New South Wales Supreme Court CITATION : Seward v Public Trustee & Anor [2010] NSWSC 396 HEARING DATE(S) : 29/04/2010 JUDGMENT DATE : 26 May 2010 JURISDICTION : Equity Division JUDGMENT OF : Macready AsJ at 1 DECISION : I dismiss the claim with costs CATCHWORDS : Family Provision. Application by daughter of first marriage. Small estate passes by survivorship to second husband who was with deceased for 37 years. Application dismissed. Consideration of husband's conduct in contrast to a long marriage. PARTIES : Kerrie Lorraine Seward v The Public Trustee and Eric Gordon Chapman FILE NUMBER(S) : SC 2009/289506 COUNSEL : Mr P Barham for plaintiff Mr L Ellison SC for defendant SOLICITORS : G & D Lawyers for plaintiff Hilton King Lawyers for defendant - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Associate Justice Macready Wednesday 26 May 2010 2009/289506 Kerrie Seward v Public Trustee and Eric Gordon Chapman (Estate of Peggy May Seward) JUDGMENT 1 HIS HONOUR: This is an application under the Family Provision Act 1982 ('the Act') in respect of the estate of the late Peggy May Chapman (nee Seward) who died on 26 June 2008 aged in her mid eighties. There is some doubt as to whether she was 83 or 87 years old at the date of her death. She was survived by her husband, Eric Gordon Chapman, the second defendant and her daughter, Kerrie Lorraine Seward, the plaintiff. Her first husband, Albert Wallace Seward, from whom she was divorced in about 1975, died in January 2003. 2 By her Will made with the Public Trustee on 14 August 1978, the deceased left the whole of her estate to the second defendant with a substantial provision in favour of her daughter, Kerrie. Although the deceased and the second defendant had cohabited since about 1975 they married on 18 August 1990 and her Will which was not made in contemplation of marriage was revoked. Consequently, the deceased died intestate. A grant of Letters of Administration for the purpose of the present application has been made. Estate of the deceased 3 At her death the deceased's estate was $15,091.43. This was mainly cash, some shares and an interest in an estate. The deceased had liabilities totalling $4,546.01. 4 The estate has been collected and the IAG shares have been transferred to the second defendant. The debts in the estate have been paid as well as the funeral expenses and the solicitors currently hold $3,106.07 after payment of some of their costs of these proceedings. 5 The plaintiff's costs up to and including the hearing total $31,404.16. These costs are incurred on a contingency basis and accordingly if the plaintiff's application fails she will only have to pay the solicitor's disbursements of $4,150.41. 6 The second defendant's legal fees up to 9 November 2009 in total was $10,132 and they have been paid out of the estate. The second defendant has incurred further legal fees amounting to $16,000 in the proceedings which have not been paid. 7 The deceased, at her death, was joint tenant with the second defendant of a property at Heaslip Street, Coniston. After the date of death the property was transferred into the name of the second defendant and has been sold for $350,000. The second defendant has purchased residential premises at Caldwell Street, Balgownie using the proceeds of sale for $288,000. History 8 The deceased was born in June 1921 or 1925 depending on which document one accepts. In the context of this case it makes no difference. Her second husband, the second defendant, was born in May 1935 and he was 10 or 14 years younger than the deceased. 9 The deceased married Albert Seward in 1944 and in April 1949 a daughter, Kerrie Seward, was born. 10 In September 1969 when Kerrie married Michael Dennis Wright she left home. 11 In 1973 the deceased separated from Albert Seward and they were divorced in 1975. The deceased met the second defendant some time earlier and in 1975 she commenced living with him at a rented premises in Thirroul. The second defendant was employed as a wharf labourer and the deceased was on an invalid pension. 12 In 1977 the deceased and the second defendant bought a property at Monthon Street, Thirroul for $29,500. The mortgage was $23,594. There is a dispute about who paid the balance of the purchase price to which I will return later. 13 In July 1979 the Thirroul property was sold for $37,500. The deceased and the second defendant bought as joint tenants a residential property at Coniston for $39,000. The deceased and the second defendant owned the property at the date of the deceased's death. 14 Although there is a dispute as to the contributions to the purchase of the property at Thirroul, the second defendant concedes that he and the deceased each paid for half of the furniture. 15 In 1979 the second defendant ceased working because of his medical problems. According to him he took a "handshake" and he used the $22,005 he received to pay off the mortgage on the Coniston property. 16 The plaintiff and her husband had moved to the United States of America in 1974. She and her family returned to Australia in 1981 with her daughter Rebekah Wright born 1974. Her son Jacob Wright was born 1982. She divorced Michael Wright in 1983. 17 On 18 August 1990 the deceased and the second defendant were married at their home at Coniston. 