Braun v Australian Executor Trustees Ltd - [2014] WASC 210

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BRAUN -v- AUSTRALIAN EXECUTOR TRUSTEES LTD [2014] WASC 210

CORAM: MASTER SANDERSON

HEARD: 23 APRIL 2014

DELIVERED : 17 JUNE 2014

FILE NO/S: CIV 2591 of 2012

MATTER :Inheritance (Family and Dependants Provision) Act 1972 (WA)
The Will of ANNA MINA STONE ROBINSON (also known as Anna Wilhelmina Stone Robinson) late of 10 Oliver Street, Scarborough in the State of Western Australia, Retired (Dec)

BETWEEN: STEPHANIE CLARE BRAUN
Plaintiff
AND
AUSTRALIAN EXECUTOR TRUSTEES LTD (ABN 84 007 869 794)
First Defendant
ELISABETH GEORGINA STONE
PETER JOHN STONE
Second Defendants

Catchwords:

Family Provision Act 1972 (WA) application - Turns on own facts

Legislation:

Nil

Result:

Provision made for applicant

Category: B

Representation:

Counsel:

Plaintiff:     Mr M Curwood
First Defendant             :     Ms P G McMahon
Second Defendants       :     In person

Solicitors:

Plaintiff:     McVay Bates & Associates
First Defendant             :     Pamela G McMahon
Second Defendants       :     In person

Case(s) referred to in judgment(s):

Maas v O'Neill [2013] WASC 379
Palmer v Dolman [2005] NSWCA 361
Plan B Trustees Ltd v Stone [2012] WASC 81
Wheat v Wisbey [2013] NSWSC 537

