Pritchett v Priakos

[2006] NSWSC 271

CITATION:	Pritchett v Priakos [2006] NSWSC 271 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	25 October 2005
JUDGMENT DATE :	11 April 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	Associate Justice McLaughlin at 1
DECISION:	(1). I order that, in lieu of the benefits given to him by the will of the late Adreanna Pritchett (“the Deceased”), the Plaintiff receive a legacy in the sum of $600,000, such legacy not to bear interest if paid on or before 11 July 2006, and if not so paid to bear interest at the rates prescribed for unpaid legacies under the Wills, Probate and Administration Act 1898, and that the balance of the estate of the Deceased be held for the First Defendant absolutely. (2). I order that the costs of Plaintiff on the indemnity basis and costs of the Defendants on the indemnity basis be paid out of the estate of the Deceased. (3). The exhibits may be returned.
CATCHWORDS:	Succession. Family Provision. Claim by widower aged 84. Financial and material circumstances of Plaintiff. No other eligible persons. Competing claim of First Defendant. Will gave to Plaintiff life estate in matrimonial home. Inevitable that that residence must be sold, if only to meet costs of the present proceedings. Essential need of Plaintiff is for security and flexibility in accommodation.
LEGISLATION CITED:	Family Provision Act 1982 Wills, Probate and Administration Act 1898
CASES CITED:	Singer v Berghouse (1994) 181 CLR 201 Vigolo v Bostin (2005) 79 ALJR 731
PARTIES:	Ronald Joseph Pritchett (Plaintiff) Penelope Priakos (First Defendant) Nicholas George Pappas (Second Defendant)
FILE NUMBER(S):	SC 1984/05
COUNSEL:	P. Blackburn-Hart, SC (Plaintiff) R. Darke, SC and D. Kell (Defendants)
SOLICITORS:	Stephen Wawn & Associates (Plaintiff) Nicholas G. Pappas & Company (Defendants)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Tuesday, 11 April 2006

1984/05 RONALD JOSEPH PRITCHETT –v- PENELOPE PRIAKOS and ANOR

JUDGMENT

1 HIS HONOUR: These are proceedings under the Family Provision Act 1982.

2 By summons filed on 17 March 2005 Ronald Joseph Pritchett claims an order for provision for his maintenance out of the estate of his late wife Adreanna Pritchett (to whom I shall refer as “the Deceased”). The Deceased died on 18 May 2004, aged 77 years. She left a will dated 24 May 1996, probate whereof was on 23 September 2004 granted to Penelope Priakos and Nicholas George Pappas, the executors named in such will (who are the Defendants to the present proceedings).

3 The only significant asset in the estate of the Deceased was 4,500 shares in Alvingon Home Units Pty Limited, which represented the entitlement of the Plaintiff to occupy and own a residential home unit situate at and known as Unit 9, 1 Wyuna Road, Point Piper, which had been the matrimonial home of the Plaintiff and the Deceased. The inventory of property ascribes a value of $750,000 to those shares. It was noted at the hearing, however, that the parties were in agreement that the present value of the home unit is $770,000. The only other assets disclosed in the inventory of property are 200 shares in the Commonwealth Bank of Australia, to which a value of $6,200 was ascribed (but their present value is about $7,500), and a sapphire ring, to which a value of $1,500 was ascribed.

4 The liabilities of the estate consist of a debt owing to the Plaintiff in respect to reimbursement of funeral expenses (which was ultimately acknowledged to be in an amount of $12,300), and an amount of $4,000 for administration expenses.

5 In calculating the value of the estate available for distribution it is appropriate that the costs of the present proceedings should be taken into account. It is estimated on behalf of the Plaintiff that his costs will total about $47,600, whilst it is estimated on behalf of the Defendants that their costs will total about $71,000. In regard to those estimations of costs I would make two observations. First, each estimation is based upon the assumption that the hearing would occupy two days, whereas, in fact, the hearing concluded within one day. It is appropriate, therefore, that each of those estimated amounts should be reduced. Counsel for the Plaintiff adopted the assumption that the costs of the Defendant for a one day hearing would be $57,000 (rather than $71,000). Counsel for the Defendant proceeded upon the assumption that the totality of the costs for both parties would be $100,000 (rather than $118,600). Further, I consider that those costs, especially the costs of the Defendant, are excessive, especially where, as here, the proceedings are in no way unusual or out of the ordinary, and have concluded within a single day.

