Re Winter-Cooke

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TESTATORS FAMILY MAINTENANCE LIST

S CI 2016 00704

IN THE MATTER of Part IV of the Administration and Probate Act 1958 (Vic) and IN THE MATTER of the WILL AND ESTATE OF SAMUEL ROBERT WINTER-COOKE deceased

-and-

IN THE MATTER of the Administration and Probate Act 1958 (Vic) and IN THE MATTER of the WILL AND ESTATE OF MARCIA WILSHIRE WINTER-COOKE deceased

-and

IN THE MATTER of s 175 of the Corporations Act 2001 (Cth)

ROBERT EDMUND WINTER-COOKE	Plaintiff
v
SAMUEL MARCUS WINTER-COOKE (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) and others according to the attached schedule	Defendants

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	10 June 2020
DATE OF JUDGMENT:	11 September 2020
CASE MAY BE CITED AS:	Re Winter-Cooke
MEDIUM NEUTRAL CITATION:	[2020] VSC 588

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SUMMARY DISMISSAL – Application for summary judgment of plaintiff’s application to commence testators family maintenance proceeding out of time – Where plaintiff and defendants previously executed deeds of compromise – Effect of deeds of compromise on plaintiff’s claim – Whether deeds enforceable – Unconscionable conduct – Undue influence – Whether plaintiff has no real prospect of success – Application for summary dismissal dismissed – Civil Procedure Act 2010 (Vic) ss 63, 64 – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27 – Bartlett v Coomber [2008] NSWCA 100 – Daebritz v Gandy [2001] WASC 45 – Lieberman v Morris (1944) 69 CLR 69 – Thorne v Kennedy (2017) 263 CLR 85.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Ryan QC and Mr M McKenzie	Constable Connor & Co Pty Ltd
For the Defendants	Mr R Wells	Kathy Wilson Legal

HER HONOUR:

Samuel Robert Winter-Cooke (‘the deceased’) died on 7 January 2008. He was survived by his wife, Catharine, and his four children: Samuel Marcus Winter-Cooke (‘Marcus’), Philippa Risby, Robert Winter-Cooke (‘the plaintiff’) and Arbella Winter-Cooke. Probate was granted to Marcus, Catharine and Philippa as executors and trustees of the deceased’s estate on 8 April 2009. At that time, the estate was estimated to have a value of $6,693,214.

By originating motion filed 26 February 2016, the plaintiff commenced this proceeding seeking, inter alia:

(a) an extension of time to bring an application for further provision from the deceased’s estate, pursuant to Part IV of the Administration and Probate Act 1958 (Vic) (‘the Act’);

(b) further provision from the deceased’s estate;

(c) an account of profits of the Murndal partnership, of which Marcia Wilshire Winter-Cooke (‘Marcia’) was a partner;

(d) an order pursuant to the Corporations Act 2001 (Cth) that the register of Winter Cooke (Murndal) Pty Ltd (‘the company’) be amended to register his entitlement to the shares in the company held by Marcia, his paternal grandmother, who died on 7 October 1990; and

(e) costs.

Samuel, Catharine and Philippa (‘the defendants’) have actively defended the proceeding as executors and trustees of the deceased’s estate. The company is the fourth defendant.

The relief sought by the plaintiff at 2(d) above concerning Marcia’s estate is no longer pursued.

Pursuant to ss 62 and 63 of the Civil Procedure Act 2010 (‘the CPA’), the defendants now seek to reinstate an earlier application for summary dismissal of the remainder of the proceeding.

Background

The members of the Winter-Cooke family have been part of a farming enterprise (‘the Murndal partnership’) over many years. At the core of the enterprise is a grazing property known as ‘Murndal’ near Hamilton. The company is the registered proprietor of Murndal and also a member of the Murndal partnership. The company was incorporated in 1953 and has 45,005 fully paid shares. At the time of the deceased’s death, the directors of the company were the deceased, Marcus and Catharine. The deceased held 40,005 shares in the company and Marcus held the remaining 5,000.

The Murndal partnership commenced in 1953. Marcia was a partner until her death. At the time of the deceased’s death, the Murndal partnership comprised the company, the deceased, Catharine, Marcus, and Marcus’s wife, Julia.

Marcia died in 1990. Her will appointed the deceased as the executor of her estate, and, after leaving small pecuniary legacies, the residue of her estate passed to the plaintiff. A disputed issue was whether her estate included a parcel of shares in the company. This formed the basis of the part of the proceeding that the plaintiff has since discontinued. Marcia’s estate chiefly comprised her interest in the Murndal partnership, estimated to have a value of $211,864. Regarding the distribution of Marcia’s estate, in 1994, the plaintiff entered into a loan agreement with the deceased, Catharine, Marcus and the company whereby $187,362 was to be paid to the plaintiff in instalments with interest. In 1997, at the instigation of the plaintiff, arrangements were made for the balance of the loan to be paid out.

In the lifetime of the deceased, the Murndal homestead contained a number of pieces of valuable artwork. One painting, known as ‘Wannon Falls’, was sold by the deceased in May 2000 to fund the purchase of a property at McIntyre Street, Hamilton. A second painting, referred to as the ‘Pybus painting’, was sold by the deceased to the National Gallery of Victoria in 2003. After costs, the balance of the proceeds of sale of approximately $700,000 became the subject of a discretionary trust (‘the Pybus Trust’). Pybus Pty Ltd was appointed trustee of the discretionary trust and the beneficiaries included the deceased and his family.

The deceased died on 7 January 2008. Probate was granted to the defendants on 8 April 2009. The inventory of assets disclosed the estate comprised the following:

(a) 40,005 shares in the company, valued at approximately $6,460,000;

(b) an account balance in the Murndal partnership of $193,214; and

(c) a motor vehicle valued at approximately $40,000.

The plaintiff disputes these estimates and asserts they are undervalued.

Clause 3 of the deceased’s will directs the defendants to hold his shares in the company and the assets of the Murndal partnership in trust during the life of Catharine, and for the income generated from those interests to be distributed between Catharine, the deceased’s children and the deceased’s grandchildren in such proportions as the defendants see fit. In the event that there is no distribution, the income is to be paid to Catharine. Upon her death, the shares and interest in the Murndal partnership are to be transferred to Marcus, subject to and charged with $100,000 to be paid to the plaintiff. Marcus has five years from the date of this deceased’s death to pay the sum together with interest, payable half-yearly.

Clause 4 of the will devises the deceased’s interest in McIntyre Street, Hamilton to Philippa and Arbella in equal shares, however, that property is not listed in the inventory of assets.

Clause 5 of the will provides that Marcus is to take the residuary estate. Clause 6 concerns the deceased’s wish that Catharine distribute the net proceeds from his life insurance policy to Philippa, Arbella and the plaintiff. Clause 7 states:

I declare that I have made no further provision in this my Will for my son [the plaintiff] as (being one of ten grandchildren of my late mother) he was sole beneficiary of my late mother’s Estate and in addition funds have been made available by myself and my said wife during our lifetimes. As it was the wish of my late father and great-uncle and it is also my wish and desire that the property known as ‘Murndal’ remain viable within the family, it is not possible for me to make any further provision for my said son out of such property.

At least from May 2008, discussions commenced between family members and their legal representatives surrounding both Marcia’s estate and the deceased’s estate. At that time, the solicitors firm, Maddens Lawyers (‘Maddens’), appears to have been representing the plaintiff and Hunter Newns representing the defendants.

In November 2008, a draft deed of family arrangement appears to have been circulated, but never executed.

In 2009, the plaintiff, Catharine, Marcus, Philippa and Arbella received funds from the Pybus Trust. In September that year, three deeds of family arrangement were executed.

The deeds

The first deed primarily relates to the company (‘the first deed’). It is executed by: the defendants as executors and trustees; the company; Catharine, Marcus, Philippa, Arbella and the plaintiff as beneficiaries of the deceased’s estate; and Marcus and his wife, Julia.

Clause 1 provides that, in the event that ‘the whole of the lands’ or shares in the company comprising the distribution to Marcus are sold prior to his sixtieth birthday, then the net proceeds of sale are to be distributed 16.67 per cent to each of Marcus, Julia, Arbella, and Philippa, and 16.66 per cent to each of Robert (or should he die before any sale, to his daughter) and Catharine. Clauses 5 and 6 of the first deed state:

In consideration of the provisions of the Deed of Agreement, the parties agree that they have no entitlement to any order for further provision for their maintenance from the estate of [the deceased].
The parties have each received independent legal advice as to the advantages and disadvantages of executing this Deed and a certificate confirming receipt of such advice in respect of each party is annexed hereto at Schedule 2.

The first deed is signed and dated by the plaintiff, and in Schedule 2 he has also signed a ‘waiver in respect of legal advice’, confirming that he had read the contents of the document and acknowledging that he had received a recommendation from the solicitor of the estate prior to entering the deed that he obtain legal advice, but expressly waived his right to do so. The date affixed beside his signature on the waiver is 24 September 2009.

Schedule 1 of the first deed sets out the assets of the company in a very limited form, listing the certificates of title for the lands owned. It also specifies that ‘the lands’ referred to in clause 1 are 91 per cent of the total land holding.

The first deed also has a third schedule, setting out an additional clause agreed to by the parties by letters during the period that that deed was being executed in counterpart:

The parties have entered into this Deed acknowledging the wishes of [the deceased] as stated at clause 7 of the will dated 26 April 2007 and as follows:
7. ... it is also my wish and desire that the property known as ‘Murndal’ remain viable within the family.

A second deed dated 28 September 2009 was also executed by: the defendants as executors and trustees; Catharine, Marcus, Philippa, the plaintiff and Arbella as beneficiaries; and the company (‘the second deed’). Clause 1 of the second deed provides that the plaintiff and his immediate family are granted a licence to attend Murndal and to be accommodated as guests in the house known as ‘Murndal’ located on the property, for up to five days and any other days agreed to by the defendants. Clause 2 states that the $100,000 payable to the plaintiff in accordance with clause 3 of the deceased’s will is to be paid within 30 days of the date of the second deed. Under clause 3, the plaintiff is to pay his own legal costs, before clause 4 provides:

In consideration of the aforesaid and in consideration of the Deed of Agreement dated 28 September 2009 and the distribution from the Trustee of the Pybus Trust [the plaintiff] agrees that he shall not commence or maintain any application to the Court under Part IV of [the Act] or under any statutory modification or re-enactment of the Act seeking provision from the [deceased’s estate] and he further acknowledges that the provision made for him in accordance with the last will of the deceased and by this Deed and by the Deed of Agreement dated 28 September 2009 and by the distribution he has received from the Pybus Trust amounts to adequate provision for his proper maintenance and support from [the deceased’s estate] and he acknowledges that his entitlements pursuant to the last will of the deceased and this Deed constitute the entirety of his rights to share in the Estate of the deceased on any basis whatsoever and whether pursuant to Will, at law or in equity or pursuant to statute.

