Barclay v Reynolds
[2015] VSC 447
•31 August 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST
| No SCI 2013 03785 | |
| IN THE MATTER of Part IV of the Administration and Probate Act 1958 and IN THE MATTER of the Will and Estate of CLIFFORD STANLEY BARCLAY (Deceased) | |
| PETER CLIFFORD BARCLAY | Plaintiff |
| v | |
| SAMANTHA ANN REYNOLDS (who is sued as the Executrix of the Estate of the above named deceased) And | First Defendant |
| DAVID CAMPBELL BARCLAY by his Litigation Guardian PETER CLIFFORD FALCONER | Second Defendant |
| No SCI 2015 01067 | |
| IN THE MATTER of Part IV of the Administration and Probate Act 1958 and IN THE MATTER of the Will and Estate of CLIFFORD STANLEY BARCLAY (Deceased) | |
| DAVID CAMPBELL BARCLAY by his Litigation Guardian PETER CLIFFORD FALCONER | Plaintiff |
| V | |
| SAMANTHA ANN REYNOLDS (who is sued as the Executrix of the Estate of the above named deceased and | First Defendant |
| PETER CLIFFORD BARCLAY | Second Defendant |
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JUDGE: | ZAMMIT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 August 2015 |
DATE OF JUDGMENT: | 31 August 2015 |
CASE MAY BE CITED AS: | Barclay v Reynolds |
MEDIUM NEUTRAL CITATION: | [2015] VSC 447 |
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TESTATOR’S FAMILY MAINTENANCE – Application by adult able-bodied son – Jurisdictional requirements of Part IV of Administration and Probate Act 1958 (Vic), s 91 – Whether testator had responsibility to provide for claimant’s proper maintenance and support – Failure to make adequate provision.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Edmunds | Lou Castellano |
| For the First Defendant For the Second Defendant | Mr J O’Bryan Mr J Isles | Bowman & Knox Lawyers Peter Falconer & Assoc. |
HER HONOUR:
Introduction
Peter Clifford Barclay and David Campbell Barclay are brothers. They make claims for further provision from the estate of their father, Clifford Stanley Barclay (‘the deceased’) pursuant to Part IV of the Administration and Probate Act1958 (‘the Act’).In order to avoid confusion I will refer to the parties by their first names.
The deceased died on 27 December 2012. Grant of probate of the deceased’s last Will dated 19 August 2004 was made in favour of Samantha Ann Reynolds, Executrix, on 16 May 2013 (‘the Will’).
In the Will, the deceased left specific bequeaths of $5,000 to each of his grandchildren who survived him and $1,000 to each of his great-grandchildren who survived him. The deceased also made provision for Peter in his Will by leaving him his motor vehicle and a one third share of the residuary estate.
Peter is the older brother and is 67 years old. David was born on 10 August 1954 and resides at the Geelong Grove Retirement Village at 17/50 Barwarre Road, Grovedale in the State of Victoria. David was born with an intellectual disability.
Peter relies on the following documents in support of his claim:
(a)Affidavits of Peter Barclay dated 19 July 2013, 19 August 2014, 18 February 2015 and 17 July 2015; and
(b) Affidavit of Diane Edith Barclay sworn 17 July 2015.
Peter’s claim is opposed by David who has a Litigation Guardian, Peter Clifford Falconer. David relies on the following documents in opposition:
(a) Affidavits of Peter Clifford Falconer dated 29 October 2014 and 12 February 2015.
(b)Affidavits of Samantha Reynolds dated 8 April 2014, 12 March 2015 and 11 August 2015.
David also makes a claim for further provision under the deceased’s estate pursuant to Part IV of the Act. David was originally joined as a second defendant in Peter’s claim and then subsequently commenced proceedings by way of an Originating Motion on 20 February 2015. In support of that claim, David relies upon the following documents:
(a) Affidavit of Peter Clifford Falconer sworn 6 March 2015;
(b)Affidavit of Samantha Ann Reynolds as to the current financial position of the estate sworn 11 August 2015; and
The parties also rely upon written submissions in both proceedings.
David seeks further provision out of the deceased’s estate in addition to his entitlement under the deceased’s Will by way of an order:
(a) in the amount of $41,579.37 for David’s costs (payable out of the share of the estate due to the defendants) to be paid to the plaintiff’s solicitors Peter Falconer & Associates; and
(b) the estate otherwise be administered according to law save for the administration of ‘David’s Fund’ established under clause 9 of the last Will of the deceased to be transferred to the Senior Master and administered by him for David absolutely and on the death of David and on payment of the expenses of, and incidental to, his funeral the Senior Master pay the balance of the fund held by him, for him, and any interest thereon (subject to a retention for the payment of income or any other tax thereon) to Peter Barclay (or his estate, if Peter Barclay pre-deceases David Barclay).
