Di Salvo v Public Trustee

[2009] NSWSC 894

CITATION:	Di Salvo v Public Trustee [2009] NSWSC 894
HEARING DATE(S):	23 March 2009
JUDGMENT DATE :	31 August 2009
JUDGMENT OF:	McLaughlin AsJ
DECISION:	1. I order that, in lieu of the provisions of clauses 4 to 14 of the will of the late Robert Lawrence Heron (“the Deceased”), the Plaintiff receive absolutely the house property at Mt Pritchard. 2. I order that, in addition to the benefit given to her by order 1 hereof and in addition to the other benefits given to her by the will of the Deceased, the Plaintiff receive from the estate of the Deceased a legacy in the sum of $10,000, such legacy not to bear interest if paid on or before 31 September 2009, and if not so paid to bear interest at the rates prescribed for unpaid legacies by the Probate and Administration Act 1898. 3. I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased. 4. The exhibits may be returned.
CATCHWORDS:	SUCCESSION - family provision - Plaintiff an eligible person - whether Plaintiff was the de facto partner of Deceased or whether she comes within some other category of eligible person - will gives Plaintiff a determinable and conditional right of residence in Deceased's house property - financial and material circumstances of Deceased - whether Plaintiff has been left without adequate provision for her proper maintenance - competing claim of other beneficiaries.
LEGISLATION CITED:	Family Provision Act 1982 Property (Relationships) Act 1984
CATEGORY:	Principal judgment
CASES CITED:	Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 19
PARTIES:	Maria Di Salvo (Plaintiff) Public Trustee (Defendant)
FILE NUMBER(S):	SC 5012 of 2007
COUNSEL:	Mr L. Ellison SC (Plaintiff) Ms V. Hartstein (Defendant)
SOLICITORS:	Marsdens Law Group (Plaintiff) Anthony Lentini (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Monday, 31 August 2009

5012 of 2007 MARIA DI SALVO –v- PUBLIC TRUSTEE

JUDGMENT

1 HIS HONOUR: These are proceedings under the Family Provision Act 1982.

2 By summons filed on 16 October 2007, Maria Rose Di Salvo claims an order for provision for her maintenance and advancement in life out of the estate of the late Robert Lawrence Heron (to whom I shall refer as “the Deceased”).

3 The Deceased died on 22 August 2007, aged 86. He left a will dated 26 April 2007, probate whereof was on 23 January 2008 granted to the Public Trustee, the executor named in such will (who is the Defendant to the present proceedings).

4 The inventory of property discloses the following assets,

House property at Mt Pritchard
Moneys in banks and financial institutions, totalling $164,522
Shares in companies, totalling $50,186

5 At the present time most of the assets of the estate (apart from the house property at Mt Pritchard) have been realised. The proceeds of those realised assets have been applied to meet the liabilities of the Deceased and testamentary and administrative expenses, and the balance has been invested.

6 The estate assets now consist of,

House property at Mt Pritchard (estimated value) $490,000
Shares and other securities, totalling $28,813
Public trustee estate ledger balance $145,260
Total $664,073

7 The outstanding estate liabilities include the Public Trustee’s commission on the realty and shares, and administration expenses, including GST, totalling an estimated amount of $8,500.

8 In calculating the value of the estate available for distribution the costs of the present proceedings should be taken into consideration, since the Plaintiff, if successful, will normally be entitled to an order that her costs be paid out of the estate of the Deceased, whilst the Defendant, irrespective of the outcome of the proceedings, will normally be entitled to an order that his costs be paid out of the estate. It was estimated that the Plaintiff’s costs will total $57,000, whilst it was estimated that the Defendant’s costs will total $30,000. That is, the totality of the costs of both parties of the present proceedings will be about $87,000.

9 It is prudent, therefore to proceed upon the basis that the distributable estate has a total value of about $568,500.

10 By his will the Deceased gave three legacies, of $5000 each, to Guide Dogs Association of NSW and ACT, Heart Research Institute and a friend, Eric Oppel (which legacies have already been paid). Accordingly, there will remain an amount of about $553,000, available for distribution (of which about $490,000 is represented by the house property).

11 By his will the Deceased gave to the Plaintiff a right of residence for life in the Mt Pritchard property (determinable in certain circumstances by the Defendant), subject to the payment by the Plaintiff of certain specified outgoings in respect to that property. The Deceased also gave to the Plaintiff his household goods (which phrase is defined in clause 3.1 of the will, and essentially includes all contents of the house property).

