Jacqueline Louise Campbell v Neville Ernest Callaghan

[2013] ACTSC 148

JACQUELINE LOUISE CAMPBELL v NEVILLE ERNEST CALLAGHAN
[2013] ACTSC 148 (23 August 2013)

EXECUTORS AND ADMINISTRATORS – proceedings by executor – Trustee Act 1925 (ACT) s 92(1)

Trustee Act 1925 (ACT) ss 92
Fell v Fell (1922) 31 CLR 268

No.  SC 188 of 2013

Judge:             Master Mossop
Supreme Court of the ACT

Date:              23 August 2013

IN THE SUPREME COURT OF THE     )
  )          No.  SC 188 of 2013
AUSTRALIAN CAPITAL TERRITORY           )

BETWEEN:JACQUELINE LOUISE CAMPBELL

Plaintiff

AND:NEVILLE ERNEST CALLAGHAN

Defendant

ORDER

Judge:  Master Mossop
Date:  23 August 2010
Place:  Canberra

THE COURT DECLARES THAT:

1.   The plaintiff is by reason of the expiry of a period of at least 12 months from the testators death, upon the making of a demand for possession, entitled to possession of property known as 9 Clutterbuck Crescent, Oxley in the Australian Capital Territory as against the defendant

2.   The plaintiff is entitled to arrange the sale of the property pursuant to clause 4 of the will.

THE COURT ORDERS THAT:

3.   The plaintiff is entitled to possession of the property known as 9 Clutterbuck Crescent, Oxley in the Australian Capital Territory.

THE COURT DIRECTS THAT:

4.   The parties be heard in relation to costs.

1. This is an application by Jacqueline Louise Campbell for an order that the defendant, Neville Ernest Callaghan vacate a property at 9 Clutterbuck Crescent in Oxley. The application is made under s 92(1) of the Trustee Act 1925 (ACT) which provides for orders to be made concerning any property subject to a trust on application by any person with an interest in the property. If that order is not made, the plaintiff seeks an order that the defendant provide her with access to the property for the purposes of assessment and management of the property in line with her duties as an executor.

2.   The plaintiff is the executor and trustee of the will of Lynne Campbell, her mother.  That will is dated 27 October 2010.  Her mother had died on 19 December 2011.  Probate of the will was granted on 9 February 2012.  The will gives all the testator’s property to her trustee on the terms set out in the will.  The will contains a provision which gives the defendant an entitlement to live at 9 Clutterbuck Crescent in Oxley.  Clauses 3, 4 and 5 provide:

The following shall apply if my carer NEVILLE ERNEST CALLAGHAN shall survive me.

3.I DIRECT that the if NEVILLE ERNEST CALLAGHAN shall survive me he may live solely in the property known as 9 Clutterbuck Crescent, Oxley in the Australian Capital Territory (hereinafter called ‘the property’) for at least twelve months SUBJECT TO nobody else residing there and for him to maintain the property and paying all expenses related to the property and the use thereof.

3.    

4.IF NEVILLE ERNEST CALLAGHAN fails to meet the obligations set out in clause 3 of this my Will OR NEVILLE ERNEST CALLAGHAN chooses to leave the property for whatever reason my trustee shall arrange the sale of the property AND distribute the funds in accordance with clause 5 of this my will SUBJECT TO the payment there out of all expenses and reasonable costs incurred in relation to the sale of the property known as 9 Clutterbuck Crescent, Oxley in the Australian Capital Territory.

5.WHEN the property is sold in accordance with clause 4 of this my will I DIRECT my trustee TO GIVE ten thousand dollars funds obtained from there the sale of the property to my carer NEVILLE ERNEST CALLAGHAN and TO GIVE remainder of the funds obtained from the sale to my daughter JACQUELINE LOUISE CAMPBELL.

3.   The defendant is also entitled to a payment of money under clause 7 of the will.  An interest of the testator in property known as 16/31 Moyes Crescent in Holt which is dealt with in clause 10 of the will is not relevant to the current proceedings as it was sold before the testator’s death.

4.   As at the date of the testator’s death the defendant was living in the house along with the testator.  The defendant is described in the will as the testator’s “carer”.  The defendant described her as his “defacto”.

