New South Wales Supreme Court CITATION : Horton v Simpson [2006] NSWSC 765 HEARING DATE(S) : Thursday, 6 July 2006 JUDGMENT DATE : 1 August 2006 JURISDICTION : Equity Division JUDGMENT OF : Associate Justice McLaughlin at 1 DECISION : In proceedings 2394 of 2005, William Patrick Horton v Edwina Catherine Simpson, I make the following orders: (1). I order that the Plaintiff receive from the estate of the late William Alfred Frederick Horton ("the Deceased"): (a) A legacy in the sum of $250,000, such legacy not to bear interest if paid on or before 1 October 2006, and if not so paid to bear interest at the rates prescribed for unpaid legacies pursuant to the Wills, Probate and Administration Act 1898; (b) The interest of the Deceased in New Holland TR 98 header serial number 559721 complete with 30' open front and comb trailer owned as tenant in common with the Plaintiff. (2). I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased. In proceedings 3015 of 2005, Robert Scott Horton v Edwina Catherine Simpson, I make the following orders: (1). I order that the Plaintiff receive from the estate of the late William Alfred Frederick Horton ("the Deceased") a legacy in the sum of $60,000, such legacy not to bear interest if paid on or before 1 October 2006, and if not so paid to bear interest at the rates prescribed for unpaid legacies pursuant to the Wills, Probate and Administration Act 1898; (2). I order that the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased, and that there be no order in respect to the costs of the Plaintiff, to the intent that he shall bear his own costs of the proceedings. CATCHWORDS : Succession. Family Provision. Claim by adult son. Financial and material circumstances of Plaintiff. Contribution by Plaintiff to maintenance and improvement of rural property of Deceased. Competing claim of Defendant, who is sole beneficiary of Deceased. LEGISLATION CITED : Family Provision Act 1982 Wills, Probate and Administration Act 1898 William Patrick Horton (Plaintiff in 2394 of 2005) PARTIES : Robert Scott Horton (Plaintiff in 3015 of 2005) Edwina Catherine Simpson (Defendant in both proceedings) FILE NUMBER(S) : SC 2394 of 2005; 3015 of 2005 Mr. K. Morrisey (Plaintiff in 2394 of 2005) COUNSEL : Mr. M. Butcherine, solicitor (Plaintiff in 3015 of 2005) Mr. F. Mathey, solicitor (Defendant in both proceedings) Mark Ireland (Plaintiff in 2394 of 2005) SOLICITORS : Nelson Keane & Hemingway (Plaintiff in 3015 of 2005) Mathey (Defendant in both proceedings) - 14 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSOCIATE JUSTICE McLAUGHLIN Tuesday, 1 August 2006 2394 of 2005 - WILLIAM PATRICK HORTON –v- EDWINA CATHERINE SIMPSON 3015 of 2005 - ROBERT SCOTT HORTON –v- EDWINA CATHERINE SIMPSON JUDGMENT 1 HIS HONOUR: These are two proceedings under the Family Provision Act 1982. 2 By summons 2394 of 2005 filed on 12 April 2005 William Patrick Horton claims an order for provision for his maintenance and advancement in life out of the estate and/or notional estate of his late father William Alfred Frederick Horton (to whom I shall refer as "the Deceased"). The Plaintiff subsequently filed an amended summons on 6 July 2006 (the amendment not effecting any change to the substantive relief sought by the Plaintiff). 3 By Summons 3015 of 2005 filed on 18 May 2005 Robert Scott Horton claims an order for provision for his maintenance and advancement in life out of the estate or notional estate of the Deceased. 4 At the commencement of the hearing on 6 July 2006 the legal representatives of the parties in proceedings 3015 of 2005 informed the Court that those proceedings had settled, and the stated nature of that settlement. However, the practicalities of the proposed settlement were dependent upon the outcome of proceedings 2394 of 2005, since it will be appreciated that orders by consent to give effect to the settlement of proceedings 3015 of 2005 cannot be made unless and until it is known whether, after the hearing and outcome of proceedings 2394 of 2005 there will remain in the estate of the Deceased assets sufficient to meet the proposed orders in favour of the Plaintiff in proceedings 3015 of 2005. 5 Accordingly, I shall now proceed with the claim of William Patrick Horton in proceedings 2394 of 2005. 6 The Deceased died on 19 November 2003, aged 77. He left a will dated 8 August 2000, probate whereof was on 20 February 2004 granted to Edwina Catherine Simpson, the executor named in such will (who is the Defendant to the present proceedings). By that will the Deceased gave the entirety of his estate to the Defendant. 