Phegan v Hynes
[2011] NSWSC 246
•24 March 2011
Supreme Court
New South Wales
- Amendment notes
Medium Neutral Citation: Phegan v Hynes [2011] NSWSC 246 Hearing dates: 22 March 2011 Decision date: 24 March 2011 Jurisdiction: Equity Division - Probate List Before: Associate Justice Macready Decision: 1. The plaintiff is to receive a legacy out of the estate of the deceased in the sum of $420,000 in lieu of the provision for her in the will of the deceased.
2. The residue of the estate of the deceased is to pass to the defendant and Geoffrey Allan Phegan in equal shares.
3. The plaintiff's costs on the ordinary basis and the defendant's costs on an indemnity basis are to be paid or retained out of the estate of the deceased.
4. Interest is to run at the rate provided under the Probate and Administration Act 1898 from three months from the date of this judgment.
Catchwords: Family Provision. Application by foster child. Poor quality relationship with parents. Increase in provision ordered. No question of principle. Category: Principal judgment Parties: JULIE ANNE PHEGAN v GAIL ANNETTE HYNES Representation: Mr KF Morrissey for plaintiff
GHS Legal for plaintiff
File Number(s): 2010/150100
Judgment
HIS HONOUR: This is an application under the Succession Act 2006 in respect of the estate of the late Lionel Gregory Phegan who died on 6 February 2010. He was survived by his two children, one of whom is the defendant, and his foster daughter who is the plaintiff.
The will of the deceased
The deceased's last will was made on 18 December 2009 and he appointed the defendant his executrix. He had devised his house in Bay Road, Long Beach on the New South Wales south coast to the defendant and his son Geoffrey Allan Phegan in equal shares. The residue was divided equally between the plaintiff, his foster daughter and his two children.
There was an earlier will in 1995 which left all of the estate to the three of them equally.
The estate of the deceased
The estate consists of cash in the sum of $810,680.08 and the home at Long Beach, New South Wales. There is a conflict in the evidence as to the value of the house. The value of the house has been affected recently by changes to legislation. The Coastal Protection Act 1979 has been amended to make provision for the categories of land within the coastal zone according to the level of exposure to coastal hazards.
The Eurobodalla Shire Council has issued an interim sea level rise adoption policy. The subject land is within that investigation area within the terms of that policy. This means there is no classification yet as to whether the land will be considered high risk, medium risk, or low risk.
The initial appraisals of the value of the property without taking this affectation into account were varied around the area of $706,000; after changes were put in place there has been an appraisal indicating a value of $630,000.
There have been valuations prepared on each side. The plaintiff, whose valuation took no account of the change, valued the property in the sum of $780,000. The defendant, which did take account of the change, valued it at $620,000. That appraisal referred to the affectation in these terms:
" 10 General comments:
The property comprises an older style three bed two bath brick residence. The land is located directly opposite the beach with a sealed Council road in between. This location and view is exceptional within the area and highly sought after.
However, in late 2010 Eurobodalla Council have adopted an ' Interim Sea Level Rise Adaptation Policy'. This policy places the subject property in the 'Investigation Area' and due to its location and level, is believed to be in the High Risk Zone. The Policy does not adequately and easily define what the restrictions or results from this policy are. As a consequence the public do not know what will be approved or not approved on these sites and hence are hesitant to purchase land in the Investigation Area, and especially those in the High Risk Zone.
One recent sale in Sandy Place of Long Beach, has been affected by this policy when purchases made offers and withdrew these offers after meetings with Council Planners. The sale eventually proceeded with a different purchaser at some 10 to 15% lower than the original offers from two different parties. Therefore we have adopted a reduction in value on the subject property of 10% to take into account the adoption of the policy by Council.
We believe in the current market the value of this property has been reduced because the future restrictions on the site are unknown with Eurobodalla Council adopting the new policy. In the future, once more information and process around this policy and its exact restrictions come to knowledge, the value may change further (for the better or worse). However, at this stage it is unknown exactly what restrictions lay on properties within this zone and hence we have adopted a slight decrease in value as a result. Due to a lack of information and knowledge of the restrictions on these properties, we can only value and act with the current information at hand."
