Collins v McGain - [2002] NSWSC 740

No judgment structure available for this case.

CITATION: Collins v McGain & Anor [2002] NSWSC 740 revised - 28/08/2002

FILE NUMBER(S): SC 2403/01

HEARING DATE(S): 12/08/02,13/08/02,14/08/02

JUDGMENT DATE: 21 August 2002

PARTIES :

David John Collins - Plaintiff
Beverley Ann McGain & Lloyd Mead - Defendants

JUDGMENT OF: Acting Master Berecry

COUNSEL : T Hodgson (Plaintiff)
R Darke S.C. (Defendant)

SOLICITORS: Harris & Compant Solicitors (Plaintiff)
Lane & Lane (Defendant)

CATCHWORDS: Purpose of the Act - divesting assets by gift - - maintenance of lavish lifestyle - spouses assets to be considered - absence of evidence supporting plaintiff's needs - long estrangement from deceased - - moral right.

LEGISLATION CITED: Family Provision Act, 1982 (NSW)
Testator's Family Maintenance and Guardianship of Infants Act 1916 (NSW)

CASES CITED: Stuart v McDougall (unreported NSWSC 19.11.87)
Singer v Berghouse (No 2) (1994) 181 CLR 201
Daly v Smith (unreported) NSWSC 25 May 1994
Blore v Lang (1960) 104 CLR 124 at 137
Bosch v the Perpetual Trustee Company Ltd (1938) AC 463 at 477
Cooper v Dungan (1976) 50 ALJR 539 at 542
Cook v Cook (unreported NSWCA 14.10.97)
Caska v Caska (1989) NSWSC 289 at [33]
Eggler v Mitchelmore (unreported NSWCA 11.11.92)
Moratelli v Westhoff (unreported 2000 NSWSC 279
Shearer and the Public Trustee; Hawke and the Public Trustee (unreported BC 9801169 Young J 23 March 1998)

DECISION: 1.The proceedings be dismissed and the plaintiff pay the defendant's costs

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Berecry AM

21 August, 2002

2403/01 DAVID JOHN COLLINS v BEVERLY ANN MCGAIN & LLOYD MEAD

JUDGMENT

1 Master: The plaintiff commenced proceedings pursuant to s7 of the Family Provision Act in relation to the estate of his mother, the late Beatrice Margaret Mead, on 1 May 2001. The deceased died on 28 August 2000, therefore the application is brought within time. The plaintiff is the son of the deceased, he was born on 26 October 1934. He is 68 years old.

2 The first defendant, Beverley Ann McGain is the daughter of the deceased. The second defendant is the widower of the deceased, although he was not the father of either the plaintiff or the first defendant. The defendants are the co executors of the estate of the deceased.

3 Under the provisions of the deceased’s will, her grandson, Andrew Collins was given a legacy of $20,000. The second defendant was given the right to reside in a residence of his choice during his lifetime, and the balance of the estate was bequeathed to the first defendant. The actual estate has a value of approximately $5,500,000. The deceased held real estate as joint tenant with the first defendant in respect of six properties, the total value of which was approximately $13,000,000. The first defendant takes those properties by survivorship.

4 The plaintiff seeks an order that provision be made out of the deceased’s estate of an amount equivalent to one half of the actual and notional assets of the estate. The plaintiff has no assets and is unemployed. His evidence is that he has health problems arising from a dormant bacteria which causes stomach ulcers to bleed, resulting in anaemia and for six months prior to August 2001 was experiencing extreme stomach cramps and chest pain.

5 The plaintiff gave, by way of gift, to his present wife, the sum of $11,610,037 in 1985. The plaintiff’s wife’s assets have a current value of approximately $6,800,000. Of that amount, it would appear that the sum of $433,000 may represent the value of assets she acquired independently of the gift given to her by her husband in 1985. That sum represents her interest in two properties she owned with her children at Annandale and Ryde. The $6,800,000 is made up of the following

