Allingham v Fuller & Anor [2013] QSC 81 [2013] 15 QLR

SUPREME COURT OF QUEENSLAND CITATION: Allingham v Fuller & Anor [2013] QSC 81 PARTIES: PETER GERALD ALLINGHAM (applicant) v PATRICIA JOAN FULLER (first respondent) and PATRICIA JOAN FULLER AND ALYCIA JANE SNELL AS EXECUTORS OF THE WILL OF GERALD GORDON ALLILNGHAM DECEASED (second respondents) FILE NO: BS2281/12 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court of Queensland DELIVERED ON: 2 April 2013 DELIVERED AT: Brisbane HEARING DATE: 30 August 2012 JUDGE: Daubney J ORDERS: 1. The application for summary judgment is dismissed; 2. The costs of and incidental to that application are reserved; 3. Liberty to the parties to apply for further orders and directions. CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – SUMMARY JUDGMENT – where the applicant made an originating application for compensation under s106 or, in the alternative, s 107 of the Powers of Attorney Act 1998 (“the Act”) – where the applicant had been granted leave to make the application out of time – where the first and second respondents seek summary judgment to be entered against the applicant pursuant to R293 of the UCPR – where the respondents did not file a notice of intention to defend – whether the application for summary judgment should be allowed -- 1 of 11 -- 2 Powers of Attorney Act 1998 (Qld), ss 87, 106, 107 Uniform Civil Procedure Rules 1999 (Qld), rr 4(2), 134, 291, 292, 293 Civil Proceedings Act 2011 (Qld), Schedule 1 Re Estate of Andrej Urbancic [2000] QSC 170, distinguished Smith v Glegg [2004] QSC 443, considered COUNSEL: CC Heyworth-Smith for the applicant DJ Morgan for the respondent SOLICITORS: De Groots for the applicant McCullough Robertson for the respondent [1] This proceeding was commenced by an originating application filed by Peter Allingham (“the applicant”) seeking the following: “TAKE NOTICE that the applicant is applying to the Court for the following orders – Section 106 Powers of Attorney Act 1998 1. That pursuant to section 106(5) Powers of Attorney Act 1998 the applicant be granted leave to make this application out of time. 2. That pursuant to section 106(1) Powers of Attorney Act 1998, the first respondent be ordered to compensate the estate of GERALD GORDON ALLINGHAM for the loss caused by the respondent‟s failure to comply with the provisions of the Powers of Attorney Act 1998 in the exercise of the powers under the Act („compensation sum‟); Section 107 Powers of Attorney Act 1998 3. In the alternative to orders 1 and 2, that pursuant to section 107(4) Powers of Attorney Act 1998 the applicant be granted leave to make this application out of time. 4. That pursuant to section 107(3) Powers of Attorney Act 1998, the Applicant be compensated from the estate of GERALD GORDON ALLINGHAM for the loss suffered by him by reason of the first respondent‟s dealing with the property of the deceased, while acting as power of attorney (“compensation sum”); General 5. That the first respondent pay interest at the rate of 9% per annum on the compensation sum from the date of failure to comply with the provisions [of] Powers of Attorney Act 1998 to the date of the order, pursuant to section 42(1) of Supreme Court Act 1995; 6. the costs of and incidental to the application on an indemnity basis be assessed and paid by the first respondent personally; and 7. for such further or other orders as to the Court may seem meet.” [2] In the applicant‟s supporting affidavit filed with the originating application, the applicant deposed, relevantly, to the following matters: -- 2 of 11 -- 3 (a) That he is the son of the late Gerald Gordon Allingham (“the deceased”); (b) That he has also commenced a family provision application pursuant to the Succession Act 1981 for further provision out of the deceased‟s estate; (c) That in June 2007, the deceased appointed the first respondent, Patricia Fuller, who is the applicant‟s sister, and the first respondent‟s daughters, Alycia Snell and Cassandra Fuller, as his attorneys. A copy of the enduring power of attorney, executed by the deceased, is exhibited to the applicant‟s affidavit; (d) On 1 July 2008, the deceased transferred certain of his real property to the first respondent, namely: (i) All of the deceased‟s interest in a particular sugar farm, and (ii) 75 per cent of the deceased‟s interest in a certain cattle property; (e) The deceased died on 20 November 2009, leaving a will dated 22 August 2008, on which probate was granted on 11 November 2010. [3] The applicant then said: “5. Under his last will, my father left his estate as follows: (a) His interest (namely 25%) in the properties referred to in paragraph 3(b) to me. (b) His interest in the cattle (namely 25%) grazing on his real property to me. (c) Proceeds of any life insurance policies to Patricia. (d) The proceeds of his bank accounts to his grandchildren as follows: (i) $5,000.00 to TRISTAN ALLINGHAM; (ii) $5,000.00 to COURTNEY ALLINGHAM; (iii) $5,000.00 to Alycia; (iv) $5,000.00 to RACHEL ANNETTE HARDY; (v) $5,000.00 to Cassandra; and (vi) the balance of the accounts to Patricia. (e) The rest and residue: (i) 75% to Patricia; and (ii) 25% to me. 6. If the transfer of the real property, as referred to in paragraph 3, had not taken place then I would have received the following provision under my father‟s last will: -- 3 of 11 -- 4 (a) His interest (namely 100%) in the cattle property referred to in paragraph 3(b); (b) His interest in the cattle (namely 100%) grazing on his real property; and (c) 25% of the rest and residue (the sugar cane farm referred to in paragraph 3(1) would form part of the residue). 