Riddell v Johnson

[2013] NSWCA 293

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Riddell v Johnson [2013] NSWCA 293

Hearing dates:

30 August 2013

Decision date:

30 August 2013

Before:

Basten JA at [1];
Ward JA at [17]

Decision:

(1) Dismiss the summons seeking leave to appeal from the judgment given in the Equity Division on 20 March 2013.

(2) Order that the applicant pay the costs of the respondents in this Court.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

SUCCESSION - wills - construction and effect of testamentary disposition - clause of will explained daughter not provided for because testatrix had provided "substantial financial support" to her business ventures "during my lifetime" - whether clause released applicant from indebtedness to estate - whether any alternative construction available -applicant, husband and testatrix co-guarantors on loan to family company - house of testatrix security for loan

Legislation Cited:

Succession Act 2006 (NSW), s 32
Supreme Court Act 1970 (NSW), s 101
Uniform Civil Procedure Rules 2005 (NSW), r 28.2

Category:

Principal judgment

Parties:

Louise Margaret Riddell (Applicant)
Christopher Hart Johnson as Executor of the Estate of the Late Helen Margaret Johnson (First Respondent)
Theresa Casey as Executor of the Estate of the Late Helen Margaret Johnson (Second Respondent)

Representation:

Counsel:

J Jobson (Applicant)
T Maltz (Respondents)
Solicitors:

Andresakis & Associates (Applicant)
Coleman Greig Lawyers (Respondents)

File Number(s):

CA 2013/109554

 Decision under appeal 

Jurisdiction:

9111

Citation:

Estate Late Helen Margaret Johnson Riddell v Casey and Johnson [2013] NSWSC 224

Date of Decision:

2013-03-20 00:00:00

Before:

Lindsay J

File Number(s):

SC 2010/283817

Judgment

1. BASTEN JA: The late Helen Margaret Johnson died on 9 June 2010. She was survived by three offspring. By a will dated 22 March 2007 she left the net proceeds of sale of her residence and the residue of her estate to be divided equally between her son Christopher Johnson and her daughter Anne Casey. They were appointed executors and trustees. There were small distributions to her grandchildren.

1. She was also survived by a daughter, Louise Margaret Riddell, the applicant in these proceedings. Clause 6 of her will was a statement to the following effect:

"6 I have not made any provision for my daughter LOUISE MARGARET RIDDELL in the previous clause 5 of this Will because I have already given substantial financial support to her and her husband in their business ventures during my lifetime."

1. At the time of death of the deceased, there was a loan outstanding to ING Bank (Australia) Ltd from a family company, Scrapbook Cottage Pty Ltd ("Scrapbook"). Scrapbook's obligations under the loan agreement were secured by guarantees given by the deceased, the applicant and the applicant's husband. The guarantee given by the deceased was secured by a mortgage over the only substantial property in the estate, namely her residence at Breakfast Road, Marayong.

1. In March 2012, the property was sold and the loan to the bank was paid out. The executors acting for the estate sought to recover from each of the applicant and her husband a contribution of "at least one third of the amount paid" to the bank. No payments being forthcoming, on 25 June 2012 the executors commenced proceedings in the District Court against the applicant, her husband and Scrapbook.

1. By a summons filed in the Equity Division on 21 November 2012, the applicant sought to raise a question of construction as to the operation of clause 6 of the will. The applicant submitted before the trial judge (Lindsay J) that the effect of clause 6 was to release the applicant from any present or prospective indebtedness that she might have to her late mother's estate arising from her liability as guarantor of the company loan agreement.

1. Lindsay J concluded that clause 6 did not effect any disposition of property and, in particular, did not cancel or forgive any liability or debt of the applicant. He concluded:

"Clause 6 offers an explanation for the absence of any provision for the first plaintiff in the deceased's will. That explanation is offered in terms that might have been thought to provide an answer to any prospective application by the first plaintiff for family provision relief."

1. The applicant seeks leave to appeal from the judgment and orders of Lindsay J. She needs leave because the parties accept that the amount sought (approximately $84,000) is less than the amount permitting an appeal without leave: Supreme Court Act 1970 (NSW), s 101(2)(r).

1. The relief sought in the draft notice of appeal is somewhat obscure, but that notice states that the applicant appeals "from the whole of the decision below". That, however, cannot be intended. The first two orders made by the trial judge regularised the proceedings by joining the applicant's husband and Scrapbook as plaintiffs and designating them as first, second and third plaintiffs in the proceedings. Order 3 identified a separate question to be determined, by reference to the first and second claims for relief made in the summons, pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 28.2. None of those orders is in dispute. Order 4 declared that "clause 6 of the Will is not dispositive of any property to the first plaintiff". By order 5 the summons was otherwise dismissed and, by orders 6 and 7, the plaintiffs were required to pay the costs of the defendants to be assessed on the ordinary basis.

1. The focus of the present application was the challenge to the declaration in order 4. The substance of the applicant's argument was that the proceeds of the loan obtained by Scrapbook were used to make a payment to the deceased's former husband and that neither Scrapbook nor the two remaining guarantors (the applicant and her husband) obtained any financial benefit from the loan.

1. The applicant gave evidence by way of affidavit that Scrapbook was the owner of a business which involved her husband and herself and her parents. Each put money into the business and each took money from the business. She claimed that the loan was obtained to pay out her father after her parents separated and he no longer played any role in the business.

1. That evidence provided some background explanation to the statement in clause 6 of the will that the deceased had provided financial support to the applicant and her husband in their business ventures. That statement, which related to support provided "during my lifetime" could not sensibly be understood as meaning that she was now providing further substantial financial support, by accepting full responsibility for the Scrapbook loan. To construe an explanation as to why provision is not made as constituting a form of provision is not a tenable reading of the clause.

1. The conclusion of the trial judge to that effect is clear and correct beyond doubt. Leave to appeal should be refused because no alternative construction is available.

1. One further point was sought to be raised. Some form of application had been made for access to the file of the deceased's solicitors. Access had apparently been refused, a claim to client-lawyer privilege being upheld. There was an application to challenge the ruling on evidence by the trial judge to the effect that privilege was not waived with respect to the file.

1. The ostensible purpose of seeking access to the file was to obtain evidence of the testator's intention, which is admissible to assist in the interpretation of a will if any part of the will is meaningless, ambiguous on its face, or ambiguous in the light of surrounding circumstances: Succession Act 2006 (NSW), s 32(1). However, as the section expressly states, such evidence is not admissible to establish surrounding circumstances which could give rise to ambiguity: s 32(2).

1. Because the will is not meaningless or in any sense ambiguous, either in its language or in the light of surrounding circumstances, there is no occasion to seek extrinsic evidence of the intention of the deceased and the question of privilege falls away.

1. The Court makes the following orders:

(1) Dismiss the summons seeking leave to appeal from the judgment given in the Equity Division on 20 March 2013.

(2) Order that the applicant pay the costs of the respondents in this Court.

1. WARD JA: I agree with Basten JA and with the orders his Honour proposes.

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Decision last updated: 03 September 2013