New South Wales Supreme Court CITATION : Nicholls v Hall [2006] NSWSC 1377 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 23, 24 October 2006 JUDGMENT DATE : 12 December 2006 JURISDICTION : Equity Division JUDGMENT OF : Young CJ in Eq DECISION : Proceedings are dismissed with costs. CATCHWORDS : WILLS [323]- Family provision- Claim by able-bodied ex-nuptial adult son against father's estate- Whether insufficient provision- Few needs- Little contact during deceased's life- Little evidence of close relationship- Bare fact of paternity- Son fails to establish case for provision- Claim dismissed. LEGISLATION CITED : Family Provision Act 1982 Boniecki v Brown [2006] NSWSC 306 Eather v Maher [2006] NSWSC 746 Gorton v Parks (1989) 17 NSWLR 1 Hunt v Delaney [2005] NSWSC 764 Lo Surdo v The Public Trustee [2005] NSWSC 1186 CASES CITED : McQuhae v Abel [2003] NSWSC 711 Mulhall v Permanent Trustee [2004] NSWSC 365 Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 Singer v Berghouse (1994) 181 CLR 201 Walker v Walker (Young J, 17.5.1996 unreported) Wheatley v Wheatley [2006] NSWCA 262 David Norman Nicholls (P) Deborah Anne Hall (D1) Gregory Robert Hall (D2) PARTIES : Donna Louise Robinson (D3) Gregory James Robinson (D4) Deanne Elizabeth Day (D5) Colin William Day (D6) FILE NUMBER(S) : SC 2998/05 COUNSEL : L Ellison SC (P) J R Wilson SC and D Liebhold (D1) SOLICITORS : Turnbull Hill Lawyers (P) Kells The Lawyers (D1) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION YOUNG CJ in EQ Tuesday 12 December 2006 2998/05 – NICHOLLS v HALL JUDGMENT 1 HIS HONOUR: This is an application under the Family Provision Act 1982 by an adult son. The plaintiff is the ex-nuptial son of the late Barton Kelly who died on 25 November 2004 aged 74. Mr Kelly had made and published his will on 23 August 2002, probate of which was granted to the first defendant, his eldest daughter, on 14 February 2005. The will provided for the estate to pass to the testator's three daughters equally. Apart from the plaintiff and the three daughters, the deceased had no known children. 2 The estate was sworn for probate purposes at $1,509,640.00 of which the testator's house at Warilla was the major asset which was included in the estate at $1.2 million. The executor's affidavits show that the estate was worth $1.3 million net. 3 The present state of the estate is that after distributions of $263,333.33 to each daughter (a total of $790,000), there is $454,400 on deposit with IMB Ltd. The balance appears to have gone in legal expenses. 4 The plaintiff is now aged 47 having been born on 5 January 1959. He is married to Donna with four dependent children aged between 8 and 16. He also has five children from a previous marriage who are now aged between 18 and 31. 5 The plaintiff is the son of the deceased, a European, and an Aboriginal woman, conceived during a brief relationship. That relationship ceased before the plaintiff was born. The plaintiff and the deceased first met each other on 17 April 1995 when the plaintiff was 36. Indeed, that day and the following day were the only face-to-face visits they ever had. Apart from that meeting, there were, on the evidence, five phone calls initiated by the plaintiff and six by the deceased, and their last contact was a phone call to the deceased on his 73rd birthday, 18 September 2003. 6 The plaintiff in his first affidavit, informed the Court that he was employed by the Department of Education as a school teacher. However, he says, "My wife and I were bullied in our workplace at Dubbo North Public School during 2002 and 2003." The plaintiff lodged a worker's compensation claim and some of the evidence suggests that he has not worked since. I was puzzled by this, and at my invitation counsel recalled the plaintiff and the plaintiff said that in recent times under the regime of worker's compensation or rehabilitation, he returned to school duties, this time at the Dubbo Central School where he was doing work with groups of three or four students with another teacher four days a week. He said he and his wife still have Wednesdays off because they still suffered from anxiety and depression. He is earning $872 a week. 7 The plaintiff has some sort of action going against the Department of Education, exactly what it is is not too clear. Not only does it appear to involve worker's compensation for depression and anxiety suffered as a school teacher, but also has an alleged discrimination aspect to it. At the hearing in October the plaintiff said that the case is to be heard "next month". He has already paid his lawyers a large sum of money to run the case but does not expect to recover his expenses. He feels the principle of the matter justifies him proceeding. 