Hyslop v Hyslop; Estate of Joyce Audrey Hyslop [2007] NSWSC 1178 | Case summary

107502/03 - HYSLOP v HYSLOP; ESTATE OF JOYCE AUDREY HYSLOP 4875/04 - HYSLOP v HYSLOP; ESTATE OF JOYCE AUDREY HYSLOP JUDGMENT 1 HIS HONOUR: These are two applications. The first is an application left over by Palmer J to be dealt with subsequently as a separate question in probate proceedings 107502 of 2003. The second is an application made by a son of the testatrix for provision under the Family Provision Act 1982. 2 The testatrix is Joyce Hyslop who died on 6 March 2003. Mrs Hyslop had six children. The plaintiff, who was born on 12 October 1953 and so is now 54, is the second in order of seniority of those six children. The principal probate proceedings were heard by Justice Palmer. His Honour gave his principal judgment on 22 November 2006, coded [2006] NSWSC 1237. 3 The problem in those proceedings was that the deceased had been suffering from schizophrenia and other major illnesses and had apparently made a number of wills in 2002 and 2003. The 2003 will favoured the present plaintiff. The 2002 wills favoured each of the children equally. After a hearing lasting four days, in which the parties were represented by counsel, Justice Palmer came to the view that probate in solemn form should be granted of the will of 26 July 2002 and found against the purported will benefiting the plaintiff of 2003. The matter was referred to the Registrar to complete the grant and in due course the grant issued. 4 His Honour reserved the question of costs and reserved the question that was raised in the cross-claim as to what right, if any, the present plaintiff had to occupy the deceased's home at Leumeah. His Honour later ordered that the plaintiff was to pay 50 percent of the defendants' costs and the plaintiff was to have 50 percent of his own costs out of the estate on the indemnity basis, with the defendants to have their costs of the proceedings out of the estate on the indemnity basis. 5 Because of the large amount of costs in those proceedings, the estate has been much depleted. We do not yet have a full idea of the amount of those costs as they have not been assessed. It would seem that the estate claims costs of about $100,000 and the plaintiff costs of about $104,000. The significance of those orders, which prima facie should be set off in accordance with the authorities, will need to be considered later in these reasons. 6 As I have said, the deceased had six children. The plaintiff left school at age 15, he has married or has been in a permanent de facto relationship with four different women. He married Anne and that relationship subsisted from 1972 to 1980 and there is a son, Justin, of that relationship. He was with Sue from 1980 to 1996 with two children. In 1996 the plaintiff sold his Sydney house and moved to the United States of America. While there he married the third lady, Rhonda, in Las Vegas. That marriage was annulled the same year, the plaintiff saying to his mother that it didn't work out. He later married Zhao Yan, with whom he had a child; they are now divorced. 7 The plaintiff returned to Australia in 1998. The exact circumstances of his returning to Australia are in dispute. The case that the plaintiff seeks to make before me is that his mother was about to be put into a nursing home by her other children, that she contacted the plaintiff in America and pleaded with him to come home as soon as he could, and that she would reimburse him for any fares or expenses to get to Australia quickly. The plaintiff forewent his living in the United States, sold up his assets on a forced sale, did not pursue the wife that he said was worth $4 million, and came back to Australia. He then cared for his mother in her home at Leumeah and effected a large number of alterations and renovations to the home and lived on a carer's pension. 8 The defendants say, on the other hand, that the plaintiff's relationship with his third wife in the United States had come to an end, he needed to come back to Australia because he had no job and no assets and when he came back, he lived off his mother until she died. 9 It is a little difficult to work out precisely where the truth lies, the probabilities being that it is somewhere in the middle. It is quite common that when elderly or sick people are being pressured by their children to move to a nursing home, even though the children are acting purely out of a belief that it is to their parent's benefit, there can be considerable resistance. Thus, if a parent can find a child who is willing to save them from that fate, then promises are made to the child and the child's proposition that the parent continue to live in their own home is accepted. 10 It seems to me when looking at paragraph 26 of the plaintiff's principal affidavit of 28 April 2005 that he came back to Australia partly because things were not working out for him in the United States and partly because he thought he should look after his mother. There is little to suggest that "promises" the testatrix may have made, had any real effect on his decision. 11 The medical evidence before Justice Palmer, and which has been reflected in the evidence before me, was that the testatrix was a sick woman. She was mentally ill. However, the plaintiff says that this was not continuous and that she had intervals where she was perfectly okay. However, all of the children seem to have reached the view that, generally speaking, the testatrix was not able to care for her own finances by the end of 2001 and approaches were made by some of them to the Guardianship Tribunal. In 2002 the children eventually agreed that one of them, Pauline Precoma, should be their mother's guardian and she was duly appointed by the Guardianship Tribunal in 2002. 