The effect on the value of the land is quite apparent and logical and, accordingly, having regard to the fact that there is a valuation taking this into account, I will adopt a value of $620,000.
The costs of the parties to the proceedings will fall on the residue. They are, for the plaintiff, $50,000 on the ordinary basis and the defendant $70,000 approximately, totalling $120,000.
The defendant's costs estimates in the affidavit evidence were predicated on a two-day hearing but the hearing only took one day. Hence there will be a reduction in likely costs. Thus, the likely residue from the estate will fall from $810,680-$690,680 if a costs order is made in favour of the plaintiff. This makes the plaintiff's share a sum of $270,226 down to $230,228 after costs.
Family history
The plaintiff was born in November 1960 as Julie Mary Zovic at Benally in Victoria. Sometime later she became known as Julie Ann Phegan. She had a very difficult childhood. Her mother was an alcoholic, a schizophrenic and in and out of gaol. On 9 May 1966 the plaintiff was made a ward of the state and remained a ward of the state until her birthday in November 1978.
On 24 May 1966 the plaintiff was placed in the care of Mrs Phegan, who was the deceased's wife. Initially they lived at Leura and she resided with them until she attained her m ajority.
In October 1974 the question of adoption was considered. At that stage the plaintiff was 14 years of age. The foster parents, the deceased and his wife, did not wish to proceed at that stage because they thought it better to wait until the plaintiff was a little older and more able to consider the matter objectively with greater knowledge of herself. They wanted to see if she wanted to make the request.
In August of 1975 there was a suggestion as to the change of the plaintiff's name to that of her foster parents. She wanted more time to think about it. In due course she did. As I have mentioned, she ceased being a ward of the state in November 1978 and at that stage was still living with the deceased and his wife doing the Higher School Certificate at Katoomba High School.
On 9 December of 1981 she completed her initial studies at Mitchell College at Bathurst and in April 1982 she graduated from that college.
In the next year she moved to Sydney in Crows Nest and set up a cleaning business. That lasted for a year or so and she sold the business. She moved up to Airlie Beach in Queensland and worked in that area in real estate.
The deceased and his wife sold their home in the 1980s and moved to Bay Road, Long Beach on the south coast. At about the same time the plaintiff returned from Queensland and lived in Sydney. A year later she became bankrupt over a debt relating to the purchase of a motor car.
In the early 1990s she spent about seven years doing acting work and have a variety of other casual employments in hospitality and sales. In the late 1990s there was a falling out with her foster parents to which I will refer later.
In the year 2000 she commenced to work with Qantas. The position she held is not clear but apparently it was something in the office that required her to work with computers. In November 2005 she retired from Qantas on a medical disability pension and received payments until the end of 2007. The payments were 75% of the then current salary which was about $50,000.
At the end of December 2007 those payments ceased and she received a lump sum payment of $287,625.78 and $5,028.46 in employment entitlements.
The deceased's wife died on 18 September 2008. In due course the deceased made his will which I have mentioned. On 18 December 2009 and in January of the following year he was admitted to Batemans Bay Hospital and died on 6 February 2010.
Probate was granted on 10 June 2010 and the proceedings were commenced within time.
In July 2010 one of the beneficiaries, Geoffrey Allan Phegan, who had an entitlement to commute his pension, decided not to do so and continues to receive his pension.
Eligibility
The plaintiff was never adopted and, therefore, her eligibility is based on section 57 (1) (e) of the Act. Given that she lived with and was dependent upon the deceased from the age of five years there is no doubt she is an eligible person.
