Supreme Court New South Wales Medium Neutral Citation: Jalife v McIntyre [2020] NSWSC 799 Hearing dates: On the papers Date of orders: 26 June 2020 Decision date: 26 June 2020 Jurisdiction: Common Law Before: Davies J Decision: 1. Exhibit SE3 to the affidavit of Sera Elmasri sworn 15 May 2020, being the confidential advice of Michael Meek SC, is to be placed in a sealed envelope and marked "Confidential. Not to be opened without the leave of a judge of the Court". 2. Order that Noah McIntyre and Grayson McIntyre be added to the proceedings as the Third Defendant and the Fourth Defendant respectively. Dispense with any further requirements of the Rules in that regard. 3. Note that each of the first and second defendants hereby releases her and his rights respectively to make a claim for provision out of the estate and notional estate of the plaintiff in the event that the plaintiff should become a deceased person. 4. Note that each of the third and fourth defendants, by their tutor, Sera Elmasri, hereby releases his rights, respectively, to make a claim for provision out of the estate and notional estate of the plaintiff in the event that the plaintiff should become a deceased person. 5. Grant to each of the third and fourth defendants, who are minors, pursuant to s 26 of the Minors (Property and Contracts) Act 1970 (NSW), capacity to bind himself to the orders in these proceedings, including his respective releases referred to. 6. Approve the settlement contained in the Deed of Settlement and Release dated 24 February 2020 pursuant to s 76 of the Civil Procedure Act 2005 (NSW). 7. Order that the release by each of the defendants of her and his rights respectively, to apply for a family provision order out of the whole, or any part, of the estate or notional estate of the plaintiff, in the event that the plaintiff should become a deceased person, be approved pursuant to s 95 of the Succession Act 2006 (NSW). Catchwords: SUCCESSION - family provision - approval of release under s 95 Succession Act 2006 - where plaintiff was the owner of property and defendants and their children (both minors) moved to property to care for plaintiff - defendants were daughter and son-in law of plaintiff - where relationship has broken down and plaintiff now seeks possession of property – cross-claim by defendants for constructive trust - settlement of proceedings at mediation – where settlement involves selling property, distributing balance between the plaintiff and defendants, and paying grandchildren a portion of the estate upon plaintiffs death – where defendants and grandchildren seek approval of release of rights – whether release should be approved by Court – whether agreement was advantageous, prudent and fair and reasonable for the defendants Legislation Cited: Civil Procedure Act 2005 (NSW) s 76 Minors (Property and Contracts) Act 1970 (NSW) s 26 Succession Act 2006 (NSW) ss57, 59 and 95 Uniform Civil Procedure Rules 2005 (NSW) r 6.24 Cases Cited: Kelly v Kelly [2019] NSWSC 994 McMahon v McMahon (Supreme Court (NSW), Young J, 2 August 1985, Unrep) Neil v Jacovou [2011] NSWSC 87 Robinson v Robinson [2020] NSWCA 4 Spata v Tumino [2018] NSWCA 17 Texts Cited: Nil Category: Principal judgment Parties: Jose Jalife (Plaintiff) Alicia Iris McIntyre (First Defendant) Roger McIntyre (Second Defendant) Noah McIntyre (Third Defendant) Grayson McIntyre (Fourth Defendant) Representation: Counsel: On the papers Solicitors: Carroll & O'Dea (Plaintiff) McCabe Curwood (First & Second Defendants) MJM Lawyers (Third and Fourth Defendants) File Number(s): 2019/301354 Publication restriction: Nil Judgment 1. By a statement of claim filed 26 September 2019, the plaintiff, Jose Jalife, who is the registered owner of a property at 3 Centennial Lane, Ellis Lane, sought possession of that property from the defendants Alicia McIntyre and Roger McIntyre. Alicia was the daughter of the plaintiff and Roger was her husband. Also living at the property were the two children of Alicia and Roger, being Noah and Grayson McIntyre. I will refer to the parties by their first names, as they are identified as such in a Deed of Settlement and Release to which I will later refer. 2. A defence and cross-claim were filed by the defendants. The cross-claim alleged representations by the plaintiff that resulted in the defendants moving into the property and, in accordance with what they had agreed, commencing to provide domestic care and personal support for the plaintiff. The representations were said to include promises that the defendants and their children could reside with him in the property until his death, and that Alicia would inherit the property on his death. 3. The parties attended a mediation on 24 February 2020. The proceedings were settled at the mediation and were formalised by a Deed of Settlement and Release executed by the plaintiff and the defendants on that day. 4. The terms of settlement included the following provisions: 12. Alicia and Roger as the guardians of Noah and Grayson will use their best endeavours to procure a release and discharge from Noah and Grayson to Jose (including Jose's estate) from all action, suits, claims (including but not limited to any claim under Chapter 3 of the Succession Act 2006), demands, causes of action, costs and expenses, whether legal, equitable, under statute or otherwise, and all other liabilities of any nature (whether or not the parties were or could have been aware of them) which all or any of them have now at any time had, may have or, but for any settlement agreement, could or might have had against the other in any way related to these proceedings or the subject matter of these proceedings. 