Doleman v Doleman [2017] QSC 113

[2017] QSC 113 SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION BOND J No 3016 of 2017 TODD JOHN DOLEMAN Applicant and MICHAEL LESLIE DOLEMAN Respondent BRISBANE 4.27 PM, THURSDAY, 18 MAY 2017 JUDGMENT . -- 1 of 8 -- 2 HIS HONOUR: Christina Doleman died on 16 July 2011 in New South Wales. She was survived by her two children, Todd and Michael. Todd was born on 22 August 1969 but has suffered from paranoid schizophrenia for a long time. 5 Christina’s will was in these terms: I REVOKE all former Wills and Testamentary Instruments heretofore made by me AND I DECLARE this to be my last Will and Testament. I APPOINT MICHAEL LESLIE DOLEMAN as Executor and Trustee of this my Will AND 10 AFTER PAYMENT of my just debts funeral and testamentary expenses I GIVE DEVISE AND BEQUEATH the whole of my estate to my Trustee UPON THE FOLLOWING TRUSTS:- 1. I GIVE to GLADYS VIOLET McDAID the sum of Fifty Thousand Dollars 15 ($50,000.00). 2. I GIVE the rest and remainder of my Estate to MICHAEL LESLIE DOLEMAN in the expectation that he will make proper provision from my Estate for maintenance welfare and benefit of TODD JOHN DOLEMAN. 20 Probate was granted in New South Wales on 13 September 2011. The principal asset of the estate was sold by Michael and the proceeds distributed by him pursuant to the will. Although Michael had been appointed as Todd’s attorney for financial matters by an 25 enduring power of attorney executed on 24 January 2011, Michael took no steps to have proceedings instituted on Todd’s behalf for provision from the deceased’s estate before the estate was distributed in the way I have described. Todd retained Quinn & Scattini as solicitors in February 2016 by signing two 30 retainer agreements purporting to retain them to seek further provision out of the estate in New South Wales and to seek a declaration that pursuant to cl 2 of the will, the residuary estate was held on trust by Michael for Todd. A question may have arisen as to whether Todd had capacity to sign the retainer 35 agreements in February 2016 but the solicitor who interviewed him thought the contrary. On 20 September 2016 the Queensland Civil and Administrative Tribunal (QCAT) appointed the Public Trustee as Todd’s administrator for “financial matters”. 40 “Financial matter” is defined in Schedule 2 Part 1 of the Guardianship and Administration Act 2000 (Qld) in this way: A financial matter, for an adult, is a matter relating to the adult's financial or property matters, including, for example, a matter relating to 1 or more of the 45 following— … -- 2 of 8 -- 3 (o) a legal matter relating to the adult's financial or property matters; The term “legal matter” is defined, in Part 3 of Schedule 2 to the Act, to include: (a) use of legal services to obtain information about the adult's legal 5 rights; and … (c) use of legal services to bring or defend a proceeding before a court, tribunal or other entity, including an application under the Succession Act 1981, part 4 or an application for compensation arising from a 10 compulsory acquisition; and … (d) bringing or defending a proceeding, including settling a claim, whether before or after the start of a proceeding. 15 On 27 May 2016, Quinn & Scattini sent to the Public Trustee a draft of the proceeding which was subsequently commenced in circumstances which I will shortly describe, together with unsigned versions of the affidavit of Todd and of the solicitor who had interviewed him, and asked for the Public Trustee’s consent to commence the proceeding. 20 After some further correspondence on 3 August 2016, the Public Trustee wrote to Quinn & Scattini saying that he did not believe that there was any benefit to Todd in pursuing the application, and terminating Quinn & Scattini’s retainer. There followed, during August, September and October 2016, correspondence with Quinn 25 & Scattini concerning Quinn & Scattini’s demand for payment of fees for what they had apparently done, and the Public Trustee’s resisting that course. On 30 November 2016 Quinn & Scattini wrote to the Public Trustee, inter alia, suggesting that by not consenting to the proceeding being commenced, the Public 30 Trustee was not exercising his power with reasonable diligence to protect Todd’s interests as required under s 35 of the Guardianship and Administration Act. Of course, the Guardianship and Administration Act provides a mechanism by which interested persons can challenge decisions made by persons appointed to make 35 decisions on behalf of adults. Thus, s 115 provides that: (1) An application may be made, as provided under the QCAT Act, to the tribunal for a declaration, order, direction, recommendation or advice in relation to an adult about something in, or related to, this 40 Act … The application could be made by the adult concerned or another interested person. And pursuant to s 26, jurisdiction was conferred on QCAT to decide whether a person is an interested person. Obviously enough, the statute provided the 45 mechanism by which Quinn & Scattini could, if it was so motivated, have sought to overturn the decision made by the Public Trustee to terminate their retainer and to withhold his consent to the proposed proceeding. -- 3 of 8 -- 4 There was no further communication between Quinn & Scattini and the Public Trustee. Despite that not occurring and despite Quinn & Scattini not embarking upon the process provided for under the Guardianship and Administration Act, on 24 March 5 2017 an originating application was filed in this Court by Todd, acting by his litigation guardian Russell James Leneham, a director of Quinn & Scattini, seeking relief as against Michael. On the same day, Mr Leneham, who has appeared arguing for himself today, also filed a consent to act as litigation guardian for Todd. An affidavit of Todd was also filed in support of the application. 