Potet v Banks

[2011] NSWSC 1442

Supreme Court

New South Wales

Medium Neutral Citation:

Potet v Banks [2011] NSWSC 1442

Hearing dates:

22/11/2011

Decision date:

22 November 2011

Jurisdiction:

Equity Division

Before:

Associate Justice Macready

Decision:

(1)I dismiss the proceedings;

(2)On condition that any costs order is not sought to be enforced against the plaintiff or her tutor personally, I order the plaintiff to pay the defendant's costs on the ordinary basis.

Catchwords:

WILLS AND ESTATES - Family Provision Act 1982 - application for provision order by deceased's child (by her tutor) - defendant the deceased's de facto at the time of death - applicant and defendant's child by the deceased both suffering health problems - small estate - application dismissed

Legislation Cited:

Family Provision Act 1982
Property (Relationships) Act 1984

Cases Cited:

Singer v Berghouse (1994) 181 CLR 201

Category:

Principal judgment

Parties:

Anne Jolie Elise Potet by her tutor Susan Lynn-Brandon Potet
Tanya Caroline Banks

Representation:

Counsel:
Mr D Bernie for plaintiff
Mr L Ellison SC for defendant
Solicitors:
SCLAdvisors for plaintiff
Roberts Mann Solicitors for defendant

File Number(s):

S009/00290907

Judgment

1. HIS HONOUR: This is an application under the Family Provision Act 1982 in respect of the estate of Adam Petrie (also known as Adam Federow) who died on or about 14 or 15 April 2008 by his own hand. He was survived by the defendant, who had been his de facto partner for some 18 months, and their child Brandon, who was born two months before his father's death.

1. He was also survived by another child, Anne, who was a child of the second wife of the deceased. She is the plaintiff in the proceedings.

1. A former de facto spouse and her children have been served with notice and make no claim.

1. The deceased's first wife, Jane Hawkins, and their children cannot be found. I am satisfied that it is impractical to serve them.

Last will of deceased

1. The deceased's handwritten suicide note left on 14 April 2008 before he died, which was proved to be his will, left all his property to the defendant, Tanya. She obtained a grant of administration cta.

Estate of deceased

1. The estate included his home at Broga, New South Wales, worth $300,000, insurance and death benefit of $49,599, a bike sold later for $8,000 and a Falcon utility now worth $3,500. There were debts of $200,645 plus an amount of $29,000 said to be due by the deceased to the defendant.

1. The home has been sold and some of the debts paid out. All that remains in the estate is the remaining proceeds of sale of $73,134.95 and a Ford ute worth $3,500 which cannot be sold.

1. The funds are held by the defendant's solicitor in a controlled money account.

1. The superannuation of ultimately $50,140 was paid out as follows: Zoe Wheelhouse, a daughter of a previous de facto of the deceased, the sum of $10,000; the defendant the sum of $40,150. The defendant used this sum to pay out the finance on a Toyota Rav 4 which was about to be repossessed.

1. When she started her relationship with the deceased she had a debt free car but the deceased insisted on having it replaced with a new one which required finance. She also paid $4,000 back to a friend and $3,000 to GE Finance to pay some of the deceased's debts. The rest was used by her for living expenses.

1. The defendant's costs for probate of $13,686.72 would have been necessary to prove the will and extra costs would have been incurred.

1. The costs in the proceedings of the defendant are $20,437.83; the total $34,123.

1. Fortunately, counsel has appeared on a pro bono basis and the solicitor's costs have been kept to a minimum.

1. This would leave a net distributable estate of $39,011, without taking any account of the sum of $29,000 said to be due to the defendant.

Family history

1. The deceased was born on 18 October 1968. The defendant was born in January 1971. It was in April 2004 that the de facto relationship commenced between the deceased and Susan Potet, who is the tutor of the plaintiff. That occurred in the Australian Capital Territory.

1. In January 2005 they purchased a property at Brogo for $318,000. The plaintiff contributed $81,226 and the balance was contributed by the deceased. On 5 April 2005 the deceased and Susan Potet were married in Australia. Later in April Susan Potet returned to the United States of America. It was initially so that she could arrange visas so that she could properly migrate to Australia.

1. However, that plan was frustrated because the father of her other child would not allow the child to come back to Australia. She had discovered that she was pregnant to the deceased and in December 2005 the deceased came across to the United States to be with her for the birth of their child, who is now known as Anne.

