McCarthy v Tye

1. [1]

   THE COURT: The appellant seeks an extension of time in which to file an appeal against a decision of a Judge of the Equity Division (Young AJA) on the appellant’s family provision claim under the Succession Act 2006 (NSW) (Succession Act). The primary Judge ordered that the appellant receive a legacy of $85,000 out of the estate of the late Diane Marjorie Green (the Deceased). [1] The appellant, who has been self-represented in this Court, seeks an order providing for a greater legacy out of the estate.

2. [2]

   The respondent, the executor of the Deceased’s estate, does not object to an extension of time for the filing of the appeal. However, the respondent has filed extensive submissions in opposition to the appeal and contends that the appeal should be dismissed. The respondent has not filed a cross-appeal.

Legislation

1. [3]

   Section 57(1) of the Succession Act provides that “eligible persons” who may apply to the Court for a family provision order in respect of the estate of a deceased person include:

2. [4]

   Section 59 of the Succession Act relevantly provides as follows:

3. [5]

   Section 60(1) of the Succession Act provides that:

4. [6]

   Section 60(2) of the Succession Act sets out sixteen matters that the Court may consider. The last (s 60(2)(p)) is:

5. [7]

   The Interpretation Act 1987 (NSW) (Interpretation Act), s 21C(2) provides that for the purposes of any Act, a person is in a de facto relationship with another if “they have a relationship as a couple living together” and “they are not married to one another or related by family”. Section 21C(3) provides that in determining whether two persons have a relationship as a couple for the purposes of s 21C(2) all the circumstances of the relationship are to be taken into account, including any of the following matters that are relevant in a particular case:

6. [8]

   The definition of a de facto relationship in s 21C of the Interpretation Act is in substance the same as the definition of the term in the Property (Relationships) Act 1984 (NSW) (Relationships Act), s 4. The latter definition applies for the purposes of the Relationships Act.

7. [9]

   The appellant was represented by counsel at the trial. The principal contention advanced on his behalf was that he was an “eligible person” because he satisfied s 57(1)(b) of the Succession Act. The primary Judge rejected this contention because he was not satisfied that the appellant and the Deceased were de facto partners at the date of the Deceased’s death.

8. [10]

   The primary Judge accepted an alternative contention that the appellant satisfied s 57(1)(f) of the Succession Act, in that he was a person with whom the Deceased was living in a close personal relationship at the time of her death. Accordingly, his Honour found that the appellant was an “eligible person” who was entitled to make a family provision claim, provided that he could also satisfy s 59(1)(b) of the Succession Act. His Honour found that there were factors warranting the making of the family provision application and that the appellant therefore satisfied the requirement in s 59(1)(b). Accordingly, the appellant established that he was entitled to make a family provision claim against the Deceased’s estate.

9. [11]

   The primary Judge concluded that the Deceased’s will did not make adequate provision for the proper maintenance or advancement in life of the appellant and that a family provision order should be made in his favour. [2] In view of the appellant’s assets (amounting to about $187,000), the modest size of the estate and the other claims on the Deceased’s bounty, his Honour considered that a legacy of $85,000 was appropriate for the appellant.

10. [12]

    In one sense, the primary Judge’s rejection of the appellant’s claim to have been the Deceased’s de facto partner was of little consequence. The findings that the appellant was living in a close personal relationship with the Deceased and that there were factors warranting the making of the family provision application were enough to entitle the appellant to make his family provision claim (although the findings did not of themselves guarantee that the claim would succeed). Nonetheless, the focus of the appellant’s contentions in this Court was a challenge to the primary Judge’s rejection of his claim to have been the Deceased’s de facto partner at the time of her death.

11. [13]

    The appellant gave two reasons for challenging the primary Judge’s rejection of his claim to have been the Deceased’s de facto partner. The first is that, as he explained at length and with some emotion in his oral submissions, he considers it an injustice that his relationship with the Deceased was not recognised by the Court. The second is (so he argues) that his claim to a more substantial legacy from the estate would be strengthened if he is found to have been a de facto partner of the Deceased rather than merely someone in a “close personal relationship” with her.

Preliminary

1. [14]

   At the outset of the hearing, the appellant applied for an adjournment of the proceedings on the ground that he was self-represented and that his poor health prevented him from preparing the case adequately. The Court refused his application for reasons given by the presiding Judge at the time. In the event, the appellant addressed the Court for some time without obvious physical discomfort.

