Penn v Richards

[2002] VSC 378

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL & EQUITY DIVISION

No. 5238 of 2001

IN THE MATTER of Part IV of the Administration and Probate Act  1958
- and –

IN THE MATTER of the Estate of PHYLLIS MAUD PENN late of 4 Penn Street, North Balwyn, deceased

RAELENE PATRICIA PENN	Plaintiff
v
PATRICIA JUNE RICHARDS (who is sued as Executrix of the Will and Codicil of the abovenamed deceased)	Defendant

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JUDGE:	Ashley
WHERE HELD:	Melbourne
DATE OF HEARING:	3 September 2002
DATE OF JUDGMENT:	6 September 2002
CASE MAY BE CITED AS:	Penn v Richards
MEDIUM NEUTRAL CITATION:	[2002] VSC 378

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Administration and probate – family provision – whether testatrix failed to make adequate provision for the proper maintenance and support of an estranged adult daughter suffering ill-health and financial hardship – amount of further provision.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G. Baker	John R. Buman & Co
For the Defendant	Mr R. Boaden	Moores Legal

HIS HONOUR:

1. This is a claim for family provision made under Part IV of the Administration and Probate Act 1958 by the 53 year old adopted daughter of the late Phyllis Maud Penn and the late Ernest Penn. Provision is sought out of the estate of the late Mrs Penn, who died on 21 December 2000 aged 84, leaving a will dated 25 November 1986 and a codicil dated 9 August 1990.

1. The defendant executrix is the sister of the deceased.

1. The will and codicil, considered together,

§  give a pecuniary legacy of $20,000.00 to the plaintiff; 

§  give a property situate at 4 Penn St, North Balwyn to the defendant and her husband; 

§  leave the deceased's residuary estate to the defendant's three children in equal shares.

1. At the time of Mrs Penn's death the assets of the estate consisted of: 

§  the property at 4 Penn St, North Balwyn; 

§  debentures and bonds;

§  money at bank; 

§  debts owed; 

§  a life insurance policy;  and

§  furniture and household effects.

1. According to the defendant's affidavit sworn 23 August 2002, which was uncontradicted, the present value of the net assets of the estate is $517,282.24.  Of that amount $4,870.00 is a debt owed by the plaintiff to the estate for the purchase of furniture from the Penn St property, which was sold in January 2002;  and $2,700.00 is a debt owed by a Bill Tutton to the estate.  The latter debt may be thought to be uncertain of recovery.

1. As the matter was argued orally, Mr Boaden of Counsel for the defendant conceded that, although the testatrix might be thought to have "got it right", further provision should be made for the plaintiff by reason of her particular and profound needs.  He submitted that provision should be made of an amount to enable the plaintiff to purchase a home in the Bendigo area[1] and to enable her to meet the debt which she presently has to the estate.  In all, he submitted, the provision should be for an amount of a little less than $172,000.  He noted that the value of the estate net of the estimated legal costs of this proceeding and net of the debts owed by the plaintiff and Mr Tutton was about $450,000.  He noted also that the plaintiff had been paid  the pecuniary legacy of $20,000.00.

   [1]That is, a sum sufficient to meet the purchase price, stamp duty, legal costs and the like.

1. Mr Baker of Counsel, for the plaintiff, argued that greater provision should be made.  He submitted that the appropriate amount would be $350,000.00, being about $200,000.00 to enable the purchase of a house and about $150,000.00 by way of a nest egg.

1. Both counsel agreed that the case raised no point of principle, but rather the application of settled principles.

1. For the plaintiff, evidence was adduced on affidavit from the plaintiff, Dr Peter Tisdall and Mr Steven Alexandridis.  Only the plaintiff was cross-examined.

1. For the defendant, evidence was adduced on affidavit from the defendant, Mrs Maie Brown and Mrs Bessie Carmichael.  None of those deponents was cross-examined;  but objection was rightly taken to the defendant relying upon certain parts of the affidavits which, as I observed in argument, should never have been included.  Mrs Brown and Mrs Carmichael, it is convenient to say, are sisters of the late Mrs Penn’s  deceased husband.

