Carter v O'Brien
[2007] VSC 21
•20 February 2007
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 5276 of 2005
IN THE MATTER of Part IV of the Administration and Probate Act 1958
IN THE MATTER of the Will and Estate of PETER O’BRIEN deceased
| CYNTHIA EILEEN CARTER | Plaintiff |
| V | |
| DOMINIC GERARD O'BRIEN (AS EXECUTOR OF THE WILL OF PETER O'BRIEN, DECEASED) | Defendant |
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JUDGE: | Mandie J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 30 January 2007 | |
DATE OF JUDGMENT: | 20 February 2007 | |
CASE MAY BE CITED AS: | Carter v O'Brien | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 21 | |
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TESTATOR’S FAMILY MAINTENANCE – Application by domestic partner and carer of deceased – Whether deceased had made adequate provision for the plaintiff by his will – Amount of further provision.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G Baker | John Denton & Associates |
| For the Defendant | Mr R Boaden | John O’Brien & Associates |
HIS HONOUR:
By originating motion dated 31 March 2005 Cynthia Eileen Carter (“the plaintiff”) seeks further provision for her proper maintenance and support out of the estate of Peter O’Brien (“the deceased”). The plaintiff says that she is a person for whom the deceased had responsibility to make provision within the meaning of s.91(1) of the Administration and Probate Act 1958 Vic (“the Act”) and that the deceased, by his will, had failed to make adequate provision for her proper maintenance and support.
The evidence herein was provided by affidavits of the plaintiff and the defendant and also by way of a chronology handed up by counsel for the defendant in “a non-contentious form”[1]. In addition, the plaintiff was cross-examined on her affidavit.
[1]Counsel for the plaintiff did not suggest that the chronology was inaccurate.
The deceased was born on 13 January 1930 and died on 6 October 2004 at the age of 74 years. The deceased was married to Margaret Daughan O’Brien. They separated in June 1997 but, although there was some kind of property settlement, the marriage was never dissolved. There were eight children of the marriage, still living, who are set out hereunder. It is also convenient to note the evidence that has been provided in relation to the position of the children, including their financial position, as follows:
(a)Margaret Ann Roman was born on 21 November 1953. She is employed as a part-time clerk working three days per week. She owns her own home at 69 Farm Road, Cheltenham worth about $280,000 subject to a mortgage and other liabilities of about $85,000. She has two severely handicapped children (Jacinta and Gerard, aged about 24 and 22 respectively) who live with her and are unable to live independently.
(b)Monica Mary Flaherty was born on 23 February 1957. She is employed as a part-time accounts clerk working two days a week. She and her husband rent their home in Sunbury and their only asset is an old Ford Falcon car.
(c)Carmel Therese Kuspira was born on 22 July 1959. She is employed as a retail assistant working two days per week. She and her husband own their own home at 59 Walsh Street, Coburg which is worth about $400,000 and is subject to a mortgage of about $150,000. They have one daughter aged about 10 years.
(d)Dominic Gerard O’Brien (the defendant executor) was born on 25 March 1961. He is employed as a project manager for PricewaterhouseCoopers. He and his partner own their home at 7 Swindon Grove McKinnon which is worth about $420,000 and is subject to a mortgage of about $158,000. They have two children, one aged about four years and one aged about three years. He has future superannuation entitlements of at least $89,371 and they own a 1999 Nissan Pulsar motorcar.
(e)Kathleen Louise O’Brien was born on 28 April 1963. She is employed as a data analyst. She owns a home unit at 3/26 Devon Street, Cheltenham which is worth about $240,000 subject to a mortgage of about $216,000. When the defendant swore his affidavit on 15 August 2005, she owned no car, had no savings and could not afford to repair and replace the heating unit in her home. She has future superannuation entitlements of at least $38,170.
(f)Bernadette O’Brien was born on 16 February 1965. She is employed as an accountant. She owns her own home at 22 Howe Court, Bundoora which is worth about $430,000 subject to a mortgage of about $293,000. She owns a 2000 Toyota Echo motorcar and has at least $30,000 in future superannuation entitlements.
(g)Daniel Joseph O’Brien was born on 2 June 1969. At the time of the defendant swearing his affidavit on 15 August 2005, he was unemployed having been made redundant from a position with 7-Eleven Pty Ltd. He and his partner own a home worth about $460,000 subject to a mortgage of a similar amount. He has future superannuation entitlements of at least $68,000. He has two children aged about 13 and 11, from a previous marriage and a child with his present partner approaching two years of age.
