Keogh v Fayers

[2011] NSWSC 1010

Supreme Court

New South Wales

Medium Neutral Citation:	Keogh v Fayers [2011] NSWSC 1010
Hearing dates:	25 August 2011
Decision date:	25 August 2011
Jurisdiction:	Equity Division
Before:	Associate Justice Macready
Decision:	I make orders in the form of the short minutes which I will sign and date and place with the papers. Liberty to restore the matter to the list for further consideration in the event that there is any difficulty in the implementation of any of those orders.
Catchwords:	WILLS AND ESTATES - family provision claim - disability of claimant
Legislation Cited:	Succession Act 2006
Cases Cited:	Singer v Berghouse [1994] HCA 40
Category:	Principal judgment
Parties:	Pamela Faye Keogh by her tutor Peter John Lewis Pearce Fayers (Plaintiff) Jeanette May Rice - estate of the late Ellen Jean Keogh (defendant)
Representation:	Counsel Mr CF Hodgson for plaintiff Solicitors L Rundle & Co for plaintiff
File Number(s):	2010/00300580

Judgment

1. HIS HONOUR: FILLIN "MATTER NUMBER AND NAME" \* MERGEFORMAT This is an application under the Succession Act 2006 in respect of the estate of the late Ellen Jean Keogh, who died on 18 October 2009. The plaintiff is one of her five surviving children, as is the defendant.

The will of the deceased

1. The deceased's will was made on 11 January 2000 and she appointed the defendant as executrix. The relevant dispositive clauses are clauses 3 and 4, which are in these terms.

"3. I give, devise and bequeath the whole of my estate of whatsoever nature and kind and wheresoever situate to my trustee upon trust to use such part of my estate as is necessary to provide reasonable accommodation for my daughter Pamela Faye Keogh for life and I give devise and bequeath the rest and residue of my estate including the life interest remainder to be divided equally between my children.

4. I declare that my trustee may advance the whole or any part of the capital or income of my estate to which an infant beneficiary might be entitled whether absolutely or contingently in or towards maintenance education and advancements or general welfare of any such infant beneficiary during his or her minority."

The estate of the deceased

1. The estate consisted only of the house of the deceased. It was sold and the net proceeds which were received were in the sum of $387,641.16. From that there has to be deducted costs are the sale of the property and the probate costs which are in the amount of $6,660.26. The defendant's costs are estimated at $29,830.10, and the plaintiff's costs at $43,120.44. This gives a total of $80,110.80 and this leaves an estate of $307,530. Some interest has accrued since the sale and by the time the funds will be exhausted they will amount to about $3,000, which is approximately $1,500 a month.

Family history

1. The plaintiff was born in July 1949. She is one of seven children of the deceased. Two of the deceased's children pre-deceased her, as did her husband, the plaintiff's father.

1. In 1965, the plaintiff commenced work in a sheltered workshop. She has continued that employment throughout her life and now, being 62 years of age, has three years further employment before she has to cease work.

1. The deceased, as I have said, made her last will on 11 January 2000 and there is evidence which indicates she was concerned about making provision in the future for the plaintiff for reasons which will become apparent. She gave instructions to her solicitor to take this into account.

1. At the end of 2005, the deceased was dementing and unable to care for herself. At that stage the plaintiff still continued to live at the home and she and the deceased were joined by the defendant who lived there in order to ensure that the deceased and the plaintiff were properly cared for in the period to come.

1. As I have said above, the deceased died on 18 October 2009.

1. In January 2010, the plaintiff moved out of the house to live with Geoffrey Fayers. He is a person who is also intellectually disabled but they have known each other for some 30 years.

1. Probate was granted on 21 May 2010 and on 3 July 2010, the plaintiff married Geoffrey Fayers. As I have mentioned, he is disabled and his affairs are managed by his brothers.

1. These proceedings were commenced in time on 9 September 2010.

1. The property was sold by way of a contract entered into in May 2011 and was completed in early July 2011.

Eligibility

1. The plaintiff being a daughter of the deceased is an eligible person. Under the provisions of the former Act, the High Court has set out comments which are equally applicable under the Succession Act . In the case of Singer v Berghouse [1994] HCA 40, the court at page 209 said:-

"The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.

The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."

1. None of the other surviving children have put their financial circumstances or details of their relationships before the court. This means that in this case the Court can take it that they do not want those facts considered when the Court is considering what is the appropriate provision if the Court finds that the plaintiff has been left without adequate and proper provision.

