Lillis v Lillis [2010] NSWSC 359 | Case summary

2009/00287676 JOHN ANTHONY LILLIS v DAVID JAMES LILLIS JUDGMENT 1 HIS HONOUR: Before me are proceedings under the Family Provision Act 1982 ("the FPA"). Joan Irma Bailey, the testator, had two sons, John Anthony Lillis born 29 September 1942, who is the plaintiff, and David James Lillis born 15 August 1945, who is the defendant. The testator was married first to the father of the plaintiff and the defendant, who died in 1949. She commenced a de facto relationship with Basil Keith Bailey in 1953 and they were subsequently married about 1985. He died on 12 September 2000. The testator made her will on 26 February 2003. She died on 3 April 2008. Probate of her will was granted to the defendant on 23 June 2008. 2 The provisions of the will were that the defendant was appointed executor and given the whole estate. In effect the sole asset of the estate was 87 Geoffrey Road, Chittaway Point, now valued at about $300,000. It has been transmitted to the defendant, who is now the registered proprietor. 3 The plaintiff was married to Yvonne Helen Lillis, born 30 July 1943, in 1967. In 1971 they had a son and in 1973 a daughter. The defendant was in January 1971 married to Jennifer Margaret Keyes. They separated about 1974. The defendant in 1976 entered into a de facto relationship, of which there were three children, now adults. The defendant now lives by himself in a house he owns at 129 Geoffrey Road, Chittaway Point, near his mother's house. From 1992 he was on workers' compensation. In 2001 he entered into a lump sum settlement of $444,000. Both the plaintiff and the defendant have multiple health problems which may need further treatment, including operative treatment. The defendant is approaching the time he will need to live somewhere where care is available. 4 The plaintiff and his mother had a reasonably close mother/son relationship up to the year 2000. Thereafter there was a rift between them. The plaintiff did not attend Keith Bailey's funeral in 2000. There was little contact between the plaintiff and the testator up to the testator's death in 2008. There was a face to face meeting between them in 2003 but this did not lead to a reconciliation. I do not accept on the evidence that there was any agreement, certainly in effect after 2000, as to the defendant paying money to the plaintiff, nor do I accept that the defendant coerced the testator to make the 2003 will. 5 After 2000 the defendant assumed the care of the testator and saw her virtually daily. He spent money from his workers' compensation settlement on 87 Geoffrey Road, Chittaway Point, after she had bought it. 6 The assets of the plaintiff and his wife are as follows: Villa unit at Baulkham Hills registered in joint names $580,000.00 Money held on deposit - plaintiff $5,141.00 Moneys held on deposit, Yvonne $6,748.00 Motor vehicle 2004 Toyota Camry $9,000.00 Furniture $10,000.00 488 Commonwealth Bank of Australia shares held by Yvonne at $59.27 per share $28,923.76 7 The plaintiff has the benefit of a superannuation fund with Asgard, the balance of which is $695,116. The plaintiff and his wife have no liabilities of significance. Their income is from Centrelink aged pensions of $231.12 per fortnight each for both the plaintiff and Yvonne. 8 As to the plaintiff's needs, which he contends should be satisfied from the testator's estate, he refers to a desire for money to travel around Australia and to Canada and Alaska. Asked about the basis of his claim on his mother's estate he said: "I think I have an entitlement to my mother's estate." His counsel puts the plaintiff's claim under the FPA as a legacy of $80,000. 9 Leaving out of account the testator's house, which has been transferred into his name, the defendant's assets are as follows: 129 Geoffrey Road, Chittaway Point $300,000.00 Balance of Westpac One Main account $46.07 Balance of term deposit with Bankwest $40,000.00 Moneys in solicitor's trust account to cover the costs of these proceedings $30,000.00 Cash to cover payment of various bills and living expenses $7,000.00 10 He has no present liabilities other than $960.73 owing on credit cards. He has no present income, although he will become entitled later this year to an aged pension. He is contemplating selling both his own house and that inherited from his mother's estate to finance the purchase of accommodation in which he can be provided with care. 11 The testator was not silent as to the reasons for the dispositions of her 2003 will. In a statutory declaration made on 26 February 2003 she referred to her estrangement from the plaintiff and to the fact that "he is well provided for". 