New South Wales Supreme Court CITATION : Troy v Slede [2005] NSWSC 1080 HEARING DATE(S) : 27 and 28 June 2005 JUDGMENT DATE : 25 October 2005 JUDGMENT OF : Associate Justice McLaughlin at 1 DECISION : 1. I order that the proceedings be dismissed. 2. I order that the Plaintiff pay the costs of the Defendant, such costs to be on the party and party basis. 3. I order that the Defendant be entitled to recoup from the estate of the late Willi Slede ("the Deceased") the difference between the foregoing costs which she may recover from the Plaintiff and the costs of the Defendant on the indemnity basis. 4. The exhibits may be returned. CATCHWORDS : Succession. - Family Provision. - Only significant asset in estate is one half interest as tenant in common in matrimonial home of Deceased. - Other one half interest is held by Defendant. - Claim by adult son. - Financial and material circumstances of the Plaintiff. - Obligation upon applicant for provision to place before the Court as fully and frankly as possible all available information concerning his financial and material circumstances. - Whether Plaintiff has been left without adequate provision for his proper maintenance. - Competing claim of Defendant, who is widow and sole beneficiary of Deceased. - Any order for provision in favour of Plaintiff would result in Defendant being deprived of her home. LEGISLATION CITED : Family Provision Act 1982 Singer v Berghouse (1994) 181 CLR 201 CASES CITED : Vigolo v Bostin (2005) 79 ALJR 731 Kenneth Ernst Troy PARTIES : Emma Slede FILE NUMBER(S) : SC 5146 of 2004 I. Wiley (Plaintiff) COUNSEL : P. Jeffriess (Defendant) K.M. Harkness & Co (Plaintiff) SOLICITORS : Emery Partners, by their agent Slade Manwaring (Defendant) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSOCIATE JUSTICE McLAUGHLIN Tuesday, 25 October 2005 5146/04 - KENNETH ERNST TROY –v- EMMA SLEDE JUDGMENT 1 HIS HONOUR: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 20 September 2004, Kenneth Ernst Troy claims an order for provision for his maintenance and advancement in life out of the estate of his late father Willi Slede (to whom I shall refer as "the Deceased"). The Deceased died on 21 March 2003, aged 82. He left a will dated 20 July 1977, probate whereof was 15 July 2003 granted to his widow, Emma Slede, the executor named in such will (who is the Defendant to the present proceedings). 3 By that will the Deceased gave his entire estate to the Defendant. 4 The inventory of property discloses that the only asset of the Deceased was a one half share as tenant in common of a house property situate at and known as 77 Wyndham Street, Greta, to which an estimated value of $100,000 was ascribed. (The other half share in that property was held by the Defendant.) The inventory of property also discloses that the Deceased conjointly with the Defendant held moneys in two bank accounts (totalling about $400) and owned a motor vehicle (to which a value of $1,200 was ascribed) and a caravan (to which a value of $2,000 was ascribed). 5 The Plaintiff is one of the two children born to the first marriage of the Deceased, the other child (being the Plaintiff's sister, Elke Jackson) having died about five or six years ago. The Plaintiff was born on 9 July 1949 and is presently aged 56. The Deceased had been born in Germany, and the Plaintiff was also born in that country. The Deceased, his wife and the Plaintiff came to Australia in January 1955 and (when the Plaintiff was aged five) they ultimately settled at Greta. 6 Evidence was given by the Plaintiff concerning his deprived upbringing, and concerning the neglect which he asserted he experienced from his parents during his childhood and teenage years. In consequence, he spent a considerable part of that period in institutions, and subsequently, as a result of convictions for criminal offences, he spent periods in jail. However, the Plaintiff has not been in jail since he was released from custody in 1979, having served a period of about two years after being convicted as an accessory to a break and enter. 7 For a period in 1963-1964 the Deceased and his family resided in a house property owned by the Defendant at 6 Wyndham Street, Greta. The Defendant was at that stage a widow, her husband having been killed in an industrial accident some time earlier. Their departure from that property would appear from the evidence of the Plaintiff to have been in somewhat dramatic circumstances, consequent upon an incident involving the Plaintiff's mother and the Defendant. However, subsequently, the Deceased left the Plaintiff's mother and commenced to reside with the Defendant at 77 Wyndham Street, Greta. That house property had devolved upon the Defendant as a result of the death of her first husband. 8 The Defendant had three children by her first marriage, all of whom are now adults. 9 The Deceased and his first wife, the Plaintiff's mother, subsequently divorced, and on 20 October 1971 the Deceased married the Defendant. The Deceased's first wife died in 1991. 