Marshall v Public Trustee

COUNSEL : Mr I.E. Davidson for Victor Marshall Mr M. Gorrick for Public Trustee

SOLICITORS : Elrington Boardman Allport for Victor Marshall Anthony Lentini for Public Trustee

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

2709/05 - PETER MARSHALL v THE PUBLIC TRUSTEE - ESTATE OF IWAN ATAMANJUK AKA JOHN MARSHALL

1677/06 - VICTOR ATAMANJUK MARSHALL v PUBLIC TRUSTEE - ESTATE OF IWAN ATAMANJUK AKA JOHN MARSHALL

1 HIS HONOUR: This is an application under the Family Provision Act in respect of the estate of the late Iwan Atamanjuk Marshall, otherwise known as John Marshall, who died on 28 November 2003 aged 76 years. He was survived by his two stepsons and some siblings and their children. THE WILL OF THE DECEASED 2 The deceased did not make a will and he died intestate. Until shortly before this hearing began it was thought that the estate would pass to the Crown as bona vacentia, however, in the weeks before the hearing it became apparent that there were indeed siblings surviving of the deceased. 3 The deceased was the son of Danilo and Aleksandra, who were married on 28 September 1914 in the Ukraine. There was apparently four children of that union: Iwan, the deceased, who was born in 1927, and who has now died; there was Olga Danilovna Atamanjuk, who was born on 5 July 1930, and died on 17 November 1973 in the Ukraine. She was married and left a son, Nikolaj Vasiljevich Atamanjuk, born on 19 November 1954. The third sibling was Fedor Danilovich Atamanjuk born 3 October 1935, and the fourth sibling, Vasilij Danilovich Atamanjuk was born on 15 August 1939. 4 The assets in the estate have now been reduced to cash, and amount to $347,515.24. The defendant's costs and also fees that are payable to the defendant add up to a sum of $38,200; Mr Peter Marshall, one of the stepsons, who appears for himself and does not have solicitors; Victor appears by solicitors and counsel and fees of $37,721 have been incurred. These will leave a net estate of something in the order of $271,594. The two proceedings have been heard together and I have ordered that evidence in one will be evidence in the other. FAMILY HISTORY 5 The deceased was born in the Ukraine in 1927. In 1944 he was taken to Germany as a prisoner of war. Victor was born in Germany on 29 October 1946, the father of whom was not known. In 1948 the deceased arrived in Australia. In 1949 Victor and his mother arrived in Australia and stayed at the Bonegilla camp in Victoria. After a short stay, they moved to Woodside, South Australia. 6 In 1952 Victor and his mother went to Clare in South Australia where his mother worked as a cook. In 1953 Victor was placed in the Mount Barker Salvation Army Boys Home as his mother had difficulties supporting him. His mother returned to Adelaide in 1954 and once again Victor was placed in a boys home at that stage. In 1956 his mother married Stefan Suba. Both the mother and Victor went to live with Stefan Suba in Croydon Park in Adelaide. 7 On 20 July 1956 Peter was born and Stefan Suba was Peter's father. In 1958 Peter and Victor and their mother moved to Mount Gambier in South Australia. After the parents split up the father Stefan abducted Peter when he was about two and for some years Peter did not live with his mother. 8 He eventually joined his mother when she was living in O'Connor in the ACT. In the early sixties Victor and his mother went to Goulburn. Victor was once again placed in a boys' home while his mother nursed in the Kenmore Mental Hospital and lived in the nurses' quarters. By 1963/64, Victor left school and got his first job. The family moved to Queanbeyan and lived in a boarding house and he obtained employment at Fairways Engineering. 9 They moved within Queanbeyan and his mother was then working in the Queanbeyan Base Hospital. She then met the deceased, who was known as John Marshall, and Victor was introduced to him. It was in 1964 that Victor and his mother commenced to live with John Marshall at 2 Scrivener Street, O'Connor. They lived in a de facto relationship for some years. Peter also moved in there in 1966. 10 It was in this year that Victor had a serious car accident and he was looked after by his mother and John Marshall, the deceased, while he recuperated. On 20 December 1966 the mother and the deceased married. In 1967 Peter changed his surname to Marshall. Victor married in 1968 and had children. He, in fact, named one of his sons after the deceased, John Marshall. 11 He moved out from home in 1971 and in 1973 took up bricklaying. In 1974 Victor spent quite some time off work helping the deceased build a property at 44 Munro Road. They used bricks that Victor was able to obtain and six months was taken up in this project. Apparently Victor had to return to work somewhat the poorer. In due course, in the eighties, Victor separated and started another de facto relationship. 12 The deceased died on 28 November 2003. In November 2005 Victor's de facto relationship with Carol Keyte ended and he rents from her the house that is owned by his former de facto partner. In January 2006 the mother, Olga Marshall, died. It was on 7 February 2006 that Victor first received a letter from the Public Trustee regarding the claim that Peter had brought and he saw a solicitor on 15 February 2006. 13 The summons for Peter's claim was filed within time, but Victor's was filed on 2 March 2006 and was out of time. As I have said, because the application is out of time, it is necessary for the Court to consider section 15 of the Family Provision Act, which allows an application to be made notwithstanding that it is out of time. There are a number of cases which refer to the principles to be applied in an application for an extension of time. In Re Guskett (deceased) (1947) VLR 211 the following was said: "It is necessary for the applicant to make out a case that will justify the grant of the indulgence sought. He is to show reasons why his failure to apply within the time allowed should be excused. Every case will have to be dealt with on its own facts, but it would seem necessary for the applicant to satisfy the court that the circumstances are such as to make it unjust for him to be penalised for being out of time. As moreover he is seeking an indulgence he should apply promptly for an extension of time." 14 His Honour Young J in several cases has dealt with the principles governing application to extend time under this Act. In Massie v Laundy (unreported NSWSC, 7 February 1986) he indicated that when looking at 'sufficient cause' under 16(3) of the Act the factors which one looks at include the following:-

