Cruden v Sae-Ung

1. [1]

   HIS HONOUR: The Plaintiffs, Pirapon Cruden and Nattapon Wongpanich, who are the adult sons of Alexander Cruden (the deceased), initially, brought proceedings, by Summons filed on 17 November 2020, seeking a family provision order under Chapter 3 of the Succession Act 2006 (NSW) (the Act) in respect of the estate and notional estate of the deceased. The only Defendant named in the Summons was Pornnapa Sae-Ung, the widow of the deceased, who was also the person named as executor in the deceased's last Will. She appeared, initially, with legal representation, but a notice of ceasing to act was filed and she has not played an active role since then.

2. [2]

   The deceased died on 18 November 2019. The Defendant named in the Summons has made an application for Probate of the last Will of the deceased, but so far as is known, at the time the matter came before the Court, Probate of the Will has not yet been granted.

3. [3]

   The Plaintiffs filed an amended Summons on 26 March 2021, in which they repeated the claim for family provision orders and added additional prayers for relief relating to a fund of money which they asserted was held in trust for the estate of the deceased. In this amended Summons, they added Carolyn Elizabeth Cruden and Valerie Robyn Kirby, the two daughters of the deceased by a prior marriage, as the second, and the third, Defendant respectively.

4. [4]

   On 26 April 2021, the matter was in the Succession List for directions. On this occasion, Mr B Burke of counsel appeared for the Plaintiffs, there was no appearance by, or on behalf of, the first Defendant, and Mr L J Ellison SC appeared for the second and the third Defendants.

5. [5]

   Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 6.3(e) requires that proceedings on a claim for relief in relation to a trust, other than an express trust wholly in writing, must be commenced by statement of claim. The Court directed that a form of the proposed Statement of Claim be provided to the Defendants who should then inform the Plaintiffs whether there was any opposition to it being filed.

6. [6]

   It was noted, on 26 April 2021, that the second and third Defendants intended to file a notice of motion for security for costs.

7. [7]

   On 12 May 2021, the second and third Defendants filed the notice of motion seeking security for costs, together with an affidavit of Mark Andrew Deutsch, solicitor, sworn on that date. In that notice of motion, they sought:

8. [8]

   The basis of the application for security for costs was that “the Plaintiffs in these proceedings are resident overseas and have no assets located in Australia”.

9. [9]

   There was no dispute that both Plaintiffs live in Thailand and that they have no assets in Australia. It seems to be accepted that the Defendants have satisfied the jurisdictional threshold for an order for security for costs in UCPR, r 42.21(1)(a) and that each of the Plaintiffs has no assets of any substance within, or outside, the jurisdiction.

10. [10]

    On 28 May 2021, further directions were made for the Plaintiffs to file and serve any evidence in opposition to the claim for security for costs.

11. [11]

    On 15 June 2021, the matter was again in the Succession List, and on that date, without opposition, the Court granted the Plaintiffs leave to file and serve the Statement of Claim by 28 June 2021. Shortly thereafter, the Plaintiffs complied with that order.

12. [12]

    In the Statement of Claim, the Plaintiffs sought the following relief:

13. [13]

    On 9 June 2021, the Plaintiffs filed a notice of motion seeking, relevantly, the following relief:

14. [14]

    Subsequently, the parties asked the Court to determine whether the order sought for a separate hearing could be determined because it was thought that it might resolve, at least partially, the question of security for costs.

15. [15]

    The matter was again before the Court on 19 July 2021, when counsel, together, submitted that it would be in the interests of all parties for the Court to make an order for the separate determination of the questions referred to. Subsequently, they forwarded to the Court orders proposed by consent, which were in the following terms:

16. [16]

    Because, in my view, the orders required consideration, initially, I referred the matter to Chambers. On 29 July 2021, having considered the documents in the Court file, as well as the proposed Consent Orders, my Associate, at my request, sent an email, in the following terms, to the legal representatives of each party:

17. [17]

    On 5 August 2021, the Court received written submissions from each of the legal representatives.

Some brief background facts that are unlikely to be in dispute

1. [18]

   The Plaintiffs are the children of the deceased and Rattanakom Wongpanich (called “Noi”). The first Plaintiff was born in October 1993 and the second Plaintiff was born in November 1997. As stated, they both currently reside in Thailand.

2. [19]

   Noi died in March 2016.

3. [20]

   The first Defendant is the spouse of the deceased. They were married on 29 July 2016.

4. [21]

   The second and third Defendants are the children of the deceased and Edna Cruden. They were married to each other in January 1966 and were divorced in September 1996.

5. [22]

   The second Defendant was born in November 1969 and the third Defendant was born in November 1971.

6. [23]

   In 1987, the deceased and Edna purchased an apartment in Coogee, in the eastern suburbs of Sydney. Following their divorce and a property settlement, the deceased came to be the sole registered proprietor of the Coogee apartment. He moved into the apartment in about 1995.

7. [24]

   In about 1997, the deceased moved, permanently, to Bangkok, Thailand. However, he returned to Australia regularly and would stay with his sister, former wife, or with one of the second, or the third, Defendant.

