Henry v Northen
[2013] NSWSC 1843
•11 December 2013
Supreme Court
New South Wales
Medium Neutral Citation: Henry v Northen [2013] NSWSC 1843 Hearing dates: 31 October 2013 Decision date: 11 December 2013 Jurisdiction: Equity Division Before: Darke J Decision: Family provision order for lump sum of $150,000.
Parties to bring in Short Minutes.
Catchwords: SUCCESSION - family provision - no provision made by testator for only child - reconciliation between testator and plaintiff following period of estrangement - evidence of financial circumstances incomplete - inferences to be drawn from available evidence - failure by plaintiff to comply with taxation obligations - small estate - order for payment of lump sum Legislation Cited: Family Provision Act 1982
Probate and Administration Act 1898
Succession Act 2006Cases Cited: Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656
Collings v Vakas [2006] NSWSC 393
Doshen v Pedisich [2013] NSWSC 1507
Peters v Salmon [2013] NSWSC 953
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201Category: Principal judgment Parties: Susan Margaret Henry (Plaintiff)
Marcia Dawn Northen (Defendant)Representation: Counsel: M Pringle (Plaintiff)
RD Marshall with H Durack (Defendant)
Solicitors: Rosemary Long Lawyer (Plaintiff)
Leanne White Solicitor (Defendant)
File Number(s): SC: 2013/113028 Publication restriction: Nil
Judgment
Introduction
The plaintiff, by a Summons filed on 12 April 2013, seeks a family provision order in relation to the estate of her late father, Alan George Henry, under s 59 of the Succession Act 2006 ("the Act").
The plaintiff's late father (hereafter referred to as the deceased) died on 19 April 2012 as a result of injuries he received in an assault which took place in January 2012. A grant of probate in respect of the deceased's will dated 17 March 2011 was made in favour of the defendant. The defendant, who was not related to the deceased and was described in his will as "my friend", is the sole beneficiary entitled to take under the will, she having survived the deceased by more than 30 days.
No provision was made under the will in favour of the plaintiff, who is the only child of the deceased. The deceased had been married to the plaintiff's mother for many years. However, they separated in 2005 and were divorced in 2007. At the time of his death the deceased was neither married nor in a de facto relationship, and he had no dependants.
The estate left by the deceased is a relatively small one. After the payment of various debts the gross distributable estate was estimated by the defendant to worth approximately $350,000. The principal asset of the estate is a property in Gregson Street, Gloucester which has an estimated value of $210,000. Affidavits were filed and read which included estimates of the likely costs of the proceedings. On the assumption that the defendant's costs are paid out of the estate on the indemnity basis and the plaintiff's costs are paid out of the estate on the ordinary basis, the evidence established that the estimated net value of the distributable estate was in the order of $225,000. There is no issue in this case concerning any notional estate of the deceased.
The proceedings were commenced within the time stipulated by s 58(2) of the Act. There is also no issue that the plaintiff is an eligible person within the meaning of s 57(1)(c) of the Act. Section 59 of the Act relevantly provides:
(1) The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that:
(a) the person in whose favour the order is to be made is an eligible person, and
...
(c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.
(2) The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made.
For the purposes of determining whether to make a family provision order and the nature of any such order, the Court may consider the various matters set out in s 60(2) of the Act which include "any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered." The task of the Court in addressing the questions posed by ss 59(1) and 59(2) of the Act has been described as a "broad evaluative task" which should be guided by prevailing community standards (see Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656 at [12] - [16] per Allsop P).
Ms M Pringle of counsel, who appeared for the plaintiff, read affidavits sworn by the plaintiff (on 5 April 2013, 13 September 2013 and 17 October 2013) and affidavits sworn by Mr Frederick Harle (on 12 September 2013) and Ms Patricia Climpson (on 17 September 2013). Mr R D Marshall of counsel who appeared with Mr H Durack of counsel for the defendant, read two affidavits sworn by the defendant on 21 June 2013, and a further affidavit sworn by the defendant on 29 October 2013. Both parties also read affidavits concerning the legal costs of the proceedings.
