Schubert v Johnsen [1999] NSWSC 1202

New South Wales Supreme Court CITATION : Schubert v Johnsen [1999] NSWSC 1202 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 4526/98 HEARING DATE(S) : 23/11/99, 24/11/99 JUDGMENT DATE : 24 November 1999

PARTIES : Keith William Schubert v Daisy Isabella Johnsen JUDGMENT OF : Master Macready at 1

COUNSEL : Mr J. Dupree for plaintiff Mr R. Weinstein for defendant SOLICITORS : A.J. Law & Co. for plaintiff Peter E. Chase for defendant CATCHWORDS : Family Provision. Claim by a son on a large estate. Lack of provision said to arise from a moral obligation to support his own adult son. Held that such a claim not recognised under the Family Provision Act. Claim dismissed. CASES CITED : Singer v Berghouse 181 CLR 201 at 209 DECISION : Para 50

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

MASTER MACREADY

WEDNESDAY 24 NOVEMBER 1999

4526/98 KEITH WILLIAM SCHUBERT v DAISY ISABELLA JOHNSEN

JUDGMENT

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Leonard William Schubert who died on 17 June 1997. 2 The deceased was survived by the plaintiff, who is his son by his first marriage, and the defendant his defacto wife of many years standing. The plaintiff's son Michael was also a party as a plaintiff, however about six months ago or earlier this year he discontinued the proceedings. 3 The estate consists of realty and other property having a net value of $1,000,407.44. There have been costs incurred in this matter which are fairly substantial. The plaintiff's costs are in the order of $32,572 and the defendant's costs of the proceedings are in the order of $32,290. The costs of administration amount to $35,540, a total of $100,402. 4 The deceased made his last Will on 3 July 1995. He gave various pecuniary legacies amounting to some $251,000 to various friends, family members and other people who had been close to him. One of the persons to receive a legacy was the plaintiff who received the legacy of $1,000. 5 In his Will the deceased in giving that gift said that he made it to his son Keith Schubert who he had not seen for the past fifty years and whom he was informed was a retired accountant and comfortably settled. Apart from the gift of a small item of real estate the majority of the residue of the estate passed to the defendant. 6 It is necessary to give a little of the chronology in the matter. The defendant Mrs Johnsen was born on 28 September 1919. The deceased first marriage was on 5 February 1927 to Winifred Manning Schubert. They gave birth to a child, the plaintiff Keith William Schubert on 11 July 1927. 7 In 1938 the defendant, who at this stage of course had no contact with the deceased, married and they had a child Raymond. By 1938 the relationship between the deceased and the plaintiff's mother had started to deteriorate. From then until 1942 clearly it was a very unhappy household with continual arguments between the parents. The plaintiff himself in 1941 after taking the intermediate certificate, left school and got a job to help his mother to meet the living expenses. Clearly the deceased was not anxious to support her and wanted to be away from her. 8 In August 1942 the plaintiff's mother was ejected by the deceased from the home and thereafter for the next year or so were in a somewhat destitute situation living in a stable in College Street, Sydney while they waited for maintenance. 9 The plaintiff had to support his mother during this time, a matter which no doubt has permanently imprinted itself on his mind and in his memories of family life in such times.. 10 In late 1942 the defendant met the deceased she having been separated from her husband about a year. It was in early 1945 that the defendant and the deceased started living together in a defacto relationship which continued until the deceased's death. Meanwhile the plaintiff had post-war qualified as an accountant and he lived with his mother at Enmore. The deceased and the defendant were working in a fairly Spartan situation in Sydney, for instance making clothes pegs for sale. Eventually they decided to move to Taree and set up business in a timber mill. That business became successful and ultimately extended into other areas such as caravan parks in which the defendant worked for many years. 11 In 1950 the defendant divorced her husband who she had been separated from for many years. The plaintiff meanwhile in 1953 had married and their son Michael was born on 8 December 1957. Notwithstanding the terrible time that the plaintiff had with his father leaving his mother, the plaintiff after the birth of his son rang the deceased and told him the fact that he now had a grandson. He then sent photographs to the deceased. 12 In the 1950s and the early 1960s the defendant and the deceased expanded their interests in the Taree area including opening a caravan park and other activities. 13 In 1961 the plaintiff and son Michael travelled to Taree in order to see the deceased. They did not do so as he was not there but they did see the defendant. After that time a Christmas card was sent by the plaintiff and his wife to the deceased and for some years up until 1969 there was a response from the deceased returning Christmas cards to them. 14 It was in 1969 that the plaintiff again tried to meet his father. In fact he saw the deceased's brother Donald on a visit to Taree and was told by him it would be very awkward at that time if he saw his father. Why that is so was not explored in the evidence, although it is apparent that the deceased and the plaintiff's mother were divorced in 1971 and those matters may have been under consideration at the time he saw the brother Donald. 15 In 1990 there was another occasion when the plaintiff came to Taree and this time he did meet the deceased and there is some evidence of photographs of the two of them together. 