Heffernan v Poyser

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER MACREADY Wednesday 23 February 2000 2490/96 - BRENDA GRACE HEFFERNAN -V- ROY POYSER JUDGMENT

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Ruth Bessie Jacklin who died on 7 January 1996. She was survived by the plaintiff, her niece and some children of her half sister. She made her last will on 13 July 1995. 2 In par 4 she gave pecuniary legacies to fourteen persons and organisations. The highest legacy was $10,000 and the lowest $500. The total of these legacies is $47,500. However, two of the legatees, because of the terms of their employment as care workers prohibiting them receiving legacies, have renounced the legacies. Accordingly the amount of the legacies payable is $42,500. 3 The residue goes to an organisation known as The Gospel Standard Trust. That is a Baptist Church organisation in the Calvinist style which is based in the United Kingdom and in America. 4 The plaintiff herself received a specific bequest of books and personal effects and furniture. Those were sold and, after allowing for costs of transport, the net amount she received was $2420. 5 The value of the estate, it now having been realised, is $107,500. 6 There are costs in this matter on the defendant's part of approximately $31,758 and on the plaintiff's part, if she is successful, $14,612, which is a total of $46,370, leaving a net estate after costs of only $61,130. 7 It is useful to deal with some of the history in the matter. The plaintiff was born on 25 September 1945. In 1950 when she was five years of age her mother died. The deceased herself in 1954 suffered the loss of her husband and then in 1955 the plaintiff, who was then aged nine, went to live with the deceased, who was her aunt. This was at Galston. Initially she went there because she had chicken pox and thereafter it was decided she would stay on. 8 As well as caring for her the deceased also cared for the plaintiff's three cousins, Graham, John and Phillip McCracken, whose mother had died. The deceased herself had never had children and, in effect, after the death of her husband took on the raising of these four children as her own family. 9 The plaintiff continued her life living with the deceased and by 1962 she had finished her schooling and enrolled at Sydney University, at which she studied teaching. 10 In 1964 the plaintiff moved from the deceased's home at Galston and commenced living with her father at Granville. By 1969 she was out in the work place working as a teacher in the country. Also in that year she married her present husband Dennis Heffernan. Thereafter she worked at Sydney Technical College and Granville Technical College. 11 The plaintiff and her husband had children, Matthew being born on 10 January 1972 and Gerard in 1975. Just before this the family moved to Tasmania for some years, connected with the plaintiff's husband's work. By 1977 the plaintiff had returned and commenced living at Wentworth Falls, where she has remained. 12 Meanwhile the deceased at this stage had moved from where she was living at Galston to a property called Pinegrove at Coonabarabran. This was acquired by Phillip McCracken with moneys that the deceased provided to him. They lived on the property for some years. 13 In 1982 the plaintiff started back at part time work after raising her family. In 1985 the deceased moved from the property Pinegrove into 3 Hagan Avenue, Coonabarabran. There was apparently a falling out between the deceased and Phillip over his proposed marriage. 14 In 1987 the plaintiff took the deceased on a holiday to Terrigal and they also visited the deceased at Coonabarabran. Also in this year the plaintiff commenced full time work. 15 In 1988 the plaintiff travelled to Tamworth to visit the deceased and in that year the deceased had a hip operation and was visited by the plaintiff at Tamworth. By 1995 there were some further visits still from the plaintiff to the deceased and it is worth recording that on occasions when these visits happened the plaintiff and her husband would hire a car to drive to Coonabarabran to see the deceased. They did not own one. 16 There were further visits during 1995 on a number of occasions and these all involved the plaintiff and her husband driving from Wentworth Falls to Coonabarabran. 17 The deceased died in 1996 and probate was obtained in due course. 18 The plaintiff can be an eligible person if she was part of the deceased's household and was in part dependent on the deceased. Clearly, on the facts as I have recounted them, she was a part of the household between 1955 and 1964. 