It is, however, necessary under section 59 (1) (b) of the Succession Act that the Court should first determine whether there are 'factors warranting' the making of the application. This expression has been dealt with by the courts on a number of occasions. In Re Fulop Deceased (1987) 8 NSWLR at 681 McLelland J described that expression in the following terms:
"Secondly, the subsection appears to be premised upon a distinction between ' factors which warrant the making of the application' on the one hand, and circumstances which would justify the making of an order granting the application, on the other; otherwise the subsection would be pointless. This means that in a particular case the Court might determine that there are 'factors which warrant the making of the application' within the meaning of the subsection, and yet go on to decide that the application should fail. Since the subsection applies only to certain classes of applicants, it suggests that those classes of applicants need to demonstrate some basis for their claims additional to that required of other classes. The difference between the two sets of classes of applicants, in broad terms, seems to be that the class is not affected by section 9 (1) (lawful and de facto spouses and children) are as such generally regarded as natural objects of testamentary recognition by a deceased (of the Wills Probate and Administration Act 1898, section 61B), whereas the classes affected by section 9 (1) (former spouses, and some time dependent grandchildren all household members) are as such not generally so regarded. This suggests that the 'factors' referred to in the subsection are factors which when added to facts which renders the applicant an 'eligible person' give him or her status of a person who would be generally regarded as a natural object of testamentary recognition by deceased. That the subsection is directed at a plaintiff's status as applicant in some such sense as this perhaps finds some support in the statutory direction to the Court, in the event that it determines the preliminary question adversely to the plaintiff, not to go on to determine the application, but 'refused to proceed with the determination of the application.'"
In Churton v Christian (1988) 13 NSWLR241, the Court approved this statement. Priestley JA at page 252, after setting out and approving this statement, added:
" To this I would add that although the classes affected by section 9 (1) are not necessarily generally regarded as natural objects of testamentary recognition, in some cases members of these classes may, when the circumstances of their relationship with the deceased are set out, immediately be seen to be persons who would be regarded by most observers as, in their particular circumstances, natural objects of testamentary recognition."
These principles have been applied at first instance for many years.
There has been in recent times further attention to this matter in the Court of Appeal in the case of Brown v Faggoter , a decision delivered on 13 November 1998, which is a decision of Sheller JA, Sheppard AJA and Fitzgerald AJA. Fitzgerald AJA, who seemed to suggest that an application might be warranted if the application has reasonable prospects of success, gave the main judgement. This seems to be a somewhat different and perhaps an easier test than that which they Court of Appeal approved in Churton v Christian . I will consider the matter on both bases, given that there may be some flux in the state of the law in this regard.
Plainly in this case, given the raising of the plaintiff as their own child for the majority of her childhood, there are factors warranting made out on the traditional basis and I will see if there are prospects of success.
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."
The plaintiff's situation in life
The plaintiff' is 50 years of age, single, lives alone in rented accommodation. She has no dependents and her assets consist of the following:
1996 Hyundai Excel motor-vehicle
$3,900.00
Cash savings
about $98,000.00
588 Qantas share - about $2.30 each
$1,352.00
Funds held in trust GHS Legal on account costs of these proceedings
$15,019.17
Household effects
$1,000.00
Art work (cost price about $10,000)
$5,000
Total
$124,271.17
Her income consists of:
Disability Pension
$1,595.76
Qantas dividends
$25
Interest
$792.47
Total
$2,413.23 per month
Her expenses are $4,551 per month and she is living on the capital.
At the end of 2005 she retired from her position at Qantas on medical disability grounds. She received a pension for two years and then at the end, as I have mentioned, she received a permanent disability pay out in the sum of $286,625.78 nett. She lived on that for 18 months before getting a government pension. Thus her savings are reduced to $98,000. Last year they were $199,200 and have been reduced by living beyond her means and by impulse buying which results from her medical condition.
In her first affidavit the plaintiff described her medical condition in this way:
"79. I have experienced depression on and off since my teenage years. I sought treatment in the mid-1990s but I have not followed it up as I do not want to take any antidepressants.
80. My regular symptoms include:
I suffer prolonged tiredness and I am easily fatigued.
I get seriously depressed, upset and teary.
I cannot concentrate for prolonged periods.
I feel general aches and pains with flu like symptoms in joints.
I have an irritable bowel.
I have trouble sleeping.
I do not know the reason for my psychological conditions. I had a very difficult life before I was placed with Mum and Dad. I have had trouble forming relationships. I have even refused to acknowledge my actual age sometimes, as I felt a need to hold myself out as younger than I am, in an attempt to expunge my early childhood years.
81. I am currently receiving the following treatment:
Acupuncture.
Counselling.
Massage.
Prescription medication for thyroid, insomnia and ulcerative proctitis.
