Pastries and professional development

Capacity, clarity, contradictors and civil procedure

Capacity, clarity, contradictors and civil procedure

Capacity, clarity, contradictors and civil procedure
September 16, 2020 /
Capacity, clarity, contradictors and civil procedure

 

For succession lawyers mental capacity issues extend far beyond the requirement for a mere will.

These days clients have any number of complex asset classes undertaking any number of decisions in giving effect to a succession plan. Accordingly, there is a broad range of mental capacity contexts that must be considered, from engagement and instructions, through to post-death implementation.

To that end, we know there is no one test for mental capacity. It sits on a continuum and is context specific.

“The law does not prescribe any fixed standard of sanity as requisite for the validity of all transactions. It requires, in relation to each particular matter or piece of business transacted, that each party shall have such soundness of mind as to be capable of understanding the general nature or what he is doing by his participation.”1

Where a question of mental capacity is raised, particularly in the context of a litigation, solicitors have a fundamental duty to the court to bring it to the court’s attention.2 In doing so use of medical evidence will often be relied on, but it is not determinative.3

It is common for medical opinions to be sought for a wide range of legal matters. Unfortunately, even the most minor of a comment in a medical report, regarding questions of capacity, can create a mischief and a consequential burden for clients and their solicitors to address. It is further compounded when deeds of settlement contain precedent clauses that raise matters of mental capacity.

 

The decision of Hyytinen v Palmer & Anor [2020] QSC 2404 (Hyytinen) is one such matter where both occurred, demonstrating the consequences that flow, when imprecision infiltrates the documentation.

In Hyytinen, the matter before the court was an application for sanction of a deed of settlement of a personal injuries claim. The deed included an introductory clause:

“Subject to the sanction by the Queensland Supreme Court or a declaration of capacity by QCAT, the matter is settled on the following terms…”5

The difficulty was that the applicant plaintiff did not consider she lacked capacity for the matter. However, the inclusion of that clause raised doubt, necessitating an application to the court. The court observed that the “inclusion of this form of words regrettably made it necessary”.6

The genesis of the issue arose from a “throwaway line”7 in a psychiatric report, which stated, “I believe she would require assistance in managing any financial award”.8 There was no other “evidence suggestive of any issue with capacity”.9

In considering the matter, the court exposed the ambiguity and peril in the “throwaway line” by noting “[t]he same observation might be made of many people who do not lack any legal capacity but are not particularly good with their money”.10 The court found that “even if the comment were intended to mean that the applicant lacks capacity, such a view is convincingly contradicted by the preponderance of other evidence relevant to the point”.11 And so, the court determined the applicant did “not have impaired capacity regarding a financial matter and is not a person under a legal disability”.12

 

However, the matter did not end there, because the respondent defendants did not “resist the application or take any point about the declarations being sought”.13 In taking that approach their position raised questions as to whether there was a contradictor to the application for the declaration of capacity. If not, then the law required that the declaration should not be made.14

Henry J identified “[t]he real issue in the application goes to the proper mechanism for relief”,15 citing section 10(2) Civil Proceedings Act 2011:

“The court may hear an application for a declaratory order only and may make a declaratory order without granting any relief as a result of making the order.”16

In examining the application of that provision, Henry J noted it was in similar “terms to s10 Equity Act 1901 (NSW)”, which was considered in Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437 where Gibb J cited Russian Commercial and Industrial Bank v The British Bank for foreign Trade:

“the question must be a real, not a theoretical question; the person raising must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, someone presently existing who has a true interest to oppose the declaration sought.”

Henry J found that passage was addressing sufficiency of standing to oppose rather than a requirement they actively oppose. In support of his view, he affirmed this statement of law,17 “where the Court held it had power to order a declaration when a party who has an interest to oppose the declaratory relief sought, nonetheless, decides not to oppose it. The Court observed the participation of a party with an interest to oppose the declaratory relief sought meant there was a proper contradictor.”18

 

Here the court found that “a contradictor clearly does exist here, has notice of the application and, indeed, appears. That the contradictor, in the form of the respondent defendants, does not oppose the declarations, is no obstacle because the jurisdictional principle goes to the existence of a contradictor, not the position taken by the contradictor.”19 In making that finding Henry J made the declarations sought.20

In taking instructions from a client involved in litigation a solicitor’s primary responsibility is to be reasonably satisfied that the client has the mental capacity to participate in the litigation and to provide proper instructions.21

If the solicitor is not satisfied, then they have limited authority to act – their authority is limited to making due inquiry into the capacity of their client and when that occurs they are assisting the court in their role as an officer of the court. The solicitor has a clear duty to raise it with the court.

