Mitrovic v Perpetual Trustee Co Ltd [1999] NSWSC 900

New South Wales Supreme Court CITATION : Mitrovic v Perpetual Trustee Co Ltd [1999] NSWSC 900 revised - 06/09/99 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 4058/98 HEARING DATE(S) : 27/08/99 JUDGMENT DATE : 30 August 1999

PARTIES : Janet Mary Mitrovic v Perpetual Trustee Co Ltd - Estate of Jane Smith Lavender JUDGMENT OF : Master Macready at 1

COUNSEL : Mr R. Cameron for plaintiff Mr P. Blackburn-Hart for defendant SOLICITORS : Lee, Hourigan & Brooks for plaintiff Bartier Perry for defendant CATCHWORDS : Family Provision.; Application by a niece of deceased who was part of household for 6 months and partly dependent. Large estate. Applicant fails to call evidence of future requirements in support of claim. Difficulty facing court in the absence of such evidence. DECISION : Paragraph 57

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

MASTER MACREADY

MONDAY 30 AUGUST 1999

004058/98 - JANET MARY MITROVIC v PERPETUAL TRUSTEE CO LTD - ESTATE OF JANE SMITH LAVENDER

JUDGMENT

1 MASTER: This is the hearing of a case under the Family Provisions Act in relief of the estate of the late Janet Smith Lavender who died on 3 July 1997 aged 91 years. She was survived by her niece, the plaintiff. Her husband and her only child pre deceased her. 2 The will of which the defendant was granted Probate, was made on 27 July 1994. By that will, she gave to a friend, Margaret Kidson, some furniture, gave to the plaintiff a legacy of $5,000 and the North Haven Retirement Village Control Board of Management a legacy of $25,000. The balance of her Estate was divided between the Royal New South Wales Society for Deaf and Blind Children and the Salvation Army. 3 The deceased had made a number of wills over a period of time and it is useful noting the benefits that the plaintiff received under those wills. In 1997 the plaintiff received a legacy of $3,000 and some interest in income. In 1991 she received a legacy of $80,000 and an interest in income. In 1982 and 1984 she received an interest in income in $100,000 if certain events eventuated. In 1987 she also received a legacy of $10,000. 4 In 1989 she received an income interest in $50,000 and a legacy of $10,000 and in 1993, she received one half of the residue of the Estate. There was thus a substantial restructure between the 1993 will and the 1994 will in respect of which Probate was granted. 5 The Estate is a fairly large one. The net distributable amount is in the order of $857,000. There are costs in this application on the defence side of $18,957 and for the plaintiff of some $17,000. It is necessary to deal with the history of the family in order to understand the plaintiff's claim. 6 In 1904 Janet Ferguson, the mother of the plaintiff was born. Her sister, Jane Ferguson, the testator, was born in 1906 thus the plaintiff is the niece of the testator. 7 In 1923 Thomas Ferguson, the grandfather of the plaintiff and father of the testator, purchased a house at 9 Julia Street, Ashfield. That purchase comprised two semi-detached houses on one title. 8 In 1934 Janet Ferguson married George Saunders and her sister, Jane, the testator, married in 1936 to Leslie Lavender. They had one son, Charles John, within about a year. In 1938 the plaintiff was born and in 1941 her grandfather, Thomas Ferguson, transferred the property, 9 Julia Street, Ashfield to the deceased, Jane Lavender. 9 1942 the plaintiff's father died and, as a result, the plaintiff's mother and the plaintiff moved into 9 Julia Street, Ashfield. That was so that they could assist the plaintiff's grandmother. The grandparents, the plaintiff more and the plaintiff and her mother shared one of the 2 semis at 9 Julia Street, Ashfield. 10 In 1947, Thomas Ferguson, the grandfather, died and the arrangements continued for residence as before. The deceased, her husband and child, continued to reside in the other semi which she had occupied since, probably, 1941. 11 In 1951 there was a change in the ownership. The deceased granted a lease to the grandmother of 9 Julia Street, Ashfield, being Flat 2, in other words, the part occupied by the plaintiff and her mother for a period of 7 years. She then sold the whole of the property, the subject of the lease, and moved to a property at Epping which she purchased. The plaintiff and her mother remained in the house at Ashfield in Flat 2 with the grandmother. 12 In 1957, the plaintiff and her mother moved into a flat nearby and on 2 July 1972, the plaintiff's mother died which was a traumatic event for the plaintiff as she came home and found her mother dead. The immediate response from the testator, her aunt, was to come and take her to live with her at Epping. There was some confusion in the evidence given by the plaintiff about what happened and where she lived over the next 12 months. It seems clear that immediately on the death of her mother in July 1962, she moved to her aunt's at Epping. It is also clear by July or September in 1963 she had purchased a unit which she did with the money she received from her mother. She also said that she spent 12 months in other rented accommodation. However, the evidence, which seems to me more probable, is the evidence which she gave in her affidavit and also repeated in the witness box about staying at Epping with Janet for a period of some five to six months. 