Percival & Percival (No 2)
[2022] FedCFamC2F 1734
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Percival & Percival (No 2) [2022] FedCFamC2F 1734
File number(s): BRC 4896 of 2020 Judgment of: JUDGE COATES Date of judgment: 15 December 2022 Catchwords: FAMILY LAW – Property – death of applicant – substitution application – dismissal – scandalous material – consideration of referral of solicitor. Legislation: Bankruptcy Act 1966
Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
Succession Act 1981
Trusts Act 1973
Cases cited: Price v Strange (1820) 56 ER 1052. Division: Division 2 Family Law Number of paragraphs: 100 Date of last submission/s: 21 June 2022 Date of hearing: 29 April 2022 Place: Brisbane Solicitor for the Applicant: C Lawyers Solicitor for the Respondent: Arbon Legal Group ORDERS
BRC 4896 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS PERCIVAL (DECEASED)
Applicant
AND: MR PERCIVAL
Respondent
order made by:
JUDGE COATES
DATE OF ORDER:
15 december 2022
THE COURT ORDERS:
1.That the Application in a Proceeding filed 8 March 2022 be dismissed.
2.That the Initiating Application filed 1 May 2020 be dismissed.
3.That Mr B, and/or Mr C do all acts necessary to remove caveats from D Street, Suburb E in the State of Queensland.
4.That Mr C has 28 days to file and serve an affidavit as to why the judgment should not be referred to the Legal Services Commission for unprofessional conduct or professional misconduct.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Percival & Percival has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE COATES:
An application is before the court to substitute a party for the deceased wife in a property proceeding.
The wife filed property proceedings on 1 May 2020, but died in 2021.
The son of the parties, Mr B, born in 1974, seeks to be substituted for the applicant.
I will address the law as to such substitutions shortly, but will outline the context of the matter.
SUBSTANTIVE CLAIM
The wife’s Initiating Application sought:
(a)A declaration that she has an equitable interest in three real properties;
(b)That two of the properties be transferred to her;
(c)That she receive 30 percent of the funds on sale of the third property;
(d)The she receive an equal distribution on the sale of the husband’s vehicles;
(e)That she retain her superannuation and fifty percent of the husband’s superannuation;
(f)That she receive an equal distribution of monies held by the husband in his bank accounts or elsewhere, and
(g)That both parties retain everything else in their names.
The husband sought that the application be dismissed.
His case is based on:
(a)A previous informal but equal property settlement, dealing with all the then existing pool;
(b)Such settlement was soon after separation in 1994;
(c)The wife’s application, even though within time as the divorce only occurred in 2019, is still launched about 25-26 years after separation, and
(d)That the real property, all of it in his name, was accumulated after separation.
RELATIONSHIP
The wife was born in 1953 and died in 2021, aged 68.
When she filed her Initiating Application on 1 May 2020, she was aged 66.
The husband was born in 1949 and is aged 73.
The parties married in 1971. There is a difference between the claimed dates of separation. The wife states it occurred in 1998, but the husband stated it was in 1994. Because of dates which can be fixed due to documentary evidence relied on by the husband, and an invalid will introduced into the wife’s case, the date of separation was probably in 1994 or 1995. The wife’s new and sworn claim of 1998, which I note is the anniversary date of their wedding, is most certainly incorrect.
The parties divorced, an order being made 24 October 2019, and although the property application is in time, it is nevertheless filed 25-26 years after separation.
There are two children of the relationship, the applicant for substitution Mr B aged 47 and his sister Ms F aged 44.
The matter was being case managed and had failed to settle.
The matter would have been set for a trial but for the wife’s death.
LAW AS TO SUBSTITUTION A PARTY
The Family Law Act 1975 (Cth) (“the Act”) and the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 allow for the substitution of a deceased litigant.
Under the relevant provisions of the Act [s.79(8)] a deceased’s legal personal representative may be substituted, and the court is to then determine whether it would have made orders with respect to property, and whether in the circumstances it is still appropriate to make the orders.
