Douglas John Kirby v Deborah Rhonda Hay

[2002] NSWSC 687

CITATION:	Douglas John Kirby v Deborah Rhonda Hay [2002] NSWSC 687
FILE NUMBER(S):	SC 5883/01
HEARING DATE(S):	29 July 2002
JUDGMENT DATE:	6 August 2002
PARTIES :	Douglas John Kirby (Plaintiff) Deborah Rhonda Hay (Defendant)
JUDGMENT OF:	Acting Master Berecry at 1

COUNSEL :	MS Willmott (Plaintiff) AC Girard (Defendant)
SOLICITORS:	Eric Butler Solicitors (Plaintiff) McCarthy Associates (Defendant)
CATCHWORDS:	Family Provision Act (1982) NSW - S6(1)(d) - grandchild - member of deceased's household - continuing relationship throughout adulthood - extent of needs
LEGISLATION CITED:	Family Provisions Act (1982) NSW
CASES CITED:	Churton v Christian (1988) 13 NSWLR 241 In Re Fulop (deceased) (1987) 8 NSWLR 679
DECISION:	1.In lieu of the provision made in the will of the late Muriel Rebecca Howie for the plaintiff, there be payment by way of lump sum of $50,000 to the plaintiff; 2.The plaintiffs costs be paid out of the estate on a party-party basis; 3.The defendant's costs be paid on an indemnity basis out of the estate; 4.Exhibits to be returned.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BERECRY AM

6 August 2002

5883/01 Douglas John Kirby V Beverly Rhonda Hay

JUDGMENT

1 Master: On 10 December 2001, Douglas John Kirby (“the plaintiff”), commenced proceedings by way of summons, seeking an order that provision be made for his maintenance, education and advancement in life pursuant to s 7 of the Family Provisions Act (1982) NSW (“the Act”), out of the estate of the late Muriel Rebecca Howie. The plaintiff is a grandchild of the deceased. The defendant is a daughter of the deceased and the executrix of her estate.

2 The deceased died on 23 July 2001. Probate of her will was granted to the defendant on 13 September 2001. In her will the deceased made provision for the plaintiff. He received a legacy in the sum of $5,000.

3 The plaintiff brings proceedings on the basis that he is an eligible person as defined in s 6(1)(d) of the Act. Much of the evidence is not in issue.

4 It was readily conceded on behalf of the defendant that the plaintiff is an eligible person by reason of his being a grandson of the deceased. The evidence is that, with the exception of a period of approximately six months, the plaintiff lived with his grandmother from 1954 to 1976. The plaintiff’s evidence is that from the time he was born until he was approximately six, he, his mother and father lived with the deceased and various other members of the deceased’s family.

5 In approximately 1960, the plaintiff’s mother remarried. The plaintiff moved with his mother, stepfather and stepbrother to live in Queensland.

6 The plaintiff spent approximately six months in Queensland. His evidence is that he did not get on with his stepfather, and he became distressed. The deceased went to Queensland for the purpose of bringing the plaintiff back to New South Wales to live with her. From that time onwards, he had little contact with his mother and continued to live with the deceased until he married in 1976.

7 After he left school, the plaintiff obtained employment as a technician with the Postmaster Generals Department. In approximately 1972, he moved out of the deceased’s home to live with the defendant for approximately six to twelve months. Whilst living with the defendant, the plaintiff continued to keep in contact with the deceased. His evidence is that this contact was as regular as once or twice a week. Once he moved back in with the deceased, he lived with her until his first marriage in 1976.

8 The plaintiff’s evidence is that from the time he married, he was in regular contact with the deceased. During the period of his first marriage, the deceased had moved from Abbotsford to the Central Coast. Contact was maintained during this period. The plaintiff spoke regularly to the deceased and visited her on a regular basis. His evidence was that he telephoned the deceased at least three times a week. Between 1986 and 1992, there is little evidence about the contact that the plaintiff had with the deceased. However, what evidence there is would indicate that there was still contact between the two. During this period the plaintiff had moved from Sydney to Bellingen. The plaintiff and his family stayed at least once a month with the deceased whilst they were living at Bellingen.

