Estate of the late Iris Willena HAMPSON
2008/00281293 - Glen James HAMPSON v Gary Geoffrey HAMPSON
2009/00287749 - Lynne Michelle HAMPSON v Gary Geoffrey HAMPSON
JUDGMENT
1 HIS HONOUR: Iris Willena Hampson of Main Arm near Mullumbimby New South Wales died on 28 April 2007 and this Court granted probate of her Will to her eldest son Gary Geoffrey Hampson on 9 July 2007. She made her Will, which was witnessed by her two sisters, on 26 April 2007, two days before she died, and she is not known to have made any earlier Will. There was a body of evidence about the circumstances in which the testatrix made and signed her Will, but this does not call for examination as the grant of probate establishes the validity of the Will. After appointing her eldest son sole executor and directing payment of debts, funeral and testamentary expenses she gave, in one gift, the whole of her estate to her seven adult children. As a practical necessity the executor must convert the assets into money and divide it equally among the seven beneficiaries; there is no prospect of their holding any property together.
2 The late Mrs Hampson's principal assets are two parcels of land in Main Arm Road, Main Arm and a third parcel at She Oak Road, Goonengerry. Mr Valuer Mark Cochrane of Mullumbimby made a valuation (exhibit A) which was not contentious and states his opinion on values on 2 March 2010 shortly before the hearing. He valued Lot 2 at $600,000 ($420,000 for the land and $180,000 for improvements) Lot 12 at $500,000 (and the rental value at $300 per week) and the land at Goonengerry at $440,000.
3 Lot 2 is said to contain 15.65 hectares, and the house which the testatrix occupied as her home stands on Lot 2. It is said that Mrs Hampson's late husband bought the farm in 1964 and built the house in 1978. The house is a brick and tile dwelling. There is also a shed, which is occupied as a dwelling by the plaintiff Lynne Michelle Hampson and two of her children, and two demountable dwellings on the land; from evidence and photographs these structures are of very poor quality. There is no current rural activity on the land, of which the valuer said "This parcel lacks the quality of creek frontage, offers no privacy, is mostly steep and is affected by road noise". Robert Keith Hampson, one of the testatrix' sons, is now in occupation of the house and he gave evidence that he is willing to buy Lot 2 for $650,000. The executor proposes to sell Lot 2 to Robert, although no binding contract has been made. Robert said in evidence to the effect that he is able to finance the purchase and has bank approval for finance on the security of Lot 2 and a duplex dwelling at Brunswick Heads which he owns.
4 Lot 12 is situated nearby and is said to contain 4.009 hectares. It is the site of a much older house, which was the family home before the new construction in 1978. It has been occupied at most times since 1989 by Glen James Hampson, the other plaintiff, and he claims to be entitled to ownership of it.
5 The executor has been unable to take any steps towards the sale of Lot 2 and Lot 12 because of restraints imposed by injunctions by this Court (Ward J) on 7 April 2009 pending disposition of the proceedings.
6 The land at Goonengerry is about 20 to 25 kilometres from Mullumbimby. It is fenced but there are no other improvements. In the past there were 15 or 20 cattle there, and some banana trees and other crops at different times. The executor has listed the land at Goonengerry for sale, and has received an offer of $500,000, which he did not accept, as he hopes to obtain a higher price. It is vacant land, said to contain 28 hectares, and there is no dwelling.
7 While findings about valuation cannot be precise, I will act on the basis that Lot 2 is worth $650,000, Lot 12 is worth $500,000 and the Goonengerry land is worth $500,000; a total of $1,650,000. Some allowance should be made for costs of realisation. Other assets were disclosed in the probate inventory: $9,259.59 together with $19.71 interest in the National Australia Bank at Mullumbimby and general household items said to be valued at $4,000. In the context of the matters in dispute these are not significant. For reasons which appear later, I adopt $162,458.62 as my estimate of the costs payable out of the assets of the testatrix. Allowing for something for costs of realisation and for contingencies, a one-seventh share would be in the order of $200,000.
8 There are severely conflictual relationships among various members of the family, which have meant that reasonable co-operation in pursuit of shared interests has not been available. There are non-molestiri provisions in the injunction, and there are references in the evidence at various places to aggressive conduct, complaints to and involvement of police and applications for apprehended violence orders.
