Brennan v Mansfield
[2013] SASC 83
•6 June 2013
SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction: Civil)
BRENNAN v MANSFIELD & ORS
[2013] SASC 83
Judgment of The Honourable Justice Stanley
6 June 2013
SUCCESSION - FAMILY PROVISION AND MAINTENANCE - FAILURE BY TESTATOR TO MAKE SUFFICIENT PROVISION FOR APPLICANT - DUTY OF TESTATOR - GENERALLY
The plaintiff and the deceased lived together as a couple for 26 years until the deceased’s death – they enjoyed a luxurious life together, which was largely funded by the deceased – the deceased’s estate was substantial – in his will, the deceased left $100,000 to the plaintiff, along with his share in a house they owned as tenants in common – the residue of the estate, worth approximately $2.5 million, was left to the third defendant – the plaintiff claimed he was not left with adequate provision for his proper maintenance, education and advancement in life, having regard to his moral claim to a greater share of the deceased’s estate – submitted there are no competing moral claims upon the testator’s bounty – the third defendant submitted that the plaintiff failed to demonstrate that he has been left in need of further provision, and that the plaintiff has substantial assets.
Held: granting the plaintiff’s application – declaration made pursuant to s 11B(2) of the Family Relationships Act 1975 (SA) that the plaintiff was the domestic partner of the deceased – order made pursuant to s 7 of the Inheritance (Family Provision) Act 1972 (SA), the plaintiff is to receive the sum of $1,000,000, with the provision of the additional sum of $900,000 to be made from the residue of the deceased’s estate – it is clear the deceased intended the plaintiff to enjoy the security of the Stirling property as his own, however failed to provide the means by which the plaintiff could continue to do so in a style which he was entitled to, by reason of the moral obligation the deceased owed him.
Family Relationships Act 1975 (SA) s 11, s 11A, s 11B; Inheritance (Family Provisions) Act 1972 (SA) s 6, s 7, referred to.
Bowyer v Wood (2007) 99 SASR 190; Vigolo v Bostin (2005) 221 CLR 191; Bosch v Perpetual Trustee Co Ltd [1938] AC 463, applied.
Re Allen (Deceased) [1922] NZLR 218; Smilek v Public Trustee [2008] NSWCA 190; Re Buckland [1966] VR 404; Lloyd-Williams v Mayfield (2005) 63 NSWLR 1; Anasson v Phillips (Unreported, Supreme Court of New South Wales, Young J, 4 March 1988); Singer v Berghouse (1994) 181 CLR 201, discussed.
Graham v Graham [2011] NSWSC 504; Coates v National Trustees, Executors and Agency Co Ltd (1956) 95 CLR 494; Hughes v National Trustees, Executors and Agency Company of Australasia Ltd (1978 - 1979) 143 CLR 134; In Re Besterman [1984] 1 Ch 458; Buckland v Trustees, Executors and Agency Co Ltd (1966) 40 ALJR 164; Cooper v Dungan (1976) 50 ALJR 539; Horne v Horne (unreported, Supreme Court of New South Wales, Kearney J, 21 December 1988), considered.
BRENNAN v MANSFIELD & ORS
[2013] SASC 83STANLEY J:
Introduction
The plaintiff in this action seeks:
1.a declaration pursuant to s 11B of the Family Relationships Act 1975 (SA) that, as at 10 April 2011, the plaintiff was the domestic partner of Ross Douglas Pfeiffer (“the deceased”); and
2.an order pursuant to s 7 of the Inheritance (Family Provisions) Act 1972 (SA) that such provision as the Court deems fit be made out of the estate of the deceased for the maintenance, education and advancement in life of the plaintiff.
Background
The plaintiff is a 54-year-old primary school teacher. He was born on 6 June 1958. He was orphaned while quite young, and brought up by his aunt and uncle.
After completing high school he enrolled at the Kingston College of Advanced Education studying junior primary teaching. After graduation he found employment with the Department of Education and entered the teaching service.
The plaintiff has been employed continuously by the Education Department. He presently works as a junior primary school teacher.
In his early 20s he acquired an investment property at Mile End for $25,000. This property was sold in 1983 for $45,000 and the plaintiff applied the net proceeds of $25,000 to purchase a house at Gilles Street for $45,000.
In 1984 the plaintiff met the deceased, Ross Douglas Pfeiffer (“the deceased”). The deceased was born on 18 January 1921. He died on 10 April 2011. He was 90 years old at the date of his death.
Probate was granted on 8 September 2011 to the executors of the deceased’s estate, the first and second defendants, in respect of the deceased’s will executed 18 August 2010.
The statement of assets and liabilities filed with the application for probate discloses a net estate of approximately $3,500,000. The estate included real estate at St Georges and Stirling. The estate was the sole proprietor of the St Georges property. The estate was the legal proprietor of the Stirling property as a tenant in common with the plaintiff. The estate held a two-thirds interest and the plaintiff a one-third interest in the Stirling property. The balance of the estate consists of shares, paintings, antiques and a motor vehicle.
Pursuant to his will, the deceased made specific gifts by way of bequests of $25,000 to Veronica Bernadette Murphy, and $20,000 each to various charities. These bequests totalled $225,000. The deceased bequeathed his interest in the Stirling property to the plaintiff, and bestowed a further specific bequest of $100,000 on the plaintiff. The residue of his estate was left to the third defendant, Prince Alfred College Inc. The residue is valued at approximately $2,500,000.
The deceased was an only child. He never married. He had no children. He served in the army for some years. He was successful in business. By the time he met the plaintiff in 1984 he owned a restaurant at Norwood trading as “Erica’s”, and a florist shop trading as “Just Flowers” also in Norwood. By this time he did not take an active role in the day-to-day management of these businesses, which were run by managers. Apparently the florist business closed in 1987 and the restaurant closed in 1991. By that time, the deceased was, for all intents and purposes, retired.
