Re DeBruin
[2019] VSC 813
•10 December 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S ECI 2019 03537
IN THE MATTER of the will and estate of EDNA JEAN DEBRUIN, deceased
- and -
IN THE MATTER of an application pursuant to s 30(3) of the Administration and Probate Act 1958
| MAUREEN FRANCES ELLIS AND PAMELA JOY MCFAYDEN (as administrators of the estate of EDNA JEAN DEBRUIN, deceased) | Plaintiffs |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 6 September 2019 |
DATE OF JUDGMENT: | 10 December 2019 |
CASE MAY BE CITED AS: | Re DeBruin |
MEDIUM NEUTRAL CITATION: | [2019] VSC 813 |
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WILLS AND ESTATES – Where administrators of estate seek orders enabling them to distribute estate without regard to asserted claims – Administration and Probate Act 1958 (Vic) s 30.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr PD Reynolds | AIF Lucas & Co |
HER HONOUR:
Introduction
Edna Jean DeBruin (‘the deceased’) died on 30 June 2003 without leaving a will. At her death, the deceased’s principal asset was her property at 2 Clifford Grove, Healesville. The deceased was survived by her sisters, Maureen Frances Ellis and Pamela Joy McFayden (‘the plaintiffs’).
On 26 September 2017, the plaintiffs were granted letters of administration of the deceased’s estate. In her affidavit sworn on 30 July 2019 the first plaintiff deposed that, at the date of the grant, the Healesville property was valued at $326,000. The current value of the estate is $223,821.10.
The plaintiffs have notice of two claims that have been or may be made against the estate of the deceased. The first is by Mr Kevin Lawrence Archibald. Mr Archibald alleges that he was the unregistered domestic partner of the deceased at the time of her death. He informed the plaintiffs that he claims an interest in her estate on the basis of that relationship. The second claim is by Mr Archibald’s sister, Mary Terese Archibald. She claims that the estate owes her $18,000 on the basis of two loans alleged to have been made by her to Mr Archibald and the deceased during the deceased’s lifetime.
On 16 January 2019, the plaintiffs served notice pursuant to s 30 of the Administration and Probate Act 1958 (‘the Act’) upon each of Mr Archibald and Ms Archibald, requiring them to make any claim or issue any proceeding in relation to the estate of the deceased within three months of that date.
Plaintiffs’ application
By originating motion filed 6 August 2019, the plaintiffs seek, pursuant to s 30(3) of the Act, orders that the claims of Mr and Ms Archibald against the deceased’s estate be for all purposes barred, and that the plaintiffs be authorised to distribute the deceased’s estate without regard to their claims.
The originating motion, summons and the affidavit in support sworn by the first plaintiff on 30 July 2019 were personally served upon Mr Archibald on 22 August 2019 and upon Ms Archibald on 19 August 2019. No formal claim or proceeding has been issued by either Mr Archibald or Ms Archibald in relation the deceased’s estate.
Applicable legislation
Section 30 of the Act provides for a procedure whereby executors or administrators may serve notice upon a claimant as follows:
(1)A personal representative, having notice, whether under the provisions of section thirty-three of the Trustee Act 1958 or otherwise, that any claim has been or may be made against the estate of which he is the personal representative, may serve upon any person making or possibly entitled to make such claim a notice requiring such person to take within a period of three months from the date of receiving such notice all proceedings proper to enforce or to establish such claim and to duly prosecute the same.
(2)After the expiration of the said period of three months such personal representative may apply to the Court for an order to some such effect as hereinafter in this section mentioned.
(3)Upon the hearing of such application the Court, if not satisfied that such proceedings as aforesaid have been taken and are being duly prosecuted, may—
(a) order that the said period be extended; or
(b)order that the claim of any person so served with notice of the application be for all purposes barred; or
(c)make any further or other order enabling the estate to be distributed or dealt with without regard to the claim; and
(d)in any case impose such conditions and give such directions including a direction as to the payment of the costs of or incidental to the application as to the Court seems just.
This provision entitles a personal representative with notice of a claim to be made against the estate to serve upon a potential claimant a notice requiring that person to take within three months all proceedings proper to enforce or establish the claim and duly prosecute it.
Once that time has expired, the personal representative may make an application to the Court. If the Court is satisfied that those proceedings have been taken and are being duly prosecuted, it may order the three month period be extended. Alternatively, the Court may order that the claim of any person so served with the notice of the application be barred and make any further or other orders enabling the estate to be distributed or dealt with without regard to the claim.[1]
[1]See, eg, Re Barber deceased [1924] VLR 123, where an extension of time was granted.
