New South Wales Supreme Court CITATION : Cockle v Cole [2008] NSWSC 1390 HEARING DATE(S) : 24 July 2008 JUDGMENT DATE : 23 December 2008 JUDGMENT OF : McLaughlin AsJ 1. I order that, in lieu of the benefits given to her by the will of the late Sidney Thomas Cockle ("the Deceased"), the Plaintiff receive a legacy in the sum of $400,000, such legacy to be borne equally by the benefits to which Phillip Sidney Cole and Jonathan Wayne Cockle are entitled under the said will, and such legacy not to bear interest if paid on or before 23 January 2009, and if not so paid to bear interest at the rates prescribed for unpaid legacies by the Probate and Administration Act 1898. DECISION : 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. 3. The exhibits may be returned. 4. I reserve to the parties liberty to apply CATCHWORDS : SUCCESSION - family provision - claim by widow aged 79 - Plaintiff after marriage obtaining for 57 years was left less than one third of estate - other two thirds were left to the two children of the marriage - financial and material circumstances of Plaintiff - competing claims of other two beneficiaries - asserted extravagence and financial irresponsibility of Plaintiff - even if established, such assertions are not determinitive of whether Plaintiff has been left without adequate provision for her proper maintenance - Court should not be diverted from the clear words of the statute. LEGISLATION CITED : Family Provision Act 1982 CATEGORY : Principal judgment Hunter v Hunter (1987) 8 NSWLR 573 CASES CITED : Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 19 PARTIES : Hazel Rose Cockle (Plaintiff) Phillip Sidney Cole (Defendant) FILE NUMBER(S) : SC 4264 of 2007 COUNSEL : Mr C. P Taylor (Plaintiff) Mr A. Hill (Defendant) SOLICITORS : Paul Stubbs Law Office (Plaintiff) Cooney Harvey Doney (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSOCIATE JUSTICE McLAUGHLIN Tuesday, 23 December 2008 4264 of 2007 HAZEL ROSE COCKLE –v- PHILLIP SIDNEY COLE JUDGMENT 1 HIS HONOUR: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 22 August 2007 Hazel Rose Cockle claims an order for provision for her maintenance and advancement in life out of the estate of her late husband, Sidney Thomas Cockle (to whom I shall refer as "the Deceased"). 3 The Deceased died on 26 February 2007, aged 79. He left a will dated 20 September 2001, probate whereof was on 3 July 2007 granted to Phillip Sidney Cole the executor named therein (who is the Defendant to the present proceedings). 4 The inventory of property discloses the following assets: Moneys at credit union $72,377 Term deposit $103,636 Money at bank $99 Shares in companies $382,032 Managed investments, with Asguard $285,798 Total $843,944 5 The Deceased had been married only once, to the Plaintiff, in 1950. Of that marriage were born two children, Phillip Sidney (born in 1952, who is presently aged 56) and Jonathan Wayne (born in 1960, who is presently aged 48). 6 By his will (which appears to have been prepared by the Deceased personally) the Deceased gave one third of his estate to his son Phillip, and one third of his estate to his son Jonathan. He gave the residue of his estate to the Plaintiff, "after the payment of all my just debts, funeral and testamentary expenses". 7 In calculating the value of the estate available for distribution, the costs of the present proceedings must be taken in consideration, since the Plaintiff, if successful in her claim, will normally be entitled to an order that her costs be paid out of the estate of the Deceased, whilst the Defendant, irrespective of the outcome of the proceedings, will normally be entitled to an order that his costs be paid out of the estate. 8 It was estimated on behalf of the Plaintiff that her costs will total $60,729, whilst it was estimated on behalf of the Defendant that his costs will total $57,503. I consider costs totalling in excess of $118,00 for a hearing occupying less than one day in a case which was in no way out of the ordinary, to be quite excessive. 9 The Plaintiff, who was born in 1929, is presently 79 years of age. 10 At the time of the hearing the assets of the estate comprised the following: Money on term deposit with Coastline Credit Union $552,707 Balance in Cooney Harvey Doney Trust Account $35,351 Shareholdings (value as at 18 July 2008) $327,151 Total $885,209 11 Apart from the costs of the present proceedings, to which I have already made reference, the estate is also liable to capital gains tax in an amount of about $40,000 (presumably in respect to the shareholding held by the Deceased). 12 Accordingly, at the time of the hearing, the value of the distributable estate, taking into account the costs of the present proceedings was in the order of $767,000. 