82. I have not been looking for even part-time work of a like nature because my symptoms are such that I only managed from day to day. Some days I have plenty of energy but other days I feel extremely lethargic and have difficulty managing even normal household activities."
There is also evidence of a thyroid condition which contributes to her condition, and there has been some treatment. There is also evidence of pain in her back, which is being treated with medication.
The psychological problems which she has are certainly evident and I have no doubt they stem from her early childhood which was quite traumatic. As I mentioned, her mother was a schizophrenic alcoholic who spent time in gaol. The plaintiff was from time to time in foster care before being declared a ward of the state.
The evidence contains a number of examples of her attempts to deceive people by suggesting she was seven years younger than she is. Unfortunately, this included her treating medical practitioners. However, it does substantiate what she has said in her affidavit about the problems she suffers.
Although discharged from Qantas as she was disabled there is no current medical evidence of her likely ability to return to the workforce. It may be that once this case is over she may get on top of her problems but I cannot be sure of this. The likelihood of returning to the workforce is not known.
The plaintiff did not contribute to the deceased's estate. The evidence suggests that from time to time the deceased supplied her with low level contributions for her support on an ad hoc basis when she approached him for money.
The situation in life of Gail Annette Hynes
The defendant is 53 years of age with two children aged 21 and 18 years. She lives at home and she and her husband have a house worth $650,000 at Long Beach which is subject to a mortgage of approximately $527,000. They have two cars worth $12,000 and superannuation worth $410,000. Their combined salary is $120,000 or $2,307 per week. They suggest that their expenses are in the order of $1,967.50 per week. They gave evidence they found it difficult to get by and could not do all they wanted for their children. However, it should be noted that as a result of the deceased's wife's will, the children have a substantial trust fund containing 9675 BHP shares worth $422,798. They are entitled, as a result of the death of the deceased, to the income of $9,000 per year from that fund.
Although the trust is expressed not to vest until they are each 30 years, it can be determined when they have both achieved their majority. In addition, the powers of advancement are available to assist the children. That this may need to happen was recognised by the deceased in her will.
Thus the children of Gail Annette Hynes, the defendant, have adequate provision for their upbringing.
The defendant and her husband need to spend $30,000 on landscaping and improvements on their home.
There was plainly a good relationship between the deceased and the defendant. She did not contribute to the estate and the deceased made no provision for her in her lifetime. However, it is be borne in mind that the burden of the assistance to both the parents was borne mainly by the defendant with some smaller assistance from the plaintiff.
The situation in life of Geoffrey Allan Phegan
Geoffrey is 65 years of age with no dependents. Although he has a bridge partner they do not live together and they are financially independent from each other. His assets consist of savings of $210,000 and a 1995 Volvo motor car with $2,000. His pension payments are $681 per week and his expenses are $593 per week. His health is not good. He suffers from:
"IHD (Ischaemic Heart Disease) - I have had a number of stents inserted in surgery in 2009.
Hypercholesterolaemia.
Castro-oesophageal reflux disease.
Chronic sinus / nasal congestion.
Anxiety / depression.
Post-traumatic stress disorder.
Multiple skin cancers.
Rotator cuff syndrome."
He has no home and is presently living in the deceased's home. He also had a good relationship with the deceased. However, he did not contribute to the estate or receive provision from the deceased in her lifetime.
The relationship between the plaintiff and the deceased
This is a contentious matter in this case. When the deceased made his will in 2009 he gave these reasons for making a reduced provision for the plaintiff:
1. Foster child
2. Got her about 1974 at age of four years old.
3. With Phegans for primary and high school.
4. Then to university at Baptist. Think Arts (recreational officer).
5. Paid to all of that.
6. Treated her as part of the family.
7. But she was very self-centred.
8. Altercations took place surrounding Mrs Phegan's funeral.
9. She still contacts on occasions but rarely.
10. I will not ever contact her.
11. After she left university she "disappeared" went to Queensland.
12. Only contacted us when needed money.
13. Did not obtain a normal parent / child relationship.
14. That has continued.
Although the plaintiff was in Queensland for some years she did in fact visit the deceased twice during that time. In the late 1990s the plaintiff fell out with her parents and did not visit them for some two years. She did ring them and exchange cards. This passed and the plaintiff resumed visiting contact, especially when her mother was sick.