In a cautionary statement, the court said: “If the party lacks mental capacity and the solicitor knew or should have known, the solicitor is at risk of having to pay indemnity costs even in the absence of impropriety…A solicitor who persists with representing a client who has lost mental capacity is liable to have costs awarded against them on an indemnity basis even if there is no impropriety.”22

To that end, it is important to be aware that the applicable common law capacity test can be and is altered by statute and rules of court. For example, in most Australian states and territories the necessary capacity to make a power of attorney is dictated by statute.23

In respect of the capacity to conduct of a court matter, a person under a legal incapacity is defined by Schedule 3 Uniform Civil Procedure Rules 1999 (Qld) (UCPR). A person under a legal incapacity includes a person who is not capable of making the decisions required of a litigant for conducting proceedings or who is deemed by an Act to be incapable of conducting proceedings. In Queensland Rule 95 of the Uniform Civil Procedure Rules 1999 (Qld) provides the court may appoint a litigation guardian if the interests of a party who is under a legal incapacity require it.

 

In the context of capacity assessments, Hyytinen sharply reminds us that not only are there a range of mental capacity levels, questions as to mental capacity must also address the task at hand.

Where medical evidence is sought to assist, any material provided to the medical practitioner ought to be framed in the context of the legal matter being addressed, detail the precise test that must be met, and seek the medical opinion specifically addresses those matters.

But most importantly, care must be taken as to the formulation of preconditions in settlement documentation, lest the parties might find themselves in the midst of an unanticipated application where the complexities of civil procedure are tested.

Christine Smyth is a former President of Queensland Law Society, a QLS Accredited Specialist (succession law) – Qld, a QLS Senior Counsellor and Consultant at Robbins Watson Solicitors. She is an executive committee member of the Law Council Australia – Legal Practice Section, Court Appointed Estate Account Assessor, and member of the Proctor Editorial Committee, STEP and Deputy Chair of the STEP Mental Capacity SIG Committee.

Notes
1 Gibbons v Wright [1954] HCA 17; (1954) 91 LCR 423, 437 at [555].
2 Pistorino v Connell & Ors [2012] VSC 438 (25 September 2012) For analysis of this case, see ‘Clients, Capacity and Court Proceedings’ by Katerina Peiros and Christine Smyth, Law Institute Journal, Victoria, August 2013; the casenote, Pistorino v Connell & Ors [2012] VSC 438 (25 September 2012) by Katerina Peiros and Christine Smyth, Retirement and Estate Planning Bulletin, October 2012.
3 Shaw v Crichton [1995] NSWCA 423 (23 August 1995).
4 My thanks to Chris Kahler of Kahler Lawyers for bringing this decision to my attention.
5 Page 1 at line 5.
6 Page 3 at line 5.
7 Page 3 at line 14.
8 Page 3 at line 15.
9 Page 3 at line 15.
10 Page 3 at line 15-20.
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13 Page 3 at line 7.
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16 Page 4 at line 5-30.
17 Page 4 at lines 10-40.
18 Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012)201 FCR 378 referred to by McMurdo J as he then was, in Re Queensland Police Credit Union Ltd (2013) 279 FLR 420.
19 Page 5 at lines 15-20.
20 Page 5 at line 25.
21 Goddard Elliot v Fritsch [2012] VSC 87.
22 [550].
23 For Queensland, see Schedule 3 of the Powers of Attorney Act 1998, and Schedule 4 Guardianship And Administration Act 2000.

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Ranking by risk, but where are the resources?

Ranking by risk, but where are the resources?
September 11, 2020 /

Prioritisation of children’s cases according to risk level is a laudable step, but where are the resources to actually then deal with the cases before the Court?

