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Foster v Takai[2016] QDC 329

DISTRICT COURT OF QUEENSLAND

CITATION:

Foster v Takai [2016] QDC 329

PARTIES:

THOMAS GERARD FOSTER

(plaintiff)

v

VIVIEN SAPHIA TAKAI

(defendant)

FILE NO/S:

3 of 2016

DIVISION:

Civil

PROCEEDING:

Trial

ORIGINATING COURT:

District Court at Cairns

DELIVERED EX TEMPORE ON:

1 December 2016

DELIVERED AT:

Cairns

HEARING DATE:

1 December 2016

JUDGE:

Morzone QC DCJ

ORDER:

  1. I give judgment to the plaintiff in the sum of $111,947.81.
  2. The defendant will pay the plaintiff’s costs of and incidental to the proceeding, including reserved costs, to be assessed on the standard basis.

CATCHWORDS:

SUCCESSION – INTESTACY AND DISTRIBUTION ON INTESTACY – where intestate not survived by issue but is survived by both parents – whether defendant as administratrix has wrongly distributed trust property to herself

Legislation

Succession Act 1981 (Qld), s 35

Trusts Act 1973 (Qld), s 113

Cases

Public Trustee v Bednarczyk & Kijas [1959] SASR 178

Ryan v Anaru [2010] WADC 100

Watanabe v Carbone (1997) 18 SR (WA) 131

Goldstein v Salvation Army Assurance Society (1917) 2 KB 291 

COUNSEL:

J. Sheridan for the plaintiff

The defendant appeared on her own behalf

SOLICITORS:

Vandeleur & Todd Solicitors for the plaintiff

  1. [1]
    Since the sad death of their son, the plaintiff and defendant parents have been grappling with the aftermath and administration of his estate, which has been further overlayed by their own disputation, as a consequence of the breakdown of their own relationship some years before. In this proceeding, the plaintiff has sued the defendant to recover trust property distributed by the defendant in her capacity as administratrix of the deceased’s estate.
  1. [2]
    The claim and statement of claim sought $156,875, together with interest and costs. However, that amount has been adjusted, taking into account a mathematical error, which achieves then an amount of $144,375 for the claim and the claim for interest and costs remain.
  1. [3]
    The proceeding reached this stage as a consequence of the failure, by the defendant, to file a defence in the appropriate form and the plaintiff, having obtained judgment in default of the filing of a notice of intention to defend, on the basis that damages would be assessed. I dealt with that application on a separate occasion, with reasons given on 16 September 2016.

Background

  1. [4]
    The plaintiff was the father of the deceased who died on 31 January 2011. The defendant is the deceased’s mother. The deceased died intestate without spouse or issue.
  1. [5]
    On the 12th of March 2013, the defendant was granted letters of administration of the estate of the deceased. As administratrix of the estate, the defendant had duties to preserve, protect and administer the estate in accordance with the Succession Act 1981 (Qld) and the Trusts Act 1976 (Qld), which required her, amongst other things:
  1. (a)
    To only pay proper and reasonable expenses of the estate; and
  1. (b)
    Where relevant, to make a distribution, in accordance with schedule 2, part 2 of the Succession Act 1981. 
  1. [6]
    The latter requirement arose as a consequence of the deceased having died intestate, without spouse or issue.
  1. [7]
    Section 35(1) of the Succession Act provides:
  1. (1)
    Subject to subsection (2) and Division 3, the person or persons entitled to take an interest in the residuary estate of an intestate and the interest in that estate which that person is or those persons are entitled to take, shall be ascertained by reference to schedule 2 according to the facts and circumstances existing in relation to the intestate.
  1. [8]
    Section 35(2) relates to circumstances where a person entitled to take under a residuary estate of an intestate does not survive the intestate for a period of 30 days. That is not applicable here. Pursuant to 2, of schedule 2 part 2, in circumstances where the intestate is not survived by issue, but is survived by a parent or both parents, the way in which the intestate’s residuary estate is to be distributed is:

The parent is entitled to the whole of the residuary estate, or, if both parents survive the intestate, the parents are entitled to the whole of the residuary estate in equal shares.

