Cutting v Public Trustee for the Northern Territory (No 2)

• Jurisdiction: Northern Territory
• Court: Supreme Court
• Judge: Hiley J
• Judgment Date: 26 July 2018
• Neutral Citation: [2018] NTSC 51
• Docket Number: FILE NO: 45 of 2016 (21627074)
• Date: 26 July 2018

[2018] NTSC 51

SUPREME COURT OF THE NORTHERN TERRITORY

IN THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA AT DARWIN

Judgment of:

Hiley J

FILE NO: 45 of 2016 (21627074)

Between:

Phillip Frederick Cutting

Plaintiff

and

Public Trustee for the Northern Territory

Defendant

REPRESENTATION:

Counsel:

Plaintiff: M Crawley SC

Defendant: J Ingrames

Affoo v Public Trustee of Queensland [2011] QSC 309 ; Albany v Albany [2010] NTSC 25; Bartlett v Coomber [2008] NSWCA 100; Coates v National Trustees Executors & Agency Co Ltd [1956] HCA 23; Brown v Northern Territory of Australia & Brown [2005] NTSC 26; Cutting v Public Trustee for the Northern Territory [2017] NTSC 6; Edgar v Public Trustee of the Northern Territory & Anor [2011] NTSC 05; Hore v Perpetual Trustee Co Ltd [2009] NSWSC (8 June 1995); Lieberman v Morris (1944) 69 CLR 69; Masters and Anor v Cameron [1954] HCA 72; Morrison v Abbott [2012] NSWSC 320; Re Guskett [1947] VLR 212; Re Newton (1950) 76 WN (NSW) 479; Re Salmon, Deceased [1981] Ch 167; Simonetto v Dick [2014] NTCA 4; Smith v Smith (1986) 161 CLR 217, applied.

Wheatley v Wheatley [2018] WASCA 34 , distinguished.

Andre v Perpetual Trustees WA Ltd as Executor of the Will of Barbara Helen Owen Stewart [2009] WASCA 14 ; Application of Scali [2010] NSWSC 1254; Baltic Shipping Co v Dillon (1991) 22 NSWLR 1; Beattie v Beattie [2005] WASC 85 [3]; Brisbane South Regional Health Authority v Taylor [1996] HCA 25; Clayton v Aust (1993) 9 WAR 364; Coomber v Stott [2007] NSWSC 51; Daebritz v Gandy [2001] WASC 45; Drover v Northern Territory of Australia & Ebatarinja [2004] NTCA 11; Goodman v Windeyer [1980] HCA 31; White v Barron [1980] HCA 14; Pontifical Society for the Propagation of the Faith and St. Charles Seminary, Perth v Scales [1962] HCA 19; KR & LAR v Public Trustee of the Northern Territory [1996] NTSC (16 May 1996); McMahon v McMahon [1985] NSWSC (2 August 1985); Re Nassim (dec'd) [1984] VR 51 at 55; Re Hatte (1943) St R Qd 1; Richardson v Pedler [2001] NSWSC 221; Singer v Berghouse [1994] HCA 40; Spata v Tumino [2018] NSWCA 17, referred to.

Family Provision Act (NT) ss 7, 8, 9; Family Provision Act 1982 (NSW) s 7; Inheritance Act (WA); Land Title Act (NT) s 191; Supreme Court Rules (NT) r 15.08, r 25.03; Trustee Act (NT) ss 14, 15, 21

SUCCESSION — Family provision and maintenance — application for extension of time to bring a claim under s 8 of the Family Provision Act (NT) refused — delay of more than seven years — evidence and other factual material no longer available — Application dismissed.

SUCCESSION — Family provision and maintenance — agreement between husband of deceased testatrix and executors under the testatrix's will — approval of Court required — approval would not be given.

REASONS FOR JUDGMENT

(Delivered 26 July 2018)

Introduction

1 On 16 July 2006 the late Janette Kathleen Cutting (the Testatrix or Janette) died leaving a will which she had made on 2 December 2003 (the Will). No provision was made in the Will for her husband, Phillip Frederick Cutting, the plaintiff (or Phillip).

2 Janette and Phillip Cutting had been married since 1990 and lived together in a house at 6 Elliston Court, Anula (the Anula property), which Janette had purchased in 1987.

3 Janette had six children from her previous marriage, Wayne Griffin, Nardene Griffin, Dale Griffin, Stewart Griffin, Nicole Huysse and Amanda Ruzsicska. Under the Will the Testatrix left her Estate to those six children and their children. The main assets of her Estate were:

• (a) the Anula property;

• (b) her (50 per cent) share in a company Philjan Nominees (NT) Pty Ltd ( Philjan), the other (50 per cent) share being held by Phillip; and

• (c) a debt of $53,757 owing by Philjan (the Philjandebt).

