Scott MacRae Investments Pty Limited v Baylily Pty Limited

[2012] NSWSC 823

Supreme Court

New South Wales

Medium Neutral Citation:	Scott MacRae Investments Pty Limited -v- Baylily Pty Limited [2012] NSWSC 823
Hearing dates:	16 July 2012
Decision date:	16 July 2012
Jurisdiction:	Equity Division - Commercial List
Before:	Hammerschlag J
Decision:	Order in terms of paragraph 1 of the Notice of Motion dated 9 July 2012
Catchwords:	SUCCESSION - Family provision - Application under s 95 Succession Act 2006 (NSW) for approval of release of rights to apply for family provision orders as provided by a deed of settlement, release and indemnity following protracted litigation - approval granted upon consideration of all the circumstances
Legislation Cited:	Succession Act 2006 (NSW)
Category:	Principal judgment
Parties:	Scott MacRae Investments Pty Limited ACN 134 101 750 - First Plaintiff Scott Alexander MacRae - Second Plaintiff Baylily Pty Limited ACN 003 993 397 - First Defendant Pacific Lennox Properties Pty Limited - Second Defendant Brooklet Pastoral Co No. 2 Pty Limited - Fourth Defendant Cuefax Pty Limited - Fifth Defendant David Robert Alexander MacRae - Sixth Defendant Susan Beverley MacRae - Seventh Defendant
Representation:	Counsel: A.J. Grant - Plaintiffs W.G. Muddle SC with M. Green -Sixth and Seventh Defendants Solicitors: Mitchell Lawyers - Plaintiffs Bruce & Stewart Lawyers - Sixth and Seventh Defendants
File Number(s):	2009/298683

EX TEMPORE Judgment

1. HIS HONOUR:This is an application brought by Notice of Motion filed 9 July 2012 for an order pursuant to s 95 of the Succession Act2006 (NSW) ("the Act") approving the release by the second plaintiff of his rights to apply for family provision orders in relation to the whole or any part of the estates of his father, the sixth defendant (David Robert Alexander MacRae), and/or his mother, the seventh defendant (Susan Beverley MacRae), as provided for in Recital II and cl 6 of a Deed of Settlement, Release and Indemnity dated and executed by the first, second, fourth, fifth, sixth and seventh defendants and by the first and second plaintiffs on 6 July 2012 ("the Deed").

1. The application is supported principally by three affidavits, being those of the second plaintiff affirmed 12 July 2012 and the sixth and seventh defendants sworn on 11 July 2012. In addition, the Court was taken to the following further affidavits which give the background to the present application, explaining how it comes about: the second plaintiff affirmed 16 December 2011, Robert Gorczyca, solicitor, sworn 23 March 2012, S P Mitchell, solicitor, sworn 16 April 2012 and 10 May 2012.

1. The first plaintiff is a company associated with the second plaintiff.

1. The Deed brings about resolution of proceedings initiated by the plaintiffs on 9 July 2009 against each of the defendants.

1. For a substantial period until the matter was fixed for hearing I had management of it. The proceedings were complex and hard fought in every respect. They have a lengthy and complex procedural history, including at least one trip to the Court of Appeal. There were significant interlocutory disputes about discovery.

1. After the proceedings were fixed for hearing, the parties, except for one of the defendants, a company under administration, went to mediation. With the assistance of Mr Morling QC, the mediator, settlement was reached and the terms are embodied in the Deed.

1. Section 95 of the Act is in the following terms:

(1)A release by a person of the person's rights to apply for a family provision order has effect only if it has been approved by the Court and to the extent that the approval has not been revoked by the Court.

(2) Proceedings for the approval by the Court of a release of a person's rights to apply for a family provision order may be commenced before or after the date of the death of the person whose estate may be the subject of the order.

(3) The Court may approve of a release in relation to the whole or any part of the estate or notional estate of a person.

(4) In determining an application for approval of a release, the Court is to take into account all the circumstances of the case, including whether:

(a) it is or was, at the time any agreement to make the release was made, to the advantage, financially or otherwise, of the releasing party to make the release, and

(b) it is or was, at that time, prudent for the releasing party to make the release, and

(c) the provisions of any agreement to make the release are or were, at that time, fair and reasonable, and

(d) the releasing party has taken independent advice in relation to the release and, if so, has given due consideration to that advice.

(5) In this section:

"release of rights to apply for a family provision order" means a release of such rights, if any, as a person has to apply for a family provision order, and includes a reference to:

(a) an instrument executed by the person that would be effective as a release of those rights if approved by the Court under this section, and

(b) an agreement to execute such an instrument.

1. The matters which I am required to take into account are enumerated in subsection (4).

1. It is not necessary to recite in detail the terms of the Deed. I have had regard to them. The Deed is exhibited to the second plaintiff's affidavit.

1. The terms of the settlement involve, amongst others, a payment of $1.4 million to the second plaintiff, which he has already received. He is released from certain liabilities and indemnified in respect of certain liabilities, including potential liabilities to the Office of State Revenue and to the company defendant which is in administration. Costs orders which have been made against him are to be forgiven.

1. The material before the Court includes financial information about the second plaintiff. It draws attention to the difficulties which he may have encountered, in the event that the proceedings were successful, in recovering any moneys which might have been the subject of a verdict.

1. The settlement is undoubtedly to his and his company's financial advantage and is prudent. It is also to his advantage otherwise because it brings to an end an arduous and somewhat unfortunate dispute between him and his parents and enables all of them, hopefully, to make a fresh start.

1. The terms of the Deed, which I have carefully reviewed, are, in my view, fair and reasonable. The evidence establishes that the second plaintiff has taken independent legal advice and has given due consideration to that advice. The second plaintiff has a law degree and an economics degree. He is undoubtedly commercially and financially astute.

1. Before me, the second plaintiff was represented by experienced junior counsel and the sixth and seventh defendants by senior counsel assisted by experienced junior counsel. The sixth and seventh defendants support the application.

1. In all of the circumstances, I have no hesitation in coming to the view that the requirements of s 95(4) of the Act have been met. There will accordingly be an order in terms of paragraph 1 of the Motion.

1. The Court also made further orders disposing of the proceedings by consent.

**********

Decision last updated: 20 July 2012