Johnston v Storey

[2005] NSWSC 1096

CITATION:	Johnston v Storey [2005] NSWSC 1096 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	25 & 26 October 2005
JUDGMENT DATE :	27 October 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Associate Justice Macready at 1

CATCHWORDS:	Family Provision. Application by daughter omitted from will. Order for modest legacy. No matter of principle.
PARTIES:	Janet Johnston v Crhistopher James Storey and Wendy Storey
FILE NUMBER(S):	SC 5886 of 2004
COUNSEL:	Mr J.A. Trebeck for plaintiff Miss S.A. Mason for defendants
SOLICITORS:	Bryden's Law Office for plaintiff Baker Deane & Nutt for defendants

LOWER COURT JURISDICTION:

- 1 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE MACREADY

THURSDAY 27 OCTOBER 2005

5886/04 - JANET JOHNSTON v CHRISTOPHER JAMES STOREY & ANOR

JUDGMENT:

1 HIS HONOUR: This is an application under the Family Provision Act in respect of the estate of the late Daphne Mary Storey, who died on 1 May 2003. She was survived by the plaintiff, her daughter, and a number of grandchildren, including the first defendant.

LAST WILL OF THE DECEASED

2 The deceased made her last will on 29 August 2002. She appointed the first defendant and his now estranged wife, Wendy Storey, as executors. Under the will she gave her home at Surf Beach to her grandson, Christopher, the first defendant. The residue of her estate was given to the children of the grandchildren. These are the children of Christopher Storey and Loretta Lloyd. There are three of them, Jessica Storey, born 21 October 1998, Chloe Storey born 2 July 2001 and Olivia Lloyd born 15 November 2002. There was no provision in the will for the plaintiff.

THE ESTATE OF THE DECEASED

3 The estate consisted of the deceased’s home at Surf Beach and bank accounts of $255,000. The home at Surf Beach has been sold and the proceeds of $400,000 have been placed on term deposit. The cash has been collected and $86,172.77 has been set aside in an account for each of the three grandchildren. Each account contains a similar amount.

FAMILY HISTORY

4 The plaintiff was born in October 1937 and is now sixty eight. She married in February 1958 and she and her husband, Geoffrey Dunn, had four children. They separated in 1969. In due course the plaintiff moved from Queanbeyan where they lived to Bowral and she formed a de facto relationship with Brian Johnston, a jockey. Between 1972 and 1986 she moved to various horse racing locations throughout the country, finally residing at Warwick Farm. In 1988 she obtained employment at Government House as the personal assistant to the Governor’s wife. In 1992 she resigned from that position to look after her father.

5 In 1991 the deceased broke a hip and she then moved into Loretta’s house in Queanbeyan. Loretta is a sister of the plaintiff. At that stage there were also concerns about the plaintiff’s father’s health, Mervyn. Eventually he had a stroke in November 1991. He was admitted to Queanbeyan Hospital, Liverpool Hospital and then to a rehabilitation centre at Lidcombe. He was severely disabled as a result of his stroke and was finally discharged into the care of the plaintiff in August 1992. By agreement amongst the family the plaintiff gave up her employment and started to care for her father in her rented accommodation in Sydney. In August 1992 the plaintiff sold her old Queanbeyan home. The net proceeds of sale were $45,435.50. Over the period from 1994 through to 1996 and even after there were various funds provided for the plaintiff by the deceased to enable her to care for the plaintiff’s father, the deceased’s husband. Eventually the plaintiff’s father, Mervyn, died on 2 August 1996. Some two years later the plaintiff’s sister, Loretta, was diagnosed with cancer and she underwent chemotherapy which had to be in Sydney. She came and lived with her sister, the plaintiff, for six months from April to October while she underwent chemotherapy. Again in between June and October 2001 there was a time when Loretta came to live with the plaintiff whilst undergoing further chemotherapy. Loretta eventually died on 9 December 2001.

