HURST v PUBLIC TRUSTEE

COUNSEL : Mr G. McGrath for plaintiff Mr A. Scotting for defendant SOLICITORS : Gary Stewart & Associates, Manly, for plaintiff Stewart Green Mijovich for defendant CATCHWORDS : Family Provision. Application by a brother of the deceased who had cared for the deceased during his later life. Promises by the deceased that he would leave the plaintiff half of the house. In fact only 2/3rds left to the brother. Order made increasing provision for the brother. Re Fulop Deceased (1987) 8 NSWLR 679; Churton v Christian (1988) 13 NSWLR 241; Brown v Faggoter 13.11.98 Cour of Appeal; Singer v Berghouse (1994) 181 CLR 201; CASES CITED : Goloski v Goloski 5.10.93 Court of Appeal; Luciano v Rosenblum (1985) 2 NSWLR 65; Elliott v Elliott 24.4.86 Court of Appeal; Shearer v The Public Trustee Hawke v The Public Trustee Young J 23.3.98. DECISION : Paragraphs 37 -39

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

2874/99 BARRY STEPHEN HURST v PUBLIC TRUSTEE - ESTATE OF JACK FRANCIS HURST

JUDGMENT 1 MASTER: This is the hearing of a Family Provision Act application in respect of the estate of the late Jack Francis Hurst, who died on 20 November 1998 aged eighty-six years. He had been one of fifteen brothers and sisters, and was the eldest brother. His wife pre-deceased him and he had no children. No other type of claim is made in the summons filed in this matter. 2 The plaintiff is the deceased's youngest brother. By his will, which was made on 27 September 1988, the deceased left two-thirds of his estate to his sister, Joyce Olive Buckley, and one-third to the plaintiff. 3 The estate is a modest one. It comprises a property at 23 Kourung Street, Ettalong. There is a sworn valuation of $235,000, and there are estimates of other valuations being in the range of $210,000 and $220,000. The latter one was expressed in terms of being an appraisal, and accordingly, I will adopt the value of $235,000. There is cash in the estate of $37,849, making a total gross value of $272,849. 4 There are a number of matters to be deducted. There will be the Trustee company's commission of $8,000, costs on sale of about $8,000, and in addition, if the plaintiff is successful, there will be the plaintiff's costs in these proceedings, which are estimated at $23,390, and the defendant's costs, which are estimated at some $20,000. This leaves a net estate of $213,459. 5 It is useful to give a brief chronology of some of the relevant events. The deceased was born in 1911, and the plaintiff, his younger brother, was born on 16 June 1937. The family originally lived in the Mascot and Botany area. About forty to fifty years ago the deceased moved to the Central Coast with his wife. They did not have children. The deceased's wife died in August 1988, and the deceased lived alone at Ettalong. He was then a pensioner and he remained so until his death. 6 On 27 September 1988 the deceased made his will, to which reference has been made. It was in about December 1988, in one of the regular visits between the deceased and the plaintiff, that the deceased said to him, that is the plaintiff, that the plaintiff was getting half the house, and he then asked the plaintiff to pay half the rates for the house. From then on the plaintiff commenced making those payments, and I am satisfied that they were made over the years thereafter. 7 In November 1995 the deceased was diagnosed with bowel cancer and had some surgery. He stayed with his sister, the beneficiary, for a week, and then came home to Ettalong. From that time until March or April of 1996, the plaintiff used his leave entitlement and holiday pay to come up and look after the deceased during this period. 8 In March or April 1996 the plaintiff took voluntary redundancy from his job as a storeman with the Navy. At his brother's request he went up to Ettalong to live with him. The plaintiff could have taken some other employment, but decided to take redundancy, partly motivated by the need to care for his brother, with whom he was obviously close. The plaintiff was then fifty-nine years of age. He gave up his rented accommodation at Mascot, moved all his effects to Ettalong, and moved into the deceased's house, which was a two-bedroom fibro house with an iron roof. 9 Thereafter he continued looking after the deceased. He started paying for most of the groceries, and he paid for half the electricity, telephone bills, and rates and those matters. In 1996 the plaintiff himself started to receive social security payments, and is now on a pension. 10 On 20 November 1998 the deceased died. For the plaintiff to be able to make a claim under the Act it is necessary that he be an eligible person. He can be an eligible person if he has been a member of the household of the deceased, and also at that or some other time had been partly dependant upon the deceased. In the present case it is clear, because of the move into the house of the deceased, that the plaintiff was part of the household. 11 Without going into the detail, the cases make it clear that financial material dependency is one matter which is referred to in the section. Here there was clearly the provision of accommodation by the deceased. The house was in his name, and he provided in effect a roof for the plaintiff. Accordingly, I am satisfied that the plaintiff is an eligible person. 12 It is also, however, necessary under s 9(1) of the Family Provision Act that the Court shall first determine whether there are factors warranting the making of the application. This expression has been dealt with by the Courts on a number of occasions. In Re Fulop Deceased (1987) 8 NSWLR 679 at 681, McLelland J described that expression in the following terms: "Secondly the subsection 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 subsection 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 subsection, and yet go on to decide that the application should fail. Since the subsection 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 subsection 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 subsection 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.'"

