Seitz v Morgans & anor

Supreme Court of NSW|2001-11-27

CITATION : Seitz v Morgans & anor [2001] NSWSC 1188 FILE NUMBER(S) : SC 3444/01 HEARING DATE(S) : 26, 27 November 2001 JUDGMENT DATE : 20 December 2001

Phillip Seitz (Plaintiff) PARTIES : John David Morgans (First Defendant) Sylvia Elsie Drake (Second Defendant) JUDGMENT OF : Master McLaughlin

COUNSEL : J. Needham (Plaintiff) M.S. Willmott (Defendants) SOLICITORS : Pauline Betts, Solicitor (Plaintiff) Northern Beaches Legal Service, Solicitors (Defendants) CATCHWORDS : Family provision - Claim by adult grandson - Whether an eligible person - Whether partly dependent upon testator - Factors which warrant the making of the application - Proceedings out of time - Whether Plaintiff was served with a notice of claim in earlier proceedings against the same estate - Fact that he was not served is not determinative of whether an extension of time should be allowed - Financial and material circumstances of Plaintiff - Whether Plaintiff has been left without adequate provision for his maintenance - Notional estate - After expiry of the prescribed period the only significant asset was transferred to the beneficiary entitled thereto - Whether an order should be made designating that property notional estate - Importance of not interfering with reasonable expectations in relation to property LEGISLATION CITED : Family Provision Act 1982 Fulop v Public Trustee (1987) 8 NSWLR 679 CASES CITED : Goodman v Windeyer (1980) 144 CLR 490 Hunter v Hunter (1987) 8 NSWLR 573 Singer v Berghouse (1994) 181 CLR 201 DECISION : See paragraph 88.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Master McLaughlin Thursday, 20 December 2001 3444/00 PHILLIP SEITZ -V- JOHN DAVID MORGANS & ANOR JUDGMENT 1 MASTER: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 3 August 2000 the Plaintiff Phillip Seitz claims an order for provision for his maintenance, education and advancement in life out of the estate of his late grandmother Lindsay Ethel Prior Morgans (to whom I shall refer as "the Deceased"). Subsequently there was filed at the commencement of the hearing on 26 November 2001 an amended summons, by which the Plaintiff sought that that order for provision be made "out of the estate or notional estate" of the Deceased. 3 The Deceased died on 2 January 1997, aged 83. She left a will dated 14 December 1994, probate whereof was on 12 June 1997 granted to John David Morgans and Sylvia Elsie Drake, the executors named in such will (who are the Defendants to the present proceedings). 4 The Deceased, who was a widow at the time of her death, was survived by two children, being a son, John David Morgans (who is the First Defendant to the present proceedings) and a daughter Jill Seitz (who is the mother of the present Plaintiff). 5 By her will the Deceased gave to her daughter Jill Seitz a legacy in the sum of $40,000. She gave gifts of three specific chattels, gave the balance of the contents of her home to be divided equally among her grandchildren living at the date of her death, and gave to her son John David Morgans a house property situate at and known as 10 Brown Street, Forestville, together with the balance of her estate. 6 The only significant asset in the estate of the Deceased was the house property at Forestville, which had been the residence of the Deceased at the time of and for many years preceding her death. 7 Subsequently, the Plaintiff's daughter Jill Seitz by summons filed on 4 November 1997 commenced proceedings 4947 of 1997, by which she claimed an order for provision out of the estate and/or the notional estate of the Deceased pursuant to the Family Provision Act. Those proceedings were resolved by consent orders made on 28 March 1999, by which Jill Seitz, in lieu of the legacy of $40,000 given to her by the will of the Deceased, received a legacy in the sum of $110,000. 8 Since at that time there were no liquid assets in the estate available to meet that legacy (or, indeed, to meet the legal costs of the Defendants associated with those proceedings) the First Defendant borrowed the necessary moneys from the ANZ Bank. That loan was for a term of ten years, and the First Defendant and his wife provided their residence at 8 Pantanga Road, Frenchs Forest, as security for that loan. Subsequently the house property at Forestville was transferred into the name of the First Defendant on 31 July 2000. The First Defendant then raised a mortgage over the Forestville property. The combined value of the two properties owned by the First Defendant and his wife (the Frenchs Forest residence) and by the First Defendant alone (the Forestville property) is, according to the First Defendant, just under $1 million, and the total of the amounts of the mortgages outstanding on the two properties is $194,000. 