13 At the time of his death the Deceased and the Plaintiff were registered proprietors as joint tenants of a house property situate at and known as 1 Webster Street, Kempsey, which had been their matrimonial home since 1975. The interest of the Deceased in that property passed by survivorship to the Plaintiff. The inventory of property discloses an estimated value of $240,000 in respect to that house property. 14 It would appear that there were difficulties in the marriage of the Plaintiff and the Deceased. Nevertheless, they remained married until the latter's death, and continued to live together under the same roof at the Webster Street property. However, for about twenty years before his death, the Deceased and the Plaintiff occupied separate bedchambers. 15 It should not be overlooked that the Plaintiff, during the course of her very lengthy marriage to the Deceased, made considerable contributions both direct and indirect, and both financial and non-financial, to the welfare of the Deceased and of the family consisting of the Plaintiff, the Deceased and their two children. For not inconsiderable periods, the Plaintiff contributed towards household expenditure the income which she received from conducting a family store, post office and newsagency. 16 When in 1975 the Kempsey property was purchased for $38,000, the Plaintiff made a direct financial contribution of $5,000 towards that purchase price. (I recognise, of course, that that property was purchased in the joint names, in the joint names of the Plaintiff and the Deceased, and that the interest of the Deceased therein has now passed by survivorship to the Plaintiff.) After the Plaintiff and her family moved to Kempsey in 1975, the Plaintiff worked as a cleaner in the Kempsey High School in order to supplement the family income. 17 During periods while the Deceased was suffering various serious illnesses not only did the Plaintiff nurse him, but she also paid all the living expenses of the family. The Plaintiff paid for the connection of electricity to the family's rural property (before they removed to Kempsey) and thereafter paid all electricity bills. The Deceased received assistance from the Plaintiff's parents in order to purchase that rural estate, and was allowed to run cattle and other livestock upon a property owned by the Plaintiff's mother. 18 In 2000 when the Deceased (who apparently was extremely careful with his money – the word "mean" would be a more accurate description) refused to support the Plaintiff, it was necessary for her to seek and to obtain a pension from Centrelink, despite the fact that she and the Deceased were still living together in the matrimonial home. At about that period the Plaintiff went to reside in the Defendant's holiday house at Hat Head for several months. Upon her return to the Kempsey residence the Plaintiff, although thereafter occupying a separate bedchamber from the Deceased, still continued to perform all the household duties and activities, including preparing most of the meals, and attending to all the washing and ironing. 19 In addition, it should almost go without saying, the Plaintiff was the homemaker and parent for the family, performing all the usual activities associated with those roles, although, I observe that both the Defendant and Jonathan dispute the adequacy and competence manifested by the Plaintiff in her fulfilment of those roles. 20 The Plaintiff continues to reside in the Webster Street property, which has been her home for the past 34 years. 21 The assets of the Plaintiff presently consist of: House property situate at and known as 1 Webster Street, Kempsey, having an estimated value of $240,000 Household furniture, having an estimated value of $2000 Cash in bank $10,000 22 The Plaintiff has the following liabilities Visa card debt $700 23 The Plaintiff provided details of her outgoings and expenditure, in a total amount of $17,736 a year. The Plaintiff's only income is an aged pension of $543 a fortnight. 24 The Plaintiff suffers from a number of health problems, including severe arthritis, and pernicious anaemia. She requires a knee replacement, and has regular injections for her anaemia. The Plaintiff said that she had been diagnosed with sleep apnoea, and requires the use of a sleep apnoea machine to assist with her breathing. The Plaintiff requires extensive dental work which she is informed will cost in excess of $2000. 25 The Plaintiff has been profoundly deaf for much of her life, and it has been necessary for her to wear a hearing aid. She is now desirous of obtaining enhancement of her hearing by way of a bionic ear, with a cochlear implant. However, no estimation of the costs of that procedure was provided. The Plaintiff said that, in the alternative, she would at a minimum, require a new hearing aid bi-annually. She estimated the cost of each such hearing aid to be $2,300. (That is, upon my understanding, such new hearing aids would cost her a total of $4,600 a year, although, in her affidavit of 4 February 2008, the Plaintiff referred to a new hearing aid costing $6000). 