New South Wales Supreme Court CITATION : Maxwell v Public Trustee [2002] NSWSC 471 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 28/05/01 HEARING DATE(S) : 27/05/02 JUDGMENT DATE : 28 May 2002 PARTIES : Andrew MacKenzie Maxwell (By his next friend Kim Hickman) v Public Trustee JUDGMENT OF : Master Macready at 1 COUNSEL : Mr L. Ellison for plaintiff Mr P Blackburn Hart for defendant SOLICITORS : Carters Law Firm for plaintiff Mr PJ Whitehead for defendant CATCHWORDS : Family Provision. Claim under Family Provision Act by a son who was left out of deceased's will which gave all his small estate to a niece and a nephews. Order for a legacy. No matter of principle. DECISION : Paragraph 30 - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Master Macready Tuesday, 28 May 2002 3161/01 Andrew MacKenzie Maxwell (By his next friend Kim Hickman) v Public Trustee JUDGMENT 1 Master: This is an application under the Family Provision Act 1982 in respect of the estate in the late Milton MacKenzie Maxwell who died between 20 February and 10 March 2001. The deceased was survived by the plaintiff, his son by his second marriage, his ex-wives and a number of relatives that included five nephews and nieces who take an interest under the deceased will. Will of the deceased 2 The deceased made his last will on 7 May 1992 under which he appointed the defendant his executor and trustee. By that will he gave his estate to be divided between his nieces Rebecca Lyn Fechner, Sarah Maxwell, Rachael Maxwell, Chanel Catherine Leaudais and his nephew Darren Bruce Leaudais. The estate of the deceased 3 The deceased's estate consisted of an interest in his mother's estate and the estate has now been reduced to cash. The balance of the estate held by the Public Trustee is $181,881.56. Both parties have incurred costs. The defendant's costs are estimated at $13,662 and those of the plaintiff are estimated $17,192.55. This leaves a net estate of approximately $151,000. Family history 4 The deceased and the plaintiff's mother, who is also his tutor in these proceedings, met in 1980. In 1985 the deceased divorced his first wife. The deceased and Kim Hickman, the plaintiff's mother, were married on 16 November 1985. The plaintiff was born on 24 August 1986 and the family then lived in Newcastle. 5 In 1987 the deceased commenced employment with a council and in September of that year the deceased and Kim Hickman made mirror wills. In 1989 the deceased and Kim Hickman separated. She moved with her son, Andrew the plaintiff, to the residence of her parents at Harboard where she has lived ever since. The deceased at that time moved into live with his parents. 6 In 1991 there was a divorce and counselling which led to the deceased exercising his rights to access for about six weeks. In May 1992 the deceased made the will I have referred to above. In 1995 Kim Hickman commenced a de facto relationship with her present partner Robert Van Steen. The deceased made some child support agency payments for the benefit of the plaintiff in 1996 through until May 2000. In 1999 the plaintiff enrolled in St Paul's College Manly in Year 7 and he is still at that school. 7 The deceased's mother with whom the deceased was living in his latter years made a will on 18 December 2000. She died on 5 January 2001 and under her will apart from legacy of $1,000, the balance went to her three children which included the deceased. It was as a result of this that the only substantial asset in the estate of the deceased arose. Consideration of the plaintiff's claim 8 In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has 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 court 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." 9 I turn to a consideration of the plaintiff's situation. The plaintiff is aged 15 and is presently in year 10 at St Paul's College, Manly. He is totally dependent upon his mother and her partner for his accommodation and support. They reside in a house which is for the accommodation of the tutor's parents although she will have an interest in that house on their death. For the present her right to use the house derives from an agreement between her and her siblings who hold the title. As a result she only has to pay $200 per week towards the upkeep and payment of rates on the property. Their combined income is $971.25 per week that is using their expenses one of which is the payment of the tutor's partner's responsibilities for maintenance of his own children of $160 per week. They have a Land Cruiser which is owned by the tutor's partner worth $15,000 and the total of both their superannuation entitlements at the moment is approximately $31,000. The tutor owes her mother $3,700 for a loan to enable the plaintiff to attend an overseas rugby union tour. She also has other debts amounting to $9,000 10 The plaintiff was slow to develop in some areas when he was growing up and needed private speech therapy during his younger years. According to his present school the plaintiff has special educational needs and is classified in educational terms as mildly intellectually handicapped. He needs services of the special needs teacher at the College and is completing his school certificate through the life skills approach. The school considers it important for his development that he continue year 10 in which he is presently enrolled. As part of the study he is attending Brookvale TAFE College animator mechanical calls for two days a week in order to expand his career options. His mother hopes that he will be able to attend Years 11 and 12 as has been recommended by the school. 