Lawrence v Campbell

SOLICITORS : Turner Freeman for plaintiffs Calvin Nelson & Co for defendant

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

2646 of 2004 Edward Thomas Lawrence & Pamela June Hay v Louise Annabelle Campbell

JUDGMENT 1 His Honour: This is an application under the Family Provision Act 1982 in respect of the estate of the late Frederick Albert Hay who died on 2 January 2004 aged 86 years. The plaintiffs are two of the deceased's children who survived him. The defendant, who was his daughter by his second marriage, also survived him. There was also a child of the first marriage of the deceased Robert Arthur Frederick Hay who was born in about September 1938. No notice has been given to him, as he cannot be found notwithstanding that searches throughout Australia have been made. I am satisfied that it is impracticable to serve him with notice. The last will of the deceased 2 The deceased made his last will on 4 August 1978 and in the events which have followed, namely, the death of his second wife on 9 August 1993, the whole of his estate passed to the defendant. She was appointed executrix of the estate.

The estate of the deceased 3 The estate of the deceased included his house at Terrigal which is now valued at $595,000. There is cash in the estate of $5775.37 and liabilities for land tax of $1164.55. The net distributable estate before costs is therefore $599,610.82. 4 The costs incurred in this matter are substantial. The plaintiffs are estimated at $132,957 and the defendants at $118,000. These estimates are for a 3-day hearing. The case has proceeded for 4 days and there will be additional costs, which the defendant estimates for its side of $15,000. Allowing the same for the plaintiff the total costs will be $280,957 if the plaintiffs are successful. It will be necessary to give consideration to the fact that these costs may be allowed if the plaintiffs are successful. Family history 5 The deceased Frederick Albert Hay was born on 2 March 1917. His first marriage was to Jean Lillian Dean on 24 October 1936. They had a son Robert Arthur Frederick Hay to whom I have earlier referred who cannot be located. They appeared to have had only one child. Although proceedings for divorce were commenced in 1940 the Decree Absolute in respect of their marriage was not made until 7 December 1944. 6 In early 1940 the deceased met Lillian Joyce Smith and they had two children of their de facto relationship. The first was the plaintiff Pamela June Hay who was born on 7 June 1940 and the second was Edward Thomas Lawrence who was born on 1 December 1941. 7 In 1943, Lillian Joyce Smith separated from the deceased and moved to Adelaide. She commenced a relationship with Roy Lawrence. 8 On 2 December 1943, the deceased deserted the army because his de facto wife Lillian Joyce Smith could not live on his army allowance as his legal wife was also claiming that allowance. He was court martialled and sentenced to one year of detention. He was discharged in late 1944 or early 1945. He then remarried in October 1945, this marriage being to the defendant's mother. The defendant, Louise Campbell was born on 14 July 1949. 9 There were difficulties for Lillian Joyce Smith after she separated from the deceased and moved to Adelaide. The plaintiffs Pamela and Edward were placed into child welfare in 1944. Lillian Joyce Smith's marriage with Roy Lawrence was difficult as he was a very violent man. She eventually separated from him in 1952. After this occurred she was given emergency housing in Adelaide and the two plaintiffs were placed into child welfare homes.

