Barnes v May [2007] NSWSC 1432 | Case summary

1324 of 2006 STEVEN ROY BARNES and ANOR -v- KARYN GAI MAY JUDGMENT 1 HIS HONOUR: These are proceedings under the Family Provision Act 1982. 2 The proceedings were instituted by summons filed on 7 February 2006. There was only one Plaintiff named in that summons, being Steven Roy Barnes. Subsequently, an amended summons was filed (being entitled "First Amended Summons") on 18 May 2006. That amended summons named as Plaintiffs both Steven Roy Barnes and Janice Brandon-Cramer. By that amended summons the Plaintiffs seek substantively an order for provision for their maintenance and advancement in life out of the estate and notional estate of the late Leonard Adrian Towers (to whom I shall refer as "the Deceased"). The Deceased died on 7 December 2005, aged 74. He left a will dated 6 October 2005, probate whereof was on 10 March 2006 granted to Karyn Gai May, the executor named in such will (who is the Defendant to the present proceedings). 3 The Deceased had been married twice. Of his first marriage, to Patricia Caroline (née Reynolds), was born only one child, the Defendant, on 14 May 1954. She is now aged 53 years. 4 The Deceased's first wife died on 3 May 1961. Subsequently, in December 1963, the Deceased married Mrs Paula Barnes, who was at that time a divorced lady with two children, being the two Plaintiffs. The Second Plaintiff, Janice (Mrs Brandon-Cramer) was born on 21 May 1947, and is presently aged 60 years. The First Plaintiff, Steven Roy, was born on 22 February 1949, and is presently aged 58 years. 5 At the time of his death the Deceased had again been widowed, Mrs Paula Barnes (the mother of the Plaintiffs) having died on 9 April 2000 (leaving to the Deceased the entirety of her estate, of a value which did not emerge from the evidence). 6 The inventory of property of the Deceased disclosed the following assets, together with the respective values attributed thereto: House property situate at and known as 11 Malabar Road, South Coogee (estimated) $1,000,000 Moneys in bank accounts, totalling $129,668 Shares in AMP (estimated) $2,434 7 The house property at South Coogee was sold by auction on 19 August 2006 for $800,000 (an amount considerably less than the estimated value of $1,000,000 disclosed in the inventory of property). On settlement, after payment of expenses and outgoings, the net proceeds of sale amounted to $780,957. 8 The moneys in bank accounts have been collected by the Defendant (in an amount of $130,717) together with an AMP dividend and an HCF refund of death benefit (totalling $1,584). After allowance is made for probate expenses of $9,644 and general administration expenses of the estate of $1,951 (totalling $11,595) the net value of the estate is of the order of $900,000. To meet the foregoing expenses the Defendant has contributed a sum of $2040, which sum has not yet be reimbursed to her. 9 In calculating the value of the estate available for distribution the costs of the present proceedings must be taken into consideration, since the Plaintiffs, if successful, will be entitled to receive their costs out of the estate, whilst the Defendant, irrespective of the outcome of the proceedings will be entitled to receive her costs out of the estate. It has been estimated on behalf of the Plaintiffs that their costs will total about $71,500 whilst it has been estimated on behalf of the Defendant that her costs will total $93,500 (of which an amount of about $66,300 has already been paid). 10 I would here observe that for a claim that was in no way out of the ordinary and the hearing of which occupied less than two days, I consider costs totalling about $165,000 to be grossly excessive. Doubtless, they will be significantly reduced upon assessment. 11 Regarding the costs, especially those of the Plaintiffs, I would here also observe that a very considerable quantity of the affidavit evidence filed on behalf of the Plaintiffs (much of which was objected to and ultimately either was not read or was rejected) seemed to be being directed to whether the Defendant should have received any benefit under the will of the Deceased. As the chief chosen object of the testamentary beneficence of the Deceased, the Defendant does not need to prove anything. The claims of the Plaintiffs must be established upon their own merits. Their claims cannot be enhanced by establishing (if such be the case) that the Defendant, the chief chosen object of the testamentary beneficence of the Deceased, if she had been omitted from her father's will, would not have succeeded in a claim under the Family Provision Act. 12 Accordingly, it is appropriate, upon my calculation, based upon the foregoing figures, to proceed up on the basis that the value of the distributable estate will be of the order of $800,000 (perhaps a little more). However, in this regard I note that in his written submissions Senior Counsel for the Plaintiff calculated that, after taking account of the foregoing totality of costs, an amount of $736,600 remained, whilst Counsel for the Defendant in his written submissions calculated the foregoing amount as being $834,000. At the outset of the hearing Counsel for both parties appeared to adopt a figure of