New South Wales Supreme Court CITATION : Sinclair v Griffiths [1999] NSWSC 491 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 1349/98 HEARING DATE(S) : 20 and 21 April 1999 JUDGMENT DATE : 27 May 1999 PARTIES : Deborah Helen Sinclair as next friend of Nathan Mark Griffiths, Ryan Luke Griffiths and Lauren Rochelle Griffiths (P) Sandra Nicole Griffiths (D) JUDGMENT OF : Master McLaughlin COUNSEL : Mr. M. S. Willmott (P) Mr. P. T. Taylor (D) SOLICITORS : Eric Butler Solicitors (P) Harris Wheeler Solicitors (D) CATCHWORDS : Family Provision; Claim by three children of first marriage of deceased; All plaintiffs were infants at commencement of proceedings; Deceased left entire estate to his second wife; Relevance of financial ability of mother of plaintiffs to support or maintain her children; Only significant asset of deceased was his interest in matrimonial home, of which he and his second wife were joint tenants; Claim against notional estate of deceased; Prescribed transaction constituted by failure of deceased to sever joint tenancy; Small notional estate; Competing claim of widow; Short marriage; Proceedings not commenced within time; Whether Court is precluded by section 16(3) of Family Provision Act 1982 from exercising the discretion to extend time vested in it by section 16(2). ACTS CITED : Family Provision Act 1982 Luciano v Rosenblum (1985) 2 NSWLR 65 CASES CITED : Warren v McKnight (1996) 40 NSWLR 390 Dare v Furness (1997) 44 NSWLR 495 DECISION : See paragraph 49 SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MASTER McLAUGHLIN Thursday, 27 May 1999 1349 of 1998 DEBORAH HELEN SINCLAIR AS NEXT FRIEND OF NATHAN MARK GRIFFITHS, RYAN LUKE GRIFFITHS AND LAUREN ROCHELLE GRIFFITHS -v- SANDRA NICOLE GIRFFITHS ESTATE OF THE LATE MARK RAYMOND GRIFFITHS AND THE FAMILY PROVISION ACT 1982 JUDGMENT 1 MASTER: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 11 February 1998 Nathan Mark Griffiths, Ryan Luke Griffiths and Lauren Rochelle Griffiths, by their next friend Deborah Helen Sinclair, claim an order that provision be made for the maintenance, education, and advancement in life of each plaintiff out of the estate and/or the notional estate of their late father Mark Raymond Griffiths (to whom I shall refer as "the deceased"). 3 At the time of the institution of the proceedings each of the three plaintiffs was an infant (Nathan having been born on 3 January 1981, Ryan having been born 19 March 1982, and Lauren having been born on 6 November 1984). Accordingly, the proceedings were instituted on behalf of the three plaintiffs by their mother, Deborah Helen Sinclair, acting as their next friend. 4 It will be appreciated that Nathan is now an adult, having achieved the age of 18 on 3 January 1999. Accordingly, at the outset of the hearing I made an order that Nathan Mark Griffiths, now no longer an infant, be joined as a plaintiff, and that Deborah Helen Sinclair cease to act as next friend of the said Nathan Mark Griffiths. 5 Since Ryan is presently aged 17 and Lauren aged 15, the proceedings on behalf of each of those plaintiffs are still maintained by their next friend. 6 The deceased died, aged thirty-nine, on 19 June 1996. He left a will dated 17 August 1995, Probate whereof was on 10 February 1997 granted to Sandra Nicole Griffiths, the executor named in such will (who is the defendant to the present proceedings). 7 It should here be noted that the proceedings were not instituted within the prescribed period of eighteen months from the death of the deceased, and were about eight weeks out of time. It will be necessary, in due course, to consider the application made, ore tenus, on behalf of the plaintiffs for extension of that prescribed period. 8 By his will the deceased, in the events which have happened, gave the entirety of his estate to the defendant. The inventory of property discloses that the only asset held by the deceased at the time of his death was a deposit fund with Westpac in an amount of $5,825. However, at the time of his death the deceased and the defendant as joint tenants owned a house property situate at and known as 10 Barrie Close, Williamtown ("the Williamtown property"), which had been the matrimonial home of the deceased at the time of his death. That property passes to the defendant by survivorship. 9 The deceased had been married twice. On 18 December 1976 he married Deborah Helen (now Mrs Sinclair). Of that marriage were born the three plaintiffs. That marriage was dissolved on 24 June 1991. Certain orders were made by consent in the proceedings in the Family Court of Australia for dissolution of that marriage. Those orders included an order that the next friend and the deceased have joint guardianship of their three children, but that the deceased have custody of the three children. Further, that the next friend pay maintenance to the deceased in respect of the children. Orders were also made in relation to property, including an order that the deceased pay the next friend the sum $63,000 for the transfer to him of the interest of the next friend in the house property at 17 Ocean View Parade, Coves Beach, which had been the former matrimonial home of the deceased and the next friend. 10 On 21 November 1993 the deceased married Sandra Nicole (now Mrs Griffiths), to whom he was still married at the time of his death. The next friend on 17 April 1994 married Reg Thomas Sinclair. 