Sherwood v Public Trustee [2007] NSWSC 1365 | Case summary

1319 of 2006 MARY-ANN AVA SHERWOOD -v- PUBLIC TRUSTEE JUDGMENT 1 HIS HONOUR: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 7 February 2006 Mary-Ann Ava Sherwood claims substantively an order for provision for her maintenance and advancement in life out of the estate of her late grandmother Beatrice Mary Ann Hunt (to whom I shall refer as "the Deceased"). 3 The Deceased died on 10 August 1989, aged about 91. She left a will dated 3 July 1987. Probate of that will was on 29 March 1990 granted to her son Alfred James Thomas Whitlock, the executor named therein. Upon the death of that executor on 27 July 1995 without completing his executorial duties, administration with the will annexed of the unadministered estate of the Deceased was on 28 May 1998 granted to the Public Trustee (who is the Defendant to the present proceedings). 4 The Plaintiff is the granddaughter of the Deceased, being the daughter of the Deceased's son Alfred James Thomas Whitlock. The Deceased, who was a widow at the time of her death (her second husband, Roy Ernest Hunt having predeceased her), was survived by her three children, Beatrice Emma Rose (Mrs Klinker), Alfred James Thomas and James Thomas. 5 The inventory of property discloses the following assets (together with the respective values attributed thereto at the time of the death of the Deceased), House Property situate at and known as 45 Delia Avenue, Budgewoi $120,000 Furniture in house property $1,000 Money in current account with Commonwealth Bank, Umina $3,981 Money in savings account with Commonwealth Bank, Toukley $10,635 Debenture in Umina Beach Bowling Club $104 Debt owed to estate by Thomas Sherwood $11,750 1984 Toyota Corona motor vehicle $8,000 6 By her will the Deceased gave her motor vehicle and the contents of her residence to the Plaintiff. She gave to her great grandson James Thomas Sherwood (who is the Plaintiff's son) her principal place of abode, upon his attaining the age on 21 years. The will provided that, until James attained that age, the Plaintiff and her husband Thomas Sherwood were entitled to live in that residence, subject to payment of rates and taxes and insurance, and to keeping the property in the same state of repair as at the death of the Deceased. The Deceased gave the residue of her estate to her three children in equal shares. 7 At the time of her death the Deceased's principal place of abode was the house property at 45 Delia Street, Budgewoi. The Plaintiff, her husband and her two young children were residing in that house property at the time of the Deceased's death, and continued to reside therein for about the next nine years. In about 1998 the Plaintiff requested the Public Trustee to sell that house property and to purchase another house property, being that situate at and known as 37 Allandale Avenue, Kearsley. The purchase price of the Kearsley residence was less than the net proceeds of sale of the Budgewoi residence. 8 It would appear that, despite the requirement by the terms of the will of the Deceased that the Plaintiff and her husband pay all outgoings in respect to the house property, in return for the right of residence therein given to them by the will, nevertheless, for a number of years before she departed the Kearsley property in early 2006, those outgoings (or at least the totality of those outgoings) were not being paid by the Plaintiff and her husband. The Public Trustee advanced various sums to meet those outgoings (those advances being made from the difference between the net proceeds of sale of the Budgewoi residence and the cost of the acquisition of the Kearsley residence). In 2000 the Plaintiff and her husband signed an undertaking to the Public Trustee in respect to the repayment by them of an amount of $1310. 9 Of the balance remaining after the sale of the Budgewoi property and the purchase of the Kearsley property, in an amount of about $24,000, the Defendant released to James Sherwood, the principal beneficiary, moneys totalling $9,477, in order to assist James in his maintenance, education, and advancement in life. 10 The Defendant currently holds a balance $8,039 standing to the credit of the estate. The Kearsley property, which is registered in the name of the Defendant, has a present estimated value of $170,000. 11 In calculating the value of the estate available for distribution the costs of the present proceedings must be taken into account, since the Plaintiff, if successful in her claim, will be entitled to an order that her costs be paid out of the estate, whilst the Defendant, irrespective of the outcome of the proceedings, will be entitled to an order that his costs be paid out of the estate. It was estimated on behalf of the Plaintiff that her costs will total $24,200, whilst it was estimated on behalf of the Defendant that his costs will total $19,000. In addition, the Defendant's commission in an amount of about $4000, and tax, fees and other charges, in a total amount of about $6300, are presently outstanding. Accordingly, it is prudent to proceed upon the basis that the value of the distributable estate will be in the order of $116,500. 12 The Plaintiff, who was born on 13 November 1963, is presently aged 44. According to the Plaintiff, from the time of her birth she resided with the Deceased, and was brought up by the Deceased as if she was the Deceased's child, rather than the Deceased's grandchild. The Plaintiff said that her parents gave her to the Deceased, to be brought up by her, since the Plaintiff's own mother had six older children from two previous marriages. 13 Although the Deceased's husband, Roy Ernest Hunt, was a second husband, and not the Plaintiff's natural grandfather, nevertheless, she addressed him as "Poppy". The Plaintiff attended school until year 10, attaining her School Certificate in 1980. She said that she missed a lot of schooling because she was looking after the Deceased and Mr Hunt. Upon leaving school the Plaintiff did not obtain employment, but remained at home, looking after the Deceased and Mr Hunt. The Plaintiff gave details of her assistance to the Deceased in the household, especially from the time when Mr Hunt began to suffer from Alzheimer's Disease. The Plaintiff was then aged only 14, and she was responsible for Mr Hunt if the Deceased were absent from the house. 14 The Plaintiff met Thomas Paul Sherwood in November 1983. Their son James Thomas Sherwood, the principal beneficiary under the will of the Deceased, was born on 6 February 1985 and is presently aged 22. The Plaintiff and Thomas Sherwood married on 10 August 1985. James was aged only four years at the date of the death of his great-grandmother. The Plaintiff and her husband have another son, Thomas Roy Sherwood (who was born on 12 July 1989 and is presently aged 18). 15 According to the Plaintiff, she resided with the Deceased throughout her entire life, except for a period of about eight or nine months in December 1983 - August/September 1984, when the Plaintiff moved out of home and lived with Thomas Sherwood, before their marriage. The only other times when the Plaintiff was not residing with the Deceased were when the Deceased lived for the last few weeks of her life in a nursing home, and when, in the preceding period, she lived with her son James at Clarencetown for a short period, and lived with her son Alfred at Umina for about two weeks. 16 Subsequent to the institution of the present proceedings the Plaintiff separated from her husband. She is currently residing in rented property at 5 Main Road, Paxton, where she has lived since January 2007. At the outset, the Plaintiff's younger son Thomas moved into that property with her and contributed to payment of the household expenses. However, Thomas has subsequently returned to live with his father and his elder brother at the Kearsley residence. The Plaintiff's owns a 1986 Holden Commodore motor vehicle, to which she attributes an estimated value of about $500. Otherwise her only possessions are some furniture and furnishings, most of which are in a deteriorated condition and require replacing. The Plaintiff gave evidence or her weekly outgoings, totalling $295 (which figure includes rent of $135). 17 The Plaintiff's only income is a disability pension of $596 a fortnight (which includes rental assistance). The Plaintiff is indebted to a Mr and Mrs Groizard for about $400 in respect to the registration costs of her motor vehicle. The Plaintiff gave evidence concerning mental health problems, for which she has been referred to counselling. However, she has not been able to afford the cost of those counselling sessions. The Plaintiff also suffers from asthma and high blood pressure, which conditions are currently being adequately managed. 18 According to the Plaintiff, the catalyst for her departure from the family home at Kearsley in early 2006 was a request made by James (who at that stage, having attained the age of 21, had become entitled to the ownership of that residence) that the Plaintiff remove from the property a number of canine animals which she maintained thereon. During the course of cross-examination it was revealed that the totality of those animals included seven or eight chihuahuas, four greyhounds and one whippet - that is a total of about 12 or 13 dogs. It would appear that the Plaintiff breeds chihuahuas and sells the pups. At Christmas 2006 she sold four chihuahua pups for a total of $350. However, there was no reference to that fact or to the Plaintiff's canine breeding activities in her evidence presenting the details of her assets and her earnings. Upon being confronted by an ultimatum from James, in the words of the Plaintiff, "to get rid of the dogs or get out", the Plaintiff chose the latter course. 19 The claim of the Plaintiff must be approached in the light of competing claims upon the testamentary bounty of the Deceased, being the claims of other eligible persons or the claims of other persons named as beneficiaries in her will. 20 The Defendant was of the opinion that, apart from the Plaintiff, the only other eligible persons were James Thomas Sherwood, the great-grandson of the Deceased, who is the beneficiary in respect to the realty of the Deceased, and Thomas Sherwood, the husband of the Plaintiff. 21 I would have thought, however, that her three children who survived the Deceased (being Beatrice Emma Rose Klinker, Alfred James Thomas Whitlock and James Thomas Whitlock) would each have been an eligible person in relation to the Deceased. Whilst I appreciate that Alfred James Thomas Whitlock died in 1995, there is no evidence of a notice of claim having been served upon the other two children of the Deceased. 22 Evidence was placed before the Court concerning the financial and material circumstances of the James Thomas Sherwood and of his father, Thomas Paul Sherwood. 23 James is presently aged 22. According to James, the Budgewoi residence was sold and the Kearsley residence was acquired in order to enable James to attend a school in Kearsley, because, in his own words, he was "not getting along with the teachers and other students at the school at North Lakes High School". However, it was the evidence of the Plaintiff that the move was essentially to avoid what the Plaintiff referred to as "the social fall-out" resulting from her husband being convicted of a criminal offence. 24 Although the evidence was extremely skimpy in this regard, James is apparently now an apprentice chef by occupation. No further details of his employment or occupation were presented to the Court. At the time when he swore his affidavit of 5 June 2006 (re-sworn on 28 June 2007), James was in receipt of a NewStart allowance in an amount of $410 a fortnight. Apart from clothing and personal effects, including a television, his only asset was an unregistered motor vehicle, which he was hoping to sell for about $300. He owed about $800 for bills to Telstra and Foxtel. James denied giving to his mother the ultimatum asserted by her - that she get rid of all her animals or that she leave the property. James was not cross-examined upon his evidence. 25 The Plaintiff's estranged husband presently resides in the Kearsley property with his two sons, James and Thomas. He is presently in receipt of a disability pension in an amount of about $400 a fortnight. He has no savings. His only asset is a 1987 Ford Falcon station wagon, to which he attributes a value of about $800. He owns a television and a video player, which items he won in a raffle at a bowling club. 26 It will be appreciated that the present proceedings were instituted almost 14 years after the expiration of the 18 month limitation period (the "prescribed period") provided by section 16 (1) of the Family Provision Act. The Plaintiff by her summons seeks an extension of that prescribed period, pursuant to section 16 (2) of the Act. 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 chronology and a written outline of submissions from Counsel for the respective parties, and further supplementary written submissions after I had reserved my decision herein. Those documents will be retained in the Court file. 28 The Plaintiff asserts that she is an eligible person within paragraph (d) of the definition of that phrase contained in section (6) (1) of the Family Provision Act, in that she was dependent upon the Deceased (fully dependent until her marriage, and thereafter, by reason of the accommodation provided for her by the Deceased, partly dependent), and that not only was she a grandchild of the Deceased but also she was for the entirety of her life until shortly before the death of the Deceased a member of the same household as the Deceased. 29 The Defendant does not dispute the status of the Plaintiff as an eligible person. Accordingly, she has the standing to bring the present proceedings. However, since the Plaintiff is an eligible person only within paragraph (d) of the foregoing definition, it is necessary, pursuant to section 9 (1) in of the Act, for her to establish that there are factors which warrant the making of the application. 30 Further, the Plaintiff must, in any event, satisfy the Court that there should be an extension of the prescribed period in which to institute the present proceedings. 31 I shall, in due course, return to a consideration of each of those matters. 32 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 her proper maintenance. 33 It should be appreciated that an order for provision is not made as a reward for good conduct on the part of the applicant. Neither is such an order withheld as punishment for perceived bad conduct on the part of the applicant. 34 In this regard, it is appropriate that I should set forth the following salutary admonition of Windeyer J, in the High Court of Australia, in Blore v Lang (1960) 104 CLR 124 at 137, The jurisdiction under the Testator's Family Maintenance Act [the statutory predecessor to the Family Provision Act ] is to provide for deserving persons according to their requirements, not to reward past services. This is sometimes overlooked and evidence concerning the present and probable future requirements of the applicant is subordinated to or submerged in evidence of past services to the testator. Allegations and denials concerning episodes in the past are then likely to become emphasized at the expense of evidence directed to the central issues in the case. 35 Under the terms of the will of the Deceased the Plaintiff and her husband received a right of residence in the Deceased's principal place of abode, subject to the obligation upon them to pay the rates and taxes and insurance and to maintain such property in the same state of repair as at the death of the Deceased. I leave aside for the moment the fact that the Plaintiff and her husband did not comply with that requirement concerning the payment of outgoings and maintaining the property in an appropriate state of repair. 