Day v Bennett [2004] NSWSC 994

New South Wales Supreme Court

CITATION : Day v Bennett [2004] NSWSC 994 HEARING DATE(S) : 21 October 2004 JUDGMENT DATE : 21 October 2004 JURISDICTION: Equity JUDGMENT OF : Campbell J DECISION : Legacy of $140,000 granted

CATCHWORDS : SUCCESSION - FAMILY PROVISION AND MAINTENANCE - applicant partially dependent on deceased - application by stepson LEGISLATION CITED : Family Provision Act 1982 CASES CITED : Re Fulop Deceased (1987) 8 NSWLR 679 Parkinson v Burns [2000] NSWSC 991 Frank Lyndon Day - Plaintiff PARTIES : David John Bennett - First Defendant Michael David James Bennett - Second Defendant FILE NUMBER(S) : SC 4889/03 COUNSEL : J S Drummond - Plaintiff D Liebhold - Defendants SOLICITORS : Turnbull Hill Lawyers - Plaintiff Attwaters - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST

CAMPBELL J

THURSDAY 21 OCTOBER 2004

4889/03 FRANK LYNDON DAY v DAVID JOHN BENNETT & ANOR JUDGMENT 1 HIS HONOUR: This is an application under the Family Provision Act 1982, which is brought by a man now aged forty nine in the estate of his stepfather. Is the Plaintiff an Eligible Person? 2 The plaintiff was born on 12 March 1955. His parents separated when he was about six years old, and he lived with his mother after that separation, in a house which his mother owned. 3 In July 1971, when the plaintiff was sixteen years old, his mother married Keith Thomas McCloy, now deceased. His mother and stepfather went overseas for about two months immediately after their marriage. On their return, the plaintiff began living in the deceased's home. He was at the time a student in fourth year at High School. He had his own bedroom in that home. He continued living there until around February of 1972, when after a few weeks of school he found that he had an apprenticeship opportunity in Sydney, which he took. 4 He moved to Sydney for that apprenticeship. The apprenticeship took four or five years. During his apprenticeship, his income was not great. At first he had in the order of $25 a week in take-home pay. He lived in a boarding house, for which he paid around $18 a week in expenses, and he spent $2 or $3 on a weekly train ticket. It is easy to see that he had nothing left over. 5 His income during this period was supplemented by remittances which came from one or other of his mother or the deceased. The plaintiff can identify a particular payment of the order of $40 for union fees, which came from the deceased, but apart from that he does not know which of them, or whether it was both of them, who sent him these supplements to his income from time to time. 6 The plaintiff's mother sold her house soon after she married the deceased. From that sale, she received a little short of $7,000. She paid this into her own bank account. From that bank account she purchased herself a motorcar for a little over a thousand dollars. The rest of it, it is reasonable to assume, was used for living expenses. I would also assume that to some extent it was dipped into for payments to the plaintiff. 7 The plaintiff came home on certain weekends, over the period from 1972 until about 1980. The plaintiff's affidavit evidence presented a picture of close and continual contact with his mother and stepfather. For example, he said he went home "nearly every weekend" over this period from 1972 until 1980. In cross-examination he accepted that he did not know that it was "nearly every weekend". However, I am satisfied that he went home with some regularity to Newcastle over that period. He stayed with his mother and stepfather on those occasions. When he went home, his bedroom remained available for his use during that period. 8 In 1975 the plaintiff had a motorcycle accident, which result in him being hospitalised, then off work for three or four months. During that period of three or four months he lived at the house of the deceased. 9 In about June of 1980, he went back to live in his stepfather's house for about ten months. During that period, he had employment at a colliery but did not contribute to the household expenses. Over the period from April 1991, when he moved out to flat with some friends, until 1988, he stayed occasionally with his mother and stepfather when he was between houses. 10 It is appropriate at this stage to consider the extent to which the plaintiff has been exaggerating the closeness of the relationship between himself, his mother and stepfather, and its significance for this case. In his affidavit in chief in this case, the plaintiff said that his income, during the five months or so that he was living with his mother and stepfather in 1971 and early 1972, came solely from his stepfather. 11 The plaintiff has sworn an affidavit in some proceedings in the Family Court of Australia, which paints a somewhat different picture to the picture that he has painted in his affidavit in this case. The proceedings in the Family Court of Australia were ones which were commenced in 2000, by – or perhaps I should say in the name of – the plaintiff's mother, against the plaintiff's stepfather. By that time, the plaintiff's mother was living in a nursing home, and the proceedings were an attempt to obtain from the plaintiff's stepfather money to pay the plaintiff's mother's expenses, which were not covered by her pension. 