Cotton v Owen & Ors No. Scgrg-99-867 Judgment No. S391

COTTON V OWEN & ORS

[1999] SASC 391

JUDGE BURLEY. By application dated 21 July 1999 the plaintiff seeks the following order:
“The trustees do forthwith cause the sum of $550.00 per week to be paid to the plaintiff from the Estate of Peter Millner Cotton, Deceased pending the hearing and determination of these proceedings.”
The plaintiff does not rely upon the provisions of SCR 25 which provide for summary determinations of proceedings of issues in proceedings. It has been argued that on the proper construction of certain provisions of the Inheritance (Family Provision) Act 1972 (the Act), the Court has power to make an interim award pending final determination of the plaintiff’s entitlement.
The plaintiff relies upon her affidavit sworn on 16 July 1999. The first defendant, the executor of the deceased’s estate, has filed an affidavit setting out the details of the estate. He will abide the event. The second to fifth defendants oppose the application and the sixth defendant relies upon the submissions advanced by the second to fifth defendants. I shall refer to the second to fifth defendants as “the defendants”. The defendants have not filed affidavits in response to the plaintiff’s affidavit.
The first defendant’s affidavit of 16 August 1999 discloses the present position with regard to the estate. It consists of furniture and household effects estimated to be worth $53,000, cash in an investment account amounting to $214,637.56 and shares valued at approximately $206,000.
The following narrative is taken from the plaintiff’s affidavit. The deceased died on 20 September 1998. The plaintiff is 72 years of age. The deceased was survived by the plaintiff and the second to fifth defendants who are his daughters by a previous marriage. The deceased’s Will provided for payment of the income from certain shares to the sixth defendant for a period of three years from the date of his death and after that period the defendants were to take those shares equally. All the plaintiff’s personal chattels, personal ware and old books were left to the plaintiff and the residue of the estate was to be divided equally between the defendants.
In 1972 the plaintiff and the deceased commenced to live together and in 1974 they were married. The plaintiff had previously been married in 1950. That marriage ended in divorce in 1972. As part of the property settlement she received a half interest in the former matrimonial home, which she gave to her two sons shortly after the divorce.
After the plaintiff and the deceased commenced to live together, the deceased purchased a house at Clarence Gardens and they lived there until his death.
In 1984 the deceased transferred the Clarence Gardens’ house into the sole name of the plaintiff.
The deceased provided the plaintiff with $200.00 per week in cash for household expenses and she also had the use of a bankcard which the deceased paid.
The plaintiff is in receipt of the pension amounting to $368.00 per fortnight. She owns a motor car, she has savings amounting to approximately $19,000.00. The house in which she resides is worth approximately $170,000.00. She disputes that the household effects and furnishings belonging to the deceased at the date of his death had a value of $53,000.00. She asserts that most of the household furniture and effects either belong to her or were held jointly by the deceased and herself.
In her affidavit of 21 July 1999 the plaintiff stated that from the date of death she received the sum of $200.00 per week from the Peter Cotton Family Trust. Those payments ceased in February of this year. She was informed that the trustees wound up the trust and realized all of the trust’s investments and that the funds so realized were paid over to the first defendant as executor of the deceased estate.
The plaintiff says that as at the date of death she had approximately $30,000.00 in her own bank account. She now has only $19,000.00 in savings. Exhibit BCG2 [sic] to her affidavit discloses monthly expenses of $2,309.00.
The plaintiff claims that she is entitled to an interim award out of the estate of the deceased. It is her case that she has been left without adequate provision by the deceased, in particular, because the pension is very much less than that which she had available to her prior to the death of the deceased.
The first thing that needs to be determined on this application is whether or not the Court has power to make an interim order and the second is, if there is such a power, whether, and if so to what extent, the discretion should be exercised in favour of the plaintiff.
Mr Haines, counsel for the plaintiff, contended that an examination of various sections of the Act led to the conclusion that there was power to make an interim order.
“Interim”, at least in the context of an interim injunction, suggests an order which does not have a final effect. I have mentioned that the plaintiff did not, on this application, have recourse to the provisions of SCR 25. That Rule allows final findings to be made on a summary hearing in certain circumstances. As I understand Mr Haines’ submissions, the plaintiff does not seek on this application final findings of fact and conclusions of law by way of a hearing on affidavits. Rather, it was put to me that the legislation permitted me to make interim findings or interlocutory findings. I take that to mean that the Court makes an assessment of the plaintiff’s case by reference to the affidavit material then before the Court and, if the assessment is that the plaintiff has a reasonable prospect of success, an interim order may be made if the plaintiff is in necessitous circumstances.
I turn to a consideration of the legislation. Section 7 of the Act infers upon the Court a discretion to “order that such provision as the Court thinks fit be made out of the estate of the deceased person for the maintenance, education or advancement of the person so entitled”. Section 7(4) enables the Court when making such an order, to “impose such conditions, restrictions and limitations as it thinks fit”.
