New South Wales Supreme Court CITATION : Liprini v Liprini [2008] NSWSC 423 HEARING DATE(S) : 11 April 2008 JURISDICTION : Equity Division Duty Judge List JUDGMENT OF : Brereton J EX TEMPORE JUDGMENT DATE : 11 April 2008 DECISION : Motion dismissed with costs. CATCHWORDS : CONTEMPT – where orders made by consent by Registrar pursuant to (NSW) Family Provision Act 1982, s 7 for provision out of estate – whether failure to pay by defendant executor is punishable contempt of court – "criminal contempt". - FAMILY PROVISION ACT 1982 – enforcement – nature of orders made pursuant to section 7 – whether an order of the court or a codicil to relevant Will. (NSW) Family Provision Act 1982, ss 7, 14 LEGISLATION CITED : Supreme Court Rules, Pt 55 Uniform Civil Procedure Rules, Pt 40, rr 7, 8 CATEGORY : Principal judgment Gorman v Gorman; Estate late Jeanette Mary Gorman [2003] NSWSC 647 CASES CITED : In re Jennery [1967] 1 Ch 280 Wentworth v Wentworth (NSWSC, 4 September 1991, unreported) Wiblen v Feros (1998) 44 NSWLR 158 PARTIES : Kevin Liprini (plaintiff) Allan Stephen Liprini (defendant) FILE NUMBER(S) : SC 3790/06 COUNSEL : Mr M R Lawson Mr N Lyon (solicitor) SOLICITORS : Redmond Hale Simpson Lawyers (plaintiff) Neil Lyon, Solicitor (defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST BRERETON J Friday 11 April 2008 3790/06 Kevin Liprini v Allan Stephen Liprini JUDGMENT (ex tempore) 1 HIS HONOUR: James Natale Liprini died on 21 January 2005 leaving a Will dated 5 October 2001, probate of which was granted on 2 August 2005 to the defendant Allan Stephen Liprini. According to the inventory of property filed in support of the application for probate, the deceased left assets totalling about $1.18 million, and also had an interest as joint tenant in another real property, presumably with his wife, with whom he also shared, as joint tenants, two bank accounts. By summons filed on 18 July 2006, the plaintiff Kevin Liprini claimed an order under (NSW) Family Provision Act 1982, s 7, for provision for his maintenance and advancement in life out of the estate. 2 The defendant swore and served an affidavit, as required by then Supreme Court Rules, Pt 77 r 59, on 19 October 2006, in which he disclosed that, in accordance with provisions of the Will, sums totalling in excess of $658,000 had been transferred to the deceased's widow, and a real property worth $550,000 had been transferred to the defendant, and that the current value of the undistributed estate was only $30,000. 3 The proceedings were mediated before a Registrar of the Court on 6 December 2007, at which all parties were apparently represented by lawyers. The mediation was conducted in circumstances in which, according to the defendant, he was very ill and unable to comprehend what was proceeding. It is not necessary and would be indeed inappropriate, to determine on this application whether that was so and, if so, what consequences might follow; at this stage, in any event, no application has been made to set aside the orders which were made, by consent, on 6 December following the settlement, in the following terms: (1) Order under s 7 of the Family Provision Act that provision be made in favour of the plaintiff out of the estate of the late James Natale Liprini in the sum of $750,000; (2) That the plaintiff's costs, agreed in the sum of $20,000, be paid out of the estate of the late James Natale Liprini; and, (3) Order that the defendants' costs be paid out of the estate of the deceased on an indemnity basis. 4 The Court also made a notation, which is not relevant for present purposes, as to an agreement on the part of the plaintiff to release a potential claim against another estate. 5 No sum has been paid to the plaintiff as a result of the orders made on 6 December 2007. The plaintiff's solicitors have corresponded with solicitors who then acted for the defendant, pressing for payment, to no avail. 6 On 3 March 2008, the plaintiff filed a motion claiming a declaration that the defendant is in contempt of orders (1) and (2) made on 6 December 2007, and an order that he be dealt with by the Court for contempt. The statement of charge that accompanied the motion was, in substance, that the defendant had failed to comply with the orders of 6 December 2007 in that he had failed to pay the plaintiff the sum of $750,000 required by order (1) and had failed to pay the costs agreed in the sum of $20,000 as required by order (2), and with knowledge of the orders had thereby breached the orders. The plaintiff invoked Supreme Court Rules, Pt 55 – that is, criminal contempt, shortly so called – and not enforcement proceedings for committal under Uniform Civil Procedure Rules, Pt 40, rr 6 and 7. 7 As expressed, the orders of 6 December 2007 do not require the defendant to do anything. They do not purport to be an order against the defendant obliging the defendant to do anything at all. In many types of proceedings, that would of itself be a serious defect which might present serious complications to enforcing the order, particularly by way of contempt. 8 However, such a form of order is not inconsistent with the effect that an order under Family Provision Act has, under s 14 which provides as follows: (1) An order made by the Court for provision out of the estate of a deceased person (whether or not an order made in favour of an eligible person) shall, except in so far as the Court otherwise directs, take effect as if the provision had been made: (a) where the deceased person died leaving a will – in a codicil to the will, or (b) where the deceased person died intestate – in a will of the deceased person. (2) The Court shall not direct that an order for provision out of the estate of a deceased person shall take effect otherwise than in the manner referred to in subsection (1) unless it is satisfied that compliance with the order will not adversely affect any creditor of the deceased person. 