Referred to as The Lighthouse Project, a new pilot programme focusing on parenting matters and family violence will be commencing in Brisbane registry this year. The Project involves three fundamental tenets;

  • “screening process” where parents will complete a confidential and inadmissible online questionnaire for children’s matters;
  • “triaging” where the matter will assessed and directed into the most appropriate case management pathway based on the level of risk; and
  • High risk cases will be allocated to a specialist list called the “Evatt List”

The Project will be underpinned by the Family Law Amendment (Risk Screening Protections) Bill 2020, which was created following an announcement in December last year from the Government of $13.5 million in funding for this project, in response to a range of calls to better address domestic violence. The pilot of the new family safety risk screening processes will operate from 2020 to 2022, from the Brisbane, Parramatta and Adelaide court registries, which collectively receive more than 42 per cent of filings.

The underlying premise is that ranking matters according to risk means that the Court’s resources can then be allocated to the most urgent cases, thus improving safety and outcomes for families using the family courts.   

There is heavy emphasis on resourcing the assessment process. The screening process starts with a specially developed questionnaire via a confidential and secure online platform known as Family DOORS Triage. Triage team are to be comprised of highly skilled registrars, family counsellors, and support staff with detailed knowledge in family violence and family safety risks. The Evatt List will be managed by a judge-led support team. The team will again have specialised training and is experienced in working with families where high risk safety issues have been identified.

While a laudable initiative in itself, many issues remain. 

Once a risk level is identified, what happens then? The Evatt List is for high risk cases only, and will require proper resourcing to achieve the stated outcomes. For other matters it’s not clear what other case management “pathways” are going to be available. Having court staff signpost external support services will no doubt be useful, but what about the resources to resolve the dispute before the Court?

All our members of society are entitled to expect prompt and fair access to justice. Matters that are not “High Risk” are still important.  What of the matters which are medium or low risk, what resources will be leftover for those families?   

Fundamentally, the issue is an overall shortage of resources in the Family Law system.  Until this is resolved, any prioritisation of one area (no matter how deserving) will lead to even greater delays in the areas that remain and all of the matters still need access to Judges and other resources.

Should you wish to download a copy of this article please click HERE.

Out and about in the Gold Coast

Out and about in the Gold Coast

Banks v Goodfellow sesquicentennial – Is there anything new under the sun?

Banks v Goodfellow sesquicentennial – Is there anything new under the sun?

Banks v Goodfellow sesquicentennial – Is there anything new under the sun?
September 4, 2020 /
Banks v Goodfellow sesquicentennial – Is there anything new under the sun?

This year marks 150 years since Banks v Goodfellow [1870 LR 5 QB 549 (Eng.)] was determined.

In all this time, it has been the classic statement of law on the question of testamentary capacity. It seems almost trite to recite the ratio:

It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties – that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which if the mind had been sound, would not have been made.”1

The genius in the statement is how the language endows the test with flexibility, enabling the courts to adapt to changes in society and the complexities of property ownership, over the course of one and a half centuries.2 “[T]he question is one of common law principle, not of construction of the words used to frame one part of an elaborate judgment in 1870. Judgments should not be read as if they were statutes.”3

So far this year, Banks v Goodfellow has been cited and applied in no less than six determinations as to testamentary capacity in the Supreme Court of Queensland.4 So, after 150 years and innumerable applications, it comes as no surprise that the test has had its fair share of challenges, most recently in the matter of Re SB; Ex parte AC [2020] QSC 139 (Re SB).

Re SB involved an application for a statutory will and a declaration as to the execution by a financial administrator of a non-lapsing binding death benefit nomination in a superannuation fund. SB suffered a severe spinal injury5 in a motor vehicle accident, for which a compromise was reached for $10 million dollars plus costs.6

The extent of her physical injuries are significant. “She can move her head very slightly from side to side. She cannot move her trunk and limbs. She is dependent on a ventilator via a tracheostomy. She is fed via a gastric stoma. She is dependent on carers for activities of daily living. She is unable to speak but she can mouth words and make some noises. Non- family members are unable to communicate effectively with her. It appears that some family members, especially one of her sons, is able to communicate to a limited extent with her.”7

In addition, SB had no formal education, speaks no English, had never held employment in Australia, and prior to receipt of her compensation had no significant assets.8 However, “[t]here was no evidence of cognitive impairment, but objective assessment was extremely difficult due to the communication difficulties”.9

In respect of the application for a statutory will, sections 21-23 Succession Act 1981 (Qld) set out the elements which must be present for a court to make an order for a will, a fundamental criterion being that the proposed testator lacks testamentary capacity.10 The court must also be satisfied that the proposed will was one which the proposed testator would, or might, make if s/he had testamentary capacity.

