(2012) 81 NSWLR 656
Barlevy v Nadolski [2011] NSWSC 129
Crabtree v Crabtree [1964] NSWR 1178
(1994) 181 CLR 201
Slack v Rogan
Palffy v Rogan [2013] NSWSC 522
Source
Original judgment source is linked above.
Catchwords
(2012) 81 NSWLR 656
Barlevy v Nadolski [2011] NSWSC 129
Crabtree v Crabtree [1964] NSWR 1178(1994) 181 CLR 201
Slack v RoganPalffy v Rogan [2013] NSWSC 522
Judgment (3 paragraphs)
[1]
Solicitors:
Leanne White Solicitors (Plaintiff)
Stacks Law Firm (Defendant)
File Number(s): 2014/279135
[2]
Judgment
HIS HONOUR: This is an application under the Succession Act 2006 (NSW) by a person who claims to be either the de facto spouse or a person with whom the testatrix was living in a close personal relationship at the time of her death, or was otherwise an eligible person to make a claim on her estate. The testatrix is Diane Marjorie Green, who died on 12 May 2014, having first made and published her last Will and Testament on 1 July 2011, Probate of which was granted to her twin brother, the Defendant, on 5 August 2014.
The Plaintiff filed his Summons on 23 September 2014 and so is well within time for making an application.
I heard the application on 7 and 8 December 2015, together with evidence from 14 witnesses, and apart from one lay witness and two solicitors, all were cross-examined. Mr G Rundle of Counsel appeared for the Plaintiff, and Mr R Colquhoun of Counsel appeared for the Defendant. At the end of the hearing I said that I thought that it was desirable for me to reserve my judgment and to consider more deeply some of the matters that Counsel had raised with me.
Before dealing with the facts of this case I should state that in what I was told was the current practice, production of a Court Book was dispensed with. Unfortunately, this order seemed to give the impression that other parts of the usual order for hearing were also dispensed with. Thus I received no list of objections to affidavits three days before the hearing. Counsel attempted to put forward some objections at the commencement of the hearing, but in accordance with my usual practice, I declined to accept them.
The reason for the usual order for hearing is that a lot of time can be spent on the first day of a hearing by reading affidavits and dealing orally with objections. I, and I believe many other judges, spend a couple of hours in the three days before the hearing looking at the objections and making preliminary rulings which are then announced at the beginning of the trial. If lawyers do not comply with this requirement then I do not see why the client should pay the costs of the waste of hearing time. Particularly this is so as many of the objections, whilst technically correct, are of little value. Thus it is of no value to object to a statement in an affidavit summarising a document on the basis that the document speaks for itself. Very rarely are the summaries not a correct summary of the document. Everyone knows the document speaks for itself and if there is any conflict between the document and the summary, the document will be preferred. It is really a waste of time making that objection over and over again as is quite common in this sort of case.
Accordingly, technically, a whole lot of inadmissible material was in evidence, like "I have seen the testatrix and the deceased on seven occasions. I formed the opinion that they were a de facto couple". When this sort of evidence was given I merely disregarded it unless there was actual evidence of the objective observations that the particular witness had made that formed the basis for his or her opinion.
The testatrix was born on 6 January 1948 and was aged 66 when she died.
The Plaintiff is now 50. He obtained an Associate Diploma of Civil Engineering from the University of South Australia. Prior to 2002 he worked with the Great Lakes Council as an engineer/designer and surveyor.
The Plaintiff claims that he became disabled in 2002. He says that his principal problem is that he suffers from Chronic Fatigue Syndrome. He has not been in paid employment since 2003.
The Plaintiff claims that between 2003 and the testatrix's death he was in a domestic relationship with her. Alternatively, that he was in a de facto relationship with her. The testatrix's estate was said, for Probate purposes, to be $1.64 million. The principal asset is her home in the Forster area, said to be worth $552,000.
