Matouk v Matouk

REASONS FOR Judgment 1In these proceedings the plaintiff, Mrs Nadine Matouk ("Mrs Matouk") claims that her son, Pierre (the second defendant) and her daughter Samia (the first defendant) connived to deprive her of her ownership of a property at Mt Pritchard in which she lives ("the property") and which was at that time registered in her name. She also claims that Pierre obtained access to her credit card and used it to withdraw money for his own benefit and purposes. The proceedings commenced as an application in relation to a caveat lodged by Mrs Matouk. That caveat has been extended by order of the Court on 19 August 2013 until determination of Mrs Matouk's claims or further order of the Court. 2The property was registered in the name of Samia in September 2011. 3The third defendant Mr Steven Stojanovic is a solicitor. Mrs Matouk alleges that Mr Stojanovic acted for Samia in relation to the transfer of the property to her without regard to Mrs Matouk's interest as owner and negligently failed to seek and obtain instructions from Mrs Matouk. 4Pierre died on 28 January 2014. 5On 10 October 2014 a motion filed on 23 July 2014 on behalf of Mrs Matouk came before the Court. Ms P Lane of counsel appeared on behalf of Mrs Matouk. An amended notice of motion was filed on 25 September 2014 but was withdrawn today. There was no appearance by anyone on behalf of the defendants, nor by or on behalf of Ms Azerina Pihura who was served with the notice of motion. 6Samia has previously filed a submitting appearance (30 September 2014). She has also filed an affidavit, dated 26 August 2013. In that affidavit Samia claims that Mrs Matouk told her where documents were located and requested that she take her to a solicitor to make arrangements for Pierre to buy the house in return for a payment by Pierre of $20,000 to each of Samia and Joseph, another sibling. Samia claims that Pierre did pay her and Joseph the $20,000 and that he paid her another $20,000 to reimburse an amount she had lent her mother. Samia annexed a power of attorney from her mother. Samia claims she was present when Mr Stojanovic took instructions from her mother in a café concerning the transfer of the property. She denies her mother's claims that she thought the documents she was signing were concerned with Samia's role as a carer. She says she is unable to remember the exact details of the various conversation she had with her mother. Samia annexes a Deed of Declaration of Trust dated 22 March 2012 whereby she declares that she holds the property on trust for Pierre. Samia in her affidavit says: "As I have no beneficial interest in the property whatsoever, I do not wish to participate in these proceedings. I will submit to whatever orders the Court may make." 7By the motion filed 23 July 2014 Mrs Matouk seeks an order pursuant to order 7.10 of the Uniform Civil Procedure Rules 2005 ("UCPR") that the Court appoint Ms Azerina Pihura as representative of the estate of the late Pierre Matouk, and an order that the proceedings continue with Ms Pihura representing the interests of the second defendant. In the alternative an order was sought "that the proceedings continue against the second defendant without a representative of the estate". In support of the motion Mrs Matouk's affidavit of 13 August 2014 is relied upon together with an affidavit of Ms Cheryl Williams of 20 October 2014. 8The reason for Ms Pihura being named was that, based on her assertions in her conversation with Ms Williams, she had been married to Pierre then had divorced him but had resumed cohabitation with him at the time of his death. Ms Pihura had, in discussions with the solicitor for Mrs Matouk, indicated some possibility that Ms Pihura might represent the estate. That is the reason for the inclusion of the first proposed order in the notice of motion. Ms Pihura's non-attendance and lack of willingness to agree to represent the estate has meant that the plaintiff was left to seek an order of a different kind. I raised with Ms Lane the question of whether anyone had searched to see if probate or letters of administration had been sought by anyone. I also queried whether Ms Lane was aware of any cases in which a person had been appointed to act as representative of an estate against his or her will. 9Ms Lane had drawn my attention to two cases in which a party to proceedings was appointed to represent a trust in proceedings concerning a trust see: Basis Capital Friends Management Ltd v BT Portfolio Services [2008] NSWSC 555; (2008) 60 ACSR 580 and ING Funds v J P Morgan [2009] NSWSC 59; (2009) 69 ACSR 605 [8]-[11]. Ms Lane also drew my attention to a case in which it was held that the NSW Trustee and Guardian ought not be appointed to act as representative of an estate in proceedings in personam when it did not wish to be appointed see: Abu Arab v NSW Trustee and Guardian [2014] NSWSC 954 per Davies J. 10I granted Ms Lane the opportunity to have her solicitor undertake a search to ascertain whether anyone had applied for probate or letters of administration, to ascertain whether Samia was willing to act on behalf of the estate and to see if there were any cases in which a person had been appointed to represent an estate against his or her wishes. 