Cameron v Cameron
[2009] SASC 27
•11 February 2009
SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
CAMERON & ANOR v CAMERON & ANOR
[2009] SASC 27
Reasons of Judge Lunn a Master of the Supreme Court
11 February 2009
PROCEDURE - JUDGMENTS AND ORDERS
Inheritance (Family Provision) Act - application to set aside judgment entered with concurrence of parties to give effect to a settlement agreement - defendants misrepresented size of the estate to the plaintiffs - held under 87R 84.12 judgment to be set aside.
Inheritance (Family Provision) Act - claim by 2 adult children who were excluded from the will - no contact between deceased and the children for 10 years before his death resulting from deceased having previously sexually abused his daughter - net estate of $664,775 - no moral claim on deceased by beneficiaries in his will - award of $112,500 for 37 year old, single son in regular employment and owning freehold home - award of $200,000 for 41 year old, married daughter with 2 children aged 10 and 9 years who is less well off than her brother.
CAMERON & ANOR v CAMERON & ANOR
[2009] SASC 27Reasons on plaintiffs’ application to set aside the judgment of 23 October 2006 and for provision out of the estate.
JUDGE LUNN: John Ramsay Cameron (“the deceased”) was married to Maureen Cameron (“Maureen”). They had two children, the first plaintiff, John Cameron (“John”), who was born in 1971 and the second plaintiff, Laura (now Agars) (“Laura”), who was born in 1967. The deceased had three brothers, Ian, Alan and Duncan Cameron (“the brothers”).
From the time when she was aged about seven Laura was wantonly and regularly abused sexually by the deceased. It is not necessary to go into the sordid details which were undisputed. These experiences which persisted well into her teenage years had a major adverse psychological effect on Laura. There was also some abuse of her by her uncle, Alan. This sexual abuse was unknown to Maureen and John. John did not enjoy a good relationship with his father through his teenage years, partly because his father continually favoured Laura, which presumably resulted from their secret sexual relationship.
In March 1993 Maureen found out about the sexual activities between Laura and the deceased. She immediately required the deceased to leave their matrimonial home and they then separated. They were never divorced, but there was a property settlement between them. John also left home shortly after March 1993 and was regularly abusing alcohol and marijuana. He had no further contact with the deceased.
Laura continued to have some contact with the deceased until March 1994. She then had a major argument with him over his demand that she should accompany him to a major social event. Thereafter she had no contact with him. Following that breakup with her father, she has had problems with depression for which she has been prescribed medication. Later in 1994 she was married to Scott Agars. She has two children born in 1998 and 1999.
After his separation from his wife the deceased bought a home unit, Unit 2, 67 Causeway Road, Glanville (“the Unit”) where he resided for the rest of his life and which he owned freehold at the time of his death. In late 2002 he was diagnosed with asbestosis or mesothelioma from which he died in the following year. He instructed the legal firm of Slater and Gordon to bring a compensation claim on his behalf in the Dust Diseases Tribunal of New South Wales (“the DDT”) on the grounds that his asbestosis had resulted from his exposure to asbestos during his employment many years before. The claim was handled by the Sydney office of Slater and Gordon. They instituted proceedings for the deceased in the DDT.
On 28 March 2003 the deceased made his last will. He appointed his three brothers to be his executors and left the whole of his estate to them. Paragraphs 11 and 12 of the will stated:
11MY CHILDREN ARE EXCLUDED AS BENEFICIARIES
I direct that my children Laura Margaret Cameron and John Matthew Cameron are not to benefit from my estate as we have had no communication with each other for ten years. Prior to that I did not have a close relationship with my children. My children constantly asked for and expected things to be given to them by me but they did not give me any love or support in return.
12MY WIFE MAUREEN CAMERON IS EXCLUDED AS A BENEFICIARY
I direct that my wife Maureen Cameron is not to benefit from this my Will as we live separate and apart and both regard the marriage as at an end. We have had a matrimonial property settlement through the Court.
(No attempt was made by the defendants to establish the allegations in the last sentence of clause 11 and they have not been proved).
The deceased died on 11 July 2003. A day or two before his death Slater and Gordon sent to him an authority for him to sign to settle his compensation claim for $425,000 inclusive of costs and the expenses which had to be repaid. The deceased was too sick to sign these authorities and they were never executed.
On 19 July 2003 the brothers, as the executors named in the deceased’s will, instructed Mr Sloan of FRS Legal to act on their behalf in the administration of the estate. He continued to so act for the brothers and the survivors of them. Until his death Ian took the leading role among the executors in the administration of the estate and after his death Alan took on that role until his death.
