Plaintiffs v Defendant

23 August 2010 and 22 December 2010 and two affidavits of David Anthony Connolly solicitor each sworn on 9 February 2011. The first plaintiff, Kerry Patrick Foley as executor for the estate of David Ian Green, opposes the application and relies on his affidavit sworn on 7 February 2011.

2 The Victorian proceeding was commenced as an application for a grant of probate of the last will of David Ian Green. David Ian Green ("the deceased") died on 3 September 2009. At the time of his death he was domiciled in Victoria. The last will of the deceased ("the will") was made on 25 February 2003 in Queensland.[1]

3 The plaintiffs, Kerry Patrick Foley and John Rider, are the substitute executors named in the will, the instituted executrix Glenda Mildred Green having predeceased the deceased. The plaintiffs obtained a grant of probate from the Court on 18 December 2009.

4 Mr Green is the twin brother of the deceased. By summons filed on 10 June 2010, Mr Green in the Victorian proceeding made application to this Court to revoke the grant of probate of the will on the grounds that the deceased did not know and approve of the contents of the will and/or that he lacked testamentary capacity at the time he made the will.

5 In November 2010 Mr Green commenced a proceeding in the Supreme Court of Queensland (the Queensland proceeding).[2] In the Queensland proceeding Mr Green alleges that in or about 1981 there was an oral agreement made between himself and the deceased that in lieu of Mr Green sharing with the deceased the profits of future developments conducted by the deceased and in return for utilising Mr Green's "labour, skills, experience and resources" in existing and future developments, the deceased would give to Mr Green all of the deceased's right title and interest in any real property and in any business or commercial entities the deceased owned at the time of his death ("the assets").[3]

6 It is further alleged by Mr Green in the Queensland proceeding that from 1981 until 2009, pursuant to the agreement, Mr Green provided the deceased with the assistance he sought in respect of each of the deceased's properties and that contrary to, and in breach of, the agreement the deceased failed to leave the assets to Mr Green in the will.

7 Mr Green further alleges that the plaintiffs improperly sold two of the estate's Queensland properties. Mr Green lodged caveats preventing completion of the sale of those properties and the purchasers under those contracts have been joined as defendants to the Queensland proceeding. Mr Green alleges that the purchasers take their interest in the properties subject to his prior interest. The plaintiffs have counterclaimed in the Queensland proceeding for damages arising out of the alleged improper lodgement of caveats that has delayed the completion of the sale of the two properties.

8 In the circumstances it is alleged that the deceased held the assets on trust for the benefit of Mr Green prior to his death. It is alleged that, as a consequence, the executors of the estate hold the assets in trust for Mr Green.

9 Since the grant of probate was obtained, the executors have disagreed on matters concerning the administration of the deceased's estate and the first plaintiff applied for an order from the Court that the second plaintiff be removed as an executor and trustee of the deceased's estate.[4]

10 On 15 December 2010, the first plaintiff was authorised by the Court to conduct on behalf of the estate the Victorian proceeding and Queensland proceeding as if he were the sole executor of the estate.[5]

The Jurisdiction of Courts (Cross-Vesting) Act

11 Section 5(2)(b)(i) and section 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) ("the Act") provide:

5.(2) Where -

(a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court (in this subsection referred to as the first court); and

(b) it appears to the first court that -

(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of another State or of a Territory and it is more appropriate that the relevant proceeding be determined by that other Supreme Court;

(ii) ...

(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory -

the first court shall transfer the relevant proceeding to that other Supreme Court.

12 In BHP Billiton Ltd v Schultz,[6] Gleeson CJ, McHugh and Heydon JJ said in relation to s 5 of the Act:

[T]he Court is required by statute to ensure that cases are heard in the forum dictated by the interests of justice. ... There is a statutory requirement to exercise the power of transfer whenever it appears that it is in the interests of justice that it should be exercised. It is not necessary that it should appear that the first court is a "clearly inappropriate" forum. It is both necessary and sufficient that, in the interests of justice, the second court is more appropriate.

...

The interests of justice are not the same as the interests of one party, and there may be interests wider than those of either party to be considered. Even so, the interests of the respective parties, which might in some respects be common (as, for example, cost and efficiency), and in other respects conflicting, will arise for consideration. The justice referred to in s 5 is not disembodied, or divorced from practical reality.

...

