Davis v Davis (The Estate of the Late Nancy Patricia Davis) [2010] NSWSC 1148 (12 October 2010)

Last Updated: 12 October 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Davis v Davis (The Estate of the Late Nancy Patricia Davis) [2010] NSWSC 1148


JURISDICTION:
Equity Division

FILE NUMBER(S):
2009/311793

HEARING DATE(S):
30/09/ 2010

JUDGMENT DATE:
12 October 2010

PARTIES:
Steven John Davis v Sharron Michelle Davis

JUDGMENT OF:
Macready AsJ

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Mr RE Quickenden for plaintiff
Mr P Cook for defendant

SOLICITORS:
John Ryan Solicitor, Toukley for plaintiff
Proctor & Associates, Parramatta for defendant


CATCHWORDS:
Application by son left out of will. Whole estate left to a younger son. Order for provision. No matter of principle.

LEGISLATION CITED:
Family Provision Act 1982 (NSW)

CATEGORY:
Principal judgment

CASES CITED:
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Ellis v Leeder [1951] HCA 44; (1951) 82 CLR 645
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201

TEXTS CITED:


DECISION:
1. The summons filed 21/12/2009 and the proceedings thereupon be transferred to the Equity Division.
2. In lieu of the provisions of the will of the deceased in favour of Albert John Davis that instead the estate of the deceased be held as to 60% for the plaintiff and 40% for Albert John Davis.
3. I order the plaintiff’s costs on the ordinary basis and the defendant’s on the indemnity basis are to be paid or retained out of the estate of the deceased.



JUDGMENT:

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION


MACREADY AsJ

TUESDAY 12 OCTOBER 2010

2009/311793 STEVEN JOHN DAVIS V SHARRON MICHELLE DAVIS (THE ESTATE OF THE LATE NANCY PATRICIA DAVIS)

JUDGMENT

1 HIS HONOUR: This is an application under the Family Provision Act 1982 (NSW) in respect of the estate of the late Nancy Patricia Davis who died on 25 December 2008 aged 76 years. The deceased was survived by her three children, two of whom are parties in the action. Her third and youngest child was Albert Joseph Davis who has sworn an affidavit in the proceedings. Her former husband does not want to make a claim on the Estate.

The Plaintiff’s Last Will

2 The deceased made her Will on 16 August 1995 and appointed the defendant, her daughter Sharron Michelle Davis, as executor. In the event which has happened she gave the whole of her estate to her son, Albert Joseph Davis.

The Estate of the Deceased

3 The estate of the deceased presently consists of her residence at Luxford Road, Whalan valued at $210,000 and a Commonwealth Bank Account of $13,000. There are liabilities for administration expenses and funeral expenses of $12,000 leaving a net estate of $211,000. The plaintiff’s costs are estimated at $53,220 and those of the defendant at $25,575. This is a total of $78,795. This means that the net distributable estate before selling costs is in the order of $132,205.

The Family History

4 The deceased was born in 1932 and her first child, Sharron, the defendant, was born in July 1962. The plaintiff was born in November 1963 and Albert was born in June 1969.

5 The deceased and her husband separated in 1975 and in 1977 he transferred his interest in a property which they jointly owned at Wyong to the deceased. Between 1980 and 1983 the deceased and her husband recommenced cohabitation, however, they then separated. Later in life in the beginning of 1990 the deceased and her husband became good friends and he would assist her from time to time.

6 In 1982 the defendant left home and made her way in life while the defendant remained at home. In 1984 the plaintiff arranged for an extension to be built on the home of the deceased to provide him with a room. This extension was funded by a loan taken out by the deceased from the State Bank in the sum of $10,000.

7 In 1990 the plaintiff was made redundant in his employment and received some $73,000 as a redundancy payout. Although he had been living away from home for a few years, he then moved back to live with his mother.

8 The deceased, between 1988 and 1995 had returned to her occupation as a nurse on a part time basis. She received a small superannuation payment when she retired in 1995.

9 After being unemployed for some three years the plaintiff started work with BHP at Rooty Hill. In that year he started a defacto relationship with Natalie Bradford and they had a child, Paige. They also purchased a property at Mt Druitt. However, unfortunately the plaintiff and his partner separated and the Mt Druitt property was sold in 1995. The plaintiff then moved back to live with his mother. His partner looked after the child, Paige.

10 The deceased made her will on 16 August 1995.

11 In 1996 the son, Andrew, took over the mortgage which had been obtained to build the extension which was occupied by the plaintiff. At that stage there was $8,500 owing and Albert continued to pay that out, which he did in due course. He arranged to do this in conjunction with raising some funds in order to pay out a partner with whom he had had a relationship.

12 In 1997 the deceased was diagnosed with Endometrial Cancer and she also had surgery, including a hysterectomy. Both the defendant, Sharron, and the deceased’s sister in law cared for her at this time.

13 In 1998 the plaintiff married his wife, Annette, and they purchased a property in Blacktown. He then moved out of the deceased’s home. Unfortunately for the plaintiff in 1999 he became redundant at BHP and received redundancy payment of $11,000. Some months later he obtained work with the State Rail Authority as a station assistant.

14 The deceased had a number of further medical problems. In 2002 she was treated for depression and in 2004 she had a fall which led to a fracture and complications which required hospitalisation. After her return from hospital the defendant, Sharron, moved in with the deceased and looked after the deceased.

15 In 2004 the plaintiff moved to Noraville and as a result his visits to the deceased were less frequent. Over the years, between 2004 and the deceased’s death in 2008, the defendant made a number of improvements to the deceased’s home.

16 In August 2005 the deceased received an inheritance from her father’s estate. From the documents before me it was in the sum of $18,312.12.

