McKENZIE v BADDELEY SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, HANDLEY JJA and HODGSON AJ 29-31 May 1995, 29 August 1995 [1995] NSWCA 283 FAMILY PROVISION ACT — ESTOPPEL ARISING OUT OF EARLIER DECISION Application under Family Provision Act, by person previously held by Court of Appeal to be an eligible person (McKenzie v Baddeley 3/12/91), is dismissed with costs. Appeal brought on grounds that trial judge erred in dealing with estoppels arising out of earlier decision, with the questions of "factors warranting" and of moral duty, and with questions concerning the appellant's credit and alleged diversion of moneys; in admitting evidence of the circumstances of persons entitled to the estate on intestacy; and in dealing with costs. Held (1) No appealable error shown. (2) The financial circumstances of persons entitled on intestacy are generally relevant. (3) (per Priestley, JA) When an order for separate trial of an issue is made, consideration should be given to making ancillary orders or obtaining undertakings with a view to ensuring that related issues in one proceedings are not decided by different judges upon different evidence. ORDERS 1. Appeal dismissed. 2. The appellant to pay the estate's costs of the appeal. 3. These costs to be set off against costs payable under an earlier order by the estate to the appellant. Priestley JA The details of the points argued in this appeal and the facts necessary to under stand those points are set out in the reasons of Hodgson AJA. Before coming to them, I comment on another aspect of this case. This is the second appeal in the proceedings brought by the appellant under the Family Provision Act 1982 (the Act) for provision to be made in his favour out of the estate of the late Mr FS Burton, who died on 18 May 1989. The first appeal was from a decision of Master Windeyer made on 16 May 1991 that Mr Mckenzie was not an eligible person as defined in s6(1) of the Act. Master Windeyer had earlier ordered that the question whether the appellant was an eligible person should be determined as a separate issue, before the decision of other issues in the proceedings. The evidence before Master Windeyer was mostly on affidavit. In addition to affidavits sworn by Mr McKenzie himself, there were fourteen further affidavits filed in his case. From the other side there was an affidavit dealing; with formal matters filed by the adminstratrix of Mr Burton's estate. The only person who gave oral evidence was Mr Mckenzie. No other deponent was cross-examined. The hearing of the proceedings took no more than one hearing day. On 3 December 1991 this court, (Hope AJA and myself, Meagher JA dissenting) set aside Master Windeyer's orders, holding that Mr McKenzie was an eligible person. In my reasons, with which Hope AJA agreed, I noted that in dealing with the evidence that was before the Master I had tried to keep myself to the evidence on the question of dependence, although there was further evidence in the case 2 UNREPORTED JUDGMENTS which would be relevant to the questions, under s9 of the Act, whether there were factors warranting the making of the application by the appellant and the extent of Mr Bulton's molal obligation to him. I added that those questions remained to be dealt with in the proceedings and that they were separate questions from that of eligibility (which involved a question of partial dependence) which was all that this court had dealt with, but that they had elements in common. The further issues in the proceedings, which led to the present appeal, were heard in August 1994 by Young J, a judge not noted for permitting hearings before him to be of unnecessary length, and took six hearing days. This was due to the different way in which the evidence was handled on the second occasion. This time, not only were there a number of affidavits read, but cross-examination upon them took considerable time. As against the one witness who had given oral evidence before Master Windeyer, there were twelve before Young J. The oral evidence of the appellant took up approximately ten pages of the appeal book in the first appeal, forty-four in the second. Young J's primary finding was that although he had to treat Mr Mckenzie as an eligible person in accordance with this court's earlier decision, he was not satisfied that the appellant had established there were factors warranting his making his application. On this basis Young J held the requirements of s9(1) were not fulfilled. On the evidence as it was eventually left before Young J, I am confirmed in the view I expressed in the earlier - appeal that the questions whether Mr Mckenzie was an eligible person and whether there were factors warranting his application had elements in common. The way in which the issues were separated for hearing meant that the question of eligibility was decided by a trial judge and three judges of this count on one body of evidence: and that the question whether there were factors warranting the application was later decided by a different trial judge and this court differently constituted, upon a much greater body of evidence. The second case was, in many ways, a different case from the first one. The way in which the division of issues worked has, in the particular circumstances of the present case, caused delay, expense and the unsatisfactory result of two related issues in the one proceeding being decided by different judges upon different evidence. I have not mentioned these circumstances in order to criticise the availability of the procedure which permits separate hearing of issues in one set of proceedings. The separate decision of issues may sometimes be beneficial. Nor, even with the benefit of hindsight, am I criticising Master Windeyer's decision to deal with the question of eligibility as a separate issue. The point that seems to me to be illustrated by the experience of the present case is the need for a court, when deciding whether or not to order the separate trial of a single issue to consider also whether, if a separate trial order is made at that stage, ancillary orders can be made, or undertakings obtained, which will prevent or at least limit the possibility of a