Court of Appeal (WA)|2010-06-23|Before: Martin CJ

SILBERT and ADDISON as Executors and Trustees of the Estate of GERTE HOFFMAN -v- STEINBERG as Executor of the Estate of MORRIS STEINBERG [2010] WASCA 113 (23 June 2010)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : SILBERT and ADDISON as Executors and Trustees of the Estate of GERTE HOFFMAN -v- STEINBERG as Executor of the Estate of MORRIS STEINBERG

BETWEEN : STUART ANTHONY SILBERT as Executor and Trustee of the Estate of GERTE HOFFMAN

GRAHAM ARTHUR ADDISON as Executor and Trustee of the Estate of GERTE HOFFMAN

MALCOLM STEINBERG as Executor of the Estate of MORRIS STEINBERG

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : STEINBERG -v- SILBERT [2009] WASC 277

Application for leave to appeal decision of Master refusing summary judgment - Principles governing grant of leave to appeal from interlocutory decisions

Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175

Carr v Finance Corporation of Australia Ltd No 1 [1981] HCA 20; (1981) 147 CLR 246

David Regan & Co Pty Ltd v West Australian Newspapers [2007] WASCA 14

In de Braekt v Powell [2007] WASCA 55; (2007) 33 WAR 389

Joyce v Palassis [2008] WASCA 151

State of Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40

MARTIN CJ: (This judgment was delivered extemporaneously on 1 June 2010 and has been edited from the transcript.)

1 The applicants, in their capacity as executors and trustees of the estate of the late Gerte Hoffman, apply for leave to appeal from the decision of the Master dismissing their application for summary judgment in proceedings brought against the estate.

2 The decision of the Master refusing summary judgment is plainly a decision of an interlocutory character, in that it did not finally determine any of the substantive rights of the parties - see Licul v Corney [1976] HCA 6; (1976) 180 CLR 213, 219 - 220; Carr v Finance Corporation of Australia Ltd No 1 [1981] HCA 20; (1981) 147 CLR 246, 248. Accordingly, the jurisdiction of the Court of Appeal depends upon the grant of leave - see Supreme Court Act 1935 (WA), s 60(1)(f). It is pertinent to observe that if the current applicants had been plaintiffs, rather than defendants - for example, in proceedings seeking declaratory relief as to the manner in which the estate should be administered, and had been refused summary judgment as plaintiffs, the Court of Appeal would have had no jurisdiction to entertain an appeal from that decision - see Supreme Court Act, s 60(1)(b).

3 The fact that this application for leave to appeal was brought at all suggests that it may be timely to reiterate and reinforce the principles governing the grant of leave to appeal against interlocutory decisions. The obvious objective of the statutory provision limiting the jurisdiction of this court to hear appeals from interlocutory decisions to those in respect of which leave is granted is to reduce appeals from decisions of that kind as much as possible - see Wilson v Metaxas [1989] WAR 285, 294. While there is a general discretion to grant leave to appeal (see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170, 177; and State of Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40, 56 - 67, 74) it must be shown that the decision in respect of which leave is sought is wrong, or at least attended with sufficient doubt to justify the grant of leave, and, in addition, that substantial injustice would be done by leaving the decision unreversed (see Wilson v Metaxas; WA v Bond Corporation and, more recently see: Joyce v Palassis [2008] WASCA 151 [26] and David Regan & Co Pty Ltd v West Australian Newspapers [2007] WASCA 14 [11].

4 In Adam P Brown Male Fashions Pty Ltd, the plurality cited with approval the following passage from the judgment of Sir Frederick Jordan in Re the Will of Gilbert (1946) 46 SR (NSW) 318, 323:

... I am of opinion that ... there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of judges at first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.

