re Bodman [1972] Qd 12
Click here to enter text.Oakes v Oakes [2014] NSWSC 1312
Singer v Berghouse [1994] HCA 40
Source
Original judgment source is linked above.
Catchwords
re Bodman [1972] Qd 12
Click here to enter text.Oakes v Oakes [2014] NSWSC 1312
Singer v Berghouse [1994] HCA 40
Judgment (2 paragraphs)
[1]
Judgment - EX TEMPORE
This is a claim by the plaintiff arising out of the death of his former father-in-law. The deceased was Eric Arthur Croucher. He died in 2013 and left a will dated 19 October 2011. By that will he appointed his two sons, Michael and Cameron, as his executors. He gave his residence at Cambridge Gardens to his surviving daughter Lynda and he left the residue of his estate, which was modest, to Michael as to a one-third share, Cameron as to a one‑third share and two children of his deceased daughter Gillian as to a one‑sixth share each. The distributable value of the estate was said to be $488,283. The plaintiff was married to Lynda from 1988 until 2011. He left her in 2008 and she did not see him again until her father's funeral in 2013.
The circumstances of the family which have given rise to the plaintiff's claims were difficult in the extreme. After the deceased's daughter Gillian died and her husband also died, two children were left - Dylan and Sarah. Lynda herself had three young boys from a previous relationship. The deceased endeavoured to care for his son Cameron who lived with him at the time and Dylan and Sarah. The plaintiff and Lynda were responsible for the care of their family being Lynda's three sons.
The deceased was a man of modest means but wished to do the best thing for his family in the tragic circumstances in which they found themselves. He looked for a house big enough to hold nine people: Lynda, the plaintiff and the three boys plus Cameron, himself, Dylan and Sarah. He thought that if he could find a suitable place at a suitable price it might just solve a lot of problems for the extended family. In November 1986 he found such a place at Cambridge Gardens. This was a new step forward in his life and the life of the family. As he said in his own notes recorded before he died, 'No more renting; this time a good deposit and regular monthly payments on a mortgage and I had a home hopefully, for the rest of my life.' I should add that another aspect of the tragic family circumstances was that the deceased's wife Judy had died in a car accident in 1977.
In the contemporaneous note which the deceased kept, he referred several times to his decision to buy a house. He did not refer at any time to the notion that he was buying the house jointly with the plaintiff or jointly with the plaintiff and Lynda or that they had any proprietorial interest in the property at all.
I accept Lynda's evidence that in the almost 22 years during which the plaintiff lived in the property with her and the deceased, there was never any statement made by the plaintiff that he was or would be entitled to an interest in the house. The central platform of the plaintiff's claim is a factual contention. He says that he had an agreement with the deceased that if he and the deceased both paid the mortgage off, then the deceased would make a will, leaving to Lynda and the plaintiff the property in his death.
He said this agreement was oral and that 'all the family knew about it'. The purchase price of the house was $95,000 The deposit was $20,000. The New South Wales Permanent Building Society lent $70,000 to the deceased. He was recorded on the title as the sole registered proprietor. There is no doubt that the plaintiff and Lynda paid money to the deceased while they lived in the house. So did Cameron while he lived in the house. I reject entirely the implausible contention by the plaintiff that the payments he made should be characterised as payments in reduction of the mortgage.
They may or may not have been used for that purpose by the deceased; that was his choice. The mortgage, in fact, was only in place for about four years from January 1987 until 1991 when the deceased came into an inheritance which enabled him to discharge the mortgage. The plaintiff and Lynda paid a weekly amount of approximately $125. They continued to do so, at least until 1998. The total amount paid over that period, mainly from 1987 to 1998, was at least approximately $70,000. As I said, the mortgage loan amount was only $70,000. But the conclusion that I have reached, having heard the evidence of Cameron and Lynda, is that there is really no doubt that the deceased required those adults living in his house to pay board. That was the way in which the payments to him were characterised, as they all well understood.
The very fact that the plaintiff seeks to build his case on this implausible and discreditable proposition reflects poorly on him and his general credibility in relation to the balance of his evidence. I formed an adverse view of him and did not find his evidence to be reliable. I should return to the family circumstances. They were extremely cramped. Downstairs, there were two bedrooms. In one bedroom, Lynda and the plaintiff slept. In the other bedroom, Sarah slept. There was a separate bathroom and toilet downstairs and a single garage.
Upstairs, there were three bedrooms and one bathroom. The deceased was in one bedroom, Cameron, his youngest son, was in another bedroom. In the third bedroom, the four little boys slept together, namely Daniel, Adam and James who were Lynda's children, and Dylan, who was Gillian's son. It is entirely natural in those circumstances that the plaintiff would have been expected not only to pay board but to contribute to the household expenses and to the maintenance and improvement of the property in such a way that the amenity of everyone would be improved.
To his credit, the plaintiff spent some money on improvements to the property that were not insubstantial. He makes a point of saying that he erected garden sheds, made gardens, fertilised and kept lawns and did painting. All of these things are of no consequence and would be expected by any reasonable person in the circumstances. I do not think that his other contributions to improvements around the house are legally significant. I accept that there were some such improvements. He said, for example, that he spent some moneys on improvements to the kitchen, to the downstairs bathroom and to the upstairs bathroom, and also in the construction of a swimming pool.
The first thing to say about these matters is that they are all expenses which in such a household, in such difficult circumstances, someone in the plaintiff's position might well have contributed, if he could afford it. They do not reflect any legal entitlement but they do reflect to the plaintiff's credit a certain generosity of spirit. In any event, I do not accept his evidence as to the amounts he spent, and I do not accept at all the detail of what he explained occurred and by whom it was paid. There are some qualifications as to what he said.
For example, Lynda said that she received an insurance payment of about $70,000 from AMP Insurance following the death of her son, James, in 2003, another feature of the family's circumstances that I had not previously mentioned. He died of illness. She gave evidence which was not challenged, that some of the proceeds of that insurance payment may have been paid towards the kitchen, although she could not be completely sure.
The bathroom renovations which the plaintiff trumpeted were actually necessitated by the illness of James. I accept Lynda's evidence that the cost of them was substantially paid for by the Department of Disability and Services which provided the funds pursuant to a scheme to adapt the homes of people who are sick or disabled. Lynda said that the government grant was a substantial contribution to those renovations. She also said, and I accept, that she did not believe that the plaintiff made any contribution to the renovation of the upstairs bathroom as this was part of the property occupied by the deceased.
This seems reasonable and plausible and there is force on what she has to say. I doubt that the plaintiff was sufficiently generous to spend money on improvements to the deceased's bathroom. In any event, Lynda said that the costs of those renovations as best as she could recall was about $3,000. A pool was certainly constructed and the plaintiff's evidence of its cost was about $14,000. I do not regard that as a reliable figure. I do not think that any of the figures put forward the plaintiff could be treated with accuracy. He said himself that the amount was 'roughly $14,000', and that it represented part of a loan which he also used to buy a new car.
Nonetheless, he did pay for a pool to be built. I have no doubt that he did so in order to improve the amenity of the many children in the house and of himself and Lynda, and that he did so without any intention whatsoever that it would entitle him to a proprietary interest in the property on the death of the deceased. I will return to that issue in a moment. The final matter in this aspect of the case is some work carried out for resurfacing areas in the front and rear of the house with something called stencil crete.
Lynda contends that she paid for this alone, and that she used part of the money received from the AMP Insurance following the death of her son, James. This amount is about $7000. In any contest between Lynda and the plaintiff, I prefer the evidence of Lynda which I regard as more reliable. The conclusion that I have reached in relation to the expenditure of money by the plaintiff is that any work he performed and any expenditure that he incurred was not in reliance of any assurance of having any future interest in the property. Nor was it pursuant to any expectation on his part that he would have any future interest in the property.
He expected, naturally, that Lynda would eventually receive the property on the death of her father. He probably also expected that he would remain married to Lynda and that indirectly he would have the benefit of the improvements and expenditure that he had carried out and incurred. But he did not expect, and was never given any assurance to the effect, that he would receive an interest in the property himself.
As I have said, the plaintiff's contributions to gardening and general improvements were no more than what any reasonable and decent person would have done in the circumstances, nothing turns on them. For the reasons I have explained, no legal right or interest arises as a result of the expenditure of moneys, such as they were, on improvements to bathrooms, kitchens, driveways or in relation to the construction of the pool. There was never any clear unequivocal or cogent assurance to the plaintiff on which he was entitled to act reasonably in reliance. Nor was there any assumption which he made, let alone a reasonable assumption based upon any clear and unequivocal assurance.
Nor could it be said that the deceased knew or intended that the plaintiff would act in reliance upon any assurance. There simply was not any assurance. I reject unequivocally the evidence of the conversations or conversation which the plaintiff said he had with the deceased in late 1986 or 1987. And as I have said, there were no further statements supportive of the existence of any such agreement or any such assurance during the remaining 22 years during which the plaintiff lived in the property.
I should add that in July 2008, the plaintiff filed a debtor's petition and completed a statement of affairs in which he stated that he did not own property; did not own real estate; did not have any debts owed to him; did not have an interest in a deceased estate; and had not contributed or otherwise assisted in the purchase or improvement of any asset valued over $1000 held by someone else.