36 From the death of the Deceased on 10 August 1989 until the attainment of the age of 21 years by James on 6 February 2006, being a period of sixteen and a half years, the Plaintiff, together with her husband, enjoyed a right of residence in, first, the Budgewoi property, and, subsequently, the substitutionary property, acquired by arrangement with the Defendant, at Kearsley. 37 Even accepting, for the purposes of the present claim, that the relationship of the Plaintiff to the Deceased should be equated to that of a daughter, rather than to that of a granddaughter, I am not satisfied that the Plaintiff has established that, under the terms of the will of the Deceased, she has been left without adequate provision for her proper maintenance. 38 The conclusion which I have just expressed is of itself sufficient to determine the Plaintiff's claim. However, for completeness, I will refer to the Plaintiff's application for an extension of the prescribed period, and to the requirements of section 9 (1) of the Act. 39 The parties were in agreement that it was appropriate to consider the four factors referred to by Hodgson J (as he then was) in Warren v McKnight (1996) 40 NSWLR 390 at 394, which His Honour said were relevant to the exercise of the discretion of the Court to extend the time for the bringing of an application under the Family Provision Act. Those factors were: the sufficiency of the explanation of the delay in bringing the application; whether there would be any prejudice to beneficiaries; whether the Plaintiff has been guilty of unconscionable conduct; the strength of the Plaintiff's case. 40 The delay in bringing the present application was due essentially to the fact that the Plaintiff, until shortly before the attainment by her elder son of the age of 21 years (and thus the termination of the conjoint right of residence which the Plaintiff and her husband enjoyed in, first, the Budgewoi property, and subsequently, the Kearsley property), appears to have been fully satisfied with the provision made for her by the will of the Deceased. It was only when confronted with the possibility that that right of residence would soon terminate, and also when confronted by apparent problems within the family (both between herself and her husband and between herself and James) that the Plaintiff in December 2005 - less than two months before the termination of her right of residence - sought legal advice. Until that time the Plaintiff was totally unaware of the existence of the Family Provision Act or of any limitation period for the bringing of a claim thereunder. 41 In regard to prejudice to beneficiaries, the Defendant first submitted that the estate had been distributed, and then pointed to the fact that the summons does not seek an order that any property be designated as notional estate (pursuant to the provisions of Part II Division 2 of the Family Provision Act). 42 It would appear that, apart from the realty, the estate of the Deceased had been distributed before the death of the executor. Although the evidence is far from helpful in this regard, it would appear that, apart from the realty, the residuary estate of the Deceased was to a value of $26,471. That residuary estate and the gifts to the Plaintiff (those gifts being to a total estimated value of $9,000) would have been available to meet any claim for provision which might have been made within the prescribed period of eighteen months from the date of the death of the Deceased . 43 Since the only assets presently held by the Defendant are the Kearsley property and the remaining balance of the difference between the proceeds of sale of the Budgewoi property and the purchase price of the Kearsley property, I am entitled to infer that the $26,471 residue has long since been distributed among the three children of the Deceased. The Plaintiff herself in 1991 sold the motor vehicle which was given to her under the will. 44 I am in agreement with the submission of the Defendant that the assets representing the residue and the gifts to the Plaintiff have long since been distributed. However, I do not agree that the totality of the estate has been distributed, since the realty is still held by the Defendant, although as trustee, and not as administrator. (In regard to distribution of an estate, see the judgment of the High Court of Australia (consisting of Barwick CJ, Mason and Murphy JJ) in Easterbrook v Young (1977) 136 CLR 308 especially at 316-317.) 45 In the absence of any evidence concerning the actual distribution of the residuary estate and in the absence of any notice of claim being served upon the surviving residuary beneficiaries, I consider that there would be significant prejudice to those beneficiaries from any order which could have the effect of overturning the distribution of the residuary estate. Further, I observe that no application has been made for the designation of such distributed estate as notional estate of the Deceased. In the absence of any such application, it would not be appropriate for the Court proceed to a consideration of the making such an order. 