Most of the evidence adduced was uncontroversial, or largely so. The main area of controversy concerned the extent to which both the plaintiff and the defendant adduced evidence as to their financial circumstances. There was also some dispute concerning statements which the deceased allegedly made about the plaintiff and his relationship with her, and also about the defendant. Those matters may be put to one side for the moment. What follows is a statement of what appear to me to be the salient facts of the matter.
Salient Facts
The plaintiff was born in 1967. She was the only child of the marriage between the deceased and her mother. In about July 2005 the couple separated, and the deceased commenced a de facto relationship with Ms Lynette Cribb. The deceased and the plaintiff's mother were divorced in October 2007.
After the separation, the plaintiff's mother continued to live in the matrimonial home in Woy Woy. For a time, the deceased lived with Ms Cribb in Woy Woy but they later moved to a house which was owned by Ms Cribb in Gregson Street, Gloucester. Ms Cribb died in January 2010 and the deceased inherited that property. He remained living in the property until he suffered the assault in early 2012.
It appears that a property settlement was reached between the plaintiff's parents in 2007. This settlement was to the effect that the matrimonial home in Woy Woy was to be split equally between them. At about the same time, agreements were made for the plaintiff to purchase the deceased's half share in the property for the sum of $170,000, and for the mother's share in the house to be transferred to the plaintiff on condition that the mother be permitted to reside there. Accordingly, the plaintiff became the sole registered proprietor of the Woy Woy property. This property has an estimated value of $395,000. It is subject to a mortgage in respect of which approximately $225,000 is owing.
After these transactions were effected, the plaintiff left Sydney and moved into the Woy Woy property with her mother. The plaintiff and her mother still live there together. There is evidence that the plaintiff's mother contributes towards some of the household expenses, including council rates, utility bills and food.
The plaintiff deposes that she had a normal daughter-father relationship with the deceased until his separation from her mother. She described her relationship with her father during her childhood and teenage years as a normal loving relationship. However, she further states that their relationship was difficult at times. It seems that this was to some degree brought about by her father's excessive drinking of alcohol and his casual attitude to money. According to the plaintiff a complete breakdown in the relationship occurred in about July 2006 when the deceased told her, apparently in anger, that he was not her father. The plaintiff says that she was very hurt by this incident and she and her father did not speak to each other for over five years.
After Ms Cribb died in 2010 the deceased made attempts, via the plaintiff's mother, to re-establish contact with the plaintiff. The plaintiff resisted those overtures for some time. But in about November 2011 she spoke to her father on the telephone a couple of times. Arrangements were made for the plaintiff and her mother to visit the deceased in Gloucester.
It seems that this visit, which took place in early December 2011, went well. The plaintiff described it as pleasant. She states that the visit lasted three or four hours during which time there was discussion about what had occurred in their lives over the previous five years, why their relationship had reached the point it did, and what could be done differently in the future. There was also discussion between the plaintiff's mother and the deceased about their relationship. The deceased apparently said that he was no longer drinking heavily. He also said that he now had a girlfriend.
The deceased asked the plaintiff whether she could have Christmas dinner with him that year. The plaintiff says that she was unable to accept that invitation due to a prior commitment. However, she states that as a result of what occurred on this visit she decided that she would spend more time with her father.
During the visit the deceased, who had lost his driver's licence due to a drink driving offence, gave his 2003 Jeep motor vehicle to the plaintiff. She took it away with her and has retained possession of it, although the vehicle is no longer registered. The plaintiff says that she can no longer afford to have it repaired and registered.
The plaintiff deposes that during the visit the deceased told her that the defendant had been caught stealing money from his wallet. She says that the deceased said to her words to the following effect:
I should have always left my stuff with you. I want you to take the car, I don't need it you're my daughter I want you to be able to take care of things if anything happens and I am changing my will back to you.
The plaintiff did not see the deceased again before he suffered the assault in January 2012. However, they had several telephone conversations. The plaintiff says that during one of those conversations, in early January 2012, the deceased told her that he was "coming to Woy Woy in a few weeks to fix up my will".
