Carpenter v Carpenter

[2004] NSWSC 460

CITATION:	Carpenter v Carpenter [2004] NSWSC 460
HEARING DATE(S):	22/04/04
JUDGMENT DATE:	31 May 2004
JURISDICTION:	Equity Division
JUDGMENT OF:	Master Macready at 1
DECISION:	Paragraph 42
CATCHWORDS:	Family Provision. Application for provision from plaintiff's father's estate. Plaintiff already received assets from his mother's estate. Defendant son receives assets in father's estate. Proceedings in Queensland by parties in respect of mother's estate. Application dismissed.
PARTIES :	Gregg Douglas Carpenter v Keith Thomas Carpenter
FILE NUMBER(S):	SC 5946 of 2002
COUNSEL:	Miss J. Needham for plaintiff Mr L. Ellison for defendant
SOLICITORS:	Robbins Watson Macedone Christie Willis for defendant

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Master Macready

Monday 31 May, 2004

5946 of 2002 GREGG DOUGLAS CARPENTER v KEITH THOMAS CARPENTER

JUDGMENT

1 MASTER: This is an application under the Family Provision Act 1982 (NSW) in respect of the estate of the late Alfred Thomas Carpenter who died on 20 May 2002 aged 75 years. He was survived by the plaintiff and the defendant who are his two sons.

The last will of the deceased

2 The deceased left a will dated 13 February 1981 by which he left his estate to his son, Keith Thomas Carpenter, the defendant.

Assets in the estate

3 The main property held by the deceased at the date of his death was the property at 13 Chipilly Avenue, Engadine valued then at $400,000.00. He had shares in the Commonwealth Bank valued at $27,582.00. Those shares have been transferred into the defendant’s name upon the terms of a trust to which the defendant agrees. That trust is to hold the shares for the plaintiff’s two daughters to transfer the shares to them when they attain 25 years of age. The deceased had a bank account of some $12,300 and a vehicle worth $28,000.

4 All the assets have been transferred to the defendant and, indeed, shortly after the proceedings commenced the defendant had transferred one half of the property into the name of the second defendant who is his de facto partner. The parties are agreed that the property at Engadine is now valued at $550,000.00. At the date of death, the property was mortgaged to the extent of $200,000.00. This was not a debt of the deceased as he had allowed a mortgage over the property to provide funds for the defendant.

5 There are substantial costs incurred in both these proceedings and the Queensland proceedings to which I will refer later. The defendant’s costs in these proceedings are estimated at $43,165.65 and to date in the Queensland proceedings are $34,419.50. The plaintiff’s costs of these proceedings are estimated at $46,136.52 and the Queensland proceedings at $15,803.96 to date.

Family History

6 The deceased married Betty Carpenter in 1949 or 1950. The defendant was born 25 November 1953 and the plaintiff on 8 November 1957.

7 The deceased built the Engadine family home in 1960 and by 1972 things were not particularly happy in the household. In 1974 the deceased and his wife became estranged and they separated in 1975. The deceased’s wife, Betty, remained in the house while the deceased moved to Hurstville. In 1978 the deceased and his wife were divorced. In 1978 the deceased moved back into the Engadine property and at this stage he was still estranged from the plaintiff who had sided with the deceased’s wife in the divorce.

8 The defendant, Keith, married Dianna Burridge in 1978 but he separated from her in 1980 and was divorced in 1981. In 1980 the defendant commenced a de facto relationship with his present partner, Margaret Hargans.

9 On 13 February 1981 the deceased made his will which as I have already mentioned left his estate to the defendant.

10 Although there had been some rapprochement between the plaintiff and the deceased they became estranged again in 1984.

11 In 1986 the deceased retired from his employment and in 1987 he bought a property at Braidwood for $75,000.00 to which he moved. The purchase price came from his superannuation of $115,000.00. At that stage the defendant and his partner moved into the Engadine property where they still remain. They have expended $64,940.00 on renovations on the home and they have met all rates and expenses on the property during that period.

