New South Wales Supreme Court CITATION : Reckless v Walker [2004] NSWSC 857 HEARING DATE(S) : 2 and 3 August 2004 JUDGMENT DATE : 16 September 2004 JURISDICTION: Equity Division JUDGMENT OF : Master McLaughlin at 1 DECISION : (1). I order that, in lieu of the benefit given to him under the will of the late Charles Lawrence Attewell Reckless ("the Deceased"), the Plaintiff receive a legacy in the sum of $20,000, such legacy not to bear interest if paid on or before 16 November 2004, and if not so paid to bear interest at the rates prescribed for unpaid legacies under the Wills, Probate and Administration Act 1898.; (2). I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased.; (3). The exhibits may be returned. CATCHWORDS : Succession. - Family Provision. - Claim by adult son. - Extent of contact between Plaintiff and Deceased. - Statements made by Deceasd in his will. - Financial and material circumstances of the Plaintiff. - Asserted needs of the Plaintiff. - Whether Plaintiff has been left without adequate provision for his proper maintenance. - Competing claim of the Defendant. LEGISLATION CITED : Wills, Probate and Administration Act 1898 (New South Wales) Family Provision Act 1982 (New South Wales) PARTIES : David Winston Reckless (Plaintiff) Patricia Dawn Walker (Defendant) FILE NUMBER(S) : SC 5980 of 2002 COUNSEL : Mr. R. D. Wilson (Plaintiff) Mr. L. Ellison (Defendant) SOLICITORS : Turnbull Hill Lawyers (Plaintiff) Laliotis Lawyers (Defendant) - 12 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MASTER McLAUGHLIN Thursday, 16 September 2004 5980/02 DAVID WINSTON RECKLESS –v- PATRICIA DAWN WALKER JUDGMENT 1 MASTER: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 18 December 2002, the Plaintiff, David Winston Reckless, claims an order for provision for his maintenance and advancement in life out of the estate of his late father, Charles Lawrence Attewell Reckless (to whom I shall refer as "the Deceased"). 3 The Deceased died, aged 99, on 16 August 2002. He left a will dated 3 November 1993, probate whereof was on 21 November 2002 granted to Patricia Dawn Walker, the executor named in such will (who is the Defendant to the present proceedings). 4 The principal asset in the estate of the Deceased was a house property situate at and known as 207 William Street, Earlwood, which had been the residence of the Deceased (and of his wife, Mrs. Maude Reckless, until her death in 1986), for more than 50 years. (I note that the inventory of property, for reasons which may be due merely to inadvertence, identifies that house property as 207 Homer Street, Earlwood.) Although the inventory of property ascribes a value of $480,000 to that property, it was at the hearing agreed between the parties that the present value of the house property at 207 William Street, Earlwood (to which I shall refer as "the Earlwood property") was $560,000. 5 The other assets disclosed in the inventory of property were 1,319 ordinary shares in St. George Bank Limited (to which a value of $22,500 was ascribed, although it would appear that the present value of those shares is about $28,000); and a savings account with the St. George Bank having a credit balance of $1,600. 6 It will be appreciated that in calculating the value of the estate available for distribution, the costs of the present proceedings must be taken into account. It has been estimated on behalf of the Plaintiff that his costs will total $34,580, whilst it is estimated that the Defendant's costs will total $33,800. It is appropriate, therefore, to proceed upon the basis that the net distributable estate is in the order of $521,000. 7 By his will, the Deceased gave a legacy of $250 to each of the Plaintiff, the Plaintiff's wife (Margaret Elaine Reckless) and their two children (Tracey Suzanne and Sharon Lee). The Deceased gave the residue of the estate to the Defendant. 8 Clause 4 of the will, after providing for the foregoing legacies, continues, I DO NOT LEAVE any more money to my adopted son DAVID WINSTON RECKLESS or his family as I have assisted him and his family since the date of his marriage and have given them twenty thousand dollars and a car over the last seven years and he has had no regard for my welfare over the past seven years which is borne out by the fact that he has only visited me twice in seven years and has never bothered to telephone me or enquire about my health. 9 The plaintiff was born on 1 July 1944 and is presently 60 years of age. He is the adopted child of the Deceased and the Deceased's wife (who died in February 1986). No other children were born to the Deceased. (The fact that the Plaintiff was adopted does not have any bearing upon his status as a child of the Deceased.) 10 The Plaintiff married his present wife, Margaret Elaine Reckless, in September 1967. They have two children, Tracey Suzanne (now aged 33) and Sharon Lee (now aged 32). 11 The Plaintiff suffers from what has been described as gouty arthritis and, in consequence, receives a disability pension of $390 a fortnight. His last paid employment was as a bus driver in 2002. He has not returned to work since that time and has no intention of resuming employment. The Plaintiff's wife, Mrs Margaret Reckless, also receives a pension by way of a partner allowance, in an amount of $341 a fortnight. They conjointly have savings of about $18,500 in a credit union, from which they earn interest of about $740 a year. Thus the combined annual income of the Plaintiff and his wife is about $19,740. 12 According to the Plaintiff, the annual expenditure of himself and his wife is in the order of $21,135. It was submitted on behalf of the Plaintiff that there was thus a shortfall of income over expenditure in an amount of $2,129 a year. However, that calculation does not appear to take into account the interest which they receive on their current savings of about $18,500, and the interest which they should expect to receive on that part of the surplus of more than $47,000 resulting from their recent sale of one residence and their purchase of another which will remain even after they have expended part, or possibly most, of that surplus upon improvements to the Regency Downs property and acquisitions for the furnishing of that property. 13 The Plaintiff and his wife have in very recent times sold the house property in which they were residing at Eagleby in Queensland and have purchased a rural property at Regency Downs in Queensland (the nearest town of significance being Ipswich, which is some 30 km away). The Regency Downs property was purchased for $165,000, that purchase being financed by a bridging loan of $170,000 in June 2004. The sale of the Eagleby property was completed only a few days before the hearing, for a price of $220,000. After deducting commission of $7,000 (and, presumably, legal expenses) and after discharging the mortgage on that property and repaying the bridging loan on the Regency Downs property the Plaintiff and his wife have a surplus of $47,257 from the proceeds of sale of the Eagleby property. The present assets and liabilities of the Plaintiff and his wife are as follows: Assets Regency Downs property – $165,000 Savings (in credit union) - $18,500 Surplus on sale of Eagleby property - $47,257 Liabilities Bank card Coles-Myer David Jones Total – $8,800 14 Although, as had been recorded, the Plaintiff's wife is not presently in remunerative employment, she gave evidence that she has in recent times made application for a position which she will be enabled to perform from her residence. There appeared to be no reason why she could not return to the workforce, and receive an income somewhat greater than the pension which she is presently receiving. 15 Until 1984, the Plaintiff and his family were living at Marrickville, where they had been residing since 1977. In 1984, they moved to Warnervale on the Central Coast of New South Wales. It was the evidence of the Plaintiff that, throughout their period at Warnervale, they maintained close contact with the Deceased, who, they said, visited them each weekend, travelling between Earlwood and the Central Coast by railway. The extent of that contact was disputed by the Defendant. 16 During that period the Deceased also gave to the Plaintiff a Valiant motor car (the value of which, according to the Plaintiff, was minimal) and gave to the Plaintiff a gift of money in cash on at least one occasion, the Plaintiff saying that that was in an amount of only $1,000 (not the $20,000 referred to in the will) 17 The Defendant had been the proprietor of a small retail store at 174 - 176 William Street, Earlwood, located in close proximity to the residence of the Deceased at 207 William Street. The Defendant, her husband and their family had moved into residence at those shop premises when the store was acquired by them in about 1981. Shortly thereafter the Defendant met the Deceased and his wife, who at that time was still alive. The acquaintance of the Deceased with the Defendant continued and matured into a close friendship, especially after the death of the Deceased's wife in February 1986. It will be appreciated that at the time of the death of his wife the Deceased was aged almost 83. A clear picture emerges of the Deceased after the death of his wife and in his declining years as a lonely old gentlemen who suffered significant problems with his physical health. 18 As the years progressed the Defendant and her family became not only close personal friends of the Deceased, but also his principal carers. The Defendant gave evidence of a conversation which she had had with the Deceased and his wife in which she promised to look after whoever became the survivor of that couple. It is quite apparent that she fulfilled that promise. 19 For several months in the latter part of 1989, the Deceased resided with the Defendant and her husband at 174-176 William Street. There was even a proposal, which did not proceed, that the Deceased would sell the Earlwood property to the Defendant for the sum of $100,000 (presumably, in return for a promise by the Defendant to look after him in that house). In May 1990, at the request of the Deceased, the Defendant and her husband moved into the Earlwood property, they having sold their business in April 1990 for about $35,000. From that time onwards the Deceased was looked after by the Defendant and her husband. The Deceased, after a short period as a patient in Canterbury Hospital, of his own volution entered a nursing home in May 2002. He was a resident in several nursing homes before his death on 16 August of that year. 20 There was a great deal of evidence adduced concerning not only the degree of contact between the Plaintiff and the Deceased, but also the asserted barriers raised by the Defendant to prevent the Plaintiff from having contact with his father. 21 I have already set forth the statement made by the Deceased in his will explaining why he did not leave to the Plaintiff and his family benefits greater than the four legacies of $250. In clause 3 of his will, the Deceased, after giving the Earlwood property to the Defendant, continued, The said PATRICIA DAWN WALKER has cooked and looked after me completely for the past seven years Those statements of the Deceased are admissible pursuant to section 32 of the Family Provision Act . 22 On behalf of the Plaintiff much was made of the fact that, since the Will was executed on 3 November 1993, the reference to the benefits given by the Deceased to the Plaintiff "over the last seven years" and to the failure of the Plaintiff to have regard for his father's welfare and to visit or contact him "over the past seven years" must refer to the period from late 1986 to November 1993, and to the fact that in that period there was more contact than suggested in the Deceased in the Will. Reference to the Defendant having cooked and looked after the Deceased "for the past seven years" must also be taken as referring to the period from late 1986 until November 1993. It should be recognised that testators are human, and are subject to inaccuracies in their recollection. The Deceased may have been mistaken concerning the period of seven years preceding his Will. However, there is little doubt that the complaints of the Deceased concerning the lack of contact from the Plaintiff were accurate for the period of seven years preceding the Deceased's death on 16 August 2002, that is for the period from mid-1995 until the death of the Deceased. Similarly, the Defendant and her family were the principal carers of the Deceased from the time they moved into his residence in May 1990 until he went to hospital and subsequently entered a nursing home in May 2002. 23 It is not necessary for me to make findings concerning each and every one of the assertions of the Plaintiff that the Defendant had deterred, prevented or thwarted attempts by the Plaintiff and his wife to maintain contact, at least by telephone, with the Deceased. Suffice it to say that it is difficult to resist the conclusion that, especially during the last seven years of the Deceased's lifetime, the Plaintiff, had he wished to do so, could have effected and maintained contact with his father. He did not see the Deceased after 1990, and he did not have any telephonic conversation with him after 1995. 24 Evidence was given on behalf of each party concerning an incident in 1995 when, in consequence of a number of telephone calls to the Defendant's residence, the Police were summoned by the Defendant. On balance, I prefer the evidence of the Defendant to that of the Plaintiff and his wife concerning that incident. The Plaintiff's acknowledgment of lack of memory concerning certain events, and his somewhat cocky (not to say flippant) responses to various questions asked of him under cross-examination did not engender confidence in the accuracy of his evidence where it conflicted with that of other witnesses. 25 The Defendant was born on 19 May 1945, and is presently aged 59 years. Since she disposed of her retail business she has not worked. The Defendant is married to Graeme Walker, who is employed as a warehouse manager earning $671 a week net. At the present time the Defendant and her husband have assets totalling $18,000 (which includes an amount of $5,000 in an account with the St. George Bank). They have a Visacard debt of $1,800. They do not own any real property and have no significant assets. Their children are no longer dependent upon them. 26 It is in the light of the foregoing factual circumstances that the Court must proceed to a consideration of the claim of the Plaintiff. 27 I have had the benefit of receiving written outlines of submissions and a chronology from Counsel for respective parties. Those documents will be retained in the Court file. 28 The Plaintiff, as a son of the Deceased, is an eligible person within paragraph (b) of the definition of that phrase contained in section 6 (1) of the Family Provision Act. As such, he has the standing to bring the present proceedings. 29 It is probable that at least the Defendant, and possibly also her husband, is also an eligible person in relation to the Deceased, being such under paragraph (d) of the foregoing definition. Each of the Defendant and her husband was a member of the same household as the Deceased for the period of several months in late 1989 when the Deceased moved into their shop premises at 174-176 William Street, Earlwood. From May 1990 the Defendant, her husband and the Deceased were members of the same household at 207 William Street, Earlwood, that situation continuing until the Deceased went to hospital and thereafter commenced to reside in a nursing home some twelve years later. Throughout that period of twelve years, the Defendant and her husband were dependent upon the Deceased for shelter and accommodation. Throughout that period they expended significant sums of their own money upon repairs and improvements to Deceased's property. It is likely in those circumstances that each of the Defendant and her husband is an eligible person in relation to the Deceased. 30 But, in any event, the Defendant, whether or not she is such an eligible person, was certainly the principal object of the testamentary beneficence of the Deceased, receiving his entire estate apart from the four legacies totalling $1,000. 31 It should at the outset be appreciated that it is for the Plaintiff to establish his claim upon its own merits. The Defendant, who is the chosen object of the bounty of the Deceased, does not have to prove anything. Her financial and material circumstances cannot enhance the claim of the Plaintiff. They may, however, have the effect of reducing, or even extinguishing, any order for provision an entitlement to which the Plaintiff might otherwise establish. 32 It should also be appreciated that an order for provision is not made as a reward for good conduct on the part of an applicant. Neither is such an order withheld as punishment for perceived bad conduct on the part of an applicant. 33 In his principal affidavit filed in support of the summons, being that sworn on 5 March 2003, the Plaintiff set forth what he asserted as being his then needs. Those asserted needs can only be described as a wish list. They included a new motor car for each of himself and his wife, one such new motor car having an estimated cost of between $30,000 and $40,000 and the other having an estimated cost of about $20,000. The residence at Eagleby which they at that time owned boasted a swimming pool, and a not inconsiderable claim was made in respect to maintenance of that pool and maintenance of items associated therewith. The Plaintiff sought replacements of many electrical appliances and white goods. In addition, amongst his expenses and asserted needs were the cost of the maintenance of two greyhounds. 34 The Plaintiff's present real estate does not run to a swimming pool, although for reasons that were not adequately explained, it consists of five and a half acres. He presently owns only one greyhound, although in July 2004 he owned two. The Plaintiff also expressed a wish to acquire a demountable structure in which to accommodate his daughter and her family on their occasional visits. Such a commendable desire does not, however, constitute a need of the Plaintiff. 35 It will be appreciated that it is not for the Court to express any view concerning the lifestyle which the Plaintiff and his family might choose to maintain or concerning their wishes and desires for the acquisition of property or chattels or concerning how they expend their income. The question for the Court is whether the estate of the Deceased should be required to bear the costs and expenses associated with such lifestyle and wishes. 36 The Plaintiff seeks what was described by his Counsel as a lump sum or nest egg which would provide a hedge should circumstances turn for the worse, and should also go towards meeting the shortfall between his income and his expenses. According to the calculations conducted on behalf of the Plaintiff, that shortfall amounts to $45.50 a week. The Plaintiff also claims an additional amount of $82,000 which, when added to his present savings of $18,500 would constitute such a nest egg or hedge in an amount of $100,000. The Plaintiff also seeks that he should receive an amount adequate for the payment of his credit card debts, in an amount of about $8,800. The original cost of two new replacement motor vehicles was somewhat reduced in the final submissions of the Plaintiff. The amount which he is now seeking for two such vehicles is in a total amount of $33,000. 37 I can see no reason whatsoever why the relevant need which is sought to be met from the estate of the Deceased should include replacement of not one but two motor vehicles for two persons, neither of whom is in employment and each of whom is in receipt of a pension. They live within easy walking distance of shops. In any event, if they do more substantial shopping at Ipswich they travel together in one motor vehicle. 38 The Plaintiff claims provision out of the estate in a total amount of about $150,000, comprising the following components: $117,000 to cover vicissitudes, $8,800 to meet debts, and $24,000 for the acquisition of two fresh motor vehicles (that figure being calculated in a way which makes allowance for the trade-in of their two present vehicles). 39 I have already expressed my view that the lack of contact between the Plaintiff and the Deceased during the last six or seven years of the Deceased's lifetime largely resulted from the choice of the Plaintiff, Nevertheless, I do not consider that that reduced contact should be treated as conduct which of itself disentitles the Plaintiff from an order for provision out of the estate of his father. 40 It must be recognised that the Plaintiff and his wife have an unencumbered residence, and they also have a capital fund totalling about $66,000. That fund is sufficient to enable the Plaintiff to discharge his present debts of $8,800, and to acquire one replacement motor vehicle costing $15,000 (being the purchase price of $19,000 less an amount of $4,000 as a trade in on his present motor vehicle). The surplus remaining after the sale of the Eagleby property and the purchase of the Regency Downs property is more than sufficient for those purposes. The Plaintiff will still have more than $23,000 remaining from such surplus, and he and his wife will have their savings of about $18,500 (invested in a credit union). 41 However, in deciding whether the Plaintiff has been left without adequate provision for his proper maintenance, I recognise that it is desirable that the Plaintiff should have an amount which will constitute some relatively small fund to meet unexpected contingencies. In this regard I do not overlook the Plaintiff's health problems. In addition to the amount of $18,500 and the balance of $23,000 remaining from the surplus on the sale of the Eagleby property, I consider that an additional amount of $20,000 would be adequate to constitute such a fund. Accordingly, I conclude that the Plaintiff has established an entitlement to an order for provision in an amount of no more than $20,000. 42 I have already observed that the financial and material circumstances of the Defendant may have the effect of reducing, or even extinguishing, an order for provision an entitlement to which the Plaintiff might otherwise establish. 43 It will be appreciated that the Defendant and her husband expended not inconsiderable amounts of money, totalling $45,000, on the Deceased and on his residence in the period from 1989 to 1998. Had the Deceased not made significant provision for the Defendant in his will, it is likely that she would have had an excellent claim against the estate of the Deceased, grounded either upon contract (in the nature of the cases frequently referred to as "housekeeper cases") or upon the concept of a constructive trust being imposed upon the Earlwood property. If the Plaintiff receives an order for provision in the amount which I have proposed, then it is almost inevitable that the Earlwood property must be sold to meet such an order, as well as the costs of the proceedings. 44 The Defendant gave evidence of her enquiries as to whether she might be able to raise a mortgage over the Earlwood property or otherwise to obtain a bank loan to meet any order for provision in favour of the Plaintiff. Since she is not in employment and has no assets, she does not have the ability to repay any advance. Although her husband is in employment his income is not substantial. Nevertheless, in the light of the agreed valuation of the Earlwood property at $560,000 (which is based upon a professional valuation of that property), even if the Plaintiff receives an order for provision in an amount of $20,000, together with his costs in an amount of about $35,000, there will still remain in the estate an amount of about $534,000 for the Defendant. It will be appreciated, however, that from that amount she must pay her own costs of almost $34,000. But she will still be left with about $500,000. 45 No evidence was given as to the ability of the Defendant's husband to meet a housing loan, either on the Earlwood property or on some other residence which the Defendant might choose to acquire. 46 In all the circumstances of this case, I am not persuaded that the order for provision an entitlement to which I consider that the Plaintiff has established in an amount of $20,000 should, on account of the financial and material circumstances of the Defendant be reduced, let alone extinguished. 47 Accordingly, I make the following orders: (1). I order that, in lieu of the benefit given to him under the will of the late Charles Lawrence Attewell Reckless ("the Deceased"), the Plaintiff receive a legacy in the sum of $20,000, such legacy not to bear interest if paid on or before 16 November 2004, and if not so paid to bear interest at the rates prescribed for unpaid legacies under the Wills, Probate and Administration Act 1898. (2). I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased. (3). The exhibits may be returned. ********** Last Modified: 10/15/2004 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.