SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

[2017] ACTSC 154

SUCCESSION - Executors and Administrators - Proceedings against executors - Application for leave to file Amended Originating Application - Court Procedure Rules 2006 (ACT) - reasonably arguable - delay - bona fide purchaser at market value - amendment to challenge validity of transfer of property refused - alternate claim seeking payment of consideration refused - limitation period passed - leave granted to file Amended Originating Application with limited amendments - costs order.

Administration and Probate Act 1929 (ACT) s 57

Court Procedures Rules 2006 (ACT) rr 407, 502

Family Provision Act 1969 (ACT) ss 7, 8

Land Titles Act 1925 (ACT) s 58

Kaye v Woods and John James Memorial Foundation Ltd [2014] ACTSC 84

Mark Edwards Southwell As Executor of the Estate of Shirley Southwell (First Defendant)

Kerry Anne Staite as Executor of the Estate of Shirley Southwell (Second Defendant)

Symons Phillips Lawyers (First and Second Defendants)

1. This is an application on behalf of the plaintiff for leave to file an Amended Originating Application in these proceedings. In my opinion, leave should be granted with regard to some amendments only.

2. These proceedings were commenced on 20 October 2016. The Originating Application filed on that date sought:

(a) an order pursuant to s 8 of the Family Provision Act 1969 (ACT) (the FPA) that the time for commencement of the claim be extended up to and including the date of filing the Originating Application; and

(b) an order pursuant to s 7 of the FPA that provision be made for the plaintiff's maintenance from the estate "and/or notional estate" of Shirley Southwell, who died on 8 June 2014.

3. The draft Amended Originating Application which the plaintiff now proposes to file seeks the following orders:

(a) an order that the will executed by the deceased and dated 5 December 2008 be administered by the defendants according to the terms thereof pursuant to s 57 of the Administration and Probate Act 1929 (ACT);

(b) an order that the signed document titled "Acknowledgment of Acceptance of Terms of Offer" be set aside;

(c) an order that the transfer of property registered on 22 September 1999 be set aside or, in the alternative, an order that the defendants "specifically perform the transfer" by payment of the consideration of $42,500.00 recorded on the transfer;

(d) in the alternative to order (c) above:

• (i) an order pursuant to s 8 of the FPA that the time in which to commence this claim be extended up to and including the date of filing this application;
• (ii) an order pursuant to s 7 of the FPA that provision be made for the plaintiff's maintenance out of the estate of the deceased; and
• (iii) an order that the proceeds of the sale of the Kambah property be held in an interest bearing account with the defendants' lawyers until further order of this Court.

4. The plaintiff is the daughter of the deceased. The defendants are her siblings who were appointed executors of the will of the deceased. Probate of the deceased's will was granted on 25 September 2014. The estate of the deceased was modest, comprising mainly, if not entirely, of a house in the Canberra suburb of Kambah, which has subsequently been sold for just over $420,000.00.

5. The plaintiff is 55 years old. She alleges that in 1983 she and the deceased purchased the Kambah property, and they lived together in that property until 1986. From 1986 to 1988 the plaintiff says that she resided in Queensland with her then partner. She says that she returned to the Kambah property in 1988 and continued to reside there with the deceased until she died in 2014. Thereafter, the plaintiff continued to reside in the property until she left in about April 2016 so that the property could be sold.

6. In 1999 the plaintiff signed a transfer transferring her interest in the Kambah property to the deceased. As I understand it, the deceased thereafter remained sole proprietor of the property until her death. The transfer records the consideration for this transaction as $42,500.00. The plaintiff acknowledges that she signed the transfer, but says that she does not recall seeing the front page of the transfer. She does not appear to go so far as to say that she did not know the nature of the document she was signing. She says that she did not receive the sum of $42,500.00 recorded as the consideration.

7. It is alleged that in February 2016 the plaintiff accepted an offer made by the defendants, agreeing to vacate the Kambah property and to settle any claim on the deceased's estate for a sum of $60,000.00 payable immediately upon vacation of the premises and a further sum of $10,000.00 payable upon settlement of the sale of the property. It is alleged that the plaintiff signed a document titled "Acknowledgment of Acceptance of Terms of Offer" (the Acknowledgment) signifying her acceptance of the offer. The plaintiff denies that the signature on that document is her signature.

8. The matter is complicated somewhat by the fact that the plaintiff became bankrupt on 13 November 2013. She was not discharged from bankruptcy until 4 November 2016. The plaintiff's trustee in bankruptcy is asserting a right to recover the $60,000.00 from the alleged settlement.

9. Notwithstanding the fact that the plaintiff denies that the signature on the Acknowledgment is her signature, she accepts that she was paid the sum of $60,000.00 through the defendants' lawyers. I observe in passing that it is difficult to believe that the defendants' lawyers would have paid to her that sum unless she had signed a document agreeing to the terms of settlement proposed by the defendants and as communicated to the plaintiff in their letter of 23 December 2015. That, however, is a question for resolution at any trial.

10. The significant differences between the case as presently pleaded and that which the plaintiff now seeks to plead are:

(a) the claim seeking to set aside the Acknowledgment; and

(b) the proposed order that the transfer of property registered on 22 September 1999 be set aside.

11. The Court has a discretion to allow amendments to originating process: r 502 Court Procedures Rules 2006 (ACT)(CPR). A party seeking to amend originating process will ordinarily be expected to provide some evidence that the claim it seeks to bring in the amended pleadings is reasonably arguable on the merits: Kaye v Woods and John James Memorial Foundation Ltd [2014] ACTSC 84 per Murrell CJ. It has been said that the bar should not be set too high on what may constitute a case which is reasonably arguable on the merits.

12. While the plaintiff's proposed amendment challenging the validity of the Acknowledgement is supported by weak evidence, it is not so lacking in potential merit that she should be precluded from raising the issue.

13. The proposed amendment seeking to set aside the transfer is in a very different category. By operation of s 58 of the Land Titles Act 1925 (ACT), the changes effected to the interests in that property can only be varied in the case of fraud. An allegation of fraud must be specifically pleaded: r 407 of the CPR. The proposed amended pleading does not specifically allege fraud. In addition, the affidavit evidence cannot, at its highest, support an allegation of fraud.

14. Another factor relevant to determining whether the amendment concerning the transfer should be allowed is delay. The transfer was lodged nearly 18 years ago and the plaintiff has provided no real explanation for her delay in seeking to challenge that transaction.

15. Finally, the Kambah property has been sold to a bona fide purchaser at market value. It would be inappropriate to now allow a claim to be made which could jeopardise the legitimacy of that purchase.

16. For those reasons I refuse to allow the amendment to challenge the validity of the transfer of the property into the name of the deceased. With regard to the alternate claim that the plaintiff seeks payment of the sum of $42,500.00 recorded as the consideration for the transfer, this amendment would be futile as the limitation period for such a claim has passed.

17. The amendment sought by the plaintiff, as a final order, that the proceeds of the sale of the Kambah property be restrained until further order is also futile.

18. The plaintiff will be granted leave to file an Amended Originating Application in accordance with the draft Amended Originating Application, but deleting proposed paragraphs 3 and 6.

19. Unless an application is made for a different costs order within 14 days of the publication of these reasons, I order the plaintiff to pay the defendants' costs of the application to amend.

I certify that the preceding nineteen [19] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Burns.