Cole v Walsh as Executrix of the Estate of Alan Harold Cole (deceased)
[2023] QDC 41
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- Cole v Walsh as Executrix of the Estate of Alan Harold Cole (deceased)[2023] QDC 41
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Cole v Walsh as Executrix of the Estate of Alan Harold Cole (deceased)[2023] QDC 41
Cole v Walsh as Executrix of the Estate of Alan Harold Cole (deceased)[2023] QDC 41
DISTRICT COURT OF QUEENSLAND
CITATION: | Cole v Walsh as Executrix of the Estate of Alan Harold Cole (deceased) [2023] QDC 41 |
PARTIES: | STEPHEN ALAN COLE (plaintiff) v SHARON ROSE WALSH AS EXECUTRIX OF THE ESTATE OF ALAN HAROLD COLE (DECEASED) (defendant) |
FILE NO: | 126 of 2022 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court at Cairns |
DELIVERED ON: | 15 March 2023 |
DELIVERED AT: | Cairns |
HEARING DATE: | 10 March 2023 |
JUDGE: | Fantin DCJ |
ORDER: |
|
CATCHWORDS: | SUMMARY JUDGMENT – JUDGMENT ON ADMISSIONS – SUCCESSION – action for an account based on acknowledgment of a debt in a will – where acknowledgment of debt admitted in defence – construction of the term of the will – whether interest was payable on debt from date of deceased’s death or whether debt not payable until estate had sufficient funds to meet liability |
LEGISLATION: | Succession Act 1981 (Qld) s 52, s 59 Uniform Civil Procedure Rules 1999 (Qld) r 292(2) |
CASES: | Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232; [2005] QCA 227 Jones v Jones & Ors [2020] QSC 6 Lewis v Wilson & Anor (1997) 42 NSWLR 228 Mt Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 Pacella v Sherborne [No 2] [2010] WASC 186 Re Pollock [1943] CH 338 Shirt v Westby (1808) 16 Ves 393 Theseus Exploration NL v Foyster (1972) 126 CLR 507 |
COUNSEL: | Keane D KC for the plaintiff. Ryall C for the defendant. |
SOLICITORS: | Preston Law for the plaintiff. Arnell & Cooper for the defendant. |
Nature of this application
- [1]This is an application by the plaintiff for judgment based on admissions, or alternatively, for summary judgment.
- [2]The issue in dispute is confined to whether the defendant should pay interest on a debt acknowledged in a will, in circumstances where the debt is admitted. The dispute turns upon the construction of a term in the will; specifically, whether the debt was payable at the death of the deceased or whether it was not payable until the estate had sufficient funds to meet the liability.
Pleadings and facts admitted
- [3]The plaintiff’s claim was for an account in the sum of $350,000 plus interest accruing from 3 June 2021.
- [4]The basis for the claim is that in 2014 the deceased and the plaintiff (his son) had a discussion in which the deceased acknowledged that he owed to the plaintiff the sum of $350,000 and proposed that this be paid out of his (the deceased’s) estate upon his death. The plaintiff agreed to (accepted) the proposal.
- [5]Paragraph 1 of the statement of claim pleaded that:
In or about early 2014 Alan Harold Cole (Deceased) (“Alan”) and the Plaintiff had discussions as Alan’s residence at Mizzi Road, South Johnstone, during which:
(a) Alan acknowledged to the Plaintiff that he owed the Plaintiff the sum of $350,000.00 (“the Liability”).
(b) Alan proposed that payment of the Liability to the Plaintiff be made out of Alan’s estate upon his death.
(c) The Plaintiff agreed to that proposal.
- [6]Paragraph 2 pleaded that:
By Alan’s last Will dated 2 July 2014 (“the Will”), Alan further acknowledged the Liability in the following terms:
“6. I record the fact I owe my son STEPHEN ALAN COLE the sum of $350,000.00 (THREE HUNDRED AND FIFTY THOUSAND DOLLARS) and DIRECT that he be paid this sum following my death as a first charge on estate assets.”
- [7]The will was drawn by the deceased’s solicitors with the witnesses being recorded as a solicitor and student respectively.
- [8]Paragraph 3 pleaded that the deceased died on 3 June 2021.
- [9]Paragraphs 5 to 8 inclusive pleaded that the defendant, through its solicitors, acknowledged the debt but did not pay the debt despite demand.
- [10]The statement of claim filed on 18 October 2022 sought the following relief:
- The sum of $350,000.00 being the amount due and owing by the Defendant to the Plaintiff on an account stated between them.
- Interest of $20,566.57 under section 58 of the Civil Proceedings Act 2011, calculated in accordance with [an] attached Interest calculator.
- Interest under section 58 of the Civil Proceedings Act 2011 from the date of [the] Claim until judgment.
- Costs.
- [11]The defendant filed a defence, paragraph 1 of which admitted each of the allegations in paragraphs 1 to 8 inclusive of the statement of claim.
