Chaloner v Chaloner

SOLICITORS : Legal Aid NSW for plaintiff McDonnell Schroder for defendants

• 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1944/08 - JUNETTE NITA CHALONER v BERNARD WILLIAM CHALONER & ANOR - ESTATE OF THE LATE NITA MAY CHALONER

1 HIS HONOUR: This is an application under the Family Provision Act in respect of the estate of the late Nita May Chaloner who died on 28 May 2007 aged 91 years. She was survived by her four children who are all now parties to the proceedings. Her husband predeceased her. Will of the Deceased 2 The deceased made her last will on 11 May 1994 and under that will she left her estate equally between her four children and appointed her two sons executors. Assets in the Estate 3 The remaining asset in the estate is the deceased's house at Bolt Street, Shoalhaven Heads and the agreed value of that asset is in the sum of $320,000. There was a small amount of cash which was used to pay the debts in the estate and, in addition, each of the children contributed $3500 to meet the shortfall in the debts in the estate. The home has been transferred to the four beneficiaries on 12 December 2007, thus there is in fact no estate. 4 So far as the plaintiff's costs, they have been estimated at $23,710. She is legally aided and some arrangements have been made to which I will refer later about those. The defendants' costs are $19,800. 5 I must comment that it is refreshing to see that a case of this nature can be accommodated without incurring substantial costs on both sides. The court appreciates the practitioners who do this. It is in marked contrast to many cases that come before the court where we find for a one day case or less very substantial costs charged. Family History 6 There were four children of the deceased's marriage, Bernard was born in February 1940, Colin in May 1942, the plaintiff was born in August 1944 and Elaine was born in July 1953. 7 The plaintiff when she was young in 1957 started to suffer from migraines and in 1962 she had glandular fever and was hospitalised for three months. At the age of 17 in 1970 she moved out of her parents home and at the same time had her son. 8 The medical evidence in this matter has been given by a Dr Ghani who had treated the deceased since 1978 and the plaintiff since 1981. In 1983 the plaintiff had a brain aneurysm and was hospitalised for three months. She had to relearn to walk, read and write and some of those difficulties are still with her. Sometime after that she had two separate strokes. 9 Around this time she lived with her brother Colin for some two years, and existed on social security at that stage, otherwise she has had until recent times a reasonable employment history. 10 In 1985 she moved to live with her parents at Bolt Street, Shoalhaven Heads. She was employed at this stage and she assisted with the usual household chores around the house. She put herself on the waiting list for a Department of Housing home. 11 Unfortunately by 1992 the parties father developed Alzheimer's and they all, particularly the plaintiff, assisted in his care until he was admitted to a nursing home later on in that year. When he was in the nursing home the plaintiff would take the deceased to see her husband in the nursing home. 12 In 1994 the deceased gave a power of attorney for the plaintiff and she also at that stage made the will which has now been admitted to probate. The parties' father died on 28 October 1994. 13 In 1995 the plaintiff was offered a flat by the Department of Housing as a result of her being on the waiting list. She discussed it with the deceased and she asked her to stay and made some promise to change her will to give her a provision for her to remain there. Apparently she went to the solicitor but ultimately when she went in to see the solicitor she decided not to change her will and left it as it was. 14 Over the years there was assistance by the plaintiff to the testatrix in a number of tasks around the home. In 1999 there was revocation of the power of attorney and power of attorney was in fact then given by the deceased to Bernard and Colin. By 2001 the testatrix had sold her car and thereafter she had to be taken to medical appointments. 