9 There is evidence that the deceased lent money to the plaintiff in 1986 and 1988. According to the plaintiff, approximately half the moneys were repaid to the deceased. However, she informed him that the balance did not need to be repaid, as she did not need the money. There was evidence of money being paid into a bank account in the deceased’s name. Nothing much in my view turns on that. It would appear that some monies were paid into an account and they were generally in amounts of $50 or $100. However, very little funds were placed into that particular account. Nevertheless, it does indicate that there was contact between the deceased and the plaintiff and that the deceased was prepared to help the plaintiff in financial matters from time to time. In 1992, the plaintiff moved from Bellingen and purchased a block of land at Green Point. As a result of the move, the plaintiff was now residing in an area near the deceased.

10 There is evidence of conversations between the deceased and the plaintiff that would indicate that in 1996 they still had a close relationship. Between 1996 and when the deceased died, the plaintiff had the deceased brought to his place for weekends from time to time and continued to have regular contact with her by telephone and visits.

11 The evidence of the defendant, which by and large was not contradicted, establishes that she had a good, loving relationship with her mother. She attended to her mother’s needs, moved into the same area in 1974 and they had a normal mother daughter relationship.

12 In 1996, after the deceased suffered a severe heart attack, the defendant and her family rallied around the deceased and provided care for her and assisted with the maintenance of her property.

13 I found both witnesses to be truthful. Where there were omissions in their affidavit evidence in relation to certain financial matters, in both cases subsequent affidavits cured those omissions. I am prepared to accept that at the time of considering their financial position, neither really turned their mind to the question of the superannuation funds that they belonged to. I do not regard the omission as being an attempt by either of them to portray a false position so that they would receive some benefit from these proceedings.

14 The defendant disputes that there are factors which warrant the making of an order for additional provision for the plaintiff. She disputes that the provision that was made for the plaintiff by the deceased during her lifetime and subsequently out of her estate is inadequate for his proper maintenance, education and advancement.

15 In an application such as this, the Court must make a preliminary finding as to whether or not there are factors warranting the making of the application. If the plaintiff succeeds on that preliminary point, the Court must then determine whether or not there are present factors which would warrant the making of an order under s 7. In Churton v Christian (1988) 13 NSWLR 241 at 552, Priestly AJ commented, after quoting from In Re Fulop (deceased) (1987) 8 NSWLR 679,

“To this I would add that although the classes affected by s9 (1) are not necessarily generally regarded as natural objects of testamentary recognition, in some cases members of those classes may, when the circumstances of their relationship with the deceased are set out, immediately be seen to be persons who would be regarded by most observers as, in their particular circumstances, natural objects of testamentary recognition.”

16 It could be argued that in most grandparent-grandchild relationships there may not be the requisite factors that would warrant the making of an application where there had been little contact between grandparent and grandchild, and therefore a lack of the requisite degree of closeness between the two, it may be that in such circumstances an application would fail.

17 There is some evidence put on by the defendant which would suggest that the plaintiff has, to some degree, gilded the lily when attempting to establish that the relationship he had with his grandmother was one which would make him an object of testamentary recognition by the deceased. The plaintiff contradicts the defendant’s affidavit evidence in certain aspects. His evidence is that in his early years he looked upon the deceased as standing in the shoes of his mother. For him, for all intents and purposes, the grandmother became the mother. There is some evidence of a conversation between the deceased and the plaintiff at her place of work, which indicated their closeness to each other. Whilst it may be that during his school years he received assistance from the defendant in relation to his schooling that, to my mind, does not diminish the relationship he had with his grandmother. The plaintiff resided with his grandmother for the first twenty-two years of his life, with two exceptions. For a period of six months in 1960, he lived in Queensland with his mother, stepfather and stepbrother. After six months the deceased went to Queensland to bring him back to Abbotsford. Thereafter he spent the rest of his formative and adolescent years with his grandmother until he attained the age of twenty-two, with the exception of a period of six to twelve months in 1972, when he resided with the defendant.

