Barker v Magee

[2001] NSWSC 563

CITATION:	BARKER & ANOR v MAGEE [2001] NSWSC 563 revised - 19/10/2001
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 1624 OF 2000; 4443/2001
HEARING DATE(S):	25/06/01, 17/07/01, 31/08/01, 28/09/01
JUDGMENT DATE:	28 September 2001
PARTIES :	KEVIN MICHAEL BARKER & BRENDAN ADAM BARKER BY HIS TUTOR KATHRYN COMPTON v KERRY MARGARET MAGEE WENDY IRENE BARKER v KERRY MARGARET MAGEE
JUDGMENT OF:	Master Macready at 1

COUNSEL :	Mr. R. Tregenza for plaintiffs Mr L. Ellison for defendant Mr G.R. Graham for Wendy Barker
SOLICITORS:	Watson Stafford for plaintiffs John Fisicaro & Co for defendant Gerard O'Donnell for Wendy Barker
CATCHWORDS:	Family Provision. Application by children of former wife. Designation as notional estate of property jointly owned by deceased and his defacto wife. Order for legacies out of notional estate. Consideration of s 28(5)(d) of the Family Provision Act 1982.
DECISION:	Paragraph 57

- 1 -

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Brian Barker who died on 19 May 1999. The deceased was survived by his two former wives, the defendant who was his de facto partner at the date of his death and his two children who are the plaintiffs in the proceedings and the children of the deceased’s first wife, Kathryn Anne Compton. She does not wish to make a claim against the estate of the deceased. Notice was given to the deceased’s second wife, Wendy Baker, after the commencement of the hearing. As a result she commenced her own proceedings and these have now been heard with the adjourned hearing of 1624 of 2000. I have ordered both matters to be heard together and the evidence in one to be evidence in the other. There was no requirement for further cross-examination of the plaintiff who has already given evidence on the first hearing. There was further cross-examination of the defendant.

2   The deceased left a will dated 24 August 1998 under which he appointed the defendant as Executrix and gave her the whole of his estate. No probate was taken out in respect of that will because the home and a Queensland property which was jointly owned by the defendant and the deceased passed to the defendant by survivorship. She also received other assets by way of payment of a superannuation benefit. The deceased was a member of the Royal Australian Navy and his survivors were entitled to substantial benefits on his death. There has been a Grant of Letters of Administration to Mrs Compton for the purpose of bringing these proceedings.

3   At the date of his death the deceased was entitled to long service and recreation leave of some $31,056, he had a car and his interests in certain jointly owned properties. He had some liabilities and a claim by his former wife. The two properties which were jointly owned by the deceased and the defendant were their home at 10 Raven Place, South Windsor which was subsequently sold for $165,000. That was then subject to a mortgage of $104,000. They also jointly owned a property 9 Amelia Palms, Redlynch, Queensland near Cairns. That property was then subject to a mortgage of $109,000 and was valued a little less than that figure.

4   The debts of the deceased were in part repaid by insurance policies after his death and the defendant received substantially what was said to be an ex gratia payment for all his long service and recreation leave. There was also a superannuation benefit of $445,000. That was paid as to $37,813.16 on account of the plaintiff, Brendan, he then being an infant and the balance of approximately $408,000 was paid to the defendant she having been his de facto spouse at the date of death. The plaintiff, Wendy Barker had made a claim but that had been disallowed.

5   There have been costs incurred on each side, the plaintiffs’ being $37,500 and the defendant’s being $25,000 making a total of $62,500.

6   It is useful to set out a little of the history of the families. The defendant was born in 1956 and the deceased was born in 1957. The deceased married for the first time on 4 August 1979 to his first wife Kathryn. They had two children Kevin born on 27 January 1981 and Brendan born on 29 September 1983. The deceased and Kathryn separated in 1989 and their marriage was dissolved in July 1990.

