BROWN v AKERMAN [NO 2] SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P 15 June 1995, 1 September 1995 [1995] NSWCA 61 PRACTICE and PROCEDURE — extension of time — notice of appeal without appointment filed in time — negotiations to settle dispute — summons for leave to appeal against costs order only — advice by counsel as to prospects of appeal — differences between appellants as to desirability of limiting appeal or appealing on all grounds — summons for leave to appeal against costs order only rejected and leave refused — subsequent prompt application for extension of time of seven weeks within which to appeal against substantive orders as well as costs — whether such extension should be refused as (a) inconsistent with the step taken by the litigants in affirming their abandonment of the substantive appeal and confining their summons for leave to appeal to costs; (b) grounded in a confirmed decision properly made on legal advice; (c) grounded in the likely outcome of an appeal; and (d) on the ground of departure from the Rules of Court as to appeals without appointment not followed within time by an appeal with appointment WILLS, PROBATE AND ADMINISTRATION — capacity — proof of will evidence of hallucinations and mental and physical illness — whether case unarguable — whether extension of time should be granted of seven weeks within which the appellants were out of time to follow a notice of appeal without appointment with a notice of appeal with appointment Held: (Kirby P): Extension of time granted but on terms as to costs both of the motion for extension of time and of the earlier summons for leave to appeal. Gallo v Dawson (1990) 64 ALJR 458 (HC); Zeiz v Lindahl, Court of Appeal (NSW) unreported, 12 September 1994; Morris v Public Transport Commission of NSW, Court of Appeal (NSW) unreported, 28 May 1984 applied. Held: Appeal not clearly unarguable. Re Estate of Ethel Gertrude Griffith (Deceased); Easter v Griffith and Ors, Court of Appeal (NSW) unreported, 7 June 1995 considered. Supreme Court Act 1970, s81. Supreme Court Rules Pt51 R5(1), Pt51 R5(2). Rules of the Supreme Court (England) (Rev 1965) O.2 RI. ORDERS 1. Order that the claimants have fourteen days within which to institute an appeal from the whole of the decision of Young J dated 14 December 1994 in the form of the notice of appeal with appointment, as last amended and handed to the Court in the course of these proceedings; and 2. Order that, as a condition of the extension of time in O.1, the claimants: (a) pay all costs reasonably incurred by the appointment of an incidental to the motion for extension of time; and (b) pay, in addition to the costs of the summons for leave to appeal, ordered by the Court on 22 May 1995, all costs reasonably incurred by the opponent which would not otherwise be within the order made by the Court on that day. 2 UNREPORTED JUDGMENTS Kirby P Before me is a motion for the extension of time within which Mrs Margaret Brown, Mr Ronald Crooks and Mr Robert Crooks (the claimants) may institute an appeal against the whole of the decision of the Supreme Court in its Probate Division (Young J) delivered on 14 December 1994. Alternatively, an order is sought granting leave to the claimants to amend a notice of appeal with appointment which they filed on 11 April 1995 by filing, although out of time, a supplementary notice of appeal. I regard the case as a borderline one. The resistance to the relief sought by Mr Steven Akerman, executor of the will of the late Owen Arthur Crooks (the deceased) is both understandable and justified. However, in the end, I have decided to provide relief. I will do so upon terms which ensure that the claimants bear the costs which have been incurred as a result of the way in which they have prosecuted their appellate rights to date. DISPUTE ABOUT A WILL AND RESOLUTION The dispute between the parties concerned a will made by the deceased on 12 February 1991. He died a few months later on 15 June 991 at the age of seventy. He had experienced cardiac problems for a number of years before his death. He had made an earlier will in August 1976 which left his estate to family members. The 1991 will, on the other hand, appointed Mr Akerman, his solicitor, as executor. That will distributed the residuary estate equally amongst five church bodies, three charities and two shares to individuals. For the most part, no relative bearing the name of Crooks took any benefit under the 1991 will. Following the death of the testator, caveats were lodged in July 1991 by members of the family. Proceedings to remove the caveats were commenced on 8 June 1993. These resulted in the hearing before Young J in August and September 1994. That hearing enquired into the capacity of the deceased to make the will which Mr Akerman propounded. There is no doubt that some of the behaviour of the