Bronkhorst v Lloyd

[2015] NSWSC 1618

Supreme Court

New South Wales

Medium Neutral Citation:

Bronkhorst v Lloyd [2015] NSWSC 1618

Hearing dates:

30 October 2015

Date of orders:

30 October 2015

Decision date:

30 October 2015

Jurisdiction:

Equity

Before:

Slattery J

Decision:

Adjournment refused. Defence struck out. Account ordered. Balance of Motion stood over to 5 February 2016. Costs reserved.

Catchwords:

CIVIL PROCEDURE - application to strike out a defence - where defence only pleads the general issue – the substance of any amended defence not disclosed.

 

CIVIL PROCEDURE - adjournment application - no satisfactory explanation to justify an adjournment

  EQUITY - circumstances where equity will decree an account - substantial sums withdrawn from the plaintiff mother's bank accounts during period that her daughter held an enduring power of attorney was an agent for her mother - withdrawals unexplained - no satisfactory reason why accounts have not been provided

Legislation Cited:

Civil Procedure Act 2005, s 61

Cases Cited:

Warman International Ltd v Dwyer (1995) 182 CLR 544

Texts Cited:

J.D. Heydon, M.J. Leeming and P.G.Turner, Meagher, Gummow and Lehane’s Equity: Doctrines & Remedies, 5th Edition, Heydon, Leeming and Turner (5th ed. 2014, Lexis Nexis).

Category:

Procedural and other rulings

Parties:

Plaintiff: Edna Frances Bronkhorst by her tutor NSW Trustee and Guardian
Defendant: Evelyn Lloyd

Representation:

Counsel:
Plaintiff: Mr V. Gray

    Solicitors:
Plaintiff: Stephen Moss, Slater and Gordon Lawyers
Defendant: Osman Samin, Macquarie Lawyers Burwood

File Number(s):

2015/79609

Publication restriction:

No

Judgment

1. Edna Bronkhorst appointed her daughter Evelyn Lloyd as her attorney on 5 March 2009 under an enduring power of attorney. Edna Bronkhorst is now aged 94 and suffers a number of the infirmities of age. After a contested hearing the Guardianship Tribunal of NSW revoked Evelyn Lloyd’s power of attorney on 11 January 2012 and appointed the NSW Trustee and Guardian (“the NSW Trustee”) as Edna Bronkhorst’s financial manager.

2. During Evelyn Lloyd’s term as attorney, and specifically in the two and a half year period from 16 March 2009 to 5 October 2011 (“the questioned period”), a total of $914,144.95 was withdrawn from two of her mother’s bank accounts. Edna Bronkhorst, as plaintiff, now brings these proceedings by her tutor, the NSW Trustee, seeking an account from Evelyn Lloyd, as defendant, of her dealings on these two bank accounts.

3. These reasons will henceforth refer to Edna Bronkhorst as “the mother” or “the plaintiff” and Evelyn Lloyd “the daughter” or “the defendant”.

4. The mother does not know what funds her daughter has applied from these accounts, nor does she know their destination. So the mother seeks an account in respect of her daughter’s application and expenditure of all of her mother’s funds whilst acting either under the power of attorney or ostensibly as agent for her mother in the questioned period.

5. Before the Court today is a Motion dated 7 September 2015 seeking that the daughter’s defence be struck out and part of the final relief be granted. The Court has decided for the reasons given that it will strike the defence out and will grant the relief sought on the Motion.

6. This Motion was heard in the Equity Division Applications List on Friday 30 October 2015. Mr V Gray of Counsel appeared for the mother and Mr O. Samin for the daughter. Mr Samin sought an adjournment of the hearing of the Motion, which application was refused for the reasons described below.

7. Mother seeks an Account from her Daughter

8. The mother commenced these proceedings by Summons dated 16 March 2015 seeking orders that: (1) the daughter provide verified detailed written accounts of her dealings as attorney or agent for her mother; (2) an opportunity be afforded to examine the daughter in respect of her written accounts; and (3) the daughter pay the mother such sum based on the written accounts as may seem just, together with interest.

9. After the commencement of the proceedings in March this year the mother filed a Statement of Claim on 24 April 2015 and the daughter her Defence on 5 June 2015. Requests for further and better particulars were sought and some replies were received in June and July 2015. The daughter issued a subpoena to the Commonwealth Bank of Australia (CBA) in July 2015 for information about the mother’s accounts with the CBA from which some of the questioned withdrawals occurred.

10. The plaintiff-mother takes the view that the Defence filed does not deny that the defendant-daughter acted as the plaintiff’s attorney or agent but nevertheless does not give any satisfactory explanation of why accounts, although requested for some time by the mother, have not been provided.

