In the matter of the estate of Ian Patrick Fogarty, Kovacs v Fogarty [2007] ACTSC 24

3. It was common ground that the appropriate way to resolve this dispute was to proceed to hearing on the parents' lost will claim (P 374/06). If this claim was made out, the estate should be distributed according to the terms of the lost will. If this claim was unsuccessful, the consequence would be that, at law, Mr Fogarty died intestate and, pursuant to Division 3A of the Administration and Probate Act 1929, Ms Kovacs, as his widow, would be entitled to the estate and relief should be granted as sought in her claim (P 410/06).

4. No original will or copy of any will executed by the deceased has ever been found. Accordingly, the parents' claim proceeded on the basis that the will that they sought to rely on had been lost. The law in relation to wills and estates is perhaps the only area of Australian law where reference must still regularly be made to nineteenth century English law, and where echoes of Charles Dickens' great work "Bleak House" still resonate. There have, however, been statutory reforms to the law of wills and estates such that much of the old law relating to proof of formal execution of a will is no longer essential. In Curley v Duff (1985) 2 NSWLR 716, Young J (as he then was) said at 718-9:

As I understand it, five matters must be established when it is sought to have probate of a lost will. First, it must be established that there actually was a will (see Re Molloy [1969] 1 NSWR 400), secondly it must be shown that that will revoked all previous wills, thirdly, that the presumption that when a will is not produced it has been destroyed must be overcome (see Allan v Morrison [1900] AC 604), fourthly, there must be evidence of its terms, and fifthly, evidence of due execution (see Gair v Bowers [1909] HCA 57; (1909) 9 CLR 510).

5. With great respect, this seems to me to well summarise the law that I must apply, subject to the reservation, as was also noted by Young J, that statutory reforms now mean that the need for evidence of formal due execution is now not essential, as Parliament has provided that a document embodying the testamentary intention of the deceased may be accepted as a will notwithstanding that the requirements as to formal execution have not been complied with (Wills Act 1968, s 11A).

6. The first issue which must therefore be determined is whether there actually was a will. This is a question that must be determined on the balance of probabilities, with the onus of proof lying on the party asserting the existence of the lost will. In this case, this question is of real significance because if there is a lost will, the estate will go to the parents and siblings of the deceased pursuant to the asserted terms of the lost will. If it is not established on the balance of probabilities that there was such a will, the estate will go to the widow. Given the critical importance of such a factual finding, the principle of Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 must clearly be borne in mind. As Dixon J stated in that case (at 362), while proof in a civil case is on the balance of probabilities:

... reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.

7. The appropriate approach to fact finding in lost will cases was discussed by Campbell J in Cahill v Rhodes [2002] NSWSC 561. His Honour there said (at [56]):

In In the Estate of Ralston (Supreme Court of NSW, 12 September 1996, unreported) Hodgson J dealt with the standard of proof applicable in such cases as follows:

... there should be clear and convincing proof similar to that appropriate to other classes of case where the Court is asked to give effect to parol arrangements in circumstances where the law requires, or the parties have chosen, that a particular matter be recorded in some formal way (see, for example, Pukallus v Cameron [1982] HCA 63; 56 ALJR 907 at 911; Blackney v Savage and Sons [1973] VicRp 37; (1973) VR 385 at 389; Maks v Maks 6 NSWLR 34 at 36; Whittet v State Bank of NSW 24 NSWLR 146 at 151-154), or where the Court is asked to make a finding concerning a legal transaction by a deceased person (see, for example, Birmingham v Renfew [1937] HCA 52; 57 CLR 666 at 674, 681-682).

However, this does not mean that what is required is other than proof on the balance of probabilities: cf Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170 at 171. In a case such as this, I believe that what is required is that the party bearing the onus of proof must be sufficiently diligent in calling available evidence, because the Court will not be prepared to act on material which it considers inadequate: cf my article "The Scales of Justice - Probability and Proof in Legal Fact Finding" (1995) 69 ALJ 731 esp at 739-740.