The plaintiff further says that, following the assault, the deceased told her on at least two occasions that he needed to organise a solicitor so that he could change his will. She says that the deceased said words to the effect "I want you to have it all. I want you to look after things."
The fact that in about late 2011 the deceased made statements to the effect that he had caught the defendant stealing from his wallet is corroborated by the evidence given by Mr Harle and Ms Climpson. Those witnesses also corroborate the plaintiff's evidence to the effect that in late 2011 and early 2012 the deceased made statements to the effect that he was going to change his will and give everything to the plaintiff. I accept the evidence that the deceased did make statements about the theft of money and the changing of his will in favour of the plaintiff. It should be noted, however, that I make no finding that the defendant in fact stole any money from the deceased. The defendant denied that she stole any money and says that the deceased never accused her of doing so. It was not put to the defendant in cross-examination that she had in fact stolen any money.
Mr Harle also gave evidence to the effect that following Ms Cribb's death the deceased became very lonely and began speaking about "the family I have lost". Mr Harle states that on one occasion the deceased said to him:
I have made blues but she is my daughter. My priority is to get back with her.
There is evidence that, following the assault, the plaintiff spent a lot of time caring for her father whilst he was in hospital, and later when he was in a nursing home. In addition, the plaintiff spent time assisting the police in gathering information in relation to the assault upon the deceased.
It is also clear that the plaintiff spent time following the assault making arrangements concerning the deceased's financial affairs. An application was made by the plaintiff to the Guardianship Tribunal seeking a financial management order. An order to that effect was made on 16 April 2012, just three days prior to the deceased's death.
The person who perpetrated the assault upon the plaintiff's father was subsequently charged with his murder and convicted. I was informed that the sentence hearing was to take place on 8 November 2013 and that the plaintiff was required to attend to give a victim impact statement. There is evidence that the plaintiff's health has been adversely affected by what happened to her father and by the legal process which has followed. The plaintiff has been regularly consulting with a psychologist, Dr Sharon Gold, who has provided a report dated 16 October 2013. In her report, Dr Gold states that the plaintiff described psychological symptoms consistent with major depressive disorder with anxious distress. Dr Gold states that the plaintiff's depression and anxiety was precipitated and maintained by unresolved grief linked to her father's murder, court hearings and a will dispute. It is further stated in the report:
In our sessions, she frequently relates that she is not coping with work and life stress. A major barrier to her progress is the will dispute over her father's estate, which is maintaining her depression and anxiety. Her reduced capacity to work has had a deleterious impact on her business and she is considering closing it because she has lost opportunities. She is worrying about her ability to gain suitable employment if she does this due to her age and her perceived inability to cope with work demands.
I do not have any doubt that the plaintiff has been quite significantly affected by what happened to her father. The sooner the related legal proceedings (including this case) are put behind her the better.
The defendant was a friend of Ms Cribb. The defendant came to know the deceased well during the period of the relationship between the deceased and Ms Cribb. She deposes that after the latter's death she continued her friendship with the deceased, visiting him often and assisting him with tasks such as house cleaning, shopping and preparation of meals. She also says she acted as his driver after he had lost his driver's licence. The defendant said she was never paid for her assistance and that she did so on the basis of her friendship with the deceased and the late Ms Cribb.
The defendant says that at one stage the deceased told her that when he left the matrimonial home in 2005 the plaintiff grabbed him by the throat and said "I never want to see you again". She also says that the deceased had expected the plaintiff to visit him on Christmas day in 2011 and when she failed to arrive he was very upset.
The defendant says that in late 2011 and early 2012 the deceased was drinking very heavily and spending large amounts of money at licensed premises. She says that her friendship with the deceased came under some strain at that time because the defendant expressed her concern to the deceased about his behaviour and the young man and woman he had befriended and apparently allowed to stay in his house.
Evidence of financial circumstances
There was a considerable attack upon the plaintiff's evidence, and her credit, concerning her financial circumstances. It is a significant issue in the context of these proceedings and it is therefore necessary to deal with the evidence in some detail.
