Re Byrt (As Litigation Guardian For Eunice Daphne Washington) - [2021] SASC 133

Supreme Court of South Australia

(Civil)

RE BYRT (AS LITIGATION GUARDIAN FOR EUNICE DAPHNE WASHINGTON)

[2021] SASC 133

Judgment of the Honourable Justice Blue

19 November 2021

HEALTH LAW - MENTAL HEALTH GENERALLY - GENERAL LAW AFFECTING PERSONS WITH MENTAL ILLNESS OR IMPAIRED CAPACITY - CONDUCTING LEGAL PROCEEDINGS - LITIGATION GUARDIANS AND NEXT FRIENDS

Reasons for judgment for making an order that the applicant Edward Byrt is advised that he would be justified in continuing the prosecution of Supreme Court of South Australia actions 969 of 2017 and 1070 of 2019.
Mr Byrt is the litigation guardian for Eunice Washington in an action in this Court instituted in 2017 against her daughter Julie Washington (action 969 of 2017). Mr Byrt as litigation guardian for Eunice Washington instituted a second action in this Court in 2019 against Julie Washington and the certain companies (action 1070 of 2019).
In March 2021 the parties attended a mediation, which did not resolve the disputes the subject of the substantive proceedings or other matters. On 5 March 2021 Julie Washington made a without prejudice offer which remains open.
In April 2021 Mr Byrt instituted this action seeking advice and directions with respect to his conduct of the substantive proceedings.
Held:
1 The Court has inherent jurisdiction to give advice and directions to its officers; a litigation guardian is such an officer; and the Court has inherent jurisdiction to give advice and directions to a litigation guardian (at [61]).
2 Particularly taking into account the wishes of Eunice Washington and the funding obtained for the prosecution of the substantive actions, Mr Byrt is advised that he would be justified in continuing the prosecution of the substantive actions (at [89]).

Aged and Infirm Persons’ Property Act 1940 (SA); Inheritance (Family Provision) Act 1972 (SA); Civil Procedure Act 2005 (NSW) s 80, referred to.
Application of Peter Hodges [2021] NSWSC 55; Australian Securities and Investments Commission v Commercial Nominees of Australia Ltd [2002] NSWSC 576; Glazier Holdings Pty Ltd v Australian Men’s Health Pty Ltd (Supreme Court of New South Wales, Young J, 30 April 1998); Jeavons v Chapman (No 2) [2009] SASC 3, considered.

RE BYRT (AS LITIGATION GUARDIAN FOR EUNICE DAPHNE WASHINGTON)

[2021] SASC 133

BLUE J: On 3 September 2021 I made an order that the applicant is advised that he would be justified in continuing the prosecution of Supreme Court of South Australia actions SCCIV-17-969 (the 2017 action) and SCCIV-19-1070 (the 2019 action) and indicated that I would subsequently give reasons. These are my reasons.