1. The evidence establishes the following:  The plaintiff, having been born on 25 November 1948 and thus now aged 53, was adopted by the deceased and her husband when she was very young.  They were then aged 32 and 43 respectively, and had no natural children.   She was a poor student, and left school at 14.  She undertook and completed a receptionist's course.  She obtained clerical work and continued to live at home.   When she was aged about 19 years, and still single, she became pregnant.  The child was born and straightaway adopted out.  Aged 21 she married and left home.  The marriage lasted seven years.  There was no child of the marriage.  After the marriage ended the plaintiff lived with a girlfriend in premises at Kew.  At that stage she was continuing to see her parents.  Sometime after this she took up with another man.  The relationship continued for an uncertain period.  It was through that man that the plaintiff first learned that her mother wished to have nothing more to do with her.  That was before the will was made.  In 1987 she was diagnosed as suffering from cervical cancer.  She underwent treatment for a 12 month period.  She had no contact with her mother in this period.  She did not learn until New Years Day 1988 that her father had died in August 1986.  In the years between 1988 and 1993, still living in Melbourne, she was afflicted by various kinds of ill health – bilateral carpal syndrome and irritable bowel syndrome.  After 1989 she could not work.  She was at times homeless.  She rang her mother a few times, but they did not meet.  In 1993 she moved to the Shepparton area.  She has lived there since, always in rented accommodation.  She has a disability pension, and has done a little seasonal work.  She has small debts which are nonetheless significant to a pension without means.  Between 1993 and her mother's death they had no face to face contact.  They may have spoken on a few occasions.  Her mother, shortly put, did not want to know her.

1. The plaintiff wishes to move to Bendigo area where, as she believes, she could have access to better specialist medical care.  She wishes to have the security of owning her own home.  She has made enquires of estate agents.  According to the evidence, a number of suitable, not extravagant properties have been quoted generally in the range $160 – 190,000.[2]  Assuming that the prices quoted bear some relationship to what the vendors were willing to take and buyers were willing to pay, I should have thought that the plaintiff could acquire a suitable premises for around $175,000 - $180,000.

   [2]Individual properties were quoted at $160 – 190,000;  $170 – 190,000;  $160 – 170,000;  $220,000 plus;  and $170 – 185,000.  See exhibits RPP1–5 to the plaintiff's affidavit sworn 12 August 2002.

1. I next refer to the evidence of the plaintiff's treating general practitioner, Dr Tisdall.  It shows that the plaintiff has been his patient for about seven years.  She suffers from three main medical conditions:  persistent abdominal pain and faecal incontinence since her treatment for cervical cancer in 1987;  probable bipolar illness, stress, anxiety and depression; and bilateral carpal tunnel syndrome.  Investigations need to be performed, but have not yet been carried out, to elucidate the nature of the plaintiff's abdominal symptoms.  She continues under drug therapy for her major psychiatric problem.  She requires surgery, which should be beneficial, for her carpal tunnel syndrome.

1. I go now to some aspects of the evidence adduced for the defendant.  Mrs Richards' first affidavit, sworn 11 October 2001, provided particulars of the circumstances of she and her husband;  and of the 3 children who are beneficiaries under the will.  The uncontradicted details, which I accept, are as follows:  Mrs Richards is aged 71.  Her husband is aged 75.  They live in their own unencumbered property at Nunawading.  They receive a veteran's pension of about $685 per fortnight together with a disability pension of $70 per fortnight.  They have savings of about $67,000.  They own a 6 year old Magna Sedan.

1. Stephen Richards is aged 43.  He has been twice married and divorced.  Now he is in a de facto relationship.  He has a seven year old child by his second marriage and an 18 months old child from his present relationship.  He and his de facto partner own a home at Eltham in which they have equity of about $90,000.  He owns a motor vehicle valued at about $14,000.  He works as a bank  loans manager and earns about $51,000 per annum gross.

1. Glenn Richards is aged 39 and a carpenter by trade.  He is in employment.  He is married with children aged nine and five.  His wife works part time.  They own their home at North Croydon.  Its value is about $180,000 and their equity in it is of the order of $125,000.  Their joint after tax earnings are about $670 per week.  They own an old motor vehicle valued at less than $5,000.

1. Carolyn Richards is aged 36.  She is a teacher.  She lives in a de facto relationship in the home of her de facto partner.  She earns $52,000 per annum [Query:  gross or nett.]  She owns an old car and has debts which exceed savings by a few thousand dollars. 

1. I next refer to evidence as to the nature of the relationship between the deceased and the defendant and her family.  It shows that: 

§  Mrs Richards, the younger sister of the deceased, suffered bereavement when her first husband died at a young age in 1959.  At that time the late Mrs Penn and her husband were very supportive of Mrs Richards.

§  At least from the late 1970s Mrs Richards and her husband regularly visited the deceased at her North Balwyn and her Rye holiday homes.

§  Mrs Richards’ daughter first, and then she and her husband, assisted Mrs Penn  when her husband died in 1986 – the plaintiff not playing any role at that time.

§  Mrs Richards and her husband kept regular and quite close contact with Mrs Penn after her husband's death;

§  The deceased convalesced at the home of Mrs Richards and her husband after surgery for a prolapse in 1990.