7   It was in 1989 that the deceased and Wendy Barker commenced cohabitation at Wendy’s mother’s place at Heckenberg in New South Wales. Wendy Barker married the deceased on 11 August 1990. They lived there until 1992 when they moved to a rented home supplied by the Department of Defence at Voyager Point. In late 1992 Wendy received a compensation award of some $120,000 for injuries she had received. In 1994 the deceased and Wendy Barker moved back to her mother’s home at Heckenberg. In 1995 the deceased and Wendy Barker separated although for a time they continued to live under the same roof. There was a problem with alcohol which led their separation. In March 1995 the deceased and the defendant first met. The deceased and the defendant started to live together in October 1995. The deceased made his will on 24 August 1998. His children left school in that year. The deceased paid maintenance for his children in accordance with court requirements up until they turned 18 years. The deceased died on 19 May 1999 and the summons in 1624 of 2000 was filed within time. The summons in 4443 of 2001 was filed on 7 September 2001 and, accordingly, is out of time.

8 As the application is out of time it is necessary for the court to consider section 16 of the Family Provision Act which allows an application to be made notwithstanding it is out of time. There are a number of cases which refer to the principles to be applied in an application for an extension of time. In Re Guskett (deceased) (1947) VLR 211 the following was said:

"It is necessary for the applicant to make out a case that will justify the grant of the indulgence sought. He is to show reasons why his failure to apply within the time allowed should be excused. Every case will have to be dealt with on its own facts but it would seem necessary for the applicant to satisfy the court that the circumstances are such as to make it unjust for him to be penalised for being out of time. As moreover he is seeking an indulgence he should apply promptly for an extension of time."

9   His Honour Young J has in several cases dealt with the principles governing application to extend time under this Act. In Massie v Laundry (unreported 7 February 1986) he indicated that the factors which one looks at include the following:-

(a) is the reason for making a late claim sufficient?
(b) will the beneficiaries under the will be unacceptably prejudiced if the time were extended?
(c) has there been any unconscionable conduct on either side which would enter into the equation?

10   He also accepts apparently a view which was expressed by his Honour Needham J in Fancett v Ware (3 June 1986) that there is no purpose in extending the time with respect to a claim which must fail. In Phillips v Quinton (unreported 31 March 1988) Powell J when considering the matter at the substantive hearing leant to the view that a plaintiff seeking an extension of time under the Testators Family Maintenance Act must now demonstrate not merely a reasonable prospect but at least a strong probability of obtaining substantive relief. That view was not accepted by his Honour Hodgson J in Basto v Basto (unreported 8 September 1989).

11   In De Winter v Johnston, a decision of the Court of Appeal on 23 August 1995 his Honour Powell J referred to this matter and in particular the fact that nowadays the application for extension of time is invariably dealt with at the time of the application for substantive relief. He said at page 23:

"In such a case, so it seems to me no extension of time ought to be granted unless it be established (inter alia) that the application for an extension of time would, in the event of that extension being granted, be entitled to an order for substantive relief."

12   His Honour Mr Justice Sheller considered that it was only necessary to show that the application was not bound to fail. His Honour Mr Justice Cole seems to have adopted the parties’ approach of looking at the strength of the plaintiff’s case.

13   The first matter I turn to is whether the reason for making a late claim is sufficient. The evidence discloses that Wendy Barker consulted a solicitor in May 1999 concerning the affairs of the deceased’s estate. She received advice and her solicitor investigated in particular the superannuation aspects of the estate. On 24 June 1999 there was a long letter to the plaintiff outlining the position in which reference was made to superannuation and the claim in respect of that matter. The letter also referred to her ability to make a claim under the Family Provision Act and pointed out that she would be eligible. The letter specifically said that if she wished to take proceedings then she would have to do so within eighteen months from the date of the deceased’s death.

14   Correspondence occurred between the solicitors for Wendy Barker and the estate solicitors in July 1999 through to September 1999. That correspondence indicated that the estate had no assets and was, in fact, insolvent. The solicitor for Wendy Barker pursued a claim in respect of the superannuation and he lodged an application for her to receive it as she was his lawful widow. Her application was made in 1999, the result was unfavourable and an appeal was lodged. Ultimately in April 2000 the appeal was also unsuccessful. By a letter of 17 May 2000 the solicitor advised Wendy Barker that the appeal had been unsuccessful and sought her instructions. He heard nothing further until he met Wendy Barker by chance either in August or September of this year. As I have mentioned it transpired at the last hearing that notice had not been given to Wendy Barker in accordance with the rules and notice was given in July 2001 which eventually came to her attention. She then brought forward her claim.

