Beecham v Saria & Anor [2012] QDC 14

DISTRICT COURT OF QUEENSLAND CITATION: Beecham v Saria & Anor [2012] QDC 14 PARTIES: LESTER JOHN BEECHAM (Applicant) v PETER SARIA (AS EXECUTOR OF THE ESTATE OF BRUCE EARL BEECHAM, DECEASED) (First Respondent) and CATHERINE ANNE BEECHAM AS LITIGATION GUARDIAN FOR NICHOLAS JOHN BEECHAM, SAMUEL TOM BEECHAM AND CAITLIN MAY BEECHAM (Second Respondent) FILE NO: 4019/10 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 14 February 2012 DELIVERED AT: Maroochydore HEARING DATE: 20 December 2011 (at Brisbane) JUDGE: Long SC, DCJ ORDER: 1. Pursuant to rule 98 of the Uniform Civil Procedure Rules 1999, the compromise of the application is approved. 2. That provision be made for the applicant from the estate of the late Bruce Earl Beecham, deceased, by payment to the applicant of a one-quarter share of the residuary estate. 3. That pursuant to section 41(3) of the Succession Act 1981, the legacy in clause 4 of the Will is exonerated from the incidence of the payment of the provision for the applicant. 4. The costs of all parties of and incidental to the applications, as agreed or assessed, are to be paid out of the estate on the indemnity basis. 5. That the opinion of Counsel for the Litigation Guardian of the minor beneficiaries, tendered at -- 1 of 9 -- 2 the hearing of the application for sanction, be placed in an envelope to be sealed and marked “Not to be opened without an order of a Judge of this Court”. CATCHWORDS: FAMILY PROVISION APPLICATION — need for court order to finalise proceedings – significance of agreement between the parties as to orders – sanction of a compromise involving a minor. LEGISLATION Succession Act 1981, s 41(1), (1A), (3). CASES: Affoo v Public Trustee of Queensland [2011] QSC 309. Bartlett v Coomber [2008] NSWCA 100. Fowler v Gray [1982] Qd R 334. Re Barbour’s Settlement [1974] 1 All ER 1188 Vigolo v Bostin [2005] 221 CLR 191. Watts v Public Trustee of Queensland (as executor of the estate of Neta May Bruigom) [2010] QSC 410. Yalda v Penfold & Anor [2012] QDC 13.. COUNSEL G.R. Dickson on behalf of the Applicant. S.J. Doblo on behalf of the First Respondent D.J. Morgan on behalf of the Second Respondent. SOLICITORS: Elliott & Harvey on behalf of the Applicant. Gleeson Lawyers on behalf of the First Respondent. Harvey & Co on behalf of the Second Respondents Introduction [1] On 23 December 2010, the applicant filed an originating application seeking provision, out of the estate of the deceased, pursuant to s 41 of the Succession Act 1981. [2] The Applicant is an adult and the only child of the deceased, who died on 30 March 2010, leaving a will dated 15 September 2005. On 22 December 2010 probate for the will was granted to the First Respondent, one of the executors named therein. [3] The deceased had divorced his wife (the mother of the applicant), Gloria Ann Beecham, and she has since died, on 1 September 2010. -- 2 of 9 -- 3 [4] The estate has an estimated net value, before costs, of about $400,575 and the effect of the will is to: (a) call in a loan of $13,500 made to the applicant and for those funds to form part of the residuary estate; (b) call in a loan of $10,000 made to the deceased’s nephew, Wayne Kenneth Beecham and to divide the funds: (i) to Wayne in the sum of $5,000; and (ii) to Bernie Bruce Beecham and Janelle Beecham (the deceased’s nephew and his wife) in the sum of $5,000; (c) give the personal property of the deceased in his house at 77 Wecker Road, Mansfield to the applicant; and (d) give the residuary estate (including the proceeds of the sale of the property at 77 Wecker Road, Mansfield), on trust, to the applicant’s children, in equal shares and contingent on them attaining the age of 21 years) [5] The bequest in respect of the residuary is subject to expressed powers of maintenance and advancement during the minority of any beneficiary.1 There is no provision in the will as to what is to occur to the remainder of any part of the residue, should the condition ultimately not be fulfilled, in the case of any beneficiary. [6] The residuary beneficiaries are the three children of the applicant and his wife, Catherine Anne Beecham: Nicholas John Beecham (aged 10 years); Samuel Tom Beecham (aged seven years) and Caitlyn May Beecham (aged five years). On 8 September 2011, the abovenamed Second Respondent, filed a consent to act as the Litigation Guardian in this proceeding for each of her three children. 1 in any event Part 5 of the Trusts Act 1973 applies so as to both allow and regulate what may occur by way of maintenance and advancement. -- 3 of 9 -- 4 The Application [7] Accordingly, the applicant is the only eligible applicant who could apply pursuant to s 41 of the Succession Act 1981. The usual directions order has not been made in this matter, as settlement negotiations began at an early stage and the proposed outcome includes the exoneration of the gifts to Wayne, Bernie and Janelle Beecham (which gifts are made in clause 4 of the will), from the incidence of any order made for provision for the applicant, from the estate. Accordingly the only interests that are thereby brought into conflict are those of the parties. [8] This matter came before me in the Applications List in Brisbane, on 20 December 