Busch v Busch
[2001] WASC 351
BUSCH -v- BUSCH & ORS [2001] WASC 351
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 351 | |
| Case No: | CIV:2552/2000 | 17 DECEMBER 2001 | |
| Coram: | PULLIN J | 19/12/01 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | GWENDOLINE BARBARA BUSCH KEVIN WILLIAM BUSCH ANNE DOROTHY FAIRHEAD REGISTRAR OF LAND TITLES |
Catchwords: | Legal practitioners Alleged conflict Application to restrain solicitors from acting for the plaintiff |
Legislation: | Nil |
Case References: | Mills v Mills (1938) 60 CLR 150 Afkos Industries Pty Ltd v Pullinger Stewart (A Firm) [2001] WASCA 372 Clay v Karlson (1997) 17 WAR 493 Grimwade v Meagher [1995] 1 VR 446 Hoad v Nationwide News Pty Ltd (1998) 19 WAR 468 Nangus Pty Ltd v Charles Donovan Pty Ltd [1989] VR 184 Newman v Phillips Fox (1999) 21 WAR 309 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
KEVIN WILLIAM BUSCH
First Defendant
ANNE DOROTHY FAIRHEAD
Second Defendant
REGISTRAR OF LAND TITLES
Third Defendant
Catchwords:
Legal practitioners - Alleged conflict - Application to restrain solicitors from acting for the plaintiff
Legislation:
Nil
(Page 2)
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr D L Jones
First Defendant : Mr G M Abbott
Second Defendant : Mr G M Abbott
Third Defendant : No appearance
Solicitors:
Plaintiff : Beere May & Meyer
First Defendant : David McCashney
Second Defendant : David McCashney
Third Defendant : No appearance
Case(s) referred to in judgment(s):
Mills v Mills (1938) 60 CLR 150
Case(s) also cited:
Afkos Industries Pty Ltd v Pullinger Stewart (A Firm) [2001] WASCA 372
Clay v Karlson (1997) 17 WAR 493
Grimwade v Meagher [1995] 1 VR 446
Hoad v Nationwide News Pty Ltd (1998) 19 WAR 468
Nangus Pty Ltd v Charles Donovan Pty Ltd [1989] VR 184
Newman v Phillips Fox (1999) 21 WAR 309
(Page 3)
1 PULLIN J: This is an application by the first and second defendants for orders which will have the effect of restraining Beere May & Meyer continuing to act as solicitors for the plaintiff.
2 The present proceedings involve a claim by the plaintiff that she and her now deceased husband transferred property at 165 Kent Street, Busselton to their son Kevin, who is the first defendant, "for natural love and affection". It is said that this transfer was signed by the plaintiff and her husband as a result of misrepresentations and conduct which would attract the intervention of equity. The property has now been sold and, using the proceeds, Kevin and the second defendant purchased a block. The plaintiff seeks various remedies, including a declaration that the transfer was void, an account, damages and other prayers for relief.
3 The plaintiff's daughter, Mrs Shephard, who is a half sister to Kevin Busch, and Mrs Shephard's husband are the donees of an enduring power of attorney made by the plaintiff on 28 September 2000. There has been a rather unedifying series of appointments and revocations of powers of attorney. On 18 January 1999, the plaintiff executed an enduring power of attorney appointing Kevin as her attorney. This was revoked on 26 July 2000, and Mrs Shephard and her husband were appointed attorneys on 7 September 2000. On 27 September 2000, the plaintiff revoked that power of attorney, and on 28 September 2000, again appointed Kevin as her attorney. The plaintiff says in an affidavit:
"I did that, on the basis of conversations I had with Kevin at or about that time in which he told me that he would give half of the value of my Kent Street house to my daughter Shirley."
4 The plaintiff then says that she realised, on or about 6 October 2000, that Kevin did not intend to give half of the value of the house to Shirley, and she then revoked the power of attorney which had been granted to Kevin and reappointed Mrs Shephard and her husband as her attorneys.
5 This sequence of events must excite considerable concern in the Court about the plaintiff's capacity to understand what is going on. She is in her early nineties I have been provided with a letter from Dr M I Reeve, dated 19 August 2000, which refers to the plaintiff having a history of "numerous transient ischaemic attacks and mini strokes resulting in some dyspraxia of gait and impaired performance on a mini-mental examination where she scored 20/30".