26 The claim of the Plaintiff must be approached in the light of the competing claims of her two sons, each of whom is, with the Plaintiff, a chosen object of the testamentary beneficence of the Deceased. 27 Phillip is presently aged 56. He changed his name from Cockle to Cole in 1978. His first two marriages each ended in divorce, and he has been married to his present wife since June 2002. He resides with her, and her son by a previous relationship, at a house property owned by him at 1 McCabe Place, Menai. 28 According to his affidavit evidence, the assets of Phillip and his wife consist of: House property situate at and known as 1 McCabe Place, Menai, having an estimated value of $400,000 House property situate at and known as 24 Bay Street, Hat Head, having an estimated value of $390,000 Contents of residences, having an estimate value of $20,000 Ford Falcon 2003 motor vehicle, having an estimated value of $10,000 1978 Haines Hunter V17L boat, having an estimated value of $3,000 Trailer, having an estimated value of $300 Superannuation of Phillip $103,000 Superannuation of Phillip's wife $28,500 Bank accounts $21,700 Shares $41,000 Life insurance policy $4,500 Total $1,029,000 29 Concerning the foregoing shares (to which in his affidavit evidence Phillip ascribed a value of $41,000), it emerged from his evidence under cross-examination, that, in fact, his total shareholding has a present value of somewhat in excess of $87,000. He said that of that total value, he himself owns beneficially shares having a value of about $36,000, whilst he holds on trust for his daughter Lisa shares to a value of $26,400 and for his stepson Anthony, shares to a value of $24,694. He said that the money which he holds on trust for his daughter, and which is invested by him on the stock market in shares held in the Defendant's own name, came from the Deceased before his death. Further, that the money held by him on trust for his stepson, and which is also invested by the Defendant in shares in his own name, came from the Defendant's present wife's brother and father. 30 According to Phillip the property at Hat Head was purchased in 1988 for $75,000, and is therefore subject to substantial capital gains tax, in the event that it be sold. Phillip stated that it was his intention to sell the residence at Menai when he reached retirement age and to construct a new residence at Hat Head. 31 Phillip gave his occupation as a self-employed investor, and described himself as being a "day share trader" since about 2003. He owns a share portfolio, and derives a small income from trading in shares. He provided details of his taxable income from that source, which in the past six years has ranged between $511, and $3,764. Phillip's wife is a primary school teacher, whose net income for the 2007 financial year was $52,886. 32 Phillip gave details of the outgoings of himself, his wife and her son, in a total amount of $53,000 a year. 33 Phillip has a number of serious health problems. He was diagnosed with bladder cancer in 2001, and he has not been in full-time employment since then. He has required surgical removal of tumours on three separate occasions, and in addition he has been diagnosed as a carrier of hemochromatosis. He also takes on medication for high uric acid levels, cholesterol, and elevated blood pressure. He does not receive any sickness benefits, unemployment benefits or other benefits from Centrelink. 34 Jonathan is presently aged 48. He is employed as a human resources officer by the New South Wales Government, receiving a net salary of $67,448 a year. He also receives $100 a week from a lodger in his residence. 35 Jonathan's assets consist of: House property situate at and known as 13 Corfu Street, Woolloomooloo, $500,000 Superannuation $93,000 Share portfolio $150,000 Cash in bank $10,000 36 Jonathan has no liabilities, but he said that his residence, which is an 1870 square sandstone cottage, requires extensive renovations, which will cost in the vicinity of $200,000. 37 Jonathan gave evidence of his annual outgoings, totalling about $22,000. Jonathan suffers from macular degeneration and ambliopedia in his left eye, which condition has left him with reduced vision. 38 A considerable quantity of evidence was placed before the Court (especially by Phillip and Jonathan) concerning the nature of the relationship between the Plaintiff and the Deceased, and between the Plaintiff and each of her sons, and concerning various incidents and events in the family, going back for many years. It is apparent that the relationship between the Plaintiff and her two sons has not been a particularly good one. Each of Phillip and Jonathan has manifested various complaints against their mother. 