The relief sought by David is not opposed.
The inventory of the estate establishes that the gross estate as at 17 August 2015 is valued at $510,066.33.[1]
[1]Affidavit of Samantha Ann Reynolds sworn 17 August 2015.
Peter seeks further provision in the sum of $340,000 from the estate.[2]
[2]Transcript 19 August 2015 (‘T’), 114, LL 1-3.
The evidence
Peter and David have always had and still have a strong and caring relationship. This thankfully has not changed since the issuing of these proceedings.
Due to David’s intellectual disability he lived with his parents all his life at the family home until 1995 when their parents sold the family home and moved into the Geelong Grove Retirement Village. David also moved with his parents. Following his mother’s death in 2006, David lived with his father, the deceased, until late-2009 when the deceased’s dementia required him to move into a high dependency nursing home at Balmoral Grove, Grovedale, where he lived until his death. Peter and Samantha Reynolds were the deceased’s power of attorney. Peter and his wife, Diane Barclay, hold a power of attorney on behalf of David.
Pursuant to the deceased’s power of attorney, Peter and Ms Reynolds sold the deceased’s unit No 94 Geelong Grove Retirement Village for the sum of $180,000. Peter and Diane, using David’s power of attorney, purchased on David’s behalf the lease of unit No 17 at the Geelong Grove Retirement Village for the sum of $240,000. Peter and Diane used the proceeds of the sale of the deceased’s unit, $180,000, and a further $60,000 from the deceased’s investment fund to affect the settlement on David’s behalf.
After the deceased moved out of his unit at the Geelong Grove Retirement Village, David moved into Karingal Respite for approximately two weeks while waiting for a flat to be available for him. David moved into a flat at Karingal where he stayed for some four months. During this time Peter and Diane discussed options for David with Karingal’s management including relocating David to live in a self-contained unit or flat in the Grovedale area. It was suggested by Karingal that David could rent a unit in the Belmont/Grovedale area.
Peter and Diane expressed concerns that David may end up in a unit with neighbours who were not of good character and who may harbour a grudge against David and may treat him badly because of his intellectual disability. They considered David could obtain his own unit at the Geelong Grove Retirement Village as he knew the residents and was comfortable in that environment. At the time, Peter and Diane thought that the purchase of a unit by David using his own funds would deplete his savings. On the other hand, it was possible to utilise the sale proceeds of the deceased’s unit and some of the deceased’s savings on the basis that these monies would still form part of the deceased’s estate.
Peter sent an email to Samantha Reynolds (‘Ms Reynolds’) on 3 December 2009 stating: ‘David could possibly purchase a unit with his own investments, but would nearly clean him out. (He may need a return from these to supplement his weekly income!) or could Dad buy it, using the money from the sale of his unit and David rent it from him, perhaps through a trust fund, or could David claim some of Dad’s inheritance.’[3]
[3]Affidavit of Peter Clifford Barclay sworn 19 August 2014, 3.
With regard to Peter’s 3 December 2009 email, Ms Reynolds understood it to contain a number of alternative scenarios including: David purchasing the unit; or Clifford’s funds being used to purchase the unit for David to rent; or David claiming some of the inheritance, as an inter-vivos gift, to purchase a unit in his name.[4]
[4]Affidavit of Samantha Ann Reynolds sworn 12 March 2015, 2.
On 21 December 2009, Ms Reynolds sent an email stating: ‘I think all the ideas are good ones……I also think you would be well within your rights to purchase the Unit from your father’s funds and, as you say, when your father passes David could take the ownership of the Unit as part of his inheritance… If there is any paperwork I can assist with do not hesitate to contact me.’[5]
[5]Affidavit of Peter Clifford Barclay sworn 19 August 2014, 4.
Ms Reynolds recalls having a number of general conversations with Peter in early 2010 regarding Peter and Diane’s desire to see David in suitable and secure accommodation.[6]
[6]Affidavit of Samantha Ann Reynolds sworn 12 March 2015, 2.
