Colbourne v Colbourne

[2020] NSWDC 37

District Court

New South Wales

Medium Neutral Citation:	Colbourne v Colbourne [2020] NSWDC 37
Hearing dates:	12 & 13 February 2020
Date of orders:	13 February 2020
Decision date:	13 February 2020
Jurisdiction:	Civil
Before:	Judge Levy SC
Decision:	See paragraph [19]
Catchwords:	SUCCESSION – approval of settlement of a claim for provision to be made for a disable person out of a deceased estate
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 98 District Court Act 1973 (NSW), s 134 Succession Act 2006 (NSW), s 59, s 60(2)
Category:	Procedural and other rulings
Parties:	Richard Colbourne (Plaintiff) Sarah Colbourne (Defendant) The Official Trustee in Bankruptcy as Trustee of the Bankrupt Estate of Adam Colbourne (Interested party)
Representation:	Counsel: Mr S Radburn (Solicitor for Plaintiff) Mr C Simpson (Defendant) Ms M Bateman (Interested party)   Solicitors: Somerville Laundry Lomax (Plaintiff) Baker Mannering & Hart (Defendant) Harris Carlson (Interested party)
File Number(s):	2019/269852
Publication restriction:	None

Judgment

Nature of case

1. I have before me two competing interlocutory applications in proceedings brought pursuant to s 59 of the Succession Act 2006 (NSW). This Court has jurisdiction as the proceedings involve an amount less than $250,000: s 134 of the District Court Act 1973.

Factual background

2. The plaintiff, who proceeds by way of a tutor, is an 89 year old man who has dementia. He resides in an aged care facility. He has substantial ongoing maintenance and care needs because of that condition. On the evidence, those needs will more likely than not, increase over the remainder of his life expectancy, which is uncertain.

3. The plaintiff is a widower. His wife died on 31 August 2018, aged 80 years; having made a new will shortly beforehand, leaving her whole estate to her two children, whom she had with the plaintiff. In those circumstances, after 58 years of marriage, the plaintiff has reasonable expectations for his maintenance and care needs to be provided for out of his late wife's estate.

4. The estate essentially comprises half the value of the matrimonial home, now estimated to be in the rounded sum of $140,000. The estate had two executors, these being the plaintiff's children, Sarah Colbourne, who is the defendant in these proceedings, and her brother, Adam Colbourne. Those siblings are the equal beneficiaries of their late mother's estate.

5. Adam Colbourne has renounced his role as executor of his mother's estate. He has done so in awareness of the plaintiff's claim against the estate. He has not sought to participate in these proceedings. He does not resist the claim made by his father. He makes no claim of his own, as is his right. That right exists notwithstanding that he remains a bankrupt until the statutory discharge period expires on 16 February 2020 absent another application to delay that process.

6. The first application in time is made jointly by the plaintiff and defendant for approval of a proposed settlement of the proceedings, with the effect that the plaintiff receives the whole of the distributable proceeds of his late wife's estate. The second application comprises a notice of motion filed on 10 February 2020, by the Official Trustee in Bankruptcy as the Trustee of the bankrupt estate of Adam Colbourne. The Official Trustee seeks to be heard in opposition to the proposed settlement. At the commencement of the hearing leave was granted for the Official Trustee to be heard on that question.

Evidence

7. The evidence on the plaintiff’s application for approval of the settlement, comprises the affidavits of the tutor, Mr Kostantinos Papadopoulos, sworn 29 August 2019 and 10 February 2020, and that of Mr Sean Radburn, solicitor, sworn 10 February 2020. The evidence relied upon by the defendant comprised the affidavits of the executor, Ms Sarah Jane Colbourne, sworn 1 May 2019 and 27 September 2019, and the affidavit of Mr Stephen Hart, solicitor, sworn 7 February 2020. On the application to intervene, the Official Trustee relied upon an affidavit sworn by Ms Meghan Sullivan, on 12 February 2020 and the affidavit of Ms Bronwyn Barber sworn on 3 February 2020. In addition, documentary evidence comprised, the plaintiff's notice of claim and Exhibit A, which contained costing details applicable to his care in residential aged care accommodation, on the assumption he is to be cared for at St Joseph's Nursing Home in Lismore. A Court Book, Exhibit B, was tendered containing the above affidavits and the related documents referred to in those affidavits.

Submissions of the parties

8. The Official Trustee, standing in the place of the bankrupt who makes no claim of his own, submitted that the plaintiff had available to him sufficient funds to satisfy his reasonable needs for maintenance, accommodation and reasonable expenditure, and that approval of the settlement should be withheld because the Official Trustee wishes to participate in the distribution of the deceased's estate in equal shares with the defendant, following which, any residue could go to the bankrupt. I consider that to be a difficult position to maintain where the bankrupt makes no claim himself, in circumstances where he has an unfettered right to do so. The submission made by the Official Trustee is problematic as it plainly involves double counting of the plaintiff’s remaining financial resources.

