Moon v Abrahams

Moon v Abrahams - [2010] NSWSC 69 - NSWSC 2010 case summary — Zoe

[8]

4 The deceased had two daughters. The plaintiff, Mrs Diana Moon, is the deceased's eldest child. She was born in June 1949 and is now aged 60. She married Bryan Moon in September 1972. 5 The first defendant, Mrs Sharyn Abrahams is the deceased's second child. She was born in July 1954 and is now aged 55. The first defendant married the second defendant, Mr Robert Abrahams in January 1975. 6 In early 1996 the deceased separated from her husband, Donald Cawsey, and went to live with the plaintiff and her husband at Castlereagh until late 1997 when the deceased moved to a house she had inherited from her mother in Victoria Street, Berry. 7 The deceased, together with the plaintiff and the plaintiff's husband, purchased as joint tenants two neighbouring properties in Chambers Flat, Queensland ("the Chambers Flat properties") in 1997. It appears the deceased paid one half of the $205,000 purchase price. 8 In 1998 the deceased gave $5,000 to both of her daughters. 9 The deceased sold her home in Berry on 20 April 2000 and on 27 April 2000, the defendants and the deceased jointly purchased the Perthville property for $242,000. It appears the deceased lived with the defendants from that time onwards. The deceased contributed approximately half the purchase price. A deposit of $12,100 appears to have come out of the defendant's savings account on 17 March 2000. Taking into account rate adjustments, legal costs and disbursements, a total of $250,270.43 was paid for the Perthville property. On the available evidence before me the deceased contributed approximately one half of the purchase price. Given the deceased's instructions to her solicitor to write to Centrelink and inform them that she and the defendants had each paid half of the purchase price, I will accept this evidence. The certificate of title to the Perthville property showed the defendants and the deceased as joint tenants in the first schedule. 10 On 24 June 2000 the deceased executed a will. In that will the deceased devised her "half share" in each of the Chambers Flat and Perthville properties to the plaintiff and the first defendant respectively. 11 The Chambers Flat properties were sold in May 2001 for a total of $180,000. The settlement statement from John S. Gibson, Solicitor and Attorney, dated 10 May 2001 indicates that the proceeds of the sale were divided equally with the deceased receiving one half share of the net proceeds of the sale and the plaintiff and her husband receiving the other half. The last will of the deceased 12 The deceased executed her last will and testament on 25 July 2006 while in hospital. On 22 October 2009 probate to the deceased's will was granted to the first defendant who was one of the appointed executors. The plaintiff who was also appointed executrix in the will renounced probate to bring the present proceedings. 13 The deceased left two legacies of $20,000 to the plaintiff's sons, Craig and Mark Moon. Clause seven of the will, releases the deceased's brother, John Boxsell, from a debt he owed to the deceased of $40,000 or thereabouts. That debt was, in any event, statute barred. The deceased gave her interest or share in a standard bred horse partnership she held with the plaintiff, to the plaintiff and the plaintiff's husband. The deceased also gave her interest or share in a standard bred horse partnership she held with the defendants to the defendants. 14 Clauses eight and nine of the will then stated: " 8 I GIVE DEVISE AND BEQUEATH all the rest and residue of my Estate of whatsoever kind and wheresoever situate not hereby otherwise disposed of to my trustees UPON TRUST to pay thereout all of my just debts, funeral and testamentary expenses and TO HOLD the balance of my Estate then remaining as follows:- (a) AS TO fifty percent (50%) to my daughter the said DIANA JEAN MOON; (b) AS TO the remaining fifty percent (50%) to my daughter the said SHARYN MARIA ABRAHAMS . 9. I DECLARE that it is my wish that my daughters the said DIANA JEAN MOON and the said SHARYN MARIA ABRAHAMS divide equally between them all of the items of jewellery owned by me." The estate of the deceased 15 The deceased had no debts at the date of her death. The present property in the deceased's estate is as follows: (i) Cash $122,126.34 (ii) Toyota Corolla Sedan unregistered $ 1,000.00 (iii) Shares $ 1,593.60 (iv) Personal effects no commercial value TOTAL $124,719.84

[10]

