Young v Martin - [2020] WASC 442

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   YOUNG -v- MARTIN [2020] WASC 442
CORAM:   ALLANSON J
HEARD:   14 & 15 OCTOBER 2020
DELIVERED          :   8 DECEMBER 2020
FILE NO/S:   CIV 1315 of 2018
MATTER: Section 6(1) of the Family Provision Act 1972
The Estate of the late Stephen Alan Jones late of 1 Monterey Crescent, Warnbro in the State of Western Australia (dec)

BETWEEN: MICHELLE YOUNG
Plaintiff
AND
SAMUEL WILLIAM MARTIN as executor of the estate of STEPHEN ALAN JONES
First Defendant
DAVID LEE JONES beneficiary of the estate STEPHEN ALAN JONES
Second Defendant
KIRSTY-ANN JONES beneficiary of the estate STEPHEN ALAN JONES
Third Defendant
SAMUEL WILLIAM MARTIN beneficiary of the estate STEPHEN ALAN JONES
Fourth Defendant
IAN JONES beneficiary of the estate STEPHEN ALAN JONES
Fifth Defendant
DEPARTMENT OF HEALTH beneficiary of the estate STEPHEN ALAN JONES
Sixth Defendant
RONALD MCDONALD HOUSE CHARITIES beneficiary of the estate STEPHEN ALAN JONES
Seventh Defendant

FILE NO/S: CIV 1436 of 2020
BETWEEN: MICHELLE YOUNG
Plaintiff
AND
SAMUEL WILLIAM MARTIN as executor of the estate of STEPHEN ALAN JONES
Defendant

Catchwords:

Contract - Where de facto partners agreed to purchase home with one contributing half of purchase price with the other paying mortgage repayments - Where partner paying mortgage died - Whether surviving partner has proved an agreement enforceable against the estate to pay balance of mortgage

Contract - Where loan between de facto partners - Where loan repayable on demand - Whether giving notice of loan to executor of deceased partner is demand for repayment

Contract - Where surviving partner guarantor of personal loan of deceased - Where surviving partner paid one instalment of loan - Whether cause of action for indemnification by estate accrued on payment of instalment

Contract - Where executor agreed to indemnify plaintiff for payments made for small sums due by deceased - Where cause of action accrues on failure by executor to indemnify after grant of probate

Family provision - Whether plaintiff de facto partner of deceased immediately before his death - Where deceased made no provision in his will for plaintiff - Whether deceased failed to make adequate provision for proper maintenance where estate small and plaintiff owned substantial assets in her own right

Legislation:

Family Provision Act 1972 (WA), s 6, s 7
Interpretation Act 1984 (WA), s 13A
Limitation Act 2005 (WA), s 59

Result:

CIV 1436 of 2020 - Judgment for plaintiff on part of claim
CIV 1315 of 2018 - Application dismissed

Category: B

Representation:

CIV 1315 of 2018

Counsel:

Plaintiff	:	D Singh
First Defendant	:	S Macdonald
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Seventh Defendant	:	No appearance

Solicitors:

Plaintiff	:	Friedman Lurie Singh & D'Angelo (Perth)
First Defendant	:	Macdonald Rudder
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Seventh Defendant	:	No appearance

CIV 1436 of 2020

Counsel:

Plaintiff	:	D Singh
Defendant	:	S Macdonald

Solicitors:

Plaintiff	:	Friedman Lurie Singh & D'Angelo (Perth)
Defendant	:	Macdonald Rudder

Case(s) referred to in decision(s):

Ashton v Pratt [2015] NSWCA 12; (2014) 88 NSWLR 281
Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282
Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95
G v O [2018] WASCA 211; (2018) 53 WAR 393; (2018) 369 ALR 346
H v P [2011] WASCA 78
Lemon v Mead [2017] WASCA 215; (2017) 53 WAR 76
McColl's Wholesale Pty Ltd v State Bank of NSW [1984] 3 NSWLR 365
Miller v Taylor [2018] WASC 75
MW v The Department of Community Services [2008] HCA 12
Pelka v Secretary, Department of Family & Community Services [2006] FCA 735
Pontifical Society for Propagation of Faith v Scales [1962] HCA 19; (1962) 107 CLR 9
Ryan v Zekas [2020] WASC 124
Samuel William Martin as executor of the will of Stephen Alan Jones v Young [2017] WASC 202
Scherini v Conwell [2018] WASC 172
Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164
Warwick Entertainment Centre Pty Ltd (Recs and Mgrs Apptd) atf The Warwick Entertainment Centre Unit Trust v Silkchime Pty Ltd (Recs and Mgrs Apptd) atf The Silkchime Unit Trust (No 4) [2018] WASC 120
Young v Martin [2018] WASCA 206

ALLANSON J:

Background

Stephen Alan Jones died on 11 November 2013.
Mr Jones did not leave a valid formal will, but left a document purporting to contain his testamentary instructions.
In 2014, Samuel William Martin, as the named executor, brought proceedings to prove the informal will as the last will of Mr Jones, and for orders that it to be admitted to probate.[1] The plaintiff in the present action, Michelle Young, was named as a defendant in those proceedings.
[1] CIV 2428 of 2014.
On 26 July 2017, Martin J granted the application by the executor and declared the document left by Mr Jones to be a valid and in force will.[2] Ms Young appealed that decision.
[2] Samuel William Martin as executor of the will of Stephen Alan Jones v Young [2017] WASC 202.
By originating summons, filed 22 February 2018, Ms Young brought proceedings for orders that provision be made for her out of the estate of Mr Jones under s 6 of the Family Provision Act 1972 (WA).[3] Ms Young claimed as the de facto partner of Mr Jones immediately before his death.
[3] CIV 1315 of 2018.
The first defendant in the family provision action, Samuel William Martin, is the executor of Mr Jones' estate (the Executor). The other defendants are beneficiaries named in Mr Jones' will.[4] The proceedings were not served on the fifth defendant, who does not live in Australia.
[4] Mr Martin was also named as fourth defendant in his capacity as a beneficiary. In these reasons, I refer to him as the Executor when speaking of his appearance in that capacity.
I am satisfied that the court can proceed on the basis that it is the first defendant, as executor, who is required to uphold the will and represents the interests of all beneficiaries.
The Executor is the only defendant who has participated in the proceedings.
In November 2018, the appeal from the decision of Martin J was dismissed.[5]
[5] Young v Martin [2018] WASCA 206.
On 7 February 2020, the family provision action was listed for trial on 20 and 21 April 2020.
On 26 March 2020, Ms Young filed an originating summons commencing a new action, CIV 1436 of 2020, in which she seeks orders that the estate of Mr Jones pay all sums due on a loan and mortgage over a property at Warnbro; repay, with interest, amounts which Ms Young has paid on the mortgage since the date of Mr Jones' death; and pay or reimburse Ms Young for other amounts said to be owing by Mr Jones to her at the date of his death, or paid by her since his death. Alternatively, Ms Young seeks orders for the estate to pay half of the amounts due on the Warnbro mortgage.
The Warnbro Property is not part of the estate; it was owned jointly by Ms Young and Mr Jones, and passed to her by survivorship on his death.
The solicitors for Ms Young submitted that the new action should be heard before the family provision claim. It was necessary to adjourn the trial of the family provision claim and to resolve Ms Young's claim against the estate, as the amount claimed in the new action would exceed the net value of the estate.
CIV 1436 of 2020 should have been commenced by writ. On 26 May 2020 I ordered that it proceed as if commenced by writ, and ordered the filing of pleadings. All affidavit evidence had already been filed in the family provision action. Accordingly, I later made orders for the family provision action to be heard immediately following CIV 1436 of 2020, with the evidence in each to be received as evidence in both actions, so that one hearing could dispose of all outstanding matters between the parties.

