Irene Paltos v Shirley Bassil

[2013] NSWSC 1408

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Irene Paltos v Shirley Bassil [2013] NSWSC 1408
Hearing dates:	13 September 2013
Decision date:	25 September 2013
Jurisdiction:	Equity Division
Before:	Slattery J
Decision:	Leave granted to the plaintiff to amend her statement of claim in part but excluding any claims for Succession Act s 27 relief. Defendant's strike out application dismissed.
Catchwords:	PROCEDURE - plaintiff seeks to amend her statement of claim by adding claims based on Succession Act 2006 s 27 and promissory estoppel - defendant seeks to strike out the whole claim. SUCCESSION - plaintiff is the niece of the deceased - deceased made representations that he would buy a property for the plaintiff - no property purchased when deceased alive and plaintiff not provided for in the will - whether Succession Act 2006 s 27 will rectification claim manifestly groundless where no instructions preceding the will to which the will does not give effect pleaded - whether any deceased's instructions subsequent to the will may allow rectification under Succession Act 2006 s 27. EQUITY - whether promissory estoppel claim manifestly groundless where the only detriment pleaded by the plaintiff is effort to find an appropriate property for purchase and incurring a $1,200 rent increase.
Legislation Cited:	Succession Act 2006 s 27
Cases Cited:	Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582 Dawson v Brazier [2012] NSWSC 117 General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125 Giumelli v Giumelli (1999) 196 CLR 101 Rawack v Spicer [2002] NSWSC 849 Sullivan v Sullivan [2006] NSWCA 312 Van Dyke v Sidhu [2013] NSWCA 198 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Webster v Lampard (1993) 177 CLR 598
Category:	Interlocutory applications
Parties:	Plaintiff: Irene Paltos Defendant: Shirley Bassil
Representation:	Counsel: Plaintiff: S Philips Defendant: M Pesman Solicitors:
File Number(s):	2012/338045
Publication restriction:	No

Judgment

1. The plaintiff in these proceedings Irene Paltos is the niece of the late Michael Bassil who died on 16 April 2011 leaving a will dated 24 March 2005. The defendant is Michael Bassil's widow, Mrs Shirley Bassil. By her Statement of Claim filed in October 2012 Ms Paltos makes various claims against the estate.

1. The executrix, Mrs Bassil, brought a motion to strike out the Statement of Claim on 8 August 2013. In response, Ms Paltos filed her own motion dated 14 August 2013, seeking leave to amend her existing statement of claim. With commendable efficiency the parties decided to conduct the strike out motion on the basis that leave to amend had been granted. This judgment analyses the arguments on both sides on this basis.

1. Mrs Bassil contends that even if the Statement of Claim were to be amended it should nevertheless be struck out.

Proposed Amended Statement of Claim

1. The proposed Amended Statement of Claim seeks two forms of relief: one under Succession Act 2006 s 27 and the other in the nature of an equitable estoppel based on Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 principles. The Amended Statement of Claim pleads three groups of events, one in 1998, the next in March 2005 and the final group in March-April 2011.

1. Ms Paltos pleads (Amended Statement of Claim paragraphs 3 and 4) that the deceased, Mr Bassil, represented to her orally that if she found a "suitable property" to live in that the deceased would "buy it for you". And she alleges that following her inspection of a property in Hurlstone Park which was for sale for $250,000, and a townhouse for sale for $300,000 that the deceased represented to her "we will buy the one for $250,000", or words to that effect. The plaintiff says that she altered her position in reliance on these representations by inspecting various residential properties and by not moving out of her existing rented property, thereby incurring a rental increase of approximately $100 a week for a period of three months, amounting therefore to total of approximately $1,200. But the plaintiff pleads that the deceased resiled from his alleged promise the same year and said to her that he was not going to buy the property "as his hands were tied" but that he would do so "in the future".

1. The event in March 2005 on which the plaintiff relies is the deceased's execution of his will, in which he revoked all previous wills, appointed Mrs Bassil as his executrix, and gave her the whole of his estate (Amended Statement of Claim paragraph 5A).

1. The third group of events the plaintiff relies upon occurs in March-April 2011. Ms Paltos pleads (Amended Statement of Claim paragraphs 6 and 7) that in March 2011 when the deceased was very ill that he represented to her that he was "dying from cancer" and "wanted to buy her a property", explaining to her that the events of 1998 were "not his fault as to what had happened" and that now "he wanted to make it up" to her. Ms Paltos pleads that she responded to these March 2011 representations by looking for properties and that by early April 2011 she had found and inspected a property at Wentworth Point, which was available for sale at $469,000.

