McCarthy v Tye

The Primary Judgment

1. The primary Judge recorded that the case had been heard over two days. Fourteen witnesses gave evidence, of whom eleven had been cross-examined. [6] His Honour noted that witnesses called by the appellant tended to support the existence of a de facto relationship between the appellant and the Deceased, while those called by the respondent tended the other way. [7]
2. The primary Judge found that after allowing for the partial distribution to the beneficiaries, the estate comprised assets to the value of $704,000, of which $552,000 could be attributed to the Forster Property. After allowing for claimed legal costs of $156,000 (which his Honour described as "extravagant") and the capital gains tax liability of $19,000, the funds in the estate amounted to only $529,000. Thus either the Forster Property would have to be sold or the beneficiaries would have to fund the deficiency. [8]
3. The primary Judge said that he did not think that any of the witnesses sought to mislead him, but each "only saw part of the picture". [9] His Honour also observed that friends or relatives of a person were apt to form an opinion about the nature of that person's relationship "on too slender an evidentiary basis". For that reason it was important to consider any corroborative evidence or evidence from completely independent people. [10]
4. His Honour's comment that the witnesses were not attempting to mislead him appears to have been a reference to witnesses other than the appellant. The primary Judge rejected the appellant's explanation for signing documents that were contrary to his case. In particular, his Honour did not accept the appellant's claim that he was so sick or impaired that he could not understand the contents of forms he had completed and signed. His Honour observed that, contrary to the appellant's claims of being unable to comprehend documents, he handled his cross-examination shrewdly and indeed showed himself to be the intellectual equal of the cross-examiner. [11]
5. As has been noted, the primary Judge rejected the appellant's submission that he had been in a de facto relationship with the Deceased at the date of her death. It is fair to say that his Honour took a rather broad-brush approach to the factual question, perhaps because he was not referred to s 21C of the Interpretation Act. In finding that the appellant and the Deceased were not de facto partners at the relevant time his Honour took into account that: [12]

• there had been no sexual relationship for a number of years between the appellant and the Deceased;
• the appellant repeatedly asserted to Centrelink and doctors that he was a single man;
• the Deceased signed a "Domestic Relations Agreement" in 2011 that denied the existence of a de facto relationship;
• there was no evidence of birthday cards or Christmas cards between the appellant and the Deceased;
• virtually all the medical records recorded that the appellant was a single man; and
• the parties occupied separate bedrooms, a state of affairs for which several different explanations had been offered.

1. The primary Judge rejected an alternative contention that the appellant satisfied the definition of "eligible person" because he had been wholly or partly dependent on the Deceased at a time when he was a member of her household. [13] His Honour considered that there was insufficient evidence of either financial or emotional dependence. [14]
2. The primary Judge then turned to consider whether the appellant was an "eligible person" because he had been in a "close personal relationship" with the Deceased at the time of her death. [15] His Honour dealt with this question as follows: [16] "[42] The mere fact that the [appellant] commenced as being a boarder in the [Deceased'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 [Deceased'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. [43] In my view, this material is just sufficient to bring the [appellant] over the line and come within paragraph (f)."
3. The next question, given that the appellant was an eligible person, was whether in all the circumstances of the case there were factors which warranted the appellant making an application for a family provision order. [17] Once again, his Honour concluded that the appellant "just [got] over the barrier". [18]
4. The final question was whether the provision made for the appellant in the Deceased's will was proper in all the circumstances. His Honour found that the appellant had some substantial assets as follows: [19] "… three motor vehicles ($23,000); cash in bank accounts ($95,649.30); personal property ($22,000) … and funds held by Leanne White Law Practice Trust Account on his behalf ($45,155.46). The [appellant] 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."
5. The three beneficiaries under the Deceased's will were the respondent, her twin brother, and her two nieces. The primary Judge considered that the respondent had no particular needs. [20] One of the nieces had multiple sclerosis and was unlikely to work again, [21] while the other had a modest weekly income which was wholly expended on her regular outgoings. [22]
6. The primary Judge dealt with the appellant's claim for family provision as follows: [23] "[60] The [appellant] wants to receive the [Deceased'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 [appellant] a house even if I disregarded every other claimant on the [Deceased]'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 [appellant] was to receive the house, he would have to pay the executor some $50,000. [61] To give the [appellant] the house, however, would be over-provision in light of other claimants on the [Deceased]'s bounty. [62] Assuming that the order that I make should be directed to providing the [appellant] 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 [appellant] would like to continue to live. [63] The only guidance I have is that the [Deceased]'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 [appellant] 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 [one of the nieces], that the proper order is a legacy of between $50,000 and $100,000. Accordingly, in my view, the proper order is that the [appellant] receive a legacy of $85,000, not to carry interest if paid within one month of the sale of the [Deceased]'s home."

Post-judgment developments

1. An affidavit was read on behalf of the respondent in this Court to explain developments post-dating the judgment in the Equity Division proceedings. The following events have occurred:

• on 12 January 2016 the solicitors then acting for the appellant filed a notice of intention to appeal;
• on 24 February 2016, the respondent instituted proceedings against the appellant seeking an order for possession of the Forster Property;
• a writ of possession was obtained and was executed by the Sheriff on 27 April 2016;
• in October 2016, contracts for the sale of the Forster Property were exchanged for a purchase price of $700,000;
• on 23 November 2016, a solicitor who had previously acted for the appellant informed the respondent's solicitors that she had obtained a judgment against the appellant and that she intended to apply for a garnishee order over the legacy of $85,000 to meet the balance of the judgment debt, amounting to $42,475.84;
• on 25 November 2016, the appellant lodged a caveat over the title to the Forster Property claiming "rights as spouse of [the Deceased]" and by reason of improvements to the Property;
• the notice of appeal was filed on 6 December 2016;
• an order was apparently made on 9 December 2016 for the removal of the caveat;
• the sale of the Forster Property was completed on 19 December 2016, yielding net proceeds of $677,959.30;
• two amounts of $85,000, representing the legacy and the costs awarded to the appellant, were paid from the proceeds of the sale into two separate controlled money accounts;
• at about the same time the balance of the proceeds of sale was distributed to the beneficiaries in accordance with the terms of the will;
• the solicitor's judgment debt was subsequently paid out of one of the controlled money accounts;
• on 19 July 2017, pursuant to an order of the Court, the sum of $60,000 was paid into Court out of the second controlled money account as security for the respondent's costs of the appeal.

Appellant's submissions

1. The appellant's written submissions contain a great deal of material irrelevant to any issue that can arise on the appeal. They also include intemperate allegations of misleading conduct, predatory behaviour, dishonesty and abuse of power levelled against a number of people.
2. The appellant's oral submissions were even more intemperate as he sought to blame many others, including the various lawyers who have acted on his behalf in the past, for his current circumstances. His main contention, relevant to the appeal was that he and the Deceased were committed to each other and were life partners and that the primary Judge should have found this to be the fact. The appellant also repeatedly asserted that all he wanted was his home and that he would never rest until his claim was accepted. He maintained that he was entitled to the Forster Property notwithstanding that he had never been registered as the proprietor and had never been recognised as having a proprietary interest in the Forster Property.
3. It was pointed out to the appellant that his appeal could only succeed if he could identify some error of fact or law in the Primary Judgment. As best as the Court was able to discern, the appellant's contentions in response to that advice were that:

• there was no basis in the evidence for the primary Judge rejecting the appellant's clear evidence that he and the Deceased had been in a de facto relationship since 2003 and that the relationship had subsisted until the Deceased's death;
• insofar as the primary Judge relied on forms or documents completed by the appellant, his Honour overlooked the appellant's evidence that he was too ill or otherwise unable to read the documents carefully;
• the primary Judge failed to have regard or sufficient regard to the evidence from "credible and professional people" who gave evidence supporting the appellant's claim to have been the Deceased's de facto partner; and
• the primary Judge gave too much weight to the history recorded in the various medical reports.

1. The appellant also submitted that the primary Judge overstated the appellant's assets at the date of the hearing and failed to take into account the appellant's needs attributable to his illness and disabilities.

The finding as to a de facto relationship

1. The primary Judge referred in summary form to a substantial body of evidence inconsistent with the appellant's claim that he had lived in a de facto relationship with the Deceased from 2003 until her death in 2014. The evidence included the following:

• On 22 September 2008, the Deceased completed a Centrelink "Income and Assets" form. The form required, among other things, details of the assets and income of the claimant's partner. The form made no reference to the Deceased.
• On the same day, the Deceased applied for a disability benefit from Centrelink. The form asked "What is your CURRENT marital status?". The appellant ticked the box for "Single (never married, never lived with a partner)".
• On 8 October 2008, the appellant and the Deceased signed a Centrelink "Rent Certificate". The document certified that the appellant paid rent of $500 per month in respect of the Forster Property and had done so since July 2008.
• On 1 July 2011, at the same time as she executed her will, the Deceased signed a "Domestic Relationship Agreement (Agreement), which was to be made "pursuant to s 44.1 of the Property (Relationships) Act [1984 (NSW)]". [24] The Agreement recited that: "A. The parties do not live in a de facto relationship as defined in S.4AA of the Family Law Act 1975 or S.4.1 of the Property (Relationships) Act 1984 but do live in a close personal relationship as defined in S.5.1b of the Property (Relationships) Act." [25] The appellant subsequently refused to execute the Agreement. Nonetheless the Deceased's signing of the Agreement indicates that at that time she did not consider that she and the appellant were in a de facto relationship.
• On 19 July 2012, the appellant signed an application to Centrelink for a Carer Allowance. The form included the following question and the appellant's handwritten answer: "25 What is your relationship to this person you are caring for (eg daughter, mother, grandmother, family friend)? [A] CLOSE FRIEND."
• In July or August 2013, at a time when the Deceased was suffering from cancer and required palliative care, she signed a "Home Care Plan" with Baptist Community Services. In this document the Deceased recorded that the relationship with her carer, the appellant, was as a "Friend". She also stated that "I live with my friend, Peter".

1. In his oral submissions in this Court, the appellant attempted to explain why this documentary evidence was not necessarily fatal to his case. He claimed, for example, that the Deceased only signed the Agreement because she was induced or influenced by the respondent to do so. This submission overlooked the respondent's evidence that the Deceased initiated contact with her solicitor and that the solicitor explained the terms of the Agreement to her. The respondent's evidence on this issue was not challenged by the appellant's counsel at the trial.
2. The appellant also claimed in his submissions to this Court that he could not properly read or understand the various forms he had completed and signed and thus did not appreciate their significance. The respondent gave evidence to this effect at the trial but the primary Judge, having seen the appellant give evidence and taken into account his level of education and ability to respond to questions, rejected this explanation. It is difficult to see how his Honour could have done otherwise.
3. As the primary Judge found, the numerous medical and psychological reports in evidence also do not assist the appellant's case. It is true that care must be taken in relying on material of this kind for purposes that neither the patient nor the health practitioner may have had in mind at the time. [26] It must also be borne in mind that the appellant cannot be expected to have been familiar with the statutory definition of the term "de facto relationship". Nonetheless, the histories recorded in the reports suggest that the appellant did not believe that he and the Deceased were de facto partners as that term is ordinarily understood.
4. It is not necessary to refer in detail to the various reports and two examples will suffice. A psychological assessment prepared in November 2008,after a consultation with the appellant, records the following: "[The appellant] is single and has never been married and has no children. He stated that he has never been in a meaningful partnership or relationship. He maintains a fraternal bond with a 60 yrs old lady who lives in the same neighbourhood. Their friendship is moderate, especially now as he experiences emotional and behavioural issues that seem to harm relations." A report prepared by the appellant's general practitioner a few days before the Deceased's death states that: "He has been sharing a house with a lady who was a friend of his mother's [sic] and they had a good friendship"
5. Both of these reports clearly record information provided directly by the appellant and reflect a consistent theme in the appellant's medical records. The reports cannot be dismissed as the product of inaccurate recording by the authors or as irrelevant to the issue the primary Judge had to decide. They provide strong support for the primary Judge's findings.
6. The appellant criticised the primary Judge for not accepting the evidence of the "independent" witnesses as to the nature of the relationship between the appellant and the Deceased. However, his Honour had to take account of the totality of the evidence, including the documentary evidence to which we have already referred. He also had to take into account the evidence of witnesses who heard the Deceased say on numerous occasions that the appellant was a "boarder" or a "friend". For example, Ms Kendall, one of the Deceased's nieces, testified that the Deceased repeatedly told her during visits to the Forster Property that the appellant was only a friend and a boarder in the house. Ms Kendall was asked about her recollection in cross-examination, but her account was not seriously challenged.

Appellant's assets

1. The appellant repeatedly referred in his submissions to being left destitute as a result of the primary Judge's decision. The Court pointed out to him that the critical time for determining whether the Deceased's will made adequate provision for his proper maintenance or advancement in life is the date of the hearing. [28] In response, the appellant submitted that the primary Judge had overstated the extent of the appellant's assets at the date of the hearing.
2. There is no substance in this submission. The primary Judge's finding as to the appellant's assets was based entirely on the appellant's own evidence. [29] In an affidavit sworn shortly before the hearing the appellant summarised his assets. The Primary Judgment simply records the figures appearing in the appellant's summary.

The quantum

1. The primary Judge's determination of the quantum of the family provision order is a "true discretionary decision". [30] It is therefore reviewable only in accordance with the principles stated in House v The King. [31]
2. At the trial a rather faint submission was made that a wise and just testator would have left the appellant the house in which he had lived (albeit apparently paying rent for much, if not the whole of the time) for about 13 years. The difficulty with that submission, as the primary Judge pointed out, is that it would require the Court in effect to disregard the claims of the beneficiaries under the will, particularly the two nieces, both of whom had financial needs.
3. The alternative submission advanced at trial on behalf of the appellant was that the appellant should receive a capital sum which would enable him to rent or purchase another property in the Forster area. The primary Judge made the family provision order precisely on this basis. His Honour considered that a legacy of $85,000, together with the appellant's own resources, would enable him to purchase a home in the area and have a "nest egg" in case of health failure. The approach taken by the primary Judge reflected the submission made on behalf of the appellant and discloses no appellable error.
4. It also seems clear enough that the trial proceeded on the basis that the appellant's poor health over a number of years made it unlikely that he would rejoin the paid workforce in the future and that he was therefore likely to remain dependent on social welfare benefits. The primary Judge's determination took account of the appellant's poor health and made some modest provision for any further deterioration in the appellant's health.
5. No appellable error has been shown in the order made by the primary Judge.

Orders

1. The following orders should be made:
2. Extend the time for the filing of a notice of appeal until 6 December 2016.
3. Dismiss the appeal.
4. The appellant to pay the respondent's costs in this Court.

Endnotes

1. McCarthy v Tye [2015] NSWSC 1947 (Primary Judgment).
2. Succession Act s 59(1)(c).
3. Supreme Court Act 1970 (NSW), s 101(2)(r). See Pawlowska v Zajglic [2011] NSWCA 118 at [13]-[21] (Campbell JA).
4. The Primary Judgment mistakenly records the value of the estate for probate purposes as $1.64 million: at [10]. The only significance of the typographical error is that the appellant seems to have formed a belief that $1.64 million was the correct figure.
5. Primary Judgment at [12].
6. Primary Judgment at [3].
7. Primary Judgment at [17].
8. Primary Judgment at [13].
9. Primary Judgment at [17].
10. Primary Judgment at [20].
11. Primary Judgment at [24].
12. Primary Judgment at [22]-[27].
13. Succession Act, s 57(1)(e).
14. Primary Judgment at [31]-[32].
15. Succession Act, s 57(1)(f).
16. Primary Judgment at [42]-[43].
17. Succession Act, s 59(1)(b).
18. Primary Judgment at [48].
19. Primary Judgment at [54].
20. Primary Judgment at [55].
21. Primary Judgment at [55].
22. Primary Judgment at [59].
23. Primary Judgment at [60]-[63].
24. Section 44(1) of the Relationships Act defines a "domestic relationship agreement" to include an agreement made between two or more people who are in a domestic relationship that makes provision with respect to financial matters.
25. Section 5(1)(b) of the Relationships Act provides that for the purposes of the Act a "domestic relationship" is a de facto relationship or: "(b) a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care." The definition of "de facto relationship" has been referred to at [8**] above.
26. See for example, Container Terminals Australia Ltd v Huseyin [2008] NSWCA 320 at [8] (Basten JA).
27. Interpretation Act, s 21C(3)(i).
28. Succession Act, s 59(1)(c).
29. Primary Judgment at [54]. See at [33**] above.
30. Durham v Durham (2011) 80 NSWLR 335; [2011] NSWCA 62 at [82] (Campbell JA, Tobias and Young JJA agreeing).
31. (1936) 55 CLR 499; [1936] HCA 40 at 504-505 (Dixon, Evatt and McTiernan JJ). 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: 06 November 2017