Pinch v Prinsse

SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3992 of 1999 LEANNE PINCH and GREGORY SMITH -V- YVONNE PRINSSE JUDGMENT

1 MASTER: These proceedings were instituted by summons filed on 10 September 1999. The Plaintiffs named in that summons were Leanne Pinch and Gregory Smith, and the Defendant was Yvonne Prinsse. 2 By that summons the Plaintiffs claimed declaratory and other relief in respect to the estate of the late John Smith (to whom I shall refer as "the Deceased"). 3 On 15 May 2000 Mr Justice Hamilton, by consent of the parties, ordered that the trial of the proceedings be referred to a Master. 4 The Deceased, who died on 7 July 1986, left a will dated 7 April 1981, probate whereof was on 21 June 1987 granted to Yvonne Jeanette Prinsse, the executor named in such will (who is the Defendant to the present proceedings). 5 At the time of his death the Deceased was a widower, his wife having pre-deceased him on 28 April 1981. 6 By his will the Deceased, in the events which have happened, provided, by clause 3, as follows: SHOULD my wife predecease me or die within twenty eight days of the date of my death then I appoint my son RONALD WILLIAM JOHN SMITH and my daughter YVONNE JEANETTE PRINCE [ sic ] Executor and Executrix of this my Will and in that event I GIVE DEVISE AND BEQUEATH the whole of my estate as aforesaid UNTO my son and said daughter in equal shares as tenants in common. 7 The Deceased had fathered two children, being Ronald (who predeceased the Deceased, having died on 21 August 1981) and Yvonne, the Defendant (who survived the Deceased). 8 The two Plaintiffs named in the summons, Leanne Pinch and Gregory Smith, are the two children of the late Ronald Smith (to whom I shall refer at "Ronald"). Ronald, who died intestate, was survived by his wife Clare Georgina Smith (now Mrs Burnett) and by his two children. 9 The death of Ronald during the lifetime of the Deceased had the effect of activating the provisions of section 29 of the Wills, Probate and Administration Act, 1898. That section provides, Where any person being a child or other issue of the testator to whom any real or personal estate is devised or bequeathed for any estate or interest not determinable at or before the death of any such person dies in the lifetime of the testator, leaving issue, and any such issue of such person is living at the time of the death of the testator, such devise or bequest shall not lapse but shall take effect as if the death of such person had happened immediately after the death of the testator, unless a contrary intention appears by the will. 10 The general effect of the foregoing section is a fictitious prolongation of the life of the original devisee or legatee, as the case may be, in order to prevent the devise or bequest from lapsing. It does not substitute the issue for the deceased beneficiary, but results in the vesting of the property in the personal representative of the deceased devisee or legatee, and the share will then devolve according to that person's will, if any, or otherwise will be distributed as on an intestacy. 11 In the instant case, therefore, since Ronald left issue at the time of his death (being his children Leanne and Gregory), the gift to Ronald of a one half interest in the estate of the Deceased did not lapse, but, since Ronald died intestate, passed upon intestacy. Ronald was survived by his widow (to whom I shall refer as "Clare"), and in consequence (he having no assets at the time of his death), Ronald's interest in the estate of the Deceased passes in its entirety to Clare. 12 However, it would appear that Ronald's children mistakenly thought that Ronald's entitlement under the will of the Deceased passed to them, rather than, upon Ronald's intestacy, to their mother. It was as a result of that apparent belief that the proceedings were instituted in the form in which they were originally constituted, naming as Plaintiffs only Leanne and Gregory. A claim by Leanne and Gregory for such an interest in the estate of the Deceased was misconceived, and was doomed to failure. 13 The apparent mistaken belief of Leanne and Gregory concerning an entitlement by them to the interest of their father in the estate of the Deceased can, at least in part, be explained by the totally misleading statement of the executor in support of the application for probate, where, under the heading "Persons Entitled", appears the following, Margie May Smith, the wife of the Deceased, predeceased the deceased.

Ronald William John Smith, the son of the deceased, predeceased the deceased leaving issue.