Background

The facts set out below are based on the evidence adduced before me in this action, including what appears to be common ground on the face of the pleadings in the 2017 action and the 2019 action (collectively the substantive proceedings). It is possible that some of these facts will be in dispute in the substantive proceedings and obviously the facts relevant to them will be determined on the evidence adduced in them.
Eunice Daphne Washington (Eunice) was born in 1933. She married Lincoln David Washington (Lincoln), who was born in 1930. They had two children: Gary David Washington (Gary), who was born in 1954, and Julie Ann Washington (Julie), who was born in 1955.
Gary is married to Karen Washington (Karen) and they have three children. Julie was previously married to David Ramsay (David) and they have two children.
In 1974 Lincoln and Eunice purchased as joint tenants land at West Lakes and then built a matrimonial home on that land. They lived in the home until January 2017.
In the 1980s Lincoln and Eunice conducted a business that designed and manufactured industrial fans. The business ultimately failed financially.
Titan Poultry Equipment Pty Ltd (Titan Poultry) and Titan Fan Products Australia Pty Ltd (Titan Fan) were incorporated in 1988 and 1990 respectively to design and manufacture industrial fans.
The initial directors of each of Titan Fan and Titan Poultry (collectively the Titan Companies) were Julie and David. Subsequently they were replaced as directors by Lincoln and Eunice. It is Eunice’s case in the substantive proceedings that Lincoln and Eunice were not initially able to act as directors of the Titan Companies due to the failure of their earlier business and this was the reason that Julie and David initially acted as directors.
By 1990 the shareholders of Titan Poultry were Lincoln, Eunice, Julie and David, who each held one ordinary share. Subsequently other classes of shares were issued. In 2005, after Julie and David separated, David transferred his shares to Julie. In 2006 two additional ordinary shares were issued to each of Lincoln and Eunice. By 2006 Lincoln and Eunice between them held 60 per cent of the ordinary shares and Julie held 40 per cent of the ordinary shares.
By 1993 the shareholders of Titan Fan were Lincoln, Eunice, Julie and David. Lincoln and Eunice each held three ordinary shares and Julie and David each held two ordinary shares. Subsequently other classes of shares were issued. In 2005, after Julie and David separated, David transferred his shares to Julie. By 2005 Lincoln and Eunice between them held 60 per cent of the ordinary shares and Julie held 40 per cent of the ordinary shares.
Lincoln worked in the design and manufacturing side of the fan businesses conducted by the Titan Companies. There is a dispute about the extent to which Eunice, Julie and David worked in the businesses over time. However, it is common ground that Julie was effectively in control of the businesses by 2012.
In 1988 Lincoln and Eunice each executed an enduring power of attorney appointing the other as their attorney and, if they could not act as attorney, appointing Gary and Julie as substitute attorneys acting jointly.
In 1995 Lincoln and Eunice established the Washington Superannuation Fund (the Superannuation Fund or the Fund). Lincoln and Eunice were beneficiaries of the Fund. They were the initial trustees of the Fund.
In 1995 the Titan Family Trust (the Titan Trust or the Trust) was established. In 1996, the Titan Trust purchased commercial premises at Gepps Cross and the Titan Companies commenced to carry on their businesses at those premises. The Trust is a discretionary trust, whose eligible beneficiaries include Lincoln and Eunice and their children and grandchildren. Lincoln was the sole appointor of the Trust. The initial trustee of the Trust was Wasram Nominees Pty Ltd, but in 2003 it was replaced by Icelin Nominess Pty Ltd (Icelin). Lincoln and Eunice were the sole directors and shareholders of Icelin.
In 2008/2009 Eunice lent $100,000 to Julie. Julie contends that she made repayments between November 2008 and February 2010 totalling $33,100 and in February 2010 Eunice forgave the balance. Eunice takes issue with these contentions.
In September 2011 Lincoln and Eunice each made a Will appointing the other as sole executor and appointing Gary and Julie jointly as substitute executors. Lincoln’s Will left his estate to Eunice and if she did not survive him left his shares in the Titan Companies and Icelin to Julie and the residue of his estate equally to Gary and Julie. Lincoln’s Will appointed Eunice as appointor of the Titan Trust if she survived him. Eunice’s Will left her estate to Lincoln and if he did not survive her left her shares in the Titan Companies and Icelin to Julie and the residue of her estate equally to Gary and Julie.
In September 2011 Lineun Pty Ltd (Lineun) was appointed trustee of the Superannuation Fund in place of Lincoln and Eunice. Lincoln and Eunice were the sole directors and shareholders of Lineun, which they had incorporated in 2010.
