Ray v Greenwell

[2009] NSWSC 952

CITATION:	Ray v Greenwell [2009] NSWSC 952
HEARING DATE(S):	2 April 2009
JUDGMENT DATE :	11 September 2009
JUDGMENT OF:	McLaughlin AsJ
DECISION:	1. I order that one half of the BT investment portfolio held by the late William Robert Greenwell (“the Deceased”) at the time of his death be declared notional estate of the Deceased. 2. I order that, in addition to the benefit given to her by the will of the Deceased, the Plaintiff receive a further legacy, being in the sum of $60,000, to be paid out of the notional estate of the Deceased, such further legacy not to bear interest if paid on or before 11 October 2009, and if not so paid, to bear interest at the rates prescribed by the Probate and Administration Act 1898. 3. I order that the costs of the Plaintiff on the party and party basis (such costs not to exceed $60,000) and the costs of the Defendant on the indemnity basis, be paid out of the notional estate of the Deceased. 4. The exhibits may be returned.
CATCHWORDS:	SUCCESSION - family provision - claim by adult daughter - financial and material circumstances of Plaintiff - whether Plaintiff has been left without adequate provision for her proper maintenance - competing claim of Deceased's widow, who is chief object of his testamentary beneficence - prescribed transaction - designation of notional estate.
LEGISLATION CITED:	Family Provision Act 1982
CATEGORY:	Principal judgment
CASES CITED:	Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 19
PARTIES:	Judith Constance Ray (Plaintiff) Robyn Elizabeth Greenwell (Defendant)
FILE NUMBER(S):	SC 3619 of 2008
COUNSEL:	Mr R. Colquhoun (Plaintiff) Mr I. Davidson (Defendant)
SOLICITORS:	Colquhoun &Colquhoun (Plaintiff) JSM Lawyers (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Friday, 11 September 2009

3619 of 2008 JUDITH CONSTANCE RAY –v- ROBYN ELIZABETH GREENWELL

JUDGMENT

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

2 By summons filed on 7 July 2008 Judith Constance Ray claims an order for provision for her maintenance and advancement in life out of the estate of the her late father William Robert Greenwell (to whom I shall refer as “the Deceased”).

3 The Deceased died on 31 December 2007, aged 85. He left a will dated 16 March 1998, probate whereof was on 14 February 2008 granted to his widow 3, the executor named in such will (who is the Defendant to the present proceedings).

4 The Deceased had been married twice. Of his first marriage was born only one child, the Plaintiff (who was born in 1945, and is now aged 64). The Deceased and his first wife subsequently divorced in 1969. On 26 June 1974 the Deceased married the Defendant (who was born in 1940, and is now aged 68). No children were born to the marriage of the Deceased and the Defendant.

5 The inventory of property discloses the following assets owned solely by the Deceased,

Real estate
7 Grosvenor Street Kensington,
having an estimated value of $1,200,000
Money at bank
Westpac bank account $7,500

6 In addition the inventory of property discloses the following property owned by the Deceased as tenant in common in equal shares,

Units in trust
Shares in a managed share portfolio fund $150,000

7 In her evidence in the present proceedings the Defendant stated that the foregoing shares were incorrectly described, and that the correct situation was that those shares were held by the Deceased and the Defendant as joint tenants, with the consequence that, upon the death of the Deceased, they passed to the Plaintiff by survivorship.

8 By his will the Deceased gave a legacy of $10,000 to the Plaintiff, and the residue of this estate to the Defendant. That legacy was paid before the institution of the present proceedings. The evidence did not disclose how the Plaintiff had dealt with that benefit.

9 In calculating the value of the estate available for distribution, the costs of the present proceedings must be taken into consideration, since the Plaintiff, if successful, will normally be entitled to an order that her costs be paid out of the estate of the Deceased, whilst the Defendant, irrespective of the outcome of the proceedings, will normally be entitled to an order that her costs be paid out of the estate.