course of trials before different judges such as the present case exhibits. Thought should be given to the making of orders or the obtaining of undertakings from the parties which will prevent or reduce the possibility of the trial of later issues being conducted on evidence which is not merely additional to that upon which the first issue will have been decided, but may be inconsistent with it. If such orders or undertakings cannot conveniently be made or obtained, then the most careful thought should be given before a separate trial is ordered, and such an order should only be made in what appears to be a very plain case, that is, one where the court can be reasonably URJ McKENZIE v BADDELEY (Hodgson AJA) 3 assured that making the order will neither lengthen or complicate the proceedings, nor make them more costly. I come now to the substance of the appeal. Although I agree, in a general way, with the detailed analysis and conclusions of Hodgson AJA, I prefer to confine myself to one ground for agreeing that the appeal should be dismissed. In addition to deciding the question whether there were factors warranting the application, which was for him the primary question, Young J also decided a number of other questions, one of which was: "E. Did the deceased owe any moral duty to the plaintiff?" In light of the facts that he had found, Young J said in answering this question: "The plaintiff has already taken sufficient to discharge any expectation that the plaintiff might reasonably expect to have to benefit from the deceased's estate." He accordingly answered question E "No" On Young J's view of the body of evidence before him he was in my opinion entitled to come to this conclusion. Even if some of the criticisms of his Honour's fact finding which were put to this court on behalf of the appellant were to be regarded as sound, I would not think any of them succeeded in displacing the primary factual findings upon which he based the opinion supporting his answer to question E. The central findings supporting that opinion seem to me to be well founded on the evidence, in the light of his Honour's assessment of the witnesses he saw. None of the appellant's criticisms, even if correct, would seem to me to provide justification for this court to interfere with his Honour's view of the facts going to this aspect of the case. I would dismiss the appeal on this ground. I agree with the orders proposed by Hodgson AJA. Handley JA I agree with Hodgson AJA. Hodgson AJA This is an appeal from a decision given by Young, J on 26th October 1994, by which his Honour dismissed a claim under the Family Provision Act brought by the appellant, Kenneth McKenzie, in relation to the estate of the late Frank Burton. The deceased died intestate on 18th May 1989, aged 83. According to the inventory lodged with the application for administration, he left an estate consisting of a house near Pambula worth about $200,000.00, furniture worth about $1,000.00, and money in various accounts amounting to about $69,000.00. The deceased never married, and had no children. The persons entitled on intestacy were a sister, a brother (since deceased), and a large number of nieces, nephews, grand-nieces and grand-nephews (forty two persons in all). Letters of administration were granted on 2nd unrelated to the deceased, but he claimed to be an eligible person within the definition in s6(1) of the Family Provision Act as being, within para(d) of the definition, a person "who was, at any particular time, wholly or partly dependent upon the deceased person" and who "was at that particular time or any other time, a member of a household of which the deceased person was a member". OUTLINE OF FACTS The appellant and the deceased met in about 1979. The deceased was then about 73, the appellant about 49. The deceased was an oyster farmer, living alone in a house near Pambula on the south coast of New South Wales. The appellant was then living in a caravan in the caravan park at Pambula. In the latter part of that year, their friendship apparently strengthened, and the appellant was visiting 4 UNREPORTED JUDGMENTS the deceased once or twice a week. The appellant also commenced driving the deceased around: the deceased did not have a car and did not drive, and he lived six or seven kilometres from Pambula. In about May 1981, apparently at the deceased's suggestion, the appellant moved his caravan on to the deceased's land. At that time, apart from his caravan, the appellant owned only a car and some tools and machinery. Subsequently, the appellant and the deceased lived as a household, doing shopping together and sharing many meals. According to the appellant, they had a homosexual relationship, they were inseparable companions, there was a strong emotional attachment between them, and the appellant helped the deceased with his oyster leases and to look after his property, as well as driving him around. In following years, the appellant grew vegetables on the deceased's land, which he sold in order to supplement his income from a social security pension. From 1982 onwards, the deceased had a number of admissions to hospital: for a week in November 1982 in Bega Hospital for excision of lesions; for four days in December 1984 in Pambula Hospital for cellulitis of the foot; for over five weeks in January to March 1986 for gout; and then several admissions in 1988 to 1989, to which I will return. In 1987, the deceased sold part of his property to Nancy Upton, the appellant's sister, for $50,000.00. During 1987 and 1988, the appellant received a legacy of about $21,000.00 from his father's estate. In early 1988, Mrs. Upton and her de facto husband built a house on this property; and the appellant built a besser block building on it at a cost of around $20,000.00, apparently for use in connection with his market garden activities, which were then conducted on the defendant's land, Mrs Upton's land and also on adjacent Crown land. On 15th March 1988, the deceased had a stroke, and was taken by ambulance to Pambula Hospital. He was discharged on 18th April; but the next day, he was found semi-conscious on the veranda of his house, apparently by the home-care