When the plaintiff met the deceased, the plaintiff was 26 years old and the deceased was 64 years old. It appears that shortly after they met a romance developed. At that time the deceased was living at St Georges, and the plaintiff at Gilles Street. However they spent most of the time together when the plaintiff was not working. They would share the same bed at one or the other’s residence three or four times a week. They decided to purchase a house together.
In March 1988 they purchased the Stirling property as tenants in common for $294,000. It appears that the original intention was that they were to contribute equally to the purchase price. The plaintiff intended to fund his interest in the property through the sale of his Gilles Street property. However, at the time of the purchase of the Stirling property, he had not sold the Gilles Street property. Accordingly, the initial funding for the purchase of the Stirling property was provided by the deceased solely. The intention was that when the Gilles Street property was sold, the plaintiff would reimburse the deceased for half the purchase price of the Stirling property. As it transpired, the plaintiff failed to realise as much as he had hoped in the sale of the Gilles Street property, and he was only able to reimburse the deceased one-third of the purchase price. Thereafter the plaintiff and the deceased held the Stirling property as tenants in common with the deceased having a two-thirds interest and the plaintiff a one-third interest in the property.
The plaintiff moved into the Stirling property. Later in 1988 the plaintiff and the deceased commenced renovations at the Stirling property. At that time the plaintiff took up residence at the St Georges property. The renovations were completed in March 1989. At that time the deceased asked the plaintiff to live with him on a fulltime basis.
The plaintiff alleges that he accepted this invitation and moved in with the deceased at the St Georges property. He alleges that he and the deceased lived together at the St Georges property for the rest of the deceased’s life. They would typically live at the St Georges property during weekdays and use the Stirling property as a weekend house. I will come back to this topic.
In 1989 the plaintiff and the deceased held a party at the Stirling property. The party was a public acknowledgment, at least amongst their circle of friends, of the relationship between the plaintiff and the deceased.
The plaintiff alleges that from 1989 onwards, he and the deceased basically would spend all of their time together when the plaintiff was not working. He says he did most of the cooking and cleaning around both houses. He purchased, from his own funds, most of the food, groceries and general household supplies. He says the deceased was generous in making gifts to him from time to time of paintings, antiques and other artefacts. The deceased paid for them to take holidays such as cruises and trips overseas.
Over time their sexual relationship became less frequent as they grew older. However, they maintained a very tactile relationship with much physical contact.
The costs associated with the maintenance of the St Georges property were paid by the deceased. The plaintiff paid the bills for the Stirling property except for council, water, insurance and maintenance, which were shared between them.
The plaintiff and the deceased had many mutual interests including gardening, art and antiques, travel, music, entertaining and spending time with friends. They would often host large parties as well as smaller dinners at Stirling. There were also parties at St Georges. They dined out together regularly. While their finances were generally separate, in that they did not have a joint bank account, the deceased gave the plaintiff an access card for his savings account about 18 months to two years before his death, which permitted the plaintiff to withdraw cash for the deceased and permitted him to pay bills. The deceased also had a David Jones credit account on which the plaintiff was a joint signatory. The deceased permitted the plaintiff to use this account in a free and unrestricted fashion.
The deceased had various health problems as the years went by. The plaintiff cared for him and provided nursing and other assistance to him. He took time off work at various stages for this purpose. The deceased became increasingly frail and dependent upon the plaintiff.
The evidence
I heard evidence from the plaintiff, the second defendant, friends of the plaintiff and the deceased, namely, Dr Geoffrey Martin, Ms June McCarthy, Ms Nickola Ramsey and the Chair of the third defendant’s council, Mr Benjamin Tidswell. With the exception of one matter, I found all witnesses to have been truthful and their evidence constitutes a reliable basis to make findings of fact.
The plaintiff’s evidence
The one exception concerned the evidence of the plaintiff as to the value of his furniture and personal effects at the Stirling property. He gave evidence that these assets were worth approximately $20,000. Under cross-examination, however, he admitted that he had insured these assets for a sum of $405,400. He sought to explain the discrepancy on the basis that the insured value represented the replacement value of these assets, whereas his evidence as to their value was their sale value. No independent evidence was called as to the value of these assets, however, I consider it inherently unlikely that there would be such a discrepancy between the price at which these items could be sold and the cost of purchasing them. I consider that the sale value to the plaintiff of these assets is considerably higher than his evidence suggests. How much higher I cannot say. I accept, however, the proposition that he would be unable to sell them for the same price that it would cost him to acquire them from a dealer. Nonetheless, I consider it likely that he could sell these items for a considerably higher price than the sum of $20,000, given that he has insured them for over $400,000. I was left with the impression that, deliberately or otherwise, the plaintiff underestimated the true value of these assets. In reaching this conclusion, however, I acknowledge the difficulty in accurately estimating the value of such items. Notwithstanding the view I take of this matter, I am nonetheless prepared to accept the rest of the evidence given by the plaintiff. I do so because much of it was corroborated by other witnesses.
I reject the general attack made by the third defendant upon the plaintiff’s credit. It submitted that the plaintiff failed to make a full and frank disclosure of his financial and material circumstances. Apart from the criticism of the plaintiff’s evidence in relation to the value of his assets at the Stirling property, the attack focussed on his alleged failure to disclose fully the value of his pension and the Stirling property. I do not consider this was so. On the contrary, the basis for the challenge to the plaintiff’s evidence came from documents he had disclosed.
