ADAMS v. PUBLIC TRUSTEE [2004] NSWSC 1161

New South Wales Supreme Court

CITATION : ADAMS v. PUBLIC TRUSTEE [2004] NSWSC 1161 revised - 13/12/2004 HEARING DATE(S) : Friday 19 November 2004 JUDGMENT DATE : 19 November 2004 JURISDICTION: Equity JUDGMENT OF : Acting Master Berecry at 1 DECISION : An order is made pursuant to the Act for provision to be made out of the estate of the deceased for the plaintiff in the sum of $40,000. I order that the defendant pay the plaintiff's costs. The defendant's costs are to be paid out of the estate on the indemnity basis.

CATCHWORDS : Family Provision Act - sons - no provision in will for plaintiff - needs established LEGISLATION CITED : Family Provision Act 1982 Re Fulop, deceased (1987) 8 NSWLR 679 CASES CITED : Kleinig v. Neil (1981) 2 NSWLR 532 Singer v. Berghouse (1994) 181 CLR 201 PARTIES : ADAMS, Garry Arthur v. PUBLIC TRUSTEE FILE NUMBER(S) : SC No. 5523 of 2003 COUNSEL : Plaintiff: G. McGrath Defendant: G. Rich SOLICITORS : Plaintiff: Jackson Smith Defendant: Public Trustee

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

ACTING MASTER BERECRY

FRIDAY 19 NOVEMBER 2004

No. 5523 of 2003

GARRY ARTHUR ADAMS v. PUBLIC TRUSTEE JUDGMENT 1 ACTING MASTER: The proceedings before me this morning are proceedings brought under s.7 of the Family Provision Act (the Act). The plaintiff is a son of the deceased. He is currently aged 44. The beneficiary is also a son and he is currently aged 39. 2 The estate is a small estate. The major asset in the estate is the Blacktown property. Under the terms of her will, the deceased left the property to her son, Steven Adams. Seven has resided in the property all his life. 3 She also made provision for the plaintiff, Garry, but it was contingent on Steven not surviving the deceased. Steven, of course, did survive the deceased and he, therefore, takes the property in accordance with the provisions of her will. 4 The plaintiff, as a son of the deceased, is an eligible person pursuant to s.6 of the Act. He is in a category or eligible persons of which in the stronger of the two groups identified by Justice McLelland in Re Fulop, deceased (1987) 8 NSWLR 679. He is one who would normally be regarded as a natural object of testamentary provision. 5 Exhibit A is the instruction sheet for preparation of the will from the Public Trustee. It sets out the deceased's intention: firstly that Steven was to be the beneficiary under the will. She refers to Garry as a possible claimant in relation to the Act and a reason is given as to why Garry is excluded. 6 Her note is that Steven is doing up the house with his own money and the testatrix feels he should benefit. I withdraw what I said a moment ago, obviously that is written by an officer of the Public Trustee on instructions received from the deceased at the time she gave instructions for the will. 7 Both brothers are and have always been in modest circumstances. They have worked in areas where there is no requirement for training or no special skills. They have by and large undertaken labouring jobs throughout their working life. Neither of them have been in a position or perhaps have had the incentive to try and acquire a home of their own. 8 The plaintiff left home when he was 18 and entered into a defacto relationship. That relationship continued until the 1990s. He moved from Sydney with his defacto family and lived for many years in Orange and throughout that time was employed. Subsequently he moved to far north Queensland and that relationship ended. He has, since the end of that relationship, lived with an aunt and paid a minimum amount of board. 9 His evidence today is that he will be moving into other accommodation with a female friend who has children but not as a defacto partner, but merely as a boarder. The agreement that he has reached with that friend concerning rent is that he will be paying approximately $140 per week. That is a significant increase on the amount of board that he has to date given to his aunt. 10 Both brothers have modest assets. The plaintiff's assets amount to some $37,000. His income is approximately $2,200 per month, however, during the period November to March that income increases and often doubles. 11 On his evidence, the last period he earned $4,300 a month. His outgoings to date have been approximately $1,200 a month. This will increase with the increased rent to approximately $1,500 a month. It can bee seen from the comparison of the income and outgoings that he earns significantly more than his outgoings even during the quieter months of the year. 12 The beneficiary is the younger son of the deceased. His current financial position is that he has assets of less than $2,000. His income is $2,500 per month and when he works on Saturdays he earns an additional $100 per week. His monthly expenses are approximately $2,200. As with his brother, it can be seen that his income exceeds his expenses. However, the difference is not as great as his brother, it being only somewhere between $300 and $400 per month. 13 He has liabilities. Those liabilities amount to approximately $10,000. His evidence is that he has carried out improvements on the home at Blacktown. The plaintiff also has liabilities in particular a loan from GE Finance in the amount of some $23,500. 14 Whilst both brothers have liabilities, they are not significant liabilities. Some of the evidence suggested that part of the reason for the deceased not making provision for the plaintiff was because of an incident that happened at a 21st birthday part of the beneficiary in 1985. 15 There is no evidence of what that issue was and, on reading the material contained in the affidavits and noting that there was no cross-examination of either brother in relation to that incident or in relation to the family dynamics since that time, it seems to me that that perhaps is not the primary complaint against the plaintiff. 16 If there is a complaint against the plaintiff in respect of receiving provision out of this estate, it is the contact that he had with his mother after 1985. That contact, however, might be borne in the context of the plaintiff earning a living and to some extent supporting a family. 17 The plaintiff moved to the Orange area and for many years lived in Orange. He worked from that city as a truck driver. He had runs to Sydney on a fairly regular basis. His evidence is that from time to time he would see his mother and he rang her on a regular basis. He also sent her cards at Christmas, Easter and Mothers Day and her birthday. That is denied by the beneficiary. His evidence is that he was close to his mother. She was proud when she received cards and displayed them in the lounge room. There were never any cards displayed from the plaintiff. 18 I accept the plaintiff's evidence that he kept contact with his mother. After she had the stroke in 1990, there seemed to be a partial reconciliation by the brothers. The beneficiary, to his credit, contacted the plaintiff and told him of the mother's stroke. The plaintiff came to Sydney and saw his mother and did nothing which could be regarded as an uncaring attitude towards her. 19 In my view, he acted as a son would act. He came to Sydney, spent time in Sydney until his mother's position was known and then he returned to his home and the family in Orange and continued working from that centre. Subsequently, when he moved to North Queensland, the contact with his mother became less but that also was understandable not only because of the tyranny of distance but because of the deterioration of his mother's health. 20 There is evidence from both sons that the mother did not return home after the stroke. The medical advice was that she could not go back into her own home and that proper and adequate care for her would be provided in a nursing home. A family decision was made that the mother go to a nursing home and that is where she spent the rest of her life. 21 The beneficiary living in the western suburbs or Sydney had ample opportunity to visit his mother and in fact he did that right throughout the rest of her life. His evidence, as well as the evidence of the plaintiff, is that the deceased lost the power of speech. When both of them attended, the mother could say no more than "yes", "no" and "hello". They generally had to answer their own questions and the mother responded either "yes" or "no". Telephone contact, therefore, becomes extremely difficult in those circumstances. 22 I accept the plaintiff's evidence that he still phoned, although those pone calls may have been not regular. He spoke to the staff at the hospital. They informed him how his mother was going. There is some evidence that the attempted to talk to his mother on the phone but that was unsatisfactory as she could merely tap the phone. 23 In my view, there is really nothing that the plaintiff has done which could be regarded in any way as conduct which would disentitle him to a provision out of the estate. Kleinig v. Neil (1981) 2 NSWLR 532 is a case which highlights that point and if it is to be applied in this case, it is a decision which, in my view, finds the plaintiff in a favourable light. 24 It is not the case of a sone who walked out on his mother, ignored her and never saw her again and then turned up once the estate was to be administered. This is a son who, because of circumstances moved away from Sydney but, still kept some contact with his mother. 25 In my view, there is nothing in his conduct which would disentitled him from being successful on the application, however, that is not a basis for making any provision for the plaintiff out of the estate. The estate is a small estate, as I have already indicated. The Public Trustee has valued the property on the basis of an auction sale at realising a net $260,000. The combined costs are just on $56,000. If one takes into account the plaintiff's costs on a party/party basis conservatively that would mean that the combined costs are then about $50,000. That would leave a net estate of about $210,000. 26 Singer v. Berghouse (1994) 181 CLR 201 identified two stages that one must address before deciding whether or not it is appropriate in all the circumstances for provision or further provision to be made out of an estate for a plaintiff. 27 It is clear that inadequate provision was made for the plaintiff simply by the fact that no provision was made for the plaintiff. The question is, looking at s.9(3) factors, can it be said that having regard to the circumstances during the course of the deceased's life, the plaintiff's circumstances now, whether or not it is proper for provision to be made for the plaintiff. 28 Having regard to the plaintiff's financial position and having regard to the comments that I have already made about the non-financial aspects of his relationship with his mother, in my view, a wise and just testatrix would have made provision for that son. 29 She was aware that both sons were not in occupations which generated high incomes, did not have significant assets and the reason for leaving the plaintiff out of her will, as per Exhibit A, was because the beneficiary was going to do up the house and therefore he should get the benefit of that. 30 When one turns to the beneficiary's evidence, there is evidence of improvements that he carried out on the Blacktown property. That evidence is contained in paragraph 47 of his affidavit. When considering that paragraph of the affidavit, two things must be borne in mind. Firstly, the date of the will. The will was executed in 1987 and the deceased became an occupant of a nursing home in 1990. 31 She no longer had beneficial use of the home after 1990. Nevertheless, it could be said that any improvements carried out by the beneficiary may at some stage have had some benefit for the deceased. As the deceased was never called upon to use that property to finance her accommodation in the nursing homes, there was no benefit received by her. The benefit came on her death and that went to the beneficiary. 32 The other matters to consider are the items that are set out in paragraph 47 of the beneficiary's affidavit. It will be noted that a significant number of items and a significant amount of the quantum of those items were work that was carried out in 2000 and 2001. The deceased died in 2002. Any benefits she would have had to a pool or concreting is artificial. Any work that was carried out on the premises at that time were work that was done for the ultimate benefit of the beneficiary. 33 It seems to me that the deceased was to some extent in her anticipation of her son performing work around the place was going to perform work probably on an ongoing basis since 1987 and work that she would receive some benefit from by living in the house. It would appear that minimal work was done to the property while she was still a resident of it. 34 In my view, then, therefore, provision should be made for the plaintiff. He satisfied the first stage of Singer (supra). The next matter to consider is what provision, if any, should be made which would be adequate provision. 35 In dealing with the question of adequacy, it is not a matter of looking at what perhaps a plaintiff might see as his or her best opportunity from the estate. It is balancing firstly the size of the estate, those who benefit under the terms of the will, what the needs of the plaintiff are and what the competing needs of others are. 36 I have already set out the financial circumstances of both brothers. There has been some criticism made of the plaintiff's evidence. In my view, there is sufficient material in the plaintiff's evidence on this application to establish that there are needs that this court should address in terms of determining what would be adequate provision for him. His income is greater than that of his brother, however, his liabilities are also greater than his brother's. 37 In my view, the plaintiff has established that he has a need to reduce the level of debt that he has. That debt is the loan to GE Finance of $23,500. If that loan was paid out that would give the plaintiff additional income to enable him to enjoy at least a modest level of living. He is 44 years of age. He has a superannuation fund which, like everything else about the plaintiff, is modest. His evidence today was that he is in permanent employment with the City Council in Cairns and his employment is fairly secure. Nevertheless, he is a son of the deceased. 38 It seems to me that providing from the estate an amount of $23,500 would not in all the circumstances amount to adequate provision for him. I am of the view that he should be given a sum greater than that to give him some protection against the possibility of losing his employment or to cover any increase in costs of living or perhaps to give him a base upon which to borrow funds which may enable him, at some stage, to purchase modest accommodation for himself. 39 In considering that aspect, I must not forget the position of the beneficiary. The beneficiary does not own any realty. Like his brother, he is of modest circumstances. Unlike his brother, he has lived in the family home all his life. He has nothing to show for it. The testatrix made provision for him. 40 The court has to respect that wish but only up to a point where it is of the opinion that some provision should be made for some other person, in this case, her other son. The beneficiary earns less than his brother. There is no evidence of a significant superannuation fund to look forward to. He has lived in Sydney all his life. His costs of living are only going to increase. His income will always increase modestly. That has to be taken into account. 41 In my view, weighing up all those matters, I am of the view that an order ought to be made pursuant to the Act for provision to be made out of the estate of the deceased for the plaintiff in the sum of $40,000. 42 I order that the defendant pay the plaintiff's costs. The defendant's costs are to be paid out of the estate on the indemnity basis. **********