6 (i) the home unit situated at 6/255 Hedges Avenue,

Broadbeach $1,500,000

(ii) a one third interest in the property situated at

Morrison Street, Ryde $213,000

(iii) a loan secured by mortgage in respect of

property situated at Kennedy Drive, Tweed

Heads to Ms Billie Johns (Aunt) $115,000

(iv) motor vehicle $433,000

(v) furniture objets d’art and household contents $800,000

(vi) credit in bank account $580,000

(vii) jewellery and personalty $200,000

(viii) term deposit at bank $1,700,000

(iv) property at 2 Witches Chase, North

Tambourine $1,260,000

7 There was also a joint bank account at Westpac in the names of both the plaintiff and his wife, which contains approximately $330,000. The plaintiff and his wife are signatories to this account although the plaintiff’s evidence is that the funds in that account came solely from his wife.

8 The defendants have not put on any evidence concerning their assets. The only indication is the properties that are now owned by the first defendant pursuant to the doctrine of survivorship, and the provision made for her in the will of the deceased.

Plaintiff’s Background

9 The plaintiff’s father commenced the company known as DA Collins & Sons Pty Ltd (“the Company”) in 1953. The Company was involved in the importing and wholesaling of Manchester and soft goods. In that year, the plaintiff finished school. After serving three months national service in the Army, he commenced employment with Winns Ltd (“Winns”) as a retail salesman in the manchester department. He continued to work for Winns until the end of 1955, when he commenced employment with DA Collins & Sons Pty Ltd as a storeman/suburban traveller. At that stage, the business employed a staff of three: namely his father, a secretary and himself. The shareholding in the company at that stage consisted of two shares held by the deceased and the father, each having one share. When the plaintiff turned 21, he was given 200 shares in the company. A resolution was passed by the shareholders at a meeting on 31 March 1955, which allotted 200 shares at £1 each to DA Collins, 200 shares at £1 each to the deceased and 200 shares at £1 each to the plaintiff. The plaintiff continued to work for the company as a storeman/salesman.

10 In 1960, the plaintiff’s father died. The deceased acquired her husband’s shares by survivorship. By 1985, the shareholding in the company was as follows – the deceased held 9,904 ordinary shares, the plaintiff held 9,502 ordinary shares, and the first defendant held 400 ordinary shares.

11 At the date of his fathers death, the business was reasonably successful on a small scale although the company was under pressure from its bank because its overdraft had exceeded it’s level. The plaintiff relies on exhibit F to establish that at the date of his father’s death, the Company had been trading at a loss. That exhibit was an affidavit of Paul Winestock sworn 16 April 1987 in the plaintiff’s Family Court proceedings against his second wife. The evidence contained in that affidavit does not contain the source of Mr Winestock’s knowledge, however it would appear that the Company was operating on, at the very least, small margins.

12 The plaintiff became very involved in the Company following the death of his father. It would appear from the evidence that he was the driving force behind the extensive expansion of the Company’s operations. He spent many years cultivating a business relationship with the Chinese. In 1960 the main suppliers to the Company were from Japan and Taiwan. As a result of the plaintiff’s trade relationship with the Chinese market, the business expanded greatly. By 1970, almost 95% of the Company’s trade came from China. The Company sold the imports to clothes chains such as Target, Coles, Woolworth’s and Fosseys.

13 In 1977, the plaintiff’s first marriage was dissolved. Later that year, he married his second wife, a Taiwanese national. His second marriage was dissolved in 1985. After a bitter court dispute, the Family Court made property orders in 1989. He married his current wife in late December 1983.

14 The plaintiff asserted that he had a close and loving relationship with his mother up until 1984, which was not contested by the first defendant. In cross-examination, she readily admitted on a number of occasions that her brother had a very strong mother-son relationship with their mother. There was some evidence that the mother showed some disquiet that matters were never explained to her when the plaintiff would bring business documents to her house in the evening to be signed. However, there is contradictory evidence in relation to that assertion. It would appear that the deceased was a strong-headed, independent minded woman. She sought advice from solicitors and accountants from time to time, and there is some evidence from earlier proceedings that she was satisfied with the level of information that was being provided by the plaintiff to her on occasions that she was required to sign Company documents.

