Westpac Life Insurance Services Ltd v Estate of the Late Kylie Marie O'Brien
[2019] FCA 1327
•8 August 2019
FEDERAL COURT OF AUSTRALIA
Westpac Life Insurance Services Ltd v Estate of the Late Kylie Marie O’Brien [2019] FCA 1327
File number(s): NSD 1177 of 2019 Judge(s): THAWLEY J Date of judgment: 8 August 2019 Catchwords: INSURANCE – life insurance – application under s 215 of the Life Insurance Act 1995 (Cth) and r 9.24 of Federal Court Rules 2011 (Cth) – applicant seeks to pay death benefit into Court and discharge its liability under the policy – application granted Legislation: Federal Court Rules 2011 (Cth) r 9.24(1)
Life Insurance Act1995 (Cth) ss 215(1) and 215(2)
Date of hearing: 8 August 2019 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Category: Catchwords Number of paragraphs: 17 Solicitor for the Applicant: Mr D Fernando of HWL Ebsworth Lawyers Counsel for the Respondent: The Respondent did not appear ORDERS
NSD 1177 of 2019 BETWEEN: WESTPAC LIFE INSURANCE SERVICES LIMITED (ACN 003 149 157)
Applicant
AND: THE ESTATE OF THE LATE KYLIE MARIE O’BRIEN
Respondent
JUDGE:
THAWLEY J
DATE OF ORDER:
8 AUGUST 2019
THE COURT ORDERS THAT:
1.The applicant pay into Court the amount of $354,786 within 28 days.
2.The applicant’s costs of $9500 be paid from the moneys paid into Court within 28 days of their receipt by the Court.
3.Grant liberty to any legal personal representative or any family member of the late Ms O’Brien to apply in relation to the balance of the proceeds remaining in Court after the deduction of the payment of the applicant’s costs as contemplated by order 2.
4.The moneys paid into Court remaining after deduction of any costs to be paid to the applicant pursuant to order 2 be held until further order, pending determination of any entitlement of any person to those moneys.
5.Order that the applicant be excused from further attendance before the Court until further order.
THE COURT DECLARES THAT:
1.The sum of $354,786 represents the amount payable by the applicant under its policy number DM396669 issued to the late Kylie Marie O’Brien on or about 11 August 2005 as at 25 July 2019 (death benefit).
2.The payment into Court of the amount of $354,786, as contemplated by Order 1, is a payment made pursuant to s 215(1) of the Life Insurance Act1995 (Cth).
3.Once the applicant has paid into Court the amount of $354,786, the applicant is discharged from any further liability under the policy in relation to the death benefit in accordance with s 215(2) of the Life Insurance Act1995 (Cth).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
NSD 1177 of 2019 BETWEEN: WESTPAC LIFE INSURANCE SERVICES LIMITED (ACN 003 149 157)
Applicant
AND: THE ESTATE OF THE LATE KYLIE MARIE O’BRIEN
Respondent
JUDGE:
THAWLEY J
DATE OF ORDER:
23 AUGUST 2019
THE COURT FURTHER ORDERS THAT:
1.Within 35 days, the applicant take reasonable steps to identify, if not already known, the legal guardian of the children of Ms O’Brien and provide any person so identified a copy of these orders and reasons for judgment
2.Within 49 days, the applicant file:
(a)an affidavit setting out the steps taken under order 1 and the result of those steps being taken; and
(b)a document setting out concisely the costs incurred in complying with these orders and the basis of the calculation and the amount sought.
3.The reasonable and appropriate costs of complying with these orders be paid from the moneys paid into Court pursuant to order 1 of the orders made on 8 August 2019.
4.The quantification of the reasonable and appropriate costs in complying with these orders be determined on the papers
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Revised from transcript)THAWLEY J:
This proceeding was commenced on 26 July 2019 by the filing of an Originating Application and Concise Statement. It was listed today for a first case management. The applicant relied upon an affidavit sworn on 19 July 2019 by Mr Parsons, the National Resolutions Manager of the applicant. The applicant also relied upon an affidavit sworn on 7 August 2019 by Mr Iyer, a solicitor for the applicant. The Concise Statement was certified by another of the applicant’s solicitors.
On or about 11 August 2005, the applicant issued to Ms O’Brien a policy of insurance bearing number DM396669 with a commencement date of 5 August 2005 (Policy). Under the Policy, Ms O’Brien was entitled to a lump sum benefit in the sum of $250,000 upon her death. Ms O’Brien was both the life insured and the policy owner under the Policy.
On 5 July 2012, the applicant received notice of Ms O’Brien’s death.
The applicant says, and the evidence indicates, that:
(1)under the Policy it is required to pay a benefit to Ms O’Brien’s estate;
(2)the benefit sum payable as at 25 July 2019 is $354,786 (death benefit);
(3)Ms O’Brien did not leave a valid will; and
(4)Ms O’Brien’s husband at the time of her death, Mr Lindsay Cecil Stenzel, would ordinarily be entitled to obtain Letters of Administration and receive a portion of Ms O’Brien’s Estate.
The evidence indicates that the Coroner released a report dated 19 February 2018, stating that:
(1)Ms O’Brien died on 11 June 2012 from methamphetamine drug toxicity;
(2)Mr Stenzel was involved in injecting Ms O’Brien with doses of methamphetamine on the nights of 9 and 10 June 2012; and
(3)the Coroner had “formed a reasonable suspicion that Mr Stenzel has committed manslaughter, and ...refer[red] [the] matter to the Queensland Director of Public Prosecutions”.