deceased, recorded by Young J in his reasons, indicates unusual, even bizarre conduct. He was given to confusion and auditory hallucinations. He heard voices and occasionally manifested erratic and confused behaviour. He underwent five treatments of electro-plexy (ECT). He had undergone severe cardiac failure in April 1988. However, his firm beliefs as a member of the Christian Science religion resulted in his refusal, from time to time, to take medication. He was admitted to the Macquarie Psychiatric Hospital in October 1990 and in November 1990. The hospital records suggest that he as found, on admission, to be "noticeably confused". His relapses were ascribed to his failure to take anti-depressant medication, presumably for religious reasons. In between his admissions to hospital, the deceased was having conferences with Mr Akerman, his solicitor. He ascribed his intended change in the provisions of his will to the fact that the members of his family were well off, showed no affection to him and only contacted him when they wanted documents signed in connection with their mutual interest in family businesses. Before Young J, Mr Akerman and his personal secretary, Mrs McNeilis, gave strong evidence supporting the apparent capacity and lucidity of the deceased at around the time the propounded will was made. But after that time there were further acts of the deceased which were, to say the least, unusual. Although he had never married, he proposed marriage to a Mrs Nancie Ryman. Mrs Ryman declined his offer. Nonetheless, the deceased book a reception hall, made arrangements for a wedding reception and compiled a list of wedding guests. He asked two persons to be his best man. URJ BROWN v AKERMAN [NO 2] (Kirby P) 3 Young J concluded that the attack on the 1991 will failed and that it should be admitted to probate. He declared that the will, signed in the presence of Mr Akerman and Mrs McNelis was the last will of the deceased, entitled to be admitted to probate as in solemn form. He ordered that the claimants. as defendants, pay Mr Akerman's costs of the proceedings. APPEAL AND SUMMONS FOR LEAVE TO APPEAL The foregoing judgment was delivered on 14 December 1994. On 12 January 1995, well within time, the claimants filed a notice of appeal without appointment. This may be done under new procedures adopted by the Court. See Pt51 R5(1)(b)(i) SCR The notice of appeal filed conformed to Form 60A. It challenged Young J's substantive orders and his Honour's orders as to costs. By Pt51 R4(1) SCR it is provided: "An appeal must be instituted within 28 days after the material date or within such extended or abridged time as the Court of Appeal may fix." By Pt51 R5(2) SCR the appellants, upon filing the notice of appeal without appointment, had three months after that date within which ti file a notice of appeal with appointment in accordance with Form 60. That form requires that the appellants should identify the date that any lave to appeal was granted, whether the whole or particular parts of the decision were appealed from, the grounds of the appeal and the orders sought. It is common ground that the claimants failed to comply with PtS1 R5(2) SCR. It is that failure which now brings them before the Court for an extension of time for the filing of their proposed notice of appeal with appointment. There then occurred an event which acutely complicates the case. The claimants purported to file a notice of appeal limited to a challenge to the cost orders of Young J. The evidence shows that, following the failure of the claimants' challenge to the will, they consulted senior counsel who had appeared for them at the trial. He advised the claimants that the judgment relating to costs was "undoubtedly wrong". He considered that "an appeal on costs would be successful". However, he also said "appealing all of the judgment was more likely than not to be unsuccessful". One of the claimants, Mr Ronald Crooks, stated in his evidence, which I accept, that he was of the view, which he expressed to the other claimants, that they should contest the whole of the decision: "We have already spent a large sum of money on this case and lost. It appears that the costs of appealing the whole of the judgment will not be much greater than limiting the appeal to the matter of costs. It is my view that we should appeal the whole lot." However, Mr Ronald Crooks discovered that Mr Ken Crooks had given instructions to proceed only on a challenge to the costs order. He assumed that he had been "out-voted". He did not press his view that the appeal should be pursued in its entirety. When the purported appeal limited to costs only was received, the registry of the Court of Appeal drew to the attention of the solicitors for the claimants the provisions of s101(1)(2)(c) of the Supreme Court Act 1970. It was then accepted that leave