In many cases, there will be such a preponderance of connecting factors with one forum that it can readily be identified as the most appropriate, or natural, forum. In other cases, there might be significant connecting factors with each of two different forums. Some of the factors might cancel each other out. If the action is between two individuals, and the plaintiff resides in one law area and the defendant in another, there may be no reason to treat the residence of either party as determinative, although, as already noted, it will ordinarily be the residence of the defendant that is important to establish jurisdiction. Weighing considerations of cost, expense, and convenience, even when they conflict, is a familiar aspect of the kind of case management involved in many cross-vesting applications.[7]

13 In BHP Billiton Ltd v Schultz, Gummow J said in relation to sub-paragraph (iii) of s 5(2)(b) of the Act:

The phrase "otherwise in the interests of justice" in sub para (iii) of s 5(2)(b) of the Cross-Vesting Act requires the Supreme Court to determine a transfer application by identifying the more appropriate forum without any specific emphasis in favour of the choice of forum made by the plaintiff.[8]

14 In discussing the connecting factors in Mcleod v Munro,[9] Dodds-Streeton J said:

There can be no exhaustive or prescriptive statement of what they are, but principal relevant factors which are constantly recognised as legitimate and central are: first, the governing law of any agreement in dispute; secondly, the connection between the alleged conduct and the jurisdiction (for example, where the alleged wrong was committed); and thirdly, issues of cost and convenience to the parties, such as a consideration of the place where the witnesses and parties reside and carry on business, and the like.[10]

Is the Victorian proceeding related to the Queensland proceeding?

15 Senior counsel for Mr Green submitted that the Victorian proceeding is related to the Queensland proceeding and it is more appropriate that the Victorian proceeding be determined by the Supreme Court of Queensland, thereby satisfying the requirements of s 5(2)(b)(i) of the Act; and that it is otherwise in the interests of justice that the Victorian proceeding be determined by the Queensland Supreme Court thereby satisfying the requirements of s 5(2)(b)(iii) of the Act.

16 For the purposes of s 5(2)(b)(i) the applicant must satisfy the threshold requirement that the Victorian proceeding arises out of or is related to the Queensland proceeding. Senior counsel for Mr Green submitted that the Victorian proceeding is "related to" the Queensland proceeding in substance because the subject matter of the Victorian proceeding, which concerns whether the deceased had testamentary capacity or was unduly influenced at the time he made his will in 2003, is one of the issues requiring determination in the Queensland proceeding. Further, it was submitted that both proceedings relate to the disposition by the deceased of his real property and business assets which are located predominantly in Queensland.

17 The meaning of "related to" in s (5)(1)(b)(i) of the Act was considered in

Re Hamilton-Irvine.[11] Beaumont J found that a proceeding in the Family Court seeking orders with respect to the property interests of the parties to a marriage was not related to a proceeding in the Supreme Court of Norfolk Island commenced by one of the parties under s 282 of the Companies Act 1985 (Nfk Is) for leave to be appointed director and secretary of the company. The proceedings did not have the "requisite nexus or association" and were therefore not related.

18 In Mattock v Mattock McLelland J in this context found that two proceedings were related because "a substantial and common question" arose in both proceedings.[12]

19 Counsel for the estate submitted that the Victorian proceeding is not related to the Queensland proceeding. In essence, it was submitted that the issues in the Victorian proceeding will determine the validity of the last will of the deceased; as to who administers the deceased's estate; who are the beneficiaries of the deceased's estate and whether the grant of probate should be revoked; that the evidence in the Victorian proceeding will relate to events, facts and matters in the immediate period leading up to the execution of the will on 25 February 2003 relevant to the question as to whether the deceased possessed testamentary capacity or whether he knew and approved the contents of the will at the relevant time.

20 Further, counsel for the estate submitted in essence that the Queensland proceeding involves a factual inquiry which does not depend on facts or circumstances in issue in the Victorian proceeding or vice versa, and that if Mr Green in the Queensland proceeding establishes that the deceased held the assets on trust for the benefit of Mr Green prior to his death pursuant to an agreement made in 1981 and conduct between 1981 and 2009, it would not matter whether or not the will is valid because Mr Green would be entitled to the assets in any event. It was submitted that the alleged trust would overlay all of the issues in the Victorian proceeding and that the issues in the Queensland proceeding have no bearing on the validity of the will.

21 In my view, these submissions overstate the position. The facts and circumstances in the two proceedings do appear to be intertwined. In its Amended Statement of Claim in the Queensland proceeding the plaintiff puts squarely in issue the factual issues which are to be determined in the Victorian proceeding and upon which the validity of the will depends. It is alleged that at the time the deceased made the will he lacked testamentary capacity, alternatively that the will was not his document as he was unduly and unfairly influenced to make the will in its terms by his then wife.[13] In the particulars to that allegation Mr Green incorporates by reference, the pleadings and supporting documents filed in the Victorian proceeding.

