Smith v Smith - [2018] SASC 93

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 property, and the residue was largely divided between the first and third defendants.
Despite the bequests in his will as to his interests in Lachmarden and Dema Vista, prior to his death, the deceased transferred all of his interests in these companies and the trusts of which they were the trustees, to the first defendant. Thus, contrary to the terms of the will, the first defendant received all of the interests in Lachmarden and Dema Vista and the trusts of which they are the trustee, without the third defendant receiving the $900,000 contemplated by the will.
The plaintiff has, by FDN56, sought further disclosure from the defendants. In particular, she seeks disclosure of documents which show the financial position of the first and third defendants, documents relating to the inter vivos transfer of shares from the deceased to the first defendant including any payments made to the third defendant associated with this transfer, any distributions received by the first and third defendants from any of the trusts, the accounts, trust deeds and deeds of variation of each of the trusts, the accounts of Lachmarden and Dema Vista and loan accounts in relation to each of the deceased, first and third defendants with the trusts and Dema Vista. The documents sought by the plaintiff are set out in a letter found at MG1 to FDN57.
The defendants have refused to provide the documents sought on the basis it is a fishing expedition by the plaintiff, to obtain documents in relation to assets which do not form part of the estate, and so are not relevant to the plaintiff’s claim for further provision, or are not relevant more generally.
I must say that I found the defendant’s response to the plaintiff’s letter of request (found in exhibit FMS 8 to FDN59) somewhat difficult. For example, in relation a request for documents addressing the third defendant’s income and tax for the financial years ending June 2012 to June 2017, they say that some of the documents are irrelevant, some tax returns will be disclosed when they come to hand and “there is no requirement to disclose document which have never existed”. In addition, they say that a statement of assets will be filed prior to trial. It is not clear to me what documents (if any) the defendants say have never existed, whether they intersect with the tax returns which are to be provided when he has them, and whether there is any relation between this statement and the third defendant’s statement that a statement of assets will be filed prior to trial. The defendants make the same statement, “there is no requirement to disclose document which have never existed” in relation to a number of the documents sought by the plaintiff, without confirming that the documents do not in fact exist. This is an unhelpful way to address the plaintiff’s requests. If the documents do not exist, the defendants should say so categorically, and if they do not currently exist, but are in the process of preparation, then this should also be confirmed. It appears to me that the manner in which the defendants have responded to the plaintiff’s request is unnecessarily unhelpful in that it leaves unclear what documents are actually in existence, and which documents the defendants say are irrelevant for a range of reasons.
Before I consider the arguments made by the parties, I need first to deal with two submissions put by the defendants, which can be dealt with shortly. The first is that at this stage of the proceedings, they are only obliged to disclose documents which are relevant to the jurisdictional question, that is, whether the plaintiff has been left without adequate provision for her proper maintenance, education and advancement in life.[1] This submission is erroneous. No application has been made to have the jurisdictional question dealt with in a separate trial to the question of the exercise of discretion. Given that both questions are to be dealt with in the same trial, disclosure must be made now in relation to all matters in dispute between the parties, that is, both the jurisdictional question and the question of appropriate provision should the plaintiff succeed on the jurisdictional question.
[1] T22.33.
The second submission put by the defendants makes a distinction between evidence and pleadings.[2] The defendants put a submission that the proper time for disclosure of financial documents is at trial, because they amount to evidence. Counsel for the defendants said:
The Supreme Court Rules makes provision for Jamie [the first defendant] to provide updated accounts. That would be an appropriate time period for Jamie and Adam, about six, eight weeks out prior to the trial date to provide evidence of their circumstances at that time.[3]
[2] T23.1-9.
[3] T23.1-9.
This is a most unusual submission, and confuses the roles of the first and third defendant as beneficiaries, with the role of the first defendant as executor. The rule referred to by the defendants is Rule 315 of the Supreme Court (Civil) Rules 2006 (the Rules), which applies only to executors and administrators. If the first and third defendants, as beneficiaries, intend to provide evidence of their “circumstances” to be used at trial, that evidence, so far as it is comprised of documents, must be disclosed now. The distinction between evidence and pleadings plays no role in assessing whether a party’s duty of disclosure has been fulfilled. In addition, if the first and third defendants disclose evidence of their financial position, then this must be disclosed in its entirety, not in such a way as to give a misleading picture of their financial position.
The authorities
Unlike the legislation in other jurisdictions, the Act provides little guidance as to what should be taken into consideration when determining whether a claim under s 7 should succeed.[4] The authorities also take a non-prescriptive approach. However, they all maintain that that the Court must take into consideration all of the relevant circumstances of the case.
