Supreme Court New South Wales Medium Neutral Citation: Estate George Roby, deceased [2017] NSWSC 265 Hearing dates: 16 March 2017 Date of orders: 17 March 2017 Decision date: 17 March 2017 Jurisdiction: Equity Before: Lindsay J Decision: 1. Declaration as to entitlements to ownership of estate property, together with consequential orders. 2. Orders for family provision relief. Catchwords: WILLS – Construction – Right of residency conditional upon payment of expenses and continuing use as principal place of residence SUCCESSION – Family Provision – Claim for relief under Family Provision Act 1982 NSW – Application for extension of time within which to apply – Modest relief granted Legislation Cited: Family Provision Act 1982 NSW Succession Act 2006 NSW Trustee Act 1925 NSW Uniform Civil Procedure Rules 2005 NSW Cases Cited: Fell v Fell (1922) 31 CLR 268 Garbett v Bear [2015] NSWSC 1524 Verzar v Verzar [2014] NSWCA 45 Texts Cited: - Category: Principal judgment Parties: Plaintiff: Grace Alexandra Roby First Defendant: Amelia Marie Eagan (as representative of the Estate of George Roby, deceased) Second Defendant: Ian Bruce Roby Representation: Counsel: Plaintiff: L Ellison SC First Defendant: JD Beck Second Defendant: A Cheshire SC Solicitors: Plaintiff: Corbett Jessop Law First Defendant: Howlin Gibson Solicitors Second Defendant: Goldrick Farrell Mullan Solicitors File Number(s): 2016/001780582017/00002123 Judgment INTRODUCTION 1. Save for the reservation of discrete separate questions (identified by an order made under rule 28.2 of the Uniform Civil Procedure Rules 2005 NSW) concerning an alleged failure to account by Dennis Edward Eagan ("the Executor") as executor of the estate of the late George Roby ("the deceased") for rent receipts on trust property in and following 2007, this judgment determines two sets of proceedings relating to administration of the estate of the deceased. One, commenced by the plaintiff, seeks a declaration about the proper construction of the deceased's Will, and an order that a home unit at Jannali held on trust for her or the second defendant (depending upon the proper construction of the Will) be transferred to her. The other, commenced by the second defendant, seeks family provision relief contingent upon a construction of the Will adverse to him. 2. For convenience, the parties to the proceedings are identified by the designations given to them in the construction suit, the proceedings commenced first in time. 3. By and with the consent of the parties, the two sets of proceedings have been heard together pursuant to an order made under the Uniform Civil Procedure Rules 2005, rule 28.5. 4. The plaintiff is a granddaughter of the deceased, the daughter of the second defendant. The first defendant was appointed (pursuant to rule 7.10 of the Uniform Civil Procedure Rules) to represent the estate of the deceased in the proceedings following the very recent death of her father, the Executor; although she is the executrix named in the last known Will of the Executor, she has yet to obtain a grant of probate referable to his estate. She is a granddaughter of the deceased by his daughter an Anne. The second defendant is a son of the deceased, and the father of the plaintiff. 5. The deceased died on 27 November 1999, aged 73 years, leaving a Will dated 8 March 1999, probate of which was granted to the Executor (then the deceased's son-in-law, married to Anne) on 25 January 2000. 6. The deceased was survived by his three children: Ian Bruce Roby (the second defendant), born in 1960 and now aged 56 years; David George Roby ("David") is now aged 54 years; and Anne Marie Roby ("Anne") is now aged 58 years. 7. The deceased was also survived by two granddaughters: Grace Alexandra Roby (the plaintiff), the daughter of the second defendant; and Amelia Marie Eagan (the first defendant), daughter of an Anne and the Executor. The plaintiff was born in 1991 and is now aged 26 years. The first defendant was born in 1993 and is aged nearly 24. 8. The deceased and the mother of his children were divorced in or about 1988. The deceased did not re-partner after the divorce. 9. The plaintiff's parents were married in 1989 and divorced in 1998. She is the only child of their marriage. She had a close and loving relationship with the deceased, terminated by his death when she was only eight years of age. 10. The divorce of the plaintiff's parents appears to have been a bitter experience, one consequence of which is that the plaintiff and the second defendant did not develop anything approaching a close personal relationship. Counsel are comfortable in describing their relationship as "estranged". 11. By his Will, the deceased appointed the Executor as sole executor and trustee (clause 2); gave to Anne a Royal Doulton Ornament (clause 4); settled money on the Executor to purchase two home units on trusts the subject of contention in the present proceedings (clause 5); gave the residue of his estate to the Executor (clause 6); and conferred on the Executor broad powers to manage his estate (clauses 7-9). 