Yancic v Yancic - [2010] SASC 335

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
YANCIC v YANCIC & ANOR
[2010] SASC 335
Reasons of Judge Burley a Master of the Supreme Court
30 November 2010
PROCEDURE
Service of proceedings - claim by plaintiff pursuant to Inheritance (Family Provision) Act 1972 - six month time limit - proceedings required to be issued and served within six months of grant of probate - no personal service effected within six month period or at all - documents left at defendants' solicitor's office - no instructions to accept service - orders sought dispensing with personal service and deeming delivery of papers to the defendants' solicitor to be sufficient - application refused.
Inheritance (Family Provision) Act 1972 s 7, s 8 and s 14; Supreme Court Civil Rules (2006) r 66 and r 67, referred to.
Blunden v Blunden & Anor [2008] SASC 286, considered.

YANCIC v YANCIC & ANOR
[2010] SASC 335
JUDGE BURLEY:

The plaintiff seeks an order for further provision out of the estate of his mother, pursuant to s 7 of the Inheritance (Family Provision) Act 1972 (“the Act”). The defendants are the executors named in the will of the deceased, which was made on 8 October 2003. Probate was granted to the defendants on 22 February 2010.
By application filed on 16 September 2010 (FDN5), the plaintiff sought directions from the Court relating to service of these proceedings and for injunctive relief.
The estate of the deceased consisted of both real and personal property. Under her will, the deceased left the real property to the defendants and the residue to each of her four children, including the plaintiff, in equal shares. It is common ground that prior to any notification by the plaintiff to the defendants of a claim pursuant to the provisions of the Act, the defendants, on 13 April 2010, transferred to themselves the real property, namely the property situated at 54 Napoleon Street, Port Lincoln.
The injunctive relief
The plaintiff seeks to restrain the defendants from distributing the residue of the estate. According to the affidavit of Mr Fabbro, the defendants’ solicitor, his firm holds just over $14,000 in its trust account. It is the distribution of this fund which the plaintiff seeks to restrain, apart from the payment of the legitimate liabilities of the estate.
The plaintiff has also sought an order restraining the defendants from dealing with the Port Lincoln property. It is apparent from the affidavit evidence that the plaintiff lodged a caveat on this property claiming an interest in it. That caveat has not been warned by the defendants. It therefore seems to me that, unless and until the defendants warn the caveat, there is no need to grant an injunction restraining the defendants from dealing with the property. I therefore propose to refuse the plaintiff’s application for injunctive relief to that extent.
As to the residue, the defendants accept that they should not make any payments to the beneficiaries entitled to the residue. Both parties accept that the proper expenses of the estate may be paid out of the funds presently held in the solicitor’s trust account. In those circumstances, it is not necessary to grant the injunctive relief sought by the plaintiff in respect of the funds held in the solicitor’s trust account.
Directions as to service of the proceedings
Section 8 of the Act provides that an application must be made within six months of the grant of probate, although there is power to extend that time. If an application is made to extend the time within which to make an application under s 7, s 8(5) provides that any:
… distribution of any part of the estate made before the application for extension of time shall not be disturbed by reason of that application or any order made thereon.
It is also necessary to refer to s 14 of the Act. Sub-s (1) provides that where there is a lawful distribution, the administrator shall not be liable to account to any person claiming the benefit of the Act unless the administrator had notice of the claim at the time of the distribution.
It is common ground that at the time the defendants transferred the Port Lincoln property to themselves as beneficiaries, they had not had notice of the plaintiff’s claim.
Sub-s 14(3) is also important. It is as follows:
(3)Subsection (1) of this section shall not prevent the Court from ordering that any provision under this Act be made out of the estate, or any part thereof, after it has been distributed.
The combined effect of sub-s 8(5) and sub-s 14(3) of the Act is that if the proceedings are served on the administrators prior to the expiry of the six month period, recourse may be had to assets which have previously been distributed (without notice of the plaintiff’s claim), whereas, if an extension of time is required because the proceedings were not commenced in time, only those assets which have not been distributed may be the subject of an order for provision out of the estate.[1]
[1] Blunden v Blunden & Anor [2008] SASC 286.
It is for this reason that the plaintiff has chosen to apply for directions as to service, rather than to apply for an extension of time, the underlying factual basis of which is that the application under s 7 has not been made within six months from the date of the grant of probate. It is necessary also to mention sub-s 8(6) of the Act which deems that the application is made when the summons by which the application is instituted is served on the administrator (as defined in s 4 of the Act) of the estate.
