1 HIS HONOUR: In these proceedings the plaintiff claims provision under the Family Provision Act 1982 out of the estate of her late father. There have been several other claims in that estate some of which have been settled, and the plaintiff's claim and the other remaining claim are to be heard by an associate judge later in this month.
2 The first and second defendants have obtained probate of the Will of her late father. Susanjohn Pty Limited the third defendant, described as trustee of the Slackks Superannuation Fund, the fourth defendants Slackks Pty Limited and the fifth defendant Susan Dewing appear to be entitled to all or most of the assets in the estate unless the dispositions made by the Will are disturbed.
3 The third, fourth and fifth defendants are in a general way associated in interest. They apply by notice of motion of 10 September 2010 for a number of orders. First they apply for orders which substitute Mr Brian Dewing as fifth defendant in place of Susan Dewing. Mr Brian Dewing obtained probate of Susan Dewing's Will by grant dated 27 August 2010 following her death on 11 July 2010. As executor, Mr Dewing is entitled to this order as of course and it will be made. The applicants further seek a number of orders which will make provision for the plaintiff and in effect dispose of the proceedings in accordance with what the applicants claim is an agreement made in correspondence for the disposition of proceedings. The agreement contended for appears from correspondence annexed to the affidavit of Mr R V Cameron sworn 9 September 2010.
4 There is a series of letters but the first which is presently significant is the letter of 18 December 2009 from the plaintiff's lawyers Hansons to MCG Lawyers acting for the third, fourth and fifth defendants. The letter followed a mediation. Letters in the same terms were directed to a number of other persons interested in estate affairs or to their solicitors. However the other like letters are significant only in that they did not lead to any purported acceptance. In particular the first and second defendants the executors did not accept the offer which was made to them. They have not supported the present application. They do not regard themselves as parties to any agreement to settle the litigation and do not propose to ask the Court to dispose of the proceedings in accordance with the arrangement put forward.
5 The letter of 18 December 2009 plainly continues a chain of communications which included the mediation. It opens by referring to the plaintiff's last offer at the mediation reciting what it was and saying:
"The last offer by the third, fourth and fifth defendants (the first and second defendants not, at that time, being present) was the townhouse and $300,000".
6 The letter then goes on to a fairly lengthy appraisal of the needs and practical considerations put forward by the plaintiff relating to the amount of provision which should be made for her; it continues what appears to have been earlier discussion.
7 Then on the second page it says:
"We have had the opportunity to more closely analyse our clients need and entitlements and on this basis re state the offer of provision by way of the title of the townhouse in which our client currently resides and the sum of $1,000,000".
8 Then there is a rather discursive paragraph discussing what would be the appropriate terms of the discretionary trust which would hold the assets to be provided for her, and the terms of this discussion show that what that discretionary trust was to provide for remained open to further consideration. The interests and identity of persons entitled in remainder were not clearly indicated although an example was suggested. After this discursive passage, the letter went on:
"The above offer is inclusive of costs".
9 The letter closed with a reference in common form to Calderbank. The letter was headed "without prejudice save as to costs". Many months passed without a significant response. On 11 July 2010 the fifth defendant died. On 29 July 2010 at which date there had been no grant of probate of her Will MCG Lawyers wrote to Messrs Hansons referring to the litigation and to the letter of 18 December 2009. They then advised that Susan Dewing died on 11 July 2010, enclosed extracts from her last Will and stated:
"Brian Dewing, in his capacity as director of Slackks Pty Limited (which is the trustee of the McKenzie Family Trust), nominated executor in the last Will of the late Susan Dewing (the other nominated executor having renounced) and co-beneficiary of the estate of the late Susan Dewing and as beneficiary of the McKenzie Family Trust has instructed us to accept the offer set out in your letter which we now do."
10 They went to make comments about related costs and asked "Would you please prepare consent orders embodying the trust as to capital and income contemplated in the final paragraph of your letter of 18 December 2009". In effect, in the present application the applicants seek orders of the Court in enforcement of what they put forward as the agreement then reached.
11 There are practical difficulties which prevent reducing an agreement to settle or dispose of a claim under the Family Provision Act to a form enforceable under contract law. Such an arrangement can only be given effect if the Court makes an order; otherwise it is not possible for the parties by their agreement to alter or otherwise impact upon the rights generally of persons interested in the estate. Unless the Court makes a decision under section 7 of that Act, and where all parties agree it is usually ready to do, alterations in property rights cannot be brought about.
