Fitter v Public Trustee & Ors

Supreme Court of NSW|2007-12-13|Before: Palmer J, Lloyd AJ

CITATION : Fitter v Public Trustee & Ors [2007] NSWSC 1487

CATCHWORDS : PRACTICE AND PROCEDURE - SUBMITTING APPEARANCE - Party who files submitting appearance cannot later set aside judgment on ground that it was entered in party's absence unless submitting appearance procured by fraud or other vitiating factor.

LEGISLATION CITED : - Forfeiture Act 1995 (NSW) - s 11 - Uniform Civil Procedure Rules 2005 (NSW) - 6.11, 28.2, 36.16(2)

Kylie Hope Fitter (Plaintiff) Public Trustee (First Defendant) PARTIES : George Sidney Fitter (Second Defendant) (discontinued 13.12.07) Grant Fitter (Third Defendant) (discontinued 13.12.07) Gwendoline Ann Robb (Fourth Defendant)

Ms A.J. Tibbey (Plaintiff) COUNSEL : L.J. Ellison SC (First Defendant) M.W. Young (Fourth Defendant)

SOLICITORS : Peter Baker (Plaintiff) Roberts Mann (First Defendant)

1 The Plaintiff, Ms Fitter, applies for an order setting aside final orders of the Court made on 24 November 2005 which applied the forfeiture rule under s 11 of the Forfeiture Act 1995 (NSW) to her entitlement to claim any benefit in her mother's estate. The application is made under Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") 36.16(2)(b) on the ground that the orders were made in Ms Fitter's absence. 2 On 22 August 2002 Ms Fitter was found not guilty of the murder of her mother by reason of mental illness. The principal participants in the deceased's death were Ms Fitter's father and her brother. They too were found not guilty by reason of mental illness. Ms Fitter was ordered to be detained in a juvenile justice centre until released by due process of law. 3 On 4 August 2003 the Public Trustee obtained letters of administration cta in respect of the deceased's estate. On 30 June 2004 the Public Trustee filed a Summons in proceeding 3717 of 2004, the defendants in those proceedings being Ms Fitter, her father, her brother and Ms Robb, who is the deceased's sister and her beneficiary on intestacy. The Public Trustee's Summons sought a declaration that the involvement of Ms Fitter, her father and her brother in the death of the deceased invoked the forfeiture rule under the Forfeiture Act and it sought directions for the distribution of the intestate estate of the deceased. 4 On 14 June 2005 a solicitor, Mr Baker, filed a Notice of Appearance in the proceedings on behalf of Ms Fitter. On 15 June 2005 Mr Baker attended a call over at which the proceedings were set down for trial on 9 November 2005. On 18 October 2005 Mr Baker served a draft Cross Claim on the Public Trustee in which Ms Fitter sought relief under the Forfeiture Act and also sought leave to bring a Family Provision Act claim against her mother's estate out of time. On 19 October 2005 Ms Fitter swore an affidavit in support of her proposed Cross Claim. 5 On 27 October 2005 Mr Baker advised the solicitor for the Public Trustee that Ms Fitter would not be seeking any relief in the proceedings and that she abandoned any claim that she might have against the deceased's estate. 6 On 7 November 2005 Mr Baker served an Amended Notice of Appearance whereby Ms Fitter submitted to all orders in the proceedings save as to costs. 7 On 9 November 2005 the proceedings came on for final hearing before Lloyd AJ. When the case was called Mr Baker appeared for Ms Fitter and was then excused from further attendance. In the course of the proceedings, but after Mr Baker had left, Counsel raised the question of what direction or orders might be necessary to deal with the proceeds of the deceased's superannuation policy. 8 No relief as to the superannuation policy had been expressly sought by the Public Trustee in its Summons. However, Mr Baker had been in communication with the trustees of the superannuation fund since early 2005. He had been advised by letter dated 4 March 2005 that the trustees of the fund would make no determination as to who should receive the benefits of the superannuation policy until the Court had decided the Public Trustee's application under the Forfeiture Act. 9 On 2 September 2005 Mr Baker made an application on behalf of Ms Fitter to the superannuation fund trustees for a benefit under the deceased's policy. On 13 September 2005 the trustees again advised Mr Baker that a decision on Ms Fitter's application for benefits under the policy could not be made until the Court had decided the Public Trustee's application for orders under the Forfeiture Act. It must have been clear to Mr Baker by the time of the trial before Lloyd AJ that the result of the Public Trustee's application to the Court would probably also determine the fate of Ms Fitter's application to the superannuation fund trustees. 10 Ms Fitter has given evidence that, prior to the commencement of the trial on 9 November 2005, she instructed Mr Baker that she did not want to proceed. She said that her reasons were that she could not face the emotional trauma that the trial would inevitably inflict upon her. However, she said also that she discussed her decision with Mr Baker and she received his advice. She understood that her decision not to participate in the Public Trustee's proceedings would mean that she would probably get nothing from her mother's estate. It was in these circumstances that Mr Baker filed a submitting appearance on Ms Fitter's behalf. 11 After a full hearing of the Public Trustee's proceedings in which the other defendants appeared and participated, Lloyd AJ made the following orders affecting Ms Fitter on 24 November 2005: "(2) An Order that pursuant to s 11 of the Forfeiture Act 1995 the forfeiture rule shall apply with respect to the First, Second and Third Defendants as if the First, Second and Third Defendants had been found guilty of the murder of Fiona Ellen Fitter.

