Thierry v Predny

[2023] NSWSC 1075

Supreme Court

New South Wales

Medium Neutral Citation:

Thierry v Predny [2023] NSWSC 1075

Hearing dates:

6 September 2023

Date of orders:

6 September 2023

Decision date:

06 September 2023

Jurisdiction:

Equity - Succession & Probate List - Family Provision

Before:

Hammerschlag CJ in Eq

Decision:

Family provision order made and judgment for cross-claimant. See [23]-[24]

Catchwords:

SUCCESSION – FAMILY PROVISION – Succession Act 2006 (NSW) ss 59, 60, 80, 83 – application for family provision order by daughter of the deceased – where the deceased left the residue of her estate in equal shares to her son and her daughter – where shortly before her death her home was sold for $620,000 of which $300,000 was paid to her son and where on the date of and after her death her son illicitly withdrew $44,325.46 from her bank accounts – where the daughter has no assets of any value apart from a motor vehicle and has disabilities – HELD – monies paid to the son should be designated notional estate – provision for the daughter is inadequate – provision for the daughter’s maintenance and advancement in life should be made to the extent that her half share of what is left in the estate falls short of what she would have received had the described transactions not occurred

Legislation Cited:

Succession Act 2006 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40

Category:

Principal judgment

Parties:

Rebecca Morva Thierry (Plaintiff)
David Milan Predny (First Defendant / Cross-Claimant)
Robert Frances Grainger (Second Defendant / Cross-Defendant)

Representation:

Counsel:
V Hartstein (Plaintiff)
A Hill (First Defendant / Cross-Claimant)

File Number(s):

2023/00112053

EX TEMPORE JUDGMENT (REVISED)

1. This is an application by the plaintiff, Rebecca Morva Thierry (to whom I shall refer as Rebecca, with no disrespect intended), for an order that provision be made for her maintenance and advancement in life pursuant to s 59 of the Succession Act 2006 (NSW) (the Act)[1] out of the estate and/or notional estate of her late mother, Catherine Margaret Thierry (the deceased) who died on 11 April 2022, aged 65, leaving property in this State. Rebecca is 35 years old. References below are to sections of the Act.

   1. That section provides that the Court may make a family provision order in relation to the estate of a deceased’s person if the Court is satisfied that the person in whose favour that the order is to be made is an “eligible person” (which, as the deceased’s daughter, Rebecca is) and at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both. The matters to which the Court may have regard are set out in s 60(2) of the Act. Those factors include any physical, intellectual or mental disability of the applicant, any provision made for the applicant by the deceased and any evidence of the testamentary intentions of the deceased.

2. On 14 December 2009, the deceased made a Will (the Will) by which she appointed Rebecca and the deceased’s solicitor, David Milan Predny (the solicitor), respectively as the executrix and executor of the Will and under which she bequeathed the residue of her estate to such of her children, that is Rebecca and the deceased’s son, Robert Frances Grainger (to whom I shall refer as Robert, also with no disrespect intended), as survived her. Both of them survived her. Probate of the Will was granted on 30 January 2023.

3. The deceased was widowed in 2008 and did not remarry.

4. The deceased owned a house at 4 Thornbill Drive, Bonnells Bay NSW, which she sold on 24 January 2022 (only some two and a half months before she died) for a sale price for $620,000. Of the proceeds of sale, $300,000 was paid to Robert and $250,106 was used to buy a relocatable home in a retirement village at Morisset, NSW. After deduction of expenses, there was a balance of the proceeds of sale of $21,205.

5. At the date of her death, the deceased had funds on deposit with IMB Bank of $44,518 and with the Commonwealth Bank of $396. She had a funeral insurance plan with cover of $7,000.

6. After her death, the relocatable home was sold, realising net proceeds of $232,695, which were paid into the solicitor’s trust account.

7. The evidence reveals that on the date of the deceased’s death Robert removed $4,999 from her IMB bank account, bringing the balance to $39,519.69. Thereafter, Robert made multiple withdrawals, totalling $39,326. Robert accordingly withdrew a total of $44,325 from the deceased’s bank account. I find that he did this without lawful authority.

8. Robert made a claim on the deceased’s funeral insurance policy and was paid $6,953, which he did not devote to her funeral costs, which were borne by the estate. After repeated requests, he paid this amount into the solicitor’s trust account.

9. By First Cross-Claim filed on 28 April 2023, the solicitor (on behalf of the estate) claims a declaration that, between 12 April and 7 May 2022, Robert took $44,325 from the deceased’s bank account. The solicitor seeks an order that Robert pay it into the solicitor’s trust account (for the benefit of the estate). From what I was informed from the bar table, the prospects of recovery may be slim.

10. By Amended Summons filed 8 May 2023, Robert was joined as second defendant to Rebecca’s claim. There is an Affidavit of Service of the process and other documents on Robert, which is less than satisfactory. The Amended Summons and First Cross-Claim were, on 24 May 2023, delivered to premises in Newcastle, where Robert apparently rented a room. They were handed to a person who identified himself as renting the room to Robert. However, the evidence shows that thereafter there was an extensive exchange of emails between Robert and counsel for Rebecca concerning, amongst others, a settlement conference ordered on 30 June 2023 by Hallen J to be held. Robert attended the conference in Rebecca’s counsel’s chambers by video link. I think it can safely be inferred that the service upon him was practically effective. But in any event, I consider that the steps that were taken to bring the processes to Robert’s notice are sufficient to warrant that they be taken to have been served on him, even if those steps did not accord with the terms of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). [2]

    2. Rules 10.14(3)-(4) of the UCPR provides:

11. The amount currently held in the solicitor’s trust account (representing the value of the estate, excluding the monies illicitly removed by Robert) is $217,845.

