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[2021] ACTSC 214
General information, not legal advice.
Supreme Court of the ACT
2021-09-01
Elkaim J
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Source: the ACT Courts (www.courts.act.gov.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: Italiano v McPherson
Citation: [2021] ACTSC 214
Hearing Date: 31 August 2021
Decision Date: 1 September 2021
Before: Elkaim J
Decision: See [20]
Catchwords: CIVIL – Application – Application in Proceedings – Application to join party to proceedings – estate proceedings – application opposed – application granted
Legislation Cited: Court Procedure Rules 2006 (ACT) r 220, 282 Family Provisions Act 1969 (ACT)
Cases Cited: Boldi v Crozier [2015] NSWSC 2155
Parties: Brahma Kumaris Centres for Spiritual Learning (Applicant) Maria Italiano (Plaintiff) Anna McPherson (Defendant)
Representation: Counsel G Foster (Applicant) B Gillies (Plaintiff) A Doig (Defendant)
Solicitors Zali Burrows at Law (Applicant) Symons Phillips Lawyers (Plaintiff) Tu’ulakitau McGuire (Defendant)
File Number: SC 474 of 2020 ELKAIM J:
The applicant is a charitable organisation. I will refer to it as BK. It is a beneficiary under the will of Mr Andrew Italiano.
The substantive proceedings are an application by the plaintiff for orders under the Family Provision Act 1969 (the FPA). The proceedings are due to go to mediation on 3 September 2021, and if not settled, to hearing on 13 September 2021.
The deceased died on 29 October 2019. His will was executed on 29 June 2017. There is a codicil to the will, dated 27 December 2017 in which the defendant is appointed the executor and trustee of the deceased’s estate. Probate of the will was granted on 6 July 2020. There is an Amended Grant of Probate made on 9 February 2021.
The defendant is the sister of the deceased. The plaintiff is the mother of the defendant and of the deceased. The plaintiff is not a beneficiary under the will.
Under the application before me today (filed on 23 August 2021) BK seeks to be joined to the proceedings pursuant to r 220 of the Court Procedures Rules 2006.
The application is supported by two affidavits of Ms Zali Burrows, affirmed on 2 June 2021 and 31 August 2021 respectively. Ms Burrows is the solicitor for the applicant.
The application is opposed by the plaintiff. The defendant submitted to the orders of the court.
Under r 220 the court may order that a person be joined to a proceeding if:
(a) the person ought to have been included as a party; or (b) including the person as a party is necessary to enable the court to adjudicate effectively and completely on all issues in dispute in the proceeding.
Sub-paragraph (b) is most relevant here.
In Boldi v Crozier [2015] NSWSC 2155, Brereton J (as he then was) concisely set out the principles to be applied in an application of this sort:
In proceedings under (NSW) Family Provision Act 1982 – and now (NSW) Succession Act 2006 – the proper defendant is the executor. Courts ordinarily discourage beneficiaries from defending the application [see Re Klease [1972] QWN 44; Vasiljev v Public Trustee [1974] 2 NSWLR 497 at 503]. This is because it is the particular and peculiar duty of the executor to defend the will and, in those circumstances, the intervention of anyone else to uphold it is ordinarily regarded as unnecessary [see Re Burton (deceased) [1958] QWN 27; Re Klease; Will of Lanfear [1940] 57 WN (NSW) 181 at 183]. A practical reason for this approach is to avoid the proliferation of parties and minimise the impact of costs on the estate. Thus, courts not infrequently decline to award costs to any beneficiary who has unnecessarily become a party to the proceedings. 3. Nonetheless, there are circumstances in which a beneficiary will be joined as a defendant. Obvious cases include where the executor is an applicant for family provision and there is no co-executor to defend the application. By analogy, where there may otherwise be conflict between the interests of the beneficiary and the executor – for example, if the executor is a competing beneficiary – separate representation of the beneficiary may be permitted. 4. A number of cases have indicated that a beneficiary will more readily be permitted to intervene where the beneficiary receives very substantial benefits under the will which are liable to be disturbed if a family provision order is made [Will of Lanfear at 183; Frangos v Frangos (Victorian Court of Appeal, 7 July 1995, unreported)].
The plaintiff said that the executor is obliged to protect the position of the beneficiaries. This is the position set out above in Boldi, at [2]. The plaintiff also said that the applicant has been invited to participate in the mediation. BK responded that [4] of Boldi is more applicable especially in the light of the executor being the daughter of the plaintiff.
The plaintiff made two further submissions; firstly the defendant has said she would not agree to any proposed settlement absent the consent of BK, and secondly, that any settlement reached would require the approval of the court. The defendant agreed that its position was as stated by the plaintiff.
As to the second submission, concerning approval by the court, I think the submission is incorrect. The PFA in the ACT has no provision for approval of a settlement by the court. Approval would however be required if one of the beneficiaries was a minor or under a disability. This is pursuant to r 282. I was informed that two of the beneficiaries are minors so that any settlement would require approval although that necessity might be avoided if the settlement does not involve any alteration to their bequests. In addition the bounds for approval would consider the position of the two minors rather than that of BK.
Clearly therefore the possibility of an approval does not provide any ‘safety net’ to BK.
The size of the estate is a little difficult to ascertain but it seems to be about $1.3 million. The applicant is by far the major beneficiary. The bequests to the named beneficiaries, besides the applicant, total $290,000.
Applying the principles in Boldi, and in order to give the mediation its best prospects I think BK should be joined as a party. BK’s share under the will is so dominant that I think it needs to play a significant part in the resolution of the proceedings. This will be best achieved by its participation in the proceedings. It is implicit in what I have said that the mediation on Friday should still proceed. BK complained that it did not have the necessary information to consider its position at the mediation. I am not entirely satisfied that BK has acted with due alacrity in this matter. I note for example that no request has been made of the plaintiff for information.
BK said it would need to issue subpoenas or notices to produce. However I do not see any reason why BK cannot send, by correspondence, letters seeking any further information to the plaintiff and defendant.
As far as the hearing is concerned, I think it should also proceed on 13 September 2021. BK will perhaps say it is not ready, but I can see no reason for it not to be in a position to proceed. I will accordingly make an order that the hearing is not to be vacated other than in exceptional circumstances.
As far as the costs of this application are concerned, although BK has succeeded, I think the appropriate order is that each party pay its own costs. I think the absence of communication with the plaintiff and the lateness of the application justify such an order.
I make the following orders:
(i) BK has leave to file and rely on the affidavit of Ms Zali Burrows affirmed on 31 August 2021.
(ii) Leave is given to BK to be joined as the second defendant pursuant to r 220 of the Court Procedures Rules 2006. (iii) The joinder is made at BK’s own risk as to costs
(iv) Each party is to pay its own costs of the joinder application.
(v) The mediation on 3 September 2021 and the hearing, if necessary, on 13 September 2021 are not to be vacated other than in exceptional circumstances.
I certify that the preceding twenty [20] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Elkaim
Associate:
Date: 1 September 2021
Italiano
McPherson [2021] ACTSC 214