9. The defendant executor, supported by the plaintiff through his tutor, submitted that the proposed settlement should be approved as fair, reasonable and appropriate, having regard to the considerations set out in s 60(2) of the Succession Act 2006.

10. The application for approval is made in circumstances where the plaintiff's own funds are plainly insufficient to meet his reasonable needs, both at present, and as anticipated in the future, to provide for his adequate and proper maintenance in dignified accommodation and care, including access to private health care when required, rather than being subject to the vagaries and delays associated with the public health care system, including allowing for likely adverse contingencies.

Determination

11. I find that, following on from a 58 year marriage and a satisfactory life together, the deceased had a moral obligation to effectively and adequately provide for the plaintiff in her will, in recognition of the benefits and mutual support that came from that relationship. That obligation did not cease when the plaintiff went into a nursing home in 2017.

12. The plaintiff has substantial care needs relating to his condition of vascular dementia. He has occasions of lucidity, awareness and recognition. He is in receipt of $926.20 per fortnight being the aged care pension, and those monies are substantially taken up with nursing home expenses and care fees. He is likely to progress into a need for higher levels of care in the near future, and he will be required to pay $325,000 as an aged care accommodation bond, which will enable him to live in dignified, non-shared accommodation, with appropriate levels of care.

13. In all likelihood, as the plaintiff ages, and since he is at risk of incurring falls, reasonably, he will need random access to private health care, including specialist care, without having to endure lengthy delays associated with the public health system. This need is likely to arise on an unpredictable basis and is likely to represent a significant source of future expenditure. A cash reserve will therefore be required in his account for that purpose.

14. I reject as unreasonable the position taken by the Official Trustee, which would, in effect, require that the plaintiff live in less dignified, dormitory style, shared accommodation, without separate bathroom facilities, and not in his own room, as would otherwise be his reasonable expectation after a 58 year marriage. That regime, as contended for by the Official Trustee, is artificial, unrealistic, and not in accordance with the plaintiff’s reasonable expectations following a 58 year marriage that involved continued mutual support.

15. The testator's obligation to the plaintiff required that he be provided with a higher standard of dignified existence than that contended by the Official Trustee, especially since he was already in a nursing home and in declining health at the time the deceased made her latest will, which inexplicably changed the previous position that prevailed, namely mutual wills in favour of each other.

16. The consent orders now propose a settlement that recognises and restores the position. I consider the proposed consent orders to be appropriate to the circumstances, and reasonable. I consider that the plaintiff and the defendant have satisfied me as to the factors required to be considered within s 60(2) of the Succession Act 2006, and that no disentitling factors have been demonstrated in the evidence. I therefore approve the settlement and will make orders to that effect.

Costs

17. In my view, the costs of the summons seeking approval of the settlement, should be paid out of the estate on an indemnity basis. The Official Trustee maintained that his costs ought to be paid out of the estate. I do not accept that position, especially where the bankrupt has chosen not to exercise his rights to make a claim against the estate and where the Official Trustee, on the substantive issue, made submissions that proceeded on an unacceptable basis. The Official Trustee’s motion should be dismissed. The Official Trustee should consequently bear the costs of the notice of motion that opposed the approval of the settlement.

18. Having heard the parties on the question of costs, pursuant to s 98 of the Civil Procedure Act 2005 (NSW), I propose to assess those costs on a gross lump sum basis, applying the broad brush discounted approach that is required in such circumstances. As to the defendant's costs, I assess them in the sum of $3,250. As to the tutor's costs, I assess them in the sum of $1,250. I consider that those costs should be paid by the Official Trustee.

Orders

19. I therefore make the following orders:

1. Pursuant to s 59 and s 60 of the Succession Act 2006; within 28 days of making these orders, by way of provision, the defendant pay to the plaintiff all of the net distributable estate.

2. Should the defendant fail to pay any sum to the plaintiff within the time specified in these orders, the defendant is to pay the plaintiff interest of any sum outstanding at the rate prescribed in the Civil Procedure Act.

3. The plaintiff's costs, as agreed are assessed on a party/party basis, are to be paid by the estate.

4. The estate costs are to be paid on an indemnity basis from the estate of the deceased.

5. The notice of motion filed by the Official Trustee is dismissed.

6. The Official Trustee is to pay the defendant's costs of the dismissed notice of motion on a gross lump sum cost basis, in a sum of $3,250.

7. The Official Trustee is to pay the tutor's costs of the dismissed notice of motion in the gross lump sum of $1,250.

8. The parties have liberty to apply for consequential and ancillary orders for the purpose of giving effect to the orders and notations, which now follow.

Notations

20. The notations are as follows:

1. The application is made within time.

2. The plaintiff is an eligible person.

3. The plaintiff has served a Notice identifying all other eligible persons on the Administrator at the time of serving the summons.

4. The Administrator has filed the Administrator's affidavit; an affidavit of service of the Notice of the plaintiff's claim on every person who is, or who may be, an eligible person, as well as upon any person beneficially entitled to the distributable estate, and on any person holding property of the estate as trustee or otherwise.

5. The Administrator has filed an appearance.

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Decision last updated: 06 March 2020