The term ‘legal personal representative’ has to be understood.
The term is not defined in the Act, but is referred to in other Acts and has a common usage at law.
It is an old term from succession law, and as far back as 1820, it was said that “… The ordinary sense of legal [personal] representatives is executors and administrators”, see Price v Strange (1820) 56 ER 1052. Butterworth’s Australian Legal Dictionary (1997) defines circumstances where the term has commonly been applied, by way of example, to an executor of a will, or an administrator appointed under the intestacy rules or the trustee of an estate of a person under a legal incapacity. Under the Queensland Trusts Act 1973 s.5 defines ‘personal representative’ as “… the executor, original or by representation, or the administrator for the time being of the estate of a deceased person”. A similar definition is given in the Queensland Succession Act 1981, and s.5 defines ‘personal representative’ as “…the executor, original or by representation, or administrator of a deceased person”. The words “by representation” mean that a person has, even without formal appointment, performed acts equivalent to or in the capacity of personal representative in making decisions of a legal nature for another, and recognises that some people undertake the role because of the circumstances they are in, and by way of example, a person looking after the legal interest of a relative although not formally appointed to do so.
STEPS TO BECOME PERSONAL REPRESENTATIVE
The son was not named in a valid will as the personal legal repetitive and gave no evidence that he had acted for the deceased in any way so as to lead to a conclusion that he could be substituted.
When this issue was raised, and as the wife died intestate, the court was told he would make the appropriate application to the Supreme Court of Queensland.
Letters of administration were granted on 25 July 2022.
To achieve those letters, the son swore to the deceased having distributable property and, consequently, affairs to attend to, being:
(a)A Motor Vehicle 1 estimated value at $29,000
(b)Super Fund 1 – nominal amount;
(c)G Life Insurance policy;
(d)Queen bed valued at $500, and
(e)Household contents – estimated value $1000, and
(f)A debt of about $15,000 on the vehicle.
I was not told how the property would be distributed, although I assume it would follow the rules of intestacy, however, the son now has duties in administering the deceased’s estate in relation to at least one debt.
While the wife died intestate, a document purporting to be a will was located on 21 May 2022, during this proceeding, a copy of which was placed before this court.
It was executed in 1990 and at that stage left the wife’s estate to the respondent husband here, as well as appointing him as executor. In its original form it appeared to be a valid will.
Purported changes were made, by handwritten alterations, in 2001.
Those handwritten alterations appoint the applicant for substitution here and his sister Ms F, as executors.
I assume that initials next to the handwritten amendments are those of the deceased applicant wife.
Also in handwriting is another note stating that “I [Ms Percival] on this day in 2001 being of sound mind and body. [sic] Have made the said changes to this will due to the fact that my husband [Mr Percival] and myself [Ms Percival] did separate in 1995”. That she stated separation to be at an earlier time than the date she swore to in her affidavit, that separation occurred in 1998, is closer to the husband’s claim that such occurred in 1994. The date has importance because of her claims as to what occurred post-separation.
The altered will purported to leave the wife’s estate to the son and daughter.
Even without the alterations, as a matter of fact, a divorce order was made 24 October 2019, and such revoked the original will to the extent stated Queensland Succession Act 1981 (s.15).
In any case, the son accepted that the will was not valid.
That the son has been appointed administrator of the deceased’s estate qualifies him to be substituted in place of the deceased wife.
SCHEME OF THE ACT
The scheme of the Act and the rules is to take a stepped approach in determining issues where a party dies, being to:
(a)Consider whether the legal personal representative could be appointed as a substitute for a deceased party;
(b)Form an opinion that property orders would be made if the party had not died;
(c)Whether it is still appropriate to make the orders, and if so
(d)Then appoint the substitute.
The legal personal representative here could be appointed as a substitute.
