Nestor v Wolochy - [2011] SASC 190

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
NESTOR & ORS v WOLOCHY
[2011] SASC 190
Reasons of Judge Lunn a Master of the Supreme Court
2 November 2011
PROCEDURE
Action for probate in solemn form by executor under a will of 30 April 2010 - counterclaim by executor under a will of 10 August 2010 to propound that will, but plaintiffs allege lack of capacity and undue influence - application by plaintiffs to join all other 27 beneficiaries in the two wills and the previous 1999 will as additional defendants.
Held where direction given under 6R 205(8) for service on a person whose interest may be adversely affected that person is not automatically a defendant under 6R 205(2).
Held not necessary to join beneficiaries as defendants, but notice to be given to those under the two 2010 wills pursuant to 6R 205(8).

NESTOR & ORS v WOLOCHY
[2011] SASC 190
JUDGE LUNN:
Reasons on plaintiff’s application to join additional defendants

The three plaintiffs are the executors named in a will of Maria Mytko (“the deceased”) dated 30 April 2010. They each received a legacy of $2000 under the terms of that will. The balance of the substantial estate is left to various other beneficiaries. In this action, pursuant to 6R 205, the plaintiffs seek probate in solemn form over this will dated 30 April 2010.
The defendant is the executor named in a will of the deceased dated 10 August 2010[1] and a major beneficiary under it. In this action, by his Defence (FDN11), the defendant pleads that the will of 10 August 2010 revoked the will of 30 April 2010. He has not pleaded any other basis of challenge to the will of 30 April 2010. He has also filed a counterclaim (FDN12) seeking that the will of 10 August 2010 be admitted to probate in solemn form. By their Defence to Counterclaim (FDN15) the plaintiffs plead a lack of testamentary capacity and undue influence in respect of the will of 10 August 2010.
[1] There is some dispute about what is the document constituting this will, but that is not relevant on the present application.
Many of the beneficiaries under the 30 April 2010 will are omitted from the 10 August 2010 will and in some instances the entitlements under the 30 April 2010 will are substantially different from those for the same beneficiaries under the 10 August 2010 will.
The will of the deceased prior to the 30 April 2010 will was a will of 20 January 1999. The provisions of that will differ substantially from those of the two later wills. In this action no-one has sought to propound the 1999 will.
By an interlocutory application dated 25 July 2011 (FDN8) the plaintiffs have sought permission to add 27 additional defendants to the action, who are all the beneficiaries, apart from the first defendant, who are named in the three wills mentioned above. They also seek directions whether certain of those additional defendants can be appointed to represent others of them where they all appear to have an identical interest. Of the 27 additional proposed defendants, 19 reside in the Ukraine and one in Poland. At least two of them are deceased, but they are only beneficiaries in the 1999 will. The plaintiffs’ counsel invited me to consider whether the action could be allowed to proceed without incurring the substantial costs and delay of joining these 27 defendants. The defendant’s solicitor did not object to this course, if it was otherwise permissible.
The point turns on the proper interpretation of a number of Rules in the Supreme Court Civil Rules 2006 and their application to the circumstances of this action. The relevant Rules in their sequential order are:
3—Objects
The objects of these rules are—
(a)to establish orderly procedures for the just resolution of civil disputes; and
…
(c)to avoid all unnecessary delay in the resolution of civil disputes; and
…
(e)to minimise the cost of civil litigation to the litigants and to the State.
…
38(4) Every person whose interests may be directly and adversely affected by the terms of a judgment, and whose presence before the Court is required for a judgment to be entered in those terms, is to be made a defendant to the originating process.
…
116(1) The Court has the power to manage litigation to the extent necessary to ensure that it is conducted—
(a)fairly; and
(b)as expeditiously and economically as is consistent with the proper administration of justice.
…
205—Probate actions
…
(2)A defendant to a probate action is a person (other than the plaintiff) whose interests are or may be adversely affected—
(a)under an instrument that is, or may be, the last will of the deceased person; or
(b)on intestacy.
(3)Subject to any direction by the Court to the contrary, a probate action will proceed in the same way as any other adversarial action.
…
(8)If there is uncertainty as to whether a person’s interests may be adversely affected by a probate action—
(a)the Court may direct that such person be served with notice of the proceedings in such manner as the Court directs; and
(b)the Court may direct that a person served with notice of the proceedings under subparagraph (a) be bound by any judgment in the action.
There is an unfortunate tension between 6R 205(2) and (8). Sub-r (2) makes a person “whose interests … may be adversely affected” a defendant to the probate action, whereas sub-r (8) permits the Court to give special directions where “a person’s interest may be adversely affected”. If the quoted portion of sub-r (2) automatically makes a person whose interests may be adversely affected a defendant to the probate action, there is no point in sub-r (8) as its operation can only extend to persons who are not already parties to the action. Sub-r (8) allows the Court to make orders where there is uncertainty about whether a person’s interests are affected. This is to deal with a category of persons whose interest is not such as to require them necessarily to be a party to the action for its proper and just determination, but to ensure that they have the opportunity to apply to be joined if they so wish and to have them bound by the result of the action, as determined as between the other parties to it. In order to allow sub‑r (8) to operate, sub-r (2) should be read down, so as not to require persons who are subject to a direction under sub-r (8) automatically to be defendants to the action.
