Hardiman-Burt v Gordon [2008] NSWSC 395 | Case summary

3780 of 2006 ROBABEH HARDIMAN-BURT -v- ALAN GORDON JUDGMENT 1 HIS HONOUR: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 18 July 2006 Robabeh Hardiman-Burt claims an order for provision for her maintenance, education and advancement in life out of the estate and/or notional estate of her late husband Leslie Gordon Burt (to whom I shall refer as "the Deceased"). 3 The Deceased died, aged 78, on 25 September 2005. He left a will dated 30 January 2004, probate whereof was on 24 January 2006 granted to Alan Gordon, the executor named in such will (who is the Defendant to the present proceedings). 4 The Deceased had been married twice, his first wife Audrey, whom he had married in the late 1950s, died on 13 December 1994. Of that marriage were born two children, being Gordon (who was born on 2 November 1960 and is now aged 47) and Amanda (Mrs White) (who was born in February 1962 and is now aged 46). The Deceased, after graduating in dentistry from the University of Sydney in about 1950, then went to England, where he spent almost the entirety of his professional life. However, he regularly visited Australia, especially after the death of his first wife and after his marriage to the Plaintiff on 22 October 1995. 5 The inventory of property discloses the following assets and the respective values attributed thereto: Unit 803/121 Ocean Parade, Coffs Harbour $450,000 Commonwealth Bank pensioner security account, Manly branch, $39,781 Interest accrued $59 Nationwide Building Society account, Swindon, UK Branch $8,900 Natwest Bank, Bolton Branch $2,700 Colonial First State First Choice Investments Account $307,245 Toyota Camry Motor vehicle $19,000 6 At the time of his death the Deceased and the Plaintiff were the registered proprietors as joint tenants of their matrimonial home, situate at and known as 3 Seamist Place, Coffs Harbour. That property passed to the Plaintiff by survivorship. 7 By his will the Deceased gave the Ocean Parade home unit to his children Gordon and Amanda equally. He gave the residue of his estate equally among the Plaintiff and his two children. Clause 5 of his will is in the following terms: I record that in the event of my death before my wife she will receive by survivorship the house property we jointly own at 3 Sea Mist [ sic ] Place, Coffs Harbour together with half the United Kingdom National Health Pension and Widow's Pension from the United Kingdom. She has already received half of the proceeds of sale of a flat in the united Kingdom in an amount of approximately GBP 100,000. 8 In calculating the value of the estate available for distribution the costs of the present proceedings must be taken into account, since the Plaintiff, if successful in her claim, will normally be entitled to an order that her costs be paid out of the estate of the Deceased, whilst the Defendant, irrespective of the outcome of the proceedings will be entitled to an order that his costs be paid out of the estate. It is estimated on behalf of the Plaintiff that her costs will total almost $61,000, whilst it is estimated on behalf of the Defendant that his costs will total almost $42,000. 9 For the purposes of the present proceedings the value of the Ocean Parade unit is now estimated to be $410,000 - $430,000 (such estimation being somewhat less than the estimated value attributed in the inventory of property). Accordingly, it is prudent to proceed upon the basis that the value of the estate available for distribution will be about $685,000 - $705,000. 10 At present the residue of the estate is held in a CBA account amounting to almost $337,000 (from which income tax of $10,000 must be paid). It follows, therefore, that under the terms of the Deceased's will the Plaintiff will be entitled to about $75,000 (being one third of the net residue of $327,000 after the costs of the present proceedings in a total amount of $103,000 have been deducted therefrom - that is, one third of about $224,000). 11 There was placed in evidence a quantity of correspondence from the UK National Pension scheme, which disclosed, first, that the Deceased was under a serious misapprehension concerning the amount of the British Pension to which the Plaintiff would be entitled upon the death of the Deceased; and, second, that, in any event, there had been, inadvertently, a substantial overpayment of such pension to the Plaintiff by the British authorities. 12 It would appear that the Deceased was of the belief that under the British NHS Pension Scheme the Plaintiff would receive a British pension in an amount reflecting the Deceased's own entitlement under that Scheme. Although the evidence is far from clear in this regard, it would appear that the Deceased believed that under the NHS Pension Scheme the Plaintiff would receive 23,852 pounds (that is, about $52,000) a year (or, perhaps, one half of that amount). She is, in fact, entitled to receive under that Scheme only a widow's pension at an annual rate of 2,734 pounds (that is, about $5,900) a year. It seems, therefore, that the Deceased was under the impression that after his death the Plaintiff's income from the British NHS Scheme would be about eight times (or, perhaps, four times) greater than it in fact is. (The reason for the Plaintiff's pension being so much less than the Deceased believed appears to be that the Deceased had already retired from practice as a dentist at the time when he married the Plaintiff.) 