12 The testatrix went to hospital permanently in May 2002. 13 On 9 July 2002 the guardian, whom I will, without due disrespect, merely refer to as Pauline, wrote to the plaintiff informing him that it would be necessary for him to pay some rent for his occupation of the testatrix's house. She said that she had to raise the bond money for the nursing home, that the water rates and council rates needed to be paid, and that there was no money to pay these except for the testatrix's pension which was going to be fully taken by the nursing home. 14 Accordingly, Pauline told the plaintiff he would need to pay rent and electricity, gas, telephone, etc, and she suggested $120 per week. 15 Nothing happened and on 23 July 2002, in a letter marked "Final letter of demand" Pauline wrote again saying that the testatrix would go broke unless he paid rent and that he needed to pay $120 per week. 16 In her affidavit of 27 February 2007, Pauline says that in July 2002 she had a telephone conversation with the plaintiff again asking him to pay rent and he refused. She asked him again in December 2002 and he again refused. Pauline saw a solicitor who apparently advised that she may not have the requisite power to evict the plaintiff and an order was obtained from the court conferring the requisite power upon her. 17 In due course, and in particular on 22 January 2003, she gave a notice to quit to the plaintiff to quit by 25 March 2003, which he ignored. As I have said, the plaintiff's mother died shortly after this on 6 March 2003. The plaintiff has continued to live in the house ever since. It seems that he has paid some expenses, but certainly not all and he has never paid any rent or occupation fee. According to the executor's affidavit there are unpaid rates of about $4,000 and unpaid strata levies of about $6,000 owing in respect of the unit. 18 The plaintiff says that there was an oral agreement made between himself and his mother that if he came home to Australia and looked after her, he could live in the unit for as long as he lived if that was his wish. 19 There is a problem with that in that it has only recently been the case that the plaintiff has relied on any such agreement. 20 The general rule of law is that when a person alleges an agreement with a person who is deceased, whilst corroboration is not essential, the court normally looks for some corroboration: see Re Hodgson (1885) 31 Ch D 177. 21 In the instant case there is almost no corroboration. There was a document signed by the testatrix in 2003 acknowledging that she wished the plaintiff to continue to reside in the house, but the evidence from 2002 and 2003 suggests that the testatrix would sign almost every piece of paper that was put in front of her, as is attested by the fact that one son was able actually to have his mother sign a consent that he had the house to live in. 22 Apart from that, there is no corroboration and, indeed, as Mr Ellison of senior counsel for the defendants points out, the letters which the plaintiff sent to his siblings in August 2002 and March 2003 make no reference at all to the oral agreement allegedly made in Atlanta on the telephone. One would have expected at least the second of these two letters to have included it. 23 Thus, in my view, when one is considering whether the plaintiff has established on the balance of probabilities that there was an oral agreement, the evidence is insufficient to satisfy that burden of proof and, accordingly, the plaintiff fails on the issue. 24 This means that up until the notice to quit he was a bare licensee and after that a trespasser. As a trespasser he is liable to mesne profits. There is little evidence as to what those mesne profits are though an estate agent mentioned a figure of $190 per week. However, from 25 March to today is, on my calculations, 237 weeks. Pauline wanted $120 a week which is probably less than the market value. That would amount to $28,440. I think that if one adds on an extra quarter for inflation, et cetera, the best I can do is to find mesne profits of $35,000. 25 I now turn to the Family Provision Act application. As the High Court has made clear, these applications must be approached in a two stage process: (a) whether the plaintiff is a person for whom the testatrix should have made more provision than she did; and (b) if question (a) is answered in favour of the plaintiff, what provision should be made. 26 Prima facie when a person has six children, leaving her estate to the six children equally is fair and reasonable. Accordingly, one must ask why the plaintiff of all the children should get extra benefaction. The plaintiff's answer to that is that: (1) he was the carer for his mother and none of the other children were prepared to act in that capacity; (2) he is destitute; and (3) his siblings are all fairly well provided for. 27 I have already mentioned that the evidence is a bit equivocal as to whether the prime reason for the move back to Australia was the testatrix's need or the plaintiff's need; probably both factors came into the decision. The evidence of the plaintiff, which is not contradicted, is that he did provide care and he did carry out works around the house. However, on the other side, he received a carer's pension that he otherwise wouldn't have received, and he lived rent-free in the premises. Further, it would seem that the plaintiff, with her consent, used the testatrix's money to pay for repairs and other outgoings of the house. Thus, whilst it is true that he did care for his mother for a period, roughly 1998 to 2003, about four and a half years, he did also receive some benefits. 