FOX AND ANOR v DOCKREY SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION GLEESON CJ, MAHONEY and CLARKE JJA 12 March 1992, 12 March 1992 [1992] NSWCA 70 FAMILY PROVISION ACT — APPEAL — DISCRETION — NEED — CONDUCT DISENTITLING — RE FULOP DECEASED (1987) 8 NSWLR 679, APPLIED. Gleeson CJ In this matter I will ask Mr Justice Clarke to deliver the first judgment. Clarke JA This is an appeal from a judgment of Master McLaughlin given on 19 August 1991 in which the learned Master made an order in favour of the respondent under the Family Provision Act 1982. The testatrix, who died on 18 March 1989, executed her last will and testament on 14 February of that year. In that will she left her estate to her three children. She left the respondent, her only daughter who was born on 2 August 1933, one-fifth of the estate. She left her two sons, who are the appellants before us and who were born on 9 June 1939 and 26 August 1944 respectively, two-fifth share each. The respondent brought the claim upon the basis that she had a need which had not been adequately reflected in the will and as I have indicated the learned Master accepted that contention and found for her. The estate of the testatrix consisted of real estate being a home unit at Fairlight estimated to have a value of about $200,000 and other assets totalling in excess of $240,000. It is common ground that at the date of the judgment the estate had a net value of $425,000. The order made by the learned Master was to the following effect and I quote: "Tn lieu of the benefit given to her by the will the plaintiff is to receive a legacy of $200,000, such legacy to bear interest from 7 May 1990 until payment." The thrust of the learned Master's reasoning was that the respondent had a need for residential accommodation and that it was necessary to make an order along the lines of the order I have indicated to satisfy that need. What the learned Master actually said was: "Tt seems to me that the moral duty of the deceased to her daughter required that she make provision for the plaintiff sufficient to enable some form of residence to be acquired by the Plaintiff." The case was a troubling case for a number of reasons, not the least of which was that relationships between at least one of the testatrix's sons and the respondent were quite bad. Furthermore, the evidence demonstrated quite clearly that both the testatrix's sons had attended the testatrix in her times of need and have spent a lot of time attending to meeting those needs. In those circumstances, and for another reason to which I will come in a moment, it is not surprising that when the testatrix made her last will shortly before her death she preferred her sons to the extent I have indicated. 2 UNREPORTED JUDGMENTS The other consideration is that the respondent herself could not be said to have been as close to the testatrix as the appellants, nor to have devoted to her the time which the appellants did. Any case in which the court is asked to take away something from someone who had devoted care and attention to their mother, as the appellants in this case have, presents particular difficulties for a trial judge which are exacerbated if there is indeed a real need demonstrated by an applicant. Those matters seem to me to have made this case a very difficult one for the learned Master and one which for that reason was not of easy resolution. The order which was made is, however, in the nature of a discretionary order and on appeal the powers of this court are limited in the manner articulated in House v King 55 CLR 499 at 505. Any appellant wishing to reverse a decision of this nature is bound to show, putting it broadly, that the trial judge or Master made an error which caused his exercise of discretion to miscarry. Accordingly, leaving to one side for the moment the considerations arising from the fresh evidence which was admitted, this Court is concerned in the first instance to enquire only into the question whether the learned Master has been shown to have made an error of fact or of law which has caused his decision and exercise of discretion to miscarry. Mr Rodney Parker of Queens Counsel who presented a very careful and thoughtful submission on behalf of the appellants, recognised the constraints that are imposed upon this Court and sought to establish that one could discern from the judgment under appeal a number of errors which had been made by the Master. Although he categorises these generally as errors of fact and of law I think it is perhaps more correct to say, that he was asserting, in essence, that the errors were factual. There is perhaps one proviso to that view and that is in respect of the complaint which was made and which was articulated in the written submissions, that the learned Master had not attended carefully enough to the evidence when he came to deliberate and make his final judgment. I will return to that matter in a moment. In support of his submissions Mr Parker referred the court to the unreported decision of this Court in Tsivinsky v Tsivinsky delivered on 5 December 1991 and in particular passages from the judgment of the learned President and Mr Justice Mahoney. Those passages elaborated, as Mr Parker said, a very helpful and concise statement of the law of Mr Justice McClelland in Re Fulop Deceased (1987) 8 NSWLR 679. I should add that both parties accepted in this Court that the principles expressed by Mr Justice McClelland and elaborated in Tsivinsky were the appropriate principles for application by the court. Bearing those principles in mind Mr Parker