Luglio v Freestone

[2022] QDC 51

DISTRICT COURT OF QUEENSLAND

CITATION: 

Luglio v Freestone [2022] QDC 51

PARTIES: 

ROSSLYN ELIZABETH LUGLIO

(Applicant)

v

ANTHONY JOHN CRONIN FREESTONE

(Respondent)

FILE NO:

2429/21

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT: 

Brisbane District Court

DELIVERED ON:

24 February 2022

DELIVERED AT:

Brisbane

HEARING DATE: 

24 February 2022

JUDGE:

Porter QC DCJ

ORDERS:

1. Pursuant to section 41(1) of the Succession Act 1981 (Qld), further and better provision be made for the proper maintenance and support of the Applicant out of the estate of Umberto Luglio, deceased by the Will of Umberto Luglio dated 16 August 2010 being read and construed as if in lieu of clauses 3, 4, 5, 6, and 8 it contained the following clauses:

“3A. I give Rebecca Marina Freda Luglio the sum of $75,000; and

3B. I give Lachlan Edward Behan the sum of $75,000.”

2.   The respondent’s costs of these proceedings be fixed at $40,000 be paid from the estate of the said deceased.

CATCHWORDS:

SUCESSION – FAMILY PROVISION – ELIGIBLE APPLICANTS – LEGAL DISABILITY - MINORS – Whether it is necessary for a sanction under the Public Trustee Act 1978 to be granted when one of the beneficiaries affected by settlement is a minor – No sanction is required

LEGISLATION:

Succession Act1981 (Qld)

Public Trustee Act 1978 (Qld)

CASES:

Morrison v Abbott [2012] NSWSC 320

Hore v Perpetual Trustee Co Limited (unreported, NSWSC, 8 June 1995)

COUNSEL:

R. Whiteford for the Applicant

D. Tropp for the Respondent

SOLICITORS:

Shine Lawyers for the Applicant

Priala Legal for the Respondent

1. This is an application to the Court for it to make final orders to give effect to the compromise of a family provision proceeding.  It is unnecessary to go into the factual detail which informs the compromise and informs the basis for me, consistent with the authorities dealing with the approach the Court should take on applications of this kind, to conclude that I ought to give effect to the settlement.  The points supporting making the orders sought are made in both Mr Whiteford and Mr Topp’s outlines.  Mr Topp appeared for the litigation guardian of one of the beneficiaries under the will who is a minor.

2. The issue which arises is whether, in the circumstances of this case, not only must the settlement agreement be given effect by final orders under the s. 41(1) Succession Act1981 but also must be sanctioned by the Court under s. 59 Public Trustee Act 1978 (the Act), either subsection (1), which applies in this case because proceedings have been brought or, in other circumstances, under subsection (2), where claims are settled without proceedings in Court.

3. The specific point is this: one of the beneficiaries affected by the settlement is a minor. A litigation guardian filed a notice of consent to act but never filed a notice of appearance and never became a party to the proceeding. The question which arises is whether, in that specific case, it is necessary for a sanction under section s. 59 is required for the settlement to be effective. In my respectful view, no such sanction is required.

4. Section 59(1) of the Act provides:

   In any cause or matter in any court in which money or damages is or are claimed by or on behalf of a person under a legal disability suing either alone or in conjunction with other parties, no settlement or compromise or acceptance of money paid into court, whether before, at or after the trial, shall, as regards the claim of such person under a legal disability, be valid without the sanction of a court or the public trustee, and no money or damages recovered or awarded in any such cause or matter in respect of the claims of any such person under a legal disability, whether by verdict, settlement, compromise, payment into court or otherwise, before or at or after the trial, shall be paid to the next friend of the plaintiff or to the plaintiff’s solicitor or to any person other than the public trustee unless the court otherwise directs.

5. Section 59(2) of the Act provides:

   Any claim for money or damages by or on behalf of a person under a legal disability claiming either alone or in conjunction with other parties may be settled or compromised out of court before action brought, with the sanction of a court or the public trustee, but no money or damages agreed to be paid in respect of the claim of any such person, whether by settlement or compromise, shall be paid to any person other than the appropriate person for the person under a legal disability unless by direction of a court upon application made in that behalf.

6. In the particular case of family provision applications where there is a minor who is a beneficiary, the general law position is that the beneficiary is not a party to the family provision proceeding.  It is the duty of the executor reasonably to uphold the will and, as a concomitant duty, to reasonably compromise a proper claim.    

7. A prudent personal representative might well seek consent of the beneficiaries affected by a settlement of a family provision application to the terms of the settlement, but that does not change the fact that, unless and until a beneficiary appears in the proceedings and seeks to participate as a party, a beneficiary is not a party to a family provision proceeding.  In fact, in some cases part of the personal representative’s duty is to courageously settle cases properly even in the face of unreasonable resistance from beneficiaries.  Any concern a trustee or a personal representative would have in such a situation can of course be raised with the Court on the final orders application or on an application for directions. 

8. In this case, the young man in question took as a beneficiary through his mother, who had died. He was not a party to the proceeding. Further, where an infant beneficiary affected by a settlement is involved, that settlement does not fall within the words of s. 59(1) or s. 59(2) of the Act because there is no money or damages claimed in the cause. The entitlement that exists arises dehors anything the Court does; rather it arises under the will or on intestacy. I do not think that that position can be reasonably characterised as falling within s. 59(1) or, in the appropriate case, s. 59(2) of the Act.

9. Therefore, in my opinion there is no requirement for a sanction under s. 59 of the Act in the circumstances I have just described. That is not to say that the existence of an infant beneficiary might not be a material consideration for a Court to take into account in deciding whether to make final orders giving effect to a compromise that affects the interests of that infant. I respectfully agree with the approach taken by Justice Hallen in Morrison v Abbott [2012] NSWSC 320 at 76, where his Honour relevantly adopted an observation of Justice Windeyer from Hore v Perpetual Trustee Co Limited (unreported, NSWSC, 8 June 1995). where his Honour observed, relevantly at 12:

   In cases where the interests of infants or unascertained classes of persons may be affected by the orders, then the proposed orders are considered in more detail, not usually on the jurisdictional question, but more often on relevant terms of the orders themselves, and the extent of the benefit provided by them. On occasions the court refuses to make the orders proposed, but this is unusual

10. As stated there, in making final orders, a Court should look with particular care at the appropriateness of the orders when an infant beneficiary is affected by them, but that is just a particular example of the obligation to the Court to consider whether such settlements are within the range of reasonable resolutions of the particular application. 

11. In my opinion, the cost involved in properly preparing a s. 59 application is unnecessary in this circumstance.

12. I will make orders in terms of the draft which I initial, date and place with the papers.