10 It was estimated on behalf of the Plaintiff that her costs will total about $60,000, whilst it was estimated on behalf of the Defendant that her costs will total about $45,500. However, each of those estimations was calculated upon the basis that the hearing would occupy two days. In the event, the hearing occupied only one day. Accordingly, each of the foregoing estimations should be significantly reduced.

11 It will be appreciated that (apart from the house property and apart from the amount of $7500 held by the Deceased in a bank account) there are no actual assets in the estate available to meet the foregoing costs (or, indeed, to meet any order for provision that might be made in favour of the Plaintiff). Unless the house property be sold, the Plaintiff, if otherwise entitled to an order in her favour, must establish that the provisions of the Family Provision Act relating to notional estate should be brought into operation.

12 The Plaintiff married her husband, William Ray, in July 1966. They have two adult children, neither of whom is dependent upon them.

13 The Plaintiff, who has suffered from various health problems, was employed as a hairdresser until 1970. She gave up that employment when she was pregnant with her first child, and has not been in the workforce since that time. Her health problems include a number of physical and psychological ailments. The physical ailments include a thyroid condition (for which she takes two separate medications); high blood pressure and high cholesterol (for which she takes medication); gastric reflux (for which she takes medication); various fractures and surgical procedures.

14 The Plaintiff has suffered a number of what were described in her affidavit as “nervous breakdowns”, for which she has been consulting a psychiatrist, and receives medication. Dr C H Greenway, psychiatrist, stated that he had been treating her for a “schizophrenic illness”. On at least one occasion, in 1974, the Plaintiff was admitted to a psychiatric ward. Dr Greenway considered that her prognosis for improvement was poor, but also did not believe that there would be a marked deterioration in the Plaintiff’s condition.

15 The Plaintiff has no prospects of obtaining any independent employment. On a number of occasions the Plaintiff has embarked upon what she described in her affidavit as “business interests”, in the nature of photography, jewellery making and lapidary. She said that the main purpose of those activities has been to give to her and her husband both an interest and a distraction, rather than to generate any significant income. The Plaintiff said that none of those interests have been profitable enterprises, but that she and her husband had expanded their social contacts, and that those interests have constituted a significant part of her ongoing therapy.

16 The Plaintiff’s husband ceased work in 2006, when he was retrenched from his employment with NRMA. Since that time he has been the Plaintiff’s carer and has been in receipt of a carer’s pension.

17 The Plaintiff and her husband have the following assets:

House property situate at and known as
48 Wattle Street, Haberfield, (estimated value) $550,000
Household contents, having an estimated value of $15,000
1997 Toyota motor vehicle, having an estimated value of $4,500
Husband’s superannuation entitlement

18 In her affidavit of 1 July 2008 an estimated value of $275,000 was ascribed to the superannuation entitlement of the Plaintiff’s husband. However, during the course of the hearing (and no earlier) it was asserted by the Plaintiff that that value had fallen to about $83,000. The evidence in support of that assertion and the evidence concerning the present value of the superannuation entitlement of the Plaintiff’s husband was far from satisfactory.

19 There is a mortgage debt presently outstanding upon the Wattle Street property, in an estimated amount of $90,000. The Plaintiff and her husband owe $10,000 on a credit card.

20 According to the Plaintiff, the Wattle Street property (which was described as being a 70 year old semi-detached house, having no garage) is in need of substantial repairs and refurbishment (of which she provided details, together with quotations totalling $56,174).

21 The Plaintiff is in receipt of an invalid pension and her husband receives a carer’s pension in an equivalent amount. Their combined incomes presently total $1,120 a fortnight (that figure including $100 a fortnight by way of pharmaceutical allowance). Apart from those pensions, the only other source of income of the Plaintiff and her husband consists of withdrawals which they make from her husband’s superannuation fund.

22 It was the Plaintiff’s evidence that over the past four years those withdrawals have, on average, amounted to about $21,000 a year. Those amounts have been used primarily in payment of day to day living expenses, but also in attempts to start up the various small business ventures to which I have already made reference.