6 However, the report concludes, after referring to some of the tests which were administered:
(Page 4)
- "Her memory is only mild [sic] impaired and her understanding of her financial situation is quite good. … I saw no evidence of coercion and, from a medical point of view, I believe this lady is mentally competent to decide her affairs."
7 On the basis of that report, which is unchallenged, I will proceed on the basis that the plaintiff is competent to make decisions about the conduct of this litigation.
8 It appears that up until 1999, Mrs Shephard believed that she would receive one half of the estate of the survivor of the plaintiff or her husband. She believed that the estate would include 165 Kent Street. Mrs Shephard says she was advised of this by the plaintiff and her husband. Mrs Shephard also deposes that she was told by the plaintiff and her husband that they had helped Kevin buy 160 Kent Street, and that they had mortgaged 165 Kent Street to assist Kevin in buying his property.
9 In November 1998, Mrs Shephard took steps to have the plaintiff and her husband move into the William Carey Court Nursing Home. This required a payment up front of approximately $70,000. Mrs Shephard then decided that the way to raise that money would be to mortgage or sell the Kent Street property. In January 1999, the plaintiff suffered a stroke and had to be taken to hospital. This brought on the need to discuss the admission of the plaintiff and her husband to William Carey Court. It was only at this stage that Mrs Shephard discovered that Kevin owned 165 Kent Street. In about May or June 2000, Mrs Shephard then saw that the property at 165 Kent Street had a real estate agent's sign with a "sold" sticker attached.
10 As a result of this, and as a result of obtaining the wills of the plaintiff and her husband, Mrs Shephard went to see Mr Jon Meyer, of Beere May & Meyer, "in relation to the matter and received advice". In a later affidavit, Mrs Shephard refers to that sentence and adds:
"The advice which I received from Mr Meyer was that it would be necessary for him to see my mother, the Plaintiff in relation to the matter and obtain her instructions."
11 The affidavit continues:
"After my meeting with Mr Meyer, arrangements were made for myself and my mother to attend his offices and that took place on the 26th of July 2000. At the time that Mr Meyer provided advice to my mother I left the room.
(Page 5)
- The plaintiff subsequently advised me that she had revoked a Power of Attorney that had previously been granted to my brother Kevin and that she had instructed Mr Meyer to prepare another Power of Attorney, appointing myself and my Husband William James Shephard as her Attorneys."
12 After the proceedings were commenced, Mrs Shephard says that she has received advice from Beere May & Meyer about procedural developments and these have been passed on to the plaintiff. Mrs Shephard also deposes:
"I have also driven the Plaintiff from her residence at William Carey Court, to the offices of Beere May & Meyer, or alternatively arranged for a representative from Beere May & Meyer to attend William Carey Court to see the Plaintiff. At all times when such meetings have taken place, either at the offices of Beere May & Meyer or at William Carey Court in Busselton, I have been absent from the room at all times whilst the Plaintiff discussed the case with her solicitors and provided them with instructions."
13 After the writ had issued the plaintiff made an application for an injunction to prevent the sale of 160 Kent Street and the block. The application was supported by affidavits from Mrs Shephard and her husband. In each case the affidavit contains some hearsay evidence which is preceded with the statement, "I am informed by my solicitors and believe …".
14 The affidavits also reveal that Mr and Mrs Shephard had only one previous contact with those solicitors, in February 2000, when the firm prepared wills for Mr and Mrs Shephard.
The basis for the application
15 The first and second defendants submit that there is a potential for the solicitors' instructions to arise as the result of the resolution of a conflict involving the Shephards' duty and interest. It is said that Mr and Mrs Shephard have an interest in the outcome of the case. If the case is successful, and if the plaintiff's will and testament is as Mrs Shephard believes it will be, then she will be a beneficiary of some of the fruits of the action. It is said that there is a real and sensible possibility that the action is, or will be, "driven" by Mrs Shephard. It is submitted that there is potential for Mrs Shephard to be in a position where she must decide
(Page 6)
- between her potential to gain if the action proceeds and the interests of the plaintiff. It is said that an example of this would arise if Mrs Shephard were involved in the negotiation of a compromise of the action, including any discussions that Mrs Shephard may have had with the plaintiff in deciding a range of settlement figures. It is pointed out that this occurred during a mediation conference which occurred in these proceedings. The affidavit evidence, however, reveals that Mr Winburn-Clarke took instructions from the plaintiff before the mediation conference and that those instructions involved a direction that settlement was only to take place within a range nominated by the plaintiff. Mr and Mrs Shephard were to have a discretion to settle within that range. In fact, during the mediation conference Mr Winburn-Clarke says that he telephoned the plaintiff and spoke to her.
