Portis v Green

The plaintiff is Paul Portis, the only surviving child of Ronald Portis (“Mr Portis”). Mr Portis died on 1 February 2016 at the age of 80. Without disrespect, I shall refer to the plaintiff and several others who feature in this judgment by their given names.

Mr Portis made his last will on 26 August 2013 (the “Will”).

The only eligible beneficiary in the estate other than Paul is Mr Portis’ former wife, Gwendoline. Mr Portis and Gwendoline separated in 1979 and were divorced some time in 2011. Gwendoline has played no part in the proceedings.

Mr Portis’ estate (the “Estate”) has been converted into cash and, after allowing for the costs of these proceedings, has a distributable value of $476,688.

By summons filed on 10 October 2016, Paul applies for provision out of the Estate under s 59 of the Succession Act 2006 (NSW) (the “Act”). Mr J E F Brown of Counsel appeared for Paul. Mr J E Armfield of Counsel appeared for the defendants.

The defendants are, respectively, the Grand Secretary and Deputy Grand Secretary for the United Grand Lodge of New South Wales and the Australian Capital Territory (the “Grand Lodge”), popularly known as the Masons. The defendants are the appointed executors of the Will.

Mr Portis had a close connection to the Masons, of which he had been a member since 1986. Most importantly for these proceedings, for five or six years before his death, Mr Portis had worked as the voluntary curator of the Museum of Freemasonry (the “Museum”), operated by the Museum of Masonry Foundation.

Under an earlier will, Mr Portis had left the entire Estate to Paul. However, after the settlement of family provision litigation involving the estate of Paul’s late brother, contact between Paul and Mr Portis ceased. Mr Portis then made the Will, by which he left the entire Estate to the Museum. Mr Portis left a detailed statement (the “Statement”) with the Will to record his reasons for the change in his testamentary intentions.

Paul’s means are very modest. His marriage has recently ended and at some time in the future he and his wife will divorce. Paul is currently living in a caravan. The Court is satisfied that adequate provision has not been made for Paul under the Will. He is not responsible for the circumstances which gave rise to the cessation of contact with Mr Portis. Balancing Paul’s legitimate claim on Mr Portis’ testamentary bounty, the relatively small size of the Estate, and the principle of freedom of testation in circumstances where Mr Portis had a real and close connection to the Museum, the Court has concluded in the exercise of its discretion under the Act that Paul should receive provision in the amount which is the greater of $286,000 or 60% of the distributable value of the Estate.

Part 3.2 of the Act deals with family provision orders. Division 1 of that Part identifies, in s 57, who are “eligible persons who may apply to the Court for a family provision order in respect of the estate of a deceased person”. Section 58(2) requires an application for a family provision order to “be made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown”.

Division 2 of Part 3.2 of the Act deals with determination of applications for family provision orders. For the purposes of these proceedings, the relevant provisions are:

In West v Mann [2013] NSWSC 1852 at [9]–[11] I explained the reasons for the approach I adopt to applications under the Act. That is how I will proceed in this case.

By reference to the language of the Act, the questions and issues which the Court must take into account are:

Other than in relation to the issue of “estrangement” (see paragraphs [54] to [65] below), the essential facts were not in dispute and the Court finds them to be as follows.

Mr Portis was born on 9 October 1935.

Mr Portis married Gwendoline in the United Kingdom and they had two sons.

Paul was born on 25 May 1962.

Paul had a younger brother, Ronnie. In about 1968 the family of four migrated to Australia.

Mr Portis and Gwendoline separated in 1979 and were divorced some time in 2011. Paul was 17 when his parents separated. While he lived with his mother, he remained in contact with Mr Portis.

In or around 1989, Paul met his future wife, Terrie. They have three children: Sheree (born 1991), Shanae (born 1992) and Teanne (born 1995).

In 1997, Mr Portis retired on medical grounds from a position he had held for many years at Liverpool District Hospital as fleet manager. He bought a house in Hazelbrook. Around the same time, Paul and Terrie were married. Mr Portis attended their wedding.