12 The Deceased gave the Mt Pritchard property, after the termination of the Plaintiff’s right of residence therein, to the Heart Research Institute and the Guide Dogs Association of NSW and ACT.

13 After payment of estate liabilities the Deceased directed that the residue of his estate (apart from the house property) should be held by the Defendant on trust for the Plaintiff, the terms of that trust being set forth, and its purpose being described as, “to provide for the welfare and happiness of Maria”. Any capital of that trust remaining at the termination thereof, the Deceased gave to the foregoing two entities.

14 The plaintiff was born in March 1952, and is presently aged 57. She left school at the age of 15, having attained only a very limited ability to read and write.

15 In 1968 the Plaintiff met the Deceased, and commenced to work for him in his pet shop. He soon thereafter commenced a sexual relationship with the Plaintiff, who at that time was aged no more than 16, and was totally inexperienced in sexual matters. The Deceased was aged 47. Since the Plaintiff suffers from a degree of intellectual disability, the Deceased’s conduct towards her was less than honourable. In consequence of the Deceased’s relations with her, the Plaintiff fell pregnant on two occasions, giving birth in March 1970 to a child who died shortly thereafter, and giving birth in February 1974 to a child whom the Plaintiff never saw, and of whose fate the Plaintiff remains unaware.

16 At the Deceased’s behest the Plaintiff went to live with him at his residence in Bonnyrigg in mid-1973. She remained living with him from that time until his death some 34 years later, first at Bonnyrigg and later at the house property at Mt Pritchard, which the Deceased acquired in 1986.

17 Despite his promises made to the Plaintiff when she first commenced to work for him in the pet shop, the Deceased did not ever pay the Plaintiff a wage. In 1970 the Plaintiff commenced to receive a disability support pension. After she moved into residence with the Deceased the totality of that pension was used for household expenses and outgoings for herself and the Deceased.

18 During the Deceased’s declining years the Plaintiff was his principal carer, being assisted in that role by other members of her family, in particular, by her sister Angela, who resided in reasonably close proximity to the Mt Pritchard residence.

19 At the present time the Plaintiff’s sole income is a disability support pension of $562 a fortnight, plus a pharmaceutical allowance of $6 a fortnight. The Plaintiff provided details of her expenditure, which includes telephone ($50 - $70 a month), electricity ($80 - $90 a quarter), food and veterinarian expenses for her pet animals, being two dogs, two sheep and a cat ($30 - $50 a week).

20 The Plaintiff, who since the Deceased’s death has continued to reside on her own in the Mt Pritchard house, relies upon assistance from her sister Angela in many of her daily activities, including shopping and banking. Nevertheless, the Plaintiff is capable of looking after herself at home, attending to the housekeeping and maintaining her pets. The Plaintiff usually eats at her sister’s residence, and contributes at least $100 a fortnight towards those meals. The Plaintiff does not own a motor vehicle or hold a driver’s licence. When necessary, her sister drives the Plaintiff, who contributes to the cost of petrol. The Plaintiff’s only asset, apart from the benefits to which she is entitled under the will of the Deceased, consists of an amount of about $1,100, which she maintains in her bank account in case of any emergency.

21 The Plaintiff has suffered from asthma for all her life. She now also suffers from high blood pressure, for which it is necessary for her to take medication.

22 The claim of the Plaintiff must be approached in the light of any competing claims upon the testamentary bounty of the Deceased. The only such claims are those of the two entities mentioned in the will, which each receive a legacy of $5,000, the interest in remainder in the house property, and any ultimate residue remaining in the estate. There was placed in evidence, on behalf of the Defendant, the 2006 Annual Report of the Heart Research Institute and the 2007 Annual Report of the Guide Dogs Association of NSW and ACT. (The Plaintiff does not seek to disturb the legacies to those entities and to the other named beneficiary.)

23 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff.

24 I have had the benefit of receiving a written outline of submissions and a chronology from Counsel for the respective parties. Those documents will be retained in the Court file.

25 The Plaintiff asserts that she is an eligible person within paragraph (a) of the definition of that phrase contained in section 6(1) of the Family Provision Act, in that she was a person with whom the Deceased was living in a domestic relationship at the time of the Deceased’s death. The phrase “domestic relationship” is defined (by reference to the Property (Relationships) Act 1984) as being:

(a) a de facto relationship, or
(b) a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.