10 The originating application seeks to establish, by declaration, that Michael holds the residuary estate of Christina, under cl 2 of the will, in trust for Todd, and a direction that Michael distribute the residuary estate to Todd and that he file an estate account and that the estate account be assessed and passed. An alternative ground of relief 15 was that another individual be appointed as trustee of the trust said to have been created by cl 2 of Christina’s will. On 12 May 2017 the Public Trustee wrote to Quinn & Scattini, setting out his reasons for opposing the proceeding and asking that it be discontinued, failing which 20 he would apply for an order removing Mr Leneham as litigation guardian. Amongst other points advanced in the letter was that the Public Trustee had formed the view that the course most likely to progress Todd’s interests appropriately was the course upon which the Public Trustee had embarked, namely, the course of obtaining a negotiated resolution with Michael. The Public Trustee’s reasoning in support of 25 that conclusion was expressed. The Public Trustee had formed the view that the construction argument that lay at the base of the originating application was not the better view of the will. The reply from Quinn & Scattini was to this effect: 30 As your client will not act to protect the interest of Todd Doleman in the estate of Christina Doleman, deceased, then Quinn & Scattini Lawyers will act to protect his interests. 35 At first blush, the following conclusions seem obvious. First, consequent upon the order of QCAT, the Public Trustee was given authority over financial matters for Todd. 40 Second, that authority permitted the Public Trustee to make the decisions that he made to terminate the retainer of Quinn & Scattini (if otherwise it had been validly entered into), and to decide not to embark upon the course of commencing a proceeding of the nature of that which Quinn & Scattini wished to commence. 45 Third, the person with proper authority to make these decisions considered them and rationally made them. -- 4 of 8 -- 5 Fourth, instead of proceeding in the way provided for by s 115 of the Guardianship and Administration Act, Quinn & Scattini and Mr Leneham took it upon themselves to ignore that authority – not to challenge it – and rather to act as though they had the authority which had been conferred upon the Public Trustee. 5 In order to gainsay those conclusions, Mr Leneham contended that sufficient authority for the course upon which he and Quinn & Scattini had embarked, was found in UCPR rr 94 and 95 which provide as follows: 94 Who may be a litigation guardian 10 (1) A person may be a litigation guardian of a person under a legal incapacity if the person— (a) is not a person under a legal incapacity; and (b) has no interest in the proceeding adverse to the interest in the proceeding of the person under a legal incapacity. 15 (2) If a person is authorised by or under an Act to conduct legal proceedings in the name of or for a person with impaired capacity, the authorised person is, unless the court orders otherwise, entitled to be litigation guardian of the person with impaired capacity in any proceeding to which the authorised person's authority extends. 20 (3) A corporation, other than the public trustee or a trustee company under the Trustee Companies Act 1968, may not be a litigation guardian. 95 Appointment of litigation guardian (1) Unless a person is appointed as a litigation guardian by the court, a 25 person becomes a litigation guardian of a person under a legal incapacity for a proceeding by filing in the registry the person's written consent to be litigation guardian of the party in the proceeding. (2) If the interests of a party who is a person under a legal incapacity 30 require it, the court may appoint or remove a litigation guardian or substitute another person as litigation guardian. Although his argument did not specifically mention it, no doubt he would also rely on s 239 of the Guardianship and Administration Act, which provides: 35 This Act does not affect rules of court of the Supreme Court, District Court or Magistrates Courts about a litigation guardian for a person under a legal incapacity. 40 The submission was made that simply by dint of taking the unauthorised step that he took and filing the consent, rule 95(1) operated in a regular way to permit this proceeding to be commenced as it was. Alternatively, I was invited to form the view that I should retrospectively validate what Mr Leneham did, because that was in the interests of Todd. 45 -- 5 of 8 -- 6 I reject those contentions. Rule 95(2) is entirely consistent with the proper course. The person who was prima facie entitled to be litigation guardian – if litigation was to be commenced on behalf 5 of Todd – was the Public Trustee. True it is that rule 95(2) does not say that no one else is entitled to be litigation guardian. But it seems to me that before embarking upon the course taken, the appropriate course was either – (a) to challenge the decision of the Public Trustee by taking the steps that could have