(h)Justin Mark O’Brien was born on 11 June 1973. He is an officer in the RAAF. He owns a residence worth about $825,000, subject to a mortgage of about $582,000. He has future superannuation entitlements of at least $164,912. He has two children aged about five and three years.
The plaintiff was born on 9 December 1948 and had married one Alan Carter. There are three children of the marriage, Eloise Nadine Carter born 1 November 1972, Helene Marie Carter born 18 April 1974 and Renee Yvette Carter born 11 June 1976. The plaintiff deposes that this marriage “ended” in 1996 and she received approximately $90,000 from her former husband by way of a property settlement.
The plaintiff first met the deceased in October 1995 when she was aged 46 years and the deceased was 65 years old. The deceased was then living in Wagga Wagga and was the Director of Education for the Wagga Catholic Diocese and interviewed the plaintiff for the position of Principal at the Colleambally Primary School, New South Wales, a position to which she was subsequently appointed. The plaintiff came to live in Colleambally in early 1996 and in the latter part of that year a close friendship developed between the plaintiff and the deceased. The plaintiff deposes that sexual intercourse took place between them but “ceased in late 1998 or early 1999 even though we lived together as man and wife”. As noted above, the deceased separated from his wife in June 1997.
In June 1997 the deceased was diagnosed as suffering from ulcerative colitis. He retired from his employment and underwent major surgery. As a result of the deceased’s ill-health, the plaintiff resigned from her position as Principal in order to look after the deceased. The deceased took about twelve months to recover from his operation and even after that was not particularly strong.
The plaintiff deposes that, in the latter half of 1997, she and the deceased pooled their resources and purchased a four-storey townhouse at 15/3 Ovens Street, Griffith, Australian Capital Territory (“the Griffith property”) for the sum of $316,000. The plaintiff contributed one half of the purchase price, and associated costs, from her own resources and by borrowing the sum of $80,000. The deceased provided the other half of the purchase price and associated costs, apparently by selling his previous residence and cashing in his superannuation. The plaintiff and the deceased lived in the Griffith property from December 1997 until January 2003. During the period when they resided together in the ACT the deceased was only involved in part-time voluntary work. The plaintiff says that the deceased was depressed, on occasions such as birthdays, Fathers’ Day and at Christmas, “because only very few of his family would contact him”.
From January 1998 until the end of 2002, the plaintiff worked full-time as a teacher at the Marist College, Canberra. The deceased made a will dated 12 February 1998 leaving the plaintiff his share portfolio and a life interest in his household chattels. The deceased made a further will dated 23 July 2002 whereby he left his entire estate to the plaintiff.
In about late November 2002 the plaintiff informed the deceased that she had decided to return to live in Melbourne. The plaintiff testified that at first the deceased was “sad” about her decision but that they agreed or arranged that she would remain in Melbourne and that she would spend the school holidays (and, generally, alternate weekends) with the deceased, either in Canberra or in Melbourne.
In January 2003 the plaintiff moved to Melbourne to live and the plaintiff and the deceased sold the Griffith property for the sum of $765,000 and the net proceeds were divided equally between them. The plaintiff persuaded the deceased to “hold out” for a better price and as a result they achieved a profitable sale price.
In February 2003, the deceased used his share of the proceeds of the sale of the Griffith property in order to purchase another residence in Griffith at 11/2 Currie Crescent for the sum of $305,000, being the property he owned at the date of his death. The plaintiff lived for about six months with a daughter in Melbourne and then, in June 2003, she purchased her present residence at 2/110 Windsor Crescent, Surrey Hills, Victoria for the sum of $400,000 subject to a mortgage of $200,000. The cash provided by her for the purchase of this property was wholly or substantially derived from her share of the net proceeds of the sale of the Griffith property.
The plaintiff and the deceased visited each other from time to time but remained in daily telephone contact.
In July 2003 the deceased was diagnosed with pancreatic cancer. The deceased commenced living with the plaintiff at her home in Surrey Hills on 8 September 2003 and lived there “intermittently”, according to the plaintiff, until September 2004. The plaintiff testified that the deceased during this time considered her home at Surrey Hills to be his home and principal residence. The deceased was admitted to Caritas Christi Hospital, Kew in late September 2004 and died there on 6 October 2004. It is not contested that the plaintiff had looked after the deceased in his final illness. At the time of the deceased’s death the plaintiff was also his attorney, both under a general power of attorney and a medical power of attorney. The deceased’s last will was made on 5 January 2004[2]. That will made the following relevant provisions:
(a)The defendant was appointed executor and trustee.
