McLean v Public Trustee

1 MASTER: This is an application under the Family Provision Act by the daughter of the late Jean Mildred Uncle, who died on 13 July 1999. The plaintiff is the daughter of the deceased. The deceased was survived by her children and a number of grandchildren. The deceased made a will on 14 November 1997 in which she gave $2000 each to certain of the grandchildren, $12,000 to her two daughters and son - that is $12,000 each - and $12,000 to be divided between three named grandchildren. The rest of the estate was to be held for eleven named grandchildren who survived and attained twenty-five years of age. Effectively, there are legacies of some $54,000 with residue being divided between eleven named grandchildren. 2 The estate has been reduced to cash in an amount of $219,425. The plaintiff's costs which have been incurred amount to some $30,000, the defendant's $20,000. 3 I will deal with a little of the history first. The deceased was born on 25 October 1922. Her son was born in 1948 and the present plaintiff was born on 25 November 1949. Her two other daughters were born in the 1950s. The plaintiff herself commenced working as a nurse at Camperdown Children's Hospital in about 1966. She failed and then had a child in April 1970. She married John McLean in 1973 and had a number of children as a result of that marriage. In 1978 she left her husband and returned to the deceased's house. In 1981 the deceased purchased a house at Werribee in Victoria. The plaintiff's father died in 1987. The plaintiff herself was divorced in 1988. In 1988 she was dismissed from employment with TNT for stealing funds. At that stage the deceased allowed the plaintiff to live in the house at Werribee in Victoria which had been purchased. 4 The plaintiff had a gambling problem which affected her for a substantial part of her life. She does not dispute this. She gave evidence that between 22 May 1996 and 4 February 1997 she attended a live-in rehabilitation course with the Salvation Army. That was as a result of her giving an undertaking to the Court to do so in respect of an offence which she had committed. She was asked to leave that course before completing it as apparently it could not help her. 5 The deceased's house at Werribee had been put in the names of the children of the deceased, including the plaintiff. That was ultimately sold some time prior to September 1997 and the proceeds divided up between the children. The plaintiff received a lesser share because of the fact she had not paid the rates for some time and there were costs involved with cleaning out the house. She received $8860 on 19 September 1997. It is apparent from her bank statements that the whole of that was dissipated by 5 November 1997 when she had $10 left in the bank account. Apart from $500 spent on an engine for a car, basically the money was all used for gambling. The deceased became aware of this, having opened a bank statement of the plaintiff's. She changed her will and made a new will to which I have referred. At the time of giving instructions for the will, she stated to the Public Trustee that the plaintiff had a gambling problem and had recently gone through $9000- worth of proceeds of the sale. The deceased said she would provide further instructions in a sealed envelope, that these in fact were not provided. 6 The deceased died on 13 July 1999. Probate was granted to the Public Trustee and the summons filed in time. In October 2000 the plaintiff remarried. 7 In applications under the Family Provision Act, the High Court has 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' et cetera 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 et cetera 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 provisions, 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." 8 In accordance with what has been indicated by the High Court, it is necessary to first look at the situation of the plaintiff. She is fifty-one, fifty-two years of age and is married. She has no dependants. All her children are adult and not dependent upon her. She lives with her husband, whom she married last year, in a Housing Commission unit. So far as assets are concerned, she and her husband have a 1982 Corona station wagon worth $2500, some furniture and minimal moneys in the bank. They have debts of $423 owing to Centrelink, $2260 owing on the purchase of the car and $440 owing to a Mr J McSweeney. They both live on the pension. Mr McSweeney receives a pension of $345.50 a fortnight and the plaintiff receives a carer's pension of $427.50 per fortnight. Their expenses, including rent, substantially use most of their income. 9 The plaintiff has received benefits from the deceased in her lifetime. There was the house at Werribee which was put in the children's names from which she received money and there were other benefits received from time to time. Clearly, the deceased recognised that the plaintiff had a serious gambling problem although it does not seem that the plaintiff received much help from the family as a result of this problem. 10 It is necessary also to have regard to the situation of others who might have a claim on the bounty of the testator. In this case there are, firstly, the three children of the deceased, the two others in any event only taking a legacy of $12,000 each under the will. 11 Mr John Uncle is fifty-two years of age. He has a property at Forster worth some $220,000, a car and furniture and a mortgage of liabilities of about $60,000. He has an income of about $2500 a fortnight. 12 Janet Guilmartin is forty-five years of age and she works as an administrative assistant. She has a house at Kincumber with a mortgage of some $41,000. They have a car and furniture and loans of some $20,000. Her husband is unemployed and does not receive benefits. 