HIS HONOUR: I am dealing with a notice of motion filed on 7 November 2014, by the Defendant, in which she seeks an order, pursuant to the Uniform Civil Procedure Rules 2005 (NSW), rule 12.7, that the Plaintiff's proceedings be dismissed for his failure to prosecute those proceedings with due despatch.
The proceedings brought by the Plaintiff were commenced by Summons filed on 30 June 2014, in which he sought an order extending the time for making a claim for a family provision order, a family provision order out of the estate or notional estate of his mother, Marion Joyce Snow ("the deceased"), under the Succession Act 2006 (NSW), and an order for costs.
It is necessary to set out some background facts to give context to the notice of motion.
The deceased died on 15 April 2013, aged 89 years, having been born in September 1924. She left a Will, Probate of which was granted to her daughter, the Defendant, on 10 July 2013. She left the whole of her estate to the Defendant. Her estate, at the date of death, comprised, effectively, a property at Gundaroo, with an estimated value of $370,000.
The deceased's estate, currently, for reasons to which I shall come, has no, or little, net value, although the gross value of the property at Gundaroo may be higher than previously disclosed.
The first return date of the Plaintiff's Summons was 25 July 2014. By that date, the Plaintiff had filed the documents required by Paragraph 6 of Practice Note SC Eq. 7. At the request of counsel who appeared for the Plaintiff, I made certain directions for the filing of affidavits by the Defendant. (Because there was no appearance by the Defendant, and because counsel agreed, leave was granted to the Defendant to approach the court to re-list the matter if necessary.)
The Defendant filed a Notice of Appearance on 18 August 2014.
Subsequently, the Defendant sought to have the matter re-listed.
On 19 September 2014, at the request of the Defendant's solicitors, the matter was re-listed. As I was on leave, the matter came before Kunc J, who made an order, apparently by consent, vacating the directions made on 25 July 2014. His Honour stood the matter over to the Family Provision List on 17 October 2014.
Shortly before the matter came before Kunc J, the Plaintiff's solicitors filed a Notice of Intention to file Notice of Ceasing to Act. That was followed by a Notice of Ceasing to Act that was filed on 25 September 2014.
On 17 October 2014, the matter came before me. On that date, there was no appearance by, or on behalf of, the Plaintiff. Ms H Gay, an agent for the Defendant's solicitors, represented the Defendant. I adjourned the proceedings until 14 November 2014 (and requested the Defendant's solicitors to inform the Plaintiff of the adjourned date).
On 7 November 2014, the Defendant filed the notice of motion to which I have referred. The notice of motion was returnable on 14 November 2014.
In support of the notice of motion, the Defendant filed an affidavit sworn 6 November 2014 of Mr A H M Herring, her solicitor. In that affidavit, he stated:
"8. On or about 4 November 2014, I caused a letter to be sent to the last known address of the Plaintiff providing notice of the adjourned proceedings…
9. To date, the Defendant has not received any correspondence from the Plaintiff.
10. The sole asset in the estate is the property situated at Lot 1 Deposited Plan and known as Snows Lane, Gundaroo in the state of New South Wales (the estate property).
11. The estate property was the subject of extensive litigation since July 2011, in proceedings before this Court, proceedings number 2011/232854 (the debt proceedings).
12. The Plaintiff in these proceedings was the Second Defendant in the debt proceedings. The estate was the Third Defendant in the debt proceedings. The Plaintiff failed to appear in the debt proceedings and default judgment was entered against him.
13. In the debt proceedings, the claim against the estate was settled, however as a consequence, the liabilities of the estate exceed the likely value of the estate property. In those circumstances, I consider that the estate is presently insolvent."
Annexed to this affidavit was a copy of the pleadings that had been filed in the debt proceedings.
When the matter came before me on the 14 November 2014, there was no appearance by, or on behalf of, the Plaintiff. Because I was not satisfied that the Plaintiff had been properly advised of the adjourned date, I stood over the proceedings, and the notice of motion, until 27 November 2014.
(In this regard, and by way of reminder, I set out what I wrote in French Consulting Pty Limited v Donald [2011] NSWSC 584 (16 June 2011) at [28] - [30] regarding proof of service of documents by post:
"I refer to Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216, in which Brereton J set out the requirements of an affidavit of service by post:
"[12] ... Proof of service by post requires, at least:
Proof that the envelope bore the correct name and address;
Proof that the envelope contained the relevant document to be served;
Proof that the envelope bore the correct cost of postage; and
Proof that the envelope was placed in the post.
[13] Precedents may be found in Neville & Ashe, Equity Proceedings with Precedents (NSW), Butterworths, 1981, precedent 19(2), Court Forms Precedents & Pleadings (NSW), "Service of Process", precedents 40.5, 40.15."
More recently, Barrett J in Brown v Bluestone Property Services Pty Ltd [2010] NSWSC 869, said:
"[12] The requirements for proof of service by post have been described in a number of recent cases to which Mr Hughes, counsel for the defendant, referred, specifically, Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216; Dwyer v Canon Australia Pty Ltd [2007] SASC 100; Pearlburst Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126 and Grant Thornton (Qld) Pty Ltd v Green Global Technologies Ltd [2009] QSC 262.
