Pavey v Statham

[2001] NSWSC 365

CITATION:	Pavey v Statham and anor [2001] NSWSC 365
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 2170/2000
HEARING DATE(S):	30/04/01, 01/05/01, 02/05/01
JUDGMENT DATE:	2 May 2001
PARTIES :	ROBERT EDWARD PAVEY v VALDA JEAN STATHAM AND ANOR - ESTATE OF EDWARD ALFRED PAVEY
JUDGMENT OF:	Master Macready at 1

COUNSEL :	R.H. Taperell for plaintiff M.K. Meek for defendants
SOLICITORS:	Baker Love for plaintiff Cantle Carmichael Lawyers for defendants
CATCHWORDS:	Family Provision. Application for adult son suffering from schizophrenia. Conflicts with testator when plaintiff's illness not diagnosed. Small estate. - Order for legacy.
CASES CITED:	Singer v Berghouse (1994) 181 CLR 201 Kleinig v Neal (1981) 2 NSWLR 532 AT 540 said: Court of Appeal Goloski v Goloski (unreported 5 October 1993)
DECISION:	Paragraph 39

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Edward Alfred Pavey who died on 20 December 1998 aged 69 years. The deceased was survived by his son and 3 daughters and the first defendant with whom he was living in a de facto relationship at the time of his death. His son is the plaintiff.

2   His will of 9 February 1998 appointed the first defendant and his daughter, Cheryle Annette Pavey as executrix. After a bequest of furniture, the precise destination of which is not clear, the main provisions of the will were as follows:

"I give devise and bequeath my real estate known as 2A President Wilson Walk, in the said State unto my trustees to be held upon the following trusts:
(a) To permit my companion, Valda Jean Statham to reside in my said real estate known as 2A President Wilson Walk in the said State until her death or until she expresses the wish in writing to my trustees that she no longer wishes to reside therein and during her occupancy of the said real estate my said companion is to pay all rates and insurances and other outgoings including repairs and other maintenance costs in relation to my said real estate.
(b) After the death of my said companion, Valda Jean Statham, I direct that my said real estate known as 2A President Wilson Walk, Tanilba Bay be sold and converted into money at such time and in such manner as my trustees in their absolute discretion shall think fit regardless of the nature of such estate without being responsible for any loss and to hold the proceeds of such sale upon trust to my three daughters, Suzanne Louise Reid, Cheryle Annette Pavey and Michelle Gaye Painter.
(c) If my companion, Valda Jean Statham, expresses the wish in writing that she no longer wishes to reside therein I direct that my said real estate known as 2A President Wilson Walk, Tanilba Bay be sold and converted into money at such time and in such manner as my trustees think fit with power nevertheless to postpone such sale and conversion for such period as my trustees in their absolute discretion shall think fit regardless of the nature of such estate without being responsible for any loss and to hold the proceeds of sale upon trust as follows:
(i) One half share of the proceeds of sale to Valda Jean Statham.
(ii) The remaining one half share of the proceeds of sale to be divided equally between my daughters Suzanne Louise Reid, Cheryle Annette Pavey and Michelle Gaye Painter as tenants in common."

3   As is apparent, the plaintiff has been left out of the will.

4   The estate has a value of $312,035.85, which comprises the deceased's home at 2A President Wilson Walk, Tanilba Bay valued at $280,000. There are cash assets of $32,035.85. The costs incurred to date are the plaintiff's costs $32,056.03; first defendant, $38,207.62; estate costs, $33,085.90, a total of $103,350.55.

5   It is abundantly plain that the house in which the first defendant is still living will have to be sold. After allowing expenses of sale there will be left about $200,000 in the estate, assuming that the plaintiff is successful in his application. Even if he is not, the house will still have to be sold to meet the defendants' costs.

6   In these circumstances, it is necessary to have a view as to the entitlement to the estate of the first defendant and the 3 daughters. Fortunately that has been made clear as the first defendant has given written notice she no longer wishes to reside in the matrimonial home. Thus after payment of the costs, the first defendant as the will presently stands will receive over $100,000, and the 3 daughters, will share the remaining $100,000.

7   I will deal with first some matters of general chronology. The deceased was born on 6 February 1929 and the first defendant was born on 14 September 1931. She is now thus 69 years of age. Suzanne Reid, one of the daughters was born on 21 December 1950; Cheryle Annette Pavey, another daughter on 25 September 1952; the plaintiff was born on 7 October 1954 and the third daughter, Michelle Gaye Painter was born on 16 January 1965.