12. Clause 5 of the Will is in the following terms: "5. I GIVE to the Trustee [that is, the Executor] so much of my estate as is necessary for my Trustee to purchase two one or two bedroom home units at a purchase price not exceeding $160,000 for each unit together with such further sum as is necessary for the payment of all expenses associated with the purchase of such units including stamp duty, legal costs and other disbursements and I DIRECT my Trustee to hold such home units upon trust as follows: (a) As to one unit (to be determined by the Trustee) my son IAN BRUCE ROBY may live in that unit as long as he wishes provided he pays all rates and taxes and other outgoings in respect thereof and keeps it in repair to the satisfaction of the Trustee PROVIDED HOWEVER that in the event that the said IAN BRUCE ROBY ceases to use the said unit as his principal place of residence or upon his death whichever shall first occur then UPON TRUST for my granddaughter GRACE ALEXANDRA ROBY provided she shall survive me and attain the age of twenty-one (21) years; (b) As to the other unit (to be determined by the Trustee) my son DAVID GEORGE ROBY may live in that unit as long as he wishes provided he pays all rates and taxes and other outgoings in respect thereof and keeps it in repair to the satisfaction of the Trustee PROVIDED HOWEVER that in the event that the said DAVID GEORGE ROBY ceases to use the said unit as his principal place of residence or upon his death whichever shall first occur then UPON TRUST for my granddaughter AMELIA MARIE EAGAN provided she shall survive me and attain the age of twenty-one (21) years; PROVIDED HOWEVER that any surplus of such funds after purchasing the said units including all costs and expenses associated therewith or in the event that either or both of the above gifts shall lapse then such funds or gift shall fall into and form part of the rest and residue of my estate." 1. The deceased made his Will with knowledge of the second defendant's domestic circumstances, and with a belief (apparently grounded in reality) that his sons were entrenched in a debilitating drug culture which could limit their ability to retain, and responsibly manage, any property given to them. 2. Following the death of the deceased, two home units were purchased as contemplated by clause 5 of the Will. The home unit the subject of the current proceedings, appropriated to the plaintiff and the second defendant under clause 5(a) of the Will, is situated at Jannali. The home unit appropriated to David and the first defendant, pursuant to clause 5(b) of the Will, was situated at Strathfield. It has since been sold by the Executor and replaced by a home unit at Woolooware. 3. Clause 5(b) of the Will and the Woolooware property play no substantive role in the contests the subject of this judgment. During the course of the hearing, without admissions of any kind, an interlocutory injunction was granted to restrain the first defendant dealing with the property pending inquiries being made as to whether, in breach of trust obligations grounded in clause 5(a) of the Will, the Executor applied rental receipts referable to the Jannali property to repayments of a mortgage to National Australia Bank Limited presently on the title of the Woolooware property. 4. Both properties, at Jannali and Woolooware, are presently held in the name of the Executor as registered proprietor. The Jannali property is held on trust for the plaintiff and/or the second defendant (as the Court is required, by this judgment, to determine). It is not necessary for me to determine whether, as the first defendant claims, the Woolooware property is presently held on trust for her in her personal capacity. 5. The second defendant obtained a copy of the deceased's Will shortly after the death of the deceased and, although he now suggests he did not fully understand its terms because he did not enjoy good mental health, he twice conceded in cross examination that, when he read the Will shortly after his father's death, he thought that it dealt fairly with him. 6. In the event, he did not bring any application for family provision relief until Christmas 2016 or thereabouts, about 17 years after the deceased's death and more than 15 years after expiry of the 18 month limitation period prescribed by section 16 of the Family Provision Act 1982 NSW for the making of such a claim. One of the claims for relief made in his summons is for an order that the time for the making an application for family provision relief be extended pursuant to section 16. 7. Although the Family Provision Act 1982 has been repealed and replaced by the Succession Act 2006 NSW, the parties agree that, by operation of clause 11(2) of Schedule 1 of the Succession Act 2006, the second defendant's application for family provision relief is governed by the Family Provision Act. 8. The precise time at which the second defendant's family provision application was made is the subject of conjecture unnecessary to resolve. The summons (dated 12 December 2016) by which he made his application was received and stamped by the Court on 12 December 2016, but only allocated a return date in a copy of the summons marked by the Court as having been filed on 3 January 2017. No party attributes significance to the difference in dates. 9. The second defendant lived in the Jannali unit from the time of its acquisition (in June 2001) until late 2006. At that time he relocated to Thredbo, where he was employed as a caretaker by a family friend until recently. 