Eckersley v Graeme Peter Eckersley as Executor of the Estate of the Late Gloria Dawn Eckersley (Dec)
[2016] WASC 154
•24 MAY 2016
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: ECKERSLEY -v- GRAEME PETER ECKERSLEY AS EXECUTOR OF THE ESTATE OF THE LATE GLORIA DAWN ECKERSLEY (DEC) [2016] WASC 154
CORAM: CHANEY J
HEARD: 30 NOVEMBER, 1-3 DECEMBER 2015
DELIVERED : 24 MAY 2016
FILE NO/S: CIV 2267 of 2013
MATTER :The Family Provision Act 1972
The Estate of Gloria Dawn Eckersley late of 28A Ballagin Street, Wagin in the State of Western Australia, deceased Probate No 297/2013
BETWEEN: GRAEME PETER ECKERSLEY
Plaintiff
AND
GRAEME PETER ECKERSLEY AS EXECUTOR OF THE ESTATE OF THE LATE GLORIA DAWN ECKERSLEY (DEC)
RAYLENE DAWN ECKERSLEY AS EXECUTOR OF THE ESTATE OF THE LATE GLORIA DAWN ECKERSLEY (DEC)
BRENTON JOHN AUGHEY AS EXECUTOR OF THE ESTATE OF THE LATE GLORIA DAWN ECKERSLEY (DEC)
First DefendantsRAYLENE DAWN ECKERSLEY
Second DefendantMURRAY ALLAN ECKERSLEY
Third Defendant
Catchwords:
Wills and probate - Inheritance - Family provision - Adequate provision under will - Farming business - Expectation of receipt of farm - Farming unsuccessful - Need - Turns on own facts
Legislation:
Family Provision Act 1972 (WA), s 6(1)
Result:
Provision in favour of plaintiff made
Category: B
Representation:
Counsel:
Plaintiff: Dr P R MacMillan
First Defendants : No appearance
Second Defendant : Ms W F Gillan
Third Defendant : Ms W F Gillan
Solicitors:
Plaintiff: Taylor Smart
First Defendants : No appearance
Second Defendant : Butcher Paull & Calder
Third Defendant : Butcher Paull & Calder
Case(s) referred to in judgment(s):
Andre v Perpetual Trustees WA Ltd as Executor of the Will of Barbara Helen Owen Stewart [2009] WASCA 14
Goodman v Windeyer (1980) 144 CLR 490
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
CHANEY J: The plaintiff, Mr Graeme Peter Eckersley (Peter), applies pursuant to s 6 of the Family Provision Act 1972 (WA) for further provision to be made in his favour of the estate of his late mother, Gloria Dawn Eckersley (Gloria), on the basis that his mother's will failed to make adequate provision for him for his proper maintenance, support and advancement in life.
In essence, Peter claims that, by reason of his working with his parents on the family farm, assurances he was given that the farm would eventually be his and the support that the farming business provided to his parents after their retirement, adequate provision under his mother's will would enable him to purchase a property in which he could live and continue to operate his business and to do so without debt.
Background
Since 1949 the Eckersley family has owned a farm known as 'Cheriton' in Woodanilling, which is near Wagin, in the Great Southern region of Western Australia. Norman Eckersley (Norman) and Gloria were the second generation of proprietors of Cheriton and, over the years that they farmed Cheriton, additional blocks were purchased and became part of Cheriton.
Norman and Gloria had three children, the third defendant, Murray Allan Eckersley (Murray), who was born in August 1955; Peter, who was born in July 1957; and the second defendant, Raylene Dawn Eckersley, (Raylene) who was born in November 1960.
Norman purchased the two original Cheriton titles from his parents in 1955. In the early 1960s he acquired additional lots by way of expansion of Cheriton. In August 1964, he acquired a block which is referred to as the 'northern block'. The northern block was subsequently transferred to Peter by Norman in 1976 for reasons which are not now known, but probably because of concerns as to death duties or for tax reasons.
In February 1968, a block known as 'Fred's Block' was purchased and transferred into Gloria's name. Like the other blocks purchased in the 1960s, Fred's Block was farmed as part of Cheriton.
Around 1970, Murray left Cheriton to undertake a panel beating apprenticeship in Bunbury.
Peter left school after completing year 10 in 1972 and commenced farming on a fulltime basis with his parents at Cheriton. He was then 15 years old.
In 1975, Norman and Gloria purchased a property known as 28 Ballagin Street, Wagin and some land which adjoins that property.
In 1976, Raylene left school and commenced work as a secretary in Wagin. She continued to live at Cheriton until her marriage in 1980.
In May 1977, a trust, known as the N A Eckersley Family Trust (Trust), was settled and the various lots comprising Cheriton were declared to be assets of the Trust. Norman and Gloria were the trustees of the Trust. The northern block did not become an asset of the trust, having been transferred into Peter's name in January 1976. Fred's Block remained in Gloria's name.
Norman and Gloria carried on the farming business as a partnership under the name NA and GD Eckersley. In 1977, Peter joined the partnership, which then became known as the NA and GD Eckersley and Son partnership. He was not required to pay for the capital value of his share of the partnership, but over subsequent years he did not draw down his full share of the profits with the result that his capital account in the partnership increased over time.
In February 1979, additional land, which was referred to as 'Terlichs', was purchased and became an asset of the Trust.
In 1980, Raylene married her first husband and ceased living at Cheriton. Peter married Erika Janette Hirschmann (Erika) in January 1983, and shortly afterwards Erika commenced working on Cheriton on a fulltime basis. In March 1983, Norman and Gloria ceased living on Cheriton and moved to 28 Ballagin Street. The NA and GD Eckersley and Son partnership continued to operate the farm until 1993 when a new partnership between Peter and Erika, known as GP and EJ Eckersley, was formed and took over the farming operations at Cheriton in July of that year. GP and EJ Eckersley continued to operate the farming business on Cheriton until 2007. By that time, GP and EJ Eckersley had incurred very substantial debts. The circumstances leading to that situation is a matter to which considerable attention was directed during the course of the trial, and is a matter to which I will return later in these reasons.
Around 1995, GP and EJ Eckersley commenced an earthmoving business to generate off‑farm income in addition to the farming operations on Cheriton. The partnership continued to operate the earthmoving business from Cheriton after they ceased farming Cheriton in 2007 and up until the trial of this action.
In April 2008, Terlichs was sold for $700,000. The net proceeds of sale were applied to reduce GP and EJ Eckersley's debt.
In 2008, by an informal arrangement, Cheriton was leased to some neighbouring farmers, the Brockways, who paid rent to the Trust thereafter. That arrangement continued up to trial. The rent inclusive of rates was $127,000 per annum at the time of trial. Part of the arrangement with the Brockways was that Peter and Erika could remain at the residence on Cheriton and use infrastructure, such as sheds, for the purpose of their earthmoving business.
In September 2008, Norman died. At that point, Gloria became the sole trustee, guardian and appointor of the Trust.
On 30 June 2009, Gloria executed a deed of variation of trust providing that after her death the trustees, guardians and appointors of the Trust would be Peter and Raylene jointly.
In 2012, a new home was constructed on land adjoining 28 Ballagin Street. Gloria moved into the new home, known as 28A Ballagin Street.
On 17 May 2012, Gloria executed her last will. She died on 8 August 2012. Probate of the will was granted to Peter, Raylene, and Raylene's second husband, Brenton Aughey. In August 2013, Peter commenced these proceedings.
Gloria's will
By her will, Gloria gave Raylene:
•a property located at 33B Allerton Way, Booragoon;
•28A Ballagin Street, Wagin;
•all of her Wagin Cooperative shares;
•all of her motor vehicles;
•all of her furniture;
•all of her home contents; and
•all of her jewellery.
Gloria gave the remainder of any shares she owned to Peter. She gave to Murray and Peter in equal shares Fred's Block and 28 Ballagin Street.
The will forgave any debts owed to Gloria by any of her three children or by the Trust. The residue was given in equal shares to each of the three children.
The value of the estate
The parties were agreed as to the value of Gloria's estate as at the date of death. It comprised the following assets:
MOVABLE PROPERTY
OUTSIDE WA
IN WA
Westpac Esaver Account 036153 182428 Wagin Branch
$2,258.99
Westpac Echoice Account 736175 506689 Wagin Branch
$30,409.03
1607 AMP Shares SRN #10038298208 @ $4.11 per share
$6,604.77
Toyota Camry Registration Number NGE505
$16,800.00
Boxtop Trailer Registration Number 9R1567
$100.00
Furniture and Home Contents
$5,000.00
Jewellery
$12,850.00
TOTAL
$74,022.79
IMMOVABLE PROPERTY
OUTSIDE WA
IN WA
33B Allerton Way, Booragoon being Certificate of Title Volume 1587 Folio 942
$555,000.00
28 Ballagin Street, Wagin being Certificate of Title Volume 2785 Folio 590
$240,000.00
28A Ballagin Street, Wagin being Certificate of Title Volume 2785 Folio 589
$425,000.00
Farming Land known as 'Freds Block' being Certificate of Title Volume 1259 Folio 372
$224,000.00
TOTAL
$1,444,000.00
TOTAL ASSETS IN WA
$1,518,022.79
The liabilities comprised various small amounts, including funeral expenses, which total $20,637.97. It was agreed between the parties that the net value of the estate was therefore $1,497,384.82.
