MEERS v PERMANENT TRUSTEE [2000] NSWSC 1108 | Case summary

JUDGMENT 1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late William Walsh who died on 11 January 1998 aged sixty-five years. The deceased had no wife or children and he was one of a family of thirteen brothers and sisters. He died intestate and was survived by eleven brothers and sisters who shared on intestacy. One of those has since died leaving a widow. The estate consisted of a property known as Williewa Vale, Portland, New South Wales. It was a small property of some 232 acres and was worth about $200,000. There were some other assets which he had bringing the total of his estate of $229,501. 2 In the administration of his estate and this litigation various expenses have been incurred. There are defendant's costs of some $30,600, rates of $300 and because the property will obviously have to be sold, there is going to be things such as agent's commission of $10,000 and other expenses. For instance there is trustee's commission in excess of $9,000 and there are other administrative expenses concerning some disputes with cattle in the amount of $3,400. After making allowances for these costs and expenses, the estate when realised, it is likely to be in the order of $176,000. The plaintiff's costs, if she is successful, will also come out of the estate and they are in the order of some $20,000 leaving a balance of some $156,000. Split eleven ways that will be about $14,000 for each person all still entitled, if they can be found. 3 The plaintiff is a niece of the deceased. As such she needs to prove she is an eligible person within the meaning of that expression under the Family Provision Act. In the circumstances she has to prove that she has been part of the household of the deceased and partly dependent upon the deceased. In the circumstances of this case, this clearly has occurred. So far as the household was concerned, she moved in to the deceased's house on his property at the end of 1993 and lived there continuously until the present time. She was accompanied by her children and also her mother. So far as the dependency is concerned, it is important to note that it is only partial dependency that has to be established. I am not going into the detail of the case which set out the nature of dependency because in this case it is apparent that there is dependency of a financial and material nature. That dependency is clearly the provision of accommodation for the plaintiff and her children, she being responsible for them. There was also evidence of provision of food by the deceased and accordingly I would be satisfied that the plaintiff is an eligible person within the meaning of that expression in the Act. 4 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.'"

