Hornsby v Hornsby
[2015] WASC 169
•15 MAY 2015
HORNSBY -v- HORNSBY [2015] WASC 169
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 169 | |
| 15/05/2015 | |||
| Case No: | CIV:1268/2011 | 15 APRIL 2015 | |
| Coram: | EM HEENAN J | 15/04/15 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Declaration that action has been discontinued Orders for costs payable by plaintiff to defendant on special terms | ||
| B | |||
| PDF Version |
| Parties: | CRAIG LEONARD HORNSBY SHARON JUDITH HORNSBY |
Catchwords: | Discontinuance of action Leave to discontinue Claim by defendant for dismissal of action with costs Proceedings defective for want of an essential party Defects waived by continuation of action by both parties Orders as to costs |
Legislation: | Rules of Supreme Court (WA) O 2, O 18, O 23 |
Case References: | Heartlink Ltd v Jones As Liquidator of HL Diagnostics (in liq) [2007] WASC 254 Hornsby v Hornsby [2014] WASC 256 Hornsby v Hornsby [No 2] [2014] WASC 434 Hornsby v Hornsby [No 3] [2015] WASC 159 Scallan v Scallan [2001] NSWSC 1078 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
SHARON JUDITH HORNSBY
Defendant
Catchwords:
Discontinuance of action - Leave to discontinue - Claim by defendant for dismissal of action with costs - Proceedings defective for want of an essential party - Defects waived by continuation of action by both parties - Orders as to costs
Legislation:
Rules of Supreme Court (WA) O 2, O 18, O 23
Result:
Declaration that action has been discontinued
Orders for costs payable by plaintiff to defendant on special terms
Category: B
Representation:
Counsel:
Plaintiff : Mr M A Blundell
Defendant : Mr G D Cobby
Solicitors:
Plaintiff : Solomon Brothers
Defendant : Arns & Associates
Case(s) referred to in judgment(s):
Heartlink Ltd v Jones As Liquidator of HL Diagnostics (in liq) [2007] WASC 254
Hornsby v Hornsby [2014] WASC 256
Hornsby v Hornsby [No 2] [2014] WASC 434
Hornsby v Hornsby [No 3] [2015] WASC 159
Scallan v Scallan [2001] NSWSC 1078
1 EM HEENAN J: The applications made to the Court by both the plaintiff and the defendant have been focussed on a contest about which party should pay the costs of this action and on what basis. In form, however, the applications began with a controversy over whether, as the defendant contends, the plaintiff's action should be dismissed as a nullity for reasons which will be examined or whether, as the plaintiff contends, the plaintiff should have leave to discontinue but any consequent orders for costs should be payable out of the estate of the late Colleen June Hornsby, the mother of both the plaintiff and the defendant. This action brought by her son, Craig Leonard Hornsby, sought to set aside, as invalid or ineffective, a number of inter vivos property transactions entered into by the deceased in November and December 2008, not long before her death on 25 April 2009.
2 Another action between these same parties concerning a dispute over which of three testaments was the last valid will of the deceased proceeded to trial and resulted in a judgment declaring that the last will of the deceased, made on 21 December 2008, appointing the defendant, Sharon Judith Hornsby, as the sole executrix was valid and that a grant of probate in solemn form of law of that will should be made to the defendant. That will had been made at or close to the time when the inter vivos transactions, which were impugned by the plaintiff in this action, were also made.
3 The reasons setting out the history between the parties and the disputes and issues arising in the probate action are set out in Hornsby v Hornsby [No 2] [2014] WASC 434. Significantly, in that action the present plaintiff, Craig Hornsby, pleaded and led evidence seeking to establish that the various inter vivos transactions by his mother in November and December of 2008 were invalid or ineffective for various reasons, including alleged lack of capacity by her, unconscientious conduct by other persons alleged to been involved in procuring those transactions and because of alleged undue influence.
4 In that probate action it was not possible or appropriate to determine the validity or effectiveness of any of the impugned inter vivos transactions but, nevertheless, the contentions by the present plaintiff and the evidence led by him in support of them were relevant to the extent that it may have reflected against the testamentary capacity of the deceased at the time she made the will which, as noted, was, except in some insignificant respects, contemporaneous with the dates of the impugned inter vivos transactions. The decision in the probate action that the will was valid and that the deceased possessed full testamentary capacity at the date the will was made, and that no unconscientious behaviour or undue influence had been established, which vitiated the validity of the will, did not of itself decide whether any of the impugned inter vivos transactions was invalid for similar reasons but, nevertheless, was a significant indication that challenges by the present plaintiff to those transactions on those grounds would be unlikely to succeed - at least in the absence of further evidence casting a different light on those transactions.