Ms Reynolds deposed that she: ‘explained to the Plaintiff that any gift during lifetime would not remain in his father’s estate for division upon his father’s death and would technically be in the legal ownership of David. We did discuss that in the future if the Plaintiff made a legal claim against the Deceased’s estate then gifts in lifetime is a matter that Courts may consider in adjusting entitlements under a Will. Further, I understood that the Plaintiff took some comfort from the fact that he was the primary beneficiary of David’s Will. I did not give an assurance that the “unit for David would be included in the inheritance to be divided between David and myself”.’[7]
[7]Ibid, 3.
Ms Reynolds states that she had no involvement in the ultimate decision to purchase the Unit nor the decision to use Clifford’s funds to enable the purchase.[8] Ms Reynolds states that the discussion of the gift not being part of the Estate took place after the purchase of the Unit.[9]
[8]Ibid.
[9]T 82 LL 11-19.
In terms of the source of funds to purchase David’s unit, Ms Reynolds stated: ‘There was no direct connection between those being paid and the purchase because at that point he had several options for purchase and I had no idea what he was deciding’[10] and was not aware they were coming from Clifford’s funds.[11]
[10]T 79 LL 11-14.
[11]T 79, LL 19-24.
Peter remembers that he had a number of oral discussions with Ms Reynolds, however he recalls that Ms Reynolds ‘acknowledged the $180,000.00 from my father’s sale of his unit and the additional cash of $60,000.00 from his investments which would be used to purchase the unit for David would be included in the inheritance to be divided between David and myself and she assured me it would be’.[12]
[12]Affidavit of Peter Clifford Barclay sworn 19 August 2014, 4.
On 21 July 2014, Peter recalls that he had a phone conversation with Samantha where he said: ‘I thought the original arrangement was that um the unit was going to be included in the, ah estate, and she agreed with me.’[13] Peter believes Ms Reynolds’ response was ‘Leave it with me I will fix it.’[14] By contrast, Ms Reynolds didn’t recall the 21 July 2014 telephone conversation.[15] She is not aware of any file note of a conversation with Peter on 21 July 2014[16] and does not recall saying ‘Leave it to me, I'll fix it.’[17]
[13]T 23 LL 30-31, 24 L 1.
[14]T 24 LL 4-5.
[15]T 73 LL 22-31; 74 LL 1-6.
[16]T 77 LL 1-19.
[17]T 77 LL 20-22.
On 24 July 2014, Peter visited the offices of Bowman & Knox and spoke with Ms Reynolds and said they had the following exchange: ‘I said how did things go and she told me um I've been told it's none of my business and I was to butt out.’[18] To which Peter responded: ‘I said oh my god ah this is serious, this has become or become very serious. I think that was pretty well what I said.’[19] Whereas in evidence, Ms Reynolds stated that her recollection of the conversation was that ‘Mr Barclay asked me about the estate and I said to him that I wasn't able to talk to him, since he was represented elsewhere.’[20] Ms Reynolds does not recall using the phrase ‘I've been told to butt out’ in her conversation with Peter on 24 July 2014.[21]
[18]T 23 LL 21-23.
[19]T 24 LL 24-26.
[20]T 74 LL 7-15.
[21]T 76.
Peter believes that a verbal agreement exists between him and Ms Reynolds that his brother’s unit would form part of the Estate based on the December 2009 emails and the July 2014 conversations.[22] Peter was under the impression that Ms Reynolds knew where the additional funds to purchase David’s unit were coming from ($60,000), however in the letter from Bowman & Knox to Peter and Diane dated 12 April 2010,[23] Ms Reynolds indicates she did not know.[24] With regard to the source of the money to purchase the Unit, Ms Reynolds states that they did not discuss where the money was coming from.[25]
[22]T 51.
[23]Affidavit of Samantha Ann Reynolds sworn 12 March 2015 and Exhibit SAR1.
[24]T 63, 64, 65 LL 1-11.
[25]T 74, LL 16-29.
At the time Peter completed his first affidavit, sworn 19 July 2013, it was his belief, in adjusting the deceased’s estate so as to provide for his claim for maintenance and support, that the unit would be taken into account.[26]
[26]Affidavit of Peter Clifford Barclay sworn 19 July 2013, 7.
Peter believed on the basis of the emails that the funds would in some way be notionally considered as forming part of the deceased’s estate. Ms Reynolds, as indicated by her letter dated 12 April 2010 to Peter and Diane, suggests that she was not aware of where the monies for David’s unit would come from. Ms Reynolds does agree that she had conversations with Peter and Diane in early 2010 in relation to David’s accommodation. Ms Reynolds says that: ‘I explained to the plaintiff that any gift during lifetime would not remain in his father's estate for division upon his father's death and would technically be in the legal ownership of David. We did discuss that in the future, if the plaintiff made a legal claim against the deceased's estate, then gifts in lifetime is a matter that courts may consider in adjusting entitlements under a will’[27]. Ms Reynolds believes this discussion occurred after the purchase of the unit.[28]
[27]Affidavit of Samantha Ann Reynolds sworn 12 March 2015, 3.