Here two elements created substantial challenges for the court.

Firstly, how could an assessment of testamentary capacity be undertaken in circumstances where the proposed testator was unable to effectively communicate?11 His Honour critically observed that “[t]he language used in [Banks v Goodfellow] may not pass muster in light of advances in medical knowledge since then”.12

In that context, is Banks v Goodfellow showing its age? It is framed in such a way as to assume the ability to communicate. On that aspect, Martin J agreed with submissions that “capacity to make a will requires not only the mental acuity necessary, but also the ability to convey the testamentary intentions”.13

He accepted the assessing doctor’s opinion that “[a] general requirement for capacity is that a person is able to understand the facts involved in the decision-making and the main choices, weigh up the consequences of those choices and understand how the consequences affect them and communicate their decision. Even with the assistance of her son, SB was unable to communicate to [the doctor] her reasoning behind her decisions.”14

Accordingly, Martin J determined that the proposed testator did not have the requisite capacity to make a will.

Notably, Martin J also observed the Banks v Goodfellow test “was applied in circumstances where the instructions for a will and the formal will itself had been signed by the testator, thus ‘the question [was] whether on both or either of those days the testator was of sound mind, so as to be capable of make a will.’15 It was an assessment, then, that was made of the capacity of someone who had already made a will, not about a person’s capacity to make a will.”16

On the question of the terms of the will, here the testator had never made a will and there was little to no evidence of her prior testamentary intentions and so the court’s ability to assess whether the proposed will was one that the testator might have made was problematic. “There [was] no reliable evidence of SB’s wishes. There is no previous will and no record of any expression by her at an earlier time about her wishes or intentions.”17

Although there was “some indication for some provision to be made for her children”.18

The court noted the applicant’s evidence. The applicant was an experienced succession law solicitor who deposed “that the terms of the proposed will are consistent with what a married woman might be expected to do by way of provision for a long-term spouse and the provision of some benefit to the children of her marriage”.19

Having regard to the evidence before it, the court determined to make the order for the proposed will.20

This decision raises some interesting questions for succession lawyers to consider. On the issue of limited evidence as to the proposed testator’s testamentary wishes, to what extent must an applicant go to ascertain the testamentary wishes of the proposed testator? While the role of an applicant in a statutory will matter involves deposing to their understanding of the testamentary wishes of the proposed testator, it is unusual for an applicant to form an opinion from mere generalisations.

Are Martin J’s observations a fissure in the universality of Banks v Goodfellow? With advances in medical science and science generally,21 should the applicable test for testamentary capacity differ according to whether the court is making an assessment on validity of an existing will, vis making a determination to grant an order to make a will?

If so, ought the definition of capacity be codified generally or confined to the statutory will provisions under Part 2, Division 4, Subdivision 3 of the Succession Act 1981? Could it be that the definition of capacity as propounded in the Powers of Attorney Act 1998 (Qld)22 be adopted to also include a requirement that the person is “capable of communicating the decisions in some way”.

Or is it the case that the “[l]aw [is] marching with medicine but in the rear and limping a little…”23 with there being nothing new under the sun?

Christine Smyth is a former President of Queensland Law Society, a QLS Accredited Specialist (succession law) – Qld, a QLS Senior Counsellor and Consultant at Robbins Watson Solicitors. She is an executive committee member of the Law Council Australia – Legal Practice Section, Court Appointed Estate Account Assessor, and member of the Proctor Editorial Committee, STEP and Deputy Chair of the STEP Mental Capacity SIG Committee.

