Martin v Public Trustee

Supreme Court of NSW|2005-02-01

CITATION : Martin v Public Trustee [2005] NSWSC 177

DECISION : (1). I order that the Plaintiff receive from the estate of the late Brenda Martin ("the Deceased") a legacy in the sum of $60,000, such legacy not to bear interest if paid on or before 28 April 2005 and if not so paid to bear interest at the rates prescribed for unpaid legacies pursuant to the Wills, 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.

CATCHWORDS : Succession. Family Provision. Claim by adult son. Financial and material circumstances of Plaintiff. Absence of contact by Plaintiff with Deceased. Whether Plaintiff has been left without adequate provision for his proper maintenance. Competing claims of beneficiaries (who are children of the Plaintiff).

Family Provision Act 1982 LEGISLATION CITED : Wills, Probate and Administration Act 1898

CASES CITED : Singer v Berghouse (1994) 181 CLR 201

Cedric Martin (Plaintiff) PARTIES : Public Trustee (Defendant)

Mr. R. D. Wilson (Plaintiff) COUNSEL : Mr. A. L. Hill (Defendant)

Turnbull Hill (Plaintiff) SOLICITORS : B. Maher (Defendant)

13 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4438/03 CEDRIC MARTIN v PUBLIC TRUSTEE JUDGMENT 1 MASTER: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 21 August 2003 Cedric Martin claims an order for provision for his maintenance, education and advancement in life out of the estate and/or the notional estate of his late mother, Brenda Martin (to whom I shall refer as "the Deceased"). 3 The Deceased, who was a widow at the time of her death, died on 1 July 2003, aged 87 years. She left a will dated 17 March 1997, probate whereof was on 28 August 2003 granted to the Public Trustee, the executor named in such will (who is the defendant to the present proceedings). 4 The inventory of property discloses the following assets of the Deceased at the time of her death: House property situate at and known as 12-14 Buchanan Street, Hamilton (to which an estimated value of $375,000 was ascribed) Moneys held with the Newcastle Permanent Building Society, totalling $27,364 Shares in companies, having a total value of $216,958 5 Subsequently, the house property was sold for $510,000 and the other assets of the estate have been realised. All liabilities of the estate (totalling less than $900) have been paid, except for the costs of the present proceedings and trustee tax liability. The present value of the estate held by the Defendant is $772,167. 6 It will be appreciated that 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, will be entitled to have his costs paid out of the estate, whilst the Defendant, irrespective of the outcome of the proceedings, will be entitled to have its costs paid out of the estate. 7 It has been estimated that the costs of the Plaintiff will total about $37,600, whilst those of the Defendant will total almost $40,000. 8 It is appropriate, therefore, that I should proceed upon the basis that the value of the distributable estate is about $694,500. 9 The Plaintiff is the only surviving child of the Deceased, the only other child of the Deceased, the Plaintiff's sister, Alison Martin, having died in 2001. 10 By her will, and in the events which have happened, the Deceased gave to her grandson Christopher Blair Martin a legacy of $5,000, and gave to her grandsons Neil Andrew Martin and Shaun Matthew Martin the remainder of her estate (after payment of debts, costs and other liabilities). Those three grandsons of the Deceased are children of the Plaintiff. The will made no provision for the Plaintiff. 11 It follows, therefore, that had it not been for the institution of the present proceedings Christopher would have received $5,000 and each of Neil and Shaun would have received about $383,500. If the value of the estate be reduced in consequence of the payment of the entirety of the costs of the present proceedings, but if the provisions of the will were to remain in effect, the value of the benefit to each of Neil and Shaun would be reduced to about $344,750. 12 (I intend no disrespect when I refer to each of the foregoing grandchildren of the Deceased by his given name.) 13 The Plaintiff was born on 6 March 1942, and is presently aged 63. He has been married twice. Of his first marriage, to Margaret in 1963, were born three sons, who are the three grandchildren of the Deceased named as beneficiaries in her will. They are: Neil, who was born on 12 April 1967 and is presently aged 37 Shaun, who was born on 24 June 1969 and is presently aged 35 Christopher, who was born on 3 June 1971 and is presently aged 33. 14 The Plaintiff and his first wife were divorced in 1985. On 1 November 1986 the Plaintiff (then aged 42) married his present wife Glynis (née McQueen), who was born on 15 September 1961 and at that time was aged 24. 15 Of the plaintiff's second marriage were born the following children: Remington (born 7 April 1990) Shelby (born 11 September 1995) Brogan (born 26 March 1998) Parker (born 23 November 2000) Saffron (born 18 June 2002)

