Smith v Paterson
[2023] WASC 215
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: SMITH -v- PATERSON [2023] WASC 215
CORAM: MASTER SANDERSON
HEARD: 24 JANUARY 2023
DELIVERED : 30 JUNE 2023
FILE NO/S: CIV 2024 of 2022
BETWEEN: DARRYL LAWRENCE SMITH
Plaintiff
AND
PETA PATERSON
First Defendant
WAYNE JAMES PATERSON
Second Defendant
Catchwords:
Pre-action discovery - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | AJ Power |
| First Defendant | : | EM Heenan |
| Second Defendant | : | EM Heenan |
Solicitors:
| Plaintiff | : | Zafra Legal |
| First Defendant | : | Lane Buck & Higgins Narrogin |
| Second Defendant | : | Lane Buck & Higgins Narrogin |
Case(s) referred to in decision(s):
Cock v Cooke (1866) LR 1 P&D 241
Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14
Re Anziani [1930] 1 Ch 407
MASTER SANDERSON:
This was the plaintiff's application for pre‑action discovery. It is one of those unusual cases where the defendant says even on the most cursory examination of the relevant facts, the plaintiff simply has no cause of action. The defendants' accept for the purposes of an application of this nature it is only necessary for the plaintiff to establish it 'may' have a cause of action. That is a low threshold - a lower threshold than would be applicable on a defendant's summary judgment application. Nonetheless that was the basis upon which the application was defended.
Given the narrow basis of the defendants' opposition to the application, it is unnecessary for me to recite the law or deal with the other factors to be considered when determining whether pre‑action discovery is appropriate. The defendants conceded the only issue between the parties was the strength of the plaintiff's case. For the sake of completeness, I need only mention the parties accepted the application was to be determined in line with the principles set out by Buss JA (as his Honour then was) in Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd.[1]
[1] Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14 [18] ‑ [19].
At the centre of the dispute between the parties is a document which is titled 'Deed of Declaration of Trust'. A copy of this document appears as attachment DLS‑1 to an affidavit of the plaintiff sworn 29 August 2022. I will set out the document in full.
DEED OF DECLARATION OF TRUST is made on 17th October 2004
I Stuart Bruce Smith and Thelma Dawn Smith, both of Care of Post Office Box 8, Pingelly, Western Australia.
Both Mr Stuart Bruce Smith and Mrs Thelma Dawn Smith have decided to give all our properties, land bonds, shares, live stock and farm machinery to Darryl Lawrence Smith. This to take effect when Stuart Bruce Smith and Thelma Dawn Smith are deceased.
We are giving permission for Darryl Lawrence Smith to take control of all our belongings and the above items listed when myself and my wife are deceased.
From the above if there has been any changes Darryl Lawrence Smith will be notified with in Seven days in writing what has been altered, if this has not done the items listed in this document is not legal.
If myself Stuart Bruce Smith and Thelma Dawn Smith become mentally ill unable to act of sound mind we both give Darryl Lawrence Smith permission to take over all the above. This is to take effect on the day dated above.
_________________________________________________________
Dated this 17th day of October 192004
_________________________________________________________
At the foot of the same page as the above appears, there is a heading 'TRANSFEROR/S SIGN HERE (NOTE 7)'. The document bears what appears to be the signatures of Stuart Bruce Smith and Thelma Dawn Smith. On the following page, there are signatures of the three parties to the Deed. The Deed is also signed by Karen Annette Smith who is not mentioned in the document. Nor does she feature in the plaintiff's affidavit. The fact that she has signed the document adds another layer of confusion to what is already a confusing document.
The background facts as taken from the plaintiff's affidavit are as follows. The plaintiff is a retired farmer who lived in the Pingelly region until he was 21. His mother was Thelma Dawn Smith. Stuart Bruce Smith was his stepfather. The plaintiff has two sisters, Noelene Dowsett and Peta Paterson. It is Ms Paterson who has witnessed the signatures on the document.
