IMO the Will and Estate of William James Milburn (deceased)
[2014] VSC 229
•20 May 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2013 06475
IN THE MATTER of Part IV of the Administration and Probate Act 1958
- and –
IN THE MATTER of the Will and Estate of WILLIAM JAMES MILBURN (deceased)
B E T W E E N
| DAVID USHER | Plaintiff |
| v | |
| STEVEN JOHN HARDING (who is sued as executor of the Will of William James Milburn, deceased) | Defendant |
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JUDGE: | ZAMMIT AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 29 April 2014 | |
DATE OF JUDGMENT: | 20 May 2014 | |
CASE MAY BE CITED AS: | IMO the Will and Estate of William James Milburn (deceased) | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 229 | |
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ADMINISTRATION OF PROBATE – Testator’s Family Maintenance – Deceased – Claim by testator’s son-in-law – No dispute on the claimant’s evidence – Whether claim for further provision has no real prospect of success – Whether appropriate for summary dismissal – Administration and Probate Act 1958, s 91 – Civil Procedure Act 2010 ss 63 and 64.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R.B. Phillips | Brendan J. Meredith & Co |
| For the Defendant | Mr S. Gannon | Melville, Orton and Lewis |
HER HONOUR:
The defendant applied by summons filed 25 February 2014 for orders pursuant to Part 4.4 of the Civil Procedure Act 2010 (“CPA”), that the plaintiff’s claim for provision pursuant to Part IV of the Administration and Probate Act 1958 (“the Act”) be summarily dismissed. The plaintiff, David Usher, is the son-in-law of William James Milburn (“the deceased”).
The deceased died on 18 July 2011. He made his last will on 25 July 2002 as varied by codicil dated 2 September 2009 (“the will”). The will left the whole estate equally between his children, Greg Thorogood and Karen Usher (“Karen”). Probate of the will was granted to Steven John Harding, the executor defendant.
An inventory of assets and liabilities of the deceased’s estate shows the net value of the estate to be approximately $1,840,618 as at 12 July 2013.
The deceased’s will makes no provision for the plaintiff.
On 14 February 2014, at a directions hearing, I made orders that the parties file and serve their affidavits in this proceeding. The plaintiff filed with the Court an affidavit in support of his Part IV application, sworn on 16 December 2013. The defendant has filed a brief affidavit in opposition to the plaintiff’s summary judgment application, sworn 24 February 2014.
The parties rely on written submissions.
The plaintiff’s evidence
The plaintiff lived with Karen from about 1982. They married in January 1987 and from about 1985 lived in the family home at 30 Byron Street, Bannockburn. The plaintiff and Karen separated on 25 April 2013. The plaintiff and Karen have two children, Brad Usher aged 30 years, and Kate Usher aged 27 years. The plaintiff and Karen are currently involved in family law proceedings in the Federal Circuit Court of Australia, which were commenced by Karen on 7 January 2014. Karen seeks an adjustment of property interests in her favour.
Karen is the daughter of the deceased. A few years after the plaintiff and Karen had been in a relationship, Karen found out that she and her brother, Greg, were adopted and their natural mother, Margaret Horn, would like to meet her. Prior to hearing from Margaret Horn, Karen had no knowledge that her parents in Warrnambool were not her natural parents.
It was eventually revealed to Karen that the deceased was Karen and Greg’s natural father. In due course, Karen and the plaintiff met the deceased approximately 30 years before the deceased died.
The plaintiff deposes that the deceased visited he and Karen over time at their home in Bannockburn and that they eventually started going to the deceased’s farm in Casterton.
The plaintiff described that initially he and Karen would visit the deceased approximately twice a year and that they would stay in the farmhouse. In addition, the plaintiff camped on the bush block with his two children. On those occasions, Karen did not accompany him. Otherwise, the plaintiff describes that they always stayed in the deceased’s house.
