Frontlink Pty Ltd v Feldman
[2012] VSC 530
•2 November 2012
| Send for Reporting | ||
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2011 01075
B E T W E E N :
| FRONTLINK PTY LTD (ACN 074 034 496) | Plaintiff |
| - and - | |
| CYNTHIA FELDMAN (in her capacity and in her capacity as holding letters of administration ad colligendum bona of the intestate estate of Derek Joseph Feldman (deceased)) | Defendant |
---
JUDGE: | RANDALL AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 August 2011 | |
DATE OF JUDGMENT: | 2 November 2012 | |
CASE MAY BE CITED AS: | Frontlink Pty Ltd v Feldman | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 530 | |
---
PRACTICE AND PROCEDURE – Plaintiff’s application for summary judgement – deceased entered into multiple agreements with plaintiff as owner of the properties – deceased and defendant acted as farm consultants to plaintiff – extent to which defendant held letters of administration ad colligendum bona for deceased – Civil Procedure Act 2010, ss 61, 63-64.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Cook | Belleli King & Associates |
| For the Defendant | Mr M.V. McInnis | Mason Black Lawyers Pty |
HIS HONOUR:
Derek Feldman (“the deceased”) died intestate on 13 October 2010.
The defendant, Ms Cynthia Feldman, is the deceased’s widow and was the plaintiff in proceeding S PRB 2010 16297 in which she sought the grant of letters of administration ad colligendum bona. On 2 December 2010, the Honourable Justice Osborne made orders in the probate proceedings granting to Mrs Feldman limited letters of administration ad colligendum bona.
Prior to his death, the deceased had entered into three agreements with the plaintiff, Frontlink Pty Ltd, as owner of three different properties. Those agreements were as follows:
(a)The Grices’ Road agreement dated 20 October 2002 between the plaintiff as owner and the defendant in her own right and the deceased.
(b)The Soldiers Road agreement dated 1 July 2003 between the plaintiff and the deceased.
(c)The Pound Road agreement dated 1 April 2005 between the plaintiff and the deceased.
Each of the three agreements were between the plaintiff, as owner of the particular property, and the deceased, and the deceased and the defendant as applicable as farm consultants. The plaintiff assigned the right to receive the profits from the farming activities undertaken by the deceased, or the deceased and the defendant with respect to the Grices’ Road property, in consideration of an annual payment and reimbursement of outgoings such as council and water rates.
The plaintiff has proceeded against the defendant in both her personal capacity (with respect to the Grices’ Road property) and in respect of her capacity as holding Letters of Administration ad colligendum bona of the intestate estate of the deceased. The defendant, among other things, has pleaded that she “denies that there is any claim against her as a person holding Letters of Administration ad colligendum bona of the estate of the deceased pursuant to the orders of the Supreme Court of Victoria made in proceeding 2010/16297 and otherwise seeks to refer to the terms of the limited grant of administration and orders made by the Court accordingly.”[1] The order made by the Honourable Justice Osborn on 2 December 2010 was a limited grant for the purpose only of:
(i)Immediately vesting in her all the right title and interest of the deceased in the real estate agency owned and operated by him…
[1]Paragraph 12 of the defence filed 28 July 2011.
The ancillary orders in relation to real estate agency related to the sale of the rent role, attending to Business Activity Statements and income tax and to meet liabilities. There was also the power to deal with the assets and liabilities of the company DFA Property Consultants Pty Ltd. Order 1(b), after referring to the necessity to attend to returns and Business Activity Statements on behalf of the deceased, the estate and the real estate agency and to pay any income taxation assessed thereon, empowered the defendant “to deal with the Australian Tax Office generally in respect of the real estate agency and the deceased’s affairs”. The addition of the words “and the deceased’s affairs” together with reference to “the estate” as well as the real estate agency in sub-paragraph (b), points to an obligation to meet liabilities and to deal with affairs beyond those confined to the real estate agency. That power or obligation is seemingly supported by the wording of Order 1(i)(c) where the defendant in this proceeding is “to deal with the debts of the deceased and his estate including the real estate agency … “.
Notwithstanding the seemingly untrammelled requirement or power to deal with the debts of the deceased, the order must still be considered in its context. That is, the grant was for the purposes “only” of vesting title in the real estate agency and the grant had the further limitation set out at the end of paragraph 1 as follows:
BUT LIMITED until a grant of Probate or general Administration be made, or until further order AND such administration shall proceed no further or otherwise than as aforesaid or in any other manner whatsoever.
The plaintiff submitted that:
It is a matter of interpretation as to the extent of her powers. The grant of probate (sic) by Osborn J (cf 3) includes a power to “deal with the debts of the deceased and his estate”. The present claim relates to “a debt of the deceased”. The plaintiff is empowered to “deal” with that debt: see definitions.[2]
[2]Paragraph 3(a)(i) of the plaintiff’s outline of argument.
Although there is merit to the plaintiff’s argument, in particular, having regard to the text of his Honour’s order, the context of the order is such that it is reasonably arguable that the power or obligation imposed related to the real estate agency and that the general obligations of an administrator of the estate would not crystallise until a general grant.
The test on an application for summary judgment has been conveniently set out by the Honourable Justice Bell in APN Funds Management Ltd v Australian Property Investments Strategic Pty Ltd.[3] His Honour referred to the judgments of J Forrest J and Dixon J[4] namely, that:
The defendant will have no real prospect of success if those prospects are no more than fanciful.