39 However, the central complaint that Phillip and Jonathan make against their mother, and the principal ground for their opposition to her receiving a greater share of the estate than that given to her under the will of the Deceased, is that they consider that she has been extravagant and profligate in her lifestyle, and irresponsible in matters of finance. Essentially, they feel that any additional benefit which she might receive (or, as I understand it, even the benefit to which she is entitled under the will) will only encourage this extravagance and that such benefit will be wasted or squandered, or that the Plaintiff may be vulnerable to the tricks of cunning cozeners and rogues or perpetrators of financial scams. 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 submission from Counsel for the respective parties. Those documents will be retained in the Court file. 42 The Plaintiff as the widow of the Deceased is an eligible person within paragraph (a) of the definition of that phrase contained in section 6 (1) of the Family Provision Act. As such she has the standing to bring the present proceedings. It will be appreciated that each of Phillip and Jonathan, as a son of the Deceased, is also an eligible person in relation to the Deceased. Apart from the Plaintiff and her two sons, there are no other eligible persons in relation to the Deceased. 43 In carrying out the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208 – 210 (the correctness of which test was affirmed by the High Court in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191) the Court must determine whether in consequence of the provisions of the will of a testator the applicant has been left without adequate provision for his or her proper maintenance. 44 The High Court in Singer v Berghouse (at 209 – 210) said that the determination of the first stage calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant 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 or her bounty. 45 I have already observed that a considerable quantity of evidence has been presented (largely at the instance of the Defendant) concerning the relationship between the Plaintiff and the Deceased throughout a marriage which continued over more than half a century, and between the Plaintiff and each son during the lifetime of those sons over similar periods. Further, the Defendant and Jonathan presented evidence of their opinion concerning what might compendiously be described as shortcomings in the character and lifestyle of the Plaintiff. 46 In the circumstances of the instant case, neither of those areas of evidence has any significant bearing upon the determination of the foregoing first stage identified by the High Court of Australia, being whether, in consequence of the Plaintiff receiving considerably less than one third of the distributable estate of the Deceased, she has been left without adequate provision for her proper maintenance. As was recognised by Kirby P, in Hunter v Hunter (1987) 8 NSWLR 573 at 575, it is important that in making the determination the Court should not be diverted from the simple and clear language of the statute. 47 The Plaintiff in her affidavit of 22 July 2008 said that she was seeking sufficient provision from the estate to enable her to remain in her home and to live independently as long as possible. If her health diminishes and she requires care, she wishes to have sufficient funds to relocate to an assisted living facility. 48 The Plaintiff gave evidence of various items of household equipment and appliances which required replacing, and for which she had received quotations from Harvey Norman in a total amount of $4279. 49 The Plaintiff said that her 1992 Ford motor care requires extensive maintenance. She is desirous of updating to a new motor vehicle, with less fuel consumption and air conditioning. She has obtained a quotation from Kempsey Toyota for a 2008 model Toyota Asssent automatic motor car, which would cost a net amount of $22,700. 50 According to the Plaintiff, her residence at Webster Street Kempsey is dilapidated, and requires extensive repairs to the interior and exterior thereof. 51 I have already referred to the complaints and criticisms expressed by Phillip and Jonathan of what they regard as their mother's extravagance and irresponsibility with money. Her financial practices and reliability are in no way determinative of the first stage in the two stage process recognised by the High Court of Australia in Singer v Berghouse, being a determination as to whether the applicant has been left without adequate provision for her proper maintenance. 52 The effect of the provisions of the will of the Deceased is, upon my understanding, that each of Phillip and Sidney will receive a little less than one third of the estate "free of all duties and charges", whilst the Plaintiff will receive the residue of the estate, after payment of "all my just debts, funeral and testamentary expenses". 