Watkins v Public Trustee (Estate of Harry Owen Watkins)

[2007] NSWSC 370

CITATION:	Watkins v Public Trustee (Estate of Harry Owen Watkins) [2007] NSWSC 370
HEARING DATE(S):	17 April 2007
JUDGMENT DATE :	17 April 2007
JURISDICTION:	Equity Division
JUDGMENT OF:	McDougall J at [1]
EX TEMPORE JUDGMENT DATE:	17 April 2007
DECISION:	See para [14] of judgment
CATCHWORDS:	SUCCESSION - family provision - date from which interest should run on legacy - MEDIATION - desirability of mediation in proceedings under Family Provision Act
LEGISLATION CITED:	Family Provision Act
PARTIES:	Joanne Tracey Watkins (Plaintiff) Public Trustee of New South Wales (Defendant)
FILE NUMBER(S):	SC 2261/06
COUNSEL:	D Liebhold (Plaintiff) M K Meek (Defendant)
SOLICITORS:	Elizabeth Fleming & Associates Moruya (Plaintiff) Margaret Pringle, Solicitor for the Public Trustee (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

McDOUGALL J

Tuesday 17 April 2007

NEW SOUTH WALES (ESTATE OF THE LATE HARRY
OWEN WATKINS)

JUDGMENT

1 HIS HONOUR: I heard these proceedings on 29 March 2007 and gave judgment on that day. For reasons that I then gave, I held that the plaintiff should receive a legacy out of the estate of the late Mr Watkins in the sum of $150,000. I stood proceedings over until today to enable the parties to bring in orders to give effect to my reasons.

2 The parties are agreed on the orders that should be made, with the exception of interest. The plaintiff submits that interest should run forthwith. The defendant submits that interest should not run if the legacy be paid before 17 October 2007.

3 The defendant's evidence is to the effect that the estate will need to realise an asset to enable the legacy and costs to be paid. There are in substance two candidates for realisation. The first is the property at 23 Jellicoe Road, Tuross Heads which was referred to in my earlier reasons. The second is a parcel of land in Wales owned by the late mother of the deceased: the deceased being the beneficiary in her will, so that his interest in his late mother's estate passed to Mrs Watkins.

4 The defendant's evidence, which on this point is unchallenged, satisfies me that it is not unreasonable to suggest that it might take up to six months to realise the property at 23 Jellicoe Road. There is no evidence as to the availability of funds from the Welsh property, a letter from the defendant to the solicitors in Wales handling the estate being, as of now, unanswered.

5 For the plaintiff, Mr Liebhold submits (correctly) that one of the effects of my decision is that the deceased should have recognised the need to make provision for the plaintiff, and should have made it in the sum that I have ordered. Thus, he submits, the plaintiff would have been entitled to enjoy that legacy no later than a year from date of death of the deceased (10 September 2005) or to enjoy interest from that anniversary. He submits (again correctly) that the effect of the order sought by the defendant is to diminish the real value of the legacy, because of the opportunity cost of deprivation of the funds.

6 I do not think that it is realistic to expect that a defendant in proceedings in the Family Provision Act should put himself, herself or itself in a position forthwith to pay, upon judgment being given and orders made, whatever (if any) provision the Court might order to be paid. In the present case, it is open to infer from the evidence that was relied upon at the hearing that Mrs Watkins would have preferred to receive the property 23 Jellicoe Road in specie. In circumstances where the estate was solvent, and where liabilities (apart from the legacy that I have decided should be paid to the plaintiff) can be provided for without realisation of assets, I do not think that it was unreasonable of the defendant to proceed on the basis that he would not, pending the hearing of these proceedings, sell the property at 23 Jellicoe Road.

7 I do not know whether the estate is deriving income either from the 23 Jellicoe Road property or from the property of the deceased's late mother. However, that seems to me to be an incidental inquiry, because there is no basis on which I could possibly conclude that any sound letting of those properties might have produced a sufficient sum to pay the legacy.

8 The question of interest involves some balancing of the relative position of the parties. It is correct, as Mr Liebhold submitted, to observe that if interest does not run for six months then Mrs Watkins will, in effect, be advantaged by whatever income the estate derives from the properties. However, that advantage (small enough, in the scheme of things) is counterbalanced by the considerations to which I have referred relating to the administration of the estate. In particular, I think, it would have been unnecessary, and possibly damaging, for assets to be realised, with all the expense that that involves where the assets are real estate, if there were no need to do so.

9 The defendant has provided an assurance, confirmed this morning, that if he comes into funds before 17 October 2007, he will cause the legacy to be paid. In other words, the defendant has assured the Court that he does not regard the orders propounded by him as meaning that the legacy need not be paid before that date.

10 In all the circumstances, I think, and balancing the considerations to which I have referred, it is appropriate to give the defendant some time to realise assets in order to pay the legacy. There being no suggestion that the period sought is excessive, I see no reason to make orders other than that propounded by the defendant having regard to my primary conclusion.

11 Before I make those orders, I should refer to one other matter. An order was made on 22 July 2006 that there be mediation between the parties. That mediation was fixed for 16 August 2006 at 2 pm. A week before, on 9 August 2006, the defendant's solicitor informed the plaintiff's solicitor that Mrs Watkins was in China and would be there on 16 August 2006. As a result, the mediation did not proceed.

12 For reasons that are completely unclear, no application was made for an order (whether by consent or otherwise) for a mediation on a date that suited all relevant parties and Mrs Watkins. It was suggested in the course of argument that the Court would not order mediation in a matter of this kind except by consent. I cannot speak for other judicial officers. My own view is that proceedings of this nature are eminently suitable for mediation, and that if one party seeks an order referring them to mediation, they should be referred unless there are very strong reasons indicating to the contrary. In this case, there was ample time after 9 August 2006 for a mediation to be rearranged. It may well be - I express no view - that had that occurred, an earlier resolution might have been achieved.

13 However, in circumstances where neither party seems to have moved the Court along the lines that I have suggested, I will do no more than note that it is unfortunate that the parties, by reason of what appears to have been an oversight, effectively passed up an opportunity to resolve the matter between themselves, with the assistance of an experienced mediator.

14 For the reasons that I have given, and noting the assurance from the defendant to which I have referred, I make orders in accordance with paragraphs 1 to 4 of the short minutes of order initialled by me and dated today's date.

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