Humphries v Public Trustee

[2001] NSWSC 564

CITATION:	HUMPHRIES v PUBLIC TRUSTEE [2001] NSWSC 564
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 1809/2000
HEARING DATE(S):	26/06/2001
JUDGMENT DATE:	26 June 2001
PARTIES :	RHANA HUMPHRIES v PUBLIC TRUSTEE
JUDGMENT OF:	Master Macready at 1

COUNSEL :	P.Blackburn-Hart for plaintiff L. Ellison for defendant
SOLICITORS:	Peedoms Solicitors, Wollongong P.J. Whitehead for Public Trustee
CATCHWORDS:	Family Provision. - Application by daughter in resepct of small estate left to grandchildren. - Order for legacy. - No matter of principle.
DECISION:	Paragraph 56

- 1 -

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Rena Elizabeth Cook who died on 7 January 1999.

2   She was survived by her daughter, the plaintiff in the action, and a number of grandchildren and great grandchildren. In her will, which was made on 18 December 1997, she appointed the Public Trustee as executor and left the whole of her estate to her four great grandsons, who survived her and reached eighteen years of age. Those four great grandsons, who have not reached eighteen years of age and who have survived her, are: Ryan David Humphries, Joel Gardiner Humphries, Kieren James Humphries and Timothy Robert Delaney. No provision was made for the plaintiff under the will.

3   The estate of the deceased consisted of a property and some cash and the house which would appear now to be worth $175,000. There is cash of $16,120, making a total of $191,120. There is the Public Trustee's commission of $6100. The plaintiff's legal costs are assessed at $15,500 and the defendant's at $10,800. In addition, there will be the selling costs of the property. One would expect a distributable estate, assuming, of course, an order is made in favour of the plaintiff, to be in the order of $150,000.

4   I will deal with some brief matters of family history. The deceased married in 1934. It is apparent from the evidence that she was already at that time pregnant and her child, the plaintiff, was born on 31 March 1935. A brother to the plaintiff, Gary, was born on 28 January 1937.

5   In 1954 the plaintiff married and she had her daughter Kaye on 9 March 1956. Her son David was born on 11 May 1962.

6   The deceased's son and the plaintiff's brother, Gary, died on 1 September 1967. Shortly thereafter, the deceased's father died on 1 June 1968, he apparently committing suicide.

7   In 1970 there was an incident to which I will return, when the deceased went to Gladesville Psychiatric Hospital. She was again, in 1992, in Wollongong Hospital. It was after that time that the plaintiff chose to no longer visit the deceased. I will come back to the reasons for that later.

8   Her will was made on 18 November 1997, to which I have referred. In August or September 1998 the deceased was again in Wollongong Hospital. The plaintiff, having found out about it, went and spent a week visiting her several times a day.

9   The deceased died, as I have mentioned, on 7 January 1999. Probate has been granted and the proceedings commenced within time.

10 In applications under the Family Provision Act the High Court has recently 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' et cetera were explained in Bosch v Perpetual Trustee Co Limited. The determination of the first stage in the two-stage process calls for 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 the 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."

11   As directed by the High Court, I turn to look at the present situation of the plaintiff. She is married and is now sixty-six years of age. Her husband is nearly seventy years of age. Their two children are no longer dependent upon them.

12   Her assets at the present time are as follows:

13   They have a home in Wollongong, having a value of $160,000. The plaintiff has a credit in her City Coast Credit Union of $75,805.94. Her husband has deposits also with the credit union in different accounts totalling $144,000. They have their furniture and jewellery estimated at $10,000 and a vehicle worth $11,000. They do not have any debts.

14   The plaintiff works as a technical assistant for the Illawarra Health Service. Her net pay is $920.60 per fortnight. Her employer contributes to superannuation which presently has a balance of some $17,418. Her husband, at his age, is still driving a taxi for four days a week during daylight hours. He earns only between $200 and $250 a week from taxi driving and does not drive at night because of difficulties. His interest income is about $6000 a year.

15   The plaintiff's husband has no superannuation. As I have indicated, the plaintiff's superannuation is fairly minimal.

16   The plaintiff herself has some medical problems. She suffers from a gastric ulcer and cardio vascular disease for which she is treated. She also has arthritis and that affects her. Unfortunately, she cannot treat it with medication. She has to use her hands considerably at work and this causes her pain because of her arthritis. She has problems with varicose veins.

17   Her husband suffers from tinnitus and hypertension and he takes medication for the latter condition. Both the plaintiff and her husband would like to retire but they are concerned that what little investments they have are not sufficient. There is concern, obviously, for the plaintiff's husband to keep on driving taxis at his age.

