Boyd v Thorn

Boyd v Thorn - [2016] NSWSC 837 - NSWSC 2016 case summary — Zoe

Background

I had occasion to consider the background to this matter in a judgment given earlier this year (Boyd v Catherine Margaret Thorn as Executrix of the Estate of the late Betty McAuley [2016] NSWSC 588). I venture to repeat what I there said as to the background to the 2011 proceeding. "3 On 22 March 2011 the then plaintiff, Betty McAuley, by her tutor the NSW Trustee and Guardian, commenced proceedings in the District Court against Mr Ian Geoffrey Boyd. Ms McAuley sought judgment for $260,000 and interest in respect of a withdrawal made by Mr Boyd from her account of $260,028 on or about 6 August 2009. 4 The proceedings were transferred to the Supreme Court. By an amended statement of claim filed on 11 October 2012 Ms McAuley by her tutor claimed additional declarations and orders, including: • a declaration that Mr Boyd applied moneys obtained from Ms McAuley in circumstances involving undue influence and/or unconscionable conduct in payment of a National Australia Bank loan secured by a mortgage on a property in Fletcher Avenue, Miranda (called the defendant's property); • a declaration that the defendant's property was charged in favour of Ms McAuley in respect of moneys applied by Mr Boyd in payment of the NAB loan secured by the NAB mortgage whether moneys had been obtained from Ms McAuley in circumstances involving undue influence or unconscionable conduct; • an order for possession of the defendant's property; • an order for judicial sale of the defendant's property; and • an order for tracing of moneys obtained by Mr Boyd from the plaintiff in payment of the NAB loan secured by the NAB mortgage. 5 Whilst the statement of claim referred to the property at Fletcher Avenue, Miranda as 'the defendant's property', Mr Boyd was not the sole owner of the property. At the time he and Mrs [Dawn] Boyd were the registered proprietors as joint tenants. Mrs Boyd was not joined as a defendant. 6 The proceedings were heard before Robb J over five days between April and June 2014. Mr Boyd represented himself. By the time of the hearing Mrs McAuley had died. The plaintiff, Mrs Thorn, was the executrix of her will. Robb J found in substance that Mr Boyd took unconscionable advantage of Mrs McAuley's age and infirmities in procuring the transfer of $260,000 and that it was unconscionable for him to retain the money (Catherine Margaret Thorn as executrix of the estate of the late Betty McAuley v Ian Geoffrey Boyd [2014] NSWSC 1159). His Honour also found that Mr Boyd had breached the fiduciary duty he owed Mrs McAuley as her attorney under power. His Honour concluded his reasons as follows: 'Relief [157] It is necessary that I address the relief that should be granted in these proceedings. [158] First, an order must be made setting aside the transfer of Mrs McAuley's $260,000 to Mr Boyd that occurred on 6 August 2009, and requiring Mr Boyd to repay that money to Mrs Thorn as executor of Mrs McAuley's estate. [159] Secondly, an order should be made that Mr Boyd pay interest on the money that he received from Mrs McAuley from that date. … [162] As Mrs McAuley's attorney, Mr Boyd owed a fiduciary duty to her that required him to act in her interests rather than his own. For the reasons that I have set out above, I find that Mr Boyd acted entirely in his own interests and ignored the interests of Mrs McAuley. In the manner in which he deployed the power of attorney to cause the Bank to transfer McAuley's $260,000 to his own account, Mr Boyd breached his fiduciary duty. [163] Consequently, Mrs Thorne is entitled to appropriate orders that will enable her to follow the money into any property owned by Mr Boyd, where that property was either acquired with the money, or where any mortgage over the property was reduced using the money. [164] As Ms Gleeson observed in her closing submissions: 'The documentary evidence of what became of the money is scant.' It does appear that on 12 August 2009, $200,000 was paid to reduce Mr Boyd's NAB Base Variable Rate Home Loan. There are other transactions (referred to in par 105 of Ms Gleeson's closing submissions) but those transactions do not with sufficient clarity establish what eventually happened to all of the funds represented by Mrs McAuley's $260,000 gift. [165] I am satisfied that Mrs Thorn is entitled to trace that money, and if necessary to an accounting from Mr Boyd. It may be that Mrs Thorn is also entitled to some interlocutory relief to prevent Mr Boyd from disposing of any property over which Mrs Thorn might be entitled to a charge. …' 7 Orders were made on 6 November 2014 to give effect to these reasons. The declarations and orders made included the following: 'The Court declares: 1. That upon receipt of the sum of $260,000 on 6 August 2009 from Mrs Betty McAuley, in circumstances involving unconscionable conduct and breach of the defendant's fiduciary duty, the defendant held such monies on trust for Betty McAuley. The Court orders: 2. The transfer of $260,000 from Mrs Betty McAuley to the defendant dated 6 August 2009 is set aside. 3. Judgment in the sum of $260,000 to the plaintiff in her capacity as executrix of the estate of Betty McAuley. 4. The defendant is to pay interest on the sum of $260,000 at the rate prescribed in UCPR 6.12(8), from 6 August 2009 to the date of this order. 5. The plaintiff is entitled to trace the sum of $260,000, obtained from Mrs Betty McAuley in circumstances involving unconscionable conduct and breach of fiduciary duty, into any property that the defendant acquired with that money, or in respect of which the defendant repaid a mortgage secured on the property with that money, or any part thereof. …' … 11 There was a further hearing before Robb J on 12 February 2015. On 13 March 2015 his Honour made further declarations and orders which Mrs Boyd now claims should be set aside. Relevantly the declarations and orders included the following: 'The court: (1) Declares that the defendant holds his interest in the property comprising Lot 10 in Deposited Plan 28150 at Sutherland (the Property), upon a constructive trust for the plaintiff to the value of $200,000. (2) Declares that so much of the judgment debt in the sum of $260,000 created by order 3 made by the court on 6 November 2014 as represents a principal sum of $200,000, and an award of pre-judgment interest under the Civil Procedure Act 2005 (NSW) s 100 on that principal sum, together with interest accruing after judgment on that principal sum, pursuant to s 101 of the Civil Procedure Act, constitutes an equitable charge on the defendant's interest in the Property. (3) Grants liberty to apply in respect of the implementation of these orders, including for an order for sale to realise the charge, and an order in respect of the sale of the Property pursuant to s 66G of the Conveyancing Act 1919 (NSW).'"
On 24 March 2016 Mrs Dawn Boyd filed a summons in proceeding 2016/91811 in which she sought orders to set aside the orders made by Robb J on 13 March 2015 on the ground that she was a necessary party to the proceeding in which those orders were made but had not been joined.
I heard her application on 7 April 2016 and at the same time there was listed before me for hearing a notice of motion that had been filed by Mrs Thorn seeking the appointment of trustees for sale of the Sutherland property.
On 11 May 2016 I acceded to Mrs Boyd's application and set aside the orders made by Robb J on 13 March 2015 on the ground that Mrs Boyd was a necessary party to the application for those orders but had not been joined (Boyd v Catherine Margaret Thorn as executrix of the estate of the late Betty McAuley [2016] NSWSC 588). I made orders then for the joinder of Mrs Boyd as a second defendant and for the rehearing of that application. That application is now listed for hearing at the end of July before Rein J.
Insofar as Mr Boyd's amended statement of claim seeks to set aside orders made by Robb J on 13 March 2015 it is now otiose, as those orders have already been set aside. But his application goes further. In substance, he also seeks to set aside the orders made on 6 November 2014 on the grounds that they were procured by fraud.
Mr Boyd also seeks orders setting aside the grant of probate made in favour of Mrs Thorn in respect of Mrs McAuley's estate.