13 Julie Brown is another daughter and she is employed in information technology. She, likewise, has a house with a mortgage of some $90,000, a caravan, car, household contents and some other liabilities of $17,000. She and her husband receive a salary of close on $1000 a week, which is used in expenses. 14 So far as the grandchildren are concerned, these are the ones who may be affected by any order, given the way that the case has been presented. John McLean is twenty-six years of age. He is a child of the plaintiff. He is married and has three children. He has a car worth $30,000, furniture and a car loan of about $25,000. He has an income of $550 a week. 15 Janelle Guilmartin is twenty years of age. She is a production worker. She has a car worth $7000 and a car loan of a similar amount and income of about $300 a week. She wants to pay off her car. She is in good health. 16 Mitchell Guilmartin is nineteen. He is employed as an IT consultant. He also has a car with a car loan greater than the value of the car and a liability to NRMA Insurance of $3500. He earns $374.80 a week and is in good health. 17 Jeffrey McLean is twenty-four and is a son of the plaintiff. He has some furniture and camping equipment, no liabilities and a salary of $500 a week. He suffers from asthma; otherwise he is in good health. 18 Accordingly, one can see that the grandchildren are all fairly young and starting their lives and will receive something which will assist them, even if some order is made. 19 Questions have arisen about the fact that the plaintiff has been convicted of some offences such as shoplifting and stealing from her employer. They are not relevant, in my view, to the duty owed by the deceased, as long as there was no break in the relationship between the deceased and the plaintiff. The problem with gambling is certainly a serious one. The plaintiff obviously recognised herself that she can never be cured and, once you start again, then it is very hard to stop. Clearly, although she attended the Salvation Army course for some time she was not successful and it is perfectly obvious that a short time after that she dissipated just under $9000 in the course of a couple of months once she had access to those funds. It is apparent from the evidence that there is some small gambling which was going on in the months before she married in October and there has been one occasion in February this year when she has gone out and spent the whole of her pension moneys. In her type of financial situation that, of course, is devastating on the finances of her and her husband because they have simply no funds until the next pension day to support themselves. 20 This problem has been dealt with by a number of judges, by Young J in Vavros v Bondy, unreported 29 August 1988, and also the decision of Powell J in Howarth v Reed. There his Honour refers to the possibility of a provision not being applied by the person for the purposes intended by the Court. At pp 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 non 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.' The question then is, what is the form of Order which ought now to be made?" 21 As his Honour says, these problems can be addressed by the type of Order that might be made and if a court thinks it appropriate, it can fix the terms of an order in order to try and ensure that any funds which are advanced are not wasted. 22 In the present case, what is put forward is that the plaintiff wishes to receive a car which can be used to get them to work. The plaintiff herself has problems which means that she cannot work and her husband has very bad back problems which means that he cannot drive a manual car, which is what they have at the moment. They have identified a second-hand Commodore which has done something in excess of 100,000 kilometres which they could buy for $18,990. Also, they live in Housing Commission housing and they have little in the way of furniture. They have identified items of furniture and appliances worth something in excess of $3000, which they need. They have little else to do and obviously that is needed. The plaintiff also suggests that she should have some sum to cover the contingencies in life. The provision of funds even by way of a trust which would prevent the plaintiff having access to it, is also opposed by the defendant. It was suggested that if any items came into the possession of the plaintiff, they might be sold and the funds used for gambling. 23 I do not think that is a necessary or likely outcome and there are a number of matters which would probably stop that happening. Foremost of these is of course that she is married and in a relationship with her husband and he has her interests at heart. 24 In these circumstances, I think it is appropriate that there should be provision for the plaintiff in the sum of $45,000 by way of a legacy out of the estate to be held upon trust for the Public Trustee:-

(a) to apply up to $20,000 of such fund in the purchase of a motor vehicle for the benefit of the plaintiff, such motor vehicle being able to be in the name of the plaintiff and her husband jointly or even in the sole name of the plaintiff's husband, if that is what the plaintiff desires;

(b) as to the sum of $4000 to be applied by the Public Trustee in the purchase by the Public Trustee for the plaintiff and her husband any such items of furniture and appliances as they shall nominate to the Public Trustee. As to the balance, to be held upon protective trust for the plaintiff for her lifetime with power to the Public Trustee to advance up to the whole amount of the capital sum in payment of liabilities of the plaintiff, for any matters which are necessary for her support, welfare, medical attention or the like. 25 I order the plaintiff's costs on a party and party basis and the defendant's costs on an indemnity basis to be paid out of the estate of the deceased. I grant liberty to apply. oOo

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