Chandler v Coulson

Supreme Court of NSW|2015-03-02|Before: Pembroke J

Solicitors: O'Reilly & Sochacki Lawyers - for the plaintiff Geoff Williams & Associates - for the defendant File Number(s): 2014/072906

Introduction

The plaintiff claims a family provision order out of the estate of the late Susan Carla Malins pursuant to section 59 of the Succession Act 2006. He contends that he is eligible to make a claim because he was in a de facto relationship with the deceased at the time of her death. Although the plaintiff's eligibility was disputed by the defendant, by the end of the hearing it was clear that his evidence was reliable and that I should accept his contention that he and the deceased were living in a de facto marriage at the time of her death. The only issue to be determined therefore is whether by her will the deceased made adequate provision for the maintenance, education or advancement in life of the plaintiff.

The Will

The deceased made her last will on 2 October 2007 and died on 30 November 2013 aged 57. Probate was granted on 19 February 2014. By her will, she divided her estate between her ex-husband, friends, charities and significantly, the plaintiff's son. The deceased made no provision for the plaintiff in her will.
Her estate was left to be distributed as follows: 1. $2,000.00 to Geoffrey Lansbury and Marjory Lansbury, in equal shares; 2. Wedding album to Harold Anthony Malins (the deceased's ex-husband); 3. Two-elevenths of the residue to Wendy Joy Carey; 4. One-eleventh of the residue to Glenn Anthony Virgona and Marie Virgona in equal shares; 5. One-eleventh of the residue to Timothy Don Chandler (the son of the plaintiff); 6. One-eleventh of the residue to Gregory Wayne Hunter; 7. Two-elevenths of the residue to Brian Coulson (the defendant and executor of the will) and Janette Inez Coulson in equal shares; 8. One-eleventh of the residue to the Royal Society for the Prevention of Cruelty to Animals; 9. One-eleventh of the residue to Guide Dogs Victoria; and 10. Two-elevenths of the residue to the Anti-Cancer Council of Victoria.
The parties agreed that the breakdown of assets of the deceased's estate is as follows: 1. A three bedroom property at 32 Ballina Street, Pottsville NSW - $510,000.00 2. Bank account and trust account - $309,339.80 3. TOTAL - $900,339.80
After the costs of these proceedings and expenses associated with selling the Pottsville property are deducted the net distributable estate will be approximately $837,000.

The Plaintiff's Circumstances

The plaintiff is 60 years of age and unemployed. He is the recipient of a disability pension of $375.85 per week, has no superannuation and few assets. He suffers from back and neck pain, which inhibits his ability to work. He is the father of three adult children and has two grandchildren. The plaintiff's son, Timothy, is married and his wife is expecting their second child. All of the plaintiff's children have modest incomes and are unable to support him financially.
The plaintiff resides rent-free in the deceased's property at Pottsville. She purchased it in late 2011. Given the plaintiff's situation in life, and his needs, he submits that adequate and appropriate provision requires the Pottsville property to be transferred to him, or in the alternative that he should receive an award of up to $531,000. For the reasons that follow, I have reached the view, that he should receive an award of $400,000.