On 19 July 2003 each of the three executors signed authorities for Slater and Gordon to receive on behalf of the estate of the deceased sums totalling $425,000 “in full and final settlement of the Deceased’s court action for damages”. On 3 October 2003 Slater and Gordon wrote to Ian informing him that the claim had settled, but that the defendants in the DDT were not prepared to release the settlement moneys until a grant of probate had been produced. The original settlement instructions sent by Slater and Gordon to the deceased before his death contained a clause 6 which provided that the terms of the settlement were not to be disclosed. It is unclear whether the brothers signed any document in these terms, but they believed such a term applied to the settlement.
On 9 September 2003 the three brothers swore an affidavit prepared by Mr Sloan in support of their application for probate (“the 9 September affidavit”). Annexed to it was a statement of the assets of the deceased with a net value shown of $665,176. The Unit was shown at its Valuer General’s valuation of $97,000. As personal estate in New South Wales there was a debt shown of $425,000 being damages pursuant to a claim in the DDT. By a memorandum of 27 October 2003 a Deputy Registrar of Probates rejected the 9 September affidavit for the following reasons:
I assume the amount of the damages in action no. DDT-86 of 2003 in the Dust Diseases Tribunal of New South Wales has been determined.
If that is the case then the statement should reflect that fact.
If the Tribunal has not yet made a determination on the damages then in my view a right of action should not be disclosed on this statement as an asset of the estate.
…
The statement is to be corrected as required and the affidavit re-sworn.
In early November 2003 John and Laura instructed Mr Ellis of Moody Rossi & Co to act on their behalf in relation to a claim by them against the deceased’s estate under the Inheritance (Family Provision) Act 1973 (“the Act”). On 10 November 2003 Mr Ellis wrote to Ian seeking a copy of the will. By letters of 21 and 28 November Mr Sloan responded, advising that John and Laura were not beneficiaries under the will and declining to supply a copy of the will, but quoting its clause 11, which is set out above. John and Laura lodged caveats in the Probate Registry to prevent probate being granted.
On 27 November 2003 the three brothers swore a further affidavit in support of their application for probate (“the 27 November affidavit”). Paragraph 2 stated:
2To the best of our knowledge, information and belief the Statement annexed hereto and marked “A” is a true statement of the assets and liabilities of the deceased wherever situated and known to us at the time of making this application.
The statement annexed, apart from some inconsequential minor variations, was the same as that annexed to the 9 September affidavit but omitting any reference to the damages claim in the DDT. It showed a net estate of $240,176.44. It appears that the caveat lodged in the Probate Registry by John and Laura prevented the application for probate proceeding at that time.
By letters of 15 December 2003, 1 March and 27 April 2004 Mr Ellis requested Mr Sloan to supply copies of the will and the affidavit of assets and liabilities. On 4 May 2004 Mr Sloan wrote to Mr Ellis saying he had no instructions to provide copies of the will or the affidavit of assets and liabilities, but he invited Mr Ellis to supply details of the proposed claims by John and Laura to see if any resolution could be achieved prior to proceedings being issued.
Shortly prior to that letter of 4 May 2004 being written, Ian had died. Subsequently his widow and sole beneficiary renounced her claim to any part of the deceased’s estate.
On 3 June 2004 Mr Ellis wrote to Mr Sloan advising that his clients, which now included Maureen, would consent to settling their claims under the Act by entering into a deed of family arrangement whereby they would collectively receive 90% of the deceased’s estate.
On 29 July 2004 Mr Sloan wrote to Mr Ellis enclosing a copy of the 27 November affidavit and its annexure and making an offer of half the value of the Unit of the deceased as disclosed in the affidavit.
On 2 August 2004 Mr Ellis wrote to Maureen, John and Laura reporting on the offer in which he stated:
Lastly, you will note that the Affidavit of Assets and Liabilities does not contain any reference to a claim in relation to mesothelioma. This claim still exists, I believe, pursuant to State law. In addition, the executor of the estate would have the option of seeking payment of funeral expenses and his family could have a claim for loss of dependency. Given, however, that the relationship between all of you and Mr Cameron had come to an end, I do not believe that there would be a very strong claim on your behalf in that regard. I expect that the executor will not be pursuing any particular claim on behalf of the estate in relation to the mesothelioma, although it does bear some consideration.
Between April and August 2005 there were further offers and counter-offers, but no agreement was reached. Maureen indicated that she was not pursuing her claim, and thereafter the offers were confined to the claims of John and Laura.
