McCarthy v Murphy [2002] NSWSC 494

New South Wales Supreme Court

CITATION : McCarthy v Murphy [2002] NSWSC 494 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 1913/1999 HEARING DATE(S) : 29/05/02 JUDGMENT DATE : 4 June 2002

PARTIES : Miranda McCarthy and Allannah Colleen Wooloughan v Peter Robert Murphy JUDGMENT OF : Master Macready at 1

COUNSEL : Mr C.J. Bevan for plaintiffs Mr G.A. Sirtes for defendant SOLICITORS : Turner Freeman for plaintiffs Peter R. Murphy & Co. for defendant CATCHWORDS : Family Provision. Application under the Family Provision Act by two adult daughters. Order for legacies. No matter of principle. DECISION : Paragraph 40

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Master Macready

Tuesday 4 June 2002

1913/99 Miranda McCarthy and Allannah Colleen Wooloughan v Peter Robert Murphy JUDGMENT 1 MASTER: This is an application under the Family Provision Act 1982 in respect of the late Edna Clare McCarthy who died on 19 June 1998 aged 83 years. The deceased was survived by her son and three daughters. Two of the daughters are plaintiffs in the proceedings. The deceased's will. 2 The deceased made her last will on 1 May 1989 and under that will she appointed her solicitor the defendant as executor and trustee. In the events which have happened she left her estate to be divided between her son, Martin, and her daughter, Belinda McCarthy. The estate of the deceased. 3 The deceased's estate consisted of unit No 4, 7-9 Lewis Street, Cronulla. The evidence shows that it has a present value of $380,000. She also left various term deposits and bank accounts. These have been realised. Rent from the property has been accumulated and expenses in the estate have been paid. Those expenses included funeral expenses, administration expenses accounting fees and other like matters. The balance presently held by the defendant is the sum of $100,088.81. Both parties have incurred costs in this matter. The defendant's costs are estimated at $40,720.08 and those of the plaintiffs are estimated at $63,466.26. It can be seen that costs will substantially consume the cash available in the estate and that the distributable estate will consist of the deceased's unit which has not yet been realised. The figure for the defendant's costs may be reduced by $5,600 but the evidence is not clear in this regard. Chronology of the family. 4 The deceased was born on 10 March 1915 and she married her husband on 20 September 1941. They had four children Martin born in 1943, the plaintiff, Miranda, in 1946, the plaintiff, Allannah, in 1950 and Belinda in 1951. 5 Miranda McCarthy was in hospital as a young child in 1953 with Rheumatic Fever. This reoccurred in 1958 and when she was aged eight she was again hospitalised some 12 months in a convalescent hospital. This illness limited her education and in 1987 her father purchased an art gallery for her to operate with a friend. In 1969 Miranda McCarthy married John Lindsay and in 1973 they moved to London to live. On 1 April 1987 Miranda and John were divorced. 6 The deceased made her last will, as I have indicated above, on 1 May 1989 and in that year Miranda McCarthy suffered a nervous breakdown in London. At the request of her parents she returned to Sydney and she lived there with them for two years. In 1991 she was admitted to hospital after a suicide attempt. Later in 1991 she moved into a flat for which her father paid rent in order to assist her to overcome the depression from which she was suffering. 7 In 1992 the deceased's husband moved into a nursing home. In that same year Belinda and her husband separated. Their marriage was dissolved in 1993. That year the deceased also started to suffer from heart trouble. On 4 June 1995 the deceased's husband died. The deceased thereupon took over paying the rent for Miranda's flat. That year Miranda was also diagnosed with major chronic depression. The deceased had some admissions to hospital with her heart problems and ultimately she died on 19 June 1998. Probate was granted on 1 September 1998. 8 So far as Allannah is concerned she left school in 1966 having obtained her Leaving Certificate and undertook a secretarial course at Randwick Technical College. She left home to flat aged 18 and obtained employment as a typist. Allannah married John McKelvie in 1970 and their child, Christopher, was born in 1971. He is now aged 31 and lives in New Zealand. Allannah and her husband, John, moved to New Zealand in 1975 and in 1977 they were visited by the deceased and her husband. Over the years between 1978 and 1982 their son, Christopher, would travel to Australia to stay at times with the deceased and her husband. On one occasion in 1986 Allannah took her annual leave to stay with the deceased and her husband in Sydney. Unfortunately the marriage between Allannah and John McKelvie broke down in 1989 and she returned to Sydney to live with her parents. Their marriage was dissolved in 1992. In the meantime Allannah had met Shaun Wooloughan and their daughter, Erin, was born on 12 January 1993. Allannah went to live in Victoria in a small town in that State. 9 At the time the deceased's husband was seriously ill, Allannah came to stay with her mother and helped her for three weeks over this period. After her father's death Allannah's family made visits to Sydney to help the deceased with matters concerning the apartment. Unfortunately their daughter, Erin, has severe learning difficulties and in July 2001 at the age of 8-1/2 years she was diagnosed as having a development age of only 4-1/2 years. Further evidence was tendered which suggests that Erin may have a life long need for support to manage her daily life. A consideration of the plaintiffs' claim. 10 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."