Broadhead v Prescott - [2015] SASC 34

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
BROADHEAD & ORS v PRESCOTT & ORS
[2015] SASC 34
Judgment of Judge Dart a Master of the Supreme Court
27 February 2015
SUCCESSION - FAMILY PROVISION - REQUIREMENT FOR ADEQUATE AND PROPER MAINTENANCE - DUTY OF TESTATOR - DUTY TO CHILDREN
The plaintiffs are the children of the deceased - the whole of the estate was left to two of their siblings - the plaintiffs claim they were left without adequate provision for their proper maintenance, education or advancement in life - application pursuant to Inheritance (Family Provision) Act 1972.
Held: Application granted - each plaintiff to obtain a provision out of the estate in the amount of $47,500.
Inheritance (Family Provision) Act 1972 (SA) ss 7, 8 and 14; Supreme Court Civil Rules 2006 (SA) r 316, referred to.
Blunden v Blunden & Anor [2008] SASC 286; Bosch v Perpetual Trustee Co Ltd [1938] AC 463; Bowyer v Wood (2007) 99 SASR 190; Coates v National Trustees Executors and Agency Company Limited and Another (1956) 95 CLR 494; Devereaux-Warnes v Hall (No 3) (2007) 35 WAR 127; Hughes v National Trustees, Executors and Agency Co of Australasia Limited (1979) 143 CLR 134; Re Allen (deceased) [1922] NZLR 218; Singer v Berghouse (1994) 181 CLR 201; Vigolo v Bostin and Others (2008) 221 CLR 191; White v Barron and Another (1979) 144 CLR 431; Worladge and Another v Doddridge and Others (1957) 97 CLR 1, considered.

BROADHEAD & ORS v PRESCOTT & ORS
[2015] SASC 34
JUDGE DART:

These reasons deal with a claim made under the Inheritance (Family Provision) Act 1972 (SA) (“the Act”) in respect of the estate of the late Percy Broadhead (“the deceased”). The claim was brought by three of the deceased’s children. As the estate was valued at less than $500,000, the matter was tried on a summary basis.[1] In the result, for the reasons that follow, a provision should be made out of the estate for each of the three plaintiffs in the amount of $47,500.
[1] Supreme Court Civil Rules 2006 (SA), r 316.
Background
The deceased, a widower at the time of his death, passed away on 11 November 2011 leaving six adult children. I will refer to each of the children by their given names and mean no disrespect in doing so.
The eldest child, Michael, played no part in these proceedings and has not sought provision out of the estate. The plaintiffs are Johnathan, Ernest (Bob) and Emily, each of whom resides in the United Kingdom. The defendants are Stephen and Sheena Prescott and Kathleen Sazevski. Sheena and Kathleen are daughters of the deceased and Stephen, Sheena’s husband, is the executor named in the will. The net value of the estate available for distribution was $333,423.81.
By his will the deceased left all of his estate to Sheena and Kathleen. There is some family history which may explain why the deceased adopted this approach. The deceased and his wife emigrated from the United Kingdom in 1973. At that time the three plaintiffs were young adults who had employment in the United Kingdom and remained there. The two defendant daughters were young teenagers and moved to Australia with their parents.
Sheena and Kathleen took their father to see a solicitor in November 2007 for the purpose of preparing a will. The will was executed on 8 November 2007 and was admitted to Probate on 2 February 2012. Stephen was the sole executor named in the will. These proceedings were served on the executor on 30 July 2012.
As at the date of the trial of this action the whole of the estate had been distributed to Sheena and Kathleen. The estate comprised some monies held in a bank account, but primarily comprised the proceeds of the sale of the deceased’s residential property. The proceeds were distributed on 1 June 2012, being the date of the settlement of the contract for the sale of the property. On that date Sheena and Kathleen each received the sum of $164,039.37.
One unusual and regrettable aspect of this matter relates to an undertaking given to the plaintiffs by Sheena and Kathleen. By letter dated 14 June 2012 their solicitors advised the plaintiffs’ solicitors that each of Sheena and Kathleen undertook to hold the sum of $75,000 and not divest that money without reasonable notice of an intention to do so. Those monies were part of the estate that had been distributed to them. The plaintiffs’ solicitors responded by letter dated 4 July 2012 noting the undertaking that had been given. Notwithstanding the undertaking, each of Sheena and Kathleen then proceeded to dissipate the money the subject of the undertaking without any notice to the plaintiffs.
Their solicitor wrote a letter, on 30 May 2014, explaining that, notwithstanding the undertaking, the monies had been spent by the second and third defendants. The letter went on to say that there was no money in the estate to satisfy any judgment that might be obtained by the plaintiffs.