Gregory Smith Grandson - Two eighths estate, $7,774

Leanne Pinch Grandaughter 17 Two eighths estate, $7,774

Yvonne Jeanette Prinsse Daughter - Four eighths estate, $15,548 14 (The figure "17" appearing after the name of Leanne Pinch is a reference to her age at the date of the application for probate. She subsequently attained her majority.) 15 It will be appreciated that the foregoing statement of the executor setting forth the names of the persons entitled to the estate of the Deceased is incorrect in asserting that each of Leanne and Gregory was entitled to two eighths of the estate of the Deceased. Neither of those persons was entitled to any part of the estate of the Deceased. Their mother, Clare, was entitled to four eighths of the estate of the Deceased. 16 The question of whether the proceedings were properly constituted, with Leanne and Gregory being the only Plaintiffs, clearly emerged upon the first day of the hearing, 15 May 2000. 17 In consequence of procedural orders made by me that day (which were opposed by the Defendant), and of orders which subsequently were made on 30 June 2000, Clare Georgina Burnett was joined as a Third Plaintiff to the proceedings, and leave was granted to her to file an amended summons. The relief sought by the Plaintiffs in the amended summons replicated, in substance, the relief sought by Leanne and Gregory in the summons, but in addition sought, in the alternative, a declaration that the Defendant has at all times since 7 July 1986 held one half of the assets of the estate of the Deceased in trust for Clare (prayer 2), and an order that the Defendant pay to Leanne and Gregory or to Clare (as applicable) the amount, if any, which will be found to be due to them or her upon the taking of accounts, together with interest thereon (prayer 5). 18 It was not disputed by the Defendant that she had distributed the entirety of the estate of the Deceased to herself. Neither was it disputed by the Defendant that, in the events which had happened, one half of the estate of the Deceased should upon the death of the Deceased have been distributed, upon the intestacy of Ronald, to Clare. The Defendant did not see fit to make an affidavit in the proceedings. Neither did she offer any explanation for or seek to justify her conduct in appropriating to herself the one half of the estate of the Deceased which Clare at the time of his death was undoubtedly entitled to receive and to which the Defendant (as disclosed in the Probate application) recognised that she herself had no entitlement. 19 The only basis upon which the Defendant opposed the relief sought by the Third Plaintiff was in consequence of the provisions of section 47 (1) of the Limitation Act, 1969. That subsection provides, relevantly, An action on a cause of action:

(d) to recover money on account of a wrongful distribution of trust property, against the person to whom the property is distributed or against his successor,

is not maintainable by a trustee of the trust or by a beneficiary under the trust, or by a person claiming through a beneficiary under the trust if brought after the expiration of the only or later to expire of such of the following limitation periods as are applicable:

(e) a limitation period of twelve years running from the date on which the plaintiff or a person through whom he claims first discovers or may with reasonable diligence discover the facts giving rise to the cause of action and that the cause of action has accrued; and

.... 20 Conformably with such reliance upon the provisions of the foregoing legislation, the Defendant on 30 June 2000 filed a notice pursuant to Part 5, Rule 5B of the Supreme Court Rules, in the following terms, The Defendant claims that the right claimed by the First Plaintiff, the Second Plaintiff, and the Third Plaintiff or any one or more of them in the Amended Summons has been extinguished under and pursuant to Division 1 of Part 4 of the Limitations Act 1969.

21 Thereafter, a considerable quantity of evidence on affidavit was filed on behalf of the Third Plaintiff with a view to establishing when she first discovered or might with reasonable diligence have discovered the facts giving rise to the cause of action and that the cause of action had accrued.

