Woodward v Holmes

SOLICITORS : Christopher Levingston & Associates for plaintiff Hughes & Taylor for defendants

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

3123/08 HELEN MARION KATHERINE WOODWARD v BRIAN GEORGE HOLMES & ANOR

1 HIS HONOUR: This is an application under the Family Provision Act 1982 in respect of the estate of the late Alan Glen, who died on 1 February 1989 aged 79 years. He was survived by his wife Marjory, who died on 11 September 2007. They had two children, the plaintiff and the second defendant. The last will of the deceased 2 This was made on 13 January 1982. He appointed the first defendant, a friend, who was a solicitor, as executor. He gave his house for life to his wife and on her death the house was to pass to the two children equally. The estate of the deceased 3 The estate consisted of the deceased's home at Fairlight and a small quantity of shares. The only remaining asset is the house, having a present agreed value of $1.1 million. 4 The costs in regard to this matter are as follows: the executor's costs $ 8,000 the second defendant's costs $32,917 the plaintiff's costs $89,950

Family history 5 The deceased was born in 1910 and his wife in 1912. They married in 1938 and their son, Leslie, was born in 1939. The plaintiff was born in 1946. 6 The plaintiff had her usual schooling and towards the end of her schooling she was awarded a scholarship to attend Sydney Teachers College at Sydney University. However, her parents persuaded her to not take it up and she completed a secretarial course instead. Upon completion she worked full time from 1964 until 1982. During that time she spent some years travelling overseas. 7 In 1969 the deceased was retrenched and as a result the plaintiff came home to help. She lived with her parents at Fairlight and she obtained employment when she got home. During the early 1970s the deceased became quite unwell because he started to have fits as a result of an illness which he had. During this time the plaintiff assisted her mother in looking after the deceased. 8 The plaintiff married in 1972 and continued to work until 1982. Her daughter was born in April of that year. In 1987 she had twins, a daughter, Kristen and a son, Ross. Around about this time there were a number of statements made by the deceased to the plaintiff that the house was to eventually pass to the plaintiff. He said that her mother would make sure of it. This was repeated in 1989. The deceased died, as I have mentioned, in that year. Probate was granted and in the course of correspondence between the first defendant and the plaintiff's mother the question came up about the assignment of the brother's interest to the plaintiff. Nothing ultimately happened about it at that stage and the property was registered in the name of the executor. 9 Between 1998 and 2000 the plaintiff's husband suffered various physical and emotional breakdowns and that started to put strain on the marriage. On 8 October 1999 a letter was written by the second defendant to Mr Holmes, who was, of course, the executor of his father's will in these terms: "Dear Brian, Following our telephone conversation yesterday, I want to place certain matters on record. Upon the death of my father his will directed that the family property at 60 Griffiths St, Fairlight, N.S.W. 2094 should, on the death of my Mother, become jointly owned by me and my Sister, Helen Woodward. My Mother, at the time and presently, wished that the property should pass upon her death to my Sister. She discussed this with me many years ago and I agreed to respect & honour her wishes. I have fully discussed this with my Wife, Mrs Lieselotte Glen who also agreed that my Mother's wishes were to be respected and honoured. This is of additional importance if I were to predecease my Mother. Naturally my Mother will be the sole owner and continue to reside at Fairlight for as long as she wishes. The title of the property, upon her death will then pass to Helen. Your care of & involvement with my family over many years is greatly appreciated. With best wishes I remain Yours sincerely, (signed Leslie Glen and Lieselotte Glen) cc Mrs H Woodward" 10 In January 2000 the plaintiff and her family moved to Uralla and there was a further event in 2001 when her husband suffered a back injury. The marriage broke down in 2001 and the parties separated in 2002. Eventually in 2005 the plaintiff came back to the Fairlight property to live with her mother. She cared for her until her mother's death on 11 September 2007. 11 At a time which is slightly in dispute but probably around June 2007 the second defendant indicated to his sister that he had changed his mind about giving his share of the Fairlight property to her. According to him this was because circumstances had changed. The plaintiff's mother had died on 11 September 2007 and the executor, Mr Holmes, sought the second defendant's view as to what was then to happen. He referred to the fact that he had withdrawn his agreement for the share of the Fairlight property to go to his sister. Thereafter the dispute escalated and there was solicitor's correspondence requiring the transfer of the house into joint names and threatening proceedings. This was in April 2008. Thereafter the plaintiff sought advice immediately from a local community centre solicitor and by May 2008 she had obtained a solicitor. Various advice was obtained and the summons was filed on 5 June 2008. Extension of time 12 The application is, of course, well out of time. Because the application is out of time it is necessary for the Court to consider s 16 of the Family Provision Act which allows an application to be made notwithstanding it is out of time. There are a number of cases which refer to the principles to be applied in an application for extension of time. In Re Guskett (deceased) (1947) VLR 211 the following was said: "It is necessary for the applicant to make out a case there will justify the grant of the intelligence sort. He is to show reasons why his failure to apply within the time allowed should be excused. Every case will have to be dealt with on its own facts but it would seem necessary for the applicant to satisfy the Court that the circumstances are such as to make it unjust for him to be penalised for being out of time. As moreover he is seeking an indulgence he should apply promptly for an extension of time."

