Plaintiffs v Defendant

Supreme Court of Victoria|2014-05-23|Before: McMillan J

WILLS AND ESTATES - Preliminary question - Whether option in a will was exercised - No point of principle

1 James Thomas Fanning ('the deceased' or 'father') died on 24 December 1977. Probate of his will dated 9 August 1974 was granted to his widow, Margaret Mary Fanning ('Mrs Fanning' or 'mother'), and his son, Bernard James Fanning ('Bernard' or 'the defendant'), on 4 December 1978. Mrs Fanning survived the deceased by some 33 years. She died on 12 March 2011. The deceased and Mrs Fanning had seven children, being Bernard, the two plaintiffs, Geoffrey Fanning ('Geoffrey') and Carmel Kinnersley, John Fanning ('John') and Denis Fanning, both of whom survived the deceased but are now dead, Patricia Shallue ('Mrs Shallue') and Christine Palmer.

2 The deceased's estate at the date of his death comprised various parcels of land being a farming property at Wooragee near Beechworth in Victoria valued at $62,000 by the executors, sundry furniture valued at $500 and a life insurance policy of $6,297. The deceased's liabilities were $2,412.88.

3 The deceased's will contained the following gifts:

I GIVE DEVISE AND BEQUEATH the whole of my real and personal estate whatsoever and wheresoever unto my wife Margaret Mary Fanning for her lifetime and on her death upon the following trusts:-

...

As to my land being parts of Allotment One Section C ... known as 'Hines' to offer the same to my said son John Fanning at accepted Probate valuation to be purchased or refused by him within three months of the grant of Probate of my will and if refused or not purchased within that time for my son DENIS FANNING absolutely.
As to my land being the remaining part of the said Allotment Three South East... to offer the same to my said son Bernard James Fanning on the same conditions as prescribed in Clause 3 hereof and if not so purchased by him for my son GEOFFREY FANNING absolutely.
As to my land being part of Allotment Two Section C... to offer the same to my said son John Fanning on the same conditions as prescribed in clause 3 hereof and if not so purchased for my daughter PATRICIA SHALLUE absolutely.
As to my land being part of Allotment One Section A... known as 'Milnes' to offer the same to my said son Bernard James Fanning on the same conditions as prescribed in Clause 3 hereof and if it is not so purchased for my said daughter PATRICIA SHALLUE absolutely.
As to the balance of my land being Allotments Five and Nine of Section A ... to offer the same to my said son Bernard James Fanning on the same conditions as prescribed in Clause 3 hereof and if it is not so purchased for my daughters Carmel and Christine in equal shares.
As to the rest and residue of my estate to pay thereout all my just debts, funeral and testamentary expenses and ... to divide the same in equal shares among all of my children PROVIDED ALWAYS that if my said residuary estate shall be insufficient to meet the items mentioned in clause 8 hereof then each beneficiary under my will shall contribute to such deficiency in proportion to the share received by him or her under my said will.

4 In this proceeding, Bernard contends that he exercised the option to purchase the land referred to in clauses 4, 6 and 7 of the will ('the land') and that, in accordance with the terms of the option, he paid for the land within three months of the grant of probate of the deceased's will, that is, by 4 March 1979.

5 The plaintiffs dispute these contentions and say that no money was paid for the land to the estate of the deceased within three months of the date of the grant of probate of the will. In support of their case, they point to a lack of contemporaneous documentary evidence that Bernard purchased the land, and that:

(a) Geoffrey, together with Bernard, built a shed in early 1992 on part of the land that he says was always to be his land. At the time the shed was built, Bernard said nothing to him about having exercised the option under the will or having paid for the land within three months of the grant of probate of the will;

(b) the first time they heard that Bernard had provided some money, or paid money, to Mrs Fanning to purchase of the land under the will was after Mrs Fanning died in March 2011; and

6 By consent, the parties agreed that the following preliminary question should be determined by the Court:

Did Bernard Fanning purchase any part or all of the land referred to in clauses 4, 6 and 7 of the will of the deceased dated 9 August 1974 in the manner required by the terms of the deceased's will.

