Carey v Robson; Nicholls v Robson
[2009] NSWSC 1142
•28 October 2009
CITATION: Carey v Robson & Anor; Nicholls v Robson & Anor [2009] NSWSC 1142 HEARING DATE(S): 15 & 16 September 2009
JUDGMENT DATE :
28 October 2009JURISDICTION: Equity Division JUDGMENT OF: Palmer J DECISION: Summonses dismissed. CATCHWORDS: SUCCESSION – FAMILY PROVISION – Whether applicants’ desire to provide for the advancement in life of their adult children may be taken into account in assessing the applicants’ claims for their own maintenance and advancement in life out of the estate. LEGISLATION CITED: Family Provision Act 1982 (NSW) – s 7, s 28(1)(a) CATEGORY: Principal judgment CASES CITED: - Blore v Lang (1960) 104 CLR 124
- Bosch v Perpetual Trustee Co Limited [1938] AC 463
- Buckland, deceased, Re [1966] VR 404
- Foley v Ellis [2008] NSWCA 288
- Kleinig v Neal (No 2) [1981] 2 NSWLR 532
- Lloyd-Williams v Mayfield (2005) 63 NSWLR 1
- Mayfield v Lloyd-Williams [2004] NSWSC 419
- Singer v Berghouse (No 2) (1994) 181 CLR 201
- Vigolo v Bostin (2005) 221 CLR 191PARTIES: Marion Allinson Carey (Plaintiff 4842/07, 2nd Defendant 5215/07)
Rosemary Helen Nicholls (2nd Defendant 4842/07, Plaintiff 5215/07)
Alan Frederick William Robson (First Defendant 4842/07 & 5215/07)FILE NUMBER(S): SC 4842/07; 5215/07 COUNSEL: L.J. Ellison SC (Plaintiff 4842/07, 2nd Defendant 5215/07)
R.M. Lovas (2nd Defendant 4842/07, Plaintiff 5215/07)
J.E. Robson SC, G.R. Waugh (1st Defendant in 4842/07 & 5215/07)SOLICITORS: Kerrisons the Law Firm (Plaintiff 4842/07, 2nd Defendant 5215/07)
The Law Company (2nd Defendant 4842/07, Plaintiff 5215/07)
W.A. Baxter & Co (1st Defendant in 4842/07 & 5215/07)
4842/07 Carey v Robson & Anor
5215/07 Nicholls v Robson & Ors
JUDGMENT
28 October, 2009
Introduction
1 The Plaintiffs in these two matters are the daughters of the late Frederick John Robson, who died on 5 April 2006 aged eighty-six years, leaving a will dated 21 July 2005. Probate of the will was granted to the Plaintiffs and their brother, who is the Defendant in both proceedings.
2 For the sake of convenience and without intending disrespect, I will refer to the Plaintiffs and the Defendant by their first names: Marion, Rosemary and Alan. I will also refer to members of their families by their first names.
3 The testator’s will made provision only for his three children, the testator’s wife, Margaret, having predeceased him. Marion and Rosemary each seek further provision out of the estate pursuant to s 7 Family Provision Act 1982 (NSW).
The facts
4 There is no dispute as to the facts.
5 The testator was born in 1920. He married Margaret in 1955 and the marriage lasted until Margaret’s death in 2005. There were three children of the marriage, Alan (born in 1958), Marion (born in 1960) and Rosemary (born in November 1963).
6 The testator spent all his life on a property known as Heather Brae at Westdale on the outskirts of Tamworth. He had inherited the property from his father. Heather Brae comprised three separate titles: Lot 46, of approximately 135 hectares, Lot 2, of approximately 111 hectares, and Lot 105, of about 4 hectares. The family homestead is on Lot 46. There is a weatherboard cottage on Lot 2, which is tenanted. Lot 105 is vacant land.
7 The testator carried on farming and grazing on Heather Brae, first in partnership with his father under the name “F.H. Robson & Son”. The partnership was dissolved by the death of the testator’s father in 1962. The testator inherited Heather Brae and ran the farming and grazing business in partnership with Margaret until July 1979, when Alan became a member of the partnership, thereafter conducted under the name “F.J. Robson & Son”. Heather Brae was never a partnership asset. It remained in the ownership of the testator.
8 In November 2003, part of Heather Brae, Lot 2, was transferred by the testator to Alan for nominal consideration. By his will, the testator gave:
– the residue to Alan (essentially Lot 46) subject to Alan paying $250,000 to each of Marion and Rosemary by five equal annual instalments, the first of which was to be made on the third anniversary of the testator’s death, i.e. 5 April 2009.
– Lot 105 to Marion and Rosemary equally;
9 The parties are agreed on the present market value of the real estate in question as follows:
Lot 46 Lot 105 Lot 2 (claimed as notional estate)
10 The present assets of the estate are:
Lot 105 Lot 46 Cash invested Total
11 The liabilities of the estate comprise valuation fees and such costs of these proceedings as may be allowed out of the estate. Marion’s and Rosemary’s legal costs, incurred and estimated, total approximately $320,000. Alan’s legal costs total approximately $204,000. If all costs, totalling some $525,000, are allowed out of the estate, the value of the distributable estate will be about $4,460,000.