15 On 6 March 2006 because things were too much for the plaintiff to help her mother she got some home care to come and assist with the deceased's care. The deceased was admitted to hospital on 15 May 2006 and at the end of that month entered a nursing home. 16 In May 2006 the plaintiff had a heart attack and was admitted to St George Hospital. In October of that year she had open-heart surgery at Prince Alfred. On 28 May 2007 the deceased died. Shortly afterwards, a month later, the plaintiff had ceased her employment. 17 As I mentioned the title was transferred in December 2007 to the four beneficiaries and the summons was filed within time. Eligibility 18 The plaintiff is an eligible person as a daughter of the deceased. 19 In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two-stage approach that a court must take. At page 209 it said the following: "The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or 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. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors." Plaintiff's situation in life 20 The plaintiff is 64 years old and has no dependants, her son lives and works in Brisbane. She has a pension of $562.10 per fortnight. So far as assets are concerned, she has cash in the bank of $5,000 and she owes $4000 on a personal loan which she is slowly repaying. She has her interest in the estate of the deceased and if the estate property was sold it would probably net her some $66,000. 21 The plaintiff is not in good health and has a number of health problems. She suffers from acute migraine headaches which can disable her for days at a time. She has Hyperthyroidism with thyroid gland nobules. She has systemic Lupus Erythrematosis, Chronic Obstructive Airways disease, Iron deficiency anaemia and white cysts on the optic nerve in the right eye affecting her sight. 22 It is plain there was a good relationship, although there were probably moments from time to time, between the plaintiff and the deceased. 23 It is also necessary to consider the situation in life of the others having a claim on the bounty of the deceased, in this case it is the other three children. They have not given evidence of their financial situation in life and the court can assume that they do not want the court to take this into account in determining the present matter. 24 The other beneficiaries are, of course, Bernard Chaloner who is aged 67, Colin who is aged 65 and suffers from Parkinson's disease and has had prostate and skin cancer, and Elaine Mannix who is 54 years of age and still working. All of them had a good relationship with the deceased and to the extent that distance allowed they also assisted the deceased. Discussion 25 It is necessary to see how the plaintiff says she has been left without adequate provision for her maintenance, education and advancement in life. 26 What the plaintiff seeks is to have the home transferred to her or alternatively to have funds to buy a unit in the area which cost between $270,000 and $290,000. 27 There are a number of things the plaintiff points to in support of this claim. The first of these is her significant health issues, to which I have referred, and the fact that she has to spend $80 per fortnight on medication. She points particularly to the contribution that she made to the welfare of the deceased who was only able to stay in her home as long as she did because of the assistance given by her. The deceased was in fact 91 when she died and so was quite elderly. 28 The other point is the plaintiff in 1995 forwent the opportunity of obtaining a Department of Housing flat, which would have provided her with her own housing, at the request of the deceased and on the promise made by her. 29 The other thing is the plaintiff has now lived down there at Shoalhaven Heads since 1985 and her friends, support networks and doctor are there and she does not really want to move away from them. 30 Dr Ghani, the medical practitioner for the family, gave some evidence that it is useful to see what he said: "I am a General Practitioner in Shoalhaven Heads NSW. I am the family doctor for the Chaloner family - Nita and William Chaloner were my patients from 1978 until their deaths.