The Plaintiff and deceased's relationship

The plaintiff and deceased met in about 1999 in Nerang, Queensland. They soon commenced a relationship and began residing together at a property which the plaintiff rented at Nerang. The deceased was unemployed but was receiving a disability support pension. She suffered from epilepsy. She had also been alcohol dependent since the death of her father in the mid-1990s, had a generalised anxiety disorder and a history of depression. When he met the deceased, the plaintiff worked fulltime as a concreter. While they lived at the property at Nerang, the plaintiff supported the deceased by providing her with transport and by paying for items such as food, alcohol and utilities.
In or about early 2000 the deceased received a significant sum of money from a divorce settlement with her ex-husband. The deceased used the proceeds to purchase a property for $150,000 at Currumbin Waters, Queensland. The deceased, the plaintiff and Timothy, who was then 13 or 14 years old, then moved into the property. During their time at the Currumbin Waters property the plaintiff paid for household expenses and the deceased paid the rates and insurance.
In 2002 the deceased sold the property at Currumbin Waters for $290,000 and purchased a unit at Palm Beach, Queensland, for $225,000. The deceased, the plaintiff and Timothy resided at the Palm Beach unit until 2006. Timothy then moved out to live with friends. Sometime in 2006 the deceased's alcohol consumption increased significantly - to the point that she was drinking a bottle of vodka every day. The plaintiff says that this strained their relationship. At the request of the plaintiff, the deceased checked into an alcohol rehabilitation clinic, where she stayed for approximately four weeks. Despite a short period of sobriety the plaintiff soon relapsed and started drinking again. In or about late 2006 or early 2007 the plaintiff and the deceased separated and the plaintiff moved out of the Palm Beach unit, living for a short period in his ex-partner's garage. He then re-located to Forster in New South Wales. After moving to Forster the plaintiff cashed in his superannuation for approximately $14,000 and unsuccessfully used the funds to establish a concreting business.
Shortly after the plaintiff moved to Forster, the defendant, who was a family friend, received a telephone call from the deceased's mother who was distressed because she could not locate her daughter. The defendant ascertained that the deceased had been admitted to the Logan Hospital in Queensland. The defendant promptly flew to Queensland and made arrangements for the deceased to move to Mentone, a suburb on the outskirts of Melbourne, to live with her mother. The Palm Beach unit was then sold. On 4 October 2007 the deceased appointed the defendant and his wife as her Powers of Attorney. This was two days after making her will, leaving nothing to the plaintiff.
In or around the middle of 2008, the plaintiff and the deceased reconciled and the deceased moved from Mentone to live with the plaintiff at Forster. After approximately 6 months, the deceased moved back to Mentone to be with her mother who had fallen ill. Shortly after the departure of the deceased, the plaintiff suffered a prolapsed disc injury while working. In early 2009 the plaintiff started receiving a disability support pension.
On 23 May 2009 the deceased's mother died. The deceased inherited the entirety of her mother's estate, which comprised her home in Mentone valued at $575,000, cash to the value of $257,807, and shares valued at $2,016. After her mother's death, the deceased's alcohol consumption increased and her health suffered. On 29 December 2009 she was admitted to the Monash Medical Centre because of acute pancreatitis. On 18 January 2010 the deceased undertook a neuropsychological assessment. Its results indicated that she lacked sufficient cognitive capacity to make lifestyle decisions and would benefit from living in a supported residential care environment.
In January and February 2010 the deceased was again hospitalised at Monash Medical Centre and was subsequently admitted to a facility called Sunnyhurst Gardens Aged Care. On 22 February 2010 the defendant and another family friend, Wendy Carey, were appointed as administrators of the deceased's estate and her legal guardians by the Victorian Civil and Administration Tribunal (VCAT). During the deceased's time at Sunnyhurst, the plaintiff and the deceased were in frequent telephone contact and he visited her on more than one occasion. While at the facility the deceased instructed McDonald Slater and Lay, a law firm in Mentone, to make an application to have the orders made by VCAT on 22 February 2010 revoked. On 25 August 2010 VCAT appointed Lauren Smith, a solicitor at McDonald Slater and Lay, as the deceased's administrator and the Office of the Public Advocate as the deceased's limited guardian. In November 2010 the plaintiff was discharged from Sunnyhurst and returned home to Mentone. By this time the plaintiff had left Forster permanently and was residing alone at the Mentone property for approximately three to four weeks. Once the deceased returned home she and the plaintiff resumed cohabitating and he became her carer.
In late 2010 the plaintiff started receiving a carers pension from the Department of Human Services. In order to receive a greater payment per fortnight, the plaintiff declared that he was single rather than a member of a couple. The deceased was still receiving a disability support pension on the basis that she was single. These declarations were not a true reflection of the nature of the relationship between the plaintiff and the deceased. Indeed about the time the plaintiff started receiving the carers pension, he and the deceased became engaged.
On 29 July 2011 the order appointing Lauren Smith as administrator was revoked due to a dispute over her fees, and VCAT re-appointed the defendant as administrator of the deceased's estate. From 29 July 2011 the defendant commenced to pay the deceased from her own funds the sum of $400 per week. In December 2011 that amount was reduced to $300 per week. In the same month the Mentone property was sold for $575,000. With these funds the deceased instructed the defendant to purchase a property at Pottsville in northern New South Wales for $515,000. In February 2012 the plaintiff and the deceased began residing together at the Pottsville property, where they lived until her death in November 2013.
After their re-location to Pottsville the plaintiff and the deceased lived as a couple and were happy in each other's company notwithstanding the deceased's deteriorating health. They established a social network and were members of the Pottsville Pirates Bowling Club. A condolence card signed by members of the club following the death of the deceased referred to her as the plaintiff's 'wife'.
Although seemingly happy, the deceased's alcohol consumption was still substantial and her admissions to medical clinics frequent. On 17 March 2013 a CT scan of the deceased revealed that she had a nerve root impingement. In July 2013 the deceased was admitted to the Currumbin Clinic in southern Queensland for her alcohol dependence disorder. She was then transferred to John Flynn Hospital, also in Queensland. In a letter to the Guardianship Tribunal on 31 August 2013, Dr King of the John Flynn Hospital stated that a metastatic tumour had been diagnosed on the plaintiff's hip and an MRI scan showed frontal atrophy and small vessel disease. Dr King also suspected that the plaintiff could have dementia and subacute delirium. Although the plaintiff underwent surgery to remove the tumour in September 2013, which was apparently a success, she died at John Flynn Hospital in November 2013 as a result of her other various (and numerous) health issues.
The plaintiff was the only person close to the deceased who was present at the hospital when she died. In fact, when she died, he was the only person with whom she had a close emotional relationship. Although at times tempestuous, their relationship was one of mutual dependence. In the circumstances, including the shared history and the plaintiff's financial position, I have concluded that the deceased had a moral duty to provide for him by her will.