5 Previously, this present action (the 'inter vivos transactions action') had been directed to be heard at the same time as the probate action. However, for reasons which I gave in Hornsby v Hornsby [2014] WASC 256, I varied the order which had directed that the two actions be heard together and instead directed that the trial of the probate action should proceed, as it later did. Essentially, the reasons for taking that step were that until there had been a grant of probate or administration of the estate of Colleen June Hornsby it was not possible to proceed with the inter vivos transactions action because there was no person then authorised to act on behalf of the estate, the interests of which were vitally concerned in the challenges made to the inter vivos transactions. In other words, the presence of an executor or administrator to whom probate or administration had been granted, or the appointment of a person authorised to act on behalf of the estate, was an essential party to the inter vivos transactions action and that action could not proceed until some person had been lawfully appointed to that position.
6 While it might have been possible, at an earlier stage of this inter vivos transactions action, for one or both of the parties to have applied for the appointment of an administrator ad litem of their mother's estate, or to apply under RSC O 18 for the appointment of a person authorised to represent the estate in these proceedings, it would have been very difficult, if not impossible, to resolve such application before knowing which was the last valid will of the deceased because that determination would identify the persons with the greatest interest in the distribution of the deceased's estate. Without knowing who was the major beneficiary of the estate of the deceased, it would have been most invidious, indeed, almost entirely impracticable, to attempt to decide who should be appointed to act on behalf of the estate in this action challenging the inter vivos transactions.
7 Nevertheless, as the court record shows, this action, the inter vivos transactions action, was commenced in 2011 and it proceeded through all the usual preliminary stages involving the exchange of pleadings, discovery and other interlocutory matters to the point where it was entered for trial and the parties had earlier proposed that it should be heard and determined at the same trial as the probate action in June and July of 2014. By participating in the progress of this action to that point, it was obvious that both the plaintiff and the defendant acted in disregard of the lack of any party authorised to represent the estate or, in other words, proceeded with the action despite the non-joinder of an essential party. This has given rise to this recent controversy over whether the consequences of so proceeding, in the absence of a necessary party, meant that the action was a nullity (as the defendant contends) or that this was an irregularity (as the plaintiff contends) which was waived by the defendant's failure to take that point at any stage until very recently - RSC O 2 r 1, r 2.
8 By a minute of proposed orders dated 17 February 2015 the plaintiff, Craig Leonard Hornsby, proposed that the Court should make an order that this action be discontinued and that the costs of both the plaintiff and the defendant in this action should be paid out of the mother's estate. The defendant was opposed to the making of any such order and sought instead an order that the action be dismissed, because of alleged nullity, and that the plaintiff should pay the defendant's costs of the action on an indemnity basis to be taxed. The defendant's submissions relating to the alleged nullity of the action and her consequent entitlement to costs on an indemnity basis were predicated, among other grounds, on the submission that the plaintiff lacked standing to commence and pursue this action.
9 On 23 February 2015, by consent, I gave directions that the parties should file written submissions and minutes of any further orders sought and that the matter should then be listed for hearing unless the parties agreed that the contested applications could be determined on the papers. Further written submissions on the matters were filed by the parties, who then requested that it be listed for hearing. It came on for hearing before me on 15 April 2015. After hearing further submissions by the parties I gave brief oral reasons for the orders then made indicating that more detailed reasons would follow in due course. The very brief reasons then given appear on the transcript of 15 April 2015 and the orders which I then made were:
1. that the plaintiff's action CIV 1268/2011 be discontinued;
2. the plaintiff pay the defendant her costs of that action to be taxed;
3. there be liberty to apply for directions as to how the costs of this action and the related action CIV 3045/2010 should be apportioned.
These are now the more detailed reasons for that decision and those orders.
10 I am satisfied that the vital absences as a party to this action of any representative of the estate of the deceased was an irregularity which was capable of being cured by the appointment of such a representative later in the proceedings. For example, now that probate of the last will of Mrs Colleen Hornsby has been granted to the defendant, Sharon Hornsby, it would be possible, if the plaintiff wished to proceed with the action, to have her appointed as an additional defendant in her capacity as executrix of her mother's estate to whom probate of the last will has been granted. That would mean that the action, duly constituted, could proceed. However, that has not been done and it would appear that the plaintiff has no wish to apply for the appointment of any such party or, indeed, to proceed with the action.
11 The question which then arises is whether or not the plaintiff should be permitted to discontinue the action. He submits that he should not be forced to continue with the litigation that he now does not wish to pursue. I accept that he should not be forced to continue with the litigation but, the action having long since passed the point where the plaintiff could discontinue without leave, RSC O 23 r 2(1), the plaintiff needs leave to discontinue. I am satisfied that leave to discontinue should be granted but on terms relating to the payment of costs and that suitable terms being imposed, and the plaintiff obviously wishing to discontinue, the action should be declared to have been discontinued subject to appropriate orders for costs: compare Heartlink Ltd v Jones As Liquidator of HL Diagnostics (in liq) [2007] WASC 254 (Martin CJ).