22 In its Defence to the Amended Statement of Claim in the Queensland proceeding the estate denies the allegation that the deceased lacked testamentary capacity and further says that those allegations are in any event irrelevant to the relief claimed by the plaintiff. Counsel for the estate, during argument, drew my attention to the fact that there is no relief sought in the Queensland proceeding directed to the validity of the will. It is correct to say that the plaintiff in the Queensland proceeding does not in terms seek an order or declaration as to the validity of the will. However, in my view, it does not follow that the allegations that the deceased lacked testamentary capacity or that he was unduly influenced are spurious or irrelevant to the relief claimed by Mr Green. For example if it were found in the Queensland proceeding that the deceased did not have testamentary capacity at the time he made the will, then the fact of the making of the will would be disregarded in the consideration of any conduct subsequent to the making of the alleged 1981 agreement. Such conduct might otherwise bear negatively on the question as to whether an agreement had been made. This may prove to be material because the deceased made an earlier will in 2002 which (though revoked upon the deceased's subsequent marriage) is arguably consistent with the alleged 1981 agreement.[14] This might bear positively on the question as to whether an agreement had been made.

23 I am satisfied that there is an overlap of substance on the issues which require determination in the Victorian proceeding and the issues which require determination in the Queensland proceeding. Furthermore, at a fundamental level, each proceeding concerns the ascertainment of the true intentions of the testator with respect to the disposition of certain property upon his death. In effect, Mr Green's position is that with respect to the assets the testator's intentions were manifested when his brother agreed to give him the assets upon his death pursuant to the alleged 1981 agreement and by subsequent conduct. In effect the estate's position is that the testator's intentions with respect to the assets are reflected in the will.

24 It follows, in my view, that there is both a "nexus or association" and a "substantial and common question". Accordingly, I am satisfied that the Victorian proceeding is related to the Queensland proceeding for the purposes of the Act.

Is it more appropriate or otherwise in the interests of justice that the Victorian proceeding be transferred to the Queensland Supreme Court?

25 I now consider whether it is more appropriate for the purposes of s 5(2)(b)(i) or otherwise in the interests of justice for the purposes of s 5(2)(b)(iii) that the Victorian proceeding be determined by the Queensland Supreme Court. If so, the Court is obliged to transfer the Victorian proceeding to the Queensland Supreme Court.[15]

26 Determining which court, in the interests of justice, is the more appropriate to hear and determine the substantive dispute, is a pragmatic task described by Street CJ in Bankinvest AG v Seabrook as a "nuts and bolts" management decision. [16]

27 Factors put forward by the defendant which make it more appropriate to hear and determine the litigation in the Queensland Supreme Court may be summarised as follows.

28 The Victorian proceeding has 12 witnesses for the estate, nine of whom reside in Victoria. Of those 12, nine are lay witnesses, seven of whom are relatives of the deceased's wife, Glenda Green. Most of the lay witnesses are retirees and would not therefore need to take time away from employment. One lay witness, Glenda Green's sister, resides in New South Wales. It was submitted by senior counsel for Mr Green that the main contentious and most expensive witnesses, being Dr John Slaughter, a psychiatrist, and Ms Lara Dawson, the solicitor who prepared and supervised the execution of the will, are from Queensland.[17] It was submitted that these professional witnesses will be tested heavily in cross-examination which will require their attendance at court on a number of days. The accommodation expenses required for professional witnesses in Victoria would, it was submitted, be greater than if the hearing was in Queensland, after making due allowance for the expenses of the lay witnesses from Victoria who would need to be accommodated for up to one day each. In addition, it was submitted that the witness expenses for lay witnesses will be much less than for the professional witnesses. Further it was submitted that other professional witnesses are likely to be called for the defendant, namely Dr Frank Walsh and Dr Andrew McAlister who both reside in Queensland.[18]

29 There was no evidence before me of the estimated comparative costs of the lay and professional witnesses. However, I am prepared to infer that the costs involved in bringing four professional witnesses to Victoria and in the process absenting them from their places of employment or professional rooms in Queensland will be substantial and is likely to outweigh the costs of the lay witnesses in this case.

30 In addition, the defendant Mr Green resides in Queensland as does the second plaintiff and co-executor of the estate John Rider. The executors are joined as defendants in the Queensland proceedings arising from the alleged sale for undervalue of two of the Queensland properties.[19] It will therefore be necessary for them to attend court in Queensland to give evidence in relation to this issue. There is no evidence to suggest any particular inconvenience would be suffered by any of the witnesses in the Victorian proceeding if they were required to attend court in Queensland. It seems to me that considerations of cost and the convenience of witnesses overall, and in particular the four professional witnesses from Queensland, favours a hearing in Queensland.

31 Further, senior counsel for Mr Green submitted that if these issues are litigated in separate courts, there could be inconsistent findings of fact as to the testamentary capacity of the deceased and whether there was undue influence concerning the will and estoppel issues may arise. This is self evidently so and is a compelling reason for the issues to be heard and determined in the same court.