9 While the hearing was pending there was a mediation, which unfortunately did not produce any outcome, although the case is in a class where mediations are often successful. The costs of the litigation as shown by evidence are so remarkably high that I will embark on further investigation of them. Affidavit evidence of the defendant's solicitor estimates the defendant's costs of Glen's proceedings at $115,559.02 and of Lynne's proceedings at $73,908.75. Affidavit evidence of Lynne's solicitor estimates her costs at $88,549.87 and Glen's solicitor estimates his costs at $118,200. As the hearing took three days and not an estimated four days not all the estimated amounts may have been incurred. The total of the estimates is $396,317.62. Glen also incurred $14,077 to a solicitor who acted for him before litigation. The costs have become so high as to become an impediment to just disposition; if corresponding amounts had been used to adjust the dispositions in the Will, agreed resolution should have been easy. An old pagan would have said that the gods revealed their destructive intentions in the proverbial way.
10 The testatrix did not leave a small estate, but in relation to the needs of the adult children and their claims on her bounty the resources are not ample. No one in the family is well-off and their circumstances range from strained at best to severely adverse at worst. Any decision to increase the provision for one member of the family requires careful attention to the impact in reducing provision for others. The affidavits in the proceedings contained many passages which were of little use, of no use or frankly inadmissible; this contributed to the length of the affidavits and no doubt to the costs. At the hearing counsel conducted the proceedings in ways which limited, but unfortunately did not entirely exclude the intrusion of issues of marginal significance. Some observations I made in Bladwell v Davis [2004] NSWCA 170 at par [11] (with the concurrence of Ipp JA and Stein AJA) are applicable here.
[11] As recurringly happens, it is not possible to meet all the claims on the testator's bounty which have been shown to exist. Determination whether there is power to make an order under the Family Provision Act 1982, and also what order should be made, requires the Court to have regard to the assets available for distribution; and the assets available are not sufficient to satisfy all proved needs and claims on the testator's bounty. There can be no truly satisfactory outcome for this litigation. No-one with a claim on the testator's bounty could receive adequate provision in relation to that person's needs except at the expense of making less than adequate provision available for some other such person. Complete success on the appeal would bring no more than an additional $60,000 in provision for the claimant, unless the Court of Appeal took a course which the claimant did not ask the Master to take, and decided to impose the burden of some or all of the provision on legacies given to the four other family members.
11 All seven of the testatrix' adult children are of course eligible persons as that term is used in the Family Provision Act 1982. There were oblique references in evidence to the possibility that four of the grandchildren of the testatrix may also be eligible persons, but they took no part in the proceedings nor did anyone representing the interests of those of them who are minors. It did not clearly appear whether or not any of them were eligible persons as defined, and met the dependency requirement in par (d)(i) of the definition of "eligible person" in s 6(1), and there is no surplus of resources available after the claims of adult children are met.
12 All three parcels of land were owned in his lifetime by the testatrix' late husband Geoffrey Charles Hampson as registered proprietor under the Torrens System. He left all his assets to the testatrix in his Will. He died on 23 July 1995 and she obtained probate from this Court on 21 December 1995. She transmitted registered proprietorship to herself by Transmission Application 0917035Q dated 8 December 1996 and registered soon after; and was still the registered proprietor at her death. She had the benefit of the protections given by the Real Property Act 1900 to a registered proprietor and in particular the protection given by s 42(1) under which she was to "… except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, that are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded …" with exceptions none of which are now relevant. This protection is enhanced by ss 124 and 135.
13 There was no claim in the present proceedings and I saw no room for a claim that the exception relating to fraud could have any operation; no fraud was charged against her and there is no basis in her conduct for such a charge. Her entitlement to these protections is not affected by the circumstance that she obtained title under a testamentary gift; see Bogdanovic v Koteff (1988) 12 NSWLR 472 (CA).
14 However the testatrix and her executor may be subject to a personal equity of the kind considered in Bahr v Nicolay [No 2] (1988) 164 CLR 604 where, dealing with the Transfer of Land Act 1893 (WA) the High Court held that the interests of the registered proprietors were subject to a trust created by the conduct of those registered proprietors. Bahr v Nicolay was not a case where the registered proprietors were bound by notice of an equitable interest which already existed; in that case a registered proprietor would plainly be protected, and in Bahr v Nicolay the trust was created by the conduct of the registered proprietors themselves. There was a difference of view in the High Court on whether the trust created by the registered proprietors was an express trust or a constructive trust, but that does not affect the principle established. There were also differences in judicial expressions relating to the existence of fraud in that case, but they too do not affect the principle established.
15 It is not enough that a party claiming, as Glen does, an equitable interest or an equity in Lot 12 should establish some entitlement against Geoffrey and his estate; it is necessary to establish a personal equity enforceable in her lifetime against the testatrix as registered proprietor. It is also necessary for his claim to overcome the difficulties of the absence of any written declaration of trust or other written memorandum, having regard to ss 23C, 23D and 54A of the Conveyancing Act 1919.
16 Recurringly claims come before the Equity Division of proprietary estoppel in dwellings arising out of informal arrangements within families. In Vukic v Luca Grbin and Ors; Estate of Zvonko Grbin [2006] NSWSC 41 Brereton J stated the effect of the more important authorities. Notwithstanding the family context and the informality which comes with that, such claims should be carefully and critically examined, and the law of proprietary estoppel does not readily ratify keyhold tenure and word-of-mouth conveyancing around the kitchen table. The present case has characteristics which are fairly often encountered; the arrangements alleged were oral and were made long ago, the terms in which they were made are shown by evidence which could not produce high confidence of its detailed accuracy, and there is poor corroboration, or in the present case no corroboration of the promise. It would be easy for imprecise or casual discussion to pass through the interpretation of an interested person into a recollection of a concrete assurance or promise. There is great wisdom and public interest in the legislation which requires conveyances of interests in land to be evidenced in writing, and it cannot become a matter of course for that wisdom to be circumvented.
17 Facts and circumstances relevant to Glen's claim to an interest in land of the testatrix may fall within the ample range of matters relevant to a claim under the Family Provision Act, notwithstanding that his claim of entitlement does not succeed.
18 Within the family Glen is often given the name Mary, and when that name is used in evidence it refers to him. Glen commenced his proceedings by Summons on 27 October 2008 and his claim appears in Statement of Claim filed on 18 September 2009. He claims (SC7) that about 1989 Geoffrey represented to Glen that he would give Lot 12 to Glen if Glen lived there and renovated the cottage on the land. There are particulars to the effect that the representation was oral, that Geoffrey promised Glen that he would transfer the land to Glen if Glen lived there and improved the cottage, and further that if Glen lived on the land and improved the cottage Glen would have a home for life; and that he subsequently affirmed the promise to transfer the land but not until the death of his wife. It is alleged (SC8) that in reliance on the promise and the expectation that the land would be transferred to him Glen acted to his detriment and commenced occupation of the land and improvement to the cottage. Particulars are to the effect that he has been in occupation continuously since 1989, has paid tradesmen and purchased building materials to improve the land, provided building materials for improvements from his business, provided materials to tradesmen and labourers in exchange for their labour on the cottage and provided his own labour. It is then alleged that Glen occupied the land with the approval and acquiescence of Geoffrey, that Geoffrey died without transferring the land to Glen and that thereafter Glen continued to occupy and improve the land with the approval and acquiescence of the testatrix. There is also an allegation (SC13) that he has contributed most of his time and resources to the improvement of the land but did not pursue other opportunities in the expectation that the land would be transferred to him.
19 The Statement of Claim goes on to make a claim under the Family Provision Act.
20 Glen's claim is a claim against the estate of a deceased person, indeed two deceased persons, advanced after the deaths of both of them so that neither Geoffrey nor the testatrix has had any opportunity to deal with or answer the claim, or to state any facts with respect to it. The claim should be approached with the caution appropriate to such claims, stated clearly and fully in Plunkett v Bull (1915) 19 CLR 544; that case has often been referred to and the statements in it have often been acted on. The need for caution has special force in the present case where there is no written confirmation of the arrangement alleged, although ordinarily written confirmation is required by Statute, and Glen's claim can only succeed if it falls within a limited exception established by judicial opinion. Further, it is necessary to establish a personal equity which was enforceable against the testatrix and to show that it was unconscionable of her not to give effect to Glen's claim by her Will or in some other way. The Defence puts the whole of this claim in issue by denials or statements of non-admission, except for admitting that Glen continued to occupy Lot 12 for the testatrix' lifetime from 1995 onwards (D7) and conceding that Glen occupied Lot 12 to the knowledge of Geoffrey. There is a defence of laches and acquiescence (D10) in failing to bring the claim while the testatrix was alive and could give evidence of her knowledge.
