Dickson v Public Trustee - [2023] SASC 75

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction)
DICKSON & ORS v PUBLIC TRUSTEE
[2023] SASC 75
Judgment of the Honourable Justice Stanley
17 May 2023
SUCCESSION - FAMILY PROVISION - JURISDICTION - JURISDICTION IN RESPECT OF PARTICULAR ORDERS - RESCISSION OR VARIATION OF ORDERS AND FURTHER ORDERS
SUCCESSION - FAMILY PROVISION - ELIGIBLE APPLICANTS - SPOUSE OR PARTNER
This was an application for the variation of the administration of the estate of Ben Cameron Parsons, brought by the former partner of the deceased and mother of his only child, Chayce, both in her capacity as administrator of the estate and in her personal capacity.
The applicant reached a compromise with the Public Trustee and Chayce’s litigation guardian under which the following orders were sought:
1.      The applicant Tahlia Margaret Dickson in her personal capacity is joined as second applicant.
2.      The Public Trustee as trustee of the trust for Chayce Michael Parsons comprising portfolio CAE: 1140528 is joined as third applicant for the purpose of seeking direction from the Court.
3.      Leave to the second applicant Tahlia Margaret Dickson to file an amended statement of claim substantially in the form initialed, introducing into the proceedings claims for:
3.1. A declaration of domestic partnership between her and the deceased pursuant to s 11A of the Family Relationships Act 1975 (SA).
3.2. Provision for the second applicant pursuant to s 7 of the Inheritance (Family Provision) Act 1972 (SA).
3.3. An extension of time pursuant to s 8 of the Inheritance (Family Provision) Act 1972 (SA), with effect as at 16 August 2022.
4.      A declaration that as at 1 October 2018 the second applicant was the domestic partner of the deceased.
5. Pursuant to s 8(2) of the Inheritance (Family Provision) Act 1972 (SA) the time within which application may be made for provision is extended to 29 March 2023.
6. Pursuant to s 91 of the Trustee Act 1936 (SA) the Public Trustee is directed to apply funds to the credit of portfolio CAE: 1140528 in the name of the said Chayce Michael Parsons:
6.1.      To discharge mortgage 12100960 registered over the Flagstaff Hill House in favour of the Commonwealth Bank of Australia.
6.2.      To pay the outstanding liabilities of the estate, limited to:
6.2(a) the sum of $20,000.00 to Daryl and Heather Parsons, the parents of the deceased, in full settlement discharge of any claims they may have against the estate.
6.2(b) the proper administration expenses of the estate, including the application of letters of administration and these proceedings, limited to $10,000.00.
6.2(c) the proper costs of the Ms McEwin as litigation guardian of Chayce, not exceeding $5,000 plus GST.
7.      That the following provision be made out of the estate for the maintenance education or advancement in life of the second applicant, namely that the first applicant as administrator of the estate do cause the property described and comprised in Certificate of Title Register Book Volume / Folio 6083 / 372 being the said 13 Maplewood Court, Flagstaff Hill 5159 (the Flagstaff Hill house) to be transferred:
7.1.      as to 30 per cent to the second applicant in her personal capacity, and
7.2.      as to 70 per cent to the respondent as trustee for the interested party, Chayce Michael Parsons, as tenants in common.
8.      That the second applicant be permitted to personally reside in the Flagstaff Hill house until the earliest of the following events (the date of distribution) namely:-
8.1.      the death of the second applicant;
8.2.      the date upon which the second applicant gives notice in writing to the Public Trustee that she no longer desires to reside in the Flagstaff Hill house;
8.3.      the date upon which the interested party, Chayce Michael Parsons, attains the age of eighteen years or dies before then.
9.      The right of residence provided by Order 8 is subject to the second applicant:-
9.1.      paying all rates, taxes and other assessments with respect to the Flagstaff Hill house;
9.2.      insuring the Flagstaff Hill house against such loss or damage by fire and such other contingencies as the respondent thinks fit; and
9.3.      keeping the Flagstaff Hill house in the same state of repair and condition as the same shall be in at the date of this Order (fair wear and tear excepted).