11 Notwithstanding his difficulties Andrew has good prospects at sport as he has been chosen for and travelled to the United Kingdom with the school rugby union team. He has now been selected in the 2002 rugby league Eagles Flying Squad that apparently is a precursor to some higher progression in the sport. 12 It is necessary to see how it is suggested that the plaintiff has been left without adequate and proper provision for his maintenance education and advancement in life. In this regard there have been identified a number of particular expenses to do with his schooling and there is also a need to assist with his living expenses. It is also suggested that a sum may be necessary to give him some start in life. 13 The particular expenses concerning his education are the following: -- 1. School fees for Years 11 and 12 which with extras approximate $3000 per annum. 2. Sporting equipment at $260 per annum. 3. Repayment of the debt for last year's rugby tour $3700. 4. Computer and printer $3644. Computer desk and chair $440. 5. A bike $365. 6. Another trip overseas to further his sporting activities $3700 14 These items total $18,809. 15 So far as contributions to his living expenses are concerned there has been tendered the "Costs of Children" documentation which puts forward two different types of approach. The "Lee Scale" seems to be the preferred scale and the last update in 1989 indicated for an 11 to 13 year-old the cost of a child is normally $252.46 a week. This figure is, of course, for a child at least two years younger than the plaintiff and no doubt has increased since 1998. The first of two matters which are relevant are the assessment of the period which could be expected that support should be needed. No evidence has been given as to the future plans for Andrew and this is not meant as a criticism. It may be difficult to assess these and certainly could be something on which the child himself might not presently have an opinion. But clearly there is a possible need for support to the end of his schooling in another two years' time. It may be that his sporting career takes over at that time or, alternatively, he may go into the workforce or perhaps take some course. 16 The other matter that has to be considered on this aspect is the question whether or not the order of the court should take into account the fact that his parents have been able to support him in part and do in fact have the obligation to support him. At the moment the tutor and her partner are paying $120 per week towards school fees and other miscellaneous items for the plaintiff and no doubt also other household expenditure is paid for his benefit. I move to consider the position of others who have a claim on the bounty of the deceased. These are the five beneficiaries under the will of the deceased only one of whom has reached her majority Rebecca Lyn Fechner 17 Rebecca and is aged 26 and she married in 1996. She has two children aged 18 months and 3 1/2 years and is it is expecting her third child. Her income is a parenting payment of approximately $4,000 per annum and her husband is employed as a leading hand with Tamworth Total Cleaning Resources on an income of $30,000 per annum. They have three old cars worth in all $12,000, household contents and effects estimated at $30,000 and $600 in the bank. They have liabilities of some $13,100. They live in the rented accommodation and their income is used totally by their expenses. 18 She says that she had contact with the deceased during his lifetime. She speaks of seeing the deceased at the grandparents' house on special occasions and occasionally during school holidays. Sarah and Rachel Maxwell 19 These two children are children of Ian Maxwell. He was a brother of the deceased. Sarah is aged 15 and Rachel 12. Both children live with Ian and his wife at a property at Qurindi. That property comprises a family home plus 120 acres and is estimated to have a value of $165,000. He and his wife own two or cars worth $10,000, household goods also estimated at $10,000 a tractor, machinery, tools and saddlery also estimated at $10,000. They have liabilities of some $37,800. The house is unencumbered due to the provisions of his mother's will and codicil. 20 At present Mr Maxwell's wife receives a parenting payment of $328.90 per fortnight. In the past Mr Maxwell worked as a storeman earning in the order of $23,000 per annum. He has started a business from home doing show sales and preparation of horses. 21 There is no evidence of the situation or education of these beneficiaries and it is apparent that with their father they used to visit the deceased approximately three or four times a year each for a week duration. Chanel Catherine Leaudais and Darren Bruce Leaudais 22 These are the children of Catherine Leaudais and are aged 14 and 11 respectively. They live with their mother and father at Bangor. Catherine works as a home economist. It is a part-time position and her husband, Bruce, is self-employed in his own business which operates from Wollongong some two hours away from where they live. Her husband is having some dificulty setting up his business and his income for the financial year 2001 was $20,000. Catherine's income for the same year was $15,893. 