Supreme Court New South Wales

• Medium Neutral Citation: Wilcox v Wilcox [2012] NSWSC 1138
• Hearing dates: 8 and 9 October 2012
• Decision date: 12 October 2012
• Jurisdiction: Equity Division - Expedition List
• Before: Pembroke J

Decision

See paragraph [29]

• Catchwords: EQUITY - estoppel - need for clear and unambiguous representations; EVIDENCE - proof of uncorroborated statements attributable to deceased person - need for caution and scrutiny; WILLS AND ESTATES - family provision order - entitlement of grandchildren - absent special circumstances, generosity by grandparent including payment of school fees does not give grandchildren entitlement to share of estate; WILLS AND ESTATES - adequate provision for proper maintenance, education or advancement in life - necessity for evidence to enable evaluative process to be undertaken - need to consider position of defendant; WILLS AND ESTATES - family provision order - continuing importance of freedom of testamentary disposition
• Legislation Cited: Succession Act 2006
• Cases Cited: Ashton v Pratt (No 2) [2012] NSWSC 3; Bowditch v NSW Trustee & Guardian [2012] NSWSC 275; Churton v Christian [1988] NSWCA 23; (1988) 13 NSWLR 241; Goodsell v Wellington [2011] NSWSC 1232; Legione v Hately [1983] HCA 11; (1983) 152 CLR 406; Madden-Smith v Madden [2012] NSWSC 146; Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24; Re Fulop Deceased (1987) 8 NSWLR 679; Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201; Summer Hill Business Estate v Equititrust [2010] NSWSC 776; Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191; Watson v Foxman (1995) 49 NSWLR 315
• Category: Principal judgment
• Parties: Robert William Wilcox - first plaintiff; Benjamin Ian Alexander Wilcox - second plaintiff; Patricia Anne Wilcox - defendant
• Representation: Counsel: J L Glissan QC with D H Nagle - for the first and second plaintiffs; B J Skinner - for the defendant; Solicitors: Pryor Tzannes & Wallis - for the first and second plaintiffs; Newhams Solicitors - for the defendant
• File Number(s): 2010/426690

Judgment

Introduction

1 The plaintiffs are the only grandsons of the testator, who owned, controlled and operated considerable pastoral holdings near Walgett in New South Wales. By his last will, he left his entire estate to his only daughter (the defendant). He did so in anticipation that she would in turn leave the properties to the plaintiffs when she died and that they would in the fullness of time come into the agricultural inheritance which he had built up in his lifetime.

2 Within the family group, the testator was a dominant and powerful influence, upon whom the plaintiffs and their parents were all partly dependent. He acted as a father figure to the plaintiffs, especially after their parents separated in 1992 and their father went to live in Lightning Ridge. He paid for the boys' education at The King's School. He provided them with paid work and accommodation on his properties. He shaped and directed their lives after school and, to a considerable extent, groomed them for what he expected would be their eventual inheritance.

3 In the case of the first plaintiff, Robert, the elder grandson, the testator also paid for him to attend Longreach Pastoral College as well as for his travel, clothing and miscellaneous expenses associated with his attendance at the college. In the case of both young men, he encouraged them in the expectation that they would inherit the properties. In the circumstances in which they were brought up, the plaintiffs understandably developed an unhealthy sense of entitlement.

4 But there were no promises and there was no agreement. The testator's intention was made objectively clear by the wills executed by him in 1987 and 2002. In both wills, he left his entire estate to the defendant and provided for the properties to go to the plaintiffs only if his daughter pre-deceased him. He trusted the defendant to provide for her sons. I am quite satisfied that he assumed that the plaintiffs would in due course inherit the properties through his daughter's estate. A different outcome would not have occurred to him.

