Goss v Kelso and Goss v Kelso
[2012] VCC 1807
•23 November 2012
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
DAMAGES AND COMPENSATION
FAMILY PROPERTY DIVISION
Case No. CI-11-01900
IN THE MATTER of Part IV of the Administration and Probate Act 1958
IN THE MATTER of the Will and Estate of THELMA MURIEL GOSS, deceased
BETWEEN
| WAYNE FRANCIS GOSS (by his Administrator, State Trustees Limited) | Plaintiff |
| v | |
| SHARLENE SANDRA KELSO (who is sued in her capacity as Executor of the Estate of Thelma Muriel Goss) | Defendant |
- AND -
Case No. CI-12-00544
IN THE MATTER of Part IV of the Administration and Probate Act 1958
IN THE MATTER of the Will and Estate of THELMA MURIEL GOSS, deceased
BETWEEN
| NOELA DIANE GOSS (by her Administrator, State Trustees Limited) | Plaintiff |
| v | |
| SHARLENE SANDRA KELSO (who is sued in her capacity as Executor of the Estate of Thelma Muriel Goss) | Defendant |
---
JUDGE: | HIS HONOUR JUDGE MISSO | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 and 15 November 2012 | |
DATE OF JUDGMENT: | 23 November 2012 | |
CASE MAY BE CITED AS: | Goss v Kelso & Goss v Kelso | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 1807 | |
REASONS FOR JUDGMENT
---
SUBJECT: TESTATOR'S FAMILY MAINTENANCE
CATCHWORDS: Small estate comprising the deceased’s former domestic dwelling – dwelling left to an adult daughter – no provision made for intellectually impaired son and daughter – intellectually impaired son and daughter in need – intellectually impaired son with very modest assets – intellectually impaired daughter with cash assets and a fortnightly surplus over expenditure from a pension entitlement – further provision made for the intellectually impaired son – no further provision made for the intellectually impaired daughter – costs
LEGISLATION CITED: Administration and Probate Act 1958, s91(1), (30) and (4)
CASES CITED: Grey v Harrison (1997) 2 VR 359; King v White [1992] 2 VR 417; Coller v Coller [1998] VSC 80; Vigolo v Bostin (2005) 221 CLR 191; Worladge v Doddridge (1957) 97 CLR 1; Blair v Blair (2004) 10 VR 69
JUDGMENT: Further provision be made for Wayne Francis Goss out of the estate of the deceased.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff, For the Plaintiff, | Mr P Pascoe Ms U Stanisich | Maddocks Bruce M Cook & Associates |
| For the Defendant | Mr C McOmish | Slater & Gordon |
HIS HONOUR:
Introduction
1 Thelma Muriel Goss (“Thelma”) died on 21 August 2010. She was eighty-eight years of age at the date of her death. Thelma married. Her husband died in 1986. There were four children of their marriage: Noela Diane Goss (“Noela”) who was born in May 1945 and is now sixty-seven years of age; Sharlene Sandra Ann Kelso (“Sharlene”) who is sixty-three years of age;[1] Wayne Francis Goss (“Wayne”) who was born in October 1954 and is now fifty-eight years of age. There was a fourth child, Tommy, who died tragically in a drowning accident when he was twenty-four years of age.
[1]Her birthday is not disclosed her affidavit
2 The deceased left a Will dated 30 May 2010. She appointed Sharlene as her executor and trustee. At the date of her death, the deceased's estate comprised a property at 308 Blackshores Road, Altona North (“the Altona North property”) and cash in a number of banking accounts totalling $46,083.55.[2] The cash has been applied in various ways by Sharlene. The evidence discloses that Sharlene is owed about $10,000 by the estate.
[2]Exhibit D1, paragraph 44
3 The deceased left the Altona North property to Sharlene absolutely. The cash in the bank accounts was to be divided between Noela, Sharlene and Wayne in equal shares. The deceased left a number of personal effects to her grandchildren.
