Booth v Evans

[1999] NSWSC 688

CITATION:	Booth v Evans [1999] NSWSC 688
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	4234/97
HEARING DATE(S):	28 and 29 June 1999
JUDGMENT DATE:	29 June 1999
PARTIES :	Dawn Booth & Ors v Keith Edward Evans
JUDGMENT OF:	Master Macready at 1

COUNSEL :	D.G. Charles for plaintiffs D. Day for defendant
SOLICITORS:	Nash Allen Williams & Wotton, The Entrance, for the plaintiffs Kenny Spring , Bathurst, for the defendants
CATCHWORDS:	Family Provision.; Claim by adult children.; No evidence of need for one child.
DECISION:	Para 62

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THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER MACREADY

TUESDAY 29 JUNE 1999

4234/97 - DAWN BOOTH & ORS v KEITH EDWARD EVANS - ESTATE OF ALFRED JOHN EVANS & ANOR

JUDGMENT

1 MASTER: This is an application under the Family Provision Act in respect of the Estate of the late Alfred John Evans who died on 30 May 1997 aged eighty-nine years. The deceased was survived by his widow, Hilda Vernie Evans and four of his children. The children are the plaintiffs and the first defendant in proceedings 4234/97.
2    One child, Laurie Evans, pre-deceased the testator leaving his children, Donna Evans and Bernard Evans who survived the deceased and they are over eighteen years of age. Donna and Bernard are the plaintiffs in proceedings No.1404 of 1998.
3    Those proceedings have been settled upon terms that in lieu of the provisions for them in pars.4(e) and 4(f) of the will, the plaintiffs shall receive jointly the sum of $15,000 between them.
4    The deceased's will was made 27 August 1987. Under that will he appointed the first defendant, his son and Michael John Royle as executors. Clause 3 provides that the whole of the estate be held upon trust for his wife during her lifetime. Clause 3(a) proceeds to give the matrimonial home and the rural property known as "Dawnleigh" of Goulburn Road, Oberon to his wife for life and the remainder to his son Keith Edward Evans who is the executor. There are provisions for termination of that life interest in the property, one of which is the wife ceasing to live permanently on the property. That event has happened in circumstances to which I will refer later.
5    Under cl.3(b) the widow was to receive all income earned from the property including real estate, shares and investments. Clause 4 contains a remainder provision which operates upon the death of the deceased's widow. Under those provisions the plaintiff, John Henry Evans obtains a legacy of $10,000, shareholdings in Panfida Foods Limited and Banana Growers Distributors Ltd and a coin collection and a motor vehicle. In round terms, given the nature of the assets, that is a bequest of an approximate total of $20,000. In cl.4(b) the plaintiff Beulah Royle received a sum of $35,000. In cl.4(c) the plaintiff Dawn Booth received $35,000. Under cl.4(d) the daughters, Dawn Booth and Beulah Royle received all the furniture except one specific item which goes to Keith Evans. In cll.4(e) and 4(f) each of the grandchildren received $5,000 each. However that has now been substituted as a result of the settlement. Under clause 4(g) the residue of the estate goes to the first defendant, Keith Evans. There is provision in clause 5 for investment. In that clause there is power to invest in non-income producing assets including property for the occupation and use of a beneficiary.