12 The plaintiff, Gregg, married on 25 February 1989 and was then living in Sydney. In 1992 he moved to Nowra about 100 kilometres or so from where the deceased was then living at Braidwood. By this time the plaintiff had children and it is clear that there were some visits to the deceased in the 1990s until the plaintiff moved in 1997to Queensland with his family.

13 In 1999 the defendant and his partner purchased a property at Batemans Bay for $193,000.00. In December 2001 the deceased sold his property at Braidwood for $120,000.00. He gave to his son and his partner $96,000.00 which was used to pay off their mortgage. On completion of the purchase of Batemans Bay the defendant then moved to live at the property at Batemans Bay.

14 In 2001 the deceased’s wife, Betty, was diagnosed with cancer and on 5 February 2002 she made a will leaving her estate to the plaintiff. At almost the same time as Betty was diagnosed with cancer, the plaintiff’s wife was also diagnosed with terminal cancer. Thereafter, the plaintiff, his mother and wife made arrangements for what should happen in the future. The plaintiff’s mother sold her house for $170,000.00 and an amount was given to the plaintiff in the sum of $164,000.00. At his mother’s request the plaintiff made substantial alterations to his home to make it look similar to his mother’s home and she moved in there with the intention of being able to help look after the plaintiff’s children.

15 The deceased’s wife, the parties’ mother, died on 7 May 2002 and the deceased himself died on 20 May 2002.

16 After the death of the deceased, the defendant and his partner sold the property at Batemans Bay for $290,000.00. Probate was granted in the deceased’s estate on 15 November 2002. The summons in these proceedings was filed on 16 December 2002 and on 4 February 2003 the defendant filed an application in Queensland for provision under the Succession Act 1981 (Qld) in respect of the estate of his mother.

17 In February 2003 the defendant transferred the Engadine property into his name and that of his partner. They were both aware of the existence of the New South Wales proceedings at that time. In August 2003 the defendant ceased his employment because of problems with his knees and obtained a disability benefit.

18 On 30 August 2003 the plaintiff’s wife, Dianna died. At the time of the hearing before me, the plaintiff was 46 years of age, his child Teegan 13 years, his child Breean 12 years and the defendant was aged 50 years.

Eligibility

19 The plaintiff is an eligible person under the Act. In applications under the Family Provision Act the High Court in Singer v Berghouse (No 2) (1994) 181 CLR 201 set out the two-stage approach that a Court must take. At page 209-210 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 for 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."

The situation in life of the plaintiff Gregg Douglas Carpenter

20 The plaintiff is 46 years of age, single with the responsibility of looking after his two teenage daughters who are 15 and 12 years of age. The plaintiff owns his house at Northwood Close, Robina in Queensland which is unencumbered and is valued at $450,000.00. He owns a Toyota Hilux surf model motor vehicle worth $15,000.00, a caravan worth $17,000.00, bank accounts of $4,500.00 and superannuation entitlements which he estimates at $35,000.00. The plaintiff is also owed the sum of $10,000.00 by his girlfriend, Monique Fleming. They commenced a relationship in November 2003 and she maintains her separate residence and given the evidence it seems appropriate to have regard to her resources when considering the situation of the plaintiff. The plaintiff works as a cleaner for the Queensland Department of Health and has recently reduced his hours of work following the death of his wife so that he can spend more time looking after his two daughters. He estimates that his take home pay per fortnight will now be about $800.00.00. He also receives an allowance for caring for his daughters and a family tax benefit of $426.70 per fortnight. The plaintiff deposes to the fact that he finds it difficult to maintain the children on this income but he has given no details of the breakdown of his expenditure at the present time. Surprisingly, the plaintiff has in recent times spent sums of $6,000.00 and $1,500.00 on jewellery and other items on his girlfriend to whom he is not engaged. This does not seem to indicate a careful approach to the needs of himself and his children.