submitted that it was necessary for an applicant, for relief under the Family Provision Act, to demonstrate the existence of a need before an order could be made. Having said that he submitted that in this case no need had been demonstrated and that therefore the learned Master had erroneously made an order. The argument which supported these propositions was quite short. It was to the effect that the respondent was an adult who was entitled only to a minimal order in any event and who had lived in rented accommodation for nine or ten years prior to the death of the testatrix. Because she had lived in that way she had, URJ FOX AND ANOR v DOCKREY (Clarke JA) 3 according to the argument, no need for a residence as was found by the learned Master. It seems to me, with the greatest respect, that that is an unjustifiably narrow manner in which to approach the question of need. The respondent was at the time of the trial 58 years of age. She was a married lady residing with her husband and they had two adult children, one of whom was living with the respondent. In about 1980 the respondent's husband's business failed and he went bankrupt and since that time had apparently not been earning any moneys. At least he did not earn moneys until after his release from a hospital in the late 1980s whereafter he received sporadic payments of a invalid pension. Quite apart from the respondent's husband's financial position were his medical indispositions. It is unnecessary to elaborate on these. It is sufficient to point out that he was and had been for many years an alcoholic and that some time shortly before the death of the testatrix he suffered a stroke. His condition was such that it was thought that he would need to live on the ground floor of any residence. When the respondent's husband's business failed and he became bankrupt she was, at the age of about 48 years, required to enter the workforce. She took employment as an insurance administrator and as the Master found she was the breadwinner for herself and her husband. As I earlier explained they lived in a flat, the rent of which was paid as to half by the respondent and as to half by her daughter. The respondent had no assets other than savings of about $6,000 or $7,000. The short, and I hope accurate, statement of her position at the time of her mother's death would demonstrate that she was not comfortably placed. The learned Master had regard to all of those facts and to the fact that the testatrix had obviously felt that the respondent had a moral claim to the testatrix's bounty by granting her one-fifth of the estate. Having regard to all of those facts, and in particular the lack of assets of the respondent and the fact that she did not own her own home, he concluded that she had demonstrated the relevant need and he then directed his attention to the question whether the provision in the will adequately met that need. I have read this part of the judgment under appeal carefully in the light of the written and oral submissions but I have been unable to find any error of principle or fact which affected the learned Master's conclusion that a need had been demonstrated. As T earlier indicated, I do not think that the authorities would support the view that one could isolate the fact that she had been living in rented accommodation for nine years and demonstrate, by reference to that fact, that there was no need. I tend, however, to think that that submission which Mr Parker put to the court was very much a subsidiary one, for his real attack was upon the question of adequacy. In his submission if one had regard to all those facts which are enumerated by Mr Justice McClelland the proper conclusion in this case was that adequate provision had been made for the respondent in the will. Again, however, it was necessary for Mr Parker to demonstrate not that this Court might have come to a different conclusion if it had been the court at first instance, but that the learned Master's judgment was tarnished by error. Mr Parker sought to meet this task in a number of ways, many of which focused on the relationship between the respondent and the testatrix on the one hand and the appellants and the testatrix on the other for many many years prior to the date of her death. In particular, Mr Parker pointed to the fact that there had 4 UNREPORTED JUDGMENTS been a number of occasions over the years when there had been estrangements between the respondent and her mother. These estrangements, in his submission, provided the background for a consideration of some occurrences in 1985 which were sufficient in themselves to explain the particular provisions of the will. What occurred in 1985 was that the testatrix's husband suffered a heart attack and died. That occurred in August 1985 and the evidence demonstrates that the testatrix was devastated by the death of her husband. She was very upset and was mourning for many months thereafter. While there was a conflict of evidence concerning the extent to which the respondent sought to comfort her mother, there is no doubt that the two appellant's provided much more comfort to her. This was explained by the respondent as resulting from her rather difficult position. She had to work to keep the family and look after her husband. This greatly restricted her time and did not give her the freedom to see her mother whenever she liked. Whatever may be said about the period until October 1985, it is clear that probably for about two years after that time there was complete estrangement during which the respondent did not see her