12 Accordingly, under the terms of the will each of Marion and Rosemary receives provision in the amount $470,000 (half the value of Lot 105 and a legacy of $250,000) and Alan receives the balance, about $4M.
Marion’s circumstances
13 Marion is now forty-nine years old. She spent her childhood on Heather Brae and, like Rosemary and Alan, she had a loving and secure relationship with her parents. She was educated at local State schools, leaving school after Year 12. She then undertook training as a nurse, ultimately attaining a Graduate Diploma in Health Management through the University of New England. She is now employed full time as a Senior Nurse Manager by Hunter New England Health. Her gross salary is $98,000 per annum.
14 Marion married Robert Carey in 1990. There are two children of the marriage, Brighid, born in November 1991, and Joseph, born in September 1993.
15 Robert is a farmer and grazier. He owns a property called Shannon View, of some 960 acres (388.6 ha) and he leases an adjoining property of some 100 acres (40 ha). Shannon View, on which is located the family home, is valued at about $1.425M.
16 The farming business which is conducted on Shannon View and the adjoining leased land is operated by a partnership between Robert and Marion, trading as “R.A. & M.A. Carey”.
17 As at 30 June 2008, the assets of the partnership were $73,600 and its liabilities, consisting mostly of loans, were $476,700. Of these liabilities, the largest is an unsecured loan of $256,500 made to the partnership by Robert. The partnership business has been affected by drought over the last three years and has produced nett losses for the year ended 30 June 2006 of $60,000, $85,000 for the year ended 30 June 2007, and $99,000 for the year ended 30 June 2008 (all figures are rounded).
18 Robert’s separate nett assets, including the loan to the partnership, are approximately $1,654,000. He does not have superannuation. Marion’s separate assets comprise her interest in Lot 105, valued at $220,000, various shares and personal items worth about $24,000, superannuation benefits presently totalling $172,000 and the amount of $250,000 which is to be paid to her under the terms of the testator’s will – a total valued at about $666,000.
19 Marion’s personal liabilities comprise credit card debts amounting to some $18,500.
20 Robert’s income from the partnership as at 30 June 2008, as appears from his Notice of Assessment, was $16,380. However, the partnership accounts show rent for Shannon View payable by the partnership for that year of $67,500. It is not clear whether this amount has been received by Robert, but that is a fair assumption in that he is the owner of the property.
Marion’s needs
21 Marion’s affidavit and oral evidence did not suggest that she needed provision out of the testator’s estate to meet a present shortfall in her living expenses and the living expenses of her family or to discharge present liabilities which she and Robert would otherwise be unable to meet or to supply a present or future need for suitable accommodation. Both she and Robert are in good health so that there is no immediate threat to their ability to continue working in their present occupations for some time to come.
22 Marion’s needs are described in her affidavits thus:
Brighid’s school fees : Brighid is a boarder in Year 12 of a private school in Sydney and she is doing extremely well. Her tuition, boarding fees and other associated expenses for this year are estimated at $37,500.
Brighid’s university expenses : Brighid would like to pursue a science-based course of study at Sydney University. Her school results show that this is quite achievable. Marion estimates that tuition fees, which she would pay, for Brighid’s four year course would be about $96,000, her accommodation in a university residential college would be about $44,000, Marion’s contribution to Brighid’s living expenses would be about $20,000, and the cost of a car for Brighid while she is at university would be about $10,000.
Brighid’s future needs : Marion believes that it is likely that Brighid will marry, some time in the future. Marion would like to be able to contribute to the costs of the wedding. She estimates her contribution to a wedding costing $40,000 at $10,000.
Marion would also like to contribute to Brighid’s purchase of a home in due course. She estimates that she would contribute $40,000 towards the deposit.
Marion would also like to contribute to the costs of setting Brighid up in professional career, probably medicine, pharmacy or physiotherapy. She is unable to give a present estimate of this contribution.
In summary, Marion’s needs for the education and advancement in life of Brighid are presently estimated at $257,500.
Joseph’s school fees : Joseph is a boarder in Year 10 at a private school in Sydney. Like Brighid, he is doing extremely well. Joseph’s tuition, boarding fees and associated expenses until he leaves school at the end of Year 12 are estimated to be $96,000.
Joseph’s university fees : Marion believes that Joseph is likely to pursue a four year course of studies at Sydney University. His school results show that that is quite achievable. Marion estimates that Joseph’s tuition fees for a four year course would be $96,000, accommodation in a residential college would be $51,500, living expenses would be $20,000, and a small car would be $10,000.
Joseph’s future needs : As in the case of Brighid, Marion would like to be able to contribute $40,000 towards Joseph’s purchase of a home in due course and to provide further assistance in order to set him up in a professional career or to go into business.
In summary, Marion’s needs for the education and advancement in life of Joseph are presently estimated at $313,500.
