Davies v James
[2019] TASSC 32
•16 August 2019
[2019] TASSC 32
COURT: SUPREME COURT OF TASMANIA
CITATION: Davies v James [2019] TASSC 32
PARTIES: DAVIES, Catherine Anne
v
JAMES, Richard Henry
as Executor of the Estate of the late Gwendoline James
JAMES, Richard
JAMES, Julie Louise
JAMES, Jennifer Carol
FILE NO: 2710/2018
DELIVERED ON: 16 August 2019
DELIVERED AT: Hobart
HEARING DATES: 7, 8 and 9 August 2019
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Succession – Family provision – Criteria for determining application – Treatment of particular applicants – Adult children generally –Medium sized estate – Equal bequest to four children – Applicant's failure to show that adequate provision for her proper maintenance and support had not been made.
Testator's Family Maintenance Act 1912 (Tas), s 3(1).
Aust Dig Succession [1431]
REPRESENTATION:
Counsel:
Applicant: D Palmer
First and second respondents: In person
Third and fourth respondents: C Schokman
Solicitors:
Applicant: Worrall Moss Martin Lawyers
First and second respondents: In person
Third and fourth respondents: Ogilvie Jennings
Judgment Number: [2019] TASSC 32
Number of paragraphs: 30
Serial No 32/2019
File No 2710/2018
CATHERINE ANNE DAVIES v RICHARD HENRY JAMES AS
EXECUTOR OF THE ESTATE OF THE LATE GWENDOLINE JAMES and RICHARD JAMES and JULIE LOUISE JAMES and JENNIFER CAROL JAMES
REASONS FOR JUDGMENT HOLT AsJ
16 August 2019
The application
This is a claim by an adult child for further provision from the estate of the late Gwendoline James who died, aged 93 years, on 27 May 2018. Mrs James' husband had predeceased her in 2007. She was survived by her son, Richard (then aged 65 years), and three daughters, Jennifer, Julie and Catherine (then respectively aged 64 years, 62 years and 59 years). Mrs James was also survived by seven grandchildren. Her estate comprised $10,512.50 in a savings account and her home at Lindisfarne.
Mrs James had made her will in March 1991 in which she appointed her son as an executor, directed that the money in her savings account be divided equally amongst named grandchildren and directed that the balance of the estate be converted into cash and after payment of debts be divided equally between her four children.
The Lindisfarne home formerly occupied by Mrs James is subject to a contract of sale with expected net proceeds available for distribution of about $470,000. This would result in each of the four children receiving a sum of about $117,500.
The youngest daughter, Catherine, and her husband are dependent upon Centrelink payments for their day-to-day living expenses. They own a house, which is about 40 minutes drive inland from Rockhampton in Queensland. According to a computer generated report entitled "CoreLogic RP Data - RP Autoval Automated Valuation", the house has an estimated price range of $133,156 to $162,747. The house is subject to a mortgage securing a loan, the current debit balance of which is about $156,000.
No personal financial information has been provided by the son. The two other daughters have provided financial information. The eldest daughter, Jennifer, is unmarried and lives in a two bedroom house on Crown Land at Seven Mile Beach in Tasmania. The Crown Land is leased to a business engaged in sand mining on the property and Jennifer occupies the house by permission of the lessee. She has no assets of substance and is dependent upon a Centrelink pension supplemented by an income derived from agisting horses on the property. Her weekly income is about $550. The middle daughter, Julie, is unmarried and owns a house at Howrah in Tasmania having a value, according to her estimation, of $509,000. The house is subject to a mortgage securing a loan, the current debit balance of which is about $184,000. She is employed as an administration officer currently receiving a salary of about $70,000. She has superannuation investments having a value of about $110,000, but no other assets of significance.
The financial circumstances of the three daughters are roughly the same as they were at the time of their mother's death.
The youngest daughter, Catherine, has applied for an order under the Testator's Family Maintenance Act 1912 making further provision for her from the estate. Her brother and two sisters are the respondents in the proceeding. They make no cross-claims.
The legislation
The Act, s 3(1) is as follows:
"Claims for maintenance against estate of deceased person
(1) If a person dies, whether testate or intestate, and in terms of his will or as a result of his intestacy any person by whom or on whose behalf application for provision out of his estate may be made under this Act is left without adequate provision for his proper maintenance and support thereafter, the Court or a judge may, in its or his discretion, on application made by or on behalf of the last-mentioned person, order that such provision as the Court or judge, having regard to all the circumstances of the case, thinks proper shall be made out of the estate of the deceased person for all or any of the persons by whom or on whose behalf such an application may be made, and may make such other order in the matter, including an order as to costs, as the Court or judge thinks fit."
I set out, in brief form, some matters which, in the circumstances of the present case, inform as to the application of the provision:
· The children of a deceased are eligible to bring an application for provision. The Act, s 3A.
