These proceedings concern the wills of the late Doris Hilda Mackin. By her last will and testament she appointed Mr Roger Belmonte as executor. By that will the real estate of the deceased went to a handicapped grandson of the deceased who suffers from a severe disability. Small legacies were left to Kylie Ann Mackin and Daniel Sean Mackin grandchildren of the deceased and to Dawn Karen Belmonte, daughter of the deceased. The will gave nothing to Gary John Mackin, it being declared by the deceased that she had made no provision to him as he "does not rely upon me for emotional or financial support".
Kylie and Daniel brought claims for increased provisions out of the estate, see proceedings 2014/308387 and their proceedings were settled on the 17 November 2014 at a mediation with consequential orders to be made subsequent to that.
On the 17 December 2014 the court made orders by consent, which orders reflected the settlement achieved at the mediation. The settlement terms were signed by the solicitor for Kylie and Daniel and the solicitor for the estate, Mr Brischetto, of the firm Reimer Winter Williamson.
In accordance with the requirements of the Succession Act 2006 (NSW) a notice was sent out by Mr Brischetto to Gary as a potential claimant, who telephoned Mr Brischetto's office and spoke to a Mr Ling, a law clerk. There is no dispute that there was a call and there is no dispute that Mr Mackin informed Mr Ling of the fact that he was considering making a claim and was going to obtain legal advice about the matter.
Gary's version is set out in his affidavit of the 24 July 2015. Mr Ling's version of the conversation is set out in Mr Ling's affidavit of the 16 July 2015. The essential difference between the two versions is that, according to Mr Ling, he said to Mr Mackin, when told that Mr Mackin would be seeking legal advice, "you should do so quickly, as there is going to be a settlement conference at the Supreme Court on the 17 December 2014". Mr Ling's diary note which is attached to his affidavit, see annexure A, does not make any reference to that element of the conversation and nor did a subsequent letter of 22 May 2015: see annexure F to Mr Gary Mackin's affidavit of the 24 July.
Gary did file a summons seeking provision out of the estate on the 11 June 2015 which was three days before the expiry of the relevant period for applications following the testator's death. Those proceedings, 2015/172383 I shall refer to as "Gary's proceedings". Gary's proceedings were therefore brought within time.
Mr Drummond of counsel appears for Gary. Mr George of counsel appears for the executor of the estate Mr Belmonte and Mr Austin of counsel appears for Kylie and Daniel.
The executor seeks relief by way of notice of motion in both the first proceedings and the Gary proceedings. In the Gary proceedings the executor sought to have Gary's claim struck out pursuant to r 12 and r 13.4 of the UCPR. Having heard argument in relation to that matter I indicated to Mr George that I was not persuaded there was any proper basis for such an order and Mr George indicated that he did not require formal reasons to be given for that conclusion.
The second application was one made in the first proceedings which is to have the consent orders made by the court on the 17 December 2014 as between, on the one hand Kylie and Daniel and on the other Mr Belmonte as executor, set aside. Kylie and Daniel resist that application and in relation to it Mr Belmonte filed an affidavit dated 17 July 2015 in which he sets out details in relation to the grandson's problems but also, importantly, in which he states the following:
"10. When I elected to settle these proceedings, I understood the plaintiffs would receive approximately 27% of the Estate. I did not believe their needs were such that they should receive this share of the Estate given what Michael's needs were. However, I did understand that if the proceedings settled, litigation would end, that if the litigation did not end the Estate would have to pay more in legal costs and it was better to distribute the Estate to the plaintiffs than lawyers.
11. Had I known another claim would be brought against the estate, or had I been required to settle 3 claims, I would not have agreed to pay the Legacies from the estate to settle the proceedings and instead, would have instructed my lawyers to have the matter head by the Court and allowed the Court to decide if the plaintiffs' claims had merit and what, if any share of the Estate, they should receive."
Mr George submitted that I should accept that Mr Belmonte, in agreeing to the terms of settlement on the 17 November, was acting in the belief that there would be no further claims against the estate and that he would not have entered into the agreement if he had known that Gary would bring a claim against the estate. Mr George pointed to the fact that the net estate is small, in the order of $370,000, and that the principal beneficiary is the handicapped grandson.
Mr George contends that since Mr Belmonte would not have settled if he had known that Gary would bring a claim there is injustice produced and the Court has power to intervene and should do so. He referred to the New Zealand case of Waitemata City Council v MacKenzie [1988] 2 NZLR 242, a New South Wales case of Lewis v Combell Constructions (1989) 18 NSWLR 528 and another decision of this court in Mohamed v Farah [2004] NSWSC 482 per Barrett J (as his Honour then was).
The case for setting aside the consent orders was advanced on the basis of an inherent power in the court to set aside orders. There was a suggestion in Mr George's written submissions that the case might fall within Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 36.15, but I am not sure that that was persisted with and if it was persisted with I do not accept it, there being no judgment or order entered "irregularly, illegally or against good faith".
Returning then to the question of the inherent power, Mr Austin does not dispute that the court has an inherent power to set aside consent orders, but he submitted that none of the cases to which reference was made by Mr George referred to the case of Harvey v Phillips (1956) 95 CLR 235, a decision by which lower courts in Australia are of course bound. I will return to Harvey in a moment but I would add that Lewis and Mohamed were not cases in which orders had been entered by the court. Waitemata was a case where orders had been entered, but the New Zealand Court of Appeal there held that the court had inherent power to set aside orders obtained without authority or as a result of mistake where the interests of justice required it, but that the application to set aside the order should have been refused by the trial judge because it was appropriate for the loss to fall on the party whose counsel had brought about the state of affairs which had caused the problem, and in Cooke P's view, for the further reason that the plaintiff's counsel had authority to consent to the orders made.
