Farley v Farley [1999] NSWSC 328

New South Wales Supreme Court CITATION : Farley v Farley [1999] NSWSC 328 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 3959/97; 4021/97 HEARING DATE(S) : 26 February 1999 JUDGMENT DATE : 14 April 1999

In 3959 of 1997 - Wayne Lance Farley (P) PARTIES : Jeanette Bertha Farley (D) In 4021 of 1997 - Jeanette Bertha Farley (P) Wayne Lance Farley (D) JUDGMENT OF : Master McLaughlin

COUNSEL : Mr. D. M. Bernie (P) Mr. J. E. Armfield (D) SOLICITORS : C P White & Hetherington (P) Shaddick Baker & Paull (D) CATCHWORDS : Family Provision; Claims by adult son (of first marriage) and by widow; Widow had formerly been de facto spouse of testator; Will of testator revoked by his marriage eleven days before his death; Intestacy; Administration of estate upon intestacy; Competing claims of adult son and of widow; Estate not sufficient to meet both claims; Claim of widow is of a higher order than that of adult son ACTS CITED : Family Provision Act 1982 Wills Probate and Administration Act 1898 DECISION : See paragraph 40

SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER McLAUGHLIN

Wednesday, 14 April 1999

3959 of 1997 WAYNE LANCE FARLEY -v- JEANETTE BERTHA FARLEY 4021 of 1997 JEANETTE BERTHA FARLEY -v- WAYNE LANCE FARLEY

1 MASTER: These are proceedings under the Family Provision Act 1982. By summons 3959 of 1997 filed on 11 September 1997 Wayne Lance Farley claims an order for provision for his maintenance, education or advancement in life out of the estate of his late father, Lance Robertson Farley (to whom I shall refer as "the deceased"). I shall in this judgment refer to Wayne Lance Farley as "the plantiff". 2 The deceased died intestate on 17 March 1996, in circumstances to which I shall shortly refer. 3 By summons 4021 of 1997 filed on 16 September 1997 Jeanette Bertha Farley, the widow of the deceased, claims an order for provision for her maintenance out of his estate. I shall in this judgment refer to Jeanette Bertha Farley as "the defendant". 4 At the commencement of the hearing the following orders were made by consent: (1) I order that Wayne Lance Farley be named as defendant in proceedings 4021 of 1997. (2) I order that proceedings 3959 of 1997 and 4021 of 1997 be heard together, and that the evidence in the one, so far as is relevant, be treated as evidence in the other. 5 I have already recorded that the deceased died intestate. Letters of Administration of his intestate estate were on 19 September 1997 granted to the defendant, Jeanette Bertha Farley, widow of the deceased. 6 The assets of the deceased at the time of his death consisted of the following: (a) Real property situate at and known as 54 Scheyville Road, Oakville, having an estimated value of $350,000. (b) Moneys in accounts with St. George Bank, totalling about $31,100. (c) 1985 Ford Fairlane motor vehicle, having an estimated value of $4,000. 7 It was not in dispute between the parties that the present value of the Oakville property was in the range of $385,000 - $420,000, and that it was appropriate, for the purposes of the present proceedings, to adopt the figure of $400,000. 8 The deceased (who had been born on 19 September 1925, and who was aged 70 at the time of his death) had been married twice. Of his first marriage, on 10 December 1951, was born only one child, the plaintiff (who was born on 30 September 1952 and who is presently 46 years of age). 9 The deceased separated from his first wife in June 1976, and they subsequently divorced on 11 January 1978. 10 In March 1980 the deceased purchased for $55,000 the Oakville property, which constitutes the substantial asset in his estate. That purchase was in part funded by a bank loan of $21,877, which the deceased repaid in November 1981, a gift from his father in that amount enabling him to effect such repayment. At about the same time as he purchased the Oakville property the deceased commenced a de facto relationship with the defendant. A contribution of $8,000 was made by the defendant towards the purchase of that property (that sum coming from the property settlement received by the defendant from her first husband in their matrimonial proceedings). 11 In early February 1996 the deceased was diagnosed as suffering from terminal cancer. A few days later, on 13 February 1996, the deceased executed a will. By that will, the deceased appointed the plaintiff to be executor, gave to the defendant a right of residence in the house property at Oakville for a maximum period of two years, and directed that thereafter that property be sold and the proceeds of sale be held as to one half for the plaintiff and one half for the defendant. The deceased gave the residue of his estate to one Narelle Thomas. 12 The day after executing that will the deceased, on 14 February 1996, entered hospital where he remained until his death. On 6 March 1996, some three weeks after executing the will, the deceased married the defendant in hospital. The effect of that marriage was (by section 15 (1) of the Wills, Probate and Administration Act 1898) to revoke the will which the deceased had made only three weeks earlier. It was in consequence of that revocation of his will that the deceased died intestate. 