Paton v JULIE Marie Lloyd as executrix of the estate of James Laurence Paton
[2018] WASC 273
•4 SEPTEMBER 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: PATON -v- JULIE MARIE LLOYD as executrix of the estate of JAMES LAURENCE PATON [2018] WASC 273
CORAM: SMITH J
HEARD: 21 AUGUST 2018
DELIVERED : 4 SEPTEMBER 2018
FILE NO/S: CIV 3016 of 2015
CIV 1506 of 2016
MATTER: Family Provision Act 1972
The Estate of James Laurence Paton of 31A Tain Street Applecross in the State of Western Australia, Engineer dec Probate No 2845 of 2015
BETWEEN: PETER JAMES PATON
Plaintiff
AND
JULIE MARIE LLOYD as executrix of the estate of JAMES LAURENCE PATON
First Defendant
JULIE MARIE LLOYD as sole beneficiary under the estate of JAMES LAURENCE PATON
Second Defendant
Catchwords:
Interlocutory application - Application for determination of order of hearing of proceedings - Family Provision Act proceedings - Disentitling conduct raised as a defence - Revocation of grant of probate proceedings - Standing to bring revocation of grant of probate proceedings considered - Demarcation of lines of controversy in both proceedings considered - Turns on own facts
Legislation:
Family Provision Act 1972 (WA), s 6, s 6(1), s 6(3), s 7
Rules of the Supreme Court 1971 (WA), O 1 r 4B(1), O 4A r 2
Result:
Order made to hear issues in family provision proceedings prior to hearing revocation of grant proceedings
Representation:
Counsel:
| Plaintiff | : | Dr P R MacMillan |
| First Defendant | : | Mr P Lafferty |
| Second Defendant | : | Mr P Lafferty |
Solicitors:
| Plaintiff | : | Griffiths Rice & Co |
| First Defendant | : | Armeli & Molony Lawyers |
| Second Defendant | : | Armeli & Molony Lawyers |
Case(s) referred to in decision(s):
Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47
City of Swan v Lehman Bros Australia Ltd [2009] FCA 784
Daunt v Daunt [2013] VSC 706
Fodor v Simudvarac [2014] VSC 227
Hughes v National Trustees, Executors and Agency Company of Australasia Ltd (1979) 143 CLR 134
Landsdale Pty Ltd v Moore [2009] WASCA 176
Mataska v Browne [2013] VSC 62
Poulos v Pellicer in the Estate of Culina [2004] NSWSC 504
Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1
SMITH J:
The actions
This application relates to two matters between the same parties who are brother and sister. The defendant to both actions, Julie Marie Lloyd, seeks an order that the proceedings commenced by the plaintiff, Peter James Paton, pursuant to the Family Provision Act 1972 (WA) in CIV 3016 of 2015 be determined before the proceedings in CIV 1506 of 2016.
In this judgment, I have assessed the evidence and matters pleaded in the actions on the basis that:
(a)the determination of this application is an interlocutory matter;
(b)the findings of fact made are provisional only. In a final hearing on the merits of the actions there may be challenges to the admissibility of some of the matters deposed of in the affidavits filed in both actions; and
(c)findings of fact have been made in the absence of cross‑examination and any assessment of matters going to credit and reliability.
CIV 3016 of 2015 - family provision claim
The action in CIV 3016 of 2015 was commenced by originating summons filed on 18 December 2015. Peter James Paton, the son of James Laurence Paton who died on 11 April 2015 (the deceased), seeks an order for provision, out of the estate of the deceased, pursuant to s 6 of the Family Provision Act for his proper maintenance, support, education and advancement in life.
Ms Lloyd, the daughter of the deceased, is the first and second defendant to CIV 3016 of 2015, as the executrix and sole beneficiary of the estate.
In an affidavit in support of his family provision claim, sworn on 1 February 2016, Mr Paton deposes his personal circumstances are that, at the time of swearing the affidavit, he:
(a)was 61 years old;
(b)owns no real property or personal property of any value;
(c)resides in a property owned by Homeswest;
(d)has been in receipt of a disability pension since about 1989;
(e)had a net monthly income of $776.70 which is expended entirely on the basic necessities of day to day living;
(f)resides with a live‑in carer (who is not his partner) who receives a carer's pension; and
(g)suffers from a severe physical disability in the form of degenerative disc disease in his lower lumbar spine and has suffered this condition since the late 1980s. This condition causes him severe pain for which he has been prescribed powerful pain relief medication.