7 The inventory of property sets forth the following assets in the estate of the Deceased: moneys on deposit (totalling about $791,000), shares (having a value of about $13,400), a motor vehicle (to which an estimated value of $15,000 was attributed), an interest in a header owned jointly by the Deceased and the Plaintiff (to which interest a value of about $75,000 was attributed). The inventory of property discloses those assets as having a total value of $894,041. However, during the course of the hearing it was noted that it was agreed between the parties that the value of the header a one half interest wherein is shown as an asset in the estate of the Deceased is $55,000 (not $75,000, as appears in the affidavit of the Defendant executor of 27 July 2005). 8 In calculating the value of the estate available for distribution the costs of the present proceedings must be taken into account, since the Plaintiff, if successful in his claim, will be entitled to an order that his costs be paid out of the estate, whilst the Defendant, irrespective of the outcome of the present proceedings, will be entitled to an order for costs. It is estimated on behalf of the Plaintiff that his costs will total $44,835, whilst it is estimated on behalf of the Defendant that her costs (which I understand to be both in respect to the claim of the present Plaintiff and also in respect to proceedings 3015 of 2005 brought by her brother Scott), will total $27,340. I would here observe that the proposed settlement of Scott's claim will be by way of a legacy which will be inclusive of his costs. In consequence, the value of the estate available for distribution will be a little over $800,000. 9 The Deceased was married only once, to Patricia Elizabeth Burke, on 28 November 1953. Mrs Horton died on 21 May 1995, aged 65. 10 Three children were born to the Deceased, being William Patrick (who was born on 7 August 1957, and is presently aged 48), Edwina (Mrs. Simpson), the Defendant (who was born on 17 November 1959, and is presently aged 46) and Robert Scott (known in the family as "Scott") (who was born on 19 November 1963 and is presently aged 42) and 11 The Plaintiff married in October 1983, and has three children, presently aged 20, 18 and 15. 12 The Deceased until about two years before his death owned a rural property known as Nullabah, which was located near Nygan in western New South Wales. In large part the assets of the estate represent the proceeds of sale of that property. 13 The Plaintiff attended boarding school at Bathurst from 1970 to 1995, and thereafter the Orange Agricultural College from 1976 to 1977, where he obtained a Diploma in Agriculture. Whilst living at home on the property and also during school and college holidays, the Plaintiff, and also his brother and sister, assisted in working on the property. 14 After obtaining his tertiary qualifications in agriculture the Plaintiff attempted to encourage the Deceased into more modern farming methods upon Nullabah. However the Plaintiff's suggestions were not welcomed by the Deceased. The Plaintiff freely admitted that his relationship with his father was not good. After the Plaintiff's marriage that relationship deteriorated further, the Deceased apparently not liking the Plaintiff's wife or her family. Ultimately the Plaintiff left Nullabah in early 1979 and started working as a wool classer. However, shortly thereafter the Deceased hurt his back, and at the request of the Defendant the Plaintiff returned home and worked for the Deceased until 1990. The relationship between the Plaintiff and his father throughout that period was a difficult one. At various times the Deceased made promises to the Plaintiff that he would purchase a property for him, but the Deceased never did so. At other times the Deceased would tell the Plaintiff, variously, that "I've put you out of the partnership" (although there does not appear to have been any such partnership in existence), or that "I'll leave you out of my will". 15 It is not necessary to rehearse the various similar incidents during what was clearly not an easy relationship between the Plaintiff and the Deceased. Suffice it to say that the Plaintiff continued to work for the Deceased, with very little remuneration, until 1990. 16 From 1990 to 1993 the Plaintiff worked in a stock transport business. Subsequently, from 1993 to 1995 he worked in a copper mine. However, once again, he was requested by the Deceased to return home and assist in the conduct of Nullabah, the Deceased telling the Plaintiff that the Deceased was suffering from terminal cancer. The Plaintiff gave up his well paid position in the copper mine and returned to work on Nullabah. 17 In 1996 the Plaintiff and the Deceased conjointly purchased a new header TR 98 (that being the header referred to in the inventory of property). Apparently that piece of machinery was purchased by way of a loan from the Primary Industry Bank of Australia (PIBA), for the repayments whereon the Plaintiff and the Deceased were to be equally responsible. 