Tschirn v Australian Executor Trustees Ltd

Case [2015] SASC 58

SUPREME COURT OF SOUTH AUSTRALIA

(Appeal from a Master: Civil)

TSCHIRN & ANOR v AUSTRALIAN EXECUTOR TRUSTEES LTD

[2015] SASC 58

Judgment of The Honourable Justice Parker

13 April 2015

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - SUMMARY JUDGMENT

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW - IN GENERAL

Appeal from a decision of a Master dismissing an interlocutory application by the defendants (appellants) for summary judgment. The plaintiff (respondent), as executor of an estate, brought proceedings against the defendants alleging that they unlawfully took advantage of their relationship with the deceased thereby diminishing the estate for their own benefit and gain. The statement of claim alleged that in the deceased’s final years over 1,900 transactions had been conducted on her savings account totalling in excess of $700,000. The defendants sought summary judgment under Rule 232 on the basis that the statement of claim did not identify which of the transactions were said to be utilised for the defendants’ benefit and to what extent. The Master held that the claim was reasonably arguable and refused the application for summary judgment.

Whether the Master erred in not finding that there was no reasonable basis for the claim against the defendants. Whether the Master erred in not making an order for summary judgment.

Held (Parker J):

Appeal dismissed. There are real questions of fact and law to be decided at trial. The Master did not err in not finding that there was no reasonable basis for the claim against the defendants. The requirement of Rule 232(2) not having been satisfied, it is not necessary to determine whether the Master erred in not making an order for summary judgment.

Supreme Court Civil Rules 2006  r 232, referred to.
Royal Bank of Scotland v Etridge [2002] 2 AC 773; Johnson v Buttress (1936) 56 CLR 113; House v The King (1936) 55 CLR 499; Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1; Spencer v Commonwealth (2010) 241 CLR 118; Proude v Visic (No 4) (2013) 117 SASR 560; Three Rivers District Council v Bank of England [No 3] [2003] 2 AC 1, considered.

WORDS AND PHRASES CONSIDERED/DEFINED

"no reasonable basis for the claim"

TSCHIRN & ANOR v AUSTRALIAN EXECUTOR TRUSTEES LTD
[2015] SASC 58

Appeal from a Master: Civil

  1. PARKER J: This is an appeal from a decision of a Master of this Court dismissing an interlocutory application by the appellants (defendants) seeking an order for summary judgment, or in the alternative, strike out or further and better particulars.[1]

    [1] The Master in fact made an order for further and better particulars in respect of paragraph 24 of the second statement of claim, but otherwise refused all other aspects of the application.

  2. The notice of appeal referred to each of the preceding three issues.  However, at the hearing of the appeal, counsel for the defendants abandoned the strike out…

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Tschirn v Australian Executor Trustees Ltd [2015] SASC 58
Case
[2015] SASC 58
Decision Date

CaseChat Overview and Summary

In the case of Tschirn v Australian Executor Trustees Ltd, the plaintiff, Australian Executor Trustees Ltd, seeks to recover losses from the estate of the deceased, Mrs Joyce Atkinson, allegedly caused by the defendants, Grantley Tschirn and Sharon Tschirn. The plaintiff claims that the defendants, who had a long-standing relationship with Mrs Atkinson, took advantage of their position of influence over her during her infirmities to benefit financially at her expense. The defendants sought summary judgment, arguing that the plaintiff had no reasonable basis for their claim. The central legal issue before the court was whether the plaintiff's claim had a reasonable prospect of success both as a matter of law and fact.

The court examined whether the plaintiff's claim had a reasonable prospect of success both legally and factually. Legally, the court considered whether the plaintiff's approach to establishing undue influence was arguable. The court found that it was reasonably arguable that the plaintiff could establish undue influence and that the burden would then shift to the defendants to show that the transactions were not influenced by undue pressure. Factually, the court assessed whether there was a real question of fact to be determined at trial. The court concluded that there was a real question of fact regarding whether the defendants had improperly benefited from the transactions with Mrs Atkinson.

The court determined that the plaintiff's claim had a reasonable prospect of success both legally and factually. Consequently, the court denied the defendants' application for summary judgment. The case was to proceed to trial to determine the issues of undue influence and the propriety of the transactions between Mrs Atkinson and the defendants. The court's decision upheld the plaintiff's right to pursue its claim, allowing the case to proceed to trial.

