Hewson v Chappell

[2012] WASC 86

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   HEWSON -v- CHAPPELL [2012] WASC 86

CORAM:   MASTER SANDERSON

HEARD:   13 & 14 FEBRUARY 2012

DELIVERED          :   15 MARCH 2012

FILE NO/S:   CIV 1242 of 2010

BETWEEN:   ALEXANDER CHRISTOPHER HEWSON by his next friend CHRISTOPHER ROBERT HEWSON

Plaintiff

AND

PETER STEPHEN CHAPPELL as Executor of the Will of RONALD GEORGE CHAPPELL (dec)
First Defendant

JUSTIN LAURIE FAIRCLOUGH (Beneficiary)
Second Defendant

BRENTON JOHN FAIRCLOUGH (Beneficiary)
Third Defendant

BEN JOE DE LA RIE (Beneficiary)
Fourth Defendant

MATTHEW RONALD DE LA RIE (Beneficiary)
Fifth Defendant

MELISSA ALICE CHAPPELL (Beneficiary)
Sixth Defendant

SARAH LORRAINE CHAPPELL (Beneficiary)
Seventh Defendant

DAMIEN ASHLEY CHAPPELL (Beneficiary)
Eighth Defendant

LAURA TERESS CHAPPELL (Beneficiary)
Ninth Defendant

KIARA JADE CHAPPELL (Beneficiary)
Tenth Defendant

JENNIFER ALICE GOOD (Beneficiary)
Eleventh Defendant

JENNIFER KAYE FAIRCLOUGH (Beneficiary)
Twelfth Defendant

PETER STEPHEN CHAPPELL (Beneficiary)
Thirteenth Defendant

Catchwords:

Inheritance application - No adequate provisions for plaintiff from estate - Further provision ordered - Turns on own facts

Legislation:

Inheritance (Family and Dependants Provision) Act 1972 (WA), s 7(1)(d)

Result:

Further provision ordered

Category:    B

Representation:

Counsel:

Plaintiff:     Ms E C Hensler

First Defendant            :     Mr A P Hershowitz

Second Defendant        :     No appearance

Third Defendant           :     No appearance

Fourth Defendant         :     No appearance

Fifth Defendant            :     No appearance

Sixth Defendant           :     No appearance

Seventh Defendant       :     No appearance

Eighth Defendant         :     No appearance

Ninth Defendant           :     No appearance

Tenth Defendant          :     No appearance

Eleventh Defendant      :     No appearance

Twelfth Defendant       :     Mr A P Hershowitz

Thirteenth Defendant    :     Mr A P Hershowitz

Solicitors:

Plaintiff:     Nicholson Clement

First Defendant            :     Angus Tibbits Solicitors

Second Defendant        :     No appearance

Third Defendant           :     No appearance

Fourth Defendant         :     No appearance

Fifth Defendant            :     No appearance

Sixth Defendant           :     No appearance

Seventh Defendant       :     No appearance

Eighth Defendant         :     No appearance

Ninth Defendant           :     No appearance

Tenth Defendant          :     No appearance

Eleventh Defendant      :     No appearance

Twelfth Defendant       :     Angus Tibbits Solicitors

Thirteenth Defendant    :     Angus Tibbits Solicitors

Case(s) referred to in judgment(s):

Bondelmonte v Blanckensee [1989] WAR 305

1. MASTER SANDERSON:  This is an application by the plaintiff under the Inheritance (Family and Dependants Provision) Act 1972 (WA) (the Act). The plaintiff seeks provision be made for him from the estate of his grandfather, Ronald George Chappell. The plaintiff is presently 11 years of age and the claim is made by his next friend, his father, Christopher Robert Hewson.

2. The plaintiff is the son of the deceased's daughter, Dianne Michelle Hewson. Mrs Hewson died before the deceased. The plaintiff is therefore a person entitled to claim under s 7(1)(d) of the Act.

3. The deceased died on 6 May 2009.  He was survived by two of his four children - these being the twelfth and thirteenth defendants.  He was survived by 10 grandchildren.  The second to eleventh defendants were beneficiaries under the Will.  The action against these beneficiaries has been discontinued.  Peter Stephen Chappell is the executor of the Will of the deceased.

4. Probate was granted of the deceased's Will dated 9 August 2006 and a Codicil dated 15 March 2007 to Peter Stephen Chappell on 21 August 2009.  Under the Will and Codicil, relevantly, the deceased gave:

   (a)$50,000 to each of his grandchildren (including the plaintiff);

   (b)a property at 58 Burnett Street, Leeming, to his daughter‑in‑law, Jennifer Alice Chappell, who is the widow of the deceased's son who has passed away;

   (c)a property at 8 Comet Street, Beckenham, to his grandson, Matthew Ronald De La Rie, who is the plaintiff's half‑brother, subject to certain conditions limiting his right to sell the property;

   (d)a property at 33 Galaxy Street, Beckenham, to his grandson, Ben Joe De La Rie, the plaintiff's half‑brother, subject to certain conditions limiting his right to sell that property;

   (e)the residue of his estate in equal shares to the twelfth and thirteenth defendants as tenants in common.

