Collins v Mutton

The Present Proceedings 13The thrust of the Plaintiff's current claim for relief is that there was an error made in the calculation of the nature and value of the estate, in particular the residuary estate. Ordering the burden of the provision made for the Plaintiff to be borne by the residuary estate, after the payment of costs, will mean that the whole of the amount of provision could not be met, since there are insufficient funds in the residuary estate to pay the costs of the proceedings and the lump sum order made in favour of the Plaintiff. 14The Plaintiff submits that the practical and proper variation of the order made is that to the extent that the residuary estate is insufficient, the burden of the shortfall should fall on the share of the estate passing to Richard (who inherited the Long Jetty property). 15Thus, the Plaintiff seeks to maintain the order for provision and the order for costs in her favour. Ultimately, she is not concerned about the source of the payment to her to satisfy both orders. She opposes the reduction of either the family provision order or the order for her costs to be paid out of the estate. 16The Defendant agreed with the Plaintiff's submission, namely that Richard should bear the shortfall of the provision made for the Plaintiff and costs. In the alternative, he submitted that I should reduce the lump sum provision made for the Plaintiff. 17At the conclusion of the hearing of the notice of motion, in order to avoid an injustice to the Plaintiff caused by further delay, because the parties agreed that even if the Court reduced the amount of the lump sum to be paid to her, she was not likely to receive a lump sum less than $55,000, and as that amount was immediately available to be paid out of the available cash held ($108,325) after deduction of the parties' estimated costs ($51,957), I ordered that she should be paid that amount by way of partial settlement of an order for provision. (I was only informed by a subsequent affidavit of the precise amount held which was slightly more than the amount held at the substantive hearing.) 18The Defendant's subsequent affidavit also confirmed that the amount of $55,400 had been paid out of the estate, of which amount $55,000 was paid to the Plaintiff out of the available cash held in the trust account of the Defendant's solicitors on 17 July 2012. 19There was no challenge to the assertion that, as at the date of the Defendant's letter set out above, there was $109,989 held by the Defendant's solicitors in their trust account. I conclude that after the payment of $55,400, there should have been about $54,589 remaining. 20It follows, if there is no alteration to the lump sum family provision order made for the Plaintiff, and if all of the estimated costs of the parties are paid (other than the costs of the notice of motion), there would be $2,632 remaining in the trust account of the Defendant's solicitors that could also be paid to the Plaintiff. If that were done, the amount of the shortfall (taking into account the parties' costs) will be $77,368 ($135,000 less $57,632). 21If I accede to the Plaintiff's application, and do not reduce the lump sum ordered to be paid to her out of the estate of the deceased, it will be about that amount that will be required to be paid out of the proceeds of sale of the Long Jetty property.

The Legislation 22UCPR rule 36.11 relevantly provides: "(1) Any judgment or order of the court is to be entered. (2) Unless the court orders otherwise, a judgment or order is taken to be entered when it is recorded in the court's computerised court record system." 23It was said in Habib v Nationwide News Pty Ltd (No 2) [2010] NSWCA 291, at [29], that: "The formal recording of the orders of a superior court of record is often referred to as the "perfecting" of that order. It marks the point at which the court's power to reconsider the matter is at an end and provides conclusive certainty about what was the end result in that court: Burrell (at [18], [20]). If there is any power to reopen an appeal and reconsider the orders made, that power must be found in "the text of the governing statutes and any express or implied powers to be seen therein": DJL v The Central Authority [2000] HCA 17; (2000) 201 CLR 226 (at [43]); Burrell (at [22]). As we have said, that point was reached in this case on 16 March 2010 when the Court's orders were entered." 24UCPR rule 36.15 provides: "(1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith. (2) A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent." 25The Plaintiff does not submit that the judgment was given "irregularly, illegally, or against good faith". Rather, the Plaintiff relies upon UCPR rule 36.16(1), which provides: "(1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order." 