Clement v Chambers
[2022] WASC 246
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: CLEMENT -v- CHAMBERS [2022] WASC 246
CORAM: STRK J
HEARD: 22 JULY 2021
DELIVERED : 5 AUGUST 2022
FILE NO/S: CIV 1112 of 2021
BETWEEN: MELANIE JOY CLEMENT
Plaintiff
AND
SUZANNE SARAH CHAMBERS as executrix of the will of ROBERT CHARLES CHAMBERS
First Defendant
SUZANNE SARAH CHAMBERS
Second Defendant
Catchwords:
Practice and procedure - Application for summary judgment made by the defendants - Leave required to bring the application out of time - Whether there is no real question to be tried - Turns on own facts
Legislation:
Family Provision Act 1972 (WA), s 6(1), s 7
Rules of the Supreme Court 1971 (WA), O 16 r 1
Trustees Act 1962 (WA), s 94
Result:
Leave to bring the application out of time granted
Application dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | BW Ashdown |
| First Defendant | : | R Nash |
| Second Defendant | : | R Nash |
Solicitors:
| Plaintiff | : | Eastwood Law |
| First Defendant | : | Gregson & Associates |
| Second Defendant | : | Gregson & Associates |
Case(s) referred to in decision(s):
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Anderson v Effexseven (1999) 10 ANZ Ins Cas 61-424
Bank of Western Australia v Stein [2005] WASC 43
Bankwest (a division of CBA) v Mann [2015] WASC 187
Barrick Gold of Australia Ltd v FL Smidth Inc [2007] WASC 186
Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256
Bride v Australian Bank Ltd (Unreported, WASC, Library No 950632, 23 June 1995)
Brooks v Young [2018] SASCFC 81; (2018) 131 SASR 365
Burgess v Burgess [2018] WASC 279
Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18
Dey v Victorian Railway Commissioners (1949) 78 CLR 62
Esber v Commonwealth [1992] HCA 20; (1992) 174 CLR 430
Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
Fodor v Simudvarac [2014] VSC 227; (2014) 13 ASTLR 418
Gel Custodians Pty Ltd v Dewar [2014] WASC 177
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125
Gerovich v Gerovich [2018] WASC 153
Hee v Nyoni [2014] WASC 44
Hogarth v Johnson [1987] 2 Qd R 383
Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41
HSBC Bank Australia Ltd v Mavaddat [2015] WASC 153
Jacka Nominees Pty Ltd v Edwards Karwacki SMI (Unreported, WASC, Library No 920512, 12 October 1992)
Lashansky v Legal Practice Board of Western Australia [No 3] [2013] WASCA 260
Mataska v Browne [2013] VSC 62
McIntosh v McIntosh [2014] QSC 99
Michael v Nicholson (Unreported, Full Court of the Supreme Court of Western Australia, Library No 950660, 1 December 1995)
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Newport Power Pty Ltd v Barrack Gold of Australia Ltd [2008] WASCA 74
Pilmer v Duke Group Ltd [2001] HCA 31; (2001) 207 CLR 165
R v Falzon [2018] HCA 29; (2018) 264 CLR 361
Re Faulkner [1999] 2 Qd R 49
Re Whitehouse [1982] Qd R 196
Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118
Wallingford v Mutual Society (1880) 5 App Cas 685
Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598
Wendt v Orr [2004] WASC 28
Zaghloul v Bayly [2021] WASCA 125
TABLE OF CONTENTS
Introduction
Background
Benefits held by the deceased
The pleadings
Leave to apply out of time
Disposition concerning leave
The summary judgment application
Applicable principles
The parties' submissions
Disposition
Conclusion and orders
Sch A – Statement of Claim
Sch B – Defence
Sch C – Plaintiff's submissions pars 59 - 68
STRK J:
Introduction
This proceeding was commenced by the plaintiff, Melanie Joy Clement, by a writ of summons filed on 24 February 2021.
Ms Clement pleads that she was the de facto spouse of the late Robert Charles Chambers when he died on 1 May 2019. While the deceased and Suzanne Sarah Chambers had jointly applied for a divorce in about March 2019, the deceased was legally married to Ms Chambers when he died.
Ms Clement brings this proceeding against Ms Chambers in Ms Chambers' capacity as executor of the estate of the deceased, and in Ms Chambers' personal capacity.
In this proceeding, the dispute as between Ms Clement and Ms Chambers largely concerns the superannuation member benefits of the deceased. Broadly speaking, Ms Clement seeks that certain declarations be made concerning the existence of a duty and breach; seeks to have Ms Chambers' omissions as executor of the deceased's estate concerning the superannuation member benefits reviewed by the court; and also seeks the grant of consequential relief.[1]
[1] Plaintiff's submissions par 5; statement of claim (prayer for relief (a) - (f)).
Ms Clement has commenced a separate action in this court for provision to be made out of the estate of the deceased pursuant to the Family Provision Act 1972 (WA). Counsel for Ms Clement says that this action will determine whether certain superannuation member benefits properly form part of the deceased's estate (such that they may be subject to Ms Clement's claim for provision under the Family Provision Act).
By a chamber summons filed on 9 April 2021 in this proceeding, Ms Chambers in her capacity as executor and in her personal capacity seeks summary judgment against Ms Clement pursuant to the Rules of the Supreme Court 1971 (WA) (RSC) O 16 r 1. Ms Chambers requires leave to bring the application out of time.
By the chamber summons filed on behalf of Ms Chambers, orders were pressed in the following terms:
1. Declaring that, neither the first nor the second defendants owed the plaintiff a fiduciary duty given that as a matter of law no fiduciary duty exists between an executor and a potential claimant under ss6(1) and 7 of the Family Provision Act 1972 (WA).
2. As a consequence of order 1 of these orders, the plaintiff's claim is dismissed.
3. The plaintiff pay the defendant's costs on an indemnity basis.
3.1. In the alternative, on an ordinary basis taxed unless otherwise agreed.
At the hearing of the application, counsel for Ms Chambers read the affidavit of Mr Gregson, solicitor acting on behalf of Ms Chambers, sworn on 5 May 2021,[2] and relied upon a written outline of submissions filed on 11 June 2021 and responsive submissions filed on 2 July 2021.
[2] ts 2, 3 (22 July 2021).
Ms Clement opposed the application and at the hearing of the application, counsel read three affidavits: first, the affidavit of Mr Eastwood, solicitor for Ms Clement, sworn on 25 May 2021; secondly, the affidavit of Ms Clement affirmed on 18 May 2021; and thirdly, a further affidavit of Ms Clement affirmed on 2 June 2021.[3] Counsel for Ms Clement also relied upon a written outline of submissions filed on 22 June 2021.
[3] ts 2, 3 (22 July 2021).
At the hearing of the application, counsel for Ms Chambers made a number of concessions with respect to the application, which were appropriately made.
First, counsel accepted that a summary judgment application was not an appropriate vehicle to move for a declaration in favour of the applicant in the form of the first proposed order.[4]
[4] ts 12 - 13 (22 July 2021).
Secondly, counsel accepted that there was an arguable case that superannuation membership benefits held in what was described as the MLC Super Fund may have been paid by that fund to the estate of the deceased, but otherwise maintained that there was clear evidence that other superannuation membership benefits were amounts paid by the funds to Ms Chambers in her personal capacity.[5] Counsel explained that what Ms Chambers pressed by her application was that Ms Clement's action be dismissed, save for any claim in connection with the superannuation membership benefits that had been held in what was described as the MLC Super Fund.
[5] ts 6, 12 (22 July 2021).