13 The British NHS Pension Scheme required repayment of the sum of 8571 pounds (being the equivalent of about $22,000) which it had overpaid to the Plaintiff. Part of that overpayment, in an amount of 2670 pounds (about $6861), has been repaid by the estate of the Deceased, and I gather that the Defendant is looking to the Plaintiff for reimbursement of that sum (presumably, out of the Plaintiff's interest in the residue of the estate). The balance of the overpayment is being deducted from the Plaintiff's pension entitlements, and she will receive no pension until that balance has been repaid. 14 At the present time the Plaintiff is residing in the former matrimonial home at 3 Seamist Place, Coffs Harbour, which has passed to her by survivorship. The Plaintiff attributed a present approximate value of $350,000 to that property. According to the Plaintiff, her other assets at the commencement of the proceedings consisted of: Motor vehicle (purchased from estate) $19,000 Commonwealth Bank account $1,000 Furnishings $5,000 HSBC account $700 Bank of America account US$1500 15 However, after the commencement of the present proceedings the Plaintiff in July 2007 sold for $15,000 the motor vehicle which she had purchased from the estate for $19,000 (that purchase price, by agreement with the Defendant, to be offset against the Plaintiff's interest in the estate). The plaintiff then purchased a less expensive motor vehicle for $4,500. She said that she proposed applying the difference between that purchase price and the sale price of $15,000 to supplement her living expenses pending the outcome of the present proceedings. It should also here be recorded that at the time of the hearing there was a credit balance of US$6,000 in the Plaintiff's Bank of America account. It was also the Plaintiff's evidence that in the HSBC account there was about 58 pounds at the time of the hearing. 16 Apart from her indebtedness to the British NHS Pension Scheme, the Plaintiff's liabilities consist of an indebtedness to the estate in a total amount of $44,300 (being the purchase price of the motor vehicle ($19,000) and the Plaintiff's liability to repay to the estate the sum of $25,300, which represents withdrawals made by the Plaintiff from the Deceased's bank account shortly after his death). 17 The Plaintiff's only income, apart from her entitlement (after the overpayment has been repaid) to receive the British pension in an annual amount of almost $5900, is a widow's pension from Centrelink, in a present amount of $464 a fortnight. The Plaintiff said that she had had private health insurance since arriving in Australia, but shortly before the institution of the present proceedings, she had cancelled that membership, as she was unable to afford the fees, in an amount of about $1000 a year. 18 The Plaintiff set forth details of her expenses, in a total amount of $42,509 a year. 19 The Plaintiff has taken out a mortgage on the Seamist Place property with Bluestone Equity Release for an amount of $52,000. She said that she needed that money for the payment of bills and living expenses. There is presently an amount of about $62,000 outstanding under that mortgage, which is of the nature known as a "reverse mortgage". (I gather that the Plaintiff will not be required to repay principal or interest thereunder during her lifetime). 20 The Plaintiff, who was born in Iran on 20 May 1946, is presently aged 62. Although her first name is Robabeh, she is commonly referred to as "Sudi". She left Iran in about 1970 and went to the United Kingdom on a student visa. When the Plaintiff was aged 28 she married in the United Kingdom, that marriage ending about twelve months later. She did not receive any property settlement or other financial benefit from that marriage. 21 The Plaintiff first met the Deceased in the United Kingdom in the early 1970s, when she began seeing him in a professional capacity for dental treatment. The relationship between the Plaintiff and the Deceased remained a purely professional one until after the death of the Deceased's first wife Audrey, in 1994. The Plaintiff and the Deceased married in the United Kingdom on 22 October 1995. For some years before that marriage the Plaintiff had been residing in the United States of America, where she had been working as a nurses' aide. However, from 1978, when she had first gone to the United States, she was in the practice of regularly returning to the United Kingdom to visit friends and relatives, and of continuing to visit the Deceased professionally throughout that period. 22 According to the Plaintiff, when she relocated to London in order to marry the Deceased, her only significant asset was a motor vehicle, which she had to dispose of quickly. She said that she also sold most of her furniture when she relocated to the United Kingdom. After paying expenses associated with that relocation, the Plaintiff had only US$4,500 when she returned to the United Kingdom for her marriage to the Deceased. 23 After their marriage the Deceased sold his former matrimonial home in London and purchased a new London residence, being a two bedroom apartment at 12 Montgomery Court, Chiswick, in the joint names of himself and the Plaintiff (although the Plaintiff had not made any financial contribution towards its purchase). The Plaintiff said that she was largely responsible for the painting and decorating of that apartment and for the selection and purchase of furniture and furnishings. The apartment was sold in February 2003 for about 210,000 pounds. From the sale of that apartment the Plaintiff received, by arrangement with the Deceased, about 100,000 pounds. The Plaintiff provided details of how that amount was expended by her. (She said that a considerable part of that amount was expended on trips of herself and the Deceased to Australia, and on social occasions, including restaurant meals and visits to clubs and casinos). 24 It emerged that in 1997 the Deceased sold an apartment which he owned in Majorca, in the Balearic Islands. The Plaintiff said that from the proceeds of that sale she received from the Deceased about 10,000 pounds. However, a witness, Peter Hearn, said that the Deceased told him that from those proceeds of sale he had paid 40,000 pounds to the Plaintiff. In her affidavit in chief the Plaintiff omitted any reference to the Majorca apartment or to any gift to her from the Deceased of any part of the proceeds of the sale thereof. 25 It also emerged under cross-examination that the Plaintiff's marriage to the Deceased was not (as her affidavit evidence would have the Court understand) her second marriage. The Plaintiff had, in fact, been married on two other occasions, and her marriage to the Deceased was the Plaintiff's fourth marriage. Neither did she make any reference in her affidavit evidence to various withdrawals from the Deceased's bank account on the day following his death and in the subsequent fortnight, such withdrawals totalling $25,300. (In fairness to the Plaintiff, it should here be recorded that it was her evidence that at the time when she made those withdrawals she was of the belief that she was the sole beneficiary under the Deceased's will.) 26 What appears to be a significant gambling problem was acknowledged by the Plaintiff only in an affidavit in reply. Various other facts concerning the Plaintiff's financial and material circumstances (such as her continuing citizenship of the United States and the continued maintenance by her of bank accounts with the Bank of America and HSBC) emerged only under cross-examination. 27 It also emerged during the course of the hearing that while they were residing in England the Plaintiff was also given by the Deceased a motor car and a computer. 28 The Plaintiff said that during their marriage she and the Deceased enjoyed a comfortable lifestyle. They went out regularly to restaurants, and to the theatre, cinema and other social events. They both enjoyed gambling, at racecourses and at gambling establishments. They shared their living expenses, sometimes the Plaintiff paying and sometimes the Deceased paying. 29 Throughout the marriage the Plaintiff performed all household duties, which included all cooking, cleaning, washing, shopping and other domestic chores. She had the assistance of a cleaner for one day a week during their period in London. 30 It was the Plaintiff's evidence that the Deceased looked after all the financial arrangements for both of them, including the lodging of income tax returns and the like. The Plaintiff was not aware of the details of their financial situation, but she said that money was never an issue for them, and that they lived a comfortable lifestyle without having to be conscious of how they spent their money. 31 At the suggestion of the Deceased, he and the Plaintiff relocated to Australia in 2002. From the time of their marriage until they moved permanently to Australia, it was the practice of the Plaintiff and the Deceased to travel to Australia each year for at least three or four months. On those visits they generally stayed with friends, but often also in hotels. During their marriage the Plaintiff and the Deceased also made other overseas trips; they travelled to other parts of Europe (including Russia) and to India. 32 It was the Plaintiff's evidence that it was she who essentially had been responsible for all the arrangements concerning the purchase and the furnishing of the investment apartment at Coffs Harbour in 1998, and, subsequently of the matrimonial home at Seamist Place, Coffs Harbour. 33 According to the Plaintiff, the Deceased and his daughter Amanda (who resides in United Kingdom, where her husband is a dental surgeon) were estranged at the time of the Plaintiff's marriage to the Deceased. The Plaintiff said that she encouraged the Deceased to re-establish contact with Amanda, which he then did. The Deceased's daughter did not agree with the Plaintiff's asserted involvement in the renewal of contact between father and daughter. 34 In early 2003 the Deceased was diagnosed with an abdominal aortic aneurism, and he underwent surgery in Sydney in May 2003. He was subsequently diagnosed with bone cancer at the beginning of 2005, and his health deteriorated from that time. The Plaintiff gave evidence of her role and responsibilities throughout the periods of the Deceased's ill health and during his declining years. 35 The Plaintiff herself is generally in good health, although, as a result of lifting the Deceased when he was bedridden, she has developed back problems, which now require physiotherapy treatment once or twice a week. She also takes painkillers for her back condition. 36 The claim of the Plaintiff must be approached in the light of the competing claims of the two children of the Deceased. Each of the Plaintiff's son and daughter has placed evidence before the Court, by way of affidavit, concerning the nature of the respective relationship of each with the Deceased and concerning the nature of the relationship between the Plaintiff and the Deceased. However, neither the Plaintiff's son nor the Plaintiff's daughter has placed before the Court any information concerning their respective financial and material circumstances. Neither of the Plaintiff's children, however, received any benefit from the estate of their mother (although they were named as beneficiaries under her will), since she had no assets in her own name (despite having worked in and managed the Deceased's dental practices for forty years). 37 It is in the light of the foregoing facts and circumstances that the Court should proceed to a consideration of claim of the Plaintiff. 38 I have had the benefit of receiving a written outline of submissions and a chronology from Counsel for the respective parties. Those documents will be retained in the Court file. 39 The Plaintiff, as the widow of the Deceased, is an eligible person within paragraph (a) of the definition of that phrase contained in section 6 (1) of the Family Provision Act. As such, she has the standing to bring the present proceedings. It should also be recognised that each of the Deceased's children also is an eligible person in relation to the Deceased, being such within paragraph (b) of the foregoing definition. 40 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 the applicant has been left without adequate provision for her proper maintenance. 41 The High Court in Singer v Berghouse (at 209-210) said that the determination of the first stage calls for an assessment of whether the provision (if any) made was inadequate for 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.

42 In the instant case the marriage of the Plaintiff and the Deceased lasted for almost ten years. Throughout that period, despite the assertion to the contrary made by the Deceased's two children, the marriage appears to have been a happy and devoted one. It is relevant here to record that on at least two occasions, on 7 May 1998 and again on 1 December 1999, the Deceased and the Plaintiff made mutual wills (giving the entirety of the testator's estate to the survivor, and thereafter in the 1998 will giving the estate to the Deceased's son, and in the 1999 will giving the Montgomery Court flat to the Deceased's daughter and the residue of the estate to the Deceased's son). Subsequently, on 24 November 2005 (after the death of the Deceased) the Plaintiff made a fresh will, leaving her estate to the Deceased's son. She said her reason for doing so was that she "believed that that was the wish of Leslie", and that she "believed that it was appropriate to leave any assets which I inherited from Leslie to his family and in accordance with his wishes." 43 In consequence of her marriage to the Deceased, and the provisions of the will of the Deceased, the Plaintiff will receive, by survivorship, the matrimonial home at Seamist Place, Coffs Harbour, and a monetary sum of about $75,000. In addition, she will receive a widow's pension under the British NHS Pension Scheme, although in an amount far less than the Deceased apparently thought she would be entitled to receive. 44 It cannot be emphasised too strongly that it is the obligation of an applicant for provision to place before the Court as fully and as frankly as possible all information concerning the applicant's financial and material circumstances. 45 In the instant case, the Plaintiff has failed to do so. I have already referred to a number of matters concerning such circumstances which emerged either in the Plaintiff's affidavit evidence in reply or only under cross-examination during the course of the hearing. Those and other matters included the benefit which the Plaintiff received from the sale of the Deceased's apartment in Majorca; various withdrawals from bank accounts of the Deceased which she made shortly after his death; the maintenance by the Plaintiff of various bank accounts in the United States of America, of which country she remains a citizen; the fact that in the HSBC account at Hammersmith in the United Kingdom the Plaintiff has a credit balance in the equivalent of $36,208; and the gambling activities of the Plaintiff. 46 It emerged during the course of the hearing that throughout the period from the Deceased's death until 31 December 2006, a period of a little over 15 months, the Plaintiff had expended moneys totalling $206,000. What those moneys were expended upon did not emerge with any precision from the evidence, although the Plaintiff conceded that part at least of those moneys went to fund her compulsive gambling habit. 