Section 33 of the Trustee Act 1958, referred to in s 30 above, provides a parallel mechanism whereby a personal representative may publish an advertisement requiring a person with a claim against an estate to send particulars of that claim within the time fixed in the notice. A personal representative is entitled to serve a notice pursuant to s 30 of the Act upon a person whether having notice of the claim under s 33 of the Trustee Act 1958 or otherwise.
A claim made against the estate includes not only a claim by a creditor but also a claim by a next of kin or a legatee.[2] In Re Keating, the Court was concerned with s 30A of the Act, which is in similar terms to s 30 but relates to the powers of State Trustees Ltd.[3] In Re Keating, the Court followed Re Walker, where it was held that the provisions ‘should be treated as applicable to persons claiming to be legatees, as well as to those who claim to be creditors or next-of-kin’.[4]
[2]See, eg, Newton v Sherry (1876) 1 CPD 246 in relation to a next of kin; Re Walker (1943) 43 SR (NSW) 305 in relation to a legatee.
[3][2015] VSC 371 (McMillan J).
[4](1943) 43 SR (NSW) 305, 307 (Nicholas CJ), quoted in Re Keating [2015] VSC 371, [15].
Consideration
Mr Archibald’s claim is made on the basis that he is the next of kin of the deceased. Ms Archibald’s claim is made in the basis that she is a creditor of the estate.
Mr Archibald
Mr Archibald took no steps to administer the deceased’s estate on her death in 2003 or thereafter. Following service of the notice, Mr Archibald was well aware that it required him to issue proceedings to establish his claim. He made frequent contact with the plaintiffs and their solicitors and made numerous threats and other menacing statements towards them, as detailed in the first plaintiff’s affidavit.[5] At no time did he issue a proceeding to establish his claim within the time specified in the notice. In his final letter to the plaintiffs’ solicitors dated 26 April 2019, he stated that he did not propose to go any further and he was ‘too weary to pursue the matter’.[6]
[5]Affidavit of first defendant sworn 30 July 2019, paragraph 46 (d), (e), (l), (p), (q), (r), (t), (u), and (w).
[6]Affidavit of first defendant sworn 30 July 2019, paragraph 46(jj).
Mr Archibald’s decision was reiterated in his subsequent written communications to the Court. On the return of the plaintiffs’ application on 6 September 2019 Mr Archibald appeared in person. The Court informed him that if he wished to make any submissions, he should forward them to the Court.
By email dated 18 September 2019, Mr Archibald informed the Court that he was the de facto of the deceased and that he had looked after her for over five years. Among other matters, he stated that he was ‘not really interested in gaining any material benefit’ from the deceased’s death and that he did not make a claim against her estate ‘simply because I wasn’t capable as I wasn’t well.’
In a subsequent email dated 10 October 2019, Mr Archibald asked the Court’s Registry lawyer to ensure that the content of his email ‘makes it to the file for Justice McMillan to see’. In that email, Mr Archibald explained his relationship with the deceased. He also sent a medical certificate concerning his health for the Court to take into account when considering his circumstances.
Ms Archibald
As stated, Ms Archibald claims that the estate owes her the sum of $18,000, being two amounts lent by her to the deceased and Mr Archibald. She alleges that the loans were made to the deceased and Mr Archibald on 22 October 2001 and 13 November 2002 respectively.
Following service of the notice upon Ms Archibald, lengthy correspondence was exchanged between Ms Archibald and the plaintiffs’ solicitors, which was deposed to by the first plaintiff in her affidavit.[7]
[7]Affidavit of first defendant sworn 30 July 2019, paragraph 48.
By letter dated 21 January 2019, the plaintiffs’ solicitors informed Ms Archibald that the notice required her to issue proceedings in order to establish her claims and referred her to the decision of Ludwig v Public Trustee.[8] Ms Archibald’s solicitors, Oates Rennick & Associates, responded by letter to the plaintiffs’ solicitors dated 9 April 2019. That letter purported to substantiate Ms Archibald’s claim and stated that the issues should be dealt with without recourse to litigation. They said that in an attempt to resolve the matter in an expedient manner, Ms Archibald had committed herself to an attached affidavit to support her claim. In a response dated 15 April 2019, the plaintiffs’ solicitors stated that Ms Archibald’s claims against the estate were statute barred. The letter further stated that, in any event, Ms Archibald’s claims did not appear to be supported by evidence that the deceased was a party to the loan alleged to have been made on 13 November 2002 and, in respect of the alleged loan made on 22 October 2001, even if the amount was lent jointly, any liability on the part of the deceased would have passed to Mr Archibald upon her death. Ms Archibald did not respond to this letter and did not issue proceedings in respect of her claims.