In her affidavit sworn on 5 April 2013 the plaintiff annexed a summary of her assets and liabilities (Annexure B). The summary included an estimated value for her assets of about $378,000. $300,000 was attributed to the home in Woy Woy. That would appear to be a significant under-value. The schedule contained an estimate for the value of her liabilities of almost $270,000. Included in that amount was a mortgage debt of $232,763, mortgage arrears of $6,826.42, a judgment debt for $6,826.42, personal loans from friends and family totalling $19,000, and business debts of $5,000. The schedule of liabilities also includes amounts stated to be "unknown" in respect of "income tax from 2004 to date" and "GST from 2004 to date". The affidavit does not provide further elaboration concerning the plaintiff's taxation position.
The plaintiff's 5 April 2013 affidavit also contains statements to the effect that the plaintiff is a "self-employed consultant currently receiving an estimated $3,300 to $4,400 per month (GST inc) gross from my business".
Annexure C to the affidavit is a summary of the plaintiff's monthly expenditure. The total expenditure disclosed is $3,795, of which $2,070 is for mortgage payments. The plaintiff conceded that the figure of $260 for insurance included some professional liability insurance in respect of her business.
The plaintiff's affidavit of 13 September 2013 does not deal further with the plaintiff's financial circumstances. However, in her affidavit of 17 October 2013, the plaintiff did provide further information on that topic. The plaintiff states that she has failed to lodge income tax returns and business activity statements since 2004. She deposes:
My professional life was very busy and the breakdown of my parents' marriage took a heavy personal toll on me as their only child. My failure to attend to my tax returns was an oversight on my part. I am presently endeavouring to bring my taxation obligations up to date. I have retained the services of Symmetri Pty Ltd, accountants, to assist me to prepare the necessary documents and submissions to send to the Australian Taxation Office (ATO). My accountant has provided my solicitor with a verbal estimate of my outstanding taxation liabilities. This estimate does not include any penalties or interest the ATO may apply to the assessment of my outstanding tax.
The affidavit then provides a revised estimate of the plaintiff's assets and liabilities. The home in Woy Woy was now estimated to be worth $395,000, and total assets were estimated to be worth almost $480,000. The plaintiff has practically no savings, but has about $75,000 in superannuation funds. The value of the plaintiff's liabilities was now estimated to be almost $322,000. There was a small reduction in the mortgage debt and mortgage arrears (to about $228,000 in total) and the judgment debt had been reduced by a small amount. However, borrowings from family and friends was now estimated to be $32,500. In addition, an estimated $30,000 was owed in respect of unpaid income taxation and an estimated $20,000 was owed in respect of unpaid GST. The amount of accounting fees for the work in respect of the plaintiff's affairs was estimated to be $5,000.
In this affidavit the plaintiff deposed that the income from her business varies from month to month but that the average gross monthly income is approximately $3,300. The plaintiff's monthly expenditure was now estimated to be only $3,395, a $400 reduction. This reduction is explained by the removal of $500 for car expenses, partly offset by $100 increase in the amount for food. The plaintiff explained that her mother was currently less able to contribute to household expenses such as food.
No documents were adduced in evidence in support of the estimates given. In particular, there was no evidence adduced in relation to the income earned by the plaintiff from her business. This business, which has been operating since 2003, involves the giving of advice to small business operators on various topics including marketing, sales, networking and customer service. In the early years of the business, the plaintiff was otherwise engaged in full-time employment. It appears that the plaintiff has experience in sales and marketing positions, and between 2005 and 2007 she worked at the Royal Agricultural Society in a role which included the management of staff at the Royal Easter Show. Between 1983 and 1995, some twelve years, the plaintiff worked at the Australian Taxation Office ("ATO").