28 The plaintiff would have me find that he gave up some lucrative position in the United States, but there is just not enough evidence for me to find that. He says that he lost $50,000 by a forced sale of his American assets. Whilst I can accept that he probably lost something, there is just not the evidence to enable me to go any further than that. 29 There seems little doubt that the plaintiff is not a wealthy man, but just whether he is destitute or not is something that is hard to determine. Prima facie he is a person who has nowhere to live. He cannot afford, he says, the rents that are asked for comparable accommodation. He is receiving a modest pension from Centrelink and he has $2 in the bank. He has no motor car or other assets. 30 However, he describes himself as being involved in the scales industry and he trades under a business name which is referred to in both the Yellow and the White Pages with both a phone number and a fax number. For some time he was trading through the vehicle of a proprietary company, but that has recently been deregistered by ASIC. 31 His bank account records were subpoenaed. It would seem that his Centrelink pension goes into an account organised by Woolworths Limited in conjunction with the Commonwealth Bank, however, he also has an account styled a business cheque account with Westpac. Although we do not have a complete set of bank statements, we do have a selection of bank statements from that last mentioned account from 2005 to date and they show that from time to time deposits are made of $700 up to $3,000 and $5,000. These are admitted payments from customers of the plaintiff's business. There are, I think, three entries close to $5,000 by way of deposit. 32 In cross-examination the plaintiff freely admitted that these amounts were from the sale of his product, however, he vehemently maintained that there was no profit in the business because his business was mainly a "research and development" business. He was close to developing the perfect product and in the meantime he was selling product to set off income against the expenses for research and development. 33 Unfortunately, the bank statements really do not reflect this. The statements show that most of the debits to the account come from cash withdrawals rather than payments to suppliers. It may, of course, be that some of the cash withdrawals were made in order to buy supplies for cash, but, in the absence of any evidence on the matter, it would be rather odd that there are so many cash withdrawals if that were the situation. 34 On the balance of probabilities, I find that there has been a profit from the business which has supplied the plaintiff with amounts of money over and above what he has earned from Centrelink, but just how much that profit might be is just impossible to say. However, he is not quite as destitute as he would make out. 35 Up until recently the plaintiff has been represented by solicitors and counsel. However, he appeared today in person. He endeavoured to give evidence that despite the "mistaken finding", in his words, of Justice Palmer, the 2003 will was still his mother's last wish. He is still convinced that his brother stole $30,000 worth of his equipment from his mother's garage and he is adamant that the very least of his entitlement is compensation for $50,000 representing his loss in coming to Australia plus $30,000 for the goods, which he said his mother held on trust for him, which were stolen. 36 He says in his current statement that his income is a Newstart Centrelink payment of about $200 per week and that in his spare time he has been researching a load scale for commercial use which he hopes one day will be perfected. He says his current assets would be less than $5,000, that last year he was diagnosed with cancer and that in April this year he had his right kidney removed. He is currently on medical treatment and owes $35,000 to creditors excluding legal fees. 37 The other children have not, with one exception, filed evidence as to their means. One has shown that he is of modest means with a health problem and with a mortgage of about $80,000. Pauline has not given her income position, but, according to the plaintiff, she is a part-time cleaner with three adult children. One would not have thought that that is showing that she is too well provided for, but she has given no evidence of what exactly she has. 38 It is a little difficult to work out the exact value of the estate. The villa unit in which the plaintiff is currently living is said to be worth between $200,000 and $230,000. If one slightly discounts that and realises that the costs of sale and cleaning up, etc, would be about $10,000, I can put down that asset's value as $215,000. In addition, there is about $56,400 in cash, so that the estate for all real purposes is worth about $271,400. 39 The executor says that the debts of the estate are $170,000 and the solicitor says that the estate's costs are $39,400. However, when one starts looking at the make-up of that $170,000 one gets into confusion. The executor has included in the assets of the estate, in addition to the cash at bank and the villa unit, an estimated $50,000 due from the plaintiff to the defendants pursuant to Justice Palmer's orders. He has then included in the liabilities the legal costs of the plaintiff being $50,000. That $50,000 liability goes into the $170,000 figure. 