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Notes
1 Banks v Goodfellow (1870) LR 5 QB 549, 565 per Cockburn CJ.
2 To that end note the approach in Badram v Kerr [2004] NSWSC 735 [49] with respect to knowledge of the extent of property:
“In dealing with the Banks v Goodfellow test it is, I think, necessary to bear in mind the differences between life in 1870 and life in 1995. The average expectation of life for reasonably affluent people in England in 1870 was probably less than 60 years and for others less well off under 50 years: the average life expectation of males in Australia in 1995 was 75 years. Younger people can be expected to have a more accurate understanding of the value of money than older people. Younger people are less likely to suffer memory loss. When there were fewer deaths at advanced age, problems which arise with age, such as dementia, were less common. In England in 1870, if you had property it was likely to be land or bonds or shares in railway companies or government backed enterprises. Investment in ordinary companies was far less common than now. Older people living today may well be aware that they own substantial shareholdings or substantial real estate, but yet may not have an accurate understanding of the value of those assets, nor for that matter, the addresses of the real estate or the particular shareholdings which they have. Many people have handed over management of share portfolios and even real estate investments to advisers. They may be quite comfortable with what they have; they may understand that they have assets which can provide an acceptable income for them, but at the same time they may not have a proper understanding of the value of the assets which provide the income. They may however be well able to distribute those assets by will. I think that this needs to be kept in mind in 2004 when the requirement of knowing ‘the extent’ of the estate is considered. This does not necessarily mean knowledge of each particular asset or knowledge of the value of that asset, or even a particular class of assets particularly when shares in private companies are part of the estate. What is required is the bringing of the principle to bear on existing circumstances in modern life.”
3 Carr v Homersham (2018) 97 NSWLR 328 at [132] per Leeming JA.
4 In the Will of Esme Jane Ferris (deceased) [2020] QSC 26 (19/931) Crow J 2 March 2020
Re SB; Ex parte AC [2020] QSC 139 [2020] 24 QLR (BS No 4753 of 2020) Martin J 29 May 2020
Tolbert v Hicklin [2020] QSC 166 (BS 7852 of 2018) Brown J 10 June 2020
Trinder v Ciniglio [2020] QSC 176 [2020] 26 QLR (BS 6320 of 2018) Brown J 16 June 2020
Duncan v Gibson [2020] QSC 204 (BS 5172 of 2019) Boddice J 9 July 2020
Sebasio, Re [2020] QSC 247 (BS No 10388 of 2019) Callaghan J 12 August 2020.
5 At [7].
6 At [8].
7 At[7].
8 At [12]-[13].
9 At [24].
10 Section 21(1)(a) Succession Act 1981 (Qld).
11 See [26].
12 At[21].
13 At [22].
14 At [26].
15 Citing Banks v Goodfellow at 551.
16 At [20].
17 At [29].
18 At[29].
19 At [30].
20 At [32].
21 scientificamerican.com/article/wireless-brain-implant-allows-ldquo-locked-in-rdquo-woman-to-communicate/ – a woman with locked-in syndrome receives a brain implant that enables her to communicate.
22 POA Sched 3 – Dictionary
‘capacity’ , for a person for a matter, means the person is capable of—
(a) understanding the nature and effect of decisions about the matter; and
(b) freely and voluntarily making decisions about the matter; and
(c) communicating the decisions in some way.
23 Mount Isa Mines Ltd v Pusey [1970] HCA 60; (1970) 125 CLR 383, 395.

ELDER ABUSE NOW A STAND ALONE CRIME IN THE ACT

ELDER ABUSE NOW A STAND ALONE CRIME IN THE ACT
August 28, 2020 /

In the wake of the revelations about institutional abuse of vulnerable people and elder abuse generally the ACT has now enacted specific crimes related to  the treatment of vulnerable people, through the enactment of the:-

Crimes (Offences Against Vulnerable People) Legislation Amendment Act 2020 amend  the Crimes Act 1900 (ACT).

In effect this legislation deems a person and/or organisation in the ACT who has the care of a vulnerable person liable to committing a crime if they breach the new provisions. The new offences of abuse include : failure to protect and neglect of a vulnerable person.

A vulnerable person is defined by reference to the Disability Services Act 1991 or a person over 60 who has an illness or impairment.

The liability extends to institutions responsible for care and those that work in them.

It is a watch this space moment to see which of the other states and territories follow suit.

See this link for the legislation:- 

https://www.legislation.act.gov.au/DownloadFile/a/2020-41/current/PDF/2020-41.PDF

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The perils of litigating, not mitigating

The perils of litigating, not mitigating

The perils of litigating, not mitigating
August 7, 2020 /
The perils of litigating, not mitigating

When it comes to litigating deceased estates, it seems we’re a close second to New South Wales,1 with “1 estate contested per 104,953 persons” annually in Queensland.2

Sadly, adult children of the deceased make up the largest cohort of estate litigants,3 with “enmities and allegiances”4 fuelling disputes.