Apart from making concessions concerning her failure to lodge income tax returns and business activity statements, the plaintiff, during her cross-examination, conceded that she did not have "formal ledgers" for her business. Instead, she kept some records in "Excel and Word documents". She stated that prior to her father's assault she had started to gather the information concerning her business so as to get the accounts in order, but had not continued with that task until recently when she engaged accountants. It further seems that the plaintiff did not produce any documents in answer to a Notice to Produce which called for various documents including account ledgers. The plaintiff did, however, offer to produce copies of invoices pursuant to paragraph 6 of the notice. Ultimately, copies of the invoices were not provided due to an impasse between the parties concerning the costs of photocopying.
The plaintiff maintained during cross-examination that her failure to lodge taxation returns was "an oversight because I had quite a lot going on in my life with my parents' separation". She acknowledged that she had not personally communicated with the ATO about her affairs, but stated that she believed that her accountants had made contact with the ATO. She denied that she begrudged the payment of tax and that she had hoped to avoid paying any tax at all in connection with her business. She admitted that amounts which should have been put aside for remission of GST had been spent by her.
An attack of a similar nature was made upon the evidence given by the defendant. In one of her affidavits of 21 June 2013 she deposed, in effect, that apart from the Gregson Street, Gloucester property which she inherited and in which she now lives, her only asset was her previous home in Cook Street, Gloucester. The estimated value of that property is $130,000. It is subject to a mortgage upon which about $31,000 is owing. However, during the course of cross-examination the defendant conceded that she in fact owned other assets.
These included a Kia motor vehicle, some shares in IAG, and a property in Water Street, Forster which was purchased in late 2011 for about $300,000. That property is subject to a mortgage upon which approximately $294,000 remains outstanding. The property was purchased by the defendant for her daughter to live in. It seems that the daughter pays about $370 per week directly to the mortgagee.
The defendant, who is 54 years of age, works as a nursing assistant in an aged care facility. She deposed that her net weekly income, although variable, was approximately $500. However, it appeared during cross-examination that her taxable income in a recent year was actually about $56,000. Moreover, the defendant conceded that she had been found guilty of an offence (perhaps of defrauding the Commonwealth) in relation to overpayments of Carers' Pension and that she had been ordered to perform 500 hours of community service. She was very vague, and seemingly confused about the details of the offence. She maintained, however, that she had not intentionally withheld information so as to receive a pension higher than that to which she was entitled. The defendant was in receipt of Carers' Pension because she cares for her elderly mother who suffers from many health problems.
Submissions
Both parties provided written submissions. I have considered those submissions, which will be placed on the Court file.
In oral address, Ms Pringle for the plaintiff submitted that there could be no doubt that adequate provision for the proper maintenance, education or advancement in life of the plaintiff has not been made by the will of the deceased which made no provision for her at all. Whilst it was accepted, at the outset, that the plaintiff is an able-bodied adult without dependants, reference was made to Walsh v Walsh [2013] NSWSC 1065 where Hallen J at [121] set out some of the principles to be borne in mind in dealing with claims by adult children.
Those principles include:
(1) it is impossible to describe in terms of universal application, the moral obligation or community expectation of a parent in respect of an adult child;
(2) generally, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute;
(3) there is no need for an applicant adult child to show some special need or some special claim; and
(4) the adult child's lack of reserves to meet demands, particularly of ill health, which may become more likely with advancing years, is a relevant consideration. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant. In addition, if the applicant is unable to earn, or has limited means of earning, an income, this could give rise to an increased call on the estate of the deceased.
Ms Pringle acknowledged that the plaintiff's life since the breakdown of her parent's marriage, and particularly her financial affairs, could be described as "chaotic" and that the evidence of her income was "perhaps not sufficient". It was nonetheless submitted that the plaintiff had financial needs. Ms Pringle pointed, in particular, to the plaintiff's level of debt and her apparent inability to service the debts out of her business income. This was shown, it was submitted, by the plaintiff's need to borrow money from family and friends, the unsatisfied judgment debt against her, and the fact that the Jeep was no longer registered.
It was also emphasised that the plaintiff, the only child of the deceased, had helped her father greatly after he had been assaulted, and that there were no competing claims. It was put that the position of the defendant, who was only a friend of the deceased, could be disregarded because, as shown during her cross-examination she had failed to show her true financial position and she had also been guilty of an offence involving dishonesty.
