Christie v Manera

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: CHRISTIE & ORS -v- MANERA & ANOR [2006] WASC 287

CORAM: MARTIN CJ

HEARD: 29 AUGUST 2006

DELIVERED : 18 DECEMBER 2006

FILE NO/S: CIV 1309 of 2004

BETWEEN: MARY ANN CHRISTIE
HELEN HOLL
ANTHONY NICHOLLS
LESLIE ALEKARIS NICHOLLS
EVELYN ANASTASAKIS
Plaintiffs
AND
JOHN CHARLES MANERA
DAPHNE DESPA NICHOLLS
Defendants

Catchwords:

Testator's family maintenance - Whether inadequate provision made from the estate for proper maintenance, support and advancement in life for the plaintiffs

Legislation:

Inheritance (Family and Dependants Provision) Act 1972 (WA), s 6, s 7
Property Law Act 1969 (WA), s 121, s 126

Result:

Application for an order that provision be made for the plaintiffs out of the estate allowed
Call for submissions as to the sale of and distribution of proceeds of that sale
Order for distribution of rental proceeds

Category: B

Representation:

Counsel:

Plaintiffs: Mr D Wallace
Defendants: Mr J C Curthoys

Solicitors:

Plaintiffs: Minter Ellison
Defendants: Durack & Manera

Case(s) referred to in judgment(s):

Blore v Lang (1960) 104 CLR 124
Bosch v Perpetual Trustee Co Limited [1938] AC 463
Pontifical Society for the Propagation of the Faith v Scales (1961) 107 CLR 9
Singer v Berghouse (1994) 181 CLR 201
Vigolo v Bostin (2005) 221 CLR 191

Case(s) also cited:

Nil

MARTIN CJ: Christina George Nicholls was born on 23 November 1914. She married George Nicholls. They had seven children. One of them, Anthony, died at the age of 18 months. Their six surviving children, in birth order, are Daphne, Evelyn, Leslie, Mary, Helen and Anthony. George Nicholls was a greengrocer. In 1958 he opened a delicatessen and grocery store in a shop situated in Preston Street, Como. In 1960 he purchased the shop premises and two adjacent shops. A little later, he also purchased a house across the road, which became the family home.
Christina and George and some of the children all helped out in the greengrocery. However, by 1968, the shop business was not faring particularly well, and in or about 1972 as a result of ill health, George sold the greengrocery business, but not the premises from which it had been conducted. In 1974, George died from a heart attack.
Christina died on 8 August 2002 at the age of 87.
At the time of her death, the main components of her estate were the three shops referred to above, being shops numbered 18, 20 and 22 Preston Street, Como and comprised within one lot and the subject of one Certificate of Title, and the family home situated at 17 Preston Street, Como. At the time of Christina's death, those properties had an estimated value of $750,000 each.
In addition, Christina's estate comprised furniture and personal effects to a value of approximately $5000, three bank accounts with a total balance of $37,786, and an interest in a life insurance policy with a value of $5206. After deducting funeral expenses of $6796, the value of Christina's estate, estimated at the time of her death, was $1,541,195.
Christina made a will on 16 April 1998. She appointed John Manera, a solicitor, and her daughter Daphne to be her executors and trustees. They are the defendants in these proceedings. By her will, she left her entire personal estate; the family home, situated at 17 Preston Street, Como; and 60/100th shares in the three shop premises to Daphne. The remaining 40/100th shares in the shops were split equally between her other five children. By cl 9 of her will, she declared:
"9.THE reason why I have bequeathed my estate in the manner set forth in this my Will to my daughter DAPHNE DESPA NICHOLLS is due to the fact that for over 30 years she has attended my needs and has cared for me and has assisted me during my lifetime and has cared for my welfare and benefit during the past years as up until the date of execution of this my Will and that she has agreed to care and look after me until the date of my death."
Using the estimated values of the real estate comprising the bulk of Christina's estate as at the date of her death, it can thus be seen that she bequeathed an interest in the shops valued at $60,000 to each of five of her children and the balance of her estate, with an estimated value of $1,241,195 to her daughter Daphne. However, this somewhat overstates the real value of the bequest to the other five children. By not having either an individual or collective half interest or more in the land on which the shops are situated, it is not possible for them to obtain an order for partition or sale of that land pursuant to s 126 of the Property Law Act 1969 (WA) ("the Property Law Act"). So, without Daphne's concurrence, none of them are able to realise the capital value of their bequest.
As at the date of the hearing before me, after realising the funds in the bank accounts and after paying the expenses of the administration of the estate and which I have referred to above, the solicitors acting on behalf of the estate held a cash balance in favour of the estate in the amount of $43,970. In addition, after meeting the expenses incurred in respect of the three shops, net rentals received from those shops since the death of Christina totalled an amount of $120,977. The two items of real estate comprised in the estate were revalued as at 31 July 2006 and, on the uncontradicted evidence before me, then had a total value of $2,875,000 being made up as to $1.1 million in respect of the shops and $1.775 million in respect of the house. It can thus be seen that in the four years after Christina's death, the value of the house more than doubled, whereas the value of the shops increased by a little under 50 per cent.
Using the values of the land as at the date of the hearing before me and apportioning the rental received on the shops in accordance with the will, would produce the consequence that if the estate were administered according to the will as at the date of the hearing, each of Christina's five children other than Daphne would receive interests having an estimated value of $97,678, whereas Daphne would receive the balance of the estate, with an estimated value of $2,551,556. However, I repeat that the other children would only receive, in realisable form, their share of the rent from the shops and would be unable to unlock and realise their interest in the shops without Daphne's agreement.
In these circumstances, each of Christina's five other children have commenced proceedings under s 6 of the Inheritance (Family and Dependants Provision) Act 1972 (WA) ("the Act"). They allege that they have been left without adequate provision for their proper maintenance and advancement and ask the Court to make provision for them out of the estate of the deceased as it thinks fit.
Prior to the hearing, affidavits had been filed and served in which allegations between the children were made, of conduct which was said to bear upon the Court's assessment of the testamentary provision made by Christina for her children. At the hearing, those portions of the affidavits were not read and it was common ground that the case should essentially be determined by reference to the financial position and likely future needs of each of the claimants to an interest in the estate, albeit taking into account the particular role which Daphne had played in Christina's life and as reflected in the declaration made in cl 9 of the will.
I will therefore set out the findings which I make, on the basis of the evidence adduced before me, as to the circumstances of each of Christina's six children; both as at the date of her death and as at the date of the hearing before me.