22 Clare swore an affidavit on 23 June 2000. She swore another affidavit on 6 July 2000. When the matter next came on for hearing on 28 July 2000 Clare was cross-examined. 23 The hearing did not conclude on 28 July. After it had proceeded for less than an hour, and after the oral evidence of Clare had been completed application was made on behalf of the Plaintiffs, which was opposed by the Defendant, for the hearing to be adjourned, with a view to further affidavits being relied upon on behalf of the Plaintiffs. Despite the opposition of the Defendant, I granted that application, noting that on the adjourned hearing the Defendant might wish to further cross-examine Clare. I also ordered that the Plaintiffs pay the costs of the Defendant thrown away by reason of the adjournment. 24 The adjourned hearing resumed on Friday, 20 October 2000. In the meantime a further affidavit had been sworn by Clare, on 3 August 2000. In that last affidavit she stated (paragraph 2) that she "must correct mistakes in both affidavits [of 23 June 2000 and 6 July 2000], and, in particular, at paragraph 8 of the affidavit sworn 23 June 2000". 25 In each of her affidavits of 23 June 2000 (paragraph 8) and 6 July 2000 (paragraph 8) Clare swore that in 1992 she consulted Mr Brian Hudspeth, solicitor, at his office at Warilla, for the purpose of enquiring about her rights in the estate of her late father-in-law, the Deceased. She persisted in that evidence under cross-examination on 28 July 2000. 26 In her cross-examination on 28 July Clare stated that she had learnt of the terms of the Deceased's will some "fourteen, sixteen years ago" when her son-in-law had told her about a meeting he had had with the Defendant's son-in-law. 27 In her affidavit of 3 August 2000 Clare stated that she did not attend the office of Mr Hudspeth at Warilla at any time in relation to the estate of the Deceased, asserting that her confusion arose from the fact that she had attended Mr Hudspeth's office at Warilla on some earlier occasion, when her husband Ronald Smith was still alive and Clare sought advice from Mr Hudspeth about the possibility of obtaining a restraining order against Mr Smith. 28 In her affidavit of 3 August 2000 Clare asserted that communications with Mr Hudspeth concerning the estate of the Deceased were made through the medium of her children Leanne and Gregory and Leanne's husband Michael since Clare was living in Manilla at the time and could not conveniently travel to Mr Hudspeth's offices which were located near Wollongong. In that affidavit Clare also referred to her knowledge of a conference which Mr Hudspeth had arranged for Leanne and a Sydney barrister, Mr Maiden, but said that Clare herself did not attend that conference because of the distance involved in her travelling from Manilla to Sydney for that purpose. 29 Although in her oral evidence under cross-examination on 28 July Clare referred to learning about the Deceased's will some "fourteen, sixteen" years earlier, nevertheless, in her affidavit of 3 August 2000 (paragraph 5) she sought to retract that statement by saying that if she "couldn't claim to know precisely when it was or precisely the words [Leanne] used." She then referred to information allegedly communicated to Leanne's husband, Michael Prinsse, by the Defendant's son-in-law, Daniel Tyce, at a football match. 30 Clare was further cross-examined on 6 October 2000. Essentially, the effect of what she said under cross-examination was that she wished to withdraw the entirety of the evidence which she had given on 28 July 2000. She asserted that she was confused on that earlier occasion. She said that she had no independent recollection of the date upon which she first found out about the provisions of the will of the Deceased, and that she had relied solely on what Leanne had told her. 31 I have had the opportunity on two occasions to observe the Third Plaintiff giving oral evidence under cross-examination. I consider that she was a totally unreliable historian. Nevertheless, I am not satisfied that she was deliberately fabricating her evidence or that she was deliberately attempting to mislead the Court. 32 Both Leanne Pinch and her husband Michael Pinch were cross-examined on their respective affidavits. The evidence of Michael Pinch concerning the alleged conversation with the son-in-law of the Defendant, and the alleged date of that conversation and his obtaining within a few days thereafter a copy of an exemplification of the probate of the will the Deceased was corroborated by the calendar of football matches which he annexed to his affidavit and, in my view very significantly, by the fact that the date of the exemplification was 28 April 1992. Further, there was no evidence to suggest that either Leanne or her husband Michael Pinch (through whom Clare obtained the totality of her information concerning the estate of the Deceased) had any knowledge of the details of that estate before 1992. 33 I recognise that Mr Tyce (who in his affidavit of 3 October 2000 totally denied the alleged conversation between himself and Mr Pinch at the football match) was not cross-examined. Counsel for the Plaintiff stated that that was a result of a forensic decision made by Counsel in that regard. 34 I have had the benefit of receiving from each Counsel a written outline of their respective submissions. Those written outlines will be retained in the Court file. 35 There was considerable argument concerning which party bore the evidentiary burden of establishing whether or not the Third Plaintiff first discovered or might with reasonable diligence have discovered facts of the nature described in section 47 (1) (e) of the Limitation Act within the period referred to in that paragraph. 36 The Defendant relied upon the decision of the High Court of Australia in Banque Commerciale SA en liquidation v Akhil Holdings Ltd (1990) 169 CLR 279, at 285 per Mason CJ and Gaudron J. However, that passage deals with the entitlement of a plaintiff to take advantage of a proviso to the limitation defence contained in the (now repealed) provisions of section 69 of the Trustee Act 1925. The present Plaintiffs, in submitting that the evidentiary onus in this regard rested upon the Defendant, relied upon the decision of the Appeal Division of the Supreme Court of Victoria in Pullen v Gutteridge Haskins & Davey Pty Limited (1993) 1 VR 27 at 72-73. That latter judgment appears to me to have greater relevance to the circumstances of the instant case. 37 It is no part of a cause of action of the nature sued upon by the Plaintiffs, being in respect to the wrongful distribution to herself by the Defendant of one half of the assets of the estate of the Deceased, that the claim is not statute barred. Indeed, it is my understanding that, had it not been for the enactment of section 47 of the Limitation Act, there would have existed no limitation upon the making of the claim or the granting of the remedy in respect of such a cause of action (see Jacobs, Law of Trusts in Australia, 5 ed. (1986), [2219]; see also, Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 3 ed. (1992), Chapter 34.) 