LATHWELL & ORS -v- GWENYTHE MURIEL LATHWELL as Executrix of the Estate of GILBERT THORLEY LATHWELL (Dec)
[2007] WASC 83
•5 APRIL 2007
LATHWELL & ORS -v- GWENYTHE MURIEL LATHWELL as Executrix of the Estate of GILBERT THORLEY LATHWELL (Dec) [2007] WASC 83
| Link to Appeal : | [2008] WASCA 256 [2008] WASCA 256(S) |
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 83 | |
| Case No: | CIV:2418/2002 | 1 FEBRUARY 2007 | |
| Coram: | MASTER SANDERSON | 5/04/07 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | Provision made for plaintiffs | ||
| B | |||
| PDF Version |
| Parties: | CAMILLE KRISTY LATHWELL AMANDA GAY DAVIDSON BETTINA JOSE LATHWELL PAULETTE JOANNA LATHWELL GWENYTHE MURIEL LATHWELL as Executrix of the Estate of GILBERT THORLEY LATHWELL (Dec) |
Catchwords: | Inheritance (Family and Dependants Provision) Act 1972 (WA) Claim by four daughters of deceased not provided for in Will Allegation of disentitling conduct Turns on own facts |
Legislation: | Nil |
Case References: | Bakranich v The Public Trustee, unreported; SCt of WA; Library No 8787; 28 March 1991 Boniadian v Boniadian [2004] NSWSC 499 Delacour v Waddington (1953) 89 CLR 117 Hughes v National Trustees Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134 In re Green (decd); Zukerman v Public Trustee [1951] NZLR 135 McColl v McComish, unreported; SCt of WA; Library No 950299; 16 June 1995 McGrath v McGrath [2004] WASC 221 Murphy v Stewart [2004] NSWSC 569 Pogorelic v Banovich & Ors [2007] WASC 45 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
The Estate of GILBERT THORLEY LATHWELL late of 133 Stirling Street, Bunbury in the State of Western Australia (Dec)
- First Plaintiff
AMANDA GAY DAVIDSON
Second Plaintiff
BETTINA JOSE LATHWELL
Third Plaintiff
PAULETTE JOANNA LATHWELL
Fourth Plaintiff
AND
GWENYTHE MURIEL LATHWELL as Executrix of the Estate of GILBERT THORLEY LATHWELL (Dec)
Defendant
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Catchwords:
Inheritance (Family and Dependants Provision) Act 1972 (WA) - Claim by four daughters of deceased not provided for in Will - Allegation of disentitling conduct - Turns on own facts
Legislation:
Nil
Result:
Provision made for plaintiffs
Category: B
Representation:
Counsel:
First Plaintiff : Dr J J Hockley
Second Plaintiff : Dr J J Hockley
Third Plaintiff : Dr J J Hockley
Fourth Plaintiff : Dr J J Hockley
Defendant : Mr D L Jones
Solicitors:
First Plaintiff : Peter Marks
Second Plaintiff : Peter Marks
Third Plaintiff : Peter Marks
Fourth Plaintiff : Peter Marks
Defendant : Young & Young
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Case(s) referred to in judgment(s):
Bakranich v The Public Trustee, unreported; SCt of WA; Library No 8787; 28 March 1991
Boniadian v Boniadian [2004] NSWSC 499
Delacour v Waddington (1953) 89 CLR 117
Hughes v National Trustees Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134
In re Green (decd); Zukerman v Public Trustee [1951] NZLR 135
McColl v McComish, unreported; SCt of WA; Library No 950299; 16 June 1995
McGrath v McGrath [2004] WASC 221
Murphy v Stewart [2004] NSWSC 569
Pogorelic v Banovich & Ors [2007] WASC 45
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1 MASTER SANDERSON: This is a claim under the Inheritance (Family and Dependants Provision) Act 1972 (WA) ("the Act"). The plaintiffs are the four daughters of the deceased. The defendant is the widow of the deceased and his sole beneficiary. She is also executrix of his Will. It is convenient to begin with a brief overview of the relevant facts.
Overview
2 In 1968, the deceased married Gay Christine Lathwell ("Gay"). There were four children of the relationship. Camille Kristy Lathwell ("Camille") was born on 23 April 1970. Amanda Gay Davidson ("Amanda") was born on 17 September 1971. Bettina Jose Lathwell ("Bettina") was born on 21 August 1974. Paulette Joanna Lathwell ("Paulette") was born on 26 June 1979.
3 From the date of their marriage, the deceased and his wife ran a farming property in Donnybrook. All of the children were brought up on the farm. Each of them contributed to the day to day running of the property. I will have more to say about this below. For present purposes, it is sufficient if I say that the four daughters and their mother, with the assistance of workmen, ran the 2200 acre farm which carried up to 3000 sheep and 400 head of cattle.
