Bishop v White and anor in the Estate of White; Bishop v White

[2006] NSWSC 354

CITATION:	Bishop v White & anor in the Estate of White; Bishop v White [2006] NSWSC 354
HEARING DATE(S):	24 and 26 April 2006
JUDGMENT DATE :	27 April 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	Windeyer J at 1
DECISION:	Provision for daughter varied requiring trustees to purchase house for daughter to occupy during her life if requested. No provision made for grandson
CATCHWORDS:	FAMILY PROVISION ACT - claims by daughter and grandson - daughter given life estate in half of residue under will - whether absolute gift sufficient to enable home to be bought should be made - grandson suffers from schizophrenia - accommodation provided by his mother - whether provision for separate accommodation or continuing accommodation after death of his mother should be made
LEGISLATION CITED:	Family Provision Act 1982
CASES CITED:	Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639 Re Fulop deceased (1987) 8 NSWLR 679
PARTIES:	Cyrus Anthony Guy Bishop (Plaintiff in 6687/04) Joanne Mary Bishop (Plaintiff in 4031/04) Anthony Alan White (First Defendant in both matters) Huw David Evans (Second Defendant in both matters)
FILE NUMBER(S):	SC 6687 of 2004; 4031 of 2004
COUNSEL:	Ms K Thompson (Cyrus Bishop) Mr D Maddox (Joanne Bishop) Mr P J Livingstone (Defendants)
SOLICITORS:	Ferns Aubrey Mitchell (Cyrus Bishop) Hal Ginges & Co (Joanne Bishop) Lane & Lane (Defendants)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

THURSDAY 27 APRIL 2006.

6687/04 CYRUS ANTHONY GUY BISHOP V ANTHONY ALAN WHITE & ANOR
4031/04 JOANNE MARY BISHOP V ANTHONY ALAN WHITE IN THE ESTATE OF UNA LILLIAN WHITE & ANOR

JUDGMENT

1 These actions were heard together, the evidence in one being evidence in the other so far as is relevant. Each action is a claim under the Family Provision Act 1982 for provision out of the Estate of Una Lillian White (the deceased). The plaintiff in action 4031/04, Joanne Mary Bishop (Mrs Bishop) is a daughter of the deceased. The plaintiff in action 6687/04, Cyrus Bishop (Cyrus) is a son of Mrs Bishop and a grandson of the deceased.

2 The deceased died on 11 June 2003, aged 74. She left a will dated 11 April 2003, probate of which was granted to the defendants on 28 August 2003. The first defendant, Anthony Alan White is a son of the deceased. The second defendant is a friend of his.

3 The deceased had three children: Mrs Bishop, aged 50, the first defendant aged 52 and another son Paul now aged 55. Under her will the deceased gave a legacy of $10,000 to Paul and a legacy of $5,000 to Cyrus. She gave her motor vehicle to Mrs Bishop, her bog oak collection to her son Anthony and the contents of her home equally between Mrs Bishop and Anthony. She gave the residue of her estate, as to one half to Anthony and as to the other one half to be held on trust to pay the net income to Mrs Bishop during her life with remainder as to 75% to the Smith Family and 25% to the RSPCA. Under the will the deceased gave the executors power to sell and empowered them to invest freely as if beneficial owners with power “including the right to invest in property for occupation or use by a beneficiary”.

4 The estate of the deceased at date of death had an estimated value of $1,163,382 including a property at Blackheath with an estimated value of $400,000. It is not necessary to go into the assets in detail, as apart from one debt the assets have all been realized, the proceeds being held in a bank account with a present balance of approximately $706,000. The unrealized asset is a debt to the estate by Bellconda Holdings Pty Limited of $320,000. The debtor company is controlled by the first defendant and the loan was made to that company by the deceased after she sold a property at Kingscliff. The legacies have been paid and distributions of income of $66,484 have been made to Mrs Bishop. In an affidavit of the first defendant sworn on 20 April 2006 he said distributions of income of $66,000 have been made to him, but in his oral evidence Mr White said that rather than receive that sum it had been set off against interest at 7.5% due on the debt owing by Bellconda Pty Limited to the estate. Interest at 7.5% would amount to $24,000 a year so that interest up to date would be approximately $72,000. The position is not quite clear but the court is not engaged in an accounting exercise at this stage. The corpus residue is approximately $1,026,000. Some costs of the executors of the proceedings have been paid and the remaining costs are estimated to be $23,000. If the costs of both plaintiffs were ordered to be paid these would amount to about $60,000, which would bring a one half share in residue to between $470,000 and $500,000.