[3][2011] VSC 555 at [4].
[4]Respectively in Matthews v SPI Electricity (Ruling No 2) [2011] VSC 168 and Ottedin Investments v Portbury Developments [2011] VSC 222.
I determine that the argument as to the import of the Honourable Justice Osborn’s order is not merely fanciful. In any event, Bell J went on to say in dealing with construction as follows:
In my view, the defence in this case can only be properly evaluated upon a full consideration of the provisions of the deed at trial. While the plaintiff’s case seems strong on the law and indeed on the merits, there is material risk that the Court would do a serious injustice to the defendant by giving summary judgment against it.[5]
[5][2011] VSC 555, at [11].
In the same way, full argument as to the interpretation of the Honourable Justice Osborn’s order ought to be reserved to the trial judge. If it transpires that his Honour’s order did not extend to meeting liabilities in general as contended for by the plaintiff, then the usual position is that this claim is not justiciable against the deceased’s estate until a legal personal representative is appointed. For instance, as to standing to sue see Gertsch v Roberts; the estate of Gertsch.[6]
[6][1993] 35 NSWLR 631.
The Grices’ Road property
As to the Grices’ Road property, the defendant deposed:
I have not seen a copy of any agreement in relation to the Grices’ Road property and without seeing the document I am unable to comment further save to say that I do not believe that there is a proper basis for the claim and/or that I am personally liable for any debt in relation to Grices’ Road. I further note that the claimed total amount outstanding for the Grices’ Road property is $156,225.10. That amount appears to in part at least relate to amounts which are at least more than six years old. I do not have any records of any outstanding amounts due from the alleged commencement period of 20 October 2002 and nor do I have any documents in relation to the Grices’ Road property referred to in Schedule 1 of the Writ.[7]
Later, the defendant deposed:
Despite requests to review the original of the joint venture farming agreement I have only seen a copy which purports to affix the common seal of a company called ‘Frontline Pty Ltd’. I am not aware of any company by that name though I do note that the seal appears to be the seal of ‘Frontlink Pty Ltd’ … .
The joint venture farming agreement appears to have similar initials to mine though not witnessed. I do not have any recollection of placing my initials on that document at all and as at 20 October 2002 I was not a partner of the business name ‘Derek Feldman and Company Property Consultants’ …[8]
[7]Paragraph 14 of the defendant’s affidavit sworn 13 May 2011.
[8]Paragraph 13-14 of the defendant’s affidavit sworn of 25 July 2011.
The plaintiff provided an explanation as to why only a copy was available. Sauhail Mondous, the director of Frontlink deposed:
In this respect I recollect handing the original of the document “SM-2” referred to in my previous Affidavit to the deceased in or about October 2002 so it could be signed. He said he would arrange for its signature. The deceased took the document away to have it signed, by both himself and his wife. I recollect that several days later the deceased returned a copy of the original document to me in the form in which it appears as Exhibit SM-2. I believe the deceased retained the original.[9]
[9]Paragraph 2(b) of the affidavit of Sauhail Mondous sworn 5 August 2011.
I accept that explanation. In any event, s 48 of the Evidence Act (Vic) permits a party to adduce evidence of the contents of a document in question by, among methods, tendering a document that is or purports to be a copy of the document in question.
The joint venture farming agreement is a document between the plaintiff and the defendant and the deceased. The heading of the document clearly sets out the plaintiff’s name and defines it as the owner of the Grices’ Road property. The document has been executed by the affixing of the plaintiff’s seal. It is clear that an error has been made in describing the name of the plaintiff in the execution clause. Such an error can be categorised as a spelling error or a misdescription of the plaintiff by an obvious mistake. Obvious typographical errors may be corrected as a matter of construction, not as a matter of rectification.[10] In so far as necessary, I determine that the execution clause to the agreement ought to be read as though Frontlink was the executing party rather than Frontline.
[10]Fitzgerald v Masters (1956) 95 CLR 420; Watson v Phipps (1985) 63 ALR 321.
Limitation of actions defence
The Grices’ Road agreement was entered into on 20 October 2002. The schedule produced to set out the basis for the claim, refers to the rent claimed from the starting date of 20 October 2002 through to 30 October 2010. In addition, there are set out details of insurance and rates paid by the plaintiff which were to be reimbursed pursuant to the provisions of clause 5 of the Grices’ Road agreement. The claim is calculated after taking into account two payments made on behalf of the defendant and the deceased, namely, $3,666.66 on 14 November 2002 and $88,000 paid on 30 March 2007. In response to the argument with respect to the limitations point, the plaintiff set out that “this is not a proper defence: the schedule of moneys due and payments made indicate that the payments incurred before the limitation period expired must have been paid when amounts were credited to the defendant and her husband and that the only outstanding amounts were the sums due within the relevant limitation period.”[11]
[11]Paragraph 3(f) of the plaintiff’s outline of argument.
The rule in Clayton’s Case[12] is such that the plaintiff is entitled to appropriate earlier payments to discharge earlier debts. Given that there is no reason to depart from the principles set down in Clayton’s Case, the component of the claim which would have been statute barred has been extinguished by the appropriation of the two payments made on 14 November 2002 and 30 March 2007.
[12](1816) 1 Mer 572.
Accordingly, there will be judgment against the defendant in her personal capacity as opposed to her capacity as administrator ad colligendum bona of the estate of the deceased in the sum of $156,225.10 together with interest pursuant to statute.
---
0
2
0