SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
SMITH v SMITH & ORS
[2018] SASC 93
Judgment of Judge Bochner a Master of the Supreme Court
4 July 2018
PROCEDURE
Disclosure - Inheritance (Family Provision) Act 1972 (SA)
Inheritance (Family Provision) Act 1972 (SA); Succession Act 2006 (NSW); Administration and Probate Act 1958 (Vic); Supreme Court (Civil) Rules 2006 , referred to.
McCosker v McCosker (1957) 97 CLR 566; Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; Goodman v Windeyer (1980) 144 CLR 490; Bosch v Perpetual Trustee Co [1938] AC 463; Singer v Berghouse (No 2) (1994) 181 CLR 201; Vigolo v Bostin (2005) 221 CLR 191; Bowyer v Wood (2007) 99 SASR 190; In the Estate of Guthrie (1983) 32 SASR 86; Foley v Ellis [2008] NSWCA 288; Kay v Archbold [2008] NSWSC 254; Diver v Neal [2009] NSWCA 54; Estate of May Berry (deceased) [2016] NSWSC 130; Meres v Meres [2017] NSWSC 285, considered.
SMITH v SMITH & ORS
[2018] SASC 93
In this matter, the plaintiff brings a claim pursuant to the Inheritance (Family Provision) Act 1972 (SA) (the Act), for further provision from the estate of her late father (the deceased). It appears that every aspect of this claim is contested and the parties have generally taken an extremely adversarial approach to this action. I note that the two personal defendants are brothers of the plaintiff.
The deceased was a farmer. The land on which he farmed is owned by Lachmarden Pty Ltd, as trustee of the DG & MM Smith Family Trust. Dema Vista Pty Ltd, the third defendant in this action is the trustee of the DG Smith Family Settlement Trust and conducts the farming business on the land owned by Lachmarden. The deceased also created a third family trust, the Denby Smith Family Trust. I do not know who is the trustee of the Denby Smith Family Trust or how it fits in with the DG & MM Smith Family Trust and the DG Smith Family Settlement Trust. I do not know what, if any, assets it has.
At the time of the deceased’s death, Lachmarden was the registered proprietor of land with an unencumbered value in excess of $8,000,000.
By his will, the deceased left the plaintiff a legacy of $20,000, to be held on trust for her and distributed at the discretion of the trustees.
To the first defendant, he gave all of his interest in Lachmarden and the DG & MM Smith Family Trust, and all of his interest in Dema Vista and the DG Smith Family Settlement Trust, on the condition that he pay to the third defendant the sum of $450,000 for his interest in each of the companies (that is, for the gift to be effective, the first defendant was to pay to the third defendant the sum of $900,000 in total).
The deceased gave the third defendant a…
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- AGLC
- Smith v Smith [2018] SASC 93
- Case
- [2018] SASC 93
- Decision Date
CaseChat Overview and Summary
The court was tasked with discerning which documents were pertinent to the issues at hand, particularly those related to the deceased's transfers of assets to the trustees of Lachmarden and Dema Vista, as well as the financial dealings of the defendants in relation to these trusts and other family trusts. The court needed to decide on the relevance of historical transfer documents versus current financial records and assets held by the trusts. Furthermore, the court had to assess the necessity of disclosing tax returns, financial accounts, and other documents pertinent to the defendants' income, taxation, and financial positions.
In reaching its decision, the court considered the relevance of the documents to the current dispute and the necessity for disclosure in the context of the family trusts and the deceased's estate. The court held that certain historical transfer documents were not relevant to the issues in dispute, focusing instead on the current financial records and assets. It ruled that documents relating to the defendants' income, taxation, and financial positions from the date of the deceased's death to the present were relevant and must be disclosed. This included tax returns, financial accounts, and records of assets and liabilities. The court also found that documents relating to insurance policies and encumbrances over certain properties were relevant and required disclosure.
The final orders of the court mandated the disclosure of specific documents by the defendants, including tax returns, financial accounts, trust deeds, and records of assets and liabilities. These orders were aimed at ensuring transparency and providing the necessary information for the resolution of the issues between the parties.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
I do not consider that the documents evidencing the transfer by the deceased of assets to Lachmarden are relevant to the issues in dispute between the parties. While I consider that the assets of Lachmarden as trustee are relevant, there is no evidence before me to suggest that the transfer of those assets many years previously is in any way relevant. 14. All documents directly relevant to the transfer and consideration. (SOC 51F/D51F) I do not consider that the documents evidencing the transfer by the deceased of assets to Dema Vista are relevant to the issues in dispute between the parties. While I consider that the assets of Dema Vista as trustee are relevant, there is no evidence before me to suggest that the transfer of those assets many years previously is in any way relevant.15. All documents directly relevant to the first defendant’s income and taxation for the financial years ended June 2012 to June 2017, including tax returns and ATO Notices of Assessments. These documents are relevant and must be disclosed. The period for which disclosure is to be made is from the date of the deceased’s death to the present. 16. All documents directly relevant to moneys received or paid by the first defendant, or at the first defendant’s directions, associated with the inter vivos transfer of shares in Lachmarden Pty Ltd and Dema Vista Pty Ltd from Denby Smith to the first defendant on 5 September 2013. As previously set out, these documents are directly relevant. Even if moneys were paid by the first defendant to the third defendant (rather than by the deceased) on the basis of the inter vivos transfer to the first defendant, these documents are relevant as part of the gift to the first defendant.17. All documents directly relevant to moneys received by the first defendant as a beneficiary of the DG Smith Family Settlement Trust, the DG & MM Smith Family Trust, and the Denby Smith Family Trust during the period 1 July 2012 to date. These documents must be disclosed by the first defendant as part of his own asset position, on the basis that disclosure is to occur from the date of the deceased’s death.18. The financial accounts for the DG Smith Family Settlement, the DG & MM Family Trust, and the Denby Smith Family Trust for the period 1 July 2012 to date. This category has already been dealt with.19. The trust deeds and deeds of variation thereof for the DG Smith Family Settlement Trust, the DG & MM Smith Family Trust, and the Denby Smith Family Trust. This category has already been dealt with.20. Loan account ledgers for the first defendant defendant in the DG Smith Family Settlement Trust, the DG & MM Smith Family Trust, and the Denby Smith Family Trust. This category has already been dealt with.21. The first defendant’s current assets and liabilities. These documents are relevant and must be disclosed. In summary, the defendants are to make disclosure of the following:1The tax returns of the first defendant for the period from the date of the deceased’s death to the present;2The tax returns of the third defendant for the period from the date of the deceased’s death to the present;3Documents relating to any inter vivos gift from the deceased to the first and third defendants, including any moneys paid by the first defendant to the third defendant at the direction of the deceased;4The financial accounts including all loan account ledgers for Dema Vista, Lachmarden, the DG Smith Family Settlement Trust and the DG & MM Smith Family Trust from the date of the deceased’s death to the present;5The trust deeds and any variation thereto of the DG Smith Family Settlement Trust, the DG & MM Smith Family Trust;6The first and third defendants’ assets and liabilities;7Documents relating to insurance policy numbers 75538 and 76314; 8Any encumbrances over the properties referred to in paragraph 51C of the Second Statement of Claim.