2. [15]

   The appellant’s notice of appeal was filed some nine months out of time. The respondent’s written submissions opposed the grant of an extension of time to the appellant for the filing of his notice of appeal. At the hearing, however, Mr Meek SC, who appeared with Mr Djurdjevic for the respondent, did not oppose time being extended.

3. [16]

   The respondent’s written submissions pointed out that an appeal requires leave unless the matter at issue amounts to the value of $100,000 or more and that an appellant must show that there is a realistic chance of improving the result by at least $100,000. [3] However, no submission was made that the appellant, in addition to requiring an extension of time for the filing of his notice of appeal, also required leave to appeal.

4. [17]

   In these circumstances it is appropriate that an order be made extending the time for the filing of the appellant’s notice of appeal.

Background

1. [18]

   The Deceased was born on 6 January 1948 and died on 12 May 2014, aged 66. By her will made on 18 July 2011, the Deceased appointed the respondent, her twin brother, as the executor of her estate. The will gave 40 per cent of the estate to the Deceased’s two nieces and the balance of the estate to the respondent.

2. [19]

   The appellant was aged 50 at the date of the hearing. He obtained an Associate Diploma of Civil Engineering from the University of South Australia. Before 2002 he worked as an engineer/designer and surveyor with a local council. The appellant has long suffered from chronic fatigue syndrome and has not been in paid employment since 2003. The appellant has no children.

3. [20]

   The respondent obtained a grant of probate of the Deceased’s will on 5 August 2014. The inventory of assets and liabilities valued the estate at $1,164,210 for probate purposes. [4] The main assets were:

4. [21]

   A supplementary affidavit sworn by the executor shortly before the hearing valued the assets of the estate at that time at $900,699, some $263,511 lower than the valuation for probate purposes. The principal assets were identified as:

5. [22]

   It appears that the moneys in the bank accounts had been depleted by a partial distribution of $157,960 to the beneficiaries nominated in the will (including the respondent). [5] The supplementary affidavit indicated that legal costs of $16,146 had been incurred in possession proceedings brought on behalf of the estate and that the estate had incurred a possible liability for capital gains tax as a consequence of the sale of the Manning Point Property.

6. [23]

   The appellant’s case at trial was that he and the Deceased had lived together at the Forster Property from 2003 until the Deceased’s death. The appellant’s counsel submitted to the primary Judge that:

7. [24]

   The appellant sought an order that he receive the Forster Property by way of family provision. The written submissions of the appellant’s counsel at the trial relied on two matters in particular:

The Primary Judgment

1. [25]

   The primary Judge recorded that the case had been heard over two days. Fourteen witnesses gave evidence, of whom eleven had been cross-examined. [6] His Honour noted that witnesses called by the appellant tended to support the existence of a de facto relationship between the appellant and the Deceased, while those called by the respondent tended the other way. [7]

2. [26]

   The primary Judge found that after allowing for the partial distribution to the beneficiaries, the estate comprised assets to the value of $704,000, of which $552,000 could be attributed to the Forster Property. After allowing for claimed legal costs of $156,000 (which his Honour described as “extravagant”) and the capital gains tax liability of $19,000, the funds in the estate amounted to only $529,000. Thus either the Forster Property would have to be sold or the beneficiaries would have to fund the deficiency. [8]

3. [27]

   The primary Judge said that he did not think that any of the witnesses sought to mislead him, but each “only saw part of the picture”. [9] His Honour also observed that friends or relatives of a person were apt to form an opinion about the nature of that person’s relationship “on too slender an evidentiary basis”. For that reason it was important to consider any corroborative evidence or evidence from completely independent people. [10]

4. [28]

   His Honour’s comment that the witnesses were not attempting to mislead him appears to have been a reference to witnesses other than the appellant. The primary Judge rejected the appellant’s explanation for signing documents that were contrary to his case. In particular, his Honour did not accept the appellant’s claim that he was so sick or impaired that he could not understand the contents of forms he had completed and signed. His Honour observed that, contrary to the appellant’s claims of being unable to comprehend documents, he handled his cross-examination shrewdly and indeed showed himself to be the intellectual equal of the cross-examiner. [11]

5. [29]

   As has been noted, the primary Judge rejected the appellant’s submission that he had been in a de facto relationship with the Deceased at the date of her death. It is fair to say that his Honour took a rather broad-brush approach to the factual question, perhaps because he was not referred to s 21C of the Interpretation Act. In finding that the appellant and the Deceased were not de facto partners at the relevant time his Honour took into account that: [12]

6. [30]

