Netter v Watts
[2008] NSWSC 1102
•24 October 2008
CITATION: Netter v Watts [2008] NSWSC 1102 HEARING DATE(S): 20/10/07
JUDGMENT DATE :
24 October 2008JURISDICTION: Equity Division JUDGMENT OF: Macready AsJ at 1 DECISION: Paragraph 33 CATCHWORDS: Family Provision. Application by the two children of the deceased. No provision made for one child. Small estate. Order for provision. No matter of principle. PARTIES: 001724/07 GERHARD NETTER v FIONA WATTS
001972/07 SABINA NETTER v FIONA WATTS001724/07 GERHARD NETTER v FIONA WATTS
001972/07 SABINA NETTER v FIONA WATTS001724/07 GERHARD NETTER v FIONA WATTS
001972/07 SABINA NETTER v FIONA WATTS
GERHARD NETTER v FIONA WATTS
SABINA NETTER v FIONA WATTSFILE NUMBER(S): SC 1724/07; 1972/07 COUNSEL: Mr R Tregenza for Gerhard Netter
Mr A McSpedden for defendantSOLICITORS: Michael Parasyn for Gerhard Netter
Watson Stafford for defendant
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
ASSOCIATE JUSTICE MACREADY
Friday 24 October 2008
001724/07 GERHARD NETTER v FIONA WATTS
001972/07 SABINA NETTER v FIONA WATTS
1 HIS HONOUR: This is the hearing of two applications under the Family Provision Act 1982 in respect of the estate of the late Gertrude Kate Else Netter who died on 14 August 2006. The deceased’s husband had predeceased her and she is survived by the two plaintiffs in these proceedings the deceased’s son, Gerhard Netter and her daughter, Sabina Netter. I have ordered that the two proceedings be heard together with the evidence in one matter evidence in the other.
The last will of the deceased
2 The deceased made her last will on 22 June 2006 under which she appointed her granddaughter, Fiona Sands, (the defendant) as executor and trustee. She gave her property at Dublin Street, Smithfield to her trustee to permit her daughter, Sabina Netter, one of the plaintiffs in the proceedings to reside therein during her lifetime. On Sabina Netter’s death the property was to pass to the defendant. The deceased gave the residue of her estate to her daughter, Sabina Netter, but there was no residue. She made no provision for her son, Gerhard Netter.
3 The deceased made a statement dated 22 June 2006 in which she made the following comments:
“I am of the opinion that my son is a drug addict and criminal.
For five months I supported my son and kept him in food and clothing without any means of support from him.
He stole monies from me.”
The estate of the deceased
4 The only substantial asset in the estate is the property at Dublin Street, Smithfield which on the evidence before me is valued at $260,000. There was money in the bank of $49.18 and there were liabilities including funeral expenses of $2,078.06.
5 Costs have been incurred in these proceedings. The plaintiff, Gerhard Netter’s costs are $58,000 and the defendant’s costs are $48,600 a total of $106,600. Plainly the only property which is the house at Dublin Street will have to be sold in order to meet the defendant’s costs. After selling expenses of $7,000 and if the Court makes an award in favour of Gerhard Netter the distributable estate will be $146,400.
Family history
6 The deceased’s husband died on 20 June 1976. The deceased and her husband had two children, her daughter, Sabina Netter, born in July 1949 and her son, Gerhard Netter, born in May 1957.
7 In 1965 Sabina Netter left high school aged 16 years and she first worked at the Commonwealth Bank. She married in 1971 and had two children. She later divorced her husband. One of her children, Fiona Watts, is the defendant in the proceedings.
8 After the breakdown of Sabina Netter’s marriage 1994 or 1995 she lived with her mother until the time of her death. When she moved in to Dublin Street her two children moved in with her although soon after left to make their own way in life.
9 Gerhard Netter left school aged 16 and he eventually joined the army some five years later where he stayed until 1983. In 1982 he had a son but the relationship with his son’s mother ended in 2000. In 2001 Gerhard Netter was convicted of possessing marijuana on three separate occasions.
10 In February 2006 the deceased asked Gerhard Netter to come to Sydney to look after her as her daughter, Sabina Netter, was not coping. At that stage Gerhard Netter was living in Townsville and he took leave from his employment and went to Sydney to be with his mother. He stayed there for some months before returning to Townsville.
11 For four years before her death the deceased suffered from pancreatic cancer and she died on 14 August 2006. She had earlier made her will on 22 June that year. Apart from the help given by Gerhard Netter to his mother the deceased was looked after by Sabina Netter.
Eligibility
12 The plaintiffs are both eligible parties. 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 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."