In relation to the value of his pension, he gave evidence that he had a superannuation policy with the SuperSA pension scheme, which would provide him with a pension of two-thirds of his salary from the date of retirement, and which he estimated was valued at $150,000. The third defendant submitted that the true value was well over $1,000,000. In my view, this criticism is unfounded. The plaintiff is not an actuary. The calculation of the net present value of a lifetime pension is difficult. The plaintiff’s annual statement from SuperSA at 30 June 2011 provided that his pension fund had a closing balance of $146,893.21. In the circumstances, I do not consider that the plaintiff’s evidence as to the pension’s value reflects any intention on his part to mislead the Court, or a failure to be full and frank in the disclosure of his financial circumstances. Likewise, in relation to the value of the Stirling property, the plaintiff gave evidence that the property was valued at between $900,000 and $1.2 million. The third defendant criticised this evidence on the basis that the plaintiff was aware of a “kerbside valuation” by Klemich Real Estate obtained by the first defendant in June 2011 of $1.4 to $1.5 million. Again, I do not consider the plaintiff’s failure in his evidence to refer to this document reflects adversely on his credit. He had discovered the document. The “kerbside valuation” differed markedly from the Registrar-General’s valuation of $960,000[1] and from a subsequent “kerbside valuation” by Bernard Booth obtained by the first defendant in March 2012 of between $900,000 and $925,000.[2] In the circumstances, where the plaintiff’s evidence as to the value of the Stirling property could only ever amount to an estimate, his valuation of the property at between $900,000 and $1.2 million does not evidence any intention on his part to mislead the Court. Further, I do not consider it constitutes a want of full and frank disclosure on his part in circumstances where he had discovered the Klemich valuation.
[1] Statement of Assets and Liabilities exhibited as annexure PRB 1 to the plaintiff’s affidavit of 8 December 2011.
[2] T 119.14.
Evidence of the plaintiff’s other witnesses
In addition to the evidence called by the plaintiff at trial, there was affidavit evidence admitted that detailed the relationship the plaintiff had with the deceased. These affidavits came from friends of the plaintiff and the deceased and generally corroborated the evidence of the witnesses called by the plaintiff as to the nature of the relationship of the plaintiff and the deceased.
Heather Michelle Cunningham, in her affidavit sworn 28 May 2012, deposes to knowing the deceased for 50 years and meeting the plaintiff around 25 years ago. She explains that her family spent many lunches and dinners with the plaintiff and the deceased, and every Christmas day with them. She describes them as a couple, in that as a couple, they would invite her and her family to lunches and dinner parties, and that her family would invite the plaintiff and the deceased, as a couple, into their home. She describes many birthday and Christmas gifts being exchanged between the plaintiff and the deceased, such as antiques and artworks, and them taking regular holidays together. She described the domestic relationship they shared, setting out that the plaintiff would run the two households, being the St Georges and Stirling households, and prepare meals and assist the deceased with his medication.
Irene Cunningham, in her affidavit sworn 28 May 2012, deposes to knowing the deceased as a family friend for 50 years and meeting the plaintiff approximately 25 years ago. She sets out that her family were often invited to lunches, dinners and parties at the St Georges property, which she describes as “Ross and Patrick’s home…”[3] She describes how the plaintiff and the deceased often took holidays together, and that her and her late husband had accompanied them on several holidays to Broome, Cairns and Tasmania. She understood the plaintiff and the deceased lived together as a family and had done so for the 25 years leading up to the deceased’s death.
[3] Affidavit of Irene Julia Cunningham, sworn 28 May 2012, [3].
Andrew John Mitchell and Sofia Orfanos in their joint affidavit sworn 23 May 2012, deposed to knowing the plaintiff and the deceased since 1996. They knew the plaintiff and the deceased as a loving couple in a long term committed relationship. They were invited to many parties and gatherings hosted by the plaintiff and the deceased, notably the annual ‘Tulips in Stirling’ party. They describe their admiration for the love and commitment shown by the plaintiff and the deceased, and the plaintiff’s commitment to caring for the deceased in his advanced years. They also describe the plaintiff and the deceased’s love of travelling.
Nerida Joy Russell in her affidavit sworn 2 May 2012 deposed to meeting the plaintiff about 10 or 11 years ago, while working as a teacher. She was soon invited to parties at the Stirling property hosted by the plaintiff and the deceased, and describes being entertained by the plaintiff and the deceased as a couple. She describes attending the tulip party, as well as various dinner parties hosted by the plaintiff and the deceased and says that it was obvious to her that the plaintiff and the deceased were a committed and loving couple. She describes the deceased as being extremely proud of the plaintiff. As she got to know the deceased better, the deceased would tell her about holiday plans he and the plaintiff had, and how lucky he was to have the plaintiff to care for him. She says that when the plaintiff and the deceased went on holidays together, she would tend their garden for them. She describes being under the impression that the plaintiff and the deceased “were in a long term, devoted, loving relationship in the manner of a married couple.”[4]
[4] Affidavit of Nerida Joy Russell, sworn 2 May 2012, [7].
Primary findings of fact
I make the following findings of fact:
·From about late 1989 to the deceased’s death in 2011 the plaintiff and the deceased lived at the St George’s property on weekdays and used the Stirling property on weekends.
·The plaintiff used the Stirling property as his postal address.
·At the date of trial the Stirling property had a value in the vicinity of $900,000 to $1 million.
·When the plaintiff turns 55 he will qualify for a lifetime pension. If he continues to work to 60 years of age the pension amount will be two-thirds of his retirement salary indexed for life.
·The plaintiff currently earns approximately $82,000 per annum from his employment with the Education Department and an additional $2,000 to $3,000 per annum by way of dividend income.
·The plaintiff owns his own car with an approximate value of $37,000.
·The plaintiff owns substantial art, furniture and other collectibles the value of which is difficult to assess but which I consider to be substantial and probably in excess of $100,000.
·The plaintiff has cash in the bank with a balance of around $90,000 (as at the date of trial).
·The plaintiff has a share portfolio worth approximately $30,000.
·Much of the paintings, furniture and other collectibles owned by the plaintiff result from gifts made to him by the deceased during the deceased’s lifetime.
·From 1989 onwards the plaintiff would perform most of the routine domestic work of the houses such as cooking and cleaning.
·The plaintiff took time off work over the years to care for the deceased.