In Harvey at pages 243-244 the Court (Dixon CJ, McTiernan, Williams, Webb and Fullagar JJ) said:
"The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like. The rule appears rather from positive statements of the grounds that suffice (cf Halsbury's Laws of England, Vol 26, 2nd ed, pp 84, 85); but there is a dictum of Lindley LJ which is distinct enough: ". . . nor have I the slightest doubt that a consent order can be impeached, not only on the ground of fraud but upon any grounds which invalidate the agreement it expresses in a more formal way than usual . . . To my mind the only question is whether the agreement on which the consent order was based can be invalidated or not. Of course if that agreement cannot be invalidated the consent order is good": Huddersfield Banking Co Ltd v Henry Lister & Son Ltd (1895) 2 Ch 273, at p 280."
I had reason to consider Harvey in a decision of mine of Bird v Cannington [2012] NSWSC 789 paras 23-25.
Mr Austin also drew attention to the application of Harvey in Chand v Zurich Australia Insurance Limited [2013] NSWSC 102 per Adams J.
It is not suggested that Kylie or Daniel said or did anything to lead to any misapprehension on the part of Mr Belmonte. No basis of the kind identified in Harvey and which would warrant the setting aside of the agreement has been identified. I think that it is sufficient to justify disposal of the application and set aside the consent orders. I would, however, note the following matters which were identified by Mr Austin and which give added support to the conclusion that it is not appropriate to set aside the orders:
1. There is no evidence from Mr Brischetto as to why he executed the consent orders on the 17 November. He was, in so executing the document, acting as agent of the executor and with his authority. Nor does Mr Brischetto give any evidence of what he told Mr Belmonte. Mr Belmonte does not give any evidence as to whether he was told by Mr Brischetto of the response that had been received from Gary or the basis on which he, Mr Brischetto, was instructed to sign the consent orders. It is true that it might be inferred from Mr Belmonte's affidavit that he had not been told that Gary would be bringing a claim, but he does not state so expressly, nor does he state that he did not know that Gary might bring a claim or was seeking advice or what he would have done had he known that fact.
2. The interests of justice require consideration not only of the executor's position but also that of Kylie and Daniel. They have by the settlement agreement which they entered into revealed their hand and would be prejudiced in any further negotiations if the matter had to be relitigated. They would also have to incur further costs which by the agreement they thought they had avoided. There is no evidence that they were informed by their father, Gary, or by Mr Brischetto that Gary had indicated he was seeking advice.
3. There is a public interest long-recognised in the court in respect of the need for finality of litigation, see Smith v New South Wales Bar Association (1992) 176 CLR 256 at 265-267 referred to by Mason CJ in dissent in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 301-303.
4. Mr Austin draws attention also to s 70 of the Succession Act which is in the following terms:
"(1) A family provision order may be varied or revoked by the Court only in accordance with this Chapter.
(2) The Court may, by order, vary or revoke a family provision order so as to allow provision to be made in favour of another eligible person wholly or partly from all or any property affected by the order.
(3) The Court must not vary or revoke a family provision order so as to allow provision to be made in favour of another eligible person unless that person shows sufficient cause for not having applied for a family provision order before the order sought to be varied or revoked was made.
(4) A family provision order is revoked if the grant of administration in respect of the estate of the deceased person is revoked or rescinded, unless the Court otherwise provides when revoking or rescinding the grant."
There are a number of possible outcomes in the Gary proceedings including that Gary may be wholly unsuccessful or successful in retaining only a relatively small amount or that the court might reduce any amount otherwise payable to him by reason of s 72, on the contention of the executor, that he did not bring his proceedings prior to the mediation conference. There are a number of matters involved in that and I do not intend by referring to that argument to express any view as to its weight.
I should mention too that Mr Austin pointed out that the provisions which by the settlement were to have been paid have by consent not been paid in accordance with the orders because his client has accepted that payment to them of the provisions will have to await the outcome of Gary's hearing. They will need to be joined, Mr Austin contends, so that they can seek to resist any reduction of the provision made to them. There was no dispute that his clients would be entitled to be joined, should there be any attempt by the estate, or Gary for that matter, to claw back any of what has been agreed to be paid to Kylie and Daniel.
I am not persuaded, therefore, that the court should set aside the orders made by reason of any unilateral mistake on the part of Mr Belmonte, if in fact he was labouring under a mistake.
Both motions are therefore dismissed.
As to costs, Gary seeks an order that his costs be his costs in the cause which order is not opposed. So far as Mr Austin's costs are concerned they are to be paid out of the estate. Mr Drummond also sought an order that Mr Belmonte's costs should not be paid out of the estate but that is a matter that will need to be considered further at the hearing, or after the conclusion of the hearing.
[2]
Amendments
31 August 2015 - Correction of date in [6]
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Decision last updated: 31 August 2015
Parties
Applicant/Plaintiff:
Gary John Mackin
Respondent/Defendant:
Roger Belmonte as Executor of the Estate of the late Doris Hilda Mackin