5.   Between October 2012 and March 2013 there was correspondence between the solicitors for the plaintiff and the defendant.  The correspondence from the plaintiff on 26 November 2012 asserted that the defendant was liable, so long as he lived in the premises, to pay all expenses associated with the property.  It raised late or non- payment of various expenses associated with the property.  A further letter on 3 December 2012 enclosed an overdue water bill.  On 24 December 2012 the defendant wrote to the plaintiff’s solicitor by e-mail pointing out the potential for difficulty with utility bills and associated correspondence which had been sent by his solicitor particularly in circumstances where he was a short and long haul truck driver.  He said he was prepared to have correspondence sent directly to him at the home address or, if the plaintiff preferred, at a post office box.  He said that he had a set amount direct debited from his account to utilities and that that amount could be adjusted in line with the usage and billing information in the utility notices.  There was further correspondence and in March 2013.  The solicitor for the plaintiff wrote to the defendant dealing with a number of matters including putting him on notice that “the property is in a state of dilapidation and disrepair.  This requires immediate action and I will require evidence of the same.”  The plaintiff reserved her right to make an application to the Supreme Court should the defendant fail to attend to the matters to the satisfaction of the executor.  On 22 March 2013 a process server served the defendant personally at his workplace with a collection of previous correspondence that had been sent to him including the letters of 26 November 2012, 3 December 2012 and 13 March 2013.

6.   On 10 April 2013 the defendant e-mailed the plaintiff’s solicitor and said:

[i]n relation to the address 9 Clutterbuck cres oxley ACT has been my address for 20 years.  Also my truck but I cant give you the address because I never know where I will be.  About the couple of bills i checked it out and they have told me to change numbers there is no problems there. Also the backyard needs a mow i will get to it soon.

7.   The originating application was lodged on 22 May 2013.  An amended originating application was filed by leave on 6 August 2013.  The plaintiff opened the case on four grounds.  They were:

(a)    the defendant had failed to “maintain the property” which was a condition upon the rights granted in clause 3 and this gave an entitlement to sell the property under clause 4;

(b)   the defendant had failed to pay “all expenses related to the property and the use thereof” which was a condition of the right granted in clause 3 and that failure gave an entitlement to sell the property under clause 4;

(c)    the defendant had chosen “to leave the property for whatever reason” and this gave an entitlement under the terms of clause 4 to sell the property;

(d)   the defendant had resided at the property for at least 12 months and that, as a consequence, the entitlement under clause 3 had come to an end, entitling the plaintiff to possession of the property.

8.   There was also the alternative claim seeking an order that the plaintiff be permitted access to the property to inspect it.

Expiry of 12 months

9.   It is convenient to first deal with the argument outlined in (d) above.  That argument requires only that the plaintiff establish that the defendant has resided “for at least 12 months”.  The interpretation of clause 3 must take place in the context of clauses 4 and 5.  Clause 3 does not give a right to reside which is unlimited in time.  The right extends for “at least 12 months”.  Those words would, on their face, indicate that when a period of “at least 12 months” had passed then there was no longer a right to live in the property that could be enforced against the executor.

10.  That relatively straightforward interpretation is made somewhat less obvious by the terms of clauses 4 and 5.  Clause 4 provides for the sale of the property in particular circumstances.  Those circumstances are a failure to meet the obligations in clause 3 or the defendant choosing to leave the property as is referred to in clause 4.  Where the property is sold in accordance with clause 4 then there is an obligation to pay $10,000 to the defendant.

11.  The obligations in clause 3 are for the defendant to (a) maintain the property and (b) pay all expenses relating to the property and the use thereof.  Although it fits somewhat awkwardly with the concept of “obligations” the requirement that (c) he live solely in the property and (d) that nobody else reside there should also be interpreted as obligations, a failure to which will trigger the operation of clause 4.