4 On 22 November 1994, Gay suffered a burst cranial aneurism. The consequences of the aneurism were significant. Gay was in hospital in Perth for a period of eight months. Late in 1995 she was moved to the Bunbury Regional Hospital and subsequently to the Donnybrook District Hospital. She is presently institutionalised. She took no part in these proceedings.
5 In 1996, Gay commenced property settlement proceedings in the Family Court of Western Australia. These proceedings concluded in 1998. It was a term of the settlement that Gay would make no claim upon the Estate of the deceased after his death.
6 The deceased and the defendant became acquainted some time in the early 1990s. The defendant was running a café in Donnybrook and the deceased and his family attended as customers in the café from time to time. The defendant says that in or about 1997 her friendship with the deceased became closer. Also in that year, the deceased became unwell. In or around July 1997, he was diagnosed with cancer. Part of the treatment for the cancer was chemotherapy. This treatment made the deceased ill and rather than staying at the farming property on his own, he
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- stayed with the defendant in Donnybrook. From the first, medical opinion was that the cancer was inoperable and terminal.
7 In March 1996, there was a complete breakdown of the relationship between the deceased and his four daughters. They left the farm in circumstances which I will detail more fully below. From that point onward, the deceased and his children were estranged. To the extent that if any of them saw him it was only in passing and any contact was acrimonious.
8 In 1999, the deceased and the defendant moved into a property at 133 Stirling Street, Bunbury owned by the deceased. In June 2001, the deceased proposed to the defendant. He divorced Gay in late 2001 and on 23 October 2001 he married the defendant. He made his Will on 2 November 2001 and he passed away just under one month later. Probate of the Will of the deceased was granted to the defendant on 17 April 2002.
9 By his Will, the deceased left the whole of his Estate to the defendant. Nothing at all was left by the deceased to the plaintiffs. The Will contained the following clause:
"I DECLARE that the reason I have not made provision under my Will for my daughters is due to my having made adequate financial provision for each of them during my lifetime AND FURTHER, for the last 5½ years, my daughters have had no contact with me even though I have become very ill in that time but there is now complete estrangement between us. By way of some background, in or around January 1998, a property settlement was finalised between my exwife GAYE CHRISTINE LATHWELL and me whereby I provided my said exwife with substantial capital enabling her to live adequately for the rest of her life AND FURTHER, the final property settlement Orders contained a statement of intention of the parties not to commence any actions under the Inheritance (Family & Dependants Provisions) Act with respect to the estate of the other party and that the parties intended that their financial relationships be severed which included my relationship between myself and my daughters. For the past FIVE (5) YEARS my spouse and her children have cared for me and provided me with support. In the event I leave a letter with this Will it is my intention that it be treated as further
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- guidance as to why I have not made any provision for my daughters."
Legal principles
10 The legal principles governing an application such as this were not in dispute. In the recent decision of Pogorelic v Banovich & Ors [2007] WASC 45, at [4] - [12], Master Newnes summarises these principles. I would respectfully adopt what was said by the learned Master. In particular, it is to be noted that in determining the application there is a two-stage process. It is first necessary to determine whether the deceased has made adequate provision out of the Estate for the applicants. If that question of fact is determined in favour of the applicants, then it is a matter of making an appropriate distribution.
11 Two further matters require comment. The first has to do with the provision in the Will where the deceased sets out why he did not make provision for the plaintiffs. Counsel for the defendant submitted that such a provision was admissible as evidence but could in no way be determinative of the outcome of the proceedings. This is in line with the authorities: see In re Green (decd); Zukerman v Public Trustee [1951] NZLR 135 at 144; Hughes v National Trustees Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134 at 152 and McGrath v McGrath [2004] WASC 221. Counsel for the defendant quite properly, in my view, made little or nothing of cl 4 of the Will either in his written or oral submissions. The clause is of no benefit in attempting to determine the proper disposition of this application.
12 The second matter concerns disentitling conduct. Section 6(3) of the Act is in the following terms:
"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."
13 It was the defendant's position that the failure of the plaintiffs to contact the deceased after he was diagnosed with terminal cancer was conduct which was sufficient to preclude them from benefiting in the Estate. That then raises the question of what conduct on the part of a claimant is sufficient to warrant a refusal to make an order.
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14 There are remarkably few cases dealing with this issue. In Delacour v Waddington (1953) 89 CLR 117, the Court said (at 127):
"… the 'character or conduct' … must be taken to refer to character or conduct of such a nature as to entitle the court to say that the applicant has forfeited or abandoned his or her moral claims on the testator."