Again, an attached ‘waiver of legal of advice’ appears to have been signed and dated by the plaintiff on 24 September 2009. Page three of the second deed has what appears to be a hand-written amendment, adding a seventh clause stating: ‘Provision (1) in Winter-Cooke (Murndal) Pty Ltd deed is amended.’ However the additional clause is also struck through.

A third deed dated 28 September 2009 was also executed, primarily concerning Arbella. The plaintiff deposes that, in it, Arbella released the defendants from any claim in consideration for the amount of $200,000 and confirmed that she had an interest in the McIntyre Street property.

The plaintiff’s evidence

The plaintiff filed four affidavits. The following is a summary of the key evidence upon which he relies.

Marcia’s estate

The plaintiff was initially unaware that he was the residuary beneficiary of Marcia’s estate. He only learned of his interest in 1994 at a family social occasion. When questioned, the deceased confirmed the plaintiff’s interest, but stated that ‘he had no spare cash to pay the benefit and that if [the plaintiff] attempted to take [his] entitlement it would cause harm to the farm’.

Two or three months later, the plaintiff visited Murndal. He deposes that the deceased was angry and uncommunicative about the plaintiff’s interest in Marcia’s estate. In this context, the plaintiff describes the deceased as ‘a very authoritarian man’. At the instigation of the deceased, the following day he and the plaintiff attended the office of Hunter Newns, where the plaintiff signed documents which were not explained to him. A loan agreement dated 6 June 1994 is exhibited in this regard. By the terms of the agreement, $187,362 was to be repaid with interest, in three initial annual instalments of $7,000, then $20,000 annually thereafter.

In 1997, Hunter Newns informed the plaintiff that the firm had received $10,914 from the Murndal partnership, being an instalment of $20,000 less payments made from the partnership on the plaintiff’s behalf. An enclosed list in the hand-writing of the deceased identifies items such as a $5,000 advance to the plaintiff, as well as ‘boots’ and ‘petrol’.

The plaintiff deposes that he became dissatisfied with the scheme of instalment payments as he wanted to invest in real estate. He approached his parents and requested that the balance of the loan be repaid as a lump sum. The deceased and Catharine are said to have agreed on the condition that a deduction of $35,316 be made for interest foregone, and further deductions be made for payments to the plaintiff from the Murndal partnership and by Catharine. Regarding the latter, the plaintiff deposes that he was unaware that his parents were keeping such a tally, and that the $9,000 he paid to Catharine was to account for funds that she had paid him throughout his childhood.

On 12 May 1997, the plaintiff sent a fax to Hunter Newns outlining his proposal for payment of the balance of the loan. The fax is difficult to read, however it refers to: a proposal that the plaintiff wished to put to the Murndal partnership; the financial burden of the payment such that the capital owing would be reduced by ‘the added amount of borrowing the full amount’; and Catharine being ‘reimbursed for the support over the years’.

A variation dated 7 July 1997 was entered into between the plaintiff, the deceased, Catharine, Marcus and the company, by which the plaintiff accepted payment of $109,000 in full settlement of the amount owing under the agreement dated 6 June 1994. The plaintiff states that he agreed to the deductions because he was ‘desperate to obtain a sufficiently large sum to fund the purchase of a unit in Perth’.

Negotiations in 2008

The deceased died in January 2008. After the deceased’s funeral, Catharine gave the plaintiff a copy of the deceased’s will.

In May 2008, Marcus sent an email to Philippa with the subject line ‘Pybus proposal for consideration’. It appears that this email and an attachment were then forwarded to the plaintiff by Philippa, with the body of the email stating ‘Rob and Malcolm, Please find Marcus’ response to my proposal. What now?’. The attachment, written by Marcus, notes the wishes of the deceased to keep Murndal ‘viable’, before stating: ‘it is also my wish. I believe it to be the wish of the broader family. It should be the wish of the executors of my father’s will’. It also states:

Older family members need to be looked after financially (As they currently are) by the partnership. (Not my siblings).

The document then sets out in overview his financial position, the condition of Murndal, including its current debts and future needs for income and capital. The debt associated with the farm is identified as $235,000. The document also notes that ‘three siblings need to be seen to be treated equally’ and proposes that funds from the Pybus Trust could be used to ‘achieve family harmony’.

On 30 May 2008, Philippa emailed the plaintiff. The email commences: ‘Robs, Thank you yet again for your fantastic support and involvement in this difficult and emotional process. You’ve done well with this proposal.’ It then lists ‘input from Flip’, including:

(1)Nail Marcus’ $100,000 to the farming component of Murndal … I am not happy for him to have anything unless it is for the farm.
(2)Any remnant of Mum’s money must be divided equally between P, A and R …
(3)Balance of funds must be divided netween [sic] P, A and R, who can then at their discretion use it for children or farm (not at Mum’s discretion). Don’t forget Marcus is technically benefitting $200,000 from this proposal, significantly more than 25% of the total, as well as inheriting Murndal.

(4) …
(5)This proposal must go through a formal mediation process. Marcus is using a formal legal process to claim the trust. We must use a formal legal process to stop him. This also protects us against Marcus resenting us (particularly me) for forcing him to give up his proposal …

Rung [sic] me, and thanks again for your excellent work,
Flipp.

The plaintiff deposes that prior to signing the first deed and second deed he received a $120,000 distribution from the Pybus Trust. It is his belief that each of Catharine, Marcus, Philippa and Arbella received the same sum.

Execution of the first deed and second deed

According to the plaintiff, after probate was obtained the defendants caused the first deed and the second deed to be prepared. He states that he was ‘under unrelenting pressure from Marcus and Philippa’ to sign the deeds.

Philippa is said to have made over 300 calls to the plaintiff’s mobile phone in the months between the deceased’s death and the execution of the deeds, constantly asserting that Catharine’s health would fail if any type of legal challenge was made to the will. She is said to have screamed over the telephone ‘you don’t need a lawyer, you don’t need a lawyer, just sign the deed’, or words to a similar effect; and made much of her qualifications as a physiotherapist in asserting that Catharine’s heart could fail and any deviation from her instructions could trigger such an event.

The plaintiff deposes that Marcus made it plain that if the plaintiff failed to sign the deeds he would never visit Murndal again. Further:

(a) Marcus intimated that he had a ‘war chest’ to send the plaintiff and his wife broke through aggressive litigation;

(b) the plaintiff was copied into an email from Arbella to Mr Mark Stratmann, of Hunter Newns, dated 2 December 2018 [sic] describing pressure that Marcus had placed upon her;

(c) both Marcus and Philippa made it clear that the $100,000 to be distributed to the plaintiff under the deceased’s will would not be distributed until the plaintiff had signed the deeds.

According to the plaintiff, he was so distressed, he emailed Hunter Newns and pleaded not to be sent any more deeds.

On or about 28 August 2009, Marcus is said to have sold a painting, ‘Murndal in the Early Days’, for $312,000.

The plaintiff also deposes that ‘prior to the Deeds’ he had received many assurances from the defendants that financial distributions from the estate would occur in the future, including for assistance with the education of his daughter.

On 17 September 2009, Hunter Newns wrote to all of the parties to the first deed, noting a proposal that an additional paragraph be included as a provision of the deed. That paragraph appears as Schedule 3 and appears to have been included at the instigation of the plaintiff. On 17 September 2009, the plaintiff replied to the letter of Hunter Newns stating, amongst other things:

I am writing to confirm that I accept the provision to be included in the family deeds as detailed in the attached letter and extracted from clause 7 of my fathers Will dated 26 April 2007.
On the basis that this provision is now included, and with the understanding that this provision follows the express wishes in my fathers will I confirm that I accept the completion of the deeds as executed.

The plaintiff deposes that he endeavoured to procure a further recital to the effect that Murndal remained viable and accessible for the benefit of current and future generations within the family. He believed that the suggested addition would preserve for the deceased’s descendants not residing in the property a reasonable right to make regular visits, and provide income distributions from the estate to the deceased’s children and grandchildren. He sent the clause to Hunter Newns via email and for certainty included it, handwritten, on the second deed that he signed. It was later struck out by the defendants.

According to the plaintiff, he did not seek advice from Maddens regarding any right that he had to challenge the deceased’s will. He was informed by Maddens, without having sought such advice from them, that the will did not make adequate provision for him and that it was possible to consider taking action. Instead of taking that course, the plaintiff states that he was ‘prevailed upon’ by the defendants to follow the process they had initiated and demanded.

After signing the first deed and second deed, the plaintiff received $100,000, which he deposes was paid from Catharine’s distribution from the Pybus Trust.

The plaintiff was never provided with a copy of the third deed, although he requested one. By letter to the plaintiff dated 1 October 2009, Hunter Newns advised that a confidentiality clause was ‘operative in relation to all of the deeds’, preventing the disclosure of the terms of Arbella’s settlement, save and except to the parties named in the documents.

The plaintiff states that all communication with the defendants ended once the first deed and second deed were executed. Further, he says that he would not have followed the deed process if he knew that large sums of money, such as the proceeds of ‘Murndal in the Early Days’, were kept secret. He also deposes that it is his belief that the $200,000 payment to Arbella came from such proceeds.

Subsequent events

On 31 July 2012, Catharine wrote a letter to the plaintiff and Arbella. With reference to a restructure of the Murndal partnership and transfer of assets to a new entity, she stated that ‘she became fully aware of the significance of Clause 3 of Dad’s Will, in that it establishes what is called a Wills Trust’. The letter goes on to provide that ‘the amount still pertaining to [the estate] needs to be treated differently in order to carry out [the deceased’s] wishes that his estate be used for the benefit of all his children’. It then outlines a loan arrangement whereby the estate would loan funds to the new entity, and the interest repaid would be used to fund annual distributions to the four children. A second letter from Catharine dated 20 August 2012 confirmed that it was her intention to distribute the interest from the loan to her four children. The plaintiff has not received any such distributions.

By separate registered letters on 23 November 2012, Marcus wrote to the plaintiff and the plaintiff’s wife stating, amongst other things, ‘in future when planning to visit and stay at Murndal you can plan on staying in the managers quarters’. The plaintiff deposes that the ‘managers quarters’ were a rundown dirty and untidy cottage about 500 metres from the homestead.

On 23 October 2013, Strategic Lawyers wrote to Marcus on behalf of the plaintiff, referring to Marcus’s letter of 23 November 2012 and five telephone calls made to the plaintiff the same day. The letter also noted that the plaintiff did not agree to any changes being made to his right to access Murndal under the second deed and that he would seek to enforce his contractual rights if they were impeded by Marcus.

Plaintiff’s circumstances and needs

The plaintiff is 48 years old. During his childhood, he worked on Murndal during weekends and the school holidays. He also deposes to a five-month period when he was 17 years old during which he worked full time and was paid ‘station hand wages’.