Family Relationships Act 1975 (SA)
The first issue the Court must consider is whether a declaration should be made pursuant to s 11B of the Family Relationships Act that, as at 10 April 2011, the plaintiff was the domestic partner of the deceased.
Section 11B of the Family Relationships Act empowers the Court to declare that specified persons were, on a particular date, domestic partners, one of the other.
Section 11A defines “domestic partners” as follows:
A person is, on a certain date, the domestic partner of another person if he or she is, on that date, living with that person in a close personal relationship and—
(a) he or she—
(i) has so lived with that other person continuously for the period of 3 years immediately preceding that date; or
(ii) has during the period of 4 years immediately preceding that date so lived with that other person for periods aggregating not less than 3 years; or
(b) a child, of whom he or she and the other person are the parents, has been born (whether or not the child is still living at that date).
“Close personal relationship” is defined in s 11 to mean:
close personal relationship means the relationship between 2 adult persons (whether or not related by family and irrespective of their gender) who live together as a couple on a genuine domestic basis, but does not include—
(a) the relationship between a legally married couple; or
(b) a relationship where 1 of the persons provides the other with domestic support or personal care (or both) for fee or reward, or on behalf of some other person or an organisation of whatever kind.
Section 11B(3) provides that, when considering whether to make a declaration under that section, the Court must take into account all of the circumstances of the relationship between the persons concerned, including:
(a)the duration of the relationship;
(b)the nature and extent of common residence;
(c)the degree of financial dependence and interdependence, or arrangements for financial support;
(d)the ownership, use and acquisition of property;
(f)any domestic partnership agreement made under the Domestic Partners Property Act 1996;
(fa)any Part VIIIAB financial agreement made under the Family Law Act 1975 of the Commonwealth;
(g) the care and support of children;
(h) the performance of household duties;
(i) the reputation and public aspects of the relationship.
The plaintiff and the deceased were domestic partners
The third defendant does not oppose the making of a declaration as sought. The first and second defendant take no position on this issue.
I am satisfied that I should make a declaration in the terms sought by the plaintiff.
I am satisfied that the plaintiff and the deceased lived together as a couple on a genuine domestic basis continuously for a period of more than three years immediately preceding 10 April 2011, being the date of the deceased’s death.
I am satisfied that the plaintiff and the deceased lived together in a close personal relationship as defined by the Act for a period of approximately 26 years up to the death of the deceased, at the St Georges and Stirling properties. I am satisfied on the evidence that they lived principally at the St Georges property during weekdays, and spent most weekends at the Stirling property. I am satisfied that theirs was a relationship of mutual trust, affection and support. The fact of separate bedrooms at the St Georges property does not alter my conclusion. The decline in their sexual relationship as they grew older does not diminish the character of their continuing relationship as a couple living together on a genuine domestic basis. On the contrary, the developing ill health of the deceased during the latter years of his life meant that the plaintiff felt obliged to nurse and care for the deceased during his periods of illness and incapacity, in ways which reflected the depth and extent of his affection for the deceased. I am satisfied on the evidence that these feelings were reciprocated by the deceased. I was impressed by the evidence of Dr Martin, the deceased’s treating general practitioner, who gave evidence that but for the devotion and assistance provided to the deceased by the plaintiff, the deceased would have required the provision of professional nursing care to remain in the home, or would have been required to reside in a nursing home or aged care facility.
The plaintiff was far from financially dependent upon the deceased. He enjoyed fulltime moderately well paid employment. Nonetheless he enjoyed a lifestyle, funded by the deceased, which his income would not have supported. I am satisfied that they lived together in both properties as if each property constituted their homes. I reject any suggestion that the St Georges property was treated by them as the deceased’s property, and the Stirling property was treated by them as the plaintiff’s property. I do not consider the evidence supports such a conclusion. On the contrary, I consider that they had a shared commitment to living in each house in a way which was most conducive to the lifestyle they jointly chose to lead. This arrangement worked well with the deceased funding much of the couple’s lifestyle while the plaintiff attended to their respective domestic needs, including cooking meals, arranging parties, dinners and other social functions. Within a limited social circle, consistent with his traditional reserve and reluctance to live openly as a gay man, the deceased and the plaintiff acknowledged the true nature of their relationship. I am satisfied on the evidence I have heard from the plaintiff and the witnesses, Martin, McCarthy, Ramsey and Harris, as well as the affidavit evidence of Heather and Irene Cunningham, Mitchell, Orfanos and Russell, that the plaintiff and the deceased lived openly as a homosexual couple, at least within their circle of friends.
Inheritance (Family Provisions) Act 1972 (SA)
The second issue the Court must address is whether it should make an order pursuant to s 7 of the Inheritance (Family Provisions) Act, that such provision as the Court deems fit be made out of the estate of the deceased for the maintenance, education and advancement in life of the plaintiff.
By reason of the provisions of s 6(ba), the plaintiff, as the domestic partner of the deceased, is entitled to claim a benefit under the Act. Pursuant to s 7(1) of the Act, the Court may make such order as it thinks fit out of the estate of a deceased person for the maintenance, education or advancement of a person entitled to claim the benefit of the Act, if the Court is satisfied that person is left without adequate provision for his proper maintenance, education or advancement in life.
The exercise undertaken by the Court requires it to carry out what has been described as a two-stage process. The first stage calls for a determination of whether the plaintiff has been left without adequate provision for his proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the plaintiff, requires the Court to decide what provision ought to be made out of the deceased’s estate for the plaintiff. The first stage has been described as the “jurisdictional question”.[5]
[5] Singer v Berghouse (1994) 181 CLR 201 at 208 – 209.
In deciding whether the deceased failed to make adequate provision out of his estate for the proper maintenance of the plaintiff, consideration must be given to the meaning of the words “adequate” and “proper”. They are relative terms. Whether they are satisfied must be decided having regard to all the circumstances of the case. There are no fixed standards, and the Court is left to form opinions and make value judgments upon the basis of its own general knowledge of social conditions and standards.[6]
[6] Bowyer v Wood (2007) 99 SASR 190 at 201 [39]; see also Graham v Graham [2011] NSWSC 504 at [34] – [35].