6 However, in calculating the value of the estate available for distribution, a conservative approach should be adopted, and therefore, I consider it appropriate that the Court should proceed upon the basis that the value of the distributable estate is about $662,000 (being the present value of the assets in a total amount of $779,000, less a total amount of about $100,000 for the costs of the present proceedings and less $12,300, being the indebtedness of the estate to the Plaintiff, and less $4,000 for administration expenses relating to the estate of the Deceased).

7 It should here be recorded that at the commencement of the hearing it was noted that the Defendants agreed that, irrespective of the outcome of the proceedings, the costs of the Plaintiff on the indemnity basis will be paid out of the estate of the Deceased. Further, irrespective of the outcome of the proceedings, the Defendants will be entitled to an order that there costs on the indemnity basis will also be paid out of the estate of the Deceased.

8 It was also noted at the commencement of the hearing that the Plaintiff does not dispute the evidence of the Defendants that if the home unit is to be sold the costs associated with that sale by way of probate and commission, legal costs and other costs and expenses will total $17,000. Further, the Plaintiff does not dispute the evidence of the Defendants that there are legal costs outstanding in respect to the administration of the estate in an amount about $4,000; and, further, that there is no dispute between the parties that there is a debt owing to the Plaintiff by the estate of the Deceased in an amount of $12,300.

9 By the terms of her will the Deceased gave her jewellery and personal effects to the First Defendant. She gave the balance of her estate to be held on trust for the Plaintiff during his lifetime and after his death for the First Defendant (with provision for a substitutionary gift to the adult son of the First Defendant).

10 The Plaintiff, who was born on 22 November 1921, is presently aged 84.

11 The Plaintiff married the Deceased on 18 May 1974. The Plaintiff had previously been married, and had been divorced in October 1968. The Plaintiff had three children by his first marriage. In consequence of the property settlement between himself and his first wife the Plaintiff was left with little by the way of assets. As an interim arrangement he moved into his mother’s residence, situate at and known as Unit 6, 1 Wyuna Road, Point Piper, where he resided with his mother for the ensuing nine years.

12 The Deceased was at that time residing in the same apartment block at 1 Wyuna Road, Point Piper, and the Plaintiff became acquainted with her. That acquaintance developed into friendship, and ultimately on 18 May 1974 the Plaintiff and the Deceased married. Upon their marriage the Plaintiff moved into residence with the Deceased in Unit 9, which remained the matrimonial home of the Plaintiff and the Deceased throughout their married life. The Plaintiff’s daughter Anne Pritchett had been residing with the Plaintiff in rented accommodation in Liverpool Street, Rose Bay for a little over a year immediately before his marriage to the Deceased. Anne thereafter resided with the Plaintiff and the Deceased until she completed her final year of school. Later she married and moved out of the Point Piper unit.

13 At the time when he married the Deceased the Plaintiff was employed as a motor vehicle salesman with York Motors, and the Deceased was employed as a clerk with the State Lotteries Office. At that time the Plaintiff’s only assets consisted of a motor vehicle, personal possessions and savings of about $4,500. The Deceased’s assets at the time of the marriage consisted of the Point Piper unit, personal possessions and savings of about $1,000.

14 After moving into the Point Piper unit the Plaintiff expended considerable personal effort upon the refurbishment of that apartment. He personally contributed to most of the cost of that refurbishment.

15 When the Deceased was requested by her employer to transfer to the Head Office of the State Lotteries Office at Burwood, she declined such move and resigned from that employment. She subsequently obtained employment as a receptionist with the Commonwealth Bank of Australia in Martin Place, Sydney. Upon attaining the age of 65 years the Deceased was required to retire from that employment in about March 1993. The Plaintiff had in the meantime retired from his employment in about July 1984.

16 The Deceased, although she held a driver’s licence, did not drive, and it was the practice of the Plaintiff to drive her to and from work from the time of his retirement until she retired almost nine years later. The Plaintiff was also accustomed to drive the Deceased shopping, to hairdressing appointments, or on any other occasions when she desired to go out.

