Hamilton v Roche - [2022] SASC 103

Supreme Court of South Australia
(Civil)
HAMILTON v ROCHE & ANOR
[2022] SASC 103
Judgment of the Honourable Auxiliary Justice Bochner
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - SUMMARY DISPOSAL
Corporations Act 2001 (Cth); Probate and Administration Act 1898; Real Property Act 1900, referred to.
Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd (2020) 137 SASR 117; In the Estate of Just (No 2) (1974) 7 SASR 515; Consolidated Development Pty Ltd v Holt (1986) 6 NSWLR 607, considered.

HAMILTON v ROCHE & ANOR
[2022] SASC 103

On 8 December 2021, the applicant commenced this action, in which she seeks various orders relating to the ongoing administration of her father’s estate. The applicant and the first respondent are the executors and trustees of the estate. I will refer to the first respondent as the respondent. The second respondent is the residuary beneficiary under the deceased’s will. I will refer to the second respondent as the residuary beneficiary. The action has been discontinued against the third respondent.
The residuary beneficiary is a trustee company. Its directors are the applicant and the respondent. Each of the applicant, the respondent and the estate holds one third of the residuary beneficiary’s shares.
Brief background
The deceased died on 24 April 2010. He had three daughters, the applicant and respondent, and a third daughter whom I will refer to as SR. On 6 August 2010, SR lodged a caveat in the Probate Registry in respect of the deceased’s will. The caveat lapsed, and on 22 August 2011, the applicant and the respondent obtained a grant of probate in common form. Between the issue of the grant of probate and 20 October 2011, a substantial part of the estate was administered. On 20 October 2011, SR commenced an action in this Court, seeking a revocation of the grant of probate and a grant in solemn form in respect of an earlier will. The applicant and respondent were the defendants to this action, in their capacity as executors, and counterclaimed, seeking a grant in solemn form of the will in respect of which a common form grant had been obtained on 22 August 2011. SR also commenced an action for further provision from the estate. This action was stayed pending the outcome of the revocation proceeding.
On 27 June 2013, the solicitor who was acting for the executors in the administration of the estate provided to the applicant and respondent a bundle of documents relating to the estate which he called the “Bible of Estate Documents”.[1] These documents set out the dealings with the estate assets to that time, and the issues outstanding in respect of the administration of the estate. It appears that all of the assets of the estate, except for the deceased’s interest in a property in Woollahra in Sydney and his shares in the residuary beneficiary had been distributed and all of the debts owed to the estate had been…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hamilton v Roche

Details

AGLC: Hamilton v Roche [2022] SASC 103
Case: [2022] SASC 103
Decision Date: 19 September 2022

CaseChat Overview and Summary

In the case of Hamilton v Roche, the matter was heard before the Supreme Court of New South Wales. The dispute arose between the parties, who are residuary beneficiaries and trustees of a deceased estate. The key issue was whether the estate had been fully administered and if a declaration to that effect should be granted. Additionally, the case examined the costs associated with the proceedings.

The legal issues the court had to address involved the interpretation of the relevant rules and principles governing summary disposal of proceedings. The applicant argued that the respondent's application for summary dismissal should not be entertained as it was not a matter commenced by a claim. The court had to consider the principles of striking out a pleading or summarily dismissing an action under the Uniform Civil Procedure Rules.

The court ruled that the application for summary dismissal was permissible as it was not limited to claims but could be applied to matters commenced by an originating application. The court further found that the estate had not been fully administered, as there were outstanding debts and liabilities that had not been addressed. Consequently, the application for a declaration that the estate had been fully administered was summarily dismissed.

The final orders of the court were that the application for summary dismissal should proceed, and the paragraph of the originating application seeking a declaration that the estate had been fully administered must be summarily dismissed. The costs associated with the proceedings were also considered, but no specific orders were made in relation to them.

