New South Wales Supreme Court CITATION : Carrick & Anor v Public Trustee - Estate of Carrick [2002] NSWSC 1000 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 4562/2001 HEARING DATE(S) : 21 October 2002 JUDGMENT DATE : 25 October 2002 Julie Ann Carrick (First Plaintiff) PARTIES : Jennifer Margaret White (Second Plaintiff) Public Trustee (defendant) JUDGMENT OF : Acting Master Berecry Mr B Sharpe (Plaintiffs) COUNSEL : Ms Tzannes (Defendant) P W Turk & Associates (Plaintiffs) SOLICITORS : Mr B Maher Solicitor for the Public Trustee (Defendant) CATCHWORDS : N/A LEGISLATION CITED : Family Provision Act - s 7 DECISION : See para 41 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ACTING MASTER BERECRY FRIDAY, 25 OCTOBER 2002 4562/2001 - JULIE ANN CARRICK & ANOR v PUBLIC TRUSTEE - ESTATE OF SHIRLEY LORRAINE CARRICK JUDGMENT 1 MASTER: On 25 May 1991 the deceased, Shirley Lorraine Carrick, and her husband, Anthony Carrick executed mutual wills. Each provided that the surviving spouse was the sole beneficiary of the deceased's estate. If however, the spouse predeceased the testator, then each provided that their daughter Bronwyn Carrick would receive the survivor's estate absolutely. Anthony Carrick predeceased his wife by approximately six weeks. Shirley Lorraine Carrick died on 30 July 2000. Therefore, Bronwyn Carrick as sole beneficiary of the deceased's estate is entitled to all the assets of her mother's estate. 2 The Public Trustee was appointed as executor and trustee of the deceased's estate. A grant of Probate was obtained by the Public Trustee on 29 September 2002. The plaintiffs Julie Anne Carrick and Jennifer Margaret White are daughters of the deceased. Pursuant to s 7 of the Family Provisions Act (the Act) they commenced proceedings on 13 September 2001. The proceedings are therefore brought within time. 3 The deceased had five children two of whom predeceased her. Therefore, at the date of her death the only surviving children were the plaintiffs and their sister Bronwyn Carrick. Therefore, the plaintiffs are eligible persons pursuant to s 6(1)(d) of the Act. The Estate 4 The inventory of property to the Probate application set out the following assets of the deceased. $ Real Estate – 59 Lawrence Street, Peakhurst 300,000.00 Commonwealth Bank Account 1,000.00 Shares 2.80 Total $301,091.13 5 Subsequently it was discovered that the deceased had an insurance policy with Royal and Sun Alliance valued at $1,401.30 and that the NRMA shares were valued at $1,292.28. 6 For the purposes of the application the parties accepted a valuation prepared by Christopher Makomaski a registered valuer. His opinion is that the Peakhurst property is worth approximately $350,000.00. Currently the estate's account balance is $2,643.00. Therefore the value of the estate is approximately $353,000.00. 7 Bronwyn Carrick currently resides in the Peakhurst property. Financial position of each of the siblings Julie Ann Carrick 8 For the financial year ending 30 June 2002 Julie's taxable income was $73,391.00. Tax payable on that amount was $21,873.77 leaving approximately $51,000.00 net. Her weekly net income is therefore approximately $980.00. Her evidence is that her expenses amount to approximately $756.00. Leaving a surplus of $224.00 per week. Her assets are as follows: Assets $ Property 13 Lawrence Street, Bayswater, Perth (half shares 75,000.00 Furniture and household items 10,000.00 Cash on hand 800.00 Superannuation entitlements approximately 70,000.00 9 The total assets are approximately $156,000.00. Liabilities $ Home loan 68,535.00 Credit Card debt 26,000.00 Overdraft 1,000.00 Loan from daughter 10,000.00 Legal costs of these proceedings 10 The total is approximately $105,000.00 excluding the costs of these proceedings. 11 Jennifer is currently working as a nurse in Derby, Western Australia. Her evidence is that she will continue in this position until the end of 2002 when she will return to Perth. The property at Bayswater is located in the Perth metropolitan area. It is a property which was purchased jointly with her then de facto partner in 1992. The property is currently valued at approximately $150,000.00. Julie's evidence was that at the time of purchase of the property her daughter lent her $10,000.00 towards the purchase price. This amount is still owing to the daughter. The Perth property is currently occupied by Julie's son who has recently found employment with a hospital in Perth, and she is expecting him to pay her $50.00 per week on account of board. Jennifer Margaret White 12 Jennifer's evidence is that for the last financial year her income was $78,000.00 gross. That income is received from two sources firstly, her income as a deputy principal of a high school in Darwin; and secondly, through the rental of a property she owns in Perth. There are no details of her tax liability and it is difficult to calculate as the income from the Perth property is structured in such as way that it is negatively geared for the purposes of taxation. The probability is that the tax payable is within the region of $20,000.00. Thus her gross income would be approximately $58,000.00 giving her a weekly income of approximately $1,115.00. Her weekly expenditure excluding tax comes to $867.00. Therefore, the plaintiff has a surplus of $248.00 per week. Jennifer's assets are as follows: Assets $ MLC Insurance Policy 50.000.00 Darwin property 165,000.00 Perth property 160,000.00 Furniture and household items for Darwin and Perth properties 45,000.00 Personal effect/jewellery 2,000.00 Cash (Credit Union) 1,000.00 Motor vehicle 4,000.00 Superannuation 80,243.96 13 The total assets are approximately $507,244.00. Liabilities $ Home loan – Perth property 100,000.00 Home Loan – Darwin property 69,000.00 Credit Card – Visa 3,000.00 Legal costs for these proceedings 14 The total is approximately $172,000.00 excluding the costs of these proceedings. 