18   It is apparent that their house, in which they have lived for many years, needs some refurbishment. I think they have recently done the kitchen. There are a number of things that they would like to do which they have quotes for of some $38,230. The need for this is also verified by their son who has given evidence. The plaintiff also needs some dental work which will cost about $8200.

19 One of the difficult matters in this case is the relationship between the plaintiff and her mother. I have indicated that there was a break in the relationship from 1992 onwards. Section 7 of the Family Provision Act provides that if a court is satisfied that a person is an eligible person "it may order that such provision be made out of the estate or notional estate, or both, of the deceased person as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person."

20   I now turn to a number of authorities that deal with this matter:

21 In Benney v Jones (1991) 23 NSWLR 559 at 568-9, Priestley JA noted as follows:

"This conclusion directly raises the question of whether the word 'ought' in s 7 of the Act carries with it an idea of moral obligation. In answering this question some guidance may be obtained from authoritative decisions under the Testator's Family Maintenance & Guardianship of Infants Act 1916 (as amended) using due care to take account of the differences between the two Acts.

... ...

It seems plain from the comparison of the two Acts, and particularly from s 3 of the 1916 Act and s 7 and s 9 of the present Act, that language from the earlier Act has been deliberately carried into the later one. It would seem that at least one purpose of this retention of much litigated sets of words is that the benefit of the authorities on those words may be available in the construction of the present Act. The same reasoning supports the view that where the new Act uses a different word in an important operative section from the word in the corresponding section of the earlier Act, the difference is deliberate and has a purpose.

The Act draws a distinction between the eligible persons referred to in par(a) and par(b) on the one hand and par(c) and par(d) on the other. Broadly speaking, the distinction can be seen as one between classes of people who, in the ordinary course of family life, would, prima facie, be persons to whom the deceased's person spoken of i s 3 of the 1916 Act and s7 of the present Act would have an obligation to make provision, whereas those in the other class would, prima facie, not be regarded in the ordinary course of family life as being likely to be made the subject of provision by the deceased.

In regard to the first class, the more usual approach under the 1916 Act was that before making an order, the Court needed to be satisfied that the testator ought to have made provision for the applicant, in all the circumstances of the case: see Bosch v Perpetual Trustee Co Ltd (1938) AC 463 at 478-479 and Hughes v National Trustees Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134 at 146-147 per Gibbs J, with whom Mason and Aitkin JJ both agreed. However, there was a different view, expressed by Murphy J, in the same case when,m after commenting (at 158) that 'many cases suggest that an applicant must show a moral claim ...', he went on to say that this was a gloss on the Act and was unwarranted and inconsistent with the language of the legislative scheme.

It seems to me that the introduction into s 7 of the present Act the word 'ought' in replacement of the words from s 3 of the 1916 Act 'as the Court thinks fit' shows the intention of the present Act to accept the approach adopted by the majority in Hughes and to reject that of Murphy J. The word 'ought' seems to be deliberately adopted, in the present Act, from what Gibbs J called the classical statement in Bosch. To my mind, this is a very clear indication that an eligible person within par(c) and par(d) must show a moral claim on the estate before an order can be made; I also think this is the same thing as saying that the deceased person must have had a moral obligation to that eligible person. It is hard to imagine how the one could exist without the other. It seems to me that the same reasoning is very probably applicable to applications by eligible persons within par(a) and par(b) although it is unnecessary to decide that in this case."

22   Meagher JA (NSWLR at 570) agreed with Priestley JA. Meagher JA had previously expressed a view in Hughes v Hughes Court of Appeal, unreported 6 June 1989 (an adult daughter case) that the duty arose to make provision as established in that case as follows:

"Her right arises not merely from the bare fact of parenthood, which of itself does not generate a right , but from the general circumstances of the case; namely, parenthood, the performance of normal filial duties in the 10 years after she left school and in the two periods between her earlier trips and in her professed and continued willingness to be of whatever assistance to her father she could be." (Emphasis added).

23   Hope and Samuels JJA concurred in the judgment of Meagher JA in Hughes v Hughes.

24   In Benney v Jones, Mahoney JA at 500 said:

"Whether an order should be made raises (as it has been described) the moral or normative question. That question remains, whether the application is made under the former or the present Act. The nature of that question was discussed in this Court and in the High Court in White v Barron (1980) 144 CLR 431; and in Goodman v Windeyer (1980) 144 CLR 490; see also Kearns v Ellis (Court of Appeal 5 December 1984 unreported) and Gorton v Parks (1989) 17 NSWLR 1.
Where the applicant is a member of the deceased's family, as referred to in the earlier paragraphs of s 6(1) relating to eligible persons, the nature of the duty which the deceased should have fulfilled is reasonably clear."

25 In Gorton v Parks (1989) 17 NSWLR 1 at 7 ff, Bryson J analysed the relevant authorities dealing with claims by able-bodied adult males. For present purposes, there is no reason to distinguish able-bodied adult females. In the course of doing so, his Honour noted:

"It is then established by authority that no special principle is to be applied, and it seems important to warn myself against allowing prima facie views or the success of some applicants who have special claims to disturb the perception that there is no special principle. In particular, an idea that an able-bodied adult male who is earning a living could have no claim in relation to resources of any size is quite erroneous and must not be entertained either prima facie or at any stage. It is a discarded categorisation."

26 Bryson J also rationalised the decision of Pontifical Society for the Propagation of the Faith v Scales (Scales case (1962) 107 CLR 9. Scales' case was a claim by an adult son who unsuccessful and where Dixon CJ said (at 18):

"The outstanding fact of the case is that, throughout the period of their joint lives, the son disregarded the father and the father disregarded the son and after a time expressly disowned him ... ... In truth there is the bare fact of paternity and no other mutual relation: the case depends upon that fact and basically upon nothing else except all the arguments of right and wrong that may be considered to spring from that source and affect the situation of the parties as it existed at the testator's death."

27 At 17 NSWLR 1 at 9-10, Bryson J sought to distinguish Scales' case. He said:

"Dixon CJ did not expound the weight which he gave to the bare fact of paternity and nothing else; I regard that bare fact as of very great importance in morality. The idea that the moral obligations arising from paternity are diminished or do not exist if the parent withholds acknowledgement of the obligations or of the child appears to me to be an idea from a distant age. There have been changes over long periods in the beliefs of the community about moral duty to children and there seems in the distant past to have been some acceptance of a view that unless children were legitimate or were acknowledged by their father, he has no moral duty towards them. There seem to have been legal systems in the past in which attempts to provide for illegitimate children by will were ineffective ... ... Under modern legislation parental duties are not distinguished according to acknowledgement or legitimacy. The idea that acknowledgement by a parent of a child or full accordance of status by a parent might increase the responsibilities of a parent or be significant to moral duty towards the child, with the contrary implications, seems a very strange idea and it is curious to find it, even in a limited way, in a judgment published as recently as 1962."

28   Bryson J in any event distinguished Scales case (p 11) on the basis that on the facts before him the plaintiffs -

"In their childhood years they lived in the same street in which their father lived in far greater prosperity a few doors away: they saw him and he saw them from time to time and they had a relationship with him in which negative aspects preponderated greatly or almost exclusively over any positive aspects of the familial relations. A mutual relation there was. Each of them had a relationship with the testator which the testator brought to an end; in the case of Mrs Joan Adams and Mr John Culcott, he saw something of them and made an inadequate contribution to their maintenance in their childhood but in effect abandoned the relationship before they reached mature years and at a time when they cannot fairly be held responsible for ending the relationship. They were present before his eyes in their childhood and years of education and trade training; he knew who they were, he must have had an idea of what they were doing and he did not make even token attempts to assist them in any way. ... ... "

29 In Walker v Walker (unreported 17 May 1996) Young J reviewed the question of moral duty. His Honour reviewed Gorton's case in the context of the earlier High Court and House of Lords decisions, noting the effect of Singer v Berghouse (1994) 184 CLR 201 as follows:

"In Singer's case, a widow who had been married less than one year to a 68 year old man failed in her application under this Act in this Court, in the Court of Appeal and in the High Court. The majority of the Court said at page 298 and following that to assess a claim under the present Act there is a two-stage process. The first stage is to determine whether an applicant has been left without adequate provision and the second stage is to determine what provision ought to have been made. At p 209 the Judges point out that Re Allen has guided past courts and has three times been approved by the Privy Council or High Court, but that 'we doubt this statement provides useful assistance in elucidating the statutory provisions. Indeed, references to 'moral duty' or moral obligation' may well be understood as amounting to a gloss on the statutory language'. They then say 'the determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for 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."