On the basis of those figures, the value of Raylene's entitlement under the will was $1,018,693.35 (or approximately 68% of the estate), the value of gifts to Peter was $242,648.12 (or 16.2%) and the value of gifts to Murray was $236,043.35 (or 15.8%). Murray makes no claim for any greater provision from the estate, and neither Peter nor Raylene suggest that his share of the estate should be disturbed in any way.
By the time the matter came for trial, the value of the real estate assets of the estate had diminished so that they were:
33B Allerton Way $540,000
28 Ballagin Street $195,000
28A Ballagin Street $400,000
Fred's Block $210,000
Total$1,345,000
The parties were not agreed as to the value of movable property as at the date of trial. The most significant matter in dispute was an assertion by the plaintiff that an amount of $450 per week should be brought to account in relation to rental of 33B Allerton Way, which had apparently been occupied by Brenton Aughey since Gloria's death. That issue, and other disputes as to the value of movable property which concern relatively small amounts, were simply referred to in passing at the trial. It is not necessary to resolve those disputes for the purpose of these proceedings.
Interest in the Trust
Other than Fred's Block, the various parcels of land which comprised Cheriton, being assets of the trust, did not form part of Gloria's estate. By reason of the deed of variation executed in June 2009, upon the death of Gloria, Peter and Raylene became the trustees of the Trust. The Trust was a discretionary trust of which the children of Norman and Gloria were primary and general beneficiaries. What was to happen in relation to the land comprising Cheriton, and the income derived from it, after Gloria's death was a matter to be dealt with by Raylene and Peter in their capacities as trustees of the Trust. (I note in passing that, although Norman and Gloria were named as general beneficiaries of the Trust, they were excluded as beneficiaries for so long as they held the position of trustee, which each of them did until their death. This appears to be inconsistent with the basis upon which the family proceeded, and, in particular, inconsistent with the treatment of the rent paid by GP and EJ Eckersley from 1993 to 2007 and by the Brockways prior to Gloria's death.)
The parties were agreed that the land comprising Cheriton, excluding Fred's Block, was valued at $1.6 million. Following Gloria's death, the Trust received income by way of rental payments from the Brockways, which was used to meet expenses related to Cheriton and otherwise accumulated for the benefit of the beneficiaries.
In the course of these proceedings, Raylene and Murray proposed to Peter an open offer designed to realise Peter's interest in the Trust (open proposal), and no doubt to prevent the inevitable ongoing difficulties in the administration of the Trust by reason of the acrimonious relationship between Peter and Raylene, which has clearly manifested itself in the course of these proceedings. Shortly before trial, on 2 November 2015, after some relatively minor amendments were negotiated, the open proposal was accepted. The resulting agreement did not constitute a compromise of this action, but is relevant to the respective financial positions of the beneficiaries of the estate, a matter of particular significance to whether any further provision for Peter should be made from the will.
The open proposal was as follows:
•the Trust purchase the northern block from Peter at an agreed valuation amount of $65,000;
•the Trust pay Peter one‑third of the value of Cheriton (that is, $533,333.33) together with one‑third of the net cash funds held by the Trust less certain specified adjustments;
•Peter would secure a release of the Trust from any liability to his bank secured by mortgages over the Trust assets;
•Peter would undertake to the court to vacate Cheriton within six months of the date of the proposal, or sooner if he had secured accommodation for himself and his business;
•the parties would consent to Gloria's will being amended to the effect that Murray would receive Fred's Block and Peter would receive 28 Ballagin Street (rather than, as the will provided, each of those properties passing to Murray and Peter in equal shares);
•Raylene and Brenton Aughey would agree to cooperate in the sale of 28 Ballagin Street with the net proceeds to be paid to Peter;
•the agreement was subject to Raylene, on behalf of herself and the Trust, obtaining finance to enable the payment to Peter to be made;
•Peter would resign as a co‑trustee of the Trust and do all things necessary to finalise Trust matters so that he and his family would have no further interest in the Trust.
The net result of the agreement for distribution of Trust assets was that Peter was to receive a payment of approximately $706,450 from the Trust within 60 days of acceptance, that amount representing one‑third of the value of Cheriton, the value of the northern block and a proportion of the cash held in the Trust. In addition, he would receive 28 Ballagin Street and forego his half‑share of Fred's Block. The bank debts which were secured on Cheriton, and which Peter was obliged to discharge, amounted to approximately $406,000. As a result, the open offer resulted in Peter receiving a net payment of approximately $300,123 and eliminating his and Erika's debt to the bank. In addition, he would receive from the estate 28 Ballagin Street, which was valued at $195,000 as at the date of trial, some AMP shares worth $9,352, and the share of the residuary estate, which at the date of trial was said to be $1,621.
In order to effect the variation to Gloria's will, the parties proposed to execute a deed of family arrangement, a draft of which became exhibit 22.
The plaintiff's claim
As these proceedings developed, Peter's claim was modified to reflect his changing circumstances. Essentially, however, the plaintiff sought provision from the estate which would enable him to purchase a suitably sized property for him and his family to reside and from which they could conduct their earth moving business. That remained the essential basis of the claim at trial, although, by reason of the acceptance of the open offer and Peter's decision to purchase a property in Wagin which, with an additional structure, would meet his needs, he was able to quantify his claim at $298,753.36.
The property which, at the time of trial, Peter had contracted to purchase is located at 97 Khedive Street, Wagin. The purchase price of the property was $650,000. The Khedive Street property comprises 6.2 acres or 2.51 ha of land. It has a five bedroom, two bathroom house of brick and iron construction built in the 1980s and a fibreglass swimming pool. The property had previously been used as a base for the original owner's earthmoving business. It has a large workshop and machinery shed in place, with a good gravel driveway. It has a combined shed and workshop, the dimensions of which are 10 m x 15 m and 20 m x 12 m respectively. It has a third oil storage lean‑to shed of approximately 8 m x 3 m, a truck pit suitable for heavy duty maintenance, three‑phase power and plumbing.
Those structures compared with the 26 m x 17 m machinery shed and 16 m x 15 m workshop currently utilised by Mr Eckersley on Cheriton. Peter said that he would need another 150 sqm of machinery shed to enable him to store all of his machines as he presently does on Cheriton. The shedding, he said, was important in order to protect machines from the weather, particularly when they are partially dissembled awaiting repairs.
On the basis of the Khedive Street property, Peter quantified his claim as follows:
Purchase of 97 Khedive Street, Wagin $650,000
Duty on purchase $24,890
Construction of 26 m x 17 m x 6 m machinery shed
(including GST) $57,262.70
Total$732,152.70
The plaintiff's net claim was based on deducting from that amount the proceeds from the acceptance of the open offer together with his entitlement under the estate and his other net assets, except those necessary for his earthmoving business.
Peter gave evidence that, as at 30 September 2015, he had assets totalling $303,483.08. Those assets comprised mostly plant and equipment used in the earthmoving business and some farm equipment as well as the northern block, which has a value of $65,000.
Against that background, the plaintiff qualified his net claim as follows:
Assets $303,483.08
Net receipt from open offer $300,123.23
Receipt from estate $205,973.70
Less assets utilised in earthmoving business -$215,500.00
Less assets to be given up pursuant to open offer -$87,800.00
Less non-bank loan facilities -$72,880.67
Total $433,399.34
The difference between what the plaintiff claims is his need of $732,152.70, and his net asset position of $433,399.34, is $298,753.36. It is that figure which the plaintiff contends represents a further provision from the estate which is necessary to adequately provide for his proper maintenance, support and advancement.
The precise basis upon which the value of the assets utilised in the earthmoving business is calculated for the purpose of the assessment of the plaintiff's net assets is not entirely clear. I assume that it represents the total value of his assets of $303,483.08 less the $65,000 (being the value of the northern block) and less certain farm machinery which is not necessary for use in the earthmoving business. That calculation was not a matter specifically addressed during the course of the trial. Nor is it clear how the assets to be given up pursuant to the open offer are calculated. Presumably, it includes the $65,000 for the northern block, the value of which was included in the total assets of $303,483.08 but also comprised a component of the receipt from the open offer. Although, by giving up 50% of Fred's Block (valued at $210,000) in exchange for 50% of 28A Ballagin Street (valued at $195,000) the plaintiff might be said to have given up $7,500 of value. That $7,500 is not included in the assets upon which the plaintiff's calculation is based, and therefore cannot sensibly be deducted for the purposes of the plaintiff's final claim. The deduction of $87,800 as 'assets given up' appears to be excessive, and, on the rationale of the plaintiff's approach, the quantum of his claim should be reduced by the amount of $22,800, reflecting the difference between the value of the northern block which was included in the assets of $303,483.08 and the amount stipulated in the plaintiff's calculation of $87,800.