21 As I have indicated in the chronology, the plaintiff received $164,000.00 from his mother from the sale of her house. Unfortunately the plaintiff was not very satisfactory as a witness so far as his knowledge of his own financial circumstances was concerned. He endeavoured to explain this on the basis that he left his finances to his wife to manage. She had of course died before the hearing commenced. It seems that in addition to the sum of $164,00.00 there are other monies which make a total of $200,000.00 which the plaintiff received from his mother’s estate. Apart from the extent to which these funds have resulted in assets now held by the plaintiff the significance of the provision from the mother is not important in this application. What is important are benefits received from the deceased during the lifetime of the plaintiff. As may be expected from the relationship to which I will turn in a moment there were no such benefits. There was no contribution by the plaintiff to the estate of the deceased.

22 It is necessary to consider the relationship between the plaintiff and the deceased. It is clear that from the time of the separation of his parents in 1975 the plaintiff took his mother’s side and had no further contact with his father. He says that he re-established contact with his father in 1980 but gives no details. It is also clear that he agrees that he was estranged in 1984 from his father because of the court case for the property settlement between his parents. Contact was re-established in 1991 after the plaintiff sent a copy of a photograph of his daughter to the deceased. It appears from statements he made to the defendant that from that time the deceased was interested in his grandchildren. From comments he made to the defendant one sees a picture of that interest was more in his granddaughters than in his son, the plaintiff. A telling answer given by the plaintiff in his cross-examination was that he did not expect to be left anything by his father. He only expected that his father would look after the grandchildren.

23 In 1992 the plaintiff and his family moved to Nowra and he gave evidence of having visited the deceased at his home at Braidwood. There are a number of photographs in evidence which suggest half a dozen or so visits over the years. The plaintiff and his family moved to Queensland in 1997. After that time the plaintiff and his family visited the deceased in 1999 and circumstances prevented any further contact.

24 It is clear that after the divorce the deceased did not want to see his son Gregg, no doubt as a result of the bitterness at that time. There was a resumption of contact during the last ten years of the deceased’s life and during this time the deceased enjoyed the company of his grandchildren. I have no doubt that the deceased was concerned for the plaintiff with his wife suffering from the same illness being suffered by his mother.

25 It is necessary to see how the plaintiff says he has been left without adequate and proper provision for his maintenance, education and advancement in life. The plaintiff has referred to these needs in his affidavits the most recent of which is his affidavit of 24 November 1003. In general terms these needs centre around sufficient funds to make adequate provision for his two young children. When assessing these needs it is important to realise that although the plaintiff has a legal responsibility to maintain his children while they are minors, his responsibility thereafter is somewhat different. In this case there has been no separate application by the plaintiff’s children and it is important that under the guise of considering the plaintiff’s needs that one does not consider the needs of some other person when they become an adult. The needs were expressed in submissions in the following terms:

(a) A lump sum to assist in providing care for his daughters while they are still young and while they and the plaintiff are recovering from the death of the plaintiff’s wife (as well as of his parents)
(b) Health care for the two girls:
(i) Eye surgery for Teegan $4,600.00
(ii) Eye surgery for Breean $4,600.00
(iii) Nasal surgery for Breean $3,000.00
(iv) General health expenses
(c) Secondary education expenses for his children, currently estimated
(i) $1,000.00 per annum each for uniform expenses (total $10,000.00 for two girls)
(ii) $1,000.00 per annum each for school books, fees et (total $10,000.00 for two girls)
(iii) Replacement of computers
(d) Liability for costs in both these and the Queensland proceedings.

26 Unfortunately on the recommendation of his wife the plaintiff did not take out medical insurance but that does not affect the fact that he will have to meet medical expenses. Accordingly, these are quite appropriate. Similarly, the education expenses referred to above are ones which will be the liability of the plaintiff and they are ones which he will have to meet. The plaintiff’s submissions were that he should receive a sum of $80,000.00 to $120,000.00 to take into account all the matters which I have set out above. An immediate matter is that there is no detailed future estimate of the plaintiff’s financial position which could be used in order to quantify a deficiency in his income and would lead the court to include a lump sum to cover such expenses.