12 For the purpose of that affidavit in the Family Court, the plaintiff said that the sale proceeds of his mother's house were used by her "for living expenses because Keith really resented spending money on me or mum". In his affidavit in the Family Court, when dealing with the period between 1972 and 1980 when he went home at weekends, the plaintiff said: "I often returned home on the weekends. Mum's life remained exactly the same as it was when I left. There was a lot of time I would stay away if I knew things between mum and Keith weren't good because it made me feel very uncomfortable and very sad for my mum". 13 As well, the plaintiff's Family Court affidavit revealed that in 1974 and 1975, there was a period when the plaintiff's mother had separated from the deceased. She took criminal proceedings against him for assault and took maintenance proceedings. Those matters were not mentioned in his affidavit in these proceedings. 14 In the affidavit in the Family Court, referring to the period when the plaintiff was living with his mother and stepfather in 1980, he says that he estimated he lived with his mother for a six-month period (not the ten months that he said in these proceedings). He said that at that time: "…things had remained exactly the same between she and Keith, the house was still very tense, and Keith was still very abusive. Mum was still doing all the shopping, washing, ironing, housework and the gardens in order that they were kept to Keith's standards. For the next 7 years I rented around Newcastle and I would call in regularly". 15 Notwithstanding this difference in the colouration that is put on the relationship in these two different affidavits I am satisfied that there is a common core of truth in them. Whatever the details of the relationship between the plaintiff's mother and stepfather were, whether it was a particularly happy one or not, the fact is that it kept on. Further, and more relevantly for present purposes, the plaintiff continued to have contact with his mother and stepfather, lived in their home for significant periods, and did so on terms where he was at least partly dependent upon the deceased. Even though the plaintiff's mother had something of the order of $6,000, after she had purchased her motorcar from the sale of her house, it is inevitable that to some extent the expenses of the plaintiff in living at the house were ones which were met by the deceased. 16 The plaintiff's mother did not work at all in paid employment after she married the deceased. It was he who paid the ordinary household expenses. It was he who was providing the roof over the plaintiff's head during the time that he was living there. For someone to be "partly dependent" upon the deceased, within the meaning of para (d) of the definition of "eligible person" in section 6(1) Family Provision Act 1982, it is not necessary that he be substantially dependent, but more than minimal dependence is needed: Parkinson v Burns [2000] NSWSC 991 at [9]. I am satisfied that the plaintiff was an eligible person, within paragraph (d) of the definition of that term in the Family Provision Act 1982. Factors which Warrant the Making of the Application? 17 Section 9(1) of the Family Provision Act 1982 requires the court to engage in a three-step process when deciding an application under the Family Provision Act 1982 which is brought by someone who falls within paragraph (d) of the definition of "eligible person". The court must first determine whether, having regard to all the circumstances of the case (whether past or present), there are factors which warrant the making of the application. A court is directed to refuse to proceed with the determination of the application unless it is satisfied that there are those factors. McClelland J in Re Fulop Deceased (1987) 8 NSWLR 679 at 681, said that: "the 'factors' referred to in the subsection are factors which when added to facts which render the applicant an 'eligible person' give him or her the status of a person who would be generally regarded as a natural object of testamentary recognition by a deceased." 18 Considering that question requires the relationship of them, overall, to be reviewed. 19 The plaintiff, whilst still at school, came across the deceased as the coach of a rival soccer team to that in which the plaintiff played. The deceased endeavoured to persuade the plaintiff to join his soccer team, I gather, unsuccessfully. 20 The deceased, after returning from the honeymoon in 1971, gave the plaintiff a stereo and watch. The deceased encouraged the plaintiff to bring his friends to his house, he knew the names of the plaintiff's friends and would talk to them while they were at the house. The plaintiff and his stepfather on weekends went to the football. The deceased and the plaintiff's mother attended a parents and students function at the end of year 10. The deceased made some efforts to get an apprenticeship for the plaintiff. That was in Newcastle, with the electricity distribution organisation, for which the deceased worked. The deceased gave parties for the plaintiff for both his eighteenth and twenty first birthdays. 21 The plaintiff married in 1988. He and his wife bought a house at Edgeworth. The deceased helped the plaintiff to paint the house, and do the tiling. After the plaintiff's marriage, he still visited his mother and the deceased once a week or thereabouts. He and his stepfather also went to the football on occasions, and to the West's Leagues Club for a drink. 22 In 1988, the plaintiff and his wife had a son, Jessie. The deceased would refer to Jessie as his grandson. The deceased would call the plaintiff either Frank or "son" before Jessie was born. After Jessie was born, the plaintiff referred to Keith as "Pop", as Jessie did from the time that he learnt to talk. Keith attended the birthday parties of Jessie. 23 The plaintiff's marriage did not continue. He separated from his wife in about 1995. 24 There are various tasks which the plaintiff did for his stepfather over the years. In 1980 or 1981, he rewired the deceased's house, without any payment for his labour. From time to time during or when he was living with his mother and stepfather, he mowed the lawns and attended to other jobs around the house – though he does not suggest he was the only one who did these things. 25 The deceased did not have a car, and did not drive. The plaintiff acted as chauffeur for his mother and stepfather from time to time. He collected them from their house and took them to the Leagues Club. On occasions, the deceased would ring the plaintiff, over the period from 1993 or 1994, and ask for a lift so that he could carry out chores like banking, shopping or going to the doctor. The plaintiff assisted the deceased in this way about once a week. The plaintiff accepts that, in so doing, he was seeking to benefit his mother as much as to benefit his stepfather, but the fact remains that it was a benefit to his stepfather. 26 In about 1998 the plaintiff's mother was put into a nursing home. The plaintiff would collect his stepfather and take him to visit the mother in the nursing home, and take him back again, at least once a week. This continued until 2000 at the time the Family Court proceedings, which I have earlier mentioned, began. Those Family Court proceedings caused a rift between the plaintiff and his stepfather. 27 The proceedings were ones which were instigated by the plaintiff's sisters, but the plaintiff supported their side in the proceedings. From that time, he did not take his stepfather to see his mother at all. 28 The plaintiff's mother died later in 2000. She did not leave an estate of any significance. It is likely that the plaintiff did nothing to inform his stepfather that his wife had died. Further, the deceased had made arrangements for himself and his wife to be buried in a common burial plot. The plaintiff's mother was buried elsewhere. This happened without the deceased knowing. 29 While there was this significant period of estrangement during the year 2000, overall the relationship between the plaintiff and his stepfather was one which meets the test of there being factors which warrant the making of the application. Should Provision be Made? 30 I turn now to the second and third steps under section 9 of the Act, namely whether the provision made for the plaintiff (namely, none) is inadequate for his proper maintenance, education and advancement in life, and if so what provision should be made. 31 The deceased died on 14 January 2003. His last will was made on 8 May 2002. He appointed two of his nephews as executors and trustees, and gave his entire estate to those nephews and a niece, as tenants in common in equal shares. 32 The estate consisted of the house in which the deceased had lived, plus various financial investments. Those financial investments have now been realised, so that the estate consists of the house (valued at $305,000), and money in the St George Bank of a little over $162,000 making a total of $467,000. The net estate, after payment of expenses and allowance for the executors' costs of these proceedings, is a little over $446,000. 33 Two of the beneficiaries have put on evidence of their financial circumstances. They have also given some evidence of their relationship with the deceased. Mr David Bennett says that up to approximately December of 1977, he regularly visited the deceased at his home on weekdays and saw him on most weekends. This was at a time when he was up to eighteen years old. He began university the following year and saw less of the deceased, tending to see more of him on weekends. He visited the gymnasium with the deceased from time to time. He gives evidence of not having seen the various matters, which I have earlier recounted, that the plaintiff gave evidence about concerning the nature of the relationship between the plaintiff and the deceased. I can accept that that is so. The fact that he did not see them is readily explained by his not having been there all the time, and therefore not having had the opportunity to see them. 34 Mr Michael Bennett gives evidence that until he was about eighteen he saw a lot of the deceased, that the deceased attended sporting fixtures with him, and that in the years leading up to his death the deceased regularly played lawn bowls with him. Ms Sheady gives no evidence of having had any particular contact with the deceased. 35 Mr Michael Bennett gives evidence of his financial circumstances. Broadly, he and his wife have a mortgaged home and net assets of a little over $436,000. Ms Sheady and her husband also have a mortgaged home and net assets of a little over $250,000. 36 The deceased had no children of his own. 37 In all these circumstances, there are no strong competing claims to that of the plaintiff. The claim of the plaintiff needs to be assessed however, bearing in mind that he is a stepson who came on the scene at a comparatively late stage of his own development, when he was sixteen, and that, although there was frequent contact between himself and his stepfather, it does not appear to have had the degree of closeness and dependence that is often the case between father and son. There is evidence, however, that the deceased went to social functions connected with his wife's family on a regular occasion, in which the plaintiff took part. 38 There is one other factor which I should mention at this stage. The plaintiff has a medical problem, arising from the motorcycle accident in March of 1975, which I earlier mentioned. Following that accident, his left kneecap was removed. As well, there is a history, on his father's side, of knee degeneration. The plaintiff, in the years after his motorcycle accident, had a history of some aching and swelling, not in the left knee but in the right knee. He had arthroscopies in 1993, which confirmed that he had degenerative changes in both knees. He had arthroscopies once again in September 2003, which revealed more degenerative changes in the knees. It is likely that he will eventually need knee replacements, although the evidence is silent about how long it might be before that is needed, or what would be involved either in direct costs or needing to take time off work. 39 The plaintiff's financial situation is not good. He is employed as a technician by Australia Post. In the last financial year he had a taxable income of a little over $70,000, on which he paid a tax and Medicare levy of nearly $21,000. This gives him a net income after tax of a little over $49,000, or $948 per week. In evidence today, he estimated his income at about $1,000 a week. However, he spends it all. 40 The plaintiff has an unusual arrangement concerning housing. In about September 2002 he and a friend purchased a house together. They made an arrangement between themselves that they would beneficially own it in equal proportions. The friend does not live there, but permits the plaintiff to live there. A loan has been taken out to acquire the house, which is an interest only loan. The plaintiff and his friend have an arrangement that the plaintiff pays six sevenths of the loan repayments, and the friend pays one seventh. This inequality of payments has been agreed upon as a way of the plaintiff, in substance, paying for his occupation of the house. The plaintiff and his friend share rates, insurance and repairs equally. The friend's desire is that the property be sold when the friend reaches retirement age, which the friend hopes will happen in about five years time. They have an arrangement between them that if that happens any net proceeds will be divided equally. 41 The plaintiff's assets at the present time consist of a half interest in that house, valued at $150,000, a motorcar, and a small amount of money in the bank. His total assets are less than $155,000. His liabilities are $120,000 for his share of the mortgage on the house, legal fees which are presently owing in relation to some Family Law proceedings concerning the place of residence of his son Jessie in the sum of $1,250.00, a debt to a mortgage insurer (arising from an earlier mortgage) of $13,000, and a credit card debt of a little over $10,000. Thus, his net assets are around $10,000. 42 The plaintiff's son Jessie is now living with him. Jessie is sixteen. He would like to go to university. The expenses which the plaintiff has are ones which include expenses associated with having Jessie live with him. 43 The plaintiff's counsel submits that the needs which are established by the plaintiff are needs connected with his housing, and connected with the fact that he has no financial buffer against the exigencies of life. 44 If the plaintiff were to pay out his share of the mortgage, this would require $120,000. It would result in the plaintiff not needing to pay as much as he presently pays in mortgage repayments. Presently, his mortgage repayments are $260 per week. That amount is, in accordance with his evidence, six sevenths of the total mortgage outgoings. Thus the total mortgage outgoings are a little over $300 per week. If the plaintiff were to pay off his share of the mortgage, this would result in him having a saving of the order of $150 per week, or $7,800 per annum, in after tax income. Even if that were to be saved, it would not provide enough money to enable him to buy out his friend's share in the equity of the house, if the present plan of the friend retiring in about five years were to be carried through. However, the plaintiff is still not fifty, and is well able to continue working, even though he will at some stage encounter difficulties with his knees. 45 In deciding what is the appropriate provision for the plaintiff, the statutory test is what amount the Court finds is needed for the proper maintenance, education or advancement in life of the eligible person. A testamentary disposition is to be interfered with by the Court only to the extent that it is necessary to make provision for the proper maintenance, education or advancement in life of the applicant. 46 In my view, there would be such appropriate provision for the plaintiff if he were to receive an amount sufficient to pay off his mortgage in the sum of $120,000, plus a further $20,000 to enable him to pay off his credit card debt, and have a small amount for exigencies of life. 47 I order that the plaintiff receive a legacy from the estate of the late Keith Thomas McCloy deceased in the sum of $140,000. I order that the costs of the plaintiff and of the defendants be paid from the estate. **********