7 In the event that it was determined that Bernard did not purchase the land, the plaintiffs sought a declaration that Bernard (personally) holds the said land upon trust for the estate of the deceased. They also sought orders and directions as to the appropriate remedy.

8 At the commencement of the hearing, the parties agreed that the interests under the deceased's will (whether by way of residue or specific devises) fell into possession on the death of Mrs Fanning in March 2011 and that, in any event, s 21(1) of the Limitations of Action Act 1958 provides that no period of limitation shall apply to an action by a beneficiary under a trust to recover, inter alia, trust property from a trustee.

9 In support of their position, the plaintiffs relied on two affidavits, the first being the affidavit of the first plaintiff, Geoffrey, sworn 6 September 2013 and an affidavit of the plaintiffs' solicitor, Robert Martin Phelan, sworn 2 April 2014 as well as the vive voce evidence of Geoffrey and Mrs Shallue.

10 In support of his position, Bernard relied on two affidavits sworn by him on 31 October 2013 ('his first affidavit') and 16 April 2014 ('his second affidavit') as well as his vive voce evidence.

The alleged exercise of the option under the will by Bernard

11 In his first affidavit, Bernard deposed as follows:

(a) Shortly after the death of the deceased, he was approached by his mother to exercise the option to purchase the land under the will and he proceeded to do so. He said that the accepted probate valuation in the probate duty return and inventory of assets of the deceased was $62,000. That value was not queried by the Probate Duties Office or the Office of the Registrar of Probates. He recalls that he paid that amount in the form of two cheques: one for $20,000 or thereabouts drawn on his own account and another cheque for $42,000 or thereabouts.

(b) The amount of $20,000 was held by his mother on fixed deposit during her lifetime and re-invested by her. His sister, Mrs Shallue, was involved in that investment as the attorney under power for their mother;

(c) He drew a cheque for $62,000 and paid it to the estate of JT Fanning. The cheque for $62,000 was from the Sandhurst Trustee passbook and he arranged for a bank cheque in that regard to be paid into the estate.

(d) The amount of $62,000 paid by him was paid in two amounts. One amount of $20,000 or thereabouts which appears and continued in the estate of Mrs Fanning and the balance of the funds were similarly held on trust and used for Mrs Fanning's benefit and support during her lifetime.

(e) He also specifically recalled that, shortly after the death of his father, he provided two cheques that totalled the amount of $62,000 in the exercise of his rights to purchase the land under the terms of the will. He recalled specifically he had the amount of $20,000 or thereabouts on hand but that he had to make arrangements to borrow the balance of $42,000.

12 In his second affidavit, Bernard Fanning deposed as follows:

(a) He paid his mother on behalf of the estate the amount of $42,000, which together with the $20,000 which was paid at the same time for the amount shown in the inventory of assets of the estate the value of 'the total real estate'. He said the records of the payment of the $42,000 and its investment were not among his mother's papers given to him when she died and, similarly, in respect of the $20,000. He also recalls that when his mother moved into a unit in Beechworth, she had a clean-out of her records.

(b) He borrowed the amount of $42,000 to pay his mother in exercise of the option. He has checked his financial records and has not been able to locate any direct records of such borrowing.

(c) Shortly before the death of the deceased he borrowed funds on his home at Railway Avenue, Beechworth but he has no records of the mortgage other than its registration against the title to the property. He said his recollection is that he did extend his borrowings against his house to pay out the amount of $42,000. He has some bank statements for the months of July 1989 to June 1990 from the National Bank that disclose loan repayments and a taxation return of 1994.

(d) He paid the amount of $42,000 to his mother at the same time as he paid the $20,000 in exercise of his rights to purchase under the will. When the health of his mother deteriorated, she required admission to care. In 2008 or thereabouts she returned 'that amount' to him and he placed it in the Sandhurst Trustees common fund account and used it as required for his mother's expenses, outgoings and accommodation. From that same account, he subsequently 'paid the $62,000'.