11 At the time of his marriage to the defendant the deceased was still residing at the Caves Beach residence, with his three children. In May 1994 the deceased and the defendant purchased as joint tenants the house property at 10 Barrie Close, Williamtown. The purchase price for that property came in part from the proceeds of sale of the Caves Beach residence, and the balance from a redundancy payment received by the deceased when he accepted redundancy from his employment by Telstra in 1994. The deceased was for a time in receipt of unemployment benefits, and then spent some time working two or three days a week in the driving school business conducted by the defendant's father. 12 In September 1995 the deceased underwent a surgical procedure for the removal of his lymph glands. Although initially that operation was regarded as having been successful, in early 1996 the deceased was diagnosed as suffering from terminal cancer. 13 From September 1995 until the time of his death the deceased was in receipt of an invalid pension. The defendant was at that time self-employed in her own hairdressing business. 14 For about four months preceding his death the deceased was bedridden. It was necessary for the defendant to nurse him throughout that period, giving him all assistance, attending to feeding and washing, and administering morphine to him every two hours. In addition, she had the responsibility of looking after the three children (who continued to reside with their father after he married the defendant), getting them to school, preparing their meals, attending to their clothing, and performing all other household chores. The defendant was also attempting to maintain her own hairdressing business. 15 Upon the death of the deceased Nathan and Ryan returned to reside with their mother at Warners Bay, whilst for about a year after her father's death Lauren continued to reside with the defendant. She has now returned to live with her mother. 16 Nathan left Maitland High School at the end of 1998 after completing Year 12, and since then he has been in employment as a sales assistant. His Higher School Certificate marks were not sufficient to gain for him entry into a university. He now has an ambition to join the New South Wales Police Service, but for that he requires a TER. 17 Nathan has now made inquiries at the University of Newcastle about enrolling in what is known as the NewStep course, commencing at the beginning of 2000, in order to obtain a TER. The NewStep course is a full-time course. The total cost of enrolment will be $145. Nathan will no longer be able to work in his present employment to support himself financially whilst he is attending that course, which he described as being like going back to school. He said in his affidavit evidence that he could not see his way clear to being able to complete the NewStep course unless he receives some financial assistance. 18 When he obtains his TER Nathan will be in a position to make an application to join the Police Service and to attend a one year training course at the Police Academy at Goulbourn. He said in his affidavit that he had really set his heart on joining the Police Service. During that one year course it would be necessary for Nathan to arrange accommodation at his own expense, either residing in the Academy (at an accommodation fee of $100 a week) or acquiring his own accommodation in the Goulbourn area and travelling daily to the Academy. Nathan said that on his current wage he was unable to save any money and would have no prospect of being able to attend the Police Academy unless he received some financial assistance. He estimated the cost of accommodation and sustenance in Goulbourn would be a minimum of $200 a week during the twelve month course. 19 Nathan is currently employed as a sales assistant with Warners Bay Pool Shop, for which he receives a wage of $286 a week. He no longer resides with his mother, because of the distance to Warners Bay from her present residence at Sawyers Gully (near Kurri Kurri). He is currently sharing rented premises with a friend, of which his liability for rent is $65 a week. He has been working in the pool shop since October 1998. 20 Nathan has no significant assets. When he moved into his present flat at Broadmeadow he borrowed $1,200 from a cousin. He has very recently repaid the totality of that loan, and, at the time of the hearing, had $63 in his bank account. He has little in the way of furniture in his flat, and is currently saving in order to acquire some additional furniture. 21 It is Nathan's desire to acquire a second-hand motor vehicle, so that he can drive to and from work, and later to and from the University of Newcastle. The travel by public transport from his residence at Broadmeadow to his employment at Warners Bay is difficult. He has made inquiries concerning the acquisition of a motor car, and has ascertained that he could purchase a 1995 Proton GL sedan for $9,500. 22 Nathan is currently attending a driving school, with a view to obtaining a driver's licence. However, he has been told that he will require another ten lessons at $30 a lesson. In addition, he will be obliged to pay a test booking fee of $32 and a licence fee of $34. He does not consider that he currently has sufficient funds to meet all those fees. 23 Ryan has also left school (I gather at the end of 1997, when he was aged fifteen). In 1998 he attended a carpentry pre-apprenticeship course at TAFE. Ryan is employed in a casual position by Geotechnic and receives a wage of $250 a week. He is presently staying with a friend at Raymond Terrace (in what is very basic accommodation). He travels to and from his work (which is located on the Pacific Highway near Raymond Terrace) on a motorbike, which was purchased for him by his mother. He expects shortly to receive his motor car driver's licence. Ryan has no significant assets other than his motorbike. 