2011, consequently to an application filed by the Litigation Guardian on 14 December 2011. The gravamen of that application was to seek that effect be given to the compromise or settlement, agreed by the parties to this proceeding. That application is made in recognition of the requirement that the relief provided pursuant to s 41 of the Succession Act 1981 may only be achieved by Court order and, as has been recently observed in Affoo v Public Trustee of Queensland,2 such orders are made by exercise of discretion of the court. [9] I have set out the principles which are to be applied to this exercise of the Court’s discretion, with particular regard to the significance of an agreement or compromise of the parties as to an appropriate outcome and with regard to the additional circumstances or complication of the involvement of minors3, in Yalda v Penfold & Anor4 and I will not repeat that recitation here. [10] It suffices to note that there are the separate considerations of: the protective function of the court in sanctioning or approving the settlement of compromise having regard to whether the settlement or 2 The citation which is [2011] QSC 309 at [24]. 3 as a example of a person regarded as being under a legal disability and requiring the involvement of a Litigation Guardian to protect that person’s interests. 4 [2012] QDC 13, a judgment also delivered today. -- 4 of 9 -- 5 compromise is, in the circumstances, reasonable and in the interests of the person(s) under a legal disability;5 and whether the Court’s discretion to make the orders proposed, pursuant to s 41 of the Succession Act 1981 will be so exercised. [11] Particularly, in relation to the second of these considerations, it suffices to note that although there is a discretion to be exercised, once the qualifying requirements are satisfied, the compromise of the parties is a particularly significant factor and generally and in the absence of any concern as to the failure to effect the specific legislative policies or some abuse of process or other offence of public policy, it can be expected that a compromise of the relevant parties will be given effect.6 Consideration of the application [12] In support of his application, the applicant provided evidence directed at the requirements of s 41(1) and (1A) of the Succession Act 1981, including that: (a) he is presently 44 years of age (DOB 16/3/1967) and has been married for about 15 years; (b) the loan made to him by the deceased and referred to in the will, was forgiven by the deceased prior to his death; (c) the applicant and his wife own their residence, which is valued at $500,000 and is subject to mortgage debt of $110,000. That debt represents recent borrowings to assist with medical and other expenses and repairs and maintenance to the property costing about $51,000. They also own an investment property of an approximate value of $400,000 and which is subject to a mortgage debt of $210,000. There is a rental income from that property and a small net profit after expenses7; 5 See Fowler v Gray [1982] Qd R 334 at 349. 6 See in particular: Affoo v Public Trustee of Queensland [2011] QSC 309; Bartlett v Coomber [2008] NSWCA 100 and Watts v Public Trustee (as executor of the estate of Neta May Bruigom) [2010] QSC 410. 7 estimated at $36.00 per week. -- 5 of 9 -- 6 (d) until 26 August 2011 he was employed as a sales representative at a salary of $60,000 per annum. At the time of hearing this matter, he was still seeking new employment. He has superannuation entitlements of approximately $120,000; (e) prior to the cessation of the applicant’s employment, his wife had been required to give up her work as a casual beauty therapist, in order to care for their son Samuel, who has been diagnosed with Pervasive Development Disorder and even then, their identified family expenses exceeded their income; (f) the applicant’s health is described as average, with his being prescribed medications for depression and anxiety since the passing of his parents; (g) the applicant’s relationship with his father had been strained. The applicant and his wife had a falling out with the deceased in 2000 and this had never been completely reconciled. The applicant describes his father as a difficult man with whom to live and that the deceased had suffered from depression for most of his adult life. After finishing school the applicant had worked for some years with his father, who was a self-employed carpenter and despite what he describes as the falling out, he maintained contact with the deceased and in the later years assisted him with health and welfare issues by visiting him and taking him to medical appointments. About two years prior to his death the deceased gave his registered motor vehicle (valued at approximately $6,000) to the applicant. (h) The applicant’s mother had been badly affected by his parent’s separation and divorce and for about 3 or 4 years after the separation, the applicant was not in contact with her. But after that, he had maintained a good relationship with his mother, until her death and he is the sole beneficiary of her estate, which has an approximate value of $179,000. -- 6 of 9 -- 7 [13] The material filed by the Litigation Guardian simply confirms the accuracy