Carruthers v MarshallCarruthers v Marshall and Marshall v Marshall [2001] NSWSC 665

New South Wales Supreme Court

CITATION : Carruthers v MarshallCarruthers v Marshall and Marshall v Marshall [2001] NSWSC 665 revised - 19/10/2001 CURRENT JURISDICTION: EQUITY DIVISION FILE NUMBER(S) : SC 5141/00; 2839/01 HEARING DATE(S) : 30 July - 3 August 2001 JUDGMENT DATE : 3 August 2001

PARTIES : LINDA HOPE CARRUTHERS v MARGARET LESLEY MARSHALL KIM MARSHALL v MARGARET LESLEY MARSHLL JUDGMENT OF : Master Macready at 1

Mr L. Ellison for plaintiff COUNSEL : Mr C. Bevan for defendant Mr Kim Marshall in person SOLICITORS : Teece Hodgson & Ward Turner Freeman for defendant CATCHWORDS : Family Provision by a defacto partner and a son. Estate passes to wife from whom deceased had been separated for some years. Small estate. Orders made for provision with specific orders in respect of costs to cater for variations in the estate. DECISION : Paragraph 71

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5141/00 - LINDA HOPE CARRUTHERS v MARGARET LESLEY MARSHALL

2837/01 - KIM NEIL MARSHALL v MARGARET LESLEY MARSHALL

JUDGMENT

1 MASTER: This is a hearing of two applications under the Family Provision Act in respect of the estate of the late Neil Marshall who died on 31 May 2000 in a plane accident near Whyalla in South Australia. The deceased was survived by his wife, the plaintiff Linda Carruthers, with whom the deceased had been living in a defacto relationship for some years prior to this death, and his son, Kim Marshall. 2 Proceedings have been brought by both Linda Carruthers and Kim Marshall and both matters have been heard together, with the evidence in one being evidence in the other. 3 The deceased's last will was made on 23 December 1992. Under the will the deceased left the whole of his estate to his wife, the defendant, and appointed her executrix. Before moving to the estate it is useful to look at some of the history of the family and the events surrounding this matter. 4 The deceased was born in the UK on 11 June 1943 and the plaintiff Linda Carruthers was born on 13 April 1952. On 23 September 1967 the deceased and the defendant married. They both worked and ultimately on 17 January 1980 their child, Kim Marshall, the plaintiff, was born. He started at school and had his ordinary schooling, although he in fact did not complete the HSC. 5 The plaintiff Linda Carruthers' early life is not of great importance but it was in 1986 that she purchased a property at Petersham for $119,500, her co-owners being Dianne Blackman and Margaret Penson. Apparently she and Ms Blackman in 1989 paid out Ms Penson's interest and the plaintiff and Ms Blackman continued to live at the premises. 6 Having lived elsewhere for some time the deceased and the defendant purchased a home at Herbert Street, Newtown as joint tenants in December 1990. 7 It was in 1992 that the plaintiff first met the deceased at work. Both were involved in the union movement and had positions which brought them into contact. 8 On 12 December 1992 the deceased's last will was made and I have already referred to its terms. 9 In mid 1994 there was further contact between the plaintiff Linda Carruthers and the deceased and the deceased introduced her to the defendant as a workmate. By December 1994 the deceased's marriage to the defendant was suffering from a number of problems. Although they continued to live together until June 1995, problems emerged in 1994. 10 In June 1995 there was a change. It is apparent that the plaintiff, Ms Carruthers, stopped living with Ms Blackman at Petersham. She took a lease on a property at 80 Australia Street, Camperdown, still retaining her ownership in the Petersham property. 11 In June 1995 the deceased left the matrimonial home at Herbert Street, taking a single bed with him. He went to live at Australia Street, Camperdown. It was at this point that the plaintiff Linda Carruthers says that a defacto relationship commenced. She says that in fact it was in late 1994 that they first had an intimate relationship. The deceased paid $125 per week to the plaintiff as a contribution and I will come back in due course to whether in fact the defacto relationship commenced at that time. 12 During 1996 the deceased and the defendant settled their property affairs. They had a property settlement and the defendant received $175,600, being half the value of the home and a holiday house at Cannon's Creek in Victoria. The deceased and the defendant remained married. No application was made for dissolution and this is why the deceased's will still takes effect. 13 In the middle of 1996 during the course of those property settlement negotiations there were some discussions between the deceased and the defendant to the effect that he intended to leave his will unrevoked so that the defendant could hold the estate for the son, Kim, who at that stage of course was only about 16. 