Contencin v Tasmanian Perpetual Trustees Ltd
[2010] TASSC 3
•24 February 2010
[2010] TASSC 3
COURT: SUPREME COURT OF TASMANIA
CITATION: Contencin v Tasmanian Perpetual Trustees Ltd [2010] TASSC 3
PARTIES: CONTENCIN, Stephen James
SANDERSON, Nicole Maree
v
TASMANIAN PERPETUAL TRUSTEES LTD
FILE NO/S: 72/2009
DELIVERED ON: 24 February 2010
DELIVERED AT: Hobart
HEARING DATES: 10 and 18 February 2010
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Succession – Family provision and maintenance – Failure by testator to make sufficient provision for applicant – Whether applicant left with insufficient provision – Claims by children – Claims by adult children – Lack of contact with testatrix.
Aust Dig Succession [311]
REPRESENTATION:
Counsel:
Applicants: J F Otlowski
Respondent: D F Zeeman
The infant beneficiary: T J Williams and M D Duvnjak
Solicitors:
Applicants: Simmons Wolfhagen
Respondent: Butler McIntyre & Butler
The infant beneficiary: Gunson Williams
Judgment Number: [2010] TASSC 3
Number of paragraphs: 26
Serial No 3/2010
File No 72/2009
STEPHEN JAMES CONTENCIN and NICOLE MAREE SANDERSON
v TASMANIAN PERPETUAL TRUSTEES LTD
REASONS FOR JUDGMENT HOLT AsJ
24 February 2010
The application
The mother of two adult children left nothing to them instead bequeathing almost the entirety of her estate, worth about $640,000, to one of her grandchildren, a two year old.
The children have applied for an order making provision out of the estate for them under the Testator's Family Maintenance Act 1912 ("the Act"). Pursuant to s3, the jurisdiction to make such an order only arises if the applicant "is left without adequate provision for his proper maintenance and support". This is a question of fact. If this question is answered in the affirmative the order which may be made is for "such provision as the court or judge, having regard to all the circumstances of the case, thinks proper". This is a matter of discretion, but the discretion is limited to doing what is appropriate to remedy the breach.
Counsel for the applicants submitted that adequate provision had not been made and that the appropriate provision to be made for the benefit of the adult children was almost the entirety of the estate. Counsel for the infant beneficiary submitted that the mother had no duty to make provision for her adult children who were in good health and making their way in life.
The family
The testatrix was born in 1950 and died on 1 November 2008. Although not divorced she had been separated from her husband since late 2002. She was not in another relationship. She was survived by her two children, a son, then aged about 33, and a daughter, then aged about 31.
By the time of his mother's death the son had obtained a commerce degree and had steady employment producing an income of about $100,000 per year. He had been in a relationship for several years. He had one child, the primary beneficiary under the will, Thomas James Contencin, born 3 November 2006. The son's partner was in employment earning about $30,000 per year. She had the part-time care of two children from a previous relationship, looking after them every second weekend. Despite having been on a high income for several years the son's assets were roughly equal to his liabilities. He had a house worth about $300,000 which was subject to a mortgage of about $290,000. He had a leased motor vehicle and some furniture and effects. He had superannuation investments worth between $20,000 and $50,000. There were personal loans of about $40,000.
By the time of her mother's death the daughter had been married for a little over a year. She had a son, Liam Sanderson, born 3 March 2008. She worked for two days a week earning about $300. In addition, she received a small Centrelink allowance. Her husband had an annual income of about $36,000. They owned their home, worth about $270,000 which was subject to a mortgage of about $140,000. They each had modest motor vehicles. Between them there were personal loans of about $20,000.
In late 2001 the applicants' parents had decided to move to Tasmania. The family home in Melbourne, in which both applicants were living with their parents at the time, was sold. The family's tobacconist business, in which the daughter worked, was also sold. At about the time of the sale the daughter was given between $10,000 and $15,000 by her parents to assist her with the purchase of her home. According to the daughter's evidence, the amount was designated as a payment for her share in the business.