19 The next question to be considered is the question of dependency. In Petroholis v Hunter (1991) 25 NSWLR 343 at 346 the Court considered the meaning of dependency. At p 346 the Court had the following to say: "I would respectfully disagree with the Master in both respects. The word 'dependent' is an ordinary English word, and whether a person is or has been wholly or partly dependent upon one another is a question of fact. No doubt one of the commonest forms of dependency is a financial one, in the sense that the dependence flows from the fact that accommodation, food, clothing and other necessities or amenities of life are provided by the person who owns or is otherwise entitled to the accommodation and pays for the other things. But I do not think that the word, as used in the statute or otherwise, has this very limited meaning. In ordinary parlance young children are properly and commonly said to be dependent on their mother as well as their father, regardless of where the money comes from. A contrary view, that young children are not dependent on their mother if she has no independent means, seems to me to be a misuse of the language. This accords with what Samuels JA said in Ball v. Newey (1988) 13 NSWLR 48 at 491, that 'dependent' in the ordinary sense of the word means the condition of depending on something or on someone for what is needed. If the correct view were that the context of the statute requires a limitation of the word to 'financial or material" matters as McClelland J said in Re Fulop Deceased or to 'other forms of dependence analogous to but distinct from financial dependence' as Samuels JA suggested in Ball v. Newey (at 491), then surely a mother's services to a young child satisfy the test. The child could not survive without the provision of those services; he or she needs them. To suggest that, in a money sense they are valueless, is simply wrong. If the provision of accommodation by a father for a young child, that is, having the child live in a house which he owns and lives in, can make the child partly dependent upon the father as it undoubtedly can, I am unable to see why the provision by a mother to her children, living with her, of the services essential for their well being does not make them partly dependent upon her. In my opinion it does. The same considerations apply to a step-child or his or her step-mother when the child lives with the step-mother and is looked after by her. I appreciate that a different view has been taken by others, as for example by Powell J in Dunn v. Public Trustee (Powell J 1 June 1989, unreported), but I would respectfully disagree with that view. In my opinion the plaintiff was partly dependent upon the deceased, certainly for many years of her childhood and probably until her marriage, although no doubt her dependence diminished in the latter years of this period." 20 In McKenzie v. Baddeley (Court of Appeal, unreported 3 December 1991), his Honour Mr Justice Meagher, although in the minority, further discussed dependency and described it as "financial economic or material dependency, not a mere emotional dependency". Importantly in that case the majority held that the word "partly" in the phrase "partly dependent" does not mean "substantially". 21 In Williams v. Legge (Court of Appeal 16 March 1993) the Court in considering a case of a young child needing mothering pointed out that the absence of financial dependence is not conclusive. 22 At the time the plaintiff went to live with her aunt she was only nine years old. The deceased raised her as part of her extended single parent family and provided the necessary emotional and physical care for a child of that age. Although the plaintiff's father paid upkeep and school fees it was the deceased who provided the accommodation in her own home. When the plaintiff went to university her father paid some board to the deceased until the plaintiff moved in with him in her last years at university. Given this period of some nine years there clearly is dependency both in an emotional sense and also in a physical or financial sense in respect of the provision of accommodation. 23 That however is not the end of the matter as the Court under s 9(1) of the Family Provision Act shall first determine whether there are factors warranting the making of the application. This expression has been dealt with by courts on a number of occasions. In Re Fulop Deceased (1987) 8 NSWLR 679 at 681 McClelland J described that expression in the following terms: "Secondly, the sub-section appears to be premised upon a distinction between 'factors which warrant the making of the application' on the one hand and circumstances which would justify the making of an order granting the application, on the other; otherwise the sub-section would be pointless. This means that in a particular case the Court might determine that there are 'factors which warrant the making of the application' within the meaning of the sub-section, and yet go on to decide that the application should fail. Since the sub-section applies only to certain classes of applicants it suggests that those classes of applicants need to demonstrate some basis for their claims additional to that required of other classes. The difference between the two sets of classes of applicants, in broad terms, seems to be that the classes not affected by s 9(1) (lawful and de facto spouses and children) are as such generally regarded as natural objects of testamentary recognition by a deceased (of the