Budniak v NSW Trustee and Guardian

By notice of motion filed on 17 December 2018 the plaintiffs seek an order pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 22.1 that the defendant provide verified answers to the interrogatories annexed to the notice of motion within six weeks. The plaintiffs also seek that the defendant pay his costs of the motion.

By amended statement of claim filed on 13 September 2018, the first and second plaintiffs, Tomasz Budniak and Benjamin Budniak, by his tutor Tomasz Budniak, claim damages (plus interest and costs) against the defendant, the New South Wales Trustee and Guardian. The plaintiffs claim that in preparing respectively their late father and grandfather, Stanislaw Budniak's will, the defendant owed the deceased and them a duty to take reasonable care to give effect to the deceased's testamentary intention, which was to confer his testamentary benefit on them as the intended beneficiaries of the will.

The first plaintiff is one of five children of the late Mr Budniak, who I will refer to as "the deceased". As I have already indicated, the second plaintiff is the first plaintiff's son. The deceased died in 2011 aged 89 years.

In 2007 the deceased approached the New South Wales Trustee and Guardian and requested that they prepare a will for him. The first approach was in May 2007, at which time a solicitor employed by the defendant, Mr Matthew Kennedy, took instructions from the deceased. Later in October 2007 the deceased returned to execute the will, at which time another employee, Mr Mohammed, was present when the will was executed. Two years later, the deceased met with another employee of the defendant, Ulrike Scarlett, to discuss a power of attorney.

When the deceased died, the defendant sought probate of the will, but it was challenged by the first plaintiff’s siblings, who claimed that the deceased lacked testamentary capacity at the time. In a previous will executed by the deceased in 1994, the property had been left equally among his five children.

The New South Wales Trustee and Guardian commenced probate proceedings by a statement of claim filed on 9 November 2012, with an amended statement of claim filed on 12 June 2013. Those proceedings were decided by Hallen J in The Estate of Stanislaw Budniak; NSW Trustee and Guardian v Budniak [2015] NSWSC 934. Relevantly, his Honour held that on the evidence he was unable to find that the deceased had testamentary capacity, or that he knew and approved of the terms of the 2007 will. In arriving at that conclusion, his Honour made a number of criticisms of the New South Wales Trustee and Guardian as to the making of the 2007 will, and the steps it took to ascertain the deceased's testamentary capacity and knowledge of the 2007 will at the time it was being made. Those observations by his Honour are at [406] to [468] of that judgment.

His Honour held that there could not be a grant of probate in solemn form of the 2007 will and instead there should be grant of probate of an earlier 1994 document, in which the estate was shared among the five children of the deceased.

UCPR r 22.1 provides:

The plaintiff seeks interrogatories grouped in five separate categories.

The first category is directed to the relevant policy and procedures and practice in place at the defendant in 2007 (questions 1 to 8).

The second category (questions 9 to 17) is directed to the taking of initial instructions from the deceased in May 2007, with a particular focus on a meeting that the deceased apparently had with Mr Kennedy. Mr Kennedy provided two affidavits in the proceedings before Hallen J dated 23 March 2013 and 20 November 2013, respectively, which were read in those proceedings and the interrogatories have been prepared on the basis of those affidavits.

The third category (questions 25 to 31) is directed to the taking of final instructions from the deceased in October 2007 by Mr Mohammed. Again, the basis for those questions is the affidavit of Mr Mohammed, sworn 17 October 2013, which was read in the proceedings before Hallen J.

The fourth category (questions 18 to 24) is directed to any observations made by Ms Scarlett who was an employee of the defendant at the time, as to the deceased's capacity and understanding of his financial affairs when she met with the deceased in August 2007. Ms Scarlett also had her affidavit, sworn on 25 September 2013, read in the proceedings before Hallen J.

The fifth and final category of interrogatories (questions 32 to 34) is directed to the plaintiff's alternative damages case, namely, the diminution of the deceased's estate after the 2007 will was disputed

The parties made detailed submissions, both in writing and orally, in favour of and against the order proposed, as well as to particular interrogatories. Although I will set out the position of the parties in broad terms, I do not propose to refer to all of the submissions made in these reasons. In any event, the respective arguments should be apparent from the conclusions I have reached.

Counsel for the defendant opposed the order sought on a number of bases. First, it was argued that the relevant test applicable in this case is that under UCPR r 22.1(3), as the fact that the proceedings are "a claim for damages arising out of the death of, or bodily injury to a person", means the order is not to be made unless the Court is satisfied that special reasons exist that justify the making of the order. It was submitted that no such special reasons exist. It was submitted that if the plaintiffs are in any position of disability or disadvantage, it is of their own making and borne of the conceptual challenges that the plaintiffs have decided to take on.

The defendant in his written submissions relied upon principles of statutory construction in support of his argument, to which I will refer again.

If the primary submission of the defendant was not accepted by the Court, the defendant's alternate position was that, consistent with the test under UCPR r 22.1(4) the order is not necessary at this time. It was submitted that if, as the plaintiff contends, the test for necessity is simply whether they are useful, then answers to interrogatories almost always would be ordered. Reliance was placed on the observations of Adamson J in El-Mouelhy v Reid [2017] NSWSC 623 at [5] and [6].

It was further argued that if the purpose of the interrogatories was for the preparation of an expert report, then, consistent with the decision of Young J in Permanent Trustee Australia Ltd v Boulton; Permanent Trustee Australia Ltd V Lynjoe Pty Ltd (1994) 33 NSWLR 735, the evidence would not assist in any event.

The third opposition to the orders is that on a one by one basis, most of them were objected to on bases including form, necessity, oppression and whether alternate procedures are more suitable.