- [12]The defence at paragraph 2 pleaded:
It was orally agreed between Alan Harold Cole (deceased) (“Alan”) in the discussions set out in paragraph 1 of the statement of claim that in consideration of Alan acknowledging he owed the plaintiff the sum of $350,000 (“the liability”) the plaintiff agreed that the payment of the liability be deferred and only be payable out of Alan’s estate upon his death (“the agreement”).
- [13]The defendant alleges that upon the proper construction of that agreement no monies were payable unless the estate had funds available to pay the debt.
- [14]The defence at paragraph 3 pleaded:
Upon a true construction of the agreement:
(a) the liability was not due to be paid by Alan’s estate unless and until the estate had funds to pay the liability; and
(b) if the estate did not have funds in cash at the time of Alan’s death to meet the liability then the liability was only payable when such funds had been generated from realisation of the assets of Alan’s estate.
- [15]On 21 December 2022, the defendant paid to the plaintiff the sum of $350,000.
- [16]The only matters remaining for determination are the payment of interest and costs of the proceedings.
Consideration
- [17]The plaintiff seeks summary judgment pursuant to r 292(2) of the Uniform Civil Procedure Rules 1999 (Qld) which provides that if the court is satisfied that: (a) the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and (b) there is no need for a trial of the claim or the part of the claim, the court may give judgment for the plaintiff against the defendant for all or part of the plaintiff’s claim and may make any other order it considers appropriate.
- [18]The principles with respect to summary judgment are well settled and it is unnecessary to set them out in detail. It is only in the clearest of cases that summary judgment will be granted.[1] It is not enough that a court concludes that a successful defence is improbable on the material available at the time of the summary judgement application.[2] Consideration of ‘no real prospect of success’ requires the court to see whether there is a ‘realistic’ as opposed to ‘fanciful’ prospect of success.[3]
- [19]The onus of proof is upon the plaintiff to show that there is a prima facie case entitling them to judgment. However, once this prima facie case has been established, then the evidentiary onus shifts to the defendant.
- [20]Here, there is no factual dispute on the terms of the agreement.
- [21]On 9 August 2022, the plaintiff’s solicitor wrote to the defendant’s solicitor and demanded payment of the debt and interest calculated from 3 June 2021 and foreshadowed that proceedings would be commenced if not agreed. The defendant refused to pay the interest.
- [22]The issue turns upon the proper construction of the words in clause 6 of the will: ‘I record the fact I owe my son STEPHEN ALAN COLE the sum of $350,000.00 (THREE HUNDRED AND FIFTY THOUSAND DOLLARS) and DIRECT that he be paid this sum following my death as a first charge on estate assets.’ (emphasis added)
- [23]The plaintiff’s claim is for a debt arising from an account stated. It is in the form of a simple admission of liability for a specified sum, such as an IOU. The debt has been admitted by the defendant.
- [24]There are a number of uncontroversial principles with respect to the construction of wills.[4] The court construes the will to give effect to the intention of the testator garnered from words expressed in the will. The correct approach to construing wills generally aligns with that of construing contracts. In construing a will, the court cannot rewrite the document. The meaning of the will must be discovered from the writing itself. A word or phrase is given its usual or ordinary meaning. If the intention is clear on the face of the will, from a reading of the instrument as a whole, it will not be necessary to employ any rule of construction to understand it. It is only when the will is not entirely clear in meaning that it may be necessary to resort to a rule of construction. The construction of contracts is largely a text based exercise requiring consideration of the words of the agreement itself.[5] Recourse to external matters only arises in cases of ambiguity.[6] In giving effect to the whole of the instrument, the court enquires into the general scheme of the will and construes the will to give effect to that scheme.
- [25]The defendant submits that the debt was payable only once the estate had sufficient funds available to pay it. There are a number of difficulties with this construction.
- [26]It is contrary to the clear and plain words of the acknowledgment of the debt in the will. It requires the court to read into the acknowledgment, or interpolate, additional words into the will when there is no warrant to do so. There is no ambiguity in the wording. There is nothing in the entire scheme of the will that warrants reading into clause 6 the additional words contended for by the defendant. The will is short. Other than the acknowledgment of the debt in clause 6, it contains only three other operative clauses. Clause 3 gives to his children as tenants in common in equal shares his investments in public companies in share portfolios. Clause 4 gives to his two daughters as tenants in common in equal shares a farming property. Clause 5 gives to his son (the defendant) all plant and equipment on that farming property and the residue of his property, including his shares in a private company (which on the evidence was the lessee of the farming property).
- [27]The plaintiff also submitted that such a construction would require a modification of the requirements of s 52 of the Succession Act 1981 (Qld), in that the recording of the ‘first charge on estate assets’ cannot be construed to defer the requirement for payment of the debt. Rather, it simply operated to charge all the estate assets with the payment of the debt to bring it within class 1 of s 59 of the Succession Act 1981 (Qld). I agree. It is not suggested by the defendant that this was an insolvent estate. To the contrary, the affidavit evidence is to the effect that the value of estate assets well exceeded the amount of the debt, and that payment of the debt would require certain assets to be sold or liquidated. There is nothing unusual about that.
