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[2021] WASCA 88
Court of Appeal (WA)
2021-05-27
Mitchell JA
Original judgment source is linked above.
(1) the K Litopoulos Family Trust (KLFT), of which the first respondent (Indiana Holdings) is trustee; and
(2) the Litopoulos Family Trust (LFT), of which the second respondent (Sounion) is trustee.
Pavlos Litopoulos and Ms Papandreou are directors of Indiana Holdings and Sounion.
(1) a review of a decision of Indiana Holdings to remove her as a general beneficiary and capital beneficiary of the KLFT;
(2) a review of a decision of Sounion to transfer assets of the LFT to the KLFT; and
(3) the appointment of substitute trustees of the KLFT and the LFT.
(1) an order declaring the purported assignment of the debt by Kimon Litopoulos to Pavlos Litopoulos and Ms Papandreou on 7 July 2017 to be void; and
(2) an order that the trustees of the KLFT amend the financial records of the KLFT to record the liability as repayable by the trust to Kimon Litopoulos.
(1) On 21 May 2009, Kimon Litopoulos made a will (which it is said he now lacks the capacity to revoke or alter due to the effects of dementia) which appointed his three children as executors, and bequeathed his property to them in equal shares (Will).
(2) Her claim in the primary proceedings to be restored as a beneficiary of the KLFT.
(3) That she should be appointed as Kimon Litopoulos' litigation guardian or next friend for the purpose of bringing the proceedings on his behalf.
Vicki has no interest in the subject matter of the gift/assignment of [Kimon's] loan account. The loan account is a liability of the KLFT not an asset. To the extent that Vicki is a beneficiary under [Kimon's] will, that does not confer any right or interest in his property to her. A beneficiary under a will of a person still living derives, while the testator remains alive, no legal or equitable right or title from the will. All the beneficiary has is the prospect of acquiring a right or title if the testator dies in the lifetime of the prospective beneficiary without revoking or altering the will. That is to be distinguished from the case of a person who has a contingent interest under the will of a deceased testator.
The arguments put by the [respondents] are unanswerable. At present the [appellant] has no interest at all under the will and it is not open to her to contest a matter essentially on the basis she does have such an interest. To allow that to happen would be to raise a hypothetical matter and that is not an appropriate use of the declaration procedure.
(1) The master erred in finding that Vicki Litopoulos had no interest under the Will of Kimon Litopoulos to seek the declaratory relief claimed.
(2) The master erred by not considering and determining whether Vicki Litopoulos had standing to seek declarations on the bases referred to at [7] (2) and (3) above.
(3) The master erred by failing to give reasons for rejecting the claim for standing on the bases referred to at [7] (2) and (3) above.
(4) The master's decision to refuse the amendment application was unreasonable and plainly unjust.
(1) for a party to demonstrate that the effect of the order will go beyond mere inconvenience and procedural disadvantage to establish 'substantial injustice'; and
(2) to keep a tight rein on interlocutory appeals against the exercise of discretion on a point of practice and procedure.
A 'beneficiary under [a] will derives, while the testator remains alive, no legal or equitable right or title from the will: all the beneficiary has is the prospect of acquiring a right or title if the testator dies in the lifetime of the prospective beneficiary without revoking or altering the will' (Meagher, Heydon and Leeming, Meagher, Gummow and Lehane's Equity: Doctrines & Remedies (4th ed, LexisNexis Butterworths, 2002) at [6‑190]). As was stated In Re Parsons; Stockley v Parsons [1890] UKLawRpCh 101; (1890) 45 Ch D 51, at 55, per Kay J (approved in Ogden Industries Pty Limited v Lucas [1968] UKPCHCA 1; (1968) 118 CLR 32, at 37):
It is indisputable law that no one can have any estate or interest, at law or in equity, contingent or other, in the property of a living person to which he hopes to succeed as heir at law or next of kin of such living person. During the life of such person no one can have more than a spes successionis, an expectation or hope of succeeding to his property.