On 6 September 2005 Mr Sloan wrote to Mr Ellis offering to transfer the Unit in settlement of the claims of John and Laura. After further negotiations, on 24 January 2006 Mr Ellis wrote to Mr Sloan offering to accept the proposal for the transfer of the Unit provided his clients’ costs were also paid out of the estate. The letter commented that the likely value of the Unit was about $200,000 which amounted “to approximately 60% or more of the value of the estate”. The letter also stated:
….. By virtue of the delay since the date of death, our clients can now only proceed by way of Court order, or incur taxation liabilities that could have been avoided if the matter had settled sooner by way of a deed of Family Arrangement.
Mr Sloan did not respond to the incorrect assertion in that letter that the value of the Unit was approximately 60% of the value of the estate.
At about the end of January 2006 the caveats against the grant of probate in the deceased’s estate expired. On 7 February 2006 the Deputy Registrar of Probates sent the following memorandum to Mr Sloan:
I refer to previous correspondence.
It appears the caveats lodged against the estate have expired.
To enable the application to proceed please check and notify by letter whether all the detail sworn by the three executors in the oath on 9 September 2003 and in the statement annexed to the affidavit sworn on 27 November 2003 remains current.
Are all the applicants still alive and has there been any resolution of the claim in the Dust Diseases Tribunal of New South Wales?
On 6 February there was a discussion between Mr Sloan and the Deputy Registrar of Probates. Neither gave evidence at the trial. A contemporaneous note made by Mr Sloan read:
Proceedings – Dust Diseases Tribunal that is yet to be determined, by proceedings.
A further affidavit in similar terms to the 27 November affidavit was sworn by Alan and Duncan on 19 April 2006 again showing a net estate of $239,958.59 and making no reference to any compensation settlement. On 19 April 2006 Mr Sloan wrote to the Probate Registry enclosing a document seeking the grant and stating:
We confirm that the conclusion of proceedings in the Dust Diseases Tribunal cannot be finalised until such time as the grant of probate, and in that respect nothing has changed since the original application for probate.
Mr Sloan wrote again to the Registrar of Probates on 23 May stating:
The resolution of the deceased’s matter in the Dust Diseases Tribunal is also awaiting the outcome of, and dependent upon the grant of probate.
Probate was granted to Alan and Duncan on 29 May 2006.
On 26 May 2006 Mr Sloan had written to Slater and Gordon informing them that he would be sending them a certified copy of the probate and stating:
Would you kindly advise if this will be sufficient for your purposes. If not, please advise what further information you require from us to finalise the matter in the Dust Diseases Tribunal.
On 1 June 2006 Slater and Gordon replied to Mr Sloan stating:
I will need to provide a copy of the Grant of Probate to the Defendant’s in our matter along with newly signed Authorities to Receive to enable them to release the balance of the settlement amount. Please find enclosed Authorities to Receive for the Executor of the Estate to sign.
In early June Mr Sloan sent a certified copy of the probate and the executed authorities to Slater and Gordon.
During May 2006 there had been negotiations between Mr Ellis and Mr Sloan which had resulted in it being agreed that the costs of John and Laura, fixed at $8,000, would be paid out of the estate. On 26 June 2006 Mr Ellis, on behalf of John and Laura, instituted this action by filing a summons and a statement of claim. On that day he sent copies to Mr Sloan and suggested that he only file an address for service and that an order to give effect to the settlement be sought at the first status hearing. On 20 July 2006 Mr Sloan filed an address for service. He did not file any other document. A status hearing was convened for 6 September.
In early August 2006 Mr Sloan received amounts totalling $296,797 from Slater and Gordon which were the balance of the compensation settlement moneys after the deduction of statutory repayments and costs. He held that money in his firm’s trust account. Nothing was communicated to Mr Ellis or his clients about the receipt of these moneys.
At the status hearing on 6 September 2006 another Master raised several issues about the proposed order and adjourned the hearing until 23 October. On 23 October, with the concurrence of Mr Ellis and Mr Sloan, I made an order. The relevant parts of it were as follows:
UPON NOTING that the first and second plaintiff have agreed that the first plaintiff shall pay to the second plaintiff a sum equivalent to half the value of the (Unit) ….. within 6 months of the date of this order.
THE COURT ORDERS that:
1The following provision be made out of the estate of JOHN RAMSAY CAMERON ….. for the maintenance, education or advancement in life of the plaintiffs, namely:
(a)The defendants, in their capacity as executors and trustees of the estate of the deceased, are directed to transfer to the first plaintiff the (Unit) …..
…..
3The costs of the plaintiffs of this action fixed at $8,000 be paid out of the residuary estate of the deceased.
4Subject to this order, the defendants shall hold the remainder of the estate of the deceased upon and subject to the terms of the will of the deceased.
…..