about $900,000 as the appropriate present value of the distributable estate. However, the solicitor for the Defendant gave evidence that the estate presently holds an amount of $711,257 in a controlled money account with the St. George Bank. 13 The Defendant has made an interim distribution of $50,000 to each of herself and the two Plaintiffs. The date of that interim distribution did not emerge from the evidence. None of the foregoing figures to which I have referred as being the value of the distributable estate takes into account the interim distributions totalling $150,000. Further, it will be appreciated that under the terms of the will each of the Plaintiffs is entitled to a further sum of $50,000, thus reducing the value of the estate available to meet any order for provision by a total of $200,000. 14 By his will the Deceased gave to the Defendant all moneys in banks or other financial institutions, and shares held by him. He gave the residue of his estate on trust to pay his debts, funeral and testamentary expenses, and to provide the sum of $100,000 for each of the Plaintiffs, with the balance of the residue being given to the Defendant. 15 I shall for convenience, and without intending any disrespect, refer to each of the two Plaintiffs and to the Defendant by their first given names. 16 Steven (who was born on 22 February 1949, and is presently aged 58) is married and has two adult children, Tara (born in 1980, who is now aged about 27) and Erin (born in 1981, who is now aged about 26). Steven was aged 15 when he came to live in the residence of the Deceased at South Coogee. He remained there until he was aged 18, a period of barely three years. He then left the family home and moved into rented accommodation with his sister Janice. 17 Steven did not have a good relationship with the Deceased. It was Steven's wife Marion (whom he married in 1972), rather than Steven himself, who maintained contact with the Deceased. Steven said that he did not like the Deceased, and that attitude was reflected in his level of contact with his stepfather. Apart from some building work, in which Steven overstated his contribution, he did not refer to any matter whereby he contributed to the acquisition, conservation or improvement of the Deceased's property. Neither did Steven contribute to the Deceased's welfare. 18 Steven and his wife until recent times owned a house property at Holden Street, Maroubra. That property was purchased in August 1998 for $665,000. It was purchased by Steven and Marion conjointly with Marion's brother (who acquired a one fifth share therein). Upon the death of Marion's brother some sixteen months later, his entire estate passed to Marion, and in consequence Steven and Marion became the sole owners of the Holden Street property. They sold that property on 1 June 2004 for $1,825,000. In his first affidavit Steven referred to the fact that he was looking for a new residence. At that stage he and his family were residing in rented accommodation at Mascot, consisting of a five bedroom residence. Since December 2006 they have been residing in rented accommodation at Ashbury, for which they pay $350 a week rent. 19 The mortgage indebtedness upon the Holden Street residence was in a total sum of about $475,00. The equity of Steven and Marion in that property was $1,350,000. 20 At the present time Steven and his wife hold in their joint bank account an amount of $853,537, that amount representing the present balance of the net proceeds of sale of the Holden Street property. Steven's other assets consist of an ANZ savings account ($5400), furniture and furnishings (to which an estimated value of about $85,000 was attributed) and three motor vehicles (to which a total estimated value of $96,300 was attributed. 21 In addition, Steven referred to superannuation entitlements of himself in a total amount of $25,320 and of his wife Marion in an amount of $17,744. 22 Steven maintains contact with his father (who has no children apart from the Plaintiffs), and has expectations from his estate. 23 Steven has no liabilities. 24 Steven is a painter and decorator by occupation. However, he has not worked full-time in that occupation since 2005, that reduction in work being due, according to his evidence, to physical limitations resulting from an injury at work. He estimated that in the current financial year his net earnings would be about $18,000. Marion is employed as an office manager and receives an estimated net income of $30,000. Steven gave evidence of the current outgoings of himself and his wife, in a total amount estimated to be about $83,000 a year. Those outgoings included rent of $18,200 a year and storage fees of $7,836 a year. 25 In June 2004 an amount of about $1,172,000 was paid by Steven and his wife into an ING Savings Maximiser account. Some attempt was made to explain the difference of $178,000 between that amount and the net proceeds of sale of the Holden Street property, by reference to credit card indebtednesses of $25,000 and $10,000. However, a substantial part of the net proceeds of sale of the house property has remained unaccounted for, Steven saying "I have no idea" and "I have no memory of where it went or what it is". Under cross-examination Steven was asked concerning various subsequent withdrawals from the ING account. He was unable to offer any explanation whatsoever as to how those withdrawals were expended. 