Renovation and improvement to Shannon View homestead : The homestead on Shannon View was built in 1926. It comprises three bedrooms, an office, dining room, lounge room, kitchen and bathroom/laundry. Marion says that the homestead needs substantial renovation and a second bathroom. A building report has been obtained. It shows that maintenance and renovation work could well be done but it does not indicate that the house is unliveable or in a poor and dilapidated state. The renovations and extensions are estimated to cost $250,000.
Restoration of cottage : There is also a cottage on Shannon View . It has not been occupied for many years and it is uninhabitable. A building report estimates that restoration of the cottage would cost about $65,000.
Marion has not explained why restoration of the cottage to a liveable state is necessary, desirable or appropriate for her maintenance and advancement in life.
Construction of a hay shed : There is no hay shed on Shannon View . It may be assumed that this has been the case ever since Robert and Marion began farming the property. Marion says that a hay shed would significantly enhance storage of hay. The cost of construction is estimated at $22,500.
Construction and erection of new wool shed and yards : Marion says that the existing wool sheds are run down and need replacement. She would also like to purchase a new wool press. The cost is estimated at $92,000.
Upgrading cattle yards : Marion says that the existing cattle yards are inadequate and need replacement. The estimated cost is $16,400.
New bores and troughs : Marion says that an additional two bores are necessary to augment the existing water supply. The total cost is estimated at $21,000.
Further fencing and soil conservation : Marion says that further farm fencing and soil conservation work is required. The cost is estimated at $15,000.
In summary, Marion says that the costs of restoration of the cottage on Shannon View and other improvements to the farming property would be a total of $232,000 (in round figures).
Upgrading plant and equipment : An agricultural expert has recommended upgrading machinery such as the purchase of two new tractors and other related equipment, at a cost of $190,000.
Complete revision of the farming methods employed on Shannon View is also recommended. The cost, including the purchase of further new equipment, personal motor vehicles and the construction of other new facilities is calculated at $162,000.
Purchase of additional land : An agricultural expert has advised that the purchase of an adjoining parcel of land, presently leased by Robert, “would have beneficial impacts on the farm” . The cost of purchasing the additional property is calculated at $570,000.
Holidays : Marion says that she would like to take her family on annual holidays. She estimates the costs over the next ten years at $100,000.
Total needs : The total of all needs described by Marion is as follows:Retirement fund : Marion says that in order to provide Robert and herself with about $80,000 per year in retirement benefits, she needs a capital sum of $1.3M. Her present retirement benefits are $172,000 so that she needs a further $1.28M from the testator’s estate.
| Brighid’s education and advancement in life | $257,500 |
| Joseph’s education and advancement in life | $313,500 |
| Renovations to Shannon View homestead | $250,000 |
| Renovation of cottage and improvements to farming property | $232,000 |
| Upgrading plant and equipment and improvement of farming methods | $352,000 |
| Purchase of additional land | $570,000 |
| Holidays | $100,000 |
| Retirement fund | $ 1,128,000 |
| TOTAL | $ 3,203,000 |
Rosemary’s circumstances
23 Rosemary is now forty-five years old. She was brought up on Heather Brae and educated at local State schools. Like Marion, she had a happy and loving relationship with her parents and, like Marion, she took up a career in nursing.
24 In 1986 Rosemary married Alan Nicholls. To distinguish him from the Defendant, I will refer to Mr Nicholls as “Alan N”. Alan N is an accountant in private practice. They have four children, Timothy born in August 1990, Elizabeth born in July 1992, Alexandria born in November 1995, and Emily born in October 1997.
25 After Elizabeth’s birth, Rosemary and Alan N opened a furniture and giftware shop in Dubbo. Rosemary worked as a nurse on evening shifts and as a clerk in Alan’s accounting practice.
26 In 2001, the family moved to Newcastle. Rosemary ceased nursing but continued to manage the shop in Dubbo and to work in Alan N’s practice. Later that year, the family moved to Tamworth where they now live.
27 Rosemary, Alan and their children are in good health. Indeed, all the children are actively engaged in competitive sport and all have achieved outstanding success, particularly in cycling and triathlon. I will return to this aspect of Rosemary’s needs in more detail.
28 The financial position of Rosemary and Alan N is as follows. Valuations were as at January 2008 and some adjustment and updating is necessary. All figures are rounded to the nearest five hundred dollars.
Rosemary owns in her own name the following real estate:
| Family home in Tamworth | $500,000 |
| Holiday home at Wangi Wangi | $650,000 |
| Half interest in Lot 105 under deceased’s will | $220,000 |
| Legacy under deceased’s will | $ 250,000 |
| Sub-total | $1,620,000 |
| Shares and personal property | $ 173,500 |
| Total Assets | $ 1,793,500 |
| Mortgages over Tamworth & Wangi Wangi properties | $334,000 |
| Other debts | $ 32,000 |
| Total Liabilities | $ 366,000 |
| Nett Assets | $ 1,427,500 |
| Rosemary’s superannuation benefits` | $ 277,500 |
29 Alan N’s assets are:
Accounting practice Other assets Liabilities, including business loans Alan’s superannuation benefits
30 Rosemary’s gross income from salary, rentals and dividends Alan’s gross income Gross income of family trust Combined gross income
31 Alan says that the income from his practice has declined since the 2008 figures were calculated.
Rosemary’s needs
32 All four of Rosemary’s children are exceptionally talented, both academically and in sport. They all compete in cycling or triathlons at State competition level. All hope to compete at international level and, possibly, at the Olympic Games. This is a hope actively encouraged by their parents, who both spend a great deal of time developing their children’s sporting talents. They also spend considerable money on the children’s sporting equipment, coaching, travel and accommodation at national and international sporting events and other extra-curricular tuition.