13 In cross-examination, in relation to his evidence that he paid the sum in two cheques - one for $20,000 and one for $42,000 - to his mother in exercise of the option to purchase under the will, Bernard was initially unable to say when he wrote out the cheque for $20,000. He then said that he handed over both cheques to his mother in either in late 1978 or early 1979 at the office of, and in the presence of, his solicitor Mr David McKenzie-McHarg, who is now deceased. He could not provide an explanation as to where that money would be because his mother ran her own business.

14 Bernard agreed that any money paid for the purchase of the land should have been invested so that the interest could be paid to his mother in accordance with the will. He insisted that this was what ultimately happened with the deposit of $20,000. He said he could not answer the question about the amount of $42,000 but agreed that, if it had been paid, this is what would have happened to it. He also agreed there was 'obviously' no evidence before the Court that showed the existence of another account with $42,000, or indeed anything like it, but continued to insist that the money had been paid.

15 The solicitor's file for the estate of the deceased has been produced in this proceeding. The file contains a handwritten trust account ledger card for the estate for the period Jan to March 1979 leaving a nil balance on 20 March 1979. The ledger card shows receipt of estate assets being life policies and payment of estate expenses. The sum of $4,048.23 was paid to the executors of the estate on 16 March 1979. The solicitor's trust account ledger card has not record of the sum of $62,000 having been paid into the trust account.

The evidence of Bernard's assets and income in 1979

16 In 1979, Bernard was about 36 years old, and said that he was married with three or four children and was working as a kitchen hand at Mayday Hills in Beechworth. In 1969, he had borrowed money from the bank and bought a house. He agreed the house probably cost him about $10,000.[1] The house was still mortgaged when his father died in 1978 and he was still paying off that mortgage. He said he did not have a clue what his wages were in those days but if the average weekly wage in Australia in 1979 was $220 per week,[2] he possibly earned that. He described himself and his wife as good savers.

17 At the time of his father's death, he also had his own farm property, leased three other farm properties and worked part-time as a contract wool classer. His own farm was given to him by his father as a gift prior to 1979. The land was known as 'Dan's Farm' and was originally part of the Fanning farm. He thought that it was given to him some time in the 1960s but admitted he would not really 'have a clue' about that.

18 He was taken to a 1994 tax return for the partnership of himself and his wife which showed the partnership had a taxable income in the order of $20,000. He said the tax return was the best documentation he could produce and he could not go back as far as 1979 to demonstrate what his overall financial position might have been. The tax return showed that his wife obtained of $40,000 loan in June 1984. Bernard said this 'was for the estate'. He explained that, in 1979, he and his wife had borrowed money from the CBC Bank. That bank was then taken over in 1984 by the National Bank which, in turn, took over the CBC loan. He agreed that the tax return had a note on it to say the loan was obtained in June 1984 by his wife but said that it was a joint loan and was the loan rolled over from the CBC bank. He said that the funds of $42,000 paid to his mother in 1979 were borrowed from the CBC Bank by the partnership.

19 Bernard was taken to his second affidavit where he said he did borrow funds on his home shortly before the death of my father. He now says this is incorrect because he and his wife borrowed it as a partnership. This was because although the 1994 tax return recorded that his wife borrowed the money, it was really borrowed by both of them with the loan in his wife's name and recorded on the partnership loan account. When he said in his second affidavit that he borrowed funds on his home, he did not say anything about he or his wife or a partnership extending an existing loan or rolling over a loan. When questioned further on this version of events, Bernard declared that 'all I know is that I borrowed the money and paid for it'.

20 He agreed there was nothing amongst his mother's records that demonstrated that there was an account of $42,000 anywhere and he has not produced any documents to that effect. He said he was not able to produce any mortgage document for the loan and all he could produce was his 1994 tax return, which he has done. He said he did not produce any documents from the tax office which showed money invested in his mother's name and he did not make any inquiries of the tax office.

21 Geoffrey said that as far as he could remember there was a piece of the land known as 'the back block' that was to 'go to him' under the will. This had always been his impression because his father had said to him that, after his death and the death of his mother, the back block would be his block of land. He said this was discussed many times with Bernard. Bernard did not ever discuss with him or say to him that he had bought the land.