9 This provision was considered by Young J (as his Honour the Chief Judge then was) in Wentworth v Wentworth (NSWSC, 4 September 1991, unreported). His Honour said: Section 14 of the Family Provision Act provides that an order under the Act is to take effect as if the order had been a codicil to the Will. The consequence is that for most purposes the way of enforcing an order under the Act is the same as if one had to enforce payment of a bequest under a Will, or a residuary gift. The way to do that is by commencing an administration suit, or in clear cases taking advantage of the summary procedure provided by the Wills Probate and Administration Act . 10 His Honour referred to some other cases in which a declining market had resulted in an estate becoming insufficient to meet the amount of the order as well as the legacies under the Will, with which the successful plaintiff ranked equally, those cases suggesting that in such a case, the order made by the Court and the legacies abated equally. His Honour observed that typically in such cases the executor went back to the Court to see if the order could be varied, and concluded: This indicates the way in which the Court has approached problems of enforcement under this Act. There is no judgment in the true sense of the word within the meaning of the Supreme Court Rules . All there is is an order in the nature of adding a codicil to the testator's Will. 11 In Wiblen v Feros (1998) 44 NSWLR 158, Windeyer J referred to the judgment of Russell LJ in In re Jennery [1967] 1 Ch 280 in relation to the proper method of enforcement of an order under (UK) Inheritance (Family Provision) Act 1938, in which his Lordship had said (at 268) that the rights of a successful applicant, when established by an order, had no greater effect than that of making that person the equivalent of a beneficiary under the Will: I can find no resemblance, except the most superficial one, between an order made in this form under this Act and any order for payment which can be made the subject of an application for a four-day order. The proper step for a dependent to take is the ordinary step that a beneficiary in an estate has open to him if he or she is unable to get satisfaction from the trustees or personal representatives. But that is not the step that has been taken here… 12 Windeyer J observed (at 173): In other words it was held that the order for provision was not a judgment or order for the payment of money, which could be enforced in the way such a judgment could be enforced, but was an order which could only be enforced by administration proceedings. That was the view taken by Young J in Wentworth v Wentworth (Young J, 4 September 1991, unreported) when he refused an application by the successful plaintiff in proceedings under the Family Provision Act to issue a writ of execution against the estate of the testator to enforce orders in her favour under that Act made by Bryson J. 13 More recently, in Gorman v Gorman; Estate late Jeanette Mary Gorman [2003] NSWSC 647, Young CJ in Eq, considering proceedings after judgment in a Family Provision Act matter, said (at [19]): The matter is dealt with in Wiblen v Feros (1998) 44 NSWLR 158, 173, where, following something I had said in Wentworth v Wentworth 4 September 1991, unreported, it was said that the way of dealing with the situation, where an order under the Family Provision Act is to be enforced, is to commence an administration suit, or, in clear cases, to take out a summons for payment of a legacy pursuant to s 84. 14 The cases which I have referred to make clear, if anything remained to be made clear in light of the terms of s 14, that an order made under the Family Provision Act for provision out of an estate is a unique form of order which in effect is not really a judgment or order of the Court at all. It has effect not as a court order, but as a codicil to the Will; and is to be enforced not as a court order but as a codicil, by the remedies which a beneficiary has against a defaulting executor. Such an order does not bind the executor, who is a defendant to the Family Provision Act proceedings, as an order for payment of money or to do an act or thing, but only in an indirect manner insofar as it imposes a new obligation in the trusts of the Will, to be enforced as such. 15 In my view, such an order binds the executor directly to do nothing. I readily accept that interference with the carrying into effect of a court's order, even indirectly, can in an appropriate case amount to a contempt of court. But that depends fundamentally on the nature of the order in question. I do not see how interference with an order, the effect of which is not a binding command of the Court, but one having the effect of altering a Will, could be such a contempt. Accordingly, I do not see how disobedience to or interference with the performance of such an order could be such a contempt. 16 For those reasons, I regard the present application as entirely misconceived. Even if there were ample funds in the estate with which to satisfy the order, it would still be misconceived. 17 I order that the motion be dismissed with costs. ********** 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.