There are two matters surrounding the deceased's wife's funeral that stressed the deceased. The first concerned the deceased's request that no one view his wife's body after her death. This caused a big row, according to the plaintiff, between the deceased and her. However, she did not go and view the body.
The second matter is that the plaintiff, on being told that all her mother's estate (or at the least most of it) passed to the deceased, questioned her father on the subject. This led to an argument with the deceased who perceived her as wanting part of her mother's estate. According to the reports of the deceased's statement, which I accept, he ordered her out of the house and told her not to come back. Eventually the plaintiff spent a week with her father at Christmas 2008. Plainly there was some forgiveness on the part of the deceased, although it was some months before it happened.
Although the plaintiff denied making frequent demands on the deceased for money, I am satisfied she did in fact often approach her father for money. Sometimes they were acceded to and sometimes not.
The allegations of a lack of normal parent / child relationship could be related to allegations that the plaintiff was difficult to live with and this was evident when she visited. The evidence supports this.
The question of estrangement has been dealt with in many cases. In Foley v Ellis [2008] NSWCA 288 the Court of Appeal referred to this kind of problem in these terms:
"101. The more recent authorities have held that a state of estrangement or even hostility between a testator or testatrix and a claimant does not terminate the obligation of that testator or testatrix to provide for the claimant. I n Palmer v Dolman Ipp JA, after a review of the cases, observed (at [110] that:
'... The mere fact of estrangement between parent and child should not ordinarily result, on its own, in the child not being able to satisfy the jurisdictional requirement under the Act.'
See also Wheatley v Wheatley [2006] NSWCA 262 AT [22] - [23] per Bryson JA (with whom Santow and McColl JJA agreed, addressing the second stage of the process required by Singer v Berghouse.
102. The authorities indicated that where the claimant has been estranged from the testator or testatrix, the application of section 7 of the Family Provision Act requires that the estrangement be appraised and its causes considered: Wentworth v Wentworth, estate of G M Wentworth (Bryson) quoted in Wheatley v Wheatley at [22]. In addition, section 9 (3) (b) expressly requires the character and conduct of the eligible person to be taken into account at the second stage of the process. Care should be taken, however, not to over simplify the complex and nuanced relationships within a family by yielding to the temptation to condemn categorically the behaviour of one party or the other. Events viewed years later through the cold prism of a courtroom may give a different impression than when the events are set in the context of raw emotions experienced at the time. The ' wise and just' testator or testatrix ( Bosch v Perpetual Trustee Co Ltd [1938[ AC 463 AT 478-479 per Lord Romer) must be taken to understand this."
In Wheatley v Wheatley [2006] NSWCA 262 Bryson J had the following to say:
"37. The poor state of the relationship between Mr Wheatley and the testatrix, illustrated by the absence of visits during the last 13 years of her life, operates to restrain amplitude in the provision to be ordered. However, Mr Wheatley is an eligible person, the testatrix's only son and one of only two children, and his needs are severe and go far beyond the needs for renovation of his flat and dental treatment which the Trial Judge's order provided for. Amplitude would not be appropriate in ordering provision for him, but it must be observed that provision for him, even the full amount nominated by his counsel, would not produce any hardship for in Ms Wheatley, who would still be provided for on a scale according full and appropriate recognition to her claims."
The matter was further discussed recently by White J in Kay v Archbold [2008] NSWSC 254 in these terms:
"94. Senior counsel for the defendant submitted by reference to observations of Bryson JA (with whom Santow and McColl JJA agreed) in Wheatley v Wheatley [2006] NSWCA 262 at [37] that the poor state of the relationship between the deceased and the plaintiff, illustrated by their lack of communication between 1999 and 2006, even when the plaintiff was aware that her mother was ill and seriously so, operated to ' restrain amplitude in the provision to be ordered".
95. Their estrangement is certainly a factor to be taken into account in determining what provision should be ordered. However, cases are infinitely various. There is no rule that irrespective of a claimant's need, the size of the estate, and the existence or absence of other claims on the estate, a claimant is not entitled to 'ample' provision if he or she has been estranged from the testator. Bryson JA was making observations appropriate to the facts in Wheatley v Wheatley . He was not espousing any general principle as to the relevance of amplitude. The very general directions in sections 7 and 9 of the Family Provision Act require close attention to the facts of individual cases. It is an error to seek to extract statements of general principle from observations directed to the facts of specific case.