12.  Clause 4 and the consequential clause 5 sit somewhat awkwardly with giving effect to the words “for at least 12 months” outlined above.  If some effect is given to the words “for at least 12 months” then following the expiry of 12 months there is no longer an entitlement to live in the property.  There is no procedure identified by which the executor might terminate the arrangement after the end of a period of “at least 12 months”.  However, in my view, a demand for possession of the property by the executor would be sufficient.  If such a demand was made and, if necessary, possession obtained by means of an order of a court, then on one view of clause 4 the defendant would not have either chosen to leave the property or failed to meet the obligations set out in clause 3.  On that interpretation then clause 4 would have no operation and the powers and responsibilities of the executor would need to be found elsewhere.  If that was the case and the property was dealt with other than in accordance with clause 4, the obligation to pay $10,000 out of the proceeds of the sale of the property to the defendant which is contained in clause 5, would not be enlivened.  That would be an odd result having regard to the fact that it would lead to a situation where, if the defendant breached his obligations or chose to leave the property, he would get $10,000 but if he were is compelled to leave after the expiry of the 12 month period he would not be entitled to anything.

13.  In my view, it is open to read clause 4 and the reference to “chooses to leave the property for whatever reason” as extending to a situation where the defendant chooses to leave the property after a demand for possession of the property on that basis.  A broad reading of clause 4 means that what happens to the property after the defendant no longer lives there is kept within the scope of clause 4 and hence the unusual consequences that flow from the alternative interpretation are avoided.  The broad reading of clause 4 does involve interpreting the word “chooses” in a broad manner so as to encompass the situation where the defendant in fact would have very little choice, namely, after a demand for possession by the executor.  However, it appears to me to be the best way to reconcile the poorly drafted clauses in this will in a way which gives effect to the likely intent of the testator: see Fell v Fell (1922) 31 CLR 268 per Isaacs J at 273-275 and Higgins J at 283.

14.  The defendant submitted that notwithstanding the reference to “at least 12 months” he had an entitlement to continue living at the property so long as he maintained it and paid all expenses related to the property and the use thereof.  I do not accept that submission.  If that was the case then the words “for at least 12 months” were unnecessary.  If they had simply been excluded then the consequences contended for by the defendant would have followed.  In my view, it is not possible to read the words “for at least 12 months” as anything other than a limitation on the temporal extent of the rights of the defendant to live in the property.  It cannot, for example, be read as a form of qualification period by which to obtain a temporally unlimited right.

15.  Read as a whole the will gives the defendant a modest transitional and qualified entitlement to live in the property followed by a modest financial benefit from the sale of the property. The interpretation of clause 3 as giving a time-limited entitlement is consistent with the relatively modest financial benefit that the defendant is entitled to under clause 5 upon the sale of the property.  Consistently with the characterisation of the defendant’s role as that of the testator’s “carer” the benefits, although valuable, are modest and time-limited.

16.  Prior to the commencement of proceedings the plaintiff had not made a demand for possession of property based on the expiry of the period of “at least 12 months”.  In those circumstances, it is not appropriate to make an order for possession of the property.  However, having regard to the differing interpretations of the entitlements of the defendant under the will it is appropriate to make a declaration relating to those entitlements.  As a consequence, I will to declare that under clause 3 of the will of Lynne Campbell made on 27 October 2010 the plaintiff is by reason of the expiry of a period of at least 12 months from the testators death, upon the making of a demand for possession, entitled to possession of property known as 9 Clutterbuck Crescent, Oxley in the Australian Capital Territory as against the defendant.

Failure to maintain the property

17.  The plaintiff alleges that the defendant has failed to maintain the property and that gives her an entitlement under clause 4 of the will to sell the property.  Impliedly, although once again the drafting leaves much to be desired, it gives her an entitlement to possession of the property.

18.  The evidence as to the failure to maintain the property is limited.  The plaintiff’s affidavit annexed photographs of the property which show that, when compared with the state of the property shown in some Google maps photographic images, the front garden has become overgrown.  The evidence of a neighbour of the property who lives at 11 Clutterbuck Crescent is that the level of gardening activity and maintenance has diminished since the death of the testator.  He did say that since the commencement of proceedings gardening activity has increased.

19.  The defendant’s evidence was that he spends much of the time away from the property as he is a truck driver who drives for  JJ Richards, a waste removal company, and for a man named “Hairy” who is based in Queanbeyan.  He said that as a result of work done recently, the front and back gardens have now been trimmed and mowed.  He described the gardens as being a good state and the inside of the house as being perfectly clean.