After hearing the application I reserved my decision. For the reasons recorded below, while leave to bring the application out of time is granted, Ms Chambers' application for summary judgment is refused.
Background
The deceased and Ms Chambers married on 28 December 1991. Ms Chambers was the deceased's second wife. On 24 January 1997, the deceased executed a will in which he named Ms Chambers as the executor and sole beneficiary of his estate.
The deceased and Ms Chambers separated around 1 July 2014. Pursuant to orders made by the Family Court of Western Australia on 3 May 2017, the deceased and Ms Chambers effected a final alteration of property interests between them.[6] By the orders which were made by consent, the deceased and Ms Chambers were to each retain in full all superannuation held in their respective names by the trustee of any applicable superannuation fund, to the exclusion of the other party.[7]
[6] First affidavit of MJ Clement pars 14 - 16, MJC-3.
[7] Second affidavit of MJ Clement pars 7 - 8, MJC-21 and MJC-22.
Ms Chambers pleads that she and the deceased had reached an oral agreement on 22 March 2019 that their superannuation interests be paid to each other in the event of the death of either of the them. It is further pleaded that it was agreed as between the deceased and Ms Chambers that Ms Chambers would hold the whole of the net proceeds of the superannuation on discretionary trust (as to income and capital) as trustee for the benefit of the deceased's four children (and that the same situation would have occurred in reverse of Ms Chambers having predeceased the deceased).[8]
[8] Defence par 4.
On 26 March 2019, the deceased caused to be filed in the Family Court a joint application for divorce signed by the deceased and Ms Chambers, which lapsed by reason of the deceased's death.[9]
[9] First affidavit of MJ Clement pars 18 - 21, MJC-6 and MJC-7; second affidavit of MJ Clement, MJC-23.
Ms Clement deposed to having begun dating the deceased in about May 2016, and that she and the deceased commenced living together in about September 2016,[10] which is supported by a statutory declaration made by the deceased's sister, Glennis Barbara Keen.[11] Ms Clement deposed to and pleads that she was the de facto partner of the deceased when he died,[12] which is denied by Ms Chambers.[13] Ms Clement also pleads that she was at all material times from on or about 8 May 2016 the 'spouse' of the deceased within the meaning of that term pursuant to the Superannuation Industry (Supervision) Act 1993 (Cth).[14]
[10] First affidavit of MJ Clement par 6.
[11] First affidavit of M J Clement, MJC-1.
[12] First affidavit of MJ Clement par 5.
[13] Defence pars 3.1, 11.4.
[14] Statement of claim par 7(d).
On 27 May 2019, on behalf of Ms Clement, Avon Legal sent an email communication to Gregson & Associates, enquiring whether the firm acted for Ms Chambers. By that communication, Avon Legal also advised that it acted for Ms Clement, the de facto partner of the deceased; asked that future correspondence be sent care of Avon Legal; and requested that Ms Chambers refrain from taking any further action in relation to the estate until further communication from Avon Legal, which anticipated to be later that week.[15] In response, Mr Gregson of Gregson & Associates confirmed that he had instructions to act for Ms Chambers and indicated that until Mr Gregson heard or saw evidence to the contrary, there did not seem to be any reason to delay the process of obtaining a grant of representation.
[15] First affidavit of MJ Clement pars 28 - 29, MJC-10.
On 18 June 2019, Ms Chambers applied for a grant of probate of the deceased's will, which was made on 24 June 2019.
By letter dated 18 July 2019 addressed to Gregson & Associates, through her now solicitors, Eastwood Law, Ms Clement gave notice to Ms Chambers, as the named executor appointed under the deceased's will, of her intention to commence a claim for provision to be made out of the estate of the deceased pursuant to the Family Provision Act, in her capacity as the de facto spouse of the deceased.[16]
[16] First affidavit of MJ Clement par 25, MJC-9.
On 27 November 2019, Ms Clement commenced an action in the Supreme Court for provision to be made out of the estate of the deceased pursuant to the Family Provision Act.
The solicitors for Ms Clement requested that Gregson & Associates, on behalf of Ms Chambers in her capacity as executor, seek judicial advice pursuant to s 45 of the Administration Act 1903 (WA), as to any potential entitlement that the estate may have in respect of the superannuation funds,[17] which request was refused.[18] In the absence of an application for judicial advice, Ms Clement commenced this proceeding, and the action known as CIV 3036 of 2019 has been stayed pending in the determination of the same.[19]
Benefits held by the deceased
[17] Affidavit of CV Eastwood par 6, CVE-1; affidavit of CA Gregson par 4; plaintiff's submissions par 3.
[18] Affidavit of CV Eastwood par 8 CVE-2; affidavit of CA Gregson par 5, CAG-01; ts 6 - 7 (22 July 2021).
[19] Affidavit of CV Eastwood pars 7, 15; affidavit of CA Gregson pars 2, 9.
It is common ground that prior to his death, the deceased held superannuation membership entitlements with three superannuation funds, being the BT Super Fund, the WA Super Fund and the MLC Super Fund. Ms Clement pleads, and Ms Chambers admits, that the deceased as at the date of his death:[20]
(a)Had a member benefit entitlement in a superannuation fund operated by BT Funds Management Ltd and known as BT Super (BT Super Fund);
(b)Had a member benefit entitlement in a superannuation fund operated and known as WA Super and known as the WA Local Government Superannuation Plan (WA Super Fund); and
(c)Had a member benefit entitlement in a superannuation fund operated by NULIS Nominees (Australia) Ltd and known as MLC Super Fund (MLC Super Fund).
[20] Statement of claim par 14; defence par 11.
Between July and August 2019, Ms Chambers through Gregson & Associates applied to claim a death benefit from the funds. Annexed to the first affidavit of Ms Clement are communications issued on behalf of and received by Ms Chambers, secured by Ms Clement through discovery in this action.
WA Super Fund
By a letter dated 15 July 2019, Gregson & Associates wrote to WA Super Fund and enclosed with that communication a completed application to claim a death benefit form, with supporting documents. Among other things, Gregson & Associates indicted by the letter that they were instructed to have the funds paid into their law practice trust account, or alternatively to receive the same by cheque payable to the estate of the deceased.[21]
[21] First affidavit of MJ Clement par 30, 30.1, MJC-11.
Ms Clement pleads that the application to WA Super Fund was made by Ms Chambers as executor and/or in her own capacity.[22] Ms Clement further pleads that the application:
(a)listed Ms Chambers as the deceased's legal personal representative;
(b)stated that Ms Chambers was financially dependent on the deceased;
(c)did not state that Ms Chambers had permanently separated from the deceased;
(d)did not state that Ms Chambers had obtained final property settlement orders with respect to the deceased from the Family Court of Western Australia pursuant to the Family Court Act 1975 (Cth), or that those orders had been carried into effect; and
(e) did not list Ms Clement as the spouse or de facto partner of the deceased.
[22] Statement of claim par 19.
By a letter dated 30 January 2020, WA Super Fund wrote to Ms Chambers care of Gregson & Associates concerning a superannuation benefit which had become payable from that fund in the amount of $8,985.83. By that letter, Ms Chambers was advised that the Trustee of the WA Super Fund had determined that the benefit for the deceased was payable to Ms Chambers, and a cheque in that amount was enclosed.[23]
[23] First affidavit of MJ Clement par 30.5, MJC-15. See also statement of claim par 21; defence par 11.