18 The Plaintiff ceased working on Nullabah in 1999. By that time, however, the Plaintiff had purchased a residence in Nygan with the assistance of an advance of $60,000 which the Deceased had volunteered to the Plaintiff for the that purpose, and upon the basis of which advance the Deceased had lodged a caveat against that property. When the Plaintiff and his family removed to Bathurst in 1999, they were, in consequence of that caveat, unable to sell the Nygan residence. 19 At the present time the Plaintiff is currently a self-employed contractor. On 1 July 2005 he entered into partnership with his wife in conducting that contracting business. For the first year of that partnership its income was about $30,000. 20 The assets and the estimated value thereof of the Plaintiff and his wife are as follows: House property situate at and known as 39 Carlyle Street, Bathurst - $250,000 Header - $50,000 Superannuation - $10,109 Utility motor vehicle - $14,000 Motor car - $16,000 Credit in bank accounts - $1,000 Furniture and household items - $70,000 21 The liabilities of the Plaintiff and his wife are as follows: Mortgage debt on residence - $191,782 Insurance debt - $20,000 Loan from parents of Plaintiff's wife - $15,000 22 The insurance debt arose when the Plaintiff had a motor vehicle accident whilst his vehicle was uninsured, causing significant damage to the other vehicle. The loan of $15,000 from the parents of the Plaintiff's wife (which is also referred to in the Plaintiff's affidavit evidence as a "private bank loan") arose as a result of what was described as "an unfortunate deal", where the Plaintiff lost money. The loan enabled the Plaintiff and his wife to complete the purchase in late 2002 of the land upon which their residence now stands. 23 The Plaintiff's wife has recently taken part-time employment. 24 The Plaintiff's eldest child commenced, but is no longer able to continue, university studies, since the Plaintiff could not afford to keep her at university. She is now paying her own fees to pursue a course in beauty. The Plaintiff's second child, who has recently left school, is now working as a labourer, although it was his ambition to attend university. The Plaintiff has not been able to afford to pay his university fees. The Plaintiff's youngest child, who is still at school, is desirous of ultimately attending university. 25 The Plaintiff identified his present needs as being essentially the repayment of the bank loan of $15,000; the repayment of a significant part of the mortgage; provision for superannuation in a significant amount; provision for education at a tertiary level for his three children; and improvements to his residence and to the furniture and furnishing thereof. The Plaintiff has present taxation liabilities of $50,000, and estimated legal fees in respect of the present proceedings in an amount of $50,000. 26 The claim of the Plaintiff must be approached in the light of any competing claims upon the testamentary bounty of the Deceased. The only such competing claims are those of the Defendant and of Scott. Since Scott has by negotiation settled his claim, it is unnecessary for me to set forth details of the financial and material circumstances which ground his competing claim upon the testamentary bounty of the Deceased. 27 The other competing claim, that of the Defendant, was recognised by the Deceased, who by his will gave to her the entirety of his estate. 28 Like her two brothers the Defendant grew up on Nullabah and worked on that property until she attended boarding school in Sydney, following which she attended the Mitchell College in Bathurst, where she graduated Bachelor of Business. Until she went to school, and during school and college holidays, the Defendant, like her brothers, assisted in the work on Nullabah. 29 After graduation from Mitchell College the Defendant moved to Wollongong in 1982, where she was employed by the Commonwealth Bank. The Deceased and his wife each gave $3,000 to the Defendant, who used that total sum of $6,000 as a deposit on the purchase for $70,000 of a residence at 13 Macarthur Parade, Mangerton. The Defendant married in 1982, and she and her husband have two children, now aged 12 and 8. The family still resides in the house property at Mangerton which the Defendant purchased in 1982. The Defendant is still employed as a bank officer, currently receiving a gross income of $74,000 a year. Her husband is employed as a school teacher by the Department of Education and Training, his gross income being $51,000. The assets of the Defendant and her husband, and the estimated values thereof, are as follows: House property situate at and known as 13 Macarthur Parade, Mangerton - $450,000 Shares - $106,000 1995 Subaru motor vehicle - $10,000 2003 Mazda motor vehicle - $15,000 Furniture and effects - $50,000 Bank accounts - $6,000 Investment property situate at and known as unit 6, 78 - 82 Campbell Street, Wollongong - $480,000 30 In addition, the Defendant has a present superannuation entitlement of about $300,000, and her husband has a superannuation entitlement of about $134,500. 