[28]T 75, LL 2-23.
I find both Peter and Ms Reynolds to be credible witnesses. It was open given the emails, letters and discussions between them that they came to a different understanding and conclusion about how the monies used from the deceased to purchase David’s unit lease were to be considered for the purpose of the deceased’s estate. Ultimately, the monies were used and as such no longer form part of the estate. Peter has not asserted any cause of action beyond the current application under Part IV of the Act.
Current circumstances
Peter and Diane are actively involved in David’s life. Peter monitors David’s finances, attends to payment of his bills, liaises with Centrelink and is involved in monitoring David’s daily routine of showering and oral hygiene. Peter and Diane attend the Retirement Village Happy Hour with David on Fridays and they attend to necessary appointments. Peter envisages that he will be assisting David as required until he is no longer able to do so.
David works four days a week in a sheltered workshop. Over the years he has been able to accumulate funds and assets comprising:
(i) 17/50 Barwarre Road, Grovedale, approximately $290,000;
(ii) furniture and personal effects, approximately $10,000;
(iii) model car collection, approximately $5,000;
(iv) Bendigo Bank account number 106218761 (as at 2 June 2015 $3,490.04);
(v) Bendigo Bank account number 149399685 (as at 7 May 2015 $13,934.57);
(vi) Bendigo Bank account number 129724308 (as at 1 April 2015 $16,181.82);
(vii) Bendigo Bank account number 106218845 (as at 22 March 2015 $55,626.77);
(viii) MLC Navigator Investment Plan account number 238833200004 (as at 31 March 2015 $153,928.10);
(ix) MLC Navigator Retirement Plan Superannuation account number 88022300005 (as at 13 April 2015 $376,434.05); and
(x) Australian Super Member No. 711891751 (as at 31 December 2014 $1,186.84).
Total: $925,782.19[29]
[29]Affidavit of Peter Clifford Barclay sworn 17 July 2015, 1-2.
David is physically fit and well. He is on medication for hypertension and elevated cholesterol with good control of his care needs.[30] Dr Bradshaw, David’s treating practitioner, considers that due to David’s intellectual disability, he will need lifelong assistance at the level he is now receiving and his requirements may well increase in the future as he gets older.[31] Peter Falconer deposes that in the event that David’s future medical support needs are greater than that which are being currently provided to him at the Retirement Village, he is unable to foreshadow what his future needs and requirements, including medical care, may be.[32]
[30]Report of Dr Adam Bradshaw, Exhibit PCF6, Affidavit of Peter Clifford Falconer sworn 12 February 2015.
[31]Report of Dr Adam Bradshaw, Exhibit PCF6, Affidavit of Peter Clifford Falconer sworn 12 February 2015.
[32]Ibid [10].
Due to the commencement of the National Disability Insurance Scheme (‘NDIS’) that started in Geelong, David is also gaining additional benefits of funding under that scheme, which included funding for an annual holiday accompanied by a carer.[33] The last two years have involved trips to Sydney and the Gold Coast.[34]
[33]Affidavit of Peter Clifford Barclay sworn 17 July 2015, 5.
[34]Ibid.
In 2007 Peter obtained employment as a bus driver. He retired from employment as a bus driver in mid-March 2013, however he is currently employed on a casual basis some two or three days a week. Peter’s current employment as a bus driver is irregular, some weeks he has no work and when work is offered he receives on average between $500 to $1,100 per week.[35] Peter also receives a carer’s allowance of approximately $115 per fortnight for caring for Diane.[36]
[35]Ibid, 5-6.
[36]Ibid, 6.
Diane Barclay is 65 years old. In 2003 Diane was diagnosed with Primary Progressive Multiple Sclerosis (PPMS). She ceased her employment during 2011 due to her condition and now receives a disability pension of $650 per fortnight which is also reduced proportionally to Peter’s bus driving income.[37] In addition she receives $80 per fortnight mobility allowance to pay for her travel to Geelong where she undertakes eight hours of voluntary work a week at Geelong Animal Welfare.[38]
[37]Affidavit of Peter Clifford Barclay sworn 17 July 2015, 4.
[38]Affidavit of Peter Clifford Barclay sworn 19 July 2013, 6.