He studied Agricultural and Resources Economics at La Trobe University for a year before he left university and worked various jobs. With some financial assistance from the deceased, he obtained a restricted pilot licence. That assistance was later deducted from the funds paid to the plaintiff in 1997. The plaintiff later obtained a real estate agent’s licence. Since 1999, he has worked at Telstra and is now a senior account executive. During this time, he relocated to Mackay and then Townsville.

The plaintiff married in 2004 and has two adult step-children. His daughter was born in 2006. The plaintiff and his wife own a property in Townsville estimated to have a value of $460,000, encumbered by a mortgage of $360,000. They also have two cars on finance and a shared self-managed superannuation fund of $150,000. The plaintiff also has $50,000 of superannuation with Telstra.

In March and April 2014, the plaintiff suffered sudden permanent deafness in association with a severe reaction to medication. He requires hearing aids and ‘tinnitus maskers’ for life and receives an income of approximately $500 per month from disability insurance. The plaintiff has also been diagnosed with high blood pressure and anxiety disorder, and has kidney lesions that are being investigated. Exhibited in this regard is a doctor’s referral dated 2 May 2012 and a report and action plan of an occupational therapist dated 8 October 2015.

The plaintiff states that the wording of the will and the conduct of the defendants gave rise to an expectation that he and his daughter would receive ongoing assistance from the deceased’s estate, and this expectation prevented him from seeking further provision. Further, he states that he never understood his rights and that Marcus made it clear that he would send the plaintiff broke if he took steps in this regard. While he believed that the first deed and second deed voided his rights, he deposes that he now knows this to be incorrect. He deposes that he is entitled to further provision on the basis of his labouring contributions to Murndal, the value of the estate, and the unequal assistance that the deceased provided to his children and grandchildren during his lifetime.

The defendants’ evidence

The defendants rely upon an affidavit of Marcus, and certain evidence of the plaintiff’s. They also rely upon an affidavit of Ms Kathleen Wilson, legal practitioner, with the conduct of the proceeding on behalf of the defendants.

Marcia’s estate

Marcus agrees that the Murndal partnership entered into a loan with the plaintiff as the company did not have adequate cash resources at the time to pay the debt owed to the plaintiff. Consistent with the fax of the plaintiff dated 12 May 1997, Marcus notes that, by letter dated 29 April 1997, the plaintiff wrote to the Murndal partnership with a proposal allowing him access to the balance of the funds owed to him pursuant to the loan. In the letter, the plaintiff recognises that the Murndal partnership could not draw the funds from ‘thin air’, and as such, offered to discount the overall capital by whatever figure would off-set the cost of accessing the funds.

Exhibited to Marcus’s affidavit is a letter prepared by Hunter Newns to the deceased dated 20 June 1997, identifying that the plaintiff had signed a contract to purchase a unit in Scarborough, which required a deposit of $9,000 to be paid the following Monday. The letter then enquires as to whether it was possible for the Murndal partnership to pay the $9,000.

2008 negotiations

Regarding the artwork in the Murndal homestead, Marcus deposes that the ‘Pybus painting’ was part of the inventory of assets of the estate of the deceased’s great uncle, who bequeathed it to the deceased’s father. The deceased’s father then gifted the residue of his estate to the deceased to hold on trust for life, and upon his death, for the remainder to pass to Marcus. As such, according to Marcus, all the Murndal paintings were to pass to him upon his father’s death.

On 15 May 2008, Maddens, on behalf of the plaintiff, faxed Hunter Newns, requesting information concerning the administration of Marcia’s estate. The letter provided:

Our client’s father has recently passed away and the family is endeavouring to resolve matters relating to that Estate. In order for us to advise our client we seek your advice in relation to the Estate of Marcia Wilshire Winter-Cooke.

The issue of the ownership of the shares in the company was identified.

By letters dated 5 June 2008 and 17 July 2008, Hunter Newns provided Maddens with documents surrounding Marcia’s estate. The letter of the latter date commences: ‘We refer to [the Estate of Marcia] and to the request by [the plaintiff] that we forward to you documents received from Aitken Walker & Strachan pertaining to his father’s estate’. It lists 23 documents as enclosed, chiefly historical documents regarding the company and the Murndal partnership.

Mr Stratmann emailed the plaintiff on 3 October 2008, responding to an enquiry that the plaintiff had made in relation to the deceased’s life insurance policy. The following day, the plaintiff sought to clarify with Mr Stratmann whether the Pybus Trust funds fell to Marcus. Specifically, the email set out a query as to whether Marcus somehow gave up rights to the proceeds of the painting when he participated in the formation of the Pybus Trust. By email reply on 7 October 2008, Mr Stratmann stated that they were not matters that the defendants would be dealing with as executors of the estate and, as such, the plaintiff should seek independent legal advice.

On 29 October 2008, the plaintiff emailed Mr Stratmann, passing on concerns and a complaint against the administration of the estate, specifically in relation to legal costs, referrals to other legal professionals, and the lack of a grant of probate. Mr Stratmann replied informing the plaintiff that he was meeting with the defendants to discuss the matters. The plaintiff then replied, stating, amongst other things: ‘ps Is it possible to now circulate a settlement document around the family? One agreement for Dads estate and the Pybus Trust would be very neat if we can incorporate the two matters into one agreement’.

The plaintiff emailed the defendants, Arbella, and Mr Stratmann on 15 November 2008. The majority of the emailed is redacted, however it commences:

A note of thanks for the draft settlement agreement, which I believe is a very good start in difficult circumstance.
I understand some meetings in Victoria may be on the agenda so I thought I would take the opportunity to firm up some important positions before these take place. In essence, I see these points as key to successful family settlement which I am sure is high on everyone’s agenda.

Marcus deposes that the reference to ‘draft settlement agreement’ was in relation to the Pybus Trust. Each of Catharine, Marcus, Philippa, Arbella and the plaintiff received $100,000, as at that time the trust funds had decreased in value to approximately $500,000. A bank statement exhibited by Marcus shows withdrawals of $400,000 in April 2009, and he deposes that the balance remaining was Catharine’s.

Execution of the first deed and second deed

Marcus denies that he threatened to deploy a ‘war chest’ against the plaintiff. The Pybus Trust was largely distributed in April 2009. Moreover, he states that the plaintiff regularly telephoned each of the defendants and threatened a Part IV claim if the settlement was not resolved in the manner that he wished and often exerted pressure on Catharine.

On 13 May 2009, Hunter Newns wrote to the plaintiff. The letter refers to concerns of the plaintiff that money remained owing to him from the Murndal partnership.

By fax dated 11 August 2009, Maddens wrote to Hunter Newns on behalf of the plaintiff. Although the subject line is the estate of Marcia, the letter commenced:

We refer to our Mr Pendergast’s telephone discussions with Celcilia of your office on 7 August 2009 and note that on that day you received correspondence from Arbella’s Solicitors requiring amendments to the Deed of Agreement presently drafted by Counsel, a copy of which we have been provided with by our client. We note that deed requires execution by our client and certification by our client’s solicitor. Obviously we are not in a position to advance this matter until we are aware of any required amendments...

The plaintiff emailed Mr Stratmann on Sunday 23 August 2009, stating:

Apologies for the note this weekend, I have discussed my concerns with Pip and Marcus today and am ready to finalise the family agremments [sic]. Obviously I find Arbellas additional benefit difficult to accept however for my part I am happy to go ahead with best intentions.
Please send me the final deeds as soon as they are available for action.

Mr Stratmann replied that evening, saying that he was hoping to finalise the deeds the following day. The next day, the plaintiff sought an indication from Mr Stratmann as to when his version of the document would reach him, as he had travel coming up and was hoping to ‘finalise’ that week. A reply of Mr Stratmann the same day indicated that he anticipated the documents being sent to the plaintiff that week. The plaintiff emailed again on the Tuesday, stating that he may ‘complete a legal review with a lawyer in Townsville ... as Brendan is on leave’ and turnaround would be reduced. Further:

A quick note with regards to the Pybus Trust balance, my request only relates to my remaining componant [sic], I am not intending to request its distribution be mandated to other stakeholders, I am happy however to leave the final interpretation to you and the executors.

Mr Stratmann forwarded that email to his personal assistant, Ms Cecilia Grimmer. A file note by Ms Grimmer dated 28 August 2009 records that she telephoned the plaintiff that day to inform him that Mr Stratmann was unexpectedly called away, and the documents would be sent on Monday after Mr Stratmann had had a chance to look at them. The plaintiff was noted to be happy with that plan. The file note continues:

I also asked him re Maddens. He said that unlike Arbella, who is being handled by her solicitor, he handles his engagement with Maddens. He does not want us to forward documents to Maddens directly. He made the comment that he feels like everytime he speak to Brendan Brendan pushes him to make a Part IV application and doesn’t seem to understand that he just wants to resolve this and is fully aware of his legal rights.
He said that he would prefer that we send documents to him directly and he will have a friend of his who is a partner at a legal firm sign the certificate of advice. He said that he understands that Pip is actually waiving her legal rights and he thinks about doing the same ...
He appreciated the call.

On or about Monday 31 August 2009, Mr Stratmann forwarded the deeds to the plaintiff for execution by email. On 2 September 2009, the plaintiff replied to Mr Stratmann via email, thanking him for the deeds. The plaintiff then continued:

Please find the Deed of Agreement relevant to myself signed and attached with Liz Rosier as witness. Assuming this document is ok to proceed, (please confirm) I will also return the Deed relevant to Winter-Cooke (Murndal) Pty Ltd to complete my sign off process.
I have asked Brendan to provide the legal advice slip asap and have confirmed my intention to proceed and complete these matters asap.

Mr Pendergast of Maddens was copied into the same email. An hour and a half later, the plaintiff emailed the signed deed relating to Winter-Cooke (Murndal) Pty Ltd to Mr Stratmann, again copying in Mr Pendergast. The email states: ‘I will arrange the legal advice slip with Brendan which is yet to be supplied’. The following day another email was sent from the plaintiff to Mr Stratmann, stating:

I have spoken to Brendan today about my legal advice requirement. Brendan would like the amendments I have updated on the deeds to be included/redrafted in the originals by yourself and returned for review before the required legal review/advice process can be finalised.

Marcus deposes that, on 9 September 2009, a further $20,000 was transferred to the plaintiff from the Pybus Trust. The plaintiff is said to have demanded the payment prior to signing the deeds. An email that he wrote to Mr Stratmann the same day states:

Just confirming Mum has distributed my remaining 20pcent share of the PT today (20k) so there is no need to include this in my deed. If its already in there that’s fine, I will just sign it off as actioned anyway.

Subsequent events

In 2011, the plaintiff made enquires with Hunter Newns as to his interest under Marcia’s estate and a variation of the first deed. By letters dated 19 October 2011 and 27 November 2011, Hunter Newns replied. The former letter notes that the plaintiff requested a variation to the first deed, such that he had a right to 16.66 per cent of the value of land or shares in the company, as set out in clause 3, beyond the sixtieth birthday of Marcus. That variation was put to Catharine and rejected by her.