[4]

Procedural challenge

Before proceeding with the merits of the application, it is necessary to say something about a procedural challenge that Mr Boyd raised in written submissions delivered before today's hearing. Those matters were not pressed in the course of oral submissions but I did not understand them to have been abandoned.
The chronology of events so far as the present application is concerned are as follows: As I have said, the statement of claim was filed on 6 April 2016. On 29 April 2016 Mrs Thorn filed a notice of motion seeking summary dismissal of the proceeding and in the alternative an order that the statement of claim be struck out.
As I have said, the amended statement of claim was filed on 4 May 2016. On 5 May 2016 a registrar made orders extending the time for the filing of a defence until a date after the defendant's notice of motion had been heard and determined. Other orders then made included that the defendant be granted leave to file an amended notice of motion in relation to the amended statement of claim, and that notice of motion be filed by 19 May 2003 together with any further evidence in support of it on which the defendant would rely. Orders were made for the plaintiff to serve any evidence and the matter was stood over to the registrar's list on 12 July 2016.
On 11 May 2016 I varied those orders by fixing the defendant's notice of motion for summary dismissal for hearing before me on 14 June 2016 and I directed that any further affidavits by any party in relation to that notice of motion were to be served by 27 May 2016.
Those orders were made in the context that the orders made by the registrar provided for the notice of motion to be amended. As it was, the notice of motion, as amended on 19 May 2016 simply sought an order that the amended statement of claim be struck out, rather than that the statement of claim be struck out.
The substance of the matter clearly was that the defendant was seeking summary dismissal of the proceeding and was seeking to have the amended statement of claim struck out if the proceeding were not summarily dismissed.
On 6 June 2016 Mr Boyd sent a letter to my associate in which he sought an adjournment of the hearing until mid to end of July. One of the grounds of the application was that due to his wife's health he had been unable properly to prepare for today's hearing and the other was that his employer had rescheduled simulator training for this week. His occupation is that of a commercial pilot.
I refused that application on 9 June 2016 for reasons which I then gave noting that today had been fixed for hearing of the defendant's amended notice of motion.
In written submissions Mr Boyd has contended that: "The defendant's notice of motion and affidavit filed on 29 April 2016 were invalidated by my subsequent filing of an amended statement of claim on 4 May 2016 ... the defendant has never served on me an amended notice of motion relating to my amended statement of claim and today [viz 10 June 2016] is the first day I have ever heard of the purported existence of an amended notice of motion ... the due date for the return of the defendant's defence was 2 June 2016. The absence of a defence or filed amended notice of motion to my amended statement of claim places the defendant in default. This situation negated my need to request the adjournment which the Court rejected yesterday and should have avoided the time and cost of an unnecessary Court hearing and the humiliation of having to acquiesce to the demands of the defendant's solicitor and provide sensitive and personal evidence to support my request for an adjournment which was rejected regardless ..."
In a further written submission Mr Boyd repeated his contention that Mrs Thorn was in default in filing a defence and said that the Court's decision to allow the defendant's solicitor, Mr Paterson, to comment on his request for an adjournment when the defendant was in default and had no legal rights on the progress of proceedings, together with the Court's rejection of his request for an adjournment, suggested a bias that only further consolidated his allegations that the proceedings were an abuse of process. He also submitted that the defendant should be precluded from having any extra time to file a defence and submitted that because the defendant's notice of motion filed on 29 April 2016 had been "invalidated" by the filing of the amended statement of claim, the hearing set for today was invalid.
There is no substance to these submissions. So far as the complaint is made that the defendant is not entitled to be heard because she is in default of the time for filing a defence, it can be observed first that even if she were in default, it not being a default in compliance with the Court's order, such default would not preclude her maintaining this application; but secondly, the orders of the Registrar on 5 May 2016 provided for the extension of the time for filing of the defence until the defendant's notice of motion has been heard and determined.
So far as the complaint that the notice of motion had been "invalidated" by the filing of an amended statement of claim is concerned, there is simply no legal basis for that contention. The matter has been appropriately dealt with by the notice of motion's being amended to refer now to the amended document.
Substantially the same issues arise in relation to either the original statement of claim or the amended statement of claim and no prejudice could be identified.
Finally, I should record that no application was made that I should recuse myself from dealing with this application on the ground of actual or apprehended bias.

