Downing v Downing
[2003] VSC 28
•24 February 2003
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6245 of 2001
IN THE MATTER of Part IV of the Administration and Probate Act 1958
and
IN THE MATTER of the Will and Estate of Allan Henry Downing, deceased
| JOAN MARY DOWNING | Plaintiff |
| v | |
| BRUCE GRAHAM DOWNING AND DAVID ERNEST PIGGOTT (who are sued as the Executors of the Will of the above named deceased) | Defendants |
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JUDGE: | OSBORN J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 3-5 FEBRUARY 2003 | |
DATE OF JUDGMENT: | 24 FEBRUARY 2003 | |
CASE MAY BE CITED AS: | DOWNING v DOWNING & ANOR | |
MEDIUM NEUTRAL CITATION: | [2003] VSC 28 | |
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Testator's Family Maintenance application – Widow received life interest in matrimonial home in will – Appropriateness of further capital bequest – Administration and Probate Act 1958.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr Pritchard | Lucas Neale Lawyers |
| For the Defendants | Ms Sparke | McNab McNab & Starke |
HIS HONOUR:
This is a widow's application under Part IV of the Administration and Probate Act 1958. The deceased married the plaintiff on 20 March 1970. At that time he was aged 51 and she 47. Thereafter they enjoyed some 30 years happy and harmonious marriage up until his death on 20 April 2000.
At the time of their marriage the deceased had one son by a prior marriage and the plaintiff had two sons and a daughter by a prior marriage. Each of them owned their own family homes but because of the expanded family a new home was purchased at 194 The Esplanade, Brighton. Both the plaintiff and the deceased disposed of the houses they had previously owned but at the insistence of the deceased the plaintiff made no direct financial contribution to the purchase of the new home. The deceased became registered as the proprietor of the Esplanade property on 22 May 1970.
In due course after their children had left home the deceased and plaintiff remodelled and sub-divided 194 The Esplanade to create two separate dwellings with one on each of the two levels of the two storey house. It was their intention to continue living on the upper level where they had a view of the sea and a lift was installed to ensure that the upper dwelling would be convenient even if the deceased became physically infirm.
The deceased's health deteriorated by the early 1990s and the deceased suffered from increasing physical infirmity in the last years of his life. The plaintiff cared for him by assisting with his dietary needs, medication (which included ongoing insulin injections), urinary and associated sleep disturbance problems. She also assisted the deceased with clerical matters as his eyesight failed, and he became unable to write.
At the time of her marriage to the deceased the plaintiff had independent means. She was employed as a fabric designer and owned her own home. Following the marriage she ceased work by agreement with the deceased whose attitude was that it was proper for him to support her. Thereafter he did in fact support her very comfortably throughout their long marriage. Throughout the marriage the property at 194 The Esplanade was treated as their joint home and the plaintiff managed and cared for the home and garden. Thus, the plaintiff had substantial input into the remodelling of the home at the time of the creation of two separate dwellings. During his life the deceased accustomed the plaintiff to "a life of comfort free from pecuniary uncertainty and anxiety". She wanted for nothing and had only to ask and it would be given. She was able to withdraw money at her own discretion.
By his will the deceased sought to achieve five principal objects:
(a)to provide income for the plaintiff by directing the trustees of the A.H. Downing Family Trust ("the Family Trust") to pay all the trust income to the plaintiff during her lifetime;
(b)to provide continuing accommodation for the plaintiff in the matrimonial home or accommodation of an equivalent standard by giving her a life interest in 194A The Esplanade;
(c)to provide the plaintiff with a life interest in certain household furniture and paintings and for the balance of the household chattels to pass to the plaintiff and the first named defendant as they should decide;
(d)to provide income for the plaintiff by providing that his residuary estate (including 194B The Esplanade) be held on trust to pay the income therefrom to the plaintiff for her lifetime; and
(e)to pass the balance of the residuary estate upon the plaintiff's death to his son Bruce (the first named defendant).
The assets of the estate are:
(a) 194A The Esplanade, valued at $1.3m.;
(b) 194B The Esplanade, valued at $750,000;
(c) Family Trust loan account $667,440.
