(The Honourable Justice Kelly, The Honourable Justice Bampton and The Honourable Justice Doyle)
16 August 2018
SUCCESSION - FAMILY PROVISION - APPEALS
SUCCESSION - FAMILY PROVISION - PROCEDURE - TIME FOR MAKING APPLICATION - EXTENSION OF TIME - APPLICATION TO BE BEFORE FINAL DISTRIBUTION
EQUITY - GENERAL PRINCIPLES - FIDUCIARY OBLIGATIONS - GENERAL PRINCIPLES
Appeal from a decision dismissing a claim for provision under the Inheritance (Family Provision) Act 1972 (SA), and various related claims, and ordering summary judgment.
The respondents are the executors of the estate of the deceased. The appellants are beneficiaries of the deceased’s estate. The deceased’s estate was valued for probate purposes at $434,542.02. Probate was granted on 23 February 2015. In April 2015, the executors distributed part of the estate (approximately $81,000 in cash) to the first respondent as beneficiary, distributed another part ($30,000 in cash) to a third-party beneficiary and distributed a house property at Berri to the first respondent as a beneficiary. The undistributed asset of the estate is the sum of $60,000 which, under the will, is to be distributed to the appellants.
The appellants issued these proceedings seeking orders for additional provision in their favour. The proceedings were not served on the respondents until 31 August 2015, eight days after the expiration of the six month limitation period prescribed by s 8(1) of the Inheritance (Family Provision) Act 1972 (SA).
In July 2016, the appellants sought an extension of time within which to bring their claim and an order for provision. The appellants also alleged that the executors owed and breached a fiduciary duty to the appellants as potential claimants under the Inheritance (Family Provision) Act 1972 (SA).
Held per Doyle J (Kelly and Bampton JJ agreeing), dismissing the appeal:
1. In the case of a partial distribution of an estate, the Court retains a discretion to grant an extension of time under s 8(2) of the Inheritance (Family Provision) Act 1972 (SA). However, if the extension of time is granted, the claim will be confined to the part of the estate which has not been distributed. The previous distributions cannot be disturbed in any way, including by any order for provision in respect of the distributed asset. The appellant’s claims for provision will thus be confined to the $60,000 to which they are already entitled and hence will fail.
2. The respondent executors are not liable to account for the premature distributions made by them. Nor can there be any liability on the part of the beneficiaries who received the distributions in the circumstances of this case.
3. Executors do not owe fiduciary duties to claimants or potential claimants under the Inheritance Act (Family Provision) Act 1972 (SA). The executor’s fiduciary duties and liability are dependent upon the claimant establishing their entitlement to provision.
4. The appellants’ claims have no reasonable basis.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Brooks & Anor v Young & Ors [2018] SASCFC 81
Case
[2018] SASCFC 81
Decision Date
CaseChat Overview and Summary
This appeal concerned a dispute between the plaintiffs, Raymond and Trevor, and the defendants, Rosemary and Robert, concerning the estate of their deceased father. The plaintiffs alleged that they were not properly informed about the contents of the deceased's last will, dated 29 February 2012, and sought to challenge its terms. The defendants, who were the executors of the estate, had obtained a grant of probate on 23 February 2015 and subsequently made distributions from the estate. The primary judge had granted summary judgment in favour of the defendants, dismissing the plaintiffs' action, and this appeal followed.
The central legal issues before the Full Court of the Supreme Court of South Australia were whether the primary judge erred in concluding that the plaintiffs' claims had no reasonable basis, thereby entitling the defendants to summary judgment under Rule 232 of the Supreme Court Civil Rules 2006 (SA). This required the Court to consider the applicable principles for summary judgment, particularly in circumstances where contested issues of fact might arise, and to determine if the legal issues presented were sufficiently clear to warrant summary dismissal.
The Court applied the principles for summary judgment, noting that while the power to dismiss an action summarily should be exercised with caution, the test requires the Court to be satisfied that the claims have no reasonable basis or prospect of success. The Court acknowledged that summary judgment is generally not appropriate where the outcome depends on contested facts or complex legal issues intertwined with those facts. However, if a careful analysis of the legal issues reveals a clear outcome, and the claim lacks a reasonable prospect of success, summary judgment is permissible to save time and expense. In this instance, the Court proceeded on the assumption that the facts alleged by the plaintiffs were proved, as accepted by the defendants, to determine the determinative legal issues.
The Court found that the primary judge had correctly concluded that the plaintiffs' claims had no reasonable basis. The evidence indicated that Raymond was provided with a copy of the grant of probate and the deceased's last will on 8 April 2015, and was informed that the executors were in a position to distribute the estate. This notice was sufficient to inform Raymond of the will's terms and the impending distribution. The Court held that, on the assumed facts, the plaintiffs' claims did not have a reasonable prospect of success, and therefore, the appeal was dismissed.