The evidence

Affidavits were filed in the family provision claim.
Action CIV 1436 of 2020, which largely depended on proof of oral agreements, proceeded on oral evidence.

The family provision claim

This matter should have been resolved earlier, and may have been resolved less expensively for the parties had Ms Young filed adequate affidavit evidence in support of her claim. The fault did not all lie with Ms Young: she was, unnecessarily, required to prove her status as Mr Jones' de facto.
The first affidavit filed in support of the application was sworn by Ms Young's solicitor Dara Singh, and dated 22 February 2018. The affidavit appended the grant of probate of Mr Jones' will.
On 10 May 2019, Ms Young was ordered to file an affidavit setting out the basis of her claim within 42 days.
On 28 June 2019, Ms Young was ordered to file a statement of her assets and liabilities, income and expenditure, by not later than 19 July 2019.
Ms Young did not file the statement until 2 August 2019.
On 18 September 2019, Ms Young was ordered to file any further affidavit in support of her claim by no later than 2 October 2019. Ms Young did not file further evidence within the time specified in the order.
On 18 February 2020, after the action had been entered for trial, Ms Young filed a further affidavit sworn by her that day in which she addressed (inadequately) the nature of her relationship with Mr Jones. The content of that affidavit was substantially replaced by her evidence at trial, and the affidavit was not relied on. It was only Ms Young's oral evidence that was sufficient to prove her claim to be Mr Jones' de facto partner.
At trial, Ms Young also produced documents, including bank statements, to substantiate elements of her claim. That information should have been produced much earlier, and there is no apparent reason why it was not.
The Executor filed, and was cross‑examined on, an affidavit of assets and liabilities of the estate, sworn 23 March 2020.[6]
[6] Exhibit 15.
The Executor filed and relied on the following affidavits:
(1)Francis William Cullen, Ms Young's former husband, sworn 11 May 2020.[7]
(2)Devranee Jones, the former wife of Mr Jones, sworn 22 May 2020.[8]
(3)Kirsty-Ann Jones, the daughter of Mr Jones, sworn 22 May 2020.[9]
(4)David Lee Jones, the son of Mr Jones, sworn 22 May 2020.[10]
[7] Exhibit 14.
[8] Exhibit 16.
[9] Exhibit 17.
[10] Exhibit 18.
Ms Young, Mrs Devranee Jones and the Executor were cross‑examined at trial. David Jones gave very brief supplementary evidence.

CIV 1436 of 2020

Evidence was given orally by Ms Young, and she was cross‑examined. A large part of her evidence related also to her family provision claim, and was received also in that action.
The cross‑examination of Ms Young was limited, and much of her evidence was unchallenged.
On matters relating to her relationship with Mr Jones, Ms Young's oral evidence was consistent with surrounding circumstances proved by contemporaneous documents (such as leases of property in which she and Mr Jones lived, and the application for the loan to purchase the Warnbro Property). Her claim about the nature of her relationship with Mr Jones was believable and I was satisfied it was proved.
As I set out later in these reasons, I did not accept Ms Young's case about her agreement with Mr Jones regarding the Warnbro loan and mortgage. Her evidence was credible, but the account she gave was not consistent with the making of a legally binding agreement.

The documents

Counsel for Ms Young produced a bundle of documents at trial, some of which was admitted into evidence as exhibit 6. I will refer to the documents in the bundle by their page number (for example, the first document admitted was exhibit 6, 33).
Counsel for Ms Young also tendered documents updating and supplementing those in the bundle, including bank statements and salary information.

The will

Mr Jones made the following gifts by his will:
(1)$10,000 to his half-brother Samuel William Martin. Mr Martin is the fourth defendant in the family provision action as a beneficiary;
(2)$10,000 to his brother Ian Jones ‑ while named as the fifth defendant, Mr Jones was not served with the proceedings;
(3)a property at Lot 36 Allenby Road in Kendenup to his son David Lee Jones;
(4)a property at Lot 124 Fifth Avenue in Kendenup to his daughter Kirsty-Ann Jones;
(5)$5,000 to each of the sixth and seventh defendants, both charities;[11] and
(6)any residuary estate was given to his two children.
[11] The sixth defendant entered an appearance but abided the decision of the court.
Mr Jones requested that, should his death occur before his children reached the age of 21, his trustee hold their inheritances in trust until they reach that age.
Mr Jones also made specific gifts to his children of 'banknote albums', his tools, all copper and silver bullion, and some Bank of Queensland shares in their names.
To Ms Young, he left 'my 50% share' of the Warnbro Property, on provision that she still resided there, with the property to be sold on her death and his share distributed to three named charities.

The estate

Mr Jones' means were relatively modest.
A draft statement of assets and liabilities prepared by the Executor, pursuant to the Non-Contentious Probate Rules 1964 (WA),[12] disclosed that, at the date of his death, Mr Jones owned two properties in Kendenup and another in Nungarin.[13] The combined value of immovable property at the date of his death was $267,500, of which $150,000 was attributed to the two Kendenup properties. Approximately $120,000 was secured against the Kendenup properties.
[12] Exhibit 6, 108. The draft statement admitted into evidence differed from the statement filed by Mr Martin in the application for probate. The statement filed in probate was not tendered. The differences, however, are not major and do not affect the result.
[13] The property is sometimes referred to in the documents as in Talgomine.
The most valuable asset in moveable property was Mr Jones' superannuation (approximately $212,629). Following a dispute about the proposed distribution of Mr Jones' superannuation and insurance death benefits, those benefits were distributed to Ms Young and Mr Jones' children pursuant to an agreement between them in December 2017, and did not form part of the estate.
The statement also listed a 'loan protection policy', covering a personal loan.[14] The value of Mr Jones' other personal property was less than $20,000. Some of the personal property was retained by Ms Young.
[14] The policy was not later included in his assets, while the loan remained.
The statement of assets did not include any bank note albums or bullion.
On 30 March 2020, the Executor filed an affidavit, sworn 23 March 2020, in the family provision action with an updated statement of assets and liabilities.[15] The net value of the estate, excluding the value of household effects and personal items retained by Ms Young, was then estimated at $90,840.08.[16]
[15] Exhibit 15.
[16] The statement included personal effects and household chattels (valued at $4,000), which Ms Young retained. If Ms Young was entitled to them as joint property, the value of the estate decreases accordingly.
The updated statement listed total assets as at March 2020 of $251,067.37 comprising:
(1)moveable property of $132,067.37, most of which was in an estate bank account ($124,910.47), and included the proceeds of the sale of the Nungarin property, and amounts held in trust by the solicitors for the Executor;
(2)immoveable property, being two properties in Kendenup, with estimated values at 9 July 2019 of $19,000 and $100,000.
The total liabilities, including contingent liabilities, were $160,227.29, and included:
(1)mortgages over the Kendenup properties ($86,493.87);
(2)ANZ personal loan of $23,761.62;
(3)the loan claimed by Ms Young (and now claimed in CIV 1436 of 2020) of $17,500;
(4)contingent liabilities to the solicitors acting for the Executor, for unbilled work in progress, and executor's commission.