In March 1998, Ronnie had a catastrophic motorcycle accident. He suffered a traumatic brain injury and was left severely disabled.

In 1999, Paul, Terrie and their three daughters moved to a home they had purchased in Warragamba (the “Matrimonial Home”). The Matrimonial Home was registered in Terrie’s name only, although both Paul and Terrie are liable for the mortgage secured over it.

In mid-1999 Ronnie was discharged from hospital. Ronnie’s partner did not want to have anything further to do with him and it was left to Gwendoline to care for Ronnie. Ronnie eventually required 24-hour care.

In 2005, Ronnie and Gwendoline moved into a home in Hoxton Park that had been built to accommodate Ronnie’s special needs.

On 1 April 2005, Mr Portis made a will appointing Paul as his executor, trustee and sole beneficiary. At the same time Mr Portis executed a general power of attorney in favour of Paul, an appointment which, for no apparent reason, Paul never accepted.

In around 2007, Mr Portis underwent heart surgery at Prince of Wales Hospital. When he was discharged, he spent a few days recuperating at the Matrimonial Home before returning to his home in Hazelbrook.

Ronnie died on 20 December 2010. Gwendoline and Paul were the executors of Ronnie’s will. Proceedings were commenced by both Ronnie’s daughter and Gwendoline for greater provision from Ronnie’s estate. The proceedings were resolved at a mediation in 2012. The resolution allowed Gwendoline to continue to live in the property in which she had cared for Ronnie, and Ronnie’s daughter received a significant legacy. The residue of Ronnie’s estate was divided between the remaining beneficiaries including Paul, Mr Portis, Paul’s children and some of Ronnie’s friends based on various percentages specified in Ronnie’s will. Mr Portis was on notice of the claims. Mr Portis did not attend the mediation. There is a dispute which the Court does not need to resolve about whether or not Mr Portis knew of the mediation.

After the mediation, Paul had two conversations with Mr Portis in which Mr Portis made it clear that he (Mr Portis) was not happy with the outcome and felt that Paul and Gwendoline had worked together against him in the mediation. This was the last time Paul ever spoke with Mr Portis. He did telephone Mr Portis in December 2013 when Sheree gave birth to Mr Portis’ first great-grandchild. He could only leave a message and Mr Portis never returned the call.

Mr Portis made the Will on 26 August 2013. The Will appointed the defendants as his executors and trustees. After payment of all his debts, the Will gave the whole Estate to “The United Grand Lodges of New South Wales and Australian Capital Territory for the purposes of the Museum of Freemasonry Foundation Trust”.

The Will was accompanied by the Statement. Because of its importance to these proceedings, it is necessary to set out the Statement in full:

At the time of making the Will, Mr Portis was given clear advice by his solicitor of the very real risk that the Will would be challenged by Paul. Mr Portis nevertheless persisted in leaving the Estate to the Museum. Events have proven that advice to be completely correct.

Mr Portis died on 1 February 2016 at the age of 80.

Paul and Terrie separated between July 2015 and June 2016. They then reconciled. Their marriage broke down again. Paul moved out of the Matrimonial Home on 17 April 2017 (approximately two months before the hearing of these proceedings). He is currently living in a caravan.

Paul and Terrie intend to divorce. However, at the time of the hearing neither of them had taken any steps (such as, for example, instructing solicitors) to bring that about.

Mr Portis’ estate has been converted into cash. After deducting the costs of these proceedings it has a distributable value of $476,688.

Paul is in good health. At the time of the hearing he was 55 years old and employed as a plant operator at a quarry. Paul completed schooling up to year 10 and has been employed in the earth moving industry for the past 30 years. His net monthly income is just over $4,000 and he deposed that he and Terrie were together able to save approximately $400 per month after payment of their regular expenses.

In his primary affidavit, Paul said:

Paul is a motorcycle enthusiast. He is a member of the Gypsy Jokers Motorcycle Club. He attends club meetings every Tuesday night. While he rides by himself every week, Paul’s evidence was that he rode with the Club only every two to three months. He holds no official position within the club.