16 The Plaintiff, who is a teacher by profession, has since early 2002 been employed as such by the Leighland Christian School at Ulverstone in Tasmania, where his present salary is $1,394 net a fortnight. His wife Glynis is in receipt of a Family Allowance in an amount of $647 a fortnight. The total income of the Plaintiff and his wife is presently $ 2,041 a fortnight (being $53,066 net a year). They estimate their outgoings to total $56,341 a year. The present assets and liabilities of the Plaintiff and his wife are as follows: House property situate at and known as 6 Merinda Drive, Ulverstone, having an estimated value of $250,000. Hyundi Xcel 1998 motor vehicle, having an estimated value of $6,000. Toyota Tarago 1995 motor vehicle, having an estimated value of $15,000. Superannuation policy, having a present value of $17,000. Personal property and effects having an estimated value of $6,500. 17 The liabilities of the Plaintiff and his wife are as follows: Mortgage over house property at 6 Merinda Drive, Ulverstone - $48,000 Indebtednesses to Grace Brothers, AGC and New South Wales Teachers' Credit Union totalling $13,500. 18 According to the Plaintiff, there is a shortfall between the income of himself and his wife ($53,066) and their outgoings ($56,341) in an annual amount of $3,275, or almost $63 a week. 19 The Plaintiff's sons of his first marriage continued to reside with him in their family home at Terrigal (the location whereof was also in the evidence at times referred to as North Avoca) after his marriage to their mother had broken down. By the time of the Plaintiff's marriage to his second wife only Shaun and Christopher were residing with the Plaintiff. 20 The marriage of the Plaintiff and Glynis precipitated difficulties and tensions in the household between, on the one side, the Plaintiff's children and, on the other side, the Plaintiff and his new wife (who was not much older than the Plaintiff's own children). 21 A very considerable quantity of evidence (both by affidavit and under cross-examination) was directed to various incidents concerning the relationship between the Plaintiff and Glynis on the one part and the Plaintiff's first three children on the other part, including the circumstances in which each of Shaun and Christopher left their paternal home. 22 It is not necessary for me to rehearse the details of each of those incidents. Suffice it to say that whilst the position in which Glynis, a young wife with three step-sons almost as old as herself, may not have been an easy one, the Plaintiff clearly took her part to the almost total disregard of the interests of his three teenage sons (two of whom were still at school), and abdicated his parental responsibility towards those three sons. Ultimately, the Plaintiff, in effect, ordered Shaun and Christopher to leave home; Neil, who living away from home, attending university, was discouraged by the Plaintiff from returning home for the university vacation in 1986. Neil did not reside in the family home after Glynis moved into residence. 23 Each of the three eldest children of the Plaintiff had a close and affectionate relationship with their grandmother, the Deceased. After the Plaintiff's marriage to Glynis the Deceased took over the responsibilities for her three grandsons which their father had clearly abdicated. 24 Also, from the time of his marriage to Glynis the relationship between the Plaintiff and the Deceased deteriorated to the extent that ultimately that relationship had largely ceased to exist. Doubtless there were faults on both sides, but, despite his assertions to the contrary, it is quite obvious that the Plaintiff could have maintained a relationship with his mother if he had chosen to do so. 25 By the time of the death of his sister Alison the Plaintiff had had no contact with the Deceased for about ten years, from 1990 to 2001. According to the Plaintiff, a reconciliation between himself and his mother was effected at Alison's funeral. The nature and extent of any such asserted reconciliation were disputed by the beneficiaries. After that funeral there was, however, a limited degree of contact between the Plaintiff and his mother until the Deceased's death, that contact being by way of occasional letters and telephone conversations as well as a single visit by the Plaintiff to the Deceased shortly after Alison's death. The Plaintiff, although residing at a distance of about one and a half hours' driving time from the Deceased did not choose to visit her before the Plaintiff, Glynis and their five children removed to Ulverstone in Tasmania in early 2002. 26 At the time when she made her will on 17 March 1997 the Deceased left with it a sealed envelope, indorsed (apparently in her own handwriting) "Only to be opened if will is contested", followed by her signature. That envelope contained a handwritten list of loans and other benefits totalling $31,700, which it would appear the Deceased was thereby asserting had been provided by her to the Plaintiff. 27 In his affidavit of 19 March 2004 (paragraphs 37 to 49) the Plaintiff addresses each of the items in that list. The Plaintiff agrees that some of the loans were made to him by the Deceased, and were repaid, but disputes that the totality of the alleged loans were made. Other items are disputed by the Plaintiff. In all, the Plaintiff agrees with items whose values on the list total $11,700, but does not agree with the remaining items. 28 The signed indorsement upon the envelope and the list contained therein (apparently written by the Deceased herself) are admissible as statements made by the Deceased, pursuant to section 32 of the Family Provision Act.