6 On 29 August 2002 the deceased made her last will. The first defendant and second defendant separated in December 2002. The deceased was eventually admitted to hospital at the end of 2002 and she died on 1 May 2003. The plaintiff was not told about the death. There is a debate in the evidence as to whether she was contactable but it is plain that the first defendant did not contact her because of what was said to him by another relative. The plaintiff found out about the death accidentally on a visit to Canberra some two weeks after she died. Probate was granted and the proceedings were commenced within time.

7 The plaintiff is an eligible person. 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 a 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”

THE PLAINTIFF’S SITUATION IN LIFE:

8 The Plaintiff is sixty eight years of age and lives alone. Her de facto partner suffers from dementia and lives in a nursing home. She lives in a property at 17 Manning St, Warwick Farm, which is a property rented by the former de facto partner of her daughter and he allows her to live in stable premises free of charge. The granny flat (effectively what it is) consists of a bedroom, bathroom, kitchen, stove and sink and a small living area. She receives a disability pension of $241.00 per week. If she were paying rent she would also qualify for rental assistance of $49.60 per week. This uses all her income, although details of her expenses are not given. She has no assets and no doubt the $45,000, which she received in 1992, was spent over the years.

9 So far as her medical situation is concerned there is a report of a treating doctor who has seen her since 1987. She has severe osteoarthritis involving her cervical lumbar spine, hands and feet. She suffers from an advanced stage of her condition requiring anti inflammatory treatment and narcotic analgesia on a daily basis. She suffered injury to her right wrist about two years ago which exacerbated her arthritis in that area. She has been recommended surgery for ligament reconstruction but she has been unable to undergo the procedure. It is plain that her osteoarthritis is incurable. Gradual deterioration over the years is anticipated, therefore, it is likely she will require anti inflammatory treatment and analgesia indefinitely. She says that she would like to be able to have physiotherapy, however, at the moment she cannot afford it.

10 An important matter in this case is the relationship between the plaintiff and the deceased, having regard to the fact that no provision was made for the plaintiff in the will of the deceased. The relationship seems to have deteriorated after Loretta’s death in December 2001. There are a number of causes. One, matters concerning evidence of complaints about the plaintiff always asking her mother for money; two, matters arising out of the time when Loretta stayed with the plaintiff when she was having chemotherapy in Sydney.

11 So far as the first matter of always asking for money, this seems to go back to the time when the plaintiff looked after her father between 1991 and 1996. It is plain that from the details supplied by the plaintiff there were substantial additional costs. Costs for extensions to the house and other matters were quantified at $33,190 and pharmaceutical expenses over the years were in the order of $40,952. There was some extra electricity of $1,120. She did qualify for assistance for these expenses of $25 per week, which brings her net expenditure down to somewhere in the order of $67,463. It is plain from the deposit slips in evidence that over the period up until December 1996, when she ceased caring for her father, $43,000 approximately was paid by the deceased. The total amount was $65,300 and it is plain that these additional amounts, some $12,300, were paid over the several years after this period except for when Loretta was staying with the plaintiff.

12 Clearly because there were these payments after the death of the father this may have been the cause of the complaints by the deceased. There is evidence, of course, that these complaints were made by the deceased to other people who have given evidence in the case. The fact that these payments were made later after the death of the plaintiff’s father may illustrate that the plaintiff had a need at the time and the fact of these payments must, of course, be taken into account in considering the jurisdictional questions. However, the fact that such requests were made perhaps to the annoyance of the deceased is not I would have thought conduct disentitling or such as to reduce the claim other than in the way I have indicated. Plainly the deceased felt the need to accede to the requests.