9 The most recent estimation of the value of the Forestville property, which was made on 13 November 2001, is $430,000. However, as has already been observed, that property is subject to a mortgage. As I understand the evidence, an amount of $94,000 is outstanding in respect to the Forestville property. That property is the only significant asset in either the estate or the notional estate of the Deceased which would be available to meet any order for provision which might ultimately be made in favour of the Plaintiff. It will be appreciated, further, that that asset must also meet the costs of the Defendants of the present proceedings (which are estimated to total $19,000), and also, in the event that he ultimately be successful in his claim, the costs of the Plaintiff (which are estimated to total $32,000). 10 The Plaintiff asserts that he is an eligible person in relation to the Deceased, being such within paragraph (d) of the definition of that phrase contained in section 6(1) of the Family Provision Act. It will be appreciated that, unless he can establish that he is an eligible person, the Plaintiff does not have the standing to bring the present proceedings. 11 The Plaintiff asserts that he is such an eligible person within paragraph (d) of the definition, in that he is a grandchild of the Deceased and that he was partly dependent upon the Deceased. 12 The Defendants dispute the status of the Plaintiff as an eligible person. There is no dispute that the Plaintiff, as a son of the daughter of the Deceased, is a grandchild of the Deceased. Nevertheless, the Defendants dispute that that the Plaintiff was partly dependent upon the Deceased. 13 It is necessary, therefore, at the outset, to resolve this question of the dependency of the Plaintiff upon the Deceased, since unless the Plaintiff can establish that dependency, he is not an eligible person. If he is not, he does not have the standing to bring the present proceedings and his claim must therefore be dismissed. 14 The Plaintiff was born on 4 June 1968, and is now 33 years of age. He appears to have had an unhappy home life during his childhood and teenage years. His relationship with his mother was not good for some years, and at the present time and for some years past has been totally nonexistent. The Plaintiff's parents indulged in excessive alcohol, fought, argued, were abusive to each other and to their children. The Plaintiff did not regard his mother as being either loving or affectionate towards him. 15 I would, in passing, observe that the relationship of the Plaintiff's mother with her own mother, the Deceased, also was not a good one. Indeed, the Deceased at the same time as she made her will also made a statement, dated 14 December 1994 (which was witnessed by the witnesses to her will), in which she explained the reason why she was giving to her daughter Jill Seitz the amount of the legacy contained in the will, being a lesser benefit than that which she was giving to her son. That statement included the following: My daughter has, over the past three years, caused me enormous stress and anguish. She has continuously harassed me and has been very nasty and vindictive to the family. Her children have been forced to leave home and to reside with me. 16 Jill Seitz had three children, being the Plaintiff, and two daughters, Michelle and Debbie. 17 It was the evidence of the Plaintiff that the Deceased was more of a mother to him than his own mother was. He addressed the Deceased as "Mumma". From the time when he was about 8 years old he went on holidays with the Deceased, his younger sister Michelle, four years younger than the Plaintiff, came also. The Plaintiff often stayed with the Deceased at weekends. As he grew older he spoke to her by telephone at least once a week. This practice continued until the death of the Deceased. 18 At about the time when he was aged 16 the Plaintiff's parents separated for about a year. At that time the Plaintiff started taking drugs and drinking alcohol. He also at that time commenced an apprenticeship as a butcher. (I gather, although the evidence was not explicit in this regard, that in due course he qualified in that occupation.) 19 It was the evidence of the Plaintiff that from the age of about 16 until he was aged about 19 he was constantly being ordered to leave home by his mother. On each such occasion he went to stay with the Deceased at the Forestville house. It would appear that most of those periods were quite short (sometimes merely overnight or for a week-end), but on three or four such occasions he stayed with her for about two months at a time. Whenever he was staying with the Deceased she gave the Plaintiff money for fares and luncheons, during periods whilst he was unemployed. 20 In 1991, when he was aged 23, the Plaintiff went into a rehabilitation centre for twelve months. When he emerged in 1992 he went to live with the Deceased in the Forestville home for a period of almost a year. During that period he paid to her board of $30 a week. At first the Plaintiff resided in the house itself. After about three months the Deceased at the Plaintiff's request allowed him to occupy the garage on that property. The Deceased also gave him financial assistance towards the purchase of a waterbed, a new large television, and a new video player. He subsequently repaid to the Deceased the moneys which she had advanced to him for those purchases. The Plaintiff asserted that during that period he also helped the Deceased with shopping, with repairs and with maintenance around the house, and mowed the lawns. At least that lastmentioned assertion was disputed by the First Defendant. 