Mary

Mary was born on 9 October 1944. She was 57 years of age when Christina died and was 61 years of age at the time of the hearing. She lived with Christina and her father until, in 1965, she married Michael Christie. They have two children who are both now in their thirties, married with children and independent.
Mary worked as a registered nurse for 32 years. She retired from that employment in 1997 as a result of deteriorating health, which included degenerative change to her knees, spondylitis of the spine, nerve damage to her left hand and sensitivity and allergic reaction to a number of drugs. As a result of those conditions, Mary was receiving a disability pension both at the time of Christina's death and at the time of hearing.
In April 2002, Mary's husband Michael retired from his position at Australia Post in order to care for her. As a result, he has been in receipt of a carer's pension since that time. Their combined pensions amount to a little under $24,000 per annum and were of the same order of magnitude at the time of Christina's death. They estimate their combined expenses at a little under $31,000 per annum.
Mary and her husband's major asset is the house in which they reside in Daglish Street, Wembley. In March 2004, its value was estimated at between $350,000 to $400,000. I am asked to infer that it had approximately the same value as at the death of the deceased, and in the absence of evidence to the contrary, I am prepared to draw that inference. As at the date of hearing, the value of that property was estimated at $600,000.
In addition, Mary and her husband have a motor vehicle which was valued at $25,000 as at December 2003. I am asked to infer that its value was approximately the same at the time of Christina's death, and in the absence of evidence to the contrary, I am prepared to draw that inference. The value of the motor vehicle was estimated at $15,000 as at the date of the hearing.
As at March 2004, Mary and her husband had cash reserves of approximately $13,000 and again I am asked to infer that their circumstances were similar as at the date of the death of the deceased. I am prepared to draw that inference. As at the date of the hearing, they had cash at bank of approximately $35,000.
In addition, both at the time of Christina's death and as at the date of hearing, they had furniture and personal effects with a modest value (approximately $10,000).
There was also evidence from Mary's tax return of her receipt of dividends of around $4500 per annum from shares. However, there was no evidence of just what those shares were or their value. However, given the relatively modest amount of the dividends, I would not infer that the shares are of huge value.
There was also some rather vague evidence to the effect that Mary and her husband had superannuation benefits valued at approximately $140,000 and so I find.
In general terms, therefore, I find that as at Christina's death and at the date of hearing, Mary and her husband had a substantial asset in the form of the house in which they live, a car and other personal effects of modest value and modest cash reserves. They also had some shares and superannuation benefits. They are dependent upon their pensions to meet their living expenses. Both Mary and her husband have medical problems which they expect will give rise to a need for various forms of medical treatment in the future, which will result in significant medical expenses.

