Louie v Estate of Louie[2016] QDC 90

DISTRICT COURT OF QUEENSLAND

1. [1]
   There are several applications before the Court for determination.

2. [2]
   The proceedings were commenced by originating application filed on 27 June 2005. The three applicants, all children of the deceased Robert Louie, sought orders pursuant to s 41 of the Succession Act 1981 (the Act) that adequate provision be made out of the estate of their father for their proper maintenance and support. The will made no provision whatsoever in favour of the applicant children.

3. [3]
   There has been more than two years delay since the last step was taken in the proceedings. The first applicant, by application filed 24 February 2016, seeks leave under r 389(2) of the Uniform Civil Procedure Rules 1999 (the UCPR) to proceed with the originating application for a family provision order.

4. [4]
   The respondent applies under r 280 of the UCPR, by application filed 17 March 2016, for an order that the originating application for family provision be dismissed for want of prosecution.

5. [5]
   The second applicant, Geoffrey Ian Louie has since died. The Public Trustee, the executor of the estate of Geoffrey Louie, by application filed 14 March 2016 seeks an order that it be substituted as second applicant and granted leave to discontinue.

6. [6]
   There has been no appearance by the third applicant, Jessica Lee, upon this application. A letter signed by Jessica Lee was tendered. It states that she will not be continuing a claim against the estate.

7. [7]
   It is convenient to deal first with the applications regarding the second and third applicants.

Application by Public Trustee

8. [8]
   The Public Trustee as executor of the estate of Geoffrey Ian Louie, now deceased, applied for those orders that are necessary to discontinue the second applicant’s family provision claim. Counsel for the Public Trustee submitted that although a cause of action under s 41 of the Act survives for the benefit of the second applicant’s estate, there is no utility in the matter proceeding. The respondent consented to the order sought by the Public Trustee. The draft order provided for the Public Trustee’s costs to be paid out of the estate.

9. [9]
   In order to discontinue the claim, the Public Trustee had first to obtain leave to substitute for the second plaintiff. The first applicant did not oppose the course sought by the Public Trustee but questioned the quantum of costs to be allowed.

10. [10]
    The course proposed by the Public Trustee was an appropriate one. In the circumstance that the respondent consented, it was right that the order sought be granted. The Public Trustee was given leave to substitute for the second applicant in lieu of Geoffrey Ian Louie and was granted leave to discontinue the application of Geoffrey Ian Louie. The Public Trustee’s costs of and incidental to the proceedings, not to exceed $7,000.00, are to be paid from the estate of the deceased.

11. [11]
    I made those orders orally at the hearing and they have since been issued.

Application of third applicant

12. [12]
    The respondent seeks to have the application for family provision of the third applicant dismissed for want of prosecution.

13. [13]
    The third applicant has not given a notice of discontinuance or sought leave to continue the proceedings. Although there is still a solicitor on the record for the third applicant, that solicitor has advised that he no longer acts for her. There was no appearance on her behalf before the Court on this application. Although the third applicant has not been personally served in relation to this application, she was advised of the date through the first applicant and has provided a letter which was tendered. She is presently overseas but states that she does not intend to continue her application for provision.

14. [14]
    It has been held that if a proceeding cannot go on without leave and no application for leave is made, it should be struck out: Dunseath v Febriway Pty Ltd [2000] QCA 104 at p 9. Accordingly it is appropriate that the third applicant’s application be struck out for want of prosecution.

15. [15]
    The respondent seeks costs against the third applicant.

16. [16]
    From January 2008 all three applicants were represented by the same solicitors’ firm. On 24 December 2009 the respondent commenced a solemn form action and the present applicants (being defendants in respect of the solemn form action) delivered a defence and counterclaim. However, by letter dated 21 July 2011 the solicitors for the applicants advised that the first applicant would be the only applicant pursuing the proceeding. The letter advised the third applicant would no longer be pursuing her claim and a notice of discontinuance would be filed when she returned to Australia after mid-August 2011. No notice of discontinuance was filed, although in the letter tendered before me dated 14 March 2016, Jessica Lee says she previously signed a notice of discontinuance and provided it to her former solicitors for filing.

17. [17]
    It is apparent that since 21 July 2011 the matter has proceeded on the basis that the third applicant had no further interest in the proceeding. Since that time the respondent has been engaging only with actions and correspondence initiated by the first applicant Kim Louie. No or minimal additional cost would have been generated by the failure of the third applicant to file a notice of discontinuance.