In her defence, Ms Chambers admits the matters described at [27] and [28] above, but also pleads that she:[24]
(a)accurately described the nature of her relationship to the deceased as 'married';
(b)did not consider herself permanently separated from the deceased;
(c)accurately described the ongoing financial independence between herself and the deceased;
(d)did not consider, and still does not consider, Ms Clement as living in an interdependent relationship with the deceased; and
(e)was not under any legal or other obligation to notify the fund of the matters raised by Ms Clement. In this regard, Ms Chambers further pleads that even if there was a legal obligation to notify the fund and the fund was notified, it would not have resolved to pay the funds into the estate of the deceased as sought by Ms Clement.
BT Super Fund
[24] Defence par 11.
By a letter dated 23 July 2019, Gregson & Associates wrote to BT Financial Group and enclosed with that communication a completed application to claim a death benefit form with supporting documents on behalf of Ms Chambers, together with the deceased's children. Among other things, by that communication Gregson & Associates indicted that they were instructed to have the funds paid into their law practice trust account, or alternatively to receive the same by cheque payable to the estate of the deceased.[25]
[25] First affidavit of MJ Clement pars 30, 30.2, MJC-12.
Ms Clement pleads that the application:[26]
[26] Statement of claim par 16.
(a)in response to the question 'Please select the option that best describes the Member's marital status at the time of death':
(i)Ms Chambers stated that the deceased was 'married';
(ii)Ms Chambers did not state that the deceased was 'permanently separated from spouse or de facto partner';
(iii)Ms Chambers did not state that the deceased was in a 'de facto relationship';
(b)listed Ms Chambers as being the wife of the deceased and as being financially dependent on the deceased;
(c)did not include a date in response to the question 'date of divorce or permanent separation';
(d)did not state that Ms Chambers had permanently separated from the deceased;
(e)did not state that Ms Chambers had obtained final property settlement orders with respect to the deceased from the Family Court of Western Australia pursuant to the Family Court Act 1975 (Cth), or that those orders had been carried into effect; and
(f) did not list Ms Clement as the spouse or de facto partner of the deceased.
Ms Chambers admits the matters pleaded at par 16 of the statement of claim, reproduced at [31] above, but repeats that matters set out at [29] above.[27]
[27] Defence par 11.
By a letter dated 29 July 2019, BT Financial Group wrote to the estate of the deceased, care of Gregson & Associates, and advised that it had made a determination in relation to the recipients of the benefit and stated:[28]
[28] First affidavit of MJ Clement par 30.3, MJC-13.
Under the trust deed for the Account, on the death of a member, the Trustee is required to determine whether the member's superannuation benefits should be paid to one or more of the dependents or the member's estate.
As part of this process, the Trustee reviews all of the information and documentation previously asked for about the member's dependents and circumstances at the time of death. If the member made a discretionary nomination, the Trustee must also consider, but is not bound by, that nomination.
As a result of this process, the Trustee has decided the superannuation benefit should be paid as follows:
Name/Estate
Relationship
% of Benefit
Suzanne Sarah Chambers
Wife
100%
Please find below our requirements to pay the benefit:
1.a completed common reporting standards form by Suzanne Sarah Chambers.
2.a completed Payment of Benefit form by Suzanne Sarah Chambers.
Please note we are not able to pay the funds into a solicitors trust account. The benefit can be paid into a bank account in Suzanne Sarah Chambers name or via cheque in the name of Suzanne Sarah Chambers.
If you are not satisfied with this decision, superannuation law allows you and all other dependence to object to the trustee within 28 days of receiving this letter. The objection in writing, including certified copies of evidence of financial dependency and/or interdependency should be sent to:
…
If no objections are received within this period from you or other potential beneficiaries (dependents), the payment will be finalised.
…
Ms Clement pleads that on or about 27 August 2019 the sum of $411,258.19 was paid by BT Funds Management Ltd on account of the deceased's member entitlements and death benefits in the BT Super Fund and deposited into the solicitors trust account of Gregson & Associates, solicitors for Ms Chambers as executor and in her own capacity.[29]
[29] Statement of claim par 17; first affidavit of MJ Clement par 30.4, MJC-14.
Ms Clement also pleads that on or about 27 September 2019, the sum of $375,000 was paid to Ms Chambers from the solicitors trust account.[30]
MLC Super Fund
[30] Statement of claim par 18.
At par 22 of the statement of claim, Ms Clement pleads that on or about 12 August 2020, the sum of $2,585.83 was paid by NULIS Nominees (Australia) Ltd (MLC) on account of the deceased's member entitlements and death benefits in the MLC Super Fund into the solicitors trust account of Ms Chambers' solicitors.
Annexed to the first affidavit of Ms Clement is a letter dated 10 August 2020, by which MLC wrote to Ms Chambers directly, confirming that the amount of $2,585.83 had been transferred to the Gregson & Associates Law Practice Trust Account. The Payment Benefit Statement is addressed to the estate of the deceased.[31]
[31] First affidavit of MJ Clement par 30.6, MJC-16.
The pleadings
Given their relative brevity, it is convenient to reproduce at sch A to these reasons the statement of claim endorsed on the writ, and at sch B, the defence filed on behalf of Ms Chambers in her capacity as executor and in her personal capacity. (I note that while the second document is titled Statement of Defence & Counter Claim, no counterclaim was pleaded on behalf of Ms Chambers).
An 'executor's duty' and an alleged breach of that duty are pleaded in the following terms at pars 23 and 24 of the statement of claim:
23.The Second Defendant, including in her capacity as the First Defendant, at all material times owed a duty to:
(a)Identify, secure, collect and protect the assets of the estate of the Deceased, including the member account balance of the Deceased in each of the superannuation funds pleaded in paragraph 14 herein; and
(b)Apply for or otherwise seek to take all steps reasonably necessary to obtain payment to the estate of the Deceased of the member account balance of the Deceased in each of the superannuation funds pleaded in paragraph 14 herein.
24.In breach of the duties pleaded in paragraph 23 herein the Second Defendant, including in her capacity as the First Defendant:
(a)has failed refused and/or neglected to seek payment to the estate of the Deceased of the member account balance of the Deceased in each of the superannuation funds pleaded in paragraph 14 herein; and
(b)has received payments of moneys representing the member account balance of the Deceased in superannuation funds as pleaded in paragraphs 17, 18, 21 and/or 22 herein.
Ms Clement seeks relief in this proceeding in the following terms:
AND THE PLAINTIFF CLAIMS:
(a)A declaration that the Second Defendant, by reason of her capacity as the First Defendant, namely as executrix of the Will and estate of the late Robert Charles Chambers (deceased), owes a duty:
(i)to seek that the superannuation member account balances of the late Robert Charles Chambers (deceased) be paid to the deceased estate; and further
(ii)to not personally seek or accept payment of any such superannuation member account balances of the late Robert Charles Chambers (deceased);
(b) A declaration that the failure by the Second Defendant, by reason of her capacity as the First Defendant, to seek payment of, or otherwise receive amounts representing, the superannuation member account balances of the late Robert Charles Chambers (deceased) to the estate of the late Robert Charles Chambers (deceased) constitutes a breach of duty by the Second Defendant;
(c) That the omission of the Second Defendant, in her capacity as the Second Defendant, to seek payment of the superannuation member account balances of the late Robert Charles Chambers (deceased) to the estate of the late Robert Charles Chambers (deceased) be reviewed pursuant to section 94 of the Trustees Act 1962 (WA);
(d) A declaration that the amount representing the superannuation member account balances of the late Robert Charles Chambers (deceased), together with all interest accrued or accruing thereon:
(i) received by the First Defendant is held by the First Defendant as executrix of the Will and estate of the late Robert Charles Chambers (deceased) and comprises an asset of the estate of the late Robert Charles Chambers (deceased); and
(ii) received by the Second Defendant is held on constructive and/or resulting trust for the estate of the late Robert Charles Chambers (deceased) Plaintiff;
(e) An order directing the Second Defendant to transfer and make payment, or otherwise restore to the estate of the late Robert Charles Chambers (deceased), all amounts representing the superannuation member account balances of the late Robert Charles Chambers (deceased), together with interest or alternatively all interest accrued or accruing thereon as received by the Second Defendant; and
(f) Costs.
