Mehcur v Mehcur

Background

1. While I make no findings as to any disputed issues of fact, it is useful to set out a short summary of the background to the applications as gleaned from the material before me.
2. The proceedings concern a deed entered into in October 2013 between the plaintiff, Mr Mehcur, and his mother (the first defendant) for the sale of Mrs Mehcur's property located in Emu Plains (the Property). The circumstances of the signing of the deed and Mrs Mehcur's willingness and/or capacity to do so are in issue. Mrs Mehcur apparently no longer lives at the Property (though whether or not this is a temporary state of affairs may be in issue).
3. Prior to the transfer, another child of Mrs Mehcur applied to the Guardianship Tribunal in November 2013 for a guardianship and financial management order with respect to Mrs Mehcur. The Tribunal made a final order in 2014 for the management of Mrs Mehcur's estate by the NSW Trustee and Guardian under the NSW Trustee and Guardian Act 2009 (NSW) (NSW Trustee and Guardian Act). In 2020, Mr Seyit was appointed to manage Mrs Mehcur's estate.

Protective costs order

1. As to whether a protective costs order should be made, reliance is placed by Mr Seyit on what was said by Gleeson JA in Smith v NRMA Insurance Ltd (2016) 77 MVR 480; [2016] NSWCA 250 (Smith v NRMA) in relation to the making of protective costs orders. Relevantly, his Honour noted (at [36]) as to the power to make a protective costs order, that such an order may be made as an incidental term of an order appointing a tutor under r 7.18(1)(b) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), or in reliance on the power conferred by r 2.1 of the UCPR. Alternatively, his Honour noted, for the avoidance of doubt, that the Court has inherent power under its parens patriae jurisdiction to appoint a tutor on terms protecting the tutor from personal liability for costs.
2. As to whether a protective costs order should be made, in Smith v NRMA, Gleeson JA had regard to a number of factors, including (at [44]-[52]): the importance of the appointment of a tutor to have a person on the record that is personally liable for costs; the importance of the purposes served by a tutor, including the protection of the person under disability and the protection of the processes of the Court; whether another person or entity had indicated a willingness to consent to appointment as tutor without protection from personal liability for costs; and that there was no suggestion that the appeal was not bona fide.
3. It should be noted, however, that in that case the tutor, the subject of the protective costs order, was an independent solicitor who had no personal interest in the outcome of the proceedings.
4. The plaintiff here refers to the history and rationale behind the Court's power to order costs against a tutor as explained in Yakmor v Hamdoush (No 2) (2009) 76 NSWLR 148; [2009] NSWCA 284 noting that this decision was followed in Ashton v Pratt (No 2) [2015] NSWCA 134 and Guha v Guha [2020] NSWSC 1337.
5. The plaintiff has noted that the protective costs order made in Smith v NRMA was in the unusual circumstances of that case. The plaintiff contends that there are five reasons why a protectives costs order should here not be made. First, because there is a person interested in acting as a tutor, Mr Seyit, who was appointed, as I have noted, as a private manager of Mrs Mehcur's estate, and who has been acting in these proceedings as her tutor since July 2020. (I should say that Mr Seyit has informed me in the course of submissions that if a protective costs order is not made then he will not be prepared or potentially will not be prepared to continue as tutor in these proceedings.)
6. The second reason put forward by the plaintiff is that there is no suggestion that Mr Seyit cannot afford himself to run the proceedings, pointing to the evidence that he owns two unencumbered properties in Victoria.
7. Mr Seyit did not dispute that he owned those properties but says that he has not been working for 12 months and would be in a position to put forward his financial circumstances, but has not got that evidence to hand at this stage. I note that Mr Seyit has had the opportunity to put forward whatever evidence he wished in relation to this application.
8. The third reason put is that Mr Seyit has a financial interest in the outcome of the proceedings. The evidence is that Mrs Mehcur does not have a Will, and it is said that, as one of her children, Mr Seyit will most likely benefit from denying Mr Mehcur the relief that he seeks.