(a) is the reason for making a late claim sufficient? (b) will the beneficiaries under the will be unacceptably prejudiced if the time were extended? (c) has there been any unconscionable conduct on either side which would enter into the equation? 15 Apparently he also accepts a view which was expressed by his Honour Needham J in Fancett v Ware (unreported NSWSC 3 June 1986) that there is no purpose in extending the time with respect to a claim which must fail. In Phillips v Quinton (unreported NSWSC 31 March 1988) Powell J when considering the matter at the substantive hearing leant to the view that a plaintiff seeking an extension of time under the Testator's Family Maintenance Act must now demonstrate to merely a reasonable prospect but at least a strong probability of obtaining substantive relief. That view was not accepted by his Honour Hodgson J in Basto v Basto (unreported NSWSC 8 September 1989). 16 In De Winter v Johnstone, a decision of the Court of Appeal on 23 August 1995 his Honour Powell J referred to this matter and in particular the fact that nowadays the application for extension of time is invariably dealt with at the time of the application for substantive relief. He said at page 23: "In such a case, so it seems to me no extension of time ought to be granted unless it be established (inter alia) that the applicant for an extension of time would, in the event of that extension being granted, be entitled to an order for substantive relief."

17 His Honour Mr Justice Sheller considered that it was only necessary to show that the application was not bound to fail. His Honour Mr Justice Cole seems to have adopted the parties' approach of looking at the strength of the plaintiff's case.

18 In the present case there is no prejudice that has been identified, nor is there any unconscionable conduct on the part of the applicant. What is important is the explanation for the delay which was dealt with by Victor in his affidavit. 19 He had some contact with the Public Trustee but received no information that would alert him to the time limits for making an application. He was keen to make an application and went to the chamber magistrate, who put him in touch with a solicitor, a Mr Frank Wilson of Queanbeyan, in April 2005. He made arrangements for Mr Wilson to act for him on a no win: no fee basis. However, he found that that relationship was totally unproductive. He never received a letter from Mr Wilson or a phone call and his only means of communication was by calling in and seeing Mr Wilson from time to time when apparently vague promises were made. Apparently nothing was done. 20 Ultimately, he was about to let the matter go because of this totally unsatisfactory conduct, when he got a letter of 7 February 2006 that led him to contact the offices of the Public Trustee. When he found out that the proceedings which were brought by Peter would be heard on 4 May, and that his interests would be disregarded if he did not make an application, he then went to a Mr MacErlean, a solicitor, on 15 February 2006. He then promptly progressed the matter and brought the proceedings. 21 Although sometimes a legal adviser's failure is said to be no excuse, plainly the plaintiff was, in this case, given a complete run-around, and nothing was done on his behalf. Given the plaintiff's lack of familiarity with these matters, I think it is a circumstance where it is inappropriate to visit the results of that solicitor's inaction upon him. 22 The other thing is that although he had contact with that solicitor, there is no evidence to suggest that Victor was ever told that there was a time limit. In these circumstances I think there is a sufficient explanation for the failure to bring the proceedings, and I would propose to extend time up to and including the filing of the summons. ELIGIBILITY 23 Both plaintiffs are stepsons of the deceased, and they need to establish that they were part of the household and partly dependent. It is plain on the evidence before me that at different times both were part of the household, which comprised the deceased, their mother and themselves. 24 In the circumstances they clearly were dependent. This arises not only from their age and provision of accommodation but also in relation to Victor when he was looked after following a motor vehicle accident. 25 However, it is 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 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 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 s9(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 1998 , s 61B), whereas the classes affected by s9(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'. 26 In Churton v Christian (1988) 13 NSWLR 241, the Court approved this statement. Priestley JA at page 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."