[4] See for example s 60 Succession Act 2006 (NSW) and s 91A Administration and Probate Act 1958 (Vic).
In McCosker v McCosker,[5] the following was said by Dixon CJ and Williams J in discussing whether a claimant had been left without adequate provision:
The question is whether, in all the circumstances of the case it can be said that the respondent has been left by the testator without adequate provision for his proper maintenance, education and advancement in life. As the Privy Council said in Bosch v Perpetual Trust Co Ltd, the word “proper” in this collocation of words is of considerable importance. It means “proper” in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator’s ability to meet such claims having regards to this size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regards to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator’s testamentary dispositions to the necessary extent.[6]
(citations omitted)
[5] (1957) 97 CLR 566.
[6] (1957) 97 CLR 566 at 571-572.
In Pontifical Society for the Propagation of the Faith v Scales,[7] Dixon CJ said this, when considering the same question:
What is “adequate” must be relative not only to his needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and the other demands upon it, and also what the testator regarded as superior claims or preferable dispositions.[8]
[7] (1962) 107 CLR 9.
[8] (1962) 107 CLR 9 at 19.
In Goodman v Windeyer,[9] Gibbs J confirmed that the principles set out in Bosch v Perpetual Trustee Co[10] (Bosch) (as referred to in McCosker) are those which apply when a court is dealing with an application under legislation of this nature. He reiterated that when considering such cases, the court must consider, not just the need of the applicant, but all of the circumstances of the case.[11]
[9] (1980) 144 CLR 490.
[10] [1938] AC 463.
[11] (1980) 144 CLR 490 at 496.
The High Court had occasion to consider the matter further in Singer v Berghouse (No 2).[12] The Court again reiterated that the principles set out in Bosch are those to be applied, and gave some content to the circumstances to be considered:
The first question is, was the provision (if any) made for the applicant "inadequate for [his or her] proper maintenance, education and advancement in life"? The difference between "adequate" and "proper" and the interrelationship which exists between "adequate provision" and "proper maintenance" etc. were explained in Bosch v Perpetual Trustee Co. The determination of the first stage in the twostage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.[13]
[12] (1994) 181 CLR 201.
[13] (1994) 181 CLR 201 at 209-210.
Thus the Court makes it clear that the totality of the circumstances must be considered, including those circumstances that pertain to other beneficiaries of the estate.
The views expressed by the High Court were reinforced by it in Vigolo v Bostin.[14] At [122], Callinan and Heydon JJ said:
Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means, and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors.[15]
[14] (2005) 221 CLR 191.
[15] (2005) 221 CLR 191 at [122].
In Bowyer v Wood,[16] the Full Court adopted the principles set out in the authorities that I have referred to above, and concluded that the financial circumstances of beneficiaries (in that case, siblings of the testatrix) other than the claimant were relevant in determining whether the provision made for the claimant was adequate and proper. Debelle J said:
[36] There was no evidence of any kind as to the financial circumstances of the other two siblings of the testatrix or whether they had any claim on the testatrix. Her brother Grant was aged 70 years at the death of the testatrix and her sister Judith was 67 years old. The financial circumstances of the siblings and their families was relevant: Vigolo v Bostin (2005) 221 CLR 191 at [126]. If they were pensioners, the testatrix may have had every reason to assist them. If they were well off, they had little claim on her bounty. There was nothing which suggested that they or any member of the family of each had any moral claim on her estate. There was no evidence whether they had, like the testatrix, received a substantial inheritance on the death of their mother. It is reasonable to infer that, like the testatrix, they would have received such an inheritance. If parties fail to adduce evidence, the court has no alternative but to act on that which is proved: Stott v Cook (1960) 33 ALJR 447 at 448 per Dixon CJ and at 450 per Kitto J.
[16] (2007) 99 SASR 190.
Thus, he makes it explicit that the financial circumstances of other beneficiaries are relevant factors which the Court should take into account when determining a person’s claim for further provision. I do not understand his final sentence to indicate that a failure to adduce such evidence should be condoned or accepted, simply what its consequences would be.
Finally, it is important to consider the decision of the Full Court in In the Estate of Guthrie.[17] In this case, Bollen J, with whom King CJ and Matheson J agreed, said:
Gifts made in [the testator’s] lifetime and any advantages which a testator has conferred upon his children may be taken into account.[18]
[17] (1983) 32 SASR 86.
[18] (1983) 32 SASR 86 at 96.