  1. [9]
    The deceased’s estate comprised of mainly financial assets and some other personal effects and property. The significant estate property comprised:

Cash received from Western Australian police   $61.85

Proceeds of income protection policy $26,709.89

Proceeds of NAB account/s  $55, 125.55

C-Bus Superannuation death benefits  $236,367.73

Toyota LandCruiser Prado (4WD)  $8500 (estimate value)

Heavy duty industrial welder  $9000 (estimate value)

2 x Tool boxes with tools and welding material  $1500 (estimate value)

Top of the range - Kangaroo car jack  $250 (estimate value)

Total $337,515.02

  1. [10]
    Solicitors were engaged on behalf of the estate. They were located in the State the deceased died and, in particular, in Perth. The defendant who is a Torres Strait Islander woman resided ordinarily on Thursday Island. She was required, as a consequence of her role, to communicate and provide instructions to the estate solicitors from time to time. The plaintiff who ordinarily resided on Horn Island and is also a Torres Strait Islander played little part in the administration, having relinquished any such responsibility in favour of the defendant. It is common ground that the defendant made no distribution or payment to the plaintiff out of the estate.
  1. [11]
    During the course of former Supreme Court proceedings, the defendant filed a schedule setting out details of expenditure made from and for the estate. The parties dispute those payments for the most part and they have become the focal point of this proceeding.
  1. [12]
    The estate solicitors have distributed all of the funds relating to the matter to the defendant and they have closed their file on the basis that, for their part, the administration of the estate is now complete with all liabilities having been paid, including tax, and the balance then transferred to the defendant in her capacity as administratrix of the estate.

The Issue

  1. [13]
    The determinative issue in this case is whether the defendant has wrongly distributed trust property to herself and the amount which ought be recovered by the plaintiff, if any.

Wrongful Distribution

  1. [14]
    Where a trustee has wrongfully distributed trust property, the beneficiaries who suffered loss as a consequence of that wrongful distribution may recover that loss against the recipient as well as against the trustee.[1]  However, action may not be taken against the recipient until all remedies against the trustee have been exhausted.[2]  
  1. [15]
    In this case, the plaintiff sues the defendant on the basis that she received trust property having distributed such money to herself in her capacity as administratrix of the estate. The plaintiff’s claim is for one-half of the amounts so distributed, including amounts paid by the defendant after that distribution to third parties. The claim is made, therefore, in respect of the residuary estate referred to in s 35 of the Succession Act, set out above. 
  1. [16]
    Residuary estate is defined in s 34 as follows, relevantly:

Residuary estate in relation to an intestate means –

(b)  in any other case – the property of the intestate, which is available for distribution after payment thereout of all such debts as are properly payable thereout. 

  1. [17]
    Debts are defined in s 5 in these terms:

Debts include funeral, testamentary and administration expenses, debts and other liabilities payable out of the estate of a deceased person.

  1. [18]
    The plaintiff’s claim is particularly focused upon expenses described in the schedule prepared by the defendant in the Supreme Court proceedings. These are particularised in the Statement of Claim as follows:

Date

Expense

Total Cost

26/01/2011 to 10/07/2015

Assistance to families with airfares, accommodation and transport

$8,500.00

26/01/2011 to 10/07/2015

After Funeral Expenses

$2,500.00

26/01/2015 to 10/07/2015

Cultural Grievance

$25,000.00

26/01/2015 to 10/07/2015

Costs of preparation for 1st Christmas and sharing of belongings

$2,500.00

26/01/2015 to 10/07/2015

Costs of Advertising (thank you notices and anniversary of death notice for 4 years)

$2,000.00

26/01/2015 to 10/07/2015

Costs of material & supplies for CD recording, printing and invitations

$7,500.00

26/01/2015 to 10/07/2015

Costs of shirts and designs (“in memory of Brendan Thomas Foster”)