32 Most of the real property in the estate and in question in the Queensland proceeding is located in Queensland. The inventory of assets discloses that the Victorian assets comprise one item of real property and its contents valued at $1,231,953 and the Queensland assets comprise nine items of real property valued at $8,765,000 and personal property slightly in excess of $1,000,000. For the reasons previously expressed, in my view the proceedings should be heard and determined in the same court. In the circumstances of this case, where there is the alleged improper lodgement of caveats over two of the Queensland properties and the sale of those properties by the executors allegedly at an undervalue, the more appropriate court for the resolution of all matters is the Queensland Supreme Court.

33 Counsel for the estate submitted that save for the cross-vesting legislation the Supreme Court of Queensland has no jurisdiction to revoke a Victorian grant of probate and that the Supreme Court of Victoria should retain control of its own orders and processes. As I understood this submission, counsel for the estate was not disputing that the Supreme Court of Queensland would have jurisdiction to deal with the matter, rather that it would be preferable for the Victoria Supreme Court to retain control of it. There was no authority cited to the effect that the Supreme Court of Queensland would have no jurisdiction if the Victorian proceeding were transferred to the Queensland Supreme Court pursuant to the Act.[20] Senior counsel for Mr Green submitted, in my view correctly, that jurisdiction is conferred by s 4 of the Act which provides for vesting of additional jurisdiction in certain courts. Section 4(3) provides that the Supreme Court of another State or of a Territory has, and may, exercise original and appellate jurisdiction with respect to State matters.

34 Further, counsel for the estate submitted that the outcome of one proceeding is not dependent on the outcome of the other proceeding. I accept that the proceedings are not interdependent. However, for the reasons given above, in my view the proceedings are intertwined on some issues and it is desirable that those issues are heard and determined by the same court.

35 Counsel for the estate also submitted that there would be significant parts of the trial of the Victorian proceeding that would not concern the parties in the Queensland proceeding, thereby adding unnecessary time and expense to the trial. In my view, this need not be the consequence. Sound case management prior to the trial of both proceedings and co-operation between the parties should ensure that there is no unnecessary time added or expense incurred. On the contrary, there is potential for saving of costs overall. It may be possible for evidence in one proceeding to stand as evidence in the other or for each proceeding to be heard and determined by the same Judge at the same time. Parties may not be required to attend court for the whole of the proceeding. These matters can be addressed in pre-trial directions.

36 The will was made in Southport in Queensland at a time when the testator resided in Queensland. If there was any undue influence when the will was made it would have occurred in Queensland. This in my view is a significant factor connecting the Victorian proceeding with Queensland. It was not submitted and there is no reason to suppose the Supreme Court of Queensland would be less able to assess whether the deceased had testamentary capacity or was subjected to undue influence at the time he made the will.

37 Aside from the issue of whether the proceedings are related, in my view for the reasons already expressed, it is more appropriate and in the interests of justice that the Victorian proceeding be determined by the Supreme Court of Queensland. In the circumstances the Victorian proceeding shall be transferred to the Supreme Court of Queensland.

38 I will leave it to counsel to formulate appropriate orders.

[1] Affidavit of Lara Marie Dawson sworn 3 November 2010 [17]-[33] and "Exhibit LMD8" thereto.

[2] Supreme Court of Queensland Proceeding No. 12342 of 2010.

[3] Amended Statement of Claim in Queensland Proceeding [4].

[4] Supreme Court of Victoria Proceeding No. S CI 06614 of 2010.

[5] Orders of Macaulay J made on 15 December 2010.

[6] [2004] HCA 61; (2004) 221 CLR 400.

[9] [2005] VSC 375.

[11] (1990) 94 ALR 428, 433 applied in Leithead v Leithead (1991) 109 FLR 177 and Hoddell v Hoddell Pty Ltd [1999] WAFC 156, 9; cited with approval in Armstrong v Armstrong [2004] WASC 121, [49]-[56].

[12] (1989) 13 Fam LR 288, 290.

[13] Amended Statement of Claim in the Queensland Proceeding [1](d).

[14] Affidavit of John Cresswell Green sworn 22 December 2010 [4].

[15] BHP Billiton Ltd v Schultz [2004] HCA 61; (2004) 221 CLR 400, 421.

[16] (1988) 14 NSWLR 711, 713-714.

[17] Applicant's Outline of Argument [8]; Affidavit of Lara Marie Dawson sworn 3 November 2010 [17]-[33].

[18] Applicant's Outline of Argument [14].

[19] Amended Statement of Claim in Queensland Proceeding [15]; Applicant's Outline of Argument [12].

[20] Reference was made to discussion in LexisNexis Butterworths, Civil Procedure Victoria, vol 2 (at 246) [III 11.01] but this was not decisive on the question in the current context.