10. He has not lived at the Jannali home unit since he moved out. Nor has he, since that time, paid any rates, taxes or outgoings referable to the property, or done anything towards its maintenance or repair. It is presently vacant but, under the control of the Executor as trustee, it was leased to an unrelated party from about 12 January 2007, and rates and other outgoings (including strata levies and management fees) were deducted from rent receipts by a managing agent acting on instructions from the Executor. 11. The second defendant's departure from the Jannali property can be explained, in part, by trauma experienced by him in and after January 2006 consequent upon a murder-suicide of friends he had allowed to reside with him in the unit. He took a job in Thredbo, fazed by his friends' deaths, after receiving an assurance from the Executor that he could return to live there at a later time. The Executor appears to have assumed that, as the deceased's executor and residuary beneficiary, he was entitled to manage estate property as his own. It is not presently necessary to explore this. 12. That the Executor took upon himself to give assurances to the second defendant can be taken into account upon consideration whether the Jannali unit ceased to be used by the second defendant as his principal place of residence; but it cannot govern the proper construction of clause 5(a) of the deceased's Will, or deprive the plaintiff of any entitlement she may have under that subclause to beneficial ownership of the unit. Whether the second defendant may have a claim against the Executor's estate was a question raised, but not explored, in the current proceedings. 13. In 2016, after he had suffered a decline in his health (suffering strokes), the second defendant proposed to re-enter into possession of the Jannali unit; but, on 30 June 2016, he was restrained from doing so by an interlocutory injunction granted in the proceedings commenced by the plaintiff by a summons filed on 10 June 2016. 14. For her part, the plaintiff (long estranged from her father) discovered, shortly before her 21st birthday, that she was a beneficiary under the deceased's Will. That discovery came when her mother showed her a copy of the deceased's Will. Her mother, evidently, was not unmindful of her interest in the Jannali unit. 15. Knowing that the second defendant lived in Thredbo and had done so for several years, and having attained the age of 21 years in February 2012, the plaintiff, in June 2012, demanded that title to the Jannali unit be transferred to her. That demand was made through solicitors and, through solicitors, resisted by the Executor. An ongoing, protracted dispute about entitlements to the Jannali unit was brought to a head by an expressed intention on the part of the second defendant, in or about June 2016, to move back to Jannali. The plaintiff commenced her proceedings for construction of the Will and consequential orders. 16. On 30 June 2016, on the plaintiff's undertaking as to damages, Rein J made orders to the effect that, pending final order: (a) the Executor be restrained from permitting the second defendant to enter and/or occupy the Jannali home unit; and (b) the second defendant be restrained from entering and/or occupying the unit. 1. In due time, although not expeditiously, the second defendant responded to the plaintiff's summons by filing his own summons, providing a foundation for a contention that, should clause 5(a) of the deceased's Will be construed in a manner that results in a determination that beneficial title to the Jannali unit resides in the plaintiff, he should be granted, by way of family provision relief, a life estate (or a life-time right of residence) in the unit. 2. The plaintiff's summons having been fixed on 5 October 2016 for hearing yesterday (16 March 2017), upon return of the second defendant's summons before the Family Provision List Judge on 3 March 2017, his Honour ordered that it be listed at the same time as the plaintiff's summons with a view, possibly, to being heard at the same time. 3. At the commencement of the hearing of the plaintiff's summons the parties agreed to procedural orders designed to accommodate the recent death of the Executor, to join all affected parties in both sets of proceedings, and to allow both sets of proceedings to be heard together, without any adjournment beyond the day. 4. On further reflection, shortly after the commencement of the hearing, the parties agreed to a reservation for another time (if not earlier resolved) questions about whether the estate of the Executor might be held accountable for rent receipts relating to his letting out of the Jannali home unit in and following 2007. The evidence presently before the Court is to the effect that, save possibly for an amount of $2,000 paid by the Executor to the plaintiff in about 2009, all rents, net of deductions made by the Executor's managing agent, were paid to the Executor, and not passed on by him to either the plaintiff or the second defendant. By the Court's procedural orders, questions about accountability for those receipts (including a foreshadowed application by the first defendant, anticipating a grant of probate of the Executor's Will, for relief under section 85 of the Trustee Act 1925 NSW) have been deferred. 