1. Ms Paltos further pleads (Amended Statement of Claim paragraph 8) that she told the deceased that she had found the Wentworth Point property, to which he responded that he wanted to "fix it up now and he needed it done very quickly" or words to that effect, and the deceased further said that he intended to purchase the property at Wentworth Point for the plaintiff and or to make provision in his will to enable the plaintiff to purchase the property she had found at Wentworth Point, or a similar property.

1. In paragraph 9 of the Amended Statement of Claim Ms Paltos alleges that "in breach of" the various representations, in 1998, March 2011 and April 2011 the deceased: failed to purchase the property at Hurlstone Park for $250,000 in 1998; failed to purchase a property at Wentworth Point or to make provision in his will for Ms Paltos to enable her to purchase the property at Wentworth Point; or failed to or give instructions for the alteration of the 2005, will so as to make provision for Ms Paltos to purchase the property at Wentworth Point, or a similar property.

1. Finally, the proposed Amended Statement of Claim pleads that the deceased died on or about 16 April 2011 without altering his 2005 will to "carry out the deceased's intentions" or to "give effect to the deceased's instructions" (paragraph 9B(a)), and that as a result the plaintiff is entitled to an order under Succession Act 2006 s 27 to rectify the 2005 will to carry out the deceased's intention by adding the words "to purchase a home unit at Wentworth Point or similar property for my niece Irene Paltos" (Amended Statement of Claim paragraph 9B(b)).

1. Finally, in language that is not entirely apt for pleading a Waltons Stores (Interstate) Ltd v Maher estoppel, but which is nevertheless clear enough, Mrs Paltos pleads (paragraph 10) that in consequence of the deceased "breaching the representations pleaded above", that the plaintiff has "suffered damages in equity". For the purposes of this argument, Ms Paltos' pleading can be understood as a plea that Ms Paltos would suffer detriment if the assumption or expectation raised by the deceased's various representations were not fulfilled by his estate, such that non-fulfilment of it would be unconscionable, instead entitling her to equitable compensation: Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 and see also Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582 at [601] per Priestley JA and Giumelli v Giumelli (1999) 196 CLR 101 at 109.

Consideration of the Defendant's Strike Out Motion

1. The defendant says the Statement of Claim should be struck out as not disclosing a cause of action. The principles governing such an application are well known and maybe shortly stated. In substance the defendant's application to strike out was on the basis that the proceedings generally or the various claims for relief disclose no reasonable cause of action (Uniform Civil Procedure Rules 2005 ("UCPR") r 13.4) or that the pleadings should be struck out as not disclosing a reasonable cause of action (UCPR 14.28). To succeed the defendant must establish that the plaintiff's claim is "so obviously untenable that it cannot possible succeed" or is "manifestly groundless", or "discloses a case which cannot succeed": General Steel Industries Incv Commissioner of Railways (NSW) (1964) 112 CLR 125 the Court must exercise exceptional caution where it is apparent that the ultimate outcome of proceedings turn upon the resolution of the disputed question of fact: Webster v Lampard (1993) 177 CLR 598. The assessment should be made taking the plaintiff's case at its highest.

1. Mrs Bassil challenges both the Succession Act s 27 and the promissory estoppel cases that Ms Paltos brings in the Amended Statement of Claim. For the reasons which follow Ms Bassil is successful on the first of these challenges.

1. The pleaded case does not make out a cause of action under Succession Act s 27, which allows a will to be rectified in certain limited circumstances. Mrs Bassil's point is that the Amended Statement of Claim does not anywhere plead that the deceased gave "instructions" to which the 2005 will did not give effect.

1. Succession Act s 27 provides as follows:

27 Court may rectify a will

(1) The Court may make an order to rectify a will to carry out the intentions of the testator, if the Court is satisfied the will does not carry out the testator's intentions because:

(a) a clerical error was made, or

(b) the will does not give effect to the testator's instructions.

(2) A person who wishes to make an application for an order under this section must apply to the Court within 12 months after the date of the death of the testator.

(3) However, the Court may, at any time, extend the period of time for making an application specified in subsection (2) if:

(a) the Court considers it necessary, and

(b) the final distribution of the estate has not been made.