4 Janette appointed as executors and trustees two of her sons in law, Peter Ruzsicska (husband of her daughter Amanda) and Frederick Huysse (husband of her daughter Nicole) (the Executors). Probate was granted to them on 4 June 2008. The total value of the Estate was stated not to exceed $1,052,524.77 based upon the affirmations of the Executors. 1 On 8 April 2008 the Executors had sworn the Affidavit of Assets and Liabilities valuing the total assets at $1,052,524.77 and estimating liabilities of $14,277.75, resulting in a net value of $1,058,247.02. 2

5 On 11 April 2007 Paul Maher, solicitor for Phillip Cutting, wrote to Maleys, solicitors for the Executors, foreshadowing a claim pursuant to the Family Provision Act (NT) ( FPA). 3 Negotiations took place between those parties over the ensuing 18 months or so. On 1 August 2008 Mr Maher proposed a settlement which involved the sale of the Anula property to Phillip for about $100,000 less than its market value, the transfer of Janette's share in Philjan to Phillip and the assignment of the Philjan debt to Phillip. 4 (I shall refer to these as the Settlement Assets.) On 16 September 2008 Maleys replied that the Executors had decided to accept that proposal. The plaintiff contends that this amounted to a binding agreement (the Purported Agreement).

6 On 12 December 2008 the Executors wrote a letter to Janette's son Dale Griffin, also copied to Janette's other four children who were still alive, and the Estate of her deceased son Stewart Griffin. The letter attached a number of documents including an “Agreement and Acknowledgement by Beneficiaries” to be signed by each beneficiary acknowledging their consent to the terms set out in a draft Deed which reflected the Purported Agreement. 5

7 Dale Griffin, Wayne Griffin, Nardene Griffin and the Executor of the Estate of Stewart Griffin (who, together with their infant children, I

shall refer to as the Majority Beneficiaries) engaged solicitors Murphy Schmidt. Murphy Schmidt wrote back to the Executors on 4 February 2009 seeking more information about the assets and liabilities of the Estate, expressing concern about the fact that no provision had been made in the proposed agreement for the deceased's grandchildren 6 and proposing that any settlement achieved be approved by the Court. 7

8 In fact the plaintiff had already asserted ownership of Janette's Philjan share on 29 February 2008 when he signed a Form 484 notifying the Australian Securities and Investments Commission ( ASIC) that he had become the owner of that share. 8 There was some delay in executing the rest of the Purported Agreement. This was partly to do with the plaintiff's inability to provide the agreed purchase monies for the Anula property and partly to do with difficulties ascertaining the financial position of Philjan. The title to the Anula property was transmitted into the names of the Executors on 2 October 2012, and a transfer to Philip was registered on 7 December 2012.

9 Meanwhile there was much correspondence between Murphy Schmidt and Maleys, the former frequently seeking more information, demanding that the Executors distribute the Estate according to the

Will and complaining about the conduct of the Executors. Eventually, on 12 December 2012, Maleys wrote three letters, one to Murphy Schmidt advising that the Executors would be renouncing their executorships, one to Paul Maher advising that Phillip Cutting should consider filing a claim under the FPA, and one to the Public Trustee requesting it to take over as Executor of the Estate. On 8 August 2013 this Court made orders removing the Executors and appointing the Public Trustee as substitute executor and trustee of the Estate.

10 On 14 May 2014 Murphy Schmidt, then representing most of the beneficiaries, wrote to the Executors, Maleys and Phillip Cutting a detailed letter setting out claims against each of them in relation to what had happened.

This proceeding and relief sought

11 Following a considerable amount of uncertainty on the part of Phillip Cutting's solicitors as to whether the Court's approval of the Purported Agreement was required, and if so whether that could only be achieved once proceedings had been brought under the FPA, this proceeding was commenced by Originating Motion filed 6 June 2016 (the Application).

12 In his Amended Originating Motion Between Parties filed 20 July 2016 ( Originating Motion) the plaintiff seeks the following orders:

1

The time permitted for the making of the plaintiff's application under s 8 Family Provision Act be extended to the date of the filing of the originating motion in the preceding. 2. Provision be made for the plaintiff out of the estate of the late Janette Cutting on the terms agreed between the plaintiff and the executors of the estate of the late Janette Cutting on or about 16 September 2008. 3. Further, or in the alternative, a declaration that the agreement made on or about 16 September 2008 between the plaintiff and the executors of the estate of the late Janette Cutting, relating to making provision out of the estate for the plaintiff, is valid and binding on the parties.

13 An application for joinder to this proceeding was made by a number of the beneficiaries of the Estate, namely three of the six children and 11 of the 13 grandchildren of the Testatrix. That Application was dismissed by Master Luppino on 17 November 2016. 9

14 The initial and main focus of counsel for the plaintiff in his submissions was the contention that the Purported Agreement is valid and binding and does not require the approval of the Court. Although this seems to be contemplated by the third of the orders sought in the Originating Motion it is clear that the parties and the Master were under the impression that these proceedings are intended to invoke the Court's jurisdiction under s 8 of the FPA. 10 During discussions with counsel at the end of the hearing I requested both parties to clearly identify in their final written submissions what orders they are seeking.

15 In his written submissions...