13 His Honour Young J in several cases dealt with the principles governing applications to extend time under this Act. In Massie v Laundy (unreported NSWSC, 7 February 1986) he indicated that when looking at "sufficient cause" under section 16 (3) of the Act the factors which one looks at include the following:

(a) is the reason for making a late claim sufficient? (b) will the beneficiaries under the will be unacceptably prejudiced if the time were extended? (c ) has there been any unconscionable conduct on either side which would enter into the equation? 14 Apparently he also accepts a view which was expressed by his Honour Needham J in Fancett v Ware (unreported NSWSC, 3 June 1986) that there is no purpose in extending the time with respect to a claim which must fail. In Phillips v Quinton (unreported NSWSC, 31 March 1988) Powell J when considering the matter at the substantive hearing leaned to the view that a plaintiff seeking an extension of time under the Testator's Family Maintenance Act must now demonstrate not merely a reasonable prospect but at least a strong possibility of obtaining substantive relief. That view was not accepted by Hodgson J in Basto v Basto (unreported NSWSC, 8 September 1989). 15 In De Winter v Johnstone, a decision of the Court of Appeal on 23 August 1995 Powell J referred to this matter and in particular the fact that nowadays the application for extension of time is invariably dealt with at the time of the application for substantive relief. He said at page 23: "In such a case, so it seems to me no extension of time ought to be granted unless it be established (inter alia) that the applicant for an extension of time would, in the event of that extension being granted, be entitled to an order for substantive relief." 16 His Honour Sheller JA considered that it was only necessary to show that the application was not bound to fail. Cole J seems to have adopted the party's approach of looking at the strength of the plaintiff's case. 17 I turn to the explanation for the delay in bringing the proceedings. It will be plain that there was a change in the position on the part of the second defendant. This became clear to the plaintiff, on her evidence, shortly before the death of her mother in 2007. Her brother put it at 2006. Given the matters I will mention later this does not have any consequence as it was before her mother died and the explanation in respect of that period is I think sufficient. In respect of the later period there is an adequate explanation for the delay between the time when she found out about her brother's change in position and the commencement of the proceedings. The delay was caused mainly by the need to get advice and the effect that her illness had upon her decision-making ability. Prior to this event it is clear that the plaintiff did not even see her father's will. She believed that her mother owned the house and that her brother had agreed that she would receive it on her mother's death. This is plainly evident from the letter of 8 October 2009. The letter makes it clear that the arrangement between Leslie and his mother went back to just after the death of the father. 18 There has been criticism of the lack of explanation for the period between 1989 and 1999. However, the plaintiff did not know she had an interest back in 1989 and it was natural for her to assume that her mother should have the property until she died. The plaintiff's only interest or expectation was as to what would happen once the mother died. 19 In these circumstances it was quite natural for her not to raise the question. I am, thus, satisfied on the explanation for the delay. There was no unconscionable conduct or prejudice, so I propose to extend time. Eligibility 20 The plaintiff is an eligible person being a daughter of the deceased. In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following:- "The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."

The plaintiff's situation in life 21 The plaintiff is 63 years of age, separated, with three children. Her daughter, Julia is 27 and her twins, Kristen and Ross, are aged 22 years. They do not reside with her but have some difficulties to which I will refer. Her income is a disability pension of $575.80 per fortnight and interest of $112 per fortnight. Her expenses are currently $592 per fortnight. There is a self-contained flat at the house which could be let for $240 per week but it is not let at the moment. So far as her immediate asset position is concerned, she has the following:

(a) A Nissan Pathfinder $8,000 (b) Cash held by her solicitor $145,185 (c ) St George Bank $100,785 (d) Shares $14,000 (e) Fixed deposit $10,000

Total $277,970 22 She also holds three amounts of $10,000 in fixed deposits for her children. Those funds came from her mother's estate and were left to the children under her mother's will. 23 Her share of the estate after selling expenses and the defendant's costs would be in the order of $516,000. She has a present liability for her costs of $89,950. She has paid her family law costs to date but may have future costs if she continues with the present Family Court proceedings. 24 The other assets which she has is her claim for a property settlement against her former husband. So far she has received $94,000 and $170,000 on account of her entitlement and that sum is now reflected in her present assets. In that property settlement there has been a sale of a block of land with the proceeds being shared equally. The remaining distributable property and resources are as follows:

Estimated value Uralla property $600,000 Contents of the Uralla property $20,000 Cattle, tools and cuts and appliances $24,000 Nissan Pathfinder 1998 model $8,000 Toyota Landcruiser 1985 model $2,500 Phillip's superannuation $9,500 Total $664,000 25 The marriage was for 29 years and the three children are adults. There would be little likelihood in the circumstances for there to be any need for spousal or child maintenance. 26 If there was an equal distribution, the plaintiff would be entitled to $332,000 less the $170,000 already paid, a sum of $162,000. Whether that would be the outcome is uncertain as I do not have all the information to assess the result and, in particular, I do not have evidence as to the contributions to the matrimonial home over 29 years of marriage. 27 The plaintiff's husband has recently received funds from his mother's estate. At the moment he has received $619,800 and may share in another $200,000. 28 Another unknown in estimating the plaintiff's entitlement is the weight to be given to her interest in remainder in her father's property which she had during the latter part of her marriage. Having regard to those facts and the likelihood she will have to pay the unknown future costs of the family law proceedings, I am not satisfied that she has any claim of substance left in these proceedings. I should make it clear the proceedings are defended and her husband makes it clear that he is not going to pay any more unless ordered to do so by the court. 29 The plaintiff has a number of medical problems. She currently suffers from reactive depression, post-traumatic stress disorder and disrupted sleep patterns. She was told she needs surgery to rectify muscular tearing and organ prolapses resulting from the birth of her twins and which has been exacerbated by heavy lifting and farm work. He also has a prolapsed bladder. These have been ongoing problems for many years and so far she has not done anything about these but wishes to do so in due course. She currently is on medication for her reactive depression and she also has congenital bad eyesight requiring glasses and annual consultations with an ophthalmologist. She has problems with her teeth and needs some dental work. She currently, because of these problems, cannot seek employment. She is hopeful that she might be able to seek to have her skills updated and do some administrative work or work as a retail assistant. Given her age, although what she has hoped to do is good to see, I do not know that on balance she is likely to obtain meaningful employment. 30 There was no substantial provision for the plaintiff during the lifetime of the deceased and she had a good relationship with the deceased. The plaintiff and her husband helped with the maintenance of her father's property over the years and she assisted him in his declining health along with care provided by her mother. 31 It is also necessary to consider the situation of others having a claim on the bounty of the deceased. The only such person in this case is the second defendant. He is a general surgeon in private practice, now practising part-time and is in a de facto relationship. His partner has a 13 year old daughter and he pays her private school fees. He has a 36-year-old son who he occasionally assists financially. He has not put before the Court any evidence of his financial circumstances or of his relationship with the deceased. In these circumstances the Court can assume that he does not wish the Court to take these matters into account on this application. Discussion 32 It is necessary to see how the plaintiff says she has been left without adequate and proper provision for her maintenance, education and advancement in life. 33 The plaintiff asks she receive the whole of the property instead of a half share. She wishes to remain in the house and increase her income by letting the flat. She has also asked for a fund to cover living expenses and some funds totalling $28,800 to cover the costs of a new car and some repairs to the house. That is an appropriate request. 34 So far as her living expenses are concerned she receives sufficient income at the moment to cover those expenses with some left over. 35 She could clearly afford the $28,800 of expenses if her living arrangements were properly resolved. 36 The defendant suggests that she could obtain adequate accommodation in a two-bedroom unit in the area which might be purchased, on the evidence, for an average of $485,000. 37 Plainly with her present capital and share of the estate she could purchase such a unit, pay $24,000 for a car, the costs of this application and all the expenses such as stamp duty and legal fees. She would then be left with about $150,000. The figures in this calculation are as follows:

Plaintiff cash $269,970 Costs $130,867 Balance $139,103 Car $24,000 $115,103 Share of estate $537,500 Balance $652,603 Unit costs and stamp duty and legal fees $500,000