MASTER SANDERSON: This is an application by the plaintiff for provision from the estate of her mother Anna Mina Stone Robinson. For the sake of convenience and without wishing any disrespect to any party I will refer to the plaintiff, the deceased and the second defendants by their Christian names. Anna died on 7 February 2010 aged 91. At the date of her death she was survived by her husband Edward Alexander Robinson and her three children, Peter (then aged 66), Stephanie (then aged 55) and Elisabeth (then aged 53).
As at the date of her death Anna had a net estate of $3,677,493.86. Of that amount $2,971,000 was held in real estate. Anna owned six properties in the Perth metropolitan area. In addition to those properties there was an amount of $176,234.50 cash at bank, a share portfolio worth $469,000 and a life assurance policy valued at $65,560.
As at 27 March 2014 (a date close enough to the date of the hearing of this application to make no practical difference) Anna's estate was worth a net amount of $3,441,384. That is before administration expenses. All of the real estate owned by Anna at the date of her death still forms part of the estate. The value of the listed securities is now $515,000. The slight decrease in the overall value of the estate appears to be a decline in the value of the real estate.
Anna had a history of making wills. Her last effort was a hand written will penned three days before she died. The will divides her estate equally between Peter and Georgina and excludes Stephanie entirely. A grant of letters of administration of that will was made in favour of the first defendant on 21 March 2012. The document was declared to be an informal will comprising the testamentary intent of the deceased in accordance with s 33 of the Wills Act 1970 (WA): see Plan B Trustees Ltd v Stone [2012] WASC 81. A copy of the grant appears as attachment SCB2 to Stephanie's affidavit sworn 18 September 2012.
Stephanie's application is supported by two affidavits she has sworn, the second dated 27 August 2013. The application is supported by an affidavit of Stephanie's ex‑husband Markus Braun sworn 12 August 2013 and an affidavit of her son Shaanan Robert Richard Braun sworn 21 August 2013.
In opposition to the application Peter swore two affidavits the first dated 16 October 2012 and the second 30 October 2013. Elisabeth has also sworn two affidavits the first dated 22 October 2012 and the second 2 November 2013. In addition the defendants rely upon a number of other affidavits. Catherine Michelle Stone is Peter's daughter and her affidavit is dated 28 October 2013. Trudi Petra Lind, a friend and neighbour of Anna, swore an affidavit on 26 September 2013. Helen Beatrice Ottaway also a neighbour of Anna swore an affidavit dated 23 September 2013. Julia Ena Isabel Brooks, the sister‑in‑law of Anna, swore an affidavit of 19 September 2013. Edward Alexander Robinson, Anna's husband and step‑father of Stephanie, swore an affidavit on 24 September 2013. Finally, there is an affidavit from Gemma Elizabeth Stacey, Elisabeth's partner, sworn 29 October 2013.
The general principles to be applied in applications under the Family Provision Act 1972 (WA) (the Act) were set out by Pritchard J in Maas v O'Neill [2013] WASC 379. Determination of the application involves a two‑step process. Her Honour explained the position as follows:
In order to decide whether the proposed settlement will be for Matthew's benefit, and that all relevant facts have been considered, it is necessary to bear in mind the principles governing applications under the Family Provisions Act. Ms Maas' application under that Act is brought pursuant to s 6(1) which permits an application to be made by certain persons (including, relevantly, a child of the deceased living at the date of his or her death) on the basis that the disposition of the deceased's estate effected by their will was not such as to make adequate provision from the estate for the applicant's proper maintenance, support, education or advancement in life. If the provision is inadequate, the Court has the discretion to make 'such provision as the Court thinks fit out of the estate for that purpose'. It is well established that s 6 thus encompasses a two stage process.
The question whether adequate provision was made for an applicant's proper maintenance, support, education or advancement in life involves, in effect, a jurisdictional question. In determining that question, it is necessary to consider an applicant's financial position, and his or her need for, and moral claim to, provision from the estate, the need and moral claims of other persons who have a legitimate claim upon the testator's bounty, and the size of the estate, as at the date of the testator's death. The terms 'maintenance', 'support' and 'advancement' in s 6(1) of the Family Provisions Act encompass not only provision for the supply of the necessaries of life, but also extend to provision over and above a mere sufficiency of means upon which to live, and may extend to provision which would enable a potential beneficiary to improve his or her prospects in life.
In exercising the discretion under s 6(1) of the Family Provisions Act, the question for the Court is what award would be adequate for the 'proper' maintenance, support, education or advancement of the applicant. The term 'proper' prescribes a standard, whereas the term 'adequate' is concerned with the quantum of the award. The propriety of a provision for an applicant is to be assessed by reference to all the circumstances. Determining the quantum of an award which would be adequate for the proper maintenance, support, education and advancement of an applicant is also a relative question, which requires consideration of the nature, extent and character of the estate and the other demands upon it. The exercise of discretion involves a consideration of the facts which exist at the time of the making of the order.
Section 6 of the Family Provisions Act confers a wide discretion on the Court at each stage of the two stage analysis [16] ‑ [19]. (footnotes omitted)
As at the date of Anna's death Stephanie was 55 years of age. She was living with her dependant son Shaanan who was aged 14. She had separated from her husband Markus and was involved in unresolved divorce proceedings with Markus. She was not in a relationship with any other person. She was visiting Perth but a resident of the United Kingdom. Stephanie and Shaanan were living in an old shed in Chidlow while Shaanan was attending Mundaring Christian College.
Stephanie's only income was a United Kingdom pension. She was living off savings which at that point were below $5,000. She had poor health from an adrenal gland malfunction and had previously suffered a heart attack. Her accommodation in the United Kingdom consisted of a fixed caravan on a caravan site on the coast of mid‑Wales. Her income per fortnight was £144 and her monthly expenses were approximately $1,000.
At the hearing of this application Elisabeth and Peter were not represented. The first defendant did appear by counsel but not surprisingly took no part in the hearing. Almost all of the evidence filed by Elisabeth and Peter was irrelevant to the matters to be considered when determining this application. Instead Peter and Elisabeth both in their affidavit evidence and in oral submissions attacked the character and integrity of Stephanie. Clearly there is antagonism between Stephanie on the one hand and Peter and Elisabeth on the other. But the existence of such antagonism is not a relevant consideration in determining this application. As a consequence there was virtually nothing in Peter and Elisabeth's case which explained their financial position or in any way answered Stephanie's claim.