[5]

Findings of Robb J: Catherine Margaret Thorn as executrix of the estate of the late Betty McAuley v Boyd [2014] NSWSC 1159

Turning to the substance of the application, it is convenient to summarise the key findings of Robb J that illustrate the context in which the allegations in the amended statement of claim are raised.
Mr Boyd was the nephew of Mrs Betty McAuley. She died on 26 December 2012. The defendant, Mrs Thorn, was the daughter of Mr McAuley. Mr and Mrs McAuley married late in life. Mr McAuley predeceased Mrs McAuley and had died by the time of the events of 2009 which gave rise to these proceedings.
Robb J described Mrs Thorn as being a stepdaughter, and executor of Mrs McAuley's Will. The description of her as Mrs McAuley's stepdaughter is the subject of allegations of fraud to which I will return in due course.
Robb J recorded (judgment at [19]) that Mrs McAuley made her last will on 11 December 2006. Mrs Thorn was appointed as the executrix. She left her house in Camperdown to her four "stepdaughters" as tenants-in-common in equal shares. She bequeathed her residuary estate to such of four named persons who survived her and if more than one as tenants-in-common, those being Mr Boyd's mother and three children of Mrs McAuley's stepdaughters.
In the events which happened, Mr Boyd's mother predeceased Mrs McAuley. He is not entitled to any part of Mrs McAuley's estate under her will.
The challenge to the grant of probate is not based upon any challenge to the making of the Will on 11 December 2006. In any event, Mrs McAuley had made earlier wills under none of which would Mr Boyd have inherited.
As of July 2009, Mrs McAuley's assets consisted principally of her house in Camperdown, $260,000 held on deposit with the AMP and $150,000 held in a Challenger Investment Account. She was in receipt of a war veteran's pension (judgment at [20]).
On 11 December 2006, Mrs McAuley had executed a power of attorney to Mrs Thorn's husband, Mr Robert Thorn, but did not then give the power of attorney to him (at [23] and [26]). Robb J found that in April 2009 Mrs Thorn and Robert Thorn got Mrs McAuley to cancel her cheque book which she had lost (at [24]).
On 23 July 2009, Mrs McAuley's solicitor, Ms Thorburn was instructed by Mrs McAuley to send the power of attorney she had executed in December 2006 to Mr Robert Thorn (at [26]).
Also on 23 July 2009 an ACAT assessment was carried out in relation to Mrs McAuley at her home, with Mr and Mrs Thorn and a Dr Loh being present. The ACAT report concluded by saying that the: "Client tended to let daughter do the talking. Her conversation was brief and confabulated somewhat. Mrs McAuley is alert, responsive MMSE 24/30 with 0/3 for 3 minute recall. She is independent in personal care, meals are met by neighbours and family, house is clean and tidy. Client was not interested in attending a Day Centre. No further assistance is required at present, and client wishes to remain living in her home". (at [29])
Robb J found that in late July 2009 Mr Thorn was advised by the AMP that Mrs McAuley's investment account with it had recently been closed. His Honour recounted evidence given by Mr Boyd that on about 13 July 2009 Mrs McAuley telephoned him and said, "I just signed and sent in documents to cash the AMP investment account", and that on about 30 July 2009 Mrs McAuley again telephoned him and asked him to take her to "a bank to deposit a cheque from AMP". Mr Boyd took Mrs McAuley to a bank where he saw her deposit a cheque for $260,000. On the same day Mr Boyd saw Mrs McAuley make out a Commonwealth Bank cheque in his favour which he then deposited into a bank account that he held jointly with his wife (at [34]). That cheque was not cleared because Mrs McAuley's cheque book had been cancelled.
A bank officer later advised that the cancellation had been effected by Mr Thorn under his power of attorney. Robb J found (at [43]) that on 3 August 2009 Mr Boyd must have learned that Mrs McAuley's cheque had been cancelled because he had a conversation with Ms Thorburn on that day which she recorded. Mr Boyd had complained to her that the Thorns were stepping in to manage his aunt's affairs.
Robb J found (at [44] and [45]) that Mr Boyd knew that a gift to him of $260,000 was a fundamental departure from Mrs McAuley's wishes as reflected in her wills. Ms Thorburn gave evidence that Robb J accepted that on 3 August 2009 Ms Thorburn responded to a statement made by Mr Boyd that he wanted someone to have financial control of Mrs McAuley's affairs who was not a beneficiary under her will by saying: "If Betty had capacity she can certainly revoke her power of attorney but who would be appropriate? I will ring Betty and speak to her and depending on what she says I will then speak to Robert and Catherine". (at [48])
