Re Butler; Kenny v Butler - [2021] VSC 350

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST

S ECI 2020 00115

IN THE MATTER of an application under Order 54.02 of the Supreme Court (General Civil Procedure) Rules 2015
and
IN THE MATTER of the will and estate of ERNEST EDWARD BUTLER, deceased
DALLAS WILLIAM ROSSITER KENNY and others according to the attached schedule	Plaintiffs
v
TREVOR EDWARD BUTLER (who is sued as the executor of the will of ERNEST EDWARD BUTLER, deceased, and personally)	Defendant

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	18 June 2021
CASE MAY BE CITED AS:	Re Butler; Kenny v Butler
MEDIUM NEUTRAL CITATION:	[2021] VSC 350

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CONTRACT – Construction of terms of settlement – Whether probate of informal will was condition precedent – Consequence of non-fulfilment of condition precedent – Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 – Mount Bruce Mining v Wright Prospecting Pty Ltd 256 CLR 104.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N Doukas	Vinci Solicitors & Conveyancers
For the Defendant	Mr J W McCoy	Casey Business Lawyers Pty Ltd

HER HONOUR:

Introduction

Edward Ernest Butler (‘the deceased’) died on 31 July 2016, leaving a will dated 16 December 2005 (‘the 2005 will’) and an unsigned will purportedly drafted in accordance with instructions given to his solicitor on 5 July 2016 (‘the informal will’).

The deceased was survived by the defendant (his son) and the plaintiff’s (three grandchildren from his daughter who predeceased him). Under the terms of the 2005 will, the defendant and the plaintiffs were to each receive half the residuary estate. Under the terms of the informal will, the defendant was to receive the whole residuary estate and the plaintiffs were to receive nothing.

On 9 October 2018, the defendant sought a grant of probate of the informal will. The plaintiffs filed a caveat objecting to the making of that grant.

On 8 April 2019, the parties signed terms of settlement (‘the terms of settlement’), as detailed below. The plaintiffs subsequently removed their caveat.

On 18 September 2019, the Registrar of Probates refused the defendant’s application for a grant of probate of the informal will.

On 20 November 2019, the defendant subsequently obtained a grant of probate of the 2005 will.[1] In support of his application for a grant of probate of the 2005 will, the defendant undertook to distribute the estate in accordance with the terms of settlement.
[1]With leave reserved to another named executor, Anthony John Mahon.

On 22 November 2019, the plaintiffs lodged a caveat against the deceased’s property.

Plaintiffs’ application

By originating motion filed 13 January 2020, the plaintiffs seek declarations pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘the Rules’) to the effect that:

(a) the terms of settlement are no longer extant but lapsed on the refusal of the Registrar to admit the informal will to probate, or alternatively,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] VSC 350
Decision Date: 18 June 2021

CaseChat Overview and Summary

The case of Re Butler; Kenny v Butler involved a dispute regarding the terms of a settlement agreement between the parties. The matter was before the court to determine the enforceability of the settlement in light of the failure to meet a particular condition precedent. The High Court of Australia was tasked with interpreting the terms of the settlement and the consequences of the non-fulfilment of a condition precedent, drawing upon previous decisions such as Perri v Coolangatta Investments Pty Ltd and Mount Bruce Mining v Wright Prospecting Pty Ltd.

The primary legal issue before the court was whether the probate of an informal will constituted a condition precedent to the enforceability of the settlement agreement. If such a condition existed, the court had to determine the consequences of its non-fulfilment. This involved a careful analysis of the language used in the settlement agreement and an examination of relevant precedents that addressed the enforceability of agreements subject to conditions precedent.

The court examined the terms of the settlement agreement and concluded that the probate of the informal will was indeed a condition precedent. It was determined that the condition precedent was not satisfied, and therefore, the settlement agreement was not enforceable. The court referenced previous decisions to support its reasoning, highlighting that when a condition precedent is not met, the agreement remains unenforceable unless the parties expressly or impliedly agree otherwise. The court's decision underscored the importance of clearly articulating conditions precedent in settlement agreements to avoid ambiguity and potential disputes.

As a result of the court's findings, the settlement agreement was deemed unenforceable due to the non-fulfilment of the condition precedent. The court's decision provided clarity on the enforceability of such agreements and reinforced the necessity of precise drafting in settlement documents. The final orders reflected the court's determination, affirming that the parties were not bound by the terms of the settlement agreement in question.

Orders