26 In the period from 1 October 2005 to 5 March 2007 (a period of about 17 months) withdrawals totalling almost $400,000 were made from the foregoing ING Savings Maximiser account. It would appear from the evidence that Steven and his wife made a deliberate choice to spend money by way of holidays and the purchase of motor vehicles. Although Steven referred to health expenses, no details were given in that regard in his first affidavit. The scuba diving holiday in which he indulged with a friend in March 2006 and a skiing holiday at Perisher some nine months earlier would seem to be inconsistent with him suffering any serious health problems. 27 Among the various areas of need asserted by Steven were the education expenses by way of university fees for his daughter Erin. No details were furnished in this regard, and it should be observed that Erin is now aged about 26. Another area of need asserted by Steven was the fact that his younger daughter Tara intends to marry in late 2008. However, there was no satisfactory evidence of costs associated with her wedding. Neither was there any evidence from Tara herself about her own resources or those of her intended husband and his family in regard to the cost of their nuptials. 28 Although Steven and his wife have been content to reside in rented accommodation for more than three years since the sale of their Holden Street residence, nevertheless the purchase of a new residence in the Eastern Suburbs was among the various needs asserted by Steven. He estimated that suitable accommodation for himself, his wife and their two daughters (despite the fact that one of those daughters is to marry in 2008), would cost between $1,000,000 and $2,000,000. He provided real estate brochures relating to properties of the standard which he would wish to acquire in his desired area of Maroubra/Coogee/Randwick. 29 In his affidavit evidence Steven estimated the value of the contents of his house property to be $85,000. Nevertheless, even before the sale of the Holden Street property he had insured the contents in September 2003 (and had continued to insure them to the present time) for $314,650. 30 Steven's wife Marion gave evidence that she was responsible for the family finances and banking. She gave details of the lifestyle of Steven and herself, which has included, since the sale of the Holden Street property, a number of overseas holidays. In 2004 Steven and Marion went to Hong Kong, Thailand and Singapore, their daughters joining them in Thailand for about two weeks. Marion was unaware of the total cost of that holiday, but ventured that it might be "in the twenties" (by which I understood her to mean that it would have cost between $20,000 and $30,000). The Plaintiff went to Truk, in the Pacific Ocean, with a friend on a scuba diving holiday in March 2006 (costing $14,000). Steven and Marion went on a holiday to Asia and the Middle-East in late 2006 or early 2007 (costing between $45,000 and $50,000). Thus, in a period of two years they expended no less than about $80,000 on overseas travel. 31 It has been the practice of Steven and Marion to go away for a weekend holiday at least once every three months, to a destination described by Marion as being "somewhere really nice". 32 Marion referred to jewellery purchased for her in Hong Kong, which included a necklace and earrings for $10,000, as well as little pendants for their daughters, costing about $2600. 33 Marion gave evidence concerning the house property at Holden Street, Maroubra, which appears to have been a most commodious residence, the accommodation wherein included at least five (if not six) bedchambers (two with ensuite bathrooms), as well as such additional facilities as a gymnasium, an office, a two car garage, a separate laundry, a large walk-in pantry, and various formal and informal eating and entertaining areas. All the bathrooms in the residence were constructed of marble. 34 In July 2005 Steven had gone on a skiing holiday to Perisher. As I have already observed he had enjoyed a scuba diving holiday to Truk in the Pacific Ocean some nine months later. His activities on those holidays refute the physical disabilities for which Steven asserted a need to be met from the estate of the Deceased. 35 Under cross-examination Steven agreed that he and his wife had made a conscious decision to enjoy their life, and to have a certain lifestyle, which he agreed was a very comfortable lifestyle. They have quite obviously fulfilled that decision, and they do indeed enjoy a very comfortable lifestyle. 36 Janice was born on 21 May 1947, and is now aged 60. She has been married three times. Her first marriage, to Roger Wells, terminated in divorce. Her second marriage was to Ronald Dean, who died in October 1978. There are two children of that marriage, namely Joel (born in March 1975, who is now aged 32), and Teneil (born in February 1978, who is now aged 29). 37 Janice's third marriage, to Christopher Brandon-Cramer terminated in divorce in 1992. There are two children of that marriage, namely Cameron (born in March 1982, who is now aged 25) and Courtney (born in July 1984 who is now aged 23). 