Orders
Orders of the court
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Background
Background to the litigation
Here, if the matter were to proceed, there will likely be some contested issues of fact. Thus, in order for the matter to be determined summarily, the defendants accept that the legal issues that they contend are determinative must be considered on the assumption that the facts alleged by the plaintiffs are proved. That is the basis upon which the primary judge approached the matter, and it is the basis upon which this Court must approach the matter.Factual background That said, there does not appear to be any significant dispute about the essential chronology of events. The key matters have been set out in the introductory section of these reasons. The following is a summary of the factual context in which these events occurred. It draws heavily upon the trial judge’s summary, which was not challenged on appeal. The deceased’s last will, the terms of which are summarised earlier in these reasons, was dated 29 February 2012. It replaced an earlier will dated 15 December 2011 in which the deceased had left the residuary estate equally to each of his children. The deceased died on 27 September 2014. Raymond claims that at the funeral a few days later Rosemary told him that she did not know the location or content of the will. On 5 October 2014, the deceased’s children attended Raymond’s house. Rosemary claims that on that occasion she informed her siblings that a solicitor, Mr Kudra, had prepared and was holding a will for the deceased and that he would attend to the administration of the deceased’s estate. She claims that she gave each of her siblings Mr Kudra’s business card and said that they could contact him if they wanted any information.[13] [13] I understand that Rosemary contests Raymond’s version of their interaction at the funeral, and that Raymond contests Rosemary’s version of their interaction at Raymond’s house. For the reasons mentioned, it is appropriate to proceed on the basis of Raymond’s version of events, this being the most favourable to the plaintiffs. Through Mr Kudra, Rosemary and Robert applied for a grant of probate which was issued to them on 23 February 2015. On 8 April 2015, Mr Kudra wrote to Raymond at his PO Box address providing him with a copy of the grant of probate with the deceased’s last will. The letter advised that the executors were in a position to distribute the estate and for that purpose he requested Raymond’s bank details to deposit his legacy of $30,000. From that date, Raymond was on notice of the terms of the will, the date probate was granted and that the executors considered they were in a position to distribute the estate.[14] [14] It was not suggested that Trevor was in any different position. After this letter was sent to Raymond, and pursuant to the terms of the deceased’s will, the executors made the following payment and distributions on dates between 10 and 18 April 2015:· $6,595 was paid to the executors’ solicitors for their fees.· $81,677.89 was distributed to Rosemary.· $30,000 was distributed to Margaret. · The Berri property was distributed by way of registered transfer to Rosemary.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
His Honour concluded that the defendants were thus entitled to summary judgment, and dismissed the plaintiffs’ action. This is an appeal from that decision. The grounds of appeal are essentially that his Honour erred in concluding that there was no reasonable basis for any of the plaintiffs’ claims.Summary judgment principles The defendants’ application sought summary judgment under r 232 of the Supreme Court Civil Rules 2006 (SA). To succeed, the defendants were required to satisfy the Court that the plaintiffs’ claims had no reasonable basis. As the authorities make plain, the power to dismiss an action summarily is not lightly to be exercised.[8] While caution in exercising the power is thus appropriate, the authorities also make it plain that a test focusing upon the claims having a reasonable basis, or reasonable prospect of success, calls for a more liberal approach to the exercise of the power to summarily dismiss than was propounded in earlier decisions such as Dey v Victorian Railways Commissioners[9] and General Steel Industries Inc v Commissioner for Railways (NSW).[10] As the High Court recently acknowledged in Trkulja v Google[11] in the context of the similar Victorian test for summary judgment (“no real prospect of success”), it allows for the possibility of cases which may not be “hopeless” or “bound to fail”, but nevertheless do not have a real prospect of succeeding. [8] Spencer v The Commonwealth (2010) 241 CLR 118 at [24], [60].[9] Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 90-91.[10] General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130.[11] Trkulja v Google LLC (2018) 356 ALR 178 at [23] citing Spencer v The Commonwealth (2010) 241 CLR 118 at [56], [60]. The nature of the test is such that it will not ordinarily be appropriate to determine a matter summarily where the outcome is likely to turn upon contested issues of fact. Similarly, it will not ordinarily be appropriate to resolve complex or unsettled issues of law on a summary judgment application, at least not where their determination may be bound up in contested issues of fact. Trkulja v Google LLC[12] is an illustration of the caution that is necessary in such cases.[12] Trkulja v Google LLC (2018) 356 ALR 178 at [37]-[39]. However, I do not understand this need for caution to prevent a matter being determined on a summary basis if, after a careful or detailed analysis of the relevant legal issues, a clear outcome emerges. To the contrary, if such analysis leads the Court to be satisfied the claim does not have a reasonable prospect of success, then the evident intention of r 232 is to permit the Court to enter summary judgment and save the parties and the Court the time and expense of the proposed proceedings and trial. Here, if the matter were to proceed, there will likely be some contested issues of fact. Thus, in order for the matter to be determined summarily, the defendants accept that the legal issues that they contend are determinative must be considered on the assumption that the facts alleged by the plaintiffs are proved. That is the basis upon which the primary judge approached the matter, and it is the basis upon which this Court must approach the matter.Factual background