DAVIS -v- DAVIS [No 2] [2012] WASC 374 (10 October 2012)

4 By his will, the deceased left the plaintiff and the plaintiff's sister a legacy of $500,000 each. The plaintiff says at the time of his father's death he thought he must have been left something in the will. He asked his mother to show him the will. She refused. She later advised him that he was not mentioned in the will. In about December 2007, he received information from a third party he was left a legacy by his father. He approached his mother. She showed him a copy of the will. She told him there was no money to pay the legacy. The plaintiff has never accepted that position. That led to this litigation.

5 There is no doubt a court has the power to enlarge time of the compliance with the springing order: see FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268. The matters relevant to the question of whether or not time should be extended was set out in the judgment of Newnes J in MTQ Holdings Pty Ltd v Lynch [2007] WASC 49 [51], [54]:

[I]t will generally not be sufficient simply to show that the noncompliance was not intentional and contumelious. The authority of the Court will equally be undermined, and the quality of justice for the innocent party eroded, if the ultimate sanction effected by the operation of a springing order can be avoided by showing that non-compliance with the springing order came about by the same sort of inattention or laxity that caused the order to be made in the first place.

...

The failure to comply with a springing order is an egregious breach. A springing order is intended to be the last opportunity offered to the party to put its case in order. The proper administration of justice, and the quality of justice for the other party, generally requires that it be just that, its last opportunity. That will generally mean that the litigant must bear the consequences of a failure to comply with a springing order, whether the failure was due to the litigant or its solicitor.

6 It was submitted on behalf of the defendant there were four relevant considerations in an application such as this. They were:

(a) the circumstances in which the springing order came to be made;

(b) reason for noncompliance with the springing order;

(c) prejudice to the defaulting party if the time were not extended; and

(d) prejudice to the other party if the time were extended.

7 Of course every case must be considered on its merits. While the four matters referred to above are matters of prime concern, all the surrounding circumstances must be considered. In the end it is a question of what is in the interests of justice. But the use of that rather glib phrase should be seen against the backdrop of what was said by Newnes J about the importance of compliance with court orders.

8 This matter has an unhappy history. The writ was issued on 23 December 2008. To date there have been five versions of the statement of claim the first in May 2009, then 17 February 2010, 25 July 2011, 25 November 2011 and 22 June 2012. Attached to an affidavit of the defendant sworn 23 August 2012 and marked with the letter 'H' is a copy of what the plaintiff proposes should stand as the substituted statement of claim. This document represents the sixth attempt to plead a claim against the defendant.

9 During the course of the litigation, costs have been awarded against the plaintiff and in favour of the defendant in an amount of $39,558.12. That does not include the costs of the application that led to the springing order. It also does not include enforcement costs. Of the amount of costs awarded against the plaintiff just under $20,000 remains outstanding.

10 For most of the time this action has been on foot the plaintiff has been represented by solicitors. It would appear between about 16 August 2011 and midJune 2012 he acted for himself. So the plaintiff has had the benefit of legal advice.

11 In the circumstances it was not surprising a springing order was made. Any defendant is entitled to expect three and a half years after the litigation was commenced the claim could be properly formulated. After four failed attempts to draft a statement of claim, especially when solicitors were involved for the first three of those attempts, it might be doubted a claim can be framed at all. It is to be remembered what the springing order required was not a perfect or defensible statement of claim but the filing of a minute.

12 In all the circumstances it is difficult to imagine a case where the making of a springing order was more compelling.

13 In his affidavit of 23 August 2012, the plaintiff does not really provide an explanation as to why there was no compliance with the springing order. If I understand his position correctly there are three reasons why he did not comply with the order. The first was ill health. Both he and his wife appear to have been unwell with anxiety and depression from midAugust 2011 onwards. Quite how this ill health impacted upon his ability to comply with the springing order is not clear from the terms of the affidavit. But it can be accepted the plaintiff's health is an issue and has limited his capacity to manage the case.

14 Second, he has not been able to pay his lawyers. The solicitors who issued the proceedings and acted for the plaintiff up until August of 2011, refused to continue because their accounts were not paid. The plaintiff had difficulty finding alternative solicitors. It was not until June 2012 he was able to obtain representation. It is not clear whether, by the time this representation was obtained, it was too late to comply with the springing order. In any event, for present purposes, it can be accepted the plaintiff was limited by not having the services of a solicitor during the period he was required to comply with the springing order.

15 Finally, it would appear the plaintiff says he did not understand the nature of the springing order (see par 62 of his affidavit). The terms of the order are clear and are set out in plain English. The plaintiff attended before Acting Master Chapman when the order was made. The plaintiff had been involved with this litigation for three and a half years before the order was made and it is difficult to accept he did not understand its terms.

16 On balance, the plaintiff's reasons for noncompliance with the springing order are thin. Doubtless ill health hampered his efforts and the lack of legal assistance in what is reasonably complex litigation made things difficult. But the nature of the order was clear and the plaintiff should well have understood the urgency of the matter. As I mentioned above he had to lodge a minute of a statement of claim. It did not have to be perfect. Consideration of this factor is only marginally favourable to the plaintiff.