On 27 November 2011, Hunter Newns wrote to the plaintiff in response to enquiries that he had made. Relevantly, the letter states that the plaintiff raises ‘an issue in relation to the transparency of negotiations’ regarding the deceased’s estate. It goes on to note that the defendants and the plaintiff were aware that Arbella was to receive the sum of $200,000 sourced from Marcus’s entitlements, and cites an email of the plaintiff in this regard. The letter also refers to a request of the plaintiff for a distribution of income to assist with his daughter’s school fees, which was rejected by the defendants.

In relation to the letter that Marcus sent in November 2012 and the reply of Strategic Lawyers in 2013, a letter of Stratmann & Co (formerly Hunter Newns), on behalf of Marcus, states that the five phone calls referred to were made by Marcus to apologise for his letter.

Procedural history

In December 2014, an originating motion was filed on behalf of the plaintiff seeking an extension of time under s 99 of the Act and further provision from the deceased’s estate. This document was never served upon the defendants.

On 26 February 2016, the plaintiff commenced this proceeding.

On 15 December 2016, the defendants applied for summary dismissal of the whole relief sought by the plaintiff. On 21 April 2017 and 11 September 2017, Mukhtar AsJ heard the summary dismissal application. His Honour ordered that:

(a) the application for summary dismissal of the paragraphs seeking costs, the taking of an account, and the amendment of the register of the company be refused;

(b) the originating process be treated as a writ and the proceeding be conducted by pleadings;

(c) by 10 October 2017, the plaintiff file and serve a statement of claim concerning his alleged entitlements under Marcia’s will as already described in paragraph 5 and 6 of the originating motion, and concerning the enforceability or proper construction of the two deeds of agreement dated 28 September 2009;

(d) the plaintiff’s application for an extension of time for bringing an application under Part IV of the Act be deferred pending hearing and determination of the claims to be stated concerning his entitlement under the will of Marcia and the enforceability or proper construction of the deeds; and

(e) the defendants’ application for summary dismissal of the claim for an extension of time be refused without adjudication on the merits, such that it could be reinstated ‘after the determination of the dispute concerning the claim against the executors of [Marcia’s] estate, should the defendants so desire’.

After receiving an extension of time, the plaintiff filed a statement of claim on 6 March 2018. The statement of claim pleads that the deceased breached his executorial duties by not calling into Marcia’s estate the shares in the company, not distributing the shares to the plaintiff and converting them for his own use. It also alleges associated loss to the plaintiff and a trust over the shares in his favour. The statement of claim does not broach upon the enforceability or proper construction of the deeds.

On 17 April 2018, the defendants filed a defence. In response to a request by the plaintiff, they filed further and better particulars of defence in May 2018.

A directions hearing was held on 6 December 2019. On 4 February 2020, the plaintiff’s current lawyers copied the defendants’ lawyers into an email sent to the Court stating that the plaintiff no longer wished to proceed with the challenge to the share transactions, but that he wished to proceed with his family provision claim. A further directions hearing was sought regarding the trial of the remaining part of the proceeding. On 21 February 2020 at a directions hearing, counsel for the plaintiff confirmed that the claims in the statement of claim were no longer being pursued. The defendants then foreshadowed reinstating their earlier summons for summary dismissal of the plaintiff’s application for an extension of time.

On 1 May 2020, the defendants filed a summons seeking summary dismissal of the remainder of the proceeding. The parties filed written submissions and the application was heard on 10 June 2020.

Applicable principles
Summary judgment

Section 63(1) of the CPA affords the Court the power to give summary judgment in any civil proceeding if satisfied that the claim has no real prospect of success. The test is whether the plaintiff ‘has a “real” as opposed to a “fanciful” chance of success’.[1] A practical judgment is required as to whether a claim has more than a fanciful prospect of success.[2] The power should be exercised with caution and ‘should not be exercised unless it is clear that that there is no real question to be tried’.[3]
[1]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27, 39 [29] (Warren CJ and Nettle JA) (‘Lysaght’).
[2]Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd (2011) 35 VR 1, 7 [15] (Dixon J).
[3]Lysaght (n 1) [35d].

In the event that the claim has no real prosects of success, in accordance with s 64 of the CPA, the Court may nonetheless order that a civil proceeding proceed to trial if satisfied that the proceeding should not be disposed of summarily because it is not in the interests of justice to do so or the dispute is of such a nature that only a full hearing on the merits is appropriate.[4]
[4]Civil Procedure Act 2010 (Vic) s 64.

Factors relevant to the exercise of discretion under s 64 include the complexity of the issues between the parties,[5] the ability of the Court to deal with issues that would otherwise proceed to trial,[6] the seriousness of the allegations raised and doubts surrounding the evidentiary foundation before the Court.[7]
[5]Vergara v Chartered Accountants Australia and New Zealand (2018) 57 VR 526, [75] (Ierodiaconou AsJ).
[6]Westpac Banking Corporation v Tesoro [2012] VSC 182.
[7]Re Demediuk [2016] VSC 587.

The approach to evidence in a summary judgment application was discussed in Hausman v Abigroup Contractors Pty Ltd (‘Hausman’).[8] An affidavit in support of a summary judgment may contain a statement of fact based on information and belief, subject to the Court being prepared to admit it. Where a summary judgment application is brought by a plaintiff, what must be verified are the facts necessary to establish a good cause of action.[9] A defendant is then required to use reasonable diligence to put before the Court all the evidence relied upon in summary form. While ‘an affidavit in opposition to an application for summary judgment need not set out, in chapter and verse, every detail of the defendant’s position’, it must ‘provide some basic evidentiary foundation for whatever response is being made’.[10] Further:

A judge faced with an application for summary judgment should not be required to trawl through the defendant’s material in an effort to see whether there can be constructed from that material an answer to the plaintiff’s claim. It must be for the defendant to point to some material, whether legal or factual, that provides an arguable response to that claim. That is so even if it is the plaintiff who must ultimately discharge the burden of persuading the judge that there is no issue that warrants trial, and that summary judgment should therefore be granted.[11]

[8](2009) 29 VR 213 (‘Hausman’). The proceeding took place prior to the enactment of the Civil Procedure Act 2010 (Vic), but the approach remains applicable. See Innovateq Australia Pty Ltd v Barnes [2016] VSC 618, [11] (Ierodiaconou AsJ).

[9]Roberts v Plant [1895] 1 QB 597, 605 (Lopes LJ); Scott v Public Trustee of Victoria [1942] VLR 206, as cited in Hausman (n 8) 225 (Weinberg and Bongiorno JJA and Williams AJA).

[10]Hausman (n 8) 223 [48].

[11]Ibid 224 [55].

An issue that arose in Hausman was affidavit evidence of the plaintiff (who was responding to the summary judgment application), deposing that certain representations had been made prior to the execution of the relevant contract. The finding by the trial judge that there was no adequate foundation for the misrepresentation claim was upheld upon appeal, the Court of Appeal noting:

[A]n affidavit in opposition to an application for summary judgment must provide sufficient particulars to enable the defence case to be properly understood. A bald denial that the defendant is indebted to the plaintiff will not suffice. The affidavit should, so far as practicable, deal specifically with the plaintiff’s claim and the facts set out in the supporting affidavit to establish that claim.[12]

[12]Ibid 226 [65].

In the context of claims under Part IV of the Act, Derham AsJ has previously recognised that summary dismissal is rare. Such claims commonly involve disputed facts and there is a ‘considerable field in which the court must exercise its discretion’.[13]

Part IV of the Act

[13]Jensen v Jensen [2014] VSC 432, [8] of the Schedule.

As applicable at the time of the deceased’s death, s 99 of the Act provided that no application under Part IV should be heard unless the application is made within six months after the date of the grant of probate. The Court may extend that time however, after hearing such of the parties affected as the Court thinks necessary. In all such cases, the application for an extension is to be made before the final distribution of the estate and no distribution made prior to the application is disturbed by reason of the application.

Section 99 of the Act affords the Court a discretionary power.[14] While the discretion is to be exercised in accordance with the subject matter, scope and purpose of s 91 of the Act, it is not to be confined by rigid rules.[15] A number of relevant factors ordinarily inform the exercise of the discretion, including: the strength of the applicant’s claim for further provision;[16] the length of the delay;[17] the reasons for the delay;[18] and prejudice to other interested parties (other than the prejudice inherent in disturbing the terms of a distribution which would have been in their favour).[19]
[14]Maher v Maher [2019] VSCA 161, [63] (Beach, McLeish and Niall JJA).
[15]Ibid. See also Ansett v Moss [2007] VSCA 161, [6] (Buchanan JA, Redlich JA and Cavanough AJA agreeing).
[16]Ansett v Moss (n 15) [11].
[17]Maher v Maher (n 14) [64].
[18]Ibid.
[19]Ibid.

Ordinarily, the Court does not embark on a detailed analysis of the claim,[20] but each case may be different in that regard. A provisional view is formed as to the merits of the case,[21] specifically as to whether it is ‘arguable’.[22] The burden of proof is on the applicant, who is seeking the indulgence of the court to extend time. He or she must establish that it is in the interests of justice to grant the extension.[23]
[20]Ibid [69].
[21]Harrison v Harrison [2011] VSC 459, [291] (Kaye J); Maher v Maher (n 14) [72] (Beach, McLeish and Niall JJA).
[22]McCann v Ward [2010] VSC 452, [11] (Dixon J).
[23]Erlich v Fleiszig [2013] VSC 63.

Prior to the amendments effected by the Justice Legislation Amendment (Succession and Surrogacy) Act 2014, in determining an application under s 91 of the Act, the Court had to determine three questions:

(a) Did the deceased, at the date of his death, have a responsibility to make provision for the plaintiff’s proper maintenance and support?

(b) If so, did the will make adequate provision for the plaintiff’s proper maintenance and support?

(c) If not, applying the factors in s 91(4)(e)–(o) of the Act, what is the amount of provision that should be ordered?[24]

[24]Davison v Kempson [2018] VSCA 51, [30] (Tate, Santamaria and Beach JJA).

The first two questions may be referred to as ‘jurisdictional hurdles’. ‘Responsibility’ reflects the moral duty or obligation of the deceased to make provision for the proper support and maintenance of the claimant. In Davison v Kempson, the Court found:

In deciding what is adequate and proper, the Court’s discretion, while broad, is to be exercised carefully and conservatively according to prevailing community perceptions of the provision that would be made by a wise and just testator.
In order for a court to award provision, an applicant must have shown a ‘need’, which is a relative concept that has to be considered in the circumstances of each case. It is not confined to economic need. If circumstances permit, a testator should go beyond merely providing for the bare necessities of life.[25]

[25]Ibid [35]. See also Blair v Blair (2004) 10 VR 69, [13] (Chernov JA).