18 From 1999 the plaintiff says there was a change in the deceased and she was unable to have as much contact with her mother as she had had previously. This was said to be as a result of the second defendant's attitude towards her. 19 On Mother's Day 2000 when the plaintiff arrived to take her mother to lunch her mother refused to go with her. According to the plaintiff she saw her mother come out of the house with a black eye and bruises to her face. Her mother refused to tell her what had happened. 20 In March 2003 the deceased had a fall at her home and the plaintiff's daughter called an ambulance. The deceased was admitted to Wollongong Hospital, where she remained until the end of April when she returned home. According to the plaintiff her attempts to contact her mother were rebuffed by the second defendant. A further contentious visit occurred on Christmas Day 2006 as a result of which an aged care assessment process was put in place. It was subsequently cancelled by the second defendant. 21 On Mother Day in 2007 as a result of a telephone conversation between the plaintiff and the second defendant, the plaintiff and her daughter came to the Coniston premises to find the deceased in an extreme situation. The deceased was wearing the same dress she had worn on Christmas Day, she had no underwear, she had matted hair and she was lying on a black soiled mattress. Her skin had been burnt by bleach and her faeces were in a pot that was covered in mould. There was stale food in the room, mould in coffee cups and a dead rat. The deceased was in a frightened state and barely able to communicate. She also suffered from bedsores and she had a black eye. Her feet appeared to be affected by gangrene. The police were called and she was removed and admitted to Wollongong Hospital. The police took out an apprehended violence order against the second defendant in favour of the deceased. 22 According to the second defendant the deceased had not showered since she came home from the fall in 2003 although he claimed he had bathed her in the bed. 23 On 24 May 2007 Wollongong Local Court granted an apprehended violence order. 24 In 18 July 2007 the plaintiff made an application to the Guardianship Tribunal. On 30 July 2007 the plaintiff was appointed the deceased's financial manager. 25 On 26 June 2008 the deceased died. The funeral took place a week later. The plaintiff did not inform the second defendant of her mother's death and he did not attend the funeral. 26 On 27 February 2009 the second defendant sold the Coniston home for $350,000 and used the proceeds to purchase a house at Crawley Street, Bellambi for $288,000. 27 On 25 June 2009 the plaintiff filed a Summons seeking an order under the Succession Act 2006, which does not apply, to the estate of the deceased. 28 On 26 December 2009 the 18-month limitation period under the Family Provision Act expired. At the hearing before me on 30 April 2010 the plaintiff sought an amendment to the Summons to allow an application under the Family Provision Act. Extension of time 29 To allow the proceedings to be properly based the amendment has to be considered. I have heard argument as to whether the amendment should be granted under s 64 or s 65 of the Civil Procedure Act 2005 30 Sections 64 and 65 are as follows: 64 Amendment of documents generally (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to s 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to s 65, taken to be the date on which the amendment is made. (4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party. (5) This section does not apply to the amendment of a judgment, order or certificate. 65 Amendment of originating process after expiry of limitation period (1) This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings. (2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64 (1) (b), amend the originating process so as: (a) to enable the plaintiff to maintain the proceedings in a capacity in which he or she has, since the proceedings were commenced, become entitled to bring and maintain the proceedings, or (b) to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court's opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, or (c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court's opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process. (3) Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced. (4) This section does not limit the powers of the court under section 64. (5) This section has effect despite anything to the contrary in the Limitation Act 1969 (6) In this section, "originating process", in relation to any proceedings, includes any pleading subsequently filed in the proceedings. " 31 It seems clear that the new cause of action under the Act falls within the provision of s 65(2)(c). Accordingly, I determine that the amendment can be made pursuant to that section to enable the amendment to take effect from the date upon which the proceedings were commenced. No application was made to the Court under s 65(3) for some other order. Accordingly the proceedings are not out of time. Eligibility 32 The plaintiff is a daughter of the deceased and she is an eligible person. In applications under the Act the High Court in Singer v Berghouse (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. 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 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." Situation of Kerrie Wright 33 The plaintiff Kerrie Wright is aged 61 and lives on her own. She pays $150 a week rent for a small two bedroom unit and receives Austudy payments. She owns a 1999 Holden Barina worth approximately $4,000 and the usual items of household furniture and a small amount of superannuation. She works about 8 hours a week for a promotion company and some weeks there is no work. 34 The plaintiff suffers from a number of medical conditions the most serious of which is diabetes. She has back pain, high cholesterol and glaucoma of both eyes. She takes medication for high cholesterol, paxtine for stress, aspirin to thin her blood and eye drops to prevent blindness and gopten for blood pressure. 