6    The estate consists of the property to which I have referred which is on the road between Goulburn and Oberon and there is evidence of the value of that property. If sold in one lot it would probably achieve a sum in the order of $425,000 less selling expenses. There are proposals which will allow the sub-division of different blocks some of which have separate titles. If these proposals were adopted the sale price would be in the order of $560,000. However such a proposal is entirely dependent upon council approval and the evidence before me does not allow me to determine that this is likely to be the ultimate outcome.
7    Accordingly I will proceed on the basis that the property is valued at $425,000. There is cash held in the estate in the solicitor's trust account and in the Savings Bank totalling $165,925.31. The legal expenses for the costs of administration have all been paid, however, there are the outstanding costs of this application. The defendants' costs are estimated at $23,000 and those of the plaintiffs to date are $31,858.10. This is a total of $54,858.10.
8    It can be seen therefore that if those costs come out of the estate then the distributable estate would be the land and a sum of about $110,000.
9    The history of the family is not set out in any great detail but it seems that the deceased and his wife moved to the property at Oberon very soon after the birth of the first of their children. John Evans was born on 14 September 1927, Beulah Royle was born on 3 March 1930, Dawn Booth was born on 25 December 1933 and Keith Evans was born on 8 April 1936.
10    During the wartime the deceased was away serving in the Armed Forces and all the children helped on the farm as they grew up. Certainly it sounds as though it was not an easy life and no doubt it was difficult for the deceased's widow managing the property with six small children during the period of the war. By 1965 the deceased and his wife went to England for a trip. Apparently they were away for about seven months. During this period the first defendant, Keith, looked after the property and spent time residing there with his family as well as living at his home in Oberon.
11    During that time the two daughters, Beulah and Dawn painted the outside of the house of the deceased. In 1983 the deceased had a tractor accident and as a result of those injuries he required a lot of care from his two daughters. It also meant that he was not in a position to run the farm thereafter.
12    Accordingly in 1983 a lease was entered into for a period of five years in which the farm was leased to Keith and his son Shane. The lease document required that the property be kept up and that the rental was to be amount equivalent to all the rates and charges payable in respect of the property. In fact an agreement was reached outside the terms of the written lease for the first defendant Keith to pay $3,000 plus the rates to his father.
13    Shortly after this in 1984 the son, Laurie Evans died and the will was made on 27 August 1987. In 1988 the lease of the farm expired and arrangements were made for its renewal on an annual basis. From that time on the first defendant paid $6,000 together with the Pastures Protection Board rates.
14    However, the deceased paid the council rates and claimed those as deductions. By February 1997 the deceased and his widow could no longer cope at home and they moved to Hathaway Cottage in Oberon. I will come back to the nature of that accommodation later.
15 On 30 May 1997 the deceased died. In applications under the Family Provision Act the High Court as recently in Singer v Berghouse (1994) 181 CLR 201 set out the two-stage approach that a court must take. At p.209 it said the following:

"The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement of life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased' estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second state of the process, that assessment will largely determine the order which should be made in favour or the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."

16    As indicated by the High Court it is necessary for me to consider the position of the plaintiffs. I will firstly deal with the position of the plaintiff, John Evans who is sometimes referred in the evidence as Jack Evans. He is now seventy-one years of age. He is married and he does not have any dependants. He lives with his wife at 31 Skyline Avenue, Gorakan and that property has an estimated value of $150,000. He has furniture and chattels worth $10,000. He has a Ford Fairlane, a 1976 model worth $1200 and a small amount of cash. Unfortunately he has a number of liabilities. These were to the credit union for $23,995 and to CitiBank in the amount of $5,422 and rates outstanding of $1,000. He and his wife live on a pension. Their combined income per week is $301.50. He also obtains casual employment earning him about $80 per week. Those funds are expended entirely on their living expenses and clearly they only just make ends meet.
17    In 1980 Mr Evans had an accident at work when he fell off the top of a truck. He damaged his heel and his hips. He received a pay-out and that has been applied in various ways. His injuries to his heel still give him problems and cause him difficulty with walking. He has got over the problems with his hips and other than this, his only other problem of a medical nature is that he suffers from diabetes which he is able to control with oral medication.
18    It is necessary to look at his relationship with the deceased. He, like his brothers and sisters, worked hard for the father and the family. As the children grew up it was necessary for them to work on the farm. There was cropping and growing of vegetables as well as grazing. After he grew up there was a period when there was a mail run which he operated with his father. Apparently his father had purchased a truck and had the contract. This venture was persisted in for some time but it was uneconomical and the plaintiff, John, then left the family home and moved to Oberon.
19    He married and set up in Oberon after having lived for some time with his wife on the family farm. For a number of years he worked as a shearer, however, eventually in 1965 he gave up shearing and he took up being a transport driver until the injuries to which I have referred. Subsequently has obtained employment as a taxi driver.
20    Initially, after leaving Oberon he lived in Blayney and then at Bathurst. He did from time to time visit his father but the extent of that is probably not near as great a contact as that of the first defendant for reasons that I will go into in due course. However, there is nothing to suggest that he was not a dutiful son.
21    One of the matters which the court has to consider in this matter is the way in which each of the plaintiffs has been left without adequate and proper provision for their maintenance, education and advancement in life. It is important that the parties realise that the jurisdiction which the Court exercises under this Act is not a jurisdiction which allows the Court to make what one could describe as a fair distribution or some such similar expression.
22    The Court's powers are simply limited to providing for someone who can demonstrate that they have been left without appropriate provision.
23    In the present case the matters that have been advanced on behalf of the plaintiff, John, are the fact that he has a number of loans outstanding and also that he has health problems. He will receive approximately $20,000 under the will and it is suggested that in addition he should receive some $40,000 to $50,000 over and above that provision. How that is arrived at simply does not appear in the evidence. However, certainly he being on a pension and not being able to work, apart from some odd casual work, has no opportunity to earn funds to pay the loans. Clearly he has a relevant need. Obviously he may have difficulty with some of his health matters later and so there is some need which he has demonstrated in relation to that matter.
24    I turn now to the situation of the plaintiff, Beulah Royle. She is sixty-nine years of age. She is married and has no dependants. She is in reasonably good health. Her husband has apparently some problems with cataracts and might need operations and he also has problems with his back and neck. They do not have any hospital cover.
25    The situation of herself and her husband is reasonably comfortable in contrast with her brothers and sisters. They have a residence in Toukley which is worth $160,000. They have a block of land at Wyongah nearby which is worth $80,000. They have funds in the name of the plaintiff of some $60,000. They have small amounts in the bank and a car worth $12,000 and furniture worth $10,000. They have no liabilities and their income once again is from the pension. With interest and the pension they receive about $351 a week which is expended on their living expenses.
26    Her situation was like the other children as she grew up. She did things such as picking peas for which she was paid ten cents a bushel and she helped with other matters such as digging potatoes, trapping rabbits and other things which are common to children who grow up in that situation. Her schooling was not a matter which was at the forefront. She did not go to school until she was eight years of age and it was difficult to get to school. At times she would have to stop away from school to help on the farm.
27    However, notwithstanding this she did manage to continue to the intermediate certificate and in due course to the leaving certificate. She married when she was twenty years of age. She moved to Sydney for a short few years and back to Oberon for a few years. In 1954 or 1955 she moved to the Central Coast where she has lived ever since.
28    She continued to visit once she obtained a driving licence. She would bring the children home to Oberon during the school holidays. She also, together with her sister in 1983, spend considerable time at Oberon looking after their parents after the tractor accident. They were engaged from February to August on these matters.
29    Apart from these there were other periods when the deceased had a hernia operation when the plaintiff looked after him. Similarly he required care when the deceased's widow also had operations at different times.
30    Another occasion was when the deceased's wife broke her arm and she once again looked after her parents.
31    When one turns to consider the way in which she might have been left without adequate provision I am reminded by what was said by Sheller JA in the Court of Appeal in Singer v Berghouse on 23 July 1992. There his Honour had the following to say:

"Sheller JA (Cripps JA agreeing) said: 'I must say that I find it extraordinary that the appellant presented scant or no evidence as to her present income and outgoings or as to her intentions or needs for the future or as to what lump sum provision applying appropriate discount tables would be required to meet these claims or needs, if they existed. In my opinion, in the circumstances of this case, for the court, in the absence of any such evidence, to make an order for the payment to the appellant of a lump sum is to do no more than act on speculation and, contrary to the prohibition contained in s.9(2) of the Act, to alter the deceased's disposition of his property in the absence of proof that he has inadequately provided for the appellant'."