12 As to the law, a majority of the High Court (Mason CJ, Deane and McHugh JJ) said in Singer v Berghouse (1994) 181 CLR 201 (at 208 - 209) that the court in determining an application for provision under the FPA is required by ss 7 and 9 to carry out a two stage process. The first stage requires a determination "whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life." The second stage, which arises if that determination be made in favour of the applicant, is "to decide what provision ought to be made out of the deceased's estate for the applicant." The determination of the first stage "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." The correct view of the first stage is that the question is strictly one of fact, notwithstanding that it involves the exercise of value judgments. 13 The second question involves an exercise of discretion in the accepted sense, although that discretion must, of course, be exercised judicially. That majority of the High Court disapproved the use in determining these questions of reference to the concepts of "moral duty" or "moral obligation", or even the use of those terms, since this might be thought to place a gloss upon the statute. Whilst there has been some debate as to whether or not that view was an obiter dictum only, the Court of Appeal has since determined, despite the eloquent dissent of Handley JA, that that expression of opinion ought be taken in this Court as the binding view of the High Court upon this subject matter: see Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24; Massingham v Massingham NSWCA 27 June 1996 unreported. 14 The matter was revisited in the High Court in Vigolo v Bostin (2005) 221 CLR 191. Gleeson CJ at [25] doubted that there was any vice in references to "moral duty", provided it was regarded as a form of shorthand and not allowed to operate as a gloss upon the statute. Gummow and Hayne JJ in their joint judgment at [73] thought it "better to forgo any convenience that these shorthand expressions may offer in favour of adherence to the relevant statutory language." All three of those Judges, constituting a majority of the High Court, shared the view that Singer v Berghouse should be taken as an appropriate guide to the construction and operation of family provision legislation: see [5] and [73]. 15 The present situation was summarised in the Court of Appeal by Basten JA in Diver v Neal [2009] NSWCA 54 at [13]. In addition to the other factors to be taken into account his Honour said that it is now well-established that consideration of the adequacy of the provision made by a deceased person will require, in addition to other familiar factors, "reference to community standards". 16 I have approached the matter as prescribed in Singer v Berghouse. This being a claim of an adult child of the testator, I shall simply carry out the two stage process in relation to the plaintiff in the context of this family and this estate. The appellate Courts have negatived that there is any "special" test or approach to the process in the case of adult children, as opposed to other persons with a claim: see Hughes v National Trustees Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134; Hunter v Hunter (1987) 8 NSWLR 573; Vigolo v Bostin supra at [26]. 17 The proper approach to a claim by an adult child received close consideration by Bryson J in Gorton v Parks (1989) 17 NSWLR 1. His Honour (at 10) regarded "the bare fact of paternity" as of very great importance in "morality" (using that word before the subsequent strictures of the High Court). But, as to the fact bare fact of parenthood, without detracting from what Bryson J said, it must be remembered that Meagher JA had previously said in Hughes v Hughes NSWCA 6 June 1989 unreported, that the duty to make provision arose in the circumstances of 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." 18 In Walker v Walker NSWSC 17 May 1996 unreported, Young J, as his Honour then was, conducted a compendious review of the authorities relating to estranged parents and children and said: "…. 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. Although it is not much mentioned in recent decisions, the older authorities often mention the fact that the Act did not intend to affect freedom of testation except in so far as that freedom had to be abridged in order to ensure that people made proper provision for those who were dependent on them financially or morally: see for instance Scales ' case [ The Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9] at 19."

