Sneath v Sneath[2014] QSC 152

SUPREME COURT OF QUEENSLAND

HIS HONOUR:   This application by the executors of the will of the late William Andrew John Sneath seeks directions of the court in progressing the distribution of the deceased’s estate.  The directions sought would, in summary, be that the executors would be justified in transmitting certain land devised under the deceased’s will, foregoing recovery of certain property bequeathed under the will and in making an interim financial distribution to some beneficiaries under the will. 

Background

The need for such directions arises principally by reason of disputation involving the first respondent, Andrew Sneath, who is a son of the testator and is a disappointed beneficiary under the will.  No other beneficiary resists the actions proposed. 

The testator’s will devised three freehold lots in the Malanda district, namely:

(a)lot 47 on Crown plan NR432 to his son, the first respondent, Andrew John Sneath and Andrew’s wife Susan;

(b) lot 45 on Crown plan NR431 to his son an executor applicant, William Douglas Sneath;

(c) lot 62 on Crown plan NR439 to his daughter, the second respondent, Carmel Adams.

Lots 47 and 62 were sold by the deceased between the execution of his will on the 25th of January 2011 and his death on 24 November 2012, leaving lot 45 as the only real property actually owned by the estate.  The executors seek a direction that they would be justified in transmitting title to lot 45 to the will’s named devisee of that property, the executor applicant, William Douglas Sneath.  Andrew Sneath resists such a direction because he claims his father contracted to sell that property to him. 

The will relevantly bequeathed:

(a) the testator’s motor vehicle to his grandson, Matthew Liam Sneath;

(b) the testator’s household furniture and effects to Carmel Adams, the second respondent;  and

(c) the proceeds of the sale of all of the testator’s cattle, all monies held in his name and the rest and residue of his estate to his daughters Carmel Adams and Jane Wheeler, the second and third respondents. 

The evidence suggests the deceased’s vehicle was a Nissan Navara utility.  The executors have been unable to acquire possession of it.  It is believed to be, or to have been, on land owned by Andrew John Sneath, who is Matthew Sneath’s father.  The executors seek a direction confirming they would be justified in foregoing any claim to the vehicle, given that Matthew either already has the vehicle or is in a position to take possession of it.  Against that background such a direction is uncontroversial and I will make it. 

The executors have been unable to get in the deceased’s personal papers and effects, which are believed to have been on Andrew Sneath’s property at the time of his father’s death because that is where his father was living.  The only beneficiaries with an entitlement to such property are the second and third respondents and, in the interests of avoiding further cost and dispute, they each depose to not wanting the estate to pursue recovery of such property.  Against that background such a direction is uncontroversial and I will make it. 

As to the cattle, it is thought the testator owned around 123 head of cattle when he died.  Mr Andrew Sneath’s affidavit unhelpfully ridiculed the evidence to that effect but, notwithstanding he is a person who might have some direct positive knowledge to offer on this subject, he asserted no knowledge as to what, if any, cattle his father owned at any particular relevant point.  In any event, if any such cattle or their progeny still exist, their whereabouts remains unknown and thus they cannot be sold and the proceeds distributed.  Again, the second and third respondents, who would be entitled to those proceeds, depose to not wanting the estate to incur the toll of pursuing recovery of any cattle, if indeed they exist at all.  The executors seek a direction confirming they would be justified in foregoing any claim to the cattle.  Against that background such a direction is uncontroversial and I will make it.

The directors also seek an order they would be justified in paying an interim distribution of $250,000 to the second respondent and $250,000 to the third respondent.  This would still leave the estate with in excess of $130,000.  The second named applicant deposes that such an amount would be ample to service the costs of any litigation of the kind implicitly foreshadowed in the course of argument.  Andrew Sneath resists an order in respect of such an interim distribution because he contends it will leave the estate insufficient funds to discharge its obligations to him.  For reasons which will become apparent, I reject that argument. 

It is convenient, at this point, to also note that Andrew Sneath alleges the estate is owed repayment of a loan made to William Douglas Sneath by the testator.  The allegation is irrelevant.  It could only go to the quantum of the entitlements of the second and third respondents, not to any entitlement of Andrew Sneath.  As already mentioned, the second and third respondents support the application. 