18. [18]
    I note that the third applicant is the daughter of the deceased and received no provision in his will and accordingly had some basis for expecting some provision in her favour. I also note that the respondent has consented to the Public Trustee having its costs on the application for discontinuance on behalf of the second applicant.

19. [19]
    In all the circumstances I do not consider it appropriate to award costs against the third applicant. No order for costs will be made against her.

Application for leave to proceed

20. [20]
    Rule 389(2) of the UCPR provides that if no step has been taken in a proceeding for two years from the last step taken, leave of the court is required to proceed.

21. [21]
    The first applicant now seeks leave to proceed. The respondent applies for the originating application to be dismissed for want of prosecution. If leave is not granted then the application cannot proceed and it would be appropriate for it to be dismissed. As the first applicant bears the onus of proof on the application for leave to proceed, it is appropriate that application be considered first.

22. [22]
    I am of the view that the last step in the proceeding was taken on 25 June 2013 when Botting DCJ stayed the application for family provision until final resolution of the solemn form proceeding. Various correspondence did pass between the parties after that time but that correspondence did not progress that action towards finalisation and therefore did not constitute a step in the proceeding.

23. [23]
    The application for leave to proceed was filed on 24 February 2016 some two and a half years after Judge Botting’s order. The factors to be considered when determining whether or not to dismiss an action for want of prosecution or whether to give leave to proceed under the UCPR r 389 are helpfully canvased by Atkinson J, with whom the other members of the Court of Appeal concurred, in Tyler v Custom Credit Co Ltd and Ors [2000] QCA 178. Those factors include:

1. how long ago the events alleged in the statement of claim occurred and what delay there was before the litigation was commenced;
2. how long ago the litigation was commenced or causes of action were added;
3. what prospects the plaintiff has of success in the action;
4. whether or not there has been disobedience of Court orders or directions;
5. whether or not the litigation has been characterised by periods of delay;
6. whether the delay is attributable to the plaintiff, the defendant or both the plaintiff and the defendant;
7. whether or not the impecuniosity of the plaintiff has been responsible for the pace of the litigation and whether the defendant is responsible for the plaintiff’s impecuniosity;
8. whether the litigation between the parties would be concluded by the striking out of the plaintiff’s claim;
9. how far the litigation has progressed;
10. whether or not the delay has been caused by the plaintiff’s lawyers being dilatory. Such dilatoriness will not necessarily be sheeted home to the client but it may be. Delay for which an applicant for leave to proceed is responsible is regarded as more difficult to explain than delay by his or her legal advisers;
11. whether there is a satisfactory explanation for the delay; and
12. whether or not the delay has resulted in prejudice to the defendant leading to an inability to ensure a fair trial.

Her Honour went on to explain that the court’s discretion is not fettered by rigid rules but should take into account all the relevant circumstance of the particular case.

24. [24]
    On an application for leave to proceed, the application must “show that there is good reason for excepting the particular proceedings from the general prohibition.”^[1]  The court must be satisfied that continuation of the proceedings would not involve injustice or unfairness to one of the parties by reason of delay. 

Background

25. [25]
    The deceased passed away on 28 September 2004. The originating application was filed on 27 June 2005 within the required 9 month time frame. The applicant’s affidavits were filed on 11 August 2005.

26. [26]
    An application for ­­­­probate of the will was filed by the respondent on 8 August 2005 but the making of a grant of probate was prevented due to a caveat lodged by the first and second applicants. The respondent commenced solemn form probate proceedings in the Supreme Court at Townsville on the 24^th of December 2009. This was over five years from the date of death. Between May 2010 and December 2012 the parties corresponded about preparation for a without prejudice settlement conference in respect of the solemn form application. A settlement conference was held on 6 December 2012 but a negotiated settlement was not reached.

27. [27]
    The second applicant died in October 2008. On 21 July 2011 lawyers for the first and third applicants advised that the third applicant would no longer be pursuing her claim and that a notice of discontinuance would be filed when she returned to Australia in mid-August 2011. The solicitors advised that the first applicant would be proceeding with her application.