In Bowyer v Wood[7] this Court considered the principles for determining whether adequate provision is made for the proper maintenance, education or advancement in life of a person entitled to claim under the Act. Debelle J, with whom Nyland and Anderson JJ agreed, said:[8]
[7] (2007) 99 SASR 190.
[8] (2007) 99 SASR 190 at 201 – 204 [40] – [42].
The word “proper” connotes something different from the word “adequate”: Goodman v Windeyer (at 497). The word “proper” connotes an ethical position as to what allowance should be made: Re Harris [1936] SASR 497 at 500 applying Allardice v Allardice (1910) 29 NZLR 959. Adequate provision for the proper maintenance of a child is not limited to providing what is sufficient for a basic subsistence or satisfying the mere needs of that child. As Salmond J said in Welsh v Mulcock [1924] NZLR 673 at 685:
[T]he testamentary duty of a man towards his family is not limited to a merely eleemosynary provision sufficient to provide the necessities of existence. This may be the measure of the legal obligation of a husband or a father in his lifetime under the Destitute Persons Act, but it is not the measure of that moral obligation — that offıcium pietatis, as the Roman lawyers called it — which he owes to his family in respect of the testamentary disposition of his estate, and which is recognized and enforced by the Family Protection Act.
The Privy Council commented on the distinction between the words “adequate” and “proper” in Bosch v Perpetual Trustee Co Ltd (1938) 38 SR (NSW) 176; [1938] AC 463 at 476 in these terms:
The use of the word “proper” in this connection is of considerable importance. It connotes something different from the word “adequate”. A small sum may be sufficient for the “adequate” maintenance of a child, for instance, but, having regard to the child’s station in life and the fortune of his father, it may be wholly insufficient for his “proper” maintenance. So, too, a sum may be quite insufficient for the “adequate” maintenance of a child and yet may be sufficient for his maintenance on a scale that is “proper” in all the circumstances. A father with a large family and a small fortune can often only afford to leave each of his children a sum insufficient for his “adequate” maintenance. Nevertheless, such sum cannot be described as not providing for his “proper” maintenance, taking into consideration “all the circumstances of the case” as the subsection requires shall be done.
Those passages highlight how what might be considered to be an adequate provision for proper maintenance of a child will vary according to all relevant circumstances. The needs of the plaintiff are not considered in a vacuum. The size of the estate is relevant when considering what is an adequate provision for the proper maintenance of a child.
It is well established that the word “proper” is not intended to give the court power to rewrite the will in accordance with its own ideas of justice and fairness. Instead, the use of the word “proper” is intended to require the adequacy of the provision which has been made to be determined by reference to all relevant circumstances including the size of the estate: Worladge v Doddridge (1957) 97 CLR 1 at 16-17 per Kitto J who added, relying on Bosch v Perpetual Trustee Co Ltd:
In Bosch’s case the Privy Council corrected this misconception by insisting that proper maintenance is not to be translated as adequate maintenance, and that a judgment as to the maintenance which is “proper” for a particular applicant in the circumstances of his case is necessarily a judgment as to what maintenance the applicant ought to have in those circumstances, and not what he or she needs. It is only in that sense that it is correct to say that Bosch’s case adopted an “ethical” rather than an “economic” view. The hypothesis of a just but not loving testator is resorted to, not for the purpose of determining what would have been the ideally fair manner of disposing of the testator’s estate, but only for the purpose of determining what was sufficient for the maintenance and support which the circumstances make it right that the applicant should have, as distinguished from what was sufficient for the maintenance and support which the applicant may be considered to need. [Citations omitted.]
In McCosker v McCosker (1957) 97 CLR 566 at 571-572 Dixon CJ and Williams J identified the relevant considerations in these terms:
The question is whether, in all the circumstances of the case, it can be said that the respondent has been left by the testator without adequate provision for his proper maintenance, education and advancement in life. As the Privy Council said in Bosch v Perpetual Trustee Co (Ltd) the word “proper” in this collocation of words is of considerable importance. It means “proper” in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator’s ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance, education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator’s testamentary dispositions to the necessary extent. [Citations omitted.]
As will have been noticed, there is continued reference to the size of the estate as a relevant factor. In the case of large estates, provision can be made for the well-to-do but that consideration is subordinated to the dominant purpose of determining what provision would be made by a just testator making proper provision for the maintenance, education and advancement of his family: Lieberman v Morris (1944) 69 CLR 69 at 91-92 per Williams J.
In Singer v Berghouse, Mason CJ, Deane and McHugh JJ reiterated the above principles in these terms (at 209):
The first question is, was the provision (if any) made for the applicant “inadequate for [his or her] proper maintenance, education and advancement in 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. Ltd. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for 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’s 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.
Considerations relevant to the determination of an adequate provision were explained by Callinan and Heydon JJ in Vigolo v Bostin (at [122]):
Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors.
With respect, that passage is entirely consistent with the relevant considerations identified in earlier decisions.
I respectfully adopt this analysis.
At trial, the plaintiff expressly disavowed propounding a claim on the basis that he has been left without adequate means to meet his financial needs. Instead, he propounded his claim on the basis that he has been left without adequate provision for his proper maintenance and advancement in life,[9] having regard to his moral claim to a greater share of the deceased’s estate. This submission, in turn, involves a consideration of what, if any, moral duty the deceased owed to the plaintiff to make proper provision for him from his estate.
[9] The plaintiff does not propound a claim based on considerations of his education.