8 The plaintiff and his wife own their assets jointly. They have assets of $468,000 including a house at Dubbo worth $350,000 though that is subject to a mortgage of $280,000. They only have $8,000 of other debts owing to credit providers. The wife earns $926 per week and the couple's income and expenses roughly balance. The plaintiff's wife did not give evidence. However, when asked about his family's finances the plaintiff kept saying that his wife knew all about that and that he didn't. This was rather unsatisfactory. Particularly in view of the huge amount of legal costs that are being claimed by both sides, the Court would have expected that there be thorough presentation of all the evidence that was required. It is quite clear that one cannot get a full picture of the plaintiff's worth without the evidence from the plaintiff's wife, yet she was not called. 9 Mr Wilson SC, who appeared with Mr Liebhold for the first defendant, said that I should apply the Jones v Dunkel principle. Mr Ellison SC for the plaintiff, pointed out that is not really appropriate. Nonetheless, it did not improve the plaintiff's case that the full disclosure of his financial position did not appear to be made to the Court. 10 The executor is aged 43. Her sister, Mrs Deanne Elizabeth Day, is 41 and the third sister, Donna Louise Robinson, is aged 39. All three are married. The executor lives with her husband at Jamberoo in a house worth $495,000 subject to a mortgage of $110,000. She earns $669 a week as a "job education and training adviser". Her husband earns a similar amount. 11 Mrs Day and her husband own what they call a farm in the Tumbarumba area worth about $165,000, and apart from that, have $32,000 worth of other assets. They have liabilities of $28,402. Mrs Day does not earn income but she has a pension of $106 per week. Her husband has variable income averaging $295 a week. 12 Mrs Robinson and her husband live in Gerringong. They are hoping to build a house on land they own in that town. Mrs Robinson earns $175 per week and her husband, an average of $830 per week. 13 It can be seen from this brief scenario that none of the four children of the testator are wealthy, but none are on the poverty line either, though the Days in this time of drought are only eking out a precarious existence on their farm. 14 I have found this quite a difficult case. It seemed to me that there was the flavour in the plaintiff's case that like his discrimination action, he was bringing these proceedings, not because of any need, but because he felt as a matter of principle his father should have left him something. 15 In Mrs Hall's affidavit, she deposed to a conversation at 4 pm on Sunday 6 February 2005 with the plaintiff, that is, about two months after the deceased's death. She says the plaintiff told her, "I want to see Barton's will … . If I am not in the will then that is the worst case scenario, I am going to have to contest the will, I am going to be asking how much money Barton has, I know he had some money, I am going to go to my barrister and contest the will, it's going to cost me $20,000 to $25,000 but I want me and my family to benefit from Barton's death. Barton's got to pay for all the years mum had to bring me up." Mrs Hall replied, "Why are you doing this, my husband Greg was left out of his real father's will and he didn't start legal proceedings". The plaintiff replied, "I am not Greg. I am David. I have just taken on the Department of Education and won and I am going to win this case as well. You just the lawyers work it all out [sic]. You should expect to hear from my barrister in two weeks." 16 In his affidavit of 12 October 2005, he denied that conversation though he admitted a conversation took place in which he asked whether he was in the will. He said the conversation went like this: Plaintiff: "Am I in the will?" Mrs Hall: "Well no David, Dad just wanted his three daughters to have what he has left behind." Plaintiff: How is that for a kick in the bum Deb. I spent all this time looking for my Dad and I'm treated like this. How is that fair? I will be able to contest it. I am his son." 17 The plaintiff denies that he said that Mrs Hall should expect to hear from his barrister in two weeks as he said he did not have a barrister or solicitor acting for him then. 18 I thought this evidence was quite significant. I was not impressed by the fact that there was no cross examination of either of these parties on that conversation. I mentioned to Mr Ellison in the course of his reply that I thought that conversation was significant to show the real motive of the plaintiff in bringing the claim. Mr Ellison put to me that I must not have fully comprehended the plaintiff's reply in his affidavit. Of course, I had done so. Mr Ellison then said that as Mr Wilson had not in his submissions made anything of the conversation, I should not decide the case on the basis that there was some improper motive for bringing the application and that it was not a bona fide one. 19 Whenever I protest about judges being left in a position of inconsistent evidence not cross examined on, I am told that courts do not like to have time wasted on peripheral issues. That thought is commendable and correct, but it is very awkward for a judge when there is a significant issue which is not tested in cross examination. I consider that even though Mr Wilson did not mention the matter, I have fairly and squarely put it to Mr Ellison, and I am entitled to take the matter into account in my adjudication. 