His Honour found that on 3 August 2009 Ms Thorburn had a conversation by telephone with Mrs McAuley which his Honour set out at length (at [54]), from which conversation Ms Thorburn was concerned about Mrs McAuley's mental capacity. It was her view that Betty did not have capacity to make a gift of large sums of money. She said that Mrs McAuley had told her that she had agreed to give Mr Boyd $260,000 because he was speaking about his business and he needed money.
Robb J found that on the next day, 4 August, Mr Boyd had a telephone conversation with Ms Thorburn in which he told her that he was down at the Commonwealth Bank with Mrs McAuley and had discovered that she had lost control of her money and that her account had been closed and her money placed on term deposit. Ms Thorburn gave evidence that Mr Boyd said that he was relying on Betty's money and was in serious financial trouble.
On the same day, Ms Thorburn wrote to Mr Boyd warning him not to proceed until Mrs McAuley's capacity to make a properly informed decision to give him $260,000 had been established by a consultation with a geriatric specialist.
Robb J found (at [66]) that Mr Boyd agreed with this course. But on 4 August 2009 a fax was sent on the letterhead of Mr Boyd's business revoking Mr Thorn's power of attorney (at [67]). Mr Boyd asserted that Mrs McAuley was vehement about wanting to revoke that power (at [69]). Robb J also found that on 5 August 2009 Mr Boyd typed a letter that Mrs McAuley signed and that was faxed from his business address advising Ms Thorburn that Mrs McAuley had transferred her affairs to another solicitor.
Also on 5 August 2009, Mrs McAuley executed an enduring power of attorney appointing Mr Boyd as her attorney. The clause in that power of attorney authorising the power to confer benefits on himself (clause 6) was crossed out. The document was witnessed by a solicitor, a Ms Anika Fleet (at [73]-[74]).
Also on 5 August 2009, Mrs McAuley wrote out by hand and signed a letter stating that, being of sound mind, she wished to give Mr Boyd the sum of $260,000 and the Challenger Bank account of $150,000. The letter was witnessed by Ms Fleet, who wrote words in capitals under her signature, "NO ADVICE GIVEN".
The transfer of $260,000 for Mr Boyd was effected on 6 August 2009.
Robb J found that in agreeing to effect the transfer the bank relied upon the power of attorney that Mr Boyd admitted he had showed the bank (at [88]-[90]). His Honour recorded (at [92]) that later on 8 March 2010, Mr Boyd had written to a senior legal officer at the NSW Trustee and Guardian in which he had said that: "The use of Power of Attorney to make this transaction was not the preferred method of conferring this gift. The Power of Attorney was used as a last resort after two previous attempts to transfer the gift by more conventional methods were prevented by unlawful interference from one of my Aunt's [sic] former step daughters Mrs Thorn and her husband." (at [91])
His Honour found that Mr Boyd procured the power of attorney because his other attempts to have the $260,000 transferred to his account had failed, and he used it to persuade the bank to make the transfer (at [94]).
He also found that Mr Boyd procured Mrs McAuley to sign the letter of 6 August setting out her wish to give him $260,000, and a further $150,000, and said that Mr Boyd needed the letter to bridge the gap in his authority. That arose because the exclusion in the power of attorney of his power to make a gift in his own favour (at [98]).
Robb J found that Mr Boyd's steps in acting in the way in which he initiated Mrs McAuley's generosity and causing her to take steps to implement the transfer of $260,000 into his account, and then retaining the money, was unconscionable and it would be unconscionable for him to keep the money. His Honour applied principles summarised in Aboody v Ryan [2012] NSWCA 395, particularly at [65].
His Honour found that Mrs McAuley suffered from a cognitive impairment of which Mr Boyd was aware, or at least of which he had notice (at [132], [133] and [139]), and he found that Mr Boyd's dire financial need caused him to ignore Ms Thorburn's advice and to procure the termination of Mr Thorn's power of attorney the termination of Ms Thorburn's retainer to act for Mrs McAuley, the granting of a power of attorney to himself and to having Mrs McAuley sign the 5 August 2009 letter.
His Honour made the orders set out earlier in these reasons. In substance, he found that Mr Boyd took unconscientious advantage of Mrs McAuley's position of special disadvantage that was due to her advanced age and cognitive impairment, and that he breached his fiduciary duty by acting in his own interests in the way in which he deployed the power of attorney.
There was no appeal from those orders.
Nor was any timely application made to set aside the orders on the ground now alleged, namely, that the orders were procured by fraud.

