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Mulcahy v Mulcahy[2019] QDC 19

 

DISTRICT COURT OF QUEENSLAND

 

CITATION:

Mulcahy v Mulcahy [2019] QDC 19

PARTIES:

CATHERINE MULCAHY
(first applicant)

and

VICTORIA MULCAHY
(second applicant)

and

RUSSELL JOHN MULCAHY
(respondent)

FILE NO/S:

BD4811/2017

DIVISION:

 

PROCEEDING:

Originating application

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

28 February 2019

DELIVERED AT:

Brisbane

HEARING DATE:

13 December 2018

JUDGE:

McGill SC, DCJ

ORDER:

Order that provision be made for the applicant from the estate of the deceased by payment to her of the sum of $80,000. 

CATCHWORDS:

TESTATOR’S FAMILY MAINTENANCE – Application of adult daughter – estate to sibling – small estate – whether need shown – strength of competing claim to bounty – whether disentitling conduct – provision ordered. 

TESTATOR’S FAMILY MAINTENANCE – Compromise of application – whether executor has power to compromise application and pay money from the estate without a court order – payment treated as made by executor as beneficiary.

TESTATOR’S FAMILY MAINTENANCE – Procedure – small estate – directions to limit costs, by limiting length of trial and focussing on essential issues.  

Succession Act 1981 s 41.

Abrahams v Abrahams [2015] QCA 286 – applied.

Affoo v Public Trustee of Queensland [2012] 1 Qd R 408 - followed.

Blair v Blair (2014) 10 VR 69 – cited.

Collett v Knox [2010] QSC 132 – followed.

Re Hatte [1943] St R Qd 1 – cited.

Hughes v National Trustees Executors and Agency Company of Australasia Ltd (1979) 53 ALJR 249 – applied.

Palmer v Dolman [2005] NSWCA 361 – cited.

Re Paulin [1959] VLR 462 – cited.

Singer v Berghouse (1994) 181 CLR 210 – applied.

Steinmetz v Shannon [2018] NSWSC 1090 – not followed.

Stewart v Stewart [2015] QSC 238 – followed.

Vigolo v Bostin (2005) 221 CLR 191 – applied.

Watts v Public Trustee of Queensland [2010] QSC 410 – cited.

COUNSEL:

D. Caruana for the applicant

D.P. Gardiner for the respondent

SOLICITORS:

Butlers Inheritance Lawyers for the applicant

Bradley Munt & Co for the respondent 

  1. [1]
    Lorraine Mulcahy passed away on 21 March 2017, aged 75 years. On 9 August 2017 a grant of probate of her last will, made on 13 March 2014, was made in favour of the respondent, her son.[1]At the date of death she had no spouse; she was survived by three children, the respondent and two daughters, the first applicant and the second applicant.  In the events that happened, the deceased left her entire estate to the respondent.  At the time of her death, the estate consisted only of money in a bank account,[2]primarily the sale proceeds of her former house, which settled shortly before she passed away.  She had not long before this moved into a nursing home.
  1. [2]
    The deceased and her husband separated in 1979, and subsequently divorced, with property and financial matters being resolved between them.[3]The former husband, the father of the applicants and the respondent, passed away in July 2016.  There were proceedings in New South Wales in relation to his estate, which were resolved in July 2017 on the basis that each of the present applicants received an amount of $117,500, while the present respondent received $152,000 net of costs from the estate.[4]
  1. [3]
    This proceeding was commenced by an originating application filed by the present first applicant on 13 December 2017.[5]On 7 February 2018, the second applicant filed a notice of address for service stating that she intended to apply herself for provision out of the estate of her mother.[6]Shortly before the matter came on for trial however the respondent compromised the claim of the second applicant, and at the hearing a notice of discontinuance of the second applicant’s claim, with the consent of the respondent, was filed by leave.  I was told at the hearing that the second applicant’s claim had been compromised for the sum of $50,000, which had been paid out of the estate by the respondent: p 30.

