Cripps v Cripps

[2024] ACTSC 180

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Cripps v Cripps

Citation: 

[2024] ACTSC 180

Hearing Date: 

7 June 2024

Decision Date: 

7 June 2024

Before:

Mossop J

Decision: 

1.    The application in proceeding dated 21 May 2024 is dismissed.

2.    The costs of the application in proceeding dated 21 May 2024 are reserved with liberty to apply when the proceedings are resolved or determined.

Catchwords: 

SUCCESSION – FAMILY PROVISION AND MAINTENANCE – Application to summarily dismiss or permanently stay proceedings – contention that proceedings are vexatious or an abuse of process because legal fees will reduce residue of estate to point where plaintiff cannot do better than current entitlement – no express provision providing for limitation on costs recoverable – inevitability of plaintiff being unable to achieve better outcome than available under the will has not been established – application dismissed

Legislation Cited: 

Civil Procedure Act 2010 (Vic), ss 62, 63

Court Procedures Rules 2006 (ACT), r 425

Family Provision Act 1969 (ACT)

Cases Cited: 

Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158; 42 VR 27

Re Fitzgerald; Voss-Lassetter v Piacun [2020] VSC 784

Re Haddow; Haddow v Haddow [2021] VSC 553

Parties: 

Dane Cripps ( Plaintiff)

Barry Cripps as executor of the will of Lucy Lilian Cripps ( Defendant)

Representation: 

Counsel

W Sharwood ( Plaintiff)

T Crispin ( Defendant)

Solicitors

Farrar Gesini Dunn ( Plaintiff)

Ray Swift Moutrage & Associates ( Defendant)

File Number:

SC 91 of 2024

MOSSOP J:  

Introduction

1․This is an application brought by the defendant executor seeking to summarily dismiss the plaintiff’s proceedings or to permanently stay them.

2․In the Originating Application, the plaintiff seeks orders rectifying the will of the late Lucy Lilian Cripps or, in the alternative, relief pursuant to the Family Provision Act 1969 (ACT). The testator passed away on 31 August 2023.

3․The testator’s will provided for her estate to be divided equally between her sons Allan and Barry Cripps. In the event that one of her sons did not survive her, the share of her estate intended for that son would, instead, be evenly distributed between that son’s children. Allan died before the testator. He is survived by five children. The plaintiff is one of those children. The will also makes a bequest of $1000 to Angel Flight Australia.

4․At the time of the testator’s death, her assets had an estimated value of $210,489. Expenses have been incurred in gathering in the estate. If it were not for these proceedings, the plaintiff’s share of the estate would come to approximately $19,548.

Submissions

5․The defendant contends that the proceedings by the plaintiff should be dismissed either because they are vexatious or because they amount to an abuse of process of the court. Because the proceedings are commenced by Originating Application, rather than Originating Claim, there are no pleadings and r 425 of the Court Procedures Rules 2006 (ACT) does not apply. The defendant contends that the action should be taken pursuant to the inherent power of the court to control its own processes. The defendant contends that the proceedings are vexatious because they cannot succeed or are brought for the purpose of wasting time or harassment. The defendant recognises that there is an overlap between vexatious proceedings and an abuse of process, since vexatious proceedings are not brought for a legitimate forensic purpose.

6․Counsel for the defendant contends that, even with the utmost efficiency, a contested hearing of the proceedings will take three or four days. He contends that the defendant’s legal fees incurred for such a trial will be in the order of $90,000 and that the plaintiff’s legal fees will be in excess of $100,000. In those circumstances, the defendant contends that, even if the plaintiff is successful, his prospects of recovering more than that which he is currently entitled to are negligible. That is because the payment of legal fees for the purposes of the contested hearing will reduce the residue of the estate to a point where, even if completely successful, the plaintiff cannot do better than his current entitlement.

7․The defendant relies upon two decisions of the Victorian Supreme Court: Re Fitzgerald; Voss Lasseter v Piacun [2020] VSC 784 at [59]-[63] and Re Haddow; Haddow v Haddow [2021] VSC 553 at [37]-[39].

8․Re Fitzgerald was a case in which the probate inventory valued the estate at approximately $60,000. Various liabilities reduced that to $56,000. The plaintiff’s legacy under the will was $10,000, leaving approximately $46,000 in the estate for legal costs, any further provision that might be ordered for the plaintiff, and any remaining benefits to the other beneficiaries. Englefield JR described the situation (at [61]-[63]) as follows:

61.Whatever the legal costs might be, once residue is exhausted, the plaintiff’s $10,000 legacy would abate rateably with the other three $10,000 legatees. In such circumstances, the plaintiff would need an order for further provision to even hold on to the value of the $10,000 legacy left to her by the Will. Every step the plaintiff takes in this proceeding increases the risk that her legacy abates. As her legacy abates, the merits of her action diminish further.

