Birch v O'Connor

[2005] NSWCA 90

Reported Decision: 62 NSWLR 316

Court of Appeal

CITATION:	BIRCH v O'CONNOR [2005] NSWCA 90
HEARING DATE(S):	22/03/2005
JUDGMENT DATE:	22 March 2005
JUDGMENT OF:	Hodgson JA at 23; Tobias JA at 24; Bryson JA at 1
DECISION:	See para [22]

CATCHWORDS:	FAMILY PROVISION - jurisdiction of District Court extends to notional estate. - DISTRICT COURT - jurisdiction under Family Proivsion Act extends to notional estate.
LEGISLATION CITED:	Family Provision Act 1982 District Court Act 1973
CASES CITED:	Commonwealth Bank v Hadfield (2001) 53 NSWLR 614
PARTIES:	Ronald Horace Birch - Claimant John O'Connor - Opponent
FILE NUMBER(S):	CA 40481/2004
COUNSEL:	M. Gorrick - Claimant P. Maiden - Opponent
SOLICITORS:	Byrnes Lawyers - Claimant McPhell Kelshaw - Opponent

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	21/01
LOWER COURT JUDICIAL OFFICER:	Phegan DCJ

40481/2004

HODGSON JA
TOBIAS JA
BRYSON JA

TUESDAY 22 MARCH 2005

RONALD HORACE BIRCH v. JOHN O’CONNOR

Judgment

1 BRYSON JA: Horace Arthur Birch late of Walcha, grazier, deceased, died there on 7 July 2000 aged 83 years. On 23 October 2002 the Equity Division granted probate of the deceased’s last will dated 3 April 2000 to Mr John O’Connor, the now opponent, one of the executors appointed under the will, the other having renounced.

2 The short effect of the will is that the testator gave a legacy of $40,000 to Minda Lewis, his housekeeper, and gave the residue of his estate in three shares, one to Minda Lewis and one each to his sons Patrick and Ronald Horace Birch; Mr Ronald Horace Birch is the claimant in the present proceedings. Minda Lewis has since died and Mr O’Connor is her executor.

3 The affidavit of Mr O’Connor dated 22 September 2003 giving an account of the assets and liabilities of the estate shows that at that time, after some administration had taken place, he held assets which he valued at $346,740.29, that there were liabilities not then paid which he estimated at $44,000 and that Mr Ronald Horace Birch had a claim against the estate for moneys paid on account of the estate of $11,272. The short effect without attempting exactitude is that the size of the estate then appeared to be a little under $300,000.

4 Mr Ronald Horace Birch brought proceedings by summons in the District Court at Port Macquarie for further provision to be made for him pursuant to s 7 of the Family Provision Act 1982 out of the estate and notional estate. Those proceedings came on to be heard before his Honour Judge Phegan on 17 May 2004. As the claim in the summons shows, Mr Ronald Horace Birch sought provision out of notional estate as well as out of the estate of the testator. The reference to notional estate is a claim that a bank account jointly owned by the testator and Minda Lewis at the time of the testator’s death or some part of the moneys in it should be designated as notional estate for the purpose of provision being ordered out of the account.

5 On 18 May 2004 Phegan DCJ heard argument on the question whether the District Court had jurisdiction to grant provision out of notional estate. After hearing argument his Honour on 18 May 2004, for reasons then stated, decided,

I accordingly find that I have no jurisdiction to make an order designating the notional estate under s 27”. (referring to s 27 of the Family Provision Act )

6 His Honour was of the view that the structure of the Family Provision Act showed that the powers given to “the Court” by that Act relating to designation of notional estate were not conferred on the District Court by subs.134(1)(c) and (2) of the District Court Act 1973. After his Honour had stated his reasons and conclusion counsel representing Mr RH Birch told his Honour (in a duly respectful manner) of his wish to consider an interlocutory appeal against that ruling; the effect of what counsel told the trial judge was that there was a wish to appeal at the interlocutory stage, that is to say, not to await the conclusion of the proceedings and a decision on provision before testing his Honour’s order. This led his Honour to say, (p 10 of the transcript of 18 May),

Well I formally then, I adjourn the matter pending the resolution of the appeal on my interlocutory judgment ... .

7 Costs were reserved.

8 Mr Birch as claimant now applies to the Court of Appeal by ordinary summons of 8 September 2004 for leave to appeal. The right of appeal, including rights which depend on the grant of leave, is conferred by s 127 of the District Court Act 1973 and relates under subs(1) to a judgment or order, thus:

a party who is dissatisfied with a judge’s judgment or order in an action may appeal to the Supreme Court.

9 S 127 goes on in subs (2) to make it clear that the right of appeal extends, by leave, to an appeal from an interlocutory judgment or order.

10 The order made by Phegan DCJ which comes under attention is the order of adjournment; no right of appeal is available simply against his Honour’s decision that there was no jurisdiction to make an order designating notional estate. It is clear from his Honour’s reasons and the transcript record of events leading to the order of adjournment that that order of adjournment gave effect to the decision about jurisdiction and that the substance of the events is that his Honour was of the view that he should not and was not willing to entertain the proceedings further on the basis that the Court had jurisdiction to designate notional estate.

11 Although it may perhaps be a little unusual that an order of adjournment should lead to an appeal or to the grant of leave to appeal, the circumstances in which the order of adjournment was made show in my view that it is an appropriate vehicle for testing the decision on jurisdiction. That decision is one of some general importance and also considerable importance to the parties to this litigation and ought in my view to attract a grant of leave to appeal.