Freedom of testamentary disposition

I should note however that in family provision cases, the starting point is that the court should respect the deceased's freedom of testamentary disposition: Pontifical Society for the Propagation of the Faith v Scales (1961-62) 107 CLR 9; Vigolo v Bostin (2005) 221 CLR 191 at [10]; Goodswell v Wellington [2011] NSWSC 1232 at [108]. The re-writing of a deceased's will is discouraged, and the court should only interfere with the testamentary disposition of the deceased when it is satisfied that the deceased has failed in his or her moral duty to the claimant and that the statutory criteria for making an award are met.
In Pontifical Society for the Propagation of the Faith, Dixon CJ explained, at 19: The Court is given not only a discretion as to the nature and amount of the provision it directs but, what is even more important, a discretion as to making a provision at all. All authorities agree that it was never meant that the Court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court.
Furthermore, in the context of an earlier similar regulation, Kirby P said at 576 in Hunter v Hunter (1987) 8 NSWLR 573: The [Testators Family Maintenance and Guardianship of Infants Act 1916] is written and is to be interpreted upon the assumption of freedom of testamentary disposition. That freedom is part of our law. It is widely regarded as an important civil right. Provisions made by a will shall therefore only be disturbed if adequate provision has not been made for a spouse or child who claims. The extent of the disturbance, if any, is discretionary. But because of respect for the competing principle of testamentary disposition, disturbance is limited to the extent only that is necessary to make adequate provision for the proper maintenance, education or advancement in life of an eligible claimant. (emphasis added)
As I said in Madden-Smith v Madden [2012] NSWSC 146: 32 There are sound practical reasons for not encroaching too readily on the testator's freedom of testamentary disposition and especially not in accordance with abstract concepts such as fairness or the misguided notion that there should be equality between the children of the testator. In Pontifical Society for the Propagation of the Faith v Scales (supra) at 20 Dixon CJ articulated the unique difficulty which these cases present with the following memorable apophthegm: The difficulty is that the Court itself can never be certain that it knows all the circumstances. More often than not, one may be sure that the Court knows few of them. Experience of forensic contests should confirm the truth of the common saying that one story is good until another is told, but a testator is dead and cannot tell his. 33 To similar effect were some observations of Taylor J in Stott v Cook (1960) 33 ALJR 447 at 453-4, who explained that the reason why a court does not have a mandate to rework a will according to its own notions of fairness, is because such an approach would serve justice no better than: …acceptance of the judgment of a competent testator whose knowledge of the virtues and failings of the members of his family equips him for the responsibility of disposing of his estate in far better measure than can be afforded to a Court by a few pages of affidavits sworn after his death and which only too frequently provide but an incomplete and shallow reflection of family relations and characteristics. (emphasis added)
And in Wilcox v Wilcox [2012] NSWSC 1138: 23 I reiterate that the process that must be undertaken in a case such as this is an evaluative process. It necessarily involves consideration of the relativities. That process is driven by the statutory criteria. The court does not simply ride roughshod over the testator's intentions. I have no mandate to re-write the will with a broad brush.
If the court finds that a deceased person has failed in his or her moral duty and makes an order that interferes with the testamentary disposition disclosed in the will, any such order should only satisfy the applicant's basic needs, and not his or her wants or desires. In addition, the order must not unfairly prejudice the other named beneficiaries of the deceased's will. In making a family provision order, the court aims as far possible, to balance the preservation of the testamentary intention of the deceased, while endeavouring to satisfy the claimant's entitlement to an 'adequate' provision, without unfairly prejudicing the position of other beneficiaries.

Adequate and Proper Provision

Once it has been determined that a claimant for a family provision order is an eligible person, the task of the court is to determine whether or not adequate provision for the proper maintenance, support, education or advancement in life of the claimant has been made by the will of a deceased: Section 59(1)I of the Act.
The proper approach in determining whether a family provision order should be made is to conduct the two-stage inquiry explained by the High Court in Singer v Berghouse (1994) 181 CLR 201 and Vigolo v Bostin (2005) 221 CLR 191. The first stage involves a determination of whether the provision, in the absence of intervention by the court, is 'adequate' for the 'proper' maintenance, support, education or advancement in life of the plaintiff. The second stage requires the court to engage in a discretionary exercise to determine what provision ought to be made: See also Andrew v Andrew [2012] NSWCA 308 at [69]-[71] (per Barrett JA).
I repeat what I said in Brand v Brand [2015] NSWSC 52: 26 The term 'adequate' and especially the term 'proper', are value laden concepts. They cannot always be neatly divided but in general terms, the former is concerned with quantum while the latter directs attention to what is appropriate in all the circumstances: Madden-Smith v Madden (supra) at [36]; Alexander v Jansson [2010] NSWCA 176. In Goodman v Windeyer (1980) 144 CLR 490, Gibbs J at 502 stated: The words 'adequate' and 'proper' are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards. 27 What is proper turns on whether a wise and just testator, aware of all the circumstances, would have thought it his or her moral duty to do more: Vigolo v Bostin (supra) at [15] - [22]; Bosch v Perpetual Trustee Co (Ltd) [1983] AC 463 at 479; Goodsell v Wellington (supra) at [56] - [72]; Madden-Smith v Madden (supra) at [36]. I gratefully adopt the following statement in Verzar v Verzar [2014] NSWCA 45 at [39]: Whether [adequate] provision has been made requires an assessment of the applicant's financial position, the size and nature of the deceased's estate, the relationships between the applicant and the deceased and other persons who have legitimate claims upon his or her bounty and the circumstances and needs of those other persons: see Tobin v Ezekiel [2012] NSWCA 285; 83 NSWLR 75 at [70] and McCosker v McCosker [1957] HCA 82; 97 CLR 566 at 571-572; Singer v Berghouse [1994] HCA 40; 181 CLR 201 at 210; and Vigolo v Bostin [2005] HCA 11; 221 CLR 191 at [16], [75], [112]. Such an assessment is necessary because of the inter-relation between 'adequate provision' and 'proper maintenance'. Whilst the inquiry as to what is 'adequate' directs particular attention to the needs of the applicant, what is 'proper' requires regard to all the circumstances of the case, and in particular the size and nature of the estate and the needs of the other beneficiaries or potential beneficiaries. 28 The determination of what is adequate provision for a plaintiff's proper maintenance, support and advancement in life requires consideration of the relativities. It also involves an evaluative judgment having regard to a plaintiff's station in life and the standard of living he or she is entitled to expect: Madden-Smith v Madden (supra) at [36]. 29 Sections 59(2) and 60(1)(b) of the Act are analogous to the second stage of the approach enunciated by the High Court. They provide that the court may make such order for provision out of the estate of the deceased person as it thinks ought to be made for the proper maintenance, education or advancement in life of the plaintiff, having regard to the facts known to the court at the time the order is made. This is an evaluative judgment which arises from the word 'ought' and requires examination of the applicant's needs: Gwenda Jane Toth v Ronda Sedelia Graham [2014] NSWSC 393 at [10(8)].

Section 60(2) Factors

Section 60(2) of the Act sets out the matters that may be considered by the court in determining whether to make a family provision order. Matters relevant to this case include: 1. Any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship. 2. The nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate. 3. The nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered. 4. The financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate. 5. Any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated. 6. The age of the applicant when the application is being considered. 7. Any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant. 8. Any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate. 9. Whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so. 10. Whether any other person is liable to support the applicant. 11. The character and conduct of the applicant before and after the date of the death of the deceased person.
In his analysis of s 60(2) in Toth v Graham Kunc J said said at [10(11)], and I gratefully adopt: (11) Section 60(2)(p) confirms the breadth of matters the Court can take into account . Once enlivened, the Discretion is expressly fettered only by the requirement in s 59(2) that if an order is made, it must be such order 'as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made'. The Discretion is otherwise unconfined, which means that in answer question (9) the Court is otherwise constrained only by the need to act judicially, that is to say 'not arbitrarily, capriciously or so as to frustrate the legislative intent': Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [22] per Gaudron and Gummow JJ. The Court must act rationally and exercise the Discretion for the purpose for which it was conferred.