62.This analysis does not involve any consideration of discretionary or evaluative factors involved in the final determination of a TFM claim. That is, I give no consideration to the complex issues that arise when considering whether or not the plaintiff may succeed in obtaining an order for further provision based on, among other things, moral duty, financial need or the competing claims of the other beneficiaries. This is pure ‘number crunching’. The inevitability of legal costs destroys the viability of the claim. This claim is counterproductive. Therefore, I am unconstrained by the additional caution that arises in summary dismissal of TFM claims, as I am not dismissing the proceeding based on any evaluative or discretionary determination.

63.The impact of future legal costs on the available estate gives a ‘certain demonstration of the outcome of the litigation, and not an assessment of the prospects of success’. Even with a favourable judgment, the plaintiff will not receive more than $10,000, therefore she has no real prospect of succeeding in obtaining further provision from her father’s estate. This claim must be dismissed.

(Footnotes omitted)

9․In Re Haddow at [38], the approach in Re Fitzgerald was followed by Englefield JR.

10․Counsel for the plaintiff submitted that the evidence disclosed an arguable case for rectification. Even if that was not ultimately established, the evidence supported an arguable family provision claim. The affidavit of the plaintiff’s solicitor does not disclose the current costs incurred by the plaintiff. It indicates that up to and including a mediation, they will increase by approximately $20,000, with a breakdown of those costs provided. After that, the further costs are difficult to assess but the cost per day of a hearing “could be” between $5000 and $7000. The solicitor expresses the view that the defendant’s solicitor has overstated the estimate of costs.

11․The plaintiff submitted that the proceedings are clearly not frivolous or vexatious, nor an abuse of process.

Consideration

12․Costs in family provision claims involving small estates are one of the least satisfactory areas of Territory law. There is no express provision providing for a limitation on costs recoverable in such proceedings. There are no rules in the Court Procedures Rules which provide for costs limitation orders. The difficulty for executors facing a claim against a small estate is that there are strong incentives to compromise the claim, even in circumstances where the claim lacks merit, because the costs of contesting the claim will almost inevitably eat up much of the estate. Knowledge of that reality provides a distorted incentive to claimants, even where their claims lack merit. It is not uncommon for the only winners to be the lawyers.

13․It is unnecessary to express any opinion as to the merits of the current proceedings. The parties proceeded on the basis that there was evidence on both sides relevant to the issue of rectification of the will and the application for family provision which would need to be considered if the matter went to a contested hearing. The application made by the plaintiff was, consistent with the approach in Re Fitzgerald, on the basis of numerical inevitability rather than any assessment of the merits of the claim.

14․The decision in Re Fitzgerald was made in the context of s 63 of the Civil Procedure Act 2010 (Vic), which does not have a Territory equivalent. The section allows summary judgment where a defendant has applied to the court for summary judgment on the ground that “a plaintiff’s claim or part of that claim has no real prospect of success”: s 62. This has been identified as being a more liberal test than the previous requirement that the proceedings be “hopeless” or “bound to fail”: Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158; 42 VR 27 at [29].

15․It is unnecessary to consider the significance of an express statutory power such as that in s 63 and its absence in the Territory. That is because the empirical inevitability of the plaintiff being unable to achieve a better outcome than is available under the will has not been established. There are three reasons for this.

16․First, the proceedings may settle either at a mediation or otherwise. The solicitor for the plaintiff has estimated that the additional costs to be incurred by the plaintiff up to and including a mediation, beyond an unspecified amount already incurred, would be in the vicinity of $20,000.

17․Second, the estimate of the costs of the proceedings in the affidavit of Barry Cripps is that the costs of the estate are likely to be between $75,000 and $90,000 and that the plaintiff’s costs will be $120,000. However, the solicitor for the plaintiff indicated that the costs estimate by the defendant was overstated. I do not consider that the estate is so small, and the costs are so large, as to make it inevitable that the plaintiff, even if he is successful, will not recover more than he is currently entitled to.

18․Third, in a case such as this involving a small estate and having regard to the need for the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute, there would be a sound basis for a qualification of the costs entitlements of the parties if there is an indication that they have not maintained the required proportionality.

19․For these reasons, even if the court was to adopt an approach equivalent to that adopted in Re Fitzgerald, the size of the estate when compared to the likely legal costs is not such as to indicate that the plaintiff has no real prospect of obtaining more than his current entitlement under the will. Even if the “no real prospect of success” formulation is treated as equivalent to the proceedings being vexatious or an abuse of process, a matter which I need not determine, that threshold is not met in the present case and hence the proceedings should not be dismissed or permanently stayed. As a consequence, the application in proceeding will be dismissed.

20․In relation to costs, I consider that the appropriate order is that, notwithstanding the failure of the defendant’s application, costs be reserved with liberty to apply when the substantive proceedings are resolved or determined. If the parties do not otherwise resolve their differences, that approach will allow a costs order to be made in light of the outcome of the case.

Orders

21․The orders of the Court are:

1.The application in proceeding dated 21 May 2024 is dismissed.

2.The costs of the application in proceeding dated 21 May 2024 are reserved with liberty to apply when the proceedings are resolved or determined.

I certify that the preceding twenty-one [21] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.

Associate:

Date: 25 June 2024