29 The claim of the Plaintiff must be approached in the context of the competing claims of the three beneficiaries.

Neil is a self-employed computer programmer, presently earning a taxable income of $60,000 a year. He is married, with two children presently aged four years and two years. Neil and his wife own a house property situate at Jimboomba in Queensland, having a present value of $280,000. It is subject to a mortgage, presently in an amount of $213,000. The other assets of Neil and his wife (consisting of two motor vehicles, contents of house (including business), superannuation entitlements, and other financial assets) have a total value of $132,500. Their liabilities, apart from the mortgage on their house, consist of credit card indebtednesses, personal loan, HECS debt and tax debt, totalling $64,000. 30 Shaun resides in a house property owned by him at 413 Mann Street, North Gosford, the value of which could be as much as $350,000. He has other assets, having a total estimated value of $30,000. Shaun is unmarried and without children. He resides on his own in the North Gosford residence. 31 Shaun is pursuing a university degree course in electrical engineering which he expects to complete in November 2005. He gave evidence of his understanding that a first year graduate in engineering could expect to receive a gross annual income of $42,000. Shaun also engages in part-time work as a bartender at the Gosford Golf Club, since March 2004. As an officer in the Army Reserve he receives pay on a daily basis, for serving about 93 days a year at $65 a day. 32 Shaun's residence at North Gosford was originally acquired jointly by him with his brother Christopher for $120,000, that purchase price being provided by their Aunt Alison. Subsequently, Alison Martin advanced to Shaun $20,000 in order to buy out Christopher's share in the house property. Upon Alison's death, Shaun's indebtedness to her was forgiven. 33 Shaun, who at that time was working in Newcastle, then became the person primarily responsible for the Deceased. Shaun's responsibilities included attending to his grandmother's banking and investments, arranging for payment of her household accounts, attending to her mail, maintaining constant contact with her carers, and communicating with her doctor and with the Public Trustee on her behalf. 34 Christopher is unmarried and has no children. He is a qualified massage therapist, from which occupation he earns about $300 gross a week. He has been pursuing that profession since 2004. In addition, he has small earnings (probably totalling less than $1,000 a year) from work in the musical field: he sings and plays a saxophone. He is presently living in rented accommodation at Berkeley Vale. Until late 2003 he had been paying rent of $50 a week for accommodation at Wyoming. In his affidavit evidence Christopher disclosed that at 17 December 2003 his assets totalled $19,000, whilst his only liability was a credit card indebtedness of $1,500. 35 According to Christopher (who agreed under cross-examination that he did not regard himself as materialistic), he felt no anger towards his grandmother for his receiving a benefit considerably less than that of his brothers. He said that he had, in fact, requested the Deceased to cut him out of her will, offering as an explanation for that conduct, his distaste for the situation in which he now, ultimately, found himself, having to give evidence in court proceedings concerning his feelings towards his father. 36 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff. 37 I have had the benefit of receiving a chronology and a written outline of submissions from Counsel for the respective parties. Those documents will be retained in the Court file. 38 The Plaintiff as a son of the Deceased is an eligible person within paragraph (b) of the definition of that phrase contained in section 6(1) of the Family Provision Act. As such he has the standing to bring the present proceedings. The only other persons who are or may be eligible person in relation to the Deceased are the three beneficiaries, each of whom as a grandchild of the Deceased and as a person who had been partly dependent upon the Deceased, is an eligible person within paragraph (d) of the foregoing definition. 39 In this latter regard, however, it should be appreciated that, as well as being an eligible person in relation to the Deceased, each of the Neil, Shaun and Christopher is a chosen object of the testamentary beneficence of the Deceased. Indeed, Neil and Shaun are the chief objects of that beneficence. As such, those three beneficiaries do not have to prove anything. It is for the Plaintiff to establish his own claim upon its own merits. 40 The significance of the financial and material circumstances of the three beneficiaries is that those circumstances may have the effect of reducing, or even extinguishing, any order for provision an entitlement to which the Plaintiff might otherwise establish. The financial and material circumstances of the three beneficiaries cannot in anyway enhance the claim of the Plaintiff. 41 In performing the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208 the Court must first consider whether the Plaintiff has been left without adequate provision for his proper maintenance. 