The nature of this application 

Save for a preliminary skirmish involving a caveat last year, Andrew Sneath has not instituted proceedings against the estate in order to actually recover the estate moneys and properties he alleges he is entitled to.  In the present application he has, in effect, purported to show there is sufficient substance to his grievance against the estate that the resisted orders should not be made. 

The orders sought in the application are sought, “pursuant to s 96 of the Trusts Act 1973 or otherwise”.  The applicant submits:

“In circumstances such as these, the court is empowered to intervene to provide judicial guidance to the applicants, in their representative capacity, in the exercise of the broad supervisory powers conferred under section 96(1) of the Trusts Act 1973. 

Under the broader scheme of the Trusts Act 1973, it is perfectly proper for a person charged with responsibility as a trustee, and who harbours any doubt as to the providence of some proposed course of action associated with the management or administration of the trust, to seek and obtain directions from the court so as to remove that doubt.” 

It is unnecessary, in the present case, to act upon the implied power the applicant submits exists under the broader scheme of the Trusts Act.  Section 96(1) is apt to the circumstances.  It provides:

“Any trustee may apply upon a written statement of facts to the court for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee.”

There is not, in this application, a document styled “Written statement of facts”.  However, the application expressly indicated the applicants would rely on affidavits.  Those affidavits are, of course, in writing and state various facts.  The question arises whether, in the circumstances of this case, that involves sufficient compliance with s 96(1)’s requirement that there be a written statement of facts.  Such a conclusion would not disadvantage the first respondent, in that the applicant’s affidavits exhibited various correspondence exposing the nature of his grievances.  As is common enough in the applications jurisdiction generally, other affidavits beyond those flagged in the application have been filed, including affidavits filed by Andrew Sneath. 

There is some divergence of fact in the materials, however the applicant is content that the court take the deposed facts at their most favourable to the first respondent.  I considered adjourning the application and directing the applicants to create a single document styled “Written statement of facts” but concluded that would not materially advance matters.  A written statement of facts has the advantage that the facts to be assumed for the purposes of the direction are clearly identified in a single document.  However, it ought not be assumed such a statement would give a one-sided narrative.  If it were known that certain relevant facts were in dispute then the statement ought reveal, not conceal, the substance of that dispute.  Indeed, concealment of such matters would deny the trustee of the indemnifying effect a s 96 direction accords a trustee, pursuant to s 97. 

In this case, it is obvious such a statement would inevitably not be one-sided and would identify the substance of the conflicting factual positions and Andrew Sneath’s assertions.  The cost of further delay in order to be provided with a document styled “Written summary of facts” cannot be justified in circumstances where the whole of the affidavit material identifies the facts, including disputed facts, relevant to the application.  While ordinarily a document actually styled “Written summary of facts” ought be filed in a s 96 application, I proceed on the basis that the whole of the affidavit material read by the parties constitutes the written statement of facts for the purposes of s 96.  The parties agree with that course. 

Importantly, the determination of a s 96 application does not call for a resolution of factual disputes, although that does not mean the court is bound to accept sweeping factual conclusions asserted without disclosure of any real particularity or foundation. 

The principles relevant to the determination of a s 96 application were helpfully reviewed by Atkinson J in Coore v Coore (2013) QSC 196, referring in particular to Macedonian Church v Eminence Petar (2008) 237 CLR 66.  Many of those principles relate to cases where trustees are seeking guidance as to whether to pursue, defend or compromise litigation.  This is not, or at least not as yet, such a case.  The trustees are not seeking guidance as to whether to embark on litigation, nor is any litigation on foot against them or the estate. 

Mr Andrew Sneath’s alleged entitlements to estate, money and property are asserted in exhibited correspondence and affidavit material, amidst a host of other irrelevant assertions and ill-conceived complaints about the executors.  With one arguable exception relating to lot 47, which as explained below is without merit, none of those alleged entitlements arise out of Andrew Sneath’s status as a beneficiary under the will.  In substance they are entitlements alleged by Andrew Sneath not in his capacity as a beneficiary, but as a third party.  He is, in effect, an external player who has unsuccessfully alleged to the executors that he is owed money and property by the estate and has not instituted any proceeding actually claiming such money and property.  That feature of the matter is of itself a relevant consideration. 