Subsequently the executors transferred the Unit to John. John sold the property which he then owned at Peterhead, and in which he lived, for $217,500 and out of the proceeds discharged the mortgage on it of about $20,000. By arrangement with Laura he paid $75,000 to her which she used to reduce the mortgage on her home. He also paid $75,000 to Maureen which she applied for her own use. Maureen had previously agreed not to pursue any claim she had under the Act against the deceased’s estate on the basis that the Unit was transferred to John and that he paid to Laura half of its value. For the purpose of this arrangement between John and Laura the Unit was treated as being worth $225,000, although the defendants have never agreed to this value.
In about July 2007 Slater and Gordon posted a copy of their trust account statement for the deceased to Mr John Cameron at the address of the Unit. This was opened by John as he believed he was the John to whom the letter was addressed. From its contents he and Laura learnt for the first time of the payment of the settlement sum to the executors in August 2006. On 27 November 2007 John and Laura took out an application to receive further provision under the Act out of the settlement sum. After some debate before me as to the relief they were seeking, John and Laura took out a further application on 31 January 2008 seeking to set aside the judgment of 23 October 2006. Pursuant to directions which I gave, John and Laura filed a statement of claim pleading the further relief which they were seeking and the then executors filed a defence to it. The action has since been conducted on the basis that John and Laura are seeking to set aside of the judgment of 23 October 2006 on various alternative grounds, and, if they are successful in that, they are seeking to have their claims under the Act determined on the basis of their original statement of claim and the evidence which was led at the trial before me. In the event that the judgment of 23 October 2006 is set aside the defendants have not sought any orders that the Unit should be re-transferred to them. The defendants have never filed a defence to the original statement of claim, but it was acknowledged that the plaintiffs were put to proof on all of the elements of their causes of action under the Act. At the trial the plaintiffs did not pursue any relief under s 9 of the Act.
The parties consented to a trial of the action by a Master under 6R 15(3)(c). Alan died in September 2008 and his executor and widow, Rosslyn Cameron, was substituted as a defendant in his place.
I am satisfied that by at least June 2003 a legally binding settlement had been reached between the parties in the DDT proceedings to settle the deceased’s claim for $425,000. There was no expert evidence about procedures in the DDT which suggested that the ordinary common law principles of contract law did not apply to the settlement. The correspondence from Slater and Gordon is consistent with a settlement having been achieved shortly after the three brothers returned the authorities dated 19 July 2003 to them. As the executors appointed under the will the brothers had the necessary authority at that time, even though they did not then have a grant of probate, to have entered into the settlement: Mustoe “Executors and Administrators” 5th Edition, 58-9. However the defendants in the DDT were entitled to delay the payment of the settlement moneys until a grant of probate in favour of the executors was produced to them. This did not mean that the debt was not payable, but only that its payment was subject to the performance of a condition. The debt was from this time onwards an asset of the estate. Regrettably the Deputy Registrar of Probates seems to have assumed that the claim did not become a debt until some order had been made by the DDT, but that was not necessary in law. Mr Sloan seems also to have incorrectly assumed that a grant of probate was necessary before the compensation became payable. He did not give evidence and thus could not explain the position which he took on this question. On what is before me, he gave incorrect advice to the executors that the compensation which had been agreed, and of which he was aware, was not an asset which needed to be disclosed in the 27 November affidavit.
For this reason the statement in paragraph 2 of the 27 November affidavit, quoted above, was false and its omission caused Mr Ellis in his letter of 2 August 2004 to speculate incorrectly that there was no compensation claim apart from one for funeral expenses, which was not worth pursuing. I accept the evidence of John and Laura that if they had known that the net estate available for distribution was not $239,158, as disclosed in the 27 November affidavit, but $664,755 they would not have agreed to the settlement with the defendants on the terms on which they did. (Whether they were justified in believing they would receive more from the larger estate is not the issue here, and it will be addressed later).
In various places the judgment of 23 October 2006 is referred as a consent judgment. It was not a consent judgment because there cannot be such judgments in claims under the Act: McMahon v McMahon, Young J, Supreme Court NSW, 2 August 1985; deGroot & Nichol “Family Provision in Australia” 2nd Edition, para [7.7]. Rather it was a judgment entered by the Court with the concurrence of all parties who were sui juris. I now have no recollection of the circumstances in which the judgment was entered and the extent to which I turned my mind to whether it was a proper judgment. There was nothing in the papers then before me disclosing the amount of the net distributable estate. I may have enquired about it from the solicitors, but I cannot say that I did so. It is likely that I took the approach in what was obviously not a large estate that the transfer of the major asset, being the Unit, to children who had been excluded entirely by the terms of the will was in general terms an appropriate order under the Act where the parties, who had all been legally represented and advised, each believed it was a compromise to which they should agree.