(b)“I LEAVE to my friend Cynthia Eileen Carter of Unit 2/110 Windsor Crescent, Surrey Hills in the State of Victoria, in gratitude for her care and attention during my long illness, my shares in Coles Myer and also, my dining room suite, my small freezer, my television set, my videocassette recorder, my CD & tape sound system and my green leather reclining chair, all of which are located at her aforesaid address in Surrey Hills, Victoria.”
(c)The defendant was given the deceased’s Suzuki motor car[3] and “the remaining items of furniture located both at my home in the Australian Capital Territory and at Unit 2/110 Windsor Crescent, Surrey Hills in the State of Victoria.”
(d)The deceased left the residue of his estate to his trustee on trust for each of his children in equal shares.
[2]Probate of the will was granted to the defendant on 20 December 2004.
[3]Apparently disposed of prior to his death.
The personal estate of the deceased, at his death, consisted of furniture of limited value located at the residence in Surrey Hills, 500 shares in Woolworths Ltd (then valued at $6800), 1000 shares in Telstra Ltd (then valued at $13,600) and 510 shares in Coles Myer Ltd (then valued at $4845), together with monies in bank accounts or on deposit totalling some $61,000. The real estate of the deceased consisted of the residence at 11/2 Currie Crescent, Griffith, ACT (then valued at $300,000). In fact the deceased’s real estate yielded some $281,000 and the present net value of the estate (including the shares and after payment of costs and liabilities) is $336,371. The defendant estimates legal costs of the trial of both parties to be $25,000 leaving a net estate of $311,371.
The deceased deposes that during such times as they lived together she paid from her salary for all groceries and household consumables (about $500 per month), newspapers ($130 per annum), petrol and motor vehicle, telephone and various other expenses.
The plaintiff further deposes that if she had not devoted her time and effort into caring for the deceased as she did, she believed that she would still be employed as a Principal at a salary of approximately $91,000 and that her superannuation entitlements would have been considerably more than they now are.
According to the plaintiff, the deceased had very limited contact with his eight children during the times that she lived with him. The plaintiff says that to the best of her knowledge (although the time span covered by her evidence is not entirely clear), the deceased did not see his children Margaret or Monica, but did see the defendant (about 8 times), Daniel (once), Carmel (twice), Kathleen (once), Bernadette (5 times) and Justin (twice). The plaintiff says that there was also spasmodic telephone contact between the deceased and his children.
The plaintiff deposes as to her current position in an affidavit sworn 28 January 2007. She ceased employment as a classroom teacher in Ringwood North at the end of 2005. In 2006 she was only able to obtain a teaching position at St Joseph’s Primary School in Kunnanurra in the far north of Western Australia where she completed a one year’s contract. She is currently seeking employment. She expects to be able to obtain positions from time to time as a primary school relief teacher. Her home unit is still worth in the realm of $420,000 to $440,000 and subject to a mortgage of $200,000. She owns 1000 shares in Telstra Ltd and a 1997 Mitsubishi Magna motor vehicle. Her superannuation entitlements are about $101,000. She has on fixed deposit and in other bank accounts the sum of approximately $44,000, derived from her savings and also from an inheritance from an aunt who died in June 2005.
The plaintiff sought that further provision be made for her from the residuary estate of the deceased in the sum of $200,000.
Mr Baker, who appeared as counsel for the plaintiff, said that the plaintiff had been the domestic partner of the deceased for a period of seven years. He said that there was an estrangement between the deceased and his eight children and that they had very little to do with him during the final years of his life whereas the plaintiff did and did so to her detriment. She had given up her position as Principal of the Primary School following the establishment of her relationship with the deceased and then his series of illnesses. She was presently unemployed. Mr Baker said that but for the plaintiff’s insistence on achieving a good price for the sale of the Griffith property, the deceased’s present estate (albeit small) would not have existed. The funds from the sale of the Griffith property had enabled the deceased to purchase the Canberra property and also had provided some funds for the plaintiff to purchase her property in Surrey Hills. Mr Baker said that if further provision was made for the plaintiff in the sum of $200,000 it would enable her to discharge her mortgage and provide some stability in her life. She had cared for the deceased during the last year of his life and was, he submitted, entitled to more from the estate than the very small bequest of shares in Coles Myer Ltd provided by his will.
Mr Baker said that when the deceased was in extremis it was to the plaintiff that he came and not to his children and that the degree of devotion shown by her exceeded that of his children. The deceased’s children were all adults and the share of the estate left to each of them by his will would not significantly change their lives, even if undisturbed, and that their claims were adequately met by leaving them with the residue after provision of $200,000 to the plaintiff.
