O'Leary v Bryant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROBATE LIST

115660/03 TRACEY-LEE O'LEARY v SANDRA ELIZABETH BRYANT JUDGMENT - Ex Tempore HIS HONOUR: Nature of the Proceedings 1 The proceedings in which this Notice of Motion is brought are proceedings which are brought seeking the proving of a Will of the late Martin Kenneth Denford deceased in solemn form, alternatively, seeking revocation of a grant of representation in Mr Denford's estate made on 25 August 2003 of a Will which he executed in February 2003, an order that letters of administration CTA of an earlier Will of Mr Denford made 7 December 1999 be granted to the plaintiff, and certain consequential orders. 2 Mr Denford died on 25 July 2003. The plaintiff in the proceedings is a granddaughter of Mr Denford. The defendant in the proceedings is a grandniece of the deceased. The defendant was closely involved in the care of the deceased in the period immediately before his death. He died aged 88 years. 3 The proceedings are ones in which the plaintiff alleges that there was doubt or suspicion as to whether at the time the deceased signed his February 2003 Will he had the testamentary capacity, about whether he had sound mind, memory and understanding, and about whether he knew and approved of the Will. The Will in question, of February 2003, is one which left the plaintiff a legacy of $100,000, and left the balance of the net residue of the estate to the defendant. The previous Will, of 7 December 1999, was one which left the estate equally between the plaintiff and the defendant. The statement of claim alleges that, from mid 2002 onwards, the deceased was infirm in various ways, including in ways which affected his mental capacity. The Present Application 4 The application I am now hearing is a Notice of Motion which has been filed by the plaintiff, seeking a declaration pursuant to section 63 of the Supreme Court Act 1970 that the proceedings have been compromised on the terms set out in a letter from the defendant's solicitor to the plaintiff's solicitor dated 27 January 2004, and a letter from the plaintiff's solicitor to the defendant's solicitor dated 5 February 2004. Whether this Question Should be Determined by Motion at all 5 I should say at the outset that both parties consented to this question being determined on a Notice of Motion in the present proceedings. There is considerable reluctance on the part of the Court, usually, to decide on Notice of Motion a question about whether proceedings have been compromised, if that question involves matters which are outside the scope of the proceedings themselves, or involve complicated questions unsuited for summary determination. I have collected some of the authorities concerning this matter in Re Jay-O-Bees; Rosseau v Jay-O-Bees [2004] NSWSC 818, at paras [63] to [72]. Usually the appropriate procedural vehicle is a suit in equity seeking specific performance of the alleged agreement to settle. In the present case, all the evidence is documentary. Both parties have briefed counsel, and are ready to argue the matter today. When that is the case, and when the parties consent, I am prepared to determine the question on Notice of Motion. The Course of Correspondence 6 The defendant's solicitors wrote to the plaintiff's solicitors on 12 January 2004 making an offer of settlement, whereby the plaintiff would receive a further payment of $50,000, each party would pay their own costs, and the proceedings would be withdrawn. 7 The plaintiff's solicitors responded on 13 January 2004, by a letter which made serious allegations about the frankness and openness of the defendant, and about the way in which the defendant had conducted the affairs of the deceased pursuant to an enduring Power of Attorney. The letter foreshadowed the issuing of extensive subpoenas to investigate the conduct of the defendant in managing the affairs of the deceased. 8 After setting the scene in that way, the letter then went on to discuss a possible compromise. The letter set out some contentions to the effect that the distributable estate of the deceased might be larger than had been stated by the defendant in the affidavit as to assets which had been filed with the probate application relating to the 2002 Will. It did some rough calculations, which suggested that the distributable estate might have been of the order of $675,000 if one gave a value to a cause of action which the deceased might have had concerning the circumstances in which a contract for the sale of his house did not proceed. The letter asserted that a 50 percent distribution would be fair and reasonable. Even if no value was attributed to the cause of action relating to sale of the house, the distributable estate, if divided 50/50, would have given the plaintiff $272,500. Given that she had received $100,000 under the later Will, this left her $172,500 short of a 50/50 distribution. After making these assertions, the letter continued: "In all of the circumstances, I am instructed to offer to discontinue the present proceedings on the following basis: 1. Your client provide to our client a proper accounting in respect of her grandmother's jewellery and provide to our client her grandmother's rings and silver locket; 2. Your client provide to our client the framed photos of Tracey's grandparents from the shelf in her grandfather's former bedroom; 3. Your client provide to our client all photos of Tracey, her father and mother; 4. Your client provide to our client all photos of our client's brother Guy; 5. Your client provide to our client the silver teapot which her grandfather always took with him on all of his travelling trips with our client and which he had promised to leave her; 6. Your client pay to our client an additional $150,000; 7. Your client otherwise retain all other proceeds of the estate of any nature whatsoever; 8. Each party pay their own costs; 9. We discontinue the present action. Could you please advise your client's position at your earliest convenience as it would obviously be desirable to avoid the cost of actually serving all of our subpoenas if they became unnecessary".

