Idoport Pty Ltd v National Australia Bank Ltd

Representation for the Next of Kin

1. As a result of the plaintiff's further investigations into the next of kin of the deceased the Court has decided to appoint a person to represent the class of next of kin. A brief summary of those investigations and the reasons for the appointment of the representative are dealt with in this section.
2. The issue left open by the first judgment, whether the deceased was domiciled in Queensland or New South Wales, should be decided in a way that avoids multiplicity of proceedings. To that end, after the first judgment Mr Meek SC for the plaintiff first contemplated that the plaintiff might use the useful procedure available under Trustee Act 1925, s 63(8) to ensure that the Court's judicial advice to the plaintiff on that question was binding on the next of kin. He first proposed serving notice of these judicial advice proceedings under s 63(8) upon the personal representatives of all the deceased's next of kin who could be found.
3. The plaintiff ultimately proceeded under Uniform Civil Procedure Rules ("UCPR"), rr 7.6 and 7.7 rather than Trustee Act, s 63(8). UCPR, r 7.6 provides that in proceedings concerning the administration of a deceased person's estate, where a class of persons may be interested in or affected by the proceedings, the Court may appoint one or more of the persons to represent the class, in circumstances where a member of the class cannot be ascertained, or found, or it is otherwise expedient to appoint a representative of the class. Rule 7.7 provides that where an order appointing a party to represent a number of persons in proceedings is made under r 7.6, a judgment or order made in those proceedings binds all such persons, as if they had been parties to the proceedings.
4. The Court's orders below appoint Lucille McCullagh under UCPR, r 7.6 to represent the class of persons who are or might be entitled to the estate of the deceased on intestacy in the event that the deceased was domiciled in Queensland as at the date of her death. The Court is satisfied that members of the class cannot be ascertained or found and is also satisfied that it is otherwise expedient to appoint Ms McCullagh to represent the class.
5. The Court's first judgment made a preliminary identification of the next of kin of the deceased who appeared to have survived her in 1982. These next of kin were Noel Vincent Dempsey, Beryl Thelma Dempsey, Edna Kathleen Dempsey and Louisa Regina Dempsey. Their respective relationships to the deceased are outlined in the first judgment: at [86] - [92]. Mr Basha at Bartier Perry has undertaken further searches in respect of each of them. These further searches, as recounted in his affidavit, are detailed in summary below.
6. Noel Vincent Dempsey died on 30 May 2001. He was survived by his daughter Merril Molloy. Contact has been made with her. A grant of probate of his estate was not taken out. Noel's wife, Edna, predeceased him. Merril was entitled to the whole of his estate under his will.
7. Beryl Thelma Irvine (nee Dempsey) died in September 1991, leaving three daughter's Olwyn Connolly, Heather Manifold and Mildred Morris. Beryl's estate was divided among her three daughters. Mildred died in January this year. Mildred's daughter Lucille McCullagh is now representing her interests and has indicated she is prepared to represent the whole class of potential beneficiaries. Ms Angela Cornford-Smith is the solicitor acting for Olwyn, Lucille and Heather. Ms Cornford-Smith has been corresponding with Mr Basha concerning the interests of that family. A submission has been received from her about the issue of the deceased's domicile. That submission makes clear there is a contest about the issue of the deceased's Australian domicile.
8. Edna Kathleen Wells (nee Dempsey) died in February last year. She had two children, a daughter, Doreen and a son, Frederick. Doreen died about 10 years ago. The plaintiff's contact with Frederick indicates he and Doreen were the only two beneficiaries of Edna's will.
9. Finally, Louisa Regina Dempsey was married twice and died in 1998. She was survived by a daughter, whose identity is presently uncertain. She was also survived by a step-daughter Glennis Mackie. Glennis' nephew John Mackie is presently assisting her in relation to this matter.
10. This discussion shows there are still a few gaps in the plaintiff's knowledge in relation to the deceased's next of kin and their current legal personal representatives. These gaps and the work that is needed to fill them are sufficient to demonstrate that it is expedient within UCPR, r 7.6 now to appoint Lucille McCullagh to represent the class of persons who are or might be entitled to the estate of the deceased on intestacy in the event that the deceased was domiciled in Queensland as at the date of her death.