27 It should also be noted that there is the provision of the shares which are held for the two girls which will no doubt assist them once they reach their majority and are able to call for the capital. Both girls have expressed a desire to proceed to university and this will be a sum which will assist them in this regard. There is also a sum of $40,000.00 which is held by the Public Trustee in trust for Breean. This is a payment in respect of a claim made for Breean’s hearing loss. According to the evidence the plaintiff is able to make application to the trustee to have these amounts used for expenses for Breean.

The situation in life of the defendant, Keith Thomas Carpenter

28 It is, of course, necessary to consider the situation of any other persons having a claim on the bounty of the deceased. In this case the only other person is the defendant, the deceased’s son. The defendant is aged 50 years and his partner is aged 49 years. They do not have any dependent children and they live in a property at Engadine which they both own. They owe a sum of $295,000.00 to Permanent Custodians Pty Ltd and there is provision to borrow a further sum of $55,000.00. The defendant has his tools of trade worth $5,000.00, a commercial van worth $15,000.00 and his interests in the contents of the home.

29 The defendant has had a number of jobs during his life ranging from bank officer to psychiatric nurse and running his own shipping container manufacturing business from 1984 to 1994. In 1978 he injured his left knee at work. As a result of his injury he has a substantial disability and he has recently received the invalid pension. A doctor has recommended a knee replacement at a cost of some $22,000.00. The defendant is deaf in both ears and wears a hearing aid in his left ear. This costs him some $500.00 to $600.00 per annum for servicing and he will need to replace the hearing aid at a cost of $4,000.00 in about four years time. At present, the defendant cannot afford to have the surgery to his knee but he is hopeful that after surgery and rehabilitation he may be able to get some work. However this must be subject to some doubt. His partner does not work and the partnership business, which they have, has been decreasing in its earnings. In the year ended 30 June 2003 they made a gross profit of some $16,300.00. The defendant’s situation is that he has received a disability pension of $380.90 per fortnight and he has received no other income since last August. Obviously he and his partner have been living on capital, which they arranged by way of provision of their current mortgage.

30 There was criticism of the defendant as to his credit and in particular to the fact that he had made false statement for the purpose of obtaining the loan over the estate property. Although this is clear I am satisfied that the defendant has given a fair account of his financial situation.

31 It is clear that the defendant had a close relationship with his father throughout his life and he looked after him from time to time. In submissions, attention was directed to the fact that the defendant had had free accommodation in the deceased’s house at Engadine from 1985. Although he may not have paid an occupation fee, the defendant and his partner spent $65,000.00 on renovations to the property during the time they lived there. In addition they met all the rates and taxes and other outgoings in respect of the property and this allowed the deceased to live comfortably on his property at Braidwood using his pension to meet his rates. It is also notable that the defendant and his partner purchased the property at Batemans Bay in 1999 and borrowed the whole proceeds for that purpose. This enabled the deceased to live closer to his doctors who were located at Batemans Bay. Clearly the purchase of this property was directed towards provision for the deceased and they installed a chairlift at a cost of some $7,300.00 to assist him to live in the property. The defendant and his partner paid all the outgoings for the Batemans Bay property while the deceased resided there. In December 2001 the deceased sold his property at Braidwood for $120,000.00 and from these proceeds the deceased bought himself his motor vehicle. At that stage he gave to the defendant the sum of $96,000.00 as a contribution to pay off their debts. They did so and after the deceased’s death the Batemans Bay property was sold for $290,000.00. The proceeds went to reduce their liabilities.

Consideration of the application

32 One of the extraordinary aspects of this matter is that the present proceedings in this State have come forward for a hearing without any resolution of the application brought by the defendant in Queensland. Those proceedings were subject to an application by the defendant to cross-vest the proceedings to New South Wales so that they could be dealt with at the same time as these proceedings. Although initially consenting, the plaintiff in these proceedings, the respondent in the Queensland proceedings, opposed the transfer and ultimately as a result of a decision by Muir J on 3 March 2004 the application for transfer was refused. In his judgment, His Honour was reluctant to transfer the proceedings and interfere with the present date allocated for this matter’s trial. He went on to say:

“More importantly though, the attractiveness of Ms Heyworth-Smith’s argument is dramatically diminished when one has regard to the evidence of the value of the Queensland estate. It is submitted that there is a dispute about the size of the estate but the applicant’s own solicitor in Sydney deposed in November 2003 that:
‘The value of the estate, subject of the Queensland proceedings, appears to be nominal, being comprised solely of personal chattels.’
The respondent has sworn to the value of the estate and his evidence concurs with that of the applicant’s solicitor. That being the case it is difficult to see how any other issue over the precise quantification of the Queensland estate and the entitlements of the protagonist to it can have a material impact on any order made in the New South Wales proceeding.
Of more relevance to that proceeding is the asset position of the respondent rather than the means by which he acquired his assets.”