4 Noela and Wayne have both commenced proceedings pursuant to Part IV of the Administration and Probate Act (“the Act”) seeking further provision out of the estate of the deceased for their maintenance and support. It was common ground that the only remaining asset of the deceased's estate from which any provision can be made is the Altona North property.
5 Mr P Pascoe of counsel appeared for Wayne, Ms U Stanisich of counsel appeared for Noela, and Ms C McOmish of counsel appeared for Sharlene.
6 The following evidence was adduced during the trial of the proceeding:
· Wayne adduced the following evidence:
§ Ms Sandra Lorraine Warren, senior financial consultant with State Trustees Ltd, gave evidence and was cross-examined
§ Ms Gina Robinson, formerly a consultant with ARNICA Community Care Consultancy Services, gave evidence and was cross-examined
§ client budget as at 12 November 2012: Exhibit 1P1
§ affidavit of Sandra Warren affirmed on 9 December 2011: Exhibit 1P2
§ affidavit of Shelley Ruth Earl sworn 12 November 2012: Exhibit 1P3.
· Noela tendered the following evidence:
§ affidavit of Helen Harrington sworn 1 November 2012: Exhibit 2P1
§ affidavit of Peter Misale sworn 8 November 2012: Exhibit 2P2
§ affidavit of Pauline Anne Baxter sworn 12 November 2012: Exhibit 2P3
§ real estate advertisement of JB Barham for Stawell property: Exhibit 2P4
§ colour real estate advertisement of JB Barham for Stawell property: Exhibit 2P5.
· Sharlene adduced the following evidence:
§ Sharlene gave evidence and was cross-examined
§ Ms Janice Christine Davies gave evidence and was cross-examined
§ eight photographs of the Stawell property: Exhibit D1
§ her affidavit sworn 5 November 2012: Exhibit D2
§ affidavit of Dr Unger, general practitioner, sworn 2 November 2012: Exhibit D3.
7 The claims made by Wayne and Noela are relatively straightforward. Both suffer major intellectual disabilities. They both require care. Wayne has modest monies invested for his benefit. Noela has about $108,000 invested for her benefit. Both are otherwise dependent upon Disability Pensions.
8 Against the claims made by Wayne and Noela is the competing moral claim made by Sharlene, who has a number of problems with her health which disable her. She also receives a Disability Pension. She has one capital asset which is a property in Stawell which may be worth up to $100,000. She presently lives in the Altona North property.
9 While there was some cross examination of Sharlene which essentially went to test the receipt by her of a number of capital sums and the use to which those sums were put, there was little contest that she no longer has any capital sums available to her and has a modest asset position, comprising the Stawell property and her interest in the Altona North property.
10 While there was some contest about the extent of the need for further provision for maintenance and support by Wayne and Noela, there was really no contest that they have limited cash assets, and obvious needs consistent with persons and their unfortunate circumstances.
11 The foregoing is but a brief overview of the conclusions I have reached about the positions of Wayne, Noela and Sharlene. It is to demonstrate that, although there was a significant quantity of affidavit material and other documents tendered in evidence, the proceeding factually distilled down to some fairly simple and straightforward propositions.
12 Essentially, Wayne and Noela contended that they should obtain one-third of the estate of the deceased, which would inevitably lead to a sale of the Altona North property. Sharlene contended that Wayne and Noela have limited needs which are catered for by the cash sums at their disposal and their Disability Pensions, whereas her competing moral claim should entitle her to the Altona North property, otherwise, she has no roof over her head and no assets to call upon to meet the contingencies which she will face over the balance of her life.
13 I propose to set out a brief summary of the circumstances of each of Wayne, Noela and Sharlene. I do not consider that it is necessary to go beyond a brief summary, for reasons which I believe will become plain.
Wayne and Noela’s Present Circumstances
14 Wayne is now fifty-eight years of age. He has a significant intellectual impairment. He presently resides in a community residential unit, where he has lived since 21 May 2010. It is funded and managed by the Department of Human Services since 21 May 2010.