7. I am seeking compensation under section 106 of the Act because I believe that my sister failed to comply with the Act in exercising her power as attorney for my father. 8. In the alternative, I am also seeking compensation under section 107 of the Act because of the benefit I have lost under my father‟s estate. The transfer referred to in paragraph 3 has removed property form my father‟s estate that I would have received under his last will as detailed in paragraph 6, above. 9. I crave leave under sections 106(3) and (5) Powers of Attorney Act 1998 (“the Act”) to bring this application outside of six months from the date of death of the deceased. 10. I also crave leave under section 107(4) of the Act to bring this application outside of nine months from the date of death of the deceased.” [4] The applicant‟s affidavit then went on to recount matters of personal and family history, involvement by the first respondent with the deceased prior to his death, and correspondence (particularly between solicitors) which passed after the death of the deceased. The applicant‟s affidavit confirms that the transfers of real property (i.e. the whole of the sugar farm and the 75 per cent interest in the cattle property) were signed personally by the deceased as transferor, and copies of the transfer documents were exhibited to the affidavit. [5] The applicant also deposed to matters concerning the deceased‟s state of health, saying, for example: “At the date of the inter vivos transfers, my father was living in an aged care facility at Ingham. He was aged 89 and I would describe his health as very poor. As far as I recall he was ACAT assessed as requiring high care.” [6] The applicant described in some detail the fact that his father‟s communication skills had declined since he suffered a stroke in 1994, that hearing and eyesight problems were suffered by the deceased, that the deceased suffered from a long- term drinking problem, and that he also suffered from back and mobility problems. [7] The applicant went on to give some evidence of the value of the cattle property, and then said: “53. As a result of the inter vivos transfer referred to in paragraph 3 above, the estate has not only been deprived of capital, but also of the income derived from the properties. Exhibited and marked „PGA- 15” is a copy of the partnership financial statement from 2008 to -- 4 of 11 -- 5 2010. I have been informed by the executors that the 2011 documents have not yet been prepared.” [8] On 26 March 2012, orders were made pursuant to s 106(5) and s 107(4) of the Powers of Attorney Act 1998 (“POAA”) that the applicant “be granted leave to make this application out of time”. The application for that order was not opposed. [9] It was also ordered that the parties attend at mediation. A mediator‟s certificate was subsequently filed, confirming that the parties had not resolved their dispute. [10] The present application is by the first respondent and the second respondents (who are the executors of the deceased‟s estate) seeking, relevantly, the following order: “Pursuant to r 293 UCPR summary judgment be entered for the respondents against the applicant.” Applicability of the summary judgment procedure [11] UCPR r 293(1) provides: “A defendant may, at any time after filing a notice of intention to defend, apply to the court under this part for judgment against a plaintiff.” (emphasis added) [12] This proceeding was, as has already been noted, commenced by originating application. No notice of intention to defend has been filed – the provisions of Chapter 5 of the UCPR, which govern notices of intention to defend, apply only to a proceeding started by claim – r 134. Nor has any order been made under r 14 that the proceeding continue as if started by claim. [13] Prima facie, then, the summary judgment procedure provided for by r 293 is not applicable – a defendant‟s entitlement to apply for summary judgment arises “at any time after filing a notice of intention to defend”. [14] Counsel for the respondents pointed to Re Estate of Andrej Urbancic1 as a precedent which authorised the summary judgment procedure being used in a proceeding commenced by originating application. That case, coincidentally, was also a dispute over a deceased estate. Muir J (as he then was) relevantly allowed an application by the respondent in that case for summary judgment in respect of the originating application. At the time that case was determined, however, r 293 was in materially different terms to its current formulation. In 2000, r 293(1) provided: “The defendant may at any time apply to the Court under this part for judgment.” [15] The limitation that such an application may be made “at any time after filing a notice of intention to defend” was simply not present in r 293 when Muir J decided that case, although it was to be found in r 292 (governing plaintiffs‟ applications for summary judgment). [16] True it is that r 291 provides that Chapter 9 Part 2, within which r 293 is located, applies to any proceeding and that the UCPR provide for a proceeding to be 1 [2000] QSC 170. -- 5 of 11 -- 6 commenced by, inter alia, an originating application – r 8(2).2 But the plain words of r 293, as currently formulated, make it clear that the summary judgment procedure is available only after