In his affidavit, Mr Paton deposes the following circumstances which are relevant to his relationship with the deceased:
(a)Throughout his childhood and adult life and until the time of his mother's death and the deceased's death he generally had a good and loving relationship with his mother and the deceased.
(b)He had regular and consistent contact with his mother and the deceased until about the time of both of their deaths. However, he did not see or speak to the deceased from about April 2014 when the deceased relocated to Ellenvale Aged Care in Broadwater, Western Australia.
(c)His disability rendered him unable to walk a significant amount and a journey to visit the deceased would have caused him a great deal of physical pain. Further, he did not have the financial resources to fund the various forms of public transport, food and accommodation required for such a journey.
(d)Throughout his adult life the deceased had occasionally provided him with small amounts of money to assist in his day to day needs with the most substantial single payment being $600.
In opposition to Mr Paton's claim for provision out of the estate of the deceased, two affidavits have been filed on behalf of Ms Lloyd. The first is an affidavit sworn by Ms Lloyd's husband, Peter Hugh Lloyd, on 4 October 2016 and the second is an affidavit sworn by Ms Lloyd on 7 October 2016.
In their affidavits, Mr and Ms Lloyd each recite an alleged long history of conduct by Mr Paton over many years which could be found to be disentitling conduct on Mr Paton's part. Ms Lloyd's defence to the family provision claim is that if this evidence is accepted by the court it will result in Mr Paton's claim being dismissed.
Mr Paton's alleged disentitling conduct may be briefly summarised as that he:
(a)emotionally abused the deceased causing the deceased extreme distress;
(b)has been a long time illicit drug abuser; and
(c)financially exploited the deceased over a long period of time.
It is also alleged by Ms Lloyd that Mr Paton had on one occasion assaulted the deceased which caused bruising on the deceased's arm and leg. Ms Lloyd also alleges that Mr Paton stole goods and money from the deceased in order to buy drugs.
Ms Lloyd also deposes that the deceased had kept a record of 'borrowings' by Mr Paton over a period of time spanning from 1 May 1996 to 12 May 2014 which amounts total approximately $100,000.
In these circumstances, Ms Lloyd claims that Mr Paton owes a debt to the estate of $100,000, being the amount of borrowings made by the deceased to Mr Paton during the deceased's lifetime.
CIV 1506 of 2016 - revocation of grant of probate proceedings
CIV 1506 of 2016 was commenced by originating summons filed on 31 March 2016. The matter, however, proceeded by way of pleadings.
On 10 January 2017, an amended statement of claim was filed on behalf of Mr Paton. In the amended statement of claim it is pleaded that Mr Paton seeks, among other things, the revocation of this court's grant of probate to Ms Lloyd, and the removal, or partial passing over, of Ms Lloyd as the executor of the estate of the deceased.
The amended statement of claim pleads that Mr Paton has standing to institute the action as he is an eligible claimant pursuant to s 7 of the Family Provision Act and has a reasonable possibility of an interest in the deceased's estate.
The basis of the claim as pleaded in the amended statement of claim is that:
(a)Ms Lloyd in her capacity as executor of the will of the deceased is in a position of conflict between her duties as executor and her own personal interests as the sole beneficiary of the deceased's estate; and
(b)the circumstances of what happened to the majority of the deceased's assets in the year or so prior to his death warrants careful investigation of which Ms Lloyd is not the proper person to conduct such investigation due to her position of conflict.
The property which is said to require investigation is a property owned by the deceased prior to his death situated at 31A Tain Street, Applecross, Western Australia, properly described as lot 2 on strata plan 1690, certificate of title 1836, folio 558.
It is common ground that:
(a)the deceased sold the Tain Street property to his granddaughter, Ms Holly Louise Lloyd (the daughter of Ms Lloyd), and Holly's de facto partner, Mr Christopher David O'Neill, about four months prior to his death;
(b)the Landgate T1 transfer document for the sale of the property was for an amount of $800,000; and
(c)the statement of assets and liabilities filed by Ms Lloyd in support of her application for a grant of probate stated the deceased's estate at the time of his death in April 2015 comprised a net amount of $305,053.28, which has been distributed to Ms Lloyd as sole beneficiary of the will of the deceased.
Mr Paton claims that as the Tain Street property was transferred in January 2015 for a sum of $800,000, the disposition of monies paid to the deceased between January and April 2015 should be investigated.