31 The liabilities of the Defendant and her husband are as follows: Mortgage on residence - $115,000 Mortgage on investment property - $173,000 Personal loan from credit union - $6,000 32 The investment property at Wollongong was purchased by the Defendant and her husband in April 2004 for $480,000, the Defendant's contribution of $300,000 towards the purchase of that property being made from a partial distribution in a total amount of $328,500 which she received from the estate of the Deceased in 2004. 33 The Defendant under cross-examination agreed that she and her family have a reasonably comfortable lifestyle. 34 It will be appreciated that the Plaintiff must establish his own claim upon its own merits. The competing claim of the Defendant, who was the sole object of the testamentary beneficence of the Deceased, cannot have the effect of enhancing the claim of the Plaintiff. It may, however, have the effect of reducing, or even extinguishing, any order for provision an entitlement to which the Plaintiff might otherwise establish. 35 In 1997 the Deceased's son Scott commenced an action in the Supreme Court of New South Wales against the Deceased, claiming "unpaid wages" for the period during which Scott had worked on the farm property. That claim was settled following mediation. The Deceased was to pay Scott $200,000 by an immediate payment of $100,000, with the remaining balance of $100,000 to be paid by five equal annual instalments of $20,000 each. At the time of the death of the Deceased three of those instalments had been paid. Since the Deceased's death the Defendant has arranged for the payment to Scott of the two remaining instalments. 36 The mother of the parties, the late Patricia Elizabeth Horton, had on 2 August 1985 made a will by which she left her interest in the farming partnership between herself and the Deceased to her son Scott, with the residue of her estate to the Defendant. Subsequently, at what was described by the Defendant as "a family meeting", Mrs. Horton said to the Plaintiff, "You have had your share", and she also informed the Defendant that she proposed to leave the residue of her estate to the Deceased, "as he may need it before he dies, but he will make provision for you in his will". That intention was effected by a codicil to Mrs. Horton's will dated 14 December 1994. After her death the residue of Mrs. Horton's estate, amounting to $100,000, passed to the Deceased, who kept that money separate from his other funds. 37 The Defendant was present at the mediation between the Deceased and her brother Scott of Scott's Supreme Court proceedings against his father. She assisted the Deceased in achieving the settlement terms, on the basis that the foregoing $100,000 (which the Defendant expected ultimately to receive herself upon the death of her father) would provide the immediate payment to Scott of part of the settlement of those proceedings. 38 The evidence discloses that the Defendant was a devoted and loving daughter to the Deceased, with whom she was in constant contact, both in person and by telephone. After the death of her mother in 1995 the Defendant spoke to the Deceased by telephone almost daily. Nullabah was sold in February 2000. It was the Defendant's evidence that Nullabah was sold for $750,000 (although the Defendant was unaware of the present location of the financial record relating to that sale). The clearance sale of the livestock, plant and equipment returned about $200,000, although the Defendant was not aware of the sale price of the livestock. The Defendant did not dispute that the sale of the land, machinery and stock returned an amount of about $980,000. 39 The Defendant and her husband renovated their residence at their own expense in order to provide additional accommodation for the Deceased, who came to stay with them after the sale of Nullabah. Originally they expected that the Deceased would be with them only for about 12 months or so, until he made further arrangements for where he would reside. However, in the event, he remained in residence with the Defendant and her family until his death more than three years later. Throughout that period the Deceased was never asked to pay rent or to contribute to household expenses, and he did not do so. Nevertheless, in about September – October 2003 the Deceased purchased for the Defendant a Mazda motor vehicle for $23,000, saying to the Defendant at that time, "That is for all the time I didn't pay rent". 