Cruickshank v Public Trustee

[2005] NSWSC 390

CITATION:	Cruickshank v Public Trustee [2005] NSWSC 390
HEARING DATE(S):	26/04/2005
JUDGMENT DATE :	26 April 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Master Macready at 1
DECISION:	Paragraph 36

CATCHWORDS:	Family Provision. Application by daughter suffering from Downes' Syndrome. Order made for a legacy. No matter of principle.
PARTIES:	Rhonda Cruickshank by her tutor the Protective Commissioner of NSW v Public Trustee - Estate of Beryl May Cruickshank
FILE NUMBER(S):	SC 5944 of 2002
COUNSEL:	Mr J. Armfield for plaintiff Mr L.J. Ellison for defendant
SOLICITORS:	E.H. Tebbutt & Sons Mr B.Maher

LOWER COURT JURISDICTION:

- 1 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER MACREADY

TUESDAY, 26 APRIL 2005

005944/02 - RHONDA CRUICKSHANK BY HER TUTOR THE PROTECTIVE COMMISSIONER OF NEW SOUTH WALES v PUBLIC TRUSTEE ESTATE OF BERYL MAY CRUICKSHANK

JUDGMENT

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Beryl May Cruickshank who died on 1 June 1997. The deceased was survived by her only child, the plaintiff, who is a Downes' Syndrome child, aged 53 years. Her husband had predeceased her. She was also survived by her friend, Ivy Kelly and her husband who had agreed to care for the plaintiff.

THE WILL OF THE DECEASED

2 The deceased made her last will on 12 December 1996. In clause 2 she appointed the Public Trustee of New South Wales as executor. She then made the following provisions in clauses III to VI which are relevant to the application.

“III. I give a life tenancy of my property known as 153 Flora Street, Sutherland (or any other property bought in its place as my principal place of residence) together with the furniture and furnishings in such property to my daughter Rhonda Cruickshank. On the death of my daughter such property is to pass to Richard Kelly and Ivy Kelly. If any such beneficiaries have not survived the lift tenant then their share shall pass (in equal shares) to their children if any of if no such children then the share shall be further divided (equally) among such residuary beneficiaries as are then living.

IV. I give the rest and residue of my estate to my Trustee to firstly create a fund sufficient to meet such of the outgoings and costs of maintenance of my real estate as my Trustee considers appropriate in its absolute discretion.

V. Should my trustee determine that there are funds in excess of what it considers necessary to pay all outgoings and maintenance of such real estate, such excess shall pass to the Handicapped Children's Centre NSW.

VI. I direct that my Trustee shall allow Richard and Ivy Kelly to reside with my daughter in my real estate without paying rent or being responsible for any outgoings.”

3 There are apparently no children of either Mr Kelly or Mrs Kelly. The use of the plural references in the second sentence of clause III causes great difficulties in the proper construction of the bequest. Does the second sentence only apply to a case whether both Richard and Ivy predecease the life tenant? Presumably not because the only other possible beneficiary is the Handicapped Childrens' Centre NSW and the use of the plural speaks against this. If the second sentence applies if only one dies before the life tenant, does Richard's share pass to the Handicapped Childrens' Centre NSW or does it pass as to a one quarter share to the Handicapped Childrens' Centre NSW and a one quarter to Mrs Kelly?

4 In the circumstances of this case I will assume for the purposes of this application that one half goes to the Handicapped Childrens' Centre NSW.

ASSETS IN THE ESTATE

5 The estate consists of the property, 152 Flora Street, Sutherland. There was modest cash in the estate but that has been expended. There is a deficiency in the estate of $681. Given the costs of the proceedings and also the Trustee's commission, it is clear that the property - which is still occupied by Mrs Kelly and her nephew, Gregory, who suffers Attention Deficit Hyperactivity Disorder - will have to be sold. Upon the sale of the property the following expenses will have to be met from the resulting proceeds.

A) The plaintiff's costs of $25,000.00;
B) the defendant's costs of $27,000.00;
C) the Public Trustee's commission on sale of $11,550.00;
D) vendor's tax of $10,000.00;
E) agent's commission and legal costs on sale $10,000.00

6 This is a total of $83,550 leaving a net residue of $356,450.

FAMILY HISTORY

7 I will deal with a little of the family history. Mrs Kelly was born on 13 July 1947 and the plaintiff, Rhonda Cruickshank was born on 14 March 1952. The deceased made a will, as I have said, on 12 December 1996. In early 1997, it is plain that the deceased started to get ill. At that stage Mrs Kelly would often go on occasions and take food to her, do her washing or otherwise help her with her household duties. There had been contact between them over many years. Mrs Kelly was well aware of the situation of the plaintiff and at about this time there was a discussion between Mrs Kelly and the deceased as to what would happen to the plaintiff. This is set out in Mrs Kelly's affidavit in these terms:

“8. On or about 1997, Beryl said to me:
“Would you take care of Rhonda?”
I believe Beryl asked me because she did not want Rhonda to move to a group home.
I replied:
“If that is what you want me to do, I will take care of Rhonda.”
I then asked Richard, my husband, who replied:
“That is find with me, as long as you can take care of her.”
I then said:
“I don't think it is fair to put her in a group home, it doesn't seem right to me.”
We both agreed that if Beryl was unable to take care of Rhonda or if she passed away, we would be her carers.”

