LEGAL PRACTITIONERS COMPLAINTS COMMITTEE and REYBURN [2007] WASAT 29

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2007] WASAT 29
Act:	LEGAL PRACTITIONERS ACT 1893 (WA)
Case No:	VR:26/2004	Heard:	23 OCTOBER 2006 AND 14 NOVEMBER 2006
Coram:	HON R VIOL (SUPPLEMENTARY DEPUTY PRESIDENT) MS A LISCIA (SENIOR SESSIONAL MEMBER) MS B HOLLAND (SESSIONAL MEMBER)	Delivered:	6/02/07
No of pages:	42	Judgment Part:	1 of 1
Result:	Application dismissed
Category:	B
PDF Version

Parties:	LEGAL PRACTITIONERS COMPLAINTS COMMITTEE JOHN HENRY REYBURN
Catchwords:	Vocational regulation Solicitor acting as coadministrator with client Distributions from estate made after notice of application against estate under the Inheritance (Family and Dependants Provision) Act 1972 (WA) but before application determined whether in circumstances such conduct was unsatisfactory conduct by unprofessional conduct
Legislation:	Inheritance (Family and Dependants Provision) Act 1972 (WA), s 11, s 20(1) Legal Practitioners Act 1893 (WA) State Administrative Tribunal Act 2004 (WA), s 13
Case References:	Blackman v Permanent Trustee Co Ltd [2003] NSWSC 305 Briginshaw v Briginshaw (1938) 60 CLR 336 Gonzales v Claridades [2003] NSWSC 508 Grove v Fisher & Anor [2002] WASC 247 In Re Ralphs (Dec); Ralphs v District Bank Ltd [1968] 1 WLR 1522 In Re Simson (Dec), Simson v National Provincial Bank Ltd [1950] Ch 38 In The Estate of Gough, Deceased; Gough v Fletcher (1973) 5 SASR 559 Kyle v Legal Practitioners' Complaints Committee [1999] 21 WAR 56 Lo Surdo v Public Trustee & Anor [2003] NSWSC 837 Medical Board of Western Australia and Bham [2006] WASAT 190 Nil
Orders	The application be dismissed,The Tribunal invites the parties to make written submissions as to costs

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : VOCATIONAL REGULATION ACT : LEGAL PRACTITIONERS ACT 1893 (WA) CITATION : LEGAL PRACTITIONERS COMPLAINTS COMMITTEE and REYBURN [2007] WASAT 29 MEMBER : HON R VIOL (SUPPLEMENTARY DEPUTY PRESIDENT)

MS A LISCIA (SENIOR SESSIONAL MEMBER)

MS B HOLLAND (SESSIONAL MEMBER)

HEARD : 23 OCTOBER 2006 AND 14 NOVEMBER 2006 DELIVERED : 7 FEBRUARY 2007 FILE NO/S : VR 26 of 2004 BETWEEN : LEGAL PRACTITIONERS COMPLAINTS COMMITTEE

Applicant

AND

JOHN HENRY REYBURN

Respondent

Catchwords:

Vocational regulation - Solicitor acting as coadministrator with client - Distributions from estate made after notice of application against estate under the Inheritance (Family and Dependants Provision) Act 1972 (WA) but before application determined - whether in circumstances such conduct was unsatisfactory conduct by unprofessional conduct

(Page 2)

Legislation:

Inheritance (Family and Dependants Provision) Act 1972, (WA), s 11, s 20(1)

Legal Practitioners Act 1893 (WA)
State Administrative Tribunal Act 2004 (WA), s 13

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant : Dr AF Dickey QC

Respondent : Mr M Cuerden

Solicitors:

Applicant : Legal Practitioners Complaints Committee

Respondent : Nicholson Clement

Case(s) referred to in decision(s):

Blackman v Permanent Trustee Co Ltd [2003] NSWSC 305
Briginshaw v Briginshaw (1938) 60 CLR 336
Gonzales v Claridades [2003] NSWSC 508
Grove v Fisher & Anor [2002] WASC 247
In Re Ralphs (Dec); Ralphs v District Bank Ltd [1968] 1 WLR 1522
In Re Simson (Dec), Simson v National Provincial Bank Ltd [1950] Ch 38
In The Estate of Gough, Deceased; Gough v Fletcher (1973) 5 SASR 559
Kyle v Legal Practitioners' Complaints Committee [1999] 21 WAR 56
Lo Surdo v Public Trustee & Anor [2003] NSWSC 837
Medical Board of Western Australia and Bham [2006] WASAT 190

(Page 3)

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REASONS FOR DECISION OF THE TRIBUNAL

Summary of Tribunal's decision

1 The Tribunal dealt with an allegation by the applicant that the respondent, a legal practitioner, was guilty of unsatisfactory conduct by unprofessional conduct in that:

(i) being co-administrator with Andrea Jeanette Patrick (the complainant) of the estate of Gordon Paul Patrick (the deceased) and

(ii) having been made aware of the intention of the deceased's surviving de facto partner, Maria Elizabeth Pereira (Mrs Pereira) to make an application for family provision from the deceased's estate under the Inheritance (Family and Dependants Provision) Act 1972 (WA) (The Act)

(a) he authorised the distribution of estate funds totalling $110 700 or thereabouts to the complainant and the four children of her marriage to the deceased (the four children) prior to the determination of the eventual family provision proceedings, with the result that:

(b) the deceased's estate had insufficient funds to pay Mrs Pereira and the four children their full entitlements pursuant to the orders of Justice Hasluck in the ensuing family provision proceedings;

(c) to her financial embarrassment, the complainant unexpectedly became liable to repay to the estate the sum of $60 094.69 or thereabouts from distributions that she had previously received from the deceased's estate.

2 In the course of the hearings the Tribunal considered the following three issues:

Issue no 1

Whether:

(Page 5)

(a) as a matter of Western Australian law

or alternatively

(b) as an obvious matter of prudence

if the legal personal representative of a deceased is aware that an application for provision under the Act might be made, he or she should not ordinarily make a distribution from the deceased's estate for six months after the grant of probate or letters to the administration, or if proceedings for such provision is made, until the proceedings have been determined.

And consequently,

Issue no 2

Whether, given that it became known to the respondent by 1 June 1999 that Mrs Pereira might make an application under the Act, a competent legal respondent acting as administrator of the deceased's estate should not ordinarily have made any distributions from the estate until six months after the grant of letters of its administration - that is, until 19 May 2000 - or upon the determination of such applications that Mrs Pereira might make within that term.

And consequently,

Issue no 3

By making the distributions that he made from the deceased's estate prior to the determination of Mrs Pereira's application under the Act, the respondent's conduct fell short of the professional conduct expected of legal practitioners acting competently in the administration of a deceased's estate, and therefore was guilty of unsatisfactory conduct by unprofessional conduct as alleged in the reference.

3 The Tribunal determined these issues as follows:

(Page 6)

4 At the time the distributions were made:

Issue (1)

(a) The Western Australian law suggested that once he had notice of a probable application, the respondent should not have made the distributions although at the time such law was not absolutely clear.

(b) As a matter of prudence, the respondent should not have made the distributions until such time as the extent of the probable claim and its effect on Mrs Patrick and the children was known, or at least clearer.

Issues (2) and (3)

In the particular circumstances of the case, the respondent's conduct did not amount to unsatisfactory conduct by unprofessional conduct.

5 Thus, the application was dismissed.

Relevant factual background

6 The respondent is a legal practitioner carrying on practice in Mandurah; he is a principal of a firm the business of which includes, inter alia, dealing with the estates of deceased persons.

7 On 10 May 1999, Gordon Paul Patrick (the deceased) died intestate.

8 The deceased left a surviving spouse (Mrs Patrick) and four children, including one under 18 years of age.

9 At the time of death, the deceased was living apart from Mrs Patrick, and lived with his de facto wife, Maria Elizabeth Pereira (Mrs Pereira). On or about 19 May 1999, Mrs Patrick sought advice from the respondent in relation to the administration of the deceased's estate. Having received that advice, Mrs Patrick agreed that both she and the respondent should jointly become the administrators of the deceased's estate.

10 The respondent prepared the necessary documents and both parties signed them.

(Page 7)

11 In early 1999, the respondent became aware that Mrs Pereira was contemplating an application under the Inheritance (Family and Dependents Provision) Act 1972 (WA) (the Act) for provision for herself and the four children on the grounds that she was the deceased's de facto widow.

12 On 18 November 1999, the respondent and Mrs Patrick were together granted letters of administration of the deceased's estate.

13 On or about 20 December 1999, the respondent distributed from the deceased's estate $8000 to Mrs Patrick and $3000 to each of the four children.