Peter’s income from the Centrelink Aged Pension of $610 per fortnight is reduced proportionally by income from his casual bus driving. His evidence is that he may get as little as $200 per fortnight from the pension.[39]
[39]Affidavit of Peter Clifford Barclay sworn 17 July 2015, 4.
Diane and Peter recently purchased a caravan so that they could have a holiday in Australia which they want to complete before Diane’s condition prevents her from doing so.[40] The caravan cost approximately $32,000.
[40]Affidavit of Peter Clifford Barclay sworn 19 August 2014, 5.
Peter and Diane’s estimated living costs total $44,674 per annum which includes Viridian loan repayments, daily expenses, vehicle costs, medical costs, insurance and veterinary fees. Peter estimates on a weekly basis the expenditure is equivalent to $850.11 per week.[41]
[41]Affidavit of Peter Clifford Barclay sworn 17 July 2015, 4.
Peter and Diane’s home at 17 Patonga Crescent, Grovedale, is approximately 43 years old and needs ‘a lot of work and money to be spent on it’. Diane has recently received funding for bathroom and toilet renovations under the NDIS. Peter’s evidence is that the work which still needs to be done around the home includes repainting, kitchen renovations of a 43 year old kitchen, in particular to have cupboards which Diane can access which do not require her to bend low. Peter estimates the cost of these works to be approximately $25,000 to $30,000. Peter expects to also have to fund a scooter and motorised wheelchair for Diane and necessary aids and equipment due to her PPMS at an approximate cost of $15,000.
Peter deposes:
My main long term future concern is in relation to the inevitable deterioration of Diane’s PPMS condition, which I understand will end up with Diane being unable to care for herself and the need to enter a nursing home for high level care. The only way I can see this can be funded is either to draw down further on my existing superannuation, or to sell our family home, or a combination of both. I have made enquiries with Balmoral Aged Care and tried to undertake costing of placing Diane in a home in the future. A figure of $350,000 to $420,000 could be payable for room only plus other ongoing costs. Different funding options are available to cover these costs which includes taking 85% of Diane’s pension; means testing, to put it simply and to quote the manager of Balmoral, it is ‘user pays’. Our financial situation at the time of Diane’s admission will determine the cost of her care.[42]
[42]Affidavit of Peter Clifford Barclay sworn 17 July 2015, 6.
Peter deposes in relation to his health that he suffers from being overweight and from a respiratory condition. He said that he was scheduled to undergo a laparoscopic and sleeve gastrectomy procedure on 18 October 2014 however had to cancel that procedure as he could not afford the hospital and other costs. Peter says that he suffers from depression and for the last 12 months has been attending a psychologist.[43]
[43]Affidavit of Peter Clifford Barclay sworn 18 February 2015, 4.
The law
Jurisdiction to make an order under Part IV of the Act is dependent upon being satisfied that the deceased had the responsibility to make provision for Peter and upon being satisfied that the Will does not make adequate provision for Peter’s proper maintenance and support. Each condition requires consideration of the question of what is the provision that a wise and just father would have thought is his moral duty to make in the interest of his son, had he been fully aware of all the relevant circumstances? That question is to be answered as at the date of death according to the standards of a wise and just testator or, according to the standards of a fair and reasonable person in the community. In answering the question a court is bound to have regard to factors set out in s 91(4)(e)-(o), as well as to any other matter that the court considers relevant (s 91(4)(p)).
The judgment made at the date of death is on the basis of facts, whether known or unknown to the testator, and all the eventualities that might, at the date, reasonably have been foreseen by a testator who knew the facts. At the threshold stage, does Peter have a case under s 91(1) that the deceased, his father, had responsibility to make further provision for his maintenance and support?
Once jurisdiction to make an order under Part IV of the Act is satisfied, that is, that the deceased had a responsibility to make provision for the plaintiff, the plaintiff is obliged to show that the testator failed by his or her will to make adequate provision for his maintenance and support.
The question of what was adequate and proper was dealt with by Dixon CJ in Pontifical Society for Propagation of Faith v Scales.[44] It has often been pointed out that very important words in the statute are ‘adequate provision for the proper maintenance and support’ and that each of these words must be given a value. ‘Adequate’ and ‘proper’ in particular must be considered as words which must always be relative. The ‘proper’ maintenance and support of a son claiming a statutory provision must be relative to his age, sex, condition and mode of life and situation generally. What is ‘adequate’ must be relative not only to his needs but to his capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, the extent and character of the estate and other demands upon it, and also what the testator regarded as superior claims or preferable disposition.