The issues

Preliminary issue

The nature of the relationship between Mr Jones and Ms Young is common to both actions.
In the family provision claim, Ms Young must prove that she was the de facto partner of Mr Jones immediately before his death. Their relationship is also relevant in CIV 1436 of 2020, and the evidence about any agreements between Mr Jones and Ms Young must be considered in the context of that relationship.
It cannot be disputed that Mr Jones and Ms Young were in a relationship. Given the variety of personal relationships, including those which can properly be described as de facto relationships, it is important to determine the nature of their particular relationship with as much precision as the evidence permits. In particular, it is important to determine the state of affairs between them with regard to ownership of property and financial matters.
Ms Young had been named as the defendant to the action to prove Mr Jones' informal will on the assumption that she was the de facto partner at the date of Mr Jones' death. Whether the relationship was a de facto relationship was not in issue, and was not determined, in that action. It is, however, indicative of the reputation and public aspects of their relationship that Ms Young was so named.
Because the earlier action had proceeded on the assumption that they were de facto partners, I permitted Ms Young to adduce further evidence addressing the issue, despite her failure to comply with pre‑trial directions.
The Family Provision Act does not define a 'de facto' relationship. Its definition for the purposes of any written law is found in s 13A of the Interpretation Act 1984 (WA), which provides:
(1)A reference in a written law to a de facto relationship shall be construed as a reference to a relationship (other than a legal marriage) between 2 persons who live together in a marriage‑like relationship.
(2)The following factors are indicators of whether or not a de facto relationship exists between 2 persons, but are not essential ‑
(a)the length of the relationship between them;
(b)whether the 2 persons have resided together;
(c)the nature and extent of common residence;
(d)whether there is, or has been, a sexual relationship between them;
(e)the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(f)the ownership, use and acquisition of their property (including property they own individually);
(g)the degree of mutual commitment by them to a shared life;
(h)whether they care for and support children;
(i)the reputation, and public aspects, of the relationship between them.
…
What is meant by a 'marriage‑like relationship' - applying s 13A in the context of pt 5A of the Family Court Act 1997 (WA) ‑ was considered by the Court of Appeal in H v P.[17] Murphy JA (Pullin and Buss JJA agreeing) said, 'although there may be a number of factors which suggest that a relationship is "in the nature of marriage" or "marriage‑like", in the end, what is required is an overall assessment of the facts and of all the relevant elements of the relationship'.[18]
[17] H v P [2011] WASCA 78.
[18] H v P [55], see also G v O [2018] WASCA 211; (2018) 53 WAR 393; (2018) 369 ALR 346 [49] - [52], [59].
In G v O, in the same context, the court said:
… But, putting aside the formal legal requirements and incidents, the essence of the constitutional concept of marriage is of a consensual union between natural persons which is intended to endure. In the case of a marriage, the common intention to have an enduring relationship is manifested by a formal declaration or vow. In the case of a 'marriage‑like' relationship the intention need not be, and will not usually be, formally declared, but rather may be otherwise manifested in the words and conduct of the parties to the relationship.
Consistently with the idea that a consensual union which is intended to endure is an important aspect of the legal concept of marriage, it has been recognised that the common intention of the parties may be an important factor that primarily determines whether a relationship is 'marriage-like'. It is the common intention of the parties as to what their relationship is to be, and to involve, and as to their respective roles and responsibilities, that primarily determines the nature of that relationship. As was noted by O'Loughlin J in a passage cited with approval in Pelka:[19]
'it is not sufficient to merely note that a couple are sharing accommodation, nor is it sufficient to note that one is financially dependent on the other; it is necessary to delve deeper to find the reasons for those arrangements. Those reasons will be better indicators in determining the correct nature of their relationship.'[20]
[19] Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164, 173; cited in Pelka v Secretary, Department of Family & Community Services [2006] FCA 735 [39].
[20] G v O [57] ‑ [58]. See also MW v The Department of Community Services [2008] HCA 12 [11] ‑ [13].

The analysis in those decisions has been applied in the context of the Family Provision Act in several decisions of this court.[21]
[21] See, for example, Miller v Taylor [2018] WASC 75 (Curthoys J); Scherini v Conwell [2018] WASC 172 (Master Sanderson); Ryan v Zekas [2020] WASC 124 (Hill J).
The onus of proving the existence of a de facto relationship lies with Ms Young, as the person asserting its existence. To be eligible to apply for provision from the estate, pursuant to s 7 of the Family Provision Act, she must show positively that the defining characteristics of such a relationship were in existence immediately before Mr Jones' death.[22]
[22] H v P [58].
At first, Ms Young filed no affidavit evidence that could establish the existence of the relationship she claimed. She addressed the question only in her affidavit sworn on 18 February 2020. The affidavit was light on detail, and subject to the objection that it stated conclusions, without setting out the facts on which the conclusions were based. It was surprising that Ms Young was required to prove the relationship which appears to have been well known to all defendants and previously acknowledged by the Executor.
Ms Young's evidence at trial about the relationship with Mr Jones, including her oral evidence, was convincing.

Findings

Mr Jones and Ms Young lived together for approximately five years, at first in a series of rented homes, and then purchasing the Warnbro Property in joint names. They borrowed to purchase the Warnbro Property and entered into a mortgage to secure the loan for a term of 20 years.
Ms Young and Mr Jones split expenses. She would pay one of the utilities, he would pay the other. Other expenses, including rent in the years before the purchase of the Warnbro Property, and travel, were shared.
Mr Jones and Ms Young each owned real property in his or her own name. Mr Jones purchased the Nungarin property in December 2012, in his own name, for $118,000.[23] He held the Kendenup properties following the property settlement in his former marriage. After the joint purchase of the Warnbro Property, Ms Young purchased an investment property in Baldivis with money from the settlement from her first marriage.
[23] Exhibit 6, 362.
Mr Jones and Ms Young formed a business partnership (trading as Miste Farms) and together entered an agreement by which they leased the Nungarin property to a third party for the period from May 2013 to February 2014.[24] Mr Jones and Ms Young, trading as Miste Farms, held a joint bank account for the business.[25]
[24] Exhibit 6, 69 ‑ 70.
[25] Exhibit 6, 73.
In her statement of assets and liabilities, income and expenses, Ms Young deposed that, at the time of Mr Jones' death, she was receiving $760 a fortnight in rent, and paying $638 a fortnight in loan repayments, as well as rates and insurance, on the Baldivis property.[26] The amounts (other than loan repayments) changed between Mr Jones' death and August 2019. In particular, the rental income decreased substantially. I infer, there being no evidence to the contrary, that the income and expenses on the Baldivis property were Ms Young's separate business during the short period she held it before Mr Jones' death.
[26] Affidavit of Ms Young, sworn 2 August 2019 [7].
There appears to have been no pooling of property, or of income each earned from employment. Ms Young had no formal agreement with Mr Jones about property ownership.
Ms Young and Mr Jones had a sexual relationship, which was exclusive of others.
Each had children from former marriages. When they started living together, Ms Young's children were already adult, Mr Jones' children were still young. His children would visit on school holidays, and Ms Young had a good relationship with them.
Each declared their marital status as 'de facto' on the application for the loan to purchase the Warnbro Property.[27]
[27] Exhibit 6, 263.
Mr Jones introduced Ms Young to the Executor as his partner.[28]
[28] ts 131.
On Mr Jones' death, Ms Young organised the funeral.
Ms Young testified that the decision to purchase the Warnbro Property followed a shared decision that they wanted to spend the rest of their lives together.[29]
[29] ts 67 ‑ 68; 82 ‑ 83.
On all of the evidence, I am satisfied that the relationship between Mr Jones and Ms Young is properly characterised as marriage-like. Their shared life lasted about five years, and ended only on Mr Jones' death. The purchase of the Warnbro Property involved them entering a joint financial commitment, in a loan secured by mortgage for a 20 year term. I am also satisfied that it was motivated by the common intention to have an enduring union. From Ms Young's evidence, and from the terms of Mr Jones' will, it appears neither appreciated the legal consequences of holding property as joint tenants, but that is not material.
The fact that Ms Young and Mr Jones chose to hold separate property is not necessarily inconsistent with them otherwise regarding themselves as in a marriage‑like relationship.