5. The parties' present, primary focus is upon which of the plaintiff and the second defendant is entitled to beneficial ownership, and any right of occupation, of the Jannali unit. 6. Towards the end of the hearing counsel agreed that, if the second defendant were to be granted family provision relief, the Court could, and should, consider whether (instead of orders confirming in the second defendant a right to own or occupy the Jannali unit) the second defendant might be granted a legacy, the effect of which would be to enable the plaintiff and the second defendant to go their separate ways without being tied to the realty. 7. In the course of submissions made in that context I indicated that, although minded to find in favour of the plaintiff on her construction summons, I was minded also to allow the second defendant a small legacy to facilitate his endeavours to obtain new accommodation following the recent termination of his Thredbo employment, declining however to deprive the plaintiff of any substantial entitlement to the Jannali unit under the deceased's Will. 8. The plaintiff and the second defendant are agreed that the Jannali unit presently has a market value in the range of $500,000 - $550,000. The plaintiff's estimate of value defines the lower end of the range, the second defendant's estimate defines the upper end. 9. The second defendant accepts that, were he to be granted a legacy calculated as an allowance of the equivalent of 12 months' rent on the Jannali unit, an appropriate figure for quantification of that legacy would be $20,000. 10. In construction of clause 5(a) of the deceased's Will, read as a whole and in the context in which it was made by the deceased, I take note of the principles of construction classically summarised by Isaacs J in Fell v Fell (1922) 31 CLR 268 at 273-275. I also acknowledge nuanced meanings associated with testamentary grants of a life estate, a right of residence or a right of occupation and references to a "principal place of residence". 11. In construing the deceased's Will, sitting in his armchair as the second defendant invites me to do (by reference to section 32 of the Succession Act and the authorities cited by Rein J in Garbett v Bear [2015] NSWSC 1524 at [10]) I take into account not only the deceased's concern about the welfare of the second defendant as his son but also his concern for the plaintiff as his granddaughter, a child of a child of doubtful dependability. 12. I do not read the deceased's Will as conferring upon the second defendant (as his highest case suggests) a life estate or, for that matter, a right of residence unrelated to his acceptance of responsibility for maintenance of the home unit appropriated to clause 5(a). He was granted a right to "live in that unit as long as he wishes" on provisos: (a) that he pay all rates and taxes and other outgoings in respect of the unit; (b) that he keep the unit in repair to the satisfaction of the Executor; and (c) that he not cease to use the unit as his principal place of residence. 13. Whatever might have been the second defendant's subjective motivations for departure from the Jannali unit in late 2006, and his relocation in Thredbo at about that time, the fact is that, objectively, he abandoned the Jannali unit as a place of residence at the time of his relocation. Each element of the provisos to his right to "live" in the unit "as long as he wishes" was engaged at the time of his abandonment of the property, and confirmed by the passage of years that passed before he sought to return to Jannali. 14. Although the evidence does not include a copy of any lease of the Jannali unit entered into by the Executor in or following 2007, the unit was plainly leased to somebody outside the parties' family circle. There is nothing in the evidence to suggest that a lessee's right of exclusive possession of the unit, or a lessee's associated right of quiet enjoyment of the property, was qualified by a reservation of an entitlement in the second defendant to regard the unit as his principal place of residence. 15. In my opinion, the plaintiff became beneficially entitled to the Jannali unit when, in February 2012, she turned 21, the second defendant having ceased to use the unit as his principal place of residence no later than 12 January 2007, when the unit was let out by the Executor to the exclusion of any interest the second defendant may have had in it. 16. For the avoidance of any doubt, I also record my view that, in letting out the Jannali unit in and following 2007, the Executor was bound to hold nett rental proceeds on behalf of the plaintiff, subject only to her attaining the age of 21 years. I do not accept, as some of the correspondence entered into by the Executor's solicitors suggests, that the Executor was entitled to appropriate the rent to himself as the deceased's residuary beneficiary. 17. In the result, in my opinion, the plaintiff is entitled to the relief she seeks in her summons, subject to such (if any) entitlement the second defendant has to family provision relief. 