[44][1962] HCA 19; (1962) 107 CLR 9 [6].
The words ‘proper maintenance and support’ must be treated as flexible concepts given meaning in the context of each case and the particular facts and circumstances. However the words are not rigid concepts and cannot be pressed beyond their fair meaning. The court is given not only a discretion as to the nature of the amount of the provision it directs but, what is even more important, a discretion as to making a provision at all. All authorities agree that it was never meant that the court should rewrite the will of a testator. In determining what is adequate and proper, the court’s approach to quantum of provision is careful and conservative.[45]
[45]McKenzie v Topp [2004] VSC 90 [63].
Further, in order to succeed in an application under Part IV of the Act, there must be a need shown by the plaintiff. This is a relative concept and one which has to be considered in the circumstances of each case. While the concept of need is relative, it must be shown in order to establish a claim. It should be noted that it is not confined only to economic needs. A plaintiff does not need to show necessitous circumstances and, where circumstances permit, a testator should go beyond merely providing for the bare necessities of life.[46]
[46]Blore v Lang [1960] HCA 73; (1960) 104 CLR 124, 135 (Fullagar and Menzies JJ).
There is no principle that a testator treat his children equally.[47] What the court must do in making orders for provision is have regard to the factors set out in 91(4)(e)-(p).
[47]Ibid, 135; Anderson v Teboneras [1990] VicRp 47; [1990] VR 527, 534.
I turn now to these factors.
Section 91(4)
Section 91(4)(e) (any family or other relationship between the deceased person and the applicant, including the nature of the relationship and where relevant, the length of the relationship)
Peter had a good relationship with each of his parents and with David. Peter continues to have a close and supportive relationship with David and his evidence is that he will continue to support David as long as he is able to do so.
Peter assisted his father when he moved into the Retirement Village and provided active support to ensure that his father was transferred to an adequate and proper facility once his dementia had increased. There is evidence that Peter’s relationship with the deceased and David was strong and loving.
Section 94(4)(f) (any obligations or responsibilities of the deceased to the applicant, any other applicant and the beneficiaries)
The deceased did not owe any special obligation to Peter other than as a father who has monies to distribute in his estate and has before him a loving son who through the exigencies of life is faced with the prospect of living off an old age pension, perhaps a small amount of superannuation and caring for his wife who has a serious medical condition which will inevitably mean that she will require care in a nursing home type facility in the future.
David lived with his mother and father and then following his mother’s death, just his father, until his father went into a higher level care nursing home. Due to David’s intellectual disability he was dependent on his parents for the entirety of their lives.
The deceased recognised his responsibility to Peter, it is the quantum of that provision that is ultimately the subject of this proceeding.
Section 91(4)(g) (the size and nature of the estate of the deceased person and any charges/liabilities to which the estate is subject)
The gross value of the estate as at 11 August 2015 was $510,066.33, exclusive of legal costs.[48]
Section 91(4)(h) (the financial resources (including earning capacity) and the financial needs of the applicant, or any other applicant and/or beneficiary)
[48]Affidavit of Samantha Ann Reynolds sworn 17 August 2015.
Peter’s financial position as stated in his affidavit sworn 17 July 2015 totals $506,275.00. The family home is jointly owned with Diane.
Peter receives a Centrelink aged pension of $610 per fortnight and works on a casual basis as a bus driver. Peter’s evidence was that he was able to drive the bus, the arrangement was on a casual basis and that the bus company would call him when they needed him.
Peter receives a carer’s allowance of $115 per fortnight for caring for Diane. Diane receives a disability pension of $650 per fortnight, plus a travel allowance of $80 per fortnight. Diane also receives some assistance from the NDIS and recently had aids and equipment in the bathroom and toilet funded. Diane has no superannuation. As mentioned, Peter recently purchased a caravan with a value of $32,000. In his evidence, he explained that he drew down from his Viridian loan in order to purchase the caravan.
David’s investment portfolio and his assets, including his unit, total $925,782.19. He works four days per week in a sheltered workshop, receives Centrelink benefits and benefits under the NDIS, including provision of a paid carer.[49]
[49]Affidavit of Peter Clifford Barclay sworn 17 July 2015.
Peter manages David’s investments under his power of attorney and in consultation with an investment adviser. David’s investments have increased by approximately $90,500 between July 2013 and February 2015.
The specific bequests to the grandchildren and great grandchildren are not affected by this proceeding.