All of the statements made by the plaintiff in his statement of affairs were true. He knew that it was an important document and that he was required to give truthful and accurate information in it. His evidence in cross‑examination about the statement of affairs was unsatisfactory, contradictory, implausible and defensive. He sought to suggest that he had given certain information to a solicitor at the time or to his trustee, but none of that had the ring of truth about it.
In general, the plaintiff was not a witness who I felt comfortable in accepting on any issue. I did not think that I could reliably act on the basis of his assertions. I do not think that he was always truthful in the witness box. That may be because he had convinced himself over time, but I doubt it. On the other hand, I thought that the evidence from each of the defendants was of significantly higher quality. Each of them was a reliable witness and appears to be an impressive person. The substance of what they had to say was inconsistent in many material respects with the account which the plaintiff put forward. I felt confident in relying on the evidence of Lynda, Cameron and Michael.
What I have said is sufficient to dispose of the causes of action based upon an agreement or a constructive trust arising out of an estoppel. The plaintiff has also included a claim for a family provision order in his case. He seeks a family provision order in the amount of $70,000. His senior counsel made clear that this depended in part on the proposition that without the payments by the plaintiff, the deceased would not have been able to maintain the mortgage. I have said enough to make clear that the payments by the plaintiff and Lynda were payments for board and were unrelated to the mortgage.
It would be a rare case that a divorced former son-in-law of a deceased would be entitled to a family provision order. I dealt with similar issues in Oakes v Oakes [2014] NSWSC 1312 but that was a unique case involving markedly different facts. I accept for the purposes of argument that while he lived in the house at Cambridge Gardens, the plaintiff may have been in the same household and in a practical sense, dependent on the deceased for a roof over his head. The circumstances of his departure from that household, his subsequent divorce from Lynda and his own financial position do not persuade me that there is any factor warranting the making of a family provision order in his favour.
In the circumstances that occurred, it is entirely understandable that the deceased would leave his estate to his three children and the two children of his deceased daughter, Gillian. It was reasonable and understandable that he did not make any provision for the plaintiff. The plaintiff apparently announced in April 2008 that he had a girlfriend that he had been staying with on recent weekends, although he had informed Lynda that he had gone fishing. Within a week of that conversation, he left the property. He did not tell the deceased he was leaving. He never spoke to the deceased again. He did not see Lynda again until the deceased's funeral. On a number of occasions between his departure and the funeral, Lynda sought to speak to him but he did not reply to her messages. He did not contact Lynda's children or Gillian's children. As far as Lynda is aware, he has not spoken to any of those children since he left the property.
Divorces do happen and there may be circumstances when a wise and just testator might be regarded as having a moral obligation to his or her former son-in-law or former daughter-in-law. In most cases, I do not think that the community would expect that provision should be made for a divorced former son-in-law or daughter-in-law. It depends on the circumstances, of course. But in the ordinary run of cases, it would be expecting too much of a testator to make provision for such a person. In most cases, it would be unnatural; something which neither the testator nor the former son or daughter-in-law would have contemplated. In this case, the circumstances in which the plaintiff ceased to be the son-in-law of the deceased, and ceased to live in his house, reinforce the view that I have reached, that the deceased had no moral obligation towards the plaintiff at all.
I should add that the plaintiff's circumstances are relatively comfortable. He has a good job with Taubmans. He is obviously well-regarded there and has recently been promoted on a temporary basis to the position of manager. He has a new partner. He lives in her home. She owns that home which is valued at approximately $500,000. It has a mortgage or $240,000 on it. His partner pays the mortgage payments and he pays for other expenses such as utilities, rates, food and other needs. They have no children.
He owns two vehicles and his partner owns a vehicle. She has a good job in the customer service area and earns approximately $49,000 per year. He has superannuation with Australian Superannuation, the current balance of which is approximately $160,000 to $170,000. His partner also has superannuation which is, he says, somewhere between $90,000 and $100,000. He has no liabilities and his health is in his words 'very good'. He can expect to work for a considerable further time. He is now 58 and did not seem concerned about the prospect of working until past 70.
I should add, in relation to the plaintiff's financial affairs, that one aspect of the evidence which should not be overlooked is that during his time married to Lynda he had a number of credit facilities. Lynda's evidence, which I accept, was that she observed him completing credit application forms or at least one form in which he stated that he and Lynda were 'boarders or lodgers'.
He showed an interest towards the end of the marriage in ensuring that Lynda might receive the property. I accept that he pressed her to have the property put into her name. This was really not appropriate for a son-in-law. The deceased had always intended to leave the property to Lynda in any event but it is inconsistent with his contention that he was entitled to an interest or would receive an interest. He was concerned about ensuring that his wife received her due entitlement.