8   In 1980 there was an early will of the deceased in which the deceased left his assets to his wife with provision for a small amount to be provided for the plaintiff. The deceased's wife died on 19 May 1983. The first defendant and the deceased had known each other before the death of his wife but did not have any relationship until about 1987. Their relationship was such that they would spend time at each others homes but ultimately in 1991 the first defendant moved into the property at Tanilba Bay and commenced living with the deceased. That purchase had been made in 1989.

9   Ultimately the deceased's will was made, as I have said, in February 1998 and he died on 20 December 1998. Probate was granted in due course and the application made within time.

10   It is also useful to recount a little of the history of the plaintiff himself in order to get a feeling for his life and what has happened to him. He obtained the Higher School Certificate in 1972 and then started working as a spare part foreman for BHP. He came back to schooling after that to try and improve his results. He did not complete the year.

11   In 1975 he worked as a storeman for Great Northern Motors for 10 months. By 1976 he was playing music and working in music shops. Music interests him and is a major part of his life. In 1979 he worked as a fettler with the Department of Railways and in 1981 transferred to Parkes with that department. He moved to Fingal Head in 1981 and married. He worked in a resort doing cooking and gardening and worked at the Tarong power station. He and his wife bought some land at Glenn Innes and he worked in real estate for a short period before moving back to Newcastle where he worked as a builder's labourer.

12   His son, Michael Pavey, was born. He and his wife separated in 1983 and he continued with his employment as a builder's labourer and musician. He at one stage in 1986, after returning to Newcastle, formed a band which played for some 18 months. In 1987 he moved to Adelaide and worked as a car salesman and musician.

13   He married again in 1990 but unfortunately his wife in 1991 attempted suicide as a result of which she had irreversible brain damage. It was apparent that she needed substantial care and ultimately the plaintiff and his wife separated.

14   This had an adverse effect on the plaintiff and ultimately in 1993 he moved to Melbourne to be with his sister, Michelle. He was unemployed and ultimately fell out with his sister. He then moved to Byron Bay and worked on a nut farm for some 6 months.

15   In 1994 he went to Western Australia and worked as a driver and cook on various tours. In 1994 he came back to Newcastle for a short period and then back to Byron Bay and then ultimately Melbourne. By 1994 he was back in Newcastle and by 1997 he was diagnosed as suffering paranoid schizophrenia, something which became evident in a marked way at that stage when some friends suggested he obtain proper help. The type of matters that he talks about that started to affect him in his early teens would seem to indicate that schizophrenia had probably existed for most of his life. Certainly it would explain the relationship that existed between him and the deceased and also explain the difficulties that occurred with his father.

16 In applications under the Family Provision Act the High Court has recently in Singer v Berghouse (1994) 181 CLR 201 set out the two stage approach that a court must take. At page 209 it said the following:

“The first question is, what 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."

17   The plaintiff's situation is fairly simple. He is 46 years of age, single and no dependents. He has no assets apart from some minor second hand furniture. He has a disability pension of $496 per fortnight, he rents premises and uses his income come for his support. I have already referred to the fact that he has been diagnosed with schizophrenia.

18   It is apparent from the evidence of Dr Lambert that he is not likely to be able to hold regular employment in the future. The doctor says that his schizophrenia is not due to the abuse of substances but that may have exacerbated it during the period of his 20s. The relationship that the plaintiff had with his father was difficult for both of them. Given the lack of diagnosis of his condition before his father's death, it is not surprising that there should be some breakdown. I will come back to this a bit later. The defendants do not suggest that the conduct was disentitling conduct. There have been no contributions building up the estate by the plaintiff.

19   It is also necessary to consider the situation of other people who have a claim on the bounty of the deceased. Primarily the most important of these is the first defendant. She was the de facto wife of the deceased is aged 69 years of age and has no dependents. She lives presently in the former matrimonial home. She owns a property, 16 Kahiba Avenue, Kahiba valued at $370,000. She has a car worth $5,000 and contents worth about $2,500. Her savings amount to $1,380. She has a liability to David Jones of $200 and another liability of $2,000. Her income at present consists of rent which she receives from the property at Kahibah of $230 and a pension of $163 per week. Her total income is thus $393 per week. She has sworn to her expenses being in the order of $561 per week.

20   It is perfectly apparent that for many years the first defendant has been living off capital. She had a property settlement in 1990 in which she received the property she now owns, a block of land and $180,000 after costs. The land was sold in 1993 for $35,000 and over the period since then the funds have all disappeared. There have been 2 trips overseas but obviously a substantial part of them have been used to maintain her lifestyle, purchasing second hand cars from time to time and similar matters. Some of the money she would have spent on the estate. There is evidence in fact she spent $6,678 in improvements to the deceased's property. This is a factor that has to be taken into account. She has also since the date of death spent $4,991 meeting outgoings on the property.

