Straede v Eastwood & Anor

[2003] NSWSC 280

Supreme Court of NSW|2003-04-02|Before: Palmer J, Hodgson CJ

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Source facts

Court

Supreme Court of NSW

Decision date

2003-04-02

Before

Palmer J, Hodgson CJ

Source

Original judgment source is linked above.

Judgment (68 paragraphs)

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CITATION : Straede v Eastwood & Anor [2003] NSWSC 280 HEARING DATE(S) : 1 and 2 April, 2003 JUDGMENT DATE : 2 April 2003 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Orders made modifying effect of forfeiture rule in whole as sought in Summons - Plaintiff to pay own costs of application - Defendants to have costs out of the estate.

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CATCHWORDS : FORFEITURE ACT - FORFEITURE RULE - RELEVANT CONDUCT - IMMORALITY - Plaintiff's wife killed in motor car accident in which Plaintiff was driver - Plaintiff pleaded guilty to dangerous driving causing death - Plaintiff applies for modification order under Forfeiture Act to permit him to receive benefit of dispositions in wife's will - other beneficiaries oppose order - Plaintiff and wife lived in ménage à trois for twenty years prior to wife's death - whether Plaintiff's "immorality" a relevant aspect of the Plaintiff's "conduct" to which the Court must have regard under s.5(3)(a) Forfeiture Act - principles discussed. - HELD: Conduct of offender to which the Court must have regard under s.5(3)(a) is conduct which has some bearing upon the circumstances in which the deceased was killed and upon the culpability of the offender - conduct during the marriage of the Plaintiff and the deceased had no bearing upon the circumstances of the deceased's death and was irrelevant. - FORFEITURE ACT - RELEVANT MATTERS - Needs of other beneficiaries and wishes of deceased - whether and to what extent relevant - principles discussed. - HELD: Needs of other beneficiaries and wishes of deceased not relevant in circumstances of the case. - FORFEITURE ACT - COSTS - Whether each party should have costs out of the estate - principles discussed. - HELD: Plaintiff to pay own costs - other parties to have costs of estate. - Crimes Act 1900 (NSW) - s.52A(1c) - Forfeiture Act 1995 (NSW) - s.3, s.4, s.5, s.6 LEGISLATION CITED : - Family Provision Act 1982 (NSW) - Jurisdiction of Courts (Foreign Land) Act 1989 (NSW) - s.4 - Property (Relationships) Act 1984 (NSW) - Wills, Probate and Administration Act 1898 (NSW) - Beresford v Royal Insurance Company Ltd [1937] 2 KB 197 - Dunbar v Plant [1997] 4 All ER 289 CASES CITED : - Re K (deceased) [1985] 1 Ch 85 - Lenaghan-Britton v Taylor (unrep., NSWSC 26 May 1996, Hodgson CJ in Eq) - S-T v J [1997] 3 WLR 1287 - Vasiljev v Public Trustee [1974] 2 NSWLR 497 John Oswald Straede - Plaintiff PARTIES : Terence John Eastwood - First Defendant Debra Michele Myors - Second Defendant FILE NUMBER(S) : SC 4233/01 L.J. Ellison, W. Wilcher - Plaintiff COUNSEL : S. Marantelli - First Defendant G.B. Johnston - Second Defendant Macedone Christie Willis - Plaintiff SOLICITORS : Eggleston Mitchell Lawyers - First Defendant Hicks & Oakley - Second Defendant

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15 John was born in 1941 and Cheryl was born in 1951. Cheryl suffered from a congenital disability, Charcot-Mare Tooth disease, which became more and more debilitating and disabling as she grew older. 16 Cheryl's family lived in Melbourne and Cheryl was able to attend normal school, although she left at an early age. After several years' work, Cheryl enrolled at university as a mature age student and obtained a Bachelor of Arts degree. Subsequently, she obtained the degrees of Master of Letters in Literature and Master of Clinical Psychology. She was admitted to the College of Clinical Psychologists. 17 Cheryl met John in the late 1960s and they were married in December 1971. They had no children; John had a vasectomy because it would have been very injurious to Cheryl's health if she had fallen pregnant. They lived in Melbourne for a few years and finally moved to Sydney. They purchased a number of properties together and eventually bought a house at Epping. John worked as a computer programmer for the Anglo-Australian Observatory at Eastwood and Cheryl worked first for the Department of Health and later for the Australian Taxation Office at Chatswood. 18 John and Cheryl shared a number of interests and hobbies, the main hobby being cat breeding. In about 1979, John and Cheryl met Truda, who was also a highly enthusiastic cat breeder. 19 John, Cheryl and Truda became friends. According to Truda's unchallenged evidence, a sexual relationship commenced between her and Cheryl and lasted for about two or three years thereafter. Truda says that it was Cheryl who suggested that Truda move in to live with her and John. Truda did so. Thereafter the three shared the same bedroom for some time and for some months John had sexual relations with one or other woman in the presence of the other. This evidence to some degree is corroborated by John, and I accept it. 20 In about February 1983, a "ceremony of commitment" was held at John and Cheryl's home at Epping. In the presence of about twenty guests, Truda made a commitment to the ménage à trois, and promised that they would all look after each other and share their property. Cheryl was present at the ceremony but, apparently, she did not actively participate. 21 Shortly after the "ceremony of commitment" Truda changed her surname to Straede and transferred a property which she owned at South Maroota into the names of John, Cheryl and herself as joint tenants, while John and Cheryl transferred properties which they owned, namely the house at Epping and land at Coonabarabran to Truda and themselves as joint tenants. 22 In about August 1984 John, Cheryl and Truda moved to the land at South Maroota which had previously been owned by Truda alone. The three of them continued to live there until Cheryl's death. John and Cheryl worked and provided income for the household and Truda devoted most of her time to cat breeding on a large scale. The cat breeding business did not, however, make a profit. 23 The evidence indicates that Cheryl became increasingly disaffected with the ménage à trois, and by about 1996 or 1997 she wished to disengage herself and John from Truda. Although she spoke to family and friends about her desires and consulted a lawyer in 1997, she did not herself leave the relationship. She and John were apparently making plans to move to Melbourne without Truda, but they had not done so by the time of Cheryl's death. 24 Cheryl died on 31 August 2000. She and John had been married for 28 years and 9 months and they had been living in the ménage à trois with Truda for about 20 years. John married Truda on 27 May 2001. Cheryl's Will

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26 John and Cheryl were married according to the rites of the Catholic Church. Doubtless, they exchanged vows of marital fidelity. Mr Johnston says that John's relationship with Truda during his marriage to Cheryl was immoral in that he broke his marriage vow of fidelity. He says that that conduct must be taken into account in a decision as to whether the effect of the forfeiture rule should be modified. Initially, Mr Johnston submitted that John's application should be dismissed as a matter of public policy. He said that John's immoral conduct attracted the operation of the maxim "ex turpi causa non oritur actio", a maxim which, as Lord Wright MR observed, is "notwithstanding the dignity of the learned language, like most maxims, lacking in precise definition" : Beresford v Royal Insurance Company Ltd [1937] 2 KB 197, at 219-220. Mr Johnston ultimately withdrew that submission, but he does say that the conduct of John should weigh heavily in the exercise of the Court's discretion under s.5 of the Act. 27 Mr Johnston places strong reliance on the decision of the English Court of Appeal in S-T v J (1997) 3 WLR 1287. In that case the appellant, who was biologically a woman but regarded herself as male, entered into a marriage with another woman, the respondent. As part of the preliminary formalities to the marriage, the appellant signed a statutory declaration stating that she was a bachelor and therefore free to marry. The respondent believed that the appellant was a man and continued to believe that she was a man during the seventeen years or so that the couple lived together as man and wife. Eventually, the respondent discovered the appellant's birth certificate, which showed that the appellant was a woman. The respondent petitioned for dissolution of the marriage and the appellant applied for support and ancillary relief under the United Kingdom Matrimonial Causes Act . 28 The trial judge refused to entertain the appellant's application on the ground of public policy, saying that the appellant's claim to ancillary relief under the Matrimonial Causes Act was founded upon her perjury in falsely swearing, at the time of the marriage, that she was a male and therefore free to marry the respondent. The Court of Appeal dismissed the appeal. 29 Ward LJ dissented from the majority Judges in holding, as the trial judge had done, that the appellant's claim should be dismissed without a hearing on the merits because it was a claim which the Court would not entertain as a matter of public policy. The majority Judges decided that the claim ought not to have been dismissed on the ground of public policy but, rather, should have been heard on the merits and then dismissed in the exercise of the Court's discretion. 30 At p.1319, Ward LJ said: "It seems to me that the answer to the question whether the claim is tainted with turpitude depends not on whether the person against whom the claim is made will suffer disadvantage; but rather on whether there is a discernible public interest which will be damaged by the court's sanctioning the prosecution of the claim. There must be a legitimate public interest to protect. We have an established system of rules for the classification of objects of public policy protection so that the court will, for example, impeach any claim which is economically against the public interest (restraint of trade) or injurious to good government (trading with the enemy) or to the administration of justice (an example well known in matrimonial law being an agreement to oust the jurisdiction of the court to grant ancillary relief: Hyman v Hyman [1929] AC 601). In another category, there is a system of rules to proscribe acts injurious to morality, and, akin to that, acts injurious to marriage.

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At p.1325, his Lordship said: "Since I am still of the view that, properly characterised, the facts of the case boil down to an attempt to gain a benefit which accrues only through wrongdoing, then, in that character, the claim is against public policy and for my part I do not shrink from so finding nor from dismissing the appeal on that basis." 31 It will be seen at once that the case of S-T v J is very different from the present case and, indeed, it is contrary to Mr Johnston's submission. In S-T v J the appellant's claim to relief under the Matrimonial Causes Act was founded upon the very fact that she had contracted a marriage and, as a married person, was entitled to claim relief under the Act. But her status as a married person depended directly upon her wrongdoing in falsely swearing that she was a male. It was on that ground that Ward LJ applied the rule of public policy in holding that the action should have been dismissed at the threshold and it was on that ground that the majority Judges dismissed the appeal in the exercise of the Court's discretion. In the present case, however, John's claim to relief under the Forfeiture Act does not depend upon his status as a married person. It depends on his status as a beneficiary under Cheryl's will and as a joint tenant with Cheryl of certain property and upon the fact that he was convicted of Cheryl's unlawful killing. 32 I accept that s.5(3)(a) of the Forfeiture Act does not contain any express limitation on the range or type of conduct of the offender to which the Court must have regard in deciding whether justice requires the effect of the forfeiture rule to be modified. This is because an offender's part in the unlawful killing of the deceased and the circumstances bearing on the offender's culpability will be different in each case, and it will be for the Court in each case to determine what conduct of the offender is relevant to the determination required by s.5(3) and what conduct is not . 33 Nevertheless, it seems to me that in order to qualify as conduct to which the Court must have regard under s.5(3)(a) the conduct of the offender must have some bearing on the very fact which brings into operation the forfeiture rule, that is, the unlawful killing of the deceased. So, for example, in Re K (deceased) [1985] 1 Ch 85, the history of a marriage in which the wife had been violently assaulted by the husband had a direct bearing on the culpability of the wife when, without premeditation, she shot the husband during a violent argument and later sought relief under the United Kingdom Forfeiture Act . 34 Likewise, in Lenaghan--Britton v Taylor (unrep. NSWSC 26 May 1996, per Hodgson CJ in Eq), the long history of the relationship between the plaintiff and her grandmother was directly relevant to the plaintiff's culpability in killing the grandmother in a violent, unpremeditated but provoked attack. 35 In the present case, John's conduct with Truda in the ménage à trois with Cheryl has no bearing whatsoever upon how Cheryl came to die and upon John's role in her death. 36 Mr Johnston says that John comes before the Court bringing a claim under the Forfeiture Act as a married man, that is a man entitled to benefits under his wife's will and that it would outrage the community if the Court were to exercise a discretion in his favour when he had been guilty of immoral conduct with Truda during the marriage. 37 I cannot accept this submission for many reasons. Three will suffice. First, I cannot see why the Court in the exercise of its discretion should express its disapproval and censure of John's lack of marital fidelity when, according to the evidence, John's own wife instigated the ménage à trois and continued to live within it for some twenty years until her death. Second, Cheryl herself did not disapprove of John's conduct sufficiently to regard him as having no further moral claim on her bounty because she made substantial provision for him in her Will made in February 2000. Third, I am by no means sure of what right-minded people in the community would think of this or any ménage à trois in the light of social policies reflected in, for example, the range of dependents entitled to bring claims under the Family Provision Act 1982 (NSW) or in legislation such as s.61B(3A) of the Wills, Probate and Administration Act 1898 (NSW), or the Property (Relationships) Act 1984 (NSW). 38 For these reasons, I do not consider that John's conduct in the ménage à trois during his marriage to Cheryl is conduct to which I should have regard under s.5(3)(a) of the Forfeiture Act . I may say, however, that even if the law compels me to have regard to such conduct, I would not have held that it disentitled John to relief because Cheryl herself did not regard it as warranting the exclusion of John from her testamentary bounty. Cheryl's wishes

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51 Earlier this afternoon, I delivered judgment on the Plaintiff's Amended Summons. There has now been debate before me at length as to what should be the proper costs order resulting from that judgment. 52 The Plaintiff's submission is that the Plaintiff should pay his own costs, as he was seeking an indulgence from the Court for relief under the Act and, accordingly, the deceased's estate should not have to bear the costs of such an application. In my view, that is quite the proper order to make in the circumstances. 53 The Plaintiff then submits that the First Defendant's costs should be paid out of the estate, but on a party/party basis, not on the usual basis of an indemnity. Mr Ellison suggests that the First Defendant's participation in the proceedings after the joinder of the Second Defendant was largely unnecessary, as it was clear that the Second Defendant was going to take the large share, if not the total responsibility, for the running of the opposition to the Plaintiff's claim. 54 I do not think that is the proper way of looking at matters. The First Defendant was the co-executor of the estate and his duties not only included the defence of the Will, to a certain extent, but the placing of relevant matters before the Court. Further, it was quite possible that in the course of the proceedings events would take a sudden turn in an unexpected direction, which would require the First Defendant, in his capacity as executor, to make decisions as to what should be done next. 55 I think that the attitude of the First Defendant has been proper and responsible in the conduct of the proceedings and that he should have his costs out of the estate on an indemnity basis. 56 The Plaintiff then suggested that the Second Defendant should pay her own costs and not have costs out of the estate. The Plaintiff says that the Second Defendant, in effect, totally failed in her opposition to the claim and that there is no good reason why the estate should be burdened with her costs to the detriment of the Plaintiff, who is also a beneficiary, and to the detriment of other beneficiaries who are not represented by the Second Defendant. 57 Mr Johnston says that the Second Defendant's participation was not only justified, but was necessary. He says that it was clear that the First Defendant would not place before the Court the evidence as to Mr Straede's conduct during the marriage, which the Second Defendant believed, no doubt upon legal advice, to be material which should be placed before the Court, particularly as the Court was exercising a jurisdiction which comprised a substantial discretionary element. 58 I have come to the conclusion that the evidence which the Second Defendant placed before the Court as to marital conduct was not relevant to the ultimate determination. However, I could not come to the conclusion that it would have been totally unreasonable for any competent lawyer to believe that such evidence could have been relevant to the Court's exercise of discretion. It is a position upon which some minds, I think, may reasonably differ. 59 Further, the Second Defendant wished to make contentions about proper construction of the deceased's Will by way of defence to the Plaintiff's claim. As it turns out, the construction point has not been material to the ultimate determination, but it possibly could have been. It did not appear that the arguments in that respect that the Second Defendant wished to put were to be put by the First Defendant. It seems to me that the Second Defendant, therefore, had a proper concern as to whether arguments which, on one view, could reasonably have been regarded as relevant, were going to be put to the Court. 60 Finally, there is the question of whether the Court should have exercised jurisdiction under the Jurisdiction of Courts (Foreign Land) Act . That question did not occupy a great deal of time in the argument of the parties or in the conduct of the case, but it was, nevertheless, a point which reasonable minds might have thought ought to be placed before the Court. 61 What costs order should be made is, no doubt, a very difficult decision to make in a case like this, where parties on both sides have developed intense and often hostile attitudes. I think that I have to proceed on the basis, in the circumstances of this case, that it was not totally unreasonable for the Second Defendant to seek to place before the Court the evidence as to marital conduct, even though I have come to the firm conclusion that that evidence was irrelevant. 62 I think that the exercise of the Court's discretion as to costs in a case such as this is fairly analogous to the way in which the Court exercises its discretion as to costs in an application under the Family Provision Act , as illustrated in Vasiljev v Public Trustee [1974] 2 NSWLR 497, and particularly at pp503ff. 63 In my opinion, the proper order for costs in relation to the Second Defendant is that her costs should come out of the estate on a party/party basis. - oOo -