8 On 1 June 1997 the deceased died and after a short time Mr and Mrs Kelly moved into the Sutherland property and started to care for Rhonda. Probate was granted on 8 October 1997 and the 18 month period for preparing an application expired on 1 December 1998. Mr Kelly died on 2 January 2000 and it was on 18 May 2000 that the Guardianship Tribunal ordered that the assets be subject to the management of the Protective Commission Act 1983 and that the management of the estate be committed to the Protective Commissioner. The Protective Office became aware of this on 1 June.

9 In July 2000 there were enquiries by the guardian as to what funds were available from agencies for the plaintiff's accommodation. Clearly this was a priority. There was concern about the matter in August 2000 and on 16 May 2001, there was an occupational therapist's function assessment completed by Rachelle Lewis. That recommended that the plaintiff be moved to more appropriate accommodation such as a group home. Almost immediately thereafter, the Public Guardian made application for funding under the Service Access System to the Department of Aging, Disability and Home Care

10 On 24 October 2001, the Protective Office gave instructions to the plaintiffs solicitors to give some advice. The advice was given without the benefit of Probate on 15 November 2001. The probate became available in December and in January 2003, there was reference made to the fact that an application for funds for accommodation and services for the plaintiff had been made. In March the plaintiff's solicitors suggested to the Protective Commission that until funding had been approved little can be done about selling the property.

11 On 20 May 2002 the plaintiff's solicitor received a letter from the Protective Office reappointing the Public Guardian with the role of deciding in relation to her accommodation. In August 2002 it still appeared no decision had been made and accordingly, the plaintiff's solicitor was asked to reconsider the matter and give further advice. In October he recommended that the summons be issued under the act. Instructions were given on 8 November and on 16 December 2002, the summons was filed approximately 4 years out of time.

12 On 29 February 2004, there was friction which occurred between the plaintiff and Mrs Kelly's son, Gregory was, as I have indicated suffering from Attention Deficit Hyperactivity Syndrome. Details of the circumstances surrounding it are not important to this case but, as a result, the plaintiff was transferred on 1 March to a respite centre awaiting group home placement. On 20 October 2004, she was admitted to a group home at 7 Trickett Road, Woolooware.

EXTENSION OF TIME

13 It is necessary for the Court to consider section 16 of the Family Provisions 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) (1974) 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 ill 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.”

14 In the present case, the plaintiff had always been a disabled person. The orders were only made under the Guardianship Act after the death of the deceased. One of the matters which is relevant is her disability which has the same effect as infancy. That infancy was relevant on the general discretion I have to make. It was assumed by Cohen J in Dare v Furness:

“This problem was referred to in the Report on the Testator's Family Maintenance and Guardianship of Infants Act 1916 by the Law Reform Commission of New South Wales (LRC 28,1977) pars 3.4-3.10. It was said at par 3.4 that the court treats with sympathy applications by persons under legal disability for extensions of time for the commencement of proceedings. The commission was unable to establish what it considered to be an appropriate resolution of this difficulty. Despite the reference to the general attitude of courts to applications for extension of time on behalf of infants, it is not easy to find any authorities which deal with that situation. The mere status of a plaintiff as an infant is obviously not itself a sufficient cause of an application not being made within the prescribed period. In my opinion it is a factor which must be taken into account when the court is considering the sufficiency of the reason for delay in the bringing of proceedings. In particular, where a parent or guardian of the child has caused or contributed to the delay, but there are some reasons to explain it, then the fact that the child was at all times dependent upon the acts of that parent or guardian will be a fact to add to the reasons in considering whether there has been a sufficient cause shown for the delay.”

15 I turn to consider the application for the delay after the death of the deceased. The plaintiff was looked after by Mrs Kelly and her husband in the deceased's house after she died. There is no evidence by her that she turned her mind to the plaintiff's financial affairs or interests although, of course, she attended to her physical needs. Mrs Kelly was not cross-examined. In her initial affidavit material, she made it plain she wanted the status quo under the will to be maintained and the first time there was any person having control of the plaintiff's affairs was on 17 May 2000 when the Protective Commissioner was appointed. He became aware of it on 1 June 2000.