In Day v Perpetual Trustee Co Ltd [2001] NSWSC 394 at [27] Master Macready, as his Honour then was, adopted that formulation of Young J as "sufficient and appropriate" to guide him in the decision of a similar case. I do the same. 19 The time at which adequacy or inadequacy is to be judged is the time at which the Court is determining whether or not to make an order: see s 9(2). 20 The defendant says that the plaintiff does not meet the requirement of the first step in Singer v Berghouse by demonstrating that he was left without adequate provision. Here is a plaintiff who with his wife has three times the assets of the defendant (omitting the property received by the defendant from the estate). The plaintiff and his wife have satisfactory accommodation, are generally adequately provided for and have a reserve fund in his superannuation, from which, if need be, sums such as $50,000 or $100,000 can be extracted. The defendant, on the other hand, has no present income, has no reserve fund and has a need for re-housing to meet his need for care. The amount of the estate is small, especially after allowing for the costs of these proceedings. 21 I also bear in mind the principle that freedom of testation should not be disturbed except as demonstrated to be necessary. I do not ignore the tie of blood nor the parent/child relationship that subsisted between the testator and the plaintiff up to 2000. 22 However, the factors that I have set out above, viewed in all the circumstances of this case, lead me to the conclusion that I should determine the first stage of the two-stage process by finding that the provision for the plaintiff was not inadequate for his proper maintenance, education and advancement in life. That finding concludes the matter and must lead to the dismissal of the proceedings. 23 I have subsequently heard argument as to the order that should be made for costs. Mr Townsend, of counsel for the defendant, has usefully referred me to the recent decision of Palmer J in Carey v Robson [2009] NSWSC 1199, where his Honour discussed at length the present law in New South Wales as to the costs in FPA proceedings and, indeed, the change in the policy approach of this Court to those costs over the years. It is now more common than once it was for an unsuccessful plaintiff simply to be ordered to pay the defendant's costs of the proceedings. However, his Honour in [7] cited a long passage from the judgment of Barrett J in Moussa v Moussa [2006] NSWSC 509. That included a citation by Barrett J from Palmer J in Re Sherborne Estate No 2; Vanvalen v Neaves [2005] NSWSC 1003: "A decision whether a Family Provision Act claim fails or succeeds produces a black and white result which often belies the fact that the case was borderline and could have gone either way." 24 Barrett J continued in [10] that it was by no means unreasonable for the plaintiff's legal advisers to believe that the claim had reasonable prospects of success. His Honour took the view that in those circumstances the overall justice of the case warranted the conclusion that no order for costs should be made against the plaintiffs. 25 Mr Tregenza, of counsel for the plaintiff, put a complex argument based upon the construction of s 33 of the FPA, but I do not find it necessary to deal with that submission. Mr Townsend submitted that this was not a borderline case, that it was a case where in the end the defendant clearly won because, among other considerations, of the very considerable preponderance of the plaintiff's assets over the defendant's assets. 26 That certainly in the end was an important factor. Nonetheless as the Judge who decided the case, I should say that, whilst I came to a reasonably firm conclusion in the end, it was a case where along a large part of the way I felt it was a case that could go either way. I regard it as by no means unreasonable for the plaintiff or the plaintiff's legal advisers to have believed that the claim, particularly as moderately and sensibly put on the plaintiff's behalf in this case, had reasonable prospects of success. 27 Mr Townsend has said that the plaintiff and his wife are comfortable. In one sense they are, but in another sense they are not largely well off. I have already adverted to health problems and there are other calls that there well may be on their assets as time goes by. It is not a case, as was Carey v Robson, where there were very large assets and, in particular, the plaintiffs were very well off. 28 I should say at once, lest anybody wonder afterwards, that the other distinction between this case and Carey v Robson was that in that case Palmer J was critical of the moneys that had been spent and the manner in which the case had been conducted, particularly on the plaintiffs' side. There is no such criticism of either side in this case and, unlike a lot of FPA cases that one sees, it has been moderately and sensibly conducted on both sides. 29 The conclusion that I have come to is that, bearing in mind the considerations I have set out, the overall justice of the case will be met if I do not order the plaintiff to pay the defendant's costs but instead order that there be no order as to costs. It is not necessary to make a special order that the defendant have his costs out of the estate, since on the result which has been produced the defendant is and will continue in possession of the whole of the estate. 30 The orders of the Court will therefore be that the plaintiff's claim is dismissed and I order that there be no order as to the costs of the proceedings. I order that the exhibits may be returned.

Lillis v Lillis

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