18 There is no evidence to suggest that during the twenty-two years he spent with his grandmother they had anything but a warm and caring relationship. The evidence given by the plaintiff of his relationship with the deceased after he moved out of home is one that in my view shows a continuing caring relationship between the two. True it is, there were periods when the plaintiff did not see the deceased from time to time, however, those periods do not appear to have been extended periods, and in any case some of those periods can at least be accounted for by the fact that he was working and residing in Bellingen. Notwithstanding the absence from Sydney, the plaintiff still maintained contact with the deceased by use of the telephone. The plaintiff’s evidence is that when the family purchased the Green Point land, the deceased was overjoyed that he and his family were now living in the area. A caring relationship seemed to have been maintained between the plaintiff and the deceased during this phase of their lives. Evidence also points to this position, not only through the contact that they had with each other, but also through the loans that were made by the deceased to the plaintiff in 1986 and 1988. The forgiveness of part of the debt and the willingness to discuss family matters with the plaintiff is to be noted. In my view, on balance it would appear that the relationship was one which both parties regarded as strong and in which one could assume that the plaintiff would have been a natural object of testamentary recognition by the deceased.

19 The deceased made provision in her will for the plaintiff, however she made no distinction between the plaintiff and two other grandchildren. There is no evidence either way about the nature of the quality of her relationship with the other two grandchildren. However, it would appear that the other grandchildren had not lived with the deceased.

20 In my view, the plaintiff has made out a case for bringing these proceedings; therefore it is now necessary to consider whether or not adequate provision has been made for the plaintiff either during the deceased’s lifetime or out of her estate.

21 During the deceased’s lifetime, the plaintiff received direct financial assistance from her to the extent of at least $6,200. During the years that he lived with the deceased, he received both financial and non-financial assistance from her. By her will, provision is made for the plaintiff to receive the sum of $5,000. The estate has been valued by the defendant at $382,707.47. There are legacies of some $ 25,000.00 leaving a net estate of $357, 707.47. The plaintiff is currently unemployed. The evidence is that he resigned from his last employer, Optus, on medical grounds. He has had a recent history of depression and hypertension. A medical certificate issued on 1 July 2002 indicated that the plaintiff no longer had the capacity to undertake any managerial role and was only fit to do manual labour or non stressful work. The plaintiff and his wife have assets totalling approximately $272,000. Included in those assets is the land at Jindabyne where he and his family reside. On that land is a dwelling, which consists of a metal garage and a caravan. The conditions they live under are fairly basic. It is the plaintiff’s intention to build a house on the property to accommodate himself and his family. The income that he and his wife received at the time of making the application amounted to approximately $21,500 per annum. The plaintiff’s evidence is that he is looking for a job and will take on any work so long as it does not involve mental stress. Prior to resigning from Optus, his income (including commissions) was in excess of $115,000. His current annual expenditure is in the vicinity of $45,000. His liabilities consist of a mortgage on the Jindabyne property of $29,467.00, a car lease of $39,401, a car loan of $9,200 and credit cards of $1,300.

22 The plaintiff’s evidence was that he would be reducing his liability by discharging his liability in respect of the car lease and the car loan. That would reduce his liabilities to a figure of approximately $31,000, which in turn would reduce his annual living expenses by some $14,000. The mortgage on the Jindabyne property is an annual expense of some $3,100 therefore a reduction of those three debts would reduce his annual expenditure to approximately $27,000.