During this time the plaintiff began working on the farm, helping the deceased when they stayed there. This included grass slashing around the house due to the sighting of a small tiger snake, tidying up the garden, pruning the garden and fixing up an old Chevrolet truck. The plaintiff deposes that he fixed up the “head, the brakes and worked on it [the truck] up there. This took two months or so of intermittent work on my part during my time off.”[1] The plaintiff describes that while fixing the truck he went to the deceased’s property in Casterton on weekends whenever a part became available.
[1]Plaintiff’s affidavit dated 16 December 2013 at paragraph 11.
Over time the plaintiff and the deceased became good friends. The deceased realised that the plaintiff was good with his hands and involved him more and more in the farm. The plaintiff maintained and repaired a short wheel based Land Rover, a Holden WB ute and a Rodeo ute.
The plaintiff says that there came a point where the deceased would call him in Bannockburn and ask him farm related questions such as the worth of the WB ute. The plaintiff says that at or about this time he was servicing and repairing equipment on the deceased’s farm and because of this commitment he began going to the farm about every two or three months to work around the place on weekends. On most occasions Karen went with the plaintiff and the two children. Alternatively, Karen might stay home and the plaintiff would go with his son, Brad, who was then a young teenager. The plaintiff always took a load of wood back with him.
When the plaintiff lost his job at Geelong cement works, he worked at the deceased’s farm for a week. He said that the deceased told him to come up, which he did. The plaintiff’s evidence is that at no time, other than receiving the trailer of wood, did he receive any payment for his work and nor did he expect to be paid.
The plaintiff describes that as his son grew older he lost interest in going to the farm and that Karen also lost some interest in attending the farm as often as he did. The plaintiff began going to the farm, working there, fixing whatever was broken or whatever the deceased asked him to do. By way of example, he described how the deceased, as he became older, began to grow frail, and that it became necessary to re‑strain fences, fix gates and put in new fence posts. The plaintiff deposes that he would attend on an average of once every two to three months, and on these occasions he would work on the deceased’s farm for any time from one day to one full weekend. He said that at this stage it was just one job after another. By this time, Karen would attend the farm with the plaintiff about half of the time he went up. The plaintiff said that most of the time he would go every couple of months to the deceased’s farm but sometimes it was every week, particularly as the deceased got older. The plaintiff suggested a roster but that this was not taken up by the deceased or Karen.
As the deceased aged, he asked for more help around the property. Approximately seven years before the deceased died, he moved into Edgarley Aged Care (“Edgarley”), Casterton. The deceased would still attend the farm every day, at least for the first four years or so, and look after his cattle. When the plaintiff and Karen visited the farm they would go and get the deceased and take him out to the farm. If the plaintiff was at the farm by himself, he would get the deceased and bring him out to the farm.
The plaintiff deposes that a short time before the deceased went to Edgarley he said to him, “You’re going to get it anyway”.
The plaintiff accepts that before the deceased went into Edgarley he came to rely on his friendship with the defendant who was a neighbour. The defendant fed the deceased’s cattle and his dogs, managed his finances and in return, he was allowed to use the deceased’s farming equipment and implements for running his own farm.
The plaintiff considered that at that time his relationship with the defendant was very good and that the defendant would often call him if he wanted him to do a job on the farm. The plaintiff says that the defendant told him during this time that “Bill had left everything to ‘youse’.”[2]
[2]Plaintiff’s affidavit dated 16 December 2013 at paragraph 20.
While the deceased was residing at Edgarley, the defendant asked the plaintiff to build different farm implements including: a set of front forks for a tractor, which took approximately two to three days; a set of forks for the late model Massey Ferguson tractor; a spike; a mobile trailer for the irrigation pump; and two sets of “rippers”. The plaintiff did not receive payment for any of the equipment he built for the deceased’s farm. He was, however, reimbursed for the cost of the materials.
After the plaintiff separated from Karen, he received a cheque for $4,000 for the farm equipment he had built.
The plaintiff is 56 years of age. In the time he was involved with the deceased and the deceased’s farm he was in fulltime employment as either; a plant operator at Geelong Cement Pty Ltd, or an operator at the Ford Proving Ground.
