Hughes as executor of the last Will of Stanley Ernest Urquhart (Dec) v Miles
[2000] WASC 154
•13 JUNE 2000
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: HUGHES as executor of the last Will of STANLEY ERNEST URQUHART (DEC) & ORS -v- MILES [2000] WASC 154
CORAM: MASTER SANDERSON
HEARD: 18 MAY & 6 JUNE 2000
DELIVERED : 13 JUNE 2000
FILE NO/S: CIV 1357 of 2000
BETWEEN: PATRICK DAVID MOSTYN HUGHES as executor of the last Will of STANLEY ERNEST URQUHART (DEC)
First Plaintiff
PATRICK DAVID MOSTYN HUGHES as executor of the last Will of MARY MONICA URQUHART (DEC)
Second PlaintiffPATRICK DAVID MOSTYN HUGHES
JULIAN WRIGHT (as trustees of the MARY MONICA URQUHART TRUST)
Third PlaintiffsAND
VALERIE ANNIE MILES
Defendant
Catchwords:
Practice and procedure - Application to strike out certain parts of affidavit - Turns on its own facts
Legislation:
Rules of the Supreme Court
Trustees Act (1962), s 92
Result:
Certain parts of affidavit struck out
Representation:
Counsel:
First Plaintiff : Mr D J Garnsworthy
Second Plaintiff : Mr D J Garnsworthy
Third Plaintiffs : Mr D J Garnsworthy
Defendant: Mrs P M Edward
Solicitors:
First Plaintiff : David Garnsworthy
Second Plaintiff : David Garnsworthy
Third Plaintiffs : David Garnsworthy
Defendant: Murie & Edward
Case(s) referred to in judgment(s):
Clay v Karlson, unreported; FCt SCt of WA; Library No 970466; 21 July 1997
Featherby v Grljusich, unreported; SCt of WA (Parker J); Library No 980238; 1 May 1998
Martin‑Smith v Woodhead [1990] WAR 62
Miles v Hughes, unreported; SCt of WA; Library No 990009; 11 November 1998
Miles v Hughes, unreported; SCt of WA; Library No 990086; 25 February 1999
Palmer v The Queen (1998) 193 CLR 1
Unilever plc v The Procter & Gamble Co [1999] 2 All ER 691
Case(s) also cited:
Agassiz v London Tramway Co (1872) 27 LT 492
Ainsworth v Criminal Justice Commission (1992) 175 CLR 571
Bond v Larobi Pty Ltd (1992) 6 WAR 489
Cachia v Isaacs (1985) 3 NSWLR 336
Coal Miners' Industrial Union of Workers of WA v Western Collieries Ltd [1995] 75 WAIG 2497
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
D'Alessandro & D'Angelo v Cooper; unreported; SCt of WA; Library No 950221; 9 May 1995
Direct Acceptance Corp Ltd (In Liq) v Lord; unreported; SCt of NSW; No 50034; 3 September 1993
Field v Commissioner for Railways (NSW) [1957] 99 CLR 285
Guardian Trust and Executors Co v Public Trustee NZ [1942] AC 115
Hollingham v Head (1858) 27 LJCP 241
J N Taylor Holdings Ltd (in liq) v Bond (1993) 59 SASR 432
Jovista Pty Ltd v FAI General Insurance Co Ltd [1998] WASC 298
National Crime Authority v S (1991) 49 FCR 203
Perpetual Trustees WA Ltd v Goyder, unreported; SCt of WA (Commissioner Martin QC); Library No 990138; 24 March 1999
Pollit v R [1992] 174 CLR 558
Quad Consulting Pty Ltd v Bleakley David R & Associates Pty Ltd (1990) 98 ALR 659
R v Chee [1980] VR 303
Re Van Beelen (1974) 9 SASR 163
Rodgers v Rodgers (1964) 114 CLR 608
Rossage v Rossage [1960] 1 WLR 249
San Sebastian Pty Ltd (1986) 162 CLR 341
Skin-Plex Laboratories Pty Ltd v Baker [1999] WASC 81
Subramanian v Public Prosecutor [1956] 1 WLR 965
Western Australia v Southern Equitities Corp Ltd (in liq) (1996) 69 FCR 245
MASTER SANDERSON: This is the plaintiffs' application to strike out, in its entirety, the affidavit of Valerie Annie Miles sworn 11 April 2000. The affidavit is filed in opposition to the plaintiffs' application for certain declarations. To understand the nature of the application it is necessary to say something of the facts of the case. There have been two previous decisions of this Court in relation to proceedings between these same parties in a related action CIV 1438 of 1998. They are the decision of Parker J in Miles v Hughes, unreported; SCt of WA; Library No 990009; 11 November 1998. The other decision was a decision I delivered on 25 February 1999: Miles v Hughes, unreported; SCt of WA; Library No 990086. Both of these decisions deal briefly with the facts in the earlier case. I will deal with the facts of this case in light of the facts set out in the two earlier decisions.