[13] In order to prove service by post, it is necessary that the evidence of one or more witnesses establish a number of core and indispensable matters: that the document said to have been served by posting of it to a given address was placed inside an envelope, that the envelope had that address written or typed on its face, that a postage stamp or franking of the necessary amount was affixed to the envelope and that the envelope so addressed and stamped or franked was physically deposited in the post either at a post office or by being dropped into a post box for the reception of mail articles."
Also see my decision in Smirski v Macander [2010] NSWSC 929 and Renegade Rigging Pty Ltd v Hanlon Nominees Pty Ltd [2010] VSC 385."
On 27 November 2014, there was, once again, no appearance by the Plaintiff. On that date, Mr Herring appeared and filed in Court, an affidavit sworn on 27 November 2014. In this affidavit, he stated, on information and belief, the steps that had been taken to locate the Plaintiff. One such search, (an electoral search), had provided a residential address, but it appeared that the Plaintiff no longer lived there, several failed attempts to serve him at the address having taken place.
Mr Herring stated, at the conclusion of the affidavit (paragraph 17):
"I do not know the whereabouts of the Plaintiff and as a result of the searches conducted…and the other matters deposed to in this affidavit, I do not believe that I will be able to locate the Plaintiff without him making his address known to me."
Because I remained unsatisfied that the Plaintiff had been made aware of the date of the proceedings before the court, I adjourned the matter, again, until 9 February 2015, with a direction that the Defendant's solicitors deliver to my Chambers, by 5 February 2015, any affidavits of service, or attempted service, or of further attempts to locate the Plaintiff.
I received an affidavit of Mr Herring sworn 5 February 2015, in which he stated, on information and belief, the further attempts that had been made to locate the Plaintiff, none of which had proved successful. Even an attempt to obtain an address from his former solicitors was unsuccessful, they advising that they had not had any contact with the Plaintiff "since before 6 September 2014".
On 9 February, 2015, the matter was called outside the Court. There was no appearance by, or on behalf of, the Plaintiff. I read the affidavits that had been filed and stated that I would reserve my decision. I indicated to Mr Herring that, perhaps, he should file an affidavit which dealt with the current value of the estate, since this would be a relevant matter in light of the debt proceedings. Later in the day, he filed an affidavit sworn on 9 February 2015. The matters in that affidavit appeared to me to be largely uncontentious.
I shall not set out all of the matters in Mr Herring's affidavit of 9 February 2015 going to the debt proceedings. He provided details of the allegations made in those proceedings against the deceased (and subsequently her estate), and confirmed that those proceedings had been settled upon the basis that the Defendant, as executor of the deceased's estate, would pay $525,000 to the judgment creditor by 2 March 2015. There was some evidence given of the possible sale of the Gundaroo property for $600,000.
Mr Herring also referred to outstanding fees to his firm for the debt proceedings ($60,037.59), fees for obtaining probate and estate administration ($3,908.49), the costs of the present proceedings ($9,693.08) and estimated costs of sale of the estate's real estate ($1,500). He then stated:
"18. If contracts for the sale of the estate property are exchanged and completed by 2 March 2015, there will be no funds available for the net proceeds of sale, following the payment of the above outstanding liabilities of the estate, for distribution to beneficiaries or potential beneficiaries.
19. If contracts for the sale of the estate are not exchanged and completed by 2 March 2015, I anticipate that Provident will instruct its solicitors to file the consent judgment envisaged by the deed and thereafter Provident will take possession of the estate property and seek to realise its value as mortgagee in possession. In those circumstances, I anticipate that the net proceeds of any such sale will substantially fall short of the judgment amount, and there will not be any funds available for distribution to beneficiaries or potential beneficiaries."
It is clear from Mr Herring's affidavits that the current Plaintiff played a significant role in the events that led to the debt proceedings. (He was a director and shareholder of the borrower and also a guarantor of the company's debt.)
[2]
Determination
Whilst the Plaintiff's claim was commenced out of time, his solicitors did file the documents required by Practice Note SC Eq. 7 (Paragraph 6). The Plaintiff has not appeared at any of the adjourned hearings, other than the first return date, but, as the Defendant accepts, he has not been able to be served with any correspondence informing him of each adjourned date. Accordingly, he has not been accorded the opportunity to participate in the hearing, knowing that it was to take place.
However, there is no evidence that, since September 2014, or, perhaps, even before then, he has taken any steps to ascertain what has happened in relation to the proceedings, or when the matter has been listed. There is no suggestion, on the court file, that he has corresponded with the court to ascertain the current state of the proceedings or to inform the court of his current situation. He has not sought to contact his own solicitors or the Defendant's solicitors. Similarly, he has not been in contact with the Defendant and all of the searches to ascertain his whereabouts have been unsuccessful. There has only been silence and inactivity on the part of the Plaintiff. But for the attempts of the Defendant's solicitors, the proceedings would have remained in a dormant state since July 2014. On the whole of the evidence, I am able to infer that the Plaintiff has effectively abandoned the proceedings.