[7]

Amended Statement of Claim in these proceedings

The amended statement of claim extends to some 272 paragraphs. Barely a paragraph is free of hyperbole. It does not plead material facts. The nature of the pleading can be judged from the first three paragraphs: "1. Catherine Margaret Thorn in collusion with other parties conspired to obtain judgment and orders by fraud with the intention of acquiring property by deception for her own financial benefit. Crimes Act 1900 - Section 192E(1)(a)(b) 2. Catherine Thorn instigated an extensive campaign of elder abuse, deception, coercion, breach of fiduciary duty, false statements, unconscionable conduct, undue influence, breach of confidentiality and privacy, abuse of government authorities and abuse of the District and Supreme Courts of NSW (assisted by her husband and solicitors). 3. The scope of the allegations being directly proportionate to the extensive 7 year campaign of pre-meditated fraud for the purpose of obtaining property, a campaign which continues to this day despite the Defendant having already lost more on legal costs than the amount fraudulently sought through my property indicative of a malicious motive."
The relief sought in the amended statement of claim is as follows: "(1) A declaration that the Defendant entered into equity with 'unclean hands'. (2) A declaration that the Defendant obtained Judgment and Orders by fraud in the Equity Division of the Supreme Court of New South Wales, case number 2011/00091377, which granted the Defendant benefits to the financial disadvantage of the Plaintiff. Crimes Act 1900 Section 192E(1)(a)(b) (3) An order - based on the unconscionable conduct of the Defendant, the tainted Equity proceedings and the resultant unjust outcome - setting aside the Judgment delivered by Robb J on 25 August 2014. (4) A declaration that no Originating Process was ever filed in the NSW Supreme Court Registry or any other Registry for these proceedings - case number 2011/00091377. (5) An order - based on the absence of an Originating Process (Statement of Claim) filed anywhere in the NSW Court Registry for proceedings 2011/00091377 - invalidating and setting aside the Judgment delivered by Robb J on 25 August 2014. (6) A declaration that the Defendant defrauded the Probate Division of the Supreme Court of New South Wales, case number 2013/00061668. (7) A declaration that the Defendant misappropriated Estate moneys. (8) An order - based on the unconscionable conduct of the Executor - the tainted Probate proceedings and resultant unjust outcome - setting aside the Grant of Probate and the role of the Defendant as Executor."

[8]

Absence of Originating Process

It is convenient first to deal with the claims in paras (4) and (5) set out above. These are elaborated upon at paras 201 to 267 of the pleading. In substance, Mr Boyd complains that no amended statement of claim was filed in proceedings 2011/91377. He says the Court was deceived into making orders for the substitution of Mrs Thorn as plaintiff after Mrs McAuley's death.
The proceedings had been commenced by the NSW Trustee and Guardian as Mrs McAuley's tutor in the District Court. The NSW Trustee and Guardian had been appointed as financial manager of her estate by orders of the Guardianship Tribunal in 2009. That relationship came to an end on her death.
Mr Boyd filed an amended defence to the amended statement of claim in the 2011 proceeding. He says that, nonetheless that his defence was "invalid" as there was no claim to defend. This contention is elaborated upon with numerous unparticularised allegations of fraud, coercion, breach of duty by solicitors and the like.
The facts in relation to this contention are straightforward. Mr Paterson, who acts now for Mrs Thorn, had acted for the NSW Trustee and Guardian. On 21 September 2012, whilst Mrs McAuley was still alive, he filed a summons in this Court (proceeding 2012/294632) in which he sought an order that proceeding 2011/91377 in the District Court be transferred to this Court. On 10 October 2012, Sackar J ordered that the proceeding be transferred to this Court and "that the plaintiff has leave to file an amended statement of claim herein".
On 11 October 2012, the amended statement of claim was filed in the registry of this Court in proceeding number 2012/00294632. That the amended statement of claim was filed in the Court is apparent both from the fact that it appears on the court file of that number and JusticeLink records the filing of what is called a "miscellaneous document", and when that link is clicked on, it records that the type of document that was filed so described was "Amednde [sic] Statement of Claim". That statement of claim was filed pursuant to the leave given by Sackar J the previous day. But the statement of claim should have been filed in the 2011 proceeding that had been ordered to be transferred to the Court, although it may be that the physical file had not actually been transferred by the time the pleading was filed. Be that as it may, the file number on the amended statement of claim was thereafter changed by hand to record the proceeding in which it was filed as 2011/91377.
On 30 August 2013, Mr Boyd filed, in the 2011 proceeding, an amended defence to that amended statement of claim. The amended statement of claim, as filed on 11 October 2012 was included in the court book that was before Robb J at the hearing in 2014. It is clear that the parties litigated on the basis of that pleading.
After Mrs McAuley's death, Mr Paterson filed a notice of motion on behalf of Mrs Thorn on which she sought to be substituted as the plaintiff in the action. The application was brought pursuant to UCPR r 6.30 that provides that proceedings do not abate as a result of a party's death if a cause of action in the proceeding survives, and that if a cause of action survives the Court may make such orders as it thinks fit for the joinder, removal or re-arrangement of parties. There is no question but that the cause of action that Mrs McAuley, through her tutor, had alleged was one that survived her death. Mrs Thorn, as executrix, was the appropriate person to be appointed as plaintiff in substitution.
As I understand the allegations in the amended statement of claim filed in this proceeding, it is that because no amended statement of claim had been filed in proceeding 2011/91377 it was not competent for the Court to make an order for the appointment of Mrs Thorn as plaintiff and that Kunc J, who dealt with the application for substitution (Betty McAuley by her Tutor the NSW Trustee & Guardian v Ian Geoffrey Boyd (Kunc J, Supreme Court of NSW, 22 May 2013) was deceived by what I think is said to be a fraudulent alteration of court records by the change of the file number on the copy of the amended statement of claim.
There is nothing in those allegations. It would have made no difference if the same pleading had been filed for a second time, this time given the number 2011/91377. Rather, the parties sensibly proceeded on the basis that the amended statement of claim had been properly filed, as I think it had been.