to appeal was required. A summons for leave to appeal was filed. That summons came before the Court (constituted by Clarke JA, Sheller JA and myself) on 22 May 1995. At the outset of the proceedings, the Court was informed that the claimants were not contesting the substantive decision of 'Young J. All that was in contest was the order that his Honour made that they should pay the costs. It was suggested that his Honour had failed to have regard 4 UNREPORTED JUDGMENTS to the principles stated in a number of probate suits, to the effect that where persons with an interest properly put an executor to the proof of the capacity of a testator, where this is in some doubt their costs, of the investigation, should be borne by the estate. Cf Re Egar, Supreme Court (NSW), unreported decision of Powell J, 4 February 1985. After hearing the argument, the Court dismissed the application for the reasons then stated. See Brown and Ors v Akerman, Court of Appeal (NSW), unreported, 22 may 1995; [1995] NSWJB 61. Essentially, it was held that the costs discretion involved a number of considerations. It would have been open to the claimants to have asked Young J to reconsider his order as to costs before it was perfected. Their failure to do so had deprived the parties, and his Honour, of any additional evidence relevant to the suggested necessity of investigation of the deceased's capacity. The summons was thus dismissed with costs. Mr Akerman (and those taking under the 1991 will) were then entitled to assume that the proceedings were at an end. Not so. On 5 June 1995 the present summons was filed. It seeks the orders previously stated, in effect, to reopen the entire judgment of Young J including, specifically, in relation to costs. The last day upon which the claimants could have filed a notice of appeal with appointment, reliant upon the appeal lodged on 12 January 1995 was 12 April 1995. Accordingly, they were seven weeks out of time when they commenced these proceedings for relief. but in the meantime they had taken a fresh step in the proceedings, and one inconsistent with the relief now claimed. Unsurprisingly, Mr Akerman opposed the provision of relief. THE JURISDICTION AND APPROACH OF THE COURT The power of the Court to permit the claimants, although out of time, to file a notice of appeal with appointment was not disputed. That power resides in the Rules and also in the inherent power of the Court. But Mr Akerman suggests that, for a number of reasons, the extension should be refused: 1. In the absence of an order, the appeal lodged by the claimant, without appointment, was taken to be discontinued. This was because the claimants had not complied with the Rules of Court with respect to the filing of a notice of appeal with appointment. See Pt51 R5(4) SCR; 2. The evidence disclosed that the claimant had accepted the abandonment of the appeal on the substantive orders of Young J. They had been well and properly advised by senior counsel. This was not a case of oversight, slip or mistake on the part of solicitors. The claimants had been informed of the difficulties in their way and of counsel's advice that they would probably fail. Thereupon, by the procedures which they had formally observed amongst themselves, they decided that the appeal should be limited to a challenge to the costs order only. They should be held to that decision; 3. They had given effect to that decision first by their purported notice of appeal and then, when required, by the summons for leave to appeal limited to the challenge to ie costs order. By their counsel they had announced to the Court of Appeal that they had renounced an appeal against the finding of capacity. Now they were seeking to reopen the very matter which publicly, in open court, they had abandoned; 4. So far as the evidence of Mr Ronald Crooks to the effect that he had been misled into believing that he had no independent right to appeal, it was contended that this hardly squared with evidence that he had been content, earlier, to defer to the decisions of his uncle, Mr Robert Crooks and to follow the course hitherto observed in the conduct of the litigation; URJ BROWN v AKERMAN [NO 2] (Kirby P) 5 5. Even if prejudice, or the absence of prejudice, was a relevant consideration before the Court in an application for leave to appeal out of time, it was not the only or even the primary consideration. The Rules of Court must prima facie be obeyed. (See Ratnam v Cumarasamy [1965] 1 WLR 8 (PC), 12). "A case would need to be exceptional before a court would enlarge by many months the time for lodging an appeal simply because the applicant had refrained from appealing until he or she had researched the issues involved." Gallo v Dawson (1990) 64 ALJR 458 (HC), 459. Having chosen ie battlefield of costs, and lost, it would e an offence to justice if the appellants, by