It seems that the Plaintiff does not wish to be found and that he has no desire to prosecute these proceedings. Having read the affidavits, I am comfortably satisfied that the Plaintiff has not taken any steps to prosecute the proceedings presently before the court since July 2014. I am also satisfied that real attempts have been made to locate the Plaintiff, who appears to not wish to be located.
The power referred to in rule 12.7(1) is a discretionary power: Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274. It is to be exercised according to the justice of the case. The discretion should be exercised with a consideration of the Civil Procedure Act 2005 (NSW), ss 56 - 60. As has often been said, the Act, and these sections, each have brought about important changes to the conduct of civil litigation in New South Wales. The "over-riding purpose" provided for in s 56, the fulfilment of which binds the Court (s 56(2)), the parties (s 56(3)) and the legal advisers (s 56(4)) is the "just, quick and cheap resolution of the real issues in the proceedings". Of course, the court must seek to act in accordance with the dictates of justice: s 58.
The Defendant's notice of motion does not seek, in the alternative, an order that the Plaintiff's proceedings be dismissed for any other reason. There is a reference, however, to "such further or other order as the court deems fit" in the notice of motion.
The Court is authorised by s 90(1) of the Civil Procedure Act and UCPR rule 36.1 to give such judgment, or make such orders, as the nature of the case requires, at any stage of proceedings. The operation of these provisions, specifically, is not dependent upon reliance upon either being foreshadowed in a notice motion.
Before considering this aspect, I should mention that I have also read, and considered, the Plaintiff's affidavit in support of the Summons. I have assumed, for the purposes of this part of the application, that relevant matters going to his claims in that affidavit will be established. This assumption limits, although it does not extinguish entirely, the concern, expressed by Mukhtar AsJ in Jackson v Newns [2011] VSC 32, at [11] -[12] that:
"…summary disposals in this type of case are rare. That is because facts in family claims are invariably in dispute to some appreciable degree, and a fair bit is at large in a field of discretion. The claims usually involve a close examination of human relationships, interpersonal affairs, family stories, beliefs, perceptions, expectations, people's station in life and impalpabilities in life. The Court's evaluation of the testator's moral duty ... and the exercise of a discretion that involves some value judgment means that ordinarily family claims are best left to trial to determine their sustainability."
I have also remembered that a party should not ordinarily be denied the opportunity to put his, or her, case, before the court in the usual way and after taking advantage of the usual interlocutory processes.
Yet, it is highly unlikely, on the evidence that I have read, that there will be any net proceeds of sale of the Gundaroo property left after the judgment debt and the other debts, funeral and testamentary expenses of the estate, are paid. If the evidence of Mr Herring is accurate, and there does not seem to be any reason to doubt that it is, there will simply be no estate, or notional estate, out of which to make a family provision order. Accordingly, since it would be futile to extend the time for the making of his application, the Summons would be dismissed.
Even if there were some proceeds of sale available to the estate, it appears from the evidence, that, the balance of the proceeds of sale would have been used to satisfy the debt of the current Plaintiff, or of the company of which he was a shareholder and director. In those circumstances, the likelihood of any further provision being made for the Plaintiff, despite the contents of his affidavit, is remote in the extreme, particularly bearing in mind what is likely to be the value of the net estate and the terms of the deceased's Will.
In all the circumstances, I am satisfied that there exists a high degree of certainty about the ultimate outcome of the proceedings if it were allowed to go to trial in the ordinary way.
I have considered ordering a stay of the proceedings until such time as the Plaintiff contacts the court, or until he is located and informed of an order staying the proceedings. However, doing justice between the parties, I do not think that is the appropriate course to follow, since it leaves the Defendant uncertain as to what is to occur in the administration of the estate. It must not be forgotten that the deceased died almost 2 years ago.
In all the circumstances, and despite the seriousness of an order dismissing the proceedings, I am satisfied that the evidence that I have read, and the matters to which I have adverted, are of sufficient significance to justify the dismissal of the proceedings.
The Plaintiff, if he chooses to, can take such steps as he is advised, to commence fresh proceedings in which he could seek the same relief: s 91 Civil Procedure Act. He could also, if he thought he could satisfy the court of the necessary matters, seek to set aside this judgment dismissing the proceedings, since it is given in the absence of a party: UCPR rule 36.16(2)(b).
On the issue of costs, I note that the Defendant seeks that the Plaintiff should pay the costs. Bearing in mind the evidence that I have read, there does not seem to be any utility in making such an order. The Plaintiff does not appear to have any assets and he is likely to have significant liabilities as a result of the debt proceedings.
The Court orders that:
1. The proceedings be dismissed.
2. The Defendant's costs, calculated on the indemnity basis, of the proceedings, including of the notice of motion filed 7 November 2014, be paid, or retained, as the case may be, out of the estate of the deceased.
[3]
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Decision last updated: 23 February 2015