5 Mrs Bishop was married in 1978 in Edinburgh. Her marriage was not successful; the parties to it separated after about three years. Cyrus was born during those three years. Mrs Bishop came to Australia with Cyrus in 1980. She became involved in the Pentecostal Church. She was diagnosed as suffering from schizophrenia in 1988 when she was aged 33. She and Cyrus went to live with the deceased at Kingscliff for about six years, until the deceased sold her home there and moved to the Blue Mountains. A year later both Mrs Bishop and Cyrus moved to Katoomba to rented accommodation and later to a Housing Commission home where they have lived for about 11 years. Mrs Bishop was close to her mother and at both Kingscliff and Blackheath provided her with considerable assistance and care and in her last illness practically full time care in the Blackheath home. None of this was really disputed. Mrs Bishop has little in the way of assets apart from her interest in the estate. Of the payments made to her from the estate the evidence is that $35,000 is held by her solicitor on trust for her. Whether she has made payments from that amount for costs or made payments in addition to that sum which seems likely, is not clear. She works part time as a respite care worker for two days a week. She requires regular medication to manage her schizophrenia and sees her local general practitioner each three weeks for this. She receives a disability support pension. Her regular weekly income is made up of the following:

Disability support pension	$197.00
Part time work	$192.00
Board paid by Cyrus	$ 75.00
Supplementary pension while a TAFE student	$ 32.00
Total	$496.00

Her regular outgoings comprise the following:

Rent	$108.00
Food	$100.00
Motor vehicle expenses	$ 60.00
Other outgoings	$ 40.00
Total	$308.00

While these figures show a reasonable weekly surplus and Mrs Bishop receives some irregular income from quilting and the like, it is clear there would be some other outgoings not listed.

6 The deceased wrote a letter addressed to Mrs Bishop dated 18 April 2003 which was a week after the will was signed in the following terms:

Dearest Joanne,

I am writing this to you so that you can understand the reasons why I have drawn up my will in the manner that you see before you.

I have, created a trust in order to be sure that you have your own home, without the burden of any expenses in looking after that. Tony and Huw will administer this trust so that you have a home that you can live in, and a small income from the remainder of the trust. This way you will still be able to keep your pension and work the few days that you do without any loss of income or benefits. I was very concerned that should your share of my estate be handed directly to you, then you would lose all the benefits that you currently have, and that the share of my estate would not be sufficient to pay you an income for a considerable length of time.

I have taken this advice from the solicitors and agree with them that this was the best way to ensure your financial security in the long term, as well as provide you with a roof over your head with no costs to you.

I am sure that you will understand my reasons for this, and I want to tell you that I love you very very much and this was one of my most pressing concerns your continued well being and security in the longer term.

With all my love
(signed) Una White

This letter was sent to Mrs Bishop with a copy of the will after the death of the deceased.

7 The evidence is that if Mrs Bishop purchased a home this would not affect her Centrelink payments nor would other assets up to $149,000. However, income of over $58.00 per week would bear upon the Centrelink payments. There is evidence of other statements by the deceased not in the letter that she was concerned that if Mrs Bishop got money outright that she would give it to Cyrus. She was also concerned that her daughter might give up her medication and if she did she could squander the money which she had. As against this there is evidence that Mrs Bishop has taken the required medication regularly over the last nine years or so.

8 The wish of Mrs Bishop is to purchase a home in her own name and be able to leave that to her son. Evidence shows that a three bedroom home in the Katoomba area would cost somewhere in the vicinity of between $300,000 and $360,000. Mrs Bishop says and I accept this that there is difficulty with her present home in the area where it is as other persons in that particular area engage in inappropriate conduct. There is no claim by Mrs Bishop against that share of the estate which goes to her brother. What she wants is an absolute interest in at least an amount of the fund left to her for life sufficient to enable her to buy a home in her own name.