Having regard to the matters set out in s.91(4) of the Act there is not, and could not be, any dispute that the plaintiff is entitled to provision from the deceased's estate.
The parties further accept that it was the deceased's intent that she be provided for in a manner which enabled her to continue to enjoy the same standard of living as that which she enjoyed prior to the deceased's death. Indeed they accept that such a provision would be a proper provision in the present case. They adopt in effect the position expressed in the judgment of Salmond J in In re Allen (deceased); Allen v Manchester[1] approved by the Court of Appeal of New Zealand in In re Crewe (deceased); Crewe v Corbett[2] and in turn cited with approval by Kitto J in Worladge v Doddridge[3]:
"It may probably be said with truth that the proper maintenance which a testator owes to his widow in cases where there are no competing moral claims of other dependents is such maintenance as will enable her, taken in conjunction with her own means, to live with comfort and without pecuniary anxiety in such state of life as she was accustomed to in her husband's lifetime, or would have been so accustomed to if her husband had then done his duty to her."
[1][1922] NZLR 218
[2][1956] NZLR 315
[3](1957) 97 CLR 1 at 21
The dispute between the parties in the present case is two-fold:
(a)whether the deceased has in fact made appropriate provision for the plaintiff; and
(b) if not, what further provision should be made?
The first question falls to be decided in circumstances where there is no dispute that the plaintiff has in fact enjoyed and maintained a continuing standard of living since the deceased's death, which reflects that which she enjoyed prior to his death. The significant components of her current financial position can be summarised as follows:
Assets:
Moneys on deposit and value of blue chip shares
approximately $109,000
Loan account with the Family Trust $198,796
Income:
Veteran Affairs pension $11,232 per annum
Rental from 194B The Esplanade $25,389 per annum
Income from the Family Trust $36,000 per annum.
It can be seen that the plaintiff is currently in receipt of income which enables her to enjoy a comfortable lifestyle and to maintain both 194A and 194B The Esplanade as respectively her residence and a source of ongoing income.
Nevertheless it is contended that the provision made for the plaintiff is inadequate because it does not assure the continuation of the present situation and/or it does not provide her with such financial independence and autonomy as is proper in all the circumstances.
The threshold question which arises under s.91(3) of the Act is whether the Court is of the opinion that the distribution of the estate of the deceased effected by his will does not make adequate provision for the proper maintenance and support of the plaintiff. In Singer v Berghouse[4] the High Court said of the equivalent New South Wales provisions:
"Although the precise nature of the jurisdictional question has been the subject of some debate, the correct view is that the question is strictly one of fact, notwithstanding that it involves the exercise of value judgments. The evaluative character of the decision stems from the fact that the court must determine whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life."[5]
[4](1994) 181 CLR 201
[5]per Mason CJ, Deane and McHugh JJ at p.210
In determining the threshold question the Court must have regard to the considerations set out in s.91(4) of the Act. In the present case the most significant factual matters relevant to those considerations are, in my opinion, the length of harmonious marriage between the plaintiff and the deceased; the contribution of the plaintiff to that marriage including the merger of her own way of life with that of the deceased and her special care for him in his latter years; the standard of living enjoyed by the plaintiff during the marriage; the expectation (accepted by the defendants as legitimate) that the plaintiff would continue to enjoy a similar standard of living during her own lifetime; the plaintiff's age and her average life expectancy of a further 9.09 years; the plaintiff's financial position as set out above; and the extent of the estate.
The notions of maintenance and support comprehend more than a bare minimum. The notions of what is "adequate" for the "proper" maintenance and support of a person are relative taking into account all the circumstances of the case.[6]
[6]Bosch v Perpetual Trustees Company Ltd [1938] AC 463 at 476
Ms Sparke submitted that in a case such as the present an adequate provision for the proper support and maintenance of the plaintiff might be expected to provide firstly for the plaintiff's appropriate accommodation, secondly for her appropriate income and thirdly for a nest egg, that is a capital sum giving her security and independence appropriate in all her circumstances. In Luciano v Rosenblum[7] Powell J said:
"It seems to me, that as a broad general rule, and in the absence of special circumstances, the duty of a testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secure in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies."[8]
I shall analyse the plaintiff's position by reference to each of these three categories of maintenance and support.