10 Edward eventually ran away from institutional care when he was fifteen and worked until he was eighteen as a drover in the far reaches of South Australia. As soon as he was old enough he joined the navy when he turned eighteen on 23 November 1959. 11 Edward endeavoured to locate his father and through his father's brother eventually managed to meet his father again in May or June 1960. Neither he nor Pamela had seen him since the separation during the war years. Apparently the deceased had tried to make contact with the children after the war but had been rebuffed by those having their care in South Australia at the time. 12 In the course of that meeting Edward met Nell, the deceased's second wife and the defendant, Louise, although she does not have a clear recollection of it. For sometime thereafter contact was continued although it seems that it had to be away from the house because his arrival caused some upset to the deceased's second wife. 13 Edward married in 1965 and invited his father and family to his wedding but they would not come. The plaintiff was bitterly disappointed with this. In June 1965 he was seconded to the Royal Navy in Singapore and did not return for two years. 14 Edward was discharged from the Royal Australian Navy in 1968. In 1970 Edward took his son Marty to see the deceased and the visit was not a great success. Edward felt that the deceased showed no interest in his grandson. This was the last time he saw the deceased. 15 In 1972 Edward started a business importing toys. This business failed in 1979 and he separated from his first wife. In 1980 he joined the merchant navy and in due course divorced his first wife in 1982. He married his second wife Gail Diane Knighton in 1988. In 1989 he suffered serious injury at work and was off work for fourteen months. In 1991 he was diagnosed as suffering from asbestosis related pleural plagues. 16 He retired from the merchant navy in 1998. He and his wife moved to Perth in Western Australia where they still live. 17 Pamela had also tried to locate the deceased. In 1961 she travelled to Sydney for this purpose. She was there for some 6 months and met the deceased. She met her father on a number of occasions in 1961 over a period of some seven months but not often at his home. She said she did not feel welcome. 18 At the end of that period she had a 21st birthday party given by her father and there was an incident at or about that time when she alleges he sexually abused her. 19 After this incident, Pamela returned to Adelaide and was admitted to the Enfield Receiving Home, an acute psychiatric hospital, located in Adelaide on 18 April 1962. She stayed there, was discharged on the 24 June 1962 and commenced her training as a nurse. 20 Pamela married Gustav Skripal on 25 November 1967. The following year she was diagnosed with Systemic Lupus Erythematosis an auto immune disorder which continued to affect her for the rest of her life. In 1970 she became quite ill. 21 Notwithstanding the events of 1961 the plaintiff continued to exchange cards and letters with the deceased until an occasion when they met accidentally on a bus tour in Canberra. A plan was made to have dinner in Sydney but this was eventually cancelled by the deceased much to the disappointment of Pamela. 22 Pamela was divorced on 26 June 1978 and at this time she still kept in contact in the years 1979 to 1993 with the deceased. She made numerous trips from Adelaide in order to spend time with him. 23 Unfortunately according to Pamela the deceased made a sexual advance toward her in 1993 in Terrigal which she rebuffed. She left the house. She did not see him after this but did keep contact by phone. 24 Pamela and her father had an argument about his relationship with Edward and this led to a further failure of communication. The deceased's reasons seemed to be related to some unfounded suggestion that Edward had made a pass at his wife. 25 As I mentioned the deceased made his last will on 4 August 1978 and he died on the 2 January 2004. Probate was granted and this application was commenced within time.

Eligibility 26 The plaintiffs, Edward and Pamela, are children of the deceased and accordingly are eligible persons. In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following:- "The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."