8. [25]

   The deceased left a Will dated 7 June 2011 which provided in Clause 7.2.1:

9. [26]

   In July 2017, the Coogee apartment was sold for $1,050,000. Shortly thereafter, the deceased returned to Thailand. On about 30 August 2017, the net proceeds of sale were deposited into an account in the joint names of the deceased and the second and third Defendants pursuant to written instructions given by the deceased.

10. [27]

    In September 2017, each of the second and third Defendants received amounts totalling $227,846 from the joint account.

11. [28]

    Various events, which do not have to be repeated, then occurred involving the deceased and the second and third Defendants.

12. [29]

    As at 29 January 2020, the amount held in the joint account was $453,851.27. (There was, apparently, another amount of $537,658 which was the proceeds of the recommendation following a complaint made by the deceased to the Australian Financial Complaints Authority. Not very much is known about this amount.)

13. [30]

    On 29 January 2020, the whole of the balance of the account of $453,851.27 was transferred out of the joint account (excluding the AFCA funds) to a different bank account held in the names of the second and third Defendants.

14. [31]

    The Plaintiffs submitted that if the claim against the second and third Defendants is successful, the family provision claim will be continued, and the first Defendant is expected to take an active role in the proceedings. However, should the claim against the second and third Defendants be unsuccessful, the Plaintiffs will not continue with any of their claims. The proceedings will then come to an end.

15. [32]

    The Plaintiffs also submitted that the second and third Defendants’ notice of motion for security of costs was brought upon the basis that the whole of the proceedings would be heard together. Should security for costs be ordered in the amount of $75,000 against them, the Plaintiffs would be unable to provide that security and their claims would be brought to an end.

16. [33]

    The Plaintiffs stated that they have raised, and sent to Australia, $25,000 as security for the costs of the second and third Defendants for a hearing, of one day, on the issue of the separate question. They noted that a hearing of the separate issue against the second and third Defendants would be a short one, given that the claim is based almost entirely upon evidence in the affidavit of the second and third Defendants. The Plaintiffs’ legal representatives estimated hearing of the separate issue would be of one day’s duration.

17. [34]

    The Plaintiffs also submitted that there is very little factual dispute between the parties and the real dispute is legal in nature. They also submitted that their claim against the second and third Defendants had very strong prospects of success. Counsel submitted in writing:

18. [35]

    In support of this submission, counsel for the Plaintiffs provided the written statement of facts which they submitted was based on the evidence of the second and third Defendants. However, it is clear that, at the time of sending it to the Court, it was not an agreed Statement of Facts as had been required by the Court.

19. [36]

    The second and the third Defendants submitted that their agreement to the hearing of the separate question was conditional upon the Plaintiffs’ agreement to abandon any notional estate issue if unsuccessful in their claim. Should the Plaintiffs not give that assurance, or resile from any such assurance, (which they appear to have done), the second and third Defendants contended that the determination of fact, law, and credibility of witnesses which will be required for the determination of the separate question would also be relevant to the determination of the balance of the Statement of Claim.

20. [37]

    The second and third Defendants also submitted that should the entirety of the Plaintiffs’ claims be heard together, further security should be ordered (in addition to the $25,000 already provided by the Plaintiffs) for the following reasons:

21. [38]

    Senior counsel submitted (in writing):

22. [39]

    Ultimately, senior counsel submitted that any statement of agreed facts would not reflect the full range of factual matters the Court will need to take into account at a separate or final hearing. In his written submissions, he wrote:

The separate question

1. [40]

   UCPR r 28.2 provides that the Court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings.

2. [41]

   The discretion which is conferred on the Court to make the order sought is obviously a wide one. There have been many authorities on the legal principles that apply in exercising the discretion of whether to make the order for separate determination. I dealt with the principles in Southwell v Bennett [2010] NSWSC 1372, at [15]:

3. [42]

   In Crawley v Vero Insurance Ltd & Ors [2012] NSWSC 593, Beech-Jones J adopted these principles and made five further points as follows at [16] – [20]:

4. [43]

   The principles were re-stated, more recently, by Lonergan J in Loretta Craig & Ors v Anthony Johnson & Ors [2020] NSWSC 430 at [26]–[28] and by Davies J in Combis & Staatz as joint and several liquidators of RB Hospitality Holdings Pty Ltd (in Liquidation) v Lee [2020] NSWSC 960 at [27].

5. [44]

   In Sydney Local Health District v Macquarie International Health Clinic Pty Ltd [2020] NSWCA 274, the Court (Bell P; Gleeson and Payne JJA) wrote at [187]:

6. [45]

   Whilst the Plaintiffs argued that the separate question was purely a legal, rather than a factual, one, authorities have shown that what may first appear to be solely a question of law, may often involve findings of fact which are more properly dealt with together with the whole proceedings: Rogers v Baillieu Bullock Wilkinson Pty Ltd (1981) 28 SASR 594; Stephenson Blake & Co v Grant, Legros & Co (1917) 86 LJ Ch 439 at 440 (Warrington LJ).

