Supreme Court New South Wales Medium Neutral Citation: Duffy v Duffy [2014] NSWSC 216 Hearing dates: 4 October 2013 Decision date: 17 January 2014 Jurisdiction: Equity Division Before: Lindsay J Decision: Order that the proceedings be dismissed Catchwords: SUCCESSION - Family Provision - Small Estate - Application by disabled adult son - In competition with widow of deceased - Insufficient assets to accommodate competing claims - Application dismissed. Legislation Cited: Succession Act 2006 NSW Cases Cited: Luciano v Rosenblum (1985) 2 NSWLR 65 McKenzie v McKenzie [1971] P 33 Smith v The Queen (1985) 159 CLR 532 Wheat v Wisbey [2013] NSWSC 537 Texts Cited: - Category: Principal judgment Parties: Tasman Herbert Duffy by his Tutor Carline Janne Duffy (Plaintiff) Tuula Anneli Duffy as Administratrix of the Estate of the Late Raymond Herbert Duffy (Defendant) Representation: Counsel: Ms CJ Duffy (as Mother and Tutor of the Plaintiff) with Mr S Gould, by leave, for the plaintiff Mr C K Stewart for the defendant Solicitors: Plaintiff: Self Represented Defendant: Morgan Ardino & Co File Number(s): 2013/0033586 Judgment INTRODUCTION 1Through his mother acting as his tutor the plaintiff, an adult son of Raymond Herbert Duffy ("the deceased"), makes an application for an extension of time within which to make an application and, subject to an extension of time being granted, an application for family provision relief (under chapter 3 of the Succession Act 2006 NSW) from the estate, or notional estate, of the deceased. 2The defendant, the widow of the deceased and administratrix of his intestate estate, opposes any grant of relief to the plaintiff. Her principal defence to the proceedings is her contention that (as she is the widow of the deceased after 16 years of marriage to him, and the resources that are or might be made available for a grant of relief to the plaintiff are modest) she is entitled to primacy. 3As an incident of that defence, she opposes a grant, pursuant to s 58(2) of the Succession Act, of an extension of time within which the plaintiff might make an application for a family provision order; but she does not contend that she suffered prejudice as a result of the short delay, after expiry of the limitation period of 12 months after the date of death of the deceased limited by s 58, before the plaintiff commenced these proceedings. 4The case is a profoundly difficult one for three fundamental reasons. 5First, viewed in the abstract, the plaintiff has a meritorious claim on the bounty of the deceased: although an adult (aged 33 years), he suffers from chronic schizophrenia and has a borderline intellectual disability that requires regular medical supervision, constrains his capacity for remunerative employment and keeps him dependent upon his mother for day-to-day care. 6Secondly, although the plaintiff's mother conscientiously believes that there is, or must be, property (to which a family provision order might attach) beyond that disclosed by the defendant, the objective evidence presently before the Court, inadequate though the financial evidence is, suggests that the only property available, if any, is of modest dimensions. 7As disclosed in the Inventory of Property annexed to the letters of administration granted to the defendant, the deceased died with property worth $217,974.84, and with a half share in his (matrimonial) home as a joint tenant. 8Whether the deceased did die with property worth $217,974.84 is, at best, doubtful. More than half that sum ($137,790.00) is attributed, in the inventory of property, to a Mercedes motor vehicle acquired by the deceased shortly before his death, on lease. Another of the assets attributed to the deceased ($48,458.00) appears to have been held by him on trust for the beneficiaries in his late mother's estate, quite possibly his sister rather than himself. 9Other evidence, proferred as accounting evidence but not wholly coherent or consistent, suggests that, taking the deceased's liabilities into account, the estate he left was, at best, borderline insolvent. 10The only substantial property associated with him at the time of his death was his joint tenancy in the matrimonial home. It came to be unencumbered only through an application to his mortgage debt (and that of the defendant) of moneys sourced by the deceased from his late mother's estate. 11He died owing a total of about $113,000 on credit cards, an indebtedness which spanned more than a dozen cards and nine different creditors. 12There is, here, more than a hint that the deceased lived beyond his means. 13Thirdly, there is objective force in the defendant's claim to primacy as the widow of the deceased, particularly in light of: (a) her contributions (both financial and non-financial) to any accumulation of wealth by the deceased over the 16 years of their marriage; and (b) her own health at the age of 68 years. 14The case is no easier to decide for the passionate commitment of the plaintiff's mother to her son and (without objection, and, as condoned by McKenzie v McKenzie [1971] P 33 at 37B-38E, 40B, 4OH - 41F and 42E and by Smith v The Queen (1985) 159 CLR 532 at 534) her appearance, in person, for her son, with a McKenzie friend to assist her. 15The evidence adduced, and the submissions made in support of the plaintiff's case, were bedevilled by a lack of precision and his mother's earnest insistence (over reasoned denials by the widow) of an ongoing, but illicit, personal relationship with the deceased. 