12 At the hearing of these applications counsel for the defendant did not press the written submissions that the action was invalid for want of an essential party and accepted that the situation was distinguishable from those occasions when an action had been commenced by a party without standing: Scallan v Scallan [2001] NSWSC 1078. I consider that the plaintiff always had a sufficient interest, and therefore standing, to seek to impeach the various inter vivos dispositions because each, to a different degree, had the effect of reducing the size of his mother's estate under which he was a beneficiary under the will which was proved: see Hornsby v Hornsby [No 2] [2014] WASC 434 [100] - [113], although his interest was that of a conditional legatee and as a discretionary beneficiary under the Hornsby Farming Trust in the event that the Hornsby Farming Trust was left any real estate of the deceased under her last will. Whether or not any real estate of the deceased was left under her will depended upon the validity of the inter vivos disposition and disposing of the Quinns Farm which had been challenged. The extent of any benefit which the plaintiff might receive under the last will of his mother was likely to be controversial but, at least to some extent, it was arguable that it was dependent upon the validity of one or more of the impugned inter vivos dispositions. I am satisfied that this was sufficient to give him standing to commence and maintain this action but, for reasons already explained, the action could not proceed to determination until a party had been appointed to represent his mother's estate.
13 The question which therefore arises is how and upon what basis is the present action to be determined. The plaintiff seeks to have it discontinued. The defendant wishes it to be dismissed. Without the consent of the plaintiff, which is obviously not forthcoming, I do not think that the Court can, or if it could that it should, dismiss the action. To do so would be a determination of the outcome of the proceedings on the merits. That should not be done except by trial, for this is not a case suitable for a disposition summarily.
14 This means that the only other method for the disposition of the action is for discontinuance by the plaintiff. I am satisfied that discontinuance can only be permitted by leave of the Court and the ordinary rule in relation to discontinuance is that the party discontinuing should pay the costs of the other party to be taxed up to the point of discontinuance in the absence of special circumstances.
15 The plaintiff submits that relevant special circumstances are present in this case. They include the submission that events supervening since the commencement of the action had rendered further prosecution of the action unnecessary or impracticable because the supervening event or events had shown that there would be no advantage to the plaintiff in pursuing the action any further. The plaintiff's submission is that the relevant supervening circumstance is the determination of the probate action in favour of the present defendant and the grant of probate of Mrs Colleen Hornsby's will of 28 July 1988 in circumstances which suggest, without so deciding, that the proposed challenges by the plaintiff to the inter vivos dispositions based on grounds similar to those relied upon for the challenge to the will since admitted to proof would be unlikely to succeed or, even if they did, would be unlikely to result in any significant or pecuniary advantage to the plaintiff or his interests.
16 I accept that this is a reasonable view to take of the prospects of the plaintiff's success in the present action having regard to the outcome of the proceedings in the probate action. However, I do not consider that the probate action and its determination can be regarded as any form of independent or supervening event which affects a consideration of the costs liabilities arising in the present action.
17 Issues very similar to those raised by the plaintiff in this action were always in contention in the probate action and in a very real sense the fate of the probate action was always likely to be, in practical terms, determinative of the present action. In other words, the situation from the commencement of both sets of proceedings was that if Mrs Colleen Hornsby's third will (of 1 December 2008) was proved, as it has been, there would be little or no advantage in the plaintiff proceeding with this action. The pursuit of this action could have been left until after the probate action had been heard and determined. Indeed, there was no reason to commence this present action before probate was granted of Mrs Colleen Hornsby's last will except possibly (and this has not been argued and does not need to be determined) as a precaution to protect against the expiration of any applicable limitation period. Even then, however, the action could have been commenced and left in abeyance until after the probate action had been determined. In a real sense, this present action has duplicated a large area of the controversy of the probate action which always needed to be determined first.
18 Accordingly, I am satisfied that this is an occasion on which leave should be granted to the plaintiff to discontinue the action; the action should now be treated as having been discontinued subject to the terms that I fix in directing that the plaintiff pay the defendant's costs of this action to be taxed. There will obviously be a need to consider the scope of the subject matter of this action which has been dealt with in the probate action and which is covered by any order for costs made in the probate action in order to avoid any doubling up of costs or portions of costs. There can, therefore, be liberty to apply in relation to the apportionment of costs as between the two actions.
19 Since this decision was given an orders made in this action (CIV 1268/2011), a separate decision together with orders for costs has been made in the probate action: Hornsby v Hornsby [No 3] [2015] WASC 159 on 7 May 2015. The orders made in that action in consequence directed that work relating to the investigation of each of the inter vivos transactions in preparing for trial of those issues should be regarded as part of the costs of the probate action because they were, to a material degree, relevant to issues associated with the validity of the 2008 will. However, to the extent that there was duplication of that work, for example, by pleadings or other process in this action, CIV 1268/2011, then any such duplication or repetition should be part of the costs in that action payable by the present plaintiff, Mr Craig Hornsby. On that occasion, counsel for the plaintiff availed of liberty to apply in the present action to obtain an order and declaration that the costs in the present action constituting duplication or repetition of matters raised in the probate action should be payable by the plaintiff in the present action only.
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