The parents had marital difficulties and in about September 2002 they decided to separate.
The applicants travelled to Tasmania for their father's 50th birthday in November 2002. They returned at Christmas that year. During the latter visit their mother was withdrawn spending much of the time in her bedroom. The applicants' evidence is that during this stay they attempted to draw their mother into conversation but that she was not communicative.
Between the time of the applicants' return to Melbourne after Christmas in 2002 and their mother's death in November 2008 there was very little communication between them. The son's evidence was that there were intermittent telephone calls and exchanges of Christmas and birthday cards. The telephone calls became more regular after Thomas was born in November 2006. He only saw his mother once between Christmas 2002 and a deathbed visit in 2008. That was when he took Thomas to Tullamarine airport to meet his mother whilst she was in transit during a holiday.
The daughter had frequently spoken to her mother by telephone between the time her parents moved to Tasmania and Christmas 2002. However, after Christmas 2002 the daughter did not speak to her mother by telephone nor see her prior to visiting her on her deathbed. At that time no conversation could occur as the mother was heavily sedated. The daughter's affidavit outlines her dealings with her mother in the six years up until her death. The evidence is as follows.
"17After the Christmas visit in 2002, I communicated with my mother via emails, and the sending of occasional gifts and cards. I sent my mother roses for Valentine's Day in 2003 and she replied by email to thank me.
18In June 2003 I sent my mother a gift voucher but she did not respond. She later told me she never got the voucher.
19I understand that later in 2003 my mother had a disagreement with her sister Marj, and assumed that Marj was taking sides with my father. This arose because my father, Marj and her husband Brian Smith were in Queensland at the same time and had a meal out together, but that they did not stay with my father.
20For Christmas 2003 I sent my mother a present, she then emailed me and asked why I had sent her the present when I had chosen my father over her. This letter was signed Yvonne rather than Mum.
21My mother later wrote to me in January 2004 telling me she had upsetting news, but not elaborating. She later said she was feeling better. We emailed at least once around this time. The last email I received was on 21 March 2004, after which her internet access was no longer available.
22When I sent my mother a present for Mother's day in 2004, it was returned to me and ticked 'recipient rejected'. I wrote again in June 2007 to tell my mother I was pregnant, a letter to which she replied with congratulations. I later sent her photos of my son's ultra sounds.
23When I got married in 2007 I invited my mother, first by post and then following up two weeks later. She did not reply to these invitations or attend my wedding. My brother told me she assumed she was not invited.
24When my son was born I sent my mother photographs, but these were later found unopened in her papers.
25It was not until shortly before my mother died that I became aware of the seriousness of her condition. Marj told me she needed a double lung transplant, was admitted to hospital and put on constant oxygen.
26The last time I saw my mother was when she was in hospital shortly before she died, and heavily sedated. I went to the hospital most days, sometimes twice a day. I was with my mother when she passed away."
The will
The will was made on 21 May 2007. At this time the testatrix had only one grandchild, Thomas. The daughter's child, Liam, as I have said, was not born until 3 March 2008. The will included the following:
"3 My executor will hold my estate on trust:
3.1subject to any contrary provision later expressed, to apply it first in the payment of my debts and other liabilities inclusive of all testamentary and funeral expenses;
3.2to give my motor vehicle and five thousand dollars ($5,000.00) to my brother GRAHAM R WILLIAMS if he survives me;
3.3to give the remainder of my estate to my grandson THOMAS JAMES CONTENCIN if he survives me and attains the age of twenty five (25) years but if he does not survive me to attain a vested interest then to divide the remainder equally between such of my grandchildren (excluding THOMAS JAMES CONTENCIN) living at the date of my death who survive to attain the age of twenty five (25) years.
4In the event that I have no grandchildren who survive to attain a vested interest in my estate then to divide the remainder equally between my children STEPHEN JAMES CONTENCIN and NICOLE MAREE CONTENCIN who survive me.
5My executor will have all the powers, authorities and discretions of a natural person, and must exercise those powers, authorities and discretions in the manner of a prudent trustee. In particular, my executor may:
5.1apply for the maintenance, education advancement or benefit of a beneficiary the whole or any part of the capital and income of that part of my estate to which that beneficiary is entitled or may in future be entitled and for that purpose –
5.1.1make a payment or payments to a minor beneficiary's parent or guardian or a person with whom the minor beneficiary resides; and
5.1.2accept the receipt of that payee as an absolute discharge to my executor."
Some matters of law
The Court will only intervene for the benefit of the limited class of applicants referred to in the legislation. In particular, spouses, de facto partners, children, stepchildren and in some circumstances parents. See the Act, s3A. Testamentary freedom is to be respected. A recent statement of the limits of the jurisdiction to interfere is contained in Leyden v McVeigh [2009] VSC 164 where Kaye J said at par[30]:
"In determining whether the testator owed the plaintiff a duty to make provision for his maintenance and support in his will, and in determining the extent of such provision, the courts have long recognised the importance of the basic right of a testator to exercise freedom of testamentary disposition in respect of his or her estate (see for example Grey v Harrison (1997) 2 VR 359, 363 (Callaway JA)). That right is only subordinated where, and to the extent, that the plaintiff can demonstrate that the testator has failed to discharge his moral duty to make provision in the plaintiff’s favour pursuant to Part 4 of the Act. That legislation, however, does not entitle a court to re-write the will of the testator, in order to better accommodate it to the court’s individual view as to how the testator should, or might, have exercised his testamentary power."
The legislation provides for a two stage process. The first stage, as I have said, goes to jurisdiction. The question being whether the applicant "is left without adequate provision for his proper maintenance and support". At this stage the assessment is undertaken "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" Singer v Berghouse (1994) 181 CLR 201 at 210. The assessment may properly be described as requiring a value judgment based on considerations of moral claims and moral duty. See Vigolo v Bostin (2005) 221 CLR 191 per Gleeson CJ at par[25].
If the applicant has been left without adequate provision for his or her proper maintenance and support the extent of the power to interfere is limited to what the just and wise testator, knowing the circumstances, would have done to make adequate provision for the applicant's proper maintenance and support. See Allen v Manchester (1922) 41 NZLR 218 at 220 – 221 and Bosch v Perpetual Trustee Co Ltd (1938) AC 463 at 479.
A useful summary of the operation of the legislation is to be found in the judgment of Dixon CJ and Williams J in McCosker v McCosker (1957) 97 CLR 566 at 571 – 572 where their Honours said:
"The question is whether, in all the circumstances of the case, it can be said that the respondent has been left by the testator without adequate provision for his proper maintenance, education and advancement in life. As the Privy Council said in Bosch v Perpetual Trustee Co (Ltd) (1938) AC 463; (1938) 38 SR (NSW) 176 the word 'proper' in this collocation of words is of considerable importance. It means 'proper' in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."
"The question whether the applicant was left without adequate maintenance must be answered as at the date of death. But, of course, provision for such maintenance can be made out of the funds of the testator as they stand at the date of the making of the order, including any capacity for increase which is then present" White v Barron
(1980) 144 CLR 431 per Barwick CJ at 437.
The Act, s8(1), empowers the Court to dismiss an application, which otherwise might have succeeded, if the character or conduct of the applicant is disentitling. Where the applicant and testator or testatrix have been estranged the neglect by the applicant might substantially reduce the moral force of the claim or even defeat it. See Rowley v Bouwmeester [2005] TASSC 34 at pars[34] to [39] and Dodge v Blissenden [2009] TASSC 116 at pars[21] to [27].