A defence was filed on behalf of Ms Chambers on 18 March 2021. It is structured in an unusual way, divided into three parts.
The first part is described as 'First Defence - Standing' and pleads to par 23 of the statement of claim, which is denied.
Ms Chambers pleads that no fiduciary duty exists between an executor and a potential claimant under s 6(1) and s 7 of the Family Provision Act. Ms Chambers further pleads that if such a duty existed, Ms Clement does not have any interest in the estate of the deceased because she is not a de facto wife with standing under s 7 of the Family Provision Act, nor does she meet the definition of any other person with standing under that section.
The second part is described as 'Second Defence - No conflict of interest / duty'. In the alternative to the first defence, Ms Chambers pleads that should the court find that Ms Clement have standing and the existence of a fiduciary duty owed by Ms Chambers to Ms Clement, Ms Chambers was not conflicted in her duty because the deceased expressly and implicitly consented to any potential conflict given:
(a)Ms Chambers is the named executor of the will;
(b)Ms Chambers is the universal beneficiary of the will and of the estate of the deceased;
(c)the deceased made valid nominations with all his superannuation funds with Ms Chambers as his preferred nominee; and
(d)Ms Chambers and the deceased met in person on 22 March 2019 and orally agreed that their superannuation interests would be paid to each other in the event of the death of either of them. Ms Chambers pleads that it was agreed that she would hold the superannuation proceeds on discretionary trust for the benefit of the deceased's four adult children.
The third part is described as 'Third Defence - Response to plaintiff's particulars of claim'. In this part, Ms Chambers pleads to pars 1 to 22 of the statement of claim.
Relevantly, Ms Chambers denies that her relationship with the deceased came to an end and they separated on or about 1 July 2014; that Ms Clement was the de facto spouse of the deceased as at the date of his death; and that Ms Clement was at all material times from on or about 8 May 2016 the 'spouse' of the deceased within the meaning of that term pursuant to the Superannuation Industry (Supervision) Act 1933 (Cth).
As to her communications with WA Super Fund and BT Super Fund, Ms Chambers makes the plea set out at [29] above.
Leave to apply out of time
An application for summary judgment pursuant to the RSC O 16 r 1(1) must be made within 21 days after appearance, or at any later time with the leave of the court.[32] An appearance was filed on behalf of Ms Chambers as first and second defendant on 24 February 2021, and the application for summary judgment was not made until 9 April 2021, being 44 days after appearance. Indeed, the application was not competent (that is, supported by affidavit verifying the facts upon which the application was based as required by the RSC O 16 r 1(2)) until 26 April 2021, some 61 days after the appearance was filed.
[32] RSC O 16 r 1(1).
It is well established that there are no set guidelines as to when leave to apply for summary judgment out of time will be granted, and the burden is on the applicant to show the delay is justifiable in all of the circumstances.[33] Where an application has some merit, the requirements for leave will not ordinarily be demanding.[34] In deciding whether or not to extend time, it is necessary to have regard to the history of the proceeding, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant and refusal of the application for the extension of time.[35]
[33] Jacka Nominees Pty Ltd v Edwards Karwacki SMI (Unreported, WASC, Library No 920512, 12 October 1992).
[34] Lashansky v Legal Practice Board of Western Australia [No 3] [2013] WASCA 260 [48] (Newnes JA).
[35] Bank of Western Australia v Stein [2005] WASC 43 [53] - [54].
Mr Eastwood deposed in his affidavit to the parties having consented to the making of orders on 11 March 2021 concerning the filing of a defence and the giving of discovery,[36] and a defence was filed on behalf of Ms Chambers on 18 March 2021.
[36] Affidavit of CV Eastwood pars 17 - 18.
Mr Eastwood further deposed that he had received an email communication from Mr Gregson on 18 March 2021, by which the defence was served, and by which he was informed that an application for summary judgment would be filed on behalf of Ms Chambers later that day.[37]
[37] Affidavit of CV Eastwood par 19, CVE-4.
By a further email communication sent to Mr Eastwood on 18 March 2021, Mr Gregson attached and Mr Eastwood received a draft application for summary judgment 'by way of conferral prior to filing'.[38] Mr Eastwood further deposed that this was the first time Mr Gregson raised the prospect of the defendants' bringing an application for summary judgment.[39]
[38] Affidavit of CV Eastwood par 20, CVE-5; ts 8 - 9 (22 July 2021).
[39] Affidavit of CV Eastwood par 21.
By a letter issued by Mr Eastwood to Mr Gregson by email on 8 April 2021, Mr Eastwood sought by way of conferral an explanation of the substance of the allegations raised in the defence filed on behalf of Ms Chambers.[40] Mr Gregson responded by reference to earlier correspondence sent to Mr Eastwood (being correspondence dated 18 December 2020), and by stating that he would be filing the application for summary judgment the next day.[41]
[40] Affidavit of CV Eastwood par 22, CVE-6.
[41] Affidavit of CV Eastwood par 23, CVE-7.
There were further communications as between the solicitors as to orders that ought be made in this proceeding, including by way of programming orders in relation to the summary judgment application. I note that no order was made vacating the orders made by the learned Master on 11 March 2021. I further note that prior to the hearing of the application for summary judgment, discovery was provided by each of Ms Clement and Ms Chambers. The time for the filing of Ms Chambers' affidavit of discovery was extended by the order of Master Sanderson made on 3 May 2021, by the consent of the parties.[42]
[42] Ms Clement gave discovery by an affidavit filed on 20 April 2021; Ms Chambers gave discovery by affidavit filed on 7 May 2021, by order of Master Sanderson made on 3 May 2021 by the consent of the parties.
Counsel on behalf of Ms Clement submitted that there was no evidence before the court to explain why Ms Chambers did not instruct Gregson & Associates to bring this application for summary judgment within time.[43] Counsel for Ms Clement further submitted that the lack of explanation and justification for the failure to bring the application within time, and the further delay in bringing the application, is fatal to the application.[44]
[43] Plaintiff's submissions par 13; ts 27 (22 July 2021).
[44] Plaintiff's submissions par 14, citing Michael v Nicholson (Unreported, Full Court of the Supreme Court of Western Australia, Library No 950660, 1 December 1995); Barrick Gold of Australia Ltd v FL Smidth Inc [2007] WASC 186 [10]; Newport Power Pty Ltd v Barrack Gold of Australia Ltd [2008] WASCA 74.
The cause of the delay in bringing the application was addressed in the affidavit of Mr Gregson. Mr Gregson deposed that throughout April, two support staff in his office were on leave (one planned, the other unplanned) and that that there were office closures over the Easter period.[45] Further to this Mr Gregson deposed that between December 2020 and April 2021 he made a number of unsuccessfully attempts to confer with Mr Eastwood, and that the first successful conferral attempt occurred on 23 April 2021.[46] Mr Gregson gave no particulars of such attempts.
[45] Affidavit of M Gregson sworn 26 April 2021 pars 13 - 14.
[46] Affidavit of M Gregson sworn 26 April 2021 pars 15 - 18.
At par 19 of his affidavit, Mr Gregson deposes that due to:
19.1Delay in conferral on the part of the plaintiff.
19.2Staffing issues and office closures.
19.3The negligible extent of any delay.