42 It is submitted on behalf of the Plaintiff that at the age of 63 he is in modest financial circumstances, with a much younger wife and five young children to support. It is said that he is only two years away from what is referred to as the "the statutory retiring age of 65 years". Nevertheless, there was no evidence before the Court that the Plaintiff was subject to compulsory retirement upon attaining that age. He has a superannuation fund of $17,000, but no savings upon which he can call in the event of an unforeseen contingency. 43 The Defendant, however, submits, concerning whether the Plaintiff has satisfied this first stage in the two-stage process, that the Court must have regard to the provisions of section 9(3) of the Family Provision Act, and that, in particular, the Court should take into consideration "the character and conduct of the eligible person before and after the death of the deceased person". 44 I have already observed that it is quite obvious that the Plaintiff could have maintained a relationship with his mother if he had chosen to do so. He clearly did not want to do so. That is a factor relevant to a consideration of the first stage in the foregoing two-stage process. 45 Nevertheless, I am satisfied that by reason of the total omission from the will of the Deceased of any provision for her only surviving child, the Plaintiff has been left without adequate provision for his proper maintenance. 46 The Court must next proceed to a consideration of how that omission on the part of the Deceased should be remedied. 47 The Plaintiff has placed before the Court a list of what he asserts to be his needs. That list includes not only a fund to meet unexpected contingencies, but the cost (unquantified) of extending his residence by constructing two additional bedrooms, together with the cost of a new driveway ($13,420) and a new fence with gateposts and remote control ($9,626). In addition, the Plaintiff seeks a replacement motor vehicle, being a new Toyota Tarago (he would trade in his present family car, which is only 10 years old, and the changeover cost would be about $40,000). The Plaintiff seeks that he should have sufficient funds to cover the cost of dental work ($3,500), that he should be enabled to repay the mortgage on his house ($48,000) and associated debts ($13,500). 48 The Plaintiff has performed a calculation concerning the cost of education of each of his dependent children, until each attains the age of 18 years. He comes up with a total figure of almost $41,000. In addition, the Plaintiff seeks a further amount in respect of treatment for the impaired hearing of his son Brogan, who is presently aged seven, and that treatment is estimated to cost $1,000. 49 The foregoing amounts which are quantified total $170,000, and do not take into consideration the unquantified cost of extensions for two additional bedchambers at the Ulverstone residence or for a fund to meet unexpected contingencies. 50 The foregoing asserted needs of the Plaintiff are nothing more than a wish list. There is not the faintest reason why the Deceased or her estate should be responsible for the payment of the mortgage upon the Plaintiff's residence, or for such enhancements to the residence as a remote control opening to the driveway. Neither is there any basis upon which the estate of the Deceased should bear the cost of educating the dependent children of the Plaintiff. 51 In my conclusion the highest entitlement which the Plaintiff could establish to receive out of the estate of the Deceased would be a relatively small fund to improve the modest lifestyle of himself and his family and to provide for unexpected contingencies, as well as to pay for necessary dental work for the Plaintiff and the medical treatment for his son Brogan. 52 However, as I have already observed, any order for provision an entitlement to which the Plaintiff might otherwise establish must be considered in the light of the competing claims of the three beneficiaries, in particular, the claims of Neil and Shaun, who under the will are entitled to almost the entirety of the estate of the Deceased. Neither Neil nor Shaun could be regarded as being affluent, although neither is in straitened financial circumstances. 53 It will be appreciated that had the will not been contested, each of Neil and Shaun would have received about $383,500. In consequence of the institution of the present proceedings and the concomitant effect of at least the costs of the Defendant in reducing the value of the distributable estate, it is likely that, even if the provisions of the will were to remain in effect, the value of the benefit to each of Neil and Shaun thereunder would be reduced to about $345,000. 54 I consider that the competing claims of the beneficiaries, in particular those of Neil and Shaun, will not have the effect of reducing, let alone extinguishing, a benefit to the Plaintiff in the sum of $60,000 (representing a fund for the purposes which I have indicated). A legacy of $60,000 to the Plaintiff would result in each of Neil and Shaun receiving about $315,000 from the estate of the Deceased. The legacy of $5,000 to Christopher will remain undisturbed. 55 Accordingly, I make the following orders:

(1). I order that the Plaintiff receive from the estate of the late Brenda Martin ("the Deceased") a legacy in the sum of $60,000, such legacy not to bear interest if paid on or before 28 April 2005 and if not so paid to bear interest at the rates prescribed for unpaid legacies pursuant to the Wills, 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.

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Judgment (15 paragraphs)

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