15 The difficulty with this statement of principle is that it is couched in terms of a "moral claim". The tendency in the most recent cases on the Act has been to eschew such terminology and apply the Act in a mechanical way. Perhaps it may be said that the Court was saying no more than the conduct has to be assessed against a reasonable prevailing community standard.
16 In Hughes v National Trustees Executors & Agency Co of Australasia Ltd (supra), Gibbs J said (at 156):
"The question whether conduct is sufficient to disentitle an applicant to relief must depend not only on the nature of the conduct itself, but also, to some extent, on the strength of his need or claim to provision from the estate of the testatrix. The stronger the applicant's case for relief, the more reprehensible must have been his conduct to disentitle him to the benefit of any provision. The onus is on those who assert such conduct to prove it."
17 There have been a number of cases in which a claimant's award has been reduced or there has been no award made because of the conduct of the claimant. In McColl v McComish, unreported; SCt of WA; Library No 950299; 16 June 1995, the learned Master reduced the claimant's award by reason of conduct which he described as "cruel and unkind". In Bakranich v The Public Trustee, unreported; SCt of WA; Library No 8787; 28 March 1991, the applicants who had little relationship with their father relied upon his moral obligation to provide for them. Franklyn J was not persuaded and their claim failed. In Boniadian v Boniadian [2004] NSWSC 499, the Court held that where a daughter blackmailed her mother the claim should fail. In Murphy v Stewart [2004] NSWSC 569, a former husband who had subjected the deceased to physical and emotional abuse failed in his claim.
18 The High Court cases apart, none of these decisions provide any real guidance as to what amounts to disentitling conduct. Every case must be
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- determined on its own facts, always remembering applicable community standards.
Did the deceased make adequate provision for the plaintiffs out of his Estate?
19 It was submitted on behalf of the defendant that the plaintiffs had provided insufficient evidence as to their financial position as at the date of death of the deceased to enable any assessment to be made of their financial position. It was said on this basis that the application should fail. Before examining in detail the evidence provided by the plaintiffs, I should quantify the value of the Estate of the deceased as at the date of his death.
20 The defendant's evidence was that the value of the deceased's Estate as at the date of his death was $2,285,956. The major asset of the Estate as at that date was the farming property in Donnybrook. It was valued at over $2,700,000 but was subject to a mortgage of $1,300,000. The Estate was cash poor and although the statement of assets and liabilities shows cash at bank, there were insufficient moneys to regularly service the mortgage.
21 There were two other properties held by the deceased at the date of his death. One was a property at 133 Stirling Street, Bunbury. This property was not actually in the name of the deceased. It belonged to the deceased's father who had left it to the deceased. As at the date of his death, probate of his father's Estate had not been obtained by the deceased and consequently the Stirling Street property had not been transferred into his name. But there is no doubt as to his entitlement to that property and it is properly included in the deceased's statement of assets. The other property included as an asset was a holiday home in North Yunderup. That may or may not have been encumbered by bank security. What is shown as a liability is a mortgage to a bank without specifying what properties are covered by that mortgage.
22 The assets and liabilities statement also refers to an electrical business run by the deceased. It would appear that during his lifetime he ran an electrical contracting business in Donnybrook as well as the farming venture. That business appears to have had no intrinsic value and its assets and liabilities are largely relevant for the purposes of calculating the net value of the Estate.
23 Each of the plaintiffs filed two affidavits. In each case, the first affidavit was sworn in December 2002, and the second affidavit was
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- sworn in October 2006. Despite submissions on behalf of the defendant to the contrary, I am satisfied that in each case there is sufficient evidence available from each of the plaintiffs' first affidavits, to ascertain their financial position as at the date of death of the deceased.
24 Camille left school after year 11 and obtained a hairdressing apprenticeship in Bunbury. She attended a TAFE course one day a week for three years. She worked in Bunbury, Busselton and Perth. She boarded everywhere she went. In 1989, she wanted to go back to live on the farm and so she obtained a hairdressing job in Collie.
25 Some time thereafter, she commenced business in Donnybrook. She was financed into this business by her father and she says that over the years she repaid his initial investment. After March 1996 and the breakdown of the relationship with her father, she gave up that business. She commenced another business in Donnybrook with money she borrowed from the bank.
26 Camille says that between March 1996 when she and her siblings left the farm, she helped pay for her sisters' general living costs as well as her mother's costs. There is no evidence that as at the date of death of the deceased Camille owned any real property. It would appear that her assets were limited to the business in Donnybrook. Apart from that business, she appears to have owned nothing of substance.