This interpretation of sub-rr 205(2) and (8) is consistent with the proper interpretation and application of the related 6R 38(4). This sub-rule only requires a person whose interests may be directly and adversely affected by a judgment to be a defendant where that person’s “presence before the Court is required for a judgment to be entered in those terms”. Where sufficient parties are already joined to the action so judgment can be given on either the claim or the counterclaim, sub-r (4) does not require those additional persons to be made defendants to the action.
Sub-r 205(3) does away with the old special procedures for probate actions. Hence, much of the authorities on earlier rules about the conduct of probate actions is no longer applicable, although what I am saying is consistent with re Kuhl[2]
[2] [1933] SASR 394.
On the pleadings in this action, the real issue is whether the defendant can satisfy the Court that the will dated 10 August 2010 should be admitted to probate by reason of the Court being satisfied that the deceased had capacity to make it and was not subjected to undue influence. If that will is admitted to probate in solemn form, there would appear to be no argument that it would revoke the will dated 30 April 2010. Likewise, if the defendant fails to have the will of 10 August 2010 admitted to probate, there is no basis on the pleadings for the Court to refuse to admit the will of 30 April 2010 to probate.
The plaintiffs by their prosecution of this action have taken upon themselves the defence of the counterclaim. There is no reason to suppose that they will not properly defend it. If any of the other beneficiaries under the will of 30 April 2010 were to be co-defendants to the action, there is no reason to believe that they could do anything more in the defence of the counterclaim than would be done by the plaintiffs. It is highly likely that if these other beneficiaries did become parties to the action, their counsel at the trial would not be given permission to advance any separate case from that of the plaintiffs. Under 6R 269 and Practice Direction 8.1 it is likely that only one set of costs would be allowed out of the estate, or against the defendant if the counterclaim is unsuccessful, for the plaintiffs and these other beneficiaries. The situation here of the executors named in the will of 30 April 2010, but not the beneficiaries under it,[3] being the only plaintiffs is analogous to that of trustees suing on behalf of the trust estate without joining the beneficiaries of the trust as additional plaintiffs, as is allowed by 6R 83.
[3] The plaintiffs do have legacies of $2000 each under this will.
The 1999 will is irrelevant to any issues which arise on the pleadings in this action. If the will dated 10 August 2010 is not admitted to probate, there is nothing pleaded as a basis for the Court then to refuse to admit the will of 30 April 2010 to probate. Hence, there is no possible outcome of this action which could result in the Court having to consider whether to admit the 1999 will to probate. Thus the beneficiaries under the 1999 will, who are not also beneficiaries under either of the two subsequent wills, do not have any interest at all in this action as it is presently constituted.
There is some uncertainty as to whether the interests of the beneficiaries under the wills of 30 April 2010 and 10 August 2010, apart from the plaintiffs and the defendant, may be adversely affected by this action. Insofar as those beneficiaries would benefit from the will of 30 April 2010 being admitted to probate, their interests in that outcome are likely to be adequately protected by the plaintiffs. Insofar as the interests of those beneficiaries would benefit if the will of 10 August 2010 was admitted to probate, their interests would seem to be adequately protected by the defendant’s propounding of that will. However, if there are any factors affecting these conclusions of which I am not aware, directions for notice under sub-r 205(8) would enable those beneficiaries to apply to intervene if their interests are not being properly protected.
Accordingly, I consider on a proper interpretation of 6RR 205(2) and (8) the beneficiaries under the wills of 30 April 2010 and 10 August 2010, apart from the plaintiffs and the defendant, are not to be joined as defendants to the action, but they should be given notice under 6R 205(8).
If I am wrong in my conclusion about the proper interpretation of the Rules, I consider in the circumstances of this case there is a proper basis under 6R 117(2)(a) to dispense with the Rules insofar as they require the beneficiaries under the wills of 30 April 2010 and 10 August 2010 to be made additional defendants to the action. Under 6RR 3 and 116(1) the Court is to give such directions as ensure that the action is conducted as expeditiously and economically as is consistent with the proper administration of justice. For the joinder of numerous defendants resident in the Ukraine and Poland, albeit that many of them would have common representation, would be likely to incur substantial delay and expense. By 6R 269 and Practice Direction 8.1 it is unlikely that the costs of separate representation of these beneficiaries would be allowed. For the reasons stated, I believe the action can be determined fairly and justly without involving such additional parties. The chances of any injustice being worked by not joining these additional defendants does not justify incurring substantial additional expense in an estate of this size and in the significant delays which are usually experienced where litigants are resident in Eastern Europe.
I have today made the following orders:
1No order on plaintiffs’ application (FDN8) to join additional defendants.
2Notice to be given under 6R 205(8)(a) to each of the beneficiaries (other than the plaintiffs and the defendant) under the wills of 30 April 2010 and 10 August 2010 of this action to the intent that such persons should be at liberty to apply to intervene if their interests are not adequately protected by the existing parties to the action.
3Where the persons to be given notice under paragraph 2 above are resident in Ukraine or Poland, the notice is to be given by pre-paid airmail post to their last known address and the time for any application for intervention by them is to be within 56 days after posting.
4Where the persons who are to be given notice under paragraph 2 are resident in Australia, notice is to be sent by pre-paid post to their last known address and the time for any application for intervention by them is to be 28 days after posting.
5Subject to any subsequent order to the contrary, the persons served with notices under paragraph 2 are to be bound by any judgment in the action.
6Costs in the cause.