8. The reference to Birmingham v Renfrew (supra) refers to a passage where Dixon J observed (at 681-682) that, in an action where it was asserted that there was oral evidence of a constructive trust, that would lead to a disposition of property otherwise than in accordance with a will:

Such an agreement can be established only by clear and satisfactory evidence. It is obvious that there is great need for caution in accepting proofs advanced in support of an agreement affecting and possibly defeating testamentary dispositions of valuable property.

9. In these applications, extensive affidavit material was filed. Much of it was objected to on the basis of relevance. It related to unpleasant allegations of infidelities on both sides and, it seems to me, was entirely irrelevant to the central question before the Court, which was whether or not the deceased had made a will. It was common ground that the marriage had had its difficulties, and that the parties had both instructed solicitors to commence negotiations in relation to a property settlement. The relevant evidence going to the existence of a will was limited to recollections of the deceased's parents, evidence of a conversation with a friend, and evidence of the solicitor acting for him in the property settlement negotiations. The relevant evidence in reply was limited to the recollections of Ms Kovacs in relation to the absence of any knowledge by her of a will, and relevant searches that she undertook.

10. It is clearly established that oral evidence may be given in these cases of statements of the deceased that may go towards the existence of a will notwithstanding the rule against hearsay pursuant to ss 63 and 67 of the Evidence Act 1995 (Cth) (the Evidence Act) as it applies in this Territory. In In the Estate of Ralston (unreported, Supreme Court of NSW Probate Division, BC 9604329), Hodgson J (at 7) accepted that these provisions of the Evidence Act established that "generally the hearsay rule no longer makes declarations by a deceased person" inadmissible in lost wills claims. Both counsel submitted that this was a correct statement of the law.

11. Mr Gregory Fogarty is the deceased's father. He gave evidence that, at some time in 2004, he had a conversation with his son at a time when there were difficulties in the marriage in which his son discussed with him what he would place in a will. It follows from this that at the time of the conversation there was no will. The effect of the conversation was that the deceased would attend to making a will which would have the effect of his estate being divided equally between his parents and his two siblings. There was some discussion that a small cash provision should be made for Ms Kovacs to avoid litigation.

12. He said that some time around Mothers Day in 2006, he had another conversation with his son after Ms Kovacs had left their joint residence, and when there were discussions commencing in relation to a property settlement. He said that he asked the deceased whether he was sure that he had a will, to which the reply was that he did and that "everything comes back to the family".

13. Ms Christine Denholm was a neighbour who, in May 2006, was also going through a divorce process. She says that she had coffee with the deceased on 2 May 2006 in which she mentioned that her solicitor had advised her to change her will, and that she intended to do so when she moved to Brisbane. She says that the deceased advised her not to wait and to "do it now". She says that she knew that the deceased was separated from his wife, and she asked what would happen to his estate, to which he replied, "It's all taken care of. Everything goes to mum and dad, back to the family".

14. Ms Moutrage, who was the solicitor acting for the deceased in the property settlement negotiations, said that she had no instructions in relation to any will and did not advise the deceased in relation to any will, but that she believed that he did have a will.

15. The deceased had worked for some time in the real estate industry, and had connections with a number of solicitors. Extensive enquires have failed to produce any will or any solicitor or any person who claims to have prepared or helped to prepare a will.

16. Ms Kovacs said that she had no knowledge of any will during the marriage, and that it was the deceased's practice to keep his papers and documents in the spare room of their residence. She said that it was his practice to keep documents in separate manila folders and gave the example of papers kept as "Ian - Tax" or "Emma - Tax". She says that after his death she attended the former matrimonial premises and conducted a search, but no will was found.

17. Appropriate advertisements were lodged by both parties in both newspapers and relevant law society publications, but no solicitor or other person has come forward with any information going to the existence of a will beyond the evidence referred to above.