The relevance of the financial circumstances of other beneficiaries has been confirmed by other jurisdictions within Australia, either in relation to the jurisdictional question, or in relation to the question of how much provision should be allowed. Other jurisdictions have also confirmed that gifts provided during a testator’s lifetime, to other beneficiaries are also relevant. Without canvassing those authorities exhaustively, it is worth noting Foley v Ellis,[19] Kay v Archbold,[20] and Diver v Neal.[21]
[19] [2008] NSWCA 288, where the Court said, at [13]:
The appropriate order is one sufficient to give effect to the statutory purpose. The circumstances of the applicant’s siblings are relevant to the level of provision which ought to be made, both because they tend to place the applicant’s expectations in her family environment, but also because it is their expectations which will be diminished by the order of the Court.
[20] [2008] NSWSC 254, where the Court said, at [31]:
[The defendant] did not make any further disclosure as to the extent of gifts made to him by the deceased during her lifetime. Contrary to his counsel’s submissions, those gifts are relevant.
[21] [2009] NSWCA 54 at [13], where the Court said:
As will be discussed below, it is now well-established that consideration of the adequacy of the provision made by a deceased person to a person having a claim on his or her estate will require reference to community standards, the family circumstances of the parties, the extent of the estate and the circumstances and claims of the testamentary beneficiaries: see McCosker v McCosker [1957] HCA 82 ; 97 CLR 566 at 571–572 (Dixon CJ and Williams J); Singer v Berghouse [1994] HCA 40; 181 CLR 201 at 209–210 (Mason CJ, Deane and McHugh JJ); Vigolo v Bostin at [74]–[75] (Gummow and Hayne JJ) and [114]–[115] (Callinan and Heydon JJ). In many cases, the criteria relevant to the exercise of the power will be largely identical with those relevant to the assessment of the state of satisfaction which conditions the engagement of the power. Nevertheless, there may be additional circumstances relevant to the extent of the provision which is available from the estate, such as the effect of such a payment in terms of the purpose of the statute and the consequences for other beneficiaries which will not be engaged, or not in the same terms, in considering whether the applicant’s provision was otherwise adequate.
For completeness, it is important to note the decisions of Estate of May Berry (deceased)[22] (Berry) and Meres v Meres,[23] (Meres) both decisions of Supreme Court of the New South Wales. In Berry, some of the beneficiaries (and defendants) refused to provide evidence about their financial circumstances. The Court said:
The beneficiaries of the deceased's estate, other than Sandra and Diane, took a deliberate forensic decision not to adduce evidence about their respective financial and material resources. As far back as 19 June, 2015 the Family Provision List Judge (Hallen J) allowed them an opportunity to file such evidence. At a directions hearing held on 31 July, 2015, his Honour formally noted that no beneficiary intended to put on any such evidence.
Having regard to s 61 of the Succession Act, the consequence of this forensic decision is that the Court may disregard any financial claims beneficiaries may have on the deceased's estate, though not moral claims they may have on the bounty of the deceased, in competition with the claims of Sandra and Diane: Bruce v Greentree [2015] NSWSC 1611.[24]
[22] [2016] NSWSC 130.
[23] [2017] NSWSC 285.
[24] [2016] NSWSC 130 at [37]-[38].
Similarly, in Meres, the Court said:
I have earlier noted that the Defendant has chosen not to disclose his financial and material circumstances. He put on no evidence that he was in financial need, or that he would be significantly prejudiced if provision were made in favour of the Plaintiff. The evidence that was read revealed that he had managed his life for many years without any benefit, or expectation of benefit, from the deceased.
The Defendant is married and has two children.
Of course, the Defendant is entitled to elect to remain silent about his financial resources and needs, and simply look to the Court to not disregard the deceased’s freedom of testamentary disposition and the deceased’s disposition to him as a part devisee, regardless of his financial position or needs.[25]
[25] [2017] NSWSC 285 at [83]-[85].

These statements appear to be at odds with the statements previously referred to, where it is indicated that the financial position of beneficiaries is relevant to both the jurisdictional question and the question of quantum. I note that the Court in Berry does not refer to any of Diver v Neal, Foley v Ellis or Kay v Archbold. While the Court in Meres does refer to these cases, it is not in the context of disclosure or otherwise by the defendant of his financial position, rather in relation to the form in which provision might be made,[26] and in relation to what amounts to “proper provision”.[27]
[26] [2017] NSWSC 285 at [92] referring to Diver v Neal.
