Stevenson v Public Trustee [2007] NSWSC 1464 | Case summary

6286 of 2005 CRAIG JOHN STEVENSON -v- THE PUBLIC TRUSTEE 1940 of 2006 PETER DAVID STEVENSON -v- THE PUBLIC TRUSTEE JUDGMENT 1 HIS HONOUR: These are two proceedings under the Family Provision Act 1982. 2 By summons filed on 15 December 2005, Craig John Stevenson claims an order for provision for his maintenance, education and advancement in life out of the estate and/or notional estate of the late John Cameron Simpson (to whom I shall refer as "the Deceased"). 3 By summons filed on 20 March 2006 Peter David Stevenson claims substantively an order for provision out of the estate and/or the notional estate of the Deceased. 4 At the outset of the hearing on 6 July 2007 an order was made in each proceeding that the two matters be heard together and that the evidence in the one, so far as is relevant, be evidence in the other. 5 The Deceased died intestate on 21 July 2004, aged 80. Letters of administration of his intestate estate were on 22 November 2004 granted to the Public Trustee (who is the Defendant to each of the present proceedings). 6 The inventory of property discloses the following assets, Moneys in bank accounts $68,716 Shares in companies $187,350 1998 Holden Commodore VT motor vehicle $8,700 HCF refund and benefits $170 Other monetary entitlements $10,660 Total $275,597 7 No part of the estate has yet been distributed. The Defendant presently holds in trust the sum of $72,272, (of which $25,940 is income and $46,331 is capital). The assets yet to be realised are 5000 shares in the Commonwealth Bank of Australia, currently valued at $274,050, and 10,000 shares in GWA International Limited, currently valued at $44,100. 8 Accordingly, the present value of the estate is in the order of $390,000. However, it will be appreciated that the income produced by the foregoing shares is liable to income tax of about $14,000 a year, and that capital gains tax will be payable on the realisation or transfer of those shares. In addition, the Defendant is entitled to commission on unrealised assets and is also entitled to certain administration costs and fees. 9 In calculating the value of the estate available for distribution the costs of the present proceedings must be taken into account, since the Plaintiffs, or either of them, if successful, will be entitled to an order for costs out of the estate, whilst the Defendant, irrespective of the outcome of the proceedings, will be entitled to his costs out of the estate. It has been estimated on behalf of the Plaintiff Craig John Stevenson that his costs will total $45,000 and it has been estimated on behalf of the Plaintiff Peter David Stevenson that his costs will total $22,000, whilst it has been estimated on behalf of the Defendant that his costs in respect to the two sets of proceedings, will total $48,000. 10 Accordingly, it is appropriate that I should proceed upon the basis that the distributable estate will be in the order of $260,000 (or perhaps somewhat less). 11 The Deceased had been married a number of times, but was not married at the time of his death. His only child, Carol Hilary (Mrs Collison) is entitled to the entirety of the estate upon intestacy. 12 I shall for convenience, and without intending any disrespect, refer to each of the Plaintiffs and to the beneficiary by their first given names. 13 Craig and Peter are the two sons of Jill Stevenson, who from 1970 until 1983 and again, from 1994 to 1997, was the de facto spouse of the Deceased. Peter (who was born on 5 April 1964 and is presently aged 43) was aged six at the time when his mother commenced the de facto relationship with the Deceased, whilst Craig (who was born on 16 March 1967 and is presently aged 40) was aged only three at that time. At the time when the Deceased and the Plaintiffs' mother separated in 1983 Peter was aged 19 and Craig was aged 16. 14 For the period of 13 years while the Deceased and Mrs Stevenson were in a de facto relationship the Deceased treated the Plaintiffs as if they were his own sons. They, in turn, regarded him as a father figure, although their own father was alive and they still maintained contact with him. The Plaintiffs' parents divorced in June 1971. 15 After the termination of the original period of de facto relationship with Mrs Stevenson, the Deceased, who in the interim had again married and divorced, resumed co-habitation with Mrs Stevenson from mid-1994 to mid-1997. Subsequently, the Deceased resided with Craig and his wife for a period of about five months in the latter part of 2002 and the early part of 2003. 16 The beneficiary, Carol Collison, is the only child of the Deceased and was born of his first marriage, to Eileen Cooze, whom the Deceased married in September 1949. They divorced more than ten years later, in April 1960. In May of that year the Deceased married Jeanne Draycott, whom he divorced in May 1971 (in the year subsequent to his entering into the de facto relationship with the mother of the Plaintiffs). After his separation from Mrs Stevenson in 1983 the Deceased in 1984 married Neryl Finsten, from whom he was divorced in 1992. 