Fung v Ye [2007] NSWCA 115 | Case summary

Tuesday 15 May 2007 KEITH YUK KEE FUNG v MICHAEL YE Judgment 1 TOBIAS JA: I agree with Young CJ in Eq. 2 YOUNG CJ in EQ: This is an appeal from a decision of Gzell J in proceedings brought by the respondent for an order for provision under the Family Provision Act 1982, s 7. 3 The order was sought out of the estate of the late Frances Lan Fong Fung who died on 21 June 2001. 4 The hearing of the proceedings was delayed because of contested proceedings in the Probate List. 5 The learned primary judge found that the respondent was not a de facto spouse of the deceased, but rather, that the relationship between the respondent and the deceased resembled that of nephew and aunt. However, his Honour determined that such a relationship meant in the proved circumstances that the respondent was an eligible person being a person with whom the deceased was living in a domestic relationship at the time of her death. 6 His Honour further found that the value of the estate was at least $1.5 million, he found that the respondent was a person who had been left without any provision at all. His Honour then applied the twofold test set out in Singer v Berghouse (1994) 181 CLR 201. 7 His Honour noted that during her life the deceased had made considerable provision for the respondent and that, bearing in mind the tests, the community would have expected that a just and wise person would have thought it her moral duty to make some further provision. There was no evidence of any competing needs of the siblings whom the deceased favoured. The respondent accordingly was entitled to provision. 8 The respondent had put that the proper provision that should be made was a sum to enable him to buy a house in the Chatswood area at $480,000 and to make provision for the payment of his debts of $100,000; a legacy of $600,000 was suggested. 9 Gzell J did not accede to this request. He accepted that money to obtain a house would be appropriate, but considered that buying a house in a less expensive area would discharge the duty. 10 His Honour rejected the proposition that the deceased should have provided funds to discharge the liability for costs (of it would seem approximately $70,000 for the other side's costs and perhaps an equivalent amount for his own costs) in the probate proceedings to which I have already referred. 11 His Honour then said (Judgment No 3, the judgment from which this appeal is brought): "44. There is much to be said for the submission that Mr Ye is a perennial student who has not sought to exercise his talents in an appropriate way. He is able-bodied and well qualified to earn his living. 45. Nor am I convinced that Mr Ye has a burning desire to practise medicine. If he did, he would, in my view, have applied for admission to medical school by this stage and, in particular, rather than undertaking a course in accountancy. 46. Under the second stage in Singer , I am of the view that the provision that ought to be made out of the estate in his favour is $425,000.00 plus the forgiveness of the debt of $22,000.00. This will enable him to purchase and furnish a two bedroom unit in the Campsie area and provide him with a modest buffer against the prospect that he does not immediately obtain gainful employment." 12 To explain para 45, the evidence was that the respondent had obtained a medical degree at Shanghai University but was unable to practise medicine in Australia. He gave evidence that a four year course at Sydney University would cost approximately $40,000 a year and that he presently had a HECS debt of $14,301. 13 Although there is no ground of appeal that his Honour's reasons were inadequate, in argument on the appeal it was pointed out that the effect of what his Honour did was not to provide the respondent with enough to purchase a house at Campsie outright without mortgage if the cost was as accepted by his Honour, $386,690 to $396,050. By the time that the respondent paid his debts, including the difference between his own costs and the costs he recovered on assessment, he probably would receive about $250,000 clear, plus the forgiveness of his debt to the deceased. There was no evidence before the learned judge as to whether it was possible for the respondent (as a non wage earner) to obtain finance to buy a home, but it is clear that, on the evidence, if he were to acquire a home, he would need to borrow monies. 14 There was a criticism of his Honour's judgment that he did not seem to have addressed his mind to this particular matter. 15 There was also criticism of his Honour's judgment in an article by Professor Rosalind F Croucher entitled "Conflicting Narratives in Succession Law - A Review of Recent Cases" (2007) 14 APLJ 179. Some of the criticisms by the learned professor were not taken up before us, probably because the article was only published a day or so before the hearing. It is clear that the learned professor thought the award in this case was "generous". 16 Both parties accepted that the Court should treat the appeal as an appeal from a discretionary judgment. On this basis, it is very difficult for an appellant to succeed because the burden is to show that the primary judge was plainly wrong and that his purported exercise of discretion was not an exercise of discretion that any judicial officer could possibly reach. Accordingly, it is of little moment if any member of this Court considers that the provision made by the primary judge was generous unless the Court is convinced that the award was so generous that no reasonable judicial officer would have made it. 17 It is not uncommon for appellate courts to consider the range of awards that are commonly made in similar cases. That approach is legitimate in proceedings under the Family Provision Act, and experienced judges do get a feel for the range. However, it must be remembered that, as Kirby P remarked in Golosky v Golosky (Court of Appeal, 5 October 1993, unreported), because the inescapable detail of the facts in each case will always be different, it is much harder to be definite about a "range" than is the case in personal injury litigation. 18 As Gzell J said, the current philosophy from the High Court as manifested in Vigolo v Bostin (2005) 221 CLR 191, is that it is quite appropriate to test the provision that the deceased made, or that the Court is being asked to make, by asking what is the moral duty that would have motivated a just and wise testator to make provision for the applicant had he or she been fully aware of all the relevant circumstances (see In re Allen [1922] NZLR 218, 220). The test that applied before moral duty was reinstated by Vigolo was to ask: what would the community expect a wise and just testator to have done. Essentially, this test differed very little from the traditional test now reinstated. 19 Professor Croucher's article reasons that one must look at the moral duty in terms of a parent's moral responsibility. She says that there is a strong view that whilst children might expect something from their parents' estate, they are only entitled to expect maintenance and education to the extent that it makes them independent and self reliant and no more. Accordingly, once the child becomes a self reliant adult, there is no moral duty to the child any more. 20 The consequence of this sort of reasoning would be that, except in the case of an adult child who has become self reliant but then has succumbed to disease or other tragedy, all applications by self reliant adult children under the Family Provision Act should be dismissed. 