[27] [2017] NSWSC 285 at [132], where the Court said:
It was said in the Court of Appeal (by Basten JA) in Foley v Ellis [2008] NSWCA 288, at [3], that the state of satisfaction "depends upon a multi-faceted evaluative judgment". In Kay v Archbold [2008] NSWSC 254, at [126], White J said that the assessment of what provision is proper involved "an intuitive assessment". Stevenson J recently described it as "an evaluative determination of a discretionary nature, not susceptible of complete exposition" and one which is "inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific": Szypica v O'Beirne [2013] NSWSC 297, at [40].
These statements also appear to be at odds with basic principles of disclosure; if a document is relevant to an issue in dispute between the parties, then it is disclosable. The High Court has made it very clear, as long ago as 1957 and as recently as 2005 that the financial circumstances of all of the beneficiaries under a will are relevant when determining whether a claimant has been left without adequate provision and whether there has been a “breach by a testator of his duty as a wise and just husband or father”.[28] The Full Court of this Court affirmed the relevance of this material in Bowyer v Wood, and while alluding to the consequences of failure to adduce such evidence did not suggest that this was a proper approach for a defendant to take.
[28] McCosker v McCosker (1957) 97 CLR 566 at 571-572.
The relevance of this material having been established, I do not see how a defendant can elect not to disclose it. This is particularly so where the plaintiff has called for disclosure of these documents. It may be the case that if the plaintiff had not so called for the documents and the defendants failed to disclose them, a comment such as that made by Debelle J in Bowyer v Wood may be warranted. However, where the plaintiff has requested these documents, given the state of the High Court authority, as adopted by this Court, those documents must be disclosed. I do not consider that the approach taken by single judges in the Supreme Court of New South Wales, that the disclosure of such material is at the discretion of the defendant, should be followed in this Court. There is no reason why disclosure in claims made pursuant to the Act should be treated differently to disclosure in any other matters.
I am of the view, therefore, that the authorities I have referred to establish the following principles:
·In addressing the jurisdictional question, the Court must have regard to all of the circumstances of the case;
·This will include, amongst other things, the financial and other resources of the claimant;
·It will also include the financial and other resources of all of the beneficiaries, regardless of whether they have made a claim for further provision themselves, or whether they allege that their own resources are, in the absence of the provision made for them in the testator’s will, inadequate to meet their needs;
·To determine whether a testator has fulfilled his or her duty as a wise and just testator, all of the competing claims on his estate must be weighed. In this context, “claims” does not refer to claims pursuant to the Act; rather, it refers to claims in a broader sense, that is, the categories of persons whom a testator might be expected to benefit under his or her will;
·Inter vivos gifts are relevant when determining whether a testator has fulfilled his or her duty as a wise and just testator;
·The relationship between the testator, the claimant and the other beneficiaries must be examined.
This list is not exhaustive. What is relevant will vary, with each case dependent on its own particular facts and circumstances.
I note, too, that during argument in this matter, neither party relied on any authority in support of their arguments. In particular, the defendants did not refer to any authority which suggested that disclosure in matters under the Act should be treated differently to disclosure generally.
Finally, given that the defendants have indicated that they intend to provide a statement of their financial position prior to and for reliance at trial, I do not understand how they can resist providing that material now.
Bearing these principles in mind, I will now deal with the categories of documents sought by the plaintiff.
1. The third defendant’s income and taxation for the financial years ended June 2012 to June 2017, including tax returns and ATO notices of assessment.
In my view, and in accordance with the principles set out above, these documents are directly relevant and must be disclosed, although not for the time period sought by the plaintiff. The third defendant complains that the time frame is too broad and should be limited to the period from 30 June 2014 to 30 June 2017, i.e. from the period following the death of the deceased. I agree that the time period is too broad. There is nothing in the material before me which suggests why disclosure should be made prior to the death of the deceased. I note that the plaintiff says that she does not know if the third defendant has received distributions from the various family trusts, which is why the broader time frame is sought. The defendants have denied that the third defendant is a beneficiary of the family trusts. There is no evidence before me, other than the plaintiff’s suspicion, that the third defendant is or was a beneficiary of the family trusts. Disclosure should be limited from the date of the deceased’s death.
2. Moneys received by the third defendant, or at the third defendants’ direction, associated with the inter vivos transfer of shares in Lachmarden Pty Ltd and Dema Vista Pty Ltd from the deceased to the first defendant on 5 September 2013.
There is no evidence to suggest that the third defendant received any such payment, save for the plaintiff’s suspicion. In the absence of any evidence that such a payment was made, no order for disclosure will be made. I note that if the third defendant did receive such an inter vivos gift, he must make disclosure of it in accordance with the principles set out in Re Guthrie.