10.     Any requirement of the said Ms McEwin to obtain the advice of independent counsel is waived.
11.     The burden of the provision in preceding Order 7 do fall upon the whole of the estate.
12.     Any existing orders as to costs are discharged.
13.     Save as provided herein:
13.1. The first applicant do administer the Estate according to law, and
13.2. The parties bear their own costs.
14.     A certified copy of this order be made on the letters of administration and, for that purpose, the administrator produce the letters of Administration to the Registrar of Probates.
Held:
The compromise proposed by the parties is approved, with the following orders made:
1. The Public Trustee is directed to apply the funds held on trust for Chayce to discharge the mortgage over the deceased’s residential property and to pay the outstanding liabilities of the estate
2. The deceased’s residential property is to be transferred as to 30 per cent to the applicant in her personal capacity, and as to 70 per cent to the Public Trustee as trustee for Chayce, as tenants in common.
Administration and Probate Act 1919 (SA) ss 65 and 67(1); Family Relationships Act 1975 (SA) s 11A; Inheritance (Family Provision) Act 1972 (SA) ss 4, 7 and 8, referred to.
Elliott v Diener (1978) 21 ACTR 21; Re Frame [1984] 116 LSJS 222, considered.

DICKSON & ORS v PUBLIC TRUSTEE
[2023] SASC 75
Civil
STANLEY J:
Introduction

On 29 March 2023 I made orders in an application for the variation of the administration of the estate of Ben Cameron Parsons (the deceased), brought by the first and second applicants. At the time I indicated I would provide short reasons for making those orders.
Ms Tahlia Margaret Dickson (the applicant) was both the first applicant (as administrator of the estate) and the second applicant (in her personal capacity). The applicant is the former partner of the deceased and the mother of the deceased’s only child, Chayce Michael Parsons (Chayce).
A grant of letters of administration for the use and benefit of Chayce was granted to the applicant on 30 March 2021. The applicant, in her personal capacity, brought a claim against the deceased’s estate pursuant to s 7 of the Inheritance (Family Provision) Act 1972 (SA) (the IFPA).
The principal asset of the estate is a residential property at Maplewood Court, Flagstaff Hill (the Flagstaff Hill Property).
It is unnecessary to canvass the procedural history of the matter. It is sufficient to note that the applicant eventually sought the following orders:
1.The applicant Tahlia Margaret Dickson in her personal capacity is joined as second applicant.
2. The Public Trustee as trustee of the trust for Chayce Michael Parsons comprising portfolio CAE: 1140528 is joined as third applicant for the purpose of seeking direction from the Court.
3. Leave to the second applicant Tahlia Margaret Dickson to file an amended statement of claim substantially in the form initialled, introducing into the proceedings claims for:
3.1. A declaration of domestic partnership between her and the deceased pursuant to s 11A of the Family Relationships Act 1975 (SA).
3.2. Provision for the second applicant pursuant to s 7 of the Inheritance (Family Provision) Act 1972 (SA).
3.3. An extension of time pursuant to s 8 of the Inheritance (Family Provision) Act 1972 (SA), with effect as at 16 August 2022.
4. A declaration that as at 1 October 2018 the second applicant was the domestic partner of the deceased.
5. Pursuant to s 8(2) of the Inheritance (Family Provision) Act 1972 (SA) the time within which application may be made for provision is extended to 29 March 2023.
6. Pursuant to s 91 of the Trustee Act 1936 (SA) the Public Trustee is directed to apply funds to the credit of portfolio CAE: 1140528 in the name of the said Chayce Michael Parsons:
6.1.    To discharge mortgage 12100960 registered over the Flagstaff Hill House in favour of the Commonwealth Bank of Australia.
6.2.    To pay the outstanding liabilities of the estate, limited to:
6.2(a) the sum of $20,000.00 to Daryl and Heather Parsons, the parents of the deceased, in full settlement discharge of any claims they may have against the estate.