15 Ms Gina Robinson undertook an assessment of Wayne's needs on 7 April 2011. She subsequently prepared a lengthy report, dated 10 April 2011, in which she set out sufficient detail of Wayne's intellectual impairment, the circumstances of his residence, and his needs.[3] A further assessment of Wayne's needs was undertaken by Ms Shelley Ruth Earl. The nature of her assessment comprised a commentary on the report of Ms Robinson.[4]
[3]Exhibit 1P1
[4]Exhibit 1P3
16 Noela is now sixty-seven years of age. She also has a significant intellectual impairment. She has a long history of living in an institutional residential setting from the time when she was a young adult. She presently resides in a community residential unit.
17 Ms Harrington undertook an assessment of Noela's needs on 23 October 2012. She subsequently prepared a lengthy report dated 30 October 2012 in which she also set out sufficient detail of Noela's intellectual impairment, the circumstances of her residence, and her needs.[5]
[5]Exhibit 2P1
18 No issue was raised by Sharlene relevant to the qualifications and experience of Ms Robinson, Ms Earl and Ms Harrington to comment on the needs of Wayne and Noela.
19 The evidence discloses that Wayne requires the degree of supervision which he presently has in the community residential unit. He is verbally non-communicative. He communicates by sound and by being visually demonstrative. The evidence discloses that Noela's circumstances are not much different, in that she is also verbally non-communicative. Both Wayne and Noela have a level of understanding when spoken to directly, and a capacity to respond and react to verbal communication directed to them.
20 However, it is my strong impression from the reports of Ms Robinson, Ms Earl and Ms Harrington that Wayne and Noela have no capacity to live independently, and that at present the community residential units where they reside provide them with adequate care.
21 Wayne is in a reasonable state of health according to the opinion of Dr Unger. Wayne has been a patient of Dr Unger since he took up residence in the community residential unit. He says that Wayne appears physically well; that he is no more likely to become frail than any person of his age; does not need nursing care, and that it would not be appropriate for him to enter an aged care nursing home. He was described as someone who carried a great deal of weight, but according to Dr Unger, his weight is now 75.5 kilograms against a height of 175 centimetres.
22 Ms Harrington obtained information regarding Noela's health from Bronwyn Mulloy, who was the acting accommodation and support manager of the community residential unit where Noela resides. Ms Harrington recorded that Noela sees a general practitioner for the management of her health needs. She does not have any health problems. The only medication she presently takes is Caltrate and Ostelin, which are calcium and vitamin supplements. Her weight is stable.
Wayne and Noela's Financial Circumstances
23 As at 12 November 2012, Wayne had $8225.79 in funds invested on his behalf by State Trustees Limited. He has a fortnightly Centrelink pension and a mobility allowance, amounting to $931.58 per fortnight. His fortnightly expenses are $879.09, leaving him with a surplus of $52.49 per fortnight.[6]
[6]Exhibit 1P1
24 As at 1 November 2012, Noela had $108,986.26 in funds invested on her behalf by State Trustees Limited. She has a fortnightly Centrelink pension, a mobility allowance and income from the investment of her capital, amounting to $987.53 per fortnight. Her fortnightly expenses are $704.04, leaving her with a surplus of $283.49 per fortnight.[7]
[7]Exhibit 2P2
Sharlene's Financial Circumstances
25 Sharlene is now sixty-three years of age. She resides in the Altona North property. In her affidavit sworn 5 November 2012, she sets out the family history; her financial circumstances; her state of health; the current financial position of the deceased’s estate; distributions made from the deceased’s estate, and her response to the affidavits sworn by Ms Warren.[8]
[8]Exhibit D2
26 Mr Pascoe produced a table in which he set out debts incurred or amounts paid by Sharlene, monies received by her, and a running balance. Sharlene was provided with a copy of the table and was asked to accept that the table was an accurate representation of capital sums received and expended by her. She accepted that it was an accurate representation.[9]
[9]Transcript 42-45
27 In summary, the plaintiff received $348,000 by way of compensation from two sources. Subsequently, she incurred debts of about $82,000 and spent $110,000 on the purchase of the Stawell property. Those amounts brought the sum of $348,000 down to $156,000.