21   The first defendant met the deceased and started to go out with him in 1987. They started living together in 1991 at the deceased's home. The deceased himself was not a well man and it is apparent from the first defendant's evidence that she had to attend to looking after him. About 12 weeks after his wife died, the deceased himself had a bad heart attack. Both his daughter and the first defendant looked after him when this occurred.

22   In 1984 the deceased had a serious road accident. He had a number of difficulties as a result of that and then not long after became subject to diabetes. He then had a prostate operation and a number of infections as a result of his excursions to hospital. In 1994 he had further problems with blood clots and generally during the course of the last 2 years of his life he was quite unwell. He did not want to go into a nursing home and, accordingly, it was the first defendant who cared for him over that period.

23   The situation of the first defendant is that she will have to move out of the home in which she presently resides and move into the house which she owns. She will lose the rent from that but I have no doubt her pension will also increase. By how much is not clear on the evidence. That house needs some repairs to preserve it and these have been spoken of by the first defendant in evidence. There is however no quantification of the estimates. She also points to the need for a new car. It is, of course, not up to her to justify her bequest. Her situation as a whole is taken into account in considering claims on the deceased's bounty. Suzanne Reid is married, she has 2 children aged 19 and 15. She and her husband both work. They have a joint income of $49,244 with the provision of a company car and superannuation for her husband who is an accountant for a construction company. They manage on their income but it is apparent this is with some difficulty. They have a home worth $250,000, a car worth $3,000 and furniture. They have a home loan of $71,000 and other loans of $21,125. There is nothing in the evidence which would suggest that the relationship between the deceased and his daughter was otherwise than satisfactory for both of them.

24   Suzanne, like the other daughters, has not contributed towards the assets in the estate. Suzanne has a stomach ulcer and high blood pressure. She herself has substantial expenses which will increase. She has teenage children and these, of course, create expenses. Her home needs painting.

25   Cheryle Pavey is single, aged 48 years. She supports her daughter who is not living with her by paying $25 per week towards her expenses. She works as a nurse and has an income of $490 per week which covers her expenses with a small margin left over. She and her former partner are tenants in common in a property at Wangi Wangi. Her half she values at $170,000 although obviously this has increased in value. Precisely what amount is not clear. She has a car worth $7,000, cash and the contents of her home. Her half share of the mortgage is $57,000 and she owes Bankcard $2,263. Although her home is probably worth more - it is in a prime location - she has no intention of selling it and it should be borne in mind she only occupies half of her home, it being divided so she and her former de facto can lead their separate lives. She has had some back problems as a nurse, a not uncommon matter, but they have been resolved satisfactorily.

26   Michelle Painter is divorced, she is 26 years of age and does not have children. She is currently earning $700 per week as a stylist in a boutique in Melbourne and she has jewellery of some $1,500 and personal effects of $2,000. She has no other large assets. Her former matrimonial home was sold at a loss. She now owes, as a result of both the sale of that home and as a result of a failed business she and her husband had, $14,500 to her husband's parents. She also has other debts of $5,500 and a car on hire purchase which has monthly payments of $424.62. Michelle has little assets and she might be described as highly geared, given her obligations and lack of assets. Her health is satisfactory. She says she has suffered from depression but that she says no longer troubles her.

27   It is important to look at how the plaintiff is being left without adequate and proper provision for his maintenance, education and advancement in life. The matters which are advanced on his behalf appear in his affidavit and also, of course, in submissions.

28   In paragraph 35 of his principal affidavit, he refers to the fact that he has arrears due for child care payments of $4,000 with penalty amounts of $3,000. The exact amount is in the order of $7,800. Apparently he may be able to have some of the penalty amount waived if he pays the arrears in a lump sum. In these circumstances he certainly has a liability. He wishes to continue to support his son and return to making payments of $20 per week pursuant to his court order. He is anxious to try and establish a relationship with his son and clearly this is something which he should be allowed to do and encouraged in that respect.

29   In paragraph 37 he says that he has only very old clothes and has not the funds to buy reasonable clothes. If he were to return to being a musician he would wish to have some better clothes although the cost of these are not quantified.

30   In paragraph 38 he speaks of his chances of trying to return to being a musician. That will cost some $10,000 for the equipment and he would like to have a car which would enable him to take the equipment around. The cost of such a car has not been quantified in the evidence.

31   Similarly he also refers to the fact that he needs a car because of the lack of public transport in Newcastle. He also needs some furniture as he has very little in his unfurnished flat. So far as his income is concerned, it is clear that he manages on his pension because he has not been building up any debts and obviously goes without.