18. The application to give effect to what is said to be the lost will is supported by a document which "reconstructs" the will, but it was acknowledged by Mr Hassall, for the defendants, that this document was prepared to put into proper form the testamentary intention set out in the evidence of the deceased's father. This is entirely proper and in accordance with the practice recommended by Powell J in Whiteley v Clune (No 2) The Estate of Brett Whiteley (unreported, Supreme Court of NSW Probate Division, BC 9301902), but see casenote (1993) 67 ALR 859. A difficulty in this case is that no person can give evidence that they have ever seen the will, or read its contents.

19. In the classic early case which established that parol evidence of the contents of a lost will may be received by a court, Sugden v Lord St Leonards [1874-80] All E Rep 21, the Court had to consider the testamentary intentions of the deceased. Lord Cockburn CJ made the observation (at 23) that:

... the absence of the will is a serious fact, and one which may place the court that has to decide whether the parol evidence of the contents is right or wrong in a position of considerable difficulty; ...

20. There was evidence in that case from Miss Sugden who had had custody of the will in a box, and who had read the contents of the will. She had been employed by the deceased, an author of legal textbooks, for some years, in the capacity, in Cockburn CJ's words, of an "amanuensis", a rather antiquated term for secretary or one who copies from dictation (Oxford English Dictionary). Her evidence was that he was in the habit of explaining points of law to her, and that she had read the full contents of the will. His Honour's finding was that (at 24):

... she had on various occasions an opportunity of reading these two wills of 1867 and 1870. On each occasion, when Lord St Leonards had completed his will, he read it over to her, and she had other opportunities of seeing the will, and tells us that she read it over three times, besides being called upon by him on different occasions, when he was making the codicil to his will, for the particular information that he wanted.

If we had not her evidence, all the other parol evidence in the case, or even the documentary evidence, would not enable us to say that we had ascertained the contents of this will so as to give effect to it.

21. Direct evidence of a person who had seen the actual will and read its contents seems to be a common factor in cases where the court exercises its discretion. An old case was In the Goods of Herbert Calthorpe Gardner Esq (deceased) (1858) SW & TR 109 concerning a soldier who was killed and whose papers were destroyed in the Indian Mutiny. There a witness gave evidence of "having frequently read it over, and having seen it in her husband's desk".

22. In Curley v Duff (1985) 2 NSWLR 716 there was evidence of being present when a will was read, and recollection of its contents. In Re Estate of Mary Anne Moore Deceased (unreported, Supreme Court of NSW Probate Division, BC 9201738), McLelland J had to consider a claimed lost will of a person who had died in 1935. There was oral evidence by the plaintiff who claimed to have seen and read the will some three years before the death. McLelland J said (at 3):

An applicant for probate of a lost will has a number of difficulties to overcome, which are summarised by Young J in Curley v Duff (1985) 2 NSWLR 716 at 718-9. For present purposes it is only necessary to refer to the statement of Lindley LJ in Harris v Knight (1890) 15 PD 170 at 179:

A person who propounds for probate an alleged will, and who is unable to produce it, or any copy or draft of it, or any written evidence of its contents, is bound to prove its contents and its due execution and attestation by evidence which is so clear and satisfactory as to remove, not all possible, but all reasonable doubts on those points.

In that case his Honour was not satisfied that the will was proved.

23. In Ralston (supra), Hodgson J had evidence of the applicant and other persons that they heard the deceased state the terms of his will, and that he later stated that these terms had been given effect to in a will made by a named solicitor in 1979. Amongst the deceased's papers was a card from this solicitor and a cheque butt showing payment to this solicitor and noted on the butt "Solicitor (Will)". Although the solicitor, who had since been struck off, was unable to be located, this was considered sufficient evidence to declare the contents of the lost will.