[7](1985) 2 NSWLR 65
[8]A proposition articulated somewhat more fully by Powell J in the unreported decision of Elliot v Elliot, 18 May 1984, quoted by Hedigan J in King v White (1992) 2 VR 417 at 425.
In the present case the will provides that the executors should hold the principal residence on trust for the plaintiff "for life or until remarriage". Such provision is subject to clause 6C which provides:
"My executors may in their absolute discretion sell or raise money on the security of all or part of the residence or let the same and may do all or any of the following:
(a)use all or part of the proceeds to purchase another residence to which the provision (sic) of this trust apply as if it were the original residence;
(b)invest all or part of the proceeds and pay all or part of the income or profit to Joan Mary Downing;
(c)to use all or part of the proceeds to provide accommodation for Joan Mary Downing;
(d)to invest all or part of the proceeds and employ all or part of the income or profit or both to provide accommodation for Joan Mary Downing;
(e)it is my wish that the executors use their powers to ensure that Joan Mary Downing is provided with appropriate accommodation out of the assets which I have set aside for that purpose;
(f)on the death or remarriage of Joan Mary Downing the residence or balance of funds remaining from the sale of my residence shall form part of my residuary estate."
These provisions might be thought to suffer from two material defects. Firstly, having regard to the length of the plaintiff's marriage to the deceased and the other circumstances of the case, the limitation of the life interest by reference to the alternative of remarriage is inappropriate and does not reflect current community attitudes. In White v Barron[9] Mason J said:
"With Wilson J and the majority in the Court of Appeal, I would reject the view expressed by Kitto J in Worladge v Doddridge that in most cases 'the maintenance order for a widow should be confined to continuance of widowhood.' Community attitudes have so altered that it is now generally accepted that a widow should be maintained for life, rather than during widowhood."
[9](1981) 44 CLR 431 at 444
In my opinion, community attitudes have further firmed in the subsequent 22 years since the decision of White v Barron and it is appropriate to have regard to them.[10]
[10]cf Grey v Harrison (1997) 2 VR 359 per Callaway JA at 365
A like conclusion applies to the items of household furniture and paintings which are also expressed to be the subject of a life interest terminable on death or remarriage.
In the present case Ms Sparke indicated that the defendants did not oppose the deletion from the will of all references to the termination of interests upon remarriage. In my view this was a proper concession.
The second aspect of the provision for accommodation made by the will which might be regarded as inadequate, is the ambit of the discretion accorded to the trustees with respect to the sale of the principal residence and the application of the proceeds thereafter. It was to this aspect that Mr Pritchard directed much criticism on behalf of the plaintiff. While it is clear from the precatory statement contained in clause 6C(e) that the deceased intended that the plaintiff be provided with ongoing "appropriate" accommodation, the extent of the discretions given with respect to changes in the accommodation arrangements is such that:
(a)it cannot be said that the whole of the value of 194A is effectively set aside for the purpose of providing accommodation to the plaintiff during her lifetime; and
(b)judgment as to alternative arrangements rests ultimately in the absolute discretion of the trustees.
In my view this situation taken in conjunction with the further matters to which I will now turn is unsatisfactory. I have reached this conclusion despite the relevant provisions of the Settled Land Act to which I was referred by Ms Sparke.
I turn to the question of income. By clause 5 of the will the deceased stated:
"I direct the trustees for the time being of the A.H. Downing Family Trust to pay all the trust income to my said wife Joan Mary Downing during her lifetime."
It can be seen that the deceased clearly intended that the Family Trust would continue to provide an ongoing income stream to the plaintiff. It is also clear, however, that as a matter of law the direction contained in clause 5 is not binding upon the trustees of the Family Trust. The application of income from the trust fund is subject to the absolute discretion of the trustees pursuant to clause 9.03 of the trust deed. Moreover, the plaintiff is one only of a group of nominated beneficiaries and the position with respect to potential competing claims cannot be regarded as fixed in law despite the clear intentions of the deceased, and of Bruce Downing as expressed in his evidence before me.