CIV 1436 of 2020

The issues to be determined in CIV 1436 of 2020 are:
Issue 1: Was there an agreement between Mr Jones and Ms Young under which he was obliged to pay half of the mortgage on the Warnbro Property, so that his estate is liable to make those payments.
Issue 2: Did Ms Young advance $17,500 to Mr Jones on or about 14 February 2013. Was it pursuant to a loan agreement, and was it intended to be a legally enforceable loan.
Issue 3: Did Ms Young pay the amount of $1,050.60 to the ANZ Bank, pursuant to her obligations as guarantor for Mr Jones under his personal loan agreement with the Bank. If so, is she entitled to reimbursement of that amount.
Issue 4: Did Ms Young make other payments totalling $441.90 on behalf of the estate for which she is entitled to be reimbursed.

Issue 1

The plaintiff's pleaded case is that:
6.On or around 9 March 2013 and prior to entering into the contract for the purchase of the [Warnbro] Property, the Plaintiff and the Deceased orally agreed as follows:
6.1each of them would contribute half of the purchase price of the Property;
6.2the Plaintiff would pay her half of the purchase price using monies she had received or would be receiving from the proceeds of her divorce property settlement;
6.3the Deceased would pay his share of the purchase price via a bank loan secured by a mortgage of the Property;
6.4the Plaintiff and the Deceased would make a joint application for the bank loan;
6.5the Deceased would be solely responsible for the payment of the bank loan and the liabilities under the mortgage over the Property.
7.Pursuant to the agreement between the Plaintiff and the Deceased, they jointly applied for and successfully obtained a loan of $185,000.00 from Australia and New Zealand Banking Group Limited ('the ANZ Bank Loan').
8.The Deceased used the loan amount towards payment of his agreed half share contribution towards the purchase of the Property.
9.Pursuant to the agreement between the Plaintiff and the Deceased, and for a period from or about April 2013 to or about November 2013 the Deceased solely made all monthly repayments due pursuant to the ANZ Bank loan.[30]
[30] Statement of claim [6] ‑ [9].
Ms Young seeks relief including a declaration that Mr Jones' estate was solely liable to repay the ANZ Bank Loan; an order for the estate to pay to Ms Young all sums that she has paid towards the loan since Mr Jones' death; and an order that the estate pay all remaining sums due on the mortgage. Alternatively, Ms Young sought orders that the estate is liable for half of the outstanding loan.
In the defence, the Executor does not admit pars 6, 7 and 9 and denies par 8.[31]
[31] Defence [4] ‑ [5].
The defence further pleads that if there was an agreement, properly construed, it only operated while Mr Jones was a co-owner of the Warnbro Property; alternatively, there was an implied term to that effect.[32]
[32] Defence [10].
The defence pleads that Ms Young's claim is now barred pursuant to the provisions of the Limitation Act 2005 (WA).[33]
[33] Defence [10(c)] ‑ [11].
The first question is whether Ms Young and Mr Jones made an agreement, and in what terms.
Ms Young's evidence about her agreement with Mr Jones was brief and lacking in detail. Her examination‑in‑chief was as follows:
…we had been renting and Steve just said one day that he wanted to spend the rest of his life with me and he wanted to buy a house because we had been renting, and we wanted to be together. We had planned on being together for the rest of our lives. I said yes. At that time I hadn't had my settlement, but then it came about that I knew I was going to get a settlement so, yes, the discussion came up that I would pay for half the house. I could afford that. But he wanted to be joint with me, share the house with me, pay his half.
So did you say that you ‑ what did you say about how you were going to pay for the property again because that's not very clear?‑‑‑I knew I was going to come into a settlement so I could afford to pay for half ‑ half my house ‑ half our house.
It was then a sort of discussion about who was going to pay how much for the house?‑‑‑No, just half, whatever the price was going to be of the house.
…
And you said you had the money to pay for half of the house. How was the other half going to be paid for?‑‑‑Well, Steve said he would pay his half of the house. He had a good job. I had no doubt he was ‑ he was able to pay for it.
So did Steve have the money to pay his half upfront?‑‑‑No. No.
How was the property bought, then?‑‑‑So we went to the bank and applied for a loan.
Did you have any discussion with Steve before you went to the bank?‑‑‑About what? Going to the bank? Sorry, I missed that.
Yes, about ‑ ‑ ‑?‑‑‑Yes.
About buying the house or going to the bank, yes?‑‑‑Yes. Yes. So we said we would go to the bank and apply for a ‑ a loan.
And how was the ‑ ‑ ‑?‑‑‑(indistinct)
‑ ‑ ‑ loan going to be paid?‑‑‑He ‑ Steve was going to take on the payments himself …[34]
[34] ts 67 ‑ 68.
Shortly later, Ms Young said:
My question is ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ whether at that point in time you had signed any contract or put in any offer to purchase 1 Monterey Crescent, Warnbro?‑‑‑Yes.
Now, when Steve said that he would pay the loan, what was your response?‑‑‑That seemed fair. That's ‑ he wanted ‑ we were going to go halves on the house so ‑ ‑ ‑
Now ‑ ‑ ‑?‑‑‑ ‑ ‑ ‑ suggested that.
‑ ‑ ‑ was there any discussion between you and Steve as to when he should pay the loan from the bank – any date which was agreed that he should pay by such and such a date?‑‑‑No. Just ‑ no. He was just paying ‑ making his fortnightly payments to the end of the loan when the house was paid off.[35]
[35] ts 69.
Ms Young's evidence in cross-examination was:
You received $421,000 part of your divorce settlement ‑ ‑ ‑?‑‑‑That's right.
‑ ‑ ‑ on 8 February. You had that money available to you when you decided to buy the house. Did you ever think of using that money to buy Warnbro?‑‑‑We were going to be together, so we were new partners.
Right, so ‑ ‑ ‑?‑‑‑We wanted to buy something together.
But why didn't ‑ why didn't you use the 421,000?‑‑‑Because Steve wanted to buy a house with me and we were going to be together. We were sharing our lives together, so ‑ ‑ ‑
If you were sharing your lives together, why can't you both be on the title but you pay the purchase price? Why not?‑‑‑Well, because they just all - I pay for all of it and that's not what we wanted. He wanted to pay half his house.
He wanted to pay half?‑‑‑Yes.
Okay?‑‑‑He wanted ‑ buy something with me together.[36]
[36] ts 82 ‑ 83.
That evidence does not permit the court to find with any certainty the terms of any agreement between Mr Jones and Ms Young, other than that Mr Jones said that he would pay half the purchase price of the Warnbro Property.
I take into account that Mr Jones' bank account was nominated as the account from which the mortgage repayments were to be made, and the arrangement for instalments to come from his account continued until his death later that year. That evidence is consistent with there being some arrangement between Mr Jones and Ms Young, but is not sufficient to show the terms of the agreement alleged by Ms Young.
Assuming there was an agreement for Mr Jones to pay the mortgage payments, was it enforceable? In Ermogenous v Greek Orthodox Community, Gaudron, McHugh, Hayne and Callinan JJ said:
… To be a legally enforceable duty there must, of course, be identifiable parties to the arrangement, the terms of the arrangement must be certain, and, unless recorded as a deed, there must generally be real consideration for the agreement. Yet '[t]he circumstances may show that [the parties] did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts'.
Because the inquiry about this last aspect may take account of the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so. Because the search for the 'intention to create contractual relations' requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules.' …[37]
[37] Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 [24] ‑ [25]. (Citations omitted)
When considering the enforceability of the arrangement or agreements, I take into account the evidence about the relationship between Mr Jones and Ms Young. The court should not, however, have recourse to any presumptions arising out of the nature of their social relationship.[38]
[38] See Ashton v Pratt[2015] NSWCA 12; (2014) 88 NSWLR 281 [73].
I have earlier set out the financial aspects of Mr Jones and Ms Young's domestic arrangement: the couple split expenses, including major expenses such as rent; each owned property in his or her own name; Ms Young guaranteed a loan taken out by Mr Jones; they had a business partnership with a separate joint bank account; Ms Young kept the income and expenses on her Baldivis property as her separate business; the parties did not pool income from employment or pool their property.
The Warnbro Property was not an investment property, or a business asset, but was intended to be the couple's home. The loan and mortgage were in joint names; the title was held in joint tenancy.
It is more likely, when one looks at their domestic arrangements and what Ms Young said about what they agreed, that they reached an informal arrangement for the payment of the mortgage. Both of them were working, and Mr Jones was earning sufficient income to pay it. Understandably, the arrangement did not contemplate what would happen should Mr Jones, for any reason, stop paying. It was not that sort of agreement.
I would not uphold the claim in contract.
Although counsel for Ms Young confirmed that Ms Young's case was based on the agreement, he appeared at times to put her case also on the alternative basis that the loan provided for Mr Jones and Ms Young to have joint and several liability to the ANZ Bank for the full amount of the facility.[39] In continuing to repay the loan, so as to avoid default and enforcement of the mortgage, Ms Young continued to discharge that liability. The estate benefited from her payment of the loan, it being a liability of the estate, and it would be unconscionable for the estate to retain that benefit.
[39] Exhibit 6, 286.
There is some uncertainty in the authorities about the foundation for such a claim for contribution. Is the action on an implied contract; or is the claim in restitution based on the common obligation to repay the bank so that Mr Jones and Ms Young should, as between themselves, contribute proportionately in satisfaction of that obligation.
I am not satisfied that the circumstances of this case give rise to an implied contract. I have found the claim for an express contract has failed. The same factual considerations that led to that conclusion, including that there was no intention to create legal relations, point against any implied agreement.
In my opinion, equitable principles would not require the estate to discharge the obligation of Mr Jones to pay the mortgage where it relates to property which is not part of the estate. It might have been different were the estate claiming a benefit from the payments made by Ms Young (for example, had the parties held the Warnbro Property as tenants in common). In that case, contribution would prevent the injustice that would otherwise flow to Ms Young by the estate being enriched at her expense, where she and Mr Jones had a common obligation to meet the liability which she alone now must meet.[40]
[40] See Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282 [14] ‑ [15]; [38] - [46].
In any event, that was not the case pleaded.