13 I now consider the situation of the two plaintiffs.
Situation of Sabina Netter
14 Sabina Netter is 59 years of age and she is divorced from her husband. She has two children who are not dependent upon her. She is living in the estate property and her former husband is also living in the property although it is clear they have not resumed their relationship. He contributes to expenses.
15 Sabina Netter’s assets consist of jewellery, clothing and personal effects which are of little value. Her income is a disability pension of $265.45 a week which is consumed by her expenses.
16 Since 1980 Sabina Netter has suffered from a bipolar disorder. She suffered depression after the birth of her daughter. She tendered a medical report from Dr Stephen Allnutt, psychiatrist, who detailed her history. Dr Allnutt discussed whether she was suffering from a mental illness in these terms:
- “In my opinion, your client does not currently manifest significant symptoms of a major mental illness although she does manifest a degree of flight of ideas likely secondary to an underlying bipolar affective disorder. Notwithstanding this, the flight of ideas does not cause a significant functional impairment at this stage as she is easily re-directable and brought back to the topic without any loss of quality in her communication.
- She provides a history of multiple episodes of depression and mania dating back to the 1970s with frequent admissions to psychiatric hospitals and ongoing psychiatric follow up. Her presentation and the history she provided is consistent with a diagnosis of bipolar affective disorder with her last depressive episode occurring in about 2005. She has since then remained relatively stable.”
17 Sabina Netter is currently receiving treatment and medication in order to control her disorder. So far as on going treatment was concerned Dr Allnutt said the following:
- “She would require ongoing psychiatric follow up. The cost of medication would be in the region of approximately $100 to $200 a month. Should she see a private psychiatrist those costs would be in the region of approximately $250 an hour at a frequency and for a duration to be negotiated with her psychiatrist based on her clinical need. She would also, in my view, benefit from some psychological counselling and support which she could obtain from a psychiatrist or from a psychologist at a cost of about $150 to $200 an hour at a frequency and duration to be negotiated with her psychologist depending on her need.
- Bipolar affective disorder is by nature a recurrent condition and given her history she continues to manifest a significant risk of recurrence of either a depressed or manic mental state. Bipolar disorder also tends to increase in the frequency of recurrence as a person ages. Thus she would require lifelong psychiatric follow up and probable further admissions to psychiatric hospitals.”
18 Sabina Netter has not worked for many years and given the history of her disorder this is not surprising. She cared for her mother during the last 10 or 11 years of her mother’s life. Her mother was in her eighties when she died. In these circumstances there is little prospect that Sabina Netter will be able to enter the work force.
19 So far as the relationship with her mother is concerned it is apparent that Sabina Netter had a good relationship and devoted her efforts to look after her mother particularly during the last four years of her life when she had pancreatic cancer and a broken femur.
Situation of Gerhard Netter
20 Gerhard Netter is 51 years of age, single with no dependent children. Gerhard Netter is currently employed as a formworker in Townsville, Queensland. His income can vary but is about $1000 net per week and his expenses are about $600 per week. He lives in a hotel in Townsville. His main asset is a 2003 Harley Davidson motorcycle which he purchased for $30,000. He owes about $14,000 under the hire purchase agreement. He has about $50,000 in superannuation entitlements with the Building Union Superannuation Fund. He says he is in good health but says that his main recreation is drinking every night with his friends in the hotel. In the evenings he would drink five to ten drinks most days of the week.
21 Gerhard Netter says he had a reasonable relationship with his mother notwithstanding the distance between them. Prior to February 2006 he would telephone her once a week and he would send her birthday and mother’s day cards. He would spend a week or two with her at Christmas. As I have mentioned, in February 2006 the deceased asked Gerhard Netter to come and look after her which he did. He returned to Townsville when his mother was feeling better in response to the medication she was taking.
22 It will be recalled from the statement made by the deceased that she mentioned that her son had stolen money from her. This was an allegation made by Sabina Netter who claimed that she saw Gerhard Netter taking money from the deceased’s wallet when she was not present. According to Sabina Netter the money was taken to enable Gerhard Netter to pay the registration fee for his motorcycle. Gerhard Netter vehemently denied the allegation. In cross-examination of Sabina Netter it was apparent that she told her mother about the incident and this no doubt prompted the deceased’s note which was made at the same time of the will. Sabina Netter arranged for the will to be made and she took her mother to make her will.