Evelyn

Evelyn was born on 30 June 1939. She was aged 63 at the time of Christina's death and 67 at the time of trial.
Evelyn lived with Christina and her father until November 1964 when she married James Anastasakis. They have three children, who are all in their thirties, married and living independently. They have five grandchildren aged from 3 to 14 years.
At the time of Christina's death, Evelyn was working part‑time as a cleaner at Osborne Park Hospital earning approximately $250 per week. At the time of Christina's death, her husband was working as a part‑time taxi driver. There is no evidence as to the amount he was earning as a result of that work.
In any event, both Evelyn and her husband ceased employment in 2003. Since then, they have both been in receipt of pensions. Their annual income from that source is a little under $24,000 per annum. They estimate their annual expenditure at a little under $21,000 per annum.
Evelyn and her husband own their own house in Woodlands Grove, Hocking. In an affidavit sworn in March 2004, Evelyn estimated the value of the house at $170,000. At the same time, she estimated the value of their motor vehicle at $5000, and deposed to joint savings of a little over $13,000. She gave evidence, which I accept, to the effect that the circumstances to which she deposed in March 2004 were not materially different to those pertaining at the time of Christina's death, save that of course she and her husband had ceased working.
As at the date of hearing, the value of the house owned by Evelyn and her husband was estimated at approximately $330,000, their motor vehicle at approximately $2500, household furnishings and personal effects at approximately $8000, and they had joint cash savings of a little under $8000.
Like Mary, Evelyn suffers ill health and estimates that she is likely to require significant medical treatment in the future, at substantial expense.

Helen

Helen was born on 12 February 1947. She was 55 years of age at the time of Christina's death and 59 years of age at the time of the hearing.
Helen lived with Christina and her father until she married Tony Holl on 7 March 1965. She and her husband have three children who are all in their thirties, independent and living away from home. They have seven grandchildren.
Helen trained as a hairdresser, but did not complete her qualifications. She and her husband conducted a market gardening business which failed in 1990 when their business went into receivership.
At the time of Christina's death and at the date of hearing, Helen and her husband operated a strawberry‑producing business at Wanneroo. In the year ended June 2002, the net income from that business was a little under $55,000. In the year ended June 2003, the net income from the business was a little over $42,000 and in the year ended June 2004, a little under $36,000. As at the time of the hearing before me, the financial statements for the business for the years ended 30 June 2005 and 2006 had not been completed.
Helen and her husband do not own any land, but lease the property upon which they live and from which they conduct their business. They also have a 1996 Toyota Hilux dual cab and a four‑wheel motorbike which they use in the conduct of their business. In addition, they own a tractor with an approximate value (as at March 2004) of $6000. Helen estimates the value of their household furnishings and personal effects at a little under $8000. She and her husband also own equipment used in their business which she values at approximately $15,000.
Although, as at March 2004 she and her husband had savings of approximately $18,000, at trial she gave evidence of joint liabilities of approximately $87,000.
Like her sisters, Helen suffers from ill health and anticipates incurring significant medical expenses in the future.
It is clear from the evidence that both at the time of Christina's death and at the time of hearing, Helen and her husband are in strained financial circumstances and own no significant assets to sustain them during their pending retirement.