Size of the Estate

  1. [4]
    It is well established that an order for provision out of an estate cannot be made by consent, but requires a judge to make a finding that there has been a failure to make proper provision for the applicant, and then to exercise the discretion to make the order sought.[7]It must follow that an executor does not have power unilaterally to compromise an application for provision under the Succession Act 1981, and to make a payment out of the estate on the authority of that compromise. 
  1. [5]
    If all the beneficiaries and potential beneficiaries of an estate are sui juris they can agree to a resettlement of the property in the estate, although such a resettlement is liable to duty under the Duties Act.[8]That however is not the present situation, since there is no suggestion that the first applicant consented to the diminution of the estate of the deceased in this way.  The position appears to be simply that the respondent has presumed that as executor he had authority to compromise the claim and to make a payment in accordance with that agreement of compromise.  I do not agree that he had that authority.  It would be in my view plainly inconsistent with the decision of the Court of Appeal to which I have referred for a compromise of an application to be made effective by an executor without approaching the court at all. 
  1. [6]
    Notwithstanding the wide powers an executor generally has in relation to claims by and against an estate, the terms of the legislation suggest that once a claim has been made for provision out of the estate an executor cannot validly deal with that claim outside the supervision of the court. It is I think not necessary for me to engage in any particular analysis of the legislation to show this, since for my purposes it is sufficient to say that in my opinion that result necessarily follows from the terms of the decision of the Court of Appeal, binding on me, to which I have referred.
  1. [7]
    It is of course always open to a beneficiary to make a payment personally to an applicant for provision out of the estate, pursuant to an agreement between the applicant and the beneficiary for the applicant in return to abandon the claim for provision. That I consider is the proper characterisation of what has occurred here: the respondent has made a payment as beneficiary out of the money to which he is presumably entitled as beneficiary, on the assumption that no order the court would make would have the effect of diminishing the estate to such an extent as to leave him beneficially with less than the amount he has paid. He is I consider at risk in that respect, but that is a matter for him. For my purposes, this payment should not be characterised as diminishing the amount available in the estate for the purpose of determining whether and what provision should be made in favour of the remaining applicant.
  1. [8]
    Prior to the death of the deceased the respondent held her Enduring Power of Attorney, and was managing her estate. As a result he was the one responsible for selling her house, and dealing with the proceeds. The balance of the sale proceeds of the house was $258,697.51.[9]In his affidavits he provided some information about the extent to which funds in the estate have been diminished since the death of the deceased.  In his affidavit filed 22 May 2018 the respondent said that a total of about $40,000 had been paid from the estate, including a debt to a nursing home, some pharmaceutical expenses, the funeral and associated expenses and legal costs associated with these proceedings, and that the current balance of the account was $210,735.[10]He said the estate had no other liability.[11]
  1. [9]
    The respondent in his second affidavit indicated that the amount paid for the funeral was $6,860, and the amount paid to the nursing home $4,597.26.[12]He also referred to two solicitor’s invoices of 17 April and 31 March 2017, for a total of $3,000, which I suspect were not legal costs associated with this proceeding.  The copies of the solicitor’s invoices, Exhibit I to that affidavit, are innocent of any identification of the nature and content of the work done.  Also exhibited was an account from a pharmacy showing an amount due of $165.19, said to have been paid on 11 May 2017 (Exhibit H) and a further bundle of invoices in relation to legal fees totalling $51,655 paid between January and August 2018: Exhibit K.  In addition there was a fee of $5,500 paid to a mediator, in respect of an unsuccessful mediation of this proceeding in August 2018: Exhibit M. 
  1. [10]
    In para 23 of his second affidavit the respondent said that some legal expenses related to the balance of legal fees arising out of litigation conducted between the applicant and himself with respect to guardianship and other matters relating to the administration of the affairs of the deceased in the period when he acted under the Enduring Power of Attorney: Exhibit L. I consider that these costs related to the personal obligation of the respondent, not to his obligation as executor of the estate of the deceased. Plainly he was not involved in those proceedings in his capacity as executor. I will not take into account monies paid in discharge of the respondent’s personal obligations for legal costs in other proceedings. Otherwise, he offered no explanation for any of the legal fees. There was no statement in any of the invoices as to what the solicitors had actually done, but one dated 16 August 2017 contains a number of disbursements consistent with steps to obtain a grant of probate, and I infer that this invoice, for $8,785.81, was the cost of obtaining the grant of probate.[13]
  1. [11]
    It strikes me as wasteful to have incurred the expense of obtaining a grant of probate. Where the only asset in the estate was money held in a bank account in the name of the respondent, a grant of probate was unnecessary. At the date of death the deceased’s funds had just been transferred by the respondent to an account in his own name.[14]A grant was not necessary to enable this proceeding to take place; it is common for applications for provision out of an estate to be made and to proceed to a conclusion notwithstanding that no grant of probate or letters of administration has been made, if there is no intention to obtain such a grant.[15]Nevertheless, I must take this payment into account in determining the amount in the estate, and cannot draw any inference adverse to the respondent because of it, as this was not raised with the respondent in cross-examination. 
  1. [12]
    The affidavit also referred in para 20 to a payment of $1,425 for a plaque at the Goodna cemetery, which should be taken into account. The respondent in para 22 said he has also transferred $2,000 to himself beneficially to reimburse him for what are said to be out-of-pocket expenses incurred in the administration of the estate. The amount transferred from the bank account of the deceased was $260,110.53,[16]and I take it that that was the amount which remained the next day, the date of death.  After deducting amounts properly paid from the estate since then, $29,333.26,[17]I proceed on the basis that for my purposes the size of the estate is $230,777.27. 
  1. [13]
    I do not propose to deduct anything for the respondent’s costs of this proceeding, for two reasons. First, there was no good evidence as to what those costs are.[18]Second, it is obvious that the respondent’s case has been conducted in a wasteful and inefficient way.[19]The respondent filed four affidavits, including a 71 page affidavit filed two days before the hearing.  When challenged, counsel for the respondent was unable to identify anything in it which was admissible, relevant to anything I needed to decide and not covered by earlier material.  Most of it was personal criticism of the applicant which reads like spiteful hyperbole.  Much of it was hearsay, as was much of the rest of the material filed on behalf of the respondent.[20]As I said at the hearing (p 9), I regard hearsay as inadmissible in these matters and generally disregard it.  I did not allow the last affidavit to be read in the application, although I did refer to part of one paragraph of it when I questioned the respondent: p 35.  Much of the respondent’s material appears to have engaged Rule 700A(2)(b)(iii) or (v); this is a matter for submissions after I publish my reasons.  