Litigation of any kind is costly; however, in estate matters, litigation can be a particularly self-defeating exercise, due to the reductive effect of costs orders on the pool of available estate assets in small estates.

Recognising this as a real and serious concern, our courts have created a number of mechanisms to minimise, dissuade, or redirect litigants to a less costly and, some might argue, less combative approach to resolution. They include:

  • Supreme Court of Queensland Practice Direction No.18 of 2018 – Efficient Conduct of Civil Litigation
  • Practice Direction No.8 of 2001 – Family Provision Applications
  • Uniform Civil Procedure Rules, rules 5 and 700A.5

Yet, even with these tools, the number of estate matters before the court demonstrate that many deceased estate disputes remain intractable. Where that occurs, our legislature has created other mechanisms, through the operation of various provisions, granting the court power to guide and/or direct estate litigants to find a less costly resolution.

Buckingham v Buckingham [2020] QSC 230 (Buckingham) explores the power of the court to direct or guide executors through the application of S96 (1) Trusts Act 1973 (Qld) and/or s6 Succession Act 1981 (Qld) in the context of a small estate dispute. His Honour Henry J creatively demonstrates how the court can use its powers to direct quarrelsome family members to find their own pragmatic solution or risk having one imposed on them with attendant costs orders.

Faye Buckingham died on 21 September 20176 survived by her six adult children. By her will Faye appointed two of her six children – Janette and Graham7 – as joint executors of her estate. The estate was not large, worth about $614,756.8 From the outset the administration of the estate was beset with disharmony. In various combinations, the adult children of the deceased did not get along, including the two joint executors.

At the heart of the estate dispute was the true ownership of a unit at Yorkeys Knob. The unit was purchased in 2002 and registered in the name of one of the deceased’s children – James (AKA Jim), however it was bought for $65,000 with money advanced by the deceased and her late husband at their direction.9 So, the question arose as to whether the unit was held on a resulting trust for the estate, or whether it belonged to Jim? Overarching that question was whether there was a reasonable economic benefit to the estate in pursuing the claim and whether an interim estate distribution ought to be made while the matter remained outstanding?

Janette wished to pursue Jim, Graham did not. This contention resulted in the estate not being advanced.10 Consequently, two actions were brought before the court. One by Jim and the other by Janette.

“Jim sought to remove Janette and Graham as executors”,11 substituting in Graham as sole executor.12 Janette brought an application for advice from the court as to the propriety of the estate pursuing Jim for the unit.13

At the time of the hearing the unit was worth between $110,000 and $120,000 gross.14 The unit was subject to a mortgage of $45,549.53 and, if sold, it would be subject to agent’s commission of $9400.15 Those costs reduced the net value of the unit to between $55,000 and $65,000. There would also be a further reduction in net value on determination of capital gains tax.16

Critical to this economic assessment was the question of legal costs. The court received evidence that on a ‘best case scenario’ the estate would “bear about $6000 costs and a worst case scenario of the estate having to bear about $114,000 costs”.17

The court observed: “[D]epending on the outcome of the action and costs orders, the estate risks losing proportionately more than it stands to gain. That equation alone suggests a prudent executor would hesitate to pursue such an action without at least first exploring settlement of the dispute.”18 There lay a further issue – the unwillingness of the executors to negotiate/mediate a resolution.

Henry J elected to deal with Janette’s s96 Trusts Act 1973 (Qld) application first. He considered that “aspects of it inform consideration of the application for removal of the executors”.19

He noted that a key feature of s96 was the requirement that there be “a written statement of facts”.20

Henry J found there was none.21 His Honour rejected the submission by Janette’s counsel that her affidavit material satisfied that requirement.22 When directed by counsel to his own decision in Noftz v Kane,23 where an affidavit was relied on, his Honour distinguished it by clarifying there “the facts were readily apparent from the affidavit. They are not readily apparent here. The affidavits here contain conflicting assertions of belief and fact, some of which do not properly identify their factual foundation and some of which are likely assertions of opinion or hearsay rather than direct evidence.”24

Janette’s counsel argued in the alternative that his written submissions provided the requisite statement of facts. Henry J also rejected that submission because counsel’s written submissions predated various of the affidavits on which the application relied.25 His Honour found that, without a clear statement of facts, he could not grant the application under s96 Trusts Act.