(4) An Order that the First, Second and Third Defendants hold on trust for the Plaintiff as administrator of the estate of the deceased such benefits as they may receive under the deceased's superannuation policy with ING Life Limited (Member No. 36010244).

(5) A Declaration that the Plaintiff will be justified in distributing the whole of the deceased's estate and such moneys as are received pursuant to Orders 3 and 4 herein to the Fourth Defendant." 12 The effect of the orders, together with other orders made, was that the whole of the deceased's estate, including the proceeds of the superannuation policy, went to Ms Robb as the deceased's next of kin. There was no appeal from Lloyds AJ's decision. 13 On 12 July 2007 Ms Fitter, acting again by her solicitor Mr Baker, commenced by Summons the present proceedings. The Summons, as amended by leave granted today, seeks the following orders: "1) An Order setting aside Orders numbered (2) in relation to Kylie Fitter and Orders (4)and (5) of his Honour's Orders of 24 November 2005 in the proceedings number 3717 of 2004 of Justice Lloyd in relation to superannuation.

Leave, pursuant to Section 7(2)(d) of the Forfeiture Act for a late application to be made for an Order pursuant to Section 5 of the Forfeiture Act, 1995 modifying the effect of the Forfeiture Act in relation to Ms Fitter in so far as it relates to entitlement and distribution of the superannuation entitlements of the late Fiona Ellen Fitter.

An Order making provision for the needs of Ms Fitter from the superannuation entitlements of the late Fiona Ellen Fitter.

An Order pursuant to Section 7 of the Family Provision Act 1982 that provision be made for the Plaintiff's maintenance and advancement in life out of the Estate and/or notional Estate of the late Fiona Ellen Fitter." 14 Ms Fitter's application is founded upon UCPR 36.16(2)(b) which provides: "The court may set aside or vary a judgment or order after it has been entered if: … (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order," 15 On 21 August 2007 Ms Robb filed a Notice of Motion seeking an order that the Summons be dismissed summarily. On 22 August 2007 the Public Trustee filed a Notice of Motion seeking the same relief. The Notices of Motion have come on for hearing before me this morning. Mr L.J. Ellison SC appears for the Public Trustee, Mr M.W. Young of Counsel for Ms Robb, and Ms A.J. Tibbey of Counsel for Ms Fitter. 16 At first the matter was argued as a motion for summary dismissal. However, almost at the conclusion of submissions, at Mr Ellison's suggestion the parties agreed that I should hear Ms Fitter's claim for relief in paragraph 1 of the Amended Summons on a final basis. It was agreed that, if Ms Fitter failed to obtain that relief, the rest of the relief claimed in the Amended Summons could not be granted. I proceeded on that basis to hear the claim for relief in paragraph 1 of the Amended Summons as a separate question under UCPR 28.2. 17 Ms Tibbey submits that the Court should exercise the discretion under UCPR 36.16(2)(b) to set aside the relevant orders made on 24 November 2005 for four reasons:

i) the orders were made in the absence of Ms Fitter and her solicitor, thus invoking the jurisdiction of the rule;

ii) the Public Trustee's Summons did not expressly refer to the relief sought in respect of the superannuation policy so that the submitting appearance filed for Ms Fitter cannot be taken to have been a submission to that order or claim for relief;

iii) the order as to the disposition of the superannuation policy proceeds was made without notice to Ms Fitter so that she has been deprived of the opportunity to consider whether she wished to make any submission to the Court concerning such an order;

iv) Lloyd AJ was required by s 11(3) of the Forfeiture Act to have regard to the conduct of Ms Fitter and to the effect of the proposed forfeiture order upon her before making it. Because of Ms Fitter's submitting appearance, the judge had no evidence as to Ms Fitter's mental health and as to her other circumstances so that his decision is of no effect under the Act. 18 The Court's discretion to set aside a final order under UCPR 36.16(2)(b) is founded upon the essential principle of justice that a person who is likely to be affected adversely by the order of the Court must have a right to be heard before the order is made: see e.g. Cameron v Cole (1944) 68 CLR 571; BP Australia Limited v Brown (2003) 58 NSWLR 322. However, a party who has a right to be heard is not obliged to exercise that right. A party may elect not to participate in the proceedings and may elect to abide by whatever order the Court may make save as to costs. UCPR 6.11 provides: Defendant may submit to judgment by notice of appearance (1) A defendant who intends to take no active part in proceedings may include in the defendant's notice of appearance a statement to the effect that the defendant submits to the making of all orders sought and the giving or entry of judgment in respect of all claims made, to which may be added the words ', save as to costs' .