Procedure

  1. [14]
    This is obviously a very small estate, and when this matter first came to my attention in the applications list I was concerned that there was a risk that the costs of litigation would exceed the amount of money in the estate, unless the scope of the litigation was strictly confined. What came before me was an application by the second applicant seeking disclosure of various documents, and seeking directions for the conduct of the hearing. Most of the documents sought were disclosed voluntarily in the second affidavit of the respondent. I listed the matter for hearing before myself and gave directions to ensure that the matter did not extend beyond one day. I also made it clear that I was not proposing to reopen conclusions arrived at by QCAT in relation to the respondent’s conduct as holder of an Enduring Power of Attorney for the deceased. In the event, because the second applicant was not involved and the respondent was not cross-examined at length, the matter when it came on for hearing concluded fairly quickly.

Circumstances of first applicant

  1. [15]
    The first applicant was born on 21 October 1957, and is therefore 61 years of age.[21]She is divorced and has no children, nor is she in any relationship which provides any kind of support.[22]The applicant said that when she was growing up her parents lived with her father’s parents, and she was effectively brought up by her paternal grandmother.[23]In 1960 they moved into other premises, and in 1974 the applicant left home and travelled for a few years.[24]After her parents separated in 1979, the applicant had a good deal of contact with the deceased, including helping her locate suitable accommodation and move into it.[25]At one stage, they spent two months together in Perth.[26]From October 1990 to mid-1997 and from November 2006 to March 2014 the applicant was living and working in Cairns, where at one time she owned a florist business.[27]Since the deceased was living in Brisbane during this period, this reduced the extent to which they could have contact.  Nevertheless she claims in some detail in her affidavits that most of the time there was the sort of contact which could occur in these circumstances, and that for most of the time a good relationship existed between them. 
  1. [16]
    The applicant said that there was a period of about seven years from 1996 when the relationship cooled, after her husband said to her something about the deceased.[28]She now believes that what he told her was false, and said as part of a process of isolating her from people other than himself.  As well, from 2002 to 2009 there was no contact between them, after the applicant had refused to take the deceased’s side in a dispute with the second applicant.[29]Thereafter the relationship resumed, particularly after the applicant returned to Brisbane in 2014, until hostility from the respondent interfered with the relationship in 2015.[30]
  1. [17]
    The applicant had married in October 1992, but she and her husband separated in 2012.[31] After the separation there were proceedings in the Federal Circuit Court between the applicant and her husband in relation to property.  As at December 2017 the applicant did not receive any maintenance from her husband, though he did make mortgage payments on jointly owned property.[32]An order was made in the Federal Circuit Court on 13October 2017, which the applicant sought to appeal as the effect would be that she would have nowhere to live.[33]Once the property where she lives is sold, she said she should receive a little under $300,000, but thereafter will have to pay for her accommodation.[34]In cross-examination it was put that this amount was lower than she would in fact get, but she adhered to it: p 22. 
  1. [18]
    It is correct as a matter of calculation that if one assumes that the two properties were sold at the valuations on which the Federal Circuit Court proceeded, and made the adjustments referred to in the Order and in the evidence, one obtains a figure of over $450,000. But the applicant was not cross-examined as to the basis of her calculation, so it was not shown to be wrong. There may be other deductions not referred to in evidence. Apart from that, any such calculation is based on valuations, not actual sale prices of the land, and sale costs remain unknown. The delay in selling the Alderley property, which as at the trial had not been sold, suggests that the valuation of it was or has become too high. Until it is sold, she has to make the mortgage payments for it; this has led to her acquiring a credit card debt of $23,705.54.[35]She had in December 2017 an outstanding liability for legal costs of $10,000, which would be a charge on money she received. 
  1. [19]
    Her true position is that, when both properties have been sold, she will receive her share of the net asset pool, which amount will not be known for sure until that point has been reached. It may be less than $300,000, after she clears her debts, or it may be more, but she will then have to obtain accommodation. She is unlikely to be able to borrow money to fund a purchase, because of her limited capacity to service a loan. Her current net income is $713.13 per week, with her disability support pension supplemented by a share of her former husband’s superannuation pension under the Federal Circuit Court order.[36]
  1. [20]
    She has for some years suffered from a psychiatric condition diagnosed as post- traumatic stress disorder with anxiety and depression, and in the past from brief reactive psychosis.[37]She has been receiving a disability support pension since July 2015.[38]She no longer has any superannuation, having accessed her superannuation balances, about $165,000, as a result of her being totally and permanently incapacitated; this was consumed by legal costs and living expenses.[39]In June 2017 she was diagnosed with breast cancer for which she has received surgery, and has received or needs chemotherapy and radiation therapy.