14 On 10 January 2000, the respondent made further distributions from the deceased's estate - $10 000 to Mrs Patrick, $10 000 to each of the four children and $20 700 to Mrs Patrick as a lump sum to provide maintenance for the youngest child of the marriage for the duration of her minority. On 18 January 2000, the respondent distributed a further $20 000 from the deceased's estate to Mrs Patrick.

15 There is a dispute between Mrs Patrick and the respondent as to whether the distributions were made at the request or direction of Mrs Patrick.

16 On or about 19 January 2000, Mrs Pereira instituted proceedings for provision under the Act.

17 There is a dispute between the parties as to whether the respondent at any time advised Mrs Patrick that she might be required to reimburse the deceased's estate any part of the said distributions which she had received.

18 There is also a dispute as to whether, and when the respondent was advised by Mrs Patrick of the receipt by her of monies from an AMP policy held by the deceased.

19 The proceedings for provision by Mrs Pereira came on for hearing on 14 November 2001, before Justice Hasluck in the Supreme Court of Western Australia, and he delivered his Reasons for Judgment on 19 December 2001.

20 On 19 April 2002, Justice Hasluck made formal orders to give effect to both his Reasons and his determination of that day on the issue of costs. Justice Hasluck ordered, inter alia, that Mrs Pereira became entitled to receive one quarter of the agreed value of the deceased's estate after

(Page 8)

deduction of all costs to be paid from the estate, that the remainder of the deceased's estate, after deduction of all costs to be paid to the estate, was to be distributed in accordance with the Act.

21 Mrs Patrick and the four children thus became liable to repay any distribution already received by them that became necessary to enable the estate to pay Mrs Pereira her entitlement under the judgment.

22 As a result, Mrs Patrick became liable to repay the deceased's estate the sum of approximately $60 094.69.

23 After being advised by the respondent of her liability to repay the monies to the deceased's estate, Mrs Patrick made a complaint to the Legal Practitioners Complaints Committee (the applicant) concerning her liability (and inability) to repay the sum required to be paid to Mrs Pereira under the judgment, and other matters.

24 After seeking and obtaining the respondent's answers to the complaint, the applicant, in Reference no 12B of 2004, alleged that the respondent was guilty of unsatisfactory conduct by unprofessional conduct as set out below. The matter was referred to the Tribunal for consideration pursuant to s 13 of the State Administrative Tribunal Act 2004 (WA) (the SAT Act).

25 The allegation was in the following terms:

(the respondent) "is guilty of unsatisfactory conduct by unprofessional conduct in that:

(a) being co-administrator with Andrea Jeanette Patrick (the complainant) of the estate of Gordon Paul Patrick (the deceased) and

(b) having been made aware of the intention of the deceased's surviving de facto partner, Maria Elizabeth Pereira (Mrs Pereira) to make an application for family provision from the deceased's estate under the Inheritance (Family and Dependants Provision) Act 1972 (WA) (The 1972 Act),

he authorised the distribution of estate funds totalling $110 700 or thereabouts to the complainant and the four children of her marriage to the deceased (the 4 children) prior to the

(Page 9)

determination of the eventual family provision proceedings, with the result that:

(c) the deceased's estate had insufficient funds to pay Mrs Pereira and the four children their full entitlements pursuant to the orders of Justice Hasluck in the ensuing family provision proceedings;

(d) to her financial embarrassment, the complainant unexpectedly became liable to repay to the estate the sum of $60 094.69 or thereabouts from distributions that she had previously received from the deceased's estate."

Issues and contentions

26 On 24 August 2006, the applicant filed a Statement of Issues, Facts and Contentions in the Tribunal. The issues to be determined were noted by the applicant as follows:

"1. The issue before the Tribunal is whether the practitioner, JOHN HENRY REYBURN, is guilty of unsatisfactory conduct by unprofessional conduct in that:

(a) being co-administrator with Andrea Jeanette Patrick (Mrs Patrick) of the estate of Gordon Paul Patrick (the Deceased); and

(b) having been made aware of the intention of the Deceased's surviving defacto partner, Maria Elizabeth Pereira (Mrs Pereira), to make an application for family provision from the Deceased's estate under the Inheritance (Family and Dependants Provision) Act 1972 (WA) (the 1972 Act);

he authorised the distribution of estate funds totalling $110 700.00 or thereabouts to Mrs Patrick and the 4 children of her marriage to the Deceased (the 4 children) prior to the determination of the eventual family provision proceedings, with the result that:

(c) the Deceased's estate had insufficient funds to pay Mrs Pereira and the 4 children their full entitlements pursuant to the orders of Justice Hasluck in the family provision proceedings; and

(Page 10)

(d) Mrs Patrick unexpectedly became liable to repay to the estate the sum of $60 094.69 or thereabouts from distributions that she had previously received from the Deceased's estate, to her financial embarrassment."

27 In such document, the applicant summarised the contentions as follows:

"19. As a matter of Western Australian law, or in the alternative as an obvious matter of prudence, if the legal personal representative of a deceased is aware that an application for provision under the 1972 Act might be made, her or she should not ordinarily make a distribution from the deceased's estate for six months after the grant of probate or letters of administration or, if proceedings for such a provision is made, until the proceedings have been determined.

And consequently -

20. In light of the facts of the present case, upon becoming aware by 1 June 1999 that Mrs Pereira might make an application under the 1972 Act, a competent legal respondent acting as administrator of the Deceased's estate should not ordinarily have made any distributions from the estate until six months after the grant of letters of administration (i.e. until 19 May 2000), or upon the determination of any such application that Mrs Pereira might make within that time."

28 At the hearing, after discussions between counsel and the Tribunal, it was accepted by both parties that the key elements of the applicant's case were as follows:

(i) The respondent was a co-administrator of the estate of the deceased.

(ii) The respondent had notice of a probate claim against the estate and/or Mrs Patrick's share of the estate.

(iii) With that knowledge, the respondent made distributions totalling $110 700 to Mrs Patrick and the four children prior to the determination of the claim referred to in (ii).

(Page 11)

(iv) The applicant contended that as a matter of law or a matter of prudence, the respondent should not have, in the circumstances in (i) to (iii) above, ordinarily made any distributions before the determination of the claim, save for some exceptional circumstances (for example, the impecuniosity of a beneficiary).

(v) In this case, there were no exceptional circumstances. Therefore, the respondent should not have made any distributions and, having done so, he acted unprofessionally.

29 These contentions having been made clear and accepted by the parties, the following issues were accepted as arising for determination by the Tribunal:

Issue no 1

Whether:

(a) as a matter of Western Australian law

or alternatively

(b) as an obvious matter of prudence

And consequently,

Issue no 2

(Page 12)

is, until 19 May 2000 - or upon the determination of such applications that Mrs Pereira might make within that term.

And consequently,

Issue no 3

30 It should be noted that it was the applicant's contention that the distributions made by the respondent were without any requests for funds from either Mrs Patrick or any of the children on any occasion, and that the respondent never at any time advised Mrs Patrick that she might be required to reimburse the deceased's estate any part of the distributions which she had received.

Respondent's contentions

31 The respondent accepted that he was, with his client, Mrs Patrick, a co-administrator of the estate. He also accepted that he had prior notice of a possible claim against the estate and/or his client's share of the estate, and with that knowledge, he made distributions to the value of $110 700 prior to the determination of that possible claim.

32 The respondent maintained that all distributions were made at the request of, or on the instructions of, Mrs Patrick.

33 The respondent said that at the time he made the distributions (that being the relevant time for the purposes of judging his conduct), there was no statutory prohibition on the respondent as administrator in making the distributions. As to the non-statutory law, the obligation of a personal representative, the respondent maintained, was not clear, there being a conflict in the authorities as to the obligations of a personal representative in the position of the respondent in this case. The respondent contended that there was no legal basis on which he should not have made the interim distributions to Mrs Patrick, and that the law, as it existed at the

(Page 13)

time, either permitted him to make the distributions or, in fact, required him to make all interim distributions.

34 Also, the respondent contended it was not imprudent for him to have made the distributions, in light of the circumstances and the advice received from counsel at the time as to the likelihood of success of any competing claim to the estate.

35 Finally, the respondent said that even if either as a matter of law or prudence he should not have made the distributions, his actions in making the distributions in the circumstances cannot amount to unprofessional conduct.

Areas of disputed facts

36 It was agreed that the following areas of disputed facts were important for the Tribunal to determine:

(i) Were there any conversations between the respondent and Mrs Patrick before the distributions as to such distributions?

(ii) If so, what was discussed?

(iii) Was the practitioner made aware of the receipt of AMP monies by Mrs Patrick?

(iv) If so, what was he told?