Anthony

Anthony was born on 12 February 1947 and was 55 years of age when Christina died and 59 years of age at the time of the hearing.
He lived with Christina and his father until 30 November 1975 when he married his wife, Yvonne. They have two children aged 25 and 24, both of whom lived at home with their parents at the time of Christina's death. However, their daughter has now married and lives in a house of her own.
After spending a period in the air force, more recently Anthony has worked as a bus driver and at the time of Christina's death, he was working in that capacity earning approximately $35,500 per annum. His wife was also working as a secretary earning approximately $35,000 per annum.
As at the date of Christina's death, Anthony and his wife owned the house in which they lived in Appian Way, Hamersley, which had apparently been valued at $280,000 in 2001. In addition, they owned an investment property in Vicker Street, Hamersley, which was valued at approximately $180,000. They also owned a Laser motor vehicle valued at approximately $14,000. However, they also owed amounts to the bank, the precise amount of which is not established by the evidence and expected to pay their son's Higher Education Contribution Scheme debt in an amount of $14,000.
The investment property in Vicker Street was sold shortly after Christina's death and part of the proceeds spent on the wedding of their daughter, to which they contributed $45,000. By March 2004, this left them with the house, in which they lived; an investment account with a balance of $150,000; and debts of approximately $33,000, plus their son's HECS debt.
By the time of their hearing, it appeared from their most recent tax returns that Anthony was earning a salary of approximately $62,000 as a bus driver and his wife was earning a salary of approximately $36,000 as a secretary. Anthony estimates the current value of the house in which he and his wife live at between $400,000 and $500,000. The funds which they had in the investment bank account appear to have been dissipated on a combination of their daughter's wedding, renovations and travel expenses. As at the date of the hearing, Anthony and his wife owed approximately $55,000 to the bank.
Anthony and his wife estimate their annual living expenses at just under $41,000 per annum.
Of all the plaintiffs, Anthony is perhaps in the best financial position by virtue of the income which he and his wife enjoy. However, they have no substantial capital beyond the house in which they live and the period for which they will continue to earn is uncertain, given that Anthony was 55 at the date of Christina's death and is now 59.

Leslie

Leslie was born on 17 April 1943 and was 59 years old at the time of Christina's death and was 63 at the time of the hearing. Leslie worked in the family business from the age of 15 until 27 years of age, during which time he lived with his parents.
Leslie and his wife Maria have four children who are all independent and live away from home. They also have five grandchildren.
Leslie and his wife operate a fruit and vegetable wholesale business. They own a property in Doghill Road, Baldivis which was valued at $350,000 in 2001, but live elsewhere in a rental property. In 2002, Leslie and his wife were forced to sell their home of 25 years in order to reduce their levels of debt. In March 2004 (and I am asked to and do infer) as at Christina's death, Leslie and his wife had debts of $315,000 as a consequence of the lack of success of their business.
In the year Christina died, Leslie and his wife did not draw anything from the business they were operating. At the time of hearing, their tax return suggested that the income they were deriving from the business was extremely modest - a combined amount of approximately $26,000.
As at the date of hearing, Leslie estimates the value of the Baldivis property at approximately $500,000 and in addition to that, equipment valued at approximately $100,000 is being used in the conduct of their business. However, as at the date of hearing, Leslie and his wife had total debts of approximately $490,000, including debts owing on credit cards in an amount of $120,000.
They estimate that their combined living expenses are approximately $35,000 per annum.
Plainly, the financial position of Leslie and his wife is precarious. For some years now they have been spending more than they earn and as at the date of Christina's death, their business was unprofitable. Their financial future depends critically upon the value of their property at Baldivis. Leslie and his wife are both approaching the normal age of retirement.

Daphne

Daphne was Christina's first child. She was born on 1 March 1938 and was 64 when her mother died and 68 at the time of hearing.