Statement in the Will

  1. [21]
    In her will the deceased recited that she had given thought to the making of a bequest in favour of her daughters “and after due consideration I have determined that I do not wish to make any provision for such persons to share in my estate as I have been estranged from them for many years, have had little contact with them as a consequence, and have also determined that in all the circumstances adequate provision has been made for them during my lifetime”.[40]The statement in the will is evidence of what it said, under the Evidence Act 1977 s 92.  It was supported by the evidence of the respondent.[41]The applicant strongly denied that she had been estranged from the deceased, or that adequate provision had been made for her either by the deceased or in other ways.
  1. [22]
    Apart from the applicant’s assertions to this effect, the applicant exhibited to her affidavit filed 5 June 2018 a number of photographs of the applicant with the deceased, apparently on good terms, and other photographs of the deceased that must have been either taken when they were together, or supplied by the deceased to the applicant. There were also 13 cards dated between October 2010 and December 2016 sent by the deceased to the applicant with expressions of goodwill. Apart from that, during her cross-examination, counsel for the respondent played and tendered two recordings of telephone calls between the deceased and the applicant, made at a time when the deceased was in a nursing home.[42]Parts of the calls were difficult to understand from the recording, because of poor sound quality, but it was quite clear to me that these were not conversations between a mother and a daughter who were estranged.  On the contrary, they appeared to be sympathetic conversations complaining about the fact that the respondent had sold the deceased’s house, and that the applicant could do nothing about that situation.[43]
  1. [23]
    Apart from this, in an affidavit of the respondent filed on 11 December 2018, in paragraph 12, the respondent said among other things:

“During mum’s time at [the nursing home], the first applicant berated mum by phone and abused her in relation to her decision to make me EPOA.”

The respondent said that the two phone calls, recordings of which became Exhibits 4 and 5, were two of the calls that he was referring to in that passage in his affidavit: p 35.  Having heard those phone calls, in my opinion it is clear that they cannot reasonably be characterised as the first applicant’s berating the deceased and abusing her in relation to a grant to the respondent of an Enduring Power of Attorney.  When I asked him to respond to the proposition that, at least in relation to those phone calls, what was said in the affidavit was a lie, his comment was that it was his opinion that she was berating mum: p 36. 

