Third Party Application to Intervene in Estate Proceedings Dismissed

The court dismissed a third party's application to intervene in estate proceedings, holding that the administrator was willing and able to provide adequate assistance to the court, thus no special circumstances existed to warrant the third party's involvement.

Supreme Court New South Wales

Medium Neutral Citation: [NAME] v [NAME] [2017] NSWSC 1506 Hearing dates: 1 November 2017 Date of orders: 01 November 2017 Decision date: 01 November 2017 Jurisdiction: Equity - Duty List Before: Parker J Decision: Motion dismissed Catchwords: Civil procedure – third party application to intervene – proper plaintiff in estate proceedings – amicus curiae – where administrator of estate is willing and able to provide adequate assistance to the Court Cases Cited: [NAME] v [COMPANY] (2004) 216 CLR 109; [2004] HCA 7 Levy v Victoria (1997) 189 CLR 579; [1997] HCA 31 Category: Procedural and other rulings Parties: [NAME] (Plaintiff) [NAME] (Defendant) Representation: Counsel: [redacted] [NAME] (Defendant)

In person: PJ [NAME] (Third Party Applicant)

Solicitors: [redacted] [COMPANY] (Defendant) File Number(s): 2017/230765 Publication restriction: Nil

Judgment – EX TEMPORE

(revised and issued 6 november 2017)

1. These proceedings concern the estate of the late [NAME] who died in August 2015. For convenience and without disrespect, I will refer to the members of Mr [NAME]' family by their Christian names.

2. Mr [NAME] left a will under which his estate was to pass to his four surviving children in equal shares. Those children are his son, [NAME], and his three daughters, [NAME] and Ms [NAME]. 3. [NAME] is the administrator of the estate, having been appointed to that office by orders of this Court made in earlier proceedings concerning Mr [NAME]' estate. In these proceedings she sues as plaintiff on behalf of the estate. The defendant is [NAME]. The claims made against him do not need to be given in any particular detail but, broadly speaking, concern alleged misappropriation of property and assets of the deceased before he died. Apparently, [NAME] had access to his bank accounts under a power of attorney which had been signed by the deceased in January 1997 and which was revoked by the deceased in November 2014.

4. This judgment concerns an application made by [NAME] who is not a party to the proceedings. [NAME] is the partner of [NAME]. By notice of motion filed on 25 September 2017, [NAME] seeks the following orders:

1. This applicant is granted leave to address the Court with regard to this Motion.

2. That the applicant be named as a party to these proceedings as a 'friend of the court' or in the alternative as so ordered by the Court.

3. That the affidavit in support of this Motion and its annexures be filed within the matter 2017/00230765 as listed.

4. That the parties meet their own costs.

5. Subject to Order 4, leave is granted to address the Court as to the issue of Costs.

6. Orders the Court deems proper.

1. Accompanying the notice of motion is an affidavit from [NAME] in which he deposes to his belief that [NAME] has withheld or may be withholding assets of the estate and is seeking to delay the proceedings which have been brought against him. In the course of the hearing I permitted [NAME] to call [NAME] as a witness and she gave her evidence to similar effect.

2. In [NAME] v [COMPANY] (2004) 216 CLR 109 at 129 [55] the High Court approved of the following statement of general principle from Scott on Trusts (4th ed, 1989, vol 4, at 282) in relation to trust litigation: The interests of the beneficiaries of a trust are protected against a third person acting adversely to the trustee through proceedings brought against him by the trustee and not by the beneficiary. As long as the trustee is ready and willing to take the proper proceedings against the third person, the beneficiaries cannot maintain a suit against him.

1. The High Court referred to the existence of an exception to this general principle but only where there are "special circumstances". As the High Court mentioned, one reason for this rule is to protect the interests of a third person because the rule prevents the third person from being oppressed by a multiplicity of suits on the part of beneficiaries. But that is not its only rationale. The rule also seeks to protect the interests of the trust itself by ensuring that, as far as this is possible, decisions about the pursuit of litigation are made by the trustee as the responsible party and the costs associated with the process are thereby minimised. If the rule did not exist, then the trustee would be required to be joined in proceedings brought by a beneficiary and to be represented for the purpose of those proceedings even though the trustee might have concluded that the claim should not be brought. To permit that to happen simply because a beneficiary was convinced that there was a valid claim or a claim that ought to be pursued would be likely to increase the overall costs of administration of the trust.

2. Although the rules to which I have referred are stated in terms of beneficiaries, like rules apply to litigation concerning deceased estates. In such proceedings, the proper plaintiff is the executor or administrator and the Court will only permit a third party beneficiary to bring a claim in his or her own name in "special circumstances", which usually involve a situation where the executor or administrator is unable or unwilling to act.

3. It is not clear from the notice of motion whether [NAME] has in mind that he would actually conduct part of the case. The motion speaks of [NAME] being joined as a "friend of the court" but also of him being named as a party to the proceedings.