9 I turn to the claim of Cyrus. Cyrus is aged 27 having been born on 17 February 1979 in Scotland. When he and his mother came to Australia from Scotland they lived for some time in rented accommodation in Brisbane. The deceased and her husband at that time were living at Kingscliff and the family saw a lot of each other. Cyrus and his mother had a visit to Scotland in 1985, perhaps to attempt some reconciliation between his mother and father, but this was not successful and they returned to Australia. They moved for a time to Adelaide and it was at this stage that Mrs Bishop was diagnosed as suffering from schizophrenia. The deceased went to Adelaide with the first defendant and took Cyrus and Mrs Bishop back to her home in Kingscliff to live. At this stage Cyrus was aged nine. The parents, daughter and grandson lived together more or less as a family. The deceased was good to her grandson. She was a qualified pharmacist and ran a business at Kingscliff. When Cyrus was 11 the deceased arranged for him to go to the Woodlawn Boarding School in Lismore, but he didn’t like that and returned to Kingscliff. The deceased moved from Kingscliff to Blackheath in about 1992, retaining the shop and house at Kingscliff, which she rented. Cyrus and his mother after a little while moved to Blackheath to live with the deceased for about a year, after which they moved to rented accommodation in Katoomba and subsequently to the house in Clissold Street Katoomba owned by the Department of Housing where they still live together. They remained in regular contact with the deceased who was living not far away. Mrs Bishop saw her at least once a week but Cyrus on fewer occasions. The deceased paid for an operation which Cyrus required on his knee. There is no doubt that the deceased and Cyrus had quite a good relationship, but she was clearly disturbed by some of his behaviour, particularly his use of drugs and alcohol. Since he has left school Cyrus has done little in the way of paid work. He has had a job chopping wood and another job stacking supermarket shelves at Coles but that is really all. He was diagnosed as a schizophrenic in late 2000. He had been engaged with illegal drugs and excessive consumption of alcohol. He went on a disability pension. He receives a pension of $478.00 per fortnight and pays about $75 per week to his mother from this for rent or board. He really has nothing in the way of assets. The $5,000 which he obtained by way of the legacy has apparently been used to discharge some debts. The action has been brought by him through a tutor. The medical evidence is that he will be unable to engage in any regular paid employment. He is attending a TAFE computer course. He is thinking of doing an electronics course after that. He would like to do engineering, but the medical evidence is this wish is fanciful. He cannot be trusted to take his required medication voluntarily and is subject to a community protection order to ensure he does so.

10 There is expert medical evidence, particularly from Dr Wilcox, a psychiatrist, that he suffers from chronic paranoid schizophrenia and has an additional diagnosis of cannabis abuse. Her report says in conclusion, “he has a chronic treatment resistant mental illness and is unlikely to have any meaningful, long term relationship or maintain consistent employment”.

Claim of Mrs Bishop

11 The question here is whether the deceased in making the provision which she did for her daughter failed in an obligation to make proper provision for the maintenance and advancement of Mrs Bishop. I agree with the submissions of counsel for the defendants that the deceased appears to have given careful consideration to the provision made for her daughter by her will. The letter indicates that. I do not think it correct to think that the letter sets out all the reasons the deceased made the provision that she did as it was clearly intended to be a kind letter. The affidavit evidence of Mrs Carroll, which was unchallenged, sets out other concerns of the deceased about the influence that Cyrus had over his mother. Those concerns may or may not have turned out to be correct, but the deceased was, I consider, justified in having some concern.