  1. [24]
    Having heard the recordings, I do not consider that any reasonable person could hold such an opinion as to the effect of the phone calls, and it follows that either this was a lie on the part of the respondent, or he is so affected by hostility to the applicant that his opinion of her behaviour is not reasonable. In either case, it follows that his evidence about the applicant and what has passed between her and the deceased is not reliable. Because of this, and because his evidence about the bad relationship between the applicant and the deceased is otherwise contradicted by objective evidence, I reject as unreliable all of the evidence of the respondent in relation to the conduct and behaviour of the applicant to the deceased, and the relationship between them.
  1. [25]
    Accordingly it seems to me clear that, if the applicant was at some stage estranged from the deceased, it was only in respect of a relatively short period which finished well before the death of the deceased. Further, there was ample contact between them, given the circumstance of the applicant’s residence in Cairns for most of that period, and other issues referred to in the affidavit. I accept the evidence of the applicant to that effect, and reject the evidence to the contrary of the respondent, and so find. If it appears that the deceased made her will because she believed that the applicant had been guilty of inappropriate conduct, and that belief is shown to have been ill founded, that may support an applicant’s claim.[44]
  1. [26]
    It is also difficult to see how any particular provision was made for the applicant during the deceased’s lifetime, either by her or from any other source. The applicant denies any,[45]and apart from the modest provision from the estate of her father, from which she had to pay her costs, there is no reliable evidence of any.  The respondent in his affidavit filed 22 May 2018 claimed that the applicant had received $37,000 from the deceased in gifts or unrepaid loans over the years, including $23,000 from a compensation payment: paras 73, 74.  This was denied by the applicant,[46]and unsupported by objective evidence, and I do not accept the respondent’s evidence of this.  In any case, it would be a modest sum over a long period.

The circumstances of the respondent

  1. [27]
    The respondent was born on 26 May 1961 and is now 57.[47]He said he has not been employed since September 2012 when he lost a position as manager of a pizza outlet, a role he had been in for two years, as a result of his employer’s ceasing to trade.[48]He provided no information about his previous employment history.  He said he does not receive any Commonwealth benefits, since he is living in a de facto relationship with a woman who is employed and earns about $70,000 per annum.[49]He and his partner own a home, purchased in 2009 almost entirely with borrowed money; the mortgage debt was by May 2018 reduced to about $183,000, from about $300,000.[50]He has a modest superannuation entitlement of $20,000 and owns two elderly cars.[51]
  1. [28]
    The respondent said that he received no property consequent upon the breakdown of a previous marriage about 20 years ago, from which he has two children who are in their thirties and financially independent.[52]He did not refer in his affidavits to any health problems,[53]and would be capable of working; it is plausible that he might have some difficulty in obtaining employment.  No explanation was given for the low amount of superannuation.  None of this evidence was challenged in cross-examination and I accept it. 

Approach to the application

  1. [29]
    The applicant as a child of the deceased is entitled to apply under the Succession Act 1981 s 41.[54]The first question under s 41(1) is whether the deceased made adequate provision for the proper maintenance and support of the applicant by her last will.  This is to be decided objectively as at the date of death of the deceased.[55]Whether the provision was adequate is to be assessed by reference to the applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon her bounty.[56]The assessment of the adequacy of any provision that has been made:

“Is not to be decided in a vacuum, as though looking simply to the question whether the applicant has enough upon which to survive or live comfortably.  Adequacy or otherwise will depend on all the relevant circumstances… the age, capacities, means and competing claims of all of the potential beneficiaries must be taken into account and weighed with all the other relevant factors.”[57]

  1. [30]
    The next step is as described in Stewart v Stewart [2015] QSC 238 at [13] by Applegarth J:

If inadequate provision was made for the applicant, then the court determines what amount the applicant should properly receive from the deceased’s estate.  This requires the court to exercise its discretion in determining what provision a “wise and just testator” would have made in the circumstances.  In exercising its discretion, the matters already considered in connection with the adequacy of any provision become relevant to the determination of what provision should be made.”[58]

I note that the discretion is exercised by reference to the situation at the trial, not at the date of death.  At this stage the cancer diagnosis is relevant. 

  1. [31]
    There is a third potential beneficiary in the form of the second applicant. Given that no provision was made for her under the will, and she has discontinued her application, I should proceed on the basis that there was no failure to make adequate provision for her by the will notwithstanding the absence of any provision. In those circumstances, what is relevant is the competing claim of the remaining potential beneficiary, the respondent.
  1. [32]
    The estate in the present case is very small, but that does not in my opinion in itself justify disregarding a potential beneficiary who otherwise shows need for provision.[59]The fact that an estate is too small to satisfy all of the needs of all potential beneficiaries does not mean, in my opinion, that a testatrix is free to decide for herself which beneficiaries’ needs she will seek to satisfy, as far as she can.[60]The small size of the estate does not in my opinion diminish the force of any legitimate claim on the bounty of the testatrix, though it limits the testatrix’s capacity to satisfy that claim, or indeed all competing claims. 