38 Janice was aged 17 when the Deceased and her mother moved into the South Coogee residence. At that stage she had already left school and was in employment, and had met her future first husband, Roger Wells. He had plans to go overseas, and Janice departed for the United Kingdom as soon as she attained the age of 18 in May 1965. 39 Although the evidence was not entirely precise on this point, it would appear that Janice was in residence at the South Coogee property for barely one year. She left for overseas on her eighteenth birthday, and on her return resided in rented accommodation with Steven. 40 Janice appears to have had a greater degree of contact with the Deceased than had Steven. However, she does not assert any matter of significance by way of contribution to the Deceased's welfare. 41 For a period of some twelve years, from 1970 until 1982 she had the benefit of residing rent free in a house property at 556 Bunnerong Road, Matraville, owned by her maternal grandmother. 42 Some years before her death on 9 April 2000, Mrs Paula Towers had already on 1 September 1982 transferred the Matraville property to Steven and his wife, providing to them vendor finance. According to Steven, his mother charged himself and Marion a commercial rate of interest, which they ultimately repaid. That transaction gave to Janice about $28,000, which enabled her to have sufficient funds to settle a bridging loan on a property which she was acquiring at Pagewood; it enabled their mother to receive one third proceeds of sale of the Matraville property; and it enabled Steven and Marion to receive the equivalent of one third of the value of that property. 43 The Deceased during his lifetime was generous to Janice. In 2000 Janice received a gift of $80,000 from her mother and the Deceased, to enable her to buy out her third husband's interest in their matrimonial home at Castle Hill. In 1988 Janice had received from her mother and the Deceased the sum of $16,000. She asserted that this sum was advanced by way of loan, which she subsequently repaid. 44 According to Janice, she has the following assets: House property situate at and known as 10 Gordon Avenue, Castle Hill (estimated) $500,000 Moneys on deposit $220,000 1997 Toyota Camry motor car (estimated) $5,000 45 Janice maintains ANZ equity line of credit account, under which she owes about $110,211. 46 Janice is not currently in employment. From 2001 until her retirement in 2004 she worked in a part-time capacity as a doctor's receptionist, usually for about 18 hours a week. Before that she was in receipt of a single parent's pension from 1991 when her children were all still at school. 47 Janice's present income is in an amount of $21,800 a year, representing interest upon her investment deposit of $220,000. 48 Janice gave evidence concerning her outgoings, in a total amount of about $25,600 a year. 49 Janice resides in the house property at Castle Hill with her daughter Courtney, who is aged 23 and is dependent upon Janice. 50 Janice provided evidence concerning various asserted needs for restoration, renovation and repair work to her house property at Castle Hill, and for replacement of various items of furniture and furnishings. However, there was no adequate evidence as to the costing of those works and items. 51 The other need asserted by Janice was in respect to medical expenses. However, there was no proper evidence outlining the medical condition of or the costing of medical requirements for Janice. 52 The claims of the Plaintiffs must be approached in the light of the competing claim of Karyn. Not only is she the only other eligible person in relation to the Deceased and the only other person who has a claim upon the testamentary bounty of the Deceased, but she is the principal beneficiary named in the will of the Deceased. 53 Karyn was born on 14 May 1954, and is presently aged 53. Karyn is the daughter and only child of the Deceased and his first wife Patricia. Karyn's mother died aged 29 on 3 May 1961, shortly before Karyn's seventh birthday. Thereafter, Karyn lived in a boarding school for about six months, and then resided with the Deceased's brother and his family at Frankston in Victoria for almost two years. She then returned to reside with the Deceased in Sydney in 1963 (Karyn at that time being aged about nine). The Deceased married Paula Beryl Barnes, the mother of the Plaintiffs, in December 1963. Thereafter for several months the Deceased, Paula and their respective children resided with Paula's mother at 556 Bunnerong Road, Matraville, until the purchase of the house property at 11 Malabar Road, South Coogee in May 1964. 54 At the time of his marriage to Paula, the Deceased still owned his former family home at Lidcombe. That property was sold in 1964 for 950 pounds. The house property at South Coogee was purchased with the proceeds of sale of the Lidcombe residence, together with a loan of 4500 pounds from the Newcastle Permanent Co-operative Building Investment Society Limited, secured by mortgage. That loan was repaid in November 1974. 