5. It was agreed between the parties that as at the date of death the value of the deceased's estate was $4,877,376.90.  It was also agreed as at the date of trial, the value of the estate was $4,294,116.43.  This figure did not include the three houses which passed to the beneficiaries under pars (b), (c) and (d) above.  None of the payments of $50,000 to the grandchildren had been made.  Leaving to one side the distribution the Will anticipates being made to the plaintiff, that would mean the net value of the estate passing to the residuary beneficiaries would be $3,844,116.43.  (During the course of the trial, counsel for the executor indicated there may be some capital gains tax liability falling to the estate.  He said advice was being obtained on this issue.  Later in the trial, counsel indicated any capital gain tax liability could be put to one side.  I have approached the matter on that basis.)

6. In approaching an application under the Act, the court is to undertake a two‑stage process.  This was set out by Malcolm CJ in Bondelmonte v Blanckensee [1989] WAR 305 at 307. The first stage requires an assessment as to whether the Will adequately provides for the plaintiff. This assessment is to be made as at the date of death of the deceased. In his judgment, his Honour mentions factors which are to be taken into account. In this case, it is not necessary to go through those factors in any detail.

7. It is clear in this case the deceased did not adequately provide for the plaintiff.  During the course of the hearing, I put to counsel for the twelfth thirteenth defendants on two occasions, the first limb of the test has been satisfied.  While not conceding the point, counsel agreed it would be 'very hard' to put a counter argument.  In my view, the position is clear once the value of the estate and the way it is distributed are considered.  But lest there should be any doubt, I will detail other factors I have taken into consideration. 

8. As at the date of the death of the deceased, the plaintiff was 9 years of age.  He was living with his father, whose only means of income is a disability pension.  The plaintiff had some limited means as a consequence of shares he had inherited from his mother.  The plaintiff and his father were living in Housing Commission accommodation which they shared with, and which was in the name of, Mr Christopher Hewson's mother, the plaintiff's grandmother.  The plaintiff attended a private catholic primary school.  His father was unable to pay the school fees.  The plaintiff remained at the school, thanks to the generosity of the school administration.

9. The deceased provided adequately for each of the plaintiff's two half‑brothers.  He also left a property to the widow of his deceased son, although she had since remarried.  The only potential beneficiary not adequately provide for was the plaintiff.  He received only a modest amount from a very substantial estate.

10. In my view, this is as clear a case as could be imagined.  The Will of the deceased did not adequately provide for the plaintiff.

11. The question, then, is what amount should now be awarded to the plaintiff?  In approaching this issue, I have broken down the need of the plaintiff into a series of subcategories.  The first of these is housing.  As I have indicated, the plaintiff presently lives with his father and his grandmother.  His father has recently taken steps to become a joint tenant with the plaintiff's grandmother of the rental accommodation provided by Homeswest.  The plaintiff's grandmother is elderly and were she to pass away, there is a suggestion Homeswest might seek to move the plaintiff and his father to smaller accommodation.  It is by no means certain that will occur.  There is a degree of uncertainty in relation to the accommodation generally.

12. It is the view of the plaintiff's father it would be in his son's best interest to move to accommodation owned outright by the plaintiff.  With that in mind, Hegney Property Advisers were engaged to provide expert evidence as to the likely cost of accommodation.  When instructing the experts to advise as to the likely cost of providing a house, the plaintiff's solicitors (on Mr Hewson's instructions) stipulated the accommodation should have the following characteristics:

    1.to be modern in style, no more than 15 years old with minimal maintenance;

    2.to have three bedrooms and a study or four bedrooms;

    3.to have two bathrooms;

    4.have a yard in which children can play;

    5.stand alone, or strata title;

    6.have at least two living areas;

    7.to be fenced;

    8.have an enclosed garage;

    9.have air‑conditioning;

    10be close to a school bus route serving Trinity College;

    11.be in a 'neat' street with no 'obvious' rental properties or Homeswest properties;

    12.to be in the following suburbs:

    (a)Morley

    (b)Embleton

    (c)Dianella

    (d)Noranda

    (e)Bayswater

    (f)Kiara

    (g)Eden Hill

    (h)Beechboro

13. It will be apparent from the foregoing Mr Hewson anticipated the plaintiff would attend Trinity College.  I will deal more fully with this issue under the category of education.  For the present, it is enough to note the instructions to the valuers. 

14. Consequent upon these instructions, Mr Paul Sparta and Mr Ben Lamers of Hegney Property Advisers, prepared a report.  Mr Sparta attended for cross‑examination.  The methodology used in the report was to look at recent sales of comparable properties in the listed areas.  By way of example, a property at 3 Charlwood Way, Morley, was on the market for $579,000.  It was described in this way: 

    Approximately built in 2006, property appears to comprise four bedrooms, two bathrooms with a double garage under the main roof.  Feature include air‑conditioning and three living areas.  Rear yard appears slightly smaller than average in context to the brief supplied.  Property is situated approximately 100 metres from a park in what is considered a 'quiet' area.  Property is a 'stand Alone Strata' being one of two.  Situated on a 401 square metre allotment. 