In relation to his own assets, Paul’s evidence was that he had assets of $206,000 and liabilities of $82,400. His largest asset is superannuation of $93,000. His largest liability is what he referred to as a “business loan” for $78,000 secured against the Matrimonial Home. The business, which involves hiring out a mini digger, has not brought him any significant income yet.

In relation to assets and liabilities which he holds jointly with Terrie, Paul’s evidence was that they had assets of $1,525,000 and liabilities of $640,700. The assets were said to include the Matrimonial Home (valued at $500,000 and securing both the business loan and a home loan), notwithstanding that a certificate of title was tendered which demonstrated that the Matrimonial Home was in Terrie’s name alone. Their joint assets included two other homes in Warragamba (valued at $550,000 and $470,000), both of which generated rental income that according to Paul did no more than offset mortgage repayments.

Terrie gave evidence that, in her own name, she had assets of $107,500 and no liabilities. Ignoring that the Matrimonial Home is registered in her name, her largest asset was superannuation of $85,000.

Paul and Terrie’s separation and impending divorce introduce a potential complication in understanding Paul’s financial position. Contrary to a suggestion faintly put in cross-examination by Mr Armfield, the Court is not satisfied that the separation and intention to divorce have been concocted for the purposes of these proceedings. Paul and Terrie’s evidence was that Terrie wished to remain in the Matrimonial Home and that otherwise they were hoping to divide their jointly held assets “on an amicable basis and without needing to resort to dealing with lawyers”.

In final submissions, neither party was prepared to venture a submission as to what Paul’s financial position might look like after any division of assets consequent on divorce. Section 59 of the Act enjoins the Court to consider the adequacy of provision “at the time when the Court is considering the application” (s 59(1)(c)) and to make any order for provision “having regard to the facts known to the Court at the time the order is made” (s 59(2)). Being satisfied that their marriage has come to an end and that they intend to divide their property, the Court in these proceedings must do the best it can to take those matters into account.

On the evidence at the time of hearing, and treating the Matrimonial Home as Terrie’s but subject to a mortgage for which both of them were liable (a position proven by the Certificate of Title and the home loan summary that were tendered in evidence), Paul has net assets in his own name of $123,600 and joint net assets of $384,300. Neither Paul nor Terrie gave evidence, in terms, that the division of their jointly held assets would be equal. For the purposes of the present exercise I will assume an equal division of those assets and equal responsibility for the mortgages, including that over the Matrimonial Home. I will also assume that it is likely that Terrie will receive the Matrimonial Home in accordance with her expressed wish. On those assumptions, Paul will receive half of the joint net assets of $384,300 (i.e. $192,000). When this is added to his own assets, this will leave him with net assets of $315,600 (including his superannuation of $93,000). Both of them recognise that their two other properties will probably need to be sold to discharge their liabilities as part of achieving a settlement, so there is every likelihood that Paul will be left without somewhere to live.

Freemasonry traces its origins to at least the seventeenth century. It is thought to have arrived in Australia either with or shortly after the arrival of the First Fleet. The Grand Lodge was established in 1888.

Mr Portis was initiated into freemasonry in July 1986. He was a member of a number of masonic lodges, was a secretary and master of lodges and was elected to and had conferred upon him various honours within freemasonry.

Some five or six years before his death, Mr Portis successfully applied for the position of voluntary curator of the Museum. The rank of Past Assistant Grand Master was conferred upon him by the Grand Lodge on 10 June 2015 for his service to the Museum. Over the time that he occupied the position of voluntary curator he was in charge of the Museum’s activities and attended his office in the Grand Lodge’s building two or three days a week. His duties included responding to inquiries and liaising generally with the public, accessioning items received by the Museum, acting as a tour guide and attending to the acknowledgement of donations.