The situation in life of Edward Thomas Lawrence 27 Edward is 65 years of age. He is married without any dependent children. He and his wife reside in their home at 63 Esther Street, Eden Hill, Western Australia which is valued at $470,000. They have shares worth $40,719 and cash assets of $52,477. They own a car and a caravan worth $18,000, a time share apartment valued at $21,500 and they have estimated their home contents at $4,000. Edward has a superannuation fund of $181,059 and his wife's superannuation which has been topped up by Edward from his assets is $262,166. Their assets total $1,049,921. Their only debts are credit card debts of $1,028.31. 28 Edward suffers from a number of complaints including asbestos related pleural disease and early asbestosis. His ability to engage in physical activity is limited. His prognosis is that his asbestosis will increase with the passage of time and he will become further disabled. On the ordinary tables his life expectancy would be seventeen years and is only reduced by approximately three years due to his disabilities. 29 Edward has not contributed to the estate of the deceased and he has not received any benefits from his father during his lifetime. 30 Edward and his wife receive fortnightly pensions of $1,657 and in addition Edward has an allocated pension from his superannuation of $404 a fortnight. Their income is in excess of their fortnightly expenditure which amounts to $1,883 a fortnight. 31 It is necessary to see how Edward says he has been left without adequate and proper provision for his maintenance, education and advancement in life. First, he says he and his wife need to replace household items and make some minor repairs to their house. These total $28,000. Some of the items would not be necessary if the Court acceded to his second request which is to move from his present home which is in what is described as a low socio-economic neighbourhood to a somewhat better neighbourhood. The reason he would like to move is that he and his wife find it difficult to live in Eden Hill and as they have had to take out apprehended violence orders against neighbours on numerous occasions. The estimates of the capital needed to upgrade to another area is between $60,000 and $100,000. 32 Edward and his wife enjoy travelling in Australia. They have an old Nissan Patrol 4 Wheel Drive and a caravan they use when they go travelling. They would like to buy a mobile home known as a Winnebago for $80,000 and buy a new Toyota Camry car for approximately $28,000. An alternative to this would be to replace the Nissan Patrol and keep the caravan at a cost of $58,500. 33 Edward also seeks a sum to supplement his income because he is now drawing on his superannuation capital by means of an allocated pension. He suggests that he needs an amount of $30,000 to $75,000. The situation in life of Pamela June Hay 34 Pamela is aged 66. She is single and since she and her husband divorced she has lived on her own. She has a house at 12 Ian Street, Broadview, South Australia valued at $300,000. She has a 2007 Toyota Corolla car worth $12,300 and cash of $28,193.22. Her household contents are valued at $3,825 and she has superannuation of $62,136.05. These items total $406,454.27. She has a mortgage on her house of $37,610.08. 35 Pamela has had to retire from her employment as a psychiatric nurse and she exists on a pension of $525.24 a fortnight. Her fortnightly expenses total $1,187.01. 36 Pamela is not well. She suffers from Systemic Lupus Erythematosis with Jaccoud's arthritis and this is particularly active at the moment. She suffers moderately severe osteoarthritis and she has had a number of past fractures. She also suffers from fibromyalgia, she has a subluxation of the metatarsal heads in both feet which create difficulties for her and she also suffers from lower back pain. The cost for her future ongoing treatment has been estimated and the costs are substantial although she has medical insurance. 37 Pamela needs $76,000 to refurbish her house in Adelaide and it would be necessary for her to pay off her mortgage of $32,600 in order to reduce her financial commitments. She also seeks a fund of $120,00 to meet the contingencies of life. She did not receive anything from the deceased during his lifetime nor did she contribute to the estate. 38 It is necessary to see the situation in light of anyone else having a claim on the bounty of the deceased. In this case the only person is the defendant, Louise Campbell. Situation in life of Louise Campbell 39 Louise is aged 57. She is married and has three children who are not dependent upon her. She is in full time employment at Pendle Hill High School as an administration manager. Her husband works for Sydney Water as a project manager. 40 They own their home at 20 Darlington Street, Stanhope Gardens, New South Wales with an estimated value of $475,000 and her husband owns an investment unit at Wentworthville with an estimated value of $230,000. They have cash and motor vehicles and other sundry property worth about $42,000. Louise has superannuation benefits when she retires of $135,500.59 and her husband has a future benefit of $446,113.51. Apart from the costs of these proceedings their liabilities are mortgages secured on their properties of $323,644. 41 Louise and her husband's combined income is $3,432.27 a fortnight and they have expenses of $2,845 a fortnight. They have sufficient income at the present time. 42 Louise's health is reasonable although she was to have had cataract operation on 13 March 2007. Relationship between the plaintiffs and the deceased 43 A large factor in this case was the history of the relationship between the plaintiffs and the deceased. It is useful to see what the authorities say on this subject. 44 Section 7 of the Family Provision Act provides that if a court is satisfied that a person is an eligible person "it may order that such provision be made out of the estate or notional estate, or both, of the deceased person as, in the opinion of the court, ought, having regard to the circumstances at the time the order is made to be made for the maintenance, education or advancement in life of the eligible person." 