Gwynne v The Public Trustee [1999] NSWSC 105 (22 February 1999)

Last Updated: 4 March 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Gwynne v. The Public Trustee [1999] NSWSC 105

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): 4454/97

HEARING DATE{S): 22/02/99

JUDGMENT DATE: 22/02/1999

PARTIES:

Eva Grace Gwynne (P)

The Public Trustee (D)

JUDGMENT OF: Master McLaughlin

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

Ms. L. Stapleton (P)

Mr. G. Durie (D)

SOLICITORS:

W. T. Evans, McGregor & Co. (P)

Mr. P. J. Whitehead (D)

CATCHWORDS:

ACTS CITED:

Family Provision Act 1982

DECISION:

See paragraph 43

JUDGMENT:

1 MASTER: These interests proceed under the Family Provision Act 1982. By summons filed on 20 October 1997 the plaintiff Eva Grace Gwynne seeks an order for provision for her maintenance and advancement in life out of the estate of her late husband William Henry Gwynne (to whom I shall refer as "the deceased").

2 The deceased died on 5 May 1996 aged 85. He left a will dated 15 January 1985, Probate whereof was on 30 December 1996 granted to the Public Trustee, the executor named in such will (who is the defendant to the present proceedings).

3 The only significant asset in the estate of the deceased is a house property situate at 22 Hopewood Crescent, Fairy Meadow (which is in the vicinity of Wollongong). That house property has a stated present value of $220,000. There is a present liability in the estate in an amount of $6793 which is still outstanding. The only other asset in the estate, totalling about $2,000, will be more than exhausted in meeting that liability.

4 In addition, each of the parties has provided a statement of the costs of the present proceedings, since the defendant executor will, in any event, be entitled to his costs out of the estate of the deceased and the plaintiff, in the event that she be successful in her claim, will also be entitled to an order for costs out of the estate.

5 The solicitor for the plaintiff has estimated that the costs of the plaintiff of the proceedings will total just over $20,000, and the solicitor for the defendant that the costs of the defendant will total $15,200.

6 In addition, if the house property were to be sold the defendant executor would be entitled to commission on that sale, which if the sale price were $220,000 would be in an amount of $7,400. Also, in the event that the house property were to be sold there would doubtless also be estate agent's commission and legal costs upon the sale.

7 The plaintiff (who was born on 4 May 1918 and who is presently aged almost 81 years) was the second wife of the deceased. The plaintiff herself had also previously been married and had two children by her first marriage. The plaintiffs's first husband died in 1967. The plaintiff and the deceased married on 11 October 1969. The deceased had married his first wife in 1931. Of the deceased's first marriage were born two sons William Thomas (who was born on 20 December 1937 and who is now aged 61 years) and Wayne Henry (who was born on 28 August 1950 and who is now aged 48 years). No children were born to the marriage of the plaintiff and the deceased.

8 The plaintiff brought into that marriage certain assets. The precise nature of those assets has been disputed between the parties. However, according to the plaintiff she contributed the sum of about $16,000 towards the marriage. She also at the time had a motor vehicle and various items of furniture and household effects which she brought to the matrimonial home (which had been purchased by the deceased and his first wife in about 1964).

9 That house property, at 22 Hopewood Crescent, was therefore no more than six years old at the time of the marriage of the plaintiff to the deceased and at the time when the plaintiff moved into residence.

10 Apparently the house property contains a separate flat as part of its accommodation. That flat has been rented out for some time and has been continuously producing income since the death of the deceased. At present it is producing an income of $80 a week.

11 The deceased retired from employment in 1980. He suffered a cerebral haemorrhage in 1981 and thereafter his health deteriorated. He suffered a second cerebral haemorrhage in 1984 and a third and more serious cerebral haemorrhage on 26 December 1988. Until February 1989 the plaintiff looked after and nursed the deceased in their residence. However in February 1989 the deceased was admitted to Unanderra Nursing Home. In August 1994 the Protective Commissioner was appointed manager of the estate of the deceased.

12 The plaintiff suffered an injury to her right wrist in May 1995, which eventually resulted in her receiving a compensation payment in respect of that injury in a net amount of $19,500. The plaintiff, despite undergoing surgery, still suffers from weakness in her right hand.

13 Under the terms of will of the deceased the plaintiff is given certain assets (described in clause 5) and then (by clause 6) is given a right of residence in the house property at 22 Hopewood Crescent. That right of residence is subject to the plaintiff paying all outgoings upon the property including the cost of repairs.