In Macedonian Church, at 107, the High Court was in tacit agreement with the primary judge’s reference to the reasoning of the Privy Council in Marley v Mutual Security Merchant Bank and Trust Co Limited (1991) 3 All ER 198 at 201 that, in a proceeding of this kind “the Court is, essentially, engaged solely in determining what ought to be done in the best interests of the trust estate and not in determining the rights of adversarial parties.”

The nature of this application’s focus on the best interests of the trust estate does not render a consideration of Andrew Sneath’s asserted entitlements from the estate irrelevant.  The executors have an obligation to collect and get in the real and personal estate of the deceased and administer it according to law, see s 52 Succession Act 1981 (Qld).  That necessarily involves tending to the debts and other liabilities of the estate. 

Where, as here, executors do not accept the alleged entitlements of a third party, whether in personam or in rem, against the estate they should nonetheless consider where the best interests of the trust estate lies in catering for the prospect the third party may press that party’s alleged entitlements to litigation.  Such litigation may expose the estate to litigation costs and potentially have adverse consequences for beneficiaries to whom estate property has been prematurely distributed.  If such litigation is a realistic prospect and unless it can be said such litigation would have no real prospect of succeeding (that is that it would be unable to resist an application for summary judgment under Rule 293 of the Uniform Civil Procedure Rules), then a cautious approach should be taken to any distribution prior to the resolution of such potential litigation.  As much flows from the nature of the duties of the executors in their capacity as trustees. 

That said, it is not in the estate’s interest to wait indefinitely for such potential litigation, nor is it necessary to refrain from distributions which are of such a quantum or nature that they would be able to be made even if the litigation were to succeed after a trial.  For reasons which will be apparent there are some distributions which can plainly be made now, even taking Andrew Sneath’s assertions at their highest. 

With these considerations as to the nature of an application of this kind in mind, I turn to each of Andrew Sneath’s primary alleged entitlements against the estate. 

Entitlement to a Refund of Payment for Lot 47

The will bequeathed property and devised Malanda based real estate to various descendents of the deceased.  The sole benefit involving Andrew Sneath under the will was the devise of a Malanda property, lot 47 on Crown plan NR432, to Andrew Sneath and his wife Susan.  However, they bought that property from the testator in 2012, after the will had been executed but before the testator’s death.  The doctrine of ademption operates in succession law so that the beneficiary of a gift of property under a will will not take anything under the will if the property no longer forms part of the estate, see Brown v Heffer (1967) 116 CLR 344 at 348.  Lot 47 no longer formed part of the estate, as at the date of the testator’s death. 

The remedial action sought in this context by Andrew Sneath was not well articulated.  A suggestion was advanced that the second named applicant, the testator’s solicitor, should have advised the deceased, after the sale, to change his will, presumably so that Andrew Sneath and his wife could be benefitted in some different way in some new draft of the will.  No credible foundation was advanced in support of that suggestion.  Moreover, the testator is not said to have been lacking capacity and may be inferred to have known what he was doing in selling lot 47 but not altering his will to devise or bequest some other benefit to Andrew Sneath and his wife. 

Taking another tack, the applicant inferred Andrew Sneath’s position may be that the estate ought pay he and his wife money equivalent to the purchase price paid to them.  However, for that obligation to arise, such a testamentary intention would have to be revealed, expressly or impliedly, by the will, see for example Ensor v Frisby (2010) Qd R 146 at 149.  There is no substance to the alleged entitlement to a refund of payment for lot 47. 

Entitlement to Payment of Proceeds of Share Sale in 1994

Andrew Sneath claims he and his father operated a dairy partnership, which accumulated 14,000 plus shares in his father’s name in the local dairy co-operative.  His father allegedly received $11.82 each for those shares in 1994, on the merger of the co-operative with another entity.  Andrew Sneath asserts he was never paid his half of the sale proceeds which, with addition of interest, he says would now be worth $321,177.69. 