1. In due course, the deceased returned back to Australia and after a while he effectively renounced his relationship with the plaintiff's mother. He then endeavoured to have a property settlement with the plaintiff's mother on various pretexts and eventually, in 2006, for that purpose paid her $AUD145,000.

1. Meanwhile, in May 2006, the deceased met the defendant. They started living together at Brogo in October 2006. On 28 February 2007 there was a deed which was signed between the deceased and the plaintiff's tutor, Susan Potet. That was in fact a termination agreement under pt 4 of the Property (Relationships) Act 1984. As the parties were married at the time, on 28 February 2007, it does not of course have any statutory effect. It is signed by Susan Potet and a certificate given of independent advice by some solicitor.

1. Effectively, what the deed does is to settle their property interests by ensuring that the deceased owned the house at Brogo, the parties kept their cars and there was a sum of $145,000 paid back to Susan. That is the sum which had been paid some time earlier. It was expressed in the deed as comprising $80,000 refund of financial contribution and $65,000 lump sum child support.

1. It is perhaps useful to note that the deed is annexed to an affidavit of Michelle Lorraine Allen and she gave evidence that after the death of the deceased she sent a copy of that agreement together with some correspondence from the lawyers to the insurance company presumably so they could contact the plaintiff's mother. Unfortunately, although there was reference to a child in the deed there was never any contact by the insurance company with either the child or her mother.

1. On 5 July 2007 there was a decree nisi of the marriage of the deceased and Susan Potet.

1. In January 2008 the deceased and Tanya had a son, Brandon. As I have mentioned, it was on 14 April 2008 that the deceased made what turned out to be his will and he died in tragic circumstances aged 39.

1. The application was filed on 8 October 2009 in time and probate was granted on 4 April 2011.

Eligibility

1. The plaintiff is of course an eligible person, having been a child of the deceased.

1. 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."

Plaintiff Anne Potet

1. The plaintiff lives with her mother, the tutor, and her half brother Andre, who is 15 years old. They live in Valley Lake, California in a two bedroom home that has one bathroom.

1. That home is worth $US142,000 which is half of its purchase price in 2006. The mortgage on the property is $US151,000.

1. At the moment the mother can pay the monthly mortgage of $400 out of child support of $500 a month which she receives from her other child's father. That child support will cease in three years time.

1. In due course, in the next 10 years, if they are able to remain in the house at that time, there would be additional repayments of principal to be made as well as interest, as it is an interest only loan at the moment. She cannot afford child care and if she worked she would not get enough to be able to pay the child care fees. She does not qualify for social security payments but she lives on food stamps of $526 per month from the local county.

1. This meagre existence for the three of them means there is nothing to spend on the plaintiff. She cannot have any activities. There is nothing available for her schooling. She cannot have new clothes and she lives on hand-me-downs from her brother and clothes from the opportunity shops.

1. The plaintiff Anne has suffered from seizures since she was one year old. At the moment, although she has been seen by doctors, the cause can apparently not be diagnosed and the plaintiff's mother says she cannot afford to have any further investigations to find out the cause. In America, she points out, there is no national medical scheme. She has no private insurance and if any medical help is to be obtained, it has to be paid for.

1. The deceased, from the accounts given by Anne and the tutor, was excited and pleased with his daughter for the brief time that he saw her.

The defendant Tanya Banks

1. Tanya is 40 years old. She lives on a property at Bega with her children Hayley and Brandon, who is now three years old. She lives with a friend who has recently become her de facto partner, Graham Whyman. He owns the property and is working as a store worker and a forklift driver for Bega Cheese.

1. Tanya will never be able to work due to her Type 1 diabetes she has had since she was eight years old. The doctor described her present situation in these terms:

"Tanya has significant medical problems associated with her diabetes. She has complications which include hypertension, a degree of microvascular disease including diabetic retinopathy and diabetic nephropathy. She has significant peripheral neuropathy and also autonomic neuropathy. She has had the previous amputation of her 5th toe. In combination with her emotional situation and her disturbed relationships, as well as her own child with type 1 diabetes, it has certainly not been very easy for her. Her latest blood tests from 20 April 2011 show an elevated creatinine consistent with a degree of renal impairment so she has moderate renal failure. She had a fasting blood sugar which was 15.4 which is almost three times the upper end of the normal range. Her lipids showed them to be within the normal range but excessively high for a diabetic and her HbA1c which looks at her long term control was in a range which indicates extremely poor control. It was 11.6 which would give an average blood sugar in the high teens over the last three months."

