Helm v Helm
[2011] NSWSC 377
•04 May 2011
Supreme Court
New South Wales
Medium Neutral Citation: Helm v Helm [2011] NSWSC 377 Hearing dates: Tuesday 19 April 2011 Decision date: 04 May 2011 Jurisdiction: Equity Division Before: Associate Justice Macready Decision: 1. The plaintiff receives a legacy of $75,000 out of the estate of the deceased.
2. The plaintiff's costs on the ordinary basis and the defendants' costs on an indemnity basis are to be paid or retained out of the estate of the deceased.
3. Interest is to run on the legacy at the rate provided in the Probate and Administration Act 1898 from three months after the date of these orders.
Catchwords: WILLS AND ESTATES - family provision claim - contributions by the applicant - applicant the deceased's adult son contributed to purchase price of family home - applicant estranged from deceased for 14 years Legislation Cited: Family Provision Act 1982
Probate and Administration Act 1898Cases Cited: Foley v Ellis [2008] NSWCA 288
Kay v Archbold [2008] NSWSC 254
Singer v Berghouse (1994) 181 CLR 201
Wheatley v Wheatley [2006] NSWCA 262Category: Principal judgment Parties: Peter John Helm v James Francis Helm & Gail Pringle Representation: Counsel:
Mr N Bilinsky for plaintiff
Mr E Finnane for defendant
Solicitors:
John Conti for plaintiff
Dalton Lawyers for defendant
File Number(s): 2010/2367767
Judgment
This is an application under the Family Provision Act 1982 in respect of the estate of the late James Patrick Joseph Helm who died on 29 December 2008 aged 96 years. The deceased was survived by his eight children, three of whom are parties to the present proceedings. The deceased's wife predeceased him. Notice has been given to the other five children under the Act and they do not make a claim.
The Will
The deceased made his will on 9 December 1998. Under that will he appointed two of his children, James Francis Helm and Gail Patricia Pringle, the first and second defendants respectively in the proceedings as executors and trustees.
The deceased gave the principal asset of the estate, being a residence Blundell Circuit, Kellyville, to the second defendant.
The residue of the estate was to be divided equally between his seven other surviving children and the plaintiff's former wife, Sandra Helm.
The estate
After the payment of funeral and probate costs, the deceased's estate consists of the property at Kellyville, furniture and effects said to be worth $5,000 and monies held in the solicitor's trust account of $581.60.
The Kellyville property was the subject of a number of appraisals. Ray White made an appraisal at 22 December 2010 between $665,000 and $685,000. Century 21 made an appraisal at 11 January 2011 between $600,000 and $630,000 and Sellect First National Real Estate at 2 February 2011 between $600,000 and $630,000.
The plaintiff asks me to accept the Ray White appraisal on the basis that the appraisal attached comparable sales. However, these sales were not analysed by the author. Mr Mario Valensise of Select First National Real Estate made another appraisal. The second defendant said that Mr Vanensise inspected the interior of the property but this does not appear in his market appraisal. In these circumstances, I propose to accept that the property has a value of between $600,000 and $630,000 at the date of the hearing.
Costs have been incurred by the plaintiff of $46,285 and by the defendants of $30,260. This is a total of $76,545.
History
The plaintiff Peter Helm was born in January 1945. The s econd defendant, Gail Pringle, was born October 1950.
The property at Marrickville was purchased by their parents on 22 August 1968 for $8,500. Prior to the purchase, the family had been renting the property. Peter and Gail assisted their parents with funds to purchase the property together with a mortgage from the Commonwealth Bank.
The loan from the Commonwealth Bank was repaid in 1976, when the deceased retired as a postal sorter at the Redfern Mail Exchange. Unfortunately his wife died in a car accident on 29 October 1977.
Gail went to England in 1975 where she met her future husband. They had a son David born in December 1977. They married in October 1980 but they separated in 1981. After the separation Gail returned to Australia with David, aged 4 years, and they moved into the Marrickville home where she has resided continuously apart from a period of six months when she attempted to re-establish her marriage.
In 1997, the deceased sold the Marrickville home for $320,000 and with the proceeds he bought land at Kellyville on which he erected a house.
In August 1998, Gail's son David died.
As I have mentioned the deceased executed his last will on 9 December 1998 and he died on 29 December 2008. Probate was granted on 16 March 2009 and these proceedings were commenced within time.
Eligibility
The plaintiff, Peter Helm, is a son of the deceased and he is an eligible person under the Act.
In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following:
"The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or 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.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."
Peter Helm
Peter is 66 years of age and he is divorced from his wife. He has no dependents.
Peter had a heart attack in 2005 and as a result he receives a disability support pension of $729 a fortnight. He has a bank account with a balance of $9,275 and an old motor vehicle.