13 The time that Loretta stayed with the plaintiff was dealt with by a number of witnesses. The best evidence of what happened seems to come from Lara Lloyd, the daughter of Loretta, and I accept Lara’s evidence. Loretta had two cards, one was a credit card and another a card which enabled her pension to be withdrawn from the bank, which by arrangement between the sisters was drawn by the plaintiff to meet both the sister’s expenses. Apparently the credit card had a limit of $2,000 and that was all used by the plaintiff by the end of Loretta’s stay. The plaintiff apparently promised to pay it back to her sister. Apparently it was not paid and excuses were given for not paying it back from time to time. That no doubt came to the attention of the deceased and may well have influenced her in not making provision for the plaintiff. However, it really was a matter between the two sisters and cannot be conduct disentitling as against the deceased.

14 I have mentioned the benefits received by the plaintiff after the death of the father. There are others. On marriage in 1957 the plaintiff’s parents gave the plaintiff and her husband a block of land in Queanbeyan. She and her husband built a house on it with borrowed funds. From time to time her parents helped her out with the rates but when she moved to Sydney it became necessary to sell it. It was sold in 1992 for $125,000. The net proceeds of $45,000 plus were received. Apparently the deceased did not know that she only received the net proceeds and thought she received the total sale price. This may also have influenced her in a decision to leave the plaintiff out of the will. However, of importance in considering the claim of the plaintiff is that she and her husband received the block of land which produced the balance sum. She also was able to get that because her father bought out her husband by way of property settlement, in a sum of $20,000. Although paid by the father, to the extent the father and mother were still alive at that stage this indicates a provision in part by the deceased.

15 There are, of course, things done by the plaintiff which had benefited the deceased. This was primarily caring between 1991 and 1996 of the father. The care was clearly full time care twenty four hours a day seven days a week. It was described in these terms by Elizabeth Ann Oldfield, one of the daughters of the plaintiff:

“My grandfather needed twenty four hour constant care. My mother would need to do everything for him including drip feeding him, lifting him in and out of bed and into a wheelchair, take him for walks, sit with him, showering and toileting, give him his medication, exercise his joints and change his dressings. She did this for six years until his death in August 1997. She did not leave him throughout that entire period and sat with him constantly.
During the day I would come and keep her company. I would talk to her and assist her in turning my grandfather or lifting him but my mother would never leave him for fear that something would happen while she was gone.”

16 Although it seems to me the deceased provided all the necessary funds for the extra costs involved, there was a lot of physical and emotional effort involved in the father’s care. That the plaintiff could do that was a great help to the deceased, who had her own problems at the time. Also it is important to notice the plaintiff gave up her job as a personal assistant to the Governor’s wife at Government House. That was a job she had held for some four years and she gave it up so that she could look after her father.

17 It is necessary to look at the situation in life of others having a claim on the bounty of the deceased. In this case the only ones are the beneficiaries in the estate.

CHRISTOPHER STOREY

18 Christopher is married but he and his wife have separated and there are proceedings for property settlement on foot which have not yet been finalised. They have two children aged six and four. Their joint assets consist of a home at Wangara Crescent, Queanbeyan estimated, in February 2005, at $375,000, and a unit at Donald Road, Queanbeyan estimated at $210,000. There are some doubts about values as late in 2004 he estimated them in the Family Court proceedings at a slightly higher figure. However, I will adopt these current estimates for the purposes of this case. They have furniture of $6,000, two cars worth $19,800, cash of $11,000 and superannuation of $33,530, a total asset bill of $655,336 from which has to be deducted two mortgages on the properties totalling $225,018. Christopher works as a respite carer earning a gross figure of $430 per week. He has a family benefit of $43 per week and child support net of $21 per week. Currently he is receiving some $400 per week gross by way of interest on the sum which has been put aside in respect to the sale of the property. There is some doubt about his expenses but having regard to his debt free situation apart from mortgages they apparently have been managing up until separation. Plainly his assets will be substantially reduced when the proper settlement occurs, but having regard to provision by his parents for him and his wife it may be the split might favour him. I will assume, however, for the purpose of this case that he has a half share of the assets.

19 So far as their children are concerned there is no suggestion they are not in good health and each parent takes time caring for them.