28. [28]
    Due to a delay of more than two years in progressing the solemn form proceeding, the respondent, as plaintiff in the solemn form proceeding, sought and was granted leave to proceed by order dated 4 June 2013. On 6 June 2013 the respondent filed an application to dismiss, for want of prosecution, the applicant’s application for family provision. On 21 June 2013 the first applicant filed an application for leave to proceed pursuant to r 389(2). The application by the respondent dated 6 June 2013 was dismissed by order dated 25 June 2013. That order stayed the proceedings until the final resolution of the solemn form proceedings, or until further order. Costs were reserved. The effect of the order on 25 June 2013 by Judge Botting was that a step was taken in the proceeding initiated by the applicants.

29. [29]
    On 27 November 2013 a final order was made in the solemn form proceeding and the respondent was granted probate of the will. In the period from 16 December 2013 to 11 February 2014 the parties corresponded with a view to settling proposed draft directions. Solicitors for the first applicant forwarded a draft directions order on 20 December 2013. The respondent’s solicitors proposed amendments to that order and served a revised draft directions order on 14 January 2014. On 28 January 2014 solicitors for the first applicant responded with a signed draft directions order. On 11 February 2014 solicitors for the respondent replied in the following terms:

“We acknowledge receipt of your letter dated 28 January 2014 with the draft directions order and note we are seeking further instructions from our client. We will revert to you at the earliest opportunity. In the meantime, we ask that you take no further steps with respect to the proposed directions order and we look forward to receiving your client’s affidavit material.”

Nothing further passed between the parties until 1 February 2016 when solicitors for the first applicant wrote to the respondent seeking consent to their clients proposed application for leave to proceed out of time. The first applicant’s application for leave to proceed was filed on 24 February 2016. Affidavits of the first applicant and her mother were filed on 17 March 2016.

30. [30]
    The first applicant’s solicitors acknowledge that they failed to advance the proceeding as they should have. They recognise that they could have filed an application for direction from the court seeking a timetable for conduct of the originating application before the expiry of the two years. The solicitors frankly acknowledge that the applicant was not responsible for this delay by her solicitors.

Submissions by first applicant

31. [31]
    It is submitted on behalf of the first applicant that her prospects of success are good. It is submitted that the affidavit material demonstrates neglect by the deceased as a father and failure to provide support for the applicant during his life time. The beneficiaries named in the will are not eligible applicants for the purposes of s 41 of the Succession Act 1981, and the first applicant has a moral claim in respect of the state. It is contended the first applicant has a moral obligation to care for her mother and the children of her brother, the deceased second applicant, which is relevant to her financial position. 

32. [32]
    On the issue of delay, it is submitted that the first applicant should not be held responsible for delay up until the solemn form proceeding was resolved. It is submitted delays in the proceeding are attributable to both the first applicant and the respondent, that the respondent did not commence the solemn form probate proceeding until more than five years after the date of death, and that it was necessary for the family provision proceeding to be held in abeyance pending resolution to the solemn form proceeding. Following that resolution, the first applicant sought to progress the matter by issuing draft direction orders to the respondent and on 11 February 2014 the respondent requested the first applicant take no further steps with regard to the proposed directions order. It is submitted that pursuant to the practice direction number 8 of 2001, there is an obligation upon both parties, including the respondent, to use their best endeavours to resolve any disagreement as to the draft directions order. It is submitted it was open to the respondent as the executor of the estate to progress the matter before the court. Finally it is submitted that any delay will not prejudice with respondent in obtaining a fair trial and the matter can proceed expeditiously from this point.

Submissions by respondent

33. [33]
    The respondent contends that the proceedings were commenced nearly 11 years ago the applicant has failed to take any steps in the family provision proceeding since the conclusion of the solemn form proceeding on 27 November 2013. In particular there was no correspondence from the first applicant in the period from 28 January 2014. The respondent submits that the first applicant had ample notice as an application to dismiss had previously been brought in June 2013. A lengthy delay by the first applicant has prevented the respondent from fulfilling its duties to distribute the estate in accordance with the terms of the will.

34. [34]
    It is submitted that the first applicant has poor prospects of success in the family provision proceedings. The estate is a small estate with a current value of $311,865.01. This amount will be further diminished by costs of both the solemn form proceedings and the current proceedings.

35. [35]
    It is submitted that the first applicant is in a sound financial situation with assets of $405,427, no significant liabilities, superannuation interest of $351,000 and holding a full time position with a gross income of $55,629.60 per annum. The respondent submits this means she cannot demonstrate financial need.

36. [36]
    In regard to possible prejudice, the respondent submits that the second applicant would have been a witness for the purpose of the first applicant’s application but is now deceased. It is conceded this alone would not prevent a fair trial but it is submitted that the passing of 11 years undermines the trial process, increases the cost of administering the estate and diminishes the net value of what is already a small estate.