The evidence

37 Mrs Andrea Jeanette Patrick gave a statement (Exhibit B).

38 She separated from her husband, Gordon Paul Patrick, after they had been together for 23 years, 18 of which they had been married. After her husband died without leaving a Will, Mrs Patrick contacted the respondent. She said that when she first saw the respondent, he told her that, even though her husband had left no Will, because of the law, she and her four children should receive her husband's estate. A diagram was drawn by the respondent showing how the money would be distributed. She said it showed that she was entitled to the first $50 000 of the estate and one-third of the remaining estate. A portion would be set aside as maintenance for the youngest child, Lauren, who was 15, and the remainder of the estate would be divided equally between the four children.

(Page 14)

39 She was told by the respondent that she could apply for letters of administration, but because of Lauren being a minor, if she obtained letters of administration alone, then she would have to have a guarantee in relation to the estate. She said the respondent told her it would better if she nominated him to be a joint administrator to avoid the necessity of any guarantee. She agreed with that proposition. The respondent also told her that the three boys could have their own solicitor if they wanted, but there was no reason for them to do so.

40 A week after Mrs Patrick first saw the respondent, he advised her that he had been contacted by solicitors for Mrs Pereira, who maintained that she was the husband's de facto widow and that she was planning to make an application under the Act. Mrs Patrick had also received a letter to this effect from the solicitors for Mrs Pereira.

41 Mrs Patrick saw the respondent and told him that she knew that her husband had a "lady friend" but from what she had been told by her husband, she didn't think that Mrs Pereira was a de facto. Mrs Patrick asked the respondent whether the previous advice as to the entitlements would change, and his response was that he was confident that they would be successful in defending the claim by Mrs Pereira and there would not be any changes to the distribution of the money – if anything, it was suggested, Mrs Pereira may come out of it with a nominal amount.

42 Mrs Patrick was of the understanding that the estate had to be held in trust and not spent until the claim by Mrs Pereira had been sorted out by agreement or court order. She was therefore surprised when, in December 1999, the respondent suggested giving her and the children some money from the estate. She said she remembered him saying "you've had such a tough time, you may as well have a good Christmas". Her evidence was that she had never told the respondent that she had any pressing financial needs or that she needed funds from the estate – although her income was not high, she did not need the funds. At no time did she instruct or authorise the respondent to make such payments. In accordance with his comments, the respondent gave Mrs Patrick $8000 and $3000 to each of the children.

43 In relation to the distribution to the children, Mrs Patrick told the respondent that she did not want the money distributed. Her main reason for that was that her son, Matthew, was only 18, and she thought that he would not spend the money wisely. She remembered the respondent telling her that he was "not allowed" not to distribute to Matthew and the other boys, because they were older than 18.

(Page 15)

44 Early in January 2000, the respondent told Mrs Patrick that he was planning to forward more funds to her. She asked him whether or not there would be a problem created if Mrs Pereira won her case. The respondent assured her that that was not going to happen because Mrs Pereira could not meet the necessary criteria and that, therefore, distributing the money would not be a problem.

45 When Mrs Patrick had first seen the respondent, he asked her what insurance her husband had. She told him that he had a private life insurance policy through the AMP. She also advised him that when they were together, she was the nominated beneficiary, but didn't know who it was at that time. She was advised to ring the AMP and find out. She also said that she thought there was some "government insurance", and she thought that she was also the nominated beneficiary for those monies.

46 Mrs Patrick spoke to Mr John Davies at AMP, who had organised the insurance for them. He told her that she was still the nominated beneficiary, and forms were sent to her in order to collect the payment.

47 She contacted the respondent and asked him for his advice as to what should be done about the AMP money. He told her that she was entitled to the money, and that it should be paid directly to her. He said that the money was hers personally and not part of the estate, and also, that because Mrs Pereira is not a de facto, and that she was her husband's nominated beneficiary, she should receive the money. She trusted the respondent's advice because, according to Mrs Patrick, the respondent was in contact with AMP about the money, and he witnessed a document signed by Mrs Patrick concerning the AMP money.

48 Mrs Patrick received the AMP money early in 2000 and told the respondent that she had received it. At the same time, the respondent gave her a cheque for $20 700 to be used as maintenance for Lauren. At the time, the respondent told her by letter that he was giving her that money in a lump sum to get the money out of his trust account because he wanted to "thwart Mrs Pereira". The $20 700 paid for Lauren's maintenance was put into a bank account and drawn at the rate of $325 per fortnight (plus other incidental maintenance costs) until Lauren turned 18. Also at the same time, the respondent wrote to Mrs Patrick's three sons referring to the $3000 already paid to them and advising that he was providing a further cheque to each of them of $10 000, and that it was a further part of their share of the estate, which he estimated would be approximately $33 000 each. In the same letters, the respondent asked for Mrs Patrick's sons' consent to vary the estate so as to provide the $20 700

(Page 16)

for Lauren's maintenance, and advised them that their share of the estate would be reduced to approximately $30 000.

49 Having received the AMP money and obtained the respondent's advice, at his suggestion, Mrs Patrick used part of the AMP money to pay each of her sons the rest of their share of the estate - that is, $17 000 each. The respondent told her that she would be reimbursed personally for those amounts out of the remaining estate money that he held. Late in January 2000, the respondent paid Mrs Patrick a further $10 000 and gave her $10 000 to hold on behalf of Lauren.

50 In all, Mrs Patrick received a total of $30 000 comprised of investments of $21 000 and a motor vehicle to the value of $9000 as Lauren's share of the estate (apart from her maintenance). The $21 000 was invested in a Westpac shares fund for Lauren by Mrs Patrick, and Lauren drew on this shortly after she turned 18.

51 After Justice Hasluck made formal orders in April 2001 that Mrs Pereira receive one quarter of the value of Mrs Patrick's husband's estate after deduction of costs and the remainder be dealt with according to the Act, there were insufficient funds then remaining in her husband's estate to pay the amounts due under Justice Hasluck's orders as a result of the distributions made to her by the respondent.

52 Mrs Patrick was required to repay a total of $60 094.69 to her husband's estate. She did not have this money, even after selling shares. In the end, she said, she had to remortgage her house, using up almost all of its equity, in order to repay the monies to give effect to Justice Hasluck's orders.

53 Mrs Patrick confirmed in evidence that when her husband died, the three boys were mostly living away from home.

54 The respondent suggested, in his Statement of Issues, Facts and Contentions, that discussions had been held between Mrs Patrick and the respondent and Sean Stocks, a solicitor employed by him, as to the AMP money. It was suggested that Mrs Patrick had indicated that she would maintain the investment of the AMP money until the claim by Mrs Pereira was completed and it was known what the result of that was. It was suggested that Mrs Patrick had said that if any monies were needed by the estate to meet any of the debts of the estate to Mrs Pereira or otherwise, she would redraw upon an AMP mortgage redraw facility, to which the AMP money had been credited. Mrs Patrick denied that that undertaking was given by her or that she had ever told the respondent that she would

(Page 17)

preserve the AMP money. She reiterated that the respondent had told her that the AMP money was money in her own name and not part of the estate, and further, that if Mrs Pereira received any amount, it would only be a nominal amount.

55 Mrs Patrick also denied a suggestion by the respondent that she had given up work and lived off the AMP money for several years. She said that she was already on a pension. The respondent had also made a suggestion that Mrs Patrick had paid for an overseas holiday for herself and her boyfriend to Europe out of the AMP funds. She denied that this was the case and said that she had never left the country. This was proved by her passport, the last time she went to Europe being in 1996.

56 In relation to the $20 700 which Mrs Patrick had received for Lauren's maintenance, she said that that was placed in the Westpac mortgage account, and she withdrew fortnightly on that, as she had done when her husband was still alive, for the maintenance of their daughter.

57 Mrs Patrick denied, as the respondent had said in his statement, that she had "consistently advised him that she was suffering very real financial hardship". She also denied that she advised him that she was struggling financially - or that she was struggling financially - but said that she had said that it was never easy. She denied also that she was in "dire straits" or that she had suggested that to the respondent.

58 Mrs Patrick emphatically denied, as suggested by the respondent, that she had asked the respondent if money could be made available to her personally, or to her children, from the estate, and said the she actually asked the respondent that it not be distributed to her children for the reasons already given. She also denied telling the respondent that if any of the funds which she had received from AMP were needed at a later date in relation to Mrs Pereira, they would be made available to him.

59 Mrs Patrick then confirmed the advice she had been given by the respondent in relation to the AMP money and the way in which she had expended some of the money by giving an amount of $17 000 to each of the children. She produced a document (Exhibit C) which she said she had found the evening before she gave evidence when there was a garage sale and she went through some boxes. She pointed out that the document, in her hand-writing, detailed the payments she had made from time to time, and income received by her. This document will be referred to in due course.