5 This then was the context in which the testator made statements from time to time encouraging the plaintiffs' expectations. He never intended to leave the properties directly to them while ever his daughter was alive and well, living on the properties and operating them. Unfortunately the plaintiffs have deluded themselves into thinking that this was their right. Their predicament has now been grimly exacerbated. When they made the fateful decision to commence these proceedings, suing their mother as the executor of their grandfather's estate and claiming that they were entitled to the entirety of his property - to the exclusion of their mother - they produced an outcome which the testator would not have anticipated. Affronted by their conduct, she made the decision to leave her sons out of her own will, so that, absent a court order, or a change of heart by her, the plaintiffs will now never receive the inheritance to which they have long aspired.

Legal Issues

6 Against this broad outline, three legal issues arise for determination. Was there a legally binding agreement entered into between the testator and the plaintiffs? Did the testator make clear and unequivocal representations to the plaintiffs as to their inheritance from him, in reliance on which they acted to their detriment, so as to give rise to an estoppel? Are the plaintiffs entitled to a family provision order pursuant to Section 59 of the Succession Act 2006? The answer to the first issue is "No" - indeed senior counsel for the plaintiffs did not to press this submission. The answer to the second issue is "No". And the answer to the third issue is "Yes". It is however not possible to determine what is an appropriate family provision order without further evidence and a further hearing. I need not deal with the "agreement" contention. However, my conclusion on the second and third issues requires explanation.

Clear & Unequivocal Representations

7 The plaintiffs' evidence as to what was said by their grandfather never rose high enough to establish an estoppel. It was never clear and unambiguous: Legione v Hately [1983] HCA 11; (1983) 152 CLR 406 at 435-437; Summer Hill Business Estate v Equititrust [2010] NSWSC 776 at [42]. Taken at its highest, it consisted of assertions that from time to time the testator said words to the effect that "you and your brother will be taking it over when I pass on" or "when I'm not here, you're going to have to run the place and look after your mother" or "that is something that you and your brother are going to have to deal with when you own the property" or "don't worry, you'll get it back when I die, you and Robbie are going to get the place and look after your mother" or "I'm leaving the place to you boys to carry on and for you to look after your mother" or "this will be all yours one day" or "I want you boys to get married and carry the place on like it should be".

8 Not surprisingly, as the cross-examination of each of the plaintiffs went on, the number and frequency of the testator's supposed representations increased, whether mentioned in affidavits or not. But their quality and clarity did not. The evidence was never sufficiently clear or convincing. And it always faced the obstacle that what was attributed to the testator was inconsistent with the intention revealed by his own wills. The true complexion of what was said by the testator was that, on his death, he hoped and expected that his grandsons would help their mother in the running of the properties, and that he expected that they would inevitably inherit the properties from her. The statements made by the testator were no more than expressions of present expectation or prediction, not promises. In my view, reasonable persons in the position of the plaintiffs would not have understood them otherwise.

9 Two well-recognised principles fortify me, if fortification were needed, in rejecting the evidence on which the plaintiffs rely for their estoppel case. First, it is a matter of ordinary human experience that where a party relies on the uncorroborated recollection of statements made many years ago, on an issue in which that party has a self-interest, the evidence must be treated with caution. In the absence of some reliable contemporaneous record or other satisfactory corroboration, it is often difficult for such evidence to achieve the requisite level of reasonable satisfaction. The most well-known statement of this principle is by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319:

Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed.

10 Second, the need for caution is even greater in relation to uncorroborated statements attributed to a deceased person where the deceased is, or would have been, the only person in the world capable of rebutting the accuracy of what is attributed to him or her. Here again, self-interest is an important factor reinforcing the need for caution and sometimes scepticism. A recent statement of this principle was made by Brereton J in Ashton v Pratt (No 2) [2012] NSWSC 3 at [18]:

In the case of a claim against a deceased estate founded on the oral utterances of the deceased, which only the deceased could have denied, the court scrutinises the claimant's evidence closely (Plunkett v Ball (1915) 19 CLR 544 at 548-549 (Isaacs J); Bovaird v Frost [2009] NSWSC 337, [45]; Varma v Varma [2010] NSWSC 786, [418]-[422]), and although there is no absolute legal requirement for it, ordinarily looks for some corroboration (Re Hodgson (1886) 31 Ch D 177; Weeks v Hrubala [2008] NSWSC 162, [20] (Young CJ in Eq)).

