Presland v Carroll

CASES CITED : Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 19

Arthur George Presland (Plaintiff) PARTIES : Craig Carroll (First Defendant) Justin Robert Carroll (Second Defendant) Ashley Maree Carroll (Third Defendant)

COUNSEL : Mr P. Jeffriess (Plaintiff) Mr D. MacLean (solicitor) (Defendants)

SOLICITORS : Everingham Solomons (Plaintiff) MacLean & Curtis (Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5699 of 2008 ARTHUR GEORGE PRESLAND BY HIS TUTOR LYNNE LEONIE MOORE -v- CRAIG CARROLL JUDGMENT 1 HIS HONOUR: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 18 November 2008 Arthur George Presland claims an order for provision for his maintenance out of the estate of his late wife Eunice Irene Presland (to whom I shall refer as "the Deceased"). The Plaintiff, who is a disable person, instituted the proceedings by his tutor, Lynne Leonie Moore, who is his daughter. 3 The Deceased died on 17 May 2007, aged almost 88 years. She left a will dated 21 December 2006, probate whereof was on 2 November 2007 granted to Craig Carroll, the executor named in such will (who was the only Defendant named in the summons). The inventory of property discloses the following assets, together with the estimated respective values thereof: House property situate at and known as 55 Wellington Street, Moombi $190,000 Moneys in bank account $7,632 Chattels $4,300 Household and personal effects $10,000 4 By her will the Deceased gave a life estate in the house property to the Plaintiff (subject to conditions regarding maintenance, outgoings and insurance), with remainder to her grandchildren, Justin Robert Carroll and Ashley Maree Carroll; specific chattels to her daughter, Anne-Maree Carroll; and the residue of her estate to Justin Robert Carroll and Ashley Maree Carroll. 5 The Deceased had been married twice. The Plaintiff (who was born in 1927 and is presently aged 83) had also been married twice. The Plaintiff and the Deceased lived in a de facto relationship from 1976. They married in 1992, and remained married until the death of the Deceased. Throughout the 31 years they were together they lived in the Wellington Street residence, which belonged to the Deceased. 6 The Deceased suffered a cerebral haemorrhage a year or so before her death. From that time the Plaintiff was her full-time carer, and received a carer's pension. Throughout the period of their relationship (both their de facto relationship and their marriage) the Plaintiff and the Deceased resided in the house property at Wellington Street, Moombi, of which the Deceased was the owner. The Plaintiff, who at various times worked as a labourer in sawmills, as a truck driver, as a mechanic and as a dozer driver, retired from employment at the age of 70. I gather that until then the Plaintiff was the primary breadwinner for the household. Since then he has been in receipt of an aged pension. 7 It would appear that in the early 1980s the Deceased received compensation in relation to a motor accident (said to have been in an amount of about $50,000), which she used to recarpet the house and to meet living expenses. In 1985 the Plaintiff inherited about $11,000 from his father's estate, which was used to meet living and personal expenses of both himself and the Deceased. 