23 The Plaintiff gave evidence of the outgoings of herself and her husband, totalling about $1,427.50 a fortnight.

24 Although the Plaintiff said that she had a close and loving relationship with the Deceased, it was quite apparent that she had little contact with him at least from the time of her marriage, and that much of that contact was by telephone rather than in person. The Deceased appears not to have approved of the Plaintiff’s husband, who was not welcome at the residence of the Deceased. However, the Deceased had a good relationship with the Plaintiff’s children.

25 The claim of the Plaintiff must be approached in the light of the competing claim of his widow, the Defendant, who is the chief object of his testamentary beneficence.

26 The Deceased in late 1973 raised a mortgage upon his house property at 7 Grosvenor Street, Kensington, in order to buy out for $10,833 the one third interest therein of his former wife (from whom he had been divorced some four years earlier).

27 Until the early 1980s the Deceased and Defendant conducted a printing business, W and R Printing, first at their Kensington residence, and later at a small factory which they rented at Rosebery. They both worked full-time in that business, and the Defendant did not receive any payment or wages for her work. Throughout their marriage it was the Deceased who had the primary responsibility for managing their financial affairs.

28 At the time of their marriage the Defendant was aged 34, and the Deceased was aged about 51. They had been acquainted for about eight years before their marriage. Upon their marriage the Defendant moved into the Kensington property, of which the Deceased was the sole registered proprietor. That property remained their matrimonial home until the death of the Deceased more than 33 years later. The Defendant continues to reside in that property.

29 The Deceased suffered a cerebral haemorrhage in 1990. From that time he developed a physical incapacity, which affected his left side, and he needed to use a walking stick. In addition, he developed epilepsy, for which he required constant medication. From 1990 until June 2007 (when he was admitted to hospital, before moving to a nursing home in December of that year, shortly before his death) the Defendant was able to care for the Deceased in their Kensington residence. During that period, and especially after 2004 (when he suffered another cerebral haemorrhage), the Deceased was almost totally dependent upon the Defendant. She attended to his washing and his personal hygiene, ensured that he took all his medications, prepared his meals, took him to all medical appointments and to hospital, as well as attending to all household tasks, cleaning and shopping.

30 The Defendant has no assets other than her entitlement under the will of the Deceased. At the hearing it was noted that it was agreed between the parties that the present value of the Kensington property was $1,150,000. The Defendant does not receive any kind of pension. She has no source of income, apart from the liquid assets of the estate.

31 The current total value of the BT investment portfolio and the Defendant’s cheque account (into which she transferred funds from that investment portfolio on 2 January 2009) is $249,747, being comprised of $136,467 (BT investment portfolio) and $113,279 (cheque account).

32 The Defendant, although in reasonable health, suffers from high blood pressure, for which she takes medication. She also has a problem of high pressure in her eye, which requires to be monitored by an eye specialist every six months. The Defendant does not have any superannuation.

33 The Defendant stated that she wished to continue to reside in the Kensington house, where she has lived for more than 33 years, and where she is acquainted with most of her neighbours. Through her unpaid work in the printing business with the Deceased the Defendant contributed to the mortgage payments on the property and to the cost of the renovations which down the years were effected by herself and the Deceased to the Kensington residence. (Those renovations included alterations and additions costing $7900 in 1977 and a new kitchen costing in excess of $6112 in 1981.) The Defendant is familiar with the locality and with transport to and from the Kensington area.

34 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.

35 I have had the benefit of receiving written outlines of submissions and a chronology from Counsel for the respective parties. Those documents will be retained in the Court file.

36 The Plaintiff as a daughter of the Deceased is an eligible person within paragraph (b) of the definition of that phrase contained in section 6 (1) of the Family Provision Act. As such she has the standing to bring the present proceedings.

