In 2012 the plaintiff, an elderly person, appointed one of his daughters, the first defendant, as his attorney under an enduring Power of Attorney. In 2017, the plaintiff commenced these proceedings by a tutor for the recovery of land and money said to have been transferred by the first defendant to herself and to the second defendant, who is the first defendant's daughter and the plaintiff's granddaughter, contrary to the terms of the Power of Attorney and in breach of fiduciary duty.
Since July this year, these proceedings have been fixed for hearing for four days commencing on Tuesday, 4 February 2020. But the plaintiff died in early November this year. The parties now disagree about the effect of his death upon the trial next year.
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Background to the Motion
At a directions hearing on 15 November, the Court appointed the eldest of the plaintiff's sons to represent the plaintiff's estate under Uniform Civil Procedure Rules r 7.10 for the purposes of the proceedings. This appointment was made so the proceedings could continue to be heard on the appointed hearing dates. Before that, he had been the plaintiff's tutor and then the third defendant in the proceedings. No relief had been sought against him as a defendant. The first defendant now applies by motion to remove the eldest son as a representative of the plaintiff's estate, to stay the proceedings until the resolution of other probate proceedings, and to appoint another younger son of the plaintiff to represent the plaintiff's estate in the proceedings.
An Elderly Plaintiff by his tutor the NSW Trustee & Guardian v A Daughter... [2019] NSWSC 1747 | Case summary | Zoe
The estate opposes all the relief sought on the first defendant's motion. This judgment dismisses the first defendant's motion, for the reasons which follow.
Although the plaintiff is now deceased, before his death his estate was under the management of the NSW Trustee and Guardian and these proceedings were commenced in the Protective List. For that reason, and pending further argument about the proper final form of publication of reasons in this matter, the plaintiff's name and the names of other members of the family or anything that that might lead to his identification, have not been published in these reasons. Instead generalised pseudonyms have been used here for all the parties. The plaintiff will sometimes be referred to in these reasons as "the deceased" and his property will generally be referred to as "the estate".
Principal among the transactions initiated by the first defendant, using the Power of Attorney about which the plaintiff complains, was the transfer of a residential property ("the property") to the second defendant. The proceedings also seek to set aside various other transactions by which the defendants received monetary benefits from the plaintiff, so that these benefits can be returned to the plaintiff's estate.
The NSW Trustee and Guardian had been acting as the plaintiff's tutor since shortly after the commencement of the proceedings. The eldest son initially acted as the plaintiff's tutor until he was replaced by the NSW Trustee and Guardian. After the plaintiff died in early November. The NSW Trustee and Guardian sought to retire from the proceedings. At a directions hearing on 21 November 2019, the Court permitted the NSW Trustee and Guardian to retire and to file a Notice of Ceasing to Act. The NSW Trustee and Guardian was thereby excused from any further obligation to discharge duties as the tutor of the plaintiff.
The question then arose as to what should happen to the hearing on 4 February next year. On 21 November, the Court asked the parties whether the plaintiff's death changed the issues in these proceedings, or were likely to alter the evidence, in such a way that the hearing could not now proceed.
The Court made the same enquiries about other co-listed and related family provision proceedings that the first defendant had commenced in 2018 against the estate of her late mother, who had died two years before the plaintiff. In those proceedings, the named defendants were the eldest son and another younger daughter. The family provision proceedings were set down to be heard at the same time as the plaintiff's proceedings against the first and second defendants.
In response to these enquiries, the Court was not told by either side anything which indicated that the hearing in the first week of term next year should be vacated. But the defendants foreshadowed that they wished to challenge the hearing of these proceedings in February 2020. The defendants also sought to challenge the appointment of the eldest son under UCPR, r 7.10 to represent the estate.
On 21 November, it appeared desirable to the Court that someone be appointed to represent the estate. The Court concluded that it was appropriate for the eldest son to be so appointed because he fulfils the criteria for such an appointment. He is named as the executor and a beneficiary under a will made by the plaintiff in 2018, which divides his estate among his children equally, including the eldest son. The estate is not suing the eldest son for the recovery of any money. He has no other conflict of interest with the estate. He would benefit from the estate, under the plaintiff's will which he propounds. And the assets of the estate are wholly situate in New South Wales. Although the eldest son is resident overseas, he has property in this State.