Wills Probate and Administration Act 1898, s 61B), whereas the classes affected by s 9(1) (former spouses, and some time dependent grandchildren or household members) are as such not generally so regarded. This suggests that the 'factors' referred to in the sub-section are factors which when added to facts which render the applicant an 'eligible person' give him or her status of a person who would be generally regarded as a natural object of testamentary recognition by a deceased. That the sub-section is directed at a plaintiff's status as applicant in some such sense as this perhaps finds some support in the statutory direction to the Court, in the event that it determines the preliminary question adversely to the plaintiff, not to go on to determine the application, but 'refuse to proceed with the determination of the application'." 24 In Churton v. Christian (1988) 13 NSWLR 241, the Court approved this statement. Priestley JA at p 252, after setting out and approving the statement added: "To this I would add that although the classes affected by s 9(1) are not necessarily generally regarded as natural objects of testamentary recognition, in some cases members of those classes may, when the circumstances of their relationship with the deceased are set out, immediately be seen to be persons who would be regarded by most observers as, in their particular circumstances natural objects of testamentary recognition." 25 These principles have been applied at first instance for many years. 26 There has been in recent times further attention to this matter in the Court of Appeal in the case of Brown v. Faggoter, a decision given on 13 November 1998, which is a decision of Sheller JA, Sheppard AJA and Fitzgerald AJA. The main judgment was given by Fitzgerald AJA, who seemed to suggest that an application might be warranted if the application has reasonable prospects of success. This seems to be a somewhat different and perhaps easier test than that which the Court of Appeal approved in Churton v. Christian. I will consider the matter on both bases, given that there may be some flux in the state of the law in this regard. 27 In this case the deceased treated the plaintiff as a daughter for nine years and thereafter took an active interest in her life. This was reciprocated by the plaintiff when she maintained her connection with the deceased until the death of the deceased. The relationship between them bespeaks of a familial closeness. 28 I am satisfied that in the traditional sense there are factors warranting the making of the application. 29 I will now consider the substance of the matter to, inter alia, see if she has reasonable prospects of success. In applications under the Family Provision Act the High Court has recently in Singer v. Berghouse (1994) 181 CLR 201 set out the two stage approach that a Court must take. At p 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 inter-relationship 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 become 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." 30 As directed by the High Court I turn firstly to the plaintiff's situation. She is aged fifty-four, married, and has no children who are financially dependent. She is a head teacher of languages at Blacktown TAFE. She earned last year a taxable income of $56,670. Her husband, who is part-time and not in a substantive position, last year earned $55,504 and in earlier years somewhat less as he was caring for the children. 31 They have substantial assets. There is firstly their home at Wentworth Falls worth $375,000 and vacant land in Lyle Street, Wentworth Falls worth $100,000. Those properties are unencumbered and they have no liabilities. 32 They have between them some substantial savings. The plaintiff has savings of $44,878.78 and her husband $48,007.19. This is a total of $92,885.97. 33 They also have interests under superannuation arrangements. The plaintiff's retirement figure is presently $117,000 and her husband's $74,000. They do however have no plans for retirement at this stage. 34 There will unfortunately be in the organisation in which they work some restructuring. This causes uncertainty and it is proposed apparently that the Department will shed at least 600 positions. People have already started to take redundancy payments. If the plaintiff and her husband were retrenched they will receive no superannuation but will receive redundancy payments, the plaintiff $74,000 and her husband $35,000. 35 In 1997 the plaintiff and her husband had a trip overseas after they had finished some work in Vietnam. That trip took them away for seven weeks but in terms of their situation and what they have done over the years I do not think in any sense this can be described as an extravagance. It is a short trip after a long life at work and bringing up a family. 36 It is of course necessary to consider the relationship between the plaintiff and the deceased. There was one minor disagreement in 1964 which led to the plaintiff moving back to her father, but that was soon patched up and thereafter it is clear, from the contact, there was a good relationship. Clearly the plaintiff was of assistance to the deceased and, notwithstanding distance, made the effort to keep contact. She did, for instance, things like each year doing some shopping for her in Sydney and taking that to her. 37 It is necessary to consider others having a claim on the bounty of the deceased. One of these are the defendants who are the executors. They received a legacy of $5000 jointly. They are good friends of the deceased. Mrs Poyser ceased her normal work in 1990 and she now assists her husband in his business as an apiarist. Their combined taxable income is in the order of $54,000. They own a home at Coonabarabran worth $100,000, some blocks of land upon which they carry on the business as apiarists worth $113,000 and they have savings of some $10,000. Apart from that they have cars and no liabilities. 38 Mrs Poyser met the deceased originally as a home carer and obviously they remained friends after she ceased. They had different religions but obviously did discuss religious matters and tolerated each other's position. 39 Another person from whom evidence has been received is Marjorie Jacklin who received a legacy of $10,000. She was a niece of the deceased and lived in Tasmania. In general she would see the deceased every couple of years and she herself assisted the deceased in 1986 with some work on her real estate. She owns her house worth $89,000, has minimal savings and lives on the aged pension. 40 Another person who has given evidence is Margaret Layton. She is a friend who met the deceased in 1960 through the Ryde Baptist Church. Her husband was a pastor at that church. They lost personal contact in 1977 when the deceased moved to Coonabarabran. She did not see her thereafter but maintained phone contact. They have a house worth $450,000 and investments of $247,800. They have a dependent child and now live on the War Service Pension. 41 No other person who received legacies has put on any evidence as to their financial position. Accordingly the Court can assume that it need not take into account their financial situation. 42 Some of the bequests were to local organisations, for instance, the Coonabarabran Ambulance, and that probably resulted from the care she had from them in being transported to hospital. The bequest to the hospital physiotherapy department might also result from the care she was given. There was a legacy of $1000 to the Seventh Day Adventist Church in Coonabarabran although it seems that the deceased did not follow that faith. 43 The other main one concerned is the residuary beneficiary which is the Gospel Standard Trust. Some earlier wills contained provisions for this organisation to benefit. There is evidence that the deceased received letters and correspondence from the Trust and so clearly the deceased had some interest in it. There is however no suggestion of any physical or financial benefit received from that Trust by the deceased. 44 The primary function of the Trust appears to be the printing of doctrinal tracts. Most of these are from earlier times, back to the 1600s, which deal with the views supported by the organisation. 45 It seems to me that although clearly the testatrix had an interest in the organisation she had no obligation towards them. 46 The critical question in this case is whether the plaintiff has been left without adequate and proper provision for her maintenance, education and advancement in life. The details of the way in which the plaintiff says she has been left without such provision are encompassed in pars 3 and 4 of her affidavit of 11 February 2000. They are in the following terms: "3. I continue to live with my husband Dennis in a house owned by us jointly at 42 Mulheran Avenue, Wentworth Falls, which is unencumbered. The repairs and re-building of the house are incomplete. The work yet to be done is: demolish and re-construct the main bedroom; re-line the study/sunroom; re-pier family room; remove bathroom and construct new bathroom and separate laundry (there is presently no laundry); re-roof garage; build two small decks to provide access to doors; replace gutters and downpipes; build a retaining wall and new back fence. I have received from an architect, Jouko Keppo, an estimate of cost of $76,200 to perform this work. I estimate that our house has a market value of about $375,000. The repair and building work carried out to date has been done by my husband Dennis. 4. My husband and I also jointly own a block of land at Lyle Street, Wentworth Falls. It has always been our intention to build on this land for Matthew. We now have an approved development application for building on the land and an owner-builder's licence to build there. I expect that Matthew (who is a carpenter) will build the house himself and with the assistance of other trades people. Dennis and I intend to pay him for his work and after completion we expect Matthew, his partner Linda, and their one-year-old son Luke, to live there. In the long run the house will provide a small rental income to us in our retirement. I believe that the market value of that land is about $90,000. I estimate the building will cost about $106,000. The house will be a two bedroom weatherboard home and we expect it to be built this year. Matthew and Linda presently live in a very small rented house at Katoomba, without fences and with no proper heating. We are continuing to support Matthew because he still suffers effects from his school accident in the nature of a post-traumatic stress disorder." 