Slack-Smith v Slack-Smith

Gorton v Parks (1989) 17 NSWLR 1 Kleinig v Neal (No. 2) [1981] 2 NSWLR 532 CASES CITED : Palmer v Dolman [2005] NSWCA 361 Re Fulop (Deceased) (1987) 8 NSWLR 679 Singer v Berghouse (1994) 181 CLR 201

Alan Richard Slack-Smith (Plaintiff) PARTIES : Victor John Slack-Smith (First Defendant) Phillip Charles Slack-Smith (Second Defendant)

COUNSEL : L Ellison SC (Plaintiff) D Williams (Defendant)

SOLICITORS : Lee & Lyons (Plaintiff) Collaery Lawyers (First and Second Defendants)

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION FAMILY PROVISION LIST

2008/278853 ALAN RICHARD SLACK-SMITH v VICTOR JOHN SLACK-SMITH & ANOR JUDGMENT 1 HIS HONOUR: This is an application pursuant to s 7 of the Family Provision Act 1982 ("FPA") by an adult son that provision be made for him out of his mother's estate, together with an application for an extension of time in which to make that application. 2 The plaintiff, Alan Slack-Smith, was born in 1945. He has two brothers, Victor (the first defendant) who was born in 1939 and Phillip (the second defendant) who was born in 1944. For convenience, I will refer to each of them by their Christian names. 3 The parties grew up with their parents at "Rosewood" which was a farming property about 36 kms from Burren Junction in northwest New South Wales. The property, which was about 2250 hectares, was run as a mixed farm. 4 Alan and his brothers were educated at Barker College in Sydney. Alan left school in 1961 and returned home to work on Rosewood with his parents. He stayed there for 31 years until 1992. He married in 1967 and he and his wife have three children, all of whom now live independently. 5 In about 1968, Alan agreed to buy Rosewood from his parents. The purchase price was $122,000. He paid half that amount to his parents and, by agreement, the remainder was treated as a loan owing by him and he paid interest to his parents on that loan of $1,480 per year. Alan says that he had understood at the time that that debt would be forgiven on the death of his parents. However, as things turned out, that understanding was mistaken. 6 Victor also worked on the Rosewood property prior to its sale to the plaintiff. Following the sale, he purchased another farm at Burren Junction where he lived with his wife until 1982. Phillip went to university in Armidale after he left school and never returned to Rosewood. He went to work in the United Kingdom in 1969 and returned to Australia in 1973. 7 Following Alan's purchase of Rosewood, his parents moved to a cottage on the property. They stayed there until 1973, when they moved to a house in Tamworth which had been purchased for their use by Phillip following his return from the United Kingdom. 8 There is a dispute about the circumstances in which the parties' parents left Rosewood. According to Phillip, their parents were poorly treated by Alan and his wife. Also according to him, their departure from Rosewood was acrimonious. He says the day his parents moved, he went to visit them was told to leave the property or the police would be called. He also gave evidence that his parents' furniture was put outside the cottage the day the removalists arrived. Victor says that he was told by his parents that they were forced out of the cottage and that they even had to seek advice from the police when Alan tried to prevent them from taking their furniture. This evidence is disputed by Alan. 9 The parties' father died in 1980. By his will, he left a life estate to his wife. Following her death, he left a bequest to Phillip of $10,000, with the residue (which was approximately $50,000) to be divided equally between the 3 sons. 10 Shortly after the death of their father, the parties' mother moved in with Phillip who, at that time, was living on the Sunshine Coast. In 1985, she moved with Phillip and his wife to Canberra and continued to live with them until 1999, when she moved into a nursing home. There is a dispute about whether Alan continued to pay interest during this period. He says that he did. Phillip says that he did not. There is, however, one letter dated 21 January 1992 to Alan from his mother in which she says "PS Thank you I received the cheque" and it is hard to know what that cheque would have been for if not for the interest. For that reason, I think that the likelihood is that Alan did continue to pay interest following his father's death.