28 Sharlene was cross-examined about her use of the $348,000, given that she says that she has no assets whatsoever, save for her entitlement under the deceased’s Will to the Altona North property. The accounting exercise developed by Mr Pascoe suggests that, if I look at capital sums received by the plaintiff and subtract debts incurred by the plaintiff and the money spent on the purchase of the Stawell property, the plaintiff must have had $156,000 at her disposal. However, what that ignores is that the plaintiff says that she stopped work in 2001. In that year, she went onto a NewStart allowance in 2001, and in 2006, she went onto a Disability Support Pension.[10]
[10]Transcript 45-48
29 If the plaintiff was only in receipt of pensions from 2001, then there is substance in her evidence that she lived off the capital sums, which explains why she now has no liquid assets of any kind. I accept her evidence that her only source of income at present is the Disability Support Pension.
30 I also accept Sharlene’s evidence that she is in a poor state of health. She suffered spinal damage in an industrial accident in 2001 for which she received $275,000 by way of compensation. Her mobility is impaired, requiring her to use a walking stick and to wear a back brace. She suffered a nervous breakdown in 2004. She has a heart condition, for which she takes Warfarin. She suffers asthma and a chronic obstructive airways disease. She has had a total hip replacement. She has had a hernia repair. She suffers gastric ulcers, low blood pressure and high cholesterol. She exhibited a report of Dr Stesin, general practitioner, dated 30 March 2012 to her affidavit, which corroborates her evidence of the physical and mental ailments from which she presently suffers and for which she requires significant treatment by way of medication.
31 Mr Pascoe also produced a second table, which sets out that from the sum of $46,083.55, being the monies in the banking accounts of the deceased, and after dispersing $22,169.99 legitimately, she received the balance of $23,913.56. She says that after paying the deceased's debts and funeral and testamentary expenses, that the estate owes her $14,522.22. Mr Pascoe cross-examined the plaintiff from the second table and pointed out to her that she previously reimbursed herself the sum of $3,749.98 from the monies in the banking accounts of the deceased, which had not been taken into account in estimating the amount the estate owes her. She agreed that the sum which the estate owes her is actually $10,772.24.[11]
[11]Transcript 54-55
The Sum of the Evidence
32 I accept that both Wayne and Noela suffer significant intellectual impairment to the extent that they will live out their lives in supported accommodation, whether it be in a community residential unit or in nursing home accommodation in their later years.
33 I accept that both Wayne and Noela are secure in their present accommodation. I accept that it is unlikely that the circumstances of their accommodation will change into the foreseeable future. I accept that it is unlikely that they will be required to pay for nursing home accommodation, if that is required in the future.
34 I accept the whole of the evidence given by Sharlene in her affidavit. I accept that she was a loving and caring daughter to the deceased. I accept that she is a loving and caring sister to Wayne and Noela. Mr Davis has observed Sharlene's interaction with Wayne. She described Sharlene's commitment to Wayne in the most glowing terms.[12]
[12]Transcript 113-114
The Issues and the Legal Principles
35 Mr Pascoe submitted that Wayne has a modest sum of capital and is reliant upon a pension for his survival. He has a modest surplus of $52.49 fortnightly over his fortnightly expenses. He submitted that the deceased should have divided the estate equally between Wayne, Noela and Sharlene.
36 Ms Stanisich submitted that, although Noela has a sum of capital in addition to her pension, it is nonetheless modest in current terms. She, likewise, submitted that the deceased should have divided the estate equally between Wayne, Noela and Sharlene.