1. As she explained in evidence, her peripheral neuropathy causes extreme pain which has to be medicated and she finds it hard to keep up with Brandon, the deceased's son, even at age three.

1. Unfortunately, Brandon is in a difficult situation as well. In April 2011 the following diagnoses was given by a paediatrician:

"Brandon Banks is given the diagnosis of Autistic Disorder according to DSM IV criteria. He meets the following criteria:

A.1. (a) marked impairment in the use of multiple nonverbal behaviours to regulate social interaction

(b) failure to develop peer relationships appropriate to developmental level

(c) a lack of spontaneous seeking to share enjoyment, interests, or achievements with other people

(d) relative lack of social and emotional reciprocity

2. qualitative impairments in communication as manifested by

(a) almost total lack of spoken language (not accompanied by an attempt to compensate through alternative modes of communication)

(b) lack of varied, spontaneous make believe play or social imitative play appropriate to developmental level

3. restricted repetitive and stereotyped patterns of behaviour, interests and activities as follows

(a) encompassing preoccupation with one or more stereotyped and restricted patterns of interest that is abnormal in intensity and focus (especially spinning objects)

(b) apparently inflexible adherence to specific non-functional routines or rituals

(c) stereotyped and repetitive motor mannerisms

(d) persistent preoccupation with parts of objects

B. abnormal functioning with onset prior to age 3 years: (1) social interaction (2) language as used in social communication, and (3) symbolic or imaginative play

C. the disturbance is not better accounted for by Rett's Disorder or Childhood Disintegrative Disorder."

1. As his mother explained, he is behind in speech, non toilet trained, cannot ask for what he wants and has major melt downs due to frustration. He has started to push children around at the day care centre in frustration. Worryingly, what little help is available may well cease when he is seven years of age.

1. Tanya's only asset is her car worth $15,000 and she has debts worth $3,000. She started the relationship with the deceased with $35,000 and an unencumbered car. Of that $35,000, she contributed $29,000 to the relationship. She says it was by way of loan but there are no documents in support of it.

Discussion

1. The plaintiff's situation is precarious. The deceased had a duty to provide for her. He seems to have renounced that duty and instead concentrated his thoughts before he died on Tanya and their child Brandon.

1. As is apparent from the start of this judgment, there is no money left. If I were to put to one side the defendant's claim for a debt of $29,000, there is only $39,011 left.

1. Factors which I note are that both the plaintiff's tutor and the defendant were persuaded by the deceased to part with various sums of money by the deceased during their brief life with him. For the tutor there is the additional sum of $80,000 put into the home. However, that was returned to her a year later.

1. There is one important difference between the position of the tutor and the defendant and that is that the tutor received $65,000 as a lump sum for their child support. All the defendant got was a bike which she sold for $8,000, about $10,000 from the superannuation for her living expenses.

1. I have concentrated on the mothers because they are the ones who control the destiny of their helpless children.

1. There is good medical evidence dealing with the situation of the deceased's son Brandon and it is clear his disability will be difficult for his mother to deal with given her limited resources.

1. Unfortunately, apart from some hospital notes, I only have her mother's observations in respect of Anne the plaintiff, and those observations show the seizures have lessened. Anne and her mother's economic outlook in the United States of America is bleak and likely to crumble in a few years. $39,000 will not solve that problem. The health worries are the obvious needs in respect of Brandon and they, I think, are something which can be assisted by the provision of some money.

1. In my view, it is he who should receive the benefit from the deceased as a result of the money which will flow to him through his mother. She will be able to get such additional help as is available with what little funds are left.

1. Sadly, the only appropriate result, in my view, is the proceedings should be dismissed.

1. I dismiss the proceedings and will hear the parties on costs.

1. I have heard submissions in respect of costs.

1. The plaintiff's representation is by legal aid and, accordingly, she would normally not be out of pocket.

1. In the circumstances, I think that I can make an order upon condition.

1. Accordingly, on condition that any costs order which I now make is not sought to be enforced against the plaintiff or her tutor personally, I order the plaintiff to pay the defendant's costs on the ordinary basis.

1. The exhibits may be returned.

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Decision last updated: 30 November 2011