Dawson v Darrell Charles Jackman as Executor of the Estate of Herbert Arthur George Jackman (dec)
[2011] WASC 242
•13 SEPTEMBER 2011
DAWSON -v- DARRELL CHARLES JACKMAN as Executor of the Estate of HERBERT ARTHUR GEORGE JACKMAN (dec) [2011] WASC 242
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2011] WASC 242 | |
| Case No: | CIV:1099/2008 | 4 JULY 2011 | |
| Coram: | MASTER SANDERSON | 13/09/11 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Provision made for widow | ||
| B | |||
| PDF Version |
| Parties: | GLORIA ELSIE DAWSON DARRELL CHARLES JACKMAN as Executor of the Estate of HERBERT ARTHUR GEORGE JACKMAN (dec) DARRELL CHARLES JACKMAN |
Catchwords: | Inheritance Act Claim by de facto widow Dispute as to value of estate Turns on own facts |
Legislation: | Inheritance (Family and Dependants Provision) Act 1972 (WA), s 7 |
Case References: | Bondelmonte v Blanckensee (1989) WAR 305 Singer v Berghouse (1994) 181 CLR 201 Vigilo v Boston (2005) 221 CLR 191 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
DARRELL CHARLES JACKMAN as Executor of the Estate of HERBERT ARTHUR GEORGE JACKMAN (dec)
First Defendant
DARRELL CHARLES JACKMAN
Second Defendant
Catchwords:
Inheritance Act - Claim by de facto widow - Dispute as to value of estate - Turns on own facts
Legislation:
Inheritance (Family and Dependants Provision) Act 1972 (WA), s 7
(Page 2)
Result:
Provision made for widow
Category: B
Representation:
Counsel:
Plaintiff : Mr P N Bevilacqua
First Defendant : Mr I A Morrison
Second Defendant : Mr I A Morrison
Solicitors:
Plaintiff : Thompson Legal Pty Ltd
First Defendant : Bradley Bayly Legal
Second Defendant : Bradley Bayly Legal
Case(s) referred to in judgment(s):
Bondelmonte v Blanckensee (1989) WAR 305
Singer v Berghouse (1994) 181 CLR 201
Vigilo v Boston (2005) 221 CLR 191
(Page 3)
1 MASTER SANDERSON: By originating summons filed 1 February 2008, the plaintiff seeks orders for proper provision from the estate of Herbert Arthur George Jackman, deceased. She applies under s 7 of the Inheritance (Family and Dependants Provision) Act 1972 (WA) (the Act). The applicable law in relation to determining a claim is contained in s 6(1), (3) and (4) of the Act which provides as follows:
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, or the law relating to intestacy, or the combination of his will and that law, is not such as to make 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.
...
(3) The Court may attach such conditions to the order as it thinks fit, or may refuse to make an order in favour of any person on the ground that his character or conduct is such as in the opinion of the Court to disentitle him to the benefit of an order, or on any other ground which the Court thinks sufficient.
(4) In making any such order the Court may, if it thinks fit, order that the provision may consist of a lump sum or a periodical or other payment.
2 The relevant applicable law in relation to having standing to make a claim is contained in s 7(1)(a) which provides as follows:
7. Persons entitled to claim
(1) An application for provision out of the estate of any deceased person may be made under this Act by or on behalf of all or any of the following persons -
(a) a person who was married to, or living as the de facto partner of, the deceased person immediately before the death of the deceased person;
(Page 4)
- the time of the hearing, this issue had fallen away. The evidence makes it plain that the deceased and the plaintiff were in a de facto relationship and, accordingly, the plaintiff has standing to bring her action.
4 The applicable legal principles in a case such as this were set out by Malcolm CJ in Bondelmonte v Blanckensee (1989) WAR 305, 307. His Honour said:
On an application under this provision two issues arise. The first question is whether the disposition of the estate by the deceased was not such as to make adequate provision for the proper maintenance, support, education or advancement of life of the claimant. This is in effect a jurisdictional question which is to be determined at the date of the death of the deceased: Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494. If that question be answered in the affirmative, the court in exercising its discretion to make such provision as it thinks fit, must take into account the relevant facts as they exist at the time of making the order: Coates v National Trustees Executors and Agency Co Ltd (supra); Dun v Dun (1957) 99 CLR 325 at 331; Goodman v Windeyer (1980) 144 CLR 490.
5 This statement of principle has been confirmed by the High Court in a number of decisions, including Singer v Berghouse (1994) 181 CLR 201 and Vigilo v Boston (2005) 221 CLR 191.