5 A decision of a Judge or Master managing a case to the effect that summary judgment should be refused and the parties proceed to trial is a decision of a procedural character (see In de Braekt v Powell [2007] WASCA 55; (2007) 33 WAR 389 [35]) which, in this court, will be taken in the context of the case management regime established by the Rules of the Supreme Court 1971 (WA). It follows that the principles enunciated in O 1 r 4A and r 4B will govern determinations of this kind. Those principles require particular weight to be given to the elimination of delay, the reduction of cost, and the efficient disposal of the business of the court, subject, of course, to the overriding requirement that there be a fair and just determination of the issues bona fide in contention between the parties. It also follows that the various considerations identified by the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 will also bear upon not only the initial consideration of an application for summary judgment, but also upon applications for leave to appeal from interlocutory decisions.

6 The inconsistency between applications for leave to appeal from interlocutory decisions and the achievement of the objectives identified by the Rules of the Supreme Court, and the decision in Aon are illustrated by this case. More than eight months have elapsed since the decision of the Master during which time the matter has not further progressed in any substantive way, although the parties have incurred what I would assume to be substantial costs in presenting, and responding to, the application for leave to appeal. For reasons which I will shortly address, that delay, and those costs, have been thrown away and could and should have been avoided.

7 It is pertinent to emphasise that the availability of an avenue of appeal from interlocutory decisions, subject to the grant of leave, should not be seen as providing an unrestricted opportunity for the lengthy reventilation of arguments which failed at first instance. The determination of whether the decision from which leave to appeal is sought was wrong, or attended with sufficient doubt to justify the grant of leave to appeal should not ordinarily require or involve argument of the complexity and duration of the argument presented at first instance. Ordinarily, the court determining whether or not to grant leave to appeal will take a broad approach to that question, informed by the various principles to which I have referred. Where it determines that the decision at first instance is not wrong or attended with sufficient doubt to justify the grant of leave, elaborate reasons for that conclusion, of the kind customarily given at first instance, will not ordinarily be necessary or even appropriate.

8 Further, in this particular case, the approach properly taken by this court to the grant of leave is informed by what might be seen by some to be a procedural anomaly in that it is the status of the current applicants as defendants, and not as plaintiffs, which provides them with any avenue of appeal at all.

9 I turn now to the circumstances of this particular case. The facts taken by the Master for the purposes of his determination (and which are not challenged for the purposes of this application for leave) are as follows. The estate administered by the applicants is substantial. At all material times, the testatrix, Mrs Hoffman, was aged, frail, bedridden and totally dependent on her attorneys to conduct her banking. By the eighth codicil to her will, executed on 23 January 2003, Mrs Hoffman made a number of specific bequests, including a bequest of $2 million to her sister, Judith Steinberg, and her sister's husband, Morris Steinberg, in equal shares.

10 On or about 8 November 2004, Mrs Hoffman directed her solicitor and attorney to pay $1 million to Mr Morris Steinberg from a nominated bank deposit account which, in a practical sense, was under the control of the solicitor and attorney because of Mrs Hoffman's age and frailty. Shortly after 8 November 2004, Mrs Hoffman informed Mr Steinberg that she had made a gift of $1 million to him, and that the solicitor would make the payment. At about the same time, the solicitor provided the same information to Mr Steinberg.

11 By the ninth codicil to her will, executed on 8 August 2005, Mrs Hoffman confirmed the specific bequests made in the eighth codicil, and included a hotchpot clause in the following terms:

And I declare every gift at any one time of money of a greater amount at the time of such gift than Ten Thousand Dollars ($10,000) made by me after the date of this my Ninth Codicil unto the beforementioned beneficiaries or beneficiary shall be brought into hotchpotch [sic] by the aforementioned beneficiaries or beneficiary upon the distribution of my estate at the value thereof at the time of such gift and be accounted for accordingly, unless at the time or within Six (6) months from the time of making such gift I shall in writing signed or initialled by me declare to the contrary.