26 The Defendant denied that the Deceased was living in a domestic relationship with the Plaintiff at the time of his death. However, the Defendant acknowledged the status of the Plaintiff as an eligible person within paragraph (d) of the definition of that phrase, being a person

(i) who was, at any particular time, wholly or partly dependent upon the deceased person; and
(ii) who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of a household of which the deceased person was a member.

27 At the outset, it is necessary to establish the appropriate category within the definition of eligible person which has application to the Plaintiff.

28 The Deceased took advantage of the Plaintiff’s youth, inexperience and limited intellectual capacity when she was aged only in her mid-teens, and he was aged in his late forties, to seduce her. The consequences of that conduct, especially the two unexpected and undesired pregnancies and births of children to the Deceased, can only have had a serious and deleterious effect upon the Plaintiff and her emotions.

29 Despite that conduct of the Deceased towards her, the Plaintiff resided with the Deceased for of thirty-four years. The Plaintiff assisted the Deceased in his pet shop and, when he disposed of that business, in establishing the gardens in his new residence at Mt Pritchard. From her disability pension she contributed towards the Deceased’s expenses and outgoings, and was the homemaker and was the carer for the Deceased during his declining years. Throughout the relationship the Plaintiff did washing, cleaning and cooking for the Deceased, and helped with the care of his many pets and animals.

30 During the period of cohabitation the Deceased frequently had sexual intercourse with the Plaintiff, and also frequently with other women in his home (to the embarrassment and shame of the Plaintiff).

31 Evidence was given that the Deceased on occasion referred to the Plaintiff as being his “boarder”. She was also identified as his next of kin upon his various hospital admissions, being described on those occasions as his “friend”. Also, on occasion, she was described as his “carer”. The various statements made by the Deceased in regard to the status of the Plaintiff and her relationship with him are admissible by virtue of section 32 of the Family Provision Act. However, the Court is not required to accept unquestioningly the truth of such statements, any more than it must accept unquestioningly the truth of disputed evidence given by a living witness.

32 There is no doubt that during his lifetime the Deceased’s conduct towards the Plaintiff was quite dishonourable. Because of his conduct towards her, little weight should be given to the statements of the Deceased regarding the Plaintiff’s status in his household. Further, it is possible that the shame for his conduct (if the Deceased was capable of such an emotion) would have been motive enough for him to describe his relationship with the Plaintiff in terms that were less than truthful.

33 In his last will the Deceased went some way to making amends towards the Plaintiff. However, his statements that the Plaintiff was only a boarder in his household do not, in my conclusion, accurately reflect her status or role therein. I am satisfied that the Plaintiff and the Deceased were living in a de facto relationship at least from the time when the Plaintiff moved into residence with the Deceased at Bonnyrigg in mid-1973 and that they remained in that relationship until the death of the Deceased thirty-four years later.

34 Even if, contrary to my foregoing conclusion, the Plaintiff and the Deceased were not in a de facto relationship, there can be no doubt that they were in a close personal relationship throughout the period while they were living together. Throughout that period the Plaintiff was providing the Deceased with domestic support and personal care, and, even on the case for the Defendant, the Deceased was providing the Plaintiff with domestic support and personal care, especially by providing her with accommodation.

35 Since I am satisfied that the Plaintiff is an eligible person within paragraph (a) of the definition of that phrase in section 6 (1) of the Act, it is not necessary (as the Defendant would have it, if the Plaintiff were an eligible person only within paragraph (d) of that definition) for the Plaintiff to establish, pursuant to section 9(1) of the Act, that there are factors which warrant the making of the present application.

36 Since the Plaintiff is an eligible person, she has the standing to bring the present proceedings.

37 According to the evidence of the Defendant, the Deceased on the occasions when he made various wills at the office of the Defendant, stated that he had at one stage been married, in 1955, and that he had subsequently been divorced, in about 1965. No other information was available concerning the former wife of the Deceased, Iris Joyce Annesley, whom he married on 20 May 1955. Apart from such former wife, the Plaintiff is the only eligible person in relation to the Deceased.

38 It would appear that the Defendant has not served a notice of claim upon the Deceased’s former wife. However, since that marriage came to an end in about 1965, more than forty years before the death of the Deceased, I consider that the interests of that former wife, even if she be alive, may properly be disregarded.