In September 2011 the Constitution of Lineun was amended to entitle a director to nominate a person to be appointed as a director in their place if they suffered a legal incapacity or died. At the same time Lincoln and Eunice each executed nominations of Julie in that event.
In September 2011 Lincoln and Eunice each executed a binding death benefit nomination in respect of their interest as a member of the Superannuation Fund. Lincoln’s death benefit nomination nominated payment of his death benefit to Eunice if she survived him and otherwise it was to be paid into his residuary estate (which, under his Will executed at the same time, was to be distributed equally between Gary and Julie).
At some time between 2000 and 2012 Julie took over control of the operations of the Titan Companies and the Titan Trust. There is a dispute between the parties when this occurred but no dispute that it had occurred by 2012.
In March 2012 Julie caused a document to be lodged with the Australian Securities and Investments Commission (ASIC) recording her appointment as a director of the Titan Companies on 28 February 2012. It is Eunice’s case in the substantive proceedings that Julie was not appointed by the Titan Companies as a director but has purported to act as a director since that time.
Up to 2012 Lincoln, Eunice and Julie received payments of wages and/or dividends or distributions from the Titan Companies and the Titan Trust. Since 2012 Julie alone has received such payments.
Since 2012 Julie assumed control of the financial affairs of Lincoln and Eunice, including operation of their bank accounts, and such monies as they received were provided to them via Julie.
Eunice seeks in the 2017 action an account in common form of monies withdrawn by Julie from ANZ Bank accounts in the name of Eunice or in the joint names of Lincoln and Eunice.
In 2015 Lincoln and Eunice each executed a Codicil to their Will. The effect of the Codicils was that each of Lincoln and Eunice left their shares in the Titan Companies and Icelin to Julie rather than to each other. Lincoln also executed a deed in which he appointed Julie as an additional appointor of the Titan Trust jointly with himself.
It is Eunice’s case in the substantive proceedings that in 2015, when instructions were given for the preparation of these documents and they were executed, Lincoln was suffering from advanced dementia and lacked capacity to execute them and Eunice did not appreciate the relevant effect of the codicils. It is Eunice’s case that instructions for the codicils were given in the presence of Julie to Mellor Olsson, who were also Julie’s solicitors.
In January 2017 Lincoln was admitted to the Queen Elizabeth Hospital and then entered respite care at the Helping Hand Ingle Farm aged care facility (Helping Hand). Eunice joined Lincoln at the facility at the request of Julie to keep him company. Julie negotiated with management at Helping Hand for both Lincoln and Eunice to take up permanent residence at Helping Hand in return for payment of accommodation deposits of approximately $189,000 and $300,000 respectively. Julie accessed funds in the bank accounts of Lincoln and Eunice to pay the accommodation deposits. It is Eunice’s case in the substantive proceedings that she did not wish to take up permanent residence at Helping Hand. It is Eunice’s case that she told Julie that she wished to return to live at her West Lakes house but Julie ignored her requests and ultimately took away her mobile phone.
In May 2017 Julie attended on Lincoln and Eunice at Helping Hand with various documents prepared by her daughter, who was a practising accountant. The documents included resignations by Lincoln as a director of each of the Titan Companies and Icelin and transfers by Lincoln of his shares in each of those three companies to Julie. The documents included resignations by Eunice as a director of each of those three companies. In May 2017 Julie lodged documents at ASIC showing a transfer of Lincoln’s and Eunice’s shares in each company to herself, their cessation as directors and her appointment as a director of Icelin. Julie has not discovered any share transfers executed by Eunice.
It is Eunice’s case in the substantive proceedings that Lincoln and she executed the documents without reading or understanding their contents and under a form of compulsion by Julie. Her case is that in any event Lincoln lacked legal capacity to execute the documents. Her case is that Julie was not appointed by Icelin as a director.
In June 2017 Julie took Eunice to be examined by Dr Rochelle Whelan, who provided a medical report dated 20 June 2017 expressing the opinion that Eunice had been suffering from dementia for some time.
Eunice approached Gary and asked him to take action for her to vacate Helping Hand and reside elsewhere, either at her West Lakes house or at an acceptable retirement community/village.