However, Henry J noted there was no objection to the statement of facts issue by opposing parties. So he turned his focus to s6 of the Succession Act 1981 (Qld) which gave him power (in relation to estates) to “make all such declarations…as may be necessary or convenient”.26

In applying s6, Henry J affirmed that the question of whether it was proper for the estate to bring the action, “invites the same approach to the merits as would be applied in a s96 Trusts Act application”.27

In exploring the relevant considerations to which a court must have regard, his Honour affirmed Atkinson J’s summary28 in Coore v Coore,29 cited with approval in Ban v The Public Trustee of Queensland.30 Through paragraph 17 to 63 Henry J examines the evidence in the context of the legal principles. They included the law relating to the presumption of advancement, resulting trusts, and release of equitable rights under the Property Law Act 1974 (Qld).

Ultimately his Honour concluded that there were too many uncertainties for the court to make the order.

His Honour remonstrated that “(e)xecutors acting reasonably in a case of this kind might be expected to secure legal advice. That occurred. Executors acting reasonably might also be expected to follow such advice. That did not occur.”31

The court further critiqued, noting the legal advice “was to ‘strongly recommend’ the pursuit of discussions…in the hope of achieving a financial settlement…This was sound advice…However, it was not in the form of any combined attempt by the executors to achieve such a settlement.”32

“The pursuit of a financial settlement with Jim, as the legal advice urged, was the estate’s most realistic chance of improving its asset pool without putting the existing pool at risk. There appears to be no explanation for the executors’ failure to properly explore such a financial settlement other than the polarising influence of their enmities and allegiances.”33

Notwithstanding the uncertainties in the estate’s material, his Honour found Jim’s case suffered its own weaknesses and as such the advice for the estate to pursue settlement negotiations was a reasonable action for it to take.34 Accordingly, the court dismissed Janette’s application.

Henry J then turned to Jim’s application to remove the Janette and Graham as joint executors and install Graham as sole executor.35 Citing that such a power “derives respectively from s6 Succession Act and s80 Trusts Act36 and s52(2) Succession Act”.37 Whilst each provision has its own criteria, the “overriding consideration is the due and proper administration of the estate”.38 Henry J found that there was disharmony amongst all siblings, pre and post-death, with particular “disputes between Janette and Graham since the assumption of the executorship, with apparently little ground ceded by either. The upshot is that there was an abject failure to distribute the estate as soon as may be and Janette and Graham were so at odds with each other that they were together incapable of advancing the administration.”39

They were particularly at odds over the whether to make an interim distribution while the issue regarding the unit was live.

 Henry J found that, while it was acceptable (and in keeping with the rule in Cherry v Boultbee)40 to withhold the interim distribution to Jim41 when the issue over the unit remained in doubt, it was unclear as to why such a distribution could not have been made to the remaining beneficiaries.

He noted that an interim distribution did eventually take place, but only after his orders in an earlier application.42 Henry J went on to detail the various complaints between each of the executors as to their failings in the conduct of the estate administration.43

Henry J rejected the assertion that “only Janette was responsible for the failure of the joint executorship”44 and that Graham failed to take an objective approach, engaging in “tit-for-tat allegation(s)”.45 With that Henry J found that the “grant of probate to Graham and Janette should be revoked and letters of administration should issue to an independent professionally administrator”.46

However, instead of making the orders immediately, Henry J opted to issue the orders, and address the question of costs at a later date.47 In taking this step his Honour granted the warring executors and quarrelsome family members a reprieve. Henry J stated that he “deliberately selected a date that far ahead in order to allow the siblings one final opportunity to avoid the need for the orders by negotiating a settlement of all their disputes in connection with the estate and its administration…Such a settlement would amply protect the executors in distributing the estate as unanimously agreed without the need for further court supervision.”48

He considered that their knowledge of his “reasons, the order which is looming and its consequent reduction of their prospective inheritances might prompt an abandonment of blame and an outbreak of pragmatism between the main protagonists”.49

There are some valuable lessons from this decision for clients and lawyers alike. They are:

  • Pay attention to the requirements of a legislative provision when preparing material in support.
  • It is one thing to be right, it is another to be economic in the pursuit of your legal rights.
  • Executors have a duty to take legal advice and heed that legal advice.
  • Joint appointments really do mean commonality of mind, with objectivity and reason prevailing.
  • Pursuing your legal rights will not necessarily achieve an immediate result at hearing.
  • If clients litigate and don’t mitigate, the judge they may aggravate!