By way of originating summons, the plaintiffs seek the following orders:
"1.a declaration or direction that Patrick David Moyston Hughes the First Plaintiff, the Second Plaintiff and the firstnamed Third Plaintiff herein and his firms Corser & Corser and Corsers are not required to submit for taxation accounts in respect of work done for the estate of Stanley Ernest Urquhart, the estate of Mary Monica Urquhart and the Mary Monica Urquhart Trust at the request of the Defendant;
2.a declaration or direction that the Defendant is not a party charged within the meaning of Section 68A of the Legal Practitioners Act relating to the said accounts in respect of work done for the estate of Stanley Ernest Urquhart, the estate of Mary Monica Urquhart and the Mary Monica Urquhart Trust;"
It will be seen at once that the relief claimed is of a most unusual nature. In opening her submissions, counsel for the defendant called into question whether the procedure adopted by the plaintiffs was proper and appropriate. She submitted, in effect, that the plaintiffs could not maintain these proceedings with respect to the Trustees Act. She did not deal in any detail with the relief sought under s 68A of the Legal Practitioners Act. As I understand it, it is not suggested that the procedure adopted is not appropriate in relation to the Legal Practitioners Act. It was counsel's submissions that the objections to the defendant's affidavit should be looked at in the light of what, in any event, can be achieved in these proceedings.
Section 92(1) of the Trustees Act is in the following terms:
"(1) Any trustee may apply to the Court for directions concerning any property subject to a trust, respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee."
During the course of her submissions, counsel for the defendant suggested that, although the originating summons referred to s 92 of the Trustees Act, it was possible the application was brought under O 58 r 2. If that were the case, and there is no indication that it is, then the application would be brought under O 58 r 2(e). In either case, counsel submitted that there was no basis for the court to make the order as sought.
This application does not directly concern the competence of the proceedings as a whole. But it does seem to me that the point made by counsel for the defendant has substance. It is common ground between the parties that all of the property comprised in both estates has now been distributed. There is an outstanding question as to whether certain solicitors' bills of costs should be taxed, but that does not impact upon the fact that the estates are fully administered. That being the case, the trustees do not hold any trust property and they therefore cannot seek directions either under s 92 of the Trustees Act or under O 58 r 2: see Clay v Karlson, unreported; FCt SCt of WA; Library No 970466; 21 July 1997; Featherby v Grljusich, unreported; SCt of WA (Parker J); Library No 980238; 1 May 1998. It is not appropriate for me to express any concluded view on this question, but the plaintiffs may be well advised to look again at the proceedings.
There is a further question about whether or not an originating summons is the proper way to raise these issues. With respect to the matters under the Legal Practitioners Act, I am satisfied that the procedure is suitable. In relation to the questions under the Trustees Act it would seem to me that it is likely that there will be arguments on matters of fact. If that is the case, then proceedings should have been instituted by way of writ: see Martin‑Smith v Woodhead [1990] WAR 62 per Kennedy J at 65.
Given what I have said about the proceedings generally, there must be some doubt as to whether or not the proceedings should be dealt with by way of affidavit. To an extent, at least, that might well render the present application moot. Nonetheless, I will deal with the objections raised by the plaintiffs in the event that it is felt appropriate to deal with this matter on the present basis.