sister, and was returned by ambulance to Pambula Hospital. He was discharged on 3rd May, but on 4th May was again found semi-conscious on his veranda by the community health sister, and was returned to Pambula Hospital. On 9th May, he was transfered to Bega Hospital; and on 20th May to Canberra Hospital. On 25th May he was returned to Pambula Hospital. Arrangements were made for his nephew, Roderic Burton, to come from the Wollongong area to look after the deceased, and on 11th July, the deceased was released from hospital into the care of Roderic Burton. Roderic Burton stayed with the deceased until 1st September 1988, when he left following an argument. The deceased remained out of hospital until 15th May 1989, when he was taken to Pambula Hospital following an attendance by his doctor, Dr Jenkins. He was discharged on 19th April. However, on 9th May he collapsed, he was taken by ambulance to Pambula Hospital, and he died there on 18th May 1989. In 1993, the appellant was asked to leave the Upton property by his sister, apparently in connection with his conviction on a charge of growing marijuana. At the time of the hearing before Young, J, he was living in his caravan, and had few assets. COURSE OF PROCEEDINGS The appellant commenced Family Provision Act proceedings on 23rd November 1990. On the-application of the respondent, there was a hearing by Master Windeyer of a separate question, whether the appellant was an eligible person within s6(1) of the definition in the Family Provision Act. On 16th May 1991, Master Windeyer decided that, although the appellant was for some time URJ McKENZIE v BADDELEY (Hodgson AJA) 5 a member of a household of which the deceased was a member, the appellant had not shown that he was wholly or partly dependent upon the deceased at any time. The appellant appealed to the Court of Appeal, which on 3rd December 1991, by a majority, upheld the appeal. Priestley, JA, with whom Hope, JA agreed, held that, particularly having regard to the rent-free use of the deceased's property for living and for growing vegetables for sale, the appellant was partly dependent upon the deceased. The proceedings were then heard by Young, J for six days, commencing 15th August 1994. His Honour delivered a judgment dismissing the application on 26th October 1994, and this appeal is brought from that decision. REASONS OF THE TRIAL JUDGE Young, J first considered whether there were, within s9(1) of the Family Provision Act, "factors which warrant the making of the application". His Honour expressed the view that a primary consideration was whether there existed what might be called a family-type relationship, between people who were willing to do things for each other without payment. He considered that he was bound by the Court of Appeal decision to find that there was a homosexual relationship between the appellant and the deceased; but not to find that this was a family-type relationship. Young, J found that the appellant lived more independently of the deceased than his evidence claimed; did not drive the deceased as much as he claimed; that, at least to March 1988, he and the deceased were two independent men living independent lives; and that the hospital records showed that the appellant's account of care provided by him to the deceased was exaggerated. His Honour also drew the inference from various matters that, over the last couple of years of the deceased's life, the appellant had been diverting the deceased's funds to himself. On the basis of all these reasons, his Honour found that there did not exist factors which warranted the making of the application. Although that was sufficient to determine the matter, his Honour went on to consider a number of other questions. He considered what provision had been made by the deceased for the appellant during his lifetime and whether that provision was adequate: see s9(2) of the Act. He held that the disposition of part of his property to Nancy Upton was not a provision made by the deceased for the appellant; but that the deceased did provide free-of-charge the land on which the appellant could rest his caravan and grow his vegetables, and also supplied the appellant with the money which the appellant appropriated. It appears that Young, J was not satisfied that this provision was inadequate. Next, his Honour asked whether provision ought to be made. He noted that the appellant, at that time, apparently had no assets apart from a 1974 Ford Falcon and perhaps a caravan, and had no income apart from a pension; and he went on to decide that the appellant had received enough to make up for any benefit which he had conferred on the deceased, and that the deceased did not owe any moral duty to the appellant. Young, J considered whether it was relevant or appropriate for the Court to take into account the circumstances of the persons who benefited on the total intestacy of the deceased; and came to the view that the circumstances of those persons was relevant. Next, he addressed the question, if an order was to be made in favour of the appellant, what should be its quantum. He expressed the view that, if there were factors warranting the bringing of the application and if there had been a moral duty, an appropriate amount would have been about $50,000.00. 