16 The plaintiff's mother died on 12 July 1990 and the plaintiff conveyed that information to the deceased. After this time there were, still in the early 1990s, Christmas cards sent by the plaintiff to his father the deceased and he would write a note in them. I am satisfied that the evidence does disclose the sending of these cards and that on this occasion the deceased did not respond to them. 17 The defendant does not acknowledge, remember or know of the sending of those cards but clearly the records kept by the plaintiff and his wife shows that this contact was continued. By 1994 the plaintiff's son Michael had qualified and obtained a Master's degree in Social Science and on this occasion the plaintiff sent a photograph of his son in his wig and gown to the deceased. There was no response and it is to be noted that the deceased never ever met Michael, his grandson. 18 In July 1995 the Will in question was executed, it was also in this year that Michael started his own life. He entered into a defacto relationship with Virginia Close, she had two children at this stage, one was Olivia who was born on 27 June 1992 and the other was Sebastien who was born on 15 November 1989. Thereafter Michael and Virginia had further children themselves, Isabeau in May 1997 and Paris in April 1999. It was on 17 June 1997 that the deceased died. 19 In due course the proceedings were commenced and a substantial part of the real estate and other assets were distributed to the defendant. In addition she paid out the legacies of $251,000 that I have referred to. 20 In applications under the Family Provision Act the High Court has recently in Singer v Berghouse (1994) 181 CLR 201 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 course 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." 21 As indicated by the High Court it is necessary obviously to consider the plaintiff's situation. 22 The plaintiff is married, is 72 years of age and has one son Michael. The plaintiff has been married since 1953. Given the length of the marriage and one which appears to have been happy it is appropriate to take into account the assets of both the plaintiff and his wife. I will firstly deal however with the plaintiff's assets. 23 At the moment he has shares worth $428,665, bank accounts of $129,709, he has half the proceeds of sale of his St Ives home of $206,500, furniture and effects of about $50,000, a half interest along with his wife in the piece of land at Lennox Head where they wish to settle, a half interest being valued at $70,000 and cars having a total value of $19,000. This totals $903,874. 24 His wife for her part has shares of some $291,050, bank accounts of $136,074, half interest in land of $70,000, furniture and effects of $50,000, half the sale proceeds of St Ives of $206,500. This totals $753,624. They between them have assets worth $1,657,494. 25 Their income situation is modest, however it is sufficient for their circumstances. They have or expect to receive between them somewhere in the order of $55,900 for the year ended 30 June 1999. If one allowed some $12,000 for tax that provides a fortnightly income of about $1650. Their outgoings which have been reduced because they have sold their St Ives property are presently $1350 per fortnight plus some rent while they decide whether to build on their land at Lennox Head. 26 As far as the plaintiff's health is concerned he does have problems with arthritis but most of those have been fortunately overcome by the fact that he has decided to move to Lennox Head no doubt to be closer to his son who lives at Byron Bay. 27 It is necessary for the court to consider the relationship between the plaintiff and the deceased. Clearly there was a very acrimonious break up between the deceased and his first wife. The plaintiff was left abandoned by his father having to try and work to save sufficient money to support his mother. 28 To the plaintiff's great credit he continued to make attempts to contact the deceased as he matured and made his way in life. It seems to me that a consideration of these contacts tends to show that the plaintiff was rebuffed by the deceased and I suspect that the deceased did not want to have anything to do with the plaintiff or anything associated with his first marriage. 29 So far as I am concerned I am not critical in any sense of the plaintiff and such lack of contact that might be referred to I think would not in any way impact upon the order that should be made in his favour. If anything the fact that he did persist in making contact indicates a concern that he had for his father. 30 It is also necessary to have regard to any others having a claim upon the bounty of the testator. In this regard there are a number of legatees who received legacies totalling $250,000 to which I have referred. 31 The defendant has given evidence which identifies the persons and the role they played in the life of the deceased. No doubt the deceased seems to have carefully considered those who had assisted him and been part of his life for the many years that he was in the Taree area. There is no evidence of the means of those persons. 32 The most important person to consider of course in this category is the defendant. She is 80 years of age, is single and has no dependants. She appears in reasonable health although certainly she is frail. Her financial situation is quite reasonable, she has assets of her own of some $591,527 and she has received from the estate $592,522. Those assets are currently made up of the following: Real estate in various parcels which include the home $495,000, loans $145,007, shares $95,035, cash $331,878, plant and cattle $123,658, motor vehicle $27,000 totalling $1,217,570. She has liabilities of $33,532 leaving her net worth of $1,184,038. Clearly she is in comfortable circumstances and adequately provided for. 33 So far as the relations with the deceased are concerned it is to be noted that she and the deceased had 52 years together. That apparently was a happy relationship but it also had its elements of hard work for the defendant. She assisted the deceased assiduously during their relationship and helped him build up the assets which now form part of the estate. She worked long hours and for no reward in this regard. 