17 Throughout the time when Mrs Stevenson and the Plaintiffs resided with the Deceased they maintained a very comfortable lifestyle, which included dining regularly in restaurants, living in commodious residences, travelling in expensive motorcars, and enjoying overseas holidays. The Plaintiffs attended private schools. Until the Plaintiffs went to Sydney Church of England Grammar School their school enrolments were under the surname of the Deceased, Simpson, rather than their own father's surname of Stevenson. 18 Craig married his present wife, Anne Marie, in 1991. They have two children, a daughter aged ten and a son aged eight. 19 Since February 2007 Craig has been employed by the Commonwealth Bank as a team leader in its Agriculture Business Centre, based at Wagga Wagga. His gross salary is $90,000 a year. He has a superannuation entitlement based upon that salary. 20 Craig owns shares worth about $15,000, which have in the last financial year provided dividends of $752. Craig owns a rural estate known as Mowlma, located near Coonamble, which is valued at about $455,000. The primary production business operated on that estate is presently running at a loss, its expenses in the 2006 financial year exceeding its gross income by $15,759. 21 Craig's wife does not work. However, she has a small shareholding which provides her with an annual income of about $500 by way of dividends. 22 Since relocating to Wagga Wagga in April 2007 Craig's residence at Cherrybrook (which is owned jointly by himself and his wife and is worth between $600,000 and $700,000) has been rented for $630 a week gross. Craig provided details of his expenditure, totalling about $92,400 a year (of which $26,000 a year comprises rent of $500 a week for his family residence in Wagga Wagga). 23 Craig and his wife have the following assets: House property situate at and known as 12 Dunraven Way, Cherrybrook, estimated to be valued between $600,000 -700,000 2003 Toyota Prado motor vehicle, having an estimated value of $30,000 1997 Toyota Camry motor vehicle, having an estimated value of $3,000 Mowlma, valued at about $455,000 Furniture and furnishings, of no special value Shares (owned by Craig) worth approximately $15,000 Shares (owned by Anne Marie)worth approximately $6,000 Whole of Life Policy, having a surrender value of $1,4000 24 Craig has a superannuation entitlement worth $80,000, and his wife has a superannuation entitlement worth $30,000. 25 Craig has liabilities totalling about $319,000. The most substantial of those liabilities are a bank loan of $276,000 (owing on a credit limit of $300,000) and a private loan due to Craig's brother Peter of $43,000, in respect to Peter's interest in Mowlma. (Craig purchased Peter's half share for $250,000 in September 2003). 26 Peter, like Craig, had an excellent relationship with the Deceased, not only during the periods whilst his mother and the Deceased were in a de facto relationship, but also after the Deceased and Mrs Stevenson separated in 1983, and to the end of the Deceased's life. 27 Peter is married to Philipa (née Byrnes). They do not presently have any children. 28 Peter is employed by Vision X-ray as a medical ultrasonographer, receiving a gross salary of about $105,000 a year. Philipa is employed by Hewlett Packard as a marketing manager, receiving a gross salary of about $130,000 a year. Peter has superannuation entitlements totalling about $100,000, whilst Philipa has a superannuation entitlement of about $20,000. 29 Peter and his wife own a house property situate at and known as 20 Alexander Street, Manly, to which they ascribe an estimated value of $1,050,000. That house property is subject to a mortgage, presently in an amount of $440,000, which they repay at the rate of $5,353 a month. The other assets of Peter and his wife include a 1992 Range Rover (to which he ascribed a value of $6,000), a Volvo motor car, a Mercedes motor car, a motor scooter (to which he ascribed an estimated value of $2,000), a speedboat (to which he ascribed a value of $20,000) and a collection of guns (worth about $5000). In addition, he and his wife conjointly own the furniture and contents in their residence, to which he ascribed a total estimated value of $20,000, although he has those contents insured for $120,000. His wife owns horses and a horse float. 30 Peter provided details of his other outgoings, which (apart from the mortgage repayments) total about $33,000 a year. 31 Craig and Peter's natural father, David Campbell Stevenson, died on 29 June 1999. Craig and Peter were the two executors, and (apart from legacies totalling $1000) were left the entirety of their father's estate in equal shares. The inventory of property of their father reveals assets totalling in excess of $510,000. 32 The claim of the Plaintiffs must be approached in the light of the competing claim of Carole Hilary Collison, the only child of the Deceased, who upon her father's intestacy is entitled to the entirety of his estate. Carole was born on 12 January 1951 and is presently aged 56. She has been married for more than 30 years to Jeremiah Daniel Collison, who is presently aged 57. They do not have any children. Carole is a data librarian by occupation, presently working three days a week, and receiving an income of $35,000 gross a year. 33 Carole and her husband have the following assets (to which they ascribe the following values), House property situate at and known as 31 Antill Crescent, Baulkam Hills $690,000 Furniture $50,000 Superannuation of husband $720,000 Motor vehicle (owned by husband) $43,000 Shares (owned by husband) $10,000 34 The house property of Carole and her husband is subject to a mortgage, upon which an amount of $150,000 is presently outstanding. Carole's husband owes an amount of $29,000 by way of a car loan, and owes $5,000 in credit card indebtnesses. 