The eldest son has supported the commencement and continuation of these proceedings well before the plaintiff's death. He has already shown himself to be someone interested in pursuing the preservation of the plaintiff's estate, including by giving financial assistance to the plaintiff whilst the proceedings continued. He is now a creditor of the estate. At the same time, the plaintiff's younger daughter has provided financial assistance to the plaintiff. This has been necessary because the transfer of the plaintiff's assets to the defendants had depleted the plaintiff's financial resources.
The eldest son's UCPR r 7.10 appointment on 21 November should be understood to have been made only to represent the estate for the purposes of these proceedings. He does not have any general authority to administer the estate. He has not been appointed as an administrator of the estate.
There is a dispute about the plaintiff's last will. The eldest son has commenced probate proceedings seeking a grant of probate in solemn form for a grant of the plaintiff's 2018 will. In the alternative, the eldest son seeks probate of another 2011 will to a similar effect. Both wills divided the deceased's property equally among his five children.
But in those probate proceedings, the first defendant has foreshadowed that she will propound a 2012 will of the plaintiff, which gives her, among others, a more substantial part of the estate and gives nothing to some other members of the family, including the eldest son. In the probate proceedings, the eldest son and the younger daughter will allege that the circumstances in which the first defendant arranged for the 2012 will to be executed by the plaintiff were suspicious.
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Orders Sought on the Motion
With this background, the Court now briefly deals with each of the orders sought in the first defendant's motion.
The first order sought on the first defendant's motion is that the eldest son's appointment under UCPR, r 7.10 be set aside. The Court declines to make that order. The first defendant's additional evidence on the motion does not suggest that the eldest son now has any conflict of interest with the estate. There is no new evidence suggesting that the underlying basis for the Court appointing him on 21 November has in any way altered. The commencement of the probate proceedings is not such a reason. The probate proceedings will determine, according to which of several competing wills, the plaintiff's estate will be distributed. These proceedings seek to recover property for the deceased's estate.
Ordinarily an application for the removal of one representative of an estate would need to advance the name of some alternative independent person to replace the person being removed from that office. But here the first defendant, the applicant on the motion, suggests in evidence read in support of the motion that another sibling should be made the representative of the estate in place of the eldest son.
The first and second defendants properly accept that they cannot be made representatives of the estate. They are defendants against whom relief is actively sought to recover money on behalf of the estate. They cannot be on both sides of the record and they well understand that. But Mr Hill of counsel, on behalf of the estate, has pointed out that the estate also has potential claims against this other sibling for recovery of money and that he would not be an appropriate appointment to replace the eldest son. Moreover, no formal consent has been provided on behalf of this other sibling. The groundwork for considering him as an alternative has not been provided.
The first defendant has suggested that an independent person, a solicitor perhaps, might be able to be appointed to represent the estate, rather than the eldest son. But the Court cannot consider that on the existing evidence. The first defendant has not advanced to the Court the name of any independent appropriately qualified person who is willing to take that appointment. Indeed, it seems to the Court unlikely that such a person could be found, because the estate is presently either insolvent or close to being insolvent, until the present proceedings are resolved. The estate will remain potentially insolvent, if it is unsuccessful in these proceedings. But if the estate is successful there should be a fund to be administered and distributed to the beneficiaries.
The Court will therefore dismiss the first defendant's claim to replace the eldest son as the representative of the deceased's estate.
Orders 2 and 3 of the first defendant's motion seek that these proceedings be stayed until resolution of the proceedings in the Court's Probate Division to decide which of the 2018, 2012 or the 2011 wills is the deceased's final will. The orders sought on the motion contemplate that whoever is granted probate of the will that is ultimately admitted to probate should become the representative of the estate in these proceedings.
In substance there what is proposed is a stay of these proceedings, which would only be revived once it was known who the executor was, as a result of the resolution of the probate proceedings. Therefore, the first defendant's motion seeks to take the matter out of the list on 4 February 2020 until that occurs.
There are several problems with this proposal. The first is that unless, and until, these proceedings are resolved the estate may well be insolvent. There are no demonstrably substantial assets in it other than those which are sought to be recovered through these proceedings. The probate proceedings may have little point unless these proceedings are conducted first.
