New South Wales Supreme Court CITATION : Foster v Lisle [2003] NSWSC 1243 HEARING DATE(S) : 3, 4 December 2003 JUDGMENT DATE : 17 December 2003 JURISDICTION: Equity Division JUDGMENT OF : Young CJ in Eq DECISION : Order that the plaintiff receive a legacy of $22,900 from the estate of the late Bobbie McVeigh Lisle. Plaintiff is to have costs out of the estate capped at $22,900. The defendant's costs are to be paid out of the estate. CATCHWORDS : SUCCESSION [322]- Family Provision application- Principles upon which relief granted- Claim by child of testator- Adult daughter only left $10- Test to be applied when assessing whether the court should make an order under the Family Provision Act- Two-stage test- Considerations when estate is of small value- Considerations when applicant entitled to a government pension- Circumstances to be considered. LEGISLATION CITED : Family Provision Act 1982, ss 7, 9(3)(b) Carroll v Cowburn [2003] NSWSC 248 Parker v The Public Trustee (Young J, 31.5.88 unreported) CASES CITED : Permanent Trustee Company Limited v Fraser (1995) 36 NSWLR 24 Re Kauiers (1986) 11 Fam LR 41 Singer v Berghouse (1994) 181 CLR 201 Whitmont v Lloyd (Bryson J, 31.7.95 unreported) PARTIES : Sonia Marie Foster (P) Peter Bobbie Lisle (D) FILE NUMBER(S) : SC 5576/02 COUNSEL : M A Gilmour (P) L Ellison (D) SOLICITORS : Ken Lee (P) Webster O'Halloran & Associates (D) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION YOUNG CJ in EQ Wednesday 17 December 2003 5576/02 – FOSTER v LISLE JUDGMENT 1 HIS HONOUR: This is an adult daughter's application for an order under the Family Provision Act 1982. 2 The deceased died on 22 May 2001, aged 65. He was an opal miner living at Lightning Ridge. He was divorced in 1989. He had two children, the plaintiff, Sonia, now aged 43, and the defendant Peter, now aged 41. 3 The deceased left very little property. His house at Lightning Ridge was worth about $130,000, and he had some mining equipment and other odds and ends. The net value of the estate is said to be a mere $93,000. If the plaintiff obtains an order for costs out of the estate in the amount which she has anticipated, there will only be some $64,000 left in the estate. 4 The deceased's last will bears date 1 December 2000. The will gave the house, the bank balance and some opals to the son. He left only $10 to the plaintiff. He also made a benefaction to his friend Jean Watson. As things have turned out, the sole beneficiary will be the son, subject to any order that is made in these proceedings. 5 The plaintiff herself has two children, Christopher now aged 17, a first year apprentice, and Vanessa aged 12, still at school. 6 The plaintiff has twice married. Christopher is the child of the first marriage, which only lasted from 1984 to 1988. Vanessa is the child of the second marriage, which lasted in some form or another from 1990 to 2002. 7 There are currently property proceedings between the plaintiff and her second husband, Peter Foster, in the Family Court in Queensland. There is some suggestion that the final stage in those proceedings has been kept on hold pending the decision in this case. 8 The plaintiff is currently receiving a sole parent's pension of $535 per fortnight, plus $250 maintenance for the children, that is $392.50 per week. In her affidavit the plaintiff says her weekly expenses are $320, that includes some of Vanessa's school fees, but Christopher is making a contribution of about $40 a week for those as well. 9 The plaintiff says that she has difficulty in making ends meet. The plaintiff's health is fair, though she had a bad fall in 2001 and may need further treatment for her injured leg. 10 The capital position of the plaintiff is only given to me in a very sketchy fashion. The plaintiff is currently living in the former matrimonial home at Eagleby, a suburb of Beenleigh in Queensland. She says that her former husband is seeking a Family Court order that the house be sold and he receive the whole proceeds of sale, which the plaintiff assesses at $70,000. I assume this is the equity in the house as, although there is a paucity of evidence on the matter, there is a general suggestion in the evidence that the average price for houses in the Eagleby area is about $200,000. 11 There is also a dispute between the plaintiff and Peter Foster over another $70,000, which was the proceeds of the sale of a business that the parties had, which was put into their joint bank account, and which she says he withdrew without permission. They only appear to have another $20,000 between them, though details, as I said, of the plaintiff's general capital position are unclear. She has superannuation, the capital value of which is about $7,300. 