47 The financial circumstances of the Plaintiff are such that her income is not adequate to meet her outgoings. Whilst she is secure in her accommodation, she finds difficulty in maintaining her residence and in meeting the outgoings thereon. Her lifestyle is modest, apart from her gambling activities. In this latter regard it was the Plaintiff's evidence that she had been consulting a psychologist, Mr Ian McCombie (who provided two affidavits on her behalf in the present proceedings), and that, at his suggestion, she has been attending meetings of Gamblers Anonymous on a regular basis since early 2007. She said that her compulsive gambling resulted from depression, consequent upon the death of the Deceased. In her affidavit of 29 August 2007 she said that she "do[es] not believe that my gambling addiction is as out of control as it was in the first twelve months after Leslie's death", and that she indulges in binge gambling on no more than one or two occasions each month. 48 I have already observed that the Deceased, by clause 5 of the will, was under the mistaken belief that the Plaintiff would, after his death, receive a far greater income than is in fact the case. 49 It is relevant to the determination of the first stage recognised by the High Court in Singer v Berghouse, that the marriage was of a duration of only ten years, in which the Plaintiff was not required to bring up children, and throughout which she had the benefit of the Deceased's beneficence. During the course of that ten year marriage the Plaintiff received from the Deceased two significant lump sums of money. As a consequence of the death of the Deceased she has an unencumbered residence (although she has now taken out a mortgage secured upon that residence) and a fund which, in the absence of the present litigation, would have given her in excess of $100,000. 50 It was submitted on behalf of the Defendant that, in consequence of her various pension entitlements, from Australia ($13,652); from the United Kingdom in respect of the Deceased's NHS contributions (2,734 pounds a year, plus CPI increase); from the United States of America (to which pension she will become entitled at the age of 62, on 20 May 2008); and from the United Kingdom as a widow (in an amount unquantified), the Plaintiff will be entitled to receive a total income in excess of $42,000 a year. 51 It appears to me, however, that the Defendant is not entirely correct in the foregoing submissions. It is my understanding of the evidence that the Plaintiff is entitled to only one British pension (being that under the NHS Pension Scheme), in an amount of 2,734 pounds a year. I do not understand her to be entitled, in addition, to receive from the United Kingdom what might be described as an ordinary widow's pension. Further, whilst the Plaintiff may in the future become entitled to an American pension (in an amount unquantified), the Court is required, by section 7 of the Family Provision Act to have regard to "the circumstances at the time the order is made", and not to circumstances which may only arise in the future. It could also be argued that the Plaintiff is not presently receiving any British NHS Pension, and that it will be some years before she will receive such pension (after the overpayment has been met from her pension entitlements). 52 I am satisfied that the Plaintiff, by reason of the terms of the will of the Deceased, has been left without adequate provision for her proper maintenance. That conclusion is largely based upon the incorrect belief of the Deceased that the Plaintiff would receive a pension income from the United Kingdom in a far greater amount than in fact she is entitled to receive. 53 Since the Plaintiff is secure in her accommodation and since she did not express a desire to change that accommodation, it seems to me that it is appropriate that she should receive, in addition to the one third interest in residue, a legacy from the estate of the Deceased which will enable her to enhance her somewhat modest lifestyle, and provide a fund to meet unexpected contingencies. 54 I consider that an appropriate amount for such a legacy is $150,000. The effect of a legacy in that amount will be that the net residue will be reduced from about $224,000 to about $74,000 and that the benefit which each of the Plaintiff and the two children of the Deceased will receive from residue will be reduced from about $75,000 to about $25,000. Thus the total monetary benefit which the Plaintiff will receive from the estate will be increased from about $75,000 to about $175,000. 55 Accordingly, I make the following orders: 1. I order that, in addition to the benefit given to her by the will of the late Leslie Gordon Burt ("the Deceased"), the Plaintiff receive a legacy in the sum of $150,000, such legacy not to bear interest if paid on or before 29 May 2008, and if not so paid to bear interest at the rates prescribed for unpaid legacies under the Probate and Administration Act 1898. 2. I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased. 3. The exhibits may be returned. **********

Hardiman-Burt v Gordon

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Judgment (11 paragraphs)

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