17 Throughout their 30 years of marriage the Plaintiff and the Deceased had a close and affectionate relationship. Whilst employed they took their annual leave together, going on various trips to the United States of America, to Greece, on a Pacific cruise, and on many interstate holidays within Australia. The Plaintiff and the Deceased played golf together whilst on holidays.

18 After her retirement the Deceased began to experience the onset of dementia. Increasingly the Plaintiff took on responsibilities for the care of the Plaintiff, which included assisting her with dressing and with her personal hygiene. The Plaintiff attended to all household and domestic responsibilities, including cooking, cleaning and washing. From 1995 the Plaintiff was providing full-time care for the Deceased. In consequence he gave up his sporting and recreational activities of golf and sailing.

19 Ultimately, upon medical advice, the Plaintiff arranged for the Deceased to enter the Parkdale Nursing Home at Waverley in May 1999, where she remained until her death some five years later. Throughout that period the Plaintiff visited her at Parkdale on no less than five days a week, spending, at first, no less than three and half hours on each occasion. From about March 2004 the Plaintiff, upon medical advice, visited the Deceased no less than six days a week, spending no less than one and half hours on each occasion. While she was physically capable it was the practice of the Plaintiff to take the Deceased on outings to Centennial Park or other parks, and to visit friends and family. Upon his visits to her at the nursing home the Plaintiff took for the Deceased meals which he had prepared at home. By 2003 the Deceased’s health had deteriorated to such an extent that she had to remain in a water bed, and the Plaintiff was no longer able to take her on outings from the nursing home.

20 In early 1984 a garage in the home unit block at 1 Wyuna Road, Point Piper came up for sale. The Plaintiff paid $8,000 for the purchase of 750 shares in Alvington Home Units Pty Limited, which entitled the owner of those shares to the use of a garage. As the Plaintiff himself was not a shareholder in the company, those shares were registered in the name of the Deceased.

21 At the present time the Plaintiff’s assets consist of the following:

Assets Estimated Value

1998 Toyota Camry motor vehicle $9,000

Miscellaneous personal effects, furniture,

clothing, hand and power tools $5,000

Term deposit with Comvest $30,000

Debenture with RACV $25,000

Debenture with RACV $10,000

National Australia Bank Income Security $31,000

JB Were deposit notes account $2,968

Commonwealth Bank cheque account $49

Commonwealth Bank Pensioner Security account $82

Cash $147

Debt owing by estate of the Deceased for

reimbursement for payment of funeral expenses $6,253

22 (I would here interpolate that it is my understanding that the foregoing debt of $6253 is included in the indebtedness of $12,300 which at the hearing it was noted that the parties did not dispute was owing to the Plaintiff by the estate of the Deceased.)

Liabilities

ANZ Master Card $4,364

David Jones credit card $1,628

Total $5,992

23 At the present time the Plaintiff’s income consists of the age pension in an amount of $230 a week, together with bank interest in an amount of about $114 a week. The Plaintiff set forth details of his average weekly expenses and outgoings, totalling $448.

24 According to the Plaintiff, at the time of their marriage it was the practice of the Deceased to use her income to pay for groceries, maintenance levies on the home unit and Council rates. The Plaintiff used his income to pay for any special levies and any extraordinary expenses relating to the unit. The Plaintiff also paid for their annual holidays, including overseas travels. Upon the Deceased’s retirement the Plaintiff used his savings and investments to pay for any living expenses which could not be met out of the proceeds of their respective pensions.

25 The Plaintiff is currently in reasonable health for his age. However, the apartment building at 1 Wyuna Road is not equipped with a lift. To proceed from the garage to his residence the Plaintiff must walk up five floors of stairs.

26 The Plaintiff, who has resided in the Point Piper unit for more than 30 years, considers that to be his home and does not wish to leave that residence. The Plaintiff has been residing on Point Piper for about the last 40 years. He wishes to continue to reside in that suburb, since his yacht club, which he visits on an average of twice a week, is located there. He is still an active member of the sailing committee of that yacht club, and he has close friends who live in his apartment building, and other friends who also reside on Point Piper.

27 According to the Plaintiff, his income is such that he can maintain only a very modest lifestyle. He can no longer afford to play golf, attend sporting events, go to the cinema or the theatre, or entertain friends at home.