In my opinion, [the daughter's] contingent defeasible interest, arising after [the deceased's] death in 1967, constituted a sufficient interest to permit her to sue, at that time, for a restoration of the trust property to the rightful owner. In short, I think that a child who would take on an intestacy of a parent has a sufficient interest to attack a conveyance made by the parent at a time when the parent lacked capacity.
...
The result is that if [the daughter] had known about the conveyance of 24 May, 1967, and if she had known that her father was senile and may have lacked capacity, then she could have brought an action to restore the trust property to its rightful owner at least as soon as her father died, in August, 1967, or perhaps as soon as the conveyance was made.
(emphasis added)
(1) there is a challenge to the validity of the Will;
(3) Kimon Litopoulos' liabilities at the date of his death, and the costs involved in the administration of the estate, exceed the value of the assets of the estate (even assuming those assets to include the debt owed by the KLFT);
(4) relief is sought by any party under the Family Provision Act 1972 (WA); and
Appellant's standing to bring proceedings in a representative capacity
(1) applying for a declaration that Kimon Litopoulos is incapable of managing his own affairs and seeking an order of the Supreme Court appointing her to be his next friend; or
(2) seeking a guardianship order from the State Administrative Tribunal under s 43 of the Guardianship and Administration Act 1990 (WA), appointing a plenary guardian(s) or a limited guardian(s) authorised to conduct legal proceedings on behalf of Kimon Litopoulos.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[3] Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14; (2016) 49 WAR 374 [80] - [81]; Wilson v Metaxas [1989] WAR 285, 294.
[4] The State of Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40, 57.
[5] Arvind Pty Ltd v Lamers [2020] WASCA 47 [16] - [17]. See also the summary of general principles in NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2020] WASCA 107 [117] - [118].
[6] As to which, see Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564, 581 - 582; Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421, 437 - 439.
[7] Gouriet v Union of Post Office Workers [1977] UKHL 5; [1978] AC 435, 501; Hordern-Richmond Ltd v Duncan [1947] 1 KB 545, 552 - 553; JN Taylor Holdings Pty Ltd (in liq) v Bond (1993) 59 SASR 432, 436 - 437 and the Canadian decisions in Ewart v Abrahams and Kirby v Grolmus discussed below. See also Croome v Tasmania (1997) 191 CLR 119, 138.
[8] Commissioner of Stamp Duties (Q) v Livingston (1964) 112 CLR 12, 17 - 18, applied in Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306, 312.
[9] Klewer v Official Trustee in Bankruptcy [No 2] [2008] FCA 1788 [50], approved in George v Fletcher (Trustee) [2010] FCAFC 53 [106] and Frigger v Reid [2017] WASC 138 [11] - [12].
[10] Ewart v Abrahams (Unreported, Court of Appeal of British Columbia, Library No CA006742, 20 January 1988), also reported in Ewart v Abrahams (1988) 22 BCLR (2d) 138.
[13] Kirby v Grolmus [2016] ONSC 7426.
[16] See Alexander v Perpetual Trustees WA Ltd [2004] HCA 7; (2004) 216 CLR 109 [55] - [56]; Chahwan v Euphoric Pty Ltd [2009] NSWSC 805 [16] - [17].
[17] Barnes v Addy [1874] UKLawRpCh 20; (1874) LR 9 Ch App 244.
[21] It was not suggested that Kimon Litopoulos otherwise fell within the definition of a 'person under a disability' in O 70 r 1 of the Rules of the Supreme Court 1971 (WA).
[22] See A v City of Swan [No 4] [2009] WASC 155 [30] - [32] and cases there cited.
[23] Annexure VL-03 to the affidavit of Vicki Litopoulos sworn in the primary proceedings on 28 June 2019.
[24] Par 15 of the affidavit of Vicki Litopoulos sworn in the primary proceedings on 26 March 2020.
(1968) 118 CLR 32
(1991) 5 WAR 40
(1993) 59 SASR 432
(1964) 112 CLR 12
(2004) 216 CLR 109
(2016) 49 WAR 374
(1992) 175 CLR 564
(1972) 127 CLR 421
(1997) 191 CLR 119
(1990) 170 CLR 306