96. The present is not a case of 'bare paternity' or 'bare maternity'. But even in such cases, the fact of parenthood is highly material to the existence of a duty to make provision. In this case some provision was made. The question is as to its adequacy."
I pause to note that in this case there is no parenthood in law but, given the upbringing extended to the plaintiff in her childhood years, there is little difference in this case.
It might be disappointing for a parent if a child disappears off into their own life after growing up and does not contact them with any regularity. In this respect I am reminded of what Holland J said in Kleinig v Neal (1981) 2 NSWLR 532 AT 540:
"If it is a case of parent and child, under the circumstances that the parent was responsible for bringing a child into the world and having done so 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 an adulthood, a child will want to make his own life just as the parent had done before him. Differences 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 it is just as well as wise will not allow such disharmony or disappointment to blind him to the needs of each 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 judgement that it considers that a 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."
In this case I do not suggest that all the errors of the plaintiff can be excused on this ground. In my view the amplitude of the provision which it might be appropriate to make for the plaintiff is somewhat lessened by her conduct and the lack of contact.
It is necessary to see what the plaintiff says is the way she has been left without adequate and proper provision for her maintenance, education and advancement in life. It is simply that she would like sufficient funds to buy a unit near where she has lived at Centennial Park for the last 18 years. She lives in a one-bedroom unit and a single bed unit can be purchased in Kensington, nearby, for between $475,000 and $525,000.
There is raised squarely the question of whether it is appropriate to provide accommodation for her. In McGrath v Eves [2005] NSWSC 1006 Gzell J referred to the court's approach to the question of moral duty when considering claims by children to be provided with funds for a house. He said:
"67. When it comes to children, as Young J observed in Shearer v The Public Trustee , NSWSC, unreported, 23 March 1998, it has never been said by any court that the community expects a mother to leave her children in a position to have a house of their own. That observation applies equally to a father. And in Gorton v Parks (1989) 17 NSWLR 1 at 7, Bryson J pointed out that there is no special principle that able-bodied adults earning a living have no claim, his Honour pointing out that such a proposition in relation to resources of any size was quite erroneous.
68. In Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419 at ][109] - [110]. White J, having referred to this passage, went on to observe that there was no rule to the effect that proper provision for an adult and presently able-bodied child did not extend to providing him or her with a house or money to buy one. His Honour noted that instances in which this had occurred included Re Buckland, deceased [1966] VR 404 and Ogden v Green [2003] NSWCA 3521.
69. White J's decision was upheld in the Court of Appeal in Lloyd-Williams v Mayfield [2005] NSWCA 189. In the course of his judgement, Bryson JA at [31] pointed out that there were features to the case that were rarely encountered in claims under the Family Provision Act 1982 and rarely encountered together. First, the value of the shares designated as notional estate was very large in comparison with the estates ordinarily encountered. Secondly, because the appellant was otherwise amply provided for, further provision ordered by White J could have no adverse effect on her wellbeing. Thirdly, the applicant did not have any needs in terms of lack of present provision for necessities and amenities of life on an ordinary scale of needs as understood in the community generally.
70. It was submitted that Mayfield was distinguishable by the absence of these features in the instant circumstances and because the appellant in Mayfield had filed no financial evidence and put forward no competing financial or other needs for the Court to consider.
71. There are differences of fact between Mayfield and the present case. But they do not affect the central proposition that there is no rule to the effect that proper provision for an adult and presently able-bodied child does not extend to providing him or her with a house or money to buy one. Indeed, at [32], Bryson JA observed that it was open to White J and altogether appropriate to look well beyond needs when interpreting and applying community standards to decide what provision the court ought to order."
This question requires a consideration of other claims on the bounty of the deceased. The defendant will receive $540,000 under the will of the deceased. She has a mortgage of $539,000 and needs to spend $30,000 on the house.