9. Mr Seyit tells me that he is in family discussions or in discussions with his mother in relation to a Will but he is not interested in any family inheritance. He says that any family inheritance would likely not be large because the property is worth approximately $700,000 and there are nine children. Mr Seyit says, from the (virtual) bar table, that he brings these proceedings not for any personal interest but in order to protect the position of his mother. In the course of the submissions he said that if the plaintiff is successful his mother will become homeless. There is some difficulty with that last proposition in circumstances where his mother is apparently not living in the Property the subject of the proceedings at this stage in any event, but Mr Seyit says that is only temporary accommodation.
10. In any event, the plaintiff's affidavit evidence is to the effect that the plaintiff has assured his mother that she will be able to live in the home for as long as she wants and has deposed that he is prepared to accede to court orders to that effect.
11. The fourth reason is that it is said that Mr Seyit should have made an application for a protective costs order at an earlier stage, noting that he filed a consent to act as a tutor in July 2020. It is said that, since that time, the plaintiff has spent a substantial amount of time and legal costs preparing evidence in these proceedings, that the matter is ready to proceed to a hearing (and I interpose to note that Mr Seyit says that the matter is ready to proceed to a hearing at this stage, albeit on the pleading as it presently stands) and that the delay in seeking a protective costs order is a discretionary reason to deny him that relief.
12. Finally, it is said that if Mr Seyit seeks to remove himself as tutor then Mrs Mehcur may have the assistance of the NSW Trustee and Guardian which has already been appointed as the financial manager.
13. Mr Seyit's response in relation to that is that the NSW Trustee and Guardian has already given a decision by letter dated 19 May 2020 (Ex A) to the effect that it will concede to the orders sought by the plaintiff in these proceedings provided that no claim is made against Mrs Mehcur for costs. That letter notes that the decision was made pursuant to s 62 of the NSW Trustee and Guardian Act and is consistent with the independent legal advice received to the effect that there is a strong possibility that the deed of agreement will be upheld and in that event not only would the plaintiff become entitled to take a transfer of the property but the first defendant may also have an adverse costs order made against her.
14. That letter noted that Mrs Mehcur could, if she disagreed with that decision, ask for the decision to be reviewed within 28 days. There is no evidence as to whether that has happened. I am told by Mr Seyit that Mr Seyit has obtained advice from a lawyer to the contrary and there is some suggestion that that advice has been provided to the NSW Trustee and Guardian but it is not apparent whether there has been a formal application for review of the decision.
15. In any event, if Mr Seyit removed himself as a tutor in these proceedings there would be nothing to stop a further application made to the NSW Trustee and Guardian, based on whatever material Mr Seyit says the NSW Trustee and Guardian should have taken into account in determining whether or not to defend the proceedings.
16. In my view, this is not a case where there should be a protective costs order made in favour of the tutor, Mr Seyit. This is not a situation that has the unusual circumstances of the Smith v NRMA case. In particular, this is not a situation where the tutor has no personal interest directly or indirectly. I accept that it would indirectly potentially affect the tutor's interests in the outcome of the proceedings at hand. Relevantly, my concern is that there is a conflict between the position of Mrs Mehcur, for whom Mr Seyit is tutor, and Mr Seyit himself in relation to the issue as to whether or not a protective costs order should be made, because the effect of making it would be that Mrs Mehcur would be wholly liable for any adverse costs orders rather than in a position to have Mr Seyit as tutor also liable for any adverse costs orders in the proceedings.
17. In those circumstances, I will not accede to the relief sought in Prayer 4 of the notice of motion.

