Monday 3 May 2010
McCARTHY v McCARTHY
Judgment
1 YOUNG JA: This is an appeal from a decision of Associate Justice Macready who made an order for provision under the Family Provision Act 1982 in favour of the respondent, granting him a legacy of $400,000.
2 The deceased, William Charles McCarthy, died on 14 November 2004, aged eighty-seven years, though the primary judge erroneously said seventy-seven. The deceased who had been incapable of making a will from at least 2002, died intestate, his whole estate passing to the appellant, his only biological son. The appellant obtained a grant of letters of administration unopposed, on 6 March 2007.
3 The respondent is a stepson of the deceased. His mother, Evelyn, married the deceased in March 1973. It was the deceased's third marriage. The respondent had been born in April 1967 so that at the time of the marriage he was about six years old. The marriage broke down in 1981 and the spouses separated and the respondent departed from the deceased's home where he had lived for eight years and went to live with his mother.
4 The respondent successfully completed an apprenticeship in the automotive mechanics and boiler making profession. When he became twenty-one in 1988 he received a cash sum of $20,000 from the "Gregory's Trust", which the deceased had set up for his benefit.
5 The respondent married in 2000. He is now forty-three, though the primary judge noted that he was fifty-four. He and his wife have twins, a boy and a girl aged eight. I will note his assets later. The deceased died with an estate whose value is estimated at about $3 million, though the primary judge made no precise finding on that subject.
6 The costs of a three day hearing at first instance was said to have amounted to $450,000. It would not necessarily be a safe assumption that costs of that magnitude in a relatively simple case would be allowed by a cost assessor; I merely note the figure.
7 The appellant says that the primary judge ought to have made a more modest order, perhaps a nil order, on the basis that the respondent is a rich man himself. He was only financially dependant on the deceased for eight years as a child, almost thirty years ago. He also says that factual errors made by the primary judge also provide reasons for setting aside the order that was made.
8 The respondent says that while there were factual errors in the judgment, they were really typographical or minor and did not effect the result. He also says that where there is, like the present case, a large estate with a limited number of claimants, the court is entitled to apply the legislation with a more broad brush approach, than it might, in cases where the assets are small and the claimant's many.
9 On this appeal Mr P Hallen SC appeared for the appellant and Mr P M Jeffriess of counsel for the respondent.
10 There is no doubt at all, and indeed it is conceded there was a bond of affection between the deceased and the respondent. During the time they lived together the respondent called the deceased "Father". The relationship continued after the respondent's parents separated, as shown by the greeting and birthday cards in evidence. Furthermore, in recent years the respondent has spent time caring for his stepfather. As the judge found, the deceased and the respondent treated each other as father and son throughout their life. However, on the other hand, it is also clear that the respondent did nothing or virtually nothing to contribute to building up the deceased's estate.
11 The affection of the deceased to the respondent is further shown from the fact that in 2002 the deceased made three wills, each prepared by a solicitor. It is common ground that the deceased did not have testamentary capacity at the time. Each of the wills provided for the respondent to take at least one-third of the estate.
12 Mr Hallen says that these wills must be completely disregarded. The respondent says that even though they were made by an incapable person, they at least show that the deceased wished to benefit the respondent and that the deceased should not be classed as a person who wished to die intestate with the statutory consequences.
13 I would agree with that submission. It seems to me that cases like In re Park dec'd; Park v Park [1954] P 112 show that even though a person may not have testamentary capacity, one does not completely consider that person as a person who is deprived of willpower up to a certain point. In my view the fact that the wills were made does assist in putting together the relationship between the parties and the claims that the respondent has on the deceased's estate. This is reinforced by the deceased's unchallenged statement in the 1990s, that he intended to leave his two sons equal shares with something going to charity. Again, one does not look at that as some sort of testamentary promise but it reinforces the other evidence. However as this point was not really debated below, I do not think it would be proper to make it a key plank in my judgment, and I do not do so.