mother. The reason for that was a rather unfortunate falling out which occurred when the testatrix indicated to the respondent that she would not attend the respondent's son's wedding. This was no doubt an upsetting event for both of them and it clearly had a major impact upon the respondent. Such impact was not mitigated by the fact that the first appellant also declined to attend the wedding. In any event, between October 1985 and about June 1987 there was no contact between the respondent and the testatrix and this obviously has been in the forefront of the thoughts of the appellants when considering why the will was made in the particular fashion in which it was. There was, however, a reconciliation in June 1987. Quite apart from those matters the court was required to consider the conduct of all the parties in the months prior to the death of the testatrix. The evidence here shows that the appellants, and the second appellant's wife, were very caring and devoted a lot of time and care and attention to the testatrix in the months before she died. The respondent did not give nearly as much assistance and it is asserted by the appellants that she gave none at all. She denied that saying that she visited her mother in hospital and it was just coincidence that they never met at the hospital. Whether or not she did visit her mother in hospital there is no doubt that she did not spend as much time visiting her mother as the appellants and again she explained that as a result of the difficult position in which she was placed. In the forefront of Mr Parker's argument was the statement that these facts were all of importance for consideration by the court and the learned Master failed to pay due regard to them. Mr Parker directed the court's attention to two statements made by the learned Master which he submitted demonstrated a lack of attention to the evidence and the absence of any proper analysis of the relationship between the parties. The passages are as follows: "Tt is unnecessary for the court to make findings in regard to each and every one of the shortcomings alleged by the defendants to have existed on the part of the plaintiff. It is obvious that there is a considerable degree of antagonism and dislike on the part of the defendants, especially on the part of John towards the plaintiff." URJ FOX AND ANOR v DOCKREY (Clarke JA) 5 And secondly, "Tt is unnecessary for me to recount in detail the events of the relationship between the plaintiff and her mother. Suffice to say, however, that that relationship was punctuated by a number of periods when the plaintiff and the deceased were not in contact with each other." The oral submission which was made really repeated what appeared in the written submissions, which, in essence, charged the learned Master with making an improper finding not based on a careful checking of the transcript, particularly of the cross-examination of the respondent and the evidence of the appellants and the second appellant's wife and the charge sister at the hospital. It should be stated at the outset that it is impermissible to extract short statements from a judgment and then to reason from them that the whole judgment is affected with error. It is important, in fact imperative, to consider each statement in the context of the judgment as a whole. Ihave been somewhat troubled by the concise nature of the two statements but bearing in mind the multiplicity of issues which faced the learned Master and the need to attend in a reasoned judgment to the critical issues, it seems to me that it would be wrong to conclude that there had been any failure by the Master to analyse, or give due weight to, the evidence which emerged before him and which in many instances was uncontradicted. True it is that he said that the relationship between the deceased and the respondent was punctuated by a number of incidents when they were not in contact with each other but that short statement by the learned Master was followed by a recitation of the assertions of unfilial conduct which had been made by the appellants. The recitation of those assertions makes it clear to me that the Master had in the forefront of his mind the very matters to which he is said to have failed to have given due weight. I do not accept that there has been demonstrated any failure by the Master to adhere to the task which was confronting him. The next submission pointed to another statement by the learned Master wherein the learned Master concluded that he was unable to accept that there had been, on the part of the plaintiff, any conduct disentitling her to the benefit of an order. It was submitted that the only construction to be placed on this statement was that the Master had treated the assertions of unfilial conduct as examples of conduct of the respondent which were claimed to have disentitled her from any order. That was, as I am prepared to accept, not a correct approach if indeed that is the approach taken. The question is however whether one should take the Master to have been regarding the incidents of allegedly unfilial conduct as relevant only on the issue of conduct disentitling. If he did as I have indicated he was in error but I do not think that that is the proper construction to be placed on the words in the judgment. Clearly enough the learned Master had to deal with a number of issues, including the issue whether there was evidence of misconduct by the respondent. He found that issue in the respondent's favour and his mere expression of that conclusion could not, unless it was absolutely clear, carry with it a consequential finding that he paid no regard to those matters on other issues. In my opinion, this particular ground of attack also fails. 