The annual income which the plaintiff has received and continues to receive from the trust in accordance with the direction of the deceased under clause 5 of the will is a significant portion of the income received by her as a whole.
Apart from the question of the adequacy of the direction contained in clause 5 of the will, the evidence discloses a further concern. The principal asset of the trust is comprised by shares in Latuadungavel Pty Ltd ("Latuadungavel"), a holding company which is jointly controlled by the Family Trust and another trust associated with the family of the deceased's brother. Each of the family trusts effectively controls a 50% interest in a factory building at Clayton which is leased to a paint manufacturer for use in conjunction with an adjoining plant operated by it. The paint manufacturer has declined to enter into a long term lease arrangement. The current lease is for two years and attempts to sell the factory with the benefit of the lease have failed. This leads to two potential problems from the plaintiff's point of view. Firstly, if the current occupancy were to cease, it is quite possible there may be considerable delay in re-letting or selling the property. If this were to occur the income stream which she currently receives from the Family Trust of $36,000 per annum would cease in the interim. Secondly, it is apparent that there is doubt that the true value of the factory is that shown in the relevant books. The valuation in the books was made on the basis of a secure lease. The evidence for the defendants demonstrates that the true value of the factory may be closer to $900,000 or $1,000,000 rather than the $1.3m. shown in the books of Latuadungavel. I find as facts first that there is a real risk that the tenant may not renew its lease during the course of the plaintiff's lifetime and second that if this occurs the probability is that the plaintiff would suffer a significant and costly diminution of income from the trust.
It follows that the direction contained in clause 5 of the will does not assure the plaintiff of continuing income from the trust:
(a) because it does not have this effect in law; and
(b) because the commercial source of such funds cannot be regarded as secure.
The will makes further provision for payment of income to the plaintiff by clause 6D:
"My executors shall hold the residuary estate on trust to pay the income therefrom to the said Joan Mary Downing for her lifetime."
The effect of this provision is that:
(a)the income derived from 194B is paid to the plaintiff which (subject to expenses) is secure;
(b)if 194A were resold and a further capital sum generated (whether diminished by the purchase of an alternative property or not) any income from such sum would be paid to the plaintiff for her lifetime;
(c)if the estate were to call in any part of its loan account with the Family Trust the income generated from such moneys would be payable to the plaintiff.
The terms of clause 6D are, however, to be read in conjunction with clause 6E which commences:
"On the death or remarriage of Joan Mary Downing my executors shall hold my estate:
(i)to pay the balance of my residuary estate to my son Bruce Graham Downing;"
The effect of this provision is that the plaintiff's right to income under the will terminates upon remarriage. For like reasons to those which I have stated with respect to the plaintiff's interest in the principal residence, I am of the opinion this provision does not reflect current community attitudes and I again record that the defendants did not contend that it was appropriate.
Taking the provisions of clauses 5 and 6 of the will together I am of the opinion that they do not assure the plaintiff of adequate income for her proper maintenance and support. In effect, they facilitate the payment of such income to the plaintiff, (and the plaintiff has in fact received such income to date), but they do not assure the continuation of such payment to an extent commensurate with the resources of the deceased and the obligation upon him.
The third suggested component of an appropriate provision is that of a nest egg. The plaintiff currently has a nest egg of some $109,000 comprising cash on deposit and moneys invested in blue chip shares. She also has standing to her credit a loan account with the Family Trust of $198,296. She has not called upon such loan account because she believes the Family Trust loan accounts were set up not only for her benefit but also for other parties[11]. If regard is had to the balance sheet of the trust as at 30 June 2001, there might be thought to be some basis for this concern albeit that such concern was not expressed by way of a strict analysis. In particular if the plaintiff were to call on her loan account and it was paid out in full, the remaining liquid assets of the trust would not be sufficient to meet a call made upon the loan accounts of Robert Hamilton Downing, Andrew Charles Downing and Jeanette Mary Downing. A call upon these loan accounts would require the value of the shares held by the trust in the holding company Latuadungavel to be realised. It appears that it would then be necessary for the holding company to be wound up and this in turn would lead to a relatively low return to the trust because of taxation considerations as explained by Mr Piggott. It would also lead to disastrous consequences for those members of the broader family having the beneficial interest in the other half of Latuadungavel. Conversely, if the other three beneficiaries of the Family Trust referred to above, were to call on their loan accounts prior to the plaintiff, the capacity of the trust to meet any call by the plaintiff on her loan account would be reduced. For these reasons and because of the uncertainty which attaches to the ongoing value of the interest in the factory forming the core asset of the trust, I am not satisfied the plaintiff's loan account with the trust constitutes a secure and readily realisable "nest egg". In particular, any exercise of her capacity to call upon it has the potential to result in adverse consequences to the continuing flow of income to her from the Family Trust, and to result in adverse consequences to other members of the family having an interest in the trust property.