As to the non‑bank liabilities, I note that in his affidavit of 22 April 2014 at [87], the plaintiff identified his liabilities as at the beginning of that month as being:
Bankwest overdraft $317,675.90
Bankwest loan $23,772.40
Bankwest Visa $5,195.33
Bankwest Mastercards $16,837.71
Loans from his daughter, Bonnie $10,000.00
Total$373,481.34
On 16 October 2015, Peter swore a further affidavit setting out his liabilities as at 30 September 2015. The total indebtedness in relation to the four loan accounts with Bankwest had increased to the total of $406,326.76, which is the amount required to be paid out as part of the open offer. The loan from Bonnie Eckersley had been reduced from $10,000 to $5,000, but additional loans to other friends or relatives totalling $46,000 were in existence. Peter gave evidence, during cross‑examination, that those loans had been utilised to fund this litigation and form part of the approximately $300,000 of fees and disbursements which had been incurred by him in the prosecution of this action. The total non‑bank liabilities disclosed in the affidavit of 16 October 2015 was therefore $51,000. The evidentiary basis for the calculation of non‑bank liabilities of $72,880 used in the formulation of the plaintiff's claim is therefore unclear.
If the apparent excess of deductions from the plaintiff's asset position after implementation of the open offer is applied, the plaintiff's claim for additional provision from the estate in order to achieve the objective which underlies the claim would appear to be overstated by approximately $44,600, so that the true claim is approximately $254,000. That amount includes $51,000 in non‑bank loans that were used to meet the costs of these proceedings. It is deeply regrettable to note in passing that the plaintiff gave evidence that he had spent in the vicinity of $300,000 in the prosecution of this action, and, in her evidence, the second defendant estimated that she had spent $353,000 defending the claim.
The applicable principles
Section 6(1) of the Family Provision Act 1972 (WA) provides:
(1)If any person (in this Act called the deceased) dies, then, if the Court is of the opinion that the disposition of the deceased's estate effected by his will, or the law relating to intestacy, or the combination of his will and that law, is not such as to make adequate provision from his estate for the proper maintenance, support, education or advancement in life of any of the persons mentioned in section 7 as being persons by whom or on whose behalf application may be made under this Act, the Court may, at its discretion, on application made by or on behalf of any such person, order that such provision as the Court thinks fit is made out of the estate of the deceased for that purpose.
Peter falls within the class of persons referred to in s 7. The approach to be taken in assessing a claim under s 6 of the Family Provision Act is a two‑stage process. That process was described by Mason CJ, Deane and McHugh JJ in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 as follows:
It is clear that, under these provisions, the court is required to carry out a two‑stage process. The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant. The first stage has been described as the 'jurisdictional question' (208 ‑ 209).
Although Singer v Berghouse was concerned with New South Wales legislation, those observations are applicable to the structure of s 6(1) of the Family Provision Act: Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 [22], [56], [112].
The determination of the jurisdictional question requires an assessment of whether the provision made in the will was inadequate for what, in all the circumstances, was the proper level of maintenance, support, education or advancement in life appropriate for the applicant having regard 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 her bounty: Singer v Berghouse (209 - 210); Vigolo v Bostin [75].
As Callinan and Heydon JJ said in Vigolo v Bostin, the questions to be answered by the court do not necessarily always divide neatly into two. They continued:
Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means, and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors [122].
The jurisdictional question is one of fact, notwithstanding that it involves the exercise of value judgments: Singer v Berghouse (210). The words 'adequate' and 'proper' are always relative, and there are no fixed standards: Goodman v Windeyer (1980) 144 CLR 490, 502 (Gibbs J).
The correct approach to the first stage was helpfully analysed by Steytler P, with whom Pullin and Buss JJA agreed, in Andre v Perpetual Trustees WA Ltd as Executor of the Will of Barbara Helen Owen Stewart [2009] WASCA 14, an analysis which I gratefully adopt. His Honour said [49] ‑ [55]:
Questions arising at the first stage
When dealing with the first stage, the court is required to make an evaluative assessment whether the testatrix has made 'adequate provision from [her] estate for the proper maintenance, support, education and advancement in life' of the applicant: s 6(1) of the Act. When doing so, the court 'must place itself in the position of the [testatrix] and consider what [she] ought to have done in all the circumstances of the case, treating the [testatrix] for that purpose as a wise and just, rather than a fond and foolish … [person]': Bosch v Perpetual Trustee Co Ltd [1938] AC 463, 478 - 479 (Lord Romer). The question whether the appellant was left without 'adequate provision' must be answered at the date of death. In White v Barron (1980) 144 CLR 431, Mason J said (441):
'The question whether the testator left the appellant widow "without adequate provision" for her "proper maintenance" was to be determined by the primary judge by reference to circumstances as they existed at the date of the testator's death. Once this question was answered in the affirmative, it was for the court to exercise its discretion to order adequate provision for proper maintenance for the appellant by reference to circumstances as they existed at the date of the order. See generally Coates v National Trustees Executors and Agency Co Ltd (1956) 59 CLR 494. There Dixon CJ observed that in determining the initial question of jurisdiction the Court must look to what is "necessary or appropriate prospectively from that time", that is, the date of death, including events which are contingent as well as those which are certain or likely. Advantage may be taken of hindsight so long as the subsequent occurrences fall within "the range of reasonable foresight" ((1956) 95 CLR at 508).
In answering the first question, the court should not proceed upon the assumption that 'the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court': Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9, 19 (Dixon J). There must have been a breach by the testator of moral duty (in the sense in which that expression is used by the majority in Vigolo) in not making adequate provision for the proper maintenance, support, education or advancement of the applicant in the sense that the testatrix failed to make a 'testamentary provision … which a just and wise [person] would have thought it [her] moral duty to make in the interests of [her child] … had [she] been fully aware of the relevant circumstances': Re Allen, Deceased [1922] NZLR 218, 220 (Salmond J); Hills [145] (Muir JA). This formula follows from the statutory language which, as Gleeson CJ pointed out in Vigolo [5] - [6], requires an assessment to be made by reference to criteria that are expressed in the most general terms. He said that 'fitness' and 'propriety' are 'value-laden concepts' and that these values 'must have a source external to the decision-maker'. He pointed out that '[m]orality is the source of many of the values that are expressed in the common law, in statutes and in discretionary judicial decision-making' (see also Callinan & Heydon JJ [113] - [121] and cf Gummow & Hayne JJ [64] - [73]).
'Adequate' and 'proper'
In Vigolo [114] Callinan and Heydon JJ said, of the use of the word 'proper', that:
'It implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all of the relevant surrounding circumstances … The use of the word "proper" means that attention may be given, in deciding whether adequate provision has been made, to such matters as what used to be called the "station in life" of the parties and the expectations to which that has given rise, in other words reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future.'
As Buss JA has pointed out in Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127 [72], the word 'proper' connotes something different from the word 'adequate'. He went on to say [73]:
'For example, a small sum may be sufficient for the "adequate" maintenance, etc, of the claimant but, having regard to all the circumstances, including the size of the deceased's estate and the lifestyle to which the claimant had become accustomed during the deceased's lifetime, may be wholly insufficient for his or her "proper" maintenance. By contrast, a sum may be quite insufficient for the "adequate" maintenance, etc, of the claimant, and nevertheless be sufficient for his or her maintenance, etc, on a scale that is "proper" in all the circumstances. See Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 476; Worladge v Doddridge (1957) 97 CLR 1 per Kitto J at 14 - 15; White per Wilson J at 457.'
Then, after mentioning that, in making the determination of adequacy, the court is involved not only in scrutiny of the requirements of the claimant that were reasonably foreseeable by the deceased, but also an examination of the totality of the relationship between the claimant and the deceased, Buss JA went on to say [77]:
'"Adequate" is concerned with the quantum, whereas "proper" prescribes the standard, of maintenance, etc. The propriety of the provision, if any, for the claimant is to be assessed by reference to all the circumstances including contemporary accepted community standards. See Bosch at 476 - 479; Worladge per Williams and Fullagar JJ at 11, per Kitto J at 15 - 18; White per Stephen J at 440, per Mason J at 441 - 445, per Wilson J at 457; Goodman per Gibbs J at 497, 502; Singer per Mason CJ, Deane and McHugh JJ at 211, per Gaudron J at 227.'
(See also Bondelmonte (308) (Malcolm CJ).)
McLure JA in Devereaux-Warnes said of the use of the word 'adequate' in this context [9]:
'Ordinarily, what is adequate financial provision is assessed by reference to, inter alia, the size of the estate, the need and moral claim of the applicant(s) and the need and moral claim of other persons who have a legitimate claim upon the bounty of the testator. I should add for completeness that "need" is not determined by reference only to minimum standards of subsistence and that I use the concept of "moral claim" in the way approved by the majority in Vigolo v Bostin (2005) 221 CLR 191.'
'Need'
There is no doubt that the question whether the applicant has a 'need' is a relevant factor at the first stage of the enquiry. It is a factor in determining whether 'adequate' provision has been made for the 'proper' maintenance etc of the applicant in all of the circumstances: Collins v McGain [2003] NSWCA 190 [42] (Tobias JA). In Devereaux-Warnes [81] - [85] Buss JA said, in this respect:
'The term "need" has been used to refer to the claimant's inability to satisfy his or her financial requirements from his or her own resources. See Singer per Gaudron J at 227.
"Need" has also been used in the context of a value judgment or conclusion, namely, that the claimant is "in need" of maintenance, etc, because inadequate provision has been made for his or her proper maintenance, etc. See Gorton v Parks (1989) 17 NSWLR 1 per Bryson J at 10 - 11.