32    In this case this particular plaintiff advances no particular needs in her affidavit evidence to suggest that she has been left without provision. I do note that apart from her home that she and her husband have a block of land and $60,000 in the plaintiff's name. They have a fund behind them and under the will the plaintiff will receive $35,000.
33    I turn to the situation of Dawn Booth. She is sixty-five years of age. She is married and has no dependants. She and her husband are pensioners. Their present financial situation is that they are living in Queensland, in Cambooya which is outside Toowoomba. They apparently have thirteen acres and a house. That is valued at $140,000. They have a Magna car worth $4,000, furniture of $5,000, savings of $2,345 and a time-share unit. At this stage I should indicate that the plaintiff John also has a share in a time-share unit in the sum of $2,500.
34    The plaintiff Dawn Booth has liabilities which are substantial. There is a loan to AVCO of $85,000, a bankcard loan of $1500. The loan from AVCO apparently resulted from a business which the plaintiff and her husband were carrying on some time prior to going on the pension. That business was apparently transferred to their son but they still retain a liability of $85,000. The finance company will not release them from the mortgage.
35    At the present time their son who is running the business is paying the interest of $200 per week. There is no guarantee that he will pay out the principal. Accordingly they are in a somewhat precarious situation in that regard.
36    They are both pensioners and their income plus cash work is about $331.40. That obviously hardly covers their expenses and certainly would not be sufficient if they had to meet $200 a week which their son is meeting the interest on the loan. They do not know whether he will be able to do anything about repaying the principal in the future.
37    Clearly the plaintiff has had a difficult life. She and her husband were effectively wiped out by the drought conditions when they moved to Temora. There they lost a son-in-law and they had to re-start life in Queensland. That involved them also taking up fresh businesses in order to support their two children.
38    As far as her history with the deceased is concerned she was like her sister. She apparently had moved in 1952 to Oberon to live. She did the same work on the farm as a child and it was in 1979 that she moved away to Temora.
39    By 1989 that venture had failed and she moved to Queensland. No doubt the same comments that I made about the assistance given during her parents' illness also apply to this plaintiff. She was no doubt a good daughter to the deceased.
40    So far as the way in which she has been left without adequate provision for her maintenance, education and advancement in life is concerned there is the obvious problem with the mortgage as she and her husband have no means of repaying it or earning funds to repay it.
41    Cross-examination demonstrated that her house needs some work on it. It needs painting, closing in underneath, new kitchen cupboards, floor coverings and the roof leaks and it needs repairs. There is no estimates of these amounts except that carpets will cost $2,000.
42    The plaintiff asks for a further amount of $50,000 to $70,000 over and above the amount which she has been given under the will.
43    It is also necessary for the court to give consideration to other people who may have a claim on the bounty of the deceased. The first of these to consider is the first defendant, Keith Evans. He is aged sixty-three. He is married with no dependents. He lives in town in Oberon and that home at 23 Bligh Street is owned free from encumbrances and it is worth approximately $110,000. He has contents of some $5,000 and a Toyota sedan worth $1500 and several thousand dollars of funds in different bank accounts.
44    He still continues to operate the estate property as a grazing property and to that end he has livestock which amounts to 668 ewes, 292 lambs, 18 rams, 23 cows, 24 calves, 6 steers and 2 bulls. These were not valued and on the evidence he has a Dodge truck and a stock float worth $3,000. Recently the vehicle which he used on the property was damaged and he will have to replace it using the proceeds of an insurance pay-out plus another $3,000 or $4,000 in order to replace the vehicle. He has an overdraft on some $2,000-odd at the moment and some $7,000 in savings. His income situation is that he has for many years, certainly since 1983, worked the property and also in earlier years has done other work such as shearing. His taxable income for the financial year ending 1998 was Nil and he expects his income for the current year to be something under $20,000. He has the expenses of running the property and maintaining his house and effectively he is not operating on an economic basis. He is virtually making no money from the farm.
45    This is no doubt partly due to the rural situation and probably more importantly the size of the property which is not large enough nowadays to support that operation. His wife is employed and earns a salary of $423.35. She has an expenditure of some $300 a week in maintaining the home and meeting the household expenses. She has a liability for a loan.
46    The defendant wishes to continue to operate the property, whether that is appropriate needs to be considered in the light of his obligations as an executor. The rent which is being paid means that the estate is receiving a return on that property of somewhere in the order of 1.5 per cent per year.
47    The first defendant has been told by his mother, the widow, that she wants the property to be kept and apparently she gets some enjoyment from it.