6 Before dealing with the facts in this case, it is appropriate to detail the assets of the deceased's estate. As at the date of the death of the deceased, the only substantial asset of his estate was a 21-year lease to him of a fishing shack at Cheynes Beach in Albany. The lease, which was for recreation, camping and holiday accommodation, expired on 30 June 2009. After the expiry of the lease, there was considerable doubt as to what approach the City of Albany would adopt. On 19 October 2010, the council of the City of Albany approved new holiday accommodation leases for terms up to five years to a common expiry date of 31 December 2015. The lease is presently in the name of the first defendant. It was an issue in the case as to the value to be placed on the lease.
7 Evidence on this issue was given by Mr Ian Rae of Albany Valuation Services. He prepared a report dated 12 January 2011. That report appears as annexure A to the affidavit of the first defendant, sworn 18 April 2011. Mr Rae puts the value of the lease at $300,000.
8 The plaintiff was prepared to accept that as the valuation of the lease and, accordingly, the value of the deceased's estate. The second defendant challenged the valuation. Counsel for the second defendant was also
(Page 5)
- counsel for the first defendant. The same solicitors acted for both defendants. With the agreement of both counsel, I permitted both counsel for the plaintiff and counsel for the defendant to cross-examine Mr Rae.
9 In fact, Mr Rae was a very impressive witness. He was clearly very experienced in the Albany property market. He acknowledged that it was difficult to value leasehold interests because there was no obligation to register any transfer in the same way as registration of a freehold interest would take place. It was only by inquiring with the City of Albany that Mr Rae was able to ascertain when, and if, any transfers had taken place. In fact, there were very few transfers and those that had taken place had taken place within families. Accordingly, there was no 'comparable sales' upon which to base a market valuation.
10 Faced with that difficulty, Mr Rae examined the property and its improvements. He considered the terms of the lease, in particular the fact that there was no option for renewal and, in fact, the lease specifically stated that it would not be renewed. He then looked at leasehold interests at Peaceful Bay, which is in the Shire of Denmark. He compared the transfer of leases in this area and used the information he obtained as a basis for the valuation of the Cheynes Beach property.
11 There are significant differences between the Peaceful Bay leases and the Cheynes Beach leases. The Peaceful Bay leases are for a term of 21 years from 1 July 2010. There is no option of renewal available to the lessee, but if the lessor elects to grant a further lease, the lessee at the time has the first right of refusal. In both cases, utility services of power and telephone are available, but water supply is by rainwater tank. Sewerage disposal is by means of site septic tank installation. In this sense, the two areas are entirely comparable.
12 In the end, Mr Rae's opinion was the property would have a value of $300,000. His evidence was that figure covered the remaining term of the lease and the (to use his word) 'punt' that a fresh lease would be provided at the expiry of the term. This assessment requires further consideration.
13 It is clear when the City of Albany was considering whether or not to grant a further lease to the Cheynes Beach properties, they looked at various development proposals. That is made clear by the minutes of the council meeting held 19 October 2010 (exhibit 2). The council considered three possible options. Option 1 was the issue of a fresh lease to current tenants. Option 2 was to require the current lessees to remove improvements from each of the lots with the lots then to be advertised,
(Page 6)
- inviting expressions of interest to construct holiday accommodation. The third option was to enter a new lease with tenants without allowing for the removal of improvements.
14 Option 1 was the recommended option and that was what was adopted. However, the council made it plain that they wished to consider in conjunction with LandCorp, the future of the Cheynes Beach district. It was for that reason the lease was only for five years. Nothing in the council minutes indicates what might be the eventual outcome of council's deliberations or consultations with LandCorp. For instance, as was put to Mr Rae in cross-examination, it is possible council could resolve at the end of the present five-year term freehold interest in each of the lots would be offered for sale to the general public.
15 Mr Rae agreed that was a possibility. However, he thought it was unlikely. In his view, the most likely scenario was a further long-term lease. His evidence was to the effect any purchaser of the leasehold at present would factor in the possibility of a further long-term lease at the expiry of the present term. His assessment was as this was the likely outcome of council's deliberation, a prospective purchaser would be prepared to pay for the chance.
16 As I have said, Mr Rae was a very impressive witness. His report is very thorough; his evidence was clear and unshaken in cross-examination. I accept it unreservedly. I am satisfied, for the purpose of this application, the value of the estate should be put at $300,000.
17 There was no evidence from Mr Rae, or anyone else, as to the value of the Cheynes Beach property at the date of death of the deceased.
18 The Will of the deceased made no provision for the plaintiff. It was the defendants' position this was right and proper and, in the circumstances of the case, there was no requirement on the deceased to provide for the plaintiff. In other words, the defendants said the jurisdictional question should not be answered in favour of the plaintiff.
19 The defendants took issue with some aspects of the plaintiff's evidence. However, the following facts are, I think, uncontroversial.
20 The plaintiff and the deceased were in a relationship for approximately 10 years prior to the death of the deceased on 5 September 2006. Of those 10 years, they resided together for approximately nine and a half years. As at the date the relationship commenced, the plaintiff owned a unit in Dianella. She sold that unit in or around 1996. After
(Page 7)
- discharging the mortgage over the unit, and paying selling fees, she was left with approximately $160,000. Of that amount, she gave $20,000 to each of her three children. Thus, she brought into the relationship with the deceased an amount of $100,000.
21 That amount was spent on travel undertaken by the couple, in the provision of some goods for the Cheynes Beach property and on general living expenses. The funds ran out in 2003. Thereafter, the plaintiff and the deceased relied on their respective pensions.
22 It is clear the plaintiff and the deceased never intermingled their finances. Clearly, from time to time each made a contribution to joint expenses, but they did not have joint bank accounts and, in fact, the plaintiff never had any clear idea of the deceased's financial position. She did not even know what he received by way of a pension. She suspected he made a considerable amount of money from his fishing activities and he had considerable cash assets. But she knew none of the details.
23 At the time the parties commenced living together, the deceased had a residential property in Gledhow. That was in addition to the Cheynes Beach property. In 2006, the Gledhow property was sold and a property at 62 Grove Street West, Little Grove was purchased. The couple never lived in the Little Grove property. That property did not form part of the estate of the deceased.
24 It is not possible for me to say what the value of the deceased's estate was as at the date of his death. All I can conclude is the lease had some value. I have assumed it was nominal.
25 I am satisfied the deceased did not make adequate provision for the plaintiff in his Will. He left her nothing. They clearly had a loving and caring relationship of some duration. It is clear as the deceased's health failed the plaintiff cared for him in a way that was very much to his advantage. She had contributed what capital she had to the relationship. In my view, a wise and just testator would have provided for the plaintiff in his Will.
26 There is a logical difficulty about concluding the deceased did not make adequate provision for the plaintiff when I have assessed the value of his estate at nominal. What is the point - it may be asked - of making provision out of an estate, when such provision will not assist a person in the plaintiff's position? While I appreciate the strength of that argument, there was still an asset in the estate. It may have been of nominal value, but it was still something that could benefit the plaintiff. In this case, I am
(Page 8)
- satisfied the fact the estate was of nominal value is not a sufficient basis for concluding the deceased should not have provided for the plaintiff in his Will.
27 Having determined the jurisdictional question should be answered in the plaintiff's favour, it is a question now of what, if any, provision should be made for her. Her only income is a war widow's pension. That is approximately $850 per fortnight. She rents a house in Morley with her children and contributes $300 per fortnight to rent. She contributes an additional $200 per fortnight for food and spends approximately $250 per month on medications. She contributes one-third of the utility charges. Although these figures indicate she is able to manage on a tight budget, she has no capital on which to rely and no prospects the position will improve.
28 It was the defendants' position the plaintiff was, in all the circumstances, adequately provided for. It was submitted to make any order in favour of the plaintiff would do nothing more than benefit her beneficiaries. She is 82 years of age and is not without health difficulties. It was submitted as the plaintiff was managing at present, no provision from the estate was necessary.
29 In my view, the plaintiff has made out a good claim. It is true there is nothing in the evidence to indicate what she would do with any award made to her. But the fact is she is elderly and without any capital asset. In the future, her health care needs may increase and she may need to provide for some form of care. In my view, it is not unreasonable for a person of the plaintiff's age and circumstance to have some asset to fall back on, some asset to provide her with security into the future.
30 In my view, the proper course is to order the leasehold in the Cheynes Beach property be transferred to the plaintiff. Any transfer of the leasehold interest is subject to the approval of the City of Albany and the relevant Minister. Moreover, the lease in its present form allows the City of Albany to withhold its consent to a transfer even if that consent is unreasonable. That will mean the order will need to be crafted in such a fashion as to be conditional on the necessary consents being obtained. Further consideration would need to be given to what orders might be made if these consents were not forthcoming. But, for the present, I am satisfied a conditional order ought be made which would, if carried into effect, see the lease transferred to the plaintiff. What she then does with the lease is a matter for her.
(Page 9)
31 In reaching this conclusion, I did consider the possibility of ordering the lease be sold and the proceeds of the sale be paid to the plaintiff. In my view, to adopt that course would be to limit the plaintiff's flexibility and place too much responsibility on the executor, the first defendant. Clearly, there was no scope for ordering a lump sum payment from the estate. That appeared to be the order the plaintiff was seeking when this matter first arose. But as at the date of the hearing, counsel made it plain he was not pursuing that relief. Accordingly, I am satisfied an order for transfer of the property - conditional on the necessary consents - is appropriate.
32 Solicitors for the plaintiff ought bring in a minute of orders which reflects this decision. The parties to provide written submissions as to costs within seven days.
1
5
1