· To come within the operation of the provision an applicant must establish, as a matter of fact, that he or she has been "left without adequate provision for his (or her) proper maintenance and support". The Act, s 3(1).
· The question of whether the applicant is within the operation of the provision is answered as at the date of death of the testator or testatrix. Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494.
· The matter is to be considered from the perspective of a wise and just testator or testatrix. Bosch v Perpetual Trustee Co [1938] AC 463 at 478 – 479.
· The testator or testatrix is assumed to have been aware of all of the relevant circumstances of those having a claim on the bounty, including reasonably foreseeable eventualities existing at the date of death. Litchfield v Smith [2010] VSC 466 at [26].
· In making the appraisal the Court is to connect the general, but value laden language, of the provision to prevailing community standards. Vigolo v Bostin [2005] HCA 11, 221 CLR 191.
· The appraisal generally requires consideration to be given to the applicant's financial position, the size and nature of the deceased's estate and 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.
· Where a beneficiary says nothing as to his or her financial position, the Court is entitled to assume that the beneficiary has adequate resources upon which to live. Anderson v Teboneras (1990) VR 527 at 535.
· An adult child does not need to establish special need before provision can be made. However, ordinarily the community does not expect the parent to provide an unencumbered house to their children, but if assets permit and the relationship is such as to justify it, there might be such an obligation. Taylor v Farrugia [2009] NSWSC 801 at [57] and McGrath v Eves [2005] NSWSC 1006 at [67].
· The word "proper" in the provision is of considerable importance. It means proper in all the circumstances of the case. Those circumstances will include the standard of living enjoyed by the applicant and those having competing claims, the need for assistance and the extent of the testator's or testatrix's ability to meet the claims. McCosker v McCosker (1957) 97 CLR 566 at 571–572.
· The word "adequate" is concerned with the quantum of the provision which should be made so that the provision is proper. Bosch at [476].
· The word "maintenance" may imply mere continuity of a pre-existing state of affairs and the word "support" may imply provision beyond bare need. Vigolo at [115].
· If the jurisdictional question of fact, namely whether the applicant has been "left without adequate provision for … proper maintenance and support" is answered in the affirmative "the Court or a judge may, in its or his (or her) discretion" order provision or further provision. The Act, s 3(1).
· The legislation is not designed to allow the Court or a judge to rewrite a will without restraint so as to impose the judge's own view of how the testamentary power should have been exercised. Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 19.
· Regard may be had to the deceased's person's reasons for making the dispositions made by the will. The Act, s 8A.
· The way in which the discretion, if it arises, is to be exercised will be influenced by the same factors taken into account in coming to the conclusion that an applicant has been left without adequate provision for proper maintenance and support. Singer at [210].
· Where provision, or further provision, is to be made, regard may be had to the funds of the estate as they stand at the time of the order, rather than the judge being confined to the position at the date of death. White v Barron (1980) 144 CLR 431 at 437.
The Singer considerations
The evidence relied upon in the preparation of these reasons, unless otherwise stated, was not the subject of controversy. There is highly detailed evidence from the applicant which is not recorded in these reasons. For example, evidence of extra housework which she undertook as a child after her three older siblings had left home. The evidence may have provided a background, but I have not regarded it as being of any, or sufficient, relevance to record in the appraisal of the matters which I am required to consider.
The applicant and her husband are in financial difficulty. They have a mortgage debt of about $156,000 on their home which may be worth less than that and which is in need of repairs. Their motor vehicle requires repairs likely to cost about $5,000. They have no superannuation and no assets of substance other than their home.
The inability of the applicant and her husband to acquire financial security in their advancing years is, at least in part, due to the applicant's husband being forced to cease employment in 2012 as a result of the onset of post-traumatic stress disorder. The condition is permanent. The applicant ceased her employment as a counsellor in 2015 after suffering a minor stroke and has not returned to work since, instead remaining at home to look after her husband. She receives a Centrelink Carer's Pension. Both the applicant and her husband remain Centrelink dependent.
The applicant and her husband had substantial funds available to them in late 2014 and early 2015, but these funds have now been completely dissipated. In 2014 the applicant's husband received a worker's compensation payout of $152,083.63. At about the same time he cashed in his superannuation and insurance entitlements totaling about $65,000. In 2015 the applicant also cashed in her superannuation investments receiving about $19,000. The total of the payments was accordingly about $236,000. There is no evidence of any of this money being used to pay down the mortgage debt on their home. The funds were used on living expenses, home renovations, upgrades to a van (including the installation of cruise control) and the purchase of an antique business, which was unsuccessful and wound up in 2016.
The combined Centrelink income of the applicant and her husband is about $670 per week. They have negotiated with their bank to service their mortgage debt on an interest only basis. They have miscellaneous small debts to pay in addition.