"Tracey" referred to the plaintiff. 9 The defendant's solicitors replied on 27 January 2004, saying: "We have taken instructions from our client who is prepared to pay your client an additional $150,000.00, as per point 6 of your facsimile. In relation to points 1 through 5 we ask that the following letter, addressed to your client, be considered by her prior to further negotiations regarding the issues raised. Our client agrees with points 7, 8 and 9. We look forward to receiving your response in due course." 10 The "following letter" referred to in that letter, was a personal letter which the defendant wrote to the plaintiff. It referred to various matters about their respective relationships with the deceased. It contained the following passage: "I am tired of listening to legal advice and what other people think I should do. I send this letter to you in all sincerity and I hope your solicitor, Kym, or anybody else, doesn't interpret it in any way that negates the care I offer you and my wanting to give you straight down the middle... half. My wish is for us to share half of Uncle Ken's money, but for you to get happiness from it more than anything. I have also added half of anything he gave me along the way... I have no issue with what you have from Uncle Ken's house and from under it. I have no issue with all the memorabilia that you have. I only ask that I keep the two small articles of memorabilia - the teapot (which was also used by Aunty Elsie and Uncle Ken for many years in their home during our visits, visits from friends and family) and the little jug which my Grandmother filled with milk and took to Uncle Ken as he worked in the fields as a boy. I don't place a lot of worth in material things, but the sentimental connection seems to be important to me. Uncle Ken really didn't promise the teapot to you. I'm sorry but that is the truth. When you were packing things from his house, you had the choice of taking the teapot but you left it there. I asked you a number of times on that day if you wanted anything else, and you, John and your children took those things they wanted, but the little teapot was left behind. You chose to have many boxes of articles which Aunty Elsie and Uncle Ken used in their lives. May I please have those two things. I will send you the photo of Uncle Ken and Aunty Elsie, I just don't know why you didn't take it with all the other photos you chose to take. And I don't have any other photos of Guy that I know of. You took the one or more of him from Uncle Ken's home. If I ever come across any I will send them to you. I am making a beautiful scrapbook of Uncle Ken and Aunty Elsie's life and you are welcome to visit and see it. The papers in the old case are to do with Uncle Ken and Aunty Elsie and my other family members. You actually told me about the contents of that case and told me I should look in it as it had to do with my family. I gave you any papers that were to do with you, in particular the papers relating to your father's adoption. You also have the photos of your Dad from Uncle Ken's house, but if I come across anymore I will copy them and send them to you. If I had the jewellery I would give it to you. It was either taken by visitors (you would know who I mean) or stolen with all the other articles and money he lost over the many burglaries he had over those two years. I don' know what pieces were amongst the jewellery and my mum or I would not take it without admitting it openly. And we wouldn't take it in the first instance."