26Alternatively, the Plaintiff relies upon UCPR rule 36.16(3A), which is in the following terms: "(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered." 27There was no dispute that the notice of motion was filed within 14 days. 28In Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd (No.2); Carelli v FS Architects Pty Ltd (No.2) [2008] NSWCA 205, Campbell JA, in referring to UCPR, rule 36.16, explained that Court orders are entered by being recorded in the Court's computer system, without reference to the parties and that entry takes place promptly after the judgment is delivered and the orders orally pronounced. It occurs pursuant to UCPR rule 36.11. 29His Honour also stated, at [8]: "8 To the extent that that 14-day window exists, an exception has been created to the principle that ordinarily a court has no power to set aside a final judgment after it has been entered; DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226 at [38]; Metwally v University of Wollongong (No 2) (1985) 59 ALJR 481; Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529; Gamser v Nominal Defendant [1977] HCA 7; (1977) 136 CLR 145; Re Suffield (1888) 20 QBD 693; Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146. As UCPR 36.16(3A) and (3B) expressly state, any setting aside of a judgment or order under that power is to be carried out as if the judgment or order had not been entered". 30In Grace v Thomas Street Café Pty Ltd (No 2) [2008] NSWCA 72, the Court (comprising Spigelman CJ, Beazley JA and McClellan CJ at CL), at [8], stated, in relation to UCPR rule 36.16: "The respondents recognised that the discretion conferred by Pt 36.16 is to be exercised sparingly, having regard to the public interest in the finality of litigation: see Venus Adult Shops Pty Limited v Fraserside Holdings Ltd (No 2) [2007] FCAFC 41. In De L v Director-General, Department of Community Services (NSW) (No 2) [1997] HCA 14; (1997) 190 CLR 207 at 215, the High Court, in the joint judgment of Toohey, Gaudron, McHugh, Gummow and Kirby JJ, explained the competing considerations involved in a court's determination whether to reopen its judgment or orders as follows: 'The power of this Court to reopen its judgments or orders is not in doubt. The Court may do so if it is convinced that, in its earlier consideration of the point, it has proceeded 'on a misapprehension as to the facts or the law', where 'there is some matter calling for review' or where 'the interests of justice so require'. It has been said repeatedly that a heavy burden is cast upon the applicant for reopening to show that such an exceptional course is required 'without fault on his part', ie without the attribution of neglect or default to the party seeking reopening'. By such expressions of the power to reopen final orders, courts seek to recognise competing objectives of the law. On the one hand, there is the principle of finality of litigation which reinforces the respect that should be shown to orders, final on their face, addressed to the world at large and upon which conduct may be ordered reliant upon their binding authority. On the other hand, courts recognise that accidents and oversights can sometimes occur which, unrepaired, will occasion an injustice. In the case of a final court of appeal, such as this Court, that injustice may be irremediable, unless the Court itself, acting promptly, is persuaded to reopen its orders so as to afford relief in the exceptional circumstances of the case.' (Citations omitted)" 31In Diver v Neal [2009] NSWCA 115, the Court of Appeal said: "5 While the Court has power to vary orders, the exercise of that discretion should take into account the public interest in preserving the finality of concluded litigation: see State Rail Authority of New South Wales v Codelfa Construction Pty Ltd [1982] HCA 51; 150 CLR 29 at 38 (Mason and Wilson JJ). After noting that jurisdiction existed in the Court to entertain the application in that case, their Honours continued: "Nevertheless, it is a power to be exercised with great caution. There may be little difficulty in a case where the orders have not been perfected and some mistake or misprision is disclosed. But in other cases it will be a case of weighing what would otherwise be irremediable injustice against the public interest in maintaining the finality of litigation. The circumstances that will justify a rehearing must be quite exceptional." 6 To similar effect in Wentworth v Woollahra Municipal Council [1982] HCA 41; 149 CLR 672 at 684 the Court stated: "[T]he circumstances in which this Court will reopen a judgment which it has pronounced are extremely rare. The public interest in maintaining the finality of litigation necessarily means that the power to reopen to enable a rehearing must be exercised with great caution. Generally speaking, it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard." 7 In Autodesk Inc v Dyason (No 2) [1993] HCA 6; 176 CLR 300, Mason CJ (in dissent as to the outcome) referred to the last passage set out above from Wentworth, and continued at 302: "But these statements do not exclude the exercise of jurisdiction to reopen a judgment which has apparently miscarried for other reasons, at least when the orders pronounced have not been perfected by the taking out of formal orders. So much was acknowledged by Brennan, Dawson, Toohey and Gaudron JJ in Smith v New South Wales Bar Association (No.2) [[1992] HCA 36; 176 CLR 256 at 264-266] when their Honours said: 'if reasons for judgment have been given, the power is only exercised if there is some matter calling for review'." 