12. Section 80(1) provides that the Court may make a notional estate order designating property specified in the order as notional estate of a deceased if the Court is satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which the section applies. Sections 80(2)(b) and (c) provide that s 80 applies to the following relevant property transactions:

(b)     a transaction that took effect within one year before the date of the death of the deceased person and was entered into when the deceased person had a moral obligation to make adequate provision, by will or otherwise, for the proper maintenance, education or advancement in life of any person who is entitled to apply for a family provision order which was substantially greater than any moral obligation of the deceased person to enter into the transaction,

(c)    a transaction that took effect or is to take effect on or after the deceased person’s death.

13. Section 80(3)(a) provides that:

Property may be designated as notional estate by a notional estate order under this section if it is property that is held by, or on trust for—

(a)     a person by whom property became held (whether or not as trustee) as the result of a relevant property transaction, …

14. I move now to the question which constitutes the initial stage of the two-stage process upon which the Court must embark in determining whether a family provision order should be made, as mandated by the High Court amongst others in Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40, namely, whether in all the circumstances adequate provision has been made for Rebecca.

15. Rebecca’s sole asset of value is a Toyota motor vehicle worth about $16,000. She is on a Disability Support Pension of $790 per fortnight. She works from time to time at The Entrance Historic Carousel theme park. Her partner, Anthony Evers, is also on a Disability Support Pension. Her evidence is that they pay rent of $510 per fortnight and cannot save anything. Her evidence is that she has an intellectual disability and a minor speech impediment.

16. Rebecca gave evidence that, in 2009, when the deceased was making the Will she told Rebecca that her and Robert would each get half of her estate. This is reflected in the Will. The circumstances of the transfer of the $300,000 from the proceeds of the house to Robert are not revealed. However, it is plain that when the transfer occurred the moral obligation of the deceased to make adequate provision for the proper maintenance and advancement in life of Rebecca was substantially greater than any moral obligation she may have had to give that money to Robert (if in fact she gave it to him). In the circumstances, the payment of this money to Robert was a relevant property transaction to which s 80 applies. The monies removed by Robert from the deceased’s bank accounts are also a relevant property transaction. They were withdrawn on or after the death of the deceased.

17. The relevant property transactions have a total value of $344,325. Had they not occurred, the estate would now have a value of $562,170 of which Rebecca would be entitled to receive $281,085. Plainly Rebecca was disadvantaged by these transactions because, as things presently stand, her half share of what remains, before deduction of costs, is $108,922. [3] This falls short of what would have been her half share by $172,163.

    3. See s 83.

18. In all the circumstances, it cannot be gainsaid that the provision for Rebecca at this time is inadequate, having regard to her financial resources, prospects, disabilities and the express testamentary intentions of the deceased.

19. I turn then to the second stage mandated by the High Court, namely, what provision ought to be made out of the deceased's estate for Rebecca.

20. In my view, there should be provision to the extent that Rebecca’s half share of what is left in the estate falls short of what her half share would have been had Robert not received or taken the monies earlier described. This exceeds the total of what is left. She is accordingly entitled to all of what is left (after deducting legitimate expenses). She would also be entitled to the entirety of any of the monies removed from the deceased’s bank account by Robert if any were to be recovered, although I would, as expressed to counsel for the solicitor during the course of the hearing, tread carefully about spending money on that quest.

21. The solicitor moves by the First Cross-Claim for an order that Robert pay $44,325.46 into the solicitor’s trust account together with interest. I do not consider that an order in those terms is appropriately to be made. But I do consider that there should be judgment against Robert in favour of the solicitor (in his capacity as executor) for $44,325.46.

22. I note that Robert was called outside Court three times and did not appear. I am satisfied that he was given due notice of this hearing.

23. The Court makes the following orders:

1. Pursuant to r 10.14(3) of the Uniform Civil Procedure Rules 2005 (NSW), the Amended Summons and First Cross-Claim are taken as served on the second defendant/cross-defendant on 24 May 2023.

2. Judgment for the first defendant / cross-claimant on the First Cross-Claim against the second defendant / cross-defendant for $44,325.46.

24. The Court proceeded to make further orders in a document entitled “Short Minutes of Order” proffered by counsel for Rebecca (and not opposed by counsel for the solicitor), which have been initialled by his Honour, dated today’s date, stamped with the Court’s seal and placed with the papers. The terms of those orders are:

SHORT MINUTES OF ORDER

1. Orders that, pursuant to s 59 of the Succession Act 2006, provision in the sum of $281,000 be paid from the estate and notional estate of the late Catherine Thierry to the plaintiff.

2. Orders that, pursuant to s 80(1) of the Succession Act 2006, the sums of:

1. $300,000 paid to the second defendant out of the proceeds of sale of the deceased’s property at 4 Thornbill Drive, Bonnells Bay

2. $44,325.46 taken by the second defendant from the account of the deceased

be designated as notional estate.

3. Orders that the plaintiff’s costs in the sum of $10,340 be paid out of the estate.

4. Orders that the first defendant’s costs in the sum of $30,000 be paid out of the estate.

5. Note the plaintiff’s application was brought in time.

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Endnotes

(3) If steps have been taken, otherwise than under an order under this rule, for the purpose of bringing the document to the notice of the person concerned, the court may, by order, direct that the document be taken to have been served on that person on a date specified in the order.

…

(4) Service in accordance with this rule is taken to constitute personal service.

Decision last updated: 07 September 2023