11 In addition to those matters, I have no hesitation in saying that each of the plaintiffs was an unimpressive witness on whose evidence I did not feel it prudent to act unless it was corroborated or contrary to their interest. Both were defensive rather than frank and open. Both were fixated on their supposed right to their grandfather's agricultural properties. Both sought to use the opportunity of giving evidence to advance their perceived interests in the litigation rather than by giving a fair account of the relevant facts. Robert, the first plaintiff, was particularly vindictive towards his mother and her partner. And Ben, the second plaintiff, was not forthcoming about the damages claim to which he has become entitled as a result of a motor vehicle accident. Their adversarial approach was in marked contrast to the dignity displayed by their mother and the frank and direct answers which she gave to questions.

Family Provision Order

12 However, the fact that I do not regard the plaintiffs as impressive witnesses does not mean that they should be denied the benefit of a family provision order pursuant to the Succession Act - if the statutory criteria are otherwise satisfied. Precisely what order is appropriate is a different question however, about which I will have something further to say. Before dealing with the application of the statutory criteria in this case, I should make some preliminary remarks about the entitlement of grandchildren to a share in a grandparent's estate.

13 It should be understood that the position under our law is that grandchildren have no claim as of right to the beneficence of grandparents. And as a general rule, a grandparent has no responsibility to make provision for a grandchild. Nor should it be assumed that generosity by a grandparent to a grandchild, including by the payment of school fees, automatically converts the relationship into one of obligation to provide for the grandchild on the death of the grandparent. Indeed, absent special circumstances, such generosity ordinarily has no effect in law other than to leave the grandchild with a life-long moral debt to the memory of his or her grandparents.

14 But there may be special circumstances that entitle a grandchild to make a claim on the estate of a grandparent - something which is recognised in the Succession Act. Section 57(1)(e) provides that a grandchild "who was, at any particular time, wholly or partly dependent on the deceased", is an eligible person who may apply to the Court for a family provision order out of the estate of the deceased. A number of illustrations of the principles and limitations governing claims by grandchildren are set out in Bowditch v NSW Trustee & Guardian [2012] NSWSC 275 at [113]. I need not repeat them.

15 In this particular case, there are special circumstances and I am satisfied that the plaintiffs are eligible persons within the meaning of Section 57(1)(e). During their lives, they were at least partly dependent on the testator. They were brought up on an aggregated series of pastoral properties comprising about 50,000 acres that were stocked, operated and managed by the testator as one large property. He made the decisions, kept the accounts and wrote the cheques. His attitude to his daughter was old-fashioned. Although she was a shareholder in some of the pastoral companies controlled by him, he did not allow her to take part in the agricultural enterprise. He treated it as his own. The family's prosperity depended on the choices he made. In a practical sense, the family was captive to him. And as I have already said, he was dominant and powerful. The family, including the boys, looked to him for leadership. When there were no funds to pay for the boys' secondary education, he paid the school fees. When they needed gainful employment and agricultural experience, he provided work and income for them. He corresponded with them and counselled them. And of course from late 1992, the boys' father had left the family home. I am satisfied that the plaintiffs are eligible persons.

16 It remains necessary however to demonstrate that "having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the application": Section 59(1)(b). No legislative assistance is given as to the intended scope or meaning of this enigmatic requirement. However the explanation given by McLelland J in Re Fulop Deceased (1987) 8 NSWLR 679 at 681 is generally accepted and I propose to act on it. It is readily satisfied on the facts of this case. I will deal more fully with the plaintiffs' circumstances later, but both are penurious and have not made a success of their lives. Robert, the first plaintiff, said that he was living in a garage and sleeping in a swag. Given the circumstances of their relationship with their grandfather, and their current circumstances, most observers would regard the plaintiffs as natural objects of the testator's testamentary recognition: Churton v Christian [1988] NSWCA 23; (1988) 13 NSWLR 241 at 251 (Priestley JA). I am satisfied that there are factors which warrant the making of the application.

Adequate Provision for Proper Maintenance

17 That then leads me to the application of the test in Section 59(1)(c). The statutory question is whether, by the testator's will, "adequate provision for the proper maintenance, education or advancement in life" has been made for the plaintiffs. This is a value-laden question which necessarily requires consideration, not merely of the circumstances and financial needs of the plaintiffs, but also of the interests of the defendant, upon whom the burden of an order will fall: Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 at 199-200.

18 As far as the plaintiffs are concerned, there are two broad questions. What should be regarded as proper maintenance, support, education or advancement in life for each them? And what kind of provision should be regarded as adequate for that purpose? Both questions must be addressed having regard to the relativities, in particular, the effect of an order on their mother. Underlying the minutiae of these fine distinctions, is a moral concept which will be readily comprehensible to the lay person: What provision would a wise and just testator have thought it his or her moral duty to make in the interests of the claimant had he or she been fully aware of all the relevant circumstances? See Vigolo v Bostin at [15]-[25]; Bosch v Perpetual Trustee Co (Ltd) [1938] AC 463 at 479; Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24 at 46; Goodsell v Wellington [2011] NSWSC 1232 at [108]; Madden-Smith v Madden [2012] NSWSC 146 at [36].

19 I have to say that the precise resolution of the question in this case is not immediately obvious. And it has not been assisted by the presentation of the plaintiffs' case or the poverty and paucity of the evidence that was adduced. The necessary evaluative process was, I think, lost sight of by the plaintiffs and their legal advisors, who conducted the litigation until the second day of the hearing, as if their only claim, and corresponding entitlement, were to the whole of the testator's estate. There was no considered evidentiary analysis of the plaintiffs' ongoing financial needs; no attempt to resolve what should be regarded as "adequate provision" for the "proper maintenance, support, education or advancement in life" for each of them; no consideration of alternatives other than receiving some or all of the testator's pastoral properties; and no proper consideration of the position of their mother.

20 In fact, until the second day of the hearing, the plaintiffs' single minded focus on their perceived right to the entirety of the testator's properties, wholly ignored the position of the defendant. She has lived on the land all her life. Since about 2002, she has, together with her partner, effectively operated and managed the grazing enterprise and derived her income and livelihood from it. She knows nothing else.

21 In contrast, to take Robert, the first plaintiff, as an example, he has had no involvement with agriculture whatsoever since 2001 and has not lived on the properties at Walgett since 1992. He has not set foot on the property known as "Allawa", where his grandfather resided, since 2004. He is now 43 years of age, unemployed and has virtually no assets. He is currently receiving unspecified compensation for a rib injury incurred while undertaking tree lopping work. The position of Ben, the 37 year old younger brother, is even less promising. He also has virtually no assets, no employment and is physically handicapped as a result of a motor vehicle accident. His continuing disabilities include, among others, mild brain damage, severe headaches, some speech impairment and inability to walk properly. He requires assistance with dressing. As I have mentioned, he receives a disability pension.

22 Robert, the first plaintiff, made clear in his evidence that the plaintiffs not only claimed everything from the testator's estate, but had given virtually no consideration to what should happen to their mother:

Q Your case as pleaded is that you and your brother should inherit your grandfather's entire estate, is that correct?

A Yes

Q And your mother should get what?

A Whatever she likes. Pension. Trust.

23 I reiterate that the process that must be undertaken in a case such as this is an evaluative process. It necessarily involves consideration of the relativities. That process is driven by the statutory criteria. The court does not simply ride roughshod over the testator's intentions. I have no mandate to re-write the will with a broad brush. The court's power to make an award is limited. The purpose of the discretionary power under Section 59(1) is to redress circumstances where "adequate provision" has not been made for the "proper maintenance, education or advancement in life" of the claimant. The adjectives "adequate" and "proper" are words of circumspection. They imply no more than is necessary. I should ensure that "adequate provision", rather than generous provision, is made, having regard to the burden on the defendant.