21 The Deceased also assisted the Plaintiff to redeem certain possessions which he had pledged to a pawnbroker. 22 In July 1993, after he had been living with the Deceased for the best part of a year, the Plaintiff commenced work at Hornsby. That employment required him to commence work at 6 am. On account of the exigencies of travelling to that location at such an early hour, the Plaintiff moved out of the Deceased's residence towards the end of 1993 and rented accommodation closer to his place of employ. 23 When the Plaintiff attained 18 and again when he attained 21, it was the Deceased and not his parents who celebrated those birthdays with him. When the Plaintiff married his present wife Tanya on 20 November 1994 the Deceased came to the wedding, but not the Plaintiff's parents. 24 Of his marriage the Plaintiff has two children, Matthew (born on 4 May 1995, who is presently aged 6) and Jakeb (born on 28 September 1999, who is presently aged 2). In addition, the Plaintiff has a son Benjamin (born on 11 July 1991, who is presently aged 10), who was born to the Plaintiff by a former relationship. The Plaintiff pays child support of $40 a week for Benjamin. 25 After Matthew was born the Plaintiff and his wife acquired a motor vehicle and visited the Deceased for lunch once a fortnight. They took Matthew to see his great-grandmother. At about the time of Matthew's birth the Plaintiff was employed as a butcher at the Forestville Shopping Centre. Since that location was convenient to the residence of the Deceased the Plaintiff often called in to see his grandmother, either at lunchtime or after work. 26 On account of an unsuccessful enterprise in conducting his own butcher shop at Clareville, the Plaintiff went bankrupt in February 1997. He was discharged from bankruptcy on about 28 February 2000. His bankruptcy resulted from the fact that he had borrowed $15,000 from his parents to refurbish the shop, that loan to be repaid over a period of two years. However, only four months later, his mother required him to repay that amount. In order to repay his parents, the Plaintiff borrowed from the Commonwealth Bank, and the cash flow from the shop was such that he was not able to repay the loan to the bank in accordance with the required terms. He fell behind in his rent on the butchery premises, and the landlord locked him out of the shop. He went bankrupt on his own petition in February 1997. The Plaintiff did not have the benefit of legal advice or representation in the bankruptcy proceedings. 27 From April 1997 the Plaintiff was employed as a butcher by Franklins, firstly at Glenrose, then at Bankstown, then at Rockdale. The following year he commenced employment at Joe's Meat Market at Castle Hill, where he remained for one year. He then underwent a computer course, occupying one year, at Hornsby TAFE. 28 At the time of the commencement of the proceedings, the Plaintiff was conducting his own business known as Eureka Retail Solutions, from which he was earning about $200 a week. However, by the time the proceedings came on for hearing the Plaintiff was once again employed as a butcher, since January 2001 as retail meat manager at Five Star Gourmet Foods at Crows Nest, where he earns $420 net for a 6 day week. In addition, he expects to receive a bonus at the end of the present year. The amount of that bonus was uncertain, however the Plaintiff in his evidence said that he expected that it would be between $100 and $150 for every week of his service, that is, that is would be between $5,200 and about $6,800 for the entire year. In addition, the Plaintiff's wife Tanya has until recent times been working as a waitress in a restaurant for two evenings a week, receiving $60 a night. The Plaintiff's wife receives a family allowance of $300 a fortnight and a carer's part-allowance of $190 a fortnight. 29 The family allowance and the carer's allowance are received in consequence of the physical and medical condition of the Plaintiff's youngest son Jakeb. He suffers from epilepsy and global development delay. Details concerning his present condition are set forth in a report from Dr Desmond Cohen dated 6 November 2001. That report contains the following, Jakeb is a developed mentally delayed child (moderate severity), who additionally has intractable epilepsy. He requires extensive and varied input from a number of therapists in an attempt to optimise his global development. Specialised schooling will be required. Jakeb will almost certainly require a sophisticated wheelchair as he gets older and possibly additional orthopaedic appliances.