Orders

Orders of the court

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Background

Background to the litigation

The residuary beneficiary is a trustee company. Its directors are the applicant and the respondent. Each of the applicant, the respondent and the estate holds one third of the residuary beneficiary’s shares.Brief background The deceased died on 24 April 2010. He had three daughters, the applicant and respondent, and a third daughter whom I will refer to as SR. On 6 August 2010, SR lodged a caveat in the Probate Registry in respect of the deceased’s will. The caveat lapsed, and on 22 August 2011, the applicant and the respondent obtained a grant of probate in common form. Between the issue of the grant of probate and 20 October 2011, a substantial part of the estate was administered. On 20 October 2011, SR commenced an action in this Court, seeking a revocation of the grant of probate and a grant in solemn form in respect of an earlier will. The applicant and respondent were the defendants to this action, in their capacity as executors, and counterclaimed, seeking a grant in solemn form of the will in respect of which a common form grant had been obtained on 22 August 2011. SR also commenced an action for further provision from the estate. This action was stayed pending the outcome of the revocation proceeding. On 27 June 2013, the solicitor who was acting for the executors in the administration of the estate provided to the applicant and respondent a bundle of documents relating to the estate which he called the “Bible of Estate Documents”.[1] These documents set out the dealings with the estate assets to that time, and the issues outstanding in respect of the administration of the estate. It appears that all of the assets of the estate, except for the deceased’s interest in a property in Woollahra in Sydney and his shares in the residuary beneficiary had been distributed and all of the debts owed to the estate had been assigned. I will refers to these remaining assets as the Woollahra property and the shares. The “Bible” does not appear to address estate liabilities. [1] FDN 2, DAH 15. SR’s action went to trial, and on 2 February 2017, judgment was given in favour of the defendants. SR filed an appeal; the parties then negotiated a settlement, which resulted in finalisation of the action in 2018. From the commencement of SR’s action on 20 October 2011 and its final resolution in 2018, the administration of the estate was suspended. On 4 March 2020, Mr O’Halloran, of HWL Ebsworth who was acting (and still acts) for the applicant and the first respondent in their capacity as executors, sent an email to the applicant, in which he raised a difficulty with the transfer of the shares.[2] This difficulty arose from the fact that the transfer of the shares to the residuary beneficiary, as required in the will, would result in the residuary beneficiary’s acquiring shares in itself, which is prohibited by the Corporations Act 2001. Mr O’Halloran proposed a solution to this problem, with details of the steps which would be required to implement this solution. He sought the applicant’s instructions in respect of this solution noting that the respondent had already agreed to it and had signed the first of a series of documents required to implement the solution. [2] Ibid, DAH 2.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The filing of the originating application generated a large amount of correspondence between the parties, which has been exhibited to the various affidavits tendered. Again, I do not intend to refer to this correspondence unless it is relevant to the questions that I must decide.The principles to be applied in an application for summary dismissal or summary judgment The applicant says that summary judgment pursuant to UCR 144.2 is not open to the respondent as this rule applies only to matters commenced by claim, rather than those commenced by originating application. There was no dispute between the parties as to the principles to be applied in the application of UCR 143.1 and 143.2. Each relies on the decision of Doyle J in Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd,[7] where he said:[7] (2020) 137 SASR 117.The grounds upon which the Court may strike out a pleading under UCR 70.3, or summarily dismiss an action under UCR 143 are expressed in similar terms. The grounds for each encompass both (a) a claim, pleading or action that is frivolous, vexatious or an abuse of process and (b) the failure or inability to disclose a reasonable cause of action.The courts have generally eschewed any attempt to define frivolous and vexatious. While the concepts overlap to some extent, and are sometimes treated as a single compendious concept, the former invites a focus upon whether the claim or issue is worthy of serious attention, whereas the latter invites a focus upon whether the claim or issue is being pursued for the purposes of harassing or vexing the other party. Abuse of process is a broad concept. It may take a number of different forms, but is usually associated with some improper or collateral purpose. Relevantly in the present context, it will be informed by the overarching obligations of the parties and their lawyers under UCR 3.1, and extend to the pursuit of a claim which does not have a proper basis in light of that rule. The claim might lack a proper basis because it is based upon an assertion for which there is no basis in the material available to the party, which misstates the material upon which it is based, or which extends beyond any assertion for which that material might provide a basis.As to this last matter, I refer to my earlier articulation (at [26]-[28] above) of the distinction between a pleaded case which is based upon a general inference with a proper foundation, and a pleaded case that involves impermissible fishing or trawling for a case. The latter may be seen as either a species of abuse of process, or the absence of a reasonable basis for the pleaded case.It has been suggested that abuse of process in this context may include the pursuit of a pleading that does not disclose a reasonable cause of action. However, I consider it unnecessary to dwell on whether abuse of process extends this far given that the failure or inability to disclose a reasonable cause of action is itself a basis for striking out a pleading or summarily dismissing an action.While the criteria for the exercise of the Court’s power to strike out and summarily dismiss are expressed in similar terms, the difference between the two mechanisms for challenging an applicant’s claim lies in the nature and focus of the challenge. The power to strike out under UCR 70.3 is directed to the applicant’s “Claim or pleading” (with the former defined as the document by which an action is commenced), whereas the power to dismiss is directed to the applicant’s “action” (which is defined to mean a claim in the sense of a proceeding in which the applicant claims a remedy for a cause of action). The focus of the former is thus upon the articulation of the applicant’s case in the relevant document, usually a pleading. And the focus of the latter is upon the applicant’s case itself.The difference in focus between the two has implications for the use that may be made of evidence in the determination of the applications. In the case of a strike out application, the Court’s consideration of the nature and adequacy of the claim, as disclosed in the pleading itself, may require recourse to a document or documents referred to in the pleading (such as a contract) in order to make sense of the pleading. It may also require consideration of some evidence so as to enable the Court to understand the pleaded allegations in their proper context, and hence expose their inadequacy or their frivolous, vexatious or abusive character. However, it will not ordinarily require any consideration of evidence going to the underlying merits of the applicant’s claim, let alone making findings on that evidence.In the case of a dismissal application, on the other hand, there will often be greater scope for reliance upon evidence so as to make good the proposition that the applicant’s case itself is deficient in some respect, or is otherwise frivolous, vexatious or an abuse of process. That said, the nature of the exercise will nevertheless differ from that which is undertaken on a summary judgment application. While the difference is difficult to articulate, an application for summary dismissal is typically addressed more to the absence of any identifiable proper claim, whereas an application for summary judgment is typically addressed more to a particular defect in, or answer to, an otherwise properly articulated and disclosed case.The difference between strike out and dismissal applications also relates to, and explains, the difference in the consequences to which they lead. The former leads to an order that the relevant pleading (or part thereof) be struck out. However, as the conclusion justifying this order is one based upon a deficiency in the pleading, and not necessarily the case itself, the applicant is usually given an opportunity to replead. The latter, on the other hand, because it is predicated upon a defect in the applicant’s case (rather than merely the pleaded articulation of it), leads to an order that the action or proceeding itself be dismissed. Whilst such an order brings the relevant action or proceeding to an end, it does not ordinarily give rise to res judicata or otherwise prevent a fresh claim being brought in appropriate circumstances.While I have attempted to summarise what I see as the key features of, and differences between, summary judgment, summary dismissal and strike out applications, I accept that in practice the distinctions are often difficult to draw and observe, and there is, quite appropriately, scope for overlap and flexibility in their operation.[8](citations omitted)[8] Ibid, [61] – [70].