23 They own their own home at Bangor which is valued at $345,000. They have an investment unit valued at $105,000. They have a 1993 Ford Laser valued at $8,000 and a Nissan Patrol valued at $30,000. As a result of the inheritance, which Catherine received from her mother, she still has a sum available of $154,000. This amount will probably be used to reduce the expenses of the business and perhaps pay some loans the details of which did not appear in the evidence. 24 Chanel is 14 years of age and is a happy healthy and outgoing child. Her parents wish to send her to a Catholic college but could not afford it and she now attends the local public school at Lucas Heights. She is doing well and wishes to pursue a career in the Visual Communications area. One of her many interests is Irish dancing which requires her parents to spend funds on a continual basis for shoes needed for this past time together with dresses. 25 Darren is presently eleven years of age. Unfortunately Darren has suffered and from autism from an early age. He has been under considerable care and the results of his psychology tests over the years are available to his local doctor. These show performance well below average and in fact deteriorating as years progress. His diagnosis is one of autism associated with moderately severe developmental delay. This requires a wide range of specialists to assist in with his education. His prospects for normal adult life and Independence are significantly limited and there is a possibility that he may require supervised residential care as an adult and will have an on going need for medical care. He is of course only 11 but there are enough indicators for his doctor to be concerned about his prospects for independence as an adult. Discussion of the claim 26 The plaintiff is the only son of the deceased and the five children are nieces and a nephew who only had sporadic contact with the deceased during his lifetime. Each of these nieces and nephew will receive approximately $30,000 unless that is reduced by the terms of any legacy to be provided for the plaintiff. Having regard to Darren's situation it is plain that he will need all of his legacy to assist with his development so that he can live a normal adult life. This object can be achieved by providing that the burden of any legacy given the plaintiff falls on the shares given to the nieces. 27 I have earlier addressed the needs of the son, Andrew. When one looks at his history at school there maybe some doubt as to whether he will complete Years 11 and 12. I will however assume this to be the case as at least his parents have expressed the view that they wish him to complete these years. The evidence is silent as to what he will be doing thereafter and as I have pointed out this is often the case. Given that he is currently doing a motor mechanic course it is likely that his further qualifications may be in this area. 28 Having regard to these matters it seems to me that some small sum should also be provided to cover his future education or, alternatively, provide him with some start to his working career. So far as his maintenance is concerned I think provision for maintenance for the next three years at three-quarters of the rate indicated by the tables is appropriate. Taking all these matters into account the appropriate order is that he should receive a legacy of $75,000. 29 The plaintiff's costs should be paid out of the estate of the deceased and the question which arises is the basis on which they should be paid. In Wheelhouse v Public Trustee Young J 23 May 1997, it was held that where there is an application by pensioner mother on behalf of a child and the child was successful, it is appropriate that the mother receive indemnity costs. In this case the mother of the plaintiff is not a pensioner but the income that she and her partner receive is severely limited and she does not have or has not had in the past sufficient to provide all the opportunities that could have been provided to the son. She herself has a number of debts and, accordingly, subject to any submissions that I might receive, I propose to order that her costs be paid on an indemnity basis. 30 The orders of the court are as follows: -- 1. The plaintiff to receive a legacy out of the estate of the deceased in the sum of $75,000. 2. Interest to run on the legacy at the rate provided for under the Wills Probate and Administration Act as and from one month from the date of these orders. 3. The costs of the plaintiff and the defendant on indemnity basis be paid or retained out of the estate of the deceased. 4. The burden of the legacy in 1 above and the costs in 3 above to be borne by that part of the residual estate passing to Sarah Maxwell, Rachel Maxwell, Rebecca Lyn Fechner and Chanel Catherine Leaudais. Last Modified: 05/29/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.