He lives in the matrimonial property at Dagun, Queensland, which is in the name of his wife. He claims that he is entitled to a 50 per cent equitable interest in the Dagun property, which he values a one half share at $292,500. Peter and wife have not had a property settlement and he anticipates that when his wife sells the property he will have to move out and obtain other accommodation. The evidence of the cost of property in Gympie is that he could obtain accommodation for less than $250,000.
The is little evidence to predict the outcome of any property settlement Peter may have with his ex wife and the only information that the court has is that the parties were married for some 40 years before they separated. In such a long marriage it would be likely that there would be an equal division of their property interests.
It is clear that Peter contributed to the purchase of the deceased's property in 1968. He says he provided $1,300 towards the deposit which he had saved when he was 26 years of age. His sister Gail suggests that Peter's contribution might have been $1,000 but given that Peter was more likely to have known the correct figure, I will accept his evidence on this aspect. His contribution would have been in the order of 15 per cent of the purchase price of the property.
Peter concedes that in the last years of the deceased's life he did not have a close relationship with his father. In 1994, according to Gail, it appears there was an argument between Peter and his father about his father's will, which gave a life tenancy in the Marrickville property to Gail.
Peter denies there was a heated argument or discussion about his father's will. However, having regard to the fact there was a substantial change in his relationship with his father after 1994, I accept Gail's explanation as to why Peter did not speak to his father for some time.
Peter spoke to his father on one or two occasions after 1994. One conversation was in March 2000, when his father telephoned him. He frankly conceded in the witness box that he did not phone his father, nor did he contact him on his 90 th birthday and he did not know his father's date of birth.
Having regard to these matters, it is necessary to see the approach of the court when there is a long break in a relationship.
The question of estrangement has been dealt with in many cases. In Foley v Ellis [2008] NSWCA 288, the Court of Appeal referred to this kind of problem in these terms:
"101. The more recent authorities have held that a state of estrangement or even hostility between a testator or testatrix and a claimant does not terminate the obligation of that testator or testatrix to provide for the claimant. In Palmer v Dolman Ipp JA, after a review of the cases, observed (at [110] that:
'... The mere fact of estrangement between parent and child should not ordinarily result, on its own, in the child not being able to satisfy the jurisdictional requirement under the Act.'
See also Wheatley v Wheatley [2006] NSWCA 262 AT [22] - [23] per Bryson JA (with whom Santow and McColl JJA agreed, addressing the second stage of the process required by Singer v Berghouse.
102. The authorities indicated that where the claimant has been estranged from the testator or testatrix, the application of section 7 of the Family Provision Act requires that the estrangement be appraised and its causes considered: Wentworth v Wentworth, estate of G M Wentworth (Bryson) quoted in Wheatley v Wheatley at [22]. In addition, section 9 (3) (b) expressly requires the character and conduct of the eligible person to be taken into account at the second stage of the process. Care should be taken, however, not to over simplify the complex and nuanced relationships within a family by yielding to the temptation to condemn categorically the behaviour of one party or the other. Events viewed years later through the cold prism of a courtroom may give a different impression than when the events are set in the context of raw emotions experienced at the time. The ' wise and just' testator or testatrix ( Bosch v Perpetual Trustee Co Ltd [1938[ AC 463 AT 478-479 per Lord Romer) must be taken to understand this."
In Wheatley v Wheatley [2006] NSWCA 262 Bryson J had the following to say:
"37. The poor state of the relationship between Mr Wheatley and the testatrix, illustrated by the absence of visits during the last 13 years of her life, operates to restrain amplitude in the provision to be ordered. However, Mr Wheatley is an eligible person, the testatrix's only son and one of only two children, and his needs are severe and go far beyond the needs for renovation of his flat and dental treatment which the Trial Judge's order provided for. Amplitude would not be appropriate in ordering provision for him, but it must be observed that provision for him, even the full amount nominated by his counsel, would not produce any hardship for in Ms Wheatley, who would still be provided for on a scale according full and appropriate recognition to her claims."
The matter was further discussed recently by White J in Kay v Archbold [2008] NSWSC 254 in these terms:
"94. Senior counsel for the defendant submitted by reference to observations of Bryson JA (with whom Santow and McColl JJA agreed) in Wheatley v Wheatley [2006] NSWCA 262 at [37] that the poor state of the relationship between the deceased and the plaintiff, illustrated by their lack of communication between 1999 and 2006, even when the plaintiff was aware that her mother was ill and seriously so, operated to " restrain amplitude in the provision to be ordered".
95. Their estrangement is certainly a factor to be taken into account in determining what provision should be ordered. However, cases are infinitely various. There is no rule that irrespective of a claimant's need, the size of the estate, and the existence or absence of other claims on the estate, a claimant is not entitled to 'ample' provision if he or she has been estranged from the testator. Bryson JA was making observations appropriate to the facts in Wheatley v Wheatley . He was not espousing any general principle as to the relevance of amplitude. The very general directions in sections 7 and 9 of the Family Provision Act require close attention to the facts of individual cases. It is an error to seek to extract statements of general principle from observations directed to the facts of specific case.