Taking the first respondent’s assertions at the highest, the testator would, at the point in time of the share sale transaction, have become legally bound to account to his alleged partner, the first respondent, for the receipt of funds.  The relevant remedy, from the first respondent’s point of view, was to enforce that obligation by way of an action for an account in the exercise of the equitable jurisdiction of the Court. 

The difficulty for Andrew Sneath is that, even on his own version of events, any enforceable right to an account he might once have had has long since become statute-barred, pursuant to section 10(2) of the Limitation of Actions Act 1974, by which an “action for an account shall not be brought in respect of a matter that arose more than six years before the commencement of the action”.  On the face of the evidence now advanced by Andrew Sneath, any cause of action he might once have had with respect to any proceeds realised from the share sale became statute-barred in or about the year 2000.  There is no substance to the presently asserted entitlement relating to the proceeds of that share sale. 

Performance of an Oral Contract to Purchase Lot 45

The will purportedly devised lot 45 to William Douglas Sneath.  Andrew Sneath advanced two arguments against a direction that the trustees would be justified in transmitting title to lot 45 to William Douglas Sneath. 

The first is an interpretation argument.  Clause 5 of the will states:

“I devise and bequeath my freehold land situated at Turner Road, Malanda, more particularly described as lot 45 on Crown plan NR431 in the county of Nares, parish of Dirran in the State [of] Queensland, together with all improvements thereon to my son, the said William Douglas Sneath, absolutely.”

Andrew Sneath points out that lot 45 is not situated at Turner Road.  Apparently, it fronts another road in the area.  Thus, Andrew Sneath submits, the devise under clause 5 cannot occur because it is an impossibility:  there is no such lot described as lot 45 on Crown plan NR431 situated on Turner Road. 

This argument ignores the reality that the more particular description of the property as lot 45 on Crown plan NR43 allows it to be identified unambiguously, despite the misdescription in the will of the road on which it is located.  There is no evidence to suggest that there exists more than one property which can be described as lot 45 on Crown plan NR431.  Despite the misdescription in clause 5, the content of clause 5 allows of a clear and certain inference of testamentary intention, that the property being referred to was the one and only property described as lot 45 on Crown plan NR431.  The executors may proceed in full confidence that, in the event that this feature actually required determination by a Court, the court would, inevitably, correct a misdescription, pursuant to its power to rectify under section 33 of the Succession Act. 

Andrew Sneath’s second argument is that he had an oral contract with his father to acquire lot 45.  He claims that, under that oral contract, part consideration was his years of farming work performed for his father and the balance was to be a payment of $150,000, which had not been made or called for by the time of his father’s death. 

In November last year, the executors, in the interests of resolving the potential dispute, albeit without conceding Andrew Sneath’s alleged entitlement, offered to transfer lot 45 to Andrew Sneath in exchange for payment of $150,000 to be made to William Douglas Sneath and Andrew Sneath bearing the stamp duty and registration fees. 

Remarkably, on 23 December 2013, Andrew Sneath rejected that offer.  He insisted any such payment ought be to the estate, not to William Douglas Sneath.  He also introduced further conditions to be complied with.  One was that the applicant cause the remains of the deceased to be placed in and with the deceased’s late wife at a grave site.  Another was that the spouse of the third respondent provide a written retraction and apology in respect of certain statements he is said to have made to Andrew Sneath. 

Both such conditions postdate the passing of the deceased.  It follows those purported conditions could not have formed part of the oral contract of sale contended for by the first respondent and rather were unilaterally imposed by the first respondent during the period of administration of the deceased’s estate without any underlying contractual warrant or authority. 

The applicant submits that, characterised in this way, the qualifications imposed by the first respondent with respect to his willingness to pay the amount he freely acknowledges as being outstanding under the oral contract he now relies on, constitute in themselves a renunciation of the alleged contract on the part of the first respondent.  The applicant submits that the first respondent’s insistence upon those matters as a condition of his performance of his outstanding promise to pay, amounts to a renunciation of the alleged contract on the well-established premise that a party renounces a contract by his or her unilateral insistence as a condition of performance upon a requirement for which he or she has no contractual warrant or authority.  It is submitted that, by pursuing the directions now sought in this proceeding, the applicants have, at least tacitly, accepted that renunciation. 