6 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. 7 It is probably useful in considering the question of whether there are factors warranting the making of the application to note briefly some of the chronology. The deceased appears to have been born in 1933 and one of a large family. The plaintiff herself was born on 18 December 1966. The deceased appears to have acquired the property from Richard Walsh somewhere in 1968 or 1969. He worked on it raising cattle in probably what was a fairly marginal operation given the property's He had a back operation apparently in 1972. The plaintiff had her first child, Matthew, on 17 November 1992. It was at the end of 1993 that she and her mother moved into the deceased's house on his property. On 29 January 1994 the plaintiff's daughter, Jessica, was born. The living arrangements continued and, as I have mentioned, the deceased died on 11 January 1998. 8 Some two days before, on 9 January, in circumstances which are not completely clear on the evidence and which are probably not that important, Mr Le Fevre, a solicitor who practises in the Lithgow area, attended upon the deceased to discuss a proposal by the deceased to transfer his property to the plaintiff. One of the brothers of the deceased, Richard Walsh, who is also known as Ted Walsh, died in November 1998. In January 1999 probate was granted and in April 1999 a summons was filed within time. 9 In considering the circumstances surrounding the matter one of the factors to be taken into consideration under s 9(1) is the circumstances in which the plaintiff commenced cohabitation with the deceased. Her mother, Olive, says that she was asked by the deceased to come and live with him. In fact he had asked her on a number of occasions. The plaintiff herself does not have any real recollection of the circumstances and there is evidence of a number of conversations between the deceased and others in which he recounts in some bitter way the circumstances in which they came to live there. It would seem that probably the deceased anticipated that they would be there for a short time and at the time they came they were in difficulties. This was denied by the plaintiff's mother but relevantly what has to be considered is the circumstance in which the plaintiff came to be there. She does not give any specific evidence of a request for her to move in. It seems to be more a matter of the fact that she was part of her mother's household when the mother came to live there with the deceased. Be that as it may, she did become part of the household. She gives some evidence of help that she provided during the five years that she was there. This included assistance with feeding cattle which numbered about twenty, feeding dogs which numbered between five and six, and goats also numbering twenty. She makes it plain that there was also assistance from the deceased's brothers and other members of their family and I think it is fairly clear from the evidence that a lot of other members of the family would from time to time - as people tend to do in the country - help their siblings. Although I have no doubt the welfare work and particularly some of the work with the stock might have been dealt with by the family, that there was some assistance provided by the plaintiff to the deceased. She also speaks of taking him to hospital and other matters. 10 There was also in this matter the circumstances that occurred just before the deceased died and that concerns the assistance by the local solicitor, Mr Le Fevre. He received a call to go to the hospital to see the deceased and met there Cheryl and her mother, Olive. He has sworn an affidavit and also there has been admitted into evidence his contemporaneous file notes one of which was made a day or so after the visit. The proposal put to him by the deceased was that he wanted to transfer the property by way of gift to the plaintiff. The solicitor then informed the deceased of the costs such as stamp duty and valuation fees and in those circumstances the deceased obviously did not want to proceed with the transfer. He did however then raise the question of a will and gave instructions to prepare a will appointing the plaintiff executor and beneficiary. Throughout this period of this interview, according to the solicitor, both the plaintiff and her mother were present. Having seen him in the witness box it does not seem to me a situation where the instructions might be compromised and it seems that the instructions were given. There is no doubt that the deceased made some statements around this time that he was not going to sign a will, including statements that probably fall within the period of these instructions to the solicitor and to his death two days later. There was no instruction to the solicitor that death was imminent. In fact he expected to see the deceased at his home after he got out of hospital. Unfortunately that did not occur as the deceased died suddenly. 11 Given this evidence and accepting it as I do, I think it is clear that there was a recognition by the deceased of some tie to the plaintiff. The decision to incorporate her into his testamentary plans is important and points to some acknowledgment by the deceased of an obligation to provide for her. It may be that her circumstances were such, he having been involved in helping look after the children, that he felt an appropriate obligation. Looking at the matter in a traditional sense, I am satisfied that there are factors warranting. 12 In case it is not appropriate, I will move on to consider whether there are prospects of success in the claim. 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 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 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." 13 As directed by the High Court, it is necessary to look at the plaintiff's situation. She is single, thirty-four years of age and has two young children. In addition she is pregnant and she is expecting that child in January next year. She is in no relationship with a person and is a person who has no assets. She has lived for the six years on the property and has no other obvious place to go to. She might have to rent a property or apply for rental of a Housing Commission home. Given her situation naturally she is entitled to various benefits. She receives a supporting parent's benefit of $376.70 a fortnight along with a family allowance of $270.98 a fortnight. She has virtually no savings and her account is only used to receive benefits and expend that on living expenses. Her Ford Falcon sedan is of no use, is not registered and is apparently not able to be registered. 14 It is also necessary for the court in these applications to consider the situation of others having a claim on the testator's bounty. In this case the relevant people are brothers and sisters of the deceased and they are people who one presumes are his chosen objects of testamentary benevolence. Importantly they do not have to establish their entitlement to be left something by the deceased and should receive their share. 15 In looking at whether it is appropriate to make provision for the plaintiff, it is also appropriate for me to look at these persons' financial situations and their relationship with the deceased. I will deal with each of them briefly. The first person concerned, Richard Walsh, died some time after the deceased. The beneficiary of his estate is his widow, Hope Margaret Walsh. She is apparently under the care of the Protective Commissioner and is sixty-nine years of age. She has dementia, having limited communication skills and cognitive impairment. She has been residing at a nursing home since December 1998. Although her health is good, her mental health is deteriorating and her behaviour is becoming more challenging. She lives in a nursing home. She undertakes therapy. She has a pension of some $377 a fortnight and that is wholly taken up in the provision of her accommodation and minimal needs provided by the nursing home. She has a balance in the Protective Officer's estate of $4,982. There is evidence before me that if she does withdraw funds from the estate, these would be used to continue organising activities for her at the nursing home. For example, it is necessary for her to have some chairs, linen and doonas for her to make it life comfortable. There is also a need for a disability adviser to make an independent assessment of her needs which would lead to further suggestions for her support. Clearly she is a person who could benefit from what she is likely to receive from the will of the deceased. 