[8](2006) 68 NSWLR 890.
On 4 September 2019, Ms Archibald sent an email to the Court indicating that she would not be able to attend the hearing listed at 10.00am on 6 September 2019. Ms Archibald requested that the hearing be rescheduled to around 2.30pm or to another date. The Court informed Ms Archibald that it was unlikely that the Court would be sitting in the afternoon on that day and that the proceeding would be called in the usual course of the list from 10.00am. In the circumstances, the Court invited Ms Archibald to provide any comments to the Court by email.
By email sent at 4.46pm on 6 September 2019, Ms Archibald stated that she had placed before the Court a request for payment of a loan of $18,000 from the estate as ‘formalised in an affidavit in support of claim for debt from estate’ prepared by her solicitor, Ms Rennick, on 9 April 2019. Ms Archibald stated that she provided what she believed to be supportive evidence that the loan of $18,000 was made to both Mr Archibald and the deceased. Ms Archibald wrote that on 9 April 2019 the plaintiffs’ solicitor refused her claim against the estate on the grounds of ‘insupportable evidence’ and that the claim was statute barred. Ms Archibald stated that the matter was initially raised with the plaintiffs’ solicitor on 17 April 2017 when she outlined to him the ‘context in which the debt was given’ and said the first cheque of $15,000 was given to both of Mr Archibald and the deceased on 22 October 2001 and a further payment of $3,000 was made on 13 November 2002.
By email dated 16 September 2019, Ms Rennick enquired of the Court as to the status of the proceeding. In response on the same date, the Court informed Ms Rennick that her client’s correspondence was being considered with orders to be made in due course.
The purpose of the s 30 provisions was explained by Campbell J in Ludwig v Public Trustee, in the context of the New South Wales equivalent of the legislation as it existed at the time.[9] Campbell J stated that the procedure enables an executor or administrator to bring to a head any unresolved claims of which he or she has notice.[10] His Honour referred to the Victorian parliamentary debates, in which Sir John Mackey (who proposed the Victorian legislation) identified the mischief that the procedure was designed to address:
They give notice of their claims, but will not prove them, in the hope that by that means the executor or the administrator will be induced to make some compromise with them. It almost amounts to a blackmailing proceeding. … He will not take any steps to prove it, and the executors will have to wait for six years to pass for the claim to be barred. In the meantime the beneficiaries have to do without the property.[11]
[9](2006) 68 NSWLR 69.
[10]Ibid, 77 [272].
[11]Victoria, Parliamentary Debates, Legislative Assembly, 19 October 1911, 2023 (Sir John Mackey), quoted in Ludwig v Public Trustee (2006) 68 NSWLR 69, 77 [272]-[273].
After personal service of the notice, both Mr Archibald and Ms Archibald were well aware that if they wished to prosecute their claims it was necessary for them to issue proceedings to establish them. While Mr Archibald engaged in some threatening and menacing conduct, he communicated to the plaintiffs’ solicitors in April 2019 and then to the Court that he would not issue a proceeding. Ms Archibald was represented by solicitors and she forwarded an affidavit setting out her claims against the estate. The letter from the plaintiffs’ solicitors dated 16 April 2019, which set out the reasons for denying her claims and specifically referred her to Ludwig v Public Trustee, explained that she was required to issue proceedings. Despite this, she did not issue a claim and appeared to have adopted the very position that the legislation was designed to prevent.
In the circumstances, the Court will make the orders sought by the plaintiffs as follows:
(a) the claims of Kevin Lawrence Archibald and Mary Terese Archibald against the estate of Edna Jean DeBruin, deceased, be for all purposes barred;
(b) the plaintiffs be authorised to distribute the estate of Edna Jean DeBruin, deceased, without regard to the claims of Kevin Lawrence Archibald and Mary Terese Archibald; and
(c) the costs of the application be paid out of the estate of Edna Jean DeBruin deceased.
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