12 Whether that be the case or not the question remains whether the provision made is adequate for the maintenance and advancement of Mrs Bishop. While there may be advantages in Housing Commission accommodation I accept the evidence that there are problems with this and it is desirable for the plaintiff to be able to live outside the area where she presently lives. There is a need to provide for this. On the evidence of the first defendant there would be no problem in acting on a reasonable request of Mrs Bishop to spend a reasonable amount of the settled fund on a house for Mrs Bishop to occupy for her life with appropriate arrangements for substituted accommodation from time to time. Counsel for Mrs Bishop says that this would not be suitable as there is at least some coolness and friction in the relationship between brother and sister. I do not consider there is anything to show that the first defendant and his co-executor would not act properly in administering the trusts of the will or of any trust as varied by any order I should make. Even if I thought otherwise, that would not give grounds to make an order for absolute entitlement. It is clear that if a home is purchased in which the Mrs Bishop can reside for so long as she wishes and she receives in the most cost effective way possible the income from the balance of the settled fund, she will be properly provided for. Nevertheless it is proper that the trustees be required to purchase a home if Mrs Bishop so requests, rather than it being in their discretion whether or not to exercise the power given by will. It is very desirable to ensure, so far as is possible, that there is no argument or unnecessary expense involved in the determination of whether a house and what house should be purchased. Provided that it is not suggested that an amount of money be spent on a house far in excess of its proper value, I consider that the trustees should be required to act on the request of Mrs Bishop to purchase a house to a purchase price of $360,000. If the parties consider it beneficial that the income from the balance of the settled fund be applied first towards the outgoings on that property and the balance of the income paid to Mrs Bishop then they can agree on the appropriate order. I have already indicated that they should prepare an appropriate order to allow substitution of residences as may be appropriate during various stages of the life of Mrs Bishop. While Mr White indicated this was his intention I consider that to avoid any further problem an order should be made that the debt of $320,000 due to the estate should be appropriated to the first defendant’s share in residue together with interest due on that amount since the date of death.

13 The claim of Mrs Bishop was not made against that part of the estate given under the will to her brother absolutely. Subject to any further argument, I consider that it is appropriate that the costs of both sides of the action of Mrs Bishop be paid out of the corpus of that part of the estate in which she has a life interest. Those of the trustees on the indemnity basis.

14 The parties are to bring in short minutes to give effect to these reasons.

Claim of Cyrus

15 Cyrus is an eligible person under what is usually described as Category (d) of the definition of eligible person under the Family Provision Act. For his claim to be allowed to proceed it is necessary to determine that there are factors which warrant its being made. This has always created some difficulties even bearing in mind the principles set out Re Fulop deceased (1987) 8 NSWLR 679. A difficulty arises because it might be thought that grandchildren or godchildren are “natural objects of testamentary bounty”, but that does not mean that such persons would always be considered persons having legitimate claims for provision or persons to whom the deceased owed some moral obligation to make provision for maintenance and advancement. As has been pointed out in Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639 the fact that there are factors which warrant the making of an application does not necessarily mean that an order will be made. In this case as it was not really argued that the application was not warranted; I proceed on the basis that it was. The assistance given by grandmother to grandson by way of accommodation and obviously some maintenance during difficult periods would at least put Cyrus above the normal position of grandchildren. But in view of the decision to which I have come this will not matter.

16 I do not consider that any case has been made to make provision for Cyrus, by way of inroad into the share of the estate given to the first defendant. Generally speaking although not always, a grandchild’s claim would be for provision out of a share that might otherwise have been thought to go, in ordinary circumstances, to a parent, deceased or living. Nor could it be accepted that the somewhat extravagant claims made for provision – albeit by way of trust – for separate housing, holidays to Scotland, motor vehicles and the like could be justified or that there was any obligation on the deceased to provide for such matters. At the present time, while living with his mother, Cyrus has sufficient income to provide for all his known needs. While he would like a motor vehicle, his state of health and lack of control on drugs and alcohol use, would mean it was not something which should be made available and certainly not something for which the deceased should have made provision. The medical evidence is that it is unlikely that Cyrus will be employable for any lengthy period. He is likely to remain on a disability pension for his life. His mother has said that while she is alive Cyrus will be provided with accommodation in any home she has as he is at the moment. That is the position even though the relationship is strained at times. Her life expectation is about 30 years. In the best of worlds mother and son might have separate houses but the Family Provision Act does not deal with the best of worlds.

17 Could it then be said that the deceased failed to make adequate provision for her grandson in failing to make provision for his accommodation after his mother’s death. In my view that need is so uncertain and so remote that it could not said, looking at the position at the present time, that the deceased should have made provision for this applicant by way of successive life interests or otherwise.

18 The claim of Cyrus should be dismissed. In accordance with s33 of the Act there should be no order as to the plaintiff’s costs. I will hear submissions on the costs of the defendants.

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