13 Upon intestacy, since the deceased left a wife (the defendant) and also left issue (the plaintiff), and since the value of the estate (excluding any household chattels) exceeded the prescribed amount of $150,000, then (pursuant to section 61 B (3) of the Act) the household chattels, the prescribed amount of $150,000, and one half of the estate (excluding the household chattels and the prescribed amount) shall be held in trust for the defendant and the residue shall be held in trust for the plaintiff. Further, since the deceased at the time of his death held an interest in a dwelling house which was situated in New South Wales, then the provisions of section 61 D of the Act are called into operation. The various circumstances set forth in paragraphs (a), (b), (c) and (d) of that section exist in the instant case. Normally, it would follow, that the defendant widow, in addition to the foregoing assets passing to her upon intestacy, should also receive the dwelling house. However, it will be appreciated that the operative provisions of section 61 D are by that section provided to be "subject to the Fourth Schedule". That Schedule deals with the rights of the surviving spouse of an intestate with respect to acquisition of the matrimonial home. 14 The effect of the definition of "matrimonial home", and the definition of "dwelling-house" in subsection (2) of section 61 A, combined with the provisions of clause 4 (in particular subclause (1)) of the Fourth Schedule, is to give to the plaintiff upon intestacy an entitlement only to the dwelling house itself at 54 Scheyville Road, together with an area not exceeding 2,500 square metres constituting the curtilage of that dwelling-house. 15 It was not in dispute between the parties that the appropriate Local Government authority would not allow a subdivision of the subject property (which comprises five acres), to enable the defendant to exercise her right upon intestacy under section 61 D to"require the administrator to hold that interest [in the dwelling house] in trust for the wife". 16 The consequence of the combined effect of the foregoing provisions of the Wills, Probate and Administration Act is (and the parties were in agreement with such construction of the Act) that the defendant is not entitled to the dwelling-house, but that she is entitled to the household chattels, the prescribed amount of $150,000 and one-half of the remaining estate (having an estimated value of $250,000 --- that is, an amount of $125,000. The other half of the remaining estate ($125,000) would go to the plaintiff. 17 The plaintiff has been married twice. Of his first marriage was born a son, Lance (who is presently aged 15). The plaintiff's first marriage broke down in about 1983 or 1984. The plaintiff married his present wife on 17 July 1993. She has a daughter (presently aged 17), the step-daughter of the plaintiff, who resides with himself, his wife and his son. 18 The plaintiff and his wife conduct a cleaning business. Apparently that business was formerly conducted by them in partnership. It would appear (although the evidence was not particularly precise concerning the relationship between the partnership and the company) that that business is now conducted by a company, Farley Group Pty. Limited, which is controlled by the plaintiff and his wife, who are the sole directors and shareholders of that company. 19 The plaintiff and his wife jointly own a house property at 8 Tranquility Crescent, Bribie Island (a suburb of Brisbane) in Queensland. That house property has a present estimated value of $165,000. It is subject to a mortgage, securing a presently outstanding amount of $119,000. The plaintiff has a savings account, standing at $9,200. He leases a motor vehicle, whilst his wife owns a 1976 Suzuki jeep. In addition, the company owns a Range Rover, which the plaintiff sometimes uses. The company has net assets of $22,000. The plaintiff in the last financial year had an estimated gross income of $42,000, whilst his wife had an estimated gross income $25,000. Neither the plaintiff nor his wife has any superannuation entitlement. 20 The plaintiff left his parental home when he was aged 19, in about 1971, to pursue an apprenticeship. After his parents separated in 1975 he had little face to face contact with his father until the death his paternal grandfather (that is, the father of the deceased) in 1986. 21 The plaintiff was cross-examined with a view to establishing that he was, in effect, alienated from his father. 22 Whatever be the extent of the contact between the plaintiff and the deceased, it is quite clear from the terms of the will which the deceased executed on 13 February 1996 that the deceased himself was not dissatisfied with the extent of that contact, and that he wished, under the terms of that will, to benefit his son, the plaintiff, equally with his then de facto spouse (but subsequently his wife), the defendant. 23 The defendant was born on 21 May 1939, and is presently aged 59. 24 She was married in about 1959, and divorced in 1978. I have already recorded that a de facto relationship commenced between the defendant and the deceased in 1980, at about the same time as the deceased purchased the Oakville property. 25 Upon the death of his father in 1986 the deceased received one half of the residue of that estate. The evidence does not disclose the actual sum he received, although it is unlikely to have exceeded $100,000 (since the gross estate was $219,536, and legacies and specific gifts totalled $8,600). The deceased subsequently used that sum towards building a new residence upon the Oakville property. That residence was constructed in 1990, being completed in September of that year. The defendant contributed $25,000 (which she had received by way of an inheritance from an aunt) towards the construction and the furnishing of that residence. 26 The deceased, who had worked as a section manager at the Hawkesbury Agricultural College, retired from that employment in September 1994. He then worked part-time for Swayne's Nursery for a period of about two years. 27 The evidence discloses that the deceased and the defendant constructed very attractive gardens and landscaping upon the Oakville property, and devoted a great deal of their time to horticultural pursuits upon that property. 