Mr Paton also pleads that the deceased suffered from Alzheimer's dementia for at least two years prior to his death and that Ms Lloyd was, or ought to have been, aware of the deceased's dementia condition based on her personal dealings with him during the period of two years or so prior to his death.
Consequently, Mr Paton seeks the revocation of the grant of probate or partial passing over of the grant of probate. He also seeks that there be a grant of letters of administration, with the will annexed, to his daughter, Miranda Shannon Paton. Alternatively, he seeks a grant of letters of administration, with the will annexed, to Ms Paton for the purpose of investigating:
(a)whether the purchase monies for the sale of the Tain Street property were paid to the deceased and, if so, how those funds were dealt with in the deceased's hands between the date of payment and his death on 11 April 2015; and
(b)whether Ms Lloyd paid to Ellendale Aged Care the funds required for the admission to that facility of the deceased and, if so, the sums so paid and whether such payment was a liability owed by the deceased to Ms Lloyd.
In the defence to the amended statement of claim, Ms Lloyd pleads that the sale of the Tain Street property was at a fair market value of $800,000 and the proceeds of sale were applied as follows:
(a)prior to the sale, Ms Lloyd paid from her funds a deposit of $45,000 for the deceased to go into residential care;
(b)$414,795.58 from the sale of the property was paid into the deceased's account;
(c)the balance of the residential bond fee in the amount of $305,028 was paid from the deceased's account;
(d)upon the death of the deceased the refund of the bond was $348,804.84 of which $45,000 was paid directly to Ms Lloyd and the remainder paid to the deceased's estate;
(e)the sum of $8,996.90 was applied to meet the funeral expenses of the deceased;
(f)the deceased's account had a balance of $101,715.60 as at 13 July 2015 when the account was closed; and
(g)the balance of the purchase price was the subject of an inter vivos gift from the deceased to Ms Lloyd on grounds that:
(i)the deceased told Ms Lloyd that the balance of the proceeds should be banked directly into her account as she was his sole beneficiary, that she would receive the money in any event and the deceased had no use for it; and
(ii)Ms Lloyd told her father that in those circumstances she intended to give the balance to her daughter Holly to pay for Holly's share of the purchase price of the Tain Street property.
Relevant principles - trial of issues separately
Whilst the application is to try one action prior to the other, for reasons that follow, I am of the opinion that part of the family provision claim should be heard as a separate issue prior to a hearing of the revocation of grant proceedings.
The principles governing applications for the order of a separate trial of issues were summarised by McKechnie J in Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd as follows:[1]
[1] Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47 [4]; see also Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1; Landsdale Pty Ltd v Moore [2009] WASCA 176 [21] ‑ [22] (Newnes JA, Buss JA agreeing) and City of Swan v Lehman Bros Australia Ltd [2009] FCA 784 [27] (Rares J).
•A separate trial of issues is only appropriate in clear and simple cases.
•Separate trials of issues should only be embarked upon when the utility, economy and fairness are beyond question.
•The fact that the resolution of a separate trial may determine the litigation is relevant.
•Separate trials of issues may be appropriate where it is likely to save expense and inconvenience.
•There is a focus in the Rules of the Supreme Court on the expedition of determination of matters before the Court and separate trials of issues may advance the expedition.
•A possibility that the determination of issues tried separately may lead to settlement should be taken into account even though the issues may not finally dispose of the action.
•In many cases the formulation of specific questions to be tried separately, from and in advance of other issues, will assist in the resolution of the matters in issue if the questions are capable of final answer in accordance with the judicial process.
•Separate trials are inappropriate where the result depends on complex issues of fact or when a preliminary question is one of mixed fact and law.
•The procedure should be confined generally to cases where facts are complicated and the legal issues short, otherwise it can be a treacherous shortcut.
•Separate trials may be productive of delay, extra expense and uncertainty of outcome, which they are intended to avoid. Saving some time is often illusory when the parties have the necessity of making full preparation and factual matters relevant to one issue are relevant to others which overlap.
•There is potential for further appeals.
His Honour went on to observe that these statements of principle are guides to the exercise of discretion and that the discretion must be exercised on a case by case basis, having regard to both the private interests of the parties and the public interest in the prompt and efficient resolution of litigation.[2]
[2] Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47 [5].