[9]

Mr Boyd's affidavit of 21 May 2013 opposing application for substitution of plaintiff

Mr Boyd was not present when the notice of motion for substitution of Mrs Thorn was listed for hearing, which was on 22 May 2012. As I have said, he is a commercial pilot by occupation. He was overseas. He sent an email to the Court attaching a 21 page affidavit in opposition to the application. That affidavit makes the same types of allegations, in the same way, as is now made in the amended statement of claim. Amongst other things, he alleged that Mrs Thorn had embarked on a campaign to prevent the gift from being transferred and having failed in this she recruited the Guardianship Tribunal by submitting offensive allegations to it in what was said to be "a provable false and misleading application".
Mr Boyd said that he had submitted extensive correspondence to the Guardianship Tribunal, and later the NSW Trustee and Guardian, including details of Mrs Thorn's own acceptance of a gift from Mrs McAuley and her adoption of a false identity as Betty's "daughter" and "next of kin". He said that she had falsely so described herself to firms, and organisation officials and organisations, and listed various people or organisations before whom such statements of false identity had been made. He argued various matters about circumstances leading up to the gift of $260,000 which were later dealt with by Robb J.
In his affidavit of 21 May 2012, Mr Boyd said that Mrs Thorn had lodged a false and misleading application with the Guardianship Tribunal and said that the application was supported by accompanying file notes which were false. He said that there was no medical evidence to support the alleged dementia, Mrs McAuley continued to live alone and independently without formal assistance, and accused Ms Thorburn of adopting a dual role of acting during Mrs McAuley's life as solicitor for both Mrs McAuley and Mrs Thorn.
He complained of a lack of procedural fairness before the Guardianship Tribunal, and in relation to that matter he said: "To leave no doubt about the credibility of my objections, I refer to extensive and most self-incriminating evidence that Thorn submitted to the Guardianship Tribunal with her questionable application. The Guardianship Tribunal accepted and stamped these file notes which became part of the document package. As a brief aside, I did not receive the document package relating to the hearing until after the hearing was concluded...After the hearing was over, I was handed the package of documents which included Thorn's full application, her file notes, file notes from her sisters, and various medical reports all referring to Thorn as Betty's daughter and/or next of kin and one clearly marked 'not to be duplicated or used for medicolegal purposes'."
He also said: "111. I appeal to the Court for the sensibility and fairness that has been absent in this vexatious matter since 30 July 2009 when Betty made half of her gift to me. N.B. Thorn by her own admission has already successfully stopped half of Betty's gift to me which Thorn benefitted from in her inheritance of Betty's assets. 112. The amount in question is $260,000 that Betty insisted I use towards paying off the mortgage on my family home (a home that provided support to three out of Betty's five remaining blood relatives). I withdrew my lifetime superannuation savings to add to Betty's gift and repaid my family home."
These same matters are raised in the 2016 proceedings commenced by Mr Boyd.
In Mr Boyd's affidavit of 21 May 2012, he said that, days after becoming aware of Mrs McAuley's gift to him, Mrs Thorn immediately embarked on a campaign to prevent the gift and transfer, after failing in this recruitment in the Guardianship Tribunal, by submitting her "offensive allegations about me in a provable false and misleading application".

