New South Wales Supreme Court CITATION : Janda v McNeall [1999] NSWSC 487 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 4793/97 HEARING DATE(S) : 25 May 1999 JUDGMENT DATE : 25 May 1999 PARTIES : Margaret Sylvia Janda (P) Donald John McNeall (D) JUDGMENT OF : Master McLaughlin COUNSEL : Mr. J. R. Wilson (P) Mr. R. Harper (D) SOLICITORS : Gordon A. Salier (P) Laurence & Laurence (D) CATCHWORDS : ACTS CITED : Family Provision Act 1982 DECISION : SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MASTER McLAUGHLIN Thursday, 25 May 1999 4793/97 MARGARET SYLVIA JANDA -v- DONALD JOHN McNEALL - ESTATE OF SYLVIA McNEALL JUDGMENT 1 MASTER: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 17 November 1997 the plaintiff, Margaret Sylvia Janda, claims an order for provision for her maintenance out of the estate of her late mother, Sylvia McNeall (to whom I shall refer as "the deceased") 3 The deceased died, aged ninety-two, on 22 May 1996. She left a will dated 7 November 1991, probate whereof was, on 5 August 1996, granted to Donald John McNeall, the executor named in such will (who is the defendant to the present proceedings). 4 The defendant is one of the three children of the deceased. By her will the deceased gave the entirety of her estate to the defendant. The estate assets consist of a home unit situate at and known as 5/21 Kangaroo Street, Manly, which has a present estimated value of $290,000; the contents of that home unit; shares in National Australia Bank, having a present value of a little over $44,000; an indebtedness owed by McNeall Industrial Technologies Pty Ltd in a present amount of $5,438; and moneys held in an account with the Commonwealth Bank in an amount of $21,853. 5 The plaintiff was born on 17 December 1932; she is presently sixty-six years of age. The defendant was born on 17 September 1935 and is presently sixty-three years of age. The other child of the deceased, Malcolm McNeall, was the eldest child. He makes no claim against the estate of his late mother. 6 The plaintiff, 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. As such she has the standing to bring the present proceedings. The defendant also, and their brother, Malcolm, are each an eligible person within the same paragraph of the definition. 7 The plaintiff, when aged in her twenties, travelled to Canada in 1957. She married the following year, on 4 October 1958, her present husband Lubomer Janda (known as Louis Janda). They have remained married since that time for a period of more than forty years. There were three children of that marriage, all of whom are adults with families of their own. 8 The plaintiff, although resident in Canada for more than forty years, maintained contact with her mother, both by letter and by visits made by the deceased to the plaintiff and by the plaintiff returning to Australia to stay with her mother. Despite attempts on behalf of the defendant to suggest that the relationship between the plaintiff and the deceased was not as close, as regular or as frequent as the plaintiff's evidence would have the Court believe, I am satisfied that there was a close and affectionate relationship between the plaintiff and her mother. 9 The visits by the deceased to Canada were always of some months' duration; at least one of those visits extended over a period of six months. They continued until the advancing years and declining health of the deceased made them impractical. The plaintiff herself continued to make visits to her mother in Sydney thereafter. 10 I have referred to the fact that the plaintiff has been married to her husband for a period exceeding forty years. The plaintiff's husband is a professional engineer, who is now sixty-nine years of age. However, the plaintiff and her husband have now reached a stage in their marriage where it is likely that they will follow separate paths. The plaintiff wishes to continue to reside in the house property in Vancouver. Her husband, however, wishes to reside on a property on Cortez Island, located on Vancouver Island. Each of those two pieces of real estate --- the residence in Vancouver and the rural estate in a somewhat remote location on Cortez Island --- is owned jointly by the plaintiff and her husband. 11 The house property at 3175 Canfield Crescent, North Vancouver, has an estimated value of $280,000, whilst the rural property at Sea Vista Road, Cortez Island, has an estimated value of $500,000. I would here interpolate that the evidence discloses that there is almost equal parity between the Canadian currency and the Australian currency at the present time. 12 Each of those properties is subject to a mortgage, the amount outstanding on the residential property being $136,917, whilst the amount outstanding on the Cortez Island property is $102,564. 13 Apart from those two jointly owned assets the plaintiff owns a 1981 Buick sedan motor vehicle with a present estimated value of $1,000; she has a small share portfolio worth $4,681; and she has a very small amount of $55 in a bank account. 14 Although the plaintiff is a qualified secretary and although she has, for some years, been on the books of an employment agency, she has received no remunerative work in the past two years. Her only income is a small pension of $6,200 gross a year. 15 The plaintiff's husband is still continuing in employment. He works for the Canadian Department of Public Works. His most recent income tax return discloses a total income of in excess of $105,000 and a nett income of $95,659, on which tax of $36,183 was assessed. 16 The plaintiff's husband is in the process of negotiating a contract with the Department of Public Works which will require him to work on Vancouver Island, as I understand it, in the city of Victoria. He proposes in those circumstances to reside on the Cortez Island estate. 17 At that point the plaintiff and her husband would cease to live together; their relationship is an amicable one. They have no present plans for divorce or for legal separation. However, if, as appears to be likely, the situation shortly arises where the plaintiff and her husband reside separately and apart, the plaintiff will find herself in a house property in Vancouver, subject to a substantial mortgage, with no other assets, and a minimal income. 