(Page 18)

60 Mrs Patrick was cross-examined by counsel for the respondent. Mrs Patrick was referred to a letter to her, dated 13 June 2002 from the respondent's firm, written by Sean Stocks, who apparently had taken over the file concerning the estate. The letter had enclosed with it a table of monies distributed, which was said to show the total amount of distribution and total entitlements under the estate. Further sums of money were said to be due to Elizabeth, Lauren and the three sons. It said that Mrs Patrick had been "overpaid in the sum of $60 094.69" and was required to pay that money back into the estate. Mrs Patrick said that this letter, amongst other things, was what caused her to make a complaint to the applicant. She confirmed that her recollection was that there was somewhere around $60 000 said to be owing by her, but she had no idea as to the breakdown of the figures concerning the children. She confirmed that she had been directed by the respondent to pay the children out in full out of the AMP monies, and she would be reimbursed out of the trust account.

61 Mrs Patrick was cross-examined as to distributions made by the respondent, and she appeared to have a limited knowledge of the amounts paid and the distributions generally. The Tribunal found it difficult to accept that Mrs Patrick did not have a better memory of these matters. Mrs Patrick appeared to be very naïve as to the administration of the estate, and she said that she was going on the directions of the respondent and "trusted him implicitly". She confirmed that she told the respondent that she did not need monies to be paid out of the estate to her, and in particular, that she did not want the children paid any monies. She was unable to recall the exact use to which she put the AMP money and the distributions received from the respondent. She thought that she had paid for some security screens and doors, and also paid for barrister, Mr Paul Nicholls', fees for the case in the Supreme Court. She also thought that she had a bore and reticulation installed at the house because she was on a disability pension and it made life easier, and she also purchased a car. She said that she had no idea why the amount of $60 000 odd was owing. She denied telling the respondent that she was going to put the AMP money into her mortgage account to offset the amount that was owing to Mrs Pereira. She said that "it is another lie that goes along with my trip to Europe, and there is also a claim from the respondent that, perhaps, I never paid my children. Well, I did and if he had bothered to find out he would have known that". She was unsure whether she spent the total amount of monies received by her. She said that the respondent had to explain to her what a trust account meant, and that having been explained to her, she asked him why he was giving her the money because

(Page 19)

she thought it was supposed to be kept there in trust, not with her. She thought that it was fairly general knowledge as to what a trust account meant. She generally knew that prior to December 1999, the monies were to be held in a trust account until the competing claims were dealt with. She was absolutely sure that the respondent had not told her that he had to be an administrator of the estate.

62 Mrs Patrick was referred to the complaint she made to the applicant dated 22 June 2002. She was unsure whether it was at the first meeting with the respondent that the issue of Mrs Pereira was discussed. She said that she had told the respondent that she wasn't sure about the standing of the relationship between her late husband and Mrs Pereira. She agreed that, as at December 1999, her income was a Centrelink payment, and she agreed that the maintenance payments had stopped during 1999. She confirmed again that she did not ask the respondent for money. She thought that she received the first cheque when she saw the respondent, about something else, around 20 December 1999. She denied making a special trip from Mandurah to Rockingham to pick up the cheques because she had told the respondent that she was in dire financial straits. She said that she would have thanked him for the cheques, but she definitely did not ask for the money. When it was pointed out that the respondent's time sheets did not record any time meeting the respondent on 20 December 1999, she said that she had called in on numerous occasions to the office and she presumed it was one of those times. She denied again that she told the respondent that she and her sons and daughter were struggling financially. After some pressing by counsel, Mrs Patrick said she might have discussed her financial position with the respondent and told him that her financial position was "hard". She confirmed again that the respondent told her that if Mrs Pereira was to get anything at all, it would be a nominal amount.

63 Mrs Patrick confirmed that after it became known that the AMP money was available to her early in 2000, the respondent advised her that the children would all have to receive their $40 000, and because there was $17 000 owing to each of them, she was to pay them out of the AMP cheque account. She denied that the respondent asked her to pay the AMP money into his trust account, and said that he had told her that the AMP money was not part of the estate.

64 Mrs Patrick was then cross-examined as to a joint affidavit which had been sworn, confirming the assets of the estate for the purpose of the grant of the letters of administration. It was clear that an entry which had been made in the document suggesting that an amount, which had been

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said to be AMP money in the sum of $79 645, was not AMP money, but from a government pension fund.

65 Counsel for the respondent suggested that Mrs Patrick was being cross-examined as to these matters to test her credit. The position is clear: the affidavit was prepared in the office of the respondent, and no doubt at his direction, the affidavit was wrong in the particular respect concerning the AMP money, and the respondent had accepted that there was a mistake. In the Tribunal's view, there can be no value to the respondent in the cross-examination of Mrs Patrick as to these matters.

66 Mrs Patrick continued her denial that she had agreed with the respondent that if any of the monies that she received from AMP were needed to be repaid at a later date, then they would be used to make such payments. She said that when she received the letter dated 13 June 2002 from the respondent, she panicked and received further legal advice and spoke to the bank; it was a large figure, and she was frightened about it. She confirmed that she did not want the children to be given the money from the estate when offered by the respondent, and wished the money to be put into a trust account. She said she never really understood why it was necessary for her to see the solicitor, Mr Peter Marks. She said she was told by the respondent that there was some confusion over the two superannuations, that "something had gone awry", and that the respondent was no longer able to represent her. Thus, Mr Marks and Mr Nicholls would see her. She received a letter from the respondent's firm, dated 23 August 2001, setting out the reasons why the respondent could no longer act for her, but she said it didn't make a lot of sense to her. At the time, she said, she did not have a lawyer to act on her behalf. She thought that she was going to see Mr Marks about the Pereira case.

67 Mrs Patrick advised the Tribunal that she was "totally lost" as to the administration of the estate and left all the preparation of documents etc to the respondent.

68 The Tribunal was of the view that Mrs Patrick was a person untrained in the law, particularly as to estates, and that she had very little, if any, knowledge of the administration of estates. Her evidence showed her to be a person of some legal and commercial naivety who, from the time of the first consultation with the respondent, was dependent upon him for advice and guidance in the administration of her late husband's estate. In this regard, it is noted that after taking initial advice from the respondent, Mrs Patrick received a letter from him, dated 15 May 1999, confirming the initial advice and raising the possibility of both of them

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acting as joint administrators, it being pointed out to Mrs Patrick that because the Court would be likely to require guarantees to be given due to the fact that one of the beneficiaries was a minor, one way to avoid that was to have a joint administrator who is a solicitor, and that the respondent would be prepared to act as such co-administrator if Mrs Patrick so desired.

69 This having been agreed, it is clear to the Tribunal that the respondent undertook the preparation of all necessary documentation including, inter alia, affidavits, statements of assets and liabilities, and letters to various people and entities to complete the administration of the document. Even though Mrs Patrick signed these documents, it is clear that when she did so, apart from the provision of information necessary for such preparation, she relied upon the professional expertise of the respondent. Further, she relied upon the advice of the respondent, from time to time, as to matters of law which arose, including as it did, the making of a claim to the Supreme Court by the deceased's de facto wife.

70 The Tribunal accepts the evidence of Mrs Patrick that the administration of the estate was in the hands of the respondent, notwithstanding that she was a joint administrator with him. Mrs Patrick received a letter from Messrs Durack & Zilko, dated 27 May 1999, advising her that they acted for Mrs Pereira, and noting that it was her intention to make an application pursuant to the Act. The respondent replied to that letter in a letter dated 1 June 1999. The letter commences:

"We confirm that we act for Mrs Andrea Patrick, widow of the late Gordon Patrick. Our client has provided us with a copy of your letter addressed to her, dated 27 May."

71 The letter then follows with a number of matters, including the fact that it was Mrs Patrick's intention to apply for letters of administration jointly with the respondent.

72 It is clear that the respondent considered that he was acting for Mrs Patrick in her personal capacity and also in a joint capacity as co-administrator of the estate.

73 The Tribunal is satisfied that, thereafter, the respondent gave advice to Mrs Patrick personally, and also as to her obligations as joint administrator, and that she sought and relied upon such advice.

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John Henry Reyburn

74 The respondent submitted a statement dated 20 October 2006 (Exhibit 5). He said that he first met Mrs Patrick in mid-May 1999, and summarised the matters discussed between them and his preliminary advice in a letter to her dated 19 May 1999. At that time, he said that his firm had insufficient materials on hand to advise whether any claim by Mrs Pereira might be successful under the Act. He acknowledged Mrs Patrick's instructions to assist her in obtaining administration of the estate, and the advice concerning he and she being joint administrators, and offered to act as a co-administrator if so instructed. He said that he was instructed to proceed with a joint application for administration on or about 16 June 1999. However, in the interim, Mrs Patrick received a letter from Durack & Zilko dated 27 May 1999. He gave oral advice to Mrs Patrick confirming that if Mrs Pereira was a de facto wife, she would have a right to make an application under the Act, and indicated that Mrs Pereira would have to establish several matters if she were to be successful. He did not, however, suggest that Mrs Pereira would either be successful or unsuccessful in her application. He prepared the application for administration, taking instructions from Mrs Patrick as to the assets, superannuation, benefits and liabilities.