8 His Honour then referred to three examples, including the decision of this Court in NSW Bar Association v Smith [1991] NSWCA 215 in which orders previously made were reconsidered in circumstances where it was contended that the judgment had proceeded upon a mistaken assumption that particular evidence had been given at earlier hearings, when it had not. Mason CJ then stated in Autodesk that "the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that, in its earlier judgment, it has proceeded on a misapprehension as to the facts or the law". His Honour continued at 303: "However, it must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing." 9 Although there may be scope for an intermediate court of appeal to give different weight to particular factors, statements of principle in the High Court are clearly relevant: Wentworth v Rogers (No 9) (1987) 8 NSWLR 388 at 394 (Kirby P, Hope and Samuels JJA). In the context of r 36.16 (3A), it is preferable to express the matter as one of enlivening the exercise of the power, rather than jurisdiction." 32In De L v Director-General, Department of Community Services (NSW) (No 2) [1997] HCA 14; (1997) 190 CLR 207, the majority said, (at 223), that an applicant for re-opening of orders should show that he, or she, was without fault, adding: "It is one thing to permit reopening of the orders to allow consideration of a matter accidentally overlooked so that it may be taken into account. It is another to provide relief where the party seeking it has, by its own confession, not done all that might have been done to raise the point when it was timely and appropriate to do so." 33It can be seen from the authorities, that the central question to be determined in a case such as the present, distils to whether it is unjust to let the judgement or order stand. As Jordan CJ (Davidson and Roper JJ concurring) in Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR (NSW) 239 at 243-4 said: "The question is whether, upon the material that has been placed before us, there is a real likelihood that it would be unjust to the defendant to allow the judgment to stand. If so, it should be set aside on such terms as it will minimise the possibility of injustice to the plaintiff. If not, we should not interfere." 34In further support of this view, I should also refer to the decision of Barrett J (as his Honour then was) in Wentworth v Rogers [2002] NSWSC 921 at [9]: "It seems to me that the relevant principles, as they apply in a case such as the present, can be summarised in one basic proposition, namely, that a single judge whose decision is susceptible to appeal through readily available channels (with or without any preliminary need for leave to appeal) should allow re-opening after judgment where it is obvious to that judge that the decision has miscarried and that the miscarriage may be rectified and the situation retrieved by attention to the matter by that judge rather than by an appeal court. What is highly undesirable is that the first instance judge should be cast in the role of hearing what amounts to an appeal against his or her own decision." 35Lastly, a similar view was expressed by Young JA in McCarthy v McCarthy [2010] NSWCA 103: "25 I should say at this stage that the court would expect that when a judgment is produced, probably because of the stresses of a busy list, which contains obvious errors, it is the duty of the lawyers involved to go back to the judge within the time for appealing and point out the problems and get them rectified rather than having them used on appeal because it is far cheaper, and so in the interest of the parties, to have such errors corrected at first instance." 36I must not forget that the exercise of discretion is exceptional because it impinges upon the principle of finality of litigation: Wentworth v Woollahra Municipal Council (No 2) [1982] HCA 41; (1982) 149 CLR 672 at 684, De L at 215, Diver v Neal; and Habib v Nationwide News Pty Ltd (No 2) at [27]-[32] per Basten JA).

Submissions 37The Plaintiff and the Defendant appear to agree that the "proper and practical variation of the orders made by the Court is that [Richard's] legacy should bear the burden to make up the shortfall in funds for the costs and whatever the Court decides should be the legacy for the Plaintiff". 38However, because there has been no real contradictor to their agreed position, I must carefully consider whether the submission should be accepted. Importantly, the Act provides that I may not disregard the interest of a beneficiary of the deceased's estate: s 61(1).