To understand that passage "Uncle Ken" is the deceased (and thus is the plaintiff's grandfather) and "Auntie Elsie" is the deceased's wife (and thus is the plaintiff's grandmother). "Kym" is the plaintiff's solicitor. 11 The letter at a later stage said: "It is also important that I write to you that Kym's letter of 13th January 2004 does not frighten me. I have been cross-examined in Courts as a witness in my work roles. I have worked in the Courts with Judges and Magistrates, and I have worked with solicitors and barristers for many years. The legal system does not frighten me. It is familiar to me. I know I will have to continue with the legal process if you decide not to take this offer, and this is not intended as a threat in any way. We can end this now. I have to leave you to decide on that one. The solicitors could make an argument about what is half, but I make this offer in honesty and recognition of how important it is for you. The legal arguments can waste your life, my life and take up valuable Court time. I told Uncle Ken not to change his will, but he was adamant (and you know how determined he would get when he made a decision. You and I have laughed about it before.) Tracey, this letter is true and honest. I feel this is my last chance to be compassionate and understanding in your wishes. There are no tricks. Please let's settle this all now or else Uncle Ken's memory will be dragged through Court, the solicitors making a mint, and you and I never to be the friends I had always wanted us to be. Sounds corny but I mean this with every fibre of my being." 12 The solicitors for the plaintiff responded by letter dated 5 February 2004, which said: "Your client's letter was conveyed to our client as requested. We are instructed that our client reserves her views in relation to your client's various assertions but our client is prepared to accept your client's proposals in relation to points 1 to 5 of the proposal contained in our letter of 13 January 2004 and to otherwise settle the matter on the basis proposed in points 6 to 9. We would like to be able to advise the Court as soon as possible. To that end we suggest that you direct deposit the additional $150,000.00 to our Trust Account on the basis of our undertaking hereby given that we will forthwith on confirmation of receipt of those moneys as cleared funds, file an appropriate discontinuance. We confirm our Trust Account details as follows and look forward to your confirmation of the deposit." 13 On 27 February 2004 the defendant's solicitors replied, saying: "Our client is not in a position to deposit the additional $150,000.00 into your trust account at this time. As indicated in previous correspondence a distribution from the estate had previously been made to our client after the grant of probate. Those moneys were applied towards the purchase of a property. That property is being actively marketed and the proceeds from the sale would be the source of the payment to your client. When our offer on 27 January was made contracts had issued for the sale of the property and we anticipated being in a position to finalise these matters with your client in early March. That sale did not proceed. In all the circumstances may we suggest that a Deed and Release be prepared containing the terms of settlement between our respective clients to enable the discontinuance of the current legal proceedings." 14 On 1 March 2004 the defendant's solicitor wrote again, saying: "Further to our facsimile of 27 February we advise that we received a sales advice for the subject property on Saturday." 15 On 1 March 2004 the matter was listed before the Registrar. Counsel for the plaintiff is the only counsel recorded as appearing on that day. The Court's record indicates "Settlement neg. taking place. S/O 22/3/04 for Terms to be filed. If not settled SMO 8/12/03 to be complied with otherwise struck out". (Interlocutory directions had been given in terms of Short Minutes of Order made on 8 December 2003.) 16 On 19 March 2004 the solicitors for the plaintiff wrote to the solicitors for the defendant, saying: "This matter is to be re-mentioned before the Registrar of the Supreme Court on Monday. Would you please urgently advise your proposal in respect of timing for the payment to our client. We wish any formal terms of settlement to be precise as to time and any release will be conditional upon payment being received". 17 A facsimile from the solicitors for the defendant to the solicitors for the plaintiff, sent on 22 March 2004, but misdated, referred to the mention of the matter in the Supreme Court on that day. It continued: "The exchange of Contracts for our client's property is yet to occur and we can therefore not give you a fixed date when the funds will be available for settlement. We are happy to draft Terms of Settlement, by way of Deed and Release, that can be filed with a Notice of Discontinuance. Clearly we were hoping that the sales contracts would be exchanged to offer more precision to the Deed. Any Deed we draft before exchange must by necessity involve a settlement date dependant upon the sale of our client's property. This date may be unknown. Please advise if you wish to us supply a draft Deed for your client's consideration. We have arranged for Counsel to appear in Court today." 18 On 22 March 2004 the matter was mentioned again in Court. The Court's note records "Matter settled in principle. [By consent stood over] 19/4/04 for filing appropriate Orders". 