Ultimately, it was submitted that the Court should make an order for provision in favour of the plaintiff in an amount of about $200,000.
Mr Marshall, for his part, submitted that the evidence adduced by the plaintiff concerning her financial position, particularly as to her income and expenditure, was so unsatisfactory that the Court was not in a position to make any order for provision in her favour. Reference was made to Collings v Vakas [2006] NSWSC 393 especially at [66]-[67] where Campbell J stated:
66 Before the Court can make an order in the plaintiff's favour, it needs to be satisfied that she was left, at the testator's death, without adequate provision for her maintenance, education or advancement in life. It is clear that she owns no real estate (unlike her brothers), and that she has ongoing family responsibilities.
67 However, before a court can be satisfied that a plaintiff has been left without adequate provision, the court needs to be persuaded that it has been presented, at least in broad outline, with the whole picture concerning the plaintiff's financial situation. In the present case, even though there are two elements of the plaintiff's financial situation about which I am satisfied (that she owns no real estate, and has family responsibilities), when another crucial element of the plaintiff's financial situation (namely, her income and expenditure) is not satisfactorily proved, it is not possible to conclude that she has been left without adequate provision.
Mr Marshall also submitted that the position was made worse because the plaintiff had behaved dreadfully, over an extended period of time, to meet her obligations in relation to taxation. It was put that in all the circumstances, including that the plaintiff has good economic prospects, is in good health and has no dependants, the plaintiff's claim should be wholly rejected.
In relation to the defendant's evidence, Mr Marshall submitted that the defendant had no obligation to advance evidence of her own financial position and, whilst she failed to accurately describe the position, there was no material misstatement, and the fact that she had been convicted of an offence was not of significance to the determination of the real issues, and was really a distraction. Mr Marshall also described as a distraction the issue of what was said between the plaintiff and the deceased which caused their estrangement.
Determination
The Court may only make a family provision order if the requirements of s 59(1) of the Act are satisfied. If they are so satisfied then, pursuant to s 59(2) of the Act, the Court may make an order for provision.
There has been discussion in the decided cases in this area of the question whether, and to what extent, the requirements of the Act (notably s 59) mandate a change from the position which pertained under the provisions of the predecessor statute, the Family Provision Act 1982. In this regard, particular reference should be made to the decision of the Court of Appeal in Andrew v Andrew (supra) at [6], [26]-[32] and [82]-[93].
Associated with that discussion is the question whether it remains appropriate under the new legislation to undertake the "two-stage" process as described in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208-209 which required, at the first stage, an answer to the jurisdictional question whether inadequate provision had been made, and (if the jurisdictional question was answered affirmatively) at the second stage, an answer to the questions whether an order for provision should be made, and if so, what order should be made. This issue was the subject of discussion in Andrew (supra) at [6] per Allsop P, at [27], [29] and [41] per Basten JA, and at [65] and [94] per Barrett JA.
I do not propose to add to that discussion. It may well be, as Allsop P stated in Andrew (supra) at [6], that the question whether the process engaged in by the court in s 59 can still be described as "two-staged" in the sense discussed in Singer v Berghouse (supra) "may be an analytical question of little consequence". In any event, as his Honour went on to state in the same paragraph:
The terms of the new Act are to be applied. The exercise of power to make the order is conditioned on the court being satisfied of certain things in s 59(1). The order that may be made is described in s 59(2). The two elements are described in s 60(1) (b) as "whether to make [an] ... order and nature of any ... order." Section 60 (2) provides a detailed body of considerations for the task in s 59.
Reference should also be made to Peters v Salmon [2013] NSWSC 953 where Ball J stated at [80]:
...it seems clear from the terms of s 59 that the court must ask itself the question whether it is satisfied that "adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made". If it is so satisfied, it must consider whether to make an order and, if so, the terms of that order. In undertaking each of those steps, it may have regard to the matters set out in s 60.
