Groves v Groves
[2013] NSWSC 623
•16 May 2013
Supreme Court
New South Wales
Medium Neutral Citation: Groves v Groves [2013] NSWSC 623 Hearing dates: 16 May 2013 Decision date: 16 May 2013 Before: Windeyer AJ Decision: Refer to para [21] of judgment.
Catchwords: SUCCESSION - family provision and maintenance - whether will made adequate provision for proper maintenance, education or advancement in life of plaintiff - factors relevant to quantum of family provision order - relevance of litigation costs to making of family provision order - whether failure to sever joint tenancy in managed fund account is a relevant property transaction under s 75 of the Succession Act 2006 Legislation Cited: Succession Act 2006 Category: Principal judgment Parties: Michelle Maree Groves (Plaintiff)
Mary Frances Groves (Defendant)Representation: Counsel:
A Hill (Plaintiff)
L Ellison SC (Defendant)
Solicitors:
Armstrong Legal (Plaintiff)
Maloney Lawyers (Defendant)
File Number(s): 2011/394506
Judgment
HIS HONOUR: This is a claim by the plaintiff for provision out of the estate or notional estate of her father, William Robert Groves. To save suspense I state that I intend to make an order in favour of the plaintiff for $150,000. The following are the reasons for that.
William Robert Groves died on 21 December 2010 aged 83. He left a will dated 30 September 2004. Under that Will he gave the whole estate to the defendant who is his widow. If she did not survive him, then he appointed his solicitor executor, divided his estate into five parts, gave one part to his brother, John Groves, two parts to his daughter Michelle (who is the plaintiff), and two parts to Narjette Mary Elfar who is his stepdaughter.
On the evidence that appears to have been in accordance with an agreement which he came to with his wife that she would make a will in somewhat similar vein so that on her death one half would go to the plaintiff, and one half would go to her daughter. While that will might have been made, that is no longer the position so far as the defendant is concerned and I do not think anything more need be said about that.
There has been no grant of probate of the will. What has happened is that the assets in the estate have been transferred to the defendant's widow, as I understand it, because those assets were very limited and comprise, for the most part, motor vehicles. In addition the deceased held 871 shares in IAG Ltd which somehow or other the defendant has either had transferred to her or has managed to sell, but this does not seem to me really to matter. The estate assets, namely assets of the deceased rather than assets held with his widow as joint tenants, were said to amount to approximately $94,000, for the most part the value of that being motor vehicles.
It is accepted, I think, that whatever assets there were in the estate would, on any basis, be used up with estate liabilities including funeral expenses and costs of these proceedings. Thus, if any order is to be made in favour of the plaintiff it is an order which would have to be made out of joint assets which have passed to the defendant by survivorship if it is appropriate to designate any of those assets as notional estate of the deceased.
So far as the jointly held assets are concerned, all of which have now passed and are now held by the defendant as survivor, they comprise the following:
The family home at [xxx xxxxxx xxxxxx], Picton valued probably somewhere between $700,000 and $900,000;
an investment portfolio managed by Qestor Financial Services Ltd of $1,401,692;
a loan to the defendant's son and a business partner of $500,000;
moneys in National Australia Bank investment account of $20,000;
moneys in the Commonwealth Savings Bank of $12,000; and
some motor vehicles.
So far as the investment portfolio managed by Qestor is concerned, the amount to which the defendant became entitled by survivorship was more than the figure which I have just set out. The $500,000 lent to her son and his business partner was taken from that amount which explains the difference. So far as the moneys in the National Australia Bank investment account are concerned, Mrs Groves has explained that interest which is paid on the $500,000 loan which is $5,000 per month is paid into that account. That provides a considerable amount of her income, but in addition to that on an annual basis it appears that she receives a sum of approximately $61,000 from the managed investment fund. The moneys in the Commonwealth Saving Bank came by survivorship and the motor vehicles came by survivorship. One of those vehicles is a restored horse drawn hearse for which apparently a neighbour has offered $35,000.
I should say at the outset that it is not suggested that the rights of the defendant to the home which she took by survivorship should be disturbed and they would not be in any event.
The question is whether adequate provision for the proper maintenance, education or advancement in life of the plaintiff has not been made by the will of the deceased. No provision has been made, but that does not determine the matter. It is a starting point only.
The plaintiff is fifty years of age. I do not intend to set out the whole of her history and relationship with her father, suffice it to say that I am satisfied on the evidence that she contributed in a reasonably substantial way to the funeral business which was conducted by the deceased and subsequently by the deceased and the defendant, and that this turned into a successful business. While she was there she was an employee. She was paid wages. She says that she was not paid for all the overtime work that she did and I accept that to be the position, but I do not accept that she expected to be paid. Nevertheless, that is a contribution which she made towards the success of the business.
There is a dispute as to whether or not her contributions were of great value, but nevertheless the simple fact is that the deceased and his wife owned the business and were happy to employ the plaintiff in that business and if they thought that her efforts were bringing about a loss, one would have expected them to have dispensed with her services at an earlier time.
The deceased married the defendant in October 1983. They had commenced to live together about 12 months before that time. The defendant contributed substantial funds towards the property which became held as joint tenants. For example it was she who purchased the land at [xxx xxxxxx xxxxxx], Picton which was purchased in the name of the deceased and the defendant as joint tenants and she contributed $200,000 to the construction of the house on those premises which became the matrimonial home. She also paid the purchase price on another property where part of the business was conducted.
