the testator’s death, effectively to pre-empt a later dispute in a probate suit.

12. No doubt there are cases in which courts are required to make an assessment and decision about testamentary capacity while the testator remains alive. Applications for statutory Wills under s 18 and s 19 are perhaps the typical instance of this, where a person applying for leave to make a statutory Will must demonstrate that the proposed testator does not have testamentary capacity. But that aside, I think the Court would ordinarily decline to entertain an application during a testator's lifetime for a declaration that she or he had or did not have testamentary capacity at a particular time as a means of pre-empting the determination of that issue in a probate suit.

13. There are a number of reasons for that. One is that it cannot be gainsaid that there might be another Will. A second is that the possibility that the testator might regain capacity (in the case of some illnesses), or even that new treatments might be discovered that remediate deteriorating cognition in a case of dementia, could not be excluded. In addition to that, it is generally distasteful to litigate a testator's Will while he or she is still alive.

14. Another reason is that testamentary capacity is, of course, only one of the potential issues in a probate suit, so that it would not necessarily resolve the anticipated probate litigation. In such a suit, those propounding the Will would have to prove due execution and testamentary capacity and, knowledge and approval although the latter is often inferred from due execution and might have to resist defences of fraud or undue influence. To isolate one material fact in the cause of action for probate and make a declaration in respect of it while the others remained unresolved and undetermined would seem of little utility.

15. Accordingly, it seems to me if the proposed cross-claim stood alone, the Court would not grant the relief sought but would take the view that the issue was one to be determined if necessary in a probate suit. The question then is whether it makes any difference that the very closely analogous issue of capacity to make gifts inter vivos will have to be determined in the pending proceedings.

16. On the one hand, there are considerable apparent factors of convenience that favour that course. In particular, as I have said, it seems to me that no additional evidence is likely to be required, and the persons most likely to be interested in opposing testamentary capacity will be witnesses in the proceedings in any event. In other words, it seems to me there is a substantial concurrence of issues and evidence, and the potential to avoid having substantially the same question litigated twice.

17. But there are also considerations that point in the other direction. At this stage the proposed second and third cross-defendants are not parties to the proceedings and will not be bound by the result. For that reason, though witnesses, they are not before the Court as parties and do not need their own legal representation. Were they joined as cross-defendants, then they would, of course, be entitled to be represented in the proceedings and they would practically be forced to incur the costs of being parties at a time when they do not wish to do so and when it is conceivable, if unlikely, that they may never have to do so.

18. The next is that the savings to be achieved by pre-empting the issue of testamentary capacity are, it seems to me, limited. A probate suit would not necessarily be avoided, for example on the questions of due execution, knowledge and approval, and undue influence. Notwithstanding the few occasions on which that defence has succeeded, the prospect that it would be raised seems not at all unlikely, given that a similar issue is raised in the statement of claim. And as the concepts of undue influence inter vivos and in the setting of wills involve quite different tests, the resolution of the undue influence case inter vivos would not necessarily resolve the case concerning the will. Nor would resolution of the question of testamentary capacity preclude family provision proceedings. In those circumstances, it does not seem to me that resolving that question now by forcing parties to litigate it, who do not at this stage wish to litigate it, will contribute, in any material way, to avoiding litigation after the death of the deceased, if one or other of the parties are minded to bring such litigation.

19. The principal rationale advanced for the cross-claim is a desire to procure the result that the proposed second and third cross-defendants be bound by the decision of this proceeding, in which they will be witnesses, but by which they will not be bound unless joined as a party. However, the law does not generally sanction or encourage the joinder of persons as co-defendants or cross-defendants on the application of a defendant, merely for the purpose of creating an estoppel against them. In Walker v Commonwealth Trading Bank of Australia (1985) 3 NSWLR 496, Needham J said (at 501F):

While it is true that the administration of justice requires that litigation should be completed as soon as possible and that issues should not be relitigated, there is no hint of that principle in rule 8(1)(b) [that is, the rule which governs joinder of parties], except in the case where the joinder is 'necessary'. The matter in dispute in the proceedings is whether the payments were void as preferences. The plaintiff asserts and the defendant denies. There is no suggestion by the defendant that it will fail to put before the court all the matters which should, in its and the mortgagors' interests, be so placed. I am not able to see how the joinder of the mortgagors is necessary to ensure that all matters in dispute in these proceedings may be effectually and completely determined and adjudicated upon. That joinder is sought only so that they might be bound by the judgment. That would, no doubt, be convenient to the defendant, but no issues would arise between the defendant and the mortgagors in the proceedings, and there must be some doubt as to whether an estoppel would arise as between the defendant and the mortgagors as to the issue of preference.

20. I accept that there are additional factors in the present case not present there – because, in particular, there would be issues between the defendant/cross-claimant and the cross-defendants. But those issues are ones which, ordinarily, the Court would not entertain as a separate question prior to the death of the deceased in order to foreclose a probate suit raising the same issue.

21. That, it seems to me, is the critical reason why it really does not make a difference in the present case that the statement of claim is on foot. Essentially, what is sought is to compel the proposed cross-defendants to be party to proceedings to which they are not necessary parties, for the purpose of precluding them from later raising a like issue, if they ever wish to do so in probate proceedings, when determination of the issue will not foreclose probate proceedings on other issues, or family provision proceedings.

22. For those reasons, I decline to grant leave to file the cross-claim.

23. The Court orders that paragraph 2 of the notice of motion filed 2 October 2014 be dismissed with costs.

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Decision last updated: 27 February 2015