That seems to me, with respect, to be the proper approach whether or not it may properly be described as a two-staged process or, as suggested by Hallen J, the undertaking of "twin tasks" (see Doshen v Pedisich [2013] NSWSC 1507 at [127]).
Paragraphs (a) and (b) of s 59(1) are satisfied in this case because the plaintiff is an eligible person within paragraph (c) of the definition contained within s 57 of the Act. It remains necessary to consider whether s 59(1)(c) is satisfied. The question which thus arises is whether adequate provision for the proper maintenance, education or advancement in life of the plaintiff has not been made by her father's will.
It should be noted that in this context the words "adequate" and "proper" connote something different. Adequate is concerned with quantum, whereas proper is concerned with the standard of the maintenance, education and advancement in life of the plaintiff (see Verzar v Verzar [2012] NSWSC 1380 at [127] per Lindsay J).
For the following reasons I have concluded that adequate provision for the proper maintenance, education or advancement in life of the plaintiff has not been made by the will of the deceased.
The plaintiff is 46 years of age. It is true that she has no dependants, and apart from the problems described in Dr Gold's report, is in good health. Against that, she is a single woman and, as she deposes, there is no person liable to support her. The financial support she receives from her mother (who is a 76 year old pensioner who nonetheless still does about 8-10 hours of part time work per week) is plainly very limited. Aside from the gift of the Jeep and payment of an amount of $5,000 given in about 2003 or 2004, there was no evidence of any specific provision being made for the plaintiff by the deceased in his lifetime.
Despite the clear inadequacies in the evidence concerning her financial position, I accept her evidence that she has substantial liabilities (in the order of $320,000) and accept that, at least in the period since her father's death she has struggled to meet those liabilities, principally the mortgage over the home in Woy Woy. I also accept that her business has suffered due to the effects upon her of her father's death.
I am not able, on the evidence before the Court, to make any specific findings as to the income which the plaintiff has derived, and continues to derive, from her business. Nevertheless, in circumstances where the plaintiff has no savings, has had to resort to borrowing from friends and family, has incurred a relatively modest judgment debt which has remained outstanding since at least April this year, has not renewed the registration of the Jeep given to her by her father, and where there is no suggestion that she has hidden any assets or has a lifestyle that is anything other than modest, I infer that the business does not presently provide (and probably has not for at least a year) sufficient income to service the plaintiff's liabilities and leave enough left over to allow a reasonably comfortable standard of living.
It is likely that once all of the legal proceedings (including this case) are concluded, the plaintiff will be in a position to focus more upon her business. She may be able to turn it into a successful business, but that outcome is far from certain. I would regard the plaintiff as having no more than reasonable employment prospects. She has a sound employment history (particularly in sales and marketing) and she presents, despite the problems she is currently experiencing, as an intelligent and capable person. She does not, however, appear to have any professional qualifications.
The plaintiff has about $75,000 in superannuation funds. That is, to my mind, a fairly modest sum for a 46 year old who has significant debts and only a moderate earning capacity. The plaintiff has no financial reserves to call upon in the event that she became unable to work.
It should also be noted that there is a reasonable chance that in the future the plaintiff will have to care for her mother. Even if that does not impose any direct financial burden on the plaintiff, it may well restrict her in relation to her business or employment.
In these circumstances, I am satisfied that her father's will, which made no provision at all for the plaintiff, did not make adequate provision for the proper maintenance, education or advancement in life of the plaintiff.
I do not regard the statements made by Campbell J in Collings (supra), which are referred to earlier in these reasons, as standing in the way of that conclusion. I do not read his Honour's comments at [67] as laying down any rule of general application, and I further consider that in the present case the evidence is sufficient to draw the inference at [63] above.
It follows that the Court is satisfied of all the matters set forth in s 59(1) of the Act and it is appropriate to consider whether, in accordance with s 59(2) of the Act, an order for provision ought be made out of the estate of the deceased for the maintenance, education or advancement in life of the plaintiff.
The matters I have referred to above in relation to s 59(1)(c) are also relevant to the question raised by s 59(2). Those matters have been taken into account in answering that question.