11 Alan remained on Rosewood until 1992 when it was sold for $504,000. An amount of $60,250 was deducted from the sale price and paid to the estate of his father as repayment of the outstanding loan. Alan and his wife then bought a property of about 100 hectares near Toowoomba in Queensland where he continues to work as a farmer and grazier. 12 The parties' mother made her last Will on 30 November 1993. By that Will, she appointed Phillip and Victor as executors and left her estate to be divided between the two of them equally. Her Will recorded that: "I have not made equal provision from my son, ALAN RICHARD SLACK-SMITH , because of family considerations concerning matters in his relationship with my sister, MARY ELIZABETH SLACK-SMITH ." 13 It is very difficult to know what those family considerations were. Alan said he does not know what his mother was referring to. The only thing that he could think of was a request he made to be an executor of his uncle's will and that request having upset his aunt Mary. Neither Victor nor Phillip could shed any real light on the matter. 14 The parties' mother died in 2004. The principal asset of her estate is a unit in Manly, which is currently valued in the vicinity of $750,000 to $800,000. The legal fees of the defendants are estimated at approximately $36,000 and Alan's legal fees are estimated at $74,000, leaving a net estate of $650,000 to $700,000, from which it is necessary to deduct the costs of sale. The unit at Manly was bequeathed to the deceased by her sister's husband (who also happened to be her husband's brother). That gift was subject to a life estate given to her sister, Mary. Mary lived in the flat until 2006 or 2007 when she moved into a nursing home. She died in November 2009 at the age of 102. 15 From the time that the parties' parents moved from Rosewood in 1973, Alan had limited contact with them. I accept that there was tension between them before the move and that that tension is likely to have precipitated the move. But I do not think that there was a total breakdown in the relationship as Phillip asserted in his affidavit evidence. Alan had limited contact with his parents, and no personal contact for a number of years following their move. However, his father included him in his will; and, indeed, treated him and Victor in the same way. His mother wrote to him on occasions and, when she did so, it was in affectionate terms. She remained in contact with his children. Alan went to his mother's 80th birthday which was held at the unit in Manly, where his aunt Mary lived. When he was told in 2001 that his mother was about to die, he went to visit her in the nursing home. He made a second visit there in 2003 to see her. He is someone who has lived an austere life; and I think that that is reflected in the way that he dealt with his parents.

