Smythe v Smythe - [2010] SASC 319

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
SMYTHE v SMYTHE & ORS
[2010] SASC 319
Judgment of Judge Lunn a Master of the Supreme Court
18 November 2010
SUCCESSION - FAMILY PROVISION AND MAINTENANCE
Claim under Inheritance (Family Provision) Act 1972 by 67 year-old son of deceased – small estate $227,804 – summary determination under 6R 312(12) and (12A) – plaintiff having health problems and progressive dementia, but no home of his own, superannuation entitlements or other significant assets – award of legacy of $75,000.

SMYTHE v SMYTHE & ORS
[2010] SASC 319
JUDGE LUNN:
Reasons on summary determination of plaintiff’s claim under the Inheritance (Family Provision) Act 1973 (“the Act”)
Family Tree

Olive Constance Smythe (“the deceased”) was born in 1914 and died on 18 April 2009. She was married to Stanford Smythe who died in 2001. There were three children of the marriage, being John Lewis Smythe (“John”), Judith Helen Keizer (“Judith”) and Peter Stanford Smythe, the plaintiff. John has two children who are the fourth and fifth defendants. Judith also had two children who are the second and third defendants. The plaintiff has two children being Fontella Hassing and Zita Pelling. All of the grandchildren of the deceased are now adults.
Background and History
The plaintiff was born on 22 January 1943 and is now 67 years of age. Between 1961 and 1964 he trained and qualified as a school teacher. In 1967 he married his wife (“Jenny”). Between about 1976 and 1979 there was a complete estrangement between the plaintiff and his parents and in that period he had no contact with them. After about 1979 the plaintiff had some limited contact with the deceased, but his wife had none. In the early 1980s he inherited a house from his step-grandmother and from its sale he received about $9,000.
On 21 November 1986 the deceased made a Will in which she left her estate equally between John and Judith, but if any of them predeceased her then that child’s children would receive their parent’s share of the estate. In the Will she gave reasons why she had excluded the plaintiff, which will be mentioned later.
On 8 December 2004, the deceased made a codicil to that Will that John’s children replaced him as the beneficiaries for a half share of the estate, but otherwise the deceased then confirmed the terms of the 1986 Will.
From 1997 until about 2007 the plaintiff lived and worked in Germany. During that time he made several trips back to Adelaide and on all but one such visit he saw the deceased.
The plaintiff’s father died in 2001. The plaintiff received nothing from his estate. In May 2002, the deceased’s home was sold and she went into the Ashman Grove Nursing Home, where she remained for the rest of her life.
In 2005 the plaintiff began to have problems with his memory and cognitive functioning. In that year he inherited $60,000 from the estate of his aunt, Betty Smythe. The deceased also received $60,000 from that estate which she gave to John and Judith.
On 27 September 2008 Judith died. The second and third defendants as her children inherited her estate which was principally a house property.
The deceased died on 18 April 2009. At about this time the plaintiff retired from his profession of school teaching. On 21 September 2009 probate was granted to John over the 1986 will as varied by the 2004 Codicil.
These proceedings
On 19 March 2010 the plaintiff instituted this action seeking provision from the deceased’s estate for himself under the Act. I have conducted a summary determination of the action pursuant to 6R 312(12) and (12A).
The evidence on the summary determination was by affidavits. John and the second and third defendants were cross-examined on their affidavits but it is not necessary to make findings about their evidence. Much of the affidavit evidence went to the nature of the relationship between the plaintiff and his immediate family with the deceased and the other members of the family, and the extent of the plaintiff’s contact with the deceased after 1979. The major issue in this action is the plaintiff’s need for financial support. The nature and extent of the plaintiff’s relationship with the deceased, while relevant, does not have much role in the outcome and does not need to be dealt with to the extent set out in many of the affidavits.
The deceased’s estate
The estate at 30 September 2010 was $227,804. It had been a net estate of $233,592 at the date of death.
