Estate Morris: Grady v Deavin [2014] NSWSC 1034 | Case summary

Supreme Court of NSW|2014-07-30|Before: Lindsay J

INTRODUCTION 1The plaintiff, a former de facto partner of the late Joseph Patrick Morris ("the deceased"), claims an order that provision be made for her, out of his estate, under chapter 3 of the Succession Act 2006 NSW. 2Her standing to make that claim is grounded upon s 57(1)(e) of the Act. She was, as the defendant (representing the estate) accepts, a person who was, for a time, wholly or partly dependent on the deceased and a member of his household. 3That she is, thus, an "eligible person" within the meaning of ss 57(1) and 59(1)(a) is not in issue. 4The major impediments to her success are: (a)First, her application for family provision relief was made (by a summons filed on 6 June 2013) outside the period of 12 months from the date of death of the deceased prescribed by s 58(2) of the Act. She needs to "show cause" for an extension of time within which to bring her claim. (b)Secondly, because her standing as an "eligible person" arises only because of s 57(1)(e), she needs to establish, for the purpose of s 59(1)(b) of the Act, that there are factors which warrant the making of her application. (c)Thirdly, she needs to satisfy the evaluative criteria for which ss 59(1)(c) and 59(2) of the Act respectively provide (informed by reference to the matters enumerated in s 60(2)) to satisfy the Court that, upon a current day assessment, she has been left without adequate provision and an order for provision ought to be made in her favour. 5It is common ground that: (a) the estate of the deceased is large enough to accommodate an order for provision of the dimension sought by the plaintiff; and (b) there has been no distribution of the estate that would necessitate designation of notional estate if the plaintiff is to succeed. 6Any difficulties in determination of the plaintiff's claim are, ultimately, grounded in the factual matrix of the proceedings: (a)The de facto relationship between the plaintiff and the deceased (over a period of about eight years between 1973-1981) ended about 30 years before the death of the deceased in 2011. (b)The relationship (during which marriage was expressly in contemplation, but never solemnised) was a hard one for the plaintiff in that she had, from time to time, after she fell pregnant, suffered domestic violence at the hands of the deceased, a man capable of generosity but volatile by nature. (c)Although there was a child of their relationship (the deceased's son, born in 1974), he remained in the custody of the deceased throughout most of his teenage years. (d)Each of the plaintiff and the deceased re-partnered. The plaintiff was married to another man (whose work eventually took them to the United States of America) between 1984-1993, although she separated from him in 1989 or thereabouts. The deceased had a second child (a daughter, born in 1983) by the woman who, ultimately, in 1987, became his wife and is now his widow. (e)Between 1987-2006 the plaintiff lived, and worked, successfully, in the media industry, in the United States of America, while the deceased and their son lived in Sydney. (f)Although the plaintiff had made a financial contribution to the communal wealth of the deceased and herself during the currency of their de facto relationship, there was no property settlement between them at the end of the relationship (at a time before the De Facto Relationships Act 1984 NSW commenced operation). (g)In proceedings before this Court the plaintiff submitted, in 1982, to a declaration that their "matrimonial" home at Paddington, registered in her name, was held on trust by her for the deceased. (h)Although the deceased paid the plaintiff some maintenance, for the upkeep of their son while the son was in her care, he paid nothing to her for her own maintenance after the end of their relationship. (i)Although the plaintiff lived in the United States and her son lived in Sydney throughout his teen years, the plaintiff and the deceased co-operated in his upbringing (after a consensual resolution of competing custody claims made, in 1988, in proceedings in this Court) sufficiently to allow him to spend time with his mother, from time to time, in the US. (j)In the years following resolution of the separate proceedings about the Paddington property and custody of their son, the deceased retained, until his death, a passing interest in the plaintiff's career and, from time to time, offered her advice about it. (k)The wealth accumulated by the deceased by the time of his death came to him (in the 1990s), from success in business, long after the de facto relationship between the plaintiff and himself had come to an end. (l)When the plaintiff returned to Australia in 2006 (after her career in the US had peaked, and in the hope of enjoying a grandchild born to her son and his partner), she turned to the deceased in need and, with debateable qualifications on the availability of his largesse, he voluntarily provided her with assistance to address her needs and, on her evidence, he held out the prospect of further assistance, should she need it. (m)The plaintiff, now aged 67 years and with aches and pains that accompany that age, has a need for more secure accommodation and assistance with living expenses. (n)In the acrimony that has surrounded these proceedings there has been a breakdown in the relationship between the plaintiff and her son, one consequence of which is that, for the foreseeable future, it is unlikely that the plaintiff could turn to him for assistance. (o)There is a hot contest between the parties about whether or not the plaintiff's delay in the commencement of family provision proceedings was a conscious act, from which she resiled only when another person who claimed to have been a de facto partner of the deceased made an application for family provision relief. (p)That dispute arises in a context in which: (i) the defendant did not, in a timely way, serve on the plaintiff formal notice of those other proceedings or of her entitlement to make a claim for family provision relief; and (ii) the defendant concedes that there would be no prejudice to the estate of the deceased were the Court to grant the extension of time required by the plaintiff. 7On the first day of the hearing of the plaintiff's claim for relief, counsel for the defendant announced that the other, similar proceedings that had been brought against the deceased's estate (and which were to have been heard together with the plaintiff's claim) had been settled. 8It is neither necessary, nor appropriate, in any substantive way to take notice of the terms of that settlement beyond a notation that the parties to the present proceedings were agreed that the terms of settlement, so far as they affected the estate of the deceased, did not in any way prejudice the plaintiff's claim.

THE ESTATE, AND THE WILL, OF THE DECEASED 9The deceased, born in 1946, died on 30 July 2011 (aged 65 years), leaving a will dated 5 July 2006, probate of which was granted to the defendant by this Court on 10 January 2012. 10The defendant (an accountant and financial adviser by profession, but now retired) is the executor named in the will. He was a long time friend of, and adviser to, the deceased. 11The will provided for the deceased's estate to be divided equally between his wife Jan, his son Joseph and his daughter Katharine. 12That division of the estate was predicated upon what purported to be a separate testamentary gift to the wife of the deceased's half share in their matrimonial home at Bronte. The market value of the Bronte property, at the time of the deceased's death, was between $4 - $5 million, a half share of which was valued at about $2 - $2.5 million. The testamentary gift failed, but only because the property was owned by husband and wife as joint tenants. It passed to the widow, as the surviving joint tenant, by operation of law, not by virtue of the deceased's will. 13Precatory provisions in the will recorded the deceased's hopes: (a) that his widow would make a will in favour of the two children, Joseph and Katharine, equally, providing for them to be the major beneficiaries of the portion of his estate given to the widow; (b) that his three beneficiaries would live in harmony; and (c) that they would, at least initially, heed any advice given by the defendant. 14Katharine is the child of the deceased's marriage to Jan. Joseph is his child by his previous relationship with the plaintiff. 15The deceased left an estate with a value, estimate for probate purposes, of about $6.8 million. 16In evidence given at the hearing of the proceedings the defendant estimated that, after making various allowances (including allowances for estate liabilities and $300,000 "inclusive of costs" paid out to settle the other family provision claim made on the estate), the estate is presently valued at about $5.7 million. 17Of that amount, a total of $2.9 million has been provided, on one basis or another, to the beneficiaries named in the deceased's will: (a)The deceased's son has been "advanced" $1.1 million to acquire a property as a family residence (for himself, his wife and their child); (b)The deceased's daughter has been "provided" $1.1 million to assist her with her housing needs; and (c)The deceased's widow has been "advanced" $700,000 to assist her with financial needs, including home repairs and renovations. 18Whatever their form (and whatever reservations may attach to them) these payments appear, in practical terms, to have been interim distributions of the estate. 19The defendant's evidence is that after allowing for those payments (however characterised), the estate assets remaining to answer any orders made in these proceedings, on the plaintiff's application for family provision relief, have an estimated value of about $2.8 million (ie, $5.7 million less $2.9 million). 20On any view of the proceedings, that is sufficient to accommodate any orders that may be made: (a)As articulated in final submissions, the plaintiff seeks an order that she be paid a legacy of $500,000 out of the estate of the deceased. (b)Although the estimated costs of the proceedings (of the order of $315,000 on the plaintiff's side of the record and approximately $275,000 on the defendant's side) are large, and a cause for grave concern because they are so large, they do not absorb the balance of the estate funds available to abide orders of the Court. (c)Although each of the beneficiaries has sworn an affidavit, or affidavits, in support of the defendant's case in opposition to the plaintiff's claim: (i)the defendant has not placed before the Court evidence about the respective financial circumstances of the beneficiaries; and (ii)the defendant has not contended that the plaintiff's claim for family provision relief must fail, in whole or part, on account of competing claims on the bounty of the deceased.

THE PLAINTIFF'S APPLICATION FOR AN EXTENSION OF TIME: SUCCESSION ACT, s 58(2) 21The plaintiff's summons was filed on 6 June 2013, nearly two years after the death of the deceased on 30 July 2011. It was, thus, about 11 months outside the 12 month "limitation period" imposed by the Succession Act s 58(2). 22The plaintiff bears the onus of demonstrating the "sufficient cause" necessary for an extension of time in her favour: In re Salmon, Deceased [1981] Ch 167 at 175B; Re Guskett [1947] VLR 212 at 214; Durham v Durham (2011) 80 NSWLR 335 at [39]. 23What may constitute a "sufficient cause" depends on all the circumstances of the particular case. 24Conventionally (as illustrated by cases such as Warren v McKnight (1996) 40 NSWLR 390 at 394E, Dare Furness (1997) 44 NSWLR 493 at 500C and Thomas v Pickering [2011] NSWSC 572 at [84]-[90]), factors which the Court may take into account upon consideration of whether to make an order under s 58(2) include: (a) the sufficiency of the plaintiff's explanation for delay in making a claim for family provision relief; (b) any prejudice to beneficiaries occasioned by the delay, other than disappointment that might be experienced upon adjustment of entitlements consequent upon the making of an order for provision; (c) the existence of any unconscionable conduct by either side bearing upon the application for family provision relief; and (d) the strength of the plaintiff's case for the making of a family provision order. Ignorance of an entitlement to apply for relief can constitute a sufficient explanation for delay, but a mere change of mind by the plaintiff does not. 25In these proceedings, the plaintiff was aware of the death of the deceased and of the provisions of the Succession Act in a timely way. At one point, shortly after the other claim for family provision relief was made against the estate, she offered assistance to the deceased's widow in opposing it. If (as she contends) she did not have a full appreciation of her entitlement to apply for relief, she did have the means for discovery of that entitlement. 26Nevertheless, there are a number of factors that point towards the justice of an order for an extension of time being made: (a)Despite her passing knowledge of the Succession Act, I accept that the plaintiff did not fully appreciate that it was open to her to make an application for family provision relief. (b)As late as the commencement of the hearing of these proceedings, the defendant maintained that, upon the proper construction of ss 57(1)(b) and 57(1)(e) of the Succession Act, the plaintiff had no standing as an "eligible person" because, it was contended, a former de facto partner is not eligible to make a claim for family provision. (c)The defendant, personally, but with the benefit of legal advice, himself erroneously believed that the expression "eligible person" was confined to the beneficiaries of a deceased person's estate. (d)The defendant took 10 months or so after the commencement of the other family provision proceedings (by a summons filed on 12 June 2012) to serve on the plaintiff (by correspondence dated April 2013) formal notice of her entitlement to apply for relief. (e)Shortly after the plaintiff instructed solicitors to advise her of her entitlements (on 3 June 2013) her summons was filed. (f)Given the pendency of the other proceedings (which, until they were settled, were to be heard together with the plaintiff's proceedings) the estate appears to have experienced no material procedural disadvantage from any delay on the part of the plaintiff. (g)Personal communications between the deceased's widow, his son and the plaintiff in April 2013, in anticipation of the defendant serving on the plaintiff formal notice of her entitlement to apply for relief, suggest that, from about that time at least, the beneficiaries anticipated that a claim for relief might be made by the plaintiff. (h)The defendant, fairly, concedes that he can point to no prejudice to the estate in the plaintiff being granted an extension of time. 27These factors, in my assessment, outweigh any criticism that might be made of the plaintiff for delay or prevarication in making a decision to apply for relief. 28The conduct of the parties, on either side of the record, is not attended by any form of unconscionable conduct that might weigh in the balance one way or the other. 29Upon a preliminary assessment of the strength of the plaintiff's case for the making of a family provision order, allowance must be made for the fact that, in and following 2006, the deceased provided substantial assistance to the plaintiff, grounding a plausible (but not uncontentious) case for saying that he had, by his conduct, acknowledged that she had a continuing claim on his bounty. 30In all the circumstances, an extension of time is required to allow the plaintiff's substantive claim for family provision relief to be determined on its merits. 31Accordingly, I propose to make an order that the time within which the plaintiff can make an application for a family provision order be extended up to and including the date of commencement of these proceedings.