15   In her evidence she referred to the fact that early in 2000 she started suffering from occasional blackouts and dizzy spells. In March 2000 she underwent a brain scan and that showed she was suffering from a brain tumour. In March 2001 she underwent brain surgery for the removal of the tumour which was located close to the brain stem. The entire tumour was not removed and some still remains. As a result she has lost 100 percent of her hearing in the right ear and about 50 percent in the left ear. She will need further brain scans for the rest of her life although apparently the tumour was not malignant. She has also suffered prolonged headaches which are difficult to treat.

16   It was no doubt reasonable for the plaintiff and her solicitor to pursue the claim for the superannuation up until mid 2000. Thereafter it would have been necessary to bring forward any Family Provision Act claim before November 2000. Wendy Barker moved flats at her address but within the same building and this appears to have resulted in some letters from her solicitors, which were sent to her after 17 May 2000, being returned to the solicitor by the postal authorities. Wendy Barker agreed that she did not have contact with her solicitor, Mr McDonnell for a year. She agreed that she had not taken any steps to contact him during that time. When asked why she did not contact him she said:-

“I had moved flats and I had not heard anything so I figured if anything was happening Mr O’Donnell would contact me.”

17   The plaintiff was not cross examined on the letter of 17 May 2000 to suggest that she well knew that the time limit had expired and that she had simply decided not to make a claim. There was no advice from her solicitor as to the likely prospect of success of her claim against the estate. This would involve a consideration of the lack of assets in the estate. Given her answer in cross-examination and the lack of any cross-examination about the letter of 17 May 2000 I think I should accept the plaintiff’s explanation that she was in fact waiting for the solicitor to contact her. In those circumstances I think there has been a marginally adequate explanation for the failure to bring proceedings. There has been no unconscionable conduct which should be taken into account and given the fact that the proceedings in 1624 of 2000 were commenced within time it would seem that there is no unacceptable prejudice to the defendant.

18   I will now turn to the nature of the case to see whether it has prospects of success and I will also consider the plaintiffs’ case in 1624 of 2000.

19   In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following:-

"The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, 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 his or her bounty.

The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."

20   It is necessary first to consider the situation of the plaintiffs in 1624 of 2000. Both children still live with their mother Kathryn Compton who has remarried and has another son aged 10 years. Her situation is that she and her husband live in rented accommodation and have some difficulty due to reduced income that Mr Compton now receives as a result of an accident. However, the details of their situation is not that critical as it is plain that both Kevin and Brendan can continue to live at home with their mother and stepmother. Another child pays board.

21   As far as Kevin is concerned he is now 20 years of age, is not married and does not have any dependents. He left school when he was 17 years of age and was then half way through year 11. He commenced a series of casual employments which have kept him reasonably busy over recent years. He is currently employed at the BP Service Station between two and four days per week at Casula. Whatever he earns he uses on petrol for his brother’s car which he drives, soccer games and general pocket money. In the near future he is hoping to obtain a slightly better position working in video store belonging to the father of his cousin. He is interested in working as a disc jockey and from time to time does that work on a part time basis. The evidence discloses that after separation he continued to have a reasonable relationship with his father and as I have mentioned his father paid maintenance for him up until he was 18 years.

22   It is necessary to see how the plaintiff, Kevin, says he has been left without adequate provision for his maintenance, education and advancement in life. Essentially he puts two matters forward to be considered by the court. They are first costs associated with equipment which he says he will need to develop his work as a disc jockey and if possible turn it into a career. These costs include -

(a) Car $20,000
(b) Lap top computer $5,000
(c) Audio & entertainment

machines $18,200

23   Kevin concedes that this level of equipment is top of the range and it may be that suitable audio equipment could be obtained for something less than this figure. The defendant suggests that a more modest figure might be in the order of $6,500. The other matter is that Kevin wants to do a massage therapy course at the Australasian College of Natural Therapies at Surry Hills. That could be completed in either one year part time or six months full time. The total cost of that course is about $3,000.