Section 7(6) enables the Court to “order that the provision shall consist of a lump sum or periodic or other payments or a lump sum and periodic or other payments”. Section 9(1) of the Act provides for the form of the order. Sub-section (5) allows the Court “at any time, and from time to time, on the application of the administrator or of any person beneficially entitled to or interested in any part of the estate of the deceased person, [to] rescind or alter any order”.
Section 11(1) of the Act is as follows:
“11.(1)The Court shall have power at any time to fix a periodic payment, or lump sum, or a periodic payment and a lump sum, to be paid by any person, to represent, or in commutation of, the proportion of the sum ordered to be paid that falls upon the portion of the estate to which he is entitled, and to exonerate that portion of the estate from further liability.”
Mr Haines submitted that the passage “to be paid by any person” should be read as “to be paid to any person”. So construed, he argued, that the powers conferred by Section 11(1) added strength to the argument that an interim order might be made. I disagree that the section should be so construed. I do not consider that the word “by” has been included in the provision by mistake as submitted by Mr Haines. The section makes sense in the form in which it appears. In any event, the Court is not able to re-word a provision in a statute merely because it forms the view that a mistake has been made in the wording of the section.
Mr Haines directed my attention to Section 12 of the Act which is as follows:-
“12... Where the Court has ordered periodic payments, or has ordered a lump sum to be invested for the benefit of any person, it shall have power to inquire whether at any subsequent date the party benefited by the order has otherwise become possessed of, or entitled to, provision for his proper maintenance, education and advancement, and into the adequacy of that provision, and may discharge, vary, or suspend the order, or make such other order as is just in the circumstances.”
It was submitted that when this section is read in conjunction with the other sections referred to above, it was clear that the legislature intended to confer upon the Court the power to make interim awards. I do not agree with that submission. In my view, the proper construction of Section 12 is that it provides for what is referred to in the bankruptcy jurisdiction as “after-acquired property”. If a plaintiff is awarded provision out of the estate pursuant to the provisions of the Act and later comes into other property, the Court may alter the original order for provision, depending upon the extent of the after-acquired property of which the plaintiff has become possessed.
In support of his submissions, Mr Haines referred me to de Groot and Nickel “Family Provision in Australia and New Zealand” (1993), paragraph 204.1, where the learned author said:-
“The legislation is remedial in character and must be construed so as to give the most complete remedy which the phraseology will permit. The courts may be said to have adopted a liberal view in the interpretation of this legislation from its very beginning.”
A number of High Court decisions are referred to support those propositions. I agree with what the learned authors have said in general about the effect of the legislation and how it is to be interpreted.
Interim orders are dealt with by the learned authors at paragraph 701 et seq. Reference is made to the provisions of Section 9(5) of the New South Wales Family Provision Act 1982 which specifically permits interim orders to be made. Having reviewed a number of cases, some of which I will return to shortly, the learned authors expressed the view (at 151) that, in the absence of specific legislation, interim orders may be made in special circumstances.
Mr Haines also relied upon In Re Saxon (1975) 12 SASR 110, decision of Hogarth J. In that case the deceased left an estate worth approximately $120,000.00. The plaintiff was the deceased’s widow. He was left with furniture and personal effects in the matrimonial home, a legacy of $2,000.00 and the use and enjoyment of the matrimonial home during her lifetime jointly with her sister. She was also provided with an annuity of $3,000.00. The executor refused to pay her legacy or the annuity because she had made a claim for further provision out of the estate, it apparently being the executor’s view that the estate was frozen until the proceedings were completed. Hogarth J said (at 114):
“... I think it disgraceful that a woman, the widow of a comparatively wealthy man, should have been left to make do in this way. In evidence the applicant said that she had made one inquiry from an officer of the respondent company and was told that, owing to her application, the funds of the estate were frozen, and she could have nothing until the matter was disposed of. It should have been quite obvious to anybody who gave any consideration to the matter that, following these proceedings, the applicant could not be any worse off than under the provisions of the will, unless indeed the respondent company intended to reserve a fund against the possibility of any costs being awarded against her. Such an eventuality must have seemed remote ...”
This decision was not relied upon to support the proposition that an interim award could be made. As I understand it, it was cited as being relevant to the discretion to be exercised if it is held that the Court has power to make an interim order.