Eunice engaged Brendan Murray at Norman Waterhouse Lawyers to advise her. In June 2017 Eunice executed a revocation of her existing power of attorney and executed a new power of attorney appointing Gary as her attorney and in July 2017 she executed a new Will removing Julie as a beneficiary.
In August 2017 Eunice left Helping Hand and travelled to Melbourne to visit her granddaughters and, on her return, resided with Gary and Karen at their home and then took up residence at the Victoria Grove retirement estate.
In August 2017 Eunice instituted the 2017 action against Julie. Gary was named as a co-applicant in case it might be decided that Eunice lacked capacity to institute the action. Lincoln was named as a co-respondent because amongst other things orders were sought effectively on his behalf and the appointment of a manager of his assets under the Aged and Infirm Persons’ Property Act 1940 (SA). The orders sought included injunctions against Julie in respect of Eunice and Lincoln and delivery up of Eunice’s mobile phone and jewellery. Gary ceased to be an applicant in the action in September 2018 after the appointment of Mr Byrt as litigation guardian in August 2018 and Lincoln ceased to be a respondent in the action after his death in August 2018.
In September 2017 Lincoln purportedly executed a new binding death benefit nomination revoking his earlier binding death benefit nomination in favour of Eunice and in default his residuary estate and instead nominating payment of his death benefit from the Superannuation Fund to Julie. It is Eunice’s case in the substantive proceedings that Lincoln lacked legal capacity to execute this document.
In September 2017 Lincoln purportedly executed a revocation of his 1988 power of attorney appointing Eunice as his attorney and in default Gary and Julie jointly and a new power of attorney appointing Julie as his attorney.
In November 2017 Julie sought, amongst other things, an order appointing a litigation guardian to represent Eunice’s interests in the 2017 action on the ground that she was suffering from advanced dementia.
In April 2018 Lincoln purportedly severed the joint interest in the West Lakes property. Eunice contends that Lincoln lacked legal capacity to take this action.
On 19 August 2018 Lincoln died.
On 31 August 2018 a Master made an order in the 2017 action that Mr Byrt “is appointed Litigation Guardian of the first plaintiff [Eunice]”.
In January 2019 Dr Ramon Mocellin, a consultant psychogeriatrician and neuropsychiatrist, provided an expert report in which he expressed the opinion that Eunice has at no time suffered from dementia. In March 2019 Professor Matthew McDonald, a neurosurgeon, expressed a similar opinion. They provided further reports to similar effect in June 2019 and September 2019 respectively. Professor McDonald expressed the opinion that the symptoms that had been exhibited by Eunice were the result of hydrocephalus and it is Eunice’s case that Dr Whelan in June 2017 had misdiagnosed this as dementia.
In September 2019 Mr Byrt instituted the 2019 action as litigation guardian for Eunice.
In December 2019 Julie filed a counterclaim in the 2019 action seeking amongst other things a pronouncement for Lincoln’s 2011 Will and 2015 Codicil; declarations that in 2017 Lincoln and Eunice held their shares in the Titan Companies and Icelin on constructive trust for Julie and in May 2017 they transferred those shares to Julie; and an order restraining Eunice from revoking her 2011 Will or 2015 Codicil.
In April 2020 Dr Sara Lucas, a clinical neuropsychologist, provided an expert report in which she expressed the opinion that Lincoln had been suffering from advanced dementia since 2013.
In or before May 2020 settlement of the sale of the West Lakes property occurred. As a result of Julie having foreshadowed a claim against Lincoln’s estate under the Inheritance (Family Provision) Act 1972 (SA), in May 2020 Eunice paid into court half of the net proceeds of the sale being approximately $378,000.
In June 2020 Dr Emma Fitzgerald, a clinical neuropsychologist chosen by Julie, expressed the opinion that Eunice was not suffering from dementia and was able to conduct her own affairs.
In July 2020 Lincoln’s death benefit totalling $286,290 was paid to Eunice.
In February 2021 Julie filed affidavits by nine persons including family friends and professional persons addressing their observations of Lincoln and in some cases expressing an opinion that their observations were consistent with his having legal capacity.
In March 2021 the parties attended a mediation, which did not resolve the disputes the subject of the substantive proceedings or other matters. This was the third mediation between the parties, following earlier unsuccessful mediations in June/August 2019 and May 2020.
On 5 March 2021 Julie made a without prejudice offer which remains open and is relevant to Mr Byrt’s application for advice. I do not disclose its content given its privileged status.
In April 2021 Mr Byrt instituted this action seeking advice and directions with respect to his conduct of the substantive proceedings.

