Tritt v Hoskins

[2016] VSC 589

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY & PROBATE LIST

S CI 2016 03014

MAUREEN ISOBEL TRITT (as executrix of the estate of Jean Elizabeth Ruff, deceased)	Plaintiff
v
CECIL ALEXANDER HOSKINS (as administrator of the estate of Isabella Florence Hoskins, deceased)	First Defendant
-and-
ISOBEL LAWRY	Second Defendant

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 September 2016
DATE OF RULING:	29 September 2016
CASE MAY BE CITED AS:	Tritt v Hoskins & Anor
MEDIUM NEUTRAL CITATION:	[2016] VSC 589

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PRACTICE AND PROCEDURE — Application for approval of compromise of proceeding — Where no basis for application — Proceeding dismissed — ExxonMobil Superannuation Plan Pty Ltd v Esso Australia Pty Ltd (2010) 29 VR 356 — Supreme Court (General Civil Procedure) Rules 2015, r 54.02

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R D Shepherd	Morgan Legal
For the First Defendant	Ms U Stanisich	—
For the Second Defendant	No appearance	—

HER HONOUR:

Plaintiff’s application

1. By originating motion filed 1 August 2016, the plaintiff, in her capacity as executrix of the estate of the late Jean Elizabeth Ruff (‘Ms Ruff’), seeks an order, pursuant to r 54.02(2)(c) of the Supreme Court (General Civil Procedure) Rules 2015, approving a compromise made on 15 September 2015 of a proceeding commenced by the plaintiff in the same capacity in the Victorian Civil and Administrative Tribunal (‘the VCAT’).

Background

1. In the VCAT proceeding, the plaintiff sought an order, pursuant to s 228(1) of the Property Law Act 1958, in respect of a property at 7 Donald Street, Sunshine (‘the Sunshine property’).

1. At the time of her death on 31 January 2012, Ms Ruff and her mother, Isabella Florence Hoskins (‘Mrs Hoskins’), were the registered proprietors of the Sunshine property as tenants in common in equal shares, having been registered since 14 May 1963.  In the VCAT proceeding, the plaintiff claimed that as at the time of her death, Mrs Hoskins held her legal interest in the Sunshine property on a constructive trust for Ms Ruff and sought an order that the proceeds of sale of the Sunshine property be paid to the estate of the plaintiff.  The claim for the constructive trust was based on making certain inferences as to the incomes of Mrs Hoskins and Ms Ruff over the period of time in which they lived in the Sunshine property together.

1. Mrs Hoskins died intestate on 10 August 1973.  Letters of administration of her estate were granted to the first defendant on 4 May 2015 in Queensland and on 3 February 2016 in Victoria.  The first defendant is the only surviving child of Mrs Hoskins.  

1. Ms Ruff died on 31 January 2012.  Probate of her will dated 5 May 2004 was granted to the plaintiff on 23 May 2012.

1. On 9 July 2015, George Charles Edser, solicitor in Queensland, wrote to all of the persons entitled to share in the estate of Mrs Hoskins, save for one person whose address was then unknown, giving them notice of the VCAT proceeding.  Of the persons entitled to share in the estate of Mrs Hoskins, five of them (including the person whose address was unknown as at 9 July 2015, but by then had been located) were joined as respondents to the VCAT proceeding by orders made on 7 August 2015.

1. On 15 September 2015, a deed of settlement of the VCAT proceeding was signed by the plaintiff in her capacity as the executrix of Ms Ruff’s estate and in her personal capacity, by the first defendant in his capacity as administrator of Mrs Hoskins’ estate and in his personal capacity, and by the five individuals who had been joined as respondents to the VCAT proceeding.  Recital G of the deed of settlement provides that it is entered into by the parties, inter alia:

… (b)subject to approval by the Supreme Court of Victoria of the compromise of the proceeding contained in these terms in this deed of settlement; and

… (d) subject to the consent in writing of the persons otherwise entitled upon intestacy to the estate of the deceased or approval by the Court of the compromise.

1. Clause 8 sets out various releases given to the first defendant, both personally and as administrator, by the plaintiff and from each person who signs a release in the form attached as a schedule to the deed who is not a signatory to the deed.

1. On 25 September 2015, the VCAT proceeding was struck out.

1. Just short of one year after the deed of settlement was signed, the plaintiff issued her originating motion filed 1 August 2016 seeking the Court’s approval of the compromise made on 15 September 2015.  Both the plaintiff and the first defendant deposed that there are no minors or other persons under a disability who would be affected by the approval of the compromise.[1]

   [1]Despite being represented by counsel at hearings on 19 August and 2 September 2016, the first defendant has not filed an appearance in this proceeding as required by r 8.02 of the Supreme Court (General Civil Procedure) Rules 2015.  His two affidavits, filed in the proceeding on 1 August and 1 September 2016 respectively, were prepared by the solicitors for the plaintiff.