The plaintiff says during their lifetimes, his mother and stepfather acquired a large amount of farming land as well as livestock, personal property and personal wealth. He says they had a significant share portfolio, including shares in the Commonwealth Bank and Wesfarmers. The parties entered into the Deed on 17 October 2004. The Deed was prepared by Mr Stuart Smith. Why the parties entered into the Deed is not explained in the affidavit of the plaintiff and is probably irrelevant in any event. The way the plaintiff frames his case is set out in par 24 of his affidavit. That paragraph reads as follows:
Based on the foregoing, I honestly believe I may have a legal cause of action against Peta and Wayne on the basis that:
a.there is credible evidence that the trust property secured by the Deed on 17 October 2004 has been dissipated to other parties, in breach of trust;
b.I am entitled to declaratory relief that the trust property currently held by Stuart's deceased estate, Wayne, Peta, or any other third party, is in fact held on trust for my benefit;
c.I am further entitled to consequential orders for the vesting of that trust property to myself;
d.I am entitled to claim for compensation and / or an account of profits for the breach of trust.
The plaintiff's submissions identify two potential causes of action in respect of which discovery is sought. They are:
(a)claims to follow property allegedly the subject of a trust said to have been declared by the 'Deed of Declaration of Trust'; and
(b)a claim for promissory estoppel allegedly 'codified' in the 'Deed of Declaration of Trust'.
The defendants resist the application on two grounds. First, it is said the document is unstamped and is inadmissible to support the application. Second, it is said that properly considered, the 'Deed of Declaration of Trust' is a testamentary instrument and the plaintiff has no claim for its alleged breach. Further, the supposed claim to a promissory estoppel is no more than assertion and speculation and does not lie against the defendants to this application.
It is convenient to deal with the second argument first. This is clearly a testamentary instrument. In written submissions, counsel for the defendants referred to the cases of Cock v Cooke (1866) LR 1 P&D 241 and Re Anziani [1930] 1 Ch 407. Those two cases detail what is a well established principle. A document which is intended to have effect after death is testamentary. That is the way the document here operates. It is not possible to interpret this document as an inter vivos declaration of trust. It is said expressly that the 'gift' is intended to take effect upon the donor's death. It cannot therefore be said any inter vivos transfer of the property by Stuart Smith and/or Thelma Smith is in breach of trust or that the defendants received trust property. Nor is it arguable that either Stuart Smith or Thelma Smith breached any obligation or duty owed by them as trustee to the plaintiff.
Insofar as an action for promissory estoppel is concerned, the plaintiff must establish, among other things, that he acted or abstained from acting in reliance on an assumption or expectation induced in him by another and that the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled. In advancing that argument, the plaintiff faces three difficulties which in my view are insurmountable.
First, there is no evidence that the plaintiff acted or abstained from acting in any way in reliance on an assumption or expectation that he would receive all of the property of Stuart Smith and/or Thelma Smith upon their death.
Second, the text of the passage of the 'Deed of Declaration of Trust' which the plaintiff submits 'codified' a cause of action for promissory estoppel has an effect opposite to that for which he contends. The document requires Stuart Smith and Thelma Smith to notify the plaintiff if they change their decision to give their properties to the plaintiff upon their death. If no notice is given within the specified seven days, then 'this document is not legal'. It would appear the properties have been transferred and no notice was given. That being so, pursuant to the terms of the document, the 'trust' falls away.
Third, if any claim for promissory estoppel could be made out, the claim would lie against the estates of Stuart and Thelma Smith. It would not lie against the defendants. As submitted by the defendants, there is no power under O 26A r 4 of the Rules of the Supreme Court 1971 (WA) to seek discovery from the defendants, even if some equitable remedy of tracing might be available if a breach of trust was established.
In these circumstances, it is not necessary for me to deal with the question of whether or not it is open on this application for the plaintiff to rely on the unstamped document.
The plaintiff's application will be dismissed. Subject to hearing from the parties, the plaintiff ought to pay the defendants' costs of the application including the reserved costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CM
Associate
30 JUNE 2023
0
1
0