The conduct of Sheena and Kathleen in disregarding their undertaking is probably explained by their attitude to the claims of the plaintiffs. They were openly hostile to the claims of their siblings and exhibited a sense of entitlement in respect of the provisions of the will of the deceased. Neither exhibited any contrition in respect of the breach of the undertaking. On the evidence, while it is not possible to reach a concluded view, it is more than possible that the approach of Sheena and Kathleen was simply to spend all of the monies from the estate to frustrate the claims of the plaintiffs.
The legal issues
As children of the deceased the plaintiffs are entitled to bring a claim seeking a provision out of the estate. The claim was brought within time. The claim is brought pursuant to s 7 of the Act, which provides as follows:
7—Spouse and persons entitled may obtain order for maintenance etc out of estate of deceased person
(1)     Where—
(a)     a person has died domiciled in the State or owning real or personal property in the State; and
(b)     by reason of his testamentary dispositions or the operation of the laws of intestacy or both, a person entitled to claim the benefit of this Act is left without adequate provision for his proper maintenance, education or advancement in life,
the Court may in its discretion, upon application by or on behalf of a person so entitled, order that such provision as the Court thinks fit be made out of the estate of the deceased person for the maintenance, education or advancement of the person so entitled.
(2)Notice of an application under subsection (1) of this section shall be served by the applicant on the administrator of the estate of the deceased person, and on such other persons as the Court may direct.
(3)The Court may refuse to make an order in favour of any person on the ground that his character or conduct is such as, in the opinion of the Court, to disentitle him to the benefit of this Act, or for any other reason that the Court thinks sufficient.
(4)The Court may, in making any order under this Act, impose such conditions, restrictions and limitations as it thinks fit.
(5)If, in respect of an application under subsection (1) of this section, it appears to the Court that the matter would be more appropriately determined by proceedings outside the State, the Court may (without limiting the powers conferred on it by the preceding provisions of this section) refuse to make an order under this section or adjourn the hearing of the application for such period as the Court thinks fit.
(6)In making the order the Court may, if it thinks fit, order that the provision shall consist of a lump sum or periodic or other payments or a lump sum and periodic or other payments.
As mentioned above, the whole of the estate was distributed before these proceedings were commenced. That was so even though the proceedings were commenced within the six month time limit provided by s 8 of the Act. It is for that reason that s 14 is also relevant, and it provides as follows:
14—Liability of administrators after distribution of estate
(1)An administrator of the estate of a deceased person who has lawfully distributed the estate or any part thereof shall not be liable to account for that estate or that part thereof, as the case may be, to any person claiming the benefit of this Act, unless the administrator had notice of the claim at the time of the distribution.
(2)     For the purposes of this section, notice of the claim—
(a)     shall be in writing signed by the claimant or his solicitor; and
(b)     shall lapse and be incapable of being renewed unless, before the expiration of three months after the administrator receives notice of the claim a copy of an application by the claimant for the benefit of this Act has been served on him.
(3)Subsection (1) of this section shall not prevent the Court from ordering that any provision under this Act be made out of the estate, or any part thereof, after it has been distributed.
The principles to be applied in determining a claim are well‑established and beyond any reasonable dispute. They may be stated as follows:
1The statute requires the Court to carry out a two-staged process. The first stage requires a determination of whether the applicant has been left without adequate provision. If that is decided in the affirmative, the Court is then required to determine what would be an appropriate provision.[2]
2The legislation is remedial in character and is to be construed to give the most complete remedy which the phraseology will permit.[3]
3The words “adequate” and “proper” are relative. The word “proper” connotes something different from the word “adequate”. It connotes an ethical position as to what allowance should be made. Adequate provision for proper maintenance is not limited to providing what is sufficient for basic subsistence.[4]
4The time for considering whether the applicant has been left without adequate provision is the date of the death of the testator.[5]
5Consideration of moral claims and moral duty are useful as a guide to the meaning of the statute and they connect the general value-laden language of the statute to community standards which give it practical meaning.[6]
6The provision which the Court may properly make is that which a just and wise testator would have thought it his or her moral duty to make had he or she been fully aware of all the relevant circumstances.[7]
[2]    Singer v Berghouse (1994) 181 CLR 201 at 208.
[3]    Worladge and Another v Doddridge and Others (1957) 97 CLR 1 at 9.
[4]    Bowyer v Wood (2007) 99 SASR 190 at 201.
[5]    Coates v National Trustees Executors and Agency Company Limited and Another (1956) 95 CLR 494.
[6]    Vigolo v Bostin and Others (2008) 221 CLR 191 at 204.
[7]    Re Allen (deceased) [1922] NZLR 218 at 220.
The Act does not provide for a simple economic test. A moral or ethical consideration of the circumstances has been accepted as the correct approach. That approach is made necessary by the use of the word “proper” in the statute. In Bosch v Perpetual Trustee Co Ltd[8] the Privy Council made clear that an economic approach to the interpretation of the section was not the correct approach. It found that a judgment as to the maintenance which is “proper” for a particular applicant in the circumstances of a case is necessarily a judgment as to what maintenance the applicant ought to have in the circumstances and not what he or she needs.[9]
[8] [1938] AC 463.
[9] Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 478.
The moral approach was approved by the High Court in Worladge and Another v Doddridge and Others where Kitto J said:^[10]
What is proper is to be tested by reference to the provision which in all the circumstances of a case satisfies, but does not exceed, the requirements of moral justice in regard to those particular purposes.
The purposes, of course, were provision for the proper maintenance, education and advancement in life.
[10] (1957) 97 CLR 1 at 18.
Notwithstanding that the courts have adopted a moral approach to determining the statutory questions, the question of need still has a role to play. The concept of need brings with it economic considerations.
In Devereaux-Warnes v Hall (No 3) Buss JA said:[11]
Need has also been used in the context of a value judgment or conclusion, namely, that the claimant is “in need” of maintenance, etc. because inadequate provision has been made for his or her proper maintenance, etc: see Gorton v Parks (1989) 17 NSWLR 1 at 10-11 per Bryson J.
[11] (2007) 35 WAR 127 at 146.
His Honour Buss JA went on to say:[12]
Although the existence or absence of “needs” which the claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased’s estate was not such as to make adequate provision for his or her proper maintenance.
[12] Devereaux-Warnes v Hall (No 3) 35 WAR 127 at 146.
Consideration of an applicant’s needs, therefore, must be considered in the context of the statutory formulation. However, in the usual case, where need is established and there is nothing out of the ordinary in the relationship between the applicant and the deceased, it might be expected that persons in need of provision for their adequate and proper maintenance would succeed on a claim. In this case, each of the applicants has established genuine need.
What the Court has to determine is what the moral duty of the testator was at the time of his death. In determining whether or not an applicant has been left without proper provision it is necessary to have regard, to some extent, to what a proper provision would be. As Mason J said in White v Barron and Another[13] it is slightly artificial to say that the first test has to be determined before the second test, because the two tasks which face a judge are similar.
[13] (1979) 144 CLR 431 at 443.
In Blunden v Blunden & Anor[14] Justice Bleby had to consider a claim made under the Act in circumstance where, as here, the whole estate had been distributed. His Honour found that an executor should ordinarily refrain from distributing any part of the estate during the period in which an application under the Act could be brought as of right.[15] An executor who distributes an estate before the relevant period has expired may be personally liable to a successful applicant who suffers loss as a result.[16]
[14] [2008] SASC 286.
[15] Blunden v Blunden & Anor [2008] SASC 286 at [20].
[16] Blunden v Blunden & Anor [2008] SASC 286 at [24].
The Court has a power to make an order for provision out of the estate, including in respect of that part which has been distributed. If such an order is made, the portion of the estate affected by the order is held subject to the provisions of the order made by the Court.[17] The fact that the estate has been distributed, therefore, is no basis for treating this other than as an ordinary application and dealing with it accordingly.
[17] Blunden v Blunden & Anor [2008] SASC 286 at [30].
Assessment of the evidence
Johnathan gave evidence in Court. The Court had earlier been informed that Bob and Emily were unable to afford to come to Australia for the trial. They gave evidence by video link from Sheffield in the United Kingdom. As with all of the witnesses, their primary evidence was by way of affidavit. However, each of the plaintiffs gave some additional evidence-in-chief and were cross-examined.
The principal witnesses for the defendants were each of the three defendants. Again, affidavits were filed as evidence-in-chief, but there was further oral evidence and cross-examination.
Generally speaking, I accept the evidence of all of the witnesses, subject to one or two issues. The second and third defendants were clearly hostile to the claim and resisted it vigorously. As a consequence of their attitude to the claim, my assessment is that they exaggerated the question of a conflict between Bob and his father. They also sought to downplay the amount of contact the three plaintiffs had with their father and also the relationship between them and their father.
Where there is a conflict between the evidence of the second and third defendants and the plaintiffs on those topics, I prefer and accept the evidence of the plaintiffs as being more accurate. That means I accept the plaintiffs’ evidence about the contact that they had with their father over the years, the ongoing relationship with their father, and the relatively minor nature of the disputes between Bob and his father.
The relationship between the plaintiffs and their father was affected by the tyranny of distance. Making allowance for that fact, the relationship between the plaintiffs and their father seems to have been continuous and, in the main, cordial.
The financial position of the plaintiffs and defendants
The financial position of each of the three plaintiffs is modest.
Johnathan is 63 years of age and single and, as is the case for the other two plaintiffs, continues to reside in the United Kingdom. He currently suffers from a number of physical ailments, including diabetes and Reynaud’s disease. He is unable to work. During his working life he predominantly worked as a mechanic. He is currently in receipt of a disability pension and other benefits from the United Kingdom government in the amount of approximately £1000 per month. He has no assets or savings to speak of.