13 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." 14 These principles have been applied at first instance for many years. 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 prosects 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. 15 In the present case there are a number of factors which point towards the claim being appropriate. Firstly, we have the contributions that the plaintiff made to the property of the deceased in the payment of things such as rates. There are also, of course, indications from the testator himself that he thought that the plaintiff was a natural object of his bounty. These arise from the promises which were made by the deceased to the plaintiff about receiving half the house, and also the close relationship over the last two years, which led to the care being extended by the plaintiff to the deceased. 16 One has to judge this as at the date of death and, accordingly, clearly in my view, there are the necessary factors warranting the making of the application on the traditional test. In case it is necessary to consider on another basis I will now also move on to see whether or not there are prospects of success, and if so, what would be an appropriate order. 17 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 interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was in adequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonable be made and making an order could disturb that testator's arrangements to pay creditors."

18 As directed by the High Court, it is necessary to look at the plaintiff's situation. He is single, has no dependants, and is presently aged sixty-three. He receives an old age pension of $190 a week. His assets are minimal, comprising cash and shares of some $ll,440, and furniture of $1,000. He has a credit card debt of about $4,000. 19 He is, however, in good health. He is currently living in the estate property, and has had the benefit of that rent-free for some time. One has to take into account, of course, his contributions to the estate. There is his undoubted payment of rates during the period up until the date of death, and the rates up until 1988 appear to be $8,416. I am satisfied that the plaintiff contributed one-half of that amount. 20 On the evidence he is said to have contributed about ninety per cent of the consumables in the house, and he has also done work on the house. He and a friend of his painted the whole of the outside of the house, including the roof. The evidence of some of the witnesses speaks of the care and attention which the plaintiff has devoted to the gardens surrounding the house, and comments made by the deceased attest to the appropriateness of the care and the efforts that the plaintiff put into looking after the deceased. 21 It is clear that there was help of a substantial nature over the two years period. The plaintiff did the housework, gave general assistance, and in fact saved the deceased money by being able to dispense with home care. 22 It is, of course, necessary for the plaintiff to demonstrate that he has been left without proper or adequate provision for his maintenance, education or advancement in life. In the present case he puts forward for consideration a claim that he should have some provision for his accommodation. It is recognised by him that the house will have to be sold, and he suggests it might be appropriate that he have sufficient funds so that he could buy a two-bedroom villa in the local area. 23 As was pointed out by the High Court in Singer v Berghouse, it is necessary to have reference to claims of any other person who may have a claim on the estate. In this case there is only one, and that is the beneficiary Joyce Buckley. She is eighty-five years of age, and is in failing health. There have been a number of reports addressing her situation. She is suffering from Alzheimer's Disease, and in a report of Dr Jolly of 14 August 2000 he speaks of her being disoriented for day and date, and that there is evidence of significant deterioration in her diagnosed Alzheimer's Disease over the last twelve months. 24 There have also been assessments of her need for home care, and I will come back to those. She lives with her daughter in a house at The Entrance. That house is owned as to two-thirds by Mrs Buckley, and as to one-third by her daughter, Mrs Hawkins. The house is not in good condition and needs painting and repairs. She has some savings of about $3,000 in a bank account. She has a pension of $371 per fortnight, and her daughter controls this through a power of attorney, and expends it for her needs. 25 It is apparent from the report of the carers that there is still a capacity for Mrs Buckley to look after herself. She needs supervision and assistance. At the moment she is managing in the house which is owned by herself and her daughter. In the event that it became too difficult for her to remain at home, she would need to go into nursing home accommodation. 26 In the public system, if it is available, that can be provided at the cost of the pension entitlement. However, it is not always available, and in the private sector one might even find one has to pay between $800 and $1,000 in order to obtain appropriate private nursing home care. 27 There are a few other minor matters that need to be attended to at the home where Mrs Buckley is living at the moment to make it safe for her. These involve getting her an alarm system at the cost of $2,150, doing some fencing at $3,685, and some occupational therapy will be required costing some $750. 