McLean v James Plummer as Executor of the Estate of Robert William McLean
[2018] WASC 26
•31 JANUARY 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MCLEAN -v- JAMES PLUMMER AS EXECUTOR OF THE ESTATE OF ROBERT WILLIAM MCLEAN [2018] WASC 26
CORAM: ALLANSON J
HEARD: 17 JANUARY 2018
DELIVERED : 31 JANUARY 2018
FILE NO/S: CIV 2244 of 2016
Consolidated by Orders dated 4 October 2016
MATTER :The Family Provision Act 1972
The Estate of Robert William McLean
BETWEEN: JULIE KYM MCLEAN
First Plaintiff
ROBERT CLEMENT LEOLI KELEMETE
Second PlaintiffBRADLEY SEAN KELEMETE
Third PlaintiffAND
JAMES PLUMMER AS EXECUTOR OF THE ESTATE OF ROBERT WILLIAM MCLEAN
First DefendantLEANNE EDWARDS
Second DefendantLEVI MALCOLM THOMPSON BY GUARDIAN AD LITEM LEANNE EDWARDS
Third DefendantHAYLEIGH SUE THOMPSON BY GUARDIAN AD LITEM LEANNE EDWARDS
Fourth Defendant
FILE NO/S :CIV 2418 of 2016
BETWEEN :ROBERT CLEMENT LEOLI KELEMETE
First Plaintiff
BRADLEY SEAN KELEMETE
Second PlaintiffAND
JAMES NATHAN PLUMMER (AS EXECUTOR OF THE ESTATE OF ROBERT WILLIAM MCLEAN DECEASED)
First DefendantLEANNE EDWARDS (AS BENEFICIARY OF THE ESTATE OF ROBERT WILLIAM MCLEAN DECEASED)
Third DefendantLEVI MALCOLM THOMPSON (AS BENEFICIARY OF THE ESTATE OF ROBERT WILLIAM MCLEAN DECEASED)
Fourth DefendantHAYLEIGH SUE THOMPSON (AS BENEFICIARY OF THE ESTATE OF ROBERT WILLIAM MCLEAN DECEASED)
Fifth Defendant
Catchwords:
Practice and procedure - Party under disability - Approval of compromise - Turns on own facts
Legislation:
Family Provision Act 1972 (WA)
Rules of the Supreme Court 1971 (WA), O 70 r 10
Result:
Application granted
Compromise approved
Category: B
Representation:
CIV 2244 of 2016
Consolidated by Orders dated 4 October 2016
Counsel:
First Plaintiff : Ms A M Gangemi
Second Plaintiff : Ms E Carlean
Third Plaintiff : Ms E Carlean
First Defendant : Ms R L Conder
Second Defendant : Ms P R Comer & Ms D Bechelet
Third Defendant : Ms P R Comer & Ms D Bechelet
Fourth Defendant : Ms P R Comer & Ms D Bechelet
Solicitors:
First Plaintiff : Durand Gangemi
Second Plaintiff : Contested Wills & Probate Lawyers
Third Plaintiff : Contested Wills & Probate Lawyers
First Defendant : Cullen Macleod
Second Defendant : Avon Legal
Third Defendant : Avon Legal
Fourth Defendant : Avon Legal
CIV 2418 of 2016
Counsel:
First Plaintiff : Ms E Carlean
Second Plaintiff : Ms E Carlean
First Defendant : Ms R L Conder
Third Defendant : Ms P R Comer & Ms D Bechelet
Fourth Defendant : Ms P R Comer & Ms D Bechelet
Fifth Defendant : Ms P R Comer & Ms D Bechelet
Solicitors:
First Plaintiff : Contested Wills & Probate Lawyers
Second Plaintiff : Contested Wills & Probate Lawyers
First Defendant : Cullen Macleod
Third Defendant : Avon Legal
Fourth Defendant : Avon Legal
Fifth Defendant : Avon Legal
Case(s) referred to in judgment(s):
Elliott v Diener (1978) 21 ACTR 21
Maas v O'Neill [2013] WASC 379
Scandolera v State of Victoria [2015] FCA 1451; (2015) 331 ALR 525
Sergi v Sergi [2012] WASC 18
Sosa v Carter [1978] WAR 123
ALLANSON J: Robert William McLean died on 10 September 2015. Mr McLean left a will dated 3 August 2015 by which, after a specific gift to a friend, he left a property in Bullsbrook to Leanne Edwards and her two children, and the residue of his estate to Ms Edwards. Ms Edwards was a friend of Mr McLean and is so described in the will. Her children are both legally infants, and Ms Edwards appears as their next friend.
Mr McLean expressly excluded his own children, now adult, from whom he had been estranged for many years.
Three of Mr McLean's children brought claims under the Family Provision Act 1972 (WA) seeking provision from the will. The claims went to an early mediation at which a compromise was reached under which the first plaintiff, Mr McLean's daughter, would receive 40% of the estate, the second and third plaintiffs, two of Mr McLean's sons, would receive 20% shared between them, and Ms Edwards and her children would receive the remaining 40% share between them.