way of an extension of time to appeal on all grounds, could reagitate the costs argument which had already been vigorously debated and solemnly (and apparently finally) determined by the Court of Appeal when the summons for leave to appeal was dismissed; 6. Although no specific prejudice was asserted (and no evidence called to prove it) two elements of prejudice were mentioned. The first was the vested right which Mr Akerman had in the judgment which was prima facie final, the earlier notice to appeal being deemed to be discontinued. Secondly, there were the delays in winding up the estate of the deceased which were necessarily occasioned whilst the question remained as to whether the will propounded by mr Akerman (and granted probate by Young J) was really the last will of the deceased, recognised as such by the law. Because of the complex family company and the related business arrangements, it was suggested (but not strictly proved) that this caused considerable inconvenience of which the Court was entitled to take notice. The possibility of further litigation, depending upon the determination of these proceedings, was also mentioned, although apparently for the first time so far as the claimants were concerned; 7. During the hearing of these proceedings, evidence was admitted to show that there had been negotiations between the parties, designed to elicit an agreement on the part of Mr Akerman to a variation of the costs order of Young J as a price for the abandonment by the claimants of their appeal against the substantive determination of the suit. Although initially the opponent objected to the proof of these without prejudice negotiations, he ultimately asked that they be taken into account as showing that, from first to last, after the decision of Young J, the claimants, and those advising them and taking their instructions, realised the profound difficulties which they faced in disturbing Young J's conclusions; and 8. It is clear law that the Court, facing an application such as the present, must endeavour, in a general way, to assess whether the applicant has "real prospects of succeeding in [the] proposed appeal." See Gallo, above, 459. This is because, if the appeal is manifestly hopeless, the Court will not delay overlong to consider questions of prejudice, explanations for delay and so on. It will bring the litigation t a close. It will thereby save further private, but also public, time and cost. Necessarily, a court cannot, in the ways motions of this kind are typically dealt with, reach anything but a preliminary and tentative view of the prospect of the proposed appeal. For Mr Akerman it was put that I would conclude, from a review of Young J's reasons, that the advice given by senior counsel who acted for the claimants at the trial and by the solicitors in their settlement correspondence was correct. It would be very difficult to disturb Young J's conclusions. 6 UNREPORTED JUDGMENTS In support of the foregoing submissions, the opponent relied upon such decisions as Zeiz v Lindahl, Court of Appeal (NSW), unreported, 12 September 1994. That was a case where the Court (Handley, Powell and Cole JJA) was asked to review a decision of a single Judge of Appeal who had refused an application for an extension of time within which the claimant might appeal from a decision of the District Court. In that case, the claimant had signed a letter addressed to his solicitors within the time for appealing indicating that he had decided not to appeal. Eight months later, he issued the summons, stating that he had changed his mind. This Court rejected the view and affirmed the decision of the single judge: "He and his family had the benefit of appropriate and, so far as appears, accurate and sound advice in support of the lodgment of an appeal in adequate time to enable a decision to be made on that issue after due deliberation. There has been no procedural default due to some accident or to the error, or negligence of the claimant's legal advisers against which he seeks protection by means of an order extending the time. Put bluntly, the claimant has changed his mind and for that reason alone, seeks an extension of time." After referring to Gallo, Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 (CA), 92 and Hughes v The National Trustees Executors and Agency Company [1978] VR 257 (FC), 263, the Court dismissed the application for review. Handley JA, who gave the judgment of the Court, said that he had: "... not been persuaded that justice requires the grant of an extension o time in the present case." For Mr Akerman it was put that the same result should follow here. A deliberate decision had been made. Moreover, the claimants had acted upon that decision. Esdaile v Pain (1889) 40 ChD 520. They were not under any incapacity. On the contrary, they had the best possible legal advice