Stephens v Perpetual Trustee Company Ltd

PARTIES : Judith Jane Stephens OAM (Plaintiff) Perpetual Trustee Company Ltd (Defendant)

COUNSEL : P.S. Jones (Plaintiff) M. Sneddon (Defendant)

SOLICITORS : Benjamin & Robinson (Plaintiff) Bartier Perry (Defendant)

1 These proceedings have been settled by a compromise reached between the parties shortly after the trial commenced. All that is required in order to effect the settlement is that the Court give its approval under s 31 of the Family Provision Act 1982 (NSW) to the release by the Plaintiff of such rights as she may have to make a claim under the Act against the estate of which the Defendant is Administrator. 2 Normally, the giving or withholding of approval for a release under s 31 Family Provision Act (now s 95 Succession Act 2006 (NSW)) would not call for considered reasons for judgment. However, this case raises a question of construction under the Family Provision Act and the Succession Act in circumstances which, though highly unusual, may well arise in other cases so that reasons for judgment may be of some general utility. Facts

3 These proceedings relate to the estate of Jackson Stubbs, to whom I will refer, without disrespect, as Jackson. Jackson was born on 17 August 1993. In November 1993, he suffered horrific injuries in a motor vehicle accident in which both his parents were killed. Jackson's two elder brothers, who were also in the car, escaped without injury. 4 The Plaintiff, Mrs Stephens, was Jackson's maternal grandmother. She immediately assumed responsibility for Jackson's care and Jackson's brothers were taken in by their paternal grandparents. When Jackson was finally discharged from hospital in May 1994, Mrs Stephens looked after him in her home. 5 Jackson was quadriplegic, had severe brain injury, was severely visually impaired, incontinent of urine and faeces, and had a severe swallow and speech impediment. He required constant, extremely high level care. 6 In 1989, Mrs Stephens had started her own business as a life insurance consultant and financial planner. She had an office in Miranda and a shared office in Martin Place. She says that prior to Jackson's accident the business was successful. However, after Jackson's accident, she was unable to devote much time to her business. Eventually, she says, the demands of Jackson's care upon her time became so great that she had to sell her business. 7 In 1994, Mrs Stephens, as Jackson's tutor, commenced proceedings in the Supreme Court claiming damages for Jackson's injuries as a result of the motor vehicle accident. While the litigation was proceeding, the insurer made provisional payments towards Jackson's care and maintenance, totalling some $2M. Even so, there was a shortfall in the costs of Jackson's care of about $250,000, which Mrs Stephens paid out of her own money. 8 In March 2003, Jackson's claim for damages was settled for $15M plus costs. The trial judge approved the settlement and ordered payment out of the judgment of the sum of $305,500 as "Griffiths v Kerkemeyer damages", to Mrs Stephens for her services in caring for Jackson up to the time of judgment. The schedule of damages provided to the Court for approval of the settlement showed an amount of $238,000 for future care, to be provided by Mrs Stephens. 9 The Office of the Protective Commissioner ("OPC"), which had by then been appointed to manage Jackson's financial affairs, has paid Mrs Stephens only $283,355 in respect of the amount of $305,500 which she was to be paid for her care up to the time of judgment. She has received nothing in respect of the amount of $238,000 envisaged in the schedule of damages as payable for care from March 2003 onwards. 10 Mrs Stephens continued to care for Jackson full time in her home until he died in December 2005 aged twelve years. Obviously, Jackson died intestate. The Defendant has been granted Letters of Administration of Jackson's estate, which is presently valued at some $15M. The proceedings

11 In March 2007 Mrs Stephens commenced these proceedings. She claimed payment for her services as the carer for Jackson from 5 March 2003 until Jackson's death. As I have noted, on 5 March 2003 the OPC paid to Mrs Stephens only part of the amount allowed for "Griffiths v Kerkemeyer damages" up until the date of judgment and has paid nothing thereafter. Mrs Stephens put her claim on three alternate bases:

• a contract for services made between her and the OPC as agent for Jackson;

