McCallum & v Johnston & Anor - [2005] NSWCA 400

NEW SOUTH WALES COURT OF APPEAL

CITATION: McCallum & Anor v Johnston & Anor [2005] NSWCA 400

FILE NUMBER(S):
40162/05

HEARING DATE(S): 10 October 2005

JUDGMENT DATE: 18/11/2005

PARTIES:
David Robert McCallum (Appl)
Stuart Alexander McCallum (Appl)
Joan Elizabeth Johnston (1R)
Helen Margaret Attwell (2R)

JUDGMENT OF: Mason P McColl JA McClellan CJ at CL

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): 3923/02

LOWER COURT JUDICIAL OFFICER: Macready AsJ

COUNSEL:
J W Wilson SC (Appls)
J S Drummond (Resp)

SOLICITORS:
Francis Kelly and Grant by their city agents
Turner Whelan (Appls)
Harris Lieberman Boyd (Resp)

CATCHWORDS:
APPEAL
will and estate
whether trial judge's discretion miscarried
whether failure to properly assess a beneficiary's income

LEGISLATION CITED:
Family Provision Act 1982

DECISION:
1. Appeals dismissed
2. Appellants to pay the respondents' costs

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40162/05
MASON P
McCOLL JA
McCLELLAN CJ at CL
FRIDAY 18 NOVEMBER 2005

McCALLUM & ANOR v JOHNSTON & ATTWELL

Judgment

MASON P: I agree with McClellan CJ at CL.
McCOLL JA: I have had the benefit of reading McClellan CJ at CL’s judgment in draft. I agree with his Honour’s reasons and the orders he proposes.
McCLELLAN CJ at CL: This is an appeal from the decision of Macready AsJ under the Family Provision Act 1982 in relation to the Estate of Duncan David McCallum who died on 29 September 2001 at the age of eighty-six years. His wife had previously passed away. He was survived by their five children.
Macready AsJ made orders increasing the entitlement of the deceased’s two daughters, Joan Johnston and Helen Attwell, from that provided in the deceased’s will. His Honour provided an additional legacy for Joan of $250,000 and an additional legacy for Helen of $175,000. In this appeal two of the appellant’s three sons, David and Stuart, challenge those orders.
The deceased’s will
By the terms of his will the deceased disposed of his assets in the following manner:
(i)His property at 80 Hardinge Street, Deniliquin to Joan and Helen in equal shares.
(ii)His one third interest in a Case International 2188 Header to Stuart and his share of the one third share held with his grandson John McCallum, to John (John is the son of David).
(iii)His interest in jointly owned plant and equipment to the surviving joint owner.
(iv)His share in the DD and JD McCallum Partnership including plant, equipment, stock, rice equities, debentures and shares which are jointly owned to John McCallum.
(v)He established a testamentary trust in respect of his property “Oakleigh East”, his shares and water entitlements with Murray Irrigation and stock, together with the rest and residue of his estate, for a period of 10 years. In the event which occurred, namely the prior death of his wife, income from the trust was payable to David and Stuart.
(vi)His water entitlement with Murray Irrigation (acquired in 1996) to Joan upon the winding up of the trust.
(vii) The rest and residue…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading McCallum & v Johnston & Anor

Details

AGLC: McCallum and v Johnston [2005] NSWCA 400
Case: [2005] NSWCA 400
Decision Date: 18 November 2005

CaseChat Overview and Summary

The case of *McCallum & v Johnston & Anor* concerned an appeal from a decision regarding the distribution of a deceased's estate. The appellants, who were beneficiaries under the will, challenged the trial judge's discretion in assessing the provision made for a beneficiary. The dispute centred on the proper interpretation and application of the deceased's will, particularly in relation to assets and the deceased's intentions concerning his children.

The primary legal issues before the court were whether the trial judge had miscarried their discretion in determining the estate's distribution and whether there had been a failure to properly assess a beneficiary's income. The court was required to consider the deceased's relationships with his children and the extent to which his will reflected contemporary standards of provision for beneficiaries, irrespective of gender.

The court's reasoning, as articulated by Macready AsJ, highlighted that the deceased's will exhibited a clear preference for his sons over his daughters, a distinction the Associate Judge found to be outdated and inconsistent with the requirements of the relevant legislation. The Act mandates that courts consider the individual circumstances of each child and make proper provision without differentiating based on sex. The Associate Judge also made findings regarding the deceased's dealings with one of the beneficiaries, Stuart, noting a long-standing relationship involving joint ventures and significant financial contributions from the deceased towards assets like a tractor. The court found that Stuart had received substantial benefits during the deceased's lifetime, and that the deceased's approach to provision for his children was not aligned with current legal expectations.

The appeals were dismissed, and the appellants were ordered to pay the respondents' costs.

Orders

Orders of the court

1. Appeals dismissed

2. Appellants to pay the respondents' costs

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

CLELLAN CJ

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Ratio Decidendi

Legal Principle Established

Established by: CLELLAN CJ

Macready AsJ also considered the relationship between Stuart and the deceased and made the following findings:“Clearly the deceased and the defendant, Stuart, had a long relationship and they were involved in many ventures together. There was no criticism of that relationship.In May 1998, some nine months after the commencement of the share farming agreement between the deceased and Stuart in respect of Oakleigh East, it was decided to purchase a new Case 8940 tractor for approximately $120,000. Although the purpose was to laser level the remaining part of Oakleigh East, it was in fact hardly used for this purpose and mostly used for other farming work. The deceased contributed his share of the payments on the finance for the tractor until his death amounting to $59,774.54. In due course Stuart used the tractor to trade in on another tractor which replaced it and he did not account to the estate for the estate’s share of the asset. In effect, he was anticipating his entitlement under the will. On these trade-ins, and the same applies to a number of other items, there were often substantial profits on sale shown in the accounts. This is because the written down value was substantially less than the actual value of the item. Of course these profits were not realisable profits and in fact led to more income and thus potential tax liabilities.There was a matter that arose in respect of the stock, once share farming commenced between the deceased and Stuart, in July 1997 on Oakleigh. There was a problem with foot rot and the stock had to be disposed of. Precisely how Stuart became entitled to stock, as he has suggested in his evidence on the commencement of that share farming, is not clear. Given the distributions during the life time of the deceased to Stuart, it may well be that this was by some arrangement with the deceased. In the circumstances although there is a dispute about the entitlement to the remaining $16,000, I do not think that this is a matter of great consequence. It is plain that contrary to his assertions, Stuart obtained substantial benefits from the deceased in his lifetime. Although there were many share farming agreements and joint enterprises undertaken by the deceased and Stuart, Stuart was only employed for three years by the deceased and Stuart also had his own properties which he had to manage and farm. This has to be taken into account when considering the extent of the help which Stuart gave to the deceased over his lifetime.”Consideration of the appeal In his reasons for judgment Macready AsJ identified some fundamental problems with the deceased’s approach to provision for his children as evidenced by his Will. He found that the deceased had a strong desire for his sons to have his farming property and it was for this reason that his sons received the majority of the assets in the Estate. The deceased had taken the view that the same level of provision should not be made for his daughters. The Associate Judge identified that although this may have been an appropriate approach to the matter in former times, this was no longer the case. His Honour said:“The Act requires the Court to consider the individual circumstances of a child and what is the proper provision for that child without differentiating between children because of their sex.”[61].