available to them. They should be held to their earlier decision, affirmed by their unsuccessful summons for leave to appeal. The court could the more readily take this course because the prospects of success in a substantive appeal were slight and there should be no second chance to challenge the costs order. THE EXTENSION OF TIME SHOULD BE GRANTED I acknowledge the force of the foregoing arguments. For a time they held me. However, I have concluded that the claimants should have the extension they seek, but on terms. My reasons are as follows: 1. They claimants did appeal. They appealed within time. True it is, the appeal they lodged required further steps to be taken in order to crystallise in a properly formulated challenge to the judgment of Young J. But this is not a case where there was any initial doubt about the intention of the appellants to appeal. That doubt was dispelled when the notice of appeal was filed on 12 January 1995; 2. The claimants did not, at least until 22 may 1995 when the summons was before this Court, expressly abandon the appeal to the Court. Therefore, during at least part of the time in which the default occurred here (ie between 12 April 1995 and 5 June 1995), the opponents would reasonably have been under the assumption that the claimants were intending to prosecute a full appeal; 3. The without prejudice correspondence which was admitted (exhibit B) shows the claimants' solicitor at that time explaining what were said to be the strengths in the substantive challenger to the orders of Young J. Therefore, to the extent that Mr Akerman was informed of these things, he would have been aware URJ BROWN v AKERMAN [NO 2] (Kirby P) 7 of the intention of the claimants to agitate their various objections to the approach which Young J had taken in disposing of the substance of the challenge to the propounded will; 4. No actual prejudice was sought to be proved. Although this is not conclusive, it is plain from many authorities that the existence, or absence, of actual prejudice is a relevant matter for the Court to take into account in determining an application of this kind; 5. By the measure of cases in which extensions of time are sought nowadays, the time default in the presence case (seven weeks) is not long. It is true that, in an earlier era, time defaults of such a length, or even shorter, would have been fatal. However, more recently, under the stimulus of provisions such as s81 of the Supreme Court Act, the courts have generally retreated from the severe formalism which previously marked court procedure as to time. The rationale for this new approach was expressed by Moffitt P in Morris v Public Transport Commission of New South Wales, Court of Appeal (NSW), unreported, 28 May 1984. Speaking of s81 of the Act, and the English precursor (RSC Rev 1965, O.2, R1) Moffitt P addressed attention to the merits of the case. He cited the judgment of Lord Denning MR (with which Diplock LJ agreed) which referred to ie English rule, where his Lordship said: "This new rule does away with the old distinction between nullities and irregularities. Every omission or mistake in practice of procedure is henceforth to be regarded as an irregularity which a Court can and should rectify so long as it can do so without injustice. It can at least be asserted that: 'It is not possible for an honest litigant in Her majesty's Supreme Court to be defeated by any mere technicality, any slip, any mistaken step in his litigation." Harkess v Bell's Asbestos and Engineering Ltd [1967] 2 QB 729 (CA), 735. The foregoing passage has been cited and applied in a number of recent cases in this Court. See eg Australian Coastal Shipping Limited v Curtis Cruising Pty Ltd (1989) 17 NSWLR 734 (CA), 753; Dimas v Government Insurance Office of New South Wales, Court of Appeal (NSW), unreported, 28 May 1992; [1992] NSWJB per Sheller JA 10. I do not overlook the argument that this was not a case of a slip or a mistake but a deliberate decision. But, on the evidence of Mr Ronald Crooks, it seems to have been taken without full involvement of all of the claimants. I accept that Mr Ronald Crooks was of the view that the appeal should proceed on all grounds but did not make that view known, either because he mistook his right or believed that he had been out-voted; 6. The object of the discretion which is enlivened by the present application is not to punish the claimants. Their claim is not fraudulent. If an extension can be provided to them upon proper terms which avoids an injustice, the new approach to the application of rules as to time will sustain the ordering of the extension they seek. Had the claimants brought their appeal with appointment by 12 April 1995, they would have needed no extension. they now seek to do so seven weeks late. Subject to what follows, I consider that their time default should be