14 The will then provides that upon the request by the plaintiff the Public Trustee may sell the house property and do one of two things --- either hold the proceeds of the sale upon trust, as to corpus for the residuary beneficiaries, and as to income for the plaintiff; or, if requested so to do by the plaintiff, purchase a substitutionary residence for her, which the Public Trustee shall hold on the same trust as the present house property. That is, the effect of clause 6 of the will concerning the right of residence of the plaintiff is along the same lines as what is sometimes referred to as a Crisp order (an order of the nature of that made in Crisp v Burnfield Trust Company Limited, (Holland J, 18 December 1979, unreported).

15 There was evidence given from the plaintiff herself and on her behalf concerning the need for certain repairs to the house property. An affidavit of Paul James Gwynne Griffiths sets forth a statement of the repairs and renovations required to that house property, the total cost of which is $50,900.

16 The residuary beneficiaries named in the will of the deceased are the two sons of the deceased, William Thomas Gwynne and Wayne Henry Gwynne. Evidence has been placed before the Court by each of those gentlemen concerning his financial and material circumstances.

17 The plaintiff as the widow of the deceased is an eligible person within paragraph (a) of the definition of that phrase contained in section 6 (1) of the Family Provision Act. As such she has the standing to bring the present proceedings. Each of the residuary beneficiaries as a child of the deceased is also an eligible person, within paragraph (b) of that definition.

18 It is submitted on behalf of the plaintiff that the present accommodation of the plaintiff in the house property at Hopewood Crescent is not suitable or satisfactory to her present needs. It is submitted on her behalf that she is entitled to receive from the estate of the deceased an order which will give to her both security and flexibility in her accommodation and that the effect of such an order should be that she should receive that house property absolutely.

19 Because of the size of the estate and the assets which comprise the estate, any order which would give to the plaintiff the house property absolutely would need to be an order which would, in effect, give to her the entirety of the estate absolutely. I have already referred to the estimated costs of the present proceedings. The Public Trustee would be entitled, in any event, whether or not it be at the request of the plaintiff, to sell the house property in order to meet his costs of the present proceedings.

20 Further, I have already referred to an outstanding liability of the estate (being a claim by Mr William Gwynne in respect of certain unpaid medical costs and legal fees). He apparently has not been pressing for payment of those costs to the present time, but he is entitled to receive them out of any assets which might become available.

21 There is a further matter relevant to the financial situation of the estate and to the financial and material circumstances of the plaintiff. I have already averted to the fact that a separate flat in the house property has been rented out and has been producing a rent of $80 a week since the death of the deceased. That sum has been retained by the plaintiff. The house property belonged to the deceased alone. By his will he gave to the plaintiff only a right of residence in that house property. He certainly did not give her a right to any income derived from renting out part of the house property.

22 The plaintiff has no legal right to retain the amount of $80 a week which she has been receiving by way of rental since the death of her husband. Nevertheless, the Public Trustee has sought and obtained from the residuary beneficiaries their instructions that they do to not propose to seek to recover from the plaintiff the rental which has been received in respect of that flat from the death of the deceased, now almost three years ago. Neither do the beneficiaries propose to prevent the plaintiff from continuing to receive that amount of $80 a week from the rental of the flat whilst she remains in the house property. Under the strict provisions of the terms of the will that amount of $80 a week should go to the residuary beneficiaries.

23 The plaintiff's present income consists of her Age Pension of $189 a week, interest from investments of $30 a week and the rental income from the flat of $80 a week --- totalling $303 a week. Her savings, which consist essentially of the proceeds of the award which she received for compensation as a result of the injury to her wrist, total $30,000. She has no liabilities.

24 In her most recent affidavit, of 24 November 1998, the plaintiff states her weekly expenses and outgoings at a total of $275.50. However, it will be appreciated that if she were to move to some other residence her weekly income would be reduced by the amount of the rental from the flat, that is by $80, and her weekly income would thus be only $223. By the same token, however, her expenses would be reduced by an estimated amount of $20 a week, to a total of $255.50.

25 The plaintiff presently owns and drives a motor car. Nevertheless, depending upon whether she might live in the Wollongong area, she would be prepared to forgo the motor vehicle and to travel by public transport if she no longer had a motor vehicle. Her weekly expenses would then be reduced by an estimated $37. But even making those adjustments, the statement of expenses of the plaintiff would still be slightly higher than her weekly income without the rental from the flat.