The Queensland Director of Public Prosecutions has declined to disclose whether it will commence criminal proceedings against Mr Stenzel in relation to Ms O’Brien’s death.
The Concise Statement included:
If Mr Stenzel is convicted of manslaughter, the applicant understands that he will not be entitled to the death benefit payable under the Policy.
In light of the facts above, the applicant has formed the view that the only method by which it may obtain sufficient discharge of the death benefit payable to Ms O’Brien’s Estate is to pay the money into Court.
Further, the respondent has no personal representative. While Mr Stenzel is the person most likely to be eligible to become an administrator of Ms O’Brien’s Estate, he has not yet obtained Letters of Administration. Further, uncertainty as to his entitlement to a death benefit payable under the Policy is the reason for this application. For this reason, the applicant considers that this proceeding should continue without any person representing Ms O’Brien’s Estate.
The affidavit of Mr Iyer stated that he had been instructed that the applicant’s attempts to contact Mr Stenzel at his residential address and mobile telephone number had been unsuccessful. Mr Iyer caused Wise McGrath to undertake a “skip trace” to locate Mr Stenzel. Those instructions were given on 26 July 2019. Wise McGrath furnished a report, received by the applicant’s solicitor on 6 August 2019, indicating that they had been unsuccessful in locating Mr Stenzel. The report set out the various database and other searches that were conducted and concluded that they had “unfortunately exhausted all avenues of inquiry and have been unable to establish a current residential address for the subject.” Mr Iyer also made inquiries which established that Mr Stenzel was not being held in custody.
Mr Iyer noted that no person aside from Mr Stenzel, or his agent, had contacted the applicant regarding the death benefit. He also indicated that the late Ms O’Brien had two children who are presently minors. The applicant has, however, not had any contact with those minors.
Mr Stenzel and Ms Mesa Deo (a financial planner registered on the Policy) telephoned Westpac on 5 July 2012. On 10 July 2012, Westpac sent to Ms Deo a letter requesting that any claim form and documents in support of any claim be provided. On 13 July 2012, Westpac received a facsimile transmission from Ms Deo enclosing a claim form and documents in support. Mr Stenzel made a claim for payment of the death penalty. Amongst the forms included in the facsimile was a statutory declaration which indicated that Mr Stenzel was the legal representative of Ms O’Brien. Apart from the statutory declaration, no other material indicates that Mr Stenzel was the legal representative of Ms O’Brien.
Rule 9.24 of the Federal Court Rules 2011 (Cth) provides:
Deceased persons
(1)If:
(a)a deceased person was interested in, or the estate of a deceased person is interested in, any matter or question in a proceeding; and
(b)the deceased person has no personal representative;
a party may apply to the Court for an order:
(c)that the proceeding continue in the absence of a person representing the deceased person; or
(d)that a person who has consented in writing represent the deceased person’s estate for the purpose of the proceeding.
(2)An order under subrule (1) and any subsequent order made in the proceeding binds the estate of the deceased person as the estate would have been bound if the deceased person’s personal representative had been a party to the proceeding.
Note Before making an order under this rule, the Court may require the application to be served on persons having an interest in the estate, as the Court considers appropriate.
Rule 9.24(1)(a) is clearly satisfied. Rule 9.24(1)(b) may or may not be satisfied. I am not satisfied on the basis of the statutory declaration alone, that Mr Stenzel is the personal representative for Ms O’Brien. However, equally, I am not satisfied that he is not. Accordingly, I will not make an order under r 9.24. It seems to me in principle that if evidence is adduced which satisfies the Court that Ms O’Brien has no personal representative, then an order under r 9.24 could be made nunc pro tunc at some later stage. In any event, for the reasons which follow, I consider it appropriate to make an order under s 215 of the Life Insurance Act 1995 (Cth).
Section 215 of the Life Insurance Act is in the following terms:
215 Power to pay money into Court
(1)A life company may pay into the Court any money payable by the company in respect of a policy for which, in the company’s opinion, no sufficient discharge can otherwise be obtained.
(2)Payment of the money into the Court discharges the company from any liability under the policy in relation to the money.
(3)Any money paid into the Court under this section is to be dealt with according to the order of the Court.
(4)This section has effect subject to the Rules of the Court.
I am satisfied on the material before me that the applicant cannot obtain a “sufficient discharge” in respect of the death benefit payable by it in respect of the Policy.
The phrase “sufficient discharge” must take its meaning having regard to the objects and purpose of s 215, which is clearly intended to deal with situations of which the present is one example. The applicant cannot locate Mr Stenzel. Even if it could locate Mr Stenzel, the applicant has stated that its opinion is that it could not obtain “sufficient discharge” if it paid the amount to him because of its uncertainty as to his entitlement to the death benefit. This opinion is reasonable in the circumstances.
The applicant tendered invoices with respect to the filing fees of $4,100 and its disbursements for the “skip trace” together with a breakdown of the work it has performed and the hourly rates of those involved in performing the work.
Having reviewed that material, I am satisfied that the total costs claimed of $9,500 including disbursements are reasonable costs for preparing the matter for hearing and appearing today, having regard also to the particular nature of the proceedings.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley. Associate:
Dated: 23 August 2019
0
0
2