The determination of whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, etc, of the claimant will always, as a practical matter, involve an evaluation of the provision, if any, made for the claimant on the one hand, and the claimant's "needs" that cannot be met from his or her own resources on the other. See Hunter per Kirby P at 575.
Although the existence or absence of "needs" which the claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for his or her proper maintenance, etc. See Singer per Gaudron J at 227. Compare Gorton per Bryson J at 6 - 11; Collicoat v McMillan [1999] 3 VR 803 per Ormiston J at 816 [38], 820 [47].
Often "need", in the sense of the claimant's inability to satisfy his or her financial requirements from his or her own resources, and a "moral claim", in the sense of a claim arising from the totality of the relationship between the claimant and the deceased (for example, sacrifices made or services given by the claimant to or for the benefit of the deceased or contributions by the claimant to building up the deceased's estate) and contemporary accepted community standards, will co-exist. Sometimes there may be a strong "moral claim" but no "need". Sometimes the "moral claim" may be slight but the "need" dire. Whether the court should intervene or not will depend on all the circumstances of the case; in particular, whether the value judgment made upon an examination of those circumstances is that the claimant has been left without "adequate" provision for his or her "proper" maintenance etc. See Re Sinnott [1948] VLR 279 per Fullagar J at 281.'
'Maintenance', 'support' and 'advancement'
In Vigolo [115] Callinan and Heydon JJ said, of the words 'maintenance', 'support' and 'advancement':
'"Maintenance" may imply a continuity of a pre-existing state of affairs, or provision over and above a mere sufficiency of means upon which to live. "Support" similarly may imply provision beyond bare need. The use of the two terms serves to amplify the powers conferred upon the court. And, furthermore, provision to secure or promote "advancement" would ordinarily be provision beyond the necessities of life. It is not difficult to conceive of a case in which it appears that sufficient provision for support and maintenance has been made, but that in the circumstances, say, of a promise or an expectation reasonably held, further provision would be proper to enable a potential beneficiary to improve his or her prospects in life, or to undertake further education.'
Peter's involvement in Cheriton
Much of the trial was focused on the history of Peter's involvement in farming on Cheriton. Peter's position was that his work on Cheriton initially assisted his parents in their farming operations, and subsequently served to maintain Cheriton and provide his parents with a source of income following their retirement from active farming. Those efforts were, he contends, undertaken in a context where he had an expectation, encouraged by things said to him by his father with the acquiescence of his mother, that Cheriton would eventually be his. Although, by the time of Gloria's death, Peter and Erika were no longer conducting farming operations, Cheriton provided their home as well as land and buildings from which to carry on their earthmoving business. While Peter accepted that upon his mother's death he would neither acquire Cheriton nor have exclusive control of the Trust which owned Cheriton, his contention is that he ought to have been left in a position being debt‑free and owning land and buildings that would provide a residence as well as sufficient area and infrastructure to carry on his business.
Raylene's position was that Peter's claim failed to recognise conduct by Peter and his poor management of the farming business, which she contended resulted in excessive and unnecessary debt being incurred using the security of Cheriton. She contended that his claim failed to recognise the benefits which Peter had enjoyed in their parents' lifetime, including the income drawn from the family farm, the acquisition of his business assets and the reduction of his debt by the sale of Terlichs. She also contended that the purchase of the Khedive Street property was unnecessary to achieve the objective underlying the application, which could have been achieved by the purchase of a smaller parcel of land on which to carry on the business, and the use of 28 Ballagin Street as a residence.
In order to deal with those issues, it is necessary to review Peter's history on Cheriton.
Peter said that from the early 1980s his father frequently made comments to him to the effect that the farm would eventually be his. He referred to conversations about improvements to the farm that would 'see you [that is, Peter] out'. I am satisfied that conversations to that effect took place. The proposition that Peter would continue to run the farm is consistent with what actually occurred from 1993 onwards, and with his earlier introduction to the partnership with his parents. I am satisfied that that understanding with his parents encouraged Peter to remain on the farm and to undertake work and expenditure on the farm. Having said that, as I discuss below, Norman and Gloria approached the handover of the farming business to Peter generally on a commercial basis.
Much of the time spent at trial, and much of the evidence adduced at trial, was directed to examination of Peter's conduct whilst on Cheriton and in particular during the period from 1993 to 2008. Peter was cross‑examined as to the need to purchase particular items of plant or equipment at various times during that period. Attention was given to questions of farm management, and whether expenditure on things like fertiliser was appropriate at particular times. Criticisms of matters of that nature were often based on hindsight. So far as they emanated from Raylene, they were undoubtedly coloured by her obvious animosity towards Peter. I do not consider it necessary to traverse that evidence in detail. In general terms, I accept that Peter took appropriate advice from a farming consultant in relation to questions of farm management, and purchased plant and equipment as and when it was considered necessary for his farming operations or his earthmoving business. Whether or not, in hindsight, the decisions which were made proved advantageous or disadvantageous does not, in my view, bear upon the outcome of this case. I am satisfied that Peter did not conduct his farming operations, or indeed his earthmoving business, in a wasteful or profligate way. Undoubtedly the losses experienced in some years resulted, in significant part at least, from poor seasons rather than mismanagement. It is necessary however, in order to assess the strength of Peter's legitimate claims on the estate, to examine Peter's activities on Cheriton and the consequences of those activities on both his financial position and the financial position of his parents.
Under the heading 'Background' above, I have recounted a chronology of significant events in the history of Cheriton. It is not necessary to repeat those events. From the time when Norman and Gloria left Cheriton and moved to 28 Ballagin Street until 1993, Peter and Erika lived in the homestead at Cheriton. Norman would travel from Wagin every day to work on the farm. Peter and Erika received a single salary between them of $220 a week from the NA and GD Eckersley partnership which, over time, increased to $250 per week net. They were able to use fuel and sheep meat from the farming operation. Erika and Peter worked on the farm fulltime during that period.
In early 1992, Peter purchased a parcel of land known as 'Bob's Block', which was adjacent to Terlichs. The purchase price was around $90,000. The deposit on Bob's Block was paid by the NA and GD Eckersley and Son partnership, but was subsequently repaid to that partnership by Peter.
It was shortly after that that the GP and EJ Eckersley partnership was formed. Peter and Erika obtained an overdraft for $350,000 to be used for the running expenses of Cheriton. Norman and Gloria were guarantors of that overdraft, which was secured by a mortgage over various Cheriton titles.
On 1 July 1993, Peter and Erika took a lease of Cheriton from Norman and Gloria as trustees of the Trust for a term of two years. The total rent payable over the term was $75,000, which was payable in six‑monthly instalments in July and January of each year. The first two instalments were for $17,500 each, and the last two instalments were for $20,000 each.
On 29 June 1995, Norman and Gloria on one part and Peter and Erika on the other executed a memorandum (equity memorandum) which was designed to pay out Norman and Gloria's equity in the NA and GD Eckersley and Son partnership. Norman and Gloria's equity in the partnership amounted to $283,480. The financial statement attached to the equity memorandum provided that various assets of the partnership to a total value of $178,986 would be retained by Norman and Gloria, and that the balance of their equity, being $104,494, would be paid by GP and EJ Eckersley in 10 equal consecutive annual instalments of $10,450 free of interest.
Those payments were subsequently made by GP and EJ Eckersley in accordance with the terms of the equity memorandum. In addition, from 1995 through until July 2006, rental payments totalling $50,000 per year were paid by GP and EJ Eckersley to Norman and Gloria. It would appear that Norman and Gloria used those funds for their living expenses. Save to the extent that a portion of the rental payments was attributed to Fred's Block, the payments for lease of the land was properly payable to Norman and Gloria in their capacity as trustees of the Trust, to be dealt with as Trust property. Given that Norman and Gloria were not beneficiaries under the Trust, they would not, except to the extent that the rent was referrable to Fred's Block (which was owned by Gloria), have been beneficially entitled to the rent payments. The profit and loss statements for the Trust from 1995 to 2000 show rent receipts of $50,000 in each year. The subsequent profit and loss statements up until 2006 appear to account only for one half of the rent paid by GP and EJ Eckersley. It may be that the balance of rent paid was treated as personal income of Gloria from the rental on Fred's Block, but the evidence sheds no light on that question. Putting that unclear issue to one side, the clear intent of the lease arrangements was to provide income to Norman and Gloria in their retirement derived from Cheriton which, for all practical purposes, they treated as theirs to deal with. The total amount paid by way of rental payments and payments under the equity memorandum was $744,950 over the period 1993 to 2007.
Those arrangements reflected what I consider was a commercial approach by Norman and Gloria to the assumption of farming operations on Cheriton by GP and EJ Eckersley. Raylene suggested that, by comparison to the amount paid by the Brockways when they leased Cheriton, the rent paid by GP and EJ Eckersley was below a market rate and represented a benefit to Peter while he farmed the land. There was no expert evidence adduced by either party as to market rates for a lease of Cheriton. The rental of $50,000 per annum was struck in 1995 some 13 years before the Brockways' lease was commenced. It is apparent that there were several consecutive bad seasons for Cheriton between 2000 and 2007, and the farming operation was unprofitable in many of those years. It cannot be said that, in those circumstances, a higher market rate for a lease of land existed.