16 When Alan found out the terms of his mother's will, he sought advice (in mid 2005) on a possible claim against the estate. He was advised at that time that a claim had to be brought within 18 months of his mother's death. His solicitors wrote to the solicitor acting for the estate giving notice of a possible claim. Nonetheless, he chose to delay bringing that claim until after Mary had moved from the Manly apartment. That was in circumstances where Phillip had written to him saying that the main concern in dealing with their mother's estate was to avoid upsetting Mary. It was for that reason that Phillip and Victor had not even tried to get a valuation of the Manly unit for probate purposes. 17 None of the parties is well off. 18 Alan, who is 65, owns the property near Toowoomba which is worth approximately $800,000. It currently carries 67 head of cattle, although until recently it was very badly affected by the drought. In 2008-2009, his taxable income (including "climate change" payments from Centrelink) was approximately $29,000 and that of his wife approximately $6,000. He expects their taxable incomes to be about the same this year. However, he will not receive Centrelink payments next financial year. He currently works approximately 7 to 20 hours per week on a casual basis at the Toowoomba sales yard and has an income from that of approximately $120 to $344 per week. He owns cattle which are worth in the order of $30,000, two motor vehicles worth approximately $14,000 and some farm machinery of limited value. He has superannuation to the value of approximately $40,000 and savings of approximately $15,000. He is in good health and he describes the health of his wife as being fair. 19 Phillip is 66 years old. He has a house in Canberra worth approximately $850,000 which is the subject of a mortgage of approximately $430,000. He also has an investment property worth approximately $355,000 with a mortgage of $164,000. He has superannuation of approximately $13,000 and credit card debts of approximately $35,000. He and his wife own two motor vehicles worth approximately $10,000. They run their home as a guesthouse and earn income from that. Phillip also earns income from delivering newspapers. His taxable income for the last financial year was approximately $47,000. His wife receives some superannuation from France. He is in reasonable health, but his wife was recently diagnosed with motor neurone disease. 20 Victor is currently 71 years old. He and his wife own their home in Tamworth which is valued at approximately $273,000. In addition, they have cash of approximately $297,000 which is invested with their eldest son and which generates an annual income of approximately $9,000. They also have a motor vehicle valued at approximately $2,500. Victor receives an aged pension of $453 per fortnight and his wife receives a disability pension of a similar amount per fortnight. He is in reasonable health, but she is not. 21 Section 16(2) of the FPA gives the court power to extend the time in which an application may be made. However, under subsection (3), it must not do so unless, relevantly, sufficient cause is shown for the application not having been made within time. 22 In my opinion, the time for making the current application should be extended until the date on which the summons was filed - that is, until 27 May 2008. No part of the estate has been distributed. Indeed, the property which is the only real asset of the estate has not been sold and it could not have been sold until after Mary's death in 2009. Consequently, there can be no prejudice in granting an extension of time. There were very good reasons for Alan not bringing the application before he did. He did not want to cause any concern to Mary. Whether that concern would have been justified or not is beside the point. 23 It is well established that consideration of a claim under s 7 of the Act involves a two stage process. In Re Fulop (Deceased) (1987) 8 NSWLR 679 at 680, McLelland J explained the process in these terms: "In an application for provision under the Family Provision Act 1982, s. 7, the ultimate function of the Court is to determine first, whether the provision (if any) made in favour of the plaintiff by the deceased either during his or her lifetime or out of his or her estate (including, where applicable, any provision arising under the laws relating to intestacy), is inadequate for the proper maintenance, education and advancement in life of the plaintiff, and secondly, if so, what (if any) provision or further provision ought to be made out of the estate for those purposes. In each case the Court has regard to the circumstances at the time of the determination. In making these determinations, the following principles apply: first, the Court should not interfere with the dispositions in the will (or, where applicable, arising under the laws relating to intestacy) except to the extent necessary to make adequate provision for the plaintiff's proper maintenance, education and advancement in life, second, the expression 'proper' in this context connotes a standard appropriate to all the circumstances of the case, and thirdly, the Court may take into consideration any matter (whether existing or occurring before or after the death of the deceased) which it considers relevant in the circumstances, including (a) the nature and quality of the relationship between the plaintiff and the deceased (b) the character and conduct of the plaintiff (c) the nature and extent of the plaintiff's present and reasonably anticipated future needs (d) the size and nature of the estate of the deceased (e) the nature and relative strength of the claims to testamentary recognition by the deceased of those taking benefits under the will of the deceased (or where applicable under the laws relating to intestacy) and (f) any contribution, financial or otherwise, direct or indirect, by the plaintiff to the property or welfare of the deceased."