12 The payment of $1 million to Mr Morris Steinberg was not made until 9 September 2005, after the ninth codicil, including the hotchpot clause, had been executed. There was no evidence before the Master as to the reason for the failure to make the payment to Mr Steinberg until after the execution of the ninth codicil.

13 Mrs Hoffman died on 11 March 2006. Each of Judith and Morris Steinberg survived her, although Judith Steinberg died on 24 January 2008, and Morris Steinberg died on 24 February 2008. The applicants, in their capacity as the executors and trustees of Mrs Hoffman's estate take the view that the hotchpot clause applies to the payment of $1 million made to Mr Morris Steinberg in September 2005 in reduction of the bequest to Mr and Mrs Steinberg.

14 The executor of the estate of the late Mr Steinberg commenced these proceedings against the executors of the estate of Mrs Hoffman, claiming $1 million. By their defence, the executors of Mrs Hoffman's estate rely upon the hotchpot clause and further assert that an amount of $500,000 was paid to Mr Steinberg in November 2006 by mistake and counterclaim for repayment of that amount. By his reply, the executor of the estate of the late Mr Steinberg advances the various assertions of fact which the parties accepted before the Master should be taken to be assumed for the purposes of the determination of the application for summary judgment.

15 On those assumptions, the Master found that there was a triable issue or issues. One of those issues was the question of whether the hotchpot clause, on its proper construction, in the particular circumstances of this case, applied to gifts which had been unequivocally promised prior to the execution of the codicil containing the hotchpot clause, but not in fact paid across until after the execution of that clause, or whether it only applied to gifts initiated after the execution of the ninth codicil. As the Master pointed out in his reasons, factual issues properly investigated at a trial may be relevant to the resolution of that question of construction including, perhaps, the question of whether Mrs Hoffman was aware, at

the time she executed the ninth codicil, that the money she had directed should be paid to Mr Steinberg the previous year had not in fact been paid to him at that time. There are other factual issues that might be potentially relevant, including the course of dealings, if any, between Mrs Hoffman's attorney and Mr Steinberg. The current applicants for leave are likely to be the only sources of direct evidence on such an issue, which might properly be explored by a pre-trial process such as the administration of interrogatories.

16 It was open to the Master to conclude that there was a triable issue with respect to the proper construction and effect of the hotchpot clause in the particular circumstances of the case. His conclusion that there was such a triable issue is not plainly wrong, nor attended with sufficient doubt to justify the grant of leave to appeal.

17 The Master also considered that there were other issues between the parties which should be tried, being the contention advanced on behalf of the estate of Mr Steinberg to the effect that a trust had been created in respect of an amount equal to the amount of the gift by the events which occurred in 2004 or, alternatively, that those circumstances gave rise to attornment, each of which were argued to exclude the gift from the operation of the hotchpot clause. As the identification of any triable issue provided a sufficient basis for the Master to refuse summary judgment, it is unnecessary to consider those issues as any view taken in relation to them would not alter the conclusion that leave to appeal should be refused. I would, however, observe that the proposition advanced on behalf of the applicants for leave to the effect that the author of a respected text, in this case Goff & Jones The Law of Restitution (7th ed) was wrong to suggest that attornment might give rise to a proprietary interest is plainly controversial. It is only in the most exceptional case that an issue of that character would properly be resolved on an application for summary judgment, or would attract the grant of leave to appeal from an interlocutory decision. This is not such a case.

18 For these various reasons, I would refuse the application for leave to appeal.

SILBERT and ADDISON as Executors and Trustees of the Estate of GERTE HOFFMAN -v- STEINBERG as Executor of the Estate of MORRIS STEINBERG [2010] WASCA 113 (23 June 2010)

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Judgment (41 paragraphs)

SILBERT and ADDISON as Executors and Trustees of the Estate of GERTE HOFFMAN -v- STEINBERG as Executor of the Estate of MORRIS STEINBERG [2010] WASCA 113 (23 June 2010)

Legislation Cited (1)

Cases Cited (6)