- [28]If the defendant’s construction were accepted it would mean that there was no timeframe for payment of the debt. When I enquired when interest would be payable, if ever, on the defendant’s construction, defence counsel contended that interest was only payable if the debt were not paid ‘within a reasonable time’, in accordance with reasonable principles of estate administration. I reject such a construction.
- [29]Both the wording of the will and the wording of the alleged contract support the view that the debt was payable upon the death of the deceased. The statement of claim (which has been admitted) uses the words ‘upon his death’ and ‘following [his] death’. There is authority to the effect that where a legacy in a will is payable immediately upon the death of the testator, interest is payable from the date of death.[7] Likewise, legacies given in payment of debts carry a right to interest.[8] This is a claim for an account based upon an acknowledgment of debt, not a proceeding for administration of the estate, but by analogy those authorities support the construction contended for by the plaintiff.
- [30]The defendant submitted that the acknowledgment of debt in paragraph 1 of the statement of claim did not constitute an admission that the debt was payable at the date of the deceased’s death. This is a distinction without meaning. In an action on an account stated, there is no relevant difference between an acknowledgement of a debt or an admission of a debt.[9]
- [31]The construction contended for by the plaintiff also accords with the entitlement to be paid arising from the claim for an account stated upon the making of the admission.[10]
- [32]In oral submissions and without notice, the defendant sought leave to amend paragraph 2 of the defence to replace the word ‘upon’ with ‘after’ in the sentence ‘upon his death’. No evidence was relied upon in support of that application. The plaintiff objected. I declined to grant leave. The amendment would be contrary to the admission in paragraph 1 of the defence. Evidence of the state of mind of the deceased ordinarily would not be admissible on construction of the clause in the will.
- [33]I accept the plaintiff’s submission that, on the proper construction of the relevant clause, the $350,000 was payable as a debt as at the date of death on 3 June 2021. Interest has accrued, and has been claimed, on the prejudgment rate since that date in the sum of $23,543.01. This is less than the 8% payable under s 52 of the Succession Act 1981 (Qld). The defendant does not dispute the quantum of interest claimed nor the method of calculation.
- [34]Sometimes a triable issue of law will require a summary judgment application to be refused because although there are no facts to be decided, the court takes the view that the extent and complexity of the matters of law and argument warrant a full hearing.[11] This is not such a case. In my view, the defendant’s prospects of defending the claim for interest do not rise above fanciful.
- [35]I am satisfied that the defendant has no real prospect of successfully defending the plaintiff’s claim and there is no need for a trial of the claim. Judgment will be given for the plaintiff on the substantive claim for interest.
- [36]When I indicated to the parties that I intended in find in favour the plaintiff on the substantive claim, the matter was adjourned for further hearing on the question of costs. Before that hearing occurred, at the joint request of the parties, the hearing on costs was vacated and the parties sought orders, by consent, in the following terms. There is no longer any dispute with respect to the appropriate order for costs.
Conclusion and orders
- [37]The defendant pay to the plaintiff the amount of $23,543.01.
- [38]The defendant pay the plaintiff's costs of the proceeding, including this application, assessed on the indemnity basis.
Footnotes
[1] Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232,233 [3] (McMurdo P).
[2] Ibid 233 [3] (McMurdo P), 234–5 [11]–[13] (Williams JA) (citations omitted).
[3] Ibid 234–5 [11]–[13] (Williams JA) (citations omitted).
[4] Recently summarised by Crow J in Jones v Jones & Ors [2020] QSC 6 at [21]–[22].
[5] Mt Bruce Mining Pty Limited v Wright Prospecting Pty Ltd (2015) 256 CLR 104,116 [48] (French CJ, Nettle and Gordon JJ).
[6] Ibid 117 [49] (French CJ, Nettle and Gordon JJ),131–2 [108]–[111] (Kiefel and Keane JJ), 134 [118]–[119] (Bell and Gageler JJ).
[7] See Alun A Preece, Lee’s Manual of Queensland Succession Law (Lawbook, 6th ed, 2007) 171 [10.160] citing Re Pollock [1943] CH 338. Re Pollock [1943] CH 338 was cited with approval in Pacella v Sherborne [No 2] [2010] WASC 186 at [46]. See also sub-s 52(1A) of the Succession Act 1981 (Qld).
[8] See Preece (n 7) 172 [10.160] citing Shirt v Westby (1808) 16 Ves 393.
[9] Lewis v Wilson & Anor (1997) 42 NSWLR 228, 232.
[10] Ibid 233.
[11] See, eg, Theseus Exploration NL v Foyster (1972) 126 CLR 507.