35 The plaintiff had a good relationship with the deceased and she kept in touch with her mother over the years. She lived overseas for a number of years and she resumed contact with her mother on her return to Australia in 1981. The history of the relationship demonstrates that the plaintiff continued her relationship with her mother notwithstanding the second defendant's attempts to end contact with her. This was probably done because of the terrible condition to which the deceased descended during the last years of her life while she was in the second defendant's care. 36 The plaintiff was guardian for the deceased during the last year of her life when she had power to manage her mother's finances. She operated an account for her mother and opened another account to which she transferred some of her mother's funds. Whether or not this was done for some nefarious reason is not clear on the evidence but what is clear is that in July 2007 when she was made financial manager the deceased had the sum of approximately $26,000 in her account. The deceased received pension payments that would have substantially covered her nursing home accommodation where she was living from May 2007. 37 Notwithstanding the obligation on the plaintiff to maintain proper accounts the plaintiff had no records to produce to the court to show what she has done with $25,000 of the deceased's money over that year. She has no documents to support her claim that she used the funds for the deceased's benefit. I am not satisfied, given the absence of any documentation, that she spent $25,000 which would equate to $500 a week for her mother's benefit when she was cared for and maintained in nursing home accommodation. I accept that there would be the need to purchase clothing from time to time. I am satisfied that a substantial portion of the $25,000 has been used by the plaintiff for her own benefit. The plaintiff did not contribute to the estate of the deceased. Situation of the second defendant 38 The second defendant is 75 years of age, single and lives in his house at Bellambi. His house is worth about $288,000. He has a car worth $9,000, shares worth $3,150 and a Commonwealth Bank account of $19,328.56. He has furniture and effects with a value of $1,000. He receives an age pension of $671.90 a fortnight and his weekly expenses total $340 per week. 39 The second defendant suffers from arthritis in the shoulders, knees and back which is obvious from his gait. He says he suffers from pain from his arthritis. He has diabetes and he is being investigated for an enlarged liver. He has difficulty reading and writing as he did not learn to read or write as a child. 40 The deceased's relationship with the second defendant was the main issue in the hearing before me. It is perfectly plain on the evidence that between the deceased's fall in 2003 and when she was removed from the second defendant's care in 2007 that she lived at home in appalling conditions. She was effectively confined to bed and she had little or no contact with anyone other than her daughter on the occasions when the second defendant would allow Kerrie to visit her mother. It is also clear that during this period the deceased was suffering from dementia and was a difficult person to look after. The sad thing about this case is that the second defendant appears either not to have cared about the deceased's condition or he did not have the intellect or ability to have her properly treated and looked after during this period. 41 It is to be remembered that the deceased was much older than the second defendant who was uneducated and illiterate. 42 The estate which is now the home that the second defendant owns at Bellami was substantially contributed to by him. Documentary evidence is not available as to who paid the only cash contribution to the purchase of the house at Thirroul in 1977. At that stage the deceased was receiving an invalid pension and she was divorced from her husband. According to the second defendant he was not aware of any funds of the deceased and the likelihood is that it was the second defendant who was working at the time who had the money to make the payment of the difference. The second defendant says he was earning $25,000 a year in 1975 which is not far off the purchase price of the house they bought. In the circumstances it seems to me that the contribution to the estate was from the second defendant and I accept his evidence that he paid off the mortgage when he retired in 1979. The evidence does not disclose any other source of funds for this amount. In these circumstances it seems clear that the financial contributions to the property of the deceased were made by the second defendant. 43 The plaintiff seeks an order that she be paid three-quarters of the one half share of the estate which would pass by survivorship to the second defendant. Alternatively, if the second defendant was granted a Crisp order in respect of the property which he now owns absolutely, that she should receive some share of the property on his death. 