1. Particular preconditions must be satisfied before Succession Act s 27 can operate: there must be "a will"; that "will" must not "carry out the testators intentions"; because either " a clerical error was made"; or "the will" does not give effect to the testator's instructions". The statutory formula that the will" does not give effect to the testator's instructions" only makes sense if the "testator's instructions" precede "the will" and there is a lack of conformity between the subsequent will and the previous instructions. This is consistent with the way that the Courts have interpreted Succession Act s 27: Rawack v Spicer [2002] NSWSC 849 at [54] and Dawson v Brazier [2012] NSWSC 117 at [3].

1. Ms Paltos does not plead any "testator's instructions" before the 2005 will with which that will does not conform. On the pleaded case the deceased had already changed his mind by the time of 2005 will. At that time the 2005 will appeared to correspond with what was his then declared intention (of resiling from his 1998 promise) and any instructions that he would therefore have then given.

1. In short Ms Paltos' plea that the 2005 will does not carry out the deceased's intentions or give effect to the deceased's instructions must fail because it does not plead or identify any relevant instructions prior to the 2005 will with which the form of that will were inconsistent; and any instructions subsequent to the 2005 will do not attract the operation of Succession Act s 27. In my view this claim cannot succeed and can be dismissed under UCPR 13.4 and 14.28 as disclosing no reasonable cause of action.

1. But Ms Paltos' promissory estoppel plea cannot be struck out. It is not the Court's task on an application such as this to weigh the full strengths or weaknesses of such a case at a trial but only to decide whether is satisfies the General Steel's test set out above. It is not manifestly groundless and therefore should not be struck out. Ms Paltos should not be deprived of her opportunity to put a promissory estoppel case, whatever Mrs Bassil may say are its difficulties. To deny a plaintiff a right to a trial in our Courts' is a serious step and one, which should not be taken in respect of this pleaded claim for relief. The reasoning is best illustrated by looking at Ms Bassil's contentions and the answers to her contentions.

1. First, Mrs Bassil argues that the plaintiff has not pleaded, nor can she demonstrate "substantial detriment" so as to enliven doctrines of promissory estoppel. Mrs Bassil argues that detrimental reliance must go beyond something which is merely insubstantial or theoretical, and that "detriment" in the relevant sense "need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial": Van Dyke v Sidhu [2013] NSWCA 198 at [104] and Sullivan v Sullivan [2006] NSWCA 312. In my view it cannot be said at this stage of the pleadings that Ms Paltos looking at a number of houses and her accepting rental increases totalling $1,200 rather than moving premises cannot qualify as "something substantial". Much will depend upon the evidence. That in my view is a matter for trial.

1. Secondly, Mrs Bassil argues that the case pleaded in the Statement of Claim is "hopeless" because even if the 1998 promises are assumed to have resulted in "substantial detriment" they were resiled from not long afterwards, and Ms Paltos did nothing about them for many years and that the case will therefore fail on laches grounds. But laches is a discretionary defence and one which arguably may have a number of answers at trial. For example, the plaintiff says that the deceased's 1998 representations were revived in March 2011. And the circumstances at trial may reveal reasons for the plaintiff not acting earlier once the deceased indicated he was resiling from the promise. And the representations were said to have been made in a family context, where a plaintiff may have a little more latitude in displacing a laches defence and where the deceased is alleged to have admitted in April 2011 some fault on his part in respect of what had happened in the past.

Conclusions and Orders

1. The Court has concluded that the plaintiff's Succession Act s 27 pleading must fail but that the other parts of the pleading will be permitted to proceed to trial. The Court has pointed out some deficiencies in the form of the surviving promissory estoppel pleading. These can no doubt be rectified and the orders below are sufficiently flexible for that to occur.

1. Both sides have had a measure of success. Ms Paltos has survived a strike out. Mrs Bassil's motion has led to some amendment of the claim. An appropriate costs order in these circumstances is that each party will bear her own costs of the motions now before the Court.

1. Accordingly the Court makes the following orders:

(1)   Grant leave to the plaintiff to amend her Statement of Claim substantially in the form of the Amended Statement of Claim but excluding any cause of action relating to Succession Act s 27;

(2)   Direct the plaintiff to file her final form of Amended Statement of Claim within 14 days of today;

(3)   Otherwise dismiss plaintiff's and defendant's motions; and

(4)   Note that there will be no order as to the costs of the plaintiff's and defendant's motions to the intent that each party will bear her own costs of these motions.

(5)   Direct the defendant to file and serve her evidence by 23 October 2013.

(6)   List the proceedings before the Registrar at 9.00 am on 24 October 2013.

Amendments

25 September 2013 - "including" substituted with "excluding"

Amended paragraphs: Decision in the headnote

Decision last updated: 25 September 2013