24   So far as Brendan is concerned he is 17 years of age and single with no dependents. For some time Brendan has worked a truck driver’s offsider earning about $316 per week after tax. He is considering further education but he has not yet decided what course he would like to do. He normally spends his weekly pay on petrol and costs involved in ten-pin bowling with which he is concerned. He has recently arranged to change his employment and he now works as a technician for a ten-pin bowling organisation at Fairfield. His thoughts for the future involve either opening a skateboard shop or becoming a professional ten-pin bowler. He has given some evidence that he would need to be able to enter a number of competitions and travel including overseas to become a professional. He has requirements for equipment at this stage of about $3,500 and needs to continue to enter into competitions. The evidence does not detail the extent of his future needs in this regard.

25   There was contact between Brendan and his father and Brendan had maintenance paid by his father until he was eighteen. Provision has already been made for Brendan in the sum of $37,813.16. That provision was paid to his mother and was used by her to purchase a motor vehicle for $15,000. At that stage Brendan was only 15 and did not drive. The car seems to have been used by other members of the family until recently. He also purchased a video camera. The balance of the funds seems to have been used to pay for furniture for the household and to meet various household bills. This appears to have happened because his stepfather was unemployed following an accident at work 10 April 2000 to 28 November 2000. This appears to have been a joint arrangement in which Brendan participated on the basis that these amounts will be repaid to him out of the compensation his stepfather will receive in due course once his workers’ compensation matter is finalised. However, it is clear that Brendan has already received some provision as a result of his father’s death.

26   The plaintiff, Wendy Barker, is 43 years of age. She is single and has a child who is not dependent upon her. I have already referred to her medical problems and these have meant she has been granted a disability support pension in an amount of $212.50 per week. Her expenses, including rent in a Housing Commission flat are $156.75 per week. She has furniture worth $5,000 and $6.00 in a bank account. She has a loan from Centrelink of $500 and she owes her solicitors $3,685 a total of $4,185. She lives in a very modest way.

27   During their married life the plaintiff, Wendy Barker, and the deceased lived either in rented accommodation or with her mother. The deceased spent a substantial time at sea as he was employed by the navy. However, there were various contributions made by the plaintiff, Wendy Barker, during the period they lived together. There was second hand Yamaha motor cycle purchased for the deceased in 1995 for $3,500 and March 1993 she lent the deceased a total of $20,000 to enable him to purchase a new Harley Davidson motor cycle and “leathers”. I am satisfied having heard the plaintiff that a suggestion by the defendant that the deceased in fact bought a motor cycle for the plaintiff Wendy Barker to cover that contribution is not correct. I think those comments are only based upon what the deceased said to the defendant and I should prefer the sworn evidence of the plaintiff who has knowledge of the facts. The plaintiff herself bought a Harley Davidson motor cycle as she had the funds to do so about a year after she lent the money to the deceased to buy his motor cycle. Ultimately she sold her motor cycle to her brother who paid her. In addition to these matters there were various monies spent on improvements to the rented accommodation which the parties occupied. There was some $1,500 spent on the garden and $750 on a carport. On another occasion when the deceased was overseas the plaintiff opened his mail and found a demand from the Taxation Office for the payment of some $7,000. She spoke to the deceased and at his request she paid that amount to the Taxation Office on his behalf. These matters are put forward in the claim to illustrate the contributions that she has made during the marriage of the plaintiff and the deceased. The evidence also suggests that the deceased had started to repay the amount for the motor cycle and the amount that was repaid was the sum of $3,800.

28   Although these amounts in some respects are debts due by the estate the estate is insolvent once one takes the defendant’s costs into account. The plaintiff thus says that she has been left without adequate and proper provision for maintenance, education and advancement in life. In particular she categorises her need as something for advancement in life bearing in mind her current medical condition, lack of assets and limited income. I would have thought that given the period of the marriage that some provision should have been made for the advancement of life of the plaintiff particularly bearing in mind her present position.