33 Rosemary and Alan N have undoubtedly worked hard to achieve the financial position in which they now are. Alan, who is now fifty-three years of age, says that he would like to have retired at the age of fifty-seven but now thinks that he will have to keep working until he is sixty. He says that he is struggling with the workload in his practice. Rosemary is prepared to work until the age of fifty-five years.
34 The essence of Rosemary’s needs is encompassed in the following evidence from her affidavit of 15 February 2008:
“Subsequent to my father’s death, when I learned of my inheritance, I became very concerned about my family’s financial position in view of the intentions that my husband and I have to support them all through the academic education and in the sporting interests.
I had hoped that the inheritance that I would receive from my father would assist in funding the cost of supporting my children to achieve their potential in their sporting pursuits and university studies.
…
My financial position is impacted by the fact that I have 4 very talented children, my husband is 52 years of age as at February 2008 and I am nearly 8 years younger than my husband.
Subsequent to my father’s passing I discussed our financial position with my husband.
My husband prepared a budget for our future financial commitments, having regard to our intention to support our children in their sporting and academic endeavours. It was apparent from that budget that we would not be able to support our children without resorting to selling the home at Wangi Wangi (which we did not wish to do) and, also, that my husband’s superannuation would be depleted significantly.
However, my husband and I decided that we would not discourage our children from their endeavours, but would work harder ourselves to lift our income and also adopt other measures to do so.
For this purpose we committed to holiday letting our home at Wangi Wangi.
I commenced working much longer hours for my husband and also started a second job, going back to work part time at Nursing, in addition to running my home.
My husband commenced working much longer hours to the point that he works 18 hour days when he travels throughout NSW, to enable him to be back at his desk and earning money on the following day. He is typically working a 60 to 70 hour week.
Through these strategies we have significantly lifted our income but we have calculated that the extra income that we are earning will not be enough to fund our children’s endeavours.
We are finding the work load extremely tiring and my husband does not believe that he will be able [to] keep working at the pace he is working now past the age of 55 years, but will reduce his working hours. I also am finding the work load hard to cope with.
My husband has always been a role model and inspiration for my children and I attribute his leadership of being up early every morning to train with them as having given my older two children the focus and belief in themselves to succeed. He rides his bike with my children in sub zero temperatures during winter mornings.
When he has to travel for work and cannot train he gets up and gets the children’s equipment ready and then starts travelling before the children have woken up.
I believe that my younger daughters would greatly benefit from having my husband able to have greater contact with them as they pursue sporting excellence.
My husband has prepared a detailed budget of our anticipated financial needs into the future and until Emily completes a university course, which he has assumed to be a 4 year course. That budget is attached to his affidavit which is exhibited to me at the time of my swearing this affidavit.
As I am nearly 8 years younger than my husband, we believe that we will not be able to access my superannuation at the time of my husband’s retirement.
Based on this budget, if I do not receive any further provision out of my father’s estate, we will have to sell our home at Wangi Wangi. We will also have to eat into my husband’s superannuation savings to fund the projected shortfall of $1,200,000.
On the other hand, if my husband retires at 57 years of age, the projected shortfall would be almost $2,400,000 and if he retires at 64 years of age the shortfall would be $983,015.
From that point on we project that we will have insufficient income to fund our children’s endeavours and will have to commence borrowing against our assets or selling our assets. This will significantly deplete our funds for retirement.”The strategy adopted by my husband and I is to work as hard as we can and to save as much as possible in superannuation, as once my husband turns 55 and our income drops we will have no further available income to save for our retirement.
35 Rosemary and Alan N wish to retain their present real estate assets and have an income on their retirement of $80,000 per year, after tax. Alan has calculated what is necessary to achieve that goal, having regard to their projected income and expenses from now until 2019, when the youngest daughter, Emily, finishes university. Alan, as an accountant, has done these calculations in great detail and very carefully, using a spreadsheet. He has kept a record of every weekly expense of the family, down to, for example, $1.57 per week for a child’s membership of Cycling Australia. He has projected these expenses forward, using CPI increases, for the years up to and including 2019.
36 For the twelve year period from 2008 to 2019, Alan’s calculations and projections (rounded to the nearest thousand dollars) show:
Total after tax budgeted income Total daily living expenses Cost of Timothy’s sporting activities and education Cost of Elizabeth’s sporting activities and education Cost of Alexandria’s sporting activities and education Cost of Emily’s sporting activities and education
Alan N calculates that the shortfall in the amount necessary to contribute to his and Rosemary’s superannuation in order to provide for an income of $80,000 per annum after tax is $968,000. This is the amount which Rosemary seeks by way of further provision from the deceased’s estate.
Alan’s circumstances
37 Alan is now fifty-one years of age. He was brought up on Heather Brae and lived there until he married in 1999.
38 Alan was educated at Tamworth High School to Higher School Certificate level. Throughout his childhood he assisted the testator in farming chores, according to his age and ability, as did his sisters. However, in his teenage years, the farm work became more physically demanding. By the age of fourteen years, Alan was carrying out work of all descriptions on the property. I accept that the testator called upon Alan more and more for assistance during Alan’s later school years and that Alan had to miss school for significant periods of time in order to work on Heather Brae. Alan was not paid for his labour.
39 When he left school, Alan did a year’s course in farm technology and wool classing at Tamworth TAFE.
40 The farming business carried on at Heather Brae was conducted by a partnership between the testator and Margaret. On 1 July 1979 Alan became a member of the partnership. Alan worked full time for the partnership on Heather Brae, doing the physical work with the testator and also in contract harvesting as part of the partnership business. Margaret was responsible for bookkeeping and financial records.
41 In 1980 the testator suffered a major heart attack which reduced his capacity for heavy physical work on Heather Brae. Alan took a larger share of that work.
42 In 1990 the partnership gave up contract harvesting and commenced a meat wholesale business. Margaret was now in chronic ill health and from 1991 the partnership employed a bookkeeper.
43 The meat wholesale business of the partnership grew substantially as a result of the long hours and hard work of Alan. By 1992, the testator’s health was beginning to fail seriously from several different causes, and in 1996 he had a major by-pass operation. That same year he was struck by lightning and in 1997 he broke his foot.
44 From 1990 Margaret’s health also began to fail seriously from a variety of causes. She had major by-pass surgery in 1998.
45 I accept that due to the testator’s declining health, from at least 1992 onwards, Alan assumed a larger and larger burden of running the meat wholesale business and running the farming operations on Heather Brae. I accept also that from 1990 onwards Alan bore the major burden of looking after his parents, whose health was seriously deteriorating. While Marion and Rosemary, as loving and supportive daughters, did whatever they could to assist, they had as their first priority their own homes, their growing families and their careers, while Alan was unmarried and lived at Heather Brae, working in the partnership business and looking after his parents.
46 I accept that it was only due to Alan’s willingness to work in the partnership business virtually unaided by his parents from 1998 onwards that the partnership business was able to continue and his parents were able to continue living at Heather Brae, as they wished to do.
47 Alan married in March 1999 and moved into Tamworth to live with his wife in rented accommodation. However, his parents’ health continued to deteriorate seriously and they were unable to look after themselves. Alan was called upon for assistance with increasing frequency. He often spent the night at Heather Brae. These circumstances, coupled with the necessity of running the partnership business, placed enormous stress on Alan physically and emotionally.
48 I accept that Alan has foregone the education and career prospects which he might well have had otherwise in order to run the partnership business and to look after his parents. I accept that, because of his decision to do so, Alan has been severely restricted in his personal life and in his relationships. He has no children, which he feels deeply: see e.g. T99.20-T101.50.
49 I accept without reservation that, had Alan not continued to work as hard as he did in the partnership business, at the same time caring for his parents on a daily basis, the testator would not have been able to support himself and Margaret financially from about 1996 onwards without selling some, and possibly all, of his real estate assets and he and Margaret would then have had to move to a nursing home, contrary to their strong wishes.
50 This conclusion is supported by the testator’s own perceptions. The evidence shows that he fully appreciated that he was leaving the far larger proportion of his estate to Alan and that Rosemary and Marion may well feel aggrieved by the fact that he had not treated all his children equally. However, the testator confirmed in a note intended to be read by his daughters that while he and Margaret acknowledged all that they had done, Alan had, nevertheless, done far more: Alan was “at our beck and call at all times – for no remuneration”: see Alan’s affidavit dated 11 July 2008, p 153; see also the testator’s notes for his solicitor as to the reasons for the unequal division of the estate at p 148.
Alan’s financial position
51 Alan is entirely dependant on the farming operations on Heather Brae and the income from the meat wholesale business. He does not presently live on Heather Brae, as he lives with his wife in Tamworth, but he wishes to move back to Heather Brae as soon as possible.
52 Alan’s assets are:
Lot 2 (transferred by the testator for nominal consideration on 6 November 2003)
$4,575,000Lot 46 (passing under the will) Former assets of the partnership Shares Savings Superannuation Household furniture
53 Alan’s liabilities are essentially the liabilities of the former partnership together with borrowings on the security of the real estate to supplement his income from the meat wholesale business. The liabilities total $2,340,000.
54 Alan’s gross income from farming activities for the year ended 30 June 2009 was $357,000; his expenses were $353,000. As noted above, he has been living largely on borrowings secured over his real estate. The poor return from farming activities has been due largely to long periods of drought. He says, and I accept, that the income from the meat wholesale business has been poor because he has had insufficient time to devote to the business due to the demands made on him by his parents’ ill health.