6 UNREPORTED JUDGMENTS Finally, on the question of costs, he held that there were no special circumstances, within s33(2) of the Act, which would enable the Court to order payment of the appellant's costs out of the estate; and that the ordinary rule as to costs in adversary proceedings should apply. He therefore ordered that the appellant pay the respondent's costs. ISSUES ON APPEAL As the appeal has been argued, it is convenient to consider the issues under four headings: dealing with submissions to the effect that there were errors in Young, J's treatment of estoppels and evidence concerning the relationship between the appellant and the deceased, and errors on the question of whether there were factors warranting the making of the application and a moral duty owed to the appellant (grounds 1-5, 9-11); that it was erroneous to take into account the circumstances of the persons entitled to the estate on intestacy (ground 6); that there were errors vitiating his Honour's findings concerning the credit of the appellant and the diversion of moneys (grounds 7-8); and that his Honour should have found there were special circumstances justifying a costs order in favour of the appellant. I will deal in turn with these issues. FACTORS WARRANTING APPLICATION AND MORAL DUTY Grounds 1-4 in the notice of appeal were to the effect that the primary judge failed to give any or any proper or sufficient weight to issue estoppels arising from the Court of Appeal decision; to the emotional and psychological dependence on the appellant on the deceased; to the private homosexual relationship between the appellant and the deceased; and to the public discretion with which the appellant and the deceased conducted their private homosexual relationship in a country town. Ground 5 was to the effect that the primary judge erred in the way in which he evaluated the relevance and significance of evidence with respect to the carrying out of various tasks for the deceased. Grounds 9, 10 and 11 were to the effect that the primary judge should have held that the deceased owed a moral duty to the appellant; that there were factors warranting the application; and that provision ought to have been made out of the estate for the maintenance of the appellant. SUBMISSIONS Mr Bates for the appellant submitted that, in its earlier decision in these proceedings, the Court of Appeal had determined that (a) the appellant and deceased had been members of the same household for some years up to the determined that (a) the appellant and deceased had been members of the same household for some years up to the deceased's death, (b) the appellant was partially dependent on the deceased, (c) the appellant and the deceased were in a homosexual relationship, and (d) there was an emotional attachment between the appellant and the deceased. There was an issue estoppel as to all these matters; because issue estoppels arise not only as to the point expressly decided, but to every matter necessary to decide and actually decided: Egri v DRG Australia Limited (1989) 19 NSWLR 600 at 601. Dependency includes emotional dependency (see Petrohilos v Hunter (1991) 25 NSWLR 343); and in this case the Court of Appeal's finding of dependency included a finding of emotional attachment. The primary judge failed to give any, or any proper, weight to these findings of the Court of Appeal. Those findings were of themselves sufficient to amount to factors warranting the making of the application, whether or not one tested those factors by reference to a family type relationship. URJ McKENZIE v BADDELEY (Hodgson AJA) 7 Accordingly, Mr Bates submitted, the primary judge was in error to say that the plaintiff's case that he was really part of the deceased's family depended on his evidence alone. In any event, the following matters were not relevantly in dispute: that there was a close emotional relationship; that the plaintiff and deceased lived in the same household cooked for each other, shared meals, than anyone else; that they drove round together; that the appellant did work around the house and helped clear the deceased's land; that every afternoon around Spm, they hosted a joint social gathering on the verandah, having drinks with friends; that the appellant took the deceased to hospital and to doctors, and that the doctors used to give the appellant instructions for the care of the deceased; that the appellant looked after the deceased's dog; that they did their shopping together and painted the house together; and that generally they were like a couple living together. Mr Bates submitted that these matters were not challenged in cross-examination, and were corroborated inter alia by the Reverend Lamerton, who was not cross-examined on these matters, and by a letter written by Dr Jenkins. Mr Bates submitted that the primary judge was required to consider the quality of the relationship between the appellant and the deceased (McKenna v Solomon, unreported, Court of Appeal, 9/12/94), but focused on alleged negative aspects of the last eight months only, and failed to give weight to the positive close emotional and psychological bonds between the appellant and the deceased over many years. The findings of the primary judge failed to take account of the privacy and discretion required of this kind of relationship in a country town; and he was too pre-occupied with who did what physical and manual tasks, rather than directing attention to the significant emotional support and caring given by the appellant to the deceased. Next, Mr Bates submitted that the primary judge erred in requiring that a family-type relationship be shown in order establish factors warranting the making of the application. This was not supported by cases relied on by the primary judge, such as Moloney v Godwin, unreported, Needham, J, 1/8/89, and Churton v Christian (1988) 13 NSWLR 241. To do this was to gloss the statutory wording and to impose a limitation to pre-conceived classes or categories, contrary to Dykhuijs v Barclay (1988) 13 NSWLR 639 at 652 and Singer v Berghouse (No.2) (1994) 68 ALJR 653 at 657. Accepting that the true test was that stated in Churton, namely that there should be factors which, when added to the facts which rendered the applicant an eligible person, give him or her the status of a person who would generally be regarded as a natural object of testamentary recognition by the deceased, that test was satisfied in this case. Mr Bates then submitted that the primary judge did not, as he should have done, draw a distinction between matters relevant to the issue of whether there were factors warranting the application (s9(1) of the Act) and whether an order should be made (s9(2)). Insofar as moral duty was relevant, the appellant was owed such a duty whether arising out of a family-type relationship or on some other basis: see Goodman v Windeyer (1980) 144 CLR 490 at 497-498; Hughes v National Trustees Executors and Agency Co of Australasia (1978-1979) 143 CLR 134 at 147; Hunter v Hunter (1987) 8 NSWLR 573 at 578-579; Kearns v Ellis, unreported, Court of Appeal, 5/12/84; Moloney