12 Another difficulty is related to the provisions of section 31 which deny effect to an agreement to release a right to apply for provision unless the Court has made an order giving it effect; a consequence of section 31 is that a purported contractual obligation to resolve or release a claim, perhaps by accepting some compromise, is not binding on a claimant unless and until there has been an order under section 31.
13 A further significant barrier relating to the need to obtain the Court's order if what is said to be an agreement is to have effect is the law explained in Bartlett v Coomber [2008] NSWCA 100 (and earlier well established) in which when a Court is asked to give effect to an agreement by giving a judgment or making an order it remains within the power of the Court to decide not to do so for appropriate reasons; the exercise is not simply one of giving effect to contractual arrangements and the Court has residual powers. I stated my opinion with respect to the subject at my judgment in [84] to [86].
14 The circumstance in the present case which to my mind would altogether prevent the Court from accepting and acting on a contractually binding arrangement and giving it an effect by an order under section 7, and also may well invoke exercise of the Court's power expounded in Bartlett v Coomber, is the profound change in the relevant facts which took place after the supposed offer was made but before the supposed acceptance in that the fifth defendant Susan Dewing died in the interval.
15 The provision made for Susan Dewing in the Will of the deceased and the nature of the moral duty or perhaps to put it another way the appropriateness of the testator's making provision for her were significant at several points in consideration of the plaintiff's claim; whether provision for the plaintiff should be ordered for her and what amount it should be.
16 While Susan Dewing was alive the testator's duty to make provision for her presented an altogether different and more compelling aspect than the considerations which present themselves now. It remains important that the Court in making an order under section 7 is to have regard to the property rights of those who succeed to the property rights of Susan Dewing. An agreement made in the circumstances of this supposed agreement when such a radical alteration in the relevant circumstances occurred during the negotiation could not be expected to receive the endorsement of the Court; consideration would be re-committed by the intervention of such a prominent change of circumstances.
17 In my opinion there is no prospect of the agreement or purported agreement in the letters that I have referred to now being adopted by the Court without very full consideration of the claims of the plaintiff and of the case put against her claims. The absence of endorsement or indeed participation by the executors in the supposed arrangement is an adverse consideration of high importance in this connection.
18 If the letters are addressed in terms of contract law alone there are in my opinion further and insuperable difficulties. The letter of 18 December 2009 if understood as an attempt to enter into a contractual relationship by making an offer (notwithstanding the difficulties of sections 7 and 31 to which I have referred) is an offer directed to the third, fourth and fifth defendants and open to acceptance by them and not by some of them, or by anybody else.
19 In so far as it was an offer directed to the fifth defendant Susan Dewing and relating as it would to her interest in the estate and the appraisal of her moral claim on the testator, it should not reasonably be understood that it was directed to anyone who might succeed to her rights after her death, or as having any further standing as an offer in the event that she should die. That event would so wholly change the circumstances discussed within the letter and also the surrounding circumstances that it should be understood as being directed to her personally and not to someone else. It was not in my opinion open for acceptance by her legal personal representative. It will, of course, be noted that at the time of the purported acceptance Brian Dewing had not obtained probate and was not her personal legal representative. However that may be, he purported to accept for himself as nominated executor and also as director of Slackks Pty Limited, but there was no purported acceptance on behalf of the third defendant Susanjohn Pty Limited, in this supposition one of the offerees.
20 If the first letter was an offer to enter into a contractual relationship it was not open to acceptance other than by the persons indicated as potentially accepting it, that is, all of them. In particular it was not open to acceptance by Mr Dewing on his own or by Mr Dewing if he brought the fourth defendant Slackks Pty Limited with him.
21 The open-ended nature of the terms of the proposed settlement and the identification of the remainder beneficiaries which was left for further discussion is a further reason why a simple statement of acceptance could not bring about a contractual relationship; important terms relating to who was to be benefited by the arrangement had not been established and any resulting agreement would lack certainty.
22 A further matter is that although the first letter did not indicate a time for acceptance it should be understood that it was open for acceptance for a reasonable time. During the interval preparation of the case proceeded, an appointment for hearing was obtained, fees were paid and costs were incurred, and (most significantly) the fifth defendant died. By the time of the purported acceptance it should be found in my opinion that a reasonable time for acceptance had passed.
23 For these reasons I am of the opinion that the supposed agreement put forward is not enforceable in any way and the Court should not make an order in accordance with it. Upon the notice of motion, I make the following orders:
1. Grant leave to the plaintiff to file an amended summons joining Brian Dewing as executor of the estate of the late Susan Dewing as fifth defendant.