14 The notice of appeal contains thirteen grounds of appeal, grounds two, three and six have now been abandoned. Ground one complains of various errors, however the most significant error appears to be that if the primary judge really based his decision on the respondent being fifty-four, he may have become confused when considering whether the respondent had adequate superannuation.
15 There is no doubt at all, and indeed it is conceded, that the respondent is an eligible person and that ultimately it was conceded that there were factors warranting the making of an application. Originally it would seem that the appellant sought to say that there was no jurisdiction to make an order at all, however, in oral submissions, Mr Hallen properly conceded that the appeal was really an appeal on the quantum of the award.
16 The appellant says that when one looks at the assets one can see that this was a case of a relatively wealthy plaintiff whose needs were relatively small because of his own assets.
17 Again, it is difficult to see exactly what value to place on the assets of the parties involved. Although the appellant says that the primary judge should have found a greater figure, he found that the respondent had assets of about $1,700,000, he had a steady job with an income, as at 2007, of $1,433 per week. In addition he then earned, and probably still does, $49 per week as a union delegate and had rents of $240 a week and only had minor health issues. He had one debt of $231,083. He asked the primary judge to award him a legacy of $450,000 to repay this debt and principally to renovate his house.
18 The respondent is his mother's only child. The mother has a grazing property at Quirindi, which she owns as joint tenant with the respondent. She also holds half the shares in a company, Damileaton Pty Limited, which owns a grazing property at Singleton. Again, the respondent owns the other one half of the company. The mother works as an account's clerk. The properties have been carried on at a loss in the recent past.
19 The respondent's mother is now sixty-seven, though the primary judge said that she was fifty-six. That, as I will say later on, is a matter that causes some concern because when evaluating what are the respondent's financial prospects, the likelihood is that he will some day succeed to his mother's assets and indeed, where he holds those assets as joint tenants with mother, that is assured.
20 The appellant also is a successful man. He is now retired and caring for a sick wife and his own health is not good. His assets are about $1.9 million and his income, as at 2007, much the same as that of the respondent. However, in this sort of case the assets of the appellant are of lesser significance. So long as he complies with community expectations and what is sometimes called "moral duty", the deceased is able to leave his property as he wishes.
21 Mr Hallen says that the primary judge made a series of errors. Unfortunately it is true that there are errors in the judgment. However, it seems to me that only two are significant and that is the ages of the respondent and his mother. The respondent says that the errors are really in the nature of typographical errors and do not really affect the way in which the judge decided the case and points out, that although he does misstate the ages, it is clear that he was fully aware of when the respondent was born, so that it may just be that it is typographical.
22 So far as the respondent's age is concerned, the significance is that the primary judge focused on it in para 49 of the judgment when talking about the respondent's needs as to his superannuation, then in para 55 of the judgment said that that superannuation was not substantial, having regard to his age. Again there is a bit of doubt here because in neither paras 49 nor 55 did the judge state the age and one does not know whether he is referring back to his mistake as to fifty-four or as to the birthday, which was noted earlier.
23 As far as the mother's age is concerned, the only significance is that the primary judge may have thought that the respondent would succeed to her assets eleven years later, than was in fact the case.
24 There are other errors admittedly made in the reasons for judgment of the primary judge such as the value of a motor vehicle, but to my mind there is no point in dwelling further on these as they make no difference to the result.
25 I should say at this stage that the court would expect that when a judgment is produced, probably because of the stresses of a busy list, which contains obvious errors, it is the duty of the lawyers involved to go back to the judge within the time for appealing and point out the problems and get them rectified rather than having them used on appeal because it is far cheaper, and so in the interest of the parties, to have such errors corrected at first instance.
26 Passing on to the appeal, Mr Hallen says that the respondent should have received close to nil, but, in any case, not more than the $231,083 necessary to repay his debt.
27 Mr Hallen says that it is to be observed that in this case, as distinct from other cases involving stepchildren: