New South Wales Supreme Court CITATION : Stone v Stone [2008] NSWSC 1134 HEARING DATE(S) : 5 June 2008 JUDGMENT DATE : 29 October 2008 JUDGMENT OF : McLaughlin AsJ 1. I order that, in addition to the benefit given to him under the will and codicil of the late Noel Bertram Stone ("the Deceased"), the Plaintiff receive a further legacy in the sum of $60,000, such further legacy not to bear interest if paid on or before 29 December 2008, and if not so paid, to bear interest at the rates prescribed for unpaid legacies by the Probate and Administration Act 1898. DECISION : 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 - Plaintiff given legacy of $10,000 - financial and material circumstances of the Plaintiff - whether Plaintiff has been left without adequate provision for his proper maintenance - competing claim of the residuary beneficiary (only other child of the Deceased) - nature and extent of relationship between Plaintiff and Deceased. LEGISLATION CITED : Family Provision Act 1982 CASES CITED : Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 19 PARTIES : William John Stone (Plaintiff) Clifford Noel Stone (Defendant) FILE NUMBER(S) : SC 2650 of 2007 COUNSEL : Mr J. Wilson SC (Plaintiff) Mr G. McNally SC (Defendant) SOLICITORS : Slattery Thompson (Plaintiff) Colin Daley Quinn (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSOCIATE JUSTICE McLAUGHLIN Wednesday, 29 October 2008 2650 of 2007 WILLIAM JOHN STONE -v- CLIFFORD NOEL STONE JUDGMENT 1 HIS HONOUR: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 10 May 2007, William John Stone claims an order for provision for his maintenance and advancement in life out of the estate of his late father, Noel Bertram Stone (to whom I shall refer as "the Deceased"). 3 The Deceased died on 5 August 2006. He left a will dated 25 January 1989 and a codicil thereto dated 3 May 2006, probate of which documents was on 11 January 2007 granted to Clifford Noel Stone, the executor named in such will (who is the Defendant to the present proceedings). 4 The Deceased, who was a widower at the time of his death, was survived by his two adult sons, being the Plaintiff and the Defendant. 5 By his will, the Deceased gave to the Defendant the entirety of his estate, charged with the payment of $10,000 to each of the children of the Plaintiff, being Lisa Marie Stone, Penelope Anne Stone and Rodney Stone. By a codicil dated 3 May 2006, the Deceased gave a legacy of $10,000 to the Plaintiff. 6 The inventory of property discloses that the only significant asset in the estate of the Deceased was a house property situate at and known as 9 Yoorami Road, Beverly Hills, to which an estimated value of $550,000 was attributed. The other assets disclosed in the inventory of property were an amount of $1,693, held in an account with the Commonwealth Bank, and an amount of $7,910 held in a deposit account with ING Direct. It is estimated on behalf of the Defendant that the net value of the estate is $550,000, such value representing the estimated value of the Beverly Hills property. That property has been transferred to the Defendant. 7 In calculating the value of the estate available for distribution the costs of the present proceedings must be taken into consideration, since the Plaintiff, if successful in his claim, will normally be entitled to receive an order that his costs be paid out of the estate, whilst the Defendant, irrespective of the outcome of the present proceedings, will normally be entitled to an order that his costs be paid out of the estate. It has been estimated on behalf of the Plaintiff that his costs will total about $39,000, whilst it has been estimated on behalf of the Defendant that his costs will total $32,000. Accordingly, it is appropriate, that the Court should proceed upon the basis that the value of the distributable estate will be about $479,000. 8 It is almost inevitable that the house property at Beverly Hills must be sold, if only to meet the administration expenses of the estate, and the costs of the present proceedings. (The costs associated with the application for probate and the administration expenses of the estate have already depleted more than half the moneys held in the bank account and the deposit account of the Deceased.) 9 The Plaintiff was born on 1 November 1946, and is presently aged 61. The Defendant was born on 3 November 1944, and is presently aged 63. 10 The Plaintiff has been married twice. In 1967 he married Wendy Elizabeth Brett. Three children were born of that marriage, being Lisa, Penelope and Rodney (those being the children of the Plaintiff who are referred to in the will of the Deceased). Lisa is presently aged 38, Penelope is aged 35 and Rodney is aged 34. The Plaintiff separated from his first wife in 1977 and they were divorced in 1984. 11 In 1981 the Plaintiff commenced living with Sybil Martha Wenderoth on the Gold Coast in Queensland (to which location the Plaintiff had removed in about 1978). The Plaintiff and Sybil Wenderoth married on 30 July 2002. Sybil had in 2001 become the carer of the Plaintiff, who some 20 years earlier, in about 1981, had suffered a disabling back injury. The Plaintiff and Mrs Sybil Stone reside together on a houseboat M. V. Harmony, which is moored on the Coomera River at Oxenford in Queensland. That houseboat is owned by Mrs Stone, and is said to be suffering from woodrot. 12 The Plaintiff's only assets are a 1987 Commodore motor vehicle (to which an estimated value of $1000 was attributed) and an amount of $6090 held in an account with the Bank of Queensland. 13 The Plaintiff's wife, Mrs Sybil Stone, owns the following assets: Houseboat, having an estimated value of $20,000 1987 Hi-ace van, having an estimated value of $2,000 Westpac bank account, having only a nominal credit. 14 The Plaintiff's only income is a disability pension of $439 a fortnight. His wife receives a carer's pension of $490 a fortnight. That is, the total income of the Plaintiff and his wife is in an amount of $929 a fortnight. 15 The Plaintiff owes his daughter Lisa the sum of $15,000. That indebtedness arose from a recent borrowing which the Plaintiff made from Lisa, which he used partly to reduce his wife's credit card debt, and partly to pay travel expenses. Of that borrowing the Plaintiff retains about $6000 (which I understand to be the sum presently standing in his bank account). Mrs Sybil Stone owes an amount of almost $14,000 on a Westpac credit card. It is not entirely clear how the legacy of $10,000, which was paid to the Plaintiff in January 2007, was expended. 16 The Plaintiff lived at home with his parents during his formative years. He left school at the age of 15, and was employed, first as a labourer, and subsequently as a mechanic. In 1968 the Plaintiff suffered at work a serious injury to his left arm. He later returned to work as a storeman, and subsequently worked as a contract courier. In about 1978 or 1979, after separating from his first wife, the Plaintiff went to Queensland, where he worked until in 1981 he suffered injuries to his back and to his left wrist and right shoulder. He has not worked since that time. The back injury resulted in the Plaintiff being paralysed for about seven months. Since those injuries in 1981 the Plaintiff has been in receipt of either sickness benefits or a disability pension. 17 Evidence was given concerning the nature and extent of the Plaintiff's contact with his parents (until the death of his mother, Mrs Sylvia Stone, in 1980, and thereafter, with the Deceased). According to the Plaintiff, while residing in Queensland he maintained telephonic contact with the Deceased, and on occasion he and his wife visited the Deceased in Sydney. 18 The Defendant, who is presently aged 63, is married with a grown up family. He and his wife resided in rented accommodation throughout their married life until shortly before the death of the Deceased, when, at the request of the Deceased, they moved into residence in the Deceased's home in Beverly Hills. 19 The Defendant is in full-time employment, earning a net amount of $885 a week. His wife is in part-time employment for 40 weeks a year, earning a net amount of $322 a week. That is, the Defendant and his wife for most of the year have a total net income of $1,207 a week. The Defendant has what I gather to be an employment-related superannuation entitlement of about $101,000, and his wife has a superannuation entitlement of about $9500. In addition, the Defendant has what was described as "AMP Personal Superannuation" in an amount of almost $45,000, and various life insurance and endowment plan entitlements, totalling almost $79,000. The Plaintiff owns AMP shares having a value of about $12,200, and two motor vehicles (having a total estimated value of $4000). In his St George Bank account the Defendant has a credit balance of about $10,000. The Defendant and his wife have various liabilities (apart from the AMP loan), presently totalling about $4,400. In addition, they pay annual amounts (in respect to van site rental, rates, insurances and AMP policies), totalling about $7800.) 20 The Defendant said that he was planning to retire at the age of 65 in about eighteen months time, as he was experiencing difficulty in working, on account of his current health problems (which include arthritis in the shoulders, arms and hands, as well as angina and a heart condition; he suffered a small heart attack last year). 21 The Defendant gave evidence that he had been informed by the St George Bank that in his present financial circumstances, with the expectation of retiring at 65, he would be entitled to take a loan of $37,000, with monthly repayments of $2,201 over a period of eighteen months. The St George Bank also informed him that if he worked after the age of 65 for a further one and a half years, the amount which he could borrow could be increased to $70,000. However, it was not the intention of the Defendant that he would continue working after the age of 65 years. 22 There is no doubt that the Defendant was a loving and dutiful son to the Deceased and that there obtained a close relationship between them. The Deceased himself recognised the nature of that relationship by the terms of his will. 23 It was necessary for the Defendant to obtain a loan from AMP in the sum of $40,000 in order to make the payment of the legacies provided by the will and codicil of the Deceased. Those legacies were paid in January 2007. The Defendant is repaying the AMP loan at the rate of $1000 a month. The Beverly Hills house was transferred to the Defendant on 28 February 2007. The Defendant said that at the time when the legacies were paid and the house was transferred to him, he had no idea that the Plaintiff intended to make his present claim under the Family Provision Act. 24 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff. 25 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. 26 The Plaintiff, as a son of the Deceased, is an eligible person within paragraph (b) of the definition of that phrase contained within section 6 (1) of the Family Provision Act. As such, he has the standing to bring the present proceedings. It will be appreciated that the Defendant is also an eligible person, within the same paragraph of the foregoing definition. Despite the reference in paragraph 12 of the affidavit of executor sworn by the Defendant on 13 August 2007 to five grandchildren and one great grandchild of the Deceased, it would appear that the Plaintiff and the Defendant are the only eligible persons in relation to the Deceased. 27 In carrying out the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208 – 210 (the correctness of which test was affirmed by the High Court in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191) the Court must determine whether in consequence of the provisions of the will of a testator the applicant has been left without adequate provision for his proper maintenance. 28 The High Court in Singer v Berghouse (at 209–210) said that the determination of the first stage calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of 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. 29 In opposing the claim of the Plaintiff, the Defendant points to the fact that from the time when the Plaintiff removed to Queensland, his contact with the Deceased was neither close nor regular. 30 The Defendant also points to the fact that the assets of the estate are such that if any additional benefit is given to the Plaintiff, beyond the legacy of $10,000, it is inevitable that the house property at Beverly Hills must be sold, with the consequence that the Defendant and his wife will be deprived of their residence. 31 I am satisfied, that in the circumstances of the instant case, for the Plaintiff (subsisting on a disability pension and on his wife's carer's pension, residing on a houseboat, and having no significant assets and no savings, and with a liability of $15,000 owing to his daughter) a legacy of $10,000 was not adequate provision for his proper maintenance. However, that legacy should be taken into account when considering the amount of any additional provision which should be made in favour of the Plaintiff in order to meet his foregoing needs. 32 The problem in this case is the practical situation resulting from the fact that the only significant asset in the estate is the house property, in which the Defendant and his wife are presently residing. 33 It will be appreciated that an order for provision is not made as a reward for services or good conduct on the part of an applicant. Neither is such an order withheld as punishment for perceived bad conduct on the part of the applicant. 34 A very considerable quantity of evidence was presented by each party concerning the nature and extent of the contact between the Plaintiff and the Deceased, especially in the period of almost 30 years from the time when the Plaintiff removed to Queensland until the death of his father. 35 I am satisfied that the Plaintiff could have had greater contact with his father, if he had so wished. Nevertheless, that conclusion is not of itself determinative of the Plaintiff's claim. 36 I consider that, the Plaintiff has established an entitlement to receive from the estate of the Deceased, in addition to the $10,000 which he has already received, a further legacy in an amount which will enable him to repay his indebtedness to his daughter ($15,000), to discharge the indebtedness owed by his wife ($14,000), to effect some essential repairs and maintenance to the houseboat in which they reside (but not, as submitted on behalf of the Plaintiff, to acquire a replacement houseboat), in an amount of, say, $5000, and to provide a capital fund to meet unexpected contingencies and to enhance his very modest lifestyle, in an amount of $25,000. That is, in my conclusion, the Plaintiff has established an entitlement to receive from the estate of the Deceased, a legacy in an amount of about $60,000. 37 Unless the Defendant can raise that sum, and also the sum of $71,000 representing the totality of the costs of both parties of the proceedings, by, for example, resorting to his superannuation entitlement, then, it is inevitable that the house property must be sold. It has been submitted on behalf of the Defendant that that course would have the practical effect of dispossessing the Defendant and his wife of their residence. 38 In this regard, however, it should be appreciated that the Defendant and his family resided in rented accommodation for 30 years, until March 2006, when they moved into the Beverly Hills residence at the request of the Deceased. They had been living in that house property for a period of only about three months at the time when the Deceased died. It cannot be said, therefore, that the Beverly Hills property should be regarded as a long term residence of the Defendant. Indeed, to the present time, the Defendant has been living in that property for only about two and a half years. 39 It may be possible for the Defendant to raise the legacy to which I satisfied that the Plaintiff has established an entitlement, and also to raise the amount of the costs of the Plaintiff and the Defendant without resorting to the sale of the Beveley Hills property – for example, by resorting to his superannuation entitlement. However, if it becomes inevitable that the property must be sold in order to meet the foregoing legacy and the costs, then I do not consider that the competing claim of the Defendant, a claim grounded upon his asserted entitlement to remain in residence in the Beverly Hills property, is such as would deprive the Plaintiff from an order for provision along the foregoing lines, to which I consider he has otherwise established an entitlement. 40 In any event, it will be appreciated that the Defendant will be entitled to the balance of the proceeds of the sale of the house property after payment of the aforesaid legacy to the Plaintiff. Upon the assumption that the Beverley Hills property can be sold for $550,000, then, after payment of costs and commission associated with the sale of the property (say, $15,000), there would probably remain about $535,000. If from that sum there then be deducted a further legacy of $60,000 for the Plaintiff, and an amount of $71,000 in respect to the total costs of the present proceedings, there would remain an amount of about $404,000 to which the Defendant would be absolutely entitled. I do not consider that the competing claim of the Defendant (who, upon my calculations, will, in any event, receive from the estate of the Deceased an amount in the order of $404,000) is such as would reduce, let alone extinguish, a legacy in the amount of $60,000 to which I consider the Plaintiff has otherwise established an entitlement. (In making the foregoing calculations I have recognised that the legacies to the Plaintiff and his children have already been paid. I do not overlook, however, that it was necessary for the Defendant to raise a loan of $40,000 in order to make those payments.) 41 I make the following orders: 1. I order that, in addition to the benefit given to him under the will and codicil of the late Noel Bertram Stone ("the Deceased"), the Plaintiff receive a further legacy in the sum of $60,000, such further legacy not to bear interest if paid on or before 29 December 2008, and if not so paid, to bear interest at the rates prescribed for unpaid legacies by the 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. ********** 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. 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