Other than occasional casual labouring work, the plaintiff is currently unemployed. In March 2012, the plaintiff applied for a redundancy package from Ford and received approximately $90,000 on account of years of service and work and pay entitlements.
The plaintiff is not entitled to unemployment benefits because of the package he received. His current income is $1,500 per month, being $346 per week. The plaintiff suffers from lower back pain. He has been advised that his condition is congenital and due to a mild curvature of the lower spine.
The plaintiff currently resides at the former family home at 30 Byron Street, Bannockburn. The matrimonial home forms part of the pool of assets which are the joint property of Karen and the plaintiff, which will be divided pursuant to the Family Law Act. The plaintiff’s children are not dependent on him, however, his son was off work for approximately eight weeks and during that time the plaintiff made a payment to him of approximately $9,000.
The matrimonial home is valued at $367,500, which the plaintiff owns with Karen. The property is unencumbered and as a consequence of the family law proceedings it will need to either be split or sold.
In addition to the redundancy package of $90,000, the plaintiff has approximately $100,000 in superannuation policies. He currently holds approximately $222,995 as the funds have been reduced due to him drawing his wage. He owns a Holden Commodore 2004 model ute worth approximately $9,500, a Triumph Thunderbird motorbike worth approximately $13,500, and tools and equipment valued at approximately $5,000.
Summary judgment test
In the recent decision of the Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[3] a question of law was referred to the Court pursuant to s 17B(1) of the Supreme Court Act 1986 as to the test to be applied when determining whether to give summary judgment in a civil proceeding under s 63 of the CPA. After reviewing the authorities and extrinsic materials, the Court concluded as follows:
Upon the present state of authority:
(a)the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
(b)the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless ‘ or ‘bound to fail’ test essayed in General Steel;
(c)it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d)at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings failed to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[4]
[3][2013] VSCA 158.
[4]Ibid, at [35].
Section 64 of the CPA leaves the Court a discretion to order that the civil proceedings go to trial if it is satisfied that, despite there being no real prospect of success, the civil proceeding should not be disposed of summarily because it is not in the interests of justice to do so, or the dispute is of such a nature that only a full hearing on the merits is appropriate.
The power to give summary judgment must be exercised in accordance with the overarching purpose of the CPA and taking into account the fact that if granted, a party will be deprived of a chance to pursue its claim or defence.[5]
[5]Ibid, at [42] per Neave JA.
The new test does not direct an enquiry into whether a certain and concluded determination could be made that a proceeding, or a claim, would necessarily fail. What is required is a practical judgment by the Court as to whether a claim has more than a ‘fanciful’ prospect of success. The less complex the issues in a case, the easier it is for a Court to take the view that such a proceeding is capable of being determined on summary judgment.
As Finkelstein J noted when considering the equivalent rule to s 63 of the CPA, s 31A of the Federal Court Act 1976 (Cth)[6], it is no simple task to work out what Parliament had in mind by providing for summary judgment where a claim or defence has ‘no reasonable prospect of success’. It is difficult to see how one can assess prospects of success without some attempt of predicting the outcome of the dispute. If the dispute is about factual issues, the task of prediction is fraught with all kinds of difficulties. In many cases, the Court will not have before it all the material evidence. Further, if credit is involved, it may be impossible to predict how that issue will be resolved. The way in which a claim or part of a claim will be assessed as having ‘no reasonable prospect of success’ will vary in the nature of the cause of action pleaded; the identity of the parties; the pleaded facts; the evidence in support of the summary judgment application; and the evidence, if any, tendered in defence.
[6]Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60 at [20]-[23].
When considering an application for summary judgment in a Part IV claim, the Court must be particularly cautious, in that Part IV claims tend to be of a type which may fall within s 64 of the CPA, as not being suitable for summary determination. That is because claims under Part IV of the Act involve the Court’s evaluation of the testator’s moral duty and the exercise of a discretion. As Mukhtar AsJ noted in Jackson v Newns,[7] the exercise of such a discretion involves ‘some value judgment’ and means ordinarily family claims are best left to the trial to determine their sustainability. Mukhtar AsJ noted that summary disposal in this type of case is rare because facts in family claims are invariably in dispute to some appreciable degree, and a fair bit is, at large, in the field of discretion.