13. All parties agree to seek orders pursuant to section 95 of the Succession Act 2006 approving the release under this agreement or the proposed deed of settlement and release to the extent they release rights under Chapter 3 of the Succession Act 2006. 14. For the avoidance of any doubt, this agreement is subject to the court approving releases by: 1. Alicia; 2. Roger; 3. Noah; and 4. Grayson. pursuant to section 95 of the Succession Act 2006. 1. The defendants, and those acting for Noah and Grayson, now seek approval of releases given by those parties under s 95 of the Succession Act 2006 (NSW). In addition, those acting for Noah and Grayson seek approval of the settlement as it affects them, under s 76 of the Civil Procedure Act 2005 (NSW). 2. So that the settlement can be understood I should set out some background facts. 3. Following the death of his wife, the plaintiff lived in a property owned by him at Croydon until May 2014. At that time the defendants were living with the children in a property at Camden. 4. In September 2014 the plaintiff purchased the property at 3 Centennial Lane, Ellis Lane and moved into that property with the defendants and the children. In 2017, the defendants sold their Camden property. The defendants did not contribute to the purchase price of the Ellis Lane property although they claim to have looked after, and made contributions towards the care of, the plaintiff in accordance with what is pleaded in the cross-claim. 5. The parties remained in the Ellis Lane property as a family unit until approximately November 2018, when the relationship between the plaintiff and the defendants broke down, with the result that the plaintiff moved into a nursing home. 6. The plaintiff had made a will dated 29 October 2008. It provided for Alicia as the plaintiff's sole beneficiary. It provided for gifts over to Roger in the event that Alicia did not survive the plaintiff, and it provided for a further gift over to Noah and Grayson in the event that neither of their parents survived the plaintiff. 7. While it is not known whether or not the plaintiff has subsequently changed his will, the likelihood is that he has, particularly because of the breakdown in the relationship between him and the defendants, and because of the terms of the settlement achieved at the mediation. 8. Noah is aged 14 and Grayson is aged 12. 9. Noah suffers from the following medical conditions: (a) Mild development delay (intellectual disability with a mild level of impairment); (b) Severe receptive language delay and severe expressive language delay; (c) Autism Spectrum disorder; (d) Attention Deficit Hyperactivity Disorder; (e) Visual functional and visual perceptual deficiencies; (f) Conditions associated with slipped capital femoral epiphysis - a condition which caused a slippage of the growth plate at the ball at the head of the femur which required surgery in 2016 to insert expandable pins in both hips and which requires review by an orthopaedic surgeon every year; and (g) Silent reflux which results in chronic constipation. 1. Grayson suffers from the following medical conditions: (a) Autism Spectrum Disorder and global development delay; (b) Moderate severe receptive and severe expressive language delay; (c) Intellectual disability with a mild level of impairment; and (d) Chronic asthma. 1. Prior to starting school and since being at school, both boys have received a considerable amount of assistance with respect to their various medical conditions, which has been largely funded by their parents. Since school commenced for each of them, they have received and continue to receive fortnightly speech therapy, occupational therapy, visual therapy and social skills training by private and qualified allied health professionals. 2. The settlement involves the plaintiff selling the Ellis Lane property and, after payments to the mortgagee Westpac, agents fees, legal fees, outgoings, expenses to bring the property to a state of condition and repair suitable for sale, and payment of the bond not exceeding $310,000 and all outstanding costs to Estia Health Aged Care in respect of the care of the plaintiff, the balance is to be distributed 55% to Alicia and Roger, and 45% to the plaintiff. 3. Clause 8 of the settlement provided: Upon his death, Jose agrees to pay the following amounts from his deceased estate: a. to such of Noah and Grayson as survive Jose, and if both, in equal shares as tenants in common, an amount equal to 30% (in total) of his estate with such funds to be paid to be held on trust by NSW Trustee & Guardian until Noah and Grayson each attain 18 years of age. The trustee shall have a power to advance for the maintenance and advancement of life of Noah and Grayson. b. Alicia, an amount equal to 10% of his estate. c. The balance in accordance with his will. 1. The plaintiffs and the defendant agree to dismiss the statement of claim and the cross-claim with no order as to costs. The agreement then contains mutual releases and discharges by the parties, and the clauses concerned with obtaining approval from the Court that I have set out at [4] above. 