Whether adequate provision was made for the proper maintenance and support of the plaintiff is to be determined ‘by a consideration of the facts existing and the eventualities which might reasonably have been foreseen at the date of the testator’s death’.[26] Children of the deceased do not need to be treated equally.[27] While a testator may desire to preserve assets such as farming properties for future generations, such a desire cannot be to the exclusion of a responsibility to make adequate provision for a person’s maintenance and support.[28]
[26]Prosser v Twiss [1970] VR 225, 232 (Lush J).
[27]Davison v Kempson (n 24) [37] (Tate, Santamaria and Beach JJA), citing Re Hodgson [1955] VLR 481, 485 (Herring CJ, Martin and Sholl JJ); Blore v Lang (1960) 104 CLR 124, 135 (Fullagar and Menzies JJ); Anderson v Teboneras [1990] VR 527, 535 (Ormiston J).
[28]Blair v Blair (n 25) [74] (Chernov JA).

The Court of Appeal has noted that relevant factors in the context of adult children may include ‘a lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years’ and protection against the ordinary vicissitudes of life.[29]
[29]Davison v Kempson (n 24) [36] and [40] (Tate, Santamaria and Beach JJA).

Once the court’s jurisdiction has been enlivened, the final question, identifying what is adequate and proper provision, is to be assessed in light of the facts in existence at the time of the hearing.[30]

Compromise of Part IV claims

[30]Prosser v Twiss (n 26).

Executors have duties to both uphold the will and compromise claims on the estate.[31] They are also required to act in good faith, which falls within the core duty of loyalty toward the beneficiaries.[32]
[31]Re Lanfear (1940) 57 WN (NSW) 181; Vasiljev v Public Trustee [1974] 2 NSWLR 497; Bartlett v Coomber [2008] NSWCA 100, [71] (Hodgson JA); Smith v Whittaker [2016] VSC 287, [37] (Derham AsJ).
[32]Bristol & West Building Society v Mother [1998] Ch 1, 18 (Millett LJ).

Executors and trustees have the ability to settle Part IV claims and vary interests in an estate where all of the affected beneficiaries are sui juris, absolutely entitled and consent.[33] The consent of the beneficiaries may provide a defence to a later claim of breach of trust. To establish the defence, the consent must be provided with full knowledge and understanding of the material facts, and at issue is whether it is fair and equitable in all of the circumstances for the beneficiary to sue the trustee.[34] When discussing such principles in the context of the fair-dealing rule,[35] the Court of Appeal of New South Wales has noted that there is no duty to obtain informed consent.[36] Rather, the existence of such consent will go to negating what was otherwise a breach of trust.
[33]Hodge v De Pasquale [2014] VSC 413, [77] (McMillan J); Hore v Perpetual Trustee Co Ltd (Unreported, NSWSC, 8 June 1995), 11–12 (Windeyer J), as quoted in Schaechtele v Schaechtele [2008] WASC 148, [5] (Le Miere J); Tritt v Hoskins [2016] VSC 589.
[34]Spellson v George (1992) 26 NSWLR 666; Corporate Systems Publishing Pty Ltd v Lingard [2009] WASCA 158, [94] (Owen JA, McLure and Buss JJA agreeing); Re Pauling's Settlement Trusts [1962] 1 WLR 86, 108 (Wilberforce J).
[35]Perhaps stemming from the ‘no conflict rule’, where trustees transact with beneficiaries, the transactions must be shown to be open, fair and free from all objection. See Tito v Waddell (No 2) [1977] Ch 106, 241 (Megarry VC); Maguire v Makaronis (1997) 188 CLR 449, 465 (Brennan CJ, Gaudron, McHugh and Gummow JJ).
[36]See Rahme v Benjamin & Khoury Pty Ltd (2019) 100 NSWLR 550, 569 [99] (Macfarlan JA), citing Maguire v Makaronis (n 35) 465.

The ability to restrict the right to apply for further provision through private agreements was considered in Lieberman v Morris (‘Lieberman’).[37] That case is authority for the proposition that the jurisdiction of the Court under family provision legislation cannot be displaced by private agreement with the testator.[38] There, prior to marriage, the testator and widow had entered into a deed containing a clause stating that the widow would not make a claim against the testator’s estate. Rich and Starke JJ identified a broad public interest in the legislation, which meant that the agreement was not binding on the widow. Latham CJ eschewed general notions of public policy and instead reasoned on the basis of a specific provision in the relevant act.[39] Williams and McTiernan JJ reasoned that allowing the agreement to act as a bar to the application would frustrate the purposes of the legislation.[40] Rather the agreement was to be considered in ‘all the circumstances of the case’.[41]
[37](1944) 69 CLR 69 (‘Lieberman’).
[38]See discussion in GE Dal Pont, Law of Succession (LexisNexis Butterworths, 2^nd ed, 2017) [19.40].
[39]Lieberman (n 37) 83.
[40]Ibid 88 and 94.
[41]Ibid 88 and 95.

In Smith v Smith,[42] the High Court considered whether an agreement made under the Family Law Act 1975 was inconsistent with s 31 of the Family Provision Act 1982 (NSW). By the terms of the agreement, the parties released each other from claims under the Family Provision Act 1982 (NSW). Section 31 of that Act provided that a release by a person of rights to make an application regarding a deceased estate was to be approved by the Court. In finding that there was no inconsistency, Gibbs CJ, Wilson and Dawson JJ commented that Lieberman supported the view that, in the absence of statutory authority, an attempt to contract out of the benefits of the Family Provision Act 1982 (NSW) would be ineffective.[43]

Unconscionable conduct and undue influence

[42](1986) 161 CLR 217.

[43]Ibid 235.

In Commercial Bank of Australia Ltd v Amadio (‘Amadio’), Deane J said that the equitable principles concerning relief against unconscionable conduct are closely related to those concerned with undue influence.[44] The same circumstances can result in the conclusion that the person seeking relief (i) has been subject to undue influence, and (ii) is in a position of special disadvantage for the purposes of the doctrine concerned with unconscionable conduct.
[44](1983) 151 CLR 447, 474 (‘Amadio’)

It remains the case, however, that unconscionable conduct and undue influence are distinct legal principles. A conclusion of unconscionable conduct requires:

the innocent party to be subject to a special disadvantage ‘which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests’.The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring ‘victimisation’, ‘unconscientious conduct’, or ‘exploitation’. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.[45]

[45]Thorne v Kennedy (2017) 263 CLR 85, 103 (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ).

In Australian Securities and Investments Commission v Kobelt (‘Kobelt’),[46] Nettle and Gordon JJ stated, albeit in dissent in the outcome, that:

It is not possible to identify exhaustively what amounts to a special disadvantage. However, the essence of the relevant weakness is that it ‘seriously affects’ the innocent party's ability to safeguard their own interests. Relevant matters may include, but are not limited to, ‘poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary’; as well as ‘illness, ignorance, inexperience, impaired faculties, financial need or other circumstances’ that affect the innocent or weaker party’s ability to protect their own interests. It is not sufficient that the matters give rise only to an inequality of bargaining power.[47]

[46][2019] HCA 18 (‘Kobelt’).

[47]Ibid [146]–[150], as quoted in Jams 2 Pty Ltd v Stubbings [2020] VSCA 200.

Their Honours went on to emphasise that invocation of equitable doctrines, including unconscionable conduct, requires ‘precise examination of particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, process and idiosyncrasies’ of the weaker party.[48]
[48]Ibid [150], quoting Jenyns (1953) 90 CLR 113, 118–19, quoting The "Juliana" (1822) 2 Dods 504, 521; 165 ER 1560, 1567.

In Mackintosh v Johnson,[49] the Court of Appeal set out the applicable approach, identifying two ‘threshold’ requirements’ before the principle can operate: first, the need for the suggested disability or disadvantage to affect the ability of the party said to be suffering from it to make a judgment in his or her best interests; and second, the need to demonstrate that the special disability was sufficiently evident to the other party.[50] It is only if those elements are established that the Court then considers whether or not the party acted unconscionably.[51]
[49](2013) 37 VR 301.
[50]Ibid [11] (Buchanan and Whelan JJA and Hargrave AJA).
[51]Ibid [12].

The doctrine of undue influence was discussed by the High Court in Thorne v Kennedy, where it was noted that its boundary with the doctrine of duress is blurred.[52] Undue influence arises from the deliberate contrivance of another (including pressure) giving rise to such influence over the mind of the other that the act is not a ‘free act’.[53] In this regard the High Court reasoned:

The question whether a person's act is ‘free’ requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton ... Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be ‘markedly sub-standard’ as a result of the effect upon the person’s mind of the will of another.[54]

[52]Thorne v Kennedy (n 45) 99 (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ).

[53]Ibid 100.

[54]Ibid.

Of note, undue influence may exist even though the transferor ‘is perfectly competent to understand and intend what he or she did’.[55]
[55]Union Fidelity Trustee Co of Australia Ltd v Gibson [1971] VR 573, 576 (Gillard J) (‘Gibson’).

A claim of undue influence may be based upon proof of actual influence by one party over another, or upon presumption if the parties were in a particular antecedent relationship and the transaction is one that cannot be explained by ordinary motives.[56] Certain recognised relationships, such as doctor and patient, give rise to the presumption. Otherwise, the requisite relationship can be established where one party is in a position of ascendency or influence, and the other in a corresponding position of dependency and trust.[57] Where the presumption applies, the evidentiary onus shifts to the party in the position of ascendency to establish that the transaction was a result of the other party’s free will — that is, ‘the independent and well-understood act of a [person] able to exercise free judgment’.[58]
[56]Thorne v Kennedy (n 45) 101 (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ).
[57]Ibid. See also Daunt v Daunt [2015] VSCA 58; Johnson v Buttress (1936) 56 CLR 113, 119–20 (Latham CJ).
[58]Johnson v Buttress (n 57) 134 (Dixon J).

Trustee and beneficiary relationships have been recognised as attracting the presumption of undue influence.[59] However, the Laws of Australia notes that transactions with trustees other than gifts are usually considered under the spectre of fiduciary obligations — that is, it is unnecessary to resort to any presumption of undue influence.[60] Also noted is that, in many cases, a relationship of trust and confidence will not exist between the beneficiary and trustee.[61]
[59]Thorne v Kennedy (n 45) 101; Gibson (n 55) 577 (Gillard J); Johnson v Buttress (n 57) 119.
[60]WestLaw AU, The Laws of Australia (online at 8 September 2020) [35.8.640].
[61]Ibid, citing RP Meagher, JD Heydon and MJ Leeming, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (LexisNexis Butterworths, 4^th ed, 2002) [15-095].

Submissions
Defendants’ submissions

The defendants submit that the plaintiff’s application to extend time has no real prospects of success. They rely upon two chief bases. First, they assert that the first deed and second deed contain valid and binding releases, which create an absolute obstacle to the plaintiff’s application for an extension of time. Secondly, they rely upon the long and unexplained delay in commencing the proceeding and the procedural history, including initiating a second proceeding instead of seeking leave to serve the earlier originating motion that had gone stale.