$9,000.00

26/01/2015 to 10/07/2015

Contributions to Deceased’s siblings, nieces and nephews

$35,000.00

26/01/2015 to 10/07/2015

Administration Fees (maintaining deceased’s affairs, liaising with coroners, solicitors and others)

$24,300.00

26/01/2015 to 10/07/2015

Costs of well-being (health issues due to stress)

$20,250.00

26/01/2015 to 10/07/2015

Costs of gravesite maintenance

$40,950.00

26/01/2015 to 10/07/2015

Support with general living costs (hardship)

$15,750.00

 

Total

$223,750.00

  1. [19]
    The plaintiff’s counsel relies upon the learned work of Professor De Groot in De Groot’s Wills Probate & Administration Practice where the learned author at paragraph 402 said this about estate expenses:

“Whoever arranges the funeral is entitled to reimbursement of the expenses incurred out of the estate of the deceased in priority to all other claims.

As indicated, the arrangements made must be appropriate, bearing in mind the estate of the deceased, so that, unless there is a specific direction in the will, reimbursement of extravagant funder expenses would not be allowed out of the estate (Stacpoole v Stacpoole (1816) 4 DOW 209 at 227).”

  1. [20]
    Reliance is also placed upon the commentary in Treaties on Wills by Jarmon (1951) where the learned author, at 1891, said:

“No more is allowed for the funeral than is necessary, having regard to the degree and condition of life of the deceased ...  Funeral expenses do not include mourning … or the cost of a tombstone”. 

  1. [21]
    In Public Trustee v Bednarczyk & Kijas [1959] SASR 178 at 180, the honourable Mayo J considered what constituted funeral expenses in the context of the South Australian legislation.  He said:

“The word funeral is loosely taken to comprehend the disposal of human remains, including accompanying rites and ceremonies, that is to say, the procedure of and appertaining to, burial or cremation, in the course of which the body is prepared for burial and conveyed by cortege to the necropolis.  Such initial stages as acquisition of burial plot, public notice, obtaining a certificate of death, commissioned to cremate or bury, will form part of the procedure and the cost will be funeral expenses.”

  1. [22]
    Reference was also made by plaintiff’s counsel to the Western Australian decision of His Honour Stone J in Ryan v Anaru [2010] WADC 100.  In that case, His Honour considered a claim for the reimbursement of the funeral meal under the Fatal Accidents Act 1959.  When considering the question, His Honour accepted and applied the observations made by His Honour Barlow DCJ in Watanabe v Carbone (1997) 18 SR (WA) 131 to the effect that funeral expenses should be assessed objectively, connected to the burial, reasonably necessary and tempered with fairness for the defendant. 
  1. [23]
    As to reasonableness, in Goldstein v Salvation Army Assurance Society (1917) 2 KB 291 the Court held that:  “Funeral expenses must be reasonable, regard being had to the circumstances of the case in question.”
  1. [24]
    It seems to me that those matters are applicable to the circumstances of this case in relation to the Queensland legislation. It is, in my view, inescapable that such considerations necessarily involve circumstances of the particular case, including matters of religious and cultural significance in the ceremonies connected to the burial and reasonably necessary for their fulfilment.

Discussion

  1. [25]
    The schedule relied upon by the plaintiff, being that prepared by the defendant in relation to former Supreme Court proceedings, sets out various expenses with variable detail. Some are particular and precise involving a relevant date, accurate detail, a tax invoice, receipt, method of payment and the amount. Others are expressed in more general terms.
  1. [26]
    Some expenses, set out in the schedule for the period of 7 February 2011 to 5 November 2013, are undisputed, and amount to $18,386.04.
  1. [27]
    The amounts which are otherwise set out in the schedule and are not the subject of a dispute are estimates described as follows in the schedule as having been incurred between 26 January 2011 and 10 July 2015 as follows:

Funeral hire costs of hall, marquees, tables, chairs, tarps etc…

$5500 (estimate)

Costs for preparation for tombstone unveiling and feasting (includes purchases of 2 x gas burners and 4 kg gas bottle, tarps, tubs, esky, cooking utensils, family meetings, fundraisers etc…)

$3500 (estimate)

Purchases - items of gifts such as electrical goods, materials, manchester, mats, novelties etc…

$3000 (estimate)

Headstone erection (including tradesmen and labour)

$3500 (estimate)

Hire costs for tombstone unveiling and feasting (includes chiller, marquee, chairs, storage etc…)

$5000 (estimate)

Total

$20,500

  1. [28]
    These items, albeit generally described, together with the specific items set out in the schedule, total $38,866.04.
  1. [29]
    The dispute, though, is in relation to the matters set out in the table contained in the statement of claim and extracted from the schedule. In particular, it is alleged that the amounts wrongfully distributed by the defendant, as trust property to herself (albeit further expended) amounting to $233,750.[3]
  1. [30]
    In relation to those disputed payments the plaintiff claims fifty per cent of $223,750 and further claims fifty per cent of $90,000, which was received by way of interim distribution.[4] 
  1. [31]
    These matters would be considered in the context of the defendant’s dealings with the estate solicitors. In the defendant’s affidavit, reliant upon Supreme Court proceedings, she deposes to the schedule which I have described variously above.
  1. [32]
    She then deposes to the receipt and authorisation of the Final Statement received from the estate solicitors. That statement is undated, except for the date of the authority ascribed to by the defendant. The solicitors’ statement purports to be a final statement of the estate of the deceased, and I extract it in full, as follows:

ESTATE OF BRENDAN THOMAS FOSTER

FINAL STATEMENT

Receipts

 

$

$

24.03.11

Cash received from WA Police

 

61.85

03.05.11

Proceeds of Suncorp income protection policy

 

26,709.89

21.05.13

Proceeds of NAB Accounts 086-642 59003 2538

 

55,125.55

12.06.13

C-Bus superannuation death benefits

 

236,367.73

Total receipts

 

 

318,265.02

Payments

 

 

 

10.02.12

Payment to estate of Brendan Foster (funeral)

11,260.45

 

04.02.12

TressCox Lawyers (monies on account)

1,000.00

 

20.03.13

TressCox Lawyers (payment of account)

3,043.64

 

05.03.14

John Woodward Accountants fees

1,210.00

 

05.03.14

Australian Taxation Office

57,484.40

 

Total payments

 

73,998.49

 

Previous distributions

 

 

 

09.08.13

Distribution to Vivien Saphia Takai

90,000.00

 

09.08.13

Distribution to Thomas Gerard Foster

90,000.00

 

Total distributions

 

180,000.00

 

Final payment – Culshaw Miller Lawyers Account

(including disbursements)

11,377.63

 

Proposed final distribution

Total available for final distribution:

1/2 share to Vivien Saphia Takai

1/2 share to Thomas Gerard Foster

To be distributed:

 

 

26,444.45

26,444.45

52,888.90

 

TOTAL

318,265.02

 

I, VIVIEN SAPHIA TAKAI,as Administrator of the Estate of BRENDAN THOMAS FOSTER hereby authorise Culshaw Miller Lawyers to make an (sic) final distribution of $52,888.90 to the Estate of Brendan Thomas Foster and I CONFIRM that I will attend to the distribution as set out in this statement.