§  The deceased suffered much ill health from about 1990:  glaucoma and cataracts, circulatory problems in her legs which required bypass surgery and led on to a golden staph infection, and loss of taste and appetite.  Mrs Richards took the deceased to many doctors.

§  During the period of the deceased’s failing health Mrs Richards and her husband assisted her in a number of ways – assisting her with shopping, going to her North Balwyn home to attend to her needs, arranging for her to spend time with the mother of the deceased’s husband.

1. The material justifies conclusions that Mrs Richards and her husband had a close relationship with the late Mrs Penn for a long period;  and that they gave her much help in the last decade of her life when she was living alone and in poor health.  There is a dearth of material, however, bearing upon the extent of the relationship between the deceased and Mrs Richards’ three children.  The only reference to the children, so far as I can see, relates to the assistance which Carolyn gave to her aunt at the time of the death of the latter’s husband.

1. I should say more about the evidence pertaining to the plaintiff’s relationship with her late father and mother.  It shows, I consider, the following:

§  The plaintiff’s relationship with her father was warmer than her relationship with her mother, particularly with the passage of years.

§  The plaintiff continued to maintain face to face contact with her parents into the early 1980s – visiting them at North Balwyn and at Rye;  but this contact ended a few years before her father’s death.  Thereafter, for a period, she had some telephone contact with her father.

§  Contact between the plaintiff and her parents ceased altogether some time before her father’s death.  She did not learn of his death until New Year’s Day 1988. 

§  The plaintiff had no face to face contact with her mother at any time after her father’s death and very little telephone contact.

§  For whatever reason, it was her mother who discouraged contact between she and the plaintiff from the early 1980s.  I see no reason to disbelieve the plaintiff’s evidence that she initiated whatever telephone conversations took place between them in the last 12 or more years of her mother’s life, that on occasions she provided a telephone number so that her mother could ring her, but that her mother never did so.

§  The plaintiff knew nothing of the detail of the various health problems experienced by her mother in the last decade or so of her life.

§  The plaintiff’s mother knew of the plaintiff’s cancer at some stage.  The plaintiff asked to be able to move back home to live with her mother.  The latter declined, telling one of her sisters-in-law that she did so because her own health was poor.

1. I should say something next about the support given to the plaintiff by her parents.  The evidence shows that:

§  Her parents supported her during her childhood and adolescence. 

§  The plaintiff left home when she married and never again lived with her parents.

§  At the outset of their marriage the plaintiff and her husband lived in part of a premises owned by the plaintiff’s father.

§  The plaintiff and her husband borrowed a small amount from her parents when they bought a home at Bayswater not long after they married.  The loan was repaid. 

§  The plaintiff’s father loaned or gave money to the plaintiff and her husband to enable them to purchase a new motor vehicle. [3]

§  In the early 1980s the plaintiff and her then boyfriend would at times sleep over at the home of the plaintiff’s parents; and at times stayed at the Rye holiday house, which had apparently been built in 1978.  That apart, the plaintiff’s parents gave her no financial assistance or money’s worth from the time when her father purchased the new motor vehicle for she and her then husband. 

[3]That must have been more than 25 years ago.

1. Under s. 91 of the Administration and Probate Act 1958 (“the Act”), the Court is empowered to order that financial provision be made out of the estate of a deceased person for the proper maintenance and support of a person for whom the deceased had responsibility to make provision.

1. The first question to be decided is whether the late Mrs Penn had any such responsibility to the plaintiff; and, if she did, whether she failed to make adequate provision for the proper maintenance and support of the plaintiff. Section 91(4) specifies 11 matters to which the Court must have regard in determining the answer to each aspect of that question. By s. 91(4)(p) the Court must have regard to any other matter it considers relevant.

1. The late Mrs Penn by her will and codicil accepted that she had a responsibility to provide for the plaintiff.  Rightly so.  The plaintiff was her only child[4].  The plaintiff was, by the time when the codicil was executed, a person over 40 years of age who had been through a failed marriage and a failed de-facto relationship.  She had recently suffered serious ill health.  She could not work to support herself.  She did not have her own home in which to live.  She had, inferentially, no savings or other assets.  For whatever reason, her mother would not take her in. 

   [4]By adoption, but nothing turns on that. 

1. Looking at competing claims, the defendant and her husband had some claim on the deceased’s bounty;  and they were not wealthy.  There is little, if anything, however, to suggest that the defendant’s children had any particular claim on the deceased’s bounty, save that they were related to her. 