6 UNREPORTED JUDGMENTS There were then two submissions which I hope Mr Parker will not think I am treating lightly when I say he placed less emphasis upon them. The first was the Master erred in not taking account of the fact that approval had been given by a lending authority of a loan to the respondent and her daughter of $79,000 and the respondent's savings credit of $6,000. Coupled with that complaint was the second submission that there had been an erroneous failure to take account of the motor vehicle accident compensation claim which was to be brought by the respondent's husband. In the latter instance I should point out that he was injured in a motor vehicle accident on 12 February 1991 and received quite serious injuries. The evidence was to the effect that he might receive compensation in respect of those injuries in the area of $50,000 to $80,000. Accordingly, Mr Parker said that the learned Master should have taken into account the possibility that the respondent might have available to her a portion of the sum of $50,000. I do not wish to elaborate in depth on those submissions for I am unable to agree with them. The learned Master did not overlook the relevant facts and in particular did not overlook the motor vehicle accident. Not only did he pay attention to it but he gave a reason why he should not place too much weight upon the possibility that the respondent might receive something in the end if her husband obtained compensation. The entitlement to a loan does not seem to me to be a matter which was entitled to any real weight. Certainly it was not an asset and in any event it would have had to be repaid. Nor do I regard the savings of $6,000, which the respondent said she would use for removal expenses and the like if she was able to buy a residence, as of importance. There is nothing in these grounds, in my view, which justifies this Court in concluding that there had been a relevant error made by the Master. I come now to a particularly troubling submission which cannot lightly be dismissed. In his judgment the learned Master said that there was no competing claim on the bounty of the deceased and for this reason the discretion of the court was unfettered. Strictly speaking, there was no competing claim but of course the learned Master was bound to have regard to all the circumstances, including the position and financial strengths of the other beneficiaries. The meaning of the statement in the judgment is perhaps difficult to come to grips with. However, it seems to me that if it is read in its context, which is that the two appellants were in comfortable circumstances, what the learned Master was seeking to convey was that in order to determine what order should be made in the respondent's favour, it was unnecessary to take account of the financially constrained situation of other beneficiaries. Here the evidence was to the contrary and accordingly an order which would normally be regarded as appropriate would not need to be cut down in the light of the financially difficult situation of other beneficiaries. If that is a correct way to approach what the learned Master said, then he was correct in what he was saying. It is not as though the situation was that one or other of the other beneficiaries was himself in a difficult financial situation such that it would be important that there be no reduction of his share of the estate. In particular, I have concluded, despite initial doubts that there is not reflected in the learned Master's statement any failure to consider the competing claims on the testatrix's bounty. URJ FOX AND ANOR v DOCKREY (Clarke JA) 7 There were two other submissions made in relation to the judgment viewed in the light of the evidence led at the trial. The first was that the learned Master was in error in departing from what was submitted was a principle of equality. It was said that the proper view on all the evidence was that if an order should be made then the estate should be divided equally between the three beneficiaries. There are, I recognise, a number of considerations in favour of dividing the estate equally three ways but, as I repeat, this Court is not entitled to approach the whole case as though no order had been made. Upon an examination of the Master's reasoning it is apparent that he gave careful attention to the position. He noted that equality was not decisive, and having regard to a situation of the parties, concluded that the appropriate order to make was the one which he ultimately made. I can find no error in this respect. Mr Parker also submitted that there was error in respect to the interest order made but during discussion he withdrew that particular submission and it is unnecessary to consider it. That brings me to another important aspect of this case and that is the fresh evidence which was admitted by consent. Before I turn to this I note that the Master referred specifically to the respondent's evidence that she wanted accommodation for herself and her husband, which was restricted on account of the physical and alcoholic problems of her husband. According to the respondent's evidence it must be ground floor accommodation with some degree of security from criminal elements. The learned Master undoubtedly accepted that evidence and turned his attention to what was an appropriate amount to allow for the acquisition of such accommodation. The respondent herself had said that enquiries