Grant v Scott

[1988] TASSC 109

Serial No B41/1988

List "B"

COURT:  SUPREME COURT OF TASMANIA

CITATION:              Grant v Scott [1988] TASSC 109; B41/1988

PARTIES:IN RE THE ESTATE OF HAROLD WILLIAM GRANT (DECEASED)
GRANT

v
  SCOTT

FILE NO/S:  M135/1988
DELIVERED ON:  10 November 1988
JUDGMENT OF:  Wright J

Judgment Number:  B41/1988
Number of paragraphs:  14

Serial No B41/1988

List "B"

File No M135/1988

IN RE THE ESTATE OF HAROLD WILLIAM GRANT (DECEASED)
GRANT v SCOTT & ANOR

REASONS FOR JUDGMENT  WRIGHT J

10 November 1988

1. Iris Coral Grant, aged 85 years, the widow of Harold William Grant, applies for provision out of her late husband's estate pursuant to the provisions of the Testators' Family Maintenance Act 1912. Mr and Mrs Grant were married in 1930. They remained happily married for 57½ years until Mr Grant died on 28 February 1988. There were no children of the marriage. Mrs Grant remained in employment for the first 15 years after her marriage and the funds which she earned were pooled with her husband's income for joint family purposes. She ceased work in 1945 at her husband's request. When he became ill in 1980 she assisted in nursing him. She has no substantial assets and no income of her own other than an age pension which is currently $120.05 per week.

1. By his last will and testament dated the 13 May 1986 the deceased gave and devised to the survivor or survivors of Edna Louise Scott and Kevin John Scott free of all duties, death, estate succession or otherwise, State or Federal, all that freehold property situate and known as 152 Bally Park Road, Dodges Ferry in Tasmania, charged however with the specific condition that "my wife Iris Coral Grant shall during her lifetime be permitted the use of the said property at such times as she so desires". The testator also gave and devised his property at 10 Milton Crescent, West Moonah in Tasmania to trustees upon trust to permit his said wife to reside therein during her lifetime, she keeping the property in good repair and insured in the name of the trustees, with the remainder to the survivor or survivors of the said Edna Louise Scott and Kevin John Scott. Mrs Grant, the applicant, was also the legatee and devisee of the residuary estate which was charged with payment of debts, funeral and testamentary expenses and all death, estate or "successive" (sic) duties, State or Federal.

1. According to the affidavit of the executors and trustees of the estate, the property at 152 Bally Park Road, Dodges Ferry, has a value of $30,500 and the house and land at 10 Milton Crescent, West Moonah, has a value of $51,000. The only other asset of the estate was an account at the Savings Bank of Tasmania amounting to $3,168.27. It is expected that after payment of funeral and legal expenses little, if anything, will remain of the proceeds of the Savings Bank account.

1. The affidavit of Edna Louise Scott also discloses that in 1979 she and her husband, Kevin John Scott, purchased a block of land at Dodges Ferry from the deceased. This block is next door to the deceased's property at 152 Bally Park Road. The block was purchased for the price of $6,000 and an initial payment of $1,000 was made towards that purchase. However, due to a rather unusual arrangement, Mr Grant returned that sum to the Scotts requesting them to bank that money and to deposit with it such payments as they could afford in reduction of the purchase price from time to time. This was done and, I infer, the full purchase price was paid into the account. Certain withdrawals were made from the fund which the Scotts acknowledge they held in trust for Mr Grant during his lifetime and, further, "that the deposited monies and interest earned thereon were to be drawn upon after the death of Harold William Grant in order to assist his widow in the payment of Mr Grant's funeral expenses and the rates of 10 Milton Crescent, West Moonah", in which Mrs Grant would reside. The ultimate destination of the corpus of this fund was not disclosed. Mrs Scott deposed that as at the 14 March 1988, shortly after the deceased's death, the total monies in the account were $6,359.99. In her affidavit Mrs Scott stated that it was her intention to reimburse the estate to the extent of $1,849.99 for the funeral expenses and "to pay annually from the monies deposited in the abovementioned bank account the rates in respect of 10 Milton Crescent, West Moonah". It seems plain that the funds invested in this account can not be made the subject of any specific order by me in the exercise of jurisdiction under the Testators' Family Maintenance Act, but in light of Mrs Scott's clear acknowledgement that the fund is held upon the limited trusts mentioned, I can I think accept that the Scotts will indemnify Mrs Grant in respect of the rates from time to time due upon 10 Milton Crescent, West Moonah.

1. I should at this point indicate that no issues of credit arise for my determination in these proceedings. All affidavits filed were read without objection or deletion and none of the deponents were cross–examined. The affidavits do not contain any or any significant contradictions of fact, nor regrettably do they disclose the age or financial status of either Edna Louise Scott or Kevin John Scott. However, Mrs Grant discloses in her affidavit of 4 May 1988 that she and the deceased were long standing friends of the parents of Edna Scott. The inference is also clear from the affidavits that Mr and Mrs Scott purchased and remained the owners of the block of land adjacent to the deceased's holiday cottage at Dodges Ferry and consequently it may be assumed that the deceased and his wife enjoyed a friendly relationship with the Scotts as their next door neighbours at Dodges Ferry. However, as Mrs Grant also states in her affidavit, "Although Kevin Scott and Edna Scott were friends of the deceased I am unaware of any extraordinary acts of friendship or kindness by Kevin Scott or Edna Scott towards the deceased".

1. It was conceded, and properly so, by counsel for the Scotts that, in the circumstances appearing from the affidavits, it could not be said that his clients had any strong claim to the deceased's bounty or that they had any competing moral claim against Mrs Grant to the deceased's estate. It was also properly conceded, in my opinion, that the jurisdictional basis for the court's exercise of a discretion to make provision out of the estate had been established in the circumstances of this case.