Court-ordered mediation

1. Prayer 7 of the notice of motion seeks a court-ordered mediation. That is opposed by Mr Mehcur, the plaintiff, on the basis that, as he deposes in his affidavit sworn 26 July 2021, there have been lengthy without prejudice discussions and negotiations at an informal settlement conference in an attempt to resolve the matter and settlement was not reached.
2. Mr Seyit expresses the concern that it is very sad that the family is not able to reach agreement in relation to matters, including matters in relation to his mother's care and invites a referral to court-ordered mediation. In particular, Mr Seyit seeks a court order so that it is coming, as I understand the submissions, not directly from the parties albeit on the application of one of the parties.
3. In Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 427, Einstein J considered the power of the court to compel parties to mediate, noting that particular circumstances may require the exercise of that power despite the opposition of the parties, and the requirement for parties to act in good faith at such a mediation.
4. The power of the court to order a mediation is enshrined in s 26 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act), as follows: (1) If it considers the circumstances appropriate, the court may, by order, refer any proceedings before it, or part of any such proceedings, for mediation by a mediator, and may do so either with or without the consent of the parties to the proceedings concerned. (2) The mediation is to be undertaken by a mediator agreed to by the parties or appointed by the court, who may (but need not be) a listed mediator. (2A) Without limiting subsections (1) and (2), the court may refer proceedings or part of proceedings for mediation under the Community Justice Centres Act 1983. (3) In this section, listed mediator means a mediator appointed in accordance with a practice note with respect to the nomination and appointment of persons to be mediators for the purposes of this Part.
5. In New Idafe Incorporated v Barnard [2007] NSWSC 1107 at [17], Brereton J, as his Honour then was, when considering whether to refer the parties in that case to mediation, noted that "even where parties are in entrenched positions, mediation often narrows the gap between them". In Application of Perpetual Trustee Company Ltd; Re: Estate of the late Evelyn Mary Dempsey (No 2) [2016] NSWSC 1718 at [25], Slattery J considered the nature of the proceedings, the parties involved, the issues that remained to be decided and whether there was a real prospect of a mediated resolution that would be in the best interests of the parties as relevant to the decision of whether that case was appropriate for referral to mediation. The overriding purpose in s 56 of the Civil Procedure Act should also be kept in mind.
6. I agree that it is a difficult situation where there are family members and competing family interests. However, in circumstances where Mr Seyit claims that he has no interest whatsoever and disavows any interest in any inheritance in relation to the Property and maintain that he is simply seeking to ensure that his mother is not homeless, it seems to me that there is merit for the parties to have a final opportunity at this stage to mediate the dispute with the assistance of a trained mediator and, if the matter is referred to court-annexed mediation then the costs of such a mediation would not, I think, be at all prohibitive in the scheme of things.
7. Accordingly, over the opposition of the plaintiff, I will be referring the parties to court-annexed mediation. There are dates available as early as 29 September 2021.

Application to amend the statement of claim

1. Last is the notice of motion filed by the plaintiff on 7 September 2021 seeking leave to file an amended statement of claim in the form of annexure A to the affidavit of the plaintiff's solicitor Zeinab Tawbe sworn on 7 September 2021.
2. The application for amendment to the statement of claim is in order to include reliance upon alternative trust claims in respect of the Property or a share of the Property and contributions made to the Property as well as representations and the like.
3. I am informed that the amendments arise out of the same factual compass as that which is the subject of the existing statement of claim and the plaintiff will not be seeking to file further evidence in relation to the amendments.
4. Mr Seyit complains that the Mrs Mehcur will need, if that claim is amended, to retain new lawyers and to review the material to date and to put on further evidence, and would be seeking costs in relation to it.
5. I have had regard to the factors that are set out in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (Aon) by the High Court in relation to applications for leave to amend the pleadings. I take into account the stage of the proceedings at which the application is made, but I consider that the amendment to the causes of action, insofar as it is based on the same factual material gives rise simply to legal issues. While new lawyers that may be retained for Mrs Mehcur obviously will have to review the material to date, I do not accept that the amendments necessarily mean that evidence that has been filed in relation to the issues on their present pleadings becomes otiose or irrelevant for the purposes of the amended pleading and it would be hoped that there would be a sensible view taken as to whether any further evidence was required in order to address the new bases for relief put forward in the amended statement of claim.
6. So, having regard to the factors outlined in Aon and noting that the amendment was put on the basis that there was advice provided only recently in relation to the additional pleadings when senior counsel was briefed in the matter, and having regard to the fact that the matter has not yet been listed for hearing, I give leave for the filing of the amended statement of claim in the form annexed to the affidavit sworn 7 September 2021 of Zeinab Tawbe.

Orders

1. For those reasons, I make the following orders: 1. Refuse the relief sought in prayer 4 of the notice of motion filed 10 May 2021. 2. Refer the parties to court-annexed mediation on 1 October 2021. 3. Direct the parties to liaise with the Registry in relation to the court-annexed mediation. 4. Give leave for the filing of the amended statement of claim in the form annexed to the affidavit sworn 7 September 2021 of Zeinab Tawbe. 5. Reserve costs. 6. List the matter for directions in the Applications List at 8.30am on 5 October 2021. 7. Direct that, while Mr Sayit remains on the record as the tutor for the first defendant in the proceedings that he be permitted online access to the online court in this matter.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 October 2021