of the evidence provided by the applicant and attests to her instructions to her solicitors to accept the offer of compromise having considered the advice obtained by those solicitors from counsel. [14] The compromise is attested to by both the solicitor for the Litigation Guardian and the First Respondent. The effect of the agreement is that the applicant be provided with a one quarter share of the residuary estate. Effectively, therefore, the proposal is that all other bequests under the will are to be exonerated from the incidence of the payment to be ordered as provision for the applicant8 and the loan to the applicant is to be accepted as having been forgiven. Conclusion [15] The modest value of the estate and the extent to which it may be depleted by further incidence of legal costs, if the application were further defended, are clearly salient circumstances. However, it must also be recognised that the resolution of this matter is not without difficulty. [16] First there is a natural concern as to the potentiality of the position of the Litigation Guardian to be conflicted by her association with and dependence on the interests of the applicant. However it is clear that the Litigation Guardian has both taken and acted upon legal advice in respect of this matter9 and her solicitor has here attested to a view, having considered the advices of counsel, that all relevant considerations have been considered and that the proposal arising from the compromise is in the interests of the children. Emphasis is placed upon the early resolution and the extent to which this preserves the estate from the incidence of legal costs. [17] Secondly, there is the consideration that the applicant’s claim, whilst having an identifiable basis, is not without complication to the threshold question of need. That is and noting that he does not claim as a dependant of the deceased at the time of death, as to whether he may establish that adequate provision has not been made 8 see Succession Act 1981, s 41(3) and (4). 9 which role necessarily involves a duty of candour and disclosure in protection of the interests of the minors: see Re Barbour’s Settlement [1974] 1 All ER 1188 at 1191. -- 7 of 9 -- 8 for his proper maintenance and support. However, it must be recognised that the word ―proper‖ imputes value judgment and may be susceptible to varying conclusions, depending upon how relevant considerations might ultimately be weighed. [18] Thirdly, there are the somewhat contradictory considerations that whilst strictly the application must depend upon the need for proper maintenance and support of the applicant and not the need for maintenance and support of his children10, in a practical sense the application is dominated by the applicant’s desires and needs for providing for his family in the immediate future as well as the longer term. It can of course be noted that the provision of the means whereby the applicant may be able to meet the repayment of debt secured over his assets and even to redeem such debt, is primarily a benefit to him but is also of considerable benefit to the circumstances of his young family. [19] There is no need to discuss the evidence in any further detail, as it is apparent that there was a basis for the originating application11 and the position resolved by the parties necessarily implies that there is now sufficient acceptance of or, at least insufficient disputation about these and other relevant circumstances, to allow conclusions that adequate provision has not been made for the proper maintenance and support of the applicant and that some provision be made out of the estate, for him.12 [20] In the circumstances, I am satisfied that the agreed proposal of the parties, as to the provision from the estate for the applicant, is within an appropriate range having regard to the circumstances relevant to the originating application. [21] I am further satisfied that the compromise of this claim, on that proposal, is also to be reasonably regarded as in the best interests of the minor beneficiaries. 10 because that is provided for in respect of their bequests: see [5] above. 11 having regard to the requirements of s 41(1) and (1A) of the Succession Act 1981. 12 in her affidavit, the solicitor for the First Respondent, expressly concedes this point. -- 8 of 9 -- 9 [22] Accordingly the order of the Court is: 1. Pursuant to rule 98 of the Uniform Civil Procedure Rules 1999, the compromise of the application is approved. 2. That provision be made for the applicant from the estate of the late Bruce Earl Beecham, deceased, by payment to the applicant of a one-quarter share of the residuary estate. 3. That pursuant to section 41(3) of the Succession Act 1981, the legacy in clause 4 of the Will is exonerated from the incidence of the payment of the provision made for the applicant. 4. The costs of all parties of and incidental to the applications, as agreed or assessed, are to be paid out of the estate on the indemnity basis. 5. That the opinion of Counsel for the Litigation Guardian of the minor beneficiaries, tendered at the hearing of the application for sanction, be placed in an envelope to be sealed and marked ―Not to be opened without an order of a Judge of this Court‖. -- 9 of 9 --