40 The usual order when costs are both awarded to X and have to be paid by X is that one sets them off. Accordingly, if one trusted the figures in the executor's affidavit, one would think that one should take the assets of the estate at $271,400 and the liabilities at $120,000 plus $39,400 (the estimated defendants' costs of these proceedings) a total of $159,400. 41 Mr Ellison SC says that that is not the way one goes about it because he would estimate that when the costs assessor comes to assessing the plaintiff's bill it would not be allowed at anywhere near the sum claimed and that there would consequently be a $20,000 credit to the estate. 42 Whilst I myself would have thought that wasting a year having bills worked out and costed would not be worth powder and shot, I got the firm impression that that is not the way I should go about things and, accordingly, people will have to go to the expense of dealing with the matter according to law. 43 On that basis we have an estate of $271,400 and we have debts and costs of $159,400. That is on the basis that there is a set-off and complete neutralisation of the costs position in the probate suit. If that is the correct way of looking at it then we have an estate of $112,000. Under the will each child gets a one sixth interest, which is roughly $18,500 each. 44 At this stage we get into what I might call virtual reality and that is that in addition to the $112,000, if the $35,000 that I have awarded by way of mesne profits was brought back into the estate, we get to $147,000. If Mr Ellison is correct and there is going to be a $20,000 credit to the estate then we get something like $167,000. 45 Mr Ellison says that the plaintiff's debts are $35,000 plus costs and if any order is made then the net effect will be only to benefit the plaintiff's creditors and it is not a purpose of the Family Provision Act to make an order which takes money from the beneficiaries whom the testatrix intended to benefit and put it in the hands of the creditors of one of the beneficiaries. I consider there is some validity in that submission. 46 It is clear that the house cannot be retained; it is necessary that it be sold to pay the debts of the estate and the costs. It also appears clear that the plaintiff, no matter what order I make in these proceedings, could not afford to buy a house because the actual amount of money in the whole estate is only something like $112,000. Although one does not take into account, in the usual case, that the plaintiff might be entitled to be benefited by the State, it seems that in this case there is really no alternative but for the plaintiff to endeavour to obtain emergency housing from the State. 47 The situation is to my mind that the other children, apart from the one who has sworn an affidavit, are not in need of great sustenance or they would have told me. The amount that they are going to get under the estate is about $18,500, which, whilst nice to have, is not going to make an earth shattering difference to any one of them. I must ask myself what the community would have expected a testatrix to have provided for one son who does not appear to have made a success out of his life, even though he still has hopes that his scale load business will succeed in due course and doubtless make him a lot of money, and who is likely to be in much the same sort of position as he currently is for some years to come. 48 Although we do not have much detail and we do not have any doctor's report, there is some evidence that his health is not good. At the moment, if the will is left undisturbed, he will receive about $18,500. However, he will have to pay the estate $35,000. If one ignores for the moment the possible discrepancy in costs, because I just do not have enough information on that to be able to form any sensible figure, the estate, including the $35,000 which I have written back in, amounts to $147,000. I think that the proper provision that the testatrix should have made for this particular plaintiff is about half, that is, $73,500. If one deducts from that the $35,000, one gets $38,500 which is $20,000 more than the present legacy. 49 Accordingly, I consider that the appropriate order is that in addition to the benefit that the plaintiff receives under the will of the late Joyce Hyslop he receive an additional legacy of $20,000 and that in further addition he be forgiven the debt he owes by way of mesne profits to the estate. The plaintiff must give possession of the estate's home unit to the executor by 3 December 2007. A writ of possession is to issue: the writ may lie in the office until 3 December 2007. Interest on the plaintiff's legacies is to run from 11 February 2008. However, the plaintiff is to be given an advance of his legacy of up to $5,000 to be paid on removal which advance is to be paid directly to a reputable firm of removalists. 50 The costs of the defendants are to come out of the estate. I make no order for costs for the plaintiff. 51 I have now been told that the matter could have been settled in December 2005, by which offer the plaintiff would have received $86,000 plus more of his costs. That would normally mean that he should pay some costs of the present hearing on the indemnity basis. However, I will take this factor as a further reason why I should make no order for the plaintiff's costs. It seems to me in all the circumstances that it is quite idle to make any other order for costs even if, as Mr Ellison suggests, plaintiffs need to be reminded that they should settle these cases earlier rather than later. 52 The exhibits are to remain with the papers.

Hyslop v Hyslop; Estate of Joyce Audrey Hyslop

At a glance

Court

Decision date

Before

Source

Judgment (10 paragraphs)

Parties

Cases Cited (1)