11By her affidavit of 22 October Ms Cheryl Williams deposes to having undertaken a probate search which reveals that no application has been made in respect of Pierre's estate. Ms Williams also deposes to a conversation in which Samia says she does not wish to represent the estate. 12Ms Lane has provided me with further detailed and helpful written submissions and drawn my attention to Rule 6.30 which is in the following terms: 6.30 Effect of certain changes on proceedings (cf SCR Part 8, rule 10; DCR Part 7, rule 10; LCR Part 6, rule 10) (1) Proceedings do not abate as a result of a party's death or bankruptcy if a cause of action in the proceedings survives. (2) If a cause of action survives, and the interest or liability of a party to any proceedings passes from the party to some other person, the court may make such orders as it thinks fit for the joinder, removal or re-arrangement of parties. (3) Without limiting subrule (2), if a party to an application under section 20 of the Property (Relationships) Act 1984 dies, the court may order the substitution of the legal representative, as mentioned in section 24 (1) of that Act, as a party to the application. Also potentially relevant and referred to by Ms Lane previously are rule 7.6 of the UCPR: 7.6 Representation in cases concerning administration of estates, trust property or statutory interpretation (cf SCR Part 8, rule 14) (1) In relation to proceedings concerning: (a) the administration of a deceased person's estate, or (b) property the subject of a trust, or (c) the construction of an Act, instrument or other document, where a person or class of persons is or may be interested in or affected by the proceedings, the court may appoint one or more of those persons to represent any one or more of them. (2) A person or persons may not be appointed under subrule (1) unless the court is satisfied of one or more of the following: (a) that the person or class, or a member of the class, cannot, or cannot readily, be ascertained, (b) that the person or class, or a member of the class, although ascertained, cannot be found, (c) that, although the person or class, or a member of the class, has been ascertained and found, it is expedient for the purpose of saving expense (having regard to all of the circumstances, including the amount at stake and the degree of difficulty of the issue or issues to be determined) for a representative to be appointed to represent any one or more of them. (3) For the purposes of this rule, persons may be treated as having an interest or liability: (a) even if, in relation to one or more of them, the interest or liability is a contingent or future interest or liability, or (b) even if one or more of those persons is an unborn child. (4) This rule does not limit the operation of rule 7.10. and Rule 7.10 of the UCPR: 7.10 Interests of deceased person (cf SCR Part 8, rule 16; DCR Part 7, rule 13; LCR Part 6, rule 14) (1) This rule applies to any proceedings in which it appears to the court: (a) that a deceased person's estate has an interest in the proceedings, but is not represented in the proceedings, or (b) that the executors or administrators of a deceased person's estate have an interest in the proceedings that is adverse to the interests of the estate. (2) The court: (a) may order that the proceedings continue in the absence of a representative of the deceased person's estate, or (b) may appoint a representative of the deceased person's estate for the purposes of the proceedings, but only with the consent of the person to be appointed. (3) Any order under this rule, and any judgment or order subsequently entered or made in the proceedings, binds the deceased person's estate to the same extent as the estate would have been bound had a personal representative of the deceased person been a party to the proceedings. 13Ms Lane submitted that rule 7.6(1)(a) is enlivened. The evidence of Ms Williams shows that Ms Pihura was "back together" with Pierre before his death, and she is the most likely person to whom the estate will pass if there is no will. I agree that Ms Pihura is a person who either is, or potentially is, a beneficiary of the estate and someone who, in the absence of a will (or if a will exists and confers benefits on her) a likely applicant for letters of administration ad litem or more generally. However I do not think that the present proceedings, i.e. Mrs Matouk's claims, are proceedings concerning the administration of a deceased person's estate. Ms Lane also submitted that the proceedings are proceedings concerning property the subject of a trust because Mrs Matouk claims that Samia holds the property on a constructive trust for her and Samia claims that she holds the property on an express trust for Pierre (and now inferentially his estate). I do not think that UCPR 7.6 is applicable to the present situation - there being no competing classes of persons who are interested in the proceedings and 7.6(2) seems to be directed to a case where there is an express trust and a number of beneficiaries which does not fit the present circumstances. Whilst rule 6.30(1) is relevant because it makes it clear that the proceedings do not abate because of the death of Pierre, I do not think that rule 6.30 applies because the orders sought do not meet any of the categories of "joinder" "removal" or "rearrangement of the parties". I am of the view, however, that rule 7.10 is applicable, because it appears that Pierre's estate has an interest, and is not represented, in the proceedings and the relief sought by Mrs Matouk is adverse to that interest. 