See also Singer v Berghouse (1994) 181 CLR 201; Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191. 24 Several additional points should be mentioned in this context. 25 First, no special principle applies to the claim of an adult son: Gorton v Parks (1989) 17 NSWLR 1 at 7 per Bryson J; Wheatley v Wheatley [2006] NSWCA 262. The question is whether adequate provision has been made for the claimant's proper maintenance, education and advancement in life. The circumstances of an adult son, and his relationship with the deceased parent, will be different from, for example, the circumstances and relationship of a child; and for that reason an adult son is likely to be treated differently. But that is because his circumstances, and his relationship with the deceased parent, are different. It is not because he is an adult son. 26 Second, the fact that the parent and child saw one another infrequently or that there existed a degree of friction between them is not decisive: Kleinig v Neal (No. 2) [1981] 2 NSWLR 532 at 540 per Holland J; Palmer v Dolman [2005] NSWCA 361 at [107] - [110] per Ipp JA (with whom Tobias and Basten JJA agreed); Wheatley v Wheatley [2006] NSWCA 262. It is just one of the matters that needs to be considered in considering what order, if any, should be made. 27 Third, while the court will consider explanations given by the deceased in the will or elsewhere for excluding a particular person as a beneficiary, those explanations do not relieve the court from engaging in the enquiry required by the Act. All they do is shed light on the relationship between the deceased and that person. It is that relationship which is important, not the fact that the deceased thought that it was appropriate to exclude a particular person. In some cases, the reasons given by the deceased may indicate that the deceased must bear part of the responsibility for the breakdown in the relationship between them: see Wheatley v Wheatley [2006] NSWCA 262 28 Applying these principles, in my opinion, the deceased failed to make adequate provision for Alan. It is clear that Alan faces significant financial hardship and I accept his evidence that, at the moment, he lives a day-to-day existence and that he has a real concern about his ability to continue to meet his financial obligations. It is true that the hardship he is under could be alleviated to a considerable extent if he were to sell the property on which he now lives. However, he has worked on the land for almost his whole life and I do not think that, in considering whether adequate provision has been made for him, he should be expected to sell his current farm in the near future. In my opinion, Victor and Phillip, in particular, have strong claims on their mother's estate. However, I do not think that the estate is so small that those claims would justify making no provision at all for Alan. 29 I have already indicated that I accept that Alan's parents were unhappy living at the cottage on Rosewood and that a certain amount of tension developed between him and his wife on the one hand and his parents on the other. But tensions of those sorts are not uncommon between parents and adult children. They may cause each of them to behave in ways that are later regretted and denied or forgotten. Alan had limited contact with his mother after his parents left Rosewood; and that, in part, may be explained by the tensions that existed while both of them were living at Rosewood. But, as I have explained, the relationship with his mother remained cordial if distant; and I do not think that the relationship Alan had with his mother disentitles him from making a claim. 30 Finally, no one could explain the reason the deceased gave in her will for not making any provision for Alan. In those circumstances, I do not think that any weight should be placed on that statement. 31 The question, then, is what order should be made. In some cases, it is possible to answer that question by focussing on the needs of the claimant. However, I do not think that that is possible in this case. In my view, the positions of Phillip and Victor are critical since any order made in Alan's favour will reduce the amount that they inherit; and the estate is not so large that any order in Alan's favour will not have a significant effect on the adequacy of the provision that has been made for them. 32 In my opinion, both Victor and Phillip - but particularly Phillip - have strong claims on the estate. Phillip provided accommodation to his parents for a number of years. That, no doubt, explains why his father made special provision for him in his will. After his father died, Phillip continued to look after his mother for a further 19 years. In my opinion, having regard to his borrowings and age, his financial position is precarious. Moreover, his wife was recently diagnosed with motor neurone disease and the likelihood is that she will need substantial care in the future. Victor's position is not as bad. To a large extent, though, that is because he has done what Alan does not want to do. He has bought a modest house in a country town and supplements the income he receives in the form of a pension with interest he earns on money that he has lent to his son. Moreover, Alan had the benefit of a favourable loan from the parties' parents which Victor did not have. In any event, any order which affects Victor will have an equal effect on Phillip. 33 Taking these matters into account, I think an order in Alan's favour of approximately $100,000 is appropriate. On the assumption that the net value of the estate is approximately $675,000, that amounts to approximately 15 per cent of the value of the estate. That amount is sufficiently large to assist him to meet the costs of operating his farm over the next few years. On the other hand, it is not so large as to leave Phillip and Victor under-provided for having regard to the amount that they otherwise would have inherited. 34 Given that the value of the Manly unit is uncertain, I think it would be preferable to order that Alan receive a percentage of the net proceeds of sale rather than a legacy. Having regard to what I have said, that percentage should be 15 per cent. 35 The plaintiff's costs should be paid by the estate. The defendants should be indemnified in respect of their costs by the estate.

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