Mr Carpenter, counsel for the defendants, referred to a number of cases to support the contention that the legislation did not confer upon the Court the power to make an interim order. He referred to Re Piper (1960) 77 WN (NSW) 197. In that case Myers J followed his own decision in Re Yates (1955) 72 WN (NSW) 497 where he came to the conclusion that the Court did not have power to make an interim order. In Re Piper the Judge at first instance made what he described as interim orders only, giving liberty to the parties to apply in certain circumstances. Myers J said that that order was to be contrasted with the order made by Roper J InRe Porteous [1949] VLR 383. In the latter case the order gave to the applicant an annuity during her life charged upon capital and income and then reserved to the parties liberty to apply. Further application was made in pursuance of the liberty so reserved. The Court held that the order which had been made was a final order in the sense that it made complete and final provision for the applicant and that the liberty to apply which had been reserved did not and could not entitle the applicant to seek any further order increasing the provision which had been made for her.
This approach would seem to be consistent with the provision of the legislation in force in this State. None of the sections specifically confers upon the Court power to increase the provision made for a plaintiff after a final award has been made. The order may be varied. Section 9(5) of the Act enables the administrator or any person beneficially entitled to or interested in any part of the estate to rescind or alter any order. Sub-section (6) says that notice of such application must be served on all person entitled to any benefit under the order. There is, thus, no right conferred upon a plaintiff to apply for an increased award. I have already mentioned Section 12 and the circumstances under which a final order might be varied or altered. The section does not provide for an increase in the provision. That must necessarily be so because Section 12 deals with the position of a plaintiff coming into additional property after the original order for provision has been made.
Both counsel referred to Young v Salkeld (1985) 4 NSWLR 375. In that case Young J dealt with the provisions of Section 9(5) of the Family Provision Act 1982 (NSW) which specifically conferred upon the Court power to make an interim order. His Honour reviewed the cases prior to the enactment of Section 9(5) and he referred to six categories of cases. I may have misunderstood Mr Haines’ submission, but I took it to be that some at least of the six categories mentioned by Young J are able to be made under the legislation in force in this State. This submission must be looked at in light of the approach that Young J took in Young v Salkeld. For example, he referred to situations (a) and (b) as being those mentioned by Myers J in Re Piper. They are:
“(a).. a provision is made for a limited period with leave to the applicant to move for further provision at the expiration of the period; and
(b).... complete provision made for an applicant, such provision only to endure until further order of the Court, reserving liberty to any party to apply to increase, reduce, rescind or substitute.”
By making such reference, I do not take Young J to have said that prior to the enactment of Section 9(5), the Court could make such orders. I think his Honour was merely setting out a number of cases which might be considered as interim. Further, his reference to “increase” in paragraph (b) is not quite accurate when read in the context of what Myers J said in Re Piper because Myers J (at 199) came to the view that a final order could not subsequently be increased. Consequently, I do not think that the analysis of Young J in Young v Salkeld assists the plaintiff in this case. Rather, it assists the defendant to the extent that the case reveals that it was thought necessary to include a specific provision in the New South Wales legislation enabling interim orders to be made.
In two Victorian cases, In Re Porteous [1949] VLR 383 and In Re Breen [1933] VLR 455, the Court held that a final order could not be later increased. The Full Court of the Supreme Court of Queensland came to the same conclusion in Re McGregor [1956] QSR 596. These cases support the defendants’ case.
In light of the conclusions to which I have come, as set out above, in relation to the way in which the various provisions of the Act should be construed, I think there is little doubt that the Act in its present form does not enable a Court to make an interim order on an interlocutory basis.
I emphasise the expression “on an interlocutory basis”, because a number of the cases cited above have dealt with, as far as I can see, the situation where an application for provision has proceeded to trial and at the end of that trial the Court has made an order awarding further provision but giving liberty to the parties to apply. That is not the situation with which I have to deal on this application. The plaintiff has sought an interim order for periodical payments to be made until trial. I have not been asked to make final findings of fact, nor could I do so on the affidavit material before me. In other words, as I have said, the plaintiff has not sought a summary determination of her entitlement.
In my view, it is not open to the plaintiff under the provisions of the Act to seek an interim order. There would need to be an amendment similar to the amendment introduced into the New South Wales legislation by Section 9(5) of the New South Wales Act. For these reasons, the plaintiff’s application must be refused.
I should mention that during the course of argument, I was informed that the defendants made an open offer to the plaintiff to resume the payments of $200.00 per week that had been made to her prior to the winding up of the trust. Upon the affidavit material before me, there has been a failure by the testator adequately to provide for the living expenses of the plaintiff since the trust has been wound up. I do not know whether the testator contemplated that the trust would continue and that the plaintiff would thereby derive sufficient income to enable her to maintain the lifestyle she enjoyed whilst the testator was alive. Whatever might have been the testator’s intention, it seems to me that the plaintiff has a strong case to obtain further provision out of the estate. That, in turn, suggests that the present impasse might be resolved by the executor, with the consent of the other defendants, paying to the plaintiff until trial, a weekly sum of at least $200.00.

[1999] SASC 391

17 September 1999