O’Brien Estate; Scott v O’Brien [2010] NSWSC 866

New South Wales Supreme Court

CITATION : O'Brien Estate; Scott v O'Brien [2010] NSWSC 866

HEARING DATE(S) : 2 August 2010

JUDGMENT DATE : 2 August 2010

JURISDICTION : Equity Division Probate List

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 2 August 2010

DECISION : Legacy provided out of estate.

CATCHWORDS : EQUITY – SUCCESSION – Family provision – eligible person – whether testator failed to make adequate provision for the Plaintiff having regard to the Plaintiff's circumstances.

LEGISLATION CITED : Family Provision Act 1982 (NSW) – s 9(3)

CATEGORY : Principal judgment

PARTIES : Lynnette Christine Scott (Plaintiff) Phillip Bernard O'Brien (Defendant)

FILE NUMBER(S) : SC 2009/290796

COUNSEL : T.J. Morahan (Plaintiff) R.E. Quickenden (Defendant)

SOLICITORS : Brydens Compensation Lawyers (Plaintiff) Nash, Allen, Williams & Wotton (Defendant)

09/290796 O'Brien Estate: Scott v O'Brien

JUDGMENT – Ex tempore

2 August , 2010

1 The Plaintiff brings a claim under the Family Provision Act 1982 (NSW) for provision out of the estate of her father, who died in February 2009 aged 93 years, leaving a will dated 10 July 1993. The will makes no provision at all for the Plaintiff. Almost the whole of the estate is left to the Defendant, who is the deceased's son, and the Defendant's wife. The Defendant is the sole executor of the will. The deceased's wife had died in 1996. 2 The estate is very small. It comprises the deceased's home on the Central Coast valued at about $230,000 and some cash in the bank of about $12,000. Legal costs on both sides will total about $72,000. If the house, which forms the major asset of the deceased's estate, has to be sold, agent's commission and selling expenses will amount to some $10,000. If both sides get their legal costs out of the estate and the property has to be sold, the estate, net of costs, will be some $160,000. 3 There has been a long history of animosity between the Plaintiff and the Defendant, who are the deceased's only children. That animosity explains why there has been such an obviously heated litigious contest over such a small estate. The history and financial circumstances of the Plaintiff and of the Defendant may be described quite briefly. 4 The Plaintiff is now sixty years old. She has two adult children who are not dependent on her. She has been divorced twice. She now lives on her own. She does not enjoy good health. She has suffered from severe depression for some considerable time. That depression appears to have had its origins in part in a serious motor vehicle accident which the Plaintiff suffered in 1990. She presently takes antidepressants. She suffers from diabetes, high blood pressure and an under-active thyroid. She also has a heart condition and sees a specialist for treatment. 5 Her financial circumstances are extremely limited. She has only some $9,000, represented by the value of her motor vehicle and some furniture. The Plaintiff presently receives a disability support pension of about $800 a fortnight. Up until a short time ago, she had to provide accommodation for herself and had to pay rental. She now has housing provided by the State Housing Commission in Western Australia at a rental which enables her to put another hundred dollars out of her pension payment per week towards living expenses. In summary, the Plaintiff's income is about $390 a week and her outgoings are about $375 a week. She has no superannuation benefits. 6 The financial position of the Defendant is not clear from the evidence. The Defendant had been in regular employment until he suffered an accident which incapacitated him for some time. He received worker's compensation for that accident until his personal injury claim was compromised in 2002. He then received some $190,000 net out of the litigation. The Defendant and his wife owned their own home at Rosehill. They sold that house in 2004 for some $365,000, the net proceeds of sale being some $340,000. Between 2002, when the Defendant received some $190,000 out of the proceeds of his personal injury litigation, and 2004 when he and his wife sold their home, the Defendant spent some $130,000 out of the damages lump sum payment on items which could not be described as necessities, namely, a boat and a caravan and a number of motor vehicles. Of course, I do not make any criticism of the Defendant for doing so. I simply observe that he and his wife must have felt sufficiently comfortable about their financial circumstances at that time to expend $130,000 out of his damages settlement payment on items such as that. 7 That apparently left some $60,000 out of the lump sum payment he had received for his damages claim. Apparently, he spent some $50,000 of that amount in making improvements to the Rosehill property. As I have said, that property was sold in 2004 and the net proceeds of sale were some $340,000. Of that sum, some $50,000 has been spent apparently on improving the deceased's property where the Defendant and his wife went to live after they sold their home at Rosehill in order to look after the deceased. Accordingly, as the evidence suggests, the Defendant had some $290,000 remaining out of the proceeds of sale of the Rosehill home when he went to live in the deceased's property. 8 What has happened to that $290,000 is not explained by the evidence. The assets and liabilities statement of the Defendant does not really account for it at all. Accordingly, I am left in a state of some uncertainty as to what really is the financial position of the Defendant, but what is clear is that he and his wife have lived in the deceased's property rent-free since 2004 and they continue to live there. 9 They say that they have expended some money on the maintenance and improvement of that property. Of course, I accept that evidence. I observe, however, that the expenditure of those amounts on the maintenance of the property were at least partially for their own benefit as well as the benefit of the deceased. 10 The Defendant is now in poor health and can no longer work. He is now on a disability support pension and receives about $525 per fortnight. His wife receives $635 per fortnight by way of a carer's pension and allowance. Accordingly, their joint income is some $1100 per fortnight. They do not have any substantial debts, so far as their evidence discloses. Their living expenses appear to be relatively modest. 