a defendant has filed a notice of intention to defend. That occurs in a proceeding commenced by claim or, depending on the directions given by the Court, in a proceeding commenced by originating application which is ordered to continue as if commenced by claim. [17] If a respondent to an originating application wishes to contend that there ought be a summary determination of the application for final relief commenced by the originating application (for example, on the basis that, on the undisputed facts, the applicant cannot succeed as a matter of law), then the respondent could apply to have the originating application dismissed, or have the originating application listed for hearing for a determination of the final relief. [18] In my view, therefore, the summary judgment application brought by the respondents in this case was inapposite. [19] That, however, is not the end of the matter. If, as was contended by the respondents, the principal relief sought under the originating application is truly not available to the applicant as a matter of law, then it is clearly in the interests of the parties, and parenthetically of the Court, to put unmaintainable claims to rest. The relief sought in the originating application [20] The relief claimed in the originating application is set out at length above. The orders sought in paragraphs 1 – 5 are expressly and unequivocally claimed pursuant to s 106 and s 107 of the POAA. [21] Those sections provide: “106 Compensation for failure to comply (1) An attorney may be ordered by a court to compensate the principal (or, if the principal has died, the principal‟s estate) for a loss caused by the attorney‟s failure to comply with this Act in the exercise of a power. (2) Subsection (1) applies even if the attorney is convicted of an offence in relation to the attorney‟s failure. (3) If the principal or attorney has died, the application for compensation must be made to a court within 6 months after the death. (4) If the principal and attorney have died, the application for compensation must be made to a court within 6 months after the first death. (5) A court may extend the application time. (6) Compensation paid under a court order must be taken into account in assessing damages in a later civil proceeding in relation to the attorney‟s exercise of the power. 2 See also the definition of “proceeding” in Schedule 1 of the Civil Proceedings Act 2011 and UCPR r 4(2). -- 6 of 11 -- 7 (7) In this section – attorney means an attorney under – (a) a general power of attorney made under this Act; or (b) an enduring document; or (c) a power of attorney made otherwise than under this Act, whether before or after its commencement. court means any court. 107 Power to apply to court for compensation for loss of benefit in estate (1) This section applies if a person‟s benefit in a principal‟s estate under the principal‟s will, on intestacy, or by another disposition taking effect on the principal‟s death, is lost because of a sale or other dealing with the principal‟s property by an attorney of the principal. (1A) This section applies even if the person whose benefit is lost is the attorney by whose dealing the benefit is lost. (2) The person, or the person‟s personal representative, may apply to the Supreme Court for compensation out of the principal‟s estate. (3) The court may order that the person, or the person‟s estate, be compensated out of the principal‟s estate as the court considers appropriate but the compensation must not exceed the value of the lost benefit. (4) The Succession Act 1981, sections 41(2) to (8), (10) and (11) and 44 apply to an application and an order made on it as if the application was an application under part 4 of that Act by a person entitled to make an application. (5) In this section – attorney means an attorney under – (a) a general power of attorney made under this Act; o (b) an enduring document; (c) a power of attorney made otherwise than under this Act, whether before or after its commencement.” [22] Counsel for the respondents focused (understandably, I should say, in view of the applicant‟s supporting affidavit) on the transactions comprised in the transfers of the interests in the sugar farm and the cattle property. It was not in issue, and indeed it was plain on the applicant‟s own affidavit, that these transfers had been executed by -- 7 of 11 -- 8 the deceased. It was submitted that s 106 and s 107 are predicated on the power of attorney actually being used, in that: (a) Section 106(1) refers to compensation for a loss caused by the attorney “in the exercise of a power”, and (b) Section 107(1) refers to compensation for a loss caused by “a sale or dealing with the principal‟s property by an attorney of the principal”. [23] It was argued that, because the power of attorney given by the principal (i.e., the deceased) was not used to carry either of the real property transactions into effect on behalf of the principal, neither s 106 nor s 107 can apply to either transaction, and accordingly those claims must fail. [24] In my view, so far as the two land transactions are concerned, these arguments are correct. There was nothing about either of the transfers which involved the exercise of a power by the first respondent as the deceased‟s attorney, and s 106 is not applicable. [25] Section 107 is invoked if a benefit under a deceased‟s estate is lost because of either: - a sale of the principal‟s property by an attorney, or - some other