Determination

1. [46]

   In this case, the questions for determination include whether amounts held in the deceased’s bank account removed by the second and third Defendants are held on trust for the deceased or his personal representative, and would, therefore, fall into the deceased’s estate.

2. [47]

   The Plaintiffs contend that any joint tenancy which may have existed as to the funds in the joint account of the deceased and the second and third Defendants was severed by either, agreement reached on or before 4 September 2017, or, by the conduct of the second and third Defendants taking an unequal share of the funds, or, some combination of both. The second and third Defendants dispute that any agreement was reached and that the joint tenancy was severed. Clearly, these assertions involve disputed issues of fact. In addition, if the joint tenancy were not severed, a question may arise as to whether a notional estate order could be made in order to satisfy any order for provision made in favour of one, or both, of the Plaintiffs.

3. [48]

   In view of the events that have occurred since the question of a separate hearing was first raised, it is clear that the notice of motion for a separate hearing must be dismissed for at least the following reasons:

4. [49]

   It follows that the Plaintiffs’ application for determination of a separate question cannot justly be granted and the Plaintiffs’ notice of motion filed on 9 June 2021 must be dismissed.

Security for Costs

1. [50]

   An order for security for costs against a plaintiff who is ordinarily resident outside the jurisdiction is to ensure that a successful defendant will have a fund available within the jurisdiction against which it can enforce a judgement for costs, so that the defendant is not forced to seek recovery in a foreign jurisdiction: Energy Drilling Inc v Petroz NL & Ors [1989] FCA 184 at 11; [1989] ATPR 40-954 at 50-422. Such an order protects the efficacy of the exercise of the power to award costs: Li v State of New South Wales [2013] NSWCA 165 at [20].

2. [51]

   The principles applicable on an application for security for costs are well known. The residence of the Plaintiffs outside Australia is a powerful factor in favour of ordering security. The application was brought promptly. Presumably, because of these matters, amongst others, without a real contest, the Plaintiffs agreed to provide security of $25,000, which they have done.

3. [52]

   The Court’s discretion to make an order for security for costs, after the threshold question of jurisdiction is established, is necessarily a wide one which must be exercised having regard to all of the relevant circumstances of the particular case. There is no fixed principle which warrants the making of an order simply because one or more of the grounds specified in r 42.21(1) are established. All of the circumstances of the case must be considered.

4. [53]

   The Court must also bear in mind that these are proceedings for a family provision order in favour of each Plaintiff. As Gaudron J pointed out in Singer v Berghouse (1993) 114 ALR 521 at 522; [1993] HCA 35, an order for security for costs involves a discretionary judgment of a very broad kind made by reference to the circumstances of the particular case and not by reference to a rule or rules which direct a decision one way or the other.

5. [54]

   The evidence does not establish whether there are reciprocal arrangements in place between Australia and Thailand that enable an Australian judgment for costs to be registered and enforced in a Thai court. Neither counsel made any submissions on the question whether there exists, in Thai courts, provision for the recognition and enforcement of judgments of an Australian court.

6. [55]

   In Porter v Aalders Auctioneers and Valuers Pty Ltd and Anor [2011] NSWDC 96, Murrell SC DCJ (as her Honour then was) at [20], wrote:

7. [56]

   Both the Act and the Regulations are still in force.

8. [57]

   I shall assume that the Defendants may have difficulty, and will, inevitably, incur additional costs, in attempting to recover the amount of any costs judgment they might obtain against the Plaintiffs.

9. [58]

   When providing security for costs, the Court does not set out to provide a complete indemnity to Defendants in respect of costs: Brundza v Robbie and Co (No. 2) (1952) 88 CLR 171 at 175; [1952] HCA 49. The Court has been informed that $25,000 has been provided by way of security.

10. [59]

    It is not possible to conclude, on the evidence, whether the second and third Defendants’ costs, calculated on the ordinary basis, to date, exceeds the amount already provided. I would not assume that it does even though senior counsel has been retained by them.

11. [60]

    In view of the nature and value of the amount in dispute, engaging senior counsel may be a luxury that those Defendants will have to personally bear rather than imposing it upon the Plaintiffs. Furthermore, the conduct of the determination of the Plaintiffs’ notice of motion has been achieved without a formal hearing of the notice of motion and has been determined, in Chambers, on the papers and without the need for a hearing. I also have regard to the effect of any order made at this time on the Plaintiffs’ ability to continue the litigation.

12. [61]

    Therefore, I shall not deal with the second and third Defendants’ application for further security for costs at this time. To the extent that the second and third Defendants’ notice of motion seeks additional security for costs at this time, it is dismissed. In taking that course, it will remain open to them to make further application if it is appropriate to do so at a later stage.

13. [62]

    I shall allow the parties to consider how the matter should now proceed. I stand the matter over to Friday 3 September 2021 for further directions. I shall deal with the directions for how any question of the costs of the two notices of motion is to be determined on the adjourned date.