11. When the Guardianship Tribunal appointed the NSW Trustee to manage the plaintiff’s estate in January 2012, solicitors acting on behalf of the NSW Trustee wrote seeking information from the defendant about her management of the plaintiff’s estate during her period as attorney. The NSW Trustee sent letters seeking such information on 23 February 2012, 27 March 2012 and 31 January 2014. None of the letters in response provided anything like a satisfactory accounting for any of the mother’s funds that the daughter may have applied during her time as attorney, or otherwise as an agent. That is why the mother commenced these proceedings.

12. The principles that apply to the relief the mother seeks are clear. Equity will decree an account where although the right relied upon by the plaintiff is legal, the parties stand in a quasi-fiduciary relationship or a relationship of confidence, such as the relationship of principal and agent: J.D. Heydon, M.J. Leeming and P.G.Turner, Meagher, Gummow and Lehane’s Equity: Doctrines & Remedies, 5th Edition, Heydon, Leeming and Turner (5th ed. 2014, Lexis Nexis), [26] – [35]; and see also Warman International Ltd v Dwyer (1995) 182 CLR 544, at 556-562.

13. The Statement of Claim pleads that the defendant acting or purporting to act as the plaintiff’s attorney withdrew moneys from CBA Account number 110 between 16 March 2009 and 5 October 2011 and withdrew other moneys from the plaintiff’s SGE Credit Union (SGE) Account number 359 between 26 August 2010 and 30 June 2011. The particulars to the Statement of Claim show multiple transactions on both the CBA and SGE accounts during this period. The amounts withdrawn range from figures as high as approximately $180,000 to as low as approximately $200. In the CBA account various sums of approximately $20,000, $40,000 and $90,000 were withdrawn. And there were regular alleged withdrawals of $2,000, some on as many as 5 days in a row, from the SGE account.

14. In early July 2015 the then solicitor for the daughter said that on the information then available to the daughter she was unable to provide particulars about her dealings as attorney or agent. As to the CBA account, she wanted time to obtain certain documents from the CBA. As to the SGE account, the solicitor for the plaintiff-mother overcame information issues by supplying to the defendant-daughter the SGE account member statements for the relevant part of the questioned period that the SGE account was operated.

15. The daughter sought on 6 July 2015 the issue of a subpoena for the production from the CBA of bank statements recording transactions between 16 March 2009 and 5 August 2011. By 28 July 2015 the CBA had produced all documents sought by the subpoena. On 12 August 2015 the Court directed by consent that the daughter provide by 21 August 2015 responses to the mother’s requests for further and better particulars of the Defence.

16. The request for particulars of the Defence was well justified. The Defence as pleaded really only sought to obfuscate rather than to identify the true matters in issue with any clarity.

17. For example, in paragraph 3 of the Defence the defendant admits that she made some withdrawals from an account with the CBA as agent of the plaintiff between 16 March 2009 and 5 October 2011. But she does not admit that the withdrawals she made were from the CBA account 110 pleaded in the Statement of Claim, or that the withdrawals are those set out in Schedule 1 of the Statement of Claim or that she made such withdrawals as the attorney of the plaintiff. A similarly unhelpful plea is made in respect of the SGE account. The Defence leaves open that withdrawals from these accounts may have taken place as agent not under the power of attorney.

18. The requests for particulars, the first of which was made on 17 June, understandably sought a specification by date and amount of each of the withdrawals that the daughter did admit that she made from either the CBA or the SGE accounts. Those requests for particulars have not been answered notwithstanding that through the CBA subpoena and the SGE member accounts the daughter appears since late July to have been in full possession of all the documents which she needed in order to identify, and then supply particulars of, the transactions in which she had been involved.

19. The lack of a satisfactory response from the daughter prompted the mother to file the subject Motion, which seeks the striking out of the Defence and seeks the first stage of the final relief claimed in the Summons and Statement of Claim: namely that the daughter provide detailed written accounts as her mother’s attorney, or agent, during the questioned period.

20. The Motion first came before the Registrar on 14 September 2015, when there was no appearance for the daughter. The daughter was ordered to file and serve any affidavit in reply on the Motion by 7 October 2015 and the Motion was adjourned to 14 October 2015. The Plaintiff was ordered to inform the Defendant of the orders made on 14 September 2015.

21. That must have occurred, as the Defendant was represented before the Registrar on 14 October 2015. On that occasion the defendant’s solicitor informed the Court that he had only been recently instructed and required time to become better acquainted with the matter. The Registrar acceded to his request and the proceedings were adjourned and fixed for hearing on 30 October 2015.

22. The Daughter seeks an Adjournment

23. Today, 30 October, the solicitor for the defendant, Mr Samin, sought another adjournment of the hearing. The Court refused the application. Mr Samin said that his client had recently come out of a period in hospital and had then gone overseas to Indonesia and was not expected to return for another week. He said that he had spoken to his client after she had come out of hospital and before she went to Indonesia but he did not have any instructions to enable him to contest the matter that day.