The applicant’s renunciation argument is not without force.  In Freedom Homes Pty Ltd v Botros (2000) 2 Qd R 377 at 379-380, McPherson JA observed:

“A contracting party is not entitled, unilaterally, to impose on the other party conditions of a kind for which there is not contractual warrant or authority… It is true that a party is not lightly to be taken to have repudiated a contract in that sense:  see DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423, 433;  but an inference to that effect was fairly capable of being drawn here, and in my opinion it was on the material before us correctly drawn.”

On the limited materials before me, I would not be confident such an inference would inevitably be drawn by a Court in the event of litigation.  Its premise is that there was a contract which was brought to an end.  That premise is not actually accepted by the applicant, in that the applicant does not actually accept the existence of the contract.  Moreover, the applicant’s offer was itself conditional on other matters, thus complicating the foundation for the inference now sought.  There further lingers considerable uncertainty as to the consequences of such a conclusion so far as Andrew Sneath’s alleged part payment is concerned.

Given those considerations, I would not draw the inference of renunciation as advanced in the current application.  That is to say nothing, though, of its potential ultimate fate in any litigation.  My hesitation is born simply by reason of the state of the present materials. 

The applicant also asserts that Andrew Sneath’s potential claim is doomed to fail by reason of s 59 of the Property Law Act 1974, which provides:

“No action may be brought upon any contract for the sale or other disposition of land or any interest in land unless the contract upon which such action is brought, or some memorandum or note of the contract, is in writing, and signed by the party to be charged, or by some person by the party lawfully authorised.”

The applicant submits that s 59 would serve to preclude the enforcement of the alleged oral contract of sale by the first respondent against the estate of the deceased for want of a written contract or any memorandum or note of the contract signed by the deceased or by some person lawfully authorised on the deceased’s behalf.  However, as the applicant’s counsel properly acknowledged in argument, there might be circumstances in which equity may assist a party in Andrew Sneath’s alleged position, for instance, through the imposition of a resulting or constructive trust.

As was submitted, the trend of present thinking might arguably favour the need for full payment of a purchase price for such a trust to arise.  However, the uncertain and effectively incomplete state of factual material before me makes it difficult to arrive at a confident conclusion in relation to the potential imposition of a trust in the circumstances of a case like this.  The self-represented Andrew Sneath did not articulate an argument on this feature of the matter, but taken at its highest, his evidence, albeit very vague, is that he has part paid for the land and that may have the potential to ground some form of case capable of withstanding summary judgment.  Whether or not in reality it does so is impossible to assess on the state of the present materials.

The current difficulty is that I am not equipped with sufficient information to infer that Andrew Sneath has no real prospect of raising a case and succeeding in this context.  On the limited evidence before me, his prospects of doing so appear bleak.  It might be that, if and when more is known, I may have the requisite degree of confidence submitted for by the applicant.  However on the presently uncertain materials, taking them at their most favourable for the first respondent, I conclude the executors would not presently be justified in transferring lot 45.  I stress that conclusion is reached principally having regard to the earlier caution, to which I referred, that ought be exercised having regard to the potential adverse consequences for the estate of litigation.

I emphasise further that that is only my present view.  The applicant submitted that a party may by his or her own activity deprive him or herself of the right to specific performance of a contract or other relief in specie in equity.  It was submitted that where here, Andrew Sneath had failed to take steps to pursue such a claim within a reasonable period of becoming aware of his entitlement, equity would consider him to have abandoned his entitlement to relief in specie and would leave the parties to their remedies at law.  While acknowledging that the extent of the delay that might be thought reasonable in a given case will depend upon the circumstances, it was submitted in the circumstances of this case that such a period has long passed.

I do not accept, given the intervening history of dialogue between Andrew Sneath and the executors over this issue, that there has been such a period of inactivity that the transfer should proceed.  That is, however, a finely balanced determination.  Andrew Sneath has known for long enough that if he has a case, it ought be advanced.  The timing of the distribution of his father’s estate cannot be indefinitely delayed by his inaction or ineffectiveness in pursuing his alleged entitlement.