The plaintiff’s health
At the age of two the plaintiff had lost the sight in his right eye. In December 2007, he suffered a small heart attack. He has been under regular medical treatment since then and his symptoms are currently stable. There is a chance that his coronary artery disease will progress which will require further, and possibly major, treatment.
Since about 2005 the plaintiff has had symptoms of cognitive impairment. There has been a medical diagnosis of slow progressive dementia. It has now reached a degree where he is unable to work as a teacher or as an author of mathematical textbooks. With the progress of the dementia he may require some extra community support in his home within about the next five to seven years.
Plaintiff’s superannuation
The plaintiff has no superannuation available for his retirement.[1] In about 2001, the plaintiff and his wife embarked on a project through a company Mathematics Publishing Pty Ltd (“the company”) for the plaintiff to write students’ mathematics textbooks and for Jenny to do the administrative work for the company. They put most of their savings, including the $60,000 inherited from Betty Smythe, into this venture. Some books have been published, but the venture has not been a financial success. The plaintiff’s dementia prevents him from now revising the books previously published or writing new books. There is no prospect that either the plaintiff or his wife will receive any income in the future from this company.
[1] What little entitlements the plaintiff and his wife had in superannuation funds have been cashed in in recent times to meet ongoing living expenses.
Plaintiff’s current financial position
The plaintiff and his wife together now receive pensions totalling $1,344 per fortnight. They have not, and are not likely to have in the future, any other source of income.
The plaintiff and his wife own a car worth about $3,500, furniture and personal affects and some shares worth about $461. They do not own a home or any other real property.
As at 20 October the plaintiff and his wife had just over $1,000 in bank accounts, but the balance fluctuates depending upon their receipts of pension payments and the payments of outgoings. They have no other cash reserves.
As at about late September 2010, the plaintiff and his wife together owed about $16,000 on personal loans and credit cards. They are paying rent of $650 per fortnight for the house in which they live. Their average fortnightly expenditure, including rent and repayments on loans and credit cards and health insurance, is $1,932. It was not suggested that any of this expenditure was unnecessary or extravagant. Accordingly, at present the fortnightly expenditure of the plaintiff and his wife exceeds their incomes by almost $600. This has apparently been the position since the plaintiff retired in 2009. If this trend continues, the plaintiff will soon be in significant financial difficulties.
Plaintiff’s relationship with the deceased
Since the total estrangement ceased in about 1979, the plaintiff continued to have some limited contact and communication with the deceased from 1997 to 2009. His ability to see her was restricted by his living in Germany. For some unstated period after he came back from Germany he lived in Berri, which would have also made visits difficult. It was not a harmonious family. There has been considerable animosity between the plaintiff and John. There were tensions between the plaintiff and the deceased over various matters when they did have contact. A major impediment to any ongoing relationship between the plaintiff and the deceased was that Jenny did not have any contact with the deceased and her family, and did not accompany the plaintiff on the occasions on which he did see the deceased. It is not relevant why there was no contact between Jenny and the deceased, but it was not suggested that it was particularly the fault of the plaintiff. The deceased’s comments to other members of her family suggested that she was critical of the plaintiff for not being more involved in her family. John and Judith saw the deceased far more often than did the plaintiff and they provided much more support for her than he did. The plaintiff’s children had some ongoing contact with the deceased. It was not submitted that the plaintiff’s conduct towards the deceased amounted to disentitling misconduct for the purposes of the Act, but rather that the lack of the strength of the relationship should be taken into account in the exercise of the discretions under the Act. There was no suggestion that the plaintiff had in any way contributed to building up the deceased’s assets.
The reasons of the deceased for excluding the plaintiff from her Will were set out in the following paragraph of her 1986 will:
6.I WISH here to record the fact that I have excluded my son PETER STANFORD SMYTHE from any benefit under this my Will for two principal reasons namely:
(a)During the last six (6) or seven (7) years he has failed to act as a son towards myself and his father during that time and particularly during the last five (5) years having persistently failed to contact or communicate with us and he having made it clear by his conduct that he no longer wished to maintain a relationship between us and his family; and
(b)PETER was the only member of our family who benefitted from the Estate of my late step-mother, and I understand that he was the sole beneficiary of her Estate.