45 In Benney v Jones (1991) 23 NSWLR 559 at 568-9, Priestley JA noted as follows: "This conclusion directly raises the question of whether the word "ought" in s.7 of the Act carries with it an idea of moral obligation. In answering this question some guidance may be obtained from authoritative decisions under the Testator's Family Maintenance & Guardianship of Infants Act 1916 (as amended), using due care to take account of the differences between the two Acts. ….. It seems plain from the comparison of the two Acts, and particularly from s.3 of the 1916 Act and s.7 and s.9 of the present Act, that language from the earlier Act has been deliberately carried into the later one. It would seem that at least one purpose of this retention of much litigated sets of words is that the benefit of the authorities on those words may be available in the construction of the present Act. The same reasoning supports the view that where the new Act uses a different word in an important operative section from the word in the corresponding section of the earlier Act, the difference is deliberate and has a purpose. The Act draws a distinction between the eligible persons referred to in par(a) and par(b) on the one hand and par(c) and par(d) on the other. Broadly speaking, the distinction can be seen as one between classes of people who, in the ordinary course of family life would, prima facie, be persons to whom the deceased's person spoken of in s.3 of the 1916 Act and s.7 of the present Act would have an obligation to make provision, whereas those in the other class would, prima facie, not be regarded in the ordinary course of family life as being likely to be made the subject of provision by the deceased. In regard to the first class, the more usual approach under the 1916 Act was that before making an order, the court needed to be satisfied that the testator ought to have made provision for the applicant, in all the circumstances of the case: see Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 478-479 and Hughes v National Trustees Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134 at 146-147 per Gibbs J, with whom Mason and Aickin J both agreed. However, there was a differing view, expressed by Murphy J, in the same case when, after commenting (at 158) that "many cases suggest that an applicant must show a moral claim …", he went on to say that this was a gloss on the Act and was unwarranted and inconsistent with the language of the legislative scheme. It seems to me that the introduction into s.7 of the present Act of the word "ought" in replacement of the words from s.3 of the 1916 Act "as the Court thinks fit" shows the intention of the present Act to accept the approach adopted by the majority in Hughes and to reject that of Murphy J. The word "ought" seems to be deliberately adopted, in the present Act, from what Gibbs J called the classical statement in Bosch . To my mind, this is a very clear indication that an eligible person within par(c) and par(d) must show a moral claim on the estate before an order can be made; I also think this is the same thing as saying that the deceased person must have had a moral obligation to that eligible person. It is hard to imagine how the one could exist without the other. It seems to me that the same reasoning is very probably applicable to applications by eligible persons within par(a) and par(b) although it is unnecessary to decide that in this case." 46 Meagher JA (NSWLR at 570) agreed with Priestley JA. 47 Meagher JA had previously expressed a view in Hughes v Hughes Court of Appeal unreported 6 June 1989 (an adult daughter case) that the duty arose to make provision as established in that case as follows:- "Her right arises not merely from the bare fact of parenthood, which of itself does not generate a right , but from the general circumstances of the case; namely, parenthood, the performance of normal filial duties in the 10 years after she left school and in the two periods between her earlier trips and in her professed and continued willingness to be of whatever assistance to her father she could be." (Emphases added). 48 Hope and Samuels JJA concurred in the judgment of Meagher JA in Hughes v Hughes. 49 In Benney v Jones, Mahoney JA at 560 said: "Whether an order should be made raises (as it has been described) the moral or normative question. That question remains, whether the application is made under the former or the present Act. The nature of that question was discussed in this Court and in the High Court in White v Barron (1980) 144 CLR 431; and in Goodman v Windeyer (1980) 144 CLR 490: see, also, Kearns v Ellis (Court of Appeal 5 December 1984 unreported) and Gorton v Parks (1989) 17 NSWLR 1. "Where the applicant is a member of the deceased's family, as referred to in the earlier paragraphs of s.6(1) relating to eligible persons, the nature of the duty which the deceased should have fulfilled is reasonably clear." 50 In Gorton v Parks (1989) 17 NSWLR 1 at 7 Bryson J analysed the relevant authorities dealing with claims by able-bodied adult males. For present purposes, there is no reason to distinguish able-bodied adult females. In the course of doing so, His Honour noted: "It is then established by authority that no special principle is to be applied, and it seems important to warn myself against allowing prima facie views or the success of some applicants who have special claims to disturb the perception that there is no special principle. In particular, an idea that an able-bodied adult male who is earning a living could have no claim in relation to resources of any size is quite erroneous and must not be entertained either prima facie or at any stage. It is a discarded categorisation:" 51 Bryson J also rationalised the decision of Pontifical Society for the Propagation of the Faith v Scales (Scales Case) (1961-62) 107 CLR 9. Scales' case was a claim by an adult son, who was unsuccessful, and where Dixon CJ said (at 18): "The outstanding fact of the case is that, throughout the period of their joint lives, the son disregarded the father and the father disregarded the son and after a time expressly disowned him. … In truth there is the bare fact of paternity and no other mutual relation: the case depends upon that fact and basically upon nothing else except all the arguments of right and wrong that may be considered to spring from that source and affect the situation of the parties as it existed at the testator's death." 