been taken under the Guardianship and Administration Act, or 10 (b) to approach the Court and to ask the Court to exercise such inherent jurisdiction as the Court might have to make decisions on behalf of Todd, notwithstanding the appointment of the Public Trustee. Assuming, without deciding, that in an appropriate case the demerits of a decision 15 apparently taken by the Public Trustee duly appointed under the QCAT Act might be so obvious as to warrant the Court authorising someone to commence a proceeding notwithstanding no interference being made in the authority of the Public Trustee, it does not seem to me that there is sufficient merit in the contention, which Mr Leneham is arguing, as to the misjudgement allegedly formed by the Public Trustee 20 as to warrant that interference. I accede to the application to remove Mr Leneham as litigation guardian and to dismiss the proceeding commenced in the way that it was commenced. 25 … HIS HONOUR: Had the application by the Public Trustee failed, then Mr Leneham, purporting to act as litigation guardian of Todd, would have pressed ahead with the application for final relief under the originating application. 30 The Public Trustee, for his part, had by letter of 12 May sought Mr Leneham’s agreement that he discontinue the originating proceeding, flagging the Public Trustee’s intention to bring an application seeking his removal and costs against him personally, that application being returnable today. 35 At the same time, conscious of the fact that the originating application was listed for determination today, the solicitors for Michael wrote to Quinn & Scattini on 15 May 2017 explaining that they had formed the view that Mr Leneham was in a position of conflict between his interest in obtaining the outstanding fees not paid, reference to 40 which I have already made, and his duty to act on behalf of his purported client, Todd. In reliance on that proposition, the proposition that there was no merit in the proceeding in any event, and the proposition that if the Public Trustee’s application was successful, Michael would have been unnecessarily put the time and expense of preparing to respond to the originating application and appearing at the hearing, 45 Michael solicitors flagged an application for orders that the originating be dismissed, and that costs be paid personally on an indemnity basis. -- 6 of 8 -- 7 The Public Trustee having succeeded, seeks an order that costs be paid by Mr Leneham personally on an indemnity basis. Michael also seeks such an order. That the costs would have to be paid by Mr Leneham personally, flows from the character of the way in which he purported to act. That is not presently the issue. 5 The issue is presently whether I should order the costs be paid on the standard basis or on the indemnity basis. From the Public Trustee’s point of view, the argument essentially is that the conduct necessitating the application reflects decisions made in a way that can be regarded as 10 high-handed, intermeddling with their authority, and flying in the face of proper procedural course. Essentially, Mr Leneham embarked upon a procedural course that, properly advised, he should never have embarked upon. Counsel for Michael essentially embraces the same argument, although he also asks 15 me to infer that the originating application was being pursued for an improper motive, namely effective recovery of the unpaid costs. I am not prepared to draw that inference. Counsel for Michael also seeks to rely on the argument about the underlying merits of the claim. Although I have said I am not persuaded that the strength of the claim was such that I would interfere with the nature of authority and 20 representation that flowed from the QCAT order, I am not prepared to form the view that the merits of the underlying proceeding alone would be such as would attract an indemnity costs order. The factors that do seem to fit within the proper approach to such orders are the factors to which the Public Trustee has pointed. 25 For his part, Mr Leneham drew my attention to material which reveals that Todd, who is the firm’s client in relation to criminal matters, has actively pursued Quinn & Scattini, seeking updates upon the application and seeking – after the Public Trustee terminated their retainer – Quinn & Scattini’s help in getting his application against the estate to proceed. Todd asked whether Quinn & Scattini would apply to QCAT 30 to remove the Public Trustee as his administrator. It is evident that, in my view, the decision made not to take that course, or a lesser course similarly framed to challenge the decisions made by the Public Trustee, was a mistake. The question is whether it is such a mistake as warrants an indemnity costs 35 order. I think the better view is that the conduct of ignoring proper procedure and taking it upon themselves to commence the proceeding was high handed, and was a decision that ought never have been made. I think it is an appropriate case for indemnity 40 costs. … HIS HONOUR: I make an order in terms of the draft provided by me and amended 45 in the following way: (a) Paragraph 4: I will delete the words, “Counsel's opinions provided to the Court by the Public Trustee of Queensland,” and otherwise it will remain the same. -- 7 of 8 -- 8 (b) I will insert a paragraph 3A that reads: Orders that Russell James Leneham pay the costs of the respondent of the proceeding on the indemnity basis. 5 ______________________ -- 8 of 8 --