• a quantum meruit for services rendered to Jackson;

• unjust enrichment. 12 There were manifest legal, as well as factual, difficulties in these claims, all of which the Defendant pleaded in its Defence. One of the evident difficulties was proving the oral contract upon which Mrs Stephens relied. I need not dwell upon the difficulties for present purposes. However, upon a reading of the pleadings and the parties' outlines of submissions, it appeared clear to me that:

• there was no dispute that Mrs Stephens had cared for Jackson in a most devoted manner on a full time basis in her own home from the time of his accident until his death;

• Mrs Stephens had given up her career in order to undertake Jackson's care;

• Mrs Stephens had received financial assistance from insurance money payable to Jackson in respect of his injuries prior to settlement of his damages claim and subsequently from the award of damages made in his favour;

• Mrs Stephens had not received any of the money, contemplated in the damages award as payable to her as Griffiths v Kerkemeyer damages, since March 2003. 13 When the trial began, I asked Mrs Stephens' Counsel why a claim on her behalf had not been made under the Family Provision Act instead of the very problematic causes which had been pleaded. Counsel's reply was that Mrs Stephens could not qualify as an "eligible person" within the definition in the Act. I pointed out that this conclusion may not be correct on the agreed facts. The parties then welcomed my suggestion that they be allowed some time to attempt a resolution of the matter. Happily, it did not take them long to succeed in doing so. 14 I subsequently made orders by consent granting the Plaintiff leave to make a claim under s 7 Family Provision Act out of time, making provision for Mrs Stephens out of the estate, and approving a release by Mrs Stephens under s 31 of the Act. Whether a Family Provision Act claim was available

15 It is, unfortunately, not uncommon that cases arise in which children suffer severe injury, receive large awards of damages and die with large estates, distribution on intestacy producing a result which is unexpected or which may be regarded as unjust in the particular circumstances. I have recently dealt with two such cases in the context of applications for a statutory will under s 18 Succession Act 2006, those applications being made in respect of mentally incapacitated children possessed of considerable assets who would die intestate, with unjust results, unless the powers conferred on the Court by s 18 were exercised: see Re Fenwick: Application of J.R. Fenwick; & Re Charles [2009] NSWSC 530; AB v CB & Ors [2009] NSWSC 680 16 The facts of the present case are such that, if Jackson had remained alive until the Succession Act came into force in March this year, Mrs Stephens would have been entitled to apply to the Court under s 18 for a statutory will for Jackson which could have recognised, in its provisions, the personal and financial sacrifices which she has made for his benefit. Does Mrs Stephens, and others who have similar claims on the estates of minors dying before the commencement of the Succession Act, have any remedy under the Family Provision Act? In my opinion, there is a remedy in cases where the facts are similar to those in this case. 17 The Family Provision Act applies in cases where persons die wholly intestate, as well as in cases in which a person has made inadequate testamentary provision. All that s 7 requires in this regard is that "administration" of the deceased's estate has been granted. "Administration" includes both the grant of probate where the deceased died testate and the grant of Letters of Administration where there is an intestacy: s 6. 18 An application under the Family Provision Act may be made "in relation to a deceased person": s 4. "Deceased person" is defined to include "any person in respect of whom administration has been granted": s 6. In all but the most unusual cases, a person "in respect of whom administration has been granted" will be an adult who has died possessed of property or rights to property. However, there is nothing in the Act which restricts its application to the estate of a deceased person who had attained the age of eighteen years. Just as has happened in Jackson's case, if a minor dies intestate owning property of a value which makes it worthwhile for someone to obtain Letters of Administration, administration of the estate may be granted and the pre-condition to an application under s 7 of the Family Provision Act has been established. 19 However, it is to be noted that it is not inevitable that a minor will die intestate. Section 6 of the Wills, Probate and Administration 1898 (NSW) provided that a will made by a minor was invalid except in certain circumstances, one of which was that the Court had given leave to make the will pursuant to s 6A: see now s 5 Succession Act. An application under s 6A Wills, Probate and Administration Act or s 5 Succession Act to approve a will made by a minor as young as Jackson was when he died (twelve years) would be highly unusual but it is possible to conceive of circumstances in which such a will could be approved. A child of twelve years is not presumed to be incapable of forming any rational intention about his or her relationships and their legal consequences. For example, a child who has attained the age of twelve years must consent to his or her own adoption and the consent of the natural parents is no longer required: see s 54(2), s 55 Adoption Act 2000 (NSW). 20 Accordingly, the fact that Jackson died while a minor and, because of his injuries, without the intellectual capacity to give instructions for a will which might have been approved under s 6A Wills, Probate and Administration Act does not mean that the Family Provision Act cannot apply. The question is, therefore, whether Mrs Stephens could qualify as an "eligible person" and, if so, whether there was any real chance of her application succeeding. 21 In my opinion, on the facts alleged in this case, Mrs Stephens could have qualified as an "eligible person" under the definition in paragraph (d), namely: "a person:

(i) who was, at any particular time, wholly or partly dependent upon the deceased person, and

(ii) who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of a household of which the deceased person was a member." 22 As to the requirement in paragraph (d)(i), it is clear that Mrs Stephens undertook the sole responsibility to care for Jackson. She received the benefit of insurance monies in order to do so prior to the award of damages and she received a significant sum out of the award in remuneration for her services as carer. It is reasonable to assume that what she received in this regard she applied, at least partly, to her own needs and support. 23 The insurance money and the award of damages for Jackson's injuries were Jackson's property. Can Mrs Stephens be said to have been "dependent upon" Jackson if Jackson himself did not make any decision that she should receive any of that money? 24 The words "dependent upon the deceased" are of very wide import. As Samuels JA said in Ball v Newey (1988) 13 NSWLR 489, at 491B "'Dependent', in the ordinary sense of the word, means the condition of depending on something or on someone for what is needed. In determining whether that relationship exists, it is relevant to bear in mind what was said by Sankey LJ in Lee v Munro (1928) 98 LJKB 49 at 53; 21 BWCC 401 at 408, that in 'deciding whether or not there is dependency the factors to be considered are past events and future probabilities' ." 25 Up to 5 March 2003, Mrs Stephens had received contributions out of Jackson's money for her care of Jackson. There was a basis for saying that from that time onwards there was a probability that she would receive further contributions for her care of Jackson out of Jackson's money. The fact that Jackson himself could not make decisions about such payments does not make Mrs Stephenson any the less dependent on Jackson's assets and, therefore, dependent upon Jackson. A person may be "dependent" on another even though the latter has made no actual decision to provide financial support or, indeed, even if the latter is positively unwilling to provide support: see e.g. Lee v Munro (1929) 98 LJKB 49, at 52; Potts v Niddrie & Benhar Coal Company Ltd [1913] AC 531; TNT Group 4 Pty Ltd v Halioris (1987) 8 NSWLR 486, at 488-489. 26 It is true that Mrs Stephens claimed in these proceedings that she cared for Jackson pursuant to a contract for services. Such a contract was denied but even if it had been established, there was far more to the relationship between the parties than a simple employer/employee relationship. 27 The existence of a contract for services without more would not normally make the employee "dependent upon" the employer for the purposes of paragraph (d)(i) of the definition of "eligible person". On the other hand, in certain circumstances, the existence of a contract for services would not disqualify the employee as a dependent of the employer. Take, for example, the father who, in order to provide financial support for an adult disabled child who could not otherwise gain employment in the marketplace, employs the child to perform some menial tasks in the father's business. 28 As to the requirement in paragraph (d)(ii) of the definition of "eligible person", it was properly conceded by Counsel for the Defendant that, as Mrs Stephens had been caring for Jackson in her own home since Jackson's discharge from hospital, they were both members of the same household. 29 For these reasons I concluded that there was a proper basis upon which Mrs Stephens could have made a claim for provision under the Family Provision Act and that it was proper to make orders disposing of the proceedings in the terms agreed between the parties.

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