10 The evidence was silent concerning the circumstances in which the Deceased became a co-owner as tenant in common with the Defendant of the house property at 77 Wyndham Street, Greta. 11 The Plaintiff has been married three times, first in 1972, for a period of about five years; then in November 1982, for a period of twenty-one years; and, more recently, on 6 March 2004 to his present wife, Susan Annette Troy, to whom he remains married. 12 It should be recorded that the Plaintiff, who gave his present name as Kenneth Lothar Ernst Rudolph Troy, has during his lifetime used a number of names, having changed his surname on various occasions. 13 The Plaintiff has no tertiary or vocational qualifications. He has never held a permanent full-time job. Throughout the period from 1979 to the present the Plaintiff has been employed in a variety of occupations. From about 1993 to about 2002 he engaged in seasonal work as a forklift driver employed by Golden Circle Cannery, where he earned up to $27,000 a year. In 2003, whilst working for another employer, he suffered an injury to his shoulder, which resulted in him giving up that employment and in receiving workers compensation in an amount of $422 a week. 14 The Plaintiff gave evidence concerning the health problems resulting from that injury, and the fact that he has not been able to work since then. He is currently in need of surgical treatment for his shoulder and hopes that if that procedure is successful, he will be able to resume some form of employment. 15 The Plaintiff is currently an undischarged bankrupt (his present bankruptcy being the second occasion on which he has been bankrupt, on each occasion the bankruptcy being ordered upon the Plaintiff's own application). 16 I have already referred to the fact that the value ascribed in the inventory of property to the only asset in the estate of the Deceased was $100,000. However, it was suggested on behalf of the Plaintiff that a more appropriate valuation was $160,000. Nevertheless, there was no expert evidence presented to the Court in this regard. 17 In calculating the value of the estate available for distribution, the costs of the present proceedings must be taken into consideration. It is estimated on behalf of the Plaintiff that his costs will total about $44,700, whilst it is estimated on behalf of the Defendant that her costs will total $23,540. It will be appreciated that, in consequence, if the totality of the costs (in an amount of about $68,200) were payable out of the only asset in the estate of the Deceased, there would remain probably less than $32,000 in the estate. In this regard it should also be noted that the interest of the Deceased in the house property at 77 Wyndham Street has been transferred to the Defendant, who already was the owner of the other one half share as tenant in common in that property. In consequence, she is now the registered proprietor of the totality of that property. 18 Regarding the Plaintiff's costs, however, it should be noted that during the course of the hearing Counsel for the Plaintiff informed the Court, that in the event that the Plaintiff were liable to pay any part of his costs over and above any amount which he might receive by way of costs out of the estate of the Deceased, the Solicitor for the Plaintiff would not require the Plaintiff to pay more than $25,000 out of his own pocket. 19 It should also be here recorded that, in consequence of very recent correspondence between the Solicitor for the Plaintiff and the Australian Government Solicitor, on behalf of the Australian Bankruptcy Administration, the Official Receiver, as official trustee in bankruptcy of the Plaintiff, has agreed that any amount which the Plaintiff might receive in the present proceedings would not in its totality be required to be paid to the Official Receiver, to be used to meet the indebtedness of the Plaintiff's bankrupt estate to his creditors, but that the Official Receiver would require to be paid to him for such purpose only 40 per cent of any amount which the Plaintiff might receive. 20 It should be emphasised that it is incumbent upon an applicant for an order for provision under the Family Provision Act to set forth as fully and as frankly as possible all available information concerning the applicant's financial and material circumstances. 21 In the instant case, this the Plaintiff has signally failed to do. Only in the course of cross-examination did it emerge that at the present time the Plaintiff has no income. In his affidavit evidence he referred to an income of $422 a week being paid to him by way of worker's compensation. However, under cross-examination he stated that those worker's compensation payments had ceased on 3 May 2005, about seven weeks before the hearing. He said that he had consulted a solicitor about this cessation in his worker's compensation payments, but that he had not given instructions for any proceedings to be instituted in that regard. He also said that the surgery required to his wrist would not be paid for by his former employer or by Workcover. 22 According to the Plaintiff his bankruptcy did not discharge various motor traffic penalties incurred by him and he was paying off the outstanding balance of those penalties (in an amount of about $2,000) at the rate of $30 a fortnight from his worker's compensation income. 23 Apart from the statement in his affidavit evidence that he was currently residing in a home unit owned by his present wife (which unit was said by the Plaintiff to be worth about $180,000, with an outstanding mortgage of about $20,000), the Plaintiff did not in his evidence in chief set forth any details concerning the financial and material circumstances of his wife. Neither did Mrs Susan Troy, who swore an affidavit in support of her husband's claim, provide any such information. 24 The home unit in which the Plaintiff and his wife reside is located at Nundah, which is a suburb of Brisbane. Details were elicited under cross-examination concerning the nature of the accommodation in that home unit, which is located in a security building, and which has a security car space attached to it. The Plaintiff's wife, who worked before her marriage to the Plaintiff, has a superannuation entitlement, in an amount which was not disclosed. She is employed in a factory, and receives a salary of $800 net a fortnight. She has no other income. The Plaintiff's wife owns two motor vehicles, being a 1998 Daihatsu Terrios (which is a small four wheel drive vehicle), and a Mitsubishi sedan motor vehicle which is about fifteen years old. The Plaintiff has the use of both those motor vehicles. 25 The Plaintiff does not pay any rent in respect to his occupancy with his wife of her home unit at Nundah. Neither does he contribute towards the purchase of food or to household outgoings. The Plaintiff said that he brought nothing into his current marriage. 26 The Plaintiff's evidence concerning the circumstances of his current bankruptcy were skimpy in the extreme. Although it would appear that his liabilities exceeded his assets by about $114,000, he was extremely vague concerning the identity of and amounts owed to his various creditors. He did, however, say that the largest creditor was Centrelink, to which entity he owed about $33,000. 27 It then emerged, in passing, during the course of the Plaintiff's cross-examination, that, in consequence of his having received payments from Centrelink (which, as I understand, were the payments which gave rise to his indebtedness to Centrelink in the bankruptcy), the Plaintiff is now facing a criminal charge, apparently for fraud, which will be heard on 15 July 2005 in Brisbane. Although it would seem to me that this charge, and its possible consequences (as well as any associated costs which the Plaintiff might bear in defending the charge, if it is to be defended) would be of considerable relevance to the Plaintiff's present financial and material circumstances, and of significance to any assertion of present need of the Plaintiff, the Plaintiff chose not to place before the Court in his evidence in chief any information concerning the existence or possible consequences of this charge, which was to be heard a little over two weeks after the hearing of the Plaintiff's present claim. 28 I have had the benefit of receiving a written outline of submissions and a chronology from Counsel for the respective parties. Those documents will be retained in the Court file. 29 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. The only other eligible persons in relation to the Deceased are the Defendant, who, as the widow of the Deceased, is an eligible person within paragraph (a) of that definition; and Johnny Sledzianowski, Rosetta Millen and Carin McNalley. The relationship of those persons to the Deceased is not disclosed in the evidence. I have assumed that they are the three adult children of the Defendant, and that they may be eligible persons within paragraph (d) of the definition of that phrase. In this regard, however, I note that the Deceased in his will refers to "my daughter ROSITA [sic] MILLEN". Although served with a notice of claim none of those three persons has made any claim against the estate of the Deceased. 30 In performing the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208-210 the Court must first consider whether, in consequence of the testamentary dispositions of the Deceased, the Plaintiff has been left without adequate provision for his proper maintenance. (See, also, Vigolo v Bostin (2005) 79 ALJR 731, which affirmed the correctness of the foregoing test in Singer v Berghouse.) 31 I do not overlook the deprived childhood of the Deceased, his periods in institutions, or the problems which resulted from the apparent total abdication by the Deceased of his parental obligations towards the Plaintiff during the Plaintiff's formative years. Nevertheless, the Court is required by section 7 of the Family Provision Act to look to the circumstances as they obtain at the present time, not to the circumstances which existed almost half a century ago. 32 I would also observe that it is all very well for the Plaintiff to hold the Deceased accountable for the personal shortcomings of the Plaintiff and the difficulties which he experienced in his earlier years. However, many persons overcome such difficulties and make a success of their lives, and achieve a degree of material prosperity. 33 It is apparent that the Plaintiff is not a good financial manager. He has been bankrupt on two separate occasions. At the age of 56, and having been in more or less continuous employment (albeit neither permanent nor full-time) for the past 25 years, he has no assets, and little in the way of prospects 34 Nevertheless, despite having no assets, and being an undischarged bankrupt, the Plaintiff has secure accommodation, in consequence of his present marriage, which the Plaintiff said was a successful and happy one, and which he expected to continue. He is required to make no contributions towards his accommodation or towards household outgoings or food. He has the use of two motor vehicles. 35 From a personal point of view it is understandable that a man might not wish to be totally dependent upon his wife. Nevertheless, the Plaintiff, who is an undischarged bankrupt, is in better practical and material circumstances than many persons who must work to maintain themselves (and often to maintain a spouse and children). The Plaintiff expressed a desire to acquire a residence in his own name, preferably a house rather than a home unit, and that such residence should be located in a suburb of Brisbane. He offered as a possible purchase price for such a residence an amount of $260,000. It seems to me that such a desire cannot in any way constitute relevant need in the Plaintiff. 36 A great deal of evidence was devoted to the nature and extent of the relationship between the Plaintiff and the Deceased. According to the Plaintiff, despite the shortcomings of the Deceased in failing to support the Plaintiff during childhood and early formative years, the Plaintiff, at least in more recent times, had a close and affectionate relationship with the Deceased and maintained regular contact with him both by telephone and by personal visits. The Defendant disputed the extent of that contact. 37 It will be appreciated that an order for provision is not made as a reward for good conduct. Neither is such an order withheld in consequence of perceived bad conduct on behalf of an applicant. 38 A number of areas of evidence were in dispute between the parties. It is appropriate, therefore, that I should express my views concerning the reliance to be placed upon the evidence given respectively by the Plaintiff and by the Defendant. 39 The Plaintiff did not appear to have a good recollection concerning various matters (including details of his current bankruptcy and the identity of and amounts owed to his various creditors). The Plaintiff did not offer any adequate explanation, even when confronted by a letter dated 19 August 1985 from the State Bank at Queanbeyan, concerning a personal loan in respect of which the Deceased had given a guarantee, but even denying the very existence of such a loan. Neither was I particularly impressed by the attempted explanation offered by the Plaintiff concerning the circumstances surrounding the theft by him of a motor vehicle, apparently in the 1960s, when he was aged about eighteen. 40 I have also referred to the fact that the Plaintiff did not present to the Court as fully and as frankly as possible all available information concerning his financial and material circumstances. 41 Where the evidence of the Plaintiff and that of the Defendant are in dispute, I prefer the evidence of the Defendant. However, those disputed areas of evidence are not determinative of the present application. 42 I am not satisfied that the Plaintiff has established that, in the circumstances of this case, he has been left without adequate provision for his proper maintenance. 43 The foregoing conclusion is of itself sufficient to determine the present proceedings. 44 But even if (contrary to the conclusion which I have just expressed) the Plaintiff were to have established that, in consequence of the testamentary dispositions of the Deceased, he had been left without adequate provision for his proper maintenance, the claim of the Plaintiff must be approached in the light of any competing claims upon the testamentary bounty of the Deceased. The only such competing claim is that of the Defendant. That claim was recognised by the Deceased who, by the terms of his will, gave the entirety of his estate to the Defendant. 45 The Defendant was born on 16 July 1926, and is now aged 79. According to the Defendant, the Deceased resided in her house as a boarder from 1962, and he and the Defendant were in a de facto relationship from 1966 until they married in 1971. From 1966 the Deceased suffered from emphysema, and it was the evidence of the Defendant that she cared for him during his ill health resulting from that condition. 46 The Defendant is presently in receipt of a pension in an amount of $338 a fortnight from Centrelink. In addition, she receives interest of $345.21 a month upon an amount of about $100,000 (which amount represents the net proceeds of sale of the house property at 6 Wyndham Street, Greta, to which I shall shortly make further reference), and she also receives a German pension of $307 a quarter. Upon my calculations, the Defendant's total income is in amount of about $14,160 a year (or about $272 a week). The Defendant gave an estimation of her outgoings (some on a weekly basis, others on a monthly basis, others on a quarterly basis, and yet others on an annual basis). Upon my calculations those outgoings total $16,305 a year (or about $314 a week). That is, the outgoings of the Defendant exceed her income by about $32 a week. Apparently that shortfall is met by assistance which she receives from the two of her adult children who live in proximity to the Defendant. 47 The Defendant, who does not belong to any health fund, is currently having some dental work performed. Although uncertain of the total cost of this work, she must pay $250 at her first visit to the dentist. 48 The Defendant suffers from health problems, being kidney disease, for which she receives medication and also pain relief, and she also suffers from a slipped disc in her lower back. 49 The house property at 77 Wyndham Street, Greta is the home of the Defendant, where she has resided for well over forty years. It will be appreciated that the practical consequence of any order for provision in favour of the Plaintiff would be that the residence of the Defendant must be sold, and she would be dispossessed of her home. 50 At the time of the commencement of the proceedings the Defendant also owned a house property known as 6 Wyndham Street, Greta, which had been owned by herself and her first husband. That property, which was in a state of considerable disrepair, was sold by the Defendant (apparently in late 2004 or early 2005) for $215,000. After costs and fees associated with that sale and the cost of repairs and maintenance to the property had been met, the Defendant said that with the proceeds of sale she purchased a new motor vehicle (at a price which was not disclosed in the evidence), and that she was then left with about $100,000, which sum she has invested. As I have already recorded, the Defendant receives interest of $345.21 a month on that investment. It would appear that the only significant assets of the Defendant are the house property at 77 Wyndham Street, Greta, an investment in an amount of about $100,000 and a motor vehicle. 51 If the Defendant were to be dispossessed of her home, it is most unlikely that she would be able to acquire another residence with her only monetary asset, being the investment of about $100,000. The Defendant should not at the age of 79 be disturbed in the security of her present residence, which has been her home for more than forty years. 52 I consider that the competing claim of the Defendant, the widow of the Deceased and his sole beneficiary, is such that her right to remain undisturbed in her residence should not be affected by any order for provision an entitlement to which the Plaintiff might otherwise have established. That competing claim of the Defendant would totally extinguish any such order for provision. 53 For the sake of completeness, I should also observe that there is no practical possibility of the Plaintiff receiving provision from the estate in an amount that would enable him to purchase a residence costing $260,000 (or to contribute one half of the cost of such a residence) or, indeed, to purchase any residence at all. The distributable estate is worth no more than $32,000, and thus, even if the Plaintiff were to be totally successful in the present proceedings, he could not obtain an award in excess of that amount. 54 I summarise as follows my foregoing conclusions. 55 I am not satisfied that the Plaintiff has established that in consequence of the testamentary dispositions of the Deceased he has been left without adequate provision for his proper maintenance. Even if, contrary to that conclusion, the Plaintiff were to have established an entitlement to an order for provision that entitlement would in my conclusion be totally extinguished by the competing claim of the Defendant, who is the chosen object of the testamentary beneficence of the Deceased. 56 I make the following orders: 1. I order that the proceedings be dismissed. 2. I order that the Plaintiff pay the costs of the Defendant, such costs to be on the party and party basis. 3. I order that the Defendant be entitled to recoup from the estate of the late Willi Slede ("the Deceased") the difference between the foregoing costs which she may recover from the Plaintiff and the costs of the Defendant on the indemnity basis. 4. The exhibits may be returned. 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.