52 At 17 NSWLR 1 at 9-10, Bryson J sought to distinguish Scales Case. He said: "Dixon CJ did not expound the weight which he gave to the bare fact of paternity and nothing else; I regard that bare fact as of very great importance in morality. The idea that the moral obligations arising from paternity are diminished or do not exist if the parent withholds acknowledgment of the obligations or of the child appears to me to be an idea from a distant age. There have been changes over long periods in the beliefs of the community about moral duty to children, and there seems in the distant past to have been some acceptance of a view that unless children were legitimate or were acknowledged by their father, he has no moral duty towards them. There seem to have been legal systems in the past in which attempts to provide for illegitimate children by will were ineffective; … Under modern legislation parental duties are not distinguished according to acknowledgment or legitimacy. The idea that acknowledgment by a parent of a child or full accordance of status by a parent might increase the responsibilities of a parent or be significant to moral duty towards the child, with the contrary implications, seems a very strange idea and it is curious to find it, even in a limited way, in a judgment published as recently as 1962." 53 Bryson J in any event distinguished Scales case on (p 11-12) of Gorton v Parks on the basis that on the facts before him the plaintiffs, "In their childhood years they lived in the same street in which their father lived in far greater prosperity a few doors away: they saw him and he saw them from time to time, and they had a relationship with him in which negative aspects preponderated greatly or almost exclusively over any positive aspects of the familial relations. A mutual relation there was. Each of them had a relationship with the testator which the testator brought to an end; in the case of Mrs Joan Adams and Mr John Culcott, he saw something of them and made an inadequate contribution to their maintenance in their childhood, but in effect abandoned the relationship before they reached mature years and at a time when they cannot fairly be held responsible for ending the relationship. They were present before his eyes in their childhood and years of education and trade training; he knew who they were, he must have had an idea of what they were doing, and he did not make even token attempts to assist them in any way. .." 54 In Walker v Walker (unreported 17 May 1996) Young J reviewed the question of moral duty. His Honour reviewed Gorton's case, in the context of the earlier High Court and House of Lords decisions, noting the effect of Singer v Berghouse (1994) 184 CLR 201 as follows: "In Singer's case , a widow who had been married less than one year to a 68 year old man failed in her application under this Act in this court, in the Court of Appeal and in the High Court. The majority of the court said at page 208 and following that to assess a claim under the present Act there is a two stage process. The first stage is to determine whether an applicant has been left without adequate provision and the second stage is to determine what provision ought to have been made. At p 209 the Judges point out that Re Allen has guided past courts and has three times been approved by the Privy Council or High Court, but that "we doubt this statement provides useful assistance in elucidating the statutory provisions. Indeed, references to "moral duty" or "moral obligation" may well be understood as amounting to a gloss on the statutory language". They then say "the determination of the first stage in the two stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty." 55 Young J also observed: "In Fraser's case, Kirby P at p29 said that "I do not consider that it would be safe for this court, or other courts in this state, to disregard the obita dicta in Singer v Berghouse concerning "moral duty". However, His Honour's decision made it quite clear that he thought that references to moral duty in the judgment under appeal really amounted to little more than a shorthand expression for the lengthier statutory provisions actually used in the Act. His Honour made it clear that there was no drastic change in the law "either by the observations of the majority in Singer or by the High Court's reference, in the footnote, to what Murphy J said earlier (p27)." "Handley JA thought that the dicta in the High Court in Singer should not be followed and pointed out that even as late as 1994 in Neil v Nott (1994) 68 ALJR 509, the High Court was itself using the words "moral claim" in decisions under this Act. "Sheller JA again did not consider that the High Court's suggested abandonment of concepts of moral claim or moral obligation changed the task of the court. He said, with reference to decisions of Murphy J at p42 "the point made in the judgments to which Murphy J referred was that the existence of a moral obligation owed by the deceased to the claimant was a necessary part of the claimant's case but not alone sufficient to justify an order in the claimant's favour. Thus, in theory an order would not be made out of the estate of a deceased parent in favour of a child who had over many years completely cut himself or herself off from the parent, even though the child was left in need. On the other hand, a wealthy child who had cared for the parent throughout his or her life may have no claim for further provision under the legislation. The courts, in giving effect to the legislative scheme, having accepted that the bare moral claims of the sort mentioned by Stout CJ in re Allardice (1910) 29 NSWLR 959, 970 will not alone suffice to empower the court to make an order." 56 The concerns expressed about any change in the law as a result of Singer v Berghouse were recently put to rest by the High Court in Vigolo v Bostin (2005) 221 CLR 191. 57 In Walker v Walker, (p 27) Young J noted: "It is often impossible to work out whether the degree of separation between parent and child at the date of the parent's death is solely the fault of either or whether it has come about by factors too strong for either to control or somewhere in between. The important matter is not fault, but, whether in all the circumstances it would be expected by the community that the testator would have to make a greater benefaction than he in fact did to constitute proper or adequate provision for the plaintiff.