Emily is 61 years of age, currently works part-time and lives in a de facto relationship. She and her partner own a house valued at approximately £110,000 in respect of which they have a mortgage of approximately £60,000. Her income at the moment is approximately £700 per month. Her partner, Michael, is in receipt of an old age pension. Apart from the house, she does not have any other assets of significance, nor a pension plan.
Bob is 61 years of age and single. He came to Australia in 1987 to visit his father on a tourist visa. He overstayed that visa and remained in Australia until 2008. During that time he worked as a painter and decorator. He was deported in 2008 for overstaying his visa. Bob now suffers from Parkinson’s disease and is no longer able to work. Like his brother, he is in receipt of a disability pension from the United Kingdom government and has no assets or savings of any note.
Of the children of the deceased, Sheena appears to be the most comfortably well-off. She and her husband, Stephen, own their own home, although subject to a mortgage. Stephen’s income for the most recent financial year was $66,171. Sheena’s income for the most recent financial year was $46,752. Sheena has superannuation valued at approximately $90,000 as at 30 June 2014 and Stephen has superannuation in the amount of approximately $133,000 as at the same date. The financial position of Sheena and her husband is the most secure of any of the parties.
The financial position of Kathleen is a little less clear. She produced no corroborating evidence. Her evidence was confusing and seemed to indicate a level of spending which was significantly higher than the income available. In the absence of any corroborating evidence, I am disinclined to accept her evidence on this topic.
Words in the will
The will of the deceased contained the following clause:
I DIRECT that I do not wish my children MICHAEL WILLIAM BROADHEAD JOHNATHAN GRAHAM BROADHEAD ERNEST ROBERT BROADHEAD and EMILY MARIE DONAHOE to benefit from or participate in my estate in any manner whatsoever as I have had no contact and no relationship with them for many years.

The clause in the will purports to explain why the testator did not make any provision for four of his children. The question becomes what the effect of such a clause is and what use can be made of it at trial.
In Hughes v National Trustees, Executors and Agency Co of Australasia Limited Barwick CJ said as follows:[18]
Evidence of the reasons given by a testator or testatrix for making or not making a provision by will are, in my opinion, admissible as evidence of those reasons. Such statements are not evidence of the facts they assert: they provide evidence only of the subjective attitude or beliefs of the testator or testatrix.
[18] (1979) 143 CLR 134 at 137.
His Honour also went on to say:[19]
I must concede that, in any case, such statements do not afford any proof of the objective facts they assert. Nor does their admission into evidence alter in any respect the burden of proof otherwise appropriate to the case.
[19] Hughes v National Trustees Executors and Agency Co of Australasia Limited (1979) 143 CLR 134 at 138.
The words in the will, therefore, are admissible, but not admissible to prove the truth of the facts asserted. In any event, in this case, subject to the tyranny of distance, the plaintiffs maintained a continuous relationship with their father.
There were a number of visits to Australia by Johnathan and Emily. Bob, of course, lived in Australia for more than 20 years. The defendants downplayed the effect of the visits to Australia and also the deceased’s visits back to the United Kingdom. I do not accept their evidence. I accept the evidence of the plaintiffs.
Bob says that, during the period he was in Australia, his father, for a considerable period, would work with him two to three times a month and that they would usually go to the local pub on Thursday nights. He also said his father regularly came to his house for dinner. Apart from that, most days after work he called in on his father for a cup of tea.
The evidence, which I accept, was that Johnathan came to Australia on five occasions to visit his family and that his father returned to the United Kingdom on three occasions to visit Johnathan and his siblings.
The evidence of Emily was that she came to Australia three times to visit her family and that, of course, on the three occasions her father returned to the United Kingdom she had considerable contact with him.
The totality of the evidence is such that, for practical purposes, the words in the will are to be disregarded. They are not proof of the facts asserted and the evidence proves strongly to the contrary. Each of the three plaintiffs maintained regular contact with their father.
Consideration of the issues
I am satisfied that each of the plaintiffs has been left without adequate provision for their proper maintenance, education or advancement in life. They are each in very poor financial circumstances, though perhaps Emily’s position is not quite as poor as that of her brothers. The jurisdictional question is therefore satisfied and the matter becomes one of consideration of what would be an appropriate provision.
That requires the Court to consider what provision would have been provided by a wise and just testator fully aware of all of the relevant circumstances. It necessarily involves a matter of judgment. There is no correct answer as such. I have had regard to the submissions made by the parties as to what would be an appropriate provision. However, in the end it is a matter for the judgment of the Court.
In my opinion, a wise and just testator would have made a provision for each of the three plaintiffs in the amount of $47,500 and I so order.