MORGAN v PUBLIC TRUSTEE

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

2627/98 - BARBARA ANNE MORGAN v PUBLIC TRUSTEE OF NEW SOUTH WALES - ESTATE OF ELLA ENID NILON

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Ella Enid Nilon who died on 12 July 1997 aged 72 years. The deceased was survived by the plaintiff who is the daughter of the deceased's sister. The deceased was also survived by three step children being children of her husband, Dudley Nilon from an earlier marriage. They have been notified of the proceedings, and make no claims so their interests can be disregarded. 2 The deceased died intestate, and given the enquiries made by the defendant administrator it is clear the proceeds pass to the Crown as bona vacantia.. There was reference in the affidavit evidence to the intention of the step children to make application to the Crown for payment out under s 61 B (8) of the Wills Probate and Administration Act 1998. However, having regard to s 7, 9 and 20 of the Family Provision Act it would be inappropriate to have any regard to such intention. The estate has been reduced to cash and amounts to $353,305.44. The defendant's costs amount to $10,000 and the plaintiff's $47,000. The distributable estate is thus in the order of $300,000. 3 In order to set the background I will deal with some of the history of the deceased and her family. The deceased, Ella Enid Nilon was born on 18 June 1925. The plaintiff was born at the Royal Hospital for Women, Paddington, New South Wales. Her mother was not married, and at that stage she was residing with her grandmother at 211 Johnston Street, Annandale. The deceased, Ella Nilon, was a first cousin of the plaintiff's mother and was residing nearby at 215 Johnston Street, Annandale. 4 The plaintiff's mother in between March and September 1943 married and left Australia to reside in New Zealand with her husband. The plaintiff, her daughter, then commenced living at 215 Johnston Street, Annandale in the care, custody and control of the deceased and her parents. 5 Some two years later the plaintiff's mother returned to Australia following the death of her first husband. The plaintiff then apparently left 215 Johnston Street to live at 211 Johnston Street, Annandale with her mother and grandmother. Later in 1945 the plaintiff commenced work as a live-in housekeeper at Kirribilli. Once again the plaintiff returned to live at 215 Johnston Street, Annandale in the care, custody and control of the deceased. 6 The plaintiff commenced primary school in February 1946 and about this time the plaintiff's mother married for the second time. A daughter was born in 1948 of that second marriage, and at this stage the plaintiff was living from time to time either with her mother or with the deceased and her parents at 215 Johnston Street. 7 In 1949 the plaintiff's mother separated from the second husband, and the plaintiff then moved back to her mother's place. In early 1950 the plaintiff's mother obtained employment as a live-in domestic at High Street, Kirribilli. She and her daughter Clare moved to that address. The plaintiff did not accompany them, but returned to moving between 211 and 215 Johnston Street, Annandale where she was looked after alternately by her grandmother, the deceased and her parents. 8 In 1952 the plaintiff commenced her secondary education at Riverside High School, and at this stage it was the deceased who was making her uniforms, paying the school fees, and matters of this nature. Also in 1952 the plaintiff's mother left home and moved to a live-in position at Bankstown in New South Wales. 9 By 1956 the plaintiff had finished her secondary school education and commenced working. Once again she moved between 211 and 215 Johnston Street, Annandale being looked after by either her grandmother at 211 or the deceased at 215. 10 In January 1961 the plaintiff married John Morgan and commenced her family the following year. They moved to Bankstown in 1963 and in 1964 came back to 211 Johnston Street in order to look after the plaintiff's ailing grandmother. In due course, a year later in 1965 they moved to Seven Hills and continued raising a family. 11 It was in 1975 that the deceased married Dudley Nilon. The contact between the plaintiff and the deceased at this stage lessened but they still maintained contact. During the following years there were visits by some of the step children of the deceased to Australia to visit the deceased's husband. 12 It was in 1995 that the plaintiff was first diagnosed with breast cancer. She had medical treatment both chemotherapy and radiation. By 1996 it was in remission, and her treatment ceased at that stage. 13 In March 1996 the deceased's husband Mr Nilon died, and thereafter the association between the plaintiff and the deceased increased to the extent that the plaintiff and her husband would look after the deceased by taking her on outings and keeping her company. 14 In November 1996 the plaintiff's husband was retrenched from employment at Otis as a result of work injuries and has not worked since then. The following year in various discussions the deceased indicated that she proposed to leave her house to the plaintiff and talked of making a will to that effect. 15 The deceased died on 12 July 1997 and thereafter a grant of administration was taken out in due course and the proceedings were commenced within time. By August 1997 the plaintiff's breast cancer started to spread to her lungs, and she has undergone further treatment since then. 16 For the plaintiff to be able to claim in that estate it is necessary for her to be an eligible person, and in the present case she will only be an eligible person if she is part of the household, and partly dependent upon the deceased. There is no dispute that she was part of the household that comprised the deceased and the deceased's parents. 17 Dependency also is conceded, and this is obvious from the account which I have given of the plaintiff's movements to and from 215 Johnston Street. Effectively the plaintiff was mothered by the deceased. There was provision of clothes and the necessities of life by the deceased. This on the evidence included the providing of food. 18 It is clear that the plaintiff is an eligible person. 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 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.'" 19 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."

20 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 prospects 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. 21 There are a number of factors which would indicate factors warranting in the traditional sense. The first of these is that the deceased herself considered the plaintiff to be someone who was a person who should be benefited under her will. There were the discussions in which the deceased indicated to the plaintiff that she wished to leave the house to her. It is easy to accept this evidence because in fact the deceased had said the same thing to someone from outside the plaintiff's immediate household. In fact the deceased had thought she had made the will, and had left the house to the plaintiff. 22 The other matter is the fact that the deceased was a surrogate mother for the plaintiff. The extent to which she was such a mother has been criticised in submissions because it has been pointed out, for instance, that the deceased was only 15 at the time the plaintiff was born. Clearly the major part of the care of the plaintiff which the deceased undertook would have commenced when the deceased was 17. At that stage she had left school and was in employment and earning funds. Although not a lot it was no doubt sufficient for her to provide for the plaintiff.

23 The other people who were in the household at that stage were the deceased's parents. I think they on the evidence lived there until 1954 and 1959 respectively, and they no doubt provided the accommodation. However, for a substantial period when the plaintiff did come back to 215 Johnston Street she was looked after by the deceased. 24 By 1959 the deceased was going out with her future husband. For some time prior to that she had been travelling. The relevant period is when the plaintiff was a young girl and growing up. 25 The deceased herself had no children and apparently may not have been able to have children. There is evidence that shows the deceased being closely involved on a day to day basis with the upbringing of the plaintiff. This included changing nappies, looking after her, making clothes, providing school fees and all manner of things that are necessary with a young child. 26 The deceased during this time used to like taking the plaintiff on trips and this is in evidence in photographs. The contact the plaintiff had with the deceased in later years after the death of the deceased's husband also indicates the reality of the earlier relationship. There clearly was a close relationship between them. In my view given this relationship, the factors warranting in what I might describe a more traditional approach are certainly present. I will consider whether or not the plaintiff has prospects of success in the following analysis, and I do come to the conclusion that there are good prospects for her success. Accordingly, I am satisfied there are the appropriate factors warranting under s 9(1) of the Act. 27 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 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 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." 28 I turn to the plaintiff's situation, she is 59 years of age, married and has five adult children. Her financial situation is that she and her husband have a home worth $150,000; have furniture worth $4,000 and a vehicle worth about $6,000. Her husband has savings left over from his redundancy and worker's compensation claim of about $12,500. Because both are on pensions their combined income is about $360 per week and their expenses are in the order of $506 per week. This leaves a shortfall of $146 per week. 29 The plaintiff's medical situation is something to which I have earlier referred. She has had breast cancer which in 1996 went into remission. In her report of the 13 October 1999 Dr Ahern refers to the treatment of the plaintiff. She refers to the further occurrence of cancer in the right breast in August of 1997. This apparently had spread to the lung and the development of lung cancer apparently made the cancer incurable. She is on a number of treatments which stabilise her condition, and these treatments change from time to time. She recently had in April this year some further radiotherapy.

30 Dr Ahern comments that Mrs Morgan has remained without further progression of her breast cancer, and her disease is quite stable, however will never rid Mrs Morgan of breast cancer. Dr Ahern went on to say in the report, Exhibit "B":- "Mrs Morgan has specifically requested on more than one occasion that life expectancy not be discussed with her. I can simply reiterate that at present Mrs Morgan's disease is quite stable. Mrs Morgan is taking a variety of alternative medicines. These are not medications that I have prescribed; Mrs Morgan knows that I do not believe that there is any specific evidence that these medications will be helpful to her condition. However there is no evidence that they are harming her. I am unable to provide an estimate as to the cost of these medications.". 31 Mrs Morgan's husband also has medical problems. These resulted from accidents he has had at work, and presently he is unfit for work which involves any lifting or frequent bending. Accordingly he is on a disability pension. 32 It is necessary for the Court if it is to make an order to see how the plaintiff has been left without proper and adequate provision for her maintenance, education and advancement in life. In the present case the plaintiff advances both her lack of funds for her maintenance and also matters affecting her advancement in life. 33 So far as maintenance is concerned she has a shortfall in income of $146 per week. However, it is very hard for the Court to quantify the sum which would be sufficient for her to make up this short fall. This is because there is simply no evidence, because the plaintiff does not wish to know of the matter, to determine her life expectancy. 34 The Court cannot speculate, but clearly though the lady has cancer which is now said to be incurable and her life expectancy would not be that of an ordinary member of the public in good health. 35 Accordingly, the Court has to provide something which will assist for some period in this regard. However, it cannot do it on any accurate basis. 36 The second area which concerns the advancement in life of the plaintiff involved a number of different areas. There were firstly repairs to the house which the plaintiff and her husband would like to undertake. Repairs to a kitchen to replace it with a new one, costing some 15 to $20,000, painting internally of $4,000, and the cost of renovating a bathroom. This latter item is something obviously less than the $15,000 advanced in evidence which was conceded to be far too generous. Perhaps something in the order of $5,000 might be more appropriate.

37 These matters I think are appropriate ones which can be considered by the Court. There is also the problem they have with the garden. It needs some landscaping, an amount of some $5,000, but whether that is necessary it is difficult to determine.

38 The plaintiff's husband has difficulty doing the gardening work and obviously the plaintiff herself has the same problem. Things such as putting out washing caused her to injure herself because of her condition. An amount of $100 per fortnight would allow someone to do the gardening and mow lawns. 39 Another area which has been advanced is the question of replacement of furniture and white goods in the house. The lounge needs replacing at some $2,000 to $3,000. It is suggested $5,000 is needed for kitchen equipment and that the carpets and blinds might need replacing at $15,000.

40 Another area put forward is the additional treatment which is necessary for the plaintiff's medical condition. Acupuncture at $150 to $200 a week apparently would assist and has been of assistance in the past. There are also herbal medications which the plaintiff wishes to take, which she should not be precluded from taking, at a cost of some $75 per week.

41 The final area advanced was the need to replace the car. It is in fact the plaintiff's husband's car. In one sense therefore it is not appropriate, but no doubt it is used to take the plaintiff to appointments and thus may be an appropriate matter to consider. They wish to purchase a car for about $30,000, and they will trade in their present car for about $6,000. If one looks at all these items, there is an element of giving evidence of every conceivable matter which the plaintiff and her husband would like to do to the house. Some of them may not really be necessary. There are figures in the order of $8,000 or $9,000 per annum for the medication, health matters, and gardening.

42 It is also, of course, important in these matters to have regard to the position of any other person who has a claim on the bounty of the deceased. In this case there is none as the estate will pass to the Crown.

43 The question of what is an appropriate provision in respect of a large estate was dealt with by Young J in Anasson v Phillips, 4 March 1988, where he said the following: "With a very large estate... there is a great temptation on a court to be over-generous with other people's money. This is especially so when the court can see that plaintiffs have been very hardly done by at the hands of a domineering testatrix. However, the case should not be approached in this way as the application has to be determined in accordance with the legal principles. These principles include the fact that in Australia there is freedom of a person to leave her property in whatever way she wishes, to love whom she wishes, to hate whom she wishes and there is only when there has been a failure to comply with a moral duty to those who in the community's eyes she should have made proper provision for, that anyone can legally complain about another person's will. Even then, the court has no power to re-write the will, but can only adjust things, in substitution for the testatrix, in such a way as to fulfil her moral duty.

If the estate is a large one, the court has a slightly different approach. The basic principles are the same, that is, the will can only be affected to the extent that it is necessary to discharge the moral duty by making adequate provision for the plaintiffs, but where there is a large estate, competition between claimant and claimant, and claimant and beneficiary under the will is much reduced or eliminated. Further, there may be a more liberal assessment of the moral duty owed, to be reflected in what is proper provision for the plaintiffs. In particular, the lifestyle that has been enjoyed by the plaintiffs, because they have been associated with a wealthy testatrix is a relevant factor. These principles all, I think, flow from cases such as Re Buckland (1996) VR 404, especially at page 412." 44 Although I would not describe this as a large estate it is an estate where there are no competing claims, and accordingly perhaps one can be a little more generous.

45 The plaintiff is in a delicate state with her health. To not have to worry about spending on her health, and to have appropriate surroundings is quite a reasonable request on the plaintiff's behalf, and accordingly there should be some reasonably generous provision in favour of the plaintiff.

46 However the difficulty the court has is that the court cannot, because of the lack of evidence, speculate about matters and can only provide what is appropriate given the evidence. Doing the best I can and noting the lack of evidence on the major matter to do with the life expectancy of the plaintiff, I think it is appropriate there be a legacy for the plaintiff of $185,000, and I so order.

47 I order that the plaintiff's costs on a party and party basis, and the defendant's on an indemnity basis be retained or paid out of the estate of the deceased. I order that the exhibits be returned. 1

Last Modified: 11/17/1999 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.