26 Of claims by widows, and especially widows whose marriages have, like that of the plaintiff in the instant occasion been of a considerable duration --- here the plaintiff was married to the deceased for a period of almost 27 years ---it has been said that, to the extent that the assets of the estate enable him so to do, a husband should provide for his widow in such a way that she will be secure in her accommodation, that she will be able to live at a standard no less than that which she enjoyed during the life time of her husband and that she will have a fund to meet any contingencies.

27 In the instant case the deceased by his will clearly gave consideration to providing security of accommodation for the plaintiff. It was not his fault that the size of the estate was not larger. There is nothing beyond the house property which can provide any funds for the plaintiff to live at a standard no less than that which she enjoyed during the lifetime of her husband, or from which to meet any contingencies.

28 It has been submitted on behalf of the plaintiff that she should receive the entirety of the estate of the deceased. That is, that she have the house property absolutely. In the event that she were to receive that house property, then it would appear that it is her intention to sell it and to acquire another residence.

29 Evidence has been placed before the Court of the costs of various home units, one bedroom and two bedroom, in the Wollongong area. The prices of the one bedroom units range between about $80,000 and $112,500, whilst the prices of the two bedroom units range between $114,500 and about $150,000.

30 I have already averted to the fact that if the house property were sold the liability of the estate would need to be paid from the net proceeds of sale and, in addition, the costs of the present proceedings would also need to be paid before any amount were to become available for the purchase of another residence for the plaintiff --- be it under the terms of will, or in consequence of any order which might give to the plaintiff that property absolutely. There would certainly be sufficient funds in the estate, even after payment of all those costs and expenses, to purchase a home unit costing about $150,000 and there still would be some relatively small amount remaining. Under the terms of the will the corpus of any such remaining amount would be held for the residuary beneficiaries and the income would go to the plaintiff.

31 The plaintiff has not placed before the Court any evidence to show she would be assisted in her maintenance and in her life-style by receiving the house property absolutely rather than if the provisions of the will concerning the acquisition for her of one, or sequentially a series of, substitutionary residences were to remain in force. Were she to receive the house property absolutely, then the effect of such an order would deprive the residuary beneficiaries of any practical benefit under the terms of their father's will.

32 The Court in approaching the claims of the plaintiff must also consider the competing claims of the two residuary beneficiaries. The evidence concerning the financial and material circumstances of those beneficiaries, and in particular of William Thomas Gwynne, is by no means complete. Nevertheless, each of those beneficiaries is in a position where he would benefit considerably by having additional assets come to him from the estate of his late father.

33 Mr William Gwynne has retired and is living on his superannuation, as also is his wife. The Court has not been told the amount of the superannuation of Mr William Gwynne. However, apart from living expenses they keep their finances separate.

34 Mr Wayne Gwynne is presently unemployed. Nevertheless he hopes shortly to do some building work, at least on a part-time basis. He and his wife are living on his wife's income, which is not sufficient to support both of them.

35 It seems to me, in approaching the claim of the plaintiff, in the light of the competing claims of the two beneficiaries, that those two beneficiaries should not be deprived entirely of an interest in the estate of their late father.

36 I have reached the conclusion that the provisions of the will concerning the acquisition of the substitutionary residences for the plaintiff should be allowed to remain in force, but that upon the sale of the present residence or of any future substitutionary residence the plaintiff should be entitled to receive any difference between the sale price of the one and the purchase price of the other.

37 Thus, the plaintiff will be enabled to increase somewhat her capital funds. I do not see how awarding to the plaintiff absolutely the house property will in fact benefit her maintenance or her life-style. But an order along the lines which I have indicated will give to her some additional funds to meet contingencies.

38 (In response to the Master the parties agreed that there should be the usual order for costs)

39 (The Master requested counsel to prepare short minutes to give effect to his decision, including an order that the costs of the plaintiff on the party and party basis and the costs of the defendant on the indemnity basis be paid out of the assets of the estate.)

40 LUNCHEON ADJOURNMENT

41 (Short minutes of order handed up. The Master amended paragraph 2 of the short minutes by inserting the phrase "on the party and party basis" after "the plaintiff's costs", so that it read "the plaintiffs's costs on the party and party basis be paid out of the estate of the late William Henry Gwynne."

42 For discussion on substitutionary residence see separate transcript).

43 The formal order which I make in this matter is,

I make orders as in paragraphs 1, 2 and 3 in the Short Minutes of Order dated 22 February 1999, initialled by me and filed in Court this day.

I certify that this and the preceding

pages are a true copy of the reasons for

judgment of Master McLaughlin

Dated 22 February 1999

Associate

Mark A. Provera

LAST UPDATED: 03/03/1999