15 In relation to the Perth property Jennifer's evidence is that her daughter Katie paid a deposit of $30,000.00 towards the purchase price. However, there was no evidence put on by the daughter concerning this loan and no independent evidence corroborating the debt. Jennifer intends to give the property to Katie once she completes her education. She is currently in her final year of a law degree. Jennifer's evidence is that she is currently supporting her daughter to the extent of about $1,000.00 per month, and is about to pay $3,000.00 for repairs to her son's motor vehicle. Bronwyn Ila Carrick 16 Bronwyn's owns no reality and prior to moving into the deceased's home rented a unit with her son at Ryde. However she made all rental payments on that property. Currently her asset position is as follows. Assets $ Superannuation rollover fund 49.000.00 Motor vehicle 12,000.00 Household furniture 10,000.00 Stereo, VCR and Computer 5,000.00 17 The total assets are approximately $79,000.00 Liabilities $ Personal loan 15,138.08 Mastercard 17,674.37 Son's car loan 22,328.61 The total is approximately $55,141.00. 18 Currently she is employed as a part-time accounts receivable clerk earning approximately $510.00 per week. Her expenses amount to $342.00 per week. I have not included the expense that she claims in respect of supporting her son Adam. I also will discount the liability in respect of Adam's car loan. Therefore, Bronwyn's asset position is that her assets exceed her liabilities by some $52,000.00. Family background 19 It is not alleged that any of the daughters did not get on with their mother or that their mother was in any way disappointed with them. The plaintiffs moved away from Sydney many years ago. Jennifer moved to Darwin in 1978 and pursued a teaching career in that city. Julie moved to Western Australian in late 1988. Both Julie and Jennifer have continued to reside in Darwin and Western Australian since those dates. 20 Bronwyn remained in Sydney. Prior to the death of the deceased she resided in a unit at Ryde. Bronwyn had greater opportunity to visit and care for her parents. There appears to be no dispute that that opportunity was availed by her from time to time. Her evidence is that her son developed close relationship with his grandparents and he would accompany them on many outings. Evidence was also given however that both the plaintiffs' children were close to the deceased and that Julie sent her children for school holidays each year to Sydney to be with the grandparents. Jennifer's evidence is that she made arrangements for the deceased to visit her during winter each year for about four to six weeks. This happened from between 1977 and 1995. Her evidence is that she maintained regular telephone contact with the deceased and visited her in the mid 90's. The last occasion she visited her parents was in January 2000. 21 Julie also maintained contact with her parents mainly through telephone conversations. However, in 1999 she visited her parents at Easter and mother in August. She also tried to organise home help and meals-on-wheels. However, the evidence from all parties was that the deceased was a proud woman and when these arrangements were made for her she promptly cancelled them. 22 The plaintiffs' evidence is that the house was not well maintained, and was in an unhygienic state over at least the last 12 months of the deceased's life. It is inferred that the Bronwyn did not care for her parents to the extent that she has attempted to make out. In cross examination she denied that the property was in the state that her sisters alleged. Her evidence is that, especially during the last 12 months of their parents' life, she would visit them daily after work to ensure that they had taken their medication. She also did the washing and ironing and cleaned the house each weekend while her son would from time to time mow the lawn. Her evidence also is that she attempted to hire cleaning help, but for the reasons I have all ready given the deceased refused that assistance. 23 Evidence from Mrs Cantor, a neighbour of the deceased, was that her husband would mow the front lawn of the deceased's property however, a person was paid to mow the back lawn or from time to time Bronwyn's son would mow the lawn. The neighbour also gave evidence that the deceased looked forward to visits from the plaintiffs, and that she had great love for her three daughters. 24 It was alleged by Bronwyn that her sisters merely used the parents' place as a convenient stop to go on shopping sprees or visit friends, or use it as a base to go to Canberra. However, this was denied by both plaintiffs and the evidence of the neighbour appears to support the plaintiffs. The evidence was that the deceased accepted that her two daughters had friends and acquaintances in Sydney whom they probably had not seen for some time and therefore wished to spend some of their time in Sydney visiting friends. The evidence was that whenever they visited the deceased in Sydney they stayed with her and were at the property during the course of the day and of the night time although, they went on shopping trips and visited friends. It seems to me that that is not an unusual practice to adopt, and in fact the deceased accepted that as being quite normal. She