Assets and liabilities of the estate              

37. [37]
    The evidence is that the current net value of the estate is $311,865.01 before taking into account the potential costs of the first applicant’s costs on the solemn form probate proceedings. Those costs are estimated at $55,000. That gives an estimated net value of $256,865.01. From that must be deducted the legal fees associated with the present applications.

Discussion

38. [38]
    The onus falls upon the first applicant to show there is good reason to be granted leave to proceed, the statutory period of two years having elapsed since the last step in the proceedings. The Court must have regard to all relevant circumstances of the case including the factors outlined by Atkinson J in Tyler v Custom Credit Co Ltd [2000] QCA 178. The court must determine whether the interests of justice require the case to be dismissed.

39. [39]
    Important considerations will include the nature and length of any delay, whether the delay is attributable to the plaintiff, defendant or both, whether delay attributable to the plaintiff was caused by her lawyers, what prospects the plaintiff has of success in the action should it proceed and whether or not a delay has resulted in prejudice to the defendant leading to an inability to ensure a fair trial.

Delay

40. [40]
    The originating application in this matter was filed within time but since then there has been inordinate delay in the matter proceeding. Much of that delay, however, had to do with the solemn form probate proceeding which was not concluded until some nine years after the death of the deceased. It is clear that the family provision application could not be resolved until the solemn form probate proceeding was concluded. That was recognised by the order of Judge Botting on the 25 June 2013 which stayed the present proceedings until resolution of the solemn form proceeding. Both parties have contributed to the delay in resolution of the solemn form proceeding. The applicants lodged caveats and disputed the will but the respondents failed to advance the proceedings in a timely way which required them to seek and obtain leave because of delay.

41. [41]
    Following the grant of orders in the solemn form probate proceeding the first applicant promptly sought agreement in relation to a draft directions order. Agreement was not reached between the parties and after January 2014 neither took any step to advance the matter. The first applicant’s solicitors accept reasonability for failing to take further steps after February 2014, but the respondent had an obligation in accordance with the UCPR r 5 and the spirit of Practice Direction no. 8 of 2001 to also take steps to progress the matter. The first applicant’s responsibility for the failure to progress the matter is minimised when it is recognised that the failings were by her solicitors rather than her personally. While the first applicant’s solicitors are primarily responsible for that delay I do not consider that the respondent bears no responsibility. The respondent declined to make a decision on the proposed draft directions order then took no further step to advance the matter.

Plaintiff’s prospects of success

42. [42]
    The first applicant has filed affidavits by herself and her mother which show a prima facie case that the applicant is a person entitled to apply for provision. The affidavit sets out details of her assets and liabilities and sources of income and identifies all the people who fall within the categories in s 41(1). The matter clearly falls within the monetary jurisdiction of the District Court.

43. [43]
    The first applicant is the oldest child of the deceased. Her evidence, supported by that of her mother, is that she grew up in impoverished circumstances in a shanty with a dirt floor, and no electricity or running water. Her circumstances were worsened by the deceased refusing to work and his propensity to gamble. The first applicant was forced to assist her mother in household duties and in caring for her younger siblings when her mother was working. The deceased did not contribute to domestic duties or the care of the children, nor did he make any contribution to the support of the family. He did not contribute to the educational expenses of the first applicant during her childhood or in later years. The first applicant’s mother separated from the deceased and her marriage to the deceased was dissolved on 14 May 1977. From 1970 the deceased was not residing with the family but was in company barracks at Mount Isa where he had obtained work. The deceased was working at Mount Isa mines from about 1970 but he still did not assist the first applicant or other members of the family. The first applicant had to leave school at the age of 15 in 1973 although she was an excellent achiever at school. She asked the deceased for financial support for her school expenses but he refused to assist. The first applicant sought to maintain contact with the deceased and often saw and spoke with him at places in Mount Isa, including visiting his accommodation.

44. [44]
    The first applicant, having obtained employment at Mount Isa mines at the age of 15, continued her education and became involved in charity work. She was able to achieve considerable success in her employment and in other endeavours including being Queensland Secretary of the year, a Miss Queensland finalist and a Miss Queensland Charity Queen finalist. She continued to write to the deceased and to inform him of family events such as weddings. She says she continued to seek to maintain contact with him.

