Hanlon v Evans

SOLICITORS : Friedlieb Byrne for plaintiffs Tress Cos for defendants

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4360/06 Elizabeth Ellen Hanlon v David Lewis Evans & David John Evans 5745/07 Robwyn Anne English v David Lewis Evans & David John Evans JUDGMENT

1 His Honour: In this matter the principal judgment was delivered on 3 June 2009. There was an application to re-open the case and I gave judgment on 8 September 2009. I ordered that the defendants have leave to re-open their case to further cross-examine the plaintiff, Elizabeth Hanlon, and tender any evidence as to the sale of share in BFB Logistics Pty Ltd. 2 Thereafter the application was heard on 19 November 2009 and submissions were received by 10 December 2009. 3 On the 19 November 2009 hearing there was additional affidavit evidence from the plaintiff, Elizabeth Hanlon, the first defendant David Lewis Evans, the second defendant, David Evans, and his wife Debbie Evans. As would be expected this included evidence from Elizabeth concerning the receipt of the $468,639.75 for the sale of the BFB Logistics Pty Ltd shares on 4 June 2009. Elizabeth's evidence updated her financial circumstances following upon the receipt of those funds. 4 In my earlier judgment of 3 June 2009, I set out the financial circumstances of Elizabeth Hanlon and her husband at paragraphs 35 to 38. They had assets of some $120,000. The evidence discloses that their total assets are now as follows: (i) Real estate - 29 Deutchner Street, Temora $375,000.00 (ii) Cash: (a) NAB Account 6701 3,475.43 (b) NAB Account 9147 55,155.89 (c) NAB account 6257 (928.25) 59,559.87 (d) South West Slopes Credit Union Account No. 1 1,748.21 Account No. 2 50.00 1,798.21 (e) Superannuation Elizabeth 55,704.65 Bill 86,443.00 142,147.65 Other: (f) Membership of Ski Lodge 20,000.00 (g) Furniture 85,000.00 (h) Shares 3,686.00

Less: Tax Liability incl. Capital Gains Tax on sale of BFB shares -20,196.59 Net Assets $666,995.14

5 Apart from superannuation set out above in her two Hesta superannuation polices Elizabeth has death benefits totalling $720,000. Of of her husband, Bill's superannuation policies has death benefits of $121,103.85. 6 So far as Elizabeth and Bill's income is concerned they now receive a combined net weekly income of $1,663 and their expenses, which are substantially reduced because of the repayment of their loans, now total $930 per week. Previously their income was $1,630 net per week and expenses of $1,663. 7 In my judgment of 3 June 2009, I set out the position of David and Debbie Evans at paragraphs 48 to 50. Since 3 June 2009 their asset position has reduced by $70,776 due to the following:

(a) Reduction in managed funds $67,550 (b) Sale of Holden Commodore (under lease) ($18,000) (c) Increase in loan from Rabo Bank $35,000 (d) Lease of utility $4,150 8 So far as their present superannuation is concerned David has superannuation which now amounts to $11,392.90 as a withdrawal benefit. The policy has a death benefit of $50,892.90. 9 Debbie has two policies. Her current balance is $8,080.01 with First State Super. The evidence does not disclose the death benefits. In her State Super account she has a withdrawal balance of $53,171.25. The other benefits payable range from $205,936.66 on retirement to $512,150.05 on death. 10 David and Debbie's previous income was $1,679 per week and their expenses were estimated at $1,476 per week. Recent evidence suggests that that their income is now $1,988 per week leaving aside legal expenses but including interest payments on Kurrawong Street and their expenses are $1,835 a week. This is a worsening of their income position. 11 During the course of the hearing there was substantial cross-examination on both sides designed to show that there had not been frank and full disclosure of the parties financial positions. It is plain that David and Debbie Evans thought that the reference which I made in paragraph 70 of my judgment of 3 June 2009 that they had assets of some $1.7 million was unfair. Their affidavits in the further hearing were directed to disclose their entitlements to superannuation but not their death benefits. They probably did not appreciate that the asset and resource position was not the only matter which the Court takes into account when coming to a final determination. 12 Although Elizabeth Hanlon left out a number of items in her evidence I am not satisfied that she tried to hide her financial situation from the Court. From my observations of her reactions it seems to me that those matters were a genuine mistake. 13 In these circumstances I do not think that it is appropriate to consider Elizabeth Hanlon's situation in terms of what was said by Campbell J in Collings v Vakas [2006] NSWSC 393. I am satisfied as to Elizabeth Hanlon's financial position. 14 There was no evidence from Robwyn English. However, there was a reference to her sister Elizabeth having provided her with assistance in the sum of $7,000. In the absence of any further evidence from Robwyn English I will not assume that her situation has deteriorated. Consideration 15 In my judgment dated 3 June 2009 I made the following conclusions in paragraphs 72 and 73: "72. The estate will be substantially reduced after costs are paid. In my view the provisions in the will of the deceased for her daughters is inadequate and reflects the different values of the property at the time the will was made. The proportions suggested by the plaintiffs in their submissions for a share in what will effectively be the residue of the estate would be an appropriate provision having regard to their different needs and the benefits provided to David. Those proportions were 45% to Robwyn, 35% to Elizabeth and 20% to David. 73. In order to allow David to retain the property and thus secure Mr Lew Evans' position, I think the plaintiffs' share of the residue should be paid as to one half now and the balance on the death of Mr Lew Evans. The residue will be determined after the costs of these proceedings are paid. If the property has to be sold there will be David's share and half the plaintiffs' share which can be invested to provide a greater income for Mr Lew Evans to help him secure further accommodation if that becomes necessary." 16 In submissions following upon the further hearing of this matter on 19 November 2009, Elizabeth submitted that her share should not be changed or, alternatively, if the Court had regard to her improved financial position that any variation should be small and no more than 5% or 10% . 17 There were submissions made about Robwyn English's worsening financial position but this has not been demonstrated on the evidence. 18 It is necessary to reconsider how Elizabeth and Robwyn have been left without adequate and proper provision for their maintenance, education and advancement in life. 19 On the evidence before me Robwyn's position has not changed. David and Debbie's position has deteriorated slightly. Mr Lew Evan's position has not changed to any marked degree. However, he is more frail and has lost the sight of one eye and is almost deaf. 20 In paragraphs 38 and 68 of my earlier judgment I referred to how Elizabeth put her case that she was left without adequate and proper provision. Elizabeth's affidavit evidence puts forward two new matters on this aspect. 21 The first is that Elizabeth needs to replace some whitegoods, an air conditioner and a hot water heater. She wishes to paint the house and replace the existing carpet. None of these items are costed. She also wishes to purchase a car as she and her husband only have work cars with limited private usage. 22 Her submissions once again compare her net asset position to that of her brother, David. That is not the only factor and plainly Elizabeth and her husband are in a good financial position compared with David and Debbie. Elizabeth and her husband do not have dependent children and they have a substantial surplus of income over expenditure. 23 It is also relevant to note the present superannuation entitlements of the parties. Although the withdrawal benefits can be likened to an asset they cannot normally be borrowed upon. The importance of the superannuation entitlements lies in the fact that they represent an important backstop against the perils of retirement. 24 Elizabeth is 52 years of age and David is 49 years of age. Together with their spouses they both have some years before they retire and their superannuation will increase over this time. 25 The death benefits are important because it provides against catastrophe which comes with the death of a partner. Other problems from such an event are looking after children but at least both couples have some protection. At this stage David does have more protection than Elizabeth. 26 In all these circumstances I do not think that Elizabeth Hanlon has demonstrated that she has been left without adequate and proper provision for her maintenance, education and advancement in life. The new matters she raises could be covered by their income and existing savings. 27 The only changes that I would make to the determination which I indicated in paragraph 72 of my judgment dated 3 June 2009 would be that the residue be held as to 45% for Robwyn, and 55% for David. 28 Elizabeth Hanlon's claim should be dismissed. 29 I will hear the parties on costs.

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