40 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff. 41 I have had the benefit of receiving a written outline of submissions and a chronology from Counsel for the Plaintiff. Those documents will be retained in the Court file. 42 As I have already recorded, the Plaintiff frankly admitted to the relationship between himself and his father was not a good one. However, the Plaintiff made very considerable contributions to the maintenance and improvement of Nullabah over a period of about fourteen years. It is quite apparent that the Deceased would not have been able to maintain that property and to conduct his farming activities thereon without the assistance and help which he received from the Plaintiff. 43 On at least five occasions promises were made by the Deceased (and also in 1993 by the Plaintiff's mother) that the Deceased would purchase land for the Plaintiff. On each occasion the Plaintiff acted upon such promise to his detriment. 44 It was acknowledged on behalf of the Defendant that some provision should be made in favour of the Plaintiff. However, the Defendant pointed to the fact that the Plaintiff since the death of the Deceased has had the benefit of the interest of the estate in the header. 45 In addition to a monetary sum from the estate of the Deceased the Plaintiff also sought the transfer to him of any claim by the estate for an interest in the header. It was submitted that the Plaintiff should receive from the estate a legacy which would enable him to effect a reduction in the mortgages to which his house property and the header are currently subject. Further, that he should be enabled to make provision for his superannuation in a sum significantly greater than $10,100 (which is the amount of his present superannuation entitlement); and that he should receive a fund which would enable him to assist his children with their education. 46 I consider that, in all the circumstances, the Plaintiff has established an entitlement to receive from the estate of the Deceased a legacy in the sum of $250,000. Such a legacy will enable the Plaintiff to effect a significant reduction in the mortgage on his house property (and thus considerably reduce his mortgage repayments), and will also enable him to set up a superannuation fund in an amount far greater than the $10,100 which represents the Plaintiff's present superannuation entitlement, as well as to provide a fund to assist in meeting the education expenses of his three children at tertiary institutions, and to upgrade the furniture and furnishings in his residence. 47 A legacy in the sum of $250,000 plus costs in an amount of $44,800 will leave available in the distributable estate of the Deceased an amount of about $505,000. 48 The competing claim of the Defendant, who was the sole chosen object of the testamentary beneficence of the Deceased, will not, in my conclusion, have the effect of reducing, let alone extinguishing, an order for provision for the Plaintiff in the foregoing amount. There will still remain in the estate about $505,000, which, after the settlement of Scott's claim in an amount of $60,000, inclusive of his costs, will leave about $445,000 for the Defendant (of which she has already effected a distribution to herself of $328,500). 49 Accordingly, in proceedings 2394 of 2005, William Patrick Horton v Edwina Catherine Simpson, I make the following orders: (1). I order that the Plaintiff receive from the estate of the late William Alfred Frederick Horton ("the Deceased"): (a) A legacy in the sum of $250,000, such legacy not to bear interest if paid on or before 1 October 2006, and if not so paid to bear interest at the rates prescribed for unpaid legacies pursuant to the Wills, Probate and Administration Act 1898; (b) The interest of the Deceased in New Holland TR 98 header serial number 559721 complete with 30' open front and comb trailer owned as tenant in common with the Plaintiff. (2). I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased. In proceedings 3015 of 2005, Robert Scott Horton v Edwina Catherine Simpson, I make the following orders: (1). I order that the Plaintiff receive from the estate of the late William Alfred Frederick Horton ("the Deceased") a legacy in the sum of $60,000, such legacy not to bear interest if paid on or before 1 October 2006, and if not so paid to bear interest at the rates prescribed for unpaid legacies pursuant to the Wills, Probate and Administration Act 1898; (2). I order that the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased, and that there be no order in respect to the costs of the Plaintiff, to the intent that he shall bear his own costs of the proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.