The Museum is a registered charity and a deductible gift recipient. It is administered by the Museum of Freemasonry Foundation, which was established by a trust deed made on 1 July 2004. The objects of that Foundation are described in the trust deed:

The Museum occupies level 3 of the Sydney Masonic Memorial Centre. A large and impressive colour catalogue of the Museum’s collection was tendered as evidence in the proceedings. The Museum comprises the Museum itself, the Library and the Archives. The Museum and the Library are open to the public Monday to Friday from 8.30am to 4.30pm. The Archives may be consulted by members of the public upon application to the archivist. The Archives are frequently consulted by people researching their family history. The Museum’s principal collection comprises several thousand items. The Library contains over 4,000 volumes in the lending and research sections and the archives comprise some 2,000 cartons of records (amounting to some 4 million pages). The annual financial report for the Museum of Freemasonry Foundation for the year ended 30 June 2016 discloses a small operating surplus of about $15,000, current assets of about $81,000 and non-current assets (comprising almost completely the contents of the Museum) valued at just over $1 million. The accounts show cash assets of approximately $25,000.

The defendants’ evidence was that Mr Portis’ bequest would be applied to further the objects of the Museum in relation to one or more of the following projects:

Because Paul is Mr Portis’ son, he is an eligible person under s 57 of the Act. The summons was filed less than 12 months after Mr Portis’ death. It follows that the questions set out in sub-paragraphs (1), (2) and (4) of paragraph [13] above are all answered “yes”.

The Provision referred to in the question posed in sub-paragraph [13(5)] above is nil.

Because the impact (if any) of the estrangement between Mr Portis and Paul was debated in relation to both whether or not adequate provision had been made and what might be adequate provision, it is convenient to resolve that issue before considering those questions.

The law in relation to estrangement in family provision claims was comprehensively considered by Hallen J in Underwood v Gaudron [2014] NSWSC 1055. I gratefully adopt his Honour’s summary:

Relying on the principles to which I have just referred, Mr Brown submitted for Paul that it was evident from the Statement that the main reason why Mr Portis made no provision for Paul was Paul’s choice of a wife. He submitted that the Court has consistently held that this reason carries no weight, relying on the observations of Holland J in Kleinig v Neil (No 2) [1981] 2 NSWLR 532 at 540:

Mr Brown then submitted that, insofar as Mr Portis was moved by the settlement of the dispute over Ronnie’s estate, Paul cannot be blamed for that.

The final contention was that, on a proper reading of the Statement, the lack of a relationship between Paul and Mr Portis was the fault of Mr Portis.

Mr Armfield submitted for the defendants that throughout Mr Portis’ life his relationship with Paul was distant. Contact between them was sporadic and lacking in quality. Even if Mr Portis had caused the estrangement, then Paul was to be criticised for having made no real effort to attempt reconciliation.

For the following five reasons, the Court is satisfied that the estrangement — to the extent it can properly be called that — is not a matter which should be taken into account against Paul and his claim for provision.

First, all of the evidence points to the conclusion that, at the best of times, Mr Portis was by nature unsociable or distant. He admitted as much in the penultimate paragraph of the Statement, where he wrote “I am not blameless in not having the emotional attachment I suppose I should have with my family but I can only put that down to my early life”. Paul’s evidence was that Mr Portis “just wanted to keep himself to himself” and Terrie said that “Ron wanted to see you when Ron wanted to”.

Second, I do not accept that the five visits referred to in the Statement represent the totality of the contact between Mr Portis and Paul over many years. Those visits are listed in the context of a complaint about an alleged failure to take positive steps: to phone to inquire about his health or to offer him any assistance. Whatever may have been the position about positive steps to contact Mr Portis, I accept Paul and Terrie’s evidence that, prior to the rift caused by the settlement of the litigation in relation to Ronnie’s estate in 2012, there was contact in the form of Mr Portis attending family events such as Easter and Christmas and other meals such as barbeques at Paul and Terrie’s home. Insofar as such visits may not have been numerous or regular, the Court is satisfied that was due to Mr Portis’ own nature rather than anything adverse to be attributed to Paul (or Terrie).