dealing with the principal‟s property by an attorney. [26] Clearly enough, neither of these transactions were sales by the first respondent as attorney. Nor were they dealings with the deceased‟s property by the first respondent as the deceased‟s attorney. They were dealings by the deceased in his own property in favour of the first respondent. [27] On a proper construction of each of s 106 and s 107 of the POAA, therefore, I would find that the claims made in the originating application, to the extent that they are claims with respect to the transfer of the deceased‟s interests in the sugar farm and the cattle property, are not maintainable in law. [28] Again, however, that is not the end of the matter. [29] In his affidavit material, the applicant raised factual matters which go to the nature of the first respondent‟s relationship with the deceased in the years prior to his death. He referred, for example, to the fact that the first respondent and her husband moved into the deceased‟s farm in late 2007, and said: “Shortly after Patricia and Lionel moved to the family properties from Ingham, my father executed several codicils and wills. Each successive testamentary document diminished the benefit I was to receive from my father‟s estate whilst the benefit to Patricia increased. My father‟s apparent favouritism towards Patricia culminated in the transfers, significantly reducing the size of his estate and the share I was to receive on his death.” [30] I was informed in the course of the hearing that the applicant, in addition to bringing a family provision application, proposes to commence separate proceedings against the first respondent claiming relief on the basis that the first respondent exercised undue influence over the deceased. I was not favoured with any further detail of that other proceeding. It also seems, from argument, that the applicant would seek -- 8 of 11 -- 9 to invoke the statutory presumption of undue influence (s 87, POAA), the ambit of which was comprehensively discussed by McMurdo J in Smith v Glegg3. Nothing that I write in this judgment should be construed as in any way limiting the applicant‟s ability to pursue those claims. This judgment is concerned solely with the relief claimed under s 106 and s 107 of the POAA. [31] In that regard, however, the material does raise a further matter in respect of which it is possible (I put the matter no higher than that) that the facts, when they emerge at trial, may support the invocation of either s 106 or s 107. [32] Shortly before the hearing of this application for summary judgment, and in argument during the hearing, the applicant confirmed that the relief sought in the originating application is not limited to the land transfers. In a letter dated 28 August 2012 to the respondents‟ solicitors, the applicant‟s solicitors said: “The financial statements and tax returns provided to us under cover of your letter of 4 May 2012 reveal that prior to the death of the deceased‟s wife, Joan Allingham, the deceased carried on the cattle and cane farming enterprises in partnership with her. Subsequent to her death, it appears that the enterprises were carried on in a partnership between the deceased and the estate of Joan Allingham. At some time in 2008 or 2009, it seems that your client Patricia Fuller and her husband Lionel Fuller carried on the enterprises in partnership with the deceased. The financial statements exhibited to Patricia Fuller‟s affidavit filed 23 January 2012 (court document 7 in proceeding 8612/2010) reveal the same. The creation of this partnership (the LB & PJ Fuller & GG Allingham Partnership) is not explained in your clients‟ material and is inconsistent with the evidence of Mr Firth and the „Deed of Gift‟ exhibited to his affidavit. If your client Patricia Fuller did not give instructions with respect to the creation, conduct and accounting for the partnership in exercise of the power of attorney, then she has done so without any authority at all. If the former is the case, then our client‟s application is sound and will survive the application for summary judgment. If the latter is the case, then your client and her husband have converted or otherwise wrongfully dealt with or disposed of the property of the deceased and will be required to account for it or give relief otherwise in any event.” [33] A copy of the Deed of Gift dated 1 July 2008 made between the deceased as “Donor” and the first respondent as “Donee” was exhibited to an affidavit by the deceased‟s solicitor. By that deed, the deceased voluntarily transferred to the first respondent three quarters of his interest in the cattle property, the improvements on the property, any plant and machinery owned by the deceased, and “cattle grazing upon the said land”. [34] According to the financial statements which are in evidence before me: (a) For the year ended 30 June 2005 (and, it would seem, for prior years), a cattle trading enterprise was conducted by the deceased and his wife in partnership, trading as “G.G. & J. Allingham”, and a partnership tax return was lodged for that year; 3 [2004] QSC 443. -- 9 of 11 -- 10 (b) The deceased‟s wife having died on 27 May 2006, the cattle trading enterprise continued as a partnership between the deceased and his wife‟s estate, and was known as “G.G. & Estate J. Allingham”. Financial statements for the years ended 30 June 2006, 30 June 2007, 30 June 2008 and 30 June 2009 were prepared for that partnership, and