30   Young J also observed:

"In Fraser's case, Kirby P at p 29 said that 'I do not consider that it would be safe for this Court, or other courts in this State, to disregard the obiter dicta in Singer v Berghouse concerning 'moral duty'. However, his Honour's decision made it quite clear that he thought that references to moral duty in the judgment under appeal really amounted to little more than a shorthand expression for the lengthier statutory provisions actually used in the Act. His Honour made it clear that there was no drastic change in the law 'either by the observations of the majority in Singer or by the High Court's reference in the footnote to what Murphy J said earlier (p 27).
Handley JA thought that the dicta in the High Court in Singer should not be followed and pointed out that even as late as 1994 in Neil v Nott (1994) 68 ALJR 509 the High Court was itself using the words 'moral claim' in decisions under this Act.
Sheller JA again did not consider that the High Court's suggested abandonment of concepts of moral claim or moral obligation changed the task of the Court. He said, with reference to decisions of Murphy J at p 42, 'the point made in the judgments to which Murphy J referred was that the existence of a moral obligation owed by the deceased to the claimant was a necessary part of the claimant's case but not alone sufficient to justify an order in the claimant's favour. Thus, in theory an order would not be made out of the estate of a deceased parent in favour of a child who had, over many years, completely cut himself or herself off from the parent, even though the child was left in need. On the other hand, a wealthy child who had cared for the parent throughout his or her life may have no claim for further provision under the legislation. The Courts, in giving effect to the legislative scheme, having accepted that the bare moral claims of the sort mentioned by Stout CJ in re Allardice (1910) 29 NSWLR 959, 970 will not alone suffice to empower the Court to make an order.'"

31   In Walker v Walker (p 27) Young J noted:

"It is often impossible to work out whether the degree of separation between parent and child at the date of the parent's death is solely the fault of either or whether it has come about by factors too strong for either to control or somewhere in between.

The important matter is no fault, but whether, in all the circumstances, it would be expected by the community that the testator would have to make a greater benefaction than he in fact did to constitute proper or adequate provision for the plaintiff.

Accordingly, I reject the approach that all an applicant under this Act has to do is to prove that he or she is an eligible person and that he or she reasonably needs more financial assistance. The cases show that there must be a full investigation into all the facts and circumstances of the matter to see whether the community would expect that a person in the plight of this testator ought to have made provision or further provision for the applicant. ... "

32   It seems to me that the formulation of Young J is sufficient and appropriate to guide me in determining these matters.

33   I will now turn to the matters which touch on the relationship between the deceased and the plaintiff. It is clear that the relationship between the plaintiff and the deceased was not good for many years. The first problem that occurred was in the early 1970s when, and this, it is to be remembered, was after the death of the deceased's son and husband, the plaintiff found that she was locked out of her mother's house. She had always had a key and always had access to it. She managed to have a neighbour persuade her to give her a key and opened the house. She found her mother unconscious inside. She was taken to hospital and, apparently, she had tried to commit suicide. She spent some time in Gladesville Psychiatric Hospital.

34   The evidence indicates that the deceased was critical of the daughter for not being there waiting for her when she recovered consciousness and that she was not as upset as the deceased had thought she should have been.

35   The plaintiff indicated in her evidence that she thought that her mother always had some resentment to her, arising from the fact that the plaintiff was particularly close to her father and the circumstances of her mother's pregnancy.

36   Notwithstanding the difficulties that occurred in 1972, the plaintiff then continued to come and visit. She continued to do so until the incident in July or August 1992. The deceased then refused to see her daughter and, clearly, she was suffering further problems because she was in hospital in Wollongong in September or October.

37   The plaintiff went to see her and, as a result of discussions between the resident medical officer and the deceased and the plaintiff, it was made plain to the plaintiff that the deceased did not want to see her. There was also an incident shortly before this where the plaintiff and her husband had tried to see her mother and leave a present for her. She would not let them in. The plaintiff then left the present on the door step. The deceased rang up the taxi service for whom the plaintiff's husband drove and requested that he come and pick up the parcel, which he did.

38   This was, as the plaintiff describes in her evidence, a turning point. It was a very clear rejection by her mother. The plaintiff can only speculate about the reasons, although she is probably the best person to know what they are, and there is no other evidence which helps the Court in this regard.

39   In this regard, I am satisfied that the plaintiff has been quite truthful with the Court on this matter. She did ring twice in 1992 but, in effect, was rebuffed by her mother and did not go and see her. She kept contact through aunts who were in contact with her mother and found she was in hospital in 1998. She spent time visiting her mother and, once again, there were rebuffs by her mother in that she had other people named as her next of kin in hospital.

40   Her mother died in January 1999. In the circumstances of this case it seems to me that it is one of those sad situations where the deceased, in fact, rejected, probably for no good reason and probably because of some psychiatric problem, the plaintiff. There is nothing in what the plaintiff did or did not do which I would think would in any way affect the plaintiff's entitlement to receive an order.