Jakeb from time to time will require respite care, which is extremely costly. 30 Details are set forth in his mother's evidence concerning Jakeb's needs. He is presently incontinent of bladder and bowels, a condition which is likely to continue. He will always be dependent upon other persons. 31 I have had the benefit of receiving a written outline of submissions from Counsel for the respective parties. Those written outlines will be retained in the Court file. 32 It was submitted upon the part of the Defendant that the only evidence concerning partial dependency presented by the Plaintiff related to the following matters: (a). Pocket money received for lawn mowing (when he was a child).

(b). Accommodation, food, money for bus fares received when he had brief absences from home.

(c). One month's stay with the Deceased in about 1988 upon his return from Adelaide.

(d). From the time he left the rehabilitation centre in 1992 until late 1993 he lived with the Deceased, paying board, the Deceased helping him with the purchase of a water bed, a television and video player, and assisting him to retrieve the items which he had pawned. 33 It was submitted on behalf of the Defendant that the foregoing matters, if accepted, constitute only an intermittent dependency which was not substantial. 34 The foregoing submission does not recognise that, as was asserted in the Plaintiff's oral evidence (albeit not in his affidavit evidence), from the age of 16 to the age of 19 he resided with the Deceased not only on some occasions merely overnight or for a weekend, but on three or four separate occasions for periods of about two months at a time. 35 Despite the submission on behalf of the Defendant, I am satisfied that the foregoing matters, in particular, the provision of accommodation to the Plaintiff for significant periods at the Forestville house (especially in 1992-1993), as well as the intermittent financial assistance given to him when he was not in employment, constitute dependency sufficient to fulfil the first limb of the definition of eligible person upon which the Plaintiff relies in support of his assertion that he is such within paragraph (d) of the definition. In consequence, therefore, the Plaintiff, being also a grandchild of the Deceased, is, in my finding, an eligible person within that paragraph of the definition. As such, he has the standing to bring the present proceedings. 36 Since the Plaintiff is an eligible person only within paragraph (d) of the definition, the provisions of section 9(1) of the Act are called into operation. In consequence, it is necessary for the Plaintiff to establish that there are factors which warrant the making of the application. 37 In Fulop v Public Trustee (1987) 8 NSWLR 679 McLelland J (as he then was) said, at 681, that the factors which warrant the making of the application are factors which, when added to facts which render the applicant an "eligible person", give him the status of a person who would be generally regarded as a natural object of testamentary recognition by the testator. 38 It is apparent from the evidence that the Plaintiff had a close and loving relationship with the Deceased. Further, that the relationship of the Plaintiff with his own mother was during his formative years a difficult one, and in more recent times has been totally non-existent. The Deceased's residence at Forestville was for the Plaintiff a place of sanctuary and retreat from a difficult home life with his parents. When his mother ordered him to leave the family home, he had nowhere else to go but to his grandmother. To an extent, although not entirely, the Deceased was cast in the role of surrogate mother to the Plaintiff, and it would appear that that was a role which she willingly accepted. The Plaintiff relied upon as factors which warrant the making of the application, the closeness of the relationship between the Plaintiff and the Deceased and the maternal role in which the Deceased was cast in relation to the Plaintiff. 39 I am satisfied that, in the factual circumstances of this case, the Plaintiff has established that the foregoing factors, when added to the facts to which I have also referred which render the applicant an eligible person, give him the status of a person who would be generally regarded as a natural object of testamentary recognition by the Deceased. Indeed, there was evidence that the Deceased had on occasion made comments to the Plaintiff concerning her testamentary intentions, those comments being to he effect that she was proposing to leave her house among her six grandchildren, so that each grandchild would then be enabled to pay a deposit upon a residence for that grandchild. At the time of making those comments the Deceased said, according to the Plaintiff, that her son and daughter each had their own residences and were "financially well set up". 40 In my conclusion the foregoing factors upon which the Plaintiff relies are factors which warrant the making of the application by the Plaintiff. 41 The fact that the Plaintiff has established that he is an eligible person and that there are factors of the nature to which I have referred warranting the making of the application are not, of course, determinative of the outcome of the present proceedings. 42 The Plaintiff is still confronted by two further significant problems in establishing an entitlement to receive an order for provision for his maintenance and advancement in life. 43 Those problems, although distinct, are to an extent inter-related. 