Analysis

  1. [33]
    In the present case in my opinion both the applicant and the respondent show need, both being in quite limited financial circumstances. The applicant will have, when the property she is currently occupying is sold, a better asset position on paper, but it will be necessary for her to find accommodation, and she will probably be confined to renting for the rest of her life. The respondent and his partner have their own home, though they have an obligation to discharge a mortgage. The applicant has significant health problems, and cannot work; the respondent has apparently no health problems, and could work subject to difficulties he may face in obtaining employment. Potentially he has a capacity to work, at least for a number of years.
  1. [34]
    The applicant in my opinion shows need, arising both from her limited financial circumstances, and from the state of her health, which in March 2017 prevented her from working and which was likely to put her to further expense in the future. In the circumstances, I consider that, bearing in mind the relevant matters as discussed in the authorities, the applicant has shown that she was left without adequate provision for her proper maintenance and support by the will of the deceased. As mentioned, I consider that the application is supported by the fact that the reasons given by the deceased for not making provision in favour of the applicant have been shown to be in error.
  1. [35]
    Both the applicant and the respondent are in need in the financial sense, in that they both have tight financial positions. There are differences, but overall I do not consider that there is very much between them. On the other hand, the applicant has significant health problems, which prevent her from working and are likely to continue to do so in the future, whereas there is no evidence of any particular health difficulties on the part of the respondent. Although the respondent did take responsibility for managing the affairs of the deceased in her declining years, there is no evidence that this particularly contributed to building up her estate. Placing her in a nursing home appears to have made her unhappy, but there is no reason to doubt that it was appropriate. Whether the applicant could have adequately cared for the deceased if she had remained living in her own home is not a matter I am in a position to assess.
  1. [36]
    There were times over the years when the deceased was living with the respondent. In December 2002 when the deceased fractured her collarbone and her ankle in an accident at home, she lived with the respondent for about three months after she was discharged from hospital, and was cared for by him during that period. Again in December 2015 after she was discharged from hospital she lived with the respondent until she went into respite care in May 2016, after which she went to a nursing home.[61]Apart from this, the respondent said that he had provided assistance to his mother when she was ill, or when she needed assistance with house maintenance, and that he would regularly visit his mother, usually several times each week.[62]He also claims to have assisted in driving the deceased to places, and by helping her attend medical appointments.  I note however that at the time she made her will she did have a motor vehicle of her own. 
  1. [37]
    Given my other concerns about the respondent’s evidence I am wary about this evidence, but he was not cross-examined on it and it may be true, so I consider I should accept that he did provide support and assistance to the deceased. I consider that the applicant also provided some support and assistance as and when she could, consistent with the fact that for many years she was living in Cairns while the deceased was in Brisbane, although in the period leading up to the death of the deceased the capacity of the applicant to provide care and assistance was limited by the actions of the respondent, and the hostility between them. The respondent conceded that in 2016 the applicant visited the deceased in hospital and in the nursing home, and often telephoned her: p 31.
  1. [38]
    On paper the applicant has, or will have once the Federal Circuit Court Order is worked out, a better net asset position than the respondent, but the respondent has the advantages of the support of a long term partner, and ownership with her of a home, albeit with a mortgage. The applicant now has no one in the world to whom she can turn for help,[63]and her health is significantly worse than that of the respondent.  On the whole therefore I consider that the applicant has shown a greater need than the respondent, but the respondent provided more support and assistance to the deceased than did the applicant. 
  1. [39]
    I do not consider that disentitling conduct has been made out. I do not accept that the applicant and the deceased were estranged, except for a period when the deceased broke off contact because the applicant was not prepared to support her in a dispute between the deceased and her other daughter, the second applicant. It is understandable that the applicant would not want to be drawn into this dispute in this way, and I do not consider that could amount to disentitling conduct, nor could any resulting estrangement, which ultimately the applicant took steps to overcome.[64]Nor do I accept that adequate provision has been made during the lifetime of the deceased by her or in other ways.  I do not consider that the hostility between the applicant and the respondent amounts to disentitling conduct. 
  1. [40]
    I reject the respondent’s allegations of hostility or adverse conduct on the part of the applicant directed towards the deceased. It seems that the applicant in this was motivated to give effect to her mother’s desire not to be in a nursing home, which is understandable, but may not have been a practical aspiration. I do not consider that the applicant was criticising the deceased for having granted the respondent an Enduring Power of Attorney, though no doubt she was very unhappy about that situation; rather I believe she blamed the respondent for having led the applicant into that course. Whether or not the applicant’s actions in that regard were misguided, I suspect that they were motivated by a genuine desire to give effect to what she understood her mother’s wishes were. In any event, disentitling conduct is not something which is readily found,[65]and I am not persuaded that it has been shown in the present case.
  1. [41]
    Conduct which is not sufficiently serious to amount to disentitling conduct can be relevant in the exercise of the discretion under the Act.[66]On the whole however I am not persuaded that there is any reliable evidence to show that the applicant has behaved towards the deceased in a way which would affect my exercise of the discretion in this case.  I do not consider that the hostility which she has shown towards the respondent (which seems to me to have been amply reciprocated) is relevant to the exercise of the discretion.
  1. [42]
    On balance therefore I consider that the discretion should be exercised by making a substantial provision in favour of the applicant, though one that falls short of 50 per cent of the available estate. In all the circumstances, I order that proper provision be made for the applicant from the estate of the deceased by payment to her of the sum of $80,000.
  1. [43]
    With regard to the question of costs, I propose after delivering these reasons to hear submissions, particularly as to the proper application in the present case of UCPR r 700A. I will be particularly interested in any offers of settlement of the matter which were made between the parties. Given the size of the estate, it was particularly desirable in this case in my opinion for the matter to be settled on reasonable terms.