2. Sera Elmasri was appointed tutor for Noah and Grayson in the proceedings. Ms Elmasri is a psychologist who has known Alicia for about 20 years and has come to know Noah and Grayson. 3. Ms Elmasri has sworn an affidavit dated 15 May 2020 where she sets out her knowledge of Noah and Grayson and their medical conditions. She annexes a number of medical reports to her affidavit concerning the medical conditions suffered by those boys. 4. Ms Elmasri says she has taken advice from her solicitor and Senior Counsel, Michael Meek SC, in relation to giving a release of the boys' rights to make any claim against the plaintiff or his estate including any claim pursuant to Chapter 3 of the Succession Act. 5. Ms Elmasri says that she has given due consideration to the advice she has received. She says: 10. I consider that, in light of the limited financial assistance provided to Noah and Grayson by Jose to date, the amount agreed to be provided for Noah and Grayson from Jose's estate, the indirect impact (financially and non-financially) these proceedings will have on Noah and Grayson if they continue and the benefit of ending the disputes that have given rise to these proceedings and that may again occur in the future with respect to the Plaintiffs estate, among other things: (a) It is to the advantage of Noah and Grayson, financially or otherwise, to give the release; (b) it is prudent for Noah and Grayson to give the release; (c) the provisions of the release; and of the Settlement Agreement are reasonable. 1. Section 95 of the Succession Act relevantly provides: 95 Release of rights under Chapter (1) A release by a person of the person's rights to apply for a family provision order has effect only if it has been approved by the Court and to the extent that the approval has not been revoked by the Court. (2) Proceedings for the approval by the Court of a release of a person's rights to apply for a family provision order may be commenced before or after the date of the death of the person whose estate may be the subject of the order. (3) The Court may approve of a release in relation to the whole or any part of the estate or notional estate of a person. (4) In determining an application for approval of a release, the Court is to take into account all the circumstances of the case, including whether: (a) it is or was, at the time any agreement to make the release was made, to the advantage, financially or otherwise, of the releasing party to make the release, and (b) it is or was, at that time, prudent for the releasing party to make the release, and (c) the provisions of any agreement to make the release are or were, at that time, fair and reasonable, and (d) the releasing party has taken independent advice in relation to the release and, if so, has given due consideration to that advice. 1. In Kelly v Kelly [2019] NSWSC 994 Hallen J set out at [72] the general principles relevant under s 95 of the Succession Act. I have been considerably assisted by his Honour's summary of those principles. That summary has recently been approved by the Court of Appeal in Robinson v Robinson [2020] NSWCA 4 at [96]-[108]. 2. I have been provided with a confidential opinion of Michael Meek SC. 3. In relation to the release given by Alicia and Roger, I note what was said by Slattery J in Neil v Jacovou [2011] NSWSC 87 at [64]: The Court may consider among the circumstances of the case, any factors as to whether the agreement was to that party's advantage, financial or otherwise: Russell v Quinton [2000] NSWSC 322 [67]-[69], [74]. However, the very fact that the agreement was made may itself show that the parties thought its terms were fair at the time of signing: Mulcahy v Weldon [2001] NSWSC 474 at [10]. When considering whether the release was "prudent" within Family Provision Act s 31(5)(b), the Court should consider that a prudent person is someone who acts with care and thought for the future, in particular in exercising care and good judgment in relation to his or her own interests: Russell v Quinton [2000] NSWSC 322 [70]. Though the releasing party may have had independent legal advice, whether that party gave due consideration to that advice is a relevant factor: Russell v Quinton [2000] NSWSC 322 [76]. (emphasis added) 1. Nevertheless, I also accept that the fact that the parties have agreed that a release should be given does not mean that the Court will always approve such a release, because it is necessary for the Court to look into the facts and circumstances relevant to the possible claim under the Succession Act: McMahon v McMahon (Supreme Court (NSW), Young J, 2 August 1985, Unrep). 2. I have had particular regard to the following matters: the Ellis Lane property was purchased by the plaintiff alone; there has been a falling out between the plaintiff and the defendants, as clearly demonstrated from the proceedings themselves; the likelihood is that the will of 29 October 2008 has been revoked and a further will executed excluding Alicia and, therefore, Roger; the agreement provides for the payment of 55% of the proceeds to Alicia and Roger, and provides for the plaintiff to leave 10% of his estate to Alicia. Having regard to those matters, I consider that the release at the time it was made, was made to the defendants' advantage financially, to make the release. It is also to the defendants' advantage that unpleasant and expensive family litigation is brought to an end. 3. Given the uncertainty of litigation in relation to the defendant's establishing their interest in the Ellis Lane property, and the certainty achieved from the settlement, I consider that it was prudent for the defendants to make the release. Bearing all of those matters in mind I consider that the provisions of the agreement were fair and reasonable. I note that the defendants have received independent advice in relation to the release. The release of Alicia's and Roger's rights should be approved. 