16 Evelyn Stewart is a sister. She is seventy-one years of age and is the second oldest of the children. She has had a family and presently her situation is that she rents a property at Lane Street, Williewa. She has no savings, has got a twenty year old Datsun motor vehicle, a small amount of furniture and her assets she estimates at no more than $10,000. She has a debt of some $800. She lives on a pension of $330 a fortnight. She has rent which she shares with three others of $250 a fortnight. She would like to replace the motor vehicle and no doubt she is clearly in need. 17 The plaintiff's mother, Olive Meers, is also in a poor state. Her assets are worth about $1,000 and she has a debt of some $4,000. That probably has something to do with a dispute about the cattle. Her income is $160 a week which she spends on food. She intends to use any share she has in the estate to assist her daughter. 18 Edward Keith Walsh is the next brother. He has very little by way of assets. He has what is described as a tin-sided house worth $20,000, furniture and household goods. His income is $160 a week from the old age pension. If he received money from the estate he would want to do such basic things as purchase a hot water system and an electric stove, reclad the walls, put some power points in, perhaps get a small car so he could get into town. He also is not in a good situation. 19 John Walsh, known as Jack Walsh, on the evidence seems to have disappeared about twenty years ago. There is no affidavit filed by him. Similarly there is no affidavit by Raymond Walsh. 20 There was an affidavit filed by Patrick Walsh. He lives on the adjoining farm. He has grown up there and has some disabilities with a club foot and has recently had an operation for cancer of the bowel. He has no significant assets. He lives with another family and has never needed to have a house. He has an old Kingswood motor vehicle. He has some small shares in a foal and a horse. He says his assets are about $20,000. He lives on an invalid pension of $370 a fortnight and has a need for a car or at least to do up his old Holden. 21 Kathleen Ashford is a sister aged sixty years. Her current situation is that she does not have any assets. She is a widow and has only one son. She is renting a Housing Commission home and even the furniture in the house belongs to her son. She owes the son some $400 and owes her brother some money. She has the age pension and pays rent of $170 per fortnight. She wants to repay her debts and look to try and buy a house with her son. 22 Harold apparently died as an infant. Myrtle Griffith, a sister, says that she receives a de facto wife's pension of $155.78 a week and her expenses are about $140 per week. Her de facto husband receives the same, and owns a house in which they live. It seems that she would want to do some work at that house to make it more comfortable and livable if she received money from the estate. 23 Agnes Walsh is a sister who also lives in a minimal situation. Her Ford Fairlane is worth $2,000 and she has household furniture of $2,000. She has a fortnightly income of $340 which she needs to spend on her outgoings. She needs to have a new car to treat her arthritis and she would like some furniture. 24 Alice Inwood is a sister of the deceased. She lives at Cowra. She and her husband have a house worth $55,000 on which there is $20,000 mortgage, a 1983 Nissan Bluebird and $400 in the bank. They have a combined income of some $320 which is all used in meeting expenses. She obviously has an urgent need to pay off the mortgage and carry out house repairs and car repairs. 25 All of these people to whom I have referred are people who are living in straitened circumstances and should not be deprived, subject to any genuine needs on the plaintiff's part, of any substantial part of their respective inheritances. 26 The plaintiff has to establish that she has been left without adequate and proper provision for her maintenance and education or advancement in life before she is entitled to an order. I turn to what is said by the plaintiff in respect of how she has been left with inadequate provision for her proper maintenance, education and advancement in life. In this regard I am reminded of what was said by Sheller JA in the Court of Appeal in Singer v Berghouse on 23 July 1992. There his Honour had the following to say: "I must say that I find it extraordinary that the appellant presented scant or no evidence as to her present income and outgoings or as to her intentions or needs for the future or as to what lump sum provision applying appropriate discount tables would be required to meet these claims or needs, if they existed. In my opinion, in the circumstances of this case, for the court, in the absence of any such evidence, to make an order for the payment to the appellant of a lump sum is to do no more than act on speculation and, contrary to the prohibition contained in s 9(2) of the Act, to alter the deceased's disposition of his property in the absence of proof that he has inadequately provided for the appellant." 27 It is perfectly apparent that in this case the property and the home has to be sold. This has been evident since the day the proceedings commenced. Once proceedings are commenced costs are incurred and ultimately the asset has to be sold. In these circumstances all the plaintiff's affidavit says is that she needs accommodation and she wishes to have the property transferred to her. She points particularly to the discussions with the solicitor and the statements that the deceased made, especially that he intended to leave the property to her. However, given the fact that the property is to be sold, the court cannot consider any provision of accommodation for her because there is no evidence of what is the cost of accommodation. 28 The court can take notice of a number of factors that emerge from her evidence and that is that she has been living on social support for many years. She has two young children to rear and she will have another for whom she will be responsible. Clearly she will need to move out of the house, as her mother will, and she will have to find some other accommodation. She has little chance of obtaining work, firstly because she has a young family to look after and no one other than her mother to help her do that and it is also difficult in that area for people with little qualifications to obtain work. The plaintiff did not even achieve the School Certificate and left at fourteen. The last job that she can recall having was in 1997. In these circumstances obviously she is going to have some costs to cover transitional accommodation requirements, matters of bonds, costs of setting up somewhere else with some modest items of furniture but there is no evidence of what any of these costs will be. 29 In the circumstances it seems to me that it is appropriate that she have a small legacy to assist her to overcome these difficulties and in the circumstances I order that the plaintiff receive a legacy out of the estate of the deceased in the sum of $12,500 with interest to run at the rate provided under the Wills, Probate and Administration Act, from two months from today. I order the plaintiff's costs on a party and party basis and the defendant's on an indemnity basis to be obtained out of the estate of the deceased. 30 I note that it has been drawn to my attention that Myrtle Griffith has died. However, the person with whom she had the de facto relationship is still alive and he would be entitled to her share on the intestacy. oOo

MEERS v PERMANENT TRUSTEE

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Judgment (9 paragraphs)

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