Pauperis v Pauperis

[2023] NSWSC 1136

Supreme Court

New South Wales

Medium Neutral Citation:

Pauperis v Pauperis [2023] NSWSC 1136

Hearing dates:

13 September 2023

Date of orders:

13 September 2023

Decision date:

19 September 2023

Jurisdiction:

Equity - Duty List

Before:

McGrath J

Decision:

Approve proposed settlement in the Deed of Settlement and Release dated 12 September 2023

Catchwords:

PRACTICE AND PROCEDURE – Civil Procedure Act 2005 (NSW), s 76(3) – application for approval of settlement of proceedings involving third defendant who is a person under legal incapacity – settlement approved

Legislation Cited:

Civil Procedure Act2005 (NSW)

Cases Cited:

Budini v Sunnyfield(No 3) [2021] FCA 1540

Fairhurst (bhtNSW Trustee and Guardian) v Fairhurst [2012] NSWSC 388

Pauperis v Pauperis [2020] NSWSC 1470

Permanent Trustee Company Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336

Category:

Principal judgment

Parties:

Ralph Udo Pauperis (Plaintiff)
Kurt Werner Pauperis (First Defendant)
Judith Joy Elwing (Second Defendant)
The Public Trustee of Queensland as manager of the estate of Kaspar Dale Pauperis (Third Defendant)
NSW Trustee and Guardian (Fourth Defendant)
Registrar General of NSW (Fifth Defendant)

Representation:

Counsel:
N Allan (Plaintiff)
B Connell (First and Second Defendants)
FFF Salama with A Smyth (Third Defendant)
Fourth Defendant – No Appearance
Fifth Defendant – No Appearance

Solicitors:
Dean Michael Solicitors (Plaintiff)
Fox & Staniland Lawyers (First and Second Defendants)
Makinson d’Apice Lawyers (Third Defendant)

File Number(s):

2019/00065839

Publication restriction:

Nil

EX TEMPORE JUDGMENT (REVISED)

1. Before me is an application pursuant to s 76(3) of the Civil Procedure Act2005 (NSW) for the court's approval of a compromise or settlement of these proceedings. The need for the approval arises because the parties have now reached a settlement of the proceedings in a Deed of Settlement and Release made on 12 September 2023, and the third defendant, Kaspar Pauperis, is a person under legal incapacity.

2. The evidence before me in support of the application is as follows:

1. affidavit of Alan Scott Collins sworn 11 September 2023;

2. affidavit of Erin Tennille Dawson sworn 12 September 2023; and

3. confidential memorandum of advice dated 11 September 2023 from counsel for the third defendant.

3. The proceedings have been hard fought, resulting in a judgment of Parker J given on 23 October 2020 after three days of hearing: Pauperis v Pauperis [2020] NSWSC 1470. In a judgment of 200 paragraphs, his Honour made numerous findings of fact and had to apply those unusual facts to complex legal questions involving property and estate law. In this judgment, I will also refer to all parties by their given names, as used by Parker J.

4. For the sake of brevity, I do not repeat all of those matters of fact in this judgment but incorporate them by reference.

5. The outcome of Parker J's judgment was that two properties formed part of Lisa's estate. If it is assumed that Kaspar has a one-third interest in Lisa's estate, a question which is yet to be determined by Parker J, and the estate has a total current estimated value of $1,326,400, this would currently value Kaspar's interest in Lisa's estate at about $440,000.

6. Short of the parties arriving at a settlement to dispose of the proceedings, there are further interlocutory steps to be undertaken and a further hearing will be necessary before Parker J is able to finally determine all questions which have arisen in them. This would involve significant further costs to be incurred by all parties in doing so. There is also significant uncertainty and risk in the ultimate outcome of the proceedings for all parties.

7. Kaspar is 31 years of age, living with his mother in Casino, Queensland and working part-time.

8. Kaspar's incapacity arises by virtue of his complex medical conditions, such that on 24 August 2018, the Queensland Civil and Administrative Tribunal appointed the Public Trustee of Queensland as administrator for all his financial matters. That appointment was continued on 6 September 2019, for a further three years.