15 During the years 1960 to 1984, the plaintiff ensured that his mother was paid a regular income by the Company and received the use of a motor vehicle. Through the endeavours of the plaintiff, his mother was shown as an employee of the Company, although she played no active part in its day to day affairs. There is evidence to suggest that between 1960 and 1984, the deceased had been paid a salary, the total amount over that period was $235,000. She enjoyed numerous overseas and interstate trips, and she had a Grace Brothers credit card, which, at least on occasions, was paid by the Company. By the time she retired as a director of the Company in 1984, she received in addition to the annual salary mentioned above, the following amounts:

16 During the period from 1960 to 1985, the deceased also received dividends from the Company. The total amount of those dividends over that period was approximately $750,000. The plaintiff’s evidence is that in the early days when the bank demanded that dividends go unpaid because of cash flow problems, the plaintiff continued to pay dividends to his mother. The plaintiff was able to negotiate with the Company’s bank to relieve his mother from any obligations as a guarantor, and to have the mortgage in relation to her residence discharged whilst at the same time he remained a guarantor and had a mortgage over his property to secure the Company’s borrowings.

17 By the late 1970’s, the plaintiff formed a view that there was a possibility of the Government introducing quotas on imported products. He formed a view that the quotas would be based on previous years import performance. To that end, he intensified his negotiations with the Chinese, and expanded the business accordingly. By 1984, he had some concerns about the future of the business. He was concerned that the Chinese Government may withdraw some or all of the subsidies that were given to Chinese garment manufacturers. Without those subsidies, he reasoned that the product might well become more expensive for overseas purchasers such as the Company. With that in mind, he took steps to sell the Company’s quotas. He received advice in relation to the quotas, and entered into negotiations initially with Coles and later with Fosseys. He had become aware that both of those retailers were looking to increase their import quota in order to satisfy demand for goods they were retailing in Australia. I accept that the negotiations were complex, and that it was a tense time for the plaintiff. He was given advice that if the sale of the quotas were structured in a certain way, then the proceeds of the sale of the quotas would be tax free. With that in mind, he not only entered into negotiations with those retailers, but also with the Australian Tax Office and the Customs Department. An agreement was reached with Coles for the sale of the Company’s quotas in the sum of $18,830,000. Agreement was reached with Fosseys, initially for a sale price of $7,100,000 however that sum was reduced to $6,424,000 for early payment.

18 In order to ensure that the deals went through and that the Company was able to enjoy a tax free benefit, he had to implement the taxation advice that he had received to wind up the company. Initially, he approached his sister and informed her that he would pay her between $500,000 and $1,000,000. She was prepared to agree to the winding up of the Company and the payment of that sum of money, however, it was dependent on the attitude of their mother who was the major shareholder of the Company. It was foreshadowed that there would be some resistance from the deceased, as she was very proud of the Company that had been established by her husband. It was at this point that the relationship between the plaintiff and the deceased deteriorated dramatically and irrevocably.

19 The evidence is that the plaintiff informed his mother immediately after the funeral of her sister, of the offer that had been made by Coles. It would seem that at that stage, whilst the first defendant knew that the Coles offer was somewhere between $15,000,000 and $19,000,000, her mother was unaware of the amount of the offer of either Coles or Fosseys. Their mother was merely informed that whatever payments were made were not dependent on the shareholding that the three of them had in the Company, and that the mothers payment would be $2,000,000. Subsequently, the plaintiff sought to have the mother and the first defendant sign an agreement whereby the mother and the first defendant received amounts that he had discussed after the funeral, and for the balance to be paid to him. Neither the deceased, nor the first defendant, were prepared to sign the agreement, and they sought legal advice. It was at this point that the deceased formed the view that the plaintiff was trying to cheat her. Proceedings were commenced in the Equity Division of the Supreme Court to restrain the plaintiff from distributing the proceeds of the cheques received from Coles and Fosseys. The plaintiff asserts that, in order to placate his mother, a further agreement was prepared which provided for payment of $14,000,000 to the deceased, $1,000,000 to his sister, and the balance of approximately $11,000,000 to himself, however once again the first defendant and the deceased refused to sign the agreement.