29   It is necessary to consider the situation of other people who have a claim on the bounty of the deceased. In this case the only one is the defendant. After the death of the deceased the jointly owned properties were transferred to the defendant. The deceased had died by taking his own life in the garage of the home which he owned with the defendant and for this reason the defendant decided to sell the home once it was transferred to her. She then purchased another property at Riverstone for $250,000. The house which she and the defendant owned was sold for $165,000 and she received about $50,000 from the sale after paying out the mortgage. The defendant also received the sum from the deceased’s superannuation and her present assets appear to be as follows:-

House at Riverstone $250,000

Investment property – Queensland $90,000

Caravan $7,000

Car $24,000

Superannuation $10,000

Loan to mother $10,000

Shares in Australian Pacific Health Group $25,000

Loan to Australian Pacific Health Group $120,000

Loan to Karl Suleman Enterprises $50,000

30   The defendant has liabilities being a mortgage on her house of $80,000 and a mortgage on the Queensland property of about $110,000. The evidence shows that the loan to Australian Pacific Health Group Pty Ltd is an unsecured loan which carries interest at the rate of 4% per month. It is not repayable until 5 December 2001 and was entered into on 5 June 2000. The loan to Karl Suleman Enterprises Pty Ltd was a loan which is repayable over a period of some five years by instalments of both principal and income. The defendant has no right to call for repayment of the whole of her share of that loan.

31   The defendant is 45 years of age and previously worked as an account’s clerk for some years. In January 2001 she was injured in a car accident in which she was a passenger. Since then she had other employment and has recently started a course learning to be a nail technician. She wants to pursue this line of work. There is evidence of the medical condition of the defendant. She suffers from a number of medical conditions. These include hypertension, diverticular disease, erosive oesaphagitis and a measure of depression. She also has some other problems such as spondylitis, urinary tract infections mastitis, menopausal syndrome and recurring headaches. She has had treatment for these and apparently she responds reasonably well to the treatment. She seems to be able to cope with her present medical problems and there is no evidence that they would prevent her from continuing a working career.

32   There is no suggestion on the evidence that the relationship between the deceased and the defendant was other than happy and that the defendant joined with the deceased in borrowing funds in order to purchase the property in which they both lived during the period of the relationship.

33 In this case it is clear that there is now no actual estate. Accordingly, under s 23 of the Family Provision Act, if the Court is satisfied that an order for provision ought to be made and that deceased entered into an appropriate prescribed transaction the court may make an order designating as notional estate of the deceased person such properties held by the defendant as it may specify.

34   In the present case the first thing it is necessary to decide is whether or not some provision ought to be made on the application. This involves a consideration of the role of the defendant in the deceased’s life and a consideration of obligations due to her and those due to the plaintiffs.

35   The plaintiffs have claimed sums of $100,000 each (in Brendan’s case less the $37,000). The appropriate form of claim for such children is substantially less having regard to the sketchy nature of the evidence as to their future needs. At this stage of their lives it would be inappropriate to provide them with something to go towards some future home. So far as the defendant is concerned it is necessary to consider what was appropriate to provide for a de facto partner of the deceased.

36   The provisions normally made in respect of widows have been set out in many cases and recently the President of the Court of Appeal in Golosky & Anor v Golosky, unreported 5 October 1993, summarised them in the following terms:

"In testing the Master's decision it is appropriate to keep in mind the principles which governed the approach which he was obliged to take to the widow's application under the Act. Relevantly, these included:

(a) Proper respect was to be paid for the right of testamentary disposition which is the fundamental premise upon which the provisions of the Act are based. That premise requires the Court, out of respect for the continuing right of testamentary disposition, to limit its disturbance of the testator's will to that which is necessary to achieve the purposes of the Act, and not more. See The Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9, 19; White v Barron and Anor , above, 458; Hunter , above, 576;

(b) The purpose of the jurisdiction is not the correction of the hurt feelings of sense of wrong of the competing claimants upon the estate of the testator. The Court is obliged simply to respond to the application of the eligible person who was a member of the testator's household and to consider whether, as claimed, the provision made by the will is inadequate for that person's proper maintenance and advancement in life. See Heyward v Fisher , Court of Appeal, unreported, 26 April 1985; (1985) NSWJB 81.