Where the applicants are healthy adults able to support themselves and having no special needs there is no rule that they cannot succeed. The claim must still be considered in light of all of the relevant circumstances which include the size of the estate and the strength of the competing claims. See Dodge v Blissenden (supra) at par[30].
Although the children of the applicants are not entitled to relief under the legislation, the fact that an applicant has a dependent child is relevant to the consideration of what is required for the applicant's proper maintenance and support. See Goodman v Windeyer (1980) 144 CLR 490 at 498. However, when the will makes provision for a grandchild, the indirect benefit to an applicant who is the parent of the grandchild can be taken into account. See Re Baker (1962) NZLR 758.
In considering what provision is adequate for an applicant's proper maintenance and support regard may be had to whether some buffer against the vicissitudes of life should have been afforded. This is particularly so where an applicant has responsibility for a young family. See Leyden v McVeigh (supra) at par[41].
Were the applicants left without adequate provision for their proper maintenance and support?
At the date of his mother's death the son was a university graduate and a high income earner. His evidence was that he suffers from a degenerative condition in his left knee, but otherwise is in good health. Although his assets roughly equal his liabilities his earning capacity provides him with an excellent opportunity to create personal wealth. He derives a significant indirect benefit from his mother's will in that the trustee may make payments to him to be applied for the maintenance, education, advancement and benefit of his young child. His relationship with his mother over the last six years of her life was not close.
Having regard to the size of the estate; the fact that the applicants and the grandchild are the only persons having claims, the relatively young age of the son and the advantage to him of acquiring some buffer against the vicissitudes of life I find that, notwithstanding the other features which I have mentioned, the indirect benefit derived by the son from the bequest to his child was insufficient to amount to adequate provision for his proper maintenance and support.
There is no provision in the estate for the daughter. Although in net asset terms the daughter and her husband are better off than the son neither she nor her husband have his large earning capacity. The factors which cause me to conclude that adequate provision had not been made for the proper maintenance and support of the son apply with equal force to the daughter and must necessarily result in the same conclusion in respect of her.
What adjustment is necessary to make adequate provision for the proper maintenance and support of the applicants?
Counsel for the applicants submitted that, after the payment out of the estate of the costs of this litigation, proper provision is a distribution to the son of about $220,000 and a distribution to the daughter of about $330,000. I do not agree and, in particular, I do not think that the mother's duty to her children was such as to almost entirely extinguish her testamentary discretion so that she was compelled to leave almost all to her children. The applicants are healthy adults making their way in life. The strength of their claims is diminished by the lack of a close relationship with their mother in the last few years of her life. I think that a provision of about 60 per cent of the net value of the estate is adequate to accommodate the mother's moral duty to them. The son should be awarded less than the daughter because of his superior earning capacity and to make allowance for the indirect benefit which he derives from the bequest to his child. The son should receive $120,000 and the daughter $240,000.
Orders
These will be the orders:
(1)The estate is to be distributed as if, in lieu of cl 3, the will contained the following provision:
"3 My executor will hold my estate on trust:
3.1subject to any contrary provision later expressed, to apply it first in the payment of my debts and other liabilities inclusive of all testamentary and funeral expenses;
3.2to give my motor vehicle and five thousand dollars ($5,000.00) to my brother GRAHAM R WILLIAMS if he survives me;
3.3to give my son STEPHEN JAMES CONTENCIN the sum of one hundred and twenty thousand dollars ($120,000.00);
3.4to give my daughter NICOLE MAREE SANDERSON (nee Contencin) the sum of two hundred and forty thousand dollars ($240,000.00);
3.5to give the remainder of my estate to my grandson THOMAS JAMES CONTENCIN if he survives me and attains the age of twenty five (25) years but if he does not survive me to attain a vested interest then to divide the remainder equally between such of my grandchildren (excluding THOMAS JAMES CONTENCIN) living at the date of my death who survive to attain the age of twenty five (25) years."
(2) A certified copy of this order is to be made upon the probate of the will.
2
7
0