FACTORS WARRANTING THE MAKING OF AN APPLICATION: SUCCESSION ACT, s 59(1)(b) 32Upon a consideration whether, within the meaning of s 59(1)(b) of the Succession Act, "there are factors which warrant the making of" the plaintiff's application for a family provision order, I take guidance from Re Fulop Deceased (1987) 8 NSWLR 679 at 681C-E (approved in Churton v Christian (1988) 13 NSWLR 241 at 254C): factors which may warrant the making of an application are those which, when added to facts which render a plaintiff an eligible person, give him or her the status of a person who would generally be regarded as a natural object of testamentary recognition by the deceased. 33At first blush, one naturally hesitates to find factors warranting a family provision application in a case involving a de facto relationship 30 years distant from the deceased's date of death, coupled with a divergence in the lives of the former de facto partners as they re-partnered and pursued different economic paths. 34Against that, and available for positive identification as factors warranting the making of an application, are the facts that: as life unfolded, there was (in social terms) a reconciliation between the plaintiff and the deceased; their estrangement was not, in that context, absolute or complete; the deceased remained solicitous of the welfare of the plaintiff in part, but not only in part, because he recognised her as the mother of his son; he, on her evidence (which I accept), encouraged her to return to Australia in 2006; and, when she did so, he provided her with assistance, by way of rent-free accommodation, gifts totalling $49,300 and advice. 35Whether, as may be possible, he felt under an obligation to the plaintiff because they had ended their de facto relationship without any property being settled on her is a matter for speculation. 36I do not accept, as the defendant contends (and the deceased's beneficiaries evidently believe), that the only reason why he offered assistance to the plaintiff in and following 2006 was because he was protective of his son. Undoubtedly, that may have been a factor, and he may have rationalised his dealings with her on that basis, but his interest in her welfare appears to have been more broadly based and grounded in a generosity of spirit. 37In reaching this conclusion, I do not overlook the deceased's occasional expressions of frustration or even hostility at the prospect that the plaintiff's mere presence might disrupt the harmony of life within the family (comprising the beneficiaries named in his will) he had lovingly established. 38The fact remains that, whatever might have been his subjective state of mind, the deceased, objectively and over a period of time (between at least 2006 - 2009, if not longer) he demonstrated a bona fide, protective attitude towards the welfare of the plaintiff. 39Emails exchanged between the plaintiff and the deceased in November 2008 and June 2009 demonstrate the nature of the deceased's almost paternal regard for the plaintiff. 40Understandably, the defendant points to the deceased's email of 20 June 2009, in which he advised the plaintiff that he was giving her a cheque for $14,300 as "rent assistance" to help her "over the next year". 41His generosity was qualified by the following observations in that email: "I hope this helps you over the next year. And, I hope you use it for the intended purpose. I need to say, in honesty and for your own financial planning, I can't see myself being of much further financial help. I seem to have so many 'dependents' as it is. I honestly also think you are on there [sic] wrong track with this TV work [that the plaintiff was then pursuing]. I really feel for you but I think it's just too hard given the incestuous and younger nature of the industry. I think it will be very difficult and sad for you to spend another two years without work. Plus, I find it difficult to help fund an ambition which, sad as it is to say, I believe is too hard to make a reality. Hope you're good." 42The plaintiff says, and I accept, that, despite the warning of no more financial assistance, the deceased did subsequently offer her further financial assistance which she, wanting to make her own way, declined. 43In circumstances in which the deceased himself treated the plaintiff (in and after 2006) as a natural object of his bounty, the Court should conclude, as I find, that there are factors which warrant the making of the plaintiff's application. They are found in the fact that he did so.