The hearing

The hearing of Mr Byrt’s application was conducted in closed court because it involved the provision to the Court of information which is necessarily confidential in relation to the substantive proceedings as against Julie.
I received seven affidavits by Mr Murray, who has the principal conduct of the substantive proceedings on behalf of Mr Byrt and Eunice; one affidavit by Simon Ower QC, senior counsel briefed by Mr Murray in the substantive proceedings and one affidavit by each of Gary and Karen. Mr Ower’s affidavit exhibited opinions by him in relation to the substantive proceedings.
I heard submissions from senior counsel for Mr Byrt and also heard directly from Eunice, Gary and Karen.

Power to give advice

Mr Byrt relies on the equitable or inherent jurisdiction of the Supreme Court to give advice and directions to its appointed officers.
In Glazier Holdings Pty Ltd v Australian Men’s Health Pty Ltd Mr Madden was appointed by the Supreme Court as receiver of the Australian Men’s Health Unit Trust. He sought advice and directions from the Court whether he was justified in entering into a particular agreement. Young J held that the Court has power to give advice and directions to a receiver, who is an officer of the court.
In Australian Securities and Investments Commission v Commercial Nominees of Australia Ltd Barrett J also held that the Court has power to give advice and directions to a receiver appointed by the court, following the decision of Young J in Glazier Holdings Pty Ltd.
In Jeavons v Chapman (No 2) Mr and Mrs Jeavons were appointed by the Court as managers of the protected estate of Mrs Chapman pursuant to section 10 of the Aged and Infirm Persons’ Property Act 1940 (SA). Gray J held that the Court has power to give advice and directions to such managers as they are officers of the court. Gray J said:
There is no express power in the Aged and Infirm Persons’ Property Act permitting a private manager to obtain the advice or direction of the Court. Notwithstanding, Mr and Mrs Jeavons submitted that the Court may give such advice or direction pursuant to s 69 of the Administration and Probate Act 1919 (SA), when read with s 91 of the Trustee Act and s 18 of the Aged and Infirm Persons’ Property Act, and the inherent equitable jurisdiction of the Supreme Court.
It is unnecessary to determine whether the Court’s power to give advice and directions derives from a statutory source, as the inherent equitable jurisdiction of this Court is a sufficient source of such a power. There is a well-recognised jurisdiction which the Court possesses to give advice and direction to its appointed officers. A manager of a protected estate is an officer of the Court, and accordingly may look to the Court for necessary guidance.

A litigation guardian is the title given by the Rules of Court to what the common law calls the protected person’s next friend. It is clearly established that a next friend – in other words a litigation guardian – is an officer of the court. The decisions in Glazier Holdings Pty Ltd v Australian Men’s Health Pty Ltd, Australian Securities and Investments Commission v Commercial Nominees of Australia Ltd and Jeavons v Chapman (No 2) indicate that the Court has power to give advice and directions to a litigation guardian.
In Application of Peter Hodges Mr Hodges had been appointed as tutor (the New South Wales equivalent of a litigation guardian) for Mr Darley. He sought advice and directions whether amongst other things he would be justified in defending an action brought against Mr Darley. Section 80 of the Civil Procedure Act 2005 (NSW) empowered the Court to give directions to a tutor with respect to the tutor’s conduct of proceedings. Kunc J held that the Court had express power under section 80 to give the directions sought and proceeded to give directions. It was therefore not necessary to consider whether the Court would have had inherent jurisdiction to give directions to a tutor. Kunc J at one point in his reasons for judgment expressed the opinion by way of obiter dicta that the inherent jurisdiction of the court did not extend to advise a non-trustee, but at another point said that, given that section 80 was the most obvious source of power, it was unnecessary to consider the Court’s inherent jurisdiction. The decisions of Young J and Barrett J in Glazier Holdings Pty Ltd v Australian Men’s Health Pty Ltd and Australian Securities and Investments Commission v Commercial Nominees of Australia Ltd were apparently not drawn to the attention of Kunc J, or the decision of Gray J in Jeavons v Chapman (No 2). This is perhaps not surprising given that section 80 of the Civil Procedure Act 2005 (NSW) provided such an obvious source of power.
I am satisfied that this Court has inherent jurisdiction to give advice and directions to its officers; a litigation guardian is such an officer; and the Court has inherent jurisdiction to give advice and directions to a litigation guardian.
There is no dispute that Mr Byrt validly acts as litigation guardian for Eunice in the 2017 action. Mr Byrt instituted the 2019 action as litigation guardian for Eunice on the basis that the order made by the Master in August 2018 in the 2017 action appointing Mr Byrt as litigation guardian of Eunice applies to any action instituted on behalf Eunice against Julie and therefore extends to the 2019 action. Julie in her defence in the 2019 action pleads that the order only applies to the 2017 action and does not apply to the 2019 action. Mr Byrt/Eunice in reply plead that the order applies to any action instituted on behalf Eunice against Julie. Julie has not brought an interlocutory application seeking strike out or dismissal of the 2019 action on the ground that it is unauthorised. Julie has also brought a counterclaim against Eunice which is premised on the 2019 action being properly on foot. I do not know whether Mr Byrt’s status as litigation guardian in the 2019 action will be an issue before or at trial. However, given the potential that it will be an issue, I express no opinion about it. The advice and directions given by me to Mr Byrt are premised on Mr Byrt being validly appointed as litigation guardian in respect of the substantive proceedings.