22 In early 1992, he built a small farm shed for storage on the back block and in partnership with Bernard. By 'in partnership' he meant that they worked together on the shed, such as they decided where the shed would be built and where he would eventually build a house on the land. He and Bernard also went to Yackandandah Welders to arrange plans for the shed and arranged for the power to be put onto the land. Bernard organised for a contractor to put in the footings and he gave Geoffrey a hand in building the shed.

23 In his second affidavit, Bernard said he visited his solicitor with his mother on 5 March 1992 because Geoffrey had started to build a shed on part of the land for which Geoffrey had no claim under the will and this was without Bernard's consultation, advice or consent. He said that at that meeting, it was agreed that during his mother's lifetime, he would excise the parcel of land where Geoffrey had built the shed, and attempt to value the rest of the estate land proportionately on an acreage basis. He then said that this arrangement 'did not proceed' after he and Mrs Fanning had further discussions.

24 The solicitor's file note of the meeting was in evidence. It records that Bernard and Mrs Fanning met with the solicitor for about an hour that day. It records as follows:

Bernie see his bank manager to raise money to pay out his bros and sisters.
Trouble longer things left bec. valuations 1978 & best done while Mrs F alive.
Value worked on an acreage basis if Geoff takes out his block.

25 Bernard Fanning was also taken to three term deposit statements from the National Bank for the period from June to September 1991. Mrs Shallue gave evidence that she made a copy of one of these documents that she put in the box of documents she gave to Bernard Fanning after their mother died. She said she had not seen the other two statements previously. Bernard said the first time he saw these documents was in court. This was so notwithstanding that they were exhibited to his second affidavit. He said the documents would have come out of the box of documents given to him by Mrs Shallue. Bernard later retracted his initial account, and said that the first time he saw the statements was at his solicitor's office. He said that it was not true when he said he had seen them for the first time in court.

26 The National Bank term deposit statements were addressed to roadside mailbox number 1171, Wooragee and Bernard agreed that this his postal address in 1991. He also agreed that one of the statements was addressed to him and records the deposit as being in his name as executor of the deceased's estate acting as trustee for Mrs Shallue.

27 Bernard was taken to a copy receipt from the National Australia Bank dated 11 September 1991, addressed to him as the executor of the estate of the deceased. The receipt refers to a term deposit of $19,305.78. The National Bank receipt records that the deposit was originally lodged at the National Bank on 23 June 1988. Bernard said this is not an accurate reflection of the creation of that term deposit but did not say why that was so. He said that any documents concerning the creation of the term deposit were with his mother and not with him.

28 The National Bank receipt is headed 'BF FANNING AS EXECUTOR OF THE JT FANNING ESTATE ACTING AS TRUSTEE FOR MRS PATRICIA SHALLUE'. Bernard Fanning cannot explain what the heading on the document means and has no idea as to whether this represented the proceeds of sale of land that would be held and paid to Mrs Shallue on the death of her mother.

29 He denied that the National Bank receipt was in his possession and said it came from the box of documents given to him by Mrs Shallue after his mother died. He also said he relies on the National Bank receipt for the deposit of the funds as some evidence of payment by him for the land under the will. He said that all he knows is that he gave the money to his mother and he does not know how it got into the name of Mrs Shallue.

30 The solicitor's file has a typed 'memo for file' dated 19 September 1991. It records that Bernard attended on the writer of the file note for one hour. It read:

We went through the estate with him. We did not track down exactly what this money of Pat Shallue's is all about. We also discussed his Will and the time-share Unit he purchased. He will arrange an appointment to come in with his mother. I showed him where land had been transferred to him and to his brother and then transferred back. We discussed the option. I advised that he should get that option arrangement in writing between himself and his sisters. Bernie said I should check that with Dave. I said that I would do that.

31 He agreed the National Bank received the sum of $19,305 on 11 September 1991 to invest on term deposit and that after 1991 'it stayed in the investment'. He then said the money remained with the National Bank for a period of time and it was converted over to a term deposit in September 2002 with the Bendigo Bank. He said these funds were now with his solicitor in a fixed term deposit in the name of the estate of the deceased.