24. In Re Webb (deceased) [1964] 2 All E R 91, the will was said to have been lost during a wartime bombing raid in England and, although no person could give evidence as to reading the will, there was a draft document in the papers of the solicitor (who had since died) together with his books which showed evidence of a charge for producing a will.

25. I am not satisfied that the evidence in this case establishes that the deceased had made a will in the terms proposed, or indeed that he had made a will at all. I accept that there was a discussion about the terms of a proposed will. I accept that this occurred in the circumstances of a turbulent marriage which involved separation, reconciliation and separation. While I do not doubt the veracity of the evidence of the conversation about the proposed terms of the will, that is all that it is, that is to say, evidence of an intention as to what would be in a future will.

26. The subsequent evidence is that, in circumstances where there had been discussions about marriage break ups, Mr Fogarty told his father that "it was all done", and said to a friend who was also going through a divorce words to the same effect. I do not doubt the veracity of these recollections, but it seems to me that it may have been no more than a way of ending the conversation with the parents who clearly, on the basis of the excluded affidavit materials, had very strong views about the deceased's wife. He may well have said that he had done what they wanted him to do. Equally, in a discussion with another person going through the trauma of separation, he may well have agreed to the need to have a will, and asserted that he had made sure that his affairs were in order. There is some conflict within the evidence, as to whether the will left "everything to my family", a more specific equal split between parents and siblings, or that specific split with a specific modest bequest to the wife.

27. Against this, he was an otherwise careful person with commercial experience in real estate and with a wide range of contacts among solicitors. No solicitor says they discussed a will with him or ever saw a document amongst these contacts. He engaged solicitors to act for him in the property settlement negotiations, but did not instruct them to make any will.

28. I am not satisfied to the requisite standard of proof, being the civil standard as explained in Ralston, that the deceased at the time of his death had executed any will. Accordingly, claim P 374/06 should be dismissed. The consequence of this is that the deceased has died intestate and, accordingly, the plaintiff in claim P 410/06, as his lawful wife at the time of death, is entitled to the relief she seeks.

29. I will hear the parties as to the issue of costs.

30. I note that in Cahill v Rhodes [2002] NSWSC 561, Campbell J cited with approval remarks on costs by Powell J in Re Estate of Paul Frances Hodges Deceased; Shorter v Hodges (1988) 14 NSWLR 698 at 709 that :

Costs are, of course, in the discretion of the court, but that discretion, being a judicial, and not an unfettered one, must be exercised in accordance with established principle.

The general principle to be applied in adversary litigation is that costs follow the event, those costs being taxed on a party and party basis. However, over the years, a number of exceptions to this general rule have come to be recognised. In the field of Probate litigation, two such exceptions have come to be recognised, they being:-

1. where the testator has, or those interested in residue have, been the cause of the litigation, the costs of unsuccessfully opposing Probate may be ordered to be paid out of the estate;

2. if the circumstances led reasonably to an investigation in regard to the document propounded, the costs may be left to be borne by those who respectively incurred them.

In the present case, this litigation has been occasioned by the fact that the testator died leaving real doubt about whether he had left a Will, and if so what that Will was. In these circumstances, it is appropriate for the costs of the parties to be paid from his estate.

32. While this is no doubt the form of order that will be sought by Mr Fogarty's parents, I am troubled that this case involved voluminous irrelevant affidavits pouring bile on his wife, which have added considerably to the costs of proceedings, and I do not see why the estate should bear these costs. I am also troubled by a witness who, in her affidavit, referred to a visit by Ms Kovacs to the premises of Mr Fogarty. While she claimed in cross-examination to have no animus in the matter, she was shown a spiteful letter she wrote to Ms Kovacs shortly after Mr Fogarty's death in which the witness boasted in explicit terms of a sexual relation with Mr Fogarty under the nose of his wife. I do not see why the estate should bear any of the costs of such a witness. I would encourage the parties to resolve the question of costs along the lines of these observations.

I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Connolly.

Solicitor for the defendants: Ray Swift Moutrage & Associates