(b) Standard bred horses registered in joint names with the plaintiff and the plaintiff's husband had an estimated value of $7,800 at the time of death. The plaintiff has now sold all these horses for what appears to be nominal abattoir value. 17 The defendant retained the horses she jointly owned with the deceased. However the horses have all been retired and have only a nominal value. 18 The plaintiff's son, Mr Mark Moon, held a cash sum of $14,091.55 for the deceased. Mr Moon withdrew this amount on 3 November 2006 and given the evidence, which I accept, of a gift to him of this cash by the deceased he would be entitled to retain that sum. None of the other assets of the estate had been distributed at the time of hearing on 27 October 2009. The deceased also gave a total of $3,500 to Mark Moon in 2006. 19 Since her death, the deceased's estate has borne the cost of $7,328.30 for funeral expenses. A figure of $1,861.00 remains to be paid for costs and disbursements following the grant of probate and administration. There are also the costs of these proceedings. 20 Following the deceased's death, the first defendant transferred the Perthville property into the joint names of the defendants. On 14 August 2007 the defendants took out a mortgage against the Perthville property with Macquarie Mortgages in the sum of $250,000. They drew down $185,000 from that facility and paid $150,000 into superannuation and $35,000 into a portfolio account with St George Bank. 21 On January 31 2008 the defendants sold the Perthville property for $465,000 on 31 January 2008 and received $256,467.20 after discharging the mortgage and paying other related sale fees. The money was used towards improvements and repairs to the defendant's present home in Nowra, for the purchase of a motor vehicle and horse float. The balance was transferred to a savings account held with IMB. 22 The will had the effect of giving the plaintiff approximately $42,359 worth of assets. This figure excludes any interest in standard bred horses and includes a half interest in the cash left in the estate after payment of legacies, a half interest in the motor vehicle and the shares. The plaintiff expects to receive partial repayments of loans totalling $55,000 she made to her sons Mark and Craig. These repayments are expected to total $40,000 and would be paid when Mark and Craig receive their legacies. Therefore before incurring legal costs, the plaintiff could have expected to receive $82,359. 23 Before legal costs, the defendants would have also received approximately $42,359 from the deceased's personal property as listed above. The deceased's half interest in the net sale price of the Perthville property was approximately $ 232,500 had the deceased severed the joint tenancy of the Perthville property prior to her death. 24 However, the theoretical position is no longer relevant as the defendants have incurred legal and probate costs of $87,181. That was on a two-day estimate but the case went for three days. Depending on whether there might be an order for recovery against the plaintiff there is the prospect of insufficient funds being available to pay the legacies. If the plaintiff succeeds and obtains an order for costs her estimated costs for a two-day hearing were $80,886. In that event there would be no actuate estate. Eligibility 25 The plaintiff is an eligible person. In applications under the Act the High Court in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 has set out the two-stage approach that a court must take. At page 209 the following was said: "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 Ltd [1938] AC at 476. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.

[14]

(a) The Portland property $470,000 (b) Superannuation (Bryan Moon) $ 34,000 (c) Motor vehicles $ 24,000 (d) Tractor $ 3,000 (e) Horse float and horse racing equipment $ 25,000 (f) ANZ accounts xx816 and xx324 $ 2,517 TOTAL $558,517 36 The plaintiff is unemployed. Her husband is employed as a casual landscape gardener earning $700 net per week if he works for six days of the week. He does not receive holiday or long service pay. Mr Moon is almost 60 and suffers from a degenerative condition in both knees. His right knee requires a total replacement. Since his work is physically demanding his prognosis for continuing employment is not good. 37 The plaintiff claims she has not received adequate provision from the deceased's estate, particularly when consideration is made of her age, limited working life and comparatively minor savings. The plaintiff argues that one half of the net distributable estate, including the notional estate would place her in approximately the same position as the defendants and provide her and her husband with approximately $230,000 in cash and superannuation. 38 The plaintiff has also indicated she would like to make some further expenditures to further her horse racing interest. This includes purchasing a new car to transport the horses and the construction of some sheds, fencing and a driveway. The situation in life of the first defendant 39 The first defendant receives a carer's pension of $506 per fortnight and the second defendant receives a disability support pension of $506 per fortnight. The second defendant, the first defendant's husband, suffers from a number of disabilities including rheumatoid arthritis, a swan neck, restricted movements to his wrists, elbows, feet, shoulders and cervical spine, osteoarthritis, cerebral circulation thrombosis and chronic back pain. Their expenses, including food amount to $595.00. The defendants also spend a large amount on training and racing standard bred horses. 40 The first and second defendants' financial position is as follows:

[33]

(c) The deceased did provide $50,000 to discharge a mortgage in 1987 and in the absence of any contrary evidence this amount should be taken to have been a gift. 51 The plaintiff gave evidence that the deceased paid no expenses while residing with her at the Castlereagh property and the defendants have provided no documentary evidence to support a contrary claim. In contrast while the deceased lived with the defendants she contributed to improvements on the property and paid one half of all expenses. So far as the improvements are concerned, the deceased's records show payments in the relevant period from April to August 2000 of $43,060.35. The defendants' records show that from September 2000 to January 2003 there were withdrawals from Mr Abrahams' superannuation of $42,775. The defendants' evidence was that their contributions to improvements came from the superannuation. 52 Evidence was given as to the nature of the improvements carried out. Although evidence of the actual payment for the work was not available, given the extent of the works, I am satisfied that the defendants made a substantial contribution to the cost of improvements. As I have indicated, the deceased's contribution was $43,060.35. 53 The plaintiff, along with the deceased and the first defendant, raised and raced standard bred horses. The plaintiff has given evidence that she has been involved in the sport since she was 16 years old. In the last 12 months the plaintiff has earned prize money of $33,000 and she has three horses that have not yet been raced. 54 The plaintiff's horses have had a number of small wins ranging from $200 to $8,000. There were a number of wins attributed to a horse called "Our Benefit" which the plaintiff sold in 2006 totalling $67,944. Another horse called "Benefactor" won $55,000. The plaintiff was entitled to a quarter share of the prize and has given evidence that the money went back into maintaining the horses. No documentary evidence concerning these activities was produced. 55 The plaintiff and the deceased owned horses together from 1993. During that time a horse called "Left Alone" earned prize money in the order of $61,963, a horse called "Ticket to Rome" earned prize money of $16,289, and a horse called "Art in Motion" earned $15,950. The plaintiff stated following under cross examination by Mr Blackburn-Hart, counsel for the defendants:

[58]

(a) That she needs $15,000 to $20,000 to complete some fencing and the driveway and constructing some sheds. (b) That she needs to replace the 19 year old Toyota Land Cruiser and a Hyundai Getz motor vehicle which was new in 2007 and which is now valued at $16,000. (c) A fund to cover the contingencies in life. 62 On the first matter the plaintiff's needs are not clear and it is apparent that in cross-examination that the driveway has been completed. She now suggests that she needs to erect a roof over a yard which would assist when looking after the horses. The extent of this roof is not evident nor is it costed. 63 So far as the cars are concerned, it is probably fair that the Toyota Land Cruiser should be replaced. She has probably had sufficient funds over the period to date to enable her to do this and, indeed, she would have had sufficient funds from the estate to enable this to happen. Clearly the second car which was purchased new in September 2007, after the date of death, does not need to be replaced. 64 When the plaintiff first swore her affidavit as to need she had a deposit of $50,000 available to her to meet these contingencies. She has now used this fund towards improvements to accommodate her hobby presumably on the basis that she did not feel the need to retain a sum for contingencies. One view of the circumstance is that if she were given a sum for contingencies she would be unlikely to save it and she would most likely use it for her hobby. 65 In this case it is plain that the plaintiff feels a great sense of injustice that the deceased left her half share of the property to her sister, Sharyn Abrahams. She continually badgered her mother about it before she died. The deceased intended to do this for three reasons that now do not all appear to be valid. The deceased was entitled to act in this way as it was her choice to do what she wanted with her property. 66 When considering this aspect it is useful to remember what Mr Justice Palmer said in Carey v Robson [2009] NSWSC 1142 at paragraphs 57 and 58 where he said the following: [57] The strongest ground for relief urged by Rosemary and Marion, though put somewhat obliquely, is that the provision made for them by the testator is vastly disproportionate to the provision made for Alan. One can understand the sense of grievance which one child may have at being treated by a parent differently from another child. Some may be tempted to think that great disproportionality of testamentary treatment in itself indicates some essential error in the testamentary process which requires amelioration under the Family Provision Act so as to achieve approximate equality between a testator's children. [58] That is not, of course, a position from which one can begin in this, or in any other case under the family provision legislation. It is useful to remind oneself of the parable of the labourers in the vineyard. Those who worked the whole day complained, not because their agreed wage was inadequate, but because those who worked only part of the day received the same wage and were therefore treated more generously. The moral of the parable is: what is fair and adequate to start with does not become unfair and inadequate just because someone else has been treated differently.

[59]

67 The starting point in the Court's consideration is the question of whether the plaintiff has been left without adequate and proper provision for her maintenance, education and advancement in life. This case involves an analysis of the situation of both the plaintiff and the first defendant and the provision made for the two daughters during the lifetime of the deceased. It must be seen in the context of the size of the actual notional estate. 68 It should not be forgotten that the plaintiff was greatly assisted by the $50,000 gift from the deceased in 1987. The benefit to the defendants of the deceased not severing her joint tenancy resulted in a gift to them of $232,500 at the date of death This would equate to $132,500 if paid in 1987. Alternatively, if one regarded the cash contributions of $168,195 to the purchase as passing on death this would equate to $95,871. Both figures are substantially greater than the gift of $50,000 to the plaintiff in 1987. It should also not be forgotten that the plaintiff stood to obtain a share of residue and by her own action of lending her children some funds she may also receive from the estate the legacies of $40,000. When considering the question of whether she has been left without appropriate provision at the time of the hearing one can have regard to what would have been the situation in the estate if this litigation had not commenced. 69 I have set out above the financial situation of the plaintiff and her husband and the first defendant and her husband. The situation in life between the two is not dissimilar except that the plaintiff's cash reserves are less than those of the defendants mainly because she has spent them in pursuit of her racing interests since the proceedings started. Both couples are at the end of their working lives and the defendants have been on a pension for many years. The difference in the values of their respective properties is immaterial. If the only need was for the plaintiff to replace her car she would have received sufficient funds from the estate to accommodate this need and the proceedings should be dismissed. There is, however, her claimed need for a sum for contingencies and this matter requires further consideration. 70 A careful analysis of the facts in the defendant's submissions on this aspect demonstrates that the plaintiff and her husband have for many years been involved in horse racing which has resulted in them losing substantial sums of capital and income. I accept that this is the case. The defendants' submissions on what should flow from this were as follows: "34. This is not a case which is equivalent to one where a plaintiff has a gambling or drug habit, as a result of which, the plaintiff might have needs which a testator should have provided for. The "needs" asserted by the plaintiff, have arisen because of her "hobby". The inevitable implication is that the unexplained missing sums were applied towards the plaintiff's hobby. Addressing the question of whether or not she has been left without adequate provision requires an examination of her chosen lifestyle. If the Court accepts her evidence that the costs of maintaining, training and racing horses exceeded the prize money and if the Court has regard to the level of expenditure on improvements to the various properties of the plaintiff devoted to these activities, it is quite apparent that this "hobby" has consumed a major proportion of the assets and income of the plaintiff and her husband for many years and will continue to do so. The Court should not accept any assurance or statement by the plaintiff that she intends to "finish up" within two years or any period. It is "in her blood". She was unable to assure the Court that she would " finish up" her hobby of owning, breeding and racing horses. Her current lifestyle and the desire to retain and continue this hobby in her present circumstances and in the future inevitably impacts on whether she has been left without adequate provision. 35. It is submitted that this type of expenditure is entirely voluntary. It is properly regarded in her circumstances as a luxury which she is free to indulge in but the Court should not assist her by giving her more. She has already spent her Esanda deposit of $50,000.00 she was keeping as "part of a fund to meet our future needs" in further "improvements" for the hobby, not on living expenses. ….. 40. If the plaintiff were to simply cease her "hobby" with harness horses, her argument for further provision would disappear. She admits she has been hoping for "30 odd years" she will not continue to lose money on it. Why should her luxury be funded by the defendants?"

[60]

71 As I have said earlier the plaintiff's reason for bringing the proceedings was her perceived injustice about her mother's decision not to sever the joint tenancy. Her actions do not support the view that she also brought the proceedings to obtain a fund for contingencies. However, those are matters on which the Court must make take an objective position. If the plaintiff has been left without such provision then, subject to matters to which I will deal with later, the Court should consider the question of whether she has a need for a fund for contingencies. 72 The concern that the plaintiff may not apply any provision for its proper purpose has been referred to by Powell J in Howarth v Reed Supreme Court of New South Wales 2 March 1991, 15 April 1991 (unreported). His Honour refers to the possibility of a provision not being applied by the person for the purposes intended by the court. At pages 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." The question, then, is what is the form of order which ought now to be made?" 73 In contrast to her sister the plaintiff as a result of her own actions has no fund for contingencies. The defendants have savings and superannuation which represent the benefit which the plaintiff received from the deceased's failure to sever the joint tenancy. 74 However, this does not mean the defendants' savings should be taken away. In some ways the defendants are worse off then the plaintiff and her husband. The defendants have not worked since 1997 and are dependant on the pension to meet their needs. The other matter which impacts on the defendant's situation is the question of any costs which may be made in favour of the plaintiff as this will mean that there is no actual estate. 75 In these circumstances, although what might be an appropriate provision will be small, I think that the plaintiff has been left without adequate and proper provision. 76 Under s 23 of the Act I can designate the defendants' property as notional estate if there has been a prescribed transaction which took place on the death of the deceased. 77 The relevant prescribed transaction which is alleged under s 23(b)(iii) of the Act is the failure of the deceased to sever the joint tenancy. By the combined effect of s 22(1)(a)(i), (4)(b) and (5) there will be a prescribed transaction if the deceased omits to sever the joint tenancy immediately before death and full valuable consideration in money or money's worth is not given for the omission of the deceased to do that act (s 22(1)(b)).

At a glance

Court

Decision date

Before

Source

Judgment (67 paragraphs)

Parties

Cases Cited (6)

Cited By (1)