12 Submissions by the parties on the substance of the appeal have been put before the Court of Appeal in writing and orally in a concurrent hearing. S 134 of the District Court Act 1973 gives the District Court jurisdiction in some Equity proceedings:

(1) The Court shall have the same jurisdiction as the Supreme Court and may exercise all the powers and authority of the Supreme Court in proceedings for -
. . .
(c) An order under s 3 of the Testators Family Maintenance and Guardianship of Infants Act 1916 or an order under s 7 of the Family Provision Act 1982.
(2) In any proceedings pursuant to subs (1)(c) the Court shall not have power to make an order for provision under the Testators Family Maintenance and Guardianship of Infants Act 1916 or the Family Provision Act 1982 that will or may result in the amount of provision so made exceeding $250,000.

13 I have emphasised words which empower the District Court to exercise all the powers and authority of the Supreme Court in proceedings under s 7 of the Family Provision Act 1982.

14 In my view the correct approach to the construction of s 134(1)(c) is to give full effect to its terms; the approach to its construction should not be restrictive. Compare Commonwealth Bank v Hadfield (2001) 53 NSWLR 614 at 624-625 (Bryson J).

15 The word ‘Court’ is defined in s.6 of the Family Provision Act 1982 in these terms:

"Court" means:
(a) the Supreme Court, in relation to any matter (including a matter referred to in paragraph (b)), or
(b) the District Court, in relation to a matter for which it has jurisdiction under section 134 of the District Court Act 1973 .

16 So by use of the words “the Court” jurisdiction under the Family Provision Act 1982 is given to both the Supreme Court and to the District Court, in the latter case within the limits in s 134 of the District Court Act. The learned trial judge did not advert to the definition of the word ‘Court’ in his reasons although it had been referred to in argument before him. Once the definition is adverted to it is my opinion that it answers all the concerns which his Honour expressed.

17 S 7 of the Family Provision Act provides:

7 Provision out of estate or notional estate of deceased person
Subject to section 9, on an application in relation to a deceased person in respect of whom administration has been granted, being an application made by or on behalf of a person in whose favour an order for provision out of the estate or notional estate of the deceased person has not previously been made, if the Court is satisfied that the person is an eligible person, it may order that such provision be made out of the estate or notional estate , or both, of the deceased person as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person.

18 I have emphasised words which show that provision may be ordered out of notional estate. “Notional estate” is defined in s 6 of the Family Provision Act 1982 in these terms:

“notional estate" , in relation to a deceased person, means property designated by the Court under section 23, 24 or 25 as notional estate of the deceased person.

19 Each of ss.23, 24 and 25 of the Family Provision Act 1982 in Pt 2 Division 2 speaks in terms of empowering the Court to “make an order designating as notional estate” property referred to. In these sections the word ‘Court’ read with the definition of ‘Court’ in s 6 refers to the District Court in relation to a matter in which the District Court has jurisdiction under s 134 of the District Court Act 1973. Mr RH Birch’s proceedings in the District Court are within that jurisdiction; there is no reasonably available view in which he might hope to recover a provision as large as $250,000.

20 When all these provisions are read together there is in my opinion no room for doubt that the District Court has power to make orders designating property as notional estate under s 23, 24 and 25 when exercising jurisdiction conferred on it by s 134 (1)(c). This power extends to any other part of the exercise of jurisdiction with respect to designating property as notional estate including s 27 of the Family Provision Act. It is not only that s 134 confers power on the District Court to act under s 7. In the course of exercising that power, the District Court may, as the terms of s 7 themselves show, order provision out of notional estate. Subs 134(1) of the District Court Act expressly confers the same jurisdiction as the Supreme Court and all the powers and authority of the Supreme Court in the proceedings under s 7 to which it refers.

21 For these reasons I am of the view that the learned trial judge was incorrect in his ruling relating to jurisdiction; in my opinion his Honour had full power to hear and determine the whole of Mr RH Birch’s claim, including his claim that certain property should be designated as notional estate.

22 In my opinion the Court of Appeal should make the following orders.

1. Leave to appeal granted.
2. The order of adjournment of 18 May 2004 is set aside.
3. Proceedings are remitted to the District Court to be further dealt with in accordance with the decision of the Court of Appeal.

With respect to costs I am of the view that the Court of Appeal should order that the opponent and respondent is to pay the claimant and appellant’s costs of the summons and of the appeal out of the estate of the testator. The opponent and respondent is to have a certificate for payment out of the Suitor’s Fund.

23 HODGSON JA: I agree.

24 TOBIAS JA: I also agree.

25 HODGSON JA: The orders presently proposed I think just say “remitted to the District Court”. There is no reason why the matter should not just go back to Judge Phegan. He is almost in a position to give judgment is he?

26 MAIDEN: No. There hasn’t been any cross-examination on the affidavit.

27 So that order will leave open the option of his Honour and the parties determining whether or not his Honour is part heard or the matter commencing afresh before another judge so I think--

28 HIS HONOUR: If the parties are content to have the order in that form.

29 MAIDEN: Thank you, I am.

30 BRYSON JA: Could I just say how unfortunate this litigation appears to me. It’s been quite a burden on the estate which is not really large, it’s a modest estate and I hope all concerned keep their minds open to any room for compromise that may exist.

31 HODGSON JA: The orders of the Court are as proposed by Bryson JA. The Court will now adjourn.

**********