53 The assets of the estate are estimated to have a present value of $885,209. If the costs of the present proceedings totalling about $118,00 be disregarded each of Phillip and Jonathan would receive about $295,000. From the residue then remaining, also in an amount of about $295,000, must then be deducted the liabilities of the estate, being capital gains tax of about $40,000, and the funeral and administration expenses (in amounts unquantified). 54 Whilst it is difficult to perform a precise calculation in the absence of any details provided by the executor of the funeral and testamentary expenses, it would appear (upon my calculations) that the Plaintiff, under the terms of the will, would be entitled to receive about $250,000 (or perhaps somewhat less). I note, however, that at the hearing it was estimated by Counsel for the Plaintiff that under the will the Plaintiff would receive between $250,000 and $270,000, whilst it was estimated by Counsel for the Defendant that the Plaintiff would receive about $253,000. 55 After a marriage extending over 57 years, with a house property in a somewhat dilapidated state, requiring extensive renovations and repairs, and having a fund in the order of $230,000, the Plaintiff, aged almost 80 years, subsists solely upon a very modest income of about $270 a week (being considerably less than her expenses and outgoings). She requires the replacement of many household items and appliances, has a motor vehicle almost 17 years old needing extensive maintenance work, leads a frugal and modest lifestyle, and suffers significant health problems. In all these circumstances I am entirely satisfied that the Plaintiff has been left without adequate provision for her proper maintenance 56 I consider that the Plaintiff should receive from the estate an additional sum sufficient to enable her to improve her frugal lifestyle, and to have a fund to enable her to acquire a new motor vehicle, to acquire necessary household appliances and utensils, to effect repairs to her residence, and to provide a fund to meet unexpected contingencies. Moreover, any further provision should also enable the Plaintiff to undergo the bionic ear implant procedure that she identified, which offers the possibility of greatly improving her quality of life, and of extending the prospects of her being able to live independently. Neither should the Court overlook the possibility that advancing years and increasing physical infirmity may require the Plaintiff to remove into some form of retirement or hostel accommodation 57 Further, it seems to me totally inappropriate that the benefit given to the Plaintiff by the will of the Deceased should be significantly less than the benefit given to each of her sons, in circumstances where each of her sons is in far better financial and material circumstances than his mother. 58 The competing claims of the two sons, therefore, do not in my conclusion have the effect of reducing, let alone extinguishing, any order provision an entitlement to which I consider the Plaintiff to have otherwise established. 59 The perception on the part of the Defendant and of his brother that their mother may waste or squander any additional benefit which she may receive from their father's estate has equal application to the benefit which she is entitled to receive under the will of the Deceased. In either case that perception should not deprive the Plaintiff of either the benefit to which she is unquestionably entitled under the will or the additional benefit to which I consider she is entitled by order the Court. It is not for either the Defendant and his brother or the Court to direct how a person of full legal and mental capacity should conduct her life or deal with her assets. 60 In my conclusion, the Plaintiff should receive from the estate of the Deceased an additional benefit in an amount of $150,000. It seems to me that the simplest way by which she should receive that benefit is by giving to the Plaintiff, in lieu of the benefit given to her by the provisions of the will, a legacy of $400,000, such legacy to be borne equally by the benefits to which Phillip and Jonathan are entitled under the will. However, if the parties desire that the additional benefit be implemented in some other fashion, I will reserve liberty to apply. 61 Accordingly, I make the following orders: 1. I order that, in lieu of the benefits given to her by the will of the late Sidney Thomas Cockle ("the Deceased"), the Plaintiff receive a legacy in the sum of $400,000, such legacy to be borne equally by the benefits to which Phillip Sidney Cole and Jonathan Wayne Cockle are entitled under the said will, and such legacy not to bear interest if paid on or before 23 January 2009, and if not so paid to bear interest at the rates prescribed for unpaid legacies by the Probate and Administration Act 1898. 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. 3. The exhibits may be returned. 4. I reserve to the parties liberty to apply. ********** 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.