75 It should be noted that, in fact, originally the respondent made an application for Mrs Patrick to be appointed personally as administrator of the estate of her husband. However, that resulted in requisitions being received, and therefore, the further application was made on the basis that there were joint administrators. He was advised by Mrs Patrick that Mr Patrick had an AMP life benefit, that she had contacted AMP on the death of her husband, and that she had been given a form of declaration to complete. On 16 June 1999, he witnessed Mrs Patrick's signature to that declaration. At the time he witnessed it, he was not provided with any correspondence which AMP had sent to her together with the proposed declaration; he knew little of her or her circumstances. He said that he was aware that she was the Andrea Patrick referred to in the form - she had told him that she was nominated by her late husband as beneficiary - and at the time of death, she was still his lawfully wedded wife. On that basis, he took the signature. He said he then proceeded to liaise with AMP Life to redeem the benefit "although (he said) in retrospect I can see that my thought processes were very muddled and I was not clear in my own mind whether in my correspondence with the AMP, redemption was being sought on behalf of Mrs Patrick as nominated beneficiary or for the estate". This admission is rather surprising, in light of the fact that the respondent was an experienced solicitor and was a joint administrator

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requiring accurate instructions, and even more importantly, the accurate carrying out of those instructions in accordance with the law.

76 On 5 July 1999, the respondent wrote to Mrs Patrick concerning the "inheritance action". In that letter, he set out Mrs Pereira's legal position. He offered the opinion "that Mrs Pereira will have great difficulty in establishing any one of the three tests all of which she has to prove to establish she was Gordon's de facto wife". He required further information from Mrs Patrick as to her husband's relationship with Mrs Pereira. This letter obviously confirms Mrs Patrick's evidence that she was advised by the respondent that Mrs Pereira's application was unlikely to succeed, and also confirms the respondent's position that the application was not potentially a strong one.

77 In August 1999, the application for administration was filed at the Supreme Court, and included a reference to an AMP superannuation policy with a value of $79 645, but did not refer to a Government Employee Superannuation benefit, which the respondent said at the time he did not consider to be an asset of the estate. It was later accepted by the respondent that that inclusion in those terms was a mistake. He said that he continued to make representations to AMP to redeem the life benefit, and subsequently learnt that AMP had paid the benefit to Mrs Patrick in early January 2000 "without consulting me". He said that when Mrs Patrick received those funds, she did not advise him that she had done so until after he had made the distributions in question. He said that, from the time he first met her, Mrs Patrick consistently advised him that she was suffering very real financial hardship, that she was struggling financially, and that when she no longer received maintenance after the death of her husband, she was in "dire straits". It should be remembered that Mrs Patrick denied each of these suggestions. He said that Mrs Patrick asked him if money could be made available to her personally, the children and to Lauren - this being prior to the receipt of any superannuation benefits, which benefits, the respondent said, made up the vast majority of the rights arising out of the husband's death. He said that he made the payments from the firm's trust account out of the estate monies on 20 December 1999, 10 January 2000 and 18 January 2000 as a direct consequence of a request by Mrs Patrick for funds. At that time, the respondent said that he was mindful of correspondence he had received from the solicitors acting for Mrs Pereira, dated 25 June 1999, in which Mrs Pereira indicated that she did not intend to seek orders affecting the children's share of the estate.

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78 Mrs Patrick indicated to the respondent that she would retain the monies paid for the benefit of Lauren in a separate account for Lauren's care. The respondent said that some time after she had collected the distribution cheques, he learnt that the AMP had paid the AMP benefits direct to Mrs Patrick. He said until that time, he believed it would be paid into his trust account. He said he reminded Mrs Patrick that he expected her to give him the benefit to hold in the firm's trust account until the action by Mrs Pereira was resolved.

79 The respondent said he was advised by Mrs Patrick that she had placed part of the benefit on term deposit to earn interest, and the majority of the AMP benefit to the credit of a mortgage saver account, which was a form of home loan. He understood that account to be a form of line of credit where she could draw and make credits. He said that Mrs Patrick explained that she had placed the money into that account because it meant that that amount she owed the bank was then significantly reduced and she was relieved of the obligation to pay interest on that sum. He said that she preferred to do that rather than place funds in the firm's trust account, which he apparently told her, would not earn interest.

80 The respondent said that Mrs Patrick told him that if any of the funds from AMP were needed at a later stage in relation to Mrs Pereira's case, they would be made available to him. He said that it was fair to say that at that stage, "neither of us expected that they would be needed".

81 In December 1999, the GESB benefit in an amount of $80 700 was paid to his firm. In par 34 of his statement, he said that prior to the matter being set down for trial, he obtained the advice of Mr Nicholls as to the prospects of Mrs Pereira establishing her claim and the quantum. It was later ascertained that this advice sought was sought after the distributions had been made. Mr Nicholls' opinion, he said, indicated that Mrs Pereira was unlikely to be able to prove that she was a de facto wife and that she would lose the action, and in any event, an award would be able to be met with the monies which had been retained in the trust account.

82 Mr Nicholls' opinion of 8 November said that although he could not state that the plaintiff would not win, her case was marginal, and that the deceased's Will would not be disturbed "very much". A second opinion in far more emphatic terms was provided on 15 May 2001 in which it was said that Mrs Pereira's case, on the evidence she produced, "should lose utterly".

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83 In evidence, the respondent said that he did not advise Mrs Patrick to make the payments of $17 000 to each of the three sons, and that he was only advised of those payments after the complaint to the applicant.

84 As to the letter to Mrs Patrick, dated 13 June 2002, from Mr Sean Stocks, the respondent said that he was supervising Mr Stocks' legal work, and asked him to write the letter. He said that he would have been involved in the drafting of it and checking before it went out of the office. The Tribunal found it difficult to understand why the respondent did not write and sign the letter, and why he left this matter to Mr Stocks at that stage, particularly as the letter required Mrs Patrick to repay a sum in excess of $60 000 as a result of the successful Supreme Court action by Mrs Pereira, and in circumstances where she would obviously be financially affected by the decision.

85 The respondent was then referred to two documents. One document headed "Entitlement", (Exhibit 7A), and a second document which was headed "Table of Distributions", (Exhibit 7B). The first document, on its face, is undated and sets out the basis upon which it is said that Mrs Patrick owed the sum of $60 094.69 and outstanding monies to other beneficiaries. On the document, that figure is in brackets in blue biro. The second document, on its face, is a typed document which has upon it various handwritten figures. The respondent said that the first document (Exhibit 7A) was a summary which he and Mr Stocks arrived at on the following basis:

"setting out in 4 columns the entitlement of each of the beneficiaries to the estate following the orders made in the Supreme Court by Justice Hasluck; then the amount which had already been paid by my office to each of these persons, and the final right hand column, the amount which, as at June 2002, I calculated had either been overpaid in the case of Mrs Andrea Patrick by the sum of $60 000, or underpaid to the five other persons entitled".

86 He said the first document came into existence at the time the letter dated 13 June 2002 was sent to Mrs Patrick. He said the handwritten brackets were put in on 13 November 2006. The second document was prepared by he and Mr Stocks in June 2002. The respondent explained the handwritten alterations and additions to that document.

87 In relation to Lauren, the figure is noted as $10 000. However, the respondent said that this was a mistake, and the figure should have been

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$13 000. That figure did not take into account the fact that she had been paid, in fact, a further $11 000. The result of this was that when he calculated the figure of $60 094.69, which he believed Mrs Patrick was then liable to repay, that did not make allowance of the fact that she had paid Lauren the sum of $11 000. The respondent suggested to the Tribunal that Exhibit 7B was a copy of a document which was on his file, the original of which would have been sent to Mrs Patrick without his handwriting, and the first page was a copy of the document which was sent out to Mrs Patrick with the letter dated 13 June 2002. After some discussion, the documents were admitted into evidence on the basis that it was said by the respondent that the documents were prepared at the time of the writing of the letter dated 13 June 2002.

88 When cross-examined by counsel for the applicant, the respondent was referred to the statement of assets and liabilities prepared by his office (page 20 and page 21 of the bundle).

89 The respondent accepted that the entry in the firm's trust account for the receipt of the sum of $80 741 was by way of superannuation on 22 December 1999.

90 On 20 December, the earlier payments were made to Mrs Patrick and the children. He thought the cheques may have been drawn on that date, or may have been drawn the day before. He was asked why he made the distributions, and answered that Mrs Patrick asked him for the money because she was in need of funds, and he thought that the time was appropriate to pay her. He was unable to recollect when she asked him for the money, and was unable also to recollect whether it was a telephone call or personally. He was unable to recall how soon it was to the time that he drew the cheques that Mrs Patrick made the request to him.