20 There is no doubt at all that the conversation took place. There is no doubt at all that during that conversation the plaintiff took the attitude that he was going to test the will because he considered it was not fair that he was left out. For reasons set out in the following paragraphs, I accept Mrs Hall's account of the conversation as I found the plaintiff not to be a witness who I could unreservedly accept. 21 The plaintiff's evidence was, to a degree, unsatisfactory. He did not give full details of his assets. As Mr Wilson's cross examination showed, he did not disclose superannuation and other assets. Furthermore, he exaggerated in his affidavit the relationship between himself and his father. He said, "For the next six years I was in regular contact with my father". In actual fact there were but 11 phone calls in six years. There was no exchange of Christmas presents, birthday presents or cards and cross examination revealed that the plaintiff wished me to accept that because his mother spent some time in telephone calls with his father and during those telephone calls they discussed the plaintiff, that that was "regular contact". I have labelled that an exaggeration. 22 Further, there is the fact that the plaintiff did not attend his father's funeral and the rather suspicious circumstances surrounding his excuse for not attending. He said in his affidavit "I did not attend my father's funeral because my wife was ill at the time". 23 Mrs Day says that shortly after the testator died on 25 November 2004 the plaintiff rang her and said, "Do you know anything about Barton's will? Mrs Day said "No, you will have to ask Deborah. She is the executor". The plaintiff then said, "Do you know if I am in the will?" to which Mrs Day replied "No, you will have to ask Deborah". 24 The funeral was on 29 November 2004 at Kiama. The plaintiff did not attend. Approximately six weeks later the plaintiff rang Mrs Day and said, "Sorry that I couldn't make it to the funeral. By the way, what's happening with your father's will. Am I in it?" Mrs Day replied, "You should take that up with my sister Deborah Hall. She is the one to talk to about that". The plaintiff then said, "I wouldn't mind a bit of money". 25 The plaintiff did not answer the first allegation, but he said in respect of the second alleged conversation, "I did telephone Deanne (Day) after Dad's funeral. I said to her 'It was difficult for me to get there, with Donna being sick in bed and all the kids'. I did not say to her 'I wouldn't mind a bit of money'." 26 Mr Wilson asked the plaintiff: "Now the Access Advantage Account Statement for yourself and Mrs Nicholls for 29 November 2004 discloses the following transactions. There was an EFTPOS transaction at Franklins at Dubbo. Then there is an EFTPOS transaction at Woolworths at Riverdale. Is Riverdale near Dubbo?" A. "Yes it is a shopping centre in Dubbo". Q. "Then there is an EFTPOS transaction at Pay Less at Dubbo. Then there was an ATM transaction at the Macquarie Inn Hotel." A. "Yes that is possible". Q. "Then there was an ATM transaction at the ANZ Bank at 99 Macquarie Street, Dubbo. Then there was another transaction at the ATM at 99 Macquarie Street, Dubbo. If your wife was unwell on that day, it is more likely than not that you were the person who attempted to do these transactions?" A. "It is possible". Q. "The three ATM transactions on 29 November 2004 involve the withdrawal of a total of $260 from this account: was that used for betting activities?" A. "I do not know. It would be very unlikely that that would be for betting activities alone." Q. "But those six transactions would suggest that you were out of the house quite a bit, if you had been the person who had transacted each of those transactions on 29 November?" A. "Yes but that is not saying that I was on my own". Q. "Who would have been with you?" A. "My wife could have come into town. I don't know. It's a long time ago. I mean, if my wife is sick, I mean she might not be sick enough to come into town or go back home. You are only in for an hour or so and then you are back home." Q. "You see, the statement that you made to Deborah that your wife was ill and you could not attend the funeral, that was not an excuse that you proffered so that you didn't have to go to the funeral was it?" A. "No". Q. "Is it possible that you viewed your relationship with your father in such a light that you thought it was not necessary for you to attend his funeral?" A. "No". 