(2) Except by leave of the court, a defendant who has filed a notice of appearance containing a statement referred to in subrule (1) may not file a defence or affidavit or take any other step in the proceedings. 19 Where a defendant files a submitting appearance, that defendant is not thereafter entitled to contest the plaintiff's claim, so that the Court may proceed to judgment against that party in his or her absence and without further notice: see e.g. Trust Company of Australia Limited v Perpetual Trustees (WA) Limited (No 2) (1995) 36 NSWLR 654. 20 The right to be heard and to have notice of proposed orders, which is protected by UCPR 36.16(2)(b), is surrendered once a submitting appearance is filed. A party who has filed a submitting appearance cannot thereafter avail himself or herself of that rule unless that submitting appearance has been procured by fraud or some other vitiating factor. A vitiating factor might be, for example, if a plaintiff amends the claims for relief against a submitting defendant in such a way as to alter substantially the extent or nature of the relief originally sought and does not give notice of that amendment to the submitting defendant. 21 Nothing of that character has happened in the present case. Ms Fitter received legal advice before instructing Mr Baker to submit a submitting appearance on her behalf. She knew that the affect of her submitting appearance would be that she would probably lose any chance of obtaining any benefit from the deceased's estate. Mr Baker certainly knew that the fate of Ms Fitter's application to the superannuation fund trustees would probably depend upon the fate of the Public Trustee's application under the Forfeiture Act. It is a fair assumption that he so advised Ms Fitter. 22 There is no possible suggestion that Mr Baker acted improperly in carrying out Ms Fitter's instruction to file a submitting appearance. There is no possible suggestion that the Public Trustee and Ms Robb acted improperly or inappropriately in conducting the proceedings thereafter on the footing that Ms Fitter had decided not to participate any further and had surrendered all claim she might have to the deceased's estate whether under the Forfeiture Act or under the Family Provision Act. In these circumstances, in my opinion, UCPR 36.16(2)(b) can have no application. 23 Apart from the rules of Court, the Court has a general and inherent jurisdiction, as a superior court of record, to set aside its own orders if they have been procured by denial of justice. In the circumstances of this case, no ground for the exercise of that discretion has been shown. 24 Finally, I do not accept the submission that the decision of Lloyd AJ was invalid because he did not have evidence as to Ms Fitter's position. The judge was obliged to consider in that regard only such evidence as was presented to him. By her submitting appearance Ms Fitter informed the Court that she did not wish to present any evidence. She admitted thereby that the Court was entitled to make an order against her without regard to such evidence as she might have presented if she had chosen. 25 For those reasons I cannot make order 1 in the Amended Summons as sought. 26 The order which I have indicated I will make in respect of paragraph 1 of the Amended Summons has the effect of bringing to an end these proceedings. 27 I have reached the view, notwithstanding the submissions of Mr Young and Mr Ellison, that this is not an appropriate case to award costs against the Plaintiff on the indemnity basis. I order that the Plaintiff pay the Defendants' costs of the Amended Summons on the party/party basis. 28 Ms Tibbey submits that the Plaintiff's costs order in that respect should come out of the deceased's estate. That application is opposed by Mr Young and Mr Ellison. Ms Tibbey submits that at the heart of the Plaintiff's case was an application by her under the Family Provision Act. Ms Tibbey says that that was a substantial and arguable claim and, as is frequently done in cases under the Family Provision Act, an unsuccessful plaintiff's costs can be taken from the deceased's estate. 29 I do not think that it is appropriate in this case to make such an order. The Plaintiff would not have been able to advance her claim under the Family Provision Act unless she had first surmounted the obstacle placed in her path by the orders made under the Forfeiture Act. The difficulty of surmounting those orders was very great and I think that it must reasonably have appeared so to the Plaintiff and her legal advisors. 30 The possibility of the Plaintiff's claim under the Family Provision Act has been brought to an end by her failure at the threshold, namely, her failure to set aside the orders made under the Forfeiture Act. It seems to me that this case differs from the usual case in which the costs of an unsuccessful claimant under the Family Provision Act are ordered to be paid out of that estate. I think the appropriate costs order is simply that the Plaintiff pay the Defendants' costs of the proceedings on the party/party basis. 31 Finally, I should note that the Plaintiff agrees that, in view of the order made in respect of paragraph 1 of the Amended Summons the Plaintiff will not be entitled to any of the other relief sought in the Amended Summons. Accordingly, I make the following orders:

i) order that the Plaintiff's Amended Summons be dismissed;

ii) order that the Plaintiff pay the Defendants' costs of the proceedings on the party/party basis.

iii) order that the First Defendant have its costs otherwise out of the deceased's estate on an indemnity basis;

iv) grant liberty to all parties to apply on three days' notice;

v) direct the Fourth Defendant to notify the Plaintiff's solicitor, Mr Baker, in writing by 20 December 2007 if the Fourth Defendant intends to apply for a personal costs order against him.

oOo -

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