The plaintiffs’ application to set aside the judgment can be disposed of under 87R 84.12 which provides:
The Court may vary or set aside a judgment or order at any time if the justice of the case so requires.
This rule enables the Court to set aside a judgment if that is what is fair and reasonable in the objective circumstances of the case having due regard for the practical need for finality in litigation: Cavanagh-Lang v O’Callaghan, Full Court, 30 June 2000, Judgment No [SASC] 187. It can be applied where at least one party is acting under a false assumption about a material circumstance: Perpetual Trustee Co Ltd v Valuer General (No 2), Debelle J, 24 September 2007, [2007] SASC 340. As this was a judgment neither entered by consent nor made after a proper consideration of the merits of the case it is open to use 87R 84.12. The misrepresentation in the 27 November affidavit is sufficient to justify the use of 87R 84.12 in this case. Furthermore, the defendants were aware from the letter of 24 January 2006, mentioned above, that the plaintiffs were acting under a misapprehension that they were receiving about 60% of the estate in the settlement. Allowing the plaintiffs to proceed on this false assumption is a further ground to invoke 87R 84.12. It is not necessary to go into the more vexed questions of whether there was some obligation on the executors to disclose the compensation settlement before the order was made. I accept that as the plaintiffs had acquiesced in the defendants not filing the affidavit required by 87R 119.10 setting out the assets of the estate the defendants were not in any breach of their obligations under that Rule. In the alternative, 87R 84.12 could be invoked on the ground that the plaintiffs should now be entitled to adduce fresh evidence of which they were not, and could not have been, aware when the judgment was entered so that the Court could adjudicate on their claim on all the proper evidence: Moneytree Management Services Pty Ltd v DCT (No 4) Debelle J, 30 August 2000, [2000] SASC 313.
In deciding what is the justice of the case for 87R 84.12 I have regard to the likely consequences for the defendants if the judgment is set aside. They have paid out all of the moneys of the estate and have nothing in hand with which to pay any additional provision to the plaintiffs or costs. However, any such adverse consequences are a result of the executors’ misrepresentation in the 27 November affidavit. Also, as will be related later, it is not the concern of the plaintiffs that a substantial part of the estate was paid out in December 2006 to persons other than the beneficiaries named in the will. Any difficulties to be faced by the defendants in giving effect to a new judgment in the action do not override the rights of the plaintiffs to have their claims under the Act dealt with on the true facts. There will be an order that the judgment of 23 October 2006 be set aside.
I do not accept the plaintiffs’ contention that the executors were fraudulent in concealing the compensation settlement. They were seeking to give effect to the wishes of the deceased that his children should not benefit in his estate and they were influenced by the confidentiality clause in the settlement authority. Duncan, who was the only one of the executors who was able to give evidence, repeated in answer to every question about his motives in not disclosing the compensation settlement the mantra of “the man at the Court said we did not have to disclose it”. I accept this is what he had been told by Mr Sloan, but it is clear from the documents that Mr Sloan was under a misapprehension that there was no asset of the estate arising from the compensation claim which needed to be disclosed. His advice to the executors would have been in those terms. While the executors were difficult and unco-operative, and probably unreasonable, in refusing to disclose the terms of the will and the affidavit of assets and liabilities until well after the negotiations were under way, I do not find them to have been fraudulent.
Counsel for the defendant submitted that even if the judgment was to be set aside there was still a valid and effectual contract between the parties settling the plaintiffs’ claim to which effect should be given. I do not accept this. Because of the potential problems with capital gains tax on the transfer of the Unit, it was a term of the agreement that effect should be given to it by a judgment of the Court. As the judgment has been set aside an essential term of the agreement has not been fulfilled and so the agreement is not binding.
On 12 December 2006 Mr Sloan, on the instructions of Alan and Duncan, distributed the net estate which was available for distribution and which was held in his trust account, by paying $182,138 to Duncan, $165,138 to Ian Lambon, the stepson of Alan, and the balance to Hanh Duc Cao, a friend of the deceased and of Alan. On 8 February 2007 $8,696 was paid to each of Duncan and Alan from the sale of shares owned by the deceased. This accounted for all of the deceased’s estate. Duncan has spent all but about $50,000 of the moneys which he had received.
The defendants’ counsel submitted that as the estate had been fully distributed before the plaintiffs’ application made on 27 November 2007, s 14 of the Act protected the defendants from any further liability. S 14(1) of the Act provides:
An administrator of the estate of a deceased person who has lawfully distributed the estate … shall not be liable to account for that estate … to any person claiming the benefit of this Act, unless the administrator had notice of the claim at the time of the distribution.
