Recently, the NSW Supreme Court determined a slightly unusual coupling of issues; a construction matter as to a right to reside conditional upon payment of expenses alongside a family provision claim over 15 years out of time.
The recent case of Estate of George Roby, deceased  NSWSC 265 involved the estate of the late George Roby who passed away in 1999. In his last Will, he directed his executors to purchase two 1-2 bedroom units; one for his son, Ian, to reside in (the Jannali unit) and the other for his son David to reside in (the Woolooware unit). The case related to Ian’s interest. In addition to the two questions to be determined, the Court was also required to deal with an alleged failure to account by the original executor (who had since passed away) for rent receipts on trust property in and following 2007. Grace, Dennis’ daughter, who became the executor by representation was the plaintiff and sought a declaration as to the proper construction of the Will and an order as to whether the unit was held on trust for her or for Ian, as the second defendant in the proceedings. In addition, Ian also sought a family provision claim in the event that the outcome of the construction matter was to his detriment.
In relation to Ian’s unit, the clause in the deceased’s will read 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.
Following the deceased’s death, two units were purchased, with the unit for Ian being based in Jannali. Whilst the clauses in the deceased’s Will referred to a unit for each of Ian and David, the Court stated that it was not necessary to deal with the other unit property (paragraph 16).
Ian resided in the Jannali unit from when it was purchased until late 2006 when he relocated to Thredbo where he worked as a caretaker by a family friend until recently. The Jannali unit was leased out to an unrelated party from early 2007 with rates and other outgoings deducted from rent receipts by the managing agent as directed by the executor.
Ian had left the unit following having experienced the tragic murder-suicide of his friends he had allowed to live with him in the unit. He had left the unit with a reassurance from the executor (Dennis) that he could return to live there at a later time.
In 2016, after declining in health, Ian proposed to re-enter the Jannali unit, and was subsequently restrained from doing so by an interlocutory injunction obtained by the plaintiff.
The plaintiff was estranged from her father (the original executor) and as she turned 21 years, she demanded that he transfer the Jannali unit to her absolutely in 2012. These claims were resisted by her father. Following a lengthy dispute, the matter was brought to a head when Ian wanted to move back to Jannali and the proceedings where commenced shortly thereafter.
In determining that Ian’s interest was a mere “right to reside” and Grace (as the plaintiff) was presently entitled to the Jannali unit, the Court said:
40. 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.
41. 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.
Furthermore, in determining that Ian’s claim for family provision should be permitted, notwithstanding the time passed, the Court said:
50. 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.
52. 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.
52. 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.
In ordering Ian receive a legacy of $40,000.00, the Court said:
55. 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.
The Court invited the parties for submissions on costs, noting, however, an inclination that the parties should bear their own.
You can read the case here.