19.4The complete lack of prejudice which may be suffered by hearing the application on a summary basis.
19.5the interests of justice in disposing with the matter expeditiously,
I ask the court to grant the defendants leave under O 16 and I ask the court to program the matter towards a hearing by short minutes of legal submissions.
Disposition concerning leave
The application was not made within time and Mr Gregson's explanation for delay rests on his general and unparticularised complaint that he had made repeated attempts to confer with Mr Eastwood, which were unsuccessful. The difficulties experienced by Mr Gregson in April were outside of the time prescribed. Further, Mr Gregson's explanation was contradicted by the evidence of Mr Eastwood, who deposed that the potential for an application for summary judgment was not raised with him before 18 March 2021.[47]
[47] Affidavit of CV Eastwood par 21.
On the evidence, I am not persuaded that the delay was justifiable in all the circumstances. Further, the attachment of the correspondence dated 18 December 2020, which correspondence had been issued before the commencement of proceedings and without the benefit of pleadings, did not constitute appropriate or adequate engagement in conferral by the solicitors for Ms Chambers.
However, as counsel on behalf of Ms Chambers noted, the delay was not significant, and Ms Clement adduced no evidence of a prejudice resulting from the delay.[48]
[48] Defendants' submissions in reply par 40; ts 9 - 10 (22 July 2021).
While a defence had been filed and discovery completed, I accept that the proceeding had not been on foot for a particularly long period and before too much expense had been incurred.
In all of the circumstances, I find that the delay was not fatal to the application. I am satisfied that Ms Chambers should not be barred from applying for summary judgment as a result of a delay which was not inordinate, and which caused no discernible prejudice to Ms Clement. I therefore grant leave to Ms Chambers, in her capacity as first and second defendant, to bring the application for summary judgment out of time.
The summary judgment application
Applicable principles
The legal principles to be applied in the disposition of the application are not in issue.[49] The principles with respect to the court's power to order summary judgment were set out by Pritchard J in Gerovich v Gerovich [2018] WASC 153:
[49] Plaintiff's submissions pars 18 - 23; defendants' submissions in reply par 1.
[26] Order 16 r 1 RSC requires the Court to be satisfied either that the action is frivolous or vexatious, or that the defendant has a good defence on the merits, or that the action should be disposed of summarily.
[27] The principles in relation to the determination of applications for summary judgment are well established. A party should not ordinarily be denied the opportunity to have his or her case determined following trial, and for that reason, the jurisdiction to grant summary judgment should be reserved for the clearest of cases, where there is a high degree of certainty about the ultimate outcome of the action if it were allowed to go to trial.[50] In other words, the question is whether, on the material before the Court, it has been demonstrated that the plaintiff's action should not be permitted to proceed to trial because it is apparent that it must fail.[51]
[28]However, that does not mean that summary judgment will be given only where the case is so hopeless as not to require argument. Extensive argument may be necessary to demonstrate that a party's case is so clearly untenable that it cannot possibly succeed.[52]
[29] A defendant bringing a summary judgment application bears the legal onus of establishing that there is no serious question to be tried on any cause of action raised by the plaintiff.[53] Under O 16 r 1(2), the defendant is required to file an affidavit verifying the facts upon which the application is based.
[30]The plaintiff is also entitled, under O 16 r 2, to file an affidavit to show cause against the application. If the plaintiff shows cause against the application for summary judgment by filing an affidavit in response, the plaintiff may assume an evidentiary onus to show why summary judgment should not be given. In other words, the plaintiff needs to show, on the evidence, that there exists a 'triable issue'.[54] In doing so, the affidavit must 'condescend upon particulars' — that is, it must set out facts which establish that it is reasonable to permit the plaintiff to pursue the action.[55]
[31] However while the plaintiff may assume an evidentiary onus, the defendant retains the legal onus of demonstrating that there is no real question to be tried.[56]
[32] Actions should not be disposed of summarily when the facts are in dispute. Where there is a conflict on the affidavit evidence, the Court should approach the summary judgment application on the basis that the facts set out in the affidavits of the party resisting the application for summary judgment … will ultimately be accepted at trial.[57]
[33] The Court has power, whether under O 16 RSC or pursuant to its inherent power, to summarily dismiss a part of a claim.[58]
[50] Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57] (Gaudron, McHugh, Gummow & Hayne JJ); Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46] (Gleeson CJ, Gummow, Hayne & Crennan JJ); Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 [24] (French CJ & Gummow J); Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99; Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 602 - 603 (Mason CJ, Deane & Dawson JJ).
[51] Webster v Lampard (602).
[52] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, 130 (Barwick CJ).
[53] Anderson v Effexseven (1999) 10 ANZ Ins Cas 61-424, 74,757 (Parker J, Owen J agreeing).
[54] See Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110 (Brinsden J) in relation to applications under O 14 r 1 RSC; see also Bankwest (a division of CBA) v Mann [2015] WASC 187 [46]; HSBC Bank Australia Ltd v Mavaddat [2015] WASC 153 [26]; Gel Custodians Pty Ltd v Dewar [2014] WASC 177 [25]; Hee v Nyoni [2014] WASC 44 [25]; Wright v Wright [2002] WASC 30 [19].
[55] Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd (110) (Brinsden J), citing Wallingford v Mutual Society (1880) 5 App Cas 685, 704 (Lord Blackburn).
[56] Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18, 24.
[57] Webster v Lampard (608).
[58] Bride v Australian Bank Ltd (Unreported, WASC, Library No 950632, 23 June 1995).
In determining the application made on behalf of Ms Chambers, I have adopted and applied these principles. I proceeded on the basis that Ms Chambers bore the legal onus of establishing that there was no serious question to be tried on any cause of action raised by Ms Clement; and that the legal onus remained with Ms Chambers even where Ms Clement, by filing affidavits in response, assumed an evidentiary onus to show why summary judgment should not be given. I also proceeded on the basis that once it appeared that there was a real question, whether of fact or law, on which the rights of the parties depended, the action should not be dismissed as frivolous or vexatious or otherwise.[59]
The parties' submissions
Overview of the submissions made on behalf of Ms Chambers
[59] Dey v Victorian Railway Commissioners (1949) 78 CLR 62, 91 (Dixon J); Anderson v Effexseven (74,757) (Parker J, Owen J agreeing).
Counsel for Ms Chambers raised a number of points in support of the application for summary judgment. Counsel for Ms Chambers submitted that, having regard to those points, Ms Chambers has a good defence on the merits, and to the extent that Ms Clement's action concerns payments made by the BT Super Fund and WA Super Fund, the action ought to be summarily dismissed.
Whether a fiduciary duty is owed to a potential claimant
Counsel for Ms Chambers submitted that the key question on the summary judgment application is whether Ms Chambers owed Ms Clement a fiduciary duty. It was submitted that if no duty was found to exist, Ms Clement's action ought be dismissed,[60] as was pleaded at par 2 of the defence.
[60] Defendants' submissions par 12 (under the heading 'background').
Counsel for Ms Chambers acknowledged that Ms Clement's status as the de facto spouse of the deceased remains in dispute, but submitted that Ms Clement's status was not determinative of the disposition of the application.[61]
[61] Defendants' submissions par 11.
While counsel for Ms Chambers accepted that executors owe fiduciary duties to the beneficiaries of the estates which they administer, counsel submitted that no fiduciary duty is owed by an executor to potential claimants under family provision legislation.[62] In support of this proposition, counsel cited the decision of Doyle J (with whom Kelly and Brampton JJ agreed) in Brooks v Young [2018] SASCFC 81; (2018) 131 SASR 365,[63] and in particular the following passages of the reasons for decision:
[106]The central issue on this appeal is whether the elevation of these warnings to the status of a duty owed to, and enforceable by, claimants or potential claimants is sound as a matter of law.