(c) Consideration of other cases must be conducted with circumspection because of the inescapable detail of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had been said that in the absence of special circumstances, it will normally be the duty of a testator to ensure that a spouse (or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to. To the extent that the assets available to the deceased will permit such a course, it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies; see Luciano (above) 69-70;

(d) A mere right of residence will usually be an unsatisfactory method of providing for a spouse's accommodation to fulfil the foregoing normal presupposition. This is because a spouse may be compelled by sickness, age, urgent supervening necessity or otherwise, with good reason, to leave the residence. The spouse provided and will then be left without the kind of protection which is normally expected will be provided by a testator who is both wise and just. See Moore v Moore , Court of Appeal, unreported, 16 May 1984, per Hutley JA;

(e) Considering what is 'proper' and by inference what is 'improper' as a provision in a will, it is appropriate to take into account all of the circumstances of the case including such matters as the nature and quality of the relationship between the testator and the claimant; the character and conduct of the claimant; the present and reasonably anticipated future needs of the claimant; the size and nature of the estate and of any relevant dispositions which may have reduced the estate available for distribution according to the will; the nature and relative strengths of the competing claims of testamentary recognition; and any contributions of the claimant to the property or to the welfare of the deceased. See Re Fulop Deceased (1987) 8 NSWLR 679 (SC); Churton v Christian and Ors (1988) 13 NSWLR 241 (CA), 252."

37   When talking of the need to provide a house and a sum for contingencies the President is clearly referring to Wellman and passages in Luciano v Rosenblum and other cases. As was pointed out by the Court of Appeal in Elliott v Elliott, unreported, 29 April 1986, such a type of provision only applies where it can be said there has been a long and happy marriage and a widow has helped build up the estate of the deceased.

38   In this case there is nothing to suggest that the relationship was other than happy but it was one for only a short time, namely, four years. This was not of the defendant’s making but the fact of the matter is that the court has to consider the circumstances as at the date it makes an order taking into account the length of the relationship that did exist between the defendant and the deceased. In these circumstances the type of provision which the deceased should have made if his estate was large enough would be substantially less than that referred to by His Honour. Having regard to the defendant’s circumstances, the amount of the notional estate and the situation of the plaintiffs I think it is appropriate that some small provision by way of legacy be made for them.

39   The plaintiff, Brendan, has received substantial provision. He now has a car which is his as it was purchased with his money and from his stepfather he will receive the balance of the funds he has made available to the family which amounts to some $23,000. However, they will not become available for some time. In the circumstances I think that it is appropriate that Brendan receive a legacy at this stage of $10,000.

40   So far as Kevin is concerned it seems to me that he is a little bit older and at least knows what he wishes to do. It would be appropriate for him to receive a legacy of $30,000.

41   So far as the plaintiff, Wendy Barker, is concerned, her claim is put quite modestly merely relying upon the contributions she made to the deceased’s welfare and referring to her present lack of assets. I would have thought an appropriate provision for her would have been a legacy of $25,000.

42 The property, 10 Raven Place, South Windsor, was held by the deceased and the defendant as joint tenants at the date of death. The deceased (who committed suicide) was a year younger than the defendant but no doubt had a shorter life expectancy than the defendant. The relevant prescribed transaction which is alleged under s 23(b)(iii) of the Act is the failure of the deceased to sever the joint tenancy. By the combined effect of s 22(1)(a)(i), (4)(b) and (5) there will be a prescribed transaction if the deceased omits to sever the joint tenancy immediately before death and full valuable consideration in money or money’s worth is not given for the omission of the deceased to do that act (s 22(1)(b).

43   In Wade v Harding (1987) 11 NSWLR 551 Mr Justice Young, as he then was, concluded on the facts of that case “what was forgone in not severing the joint tenancy was received by continuing to be a joint tenant.” This conclusion appears to be because he formed the view that immediately before death the deceased had an equal chance with the joint tenant of benefiting by the jus accrescendi.