15. And so the analysis goes on.  It was clear from Mr Sparta's evidence he had used an appropriate methodology in reaching his conclusions.  His evidence was unshaken in cross‑examination.  He provided a range of values for the areas he was to consider.  The lowest range was for Beechboro, where he estimated it would be possible to acquire a property fitting the description provided to him for between $470,000 and $560,000.  Other suburbs ranged upwards from there.  The most expensive suburb was Dianella, where the range was between $750,000 and $850,000. 

16. In my view, it is reasonable to provide for the plaintiff on the basis he and his father should have accommodation which broadly meets the criteria specified by Mr Christopher Hewson.  On that basis, it seems to me a provision of $700,000 would be appropriate.  That is not at the top of the range and it may be it limits the options available for purchase.  But it should be remembered the property will be occupied by the plaintiff and his father and perhaps (although not necessarily) by his grandmother.  It is clear from Mr Sparta's evidence there is a good range of properties available which will meet almost all of the criteria set out by Mr Hewson in the areas Mr Hewson sees as desirable.  There will, of course, be transaction costs - stamp duty and the like - and the cost of relocation.  For that reason, I would add another $50,000, making a total under this category of $750,000. 

17. Turning then to education, Mr Hewson said in his evidence he hoped the plaintiff would attend Trinity College.  It emerged during cross‑examination Mr Hewson had applied to Trinity College to have his son start in year 8 and the application had been rejected.  There was no evidence why it had been rejected, or whether it could possibly be the subject of reconsideration.  But even if Trinity College was not available, Mr Hewson was anxious his son should attend a 'faith‑based school' for the period of his secondary education.  As I understood the position of the twelfth and thirteenth defendants, they were of the view it would be appropriate for the plaintiff to attend a government school. 

18. Evidence was given on behalf of the plaintiff by Dr Genevieve Milnes, a clinical psychologist.  Dr Milnes had treated the plaintiff in relation to certain behavioural issues which arose after the death of his mother.  During the course of her evidence, Dr Milnes expressed the view it would be beneficial if the plaintiff were to reside in a boarding school during the week, returning home to his father on the weekends.  That Dr Milnes was of this view only emerged during cross‑examination.  In fairness to all the parties, in determining what allowance is to be made for education, I have not allowed for the possibility the plaintiff will board. 

19. In my view, it is appropriate to make an allowance based upon Alex attending a private school.  It is his father's wish that he do so and those wishes should be respected.  Whether the school is Trinity College or some other private school remains to be seen.  Dr Milnes does suggest the plaintiff has had some behavioural problems in the past, but those now appear to have settled.  Further, in determining whether an allowance should be made for private secondary education, I am not making any value‑judgment as to the relative merits of private schools as against public schools.  Mr Hewson is a practising catholic and it is not unreasonable to expect he would wish his son, if at all possible, to attend a private catholic school.

20. Appearing at page 22 of the affidavit of Christopher Robert Hewson, sworn 21 December 2010, is a schedule of fees for Trinity College covering years 7 to 12.  The fees are just under $10,000 per year.  Assuming there will be an increase in the fees over the period the plaintiff attends high school, in my view, an amount of $75,000 ought be allowed for education expenses. 

21. The third and final category is a provision for living expenses.  The plaintiff is an active sportsman and that requires the provision of equipment, payment of club membership fees and the like.  There are the usual necessities of life - food, clothing and transport.  There are the outgoings on any property acquired.  There is the cost of extra‑curricula school activities.  All of these are difficult to assess - particularly when Mr Hewson will be living with the plaintiff and could be expected to make a contribution to the everyday cost of living and to the maintenance of his son. 

22. In my view, it would be proper to allow an amount of $150,000 under this category.

23. In total, then, breaking the needs of the plaintiff down in this way, I have reached a figure of $975,000.  On top of that, an allowance must be made for costs of the Public Trustee in administering the trust fund on behalf of the plaintiff.  On that basis, I would round out the plaintiff's entitlement to $1 m.  That would replace the $50,000 left to the plaintiff in the Will.  Given the value of the deceased's estate, that does not seem to me to be an unreasonable amount.

24. On publication of these reasons, the parties may want to consider the form of orders.  The deceased's estate comprises a number of properties, some of which may have to be sold before any payment can be made to the Public Trustee on behalf of the plaintiff.  The plaintiff's solicitors may also wish to consider the terms upon which the Trustee is to hold the fund.  The parties should confer as to the form of orders.  If no agreement can be reached, the matter can be relisted for further argument.

25. Subject to hearing from the parties, it would seem to me the proper order is the costs of this application be paid out of the estate.