16 This first complaint, namely that the solicitors' instructions may be given by the Shephards, is a problem - if it is a problem - which will exist even if an order is made restraining these solicitors from acting and if another firm is appointed. The new firm would be in the same situation.
17 This complaint is said to be the gravamen of the complaint by the first and second defendants. If there were a real basis for this complaint, it is surprising that the first and second defendants have not applied to the Guardianship and Administration Board for an order revoking the enduring power of attorney granted to Mr and Mrs Shephard, or appointing a substitute donee of the power. When questioned about this, counsel for the first and second defendants confirmed that no such application had been made but that such an application was under consideration. I should add immediately that those comments are not to be taken as a suggestion that an application should be made to the Board.
18 In my opinion, the duty and interests of the Shephards are not obviously in conflict. The situation is similar to the situation of a director who is also a shareholder in a company. If the director gives instructions to solicitors concerning litigation being brought by the company, the submissions made by the applicant here would suggest that such a director could never be involved in giving instructions. That will not be so if the director keeps in mind that he or she must at all times promote the interests of the company: see Mills v Mills (1938) 60 CLR 150.
19 I know that the position of a director of a company and the rules developed in relation to directors, have had to take account of the particular realities of corporate life, but it does show that a fiduciary is not necessarily acting in a situation of conflict just because they have a
(Page 7)
- personal interest in the outcome of litigation where the fiduciary gives instructions on behalf of his or her principal to the solicitors conducting the litigation for the principal.
20 In my opinion, unless some complaint can be directed at the solicitors themselves, they should not be disqualified merely because Mrs Shephard has a potential personal interest in the outcome. The solicitors are clearly conscious of the need to make sure that instructions are taken from the plaintiff.
21 What then are the complaints about the conduct of the solicitors themselves? It is submitted that the solicitors act for Mr and Mrs Shephard. It is said, therefore, that that puts the solicitors in a situation of conflict and it is impossible for them to act for the plaintiff and for the Shephards. This allegation that the solicitors act for the Shephards is based upon three pieces of evidence. First, it is noted that the solicitors in February 2000 made a will for Mr and Mrs Shephard. Secondly, it is said that after Mrs Shephard found out about the land being in Kevin's name, she went to see Mr Meyer, of Beere May & Meyer, for advice. Thirdly, it is said that in the affidavits filed in these proceedings, Mr and Mrs Shephard used the phrase "I am informed by my solicitors and believe …".
22 I will deal with each of those three pieces of evidence in turn.
23 The fact that the firm made a will for Mr and Mrs Shephard does not mean that the firm is acting for Mr and Mrs Shephard on a general basis. They are not acting for the Shephards in relation to this case.
24 As to the second point, it is true that Mrs Shephard went to see Mr Meyer, but the only evidence before the Court is that Mr Meyer responded by saying that it would be necessary for him to see the plaintiff, which he then did, and saw the plaintiff in the absence of Mrs Shephard. On that basis, it was clear that the solicitors, having been approached, then took instructions from the plaintiff. They did not thereby act for the Shephards.
25 Finally, the reference in the Shephards' affidavits in these proceedings to Beere May & Meyer being "my solicitors" is explained as being a mistake. Mr Winburn-Clarke says:
"This phrase is a standard phrase which I use when introducing any documents into an Affidavit which I have obtained on behalf of a client. The phrase has become so routine that when
(Page 8)
- I was drafting Affidavits in this case that standard phrase was used in the Affidavits of Mr and Mrs Shephard even though they were not my clients and were deponents swearing Affidavits on behalf of my client. At no time, have I acted on behalf of Mrs Shephard or Mr Shephard in relation to this matter."
26 There was no cross-examination and no contradictory evidence. I therefore accept that explanation.
27 As a result, I find that there is no foundation for the complaint that there is any conflict. The solicitors act as solicitors for the plaintiff and do not act, and have not acted, for Mr and Mrs Shephard in relation to this matter.
28 As a result, I dismiss the application.
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