32 Bernard was taken to a Bendigo Bank term deposit account in the name of the estate of the deceased. He said he has been in possession of the account book since the deposit commenced in September 2002. The account was part of his mother's life interest in the estate of the deceased. He agreed that the interest payable on the Bendigo Bank term deposit was paid into his mother's pensioner security account but did not have any other idea and has never handled his mother's books.

33 Bernard agreed that his mother's pensioner security account was in her name and that her pension and interest from the deposit with the Bendigo Bank was paid into that account and it was the account from which his mother paid her bills. Bernard Fanning said he received the pensioner's security account documents from Mrs Shallue after the death of his mother when she handed him a box containing his mother's papers.

34 Bernard Fanning was taken to three documents from Centrelink in 2010. On each document, there was a record of his mother's total assets and annual income. In May and June 2010, total assets were recorded as being $6,344 and income is recorded as $190. In October 2010, total assets were $18,742 and income was $502. Bernard said he did not have a clue what those assets might be and he had no idea where those figures came from. This was because he did not go anywhere near his mother's books and did not manage any money on her behalf. He said he managed the payment of his mother's bills after she moved into a hostel in September 2010.

35 He agreed that if there were $42,000 sitting in a bank account then there would be more income paid to his mother and there is no such income in her bank statements.

36 He said that before his mother died, he collected some documents from her, such as her IOOF shares and her life insurance policy. She would leave the documents on her kitchen table. He never collected any documents from Centrelink or the bank from his mother.

37 Bernard said he was present with Mrs Shallue on the occasion when his mother was moving into the hostel in Beechworth. He agreed that, at that time, there was a conversation with a lady from the hostel about his mother's financial position. He remembers that the lady was interested in how much money his mother was making so she could calculate the bond and daily fee arrangements for her. In response to the lady's questions about his mother's assets, he told her that his mother had no land and no money. He agreed he did not say anything to the lady about his mother having $42,000 on deposit somewhere earning interest because all he wanted to do was to get her into the hostel. He said he did not deliberately lie to the lady and he 'would not be the first one to do so'. He agreed that he did not say anything about any interest coming in for his mother but said she 'has got nothing' because he thought it was the easiest way out.

38 Bernard was not aware whether the estate was filing income tax returns in 2010 because he says 'I can't answer for my mother'. He said, as an executor, he did not file tax returns for the estate. It was put to him that if there were $62,000 rather than $20,000 invested for the estate, he would have to turn his mind as to whether tax should be paid. He answered that he 'was not responsible for my mother's books and I can't answer for my mother'.

Bernard's evidence that the money was paid back to him

39 Bernard said that sometime after his mother moved into the hostel, she gave him or 'sent back' to him an amount of $42,000 she had put into the bank. He used the interest from that money to pay for his mother's shire rates, insurance and so forth. He was unable to produce any bank accounts that showed his mother produced the sum of $42,000 from somewhere or that he received it from somewhere. He then said that when his mother gave him the $42,000 he put it into a cheque account in his name but the documents for the cheque account were not produced by him. He said those documents were his and at his home. He said he could not answer whether there was a document in his mother's name that showed a bank account balance of $42,000 around September 2010. He also did not have a document in his name that showed a receipt for the $42,000. He agreed that during the course of this proceeding, he had been required to produce discovery of all documents that were relevant and did not know whether he has produced any such document.

40 Bernard denied that this was the first time he has said his mother paid back the $42,000 to him in September 2010. He said that he had also deposed to this in his second affidavit, although he agreed that in that affidavit he said the date of the repayment was 2008. In his second affidavit, he swore that in 2008 or thereabouts my mother returned that amount to me and placed it in the Sandhurst Trustees common account'. He said that in this sentence he was referring to the amount of $42,000 and the date should be 2010 and not 2008. He said it happened just before his mother went into the hostel, then he says it might have been 2008 but it was not long before she went into hostel.

41 He agreed that there should be another bank book in his name only which had the $42,000 in it and he thought those documents were in court. He agreed that the affidavit of documents sworn by him on 10 January 2014 did not show any such documentation but said there is a record of it and it did happen.