18 It should here, however, be recorded that the evidence discloses that the Cortez Island estate is likely to be subdivided at some future time. There is no evidence before the Court as to the expected return upon the sale of subdivided parts of that estate. However, the evidence suggests that if the estate is subdivided and if, as he apparently proposes to do, the plaintiff's husband continues to reside in one of the subdivided parts of that estate, then the sale of the other subdivided parts would be sufficient to discharge the mortgages on each of the two pieces of property owned conjointly by the plaintiff and her husband. The evidence does not disclose whether any amount would be left over after discharging those mortgages. 19 The Court, in approaching the claim of the plaintiff, is required to look to the circumstances as they exist at the present time. It seems to me that the evidence concerning the plaintiff's matrimonial arrangements with her husband and the likely separation which will almost certainly shortly occur, so far as concern the living arrangements of the plaintiff and her husband, are such that the plaintiff has established a degree of need sufficient to enliven the discretion vested in the court by section 7 of the Family Provision Act. 20 It is necessary to consider the claim of the plaintiff in the light of any competing claims upon the testamentary bounty of the deceased. The only other competing claim which the Court must consider is that of the defendant, who, it should be emphasised, is the chosen object of the testamentary beneficence of the deceased. 21 It is not necessary for the defendant to prove or establish anything. It is for the plaintiff to establish her case upon its own merits. The financial and material circumstances of the defendant might, however, then be such as to reduce, or even to extinguish, any order for provision an entitlement to which the plaintiff has otherwise established. 22 The defendant lived with his parents until he married and left home in 1974. Three years later his marriage broke down and he returned to live with his mother, the father of the parties having died in 1958. From 1977 until her death in 1996 the defendant resided in the home unit at Manly with his mother. He looked after her, cared for her and, when her health and mobility deteriorated, he even went so far as to retire from his employment as a sales engineer in March 1991 in order to become the full-time carer for the deceased. 23 It is obvious that the deceased recognised the devotion of her son in looking after her by the terms of her will, in which she gave the entirety of her estate to the defendant. 24 Evidence has been placed before the Court by the defendant concerning his present financial and material circumstances. Apart from his interest in the estate of his mother the defendant owns two investment properties, neither of which is in any way encumbered. They are, firstly, a home unit at Lauderdale Avenue, Fairlight, which has an estimated present value of $350,000; and, secondly, a home unit at Peachtree Road, North Ryde, which has an estimated value of $180,000. Each of those properties is presently tenanted and is producing income. 25 The defendant has about $600 in two bank accounts with Westpac. He has a total of slightly in excess of $50,000 in two accounts with the Commercial Bank of Australia. He holds units in Westfield Trust, having a present value of $46,315, and units in General Property Trust, having a value of about $20,700. 26 In addition he has shares in Coles Myer, having a present value of $25,518, and shares in Dominion Mining, having a present value of $481. He has a 1996 Holden Commodore motor vehicle, having a present estimated value of $15,000. 27 The defendant has expressed the desire, which I consider a very understandable and a proper desire, that he should be able to remain in residence in the home unit at Kangaroo Street, Manly, which has been his home for the past twenty-two years and which he shared with his mother for nineteen years until her death in 1996. 28 Evidence has been placed before the Court concerning the likely costs of the parties in the present proceedings. There is an estimate that the costs of the plaintiff will total about $15,000 and that the costs of the defendant will total about $20,000, although Counsel for the defendant has said that it is possible that the defendant's costs may be somewhat less than that amount. They certainly will not be any more. 29 Apart from the home unit at Manly and its contents, the other assets in the estate of the deceased total about $72,000. After allowance is made for the costs of both parties of the present proceedings, there would be an amount available of at least $37,000, perhaps a little more. 30 I have already recorded that in my view the plaintiff has established need. In the absence of any specific information concerning the likely return from the subdivision of the Cortez Island estate, it is difficult for the Court to predict the extent to which that present need will or may continue in the future. But at the present time, it seems to me that the plaintiff is entitled to receive from the estate an amount which would enable her to upgrade her present motor vehicle and to provide for her a fund which, upon the separation of herself and her husband, would enable her to meet contingencies. 31 It has been submitted on behalf of the defendant that any order for provision which might be made in favour of the plaintiff should not be of such a size which would require the defendant, if he is to remain --- as he desires to do --- in residence in the Kangaroo Street unit, to have recourse to his own separate assets. 32 In general I am in agreement with that submission. It seems to me that upon the evidence the benefit which I am satisfied the plaintiff has established an entitlement to receive out of the estate of her late mother, should be in an amount of $40,000. When allowance is made for the costs of the present proceedings, it would be necessary for the defendant to have recourse to his own assets, if at all, only to a very limited extent, and certainly to no more than $3,000. 33 I propose, therefore, to order that the plaintiff receive out of the estate of the deceased a legacy in the sum of $40,000, and I propose also to make an order that each party receive her or his costs out of the estate. 34 I make the following orders: 1. I order that the plaintiff receive out of the estate of the late Sylvia McNeall ("the deceased"), a legacy in the sum of $40,000, such legacy not to bear interest if paid on or before 22 June 1999. 2. I order that the costs of the plaintiff on the party and party basis and the costs of the defendant on the indemnity basis be paid out of the estate of the deceased. 3. 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