Accordingly, I reject the approach that all an applicant under this Act has to do is to prove that he or she is an eligible person and that he or she reasonably needs more financial assistance. The cases show that there must be a full investigation into all the facts and circumstances of the matter to see whether the community would expect that a person in the plight of this testator ought to have made provision or further provision for the applicant. …"

58 These words were recently approved by Ipp J in Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361 when he said: "I agree with his Honour's remarks, although I would express the rider that, often, where an applicant is a person within paragraphs (a) or (b) of the definition of "eligible person" in s 6(1) of the Act, proof that the applicant is a person in need will be sufficient. I accept however that there must be a full investigation into all the facts and circumstances as his Honour expounds."

59 What is noticeable about Edward's relationship with the deceased was that when he became an adult he was the one who tried to find his father. It seems from his evidence which is not in doubt that the deceased's wife did not welcome the contact which the deceased had with Edward. For example in the sixties they met at the deceased's brother's home at Annandale, in restaurants and other places. This difficulty was illustrated by the deceased's failure to attend Edward's wedding in 1965. The last contact Edward had with the deceased was in 1970 in circumstances which I have already recounted and, once again, the deceased did not welcome Edward's intrusion into his new life. In these circumstances it is not surprising that Edward felt rejected by his father. The fact that this occurred was understandable and in my view means that Edward's claim should not be reduced by the lack of contact with the deceased. 60 Pamela also wanted a relationship with her father. I have already mentioned that when the children were very young the deceased went to South Australia to try and find them but was put off by the attitude of the authorities. He visited Pamela on a number of occasions when Pamela lived in Sydney the last visit being in April 1962. That was when she suggested there was some alleged sexual abuse perpetrated on her by the deceased. The evidence on this matter is not substantiated and her history after her admission to psychiatric care in South Australia makes no reference to such problems. It only refers to her sexual abuse by her stepfather when she was a child. 61 The important fact is that notwithstanding this allegation Pamela still continued to see her father and even after the inappropriate advances he made towards her in 1993 which I accept took place, Pamela still did not cut off all contact with the deceased. She continued to talk to the deceased by phone until they argued in 2000 concerning the deceased's relationship with Edward. The deceased appeared to have some unsubstantiated view about Edward which prevented him from making contact. In my view there is nothing in this history which would prevent Pamela's claim. Discussion 62 Apart from some payments from his wartime salary in 1943 the deceased did nothing to support his children. As a result of the limited contact and the deceased's attitude neither Edward nor Pamela had an opportunity to help the deceased during his lifetime. 63 However Louise and her husband did help the deceased from time to time. In 1995 Louise's husband repaired the dilapidated front veranda of the deceased's house. In 1993 further repairs were carried out on the deceased's house and in 2003 new flooring was laid in the kitchen. In 1998 Louise's husband paid the deceased $6,000 so that he could have a second hand car. Shortly after this the deceased found it hard to manage financially. Louise and her husband arranged for the deferral of council rates and they paid the deceased's insurance and other utilities. They purchased a new refrigerator for the deceased. 64 One of the matters concerning this case is the impact of costs on the proceedings. Before dealing with this I should deal with a discreet matter on costs which came up during the hearing. 65 In her affidavits the defendant put in issue the question of whether Edward was in fact the son of the deceased. That issue was a live one until it was abandoned by the defendant on 22 April 2005 after the original of Edward's birth certificate was produced a month earlier. The costs in respect of that issue were the subject of debate. 66 During her life the defendant knew from conversations with her father that Edward was, in fact, his son. She also knew that Pamela was his daughter and she never questioned her paternity. When the plaintiff, Edward, filed his first affidavit he served a copy of his birth certificate and that raised a question in the defendant's mind because the date of the marriage was shown as 24 October 1936. This appeared strange to the defendant because in the circumstances known to her Edward and Pamela were children from a relationship the deceased had with a woman during the war and not the woman he married in 1936. One of the things about the birth certificate attached to Edward's documents was that the informant was unclear and it was not clear whether it was signed by the father or the mother although the signature obviously included the name Hay. At the time the certificate was signed the applicable act was the Registration of Births Deaths and Marriages Act 1899. 67 Section 19B of the Act provided: "In the case of an illegitimate child no person shall as father of such child be required to give information under this Act concerning the birth of such child, and the district registrar shall not enter in the register the name of any person as father of such child unless at the joint request of the mother and of the person acknowledging himself to be the father of such child, and such person shall in such case sign the register together with the mother." 68 When the original birth certificate was produced in March 2005 it became clear that the informant was in fact the mother and that she had signed the birth certificate. There is no signature of the father on the birth certificate and it seems that the mother avoided the legislation by giving reference to the date and place of marriage. Plainly the form required that the marriage was between the two parents but what happened was that the mother used the date and place of marriage of the deceased's first marriage. That reference did not include a reference to his child by his first marriage but only included Pamela who was then one year old. 69 The conundrum thus having been cleared up to an extent the defendant was prompt to concede paternity in an effort to minimise costs. In the circumstances and bearing in mind what has happened I do not think that questioning the paternity by the defendant was inappropriate and accordingly I do not propose to make any special costs order on this aspect. 70 The potential costs in this matter approach $290,000 in an estate of $600,000 which leaves about $300,000 after the costs of sale available to meet the claims of the plaintiffs and the defendant. On the face of it the costs seem disproportionate given the amount involved in the estate. 71 Rule 42.4 of the Uniform Civil Procedure Rules provides as follows: " Power to order maximum costs (1) The court may by order, of its own motion or on the application of a party, specify the maximum costs that may be recovered by one party from another. (2) A maximum amount specified in an order under subrule (1) may not include an amount that a party is ordered to pay because the party: (a) has failed to comply with an order or with any of these rules, or