[10]

Amended Statement of Claim: evidence allegedly suppressed

In para 4 of the amended statement of claim, it is alleged that, at the trial, counsel for the plaintiff unjustly prevented Mr Boyd from presenting to the Court facts and evidence proving the claim and the proceedings having been brought by fraud. The basis for that allegation appears to be in the paragraphs which follow, in which he pleads that Mrs Thorn's own file notes, those of her husband and those of her solicitor Ms Thorburn that were created between July and October 2009 are evidence that such a fraud existed. He alleged that he advised the Court in April 2014 that a former solicitor of his was claiming a lien over his documents, but that Mr Paterson offered to provide him with copies of documents if he sent a list. He pleads that he sent a list; that he received a court book only shortly before the trial commenced. He pleads that: "The file notes of Catherine Thorn, Robert Thorn and their solicitor Marion Thorburn contain numerous incidents of their dishonest activities including false allegations, coercion and elder abuse of Betty along with careless contradictions between their individual documents."
He pleads that Catherine Thorn fraudulently concealed the file notes from the Supreme Court by detaching them from the court book. And he pleads that, in a letter of 21 May 2014, Mr Paterson had admitted that not all file notes of the plaintiff and her family were included in the court book and this was an oversight, and alleges that "[t]o this day the concealed file notes are vital to prove the unconscionable conduct and/or fraudulent activities of the Defendant" et cetera.
What are these concealed file notes?
In paragraphs 52 and 53 of the pleading, Mr Thorburn refers to a file note of Robert Thorn dated 7 August 2009 stating "Marion advised us to bring Betty into see her today" and to Ms Thorburn's file note of the same day in which she is alleged to have falsely stated "Betty brought forward her 10 August appointment with the writer to Friday the 7 August 2009…….". Robert Thorn's file note is said to be an admission that Ms Thorburn advised him and Mrs Thorn to coerce Mrs McAuley back to her office after she had engaged new independent solicitors two days earlier. This was said to be evidence of serious financial abuse of an elderly client for the financial benefit of another client.
There is, of course, no inconsistency between the two file notes. One would infer, simply from the file notes themselves, that Ms Thorburn advised Mr Thorn to bring Mrs McAuley into her office that day and that Mrs McAuley accepted that advice, conveyed to her by Mr Thorn, and brought forward her appointment.
In any event, it is clear that all of the file notes which are the subject of the allegations of fraud and coercion were available to Mr Boyd before the conclusion of the hearing before Robb J. Mr Paterson has identified documents referred to in the amended statement of claim and has prepared a table in which he identifies whether the file note in question was either tendered into evidence, as many of them were, or, if not tendered into evidence, had been provided to Mr Boyd. That table is as follows: Paragraph of Mr Boyd's amended statement of claim Document Exhibit number or other reference 9-11 File notes of Catherine Thorn, Robert Thorn and Marion Thorburn which were originally attached as annexures to Mrs Thorn's application to the Guardianship Tribunal dated 11 August 2009. Provided to Mr Boyd at his request on 15 April 2014. The file notes that were among the annexures were tendered as Exhibits 2, 3, and 7. The other annexures were tendered as Exhibits 4, 5 and 6. 52 File not of Robert Thorn dated 7 August 2009 Ex 2, page 4 53, 60 File notes of Marion Thorburn dated 7 August 2009 Ex A, p256A - G. (At paragraph 60, extracts are at page 256C) 53 File note of Marion Thorburn dated 10 August 2009 There is no such file note. The text to which Mr Boyd refers appears at Ex A, p256B 62 Extract from file note of Marion Thorburn dated 7 August 2009 Ex A, p256D 64 Extract from file note of Marion Thorburn dated 7 August 2009 Ex A, p256F 66 Extract from file note of Marion Thorburn dated 7 August 2009 Ex A, p256F 74 Catherine Thorn's application to the NSW Guardianship Tribunal dated 11 August 2009 Not in evidence, but provided to Mr Boyd at his request on 15 April 2014 and not sought to be tendered by Mr Boyd. 80 Extract from file note of Marion Thorburn dated 7 August 2009 Extracted at page 51 of Mr Boyd's final submissions, emailed to the Associate to Robb J on 25 June 2014 by counsel for Mrs Thorn. 85 Reasons of Guardianship Tribunal in rejecting Catherine Thorn as financial manager dated 26 November 2009 Ex C 86 File note of Catherine Thorn dated 12 August 2009 Ex 7, second page 94 File note of Robert Thorn dated 18 August 2009 Page 2 of Ex 3 95 File note of Robert Thorn dated 19 August 2009 Page 2 of Ex 3 97 Diary note of Catherine Thorn dated 19 August 2009 Page 4 of Ex 7 128 File note of Catherine Thorn dated 12 August 2009 Attached at page 42 of Mr Boyd's final submissions, emailed to the Associate to Robb J on 25 June 2014 by counsel for Mrs Thorn 129 Mrs McAuley's personal cheque Not in evidence Mrs mcAuley's letter witnessed by her new solicitor Not in evidence Catherine Thorn's file notes As above Marion Thorburn's file note of 7 August 2009 Ex A, p256A-G Medical report by Dr Shoba Iyer, specialist geriatrician Not in evidence, but at page 172 Court book 144, 146 Medical report by Dr Shoba Iyer, specialist geriatrician Not in evidence, but at page 172 Court book 160 Letter from Mrs Thorn to the Guardianship Tribunal in October 2009 Not in evidence ACAT report dated 23 July 2009 Ex A, p188