The claims by and against Eunice

Mr Ower QC in his written opinions addressed the prospects of success of the various claims by Eunice and the counterclaims by Julie.

Control of Titan Trust

The financial statements for the Titan Trust for the year ended 30 June 2019, and a balance sheet and profit and loss statement for the year ended 30 June 2021, show that its principal asset is the property at Gepps Cross and it also owns some plant and equipment and motor vehicles. Its only substantial liability is a reported borrowing of approximately $570,000 from Titan Fan. A recent valuation as at August 2021 of the Gepps Cross property by a licensed valuer valued the property at $1.5 million. On its face, the Titan Trust therefore has substantial value.
Before 2015 Lincoln and Eunice were the sole shareholders of Icelin, the trustee of the Titan Trust, Lincoln was the sole appointor and, if he died before Eunice, Lincoln left his shares in Icelin to Eunice. Prospectively, as at the beginning of 2015, upon Lincoln’s death Eunice would become the sole shareholder and director of Icelin and hence have sole control of the Titan Trust.
Eunice’s case in the substantive proceedings is that she owns or is entitled to 100 per cent of the shares in Icelin and is entitled to control of the Titan Trust. This in turn rests upon three cumulative propositions:
1 Lincoln’s and Eunice’s shares in Icelin were not validly transferred to Julie in May 2017.
2 Lincoln’s 2015 Codicil leaving his shares in Icelin to Julie is not valid.
3 Lincoln’s 2015 deed appointing Julie as joint appointor with him in respect of the Titan Trust is not valid or is not effective.
Eunice must succeed on each proposition to be successful overall in respect of control of the Titan Trust.
Eunice’s case in respect of the May 2017 transfers is that her own shares were not transferred to Julie because Julie has been unable to produce a signed share transfer. Eunice’s case in respect of Lincoln’s transfer, and her alternative case in respect of her own transfer, is that the transfers were effectively non est factum or the result of undue influence or unconscionable conduct by Julie. She contends that in the circumstances the onus of proof in relation to undue influence lies on Julie and that Julie will be unable to discharge that onus.
Eunice’s case in respect of Lincoln’s 2015 Codicil is that Lincoln lacked testamentary capacity or alternatively did not know of and approve its contents. Eunice contends that a doubt as to capacity arises as a result of Dr Lucas’ report, the onus of proving capacity will therefore lie on Julie and she will be unable to discharge that onus. Eunice contends that a well-founded suspicion as to Lincoln’s knowledge and approval of the contents of the Codicil arises as a result of Dr Lucas’ report, the onus of proving knowledge and approval will therefore lie on Julie and she will be unable to discharge that onus. In this respect, in addition to referring to Dr Lucas’ report, Mr Byrt drew my attention to affidavits filed by Julie in the 2019 action from persons who may be called as witnesses to attest to Lincoln’s knowledge and capacity.
Eunice’s case in respect of the 2015 deed appointing Julie as joint appointor with him in respect of the Titan Trust is that, on the death of one joint appointor, the power of appointment is terminated; in the alternative Lincoln lacked legal capacity to make the deed; and in the further alternative its execution was the result of undue influence or unconscionable conduct by Julie.
Julie in her counterclaim seeks a declaration that in 2017 Lincoln and Eunice held their shares in Icelin on constructive trust for her. If she succeeds on that counterclaim, Eunice will fail in obtaining control of the Titan Trust.