6.2(b) the proper administration expenses of the estate, including the application of letters of administration and these proceedings, limited to $10,000.00.
6.2(c) the proper costs of the Ms McEwin as litigation guardian of Chayce, not exceeding $5,000 plus GST.
7. That the following provision be made out of the estate for the maintenance education or advancement in life of the second applicant, namely that the first applicant as administrator of the estate do cause the property described and comprised in Certificate of Title Register Book Volume / Folio 6083 / 372 being the said 13 Maplewood Court, Flagstaff Hill 5159 to be transferred:
7.1.    as to 30 per cent to the second applicant in her personal capacity, and
7.2.    as to 70 per cent to the respondent as trustee for the interested party, Chayce Michael Parsons, as tenants in common.
8. That the second applicant be permitted to personally reside in the Flagstaff Hill house until the earliest of the following events (the date of distribution) namely:-
8.1.    the death of the second applicant;
8.2.    the date upon which the second applicant gives notice in writing to the Public Trustee that she no longer desires to reside in the Flagstaff Hill house;
8.3.    the date upon which the interested party, Chayce Michael Parsons, attains the age of eighteen years or dies before then.
9. The right of residence provided by Order 8 is subject to the second applicant:-
9.1.    paying all rates, taxes and other assessments with respect to the Flagstaff Hill house;
9.2.    insuring the Flagstaff Hill house against such loss or damage by fire and such other contingencies as the respondent thinks fit; and
9.3.    keeping the Flagstaff Hill house in the same state of repair and condition as the same shall be in at the date of this Order (fair wear and tear excepted).
10. Any requirement of the said Ms McEwin to obtain the advice of independent counsel is waived.
11. The burden of the provision in preceding Order 7 do fall upon the whole of the estate.
12. Any existing orders as to costs are discharged.
13. Save as provided herein:
13.1. The first applicant do administer the Estate according to law, and
13.2. The parties bear their own costs.
14. A certified copy of this order be made on the letters of administration and, for that purpose, the administrator produce the letters of Administration to the Registrar of Probates.
On 29 March 2023, I made orders by consent directing the Public Trustee to apply the funds held on trust for Chayce to discharge the mortgage over the Flagstaff Hill property and to pay the outstanding liabilities of the estate. I also ordered that the Flagstaff Hill property be transferred as to 30 per cent to the applicant in her personal capacity, and as to 70 per cent to the Public Trustee as trustee for Chayce, as tenants in common. These are my reasons for those orders.
Relevant findings of fact
The deceased purchased the Flagstaff Hill property in 2014 and moved into the property with the applicant six months later. The deceased paid the mortgage out of his savings account, while the applicant paid for food, insurance and utility accounts along with incidentals.
In October 2018, the applicant temporarily relocated to Sydney with Chayce while the deceased remained in Adelaide. The deceased and the applicant continued their relationship “long-distance” for a period before eventually separating in July 2019. The deceased died intestate on 21 June 2020.
The Flagstaff Hill property is valued in a range between $670,000 and $700,000. There was a substantial mortgage over the property, which at date of death was in the sum of $298,005.84. In addition, the deceased’s parents were owed the sum of $20,000.
The deceased also held superannuation with Retail Employees Superannuation Trust (REST). REST paid the death benefit to the Public Trustee, who holds that benefit on trust for Chayce. The benefit paid to the Public Trustee was $368,923.82.
Counsel for the applicant advised that the Commonwealth Bank of Australia, which holds the mortgage with respect to the Flagstaff Hill property, is pressing for payment. No mortgage payments have been made since the date of the deceased’s death. In the ordinary course of administration, the property would have had to be sold to discharge the mortgage and to make the distribution on intestacy to which Chayce is entitled.
However, the applicant sought provision which had the effect of allowing her and Chayce to stay in the Flagstaff Hill property, thereby providing secure and reliable accommodation for both of them.