37 Both Mr Pascoe and Ms Stanisich submitted that Sharlene can put a roof over her own head by undertaking the renovations on the Stawell property to bring it up to a habitable standard.[13] They both referred to the fact that the general area of Stawell is known to Sharlene. She moved to the township of Landsborough in November 2006, which is nearby to Stawell. She returned to the Altona North property in April 2007, remaining there until August 2007, after which he went back to Landsborough. She stayed with the deceased from about January 2010, when the deceased's health deteriorated significantly. She stayed with the deceased three or four days at a time. After the deceased’s death, she returned to Landsborough, before returning to the Altona North property in January 2011.
[13]Eight photographs tendered by Sharlene show parts of the Stawell property to be in need of repair and renovation: Exhibit D1
38 Both Mr Pascoe and Miss Stanisich submitted that if I am persuaded that the deceased was not a wise and just testatrix and should have made further provision for the maintenance and support of Wayne and Noela, then the Altona North property must be sold, and in that event, Sharlene will have sufficient funds to renovate the Stawell property. She is then likely to have funds available to her to meet future contingencies.
39 Ms McOmish submitted that Wayne's needs are adequately met. That is evident by the fact that he has a surplus over expenditure. In relation to Noela, she submitted that the accumulation of capital demonstrates that Noela has modest needs, and that it is likely that her capital will increase, given that her surplus over expenditure is significant. She submitted that both claims should be dismissed.
40 Furthermore, Ms McOmish submitted what is paramount is the deceased's freedom testation.[14] She submitted that the deceased understood Wayne and Noela's financial circumstances. She knew that because Wayne and Noela suffered from significant intellectual impairments, that they were likely to remain in a community residential unit into the foreseeable future, and when appropriate, in alternative accommodation. Furthermore, she could be reasonably certain that a community residential unit or alternative accommodation would be available for Wayne and Noela over the balance of their lives.
[14]Grey v Harrison (1997) 2 VR 359 at 364-365
41 The conclusion I have reached is that the deceased was neither wise nor just in leaving the Altona North property to Sharlene. She did not make adequate provision for the proper maintenance and support of Wayne and Noela. In reaching that conclusion, I have had regard to the considerations set out in s91(4)(e)-(p).
42 I propose to deal with those considerations rather simply, because I consider that is all that is called for. Wayne and Noela are the natural children of the deceased. The deceased had a responsibility to provide for the maintenance and support of Wayne and Noela. The estate is modest, in that it comprises the Altona North property. Wayne, Noela and Sharlene have modest resources. Wayne's resources are at the lower end. Noela's resources are significantly better than Wayne’s, and Sharlene has the Stawell property. I have dealt with the ages of Wayne, Noela and Sharlene earlier. I accept that Sharlene was a loving and caring daughter to the deceased and committed to Wayne and Noela. I accept that Sharlene’s efforts in looking after the deceased contributed to the conservation of the deceased’s estate. The benefits obtained by Wayne, Noela and Sharlene from the deceased before her death are modest. Wayne, Noela and Sharlene are maintained financially through their pensions. There is no one else who is responsible for the maintenance of Wayne, Noela and Sharlene.
43 The impression I obtained from the evidence is that whilst Wayne and Noela are no doubt well looked after, there is a limit to what can be provided for their benefit because the Government is footing most of the bill for their day-to-day care. It probably leaves very little for the comforts of life which they deserve, and to provide a cushion against future contingencies.
44 I think it is sufficient, as a starting point, for me to repeat what was said by Hedigan J in King v White:[15]
“There would, I think, be strong public policy reasons against permitting the moral obligation of testators to make adequate provision for the proper maintenance and support of those with claims on their bounty to be deflected by resort to the expectation of the continued payment from the public purse to survivors of sums in satisfaction of the testator's duties. Moreover, there could be no legitimate expectation that the payment of social service or old age entitlements would continue at any particular level on the same conditions, or be appropriately linked to rising costs. Further, the provision of such benefits are subject to political vagaries. It is a fact well known in the community that the receipt of the old age pension is now assets and means tested. Indeed, in this very case, this issue has been partly addressed in relation to the possible provision of an additional source of income for the widow.”