still had the opportunity to spend time with her daughters, but realised that her daughters also had friends who they would like to see from time to time. 25 Therefore, there is nothing in the evidence with suggested that the plaintiffs were estranged from the deceased. In my view the relationship was a normal relationship constrained only by the distances that they were apart. It would seem that the deceased love them, they loved and to the extent possible cared for the deceased. I do not find anything in their conduct which could in any way be regarded as disentitling them from making an application under the Act. Indeed the reason given by the deceased that there was no provision made for the plaintiffs, was that she had formed the view that they were reasonably well off and did not need assistance from her. It is interesting to note in the will that had Bronwyn predeceased the deceased then the estate would have gone to the plaintiffs in equal portions. Has there been adequate provision made for the plaintiffs? 26 The Court can only make an order under s 7 when a number of matters are found to exist. Firstly, the person making the application must be an eligible person, an eligible person is defined in s 6(1). The plaintiffs fall into category (b) under the definition, ie., are children of the deceased. Therefore the criteria of eligibility has been met. Secondly, the Court is to take into account the circumstances of the plaintiffs at the time the order is made. Thirdly, the Court shall not make an order unless it is satisfied that the provision made, either during the deceased's lifetime or out of the estate, is inadequate for the proper maintenance, education and advancement of life of the plaintiff. In considering the second two matters, the Court should also have regard to matters contained in s 9(3) of the Act. 27 There is no evidence that during the deceased's lifetime any provision was made for either of the plaintiffs other than providing accommodation, education and sustenance during the time that they each remained a part of the deceased's household. Once the plaintiffs left home there is no evidence that any provision was made by the deceased for them. Under the terms of the will the plaintiffs only take provided the deceased's husband and Bronwyn predecease her. The deceased's husband died six weeks before her. However, Bronwyn survived the deceased therefore she takes the entire estate. Thus the deceased has made no provision for the maintenance, education and advancement of the plaintiffs. At the time the deceased made her will she was of the view that the plaintiffs did not require any assistance from her estate. Therefore, she left her estate to Bronwyn. At the time of the making of the will, the plaintiffs were either married or in a relationship and owned property. Bronwyn however was neither in a relationship nor owned property, although she was in fulltime employment. However Bronwyn it would appear, had no formal training whereas the plaintiffs were trained as teachers and Julie subsequently retained as a nurse. So both the plaintiffs have skills which enable them to more readily obtain employment than their sister Bronwyn. 28 It is necessary to look at the position of all three siblings to determine whether provision ought to be made for either or both of the plaintiffs. It is clear that no provision has been made but it does not follow that either of the plaintiffs require provision out of the estate for their proper maintenance and advancement in life. 29 I have set out the current financial position of each of the sisters. Julie is currently employed as a nurse in Derby, Western Australia. Her contract expires in December when she anticipates she will return to Perth, and resume working as a nurse in one of the Perth metropolitan hospitals. She also has training as a teacher, although her evidence is that she has not taught for over 20 years, and therefore it would be very difficult to obtain employment in that profession. There is evidence of a back injury. However, Julie states that she has not had an acute episode since the last 1980's, and therefore has not sought medical intervention. However, she avoids any strenuous tasks and attempts to get plenty of rest. The short term future therefore is that she is able to cope with her job as a nurse. 30 Julie's current net income is approximately $52,000. From that income she is able to meet all her expenses. However, in the last 12 months her Visa debt has increased substantially. In evidence she was unable to give a reason why the debt had increased by $12,000.00 over a 12 month period. She was able to account for some air travel but that seemed to explain only a small proportion of the increased Visa card debt. 31 Her home in Bayswater, Western Australia is jointly owned with a former de facto partner. The value of the property is given at $150,000. Her evidence is that she borrowed $10,000.00 from her daughter Tessie. When cross examined in relation to this amount, her evidence was that Tessie received that sum by way of a legacy from an uncle's estate. Currently the mortgage stands at approximately $68,000.00. Both she and her former de facto partner are jointly liable for the mortgage. Julie would like to be in a position where she can pay out her former de facto partner. She would also like to discharge the mortgage, repay the loan to Tessie and extinguish the credit card debt. In total those items come to approximately $104,000.00. Her affidavit evidence was that she cannot afford luxury items such as a car, television of VCR. However, in cross examination it was not a matter of not being able to afford some of those items, but merely a matter of prioritising what she saw as matters of importance to her. Her evidence is that she also supports her son and provides some financial support to her daughter Tessie who currently works in Melbourne. Her son, Henri lives in the Bayswater property. Julie's evidence is that she buys his clothes, feeds him, pays for his car costs, entertainment and other living expenses. She is hoping that in the immediate future he will start contributing by paying her $50.00 per week for board at Bayswater. It would seem to me that from her income Julie is adequately able to cover her day to day living expenses as well as those of her son. However, it does seem that she does not have the ability to make a significant reduction in the mortgage, reduce the credit card debt or pay out her former de facto partner. 32 Jennifer's asset position has been set out early in the judgment. She is currently earning approximately $78,000.00 per annum. She is employed as a deputy principal of a high school in Darwin. She owns two properties, namely a unit in Darwin in which she resides, and a unit in Perth which is occupied by her daughter Katie who is a final year law student, together with a fellow student. They both pay $150.00 per week to Julie for accommodation at the Perth unit. Julie's evidence was that the Perth unit was purchased with the view of giving it to her daughter once she completes her studies. She said that the daughter contribution $30,000.00 towards the purchase of the property. Jennifer borrowed $100,000.00 from the ANZ Bank under an interest only mortgage. There was no evidence put on which established that the daughter made any contribution whatsoever to the purchase of the Perth unit. In cross examination Jennifer admitted that the property was in her name and that she had the right to mortgage, lease or sell the property. 33 On completion of Katie's education Jennifer intends to transfer the property to Katie. Her current liability, in respect of the two properties, amounts to approximately $169,000.00. There is a mortgage on the Perth property for $100,000.00 and a mortgage of the Darwin property for $69,000.00. Jennifer supports her daughter to the extent of paying her $1,000.00 per month. She also is giving some support to her son who has recently been involved in a motor vehicle accident. The costs of the damage to his car is approximately $3,000.00 and she has undertaken to pay for the repair to the motor vehicle. She also pays for car registration and insurance for the motor vehicle used by her daughter. The evidence is that she is able to meet all of these expenses from her income. 34 Both she and Julie have superannuation benefits, although those benefits are not available to them at this stage of their life. Jennifer has the flexibility of two properties to either raise cash or to sell one to discharge the mortgage on the other. She is in receipt of a large income, has a very small credit card debt and other than weekly expenditure, the only debts she has are in respect of the mortgages and her credit card. 35 Bronwyn's asset position is set out earlier in this judgment. She moved into the deceased's premises not long after her father died. She has remained residing in those premises ever since. At the time that she moved into the premises, she also resigned from her position at Elizabeth Arden. At the time of resignation her annual income was $39,000.00. She is currently working part-time as a casual receiving approximately $510.00 per week. Her evidence is that she prefers to work in the area in which she lives, and that was the main reason that she left Elizabeth Arden. Prior to moving into the family home she resided in a unit with her son at Ryde. Her employment was at Epping. Once she moved into the Peakhurst home she was not prepared to travel from to Peakhurst to Epping each day. Her evidence is that she has looked for suitable employment in the Peakhurst area, but as yet has not been able to find any permanent employment. 36 It would seem to me that whilst she is on a lower income than her two sisters a large proportion of her income is spent not on herself but on her son. Up until recently she continued to maintain the unit at Ryde for which she paid $674.00 per month. Recently she relinquished the lease and the son has moved in with her at Peakhurst. She has personal loans and a Mastercard debt totalling just over $32,000.00. However, her son who is currently unemployed is being supported by Bronwyn. Bronwyn has accepted the responsibility for a car loan for her son in excess of $22,000.00. She also meets weekly expenses on the car for approximately $125.00, and supports him to the extent of general expenses of $100.00 per week. It would seem to me that Bronwyn's priorities are very much orientated towards her son. It was put to her in cross examination that she could afford a unit either at Ryde or in the Peakhurst area. Her response to that was that she had not given any thought to looking at alternate accommodation. The majority of her expenses are geared towards her son. It would seem to me that that is a factor that needs to be taken into account when balancing the needs between the three sisters. It is clear however, that Bronwyn is not in the same position as her two sisters, both of whom have property albeit property which is subject to mortgages. Both are on better incomes than Bronwyn, and even before Bronwyn resigned from Elizabeth Arden her salary was lower than that of her two sisters. 37 The deceased's intention was to provide a home for Bronwyn. That testamentary intention can only be interfered with if it is shown that the testatrix did not give proper consideration to the circumstances of her other two daughters. The will was made in 1991, some nine years before she died. The deceased did not review her position in the remaining nine years of her life. However, the circumstances of her daughters changed in that time. Both plaintiffs separated from their partners however, both plaintiffs continued to earn a good income and to have at least some interest in reality. Bronwyn, during this period worked at Elizabeth Arden and received an income at the end of that period of $39,000.00. However, at no stage during this period did she own her own home. Although in her recent affidavit there was no disclosure of any superannuation entitlements, in her earlier affidavit there is evidence that she has a superannuation rollover fund. When cross examined on this matter, she agreed that that fund currently stood at approximately $49,000.00, and it was only an oversight that she failed to record it in her second affidavit. I accept her explanation that it was merely an oversight, as it is clear that she gave details of the superannuation rollover fund in her earlier affidavit of 17 November 2001. What provision, if any, should be made 38 The estate is not a large estate, and the Court can only make adjustments in accordance with the provisions of the Act. Each of the sisters makes a claim for a substantial payment out of the estate. Julie puts her position at its highest by requiring provision out of the estate to cover her home loan, credit cards and the loan to her daughter. Those amounts are approximately $105,000.00. Jennifer seeks from the estate provision to discharge the mortgage in respect of the Darwin property, to pay her debts and to invest money in her superannuation fund. It is not clear how much she intends to invest in the superannuation fund, but in respect of her debts and in respect of the mortgage on the Darwin and her debts the total amount is approximately $72,000.00. I have not included her legal fees as if she is successful in this application, she will received her costs out of the estate on a party/party basis, thus reducing her legal fees somewhere in the extent of 80%. Bronwyn wishes for the will to be upheld on the basis that she has no other accommodation and if she is not left with the Peakhurst property then she will be thrown on the Sydney rental market at a time when she does not have fulltime employment and is supporting her son. It would seems to me that from an estate of $350,000.00 that the testamentary intention of the testatrix can be maintained, that is that Bronwyn be provided with accommodation. 39 So far as Julie's position is concerned it is not a strong as it would appear at first blush. Currently the property, which she owns jointly with her former partner, is valued at approximately $150,000.00. There is a mortgage on the property which currently has outstanding an amount of $68,000, thus the equity that they have in that property is $82,000.00. Therefore, each would received approximately $41,000.00 from Julie's share there would need to be repaid to her daughter the sum of $10,000.00 leaving her with the sum of $31,000.00. Whilst no evidence was given about the value of property in Perth, it would seem that if one assumed that the property in Bayswater was an average property in that area, then to buy back into that area Julie is faced with the position where she will have approximately $30,000.00 to put towards a property which at the least could be $150,000.00 to purchase. In my view therefore, Julie should receive provision out of the estate which will enable her to either pay out her former partner or discharge the mortgage thus giving her a greater equity in the property should it be sold. I therefore make provision for Julie in the sum of $70,000.00. 40 In relation to Jennifer bearing in mind the estate is not a large estate, I am of the view that no provision should be made for her. She currently owns two properties either of which she could sell to refinance or discharge the Darwin mortgage. Her evidence is that she would like to discharge the mortgage on the Darwin property. It would seem to me that not only is she able to meet all of her current outgoings as well as make some provision for her children, but she is in the position where she could sell the Perth property and use the proceeds of that sale towards either the discharge or reduction of the Darwin mortgage. Jennifer's position is that the Perth property will go to her daughter once she completes her education. It seems to me that if provision was to be made for Jennifer it would in effect be making provision for the granddaughter of the deceased out of the estate. In my view the deceased had no moral obligation to make provision in that way. Therefore, I make no order for provision out of the estate of the deceased in favour of Jennifer. 41 Therefore, I make the following orders: (1) Julie Ann Carrick receive by way of lump sum payment the sum of $70,000.00 out of the estate of the late Shirley Lorraine Carrick deceased. (2) The defendant pay Julie Ann Carrick's costs on a party/party basis. (3) The proceedings by Jennifer Margaret White be dismissed. (4) In respect of Jennifer Margaret White each party pay their own costs. (5) The defendant's costs of the proceedings be paid out of the estate on an indemnity basis. ********** Last Modified: 11/07/2002 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.