Moore v Moore [2004] NSWSC 587

New South Wales Supreme Court

CITATION : Moore v Moore [2004] NSWSC 587 HEARING DATE(S) : 30/06/04 JUDGMENT DATE : 30 June 2004 JURISDICTION: Equity Division JUDGMENT OF : Young CJ in Eq DECISION : Plaintiffs' claim dismissed.

CATCHWORDS : PROCEDURE [566]- Costs- FPA- Limitations on party/party costs and costs out of estate considered. SUCCESSION [307]- FPA- Small estate- Spouse's benefit paramount- Insufficient to provide for adult sons with some needs. LEGISLATION CITED : Family Provision Act 1982 Wills Probate & Administration Act 1898, s 61D Luciano v Rosenblum (1985) 2 NSWLR 65 CASES CITED : Marshall v Carruthers [2002] NSWCA 47 Singer v Berghouse (1994) 181 CLR 201 Gordon Lindsay Moore (P1) PARTIES : Craig Allan Moore (P2) Shayne Malcolm Moore (P3) Jane Moore (D) FILE NUMBER(S) : SC 3800/02 COUNSEL : J A Trebeck (P) J E Sexton SC (D) SOLICITORS : Maria Mico (P) Lee & Lyons (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG CJ in EQ

Wednesday 30 June 2004

3800/02 – MOORE v MOORE JUDGMENT 1 HIS HONOUR: The present proceedings concern three applications made under the Family Provision Act 1982 by the three sons of the late Lindsay Gordon Moore, who died on 30 January 2001 intestate. 2 The deceased was married twice. His first marriage was to Eileen Waldon, whom he married on 30 October 1965, from whom he was divorced in 1992, and who is the mother of the three plaintiffs. The deceased was remarried in 1994, to the defendant. She was granted letters of administration of his estate on 30 October 2001. 3 The parties have agreed that the estate has a current value of $955,741, in accordance with the document I have marked MI02 and will be left with the papers. The major asset is the deceased's home at 6 Mark Street, Hunters Hill, valued at $900,000. That value is agreed by the parties as being correct. 4 The three plaintiffs are Gordon Lindsay Moore, Craig Allan Moore and Shayne Malcolm Moore. I will refer to them by their first names for ease of reference. 5 Might I say, before dealing with the circumstances of each of the plaintiffs, that whilst I have often said how poorly these Family Provision Act matters are conducted in this Court, this case is a shining exception. The way in which the case was presented, both by Mr Trebeck, on behalf of the plaintiffs, and by Mr J Sexton SC, on behalf of the defendant, was a model of how these cases should be handled. The written submissions were fully detailed, cross-referenced, concise and to the point and there was no waste of time in needless cross-examination. I was very much assisted by the professional way in which both counsel approached the matter. Accordingly, I can take the circumstances of each of the plaintiffs to a great degree from the summary in Mr Trebeck's written submissions. 6 Gordon is 38, a married man and a carpenter by trade. His taxable income is about $49,000. He has a house at Mannering Park on the Central Coast worth about $250,000, but which is mortgaged for $135,000. This mortgage has substantially increased in recent years for, I think, two reasons. First of all, there was some work that had to be done on the property, but secondly and more significantly Gordon has fallen into health problems. He is also in, what might be called, a mess financially, not having lodged any taxation returns for the last three years. His wife works for six hours a week as an office cleaner to produce income for the family, and they have three children aged 13, 11 and 8. 7 Gordon says that his need is to relieve his straitened financial circumstances caused by his health problems, and to provide a buffer against further medical expenses for himself and for general contingencies. 8 Craig has had a hard life. He seems to have had almost every minor misfortune and some major misfortunes, including on one occasion being bitten by an emu. 9 He describes his current occupation as customer business manager, and his annual income is about $48,000. He has no substantial assets, and has some debts. He is divorced, but is currently living with a lady, by whom he recently had a son. Apart from that son, he has three children, including a son who appears to have some considerable mental problems. His health is not good. His needs are said to be for housing, because he rents his home at the moment paying $240 a week rent, and he needs to put a deposit on a house, and something to cover the gap between what most lending authorities will advance and the deposit, as well as a buffer against future expenses relating to his son and his own health problems. 10 Shayne is 33. He is married. He is also a carpenter by trade, earning about $57,000 a year. He has one child. His wife earns a net sum, after taking out childcare expenses, of about $230 a week. They own a home in Marsfield valued at $600,000, but they have heavy mortgage repayments of about $775 per week. 11 Shayne also has a one-third interest in a unit at Meadowbank, subject to a mortgage. He has some health problems, but not as great as his brothers. Those health problems may mean that he has to stop work as a carpenter before normal retirement age. His needs are to upgrade his house and to replace his present motor vehicles. 