The claims under the Act of the plaintiffs now being considered by the Court are those made by them in their summons and statement of claim filed on 26 June 2006. The executors had notice of these claims well before they made their distributions. The plaintiffs are not pursuing a variation of the judgment of 23 October 2006 which was made by the application of 27 November 2007, but their original claims. Hence, s 14 does not prevent any judgment being entered under the Act. Whether, or how, the defendants can give effect to a further judgment under the Act is not a matter with which I need to deal in this action.
Relevant legal principles.
The process to be employed by the Court in determining claims under the Act is set out in the following passage from Perry ACJ in Drioli v Rover, 14 October 2005, Judgment no [2005] SASC 395 (footnotes omitted).
It has clearly been established by authority that the determination of family provision claims involves a two-stage process.
The first stage involves consideration of the question, to use the language of the South Australian Act, whether the applicant has been “left without adequate provision for his proper maintenance, education or advancement in life”. This is sometimes described as the jurisdictional question. Absent an affirmative answer to that question, it is unnecessary to proceed further, and the claim will fail.
If that question is answered in favour of the applicant, the second question is as to what, if any, provision should be made.
The two questions overlap, and the same considerations may be relevant to both.
What has been described as a statement of general principle underlying the legislation is the dictum of Salmond J in Re Allen (dec’d), Allen v Manchester.
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.
That statement was cited with approval by the Privy Council in Bosch v Perpetual Trustee Co Ltd,, and has been endorsed as an accurate statement of principle in the High Court on may occasions since then.
As to the jurisdictional question, the observations of Dixon CJ and Williams J in their joint judgment in McCosker v McCosker are apposite:
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 of 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.
The jurisdictional question is addressed by reference to the circumstances as they existed at the date of death of the deceased. If that question is answered in the affirmative, the discretion to make an order in favour of the applicant is exercised by reference to all of the circumstances as they exist at the date of the order.
The defendants’ counsel submitted that nothing had been pleaded by the plaintiffs about whether they had been left without adequate provision at the time of the deceased’s death, and therefore no evidence should be admitted about their circumstances at that time. Hence he contended that they had not established the initial jurisdictional issue, and so their claims must fail. Apart from some partnership financial statements to be mentioned later, no evidence was adduced by either plaintiff as to their financial circumstances at 11 July 2003, being the date of the deceased’s death. Their evidence related principally to their financial positions as at the time of trial, which was over five years later. I am prepared to apply the presumption of continuity in reverse to find that their respective financial positions as at July 2003 were generally not materially different from those at the time of trial. In any event, the setting aside of the judgment of 23 October 2003 does not make the agreement on which it was made of no effect. The evidence of that agreement is before me. It constitutes an implied admission by the defendants that the circumstances of each plaintiff was such that they did qualify for at least some award under the Act. Hence the initial jurisdictional question had been satisfied. Accordingly, the issue for determination for each plaintiff is what order is to be made in his or her favour on the whole of the circumstances as they presently exist.
Laura’s counsel sought to tender through her evidence a number of documents relating to the financial affairs of herself and the Agars partnership for the financial years ended 2003, 2005, 2006, 2007 and 2008. (No financial statements for the financial year 2004 were tendered, but some figures for that year appear as comparative figures in the 2005 statements). The defendants objected to the admissibility of these documents other than for the 2008 year in the absence of a pleading about her need for provision at the date of the deceased’s death. I received the documents de bene esse. The documents are admissible as they show, as will be related later, that there was a substantial fluctuation in her level of income in the years to which the documents relate. As is not unusual in small businesses, such as that of the Agars partnership, the profitability and earnings of the partners were not constant. To properly interpret the significance of the 2008 figures it is necessary to look at the varying comparable figures for the previous years which also leads to the inference that Laura’s income in the future may well substantially fluctuate as it has in the past. The documents are admitted for this purpose. They are not admitted for the purpose of showing that her financial circumstances in 2003 were any worse than they were at the time of the trial.
A claim under the Act does not encompass compensation to a child for the deceased as his or her father having failed in his legal or moral duty to be a good and responsible parent of the child: Re Bull, 7 April 2006, Byrne J [2006] VSC 113. Particularly in respect of Laura there were overtones in the presentation of her case that the deceased had a moral duty in his will to make good to her the loss and damage which she had suffered from his sexual abuse of her. Subject to bars under the Limitation of Actions Act Laura probably had such a claim for damages against the deceased, but that is not the subject of this action.