11 Accordingly, one is confronted with the position in which, on the one hand, the Plaintiff, for whom no provision has been made, has no assets and lives entirely on her disability allowance, whereas, on the other hand, the Defendant has –leaving aside the assets of the estate – some capital, the extent of which is not clear, but maybe in the order of $290,000 and, together with his wife, an income from various allowances of something like $1100 per fortnight with no major debts or continuing liabilities. The situation of the Defendant is, therefore, in financial terms much better than that of the Plaintiff. One has to take into account also the benefit which the Defendant has received by way of rent-free accommodation himself and his family since 2004. 12 No provision at all having been made for the Plaintiff in the deceased's will, the first question is whether, having regard to her position in life and her relationship with the deceased, some provision ought to have been made. 13 Essentially, the position taken by the Defendant is that, because of the smallness of the deceased's estate, the deceased could not provide from his estate secure accommodation both for the Defendant and for the Plaintiff. He had to make a choice and the choice that he made was to leave the Defendant with accommodation because it was the Defendant, with the assistance of his wife, who had taken the major burden of caring for the deceased in the last years of his life. 14 The Defendant says that the deceased was justified in taking this view because the Plaintiff herself had had little, if any, contact with the deceased over the last six years or so of his life and the relationship between them was not good. The deceased's decision, therefore, in the Defendant's submission, was not only entirely understandable, but appropriate in all the circumstances and his will should not be disturbed. 15 I should deal, relatively briefly, with the contention that the Plaintiff, by reason of her conduct, was undeserving of any provision from the deceased's estate. 16 There is a stark divergence in the evidence of both sides as to whether the Plaintiff had any contact of any quality with the deceased in the last years of his life. There are, in evidence, two Statutory Declarations of the deceased. The second, made in 2007, is more compendious in its detail. When he made that Statutory Declaration, the deceased was some 91 years of age. The Statutory Declaration makes it clear that he felt a great sense of grievance against the Plaintiff. He felt that she had neglected him, that she had not taken the trouble to visit him, that he had done quite enough for her during her lifetime and that she was not deserving of any provision from his estate. The deceased also laid particular emphasis on the support and care provided to him by the Defendant and his wife as the reason for excluding the Plaintiff entirely from his will. 17 While the views of the deceased expressed in that Statutory Declaration must be given weight, they do not, of course, conclude the matter against the Plaintiff. The question is always for the Court to decide whether, in all of the circumstances, the Plaintiff has been left without adequate provision for her proper maintenance, bearing in mind the considerations referred to s 9(3) of the Family Provision Act. 18 The Plaintiff has lived in Perth for a number of years to be close to her daughter. She says that it was very difficult for her to communicate with her father because the Defendant and his wife were very hostile towards her, did not welcome her into the house where her father was living with them and would terminate her telephone calls to her father before she was able to speak to him. That evidence is supported by the evidence of her son. 19 It is apparent to me that there is, indeed, a considerable degree of hostility between the Plaintiff, on the one hand, and the Defendant and his wife, on the other hand. I found the evidence of the Plaintiff's son, Adam, entirely convincing in its description of the difficulties involved in negotiating those family hostilities from his own viewpoint as well as from his mother's viewpoint. 20 I think it a fair conclusion that the deceased did not speak to the Plaintiff or see the Plaintiff in the last years of his life nearly as often as he wished. However, his sense of grievance in that regard may well have been unjustified because he did not appreciate the difficulties that his daughter had in communicating with him. 21 I do not find, in short, that there is conduct on the part of the Plaintiff which would disentitle her from any consideration by the deceased in making a proper disposition of his estate having regard to the financial needs of both his children. 22 It seems to me that the deceased correctly acknowledged that the relationship between himself and the Defendant and his wife was far stronger in terms of constant presence and support than that between himself and his daughter, and that is the reason that he preferred to make provision for his son rather than for his daughter. 23 However, I think that he failed to make adequate provision by leaving nothing at all to his daughter, having regard to her particularly necessitous financial circumstances and the very poor state of her health. 24 It was clearly impossible for the deceased to provide adequately for his daughter and, at the same time, leave his son in occupation of the deceased's house and it may be that that consideration motivated him to make the disposition which he did. Whatever the motivation, I cannot give effect to it as, in my view, the Plaintiff has demonstrated to the Court's satisfaction that she has been left without adequate provision which is proper in the circumstances. 25 Having regard to the comparative financial positions of the Plaintiff and the Defendant, I conclude that the Plaintiff should receive a substantial provision from the estate. However, due weight must be given to the fact that it was the Defendant and his wife who bore the burden of looking after the deceased for years and of providing for him that and they have contributed from their own money in improving the deceased's home in which they now live. 26 Considering that the net estate, after legal expenses and costs of sale of the home, will be some $160,000, it seems to me that the only provision which I can properly make, in accordance with the considerations required by the Act, is to order a legacy from the estate in favour of the Plaintiff in the sum of $60,000, leaving the Defendant with a residue of some $100,000. 27 It is possible that the deceased's home will have to be sold in order to pay the legacy, and that may take a little time. Interest on the legacy should, therefore, begin to run after three months from today. Orders