96. The present is not a case of 'bare paternity' or 'bare maternity'. But even in such cases, the fact of parenthood is highly material to the existence of a duty to make provision. In this case some provision was made. The question is as to its adequacy."
Given that there was a relationship between Peter and his father until 1994 I do not think that the argument and the lack of further contact is such that it would mean that Peter should not have a claim. However, the circumstances are such that they should be taken into account when considering the amount of provision to be provided for Peter.
Gail Pringle
Gail is 60 years of age, single with no dependents. She lives in the deceased's Kellyville property. She works as a childcare assistant in a childcare centre at Baulkham Hill where she is paid $979.80 per fortnight. She estimates her expenses at $684 per fortnight. Her employer has informed her that she will have to undertake a course of study to retain her employment.
Gail has money in the bank of some $11,500, some household items and a motor vehicle worth $6,000. She has a HECS debt estimated at $40,000 and a liability for costs of these proceedings. She also has her entitlement under the will of the deceased.
Gail also contributed to the purchase of the Marrickville property and she says her contribution was $1,000. The contribution would have been made when she was 17 years of age when she had been working for two to three years. It seems unlikely that she would have been able to save that amount at that time, but I accept that she made some contribution.
Gail has lived in her father's properties since 1981 and has paid no board for her accommodation. She says that after 1994, she contributed to the household expenses. It also should be noted that Gail was the substantial carer for her father during his illnesses. In 2007, the deceased was showing signs of senile dementia and at that stage her father could not be left on his own. For the last two years of his life he was incontinent and Gail's role was to look after him seven days a week.
During the period from the end of 1998 and 2008 Gail had three periods away from her father and the most time that she was away was in 2005 for four days. Gail made a major contribution to her father's welfare, which was in sharp contrast to the contact between Peter and his father.
Discussion
Peter seeks a legacy of $130,000 from the estate of the deceased. It was submitted that this would assist him to purchase accommodation or to give him a buffer to care for himself at this stage of his life.
Although Peter is mentioned in the deceased's will, he will not receive anything from the estate because in effect there is no residue to be shared between the residuary beneficiaries.
The deceased himself was of the view that he should leave his property to Gail in recognition for the work over the years she cared for him. The deceased made this plain in a lengthy note described as a codicil. It is also notable that in the note be made no criticism of his relationship with Peter.
It is clear that after his property settlement Peter will have to leave his present home he will have sufficient funds to purchase a property. Accordingly, any provision now is really by way of a sum for contingencies. It is important in his case that he contributed the purchase of the Marrickville property and that sum was never repaid. Similarly Gail also contributed, but not to the same extent and in later years she spent $25,000 for a pool in the Kellyville property.
In the circumstances it seems to me that some provision for Peter is called for.
In summary, the deceased's estate comprises of the following assets and liabilities:
Property at Kellyville
$615,000.00
Furniture and effects
$5,000.00
Money held in solicitor's trust account
$581.60
Subtotal
$620,581.60
Less
Legal costs
$76,545
TOTAL
$544,036.60
Gail is currently living within her means, however, she has anticipated future expenses in relation to further training to retain her employment. If the plaintiff were to receive a substantial legacy requested, it is likely Gail would have to sell the Kellyville property and incur further costs in relation to the sale and relocation of her home. It is doubtful whether she would have the ability to take out a loan to meet such an order.
The plaintiff has requested the figure of $130,000 by asking for 20 per cent of the approximate value of the deceased's Kellyville property valued at $650,000. 20 per cent of the value Kellyville property at $615,000 is $123,000. However, although the plaintiff did not contribute to the Kellyville property his contribution was to Marrickville and all the funds from that sale went into Kellyville.
The plaintiff contributed approximately 15 per cent to the purchase price of the family's Marrickville property, which was sold about 14 years ago for $320,000. 15 per cent of the 1997 sale price is $48,000. 15 per cent of the present value of the Kellyville property is $92,250.
Conclusion
In my view, bearing in mind the relationship between the plaintiff and the deceased, the plaintiff should receive a legacy of $75,000. This may mean that the defendant will have to sell the Kellyville property, however, she should still have adequate funds to relocate and for the contingencies of life.
Orders
The orders that I make are as follows:
1. The plaintiff receives a legacy of $75,000 out of the estate of the deceased.
2. The plaintiff's costs on the ordinary basis and the defendants' costs on an indemnity basis are to be paid or retained out of the estate of the deceased.
3. Interest is to run on the legacy at the rate provided in the Probate and Administration Act 1898 from three months after the date of these orders.
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Decision last updated: 04 May 2011
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