28 Penelope Priakos, the First Defendant, who is the only other substantive beneficiary named in the will of the Deceased, is a sister of the Deceased (being one of the seven children born to their parents). Mrs Priakos was born on 26 October 1922, and is presently aged 83. Since her marriage to her late husband in 1956 Mrs Priakos has resided in the United States of America, currently in San Antonio, Texas. However, she maintained regular and close contact with the Deceased, both by telephone and through letters, for the period of 48 years from her removal to the United States until the death of the Deceased. During that period she visited the Deceased in Australia on five separate occasions. Until the mid-1990s Mrs Priakos and the Deceased spoke by telephone once a month. Thereafter the frequency of their telephonic contact increased to an average of about twice a month until the Deceased entered the nursing home in May 1999.

29 Mrs Priakos is a widow, her late husband having died on 25 April 1984. She has not remarried since his death.

30 Mrs Priakos is employed as a real estate agent in San Antonio, Texas, in which she currently earns an average of $1,611 a month (in United States currency). That income varies in accordance with commissions which he receives upon the sale of properties. Her earnings depend solely upon her sales. She said that at the age of 83 years she was becoming increasingly unable to work full-time at the pace required to earn commission income. In consequence, her monthly income has diminished significantly in recent years, and she fears that it may diminish even further because of health problems resulting from varicose veins in her legs, a condition which causes her increasing discomfort.

31 The assets and liabilities of Mrs Priakos (and the estimated values thereof in United States currency) are as follows:

Assets

Condominium , $65,000

Household furnishings, $10,000

Broadway Bank, $714

Credit Union, savings account, $78

Commonwealth Bank of Australia, savings account, $846

Total, $76,638

Liabilities

Broadway Bank, Loan, $5,000

Motor vehicle, loan, $9,800

Bank of America, mortgage, $41,000

Credit card balance, $10,000

Total, $65,800

32 In addition to her monthly commission of $1,611, Mrs Priakos receives social security payments of $817 a month. Thus her total monthly income is $2,428.

33 Mrs Priakos gave evidence concerning her outgoings and expenditure, totalling $2,443.

34 Mrs Priakos gave evidence concerning the circumstances surrounding the acquisition by the Deceased of the Point Piper unit, which she described as having one bedroom and being approximately 110 square metres in area. According to Mrs Priakos the Deceased acquired the unit (not including the garage) in about 1973. The purchase of the unit was funded by a mortgage loan from the ANZ bank, which the Deceased paid off early from her own earnings as an employee of the State Lotteries Office. The garage was acquired in 1984.

35 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff. I have had the benefit of receiving a written outline of submissions from Counsel for the respective parties, as well as a chronology from Counsel for the Plaintiff. Those documents will be retained in the Court file.

36 The Plaintiff, as the husband of the Deceased, is an eligible person within paragraph (a) of the definition of that phrase contained in section 6(1) of the Family Provision Act. As such, he has the standing to bring the present proceedings. There is no other eligible person in relation to the Deceased. However, the claim of the Plaintiff must be approached in the light of any competing claims upon the testamentary beneficence of the Deceased. In the circumstances of the present case the only such competing claim is that of the First Defendant.

37 In performing the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208-210 the Court must first consider whether, in consequence of the testamentary dispositions of the Deceased, the Plaintiff has been left without adequate provision for his proper maintenance. (See, also, Vigolo v Bostin (2005) 79 ALJR 731, in which the High Court affirmed the correctness of the foregoing test in Singer v Berghouse.)

38 By her will the Deceased gave to the Plaintiff only a life interest in his home of more than 30 years. He was thereby deprived of flexibility in the matter of his accommodation, in the light of his changing needs (for example problems associated with an elderly gentlemen being required to walk up five floors of stairs from his garage to his residence). Further, the will has the effect of binding the Plaintiff and the Defendants in a continuing legal relationship in circumstances where it is apparent that the personal relationship between the Plaintiff and at least the First Defendant is not a particularly harmonious one.

39 I am satisfied that in consequence of the testamentary dispositions of the Deceased the Plaintiff has been left without adequate provision for his proper maintenance.

40 In any event, the assets and liabilities of the estate are such that it is inevitable that the Point Piper unit must be sold, if only to meet the costs of the present proceedings. The Plaintiff now accepts that situation.