27 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. Fitzgerald AJA, who seemed to suggest that an application might be warranted if the application has reasonable prospects of success gave the main judgment. 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. 28 The defendants did not suggest that Victor would not fall within the definition of factors warranting in the ordinary case but merely suggested, in respect of Peter, there were not sufficient factors warranting. Plainly, of course, Victor lived with the deceased and his mother for quite some time. He was looked after by him as a son after his motor vehicle accident. He adopted his father's name and those matters make it obvious that he would be the person in respect of whom factors warranting would be established. 29 In relation to Peter, he talked in his affidavit at paragraph 11 about the period from 1966 to 1970, when he mainly lived at Scrivener Street, O'Connor and was dependent upon his stepfather and mother. That puts Peter at that stage, when he went there, about age ten. He says he was nine years old when he moved in there and started year 10 at school. In his affidavit, paragraph 12, he talks about a time between when he was 11 and 13, when he was living there, that he ran away from home, about six times, sometimes for weeks at a time. 30 As a result of that conduct in 1970 he spent eight months in a reform school in Windsor. He moved to Sydney for a while but he also told the Court in paragraph 16 about the period from 1970 to 1973, when his stepfather and mother were supportive as they apparently visited him at Kenmore and dealt with the doctors who were looking after the psychiatric care for Peter at that stage when he was in Kenmore Psychiatric Hospital at Goulburn, which is not far from Canberra. 31 He also says he lived at home in 1974 until he moved to Sydney. Then in 1976 to 1977 he returned to Canberra and lived at home until he moved into a group home. Thereafter he would continue to visit his parents. He says that between 1985 and 1990 he kept in touch with his stepfather by phone but eventually he only would be phoning about once every six months. 32 He also says in the year 2000 he changed his name to Marshall. The evidence does not show that this was with his stepfather's concurrence or knowledge but it was before his stepfather died. One thus has a period where Peter had a very unsatisfactory childhood but he was a child of the family. They were in those years endeavouring to look after him, no doubt to the best of their ability, but with little success. 33 The fact that it was such a difficult childhood, does not, I think, detract from the fact that he was regarded as a son and the stepfather and the mother took the responsibility for him, particularly later when he had psychiatric problems. They took an interest in his psychiatric care. In those circumstances I think that there are factors warranting for Peter in respect of the more traditional approach and I will also consider whether there are likely prospects of success. 34 In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a court must take. At page 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 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 jupon 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 inadequate 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 reasonably be made and making an order could disturb the testator's arrangements to pay creditors". 35 I turn to consider the plaintiff, Victor's, situation in life. Victor is 59, single and has no dependents. His present circumstances are not very happy. He has had a failed marriage and a failed de facto relationship. He is, at the age of 59, still working as a bricklayer and that is becoming more and more a problem for him because he has knee and back problems. 36 He has basically no assets and he lives from hand to mouth on what he can earn as a bricklayer. Apparently last year he had a taxable income of $15,000. He has a tax debt which is in the amount of $27,742.51 and he is still trying to repay that. He has no savings, does not own any property and he lives in rented property in Hayes Street, Queanbeyan. 37 He has to pay rent of $700 a month to his former de facto partner who owns the property. How long he will be able to stay there is something of a mystery and perhaps it will not be very long because she apparently wants to sell the property. He tries to support his children and grandchildren if he can. He has no prospects of retirement and just has to continue working as a bricklayer. 38 He has developed thyroid problems and Graves Disease and, as a result, has lost a lot of weight. That affects his liver. He also has suffered some depression recently and he is now being treated for that condition. He is on anti-depressant medication and has contact with Queanbeyan Mental Health Department. This has apparently been with him for some years. 39 In Victor's case there are some substantial contributions to the estate. He sets these out and I have already referred to them as being the pouring of the concrete and doing the brickwork at the deceased's house. He apparently kept on doing that for too long and nearly went bankrupt. He eventually had to stop and go back to work. There seems to have been a good relationship between him and the deceased.