1. The proceedings were commenced by the plaintiffs tutor, Peter John Lewis Pearce Fayers, who is a brother of her now husband, Geoffrey. The plaintiff is now 62 years of age and is intellectually disabled, having suffered from a cognitive impairment since birth. She also has restrictions to sight and reading problems and she fractured her ankle a number of years ago. She has worked in sheltered workshop employment since she was 16 years of age. She understands that she will be required to give that up on reaching age 65 years.

1. The plaintiff lived with her parents and then her mother, until her mother moved to a nursing home. She then lived with Jeanette in her mother's home until she married her husband on 3 July 2010. She lives independently with her husband in his one bedroom Housing Commission flat. She has no independent right to that accommodation and no automatic right to remain there if her husband dies before her. That accommodation is not particularly suitable for the plaintiff because it is cramped for two people, requires bus transport to the Seven Hills railway station and is a first-floor apartment which the plaintiff has difficulty accessing by the steep stairs thereto.

1. The plaintiff has approximately $5,000 in her bank account and limited superannuation. It appears that the withdrawal benefit is either $165.50 or $156.98, but there appears to be a more substantial death and permanent disablement benefits in the sum of $19,404, although the plaintiff, or her estate, would only have access to those in adverse circumstances. Her wage and her disability pension are small. Her husband receives a disability pension and is the beneficiary of a moderate trust of $45,000, excluding the trust they receive in total of approximately $3,100 per month. As a result they live a very frugal lifestyle.

1. The plaintiff did not contribute to the estate.

Discussion

1. It is necessary to see how the plaintiff says she has been left without adequate and proper provision for her maintenance, education and advancement in life. This has to be seen in the light of the present situation of the plaintiff. As I mentioned, she is working in Parramatta and needs to catch a train to work so rail transport is important at the moment, although it may not be in the future. It is only three years before she can stop that work and, presumably, not have other employment. She lives in Seven Hills in her husband's Housing Commission Flat. It is a small flat for two people; it is only a one-bedroom flat.

1. Another important factor is they are on a tight budget. Another factor to take into account is the defendant has suggested that the provision might only be used to supply rental accommodation. That is, of course, a matter which is within the discretion of the present trustee of the estate and the exercise of such a discretion would clearly be within the terms of that clause.

1. There are a number of things to note about the will, and I think these are important in considering this question. Firstly, it is a discretionary provision that gives no certainty to the plaintiff. She does not have any control over the place where she will live and will have no control over whether it will be provided by way of purchase or rent. Secondly, she does not have the benefit of any income from funds in the estate. There is a possibility she may be entitled to one-fifth of the intermediate income but that would only be a very small amount.

1. Clause 4 of the will, which I have reproduced above, does not apply as she is an infant and the statutory power of advancement would not apply in this case. That means that there will not be an ability to provide for other matters which she might need in the future, particularly as she ages and ceases her work.

1. What she wants is a twofold provision. She wants $50,000 effectively as a legacy and wishes to purchase housing or some other accommodation which she may need. In my view she may need either hostel type accommodation or other accommodation as she ages. She concedes that all these funds and housing should be held in trust for her.

1. In my view, particularly having regard to the fact that there are no other competing claims, the plaintiff has been left without adequate and proper provision for her maintenance, education and advancement in life.

1. The evidence addresses the cost of houses in the Blacktown area which may be suitable and meet the requirements for a ground floor unit with a lift etc, and a range from $270,000 to $300,000 for units. If they were just rented rather than occupied, a rent of some $330 to $350 per week can be achieved. For villas and houses one has to go further out to get one in a similar price range.

1. In this connection I note in three years there may not be a need for a train line, but access to shops would have to be convenient because plainly the plaintiff cannot walk a great distance.

1. So far as the claim for $50,000 for other expenditure she is concerned, I think that some of this will be needed for the Housing Trust. I would not have thought that $1,500 for a cruise ticket would be excessive given that the plaintiff and her husband have had no holidays since 2002 and have not had a honeymoon. In my view I think $10,000 is an appropriate figure for this item. So far as the trustees are concerned, it is unfortunate that at the moment there is a falling out between the plaintiff and her sister, Jeanette.

1. The other trustee who has been suggested is Mr Frayer, who is the brother-in-law of the plaintiff. He is a person of good repute and obviously has the skills to manage the finances of the plaintiff. He already does that for the plaintiff's husband.

1. I think it is important that there be two trustees. There are not a lot of decisions to be made and I think it is important that both sides in what is now a large family should be represented. In my view it is appropriate that both the defendant and Mr Fayer be appointed to the trust which I propose. Both of them said they will consent to work together and, accordingly, I will appoint them both.

1. The orders I make are: I make orders in the form of the short minutes which I will sign and date and place with the papers. Liberty to restore the matter to the list for further consideration in the event that there is any difficulty in the implementation of any of those orders.

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Decision last updated: 02 September 2011