Geoffrey needs to purchase a home and would plan to spend $300,000 of his savings and share of residue, which is $440,000, to buy the deceased's house. This would leave him with $140,000 left for contingencies. In his first affidavit he suggested he needed $400,000 for alternative accommodation, a sum just somewhat smaller than he now suggests in the witness box.
The provision of $420,000 for the plaintiff would allow her to purchase a unit utilising her present savings of $98,000. She would then be forced to live on a pension and substantially reduced expenditure. The provision of $420,000 in lieu of the $230,000 requires $190,000 to be deducted from the sum to be provided from the other beneficiaries by a reduction of $95,000 each. This they can each accommodate.
Geoffrey would buy his sister's share of the house and have $45,000 over as a fund for contingencies.
The defendant would still receive a sum sufficient to make a substantive reduction in her and her husband's mortgage and carry out repairs. She and her husband have substantial superannuation and will work for at least another seven years.
For the plaintiff one of the motivating factors in bringing the case is the inequality of the provision which she received. Whether this was so has nothing to do with the proper resolution of the plaintiff's claim. The court cannot consider whether the will was fair or other like matters. The court only has jurisdiction to vary the will if the plaintiff has been left without adequate and proper provision for her maintenance, education and advanced in life.
A lot of the difficulties the plaintiff has encountered in her life are as a result of that terrible time she had when she was extremely young. That period of her life has had and still continues to have a profound effect upon her.
It is of concern because there is the possibility that if provided with funds to purchase a unit she may not do so and may whittle away the money over the years.
However, the provision of some funds does give her the opportunity, as the proceedings will be finished, to make a new start in life. That may also extend to entering the workforce in due course.
However, the amount to be provided would leave her nothing extra and such an approach should follow from the finding that any provision for her should not be overly generous due to her conduct towards the deceased.
I am satisfied that she has been left without adequate and proper provision.
The orders which I make are as follows:
1. The plaintiff is to receive a legacy out of the estate of the deceased in the sum of $420,000 in lieu of the provision for her in the will of the deceased.
2. The residue of the estate of the deceased is to pass to the defendant and Geoffrey Allan Phegan in equal shares.
3. The plaintiff's costs on the ordinary basis and the defendant's costs on an indemnity basis are to be paid or retained out of the estate of the deceased.
4. Interest is to run at the rate provided under the Probate and Administration Act 1898 from three months from the date of this judgment.
5. I direct the exhibits be returned.
(Counsel addressed on the question of costs)
There has been tendered a plaintiff's offer of compromise in which the plaintiff offered to settle for a legacy paid to her of $425,000 with the plaintiff to pay her own costs. Accordingly, that offer is not within the Rules so far as the cost consequences which follow under Part 42 Rule 14.
It has been suggested by the defendant that there should be no order as to the plaintiff's costs or, alternatively, there should be no order for indemnity costs.
On the basis that the offer of compromise is regarded as a Calderbank letter, I will have regard to what is referred to as the history of what has happened to this matter since the mediation which occurred in August 2010. At that stage the plaintiff agreed to settle for $380,000 inclusive of costs and thereafter the parties set about trying to approve the agreement. For various reasons the plaintiff sought to set it aside suggesting there might have been misleading conduct at the mediation. What has happened is that has meant a whole series of offers and counter offers have been made in the context of the concern of the plaintiff to set the matter aside.
There has also been a further agreement by the plaintiff to settle the matter and then withdraw from that settlement.
The defendant has taken a sensible approach to the matter and has agreed that she would not seek to enforce the mediation agreement or the other agreement that apparently was reached. She prefers instead to argue the case which, fortunately, was able to be completed within a day.
That whole history has brought up costs for all parties and there has been, I think, a withdrawal by the plaintiff from agreements that she has made. There is no basis for suggesting that her actions were proper and particularly the later agreement whereby she just simply did not wish to proceed with the settlement after she had agreed to it.
In the circumstances I think, having regard to those matters, I will not order that the plaintiff's costs be on an indemnity basis but the plaintiff will be entitled to her costs on an ordinary basis and I so order. I order the exhibits be returned.
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Amendments
13 April 2011 - change age from six to five
Amended paragraphs: 24
Decision last updated: 13 April 2011
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