In 1952 and at the age of 14, Daphne left school in order to help out around the family home, as her mother was ill. Although Daphne obtained a diploma in dressmaking and design, as a young woman she mainly worked in the family business, until she married in 1961.
However, the marriage was not a success and after two years, Daphne and her husband separated and were later divorced. After separation, Daphne returned to the family home where she lived with her parents and worked in the family business until 1968. Because of the difficulties experienced by that business, at her father's request, Daphne left the family home and obtained a job as a cleaner at Hollywood Hospital with living quarters provided. However, she continued working part‑time at the family store.
Daphne worked full‑time at Hollywood Hospital for 27 years, until she retired in 1994.
In 1972, after the family business was sold, Daphne returned to the family home to assist in the care of her father. She has lived in the home since then.
After her father's death in 1974, Daphne continued living with her mother and working as a cleaner at Hollywood Hospital. After her retrenchment in 1994, she continued to live with her mother in the Preston Street home until her mother was hospitalised in late 1999. Her mother never returned to the Preston Street home after her hospitalisation, but Daphne has continued to live there to this day.
Because Daphne was living with her mother, it is common ground that she was her mother's primary carer during the latter stages of her life, although the other children assisted to varying degrees.
As at March 2004, and inferentially as at the time her mother died, Daphne was receiving a pension of approximately $190 a week and a return on her superannuation funds of a further $240 per week, giving her a total weekly income of approximately $430 per week. The value of her superannuation was approximately $250,000, and she had further savings of approximately $30,000. As at the time of her mother's death, and at the time of hearing, she owned a 1997 Ford Festiva.
Her financial position had not changed substantially at the time of hearing. Her superannuation has an estimated value of $217,000 and she has savings of a further $22,000. She receives approximately $300 per week from her superannuation investment, and a pension of another $127 per week. Her annual income is therefore approximately $22,000. She estimates her annual living expenses are approximately $14,000. Like all her siblings, she does not enjoy the best of health.
In very broad terms, because of Daphne's modest living expenses and her certain income from her superannuation investments and pension, at the time of her mother's death her needs were as well provided for as any of her siblings, but unlike some, but not all of her siblings, she did not own the home in which she lived.

The Law

The application is brought pursuant to s 6 of the Act which provides:
"6. Claims against estate of deceased person
(1)If any person (in this Act called 'the deceased') dies, then, if the Court is of the opinion that the disposition of the deceased's estate effected by his will … is not such as to made adequate provision from his estate for the proper maintenance, support, education or advancement in life of any of the persons mentioned in section 7 as being persons by whom or on whose behalf application may be made under this Act, the Court may, at its discretion, on application made by or on behalf of any such person, order that such provision as the Court thinks fit is made out of the estate of the deceased for that purpose."
Section 7 of the Act provides that applications may be made by, amongst others, children of the deceased.
Much has been written on the principles governing the exercise of the statutory jurisdiction. There is some controversy in the authorities as to the extent to which it is appropriate for a Court to evaluate the testamentary dispositions made by the testator from the perspective of the Court's perception of moral duty or obligation. However, in the factual circumstances of this case, I think it is unnecessary for me to enter upon that controversy.

Bosch

In Bosch v Perpetual Trustee Co Limited [1938] AC 463, the Privy Council considered an appeal from New South Wales in a case involving legislation relevantly identical to s 6 of the WA Act. The Judicial Committee analysed the language of the statutory provision and observed at 476:
"The first thing to be noticed is that the powers given to the Court only arise when any of the persons mentioned is left without adequate provision for his or her proper maintenance, which word will be used in this judgment where necessary as including education and advancement. The use of the word 'proper' in this connection is of considerable importance. It connotes something different from the word 'adequate'. A small sum may be sufficient for the 'adequate' maintenance of a child, for instance, but, having regard to the child's station in life and the fortune of his father, it may be wholly insufficient for his 'proper' maintenance. So, too, a sum may be quite insufficient for the 'adequate' maintenance of a child and yet may be sufficient for his maintenance on a scale that is 'proper' in all the circumstances. A father with a large family and a small fortune can often only afford to leave each of his children a sum insufficient for his 'adequate' maintenance. Nevertheless, such sum cannot be described as not providing for his 'proper' maintenance, taking into consideration 'all the circumstances of the case' …"
Their Lordships placed further emphasis upon the significance of the use of the word "proper" in the following passage at 478 ‑ 479:
"The amount to be provided is not to be measured solely by the need of maintenance. It would be so if the Court were concerned merely with adequacy. But the Court has to consider what is proper maintenance, and therefore the property left by the testator has to be taken into consideration. So, too, in the case of children, a material consideration is their age. If a son is of mature, or nearly mature, age, his needs both for the present and the future can be estimated without much difficulty. In the case, however, of a son of tender age, although his immediate needs can be readily ascertained, it is extraordinarily difficult even to guess what his needs may be in the future. Where, therefore, the testator's estate is a large one the Court will be justified in such a case in making provision to meet contingencies that might have to be disregarded where the estate is small …
…
Their Lordships agree that in every case the Court must place itself in the position of the testator and to consider what he ought to have done in all the circumstances of the case, treating the testator for that purpose as a wise and just, rather than a fond and foolish, husband or father."

Blore

In Blore v Lang (1960) 104 CLR 124, the High Court emphasised that the jurisdiction is not to be exercised for the purpose of doing what the Court considers to be fair as between the competing claimants for the testator's benefaction, but rather for the purpose of providing a particular claimant with adequate provision for his or her proper maintenance. Fullagar and Menzies JJ observed at 134 ‑ 135:
"The jurisdiction conferred by the Act is to interfere with the testator's dispositions when he has left a member of his family without adequate provision for his or her proper maintenance, etc., and the extent of the interference authorized is to order such provision as the court thinks fit for that person's proper maintenance. Bad conduct or character may disentitle a member of the family to needed assistance, but good conduct and honest worth are not to be rewarded by a generous but second-hand legacy at the hands of the court. Nor, in a case where a testator has chosen to dispose of the estate according to his inclination, ought the generous treatment of a child who has no need of the testator's bounty be used to determine the provision to be made for a child whose need has been disregarded or overlooked. The measure to be applied is not what has been given to the one, but what the other needs for his or her proper maintenance, giving due regard to all the circumstances of the case."

The Pontifical Society

Dixon CJ emphasised that the statutory jurisdiction was not conferred in order that a court should rewrite the will of a testator and expressed his view as to the appropriate considerations to be taken into account in the following passage from Pontifical Society for the Propagation of the Faith v Scales (1961) 107 CLR 9 at 19:
"It has often been pointed out that very important words in the statute are 'adequate provision for the proper maintenance and support' and that each of these words must be given its value. 'Adequate' and 'proper' in particular must be considered as words which must always be relative. The 'proper' maintenance and support of a son claiming a statutory provision must be relative to his age, sex, condition and mode of life and situation generally. What is 'adequate' must be relative not only to his needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and the other demands upon it, and also what the testator regarded as superior claims or preferable dispositions. The words 'proper maintenance and support', although they must be treated as elastic, cannot be pressed beyond their fair meaning. The Court is given not only a discretion as to the nature and amount of the provision it directs, but what is even more important, a discretion as to making a provision at all. All authorities agree that it was never meant that the Court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the court."

Singer

More recently the applicable principles were reviewed by the High Court in Singer v Berghouse (1994) 181 CLR 201. In that case, the Court affirmed the continuation of what has been described as the two‑stage approach to the jurisdiction - with the first stage being what is often described as the "jurisdictional question", namely, whether adequate provision has been made for the claimant's proper maintenance, with the second question, which is only addressed in the event that the first question is answered in the negative, being what provision the Court should itself make.
Mason CJ and Deane and McHugh JJ described the approach to be taken to provisions such as s 6 of the Act in the following passage at 209 ‑ 210:
"The first question is, was the provision (if any) made for the applicant 'inadequate for [his or her] proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc. were explained in Bosch v. Perpetual Trustee Co. Ltd. The determination of the first stage in the two‑stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v. Leeder, where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors." (footnotes omitted)

Vigolo

This passage was cited with approval by Gummow and Hayne JJ in the more recent decision of Vigolo v Bostin (2005) 221 CLR 191 at [75].
Other members of the Court cast some doubt upon the universality of the two‑stage approach. Callinan and Heydon JJ observed at [122]:
"We do not therefore think that the questions which the Court has to answer in assessing a claim under the Act necessarily always divide neatly into two. Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors."