12 The widow is 54. She worked as a nurse's assistant in a nursing home, but has not worked in the last few years. She came from China in 1989 and obtained permanent resident status in Australia in 1992. She met the deceased in late 1991 and in early 1992 moved into his home in Hunters Hill. She and the deceased became engaged in 1992 and they were married on 3 April 1994. 13 The defendant widow's affidavit shows that she and the deceased lived harmoniously. For the duration of their marriage they lived in the Hunters Hill property. The deceased on the divorce from his first wife gave up his farm at Wyee to his former wife. He received moneys from the divorce settlement of about $60,000, which he put into renovations of the Hunters Hill house. The defendant also contributed, she says, some $70,000 towards the renovation of the house, and it would appear that those renovations have increased the value of the property. To what extent, however, I am unable to say. 14 The house is at Hunters Hill. Hunters Hill is notorious as being a high value suburb with high land values. The photographs of 6 Mark Street, Hunters Hill, as attached to the valuation of Mr Gardner, show a single front weatherboard cottage, which has been renovated and extended with a new two-storey section built on the rear. It is a property which is protected by the heritage conservation scheme. The original section of the house is about 100 years old. It is valued at $900,000, as I have said, and is in the Saint Joseph College area of Hunters Hill, rather than the peninsula, but it does not appear to me to be anything more, for living purposes, than an average suburban home. It is certainly not a palatial mansion, although Mr Trebeck has pointed out that it is quite a spacious home and that it has three bedrooms, bathrooms upstairs and downstairs and a study. 15 The title to the property was solely in the deceased's name. However, the defendant exercised her right under s 61D of the Wills Probate and Administration Act 1898 and, because the Hunters Hill property was a dwelling house at the date of the deceased's death occupied by him and the defendant as their only principal residence, she was entitled, as administrator, to transfer the mortgage to herself. 16 There is no doubt that she acted within the time and under the conditions required by the section of the regulation. This means that the property is held on trust for her, and that the balance of the estate, which would appear to be about $55,000, is held as to one-third each for each of the plaintiffs. Accordingly, had they not brought this application, each of the plaintiffs would probably have received about $18,000. 17 The affidavits as to costs have been filed in accordance with the usual practice. The defendant's costs are noted at $35,000, approximately, and the plaintiffs' at $85,000, approximately. Accordingly, if the court were to make an order for costs, and an assessor were to allow them at that rate, then the only asset would be the house, which would have to be mortgaged to the extent of about $75,000 to pay the costs. 18 The claim by each of the sons is slightly different. It is clear that the claim of Craig is greater than the claim of Gordon, which is greater than the claim of Shayne. But in all cases, the claim can be fairly described, as was put in submissions, as essentially one of a buffer for contingencies. 19 There was no cross-examination as the basal facts are fairly clear. Included amongst the basal facts is the fact that there was little contact between the deceased and his three sons certainly after 1990. The reason for this is not completely clear. 20 There was an argument with Gordon close to the time of his marriage in 1990, which, in retrospect, looks minor, but appears to have been an incident which triggered pent up feelings. However, the evidence shows that from about 1987 the deceased himself had some mental problems, and that at least some of the non-contact was due to the mental state of the deceased. 21 It was clear that on at least some occasions when one of the sons attempted to make contact either the deceased repelled it, or the defendant made it clear that the association was upsetting the deceased and should cease. However, there is also evidence that none of the sons sent to the deceased even a birthday, father's day or Christmas card for at least the last seven years of his life. 22 I relate those matters not in any sense by way of what used to be call "conduct disentitling", but because they do give a picture of persons who for the last seven years, no matter what the cause, were living separate emotional and financial lives. 