Subject to the order of this Court, the parties reached a compromise whereby the Public Trustee would hold an interest of 70 per cent of the Flagstaff Hill property on trust for Chayce and the remaining 30 per cent would be transferred to the applicant in satisfaction of her claim pursuant to the IFPA. In addition, the applicant is granted a right of residence until Chayce reaches the age of 18, subject to her paying the whole of the rates, taxes, insurance, and repair costs with respect to the property.
Consideration
The applicant brought her claim as the deceased’s former domestic partner.
Pursuant to s 6(ba) of the IFPA, a domestic partner of a deceased person may institute a claim. ‘Domestic partner’ is defined in the IFPA as:
a person declared under the Family Relationships Act 1975 to have been the domestic partner of the deceased as at the date of the deceased person’s death, or at some earlier date[1] (my emphasis)
[1] Inheritance (Family Provision) Act 1972 (SA) s 4.
Section 11A of the FRA relevantly provides:
11A – Domestic partners
A person is, on a certain date, the domestic partner of another if –
…
(b) the person is, on that date, living with the other in a close personal relationship and –
…
(ii) a child, of whom the 2 persons are the parents, has been born (whether or not the child is still living at that date).
The applicant was in a close personal relationship with the deceased until at least October 2018. During that time, she and the deceased had a child together, namely Chayce. He was born on 18 January 2018. Accordingly, I found that as at 1 October 2018, the applicant was the domestic partner of the deceased. I declared accordingly.
Accordingly, the applicant was entitled to bring a claim under the IFPA.
I was greatly assisted by the provision of written advice in relation to the compromise from Ms McEwin, who is the litigation guardian for Chayce. On the basis of the provision of that advice I was satisfied it was appropriate to waive the need for provision of advice from independent counsel in relation to the approval of the compromise. That was appropriate given the modest size of this estate and the comprehensive nature of the written advice provided by Ms McEwin.
A recommendation for approval of a compromise such as that proposed by the applicant required consideration of what is in the best interests of the child, as well as whether the prospect of proceeding to litigation, compared to acceptance of the offer, was not good enough to outweigh, significantly, the risk of the applicant getting more.[2]
[2] Elliott v Diener (1978) 21 ACTR 21; Re Frame [1984] 116 LSJS 222.
The applicant is currently studying a Bachelor of Paramedics, which she expects to complete by November 2024. She has a monthly income of approximately $3,337.97. It appeared unlikely that the applicant would be in a position on this income to borrow funds to take over the mortgage.
It is in Chayce’s best interests for him to be able to remain living in the Flagstaff Hill property. Secure and reliable accommodation in the home in which he now resides with the applicant, is of paramount importance in providing physical and emotional stability and a supportive environment for his future education and development. Accordingly, I considered it not to be in Chayce’s best interests that the property be sold.
If the mortgage debt was not discharged and the applicant was required to rent a house, the family income would have been substantially reduced along with the applicant’s ability to provide adequately for Chayce, let alone to provide the additional benefits that a child needs growing up.
Additionally, providing Chayce with ownership of a substantial portion of the property gave him the potential to enjoy any capital gain should the property appreciate in value, which is likely to occur in the period between now and when Chayce turns 18.
It was estimated that the costs of proceeding to litigation in this matter would have amounted to between $35,000 and $55,000 per party. Assuming the REST funds are applied to discharge the mortgage and estate debts, the approximate equity in the house is estimated to be $335,548.78. Accordingly, the potential costs of litigation amounted to a substantial proportion of the equity. Had the matter proceeded to trial, the estate would have been depleted by these costs.
Additionally, any further delay in resolving this matter was likely to increase the mortgage debt, which would have only further depleted the estate.
For these reasons, I formed the view that the resolution proposed by the parties was in Chayce’s best interests and the prospect of proceeding to litigation, compared to acceptance of the offer, was not good enough to outweigh, significantly, the risk of the applicant getting more.[3]
[3] Elliott v Diener (1978) 21 ACTR 21; Re Frame [1984] 116 LSJS 222.
Conclusion
For these reasons I approved the compromise proposed by the parties.