27 Mr Ellison tried to remedy this evidence in re-examination by suggesting that the plaintiff would have loved to have attended the funeral but he was loath to leave his wife and four children longer than he needed to. However, the concrete evidence is that there were visits to three stores at at least two shopping centres in the Dubbo area that day, and three ATM transactions involving withdrawal of a total of $260. There is no doubt that the plaintiff does involve himself in what might be called recreational gambling. It is unusual for a person to make three small ATM withdrawals on the one day and the answer "It would be very unlikely that that would be for betting activities alone" suggests that at least part of the monies were used for betting transactions. Accordingly, the probabilities are that the plaintiff's wife was not sick in bed on 29 November and that the plaintiff was not so concerned with his wife and children that it prevented him from spending time (we don't know how much time) betting. 28 I infer from this that the plaintiff's proffered excuse for not attending the funeral of the deceased was insincere and that this evidence reinforces other evidence that the relationship between the plaintiff and the deceased was not strong. 29 There is no doubt at all that between September 2003 and the deceased's death in November 2004 the plaintiff did not see the deceased at all, nor, it would appear, himself make any enquiries as to how the deceased was faring. He says that this was because his sisters told him that the deceased was in such a condition that he would not be able to recognise anybody and that visits were a waste of time. Whilst I accept this, I find it strange, if there was a close relationship, why there were not more enquiries as to health and at least the sending of a card or some contact. Further, one would expect there to have been some enquiries made by the plaintiff about his father notwithstanding any comments from his sisters that they would keep him informed. 30 Accordingly, the picture painted by the evidence, which I accept, is that the plaintiff had no contact with his father for the first 36 years of his life. Thereafter there were 11 telephone calls in eight years. There was no exchange of presents at birthdays or Christmas, not even an exchange of cards. The plaintiff only ever saw the deceased on two days in 1995. He did not see the deceased at all nor make any contact with him for the last two years of the deceased's life and he never attended the funeral. Furthermore, he appears to have given an excuse for not attending the funeral which was not genuine. 31 In saying what I have just said I do not want it to be thought for a moment that I do not appreciate the difficulties of a man with four small children living in Dubbo making contact with his father who lives in Warilla in the Illawarra area. I realise that it would not be easy, indeed it may be impossible to make such a visit within one day unless one had the resources to use the plane from Dubbo and hire a car or use the train from Sydney. However, one would expect that in a period of eight years on at least one occasion the plaintiff would have sought to make personal contact with his father if there was a close relationship between them and one also would have expected them to have exchanged Christmas and birthday cards and for the plaintiff to have made more enquiries as to his father's health. It is significant that none of this happened. 32 During addresses a proposition was addressed as to whether it is sufficient to base a claim for provision under the Act on the basis of biological paternity. 33 Mr Wilson cited a decision that I had given in Walker v Walker, 17 May 1996, unreported. I analysed the leading decisions up to 1996 where the key factor in the plaintiff's case under the Family Provision Act or its predecessor was the bare fact of paternity. In Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9, 18, Dixon CJ appears to have considered that the bare fact of paternity and no other mutual relation would be insufficient to justify depriving a testator of his complete freedom of testamentary disposition. 34 In Gorton v Parks (1989) 17 NSWLR 1, 9-10, Bryson J at 10 stated that he considered that Dixon CJ's view differs "from the almost universal view of the Australian community; the view involved seems to have been that the moral obligations of a parent can be limited, and can possibly be escaped, by steadfastly maintained repudiation or evasion. Dixon CJ did not expound the weight which he gave to the bare fact of paternity and nothing else; I regard that bare fact as a very great importance in morality." 35 Mr Ellison relied on a decision of Bryson JA given 17 years later, a decision with which Santow and McColl JJA agreed in Wheatley v Wheatley [2006] NSWCA 262. His Honour, however, did not refer to "bare paternity" in that case. It was a case involving an adult son who had been disinherited by his mother because of the plaintiff's alleged conduct between 17 and 22 years of age. 36 I believe that the fact of disinheritance means that the case is not as good a guide to the present case as Mr Ellison would suggest. The kernel of the judgment of Bryson JA is that a parent cannot unilaterally disinherit a child. It is noteworthy that he approved what McLaughlin AsJ had said, "It should be emphasised that an order for provision is not made as a reward for services or good character on the part of an applicant. Neither is such an order withheld as punishment for perceived bad conduct on the part of an applicant." 