47 In respect of par 3 there are a number of things to note about the quotation for the work estimated to cost $76,200. Firstly, the photograph which has been tendered in evidence certainly supports the need for some work. The house was clearly old and the plaintiff's husband has been working on it and doing restoration work for quite some years. Secondly, it is also apparent that only some work is absolutely necessary at the present stage. The items from these that would be necessary I think would be the garage $3000, roofing $2000, fencing $4000 and decks, $3000. 48 Some of the work appears highly desirable. For instance, the creation of a new laundry, although this cost is somewhat large at $33,000. Others one would describe as being desirable but not necessary at the moment. Into this category would fall the repairs to the master bedroom at $15,000, the study at $3000 and family room at $15,000. 49 In par 4 there is the proposal to build on Lyle Street. This was put forward as a means of providing for their retirement or providing a rental income, rather than having a non-income producing asset. They virtually have sufficient funds in their own savings at the moment to do this work. However, it appears that the real motivation for doing the work now is to provide a home for the plaintiff's son who will rent the house. That son suffered some horrific injuries at school when his face was substantially destroyed in an accident in the playground. He brought proceedings and recovered in respect of that loss and will be undergoing surgery for which he has received compensation. He has left school now and is in a relationship with a young lady and needs housing urgently. The proposal for building on Lyle Street seems to be to give the son some important work to do and will be probably a good psychological boost for him. Certainly the plaintiff and her husband feel this is of importance. With this I concur. 50 Even though this may be the primary motivation it should be appreciated that the proposal is a sensible one given the ages in life of the plaintiff and her husband, as it will provide an income producing asset which can be held during their retirement. 51 As far as the repairs are concerned, obviously given the state of the house some of them should continue to be done now and others may well be done later, if other funds became available to them. Of course one can stand back and perhaps suggest that the building of the house at Lyle Street or the repairs could be done out of the funds that the plaintiff and her husband will receive from superannuation. There are a number of reasons which perhaps make this a not so powerful an argument. 52 First, there is no certainty as to when retirement will take place. The earliest possible date is when the plaintiff turns fifty-eight. 53 The second matter is that if there is retrenchment, of which there is evidence of the possibility, the amount that will be received is substantially less than the superannuation. 54 Thirdly, there seem to be good family reasons for doing the building work on Lyle Street at this stage. It will provide a worthwhile asset and have the appropriate psychological advantage for the son. 55 Fourthly, the repair work can be planned over the next few years and that can be done by the plaintiff's husband over time. 56 The question, put in slightly different terms, is whether the plans which the plaintiff and her husband have and thus the claim which they bring is extravagant in the light of their resources. 57 The major consideration is that in respect of the residuary gift there is no claim on the bounty of the testator. The plaintiff is also the closest relative of the deceased and was treated in my view like a daughter by the deceased. In my view the provision for the plaintiff is inadequate and there should be provision of some small legacy which can come out of the residuary bequest. Therefore, it follows that the plaintiff has prospects of success and thus on the alternative basis there are factors warranting the making of the application.

58 The orders that I make are as follows: 1. The plaintiff receive in addition to the bequest in the will a pecuniary legacy of $17,500. 2. The plaintiff's costs on a party and party and the defendant's costs on an indemnity basis to be paid or retained out of the estate of the deceased. The exhibits may be returned. (Discussion ensued.) 59 At this stage I will vacate the costs order and note that there will be submissions on costs. oOo

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