[7][2011] VSC 32 at [11].
The law in relation to the plaintiff’s case
The defendant submits that the plaintiff’s claim has no reasonable prospect of success in that the facts disclose no moral obligation of the deceased to make provision for the plaintiff.
Section 91(1) of the Act provides that the Court may order that provision be made out of the estate of the deceased person for the proper maintenance and support of a person for whom the deceased had responsibility to make provision. The Court must not make an order under sub‑section (1) in favour of a person, unless the Court is of the opinion that the distribution of the estate of the deceased person does not make adequate provision for the proper maintenance and support of the person (s 93(3)). The Court in determining responsibility to make provision, whether the distribution of the estate makes adequate provision for the proper maintenance and support of the person, and the amount of provision, and any other matter relating to the application, must have regard to the factors in s 91(4). Before turning to the specific heads in s 91(4), I note general principles established by the Courts:
(a)in Collicoat v McMillan,[8] Ormiston J referred to the “correlative notions” of moral claim and moral duty. The expression ‘moral claim’ has always been treated as a convenient shorthand expression referring to the right correlative to the duty imposed on testators to make adequate provision, adequacy or sufficiency being measured by reference to what is right and proper according to accepted community standards. In Blair v Blair,[9] Nettle JA stated:
[8][1999] 3 VR 803 at 818.
[9][2004] VSCA 149; (2004) 10 VR 69 at [65].
The court is bound in answering each of those questions to have regard to the matters mentioned in ss 91(4)(3) to (o) and, pursuant to s 91(4)(p), to any other matter considered to be relevant. Self evidently, such matters are of themselves incapable of providing an answer to either question. To reason from the matters mentioned in ss 91(e) to (p) to a conclusion that a testator had a responsibility to make provision for a claimant, or that the testator failed to make adequate provision for the claimant, necessitates the application of a test or standard to the matters to be considered. That test remains one of whether and if so what provision a wise and just testator would have thought it his moral duty to make in the interests of the claimant.
(b)In Grey v Harrison,[10] Callaway JA (Tadgell and Charles JJA agreeing) stated:
We must not underestimate the significance, both practical and symbolic of freedom of testation. It is one of the badges of a society that has graduated from primitive conditions and a notable human right. Part IV of the Administration and Probate Act is to be construed accordingly. … At [366] [i]t is one of the freedoms that shape our society, and an important human right, … there is no equity, as it were, to interfere with a testator’s dispositions unless he or she has abused that right.
(c)This is reiterated in Webb and Ors v Ryan and Anor.[11] Whelan J considered that, because of the seriousness of the allegation that a testator has abused his or her freedom of testation, the principles concerning the qualities of the proofs required as set out in Briginshaw v Briginshaw,[12] need to be borne in mind.
[10][1997] 2 VR 359 at [363].
[11][2012] VSC 377 at [20]-[21].
[12](1938) 60 CLR 336.
Whether a breach of moral duty has occurred is determined at the date of the testator’s death, having regard to the value of the estate at that time, the plaintiff’s claim upon the bounty of the testator and the competing moral claims of the actual beneficiaries in the will. The judgment made at the date of death is on the basis of facts whether known or unknown to the testator, and of all the eventualities that might at the date reasonably have been foreseen by a testator who knew the facts. Once a breach of moral duty is established, the Court proceeds to the second stage of assessing compensation.[13]
[13]Niehoff v Niehoff [1995] 2 VR 356 at 357-8.
In Petrucci v Fields,[14] a claim by a daughter‑in‑law of the deceased succeeded. The deceased’s son, the plaintiff’s husband, died before the deceased. There was evidence of a longstanding relationship between the first plaintiff and the deceased and she had made a significant contribution to the deceased’s welfare. Mandie J considered that it was not correct to say that the son’s death meant that his widow was cut off from consideration in circumstances where she supported her husband in his filial duties and contributed to the welfare of the deceased.[15]
[14][2004] VSC 425.