91 It appears that there are no diary entries available as to these matters. He did not believe he handed the cheques personally to Mrs Patrick. He was referred to fee notes, and there was a conference with Mrs Patrick charged for on 20 or 21 December. Notwithstanding that, he persisted with his belief that one of his staff members handed them to her. He said that at the time he made the payment of $8000 to Mrs Patrick on 20 December, the fact that she asked for a payment was a sufficient warrant to pay monies out of the estate as a co-administrator. He said that he paid the monies to the children because Mrs Patrick wanted them to have a benefit from the estate before Christmas because "they were all doing it tough". He said it was inaccurate for Mrs Patrick to say that she told him that she did not want the monies paid to the sons. He was then referred to

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a letter written by him to Durack & Zilko dated 28 June 1999 (bundle page 12). He said at the time he wrote the letter, the solicitors for the plaintiff had required that the assets of the estate not be disbursed, but he did not "realise at that time that there was any other legal requirement that I not make a distribution". Notwithstanding the respondent suggesting in the letter that it was the solicitors for Mrs Pereira who required that there be no disbursement of assets from the estate, the respondent agreed, in cross-examination, that there was no letter from Durack & Zilko requiring him not to dispose of the assets of the estate. He did not accept that the position as a result of this was that he was at the time recognising that the rule was that as soon as a solicitor was notified that a family provision application will be made, then one should not distribute assets from the estate.

92 In this regard, the respondent was then referred to a letter he wrote to the applicant dated 10 October 2002. The letter is concerned with the question whether or not there was a conflict of duty arising in relation to his acting as solicitor for Mrs Patrick and as a co-administrator. In the course of the letter, in par 3, the respondent wrote:

"Once notice of the claim by Mrs Pereira was made, my obligations as administrator were only to hold the assets of the estate, which were within my control, pending the outcome of the action".

93 The respondent agreed that as at that date, it was recognition by him of the obligation of an administrator to hold the assets in those circumstances, and that he did not do that.

94 He agreed that when he paid the money out, he did not give any advice to Mrs Patrick or the children that they might have to return the distributions or any part of them. He agreed that on the information he had as at June 1999, Mrs Pereira could conceivably change her mind and seek provision from the entire estate, including the children's share. At no time did he seek confirmation from Mrs Pereira's solicitors that she would not seek provision from the children's estate - that is, at the time he made the payments to them. The position was that, in fact, Mrs Pereira did make a claim against the whole of the estate.

95 As to his statement concerning Mrs Patrick's use of the AMP money, he said that he did not make a file note of the discussion, nor did he confirm what she had told him in correspondence so that he could emphasise the importance of it. He said that having been advised that

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Mrs Patrick had been credited with the AMP money, he did not send the letter to her giving her instructions about how she should hold the money or what she should do with it. He said that Mrs Patrick assured him that she would keep the money safe, but he did not keep a file note to that effect. He was asked whether he made a diary entry noting such information, and he said "not at the time" – meaning, presumably, that this was never done.

96 He was shown par 11 of his Statement of Issues, Facts and Contentions filed on 16 October 2006. This has already been referred to. In the paragraph, he speaks of Sean Stocks as being a solicitor employed by him "to his knowledge" having discussions with Mrs Patrick concerning the AMP money. He said he could not recollect whether Mr Stocks worked for him in January 2000, but having seen a document, agreed that Mr Stocks did not begin working for him until February 2001. Again, he did not keep a file note of the discussion said to have taken place with Mrs Patrick, nor did he write a letter confirming what she had said to him.

97 The respondent was cross-examined about payments he had made to Mrs Patrick early in 2000. He did not recollect paying $10 000 to Mrs Patrick on 10 January 2000, and "other than believing" that she asked for a further payment, he was unable to recollect whether she gave a reason for wanting more money. It is significant that in the letter to Mrs Patrick dated 10 January 2000 in which certain payments were enclosed to Mrs Patrick and the children, there was no suggestion that the respondent was paying the money as a result of a request by Mrs Patrick, nor was there any suggestion that she might have to repay any of the funds.

98 In that letter, in par 3, mention is made of a cheque for $20 700 payable to Mrs Patrick for monies on behalf of Lauren and her right to maintenance. The letter proceeds:

"We want to make that payment to you to get the monies out of our trust account so as to thwart Mrs Pereira should she make a claim".

99 When it was put to the respondent that that was the real reason why he was making all the payments, he denied that, but could not recollect why he wrote it.

100 In a letter to Mr M Patrick, one of the sons, dated 10 January 2000, the respondent wrote:

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"We are gradually converting the assets of the estate into cash and making payments from time to time as we receive funds. We have already paid to you $3000. A further cheque for $10 000 is attached. Further monies will be paid to you as we receive money into Trust."

101 When it was put to the respondent that all he was doing was simply paying out money to the beneficiaries as he received it, he agreed that he did that in relation to the GESB funds. He could not recall whether he wrote a letter to the sons informing them of Mrs Pereira's intention to commence her action. When asked whether he sent the sons a letter informing them of the possibility of repayment of monies, his reply was that, at that time, he did not act for the sons – he acted only for the administrators of the estate. The Tribunal is of the view that this should not have prevented that advice being passed on to the sons. As to the further payment of $20 000 to Mrs Patrick, the respondent said that she asked him for more money and agreed to give it to her, but he could not recall when she asked for the money, or whether she gave a reason. Once again, there was no letter warning her that she may have to repay the monies, and there is no file note available confirming the request for advice or any advice given to her.

102 The respondent was cross-examined once again as to the reasons for making the payments to Mrs Patrick and the children. They were in three in number: firstly, because he was advised that they needed money; secondly, because he was so requested by a co-administrator; and thirdly, because he did not believe they would impact on Mrs Pereira's intended claim. As to the latter, he did not know what the claim would be at that point of time against Mrs Patrick's entitlement.

103 The respondent confirmed a letter, dated 23 August 2001, written by Sean Stocks advising Mrs Patrick that it was no longer appropriate for his firm to continue to represent the estate of her late husband together with the beneficiaries and the administrators; the respondent agreed that it was written at his direction by his employee. The Tribunal finds it difficult to understand why the respondent himself did not continue to deal with the file and write letters such as these personally.

104 At the conclusion of the evidence for the respondent, the Tribunal had some concerns about that evidence. Bearing in mind that the respondent was an experienced legal practitioner, with experience in dealing with the administration of estates, and the fact that he was a joint administrator with a lay person, the Tribunal was concerned with the

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absence of diary notes as to important conferences and advice given, and the absence of letters confirming matters of advice and important instructions from Mrs Patrick – particularly as to the suggested requests for payments and the reasons for those suggestions.

The Tribunal's view of the evidence and some findings thereon

105 The Tribunal was faced with a difficult issue as to whether the respondent, when undertaking the distributions, did so at the request of Mrs Patrick. The same applies to the "AMP" issue. Mrs Patrick was adamant that no request or direction for payment to her was ever given. Also, she denied telling the respondent that she was in financial need, or in "dire straits". She did, however, agree that she discussed her financial position with the respondent and told him her financial circumstances were "hard". Although Mrs Patrick appeared to the Tribunal to be honest and forthright in her evidence, some aspects thereof affected the Tribunal's view of her reliability. For example:

• She found it difficult to explain what happened to the funds she received from the estate.

• Her evidence as to her financial position in 1999 and 2000 suggests a greater need for financial assistance than she was prepared to concede.

• The finding of the "list" (Exhibit C) the night before the hearing on 14 November 2006 and her inability to explain its contents fully was of concern to the Tribunal.

• Her inability to remember some events and details which to the Tribunal were important.

106 Similarly, the Tribunal could not make any adverse conclusions as to the respondent's credibility. There were, however, aspects of his evidence which affected the Tribunal's view of his reliability and motives leading to his actions in this matter. In particular:

• There were no file and/or diary notes or confirmatory letters as to the suggested requests for funds by Mrs Patrick.

• There were few letters confirming advice said to have been given to Mrs Patrick from time to time.

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• The respondent's evidence as to his knowledge of the AMP monies and the receipt thereof by Mrs Patrick was uncertain and unsatisfactory, as was his evidence as to the circumstances in which the monies were actually paid to Mrs Patrick.

• The handing over of the file to an employee (Sean Stocks) at a time when difficulties concerning this matter were arising.

• The use of the word "thwart" in the letter to Mrs Patrick dated 10 January 2000.

• His inability to answer some questions on important matters, including the reason why he had used the term "thwart" in the above letter.

• The terms of letters written to Mrs Patrick (and indeed to the applicant), were in terms which to a lay person could be interpreted as threatening.

• The suggestions (certainly unfounded) that Mrs Patrick had used monies to cease work and/or to go overseas with her boyfriend.

107 The Tribunal is thus faced with the difficulty that both the "central" witnesses in this matter have some reliability issues.