13 The reason why it is probable is because she recalls the Christmas holidays that they took at the end of 1962. That is likely to stay in her mind because it was during this period that difficulties with the deceased's son, John, became evident. He was schizophrenic and became violent. 14 As a result of this, the plaintiff had to leave and hence her move for the first time to rented accommodation and then to a unit which she bought. It seems to me that the situation is that the plaintiff did live for between five and six months with the deceased at Epping. 15 A year later, in 1963 as I have mentioned, the son of the plaintiff died. In 1964 the deceased and her husband sold their house at Epping and moved to the Roseville or Lindfield area. At about this time, the plaintiff's grandmother died. 16 In 1967 the plaintiff married Ivan Mitrovic and she had two children of that marriage who are now 24 and 26. In 1985 the deceased and her husband moved to the North Haven Retirement Village and lived there for some years. He died, apparently, before the deceased. 17 In 1992 the plaintiff and her husband separated and in due course their house was sold. The plaintiff moved into a flat in 1993. There was the will to which I have referred and in 1993, the plaintiff became ill and was diagnosed with an hereditary disease, which I will refer to later. She ceased work and for some 6 months or more went to the Central Coast to be with her daughter. In 1994 the testator made her current will and died in 1997, as I have recounted. 18 For the plaintiff to be an eligible person in this matter, it is necessary for her to show that she at some stage was part of the household of the deceased and also to show that she was partly dependent on the deceased. The first relevant period is between 1942 and 1951 when the plaintiff was living with her mother and grandmother and while the deceased, her husband and son lived next door in the other flat. Although the properties did not have separate yards for each of the flats, the semis were clearly separate houses and residences. Therefore there were two households and, accordingly, the plaintiff was not part of the household of the deceased. 19 The other period is in 1962 for five to six months. On that occasion the plaintiff was taken into the deceased's household and clearly was part of that household for that period. As far as dependency is concerned, this is a little more difficult question. 20 In Ball v Newey (1988) 13 NSW LR 1989, Samuels J at 409 said: "His Honour concluded that `dependent' meant financially dependent, a proposition which has not been challenged in the appeal. It may be that there are other forms of dependents analogous to but distinct from financial dependents which would be capable of satisfying the requirements of section 6(1) the definition of 'eligible person'. In the present case, however, only financial dependents is relied on and I approach the matter on that bases. `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) 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". While it is true tha6t there we are concerned with financial dependents and not emotional dependents, the whole relationship between the appellant and the deceased must be examined in the light of that statement in order to exclude situations which might present the simulacrum but not the substance of dependency." 21 In Benny v Jones (1991) 23 NSWLR 559 the Court of Appeal returned to the issue in a case where the only dependency was emotional resulting from a homosexual relationship between a party and the deceased. The Court rejected a submission that dependency may be based solely on the existence of the relationship without regard to any element of any financial dependence. 22 In Petrohilos v Hunter (1991) 25 NSWLR 343 at 346 the Court once again considered the meaning of dependency. At page 346 the Court had the following to say:- "I would respectfully disagree with the master in both respects. The word "dependent" is an ordinary English word, and whether a person is or has been wholly or partly dependent upon another is a question of fact. No doubt one of the commonest forms of dependence is a financial one, in the sense that the dependence flows from the fact that accommodation, food, clothing and other necessities or amenities of life are provided by the person who owns or is otherwise entitled to the accommodation and pays for the other things. But I do not think that the word, as used in the statute or otherwise, has this very limited meaning. In ordinary parlance, young children are properly and commonly said to be dependent on their mother as well as their father, regardless of where the money comes from. A contrary view, that young children