44   In Cameron v Hills (unreported 26 October 1989 Needham J described that approach in these terms:=

“With great respect to his Honour, I find it difficult to see how a joint tenant, about to die immediately, can be said to have an equal chance of surviving the other joint tenant. The Court must look at the position the moment before death. Whatever may have been the facts in that case justifying the conclusion, there are no such facts in this case. Immediately before the death of this deceased there was no rational prospect of his surviving the defendant. Accordingly, in my opinion, no valuable consideration in money or money’s worth was given for the omission of the deceased to sever the joint tenancy.”

45   Provided that a deceased has suffered some injury, had a medical problem or set in train some sequence of events as a result of which death ensues then, like His Honour Justice Needham, I would normally conclude that there was no rational prospect of the deceased surviving his co-tenant. In the present case the deceased committed suicide in his car in the garage and the cause of death was carbon monoxide poisoning. In these circumstances I would conclude that no valuable consideration was given and thus there is a prescribed transaction.

46 Section 27 of the Family Provision Act is in the following terms:

"(1) On an application in relation to a deceased person, the Court shall not make an order designating property as notional estate of the deceased person unless it has considered:

(a) the importance of not interfering with reasonable expectations in relation to property;

(b) the substantial justice and merits involved in making or refusing to make the order; and

(c) any other matter which it considers relevant in the circumstances.

(2) In determining what property should be designated as notional estate of a deceased person, the Court shall have regard to:

(a) the value and nature of property the subject of any relevant prescribed transaction or distribution from the estate of the deceased person;

(b) where, in relation to any such prescribed transaction, consideration was given, the value and nature of the consideration;

(c) any changes over the time which has elapsed since any such prescribed transaction was entered into, any such distribution was made or any such consideration was given in the value of property of the same nature as the property the subject of the prescribed transaction, the distribution or the consideration, as the case may be;

(d) whether property of the same nature as the property the subject of any such prescribed transaction, any such distribution or any such consideration could, during the time which has elapsed since the prescribed transaction was entered into, the distribution was made or the consideration was given, as the case may be, have been applied so as to produce income; and

(e) any other matter which it considers relevant in the circumstances."

47   As far as the matters referred to in subsection 27(1) are concerned it is important to note that the children’s proceedings were commenced in March 2000. The defendant received a sum from the superannuation in June 2000. Thereafter she proceeded to sell the existing house, reinvest in another house and made her other investments. She freely conceded that she took all these steps well knowing that the claims by the infant plaintiffs were outstanding and would have to be met in due course.

48   The defendant has also expended funds on a number of matters. Apart from upgrading her car and purchasing a somewhat more expensive house she has also spent some $23,000 on improvements to the house and has also spent $4,000 for furniture for the house.

49   There is no evidence of promises to the infant plaintiffs for provision nor were promises made by the deceased to the defendant for provision other than the execution of his will. Given that the defendant has taken these steps in respect to her property in full knowledge of the infant plaintiffs’ claims it seems to me that there is no injustice in designating her house for the purpose of meeting any necessary claims. In particular the defendant has made a conscious choice to invest in investments which she cannot immediately call upon in order to meet any claims by the infant plaintiffs. It is not appropriate that such investments should be designated as notional estate. They are unsecured and ultimately provide no security for the plaintiffs. In the circumstances I am satisfied that it is appropriate to designate the defendant’s property at Riverstone as notional estate. The address of the property appears to be 27 King Street, Riverstone.

50   Section 28 includes further restrictions on the power of the Court to designate property at notional estate. Section 28(5) provides as follows:

"On an application in relation to a deceased person, being an application:
( a) made pursuant to an order under section 16 allowing the application to be made; or
(b) for an order under section 8 for additional provision, the court shall not make an order designating property as notional estate of the deceased person by reason of a prescribed transaction or a distribution unless it is satisfied:
(c) that:
(i) the property was the subject of the prescribed transaction or distribution;
(ii) the person by whom it is held holds the property as a result of the prescribed transaction or distribution as trustee only; and
(iii) the property is not vested in interest in any beneficiary under the trust; or
(d) that there are other special circumstances (including, in the case of an application made as referred to in paragraph (a), the incapacity during any relevant period, of the person by or on whose behalf the application is made) which justify the making of an order so designating the property."