19 By a facsimile of 23 March 2004 to the solicitors for the defendant, the solicitors for the plaintiff noted that the matter had been adjourned in court until 19 April. It continued: "We understand the problem with which you are confronted but, of course, that is a matter entirely of your client's own making. In an effort to move the matter forward we will be happy for you to submit a proposed draft deed and we will take our client's instructions." 20 On 15 April 2004 the solicitors for the defendant sent, by e-mail, a draft of a deed of settlement and release. 21 On 16 April 2004, the solicitors for the defendant wrote to the solicitors for the plaintiff, saying: "Given the next Court date in this matter is 19 April 2004 we would be happy to arrange for the mention of this matter on that occasion on your behalf seeking a further period of time for the finalisation of documentation between the parties. Please advise by return if you wish us to do so." 22 On 16 April 2004 solicitors for the plaintiff acknowledged receipt of the proposed deed of settlement and release, and proposed some suggested amendments. 23 On 19 April 2004, there was a further Court hearing. The Court noted, "settled in principle - parties debating terms of deed. [Stood over] 17/05/04." 24 On 28 April 2004 a complicating factor arose. The solicitors for the defendant received a letter from Mr Guy Williams, a half brother of the plaintiff, which said that he was proposing to bring a claim under the Family Provision Act 1982 in his grandfather's estate. 25 There was further discussion between the respective solicitors, which concerned how the claim of Mr Williams should be dealt with. The solicitors for the defendant suggested that if Mr Williams made a claim on the estate and that claim was settled, then the two clients should share all costs associated with the settlement, together with the settlement amount. There was no express consideration of what would happen if Mr Williams' claim was disposed of other than by settlement. There was also the prospect raised by solicitors for the defendant that the defendant might need to obtain judicial advice concerning the appropriateness of settlement. 26 By letter dated 23 June 2004 the solicitors for the plaintiff suggested that, rather, any payment to Mr Williams should be met by their respective clients pro rata to the value of the estate that each of them had received. There was no specification of how the value should be ascertained - in particular, the question of whether any value should be attributed to the cause of action relating to the failed sale of the deceased's house was not adverted to. 27 That debate, about how any claim by Mr Williams should be dealt with, continued through some further correspondence. 28 It was never resolved. By 30 August 2004 the defendant told the Court that no settlement agreement had been arrived at. Decision 29 Mr Meek, counsel for the plaintiff, has submitted that each of the points raised in the letter of 13 January 2004, has been resolved. Points 6, 7, 8 and 9 were expressly agreed to by the correspondence of 27 January 2004. He submits that the portion I have quoted from the letter of the defendant which was enclosed with the letter of 27 January 2004, address and puts a proposal concerning each of paragraphs 1 through to 5. It is true that there is not a complete correspondence between that response, and paragraphs 1 through to 5, as the response raises a new matter concerning the milk jug which the defendant wished to keep, and there was no explicit reference to any photographs of the plaintiff's mother. Mr Meek submits that, while there were these fresh proposals put by the defendant's letter enclosed with the solicitor's letter of 27 January 2004, they were all accepted by the plaintiff's solicitor's letter of 5 February 2004, and that is enough to give rise to a contract. 30 I am not persuaded that that mechanical approach to contract formation is the appropriate one to apply in the present situation. The letter of 5 February 2004 raised questions which had not previously been addressed, and which were ones which were necessary to any full resolution of the dispute between the parties, concerning the time at which payment would be made of the additional $150,000, and the means by which it would be paid. Further, the letter of the defendant's solicitors of 27 February 2004 raised another new proposal, that there should be a deed and release. That proposal was not itself rejected. 31 Later, the reaction of the plaintiff to the raising of the prospect of Guy bringing a claim was not to say, "this is none of my concern. You have an agreement to pay me $150,000", but was rather to negotiate further about the manner in which any amount payable in consequence of his bringing a claim might be dealt with. It is well accepted that subsequent conduct of the parties can be looked to in deciding whether an agreement has been entered into: B Seppelt & Sons Ltd v Commissioner For Main Roads (1975) 1 BPR 9,147. Here, after the point where Mr Meek urges me to conclude that there was a binding agreement reached, discussion of new terms continued seamlessly. What the Court was told from time to time fell short of a clear statement that the proceedings had settled. 32 I am not persuaded that there is any agreement to compromise the proceedings. The Notice of Motion is dismissed with costs. **********

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