Pursuant to O 4A r 2 of the Rules of theSupreme Court 1971 (WA), the court has power to make any procedural direction that in the court's opinion it is just to make to facilitate the attainment of the objectives of case management set out in O 1 r 4B(1). These objectives are:
(a)promoting the just determination of litigation; and
(b)disposing efficiently of the business of the Court; and
(c)maximising the efficient use of available judicial and administrative resources; and
(d)facilitating the timely disposal of business; and
(e)ensuring the procedure applicable, and the costs of the procedure to the parties and the State, are proportionate to the value, importance and complexity of the subject matter in dispute; and
(f)that the procedure applicable, and the costs of the procedure to the parties, are proportionate to the financial position of each party.
Should the family provision claim in CIV 3016 of 2015 be determined before the revocation of grant proceedings in CIV 1506 of 2016?
It is common ground that the family provision claim has been held in abeyance whilst the revocation of grant proceedings have been progressed. Yet, neither action has been entered for trial.
Mr Paton contends that the family provision claim cannot be determined unless and until the size of the deceased's estate has been determined.
It is clear from the matters set out in the affidavits filed in the family provision claim that three issues arise for determination.
First, whether the jurisdiction of the court under s 6(1) of the Family Provision Act is invoked. In particular, whether adequate provision from the estate of the deceased has been made for Mr Paton's proper maintenance, support, education or advancement in life.
An assessment of the facts to satisfy this jurisdictional fact will necessarily require an assessment of whether Mr Paton has the capacity to provide for his own needs. When regard is had to the circumstances set out in Mr Paton's affidavit, if accepted, it is clear that the jurisdiction of the court to make an order for provision from the estate in favour of Mr Paton could be said to be properly invoked.
Second, whether the discretion conferred on the court in s 6(1) of the Family Provision Act should be refused on grounds of disentitling conduct as defined in s 6(3) of the Family Provision Act. Section 6(3) of the Family Provision Act provides:
(3)The Court may attach such conditions to the order as it thinks fit, or may refuse to make an order in favour of any person on the ground that his character or conduct is such as in the opinion of the Court to disentitle him to the benefit of an order, or on any other ground which the Court thinks sufficient.
If the court was to find that the character or conduct of Mr Paton was such as to disentitle him to the benefit of an order for adequate provision from the estate of the deceased, the effect of such a finding would result not only in the dismissal of the family provision claim but also the revocation of grant proceedings would necessarily be rendered nugatory.
However, in the event that a finding is made in the family provision claim that the character or conduct of Mr Paton was not such so as to disentitle him to the benefit of an order for adequate provision from the estate of the deceased, it would then become necessary for the court to determine what provision should be made from the deceased's estate for Mr Paton's proper maintenance etc.
This gives rise to the third issue for determination. This is the consequence of the submission made on behalf of Mr Paton that it would be necessary for the revocation of grant proceedings to be heard and determined prior to making an order in the family provision claim, as Mr Paton claims that if he succeeds in the revocation of grant proceedings the value of the estate would be at least $800,000 not $305,053.28.
After having regard to the principles in Carlo Nobili SpA Rubinetterie[3] and the matters that follow in these reasons, I am not satisfied that the revocation of grant proceedings should be heard and determined prior to hearing any issues in the family provision claim.
[3] Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47.
First, Mr Paton's standing to institute the revocation of grant proceedings relies solely upon an 'interest' as distinct from a right in the property of the estate, as a claimant in the family provision claim.
In support of such an interest to confer standing, the reasons of McMillan J in Mataska v Browne can be relied upon.[4] In that matter, his Honour found that in the circumstances there were strong grounds upon which to conclude that the plaintiff had a prima facie case for provision from the estate so as to provide the plaintiff's standing to bring an application to pass over the executrix of the estate.[5] However, the debate as to whether the decision in Mataska has been accepted as a principle at common law is not without controversy.[6]
[4] Mataska v Browne [2013] VSC 62.
[5] Mataska v Browne [2013] VSC 62 [51]; see also Fodor v Simudvarac [2014] VSC 227 (McMillan J) where the point was not in contest.
[6] See the discussion in Daunt v Daunt [2013] VSC 706 [40] ‑ [42].
Importantly in this matter, the interest in the estate of the deceased does not vest in Mr Paton as an immediate right but is dependent upon a claim which might be dismissed.[7]
[7] See the observations made in Poulos v Pellicer in the Estate of Culina [2004] NSWSC 504 [24] (Windeyer J).