Issue 2

The pleaded case is that:
12.On 14 February 2013 and at the Defendant's oral request, the Plaintiff lent the Deceased the sum of $17,500.00 to enable the Deceased to pay off some of his debts.
13.No date was set by the Plaintiff and Deceased for repayment of the [loan] amount of $17,500.
14.The Defendant has not paid the said sum of $17,500.00 to the Plaintiff despite demand made on her behalf by her solicitors.[41]
[41] Statement of claim [12] ‑ [14].
The Executor does not admit par 12. Further, the Executor pleads that the remedy sought was barred under the Limitation Act 2005. The Executor pleads that demand for repayment was made on 6 December 2013 and 12 March 2014, more than six years before the issue of the originating summons.[42]
[42] Defence [7], [11].
Ms Young has proved the advance was made, with proof of the withdrawal of $17,500 by bank cheque from her bank account at the time of the claimed advance.[43]
[43] Exhibit 1.
The only evidence of the terms on which the money was advanced to Mr Jones is in the oral evidence of Ms Young where she said:
… We had a discussion one afternoon regarding Steve's finances, and he was quite distressed about that. He just had bills, debts from his previous ‑ his divorce and other ‑ other debts. So I offered to lend him the money and he just came up with this figure.
… So I lent Stephen Jones seventeen and a half thousand dollars on the proviso he would pay me back but no time was set when he would pay me back.[44]
[44] ts 59.
The evidence lacks detail, but it is sufficient to satisfy me that Ms Young offered to, and did, lend money to Mr Jones. The relationship between them is not inconsistent with an intention that the advance was a loan and not a gift. If it was a loan, absent any other agreement, it was repayable on demand.
The limitation point relied on by the Executor is without substance. By s 59 of the Limitation Act, a cause of action for a debt repayable on demand accrues when there is a failure to comply with a demand for repayment. The correspondence on which the Executor relies gave notice of the debt for the purposes of the administration of the estate,[45] but was not a demand for repayment.
[45] Exhibit 6, 80.
The claim for the $17,500 debt will be upheld.

Issue 3

Ms Young pleads that she made a payment, for which she seeks reimbursement of
the sum of $1,050.60 paid by her to the Australian New Zealand Banking Group Limited on behalf of the Deceased's estate towards an instalment payment due from the Deceased to the said bank, towards repayment of a loan taken by the Deceased from the bank to purchase a farm in Talgomine/Nungarin, Western Australia, repayment of which was guaranteed by the Plaintiff;[46]
[46] Statement of claim [15.1].

The Executor denies that allegation and further pleads that any payments were not authorised by the Executor and are not the responsibility of the estate. In the alternative, the Executor pleads that the claim is now barred pursuant to the Limitation Act.[47]
[47] Defence [9], [12].
The Executor accepted, on the basis of the documents produced by Ms Young at trial,[48] that the payment was made on 6 January 2014.[49] That instalment benefited the estate.
[48] Although only produced at trial, the late provision of evidence by the plaintiff is relevant to the costs issues in this action.
[49] Exhibit 6, 166.
As a matter of general principle, the rights of a surety who has paid, in whole or in part, the debt owed by the principal debtor to the creditor include the right to be indemnified by the principal debtor.[50] Nothing has been advanced to displace the application of that principle in relation to the payment of the loan instalment.
[50] McColl's Wholesale Pty Ltd v State Bank of NSW [1984] 3 NSWLR 365, 376.
The cause of action, being an action for indemnity, accrued when Ms Young suffered harm by being called on to make the payment for which the right of indemnity arises.[51] That is, the cause of action accrued on 6 January 2014, and was barred by the expiry of time before the action was commenced.
[51] Warwick Entertainment Centre Pty Ltd (Recs and Mgrs Apptd) atf The Warwick Entertainment Centre Unit Trust v Silkchime Pty Ltd (Recs and Mgrs Apptd) atf The Silkchime Unit Trust (No 4) [2018] WASC 120 [80].
Ms Young adduced evidence that, on 17 January 2014, she advised the Executor that monthly repayments were due on the Nungarin property, and that she had paid one instalment. She asked where she stood. She was advised, on 20 January 2014, after the payment had been made, that she would be reimbursed for anything paid on behalf of the estate 'once everything gets sorted out'.[52]
[52] Exhibit 6, 352.
Ms Young did not bring her claim on the basis of breach of that separate promise giving rise to a debt repayable on demand. The claim, as pleaded, is statute barred.

Issue 4

Ms Young also claims with regard to the payment of other bills:
15.2the sums of $132.55 and $279.35 respectively paid by the Plaintiff on behalf of the Deceased's estate to the Department of Land Transport on 6 January 2014; and
15.3the sum of $30.00 paid by the Plaintiff on behalf of the Deceased's estate to the Department of Primary Industries and Regional Development in or about October 2016.[53]
[53] Statement of claim [15.2] ‑ [15.3].
The payments to the Department of Land Transport were for the registration of a car and motorcycle owned by Mr Jones. On 3 January 2014, Ms Young asked the Executor if she would be reimbursed if she paid them and was told that she would be.[54]
[54] Exhibit 3.
The payments were made for the benefit of the estate, following the Executor's assurance Ms Young would be reimbursed. In this case, the cause of action did not accrue on the payments being made, the payments being voluntary, but on the failure of the estate to make reimbursement. That breach was after the grant of probate when the Executor had authority to discharge the debts of the estate.
I do not accept the limitation defence and uphold the claim.
The payment of the $30 to the Department of Primary Industry and Regional Development was not pleaded to be pursuant to an agreement but simply a voluntary payment. I do not uphold that claim.

The family provision claim

I have found Ms Young was Mr Jones' de facto partner immediately before his death. Under s 6 of the Family Provision Act, the court, at its discretion, may order that provision be made for her out of the estate of Mr Jones.
On this application, the court is required to carry out a two stage process, summarised by Buss JA in Lemon v Mead.[55]
[55] Lemon v Mead [2017] WASCA 215; (2017) 53 WAR 76 [51] ‑ [56].
First, the court must determine whether the disposition of Mr Jones' estate effected by his will is not such as to make adequate provision from his estate for Ms Young's proper maintenance, support, education or advancement in life. The first stage involves a question which is strictly one of fact, although it involves the exercise of value judgments about what is 'adequate' provision for 'proper' maintenance, support, education or advancement in life.
The question which arises at the first stage must be formulated and determined as at the date of death of Mr Jones, having regard to all material facts that existed at the date of his death, whether Mr Jones knew of them or not, and all material eventualities that might at that date reasonably have been foreseen by Mr Jones.
The second stage involves the exercise of discretion: if the court finds the disposition in the will did not make adequate provision for Ms Young, the court may order that such provision as the court thinks fit be made out of the estate. That discretion is exercised by reference to the circumstances as they exist at the date of the order.
Mr Jones' estate was relatively modest. Although he owned properties in Kendenup, and another in Nungarin, their combined value at the date of his death was $267,500 with approximately $120,000 secured by a mortgage against the Kendenup properties. The largest asset in moveable property was superannuation, which has since been distributed to Ms Young and the Jones children. Other than a 'loan protection policy', covering a personal loan, his combined personal property was valued at less than $20,000. Some of the personal property is retained by Ms Young.
By his will, after specific legacies, Mr Jones gave his remaining estate to his children. The only disposition to Ms Young was of his '50% share' of the Warnbro Property. That was legally ineffective, as Ms Young took the whole of the Warnbro Property through survivorship.
When determining what is 'proper' provision the court must have regard to Ms Young's needs and her capacity to meet them, and also 'the nature, extent and character of the estate and the other demands upon it'.[56]
[56] Pontifical Society for Propagation of Faith v Scales [1962] HCA 19; (1962) 107 CLR 9, 19.
The determination of the questions in s 6 of the Family Provision Act involves scrutiny of Ms Young's requirements that were reasonably foreseeable by Mr Jones, and also 'an examination of the totality of the relationship' between them, including:
(a)any sacrifices made or services given by Ms Young to or for the benefit of Mr Jones;
(b)any contributions she made to building up Mr Jones' estate; and
(c)the conduct of Ms Young and Mr Jones towards each other.[57]
[57] See Lemon v Mead [62] ‑ [63].
There is no evidence that Mr Jones suffered any period of protracted sickness or disability during which Ms Young was required to provide care.
Ms Young kept the Warnbro Property, the home in which they had been living, but it was subject to a mortgage. She had paid half of the purchase price.
Ms Young contributed to Mr Jones acquiring the property at Nungarin, by being guarantor to a personal loan. Ms Young also advanced $17,500 to Mr Jones in February 2013, when he was experiencing financial stress.

Ms Young's assets and resources at the date of death

Ms Young was aged 51 at the date of Mr Jones' death. She was employed as a nurse, earning approximately $55,000 per annum. She has not given evidence of any plans for retirement, but it would have been reasonably foreseeable that Ms Young would not continue working as a nurse indefinitely.
Ms Young had a personal superannuation balance of approximately $29,000.[58]
[58] Exhibit 7.1. It is now just over $90,000 see exhibit 7.2.
Earlier in 2013, Ms Young received a property settlement of approximately $420,000. Part of it was used in the purchase of the Warnbro Property. Ms Young said she used the balance in buying an investment property in Baldivis, and also a car. She had approximately $40,000 in the bank at the time of Mr Jones' death.[59]
[59] ts 83 ‑ 84, 123.
The property in Baldivis was mortgaged, with the income from rent more than covering the mortgage payment. Ms Young was not then contributing to the mortgage payments on the Warnbro Property.
In her affidavit of 2 August 2019, Ms Young said that the Baldivis property was valued at $310,000 at the date of Mr Jones' death, with a mortgage of $225,000. She did not disclose what she paid for it; nor did she disclose any savings. Ms Young also purchased a car, which she valued at $30,000. She had $40,000 in her bank account.
It would have been reasonably foreseeable that liability for both mortgages could be a significant burden for Ms Young. There is no evidence that Ms Young suffered or suffers from any ill health. But any protracted period of illness or disability could result in financial hardship, requiring Ms Young to sell one of the properties.
Following Mr Jones' death, Ms Young was entitled to the greater part of Mr Jones' superannuation/death benefit payment. She was a creditor of the estate in the amount of $17,500. She was employed. With the $40,000 she had in a bank account and the Baldivis property, the mortgage for which was covered by rent received, Ms Young should have been in a sound financial position. Her statement of assets and liabilities, which did not include the bank account, did not include her superannuation, and included only half the value of the Warnbro Property, gave her a surplus of $140,000. Had she included those amounts, the surplus was more than $365,000.
It was foreseeable that, in addition to her own resources, Ms Young would receive at least part of Mr Jones' superannuation benefit. The payment of the superannuation death benefit provided Ms Young with approximately $150,000.
At the time of his death, Mr Jones had two financially dependent children, aged 14 and 16. He was paying child support to their mother.
Ms Young was employed and young enough to continue working. She had income from her investment property. Her own resources were then sufficient for her proper support, maintenance and advancement in life, including a buffer for contingencies. I am not satisfied that provision for those matters was required from Mr Jones' estate.
I would dismiss the application under the Family Provision Act.

The current position

Ms Young's financial position has subsequently deteriorated. Her income from rent on the Baldivis property is now $610 a fortnight. She is making a mortgage payment of $600 a fortnight.[60] The bank statements produced at trial show that she is making more than the minimum payment.[61]
[60] Exhibit 11, exhibit 12 and exhibit 13.
[61] Exhibit 11.
At 30 June 2020, Ms Young still owed $198,383.93 on the Baldivis loan.
Ms Young pays $620 a fortnight on the Warnbro loan.[62]
[62] Exhibit 12.
Ms Young's salary does not currently cover her liabilities. A significant element of her current financial position is her liability for legal fees from this and related litigation.
In the seven years from Mr Jones' death, the Executor has been unable to distribute the estate due to ongoing litigation. The modest estate is now depleted by costs and ongoing payments. The cash available after repayment of the personal loan, repayment of the loan to Ms Young, and payment of legal fees and any executor's commission, is not likely to be sufficient to discharge the mortgages on the Kendenup properties. It is not possible to even 'guestimate' how long it would take to sell the properties and what price they would achieve.

Result

Ms Young has been successful with regard to the debt of $17,500, and reimbursement of the sums of $132.55 and $279.35 she paid on behalf of the estate to the Department of Land Transport on 6 January 2014. Her claim has otherwise failed.

Final comments

When Mr Jones died, Ms Young lost her partner, but she was in a sound financial position and should have been able to remain so. Her financial security, however, has been decimated by legal costs.
On the figures in her statement of assets and liabilities as at 2 August 2019, but for the litigation which she has pursued, and the legal costs she has incurred, Ms Young would have a surplus of assets of approximately $200,000. Her fortnightly income would exceed her expenses by $300. At 2 August 2019, she owed $88,000 in legal fees, and was paying $1,000 a fortnight in fees. The evidence does not show how much she had already paid or what her current liability is.
Ms Young was seeking payment from an estate with a net value of less than $100,000 ‑ and which depended on the sale of two rural properties, at their estimated values in July 2019, to reach that figure. Before the latest action was even filed, on the best result for Ms Young, she was unlikely to recover all of her legal fees.
I cannot say whether Ms Young was poorly advised, or failed to follow sound advice. Whatever the explanation, the result is the same.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

CG
Associate to the Honourable Justice Allanson

8 DECEMBER 2020

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: YOUNG -v- MARTIN [2020] WASC 442 (S)
CORAM:   ALLANSON J
HEARD:   8 DECEMBER 2020 & ON THE PAPERS
DELIVERED          :   12 FEBRUARY 2021
FILE NO/S:   CIV 1315 of 2018
BETWEEN:   MICHELLE YOUNG
Plaintiff
AND
SAMUEL WILLIAM MARTIN as executor of the estate of STEPHEN ALAN JONES
First Defendant
DAVID LEE JONES beneficiary of the estate STEPHEN ALAN JONES
Second Defendant
KIRSTY-ANN JONES beneficiary of the estate STEPHEN ALAN JONES
Third Defendant
SAMUEL WILLIAM MARTIN beneficiary of the estate STEPHEN ALAN JONES
Fourth Defendant
IAN JONES beneficiary of the estate STEPHEN ALAN JONES
Fifth Defendant
DEPARTMENT OF HEALTH beneficiary of the estate STEPHEN ALAN JONES
Sixth Defendant
RONALD MCDONALD HOUSE CHARITIES beneficiary of the estate STEPHEN ALAN JONES
Seventh Defendant

FILE NO/S: CIV 1436 of 2020
BETWEEN: MICHELLE YOUNG
Plaintiff
AND
SAMUEL WILLIAM MARTIN as executor of the estate of STEPHEN ALAN JONES
Defendant

Catchwords:

Costs - Where plaintiff successful on some of several causes of action - Whether defendant in reality the successful party - Whether conduct of plaintiff disentitles her to costs order - Turns on own facts

Costs - Family provision claim - Where claim heard together with other claims against the estate - Where claim for provision failed - Where defendant unreasonably did not admit plaintiff's standing to make claim - Where court may make such orders as to the costs of any proceedings under the Act as it deems just - Whether just to order that estate pay plaintiff's costs - Whether just that there be no order as to costs

Legislation:

Nil

Result:

Plaintiff pay the defendant's costs of CIV 1436 of 2020 from 3 September 2020
No order as to costs in CIV 1315 of 2018

Category: B

Representation:

CIV 1315 of 2018

Counsel:

Plaintiff	:	D Singh
First Defendant	:	S Macdonald
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Seventh Defendant	:	No appearance

Solicitors:

Plaintiff	:	Friedman Lurie Singh & D'Angelo (Perth)
First Defendant	:	Macdonald Rudder
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Seventh Defendant	:	No appearance

CIV 1436 of 2020

Counsel:

Plaintiff	:	D Singh
Defendant	:	S Macdonald

Solicitors:

Plaintiff	:	Friedman Lurie Singh & D'Angelo (Perth)
Defendant	:	Macdonald Rudder

Case(s) referred to in decision(s):

Frigger v Professional Services of Australia Pty Ltd (No 2) [2011] WASCA 103 (S)
Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72

ALLANSON J:

Title

At the conclusion of the trial, counsel for Ms Young asked for the opportunity to make written submissions on costs. Those submissions were filed, with the decision on costs to be on the papers.
The trial concerned two separate, although related, actions: a claim for family provision from the estate of the late Mr Jones, and a claim against his estate in contract and debt. The family provision claim was dismissed. The claim against the estate was partly successful, but the major claim (which was for more than the value of the estate) failed.

The claim in CIV 1436 of 2020

The costs of and incidental to all proceedings in court are in the discretion of the court: Supreme Court Act 1935 (WA) s 37(1). The discretion must be exercised judicially, but it is otherwise unconfined: see, for example Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [21] ‑ [22], [134]; Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 [24] - [25]. While the discretion to award costs cannot be shackled, and considerations which might guide the exercise of the discretion cannot be rigidly applied, the authorities offer guidance on the proper exercise of the discretion. Consistency in the exercise of judicial discretion is important in the administration of justice. Giving proper consideration to the rules of court and decisions in other cases is an important measure in ensuring consistency.
The general rule in O 66 r 1 of the Rules of the Supreme Court, while it is expressed not to limit the general discretion conferred on the court, is that the court will generally order that the successful party to any action or matter recover his costs: see Northern Territory v Sangare [25].
Order 66 r 1(2) and (3) provide two exceptions to the general rule:
(2)If the Court is of opinion that the conduct of a party either before or after the commencement of the litigation or that a claim by a party for an unreasonably excessive amount has resulted in costs being unnecessarily or unreasonably incurred it may deprive that party of costs wholly or in part, and may further order him to pay the costs of an unsuccessful party either wholly or in part.
(3)Where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increased the costs the Court may order such party to pay the costs of such issue or issues.
Further, O 66 r 2 provides:
In the absence of any special order ‑
(a)where the statement of claim contains more than one cause of action and the plaintiff succeeds on one or more causes of action and the defendant succeeds on another or others, costs shall be allowed to the plaintiff on the cause or causes of action on which he succeeds and to the defendant on that or those on which he succeeds, in the same manner as if separate actions had been brought.
Ms Young was successful in part of her claim against the estate, with judgment in her favour for a debt of $17,500, and reimbursement of the sums of $132.55 and $279.35 she had paid on behalf of the estate.
Despite that limited success, I am satisfied that this is an appropriate case for an order that the plaintiff pay the whole of the costs of the action. Whether a party is successful is to be determined by the reality of the circumstances, by which party has succeeded in the underlying real contest, and is not always revealed merely by reading the orders of the court: Frigger v Professional Services of Australia Pty Ltd (No 2)[2011] WASCA 103 (S) [12]; Oshlack v Richmond River Council[70]. When considering the whole of the claim, it was the defendant who succeeded in reality.
There are other reasons why Ms Young should not be awarded her costs.
First, the action was brought late. Mr Jones died in 2013. Ms Young filed an originating summons commencing the action against the estate on 26 March 2020. The family provision action was already listed for a trial on 20 and 21 April 2020, and had to be adjourned. The estate is small and has been put to unnecessary expense which will be borne, primarily, by Mr Jones' children as the residuary beneficiaries and beneficiaries of the only two assets of value in the estate.

Second, it was a feature of the trial that Ms Young produced bank records that were central to proving her claim only after the trial commenced. In particular, the executor had included the $17,500 debt in the estate's liabilities subject to proof. That claim was established by documents that were produced only at trial.
Third, the other two successful claims were for very small amounts. The evidence to support those claims was also produced late.
Fourth, the major issue at trial was Ms Young's claim for payment of the amount outstanding on the mortgage of a property she purchased jointly with Mr Jones, and which she took as the surviving joint tenant. That amount was not only much larger than the other claims, but greater than the total value of the estate.
Counsel for Ms Young submitted that the claim for the payment of the mortgage was not unreasonable, and that the court found an agreement between her and Mr Jones. The submission misses the point that the court found the plaintiff had not proved an enforceable agreement, giving rise to an enforceable obligation, but rather a domestic arrangement about who was to make the payments on the mortgage.
I have regard to the fact that the defendant did not succeed on the defences pleaded under the Limitation Act 2005 (WA). That is not, in my opinion, sufficient to outweigh the other factors which favour an award of costs against Ms Young. The limitation defences did not affect the length or cost of the trial to any discernible extent.
The two matters were listed for trial together, with CIV 1315 of 2016 to immediately follow CIV 1436 of 2020, and the evidence in each matter to be evidence in the other. In substance, the submissions and evidence in CIV 1436 of 2020 were heard on the first day of trial, although evidence in that case was relevant to the family provision claim, in particular to the proof that Ms Young was Mr Jones' de facto partner.
Attributing cost to one action rather than the other is generally a difficult process where the two matters are managed and tried together and there is an overlap in evidence. But, in this case, the second day of hearing was substantially devoted to the family provision claim.
The defendant proposed orders under which it would pay the plaintiff's costs of CIV 1436 of 2020 up to and including 2 September 2020, insofar as those costs relate to the loans and advances the subject of the judgment, with the plaintiff to pay the defendant's costs with respect to all other matters. The costs of disentangling what is attributable to one part of the claim rather than another would be disproportionate to the amount in issue. The overall justice of the matter would, in my opinion, be met by orders that:
(1)there be no order as to costs up to 2 September 2020;
(2)the plaintiff pay the defendants' costs from and including 3 September 2020, including the first day of trial, on the basis discussed below.
The executor applied for an order for indemnity costs from and including 3 September 2020. The application was based on an offer made by a letter sent by email on 3 September 2020 to pay the sum of $19,600 (being the liquidated amounts claimed plus interest from the date of the commencement of the action) and costs of that portion of the claim, on the basis that it should have been brought in the magistrates court, or costs fixed at $5,000. Alternatively, the defendant offered that the plaintiff could accept the liquidated amount on the basis that she could apply to the court for a costs order for that part of the claim.
The plaintiff did not respond to the letter of offer. The failure by the defendant to respond to correspondence within a reasonable time, if at all, was not confined to this occasion.
The plaintiff submitted that, on the evidence before the parties at 3 September 2020, it was not unreasonable for her to reject the offer (although that does not explain the failure to have the courtesy to reply to it). She did not then have all of the documentary evidence as her subpoena to the ANZ Bank for documents relating to the loan from the bank was not yet returned. The plaintiff further submitted that her claim failed only on the basis that the court could not find, with any certainty, the terms of her agreement with Mr Jones. The defendant had not positively asserted that there was no intention to create legal relations, but had filed a bare denial.
Dealing first with the defence, I find the executor was not in a position to do other than deny the claim as the facts relating to any agreement between Ms Young and Mr Jones were wholly within her knowledge. Ms Young did not provide all documents in support of her claim until the trial had commenced.
The plaintiff's claim did not depend on documents from the ANZ Bank. Her claim depended on her evidence about what she had agreed with Mr Jones. The plaintiff must have known what she was able to say about that agreement and, in my opinion, should have realised that there was no reasonable claim for a legally enforceable agreement.
I am satisfied that the rejection of the defendant's offer was unreasonable. The estate should be fully reimbursed for the costs of defending the claim from when the offer was made.

The claim in CIV 1315 of 2018

Section 14(6) of the Family Provision Act 1972 (WA) provides that the court may make such orders as to the costs of any proceedings under the Act as it deems just. Counsel for Ms Young referred also to authorities to the effect that costs in family provision cases generally depend on the overall justice of the case. I am not sure those authorities add to what s 14(6) requires.
Ms Young sought an order that, notwithstanding that her claim was unsuccessful, she have her costs from the estate. Two matters were advanced in support of that order: first, that her claim was not unreasonable; second, that 'a significant amount of costs' were incurred as a result of the executor's requirement that she prove her status as Mr Jones' de facto partner.
I agree that the claim was not unreasonable. Mr Jones had made no provision in his will for his widow. It was a matter of judgment that the extent of Ms Young's own resources were such that her claim failed.
Ms Young's standing to bring the application under s 7(1) of the Act should have been demonstrated in her first affidavit filed in the proceedings, but that affidavit was completely inadequate. Even when she was later given the opportunity to file further affidavit evidence, it fell short of what was required if her standing was to be proved. Despite those shortcomings in the presentation of her case, there should have been no issue that Ms Young was the de facto wife of Mr Jones. It was a fact well known to the defendants. Had her standing been accepted the matter might have been capable of resolution without trial.
The details of the relationship between Mr Jones and Ms Young were relevant also to the claim against the estate. The costs that were incurred in proving those matters were necessary for that purpose, and I do not believe that the issue of her relationship with Mr Jones added to the overall costs of the trial.
I take into account that the effect of this, and earlier proceedings, has been that the administration of Mr Jones' estate was still not complete, seven years after his death. The value of the estate and its capacity to bear the costs of litigation is limited.
Finally, I believe that I should also take into account that Ms Young's financial position at the time of trial had significantly deteriorated from her position seven years earlier when Mr Jones died. It will be further affected by the costs orders that I intend to make in relation to the second claim against the estate.
In my opinion, the just result is to make no order for costs of the Family Provision Claim.

Orders

The costs orders will be as follows:
CIV 1315 of 2018
1.There be no order as to costs on the plaintiff's application by originating summons made 22 February 2018, pursuant to s 6 of the Family Provision Act.
CIV 1436 of 2020
2.The plaintiff pay the defendant's costs of the action from and including 3 September 2020, including costs reserved on 23 September 2020, and the costs of the first day of trial, such costs to include all costs except insofar as they are of an unreasonable amount or have been unreasonably incurred so that subject to the above exceptions the defendant will be completely indemnified by the plaintiff for his costs.
3.There be no order as to the costs of the action up to and including 2 September 2020.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

MG
Associate to the Honourable Justice Allanson

11 FEBRUARY 2021