21 Mr L Ellison SC who appeared for the appellant, did not argue for such a view. Doubtless he felt constrained by the large number of cases where adult children have succeeded in claims under this Act, including some who were successful in the Court of Appeal. 22 Indeed, it does not seem to me that one can equate a moral duty to make provision in one's estate with a moral responsibility to look after an adult child who has become self reliant. As soon as the parent dies, a whole new scenario presents itself. When the parent was alive, he or she was entitled, and no-one would think any the worse of him or her if they did it, to enjoy their own monies and indeed, many do by caravanning throughout Australia in their retirement or taking overseas trips and cruises. However, once the parent has no further requirements because of death, when one is working out what the community would consider to be the moral duty of the deceased one excludes the factors that were real during the parent's life. 23 However, having said that, I must confess that the decisions of courts have moved well away from the basic principles of 1916 when the first legislation of this type was introduced into NSW. The original Act emphasized provision for widows and minor children. Today, the courts have very few applications from such persons but are flooded with claims by adult children or adult companions or associates of the deceased. Even though the present Act is entitled the "Family Provision Act", most applicants are only notionally part of the deceased's family, if that, in that they are now heads of their own households with their own spouse and children. Some, indeed, have not even made contact with the deceased for many years. 24 However, the way in which the present Act is framed inevitably has led to this present result. The great widening of potential applicants in para (d) of the definition of "eligible person" in s 6 in particular, has meant that a testator not only has to think of his or her moral responsibility in the traditional sense, but also has to consider all the "hangers on" who might be thought by the community to deserve benefaction. Although I use the word "deserve" rather than "expect" one wonders when one reads some of the cases whether that distinction is appropriate. 25 Returning to the present case, I must say that Gzell J's statement at [31] that "… there is no rule to the effect that proper provision for an adult and presently able-bodied child does not extend to providing him or her with a house or money to buy one" may give rise to unreasonable expectations by future claimants. The statement is correct as far as it goes, but the statement would also be correct that in very many cases it will not be appropriate to provide a house, or money to buy one, to an able-bodied adult child. In each case one needs to consider the basic human right of freedom of testation of the deceased, the relationship between the plaintiff and the deceased, the size of the estate and the other claimants. I would venture to say that probably in the majority of cases the evaluation of that equation will not result in an able-bodied child being "entitled" to a house or money to buy one. 26 On the appeal before us, Mr L Ellison SC appeared for the appellant and Mr M Broun QC and Mr A Gidaro appeared for the respondent. 27 Mr Ellison submitted that the primary judge was in error in finding that the respondent was a person with whom the deceased person was living in a domestic relationship at the time of the deceased person's death and so was an eligible person within (a)(ii). Mr Ellison conceded that the respondent must have come within category (d) of the definition of "eligible person" and that, apart from then having to surmount the barrier in s 9 of the Act (which he would have clearly surmounted on the facts of this case), once a person is an eligible person under any of the clauses of the definition, he or she is entitled to the same consideration as to whether an order should be made. 28 Mr Ellison does not contest the judge's finding on the facts that there was a domestic relationship between the deceased and the respondent, rather, he says it had ceased before the moment of the deceased's death. 29 The facts as found were that the deceased died on 21 June 2001. During the last year of her life the deceased's health deteriorated rapidly and she was hospitalised in December 2000. Subsequently, she was transferred to the Balmain Hospital for rehabilitation. She was discharged at the end of January 2001. However, two or three weeks before her death she was admitted to Concord Hospital. Whilst she was in Concord Hospital the respondent visited her and took instructions to perform some business tasks on her behalf. 30 Whilst it is true fact that a non-marriage relationship is a relationship which depends on the facts rather than on a matter of legal status, and if the state of facts ceases the relationship ceases, the cases show that one needs to be practical about the question of whether a relationship has ceased. Cases like Hibberson v George (1989) 12 Fam LR 725 (NSWCA) show that mere temporary absence does not necessarily mean that a relationship based on fact has come to an end. One must look at all the facts and circumstances and where one sees that when one party is in hospital, the other party is attendant on them and is voluntarily doing chores or taking commissions, then one can readily conclude that the relationship is continuing. It is a common experience for people whose friends and relations are in hospital to volunteer to handle the patient's laundry needs etc and where this happens in the case of a person in a domestic relationship, that is fairly good evidence that the relationship is continuing even though the parties may fear that the patient has a terminal illness. 31 Accordingly, I cannot see any error in Gzell J classifying the respondent as coming within (a)(ii) of the definition. As I have said, it did not really matter in any event as it was admitted that the respondent fell within category (d)(ii) in any event. 32 The only other criticism of the judgment is that the respondent was awarded too much. Mr Ellison says that the Act is designed to provide a plaintiff with that which the testator should have left him or her and no more. He puts that in the instant case clearly the judge awarded the plaintiff in excess of what a wise and just testator would have provided. 33 Mr Ellison's basic point is correct. However, the assessment that must be made by the trial judge is one that needs to be made in the light of whether or not there are competing claims and in the light of the size of the estate. When one bears those factors in mind in this case, what the trial judge awarded the plaintiff cannot be said to be so generous as to be the subject of interference by an appellate court. 34 Accordingly, in my view the appeal must be dismissed with costs. 35 BELL J: I agree with Young CJ in Eq.

Fung v Ye

At a glance

Court

Decision date

Before

Source

Judgment (14 paragraphs)

Parties

Cases Cited (4)

Cited By (10)