The Application of These Principles to the Facts

I turn now to apply these established principles to the facts which I have found. Despite the misgivings which have been expressed as to the universality of the two‑stage approach in the passage I have just cited, it seems to me that the circumstances of the present case lend themselves conveniently to the adoption of that approach, not least because of the significant difference between the value of the estate at the time of the death of Christina (which is the point in time at which the jurisdictional question of adequacy of maintenance must be assessed), as compared to the value of the estate at the time of hearing (almost double that at the time of death which is the time at which the second question, if it arises, is to be addressed).
Predictably enough, as I have found, the financial circumstances of each of the plaintiffs varied as between themselves, both at the time of the death of Christina and at the time of hearing. Because of the multi‑faceted nature of their circumstances, it is difficult to generalise, but in very general terms it is perhaps fair to say that the financial position of Leslie was and is the most precarious, closely followed by that of Helen. Neither own the house in which they live. Mary and Evelyn are somewhat better placed, because each own the house in which they live, and Anthony perhaps best placed of all, because he and his wife not only own the house in which they live, but also have, at the moment at least, reasonable incomes from their employment.
However, I do not think that any of the plaintiffs could be described as comfortably off, as was suggested in closing submissions. They have all either reached or are fast approaching retirement age. While three of them have the security of owning the house in which they live, none of those three have a substantial capital base beyond that house. All five approach an uncertain future in retirement, in which their living standards will depend entirely upon the availability of pensions and such limited superannuation benefits as they have been able to assemble.
It could not be said that at the time of Christina's death, Daphne was in any worse position than Leslie or Helen and was in fact in a better position because of her superannuation and modest living requirements. Given security of tenure over the house in which she lives, nor could it be said that her circumstances were any worse than Mary, Evelyn or Anthony, given her substantial superannuation reserves and cash savings.
The authorities I have set out above establish that the jurisdictional question of whether the testator has made adequate provision for the proper maintenance of each of the plaintiffs is to be assessed having regard not only to their circumstances, but also to the size and nature of the estate and the circumstances of those to whom the estate has been bequeathed.
The question then is whether the bequest of an eight per cent interest in the three shops in Preston Street, Como, was adequate provision for the proper maintenance of each of the plaintiffs. Based on the findings I have made, I conclude that each of the plaintiffs either had, at the time of Christina's death, or would, in the foreseeable future, have a need for capital to provide a degree of security and some certainty in their present or pending retirement. None of them has provided an entirely adequate capital base for their retirement years. The bequest which each received went virtually no distance whatsoever towards addressing that inadequacy of capital because, as I have observed, none of the plaintiffs was given, either individually or collectively, a sufficient interest in the shops to secure an order that they be sold and the proceeds of sale distributed pursuant to s 126 of the Property Law Act. Thus, the only immediately realisable and tangible entitlement which any of the plaintiffs received under Christina's will was an entitlement to eight per cent of the net rents from the shops which, in the four years since Christina's death have produced total net rents of $120,000 or an amount of just under $10,000 (or about $2500 per annum) for each plaintiff. This is a tiny proportion of an estate having a total value of approximately $3,000,000.
I have little hesitation in concluding that such provision was quite inadequate for the proper maintenance of each of the plaintiffs. Each of the plaintiffs has an immediate or foreseeable need for access to realisable capital which their mother has failed to recognise in her will. The first stage of the process described by the High Court (ie the jurisdictional question) must be answered in the affirmative.
It is the second stage of the process which has, in this case, caused me the most anxious consideration. While the authorities establish that I must address that question by reference to the facts as they existed at the time of hearing, including the value of the estate and the circumstances of each of the parties, it nevertheless seems to me to be appropriate to take into account the fact that the value of the estate has escalated quite dramatically since Christina's death. The most significant escalation in value has been in the house which has been Daphne's home for 34 years. In this case, it would therefore be wrong, I think, to simply approach the estate as if it were a single and indivisible pot of money which should be divided between Christina's children according to their needs and circumstances. Rather, I think it appropriate to take particular account of the assets which comprise the estate and in particular, of:
(a)Daphne's long connection with the property in which she resides; and
(b)the significant escalation in the value of that property since Christina's death.
Doing the best I can to put myself in the position of a wise and just testatrix, the bequest of the family home in Preston Street, Como, to Daphne, having regard to her role as a primary carer and companion for Christina over the last 30 years of her life and the fact that Daphne does not herself have the benefit of a partner in life, would seem to me to have been entirely just and appropriate. By reference to the values applicable at the time of Christina's death, that would have given about half of the estate to Daphne. It would, I think, be wrong to now question the prudence of such a bequest by reason of the rapid escalation in value of that property between the time of Christina's death and the date of hearing.

