GROVE -v- KENWORTHY-GROEN [No 2] [2021] WASC 102 (13 April 2021)

[D]eny paragraph 3.1 of the claim and say that the power to appoint a new or additional trustee may be exercised by a document in writing exercised by the said Margaret Jennifer Grove or the legal personal representative and shall be deemed for all purposes to be effective immediately upon execution (clause 7);

1. By par 4 of the defence, par 4 of the statement of claim is admitted. In the context of this application that plea is of critical importance.
2. By par 8 of the defence, it is pleaded that prior to her death, Margaret appointed William as trustee of the trust pursuant to a written document. It is pleaded that document could, at the time of drafting the defence, could not be located. But it is pleaded nonetheless, William acted as trustee of the trust. It is admitted William did not apply for probate and it is said that was because there were no assets in Margaret's estate.
3. The third defendant filed his defence on 17 August 2020. He too admitted par 4 of the statement of claim. He also referred to the deed appointing William as trustee of the trust. In fact he had the deed and the pleading offers the plaintiff the opportunity to inspect the deed if he wishes to do so. Otherwise, the third defendant's defence effectively mirrors the defence of the first and second defendants.
4. Subsequent to the filing of the third defendant's defence, an issue arose between the parties as to the scope of discovery with particular reference to documents pertaining to the trust. The matter was heard by Smith J and her Honour published reasons on 9 July 2020: Grove v Kenworthy‑Groen [2020] WASC 363. Thereafter, affidavits of discovery were filed by all parties. Andrew's affidavit was sworn 20 October 2020. Appearing as document 2 in pt 1A of the discovery affidavit is 'Margaret Jennifer Grove's signed will' dated 5 February 1975. This is the will referred to in par 4 of the statement of claim and admitted by each of the defendants. On 30 October 2020, the plaintiff filed an amended statement of claim. Added to the amended statement of claim were new paragraphs 3A, 3B and 3C. These paragraphs plead in October 1971, Margaret entered into a partnership with one John Lynn. It is further pleaded in December 1971, Margaret sold her partnership interest to William as trustee of the B E Lynn Trust for the sum of $54,600. The pleas in relation to the non‑appointment of William as trustee of the B E Lynn Trust are abandoned. In other words, John accepted there had been a proper exercise of the power of appointment by Margaret and William was duly appointed as trustee of the B E Lynn Trust. The relief claimed was still the same. John wished to be appointed as administrator of Margaret's estate. The basis upon which he sought that appointment was that the allegedly outstanding debt of $54,600 had not been collected. It must be acknowledged, as was pointed out by counsel for the first and second defendants, the basis upon which John sought to be appointed administrator had significantly changed. But the fact remains he was still seeking to be appointed administrator.
5. It was at this point things changed and changed radically. On 11 November 2020, the third defendant's solicitors wrote to the plaintiff's solicitors. A copy of this letter appears as attachment BT10 to an affidavit of Daniel Tassone sworn 7 December 2020. Relevantly, the letter read as follows:

In the course of drafting my client's defence to the amended statement of claim yesterday afternoon, my client alerted me to the fact that he had come across a file of documents kept by William relating, inter alia, to his dealings with Margaret's estate.

At my request, that file was delivered to me for my inspection earlier this afternoon. Included in it was the original of a handwritten 'will kit' form will dated 8 October 1976 which appears to me to bear Margaret's signature and to have been properly witnessed by B E Lynn and E Lynn (the 1976 will). On its face at least, it therefore appears to be a valid will executed after the 1975 will. I attach a copy of the 1976 will to my covering email.

As you will note, by the 1976 will Margaret expressly revokes all earlier wills and leaves 'all her property whatsoever both real and person to her husband William Grove absolutely'.

1. It did not take John's solicitors long to see the effect of this later will. Once they had satisfied themselves it was in all respects a valid testamentary disposition, they concluded the action as framed could not succeed. They then approached the defendants' solicitors proposing the action be discontinued, the extent costs orders be vacated and there be no order as to costs. That offer was rejected.
2. Simply put, the plaintiff says at all times he acted reasonably. He had no reason to believe the 1975 will was not the last will and testament of Margaret. As soon as he discovered that was not the case, he moved to discontinue the action. He could have taken no steps to ascertain there was a later will ‑ particularly in light of the third defendant's affidavit of discovery. While he would have accepted discontinuance with no order as to costs, given the intransigence of the defendants, he now sought his costs of the action.
3. It was the position of the defendants that the discovery of the 1976 will made no real difference to the plaintiff's position. His case was hopeless from the start. This submission had two aspects. The first related to the plea found in the original statement of claim that William had not been duly appointed as trustee of the B E Lynn Trust. The third defendant's defence put that issue to rest and that fact was recognised by the amended statement of claim. Second, it was said the plaintiff could not have succeeded in establishing there was a debt owed to Margaret's estate in an amount of $54,600 or any other amount. Counsel referred to two documents which on their face suggest no amount was outstanding at the date of Margaret's death. He also referred to the fact that the debt went back to the 1970s and any recovery action would have been statute barred.
4. Dealing with these points in turn, it is true that after the filing of the third defendant's defence, the plaintiff's claim changed significantly. But the plaintiff still maintained he should be appointed administrator of the estate; the relief he sought had not altered. As he was a beneficiary under the 1975 will he still had the opportunity to be appointed as administrator if there was some property in Margaret's estate to which he might be entitled if the estate was properly administered.
5. As to the second matter, it is not possible, or appropriate, to determine whether or not the plaintiff's action, based on the 1975 will, might have succeeded. Interlocutory processes were not complete and it may be the case further documents came to light which bore upon the issue of whether the $54,600 was actually paid. Some investigation of relevant accounts might have been necessary. I certainly could not conclude the plaintiff's claim was doomed to fail. Determining matters of limitation on interlocutory applications is fraught with difficulty. As counsel for the plaintiff pointed out, the $54,600 was payable pursuant to a deed. That would affect the limitation period. It was also not clear if demand had been made. While there were significant obstacles standing in the way of the plaintiff establishing the debt was still extant, the mere fact the issue had been raised and there might have been a debt owing to the estate may have justified the plaintiff being appointed administrator.
6. The root cause of all these problems is the failure of the third defendant to identify the 1976 will as the relevant testamentary document. His solicitor's letter indicates the will was in his possession. He had provided discovery and had made no mention of the 1976 will. In the circumstances, I am satisfied it was the actions of the third defendant which led to these proceedings being initiated and pursued by the plaintiff. If the 1976 will had been brought to the plaintiff's attention, proceedings may not have been issued. That is confirmed by the fact that as soon as the 1976 will was produced the plaintiff took steps to abandon these proceedings.
7. Accordingly, I am satisfied the proper costs order is that:

(2) The third defendant pay the plaintiff's costs of the action, including reserved costs.

1. During the course of the hearing I asked counsel for the first and second defendants whether he sought costs against the third defendant. If he had answered in the affirmative I would have made an order to that effect. But he indicated his instructions were not to seek costs against the third defendant. Accordingly, so far as the first and second defendants are concerned there will be no order as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.