12 The defendant also is currently unemployed. He is skilled in the computer industry. He owns a unit at Potts Point with an equity of more than $100,000. He currently sits at home living on his capital and working on his computer. Just how far this is a lifestyle choice, or of compulsion is not quite clear, and it does not really matter. 13 The proceedings came before me on 3 and 4 December. As the evidence and submissions only finished at about 4.45 pm on the second day, there was no time to give judgment. That did not upset me too much because I needed time to think of some of the rather awkward issues that arose in the case. However, I have been assisted both by what Mrs M Gilmour put on behalf of the plaintiff, and by Mr L Ellison of counsel, on behalf of the defendant. 14 The case took two days to hear before me, mainly because both the plaintiff and the defendant had a lot of spare time to amass material to show that their suspicions as to the other's bad behaviour were justified. A great amount of time was wasted at the hearing through cross-examination on hate issues, which had little to do with the main thrust of the case, and thus if the estate has been very badly depleted through legal costs, the parties have only themselves to blame for that diminution. 15 Section 7 of the Family Provision Act 1982 provides that if the court is satisfied that an applicant is an eligible person: "it may order that such provision be made out of the estate ... of the deceased person as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person." 16 It is admitted that the plaintiff is an eligible person. It is also admitted that the plaintiff has some need. 17 Both counsel reminded me of what the three Justices said in the High Court in Singer v Berghouse (1994) 181 CLR 201, 208: "It is clear that, under these provisions, the court is required to carry out a two-stage process. The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant." At 209 to 210 the Justices continued: "The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of the 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." 18 The will left only $10 to the plaintiff, the modern equivalent to the contemptible farthing or shilling of former days. The bulk of the estate went to the defendant. Indeed, as things work out, the plaintiff may not even be entitled to the $10 if no order is made. 19 So long as they make appropriate provision for those who the community would reasonably consider to have a claim on their bounty, people are free to leave their property to whomsoever they wish. Moreover, there is no prima facie rule that a person who chooses to leave their property to their children are somehow or other obliged to leave their property amongst their children in equal shares. 20 The first question I must address is did the testator leave the plaintiff without adequate provision for her proper maintenance, et cetera? 21 I have little difficulty in answering this question affirmatively. The testator had two children. Up until the divorce between the testator and his wife, the relationship between the members of family was amicable and normal. The testator at all times lived at Lightning Ridge, as did the rest of the family, up until the time when it was necessary for the wife and children to move to Sydney for educational purposes, namely the defendant's educational purposes. 22 During this period the plaintiff made contributions to the family welfare and made a loan to the deceased from her earnings, which he repaid. She also contributed to the pool, which allowed the defendant to attend university, and accepted with equanimity the family decision that only the boy child would be given a tertiary education. 23 Accordingly, for the greater part of her early life, the community would expect the testator, if the daughter had some needs, as is admitted she does, to have made provision for her. 24 Although the evidence is fairly slim, it would seem that the testator's views toward the plaintiff changed because of a number of factors. First, he appeared unhappy with the plaintiff because she sided with her mother during the rather bitter divorce proceedings between the testator and his former wife. 25 Secondly, it would seem that the testator was disturbed by rumours that the plaintiff was saying in her own Family Court proceedings that the testator had behaved in a sexually inappropriate manner towards her. 26 The plaintiff denied that she ever made any such allegation. However, such an allegation was at the very least leaked by "friends", or friends of the former husband of the plaintiff, to the testator. 27 Although it is not a vital matter, I found it hard to accept that the plaintiff's mother did not write the letter referred to in para 62 of the defendant's affidavit, and that the plaintiff and her mother were involved in spreading the allegations, which are now acknowledged to be without foundation. I must confess that I was not at all impressed by the plaintiff's mother, who from the moment she entered the witness box showed herself affected by the unrighteousness, in her own mind, of the defendant's cause. 