Forming an opinion as to whether property orders would have been made is to assess and weigh the evidence presented.
It would assist if a framework was established to identify the pool, and from the evidence there are three real properties and goods and chattels.
The ownership of all property, except the wife’s Motor Vehicle 1 – estimated value $29,000, her Super Fund 1 – nominal amount, her G Life Insurance policy and a queen bed – valued at $500, is legally owned and possessed by the husband.
It is estimated in the wife’s case that he holds property valued at about $3,000,000.
The husband has objected to paying for valuations at this stage as he wants this application dismissed and he is entitled to take that position until a decision is taken to allow the wife’s case to proceed.
Contributions have to be assessed, not in the same manner that fact finding would be made if evidence was tested, but as to whether the wife has a prima facie case and then as best as possible, assessment of the s.75(2) considerations.
The first issue is that the application is about 25/26 years after separation.
The second issue is that the applicant wife’s case is that she made the major financial contributions to the purchase of the marital home in 1971, at H Street, Suburb J, stating she paid the mortgage as well as for groceries and clothing costs for the children.
The third issue is that the wife also pursues the case that she made the major non-financial contributions returning to work soon after giving birth, and not only worked, but was primary carer of the children when she got home from work.
Her case is made up of bare allegations without particulars in circumstances where such are required, even at a later stage when the husband filed his material.
Her evidence is designed to allow for a case that post-separation she was swindled by the husband, aided by his solicitor and her solicitor. It is a serious claim.
She said she remained in the marital home, this would then have been from 1998, and within 12-months the husband’s girlfriend broke into her house and stole her marriage and birth certificates, using these identity documents to buy goods and causing a debt in her name of $25,000.
She said she spoke to the “bankruptcy people”, explained the situation and “they” granted her a “short-term (6 months) bankruptcy”.
There are no particulars or supporting documents although bankruptcy is not an act under the Bankruptcy Act 1966 which can occur without the creation of records alleging the acts causing bankruptcy. Further, why she was attending to the alleged debts if they arose due to criminal offences by the husband’s girlfriend is a fact which required explanation as soon as she alleged it. She was required to tell the court why she had not made complaint to police about these alleged offences – break and enter, stealing and fraud. The claims have an air of unreality about them. Bankruptcy records would have assisted the court to understand her case.
She also claimed that she sought legal advice for a property settlement and a mediation occurred. She then alleged that the husband, his solicitor and her solicitor started attacking her and she found out later that the solicitors were having an affair.
There are no particulars of these claims, including how the alleged attack on her materialised or how she knows the solicitors were dating each other.
The wife further claimed that she occupied the marital home for 12-months after separation and despite it being in both names, the husband sold it and she did not know until a real estate agent knocked at the door and said she had 24-hours to vacate the house. She also claimed the real estate agent purchased the property,
There are no particulars of these claim, although land does not transfer without documents coming into existence which may assist the court to understand her claim that the husband sold the property without her knowledge.
The wife stated that the husband then purchased K Street, Suburb E and put the property into his father’s name. She claimed that the proceeds from the sale of the marital home, although the word ‘process’ appears where ‘proceeds’ should, which indicates a spell check error, were used to purchase K Street, Suburb E.
His father is now dead and the husband inherited the house.
She also claimed that a woman claiming to be the husband’s other daughter, a Ms L, also known as Ms L had “come into his life”, that she is married with children, and that the husband supposedly bought a house late in 2019, which she occupies and she receives $1000 a week cash in hand “as so called wages for being [Mr Percival’s] secretary”.
The wife made the following claim, and I quote it because the sentence is grammatically incorrect and I have to try and work out what it means: “The property that [Ms L] is living at [M Street, Suburb E], QLD, rent with this property is under the name of [Mr Percival]”.
The wife is stating that the husband owns the property, a fact he confirmed.
There is also confirmation by the wife that money was owed to the paternal grandfather. She stated the amount was $6,000 and owed by both parties and she paid him back, but does not have proof.