4. There is nothing before the Court which would establish the "special circumstances" which would allow [NAME] or even [NAME] to be joined as a party to the proceedings for the purpose of advancing a claim on behalf of the beneficiaries. I therefore proceed on the basis that the application is one by [NAME] to participate in the proceedings as a "friend of the court" or amicus curiae.

5. In support of his application, [NAME] referred to remarks made by [NAME] in Levy v Victoria (1997) 189 CLR 579. That was a case where a number of parties had intervened in the High Court proceedings and a number of further parties were heard as amici curiae. The Media, Entertainment and Arts Alliance, a union representing journalists, had sought to intervene but its application to do so had been refused by the Court. [ADDRESS] received submissions from that body as amicus curiae but only in writing. [NAME] (at 650-652) explained why his Honour would have permitted the intervention of the Alliance or at least would have allowed the Alliance to participate by making oral submissions rather than being restricted to written submissions.

6. However, this was a minority view. The rule on which the High Court acts was authoritatively stated by Brennan CJ (at 604), quoting from what his Honour had said on behalf of the whole Court in [NAME] v The Commonwealth. In that case, the Court had refused counsel's application to appear for a person as amicus curiae. Brennan CJ said on behalf of the Court: As to his application to be heard as amicus curiae, he fails to show that the parties whose cause he would support are unable or are unwilling adequately to protect their own interests or to assist the Court in arriving at the correct determination of the case. [ADDRESS] must be cautious in considering applications to be heard by persons who would be amicus curiae lest the efficient operation of the Court be prejudiced. Where the Court has parties before it who are willing and able to provide adequate assistance to the Court it is inappropriate to grant the application.

1. That statement of principle was made in the High Court which frequently finds itself determining issues of general legal significance for the country as a whole. The principles applicable in the present case, which does not have any wider constitutional or public implications, are probably narrower but they certainly cannot be wider.

2. The affidavit in support of the application conveys clearly enough [NAME]'s belief that [NAME] is a person who has acted, and may be expected to continue to act, in a way which is inconsistent with the interests of the beneficiaries of the estate as a whole. As I have mentioned, [NAME] gave evidence to similar effect but, in my opinion, none of the material in the affidavit provides proper factual support to establish a responsibly arguable basis for sustaining these assertions. The conclusions are stated but the facts are not and the affidavit appears to consist of a mixture of assumptions and interpretations of the actions of the relevant parties and speculation about what may or may not have happened.

3. Some parts of the affidavit which refer to the possibility of misconduct on the part of [NAME]' solicitors were specifically objected to. I allowed that material to stand provisionally so that I could understand the case that [NAME] was seeking to make. But, on analysis, the allegations are not properly supported by the rest of the affidavit. They are bald conclusions of misconduct unsupported by context which would allow their weight to be evaluated. In the circumstances, I rule that they are inadmissible and I reject the passages in the affidavit which were objected to.

4. Even if I were of the view that the material in the affidavit provided a proper and arguable basis for the allegations made against [NAME], I would still not accede to [NAME]'s application. As I have mentioned, the proper party to pursue allegations against [NAME] is [NAME] as administrator of the estate. [NAME] asserted that she might not be up to the task of pursuing the claims. He also suggested that the proceedings should not go to final hearing but instead should be dealt with by some other less formal procedure at a reduced cost.

5. It is too early to know what issues will arise and how they will be dealt with, but I will proceed on the assumption that the Court will deal with the matters in a way which would be best calculated to achieve the objective of making the proceedings just, quick and cheap. There is nothing whatever in the evidence before me to suggest that [NAME] or her legal representatives are incapable of representing the interests of the estate properly. So far as I can see, the Court has parties before it who are willing and able to provide adequate assistance to the Court in resolving the issues which may eventually emerge in these proceedings and for that reason it is inappropriate to grant the application made by [NAME] at this point.

6. It is conceivable that at some future point an issue will arise which might require assistance from [NAME] or from [NAME] but, so far as I can see, their assistance is likely to be limited to answering questions and providing information which [NAME], as administrator, may need in order to pursue claims against [NAME]. While one can never rule out completely the possibility of [NAME] participating in the proceedings as amicus curiae, I would not wish, in my remarks today, to give him any encouragement in the belief that that is ever likely to be appropriate in this case. The best thing that [NAME] and [NAME] can do is to stand ready to provide whatever assistance [NAME] may ask of them in pursuing the claims and otherwise to leave it to [NAME] and her lawyers to represent the interests of the estate.

7.

For these reasons, [NAME]'s application fails. I see no reason why the costs of the application should not follow the event. As [NAME] is not a party, there is no reason why the costs should not be assessable and payable forthwith. It may be that no order is necessary in this regard but I propose to make an order which will make that clear.

8. The orders of the Court are:

1. Dismiss the notice of motion of [NAME] filed on 25 September 2017.

2. Order that [NAME] pay the costs of the plaintiff and of the defendant of that notice of motion, such costs to be assessable and payable forthwith.

********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 April 2018