The other evidence does not entirely support the assertion in paragraph 6(a). There was communication in that period, but not nearly as much as the deceased wished. The benefit referred to in paragraph 6(b) of the Will was about $9,000 which is to be measured against the value of money in the early 1980s.
By her 2004 Codicil the deceased impliedly confirmed the continuation of paragraph 6(a) and (b) up to that time as the reasons for still excluding the plaintiff from her Will. Between 1986 and 2004 the plaintiff and his daughters did have some limited contact with the deceased. The significance of the plaintiff having benefited from his step-grandmother’s estate had substantially diminished in the period from 1986 to 2004. While this clause of the Will sets out the subjective motivation of the deceased for excluding the plaintiff, this Court has to act on the objective facts established by the evidence which substantially differ from what was stated by the deceased.
Threshold test
It is first necessary in considering the plaintiff’s claim to decide whether on the facts that existed as at the deceased’s death, whether or not she knew of them, and all the eventualities that at that date reasonably might have been foreseen by a testatrix who knew the facts, adequate provision had been made for the proper maintenance and support of the plaintiff in all the circumstances.[2] The defendants disputed that this threshold test was satisfied.
[2] Singer v Berghouse (1994) 181 CLR 201 at 209-10; Hughes v National Trustee (1979) 143 CLR 134..
The plaintiff’s evidence did not specifically address his situation as at the deceased’s death, i.e. 18 April 2009. However, various deductions can be made about it from the evidence which is before the Court. It is unclear whether the plaintiff had retired from teaching by that date, but, if not, it happened shortly afterwards. In any event, as he had then just turned 66, it could have been anticipated in the normal course he would be retiring in the near future. He had had his heart attack in 2007 and the slowly progressing symptoms of his dementia had commenced in 2005. Thus there was a proper basis to infer that he may well not have been able to work for very long after the deceased’s death. The annual accounts for the company as at 30 June 2009 show an operating loss of $3,778. This, combined with the plaintiff’s deteriorating health, strongly suggests that it was unlikely he would obtain any significant economic benefit from the company during his retirement. Hence, if the deceased had known the true facts at the date of her death, and what could be reasonably foreseen from them, she should have realised that the plaintiff had a significant financial need for his ongoing maintenance and advancement in life. Hence the threshold test is satisfied.
Provision to be made for the plaintiff
The second and third defendants adduced evidence of their respective financial positions. Together with their partners they each own their own homes but subject to substantial mortgages. They each have a half interest in Judith’s house which is valued at $380,000. The second defendant had a surplus assets over liabilities of about $255,000 and the third defendant a surplus of about $437,000. However, both were spending virtually the whole of their incomes on ordinary living expenses. Neither had contributed in any material way to the deceased building up her estate.
The fourth and fifth defendants did not adduce evidence of their respective financial positions and so did not submit that they had any needs for their respective maintenance, education or advancement in life which should be met by provision from the deceased’s estate.
In answer to an inquiry which I made after judgment was reserved, the solicitors for the defendants have informed me that the defendants are in agreement that the burden of any award to the plaintiff is to be borne equally by them. Hence, I need not consider out of what parts of the estate any legacy for the plaintiff is to be paid. It is likely that it would have been apportioned to a greater extent against the interests of the fourth and fifth defendants than those of the second and third defendants. In reaching my conclusion I allow for some competing moral claims on the testatrix’s bounty by the second and third defendants, but not any by the fourth and fifth defendants. It is not necessary to quantify my conclusion in this regard.
For the reasons set out, I consider that the deceased as a wise and just testatrix in considering her moral obligation to the plaintiff as her son should have provided for him a legacy of $75,000.
I invite the plaintiff’s solicitors on the adjourned hearing to bring in minutes of order to give effect to these reasons. I will then also hear the parties on costs.