The plaintiffs submitted that, as these proceedings were final, any affidavit had to comply with the provisions of O 37 r 6(1) of the Rules of the Supreme Court and could not contain statements of information and belief. In my view, that is a correct statement of the position. Statements of information and belief can only be contained in an affidavit if the affidavit is to be used in interlocutory proceedings, certain other proceedings specified in O 37 r 6(2) or as specified in other particular orders such as O 14 and O 16. The general rules as to hearsay apply to evidence adduced in this application.
Many of the objections raised by the plaintiffs concern relevance. I accept that the test of relevance is as set out by McHugh J in Palmer v The Queen (1998) 193 CLR 1. However, it must be remembered that evidence is being tendered on affidavit. If the evidence is irrelevant it can be ignored by the Judge hearing the matter. I accept that the evidence is before the court and if it is before the court and it is not dealt with by the plaintiff then the plaintiff runs the risk of having that evidence accepted by the court as unchallenged. But if, as the plaintiffs allege the evidence is irrelevant, then acceptance of the evidence will not damage the plaintiffs' case. To my mind, evidence which is irrelevant should only be struck out if it is likely to raise a false issue. Otherwise, the evidence can be left and simply ignored by the trial Judge.
Turning to the particular paragraphs of the defendant's affidavit, objection is taken first to par 2(a). This paragraph annexes copies of wills executed by the defendant's parents. It is said that these wills are irrelevant to the present proceedings. I have some doubt as to how relevant they might be. Nonetheless, given the nature of the proceedings, I see no difficulty at all with their being before the court. I would not strike out par 2(a).
Objection is raised to par 2(b) on the basis that the material is hearsay and contains a diagnosis of a medical condition suffered by the defendant's father. It is quite true that the plaintiff is not qualified to provide a diagnosis that her fathered suffered from Alzheimer's disease or any other medical condition. However, in the context of this application an observation such as contained in par 2(b) is no more than that. If it is relevant to the proceedings as a whole and if there is some doubt as to the medical condition of the defendant's father, then evidence can be led by the plaintiffs to that effect. I would allow par 2(b) to stand. Objection is taken to par 2(c) on the basis of relevance. The paragraph deals with the defendant's assessment of her father's capacity at the time he instructed solicitors regarding his wills. This may be an issue between the parties in these proceedings. In my view, par 2(c) should stand.
Paragraph 2(d) sets out the defendant's observations as to her father's condition when Mr Hughes drew the will which is Annexure "A" to the defendant's affidavit. I see nothing objectionable in the first sentence in that paragraph. The second sentence purports to annex to the affidavit a copy of a proof of evidence of a Mr Walter Dominic Davis. Clearly, that is hearsay material and it cannot stand. The second sentence of par 2(d) ought be struck out, together with the annexure referred to in that paragraph.
Paragraph 2(e) makes certain allegations against Mr Hughes. They are statements of the plaintiffs' belief. The material is clearly inadmissible and the whole of par 2(e) ought be struck out.
Paragraph 2(f) deals with the Public Trustee declining to act as the executor of the will of the defendant's mother which was drawn in 1984. I see nothing wrong with the statement to the effect that the Public Trustee declined to act as executor. The reasons why they declined to so act is not a matter upon which the defendant can give evidence. I would strike out all the words of the first sentence of par 2(f) after the words "declined to prove the will". The final sentence of par 2(f) can remain.
In relation to par 2(g), I find nothing objectionable in that paragraph. It is responsive to par 13 of Mr Hughes' affidavit and it simply refers to correspondence with speaks for itself. Paragraph 2(g) can remain.
Paragraph 2(h) responds to par 14 of Mr Hughes' affidavit. The defendant gives direct evidence in response to what is said by Mr Hughes and I can see nothing objectionable in the paragraph. It may be that the relevance is questionable, but the evidence is not so remote as to require it to be struck out.
Paragraph 2(i) is challenged on the basis of relevance. I do have some difficulty seeing what relevance there might be in this paragraph. Nonetheless, it may assist the court to understand the nature of the relationship between the defendant and Mr Hughes and to better understand the full position. I would allow par 2(i) to stand.
