New South Wales Supreme Court CITATION : Wilkie v Wiese [2001] NSWSC 980 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 1143 of 2001 HEARING DATE(S) : 31/10/01, 1/11/01 JUDGMENT DATE : 1 November 2001 PARTIES : Colin Malcolm Wilkie v Geoffrey Allen Wiese & anor JUDGMENT OF : Master Macready at 1 COUNSEL : Mr M.S. Willmott for plaintiff Mr J.O. Anderson for defendants SOLICITORS : Eric Butler for plaintiff Oliver Campbell for defendants CATCHWORDS : Family Provision. Application by son in respect of a small estate. Increased provision made for plaintiff. DECISION : Paragraph 30 - 1 - 1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Arthur Robert Wilkie who died 3 March 2000. The deceased was survived by three of his children and his former wife. Only the plaintiff, one of his sons, makes a claim. The second defendant is a daughter and the first defendant is her husband, who was appointed executor of the last will and testament of the deceased; that last will was made on 12 August 1992. Under that will he left $500 to his son Robert; $500 to his son Colin, the plaintiff, $500 to his ex-wife, Pearl; and the residue to his daughter, Barbara Wiese, who is the second defendant. 2 The estate is small, $76,277 and after funeral costs it came to $74,025.84. It is, indeed, a small estate and, of course, with assets like this costs impacts are very important. 3 The evidence before me shows that the plaintiff's costs have been kept to a sum of $9500. That is, of course, substantially less than would normally be charged. Frequently costs for small matters are in the order of $25,000 to $30,000 and it is very commendable to see both the plaintiff's solicitors and also the defendants' solicitors have taken a realistic attitude to costs so that the parties will not be unduly disadvantaged and I commend them for that. 4 Virtually the plaintiff's costs will cover out-of-pockets, counsel fees and not much else. The defendants' costs have also been much reduced, to $12,500 and they have, in fact, already been paid by the defendants. 5 The estate was distributed on 15 June 2000 when the legacies were paid. After allowance for some costs and a headstone of $5858 the second defendant, Barbara Wiese, received the sum of $64,393. 6 In order to understand the matter, I will deal with a little bit of the history of the family: the deceased was born on 8 November 1916 and he married in 1953. Barbara, his child, was born on 16 May 1954; Brian on 2 September 1956; Colin on 11 August 1958 and Arthur on 25 January 1962. Arthur predeceased the testator, he having died in 1988. 7 It was in 1969 that Barbara left school at the request of the deceased so that she could start work. She was aged sixteen. Barbara herself married on 25 November 1972 and it was a few years later in 1976 that the deceased retired from employment. Barbara was employed in 1983 and for various times in the years thereafter. It is apparent that there had been reasonable contact between Barbara and the deceased because in 1992 there are reports of the deceased saying he intended to leave the bulk of his estate to Barbara because of what she had done for him. 8 The deceased's will was made on 12 August 1992, as I have already mentioned. From time to time Colin has been employed; for instance, he was employed in May 1995 at the Pizza Hut as a driver; he had some work at a recycling factory in 1996; he was employed by Coles, also in 1996. 9 In January 2000 the deceased, in discussing matters with his daughter, told her that the first thing she should do once he died was to pay off the mortgage. As I have mentioned, the deceased died on 1 March 2000, aged eight-four years. Probate was granted on 2 March 2000. On 12 May 2000 a notice of intended distribution of the estate of the deceased was published in the Newcastle Herald. 10 In June 2000 Barbara suffered a work injury when she was working for a nursing home. 11 On 15 June there was a distribution to Barbara and the plaintiff, Colin, received his $500. A month later, on 16 July, Barbara used part of residue to pay the sum of $29,855 to the mortgagee over the home which she and her husband owned. It was on 19 January 2001 that Colin filed his summons in this matter. At this stage the second defendant still had some $15,952.24 in an investment which represented the balance of the legacy which she had received. 12 In applications under the Family Provision Act the High Court has 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' et cetera 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 et cetera 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." 13 I turn now to consider the plaintiff's situation: he is forty-three years of age, single and has no dependants. He lives with his mother and has lived with her all his life. Unfortunately for the plaintiff he suffers from a very obvious deformity: he does not have a right eye and the right side of his face is badly misshapen. This matter, which occurred at his birth and notwithstanding the work done during his childhood, presents a fairly frightening appearance to strangers. He, as I say, lives with his mother in a Housing Commission property and receives a pension of $407.80 per fortnight. He has a car which is a 1985 Nissan worth $2500, cash of $77 and superannuation totalling $444. He has a liability for a personal loan on Mastercard totalling $2570. 14 There has been evidence given by the plaintiff's mother of the contact there was between the deceased and the plaintiff. Clearly, the plaintiff continued to live with his mother after there was a divorce in 1978 and the plaintiff started to have more contact about the early 80s with the deceased. 15 There was also evidence given by the plaintiff about how he was assisting with lawn mowing which was an occupation that the deceased followed. 16 There was in evidence some comments about what was alleged to have been said once it was known that the deceased was dying. The evidence is in a state such as it is hard to reconcile what was precisely said and I don't propose to do so. In the overall context of the relationships it is of little significance in this matter. 17 There is nothing in the evidence which will tend to diminish any claim that the plaintiff might have. It is to be remembered he is a fairly simple person who has led a simple life, sheltered by his mother. It is necessary to see how the plaintiff says that he is left without adequate and proper provision. He has advanced the following: 1. He wished to repay his debts of $2570; 2. He needs some new clothes so that he can present properly at job interviews at a cost of some $408; 3. His only relaxation is listening to music and he wants to get a CD player for $829; 4. His car is old and he would like to have a better car so that he can get to work and he has located one for $17,990. These amounts total $21,797. 18 It is necessary also to have regard to others having a claim on the bounty of the deceased, in this case the second defendant. She is aged forty-seven years, married and has no dependants. Her children are all grown up. She and her husband own a house worth $105,000, a boat worth $10,000 and cars worth respectively $6000 and $10,000 and have some $500 in a credit union. Her mortgage has been repaid although they do have a personal loan of some $15,000 taken out to get the cars and the boat. There is also an investment which the second defendant has of $2529 which is the balance of the funds which she received by way of distribution in the estate. She has paid, as the time has gone by, up until shortly prior to this hearing, all the costs in respect of which she will be liable in these proceedings. 19 Barbara, as a result of her injury, has been on worker's compensation of $256 per week. Prior to this, clearly Barbara and her husband could manage on their income. They were able to repay a mortgage of $800 per month but that has now been discharged. Her husband is employed as a miner in the Hunter Valley. 20 I have already referred to the relationship between Barbara and the deceased and clearly she was of assistance to the deceased. 21 I have already indicated that the estate has been distributed to the defendant and under s 24 the Court may designate property as notional estate, if satisfied, that an order ought to be made on the application. 22 Accordingly, it is necessary to decide this question. It seems clear that Colin has some needs. 23 Just looking at his situation compared to that of the second defendant, he is in quite a parlous state. It may not be necessary for him, in the context of this small estate, to spend as much as he indicates in respect of a car. The needs which he advances are generally modest. I think that a modest legacy of somewhere between $10,000 and $20,000 would, in ordinary circumstances, have been appropriate. The only relevant property which the Court could designate as notional estate is the property which is held by the second defendant being the residence at 55 Lee Ann Crescent, Cessnock. Under s 28 the Court cannot designate property as notional estate unless it is satisfied that the estate is insufficient to make the appropriate provision. This is the case in the present matter. It shall also under s 28 not make an order designated as notional estate property in excess of that necessary to allowing the making of provision that, in a court's opinion should be made. More important in this case are the provisions of s 27 of the Act which are in the following terms: "1. On an application in relation to a deceased person, the Court shall not make an order designating property as notional estate of the deceased person unless it has considered: (a) the importance of not interfering with reasonable expectations in relation to property; (b) the substantial justice and merits involved in making or refusing to make the order; and (c) any other matter which it considers relevant in the circumstances. 2. In determining that property should be designated as notional estate of a deceased person, the Court shall have regard to: (a) the value and nature of property the subject of any relevant prescribed transaction or distribution from the estate of the deceased person; (b) where, in relation to any such prescribed transaction, consideration was given, the value and nature of the consideration; (c) any changes over the time which has elapsed since any such prescribed transaction was entered into, any such distribution was made or any such consideration was given in the value of property of the same nature as the property the subject of the prescribed transaction, the distribution or the consideration, as the case may be; (d) whether property of the same nature as the property the subject of any such prescribed transaction, any such distribution or any such consideration could, during the time which has elapsed since the prescribed transaction was entered into, the distribution was made or the consideration was given, as the case may be, have been applied so as to produce income; and (e) any other matter which it considers relevant in the circumstances." 24 Under s 27(1)(a) the Court has to consider the importance of not interfering with reasonable expectations in relation to the property. Such reasonable expectations may well occur in a number of circumstances. For example, a beneficiary who receives a property may have spent money on the property or worked on the property. In the present case this is not applicable. Another common area is where there is a promise in relation to the property and the acting by an intended beneficiary on the fact of that promise. An example is a promise to leave a property provided someone works hard for many years to assist the testator. 25 In the present case none of these circumstances appear but the deceased had said to the defendant that the first thing she should do is pay off the mortgage. Sensibly she followed his advice and paid it off immediately. 26 Under s 27(1)(b) a court has to consider the substantial justice and merits involved when making or refusing to make the order. In this case this is of some importance. The second defendant has given evidence that she has tried to see if she could obtain a loan of $20,000. She rang one lending authority and also an adviser and was told, on the basis of her receipt of worker's compensation and the loan being unsecured that she would not be able to borrow such a sum. However, from the practical point of view, that is not the only way in which a sum can be obtained to make some payment. She and her husband own their own home; it is unencumbered. Her husband has good employment as a miner and, no doubt, some funds could be borrowed by them. It is important, of course, in considering this question, to consider not only the amount of any legacy but the impact of the costs and I have already indicated what the costs will be. 27 Under s 27(1)(c) the Court must consider any other matter which it considers relevant in the circumstances. There was tendered on the defendants' behalf the publication of the notice under s 35 of the Family Provision Act. As I have mentioned above, the deceased died on 3 March 2000, probate was granted on 2 May 2000 and the notice of intended distribution published on 12 May 2000 and on 15 June 2000 the property was distributed. Thereafter it was not until 19 January 2001 that the summons was issued. It was, of course, within the time allowed under s 16 of the Act. The notice of intended distribution is in the proper form for the purposes of s 35 of the Act, s 60 of The Trustee Act and s 92 of The Wills and Probate and Administration Act. Section 35 of the Family Provision Act is in the following terms: "1. Where the administrator of the estate of a deceased person has given notices in the manner and form prescribed by Rules of Court of his intention to distribute the property in the estate after the expiration of a specified time, he may, at the expiration of the time specified in the notices or, as the case may require, in the last of the notice, distribute that property having regard only to the applications in relation to the deceased person of which he has notice at the time of the distribution. 2. An administrator who distributes property in the estate of a deceased person in accordance with subsection (1) is not liable in respect of that property to any person of whose application in relation to the deceased person he did not have notice at the time of the distribution." 28 In D'Albora v D'Albora (1999) NSWSC 468 I dealt in detail with the effect of s 35 at paras 57 to 74 of that judgment. There I concluded in similar circumstances to the present case that the defendant should not have some favourable consideration because the notice of intended distribution was published. Here the first defendant is not a beneficiary but he has benefited himself by the repayment of his mortgage. 29 In the circumstances, I do not think I should take any different view to that which I took in the case to which I have referred. 30 In all the circumstances, I think it is appropriate to give the plaintiff a legacy of $12,500 and order payment of his costs out of the property which I propose to designate as notional estate. I order that: 1. The second defendant's interest in the property 55 Lee Ann Crescent, Cessnock be designated as notional estate to the extent necessary to meet the legacy in order 2 and the costs in order 3. 2. The plaintiff receive out of the notional estate of the deceased a legacy of $12,500. 3. I order the defendants' to pay the plaintiff's costs on a party/party basis up to the sum of $9500. 4. I give liberty to apply for further orders and if necessary ancillary orders. 5. Interest is not to run on the legacy in para 2 until the expiration of two months from today's date. 6. The exhibits may be returned. 31 After submissions from counsel, the order for costs will be changed: I order the defendants to pay the plaintiff's costs assessed in the sum of $9500. ***** Last Modified: 11/06/2001 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.