Christine Smyth is a former President of Queensland Law Society, a QLS Accredited Specialist (succession law) – Qld, a QLS Senior Counsellor and Consultant at Robbins Watson Solicitors. She is an executive committee member of the Law Council Australia – Legal Practice Section, Court Appointed Estate Account Assessor, and member of the Proctor Editorial Committee, STEP and Deputy Chair of the STEP Mental Capacity SIG Committee.

Should you wish to download a copy of this article please click HERE.

Notes
1 ‘Estate Contestation in Australia – An Empirical Study of a Year in Case Law’, White, Tilse, Wilson, Rosenman, Purser and Coe. UNSW Law Journal, Volume 38(3) p890, unswlawjournal.unsw.edu.au/wp-content/uploads/2017/09/38-3-15.pdf.
2 Ibid.
3 Ibid.
4 Buckingham v Buckingham [2020] QSC 230 at [72] (Buckingham).
5 For application of Rule 700A see Outram v Public Trustee of Queensland [2020] QSC 159; Pitt v Fricke [2019] QDC 193; Stojanovska v Stojanovski (No.2) [2019] QDC 198; Baker v Baker (No.2) [2019] QDC 140; Sweaney v Bailie [2017] QDC 295.
6 At [1].
7 Ibid.
8 At [21].
9 At [30].
10 At [82].
11 At [3].
12 Ibid.
13 At [7].
14 At [26]. As with all estate there were other minor matters in contention – see para [22]-[23].
15 At [25].
16 The amount of which could only be determined on identification of the true ownership of the property.
17 At [25].
18 At [27].
19 At [6].
20 At [8].
21 At [9].
22 Ibid.
23 Above [2015] QSC 372.
24 At [11].
25 Ibid.
26 At [14].
27 At[16].
28 At [17].
29 [2013] QSC 196.
30 [2015] QCA 18.
31 At [66].
32 At [71].
33 At [72].
34 At [73].
35 At [79]-[94].
36 At [79].
37 At[80].
38 At 79 citing Baldwin v Greenland [2207] 1 QdR 117.
39 At [81] – [82].
40 At [85] The rule applies where a person who has a right to share in a fund to which that person owes money; the debtor is barred from receiving an entitlement in the fund until the debt has been paid. A copy of Cherry v. Boulton can be found here: worldlii.org/int/cases/EngR/1839/1099.pdf.
41 At [85] provided sufficient funds remained in the estate to pursue the matter.
42 Ibid.
43 At [86]-[89].
44 At [92].
45 Ibid.
46 Ibid.
47 At [94].
48 Ibid.
49 Ibid.

FAMILY LAW – STILL OPEN FOR BUSINESS

We did it again!

We did it again!
July 30, 2020 /

The 2020 listing of “Leading QLD Wills & Estates Litigation Law Firms” is out and Robbins Watson Solicitors landed in the recommended list once again along with our consultant Accredited Specialist Succession Lawyer Christine Smyth as one of the “Leading QLD Wills & Estates Litigation Lawyers” of 2020.

Doyle’s Guide is an independent and highly respected international ratings agency which exclusively focusses on identifying the best in class Lawyers and  Law Firms across the range of practice areas, in Australia and in 5 other countries whose legal systems are founded on the English system of common law. 

Achieving Doyle’s guide listing is very difficult to do – and this is our 5th straight year of Doyles’ guide recognition.

Our lawyers are experts in Estate law and it shows – in the quality of representation and the quality of outcomes.  Equally importantly, however, is the fact that our team are responsive and genuinely care about our clients and the issues they face.   Our clients never have to face these difficult legal challenges alone.

Whether you are an executor trying to complete his or her obligations under a will, and wish to ensure that your actions are not subject to legal challenge, or if you are a person who is concerned that merely following the terms of the existing will lead to injustice, we have the experience and knowledge to help. Contact us today.

Associate appointed