44 Firstly, the proceedings were not instituted within time. 45 Secondly, the estate has been largely distributed, the only significant asset, the Forestville house property, having been transferred to the First Defendant. Thus it is only in respect to notional estate of the Deceased that any order for provision can ultimately be made in favour of the Plaintiff. The fact that the Plaintiff did not bring the proceedings within time entitled the Defendants to transfer the house property at Forestville to the First Defendant on 31 July 2000 (that being well after the expiry of the prescribed period). 46 Section 16(2) of the Act requires that the application be made within the prescribed period "or within such further period as the Court may, having regard to all the circumstances of the case but subject to subsection (3), by order, allow". 47 The prescribed period in the instant case is the period of eighteen months after the death of the Deceased. That is, in the instant case the prescribed period elapsed on 2 July 1998. Since the proceedings were instituted only upon the filing of the summons on 3 August 2000, the proceedings were two years and one month out of time. Subsection (2) of section 16, which enables the Court to extend the time for the institution of the proceedings is, however, subject to subsection (3) of that section. That latter subsection provides, The Court shall not make an order under subsection (2) allowing an application in relation to a Deceased person to be made after the expiration of the prescribed period unless sufficient cause is shown for the application not having been made within that period. 48 In considering whether or not sufficient cause has been shown for the Plaintiff not having made his application by 2 July 1998, the claim by the Plaintiff's mother, Jill Seitz, against the estate of the Deceased becomes of significance. 49 The policy of the Family Provision Act concerning a multiplicity of claims against the estate of a testator is manifest in section 20(1), which provides, On an application in relation to a Deceased person, the Court may disregard the interests of any eligible persons who have not made an application in relation to the Deceased person. 50 It is intended by that provision that all claims against an estate should be heard and determined at the same time. 51 Consonant with that statutory policy Part 77 rule 63 of the Supreme Court Rules makes provision for an applicant for an order for provision under the Family Provision Act to serve upon the administrator (that is, the executor or administrator of the estate of the deceased person) a notice showing who, in the opinion of the applicant, is or may be an eligible person (subrule (1)); and further requires the administrator to serve a notice in the form of Form 89B on certain persons specified in that subrule, including "any other person who, in his opinion, is or may be an eligible person". 52 In the proceedings instituted by Jill Setiz, which proceedings were instituted within the prescribed period, the Defendant executors in their affidavit of 16 October 1998 set forth the name and address of every person who, in their opinion, is or may be an eligible person. That list included the Plaintiff, identified as follows, Phillip Seitz - grandson C/- Franklins Butchery, Market-town Leichhardt NSW 2040 53 Paragraph 9 of that affidavit also states that notice pursuant to Part 77 rule 63(2) had been given to certain persons then named. Those persons included the Plaintiff, identified in terms identical to those set forth in the preceding paragraph, with the same name and the same address. That notice is asserted to have been served upon the Plaintiff by post on 26 May 1998, addressed to him at the foregoing address. 54 The Plaintiff denied receiving the notice of claim in his mother's proceedings. The only evidence concerning service upon him of that notice of claim was that it had been sent to him by post, addressed to him C/- Franklins Butchery, Market-town, Leichhardt NSW 2040, on 26 May 1998. The fact that the Plaintiff did not receive that notice is hardly surprising, since he never worked at that address. Although he had been employed by Franklins, it was at various other locations, and never at Leichhardt. Further, at the time when that notice was posted to the Plaintiff at the Leichhardt address the Plaintiff had ceased to be employed by Franklins (his employment with that company ceasing on 6 March 1998) and was (and since 23 March 1998 had been) employed by Joe's Meat Market at Castle Hill. 55 I am satisfied that the Plaintiff did not ever receive that notice of claim. 56 That fact that the Plaintiff did not receive the notice of claim is not, however, determinative of whether or not the Plaintiff is entitled to an extension of time in which to bring the present proceedings. 57 The Plaintiff said that he was not aware of the proceedings brought by his mother. The total absence of any relationship or contact between the Plaintiff and Mrs Jill Seitz would support that statement by the Plaintiff. Further, the First Defendant himself, although he had conversation with the Plaintiff after the death of the Deceased and informed the Plaintiff that his only benefit under the will of the Deceased was to share in the contents of the house, did not ever inform the Plaintiff that Mrs Jill Seitz had brought proceedings against the estate. Further, the First Defendant did not ever suggest to the Plaintiff that he might have a claim against the estate under the Family Provision Act. 58 The Plaintiff's present solicitor Pauline Betts in her affidavit of 21 June 2001 set forth details of her contact with the Plaintiff and with the solicitors acting for the Defendants. The Plaintiff first saw Miss Betts on 29 February 2000. It will be appreciated that that was a year and a half after the expiry of the prescribed period. There can be no criticism of any delay between the Plaintiff first receiving advice from Miss Betts concerning the possibility that he might be entitled to make a claim under the Family Provision Act, and the institution of the present proceedings by the filing of the summons on 3 August 2000. 59 Until he consulted Miss Betts at the very end of February 2000 the Plaintiff was totally unaware, firstly, of his possible entitlement to make a claim under the Family Provision Act, and, secondly, of any limitation period in respect to the making of such a claim. (It will be appreciated, however, that the house property was transferred into the name of the First Defendant on 31 July 2000, only a few days before the institution of the present proceedings.) 60 I am satisfied that sufficient cause has been shown for the application of the Plaintiff not having been brought within the prescribed period of eighteen months after the death of the Deceased. It is appropriate, therefore, that, in the event that the Plaintiff otherwise establish an entitlement to an order or provision, the Court should extend the time for the institution of the proceedings. 61 It was submitted on behalf of the Plaintiff that he has been left without adequate provision for his maintenance and advancement in life. He presently resides in rented accommodation (a three bedroom brick house) at Hornsby with his wife and their two small children (one of whom suffers significant problems of both a physical and an intellectual nature). The Plaintiff has recently come out of bankruptcy. He is presently in employment, earning $420 net a week. His wife who, until very recent times, was earning $120 a week (cash in hand - for which she admittedly paid no tax), is no longer in employment. The Plaintiff and his wife are financially stretched on account of the special needs of their younger child Jakeb. The Plaintiff's earnings are augmented by the Family Allowance and Carer's Part Pension totalling $420 a week. Thus the total income of the household is at the present time $660 a week. 62 The Plaintiff pays rent of $330 a week. He pays $40 a week for support of his eldest son Benjamin. The balance of the total income of the Plaintiff and his wife is expended on their everyday needs. Their only assets are a 1985 Ford sedan motor car (worth about $3,000) and their furniture and personal effects. 63 The Plaintiff expressed a desire to purchase a residence in the Hornsby area. There was some evidence (admittedly rather skimpy) to suggest that such a purchase would require a cash deposit of between $35,000 and $40,000. It would appear that the Plaintiff and his wife would qualify for the First Homebuyer's Grant, in an amount of $7,000. However, any purchase of a residence would also attract stamp duty and legal fees. The Plaintiff further pointed to the significant support needs which either presently are, or soon will be, required in respect to his son Jakeb. These include a wheelchair ($8,000), a modified van ($25,000), incontinence supplies ($2,000 a year); and a hoist ($5,000); in addition to such needs as special schooling, and respite care. The Plaintiff's wife has been offered what was described as a Respite Care Package by Centrecare (which would enable her to obtain respite care for Jakeb in amounts totalling $3,600 for the financial year). However, that Respite Care Package must be arranged in consultation with Centrecare, and does not involve the Plaintiff's wife or the Plaintiff in receiving personally any part of that amount. 64 It is quite apparent that the Plaintiff has significant present needs. 65 In performing the first step in the two stage process identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208, in order to determine whether the Plaintiff has been left without adequate provision for his maintenance, education or advancement in life, the Court must assess whether the provision (or, as in the instant case, the absence of provision) was inadequate for what, in all the circumstances, was the proper level of maintenance appropriate for the Plaintiff, having regard, amongst other things, to the Plaintiff's financial position, the size and nature of the estate of the Deceased, the totality of the relationship between the Plaintiff and the Deceased, and the relationship between the Deceased and other persons who have a legitimate claim upon her bounty. 66 The High Court, at 210, said that that question, although it involves the exercise of value judgments, is strictly one of fact (see White v Barron (1980) 144 CLR 431 at 441-443; Goodman v Windeyer (1980) 144 CLR 490 at 501-502, 509; Hunter v Hunter (1987) 8 NSWLR 573 at 576). 67 In the instant case, in approaching the foregoing question of whether the Plaintiff has been left without adequate provision for his maintenance or advancement in life, a significant matter which must be considered is the situation of the First Defendant. Not only was he the chief chosen object of the testamentary beneficence of the Deceased, in that by her will he was left the Forestville house; but, further, that house property has been transferred into the name of the First Defendant. In addition, the First Defendant, has raised a mortgage on that house property, to enable him to meet the claim of the Plaintiff's mother, and has arranged his affairs upon the basis of his retention of that house property. 68 It will be appreciated that, since the house property is now held by the First Defendant, any order for provision an entitlement to which the Plaintiff might otherwise establish, can be made only in consequence of the designating of that house property as notional estate of the Deceased (section 24 of the Family Provisions Act). However, the Court (by section 27(1) of the Act) is prohibited from making such an order unless it has considered certain matters including, (a) the importance of not interfering with reasonable expectations in relation to property, and