55 It is clear that while Alan is “asset rich”, he is extremely “income poor”. Alan acknowledges that he needs to sell at least part of Lot 2 to discharge his liabilities so that he can continue his farming and meat wholesale business on Lot 46.
Notional estate
56 Rosemary and Marion have formally asserted that Lot 2 should be held to be notional estate. However, both acknowledge that if they are to receive any further provision from the estate, the actual estate is sufficient to meet their claims. Recourse to notional estate is therefore impermissible: s 28(1)(a). I need not, therefore, discuss further the circumstances of the transfer of Lot 2 to Alan.
General principles
57 The strongest ground for relief urged by Rosemary and Marion, though put somewhat obliquely, is that the provision made for them by the testator is vastly disproportionate to the provision made for Alan. One can understand the sense of grievance which one child may have at being treated by a parent differently from another child. Some may be tempted to think that great disproportionality of testamentary treatment in itself indicates some essential error in the testamentary process which requires amelioration under the Family Provision Act so as to achieve approximate equality between a testator’s children.
58 That is not, of course, a position from which one can begin in this, or in any other case under the family provision legislation. It is useful to remind oneself of the parable of the labourers in the vineyard. Those who worked the whole day complained, not because their agreed wage was inadequate, but because those who worked only part of the day received the same wage and were therefore treated more generously. The moral of the parable is: what is fair and adequate to start with does not become unfair and inadequate just because someone else has been treated differently.
59 The first question in the two stage process discussed in Singer v Berghouse (No 2) (1994) 181 CLR 201, and Vigolo v Bostin (2005) 221 CLR 191 is whether the testamentary provision made for the claimant is “inadequate” for his or her “proper maintenance and advancement in life”. Of course, the answer to that question is not found by examining the financial circumstances of the claimant and nothing more. It:
- “… ‘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 .’ (Emphasis added.)
The point was made explicitly by Callinan and Heydon JJ in Vigolo v Bostin at [122] (231):
This language strongly suggests that the court cannot consider the propriety and adequacy (or inadequacy) of any testamentary provision for an applicant in isolation from the resources and needs of other claimants on the deceased’s bounty. These claimants include other beneficiaries entitled to a share of the deceased’s estate, whether or not they themselves have made a claim under the Family Provision Act .
- ‘Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question of whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances … 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 .’ (Emphasis added.)” : Foley v Ellis [2008] NSWCA 288, at [87]-[89] per Sackville AJA.
60 What is “adequate” for the “proper” maintenance or advancement of a child is not simply a matter of providing enough to eat and a roof over one’s head:
- “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 only 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.” : Bosch v Perpetual Trustee Co Limited [1938] AC 463, at 476.
In Vigolo at [114] Callinan and Heydon JJ said:
- “The use of the word ‘proper’ means that attention may be given, in deciding whether adequate provision has been made, to such matters as what used to be called the ‘station in life’ of the parties and the expectations to which that has given rise, in other words reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future.”
61 To put it as vividly as Fullagar and Menzies JJ did in Blore v Lang (1960) 104 CLR 124, at 135:
- “In such a case as this, where the applicant is a married woman with a healthy husband in satisfactory employment who supports her in reasonable comfort, her need is not for the bread and butter of life but for a little of the cheese or jam that a wise and just parent would appreciate should be provided if circumstances permit.”
62 The estate in the present case, worth some $4.4M after costs, is large but not munificent by contemporary standards. The “needs” of Marion and Rosemary which they say should be met out of the estate are $3,203,000 for Marion and $968,000 for Rosemary, a total of $4,171,000, so that if those needs were met in full Alan would be left with some $229,000 out of the estate.
63 Marion and Rosemary, however, do not say that every one of their “needs” should be satisfied in full by further provision out of the estate. They say, in effect, that although their needs are not for “the bread and butter of life” – because they have enough bread and butter – and although the provision made for them gives them “a little of the cheese or jam”, it does not give them enough “cheese or jam”.
Whether provision should be made for Marion
64 Marion is in secure, well paid employment and she is in good health. She and Robert own their own home. Their income is more than comfortably sufficient for their own personal needs. However, it is their “need” to provide handsomely for their children’s future that they put at the forefront of their claim. Their children are not “eligible persons” having a claim on the testator’s bounty in their own right.
65 Marion submits that provision out of the testator’s estate to meet her desire to provide well for her children’s future is, in the context of a large estate, properly described as for her “advancement in life”.
66 In Mayfield v Lloyd-Williams [2004] NSWSC 419, at [86], White J noted:
- “If the applicant has an obligation to support others, such as a parent’s obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant. (Re Buckland Deceased [1966] VR 404 at 412; Hughes v National Trustees Executors and Agency Co of Australasia Pty Ltd (1979) 143 CLR 134 at 147; Goodman v Windeyer (1980) 144 CLR 490 at 498 , 505). But s 7 does not permit orders to be made to provide for the support of third persons whom the applicant, however reasonably, wishes to support. ( Re Buckland Deceased at 412; Kleinig v Neal [1981] 2 NSWLR 532 at 537.)”