18. In support of his application for an extension of time under section 16(2) of the Family Provision Act, the second defendant contends that it is sufficient that the first defendant, and before her, the Executor has "consented" to his application for family provision relief being made after the expiry of the 18 months limitation period for which section 16(1)(b) of the Act provided. 19. The discretion for which section 16(2) provides is not constrained by section 16(3)(a) except that the Court may not make an order under section 16(2) allowing an extension of time unless the parties to the proceedings concerned have consented to the application for an extension of time (section 16(3)(a)) or "sufficient cause is shown" for the application for family provision relief not having been made within the statutory period (section 16(3)(b)). 20. In the circumstances of the present case (bearing in mind the opposition of the plaintiff as his real contradictor), if the second defendant's family provision application is to succeed he needs to demonstrate "sufficient cause" for the Court, having regard to all the circumstances of the case, to exercise its discretion under section 16(2) to allow a late application for family provision relief to be made. 21. In deciding whether "sufficient cause" has been shown, I have regard to the matters identified in Verzar v Verzar [2014] NSWCA 45 at [25] described as material to that question. 22. Not without misgivings, I conclude that "sufficient cause" for the second defendant's delay can be found in the state of his mental health at or about the time the deceased died and, insofar as it might bear upon delay after the second defendant's departure from the Jannali unit, the Executor's assurance that he (the Executor) would permit him (the second defendant) to return to the unit at some future date. 23. Although I am minded to order that the second defendant be granted an extension of time within which to make an application for family provision relief, I propose to do so on the basis that any strength that his claim for relief may have is limited to a small allowance to facilitate his endeavours now to obtain alternative accommodation, and that it would not be just, having regard to the needs of the plaintiff starting out in adult life (or to the assistance the deceased gave to the second defendant during his lifetime) to diminish the plaintiff's entitlements under the Will in any substantial way. 24. To the extent that the Court may need to be satisfied, pursuant to section 28(5)(d) of the Family Provision Act, that there are "special circumstances" justifying an order for designation of property as notional estate of the deceased (assuming that the Jannali unit can be taken to have been the subject of a "distribution" by virtue of a change in the Executor's role from that of an executor to that of a trustee), I am satisfied that "special circumstances" can be found in the state of the second defendant's mental health. 25. The more difficult, evaluative task is to determine what quantum of relief ought to be granted to the second defendant (under section 7 of the Family Provision Act), in justice and wisdom, having regard to the circumstances presently pertaining. 26. The conclusion to which I have come is that, in addition to the provision made for him by the deceased in the Will (which have since ceased to flow to him), the second defendant should be granted a legacy of $40,000. 27. This sum, although modest, allows to the second defendant not only the equivalent of one year's rent but also an additional buffer for contingencies associated with adjusting to his new circumstances. 28. Subject to allowing the parties an opportunity to be heard as to the form of orders to be made, I propose to make orders to the following effect: 1. DECLARE that such right as the second defendant had pursuant to clause 5(a) of the Will of the deceased has lapsed or ceased to be available to him. 2. ORDER that, subject to these orders, the fee simple in the Jannali unit be vested in the plaintiff for her own use and benefit absolutely. 3. ORDER that the time for the second defendant to make an application for family provision relief under the Family Provision Act be extended up to and including 3 January 2017. 4. ORDER that, in addition to the provision made for him in the Will of the deceased, the second defendant be granted a legacy in the sum of $40,000. 5. ORDER that the obligation to pay that legacy be a charge on the title of the Jannali unit. 6. ORDER that interest on the legacy payable to the second defendant accrue from 1 May 2017, if and to the extent not earlier paid. 7. RESERVE to the parties liberty to apply generally for consequential relief, including for sale of the Jannali unit in the event that the second defendant's legacy is not paid on or before 30 April 2017. 1. I will hear the parties as to costs, noting a present inclination to make no order as to costs, leaving all parties to pay or bear their own. 2. The plaintiff has succeeded in her proceedings, as has the second defendant (in a modest way) in his. The first defendant's participation in the proceedings has been limited, in large measure, to protection of the estate of the Executor from a claim for an accounting which has been deferred. ********** 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: 17 March 2017