There is much talk in the authorities on the Act about the moral duties of a deceased to his children, but that expression does not appear in the Act. In Virgolo v Bostin (2004) 221 CLR 191 the High Court held that there could be no claim under the Act based on a breach of moral duty which was independent of an established need of plaintiffs for adequate provision for their maintenance, education or advancement in life. This decision did not suggest that any relevant moral claim could be based on immoral conduct of the deceased which was unrelated to assistance given to him or her by the plaintiff for the building up of his or her estate. No case was cited to me where a moral claim outside this ambit had been recognised under the Act.
Here neither plaintiff did anything which assisted the deceased to acquire the assets which he had at the time of his death. There had been no interaction between the deceased and John for 10 years before the deceased’s death and for 9 years in the case of the Laura. However, this is excusable in the light of the deceased’s conduct prior to 1993 and there is no suggestion that it constituted disentitling conduct for the plaintiffs under the relevant authorities. The claims of each of John and Laura under the Act can only succeed if they establish that their respective financial circumstances are such that they have been left without adequate provision for their proper maintenance, education or advancement in life. Insofar as their present or likely future financial needs will be met from other sources they do not have claim for them under the Act.
Both John and Laura in their evidence said they had subjective motives of personal vindication and the like for pursuing the claims under the Act against the deceased. Whether they have been left without adequate provision is to be determined objectively. If they have other motives for pursuing their claims that is not a ground for refusing relief under the Act if their entitlements are objectively established.
The defendants did not challenge the evidence of John or Laura and I accept it. What they said to health professionals as was set out in the reports of those professionals, which will be mentioned later, is only evidence of the facts on which those health professionals reached their expert conclusions and is not evidence of the objective facts: Watson v Ramsay (1961) 108 CLR 642. Likewise what has been stated in pleadings and untendered affidavits, which was not repeated in the oral evidence or tendered documents, is not evidence on which I can act.
I find the net distributable estate of the deceased to have been worth $664,755. In this figure I have treated the Unit as worth $225,000. The defendants never agreed to this value and there is no proper independent valuation evidence for it. It was the value agreed between John and Laura for their own purposes, although John gave hearsay evidence that it was the figure given to him by a land agent. As in the exercise of my discretion I am treating them as having already obtained by the transfer of the Unit a benefit of $225,000, it is proper that it should also be brought into account in the finding of the total value of the estate at this figure.
John’s claim.
At the time of trial John owned the Unit freehold which he now values at $250,000, a 1996 Futura car worth between $1,600 and $3,500, personal effects of $5,000, a term deposit of $18,500 and a superannuation entitlement of $101,674.
John is single. He is employed as a public servant and has been so employed for many years. He gave his annual salary as $53,698. As no liabilities were mentioned for income tax and superannuation contributions, I presume that this is a net figure. His only liabilities are the costs of his own solicitors for this action and $472 owing to Dr Coates. His annual expenses are about $16,750. He has private health insurance.
In about 1997 and 1998 John consulted Dr Coates, a clinical psychologist. This was apparently through some scheme run by his employer. Through the assistance of Dr Coates he was able to stop his significant use of marijuana and to curb his excessive intake of alcohol. He saw Dr Coates again on 2 July 2008 for the purpose of him preparing a report. He says he would now like to resume treatment by Dr Coates to address issues about alcohol and gambling, but he gave no other evidence about this and the nature of these issues. There was no evidence about the likely duration or cost of such future consultations. On the present surplus between his income and his regular expenses it appears that he could afford some treatment by Dr Coates at the present time.
John has suffered since birth from mild cerebral palsy. He still suffers with some disabilities of lack of co-ordination which require him to drive an automatic car and prevent him from swimming. There was no evidence that they have affected his employment. He said that his state of health in regard to that condition was now quite good. Presumably his expense of $600 per year for medication at least in part relates to this disability. He did not give evidence of any particular financial need which arises from his cerebral palsy.
In 1997 and 1998 Dr Coates found John had experienced some form of adjustment disorder, or even post traumatic stress disorder, as a result of his experiences with his father which had given rise to low self-esteem and loss of personal confidence, difficulties in personal relationships and getting ahead in his employment. In July 2008 he found that John’s depression had improved markedly, but he was still suffering from some residual emotional disturbance and had an enduring dependence on alcohol and gambling and difficulties in sustaining intimate relationships. He believed John would benefit from on-going counselling on these matters.
The defendants’ counsel submitted I needed to have regard to the $75,000 which John and Laura had given to Maureen. There was no evidence that she had any pressing financial need for this gift. It was not a loan. There was no evidence that it was given in any expectation that it would be received back by them on Maureen’s death. I accept that for the purposes of assessing John’s need of provision I should treat his assets as including his share of the gift being $37,500. The fact that it was given away in this manner suggests that in 2006 John did not see himself as having any real immediate need for this $37,500.