23 I have little doubt at all that if the estate left by the deceased was three times as large the case would be a perfectly good one to give the sons legacies of, perhaps, in the case of Craig some $75,000 to $100,000, and the others less. I have also little doubt that if the estate was half or two-thirds the size, despite the claims of the sons, and despite the problems that they do have financially and health-wise, the claim of the widow would be paramount and there would not be enough money to provide any benefaction to the sons at all. 24 The great problem in this case is that the estate is, as I have said, the house, plus about $55,000. 25 The cases on the application of the Act are not of great assistance when dealing with the current problem, but they do set out various guidelines which judges must take into account. One guideline is that each case is different, and that one must look at all of the circumstances of each particular case and make a judgment as to (to put it loosely) what the community would expect a testator, or an intestate, in the position of the deceased to have done in respect of the various claims that were made on his bounty. 26 The way in which courts these days have to consider the matter is as set out by the High Court in Singer v Berghouse (1994) 181 CLR 201, 209, and that is a two-stage approach. 27 First, one considers whether the provision made for the son was inadequate for his proper maintenance, education and advancement in life, and then one proceeds to a second stage, if need be, to work out what is the proper level of maintenance and what is adequate provision. However, in both cases the court must take into account the applicant's financial position, the size and nature of the deceased's estate, the relationship between the applicant and the deceased, and the relationship between the deceased and other persons with legitimate claims. 28 Secondly, the authorities show that the claim of the widow is paramount. Now, that word "paramount" does not mean that the widow must always be given first priority, but it means that usually, generally speaking, the community expects that a man will leave his widow with sufficient provision before he turns his mind to what other claims there are on his bounty. 29 In Luciano v Rosenblum (1985) 2 NSWLR 65 at 69, Powell J said that generally speaking one expects, as a broad general rule, that the duty of a testator to his widow is to ensure that she is secure in her home, to ensure she has an income sufficient to permit her to live in a style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies. 30 In Marshall v Carruthers [2002] NSWCA 47 at [74] I made it clear that what Powell J had said in Luciano was not able to be applied holus-bolus to every case, and the broad general rule may be inapplicable in the case of spouses who were not financially independent and did not bring up the deceased's children. Palmer J at [78] agreed with my remarks. 31 In the instant case the defendant widow does not have children. However, the evidence is that she would have had children had it not been for the fact that the deceased made it quite clear to her that he had had so much trauma with his children from his first marriage that he would not contemplate having any more children. 32 The defendant worked in Australia in a relatively lowly paid position. She still has potential to work in a similar position. She is only 54, but over the last seven to nine years of the testator's life she was dependent on him. She made a contribution to the home at Hunters Hill and she has expressed the wish in her affidavit that she continues to live in that area. However, it is not a case, like many others, where the widow has given evidence of her attachment to the area because of bridge clubs, and church, and people, et cetera. All she does say is that she regards the Hunters Hill house as her home, she is settled in the neighbourhood and able to enjoy memories of her husband, and would feel dislocated if she was forced to move. 33 The attitude of the plaintiffs is that the house is far too much for the widow, and that the widow would be well able to be accommodated in a home or unit costing some $350-500,000, and that if the house were sold, and substitute accommodation purchased for her at about that figure, that would release sufficient moneys to pay the costs and also to provide for legacies perhaps totalling $150,000 to the plaintiffs. 34 Mr Sexton SC says that that is completely the wrong way to look at the matter. He says that the plaintiffs have not quantified their needs and this is a case where they have no great primary need, as each is working, each is likely to work in the near future, and whilst they have financial problems, their claim, if any, is as a buffer for contingencies. 35 Secondly, he says, one does not succeed as a plaintiff in this sort of case by saying what the widow can get by on and then saying, therefore, the rest of the property is to be released, and the balance can be divided up amongst the claimants. The plaintiffs must show why, in all the circumstances, including the paramount duty to the widow, their provision was inadequate, and what their needs are relative to the needs of other claimants. I would basically agree. 