In relation to the deeds, the defendants claim that the plaintiff expressly covenanted not to commence or maintain any application under Part IV of the Act. The deeds were drawn up and entered into after correspondence and discussion between family members, to which the plaintiff was a party. In this regard, the defendants point to:

(a) the letter of Maddens to Hunter Newns on 15 May 2008 referring to the plaintiff ‘endeavouring to resolve matters’ related to the deceased’s estate;

(b) the two letters to Maddens from Hunter Newns dated 5 June 2008 and 17 July 2008, the latter of which refers to a request by the plaintiff to forward documents regarding the deceased’s estate; and

(c) the email that the plaintiff sent to Mr Stratmann on 15 November 2008.

These documents are said to evidence a pattern whereby the plaintiff had Maddens acting for him in May, June and July of 2008, and he was corresponding with Mr Stratmann. The suggestion was then made to the plaintiff that he obtain independent legal advice.

Similarly, the defendants rely upon:

(a) the letter of Maddens dated 11 August 2009 to Hunter Newns referring to a ‘deed of agreement’ provided by the plaintiff;

(b) the plaintiff’s email of 23 August 2009 to Mr Stratmann referencing the additional benefit to Arbella and that he was happy to ‘go ahead with best intentions’;

(c) the plaintiff’s emails in September 2009 showing that he was looking to finalise the deeds and referring to completing ‘a legal review with a lawyer in Townsville’; and

(d) the file note of Ms Grimmer on 28 August 2009.

According to the defendants, the plaintiff was actively involved in negotiations and Maddens were acting for him. He was afforded the opportunity to obtain legal advice but waived his entitlement in this regard, and the correspondence demonstrates that he was emailing in a very calm and considered manner. He was advised of his rights and made a choice not to exercise them. Effectively, he rejected the advice of Mr Pendergast of Maddens, stating freely and voluntarily that he wanted to resolve things. Further, when signing the deeds and emailing them to Mr Stratmann, the plaintiff referred to certain amendments advised by Mr Pendergast. Although the specific amendments that the plaintiff sought are not clear from the body of the email, the defendants submit that the plaintiff’s later email of 9 September 2009 suggests that the amendments related to the distribution from the Pybus Trust.

Further, the plaintiff appears to have enquired two years later about a variation to the deed, not in any way suggesting that he did not understand it or was not bound by it, and in 2013 when represented by Strategic Lawyers he sought to enforce his contractual rights under the deed.

The second base upon which the defendants rely concerns the procedural history of the matter. They note that the orders of Mukhtar AsJ of 11 September 2017 state that the plaintiff was to file and serve a statement of claim concerning his alleged entitlements under Marcia’s will and ‘concerning the enforceability or proper construction of the two deeds of agreement’ yet he only set out a claim in relation to Marcia’s estate. In effect, the plaintiff is said to have elected not to pursue any issue about the enforceability or construction of the deeds. According to the defendant, having regard to:

(a) the significant time that has elapsed since the date of the deeds;

(b) the fact that the defendants have acted at all times in accordance with the deeds;

(c) the long procedural history of the matter; and

(d) the plaintiff not seeking any relief regarding the deeds in his statement of claim—

the plaintiff ought now be estopped from denying the validity of the deeds.

Plaintiff’s submissions

The plaintiff submits that the deeds are not an absolute bar to his claim. He asserts first that, for reasons of public policy, the deeds do not oust the jurisdiction of the Court and, secondly, the particular circumstances of this case make applicable concepts of unconscionable conduct and undue influence.

As to the deeds being against public policy, reliance is placed upon Lieberman, Vigolo v Bostin,[62] and Re Pearson.[63]
[62](2005) 221 CLR 191.
[63][1936] VLR 355.

Regarding unconscionable conduct and undue influence, the plaintiff broadly framed his submissions around four issues: the failure of the defendants to make full and frank disclosure before he entered the deeds; the pressure exerted by the defendants; representations made by the defendants; and the defendants’ position of conflict.

On the issue of disclosure, the plaintiff submits that, as fiduciaries, the defendants were under an anterior duty to provide him with full and transparent information regarding: the ability of the estate to fund further provision; their intentions as to distribution of the income from the company shares; the provision that was being made to Arbella; and the fact that the $100,000 paid to the plaintiff pursuant to the second deed was to be discounted. For the defendants to assert that the plaintiff was generally aware of such issues misstates the obligation.

The plaintiff notes that there are factual issues to resolve regarding the nature and extent of pressure applied by the defendants, but emphasised the following conduct:

(a) badgering, harassing and intimidating the plaintiff to enter the deeds;

(b) conducting a campaign calculated such that the plaintiff signed the deeds without independent legal advice, understanding the quantum of provision that he was likely to have received, or awareness that he could have funded a Part IV claim via a no win no fee arrangement;

(c) Philippa holding herself out to be knowledgeable and experienced regarding matters of personal health, and repeatedly stating that Catharine was in very poor health, and that the stress and anxiety of any claim on the estate would be likely to cause Catharine’s death or serious decline;

(d) Marcus supporting Philippa’s representations regarding Catharine’s health and the impact of any claim; and

(e) the defendants demanding that the plaintiff enter the deed before he was paid what he was entitled to as of a right arising from the provision made for him under the will. This is also said to constitute a breach of fiduciary duties.

He further contends that, in calling upon family ties, care, respect and mutual sharing, the defendants manipulated him into an expectation of participation, involvement and benefits that they failed to honour. Specifically relied upon is:

(a) Catharine influencing the plaintiff to enter into the deeds by holding out to him that if he did, he would participate in the distribution of funds Catharine would receive as a life tenant, or in her role as executor capable of distributing funds to family members. That is, the plaintiff believed that in entering into the deeds his prospects of a favourable exercise of discretion would be enhanced;

(b) Marcus and Philippa endorsing the plaintiff’s expectation that he would receive assistance with the cost of schooling his children, his living expenses and participation in the use and enjoyment of Murndal.

The scope of the defendants to engage in unconscionable conduct is said to have been enlarged by their position of conflict, Marcus in particular having an ‘enormous’ personal interest. Additionally, the evidence surrounding Marcia’s will, and the associated adjustments, suggest that Catharine ‘harboured some actual animus’ against the plaintiff.

The plaintiff asserts that he was particularly vulnerable because of: his identification with the Murndal dynasty; his unquestioning acceptance of the need to preserve the property as a viable entity for future generations; his wish to preserve goodwill in the family; and because he had explained his financial needs to the defendants. He submits that he expressly elected not to pursue his legal rights in the hope of preserving goodwill and Murndal. His position of special vulnerability is said to date back to 1994 when he was prevailed upon by the deceased to make the loan concerning Marcia’s will.

The defendants are said to have had knowledge of the plaintiff’s position of vulnerability.

Ultimately, the plaintiff asserts that the construction and enforceability of the deeds remains a live issue, which he seeks to agitate at trial. Fundamentally, rather than electing not to proceed, the plaintiff pursued a non-statutory course in the interests of preserving good will and benefiting via the discretionary trust.

As to Mukhtar AsJ’s orders, it is submitted that the defendants in their defence could have set out and pleaded the deeds as an absolute bar, and that a procedural or pleading point should not govern the fundamental principles.

Insofar as the merits of the Part IV claim is relevant to the application for extension of time to claim, the plaintiff submits that he is no longer young, he works as an employee at Telstra and his earning capacity is unlikely to increase. He contends that appropriate further provision would involve at least some buffer in likely retirement or ill health, against the vicissitudes that he is likely to encounter, that is, ‘cheese and jam’ as well as ‘bread and butter’. However, counsel for the plaintiff did not articulate a figure as a suitable ‘buffer’. This was attributed to a lack of information as to how the income from the life estate was being distributed.

Defendants’ reply

In reply, the defendants state that Lieberman is distinct as the decision was based upon a future right. On the issue of disclosure, they disputed the plaintiff’s claim, submitting that it is clear that he was provided with documents regarding Marcia’s estate and that he could have requested the same in relation to the deceased’s estate. The plaintiff’s claim regarding lack of information surrounding the administration of the estate since the deeds were entered is also said to be misplaced — the question of whether a person has a Part IV claim is to be determined at the time of death and during the period in which proceedings could have been commenced. The inventory of assets of the estate has always been available and was never requested by the plaintiff.

Does the plaintiff’s claim have no real prospect of success?

In determining whether the plaintiff’s application has no real prospects of success, the Court is required to make a practical judgment as to whether the application has a real, as opposed to fanciful, chance of success. When resolving applications under s 99 of the Act, a balancing of various factors is required, directed toward determining whether it is in the interests of justice for the claim to proceed. Here, the most significant factors informing the potential success of the plaintiff’s application are: whether the estate has been fully distributed; the existence of the deeds; delay; the strength of the plaintiff’s s 91 claim; and prejudice to the defendants.

Distribution of the estate

Under the terms of the deceased’s will, the defendants are to hold the shares in the company and the assets of the Murndal partnership on trust for the life of Catharine. Income from the trust is to be distributed at the discretion of the defendants. Upon the death of Catharine, the company and the Murndal partnership interests are to pass to Marcus, subject to a payment of $100,000 to the plaintiff. The terms of the deeds altered the testamentary trust in the event that the whole of the lands or shares in the company were sold prior to the sixtieth birthday of Marcus and accelerated payment of the $100,000 to Marcus. As Catharine remains fit and well, and the land and shares have not been sold, the corpus of the trust remains held by the defendants.

The deeds

In seeking to rely on the deeds, it is implicit that the defendants are satisfied that they had the power to both enter into them and give effect to them.[64]
[64]An issue may arise regarding the power of the parties to agree to the distribution of the corpus of the testamentary trust in the event that the land or shares were sold, in circumstances where minors were amongst the objects of the discretionary trust over the income. As the issue was not addressed in submissions, for the purposes of the application, the Court will not take the point any further.

The plaintiff does not deny that he entered into the deeds. Rather, he seeks to impugn them on the basis of public policy, and the specific circumstances of the case, asserting unconscionable conduct, undue influence and the defendants’ failing to satisfy an ‘anterior duty to disclose’.

Part IV of the Act confers on the Court the power to alter the distribution of interests under wills, where the requirements under s 91 are satisfied. Where private agreements, by their terms, seek to restrict the ability of individuals to apply for relief under the Act, questions arise concerning how such agreements are to be approached by the Court.

In Re Pearson,[65] a decision of this Court, it was held that a deed of separation executed during the deceased’s lifetime and expressly precluding his ex-wife from making a claim for further provision did not oust the Court’s jurisdiction, albeit the existence of the deed may markedly affect how the Court exercises its discretion.[66] Mann CJ appears to have based the approach on the broad discretion conferred on the Court.
[65](n 63).
[66]Ibid 359.