23 In relation to the construction of a home on the land, the evidence is that it would cost approximately $160,000. There is no evidence as to what type of house would be constructed for that amount. I assume that it would be a three bedroom cottage. His evidence is that once he is in employment, if his income is approximately $40,000 he would be able to borrow from the Commonwealth Bank up to $77,000. His evidence at page 11 of his affidavit of 29 July 2002 indicates that he will be in debit on the car loans once the vehicles are sold to the extent of approximately $6,000. On the basis that the plaintiff has a need to provide accommodation for himself and his family and to discharge his debts, I calculate the amount involved as follows:

Cash in Bank $78,000
Discharge Mortgage $30,000
Balance of cash $48,000

Loss as a result of the sale of the Prado and Excel $ 6,000
Leaving a net balance of $42,000 cash

Cost of construction of the dwelling $160,000
Maximum mortgage $ 77,000
Subtotal $ 83,000

Cash in bank $ 42,000
Leaving a shortfall of $ 41,000

24 The defendant has put on evidence in relation to her needs. From her evidence, although there is some suggestion that both she and her husband are not in the best of health, their financial position is stronger than the plaintiff’s. There is some evidence concerning the type of work that requires to be done around her home. However, the cost of effecting the renovations was not supported by any evidence. The defendant is the principle beneficiary of the deceased’s estate. Both she and her husband earn an average net weekly wage of $905.00. Their weekly outgoings are approximately $461.00. The net value of the estate after the minor legacies have been paid is $357,707.47. Therefore, the question is whether or not there are factors which warrant the making of additional provision out of the estate of the deceased for the plaintiff.

25 In my view, having regard to the history of the relationship between the plaintiff and the deceased, the plaintiff satisfies the matters to be considered in s 9 (3). The plaintiff lived as a part of the deceased’s household and was dependant upon the deceased for most of the first twenty-two years of his life. He regarded her for all intents and purposes as his mother. It would seem that she might have regarded him as something more than a mere grandson. She, by and large, supported him throughout his school years and he continued to reside with her once he started his traineeship with the Postmaster General’s Department. There is some evidence that there was a good relationship not only between the deceased and the plaintiff but also between the deceased and each of his wives. There is also evidence that when the plaintiff moved to Green Point the deceased was overjoyed that he and his family would be living in the same area as her.

26 There is evidence of contact between them throughout the deceased’s life after the plaintiff first married, either by telephone or by personal contact. It also appears that the plaintiff continued to do things around the house for the deceased although it would appear that in some instances the plaintiff has exaggerated the amount of the assistance that he rendered to the deceased. Nevertheless, in my view that does not diminish the quality of the relationship that they appeared to have.

27 Therefore, it is my view that some additional provision ought to be made out of the estate for the plaintiff. As I have already indicated, the defendant is the major beneficiary of the deceased’s estate. The plaintiff’s financial position has been brought about by his medical condition. This has resulted in a dramatic change in the family’s income and accommodation.

28 In my view, having regard to the matters referred to above, there should be provision made in lieu of the $5,000 provided under the will. Such legacy to provide sufficient funds to enable the deceased to discharge the mortgage on the Jindabyne property and to provide the difference between the cost of construction of the house and the mortgage, the difference being $83,000. However, a sum of $42,000, which would be the balance of the money in the bank account should also be taken into account. The shortfall therefore is $41,000.

29 The plaintiff has indicated that he wishes to go back into employment. He is aware of his limitations and shortcomings. He cannot go into a managerial role or any position where there will be a degree of stress associated with his duties. He has resigned himself to the fact that he will work as a truck driver or in some other area of unskilled work. It may well be that his wife may also at some stage seek some form of employment. Therefore, until the plaintiff is able to establish himself in the workforce again, in my view there should be a small sum provided in addition to the building shortfall to carry him over for perhaps a couple of months. Therefore I propose to make an order for provision in lieu of the legacy he receives in the amount of $50,000.

30 The orders I make are as follows:

1. In lieu of the provision made in the will of the late Muriel Rebecca Howie for the plaintiff, there be payment by way of lump sum of $50,000 to the plaintiff.
2. The plaintiffs costs be paid out of the estate on a party-party basis
3. The defendant’s costs be paid on an indemnity basis out of the estate
4. Exhibits to be returned.

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Last Modified: 08/09/2002