36 At this stage I should digress. Under s 61D of the Wills Probate and Administration Act, as I have said, the defendant is entitled, and has exercised her entitlement, to call for the house property to be held in trust for her. Although this case was argued that the house is part of the general estate, and I am content to deal with it on that basis, for reasons that will become apparent, it seems to me that what was discussed between counsel and myself, that is, that s 61D puts the house property into the category of notional estate, is more likely to be correct. The transaction would be one which, I think, would be affected by s 22 of the Family Provision Act 1982, and so it would be necessary for a plaintiff not only to show that he should succeed under the general Act, but to deal with the problem under s 27(1)(b) of the Act to show that, after consideration of the substantial justice and merits of the case, the court should designate the property as notional estate, and use it to the benefit of the plaintiff, which is a higher burden than that which a plaintiff has to deal with in an ordinary case. 37 However, I note this point and I will, as I have said, deal with the matter as an ordinary case, but I do not want people to think that I have overlooked the point. 38 Reverting to a considering of the facts as I have stated them, the basal reason why Mr Trebeck can say that the widow has too much is really based on the fact that high land value appertains in Hunters Hill. The house itself is a relatively modest house, though I take the point that the defendant is a single person without dependants, and she has three bedrooms and a study, but the fact is that she and her husband were living in the property for the last seven years and they were only two people. 39 I have not found, in the short time that I have had to consider the matter, any comparable case where the testator and a widow lived in a relatively modest home, whose value was rather high because of the high land value. It seems to me that one should not, merely because the testator and his widow lived in a property with high land value, read down the paramount duty to the widow to leave her the home, in which the testator and the widow lived in the latter part of their life, as her home. Accordingly, in my view, the testator's paramount duty to his widow was to leave her the home, which was valued at $900,000. With s 61D and the laws of intestacy, this is effectively what he did. 40 He left the balance to the sons, which was all they were entitled to, and, accordingly, I can find no breach of duty. It follows that, regrettably, because the evidence of the sons does show that if there was enough money in the estate some order should be made, I must dismiss the plaintiffs' claim. 41 As I have said, I have reached this conclusion with great regret. Perhaps, however, the case would not have been so difficult for me if it were not for the way in which Mr Trebeck presented the case, which put forward every possible consideration that could have been brought into the mix as to why the plaintiffs should succeed. 42 I am glad to say that Mr Sexton SC has obtained instructions not to seek costs against the plaintiffs, and I will make the usual order that the defendant's costs be paid out of the estate, which, unfortunately, will probably eat up the rest of the cash in the estate. 43 As it does not matter about the quantum of the costs in this particular matter, I should make some general observations about costs in Family Provision Act applications. I think the position has now been reached where judges will not allow more than $35,000 in costs to any party in this type of case unless there is some special justification. 44 I know that it is very often difficult for plaintiffs' solicitors to obtain full statements from plaintiffs without spending a lot of time talking to their clients, and getting corroborative documents. This appears to me to be a major reason why costs exceed $35,000. It may be that some solicitor and client costs can be charged for this extra work, but I cannot see why such costs, even for successful plaintiffs, should come out of the estate. 45 The second thing is that no success fees, or contingency fees, or the percentage that is allowed under the general costs rules for solicitors acting on a speculative basis is generally allowed in these sorts of cases. 46 Where there is a bill for $85,000, where probably the maximum that the plaintiffs could have received was about $150,000, principles of proportionality would mean that a court would not normally agree to any amount of costs like that coming out of the estate. 47 I am able to make these comments freely in this particular case, because in this case the quantum of costs is completely academic: indeed this particular case was extremely well presented at trial.