The applicant considers that she is unable to return to work. In her affidavit she said:
"Neal is no longer able to work because of his PTSD. He attends a psychologist every 4 to 6 weeks. Each appointment leaves us approximately $30.00 out of pocket after the Medicare rebate.
Neal receives a Disability Support Pension from the Australian Government of $1,380 per month. Neal's total income per annum is $15,560.00. Neal also writes books which he sells on Amazon. As at October 2018, he had sold $43.28 worth of books.
I had a mild stroke in 2015, which resulted in me having to cease work. I lost a lot of self confidence and self-esteem following my stroke. I have been unable to return to work since, due to my role as Neal's carer.
Neal is not able to live independently, as he suffers from nightmares and anxiety. He rarely spends time in public as a result of his PTSD. I have to go with Neal everywhere. He is reliant upon me to attend doctor's appointments with him. He comes with me when I do our shopping. During my visits to Tasmania in 2017, I had friends look after Neal and I spoke to him on the phone regularly.
I also see Mr Tom De Paw in relation to my diagnosis of depression and anxiety. I was diagnosed with depression and anxiety in approximately 2016 by my then treating clinical psychologist, Dr Allan Keen. I saw Dr Keen for about a year, and have been seeing Mr De Paw since. I see Mr De Paw, who is based in Rockhampton, every three months. As is the case with Neal's visits, my attendance with Mr De Paw leaves me approximately $30.00 out of pocket for each session.
Neal's condition worsened after my Mother's death, due to my stress and depression. I consider that it is not possible for me to return to work."
Notes taken by the husband's psychologist in 2019 contain no mention of a need for constant homecare, but include the following:
"I'll go to cafes … Written 4 murder mystery (sic) … I just make things work. Catherine wasn't coping well I worked with 2 years as a counsellor – Get to the point to do lectures …. I'm working hard we are on the poetry line … Cognitive response, it's a block. I go to the shopping centre to fight it, now I can order coffee … writing has helped me incredibly … I'm not ready to go back to work I'm nearly ready".
On the occasions when the applicant came to Tasmania during 2018 her husband stayed at home with neighbours keeping an eye on him.
Although I have insufficient information to assess the likelihood, I consider that there is a reasonably foreseeable possibility that the applicant, if she wishes to do so, could return to paid employment (at least in a part-time capacity) despite her husband's ongoing psychological condition.
The distributable value of the deceased's estate is about $480,000. There is no suggestion from the applicant that she contributed to the accumulation or maintenance of that estate.
The son of the deceased put forward no evidence as to his financial affairs. However, the applicant obtained a CoreLogic automated valuation of her brother's home at Lindisfarne, according to which the estimated price range for the property is $327,803 to $481,586. She also obtained a title copy showing that the house was acquired in 1993 and that the title is subject to a mortgage registered to the National Australia Bank. Based on the fact that the son has not put forward evidence of his financial positions, I assume that he has adequate resources to live and save for his retirement independently of the bequest to him. Notwithstanding this, and judging by the computer generated estimate of the value of his home, and the fact that he continues to work as an accountant, it appears to me that he is not wealthy. No evidence was adduced by the applicant, through cross-examination of her brother or otherwise, which might indicate that he has resources available to him to live an affluent lifestyle. His siblings were likely to have had some knowledge of his lifestyle and I infer that because of his position as executor he chose to stay out of the contest, confining himself mostly to disclosure of estate assets.
Earlier in these reasons I provided a summary of the financial position of the other two daughters. I am satisfied that this summary provides a fair reflection of their financial position, notwithstanding counsel for the applicant having submitted to me that I should not accept their credibility. There was a complaint that the evidence of Jennifer lacked supporting documentation, but there was no evidence to suggest that such material was needed or had the potential to undermine her statement of financial affairs. Counsel focused on a disclosure by Jennifer during cross-examination that she owned four retired racehorses. I draw no adverse inference from this. There is no reason to believe that the horses are assets of financial value rather than liabilities. Her continuing ownership of the horses is consistent with a former racehorse trainer (which Jennifer is) wanting to care for animals for which she has affection and perhaps a sense of obligation. The complaint about the evidence of Julie was a failure by her to give specific information about the amount of her redundancy package and her superannuation position at the time she left employment with electricity company Aurora in 2010. It is understandable that before coming to court she did not foresee a need to attempt to retrieve this old financial information. I accept that she no longer has any reliable memory about the financial details pertaining at the time. In her financial statement supplied to the Court Julie put her after tax income in the box marked "Total salary or wages before tax" and still included her tax as part of her expenditure, so as to produce a double counting of tax. She said that this was the result of a mistake. I observed her carefully in the witness box and I do not doubt her credibility. I accept that this was an honest mistake and not an attempt to deceive.