As noted above, Lieberman involved an inter vivos agreement with the testator, and it was held on grounds of public policy that the claimant could not contract out of her rights. In Vigolo v Bostin,[67] Gleeson CJ cited Lieberman when referring to the ‘dominant legislative purpose of enforcing moral duties’.[68] While the defendants seek to distinguish Lieberman as being restricted to inter vivos agreements, a number of first instance decisions in other jurisdictions have extended its application to agreements made after the testator’s death.[69] For example, in Daebritz v Gandy (‘Daebritz’),[70] Bredmeyer M determined that, in light of Lieberman, an agreement between the de facto widow of the testator and the executors of the estate was not a bar to the de facto widow bringing an application for the extension of time in which to bring a claim against the estate.[71] His Honour also considered earlier authorities that took a similar approach, and distinguished agreements reached in court mediation. In his view, Bredmeyer M considered the agreement entered into by the de facto widow was of evidential value. It indicated what provision the de facto widow thought was ‘adequate’, and a relevant consideration was whether it was arguable that she could obtain additional benefit pursuing the claim.[72]
[67](n 62).
[68]Ibid 200.
[69]Daebritz v Gandy [2001] WASC 45 (‘Daebritz’); Cutting v Public Trustee for Northern Territory (No 2) [2018] NTSC 51; Afoo v Public Trustee of Queensland [2012] 1 Qd R 208; Re Hatte [1943] St R Qd 1; The Estate of Wilson [2020] NTSC 29; Austin v Austin [2019] NSWSC 1397.
[70]Daebritz (n 69).
[71]Ibid [17].
[72]Cf De Campo v De Campo [2018] WASC 351, where a deed did not contain an express release and the Court was unwilling to infer one as it would be against public policy.

In Bartlett v Coomber, Mason P referred to the role of compromise agreements as follows:

[L]itigation under the Act takes place in an adversary context in which the active parties to the particular litigation are usually expected to be the best judges of what is in their own interests. The policy of Australian law encourages the settlement of disputes ... Our legal system would collapse were it not for the fact that most disputes are resolved by agreement.
One of the principles giving effect to this policy is the principle that a valid compromise gives effect to an agreement that effectively supersedes the antecedent rights of the parties. The possibility of greater success and the risk of greater failure is transposed into an arrangement that frees the litigants and witnesses of the risks, costs and toils of further disputation. This principle is not displaced in the context of proceedings under the Act, although for reasons already outlined, the court may decline to give effect to a settlement if doing so failed to effectuate the specific policies of the Act, amounted to an abuse of process or otherwise offended public policy in a demonstrable way.[73]

[73]Bartlett v Coomber (n 31) [57] and [58].

In that case, however, the relevant compromise had to be approved by the Court on account of a beneficiary who was a minor.

In this proceeding, a legal issue arises as to whether the Court should follow the approach of Daebritz and other first instance decisions, or give precedence to contractual principals. The issue was not fully argued by the parties, and in particular, submissions were not made on whether the first instance decisions, including Daebritz, are distinguishable or otherwise plainly wrong.

The plaintiff’s case appears to be framed to cover both approaches. While he submitted that the first deed and second deed were void as being contrary to public policy, the balance of his arguments were framed in a manner consistent with contractual principles — that is, impugning the deeds on grounds of unconscionable conduct, undue influence and breaches of fiduciary duties.

Following the first approach, it appears open for the plaintiff to argue that the first deed and second deed are not a bar to his claim and, at the most, are an indication of what he thought was adequate provision at the time. In this regard, the Court would proceed to hear the application for extension, in light of the fact that in 2009 the plaintiff accepted $120,000 and acceleration of the $100,000 payment from Marcus. On the issue of whether it was just in all of the circumstances for the plaintiff’s application to be granted, a question would perhaps arise as to whether there is any real benefit in pursuing statutory relief — that is, whether it is arguable that the plaintiff would receive a more beneficial distribution through the statutory process.

If the approach of Daebritz is rejected, or if the plaintiff seeks to dispute the evidential value of the deeds, of significance will be the claims of unconscionable conduct, undue influence and breach of the defendant’s ‘anterior duty’.

Regarding unconscionable conduct, as noted by Nettle and Gordon JJ in Kobelt, such claims involve a precise examination of the particular facts at hand and scrutiny of the exact relations between the parties. However, even with this in mind, the plaintiff’s case appears to face a significant difficulty in establishing a ‘special disability or disadvantage’. Here the facts are a long way from the kind of special disability recognised in Amadio. The evidence discloses that, over the year leading up to his entry into the deeds, the plaintiff had been involved in negotiations surrounding his father’s estate, with and without the assistance of Maddens. His email to Mr Stratmann on 4 October 2008 concerning the Pybus Trust displays a relatively sophisticated understanding of the issues at hand, as do the emails sent by him in August and September 2009. While he claims a special vulnerability in the sense that he strongly identified with the Murndal dynasty and desired to preserve the property, the events of 1997 suggest that he was capable of asserting his financial interests while maintaining that desire. While the plaintiff also points to a vulnerability, in that the defendants knew of his financial needs, there is no evidence that he was under financial strain to the extent that it seriously affected his ability to protect his interests. Rather, the evidence suggests that he had negotiated to receive $100,000 in April 2009, and a further $20,000 ahead of signing the deeds in September.

The issue of undue influence raises differing concerns. The plaintiff’s submissions in this regard were limited, however, a number of points may be made. On the one hand:

(a) the email of Philippa on 30 May 2008 suggests that she and the plaintiff were then on good terms, and perhaps negotiating together in opposition to Marcus;

(b) it is unclear from the evidence when the verbal statements of Philippa and Marcus occurred, aside from some time in the 18 months between the death of the deceased and the execution of the deeds. They are linked to pressure said to also have been placed on Arbella referred to in an email dated ‘2/12/2018’;

(c) Mr Pendergast was copied into the plaintiff’s emails of 2 September 2009 to Mr Stratmann;

(d) the email of the plaintiff on 3 September 2009 stated that he had spoken to Mr Pendergast and that Mr Pendergast wanted certain amendments;

(e) the plaintiff’s emails generally in September 2008 do not refer to any pressure that he was under, rather, they show that he was seeking to sign off on the deeds as soon as possible ahead of travelling; and

(f) in relation to the bargain struck between the parties, the second deed expressly refers to the plaintiff not commencing an application under Part IV, with reference to consideration, including the distribution that he received from the trustee of the Pybus Trust. That sum appears to be $120,000. Additionally, while he submits that the $100,000 received under the terms of the second deed was discounted, this appears inconsistent with his own evidence.

On the other hand:

(a) taking the plaintiff’s evidence at its highest, pressure was exerted by Philippa and Marcus in telephone conversations at some time prior to the plaintiff entering the first deed and second deed regarding the health of Catharine, the plaintiff being able to visit Murndal, and the financial results of litigation;

(b) the defendants rely upon the file note of Ms Grimmer as demonstrating that the plaintiff was aware of his rights to pursue a Part IV claim, but chose instead to enter into the deeds. However, that the plaintiff was actively avoiding discussion with Mr Pendergast on 28 August 2009 may also be consistent with a belief that pursuing a Part IV claim was not an option open to him;

(c) the plaintiff was, to adopt his own phrase, ‘handling’ his interaction with Maddens and corresponding with Hunter Newns directly. Save for their request for updated deeds on 7 August 2009 and the advice of Mr Pendergast concerning an amendment, Maddens does not appear to have been broadly advocating on the plaintiff’s behalf;

(d) Mr Pendergast did not sign the schedule to the deeds as having provided legal advice, rather, the plaintiff signed the waiver; and

(e) that the plaintiff’s emails indicate that he comprehended the situation, is not necessarily inconsistent with his will being constrained.

Ultimately, the question arises as to whether the pressure applied by the defendants was undue, and, although the weight of documents appear to favour the defendants’ case, the Court cannot be confident of the protection afforded by Maddens in a context where their role was managed by the plaintiff himself.

The plaintiff also asserts that the defendants were subject to an ‘anterior duty of disclosure’ that they failed to discharge. This was said to be based upon the fiduciary duty of good faith rather than issues of consent. The scope of the asserted duty to inform the plaintiff ‘fully, frankly and transparently’, and how it sits alongside the duty to account and the defence of consent is not apparent from the plaintiff’s submissions. He submits, however, that prior to entering the deeds the defendants should have informed him of various factors concerning the estate, the settlement with Arbella and the assets of Marcus. In reply, the defendants submit that: they were not under any obligation to disclose the specific matters; and, more generally, if the plaintiff wanted information concerning the estate, Maddens could have requested it and the application for probate was publicly available.

The approach of neither party is particularly helpful. Chiefly, the plaintiff failed to provide any authorities regarding the asserted duty. After the hearing, an email was sent to the Court drawing the Court’s attention to Wilson v Waigani Pty Ltd (‘Waigani’),[74] noting that counsel were ‘not in agreement’ as to whether or not the judgment impacted upon the matters argued by the parties. Waigani concerned a challenge to terms of settlement entered into between the trustee of a unit trust and a unit holder. The unit holder asserted breaches of trust based upon certain payments by the trustee, and upon the trustee entering the settlement agreements. The trustee sought to rely upon releases given in the terms of settlement. In summarising the applicable law, the Court of Appeal stated:

A trustee seeking to rely on releases given by a trust beneficiary in respect of a breach of trust must prove that the beneficiary had full knowledge of all the circumstances of the breach and their rights in respect of that breach. The degree of knowledge required is assessed by reference to the whole of the circumstances applying at the time the release was given and notions of fairness.[75]

[74][2020] VSCA 153 (‘Waigani’).

[75]Ibid [8] (Ferguson CJ, Niall and Emerton JJA).

Regarding the issue of fairness, the Court of Appeal later quoted the following from Re Pauling’s Settlement Trust:

[T]he court has to consider all the circumstances in which the concurrence of the cestui que trust was given with a view to seeing whether it is fair and equitable that, having given his concurrence, he should afterwards turn round and sue the trustees…[76]

[76]Re Paulings Settlement Trust (n 34) (Wilberforce J).

As observed, it is not clear whether the plaintiff seeks to rely upon similar principles. Oral submissions of his counsel referred to lack of good faith, rather than a breach of trust and a failure of consent. In any event, if the plaintiff did seek to assert breach of trust and the failure to give the ‘fullest information’, the asserted lack of disclosure would be viewed against issues of fairness in circumstances where the plaintiff: was aware of his right to pursue a Part IV claim; was aware that Arbella was also seeking a settlement; had engaged Maddens; and had been communicating with Mr Pendergast in the days before he signed the agreement.

Finally, the plaintiff’s submissions refer to conduct of the defendants that manipulated him into an expectation that if he signed the deeds he would receive favourable distributions under the terms of the testamentary trust. However, he has not set out material facts in this regard and the statements in his affidavit appear akin to the types of general allegations referred to in Hausman. Further, they are inconsistent with the notes that Marcus emailed in May 2008 suggesting that older family members be looked after by the partnership (not the plaintiff’s generation), and Catharine’s later letter on 31 July 2012 stating that she had only recently become fully aware of the significance of clause 3 of the will.