The value of David’s unit is estimated at approximately $290,000. This is based on a near identical unit in the retirement village having sold earlier this year for this sum. If David sells the unit, there would be a fee deducted by the retirement village owner of approximately $60,000 relating to refurbishment costs and management fees. However, when giving evidence, Peter indicated it may be more accurate to say the value is $265,000.[50]
[50]T 27, LL 10-19.
Peter submits that he has a financial need in light of his limited assets and, in particular, the need to provide for Diane’s PPMS condition. Having made inquiries with the Balmoral Aged Care facility, it is estimated that a sum in the range of $350,000 to $420,000 could be payable for a room for Diane in the future.
Section 91(4)(i) any physical, mental or intellectual disability of any plaintiff or any beneficiary of the estate
Peter’s evidence is that he is obese and recently diagnosed as pre-diabetic. He suffers from sleep apnoea and a respiratory condition and stress.
While there was limited medical evidence before the Court, an Impaired Glucose Tolerance and Osteoarthritis form was admitted into evidence, along with a GP Management Plan.[51] The documents provides some support for Peter’s assertions in relation to his physical health. It is not clear what respiratory condition Peter suffers from and there is no evidence in support of it.
[51]Exhibit P3.
David will suffer from his intellectual disability throughout his life. There is no suggestion that his intellectual disability has worsened or that he is currently enduring any adverse physical medical condition.
Section 91(4)(j) (the age of the plaintiff)
Peter is currently aged 67 years.
Section 91(4)(k) any contribution (not for adequate consideration) of the plaintiff to the building up of the estate or to the welfare of the deceased or the family of the deceased
Peter assisted the deceased when his dementia increased by arranging and effecting the sale of his father’s unit at the retirement village. Over the years as the deceased’s dementia increased, Peter and Diane would regularly check on his welfare and assist where required. Peter’s evidence was that due to his work commitments, it usually fell to Diane to take the deceased to his various medical appointments with his treating doctor and any specialists as well as assist him with his shopping.
Peter and Diane contribute towards David’s care and continue to do so.
Section 91(4)(l) any benefits previously given by the deceased to any plaintiff or any beneficiary
Peter did not receive any real financial assistance from the deceased.
David has lived rent free with his parents and, after his mother’s death, with the deceased until late 2009.
David received the benefit of the sale proceeds of the deceased’s unit of $180,000 and the further cash payment of $60,000 to enable him to acquire outright the lease of the unit. Peter arranged these payments in the belief and understanding that they would form part of David’s inheritance.
While much of the evidence turned on Peter’s understanding of the circumstances at the time, he used the proceeds of sale from the deceased’s unit and the $60,000 to fund the purchase of the unit, the ultimate outcome is that David has been given a benefit by the deceased by virtue of the use of those monies to purchase the lease of his unit.
Section 91(4)(m) whether the applicant was being maintained by the deceased person before the person’s death either wholly or partly and, whether the Court considers it relevant, the extent to which and the basis upon which the deceased had assumed responsibility
Peter was not being maintained.
Section 91(4)(n) the liability of any other person to maintain the applicant
There is no liability of any other person to maintain Peter.
Section 91(4)(o) the character and conduct of the plaintiff or any other person
Peter has a loving and caring relationship with David and appears to have had such a relationship with the deceased. Diane also continues to maintain a close and supportive relationship with David.
Section 91(4)(p) any other matter the Court considers relevant
I accept that Peter had a genuine belief that the payments, totalling $240,000 from the deceased’s sale of his unit and investments, to enable David to acquire outright his own unit, would form part of David’s inheritance. His decision to use the money from the sale of the deceased’s unit and the investments improved David’s financial position.
Regrettably, due to Diane’s PPMS, her condition will inevitably worsen. The evidence is that Diane has been advised to change her motor vehicle to an automatic due to her foot problem.
In a letter from Dr Caron Chapman of Barwon Neurology dated 13 August 2015,[52] states that Diane’s main symptom is of progressively worsening right leg weakness. Diane has difficulty with balance and fatigue, and uses a walker for long distances and a walking stick for shorter distances. Dr Chapman states that PPMS is an ‘inexorably progressive condition which has currently affected Diane’s mobility’. Diane was diagnosed in her 50s and invariably a late diagnosis often translates to a shorter time to significant disability. There are no current available treatments or medications that can improve or delay the time for disability for PPMS. Dr Chapman considers that Diane may well require further mobility aids such as a scooter or wheelchair in the future. While Diane is currently able to drive, she has a manual car and it is Dr Chapman’s recommendation that she will require an automatic car as the lower limb function deteriorates. Dr Chapman says that PPMS can affect many systems, including speech and swallowing, vision, sensation of power in both the upper and lower limbs, and that this, in turn, can lead to significant disability.