Second, I do not agree that the court will not be in a position to assess the conduct of Mr Paton in the family provision claim without regard to the conduct of Ms Lloyd in relation to the sale of the deceased's property and disposition of the net funds of the estate. The conduct of MsLloyd is, on the factual matters set out in the affidavit material of Mr Paton, irrelevant to this issue. In particular, the property at Tain Street was sold after Mr Paton ceased to have contact with the deceased. The alleged disentitling conduct relied upon by Ms Lloyd in the family provision claim is said to have occurred prior to the transfer of the Tain Street property and the disposition of the funds from the sale.
I also do not agree that if the family provision proceedings are tried first the court will not be in a position to properly determine the issue of disentitling conduct. In particular, I do not agree that such an assessment can only be made on the basis of an assessment of all of the evidence, including evidence as to the size of the estate, and by regard to an assessment of need.
In Hughes v National Trustees, Executors and Agency Company of Australasia Ltd, Gibbs J observed:[8]
The question whether conduct is sufficient to disentitle an applicant to relief must depend not only on the nature of the conduct itself, but also, to some extent, on the strength of his need or claim to provision from the estate of the testatrix. The stronger the applicant's case for relief, the more reprehensible must have been his conduct to disentitle him to the benefit in any provision.
[8] Hughes v National Trustees, Executors and Agency Company of Australasia Ltd (1979) 143 CLR 134, 156.
It does not follow that this observation made by his Honour necessarily results in a requirement to assess the size of the estate. Such a consideration may be relevant in some family provision proceedings, but on the evidence presently before the court in this matter it cannot be said that the size of the estate is material to the alleged disentitling conduct.
In this matter, Mr Paton appears, on the affidavit material before the court in the family provision proceedings, to have a very strong case that he is unable to adequately provide for his own needs. However, when the evidence of Ms Lloyd's case is taken at its highest it appears that prima facie there is a very strong case of disentitling conduct which could be regarded as sufficiently reprehensible to deny Mr Paton relief. It is also of importance that the evidence before the court is not disputed to any substantial degree by Mr Paton. Whilst counsel for Mr Paton put forward an argument that Mr Paton disputes many of the matters set out in the affidavit material of Mr and Mrs Lloyd, in determining this application the court can only have regard to the evidence that is presently before the court.
It is notable that Mr Paton, in his affidavit in support of the family provision claim, simply states that he had a generally good and loving relationship with the deceased and his mother. He, however, deposes of no facts in support of that opinion.
In circumstances where:
(a)Mr Paton's standing to bring the revocation of grant proceedings in CIV 1506 of 2016 relies upon an expectant interest in a successful claim in the family provision proceedings in CIV 3016 of 2015;
(b)even if the revocation of grant proceedings proceed first, and Mr Paton's claim fails, his claim in the family provision claim will have to proceed to realise any claim to the proceeds of the estate;
(c)even if Mr Paton succeeds in the revocation of grant proceedings (and I make no assessment of the likelihood of the prospects of success of that action), further action may have to be instituted by Mr Paton or his daughter Ms Paton, to bring any proceeds of the sale of the Tain Street property into the estate in the event that an order is made by the court for an investigation and the investigation subsequently carried out (pursuant to such an order) would support further proceedings being instituted by Mr Paton;
(d)if Mr Paton fails in the family provision claim on the grounds of disentitling conduct, the revocation of grant proceedings will necessarily fail on grounds of standing and be rendered nugatory; and
(e)there is no overlap in the issues raised in the family provision claim going to the plaintiff's capacity to provide for his own needs and the alleged disentitling conduct of Mr Paton and the issues raised in the revocation of grant proceedings;
In particular, I am satisfied that if a hearing of the jurisdictional issue and the disentitling issue in the family provision claim is to proceed first:
(a)there is a sufficient demarcation in the lines of controversy between these issues and an assessment of the size of the estate which can be dealt with separately and would necessarily be dealt with separately if the revocation of grant proceedings were to proceed first; and
(b)this course of action is more likely to result in savings in costs and a speedy resolution of the matters than if the revocation of grant proceedings is to be heard first.
I am of the opinion that it is in the interest of promoting the just determination of litigation and disposing efficiently of the business of the court that:
(a)the jurisdictional issue of whether Mr Paton has capacity to provide for his own needs;
(b)whether adequate provision should be made for him from the estate of the deceased; and
(c)whether he engaged in conduct so as to disentitle him from adequate provision of the estate of the deceased
be dealt with prior to any hearing and determination in the revocation of grant proceedings.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
VV
ASSOCIATE TO THE HONOURABLE JUSTICE SMITH4 SEPTEMBER 2018
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