[107]In my view, the key to a proper understanding of these warnings lies in an appreciation of the distinction between a person who is a family provision claimant (or potential claimant) and a person who has been successful in obtaining an order for provision in their favour. While the latter, by reason of having established their entitlement, becomes a beneficiary and thus has an interest that attracts enforceable duties (including fiduciary duties) on the part of the executor, the former does not. It is only once the claim has been successful that the executor may be liable in equity or on a devastavit to the claimant for loss suffered by reason of distributions made without regard to their claim. If the claim does not succeed, then no duty or liability arises.
[62] Defendants' submissions par 19 (under the heading 'the law'); ts 19, 21 - 22, 41 (22 July 2021).
[63] In the defendants' submissions in reply at par 28 the defendants noted that this decision is of an intermediate appellate court, which concerns an issue of common law which is of universal application in Australia, and therefore is a binding authority: Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89; R v Falzon [2018] HCA 29; (2018) 264 CLR 361.
On behalf of Ms Chambers, it was submitted that until the determination of the claim under the Family Provision Act, Ms Clement has not established an 'interest in the estate'.[64] I understood this to mean that Ms Chambers considers Ms Clement, at this point in time, to only be a potential claimant.
[64] Defendants' submissions par 1 (under the heading 'submissions'); ts 25 - 26 (22 July 2021).
Counsel for Ms Chambers submited there is no fiduciary relationship between an executor and a potential claimant; and that such a duty only arises when a potential claimant is successful in a claim. Accordingly, given that no fiduciary duty is owed, no duty can be or has been breached.[65] For these reasons, counsel for Ms Chambers said that there is no question to be tried, and Ms Clement's claim is certain to fail.
Death benefit is not an estate asset
[65] Defendants' submissions par 2 (under the heading 'submissions').
Counsel for Ms Chambers further submitted that property in the nature of a death benefit payable by a superannuation fund does not form part of the estate of a deceased, unless and until the trustee of the superannuation fund determines that the death benefit (or part of it) ought to be paid into the deceased's estate.
On behalf of Ms Chambers, it was submitted that an estate of a deceased person also has no right to require the trustee of the fund to pay the death benefit to the estate.[66] In this regard, counsel noted that if a person is dissatisfied with the exercise of a regulated superannuation trustee's determination in respect of the payment of death benefits, their recourse is to seek a review of the decision in accordance with the terms of the fund's trust deed and, ultimately, by the Australian Financial Complaints Authority.[67] Counsel for Ms Chambers suggested that Ms Clement's claim is an attempt by sidewind to review the superannuation trustees' determinations as to whom to pay the death benefits, instead of having the determination reviewed by the Australian Financial Complaints Authority.[68]
[66] Defendants' submissions in reply par 10, citing Burgess v Burgess [2018] WASC 279 [5]. See also ts 14, 15, 23 (22 July 2021).
[67] Defendants' submissions in reply par 11.
[68] Defendants' submissions in reply par 34.
Counsel for Ms Chambers noted that unlike in other states, the Western Australian Parliament has not sought to extend the reach of the Family Provision Act to notional estate assets such as life insurance and superannuation.[69]
Duties owed to the deceased's estate
[69] Defendants' submissions in reply par 12.
Counsel understood that the underlying premise of Ms Clement's claim to be that Ms Chambers had a duty to the deceased's estate to seek payment of the death benefits to the estate, and to not seek payment of the death benefits personally. Counsel submitted that if that underlying premise was not made out, Ms Clement's claim must fail because the relief sought under s 94 of the Trustees Act is based on the validity of that premise.[70]
[70] Defendants' submissions in reply pars 13 - 14.
In this regard, counsel referred to the decision of Martin J in Burgess v Burgess and made the following observations regarding his Honour's decision:
(a)The decision considered the circumstance where a court appointed executor in respect of an intestate estate was seeking payment to herself of death benefits payable in respect of her deceased husband's superannuation funds. The administrator had young children who were also beneficiaries of the deceased husband's estate under the provisions of the Administration Act 1903 (WA).
(b)His Honour held that the administrator could not seek payment of the superannuation death benefits for herself personally. His Honour followed the decision of Atkinson J in McIntosh v McIntosh [2014] QSC 99, which is authority for the proposition that one of the incidents of the fiduciary duties owed by a court appointed administrator of a deceased estate is that the administrator must apply for payment of any superannuation death benefit that is not the subject of a binding death benefit nomination, to the estate of the deceased. The administrator will be in breach of his or her fiduciary duty if he or she seeks to have the fund trustee pay the death benefit or part of it to him or her personally. In particular, counsel relied upon the following paragraph from McIntosh v McIntosh:
[62]The first question to be considered is — what are the duties of an administrator which are relevant to this case? The office of personal representative may be filled by an executor appointed under a will to administer the estate or an administrator appointed by the court. The method of their appointment is an important distinction between them as the appointment of an executor is the act of the testator exercising a testamentary choice. The testator may appoint someone whom the testator knows is a creditor or debtor of the testator or whom the testator has designated as the sole named beneficiary under a non-binding nomination of the testator's superannuation fund. These are examples of circumstances where the testator has nominated a legal personal representative who has a known conflict and must be taken to have accepted that conflict. This is an exception to the general rule that no one who has fiduciary duties is allowed to enter into engagements in which the fiduciary has or may have a personal interest conflicting with the interests of those whom the fiduciary is bound to protect.
(c)His Honour accepted that different considerations apply to an executor, in contradistinction to an administrator, in the context of making a claim for superannuation death benefits, and his Honour considered that Atkinson J's analysis of the law could not be faulted.[71]
[71] Burgess v Burgess [65], [85].
Counsel submitted that in this proceeding, Ms Chambers was:
(a)the nominated beneficiary in respect of the BT Super Fund and MLC Super Fund;
(b)appointed as institute executor of the deceased's will; and
(c)the sole (universal) beneficiary under the deceased's will.
Counsel on behalf of Ms Chambers submitted that she was therefore authorised by necessary implication to seek payment of the death benefits payable, at least in respect of two of the funds (being the BT Super Fund and MLC Super Fund). It was further submitted that it follows that Ms Clement's claim must fail insofar as relief in respect of the death benefits paid from these two funds is sought.[72]
[72] Defendants' submissions in reply par 20; ts 17, 18, 19 - 20 (22 July 2021).
Counsel submitted that any fiduciary duties were owed only to Ms Chambers herself. Counsel contended that in considering the nature and content of the fiduciary duties owed, the relevant question is whether there is a conflict between the position of seeking payment to herself of the death benefits and her seeking payment on behalf of the estate to the estate to apply the funds to meet the bequests made by the will.[73] Given that Ms Chambers was the sole beneficiary named in the will, counsel submitted that no conflict could arise. In support of this proposition, counsel relied upon McIntosh v McIntosh where Atkinson J stated:
[69]It is essential to fiduciary duties that they include the core or irreducible minimum duties necessary for the legal personal representatives to perform their obligations 'honestly and in good faith for the benefit of the beneficiaries.' This is the encapsulation of the fiduciary's duty of loyalty and fidelity. As Millett LJ held in Bristol and West Building Society v Mothew [1998] Ch 1 at 18:
A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal. This is not intended to be an exhaustive list, but it is sufficient to indicate the nature of fiduciary obligations. They are the defining characteristics of the fiduciary.
(Footnotes omitted).
[73] Burgess v Burgess [13].