24 Lauren is still at school, attending Rutherford High School. Her mother is hopeful that she will eventually attend university. 25 The defendant is twenty-nine years of age (having been born on 15 October 1969). She is a qualified hairdresser. During the period of her marriage she was employed as a hairdresser for part of the time and had her own hairdressing business for part of the time. She acquired that business in May 1993 for about $14,000 (that price being essentially for the goodwill of the business), and sold the business in about March - April 1997 for about $12,500. From that amount she repaid to her parents a loan of $10,000 which they had provided to assist her in establishing the business. 26 The defendant is presently employed as a hairdresser receiving a weekly salary of $408 (net). Occasionally she receives a commission of $50 added to her weekly salary (that commission depending upon, as I understand it, the number of clients she attends to during the week). However, it should here be noted that the defendant suffers from problems with her back, which (according to the report of Dr G. Mah, dated 13 April 1999, Exhibit 2) may have an effect upon her ability to continue her occupation as a hairdresser. 27 Apart from her interest in the house property at Williamtown, the assets of the defendant consist of a Hyundai Lantra motor vehicle (having an insured value of $18,000), and amounts in two savings accounts, totalling less than $500. The defendant owes debts to her parents ($10,000) and her grandmother ($5,044, for her legal costs of the present proceedings), and a personal loan in respect of the motor vehicle (of which the amount outstanding at the time of the hearing was a little over $13,000, which the defendant is paying off at $92.50 a week). In addition, she has been responsible for the payment of all outgoings on the Williamtown property since the death of the deceased. 28 The defendant, who under the will receives the entirety of the estate of the deceased, is desirous of disposing of the Williamtown property. The reason is that that property is too far from her place of employ, and, further, that she is desirous of residing closer to her own parents (who live at Wallsend). 29 Originally she placed the Williamtown property for auction at $229,000. However, the highest bid when it was put up for auction was $205,000. She accepted that offer, but the purchaser was not able to proceed with the purchase. The defendant is prepared to sell the property for $205,000. The hearing proceeded upon the basis that, ultimately, the property would be sold for that figure, and that after payment agent's commission, sales expenses and associated legal costs there would remain about $190,000 as the net proceeds of the sale of that property. 30 It will be appreciated that since the Williamtown property was owned by the deceased and the defendant as joint tenants, the interest therein of the deceased has by survivorship passed to the defendant. It will be necessary for the defendant to acquire some other residence. Evidence was placed before the Court as to the cost of alternative accommodation in the Newcastle area. According to the defendant, it would be difficult for her to acquire appropriate accommodation for her needs and desires at less that $170,000. That figure was disputed by the plaintiffs. There was placed in evidence (as Exhibit F) an edition of the Multilist Realtor dated 9 April 1999 setting forth details of accommodation available in the Newcastle and District area. It was submitted on behalf of the plaintiffs that appropriate accommodation could be acquired by the defendant for not much more than $100,000. 31 Each of the plaintiffs as a child of the deceased is an eligible person within paragraph (b) of the definition of that phrase contained in section 6 (1) of the Family Provision Act. Each plaintiff thus has the standing to bring the present proceedings. The defendant also, as the widow of the deceased, is an eligible person, within paragraph (a) of that definition. The only other eligible person in relation to the deceased is Deborah Helen Sinclair, the mother of the plaintiffs, who, as the former wife of the deceased, is an eligible person within paragraph (c) of that definition. She makes no claim against the estate of the deceased. 32 The claim of the plaintiffs must be approached in the light of any competing claims upon the testamentary bounty of the deceased. In the instant case the only such competing claim is that of the defendant, who under the will of the deceased was entitled to the entire estate of the deceased. 33 It will be appreciated that the actual estate of the deceased (consisting of $5,825, being the proceeds of a superannuation entitlement) will not be sufficient to meet the costs and administration expenses of the estate, let alone the costs of the present proceedings (which are estimated for the plaintiffs alone to total $30,000). Accordingly, if an entitlement to any order for provision for any or all of the plaintiffs is established, such order can be met only out of the notional estate of the deceased. 