44 There is no doubt that the plaintiff is in a difficult situation. She is 61 years of age and approaching the end of her working life and she only receives a modest income from her irregular employment. She owes Centrelink $14,000 and she has a Higher Education debt of $4,690. She is also behind with payment of her rent. If any order were made in her favour she would be obliged to repay these debts and to that extent there would only be minimal assistance or benefit to her personally. Apart from these pressing debts she plainly needs some funds to assist her with accommodation costs and daily expenses. These needs were not quantified in the evidence. 45 The problem is that this is a case where the deceased and the second defendant lived together for 32 years from 1975 until 2007. Of that time they were a married couple for 17 years. The difficulties and the unhappiness in the marriage only occurred in the last 5 years of the deceased's life. There is no evidence of problems in the earlier period when they were living together. 46 In Paton v The Public Trustee (Supreme Court of NSW, Young J, 8 December 1988, unreported) said in the context of a claimant spouse the following: "The next matter that must be considered is the fact that the plaintiffs marriage was not a happy one. Counsel for the defendant put to me what Powell, J said in Elliott v Elliott - 18 May, 1984, unreported which was affirmed by the Court of Appeal on 24 April, 1986 unreported and which I applied in Court v Hunt - 29 October, 1987, unreported. Powell, J said, "Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband, and assisted him to build up and to maintain his estate, the duty which a deceased owes to his widow can be no less than, to the extent to which his assets permit him to achieve that result; first, to ensure that his widow be secure in her home for the rest of her life, and that if, either, the need arises, or, the whim strikes her, she have the capacity to change her home; second, that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry; and, third, that she have available to her a fund which she might resort in order to provide herself with such modest luxuries as she might choose, and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring." Counsel then put that because his Honour stressed the fact that his words were directed to a situation where there was an harmonious marriage where the widow had loyally supported her husband, where one found there was not a happy marriage that the parties had virtually lived separate lives, some lesser considerations prevailed. The circumstances of the relationship could not possibly be considered to amount to conduct disentitling the plaintiff of an order under the Act. However, it is necessary under s9(3)(b) and s9(3)(c) to take into account the character and conduct of the eligible person before and after the death of the deceased and the circumstances existing before and after such death. Accordingly, one does take into account the fact that the relationship was far from harmonious. However, it is also to be taken into account that the relationship was one which enured for 40 years and that the testator recognized the existence of the marriage right up to the end and no matter where else he may have sought consolation, he provided housekeeping for the plaintiff and accepted her ministrations him as wife . Whilst if there was a very large estate it may be that there would be a different result in an application under the Act between a happy marriage and an unhappy marriage, there is a basic minimum which the community regards as necessary for testators to provide for their spouses where their marriage has been of medium to long duration. Those basic necessities include a secure roof over the remaining spouse's head and at least a small capital sum. In my view the present estate is to be regarded as a small to modest estate for the purposes of the Act so that the far from satisfactory relationship does not have much bearing on the result." 47 In this case the second defendant is also in a difficult situation at the end of his life. He lives on a pension and has medical problems. He has minimal assets apart from the house he owns. This is a case where the deceased did not contribute in a financial sense to the assets in the estate and she did not work. According to the plaintiff the second defendant ceased work around 1983 and according to the second defendant he ceased work at the end of 1979. 48 During the hearing counsel for the second defendant asked the court to dismiss the plaintiff's application. However, in cross-examination Mr Chapman said he was willing to enter into some arrangement to give the plaintiff a half share of his estate upon his death. When considering this matter it is important to note that that the second defendant has a life expectancy of 11 years. Until the second defendant dies any such arrangement can do nothing to assist the plaintiff. It is clear from the plaintiff's evidence that her needs are immediate and any such arrangement would not be of assistance to her. 49 Notwithstanding the dreadful time experienced by the deceased in the last four years of her life, as a result of the ignorance or neglect by the second defendant, it seems to me that he should be entitled to retain his home. The estate is too small and, in my view, the claim should not have been brought. In these circumstances I dismiss the claim with costs ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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