cured; 7. When I turn to the substance of the case which the claimants seek to agitate in the appeal, I cannot say that it is clearly without merit, and likely to fail. Of course, I cannot equally not say that it will succeed. But there are elements in the evidence which give rise to some doubts about the issue of the deceased's capacity to make will at the time the 1991 will was made. I have already mentioned some of the factual considerations which would doubtless be agitated in an appeal by way of rehearing. They include the deceased undoubted confusion, treatment for mental disturbance, refusal to take medication and 8 UNREPORTED JUDGMENTS apparent fantasies concerning his impending marriage to Mrs Ryman. Much of this evidence was uncontested. Whilst great respect would be paid to the decision of the primary judge, subject to their time default, the claimants would be entitled in an appeal to have that decision scrutinised as on a rehearing, as s75A of the Supreme Court Act permits. The claimants also indicated that they raised a number of arguments of law in contest to the approach which Young J took about the date for testing capacity, about the criteria for establishing capacity and about the onus which applied in the circumstances of the present case. I would not be willing, at least at this stage of my understanding of the issue for debate and appeal to conclude that the appeal is manifestly groundless. I do not agree that the claimants ought not to have a second chance to challenge the discretionary decision on costs. But that is a matter which can be adequately controlled by the Court hearing any appeal. Obviously, if the claimants were to succeed in disturbing the substantive decision of Young J, they would be entitled to have their costs. If they do not, this Court is scarcely likely to revisit the order for costs, standing alone. I believe that the claimants understood this reality. The recent judgment of the Court in Re Estate of Ethel Gertrude Griffith (Deceased); Easter v Griffith and Ors, Court of Appeal (NSW), unreported, 7 June 1995; [1995] NSWJB 61 demonstrates that delusion may still be indicators of mental disorder. See eg Gleeson CJ, Griffith, at 11. Although there are important points of distinction between the present case and Griffith, it is notable that in that case, where the delusions appear (to my eye) much less obvious and vivid than those described in the instant case, the decision of the primary judge, finding against capacity, was confirmed by this Court. Each case rests upon its own facts. But it is highly desirable that, in this Court, a measure of consistency should be achieved. The claimants should have the right to bring their appeal, as they might have done had they only filed their documents seven weeks earlier. For most of the time following the judgment of Young J, Mr Akerman was clearly on notice that the claimants were dissatisfied with his Honour's judgment and were contemplating an appeal. We now know that they sought, and obtained, certain advice which helps to explain the course they took. There is no absolute rule that the taking of advice forbids a second decision. The Rules of Court are not rules of a litigious game. Morawski v State Rail Authority of New South Wales (1988) 14 NSWLR 374 (CA), 376. They are rules to assist the Court to come at justice, having regard to the approved circumstances of the particular case in hand. CONDITIONS FOR AN EXTENSION I made it plain that I would not contemplate providing the extension sought except upon condition that the claimants pay all reasonable costs that were incurred by the opponents both in resisting the summons for leave to appeal and in resisting this motion. Senior counsel now appearing for the claimants (who did not appear for them at the trial) did not contest such a condition. I consider that the Court has the power to add it and that, in the circumstances of this case, it should do so. The orders which I make are: 1. Order that the claimants have fourteen days within which to institute an appeal from the whole of the decision of Young J dated 14 December 1994 in the form of the notice of appeal with appointment, as last amended and handed to the Court in the course of these proceedings; and 2. Order that, as a condition of the extension of time in O.1, the claimants: URJ BROWN v AKERMAN [NO 2] (Kirby P) 9 (a) pay all costs reasonably incurred by the opponent of an incidental to the motion for extension of time; and (b) pay, in addition to the costs of the summons for leave to appeal, ordered by the Court on 22 May 1995, all costs reasonably incurred by the opponent which 5 would not otherwise be within the order made by the Court on that day. COUNSEL: Claimant: CR Einstein QC/DG Stewart 10 Opponent: B Rayment QC/J Robson SOLICITORS: Claimant: Gadens Ridgeway 15 Opponent: Gilbert and Tobin