[15][1992] 2 VR 417 at 424
45 That is not to say that I should, or must, ignore Wayne and Noela’s entitlement to pension payments which are likely to continue into the foreseeable future, and an entitlement to accommodation without cost.[16]
[16]Coller v Coller [1998] VSC 80
46 It is trite to say that when it comes to determining what is adequate provision for the maintenance and support of Wayne and Noela, I am to consider the their station in life; the expectations which that life has created, and what they would reasonably expect would be their standard of living in the future.[17] An assessment of what is adequate provision must be more than merely “keeping the wolf from the door”, it must free Wayne and Noela from a reasonable fear of insufficiency in their financial resources.[18]
[17]Vigolo v Bostin (2005) 221 CLR 191 at 228
[18]Worladge v Doddridge (1957) 97 CLR 1 at 12
47 The deceased should have considered that the receipt of pensions might be adequate to cover basic accommodation expenses and necessities, but might, at the same time, be insufficient to provide for quality in Wayne and Noela’s lives. It is clear enough to me from the reports of Ms Robinson, Ms Earl and Ms Harrington, that the provision of sufficient funds to cover holidays and outings; clothing; medical care to promote and maintain the ability, and one to one supervision and care intermittently relevant to holidays and outings will promote and add to Wayne and Noela’s quality of life.
48 The reports also refer to the acquisition of more expensive individual items, such as specialist beds and chairs and like items. These sorts of items might be necessary as Wayne and Noela enter old age and become more reliant on such items for their care and the comfort.
49 I note that in Blair v Blair,[19] Chernov JA considered that so long as the trial judge explained the basis for the calculation of a sum which the trial judge considered to be adequate for the maintenance and support of the claimant, an instinctive synthesis can be employed to that calculation where an arithmetic calculation is not possible. Whilst the reports suggest that an arithmetic approach can be taken, I think it is an unreasonable approach given the modesty of the estate.
[19](2004) 10 VR 69 at 81-82
50 Looking at the evidence globally, and the competing moral claims on the bounty of the deceased, it seems to me that the deceased was in breach of her moral duty to provide for the maintenance and support of Wayne and Noela. In the circumstances, and applying an instinctive synthesis, I consider that Wayne should receive 40 per cent of the net sale price, and given Noela has $108,986.26 and a fortnightly surplus over expenditure, I will not make any order for provision for her maintenance and support.
51 It is clear that I consider that both while Wayne and Noela are in need, but any order I make must be measured by the size of the estate and the competing moral claims. What has driven me to ultimately deny Noela of any further provision for her maintenance and support is the fact that she has accumulated $108,986.26 and has a fortnightly surplus over expenditure. My reasoning in making an order in favour of Wayne only is that if he has a similar amount to Noela, he will have a similar fortnightly surplus over expenditure which will provide him with some of the extras which are referred to in the reports. An order of this kind also recognises Sharlene is in a parlous state of health and relative state of impecuniosity.
52 Mr Pascoe informed me that Wayne’s costs are $40,000. I will make the brave assumption that the costs of each party are the same, making a total of $120,000. If the value of the North Altona property is $400,000 less costs, this brings it down to $280,000. I assume sale costs will be at least $20,000, bringing the net value down to $260,000. Forty per cent will provide Wayne with about $104,000. It will put Wayne and Noela in a similar position. It will provide Sharlene with about $156,000 to make the Stawell property habitable and provide her something for future contingencies.
Conclusion
53 I propose to order that further provision be made for Wayne out of the estate of the deceased on a percentage basis.
54 I propose to make an order that each party’s costs be paid out of the estate on a solicitor-client basis. Although Noela has technically failed, I consider that there was merit in her claim, to the extent that I consider that her costs must be met by the estate.
---
0
5
0