Mr Boaden, who appeared as counsel for the defendant, submitted that the deceased had no responsibility to make any provision for the plaintiff or, at least, any provision additional to that made by the will of the deceased. Mr Boaden said that the plaintiff had voluntarily ended her relationship with the deceased in December 2003. The deceased had been distressed by her decision even if he came to accept it. Mr Boaden submitted that the way in which the deceased had changed his will was eloquent evidence of how he saw his relationship with the plaintiff as having changed. She was no longer a person in respect of whom he was prepared to make provision to the exclusion of his children. The full domestic relationship which had lasted for about five years had ceased. At the end of the deceased’s life, the plaintiff acted as a carer rather than as a domestic partner. He added that the plaintiff had significantly benefited from the sale of the jointly-owned Griffith property.
In addition, Mr Boaden submitted, the children of the deceased, save for the youngest, were all in considerable financial need, some of them in quite parlous financial need. He referred to those of the deceased’s children who had substantial mortgages and to the child who had disabled offspring.
In the alternative, Mr Boaden submitted that the wise and just testator might perhaps have given the plaintiff one equal share of his estate along with the children, or, at best, he might have divided his estate into ten shares, giving two shares to the plaintiff and one share to each of the children. Mr Boaden said that the estate was small and that the deceased’s children had legitimate claims. Mr Boaden emphasised that, having regard to all the circumstances including the size of the estate, the plaintiff’s relationship with the deceased and the claims of the children, further provision for the plaintiff (if any) should be limited to a share proportioned as above.
There was no dispute between the parties concerning the applicable law and Mr Baker did not dissent from the statements of principle contained in the written submissions provided by Mr Boaden. In those circumstances it is unnecessary to analyse the well-known cases,[4] both old and recent, but it is useful to set out and adopt what was said by the Court of Appeal in Blair v Blair[5], in which Chernov JA (with whom Hansen AJA agreed) said[6]:
[4]Re Allen, deceased [1922] NZLR 218, 220 per Salmond J, Bosch v Perpetual Trustee Co Ltd [1938] AC 463, 476-479, Singer v Berghouse (1994) 81 CLR 201, 209, Collicoat v McMillan [1999] 23 VR 803, 816 per Ormiston JA, Lee v Hearn [2005] VSCA 127 at [5] per Callaway JA, Vigolo v Bostin [2005] HCA 11 at [25] per Gleeson CJ and [113] and [121] per Callinan and Heydon JJ.
[5][2004] VSCA 149 – passages which I adopted in Petrucci v Fields [2004] VSC 425 at [5] and [6], and adopted and commented upon in Moore v Moore [2005] VSC 95 at [28] to [30].
[6][2004] VSCA 51, at [13].
“… it is probably apt to describe the obligation of the testator that forms the subject of the enquiry under sub-ss. (1) and (3) as a moral obligation, as that concept has been explained in cases that preceded the recent amendments to Part IV of the Act, including the decision of Ormiston, J. in Collicoat v. McMillan [[1999] 3 VR 803, 815-824] and Grey v. Harrison [[1997] 2 VR 359, 361, 364-366]. Thus, it is clear enough that the “responsibility” of which sub-s.(1) speaks is the moral duty or obligation of the testator to make provision for the proper maintenance and support of the claimant. Similarly, sub-s.(3) is essentially concerned with whether the deceased – as a wise and just testator – has fulfilled his moral obligation to make adequate provision for the claimant’s proper maintenance and support. Given, however, that the court is now directed by the legislation to have regard to the matters specified in paragraphs (e) to (p) of sub-s.91(4) when determining the jurisdictional issues, characterisation of the deceased’s relevant obligation by reference to moral duty is likely to be of less utility than was the case prior to the recent amendments to Part IV of the Act. Be that as it may, it should be noted that while the criterion in each of paragraphs (e)-(o) of sub-s.91(4) is concerned with a specific matter, paragraph (p) is open ended, enabling the court to consider “any other matter [it] considers relevant” and giving it a wide discretion to look beyond the specific statutory matters which are set out in the immediately preceding sub-paragraphs for the purpose of determining if the jurisdictional requirement has been satisfied and, where relevant, bringing into consideration the testator’s moral obligation to the claimant.”
and in which Nettle JA added:[7]
“I agree with Chernov, J.A., for the reasons which his Honour gives, that the appeal should be dismissed.
I wish, however, to add to his Honour’s observations with respect to the continuing relevance of the conception of moral duty to the jurisdictional questions posed by ss. 91(1) and 91(3) of the Administration and Probate Act 1958.