20 Subsequently, payment was made in accordance with the shareholding of the three shareholders. Instead of receiving $2,000,000 the deceased received in excess of $12,000,000. From that point, the relationship was irrevocably broken. During the Family Court proceedings between the plaintiff and his second wife, both the deceased and the first defendant gave evidence on behalf of the plaintiff’s former wife. In 1989, the Family Court made orders in favour of the plaintiff’s second wife. Two weeks after judgment was delivered in those proceedings, the plaintiff commenced proceedings against his mother in the Common Law Division of the Supreme Court, seeking payment pursuant to their alleged oral agreement. Those proceedings ran for five days, and appear to have been conducted as bitterly as his family law proceedings. He signed default judgment against his mother for approximately $15,000,000. Hunt J set that judgment aside, with critical comments and observations made by his Honour in respect of the plaintiff’s conduct. Likewise, in the judgment of Finlay J, the plaintiff’s conduct is also criticised.

21 The plaintiff’s evidence is that in 1985, he attempted to reconcile with his mother, however she would neither take his telephone calls, nor see him when he attended her premises. It is his view that his mother maintained a bitter attitude towards him for the rest of her life. He relies on an affidavit sworn by Andrew Collins (his son from his second marriage) in which the deponent refers to conversations he had had with his grandmother about his father. The plaintiff has not seen Andrew since his separation from his former wife. Andrew asked his grandmother whether or not he should make contact with his father. Whilst his grandmother said that it was a matter for him, she cast his father in a bad light.

22 In 1993, Andrew attended a Family Court counselling session and was asked whether he would like to see his father. He said, in part, that his grandmother does not like his father and does not wish him to see him. Andrew deposes that he remained loyal to his grandmother and did not see his father.

Purpose of the Act

23 The purpose of the Family Provision Act, 1982 (NSW) is to permit members of the deceased’s family and certain other persons to make application to the Court to seek adequate provision from the estate of the deceased person and certain other property (notional estate). In Stuart v McDougall (unreported) NSWSC 19 November 1987, Young J said:

“It is important to state what the Family Provision Act permits a court to do, and what it does not permit a court to do. The Act recognises that Australians have freedom to leave property by their will as they wish, with one exception. The exception is that a person must perform any moral duty to make proper and adequate provision for those whom the community would expect such provision to be made before they can leave money as they wish.

24 Subsequent decisions, in particular Singer v Berghouse (No 2) (1994) 181 CLR 201, the court in obiter said that the terms of the legislation should be applied and moral duty is not found in the legislation. In Heyward v Fisher (unreported) NSWCA 26 April 1985, the court said that the purpose of the jurisdiction is not the correction of hurt feelings, of sense of wrong of the competing claimants upon the estate of the testator. The court is obliged simply to respond to the application of the eligible person who was a member of the testator’s household, and to consider whether, as claimed, the provision made by the will is inadequate for the persons proper maintenance and advancement in life.

25 Therefore, the court is constrained to act within the compass of the legislation. It cannot rewrite the will to satisfy a dissatisfied plaintiff. Nor can it make an order which divides the estate equally between the plaintiff and beneficiaries.

Size of the Estate; basis of claim

26 In Daly v Smith (unreported) NSWSC 25 May 1994, Master McLaughlin said:

“The courts have time and time again warned against any tendency, where the estate is a large one, to distribute other people’s money without adhering to the principles which must be applied in cases of claims under the Family Provision Act. It must be recognised that the power of the Court to make an order for provision is a qualification upon the basic principle of freedom of testamentary disposition of every testator. “

27 Windeyer J made the following comments, concerning the statutory predecessor of the Family Provision Act, being the Testator’s Family Maintenance and Guardianship of Infants Act 1916 (NSW):

28 In Blore v Lang (1960) 104 CLR 124 at 137,

“The jurisdiction under the Testator’s Family Maintenance and Guardianship of Infants Act is to provide for deserving persons according to their requirements, not rewards for past services. This is sometimes overlooked, and evidence concerning the past and probable future requirements of the applicant is subordinated to or submerged in evidence of past services to the testator. Allegations and denials concerning episodes in the past are then likely to become emphasised at the expense of evidence directed to the central issues of the case.”