3. Moneys received by the third 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.
Evidence of such payments will be disclosed in the third defendant’s tax returns for the relevant period. Separate disclosure of such payments is not required.
4. The financial accounts for the DG Smith Family Settlement Trust, the DG & MM Smith Family Trust, and the Denby Smith Family Trust for the period 1 July 2012 to date.
The defendants object to production of these documents on the basis that the assets of these trusts do not form part of the deceased’s estate. They also cannot be treated as assets of the beneficiaries of the trusts, as those beneficiaries do not have any legal or equitable interest in those assets.
I accept that the assets of the trusts do not form part of the deceased’s estate, nor do they form part of the assets of either the first or third defendants. Nonetheless, I am of the view that it would be artificial to disregard these assets when considering the financial position of the first defendant. The first defendant has complete control of the trustee of the DG & MM Smith Family Trust and the DG Smith Family Settlement Trust. Thus while it is true to say that beneficiaries other than the first defendant have no more than an expectation of a distribution, this is not the case with the first defendant. He has complete power to distribute to himself as he chooses. In my view, the financial accounts of the DG & MM Smith Family Trust and the DG Smith Family Settlement Trust must be disclosed by the first defendant, as they are relevant to his financial resources. On the evidence before me, I do not consider that the financial accounts of the Denby Smith Family Trust should be disclosed. It is not clear to me who controls that trust, and in the absence of evidence of complete control of it by either the first or third defendants, I accept that its assets should not be taken into account when considering the defendants’ financial position.
5. 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.
I am of the view that the trust deeds and deeds of variation for the DG & MM Smith Family Trust and the DG Smith Family Settlement Trust must be disclosed by the first defendant. This is on two grounds. The first is that, as the first defendant has complete control of the trustees of these entities, it is artificial not to have regard to the terms of the trusts when considering the asset position of the first defendant. The second is that the deceased made an inter vivos gift to the first defendant of his interests in the trusts, not long before his death. In accordance with the principles in Re Guthrie, disclosure must be made in relation to this gift.
6. Loan account ledgers for the third defendant in the DG Smith Family Settlement Trust, the DG & MM Smith Family Trust, and the Denby Smith Family Trust.
In my view, disclosure of loan account ledgers is part of the disclosure of the financial accounts of the DG & MM Smith Family Trust and the DG Smith Family Settlement Trust and must be made by the first defendant. I make no order in relation to the Denby Smith Family Trust, for the reasons set out above.
7. The third defendant’s current assets and liabilities.
For the reasons I have set out above, I am of the view that disclosure of the third defendant’s assets and liabilities is required.
8. Financial accounts of Dema Vista Pty Ltd, Denby Smith Family Trust, and the DG Smith Family Settlement Trust for the financial years ending 30 June 2012, 2013, 2014 and 2015.
I have already dealt with the financial accounts of the Denby Smith Family Trust and the DG Smith Family Settlement Trust, as well as the time period for which disclosure musts be given. I am of the view that disclosure must also be given of the financial accounts of Dema Visa, on the basis that the deceased made an inter vivos gift of all of his interests in Dema Vista to the first defendant shortly before his death.
9. Loan account ledgers for Denby Smith in Dema Vista, the DG Smith Family Settlement Trust, and the Denby Smith Family Trust for the financial years ending 30 June 2012, 2013, 2014 and 2015.
As I have already set out, I am of the view that all loan account ledgers should be part of the financial accounts to be disclosed by the first defendant.
10. Policy number 76314.
The defendants say that this document was “offered to the plaintiff’s counsel prior to the pleading of the Second Statement of Claim but declined”.[29] He further says that the defence demonstrates “the Comminsure monies have been collected by Andrew B Thiele and brought to account in the deceased’s estate”.[30] I do not understand what is meant by these submissions. There is no suggestion that the document is not relevant. It must be disclosed.
[29] Defendants’ outline of submissions dated 4 April 2018 at [28].
[30] Defendants’ outline of submissions dated 4 April 2018 at [28].
11. Documents identifying the payee of the $5,580.51 and $72.
These documents are in the same category as those relating to Policy number 76314.
12. All documents directly relevant to the encumbrance(s) and the loan to which the encumbrance(s) relate as at 27 November 2013 and now.
As previously set out, the asset position of the Denby Smith Family Trust and the DG Smith Family Settlement Trust must be disclosed as it is relevant both as an inter vivos gift to the first defendant, and to his own asset position.
13. All documents directly relevant to the transfer and consideration. (SOC 51D/D51)
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.
I will hear the parties on the question of costs.