[14]

Mrs McAuley's capacity

The amended statement of claim alleges that seven days before the disputed gift was transacted Mrs McAuley had been assessed by Dr Low, a specialist geriatrician, who confirmed that Mrs McAuley had normal capacity, and could continue living alone and independently without assistance (statement of claim para 23). The statement of claim goes on to plead that: "29. On 23 July 2009, seven days before the disputed gift was transacted, Betty was assessed in her home by a Specialist geriatrician, Dr. Loh, from the Royal Prince Alfred Hospital, Camperdown. Catherine Thorn attended the assessment with her husband, again falsely purporting to be Betty's 'daughter'. The Geriatrician confirmed that Betty had normal capacity and could continue living alone and independently without assistance. 30. Despite this formal evidence of Betty's full capacity, Thorn and Thorburn maintained their false allegations that Betty had 'dementia' to Betty's banks, her doctor, the NSW Guardianship Tribunal, NSW Trustee and Guardian, NSW District Court and eventually the Equity Division of the Supreme Court. 31. No greater evidence of fraud exists than Thorburn falsely alleging her own client had 'dementia' and causing that client to be wrongfully managed by the NSW Trustee and Guardian for the financial advantage of another (favoured) client." (emphasis in original)
No such allegation was put to Ms Thorburn at the hearing before Robb J. The medical evidence alleged in paragraph 29 quoted above was quoted in Robb J's reasons for judgment at [29]. His Honour observed that Dr Loh's attendance was as part of an ACAT assessment and the purpose of that assessment is more concerned to determine the subject's capacity to live independently than it is to assess the subject's capacity to manage her financial affairs. His Honour went on to find, on the basis of medical evidence that was before him, that Mrs McAuley did suffer a cognitive impairment that prevented her making sound independent judgments concerning the prudence of any major financial transaction, and in particular the making of a gift of substantially all of her cash investments (para [132]).

[21]

Challenge to grant of probate

The statement of claim also seeks a declaration that "the defendant defrauded the Probate Division of the Supreme Court case number 2013/00061668"; and a declaration that "the defendant misappropriated estate moneys"; and it seeks an order setting aside the grant of probate and "setting aside the role of the defendant as executor". Apparently that is an application for an order for removal of Mrs Thorn as executor.
Mr Boyd has no standing to make that application. He is not entitled to any part of the estate. He does not impugn the validity of the will. Even if he did, he would not be entitled to any part of Mrs McAuley's estate otherwise than on an intestacy and to establish an intestacy he would need to set aside her previous wills.
The ground for setting aside the grant of probate is, apparently, matters alleged in paragraphs 134 to 142 under the heading "Probate Fraud". It is there alleged that in 2000 one of Mrs McAuley's investment properties was transferred after Mr McAuley's death to Catherine and Robert Thorn for a price well below market price and with a mortgage back to secure payment of the price. It is alleged that Mr and Mrs Thorn have not discharged that mortgage; and that on the application for probate Mrs Thorn: "a) Failed to declare Betty's Maroochydore property; b) Failed to declare the mortgage back to Betty; c) Failed to declare the loan repayments; d) Failed to declare the remaining debt the Thorns owed to the Estate; and e) Understated the value of Betty's Camperdown property by $575,000." Between 5 and 10 minutes (emphasis in original) It is said that these allegations make Mrs Thorn an unsuitable person to act as executor.
Mr Boyd had made complaints in relation to these matters in his affidavit of 21 May 2013. He there said that if Mrs Thorn did accept a gift of the Maroochydore apartment ahead of her three older sisters and had enjoyed lucrative rental income from the property thereafter that would demonstrate an irrational belief that she was entitled to receive a lucrative gift of property from her father whilst Mr Boyd, as Mrs McAuley's next of kin, was ineligible. He complained that "Thorn pushed the will through probate without my knowledge" (paragraph 71). He complained (at paragraphs 96-97) that: "In Thorn's inventory of assets … Thorn fails to mention the Maroochydore apartment as part of Betty's estate. However, in her previous application to the Guardianship Tribunal she nominates that Betty received monthly rental income from an undisclosed source. If Thorn does own this apartment as gifted by her father, her claim against me is absurd."
Apart from the non sequitur of the last proposition, it is noteworthy that these matters had been raised by Mr Boyd when Mrs Thorn's proceeding was still pending. Again, it does not relate to any new matter discovered since either the hearing before Robb J or, it would seem, the grant of probate.
Be that as it may, for the reasons I have given, Mr Boyd does not have standing to challenge the grant of probate.

At a glance

Court

Decision date

Before

Source

Judgment (23 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (7)

Cited By (2)