Total $152,603 38 In these circumstances the defendants submit no need is demonstrated and the proceedings should be dismissed. They refer also to the principle that a testator is not expected to provide a home for an adult child. The principles in this regard were recently dealt with by Gzell J in McGrath v Eves [2005] NSWSC 1006. Gzell J referred to the Court's approach to the question of moral duty when considering claims by children to be provided with funds for a house. He said: "67. When it comes to children, as Young J observed in Shearer v The Public Trustee, NSWSC, unreported, 23 March 1998, it has never been said by any Court that the community expects a mother to leave her children in a position to have a house of their own. That observation applies equally to a father. And in Gorton v Parks (1989) 17 NSWLF 1 at 7, Bryson J pointed out that there is no special principle that able-bodied adults earning a living have no claim, his Honour pointing out that such a proposition in relation to resources of any size was quite erroneous. 68. In Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419 at [109] - [110], White J having referred to this passage, went on to observe that there was no rule to the effect that proper provision for an adult and presently able-bodied child did not extend to providing him or her with a house or money to buy one. His Honour noted that instances in which this have occurred included Re Buckland, deceased [1966] VR 404 and Ogden v Green [2--3] NSWCA 352. 69. White J's decision was upheld by the Court of Appeal in Lloyd-Williams v Mayfield [2005] NSWCA 189. In the course of his judgement, Bryson JA at [31] pointed out that there were features to the case that were rarely encountered in claims under the Family Provision Act 1982 and rarely encountered together. First, the value of the shares designated as notional estate was very large in comparison with the estate is ordinarily encountered. Secondly, because the appellant was otherwise amply provided for, the further provision ordered by White J could have no adverse effect on her well being. Thirdly, the applicant did not have any need in terms of lack of present provision for necessities and amenities of life on an ordinary scale of needs as understood in the community generally. 70. It was submitted that Mayfield was distinguishable by the absence of these features in instant circumstances and because the appellant in Mayfield had filed no financial evidence had put forward no competing financial or other needs for the Court to consider. 71. And there are differences of fact between Mayfield and the present case. But they do not have effect central proposition that there is no rule to the effect that proper provision for an adult and presently able-bodied child does not extend to providing him or her with a house or money to buy one. That proposition was not criticised by the Court of Appeal. Indeed, at [32] Bryson JA observed that it was open to White J and altogether appropriate to look well beyond needs when interpreting and applying community standards to decide what provision that Court ought to order."

39 This case itself is also not the usual case in that there are no competing needs I have to consider. 40 The plaintiff suggests that she should remain in the present place for a number of reasons. Some of them are related to the area such as friendships and research work which she does in the Manly area. This would not necessarily be lost by a move. The more important reasons she has expressed are as follows: 41 She has three dogs, aged 10 years and another three year. Normally they could not be accommodated in a flat or a unit. 42 She feels secure, comfortable and happy living in the family home. She says that she is much less stressed and anxious there, in an area where she grew up and which she knows and she finds that it is a relief from the harshness she experienced at Uralla in the drought. 43 She enjoys maintaining and renovating the house and looking after the gardens, which she finds therapeutic. She wants to redecorate the home and do some work, such as sewing curtains. She has located a good general practitioner who can help her recover from her operations. 44 She also would like to be able to accommodate her daughters at Fairlight. Her elder daughter, Julia, has an infant son. Julia is working and, according to her mother, may be glad to have her assistance in raising her grandson at her home. The younger daughter currently shares with the elder daughter and pays rent and, like most young people in that situation, they are struggling. In addition, the younger daughter has received radiotherapy and has been treated for some form of cancer. She is in her final year of study at Sydney University and wants to learn to drive. The plaintiff hopes that her daughters would be able to help and come to live with her at least on some part-time basis which would assist her recover from operations which she intends to have. She says the area is convenient to transport because there is a free bus which stops outside her house and takes her to Manly. She also wants to have a room where her son can stay if he comes back from Armidale from time to time where he is currently studying. 45 Te other advantage of her receiving the property is that she will be able to rent out the self-contained flat for $240 per week and this would help cover the extra costs, which are private health cover and dental work. 46 The feelings the plaintiff expresses are natural for a 63-year-old woman who suffers from a number of medical conditions. Moving house is a stressful experience at that age and her desire to be able to extend accommodation to her children in the circumstances of this estate are, in my view, quite reasonable. The children may not avail themselves of it on a permanent basis but I think in ordinary family life with grandchildren it would be a help to all concerned. 47 In my view the plaintiff has not been left with adequate and proper provision for her advancement in life and she should receive a bequest of the whole of the house. She should, however, pay the defendants' costs on an indemnity basis because the defence of the proceedings was entirely proper. She will have to pay her own costs. 48 In the circumstances I do not need to deal with the application to cap the plaintiff's costs. The only remark I would make is that on that aspect it was a pleasure to see such well-drawn affidavits in her case. 49 The orders that I make are as follows:

1. In lieu of the provision in clause 3 of the will of the deceased for Leslie Frederick Glen and Helen Marion Katherine Woodward that the property referred to in that clause be held for the plaintiff absolutely. 2. The defendants' costs on an indemnity basis to be paid by the plaintiff. 3. The costs in (2) above are to be paid prior to or contemporaneous with the transfer of the property to the plaintiff. 4. The exhibits can be returned

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