(b) the substantial justice and merits involved in making or refusing to make the order (section 27(1)). 69 In the instant case evidence was given by the First Defendant and by his wife, concerning their financial and material circumstances. In addition to the Forestville house, they own conjointly their residence at 8 Patanga Road, Frenchs Forest, which has a value of between $535,000 and $550,000. The First Defendant (who was born on 11 July 1942 and is presently aged 59) is retired. His wife, however, is in employment as a payroll manager, receiving a net income of about $50,000 a year. 70 The First Defendant has rented the Forestville house through an estate agency. He receives, after paying outgoings in respect to that property a net income of about $15,000 a year. However, when the interest payments on the mortgage (upon which $94,000 is presently owing) are taken into account, the retention of the Forestville property by the First Defendant results in a net deficit to him of $593 a month. 71 The First Defendant's wife stated that, at the age of 56, she did not desire to remain in employment indefinitely. She had, in fact, planned to retire last year. However, expenses consequent upon the unexpected and tragic death of the elder son of the First Defendant and his wife, together with the present litigation, have resulted in the First Defendant's wife, through necessity, continuing in employment. Apart from the jointly owned house property of herself and her husband the First Defendant's wife has no separate property of her own, although she does have a superannuation entitlement of $54,000. 72 The Court fully recognises the importance of not interfering with reasonable expectations in relation to property, and, in the instant case, the reasonable expectations of the First Defendant that he would remain the beneficial owner of the Forestville house property. It is through no fault of his own that at the time when he settled the proceedings brought by Mrs Jill Seitz, and expected that after the disposition of those proceedings there would be no further claims upon the estate or upon his interest in the Forestville house property, he is now confronted with the claim of the present Plaintiff. 73 The First Defendant was recognised by the Deceased as the chief object of her testamentary beneficence. It is quite apparent that there was a close and loving relationship between the Deceased and the First Defendant, and that the Deceased relied very greatly upon the First Defendant in the latter years of her life, especially in practical and business matters. 74 I have already recorded my conclusion that, to a great extent, the Deceased was cast in the role of mother to the Plaintiff. The Plaintiff is in an extremely difficult and straitened financial situation, especially as a result of the expenses associated with his younger son. It will be appreciated that Jakeb was born after the death of the Deceased, and that the Deceased could have had no expectation that the Plaintiff would be confronted by such expenses as are and will be necessary on account of Jakeb's condition. 75 Some criticism was made on behalf of the Defendants concerning the circumstances of the employment of the Plaintiff's wife, and the fact that she gave up that employment shortly before the commencement of the hearing. The conduct of Mrs Tanya Seitz in receiving income of which she did not inform Centrelink reflects poorly upon that witness. She freely admitted that she knew that conduct to be dishonest on her part, but said that she also knew that if she informed Centrelink her pension entitlements would be affected. Nevertheless, the practical situation is that if Mrs Tanya Seitz continues to work, then she will receive a reduced payment from Centrelink. The criticism which is directed to Mrs Tanya Seitz cannot, however, affect the practical position concerning the difficult financial circumstances in which the Plaintiff finds himself. 76 It was also suggested on behalf of the Defendants that, firstly, Mrs Tanya Seitz had recently given up her part-time employment with the deliberate intention that the total income of the Plaintiff and herself would at the time of the hearing of the present proceedings be less than it had recently been. Further, it was suggested on behalf of the Defendants that the Plaintiff had deliberately delayed instituting the present proceedings until after his discharge from bankruptcy because, so it was submitted on behalf of the Defendant, any order for provision which might be made in his favour in the present proceedings whilst he was bankrupt would benefit, not himself personally, but his bankrupt estate. 77 I am not satisfied that the Defendants have substantiated either of those submissions directed against the Plaintiff and his wife. 78 In my conclusion the Plaintiff has been left without adequate provision for his maintenance. 79 The question which next confronts the Court is how that situation should be recognised by an order of the Court, in the light of the competing claim of the First Defendant upon the testamentary bounty of the Deceased. 