On behalf of the plaintiff, it was submitted that these proceedings do not arise out of "a claim for damages, out of the death of or bodily injury to any person" and thus the relevant test is one of necessity. Even if the Court was to accept that the higher test applied, that test could be satisfied on the facts of this case in any event.

I cannot accept the defendant's submission that a claim of professional negligence arising out of the writing of a will is a proceeding on a claim for damages arising out of the death or bodily injury to a person. The claim for damages does not arise out of the death of the deceased, although his death is a relevant event that gave rise to the need to seek probate in relation to the 2007 will. The defendant relied upon principles of statutory construction to argue that the phrase "arising out of" takes its meaning from its context. In his written submissions Mr Tam submitted that the requirement for special reasons reveals a legislative intent to impose restraints on the availability of interrogatories in particular cases. It was further submitted that the phrase "arising out of" takes its meaning from context and is synonymous with the expression "in connection with", because of the rational connection between the limitation and the statutory directive.

It is to be accepted that on principles of statutory construction, context is of significance. However, as was emphasised by the plurality in SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 91 ALJR 936 at [14] per Kiefel CJ, Nettle and Gordon JJ, the starting point for ascertaining the meaning of a statutory provision is the text of the statute, whilst at the same time having regard to its context and purpose. Considerations of context simply recognise that, understood in its statutory historical or other context, some other meaning of a word may be suggested. It is important for the purposes of the present exercise of construction, to have regard to the text of the statute first.

Consistent with these established principles of statutory construction, I have had regard to the text of UCPR r 22.1(3). It refers to claims for damages arising out of the death or personal bodily injury to a person. The plain meaning of the word is that the claim for damages in personal injury claims, whether or not death has occurred, is in a different category to other litigation.

I am thus satisfied that the appropriate test to apply is that of whether these interrogatories are necessary.

The parties relied upon a number of authorities from which the relevant principles can be derived. As Adamson J observed in El-Mouelhy v Reid in the paragraph I have already referred to above:

In Mohareb v Harbour Radio Pty Limited [2018] NSWSC 1992 McCallum J observed the following at paragraphs [45] to [48]:

I have also had regard to the decision of Ward J In the matter of Gerard Cassegrain & Co Pty Ltd – Cassegrain v Gerrard Cassegrain & Co Pty Ltd [2011] NSWSC 241 at 27 and 31; and the decision of Schmidt J in Edwards v Hornsby Shire Council [2014] NSWSC 600 at [16] to [18].

The defendant, in its defence to the amended statement of claim, positively pleads that at the time the 2007 will was made, the defendant was satisfied that the deceased had testamentary capacity and had approved of its contents. It pleads that it was unnecessary for the defendant to take the precaution it is said it failed to take, because of other specified steps the defendant did take, to satisfy itself that the deceased had testamentary capacity and knew and approved the contents of the 2007 will.

In light of this defence, the question arises as to what the defendant did in the process of taking instructions from the deceased and in preparing the 2007 will and how it was that, through its employees, it satisfied itself that the deceased had testamentary capacity and knew and approved of the contents of the 2007 will.

On behalf of the defendant, Mr Tam submitted that the interrogatories were not necessary, because they were to brief an expert. It was further submitted that the plaintiff has the relevant information in any event from the affidavits and other documents filed in the proceedings before Hallen J. It was further submitted that the plaintiff's case depends on persuading the Court of a counterfactual, namely, that had the defendant done its job correctly, it would have successfully persuaded Hallen J that the deceased had testamentary capacity at the time of the 2007 will. It was submitted that the expert evidence will be only one of many factors which will be relevant to that issue and in that regard it was submitted the expert’s report is not of significant importance.

Mr Chiu responded to this by submitting that the answers to the interrogatories are necessary for three reasons: to establish what happened; to establish the likely departure from good practice; and also to address the question of causation. It was submitted that the plaintiff needs admissible facts and that there are two problems facing the plaintiff with respect to briefing an expert on the current state of the plaintiff's knowledge. First, the current assumptions cannot be proved, and second, the plaintiff needs to know what happened in order to brief the expert. A further factor relied upon is that there may well be other evidence which could have persuaded a judge otherwise than was concluded by Hallen J, and the plaintiff seeks to ascertain that as well.

I am satisfied that all of the interrogatories that were ultimately pressed are necessary. Although Hallen J has already made relevant findings as to issues in dispute in this matter, the plaintiffs cannot rely upon those findings by virtue of the operation of s 91 of the Evidence Act 1995 (NSW), and nor can the plaintiffs rely upon the affidavits filed in the earlier proceedings, unless leave is granted to do so. Although there is evidence arising from those proceedings which may assist the plaintiff, that evidence is not currently admissible.

Turning to the categories of interrogatories sought by the plaintiff, and the specific objections to them, a number of specific submissions were made before me. As I have already indicated, I do not consider it necessary to address the objections to each of the 34 interrogatories separately, although I note that there was no objection to answering questions 31 to 34 and the plaintiff did not press interrogatories 9 and 17. In relation to interrogatories 2, 11, 12, and 20 to 29, amendments were made such that the word "understanding" was substituted for the word "belief", but otherwise I was satisfied that the objections made on behalf of the defendant were not made out.

A number of those objections, in general form, had been on the basis that the interrogatories were not necessary because the material was available in the proceedings before Hallen J. Given my finding in relation to that issue, the objections to a number of the particular interrogatories fell away.

The plaintiff will email my Associate with a copy of proposed interrogatories consistent with my orders

The plaintiff has been successful in its motion. Although there is a discretion in the Court in relation to the awarding of costs, the usual course is that costs follow the event. Nothing was put to me to provide a basis to depart from that general practice and thus the defendant is to pay the plaintiff's costs of the motion.