It is common ground that the summons was not served personally on either defendant prior to the expiration of the relevant six month period. As I have said, if the matter were to remain there, because of the provisions of sub-s 8(5) of the Act, the plaintiff, if successful in the proceedings, could only obtain an order in respect of the funds presently held in the defendants’ solicitor’s trust account. It is for this reason that the plaintiff seeks the following orders:
1.An order dispensing with the requirement for personal service of the summons herein on the defendants.
2.An order permitting service of the summons herein upon Michael Fabbro of Ezra Legal of 49 Wright Street Adelaide as agent for the defendants.
3.An order declaring that service of the summons herein made upon Michael Fabbro by David Geoffrey Chambers on 20 August 2010 was effective service of the summons herein upon the defendants for the purposes of the Supreme Court Rules 2006.
4.An order declaring that an application for the benefit of the Inheritance (Family Provision) Act 1972 (SA) within the meaning of section 8(6) of that Act was made upon 20 August 2010 upon service of the summons herein upon Michael Fabbro as agent for the defendants as executors of the estate of Lucija Margaret Yancic deceased.
The plaintiff relies upon the affidavit of his solicitor, Mr Leen, sworn on 16 September 2010. On 19 May 2010 he received instructions to act on behalf of the plaintiff in relation to a possible claim under the Act. On 26 May 2010 Mr Leen ordered a copy of the grant of probate from the Probate Registry. He subsequently received that copy.
Next, on the instructions of the plaintiff, Mr Leen sent to each defendant a letter dated 30 June 2010 setting out the plaintiff’s claim. The letter has not been exhibited to Mr Leen’s affidavit because it has been marked “without prejudice”. On 3 August 2010 Mr Leen received an email from Mr Fabbro. In the email Mr Fabbro has referred to the correspondence of 30 June 2010. He said :
We are finalising our client’s [sic] response to your correspondence, however one of the executors is currently overseas.
In any event could you please ensure all future correspondence is directed to the writer care of GPO Box 519 Adelaide SA 5001.
No further correspondence was received from Mr Fabbro by Mr Leen by 5 August 2010, at which time the plaintiff instructed him to issue proceedings under the Act. He received further instructions from the plaintiff on 13 August 2010. He prepared the necessary affidavit to support the application under the Act and on 18 August 2010 the plaintiff swore the affidavit supporting his application. On 19 August 2010 the summons by which these proceedings were commenced was issued by the Court.
Paragraph 17 of Mr Leen's affidavit is as follows:
17.On 19 August 2010 I arranged for a process server to serve proceedings on the defendants’ solicitor Michael Fabbro of EZRA Legal.
It is common ground that at this stage Mr Fabbro had not advised Mr Leen that he had instructions to accept service on behalf of the defendants or either of them. Subsequent attempts between 20 and 23 August 2010 to serve the defendants personally were unsuccessful.
The plaintiff also relies upon the affidavit of Mr David Chambers sworn on 7 September 2010. He is a licensed process server. He was instructed by Mr Leen to “serve” the summons and the supporting affidavit upon Mr Fabbro. On 20 August 2010 at 9.10am he went to Mr Fabbro’s office at 49 Wright Street, Adelaide. He there met Mr Fabbro. He advised Mr Fabbro that he was there to serve documents “in relation to” the defendants. Mr Fabbro informed him that the defendants were his clients. He also informed Mr Chambers that he did not know if he had instructions to accept service and that he would make a phone call. Having made a phone call, Mr Fabbro informed Mr Chambers that he could not accept service of the documents because he could not contact one of his clients who was overseas. He further stated that the other client did not answer his phone. Mr Chambers then left Mr Fabbro’s office.
Mr Chambers reported to Mr Leen what had occurred and he was instructed by Mr Leen to make a further attempt at “service”. He attended Mr Fabbro’s office again at about 9.39am on 20 August 2010. He saw Mr Fabbro and informed him that he had been instructed to re-attend to effect service of the documents. He advised Mr Fabbro that if he (Mr Fabbro) was not prepared to accept service, he had instructions to leave the documents at reception. Mr Fabbro informed him again that he did not have instructions to accept service and asked Mr Chambers to leave the premises. Mr Chambers then left documents on a shelf by the front door of the premises. The documents were gathered up by Mr Fabbro and thrown into the street.
It is clear that the leaving of the documents at Mr Fabbro’s office did not constitute proper service, because Mr Fabbro did not have instructions to accept service on behalf of either of the defendants.
Of the various orders sought in paragraphs 2 to 4 of the application, the plaintiff needs to obtain an order dispensing with personal service of the proceedings and a nunc pro tunc order that the proceedings could be served on the defendants by leaving copies of same at Mr Fabbro’s office, as occurred on 20 August 2010.