17 There is clearly prejudice to the plaintiff if the time to comply with this order is not extended. As the action will stand struck out, the plaintiff will be liable for all the costs incurred by the defendant above and beyond those already awarded. It is unlikely the plaintiff would be able to commence fresh proceedings unless and until these costs were paid. Furthermore, there is a limitation question. This issue has already been raised by the defendant in relation to claims made to date. But if fresh proceedings are to be issued, almost four years will be added to the time that has elapsed since the grant of probate. Counsel for the plaintiff during the course of his submissions, dismissed any notion of a limitation issue. I am not so sure he is right. In any event, a refusal to extend time may compound any limitation issues the plaintiff faces.

18 More importantly, the plaintiff risks being denied any right to investigate the defendant's conduct as executor of the estate. In answer to that submission, counsel for the defendant maintained there was no prejudice at all he submitted the plaintiff had no case and that was plain from the fact a statement of claim could not be framed. At present, without a statement of claim, it is difficult to see how the plaintiff's complaints give rise to a cause of action. Consideration of the proposed substituted statement of claim does put some meat on the bone.

19 The first eight clauses of the proposed substituted statement of claim identify the parties, plead specific terms of the will, plead the death of the deceased and the granting of the probate to the defendant. Specific reference is made to cl 4.2 of the will which gave a legacy of $75,000 to each of the deceased's two sisters and brother. It is pleaded this legacy was paid while the legacies to the plaintiff and his sister were not paid. I will come back to this issue later in these reasons.

20 Paragraphs 11 through to 18 of the proposed substituted statement of claim, plead the failure of the defendant to advise the plaintiff of the legacy left to him in the will and the fact when he found out about that legacy, there was no money to make the payment. By par 21 of the proposed substituted statement of claim, it is pleaded if there was insufficient money in the estate to pay the plaintiff, the deceased's siblings should not have been paid out their legacy but what was in the estate should have been used to pay the legatees pro rata. Paragraphs 22 to 24 plead certain obligations of the defendant as executor of the will. Paragraphs 26 through to 30 of the proposed substituted statement of claim deal with a failure to pass accounts. In the prayer for relief the plaintiff seeks an order revoking the grant of probate, a grant of probate to the plaintiff, an account by the defendant of her administration of the estate and certain further or other incidental relief.

21 There is no allegation in the proposed substituted statement of claim of fraud. It is not pleaded the defendant was guilty of actual moral turpitude. The way the proposed substituted statement of claim is framed it looks very much as though the plaintiff is seeking to have the defendant account in relation to the estate. It should be remembered this proposed substituted statement of claim was not the subject of detailed submissions by either counsel. But despite putting the question directly to counsel for the plaintiff, I am none the wiser as to why the proper course in this case is not to require the defendant in her capacity as executor to pass accounts. If she refused to do so she could be removed as executor of the estate: see The Estate of Erminia Agnes Rogers v Brian David Rogers [2009] WASC 358.

22 As to the legacies paid to the deceased's siblings, the plaintiff says she paid them out of her own money. She says she used the proceeds of an AMP Insurance Policy. If that is so, and there is nothing to suggest otherwise, she would be entitled to recover what she has paid from the estate. In opposition to this application, the defendant relied upon an affidavit of Matthew John Wilson sworn 19 July 2012. Appearing as annexure MJW6 to that affidavit are what the defendant says are accounts for the estate. Those accounts show the estate owes the defendant an amount of $447,546.73. If the plaintiff wishes to challenge this accounting, there are means apart from this action for doing so.

23 In summary then, it seems to me while there is the risk of the plaintiff suffering some prejudice so far as limitation is concerned if this action remains struck out, he will not be left without a remedy. The prospect of calling the defendant to account for her administration of the estate remains.

24 Finally there is the question of prejudice to the defendant. She has had this action hanging over her for almost four years. She is 61 years of age. She is of limited means and she is being asked to find a considerable sum in legal costs. If she successfully defends any proceedings, there are real doubts as to whether or not she will ever recover any funds. While there is no particular prejudice she suffers in this case such as a witness having disappeared or documents gone missing, she nonetheless suffers a general prejudice as time passes. That factor weighs against the granting of an extension of time.

25 Weighing all matters in the balance, I am not satisfied this is a proper case in which to extend time for compliance with the springing order. This was an appropriate case for the making of a springing order and there can be no complaint after a delay of three and a half years and five failed attempts at a statement of claim about such an order being made. While there is some explanation for noncompliance with the springing order I am not satisfied the reasons are so compelling as to weigh more than marginally in the plaintiff's favour. I am not satisfied the prejudice the plaintiff will suffer is such as to warrant extending time. I accept if time is extended the general prejudice the defendant is suffering will be compounded.

26 In the end it is appropriate to come back to what was said by Newnes J in the MTQ Holdings case which I have quoted above. A springing order is intended to be the last opportunity. The proper administration of justice requires compliance with such an order. In the circumstances of this case the quality of justice for the innocent party would be eroded and the circumstances do not justify such an outcome. The application will be refused. The plaintiff should pay the defendant's costs of the application to be taxed.