Counsel also noted that the nature of a fiduciary's duty not to pursue a personal benefit in circumstances in which there is a real or significant possibility of a conflict between his or her fiduciary duty and personal interest, was described by Mason J in Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41,[74] where his Honour stated that:
[T]he fiduciary's duty may be more accurately expressed by saying that he is under an obligation not to promote his personal interest by making or pursuing a gain in circumstances in which there is a conflict or a real or substantial possibility of a conflict between his personal interests and those of the persons whom he is bound to protect.
[74] ts 20 (22 July 2021); the defendants' submissions in reply at par 24 wrongly attribute this quote to being from Pilmer v Duke Group Ltd [2001] HCA 31; (2001) 207 CLR 165.
It was noted on behalf of Ms Chambers that is has been said in respect of Family Provision Act claims that the role of the executor, if he or she is to take a role, is to uphold the deceased's will.[75] It was submitted that such role is consistent with the notion that the executor has a duty of undivided loyalty to protect the interests of the beneficiary parties to the exclusion of all other rival interests.[76] By contrast, the proposition that an executor owes duties to claimants under the Family Provision Act, in contradistinction to named beneficiaries of a will, is contrary to the principle that the role of the fiduciary is to loyally protect the fund for the benefit of those who the principal (settlor) has sought to make beneficiaries of that fund. Counsel submitted that unless and until an order is made for provision for a claimant in a Family Provision Act claim, the executor owes no fiduciary duty to a claimant seeking further provision. Prior to the making of such an order, the executor's fiduciary duty to administer the will lawfully is limited to the named beneficiaries' interest under the will.[77]
Application of s 94 of the Trustees Act
[75] Defendants' submissions in reply par 25, citing Brooks v Young [204]; ts 20 (22 July 2021).
[76] Defendants' submissions in reply par 25, citing Burgess v Burgess [83].
[77] Defendants' submissions in reply par 27, citing Brooks v Young [5].
Counsel for Ms Chambers submitted that s 94 of the Trustees Act has no application to the superannuation death benefits paid to Ms Chambers which never formed part of the estate property.[78] That is, counsel submitted that there is no arguable basis that the death benefits paid to Ms Chambers could form part of the estate property or be claimed by the estate from Ms Chambers. Put another way, counsel contended that the power in s 94 is concerned with a trust property or estate property, and the superannuation benefits (being the BT Super Fund and the WA Super Fund payments) were never assets of the estate, and therefore Ms Chambers was never dealing with trust property.[79]
[78] Defendants' submissions in reply par 30.
[79] ts 23 (22 July 2021).
Further and alternatively, counsel submitted that s 94 could have no arguable application in relation to the BT Super Fund death benefit payment, which comprised the vast majority of the death benefits paid. In this regard, counsel noted that the death benefits in the case of the BT Super Fund were paid out to Ms Chambers on 27 August 2019, prior to Ms Clement commencing her action under the Family Provision Act (but I note after notice of the claim). Counsel argued that accordingly, Ms Clement had no contingent or inchoate interest in the form of an 'equitable right vested by statute'.[80]
[80] Defendants' submissions in reply par 31, citing Re Faulkner [1999] 2 Qd R 49, 50, 52, 53 and Esber v Commonwealth [1992] HCA 20; (1992) 174 CLR 430, 440.
Counsel for Ms Chambers further submitted that this case is clearly distinguishable from the decision of Re Faulkner because there was no issue in that case that the property which had been distributed had been estate property.
Overview of the submissions made on behalf of Ms Clement
I understood counsel for Ms Clement to advance five broad submissions in support of the dismissal of the application for summary judgment.
First, that there is a factual question to be determined as to whether superannuation death benefits were received on behalf of the deceased's estate or by Ms Chambers in her personal capacity.[81] Ms Clement's position is that Ms Chambers has either failed to seek to have the deceased's superannuation member benefits paid to the estate, or has distributed such sums from the estate in the face of Ms Clement's claim under the Family Provision Act.[82]
[81] Plaintiff's submissions par 45.
[82] Plaintiff's submissions par 49.
Secondly, counsel submitted that there is a question as to whether the applications for payment of superannuation benefits, receipt and disbursal of funds are an act, omission or decision of the executor which fall within and can be reviewed under s 94 of the Trustees Act.[83] In this respect, counsel submitted that Ms Clement comes within the scope of that section because:
[83] Plaintiff's submissions par 52; ts 29 - 30 (22 July 2021).
(a)she is a claimant pursuant to the Family Provision Act and, as such, has an equitable right vested by statute;[84]
(b)the power of the court to review a trustee's acts, omissions or decisions is not one that should be narrowly construed;[85]
(c)the acts, omissions or decisions that are capable of review can be matters that arise wholly or in part under both the Trustees Act and either the instrument creating the trust (including the will) and/or the general law powers of a trustee;[86] and
(d)to the extent that any matter must be with respect to 'the exercise of any power conferred by this Act', Ms Chambers' acts, omissions and decisions with respect to the deceased's superannuation member benefits and the proceeds thereof, among other things:
(i)constitutes an act, omission or decision relating to the power of investment conferred by s 17 and s 18 of the Trustees Act, including the duty to exercise all powers in the best interests of all present and future beneficiaries of the trust pursuant to s 19 of the Trustees Act;
(ii)constitutes an act, omission or decision relating to the appropriation of property in or towards satisfaction of a legacy pursuant to s 30(1)(k) of the Trustees Act, including the payment of the proceeds of the superannuation benefits to Ms Chambers in her personal capacity;
(iii)constitutes an act, omission or decision relating to the exercise of the power to do all acts and things necessary to carry into effect the powers and authorities given by the Trustees Act or by or under the trust instrument (including the deceased's will) as conferred by s 30(1)(m) of the Trustees Act, which includes the power and authority to apply for the payment of superannuation benefits to the deceased estate as part of the power and authority given by the deceased's will; and
(iv)constitutes an act, omission or decision relating to compromise or abandonment of 'any debt, account, claim or thing whatever relating to the trust [estate] or to the trust [estate] property' within s 42(f) of the Trustees Act.
[84] Plaintiff's submissions pars 54 - 55, citing Re Faulkner (52) and Esber v Commonwealth (440).
[85] Plaintiff's submissions par 56, citing Re Whitehouse [1982] Qd R 196, 203 and Re Faulkner (53).
[86] Plaintiff's submissions par 57, citing Wendt v Orr [2004] WASC 28 [25] - [27].
Thirdly, counsel submitted that there is an established basis upon which, and against which, Ms Chambers' acts and omissions as executor, and her receipt of superannuation and/or estate moneys as executor, are to be reviewed and relief granted.[87] In support of this submission, counsel cited various propositions of law concerning the duties of an executor, set out at pars 59 to 68, which are reproduced at sch C to these reasons.
[87] Plaintiff's submissions par 69.
It was submitted that having regard to these propositions of law, Ms Clement's claims do not lack merit, are not frivolous or vexatious, and should not be summarily dismissed.[88]
[88] Plaintiff's submissions par 70.
Counsel further submitted that Ms Chambers did not adduce any evidence to establish that she had complied with her obligations or otherwise has a good defence on the merits.[89]
[89] Plaintiff's submissions par 71.
Fourthly, with respect to Ms Chambers' reliance on Brooks v Young, counsel submitted that this case is distinguishable because:[90]
(a)what was contended for was the existence of a fiduciary duty separate from any statutory provisions providing relief;
(b)the appellants in that case did not commence their claim within the time limit prescribed by the Family Provision Act and therefore were not claimants;
(c)the court found that the appellants' Family Provision Act claims had no reasonable basis;
(d)the appeal was dismissed as there was (prior to the establishment of the jurisdictional first stage of a Family Provision Act claim) no relationship that provided a base for a 'fiduciary' duty to be owed to the appellants; and
(e)the case did not consider a statutory provision the equivalent of s 94 of the Trustees Act 1962 (WA) or s 8 of the Trusts Act 1973 (Qld) (being the only other state with an equivalent provision entitling a person to apply to the court for a review of an act, omission or decision of an executor).