29 In Bosch v the Perpetual Trustee Company Ltd (1938) AC 463 at 477 and 478,

“The whole circumstances have to be considered. Even in many cases where the court comes to a decision that the will is most unjust from a moral point of view, that is not enough to make the Court alter the testator’s disposition of his property. The first enquiry in every case must be, what is the need of maintenance and support; and the second, what property has the deceased left?”

30 In Cooper v Dungan (1976) 50 ALJR 539 at 542,

“An order which provides equal distribution of an estate between the applicant and those whom the testator originally intended to benefit may be justified in the case of a small estate…but in other cases it will only occasionally be that what is a proper division for the applicant happens also to accord to him equality of treatment with other beneficiaries… the ascertainment of a proper provision for a daughter is, in these circumstances, certainly not to be approached by concluding that general fairness as between the children should have led to equality of treatment; equality may be equity, but in this jurisdiction equality is not in itself an aim, and to seek to attain it may well indicate that the discretions exercisable in this statutory jurisdiction has miscarried.”

31 The Court must assess whether the absence of provision for a plaintiff resulted in an inadequacy in what, in all the circumstances, was the proper level of maintenance appropriate for the plaintiff having regard, amongst other things, to his financial position, the size and nature of the estate of deceased, totality of the relationship between the plaintiff and the deceased and the relationship between the deceased and other persons who have a legitimate claim upon her bounty.

32 In Cook v Cook (unreported) NSWCA 14 October 1997 40664/96, Handley JA said as follows:

“The Courts duty under the Family Provision Act is to make proper provision for an eligible person where the deceased has failed to do so… The Court endeavours to reflect contemporary standards in deciding what provision should have been made and ought to now be made out of an estate for the benefit of persons standing in sufficiently close relationship with the deceased. “

33 One needs to look at the circumstances surrounding the plaintiff. In Caska v Caska (1989) NSWSC 289 at [33] Bryson J said; “The circumstances in which he is no longer able to earn his living as a taxi driver, do not qualify him for provision out of the property owned by others.”

34 The plaintiff must be able to identify particular needs that have not been adequately provided for by the deceased. In Eggler v Mitchelmore (unreported) NSWCA 11 November 1992, Sheller JA said:

“ Unfortunately, in this application, as in many under the Act, a great deal of evidence has been lead about the relationship between the deceased and the appellant and the devotion and loyalty of the appellant, but very little to demonstrate any particular need of the appellant.”

35 Finally, in Moratelli v Westhoff (unreported) (2000) NSWSC 279, Master McLaughlin said, at paragraph 41:

“…It cannot be too strongly emphasised that the plaintiff must establish her own claim upon its own merits. Her claim cannot be enhanced by pointing to some perceived lack of need or (as in the instant case), some perceived affluence in the other beneficiaries. Neither can the claim of the plaintiff be established, or qualified, by resort to some asserted entitlement to equality between the plaintiff and her two half sisters.”

The Plaintiff’s Claim

36 The plaintiff’s claim is not based on any need that he has, for he has not been able to point to any need. True it is, that his evidence is that he has not worked on seventeen years and has no assets. The thrust of his claim is that because of his exertions on behalf of the Company during the years 1960 to 1984, an enormous amount of wealth was created. That wealth was ultimately enjoyed by the deceased and the plaintiff, and to a lesser extent the first defendant. The plaintiff’s position is that when he took over the Company after the death of his father, he inherited a company that was not making a profit, had cash flow problems, and had limited markets. By 1984, the position had changed dramatically. Through his entrepreneurial skills, initiative and foresight, the Company moved into new markets. It is suggested that he was one of the first Australian businessmen to go into China and openly seek to do business with the Chinese. As a result of his efforts, the Company’s business expanded rapidly. He also asserts that it was his foresight that enabled him to increase the volume of imports from China, with a view to tapping into any quota that the Australian Government may impose. Subsequently, the Australian Government did place quotas on imports and the Company was placed in an advantageous position to maximise the benefits of those quotas. He was able to negotiate a deal with Coles and Fossey’s, which reaped the Company a benefit of some $26,000,000. During this period, his mother played no role in the day to day management of the company or the strategic development of the Company. She, as the major shareholder and director, received dividends and signed documents placed before her by the plaintiff.