Secondly, these proceedings can be conducted on behalf of the estate irrespective of who becomes the executor. And that is in part the point of the minimalist appointment that has taken place of someone to represent the estate under UCPR, r 7.10.
A few examples of possible outcomes of these proceedings will readily demonstrate this. If these proceedings were stayed until the outcome of the probate proceedings, the first defendant may be successful in the probate proceedings. She may gain a grant of probate of the 2012 will. But she still cannot be appointed to represent the estate in these proceedings, because she is a defendant in these proceedings and will still be in a position of conflict of interest with the estate. So she will then still find herself in the position in which she is now. Waiting will not assist her.
The estate may be successful in these proceedings. The property could then be returned to the estate. But the eldest son may yet be unsuccessful in propounding the 2018 will. If the 2012 will is ultimately admitted to probate, then the property and other parts of the estate will be distributed according to that will. That may in turn have the ultimate result of benefitting the first and second defendants again.
Thirdly, taking the course of staying these proceedings until the outcome of the probate proceedings is known, seems to the Court to be inconsistent with the overriding objectives of the Civil Procedure Act 2005 to conserve resources, and to bring on for hearing without unnecessary delay the real issues in dispute.
Good trial management indicates that the matter should proceed to hearing now. The parties are prepared for hearing on 4 February. They have filed all the necessary evidence. They are ready for that hearing. The dates have been allocated and the parties have engaged lawyers to appear. Moreover, it is difficult to see why the family provision proceedings could not proceed in any event. After all, they are brought not against the plaintiff's estate but against the parties' mother's estate.
Nothing has been put before the Court that shows that there would be any prejudice to any party by reason of the hearing continuing on the appointment date, subject to two matters. First, the first defendant raised the fact that the situation generally needed to be re-evaluated because of the plaintiff's death. But when pressed, she could suggest no particular change to the existing pleadings nor could she identify any additional evidence that was necessary as a result of his death. And even if additional evidence were necessary, there is now two months before 4 February 2020 for such evidence to be put on. Secondly, the first defendant submitted that she wanted the opportunity to amend her cross-claim because of the death. But no amended cross-claim has been put before the Court to identify what amendments are now sought nor did the first defendant articulate them. The application is based upon fairly vague statements about what changes would be necessary. The Court cannot act upon that. It can only act upon a specifically amended document that has already been served on the other side.
Finally, the first defendant argued that her late father did not want the eldest son to represent the estate. But the deceased's wishes are in dispute. Moreover, his wishes do not control what the Court does in these circumstances, which he is unlikely ever to have contemplated.
For these reasons the first defendant's motion will be dismissed. No reason was advanced to persuade the Court that costs should not follow the event. I will therefore make an order for costs in favour of the estate against the first and second defendants.
Other directions need to be made to prepare the matter for trial. These directions are also being made to assist the parties at that hearing.
[4]
Conclusion and Orders
Accordingly, the Court will make the following orders and directions:
1. Dismiss the first defendant's motion dated 29 November 2019 ("the motion").
2. Order that the first defendant pay the estate's costs of the motion.
The Court makes the following further orders and directions:
1. Directs each party on or before 4pm on 21 January 2020 deliver to my Associate (by email) and to all other parties:
1. A list of the affidavits proposed to be relied upon;
2. A list of objections to affidavits and a list of the deponents required for cross examination; and
3. A chronology.
1. Directs that each party on or before 4pm on Friday, 31 January 2020 deliver to my Associate and to all other parties that party's written submissions, including a statement of the principal issues in dispute. These documents may be provided by email.
2. Directs that each party on or before 4pm on 3 February 2020 deliver to my Associate a list of authorities upon which each party relies and PDF copies of those authorities.
3. Notes that it expects the directions contained in paragraphs 1, 2, 3 and 4 to be strictly complied with, and that it expects the parties to have a second copy of the Court book available to provide to the Court at the hearing.
4. Liberty to apply is granted to the first and second defendants to re-list the proceedings by Friday 13 December 2019 if they say they have not received the Court books by that date.
5. Direct the first and second defendants to indicate to the Court by email by 13 December 2019 that they have received the Court Books.
6. Note that the Court Books for both the first and second defendants may be delivered to the [not published] property.
[5]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 09 December 2019
Parties
Applicant/Plaintiff:
An Elderly Plaintiff by his tutor the NSW Trustee & Guardian