Mediation of the Remaining Issue

1. The question now arises whether the Court should order mediation of the proceedings, before the Court is required to determine the remaining issue of the deceased's Australian domicile.
2. The State is reluctant to be involved in a mediation. Mr Rankins made clear that the State did not actively oppose the Court making an order for mediation. But he submitted that the State was presently hesitant to be involved in a mediation. He explained that the State saw itself as involved only to the extent of taking the intestate share of the estate as bona vacantia, if the deceased were found to be domiciled in the State of New South Wales at her death. He did not envisage the State being able to contribute any evidence or submission about whether the deceased was domiciled in New South Wales or Queensland.
3. But that does not seem to me to be a persuasive reason not to order a mediation. There are many situations in which the Court may order a mediation among parties in trust or estate proceedings, where one of the parties may only take a fund on default of the entitlement of other parties. The State's potential receipt of the intestate share of the deceased's estate as bona vacantia is not dissimilar to such situations.
4. Moreover, mediation may well be more cost efficient in the long run. Even if the State were to be successful on the issue of the deceased's domicile, the Queensland relatives would still have a right under Succession Act, s 137(1)(b) to seek from the State a waiver of the State's Succession Act, s 136 rights in respect of at least a part of the intestate estate of the deceased. A mediation will save the State, on the one hand, the time and cost of further involvement in the proceedings; and on the other hand the need to deal with the s 137(1)(b) procedure.
5. The Court's statutory power to order a mediation in these circumstances lies in Civil Procedure Act 2005, s 26 which provides: "26 Referral by court (1) If it considers the circumstances appropriate, the court may, by order, refer any proceedings before it, or part of any such proceedings, for mediation by a mediator, and may do so either with or without the consent of the parties to the proceedings concerned. (2) The mediation is to be undertaken by a mediator agreed to by the parties or appointed by the court, who may (but need not be) a listed mediator. (2A) Without limiting subsections (1) and (2), the court may refer proceedings or part of proceedings for mediation under the Community Justice Centres Act 1983 . (3) In this section, "listed mediator" means a mediator appointed in accordance with a practice note with respect to the nomination and appointment of persons to be mediators for the purposes of this Part."
6. The Court has broad power to order mediation, and particular circumstances may warrant the exercise of that power despite the opposition of the parties: Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 427.
7. The Court has decided this is an appropriate case for ordering a mediation. Here there has been no prior mediation. The State does not oppose mediation. It has merely expressed doubts about its utility. In my view, this is a case where both the nature of the proceedings and the parties involved and the issues that remain are such that there is a real prospect of a mediated resolution of the proceedings and that such a resolution would be in the best interest of the parties: see New Idafe Incorporated v Barnard [2007] NSWSC 1107 at [17]. Moreover, a negotiated solution is attractive in a case such as this where some of the potential beneficiaries are already elderly and a search may have to be undertaken further to ascertain the full class of beneficiaries entitled - it is a matter where early certainty is desirable: Oasis Fund Management Ltd v ABN Amro Bank NV [2009] NSWSC 967.
8. The Court is also mindful of the dictates of Civil Procedure Act, ss 56 and 61 in making these orders. The orders for mediation which are being made are confined in time and require the mediation to take place before 2 March 2017. Moreover, if the mediation is unsuccessful the Court can proceed to give judgment on the issue of domicile. But a successful mediation will also save the Court's scarce time and resources on that issue.
9. The Court has adjourned the proceedings to 2 March 2017. On that date, the Court can either record any consent orders resulting from a successful mediation or deal with any outstanding other issues for judicial advice.
10. One incidental matter may require attention in the course of preparation for the mediation. As the plaintiff has moved from a Trustee Act, s 63(8) approach to using UCPR, r 7.6 in relation to binding the next of kin, parties will need to ensure that to serve the objective of avoiding multiplicity of proceedings the State will also be bound by the Court's determination or a mediated outcome.
11. The result of the mediation need not involve the Court coming to any view about the question of whether the deceased was domiciled in Queensland or New South Wales. Rather, the resultant question to the Court need only be whether the plaintiff would be justified in distributing the estate in a particular way in light of the evidence and submissions of the parties in relation to the issues of the deceased's domicile.

Conclusions and Orders

1. The Court therefore made on 2 December 2016 the following notations, orders and directions: The Court Notes that: 1. In the event that the late Evelyn Mary Dempsey ("the deceased") was domiciled in New South Wales as at the date of her death the one-half of the deceased's residuary estate which is subject to the partial intestacy passes to the New South Wales Crown as bona vacantia. 2. The State of New South Wales has filed a submitting appearance dated 17 November 2016. The Court Orders that: 1. Being satisfied that there is a class of persons who are or might be entitled to the estate of the deceased on intestacy in the event that the deceased was domiciled in Queensland as at the date of her death, and the identity and whereabouts of such persons (hereafter referred to as "Represented Members"): 1. has in part been ascertained to the extent identified in the affidavit of Gerard John Basha sworn 20 October 2016; and 2. in part cannot be ascertained without difficulty and expense. 1. And that is expedient, for a representative to be appointed to represent them in the proceedings, pursuant to r 7.6 Uniform Civil Procedure Rules 2005 (NSW) that Lucille McCullagh ("the Representative Defendant") be appointed to represent the interests of the Represented Members. 2. The Representative Defendant's reasonable costs are to be paid out of the deceased's one half share of the residuary estate, the subject of the partial intestacy, subject to any further order of the Court. 3. The proceedings not be settled, or discontinued, without the leave of the Court. 4. The Court notes that: 5. The Representative Defendant has in relation to the issue of whether the deceased was domiciled in New South Wales or Queensland filed submissions which were provided to the Court on 10 August 2016 and evidence which has been marked as Exhibit H in the proceedings. 6. The parties request the Court to make a determination in relation to the issue of the deceased's domicile as between New South Wales or Queensland. 7. The Court reserves judgment on the question of whether a mediation should be ordered in these proceedings before the Court makes determination in Order 7. 8. Adjourn these proceedings for further directions at 9.30am, 2 March 2017.
2. The Court therefore makes the following orders, on 6 December 2016: 1. Order under Civil Procedure Act 2005, s 26 that the question of what persons are entitled to the deceased's intestate estate depending upon whether she is domiciled in Queensland or New South Wales be referred to mediation, which mediation should take place between the plaintiff, the State of New South Wales and Lucille McCullagh as representing the class of relatives of the deceased who may be entitled to her intestate estate, were the deceased to be found domiciled in Queensland as at the date of her death. 2. Order that said mediation take place before 2 March 2017. 3. Order that the reasonable costs and expenses of all parties involved in the mediation, and the costs of engaging a private mediator if required, shall be borne out of the intestate share of the estate of the deceased.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 December 2016