In Vigolo v Bostin[10] the High Court held that when making the value judgment, required on the jurisdictional question, of whether adequate provision had been made by a testator in favour of an applicant under the Act, a court should have regard to considerations of moral claim and moral duty. It is a consideration which connects the general but value-laden language of the Act to the community standards which inform its practical application. Moral duty and moral obligation may, according to circumstances, be relevant and within the contemplation of the Act, but a moral claim cannot be a claim founded upon considerations not contemplated by the Act, nor a substitute for the text of the Act.[11]
[10] (2005) 221 CLR 191.
[11] Vigolo v Bostin (2005) 221 CLR 191 per Gleeson CJ at 199 – 205, and per Callinan and Heydon JJ at 228 – 230.
The basic principle underlying the Act was explained by Salmond J in Re Allen (Deceased)[12] in these terms:[13]
The provision which the Court may properly make in default of testamentary provision is that which a just and wise father would have thought it his moral duty to make in the interests of his widow and children had he been fully aware of all the relevant circumstances.
[12] [1922] NZLR 218 at 220 – 221.
[13] [1922] NZLR 218.
This approach was adopted by the Privy Council in Bosch v Perpetual Trustee Co Ltd[14] and approved by the High Court in Vigolo v Bostin.[15]The principle is equally applicable today to the obligation of a testator to his or her domestic partner.
[14] [1938] AC 463 at 479.
[15] (2005) 221 CLR 191 at 200.
The third defendant - a competing claim?
The plaintiff submits that in determining whether adequate provision was made by the deceased in his will for the proper maintenance and advancement of the plaintiff, it is necessary to undertake that assessment on the basis that there are no competing moral claims upon the testator’s bounty. He submits that the third defendant has no moral claim on the deceased’s estate.[16] The absence of a moral claim of that kind on the part of the third defendant does not mean that the entitlement of the third defendant under the terms of the deceased’s will does not constitute a competing claim for the purposes of the determination by the Court of whether adequate provision has been made for the proper maintenance and advancement of the plaintiff from the deceased’s estate. The Court must have regard to any special interest the evidence demonstrates the deceased had in the third defendant. The school may be able to show a strong connection with the deceased and the capacity to make charitable gifts is an important part of freedom of testation. As noted in Smilek v Public Trustee,[17] the court is prohibited from interfering with the distribution of an estate save to the extent necessary to ensure adequate provision.
[16] See Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494 at 510; Hughes v National Trustees, Executors and Agency Company of Australasia Ltd (1978 – 79) 143 CLR 134 at 148 – 149; In Re Besterman [1984] 1 Ch 458 at 464 – 465; Bowyer v Wood (2007) 99 SASR 190 at 206 – 207.
[17] [2008] NSWCA 190 at [32].
The third defendant called Mr Tidswell to give evidence. He gave evidence of the deceased’s interest in the school. His evidence was derived entirely from the school’s records. Those records disclose that many years ago, the deceased played golf and tennis for the old scholars. In the last five years of his life, the deceased donated some $1,050 to the school. This is the only evidence of any financial contribution he made in support of the school. Plainly, he demonstrated fondness for his old school. When he commenced to consult Dr Martin as his treating general practitioner, he was pleased to know that Dr Martin was an old scholar. He discussed the school with him occasionally. He kept up with the school’s quarterly magazine. Importantly, in previous wills made in 1985, 2003 and 2007, the third defendant was the residual beneficiary of his estate. I accept that the school cannot establish a competing moral claim on the deceased’s bounty but the evidence demonstrates that he did have a genuine interest in the school, and wished to make substantial provision to it from his estate. I consider his intention was sincere and not motivated by a desire to deprive the plaintiff.
Did the deceased make adequate provisions for the plaintiff?
The third defendant opposes the plaintiff’s application. It submits that the plaintiff has failed to demonstrate that he is a person who has been left by the deceased in need of further provision. On the contrary, it submits that the plaintiff is affluent with total assets between $1.56 and $2.11 million. In addition he has a substantial salary and a generous pension which has left him free of financial anxiety in circumstances where he has no dependents. Moreover, it submits that he has been placed in this position due to the generosity of the deceased over the course of their relationship. Accordingly it says the plaintiff has no moral right or claim to any additional provision out of the deceased’s estate.
But the question is whether, in leaving the school over two-thirds of his estate and leaving the plaintiff with less than one quarter, the deceased failed to make adequate provision for the proper maintenance and advancement of the plaintiff.
In my judgment, he failed to do so. I reach this view for the following reasons.
The estate is substantial.
In Re Buckland[18] Adam J dealt with a claim by a daughter, where an estate worth almost five million pounds was largely left to charities, after modest provision for the daughter, widow and son. His Honour found that the concepts of “maintenance and support” meant that the daughter of an exceptionally wealthy father should receive a high degree of comfort and freedom from anxiety or provision for contingencies, even to an extent which in other cases may seem somewhat extravagant. In short, the greater the estate, the more contingencies, even remote contingencies, may be provided for in the assessment of proper maintenance and support.[19] An application for leave to appeal was refused by the High Court, which found no error in the interpretation of the applicable principles.[20]
[18] [1966] VR 404.
[19] In Re Buckland [1966] VR 404 at 415.
[20] Buckland v Trustees, Executors and Agency Co Ltd (1966) 40 ALJR 164.
In Lloyd-Williams v Mayfield[21] Bryson JA, with whom Giles JA and Stein AJA agreed, observed that financial need is usually prominent in family provision cases due to the limited scale of resources available, but financial need should not be considered an underlying legal limit on provision. In that case, the lack of any hardship on the beneficiary of the estate allowed the focus to shift to advancement in life, or provision for future needs such as housing, a fund for independent income and a fund for contingencies, rather than on “needs” as such.
[21] (2005) 63 NSWLR 1.
In Anasson v Phillips[22] Young J said that in the case of large estates there is scope for a more liberal assessment of moral duty which makes relevant the particular lifestyle enjoyed by a plaintiff which was made possible by a wealthy testator.
[22] (Unreported, Supreme Court of New South Wales, Young, J, 4 March 1988).