41   It is, of course, necessary to consider the situation of others who have a claim on the bounty of the deceased. In this case the only ones are the four great grandchildren who are named as beneficiaries in the deceased's will.

42   David Humphries is the father of three of the children. Kaye Delaney is the mother of one of the children. Both children have sworn affidavits supporting their mother's application and putting before the Court their situation so that the Court can assess the children's needs. I think the wishes of the children are not relevant and I think too, as counsel for the defendant has carefully indicated in submissions, that I should consider the situation of the beneficiaries apart from the wishes of their parents. I do note the position that they are in because that, obviously, has a bearing on the position of the children.

43   I turn to deal with David's children. Ryan was born on 22 February 1986 and is now aged fifteen. He lives with is parents at their home, which is being renovated and is quite appropriate for the whole family. He is attending Lake Illawarra High School and is in year 10 and is thinking of doing his Higher School Certificate, unless he has some apprenticeship which might be more attractive.

44   At this stage he is turning his mind to the future but has made no decisions. He has the normal interests of a child of that age.

45   Joel was born on 11 May 1987 and is now aged fourteen. He is also at that school in year 9 and is more positive about wanting to do the Higher School Certificate and then go on to university. He has yet to think of his future.

46   The other child, Kieren, born on 28 December 1996 is now aged four years.

47   It is clear that all these three children are healthy and well and that they live with their parents in appropriate circumstances. The parents own their home, subject to a usual mortgage, and are in a situation where both parents are working and receiving a reasonable wage. They have expressed the desire to care for their children and look after them through school and university.

48   Timothy is the son of Kaye Delaney. He was born on 22 June 1991 and is ten years of age. His parents separated and I have affidavits from both his parents. Timothy originally lived with his mother who was, apparently, living in rented accommodation and she seemed to be well provided for by Timothy's father, Terrence Delaney. The arrangements have now changed and the Court does not know the reason why the arrangements have changed but Timothy is living with his father Terrence in a three-bedroom villa in Queensland. He spends the week with his father and the weekends with his mother.

49   Timothy's father has a villa worth $160,000, furnishings and superannuation of $40,000 and he has a mortgage of some $80,000. It is clear from the mother's affidavit that Timothy has been well provided for and I have no doubt that between the two of them he will be appropriately provided for and at lease his father has some assets behind him.

50   The other matter which should be noted in respect of the great grandchildren is the fact that there was little relationship between the deceased and the great grandchildren. She only ever met two of them and on few occasions. This is a matter that has to be put in the balance.

51   The difficulty in this case is trying to assess what is an appropriate amount to provide for the plaintiff. The plaintiff has asked that she be provided with a legacy for, in substance, the whole of the $150,000 that is left. It has been urged on me that it would be appropriate to preserve something for the children who have their what are sometimes described as their most expensive periods in front of them in the short term. It is suggested, on the defendant's behalf, that only a modest legacy be given to the plaintiff.

52   The difficulty is, of course, that it is hard to estimate precisely what might happen in the future for the plaintiff. She and her husband have a view that they should try and provide for themselves. This is an admirable view and one, unfortunately, which is rarely seen in this Court. There is, of course, the fact that because of their age they might both be entitled to a pension although no doubt reduced because they have been careful enough to save funds to look after themselves in retirement.

53   They do have a fairly substantial amount of funds. There is $140,000 and the $75,000 to which I have referred.

54   It is also apparent from the evidence that their lifestyle is such that they have been using capital at the rate of about $10,000 per annum. That lifestyle is one which is modest by most people's standards. It does include $6000 a year for holidays, which lets them go and visit their grandchildren. It does not seem to be lavish. However, it is difficult to precisely work out what would be an appropriate figure. I do not have life expectancies but, obviously, they will live for some time.

55   In my view, they ought to have a substantial legacy. I think that there is still utility in leaving some residue in the estate because there are the uncertainties for the future of the children. Although they are all now well, one never knows what happens or whether their parents might fall on harder times.

56   In the circumstances, the order I make is that the plaintiff receive a legacy out of the estate of the deceased of the sum of $120,000.

57   I order that the plaintiff's costs on a party/party basis and the defendant's on an indemnity basis be retained or be paid out of the estate of the deceased.

58   The exhibits are returned.

59   I also order that the plaintiff receive a legacy of the jewellery and the furniture and effects in the deceased's property. I order that interest should not run on the legacy until 1 December 2001 at the rate provided for in the Wills Probate and Administration Act.

Last Modified: 07/26/2001