On the whole, the plaintiff’s arguments attempting to impugn the deeds appear to face considerable difficulties. His claim of unconscionable conduct suffers from a significant weakness, and his assertions regarding representations made by the defendants do not appear to have an adequate factual basis. While his undue influence claim does not suffer from such clear deficiencies, it relies chiefly on the statements deposed by the plaintiff, and many of the documents at the time appear to favour the defendants’ case. On the facts, however, the Court cannot confidently conclude that such a claim is fanciful. As to the plaintiff’s argument regarding a breach of fiduciary obligations and failure to provide material information, the legal basis of this claim is unclear. If a breach of trust is argued, however, and issues surrounding the fairness of the transaction arise, the evidence appears to again favour the defendants. Ultimately, however, there are contested legal and factual issues concerning the plaintiff’s claims.

The defendants argue that the plaintiff should be estopped from denying the validity of the deeds given: the long procedural history of the proceeding and the plaintiff’s election not to seek relief regarding the deeds in his statement of claim; the length of time since the deeds were entered into; and the fact that the defendants have acted in accordance with the deeds.

In relation to the procedural issue raised, the plaintiff’s conduct leaves much to be desired. The order of Mukhtar AsJ that the originating process be treated as a writ and the proceeding be conducted by pleadings was entirely appropriate in the context of the legal and factual issues concerning the deeds. The statement of claim that the plaintiff filed was directed solely toward Marcia’s estate and, while he argues that the onus was on the defendants to plead enforceability of the deeds in their defence, the deeds do not concern Marcia’s estate. However, save for the issue of costs, which can be addressed, the defendants did not point to any detriment concerning the procedural point.

More broadly, it is noted that in Waigani the Court of Appeal recognised circumstances in which the unit holder could be estopped from relying upon the settlement agreements, on account of disentitling conduct and the detriment to the trustee if the agreements made ten years earlier, and the associated arrangement of affairs, were to be undone. The disentitling conduct extended well beyond delay and procedural issues however, and whether such analysis would be appropriate in the current circumstances is likely to depend upon contested factual findings concerning the plaintiff’s conduct and knowledge.

Delay

Probate of the deceased’s will was granted on 8 April 2009. As such, a claim under s 91 of the Act was to be commenced by no later than 8 October 2009. In filing the current application on 26 February 2016, the plaintiff’s claim is delayed by approximately six years and four months.

The plaintiff has provided limited explanation for such a lengthy delay. In his affidavit, he deposed to assuming that he was bound by the terms of the first deed and second deed. He submits that the delay is of little significance in the context of a life estate and lack of real prejudice. However, a number of points may be noted:

(a) Even if it is accepted that for a period the plaintiff assumed that he was bound by the deeds, in 2011 he wrote to Hunter Newns doubting the transparency of the negotiations preceding their execution. In 2013, he engaged Strategic Lawyers to represent him in asserting his rights under the second deed and it may be open to infer, given his earlier doubt, that at that time he reflected upon events surrounding the execution of the deeds and sought advice regarding their validity. No issues of unconscionable conduct or undue influence were raised at that time.

(b) The plaintiff repeatedly refers to his impression, garnered from the will and the asserted representations of the defendants, that he was to receive distributions of income from the testamentary trust. His assertions directed toward the defendants in the period preceding the execution of the deeds appear to lack an adequate factual basis. In 2011 he expressly requested a distribution in his favour and this was rejected, and while Catharine wrote in 2012 suggesting that distributions would be made, these never eventuated.

(c) In March and April 2014, the plaintiff suffered permanent deafness, leading to difficulties in his work environment.

(d) In December 2014, the plaintiff filed an originating motion seeking further provision.

Such circumstances may suggest that, rather than becoming aware that impugning circumstances could render the deeds void, the change in the plaintiff’s circumstances alongside the fact that he had not received distributions from the estate, motivated the commencement of the claim. Further, no explanation has been provided as to why he did not serve the first originating motion and instead allowed another 14 months to pass before commencing a separate proceeding.

Strength of the plaintiff’s claim

The plaintiff has provided little evidence regarding his relationship with the deceased. It appears that, from the age of approximately 21 years, he lived and worked primarily interstate. While the plaintiff refers to visiting Murndal, the contact that he maintained with the deceased, who he describes as ‘authoritarian’, is not clear. Through the Murndal partnership, the plaintiff’s parents seem to have assisted him financially at times, albeit there may have been some ‘equalisation’ of the ledger in 1994. The deceased’s failure to inform the plaintiff of his interest in Marcia’s estate is unlikely to have enhanced their relationship although, on the plaintiff’s case, the deceased was ‘much happier’ once the 1997 loan was executed.

The evidence regarding the plaintiff’s financial position at the time of the deceased’s death is limited. He deposes that at that time he was in Townsville, married with two step-children and a young daughter and working for Telstra. It is not apparent whether he owned the house in Townsville at that stage. While the evidence demonstrates that he previously owned a property in Perth in 1997, it is not clear what became of the proceeds of sale. Further, the note of Marcus in May 2008 refers to the plaintiff ‘cashing in’ a life insurance policy.

The value of the estate is significant, on the defendants’ evidence nearly $7 million, although the plaintiff disputes this and suggests that the value at the time of the deceased’s death was closer to $15 million.

The deceased died prior to the 2015 amendments to the Act.[77] As such, placing the issue of the deeds to one side, it is possible for the plaintiff to commence a claim under Part IV of the Act as an adult child. While he deposes that he worked hard at Murndal and that, in part, the farm is the ‘fruits of [his] labour’, the work appears restricted to that performed in his childhood, or otherwise a period after leaving school during which he was paid station hand wages.
[77]Justice Legislation Amendment (Succession and Surrogacy) Act 2014 (Vic).

When this application was commenced, the plaintiff and his wife had equity of $110,000 in a Townsville property, a self-managed superannuation fund of $150,000 and separate superannuation accounts of $55,000. Their cars were on finance and the plaintiff identifies that he was then receiving $500 per month from income protection insurance. There is no evidence as to how the payments totalling $220,000 that the plaintiff received in 2009 contributed to those assets.

The current position of the estate is not apparent on the evidence.

It is difficult to assess the strength of the plaintiff’s claim in light of the lack of evidence concerning his assets in 2008, and the value of the estate now. Overall, however, chiefly based upon the size of the estate, it may be that his claim is not lacking in merit. Further, since the death of the deceased, the plaintiff’s needs may have increased. Such issues, however, would be viewed in light of the evidentiary approach taken to the deeds.

Prejudice to the defendants

The defendants have not made submissions on the issue of prejudice. It appears that the plaintiff’s claims of unconscionable conduct and undue influence are likely to put in dispute evidence of telephone conversations that occurred in 2009, a delay of six years (or, on the most favourable approach to the plaintiff, an unexplained delay of 14 months).

A question that may arise is the plaintiff’s change in circumstances between the statutory period in which he could have claimed, and now. In Stojanovski v Stojanovski,[78] for example, a marked change in the applicant’s needs between the time of the deceased’s death and the application for extension was viewed as prejudicial.[79] However, in Harrison v Harrison, Kaye J viewed changes since the date of death more broadly as being relevant to the exercise of the discretion.[80]

Conclusions

[78][2019] NSWSC 1713.

[79]Ibid [495] (Robb J).

[80](n 21) [301]. See also Erlich v Fleiszig (n 23) [193] (Lansdowne AsJ).

The question before the Court is whether the plaintiff’s application under s 99 for an extension of time has no real prospect of success. That section provides the Court with a broad discretion, in which a number of relevant factors need to be balanced, in answering the question of whether it is just in all the circumstances for time to be extended.

The deeds are a significant factor to which the Court will have regard. Clearly, the plaintiff was aware of his right to pursue a Part IV claim. Although the evidence leans toward a finding that they were executed by the plaintiff as a free and voluntary act, a degree of doubt surrounds:

(a) the applicable legal approach to be adopted;

(b) issues of fact concerning the pressure applied by the defendants prior to the plaintiff executing the deeds and the role of Maddens in providing independent advice; and

(c) potentially mixed issues of fact and law surrounding the information that was known to the plaintiff when he entered the deeds and any associated breach of fiduciary duty.

It may be that the deeds cannot be enforced on grounds of public policy. In such a case, however, they may be used as evidence of what the plaintiff viewed as adequate provision at the time, and raise the issue of whether there is any real benefit in the plaintiff pursuing his statutory claim. Relevant in this regard would be the advanced payment of funds and the distribution of $120,000 from the Pybus Trust.

Looking beyond the deeds, significant issues concerning delay arise. These have not been explained in any detail. Additionally, certain evidence is suggestive that, in light of the lack of financial assistance the plaintiff received from the income of the estate and his increased needs, he may simply have changed his mind regarding the adequacy of the benefits received under the deeds.

On the other hand, the defendants have not pointed to any specific prejudice.

Ultimately, particularly with reference to the caution with which s 63 should be applied, the Court is not in a position to conclude that the application by the plaintiff for an exercise of discretion in his favour under s 99 has no real prospects of success. That is, it is not readily apparent how factors such as the strength of the plaintiff’s case, unexplained delay, and his change in circumstances will be balanced, and weighed against issues arising from the deeds, in the exercise of discretion.

Should the matter proceed to trial?

In the event that the preceding conclusion is incorrect, the Court would otherwise have viewed it as appropriate for the matter to proceed to trial pursuant to s 64 of the CPA. This conclusion is reached on the basis of the legal issues raised concerning the deeds, the approach to factual matters when considering allegations of undue influence and unconscionable conduct and that, ultimately, at issue is the plaintiff’s prospect of success concerning an exercise of broad discretion.

Conclusion

The defendants’ application for summary dismissal is rejected. In light of the orders of Mukhtar AsJ, the parties are to forward minutes of proposed orders for the proceeding to be listed for trial by 4pm on 25 September 2020.

Costs

The costs of the plaintiff of and incidental to the summary dismissal application are to be paid by the defendants.

The plaintiff concedes that he is liable for the defendant’s costs thrown away in relation to the discontinued part of his claim. He submits, however, that he should not have to pay such costs now, as they would ‘add another weapon’ with which Marcus could continue his alleged threats. The Court rejects such a course in light of:

(a) the costs of the current application falling in the plaintiff’s favour;

(b) the lengthy procedural history of this matter, part of which has been complicated by the plaintiff failing to plead his Part IV claim when ordered to; and

(c) the fact that the alleged threats remain untested.

SCHEDULE OF PARTIES

ROBERT EDMUND WINTER-COOKE	Plaintiff
-and-
SAMUEL MARCUS WINTER-COOKE (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE)	First Defendant
-and-
CATHARINE FRANCES WINTER-COOKE (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE)	Second Defendant
v
PHILIPPA ROSEMARY RISBEY (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE)	Third Defendant
-and-
WINTER COOKE (MURNDAL) PTY LTD (ACN 004 314 443)	Fourth Defendant

[2020] VSC 588

11 September 2020