67 On appeal (Lloyd-Williams v Mayfield (2005) 63 NSWLR 1), Bryson JA (with whom the other Judges concurred) said in reference to this observation of White J, at [34]-[36]:
- “It should be observed that the passages in Re Buckland, deceased [1966] VR 404 and Kleinig v Neal (No 2) [1981] 2 NSWLR 532 to which White J referred are not quite to the same effect as each other. In Re Buckland, deceased (at 412), Adam J said:
- ‘… Although one cannot but feel sympathy with the plaintiff in accepting the burden of making financial provision for her mother, I consider that the fact that she is doing so cannot properly enter into my consideration of what was adequate provision for the proper maintenance and support of the plaintiff herself. No authority has been cited to me suggesting this is so, and it would seem that to allow this circumstance to affect the matter would involve the making of provision out of the estate, albeit indirectly, for the maintenance of the testator's former wife under guise of providing maintenance for his child. It is the obligation of the testator towards his child for her maintenance which is in issue in these proceedings, and nothing else. This conclusion does not, of course, mean that the circumstance of the daughter of the testator being burdened with providing for and maintaining her own infant children would be an irrelevant consideration. But the obligation of a parent to provide for his or her own infant children is one thing; the burden voluntarily assumed of an adult child providing for her mother is quite another.’
In Kleinig v Neal (at 537), Holland J (to whom Re Buckland, deceased had been cited) said:
- ‘… It was submitted for the defendants that the mother's potential dependency upon the plaintiff was not relevant to a consideration of his claim on his father's estate. The defendants objected to the admissibility of evidence that was tendered on this matter. As it seemed to me that actual and potential burdens on the financial resources of an applicant existing at the date of death, including those for which there was only a moral and not a legal responsibility, could be material circumstances in considering an applicant's claim, I admitted the evidence that was tendered. As the mother herself can have no claim to provision for her maintenance out of the deceased's estate, any financial dependance of the mother upon an applicant son could not, I think, be used to increase the amount that would otherwise be ordered to be paid to the son if his claim was successful; but I see no reason why the court should not have the benefit of knowing all of the family circumstances in which a claimant finds himself in assessing whether the claimant has a need for provision for his own maintenance, education and advancement in life.’
The view of Holland J appears to me to be wider than that of Adam J, as Holland J was prepared to regard it as relevant, although not as increasing the amount that would otherwise be ordered, to know the applicant's family financial circumstances including financial dependence of his mother upon him. Neither decision relates to s 7 of the Family Provision Act .”
68 Notwithstanding these observations, Bryson JA did not dissent from the view expressed by White J that “if the applicant has an obligation to support others, such as a parent’s obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant”. I am content to adopt that statement of principle as correct, with a little amplification.
69 As Adams J intimated in Re Buckland, deceased ([1966] VR 404), a parent who is obliged, not only by moral duty and the bonds of parenthood but also by law, to provide for a dependant infant child thereby has financial obligations which directly affect the parent himself or herself. Those financial obligations may therefore be properly taken into account in determining what is adequate for the parent’s own proper maintenance or advancement.
70 But the situation is different when the applicant parent ceases to have legal obligations or clear moral obligations to support the child, as when the child has finished school, is adult and able bodied and able to make his or her own way in life. In such a case, the parent’s commendable wish to assist the child further in life is not a matter of the parent’s own maintenance or advancement in life for the purposes of the Family Provision Act. As White J said:
- “… s 7 does not permit orders to be made to provide for the support of third persons whom the applicant, however reasonably, wishes to support.”
71 There may be cases in which a parent’s need to provide for an adult child, although not also amounting to a legal obligation, nevertheless arises from an imperative moral obligation and does directly affect the parent’s own need for maintenance. For example, a parent who is the sole carer of a physically or mentally incapacitated adult child may be unable to work so as to provide sufficiently for his or her own necessities of life as well as for those of the child. As Holland J said in Kleinig v Neal (No 2) ([1981] 2 NSWLR 532), that would be a family circumstance which the Court could take into account in assessing a claimant’s need for his or her own maintenance.
72 Marion has a shared parental obligation to provide for Brighid’s education until she turns eighteen years of age and leaves school. The remaining school fees are estimated at $37,500. Marion has no parental obligation to provide for Brighid’s advancement in life as an adult in a way which can be characterised as Marion’s own need for her own maintenance and advancement in life for the purposes of a claim under the Family Provision Act. These same considerations apply to Marion’s wishes for Joseph. His school fees are estimated to amount to $96,000.
73 Accordingly, the only “needs” or “obligations” or “wishes” of Marion in respect of her children’s advancement in life which I should take into account in assessing whether further provision should be made for her out of the estate are school fees amounting to $133,500. If Marion uses what she is already to receive from the estate to pay school fees, she would have some $336,500 left for other purposes, such as home renovations, holidays, and improvements to the family business or contributions to her superannuation fund. All of that amount is available for discretionary expenditure because Marion already has sufficient to provide comfortably for herself. In other words, even if Marion alone bears the school fees, she will have out of the estate some “jam or cheese” left over to spend as she wishes. Should she have more?