The applicant and her siblings had always received the love and support of their parents. The parents were never wealthy. The applicant's father supported the family by working in the Postmaster-General's Department, by doing cleaning work at various schools and by seasonal apple picking. The applicant's mother stayed at home doing the cooking, household tasks and making clothes for the three daughters. Despite the financial circumstances, according to Jennifer's affidavit, all four children were given a private school education and participated in extracurricular activities.
Three of the children were supported in adulthood. In the case of the applicant she had her first child in 1976 when she was aged 18 years and still living at home. The applicant married in April 1977 and moved out of her parents' home. Within about four months she had separated from her husband and returned with her son to the family home. After a few months the applicant reconciled with her husband and she and her son moved back in with him. The applicant divorced and remarried. In 1990 her second marriage broke down and her son lived with the testatrix and her husband for about five years between the ages of 14 and 19. There is no evidence from the applicant that she provided financial support for her son's upkeep during this time. In 1985 the applicant's parents had loaned to her the sum of $3,000 to enable her to undertake a trip to Japan. This money was later repaid.
The applicant has lived interstate continuously since 1980. In 2007 she and her present husband purchased their home in Queensland. Despite living interstate, the applicant maintained contact with her parents making regular phone calls, writing letters and making the occasional trip to Tasmania to visit. By 2015 the deceased was suffering from mild cognitive impairment. She had a fall and was admitted to hospital. There was talk of her being transferred to a nursing home. In 2016 the deceased was diagnosed with Alzheimer's disease. She had given an enduring power of attorney to her son who was managing her financial affairs. The applicant maintained a close interest in her mother's financial affairs and wellbeing. In 2017 she formed a view that the power of attorney was being mismanaged and that her mother would be better placed in an aged care facility. The applicant considered that it was wrong for her brother to use the power of attorney to continue to pay health insurance premiums and contents insurance for Jennifer, which her parents and later her mother, had been doing for many years. Although the other three children wanted to support their mother by assisting her to continue to live in the family home, the applicant thought that she would be better placed in an aged care facility. In January 2018 the applicant applied to the Guardianship and Administration Board for a review of the power of attorney and for a guardianship order to be made in her favour. If the mother was to remain at home it was the intention of the applicant to "lock … up" her home in Queensland and move with her husband into the mother's home so as to relieve her siblings of some of the burden. The testatrix died before the application could be determined and so the plan did not eventuate.
So far as the other children were concerned, the testatrix had lent money to her son to purchase a home which was repaid in full in 1988. She and her husband had assisted their daughter, Jennifer, for many years by paying for her health insurance and contents insurance. There is no evidence of any financial support having been provided to the other daughter, Julie, in her adulthood.
The three siblings who resided in Tasmania visited their mother regularly. Family functions and many Sunday lunches were conducted at Jennifer's Seven Mile Beach home, a venue chosen because the testatrix enjoyed seeing the horses on the property. Julie had for many years, up until the death of the testatrix, visited several times per week assisting with grocery shopping and housework. The applicant gave evidence that during a visit by her to Tasmania her brother looked exhausted, which she attributed to the burden of assisting in the care of his elderly mother.
Assessment of the claim
There was no abnegation of parental responsibility to the applicant during childhood, nor in later life. The two neediest children, being the applicant and Jennifer, had received considerable financial support from the testatrix during her lifetime. In the applicant's case, through the maintenance and care of her son throughout most of his teenage years and in Jennifer's case by the payment for many years of insurance premiums.
In order for a discretion to arise entitling court intervention the applicant must satisfy the Court that, in all the circumstances, she has been left without adequate provision for her proper maintenance and support. I am not so satisfied. The bequest to the applicant, having a value of about $117,500, was sufficient to enable the applicant to undertake required home repairs and car repairs and to pay a significant amount off the mortgage so as to considerably reduce the required interest only payments. The applicant was aged 59 years at the date of her mother's death and had worked as a counsellor up until 2015. I have found that there is a chance, the likelihood of which I cannot assess, that the applicant may be able to return to work, at least on a part-time basis, notwithstanding her husband's psychiatric disorder. No expert evidence was presented indicating that the applicant's husband requires constant or intensive home care or supervision.
Even if I had found that the threshold test had been satisfied, I would not have exercised my discretion to intervene. The testatrix had no obligation to provide funds to pay off her children's homes in full or to enable the purchase of a home for Jennifer or to try to even up the children's financial positions. Testamentary freedom is not to be interfered with lightly. The testatrix, being a mother sharing equal affection for all of her children and having a modest estate, did not fall short of community standards by dividing most of her bounty equally between her four children so as to give each of them an equal, and within her means, a substantial financial lift.
Orders
I make the following orders:
(1)The application is dismissed.
(2)The application may be relisted on short notice for hearing as to the costs of the proceeding upon the request of any of the parties.
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