1. The plaintiff’s needs were considerable.  She had been provided with little by the deceased or her husband since she had married many years before.  The plaintiff was estranged from the deceased, and had not assisted her mother during the latter’s ill health or in the aftermath of her father’s death.  Why there was the estrangement need not be examined in terms of moral fault.  It can at least be said that the deceased by her attitude had encouraged the estrangement. 

1. At the time of the death of the deceased, the situation as I have described it was for the most part still present.  The plaintiff was, of course, 10 years older that when the codicil was executed;  and she had more causes of ill health.  So also, the defendant and her husband had contributed more friendship and help to the deceased in the years of her old age and failing health.

1. In all the circumstances described the deceased, considered as a wise and just testator, did, in accordance with prevailing community views and attitudes, have a duty to make provision in her will for the proper maintenance and support of the plaintiff out of her estate.  That may be described as a “moral duty”[5], a phrase long used in this State in the present connection.

   [5]See Boaden and others, Wills Probate and Administration Service Victoria, at paragraphs 35,125 – 35,165.

1. Did the deceased make adequate provision for the proper maintenance and support of the plaintiff?  The question is to be answered by consideration of facts and circumstances known to the testator at the time of her death[6] and what might then reasonably have been foreseen.  Serious consideration must be given to the intention of the testatrix - as revealed in this case by the will and codicil.  Even so, I consider it clear that the answer to the question which I posed is “no”. 

   [6]The facts need not to be subjectively known, it seems, but nothing turns on that in this case.

1. In my opinion, for the testatrix to leave her daughter, though estranged, no more than $20,000 out of an estate the value of which (legal costs of this proceeding aside) must have been in the order of half a million dollars at the date of the testatrix’s death was, in the plaintiff’s particular circumstances, which were long-standing and very likely to continue, much less than adequate provision for her proper maintenance and support.  Even viewed at the time when the will and codicil were made, the bequest in favour of the plaintiff must still have been only a small fraction of the likely estate. 

1. Looking at the other side of the coin, it must be acknowledged that the defendant’s blood relationship to the late Mrs Penn, what she and her husband had already done for the deceased at the time when the will and codicil were made, and what they did thereafter until Mrs Penn’s death, gave rise to their having substantial moral claims on the deceased’s bounty;  claims much stronger, I consider, than those of the defendant’s children.  Despite the claims of the defendant, her husband and to a lesser extent their children, however, I cannot see that in all the circumstances the disposition in favour of the plaintiff was adequate for her proper maintenance and support.

1. What provision, then, should be made?  That must be considered as at trial.  It was, in oral argument, common ground that the plaintiff should have a roof over her head.  That will necessitate, not being lavish, expenditure of about $175,000 – 180,000 to purchase a suitable property.  Then there will be stamp duty, legal costs and disbursements, moving costs (the plaintiff has a little furniture), the likely cost of getting services connected, and the like.   I consider it proper to allow, in all, $10,000 for the various add-ons.

1. The main point of dispute between the parties was whether the plaintiff should have further provision by way of a nest egg.  I consider that she should;  but of a much lesser sum than her counsel proposed.  The overall outcome of the Court’s intervention is by intention to make adequate provision for the plaintiff’s proper maintenance and support.  That is not to be viewed in isolation from the competing interests of others with a claim on the deceased’s bounty.  In that connection, as I have said, I consider that the defendant and her husband have a claim of substance.  There is no suggestion that they assisted the deceased in hope of reward;  but there is good reason why the Court should preserve, so far as it can in all the circumstances, the deceased’s intention with respect to them.  The defendant and her husband are not young.  They are not in the straitened financial circumstances of the plaintiff.  But neither again are they particularly well off.  As for the defendant’s children, I have said several times that there is little if any evidence, their relationship with the deceased apart,  to show that the deceased was under any moral duty to provide for them.  Each of them, I add, seems to be modestly well off;  certainly much better placed than the plaintiff.

1. Mr Boaden informed me that he acted, in substance, for all the beneficiaries under the will and codicil other than the plaintiff.  He indicated that I need not concern myself about the consequences of any order I should make in the plaintiff’s favour so far as it would impact upon the split-up of the balance of the estate between those other persons.  In the circumstances I have considered, as one relevant matter, the competing claims of the plaintiff on the one hand and the defendant, her husband and children on the other.

1. In all the circumstances which I have described I consider that further provision should be made for the plaintiff in a total amount of $250,000.  From that amount, the plaintiff will be liable to pay to the estate the debt of $4,870 which she owes it for the furniture.  In consequence, the estate will have to pay the plaintiff a further amount of $245,130.

1. I ask counsel to prepare Minutes of Orders for my consideration.

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