I first attended Junette Chaloner in 1981. She is still my patient.

Before his death Mr Chaloner suffered from dementia. Mrs Chaloner was also showing signs of dementia, although this was not bad. She was increasingly forgetful and demanding.

I attended William and Nita Chaloner, and Junette Chaloner on many occasions, both in my surgery and on home visits.

Mrs Chaloner was often brought to the surgery by Junette, or friends such as Jack Quarnby. On one occasion I recall another daughter brought Mrs Chaloner to the surgery. I do not recall her sons bringing her to the surgery.

I have always done home visits in my practice and made many to the Chaloner house. I saw Junette there many times and often she was doing housework such as washing or cleaning. I don't recall Mrs Chaloner's other children being present at the house when I was there.

Given Mrs Chaloner's increasing frailty and health problems, it is my opinion that she would have gone into hostel care or nursing home care many years earlier than she did if it were not for the care provided by Junette.

I recall many conversations with Mrs Chaloner when she would say ' I don't know what I would do without Junette'." 31 In McGrath v Eves [2005] NSWSC 1006 Gzell J referred to the courts approach to the question of moral duty when considering claims by children to be provided with funds for a house. He said: "When it comes to children, as Young J observed in Shearer v The Public Trustee, NSWSC, unreported, 23 March 1998, it has never been said by any court that the community expects a mother to leave her children in a position to have a house of their own. That observation applies equally to a father. And in Gorton v Parks (1989) 17 NSWLR 1 at 7, Bryson J pointed out that there is no special principle that able-bodied adults earning a living have no claim, his Honour pointing out that such a proposition in relation to resources of any size was quite erroneous. In Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419 at [109]-[110], White J, having referred to this passage, went on to observe that there was no rule to the effect that proper provision for an adult and presently able-bodied child did not extend to providing him or her with a house or money to buy one. His Honour noted that instances in which this had occurred included Re Buckland, deceased [1966] VR 404 and Ogden v Green [2003] NSWCA 352. White J's decision was upheld by the Court of Appeal in Lloyd-Williams v Mayfield [2005] NSWCA 189. In the course of his judgments Bryson JA at [31] pointed out that there were features to the case that were rarely encountered in claims under the Family Provision Act 1982 and rarely encountered together. First, the value of the shares designated as notional estate was very large in comparison with the estates ordinarily encountered. Secondly, because the appellant was otherwise amply provided for, the further provision ordered by White J could have no adverse effect on her wellbeing. Thirdly, the applicant did not have any needs in terms of lack of present provision for necessities and amenities of life on an ordinary scale of needs as understood in the community generally. It was submitted that Mayfield was distinguishable by the absence of these features in the instant circumstances and because the appellant in Mayfield had filed no financial evidence and put forward no competing financial or other needs for the court to consider. There are differences of fact between Mayfield and the present case. But they do not affect the central proposition that there is no rule to the effect that proper provision for an adult and presently able-bodied child does not extend to providing him or her with a house or money to buy one. That proposition was not criticised by the Court of Appeal. Indeed, at [32], Bryson JA observed that it was open to White J and altogether appropriate to look well beyond needs when interpreting and applying community standards to decide what provision the court ought to order." 32 In this case there was the care provided to the deceased by the plaintiff over many years and also the provision of accommodation for the plaintiff at minimum cost over those years. Importantly in this case no competing financial needs is put forward by the other beneficiaries. They are presumably relatively comfortable in their financial circumstances. 33 The plaintiff's problems are compounded by her health issues. Fortunately for the plaintiff Legal Aid will not require immediate payment and will take a charge over the home in respect of her legal costs. The defendants' costs will have to be paid and the defendants should be reimbursed for the $3500 each has paid into the estate to meet the debts if there is to be any substantial order in favour of the plaintiff. 34 According to the plaintiff she has made some preliminary enquiries and is able to borrow, although the evidence falls far short of providing approval or any definitive commitment of the lender. 35 So far as the other three beneficiaries are concerned they have clearly been good to their mother but the problem is the estate of their mother is not large enough to recognise all the claims made upon it. 36 The plaintiff's needs, her medical situation and the care which she provided her mother must, unfortunately for the other beneficiaries, take priority. 37 Subject to some matters to which I will detail in a moment I think she should have accommodation provided for her. There is little difference between the value of the house and the cost of a unit and retaining the home will save on costs and expenses of sale. In any event if the house has to be sold the difference between the proceeds and costs of a unit may go towards meeting these other expenses, namely, the defendants' costs and reimbursing the defendants for the estate debts. 38 Section 24 of the Family Provision Act provides that on an application in relation to a deceased person, if the court is satisfied that an order for provision ought to be made on the application, and because of a distribution the property has been transferred, the court may designate the property as notional estate. In this case it is sought to designate the house, which is now held by the beneficiaries. 39 Section 27 of the Family Provision Act is in these terms: "(1) On an application in relation to a deceased person, the court shall not make an order designating property as notional estate of the deceased person unless it has considered: (a) the importance of not interfering with reasonable expectations in relation to property; (b) the substantial justice and merits involved in making or refusing to make the order; and (c) any other matter which it considers relevant in the circumstances. (2) In determining what property should be designated as notional estate of a deceased person, the court shall have regard to: (a) the value and nature of property the subject of any relevant prescribed transaction or distribution from the estate of the deceased person; (b) where, in relation to any such prescribed transaction, consideration was given, the value and nature of the consideration; (c) any changes over the time which has elapsed since any such prescribed transaction was entered into, any such distribution was made or any such consideration was given in the value of property of the same nature as the property the subject of the prescribed transaction, the distribution or the consideration, as the case may be; (d) where the property of the same nature as the property the subject of any such prescribed transaction, any such distribution or any such consideration could, during the time which has elapsed since the prescribed transaction was entered into, the distribution was made or the consideration was given, as the case may be, have been applied so as to produce income; and (e) any other matter which it considers relevant in the circumstances." 40 There are no matters in the evidence relating to reasonable expectations apart from those generated in the plaintiff by the deceased. In my view justice and merits favour the making of an order and there are no other relevant considerations. 41 Accordingly, in my view it is appropriate to order that the plaintiff receive the estate of the deceased, namely, the house subject to some conditions. The orders I make are as follows:

(1) In lieu of the provisions made in the will of the deceased in favour of all of the children of the deceased I order that the residue of the estate be held for the plaintiff conditional upon the plaintiff paying $3500 to each of her brothers and sisters. (2) I order the plaintiff to pay the defendants' costs on an indemnity basis. (3) I designate as notional estate for the purpose of satisfying order 1 the property held by the parties to the proceedings at Bolt St, Shoalhaven Heads.

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