Allen v Public Trustee; Estate of Allen [2005] NSWSC 76

New South Wales Supreme Court

CITATION : Allen v Public Trustee; Estate of Allen [2005] NSWSC 76

HEARING DATE(S) : 8 and 9 February 2005

JUDGMENT DATE : 22 February 2005

Equity Division JURISDICTION :

JUDGMENT OF : Windeyer J at 1

DECISION : Application dismissed

CATCHWORDS : SUCCESSION - FAMILY PROVISION - claim by adult son - deceased left estate to plaintiff's siblings - no close relationship - no substantial contributions to welfare - plaintiff engaged in litigation resulting in substantial liability for costs - ability to control distribution of funds in discretionary trust.

LEGISLATION CITED : Family Provision Act 1982

Anthony Richard Allen (Plaintiff) PARTIES : The Public Trustee (Defendant)

FILE NUMBER(S) : SC 4428 of 2003

Mr CK Morrissey (Plaintiff) COUNSEL : Ms P Gormley (Defendant)

Dennis & Co (Plaintiff) SOLICITORS : Mr B Maher (Defendant)

LOWER COURT JURISDICTION :

- 11 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WINDEYER J

TUESDAY 22 FEBRUARY 2005

4428/03 ANTHONY RICHARD ALLEN V THE PUBLIC TRUSTEE JUDGMENT 1 The Plaintiff, Anthony Allen (Mr Allen) seeks an order under the Family Provision Act 1982 for provision for his maintenance and advancement out of the estate of his father, Leo Francis Allen, who died on 30 October 2002, aged 83. 2 The deceased was married twice. His first wife, Betty Allen, died in 1994. He married his second wife, Joan, in 1998. She died in 2002, but before the deceased. 3 There were five children of the first marriage, Yvonne Elizabeth Allen, born 9 April 1948; Julianne Patricia Allen, born 18 March 1951, Richard Allen (the plaintiff), born 9 November 1952; Paul Allen, born 11 August 1954 and Garry Leo Allen born 26 December 1955. 4 The deceased left a will dated 24 June 1999, probate of which was granted to the Public Trustee on 28 March 2003. By that will, the deceased gave the whole of his estate in equal shares to his children, other than the plaintiff, Mr Allen. The plaintiff received no benefit. The will is in the form recently used by the Public Trustee. There is no problem about that, but I do set out clause 2.01 to show that modern forms do not necessarily coincide with clear or sensible expression: 2.01 If any child of mine does not survive me, but leaves children of their own who do and reach 21 years of age, I give to those children the share which would have gone to their parent. (This provision also applies in favour of any children which a child of mine has after my death who survive my child and reach the specified age). 5 The deceased had made at least one earlier will with the Public Trustee, that one being made in 1998. On making that will the deceased re-signed a document dated 4 April 1995, in which he explained why he had left a "lesser" share of his estate to the plaintiff. Those reasons were (a) that Mr Allen was well off financially and not in need of assistance; (b) that he had asked that no provision be made for him and (c) that "he attacked me physically at a Fathers Day celebration in 1993 causing me to telephone Dee Why and Forestville Police. The Police took out an apprehended domestic violence order but I withdrew it. I have not seen my son Anthony since, except when my wife died and at her funeral". This document was dated 4 April 1995 and was presumably relevant to a will of about that date. The deceased re-signed that document with the statement "confirm the above reasons still apply as at 25/3/98", which was apparently the date of the will immediately preceding his last will. It seems that the last will was in the same terms as the 1998 will and was executed as a result of the second marriage of the deceased. The will instruction form held by the Public Trustee, which is in evidence, includes the following note "only married recently. New wife does not want to deprive any of testator's children of their birthright except excluded son Anthony, with whom testator has broken contact after a violent argument after which testator took out an AVO". 6 The estate of the deceased at his death consisted of the following:

1. Property 26 O'Connors Road, Beacon Hill $640,000.00

2. Moneys with Westpac Banking Corporation $ 30,241.25

3. Shares in companies $ 2,134.08

4. Accommodation bond with Wesley Gardens together with other minor amounts $ 99,321.64

Total $771,696.97

The real estate has been sold. After allowing for costs and other expenses the distributable estate now amounts to approximately $825,000. 7 Mr Allen, while he has no professional qualifications, has worked in the accounting, bookkeeping and computing areas since 1971. He describes his work as that of a "long haul contractor" meaning that as a contractor he likes to take single jobs which can be finished over a period of up to about 18 months. His services are contracted through a company and his business was quite successful, at least until 1992. 8 Mr Allen married in 1983 and has three children, Amy aged 19, Jasmine aged 18 and Nicholas aged 16. 9 The plaintiff and his wife purchased a property, 13 Lower Beach Street, Balgowlah Heights in 1986. Problems with that property brought about the plaintiff's present problems. In 1992 it was discovered that the house was being undermined by water. An insurance claim was made against NRMA Insurance, but the remedial underpinning work was unsatisfactory. Legal proceedings were envisaged. 10 The plaintiff and his wife separated under the same roof in about 1995. They were divorced in 1998. There were shared residence orders, so far as the children were concerned, and in 1998 consent property adjustment orders, which required the home to be sold and the proceeds split 45% to the husband and 55% to the wife. The wife also received about $75,000 from a total of $100,000 compensation received, it seems, as a result of an inquiry into the workings of the Building Services Corporation, which was found to have failed in its obligations so far as the Allen home was concerned. 11 Since 1999 the plaintiff has been engaged in almost incessant litigation flowing from the problems with the house, which he places at the feet of solicitors, NRMA Insurance and the Building Services Corporation. This has meant that it has been difficult for him to find work as he is pre-occupied with his claims and works on them more or less full time. While it is reasonable to think that he had good cause for his concerns and anger about his treatment by the insurer, the builder engaged to do the underpinning and the Building Services Corporation, his subsequent pursuit or attempted pursuit of litigation has, it seems, been to his great detriment. He has sued, often without legal assistance, the solicitors who acted on the purchase of the Balgowlah Heights home, Manly Municipal Council, NRMA Insurance Limited, another solicitor, the New South Wales Government and others. The evidence on this is not really complete but is sufficient to show that it has consumed his time. Mr Allen said in oral evidence that some claims were dismissed by Newman AJ, whose decision was upheld on appeal. An application was subsequently made for leave to file an amended statement of claim. That application was refused by Hulme J on 17 December 2004 and the balance of the proceedings against all defendants dismissed. Mr Allen said that Hulme J said that the decisions of Newman AJ and the Court of Appeal were incorrect. That obviously could not be right but the judgment was not placed in evidence before me. There are assessed costs owing to Manly Council of $49,112. Mr Allen said that the costs payable by him as a result of the decision of Hulme J are in the order of $250,000 to $300,000. Those costs have not been assessed. He said that he hoped as a result of the decision of Hulme J to be able to sit down with the various bodies and explain the position to them and show that he had some proper claim and bring everything to an end. He said that he thought he needed legal help for this, although he did not know if he could get it. 12 After the Balgowlah Heights home was sold as a result of the marriage breakdown, the plaintiff set up a discretionary trust of which the trustee is Adsys Developments Pty Limited. Mr Allen is sole director and shareholder of that company. He is the appointor under the trust deed. The company purchased a property, 189 Balgowlah Road, Balgowlah in 1999 as an asset of the trust. The plaintiff lives there. The property would be satisfactory for his children or at least some of them, if they wished to live with him, but they do not so wish. It is worth about $800,000. 