[11](tp.21)
Taking these conclusions together, it is my opinion that the deceased did not make an adequate provision for the proper maintenance and support of the plaintiff by way of the combination of provisions adopted in his will.
There are two subsidiary arguments with respect to this aspect of the matter to which I should specifically refer. Firstly, it was put on behalf of the first named defendant that the plaintiff had agreed to the provisions of the will prior to the death of the testator. I am satisfied on the evidence that the broad scheme of the will was the subject of an understanding namely that the plaintiff would be cared for during her life and that the residue of the estate would pass to the first named defendant. I am not satisfied, however, that the precise terms of the will were the matter of agreement. Furthermore, it is clear that even where agreement is reached between the testator and a widow prior to the testator's death the agreement is not conclusive of the question of the adequacy of provision at the date of death. The fact of any agreement is a matter that may be taken into account in considering the adequacy of the provision made under a will but it is not conclusive of such question: Singer v Berghouse[12]; Gigliotti v Gigliotti[13].
[12](1994) 181 CLR 201 at 207
[13][2002] VSC 279
The second subsidiary argument relates to the position which would have resulted if the deceased had died intestate. If this had occurred the plaintiff would have received pursuant to the provisions of s.51(2) of the Act:
(a)all the deceased's personal chattels (a number of which are made the subject of a life interest only pursuant to the will);
(b)$100,000; and
(c)one third of the balance of the estate, being $897,441;
resulting in a total cash sum of $997,441.
Reference to such a comparison has been made in cases such as Re Wren[14], and Marshall v Spillane and Anor.[15] In my opinion this comparison confirms the view that the provision made under the will is not adequate having regard to the uncertainties which I have identified.
[14][1970] VR 449 at 451 per Smith J
[15][2001] VSC 371 at [16] per Byrne J
If the threshold issue is resolved in favour of the plaintiff the second stage of the inquiry is directed to what provision should be made for the proper maintenance and support of the plaintiff having regard to the circumstances enumerated in s.91(4) of the Act; which circumstances can be understood to give rise to a "moral duty" in terms of the chain of authority referred to by the Court of Appeal in Grey v Harrison[16].
[16](1997) 2 VR 359
The plaintiff contends that proper provision would be made by the devise to her of the principal residence at 194A The Esplanade, Brighton; in lieu of the provisions contained in clauses 6A(i) and 6C of the Will.
The defendants contend that the plaintiff's position should be addressed by a combination of undertakings and orders which in effect tighten up but do not fundamentally alter the structure of the provisions contained in the deceased's will. The undertakings would require the first named defendant to take steps to ensure the continuation of the provision of income by the Family Trust to the plaintiff. I do not accept that I should proceed on the basis of such undertakings:
(a) the jurisdiction of this Court is with respect to the terms of the will;
(b)the alteration of the terms of the existing trust to benefit an existing trustee (the plaintiff) is in my view highly problematic; and
(c)the relevant beneficiaries are not all before the Court.
The defendants next contend that the will could be varied:
(a)to remove the words "or remarriage" wherever they appear as a limitation within the will;
(b)to modify the terms of clause 6C of the will to better entrench the plaintiff's rights with respect to alternative accommodation.
The defendants further contend that the interests of the plaintiff could and should be further protected by the appointment of an independent trustee.
It is not for the Court to simply "write a new will" by reference to abstract considerations of fairness.[17] Modification of the will must proceed on the basis that its terms should not be interfered with unless change is justified by reference to the considerations set out in the statute.