Godwin, unreported, Needham, J, 1/8/89. DECISION 8 UNREPORTED JUDGMENTS In order to decide the matters as to which there was an issue estoppel arising out of the earlier Court of Appeal decision, it is necessary to read the leading judgment carefully, in order to ascertain what matters were treated as necessary to decide and actually decided, as distinct from mere evidentiary facts. It is true that Priestley, JA, in reciting the evidence upon which the appellant relied, noted that the relationship between the appellant and the deceased became a homosexual one; and noted further that "the fact that it existed is relevant in that it shows there was an emotional attachment between them and is one of the factors explaining the care and assistance given by the appellant to Mr Burton in his declining years". Priestley, JA went on to note that "the evidence to this point may well be at least as consistent with non-dependence as with partial dependence". Then, after dealing with evidence concerning the selling of vegetables, Priestley, JA went on to find "that the appellant was to some extent dependent in the material sense upon Mr Burton". He said that he based his conclusion "on appellant was to some extent dependent in the material sense upon Mr Burton". He said that he based his conclusion "on materials, which so far as I can see, were beyond dispute at the hearing". I believe it is clear that the partial dependence to which Priestley, JA referred was a material dependence only, constituted by the appellant living on the deceased's property for eight years rent-free, and having the use of the deceased's property to grow and sell vegetables for a return of $20.00 per week. In those circumstances, I am not certain that I would have agreed with the primary judge that there was an issue estoppel as to the existence of a homosexual relationship. However, there is no notice of contention in relation to that question, and I will proceed on the basis that the primary judge was correct in that matter. However, there is, in my opinion, no issue estoppel whatsoever as to the nature or quality of that homosexual relationship, nor as to the existence, nature or quality of any emotional attachment between the appellant and the deceased; and so no basis for the suggestion that issue estoppels established the existence of factors warranting the application. As regards the submission that the evidence of the relationship and emotional attachment was not relevantly in dispute, in my opinion there was other evidence, referred to that given by the appellant and corroborating witnesses; and that, subject to matters which I will discuss in relation to the grounds of appeal concerning the credit of the appellant, Young, J was entitled to prefer the general picture given by the respondent's witnesses to that given by the appellant and his witnesses. Accepting for the moment that Young, J's view as to the credibility of the appellant was justified, his Honour was well justified in holding that the appellant's account of the closeness of his relationship to the deceased and of the extent of care which he rendered to the deceased was substantially exaggerated. I do not think there is any substance in the suggestion that the primary judge erred in failing to distinguish the question under s9(1) of the Act and the question under s9(2) and s9(3). In my opinion, as made clear in Churton, it is impossible to draw a clear distinction between these matters. I think it is preferable to approach the question of whether there are factors warranting the making of the application, under s9(1), in the general terms suggested in Churton; but it is not unhelpful to consider whether there was a family-type relationship between a claimant under the Act and the deceased. I do not read the judgment of the primary judge as stating that there can only be factors warranting the making of the application if there is a family-type relationship; and in my opinion, the question whether the relationship was a family-type relationship is a family-type URJ McKENZIE v BADDELEY (Hodgson AJA) 9 relationship; and in my opinion, the question whether the relationship was a family-type relationship is a very relevant and important one. 'Young, J summarised the relevant considerations, as he saw them, in the following way: "Accordingly, the picture that is presented is that of a person who lives in close proximity to the deceased for eight years, who lives a fairly independent life of the deceased (sic) up until the deceased gets sick in April 1988, then spends some thirteen months in caring for the deceased, at least to some extent, but is not a full-time carer and is benefiting himself because of his position of influence over the deceased. The question then must be asked whether such a person was in a family-type relationship or such close proximity to the deceased that there are factors warranting the making of an application." His Honour went on to say that the matter was one of fact and degree, and expressed his view that the answer was "no". In my opinion, if Young, J's views as to the credit of the appellant, and as to the appellant appropriating funds of the deceased, were correct, there is nothing in these grounds of appeal which suggest to me that his Honour was in error in this conclusion. CIRCUMSTANCES OF BENEFICIARIES UNDER INTESTACY Ground 6 of the appeal was that the primary judge was wrong to admit evidence of the individual circumstances of a selection of a number of intestate beneficiaries: such evidence was wholly inadmissible, or was inadmissible because the circumstances of only a selection of the in giving undue weight to such evidence. SUBMISSIONS Mr Bates submitted that the individual circumstances of intestate beneficiaries were not relevant, for the following reasons. The claim under an intestacy is granted by a statutory distribution, arising from the formal relationship with the deceased, and not out of any moral duty. The entitlement of intestate beneficiaries was neither based on need nor upon any wish of the testator. Furthermore, if the Court were to have regard to the circumstances of individual intestate claimants, the length and cost of Family