Ratio Decidendi

Legal Principle Established

The only outstanding issue in respect of these matters is the question of costs.The declaration in respect of the administration of the estate Much of the affidavit material that was filed in this action dealt with the question of who was responsible for the delay in the finalisation of the administration of the estate. I do not intend to address this issue. It is irrelevant to the question of whether the application for a declaration to the effect that the estate has been fully administered should be summarily dismissed. The respondent says that the proposition that the estate has been fully administered as a result of which the applicant and respondent are now trustees rather than executors is untenable. Putting aside the question of whether the Woollahra property is now being held by the applicant and respondent as trustees, the respondent says that the applicant has not addressed, at any time, the question of whether the estate’s liabilities have been paid in full. The applicant herself has raised the issue of an outstanding debt owed to the estate by SR, and the respondent has raised the issue of a significant debt owed by the estate to the residuary beneficiary. Further, no evidence has been provided about the payment of legal fees, accounting fees and the preparation of income tax returns for the estate. It can be concluded that these things remain outstanding, and therefore there is no basis for the making of the declaration. This paragraph of the originating application should be summarily dismissed. The applicant says that the administration of the estate was finalised by 27 June 2013. The outstanding issue concerning the Woollahra property is a matter for the final distribution of the legal interest in the property; this is not an executorial function. The applicant says that the point at which an executor becomes a trustee is a question of fact which can be difficult to determine and will depend on the circumstances of each case. She says that the fact that the residuary beneficiary has been treated as the owner of the Woollahra property since about September 2011 amounts to assent by the executors that the administration of this asset is complete. She says, at the very least, there is a real question to be tried as to whether the estate has been fully administered. In response to the applicant’s submission in respect of assent, the respondent says that application of the principle of assent to real property has been expressly removed by legislation in New South Wales, the law which is applicable because that is where the property is situated. In my view, the paragraph of the originating application seeking a declaration that the estate has been fully administered must be summarily dismissed. It is arguable that there are outstanding debts owed both to and by the estate. SR owes money to the estate in respect of the costs order made against her in her action. The respondent says that the estate owes a significant debt to the residuary beneficiary, in respect of the legal fees incurred in the course of SR’s action and in respect of the ongoing payment of costs in respect of the Woollahra property. While there appears to be some dispute about this, this dispute in itself must lead to the conclusion that the estate has not been fully administered: until the executors are satisfied that all outstanding liabilities have been paid, the estate cannot be regarded as having been fully administered. Further, the question of outstanding legal and accountants’ fees has not been addressed, nor has the question of any outstanding tax liability. Putting aside these questions, however, it is clear on the applicant’s own evidence that there are outstanding debts that have not been dealt with.