Turning first to the jurisdictional question there is no doubt that Anna did not make adequate financial provision for Stephanie out of her estate. Three factors lead to this conclusion. First there is the size of the estate. This is a case where it is possible to provide for Stephanie without depriving the beneficiaries of a substantial inheritance. Of course it is to be borne in mind that Stephanie is an adult child. The principles to be applied with respect to claims by adult children were conveniently summarised in Wheat v Wisbey [2013] NSWSC 537. Hallen J said:
In relation to a claim by an adult child, the following principles are useful to remember:
(a)The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.
(b)It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his or her children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801.
(c)Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise, they would be left destitute: Taylor v Farrugia, at [58].
(d)If the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant: Re Buckland (dec'd) [1966] VR 404 at 411; Hughes v National Trustees Executors and Agency Co of Australasia Ltd [1979] HCA 2 ; (1979) 143 CLR 134 at 148; Goodman v Windeyer at 498, 505. But the Act does not permit orders to be made to provide for the support of third persons that the applicant, however reasonably, wishes to support, where there is no obligation of the deceased to support such persons: Re Buckland (dec'd) at 411; Kleinig v Neal (No 2) [1981] 2 NSWLR 532 at 537; Mayfield v Lloyd-Williams, at [86].
(e)There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker; Kleinig v Neal (No 2) at 545; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37, per Nicholson J at 45.
(f)The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 (28 August 2003) at [179]‑[182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant: Marks v Marks [2003] WASCA 297 at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164, at [17].
(g)The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd, at 149.
(h)Although some may hold the view that equality between children requires that 'adequate provision' not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration, individual conduct, circumstances, financial resources, including earning capacity, and financial needs, in the court's determination of an applicant's case.
(i)There is no obligation on a parent to equalise distributions made to his or her children so that each child receive benefits on the same scale as the other: Cooper v Dungan at 542.
In Blore v Lang (1960) 104 CLR 124, Fullagar and Menzies JJ said, at 135:
'The measure to be applied is not what has been given to one, but what the other needs for his or her proper maintenance, giving due regard to all the circumstances of the case … The … legislation [is] for remedying, within such limits as a wide discretion would set, breaches of a testator's moral duty to make adequate provision for the proper maintenance of his family - not for the making of … a fair distribution of … [the] estate … Equality is not something to be achieved by the application of the Act, although in some cases equality may set a limit to the order to be made - for instance, where there is not enough to provide proper maintenance for all entitled to consideration whose need is the same.' [128]
Counsel for Stephanie submitted subparagraphs (c), (d), (e) and (f) were highly relevant to the position of this case. I accept that submission and consideration of these questions favours Stephanie.
It also should be accepted that as at the date of Anna's death Stephanie had a need and a moral claim. There are five factors which are relevant. First she had inadequate living arrangements and lack of suitable permanent accommodation. She was separated from her husband and going through divorce proceedings with a dependant child meaning she had demands upon her and limited resources to meet those demands. She had no superannuation and therefore no provision for retirement. She lacked income and her age and future employment prospects were against her. All of these factors favour Stephanie.
As I have mentioned above the affidavit evidence filed by Peter and Elisabeth attacked Stephanie's character. It also attacked her relationship with her mother. The evidence suggested an estrangement between mother and daughter. Even if that estrangement existed it does not terminate the obligation of the testator to provide for the claimant nor preclude a claimant from being able to satisfy the jurisdictional requirement: see Palmer v Dolman [2005] NSWCA 361 [110].
It is very difficult to assess what are the competing claims to the estate. The only relevant material is provided by Peter in his affidavit of 16 October 2012. Paragraph 2 of that affidavit is in the following terms:
To describe my circumstances should it be of benefit to the court, I am sixty‑eight years of age, with a thirteen year old son, Sam, in Year 7 of secondary school, and a wife, Wendy Bouker, fifty‑five years old, a primary teacher. I am not in the best of health, having had successful by‑pass surgery, a pace‑maker, and diabetic. I am still self‑employed as a book distributor but are planning for retirement due to its diminishing financial viability, and my health. My wife experiences just reasonable health, being insulin dependent diabetic, and associated ills that go with this. By necessity of health and stress, she now works just three days a week. At present we must both continue to work because of the need to educate my son, who appears to have the intelligence and interest to attend university in five years. This poses some difficulty as it is to many students living in the country (we are 210 km from Melbourne) and we wish to consider re‑location to Melbourne before he graduates from school and enters tertiary education. We do not have the finances to do this at present.
While I accept this evidence indicates Peter has a need for provision from the estate it does no more than that. On the state of the evidence I could not conclude that there are strong competing claims against Stephanie.
Finally, and perhaps most importantly, during oral submissions both Peter and Elisabeth appeared to concede Stephanie had a claim upon the estate. Their position seemed to be no provision should be made for Stephanie because they - that is, Peter and Elisabeth - were cognisant of her needs and would make provision for her in some way or another. Clearly that is not an appropriate way to deal with this matter. Although it seemed to me there was a concession by Peter and Elisabeth on the jurisdictional question given they were not represented I have not determined the matter on that basis. Rather, taking into account all relevant matters I am satisfied the jurisdictional question should be answered in Stephanie's favour.
That then leaves the question of the appropriate disposition of the estate. Given the paucity of evidence from Peter and Elisabeth it is simply not possible to assess their needs. But clearly they should benefit from the estate. It seems to me the proper course is simply to divide the estate between the three siblings. In other words the will of the deceased ought be altered to allow Stephanie to participate in the estate as to a one‑third interest. In reaching that conclusion I have taken into account Stephanie's position as at the date of the hearing. Her divorce and property settlement had been finalised. As part of that settlement she received the sum of £135,000. She also received what she describes as 'two derelict homes in Manchester'. As at the date of making that affidavit she had savings of £80,000, the two homes in Manchester and a caravan valued at £3,000. Clearly her financial position had improved since the date of the death of Anna but it could not be said that she was comfortably placed. She had no employment and no prospects of employment and there is no suggestion she has made any provision for superannuation.
Counsel for the plaintiff ought bring in a minute which reflects these reasons. I will hear the parties as to costs.