27 Amanda left school at 15 and undertook a TAFE course in Bunbury in office and secretarial studies. This was a one year course which ran four days a week.
28 After Amanda finished her course, she did a traineeship in Bunbury and she did the books for her father's electrical business in Donnybrook. In 1989, she obtained employment at a building society in Donnybrook. This lasted for 12 months. She then obtained employment with an insurance company in Bunbury. She remained there until the end of 1992. In 1992, she worked for a clothing store in Bunbury and had a second job as a waitress. In January 1994, she went overseas and only returned to Australia in November of that year when she learned of her mother's illness. Thereafter she returned to doing the books for her father's business.
29 In 1996, she obtained employment with FAI in Bunbury. It was part-time employment that provided little income. She was, as she says, "totally broke". She did subsequently obtain nearly full-time work with an insurance company. In 1996, she met Paul Davidson. They married in
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- 1998. They bought land in Donnybrook and built a house. Amanda became pregnant and was too ill to work during the course of her pregnancy. Although the exact nature of the illness is not detailed, it would appear to be a liver complaint. When the couple's child was born, she was ill and required specialist medical treatment. The couple were forced to refinance their home in Donnybrook to cover their medical expenses. That appears to have been their position in 2001. Subsequently they were forced to sell that house (in 2003) and they now have a block with a mortgage.
30 Bettina was, it seems, the daughter of the deceased most interested in running the farm. She attended St Mary's School in Donnybrook to year 7 and then Bunbury Catholic College for years 8, 9 and 10. She was keen on horses and had her own horse for most of the time. She used this for mustering on high rocky parts of the farm. By the time she was in year 10, she would take at least a day off a week from school to help run the farm. She left school at the end of year 10 and worked on the farm. The deceased told her that there was no point in her going on with school as she was not clever enough and one day she would have the farm.
31 After leaving school (in 1990) she went and did a business course at TAFE. But she continued to work on the farm and she appears to have been instrumental in actually maintaining the farm as a going concern. She received no remuneration for her efforts.
32 In 1993, aged 19, while she was still doing farm work full-time, she started holiday riding camps. She was assisted by her mother and her younger sister. The whole enterprise was financed by her own efforts - her father contributed nothing. She pursued her interest in equestrian events - again financing her activities herself.
33 During her mother's illness, Bettina continued to work on the farm and play her part in looking after her mother. But eventually this position became intolerable. She left the farm, taking with her the horses which were her property. She eventually had to sell those horses to pay the rent. She essentially walked away from the farm with nothing.
34 By 2002, Bettina was working at a racing stable. In 2003, she moved to an old house on the property where the racing stable was situated. She studied part-time at TAFE. Her only assets were two horses.
35 In 2004, in an effort to provide herself with a career path, she returned to TAFE to study human massage. She completed that course while working at the racing stable. By this time, she was living in New
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- South Wales. She has worked intermittently at massage clinics. It is not entirely clear as at the date of death of her father what assets Bettina held. In her affidavit sworn 5 October 2006, she listed her assets as two horses, a small motor vehicle and a 1994 Landcruiser, a horse float and a block of land in Busselton. She says that the block of land was bought for $133,000 and she owed $80,000 under a mortgage. She had savings of $25,000.
36 Paulette completed schooling to year 12 and then undertook an accounting and business studies course at TAFE. In 1998, she obtained employment in Bunbury as a secretary. She went to live in Boyanup. In 2000, she left her secretarial job in Bunbury and took a number of part-time jobs. In 2001, she followed up her passion for horses and obtained a job managing a 100 acre horse stud. As at the date of her father's death, she had no assets of any significance. Her position had not changed significantly as at the date of trial.
37 In considering whether the deceased made adequate provision for the plaintiffs, there are two other factors which should be taken into account. First, there is the contribution made by all of the plaintiffs to the Estate of the deceased. In large measure, the deceased's Estate was made up of farming properties. Doubtless most of the value in those properties attached to the real estate. But there is no doubt from the uncontradicted evidence of each of the plaintiffs that they contributed significantly to the running of the farm over many years. It is not possible to put a dollar value on their contribution: nor is it possible to put a value on the Estate if they had not contributed as against their having contributed. But there can be no doubt that in part, the value of the deceased's Estate is attributable to the efforts of his children.
38 Second, it clearly emerges from the evidence that the deceased was mean in his dealings with his children. While he demanded continual assistance in running the farm, he refused to contribute anything which would have allowed the plaintiffs to enjoy their childhood. It may be the case, as was submitted by counsel for the defendant, that the deceased did from time to time provide horses so each of the girls could indulge their enthusiasm for equestrian events. But the contribution was minimal. The fact that so little was put by the deceased into the children must necessarily have contributed to the assets available in his Estate. Again, it is not possible to put a dollar value on this aspect of the family relationship. But it must be acknowledged that in spending nothing on his daughters, the deceased reserved the assets for his Estate.