The following matters also seem to me to be particularly relevant.
(a) The relationship between the plaintiff and her father: The serious falling out between the plaintiff and her father caused an estrangement which lasted for more than five years. I do not think that it is necessary to dwell on what brought that situation about. As Mr Marshall recognised in his submissions, that matter is something of a distraction. That is particularly true in the present case because the evidence made it clear that following the death of Ms Cribb in 2010, the deceased wanted to re-establish relations with his daughter and, after a time, the pair had a genuine reconciliation.
There seems little doubt that, following the death of Ms Cribb, the deceased became very lonely. He was divorced, and estranged from his only child. At that stage, the defendant seems to have become an important part of his life. She provided considerable assistance to the deceased and they were no doubt good friends. It is not altogether surprising that when the deceased came to make a will at that time, he chose the defendant to be the executor and the beneficiary.
However, I conclude that it is likely that once the deceased had reconciled with the plaintiff in late 2011, he recognised that he ought to make provision in his will for his daughter. Of course, verbal statements made by testators have to be treated with some caution, and in this case the defendant clearly made some statements which were incorrect (notably, that he was no longer drinking heavily). Nevertheless, I think that his statements to the effect that he wanted to change his will in favour of the plaintiff are likely to have been sincerely made. Even if he had not finally determined to make such a change, the plaintiff was seen as a worthy object of his testamentary bounty.
It is also relevant that shortly after the reconciliation, when the deceased was assaulted, the plaintiff spent a lot of time caring for her father and attending to his financial affairs.
(b) The plaintiff's conduct: It is true that the plaintiff's own financial affairs, and in particular her failure over a lengthy period to comply with her taxation obligations, do her no credit. I do not think that the plaintiff's busy personal life and the impact of the breakdown of her parents' marriage excuses such a prolonged failure to meet her obligations. I regard this conduct of the plaintiff as significant, but do not think that it dictates that no order for provision should be made in favour of the plaintiff.
(c) The size of the estate: As noted earlier, the estimated net value of the distributable estate is about $225,000. It is a relatively small estate, but it affords at least some scope to provide for the advancement of the plaintiff who is the only person making a claim under the Act.
I have concluded that, pursuant to s 59(2) of the Act, an order for provision out of the deceased's estate ought to be made for the maintenance, education or advancement in life of the plaintiff. However, I do not think that it should be of the magnitude urged by Ms Pringle, namely, an amount $200,000.
Having considered all of the above matters, as well as the position of the defendant, who undoubtedly was a good friend and support to the deceased at a difficult time in his life, it seems to me that a more modest order should be made, but one which would nevertheless provide an immediate and significant benefit to the plaintiff by enabling her to reduce her debts to a more manageable level. I think that an appropriate order for provision would be for the payment of a lump sum of $150,000.
That sum would allow the plaintiff to almost halve her liabilities, to an amount of about $170,000, and she would be left with net assets of a little over $300,000. I consider that such provision would be adequate provision for the proper maintenance, education or advancement in life of the plaintiff. After the making of such provision, the balance of the estate remaining for the defendant would be approximately $75,000.
I propose to make a family provision order in terms that the plaintiff receive out of the estate of the deceased a lump sum of $150,000. As such an order will almost certainly require the property in Gregson Street, Gloucester to be sold, it may be appropriate for consequential and ancillary orders to be made. These issues were not canvassed at the hearing. In these circumstances I will order that the parties bring in Short Minutes to give effect to these reasons. The Short Minutes should deal with interest on the lump sum, and the costs of the proceedings. Prima facie, it would be appropriate for interest (at the relevant rate for the purposes of s84A of the Probate and Administration Act 1898) to accrue after a period of about four months on any unpaid portion of the lump sum until it is paid in full. That period should be sufficient for a sale of the Gregson Street property to be completed.
The plaintiff's costs should be paid out of the state on the ordinary basis, and the defendant's costs should be paid out of the estate on the indemnity basis.
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Decision last updated: 12 December 2013
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