45. [45]
    The first applicant is 58 years of age, she is single and has no children. Her financial situation is sound but not substantial. She owns a house valued at $400,000. She has $4,500 in the bank and owns an old motor vehicle valued at $900. She has a superannuation balance of $351,000 that will be required to support her in retirement. She holds government employment with a gross fortnightly income of $2139.30.

46. [46]
    The first applicant’s 74 year old mother resides with her and is financially dependent upon her as she has numerous medical issues which require ongoing assistance and support. The first applicant also has a number of medical issues which require her to continue to take medication. In addition the first applicant provides financial assistance to her two nieces since her brother Geoffrey Louie died in 2008. When possible she provides them with financial assistance for schooling and personal expenses.

47. [47]
    The first applicant is the only surviving child who seeks family provision from the estate. The deceased made absolutely no provision for her in the will.

48. [48]
    In my view the first applicant’s application for provision has reasonable prospects of success. The deceased failed as a father to provide any support to the first applicant as a child or an adult. Her success in obtaining and maintaining employment owed nothing to her father. While she maintains government employment the first applicant has a degree of financial security, however she is advancing in years and she has accepted moral responsibility to assist her mother and her nieces. Her assets are modest, being the home in which she lives and a superannuation fund which will not become available until she retires. She will need to support herself following retirement.

49. [49]
    There is no information before me as to any relationship between the deceased and the beneficiaries under the will except that it is not suggested they fall within the categories specified in s 41 of the Succession Act.

Prejudice

50. [50]
    It is undoubtedly the case that the long delay may prejudice the defendant’s case to some extent. However the defendant has not pointed to any specific basis of prejudice such as the unavailability of witnesses for the defence. On the material before me there is no specific basis for concluding that the defendant would be so prejudiced by delay that a fair trial in the matter could not be obtained.

51. [51]
    It is true, as the defendant points out, that the estate is a small one. Should the matter proceed to trial a significant proportion of the estate may be dissipated in legal costs. The first applicant estimates that her costs of a two to three day trial would exceed $70,000. While the small size of the estate is a relevant consideration it is not determinative. If the matter proceeds further it will be necessary before trial for the parties to participate in a dispute resolution process.

52. [52]
    In consideration will be the length and delay to date. And whether that delay has been caused by the plaintiff or the plaintiff’s solicitors. Having regard to all the other factors, I am not persuaded that the size of the estate should alone determine whether the plaintiff’s claim should proceed.

Consideration

53. [53]
    Taking into account the first applicant’s prospects of success, the length and nature of the delay, the allocation of responsibility for the delay, the prejudice to the respondent and the size of the estate, I find that the first plaintiff has satisfied the onus of demonstrating that the discretion should be exercised in favour of granting leave to proceed out of time. In that circumstance the counter application by the respondent for dismissal for want of prosecution must fail.

54. [54]
    The costs of these applications will be reserved.

55. [55]
    It is now necessary that the parties promptly agree on a draft directions order allowing the matter to proceed with expedition.

Orders

56. [56]
    The orders of the Court will be:

1. The application filed by the first applicant on 24 February 2016 is granted. The first applicant has liberty to proceed with the originating application filed 27 June 2005.

2. The application filed by the respondent on 17 March 2016 for dismissal of the originating application of the first applicant is dismissed.

3. The application filed by the respondent on 17 March 2016 for dismissal of the originating application of the third applicant is allowed. The third applicant’s originating application filed 27 June 2005 is dismissed for want of prosecution.

4. Costs of the applications filed 24 February 2016 and 17 March 2016 referred to in orders 1 and 2 are reserved.

5. No order for costs is made in respect of the respondent’s application filed 17 March 2016 referred to in order 3.

6. The first applicant shall, within 14 days of this order, serve on the respondent a draft directions order in the form set out in the schedule to Practice Direction No. 8 of 2001, with appropriate and necessary variations, and containing a dispute resolution plan in accordance with Clause 8(b) of the said Practice Direction.

7. Within 14 days of service of the draft directions order the respondent shall respond in accordance with Clause 9 of the Practice Direction No. 8 of 2001.

8. Thereafter both parties will proceed, if necessary, in accordance with Clause 9 of the said Practice Direction.

9. If by 30 June 2016 the parties have failed to agree upon the terms of a directions order and neither party by that date has listed the originating application before the applications judge, the first applicant shall, after giving the respondent not less than 14 days’ notice, promptly list the originating application before the applications judge.