1. As at 29 June 2016, the first defendant deposed that, save for the second defendant, all of the persons entitled to share in the estate of Mrs Hoskins had either signed the terms of settlement or executed release forms releasing and discharging the first defendant personally and in his capacity as administrator of the estate of Mrs Hoskins from all claims, suits, demands and proceedings in connection with or arising from the estate of Ms Ruff.  These releases were provided between September 2015 and January 2016.

1. In respect of the agreement of the second defendant, the first defendant referred to a conversation on 27 November 2015 between the second defendant and the personal assistant of Mr Edser to the effect that the second defendant would sign and return the release and discharge form. 

1. On the return date of the application on 19 August 2016, counsel for the plaintiff informed the Court that his solicitors had served the second defendant with notice of the application for approval of the compromise only the day before.  As to be expected, the second defendant, who is unrepresented, did not attend on that day.  As the second defendant had been served the day before, the parties should have agreed to adjourn the application on the papers.  Orders were made for the adjournment of the application to 2 September 2016 and for the costs of the day to be paid by the plaintiff.

1. By the return date of 2 September 2016, the second defendant had provided her consent to the compromise.  The Court queried the necessity of the application as the first defendant had deposed in a further affidavit that, as at 30 August 2016, all persons entitled by law to share in the estate of Mrs Hoskins had consented to or were parties to this proceeding.  Counsel for the plaintiff said that the application was made on the basis that the approval was a term of the compromise and it was necessary:

… to cover the potential that one of the beneficiaries would come along and say at some stage, ‘I haven't agreed to any of this’ or the like, and that would expose the executors.

Consideration

1. On an application for approval of a compromise pursuant to r 54.02(2)(c)(i), the Court’s role is not to consider the wisdom of a trustee’s exercise of discretion but to grant the trustee’s application for an order approving the trustee’s agreement to the compromise, if the Court is satisfied of the propriety of the application. That involves the Court considering whether:

(a)   the trustee’s decision to agree to the compromise was within power;

(b)   there was any impropriety in the trustee’s decision;

(c)    the trustee exercised its discretion in good faith; and

(d)  the trustee gave fair consideration to the relevant issues.[2]

[2]ExxonMobil Superannuation Plan Pty Ltd v Esso Australia Pty Ltd (2010) 29 VR 356, 375 [86]–[87]. (Habersberger J).

1. Applications for the Court’s approval of a compromise are generally supported by an advice as to the reasons for the compromise and why it is in the best interests of the parties, particularly where there are minors, persons under a disability or representatives for a class of beneficiaries.  This is because the Court must be satisfied that the compromise is in the best interests of persons falling within one or more of those categories.  It is assumed that persons outside of those categories are sufficiently capable of representing their own interests such that the Court can rely on their consent to a compromise in approving the terms of that compromise.  In this case, as both the plaintiff and the first defendant have deposed, none of the persons affected by the terms of the compromise of 15 September 2015 fall within any of the categories that attract the Court’s protection.  Accordingly, the Court has not been provided with an advice as to the reasons why the compromise is in the best interests of the parties.

1. It follows that where there are no minors or persons under a disability and all persons agree to the compromise, it is unnecessary for the Court to approve a compromise.  This is consistent with the terms of Recital G of the deed of settlement which provides for the Court’s approval in the event that consent in writing of the persons otherwise entitled upon intestacy to the estate of Mrs Hoskins is not obtained.  This provision negates the earlier, and perhaps contradictory, part of the recital that provides for the Court’s approval of the compromise.

1. The only possible circumstance in which the Court’s approval of the compromise would have become necessary was if the second defendant had not agreed to its terms.  The evidence before the Court is that the second defendant agreed on 27 November 2015 with the personal assistant of Mr Edser that she would sign and return the release form.  There is no evidence that the second defendant was contacted after November 2015 for the form.  In the circumstances of her agreement and where the amount of the compromise is $262,500, being the stated value of Mrs Hoskins’ half share of the Sunshine property, it would have been sensible and cost efficient for the solicitors to follow up the second defendant rather than commence this application with its consequent costs.

1. Finally, it is worth noting the provisions of the Civil Procedure Act 2010 (‘the CP Act’) and, in particular, ss 7–9 of that Act. By those provisions, the Court is required to give effect to the ‘overarching purpose’ of the CP Act and ‘the rules of court in relation to civil proceedings’, which is defined as ‘the just, efficient, timely and cost-effective resolution of the real issues in dispute’.[3] In this case, there are no ‘real issues in dispute’ and the proceeding should never have been commenced. When regard is had to the objects set out in s 9 of the CP Act, the only available course that is consistent with the overarching purpose is to dismiss the proceeding.

   [3]Civil Procedure Act 2010, s 7(1).

Conclusion

1. As all persons entitled by law to share in the estate of Mrs Hoskins have either consented to the compromise, are parties to the proceeding or have signed releases, there is no necessity for the Court’s approval of the compromise contained in the deed of settlement dated 15 September 2015.

1. Accordingly, the proceeding is dismissed.