8 After the Deceaseds death in 2007 the Plaintiff married his present wife, Glenda Daisy Ferguson, on 2 August 2008. Before that marriage the Plaintiff and the current Mrs Presland on 31 July 2008 entered into a financial agreement under section 90B of the Family Law Act 1975. In consequence, neither the Plaintiff nor Mrs Glenda Presland, upon the death of the other, has any claim upon the estate of the deceased spouse. The Plaintiff and Mrs Glenda Presland reside in a house property owned by her at 32 Denman Avenue, Kootingal, which at the date of the foregoing financial agreement had an estimated value of $270,000. That property is subject to a mortgage, in a present amount of almost $39,000. 9 Medical evidence (from Dr V G Armanno, the Plaintiff's general medical practitioner, and from Dr James Hughes, Consultant Neurologist) discloses that since early 2006 there has been "a significant cognitive decline" in the Plaintiff's mental state and that a diagnosis of "senile dementia of Alzheimer's type" has been made. Dr Hughes considered that that condition was, in June 2009, "in the moderate to severe" range. He considered that there was no treatment which would effect any improvement, and that the Plaintiff's condition "will continue to deteriorate". Because of his mental condition the Plaintiff himself did not give evidence in the present proceedings. 10 The Plaintiff's present wife is his full-time carer, and in that capacity receives a carer's pension. The Wellington Street residence (a fibro structure, with a corrugated iron roof) is presently in a state of disrepair - almost of dereliction ¯ and is virtually uninhabitable. It requires a significant expenditure of money to bring it up to a condition appropriate for a dwelling house. According to the valuation report of Sharrock Enterprises Pty Limited on behalf of the Plaintiff (Exhibit A), its present value is $155,000, whilst B J Cole & Co, on behalf of the Defendant, gave its market value at 31 March 2009 as being $70,000 (Exhibit 2), but at 21 October 2009 (immediately before the hearing) considered a current market value of $110,000 to be appropriate (Exhibit 1). 11 Since the death of the Deceased the estate has been fully administered (the Wellington Street property having been transferred into the name of the Plaintiff for a life estate and the names of Justin Robert Carroll and Ashley Maree Carroll as tenants in common in equal shares for an estate in remainder), and the other assets having been distributed to the named beneficiaries. 12 There was an insufficiency of readily available assets of the estate to satisfy all of the estate liabilities. The executor and his wife (the daughter of the Deceased) personally met the shortfall of a little over $6000. 13 In consequence of the foregoing distribution (especially of the Wellington Street property), a further amended summons was filed on 22 October 2009, seeking the joinder of Justin Robert Carroll and Ashley Maree Carroll as defendants, and seeking an order that provision be made for the Plaintiff's maintenance out of "the estate or notional estate" of the Deceased. That further amended summons also sought (as did an amended summons filed on 24 March 2009) an order that the time for the making of the application be extended up to and including the date of the filing of the summons. 14 At the present time the Plaintiff's assets consist of the following: Moneys in bank accounts $1,000 Furniture and personal effects $1,000 Utility motor vehicle $2,500 Tools $200