55 Karyn attended Randwick Girls High School until she left in Year 10, aged sixteen. Karyn gave evidence of her employment history from the time when she left school. She is presently employed as a clerical assistant in the Sheriff's Office, where she has been working for the past six years. She currently earns $40,590 gross a year. 56 Karyn married Charles Arthur May on 14 February 1976. He was born on 17 July 1949, and is presently aged 58. He is a truck driver by occupation, presently employed by Australia Post, and receiving a gross income of $35,447 a year. Karyn and Charles have one child, a daughter Karlyn (who was born in October 1981 and is now aged 26). Karlyn is married, and she and her husband have two children, aged two and one. Both Karlyn and her husband are in employment. Details of their earnings and of their financial and material circumstances were set forth in the affidavit evidence of Karyn. 57 Karyn and her husband have the following assets,

67 I am satisfied that each of the Plaintiffs is an eligible person within the foregoing paragraph of the definition, each fulfilling (but only just) each of the two limbs of that paragraph. As such, each Plaintiff has the standing to bring the present proceedings. However, as each Plaintiff is an eligible person only within paragraph (d), it will be necessary for each Plaintiff to establish, as required by section 9 (1) of the Act, that there are factors which warrant the making of the application. I shall return to this matter in due course. 68 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 an applicant has been left without adequate provision for his or her proper maintenance. 69 The financial and material circumstances of Steven are such that, even had he not received any benefit under the will of the Deceased, I would not be satisfied that he had been left without adequate provision for his proper maintenance. Steven and his wife are enabled to maintain, and they enjoy, a most affluent and comfortable lifestyle - by some it might be described as an opulent lifestyle. 70 The Deceased, by giving to Steven a legacy of $100,000, manifested a degree of generosity that Steven, who had not liked the Deceased, and who had maintained little contact with him, could hardly have expected to receive. He certainly could have sustained no complaint if he had been left out of the will entirely. I have no hesitation in expressing my conclusion that, in the light of the testamentary provisions of the Deceased, Steven was not left without adequate provision for his proper maintenance. That conclusion is determinative of Steven's claim. 71 However, for completeness, I would observe that, even if Steven were to establish that he had been left without adequate provision for his proper maintenance, it would be necessary for him to establish that there were factors warranting the making of the application (as to the nature of which factors, see Re Fulop Deceased (1987) 8 NSWLR 679). Steven did not identify any such factors. 72 Janice, although in not quite so affluent circumstances as Steven, clearly has no need. I am not satisfied that she would, in any event, have established that she had been left without adequate provision for her proper maintenance, even if she had been entirely omitted from the testamentary dispositions of the Deceased. However, the Deceased, again in his generosity, by his will gave to Janice $100,000. I have no hesitation in expressing my conclusion that, in the light of that gift, Janice has not been left without adequate provision for her proper maintenance. That conclusion is of itself determinative of the claim of Janice. 73 As in the case of Steven, Janice has not identified any factors which warrant the making of the present application. 74 Even if (contrary to the conclusions which I have just expressed) one or both of the Plaintiffs had otherwise established that he or she had been left without adequate provision for their proper maintenance, and, further, that there were factors which warrant the making of the present application, the claim of the Plaintiffs must be approached in the light of the competing claim of Karyn. As the chief chosen object of the testamentary beneficence of the Deceased, Karyn does not have to prove anything. Nevertheless, her financial and material circumstances have not been so good as those of the Plaintiff. Karyn did not receive benefits similar to those which the Plaintiffs, during the lifetime of their mother, and subsequently, have received. I would not be disposed to reduce Karyn's benefits under the will of the Deceased in order to accommodate any additional benefit to either of the Plaintiffs. 75 However, as I have already observed, my conclusion that neither Plaintiff has established that he or she, by reason of the benefits given to them under the will of the Deceased, as well as the totality of their own respective financial and material circumstances, has been left without adequate provision for his or her proper maintenance is determinative of the present claim of the Plaintiffs. It follows, therefore, that the claim of the Plaintiffs will be dismissed. 76 I make the following orders,

I order that the proceedings be dismissed.

Barnes v May

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