37 Hamilton J considered the question of "bare paternity" in Lo Surdo v The Public Trustee [2005] NSWSC 1186. His Honour dismissed a claim by a child who was given up by the testator shortly after he was born but with whom she made contact when he was 24. His Honour said at [63] that he took into account what Bryson J said in Gorton v Parks "to the effect that the bare fact of parenthood is of very great importance. I have also taken into account that the courts have said that that bare fact does not of itself generate a right, but is to be considered in the context of the whole relationship between the parties. Here, the testator gave birth to the plaintiff and then felt constrained to give him up. She was overjoyed at the reestablishment of contact, but upon his coming to Australia in 1964 the relationship between them did not flourish. … The relationship just did not work and really did not exist in any substantial way during the only period in his adulthood in which they lived in the same country for any protracted period. I have found that no real contact was maintained between them during the 23 years before he returned to Australia." His Honour dismissed the application. 38 In Walker v Walker I said that it was wrong to say that the fact of paternity and the abrogation of the testator's duty to a child means that there must be an order for the plaintiff. I said, "The fact of paternity is something to take into account, but it must be taken into account with all the other facts and circumstances of the case and the question asked, would the community think in all the circumstances that a wise and just testator should have made provision for his child?" I am still of the view that that is the key question. 39 Mr Ellison referred me to a series of decisions of Associate Justices where, at least on the surface, quite generous orders appear to have been made in favour of biological children with whom the testator had little recent contact. I think that Mr Ellison put these to me as establishing some sort of tariff by the judicial officers who are most experienced in deciding cases under this Act. There is some merit in that suggestion but it must always be remembered that each case is different, as Mr Wilson submitted in his reply. The cases to which Mr Ellison referred were Hunt v Delaney [2005] NSWSC 764 (Macready AsJ); Boniecki v Brown [2006] NSWSC 306 (McLaughlin AsJ); McQuhae v Abel [2003] NSWSC 711; Mulhall v Permanent Trustee [2004] NSWSC 365 (Master Macready) and Eather v Maher [2006] NSWSC 746 (Macready AsJ). 40 The most that can be gleaned from cases such as the ones I have listed is that quite long periods of non contact are not necessarily fatal to an adult child receiving an order under the Family Provision Act 1982 in the present climate. 41 As one must these days, I have approached the matter as prescribed in Singer v Berghouse (1994) 181 CLR 201. I accordingly need to carry out a two stage process, first, to determine whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life, and the second, which only arises if a favourable determination is made to the first stage, is what provision is appropriate. 42 I have difficulty with finding for the plaintiff at the first stage. It seems to me that the plaintiff has established very little more than the mere fact of paternity. He has exaggerated his case. On the facts, he did not have a close relationship with his father at any time. I do not consider 11 phone calls in eight years with no exchange of presents or cards for birthdays or Christmas, and not even attending the funeral, as showing that there was any such relationship. I know that the plaintiff says that his mother talked to the deceased often about the plaintiff, but that information must be second hand and it is no substitute for the plaintiff making his own personal contact. 43 Furthermore, the plaintiff, although he is not a wealthy man by any means, is in a comfortable state of life. He and his wife both earn good money. He has his own house and few debts. However, he has a sizable mortgage on his house and he has four young children. 44 When considering the first stage, a court needs to bear in mind that the right or freedom of disposing of one's property on one's death is a right enjoyed by citizens since antiquity in the Common Law World. That freedom is too important to be disregarded in proceedings under the Family Provision Act 1982. It is only to be interfered with to the extent necessary to comply with the testator's obligations to eligible persons under that Act. 45 The question thus is whether an able bodied adult son earning a better than average income who only had slight contact with the testator, who was left nothing under his father's will was left inadequate provision. 