(The utility motor vehicle had been a gift to the Plaintiff from the Deceased in about 1985.) 15 The Plaintiff's only income is the aged pension, which is presently in an amount of $506.50 a fortnight. 16 The Plaintiff's wife, Mrs Glenda Presland, owns the following assets: House property 32 Denman Avenue, Koottingal, $200,000 -$210,000 Motorcar $1,500 Furniture and furnishings $3,000 - $5,000 17 Mrs Glenda Presland receives an aged pension and a carer's pension, in amounts totalling about $610 a fortnight. 18 Evidence was given concerning the weekly outgoings of the Plaintiff (totalling almost $207) and of Mrs Glenda Presland (totalling almost $214), who share their living and personal expenses. 19 Although the Plaintiff, on account of his deteriorating mental condition, is no longer able to drive, his motor vehicle is still registered. 20 At the present time Mrs Glenda Presland is able to look after the Plaintiff. However, his deteriorating mental condition makes it almost inevitable that at some stage he will need to enter a care facility. Evidence was placed before the Court concerning the costs of such facilities. 21 The legal representatives of the parties agreed (in Exhibit D) upon certain factual matters referred to in the affidavit of Justin Robert Carroll, sworn 21 September 2009, those matters being: 1. Paragraph 17: The Deceased's health deteriorated following her stroke and for the last year of her life the Plaintiff was the Deceased's carer. 2. Paragraph 19: The money used to pay the accounts referred to was the Plaintiff's own. 3. Paragraph 20: The Plaintiff has or will pay all rates for the property in the 2009 year. 22 Evidence was placed before the Court concerning the financial and material circumstances of each of the two remaindermen, who are the grandson and granddaughter of the Deceased (being the children of the Deceased's daughter Anne-Maree Carroll). 23 Justin Robert Carroll, who was born in 1981, is 28 years of age. He is a welder by occupation. He is married and he and his wife have two young children (aged two and almost one). His wife is qualified as a hairdresser, but since the birth of their elder child, she has not been in employment. Mr Carroll, from his employment as a welder and from a part-time second job, receives total net earnings of $1145 a week. The family expenses are approximately equal to that income. Mr Carroll and his wife own their residence at Tamworth, which they purchased in 2003 and which is now worth about $270,000. That residence is subject to a mortgage, presently in an amount of about $180,000, which is being repaid at the rate of $300 a week. 24 Ashley Maree Carroll, who was born in 1986, is presently 23 years of age. She is qualified as a hairdresser, and is employed as such, receiving $580 net a week. She resides at home with her parents, to whom she pays $100 a week by way of board, although she is proposing shortly to share rented accommodation with a friend. Her share of the rent will then be $160 a week. Her other outgoings total $289 a week. Apart from her interest in remainder in the Wellington Street property, Ms Carroll's only assets is are a Toyota Corolla motor vehicle (worth about $19,000) and household furniture (worth about $3,000). 25 In calculating the value of the estate available for distribution, the costs of the present proceedings must be taken into consideration, since the Plaintiff, if successful, will normally be entitled to an order that his costs be paid out of the estate of the Deceased, whilst the First Defendant, the executor, irrespective of the outcome of the proceedings, will normally be entitled to an order that his costs be paid out of the estate. 26 It was estimated on behalf of the Plaintiff that his costs will total about $22,150, whilst it was estimated on behalf of the Defendants (who were represented by the same solicitor) that their costs will total a little under $14,000. 27 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. I have had the benefit of receiving a written outline of submissions from the legal representatives of the respective parties, together with a jointly prepared chronology. Those documents will be retained in the Court file. 28 The Plaintiff, as the widower of the Deceased, is an eligible person within paragraph (a) 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 eligible persons in relation to the Deceased are her two daughters, being Anne-Maree Carroll (the wife of the First Defendant and the mother of the remaindermen) and Narelle Murphy. Each of those ladies has been served with a notice of claim, and neither has made any claim for an order for provision in respect to the estate of the Deceased. 29 I have already referred to the fact that the proceedings were instituted by summons filed on 18 November 2008. That was one day after the expiry of the eighteen month period prescribed by section 16 (1) of the Family Provision Act. The summons had been sent to the Registry by way of the Document Exchange, under cover of a letter dated 12 November 2008. It would be expected that, in the normal course, the Registry would have received the summons well before the expiry of the prescribed period on 17 November 2008. The Defendant consented to the extension time sought by the Plaintiff in the amended summons and in the further amended summons. 30 In carrying out the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208 - 210 (the correctness of which test was affirmed by the High Court in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191) the Court must determine whether in consequence of the provisions of the will of a testator the applicant has been left without adequate provision for his or her proper maintenance. 31 The Moombi residence in which the Plaintiff has been left a life estate is in a condition of such dereliction that it is not presently habitable, without the expenditure of a considerable amount of money. In any event, the present mental and degenerative condition of the Plaintiff makes it more suitable that he should continue to reside with Mrs Glenda Presland and be looked after by her in her own residence at Kootingal, rather than for him and Mrs Glenda Presland to attempt to remove to the property in which the Plaintiff has a life interest. The physical condition of the Moombi property is such that it cannot be rented out (with a view to providing an income for the Plaintiff) without the expenditure of money which he does not have. 32 Apart from his life interest in the Moombi property, the Plaintiff has no significant assets. His weekly expenses exceed his weekly income. 33 The Plaintiff's mental condition is such that he cannot live alone, and he is dependent upon his wife as his carer. It is inevitable that, in due course, the Plaintiff's condition will require him to move into some form of hostel or nursing home accommodation, although his wife and his daughter hope that he will be able to remain living with his wife for as long as possible. Mrs Glenda Presland is currently able to care for him, with assistance from his daughter. As well as his deteriorating mental condition, the Plaintiff suffers from osteoarthritis in his knees, which affects his mobility. 34 It is quite apparent that the Plaintiff has been left without adequate provision for his proper maintenance. The estate is a small one. It has been submitted on behalf of the Plaintiff that he should received the entirety of the estate absolutely. 35 I am satisfied that the Plaintiff has need for the following: a mobility scooter for use within the house ($3,800); a new motor vehicle ($15,000), which, although to be registered in the name of the Plaintiff, will be driven by his wife; and a fund to provide for Meals on Wheels, Home Care Services NSW, modification to Mrs Presland's residence by way of an access ramp and handrails in toilet, shower recess and bathroom ($6,820); possible knee reconstructive surgery, the medical expenses associated therewith will not be fully covered by Medicare; an amount to cover the Plaintiff's funeral ($6,582); and a fund to assist in his accommodation when it is necessary for him to enter hostel and nursing home accommodation. 36 It will be appreciated that the legal life tenancy of the Plaintiff has a monetary value quite distinct from the right which the Plaintiff has to reside therein. As the legal life tenant, the Plaintiff is entitled to any income produced by the property during his lifetime (from, for example, the rental of the property). No evidence has been placed before the Court by either party as to the value of the Plaintiff's life tenancy in the property, as distinct from the valuations of the totality of the property itself. Counsel for the Defendant said that such evidence was the responsibility of the Plaintiff. However, Counsel for the Defendant in his written outline of submissions referred to the apportionment tables adopted by the Office of State Revenue for the valuation of a life tenancy interest in a house worth $70,000, being in the order of $23,000. I have already observed that the value of the Moombi property is considerably greater than $70,000. Indeed, the valuer who originally provided that valuation, ultimately provided a revised valuation of $110,000. 37 Upon the foregoing basis the legal life tenancy of the Plaintiff might have a value in the order of about $40,000 (although I query whether, in the absence of the foregoing apportionment tables being in evidence, it is appropriate merely to double the valuation of $23,000, if a valuation of the entire property be increased from $70,000 to about $140,000). 38 It will be appreciated that, the estate having been fully distributed, the Plaintiff as a co-owner is entitled to seek the sale of the Moombi property, and if there be refusal on the part of the other co-owners (the remaindermen), the Plaintiff can seek an order for the appointment of statutory trustees for sale pursuant to section 66G of the Conveyancing Act 1919. That latter course would inevitably result in additional cost, which for an estate of so small a value as the present estate would be quite undesirable. 39 In any event, the cost of the additional needs of the Plaintiff to which I have already referred, could not be met out of the entitlement of the Plaintiff's share of the proceeds of sale of the Moombi property to which his life interest would entitle him. 40 It seems to me that that the appropriate course is for the Plaintiff to receive a legacy in lieu of the life interest given to him by of the will of the Deceased. I consider that such a monetary legacy should be in an amount of $60,000. A legacy in such an amount will preserve (albeit, probably only to a small extent) a benefit to each of Justin and to Ashley (who, it will be appreciated, are not only the remaindermen in the Moombi property, but also are entitled to the residue of the estate). 41 Since the estate been entirely distributed, and since the only source of the legacy which I propose the Plaintiff should receive is from the Moombi property (which must inevitably be sold), which has now been registered in the names of the Plaintiff, for life, and Justin and Ashley in remainder, that property should be designated notional estate of the Deceased. In this regard, however, section 28(5) has operation. 42 That subsection provides:

On an application in relation to a deceased person, being an application - (a) made pursuant to an order under section 16 allowing the application to be made; or

(b) for an order under section 8 for additional provision, the Court shall not make an order designating property as notional estate of the deceased person by reason of a prescribed transaction or a distribution unless it is satisfied-

(c) that- (i) the property was the subject of the prescribed transaction or distribution; (ii) the person by whom it is held holds the property as a result of the prescribed transaction or distribution as trustee only; and (iii) the property is not vested in interest in any beneficiary under the trust; or

(d) that there are other special circumstances (including, in the case of an application made as referred to in paragraph (a), the incapacity, during any relevant period, of the person by or on whose behalf the application is made) which justify the making of an order so designating the property.

43 I have already recorded that the Defendants consent to an order that the time for the making of an application be extended up to and including the date of the filing of the summons. It is my understanding that the Defendants, in the event that the Court is disposed to make an order for provision in favour of the Plaintiff, consent to (or at least do not oppose) an order designating the Moombi property as notional estate of the Deceased, and a further order that any such provision be made out of that notional estate. However, section 28(5) or the Family Provision Act is in mandatory terms ("… the Court shall not make an order designating property as notional estate … unless it is satisfied …"). 44 Thus, even if I am correct in my understanding of the attitude of the Defendants in this regard, the Court must still be satisfied of the matters set forth in either paragraph (c) or paragraph (d) of the foregoing subsection. 45 Paragraph (c) does not have application to the circumstances of the instant case. Accordingly, the Court must be satisfied that there are "other special circumstances" which justify the making of the order. 46 It has been submitted on behalf of the Plaintiff that the following matters constitute such "other special circumstances", which justify the making of an order so designating the Wellington Street property as notional estate of the Deceased. The claim was lodged one day out of time. The late lodgement was not the fault of the Plaintiff, or of his tutor, or of his solicitor. The Plaintiff's solicitor sent the summons to the Registry by way of the Document Exchange some five days before the expiration of the prescribed period, and in the normal course it would be expected that the summons would have been filed well before the date of that expiration. The distribution of the estate was made in December 2007, only seven months after the death of the Deceased. The executor chose to distribute the estate well within the prescribed period, in the knowledge that the Plaintiff, the widower of the Deceased, had been left only a life interest in the matrimonial home. The Plaintiff's claim is very strong. There is no evidence that the Second or Third Defendants have "ordered their affairs on the basis that time has expired". 47 I am in agreement with the submission on behalf of the Plaintiff that the foregoing matters constitute, "other special circumstances" of the nature referred to in paragraph (d) of section 28(5) of the Act. In the event that I have correctly understood the attitude of the Defendants regarding the designation of the Moombi property as notional estate of the Deceased, there is the further special circumstance, that the Defendants consent to (or at least do not oppose) an order designating that property as notional estate of the Deceased. 48 Since it will be necessary for the Moombi property to be sold (and probably for certain repairs to be effected to that property before sale) in order to meet the order for provision in favour of the Plaintiff, I am in agreement with the submission on behalf of the Defendants that the proposed legacy in favour of the Plaintiff should not bear interest until six months from the date hereof. 49 Counsel for the Defendants has annexed to his written outline of submissions a form of orders which he proposes should be made. 50 I am in agreement with the form of those orders, apart from the amount referred to in order 8 thereof. The amount of the legacy will be $60,000. 51 The Plaintiff being successful in his claim, there should also be an order that the costs of the Plaintiff on the party and party basis be paid out of the notional estate of the Deceased. 52 It is undesirable that this small estate should be further depleted by the costs of any additional Court appearance associated with the making of orders herein. I direct that on or before 15 February 2010 the Plaintiff lodge with my Associate (with a view to orders being made by me in Chambers) short minutes of order in the terms of the draft Orders annexed to the Short Outline of Submissions on behalf of the Defendant dated 1 October 2009, substituting in order 8 "a legacy of $60,000" for "a legacy of $23,000'", and providing for the costs of the Plaintiff on the party and party basis to be paid out of the notional estate of the Deceased, and providing for the exhibits to be returned.

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