9. Kaspar currently has assets totalling $463,000, comprising:

1. $78,000 held in a Public Trustee of Queensland trust account;

2. $35,000 in superannuation; and

3. an apartment estimated to be worth $350,000.

10. At 31 years of age, it will be several decades before Kaspar could access any of the money held as his superannuation.

11. Kaspar's current yearly income is $59,448.98 from the following sources:

1. about $240 per fortnight from his employer;

2. $754 per fortnight from a Centrelink disability support pension; and

3. $1,200 per fortnight from rental income on his apartment.

12. Kaspar's estimated annual expenditure totals $64,095.93.

13. This means that Kaspar's annual income to expenditure shortfall is $4,646.95, which has to be met from the amount in his trust account.

14. During the course of the proceedings and in the settlement negotiations, Kaspar has been represented by solicitors and counsel, and has incurred legal costs to date of approximately $189,000, inclusive of GST. Those costs have been paid by the Public Trustee of Queensland, with the resulting debt charged against Kaspar's assets.

15. Under the proposed settlement, Kaspar is to receive a total amount of $250,000 from the net proceeds of sale on one of the properties forming part of the estate of Lisa, on the assumption he is entitled to a one-third share. This will enable Kaspar to pay for his legal costs (the Public Trustee of Queensland agreeing to receive $150,000 in full satisfaction of them) and retain the balance of $100,000, to add to the $78,000 in the trust account held for him. The proceedings will come to an end by dismissal of the claim and cross-claim with no order as to costs, with the intent that each party will bear their own costs.

16. The effect of the settlement is that instead of incurring significantly greater legal costs, and imperilling his existing assets at the risk of an uncertain litigation outcome, there is certainty that Kaspar will receive $100,000 to add to his savings, therefore covering his living expenses for longer and providing him with greater security for whatever may lie ahead in his life.

17. Continuing with the proceedings and all of the uncertainties to which that would give rise in the ultimate outcome for Kaspar, is not in the best interests of Kaspar.

18. I note that Mr Collins, as a representative of Kaspar's financial manager at the Public Trustee of Queensland, believes that the proposed settlement is a fair compromise.

19. Accordingly, in the exercise of the Court's protective function, I consider that the proposed settlement is beneficial to Kaspar in the sense described in Fairhurst (bhtNSW Trustee and Guardian) v Fairhurst [2012] NSWSC 388 at [30]-[39], Permanent Trustee Company Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336 at [29], and Budini v Sunnyfield (No 3) [2021] FCA 1540 at [10]-[12].

20. For these reasons, I approve the proposed settlement in the Deed of Settlement and Release dated 12 September 2023. I also make the orders contained in the short minutes of order initialled by me and dated today’s date:

SHORT MINUTES OF ORDER

1. NOTES the parties have settled these proceedings.

2. ORDERS that pursuant to section 76(4) of the Civil Procedure Act 2005 (NSW), the agreement between the parties set out in a Deed of Settlement between them, a copy of which is Annexure “B” to the Affidavit of Erin Dawson sworn 12 September 2023, be approved.

3. ORDERS that pursuant to section 77 of the Civil Procedure Act 2005 (NSW), the amount payable from the estate of the late Luise Steigis by the fourth defendant to the third defendant be paid to the Public Trustee of Queensland.

4. ORDERS that the moneys paid into Court by the first and second defendant, be released forthwith to the fourth defendant to be paid in accordance with the terms of the Deed of Settlement.

5. ORDERS that proceedings on the claim and cross-claim be dismissed on terms that the parties and each of them are not entitled to claim any relief on the same causes of action in any subsequent proceedings commenced in this or any other Court.

6. ORDERS that all previous costs orders made in the proceedings be vacated.

7. No order as to costs of the proceedings to the intent that each of the parties will bear its own costs.

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Decision last updated: 19 September 2023