23 This is an appropriate case for the application of the principles stated in Briginshaw v Briginshaw (1938) 60 CLR 336. These principles are explained in the observations of their Honours Deane, Dawson and Gaudron JJ in G v H (1994) 181 CLR 387 at 399; 124 ALR 353 at 362:
Not every case involves issues of importance and gravity in the Briginshaw v Briginshaw sense. The need to proceed with caution is clear if, for example, there is an allegation of fraud or an allegation of criminal or moral wrongdoing, as in Briginshaw v Briginshaw where the allegation was adultery by a married woman, an allegation involving serious legal consequences when that case was decided.”“It has been clear since the decision in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 that in civil cases the standard of proof is on the balance of probabilities, with due regard being had to the nature of the issue involved so that “[t]he seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal”...
24 The evidence given by Sabina Netter was simply that she saw her brother steal $300 from her mother’s wallet. She gave no evidence of the circumstances during which the incident occurred nor the setting or any discussion at that time. Gerhard Netter gave his evidence in a straightforward way before me and he made appropriate admissions against his own interests. In contrast Sabina Netter was argumentative when giving her evidence and despite numerous directions from me to do so she would not confine her answers to a true answer to the question. When in the witness box she took the opportunity to make allegations against her brother and her daughter.
25 Having regard to the seriousness of the allegation of theft and the lack of any explanation as to the circumstances in which it occurred together with the way the witnesses gave evidence before me, I am not satisfied that Gerhard Netter stole $300 from his mother’s wallet.
26 It is necessary to have regard to the situation in life of others having a claim on the bounty of the deceased. In this case the only person is the defendant, Fiona Watts. She is in a de facto relationship and she and her partner have two daughters. They are constructing a house on a block of land at Narellan Vale and when completed they will owe about $285,000 on the mortgage. They both own a car which are subject to loans. Other than these loans they do not have any significant debts. The defendant is a part-time teacher at a high school and she earned a taxable income of $55,000 in the 2007 financial years. Her partner’s income is similar. She gave details of her relationship with the deceased which included contacting the deceased several times a month.
Discussion
27 It is necessary to see how Gerhard Netter says he was left without adequate and proper provision for his maintenance, education and advancement in life. His claim is that no provision was made for him in the will. He has been working as a formworker for some years and has now reached a time in his life when he finds it difficult to undertake difficult physical work. What he proposes, if he could obtain the necessary funds, would be to buy a truck which he would operate as an independent contractor in the building trade. He has in mind the type of truck which has its own crane attached to lift materials in and out of the truck. He gave evidence of two trucks available one worth $110,000 and the other worth $84,000.
28 Having regard to the size of the estate he does not ask for the full amount to make such a purchase but asks the Court to give him a legacy of $50,000 and he would make up the balance by selling his motorcycle or borrowing funds from the bank. He has not checked to see whether he could borrow the funds but having regard to the fact that he is in long-term employment he would probably be able to borrow some funds. He has had no experience of running a business but he appears to be aware of the fact that he would need some help from others and accounting assistance if he starts on such a venture. In my view it is a venture that would probably suit him if the funds were made available.
29 Sabina Netter did not articulate her claim in her Family Provision Act claim. It will be recalled that she was given a life tenancy and it is plain when considering the costs incurred that the house will have to be sold and she and her husband from whom she is separated will have to move from the house. She has a serious medical problem which will require treatment from time to time. Her only income is that of the disability pension and plainly she will need support in rented accommodation if she cannot obtain public housing.
30 Under the present terms of the will the defendant takes an interest in remainder. Accepting the fact that there will be a rearrangement following the sale of the house the defendant suggests that she should receive a small legacy. If granted a legacy she has indicated that she would spend $3,000 from the legacy to provide a headstone plate for her grandmother’s grave. Apparently the deceased’s grave is beside her grandfather’s grave. Although her mother was contacted by the cemetery administration to attend to the matter she has not responded to the approaches.
31 In my view Gerhard Netter’s claim is genuine and he should receive a legacy of $50,000.
32 The other claim on the estate is that of Sabina Netter which due to illness and lack of in0come means that she should obtain the balance of the estate. Her claim must therefore take priority over that of the defendant. However, having regard to the defendant’s circumstances it would be appropriate to provide her with a legacy of $3,000 to provide a headstone plate for the deceased’s grave.
33 The orders I make are as follows:
1. The plaintiff, Gerhard Netter receive a legacy out of the estate of the deceased in the sum of $50,000.
2. Gerhard Netter’s costs to be paid out of the estate of the deceased on the ordinary basis.
3. That in lieu of the provisions for the defendant in the will of the deceased that she receive a legacy of $3,000 to provide a headstone plate for the grave of the deceased.
4. That in lieu of the provisions in favour of Sabina Netter in the will of the deceased that she receive absolutely the residue of the estate.
5. Order that the defendant’s costs be paid or retained out of the estate of the deceased on an indemnity basis.
6. I reserve liberty to apply for orders to enable the sale of the estate property.
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