1. Whilst it is not difficult to understand that the deceased, having had no children of his own, should wish to make testamentary provision for the children of his long time friends, it is very hard to appreciate why in doing so he should appear to ignore his clear duty to his elderly and loyal wife. As I have already said, Mrs Grant has no independent means of her own. In February 1985 she suffered a slight stroke and has been in need of medical care ever since, although she is still able to do all her own housework and shopping. Her sole income is the age pension and her weekly expenses are as follows:

Food and household supplies  $55.00

Gardener  20.00

Clothes  10.00

Entertainment  10.00

Council rates (10 Milton Crescent)  12.06

Telephone  5.00

H.E.C.  5.00

Firewood  4.00

Insurance on house and contents  4.00

Dry cleaning  1.00

Hairdressing  3.00

Maintenance on house  20.00

Household replacements  10.00

Gifts  10.00

Transport (buses and taxis)  10.00

Holidays  10.00

Newspaper  5.00

Toiletries  4.00

Medical expenses   5.00

$203.06

1. In a supplementary affidavit filed on the 21 September 1988 Mrs Grant said that prior to the death of her husband they used to journey together to Burleigh Heads in Queensland for three months of each year and, although they were in the habit of staying with friends, she estimates that it cost $1,500 each per year for them to take these trips. On this basis the above estimate for holidays of $10 should be amended to approximately $30, and on this basis the applicant's total weekly expenditure requirement appears to amount to about $223.06. As her counsel pointed out this calculation contains no provision for contingencies such as a future requirement for residential nursing care.

1. It will be seen from the above figures that there is a shortfall between expenditure and income of about $103 per week at the present time, although if the Scotts honour their obligation to pay rates on 10 Milton Crescent (and I believe they will) this shortfall will be reduced to approximately $91 per week.. As already mentioned, the applicant's estimate of her needs was not challenged in any way, and I therefore see no need or justification to dissect or cast doubt upon the estimates which she has given. It is sufficient to say that none of them appear unreasonable.

1. The principles applicable to a claim of this kind were not seriously in dispute. Mrs Grant is prima facie entitled to live in the style to which she had become accustomed during her husband's life. His obligation was to provide her upon his death with such support as would have been provided by a wise and just testator, but as Mr Morris correctly pointed out the court in exercising its powers under the Testators' Family Maintenance Act, whilst entitled to take into account the absence of any competing moral claim, is not entitled to virtually rewrite the testator's will or to be excessively liberal or indulgent to the deprived widow. Nor am I entitled to bestow upon her a large capital sum which she would have no reasonable prospects of enjoying and which in all probability would simply form part of her estate for testamentary distribution by her upon her own death.

1. With these considerations in mind, I turn to consider the applicant's position. As already stated she is 85 years of age. According to the Australian life tables (as I was informed without objection) a woman of her age currently has a life expectancy of 5.7 years. However, apart from the mild stroke which she suffered some years ago, Mrs Grant appears to be a healthy and alert woman for her age. She may live longer than the average and of course she may die much sooner; there is no evidentiary basis for drawing a firm inference one way or the other. It was submitted that to make adequate provision for her she should receive the fee simple estate in both the former matrimonial home at 10 Milton Crescent and the property at Dodges Ferry. To take this course without in some way requiring her upon her death to dispose of her estate in favour of Mr and Mrs Scott would be to deprive them of any benefit under the deceased's will. In my opinion, assuming that I have power to take such a course, this would be going too far (cf. Re Wright, Burbury CJ, 91966). On the other hand I do not think it would be going far enough to give her simply a life estate in either or both of the properties. There is no reason to suppose that she will ever wish to move from 10 Milton Crescent unless her health forces her to seek accommodation in a rest home, or some such institution and, as she is provided by her late husband's will with a permanent right of residence at 10 Milton Crescent, I see no reason to disturb this situation. However, she does require additional income to keep her in reasonable comfort and to protect her from the fear of inadequate financial resources in her old age (see Worladge v Doddridge (1957) 97 CLR per Williams and Fullagar JJ at 11 – 12).

1. It seems to me that the interest, even at 13% per annum or 14% per annum, on the capital sum which would remain after sale of the Dodges Ferry property and the payment of costs and expenses associated therewith, would be insufficient for the plaintiff's needs, particularly if her pension entitlement were to be altered as a consequence of her receiving additional provision out of her late husband's estate. It was estimated, and I think fairly, that the nett proceeds from the sale of Dodges Ferry would be about $25,000. $25,000 is by no means a princely sum these days. Whilst invested at presently available commercial rates it is likely to return in the vicinity of $65 per week. On this basis there would be a shortfall to the plaintiff's requirements in the vicinity of $26 per week if she was reliant upon the income alone. If she is provided with the capital absolutely for her own requirements she will need to dip into the fund on a regular basis or, perhaps, to purchase an annuity to meet her financial needs. No figures were provided to me upon which the cost of such an annuity could be calculated. In any event, an annuity per se would not provide that very desirable buffer which I think the applicant is entitled to have against the unexpected capital expenditures which may fall to be met from time to time in the future.

1. In my opinion the trustees of the estate should be directed to sell the property at Dodges Ferry and to assign the proceeds thereof, after payment of legal costs and the costs of these proceedings, to the applicant absolutely for her own use and benefit, provided that the nett fund thus available to her is not less than $25,000. If it should fall below this amount, additional provision will have to be made to her from other assets of the estate. In my opinion there should be no fetter upon the way in which the applicant should be required to deal testamentarily or otherwise with any part of the fund which remains unexpended by her.

1. Counsel have requested that they be heard before a formal order is pronounced and, accordingly, I will defer that step to enable them to make further submissions.