There is no basis on the evidence before me to conclude that the rental paid by GP and EJ Eckersley was uncommercial. The payments under the equity memorandum reflected the realisation by Norman and Gloria of their capital entitlements in the NA and GD Eckersley and Son partnership. That was an appropriate commercial arrangement to facilitate the assumption by GP and EJ Eckersley of the assets of the farming business. While it is true that the equity payment was interest‑free, and in that sense was beneficial to GP and EJ Eckersley, from Norman and Gloria's perspective, receipt of interest on the capital payments would have been taxable. In the context of the financial commitments being undertaken by the new partnership, the decision of the parties to effect the payout of Norman and Gloria's equity on an interest‑free basis appears to be a reasonable commercial decision.
Mr Terrence Posma is a chartered accountant who undertook an analysis of the financial performance of the GP and EJ Eckersley partnership. He gave evidence that, between 1993 and October 2007, the debts of GP and EJ Eckersley rose steadily and peaked at $1,434,439 in October 2007. In order to reduce that debt level, Terlichs was sold in 2008, and the net proceeds of approximately $670,000 were used to pay down that debt. In April 2009, Bob's Block was sold by Peter for $450,000 and the net proceeds of sale, being approximately $435,475, were applied in further reduction of the debt of the partnership. I note in passing that, while the accounts of GP and EJ Eckersley reflect reductions in bank debt which correspond with the amounts of those sales, the reductions as shown in the accounts do not coincide with the dates of settlement of those sales. No explanation for those disparities emerged at trial. There was not, however, any other source of funds that could have been used to effect the reductions in debt. I am satisfied that the proceeds of sale were used, in each case, to reduce the partnership's bank debt.
As already noted, by this time Cheriton had been leased to the Brockways, and Peter and Erika had ceased farming but continued to operate their earthmoving business from Cheriton.
Mr Ian MacMullen was the accountant for Norman and Gloria for about 40 years, having first commenced working for them in the mid‑1970s. He advised Norman and Gloria in relation to their financial affairs, including their succession plans, from time to time throughout that period. It was he who advised in relation to the equity memorandum. In a handwritten note prepared around that time, Mr MacMullen recorded a meeting with Norman and Gloria where he recorded that their wills state that Terlichs was to be left to Murray and Raylene, with Peter being given a first option at market value if they chose to sell Terlichs. That proposal was consistent with a will subsequently made by Norman in September 1998. By that will, Norman left all of his property to Gloria should she survive him. Failing Gloria's survival, Norman's will gave the property at 28 Ballagin Street to Raylene (which at that stage presumably included the land that subsequently became 28A Ballagin Street). The will also purported to appoint Peter as the trustee, guardian and appointor of the Trust on the proviso that Peter obtain a valuation of Terlichs and pay the amount of that valuation out of the Trust to Raylene and Murray by 10 equal annual consecutive instalments. The residue of the estate was to be divided equally between Raylene and Murray. Putting aside the doubt that the conditional appointment of Peter as trustee by will was effective, Norman's will supports, at least in part, Peter's evidence that his father assured him that eventually he would receive the farm. It supports it only in part because, in effect, that part of the farm which comprised Terlichs was left to Raylene and Murray, albeit with an option for Peter to purchase it.
Mr MacMullen gave evidence that, after 2000, Gloria told him that from time to time she and Norman were concerned and upset about the level of debt that they had been asked to guarantee. He also gave evidence that, after Terlichs had been sold, Gloria told him on a number of occasions that she regarded the proceeds of Terlichs as being Peter's share of the farming property.
Against that background, the following propositions emerge:
•Norman and Gloria, while they contemplated that Peter would continue to farm Cheriton after they had ceased farming, took an essentially commercial approach to Peter's involvement in Cheriton. Apart from the gift of the northern block, the benefits which Peter received from working within the NA and GD Eckersley and Son partnership resulted from Peter's fulltime work on the farm. Although he made no initial capital contribution on becoming a partner, he progressively contributed to the capital of the partnership through undrawn profits whilst receiving a modest income.
•After GP and EJ Eckersley was formed and took over farming Cheriton, it effectively assumed financial responsibility for the ongoing business. It had the benefit of the use of Cheriton, but paid rent in exchange for that benefit.
•Over time the farming business proved to be unprofitable. GP and EJ Eckersley was able to carry on the business by virtue of guarantees provided by Norman and Gloria and the availability of the Trust's lands as security for their borrowings. In that sense, Peter and Erika enjoyed a benefit which they would not have enjoyed had they been farming on land leased from an independent third party. On the other hand, it is apparent that Norman and Gloria were supportive of Peter continuing to live on and farm Cheriton notwithstanding the increasing financial challenges encountered by GP and EJ Eckersley.
•It was no doubt contemplated throughout the 1980s and 1990s that Peter would continue to farm Cheriton after Norman and Gloria had died, and Norman's will in 1998 reflected that general objective. Norman's will reflects, however, that, while Peter would be enabled to carry on farming, Raylene and Murray would also benefit from the estate. Furthermore, the land comprising Cheriton having, for the most part, been transferred to the Trust, the ultimate beneficial ownership of Cheriton would not, of course, have passed to Peter. The extent of any succession plan that can be gleaned from the structures in place by 1998 is that Peter could continue to live on and farm Cheriton, but the land would remain in the Trust with Peter in control of the Trust.
•The succession plan through to the late 1990s was made in a context where Cheriton had historically been farmed profitably and with minimal debt. Circumstances changed significantly when the farming operation became less profitable and debt levels increased, and by 2007 a continuation of the farming operation by Peter and Erika became unviable. That change altered a fundamental premise of the succession plan.
•Primary responsibility for the debt in excess of $1.4 million lay with GP and EJ Eckersley. The sale of Terlichs relieved them of a substantial portion of their debt. The succession plan reflected in Norman's will of 1998 could not then have been implemented, and the underlying objective of enabling Peter's continued farming was no longer realistic.
By the time Gloria made her last will in May 2012, the notion of Peter continuing to farm Cheriton had long since been abandoned. Cheriton continued to provide, however, a home for Peter and Erika and facilities for the carrying on of Peter's earthmoving business. Although the indications given by Norman and Gloria in the 1980s and 1990s as to the succession plan for the farm became unsustainable in the very significantly changed circumstances, Cheriton remained Peter's home and place of business. Peter was, in effect, largely dependent upon Cheriton in that sense, a position that flowed from the course he had followed for over more than 30 years.
It is necessary to turn to the matters referred to in Singer v Berghouse and Andre v Perpetual Trustees WA Ltd.
The applicant's financial position
In assessing Peter's financial position as at the date of the will, consideration must be given to his interest in the Trust. His interest as a beneficiary was an interest in the due administration of the Trust and not an interest in the Trust assets. He was, however, one of the two trustees of the Trust, along with Raylene. It might reasonably be contended that Gloria and the three primary beneficiaries, Murray, Peter and Raylene, had the expectation, at the time of and after Gloria's death, that the primary beneficiaries would benefit from the Trust equally, at least in the longer term.
It was accepted by the parties that, in substance, the open offer, apart from the relatively neutral adjustment of the interests of Peter and Murray under the will in Fred's Block and 28 Ballagin Street, reflected a realisation of what would amount to Peter's interest in the Trust and the northern block if the assets of the Trust were realised and distributed equally between the primary beneficiaries. Were the Trust to be wound up and the proceeds divided between the three primary beneficiaries, Peter's interest would have realised $533,000 plus any accumulated funds held by the Trust. Alternatively, if Cheriton continued to be held by the Trust, it was capable of generating an income of $127,000 per annum under the arrangements with the Brockways, although the likelihood of that arrangement continuing cannot be ascertained. The Trust therefore reflected a potential source of income to the beneficiaries if the land were retained.
In his affidavit of 27 November 2014, Peter valued his assets as at the date of his mother's death at $451,292.41. That included a value of $65,000 for the northern block. He had liabilities of $465,397.86 on various credit facilities with Bankwest. He estimated that his weekly expenditure between July 2011 and August 2012 exceeded his weekly income by approximately $325, although the expenses included $1,150.32 in loan repayments.
Of the $451,292.41 of assets as at the date of Gloria's death, Peter said that the plant and equipment used in the earthmoving business had a value (as at November 2014 when he swore his affidavit) of $205,000. Those assets are necessary in order to produce the income upon which Peter and Erika are reliant. It would appear that, as at the date of Gloria's death, Peter had assets of approximately $246,000 which were surplus to his requirements for his earthmoving business.
On the basis of those figures, Peter's position as at the date of death if the will was undisturbed was that he would receive $242,648 from the estate, and he had assets of approximately $246,000 over and above those needed for his earthmoving business. In addition, he had his interest in the Trust, but there was uncertainty as to how that interest might assist his financial position. Against that, he had debts to the bank of approximately $465,000. It follows that, putting the Trust to one side, his non‑business assets and his interest under the will would have enabled him to pay off his debts to the bank and leave him with the plant and equipment necessary to carry on his business valued at $205,000. He was reliant upon continued occupation of Cheriton to provide him with a home and business premises. That continued operation was subject to the continued indulgence of the Brockways and future decisions by the trustees of the Trust, and was thus insecure.