[15]Ibid, at [61].
In Petrucci’s case, the daughter-in-law was awarded a life interest of $60,000. The claim by the first plaintiff’s children, the deceased’s grandchildren, also succeeded.
In Thompson v McDonald,[16] a former daughter-in-law of the deceased succeeded in the claim. In that case, Pagone J noted:[17]
… However, neither category of potential claimants of ‘former daughter-in-law’ or ‘grandchildren’ are necessarily excluded from the class of persons who may come within s 91(1). The specific nature of the relationship is plainly a factor to which regard must be had (as s 91(4)(e) makes clear), but it is not an automatically disentitling factor that the relationship is that of a ‘former’ daughter-in-law or that of ‘grandchild’. In each case the question to be determined is whether the testator ‘had responsibility to make provision’ for the specific applicant and that question is to be answered by consideration of the matters enumerated in s 91(4)(e) to (p) and the particular facts and circumstances applicable to the applicant, the testator, the beneficiaries and the estate.
[16][2013] VSC 150.
[17]Ibid, at [10].
Submissions
The defendant submits that there must be a certain minimum standard of evidence which is capable of examination and that in this case the plaintiff has not provided sufficient evidence to make out even a prima facie case and as such, the proceeding should be summarily dismissed.
The defendant submits that there is nothing in the plaintiff’s evidence to demonstrate a relationship of the necessary character to give rise to a moral obligation to make provision for his proper maintenance or support.
The defendant submits that the deceased was entitled to have contact with his son‑in‑law without expectation that the law would impose an obligation on him to make provision. The defendant submits it would be contrary to community standards to impose without anything more, a moral obligation, between the deceased and his son‑in‑law.[18]
[18]Defendant’s written submissions dated 24 April 2014 at paragraph 15.
Further, the defendant submits that the question of the family law proceedings is relevant in this case to the extent that the proceeding is not about the moral obligation on behalf of the deceased, but rather the relationship between Karen and the plaintiff. In this case, there is not yet a financial settlement while the proceedings are on foot which will finalise the financial relationship between the plaintiff and Karen.
The defendant submits that the separation of the parties, following the death of the deceased does not create a moral obligation of the deceased to make provision for the plaintiff. Further, it is submitted that the family law proceedings in which Karen’s share of her father’s estate will be taken into account, may lead to certain matters being litigated twice if this application proceeds. That is, once in the Supreme Court to determine whether the plaintiff should receive provision out of the estate of the deceased, and then in the Federal Circuit Court to decide the property adjustment between the plaintiff and Karen. The defendant submits that the inherent weakness of the plaintiff’s case and the fact that the matrimonial property pool between the plaintiff and Karen will be determined by the Federal Circuit Court are powerful reasons to summarily dismiss the proceeding.
The plaintiff submits that the evidence puts into contention the question of whether the deceased had a moral duty to make further provision for the plaintiff. In particular, the plaintiff submits that the duration of his relationship with the deceased, the contribution and work he did for the deceased on the farm and the nature and quality of the relationship over the prolonged period, was such so that it cannot be said that there is no reasonable prospect of success.
Decision
The plaintiff does not fall into a category of claimants such as a child or spouse where the question of moral obligation owed by a testator is to an extent less difficult to assess. The relationship, that is, be it grandchild/grandparent, son‑in‑law/father‑in‑law, niece/nephew/aunt is not the determinative factor in a Part IV claim under the Act. The relationship itself does not rule it in or out of having a reasonable prospect of success. The Court must balance the testator’s right to freedom of testation with the factors set out in s 91(4)(e)-(p) of the Act.