35 Carole's husband, who is a general manager by occupation, employed by a general global trading company, receives an annual salary of $130,000, and a car allowance of $18,000. He receives further income, from his shareholdings, in an amount of $2000 a year. 36 Carole's husband purchased from the estate the Deceased's Commodore motor vehicle for the sum of $8000. Carole has a superannuation entitlement which she can access when she attains the age of 60 years. 37 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of each Plaintiff. 38 I have had the benefit of receiving a written outline of submissions and a chronology from Counsel for the respective parties. Those documents will be retained in the Court file. 39 Each Plaintiff asserted that he was an eligible person within paragraph (d) of the definition of that phrase contained in section 6 (1) of the Family Provision Act, in that he had been partly dependent upon the Deceased and had been a member of the same household as the Deceased. Each Plaintiff for a period of thirteen years, from 1970 until 1983 was a member of the same household as the Deceased, and throughout that period was dependent upon the Deceased, at least for accommodation, and, largely, for all other costs and expenses relating to his maintenance and education. 40 The Defendant did not dispute that each Plaintiff was an eligible person in relation to the Deceased. I am satisfied that each Plaintiff is such an eligible person, within paragraph (d) of the foregoing definition. As such, each Plaintiff has the standing to bring his present claim. However, as each Plaintiff is an eligible person only within paragraph (d) it will be necessary for each Plaintiff to establish, as required by section 9 (1) of the Act, that there are factors which warrant the making of the application. 41 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 intestacy of the Deceased, each Plaintiff has been left without adequate provision for his proper maintenance. 42 In carrying out the first stage in the foregoing two-stage process the Court must consider, amongst other matters, the relationship between the Deceased and other persons who have legitimate claims upon his or her bounty. The only person other than the Plaintiffs who has a legitimate claim upon the bounty of the Deceased is the Deceased's only child Carole, who upon his intestacy is entitled to the entirety of his estate. 43 The evidence discloses that the Deceased and Carole had a close and loving relationship. The nature of that relationship was recognised by the Deceased, who in a will made on 9 June 1964 and in a subsequent will prepared in 1975 (but apparently not executed) made significant provision for Carole. 44 It will be appreciated that in the case of Peter the proceedings were instituted after the expiration of the 18 month limitation period provided in section 16 (1) of the Family Provision Act. Pursuant to subsection (2) of that section, Peter seeks an order extending the time in which to make his present claim. 45 It was submitted on behalf of each Plaintiff that the factors which warrant the making of each application are, essentially, that each Plaintiff was, at least for the period of thirteen years during which their mother and the Deceased were in a de facto relationship from 1970 to 1983, and, indeed, for the remainder of the lifetime of the Deceased, treated as if he were a son of the Deceased. In the event that either or both of the Plaintiffs establish that he is entitled to an order for provision for his maintenance, I would be satisfied that the nature of the relationship between the Deceased and each Plaintiff was such as to constitute a factor warranting the making of the present application. 46 Whilst Craig has a primary production business which is currently running at a loss, nevertheless, he owns very significant assets, to a total value of $1,200,000. His liabilities total $319,000. That is, his assets exceed his liabilities by about $900,000. In addition, Craig has a gross income in excess of $100,000. 47 The only needs asserted by Craig were "to reduce our liabilities which would in turn reduce our living expenses" and a desire "to take my children on an overseas holiday in a couple of years". 48 Quite apart from what might be described as the competing claim of Carole upon the testamentary bounty of the Deceased, I am not satisfied that Craig has established, in the light of his own financial and material circumstances (including a substantial salary and assets exceeding his liabilities by almost $1,000,000), that he has been left without adequate provision for his proper maintenance. 49 It should also be observed that the size of the distributable estate is less than one third of Craig's own net assets. Neither do I consider that Craig has identified any needs, let alone quantified such needs. 