   The primary Judge rejected an alternative contention that the appellant satisfied the definition of “eligible person” because he had been wholly or partly dependent on the Deceased at a time when he was a member of her household. [13] His Honour considered that there was insufficient evidence of either financial or emotional dependence. [14]

7. [31]

   The primary Judge then turned to consider whether the appellant was an “eligible person” because he had been in a “close personal relationship” with the Deceased at the time of her death. [15] His Honour dealt with this question as follows: [16]

8. [32]

   The next question, given that the appellant was an eligible person, was whether in all the circumstances of the case there were factors which warranted the appellant making an application for a family provision order. [17] Once again, his Honour concluded that the appellant “just [got] over the barrier”. [18]

9. [33]

   The final question was whether the provision made for the appellant in the Deceased’s will was proper in all the circumstances. His Honour found that the appellant had some substantial assets as follows: [19]

10. [34]

    The three beneficiaries under the Deceased’s will were the respondent, her twin brother, and her two nieces. The primary Judge considered that the respondent had no particular needs. [20] One of the nieces had multiple sclerosis and was unlikely to work again, [21] while the other had a modest weekly income which was wholly expended on her regular outgoings. [22]

11. [35]

    The primary Judge dealt with the appellant’s claim for family provision as follows: [23]

12. [36]

    His Honour ordered that the appellant’s costs, capped at $85,000, should be paid out of the estate. The respondent’s costs were also to be paid out of the estate.

Post-judgment developments

1. [37]

   An affidavit was read on behalf of the respondent in this Court to explain developments post-dating the judgment in the Equity Division proceedings. The following events have occurred:

Appellant’s submissions

1. [38]

   The appellant’s written submissions contain a great deal of material irrelevant to any issue that can arise on the appeal. They also include intemperate allegations of misleading conduct, predatory behaviour, dishonesty and abuse of power levelled against a number of people.

2. [39]

   The appellant’s oral submissions were even more intemperate as he sought to blame many others, including the various lawyers who have acted on his behalf in the past, for his current circumstances. His main contention, relevant to the appeal was that he and the Deceased were committed to each other and were life partners and that the primary Judge should have found this to be the fact. The appellant also repeatedly asserted that all he wanted was his home and that he would never rest until his claim was accepted. He maintained that he was entitled to the Forster Property notwithstanding that he had never been registered as the proprietor and had never been recognised as having a proprietary interest in the Forster Property.

3. [40]

   It was pointed out to the appellant that his appeal could only succeed if he could identify some error of fact or law in the Primary Judgment. As best as the Court was able to discern, the appellant’s contentions in response to that advice were that:

4. [41]

   The appellant also submitted that the primary Judge overstated the appellant’s assets at the date of the hearing and failed to take into account the appellant’s needs attributable to his illness and disabilities.

Reasoning

1. [42]

   The primary Judge referred in summary form to a substantial body of evidence inconsistent with the appellant’s claim that he had lived in a de facto relationship with the Deceased from 2003 until her death in 2014. The evidence included the following:

2. [43]

   In his oral submissions in this Court, the appellant attempted to explain why this documentary evidence was not necessarily fatal to his case. He claimed, for example, that the Deceased only signed the Agreement because she was induced or influenced by the respondent to do so. This submission overlooked the respondent’s evidence that the Deceased initiated contact with her solicitor and that the solicitor explained the terms of the Agreement to her. The respondent’s evidence on this issue was not challenged by the appellant’s counsel at the trial.

3. [44]

   The appellant also claimed in his submissions to this Court that he could not properly read or understand the various forms he had completed and signed and thus did not appreciate their significance. The respondent gave evidence to this effect at the trial but the primary Judge, having seen the appellant give evidence and taken into account his level of education and ability to respond to questions, rejected this explanation. It is difficult to see how his Honour could have done otherwise.

4. [45]

   As the primary Judge found, the numerous medical and psychological reports in evidence also do not assist the appellant’s case. It is true that care must be taken in relying on material of this kind for purposes that neither the patient nor the health practitioner may have had in mind at the time. [26] It must also be borne in mind that the appellant cannot be expected to have been familiar with the statutory definition of the term “de facto relationship”. Nonetheless, the histories recorded in the reports suggest that the appellant did not believe that he and the Deceased were de facto partners as that term is ordinarily understood.