[90] Plaintiff's submissions pars 72 - 75; ts 26, 34 (22 July 2021).
Counsel for Ms Clement further contended that, by contrast, no fiduciary duty is required in order to enliven the statutory rights arising under s 94 of the Trustees Act. Moreover, counsel submitted that no evidence was adduced to suggest that Ms Clement's Family Provision Act claim lacks a reasonable basis and will not meet the jurisdictional first stage threshold. Finally, counsel submitted that there is no basis to read down s 94 of the Trustees Act, which provides that the court 'may make such order in the premises as the circumstances of the case may require', or the scope of relief that may be granted.
Fifthly, counsel for Ms Clement submitted that there are cases in other jurisdictions which provide by analogy support to the contention that Ms Clement has standing under s 94 of the Trustees Act, and for their being scope to grant relief in Ms Clement's favour. Counsel drew the court's attention to a number of cases in which courts have recognised the ability for a limited grant of administration to be made in favour of a Family Provision Act claimant so as to take proceedings against a named executor (even where they are also the sole beneficiary) for failing in the due and proper administration of the estate, and where there is a claim based upon a conflict of interest or a breach of duty, including where the recovery of property to the estate is for the purpose of it being the subject of the Family Provision Act claim.[91] It was noted that in deciding the appeal in Brooks v Young, the court did not consider these analogous cases.
[91] Plaintiff's submissions par 81, citing Mataska v Browne [2013] VSC 62, Fodor v Simudvarac [2014] VSC 227; (2014) 13 ASTLR 418 and Hogarth v Johnson [1987] 2 Qd R 383, 387. See also ts 34 - 37 (22 July 2021).
Counsel submitted that Ms Clement has standing under s 94(1) of the Trustees Act, and that the acts, omissions and decisions of Ms Chambers in connection with the superannuation benefits of the deceased (which resulted in those moneys not being obtained or retained by the deceased estate) are matters capable of review and of being made the subject of orders pursuant to that section.[92]
Disposition
[92] Plaintiff's submissions par 85.
Ms Chambers by the application seeks for this action to be dismissed on the basis that she has a good defence to Ms Clement's claims as pleaded, and Ms Clement's action must fail.
The critical question to be determined on the application made on behalf of Ms Chambers was whether it was clear that there was no question to be tried. In these reasons, I have set out in considerable detail the competing pleas and submissions made on behalf of Ms Chambers and Ms Clement.
In all of the circumstances and having given careful consideration to the evidence read, the authorities cited and the submissions made, I am satisfied that there are questions to be tried.
The application for summary judgment was primarily concerned with what counsel for Ms Chambers described as 'the key question', being whether Ms Chambers owed Ms Clement a fiduciary duty. It was submitted that if no duty was found to exist, Ms Clement's action ought be dismissed.[93]
[93] Defendants' submissions par 12 (under the heading 'background').
Counsel referred to and relied upon the decision of Brooks v Young as authority for the proposition that no fiduciary duty is owed by an executor to potential claimants under family provision legislation. Given that Ms Clement's application for provision under the Family Provision Act has not been determined; and the question of whether Ms Clement was the deceased's de facto spouse is a matter in issue, Ms Chambers (as executor) contends that no fiduciary duty was or is owed to Ms Clement.
Having had regard to the submissions made on behalf of the parties summarised in these reasons, and having given careful consideration to Brooks v Young and the authorities cited by counsel, I do not consider that it is appropriate in all of the circumstances to grant summary judgment. I note that at [216] of Brooks v Young, Doyle J acknowledged that the conclusion that there was no reasonable basis for the existence of a relevant fiduciary duty in that case is not to say that fiduciary duties could never be owed by an executor to a claimant for provision. His Honour accepted that there 'may be facts arising from the dealings or relationship between an executor and claimant in a particular case that warrant the imposition of such duty'.
Ms Chambers bore the legal onus of establishing that there was no serious question to be tried on the cause of action raised by Ms Clement. While there was force in the submissions made on behalf of Ms Chambers, on the application before me, I was not satisfied that Ms Chambers discharged her onus in relation to 'the key question'. On balance, it was not apparent that Ms Clement's case as pleaded must fail.
The application before me was an application for summary judgment in favour of Ms Chambers, not a trial of a preliminary issue. The outcome of this application reflects that it is only in the clearest of cases, where there is a high degree of certainty about the outcome if the proceeding were allowed to go to trial, that summary judgment ought properly be granted.[94] In dismissing the application, I was cognisant that the exercise of powers to summarily terminate a proceeding must always be attended with caution,[95] and it is arguable that the decision of Brooks v Young is not determinative of Ms Clement's claim in all of the circumstances of this case.
[94] Agar v Hyde [57]; Batistatos v Roads and Traffic Authority of New South Wales [46], cited by the Court of Appeal in Zaghloul v Bayly [2021] WASCA 125 [116].
[95] Spencer v Commonwealth [24], cited by the Court of Appeal in Zaghloul v Bayly [116].
I also accept that the question as to whether the applications made on behalf of Ms Chambers by Gregson & Associates for payment of superannuation benefits, receipts and disbursal of funds were acts, omissions or decisions of the executor which fall within and can be reviewed under s 94 of the Trustees Act, and whether Ms Clement has standing to seek such review, are matters that ought not be resolved summarily in favour of Ms Chambers. Again, while there are difficulties with Ms Clement's case and pleadings in this regard, I am not satisfied that it is apparent that Ms Clement's case must fail.
Having regard to all of the bases on which Ms Chambers grounds her application for summary judgment (albeit secondary to 'the key question'), I find that there remains real uncertainty as to outcome. Further, there are defences raised on behalf of Ms Chambers which put matters pleaded by Ms Clement in issue and are properly matters for trial. They include the question of whether Ms Clement was the de facto spouse of the deceased as at his death (which is denied at pars 3.1, 3.2 and 9 of the defence). Further, whether the deceased made valid nominations with all his superannuation funds with Ms Chambers as his preferred nominee (pleaded at par 4.1.3 of the defence); and the completeness and accuracy of Ms Chambers' communications with the BT Super Fund and WA Super Fund (pars 16 and 20 of the statement of claim; par 11 of the defence), are also properly matters for trial.
As there will be a trial, it is unnecessary and inappropriate to determine or further comment upon the matters in issue. I do not express any concluded views as to the claims of Ms Clement or the defences available to Ms Chambers.
Conclusion and orders
On the affidavits read and having given careful consideration to the detailed written and oral submissions made on behalf of the parties, I conclude that it is not apparent that Ms Clement's action must fail.
Ms Chambers, who bore the legal onus of establishing that there was no serious question to be tried on the cause of action raised by Ms Clement, did not discharge that onus. There is a serious question to be tried, and having so determined, summary judgment must be refused. As there will be a trial of these issues, it is also not appropriate that I express concluded views as to the substantive merits of the parties' claims.
While I grant leave to Ms Chambers to bring the application out of time, I dismiss the application. I will hear the parties as to the appropriate form of order and costs.
Sch A – Statement of Claim
Sch B – Defence
Sch C – Plaintiff's submissions pars 59 - 68
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AI
Associate to the Honourable Justice Strk
5 AUGUST 2022
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