Provision Act applications would become inordinate. And in this particular case, the Court was provided with information only as to a selection of intestate beneficiaries: it could be that other intestate beneficiaries were wealthy persons with no need whatsoever. DECISION The Family Provision Act, by its reference to "circumstances" in s7 and s5(3)(c), and to "all the circumstances of the case" in s9(1), makes it clear that there is to be no narrow circumscribing of matters relevant to the making of an order. In general terms, in my opinion, the financial circumstances of any person who would be prejudiced by an order in favour of the applicant may be of relevance, whether that person is a beneficiary under the deceased's will or a person who takes on intestacy. The relevance may be slight, as I believe it was in this case. His Honour held that the evidence was admissible, and I agree with that holding. The judgment does not suggest that he gave very much weight to this material, and I see no basis for the suggestion that he gave undue weight to it. There may be some force in the suggestion that the relevance of the material did not really justify the expense of preparing the relevant evidence, and that this should, in some way, affect the costs order made in this case. I will consider this when I come to consider the submissions about costs. 10 UNREPORTED JUDGMENTS CREDIT OF APPELLANT AND ALLEGED DIVERSION OF MONEYS Ground 7 of the appeal was that the primary judge misused his advantage in making adverse findings concerning the appellant's credit and/or in the weight given to those findings as bearing on the ultimate issue. Ground 8 was that there was no admissible evidence to the requisite level of comfortable satisfaction from which the primary judge was properly entitled to infer or find that moneys of the deceased were being diverted to the appellant; and, even if such inference or finding was open, the primary judge was wrong in the weight given to it. SUBMISSIONS Mr Bates pointed to a statement in the primary judge's reasons to the effect that a witness, Roderic Burton, "was told by someone that the plaintiff was a crook"; and he submitted that no such evidence was given. Mr Bates also pointed to statements by the primary judge that the defendant and beneficiaries on intestacy appeared to him to have spent a lot of money in contesting this litigation "to clear the deceased's name, they thinking it is a shocking thing their relative should be found to have been in a homosexual relationship". Mr Bates submitted that there was no evidence of that matter either. He submitted that those statements by the primary judge indicated bias against the appellant, and a willingness to find adversely to him on matters not supported by evidence. Next, Mr Bates claimed there were a number of errors in the primary judge's analysis of financial matters. In particular: 1. On 39 of the judgment, just past half way, 1987 appears three times where the correct date is 1988; and further towards the bottom of the page, 1988 appears twice where the correct date is 1989. These errors were relevant, in relation to further errors set out below. 2. Also on 39 there is reference to "a series of deposits... the origin of which is unexplained". In fact, as the cross-examination of the appellant showed, these deposits were the proceeds of the sale of vegetables. 3. On 40, his Honour said that "the plaintiff needed about $8,000.00 in January 1988 which he did not have in his account". In fact, after $1,004.00 had been deposited on 13th January 1988, the appellant had sufficient in his account to cover the amount of $8,600.00 withdrawn on 27th January 1988. 4. On 41, the primary judge stated that "the plaintiff's bank account was reduced to $7,687.00 in December and further reduced to $92.00 in January 1988 and that concurrently the plaintiff was putting up a besser block building on his sister's land which cost up to $20,000.00 in progress payments made over a period of two years". In fact, $8,600.00 was withdrawn on 21st January 1988, and in addition, the second instalment of the legacy from his father's estate, $7,572.00, was received on 25th May 1988. 5. On the same page, his Honour said that the deceased's hospital bills, "were not payable at all because the deceased was a pensioner and fully covered by the Commonwealth Health Funds benefits". In fact, there was no satisfactory evidence on which his Honour could make that finding. Mr Bates referred to other matters suggesting undue haste and lack of attention to detail, and manifesting prejudice and bias of a material degree against the appellant. First, he submitted that the comment by the primary judge that "I would not have been prepared myself to have accepted that there was a homosexual relationship on the evidence before me" was gratuitous, as that issue had already been determined by the Court of Appeal. Next, the primary judge said that "the evidence in the case shows quite clearly that the plaintiff could not be correct when he says that he worked on the oyster leases and cleaned them up URJ McKENZIE v BADDELEY (Hodgson AJA) 11 in order for them to be sold"; but there was undisputed evidence from the respondent's own witnesses that two of the oyster leases were not sold until after the appellant moved into the deceased's household, so, Mr Bates submitted, the appellant's evidence could have been correct. Thirdly, the primary judge's remarks about the relative legal costs incurred by the appellant and the respondent were wrong, again indicating lack of attention to detail of the evidence. The onus was on the respondent, not the appellant, to prove allegations of diverting the deceased's funds to a level of comfortable satisfaction: Helton v Allen (1940) 63 CLR 693, Hughes v National Trustees Executors and Agency Co of Australia (1978-1979) 143 CLR 134; Briginshaw v Briginshaw (1938) 60 CLR 336 at 343, 350, 363, 365 and 368. Because of the errors of the primary judge, particularly relating to the financial matters, it was necessary for the Court of Appeal to review the evidence; and the Court of Appeal should find that the evidence does not justify the adverse findings of the