The contrast in the evidence could not be more different.
The husband’s case is that he made the larger financial contributions at the beginning of the marriage, including the payment of the mortgage.
That could be a triable issue, but he said at separation, the parties worked out a list of assets, sold everything and after paying debts the parties were left with $16,000 cash. He said agreement to split what they had equally was reached after a mediation and the wife was represented by a solicitor by the name of Ms N, although the wife did not state the name of her solicitor, only that her solicitor attacked her in concert with the husband’s solicitor and the husband.
The husband said he does not know whether her lawyer was not dating his lawyer.
He said the wife paid the grandfather what she owned him from her share of the $16,000. He attached a handwritten note from the wife, signed, stating that she owed the grandfather $5,000 for a personal loan from 1992 and the higher amount was due to interest.
He said he did not again see the wife until 2012, at their daughter’s marriage.
In support of his case, and producing a document which again calls into question the wife’s claimed date of separation in 1998, the husband attached correspondence from O Law Firm (his solicitors) dated 1997 to him, confirming a mediation or settlement conference occurring in 1996, and that the wife attended, accompanied by her solicitor Ms N.
That letter sets out that the wife sought to take what was in the pool - $16,000, but that the husband disputed that, put forward that both had about the same earning capacity and that he paid the mortgage and rates.
While that letter suggests for the husband courses of action and tactics, which do not offend against ethical legal management, it puts evidence before the court of the state of the pool as at separation, because it is talking about the pool and at no time refers to the wife having any view other than there was about $16,000 to distribute.
It is apparent that the wife is not a good historian.
She stated that the mediation was held within the 12-month period after separation, which in her case would have been from 1998, yet it is clear that the mediation occurred in 1996 (referring to the O Law Firm correspondence dated 1997), and after the husband stated that the parties had $16,000 after the sale of their assets and payment of debts. The wife failed to supply correspondence from her solicitor – and it would be hard to imagine that such had not existed.
In his first affidavit filed on 12 October 2022, the husband attached a copy of the transfer document, that the marital home at H Street, Suburb J was sold in 1996 for $120,000, which was three and a half months before the mediation the parties attended in 1996.
This makes the claims that the wife did not know about the sale of the house very shaky, because such would have been recorded at the settlement conference and referred to if she claimed it was an asset which had to be dealt with. The sale was also much before the wife claims it was sold.
The husband gave evidence that he and his father purchased K Street, Suburb E in 1998, a year after the settlement conference in which each party took half of the $16,000. The husband has evidence of taking a loan which does not assist the wife’s case that he used funds from the sale of the marital home to her exclusion.
In 2009, well after separation, his father gifted him the business and the D Street, Suburb E premises it operates from. A Deed of Gift, stating the transfer was for natural love and affection for his son, is attached to the husband material. This was well after the settlement conference.
He also gave evidence that his father died in 2013 and left him K Street, Suburb E.
He purchased the M Street, Suburb E property in about 2019, well after separation.
The wife has placed caveats over the three properties owned by the husband.
Considering then:
(a)The husband claimed separation occurred in 1994 and handwritten notes on the invalid will, unchallenged that it is the wife’s handwriting, claims separation was in 1995;
(b)The marital home was sold in 1996;
(c)A settlement conference occurred in 1996;
(d)That the sum of $16,000 was discussed as being the only property of the relationship then available for distribution;
(e)That there was no mention at the settlement conference of the marital home still in the ownership of the parties;
(f)That the wife has made unfounded allegations that the solicitors were dating each other and attacked her at the settlement conference;
(g)That she took no steps to have police investigate claims of break and enter, theft and fraud which left her with debt and bankruptcy, and
(h)That there are no particulars to support any of these major claims
I can only conclude that the wife’s case has been poorly asserted by her, and that there is no proximate relationship between the husband’s realty holdings now and alleged use of marital money to the exclusion of the wife to purchase some of that property.