indicated that it would cost her $250,000 and upwards for an appropriate two bedroom home unit. Those enquiries were however conducted in an area which the Master described as a somewhat expensive and socially sought after area. In the ultimate, the learned Master thought that the testatrix's moral duty to the respondent required him to make provision to enable to respondent to acquire some form of residence but not, he was at pains to point out, in an expensive upper class suburb. Accordingly, he allowed the sum of $200,000 upon the basis that that should be sufficient to meet the need of accommodation in an appropriate part of Sydney. Bearing that context in mind I turn to the evidence which was led by Mr Parker by consent. The evidence presented was in an affidavit sworn by the respondent on 16 October 1991 in support of a claim for expedition in which she said that on 8 October 1991 her husband and she separated. She said also that her husband had assisted with the purchase of some household items, using presumably his pension for this purpose, and that there was no possibility of a reconciliation with her husband. That evidence was supplemented by an affidavit of Vivienne Evans, the solicitor for the respondent, which was received by consent. This evidence explained the situation of the respondent's husband and presently I think it is only necessary to note that he is in an institution named Bridge House conducted by the Salvation Army, Newcastle, where he is undergoing treatment for alcoholism. The affidavit also makes the point that his compensation case will not be settled until such time as his condition has stabilised. Mr Parker's submission is that this evidence relating to events after the judgment falsifies the basis upon which the judgment was made. The learned Master considered the claim upon the basis that the respondent's need was for a ground floor flat to accommodate the respondent and her husband. Now, 8 UNREPORTED JUDGMENTS according to his submission, there is no need for accommodation for the husband because he had separated from the respondent. I should interpolate the observation that although the respondent said there was no possibility of a reconciliation a somewhat similar separation had occurred previously during which the respondent's husband sought treatment for alcoholism in an institution and yet the respondent did eventually take him back into her unit. However that may be, there is no doubt that the learned Master proceeded on a very precise basis, which is not reflected in the facts as they presently are. I have some doubt whether the new evidence, if it had been led at the trial, would have affected the order which was made but on balance I have reached the conclusion that although there may be doubt about it, it is true to say that the precise basis upon which the order was made no longer exists. In those circumstances it is my view that it is open to this Court to intervene and to consider the matter afresh in the light of all the evidence. Bearing in mind the fact that I have been unable to detect any error which has affected the learned Master's original judgment, it is important to determine whether the new evidence shows that any change of substance has occurred in the sense that the respondent would need a lesser or greater sum of money to meet the need which the Master undoubtedly found, that is, a need for her accommodation. When I have regard to this additional evidence, I find not the slightest indication that her need can be met by any lesser sum nor is there any indication that she will need a greater sum. The evidence is simply silent as to whether a ground floor unit with security is more or less expensive than a unit which the respondent will, in any event, need. Accordingly, there is no change of substance demonstrated by the new evidence. All that is shown is that at present the respondent's husband is living separately in an apartment and there is a real possibility that that situation may continue in the future. The evidence does not establish that in the financial sense the amount needed to meet the proven needs of the respondent is any less. In all the circumstances I would myself make the same order that the learned Master made. Accordingly, I would propose the appeal be dismissed, although there is a need for clarification of the additional orders to clear up a lacuna in the original judgment. GLEESON CJ: I agree with the orders proposed by Clarke JA and with his Honour's reasons for those orders. I would only add a couple of comments in relation to the particular matters that I have mentioned. Like Clarke JA, I was puzzled by the meaning of one passage in the reasons for judgment of Master McLaughlin. That passage followed a reference to the financial position of the two appellants and is in the following terms: "Suffice it to say that John is in extremely comfortable circumstances and that Ronald, although not so well off financially, certainly is not in need. Neither John nor Ronald has in respect of the estate of their mother a competing claim which would require that any order which might otherwise be made in favour of the plaintiff, should be reduced to accommodate the benefits given by the will to John or Ronald. There is no competing claim upon the bounty of the deceased. Accordingly, the discretion of the court to remedy the omission made by the deceased in respect to the plaintiff is unfettered." URJ FOX AND ANOR v DOCKREY (Mahoney JA) 9 If that passage is read literally it appears to involve an internal inconsistency. The learned