Size and nature of the estate
As noted above, the net value of the estate as at the date of death was $1,497,384.82. The vast bulk of the estate comprised the four pieces of land. One of those, Fred's Block, comprised part of the lands farmed as Cheriton. Although Brenton Aughey has apparently been occupying 33B Allerton Way since Gloria's death, there does not appear to be any particular attachment to or interest in the properties of any of the beneficiaries which would prevent the properties being viewed simply as assets capable of realisation for value.
The estate is of a size which would accommodate the provision sought by the plaintiff without inflicting hardship on the remaining beneficiaries.
The relationship between Peter and Gloria
Peter acknowledged that from time to time he and his mother were in conflict over financial matters (ts 156). He stopped short of agreeing with the proposition that the conflicts could be described as arguments over financial matters. Peter accepted that Raylene and Gloria were very close, and that their mother and daughter relationship was closer than the relationship which he had with his mother. He said however that he kept in regular contact with Gloria in the sense of contact every day if he was near a telephone or in town.
I accept Mr MacMullen's evidence that Gloria expressed concern to him from time to time as to the level of debt which had been incurred by GP and EJ Eckersley for which she was liable as guarantor and which was secured against Cheriton. It is likely that that led to tensions between Gloria and Peter and gave rise to conflict between them from time to time. Apart from that, on the other hand, I accept Peter's evidence that he was supportive of his mother, and assisted her when assistance was required, such as by carrying out earthworks for the construction of 28A Ballagin Street and generally assisting her with tasks around her home. Notwithstanding the tensions over financial matters, there is no reason to conclude that Peter enjoyed anything other than an appropriate and good mother and son relationship with Gloria.
I accept, however, that Gloria considered that the sale of Terlichs was a relevant factor in her approach to dispositions under her will. I consider that she was entitled to, and did, bring that to account in settling on the terms of her will.
Relationship between Gloria and other beneficiaries
It was not in dispute that Raylene enjoyed a close relationship with her mother and, living in the same town, saw her on a daily basis. Murray also said that, after his father's death, he was in very frequent contact by telephone with his mother.
Raylene did not give evidence as to her financial position as at the date of Gloria's death but, in an affidavit sworn on 18 December 2014, which she confirmed at trial as being true, she described her asset position as being:
•an unencumbered interest owner of the house in which she lives at 37 Johnston Street, Wagin which she estimated to be valued at $350,000;
•a 779 sqm residential block at Bremer Bay estimated to be worth approximately $220,000, encumbered by a mortgage securing $236,732;
•a 4.35 ha block at Bremer Bay, which was also security for the mortgage on the other residential block at Bremer Bay, and which was at that time on the market for sale at a price of $220,000;
•superannuation of approximately $62,500;
•a motor vehicle and other personal property valued at approximately $27,000;
•credit card debts of approximately $18,000; and
•legal and associated expenses of approximately $50,000.
Disregarding the legal expenses, which were undoubtedly incurred in relation to these proceedings and therefore after the date of Gloria's death, Raylene's assets as at the date of Gloria's death had a net value of approximately $610,000. Raylene said that, by the time of trial, the larger Bremer Bay land had been sold and the proceeds had been used to pay legal fees, some living expenses and her daughter's wedding.
As noted above, Raylene's entitlement under the will amounted to slightly in excess of $1 million, and, like Peter, she was one of the three primary beneficiaries under the Trust, and was a trustee of the Trust.
Murray's participation in these proceedings has been minimal, although he gave evidence of owning his own home in a suburb of Bunbury worth approximately $250,000 and earning a modest income through casual part‑time work. Given that no party seeks to disturb Murray's interest under the will, and that Murray seeks no further provision under the will, Murray's financial position can be put to one side.
Need
Having regard to consideration of need, in the sense of a claimant's inability to satisfy his or her financial requirements from his or her own resources, it can fairly be said that Peter has demonstrated a need for provision from the estate as at the date of Gloria's death. At that time, he had liabilities in excess of $465,000. His continued residence at Cheriton was possible only by reason of the undocumented arrangements with the Brockways which permitted him to continue to occupy the homestead and utilise the various sheds for his business. His only landholding was the northern block, which would undoubtedly have been difficult to realise independently because it comprised part of the Cheriton farm. Peter had a legitimate claim on his mother's bounty, having regard to his age, relatively short remaining working life and financial needs, to make provision which would address those needs. Those needs arose in the context that his dependence on Cheriton for his home and business premises emanated from the many years he had worked and lived on the farm on the assumption, encouraged by his parents, that he would continue to occupy Cheriton beyond their passing.
In contrast, Raylene was in a relatively secure financial position. She had personal assets well in excess of her liabilities, including the two properties at Bremer Bay as well as her unencumbered home. She was married, and, although her husband's financial position was not explored in detail at trial, she gave evidence that in 2008 he had sold his business for $700,000 to $800,000. Although it was said that he had spent the bulk of those proceeds, he was in a position to advance her $155,000 to assist her meeting the costs of these proceedings. In the circumstances, putting to one side Murray's financial position, no competing need has been demonstrated in relation to Raylene that would offset the testator's capacity to meet Peter's moral claim to provision from the estate.
Bringing to account the sale of Terlichs
In assessing the adequacy of the provisions in favour of Peter under Gloria's will, account should be taken of the benefit that Peter received by the reduction of his debt on the sale of Terlichs. It was a substantial benefit, even taking into account that Peter was a beneficiary of the Trust that sold the land. If one were to assume, as I consider the beneficiaries did (as evidenced by the open offer), that the three primary beneficiaries would share the assets between them equally, Peter received the benefit of $467,000 (that is, two thirds of $700,000) that might ultimately have gone to his siblings. That benefit was a justification for making a greater provision in the will for Raylene, and indeed Murray, than for Peter. I do not consider, however, that that benefit justified the enormous disparity between the gifts to Raylene as compared to Peter, having regard to Peter's needs as I have outlined them above.
Adequate provision
For the foregoing reasons, I find that the plaintiff has satisfied the jurisdictional requirement that Gloria's will did not make adequate provision for the plaintiff's proper maintenance, support or advancement in life. Adequate provision would have recognised Peter's financial position and the uncertainty as to his capacity to continue to live and work from Cheriton.
It is thus necessary to turn to the question of what provision ought be made out of the estate.
Appropriate provision from the estate
I accept that it is appropriate to have regard to the cost of relocation of Peter's home and business premises, and the discharge of his indebtedness, as a guide to what might be adequate provision. Peter's financial position at trial was, of course, significantly different from that which pertained as at the date of Gloria's death. The difference was the proceeds to be obtained from the open offer, which created a capacity for Peter to purchase alternative land.
Raylene's contention was that the purchase of Khedive Street was an unnecessary expense, and that his need for a residence and a base to operate his business could have been achieved more cheaply. Raylene adduced evidence from a valuer as to the availability of industrial zoned land in Wagin, which identified various blocks of industrially zoned land within a subdivision in Wagin varying in size from 2,011 sqm to 6,788 sqm, and ranging in price from $26,000 to $79,000. The more expensive of the lots were serviced with underground power, mains, water, telecommunications, a bitumen road frontage and concrete curbing.
Peter's evidence was that those lots were of insufficient size to conduct his business operations and, accepting that proposition, it would have been necessary for him to purchase more than one of the identified blocks.
In addition, the second defendant adduced evidence from McGarry Associates, quantity surveyors, as to a cost estimate for the construction of a house, machinery shed and workshop in the Woodanilling/Katanning region which would replicate the facilities on Cheriton. The cost including a three bedroom, brick veneer house and two sheds was $619,763. The sheds without the house would have been $274,913. A subsequent report of 19 May 2015 provided an estimated total construction cost excluding GST of a workshop, transportable office, storage shed, sea container and fencing on vacant land (presumably to reflect the facilities on Cheriton) amounting to $298,486. All of those figures were exclusive of GST, and therefore would need to be increased to reflect the cost which would be faced by Peter in endeavouring to replicate the existing facilities.
Raylene also contended that, rather than construct a residence on a newly purchased block of land, Peter could live in 28 Ballagin Street, and travel the short distance to the industrial lots which he could purchase and develop to carry on his business. Peter's proposal is, however, that he apply the proceeds of sale of 28 Ballagin Street towards the purchase of the Khedive Street property. If that is brought to account, the notional value attributable to the land and infrastructure used for the business at Khedive Street is, in effect, approximately $450,000. Against the estimates of the cost of land and improvements submitted by the second defendant, the purchase of Khedive Street appears to involve no greater outlay.
In my view, assessment of the proper provision which should be made from the estate by reference to the price of the Khedive Street property, including the duty on the purchase and the construction of a machinery shed, is an appropriate guide.
I have earlier made some observations about the figures used to arrive at the total net claim of $298,753.36 and indicated that, on my review of the evidence, the true claim is approximately $254,000. That includes, however, $51,000 which appears to be borrowings from relatives or friends which were utilised to meet the costs of this litigation. I do not consider it appropriate to, in effect, reimburse the plaintiff for those costs by way of additional provision from the will. The question of liability for legal costs is a matter to be dealt with in the usual way after delivery of these reasons.