51 In relation to this case the relevant section is s 28(5)(d). Apart from stating incapacity as a special circumstance the sub-section gives no other indication of what constitutes such special circumstance. However it is clear that s 27 applies when a claim is made both before and after the time limited by s 16. Section 28(5) in a case where an extension is to be allowed may thus be thought to impose either a further requirement over and above the matter, which a court will consider under s 27 or merely a requirement that a circumstance be “special”. In s 28(5)(d) the word "other" is used in describing “special circumstances”. That I think is grammatically a reference to the matter appearing in s 28(5)(c). It may be that the matter in s 28(5)(c), namely a discretionary trust, was thought to be a special circumstance.

52 A question which arises is whether a circumstance which may be taken into account under s 16 can also be taken into account as a special circumstance under s 28(5)(d). In Dare v Furness (1998) 44 NSWLR 493 Cohen J decided that infancy was a factor which could be considered, though not determinative, under s 16. It could also, he held, be considered under s 28(5)(d) as a special circumstance.

53   In the present case the plaintiff suggests the following as special circumstances:-

(a) The fact that the proceedings by the children were commenced within time.
(b) Lack of notification under the rules.
(c) Delay in commencing proceedings was not long.
(d) The defendant had notice of the plaintiff’s claim.
(e) The defendant put assets in her name knowing of the existence of the widow who is a prima facie claimant.

54 So far as (b) above is concerned I think this is quite irrelevant. Parties either make an application because they wish to do so and should not depend upon there being some other proceedings on foot which might give them chance notification. So far as (c) is concerned I would have thought that this could not be described as a special circumstance. The extent of delayand the explanation certainly are considered under s 16. The matters under (d) and (e) above are ones which ordinarily fall for consideration by the court under s 27. In particular it certainly is relevant to s 27 (1) (a).

55 The matter which I think may be a special circumstance is the matter under sub-paragraph (a) above which is the fact that the proceedings by the children were commenced well within time. The reason why this should be a special circumstance lies in the policy behind the Act. The Act has a series of provisions which provide various gateways for making orders under s 7 of the Act. The various gateways commence with the class of persons who may make claims and progresses through other matters such as the time within which a claim has to be made. There are also additional gateways which concern either distributed estates or estates that have passed by means other than a will into the hands of beneficiaries or persons whom the deceased wished to benefit. The provisions in s 28(5)(d) only apply in cases where an extension of time is necessary or an application is made for subsequent provision under s 8. That latter pre-supposes that there was an earlier application under s 7. In both those circumstances it can be expected as a matter of course that the estate would be distributed or parties may have conducted themselves on the basis that the dispositions at the death of the deceased will not be affected by claims of dependents. This additional gateway in respect of this area of late or further claims has a further gateway which requires special circumstances. The purpose really is to provide additional protection to persons taking under the will or under prescribed transaction and who may have ordered their affairs on the basis that time has expired.

56   In the present case, however, there seems to be no warrant for that level of protection being available to the defendant given that claims were already made well within time by the infant beneficiaries. The plaintiff, Wendy Barker, well knew this as I have mentioned in the judgment. It seems to me that this circumstance would constitute special circumstances for the purposes of the sub-section.

57   The orders I make are as follows:-

1. I designate as notional estate the defendant’s property at 27 King Street, Riverstone.
2. I order that:-
(a) The plaintiff, Kevin Michael Barker receive a legacy of $30,000.
(b) The plaintiff, Brendan Adam Barker receive a legacy of $10,000.
(c) The plaintiff, Wendy Irene Barker receive a legacy of $25,000.
such legacies to carry interest at the rate under the Wills Probate and Administration Act from 2 months from today’s date.

3. Subject to submissions, I order that the plaintiffs’ costs on a party and party basis be paid out of the property designated as notional estate.
4. I reserve liberty to apply for enforcement of these orders.

Last Modified: 10/22/2001