In my view, the executors would be entitled to make the transfer if they notify Andrew Sneath of a reasonable period within which he ought institute a claim in respect of the alleged contract to sell lot 45 and he does not within that period institute such a claim.  I would think no more than 28 days would be needed for such a period to be reasonable, but I leave the precise timing in that regard to the applicants, who may be aware of matters that are not presently before me. 

Obviously, if such a claim is instituted, there is nothing to prevent it being brought to an end early if it turns out to be without substance.

It follows that I propose to make the orders sought with that significant qualification to that part of the order that relates to the transmission of lot 45.  So far as the foregoing of the claim to the cattle, the Nissan Navara utility and the deceased’s personal papers and effects are concerned, as already explained, the relevant orders ought be made. So, too, ought the order relating to the payment of the interim distributions to the second respondent and third respondents.  I reach that conclusion particularly having regard to the remaining available fighting fund in the event of any litigation, in combination with the reality that the distributions to them, even were Andrew Sneath to succeed as far as the oral contract is concerned, are unconnected and would be unaffected.

Orders

My orders are:

1. That the applicants in their capacity as the appointed executors and trustees of the last will of the late William Andrew John Sneath, dated 25 January 2011, would be justified in:

(a) proceeding to transmit title to that piece or parcel of land situated in the county of Nares, parish of Dirran, described as lot 45 on Crown plan NR431, title reference 20781095, to William Douglas Sneath in accordance with clause 5 of the said will if the applicants notify the first respondent of a reasonable period within which he should, if he intends to do so, file a claim in respect of the alleged oral contract to sell the lot and if the first respondent does not within that period institute such a claim;

(b) foregoing any claim to:

(i) the 123 head of cattle thought to have been owned by the deceased as at 30 June 2012 and any progeny of those cattle;

(ii) a Nissan Navara utility, former registration number 975 DXA, thought to have been owned by the deceased;

(iii) the deceased’s personal papers and effects;

(c) payment of an interim distribution to each of the second respondent and the third respondent in the sum of $250,000.

I will hear the parties as to costs.

...

Costs

HIS HONOUR:   The first respondent submits the parties should bear their own costs.  The applicants, on the other hand, submit that, given the outcome of the case, it is an appropriate matter in which to, in effect, make dual orders. 

The argument, in essence, is that significant aspects of what was argued before me on the part of the first respondent have failed and have failed in circumstances where, as I explained in my primary reasons, in substance Mr Andrew Sneath was advancing arguments, really, as a third party, rather than as a beneficiary.  It is submitted, and I accept, that, given that status, in substance, it is appropriate to approach costs in the normal way so that they would follow the event and the first respondent, having taken his chances in advancing arguments which were, in substance, arguments in his capacity as a third party, ought bear the costs of doing so. 

However, the application did not succeed in its entirety, in the sense that I heavily qualified the proposed order sought in relation to lot 45 by giving the first respondent, in effect, an opportunity within a reasonable period to properly advance a case.  Notwithstanding that that assessment was finely balanced, the fact is he has received the benefit of that cautious approach by me and in that sense that determination is of assistance also to the estate, for it provides guidance from which the estate and in turn the beneficiaries collectively benefit.  In those circumstances, such costs as relate to that feature of the matter are more appropriately recovered by the applicants out of the estate in the conventional way in matters of this kind on the indemnity basis.

As to what apportionment ought occur, there were many more arguments litigated than merely the argument relating to the alleged oral contract relating to lot 45.  However, the exercise is not merely numerical.  The argument pertaining to lot 45 realistically incurred a more significant amount of time than any other argument.  The concession of the applicants that a 50 per cent apportionment for the purpose of costs assessment is reasonable.  In the circumstances, I propose to make an order reflecting that approach. 

My continued orders are:

(2)  The first respondent pay the applicants half their costs of and incidental to this application to be assessed on the standard basis, and the applicants may otherwise recover their costs assessed on the indemnity basis out of the estate.

In respect of the orders I have given, I have amended the draft order before me so that it adopts the form of words I have used.  I order as per that amended draft signed by me and placed with the papers.