38 It is my understanding, therefore, that the evidentiary burden of establishing the matters set forth in paragraph (e) of section 47 (1) of the Limitation Act rests in the instant case upon the Defendant. 39 But, in any event, and even if (contrary to my foregoing understanding of the law in this regard) the evidentiary burden of establishing compliance with the foregoing provision rests upon the Plaintiffs, I am satisfied that the Third Plaintiff has adequately discharged that burden. 40 Had the affidavit evidence and the oral evidence of Clare stood alone, it would have been somewhat difficult for the Plaintiffs to have established that it was only in 1992, rather than some fourteen to sixteen years ago, that Clare had first discovered the facts and circumstances surrounding the will of the Deceased. But that evidence did not stand alone. It was supported by the evidence of Leanne and her husband (including, significantly, the exemplification of the probate which Mr Pinch obtained on 28 April 1992). The assertion that it was only in 1992 that Mr Hudspeth was consulted concerning the rights of Clare in the estate of the Deceased was also supported by the contents of Mr Hudspeth's file, which was in evidence (Exhibit 2). 41 I am satisfied, upon the balance of probabilities, that Clare first discovered those facts and circumstances only in 1992. Further, in the light of the personal relationship between Clare and her first, and by then long deceased, husband (against whom she was considering at one stage obtaining a restraining order), I am satisfied that she could not with reasonable diligence have discovered the foregoing facts and circumstances before she did so in 1992. 42 It follows from my foregoing conclusion (since the period of twelve years from 1992 had not expired before the date of the filing of the amended summons) that the Defendant cannot succeed upon the defence relied upon in the terms of the notice pursuant to Part 5, Rule 5B of the Supreme Court Rules. 43 In my conclusion the Third Plaintiff has established her entitlement to receive one half of the estate of the Deceased upon the intestacy of her late husband. 44 It follows, therefore, that I should make a declaration of the nature sought in prayer 2 in the amended summons. 45 It must be appreciated that this is a very small estate. At the time of the grant of probate, one half of the net assets totalled less than $16,000. 46 The amended summons seeks an order for the taking of an account of all moneys received and disbursed by the Defendant in respect to the estate of the Deceased and the dealings and transactions of the Defendant therewith (prayer 3), an order that an inquiry be held as to whether any, and if so what, property being part of the estate of the Deceased has been lost or misappropriated and when and by whom and under what circumstance (prayer 4); and an order that the Defendant pay to the First and Second Plaintiffs or to the Third Plaintiff (as applicable) the amount, if any, which shall be found to be due to them or her upon the taking of accounts, together with interest thereon (prayer 5). 47 It does not seem to me, in the circumstances of this case, especially the very small monetary value of the estate, to be appropriate that an order should be made for the taking of accounts, or for an inquiry of the nature sought in prayers 3 and 4 in the amended summons. That relief amounts almost to relief in the nature of an order for the general administration of the estate. Such relief seems to me to be out of all proportion to the extremely small size of the estate. 48 I consider that the Third Plaintiff is entitled to an order that the Defendant pay to her the sum of $15,548, together with interest thereon at Supreme Court rates from the date of death of the Deceased until payment. (The sum of $15,548 is the sum which the Defendant in her application for probate disclosed as being the total of the two shares (each of two eighths of the estate) due to Gregory and Leanne.) 49 It is appropriate that liberty to apply in respect to the enforcement and implementation of that order should be reserved. 50 The Third Plaintiff is entitled to an order that her costs be paid personally by the Defendant. Since it was the conduct of the Defendant herself, in filing a misleading statement in support of the application for probate, which largely brought about the situation where the First and Second Plaintiffs became parties to the proceedings, and since the Defendant did not choose to swear an affidavit in the matter, and did not attempt in any way to defend the proceedings upon their merits but to oppose (as she was undoubtedly entitled to do) the relief claimed upon only the asserted extinguishment of the entitlement of the Third Plaintiff in consequence of the provisions of Section 47 of the Limitation Act, I consider it appropriate that the Defendant personally should pay the costs of the First and Second Plaintiffs as well. 51 Accordingly, I make the following orders: 1. I declare that the Defendant has at all times since 7 July 1986 held one half of the assets of the estate of the late John Smith ("the Deceased") in trust for the Third Plaintiff, Clare Georgina Burnett. 2. I order that the Defendant pay to the Third Plaintiff the sum of $15,548, representing one half of the assets of the estate of the Deceased, together with interest upon such sum from 7 July 1986 until the payment of such sum, such interest to be at Supreme Court rates. 3. I reserve to the Plaintiff liberty to apply in respect to the implementation and enforcement of Order 2 hereof. 4. I order that the Defendant personally pay the costs of the Plaintiffs of the proceedings, and that the Defendant not be entitled to have recourse to the assets of the estate of the Deceased for such purpose.

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