40 I turn to consider the situation in life of Peter. Peter is 49 years old, he is single and has no dependents. He, obviously from his evidence, has not been able to work since 1999. He did put in evidence certificates from employers, who were in the Sydney area in 1998 and 1999, when he worked as a personal care assistant and other positions in the health care industry. That included as an orderly and as a wardsman. 41 He lives in public housing accommodation and now lives on the pension. He has for a large part of his life been dependent upon drugs. He has taken heroin and a range of different drugs over the years. From time to time he has attended various treatment centres and has had treatment, sometimes successfully, and sometimes not. 42 Presently he is taking Subutex on a regular basis and has been doing so for a few months. Prior to that, for eight months he says he was drug free, but he makes no secret of the fact he has this long history and that is one of the things that has caused the difficulties he has had with life. He wants to try and improve himself. It is suggested he might want to take courses in drug and alcohol, so that that would help his employment prospects. 43 He rents a flat and he would prefer to move somewhere else. There is no evidence of what the costs of that would be. Plainly, he has had a difficult life for most of his life and he lives in a somewhat subsistence way on the invalid pension. 44 It is, of course, necessary to look at the situation in life of others having a claim on the bounty of the deceased. In this case they are the two brothers of the deceased and also the son of the deceased's sister. There has been some evidence given that in respect of Fedor. He is a pensioner apparently buying an old two room apartment from the Government. He has 6000 roubles in the bank, which is about $500, and he apparently has to pay for medicine and payments on the flat which is expensive. 45 In respect of Vasilej, there is evidence from those here in Australia who have managed to speak to his wife, which indicates that he and his wife live together. They have no dependents and live with their adult son Aleksandra. They are currently buying a two room apartment in St Petersburg. Each receives pensions which are consumed in their expenses. There is no evidence about debts they might owe. In respect of his health, apparently Vasilej had a stroke and suffers some disability from that event. 46 In respect of the other son, Nikolaj, to whom I have referred, there is evidence from a daughter and apparently he lives in an apartment with the daughter in St Petersburg. All of them are employed and his daughter is 23 years of age. He is 52 years of age. Accordingly, he does not have any dependents. Apparently Nikolaj is in good health. There is no evidence of any contact since 1948 between the deceased and his siblings. 47 It is necessary, of course, to see how the plaintiffs say that they are left without adequate and proper provision for their maintenance, education and advancement in life. Both plaintiffs do live without any assets and are dependent on Government pensions. The plaintiff, Peter, has suffered from a drug addiction and it is well known that such addictions, as evident from his circumstances, can continue for a long time. Sometimes they can be helped with rehabilitation programs. These are difficult to obtain in the public health system and funds might help Peter in respect of that aspect of his life which troubles him. 48 In respect of Victor plainly he has a difficult job working now. Bricklaying is not an easy job. It requires a lot of physical effort and he will not be able to be on the pension for some five years. Plainly, he is struggling and he may have to find alternative accommodation. In the context of this estate, it is not a large one, and there is only a small amount available after the costs and expenses are taken out. Not that I am critical of those costs or expenses; they are proper charges. 49 In my view, both plaintiffs have been left without adequate and proper provision for their maintenance, education and advancement in life. It is a matter to consider as to what is the amount of the appropriate provision. In one sense Victor's claim is somewhat larger than that of Peter's. He actually spent six months of his life working on his father's property. Peter says he helped but it was not to the same extent as Victor. 50 In another sense, Peter's situation in which he lives a life in which he is drug dependent and finding it difficult in breaking out of that cycle, also has its own problems. 51 The two stepbrothers have agreed between themselves that if the Court were minded to make an award in their favour they would share it as to 55 percent to Victor and 45 percent to Peter. Naturally, of course, that does not bind the Court and that agreement itself may be enforced outside orders the Court might make. However, in a rough sort of way it does approximate the differences between the claims and I would propose to adopt that split. 52 It is, however, also necessary to consider whether some amount ought to be provided for those who take on intestacy. Their situation also is not in any way satisfactory. The average wage in Russia is about Australian $450 per month and there is apparently 11 percent inflation. I suggested in argument that at one stage without full details of the situation of the beneficiaries that a legacy to the beneficiaries might be $15,000. 53 The defendant submits an appropriate sum is $50,000 and counsel for Victor suggests an appropriate amount would be $7,500, $2,500 each for the three of them would give them each another five months wages. However, I think something slightly more than that is appropriate and what I propose to do is to provide $15,000 to be shared between the three next of kin equally. 54 Accordingly, the orders that I propose to make are as follows:

1. I extend time in Peter's claim to the date of filing of the summons. 2. The three next of kin Nikolaj Vasiljevich Atamanjuk, Fedor Danilovich Atamanjuk and Vasilej Danilovich Atamanjuk shall each receive a legacy of $5,000 each. 3. The balance of the estate will be divided between the plaintiff Peter and the plaintiff Victor in the proportion of 45 percent to 55 percent. 55 In respect of Peter, there has been debate in Peter's cross-examination as to whether he should have management of his share, or whether it should be looked after for him. Young J in Vavros v Bondy (unreported 29 August 1988) and also the decision of Powell J in Howarth v Reed refers to the possibility of a provision not being applied by the person for the purposes intended by the Court. At page 43 and 44 his Honour went on to say: "While, as will be apparent from what I have earlier written, I am deeply concerned at what I regard as the totally unrealistic approach to the management of their affairs adopted by Mr and Mrs Howarth, which approach, if persisted in, will almost inevitably lead to the benefit of any Order which might be made in Mrs Howarth's favour being dissipated in short order, it seems to me that, while that is a matter which may bear on the form of Order to be made, it is not a matter which ought, without more, to be regarded as disqualifying Mrs Howarth from receiving the benefit of any Order to which she might otherwise be entitled. Nor is this a novel view, for a similar approach is reflected in the following passage in the judgment of Young J in Bondy v Vavros (29 August 1988 (unreported): 'I should interpose at this point that in one sense it does not matter if I form the view that a plaintiff is a spendthrift. If a person is entitled to an order, what they do with the money that they receive is their business and it is none of my affair if I very much fear that the money may be wasted on wine, women and song in a short period of time. I have deliberately used that expression to make it clear that I am not referring at the moment to the facts of this particular case. On the other hand, when one is considering what a wise and just testator would have done, if one can see that a plaintiff is a spendthrift and the testator has arranged his will in such a way as to limit the funds flowing to the plaintiff, then one may very well come to the conclusion that the plaintiff has failed to establish that there has been any breach of moral duty.' 56 The question, then is, what is the form of order which ought now to be made?" 57 It seems plain it is appropriate that Peter's share be managed for him in a protective trust. It is fortunate Peter has two friends who are prepared to assist him in this regard. The first is Mr Anthony Field, a solicitor, who lives at 6 Caffyn Street, Garran ACT, who has consented to act as a trustee of any trust for Peter. 58 There is another friend of Peters who has a similar name. His name is also Peter Marshall but his full name is Peter James Marshall. This Mr Marshall lives at Flat 1, 2 William Street, Dulwich Hill in Sydney. He has known Peter well since they were young and he has given evidence before me. He is an appropriate and responsible person to act as trustee in the circumstances. Accordingly, I would propose to appoint both Mr Peter James Marshall of Dulwich Hill and also Mr Field as trustees of the protective trust. 59 Counsel can anticipate that trust would have appropriate necessary powers for capital advancement if that was in his interests. However, I would like the parties to confer as to the terms of that trust before I finally make the orders and I will stand the matter down now. SHORT ADJOURNMENT

(Short minutes handed up) 60 In this matter, the formal orders I make are in the form of short minutes of order which I will sign and date and place with the papers.

18/05/2006 - Marshall spelt with one l corrected - Paragraph(s) Not applicable

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