16 In these circumstances, when coupled with the plaintiff's disability, I think there is a sufficient explanation up until 1 June 2000. At the time the order was made in 2000 the plaintiff was living in the subject property as a life tenant pursuant to the terms of the deceased's will. This continued through till May 2001.

17 The first time any consideration was given to obtaining different accommodation for the plaintiff was on 16 May 2001 when Rachelle Lewis recommended that the plaintiff should be moved to a group home. Fairly promptly in June 2001 the Public Guardian made an application to the department seeking consent for funding. The matter proceeded and was not finally resolved for quite some time. It was on 24 October 2001 that instructions were given to obtain advice under the act as to any application that the plaintiff might make under the act. That advice was received on 15 November 2001. The application for funding apparently still progressed and it became apparent by 21 August 2002 that that application was still being processed and no result had been achieved. For that reason, fuller advice was sought by the Protective Commissioner and that led to the application being lodged.

18 One of the problems that obviously emerges in this area is that different functions in relation to the plaintiff are dealt with by different departments. It is clear there was quite some delay in the approval for funding and that funding was necessary for the Public Guardian in order to properly provide for the plaintiff. Once it became clear that something ought to be done for the plaintiff steps were taken. There is no suggestion that there was in this case some delayed decision not to do anything in relation to the plaintiff. Clearly once relevant departments became involved they proceeded, although somewhat slowly, with the assessment of the plaintiff's condition and then in due course applying for funds in order to try and assist that problem.

19 Having regard to all these matters, I think there has been adequate explanation of the delay. There certainly has been no unconscionable conduct in the sense of that expression as explained in the authorities to which I have earlier referred.

20 The question of prejudice was raised. The initial delay was occasioned by the lack of action by Mrs Kelly. The only prejudice identified is the fact that she decided to withdraw from the Housing Commission waiting list. Having regard to the extent of what she might receive under the will, I think that any prejudice will not be sufficient to refuse an extension of time. Accordingly in the circumstances, I propose to extend time.

21 The plaintiff is an eligible person under the Family Provisions 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' et cetera 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 et 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 PLAINTIFF'S SITUATION IN LIFE

22 The plaintiff is 53 years old and now lives in a group home which appears to be well established with full funding. She does seem to have secure accommodation. The plaintiff receives pension entitlements of $608.20 per fortnight which is used up to 80 percent to 90 percent for her accommodation and other necessities. The Protective Commissioner holds $16,449.94 in trust for her.

23 The report of Rachelle Lewis of 16 May 2001 gives great detail of the disabilities of which the plaintiff suffers as a Downes Syndrome child. They are extensive and are common to persons suffering her disabilities. I will not set them out in detail. Although the deceased and Mrs Kelly provided home care to the best of their abilities, it is necessary for the plaintiff to now receive the type of care she gets in the group home.

24 It is necessary to consider, of course, the situation in life of any other persons who have a claim on the bounty of the deceased. The first of these is the Handicapped Childrens' Centre NSW. There is no evidence of any particular contact between the deceased and this centre during her lifetime. No evidence has been put on by the centre as to any particular matters that they wish me to take into account. It is plain that the deceased desired to benefit such a body or alternatively some other body having similar objects. As I say, the centre has put on no evidence and clearly I can assume there are no particular matters they wish to me consider when dealing with the application.

25 I turn to the situation of Mrs Kelly. Mrs Kelly is 57, widowed and has the care of her nephew who is aged 14 and as I have said, suffers from attention deficit syndrome. Her only assets are furniture and household goods worth about a thousand dollars. She has no liabilities. She receives a pension of $388 per fortnight and somehow manages to support herself and Gregory on that amount. It is plain she will have to move when the house is sold and she can expect to pay rent of some $210 to $280 per week. As I mentioned, she turned down an offer of Housing Commission accommodation in order to care for the plaintiff and will have to rejoin the Housing Commission waiting list with all its delays.

26 It is necessary to see whether the plaintiff has been left with adequate and proper provision for maintenance, education and advancement in life. It was suggested she has been so left, based on the help she will need to receive in future as a result of her condition. There is a recent report of Mary Morrow, a clinical psychologist who assessed the plaintiff in her new environment. Mrs Morrow was asked to address the likely services which the plaintiff will require including whether she should receive one to one training in social skills. She responded in these terms:

“Ms Cruickshank now resides in a small group home with trained staff that are able to devise and implement an individual program to maximise her abilities, including social skills training. Ms Cruickshank does not present with problematic behaviour, her social interactions and her sill level is commensurate with intellectual and functional capacity and individual social skill training (other than that done within the house and at Sylvanvale) would not be necessary.
Ms Cruickshank may require one to one, or individual care as she ages and when she begins to have more problems with mobility. If Ms Cruickshank became unable to attend Sylvanvale (due to age, decrease mobility, etc...) individual carer services such ass someone coming to the home for activities, or a massage, or taking her out for a drive, would need to be implemented. A carer service for 2-3 hours,2-3 times a week would cost approximately $300-400 per week.”