20 The child Olivia is Lara Lloyd’s daughter. No financial information is available so presumably there is no concern there which needs to be addressed by the Court and, likewise, there is no evidence she is in ill health.

21 I turn to what is said by the plaintiff in respect of how she has been left with inadequate provision for her property maintenance, education and advancement in life. In this regard I am reminded by what was said by Sheller JA in the Court of Appeal in Singer v Berghouse on 23 July 1992. There his Honour had the following to say:

‘I must say that I find it extraordinary that the appellant presented scant or no evidence as to her present income and outgoings or as to her intentions or needs for the future or as to what lump sum provision applying appropriate discount tables would be required to meet these claims or needs, if they existed. In my opinion, in the circumstances of this case, for the court, in the absence of any such evidence, to make an order for the payment to the appellant of a lump sum is to do no more than act on speculation and, contrary to the prohibition contained in s9(2) of the Act, to alter the deceased’s disposition of his property in the absence of proof that he has inadequately provided for the appellant’.

22 In submissions it was suggested that the plaintiff needed money to assist with rent to supplement her domestic living costs to assist with buying presents for grandchildren, to spend money in moderation on entertainment, to go to the hairdresser from time to time, to have a modest holiday, and to establish a fund for exigencies. The evidence also disclosed a need for physiotherapy and an operation on her hand. None of these latter two items were costed nor was the delay in the public system for such matters dealt with in evidence.

23 The plaintiff is sixty eight and has a life expectancy of 18.6 years. I turn to the question of rent assistance.

24 Apart from the fact that she lives in her daughter’s former de facto’s home, there is no evidence of how long that arrangement will continue. Rent costs in the area are $150 to $185 per week but the plaintiff would be entitled to rental assistance of $49.60 per week. There are no projections of what would be an appropriate lump sum and no evidence to enable a view as to the likelihood of such need. Also importantly there has been no proper analysis of the actual expenditure of the plaintiff to demonstrate this need. All the other matters I mentioned have also, likewise, not been costed. However, it is plain that the plaintiff has a need for some fund at this stage in her life. If something happened in respect of her accommodation she may have to endure the delays of the public housing system before she can be accommodated.

25 In the circumstances, having regard to this fact and the other contingencies which a woman of her age and with her medical problems are likely to face, they might be likely to surface in the future. These, of course, cannot be quantified at this stage because they cannot be foreseen but something is likely to happen in advancing old age for a person with these disabilities.

26 I am mindful of the benefits she has received already, but she has contributed in the way I have set out above.

27 Christopher has his life still before him, and the plaintiff is approaching the end of her life. A balancing of all the considerations leads me to the view that she should have a legacy of $100,000 payable out of Christopher’s share. Christopher will, no doubt, have the benefits of his children’s money to help with their eduction over the years ahead.

28 The orders I make are as follows:

1. The plaintiff receive a legacy out of the estate of the deceased in the sum of $100,000.

2. That the burden of the legacy be borne by the share of the estate passing to the first defendant.
3. Interest will be payable on the legacy at the rate provided for under the Wills Probate and Administration Act on and from a day one month from the date of today.
4. The plaintiff’s costs on a party and party basis and the defendants on an indemnity basis be paid or retained out of the estate of the deceased.

(Mr Trebeck made an application from 18 October 2005 the plaintiff’s costs be assessed on an indemnity basis. Discussion ensued.)

29 I have heard submissions in respect of the costs order in favour of the plaintiff. There has been tendered a letter of 18 October 2005 in which the plaintiff said they were prepared to accept $90,000 plus costs. That was a Calderbank letter. In the circumstances, as counsel for the defendant does not have an instructing solicitor, I will not finally decide the matter but I will give the defendants until Friday 4 November to put any further submissions on the matter and in the absence of those submissions I propose then on that order to order that the plaintiff’s costs be on an indemnity basis on and from 21 October 2005.

5. Exhibits may be returned.

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07/11/2005 - Wrong file number in judgment - Paragraph(s) Not applicable