34 It was submitted on behalf of the plaintiffs that, as a result of the deceased entering into a prescribed transaction of the nature contemplated by section 22 of the Family Provision Act (that prescribed transaction being the failure of the deceased to sever the joint tenancy in respect of the Williamtown property), a one half share in that property (and, ultimately, in the proceeds of sale of that property) constitutes notional estate of the deceased to which resort may be had by the Court in order to satisfy any order for provision an entitlement to which one or all of the plaintiffs may otherwise have established. 35 A very considerable quantity of evidence (both by affidavit and by way of oral evidence, especially by way of cross-examination of the next friend of the plaintiffs) was directed to the circumstances concerning the acquisition and present ownership by the next friend of a house property situate at and known as 15 Kirkland Close, Warners Bay, and the intentions of the next friend and her mother concerning the disposition of the proceeds of sale, if and when that property is sold. That property was acquired in 1992 for the sum of $152,770. The purchase price was funded by an amount of $88,660 provided by Mrs Nora Helen Ball, the mother of the next friend, and the balance of $64,110 by the next friend herself. The purpose, as I understood it, of that evidence was an attempt on the part of the defendant to establish that the next friend could adequately provide for the needs of and support the plaintiffs, by having resort to that Warners Bay property (which is presently unoccupied). 36 I do not consider that the ability of the plaintiffs' mother (assuming that she does in fact have such ability) to support the plaintiffs is determinative of the present claim of the plaintiffs against the estate of their late father. It will be appreciated that it was the deceased who upon his divorce from their mother was awarded the custody of the three plaintiffs, and that they resided with him and the defendant until his death (and, in the case of Lauren, for a year after his death, with the defendant). Indeed, by the orders of the Family Court the plaintiffs' mother was required to pay to the deceased the sum of $20,000 for maintenance of the plaintiffs. Throughout the period whilst the children were living with him the deceased was primarily responsible for their maintenance and support, and it is (as was submitted on behalf of the plaintiffs) more than likely that, had the deceased not died at the young age of thirty-nine, he would have continued to be primarily responsible for his three children until they became self supporting, and had embarked upon their own careers. 37 Whether or not the mother of the plaintiffs, if she and her own mother decide to dispose of a property in which each of them has a beneficial interest, would thereupon be able to support her three children, those three children are not thereupon deprived of an entitlement to an order of the nature sought in the summons; and neither the deceased nor his estate is thereupon discharged from a responsibility to make provision for the maintenance, education and advancement in life of each those three children. 38 However, that responsibility must be considered in the context of the responsibility of the deceased to make provision for his widow, a responsibility, which, by the terms of his will, he fully recognised. It will, however, be appreciated that the marriage was a short one, subsisting for only two and a half years. That fact seems to me be of significance when considering the application to the instant case of the principles (such as that enunciated by Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65) concerning the responsibilities of a testator towards his widow. 39 The practical problem in the instant case is that, even if I am satisfied --- as I am --- that the deceased, by failing to sever the joint tenancy during his lifetime, entered into a prescribed transaction, with the consequence that the one half interest of the deceased in the Williamtown property is available to be designated as notional estate of the deceased, that notional estate must then bear any order for provision which might be made in favour of the plaintiffs, together with any order in respect to the costs of the proceedings both of the plaintiffs and of the defendant. Further, any remaining balance of that one half interest, when taken with the one half of the Williamtown property which does not constitute notional estate of the deceased and to which the defendant is absolutely entitled, must be sufficient to enable her to acquire other accommodation. 40 Even if, as was submitted on behalf of the plaintiffs, I accept that the defendant can acquire adequate accommodation for about $100,000 that would still leave only about $90,000 (upon the assumption that the net proceeds of sale of the Williamtown property are about $190,000) to meet any order for provision for the plaintiffs and to meet any costs orders. 41 I am satisfied that each plaintiff has established an entitlement to an order for provision, not only for maintenance (in the case of Nathan and Ryan) but also for advancement in life and education in the case of each of the three plaintiffs. Such orders for provision will also attract costs orders in favour of the plaintiffs, and the defendant as executor is also entitled to her costs out of the estate. 