For some reason the relationship between the plaintiff and her father and her stepmother broke down and she claims that this led to some medical problems. I think that the evidence does support that to at least some extent. Nevertheless, the plaintiff was able, while she was working there, to purchase at least two properties and she has been able to purchase a property in Queensland where she now lives and on which there is a mortgage of approximately $150,000.
What the plaintiff says is that she contributed to the success of the funeral business which was obviously successful, mainly I think as a result of the deceased being a personable man to whom people responded during times of grief. Obviously the business was successful because it was sold in May 2009 for $2.3 million and it is that figure or a large part of it which is now invested in the managed funds.
The plaintiff's assets are set out in her affidavit of 23 April. She owns her house in Queensland said to be worth $540,000. She has cash in the bank account of nearly $8,000, a 1999 Suzuki Grand Vitara motor vehicle said to be worth $4,000 and household contents said to be worth $5,000. The total of those figures is about $557,000. Her liabilities, which are not really brought up to date, are a mortgage debt of $84,383 on her Reedy Creek property, a credit card debt of $4,640 which may or may not now exist, and moneys said to be owed to her mother of $58,988. So far as this latter amount is concerned, while I am satisfied that the arrangement between mother and daughter was that the daughter would repay it if she could, there is no actual liability to repay that amount and it will not be called for unless the plaintiff is clearly in a position to pay it or perhaps unless the mother really needed it. It is not something that is necessary to be taken into account as some sort of pressing debt.
The other thing which I think needs to be taken into account in this matter is the fact that the deceased did give to his daughter some reasonably large cash sums. The deceased gave the plaintiff $3,000 in March 2009 when she had some medical problems and a medical bill which she could not pay; a further sum of $10,000 in May 2009 when the deceased said to her he wanted to send her some money and would it be of help; and subsequently $50,000 at a time when she had borrowed moneys to purchase an ice-cream van, and the moneys which were given reduced the amount of the loan borrowed for that purpose. I should add that the business was not really successful. The van was subsequently sold at what I understand was a small loss.
Since then the plaintiff has been employed in various positions and although there can be no doubt that she has had medical problems, the fact is that she has been able for some time now to obtain employment in real estate, in a funeral business, and in a jewellery shop where she seems to have been a reasonably successful salesperson, but the problem with that job at least is that it is casual and there is no certainty of continued employment. The plaintiff wishes to return to the real estate work as she says that she was successful in that and she has some wish, she says, to do a teacher's course because she had always wanted to be a teacher and to some extent said she did not do so because she said her father wanted her to work in the funeral business. I do not think any provision should be made in respect of that desire. I think, without wishing to be difficult about it, the plaintiff's age is against her and against perhaps it being sensible to embark on that course and certainly not something for which the deceased should have been expected to provide moneys under his will to enable her to embark on that course.
What we have here is a claim by a daughter who did provide considerable assistance to her father in building up the business who then became more remote from him, who re-established a relationship with her father and was of considerable assistance to him and I think to her stepmother during the dying days of her father and who was someone whom proper members of society think the deceased should at least have considered when making his will. I consider however that the deceased's obligation to his widow is substantially greater than the deceased's obligation to his daughter, and when one takes into account the assets now of the plaintiff and the income which she reasonably requires for her needs which is currently provided by the assets which she has, but will be less easily provided if any substantial order is made, that this must be taken into account in considering her needs and competing claim. So far as the plaintiff is concerned, her income is not great. She is only just able, if at all, to cover her expenses. She has, in my view, prospects of obtaining more work and therefore more income and in addition if her major liability was discharged then her outgoings will substantially decrease.
I have said that I propose to make an order in the sum of $150,000. In doing that I must take into account the fact that although the costs have been estimated on the basis of a two-day hearing, on that basis the costs of one side are said to be in the order of $90,000 and the other in the order of $95,000. Those matters, I think, are of considerable concern and I always hesitate to be accurate about this, but accepting that on that basis the costs which would have to be paid out of the estate or notional estate are likely to come to about $150,000 that will mean that $300,000 will be deducted from the assets of the defendant. In my view, bearing in mind the conflicting claims, no further order could be justified.
Lastly there is the question of notional estate. The only claim that could be made is that there was a relevant property transaction because the deceased failed to sever a joint tenancy prior to his death. That is not a claim which is made in respect of the real estate, and therefore that can be disregarded. The claim is really made, as everyone understands, in respect of the moneys which were held in the managed fund account and which are now held by the defendant in her own name. It is said that the deceased, by omitting to sever the joint tenancy, engaged in a relevant property transaction. There has been some debate as to how one would go about severing the joint tenancy in question, Mr Ellison saying that it is for the plaintiff to establish that there is no contract which would prevent that being done. I should say that ordinarily the onus would be on the defendant as normally one would be able to sever a joint tenancy, the question being how one does it. The deceased could have transferred his interest in that fund to himself. That would have had the effect of severing the joint tenancy in equity. That is the basis on which I consider a designating order can be made.
Orders
I make the following orders:
1. The plaintiff be paid out of the notional estate of the deceased the sum of $150,000.
2. Liberty to apply as to the designation of property as notional estate after 42 days.
3. Order that if the said sum is not paid within 28 days interest is to be paid on the sum at legacy rates from the expiration of 28 days.
4. Order that any requirement for a grant of representation under s 91 of the Succession Act 2006 be dispensed with.
5. Order the defendant to pay the plaintiff's costs of the proceedings out of the property designated as notional estate.
Decision last updated: 23 May 2013
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