Ownership of Titan Companies

The financial statements for Titan Fan for the year ended 30 June 2019 show that its principal asset is a loan of approximately $570,000 to Icelin Nominees Pty Ltd (trustee of the Titan Trust). Its liabilities exceeded the balance of its assets (excluding the Icelin loan) by about $200,000. They show losses for the years ended 30 June 2015 to 30 June 2019 but management accounts for the year ended 30 June 2021 imply a small profit in the year ended 30 June 2020 and a more significant profit for the year ended 30 June 2021. These accounts suggest that the value of the shares in Titan Fan is significant but probably less than the value of the assets of the Titan Trust.
The financial statements for Titan Poultry for the year ended 30 June 2019 show that its principal asset is cash of approximately $115,000, it had net assets of approximately $100,000 and it did not trade. Management accounts for the year ended 30 June 2021 show that it still does not trade and its net assets are now approximately $55,000 (principally as a result of legal fees). These accounts suggest that the value of the shares in Titan Poultry is relatively insignificant.
Before 2015 Lincoln and Eunice were 60 per cent shareholders of the Titan Companies, and, if he died before Eunice, Lincoln left his shares in the Titan Companies to Eunice.
Eunice’s case in the substantive proceedings is that she owns or is entitled to 60 per cent of the ordinary shares in the Titan Companies (and hence would be entitled to control of them). This in turn rests upon two cumulative propositions:
1 Lincoln’s and Eunice’s shares in the Titan Companies were not validly transferred to Julie in May 2017.
2 As to Lincoln’s 30 per cent share only, Lincoln’s 2015 Codicil leaving his shares in the Titan Companies to Julie is not valid.
Eunice must succeed on each proposition to be successful overall in respect of Lincoln’s 30 per cent share and must succeed on the first proposition in respect of her own 30 per cent share.
Eunice’s case in respect of the May 2017 transfers is the same as in respect of the transfers of the shares in Icelin.
Eunice’s case in respect of Lincoln’s 2015 Codicil is the same as in respect of the shares in Icelin.
Julie in her counterclaim seeks a declaration that in 2017 Lincoln and Eunice held their shares in the Titan Companies on constructive trust for her. If she succeeds on that counterclaim, Eunice will fail in respect of the Titan Companies.

Other claims

There is no dispute about the existence of the $100,000 loan by Eunice to Julie in 2008/2009. Julie has pleaded partial repayments totalling $33,100 but it appears that to date she has not discovered any documentary or objective evidence of such repayments. Julie has also pleaded an agreement by Eunice to forgive the loan and it appears that to date she has not discovered any documentary or objective evidence of such forgiveness. These issues will apparently turn on an assessment of Julie’s credit.
Eunice seeks an account in respect of withdrawals from her (or joint) ANZ Bank accounts. There appear to be substantial withdrawals. There are two issues: first whether Julie is an accounting party and ought to be ordered to provide an account; and secondly, what might be the result of the account.
There is pleaded by Eunice a claim for payment of $80,000 but that claim is the subject of a compromise agreement reached between the parties in February 2021.
Eunice has not presently pleaded, but intends to plead, a claim to monies held in safety deposit boxes held by the National Australia Bank registered in the name of Julie and containing cash totalling approximately $187,000.
Conversely, Julie has not presently pleaded, but may well plead a claim to Lincoln’s death benefit that has been paid by the Superannuation Fund to Eunice being approximately $286,000 (based amongst other things on Lincoln’s purported September 2017 binding death benefit nomination).
Julie has also foreshadowed the possible bringing of a claim for provision or further provision out of Lincoln’s estate pursuant to the Inheritance (Family Provision) Act 1972 (SA). The time to bring such a claim only commences on the grant of probate or letters of administration, which has not yet occurred.

Consideration

The theoretical options available to Mr Byrt at the present time are either to continue to prosecute the substantive proceedings or to accept the March 2021 offer made by Julie. The choice between these options is informed by an assessment of prospects of success of the various claims and counterclaims, the likelihood of recovery if Eunice is successful, the costs (direct and indirect financial costs and non-financial costs) of prosecuting the substantive proceedings and the wishes of Eunice.
When Mr Byrt instituted this action seeking advice and directions, it was not apparent that Eunice had sufficient assets under her control to continue to fund the litigation to the end of a trial. However, subsequently Gary and Karen have formally agreed to provide non-recourse funding (that is, by way of gift) of future legal costs and indemnify Mr Byrt against any costs liability incurred by him to Julie in the litigation.
Based on the material provided to me and Eunice’s statements to me at the hearing, I am satisfied that it is Eunice’s clear wish to continue to prosecute the substantive proceedings and not to accept Julie’s March 2021 offer.
I have taken into account Mr Ower’s assessment of the various prospects of success and recovery and of the value of those prospects compared to the value of acceptance of Julie’s March 2021 offer and my own (albeit limited) assessment of those matters. I do not disclose the details of these matters because they are confidential. I have given substantial weight to Eunice’s wishes and the fact that funding to prosecute the substantive proceedings is now assured. In all the circumstances, this is an appropriate case in which the Court should give advice and direction to Mr Byrt that he would be justified in continuing the prosecution of the substantive proceedings.