The Will essentially provided for the deceased's two nieces, Ms Moira Kendall and Ms Georgia Shotton, to receive 40% of the estate, and the deceased's brother, the executor, to receive 60%.
Since Probate has been granted, the estate has been depleted. There has been a partial distribution of $157,960, 60% of which passed to the executor and 40% to the two nieces, and the houseboat, about which I will refer shortly, which was probably joint property, has been acknowledged by the executor to now be solely the property of the Plaintiff. This makes the amount still available in the estate at $704,000, including the house worth $552,000, and $152,000 otherwise.
A lot of the costs have already been paid but the solicitors are claiming a further $156,000. The costs do appear to be extravagant, but, if they are all allowed by a costs assessor, it would seem that all the ready funds will be eaten up. Indeed, they will probably be eaten up in any event because there is a tax liability for Capital Gains Tax of $19,000. If all these costs and the tax liability are taken into account, the estate only has $529,000, and the house will either have to be sold or, alternatively, beneficiaries fund the deficiency.
Section 59(1) of the Succession Act 2006 (NSW) provides that the Court may, on application:
"… make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that:
(a) the person in whose favour the order is to be made is an eligible person, and
(b) in the case of a person who is an eligible person by reason only of paragraph (d), (e) or (f) of the definition of 'eligible person' in section 57 - having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the application, and
(c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both."
The Plaintiff says that he is an eligible person on one or more of three possible grounds. Section 57(1) sets out six categories of eligible persons and the relevant categories for present purposes are (b), (e) and (f), which are as follows:-
"(b) a person with whom the deceased person was living in a de facto relationship at the time of the deceased person's death,
…
(e) a person:
(i) who was, at any particular time, wholly or partly dependent on the deceased person, and
(ii) who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased person was a member,
(f) a person with whom the deceased person was living in a close personal relationship at the time of the deceased person's death."
The Plaintiff would prefer to succeed under paragraph (b) because s 59(1)(b) does not apply to eligible persons in category (b), whist it does apply to category (e) and category (f).
The majority of the witnesses who were called, gave evidence on this issue. As is not unusual in this sort of case, the team of witnesses who were called by the Plaintiff tended to support the de facto relationship and those called by the Defendant tended the other way. I do not think that any of the witnesses sought to mislead me. However, each only saw part of the picture. Further, people have a tendency when they see a man and a woman living in the same house, and who appear friendly to each other and attend functions together, to assume that there must be a deeper and, perhaps, sexual relation between them, and convince themselves that this is the case.
It must be remembered that it is impossible to place human relationships into neat little boxes. A de facto relationship may involve two people committed to each other who act towards each other in the same way as a de jure husband and wife. However there will be borderline cases where there is a lesser manifestation of commitment.
The Court of Appeal's decision in Light v Anderson [1992] DFC 95-120 and my decision in Markulin v Drew [1993] DFC 95-140 are good examples where a relationship between a man and a woman which commences as landlady/lodger, or housekeeper/householder, or confidential employee/employer becomes more personal and involves the parties sleeping together, at least from time to time. It is difficult to generalise about those situations because each case depends on its own facts but they are truly described in the authorities as "borderline cases".
When making a finding of fact, Courts have to be aware of the fact that people have their good days and their bad days. It is possible that on a bad day a witness will hear the propositus say "oh he or she is just a boarder", or "oh she's only my secretary", yet that is merely the temporary, depressed thought of the propositus. In the instant case there was evidence that the testatrix did say to some people "oh he's just a boarder" and that has some significance, but I have discounted it for the reason I have just given. Likewise, experience shows that whilst the evidence of friends and relations of both sides of a record is useful, people often form opinions about other people on too slender an evidentiary base and it is usually, and it is so in this case, more important to look at any corroborative evidence, than documents or completely independent people, about the relationship.
There was some evidence, which I accept, as it came from conversations Mrs Casey had had with the testatrix that the parties had had sexual relations, on probably two occasions but they had not continued because they both found it unsatisfactory. Mr Rundle put that this evidence showed that there was a de facto relationship and that the evidence to show that it had ceased was insufficient to make me assume that the relationship had ceased.
I do not accept either branch of this submission. Paragraph (b) requires there to be a de facto relationship at the time of the testatrix's death. The fact that there had not been a sexual relationship for some years, linked with the assertions of the Plaintiff being a single man before a series of doctors and Centrelink, and the fact that the testatrix asked her solicitor to prepare a domestic relations agreement, all point to the fact that if there had been a de facto relationship at some stage, it did not exist at the date of the testatrix's death.
In the instant case, it was unusual that there were no birthday cards or Christmas cards or letters from the testatrix put forward by the Plaintiff at all. Counsel for the Plaintiff tried to minimise this by telling me that he had never sent a Christmas card to his wife, but I must confess if that were true, it did not make me discard my thought that it was unusual that there was nothing there. The closest one got to this type of evidence was a series of photographs that were taken by relatives.
There were a number of documents from Centrelink Forster before the Court because the Plaintiff had been on various benefits from 2003 onwards. In almost every document the Plaintiff is described as being "single" or the box for a person to tick whether he or she is single or married has been ticked in the single section. The Plaintiff tried to escape from the consequences of this by saying that someone else had filled out the form because he was too sick and he merely signed it without reading it. I did not accept this evidence. The Plaintiff was cross-examined and I found him tackle his cross-examination very shrewdly. He would cavil with Counsel's questions and if they were at all inaccurate, seek to evade them. He gave the impression not of a person who is so sick that he cannot understand forms, but rather a person who was the intellectual equal of the Counsel who was cross-examining him.
Whilst it is quite possible that every so often someone filling in a form for somebody else will make a mistake, when there are a large number of forms that were filled in which are part of the exhibits in this case, they all say that the applicant is single, it is very hard to convince a judge that they are all mistaken.
This evidence was complemented by the medical records. Virtually every medical record (I think there were three exceptions) said that the Plaintiff was a single man. Again the Plaintiff endeavoured to say that one psychologist was so against him that he was making mistakes all over the place, and that other doctors had made mistakes, but again, when virtually every doctor makes the same mistake, one wonders. Of course one knows that often one doctor copies the history from another doctor's report, at least to a limited extent, but even so, the fact that every doctor makes the same sort of mistake is hard to explain away.
Then, the parties clearly occupied separate bedrooms. The original explanation for this was that one of them obtained a sleep apnoea machine and that caused the parties to sleep in separate quarters. That did not seem credible as most sleep apnoea machines are not particularly noisy. Another explanation given was that the Plaintiff snored. That is more credible but it did not seem to be the explanation that was primarily relied upon. The third explanation, which was put forward by Mrs Casey, was that when she asked the testatrix whether she had had sex with the Plaintiff, the testatrix replied that she had on two occasions but it was not satisfying for either of them so they didn't continue.
The onus is on the Plaintiff to prove that there was a de facto relationship and it seems to me that in view of the factors that I have just mentioned, particularly the constant denial to Centrelink that he was other than a single man, he has not satisfied the onus of proof.
I now pass to the consideration of paragraph (e).
Paragraph (e) of the definition of eligible person requires a plaintiff to establish two things. One, that he was, at any particular time, wholly or partly dependent on the testatrix; and two, that he was at that particular time, or at any other time, a member of the household of which the testatrix was a member.
Under the first limb the Plaintiff must show that he was dependent on the testatrix. Dependence might be either financial or emotional dependence. There is no satisfactory evidence that the Plaintiff was financially dependent on the testatrix. He had his own room, he had his pension from Centrelink, indeed, he was paying rent to the testatrix. It is the case that the testatrix did provide financial benefits to the Plaintiff in that she paid for his trip to go with her to Adelaide or to Cairns but this is not enough to establish dependence. The fact that an employer pays money by way of wages to a domestic employee or even gives her money to go on holidays does not necessarily mean that she is dependent on him. I followed that thought in Markulin v Drew.
Furthermore, there is not enough evidence to establish that the Plaintiff was emotionally dependent on the deceased. Accordingly, the first limb, to my mind, is not established on the balance of probabilities.
This makes it unnecessary to look at the second limb. Here again the Plaintiff has problems. As the older authorities show, the words are not "in the household" but "of the household". Thus to show that one was a mere boarder is not sufficient. Needham J held this as long ago as 1989 in Moloney v Goodwin (Supreme Court (NSW), Needham J, 8 January 1989, unrep) though his Honour also recognised that being a boarder did not disqualify a person from being of the household if one could see that the personal relationships that had developed had become much closer.
In Markulin v Drew counsel for the estate endeavoured to distinguish between what he called a "star boarder", that is where the landlady permits the boarder to have sex with her every so often, which would not be within paragraph (e)(ii), and a mistress who was also a landlady.
Mr Rundle cited in opposition to that thought, Dridi v Fillmore [2001] NSWSC 319, a decision of Master Macready, and Barlevy v Nadolski [2011] NSWSC 129, a decision of Slattery J approving it. With greatest respect, I cannot see how either of those decisions can be supported on the wording of the section, but in any event they are contrary to what Needham J decided in 1989. It may well be that these decisions came about as a result of what I call inadequate computer research. That is that counsel who presented cases to those judges contented themselves with looking at their computers which, of course, ignores any decision decided before the date on which the computer's collection of cases commenced. This tends to mean that judges are not appraised of other decisions before that date and often it gets worse in that both Counsel say that there are no decisions of relevance.
The older cases, some of which I will review when dealing with paragraph (f), emphasise that one must not only be in the household of which the testatrix was a member, but of the household, that is a person shares the mutual obligations that fellow members of the family or extended family recognise that they have to one another. The same idea, of course, goes through the thought that one must be of the household, not just of the house, see eg Oakes v Oakes [2014] NSWSC 1312, at [3], where Pembroke J says "living in the same household connotes some element of frequency of contact, some element of mutual support and some element of community of resources". I followed that line recently in Miller v Ryan; Payne v Ryan [2015] NSWSC 1713. It may be that the Plaintiff could be considered to be a member of the household, it is a borderline case. I do not consider that he has proved his case in this respect, but it matters not because he was not dependent on the testatrix.
Paragraph (f) deals with a situation where the Plaintiff was living in a close personal relationship with the testatrix at the time of her death.
There is little authority on the proper construction of (f). However, when one sees a statute which talks about people living closely together, it is insufficient that the people are just living in the same house.
In Simonis v Perpetual Trustee Co Ltd (1987) 21 NSWLR 677, Kearney J looked at the expression "living together on a bona fide domestic basis" in s 6 of the Family Provision Act 1982 (NSW), which was the corresponding provision to our paragraph (f). His Honour then said that that was a single composite expression of a comprehensive notion and to evaluate it one must look at factors such as the duration of the relationship, the nature and extent of the common residence, whether there was a sexual relationship, the degree of financial interdependence, and other matters which are not relevant to the present case. I have considered those factors, of course, when making my determination under paragraph (f).
In Re Paskin's Will Trusts [1948] 2 All ER 156, a Mrs Underwood put an advertisement in a paper seeking accommodation for herself and her child in return for services as a housekeeper. The deceased hired her and provided two rooms to her. After a while the deceased and Mrs Underwood came to an arrangement by which she and the deceased set up a common home and lived together as one family in complete harmony. After the deceased died, his interest in the house passed to his sister. Disharmony broke out between Mrs Underwood and the sister. The decision in the case is unimportant, but Vaisey J said, at 159, "'Living with a person' implies personal association with that person and is not satisfied by mere proximity or by anything short of personal contact".
In the days when fault was necessary for a divorce, one of the grounds was separation for one year. There were a number of situations where the parties continued to live in the one house after their marriage had virtually come to an end. The authorities such as Crabtree v Crabtree [1964] NSWR 1178; (1963) 5 FLR 307, a decision of the Full Supreme Court of NSW held that husband and wife under the one roof may yet be living separately and apart. What was important was the consortium vitae of the relationship between the parties in which each is committed to each other and does 101 little things that husbands do for wives and wives do for husbands.
The mere fact that the Plaintiff commenced as being a boarder in the testatrix's home would not be sufficient. However, the evidence in this case does go further than that. As I have already remarked, it is unusual in that there does not seem to be any documentary evidence to show affection between the parties but there are photographs of them being together when visiting relatives. There seems little doubt that they visited the testatrix's relatives as if they were a permanent couple and there are wedding invitations and sympathy notes on the passing away of a relative which name "Peter and Di" in the same way as other couples were acknowledged.
In my view, this material is just sufficient to bring the Plaintiff over the line and come within paragraph (f).
However, coming within (f) is not the end of the matter because under s 59(1)(b) of the Succession Act I have to be satisfied that in all the circumstances of the case there are factors which warrant the making of the application.
Again I looked at this matter in Miller v Ryan; Payne v Ryan and there followed what M H McLelland J said in Re Fulop (decd) (1987) 8 NSWLR 679 that "the factors" referred to in the subsection are factors which, when added to the facts which render the applicant an eligible person, give him or her the status of a person who would be generally regarded as a natural object of testamentary recognition by the deceased.
In Markulin v Drew I said that this covers two types of case, first where the relationship between the Plaintiff and the testatrix is very closely akin to one of the relationships in which there is no doubt that the person is an eligible person. So a foster daughter who has lived with the testatrix almost since her birth or a niece who has become an orphan and has been welcomed into the testatrix's home at an early stage, clearly come within the category. However, the purpose of (f) is to catch up those people whom the community would think are persons whom the testatrix would naturally wish to benefit or at least consider whether she could benefit in her Will. As I said in Miller v Ryan; Payne v Ryan, the approach taken in this legislation and in the Family Provision Act was that it was likely to cause problems if the legislation adopted the traditional method of defining discreet cases of eligible persons; it was more appropriate to describe classes. Unfortunately, the definition has to be sufficiently vague to be flexible and this causes problems in cases such as the present.
Accordingly, I have to ask myself: would the community consider that a person who has lived in the testatrix's house, initially as a boarder, but has had some sexual relationships with the testatrix, and then in later years, has accompanied her on holidays and to family events, and has acted as her carer, be kept in mind by the testatrix when making her Will?
My mind has gone back and forth on this question but my conclusion is that although this is a borderline case, the Plaintiff just gets over the barrier.
I should add that the Plaintiff says that he is ill, is unable to work, and is handicapped from doing some manual work and to care for the testatrix as he would like to do. Mrs Kendall, one of the nieces, when giving evidence said that his care for the testatrix was perfunctory and when asked to explain she said that because of his disabilities, he was doing the best he could but the care was a bit rough.
Mr Colquhoun submitted that there really wasn't sufficient evidence to show that there was anything wrong with the Plaintiff. Indeed it was remarkable that the Plaintiff himself did not call any medical evidence. What medical evidence he did tender was in reply to answer the suggestion in the medical reports tendered by the Defendant that he had always claimed to be single. However, the standard of care or attention given is not determinative of the questions that arise in this sort of case; it is the fact of tendering the care.
Accordingly, I find that there are factors warranting the making of the application.
Thus, I now have to consider whether to make an order for the Plaintiff and, if so, for what amount. As White J said in Slack v Rogan; Palffy v Rogan [2013] NSWSC 522; (2013) 85 NSWLR 253, in the light of Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656, there is some doubt as to whether the approach laid down by the High Court in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, at 210, is still technically applicable. Regardless of whether it is or not, it is the sensible way of considering the issue. That is, that one looks to see what provision was made for an eligible applicant and then considers whether, in all the circumstances, the provision was proper.
In the instant case, the only benefit that the Plaintiff received was to succeed as joint owner of the houseboat. There is no proper evidence as to the value of the houseboat, but it would have a value of at least $30,000, perhaps $50,000.
The Plaintiff himself has some substantial assets. As at October 2015, the Plaintiff's assets were: three motor vehicles ($23,000); cash in bank accounts ($95,649.30); personal property ($22,000) (excluding the houseboat); and funds held by Leanne White Law Practice Trust Account on his behalf ($45,155.46). The Plaintiff also discloses $10,407.87 in superannuation, as at 30 June 2015. He receives an income of $430.10 per week by way of a Centrelink Disability Support Pension. He did not disclose any liabilities.
The beneficiaries consist of the twin brother and two nieces. The twin brother does not appear to have any particular needs. One of the nieces, Mrs Kendall, is now suffering from Multiple Sclerosis and will probably not be able to work again. As at August 2015, her assets are cash in bank ($500); superannuation ($22,000); and shares ($3,000). Her assets jointly held with her husband are a property ($945,000); household items ($5,000); and cash in bank ($50). Her husband's assets are a motor vehicle ($39,100); and superannuation ($7,000).
Her annual salary is usually $73,000, however, she anticipates that this will be significantly reduced as she has taken leave without pay. She did not know what her hourly rate was. She also receives dividends of about $100 per annum and $30 per month as a carer's allowance. Her husband's annual salary is about $75,000. She also recently received the sum of $31,592 by way of interim distribution from the estate.
She discloses as a liability her HECS debt ($2,500). Her and her husband's joint liabilities are a mortgage on their property ($490,500); and a credit card debt ($1,250).
Her and her husband's joint weekly expenditure amounts to at least $1,744. She did not include in this amount "Other household expenses and groceries and expenses associated with the children's education". She then provides that all of her husband's and her own income is spent on their weekly expenses. It is difficult to ascertain whether this statement is true, as I am not provided with her updated salary, taking into account unpaid leave, and I am not provided with a monetary value of the last expense.
The other niece's assets, as at August 2015, are a property valued at $290,000; a motor vehicle ($5,000); personal property ($10,000); and superannuation ($36,000). Her average weekly income is about $727. Her liabilities are a home loan ($123,390); a personal loan ($10,600); and a HECS debt ($22,490). Her weekly expenses total $342 and "other weekly household expenses including groceries and Niamh's educational and other expenses". Her income is also completely spent on her weekly expenditure.
The Plaintiff wants to receive the testatrix's house. As I pointed out earlier, this has a value of $522,000. There is just not enough money in the estate to give the Plaintiff a house even if I disregarded every other claimant on the testatrix's bounty. The best figuring one could do is to say that there is only about $529,000 in the estate. This means that, even if the Plaintiff was to receive the house, he would have to pay the executor some $50,000.
To give the Plaintiff the house, however, would be over-provision in light of other claimants on the testatrix's bounty.
Assuming that the order that I make should be directed to providing the Plaintiff with accommodation, I find that I have very little evidentiary material as to how much it would take to buy a house in the Forster area. It seems clear that the Forster area is the area in which the Plaintiff would like to continue to live.
The only guidance I have is that the testatrix's former property at Manning Point sold for about $260,000. I can take this, even though the evidence is very scanty, as being the approximate price of a home in the area. The Plaintiff has assets of about $187,212 (not including the houseboat). He needs to keep some as a nest egg in case of health failure or the like. I consider that in the light of the size of the estate, and the needs of Mrs Kendall, that the proper order is a legacy of between $50,000 and $100,000. Accordingly, in my view, the proper order is that the Plaintiff receive a legacy of $85,000, not to carry interest if paid within one month of the sale of the testatrix's home. The costs of the Plaintiff, which are capped at $85,000 in accordance with usual policy that costs do not exceed the amount of the legacy, should be paid out of the estate, and the executor's costs should be paid out of the estate.
[3]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 18 December 2015