Master makes a carefully qualified reference to the position of John and Ronald, saying that neither of those two beneficiaries had a competing claim that would require that any order which might otherwise be made in favour of the plaintiff should be reduced to accommodate the benefits given to John or Ronald. He then went on to make a completely general statement to say that there were no competing claims upon the bounty of the deceased. The problem would disappear entirely if one treated that second statement as omitting a single word. The word to which I refer is "other". If the second statement had been "There is no other competing claim upon the estate of the deceased" it would be easily reconciled with the first. That I believe is probably what Master McLaughlin meant and there may simply be a typographical error. In any event, I do not think that the Master could have been overlooking the circumstances which emerge from the facts that he had earlier referred to in his judgment, that both John and Ronald were close to their mother and that those two beneficiaries and Susan Fox had taken great care of the testatrix during the last part of her life. I do not think that the Master was intending to ignore that important fact or to treat it as irrelevant. The second comment I would make concerns the new evidence that was admitted by consent. If there had been an objection to the evidence there would have been, in my view, a serious doubt as to its admissibility; Mulholland and Anor v Mitchell (1971) AC 666, Hoover Australia Pty Ltd v Combatti (1989) 18 NSWLR 235, Doherty v Liverpool District Hospital (1991) NSWLR 284. In any event, the new evidence was simply evidence which contained a reference to the bare fact that the respondent and her husband are currently separated. There was no attempt made to demonstrate by detailed evidence concerning the respondent's present financial position, or by reference to the evidence as to her financial position given at the hearing at first instance, that the consequence of her separation from her husband is that she is now materially better off financially. So far as the evidence, including the new evidence, shows, it is possible that she is now better off financially and it is possible that she is not better off financially. We simply do not know. As I have said, I agree with the orders proposed by Clarke JA. Mahoney JA I agree with what has been said by the Chief Justice and by Clarke JA. I would only add this: The orders which are to be made, if made in the exercise of this Court's own discretion, would be in my opinion the same as those made by the Master. It may be that in view of the additional evidence, the reasoning would be somewhat different, or at least this Court would have to exercise its own discretion but however that be and on either basis I think the result would be the same. This result in a sense defeats what the testatrix intended. She intended that her sons who, accepting the findings of the Master, were closer to her at the time than the plaintiff, should have the bulk of the estate. The result of the order is different. However, this is the result of the legislation which this Court must administer. The legislation indicates that if this Court finds that a person making a will has not - I put the matter in the general and not legal terms - done what is expected of her and has failed to discharge the duty which under the legislation she has to make appropriate provision for those eligible for her bounty, then a particular order must be made to do what the testatrix should have done. 10 UNREPORTED JUDGMENTS In the present case the finding has been that the plaintiff had a need, being a need for accommodation and that the testatrix in this sense should have done to fulfil the duty which, within the terms of the statute it is to be held she did not fulfil. On that basis, the orders in question must, in my opinion, be made. I agree with the proposals and with the orders which have been made. GLEESON CJ: As was foreshadowed in the reasons for judgment of Clarke JA, although we are all of the view that in substance the appeal should be dismissed, there is one aspect of the order that was made that requires some rectification. Master McLaughlin simply ordered that in lieu of the benefit given to her by the will of her late mother the respondent could receive a legacy of $200,000, such legacy to bear interest from 7 May 1990 to date of payment. The order operates as a codicil to the will and having regard to the scheme of the will, it seems desirable that the order should make some provision as to what was to happen to the interest of the other beneficiaries. It has been submitted that we could interfere with the order that the legacy should bear interest from 7 May 1990 to the date of payment but we do not propose to interfere with that order. The orders that the court will make are as follows: In lieu of O.1 made by Master McLaughlin the Court orders that in lieu of the benefit given in para(c)(iii) of the will of Dulcie May Fox the plaintiff receive a legacy of $200,000, such legacy to bear interest from 7 May 1990 to date of payment and in lieu of the benefits given in para(c) (i) and (c) (ii) of the said will the defendants receive the residue of the estate in equal shares. Subject as aforesaid the appeal is dismissed with costs. Counsel for the appellant: RWR Parker QC and MT Bridger Solicitors for the appellant: Michael K Rawack and Co Counsel for the respondent: RW Cameron and P Lander Solicitors for the respondent: Uther Webster and James