are not dependent on their mother if she has no independent means, seems to me to be a misuse of the language. This accords with what Samuels JA said in Ball v Newey (1988) 13 NSWLR 489 at 491, that "'Dependent" in the ordinary sense of the word, means the condition of depending on something or on someone for what is needed." If the correct view were that the context of the statute requires a limitation of the word to 'financial or material' matters as McLelland J said in Re Fulop Deceased or to 'other forms of dependence analogous to but distinct from financial dependence' as Samuels JA suggested in Ball v Newey (at 491), then surely a mother's services to a young child satisfy the test. The child could not survive without the provision of those services; he or she needs them. To suggest that, in a money sense, they are valueless, is simply wrong. If the provision of accommodation by a father for a young child, that is, having the child live in a house which he owns and lives in, can make the child partly dependent upon the father, as it undoubtedly can, I am unable to see why the provision by a mother to her children, living with her, of the services essential for their well-being does not make them partly dependent upon her. In my opinion it does. The same considerations apply to a step-child or his or her step-mother, when the child lives with the step-mother and is looked after by her. I appreciate that a different view has been taken by others, as for example, by Powell J in Dunn v Public Trustee (Powell J, 1 June 1989, unreported), but I would respectfully disagree with that view. In my opinion the plaintiff was partly dependent upon the deceased, certainly for many years of her childhood and probably until her marriage, although no doubt her dependence diminished in the latter years of this period." 23 In McKenzie v. Baddeley (Court of Appeal unreported 3 December 1991) his Honour Mr. Justice Meagher, although in the minority, further discussed dependency and described it as "financial economic or material dependency not a mere emotional dependency". Importantly in that case the majority held that the word "partly" in the phrase "partly dependent" does not mean "substantially" rather it suggests "more than minimally" or perhaps "significantly". 24 It is abundantly clear from all these comments that dependency is a matter to be determined from all the facts in the case. 25 Once again there are two periods of concern. The first is from 1942 to 1951. It is clear that on the transfer of the properties in 1942, the testator at that time took over the responsibility for meeting the mortgage that was on the house. Apart from this, there is no evidence, apart from one statement by the plaintiff, as to the arrangements for payment of rent. The evidence is silent and I would be reluctant to find dependency in this period given the absence of evidence. 26 However the second period in July to December 1962, is somewhat clearer. Clearly the plaintiff paid for her food because she was working at the time. She also helped with odds bills such telephone and electricity. However, she paid no rent or made no contribution for accommodation. There was extracted in cross-examination an answer that the plaintiff paid her own way. It is clear that for the period she was provided with accommodation by the deceased. In these circumstances the provision of accommodation is certainly more than minimal and, accordingly, I am satisfied that the plaintiff was partly dependent upon the deceased. 27 Accordingly, the plaintiff is an eligible person and it is necessary to see whether there are factors warranting the making of the application in accordance with section 9(1) of the Act. 28 The meaning of this expression has been dealt with by McLelland J in re Fulop Deceased (1987) 8 NSWLR 679 at 681. There his Honour said the following: "This means that in a particulars case the Court might determine that there are `factors which warrant the making of the application' within the meaning of the subsection, and yet go on to decide that the application should fail. Since the subsection applies only to certain classes of applicants, it suggests that those classes of applicants need to demonstrate some basis for their claims additional to that required of other classes. The difference between the two sets of classes of applicants, in broad terms, seems to be that the classes not affected by s 9(1) (lawful and de factor spouses and children) are as such generally regarded as natural objects of testamentary recognition by a deceased (cf the Wills Probate and Administration Act 1898, s 61B), whereas the classes affected by s 9(1) (former spouses, and some time dependent grandchildren or household members) are as such not generally so regarded. This suggests that the `factors' referred to in the subsection are factors which when added to facts which render the applicant an `eligible person' give him or her the status of a person who would be generally regarded as a natural object of testamentary recognition by a deceased."