Third, given that Mr Portis had made a will in 2005 leaving everything to Paul, in my view a fair reading of the Statement is that while Mr Portis may not have liked Terrie much or approved of Paul’s motorcycling activities, none of those matters was sufficient for him to exclude Paul completely from his testamentary intentions. That decision was caused by what the Statement refers to as “the final straw”, being the settlement of the litigation concerning Ronnie’s estate.

Fourth, it is not necessary for (and the evidence does not permit) the Court to reach a conclusion as to whether Mr Portis’ concerns about the settlement were right or wrong, reasonable or unreasonable. However, I accept Mr Brown’s submission that, whatever it was that upset Mr Portis about the settlement, it cannot be attributed to any conduct of Paul. Paul, as much as everybody else in the family, was caught up through no fault of their own in the consequences of the tragedy that had befallen Ronnie. Those consequences included the litigation about Ronnie’s will.

Fifth, while Paul candidly admitted that between the conversations referred to in paragraph [29] above in late 2012 or early 2013 and Mr Portis’ death in 2016 they never spoke again, I do not think Paul can be criticised for not having made assiduous efforts to maintain contact. Contact had obviously been difficult at the best of times and Paul had a lifetime experience of his father to reach the not unreasonable conclusion that there was little he could do if his father wanted to be left alone. In my view, Paul was entitled to leave the question of contact up to Mr Portis. So understood, the fact that Paul’s one attempt at contact after 2013 was to tell Mr Portis that he was now a great-grandfather seems to me to be entirely natural and reasonable.

It is next necessary to consider what is sometimes referred to as the jurisdictional question. This is set out in sub-paragraph [13(6)] above, namely whether the Court is satisfied, at the time when the Court is considering the application, that the Provision for Paul is not adequate for his proper maintenance, education or advancement in life. If that question is answered “yes”, then the Court’s discretion to make a family provision order in favour of Paul is enlivened.

In Verzar v Verzar [2014] NSWCA 45, Meagher JA (with whom Macfarlan and Barrett JJA agreed) summarised the legal principles governing this stage of the inquiry:

In addition to the preceding passage from Verzar, I also respectfully adopt what Hallen J said in Camernik v Reholc [2012] NSWSC 1537 both as to the general approach to applications for family provision and judicial observations concerning claims by adult children.

Applying the principles just set out, the Court is satisfied that the Provision is not adequate for Paul’s proper maintenance, education or advancement in life. The question posed in sub-paragraph [13(6)] above is answered “Yes”. The reasons for this conclusion are set out in the following paragraphs. I have already resolved (see paragraphs [54] - [65] above) the parties’ contentions insofar as each relied on the quality of the relationship between Paul and Mr Portis and the rift after the settlement of the litigation about Ronnie’s will.

Mr Brown submitted that Paul has limited future earning capacity, debts he will never be able to repay and grossly inadequate superannuation. Any appearance of financial security created by the two investment properties was illusory when these mortgages were taken into account. Paul’s position would only be more tenuous after any financial settlement with Terrie, especially if she retained the Matrimonial Home. In those circumstances, the absence of any provision for Paul in the Will was clearly not adequate.

Mr Armfield submitted that Paul had steady employment and probably another ten years of work ahead to secure his financial position. He and Terrie had a substantial net asset position which exceeded the total value of the Estate. Paul also had his nascent plant and equipment business. Mr Portis had a strong connection to the Masons and the Museum and was entitled to feel, as he had said in the Statement, that “Masonry has given me much more than my family have ever given me”.

Insofar as the impending divorce and financial settlement were concerned, Mr Armfield accepted that it was difficult to come to any conclusion about Paul’s future financial position. However, he submitted a useful way of testing the matter was to create a notional matrimonial asset pool comprising Paul’s net assets ($123,600), Terrie’s net assets excluding the Matrimonial Home ($107,500) and their joint net assets including the Matrimonial Home but after the sale of the two investment properties ($849,000 — this figure came from an updating affidavit filed by Paul). This created a pool which if divided equally between Paul and Terrie meant each would receive $540,050. Receipt of that amount coupled with his future income earning potential meant that it was not inadequate for there to be no provision for Paul in the Will.