42 Within the constraints of an extremely small fund available to bear any orders for provision, I have reached the conclusion that Nathan has established an entitlement to a legacy in the sum of $20,000, Ryan to a legacy in the sum of $20,000 and Lauren to a legacy in the sum of $15,000. The larger legacies to Nathan and Ryan reflect the fact that they must maintain themselves, whilst Lauren at the present time is being maintained by her mother. The plaintiffs and the defendant will also be entitled to have their respective costs out of the estate. Had the fund available to meet the claims of the plaintiffs (as well as to bear the costs of all parties) been greater, I would have awarded each plaintiff a greater legacy. 43 There remains to be considered, however, the question of extension of time. I have already observed that the proceedings were instituted some eight weeks after the expiration of the period of eighteen months after the death of the deceased, prescribed by section 16 (1) of the Family Provision Act. The Court, by subsection (3) of that section, is vested with a discretion to extend that period in circumstances where the reason for the proceedings not having been instituted within time has been explained. 44 The defendant opposes such an extension of time. The explanation offered by the plaintiffs and the factors relied upon in support of the application for an extension of time are, firstly, the fact that each of the plaintiffs was an infant at the time of the institution of the proceedings. Further, in his affidavit sworn on 21 May 1998 Eric Richard Leslie Butler, the solicitor for the plaintiffs, states that because of the complicated nature of the claims (which I understand to be a reference to the fact that, for practical purposes, there would be no actual assets in the estate of the deceased to meet any order for provision in favour of the plaintiffs, and that the plaintiffs would need to establish, firstly, the existence of a prescribed transaction, and, secondly, the availability of notional estate to meet any such order for provision), he did not on behalf of the plaintiffs file a summons until he had received sufficient instructions to brief Counsel. Those instructions were received from the next friend only on 9 February 1998. However, the solicitor for the plaintiffs had as early as 18 August 1997 been in correspondence with both the defendant herself and subsequently her solicitors. 45 The plaintiffs further point to the fact that there is no prejudice to the defendant if the prescribed period is extended, that the defendant and her solicitor were under notice of the proposed claim of the plaintiffs from mid-August 1997, some four months before the expiration of the prescribed period, and that the defendant did not alter her situation or circumstances in any way from the expiration of the prescribed period until the institution of the proceedings. 46 I have been taken to the decision of Cohen J in Warren v McKnight (1996) 40 NSWLR 390, and Dare v Furness (1997) 44 NSWLR 495 at 500, in respect to the application for extension of time. 47 The desire of the solicitor for the plaintiffs, proper in the circumstances of this case, to brief Counsel before filing the summons, and the fact that the solicitor did not receive "sufficient instructions" to brief Counsel until 9 February 1998, after the expiry of the prescribed period, in my view, combine to constitute sufficient cause for the application not having been made within that period. Thus the Court is not precluded by the provisions of subsection (3) of section 16 of the Act to proceeding to an exercise of the discretion vested in it by subsection (2) of that section to extend the prescribed period. 48 Whilst the disability of infancy to which each of the plaintiffs was subject at the time of the institution of the proceedings is not of itself determinative of the application for extension of time, it seems to me that it is a very significant factor, which, taken in conjunction with an absence of any prejudice to the defendant by such extension, the express notice of the intended claim given to the defendant and her solicitors four months before the expiry of the prescribed period, and the fact that, as I have concluded, each of the plaintiffs has established an entitlement to an order for provision, justifies the extension of the prescribed period sought by the plaintiff. 49 Accordingly, I make the following orders: 1. I order that the time for the institution of these proceedings be extended up to and including 11 February 1998. 2. I order that a one-half interest in the house property situate at and known as 10 Barrie Close, Williamtown, be designated as notional estate of the late Mark Raymond Griffiths ("the deceased"), and that the defendant hold such interest upon trust for the estate of the deceased. 3. I order that the following legacies be paid out of the notional estate of the deceased: (a) Nathan Mark Griffiths - $20,000 (b) Ryan Luke Griffiths - $20,000 (c) Lauren Rochelle Griffiths - $15,000, and that the first of the aforesaid legacies not bear interest if paid within three months of the date of the making of this order. 4. I reserve to each of the plaintiffs Ryan Luke Griffiths and Lauren Rochelle Griffiths liberty to apply in respect to the manner in which and by whom his or her respective legacy be held during the minority of that plaintiff and in respect to any advancement from or payment of part or all of such legacy or any income thereon during such minority. 5. I order that the costs of the plaintiffs on the party and party basis and the costs of the defendant on the indemnity basis be paid out of the notional estate of the deceased. 6. The exhibits may be returned. ********** Last Modified: 05/27/1999 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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