24. The Motion should not be adjourned. Mr Samin failed to give a satisfactory explanation to the Court of any of the basic matters, which might perhaps have justified an adjournment. First, he had filed no medical or other evidence to explain the daughter’s alleged inability to be ready for the hearing set down for today despite the fact that the matter had been adjourned to today at the daughter’s request.

25. Secondly, he could give no coherent explanation as to why his client had decided to go overseas when this matter had been listed since 14 October for a hearing today.

26. Thirdly, he could not inform the Court from his contact with his client so far: whether the Defence was proposed to be amended; what new defences any Amended Defence might be expected to be plead; whether the particulars requested would now be given; or when he would be able to contact his client after her return.

27. There is no rational basis to allow this matter to be adjourned. Many factors suggest it should not be adjourned at this time. One factor is the significant age of the plaintiff-mother. Another is that there are two and a half years’ worth of unexplained transactions with the mother’s funds, some of them probably by her daughter-fiduciary, during the questioned period; the evidence does not suggest anyone else had authority to operate the CBA and SGE accounts. Yet another is that the daughter has given singularly unhelpful answers to requests for her to account for her stewardship of her mother’s funds. And another is that the last of the funds in question was dealt with over 4 years ago. All these factors compel the conclusion that this matter should be dealt with urgently.

28. Consideration of Relief on the Motion

29. The defendant has without satisfactory explanation failed to comply with the Court’s orders for her to answer the plaintiff’s request for particulars by 21 August 2015. The orders requiring answers to requests for particulars were necessary. The Defence only pleaded the general issue and did not identify the true matters the defendant proposed to put in issue.

30. The appropriate response to the defendant’s conduct is to strike out the Defence. The directions made for the answering of the requests for particulars were necessary for the speedy determination of the real issues between the parties: Civil Procedure Act 2005, ss 61(1) and (2). Non-compliance with such directions justifies the defence being struck out, as requested in the Motion: Civil Procedure Act 2005, s 61(3)(c). Given the defendant’s conduct to date I see no basis to allow the defendant to file an amended defence.

31. In the absence of the Defence the Court will now proceed to consider on the evidence whether the relief sought in the Motion should be granted.

32. The plaintiff has established that the defendant was her attorney or agent during the questioned period. She has also established that there are substantial unexplained transactions on both the CBA and SGE accounts during the questioned period. It is not in question that the defendant was able to operate these accounts as attorney or agent of the plaintiff during the questioned period. Nor is it in question on the evidence that the plaintiff-mother has sought and has not received any adequate explanation for the transactions on these accounts during the questioned period.

33. The Court will make an order for an account. No other relief will be granted at this stage. Any further relief can be considered when the defendant-daughter’s accounts are available for examination.

34. The plaintiff sought the provision of the accounts within 60 days. That would have meant that the time for provision of the accounts would have fallen within the Court’s vacation period. So the Court has decided to give the defendant until the Court resumes sitting in the 2016 Court term to complete the accounts. The accounts will not be required until 2 February 2016. This gives the defendant-daughter 94 days for the task, which should be ample time.

35. Conclusion and Orders

36. The Court has refused to adjourn the hearing of the Motion. For the reasons given the Defence will be struck out and the daughter will be required to provided a verified detailed written account of her dealings as attorney or agent for her mother during the questioned period.

37. Therefore the Court makes the following orders and directions on the plaintiff’s Motion dated 7 September 2016:

1. Strike out the Defence.

2. By 5pm on Tuesday 2 February 2016 the defendant shall file and serve on the plaintiff a verified detailed account (Account) (with each separate item in the statement of account numbered consecutively) of all moneys applied, expended or otherwise utilised by the defendant acting or purporting to act under the power of attorney executed by the plaintiff in favour of the defendant dated 5 March 2009 or otherwise as, or ostensibly as, agent for the plaintiff between 16 March 2009 and 5 October 2011, including:

(a)   Setting out the date and amount involved of each and every withdrawal of funds from any of the plaintiff's bank accounts including:

(i)   Commonwealth Bank of Australia Account 110; and

(ii)   SGE Credit Union Limited account numbered 359 and each and every other application of funds of the plaintiff so far as not implemented by withdrawal from any of her bank accounts;

(b)   Specifying, in respect of each such withdrawal or other application of funds, to whom (by name) the amount was paid and the purpose for which the amount was paid or applied;

(c)   Vouching each expenditure item by attaching the original receipt or other document supporting the transaction.

(3)    The parties are at liberty to restore the proceedings on 3 days’ notice before Slattery J to permit the defendant to issue subpoenas or any other Court process to any third party to assist her in complying with the terms of Order 1.

(4)   Adjourn all the other relief sought in the Summons and Motion to Friday, 5 February 2016.

(5)   Reserve costs.

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Decision last updated: 02 November 2015