50 Peter did not identify any specific needs, although he said in his affidavit evidence that any funds which he might receive from the estate of the Deceased would be used to "reduce my mortgage balance which would help in the running expenses of my family. I would also ensure these funds are used for future education costs of my children". 51 Peter and his wife each receive a substantial salary, their gross salaries totalling at least $230,000 a year. They own a house property having an estimated value in excess of $1,000,000 albeit subject to a mortgage of $440,000. Peter expressed a desire that he and his wife should start a family. In that event, it may be assumed that, at least for a period, their total income will diminish. The assets of Peter and his wife far exceed their liabilities. Again, as in the case of Craig, the total value of the net distributable estate of the Deceased is considerably less than the value of the assets owned by Peter and his wife. 52 I am not satisfied that Peter has established that he has been left without adequate provision for his proper maintenance. 53 A very considerable quantity of evidence was directed to the relationship between each Plaintiff and the Deceased. It should be appreciated that an order for provision is not made as a reward for services and good conduct on the part of an applicant. Neither is such an order withheld for punishment on the part of the applicant. 54 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. 55 I have already observed that the claim of Peter was made some two months after the expiration of the period of eighteen months from the death of the Deceased, prescribed by section 16 (1) of the Family Provision Act, and that he seeks an extension of that prescribed period. Peter was served with a notice of claim by the Public Trustee in January 2005, that being only six months after the death of the Deceased, and a year before the expiration of the prescribed period. He responded to that notice of claim by letter dated 12 April 2005. On 11 May 2005 the Public Trustee, in informing Peter that upon the intestacy of the Deceased he was not entitled to share in the estate, said that Peter might be entitled to apply to the Court to make a claim under the Family Provision Act, but that he should "seek your own legal advice in this regard". 56 Peter appears to have done nothing concerning the possible institution by him of a claim against the estate until on 3 February 2006, about two weeks after the expiration of the prescribed period, when he had a telephone conversation with a solicitor. In that conversation he was informed that any application under the Family Provision Act was by that stage out of time, and should have been brought by 21 January 2006. He was given advice concerning the power of the Court to extend the prescribed period. A letter dated 9 February 2006 from that solicitor's firm, confirming the foregoing telephonic advice, was received shortly after that date. Peter then waited until 14 March 2006 before providing his solicitors with a cheque for the filing fee relating to the summons. Ultimately the summons was filed on 20 March 2006. 57 It is all very well for Peter to submit that there is no prejudice to the Defendant in his being two months out of time in instituting the present proceedings. He was aware in May 2005 that he might have a claim under the Family Provision Act, and he discussed the possibility of instituting proceeding in a number of conversations with his wife throughout 2005. It is somewhat unclear whether Peter was aware before his conversation with the solicitor on 3 February 2006 of the existence of the eighteen months limitation period. Nevertheless, there appears to have been no reason why, having been alerted some twelve months before the expiration of the limitation period to the possibility that he might be entitled to bring a claim, he did not choose to do so. 58 Since my foregoing conclusion that Peter has not established that he has been left without adequate provision for his proper maintenance is determinative of his claim, it is not necessary for me to express a concluded view as to whether, if I had otherwise been satisfied that Peter was entitled to an order for provision out of the estate of the Deceased, that entitlement would have been defeated by reason of his application having been brought two months out of time. 59 Even if (contrary to the conclusions which I have just expressed) I were to be satisfied that one or both of the Plaintiffs had established that he had been left without adequate provision for his proper maintenance, I would not have been disposed to make an order for provision which would significantly reduce the benefit to which Carole is entitled upon the intestacy of her father. It will be appreciated that Carole, whilst by no means destitute, is in far less affluent circumstances than either of the Plaintiffs, and that the benefit to which she is entitled upon the intestacy of the Deceased is only a fraction of the net assets of each of the Plaintiffs. 60 In consequence of my foregoing conclusions, the claim of each Plaintiff will be dismissed. 61 Accordingly, I make the following orders:

Stevenson v Public Trustee

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Judgment (13 paragraphs)

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