partnership tax returns were lodged; (c) In the deceased‟s personal tax return for the year ended 30 June 2009, however, it was disclosed that the deceased had received income by way of distribution from a partnership named “Lionel B & Patricia J Fuller and Gerald G Allingham”; (d) The financial statements for the cattle trading enterprise for the year ended 30 June 2010 appear to be in the names of two partnerships: - “LB & PJ Fuller & Estate GG Allingham” and - “LB & PJ Fuller & GG Allingham” In respect of that last-mentioned partnership, the financial statements for the year ended 2010 record that: (i) for the year ended 30 June 2009, partnership profits of $123,717 were distributed, of which the deceased received $30,929 (i.e. 25 per cent); (ii) for the year ended 30 June 2010, partnership profits of $42,283 were distributed, of which the deceased received $10,571 (i.e. 25 per cent). [35] Counsel for the applicant argued: “17. Further, the evidence before the court reveals that the transfer of the deceased‟s interest in the enterprises being conducted on the properties to the partnership with Patricia and Lionel was performed either in exercise of the power of attorney or without authority at all. 18. It is not enough for the respondent to say „there was a deed of gift‟. The transfer of cattle is quite different to the creation of a partnership with ongoing obligations, including obligations concerning debts incurred by co-partners. 19. The application is sufficiently broad to encompass the partnership dealings and, accordingly, the application should fail on its merits.” [36] The point is that the Deed of Gift (which was executed by the deceased as “Donor”) only had the effect, relevantly, of transferring an interest in the cattle to the first respondent. It did not, and did not purport to, evidence the creation of a new partnership between the deceased and the first respondent and her husband. The circumstances surrounding the creation of this partnership require elucidation. If it be established that the creation and ongoing management of that partnership was effected by the first respondent exercising powers as the deceased‟s attorney, or involved a dealing with the deceased‟s property by the first respondent as his attorney, then considerations under either s 106 of s 107 of the POAA may well come into focus, at least concerning the cattle trading enterprise. -- 10 of 11 -- 11 Disposition of the matter [37] The evidence and arguments concerning the cattle trading enterprise, in my view, raise sufficient, albeit presently tenuous, reasons not to summarily dismiss the originating application in its entirety. It is clear enough, from my findings above, that the relief cannot, as a matter of law, be pursued in respect of the transactions comprised in the real property transfers. But different questions arise with respect to the cattle trading partnership. They are questions that warrant investigation, and may lead to the availability of relief under s 106 or s 107 of the POAA. In coming to this view, I am mindful of: (a) The great caution which the courts exercise when determining whether or not to summarily shut a plaintiff or applicant out of the pursuit of lawful remedies, and (b) The fact that each of s 106 and s 107 impose time limits within which applications under those sections must be filed, and these times have long passed. [38] The application for summary judgment should be dismissed. I am, however, not minded to order costs against the unsuccessful respondents, notwithstanding the fact that the procedure by which they brought these matters before the Court was inapposite. A fair reading of the supporting affidavit by the applicant made clear that his principal complaints for the purposes of the relief sought under s 106 and s 107 arose out of the land transfers. The questions concerning the cattle trading enterprise were barely mentioned in the supporting affidavit, and really only seem to have assumed some prominence in the applicant‟s case in the period leading up to the hearing of the summary judgment application. To the extent that the respondents came to Court seeking a determination of the questions concerning the real property transfers, they have been successful. On the other hand, for the reasons I have set out above, the proceeding for relief under s 106 and s 107 should be preserved at least for the purposes of allowing any relief that the applicant might prove as a consequence of dealings with respect to the cattle trading enterprise. Accordingly, it is appropriate for the costs of this application to be reserved. [39] I have already referred to the fact that there are, apparently, other proposed proceedings between these parties in which claims of undue influence are to be made. Commonsense would dictate that all the proceedings between these parties be heard together, and that directions be made to progress all of the matters to trial efficiently. I would be minded, therefore, to make the necessary orders and directions to achieve that purpose, including an order that the matters be placed on the Supervised Case List. Accordingly, I will give the parties liberty to apply in respect of any further orders and directions. [40] There will be the following orders: 1. The application for summary judgment is dismissed; 2. The costs of and incidental to that application are reserved; 3. Liberty to the parties to apply for further orders and directions. -- 11 of 11 --