24 And I should respect the testator's freedom of testamentary disposition, only interfering with it to the extent rendered necessary by the application of the statutory language to the particular circumstances. I repeat and adopt the following observations about the continuing importance of freedom of testamentary disposition that I explained in Madden-Smith v Madden at [30]-[31]:

30 It is useful, I think, not to lose sight of the fact that freedom of testamentary disposition remains a foundational principle in our system of law. In Vigolo v Bostin (2005) 221 CLR 191, Gleeson CJ pointed out that the relevant legislation did not confer new rights of succession and did not create legal rights of inheritance. Rather, his Honour explained, 'It preserved freedom of testamentary disposition, but subjected that freedom to a new qualification': [10] Hallen AsJ expressed the same point when he said recently in Goodsell v Wellington [2011] NSWSC 1232 at [108] that:

Freedom of testamentary disposition remains a prominent feature of the Australian legal system. Its significance is both practical and symbolic and should not be underestimated.

31 And many years ago Sir Owen Dixon said in Pontifical Society for the Propagation of the Faith v Scales (1961-2) 107 CLR 9 at 19 that it was never intended by the legislation that 'freedom of testamentary disposition should be so encroached upon that a testator's decision expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court'.

The New Claim

25 On the second day of the hearing, the plaintiffs confined their claim to three specified properties out of the nine properties that make up the aggregated holdings on which the defendant and her partner conduct the grazing operations formerly undertaken by the testator. The value of the three properties was said to be almost $3 million. But I was given no information as to whether those three properties would be viable in their own right or what effect the excision of those properties would have on economic soundness of the remaining properties that would be left with the defendant. There was no evidence about their separate production capacity or income potential or any attempt to demonstrate that the subdivision proposed by the plaintiffs on the second day of the hearing was sensible, workable and just.

26 Worse than that, there was no attempt to demonstrate how or why an order that the plaintiffs have the three properties known as "Allawa", "Uno" and "part Barwon Vale" represented adequate provision for the plaintiffs' proper maintenance having regard to their unique circumstances, and giving consideration to the position of their mother and the hardship that she will suffer.

27 Further still, there was an assumption in the plaintiffs' case that only the transfer to them of some or all of their grandfather's agricultural properties would do. They did not, and would not, consider a monetary award which might enable them to provide for their future and to purchase a home in Sydney or elsewhere. This must be part of any consideration of what is adequate and proper. I do not rule it out. And I have misgivings about the ability of the plaintiffs, by themselves, to make a success of a grazing enterprise.

28 But on any view, it is not possible for me to make an informed decision in accordance with the statutory criteria and the exposition of principle explained by the High Court of Australia in Vigolo v Bostin and Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, without adequate financial information. Counsel for the defendant is in the same unfortunate position as I am. The "financial needs" of the plaintiffs both present and future represent one of the most important considerations. But I have been left to guess at what they really are. What is the ongoing cost of Ben's disability? What is a realistic assessment of the damages to which he is entitled? What is Robert's prognosis? What are his employment prospects? Most importantly, I have been left in the position of having no means of knowing, and no opportunity of assessing, whether the transfer to the plaintiffs of the three properties of their choice, will achieve the statutory objective, let alone be practical. A wise and just testator would expect nothing less. After all, there is no point setting up the plaintiffs in an agricultural enterprise that is doomed to fail.

Conclusion

29 I have reached the conclusion that the plaintiffs are entitled to a family provision order pursuant to Section 59(1) of the Succession Act. However, before I determine precisely what order should be made, there will need to be a further hearing which addresses the unanswered questions to which I have referred in these reasons. Costs should await the final determination of the proceedings. But the plaintiffs must bear responsibility for the way in which their case has been presented. I stand over the proceedings for further directions before me on 26 October 2012. I encourage the parties to consider compromise or mediation of the sole remaining issue in the proceedings, namely the nature and size of the plaintiffs' entitlement.

Decision last updated: 12 October 2012