Sanders v Valtas

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

002227/99 - MARJORIE JEAN SANDERS & ORS v STEVEN VALTAS - ESTATE OF SHIRLEY DELEPHINE McKENZIE

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Shirley Delephine McKenzie who died on 25 December 1998. 2 The deceased was survived by her three children, Marjorie Jean Saunders, Debra Kay Jones and Russell Phillip McKenzie. 3 The deceased made her last Will and testament on 8 April 1997. She appointed the defendant her executor. She left her estate to the First Church of Christ Scientists, 175 Huntington Avenue, Boston, USA. 4 At the same time the deceased executed a statutory declaration in which she indicated her reasons for not leaving the estate to her children. In respect of her son Russell and her daughter Marjorie she said that she did not want to give them her estate because they had drifted away from her for many years and no longer treated her as a mother. In respect of her daughter Debra she referred to a letter of 12 December 1996 that Debra had written to her and her own reply and indicated that given the matters in her reply in that letter she had deliberately left Debra out of the Will. 5 The deceased left a house property at 123 Carpenter Street, St Marys. This property was sold for $123,000. There was a Commonwealth bank account with a credit of $7,708. The account was accessed by the plaintiff Debra who had her mother's power of attorney. Those funds were to treat debts and funeral expenses and has been accounted for except for some $350 odd. 6 The distributable estate now totals $112,962. From this there will be costs to be deducted. The defendant's costs amount to $10,110 and on the estimate provided by the defendant's solicitor by affidavit it is a proper amount for a small estate. The plaintiff's costs are estimated at some $25,000 and this estimate is simply nothing more than that. It would be surprising, given the shortness of the affidavit, that they might amount to that. In any event, there will be some costs if an order is made in favour of the plaintiffs. That will be dealt with in the assessment in due course. 7 I will give some short details of the chronology of the matter. 8 The son Russell was born on 14 April 1948. Marjorie was born on 8 March 1950. Debra was born on 3 April 1958. Their father, Phillip Leslie McKenzie, died in 1960. Prior to that he had been in the Australian Army and had been posted to many stations in Australia to which the family travelled. 9 In 1963 Russell left school and obtained an apprenticeship at Garden Island. 10 In 1965 Marjorie left home at the age of 15 years. She at that stage had a disagreement with her mother. Russell joined the Air Force and served in the Air Force for many years, including Vietnam. 11 In 1971 he was discharged and commenced to live with the deceased again. He remained there for some two or three years. He then moved into rented accommodation. 12 In 1976 Debra moved away from home. Thereafter the children lived their lives, the detail of which is not critical to the present matter. 13 Russell last seems to have worked in 1989 and moved to Ballina and married in 1990. In April 1991 he received the TPI pension. 14 Debra married her present husband in 1992 and Marjorie married her present husband in 1994. 15 It was in 1994 that Debra and Andrew moved to Leichhardt and subsequently they went to Earlwood. They were not too far from the deceased. 16 The deceased's last Will was made on 8 April 1997, as I have said. Towards the end of 1998 her health declined and was in Mount Druitt Hospital in October and thereafter transferred to various nursing homes before she died on 25 December 1998. 17 In applications under the Family Provision Act the High Court 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."

18 As indicated by the High Court it is necessary to consider the situation of the individual plaintiffs.

19 The plaintiff, Marjorie Sanders, is aged 49 years and married with three adult children. Her husband is 54 years of age and in work earning some modest wage. Their assets are not substantial. They have a small amount in a bank account, a 1983 Corona sedan worth $2,500, household furniture and effects and interest in superannuation funds totalling $19,000 which cannot be accessed while working. They owe their daughter $1,500. 20 It is necessary to consider their relationship with their mother. One of the matters that has intruded into the relationship is the fact that the deceased was a Christian Scientist and adhered to that religion. Her children did not and this obviously produced difficulties in the relationship between the deceased and the various plaintiffs. Notwithstanding this there was contact between Marjorie and the deceased until shortly prior to mid 1998. At that stage the deceased had become somewhat ill and it was necessary for her to be looked after. Clearly that was something which she did not appreciate but, in any event, I am satisfied that following discussion with both Marjorie and Debra there was an arrangement for Marjorie and her husband to give up their accommodation and to move in and live there with the mother. After being there for about two weeks the deceased accused Marjorie's husband of telling lies about Marjorie and it transpired that in fact the deceased thought that the house was being taken over by Marjorie. Marjorie and her husband's furniture and effects were in the deceased's house because they had moved. The conversation progressed and, according to Marjorie, the deceased then decided she did not want her daughter there and she should move out. So after this effort on their part to come, live and thus look after her mother they were told to go and they did so. What Marjorie did was to keep in touch through her sister Debra. 21 I turn to the situation of Debra. She is 41 and married. She works as an Office Administrator earning $35,000 per annum. Her husband Andrew works as a printer and they live in rented accommodation. Their assets are also fairly minimal on current standards. They have household contents of $25,000, two cars worth $12,000 in all, a motor cycle worth $2,000 and a very small amount in the bank. They also have liabilities of $20,100. 22 The contact that Debra had with her mother continued throughout their lives. This is evidenced because in both 1994 and 1996 the deceased left Wills in which Debra was her only beneficiary. That led to estrangement between Debra and her mother. This event occurred latter on in 1996. 23 In the August the deceased had an operation for removal of some cancerous growth and Debra made an offer for her and Andrew to move in with her. There was discussion of an extension to the home and both Debra and her husband made extensive enquiries about the costs of such an exercise including the obtaining of quotes. After all this effort had been put into that exercise and also the time that Debra had spent in looking after her mother and taking her for doctors appointments, the change of heart that then emerged caused a rupture. In effect the deceased changed her mind and told her daughter she did not want Debra to move in and said God would provide for her. 24 This seemed to indicate to the plaintiff that once she was well again she was quite happy to go her own way and caring little about the efforts her daughter and son-in-law had spent in trying to help her. 25 This resulted in the letter in which the plaintiff, Debra, was critical of her mother and her approach to life in general. She indicated she did not want to have anything more to do with her mother and did not want any of her money. The interesting thing that this illustrates is the problem that older people have when they need assistance. They do not necessarily want to accept that assistance. 26 After Marjorie moved out from home it was to Debra to whom the deceased turned once her health failed again. Notwithstanding the break that had occurred Debra continued to assist her mother in the period up until her mother's death. 27 I turn now to the situation of Phillip. He is, as I have indicated, 51 years of age, married without dependants. 28 They have a car worth $6,500, minimal savings, a liability of $9,700 and he receives a TPI pension. His wife receives a service pension, which pension totals $1,240 per fortnight. They live in rented accommodation and both of them have some difficulty with their medical condition. 29 It seems there was a relationship between the plaintiff Phillip and his mother. Towards the end of his mother's life he seems to have lost touch with her, last having seen her in 1997. He said he had no knowledge of the illness of the deceased or in fact her death, only being informed a few weeks after the death. In the last few years he has been in ill health and has been in hospital on numerous occasions. 30 It is apparent from all of this that one of the points of difficulty between the deceased and her children is the difference that they have over her religious beliefs. It is clear from the evidence, which the children gave frankly, that they accept that their mother was sincere in that faith. 31 The difficulty is, of course, the way the deceased reacted to her children in not following the faith that she had adopted. Clearly the children raised with the deceased or the deceased raised with them this difference in their approach. Although this matter is slightly different the following comments of Holland J in Kleinig v Neal (1981) 2 NSWLR 532 at 540 are apposite: "If it is a case of parent and child, another circumstance is that the parent was responsible for bringing the child into the world and having done so assumed a duty to be concerned with the child's welfare. A wise parent will recognise that perfect harmony between parent and child is in the nature of things not to be looked for and that, coming to adulthood, a child will want to make his own life just as the parent had done before him. Differences of outlook between different generations is not exceptional, it is the general rule, so some friction between parent and child or disappointment in a parent's hopes and expectations concerning his child will be accepted by the wise parent as almost inevitable. If it occurs, the parent who is just as well as wise will not allow such disharmony or disappointment to blind him to the needs of his child for maintenance, education or advancement in life. The duty of a parent towards his child to provide for those needs on his death, if he can, continues in spite of such disharmony or disappointment and the statute obliges the court to consider whether it has been performed. The court must take in the whole scene and make the judgment that it considers that a wise and just parent would have made in the circumstances. Of course, as the statute provides, if the court considers that the character or conduct of the child has been such as to disentitle the child to any or any further benefit from the parent, it may refuse the child's claim." 32 In this case although there were the disagreements in my view the conduct of the children is not disentitling conduct and not such, in my view, as should reduce the claim which they have on the bounty of the testator. In one case, and I think it was with Russell, he conceded there was some drifting apart and that may be so. However, in the end I am not critical of lack of contact during the period. 33 All of the children have some debts, some more than others. None of them is in a strong asset position and they exist on their wages which they earn. It is probably not possible for them to aspire to obtaining a house. 34 Accordingly, the basis on which they have been left without proper and adequate provision for maintenance and education in life is put forward on the need for some sum to provide them with a start and something to pay their debts and give them provision for their assistance. 35 The deceased, as I have said, was committed to her religion. There no evidence of contact with a particular church nor evidence led by the defendant of the deceased's association or importantly assistance from the church during her lifetime. She had the benefit of her faith but there does not seem to be any particular thing, apart from this, which the church as provided to her. By this I mean in terms of material support and assistance. No doubt her faith was important to the deceased during her lifetime. 36 Given the smallness of the estate after costs no basis would be served by differentiating between the plaintiffs. It seems to me that in a small estate it is appropriate for it to be shared between the three plaintiffs equally. 37 Accordingly, I order:

1. That the whole of the estate of deceased to be divided between the three plaintiffs equally.

2. The defendant's costs on the indemnity basis and the plaintiff's on a party and party basis to be paid or retained out of the estate of the deceased.

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