(b) has sought leave to amend its pleadings or particulars, or

(c) has sought an extension of time for complying with an order or with any of these rules, or (d) has otherwise caused another party to incur costs that were not necessary for the just, quick and cheap: (i) progress of the proceedings to trial or hearing, or (ii) trial or hearing of the proceedings. (3) An order under subrule (1) may include such directions as the court considers necessary to effect the just, quick and cheap: (a) progress of the proceedings to trial or hearing, or (b) trial or hearing of the proceedings. (4) If, in the court's opinion, there are special reasons, and it is in the interests of justice to do so, the court may vary the specification of maximum recoverable costs ordered under subrule (1)." 72 This rule took the place of the former Supreme Court Rule Pt 52A r 35. The matter has been dealt with by Palmer J in Sherborne Estate (No2); Vanvalen v Neaves (2005) 65 NSWLR 268. I agree with His Honour's analysis of the rule that the rule "is intended as a means whereby the court may, if the need arises, curb the tendency of one or all parties to engage in disproportionate expenditure on legal costs by making it clear, at an early stage of the proceedings, that beyond a certain limit the parties will have to bear their own costs - win or lose". 73 Practice Note Supreme Court Equity 1 paragraph 58 makes it clear that in cases where the estate is under $500,000 the court may cap the costs of a successful claim. In the present case the estate exceeded this figure and there has been no pre-trial directions which have warned of the possibility of the costs being capped. 74 However, that is not an end to the matter because the court has a general discretion in s98 of the Civil Procedure Act 2005. Section 98 provides as follows: " Courts powers as to costs (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and ….. 4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to: (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, (d) such proportion of the assessed costs as does not exceed a specified amount." 75 Under s 98(4)(c) there is power to limit the costs by fixing the amount instead of allowing them to be assessed. In Sherborne His Honour Mr Justice Palmer referred to this power. His Honour discussed the section in the following terms: "39. The purpose for which Mr Lindsay seeks to use CPA s.98(4)(c) is not the purpose for which it has been used so far, according to the authorities. In the usual case in which the power is exercised it is the successful party which seeks to avail itself of the power in order to avoid the expense and delay of a costs assessment. Here, Mr Lindsay, on behalf of an unsuccessful party, seeks to use the power against the successful party - not to avoid the delay and expense of a contest before the assessor but in order to cap the costs of the trial itself.

40 There is no justification in the words of the CPA for restricting the use of s.98(4) to circumstances in which it has been used in the past: indeed, such an interpretation would be contrary to the mandate in CPA s.56(1) and (2) which obliges the Court, in interpreting any provision of the CPA or the UCPR, to give effect to the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in dispute.

41 However, large though the power given by s.98(4) is, it must be exercised judicially: i.e., the exercise of the power must have a proper factual foundation and must be explicable according to legal principle.