I will leave further consideration of John’s claim and deal with it jointly in determining what provision is also to be made for Laura.
Laura’s claim.
Laura is 41 years of age and is the primary care giver for her two children now aged 10 and 9 years. After her breakup with the deceased in 1994 she became depressed and was prescribed Aropax, which she continued to take until she became pregnant in 1997. Shortly after 1994 she saw a counsellor for about a year. This was a free service, but she was not eligible for more after having received a year’s counselling. In 2000 she was prescribed Cipramil for depression by her GP, but she falsely told him that the cause of her depression was coping with her children. Dr Pincomb, the psychiatrist, recommended in mid-2008 that she double her dose of Cipramil, but she has chosen not to so. Her present consumption of Cipramil costs her $30 per month.
Laura was seen by Dr Pincomb, a psychiatrist, in mid-2008. She found that Laura has suffered from a post traumatic stress disorder resulting from the deceased’s and Alan’s sexual abuse of her. She has poor self-esteem and has suffered long term damage in her development as a person. She considered that she would benefit from some long term counselling from a psychologist. There was no evidence given of the likely duration or cost of such counselling. She also considered that should Laura encounter further significant trauma in her life she would be at greater risk of developing another post traumatic stress disorder in the future. She has suffered from recurrent depressive episodes, including flash-backs, and will remain at risk of recurrent depression during her life. There was no suggestion that these conditions would have any significant upon her future earning capacity or would involve any particular future treatment other than medication and counselling.
In 1991 Laura and her husband bought their present home for $71,000 and borrowed $60,000 on mortgage. Although she applied the $75,000 which she received from John to reduce this mortgage, there is still a balance owing of about $100,000 on this mortgage. In part this is because a further $60,000 was withdrawn from the mortgage account to buy a sprint car for her husband.
Laura is an equal partner with her husband in a business of manufacturing stainless steel products called Agars Industries. Since 1993 she has worked part-time in that business. I adopt the following summary of Laura’s income and assets provided by her counsel in his written address.
Income
Laura
Family Trusts Distribution
Scott Agars
Total
2008
21,616
46,432
21,616
43,232
2007
44,346
91,272
44,346
88,692
2006
11,045
30,580
21,500
33,545
2005
26,353
21,584
2004
7,749
11,675
Average
22,220
24,140
Laura’s assets are:
(a) Magna motor car $3,000.00
(b) Scott’s Pajero $1,000.00
(c) Laura’s superannuation $25,000.00
(d) House $300,000.00
(e) Sprintcar $60,000.00
(f) Motor home $35,000.00
Less liabilities
Mortgage ($100,000.00)
Business loan ($15,000.00)
The current family food bill for Laura is $250 per week and other household expenses average about $330.00 per week. This includes private health insurance and expenses associated with her children’s schooling at a public school. She said that on her present level of income the family is coping, but it is hard. However, this is to some degree explained by the fluctuating levels of the income from the Agars Industrial business.
Laura says she would like to send her children to a private school, but there was no evidence about what this would cost or its likely duration.
As in the case of John, her assets are to be treated as increased by the $37,500 which she gave to Maureen out of the moneys payable to her by John for her share in the Unit under the judgment of 23 October 2006.
None of the deceased’s brothers as the beneficiaries named in his will have raised any moral obligation of the deceased to provide for them which is to be taken into account in deciding what provision should be made for John and Laura. Nevertheless, what the deceased has seen fit to leave to them is not to be diminished other than by what John and Laura have shown is proper provision for them under the Act.
John’s counsel submitted that provision should be made for him to reflect his lack of savings and his likely future treatment expenses. On the findings above as to his levels of income and usual living expenses he is in a reasonably comfortable financial position. Out of an estate of the deceased of $664,755 a proper provision for his education, maintenance and advancement under the Act would be the $112,500 which he has already received through the transfer of the Unit to him under the judgment of 23 October 2006. No further award is to be made for him.
Laura’s case for provision under the Act is a stronger than that of John. Her responsibility to provide for the maintenance, education and advancement of her two children, who are the only grandchildren of the deceased, is to be brought into account: Re McCaffrey (1982) 29 SASR 582. Out of the deceased’s estate of $664,766 a provision of $200,000 should be made for her under the Act. By virtue of the judgment of 23 October 2006 she has already received $112,500 of this provision. The terms of the deceased’s will need to be further varied to provide for a legacy of $87,500 for her.
I will hear counsel on the terms of the order to be made in light of these reasons and on costs
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