  1. [33]
    The plaintiff relies upon this document as an acknowledgement, or admission, of various matters contained in it. In particular, the authority provided by the defendant, signed and dated on 4 June 2014, confirms that she would attend to the final distribution of $52,888.90 as set out “in this statement.” That could only be an affirmation of the proposed final distribution being a payment in equal shares of that amount to the plaintiff and the defendant, which equates to $26,444.45. Of course, that distribution can only be ascertained by the calculation in the content of the document itself, including the previous distributions of $90,000 to each party.
  1. [34]
    The defendant argues that by the time of that confirmation she did not appreciate that she was entitled to reimbursement of proper expenses incurred by her in the course of the administration of the estate. There is significant force in that argument. The only payment of funeral expenses contained in the Final Statement is one on 10 February 2012, of $11,260.45. However, the defendant’s schedule refers to a greater distribution of money for purposes associated with the funeral. She argues that such expenses were reasonably necessary and proper in fulfilment of the cultural matters relevant to burial of the deceased, a Torres Strait Islander man.
  1. [35]
    As I said above, consideration of debts as are properly payable, and therefore viable for reimbursement to an administrator, ought be considered in the context of the religious and cultural circumstances in the particular case.
  1. [36]
    The expenses subject of this dispute are, it seems to me, well outside the appropriate paradigm of debts within the meaning of s 5, and in particular, fall outside the appropriate expenditure for the deceased’s funeral, testamentary and administration of expenses. Consequently, I am obliged to conclude that to the extent the defendant has made those payments as administratrix, they constitute a wrongful distribution of trust property to herself and to those through her who ultimate received the benefit of such funds.
  1. [37]
    In order to calculate the extent of the wrongful distribution I again turn to the Final Statement issued by the estate solicitors. The net estate in cash terms available for distribution to the beneficiaries was $232,888.90. However, I accept that the statement does not include amounts which were properly expended by the administratrix within the meaning of the Succession Act, namely, those specific and general payments which I calculated above of $38,886.04. 
  1. [38]
    Once those payments are taken into account the amount that ought to have been available for distribution to the beneficiaries is $194,002.86 of which the parties were entitled to share equally, being $97,001.43 each. It seems to me that that is the appropriate amount which ought be recovered by the plaintiff from the defendant.

Interest

  1. [39]
    The plaintiff claims interest pursuant to the Civil Proceeding Act 2011 (Qld).  Section 58 of that Act applies in the circumstances of this case such that a court may order that there be included in the amount for which judgment is given interest at the rate the court considers appropriate for all or part of the amount and for all or part of the period between the date when the cause of action arose and the date of judgment. 
  1. [40]
    In the circumstances of this case it seems to me that the defendant ought to have realised her obligations and her duty to appropriately distribute the estate of the deceased when she received the Final Statement and acknowledged its content by signing the authority on 4 June 2014. Prior to that time it is tolerably clear that the estate had not yet been finalised at least up until the last of the specific payments set out in the schedule or at the latest in the reconciliation of those payments in the same schedule. There is no doubt that the defendant’s task was a heavy one both having to endure the loss of a son as a mother, but also to administer an estate coupled with appropriately heavy burdens associated with cultural obligations.
  1. [41]
    Taking those matters into account, it seems to me that interest ought be allowed in respect of a judgment sum on and from 4 June 2014. I allow interest of $14,946.38 being four per cent of $97,001.43 for the period of 911 days from 4 June 2014.

Costs

  1. [42]
    It seems to me that costs ought follow the event of the judgment and I will order accordingly.

Orders

  1. [43]
    For these reasons, I make the following orders:
  1. I give judgment to the plaintiff in the sum of $111,947.81 (being $97,001.43 for the claim and $14,946.38 for interest).
  1. The defendant will pay the plaintiff’s costs of and incidental to the proceeding, including reserved costs, to be assessed on the standard basis.

Judge Dean P. Morzone QC

Footnotes

[1] Trusts Act 1973 (Qld), s 113(1).

[2]  See Trusts Act 1973 (Qld), s 113(2).

[3]  Statement of Claim, para 4.

[4]  Statement of Claim, para 5.

Close

Editorial Notes

  • Published Case Name:

    Foster v Takai

  • Shortened Case Name:

    Foster v Takai

  • MNC:

    [2016] QDC 329

  • Court:

    QDC

  • Judge(s):

    Morzone DCJ

  • Date:

    01 Dec 2016

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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