primary judge on the credit of the appellant or his findings that the appellant was diverting the deceased's funds to his own use. DECISION In my opinion, the alleged errors in the primary judge's reasons concerning financial matters amount to the most substantial matter in this appeal. The primary judge did make the error as to dates which I have numbered | above, and that error does have some bearing on the other matters; in particular, in that the true date of the second instalment of the legacy from the father's estate meant that it was available to go towards the cost of the besser block building. The sizable deposits referred to in the paragraph numbered 2 above were shown by the cross-examination of the appellant to be largely referable to the sale of vegetables, and to that extent they were explained. However, the deposits between January and May 1987 amounted to about $1,800.00, while the net proceeds alleged by the appellant from the sale of vegetables amounted only to about $20.00 Per week or a total of about $400.00 in that period. The deposits in January to April 1989 totalled about $2,000.00, and $20.00 per week during that period would have amounted to about $340.00. If the appellant's claim that his net receipts from the vegetable business were never more than around $20.00 per week was correct, there must have been expenses associated with these receipts of around $3,000.00. Certainly, no explanation was given of these expenses, or of the sources of money from which these expenses were paid. The complaint I have numbered 3 above seems to be well founded. As regards the complaint I have numbered 4, it would appear that something like $16,000.00 of the $20,000.00 cost of the besser block building could be explained by the withdrawal of $8,600.00 in January 1988 and the receipt of over $7,500.00 on 25th May 1988. That would still leave $4,000.00 unexplained; and that matter has to be considered in the context of withdrawals totalling $6,950.00 from the deceased's bank account, made in cash to the appellant, during the period 11th August 1988 to 7th February 1989. Although the total of the appellant's benefit from his father's estate exceeded $21,000.00, over $6,000.00 had already been withdrawn in 1987, a year in which the appellant purchased a tractor and a new caravan. Those items were stated, as at 4th January 1991, to have values respectively of $1,500.00 and $1,800.00. 12 UNREPORTED JUDGMENTS As regards the complaint I have numbered 5, there was some evidence that the deceased's hospital-bill was not payable by the deceased, but I accept the appellant's submission that that alone would not have justified a confident finding that the cheque for $493.99 made out to Pambula Hospital was not paid to that hospital. Turning to the other points raised, it is true that there was no evidence before the primary judge that Roderic Burton had been told that the appellant was a crook: it seems clear that this statement in the judgment is derived from evidence given by Roderic Burton about a telephone call from the appellant saying that the deceased was "crook", meaning unwell. However, the remark by the primary judge was related only to his assessment of the reliability of the evidence of Roderic Burton, and not at all to the credit or credibility of the appellant. Indeed, if there is any criticism to be made of the primary judge's reasons at that point, it is in my opinion rather that he formed too much of an adverse view of Roderic Burton, on the basis of supposed differences between two affidavits, only one of which was before the Court. Similarly, the primary judge's reference to his view of the motivation of the respondent and the beneficiaries does not, in my opinion, indicate any bias whatsoever against the appellant. Furthermore, his comment that he would not have been prepared himself to have accepted there was a homosexual relationship was, in my opinion, not gratuitous, because the conflicting evidence given by the appellant on this matter, which may have amounted to perjury in that two inconsistent statements were made by him in circumstances where mistake seems unlikely, went very seriously to the credit of the appellant. I will return to the matter of the oyster leases when I give my own views on the credit of the appellant; and I can see no basis for any suggestion that any error about quantification of costs has any bearing on the primary judge's decision in this matter. In my opinion, even taking all the matters relied on cumulatively, no case of bias or apparent bias is made out. However, the matters concerning the financial issues, even qualified to the extent to which I have qualified them above, do, in my opinion, make it necessary for this Court to look at the evidence and come to its own conclusion on the evidence as to whether the ultimate finding of the primary judge was correct. Before looking further at the financial matters, I should say that, in my opinion, the evidence amply justified the primary judge's adverse view on the credit of the appellant. In the first place, as noted above, the appellant squarely denied in cross-examination that he had a homosexual relationship with the deceased; and, on the same day, in re-examination after consultation with his Counsel, asserted that they had had a homosexual relationship, giving the explanation of the contradictory evidence given in cross-examination that he was "too embarrassed to say". In circumstances where homosexuality had been hinted at, albeit not squarely alleged, in his affidavit, and had been put as part of the evidence before the Court of Appeal, the explanation of embarrassment is a very weak one for the giving of such contradictory evidence. I conclude that the appellant was willing deliberately to give false evidence on oath. Next, in my view, the evidence amply supported the primary judge's finding that the appellant's evidence about his driving of the deceased was exaggerated, and that his evidence concerning the care of the deceased, particularly in the last months, was substantially exaggerated. In my opinion, the evidence does indicate that the appellant was not prepared to accept responsibility for the