37 The plaintiff’s position is that he was the driving force behind the Company and but for his special talents, the Company would not have grown to the extent that it did. Therefore, in his view, his mother had a moral obligation to make provision for him in her will. Indeed, the plaintiff has maintained since late 1984 that his mother had a moral obligation notwithstanding the share structure of the Company, to give him the vast majority of the money that was received from Coles and Fosseys. This, the mother refused to do. Initially her reaction was one of surprise and uncertainty. She was given no information about the precise amount that Coles and Fossey’s were prepared to pay for the quotas. She was told that the shareholding had no bearing on the payment of the funds received from both of those companies. However she was not prepared to accept this information, given to her by her son. She challenged him through solicitors and accountants, and commenced proceedings in the Equity Division of the Supreme Court.

38 The monies received from Coles and Fosseys were eventually distributed according to their shareholding. The plaintiff has never accepted this. He attempted to recover from the deceased the difference between the $2,000,000 that he was prepared to pay her and the amount that she ultimately received. He commenced proceedings in the Common Law Division seeking the amount of $10,000,000 shortly after the judgment of Nygh J in the Family Court concerning the plaintiff’s second marriage.

39 As a period of some five years had elapsed since the distribution of the money according to shareholding, it would appear that the proceedings against his mother were commenced out of spite. He was unsuccessful in those proceedings. Prima facie, it appears that he has commenced these proceedings on the basis that he believes that he was still entitled to more than he received in 1985. The plaintiff is unable to accept that his mother had an entitlement to receive the proceeds according to her shareholdings.

40 It may be that the plaintiff was entitled to greater remuneration than he received for all his efforts, but by his own evidence he was well paid when he ran the Company, not only in terms of annual salary but also the attached package, which included the provision of a house and a number of motor vehicles. It was always open to the plaintiff, during his term of employment with the Company to negotiate greater remuneration for himself. He never took that step, continuing to accept his salary. He put an enormous amount of effort into the Company, but at the end of the day that did not give him a right to demand something that he was not legally entitled to. The plaintiff has never accepted this. There is no evidence to show that the plaintiff has needs for which some provision ought be made from his mother’s estate.

41 The plaintiff divorced his second wife in Taiwan in 1983. Shortly thereafter, in December of that year, he married his third wife. It appears that there was some irregularity in relation to the divorce, and in 1995 the Family Court of Australia set aside the earlier divorce and made orders nisi and orders absolute in respect of that marriage instanta.

42 In August of 1984, the plaintiff instituted property proceedings for a property settlement in the Family Court. There was a cross-claim filed by his former wife. The proceedings continued over the next five years. They were bitterly fought and the hearing ran for many days. The Company received money for the quotas from Coles and Fosseys in April 1985. The plaintiff gave directions to the liquidator to pay his entitlements upon liquidation by way of gift to his third wife. In my view, the gift was a convenient vehicle for the plaintiff to attempt to avoid his liabilities. Nygh J had formed that view in the property settlement case, and made appropriate orders to frustrate that intention.

43 In the Common Law proceedings against his mother they were dismissed and he was ordered to pay her costs. Those costs amounted to approximately $100,000. His own costs were met by his wife, but no costs were paid to his mother’s solicitor. Thereafter, she had him declared bankrupt. Having no assets, there was nothing that could be touched to go towards the payment of his mother’s costs.

44 It is interesting that at the time that he married his third wife in December 1983, her assets were not significant. At page 18 of the transcript, the following was put to the plaintiff:

45 Sometime after April 1985, his quota entitlements from the liquidation of the Company were gifted to her. Those entitlements amounted to approximately $11,500,000. Once the Company had been liquidated, neither the plaintiff nor his wife worked thereafter. The plaintiff’s reason for not working was that it might have had an adverse effect on the tax position as a result of the sale of the quotas to Coles and Fossey’s. This, however, was not made clear during the course of the hearing. The plaintiff said that because he had worked for thirty years in the importation of clothing, he was not qualified or experienced in any other field and therefore felt that he could not get a job. The following was put to him at p26:

46 In the financial year 1986/1987, the plaintiff earned gross interest of $140,455. This money was transferred to his wife. In 1987/1988, tax returns disclosed that he had earned interest in excess of $112,000. In the financial year 1988/1989, the taxable income of the plaintiff was $177,000. In the financial year 1989/1990 his income was $247,210. In the tax year 1990/1991, it was $18,000. Thereafter, the tax returns right through until the year ending 30 June 2001 show a nil income.