Further, as to credit, apart from the fact that she is a poor historian and such is shown by documents I have referred to above, the wife and the son Mr B make allegations and claims which are scandalous.
To claim that the husband’s girlfriend broke into her home and stole her marriage and birth certificates, and then used those documents to steal her identity to commit fraud, without evidence of complaint or other evidence to suggest such was true, is to place inadmissible evidence before the court.
To makes claims of the woman Ms L so as to suggest she is taking advantage of the husband, and that is what I find the claims are about, are also scandalous, irrelevant and inadmissible.
To claim her own solicitor, who she did not name but whose name is in the documentary material, she was in a relationship with the husband’s solicitor and attacked her at the settlement conference, without any particulars or supporting evidence, is also scandalous and inadmissible.
To place caveats on the titles of property owned by the husband is without any basis whatsoever, with no claim possible.
I have also considered the position of Mr B and his sister Ms F – children of the deceased and the husband.
In assessing whether the wife has a prima facie case, I would have to come to the conclusion that what she states to be evidence of contributions would be triable, but that there is no property now which can be seen to have a proximate connection to property of the marriage, and that the parties settled finally between each other the small amount of property they had, being $16,000, equally between them in 1997.
As to his daughter Ms F, the husband said in 2014 he arranged a loan to her and her husband through a trust he controls (there is no evidence of any connection between the trust and Ms F), and evidence of the loan agreement is attached to his material. He lent them $353,373.58. He stated the interest rate payable. He said he does not expect to receive the principle amount.
As to his son Mr B, who wants to be substituted, he stated that “[Mr B] and I do not have a relationship anymore. I believe that he is aware that he is not a beneficiary named under my Will”.
For whatever reason, there is a rift between the husband and his children, but that is not of concern to the property application here and would need to be dealt with in another jurisdiction, if this is a triable issue.
The wife’s case is in that category of having no real prospect of success, and in fact, no prospect of success.
While the court could appoint Mr B as the substitute party, his case then is in that position as having no reasonable prospect of success.
I will dismiss his application and consequently I will dismiss the wife’s application.
I now need to address this application.
The evidence is in a form where it should have been apparent to the solicitor for the wife and Mr B that it should never have been filed, or at least particularised or withdrawn after the evidence of the husband was filed.
It is permissible, and required, that the wife and Mr Percival give evidence of those issues going to an alteration of property interests, but it is not permissible to simply allow the litigants to make wild, scandalous and fanciful allegations about the husband, the solicitor Ms N or the husband’s solicitor at the time the settlement conference was held or the woman identified as Ms L, if that is her surname.
It is not the solicitor’s role to merely repeat any and every allegation that a client gives – the role is to represent them and prepare a case with regard to the particular claim the court has jurisdiction to determine.
The role is to assess what a client asserts to be the case, what is asserted as fact, what is mere assertion which requires proof and examine what evidence is available to support facts and assertions and give appropriate advice. Case preparation does not include, as has occurred here, allegations of fraud for which there is simply no basis, or allegations which impugn the character of the other party or other people unless evidence of credit is an issue to be determined or make stupid claims about bankruptcy proceedings. It is called case preparation.
The acts here may amount to unsatisfactory professional conduct with regard to the filing of a case which appears to fall short of the standard of competence and diligence that members of the public, including the litigants being represented, are entitled to reasonably expect, by a reasonably competent solicitor.
This case began with so many unaddressed difficulties, with the parties having been separated for at least 25-26 years and claims of significance, that such was the starting point for the competent collection of facts and assertions and then assessment as to how such would be presented, if at all. It seems to be a case in which the solicitor has allowed the litigants to say what they want instead of presenting a case, and so I will consider referring the solicitor to the Legal Services Commission, but give him 28 days in which to put before the court reasons as to why I should not.
I certify that the preceding one hundred (100) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Coates. Associate:
Dated: 15 December 2022
0
0