46 A wise and just testator, to my mind, would have weighed up the competing claims of his daughters and his son. The daughters had lived with the deceased all their childhood lives and had been in contact with him regularly up until his last days and two of the daughters had cared for him during the period of his instability. It is true that there was a period when the deceased was charged with a sex crime against a grand-daughter (of which charge he appears to have been acquitted), that relations cooled, but the fact that the deceased never changed his will, leaving his estate to his daughters, shows that that is not a major matter for me to take into account. 47 The daughters, apart from Mrs Day, are again not wealthy but not poor. 48 In my view the testator's duty to his daughters to provide for them in all the circumstances was much higher than his obligation to provide for his son. 49 As the High Court judges said in Singer v Berghouse at p 210, that question is to be judged having regard "amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased and the relationship between the deceased and other persons who have legitimate claims upon his … bounty." 50 Although my mind has wavered, I consider that the question should be answered "No", in view of the factors I have discussed above. 51 Were I to turn to the second stage, the plaintiff's only real need is to reduce the size of his mortgage of $280,000. That is not a pressing need, but certainly if he was relieved of that debt to a degree, then the probabilities are that he would be able to have more free cash. However, whilst he has not been shown to be a chronic gambler, it is a significant recreation of the plaintiff, and it is no guarantee that extra money will necessarily go towards maintaining his family. 52 Had I had to consider the second stage I would have thought that each daughter was entitled to seven shares of the residue as against two for the plaintiff and thus the order would have been for a legacy of about $104,500. 53 At the commencement of the hearing, further defendants were added on the basis that, if need be, there might have to be an adjournment to protect their interests. In the event it is unnecessary to consider those defendants further. 54 I am most concerned, however, with the level of costs in this case. The case only lasted a day and a bit and the only complicating factor was that early on the question of paternity was disputed by the testator's daughters. The affidavits of the solicitors show that the plaintiff's costs are estimated to be $49,000 and the first defendant's $61,600. The costs include a 3 hour failed mediation. The plaintiff's bill includes counsel's fees of $20,000; the first defendant's counsels' fees are $39,400. One counsel, a senior counsel, was retained by the plaintiff. Two counsel, a senior and a junior by the first defendant. 55 These costs seem excessive. I use the word "seem" advisedly because I just do not know what work was required of counsel and solicitors by their client. However, the plaintiff was represented by solicitors who have a large practice in this sort of matter and so should be able to produce good documentary evidence efficiently. One would expect their costs to be lower than other solicitors who might not have that expertise, but this does not appear to be the case. What really concerns me is the very large amount of counsels' fees for what essentially, for the litigants, was a relatively straightforward case, though for the Judge it was a borderline case which was hard to decide. 56 I am not in a position to make any further comment about fees. No doubt if the matter goes to a costs assessor he or she will consider whether it was necessary for either side to brief senior counsel in this sort of matter, and whether the fees estimated are fees that ought to be allowed to be paid out of the estate. The costs assessor should be very careful not necessarily to allow any uplift fees in cases of this nature. 57 The Judges of this Division are very conscious of the fact that litigation under the Family Provision Act is often between persons who have limited resources. They are also aware that it is only too easy when costs are to be taken out of an estate or fund, for insufficient watch to be made on costs control and the Judges do not intend to encourage this. 58 Thus, in the upshot I make an order that the proceedings be dismissed. There seems to be no reason why costs should not follow the event. Thus the proceedings are dismissed with costs. The exhibits may be returned. ********************** 13/12/2006 - Counsel's name Liebhold was incorrectly spelt as Liebold. - Paragraph(s) 9 and cover sheet 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.