28 The third reason that relationships soured was that the testator had no liking at all for the plaintiff's second husband, Peter Foster, whom she married in 1990. This was exacerbated when in 1995 Mr Foster and the plaintiff moved away from Lightning Ridge to Queensland, so that the testator was denied further contact with his grandchildren. 29 Next, there was virtually no contact between the plaintiff and the testator from 1990, on the defendant's case. The plaintiff's mother said that as the plaintiff and the testator were both residents of Lightning Ridge between 1991 and 1995 they must have seen each other in the area from time to time, and this is probably correct. 30 I should say that the plaintiff and Peter Foster moved to Roma in 1990, but by 1992 they had separated and the plaintiff returned to Lightning Ridge. Peter Foster reconciled with the plaintiff in 1994, and they remained in Lightning Ridge until they left for Beenleigh in 1995. 31 The defendant says that on the two occasions when the testator was in hospital in Sydney for serious matters the plaintiff never visited him once. The plaintiff acknowledges this. She says, however, that in 2001 she was living in Eagleby; she had two children and she just could not travel to Sydney to see her father. 32 I have very great difficulty in accepting this excuse. The children were, at that stage, aged 15 and 10. The probabilities of someone being able to watch them for a couple of days must be great. I say this just as a matter of general knowledge. The bus fare from Beenleigh to Sydney is not very great. 33 The plaintiff says that she did send and exchange Christmas cards with her father every year, but there is no documentary evidence of this; though PX09 was a photograph of the plaintiff's children marked "to Dear Granddad, lots of love from both of us, Chris and Vanessa" and it is clear that the grandchildren did visit the testator about once a year from 1995 onwards. 34 The non-contact between father and daughter over a significant period is a material matter. The vital part is the conduct of the plaintiff towards the testator, or perhaps even the public perception of the conduct of the plaintiff towards the testator. The question is whether the community, or the court as its representative, should say: "because of that conduct, the testator need not consider his daughter as requiring him to consider her when working out what his obligations were when he made his will". 35 Of course this can apply even where there is benign conduct involved. For instance, a daughter who is a millionaire pop star may well make it clear to her father that she no longer considers herself a person to whom he is obliged financially. That, however, is not this case. 36 It seems to me that the probabilities are that there was little contact between father and daughter over the period 1995 to 2001. There is evidence from the defendant's side that the testator in 1996 and 1997 told visitors on at least two occasions that he had no contact with his ex-wife or daughter since the divorce, not even a card, and if the plaintiff or her mother came on to his property he would shoot them. 37 The plaintiff is, of course, in no position to contradict this evidence, but it does reinforce the general flavour of non-contact. 38 It also must be remembered that Sheller JA said in Permanent Trustee Company Limited v Fraser (1995) 36 NSWLR 24, 43, when commenting on the fact that s 9(3)(b) of the Act requires the court to take into consideration the character and conduct of the eligible person before and after the death of the deceased: "Section 9(3)(b) ... speaks not in terms of the court's refusing to make an order because of conduct disentitling but, with quite a different emphasis, of the court's taking into consideration the character and conduct of the eligible person before and after the death of the deceased person in determining what provision (if any) ought to be made in favour of the eligible person." 39 Bearing this in mind and despite the non-contact, it still seems to me that the $10 which he gave to his daughter was derisory and inadequate, and the first stage of the enquiry must be answered favourably to the plaintiff. 40 Accordingly, I turn to the second and more difficult question. 41 The testator only had a small estate, an estate which has been grossly diminished by the internecine strife between the siblings in this litigation. How, in the light of that small estate, should the testator have made provision for the plaintiff? 42 Mr Ellison says the answer is easy. The $10 he gave her was quite enough. He says that the testator had two children, one who was close to him, and one who had distanced herself. He knew there was not enough money to go around. The son had been good to him, the daughter had not. The daughter had married, had gone away to Queensland to live her own life with her family, and was not a prime candidate for benefaction, so that he was perfectly entitled to give what little he had to his son. Mr Ellison says that the proceedings should be dismissed, though he told me that if that happened he was instructed not to seek costs. 43 The assessment as to the quantum of any orders to be made should be made as at the date of the hearing. Mr Ellison says that it is most significant that after the testator's death on about 11 June 2002 the plaintiff and her children, without the permission of the executor, moved into the testator's house at Lightning Ridge and stayed there rent free until late October 2003, when they moved back into the former matrimonial home at Eagleby. 44 The plaintiff says that she did this not only because she had no safe place to live with her children, but also singularly to save wasting the estate assets with there being an unoccupied property. She admits she never paid rent, but said she put aside $50 a week for savings. None of this money has been produced, and the only explanation as to where it is, is that $1500 of it was given to her solicitors on account of legal costs. 45 The plaintiff says that she was only in the house until June 2003, a period of about 55 weeks. However, it would seem that there was still some of the family's possessions in the property, which was gradually moved, and I consider that the occupation period is more likely to be 70 weeks. 46 Assuming that the proper occupation fee is $50 a week, that is an amount of $2,750 to $3,500 which the plaintiff was ready to receive by way of benefit. When the plaintiff left the house, the defendant says she took everything out of the house, including even disconnecting and removing the hot water system. The photographs bear this out. 47 The plaintiff's explanation is that things in Lightning Ridge just go off because it is a fairly lawless area, but it is really just a bit hard to believe that the whole contents of the house and the backyard, and the hot water system, just disappeared. There is also a problem with a motor vehicle, another item that just disappeared, and I think it much more likely, on the evidence, that the observation of members of the plaintiff's family being seen in the vehicle were correct, rather than it just disappearing. However, the motor vehicle was only valued for estate purposes at $500. 48 Before she left the Lightning Ridge property, the plaintiff glued to the walls newspaper clippings, personal letters, family photographs, thus damaging the property. She even glued a salt and pepper shaker to the wainscoting. It is purely spiteful. It is difficult to assess the damage, but it seems to me there is no reason why the damage caused is not to be taken into account when assessing the plaintiff's award. 49 Despite her denials, it seems to me that the vandalism reinforces my general incredulity as to the plaintiff's version that things just go off in Lightning Ridge, and I find it more likely than not that she took, or disposed of these items. Again the value for probate purposes was only $2,000. 50 Thus Mr Ellison says that the plaintiff has already received at least $6,000 value from the estate, and in addition has caused it expense by her deliberate vandalism. 51 There was a lot of merit in this submission. However, there is no evidence to suggest that the testator's home at Lightning Ridge could have been let during the period that the plaintiff occupied it. Thus whilst the plaintiff got a benefit in rent free accommodation, the estate did not necessarily suffer a detriment. 52 I do not intend to waste time by going into all the debates about matters of spite between the parties. I will mention, however, that a typical example was the disposal of the testator's ashes. The defendant had left these ashes with the Walgett Tyre Service. The plaintiff complained that the ashes had been left there too long. She picked them up and put them down one of the testator's opal mines, but for a long while would not tell her brother which one. 53 If parties are going to carry on like that and spend money on litigation then they only have themselves to blame if there is very little left to divide up when the court makes its decision. 54 The plaintiff is not currently working. She says this is partly because she fell when painting a ceiling and fractured her fibula about two years ago. However, the principal reason seems to be that the plaintiff is living in an area where work for unskilled females of 43 years of age is difficult to obtain. However, she cannot leave the area because she is living in the former matrimonial home and cannot afford to live anywhere else. 55 Indeed, the probabilities are that even if she could find work she would not receive as much net income as she is currently receiving on supporting parent's benefit. This raises the question as to how far this Court can take into consideration Social Service benefits being paid to a plaintiff. 56 I considered this matter generally in Parker v The Public Trustee 31 May 1988, as yet unreported, and it has been followed in this Division on a number of occasions over the last 13 years. I there laid down seven basal provisions and I will repeat numbers 1, 2, 4 and 7, the only ones which seem to be relevant to the present case: "1. The object of the Act is to compel persons to make provision for their dependants and not throw the maintenance of the dependants upon the public purse; see Lieberman v Morris (1944) 69 CLR 69. 2. It is no answer to a claim that a deceased failed to make proper provision for his dependant and that the dependant is entitled to a pension under the Social Security Act Re Hunter [1940] GLR 100, 101. 4. A wise and just testator however when formulating his bequests does take into account the income that the various beneficiaries would be receiving under superannuation or other pensions Re Lawford [1954] NZLR 1142, 1145. 7. Where the estate is small and especially where there are a series of claimants on the testator's bounty it may well be proper for the testator when making his will and the Court when framing its order to preserve a pension entitlement." 57 In proposition 7 I gave the analogy of what happens in the Family Court and instanced that Court's decision in Re Kauiers (1986) 11 Fam LR 41. 58 When following this decision in Whitmont v Lloyd 31 July 1995, unreported, Bryson J said: "The protection of public funds from claims by indigent persons is not a purpose of family provision legislation that they are incidentally protected by the legislation, which was not enacted solely for the protection of private interests and serves public policy ... . In my opinion, the availability of Age Pensions and other social benefits is a circumstance which should be regarded, and particularly in small estates it may be appropriate to leave an applicant wholly or partly dependent on them or to mould the provision made so that their availability is preserved in whole or in part. The acceptance of benefits for which statute law provides is in every way legitimate, involving no social stigma and incurs no disapproval from the Court. It is not the Court's task to be vigilant to throw burdens off public funds and onto private estates." I respectfully agree. 59 The present case is not one where there is any question of the wealthy throwing a burden onto the public purse, a matter which has been of concern in some of the cases which I have considered. 60 This being so, so far as income is concerned, the plaintiff needs no provision. Indeed a provision giving her income might just operate to limit her pension. In any event, there is just not the capital to endow any fund to give an income stream to the plaintiff. 61 So far as capital is concerned, the plaintiff currently is living in a house, and that is sufficient, and her only current need is for a small sum to provide for contingencies. 62 At this stage I must make a digression. Judges and Masters of this Court have said time without number that it is up to the plaintiff to provide the court with full details as to her assets, income and needs. Apart from her income situation, the present plaintiff has not done this. The court has not been favoured with any of the financial statements that the family law regulations require, and which almost certainly would have been filed in the Family Court in Queensland. There was no proper valuation of the house at Eagleby. The claim against Mr Foster concerning the money taken from the joint account was vague. It would seem that the plaintiff has spent a very large amount of money on her costs in the Family Court, but just how much never became clear, except that she has now decided to act for herself. 63 There is very little material as to her bank accounts, though they show she has an account with the Westpac Bank at Beenleigh and a Mastercard connected with this in the name of Mrs Devine, one of the aliases of her former husband. 64 No details were given to the court as to the way in which Social Services payments to her would be affected as Vanessa grows older, or what would happen if she got a job. There was no consideration of where the plaintiff might live so as to have a better chance of gaining employment, or how much accommodation would cost in those areas. Indeed, there was no proper evidence as to the cost of housing in Eagleby, if she intended to live there. 65 Indeed, it would seem there was some tactic being played as to whether the Family Court proceedings or these present proceedings should be decided first. If the plaintiff received a sizeable order here doubtless the Family Court settlement may be less for her, and if she received the house in the Family Court proceedings then she may get a smaller order here. 66 There is not much I can do but evaluate the material that I have. I note that the defendant's counsel had access to the plaintiff's banking records, and as nothing of any moment was tendered I can be comforted in thinking there was not very much of any significance in them, but really if the court is not let into the secret of what the plaintiff's real needs and funds are, then no-one but herself can be blamed if the court mis-assesses the situation. 67 From my general view of the law and practice in family law, it is more often than not that the Family Court makes an order, when there was a twelve year old child living in the matrimonial home, that the mother and child are permitted to live in the house until the child becomes eighteen. At that stage the house is ordered to be sold and the proceeds distributed equitably. 68 There may be variations of this when the child is going on to tertiary education, but the great probabilities are that that sort of order will be made in the Family Court proceedings. 69 There would not seem to be many other assets in the marriage. I cannot assess the chances of the plaintiff recovering the whole or any part of the $70,000 of the proceeds of the sale of the business. I just do not have enough information, but on this scenario the plaintiff has no great need until Vanessa obtains 18, somewhere about 2009. 70 However, at that stage the plaintiff really will have a need for both housing and income, as she will no longer be a supporting parent, and will be too young to be eligible for an old age pension and she will have to find her own accommodation. It is extremely difficult to work out what a wise and just testator would have provided to look after the plaintiff's need in 2009. Had he been aware of all the facts of which the court is aware, he may well have considered that he needed to do nothing until that period, other than put aside a fund. 71 There is no sense in setting up, however, a separate trust, as there is bad blood between the executor and the plaintiff, and it would cost too much to have a separate trustee. There is also very little purpose in setting aside a fund in such a way that the plaintiff cannot touch the capital until 2009. Accordingly, the order needs to be a cash sum and this will involve a clean break. 72 The estate, as I said, is $93,000 on the best estimate, after the estate costs have been paid, but before the plaintiff's costs are paid. The plaintiff is alleged to have already had a benefit of $6,000. I believe it is appropriate to take that $6,000 off her award because it would otherwise encourage people to behave as she has done. 73 However, if one takes that $6,000 off the plaintiff's benefit, it is only fair that one adds it to the total value of the estate, so that I am really looking at an estate of $99,000. 74 I think the proper provision that a wise and just testator would have made for the plaintiff is between a quarter and a third of the whole estate. If one takes 7/24ths of $99,000, on my figures, one gets $28,870 minus $6,000, which is $22,870, and rounding it up, one would get $22,900. 75 Accordingly, I will order that the plaintiff, in lieu of the provision made for her under the will of the late Bobbie McVeigh Lisle, receive a legacy of $22,900, on the basis that the estate make no claim in respect of any alleged conversion or damage done by her or her family to the estate property. Such legacy is not to carry interest if paid by 2 February 2004, and to carry interest at the legacy rate from then onwards. 76 In accordance with the practice referred to in Carroll v Cowburn [2003] NSWSC 248, the plaintiff is to have the costs out of the estate capped at $22,900. 77 That order for costs may need to be reviewed after I open the envelope containing the open offer, which was placed in the sealed envelope during the hearing. This was done because, whilst open offers are to be encouraged, I personally find that it is not appropriate that the judge know what the figure is because it may influence him or her unduly in making the assessment. 78 The defendant's costs are to be paid out of the estate. 79 The exhibits may be returned after 16 February 2004, if there is no appeal, or otherwise at the conclusion of hearing of the appeal. The framed photograph PX09 may be returned forthwith. 80 I have now opened the envelope. The order I have made is below the open offer and, accordingly, the costs order will stand. ********************** Last Modified: 12/22/2003 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.