42 Bernard agreed that any money his mother gave him was her own money that she had in her own account. He also agreed that his mother was a keeper of records and she kept her account statements and banks receipts.

43 Bernard said on 18 August 2011, he paid the sum of $62,000 from an account in his name with Sandhurst Trustees to his solicitor. This was the money held on the life interest and then passed back to the estate of the deceased following the death of his mother, the life tenant of the estate. The sum of $62,000 derived from the deposit of $20,000 with the Bendigo Bank in the name of the estate and $42,000 from his account with Sandhurst Trustees.

44 Bernard did not produce any bank statements in his name showing the deposit of $42,000 from his mother in either 2008 or September 2010. He did produce a page of his Sandhurst Trustees Common Fund Passbook from where he paid the $62,000 on 18 August 2011. The balance of the account for the first entry on the page is $38,514 as at 1 April 2011, not $42,000.

45 In support of his contention that Bernard exercised the option to purchase the land within three months of the grant of probate of the will, Bernard relies on his oral assertions that he did so within the required time frame, that is, by 4 March 1979.

46 His counsel said that he could not point to any document to support that this was the case but could only say that it is not inexplicable by reason of the fact that the events took place nearly forty years ago. He submitted that it was the fact that Bernard paid the agreed probate value for the land within the three month period and 'we say he did because he said he did' and 'he acted for the rest of the following decades in a way consistent with him having done that'.

47 Apart from the assertions of Bernard Fanning, which themselves were contradictory, the submissions of counsel fail to give any consideration to the evidence in the proceeding.

48 True it is that the events took place long ago, however, in circumstances where the will provides for the options to be exercised within a short time frame after the grant of probate of the deceased's will, a prudent trustee and the person who asserts that the option was exercised would keep documentary evidence of it.

49 Overall, Bernard's evidence lacked any credibility. He claims to have paid the amount of $62,000 by two cheques in 1979. He also handed over a cheque for $62,000 in 2011. The later cheque contradicts the payment of the first two cheques. The estate trust account ledger card does not record any such payment, the solicitor's file notes dated 19 September 1991 and 5 March 1992 support the conclusion that $62,000 was not paid by Bernard Fanning by those dates. The building of a shed by Geoffrey in early 1992 also supports that conclusion.

50 Even if $62,000 in two cheques had been paid to the estate by March 1979, there is no evidence of that amount being placed on deposit with the interest paid to Mrs Fanning during her lifetime. In respect of the payment of $20,000, there is an assumption made by Bernard Fanning that the funds in the Bendigo Bank derived from the payment of $20,000 but the evidence, such as it is, supports a finding that the funds deposited with the National Bank in 1988 were funds held on trust for Mrs Shallue. In addition, all of the records relied upon to assert that these funds derived from the cheque for $20,000 were never for an amount of $20,000. The Bendigo Bank term deposit and the pensioner security account for Mrs Fanning show that she received regular interest payments from the Bendigo Bank. In respect of the payment of $42,000 there is no record of any deposit of a cheque for $42,000 anywhere on any date and no evidence that Mrs Fanning received interest payments from a deposit of $42,000 at any time.

51 The evidence of Bernard that he handed over two cheques to his mother in 1979 in the presence of his then solicitor, Mr McKenzie-McHarg, is not verified by the solicitor's file which had been produced in this proceeding.[3]

52 Further, no transfer of the land has been lodged for registration changing the ownership of the land into Bernard's name at any time.

53 Bernard did not produce any credible evidence that he was capable of obtaining $62,000 at the end of 1978. He asserted that he had $20,000 on hand and borrowed the rest of the amount. At that time, he was married with three or four children, working as a kitchen-hand and was unlikely to have been earning substantially more than around $220 a week. He said that he had 'other land and that he was leasing three properties'. In 1994, his earnings from his suite of wages and farming activities were approximately $20,000 in partnership with his wife. It seems improbable therefore that Bernard would have an amount of $20,000 in 1979 to pay cash to his mother for the land.