But for the impending divorce and property settlement there may have been some force in a submission that the jurisdictional threshold had not been met. However, in my view, whether the outcome posited in either paragraphs [45] or [72] above is considered, it is clear that the Will does not make adequate provision for Paul. Either outcome leaves him with no home and limited superannuation, whether or not Terrie retains the Matrimonial Home. He is left with little to cope with the possibility of ill health and the vicissitudes of life.

It is trite to observe that it is not the task of the Court to rewrite the Will in a way that it thinks is fair. The proper application of the Act does not permit a process of reasoning along the lines that Mr Portis’ reasons for disinheriting Paul in favour of the Museum were unfair or misconceived and, therefore, the Will should be ignored and the effect of the previous will reinstated. In fairness to both parties, neither of their Counsel suggested that the task was to be approached in the way I have just described.

As is often the case, the parties repeated their submissions on the jurisdictional question and their respective submissions on how the relationship (or lack thereof) between Paul and Mr Portis was to be characterised.

Mr Brown submitted that a provision of anything from half to the whole of the Estate would be “within the range” by reference to those cases where family members have been completely disinherited in favour of a charity. He properly acknowledged that this was a case where the testator had a real and significant connection with the charity to which he had bequeathed the Estate. It was to be contrasted with cases where the charity appears to have been selected at random or where there was only minimal connection between the testator and the charity. An example of the latter category is Sanders v Valtas [1999] NSWSC 1216, where the testatrix left her estate to the First Church of Christ Scientist. Macready M (as his Honour then was) said (at [35]) that while the deceased was obviously committed to her religion, “There is no evidence of contact with a particular church nor evidence led by the defendant of the deceased’s association or importantly assistance from the church during her lifetime”.

Mr Armfield submitted this was a case where either no provision should be made or only a small provision should be allowed in favour of Paul. He pointed to the size of the estate, Paul’s future capacity to earn income and the strength of the connection between Mr Portis and the Museum.

The outcome in this case is dictated by balancing these factors in the context of what is a small estate:

Having regard to the matters referred to in sub-paragraphs [78](1), (2) and (4) above, contemporary accepted community standards would require some provision being made for Paul. However, the matters referred to in sub-paragraphs [78](3), (5) and (6) above and those same community standards support the conclusion that Mr Portis’ wishes should be maintained by some part of the Estate going to the Museum.

Returning to Mr Brown’s submission that a provision of somewhere between half and the whole Estate going to Paul would be “within the range”, for the reasons given in the preceding paragraph I do not accept this is a case where the Museum should receive nothing.

Nor, for the same reasons do I think it would be proper provision for the purposes of s 59(2) of the Act for Paul to receive only half the Estate. In my view, balancing the factors set out above, proper provision is 60% of the distributable Estate. This is an amount of approximately $286,000.

I am satisfied that this is a proper provision because taking the slightly less favourable (for Paul) outcome of the divorce set out in paragraph [45] above, provision of at least $286,000 will leave Paul with a net sum (i.e. debt free) of $508,600 and $93,000 in superannuation. Based on the evidence of the value of the three properties in this case, a home can be bought in the Warragamba area for around $500,000. If he wishes, Paul could purchase a home and, over the balance of his working life, increase his superannuation and otherwise make financial provision for his retirement. In retirement he would have the security of owning his home and having some superannuation and savings.

It follows that the Proposed Provision for the purposes of the question in paragraph [13(8)] above is 60% of the Estate. There is no discretionary reason why an order should not be made (see the question in paragraph [13(9)] above). For consistency with the Court’s reasons in the preceding paragraph, and recognising that the costs estimates which have been provided are estimates, the order for provision should be for that amount which represents the greater of $286,000 or 60% of the Estate.

The Court will give the parties an opportunity to bring in short minutes to give effect to these reasons and to make submissions as to costs.