13 The trust deed is in conventional form. Mr Allen and his three children are the specified beneficiaries and the general beneficiaries are the specified beneficiaries and others whom he as appointor may nominate. The vesting date is 2079. It can be brought forward by the trustee. Income can be paid to such of the general beneficiaries as the trustee determines in such amounts as the trustee determines. The trustee has the power to determine the destination of corpus on the vesting day among the general beneficiaries or one or some of them. 14 The effect of all this is that as Mr Allen controls the trustee company he has it within his power to bring about the advancement of the vesting date and the distribution of the whole of the trust assets to himself. However, the trust at present does shelter the home from the demands of creditors. Its main disadvantage is that as the property is held by a trust it is subject to land tax. 15 Mr Allen has little in the way of assets. He has two old motor vehicles together worth about $9,000. He has other items of personal property and furniture worth about $6,000 and he has superannuation of about $4,700. He has no cash or money in the bank. As his services are contracted to the trust company he has some money owing to him but it has no money to pay him. Payments from Centrelink have ceased although the evidence is not clear as to why this happened, unless the Balgowlah home held by the trust was treated as his asset. He has outgoings of $340 per week, but how these are paid is quite unclear, although he said that he did get some help from friends. Under the licence agreement entered into with the trust company he is responsible for the outgoings on the Balgowlah property, including the land tax, but as the company owes money to him that would be offset. Nevertheless there is a liability of $8,147 for land tax and he has a liability to the Child Support Agency of $6,867, although there seems to be some dispute about that. As I have said there are the costs owing to Manly Council of $49,112, presumably plus interest, and costs of the dismissed proceedings against many defendants. 16 Mr Allen says the house will need repairs in the future. The list is really more in the nature of a wish list than anything else. He would like a new car. He would like to be able to assist his children with their HECS debts. In view of his difficulties in obtaining work he says that he needs some capital sum as a protection. 17 The plaintiff is not in very good health. He has Type 2 Diabetes. He is overweight, partly brought about by inactivity. He says that he would like to work, but as he has been so engaged with litigation this has been really difficult. It is, of course, possible that if he is able, as he says he intends to do, to sit down with his creditors and withdraw himself from all litigation without incurring further costs, that he may be able to get back to work. He is certainly of an age when he is able to work and his health problems in no way prevent him from working. 18 One further matter needs to be made clear. The order which the plaintiff seeks is that he receive one-fifth of the estate; in other words that he and his siblings take in equal shares. He is not seeking an order for more than that. On that basis and understanding it was accepted that the financial position of the four beneficiaries was not something to be taken into account as a competing interest, the difference between a one-quarter share in the estate and a one-fifth share in the estate not being such that the financial position of those four beneficiaries required consideration. I should say that this sensible concession on both sides did save considerable time at the trial. 19 The evidence shows that the deceased was a somewhat difficult man. It seems that he worked with a book company until the 1970s but did little work after that. He was on a part war pension for some time and ultimately this increased to a 90% pension. His wife was a pharmacist and was in more or less constant employment for a lot of their marriage. The deceased was an irascible and somewhat violent man. The evidence is that he assaulted his wife from time to time and that he assaulted his second wife also. He was argumentative, prone to drinking too much, and was clearly a difficult man to live with. It could not be said that Mr Allen, the plaintiff, ever had any close relationship with his father, after he left home as an adult. He did see his father reasonably regularly, although his evidence of this was a little exaggerated. The relationship, however, came to an end for some years, as a result of an incident in 1993. The deceased's first wife had been in hospital for a serious operation. She had returned home because, it seemed, the surgeons had decided that she had inoperable cancer and nothing further could be done for her. She complained to the plaintiff that her husband was in the habit of demeaning her and abusing her and if she complained of this behaviour he would ring one of his children and then hand the receiver over to his wife tempting or daring her to explain her concerns to the child at the other end of the phone. On this particular occasion, Mr Allen's wife had gone with the deceased to buy some food and Mr Allen was left with his mother, who told him the deceased often hit her and that he had recently hit her when she had come back from hospital after the operation on the head in the area of the sutures. Mr Allen expressed fright and dismay about this. He had previously taken up with his father his conduct and the telephone calls and his father had said that he would not do it again, but as a result of discussion on that night, the deceased had telephoned one of his sons and the same thing happened all over again. There was a heated argument between father and son, Mr Allen hit his father, the police were called and ultimately an assault charge was made