48    So far as his relationship with the deceased is concerned, it is clear that he had a somewhat closer relationship than his elder brother. He was the youngest child and after the war he continued to assist on the farm. In about 1950 he had a position with the Oberon Post Office where he worked for about twelve months. He still lived at home and he made his way from his home to Oberon for that job.
49    After that job finished he started to work with his father. He was not paid but he received board and keep. He, like his older brother, became a shearer for three to six months a year. When he was not doing that work he continued to work on his father's farm. Exactly how much time he worked there is not clear. This continued for about eight years until 1961. Occasionally when he picked peas he would be paid the going rate for such work.
50    In 1961 he married and moved into Oberon and also continued to work as a shearer in the Oberon district. He also spent time at this stage working on his father's farm.
51    In 1965, as I have mentioned, the deceased and his widow went to England for seven month. His father left him the responsibility of running the farm which he was happy to do. Obviously it was something he liked. He did look after the farm during that period and was paid twenty pounds per week for looking after it. The amount that he was paid probably did not recompense him for the amount of time that he had to give up to deal with that situation. He also mentioned the occasions during that time when his sisters painted the house.
52    Apparently he continued this work after the parents returned and in 1983 the deceased had the tractor accident. That then led to the lease proposal which was entered into between the deceased and the first defendant.
53    There was some dispute on the evidence about hay which was left there which was taken over by the first defendant and also superphosphate and some use no doubt was obtained from it. At one stage the deceased apparently gave the sum of $1,000 to the first defendant to help him purchase a motor vehicle.
54    There is also some evidence given as to work the first defendant has done on the property. There was approximately 1200 metres of fencing which was replaced. That probably was something over and above the requirement under the lease to maintain and keep the property in good repair. There was also general maintenance of course which was done pursuant to the lease. Some evidence was given of other work to be done on the property and the amounts which eventually were proved were moneys spent on superphosphate, $501.50 aerial spraying $310, contract fencing $220, fencing material $317.50, tractor repairs $4,024.50 and grading the road $75. Most of those I would have thought would have been beyond the ordinary maintenance obligations which applied under the lease. It is important to realise that it was Keith who was the one who was close and who was able to assist his father in running the property. Although the evidence was not in great detail it was clear that there were many years of work in which there was assistance given.
55    It is not of course for the defendant to establish any need. He is the chosen object of the testator's bounty and has the interest in remainder. If he wishes to maintain the property, that is entirely a matter for him. It is obviously clearly uneconomical.
56    The other person who has to be considered is perhaps the most important person and that is the widow of the deceased, Hilda Evans. She is ninety-three and is suffering from dementia. Her present life expectancy, absent any medical problems, is 3.67 years. At my request some evidence was led by the first defendant as to the widow's situation. She resides in Hathaway Cottage at Oberon which is a council-owned aged care facility with twenty-four hour staffing. She has a separate bedroom and an en suite bathroom. She shares a community dining room and lounge room with other visitors. As I have mentioned she moved there in February 1997. She is almost blind. She has lost the sight of one eye and has percentage vision in the other eye. On cloudy days she cannot see but on a bright day she can see sufficiently to make her way about. Apparently her pension meets her expenses at the Hathaway cottage in Oberon. As far as her assets are concerned she apparently has $10,000 in an interest-bearing account with the National Australia Bank and $7,000 in a cheque account. The description of those matters which I have just recounted was the extent of the evidence. On enquiry from Mr Evans it became clear that there was a possibility that in the future she may need some other care. The type of accommodation that she is in at the moment would not be suitable for someone who needs nursing in a nursing home. Such facilities are available in Bathurst and Lithgow. There has not been any investigation of the cost of those facilities although the first defendant has knowledge from other areas. Apparently the expenses for such accommodation are more expensive than her present accommodation and it also might be that there might need to be some capital contribution required if she is to move into these other facilities.
57    The evidence in respect of the widow's situation unfortunately is not really sufficient for me to feel confident about her future care. Normally in matters such as this, one would have evidence from her treating doctors and those who look after her to talk about her needs and future requirements. That is simply not available. In the present case the plaintiffs have indicated that they wish to receive provision and have asked to be put ahead of the provisions made under the will for the widow. The question which has to be considered by the court is what is appropriate in that regard. Widows' claims are frequently the subject of applications in this court. The Court of Appeal in Golosky v Golosky (unreported 5 October 1993) has referred to the formulations of the standard to be expected in respect of the widow in terms which refer:

"Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up and maintain his estate, the duty which a deceased owes to his widow can be no less than to the extent to which his assets permit him to achieve that result; first to ensure that his widow be secure in her home for the rest of her life and that if either the need arises or the whim strikes her she have the capacity to change her home; secondly that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry; and, third, that she have available to her a fund to which she might have resort in order to provide herself with such modest luxuries as she might choose and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring".

58    Here in this case of course the deceased and his widow had a long life together. It was not without its difficulties no doubt for them both. It was obviously hard for the widow during wartime to look after the property while her husband was away and to look after the six young children. The provision that should be made for her is something akin to what has been provided by the deceased in his will. Admittedly she does not need a home to be provided for her but there is the possibility that some capital sum may be required to secure appropriate nursing care accommodation for her. Fortunately the will does include a power which would enable the executor to use the estate assets, be they cash or property to provide that accommodation.
59    When one looks at the needs of the children there is an obvious difference. That is that they are in their sixties and their mother is aged ninety-three. The mother's life expectancy is short, although there are possibilities of her living longer, but she may not live that long. Even if the plaintiffs' situation in some way turns for the worse, one thing that should be noted is that their legacies are vested in interest and that they do in fact have an entitlement once the widow dies to receive those funds. This might assist them if there is some change in the next few years before their mother dies.
60    However, it seems to me, particularly given the little information that the court has in respect of the widow's situation, that it would be unwise to make any provision for payment of legacies for the plaintiffs prior to her death. However, a consideration of the children's circumstances certainly shows that they require further provision.
61    The circumstances of Dawn Booth, the first plaintiff, are difficult. She has a number of needs which I have identified in the evidence. In my view she would be entitled to receive after the death of her mother an additional legacy of $60,000 over and above what has been provided to her. So far as John Evans is concerned he has the debts to which I have referred. In my view he should receive an additional $30,000 over and above the legacy. So far as Beulah Royle is concerned in my view no particular need has been established beyond what she receives under the will. She has cash resources and a block of land which is quite valuable. She will receive $35,000.
62    Accordingly the orders that the court makes are:

1. In lieu of the provisions in par.4(a)(i) of the will of the deceased, John Henry Evans receive the sum of $40,000.

2. That in lieu of the provision in par.4(c) of the will of the deceased that Dawn Booth receive the sum of $95,000.
3. So far as costs are concerned, the costs of the plaintiffs, John Evans and Dawn Booth shall be paid out of the estate on a party and party basis and the costs of the defendants be paid or retained out of the estate on an indemnity basis.
4. The exhibits are to be returned.

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