Bringing to account those variations to the plaintiff's claim, I have concluded that the appropriate provision to be made from the testator's will is one which increases the provision under the will in favour of Peter by an amount of $200,000 to be funded from the provisions of the will in favour of Raylene. There are several ways in which that outcome might be achieved, and I will hear from the parties as to the appropriate form of the final orders.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: ECKERSLEY -v- GRAEME PETER ECKERSLEY AS EXECUTOR OF THE ESTATE OF THE LATE GLORIA DAWN ECKERSLEY (DEC) [2016] WASC 154 (S)
CORAM: CHANEY J
HEARD: 22 AUGUST 2016
DELIVERED : 9 SEPTEMBER 2016
FILE NO/S: CIV 2267 of 2013
MATTER :The Family Provision Act 1972
The Estate of Gloria Dawn Eckersley late of 28A Ballagin Street, Wagin in the State of Western Australia, deceased Probate No 297/2013
BETWEEN: GRAEME PETER ECKERSLEY
Plaintiff
AND
GRAEME PETER ECKERSLEY AS EXECUTOR OF THE ESTATE OF THE LATE GLORIA DAWN ECKERSLEY (DEC)
RAYLENE DAWN ECKERSLEY AS EXECUTOR OF THE ESTATE OF THE LATE GLORIA DAWN ECKERSLEY (DEC)
BRENTON JOHN AUGHEY AS EXECUTOR OF THE ESTATE OF THE LATE GLORIA DAWN ECKERSLEY (DEC)
First DefendantsRAYLENE DAWN ECKERSLEY
Second DefendantMURRAY ALLAN ECKERSLEY
Third Defendant
Catchwords:
Costs - Inheritance Act application - Scales inadequate - Complexity and importance of matter - Indemnity costs - Calderbank offer - Whether nonacceptance of offer unreasonable - Whether limit on costs should be removed - Whether new limit should be imposed - Proportionality of costs
Legislation:
Legal Profession Act 2008 (WA), s 280(1), s 280(2), s 280(2)(c)
Rules of the Supreme Court 1971 (WA), O 1 r 4B
Result:
Second defendant ordered to pay costs
New limit of costs imposed
Category: B
Representation:
Counsel:
Plaintiff: Dr P R MacMillan
First Defendants : No appearance
Second Defendant : Ms W F Gillan
Third Defendant : Ms W F Gillan
Solicitors:
Plaintiff: Taylor Smart
First Defendants : No appearance
Second Defendant : Butcher Paull & Calder
Third Defendant : Butcher Paull & Calder
Case(s) referred to in judgment(s):
Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S)
Crawley Investments Pty Ltd v Elman [2014] WASC 233 (S)
Daniels v Hall (as Administrator of the Estate of Arnold Edward Daniels) [No 2] [2014] WASC 272
Dean v Collins [No 2] [2015] WASCA 151
Eckersley v Graeme Peter Eckersley as Executor of the Estate of the late Gloria Dawn Eckersley (Dec'd) [2016] WASC 154
EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S)
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S)
Red Hill Iron Ltd v API Management Pty Ltd [2012] WASC 323 (S)
Unioil International Pty Ltd v Deloitte Touche Tohmatsu [No 2] (1997) 18 WAR 190, 193
Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 15 (S)
CHANEY J: On 24 May 2016, I delivered reasons allowing a claim by the plaintiff for a variation to the will of his mother, Gloria Dawn Eckersley, so as to make adequate provision for him: Eckersley v Graeme Peter Eckersley as Executor of the Estate of the late Gloria Dawn Eckersley (Dec'd) [2016] WASC 154. The alteration to the will was effected by an order that the provision giving the second defendant certain specified property be conditioned by a requirement that the second defendant pay to the plaintiff the sum of $200,000 by the end of August 2016. The question as to the appropriate costs orders now falls for determination.
The question of costs arises in the following context:
•The net value of the deceased's estate at the date of death was $1,497,384.82. By the time the matter came to trial, the value of the real estate assets within the estate had reduced by $99,000, thus reducing the overall value of the estate by that amount.
•Each of the plaintiff, the second defendant and the third defendant were beneficiaries of a discretionary family trust, the principal asset of which was a farming property worth $1.6 million.
•The plaintiff's share of the estate under the terms of the will was valued at $242,648.
•In the originating summons and affidavit in support filed in August 2013, the plaintiff did not quantify his claim to additional provision from the estate.
•The plaintiff's claim was quantified in a minute of specific relief filed on 9 September 2014. That document recorded an in‑principle agreement to the effect that the principal trust asset be sold and the net proceeds distributed equally amongst the plaintiff, and the second and third defendants as primary beneficiaries of the trust. The plaintiff quantified his claim as an additional $611,000 from the estate, so that the total provision in his favour would be approximately $850,000. That provision was sought in addition to the anticipated receipt of one‑third of the trust assets. The claim was couched in terms of it being an amount sufficient to enable the plaintiff to relocate his earthmoving business and provide him with a residence.
•On 30 September 2014, the second defendant's solicitors put forward an offer which, after some relatively minor amendments, was ultimately accepted on 2 November 2015, being the 'open proposal' outlined at [32] ‑ [34] of the reasons. The net result of that agreement was that the plaintiff would receive approximately $706,450 from the trust in exchange for his interest in the trust.
•As a result of the acceptance of the open offer, the plaintiff amended his claim from the estate to $298,753.
•The plaintiff was successful to the extent of obtaining an increased provision from the estate in the sum of $200,000.
The plaintiff's costs
An affidavit by the plaintiff's solicitors deposed to the fact that the plaintiff had been charged for 642.6 hours of work by various solicitors, being for a total amount, including GST, of $320,142.35. In addition, counsel fees of $87,593 had been incurred. There is no evidence as to the amount of disbursements incurred by the plaintiff, but given the number of experts involved in the trial, it is likely that disbursements would be significant.
The plaintiff's costs application
Various alternative costs orders are sought by the plaintiff. The plaintiff's primary position is that there should be an order that the second defendant pay his costs to be taxed on an indemnity basis generally or as to an appropriate proportion for costs or, in the alternative, on an indemnity basis from 5 November 2015 and prior to that time without regard to the upper limits of item 11 of the Legal Profession (Supreme Court) (Contentious Business) Determination 2012 (WA) or the same item of the Legal Profession (Supreme Court) (Contentious Business) Report 2014 (WA) (which I will refer to as the scales) pursuant to s 280(2)(c) of the Legal Profession Act 2008 (WA) (LP Act).
In the alternative, the plaintiff seeks an order that the second defendant pay the plaintiff's costs to be taxed without regard to the upper limits of item 11 of the scales.
In the further alternative, the plaintiff seeks an order that the second defendant pay his costs to be taxed on a party and party basis.
The plaintiff seeks no costs order against the third defendant.
The second defendant's response
The second defendant accepts that it is appropriate that there be an order that she pay the plaintiff's costs on a party and party basis. She opposes any order for the payment of indemnity costs. She acknowledges, however, that it may be appropriate to lift the limit on item 11 of the scales, but contends that a different ceiling should be specified rather than removing the limit altogether, and submits that the costs allowable under item 11 of the scales should have an upper limit of 100 hours for preparation and the first day of hearing of the originating process.
The issues for determination
The concession by the second defendant that there should be an order against her for payment of the costs of the proceedings is appropriately made. It was the second defendant who actively opposed the plaintiff's application. She was unsuccessful in that opposition. In those circumstances, whilst it is always a matter for the exercise of discretion in the circumstances of each particular case, the usual position is that the unsuccessful party will bear the costs of the proceedings: Dean v Collins [No 2] [2015] WASCA 151 [34].
I also accept that this is an appropriate case in which there should be an increase in the limit imposed by item 11 of the scales.
Section 280(2) of the LP Act provides:
(2)Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following -
(a)order the payment of costs above those fixed by the determination;
(b)fix higher limits of costs than those fixed in the determination;
(c)remove limits on costs fixed in the determination;
(d)make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.
In Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S), the court said [3]:
The application is made pursuant to s 280(2)(c) of the Legal Profession Act 2008 (WA) (the Act). That section provides that a court may make an order of the kind sought by the respondents if it is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter. The section requires that before making an order pursuant to its terms the court must form an opinion which has two components. First, the court must determine that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate. Second, the court must conclude that the inadequacy arises because of the 'unusual difficulty, complexity or importance of the matter' (Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [11]). Having heard the matter and being familiar with the way in which the case was conducted and the issues which were litigated, the court is in a position to form the opinions required under the section as matters of impression rather than science or mathematics: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) [7]; Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2) [14].
The word 'unusual' in s 280(2) qualifies only the 'difficulty' of a matter and not its complexity or importance: Cape Lambert Resources [5]; Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 15 (S) [9].
The word 'importance' in s 280(2) allows the court to have regard to whether the work done was appropriate to the significance of the issues to the parties, to other prospective parties, or to the public or community generally: Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [18] ‑ [19] (Martin CJ); Red Hill Iron Ltd v API Management Pty Ltd [2012] WASC 323 (S) [7] (Beech J).
The question of whether or not a limit under the scales is inadequate is to be determined as a matter of impression rather than as a matter of detailed evaluation: Heartlink [20].