[17]Worladge v Doddridge (1957) 97 CLR 1 at 20
It is also necessary for the Court to consider competing claims (if any). In the present case the residuary beneficiary is the deceased's only son. He is a medical practitioner with a relatively substantial income, and some significant assets. The estate is of a total value of some $2.7m. and has the capacity to enable substantial provision to be made for the plaintiff while still providing for even more generous provision to the residuary beneficiary.
The positions put by the parties present a fundamental division of views as to whether the will should provide an interest greater than a life interest in any of the major capital assets of the estate. I have come to the conclusion that some such provision should be made although the resolution of precisely what provision is not without difficulty. The following general principles can be discerned in the relevant authorities:
1.The provision of a capital asset to the plaintiff may be appropriate as part of a package of measures intended to provide accommodation, income and a nest egg (Luciano v Rosenblum[18]).
2.The whole circumstances of each case must necessarily be addressed and may lead to different conclusions in different cases despite the presence of particular factors common to different cases. (Bosch v Perpetual Trustee Company Pty Ltd[19]; Re Duncan[20]).
3.Concern as to the capacity of a plaintiff to meet the vicissitudes and uncertainties of life may favour the provision of a capital asset to the plaintiff (King v White[21]).
4.Concern as to the capacity of the plaintiff to maintain her or himself independently and autonomously may also bear upon the notion of what is a proper provision (Richard v AXA[22]).
5.The fact that the provision of a capital asset to a plaintiff may incidentally enable a plaintiff in due course to pass that asset on to children or family contrary to the deceased's wishes is not determinative of the propriety of such a provision (Worladge v Doddridge[23]).
[18](1985) 2 NSW;R 65 at 69
[19][1938] AC 463 at 477
[20][1939] VLR 355
[21](1992) 2 VR 417
[22][2000] VSC 341
[23](1957) 97 CLR 1 at 19
In White v Barron[24] Mason J said:
"Nor do I subscribe to the proposition that an order in favour of a widow should necessarily be confined to an income provision. Circumstances are infinite in their variety and orders must be moulded to the circumstances of a particular case in order to ensure that the provision which is made is adequate for the proper maintenance of the widow, where that is possible. A capital provision should only be awarded to a widow when it appears that this is the fairest means of securing her proper maintenance. However, the provision of a large capital sum for a widow who is not young, may in the event of her early death, result in a substantial benefit to her relatives, contrary to the wishes of the testator, when a benefit of another kind would have afforded an adequate safeguard to her personally, without leaving her in a position in which she could benefit her relatives from the proceeds of the legacy."
[24](1980) 144 CLR 431 at 444
In the present case I am satisfied that an additional provision of capital to the widow is the fairest means of securing her proper maintenance.
It is possible of course that such provision may be passed on to one or more of the plaintiff's own children. Indeed the plaintiff acknowledged as much in the witness box. Nevertheless the correct principle was stated by Kitto J in Worladge v Doddridge as follows:
"The fact that a payment may produce an incidental effect going beyond maintenance and support cannot put it beyond power, I think, if its substantial character is that of provision for maintenance and support."[25]
[25]at p.19
I also note that the evidence as to the antipathy of the deceased to the plaintiff's children was mixed. In particular it was conceded by the defendants that the deceased had become friendly towards one of the plaintiff's sons and indeed at one stage provided for a legacy of $100,000 to him pursuant to a prior will.
In King v White Hedigan J observed:
"Whilst it is true that there have been a number of judicial statements that supported disinclination to award property or capital sums to older widows, such a proposition is necessarily circumscribed by the particular circumstances in each case: White v Barron (1980) 144 CLR 431 at pp.444-5. The awarding of assets, or some capital provision, may, even in the case of an elderly widow, be the just method of providing proper maintenance and support."[26]
[26]at p.423
Hedigan J went on to refer to a series of cases illustrating this proposition including the decision of Rath J in Shah v Perpetual Trustee Company[27]:
"Whilst it is inevitable that cases such as these turn very much on their facts, it is instructive to note that [sic] the circumstances in Shah, the testator had left the widow plaintiff a legacy of $60,000, and her daughter a legacy of $30,000, and left the residue to a charity. The plaintiff, in addition to the benefits conferred on her by the will, wanted the former matrimonial home, arguing that the provision of an equitable life interest (as here) was insufficient. His Honour took the view that the bare right of occupancy for life did not give reasonable protection against inflation, or against imponderable possibilities such as illness. Having considered the possibility of an equitable life estate, his Honour rejected it and ordered that the widow have the former matrimonial home in fee simple, primarily because the estate was of modest size, the house had been for a long period the matrimonial home, and the plaintiff had a strong moral claim to regard it as her own."