47 The plaintiff agreed that in the years leading up until 1984, he lead a lavish lifestyle and the entitlements he received at the sale of the quotas enabled him to continue that lifestyle. He was cross-examined in relation to the motor vehicles that he and his wife have had since 1985, his evidence is as follows (T34 &35):

“Question: …You mentioned cars. What cars were purchased out of the $11,600,000”
Answer: Oh, it’s very hard to remember all the cars.
Question: How many cars are we talking about?
Answer: Gail bought three or four cars at various times and traded cars. But there were at least three or four.
Question: At least three or four cars at any one time?
Answer: Yes.
Question: What makes of cars were they?
Answer: There was a Rolls Royce and a Bentley and a Ferrari.
Question: Over time, since 1985, they had been traded into other cars?
Answer: Changed, yes.
Question: Of similar type?
Answer: Yes.
Question: I think at the moment there is a 2001 BMW?
Answer: Yes.
Question: There is a Mercedes?
Answer: Yes.
Question: A 1994 Mercedes?
Answer: Yes
Question: And a 2001 Audi?
Answer: Yes.
Question: Are there other cars?
Answer: There is an old Range Rover”

48 The plaintiff agreed that the value of the cars currently owned by his wife is $433,000. There was also reference to a boat purchased in 1985. The plaintiff was asked the following (T35):

49 In relation to that property, the plaintiff said in cross-examination that from memory the Viret St property was purchased for $4,600,000. It was sold for some $8,000,000.

50 Concerning the plaintiffs lifestyle, the following was put to him (T45):

51 The plaintiff was cross-examined in relation to an American Express gold card (T48). He acknowledged that he had a card. He was then shown a statement of account, dated 15 June 1997. The account was for an amount of $18,260.80 (it became exhibit 9). It would appear that the plaintiff made extensive use of his American Express gold card. The statement was paid by cheque. The plaintiff acknowledges that the endorsement on the statement, which says “paid cheque 101678 15/7/97” is in his handwriting, and that he may have filled out the cheque, but that in all probability his wife would have signed it. However, he conceded that it was a joint account, which could be operated by both he and his wife. Both could sign cheques on the joint account. The plaintiff was then asked about the amount on the account (T49):

52 A further reference was made to a Chubb printout. Subsequently it was established that the printout was in respect of insurance in the amount of $700,000 in relation to furniture, art, antiques that had been stored at premises at Mascot. These items were awaiting transportation to one of the properties at either Broadbeach or North Tambourine.

53 As the plaintiff demonstrated a need, s 7 of the Act permits the Court to make provision for an eligible person out of the estate of a deceased person where, in the Court’s opinion, it ought, having regard to the circumstances at the time the order is made, make provision for the eligible person’s maintenance, education and advancement in life. S 9(2) precludes the Court from making an order unless it is satisfied that any provision made during the deceased’s lifetime or out of the deceased’s estate is inadequate for the proper maintenance, education and advancement in life of the eligible person. The plaintiff’s affidavits do not point to any specific need that the plaintiff has. The plaintiff bases his claim solely on the fact that he has no assets.

54 However, in determining what the plaintiff’s needs are, one needs to look not only at his own assets or lack of them but the assets of his wife. The plaintiff by way of gift in 1985 gave his wife $11,600,000. That amount has been used to maintain their lifestyle, to purchase motor vehicles, furniture, realty and enjoy overseas holidays. The gift is now valued at approximately $6,800,000 consisting of realty as well as cash. On the plaintiff’s own evidence he has never wanted for anything. His wife has made funds available when he has needed them except in one instance, namely, the payment of his mother’s costs in the Common Law proceedings. That to me seems to indicate, not that he doesn’t have any control over the monies and the assets of his wife but that the failure to pay the mother’s costs was purely a vindictive action taken by both the plaintiff and his wife against the deceased.