Footnotes

[1]  Affidavit of respondent filed 22 May 2018 para 5; Exhibit RM1.

[2]  Respondent p 37; and presumably some personal effects of no value.

[3]  Affidavit of respondent filed 4 June 2018 paras 40, 41.

[4]  Affidavit of respondent filed 22 May 2018 para 109; affidavit of applicant filed 13 December 2017 para 73: most of her share went on legal costs for that and other litigation, the rest on debt reduction, a car and other living expenses.

[5]  Within 9 months from the date of death.  The applicant gave very early notice, on 11 April 2017 of her intention to apply under s 41: affidavit of the respondent filed 24 September 2018 Exhibit C.  Thereafter the respondent had a duty to preserve the estate: Collett v Knox [2010] QSC 132 at [165].

[6]  A directions order which permitted this to occur was filed on 3 April 2018. 

[7]Affoo v Public Trustee of Queensland [2012] 1 Qd R 408; Abrahams v Abrahams [2015] QCA 286.  The fact that the parties are agreed on the particular order has been said to be a compelling reason for exercising the discretion in a way consistent with that agreement.  But an agreement cannot either confer or bar the power to make an order: Re Hatte [1943] St R Qd 1; Watts v Public Trustee of Queensland [2010] QSC 410. 

[8]  Unless perhaps it consists only of cash or its equivalent.

[9]  Affidavit of respondent filed 24 September 2018 para 5; affidavit of respondent filed 24 September 2018, Exhibit A.

[10]  Affidavit of respondent filed 22 May 2018 para 25, 27.

[11]  Ibid para 29. 

[12]  Affidavit of respondent filed 24 September 2018 para 9.

[13]  Affidavit of respondent filed 24 September 2018 Exhibit J.  The grant occurred on 9 August 2017.  The amount of professional costs seems very high for a grant in common form, but I will assume that this bill related only to the cost of obtaining the grant. 

[14]  Affidavit of the respondent filed 24 September 2018 para 6.  Given the amount involved, a grant of probate would have been necessary if the funds had still been in an account in the name of the deceased. 

[15]  This is expressly contemplated by the Act s 41(8). 

[16]  Affidavit of the respondent filed 24 September 2018 Exhibit B. 

[17]  $6,860 + $1,425 + $4,597.26 + $1265.19 + $5,500 + 8,785.81 + $2,000, the amounts listed earlier.  

[18]  Under cross-examination the respondent said he had no idea what his legal costs were for this matter: p 32.  

[19]  This is relevant: Collett v Knox [2010] QSC 132 at [163]-[182]. 

[20]  The respondent was not alone in this.  At the hearing counsel for the applicant abandoned reliance on large parts of the affidavit of the applicant filed 4 June 2018, much of which was hearsay. 

[21]  Affidavit of applicant filed 13 December 2017 para 2.  I shall generally refer to her at the applicant. 

[22]  Ibid paras 4, 5, 6.

[23]  Ibid para 20.

[24]  Ibid paras 21, 22.  She said she kept in touch with letters.

[25]  Ibid para 23. 

[26]  Ibid para 26. 

[27]  Ibid paras 27, 35, 44, 50.

[28]  Ibid para 32, 34.

[29]  Ibid para 38.  Contact was resumed at the applicant’s initiative: para 45.  I do not regard any estrangement resulting from this as the fault of the applicant. 

[30]  Ibid paras 51-59.

[31]  Ibid paras 29.