I am satisfied the plaintiff has a strong moral claim. The plaintiff and the deceased lived together in a domestic partnership of mutual love and support for 26 years until the testator’s death. There was a very significant age gap between them. At the time their relationship commenced, the plaintiff was 26 years of age. The testator was 64 years of age. I am satisfied that while the plaintiff maintained his own career throughout the period of the relationship, he devoted the time when he was not teaching to their domestic relationship. That included not only cooking, cleaning, and shopping, organising much of their social life, as well as taking time off work to care for the testator during his illnesses and incapacities, take him to medical appointments, and nurse him in a way which allowed him to remain at home.
The third defendant submitted that any analogy with a widow’s claim was inapposite as the plaintiff had not brought up children, sacrificed his career or contributed to the amassing of the deceased’s assets. But in Singer v Berghouse[23] Mason CJ, Deane and McHugh JJ found that proper regard must be had to the non-financial contributions made by one party or another to a marriage or marriage-like relationship, which are not directly productive of a monetary return.
[23] (1994) 181 CLR 201 at 212-213.
Finally, the plaintiff had a reasonable expectation that he would be the principal, if not the sole, beneficiary of the deceased’s estate. I am satisfied that the plaintiff’s expectation was created, at least in part, by statements made to him over the years by the deceased. I admitted evidence of those statements not for the purposes of establishing their truth, but merely for the purposes of establishing the basis of the plaintiff’s expectation. I find the plaintiff’s expectation was reasonably held. I find that the plaintiff did not act on his expectation in the sense that he did anything or refrained from doing anything in expectation of a benefit from the deceased’s estate. On the contrary, I consider that his acts and omissions with respect to the deceased solely were the result of the affection and responsibility he felt for the deceased. Nonetheless, the authorities establish that the plaintiff’s expectations are a relevant consideration in the determination of whether adequate provision has been made for his proper maintenance and advancement in life.[24]
[24] Vigolo v Bostin (2005) 221 CLR 191 at 228 – 229 [115].
In my view, the provision made by the deceased in his will for the plaintiff is inadequate to allow him to enjoy anything approximating the lifestyle they enjoyed together over the duration of their 26-year relationship. I am satisfied on the evidence that the costs of maintaining either the St Georges or Stirling properties for the balance of the plaintiff’s life, cannot be met from the gift of $100,000 made by the deceased. The costs of maintaining each property is substantial. The evidence does not permit any precise calculation of the costs. The plaintiff gave evidence that the monthly cost of maintaining the properties was in excess of $5,000 each. I accept that these are no more than estimates of a rough kind. Nonetheless, I am satisfied that these estimates have some basis in fact given the expenses that have been incurred by the first and second defendant in administering the estate since the testator’s death.[25] I am satisfied that the expense of maintaining even one of the properties would see the bequest of $100,000 exhausted long before the plaintiff’s death. I explain the basis of this finding later in these reasons. Further the bequest makes no provision for the contingencies of life.
[25] See the Schedule of the plaintiff’s expenditure for the period 10 April 2011 to 30 May 2012 exhibited to the affidavit of the first and second defendants sworn 8 June 2012 as part of annexure PMFH 1.
The plaintiff is left in a position of some affluence. He owns the Stirling property unencumbered. I am satisfied that this property has a value in the vicinity of $900,000 to $1 million. I reach this conclusion on the basis of the Valuer-General’s valuation as set out in the Statement of Assets and Liabilities.[26] This valuation I consider to be conservative given that it dates from 2011. The plaintiff owns a BMW convertible worth around $35,000. He has an extensive collection of art, antiques and other collectibles, whose value I am unable to determine, but which I am satisfied is significant. He owns shares worth approximately $30,000. He has cash resources of some $90,000 mostly comprising the balance of the $100,000 bequest. He has a salary of over $83,000 gross per annum, and an income stream from dividend and interest payments of $2,000 to $3,000 per year. On his 55th birthday he is entitled to a lifetime pension. If he works to 60 years of age this pension benefit equals two‑thirds of his retirement salary indexed for life. He has no liabilities or dependents. He has suffered from organic depression for many years which I understand is managed well enough not to interfere with his career. He has private health cover.
[26] Annexed as Exhibit PRB 2 to the plaintiff’s affidavit of 8 December 2011.
Nonetheless, I am satisfied that adequate provision for his maintenance and advancement in life in the circumstances of this estate, where there is no competing moral claimant, requires that the plaintiff be left with sufficient to live at the Stirling property after a fashion that bears some resemblance to the lifestyle he enjoyed over the length of his relationship with the deceased. The bequest of $100,000 is inadequate for that purpose. Further, consistent with the approach I take to the issue of the deceased’s moral obligation to the plaintiff, I do not consider that the plaintiff should have to realise assets accumulated during his life with the deceased in order to fund his future living expenses. Those assets, in particular art and furniture, are fundamental to the style of life the plaintiff enjoyed with the deceased. On the same basis, I do not consider that the plaintiff should have to make any additional provision from his present or future income to meet these expenses. While it is the case that the plaintiff cannot expect, and is not entitled to, provision from the deceased’s estate that will maintain exactly the luxurious life he enjoyed with the deceased while he was alive, he is entitled to be maintained in a reasonable approximation of comfortable affluence that I consider to be his moral right by reason of the long and close domestic relationship he had with the deceased.
What provision should be made for the plaintiff from the deceased’s estate?