Objection is taken to par 2(j) on the basis of relevance. It would seem to me the material contained in that paragraph is highly relevant given the nature of the relief sought by the plaintiffs. I would not strike out par 2(j).
Objection is taken to par 2(k), (l), (m), (n) and (o) on the basis that all of these paragraphs deal with settlement negotiations entered into between the parties. It is said that these settlement negotiations were a bona fide attempt to resolve the differences between all parties and as such are privileged.
There is no doubt that discussions and settlement negotiations undertaken in a bona fide attempt to resolve a dispute between parties are privileged: see Unilever plc v The Procter & Gamble Co [1999] 2 All ER 691. Laddie J put the position as follows (at 699):
"It seems to me that the rule against the subsequent use of without prejudice discussions is wide enough to cover all statements made by each party touching upon the strength or weakness of its own and its opponent's case and any valuation, for whatever reason, it places on its or its opponent's rights. These are the issues which go to the heart of any attempt to compromise litigation. Parties should be free to discuss them without fear of their words coming back to haunt them in court proceedings."
Neither party disagreed with this statement of principle. Counsel for the defendant submitted that this was not a case where an attempt was being made to introduce into proceedings statements made during the course of negotiations attempting to settle those proceedings. Settlement had been effected. The negotiations had been concluded. What was now at issue was the way that the negotiations were conducted as impinging upon the relief sought by the plaintiffs in this application. That was an altogether different thing from using against a party, statements made in the course of negotiations. With respect, I agree with counsel's formulation of the position. Moreover, I agree that where a trustee is seeking directions of the court, it is important the court have before it all material facts which might effect the exercise of the court's discretion. The conduct of the trustee in the course of settlement negotiations is a matter which is relevant and upon which evidence should be available. In my view, each of these paragraphs is admissible.
Paragraph 2(p) deals with the deed of settlement entered into between the defendant and certain other parties. The deed speaks for itself and on that basis par 2(p) should be struck out.
Paragraph 2(q) is clearly relevant. The question at issue is whether or not the executors should have the solicitor's costs taxed. The view of the residuary beneficiary, the defendant, and the steps that she has taken in an attempt to bring about taxation are clearly relevant. Paragraph 2(q) should stand. The same reasoning applies to par 2(r), (s) and (t). All paragraphs are relevant to matters in issue and are unobjectionable.
Paragraph 2(u) deals with matters particularly within the knowledge of the defendant's legal adviser. The defendant herself is unable to give direct evidence of these matters and par 2(u) contains hearsay. It is inadmissible and it ought be struck out.
Objection is made to par 2(v), both on the grounds of relevance and on the ground that it provides evidence of privileged communications. I have already dealt with that latter basis and I need say nothing further. In relation to relevance, it does not seem to me the paragraph is in any way offensive and I would allow it to stand.
As to par 2(w), I am satisfied that this paragraph is both relevant and admissible. It should stand.
Objection is taken to par 3(a) and (b) on the grounds that they deal with privileged communications. Once again, and for reasons which I have specified above, I would not be prepared to strike out either of these two paragraphs.
Paragraph 3(c) is objected to on the grounds of relevance. In fact, the sub‑paragraph is more in the nature of a submission than evidence and strictly speaking it should not have been included in the affidavit. Nonetheless, I do not regard it as sufficiently offensive to warrant its being struck out.
Objection is raised to par 4 on the basis of relevance. While I would accept that the matters raised are of peripheral relevance, I am not satisfied that they warrant being struck out. Paragraph 4 can stand in its present form.
For these reasons, then, I would strike out certain paragraphs of the defendant's statement of claim. Subject to hearing from counsel, I am not satisfied that it is necessary for the affidavit to be uplifted and a further affidavit filed. I think it would be sufficient if it was noted on the present affidavit what parts thereof had been struck out, so that if any attempt is made to refer to these paragraphs during the course of the hearing objection can be made by the plaintiff's counsel. However, I will hear further from counsel in relation to this matter and on the question of costs.
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