33 It is apparent that the Queensland Act does not have provisions which equal the notional estate provisions in the New South Wales Act although there is some ability to claw back the assets of the defendant. On the evidence before me I cannot form a view as to whether there is any likelihood of success in the Queensland proceedings but obviously there are substantial costs that both parties have incurred in New South Wales and Queensland.

34 At the opening of the hearing before me the defendant gave the following undertaking to the Court:

“ELLISON: The defendant undertakes to the court and to the plaintiff that if these proceedings are dismissed the defendant will file in the Queensland court proceedings a notice of discontinuance or the equivalent title document to bring these proceedings to an end.
MASTER: Do I take it the cost consequences follow that the plaintiff pays the defendant’s costs in Queensland?
ELLISON: It is proffered on that basis. I have not referred to costs in the New South Wales proceedings but it would be my application if there was a dismissal costs would follow the event.”

35 Thus if these proceedings are dismissed the Queensland proceedings will be dismissed and the plaintiff in these proceedings is only at risk as to a costs’ order in these proceedings.

36 In his written submissions the plaintiff gave the following undertaking:

“The plaintiff hereby undertakes to this court that if he is granted provision in these proceedings, he will consent to the first defendant herein filing a notice of discontinuance in the Queensland proceedings with no order as to costs.”

37 The defendant is not bound by this undertaking and could still proceeding with the Queensland proceedings.

38 The defendant transferred the property which he received under the will of the deceased into the names of him and his partner when they both knew that the plaintiff had brought the present proceedings. The property had been mortgaged at the date of the death of the deceased for the defendant’s purposes and there have been movements in that loan account. This has been a result of the defendant’s necessary expenditure given his medical condition and the sale of the Batemans Bay property once that was no longer needed by the deceased. In these circumstances there are no particular section 27 factors which would normally inhibit a court if it were minded to make an application from declaring as a notional estate the equity in the property at Engadine.

39 It is necessary to look carefully at the situation of both brothers to see if one can form a view whether the present application should succeed. So far as assets are concerned, the plaintiff lives in an unencumbered house worth $450,000.00 and the defendant and his partner live in a house worth $550,000.00 which has a mortgage of approximately $300,000.00. The plaintiff is younger than the defendant, he is in full time employment and in good health. He receives a carer’s allowance and family benefits. The defendant is simply existing on the disability pension. The plaintiff has superannuation of some $35,000.00 and the defendant has no such benefit. As I have mentioned the plaintiff is in good health but the defendant is in a difficult situation and requires extensive knee surgery to make him mobile. The defendant is in a difficult situation in that he has repay the loan on the house at the rate of $2,000.00 per month. His present situation must be only temporary.

40 If one turns to consider the relationship between the two brothers and their father over the father’s lifetime a different picture emerges. For reasons which he then thought appropriate the plaintiff chose to have no contact with his father for a substantial part of his father’s life. This was a matter of great disappointment to the deceased. The defendant on the other hand had a long and close relationship with his father and provided him with care and housing towards the end of his life.

41 If one takes these circumstances into account it seems to me that the difficult situation the defendant is in at the moment should not be compounded by an order for what really should only be a small amount of provision to the plaintiff so that he can look after his children. There are the trust funds which will help in part to relieve those expenses. As I can form no view as to the outcome of the Queensland proceedings I put any effect that they may have to one side.

42 In the circumstances I dismiss the plaintiff’s application and I will hear the parties on costs.

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Last Modified: 06/01/2004