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39 It should also be noted that the defendant really commenced her relationship with the deceased in or about 1997. The evidence makes it clear that from the date the deceased was diagnosed with terminal cancer until he passed away, he was supported by and enjoyed the company of the defendant. The deceased and the defendant were close for around four and a half years. The defendant says that during the deceased's illness her daughter's fiancé ran the farm. No detail was provided. There is no evidence to suggest the defendant herself contributed to the deceased's estate.
40 Taking into account the asset position of each of the plaintiffs, the relative size of the Estate, the contributions made by the plaintiffs to the Estate and the limited claims on the bounty of the deceased by the defendant, I am satisfied that the Will of the deceased did not make adequate provision for the plaintiffs.
Was there any disentitling conduct on the part of the plaintiffs?
41 It was the uncontested fact that between March 1996 and the death of the deceased in late 2001, there was no contact between the deceased and the plaintiffs. It was the defendant's case that the failure of the plaintiffs to make contact with the deceased was conduct which would justify a refusal to make an order that they benefit from the Estate.
42 It is convenient at this point to say something of the circumstances of the plaintiffs leaving the farm. As I have mentioned above, in 1995 the plaintiffs' mother was moved from Perth to first the Bunbury Regional Hospital and then to the Donnybrook Hospital. In March 2006 Amanda decided that she could no longer remain on the farm. She told her father she was intending to leave. On the plaintiffs' uncontested evidence the deceased was becoming increasingly violent and abusive in his behaviour at least towards Amanda and perhaps the other children. Amanda says that the deceased told her that he did not want her to leave the farm as he did not want the responsibility of looking after his wife. But Amanda had resolved to leave. Her sisters supported her decision. The deceased then said: "If you go, you all go". He threatened to kill the girls if they left. As they attempted to leave in the car the deceased pulled Amanda's seatbelt bruising her neck and chest. He locked the gate so that they could not get out. But eventually they managed to drive away. It was clear from the way that each of the plaintiffs gave their evidence that this incident was highly distressing. It represented awful treatment of the plaintiffs by the deceased.
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43 In my view, the plaintiffs behaved perfectly reasonably in not making greater efforts to contact their father. They were effectively evicted from the farm, their home, in March 1996. After that eviction they tried on several occasions to reach an accommodation with their father and settle issues between them. These efforts came to nothing. But there was no want of trying on the part of the plaintiffs - particularly so in the case of Camille. In my view, there was nothing further that could have been done.
44 To state the position in that way, while an accurate reflection of the evidence, does not convey the depth of feeling each of the plaintiffs had for their father. Each of the plaintiffs gave evidence and each of them struck me as strong women. But each of them was reduced to tears. In my view, there was no doubt that each of them wanted to love their father; each of them were mourning their unhappy childhood. They exhibited some resentment towards the deceased, but no outright hatred or contempt. They had no reason to believe that any approach they may have made to their father would have been reciprocated. Quite the reverse. He stated he wanted nothing to do with his children and he maintained that position.
45 In my view, there was nothing in the behaviour of the plaintiffs which could be said to amount to disentitling conduct.
Proper distribution of the Estate
46 The precise value of the Estate as at the date of the hearing of this application does not clearly emerge from the evidence. That is because the precise value of the properties is uncertain. But it is reasonable to assume that the present value would be somewhere around $3.8 million dollars.
47 In my view, a proper division of the Estate would be to order that all the assets of the Estate be realised and the Estate then be divided equally between the four plaintiffs and the defendant. This would mean that each party would receive approximately $750,000.
48 I have reached that conclusion for these reasons.
49 First, there is no reason to differentiate between each of the plaintiffs.
50 Second, there is no one part of the property to which either the plaintiffs or the defendant have any particular claim. The defendant is
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- resident in the Bunbury property, but that forms such a significant part of the Estate that to leave that to the defendant would, in my view, be an unreasonable outcome. That means all of the property must be sold.
51 Third, there is no particular warrant for giving a greater proportion of the property to the defendant as against the plaintiffs. I have already dealt with the respective contributions of the parties.
52 Finally, there is no great difference between the asset position of the plaintiffs and the defendant. The defendant, for her part, does not have any dependents or any calls upon her resources of any significance. In my view, there is no reason why she should benefit particularly from the assets of the Estate.
53 I will hear the parties as to the precise form of orders and as to costs.
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