41 After provision is made for payment of the debt owing to the Plaintiff and for the costs of the present proceedings and administration expenses of the estate, the distributable estate would appear to be about $662,000.

42 It was submitted on behalf of the Plaintiff that his present needs include the following:

(a) Accommodation.

The Plaintiff desires to live in a home unit in the Eastern Suburbs, where he has resided for most of his life. He has friends in the Eastern Suburbs. His yacht club, the Royal Prince Edward Yacht Club, is located on Point Piper. Thus it is appropriate that any such home unit be located in the Eastern Suburbs (a matter which the Defendants do not dispute), and, further, that any such home unit should have a garage or car space, and should preferably be located on the ground floor (unless there be a lift in the building). The evidence discloses that appropriate one and two bedroom home units are available in the Eastern Suburbs for prices within the range of about $442,000 to about $600,000.


(b) The Plaintiff has credit card debts of a little over $8,000. If he receives from the estate the amount of $12,300 which the Defendant’s acknowledge is due to him, that amount will be sufficient to discharge his credit card debts.

(c) The Plaintiff’s present income, if his invested capital remains intact, is sufficient to meet most of his basic needs, but not to enable him to enhance his frugal lifestyle. He has not sufficient funds to enable him to play golf, watch sporting events, attend the cinema or the theatre. It was submitted on behalf of the Plaintiff that he should receive a capital sum in an amount sufficient to meet the difference between his present income and his likely expenditure, and also to enhance his present somewhat frugal lifestyle, and to meet unexpected contingencies.

43 The Plaintiff does not seek that he should receive the entirety of the estate of the Deceased, to the total exclusion of the First Defendant. It is acknowledged on the part of the Plaintiff that it is appropriate that the First Defendant should receive a sum sufficient to discharge her present debts (including her mortgage debt), being in an amount equivalent to about $83,000 (in Australian currency).

44 It will be appreciated that under the terms of the will of the Deceased the First Defendant would have to await the death of the Plaintiff before she could take any benefit in the estate. In the light of the present age of the First Defendant, it is possible that by time of the death of the Plaintiff the First Defendant herself might also be deceased, and her interest under her will would then pass to her son, Aristides Priakos. If, however, an order for provision is made in favour of the Plaintiff, then the interest of the First Defendant will be accelerated, to the extent that she will receive immediately, rather than upon the death of the Plaintiff, the balance of the estate of the Deceased.

45 However, somewhat curiously, the First Defendant through her Counsel stated that she did not wish her own interest under the will to be accelerated. It was submitted on behalf of the Defendants that the terms of the will of the Deceased should remain undisturbed.

46 As I have already observed, it is inevitable that the Point Piper unit must be sold. The Plaintiff is entitled to security of accommodation in an area in which he has resided for a large part of his adult life, and flexibility to alter that accommodation to meet his changing needs. Further, he is entitled to financial independence from the Defendants, one of whom resides in America.

47 I consider that the Plaintiff is entitled to receive, in lieu of the life interest given to him by the will of the Deceased, a legacy in a sum which will be sufficient to enable him to purchase a home unit in the Eastern Suburbs, to discharge his present debts and to enhance his somewhat frugal lifestyle, as well as to provide a fund to meet unexpected contingencies.

48 In all the circumstances I consider it appropriate that the Plaintiff should receive a legacy in the sum of $600,000. It will be appreciated that certain costs will be associated with the purchase of any such home unit by the Plaintiff. If the value of the net distributable estate be treated as about $662,000, the First Defendant will receive the balance of the estate, being about $62,000. Since she will receive that sum immediately, rather than after the death of the Plaintiff, the First Defendant will be enabled now to discharge most of her present liabilities (which total $65,800).

49 Accordingly, I make the following orders:

(1). I order that, in lieu of the benefits given to him by the will of the late Adreanna Pritchett (“the Deceased”), the Plaintiff receive a legacy in the sum of $600,000, such legacy not to bear interest if paid on or before 11 July 2006, and if not so paid to bear interest at the rates prescribed for unpaid legacies under the Wills, Probate and Administration Act 1898, and that the balance of the estate of the Deceased be held for the First Defendant absolutely.

(2). I order that the costs of Plaintiff on the indemnity basis and the costs of the Defendants on the indemnity basis be paid out of the estate of the Deceased.

(3). The exhibits may be returned.

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