28 The plaintiff as a son 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 he has the standing to bring the present proceedings. The defendant, as the widow of the deceased, is also an eligible person, within paragraph (a) of that definition. She also has the standing to bring her proceedings under the Act. 29 The only other person who may possibly be an eligible person is the other beneficiary named in the will of 13 February 1996, being Narelle Thomas. Although served with a notice of claim, she has not chosen to pursue any claim against the estate of the deceased. Accordingly, pursuant to section 20 of the Family Provision Act, the Court is in the present proceedings entitled to disregard the interests of that lady. 30 The defendant and the deceased lived together for 16 years. Throughout almost the entirety of that period they lived in the Oakville property. The defendant contributed to the purchase of that property by advancing $8,000 from her Family Court settlement with her first husband. She also contributed towards the construction and the furnishing of the house, not only the sum of $25,000 (to which I have already referred), but also part of her earnings. The defendant contributed to the conservation of the property by assisting in cultivating flower gardens, assisting in planting and harvesting flowers, assisting in the erection of a greenhouse and the clearing of the paddocks. After the deceased retired, the defendant was the sole breadwinner for the household. She also made important contributions as a homemaker, which included looking after the deceased's own mother while she was ill, and also nursing the deceased at home during his final illness. 31 The defendant is employed as a clerical officer with the Department of Education at the South Windsor Public School. She receives $390 (net) a week from that employment, and she has no other income. It had been the defendant's intention to retire at the age of 60, which age she will shortly attain. However, she now expects that it will be necessary for her to work somewhat longer. Her income is modest, and is barely sufficient to meet her expenses. 32 The practical effect of the application of the statutory provisions to which I have already adverted upon the administration of the intestate estate of the deceased is to require the sale of the Oakville property. That sale, would, of course, deprive the defendant of her home. 33 An attempt was made on the part of the plaintiff to establish that the defendant should be accommodated in some other residence, so that the plaintiff could receive at least the amount to which she would be entitled on intestacy, if not a larger share than one-half of the remainder, after the receipt by the defendant of the household chattels and the first $150,000 (the prescribed amount). 34 I have already expressed my conclusion that whatever might have been the extent of the contact between the plaintiff and the deceased, the deceased appears to have been satisfied with that contact, and that the terms of his will of 13 February 1996 reflect no dissatisfaction with the conduct of the plaintiff in that regard. 35 The problem in the instant case is that, apart from the Oakville property, there is very little in the estate to meet what might otherwise be the legitimate claims of each of the parties. It must be appreciated, also, that out of the assets of the estate other than the Oakville property (being cash in the sum of $23,361) the costs of defendant, as administrator, must be met in upholding the statutory provisions of the intestacy. In the event that the plaintiff were to be successful in the proceedings, he would be entitled also to an order for his costs out of the estate. The amount of cash is not sufficient to meet both sets of costs (estimates of which have, in accordance with the usual procedure, been provided by each party, in amounts totalling $30,000) 36 It has often been said that, in the case of a marriage for a substantial period (and, in the instant case, I would equate the de facto relationship between the defendant and the deceased with such a marriage), the obligation of a testator is, to the extent that his assets so enable him, to ensure that his widow is secure in her accommodation, that she is able to live at a standard no less than that which she enjoyed during the lifetime of her husband, and that she has a fund to meet any contingencies. 37 In the instant case, were the provisions upon intestacy to take effect (let alone, were the plaintiff to receive an amount greater than that to which he is entitled upon intestacy), the inevitable practical consequence would be to dispossess the defendant of her residence. That is something which I am not disposed to permit. 38 In all the circumstances, therefore, even though, had the estate been larger, it might be that the plaintiff could have established an entitlement to an order for provision equal to or even exceeding the amount to which he would have been entitled upon intestacy, I am satisfied that the claim of the defendant as the widow of the deceased is a claim of a higher order than that of the plaintiff. 39 Accordingly, the defendant should receive the Oakville property absolutely. She is also entitled to an order for her costs out of the estate. I have not heard any submissions as to whether she is entitled to an order that the defendant should pay her costs. It is possible that, in the event that the defendant were to pay the costs of the plaintiff of the proceedings 4021 of 1997, then there would be a small balance left in the estate, and the plaintiff would be entitled to share in that balance. The parties should have an opportunity to be heard concerning costs; in particular, whether the costs of the defendant should be paid by the plaintiff. 40 Accordingly, unless within seven days of the date hereof either party arranges with my Associate for the matter to be listed before me for argument as to costs, I make the following orders: 3959 of 1997 Wayne Lance Farley v. Jeanette Bertha Farley 1. I order that the summons be dismissed. 2. I order that the plaintiff pay the costs of the defendant. 4021 of 1997 Jeanette Bertha Farley v Wayne Lance Farley 1. I order that the plaintiff hold the entire estate of the late Lance Robertson Farley ("the deceased") for her own benefit absolutely. 2. I order that the defendant pay the costs of the plaintiff. I certify that this and the preceding pages are a true copy of the reasons for judgment of Master McLaughlin