Determination 39The Plaintiff acted promptly in filing the Notice of Motion following judgment being handed down. 40The question that then arises is whether the discretion should be exercised to make a different family provision order (the quantum of provision) for the Plaintiff and how the burden of the provision should be borne. 41At [21] of my reasons for judgment, I had noted: "[21 ]The parties accept, for the purposes of the hearing, that I should determine the matter upon the basis that the actual net distributable estate, after the payment of costs and expenses of sale of the Long Jetty property and the legal costs of the proceedings, will be about $363,091. This amount has been reached by deducting from the value of the gross actual estate ($423,648), the Plaintiff's estimated costs and disbursements, calculated on the ordinary basis for a one day hearing ($32,757), the balance of the Defendant's costs and disbursements, calculated on the indemnity basis ($19,200), and the costs and expenses of sale of the Long Jetty property ($8,600)." 42What I had noted followed a lengthy discussion with counsel at the commencement of the hearing, raised again during the hearing, and then, finally during submissions. In fact, the submissions of the parties proceeded upon that basis, as I noted in the reasons: "192 Alternatively, the Plaintiff submitted that she should receive, in lieu of her entitlement under the deceased's Will, a lump sum of $150,000. She could use this amount to purchase a mobile home (about $135,000) and would have a small capital sum remaining to provide for exigencies of life. 193 Counsel for the Defendant submitted that the amount of $150,000 "was not unreasonable" in the circumstances. He accepted that in providing a lump sum for the Plaintiff, the Defendant's share of residue would also have to be diminished. Even though he has set out his financial resources (including earning capacity) and financial needs, both present and future, there is no dispute that he received an asset of substantial value from the deceased during his lifetime." 43Counsel for the Plaintiff confirmed, at the hearing of the notice of motion, that the lump sum sought by him at the substantive hearing was based on what he, also, had mistakenly understood the value of the residuary estate to be. 44In fact, the estate, at the date of hearing, consisted of the Long Jetty property ($220,000) and cash in bank ($108,325). The cash in bank was $26,675 less than the lump sum of $135,000 to be paid out of the estate to the Plaintiff. However, when one takes into account the other costs and expenses to be paid, being the Plaintiff's estimated costs and disbursements, calculated on the ordinary basis for a one day hearing ($32,757) and the balance of the Defendant's costs and disbursements, calculated on the indemnity basis ($19,200), the difference is much more substantial. If one deducts the agreed estimated costs of sale of the Long Jetty property ($8,600), the difference is even greater. 45The value of the estate was significantly less than what I noted, apparently inaccurately, as agreed. This demonstrates a misapprehension of the facts by the parties and by the Court. 46In claims for a family provision order, particularly in a small estate, there being no dispute that the estate, in this case, was small, the value of the estate plays a pivotal part in the determination of the applicant's claim for provision and the orders that are made. 47As the judgment states, I gave consideration to the size of the deceased's estate, the financial position of the Plaintiff, and the competing moral claims of the beneficiaries. I also took into account the fact that there was no evidence from Richard as to his financial position. 48From what I have said above, it follows that the orders I made, as to the provision to be made for the Plaintiff, and how the burden of the provision was to be borne, as a matter of justice, must be reconsidered. The misapprehension as to the size of the estate, particularly the residuary estate, which was less than I apprehended it to be, provides the sound basis for a reconsideration of the provision made for the Plaintiff. 49I am satisfied, bearing in mind the size of the estate, that the provision I made for the Plaintiff in the reasons for judgment is greater than ought to have been made and that the provision for the Plaintiff should be reduced. 50It is not necessary for me to reconsider the question of the Plaintiff's eligibility. Also, I remain satisfied, since there is no dispute about it, that under the terms of the deceased's Will, the Plaintiff who is to receive one-fifth of the residuary estate, estimated to be about $108,000 (without deduction of any other costs) would receive about $21,600. Of course, after deduction of costs, the residuary estate, and her share of it, will be considerably reduced, which means that adequate provision was not made for the Plaintiff. 51I turn then to reconsider the nature and amount of the provision that ought to be made for the Plaintiff and how the burden of that provision should be borne. 52In coming to the question of the quantum of provision, I bear in mind all of the matters to which I referred in my reasons for judgment without repeating them, but remembering, of course, what is the current correct value of the estate. 