The present case is unusual in that the plaintiff met the deceased for the first time at the same time Karen met the deceased. Together, the plaintiff and Karen, developed a relationship with the deceased which was nurtured and maintained over 30 years. This was not the typical scenario of a pre‑existing relationship of a father and daughter which is then complimented by a son‑in‑law. In some ways, the plaintiff’s relationship with the deceased developed at the same time that Karen’s relationship with her father developed and perhaps independently of Karen’s relationship with her father. At the date of the deceased’s death, Karen and the plaintiff were married. The issue the Court needs to address is what, if any, moral obligation did the deceased owe to the plaintiff, his daughter’s husband, at the time.
The evidence as it stands now, establishes that the plaintiff and deceased had a close and caring relationship. The plaintiff attended the deceased’s property on a regular basis and assisted the deceased in a variety of ways. The plaintiff would visit and help the deceased even if Karen did not accompany him.
It will be for the Court to assess the quality and nature of this relationship and whether it was one which gives rise to a moral obligation that the deceased ought to have made provision for the plaintiff. Given the unusual circumstances which gave rise to the plaintiff, Karen and the deceased meeting for the first time and the development of the relationship from that time, it cannot be said that this was not a relationship which could not reasonably give rise to a moral obligation that the deceased make provision for the plaintiff.
In addition, there are other factors which support the plaintiff’s submission that the case should not be summarily dismissed. The estate is reasonably large, having a net value of $1,840,518. The plaintiff has some medical issues. The plaintiff is currently unemployed and there is an argument that he has financial need. There is evidence that the deceased indicated that he intended for the plaintiff to inherit under the Will. The plaintiff provided assistance to the deceased. The actual value of the contribution is difficult to assess at this stage but it was ongoing and in combination with the defendant’s assistance, the plaintiff’s contribution enabled the deceased to have the benefit of the farm even when he was living at Edgarley.
At this stage there has not been a property settlement between the plaintiff and Karen. There is no doubt that the ultimate settlement between Karen and the plaintiff will take into consideration any inheritance Karen has under the Will. However, this factor does not of itself mean that under the Act, the plaintiff is not entitled to provision under the deceased’s estate. Dijkhuijs (formerly Coney) v Barclay,[19] and Armstrong v Sloan,[20] were cases where the plaintiffs sought provision from their former spouse’s estate. In these cases the plaintiffs had entered into agreements which the Court found as far as practicable finely determined their relationship. In both cases the Court considered that the achievement of a final property settlement in the Family Court terminated any moral claim of the former spouse to provision in the Will of the other. In Galvin v Semkiw and Anor,[21] Emerton J considered that Part IV of the Act does not automatically conclude a claim by a divorced spouse, even one who has had a matrimonial property by the Federal Magistrates’ Court.
[19](1988) 13 NSWLR 639.
[20][2002] VSC 229.
[21][2013] VSC 142 at [18].
The facts in the current case are again removed from the line of cases in the preceding paragraph. It is a claim by a son-in-law on his father-in-law’s estate; the relationship was not ordinary in the sense that Karen and the plaintiff developed their relationship with the deceased as adults and at the same time, and in circumstances where there was no pre-existing father and daughter relationship. In this case there is no property settlement between the plaintiff and Karen.
As already discussed, I consider that on the question of the nature of the relationship between the deceased and the plaintiff, which must be considered pursuant to s 91(4)(e), the matter should not be summarily dismissed. It is not possible, nor appropriate to make an assessment of the nature and quality of the relationship between the deceased and the plaintiff without a full hearing of the evidence.
The power to order summary judgment is one which should be exercised with great care. I am not satisfied that there is a high degree of certainty about the ultimate outcome of this proceeding, if allowed to go to trial in the ordinary way. In my view, it cannot be said that there is no real prospect of success.
If I am wrong about my assessment of the strength or weakness of the case, I take into account that this is an interlocutory judgment heard in the Associate Judges’ Practice Court. Pursuant to s 64(b) of the CPA, I consider that in the circumstances of this case, it is not a suitable venue or forum for the full examination of all the intricacies involved in family relationships or for full argument as to how they may bear upon the question of the wise and just disposition by the testator.
In the circumstances, the defendant’s summons should be dismissed.
I will hear the parties as to the form of the order and costs.
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