42 It is conceivable that the Court could exercise the power under s.98(4)(c) on the application of an unsuccessful party in making a final costs order so as to cap a successful party's recoverable costs where the Court considers that the successful party's costs are grossly excessive. In Jvancich (supra) the Court of Appeal did not rule out the making of a capping order in any circumstance: see per Giles JA at para [6]. But such a capping order would be very rare: the Court's decision would have to be an informed one, i.e. founded on a consideration of the costs actually incurred, the circumstances at the time at which they were incurred, whether they were reasonable in those circumstances, and what would have been a reasonable amount to have incurred.

43 There is a high risk that readily allowing an unsuccessful party to make a costs capping application under s.98(4)(c) will prolong the battle between the litigants at greater expense and with longer delay than if the successful party's reasonable costs were estimated by an assessor in accordance with the Legal Profession Act" . 76 It should be appreciated that type of capping order which I am discussing is one which does not affect the costs as between solicitor and client. There is of course a power in the court in the exercise of its supervisory jurisdiction to limit the costs which might be payable by a client. See Woolf v Snipe (1933) 48 CLR 677 at 678 and Johnson Tiles Pty Ltd v Esso Australia Ltd (1999) 94 FCR 167. In the present case there has been no request by the plaintiffs to restrict their costs and there is no information before me about the retainer which they may have entered into with their solicitor. 77 In the absence of any restriction on the amount that the solicitors may charge the client plainly if there is a capping order to limit the amount which the plaintiffs can recover from the estate any amount of any award which they receive will be depleted by the amount which they have to pay over and above the costs they have recovered from the estate. 78 In the present case there are three claimants for the funds which remain and each of the claims have to be assessed. If there is no capping order then the fund is smaller and the court will have to look at that smaller fund and allocate it among the three claimants having regard to the strength of their claims. It would not be appropriate for the court to make an assessment in favour of one person in a more generous manner because it considered that the other parties' costs were excessive. The court should either cap the costs and increase the fund or simply carry out the exercise based upon the remaining fund in the way I have indicated. 79 In the present case it is plain that all parties have incurred substantial costs. Although the plaintiffs' costs are substantially more than the defendant's costs the extent of the defendant's costs indicate the amount of work involved in the case. There is no information before me of the detail of the costs other than the split between the professional fees and disbursements and counsel's fees. This information is insufficient for me to determine whether or not the charges are excessive. 80 In the circumstances I will not cap the costs and will assume in this case that the fund remaining for provision between the claimants is a sum of $300,000. 81 Edward is a person who has some difficulties and faces a slightly reduced life expectancy. He has transferred some of his superannuation to his wife and his desire to provide for her is understandable considering his illness. 82 However, the lifestyle which Edward and his wife have enjoyed over the last two years has been enhanced by a number of trips overseas. They have in fact spent some $68,000 on overseas trips and this obviously has a detrimental effect on Edward's asset position. He suggests that he was obliged to do this because during his marriage he was away as a merchant seaman for a large part of the time and he promised his wife he would make up for his absence one day. This may be admirable but it does not avoid the consequence that the court should regard the current needs which he has put forward with some scepticism. If he was the only claimant on the estate there might be some basis for providing a mobile home but in the context of this estate it is not appropriate. I accept that it would be desirable for him and his wife to move if that is their desire and it does appear that their present neighbourhood is not a particularly nice one. They may have to choose between this or improving the quality of their lifestyle with travel around Australia. 83 Pamela is probably the most needy of all the claimants. She needs to discharge her mortgage which unfortunately will not solve the difficulty with her expenses but it will help. She needs a fund to supplement her income and to provide for her retirement. She has not been able to obtain extensive superannuation such as is available to the defendant and her husband. 84 It is suggested that the defendant and her husband were in a stable financial position and they had a surplus of income. Although on the figures this is the case they do have mortgages to meet and they appear to live a modest lifestyle. In contrast to Edward they have not had a holiday for some time other than a camping holiday since 2004 and they drive a 7-year-old car. 85 In my view I think it is appropriate that Edward receive a legacy of $60,000 and Pamela a legacy of $140,000. 86 The orders I make are as follows: 1. I order that Edward Thomas Lawrence receive a legacy of $60,000 out of the estate of the deceased. 2. I order that Pamela June Hay receive a legacy of $140,00 out of the estate of the deceased. 3 Interest is to be payable on the legacies at the rate provided for under the Wills Probate and Administration Act from a date three months from today's date if the legacy is not paid by that date. 4. The plaintiffs' costs on the ordinary basis and the defendant's costs on an indemnity basis be paid or retained out of the estate of the deceased. **********

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