The parties apply for orders pursuant to O 70 r 10 of the Rules of the Supreme Court 1971 (WA) that the Court approve that compromise.
The factual context
The Bullsbrook property has now been sold.
The value of the estate now held by the executor is approximately $278,538 at the time of this hearing. It is not clear on the evidence before me what part of that total represents the value of the Bullsbrook property.
Each of Mr McLean's children has filed an affidavit in support of their claim. The first plaintiff, Julie Kym McLean, is now 47. At the time of her affidavit, she was studying for a Diploma of Community Services. Ms McLean suffers from macular degeneration. She now has only 30% vision in her right eye and significant ongoing issues with both eyes. Her only assets are a motor vehicle, personal effects and superannuation.
The other plaintiffs, Robert Kelemete and Bradley Kelemete, are employed and each owns property, including a home, although heavily mortgaged.
Counsel's opinion
The court has been provided with the opinion of independent counsel. Counsel has considered all of the evidentiary material disclosed in the affidavits. Counsel concluded that it is more likely than not that some provision would be made for each of the plaintiffs, but expressed concern at whether the proposed settlement was within the likely range of any allowance that would be made in favour of the plaintiffs, and whether the proposed settlement could be affirmatively stated to be in the best interests of the children.
Counsel considered the impact of uncertainty and the diminution of the estate by legal costs. Relevantly, counsel said:
It is not possible to state that continued litigation will result in a better net final outcome for [the children]. In addition to the risks involved in the ultimate decision as to quantum or percentages of the estate that may be awarded to [the plaintiffs] and thus the residual amount to be distributed to [Ms Edwards and the children] there is the question of the potential impact of legal costs.
Ultimately, counsel considered that the question of whether the proposed settlement was in the best interests of the children was problematic because of uncertainty arising from the current state of the evidence, the potential effect of costs on the value of the estate.
The jurisdiction exercised by the court
The principles applying to this application were set out by Pritchard J in Maas v O'Neill [2013] WASC 379:
The Court has an inherent power to approve an agreement to compromise an action brought on behalf of a person under a disability if it is satisfied that it is for the benefit of the person to do so. Order 70 r 10 merely provides a framework for the Court to exercise its power. The Court must consider the proposed compromise from the perspective of the person under the disability, and determine, from that perspective, whether the terms of the compromise are fair and whether the compromise is for that person's benefit. The role of the Court is not to hear the application as if it were the substantive hearing and then to give or withhold its approval by comparing the offer with the judgment which it would have given [13].
In Elliott v Diener (1978) 21 ACTR 21, Blackburn CJ observed that the relevant question is:
whether the prospect of getting a greater sum by rejecting the present offer is good enough to outweigh, significantly, the risk of not getting any more (22).
Ms Edwards made an affidavit, dated 20 November 2017, in which she deposes that she had read the opinion of counsel and discussed it with the solicitors for the children. She has considered and understood the opinion and believes that it is in the best interests of her children, referring in particular to the costs of litigation and the risks associated with it.
The court should give proper weight to the fact that Ms Edwards wishes to accept the settlement and why. Her wishes are not decisive. See Sosa v Carter [1978] WAR 123; Sergi v Sergi [2012] WASC 18 [39].
I also take into account the additional factor referred to in Scandolera v State of Victoria [2015] FCA 1451; (2015) 331 ALR 525 [29], where Mortimer J said:
... Since the approval of a settlement will bind the party under the disability and bring the litigation to an end, the Court should consider the advantages and disadvantages of the litigation continuing not only in terms of whether the applicants might secure a more advantageous award from the Court at trial, but also issues such as the prospects of an appeal and the costs and pressures imposed on [the plaintiffs] if the litigation were to continue [to trial].
Consideration
The present case is unusual. Counsel does not definitely advise that the compromise is in the best interests of the children, but appears to recognise that they may not achieve a better result.
At the time counsel gave his opinion, he was considering a total estate of about $338,000. The Bullsbrook property had not been sold and his opinion took into account the nature of the bequest to the children, being an interest in common with their mother in the property. The estate held cash of approximately $58,000 and the Bullsbrook property, which was valued at approximately $280,000, having already declined in value from approximately $330,000.
I have set out the current position earlier in these reasons. The estate is substantially less and no longer includes the real property. The opinion provided has been overtaken by events.
I have considered whether to adjourn this matter and require the provision of a further opinion, but that is unnecessary and would be an unjustifiable use of the limited resources available out of the estate. The court may dispense with the opinion of counsel, and on the particular facts before me I believe the position is clear, and I will do so.
There is a real prospect of one or all of the plaintiffs succeeding. Costs orders could be made which would further diminish the estate. It is not in anyone's interests for this matter to proceed to trial. Specifically, in my opinion, it is in the best interests of the children for the existing settlement to be given effect. No better outcome is likely.
The settlement reached at mediation will be approved, including the consequential orders for the appointment of the Public Trustee to hold the sums payable to the third and fourth defendants. I will also make orders, as asked, regarding the confidentiality of the opinion of independent counsel.
0
5
2