74 In answering this question, I take into account the following considerations:
– the nett estate, after legacies and costs, is about $4M;
– Alan has spent all of his working life building the value of the estate, with little remuneration, at first with the testator and then, increasingly, by his own efforts;
– Marion has contributed little, if anything, to the value of the estate;
– Alan has borne by far the largest burden of looking after the testator in his illness;
– but for Alan’s efforts, the testator would probably have been compelled to sell his real estate in his lifetime and cease operation of the partnership business;
– the testator acknowledged, correctly, that he had a much greater moral obligation to provide for Alan than for Marion;
– Alan has received Lot 2, worth $4.8M and is entitled under the will to Lot 46, worth about $4.5M, so that he would have real estate worth $9.3M but that property is subject to mortgages, totalling $2.34M, for which he alone is liable;
– Heather Brae and Lot 2 provide Alan with his livelihood and with the only lifestyle he has ever known, but they produce a very small income;
– Marion and Robert are in good health and are able to continue working for some years;
– if Marion’s wishes were to be satisfied by a further substantial provision out of the estate, Lot 46 would have to be sold, depriving Alan of the ability to continue operating his farming business as he has done and living at Heather Brae as he has always wished to do.– many of Marion’s stated “needs” are for the improvement of Robert’s property, which does not reflect directly on her own needs for maintenance or advancement;
75 In summary, the estate is not so large that providing more for Marion, as she wishes, would have no, or minimal, impact on Alan, who has a far stronger claim on the testator’s bounty than does Marion. In this regard, this case is very different from Lloyd-Williams v Mayfield (supra) at [31]. If the Court in this case is to be more generous to Marion than the testator has been, it will be at Alan’s considerable expense.
76 In these circumstances, I am not satisfied that the testator’s provision of $470,000 out of his estate for Marion is inadequate for her proper maintenance and advancement in life.
Whether provision should be made for Rosemary
77 Rosemary is in good health, she receives a substantial income and she owns her own home. Her nett assets, including superannuation, are almost $1.5M. Alan N is also in receipt of a substantial income.
78 Like Marion, Rosemary puts her need to provide for her children at the forefront of her claim. By far the greater part of the expenses relate to supporting her children in their sporting careers while at school and as adults. While Rosemary’s desire to encourage her children’s sporting activities as adults at the highest possible competitive level is commendable, it does not, in my opinion, reflect directly on Rosemary’s own need for maintenance and advancement in life for the purposes of a claim under s 7.
79 Timothy is now nineteen years old. He is at university and is enrolled in an Elite Athlete Programme. The cost of advancing Timothy’s sporting and academic career, estimated at $289,000, cannot be taken into account in making further provision for Rosemary out of the estate.
80 Elizabeth is now seventeen years of age. She will have finished school in about a year. The vast bulk of the expense of Elizabeth’s sporting activities and education, estimated at $329,000, relates to expenses which will be incurred after Elizabeth has left school and has attained the age of eighteen years. Those expenses cannot properly be taken into account for the purpose of increasing Rosemary’s provision out of the estate.
81 Alexandria is now thirteen years of age. She will leave school in five years’ time. The bulk of the expense of Alexandria’s sporting activities and education, estimated at $283,000, relates to expenses which will be incurred after Alexandria has left school and attained the age of eighteen years. They cannot be taken into account in Rosemary’s claim.
82 Emily is now twelve years of age so that she has another six years of school. A large part of the expenses of Emily’ sporting activities and education, estimated at $301,000, relates to expenses which will be incurred after Emily leaves school and attains the age of eighteen years. Likewise, they cannot be taken into account in Rosemary’s claim.
83 Elizabeth, Alexandria and Emily are at State schools. In my opinion, the sum of $470,000 provided for Rosemary out of the estate will be amply sufficient to provide for the children’s schooling and maintenance until they are eighteen years of age, with a considerable surplus left for discretionary expenditure by Rosemary on promoting all her children’s sporting careers or providing further contributions to her superannuation. It is to be noted that of Rosemary’s “needs”, $1.2M is allocated towards her children’s advancement in life – most of it after they have left school – and she says because she wishes to spend this amount on her children, she needs about $1M from the estate to provide for her retirement. In my opinion, it is not legitimate to advance Rosemary’s claim for her own maintenance and advancement by “appropriating” income and resources available to her for that purpose for the discretionary benefit of her adult children, who have no claim on the estate, and then asserting that she has been left with inadequate provision.
84 Bearing in mind the same considerations to which I have referred in paragraph 74 (substituting “Rosemary” for “Marion” as appropriate), I am not satisfied that the testator’s provision of $470,000 out of the estate for Rosemary is inadequate for her proper maintenance and advancement in life.
Orders
85 The Plaintiffs’ Summonses are dismissed. I will hear the parties as to costs.
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