53Even though I still do not know anything about Richard's financial resources (including earning capacity) and financial needs, both present and future, there is no dispute that the Long Jetty property has been his home since about 1999. Making provision in excess of what remains in the residuary estate, after payment of costs, will be to dispossess him from the home in which he has lived for over a decade and the home specifically devised to him by the deceased. 54However, his continued failure to provide such information about his financial resources leads me to conclude that this should occur unless he is able to provide an alternative manner of enabling the Defendant to satisfy the family provision order made for the Plaintiff. 55The determination of what provision should now be made cannot be done by exact calculation, or computation, and must, at least in part, depend, as it did previously, upon an estimate of the needs of the applicant and the ability of the estate to satisfy such needs by way of adequate and proper provision. I consider that I should reduce the lump sum provision made for the Plaintiff in lieu of the provision made in the Will of the deceased from $135,000 to $110,000. The balance payable to her is, therefore, $55,000. 56The Plaintiff's estimated costs ($32,757) at the hearing should be paid out of the amount currently held in the trust account. On my calculations, that should leave about $21,832 in that account ($109,989, less $55,400 recently paid out of the estate, less the Plaintiff's estimated costs). The Plaintiff's costs should be capped at the amount estimated. The balance in the solicitor's trust account, after the Plaintiff's costs have been paid, should also be paid to the Plaintiff to reduce the balance of the lump sum being payable to her. 57Assuming the calculations are accurate, the balance that should then remain payable to her will be about $33,168. This amount (or the precise amount as finally determined) should be paid from the proceeds of sale of the Long Jetty property, or from any payment made by Richard to the Defendant in order to avoid the sale of the Long Jetty property. 58The balance of the Defendant's costs, as estimated at the hearing, calculated on the indemnity basis, should be paid out of the estate. However, those costs should be capped at the balance of the amount estimated ($19,200). He should recover these costs from the proceeds of sale of the Long Jetty property, or from any payment made to him by Richard. 59In this regard, the estate is very small and the Court has power to cap costs: see Practice Note SC Eq. 7, Clause 24. 60I shall allow Richard 28 days from the date of these reasons to pay the amount necessary, or otherwise satisfy the parties, or the Court, that the necessary amounts will be paid within a reasonable time, failing which an order for possession of the Long Jetty property and consequential orders will have to be made pursuant to s 66 of the Act. 61The order for interest previously made should also be varied. No interest is to be paid on the balance of the lump sum to the Plaintiff if it is paid within the time allowed to Richard to pay the amount, or such other later time as the parties agree, or the Court orders; otherwise, interest calculated at the rate prescribed by s 84A(3) Probate and Administration Act 1898, on unpaid legacies, is to be paid from that date until the date of payment to the Plaintiff. 62I vary the costs orders previously made as set out above. 63I order that the Plaintiff should receive her costs of the notice of motion. I cap those costs at $2,000. It will be necessary to take this amount into account in determining the amount that is to be paid out of the proceeds of sale of the Long Jetty property or by Richard. 64I consider that the Defendant, or his legal representatives, caused, or at least contributed to, the misapprehension of facts that has led to the notice of motion. The Defendant is not to receive his costs and disbursements of the notice of motion out of the estate. 65I have considered the submission made on behalf of the Defendant that such an order would "have a significant adverse effect upon him". I do not agree. He received the property at Bateau Bay during the lifetime of the deceased. In addition, he paid to his wife an amount of $24,700 shortly after the death of the deceased because of an instruction by the deceased that he should do so, given before the money was withdrawn. 66I direct the Defendant's solicitors to send, by registered post, a copy of these reasons to Richard, no later than 2 working days from delivery of these reasons for judgment. 67I direct the parties to bring in short minutes to reflect these reasons at a convenient date to them and to the Court. That will, hopefully, allow the Defendant to speak with Richard and determine what other steps, if any, need to be taken to conclude this matter. It will also allow more precise calculations to be done. 68I stand the matter over to a date convenient to the parties and the Court to enable the steps to ensure the finalisation of this matter to be completed.

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: 27 September 2012