14 In late 1996 the plaintiff actually advanced $35,000 to the deceased to assist him to pay the first instalment of his property settlement with the defendant. 15 In November 1996 the plaintiff and her sister sold a home unit at Darlinghurst which they had inherited from their father. The plaintiff received $126,819 from that sale. 16 In February 1997 the sum of $150,000 was paid by the deceased to the defendant to complete the property settlement. The actual funds for this were provided by the plaintiff Linda Carruthers and they were provided as to $126,819 from the share of the father's estate and $23,282 lent to the plaintiff by family. 17 By July 1997 the plaintiff had resolved her property interests with Dianne Blackman. She sold her share and received $127,142. 18 In August 1999 there was a transfer pursuant to the arrangements for the property settlement between the deceased and the defendant. There was firstly a transfer from the defendant to the deceased pursuant to that property settlement. Thereafter the deceased transferred the property to himself and the plaintiff Linda Carruthers as tenants in common. Clearly he did this intentionally. He would know the difference, having previously owned a property as joint tenant. 19 Over the course of the next few years the plaintiff Linda Carruthers and the deceased lived at Herbert Street, they having moved there probably in about February after the completion of the property settlement between the deceased and his wife. Thereafter there were a number of improvements to the property and the loan on the property was renegotiated to allow a substantial upgrading of the house. 20 It was on 31 May 2000 that the deceased was killed in an aircraft accident in the Spencer Gulf near Whyalla. 21 In July 2000 the plaintiff completed an application for payment to her of the deceased's death benefit entitlement under his superannuation policy with the Superannuation Trust of Australia. The amount of the benefit was $205,000 and she sought the whole of that amount. The son, Kim, also made a claim on it on 25 October 2000. Late in 2000 the plaintiff Kim also filed a death benefit claim with the Compensation Court in which the plaintiff Linda Carruthers was also joined. The defendant was also made a party in due course. 22 Probate was granted in November 2000 and on 24 November the Superannuation Trust of Australia approved a payment of 80 percent of the benefit to the plaintiff Linda Carruthers and 20 percent to the son, Kim. 23 Proceedings were commenced in this matter on 21 December 2000. 24 On 27 March 2000 Kim received two cheques totalling $41,153.22, being his share. On 30 March the plaintiff received two payments totalling $164,612, being her share. 25 The property in Herbert Street has now been valued at $525,000. 26 Between June and July the plaintiff lent $10,493 to the deceased's estate to assist it to pay its share of the mortgage payments for Herbert Street. In mid 2001 the defendant borrowed $8,631 from her son, Kim, which was provided out of the superannuation share to continue to make mortgage payments. 27 On 26 July 2001 Judge Maguire in the Compensation Court awarded $200,000 in death benefit under the Workers' Compensation Act to the plaintiff. Nothing was awarded to either Kim or the defendant. 28 The hearing of the matter commenced before me on Monday of this week, namely 30 July. The matter was initially set down for two days. However, it ran for four days. We are now into the fifth day on which I am giving judgment. 29 It is necessary to look and see what are the present estate assets. There is first the one half share of the Herbert Street property, that half share having a value of $262,500. There is the property at Cannon's Creek in Victoria which has a vandalised holiday home on it and the evidence shows that that is worth $55,000. There is also a possible claim under an insurance policy for $100,000. There is a claim for a Mercantile Mutual life policy of $28,679. 30 At the present time the estate has a liability for the mortgage on the Herbert Street property of $109,174. There is a mortgage on the holiday home of $37,680. 31 There are some other liabilities. There is firstly $37,360 said to be due to Ms Carruthers by the estate as a result of her advance of $35,000 and advances for some dental work. There is the $10,493 advanced by Ms Carruthers to meet mortgages. There is a liability to Kim Marshall for $8,631. 32 It is necessary that I refer in some detail to the ACE Insurance death benefit policy. That is a policy which is issued by American Express or one of its associated companies. The insurers have at this stage declined to pay the policy until an inquest is held following upon the crash of the aircraft near Whyalla. The reason for it is that the policy contains the following exception: "Injury occurring at a time when the insured person is flying, or engaging in aerial activities otherwise than as a passenger in an aircraft that is authorised to fly under a law that relates to the safety of an aircraft."