[52]Exhibit P11.
Diane understands that accommodation at a suitable facility such as Balmoral Nursing Home in the future, which is part of Balmoral Lodge in Smith Street, requires a bond of $350,000 to $420,000, which would be repayable and then fees on a monthly basis. Diane considers that the only way that they could fund such accommodation on their current finances is for Peter to cash in his superannuation or for them to sell their family home.
Conclusion
The Court, in determining the application, must look at the Will which the deceased left and the dispositions which it contains in favour of Peter and David, and whether they amounted to an adequate provision for Peter’s proper maintenance and support. The very question, what is proper maintenance and support, involves Peter’s future to be maintained or supported. It involves what is necessary or appropriate prospectively from that time. To determine that question, contingent events must be taken into account, as well as what may be considered certain or exceedingly likely to happen. But they must not be outside the range of reasonable foresight.
In this case, the deceased clearly had an intention to ensure that David was secure into the future and, accordingly, left him a larger portion of the estate. It is unlikely that the deceased would have anticipated that Peter would use the proceeds of the sale of the deceased’s unit and $60,000 of his investment to purchase David’s leased accommodation.
After having regard to each of the considerations to which I have referred, I am satisfied that Peter is a person for whom the deceased had a responsibility to make further provision. I am satisfied that the deceased did have a responsibility, in terms of s 91(1), to make adequate provision for Peter’s proper maintenance and support. Accordingly, the jurisdiction of the Court to make an order that further provision be made out of the estate for Peter under s 91(1), is enlivened. I turn then to the question as to what amount of provision I should order be made, for the proper maintenance and support of Peter, out of the deceased’s estate.
What is adequate provision?
Section 91 of the Act confers wide power to make such order as is thought fit in all the circumstances of the case. In McKenzie v Topp,[53] Nettle J said:
It is plain, however, that the discretion is not untrammelled or to be exercised according to idiosyncratic notions of what is thought to be fair or in such a way as to transgress unnecessarily upon the testatrix’s freedom of testation, but rather carefully and conservatively according to current community perceptions of the provision which would be made by a wise and just testatrix. (citation omitted)
[53][2004] VSC 90, [63].
Section 91(4)(e)-(o) set out a number of factors, which the Court must take into account in determining whether the testator had a responsibility to make provision for the plaintiff, whether in fact the testator had discharged that responsibility and, if not, the amount of provision which should be ordered by the Court in favour of the plaintiff. Section 91(4)(p) also requires the Court to take into account ‘any other matter the court considers relevant’.
An important factor for resolving the question of the amount of provision to be ordered in favour of the plaintiff is the size and nature of the estate. The estate is not large. It is not clear what the precise amount of legal costs are to date, however, in David’s claim he seeks slightly over $41,500 in legal costs. This amount is not objected to by Peter.
The next relevant set of factors concern the nature of Peter’s claim and Peter’s circumstances, as described in s 91(4)(e), (f), (g), (h), (i), (j), (l) and (p). I consider the deceased had a responsibility to Peter, to make provision as would provide a reasonable measure of protection to Peter against his vulnerability to the vicissitudes of life. I take into account Peter’s financial situation, his age, casual employment, health and the need to provide for Diane in the future against the various vicissitudes to which she might be subjected and to provide her with proper care, given her PPMS.
On the other hand, I consider that David is in a reasonably secure financial position and that if his needs increase in the future and he requires more specialised care, he has the financial resources to deal against such vicissitudes to which he might be subjected and to provide him with ongoing security.
For the purpose of completeness, I note that paragraphs (m) and (n) of s 91(4) are not relevant. With those circumstances in mind, I return to the question of what provisions should be ordered in Peter’s favour pursuant to s 91(3). In determining the measure of such provision to be made in Peter’s favour, it is important to bear in mind that the Court only has jurisdiction to order such provision as is ‘adequate’ in the circumstances, which include those identified in s 91(4) and which I have discussed.
I consider that Peter has a real present and future need.
Accordingly, the amount I consider necessary for Peter’s adequate and proper provision is $275,000.
For the reasons given, there will be an order that provision be made out of the estate in favour of the plaintiff by way of a lump sum payment in the sum of $275,000. The remainder, subject to the bequests made to the deceased’s grandchildren and great grandchildren, be made in favour of David. Such sum is to be paid into the Senior Master’s Fund of the Supreme Court, once legal expenses have been paid from the estate.
I shall hear counsel on the question of costs and precise terms of the order.
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