Finally, I should mention some equivocal evidence from Mr and Mrs Brown. Mrs Brown is the sister of the plaintiff. She gave evidence to the effect that the plaintiff told her certain things, including that 'I will be repaying our share of the mortgage directly to Eric'. She also said that after the plaintiff left the house Lynda said to her words to the effect 'I will do what is right and never hold back Ted's share of the house. I know how much work he put into it. It is rightfully his'.
I did not find Mrs Brown plausible and I do not find her evidence persuasive. She freely admitted that she would do anything to help her brother. It is clear to me that she has been persuaded by the plaintiff to assist her by giving evidence. I do not think that her accounts are reliable and I am not prepared to given them any weight, certainly any greater weight than the far more cogent and probative evidence of Lynda, Cameron and Michael.
Mrs Brown's husband also appeared in the witness box for about five minutes on the last day but once again his affidavit does not advance the plaintiff's case in any significant way. Both he and his wife recorded purported conversations with the plaintiff. Neither gave evidence of conversations with the deceased. The conversations with the plaintiff are not such that I am prepared to accept their reliability. Nor am I prepared to accept the two brief conversations with Lynda to which they both referred. It is improbable to me in the totality of the evidence that Lynda would have said the words which are attributed to her by Mr and Mrs Brown. Lynda, of course, denied those conversations and I prefer her account. For those reasons I dismiss the statement of claim.
The usual order in litigation in this Court is that costs follow the event, namely that the unsuccessful party pays the costs of the successful party. However, although I regard the family provision claim as having no merit, it is well accepted that family provision cases do stand apart from ordinary cases in which costs almost invariably follow the event. It is not uncommon in the case of unsuccessful applications in family provision claims for no order to be made as to costs: Singer v Berghouse [1994] HCA 40; 181 CLR 201 at [6] (per Gaudron J).
In some cases where the case was meritorious, reasonable or borderline the Court may even allow an unsuccessful plaintiff costs out of the estate: McDougall v Rogers (Estate of James Rogers); re Bodman [1972] Qd 12 281; Harkness v Harkness (No 2) [2012] NSWSC 35; Bowditch v NSW Trustee and Guardian [2012] NSWSC 702. Indeed, that is an order that is frequently made. There are fewer cases where an unsuccessful plaintiff is ordered to pay the defendant's costs. But there are cases, and this is one, where the appropriate order is that the plaintiff should pay his own costs. That is the costs order that I propose.
However, after I announced my reasons, including my reasons in relation to the costs order that I proposed, the defendants informed me that there had been an offer to settle the dispute within the meaning of the principle explained in Calderbank v Calderbank [1975] 3 All ER 333. That offer is contained in the letter dated 1 September 2014 from the defendants' solicitors to the plaintiff's solicitors. I will mark it exhibit 1 on the costs application.
The offer was apparently made after there had been a mediation. It stated that the defendants offered to settle the dispute by payment to the plaintiff of an amount of $22,000 inclusive of costs. The offer was open for acceptance for a period of 28 days. The plaintiff's solicitors did not respond. I infer that they rejected the offer. This is a difficult situation because the estate is modest and has been distributed in three material components: the first is represented by the home in which Lynda now lives and the second and third are represented by the two amounts of approximately $11,000 distributed to each of Lynda's brothers, Michael and Cameron. Those two sums taken together made up the offer by the defendants to the plaintiff. The sons Michael and Cameron were prepared to give up their entitlement under their father's will in order to preserve Lynda's entitlement and rid themselves of the plaintiff's claim. The defendants' costs are estimated to be approximately $50,000 to $60,000.
This is an unfortunate situation for the defendants. In the view that I have reached, it should never have occurred. That is because the plaintiff's claim had no merit and was based upon a factual premise that was far removed from the reality of what had occurred within the family. The plaintiff would have been far better off if he had accepted the offer. He has now received a result which is worse than he would have achieved if he had accepted the offer. The defendants have been put to considerable cost. Not only have they incurred the cost of these proceedings but they have incurred the anxiety and tribulation of spending two days in court and having had agitated in public many painful issues and contentions by the plaintiff which are impossible to accept.
I think it is an appropriate reflection of the reasons which I have already given that I should take account of the Calderbank offer and revise the costs order that I proposed. I do so with some regret because it will mean that there will have to be some continuing contact between the defendants and the plaintiff in relation to the recovery of costs but I do hope that that can be minimised. The order that I will make in the light of the failure to accept the Calderbank offer is that the plaintiff pay the defendants' costs on and after 1 September 2014 on the ordinary basis. I will not make an indemnity costs order and I will not make an order that the plaintiff pay the whole of the defendant's costs. This represents some compromise on my part and some concession to the plaintiff and his legal representatives.
I make the following orders:
1. I dismiss the statement of claim.
2. I order the plaintiff to pay the defendants' costs incurred on and after 1 September 2014 on the ordinary basis.
[2]
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Decision last updated: 17 March 2015