The court is bound in answering each of those question to have regard to the matters mentioned in ss. 91(4)(e) to (o) and, pursuant to s. 91(4)(p), to any other matter considered to be relevant. Self evidently, such matters are of themselves incapable of providing an answer to either question. To reason from the matters mentioned in ss. 91(e) to (p) to a conclusion that a testator had a responsibility to make provision for a claimant, or that the testator failed to make adequate provision for the claimant, necessitates the application of a test or standard to the matters to be considered. That test remains one of whether and if so what provision a wise and just testator would have thought it his moral duty to make in the interests of the claimant.”
[7][2004] VSCA 51 at [39]-[41].
In light of the above, I turn to the requirements of s.91 of the Act, and in particular the criteria contained in s.91(4), so far as relevant. I have considered all of the criteria but find it necessary to mention only the following specific matters.
Any family or other relationship between the deceased and the plaintiff, including the nature of the relationship and, where relevant, the length of the relationship
The duration of the relationship between the plaintiff and the deceased was short, albeit close while it lasted. The deceased died in his seventy-fourth year and had known the plaintiff for only the last nine years and had lived with her in what amounted to a domestic relationship for about five years, or for about six years if his residence at the plaintiff’s home in Surrey Hills is counted. It is true that the plaintiff opted to terminate their joint residence and return to Melbourne. However, the plaintiff did look after the deceased in his successive illnesses and provided for him both emotionally and materially for a good part of the last seven years of his life.
Any obligations or responsibilities of the deceased to the plaintiff and to the beneficiaries of his estate
The deceased had no specific obligation or responsibility to the plaintiff other than any moral responsibility, within the meaning of the Act. Nor did the deceased have any specific obligation or responsibility towards his eight adult children, other than the responsibility naturally arising from his parental relationship to them. It would seem that the deceased, in his last years, was not especially close to his children, perhaps with the exception of the defendant, although the evidence about the deceased’s relationship with his children was scanty and it would be inappropriate to place much reliance on this factor.
The size and nature of the estate of the deceased
It was common ground, as is obvious, that the estate was a small one.
The financial resources (including earning capacity) and the financial needs of the plaintiff and of any beneficiary of the estate at the time of the hearing and for the foreseeable future
The plaintiff has limited financial resources (including superannuation entitlements) which are exceeded by the mortgage liability secured by her residence. The plaintiff is fifty-eight years of age and her earning capacity as a teacher must also be limited having regard to her age and to the employment history to which I have referred. None of the children of the deceased have large financial resources. Many of them have limited earning capacity and most of them have substantial financial needs. Sensibly enough, none of the children saw fit to be separately represented and I therefore regard it as inappropriate, despite some differences in their respective financial positions, to discriminate between them. As a generality I would therefore regard their needs, taken as a whole, as constituting legitimate claims to some extent upon the bounty of the deceased, notwithstanding the small estate.
The age of the plaintiff
As I have said, the plaintiff is fifty-eight years of age and, in all the circumstances, has a legitimate anxiety as to her future financial security.
Any contribution (not for adequate consideration) of the plaintiff to building up the estate or to the welfare of the deceased
I think it is fair to say, although it has not been precisely quantified, that the plaintiff must have contributed to the building up of the estate of the deceased by the payment from her earnings and resources of the household expenses referred to above.[8] She also contributed to the welfare of the deceased by caring for him during his illnesses in the way that I have described. In addition, her contribution to the attainment of a good price for the Griffith property is entitled to recognition in this context.
[8]See para 15 above.
I am satisfied in all the foregoing circumstances, particularly having regard to the nature and duration of the relationship between the plaintiff and the deceased, and the contributions made by the plaintiff to and for the welfare of the deceased, and the employment sacrifices made by her for his benefit, that the deceased had a responsibility to make provision for the plaintiff by his will and that he failed, by such will, to make adequate provision for her proper maintenance and support.
The question therefore arises, again having regard to all of the matters that I have mentioned, including the present position of the plaintiff and the competing needs of the adult children of the deceased, what further provision a wise and just testator in the position of the deceased ought to have made for the proper maintenance and support of the plaintiff. The net estate available, after costs, is in round figures $310,000. It is difficult to balance all the factors involved and it is certainly not an arithmetical exercise. The plaintiff’s contribution and her sacrifices were significant and her needs are likewise significant but the relationship was relatively short. On the other hand, the estate is small and the children also have legitimate needs and claims which in any event cannot be met by the estate given that their share must be divided into eight parts. I think that Mr Boaden’s submission was at the lower end of the range of discretion when he contended that, at best, further provision might be made for the plaintiff in effect in the sum of $62,000. In all the circumstances I think that (in addition to her existing bequest) further provision should be made for the plaintiff out of the estate of the deceased by a legacy of $95,000, such legacy not to bear interest.
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