care of the URJ McKENZIE v BADDELEY (Hodgson AJA) 13 deceased upon his release from hospital in July 1988, and it was only the arrangement for Roderic Burton to attend and look after the deceased which enabled the deceased to be discharged at that time. This is confirmed by the evidence suggesting that the appellant's efforts during 1988 and 1989 were substantially directed towards his market gardening business and his activities on his sister's land. Furthermore, in my opinion, the primary judge's finding that the appellant's evidence about looking after the deceased's house, and suggesting that it had merely been untidy for a few days, should not be accepted against the evidence by the respondent that it was found to be in a filthy state. Next, in my opinion, the primary judge was justified in finding that the appellant's evidence was wrong in relation to working on oyster leases. The appellant gave evidence that the deceased had five oyster leases which were sold for $14,500.00 in 1982; and that the deceased sold three after he moved onto the deceased's property and the rest later. That evidence was never sought to be qualified or explained, even though it was plain that the bulk of the proceeds of the sale of the deceased's oyster leases, namely $13,450.00, was received by the deceased on 2nd January 1981, about four months before the appellant said he moved onto the deceased's property. The evidence concerning financial matters has to be approached having regard to the credit and credibility of the appellant, as disclosed by the above considerations. It is clear that the appellant obtained $6,950.00 in cash from the deceased's account between August 1988 and February 1989, using cheques signed by the deceased. Of this amount $988.65 was applied for rates on 7th February 1989. However, the appellant was unable to produce any document in support of his claim that the balance of this money was spent for the deceased's purposes, and his account of suggested purposes was highly implausible. Furthermore, these withdrawals were made at a time when the appellant was completing the erection of a $20,000.00 structure, in relation to which the legacy from his father's estate could only account for about $16,000.00. A further $1,000.00 could have been provided by a withdrawal of that amount in November 1988 from the account into which the appellant's pension was paid; but there was also, in addition to the money for the besser block building, a bill rendered to the appellant of $1,440.00 on 10th January 1989 for the digging of a bore, and a bill rendered to the appellant and paid on or about 7th February 1989 of just under $260.00 for a mechanical cultivator. There were withdrawals from the deceased's account of cash of $1,500.00 on 19th December 1988, $1,750.00 on 12th January 1989, and $1,950.00 on 7th February 1989, of which only $988.65 applied for rates on 7th February 1989 has been satisfactorily accounted for the appellant. In this period, following the $1,000.00 withdrawal in November 1989 to which I have referred, there was no substantial withdrawal from the appellant's own accounts. When one adds to this the circumstances that there is no satisfactory explanation for the change in the deceased's pattern of withdrawals which occurred from 11th August 1988, that the appellant was incurring expense in setting up and expanding his business over this period, that the appellant's business apparently ceased to produce receipts when the deceased died, and that the appellant gave no satisfactory explanation for the withdrawals or for his inability to produce receipts, in my opinion the inference drawn by the trial judge that the appellant was diverting the deceased's funds to himself was thoroughly 14 UNREPORTED JUDGMENTS justified. I should add that I consider the primary judge was justified in rejecting the appellant's claim that he had delivered money and pension cheque to his solicitor George George. In coming to this view, I do not give any weight to the submissions on behalf of the respondent that the deceased's pension during April, May and June 1988 is not accounted for, because four pension cheques were deposited in the deceased's account on 9th May 1988, and a further three cheques deposited on 24th June 1988. I do not give any weight to the suggestion that the cheque for $493.99 in favour of Pambula Hospital was not paid to Pambula Hospital. In all those circumstances, in my opinion the general conclusion reached by the trial judge as to the credit of the appellant, and as to the diversion of funds, was correct; and it then follows from my earlier reasons that the appeal on the substantive question should be dismissed. COSTS Ground 12 of the appeal was that the primary judge should have held there were special circumstances making it just and equitable to order the respondent to pay the appellant's costs pursuant to s33(2) of the Family Provision Act. SUBMISSIONS Mr Bates submitted that there were special circumstances, including the lengthening of the overall proceedings by the respondent's application, that was opposed by the appellant, to have the matter divided into a preliminary hearing on eligibility and a final hearing thereafter on the merits; and also by much unnecessary evidence adduced by the respondent concerning the individual circumstances of intestate beneficiaries. Mr Bates also submitted that the respondent did not comply reasonably with her duty to place material before the Court concerning the value of the estate. DECISION This case was contested at undue length; but in my opinion this was the responsibility of both sides. The appellant obtained an order for the costs of the preliminary issue, so I do not believe the division of the matter justifies an order more favourable to him as regards the rest of the case. I see no error in the primary judges' decision on costs. CONCLUSION In the result, in my opinion the appeal should be dismissed with costs. The costs payable by the appellant to the estate should be set off against those payable by the estate to the appellant. COUNSEL: Appellant: PW Bates Respondent: MA Gilmour SOLICITORS: Appellant: Thomson Rich O'Connor Respondent: NG Whelan