34 It is necessary to see how the plaintiff may have been left without adequate and proper provision for his maintenance, education and advancement in life because that is the question which the court has to consider under s 7 of the Act. 35 The plaintiff says that he had been left with inadequate provision to the extent that: (1) he has depleted his assets to assist his son Michael; and (2) is likely to expend further funds in the future in assisting his son. He does not advance any other need which is particular to himself. 36 In these circumstances it is necessary to look at Michael's position. Michael is a person who obviously has some qualifications, I have referred to him having a Master of Social Sciences. The evidence discloses that he has recently been a University lecturer earning in excess of $50,000 per annum. He is in a defacto relationship and is in a position along with his partner of caring for four young children. 37 His financial situation and that of his partner are, that they have two blocks of land, one at Lennox Head which is worth $135,000 and one at Byron Bay costing $115,000. $40,000 has been spent moving an old house there and about $60,000 is in the process of being spent mainly from funds from his father in renovating that property. That puts a total value of some $350,000. They have a mortgage of $240,000. This leaves a balance between them of $110,000. 38 They have small superannuation benefits which they cannot access at this stage and there is minor amounts of $3,000 in personal effects and a car. Clearly they are not in a good situation but they are in a situation which is not uncommon to many young couples. 39 They do have difficulty in that the daughter Olivia suffers from a range of medical disabilities and is in effect profoundly disabled. She has a hole in the heart and a number of birth defects which means that she requires full-time care. Those difficulties were obviously evident when Michael and his defacto partner commenced their relationship. 40 As a result he receives a carer's pension of $307.69 per fortnight and family assistance of $308.29 per fortnight. His partner Virginia receives in effect $358 per fortnight by way of maintenance for her children and a parenting allowance of $293. She also receives a special disability allowance of $75.60 per fortnight. They have expenses which are not unusual given their assets and they clearly have been supported by the plaintiff. 41 The assistance which the plaintiff has given to his son Michael to date between December 1985 and November 1999 amounts to a sum of $162,076.74. Some comes from the plaintiff's wife but the majority from the plaintiff. There are continual payments for Mastercard and Visa accounts and payments for the mortgage which have been met as Michael has been unable to meet them. 42 Apart from this the plaintiff says that he wishes in the future to give further assistance to his son Michael and his family. In his recent affidavit he lists this as completion of urgent renovations $7,370, replacement car to hold six people and wheelchair $40,000, day to day living expenses $23,000 and legal expenses for child maintenance $5,000 totalling $75,370. 43 The scheme of the Family Provision Act is one which provides under s 7 for orders to be made in favour of eligible persons. These persons are defined in s 6. Michael clearly is not an eligible person and he cannot have an order made in his favour. This much he recognised when he discontinued the proceedings earlier this year. 44 The plaintiff suggests that as there is a good moral need for him to help his son he thus meets the criteria in s 7 and s 9 of the Act. I have no doubt it is morally appropriate for the plaintiff to help his son. To the extent that he does so and disadvantages himself he is to be commended. 45 It is quite a different situation where there is a legal obligation of a parent to provide for a child. An example which readily springs to mind is a child under 18 in the care and custody of a claimant. That is not the situation in the present case. 46 Michael is 42 years of age and well qualified. He has chosen his present course in life including pursuing parenting responsibilities for Olivia. There is no legal obligation upon the plaintiff to assist Michael in these circumstances, there is only a moral obligation. 47 In Crawshaw v Perpetual Trustees Co. Ltd Young J, 27 April 1988 his Honour had to consider a slightly different problem but at least it throws some light on the present claim. His Honour at page 7 of the judgment says as follows: "This raises a problem that I do not think has been covered by the cases, namely, what happens to a plaintiff who in advance of a decision in an application under the Act but after the date of the testatrix's death incurs substantial liabilities. Part of these liabilities have been because he has been generous to his step daughter in giving her $15,000. It is clear from other decisions under this Act that the plaintiff who makes such gifts cannot, because he or she is impoverished thereby, claim that that impoverishment is something that should be reimbursed because of some moral duty that the testatrix owed." 48 In the present case there is of course no suggestion of unwarranted gifts to Michael. In the context of moral duty as his Honour there refers to it (even though this expression is not approved at the moment) the Act does specify to whom a duty is owed. In this case it is not Michael. 49 To allow the plaintiff's claim is simply to accede to a claim which the Act does not recognise. Accordingly, in my view the plaintiff has not been left without adequate and proper provision for his maintenance, education and advancement in life. 50 Accordingly, I dismiss the summons. I order that the defendant's costs on an indemnity basis be paid out of the estate or retained out of the estate. 51 I will hear further submissions on costs. 52 I will allow Ex.E being photographs of Olivia to be returned. oOo