Rule 66(1)(a) of the Supreme Court Civil Rules 2006 (SA) requires personal service of proceedings. Rule 66(1) of the Rules confers upon the Court a discretion to dispense with personal service. The discretion must be exercised judicially, bearing in mind the respective detriments experienced by the parties, depending upon whether or not the discretion is exercised in favour of the plaintiff.
Under R 67(1) personal service is achieved if the relevant documentation is given or offered personally to the defendant or if a solicitor accepts service of the document on behalf of that person. None of those things occurred within the six month period and consequently, if the plaintiff is to succeed on this application, it will be necessary for him to obtain an order that personal service of the proceedings be dispensed with.
Dispensing with personal service is not by itself sufficient because the plaintiff would not benefit from some other form of service now. In any event, the defendants’ Notice of Address for Service acknowledges service. The six month time limit is long past and an application for an extension of time would be necessary. In that event, the Port Lincoln property would not be available to satisfy any order for further provision which might be made. The plaintiff must obtain an order that operates back to 20 August 2010 when Mr Chambers, contrary to Mr Fabbro’s statement that he had no instructions to accept service, left the documents at his office. The effect of the nunc pro tunc order must be that leaving the documents at Mr Fabbro’s office constituted sufficient service on the defendants.
I mention also R 67(2) which provides that service of a document will be presumed if it is established that the document has come to the attention of the person to be served. There is no evidence that the summons and the content of the supporting affidavit came to the attention of either defendant before the expiry of the six month period.
During the course of argument my attention was drawn to that part of the judgment of Bleby J in Blunden under the heading “The lawfulness of the distribution”. Between paragraphs [20] and [30] his Honour reviews the authorities with regard to the early distribution of the estate or part of it, prior to the expiry of the six month period. It is clear from that discussion that if an early distribution is made in circumstances where a claim for provision under the Act might be made, the personal representative may be held personally liable to the claimant. But it is equally clear that where a distribution is made prior to the expiry of the six month period in circumstances where the personal representative has had no notice of a claim, the provisions of the Act permit such a distribution. In addition, in South Australia at least, s 14 of the Act provides some protection to the administrator.
The respective submissions of the parties may be regarded at best, by the plaintiff, that a wrongful distribution of the estate is a factor to be taken into account as to whether or not the orders sought by the plaintiff should be made and, so far as the defendants are concerned, that the distribution was lawful and had no bearing upon the question of whether the orders should now be made.
In my opinion, whether the early distribution was unlawful (in the sense that the plaintiff may be able to sue the administrators personally) or lawful, has no bearing upon whether or not personal service ought to be dispensed with. In the case of a supposed unlawful distribution, that gives rise to rights against the administrators and so the plaintiff is not left without a remedy. If it is the case that the distribution was lawful, by definition the lawful distribution of part of the estate is not a factor which affects the discretion to order that personal service be dispensed with.
The plaintiff has had to bring the application because of a combination of two things: first, the distribution of the majority of the estate some seven weeks after the grant of probate by the administrators to themselves as beneficiaries without reference to, or notice of a claim from, the plaintiff; and, second, the failure on the part of the plaintiff to effect personal service on the defendants of the proceedings prior to the expiry of the relevant six month period. The reality of the orders sought by the plaintiff in this regard is that, if made, personal service would be dispensed with and the actions of Mr Chambers on 20 August 2010 at Mr Fabbro’s office would be deemed as sufficient service on the defendants.
In my opinion, when the application of the plaintiff is characterised in this manner, it is clearly evident that no such orders should be made. In particular, where, as in this case, the solicitor acting for the defendants has stated in plain terms that he has been unable to obtain instructions to accept service, it would be quite inappropriate now to deem the actions of Mr Chambers (leaving the papers at Mr Fabbro’s office) as comprising sufficient service on the defendants. What has caused the difficulty of the plaintiff is the last minute attempt at service. The plaintiff could have issued proceedings and sought to serve them at a much earlier stage.
To the extent that the plaintiff relies upon any delay on the part of the defendants’ solicitor in responding to the plaintiff’s solicitor’s letter of 13 June 2010, I consider such reliance to be ill-founded. It is always the plaintiff’s obligation to comply with clear statutory requirements as to the making of a claim. Sub-s 8(6) of the Act makes it clear the application is not made until the summons is served upon the administrator. In those circumstances, I consider it would be a wrongful exercise of the discretion to make an order deeming the leaving of the papers at Mr Fabbro’s office in the circumstances deposed to by Mr Chambers as being sufficient service. The papers were left at Mr Fabbro’s office by Mr Chambers in the face of the clear opposition to that course demonstrated by Mr Fabbro. To somehow convert that into an effective method of service is, in my opinion, not warranted.
For the above reasons, the application for orders in terms of paragraphs 1 to 4 of the application dated 16 September 2010 will be refused.