108 It is well accepted that the burden of establishing the allegations and their factual basis is upon the applicant.

109 As to the standard of proof, the Briginshaw v Briginshaw approach was recently followed and applied by Barker J in Medical Board of Western Australia and Bham [2006] WASAT 190 at pages 13-14.

110 In Briginshaw v Briginshaw (1938) 60 CLR 336 at pages 361-362 Dixon J said:

"The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the

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certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfactions if not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters 'reasonable satisfaction' should not be produced by inexact proofs, indefinite testimony, or indirect inferences. Everyone must feel that, when, for instance, the issue is on which of two dates an admitted occurrence took place, a satisfactory conclusion may be reached on materials of a kind that would not satisfy any sound and prudent judgment if the question was whether some act had been done involving grave moral delinquency."

111 He further stated at page 368:

"…the importance and gravity of the question make it impossible to be reasonably satisfied of the truth of the allegation without the exercise of caution and unless the proofs survive a careful scrutiny and appear precise and not loose inexact."

112 Also, at page 350 Rich J said:

"The nature of the allegation requires as a matter of common sense and worldly wisdom the careful weighing of testimony, the close examination of facts proved as a basis of inference and a comfortable satisfaction that the tribunal has reached both a correct and just conclusion."

113 In a case such as this, involving allegations of such a serious nature with possible serious consequences resulting from a finding that the allegations have been proved, these tests should and will be applied.

114 Having reviewed the evidence, and bearing in mind the dicta in Briginshaw, the Tribunal makes the following factual findings:

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(1) The Tribunal is unable to resolve the issue as to whether the payments were made to Mrs Patrick at her request; and as to whether Mrs Patrick advised the respondent of her financial difficulties.

(2) The same applies to the issue concerning the AMP monies.

(3) The Tribunal is thus unable to rely on Mrs Patrick's evidence as proof of the above two issues.

(4) Notwithstanding these difficulties, the Tribunal is satisfied that the respondent was concerned to ensure that statutory entitlements of Mrs Patrick and the family were protected against any successful claims by Mrs Pereira, that is, to "thwart" such claims with the result that the respondent's motives for making the distributions can be viewed several ways.

(5) The respondent had a reasonable basis, particularly having obtained Mr Nicholl's opinions, for believing that Mrs Pereira's claim would not succeed, at least in full.

(6) Mrs Pereira's claim having succeeded and Mrs Patrick being required to reimburse the estate, the respondent was intent on ensuring that Mrs Patrick rather than himself or his firm be responsible for such situation.

The relevant law and determination of the issues

115 At the outset of his submissions, Counsel for the applicant noted that although as a matter of principle the respondent should not have made any distributions (save for trivial ones) once notice of the possible claim by Mrs Pereira had been given, the crux of the case against the respondent is that the size of the distributions made by the respondent made his conduct "unsatisfactory " by being "unprofessional" in the circumstances.

116 As to the relevant Western Australian laws, the starting point is the Act.

117 Section 11 is in the following terms:

"Power of Administrator to distribute where immediately necessary:

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Where for the purpose of providing those things immediately necessary for the maintenance, support or education (including past maintenance, support or education provided after the death of the deceased) of any person who was totally or partially dependent on the deceased at the time of his death, an Administrator distributes the whole or any part of the estate to any such person, being a person entitled thereto, an action shall not lie against him in respect of such distribution and no order made under this Act or under section 65 of the

Trustees Act 1962

, shall disturb such distribution, whether or not the Administrator had notice at the time of the distribution of any application, or intention to make an application, that would affect the estate."

118 This section empowers an administrator to distribute estate monies "where immediately necessary". The section contemplates "immediate" necessity and for limited purposes, distributions being valid "whether or not" the administrator had notice of an intention to make an application affecting the estate.

119 The section also recognises the existence of a prohibition on the making of distributions with notice of a possible application affecting the estate, although it should be noted, however, that the Act does not, in express terms, prohibit the making of distributions where there is notice of a (possible) claim. Counsel agreed that the section was indicative of the basic rule but that it did not strictly apply in this case.

120 The Tribunal finds that the respondent did not make the distributions on an "interim" basis in the sense contemplated by the section; on the respondent's own evidence the distributions were made because Mrs Pereira requested them, not because of any exercise of a discretion on the part of the respondent under s 11.

121 Section 20(1) proceeds:

"(1) No action shall lie against the Administrator by reason of his having distributed any part of the estate, if the distribution was properly made without notice of any application or intended application under this Act in respect of the estate."

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122 This section also clearly contemplates a rule generally prohibiting the making of distributions with "notice of an application or intended application under this Act in respect of the estate".

123 There are some relevant authorities.

124 In In Re Simson (Dec), Simson v National Provincial Bank Ltd [1950] Ch 38 at pages 42 – 43, Vaisey J said:

"I wish it to be made clear that in these cases it is the paramount duty of the executor to avoid embarrassing the court and to think once, twice, and several times, before allowing any part of all of the estate to be paid out to any beneficiary – whether a specific legatee or a residuary legatee, or whoever it be matters not. While any application under this Act is either pending or impending … where an application under the

Inheritance (Family Provision) Act 1938

is either pending or impending, that is to say, during the first six months after grant of representation, if it is a case in which there is any risk of such a thing happening, the executor distributes the estate at his risk. If beneficiaries come and pester him and say they want their legacy and pressure is put on other beneficiaries to allow these anticipatory payments to be made, in my judgment it is the duty of the executor to resist any such pressure. I think it must be said that where the court has to deal with a matter under this Act, the estate should be there intact. Of course, duties and debts and that sort of thing, can be paid – there is no question about that – but no distribution to beneficiaries can be made while there is any possibility or expectation that an application under this Act will be made."

125 This dicta was relied upon by Zelling J in Chambers in the Supreme Court of South Australia in In TheEstate of Gough, Deceased; Gough v Fletcher (1973) 5 SASR 559. In that case a widow applied for an injunction restraining an executor from selling some part of the estate pending the hearing of her application for further provision under the Inheritance (Family Provision) Act 1972 (SA). Zelling J granted an injunction after relying upon the dicta in InRe Simson (Dec). As to the comments by Vaisey J. His Honour said at page 566:

"These words, of course, apply a fortiori where an application for testatus family maintenance has already been made."

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126 It would appear, therefore, that after 1973 there was some statutory and judicial authority for the proposition that distributions should not be made where there was a possibility or expectation that an application for provision under the relevant Act would be made.

127 On the other hand, counsel for the respondent referred to a decision of Cross J in In ReRalphs (Dec); Ralphs v District Bank Ltd [1968] 1 WLR 1522. In that case His Honour criticised the decision of Vaisey J in InRe Simson saying that when a legal personal representative contemplated making an interim distribution in the period between the death and the hearing of a summons for provision, they should form their own view, with the assistance, of course, of their legal advisers as to the payments which can properly be made, and if they are not prepared to make such payments on their own responsibility, they should ask the parties who might conceivably be affected – for their consent.

128 Further, in Blackman v Permanent Trustee Co Ltd [2003] NSWSC 305, Young, CJ (in Equity) was of the view that where a next of kin inquiry was ordered, the court could order partial distribution to any lines of kin which were not disputed.

129 There are thus authorities to support the proposition that in certain circumstances a legal personal representative may be able to make interim payments notwithstanding notice of a possible claim against the estate.

130 It is clear that as at the date of the distributions made by the respondent there was a difference of judicial opinion as to whether distributions could be made with notice of a (possible) claim against the estate. This was confirmed when in Lo Surdo v Public Trustee & Anor [2003] NSWSC 837 at par 35, Gzell J said:

"There is some conflict in the authorities dealing with the question whether an executor should be restrained from dealing with the estate pending the determination of an application under the

Family Provision Act 1892.

131 On the other hand, in Grove v Fisher & Anor [2002]WASC 247 (Judgment delivered 31 October 2002), Hasluck J applied the decision in Gough's case. At par 55 and par 56 His Honour said:

"it is clear from various provisions of the

Inheritance Act

that the estate should not be distributed in circumstances where claims are pending. These provisions are consistent with the reasoning unfolded by Zelling J in

Gough's

case (

supra).

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s 20 of the

Inheritance Act

, no action will lie against an executor by reason of his having distributed any part of the estate, if the distribution was properly made without notice of any application or intended application under the Act in respect of the estate. This suggests that in certain circumstances an executor can be held accountable for loss if an estate is distributed while claims are pending.

Further, one has to take account of s 10 whereby provision made by a court order under the Inheritance Act shall take effect as if the same had been made by a codicil to the Will of the deceased. By s 14 an order shall specify the part or parts of the estate out of which the provision is to be raised or paid. These provisions underpin the conclusion that executors should not make a distribution where claims against the estate have not yet been resolved."