54 In respect of him borrowing the sum of $42,000 there are no records of that occurring. In his second affidavit, he swore that he borrowed the funds using the family home in Beechworth as security for the loan. In his oral evidence, he said that although the 1994 tax returns record that his wife borrowed $40,000 he said that this was a loan by the partnership and was a joint loan and this was the loan that he obtained in 1979 to pay $42,000 and it was rolled over after 1979. He agreed that in his affidavit, he did not say anything about he and his wife borrowing the money or the partnership extending or rolling over a loan.

55 The evidence of Bernard that his mother paid him back the sum of $42,000 in 2008 or September 2010 or in any period was not credible. He first stated this in his second affidavit. To suggest that any money given to him by his mother could have been money paid for the life interest in the land is fanciful. Bernard agreed that such money must be preserved with the income only to be used for his mother. His evidence was that he used this money for payment of various accounts but did not produce them.

56 In 2010, Mrs Fanning did not apparently tell Centrelink about an account as large as $42,000. The Centrelink documents show assets of $18,000 and income of $500 in October 2010. Even if assets held on the life interest were not included, the income from the capital should have been declared. The income from a deposit of $42,000 invested at 5% per annum would generate a sum in at least the vicinity of $2,000 per annum.

57 Accordingly, I find that Bernard Fanning did not purchase any part of the land referred to in clauses 4, 6 and 7 of the will of the deceased dated 9 August 1974 in the manner required by the terms of the deceased's will. I declare that Bernard personally holds the land upon trust for the estate of the deceased.

58 I will hear the parties as to the form of orders, and as to any further orders and directions to be made as a consequence of these findings.

59 In the case of Venezia v Marshall, Brooking JA on behalf of the Court of Appeal said:

We desired the appeal to be listed for hearing for three reasons. In the first place we wished to say something about the impropriety of taking manifestly hopeless points. In the second place we wished to consider whether we should make a special order for costs against the appellant, more severe than the normal consequence of discontinuance. In the third place we wished to say something about the position of legal practitioners where plainly hopeless cases are launched and proceeded with.

...

The appeal procedure is not to be used as a means of buying time. Lawyers are not to be discouraged from raising points that can, on any fair view, be described as arguable. But they owe a duty to the Court not to raise and argue manifestly hopeless points.[4]

60 In this matter, Bernard raised no more evidence of his payment for the land other than his bare assertion that he had indeed done so. That the case has proceeded on this basis is a cause for concern.

61 In the hearing of the preliminary question, detailed affidavits were filed by both sides. Each side knew the case it had to meet on the preliminary question. The affidavits sworn by Bernard did not produce any evidence of payment. Any objective analysis of his affidavit evidence establishes that the preliminary question would not be answered in Bernard's favour. This was confirmed when his counsel said in his closing submissions in support of his case nothing other than that the events in question happened some time ago, that Bernard asserted that it was true, that he had had acted consistently with that assertion, and that it was otherwise 'a matter for the Court'. In my opinion, there are real questions raised as to why this case was run at all.

62 Legal practitioners must always bear in mind their duty to the Court and their overarching obligations under the Civil Procedure Act 2010.[5] Their task is to advise their clients, not merely to act as the client's mouthpiece. I do not propose in this case to undertake any investigation of the advice given by Bernard's solicitor and counsel. However, arguing a case as unsupported by the evidence as this case was is, put simply, a waste of the Court's valuable time and resources.

[1] This figure was suggested to him by counsel for the plaintiffs, who gave him the opportunity to dispute the figure.

[2] A figure also put to him by counsel for the plaintiffs.

[3] The solicitor for Bernard Fanning, Mr Bailey, worked in Mr McHarg's practice in 1979 although he was not the solicitor for the estate. Mr McHarg is now deceased.

[4] Venezia v Marshall [2001] VSCA 160 (17 September 2001) [2], [4] (Brooking JA).

[5] Civil Procedure Act 2010, Parts 2.2 and 2.3. Bernard, as a litigant, is also subject to those same obligations: Civil Procedure Act 2010, s 10.

Court (General Civil Procedure) Rules 2005

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