17 In January 2006 the defendant, Sharron, purchased a property at Noraville and she and the deceased used that property as a holiday home.

18 The deceased’s health commenced to deteriorate further and in 2008 she was hospitalised in September of that year. As I have mentioned she died on 25 December 2008. Probate was granted on 15 September 2009 to the defendant and the plaintiff filed this summons within time on 18 December 2009.

Eligibility

19 The plaintiff is an eligible person.

20 The High Court has, in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208-210, set out the two stage approach:

“The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant. The first stage has been described as the "jurisdictional question". ....

....

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 Ltd [1938] AC, at p 476. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for 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 [1951] HCA 44; (1951) 82 CLR 645, 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.”

The Plaintiff’s Situation in Life

21 The plaintiff is aged 46, is married and has two children. He and his wife live in their property at Main Road, Noraville which has been estimated to have a value of between $360,000 to $375,000. They also have an investment unit property at Brisbane Street, Noraville worth $250,000 which has been rented for some five years. They have motor vehicles worth $4,000; a motor cycle worth $5,000; a boat worth $1,750; and shares worth $13,866. In addition the plaintiff has superannuation of some $46,000 and his wife has superannuation of $63,950.

22 The plaintiff has liabilities being mortgages on the property of $419,000.

23 The plaintiff suffered a back injury at work in 2005 and was on workers’ compensation. That workers’ compensation ceased in January of this year and he has not yet obtained further employment. He says he suffers from a fractured toe that will not heal, a hernia, depression, high blood pressure and chronic asthma.

24 He is surviving on the income of his wife which normally averages $1,169 per week. Recently she has lost some of her part time work but has now started to regain additional positions. Their weekly expenditure is $1,209 per week which includes assistance for the plaintiff’s stepdaughter Katherine who is presently a student living at Broadbeach in Queensland. The rental property at Brisbane Street, Noraville has a short fall in income of $40 per week. Although he has to pay child support for his child, Paige, that will cease in January next year.

25 The plaintiff has spent considerable time at home, in between relationships, since a child. It is claimed that he started to take marijuana as a child and his use of marijuana has created some disharmony with his mother. He also had a period as a heroin addict but between 1996 and 1998 he was on a methadone program. The evidence does not suggest that he has taken drugs since 1998. As I have said, however, it has caused some disharmony with his mother.

26 The plaintiff has done a number of things to assist his mother. He has, for instance, arranged the building of the additional room which he occupied at home and paid about $1,500 off the loan for that amount. There are other improvements which he has done around the property. These include a carport, sheds and a swimming pool for a period. When he lived at home he made some contributions to expenses. After he left he paid some bills for his mother but the amounts were quite minor.

27 It is also necessary to consider the situation of others having a claim on the bounty of the deceased. In this case, the defendant, Sharron, does not wish to make a claim but she has, however, given detailed evidence of the history of the family’s relationship which is of great assistance in the matter.

The Situation in Life of Albert John Davis

28 Albert is 41 years of age and is married. He and his wife own two properties. Their home in Coronation Road, Wentworth Falls which is valued at $600,000 and vacant land next door valued at $270,000. They have a mortgage over the property of $180,000 and they owe $50,000 to his wife’s parents for personal borrowings. They have two cars, Mitsubishi Lancer valued at $3,000 and Ford Fiesta valued at $18,000 which is subject to a loan of $14,000. They own household furniture and a small number of shares. They are both in good health. Any money which they would receive from the estate they would wish to use to repay loans and mortgages.

29 Albert’s superannuation is $153,000 and his wife’s superannuation is $71,456.

30 Albert works as a supervisor at One Steel and earns $1,000 net per week. His wife, Kerry, is a Public Relations Officer and earns $550 net per week. Albert had a good relationship with the deceased.

31 Albert gave evidence that his mother said to him that the reason why she was leaving the house to him was he had paid off the home and she had not had to pay a mortgage since 1996. She also indicated to him that once the Will had settled she wanted him to provide something to Steven. She did not want him to be given cash, but wanted to give him something, such as a car or motorbike worth about $35,000. His mother’s worry was that he would use it on drugs. Although he accepted his mother’s direction he indicated that it put him in a very difficult situation.

Consideration of the claim

32 The plaintiff asked for a legacy equal to 2/3rds of the value of the estate. Although counsel conceded he had a need for some income supplement, there were no details of any calculations or amounts that would be necessary to provide an appropriate supplement. The plaintiff’s situation as far as his work position, has been left in an unsatisfactory state without any detailed medical evidence to support his present lack of work. He also has of course, mortgages over his home and his investment property, both of which belong to him and his wife.

33 Albert, in his position, also has liabilities. He has need of funds for reducing his mortgages.

34 There has not been any breakdown in the relationship between the plaintiff and the deceased during her lifetime although the plaintiff has seemed to have been regarded by the deceased as a trial at times. Albert’s contributions to the estate in financial terms are somewhat greater than those of the plaintiff although the amount is not substantial.

35 In the circumstances I think an appropriate order is that the plaintiff should receive 60% of the estate and that Albert should receive 40%.

36 The summons for relief was filed in the probate proceedings. Accordingly that summons and those proceedings should be transferred to the Equity Division.

37 The orders that I make are:

1. The summons filed 21/12/2009 and the proceedings thereupon be transferred to the Equity Division.

2. In lieu of the provisions of the will of the deceased in favour of Albert John Davis that instead the estate of the deceased be held as to 60% for the plaintiff and 40% for Albert John Davis.

3. I order the plaintiff’s costs on the ordinary basis and the defendant’s on the indemnity basis are to be paid or retained out of the estate of the deceased.

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LAST UPDATED:
12 October 2010