28 The report by Miss Flannagan which is in evidence before me talks of the possibility of there being a carer necessary in the event that Mrs Hawkins will not be able to care for her. The cost of such care can be measured. Common rates are $25.50 per hour, and it depends, of course, on the extent of the care as to what the likely costs are going to be. 29 On the evidence before me it is hard to make any assessment of a number of areas. There is firstly no evidence to point to life expectancy, although clearly there is a life expectancy which, as I say I cannot determine. The deterioration of the condition can only be speculated upon by the doctors, and one cannot form a view as to the exact progression of the disease experienced. It tends to suggest that at some stage care might be necessary, perhaps on a relieving basis to relieve Mrs Hawkins, and that at some later stage there will be a need to perhaps go into a nursing home for more detailed care. 30 I have mentioned that the plaintiff advances, as a need that he puts his application upon, that he desires accommodation in a two-bedroom villa unit. He wants a two-bedroom unit so his son can come and stay with him occasionally. It would not, however, be essential for it to be so. There is evidence of the cost of alternate accommodation in the area. Robinson and Robinson, agents, said that two-bedroom villas, excluding waterfront, range from about $150,000 to $190,000, and that two-bedroom units range from $125,000 to $160,000. One-bedroom units, which are rare in that locality but exist in Gosford, range from $90,000 to $115,000. 31 Messengers Real Estate talk of the price of a two-bedroom home unit varying in the range of $120,000 to $160,000, but suggest there may be properties that fall below or above that range. They put villa units with private courtyards in the range of $175,000 to $210,000. 32 The question which has to be addressed is whether it is appropriate that a claim of this sort be recognised. 33 Widow's claims are frequently the subject of applications in this Court. The court of Appeal in Goloski v Goloski (unreported 5 October 1993) has referred to formulations of this standard to be expected in respect of a widow in terms which refer to the decision of Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65 and Elliott v Elliott, which was approved by the Court of Appeal on 24 April 1986. There his Honour said, "Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up and maintain his estate, the duty which a deceased owes to this widow can be no less than to the extent to which his assets permit him to achieve that result; first to ensure that his widow be secure in her home for the rest of her life and that if either the need arises or the whim strikes her she have the capacity to change her home; secondly that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry; and third, that she have available a fund to which she might have resort in order to provide herself with such modest luxuries as she might choose and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring". 34 In contrast, if one looks at statements about the general principle in the same respect for children, one finds in Shearer v The Public Trustee and Hawke v The Public Trustee, a decision of Young J of 23 March 1998, a somewhat different approach. His Honour said: "Where the applicant is a spouse it is nowadays usually thought that to leave a spouse with a mere right of residence is insufficient provision. However, that is not the case for children, and as far as I am aware it has never been said by any court that it is an obligation that the community expects that a mother will leave her child in a position where the child has a house of his or her own," Here, of course, we are dealing with quite a different relationship, that of two siblings, and in the ordinary case such a relationship would not be considered in the community as close as that of a married couple or of parent and child. However, in this situation, the present case, there are some other factors and these partly relate to the care which was shown to the deceased by the plaintiff in the last few years. 35 One can also take into account the size of the estate, to see whether some such provision might be appropriate, but in doing so one must be careful of the position of Mrs Buckley. She, of course, does not have to prove her entitlement. She is in fact the chosen object of the testator's bounty, and she obviously needs a sum for her future protection. This will either be some extensive home care, or some provision for private nursing home accommodation. She has her two-thirds interest in her house at The Entrance, which together with what she gets from the estate will have to provide for those future contingencies. 36 Having regard to all those factors, and the various claims on the testator's bounty, it seems to me that if I were to allow the plaintiff to have one half of the estate this would allow him to purchase a unit at the very bottom end of the market, and thus secure his position for his advancing years. 37 Accordingly, I order that in lieu of the provisions in par 4 of the will of the deceased, the whole of the estate both real and personal be held to pay all just debts, funeral and testamentary expenses, probate, estate, death or other duties, and thereafter be held as to one half to the plaintiff and as to one half to Joyce Olive Buckley. 38 I order that the plaintiff's costs on a party and party basis, and the defendants on an indemnity basis be paid out of the estate of the deceased. 39 There has been tendered a letter of offer by the plaintiff of 7 September 2000 in which the offer was to settle by selling the property, with the residue then to be divided after payment of expenses and costs equally between the parties. The plaintiff has done that, and it seems to me, accordingly, should be entitled to his costs from a reasonable period after that offer on an indemnity basis. Accordingly, I will vary the order that I have made by providing that the plaintiff's costs on a party and party basis up to 18 September 2000, and his costs on an indemnity basis after that date, be paid out of the estate of the deceased, and the existing order that the defendant's costs be paid out of the estate of the deceased on an indemnity basis is also retained. I order that the difference between the plaintiff's party and party costs after 18 December and its indemnity costs after 18 December be charged upon the share of the estate passing to the beneficiary, Mrs Buckley.

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