(IN)ADEQUACY OF PROVISION MADE FOR THE PLAINTIFF: SUCCESSION ACT, S 59(1)(c) 44As it happened, the deceased made no provision at all for the plaintiff in his will dated 5 July 2006. 45It was after the will was made that she returned, at the start of December 2006, to live in Australia. It was on or about 19 December 2006 that he gave her, under cover of a Christmas card, a gift of a cheque for $25,000. It was in or about late June 2009 that he gave her another cheque for $14,300. On another occasion, at a time unable to be corroborated from available records, she says (and I accept) that he gave her a further $10,000. 46In making an evaluative judgment (informed by community standards as required by Andrew v Andrew (2012) 81 NSWLR 656) about whether the deceased left the plaintiff without adequate provision for her proper maintenance, education or advancement in life, the deceased's pattern of encouragement and paternal regard for the plaintiff in and following 2006, grounded upon their former de facto relationship and their shared parentage of a son and a grandchild, is of critical importance. 47By his own conduct, the deceased recognised the plaintiff as a member of his extended family in this period even if, as he was, mindful of a need to dampen any expectations she may have had. 48She is no longer a young woman. Consistently with her age, she has a need of ongoing medical care and a prospect of a need for further care. She presents as a person with a frail, rather than a hearty, bodily constitution. 49Although she recently received an inheritance from her late father's estate (valued at about $525,000), and she recently had a bank balance of about $175,000 (before required to deposit $150,000 of it with her solicitor on account of costs), her assets are minimal. She owns no car. She owns no real estate. She lives in a small rented unit. 50She lives frugally, with modest superannuation entitlements from her work in the US, supplemented by a fluctuating income from part time work as a sales assistant at a major department store. 51She is, materially, alone. She is unlikely to be able, for the foreseeable future, to turn to her son for any assistance she may need. In the conduct of these proceedings he aligned himself, unequivocally, with his stepmother and his stepsister. Any future relationship will need conscious, constructive effort on all sides. 52One does not need to place the plaintiff anywhere within the same range of commitment that the deceased had towards his wife and children to conclude, as I do, that he left her without adequate provision.

WHETHER PROVISION OUGHT TO BE MADE FOR THE PLAINTIFF: SUCCESSION ACT, ss 59(2) AND 60 53In approaching the question whether, for the purposes of s 59(2) of the Succession Act, any (and, if so, what) provision ought now to be made for the maintenance, education or advancement in life of the plaintiff, having regard to the facts known to the Court, I am conscious of a need to locate the deceased's relationship with the plaintiff in its historical context. 54I do not accept, as the defendant submitted I should, that the deceased's email of 20 June 2009 must be taken as marking a point of termination in any entitlements or expectations that the plaintiff might reasonably have had vis-á-vis the deceased. 55Nevertheless, it was not unreasonable for the deceased to warn the plaintiff of limits on his bounty and, in weighing up what should now be done, the Court should be mindful of this in seeking to strike the right balance. 56That much, as an abstract proposition, is acknowledged by counsel for the plaintiff in the way they have advanced her cause. They have endeavoured to work within the framework of the available, undistributed estate of the deceased, notwithstanding the absence in presentation of the defendant's case of any competing claims on the bounty of the deceased. 57Although the circumstances of the de facto relationship between the plaintiff and the deceased 30 years ago have required notice, as have the intervening years since the termination of that relationship, the Court's focus, in these proceedings, must return to the current day. 58In my assessment, it would not be appropriate (having regard to the nature, and course, of the relationship between the plaintiff and the deceased) to cast upon the estate of the deceased (or, through the estate, his widow and children) the whole of the burden of providing for the plaintiff's future accommodation and ongoing care. The amount of $500,000 sought on the plaintiff's behalf by her counsel is more than can be justified by reference to community standards as I perceive them to be. 59All things considered, I find that provision ought to be made in favour of the plaintiff by way of a legacy of $350,000. 60That order of provision will provide a solid foundation for the plaintiff's future, predicated upon an assumption that a substantial proportion of the costs she has incurred in the conduct of these proceedings will be recovered from the estate of the deceased by an order for costs made in the ordinary course.

CONCLUSION 61Subject to allowing the parties an opportunity to make submissions as to the form of orders to be made, I propose to make orders to the following effect: (1)ORDER that the time within which the plaintiff may bring an application for a family provision order be extended up to and including the time of commencement of these proceedings. (2)ORDER that provision be made for the maintenance, education and advancement in life of the plaintiff, out of the estate of the late Joseph Patrick Morris, by way of a legacy in the sum of $350,000. (3)ORDER that that legacy bear interest at the rate prescribed by s 84A of the Probate and Administration Act 1898 NSW from (and including) 1 September 2014 if not earlier paid. (4)ORDER that the costs of the plaintiff be paid out of the estate of the deceased on the ordinary basis. (5)ORDER that the costs of the defendant be paid out of the estate of the deceased on the indemnity basis.

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: 31 July 2014

Estate Morris: Grady v Deavin

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