SHARMAN & ORS v. THOMAS & ANOR [2004] NSWSC 1162

New South Wales Supreme Court

CITATION : SHARMAN & ORS v. THOMAS & ANOR [2004] NSWSC 1162 HEARING DATE(S) : Wednesday 17 November 2004 JUDGMENT DATE : 17 November 2004 JURISDICTION: Equity JUDGMENT OF : Acting Master Berecry at 1 DECISION : The summons, as amended, is dismissed. The plaintiffs are to pay the defendants' costs.

CATCHWORDS : Family Provision Act - daughter and grandchildren - dependency on deceased - absence of additional factors LEGISLATION CITED : Family Provision Act 1982 CASES CITED : Re Fulop, deceased (1987) 8 NSWLR 679 Singer v. Berghouse (No. 2) (1994) 181 CLR 201 PARTIES : SHARMAN, Juliette Majella & ORS v. THOMAS, Miriam Irene & ANOR FILE NUMBER(S) : SC No. 3734 of 2003 COUNSEL : Plaintiff: M. Cleary Defendant: L. Ellison SOLICITORS : Plaintiff: Geoffrey Edwards & Co. Defendant: W.L. English

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

ACTING MASTER BERECRY

WEDNESDAY 17 NOVEMBER 2004

No. 3734 of 2003

JULIETTE MAJELLA SHARMAN & ORS v. MIRIAM IRENE THOMAS & ANOR JUDGMENT 1 ACTING MASTER: On 11 July 2003, the plaintiffs commenced proceedings in respect of the estate of the late Dorothy Petronella Victoria Blauw who died on 2 January 2002. The summons sought relief in addition to the usual relief under s.7 of the Family Provision Act 1982 (the Act). It sought an order in respect to the ashes of the deceased and it sought rectification in respect of the will. In respect of the rectification suit, in March of this year the parties reached agreement on that aspect of the claim and consent orders were made and earlier today I made orders in accordance with those consent orders. 2 An amended summons was filed in court this morning. The substantial amendments to the summons are firstly that the relief sought in paragraph two of the original summons is no longer pressed. Secondly, the schedule to the summons now has an additional paragraph, namely reference to the unit at Pirrama Road, Pyrmont. 3 The first plaintiff is one of the daughters of the deceased. The deceased and her first husband had two children, namely the plaintiff and the mother of the second and third plaintiffs. It follows, of course, that the second and third plaintiffs are the granddaughters of the deceased. 4 The applications are brought pursuant to s.7 of the Act. Section 9 sets out matters that are required to satisfy the court if an order is to be made pursuant to s.7. One of the curious aspects of these proceedings is in the affidavits in chief filed by each of the plaintiffs. None of the plaintiffs identified a need that should be provided by the estate. Subsequent affidavits in chief did in fact articulate some form of need. 5 The plaintiffs do not stand on equal footing in bringing the claim. The first plaintiff, as daughter of the deceased, is in a stronger category than either of the granddaughters. The granddaughters are required to establish that there are additional factors pursuant to s.9(1) of the Act, in addition to the factors set out in s.9(3) of the Act which would warrant the making of an order out of the estate on their behalf. 6 It has been submitted on behalf of the second and third plaintiffs that they were dependent on the deceased and therefore meet the criteria. Section 9(1) is satisfied by the nature of that relationship. The second and third plaintiffs lived with the deceased from 1982 to 1987. They lived with the deceased together with their mother and father. There is no evidence before me concerning their parents' financial position at the time. It has been suggested that they owned a property and they were receiving rent from that property. It has also been said from the bar table that the primary reason for moving in with the deceased was one of emotional support. She did not want to live by herself. 7 During the five years that the second and third plaintiffs resided with their grandmother, their parents continued to work. The evidence is that during that time they both held down full time jobs. The deceased took the second and third plaintiffs to and from school, entertained them, fed them and did things with them and their parents on the weekends. The relationship seems to have been a happy and loving relationship. 8 It has not been argued and could not be argued that the second and third plaintiff made any contributions towards the property of the deceased. Reliance is had on s.9(3)(b), (c) and (d) to establish factors warranting as to why the second and third plaintiff should have provision made for them out of the estate. The deceased cared for the children during that period but it could not be said that she cared for the children in loco parentis. They formed part of her household, she did things that traditional European grandmothers do. She looked after the children while the parents were able to attend work. IT seems to me that to satisfy s.9(1) requires something more than just looking after the children. It may be that it requires not only an emotional input but a financial input and it requires the standing in the shoes of the natural parents of the children. 9 I have been referred to a number of cases dealing with the question of dependency. In Re Fulop, deceased (1987) 8 NSWLR 679, McLelland, J. analyses the meaning of that section. In his opinion, that section draws a distinction between eligible persons pursuant to s.6(1)(a) and (b) and eligible persons pursuant to s.6(1)(c) and (d) of the Act. Persons falling within the category (a) or (b) are persons for whom the community would regard as generally being persons who are a natural object of testamentary recognition by the deceased. Persons in categories (c) and (d) are not so recognised. His Honour stated that in addition to the factors warranting under s.9(3), plaintiffs making an application where status is either (c) or (d) of s.6(1) must be able to point to other matters which would, when those matters are taken into account, mean that they would be generally regarded as natural objects at testamentary recognition. 10 In this particular case, a starting point might be the will. The deceased made her will in 1996. She made provision for her husband, he to have a certain limited right in respect of her property. She then made provision for her two daughters and her stepchildren. No mention is made in the will of the grandchildren, per se. The question of dependency has been considered in a number of cases. It has been said that an infant grandchild of the deceased whose mother is dependent on the deceased is not necessarily dependent on the deceased. One needs to look at the reasons why the grandchildren resided in the same household as the deceased or why the grandchildren were dependent on the deceased. Of course, with the grandchild there does not need to be the need to have resided in the same household as the deceased. 11 If the grandchildren are taken in by a grandmother, then the dependency is linked directly with the grandmother. If, however, the grandchildren receive accommodation because they are living with their parents either with or in a property owned by the grandparent, either paying rent or not paying rent, then the children are there, not because of a dependency on the grandmother or grandfather, but because of a dependency on the parent. It may be the parent who is dependent on the grandparent. 12 The material set out in the affidavits of both the second and third plaintiffs, in my view, fall short of establishing those other factors that are required by s.9(1) of the Act. They have set out in a number of affidavits their financial position and their assets. In reality, they are no different to many adults of their age. They are both married, working, they have aspirations to have or to continue to have children. Their husbands work. The income may be variable. They have purchased a home, they are paying off a mortgage. There is nothing in their evidence which would suggest that even if they were able to satisfy s.9(1) that there is a need that should have been met by the deceased. It must be borne in mind that there are at least three other people whose position needs to be considered in competition with the second and third plaintiff. Those persons are people in a stronger category than the second and third plaintiff. 13 It is necessary to consider the position of the first plaintiff and it is necessary to consider the position of the second defendant. It is recognised that as a general proposition, a spouse should make adequate provision for their partner and their primary responsibility is towards that partner. The courts have distinguished between a widow and a widower but nevertheless they hold a position of primacy. 14 The first plaintiff is a daughter of the deceased and she is in a stronger position than the second and third plaintiffs. In my view, the claim by the second and third plaintiffs should be dismissed and that is the order that I propose to make. 15 In relation to the first plaintiff, it is necessary to consider her position and that of her husband. She is a daughter of the deceased. Her evidence, and this evidence is not contradicted in any way, was that she had a loving and caring relationship with her mother that seems to have spanned the whole of her life until her mother died. She appears to have had a good relationship with her stepfather up until some time after her mother died. 16 That in itself, however, is not sufficient for an order to be made for provision out of an estate. Further, it cannot be the basis for making provision for her because of any misunderstanding of what her mother intended. Nor can it be the basis for making provision because she seeks to claw back what she sees as properly being a part of her mother's estate. Her claim must be based on the provisions of the legislation. Section 7 permits the court to make an adjustment having regard to the circumstances at the time the order is made for the maintenance, education and advancement in life of an eligible person. The eligible person in this instance is the first plaintiff, a daughter of the deceased. 17 As I have already indicated, the plaintiff's initial affidavit in chief, sworn 17 October 2003, nowhere discloses what is colloquially referred to as a need. I might also add that it is no basis to make provision on some moral obligation that the deceased had to the daughter. The High Court has made that clear in Singer v. Berghouse (No. 2) (1994) 181 CLR 201. In fact, Kirby, J. has not only said that moral obligation does not form a part of the wording of the current legislation and should not be used but the courts should stick to the terms of the Act and even paraphrasing using the word "need" in his view is not acceptable. Despite those strictures from Kirby, J., this court and the Court of Appeal has on a daily basis continued to use the term "needs". 18 The first plaintiff in her subsequent affidavits has updated her asset position and her financial position. She has also included evidence of assets, income and liabilities of her husband. She has also set out in paragraph 4 of her affidavit of 2 November 2004 what she intends to do if provision is made for her out of this estate. I pause there for a moment to consider the provision out of the estate. It is not true that no provision has been made for the first plaintiff. The will provides that on the death of the second defendant, the estate of the deceased is to be divided equally. The first portion to go to her stepchildren, the second portion to go to her daughters and they each then would received 25% of the estate. The stepchildren would each receive something less. 19 The financial position of the plaintiff is updated in the affidavit of 2 November 2004. The position is that she and her husband own two investment properties, a unit in Kingswood and a unit at Mermaid Waters in Queensland. There is evidence that her husband has a reduction in his salary in the last 12 months. However, he is still on an income slightly over $81,500. The plaintiff's income is also significant. It is approximately $90,000. Both are public servants and whilst there may be no guarantee of tenure as there was 10 or 15 years ago, they are in relatively safe positions and, having regard to their age, there are substantial build-up of superannuation entitlements which the plaintiff would be able to take when she turns 55 and her husband either partially from 55 or when he turns 60. 20 The first plaintiff and her husband have entered into an arrangement with their employer whereby they salary sacrifice a proportion of their salary. The first plaintiff sacrifices a significant proportion of her salary. In the light of that, and having regard to the investment properties and the liabilities in relation to their investments, it is difficult to see where a need arises for the first plaintiff. The mortgage over the properties is no greater than $50,000. The accrued superannuation benefits are significant. The plaintiff does not point to a significant loss of income or a medical condition which may cause either her or her husband from having to leave the workforce and perhaps incur significant medical costs. There is no evidence which suggests that either of them will lose their employment in the foreseeable future. 21 When looking at the needs expressed by the first plaintiff in her affidavit of 2 November 2004 at paragraph 4, it is clear that a number of the matters set out in that affidavit are matters which are colloquially referred to as a wish list. In paragraph 4(a), she seeks a benefit from the estate to discharge the mortgage in respect of monies owing to Aussie Home Loans. When one goes to paragraph 2 of her affidavit, that is in respect of an investment property. What that does is it enhances her income rather than diminish it. 22 She seeks replacement of their motor car which is a 1979 Holden. That to me in the general scheme of things seems an appropriate need to be met. It doesn't matter whether she seeks a $15,000 car or a $40,000. There is a need perhaps that is required to be met but that must be looked at in the context of the estate and the asset position of the plaintiff. It is a matter for her and her husband as to what sort of car they want. There is no reason why they could not finance any borrowings that would be required like many other people have to do to replace or acquire a motor vehicle. 23 It is said that certain work needs to be done around the property. Renovations and maintenance are a fact of life for property owners. An estimate is given of $70,000. That was objected to, I allowed it in. There has been no evidence which corroborates the estimate that was given. Nevertheless, once again it cannot be said that the first plaintiff and her husband do not have the means to raise that money to carry out the works that need to be done. 24 Next is a reference to converting a garage to enable her father in law to live on the premises. It is difficult to see how that could be regarded as a need to be met out of the estate of the deceased. There can be no obligation placed on the deceased to make provision for her daughter's father in law. 25 Finally, she requires money from the estate to build up savings so that she and her husband can visit family in Holland. It has never been regarded under this Act as being a need to take holidays, except in exceptional circumstances. There is no evidence of exceptional circumstances in this case. The first plaintiff's evidence is that she has been on numerous overseas trips over the last decade and a half. The average time taken on each trip is approximately six weeks. Some trips have been up to two to three months. That could not be regarded as being something that would be the subject of provision for advancement in life or maintenance. 26 She also refers to emergency expenses. However, there is no evidence of what emergency expenses might arise. There is no evidence that there may be medical expenses. There is no evidence of loss of employment. The evidence is completely silent on that matter. There is some evidence put on by the plaintiff that her circumstances and those of her husband may change for the worse. That is merely a matter of speculation and it is not a matter that can be taken into account. By its very nature it is not evidence of a need. 27 Whilst the plaintiff is in a strong position, her position also needs to be weighed against that of the second defendant. The second defendant is 82 years of age. Whilst he does not reside at the property he receives some income. It would appear, having regard to comments from the bar table, that that income is not a significant proportion of his income. Nevertheless, the deceased saw fit to make provision for him out of her estate. It is a limited provision which ultimately flows in part to her daughters. The executrix holds that interest on trust. 28 There are protections afforded by the law to the plaintiff and her sister in relation to the deceased's assets. In my view, the first plaintiff has not satisfied the first stage of Singer (supra). She has not demonstrated that the deceased has made inadequate provision for her out of her estate. There is nothing in her evidence to suggest that she has a current need. In the fullness of time, she is going to receive the benefit from that estate. It therefore follows that it is not necessary to consider the second stage of Singer (supra). 29 The orders that I make therefore are firstly that the summons as amended be dismissed. That the plaintiffs pay the defendants' costs. **********