20.  There were no up-to-date photographs of the property in evidence.

21.  In the light of this evidence I am not satisfied that the defendant has failed to maintain the property.  While the gardens of the property have been allowed to become overgrown, the evidence does not satisfy me that this was other than a temporary situation.  There is no evidence that the house or other buildings of the property are not in reasonable condition.  The obligations in the will are non-specific as to the extent to which the garden itself must be maintained.  That lack of specificity is consistent with the interpretation of the will as involving only a relatively short term and transitional period of occupation.

22.  As a consequence, the allegation of breach of clause 3 relating to maintenance of the property is not made out.

Payment of expenses related to the property

23.  The plaintiff has alleged that the defendant has failed to pay all expenses related to the property and the use thereof and that this is a breach of clause 3 which gives to the executor an entitlement and obligation to sell the property under clause 4. 

24.  Although the evidence on this point was less than ideal, I am satisfied that payments on the water and sewerage account with ACTEW Water were overdue as at 20 November 2012.  That account is one which relates to the defendant’s use of the property and has not been paid on time.  I am also satisfied that there have been some difficulties with communicating the obligation to pay those accounts via the defendant’s former solicitors (up until November 2012) and, more recently, directly to the defendant.  The defendant’s evidence was that he arranged for a fixed direct debit amount to be paid towards utilities.  He indicated in his letter of 24 December 2012 that he was happy to adjust that amount in the light of the quantum of the bills that require payment.  That evidence was consistent with the water and sewerage accounts that were in evidence.  In his oral evidence, the defendant confirmed that that arrangement continued.  The most recent water and sewerage account is consistent with that in that it shows as a result of regular payments of a fixed amount the account is now substantially in credit.

25.  I am not satisfied in the light of this evidence that any temporary failures to pay expenses related to the property and the use thereof are sufficient to give an entitlement in the plaintiff to possession of the property and an obligation to sell it under clause 4.  Once again, the content of the obligation in clause 3 is not very specific.  As I have indicated, that is consistent with it being a relatively short term transitional arrangement for the benefit of the defendant.  However I am not satisfied that any failure to pay an account on the due date constitutes a breach of clause 3 so as to give an entitlement to sale of the property under clause 4.

26.  As a consequence, the plaintiff’s claim to an entitlement to possession and obligation to sell the property on this basis is not made out.

Failure to live at the property

27.  The plaintiff has alleged that the defendant no longer lives at the property and that as a consequence, clause 4 is triggered.  The defendant’s evidence was that as a long and short haul truck driver he will often spend time away from the property and, when he returns to the property, will arrive at odd hours.  He said that he continued to live at the property, had no other property at which he lived, and was not in a relationship which might cause him to reside at another property.  He said that when on the road he would sleep in the back of the truck.  He said that he would often shower at either the depot of the trucking company or at a truck stop.  He admitted that when he was drinking he might stay at a friend’s property in Queanbeyan.

28.  The evidence led by the plaintiff on this issue was the evidence of Mr McMullen that since the testator’s death he believes the house has not been regularly occupied and that he has observed the defendant reversing his ute in the garage once or twice weekly at nine or ten o’clock in the evening.  He said that on such occasions the defendant was observed to leave within a short period of time.  He also gave evidence that he had spoken to ACTEW AGL employees who indicated that there had been no gas usage of the property, that staff involved in an organisation providing equipment of some sort to the testator prior to her death had attended the property in an attempt to retrieve that property, that he had been rung by Optus who were pursuing the defendant over a phone bill and that four members identifying themselves as members of the Rebel Motorcycle Club had attended the property in order to find out his new address.  He also said that he  had observed that the lights in the property were on a timer and that the curtains remain open.

29.  The objective evidence for the plaintiff was in the form of Water and Sewerage accounts issued in July 2012, October 2012 January 2013, April 2013 and July 2013.  Those bills also showed some other periods prior to the periods covered by the bills.  These showed minimal water consumption of the property, the relevant figures being consumption during the three-month periods covered by or disclosed in those bills:

January 2012:            42 kilolitres
April 2012:                 0
July 2012:                  0
October 2012:   1 kilolitre
January 2013:            0
April 2013:                 0
July 2013:                   0

30.  The defendant denied that these readings were accurate suggesting that there must be a faulty meter.

31.  The credibility of the defendant’s evidence as to living of property was attacked.  He was cross-examined about events in 2002 when, contrary to his evidence that he had been in a defacto relationship with the testator for 18 or 19 years, he had been described by a woman other than the testator as his de facto or “partner”.  He was also cross-examined about evidence given by the testator in Administrative Appeals Tribunal proceedings in 2006 that he was her boarder.  The defendant was not a particularly impressive witness.  His evidence was at best vague and non-specific.