55 There is evidence that he is a joint signatory to a bank account which has deposited in it some $330,000. Once again, he maintains the funds are provided by his wife. That no doubt is true but the source of most of the wealth of the wife comes from the gift he made to her in 1985. He maintained that the gift was made because he loved his wife and that he still loved his wife and that they have a good relationship. In Shearer and the Public Trustee; Hawke and the Public Trustee (unreported) BC 9801169 Young J 23 March 1998 Young J said the court had to consider the likelihood of Mr Hawke having the benefit of his wife’s property. In the present proceedings, in my view, the same applies. This is particularly so in the case where the plaintiff in making an application under the Family Provision Act has divested himself of all of his assets. The history of his relationship with his wife is one that, in my opinion, would lead one to the presumption that it is a happy marriage and that he will not want for anything. Any request made by him will be met by his wife. It seems to me that this is a case in which the plaintiff fails because of the lack of material which supports his needs, the very criticism that Sheller AJ expressed in Eggler and Mitchelmore (supra.) Similarly, the views expressed in Bosch and the Perpetual Trustee Company Pty Ltd (supra).

56 From a moral point of view, the plaintiff in this case may be have been hard done by from his point of view, however that is not the basis upon which an order should be made under the provisions of the Act. As was said in Bosch (supra), the first enquiry in every case must be what is the need which should be addressed. In this case, the plaintiff clearly hasn’t demonstrated a need. The plaintiff and his wife still enjoy a high standard of living. They have significant assets. Those assets should enable them to continue to enjoy the standard of living which they have enjoyed for some time. A large part of the evidence in this case was devoted to the relationship of the plaintiff and the deceased. In my view, the nature of their relationship only becomes relevant once it is established that the plaintiff has a need. The plaintiff hasn’t established that in this case. Therefore in my opinion the plaintiff has failed.

57 The order that I make therefore is that:

1. The proceedings be dismissed and the plaintiff pay the defendant’s costs.

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Last Modified: 08/29/2002

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Collins v McGain [2002] NSWSC 740

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2

Singer v Berghouse [1994] HCA 40

CITATION:	Collins v McGain & Anor [2002] NSWSC 740 revised - 28/08/2002
FILE NUMBER(S):	SC 2403/01
HEARING DATE(S):	12/08/02,13/08/02,14/08/02
JUDGMENT DATE:	21 August 2002
PARTIES :	David John Collins - Plaintiff Beverley Ann McGain & Lloyd Mead - Defendants
JUDGMENT OF:	Acting Master Berecry

COUNSEL :	T Hodgson (Plaintiff) R Darke S.C. (Defendant)
SOLICITORS:	Harris & Compant Solicitors (Plaintiff) Lane & Lane (Defendant)
CATCHWORDS:	Purpose of the Act - divesting assets by gift - - maintenance of lavish lifestyle - spouses assets to be considered - absence of evidence supporting plaintiff's needs - long estrangement from deceased - - moral right.
LEGISLATION CITED:	Family Provision Act, 1982 (NSW) Testator's Family Maintenance and Guardianship of Infants Act 1916 (NSW)
CASES CITED:	Stuart v McDougall (unreported NSWSC 19.11.87) Singer v Berghouse (No 2) (1994) 181 CLR 201 Daly v Smith (unreported) NSWSC 25 May 1994 Blore v Lang (1960) 104 CLR 124 at 137 Bosch v the Perpetual Trustee Company Ltd (1938) AC 463 at 477 Cooper v Dungan (1976) 50 ALJR 539 at 542 Cook v Cook (unreported NSWCA 14.10.97) Caska v Caska (1989) NSWSC 289 at [33] Eggler v Mitchelmore (unreported NSWCA 11.11.92) Moratelli v Westhoff (unreported 2000 NSWSC 279 Shearer and the Public Trustee; Hawke and the Public Trustee (unreported BC 9801169 Young J 23 March 1998)
DECISION:	1.The proceedings be dismissed and the plaintiff pay the defendant's costs