46 In respect to realty, the prejudice relied upon by the Defendant is that, because of the very considerable delay by the Plaintiff, any order for provision which might ultimately be made in her favour would, of necessity, be borne by that part of the estate to which her son James is entitled, being the undistributed realty (the value of which comprised about 77 per cent of the total value of the estate at the date of death of the Deceased). There would be no contribution from other beneficiaries of the estate (the value of whose interests comprised about 23 per cent of the total value of the estate at the date of death of the Deceased). I am in agreement with the submission of the Defendant that this prejudice to James is irreparable because of the effluxion of time. 47 The Plaintiff has received from the estate a motor vehicle, furniture, and rent free accommodation for some sixteen years. During those sixteen years the Plaintiff has taken those benefits from the estate without any complaint. For the Plaintiff to have stood by for that period, and only when her benefit of rent free accommodation neared its conclusion, then to seek to cavil with the terms of the will constitutes relevant unconscionable conduct. 48 I have already expressed my view regarding the strength of the Plaintiff's case. I do not consider that the Plaintiff can succeed in establishing that she has been left without adequate provision for her proper maintenance. 49 I regard the benefits which the Plaintiff received under the terms of her grandmother's will as being adequate provision for the proper maintenance of someone in the position of a daughter to the Deceased. 50 It follows, therefore, that even if (contrary to the conclusion which I have already expressed) I were to be satisfied that the Plaintiff had otherwise established an entitlement to an order for provision out of the estate of the Deceased, nevertheless, I consider that the prejudice to the other beneficiaries and the conduct of the Plaintiff in standing by for a period of sixteen years are such that, in any event, I would not be prepared to order an extension of the prescribed period. 51 I observe that no factors warranting the making of the application have been identified by the Plaintiff. Such factors were described by McLelland J (as he then was) in Re Fulop Deceased (1987) 8 NSWLR 679 at 681 as being: factors which when added to facts which render the applicant an "eligible person" give him or her the status of a person who would be generally regarded as a natural object of testamentary recognition by a deceased. 52 In any event, it seems to me that the chief (indeed, the only) factor of the foregoing nature which could possibly be relied upon by the Plaintiff is the fact that she was treated by the Deceased as a daughter rather than as a granddaughter. 53 For completeness, I would observe that, even if (contrary to the various conclusions which I have already expressed) I were to be satisfied, first, that the Plaintiff had been left without adequate provision for her proper maintenance; second, that an order should be made for the extension of the prescribed period; and third, that there are factors warranting the making of the application, I would be prepared to make an order for provision only by way of a very modest legacy. Any such legacy would be in an amount which would enable the Plaintiff to have some small fund to meet medical and counselling expenses and to provide for unexpected contingencies, also possibly to replace her motor vehicle. I certainly would not even consider the Plaintiff receiving a legacy in an amount which would enable her to purchase a residence of her own. The circumstances in which an adult child (let alone an adult grandchild) can look to the estate of a parent for the acquisition of a residence are very rare, indeed. 54 Further, any order for provision an entitlement to which the Plaintiff might otherwise have established must be approached in the light of the competing claim of the principal beneficiary, her own son James. It will be appreciated that any order for provision which might be made in favour of the Plaintiff would have the practical effect of requiring the sale of the Kearsley property, and thus of depriving James of the benefit which his great grandmother was desirous that he should receive. He would in consequence be left without a home. 55 Whilst, as a matter of practical necessity, it may be that the Kearsley property must be sold in order to meet the costs of the Defendant, nevertheless, I would not be disposed to make an order for provision in favour of the Plaintiff which would, of itself, require the sale of the Kearsley property. 56 For the foregoing reasons, the claim of the Plaintiff will be dismissed. 57 I make the following orders: 1. I order that the summons be dismissed. 2. I order that the Plaintiff pay the costs of the Defendant, such costs to be on the party and party basis. 3. I order that the Defendant be entitled to retain out of the estate of the late Beatrice Mary Ann Hunt ("the Deceased") the difference between the costs of the Defendant on the indemnity basis and the amount of the foregoing costs which he may recover from the Plaintiff. 4. The exhibits may be returned.

Sherwood v Public Trustee

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Cases Cited (8)