27 She was also asked to address whether it will be necessary to take into account the possibility of a future accommodation bond being required should it be appropriate for Rhonda to move into a hostel or aged care unit when she gets older. Her response was as follows:

“Ms Donna Milstead from DADHC and Ms Lisa McKenzie (from the group home) stated that Trickett Road provides a home specifically for older people with disabilities and that they support 'aging in place' (that people aren't transferred to another facility as they age). Both women stated that Ms Cruickshank 'will live here for life' and 'probably dies here' (as have other residents). If Ms Cruickshank was to transferred to another facility it would be due to deteriorating health, immobility etc...and the transfer would be to nursing home accommodation (given her extra needs) and serious consideration to Ms Cruickshank being admitted to an 'extra care facility' nursing home, where there are structures in place for extra services should be given. Extra care facilities are more expensive than routine nursing home, often several hundred dollars more a month, depending on facilities/service. If she does need to be admitted to a nursing home, a companion service such as the one described above would be desirable.”

28 She also mentioned the possibility of a special bed in due course.

29 Clearly the presence of the assistance would make a substantial difference in the quality of life of the plaintiff and if it can be provided it should be made available to the plaintiff.

30 It is plain, that having agreed to take on the care of the deceased's daughter, Mrs Kelly has a substantial claim on the bounty of the deceased. The deceased herself recognised this by making provision for Mrs Kelly and her husband to live in the property. It should be also noted that Mrs Kelly had the care of her nephew, Gregory.

31 It is necessary to address the way in which the provision for the plaintiff ought to be quantified. The plaintiff presently has a life expectancy of 31.5 years. The quantification of the claim was addressed in an affidavit of Mr Ivers of 7 April 2005. Basically he took information from Miss Morrow's report and provided for two, ten year periods, one from 65 to 75 and one from 75 to 85 years. Allowing the $350 per week for each of those, and a life expectancy of 20.5 years and using a figure of 802.3 on the 3 percent life tables, he came up with a figure of $280,805. He also provided for capital payment for a chair and bed of $5,000.

32 The problem about that calculation is that it makes no provision for deferral that is necessary from the present age of the plaintiff of 53 up until the year when she turns 65 and commences to have the need. If one does do the calculation based on deferring that amount of expenditure until 65, the capital amount that is necessary is $196,250.

33 The problem about all this is the extension of any deferment was not referred to in detail in Miss Morrow's report. All she said is the plaintiff may require one to one individual care as she ages when she going to have more problems with mobility. The calculations by Mr Ivers simply assumed 65 but it may well be such problems might occur earlier. The other thing about those calculation is that they take into account no discount for contingencies. There is nothing in the evidence which suggests, as a result of Downes Syndrome, the plaintiff will have any shortened life expectancy or that she is likely to be subject in the present environment to any greater risks. Although some allowance for contingencies should be made it should not be substantial.

34 There should be a substantial provision to the plaintiff and this will mean Mrs Kelly will not be able to consider any purchase of a property which would be next to impossible for her, given her income. They cannot remain in the property because of the fact it will have to be sold both to meet the costs of this application and the trustee's cost and that would have happened in any event in due course. She will, however, have sufficient funds to enable her to rent a home until she can obtain Housing Commission accommodation.

35 In the circumstances, I think the appropriate order is that the plaintiff should have a legacy of $200,000 the burden of which should first be borne by a share of the estate passing to the Handicapped Childrens' Centre NSW and accordingly it seems appropriate for me to make orders substituting provisions for those provisions which currently appear in clauses III to VI of the will.

36 Accordingly and subject to any submissions of counsel I order that in lieu of the provisions in clauses III to VI of the deceased's will, the plaintiff will receive a legacy of $200,000 and that the residue of the estate passes to Mr and Mrs Kelly. The costs of the plaintiff on a party and party basis and the defendant on an indemnity basis paid or retained out of the residual estate. Interest to be payable on the legacy if it is not paid within three months of today's date on and from that date at the rate provided for under the Wills and Probate Administration Act 1998. I also order that:

The time for the making of this application be extended up to and including the date of filing of the summons herein.
I reserve leave to apply for any necessary enforcement.

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