37 The Defendant, as the widow of the Deceased, is also an eligible person, being such within paragraph (a) of the foregoing definition. The plaintiff and the Defendant are the only eligible persons in relation to the Deceased.

38 In carrying out the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208 – 210 (the correctness of which test was affirmed by the High Court in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191) the Court must determine whether in consequence of the provisions of the will of a testator the applicant has been left without adequate provision for his or her proper maintenance.

39 The High Court in Singer v Berghouse (at 209 – 210) said that the determination of the first stage

calls for an assessment of whether the provision (if any) made was inadequate for 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.

40 In the instant case the Court is constrained by the fact that the chief asset in the estate of the Deceased is the house property which has been the residence of the Defendant for the past 33 years. The contributions of the Defendant, in working without remuneration in partnership with the Deceased, from the time of their marriage until the early 1980s, constituted a significant factor in enabling the mortgage debt to be paid and in enabling the renovations and refurbishments of the Kensington property to be affected.

41 I recognise that the Plaintiff and her husband are not in affluent financial circumstances. The Plaintiff’s mental and physical health problems will preclude her from ever resuming remunerative employment. Her husband is her full-time carer. They have no way in which they can improve their financial and material situation. I am satisfied that the Plaintiff has been left without adequate provision for her proper maintenance.

42 It is not necessary in the circumstances of this case to embark upon a detailed consideration of questions of fault, concerning what might be described as a degree of estrangement which, at least in his latter years, existed between the Plaintiff and her father. Nevertheless, I consider that, had the Plaintiff so desired, she could have had closer and more frequent contact with the Deceased.

43 It was submitted on behalf of the Plaintiff that it was appropriate that the Kensington property should be sold and that the Defendant then acquire other, and less expensive, accommodation. The balance would then be available to meet any order for provision to which the Plaintiff might establish an entitlement.

44 The Plaintiff and her husband own their residence (although subject to an interest only mortgage). By the terms of the will the Defendant will own her residence (which is unencumbered).

45 I do not consider that any order for provision in favour of the Plaintiff should have the consequence that the Defendant should be deprived of residence in the property which has been her home for the past 33 years, and towards the discharge of the mortgage whereon and towards the repairs and refurbishments whereof she has personally made significant contributions; or that the Defendant should be required to move into less expensive accommodation in some other locality, in which she does not wish to reside.

46 Accordingly, any provision an entitlement to which the Plaintiff might otherwise have established should be made only out of notional estate of the Deceased.

47 The omission of the Deceased to sever the joint tenancy in respect to the managed share portfolio fund during his lifetime would have the consequence that it is possible that an amount of one half of that fund, being about $125,000, could be designated notional estate of the Deceased.

48 In all the circumstances of this case, especially the practical constraints resulting from the chief asset being the residence of the Defendant (with which, contrary to the submission, of the Plaintiff there should in my conclusion be no interference), I consider that the Plaintiff should, in addition to the $10,000 which she has already received from the estate of the Deceased, receive another, relatively small, legacy, which will, together with the legacy of $10,000, enable her to attend to the pressing needs for refurbishment and repairs to her family home, or provide a fund to meet unexpected contingencies.

49 I consider that an appropriate amount is $60,000. The costs of the Plaintiff should not exceed that amount.

50 I make the following orders,

1. I order that one half of the BT investment portfolio held by the late William Robert Greenwell (“the Deceased”) at the time of his death be declared notional estate of the Deceased.

2. I order that, in addition to the benefit given to her by the will of the Deceased, the Plaintiff receive a further legacy, being in the sum of $60,000, to be paid out of the notional estate of the Deceased, such further legacy not to bear interest if paid on or before 11 October 2009, and if not so paid, to bear interest at the rates prescribed by the Probate and Administration Act 1898.

3. I order that the costs of the Plaintiff on the party and party basis (such costs not to exceed $60,000) and the costs of the Defendant on the indemnity basis, be paid out of the notional estate of the Deceased.

4. The exhibits may be returned.

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