4. In relation to Noah and Grayson, they are eligible persons if they were wholly or partly dependent on the plaintiff, and they were both grandchildren or members of the plaintiff's household: s 57(1)(e) of the Act. In the light of what was said in Spata v Tumino [2018] NSWCA 17 at [68]-[82], it is likely that Noah and Grayson would be eligible persons in the event of the plaintiff's death. It seems likely that there are factors warranting under s 59(1)(b), arising from their living with the plaintiff for some years, and having regard to their medical conditions and ongoing needs. 5. Any decision about whether the release was made to their advantage, was prudent, and was fair and reasonable, must be made in ignorance of what any present will of the plaintiff provides. Nevertheless, inasmuch as the settlement provides a minimum benefit from the plaintiff's estate after his death, and in the circumstances that the defendants receive 55% of the net proceeds of sale and that Alicia will benefit from a share of 10% of the plaintiff's estate, I consider that the release made on behalf of the boys is to their advantage financially. 6. In the same way, the settlement is prudent for the boys, because they benefit from the financial certainty it gives to their parents, both in terms of the 55% share of the proceeds, and an end to ever-increasing legal costs. That is important because of the ongoing costs of treatment for both boys. In addition, the certainty of this arrangement for their future, when compared to the risk of no provision being made for them in the plaintiff's will together with the risks and costs of future litigation in making a claim under the Succession Act, make the giving of the release prudent. 7. For those reasons, and because they are assured of receiving 30% of the plaintiff's estate on his death, the agreement is a fair and reasonable one. I note that the boys' tutor has received legal advice from her legal advisors including Senior Counsel. The advice from Senior Counsel deals comprehensively with the benefits and possible disadvantages of the settlement, and examines also the risks of not providing a release. 8. Any consideration of whether the settlement should be approved under s 76 of the Civil Procedure Act is largely co-extensive with the considerations under s 95 of the Succession Act. I consider that the settlement is beneficial for them. 9. Noah and Grayson are not parties to the proceedings. They could have sought to be joined as defendants by reason of being occupiers of the Ellis Lane property, although it is uncommon to do so where children occupiers are minors, and it is not generally considered necessary, for children to be joined if their parents are defending the proceedings. However, it seems to me appropriate that, since approval is being given under s 76 of the Civil Procedure Act, and approval is being given under s 95 of the Succession Act, and where the children are separately represented in any event, they should be made parties pursuant to r 6.24 Uniform Civil Procedure Rules 2005 (NSW). 10. Accordingly, I make the following notations and orders: 1. Exhibit SE3 to the affidavit of Sera Elmasri sworn 15 May 2020, being the confidential advice of Michael Meek SC, is to be placed in a sealed envelope and marked "Confidential. Not to be opened without the leave of a judge of the Court". 2. Order that Noah McIntyre and Grayson McIntyre be added to the proceedings as the Third Defendant and the Fourth Defendant respectively. Dispense with any further requirements of the Rules in that regard. 3. Note that each of the first and second defendants hereby releases her and his rights respectively to make a claim for provision out of the estate and notional estate of the plaintiff in the event that the plaintiff should become a deceased person. 4. Note that each of the third and fourth defendants, by their tutor, Sera Elmasri, hereby releases his rights, respectively, to make a claim for provision out of the estate and notional estate of the plaintiff in the event that the plaintiff should become a deceased person. 5. Grant to each of the third and fourth defendants, who are minors, pursuant to s 26 of the Minors (Property and Contracts) Act 1970 (NSW), capacity to bind himself to the orders in these proceedings, including his respective releases referred to. 6. Approve the settlement contained in the Deed of Settlement and Release dated 24 February 2020 pursuant to s 76 of the Civil Procedure Act 2005 (NSW). 7. Order that the release by each of the defendants of her and his rights respectively, to apply for a family provision order out of the whole, or any part, of the estate or notional estate of the plaintiff, in the event that the plaintiff should become a deceased person, be approved pursuant to s 95 of the Succession Act 2006 (NSW). ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 June 2020