16There appears to be a degree of rivalry between the two women, suppressed though it has been in debate about the plaintiff's entitlements. CONTEXT 17The deceased was born on 1 August 1937. He died on 16 January 2012, aged 74 years. 18On 12 September 2013 (in proceedings numbered 2013/0033577) this Court granted letters of administration of the deceased's estate to his widow, the defendant. 19The deceased was married five times. He had children only by his second and third wives. The plaintiff is a child of the deceased's third marriage. 20The first marriage (to Carol Cordingly) was comparatively short lived. 21The second marriage (to Carol Dunlop) lasted about 10 years and produced four children: Juliet, born in 1966 and now aged about 47 years; Natelie, born in 1968 and now aged about 45 years; James, born in 1972 and now aged about 41 years; and Penelope, born in 1974 and now aged about 39 years. 22The deceased married Carline, as his third wife, in 1978. The marriage, which lasted about four years, produced two children: Tamara, born in 1978 and now aged about 34 years; and the plaintiff Tasman, born in 1980 and now aged about 33 years. Tamara is married, with two children of her own. The plaintiff lives with his mother at her home in Petersham. 23The deceased's fourth marriage (to Patricia) lasted about 10 years. 24The deceased married the defendant, as his fifth wife, on 25 January 1996. Although there were no children of that marriage, she has a daughter, Tina, by a previous relationship. Tina is married. 25It is necessary, for a complete understanding of disputes about the deceased's wealth, to note that he was one of two children of the marriage between Herbert Francis Duffy (who died in 1978) and Agnes Beatrice Duffy (who died on 26 March 2011). The other child of that marriage is Colleen Patricia Duffy, born in 1943 and now aged about 70 years. Colleen suffers from schizophrenia and is confined to a nursing home. 26The deceased's mother (the plaintiff's paternal grandmother) left a will dated 1982, probate of which was granted to the deceased, which left him one half of her estate and disposed of the other half by allowing his sister a life estate, with the remainder of her share being left to the five children of the deceased's second marriage. 27Aided, perhaps, by the fact that the deceased was granted a power of attorney by his aged mother in 2010, the plaintiff's mother apprehends that his deceased estate should include more property than it does from his mother's estate. She may have been encouraged in this apprehension by statements made by the deceased, about the time he became his mother's attorney, that he hoped to persuade his mother to make some provision for the children of his third marriage. In the event, nothing appears to have come of that. 28Another centre of disquiet in the plaintiff's mother's contemplation of the deceased's estate arises from the nature of the deceased's business. Through the company Migeba Pty Limited (of which he was the sole director and shareholder) the deceased conducted the business of a finance broker (trading under the business names "Rent-Equip" and "Lease-Equip") from which the company has received trail commissions. There is an apprehension, on the part of the plaintiff's mother, that: first, those commissions have not been fully accounted for; and, secondly, the company's entitlement to those commissions should have resulted in an attribution of value to the deceased's interest in the company larger than the nominal, or nil, value in fact attributed to it by the defendant. 29The evidence does not permit a finding in favour of the plaintiff on either point. Even if his mother's apprehensions are well founded, I am not satisfied that there are resources available to meet the claims on the bounty of the deceased of both the plaintiff and the defendant. PERSONAL CIRCUMSTANCES OF THE PLAINTIFF 30The plaintiff was born on 12 March 1980. 31He was diagnosed with schizophrenia (and, his mother asserts, but the defendant does not concede) autism in 1989. Nothing appears to turn on whether he does or does not, in fact, suffer from autism. The fact that he suffers from a disability is not disputed by the defendant. 32The defendant objected to evidence of the plaintiff's mother that he has been unable to obtain employment since 2001 "because he requires constant supervision", but evidence from which such an inference could be drawn was not the subject of objection or cross examination. I accept that he requires supervision on a regular, day to day basis, if not constantly. 33The plaintiff did not personally give evidence in his own cause. However, that fact attracted no adverse comment from the defendant. I infer that that, in itself, is a reflection of acceptance of the fact that the plaintiff suffers from a disability. 34The deceased paid child support for the plaintiff to the mother, initially at the rate of $25 per week but rising in 1989 to $50 per week, until the plaintiff reached his majority. After that time, he provided no significant financial support to, or for, the plaintiff. 