21 In his affidavit evidence Glen set out a long history of events relating to Lot 12. The old cottage remained on Lot 12 after the family took up residence in the home on Lot 2 about 1978. Donald the third son lived in the cottage for about 12 months during which the septic system and water tank were installed at Geoffrey's expense. Then Donald with his wife and family moved to a cottage which Donald constructed on land which had been in the same parcel as Lot 2 but separated by Settlement Road. The lot given to Donald became Lot 1 DP 627031 and contains 0.7587 hectares. Severance from Lot 2 was effected by Deposited Plan 627031 registered on 30 September 1982. Donald and his wife and family occupied the cottage for some years, but they were divorced; and their divorce took effect on 21 December 1989 (Exhibit 2). Lot 1 and the house passed to Don's former wife in a property settlement at about that time.
22 Gary lived in the cottage on Lot 12 from about 1979 to about 1985 and did not pay any rent. Then about 1985 Geoffrey gave Lot 11 to Gary, who built a house on Lot 11 and occupied it with his wife for some years. Gary separated from his wife in 1989, but he retained Lot 11. According to Gary's evidence he told Geoffrey that he wished to rent the cottage on Lot 12, and Geoffrey clearly stated that he was not going to transfer Lot 12 to Gary, and did not ever say to Gary anything to the effect of offering to give Gary the cottage on Lot 12 if he renovated it and made it his home. Gary conducted a banana plantation on Lot 2, and for a while on part of Lot 11, for many years, but recently gave up the plantation and farm work. He no longer conducts any significant farming operation.
23 It is Glen's evidence (affidavit par 21) "Dad told me that he had offered to give Lot 12 to both Gary and Don. I remember that Dad said to me 'I said to both Don and Gary that they could either have Lot 12 or another parcel of land on the farm. They both said that they would rather have me cut off another parcel of land for them' or words to that effect." Gary and Donald have both distinctly denied making any such arrangement. I find it improbable that Geoffrey made or offered to make any such arrangement with either of them, and I infer that it is improbable that he told Glen that he had done so.
24 Glen's evidence shows, and other evidence confirms clearly that from about 1985 till 1989 the cottage on Lot 12 was occupied by Mr Al Cason. Glen moved into the cottage on Lot 12 about January 1989, and he has lived there ever since, except for relatively short absences. There had been no discussion with his father about the basis on which he was going to live there until he had been living there for a week or so. However his father had got Glen to assure him that he was very serious about moving to the house and would stay in the local area, not just move in for a while, leave, come back and then leave. He told his father he would like to move in and his father said that when Mr Cason went Glen could move in. According to Glen's evidence, Geoffrey later changed his mind and spoke about his intentions in other terms. Even later, after Donald's court case, Geoffrey came to the house and told Glen (t33/1) "Incidentally that is it, no way is any other of my children going to get anything until both your mother and I have died". Glen understood that by saying this Geoffrey reneged on the gift. This occurred within the first six months, that is in 1989. This conversation took place in the parents' home.
25 Glen's oral account of the initial conversation differs somewhat from his affidavit in that in oral evidence he attributed to his father that his father said that Glen had to prove that he was going to stay there, to show him he would make it his home. The evidence does not show that these conversations took place in the presence of any third person, and there is no evidence that Geoffrey told any other person of the terms of the commitment he is alleged to have given. Glen said to the effect (T37) that on one occasion Geoffrey explained to Glen in his mother's presence to this effect "… now everything is going to go to Mum … and then it will be up to Mum at the end of her death, before Lot 12 will become [Glen's]". He was talking about his Will.
26 Glen did not explain under cross-examination, in any way which I could regard as satisfactory or probable, why elements of this conversation with his father which if they happened were quite significant, did not appear in his principal affidavit or in a statement which he made to a solicitor who earlier acted for him. His evidence includes this passage (T37 line 37):
Q. When you say in that conversation your father said it would be up to your mother, I suggest he was saying to you it was going to be her decision as to whether you got Lot 12?
A. I suppose he was leaving on her bat or whatever, you know, leaving it all up to her.