132 It should be noted, however, that, in Gonzales v Claridades [2003] NSWSC 508, at para 47 and 48 Campbell J said:

"Sometimes it can be the duty of a legal personal representative to make an appropriation of estate assets so that he or she can pay a pecuniary legacy or distribute a specific legacy or devise, or make an interim distribution of pecuniary legacies or interests in residue, even though the duties of administration are not complete. If the legal personal representative is in a situation of knowing that there are some distributions of the estate which could be made in accordance with the will or the rules of intestacy which govern the distributions of that estate, that there was no realistic prospect that that distribution could be cut down or affected by those aspects of administration of the estate which remained unperformed, and that the remaining tasks of administration were not likely to be completed soon, then it may be the duty of the legal personal representatives to make an interim distribution to that extent.

One of the duties of administration is dealing with any claim made under the Family Provision Act 1982 or similar legislation – dealing with such claims is one example of the task of administration of ascertaining the identity of the persons to whom the legal personal representative must transfer the net estate assets. Even so, in In Re Ralphs; Ralphs v District Bank Ltd[1968] 1 WLR 1522 Cross J said that, when a claim under

(Page 38)

the

Inheritance (Family Provision) Act 1938

was brought against a deceased estate it was wrong to say that it was the duty of the legal personal representative to make no distribution of any sort to beneficiaries in the period between death and the hearing of the summons. The course legal personal representatives should take in such a situation is (at 1525):

'They should form their own view, with the assistance, of course, of their legal advisors, as to the payments which can properly be made, and if they are not prepared to make such payments on their own responsibility, they should ask the parties who might conceivably be affected – whether applicant or residuary legatee – for their consent. If such consent is not forthcoming the executors can apply to the court for leave to make the payment in question, and the court, if it thinks that any withholding of consent was unreasonable could throw the costs of the application on the party to blame.' "

133 It is important to note that in the In Ralphs' case and the passage referred to above, the legal personal representative was required by Cross J to form his own view "with the assistance of … legal advisors, as to the payments which can properly be made". This suggests that the legal personal representative should, before making distributions, have some knowledge of the strength and the extent of the claim and the effect upon the known assets of the estate.

134 Also, the authorities suggest that the taking of independent advice, such as counsel's opinion, is important.

135 The Tribunal is of the view that at the time the distributions were made by the respondent, it was not possible for him to make a proper decision as to the extent and strength in monetary terms of the claim by Mrs Periera.

136 On the other hand, the respondent had formed his own view of the strength of the possible claim and in due course obtained counsel's opinion which confirmed his (the respondent's) view.

137 It appears to be the position that as at the time the distributions were made by the respondent, there was statutory and some judicial authority for the proposition that save for some exceptional circumstances, if the legal personal representative was aware that an application for provision under the Act might be made, a distribution should not ordinarily be made from the deceased estate until the proceedings have been made and

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determined. Further, such limitation would apply to distributions made from the deceased estate for six months after the grant of probate or letters of administration.

138 The exceptional circumstances would involve a legacy for a very small amount or the immediate need for a distribution in the circumstances contemplated by s 11 of the Act.

139 Further, it is clear that the legal personal representative, as a matter of prudence, should consider the value of the estate, the amount of distribution intended to be made, and the effect of any application on the monies in the estate and therefore the effect upon distributions already made.

140 On the other hand, however, there was, at the relevant time, some conflict on the authorities as to the duties and actions available to a legal personal representative in the present circumstances, with the result that on one view of the authorities the respondent could, at law, justify his action.

141 Bearing these matters in mind, in the opinion of the Tribunal, Issue No 1 should be answered on the following basis:

142 At the time the distributions were made:

(a) The Western Australian law suggested that once he had notice of a probable application, the respondent should not have made the distributions although such law was not absolutely clear.

143 As to Issue Numbers 2 and 3, it is necessary to consider the circumstances in which the distributions were made in this particular matter. In this respect, the Tribunal points to the following more relevant matters:

1 The respondent had a reasonable idea of the total value of the estate (in the region of $220 000 dollars) and made distributions in the sum of $110 700.

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2 The correspondence previously referred to suggests that the respondent was concerned to make distributions to ensure that Mrs Patrick and the children received their entitlements, but to the prejudice of the possibility of Mrs Periera receiving those moneys in the event of a successful application.

3 There was no file note, diary entry, or confirmatory letter which supported the suggested basis upon which the respondent made the distributions.

4 The distributions were made without any warning to Mrs Patrick or the children that they might have to return funds to the estate.

5 The respondent had discussed Mrs Patrick's circumstances with her and been told that they were "hard".

6 The law was not absolutely clear as to the circumstances in which distributions could be made after notice of a probable application was given.

7 The respondent had a view (later confirmed by counsel) that Mrs Pereira's claim was unlikely to succeed.

8 The respondent was experienced in the administration of estates and the making of decisions as an administrator.

9 The distributions were made without a clear indication of the extent of the claim and its likely effect on Mrs Patrick and the children.

10 There was no evidence led by the applicants as to what course of action a practitioner in the position of the respondent should have taken concerning the distributions. In the Tribunal's opinion, in a case such as this, some expert evidence is necessary as to the proper and accepted course of action; the Tribunal considers that it would be inappropriate to rely upon their own knowledge of the practice at the relevant time.

144 An additional factor is that as a result of the distribution, the estate had insufficient funds to pay Mrs Pereira and the four children the
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entitlements pursuant to the orders of Justice Hasluck, with the result that Mrs Patrick became liable to repay the sum of approximately $60 000 from distributions that she had previously received.

145 The question is, whether in these circumstances, and those already referred to and considered as above, the respondent's conduct amounted to unsatisfactory conduct by unprofessional conduct.

146 In this respect, the decision in Kyle v Legal Practitioners' Complaints Committee [1999] 21 WAR 56 at 71 - 72 is relevant. In those paragraphs, Parker J said:

Unprofessional conduct

The allegation of the reference in this case was that the respondent was guilty of unprofessional conduct in that he attempted to mislead the court.

Pursuant to s 29A(1)(b) of the Legal Practitioners' Act 1893 (WA) (the Act) the exercise of its professional disciplinary jurisdiction the Tribunal may make a finding that a respondent has been guilty of unprofessional conduct. The notion of unprofessional conduct first found its place in s 20 of the Act when it was enacted in 1893. This Court has long accepted and applied, in this context, the understanding of the notion of unprofessional conduct which was expressed by the Full Court of the South Australian Supreme Court in Re a Respondent of the Supreme Court [1927] SASR 58: see, eg, Re a Respondent (unreported, Supreme Court, WA, Full Court, Library No 4989, 18 July 1983). It was usefully summarised (at 3) by the Full Court as conduct that would be reasonably regarded as disgraceful or dishonourable by practitioners of good repute and competence, or that to a substantial degree, fell short of the standard of professional conduct observed or approved by members of the profession of good repute and competence. The first limb of this summary includes, but is not confined to, conduct which occurs in the course of legal practice. The other limb necessarily relates to conduct in the course of legal practice because of the reference to 'professional conduct'. While the words should not be taken as necessarily an exhaustive or codified statement, the essence of the notion of unprofessional conduct is usefully revealed in these decisions."

(Page 42)

147 One of the significant matters, in the Tribunal's view, is the respondent's intention to "thwart" the claims of Mrs Pereira and the children. This instruction can be viewed two ways; to shut out the claims per se, or to do so with the intention to protect the interests of Mrs Patrick and her children, that is, the respondent's co-administrator and clients. The Tribunal accepts that the respondent had the latter intention and in this respect demonstrated a lesser degree of "culpability" if that is the correct term.

148 Having considered the matter and the circumstances generally in the light of the Briginshaw test, and bearing in mind that the respondent does not have to disprove the allegations against him (the onus of proving these being upon the applicant), the Tribunal has concluded that although the distributions may in retrospect be viewed as inadvisable and not what many practitioners in the same position would have made, the making of distributions did not amount to "unsatisfactory" conduct by unprofessional conduct. The Tribunal considers that the respondent made decisions to make the distributions on factors while although in retrospect he may have viewed differently, or in a way other practitioners may not agree with, nevertheless in acting as he did, his conduct did not, to a substantial degree, fall short of the test set out in Kyle's Case. In saying this, the Tribunal has not overlooked the criticisms it has made, from time to time in this decision, of some of the conduct and methods of the respondent – these however, the Tribunal finds, do not assist the applicant in making out the complaint.

Orders

149 The Tribunal therefore orders that:

(1) The application be dismissed.

(2) The Tribunal invites the parties to make written submissions as to costs.

I certify that this and the preceding [149] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

HON R VIOL, SUPPLEMENTARY DEPUTY PRESIDENT

Legal Practitioners Complaints Committee and Reyburn

[2007] WASAT 29

7 FEBRUARY 2007

LEGAL PRACTITIONERS COMPLAINTS COMMITTEE and REYBURN [2007] WASAT 29