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

The matter is governed by Rule 232:232—Summary judgment(1) The Court may, on application by a party, give summary judgment for that party.(2) Summary judgment may only be given if the Court is satisfied that—(a) if the applicant is the plaintiff—there is no reasonable basis for defending the applicant’s claim; or(b) if the applicant is a defendant—there is no reasonable basis for the claim against the applicant.Background The primary action is brought by Australian Executor Trustees Ltd (the plaintiff), one of the executors of the estate of the late Joyce Atkinson (the deceased), against Grantley Tschirn and Sharon Tschirn (the defendants). The plaintiff alleges that the defendants unlawfully took advantage of their relationship with Mrs Atkinson during the final years of her life thereby diminishing the estate for their own benefit and gain. Mr Tschirn, was the godson of Albert Atkinson, who was married to Mrs Atkinson. Mr Tschirn had a long relationship with both Mr and Mrs Atkinson. Mrs Atkinson had known Mr Tschirn since his birth and had frequent contact with him from 1980. Mrs Atkinson had frequent contact with Mrs Tschirn from about 1997. After Mr Atkinson died in 2003, the defendants began to assist Mrs Atkinson with various tasks and visited her regularly. The action concerns three discrete periods of time from March 2007 until the death of Mrs Atkinson on 1 November 2009. The plaintiff pleads that during that time the defendants unlawfully took advantage of their relationship with Mrs Atkinson for their own financial benefit. By March 2007, Mrs Atkinson was suffering from increasingly severe physical and mental infirmities, was unable to care for herself in her home without assistance, and had become emotionally reliant upon the defendants. The plaintiff alleges that the defendants separately and jointly had a special relationship of influence over Mrs Atkinson which continued until her death. The first period — March 2007 to July 2007. In March 2007, Mrs Atkinson moved to the defendants’ home. The plaintiff pleads at paragraph 24 of the third statement of claim that from March 2007 to July 2007, the defendants used their special relationship of influence over Mrs Atkinson to obtain her agreement to provide her assets to the defendants for their use.[2] Mrs Atkinson is said to have made a large number of cash withdrawals and EFTPOS payments at the request of the defendants that were expended primarily for their benefit.[2] The pleading before the Master was the second statement of claim. A third statement of claim was filed following the Master’s order that the plaintiff provide further and better particulars in respect of paragraph 24. During the hearing of the appeal, counsel made submissions in respect of the third statement of claim. The third statement of claim, amongst other things, inserted as Annexure A a schedule of cash withdrawals and EFTPOS payments made from Mrs Atkinson’s savings account during the period 1 March 2007 to 30 July 2007.

Ratio Decidendi

Legal Principle Established

The principles referred to in Spencer v Commonwealth must be applied in the present case. Consideration The first question to be determined is whether the plaintiff’s claim as pleaded has, as a matter of law, any reasonable prospect of success. As I have noted at [35] the defendants have relied upon Johnson v Buttress,[21] to support the contention that the evidentiary burden does not shift to the defendants until it is established that they have obtained a substantial benefit from each of the impugned transactions. [21] [1936] HCA 41; (1936) 56 CLR 113 at 134 (Dixon J). The alternative proposition advanced by the plaintiff is that it merely needs to prove as a matter of fact that there has been undue influence and that transactions have occurred which call for explanation. Once those requirements are met the defendants will be required to provide a satisfactory explanation for the transactions. That approach was said to be supported by the passage from the judgment of Lord Nicholls in Etridge set out at [31] above. I consider it to be reasonably arguable that the legal position expressed by Lord Nicholls in Etridge is correct. If that approach were to be applied at trial, should the plaintiff be able to prove as a matter of fact a relationship of undue influence and that there had been transactions which called for explanation, the evidential onus would fall upon the defendants to establish that the transactions were not tainted by undue influence. I consider that the Master did not err in finding it to be reasonably arguable that this was the correct approach. The adoption of such an approach would not require the plaintiff to identify specifically in the statement of claim each of those transactions that were said to be used improperly for the benefit of the defendants and to what extent they were so used. It would be sufficient to plead that all withdrawals benefitted the defendants. For that reason I accept the plaintiff’s contention that it is of no moment that the statement of claim merely asserts that the withdrawals were used primarily for the benefit of the defendants. I consider that the Master did not err in holding that it was likely that the first step in the trial will be to determine liability by reference to Mrs Atkinson’s legal capacity and the influence, if any, exercised over her by the defendants. Upon those issues being resolved, it can be determined whether the defendants should be ordered to account. I also consider that the Master did not err in rejecting the defendants’ contention that there was no reasonable basis as a matter of law for the plaintiff’s claim. The second question is whether the plaintiff had a reasonable prospect of success in proving its claim as a matter of fact, ie was there a reasonable basis for the plaintiff to allege that all withdrawals made during the relevant period were to the benefit of the defendants. It is clear that in deciding a strike out application the court need not conduct a mini trial nor should it make a final determination of the disputed facts. The task of the court is to critically examine the evidentiary material before the Master to determine whether there is a real question of fact to be determined at trial.