and later the police applied to the magistrate for an apprehended violence order. The assault charge was withdrawn, but an apprehended violence order against the plaintiff was made. After that the plaintiff and his father did not see each other until the funeral of the first wife. The plaintiff says that in April 1997 his father rang him up and apologised for his conduct in 1993 and he accepted the apology. I think that it is likely this happened, but there were two wills made after that and the reasons for exclusion confirmed in 1998. There was certainly some contact with the deceased and the second wife just prior to that marriage and during that marriage, but it could never be said that the plaintiff and his father ever got back to any close relationship. Mr Allen was not asked to his father's second wedding or to the funeral of his second wife. However the circumstances which existed at the times the note was made and was later confirmed setting out the reasons for excluding the plaintiff from benefiting under the will had changed to some extent at the date of death of the deceased. The assault was serious but in the circumstances was not conduct which would preclude a claim of the plaintiff for provision, although it is conduct to be taken into account. 20 This is a difficult case. There can be no doubt that the deceased was a difficult, abrasive and sometimes aggressive man. There can equally be no doubt I think that the plaintiff himself has an aggressive nature. It is sad that his children do not wish to have much to do with him, but the evidence is that he really has little idea of their current intentions or activities, although he would like to discuss this with them. His wish to assist with HECS debts is just that. It is not a need for which provision is required. 21 As it is quite unlikely that any of his children would wish to live with him again, there is no need to retain the Balgowlah home held in the trust for that purpose. The plaintiff can arrange to sell that property and take the whole of the proceeds for his own benefit. If he wished, pursuant to the terms of clause 7 of the trust, he could arrange for a capital distribution to be made to him and he could arrange for a less expensive property to be held in the trust, again protecting that from his creditors. In other words, although there can be no doubt whatsoever, if the trust assets are left out of contention, he has been left without adequate provision for his maintenance and advancement having regard to his creditors and potential creditors, he is in a position to alleviate this to a large extent. It is fair to say that he has not suggested that he will use any moneys which he obtained from the estate to pay off his creditors, although he would have a moral and a legal obligation to do so. The suggestion appears to be that while he would no doubt use the money to pay the land tax and the debt to the Child Support Agency, he would not use it to pay other creditors but rather use it to do some repairs to the house, or to assist his children. 22 It is of course generally considered, I think rightly, that the fact that any benefit received from an estate would be used to pay off creditors does not mean that provision should not be made and the fact that the orders sought would not be sufficient to pay off all the creditors, and would still leave the possibility of bankruptcy, is not a matter which would necessarily preclude an order from being made. Nor does the fact that in many ways the plaintiff would be wise to file a debtor's petition in bankruptcy mean that he has no legitimate claim for provision. I accept that the plaintiff is tired of litigation. I accept that he would wish to bring it to an end. There is no evidence on which I could determine that he has some reasonable chance of obtaining releases from his creditors. He has a separate action not dismissed against one of his former solicitors and might expend some of any moneys which he obtained on that, if other creditors did not get in first. It is also I think significant that the plaintiff is able to work and that if he could set behind him what have become the wasted years of litigation and look forward, then it is likely that he would be able to obtain work. 23 I have come to the conclusion that the plaintiff has not established a case for provision. He had no close relationship with his father. He did not visit him in the nursing home. As a modest unit would be sufficient for his needs he is in a position to arrange more or less protected accommodation and yet pay out some or perhaps all of his creditors and get back to work. If he wishes to do so, the plaintiff can put himself into a position where his life gets back into order. 24 Although the claim fails I do not consider that the plaintiff should pay the defendant's costs. He should not get an order for his costs out of the estate, but the costs of the defendant should be paid out of the estate.

Orders

1. The summons be dismissed.

2. No order as to the plaintiff's costs.

3. Defendant's costs on the indemnity basis be paid out of the estate of the deceased.

4. Exhibits may be returned.

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