Appropriate Order

As I have already made clear, the facts of this case satisfy me that the deceased had a moral obligation to provide for the plaintiff by her will. The plaintiff and deceased were in a de facto relationship between 2000 and 2006, and again, at least from late 2010 until her death. Although they were, for the most part, living separately between 2006 and 2010, they were still in contact during this period, and to varying degrees, dependent on each other. Each was, in my view, a prominent figure in the life of the other.
The plaintiff met the deceased at a difficult stage of her life and supported her emotionally for a number of years. For the duration of their relationship, the deceased was a sick woman due to her chronic alcohol abuse. Her medical history was extensive. Before her death she was suffering from, or had suffered from, illnesses that included epilepsy, type II diabetes, mellitus, hypothryoidism, GORD, hepatic enephalopathy, delerium, acute pancreatitis, and acute renal failure. She was on numerous medications during her relationship with the plaintiff who took it upon himself to monitor her medical condition and assist with her medication.
The plaintiff supported the deceased financially when their relationship was in its infancy. At all times he provided transport for her. Throughout the course of their relationship, he assumed the primary responsibility for the performance of tasks such as grocery shopping, cleaning, gardening and cooking. And he performed general maintenance work on all the properties that they lived in, and particularly the Mentone property before it was sold.
When the deceased's alcoholism became so bad that she was again admitted to a rehabilitation facility in 2010, the plaintiff was one of a few persons who visited and cared for her. Upon her release from the facility, the plaintiff became her carer. He assumed responsibilities such as bathing the deceased, assisting her going to the toilet, feeding her and driving her up to 40 kilometres to medical appointments. It is reasonable to infer that, without the support of the plaintiff that the deceased would not have lived as long as she did. The burden of caring for a loved one during a period of illness should not be underestimated.
The plaintiff is also clearly in need. His age and his back and neck injuries inhibit his capacity to generate an income. He has no superannuation and aside from a car and some personal belongings, valued at approximately $2,500, has no assets. He has borrowed $6,500 from his mother and has been advanced $1,000 from Centrelink. His children are not affluent and cannot support him financially. If he is required to leave the Pottsville property, or provision is not provided from the deceased's estate, he is likely to experience significant hardship for the duration of his life.
A relevant consideration however is that, except when he and the deceased lived at Nerang, and when he lived alone in Forster, he has lived rent-free in homes owned by the deceased. Another consideration is that most of the named beneficiaries in the will are not particularly wealthy. I should minimise the likelihood that they will suffer hardship by being deprived of a significant portion of their legacies. Nor do I wish to deprive, to any substantial degree, the named charities in the deceased's will of the legacies to which they are prima facie entitled.
Conclusion
I therefore do not propose to make either of the orders sought by the plaintiff. A less generous provision will be adequate and appropriate. Although an order that the Pottsville property be transferred to the plaintiff would be an uncomplicated way of resolving these proceedings, it would be too generous in the circumstances. The plaintiff has no need for a three bedroom property such as the Pottsville property. At most he requires a two bedroom property so that he can reside permanently in one bedroom and use another as a spare room in the event that his children and grandchildren visit. Similarly, an award of $531,000 would also be too generous to the plaintiff. This is more than enough to satisfy his basic needs and, in my opinion, would unjustly deprive the other beneficiaries of a significant portion of their legacies under the will.
I have reached the conclusion that an award of $400,000 to the plaintiff is appropriate and adequate. This will enable him to purchase a two bedroom unit in the Pottsville area, which I was informed would cost between $240,000 and $275,000, and will leave him with a substantial surplus of funds for his expenses. The burden of the award should be borne evenly and proportionately by the eight beneficiaries of the deceased's will who are the recipients of the eleventh share of her estate. The respective one-eleventh shares would be reduced pro-rata to meet the award.

Orders and Costs

For those reasons, I make orders as follows: 1. The costs of the plaintiff should be paid out of the estate on the ordinary basis. 2. The costs of the defendant should be paid out of the estate on an indemnity basis. 3. The plaintiff should receive the sum of $400,000 out of the estate. 4. The net balance of the estate remaining after the payment of the amounts in (1), (2) and (3) above, should be paid in accordance with the terms of the deceased's will. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 March 2015

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