5. [46]

   It is not necessary to refer in detail to the various reports and two examples will suffice. A psychological assessment prepared in November 2008,after a consultation with the appellant, records the following:

6. [47]

   Both of these reports clearly record information provided directly by the appellant and reflect a consistent theme in the appellant’s medical records. The reports cannot be dismissed as the product of inaccurate recording by the authors or as irrelevant to the issue the primary Judge had to decide. They provide strong support for the primary Judge’s findings.

7. [48]

   The appellant criticised the primary Judge for not accepting the evidence of the “independent” witnesses as to the nature of the relationship between the appellant and the Deceased. However, his Honour had to take account of the totality of the evidence, including the documentary evidence to which we have already referred. He also had to take into account the evidence of witnesses who heard the Deceased say on numerous occasions that the appellant was a “boarder” or a “friend”. For example, Ms Kendall, one of the Deceased’s nieces, testified that the Deceased repeatedly told her during visits to the Forster Property that the appellant was only a friend and a boarder in the house. Ms Kendall was asked about her recollection in cross-examination, but her account was not seriously challenged.

8. [49]

   As the primary Judge acknowledged, witnesses called on behalf of the appellant stated that they believed that the appellant and the Deceased had a loving relationship. Some stated specifically that they believed that the appellant and the Deceased were de facto partners. This evidence was relevant to the “reputation and public aspects of the relationship”. [27]

9. [50]

   For example, Ms Godwin gave evidence that she and her husband, Mr Murphy, often socialised with the appellant and the Deceased throughout the period 2003 until 2014. In her affidavit, Ms Godwin described them as a “loving couple”. But in her cross-examination Ms Godwin agreed that the Deceased had never raised the topic of her relationship with the appellant. Nor did she ever mention the Agreement signed in 2011. Not surprisingly, Ms Godwin accepted that there were aspects of the relationship between the appellant and the Deceased about which she knew nothing. Those aspects included some of the matters the primary Judge took into account.

10. [51]

    Mr Murphy’s firm performed accounting work for the Deceased. In his affidavit, Mr Murphy said that he formed the belief that the appellant and the Deceased lived together in a bona fide domestic relationship. In his cross-examination, however, Mr Murphy said that he was not sure whether the appellant and the Deceased had separate bedrooms nor whether they maintained separate bank accounts (as they did). The cross-examination included the following exchange:

11. [52]

    In our view, the evidence is entirely consistent with the primary Judge’s findings that the appellant and the Deceased were not living in a de facto relationship at the date of her death, but were in a close personal relationship at that time. The appellant had not established that the findings were erroneous.

12. [53]

    The appellant repeatedly referred in his submissions to being left destitute as a result of the primary Judge’s decision. The Court pointed out to him that the critical time for determining whether the Deceased’s will made adequate provision for his proper maintenance or advancement in life is the date of the hearing. [28] In response, the appellant submitted that the primary Judge had overstated the extent of the appellant’s assets at the date of the hearing.

13. [54]

    There is no substance in this submission. The primary Judge’s finding as to the appellant’s assets was based entirely on the appellant’s own evidence. [29] In an affidavit sworn shortly before the hearing the appellant summarised his assets. The Primary Judgment simply records the figures appearing in the appellant’s summary.

14. [55]

    The primary Judge’s determination of the quantum of the family provision order is a “true discretionary decision”. [30] It is therefore reviewable only in accordance with the principles stated in House v The King. [31]

15. [56]

    At the trial a rather faint submission was made that a wise and just testator would have left the appellant the house in which he had lived (albeit apparently paying rent for much, if not the whole of the time) for about 13 years. The difficulty with that submission, as the primary Judge pointed out, is that it would require the Court in effect to disregard the claims of the beneficiaries under the will, particularly the two nieces, both of whom had financial needs.

16. [57]

    The alternative submission advanced at trial on behalf of the appellant was that the appellant should receive a capital sum which would enable him to rent or purchase another property in the Forster area. The primary Judge made the family provision order precisely on this basis. His Honour considered that a legacy of $85,000, together with the appellant’s own resources, would enable him to purchase a home in the area and have a “nest egg” in case of health failure. The approach taken by the primary Judge reflected the submission made on behalf of the appellant and discloses no appellable error.

17. [58]

    It also seems clear enough that the trial proceeded on the basis that the appellant’s poor health over a number of years made it unlikely that he would rejoin the paid workforce in the future and that he was therefore likely to remain dependent on social welfare benefits. The primary Judge’s determination took account of the appellant’s poor health and made some modest provision for any further deterioration in the appellant’s health.

18. [59]

    No appellable error has been shown in the order made by the primary Judge.

Orders

1. [60]

   The following orders should be made: