New South Wales Supreme Court CITATION : Fitzgerald v Fitzgerald [2009] NSWSC 884 HEARING DATE(S) : 27/082009 JUDGMENT DATE : 30 September 2009 JURISDICTION : Equity Division JUDGMENT OF : Macready AsJ at 1 DECISION : Paragraph 40 CATCHWORDS : Family Provison. Application under Family Provision Act 1982 by a son who was left out of the will. Order for small legacy. Costs of the plaintiff capped at amount of legacy. No matter of principle. PARTIES : Barry Fitzgerald v Graham Fitzgerald FILE NUMBER(S) : SC 3407/08 COUNSEL : Mr JJ Ryan for plaintiff Mr R Bell for defendant SOLICITORS : Mark Brown & Associates Stephen Marks Solicitors - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSOCIATE JUSTICE MACREADY Wednesday 30 September 2009 3407 of 2008 Barry Fitzgerald v Graham Fitzgerald JUDGMENT 1 HIS HONOUR: This is an application under the Family Provision Act 1982 in respect of the estate of the late Brenda Alison Aylett who died on 1 January 2007. Three sons and a daughter survived her. One son is the plaintiff and another son is the defendant. Deceased's last will 2 The deceased made her last will on 17 March 2000 under which she appointed Graham Fitzgerald the defendant as her executor. After making provision for her husband who did not survive her, in clause 5(a) she gave her home at Kallaroo Road, San Remo in equal shares to her son, the defendant Graham, and her daughter, Susanne. 3 Under clause 5(b) she gave all monies standing to her credit with any bank to her sons John and Barry. Barry is the plaintiff in these proceedings. 4 Under clause 7 she gave the residue of her estate to Graham and Susanne. Assets in the estate 5 The estate consists of the following: Home at Kallaroo Road, San Remo $215,000 Cash $21,329 $236,324 6 The costs incurred in the hearing are as follows: Plaintiff's costs $31,167 Defendant's costs $16,316 Total $47,483 7 After allowing for selling costs of some $10,000 if the home at San Remo has to be sold the net estate would be $178,841. 8 The property has been distributed to the defendant and his sister, Susanne Gay, as beneficiaries. In these circumstances I have given leave to the plaintiff to include a claim in the summons to seek a declaration that the property is notional estate in the event that it is appropriate that such an order is made. Family history 9 The deceased was born on 24 January 1931. She had four children. John Fitzgerald born December 1952, Barry Fitzgerald born February 1955, Suzanne born March 1957 and Graham Fitzgerald born February 1959. 10 The deceased's first husband died in 1972 and she remarried Lionel Aylett in 1985. As I have mentioned the deceased made her will on 17 March 2000. 11 In 2003 the defendant, Graham, moved into the deceased's home at San Remo after he had a stroke and was not capable of looking after himself. On 15 May 2005 Lionel Aylett died. 12 In February 2006 the plaintiff, Barry, who had previously worked as a salesman commenced a waste and recycling business, Phantom Waste and Recycling Pty Ltd. In that year the defendant Graham, was diagnosed with end stage liver disease. 13 The deceased died on 1 January 2007 and probate of her will was granted on 8 October 2007. 14 The plaintiff employed his son, Keith, in the business. In 2007 while he was unloading the truck, Keith tipped his truck over and as a result the truck was written off. Although the company received an insurance payout, the accident effectively finished the business operation. The plaintiff sold the business to his son Keith for $22,000. 15 On 6 February 2008 the plaintiff was arrested on criminal charges relating to drugs and remanded in custody. 16 In May 2008 the plaintiff sold another part of the business to Wanless Waste Corp for $33,000. 17 On 12 May 2008 the deceased's San Remo home was transferred to the defendant and Suzanne as beneficiaries. 18 In March 2009 the plaintiff commenced receiving unemployment benefits. In April 2009 the plaintiff's home was sold and the shortfall between the sale price and the mortgage was $30,000 which will probably be covered by mortgage insurance. 19 The plaintiff's company, Dumpstra Pty Ltd was wound up in June 2009. 20 These proceedings were commenced within time on 24 June 2008. Eligibility 21 The plaintiff is an eligible person being a son of the deceased. The defendant, Graham, brought a cross claim seeking relief under the Act. The defendant informed the Court that he did not wish to proceed with the cross claim against his sister, Suzanne, and that he only maintained the cross claim in answer to the claim by his brother, Barry. The cash in the estate will be consumed by the defendant's costs in the proceedings and accordingly, the plaintiff's entitlement to the estate is only a sum of $2,506. In effect he has received little from the estate of the deceased. 22 In applications under the Family Provision Act the High Court in Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201 has set out the two-stage approach that a Court must take. At page 209 it said the following: "The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited [1938] AC 463 . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or 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. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder (1951) 82 CLR 645 where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors." Plaintiff's situation in life 23 The plaintiff is 54 years of age with no dependents. He is a single person having divorced his wife some years ago. 24 The plaintiff has furniture, clothing and personal effects of nominal value and a motor vehicle worth $500. He has a nominal amount in the bank. He owes his children $21,000 and he has credit card debts totalling $44,575. His company, Phantom Waste and Recycling Pty Ltd has debts of approximately $200,000 with no prospect of repaying them. 25 The plaintiff has superannuation of $54,657. 26 The plaintiff is in receipt of unemployment benefits and has been trying to find a job as a salesman. Although he has had extensive experience in sales he is finding it difficult given his age. Until he gets back on his feet he is living with his son, Craig. 27 The plaintiff had a relationship with the deceased until her death although the extent of the relationship is disputed. He claims he spent considerable time assisting with the construction of his mother's house which was mainly done by his elder brother, John. According to the plaintiff he attended on many occasions to help although the defendant alleges he attended the property on one occasion only. There is no other evidence available to assist the resolution of his dispute. It seems that when the deceased moved to the Central Coast she would see the plaintiff several times a year and they kept telephone contact mainly initiated by the deceased on a fortnightly basis. Defendant's situation in life 28 The defendant is 50 years of age, single with no dependents. He only asset is a car worth $4,000 and some personal effects. He receives a disability support pension of $552 a fortnight and has no other income. His current entitlements to superannuation are $109. Any monies he had were used to pay for a vehicle to take the deceased's second husband to medical appointments. 29 As I have mentioned the defendant suffered a stroke in 2003 a result of which he has lost most of the use his hands and he continues to have headaches. He is plainly affected by the stroke and there is no prospect of him being able to do anything other than live with some assistance until he dies as a result of his end stage liver disease. 30 According to the life tables his life expectancy is about 32 years but there is no medical evidence to suggest that how long he will live having regard to his illness. Given the nature of his illness it is not likely that he will survive for a substantial period of time. Discussion 31 In the chronology I mentioned that the plaintiff was arrested in February 2008. He was in custody until 16 April 2008 when he was released on bail which was posted by his children. At the time of the hearing on 27 August before me it transpired in cross-examination that the trial for his charges was set to commence on a defended basis on Monday 31 August 2009. In the circumstances I decided to postpone the matter to allow the result of the trial to become available. The reason for this was, of course, that the outcome may well have a bearing on the question of whether or not the plaintiff has been left without adequate and proper provision for his maintenance, education and advancement in life. 32 It now appears that the plaintiff pleaded guilty to a charge of supplying a prohibited drug, namely, methylamphetamine in an amount of 221.80 grams. He will be sentenced on 6 November 2009. Given that it is some time away I should proceed to give judgment. I will assume that he has some prospect of a gaol term. 33 At the hearing before me the only matter he advanced in this respect was that he needed a sum of money to re-establish him in life presumably to obtain rented accommodation and to enable him to pay something towards his debts which are set out above. 34 John Fitzgerald and his sister, Susanne Gay Spinney, have given no evidence of their circumstances or their relationship with the deceased. Some information on this aspect is available but in any event they have no entitlement. It is plain that John Fitzgerald has a minimal entitlement to cash under the will of the deceased and no entitlement if the plaintiff is successful. Susanne will take an interest in the house at San Remo. 35 The plaintiff gave evidence that Susanne is married and works fulltime as a process worker. Her husband also works fulltime. Apparently they own their home where they have lived for three years which is subject to a mortgage. Their children are self-supporting and are in good health. 36 Any order in favour of the plaintiff will lead to the house being sold and this will deprive the defendant of his present home. However, if there is a sale the defendant will have funds to rent some other residence. Unfortunately, once the proceedings commenced this result was almost inevitable. I am not satisfied that the plaintiff started the proceedings because of some improper purpose and his present circumstances show that he has a need for some small capital sum for rental accommodation. This need will also be with him when he leaves gaol if he is sentenced to a goal term. 37 I am satisfied, having regard to all the circumstances, that the plaintiff has been left without adequate and proper provision for his maintenance, education and advancement in life. 38 I will now consider the question of notional estate. 27 Designation of property as notional estate—matters to be considered (1) On an application in relation to a deceased person, the Court shall not make an order designating property as notional estate of the deceased person unless it has considered: (a) the importance of not interfering with reasonable expectations in relation to property, (b) the substantial justice and merits involved in making or refusing to make the order, and (c) any other matter which it considers relevant in the circumstances. 39 As to the question of such an order and given the lack of evidence, I think that a modest legacy for the plaintiff is appropriate. 40 The orders I make are as follows: 1. I designate as notional estate the property formerly owned by the deceased in Kallaroo Road, San Remo. 2. I order that the plaintiff receive a legacy out of the estate of the deceased in the sum of $25,000. 3. I order that the plaintiff's costs limited to the sum of $25,000 and the defendant's costs on an indemnity basis be paid or retained out of the estate of the deceased. 4. The legacy is to carry interest at the rate provided for by the Probate and Administration Act 1898 if not paid within three months from this date. ********** 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.