The plaintiff gave evidence that he wished to have ownership of both the St Georges and Stirling properties. He says these properties have been his home for many years, they form a great part of his life, and he does not feel as if he could give them up. As I have found, the plaintiff has lived in both properties as his home for over two decades. Nonetheless, I do not consider he is entitled to have the Court re-write the deceased’s will to gift the St Georges property to him as well as the deceased’s interest in the Stirling property. The Court must be vigilant in guarding against a natural tendency to reform the testator’s will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of the plaintiff.[27] I am only prepared to interfere in the testamentary disposition made by the deceased to the extent necessary to ensure adequate provision for the plaintiff’s proper maintenance and advancement in life. That does not include allowing him to maintain precisely the same lifestyle he enjoyed with the deceased. I consider it does require that he have the security of his own residence and the means to maintain himself in that residence in an appropriate fashion which reflects in a reasonable way his previous lifestyle. But, in effect, to rewrite the will to provide the plaintiff with both houses, would not be to ensure adequate provision for his proper maintenance, but rather to ensure that he continues to enjoy the luxurious lifestyle the deceased provided for him while he was alive. That would represent an impermissible exercise of the power conferred by s 7 of the Act.[28]
[27] Cooper v Dungan (1976) 50 ALJR 539 per Steven J at 542.
[28] Horne v Horne (unreported, Supreme Court of New South Wales, Kearney J, 21 December 1988).
I am satisfied the deceased was astute. He made a number of wills. None of them included bequesting the St Georges property to the plaintiff. Clearly he intended that property to form part of his residuary estate.
It is plain that the deceased intended the plaintiff should enjoy the security of the Stirling property as his own. However, in my view, he failed to provide the means by which the plaintiff could continue to do so in a style which he was entitled to, by reason of the moral obligation the deceased owed him, having regard to all the relevant circumstances. It is proper that the Court exercise the power conferred upon it to adjust the will to rectify this failing by the deceased in the exercise of his testamentary rights.
Even allowing for the plaintiff’s own financial resources, I consider that a bequest of $1,000,000 is necessary to enable him to continue to live at Stirling and maintain the property as it has been since 1988, as well as to make some provision for contingencies.
I arrive at this figure on a broad-axe basis. However, it is not an entirely unscientific calculation.
The plaintiff’s evidence estimating his future expenses was as follows:[29]
[29] Plaintiff’s affidavit sworn 8 December 2011 paragraph 95.
ITEM TOTAL Monthly Amount CANDLEWOOD (STIRLING) ST GEORGES PROPERTY Food $1,000.00 $1,000.00 Household supplies $500.00 $500.00 House repairs $500.00 $500.00 Household contents insurance $40.00 $90.00 Council Rates $270.00 180.00 Water Rates $250.00 200.00 Water levy $ Electricity $150.00 $500.00 Telephone $100.00 $40.00 Mobile $40.00 $40.00 Internet $ Motor vehicle - Petrol $100 BMW $100.00 Jaguar - Maintenance $70.00 $60.00 - Registration $70.00 $80.00 - Insurance $70.00 $100.00 Private Health Insurance $140.00 $140.00 Fare / car parking Clothing and shoes $200.00 $200.00 Medical, dental and optical (not including private health premiums) $10.00 $10.00 Entertainment / hobbies $150.00 $150.00 Holidays $500.00 $500.00 Chemist / pharmaceuticals $100.00 $100.00 Gardening / lawnmowing $800.00 100.00 Cleaning (house/pool) $120.00 $300.00 Repairs - furnishing and appliances $100.00 $100.00 Dry cleaning $20.00 $20.00 Books and magazines $30.00 $30.00 Gifts $100.00 $100.00 Hairdressing, toiletries $100.00 $100.00 Other necessary commitments (specify) medical insurance $ TOTAL $5,530.00 $5,240.00
Some of these expenses are very general estimates. Some of these expenses represent items the plaintiff purchased from his own financial resources during the deceased’s lifetime, e.g. the bills for Stirling except for council and water rates, insurance premiums, and maintenance. Some of them are expenses that were met jointly during the deceased’s lifetime, e.g. council and water rates, insurance premiums, and maintenance for Stirling. A number of these items such as food, private health insurance, clothing and shoes, medical insurance, pharmaceutical expenses, entertainment, holidays, dry cleaning, books and magazines, gifts and toiletries are single expenses which for the purpose of his evidence the plaintiff has split between the two properties. I have made allowance for these matters. Recognition must be given to the fact that the plaintiff and the deceased generally lived at Stirling only on weekends but in the future the plaintiff will live there permanently. This will increase the expense of residing at Stirling. Taking all this into account, I consider the sum of $4,000 per month represents a reasonable estimate of the expenses related to the Stirling property.
Allowing a figure of $4,000 per month for the expenses associated with the Stirling property, this translates into a figure of $923 per week. Adopting a multiplier of 898,[30] representing the value of the regular loss of $1 per week to a male aged 54 ceasing at death and utilising compound interest of three percent per annum, produces a figure of $828,854. I would then allow $150,000 for contingencies. I adopt this sum on a broad axe basis having regard to the plaintiff’s age and likely life expectancy of 79 years.[31] This produces a figure of $978,854. I round this up to $1,000,000.
[30] Luntz, Assessment of Damages for Personal Injury and Death, 4th ed, table 3A.
[31] Luntz, Assessment of Damages for Personal Injury and Death, 4th ed, table 6.
It is just and convenient to adjust the testamentary disposition made by the deceased by effectively varying the monetary bequest made to the plaintiff by the deceased from $100,000 to $1,000,000. This will result in a corresponding reduction in the residuary estate bequeathed to the third defendant.
Conclusion
I would grant the plaintiff’s application. I would make a declaration pursuant to s 11B(2) of the Family Relationships Act 1975 (SA) that the plaintiff was, at 10 April 2011, the domestic partner of Ross Douglas Pfeiffer. I would order that pursuant to s 7 of the Inheritance (Family Provision) Act 1972 (SA), in lieu of the provision in clause 4 of the deceased’s will for the gift and bequest of $100,000 to the plaintiff, the plaintiff is to receive the sum of $1,000,000. Provision of the additional sum of $900,000 is to be made from the residue of the deceased’s estate. I direct the parties to bring into Court minutes of order that reflect my reasons.
I would hear the parties as to costs.
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