[32]  Ibid para 65.  There had been earlier interim orders for maintenance, but the Order of 13 October 2017 discharged them, and any outstanding obligations under them, and refused to order spousal maintenance: Ibid Exhibit CM5. 

[33]  Ibid para 75; Exhibit CM5.  An appeal to the Full Family Court was dismissed: Affidavit of applicant filed 13 December 2018 by leave para 3.  It was suggested that the amount she spent on legal fees in the Federal Circuit Court, about $100,000, was excessive, but she did not agree: p 22.  I have no way of assessing whether that was so.

[34]  Affidavit of the applicant filed 13 December 2018 paras 3, 4. 

[35]  Ibid paras 10, 12.  On another credit card she has a debt of just over $8,000, from living expenses: para 14, Exhibit CM6. 

[36]  Ibid para 6.  This is closer to, but still less than, her earlier estimate of her weekly living costs, without rent. 

[37]  Affidavit of applicant filed 13 December 2017 para 80.

[38]  Ibid para 64: in December 2017, $445 per week.  Her weekly expenses then were more than twice this, without rent: para 66.

[39]  Ibid paras 69-71.

[40]  Affidavit of respondent filed 22 May 2018 Exhibit RM1.

[41]  Affidavit of respondent filed 22 May 2018 paras 39-79.  Much of this is apparently hearsay.  There is no objective confirmation of it in evidence.  The applicant denied it in her affidavit filed 5 June 2018, para 14.

[42]  Exhibits 4 and 5, made in August or September 2015: p 24, 26.

[43]  It is common for elderly people to be concerned about such matters, and I do not treat this as evidence that the sale of the house was inappropriate in the circumstances.  There was simply no evidence to dispute its appropriateness.  On the other hand, the applicant appears to have been genuinely concerned that her mother’s wishes were not being respected.

[44]Hughes v National Trustees Executors and Agency Company of Australasia Ltd (1979) 53 ALJR 249 at 254 per Gibbs J, Mason and Aickin JJ agreeing.

[45]  Affidavit of applicant filed 13 December 2017 para 60.

[46]  Affidavit of applicant filed 5 June 2018 para 3, 4. 

[47]  Affidavit of the respondent filed 22 May 2018 para 6.

[48]  Ibid paras 7-10.

[49]  Ibid paras 12, 13, 14, 19.  In evidence he said it was actually about $65,800 per annum: p 34. 

[50]  Ibid paras 15, 16.  He said it had since increased to about $205,000: p 34. 

[51]  Ibid paras 17, 18. 

[52]  Ibid paras 22, 23. 

[53]  There was mention in cross-examination of some abnormality with his spine, possibly a fusion: p 33.  But he said he could work, it was just difficult to find employment.  There was also a cryptic reference to a condition he suffered in May 2018 being completely different from what he had in 2012 (p 33), which is meaningless to me. 

[54]  There is no need for an adult child to show special need or some special claim: Blair v Blair (2014) 10 VR 69 at [20], [21].

[55]Vigolo v Bostin (2005) 221 CLR 191 at [4], [5], [56], [112].

[56]Singer v Berghouse (1994) 181 CLR 210 at 209-10.

[57]Vigolo v Bostin (supra) at [121].

[58]  Citing Singer v Berghouse (supra) at 209, Vigolo (supra) at 200-201.

[59]Collett v Knox [2010] QSC 132 at [150]. 

[60]  Counsel for the respondent referred me to passages in Steinmetz v Shannon [2018] NSWSC 1090 on the subject of freedom of testamentary disposition.  But if an estate is too small to make adequate provision for the proper maintenance and support of all potential claimants, there is little scope for testamentary freedom. 

[61]  Affidavit of the respondent filed 22 May 2018 at paras 101, 103.

[62]  Ibid para 96.  Several times each week sounds a lot of visits, and strains credulity.

[63]  Both parents are deceased, she has no children and she is not on good terms with her siblings or former husband. 

[64]Collett v Knox [2010] QSC 132 at [147].  See also Palmer v Dolman [2005] NSWCA 361 at [110].

[65]  Lee’s Manual of Queensland Succession Law (7th Ed 2013) para [13-290]; Collett v Knox (supra) at [146].

[66] Re Paulin [1959] VLR 462 at 473.

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Editorial Notes

  • Published Case Name:

    Mulcahy v Mulcahy

  • Shortened Case Name:

    Mulcahy v Mulcahy

  • MNC:

    [2019] QDC 19

  • Court:

    QDC

  • Judge(s):

    McGill DCJ

  • Date:

    28 Feb 2019

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