32.  Clearly enough the words in clause 4 “leave the property for whatever reason” need to be read down.  They need to be read down so that leaving the property is interpreted as leaving the property so that the defendant no longer lives there.  Further, having regard to his occupation as a truck driver, it must be read in the context of that fact, which I find would have been known to the testator.  Precisely what is involved in living at an address does not have a fixed quantifiable meaning.  It must involve an element of use as well as an element of intention.  In that sense it is similar to the concept of residing at a particular place.  It does not require that a person be present all the time.  Content can be given to the term in clause 3 by reference to the word “solely”.  That word might either be there to reinforce the proposition, spelt out later in clause 3 that he lived there alone or if it is given separate work to do, to require that he not live anywhere else.  In my view, the latter, is the most appropriate interpretation of the word.  As a consequence clause 3 requires that the defendant “live” at the property and that he not “live” somewhere else.

33.  Notwithstanding the evidence of the defendant that he continued to live at the property and his evidence about where he showered and his life on the road, in the light of the water bills which show that one kilolitre was used at the property between February 2012 and July 2013, I am satisfied on the balance of probabilities that the defendant has not been living at the property during that period.  That is more likely than that there is a defect in the water meter that has arisen since February 2012 or that the defendant’s use of the property whilst living there has not involved using the shower, toilet or any other form of water sufficient to make the meter turnover more than one kilolitre in a more than 12 month period.

34.  While the defendant may well intend to live at the property or wish to maintain the possession of the property, that is not sufficient for the purposes of the will.  If he does not actually live there then that is sufficient to terminate his entitlement to continue living there.  That conclusion not only arises out of the text of the will but is also consistent with the intent of clauses 3, 4 and 5 which I have outlined above namely to provide a relatively short term transitional measure after the death of the testator.

35.  As a consequence, both because the defendant has not lived solely at the property and because he has in the period April 2012 and July 2013 left the property the plaintiff is entitled, indeed obliged, to sell the property under clause 4 of the will. 

36.  It is appropriate that the Court declare that the plaintiff is entitled to arrange the sale of the property pursuant to clause 4 of the will.  In order to make this effective, it is also appropriate that the plaintiff have an order for possession of the property.

Alternative claim

37.  The alternative claim made by the plaintiff was that she was entitled to an order permitting her or a third party to inspect the property.  No statutory basis was pointed to as authorising such an order.  I was pointed to no authority which indicated that such an order was appropriate in the context of the administration of a trust or the execution of a will.  Further, the evidence was not such as to disclose a clear refusal by the defendant to permit such an inspection and in his evidence he said that he was willing to allow such an inspection.

38.  In the light of my conclusions on other issues and the factors referred to in the preceding paragraph I do not think it is necessary or appropriate to determine this issue.

Relief

39.  The orders that I have indicated I will make in relation to the defendant failing to live at the property should, in a practical sense, supersede the declaration in relation to an entitlement to possession upon demand by reason of expiry of the period of at least 12 months.  However, in case I am wrong in my conclusions as to the defendant leaving the property I consider it appropriate to make the more general declaration. 

40. Therefore the orders that I will make are:

1.   The Court declares that the plaintiff is by reason of the expiry of a period of at least 12 months from the testators death, upon the making of a demand for possession, entitled to possession of property known as 9 Clutterbuck Crescent, Oxley in the Australian Capital Territory as against the defendant

2.   The Court declares that the plaintiff is entitled to arrange the sale of the property pursuant to clause 4 of the will.

3.   The Court orders that the plaintiff is entitled to possession of the property known as 9 Clutterbuck Crescent, Oxley in the Australian Capital Territory.

4.   The Court directs that the parties be heard in relation to costs.

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of Master Mossop.

Associate:

Date:    23 August 2013

Counsel for the plaintiff:  Mr D Prail
Solicitors for the plaintiff:  Prail Lawyers 
Counsel for the defendant:  Mr J O’Keefe
Solicitors for the defendant:  John O’Keefe
Date of hearing:  29 July and 23 August 2013
Date of judgment:  23 August 2013