Item 11 of the 2014 scale provides an upper limit of $35,200, made up of two days' preparation and one day of hearing for counsel, and 50 hours of preparation by a senior practitioner. This case involved a wide range of issues involving expert evidence in a number of fields. The trial ultimately occupied four days of hearing. Although not determinative by itself, the evidence of the plaintiff's solicitors is that they were engaged on the matter for a total of 642.6 hours. Whilst it may be accepted that some of that time would have been spent in relation to chambers appearances covered by item 10 of the scales, it can be accepted that much more time than 50 hours was required in the preparation of the case. In those circumstances, I accept that the amount of costs allowable in respect of the matter under item 11 of the scales is inadequate.
I am also satisfied that the inadequacy arises because of the complexity or importance of the matter to the plaintiff. The complexity arose by reason of the need to examine the plaintiff's farming history and financial relationship with his parents over a period of some 25 years. That involved an examination of the plaintiff's farming practices, his business history, the contributing causes to the declining profitability of the farm and the financial accounts of the plaintiff's business. Those matters involved a level of complexity not usually encountered in Family Provision Act proceedings.
In those circumstances, there are two issues which require resolution. The first is whether there should be an order for the payment of indemnity costs for all, or any aspect of, the proceedings. The second is whether the limit in item 11 of the scales should be lifted by a specific amount, or simply removed and left to the discretion of the taxing master.
Indemnity costs
There are two bases upon which indemnity costs are sought. The first is that the second defendant acted unreasonably in making a series of allegations which were inflammatory or improper and which were not ultimately pursued at trial. Those allegations related to assertions as to two particular aspects of what was said to be a very poor relationship between the plaintiff and his parents, extravagant conduct by the plaintiff, hostile conduct by the plaintiff, and unauthorised withdrawal of funds from a partnership account by the plaintiff's wife.
Allegations of that nature are indeed to be regretted, especially when they were effectively abandoned at trial. Such allegations have the capacity to inflame tensions between the parties and create an excessively adversarial atmosphere in which proceedings are conducted. I do not consider, however, that making those allegations, in the context of this case, should result in an order for indemnity costs being made. That is because, quite properly, the plaintiff confined his responses to little more than bare denials. It is unlikely that dealing with the allegations made a significant difference to the plaintiff's overall costs. It would not be practical to seek to identify in the context of a taxation of costs any additional costs attributable to the making of those allegations.
The second basis upon which indemnity costs are sought is the rejection of a 'Calderbank offer' made on 5 November 2015. By that offer, the plaintiff offered to settle the proceedings on the basis that he receive an additional $130,000 from the estate of the deceased and payment of his costs to be taxed with a special costs order pursuant to s 280 of the LP Act. The offer was specified to remain open for acceptance until 12 November 2015.
On 9 November 2015, the second defendant's solicitors wrote to the plaintiff's solicitors enquiring whether the Calderbank offer remained open in light of the plaintiff entering into a conditional contract for the purchase of the Khedive Street property. The second defendant's solicitors also sought an estimate of the likely taxed costs of the proceedings assuming a special costs order under s 280.
On the same day, the plaintiff's solicitors replied saying that it was not possible to provide an estimate of taxed costs in the proceeding to that time, but advising that at that stage their total legal costs amounted to $268,897.20, with disbursements of $76,249.22. It was not specified whether those disbursements related to counsel fees or to external experts or to other disbursements.
The offer lapsed on 12 November 2015. The trial of the action then proceeded between 30 November and 3 December 2015.
Given the closeness of the offer to trial, and the uncertainty as to the costs that would have been payable had the offer been accepted, it is doubtful that the failure by the second defendant to accept the offer can be said to be unreasonable. It is not necessary to resolve that issue, however, because the plaintiff has adduced no evidence to identify any costs after 12 November 2015 which would not be covered by an order for party and party costs. All that happened after that date was (presumably) some last minute preparation, and then the trial of the action. Item 11 of the scales allows for the first day of hearing, a daily rate for each successive day for counsel, and an hourly rate for attendance at the hearing by a senior practitioner. In those circumstances, an order for indemnity costs after 12 November 2015 is not warranted: Unioil International Pty Ltd v Deloitte Touche Tohmatsu [No 2] (1997) 18 WAR 190, 193; Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [11].
No indemnity costs order in favour of the plaintiff is warranted.
Fixing a higher limit
Section 280(2) of the LP Act contemplates the court fixing a higher limit of costs than those fixed in the relevant determination or simply removing limits on costs fixed in the determination. It is not uncommon, once the threshold questions are answered in favour of removing a scale limit, for that limit to be removed without replacing it with a different ceiling on the basis that the proper limits on reasonable costs are a matter best determined by the taxing master - see, for example, Flotilla Nominees 104 ‑ 105. In Crawley Investments Pty Ltd v Elman [2014] WASC 233 (S), Edelman J summarised the principles concerning special costs orders under s 280 of the LP Act. In relation to imposing a higher limit on a scale item, his Honour said:
Although replacing the amount of the Scale item with a different ceiling may be appropriate where sufficient information exists to make that assessment, it is not uncommon for an order to be made removing the limit for the Scale item without replacing that limit with a different ceiling [5].
His Honour cited EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) [8] ‑ [9], [13], and Red Hill Iron Ltd v API Management Pty Ltd [2012] WASC 323 (S) [5] as examples of the removal of a scale limit without replacement with a different ceiling. Neither of those cases appear to have considered the imposition of a different ceiling or the question of the sufficiency of information to enable that to be done.
In this case, as I have noted above, the information provided in relation to the actual work done went no further than a statement as to the total number of hours of work for which the plaintiff had been charged. No information is given as to how much of that work relates to matters that might fall under other recoverable items in the scales, such as item 10, or might fall outside what is described in item 11 of the scales as 'preparation of case'. The second defendant suggests that it would not be unreasonable to allow, 'for instance', twice the 50 hours of preparation. The second defendant does not proffer any rationale for that approach and it does not enable any proper assessment of an appropriate replacement ceiling.
Limits on recoverable costs are an important mechanism that seeks to avoid the costs of litigation being disproportionate to the subject matter of the litigation, especially costs reserved on a party and party basis. Section 280(1) of the LP Act regulates costs charged by law practices, and taxations of bills of costs, by reference to costs determinations. The regulation of legal costs, particularly in relation to costs payable by an unsuccessful party to litigation, is underlaid by considerations of the proper administration of the law and access to justice. Bourgeoning and disproportionate legal costs are a matter of concern to the courts. That concern is reflected by this court's case management objectives found in O 1 r 4B of the Rules of the Supreme Court 1971 (WA), which include ensuring that the costs of procedures to the parties are proportionate to the value, importance and complexity of the subject matter in dispute, and proportionate to the financial position of each party. In that context, there is much to be said for the judge who has had the benefit of case managing and hearing a matter at trial imposing, in appropriate cases, a higher limit on costs than those fixed in a determination where the threshold questions for the removal of the limit under s 280(2) of the LP Act are satisfied.
As the court observed in Cape Lambert Resources, having heard the matter and being familiar with the way in which the case was conducted, the court is in a position to form the opinions required under s 280(2) 'as matters of impression rather than science or mathematics'. Equally, it seems to me, the court will be, at least in some cases, in a position to fix a higher limit rather than leaving the limit open‑ended to be determined essentially on the basis of whatever the taxing master considers to be costs reasonably incurred in relation to the item in question. That will be particularly so with items in the nature of items 11 and 17 (preparation for case) which relate to a broader range of work than the specific tasks identified in items dealing with the writ, pleadings, discovery, interrogatories, interlocutory chambers appearances and other more confined work tasks.
This action proceeded along the lines of a trial with witnesses called and cross‑examined over four days.
In Daniels v Hall (as Administrator of the Estate of Arnold Edward Daniels) [No 2] [2014] WASC 272, EM Heenan J, after discussing a number of cases where excessive costs in inheritance proceedings have been the subject of judicial warnings and calls for restraint, described it as offensive to contemporary senses of justice that large proportions of an estate of any size should be consumed in the costs of litigation at the expense of the persons ultimately beneficially entitled in distribution [26]. His Honour said that those factors had caused courts to be sparing in the nature and extent of awards of costs made in this type of litigation [27].
In my view, those concerns call for the imposition, in this case, of an upper limit on the costs under item 11 of the scales.
Because these proceedings were conducted much along the lines of an action commenced by writ, albeit without pleadings, my view is that the upper limit for item 11 should be set by reference to the limits available for preparation of a case for trial (item 17) together with an allowance for first day of trial for counsel (item 20(a)). Under the 2014 scale, the limit of item 17, being preparation of case for trial, is 120 hours of time by a senior practitioner or $56,760. Counsel fee for the first day of trial is 3.5 days of preparation, together with the first day of trial, or $17,325. On that basis, item 11(a) of the scale should be increased by reference to those limits, making the maximum total recoverable amount under item 11(a) the sum of $74,085. Work done in preparation of the matter prior to the 2014 scale coming into operation should be assessed at no more than the maximum hourly rate for a senior practitioner under the 2012 scale.
Conclusion
There should be an order that the second defendant pay the plaintiff's costs to be taxed on the basis that the upper limit for item 11(a) of the scale is increased to the sum of $74,085, being for 120 hours' preparation of case and 3.5 days of preparation by counsel and counsel's fee on first day of hearing.
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