14On the questions of appointment against wishes, I note that in Basis and ING Funds the question was who should represent classes of unit holders and the funds in respect of which a representative order was made were substantial with no prospect of any costs incurred being unpaid. Where there is here no certainty that the estate is substantial and indeed indications that the estate may be insolvent it would impose a serious burden on a person to be required to represent the estate against his or her will. 15Apart from Ms Pihura there are realistically only two possible appointees. One is the Public Trustee and Guardian but I respectfully follow what Davies J said in Abu Arab about that course which in any event Ms Lane concedes is not appropriate. The only other alternative is Samia. Samia is the registered proprietor of the property and she is Pierre's sister. She is a party in any event. 16Ms Lane has drawn my attention to what was said by McLelland CJ in Eq in Re J Hart, deceased; Smith v Clarke [1963] NSWR 627 at 630-631: It is quite clear that under the English practice an order is never made where the proposed appointee is unwilling to act. See Prince of Wales & Association Co. v Palmer (1985), 25 Beav. 605; Hill v Boner (1858) 26 Beav. 372; Joint Stock Discount Co v Brown (1869), LR 8 Eq 376, at p. 380; Pratt v London Passenger Transport Board. Green v Venkar [1937] WN 43, at p. 472; [1947] 1 All ER 473; Lean v Alston [1947] 1 KB 467, at p. 472; [1947] 1 All ER 261. There is certainly no established practice or usage of this Court contrary to this practice and it should be followed in New South Wales. 17Rule 7.10(2) reinforces that practice because it provides that the Court may appoint a representative of the deceased person's estate "only with the consent of the person to be appointed". 18In my view it is appropriate to order pursuant to UCPR 7.10 that the proceedings continue in the absence of a representative of the deceased person's estate and for the following reasons: (1)The only persons who can presently be identified as a potential representative of the estate Ms Pihura, Samia or Mrs Matouk either do not wish to act as representative of the estate (Ms Pihura and Samia) or cannot represent the estate in these proceedings (Mrs Matouk). (2)Rule 7.10(2) precludes the appointment of Ms Pihura and Samia by reason of their lack of consent. I should note that the practice has behind it a principle which has even more force where there is no certainty that the estate will have the ability to reimburse the proposed representative for any liability incurred. Abu Arab is, in a sense, an instance of that principle too. (3)Samia is already a party to the proceedings and she is the registered proprietor of the property. If she does not want to take part in the proceedings, as her submitting appearance reveals, her affidavit will not be read at the substantive hearing. Samia is a proper contradictor to the case that Mrs Matouk mounts because she holds the property in her name, asserts matters relevant to the claimed trust and claims she is a trustee for Pierre (and inferentially the estate). It is open to Samia as a trustee who cannot obtain instructions from the beneficial owner, to apply for appointment as administrator ad litem or to seek to have another person appointed as administrator ad litem to give her those instructions. Of course if there are few, or no, assets in the estate other than the contested asset it would be understandable that neither she nor anyone else would wish to incur the risk of a costs order against them for which they obtain no indemnity, and Samia has the additional exposure to costs that, on her mother's case, Samia was involved in the fraud practised on her. (4)Samia's inaction in protecting an asset registered in her name on behalf of Pierre's estate or on the estate's instructions should not prevent Mrs Matouk from pressing on with her case. 19Accordingly, I propose to make an order in accordance with para 3 of Mrs Matouk's notice of motion of 23 July 2014. 20A copy of this judgment should be served by the plaintiff's solicitor on Samia, Ms Pihura and Mr Stojanovic together with notification that the matter will be listed for directions on a date that I will fix and that the plaintiff will be seeking to obtain a hearing date, without further reference to Samia or Ms Pihura.