I am therefore strongly disposed towards an outcome which leaves Daphne with the house in which she has lived for more than 30 years and which was plainly her mother's intention that she should have by reason of the significant role which she performed as primary carer and companion, provided, of course, that adequate provision for the proper maintenance of her siblings can be provided from the balance of the estate.
It was suggested in the course of argument on behalf of the plaintiffs that Daphne's interests and expectations could be sufficiently satisfied by the grant of a life estate in that house. I note, in this connection, that evidence was given to the effect that Daphne has in fact executed a will under which her estate, including the house, would be split amongst her siblings. However, because that will is, of course, revocable, I do not think I should rely upon its present terms remaining unaltered in the disposition of this case.
I have concluded that the grant of a life estate in the family home to Daphne would not sufficiently reflect the contribution which she has made to the wellbeing and welfare of her mother over the last 30 years, nor make adequate and proper provision for her old age. As I have mentioned, Daphne lacks a partner in life and has no children. As she ages, it is likely that she will need some form of care, perhaps in an old person's home or other institution. When that time comes, she may well need access to capital, and perhaps substantial capital. Although there was no evidence of this, perhaps because these events will take place so far into the future as to preclude meaningful financial prediction, it is not at all impossible that the capital required may exceed the amount of her superannuation investment and, in any event, if she were to liquidate that investment, she would be left without a substantial source of her current income. Accordingly, it seems to me to be appropriate to not disturb the bequest of the family home to Daphne. This will enable her to reside in it for as long as she wishes and in the event that she needs to sell it, use the funds thereby realised to provide her with security in her old age.
However, given the needs which I have identified on the part of each of the other plaintiffs for increased capital in their own old age, the bequest of the house and the personal assets of Christina (which were not particularly substantial) to Daphne seems to me to be quite sufficient recognition of her contribution and role and to make adequate provision for her future needs, which are quite modest and well secured by her current sources of income.
That, of course, leaves the shops which, in my opinion, should be shared equally amongst each of the plaintiffs. Although, as I have observed, their financial circumstances and future needs differ in a number of respects, they have a common need for capital so that they may approach the latter years of their lives with an enhanced capital base. Any three of them will have a sufficient interest to force a sale, thereby realising, on current values, over $200,000 for each plaintiff. This, I think, is both adequate and a proper amount for their future maintenance.
However, there would remain a risk that a minority of the plaintiffs might find their interest in the shops locked in and unrealisable, if a majority resisted sale. I will therefore invite submissions from any of the plaintiffs as to whether I should further order that the shops be sold and the proceeds distributed. There is a possible difficulty in this course arising from the fact that the plaintiffs are jointly represented. I will therefore publish these reasons and allow sufficient time to elapse for each plaintiff to consider their position and obtain separate representation if necessary, before making final orders.
For these reasons, I will therefore allow the application of each plaintiff and order that provision be made for each of them out of the estate of the deceased in the form of a 1/5th undivided share in the shops situated at 18, 20 and 22 Preston Street, Como, being portion of Swan Location 40 and being Lot 10 on diagram 13065 and being the whole of the land comprised in Certificate of Title Volume 1096 Folio 135. I will invite submissions as to whether I should also order that land be sold and the proceeds distributed.
It also seems to me to be appropriate to make orders which place each of the plaintiffs in the position they would have been in, as near as possible, had that bequest been made in the will, and I will therefore further order that provision be made for each plaintiff in the form of 1/5th of the rental received in respect of those shops since 8 August 2002 after deduction of all expenses associated therewith.

[2006] WASC 287

18 DECEMBER 2006

Key Legal Topics

Areas of Law

Succession Law

Legal Concepts

Testator's Family Maintenance

Inadequate Provision

Estate Distribution