80 It should here be observed that the Plaintiff is entitled to a one-sixth share in the value of the contents of the house property. That value has been assessed by the Defendants as $15,000, with the consequence that each of the grandchildren of the Deceased is entitled to $2,500. The Plaintiff has not yet received that amount. 81 The evidence concerning the cost of appropriate housing in the Hornsby area was somewhat skimpy. Nevertheless, it would appear that the Plaintiff, in fulfilling a commendable desire to acquire a residence for himself and his wife would need an amount of between $30,000 and $40,000 as a deposit for the purchase of such a residence. He also requires a further amount which would go some little way to meeting the inevitable expenses associated with his younger son, in particular, the acquisition of a wheelchair, and to providing some small fund in respect to other expenses. 82 In considering the substantial justice and merits involved in making or refusing to make an order for provision in favour of the Plaintiff, it is my conclusion that the need of the Plaintiff is such that his present circumstances should, at least to an extent, be ameliorated by the making of an order for his provision, but that such provision should be in an amount which would not have the inevitable consequence that the First Defendant must of necessity sell the Forestville property. 83 In my conclusion the Plaintiff has established an entitlement to an order for provision in the sum of $50,000. 84 It will be appreciated that the establishment of such an entitlement must, however, be approached in the light of the competing claim of the First Defendant upon the testamentary bounty of the Deceased and, in particular, in the light of the importance of not interfering with the reasonable expectation of the First Defendant (and also of his wife) in relation to the expected income which they would receive from the Forestville property. 85 It has already been recorded that, despite the net profit which the Second Defendant receives from the renting of that property, the payment of the interest upon the mortgage which he raised over that property has resulted in an overall deficit in respect to that property. It is a matter entirely for the First Defendant himself as to whether or not, in those circumstances, it would be of greater financial benefit to him to retain that property (presumably in the expectation of the property continuing to increase in value), or whether his financial circumstances would be better served by the sale of that property. The sale of that property would enable the proposed legacy to the Plaintiff to be paid, the costs of the present proceedings to be paid, and the totality of the mortgages over both the Forestville property and the First Defendant's own home at Frenchs Forest to be discharged, still leaving the First Defendant with a significant fund (in my calculation, about $125,000) for his own benefit. Further, such a sale would extinguish the continuing deficit which the First Defendant is experiencing in consequence of meeting the mortgage payments in respect to the Forestville property. However, that is a matter entirely for the decision of the First Defendant. 86 In my conclusion the financial and material circumstances of the First Defendant are not such as would have the effect of reducing, let alone extinguishing, an order for provision in favour of the Plaintiff in the sum of $50,000, an entitlement to such provision I am satisfied the Plaintiff has established. 87 Whilst taking into consideration the competing claim of the First Defendant and the importance of not interfering with his reasonable expectations in relation to property, nevertheless I am satisfied that it is appropriate that an order should be made in favour of the Plaintiff which would give to the Plaintiff, in addition to the benefit to which he is entitled under the will of the Deceased, a legacy in the sum of $50,000, and I propose so to order. The making of that order will require the making of an order designating as notional estate of the Deceased the Forestville property. 88 I make the following orders. (1). I order that the time for the institution of these proceedings be extended up to and including 3 August 2000.

(2). I order that, in addition to the benefits given to him by the will of the late Lindsay Ethel Prior Morgans ("the Deceased"), the Plaintiff receive out of the notional estate of the Deceased a legacy of $50,000, such legacy not to bear interest if paid on or before 20 March, 2002, and if not so paid to bear interest at Supreme Court rates.

(3). I order that the house property situate at and known as 10 Brown Street, Forestville, be designated as notional estate of the Deceased.

(4). I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendants on the indemnity basis be paid out of the notional estate of the Deceased.

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Judgment (13 paragraphs)

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Cases Cited (5)

Cited By (2)