32   In the event that there is propounded some claim that he ought to have and income supplement, the problem about it is that the evidence does not address in any great detail what it might be said would be his proper outgoing and what is his present income. In Singer v Berghouse CCA 23 July 1992, Sheller JA said:

"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."

33   In the present case there does not seem to be any evidence which would enable me to determine some lump some amount which could to be used to supplement his income. As far as the relationship with the deceased is concerned, the plaintiff spoke about their relationship. He described it as difficult and described his father as making it abundantly clear that he, the son, had failed to meet his father's expectations. He spoke of his father hanging up on him when he rang him and ignoring him. It may be that his father did not understand what were his son’s problems. That is the most likely explanation.

34   Holland J in Kleinig v Neal (1981) 2 NSWLR 532 AT 540 said:

"If it is a case of parent and child, another circumstance is that the parent was responsible for bringing the child into the world and assumed a duty to be concerned with the child's welfare. A wise parent will recognise that perfect harmony between parent and child is in the nature of things not to be looked for and that, coming to adulthood, a child will want to make his own life just as the parent had done before him. Difference of outlook between different generations is not exceptional, it is the general rule, so some friction between parent and child or disappointment in a parent's hopes and expectations concerning his child will be accepted by the wise parent as almost inevitable. If it occurs, the parent who is just as well as wise will not allow such disharmony or disappointment to blind him to the needs of his child for maintenance, education or advancement in life. The duty of a parent towards his child to provide for those needs on his death, if he can, continues in spite of such disharmony or disappointment and the statute obliges the court to consider whether it has been performed. The court must take in the whole scene and make the judgment that it considers that wise and just parent would have made in the circumstances. Of course, as the statute provides, if the court considers that the character or conduct of the child has been such as to disentitle the child to any or any further benefit from the parent, it may refuse the child's claim."

35   In this case, one is not concerned with a difference in outlook. I am concerned with disputes between a father and son which most likely resulted from the illness then undiagnosed and it is apparent the son should have some provision from the estate.

36   It is important to also in the context of the plaintiff’s claim to look at the first defendant's position. She is effectively the deceased's widow. Widow's claims are frequently the subject of applications in this court. The Court of Appeal in Goloski v Goloski (unreported 5 October 1993) has referred to formulations of this standard to be expected in respect of a widow in terms which refer to the decision of Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65 and Elliott v Elliott, which was approved by the Court of Appeal on 24 April 1986. There his Honour said:

"Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up and maintain his estate, the duty which a deceased owes to his widow can be no less than to the extent to which his assets permit him to achieve that result; first to insure that his widow be secure in her home for the rest of her life and that if either the need arises or the whim strikes her she have the capacity to change her home; secondly that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry'; and, third, that she have available to her a fund to which she might have resort in order to provide herself with such modest luxuries as she might choose and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring."

37   So far as the first defendant is concerned, it is important to note this was a relationship of some 8 years standing. She made some contributions to the estate and I have no doubt their relationship was happy and a satisfactory one for both of them. She cared for the deceased particularly over his last 2 years. She herself has not put in a claim for a greater share of the assets and she is fortunate that she has assets of her own.

38   The main problem is that the estate is now so small. There is only $200,000 to be divided between 4 people. The sisters to various degrees have secure circumstances. There are problems with quantification of the plaintiff's need but it seems appropriate to me he should have a legacy which should be available before any deduction pursuant to clause 4(c) of the will.

39   In the circumstances I make the following orders.

(1) order that plaintiff receive a legacy of $45,000,
(2) burden of the legacy to fall on the proceed of sale of 2A President Wilson Walk, Tanilba, pursuant to clause 4(c) of the will,
(3) I order that the plaintiff’s costs on a party party basis and the defendants’ on a indemnity basis paid out of the estate.
(4) Exhibits may be returned.

40   I have heard further submissions in respect of costs and it is suggested that I should make an order for costs for yesterday on an indemnity basis. This is on the basis that if it had not been in the delay of cross-examination of the first defendant the case would have concluded on Monday and yesterday's costs would not have been incurred.

41   The reason why that occurred was simply actually due to 2 matters. One was the fact that the defendant had not given some particulars of a purchase in her affidavit but also the cross-examination raised a serious question as to whether or not the first defendant had funds which had not been disclosed. That required the matter to go over.

42   The other circumstance which is important is that there had been an attempt to reduce costs on the defendants' part by having one counsel. The first defendant had previously been represented by separate counsel and both defendants were separately represented by solicitors. There was a conflict between the defendants and this caused difficulty for counsel who was then representing all defendants. This resulted from the attempt to save costs.

43   In the circumstances I do not think it is appropriate that I should make an order for indemnity costs for yesterday and I decline to do so.

Last Modified: 05/16/2001