35The plaintiff is largely, if not wholly, dependant on his mother, a school teacher by profession. PERSONAL CIRCUMSTANCES OF THE DEFENDANT 36The defendant was born in Finland on 11 July 1945 and is currently aged about 68 years. 37At the time of the deceased's death he and the defendant were registered as proprietors of an estate in fee simple, as joint tenants, of the property known as Unit 9, 20 Thomson Street, Tweed Heads, in the State of New South Wales. That property passed to the defendant, by right of survivorship, on the death of the deceased. 38The Tweed Heads property was purchased by the defendant and the deceased in 2009 for approximately $470,000. They had together purchased the property using funds of approximately $150,000 derived from the sale of their prior matrimonial home (at 4 Castlecrag Avenue, Panora Point, New South Wales) and a home loan secured by a mortgage over the property. 39During the course of her marriage the defendant contributed substantially all her savings and earnings towards the purchase and maintenance of the properties that they successively resided as a matrimonial home. The mortgage over the Tweed Heads property was discharged in full when, before he died, the deceased appropriated $272,452.99 for that purpose, ostensibly from his inheritance from his mother's estate. 40Whether there has been a full and proper accounting for the deceased's dealings with his mother's estate is an open question not necessary to explore, or able to be explored, in these proceedings. 41At the time of her marriage to the deceased the defendant was working as a supervisor in a pharmaceutical company known as Tuta Laboratories in Lane Cove, New South Wales. Shortly thereafter, in 1997, she was made redundant. Thereafter, she was employed directly in the finance brokerage business conducted by the defendant through Migeba Pty Limited. 42She is currently in receipt of a widow's pension in the amount of $808.00 per fortnight, which includes an allowance for pharmaceutical prescriptions. In addition, she has received $50.00 per week from Migeba Pty Limited on account of rent for the company's use of her home as an office. The company has also paid one third of her electricity account at home. It has funded those payments from the trailer commissions it has continued to receive, but which are near the point of evaporation. 43Upon an assumption that she can retain ownership of her former matrimonial home without debt, the defendant gets by on her pension and these incidental sources of income, apparently keeping the creditors of the deceased and Migeba Pty Ltd at bay. 44The defendant is currently in poor health. In 2000 she suffered a stroke which paralysed the left side of her body, including her face and leg. She made a good recovery from the stroke; however the left side of her body still remains weak. She remains prone to having a further stroke. She also suffers from high blood pressure as a permanent medical condition and is on medication for that and sundry ailments, including arthritis in her knees. 45She is apprehensive that she may, in time, need long term private nursing care and accommodation, her principal means for funding of which would be her current ownership of the Tweed Heads property. 46She apprehends that the value, and marketability, of the property have suffered from the body corporate's recent notification to her that the building in which the unit is located has substantial defects requiring rectification work. CONSIDERATION 47The plaintiff's mother would have the Court order that he be given a legacy of $100,000 to fund renovations to the property, owned by her, where the two of them live. 48A fundamental problem is that there is not enough material wealth to meet all the claims on the deceased's bounty. Leaving aside any question whether a family provision order could justifiably be made in favour of the plaintiff to fund renovations to a property owned by his mother, the sad reality is that, allowing for the defendant's legitimate expectations, and reasonable needs, there is insufficient property available to make any provision for the plaintiff. 49The assets available to do justice to competing claims on the bounty of the deceased are too few. There is not enough cake to cut. Whatever there is must be left for the defendant. 50Viewed in the abstract, the plaintiff scores well in meeting the indicative criteria for which s 59-60 of the Succession Act 2006 NSW provide. He is a son of the deceased. Through no fault of his own, he is in need of material assistance arising from physical disability. He received little assistance from his father in life, and none on his father's death. 51The fact that he is an adult does not tell against him, either in principle or in his particular circumstances: Wheat v Wisbey [2013] NSWSC 537 at [128], especially (b), (c), (e), (f) and (g). The critical question is whether the available assets permit an order for provision to be made. 52Where the plaintiff's his case falters, and decisively so, is that his father's deceased estate (if any) is unable to meet the claim he has on it when measured (as it must be measured) against the legitimate expectations, and material needs, of the defendant as the widow of the deceased following a marriage of substantial duration. He fails upon an evaluation of orders, if any, that, taking competing claims into account, "ought" to be made in his favour. 53A search for notional estate serves the plaintiff no better. Even if there were property available for designation as notional estate (a proposition doubtful at best), the case for the plaintiff has been conducted on the basis that any order for provision made in favour of the plaintiff would be at the cost of the defendant. 54Given her personal circumstances, the length of her marriage to the deceased, her contribution to the common weal and the property available to meet her needs, the plaintiff's claim must fail. 55The provision available to the defendant from the estate of the deceased falls short of the "standard" sometimes defined for a widow by reference to Luciano v Rosenblum (1985) 2 NSWLR 65 at 69G-70 A. 56I refer to Powell J's observations in that case, not to import a rule not found in the legislation, but to illustrate a point referable to the facts of the case. In a practical sense, any order for provision made in favour of the plaintiff would be likely to place in jeopardy the defendant's ability to remain in the former matrimonial home with enough resources for everyday expenses and unforseen contingencies. There is no identifiable fund adequate to meet her reasonable requirements as well as an order for provision in favour of the plaintiff. 57Had there been property available to meet his claim on his father's bounty, I would have granted the plaintiff an extension of time within which to make a family provision application. His delay in the commencement of proceedings was short (less than a month) and the defendant points to no particular prejudice arising from it. The fact remains, however, that there is not enough property to go round. 58This is a hard case, but one which I am bound to confront. CONCLUSION 59I order that the proceedings be dismissed. Addendum (Costs Judgment, Revised) 60In a judgment delivered this morning, I ordered that these proceedings be dismissed. At that time I indicated to the parties that I had made no order as to costs, and that I harboured a hope that I would not be called upon to determine an application for costs. 61That hope has not been realised. 62On notice to the plaintiff's tutor, the solicitor for the defendant (Mr Rocco Ardino) has returned to court to make an application for costs. He tells me, and I accept, that the plaintiff's tutor's Mckenzie friend (Mr S Gould) has advised him that the plaintiff's tutor declines to return to court to facilitate argument on the defendant's application. 63At the time of delivery of my reasons for judgment this morning, and in the presence of both the plaintiff's tutor and Mr Gould, I indicated that any application for costs would need be made today because, having regard to the small size of the estate, I was loathe to put the parties to the expense of an appearance on another day. 64I am satisfied that the plaintiff, by his tutor, has had notice of the defendant's application for costs and that it is expedient that the application be dealt with without further delay. 65Mr Ardino, when asked by me as to the likely quantum of costs to be claimed by the defendant, advanced a number of informal estimates, including an estimate in the vicinity of $50,000, higher than an earlier sworn estimate. 66Based on my experience in endeavouring to come to grips with the evidentiary material ultimately relied upon by the parties in the final hearing of the proceedings, and bearing in mind the difficulty of dealing with a small estate against the background of a plaintiff who (were it not for the smallness of the estate) would be regarded as deserving, it seems to me that I should ensure that the burden of any costs order made against the tutor for the plaintiff is contained. 67Costs must follow the event, but should be moderated, with a nominal allowance for the persistence of the plaintiff's tutor in a cause fraught with difficulty. 68Accordingly, I order that the tutor for the plaintiff (Carline Duffy) pay the defendant's costs of the proceedings: (a)on the ordinary basis up to and including 3 October 2013; and (b)on the indemnity basis after that date, limited to an amount (in total) not exceeding $30,000. 69The explanation for the differential bases for assessment of costs is that the defendant served on the plaintiff a letter inviting the plaintiff to submit to an order for dismissal of the proceedings with costs. There is no element of compromise there beyond a preparedness to forego an application for indemnity costs, on the cards and foreshadowed, but costs subsequently incurred were incurred unnecessarily. The plaintiff's mother clung to an unrealistic hope. 70The differential bases for assessment are unlikely to have any operational significance because of the limitation on the total amount of costs recoverable under the costs order. Nevertheless, a partial order for indemnity costs makes the point that the plaintiff's case was pressed beyond the reasonable. 71I direct the solicitor for the defendant to serve written notice of this order on the plaintiff's tutor no later than 24 January 2014. ********** 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. Decision last updated: 14 March 2014