39 In carrying out the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208 – 210 (the correctness of which test was affirmed by the High Court in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191) the Court must determine whether in consequence of the provisions of the will of a testator the applicant has been left without adequate provision for her proper maintenance.

40 The High Court in Singer v Berghouse (at 209 – 210) said that the determination of the first stage

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.

41 It has already been observed that Plaintiff does not drive and does not own a motor vehicle. She expressed a desire to remain living in the Mt Pritchard house, where she had resided for the past twenty-three years. She said that she liked living in that house and that she felt comfortable there. Her sister and her family reside in that locality and the Plaintiff frequently has meals with them and relies upon her sister for transport, as well as for assistance when she goes shopping and attends to her banking.

42 By the terms of the will the Plaintiff is allowed an exclusive right of residence in the Mt Pritchard property (which may be determined by the Defendant in certain circumstances), subject to payment by her of certain outgoings and expenses. Those testamentary provisions by the Deceased have the effect of tying the Plaintiff to the Mt Pritchard residence, irrespective of changes in the Plaintiff’s circumstances, such as her health, and of depriving her of flexibility in making decisions about where she might wish to reside.

43 The will contains no provision even for the acquisition of a substitutionary residence in which the Plaintiff might have exclusive occupation, if the Mt Pritchard residence ceases to be appropriate to her circumstances.

44 The Defendant recognised that, in the event that it be found that adequate provision had not been made for the Plaintiff, it was appropriate that the Plaintiff receive an order in the nature of a Crisp Order (Crisp v Burnsfield Trustee Company Limited, unreported, 18 December 1979, Holland J).

45 I am entirely satisfied that by the terms of the Deceased’s will the Plaintiff has been left without adequate provision for her proper maintenance.

46 I have already observed that the claim of the Plaintiff must be considered in the light of any competing claims upon the testamentary bounty of the Deceased, and that the only such competing claims are those of the Guide Dogs Association of NSW and ACT and the Heart Research Institute, which are, other than the Plaintiff, the only significant beneficiaries named in the will of the Deceased. There was no evidence to suggest that the Deceased had any connection or contact with those entities during his lifetime. Apart from their respective Annual Reports, no evidence was adduced from either of those two charities, indicating any specific needs which might be met from the benefit given to each of them under the will of the Deceased, or how either of those entities proposes to use any benefit which it might receive from the estate of the Deceased.

47 In my conclusion the completing claims of those two entities will not have the effect of reducing, let alone extinguishing, any provision out of the estate of the Deceased an entitlement to which the Plaintiff might otherwise have established.

48 I consider that the Plaintiff is entitled to have security and flexibility in her accommodation and her living arrangements. The most appropriate way in which that result can be achieved is for the Plaintiff to receive the Mt Pritchard property absolutely. I propose to make an order to that effect.

49 It was submitted on behalf of the Defendant that, because the Plaintiff had difficulties in reading and writing, and in handling finances, the Defendant should retain control of any further benefit which the Plaintiff might receive, so that such benefit should not be allowed to fall into the hands of the Plaintiff’s relatives or of anyone else who might seek to take advantage of her.

50 It should be recognised, however, that any limitation on the Plaintiff’s ability to handle money does not constitute a reason for depriving her of the provision to which she is entitled.

51 Not only should the Plaintiff receive the house property absolutely, but she should also receive some relatively small legacy, which will enable her to have the benefit of a fund with which to meet unexpected contingencies and over which the Defendant should not have exclusive control. I consider an amount of $10,000 to be appropriate.

52 It will be appreciated that the two residuary beneficiaries will still retain an interest in the estate, in that they will be entitled to share the balance of the capital of the trust created by the will for the benefit of the Plaintiff which will remain after the termination of that trust.

53 Accordingly, I make the following orders,

1. I order that, in lieu of the provisions of clauses 4 to 14 of the will of the late Robert Lawrence Heron (“the Deceased”), the Plaintiff receive absolutely the house property at Mt Pritchard.
2. I order that, in addition to the benefit given to her by order 1 hereof and in addition to the other benefits given to her by the will of the Deceased, the Plaintiff receive from the estate of the Deceased a legacy in the sum of $10,000, such legacy not to bear interest if paid on or before 31 September 2009, and if not so paid to bear interest at the rates prescribed for unpaid legacies by the Probate and Administration Act 1898.
3. I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased.
4. The exhibits may be returned.
**********