[27](1981) 7 Fam LR 97
Hedigan J also cited a series of New South Wales decisions including that of Young J in Caldwell v Ang [28] in which Young J stated:
"The view that I have taken in many of these cases (is) that with respect to a spouse in his or her sixties or seventies or later, a life estate is not likely to be adequate provision because of the changing circumstances of the spouse as old age advances. In addition to such problems, there are usually other unavoidable problems connected with who should bear expenses of a capital nature of the estate whilst the surviving spouse is enjoying its fruits."
[28](unreported, Supreme Court of New South Wales, 22 March 1991)
In King v White itself his Honour ultimately concluded:
"Like Rath J in Shah, and Young J in Caldwell, I have formed the opinion that the provision of ownership in fee simple of the home is necessary to give the plaintiff that degree of protection which will provide an adequate bulwark against inflation, future vicissitudes and uncertainties. Moreover, since the plaintiff will have to maintain the house, I think it appropriate that some provision from residue to enable her to do so that [sic] should be made. In addition, I believe that a small amount of capital from residue should be provided to the plaintiff to recoup her for past expenditure on the house, to enable some immediate expenditure to be made and to add modestly to her small cash reserve to cover other needs not fully explored."[29]
[29]p.427
In Richard v AXA Trustees Ltd[30] Eames J held further that in appropriate circumstances the Court should have regard to the independence and autonomy which are given to a plaintiff in providing for her future capacity to meet with the uncertainties and challenges of life. In my opinion a significant degree of financial autonomy is a necessary adjunct to the standard of living with which I am concerned in this case.
[30][2000] VSC 341
Having regard to the circumstances of the present case, including particularly, the standard of living the plaintiff enjoyed prior to the death of the deceased; the uncertainties which I have found attach to the continuing provision of income from the Family Trust; uncertainty as to the extent of the nest egg which the plaintiff's loan account with the trust may provide; the appropriateness of providing security against the potential vicissitudes of life and the appropriateness of providing a package which ensures that the plaintiff can continue to live in a financially independent and autonomous manner; I have formed the opinion that the provision of part of the capital assets of the estate to the plaintiff is appropriate.
I am not, however, satisfied that the plaintiff should obtain ownership of the principal residence because of its relatively high capital value and the absence of a need sufficient to justify such a departure from the scheme of the deceased's will. This would be so even if I were minded to impose a condition as counsel for the plaintiff invited me, requiring the plaintiff to assign her interest in the Family Trust loan account to the estate.
I have formed the view that ownership of 194B The Esplanade which has a value of $750,000 is sufficient together with the deletion of certain limitations in the will, to provide for the proper maintenance and support of the plaintiff when added to the life interest in 194A provided for in the will and having regard to the plaintiff's overall financial position. For the reasons I have already stated it is appropriate to delete from the will the references to remarriage with respect to the relevant life interests.
Subject to anything counsel may submit the orders will be:
1.A declaration that the distribution of the estate of the deceased Alan Henry Downing was not such as to make adequate provision for the proper maintenance and support of the plaintiff Joan Mary Downing.
2.That provision be made for the plaintiff out of the estate of the deceased by varying the will as follows:
(a)to provide that the deceased devise the property known as 194B The Esplanade, Brighton being the land in Certificate of Title volume 10150 folio 132 to the plaintiff absolutely;
(b)by deleting the words "or until remarriage" from paragraph 6A(i);
(c)by deleting the words "or remarriage" from paragraphs 6A(ii) and 6E.
I will hear the parties on the question of costs.
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