Latimore v Latimore

[2003] NSWSC 364

CITATION:	Latimore v Latimore [2003] NSWSC 364
HEARING DATE(S):	26 to 28 March, 2003
JUDGMENT DATE:	2 May 2003
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
DECISION:	Plaintiff to receive legacy of $145,000 from estate.
CATCHWORDS:	FAMILY PROVISION - Widow is sole beneficiary under testator's will - claim by adult son with disabilities and limited opportunity for employment - small estate - principles discussed.
LEGISLATION CITED:	Family Provision Act 1982 (NSW) - s.7 Partnership Act 1892 (NSW) - s.33
CASES CITED:	- Cropley v Cropley [2002] NSWSC 349 - Luciano v Rosenblum (1985) 2 NSWLR 65 - Marshall v Carruthers [2002] NSWCA 47 - Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24
PARTIES :	Malcome Thomas Latimore - Plaintiff Beryl May Latimore - Defendant
FILE NUMBER(S):	SC 4784/00
COUNSEL:	N.M. Carney - Plaintiff M.A. Gilmour - Defendant
SOLICITORS:	Paton Hooke - Plaintiff McKerns - Defendant

Introduction

1 The Plaintiff, Malcome Thomas Latimore, is the son of the late Thomas Clyde Latimore, who died on 5 August 1999. The Defendant, Beryl May Latimore, is the widow of the deceased and the mother of the Plaintiff. In these proceedings, commenced by Summons filed on 28 November 2000, the Plaintiff seeks provision out of the deceased’s estate pursuant to s.7 of the Family Provision Act 1982 (NSW). The Plaintiff also seeks certain orders and directions in respect of a partnership between the Plaintiff, Defendant and the deceased, and declarations in respect of assets of the partnership.


The facts

2    The deceased, who was born on 5 May 1922, and the Defendant, who was born on 21 January 1936, married in 1955 and remained together until the deceased’s death.

3    In 1949 the deceased purchased in his own name 120 hectares of dairy farming land at Comboyne on the North Coast of New South Wales. That property is Lot 48 in DP 754407 and is known as “the Home Block”. He set up a dairy farming business on the property and after his marriage the couple lived in a small, crude dwelling on the property, working together in developing the dairy. They established a partnership to conduct the dairy business under the partnership name T.C. & B.M. Latimore.

4    The deceased borrowed money to build a weatherboard cottage on the property into which the couple eventually moved. In 1956 their first child, Nola, was born. In 1957 the Plaintiff was born and in the same year the deceased and the Defendant purchased a parcel of vacant land not far from the Home Block, comprising some 13.36 hectares, now known as “the Bulli Block”.

5    In 1964, a parcel of vacant land comprising 157.1 hectares and adjoining the Home Block was purchased as a partnership asset in the names of the deceased and the Defendants as joint tenants. The land, Lot 49 in DP 754407, is known as “the Aikens Block” and became part of the dairy farm run by the deceased and the Defendant.

6    In 1967 the Plaintiff, then aged ten years, suffered an accident which has had a profound and lasting effect not only upon him but on the family as a whole. He was riding on a tractor on the farm and his raincoat caught in the power take-off shaft. His left leg was severed above the knee. He spent more than six weeks in hospital and had to be fitted with a prosthetic limb.

7    The Plaintiff found it very difficult to cope with school after his accident. Because he had spent so much time in hospital and in recuperating, he fell considerably behind in his schoolwork and found participation in sports embarrassing and awkward. He repeated a year of school but could not catch up. He took any opportunity to stay at home helping his father on the farm, where he felt comfortable. Eventually he left school at the age of fourteen years and commenced working full-time on the farm.

8    As a result of the disruption of his education the Plaintiff is now barely literate. From my observation of him in the witness box he is intelligent and articulate but, as he says, having spent all his life dairy farming he has no knowledge or experience of anything else.

9    When the Plaintiff began working full-time for his parents he was paid $15 a week and provided with board and lodging in his parents’ home. When he was sixteen, his wages were increased to $50 per week after tax.

10    In 1972 the deceased and the Defendant purchased a parcel of land comprising 93.9ha, adjoining the Home Block. The land, part Lot 16 in DP 754407, is known as “the Shiels Block”. The purchase price was $18,000, all of which was borrowed. The deceased and the Plaintiff together cleared and fenced the Shiels Block and it has, from then up to the present time, been used for running dry cattle as part of the operations of the dairy farm.

11    In 1975, when the Plaintiff was 18 years old, the Shiels Block was transferred into his name for a nominal consideration. The balance of the debt owing on the purchase of the property, which by then had been reduced to $10,000, was taken over by the Plaintiff and he gradually discharged it out of his own earnings. The Shiels Block is said to have been worth about $48,000 at the time of its transfer to the Plaintiff. I am satisfied that the deceased caused the Shiels Block to be transferred to the Plaintiff for the Plaintiff’s advancement in life and in recognition of the Plaintiff’s commitment to continuing to assist his parents in the running of the dairy farm.

12    At about the same time, i.e. about 1975, the Plaintiff commenced to receive by way of salary one-quarter of the income, after tax, of the farm’s milk quota production, approximately $200 per week.

13    In about 1978 the deceased and the Defendant moved into a new home which they had built on the Home Block. They lived there continuously until the deceased died, and the Defendant still lives there.

14    In 1979, the deceased received a serious head injury in an accident on the farm. He was in hospital for some time and thereafter his working capacity was significantly reduced. I accept that the Plaintiff’s share of the work load on the farm increased correspondingly from this time onwards.

15    In 1980, the Plaintiff himself was badly injured in a tractor accident while working on the farm. His pelvis was fractured in three places, his shoulder was dislocated and he suffered deep lacerations. He was hospitalised for more than three weeks. His parents, as his employers, had no workers compensation insurance so that he received no compensation for this injury, although his wages were maintained while he was away from work.

16    The Plaintiff returned to work before he was fully recovered from this accident because the deceased was dependent upon him to assist in running the dairy farm. Unfortunately, in 1981 the Plaintiff suffered another accident while unloading grain. His right arm was almost severed, he had broken bones and severe lacerations. The injuries took a long to heal and the Plaintiff now has permanent disfigurement and scarring of the arm and a permanently severed tendon in the thumb and fourth finger. Again, the Plaintiff received no workers compensation in respect of this injury.

17    In 1984 the Plaintiff married. He and his wife, Judith, moved into the old house on the Home Block and lived there rent-free. Judith worked on the farm as well and she was actively engaged in milking, calf rearing, cattle feeding, fencing and so on. At this time the Plaintiff was receiving about $1,200 a month, after tax, being his one-quarter share of the proceeds of sale of the farm’s milk quota.

18    By 1985 the Plaintiff was not satisfied with the remuneration which he was receiving from his parents. A partnership to run the dairy farm business was proposed, with his parents each having a quarter share and the Plaintiff having a half share. The deceased was apparently happy with this proposal, but the Defendant was not. A partnership agreement was prepared but, because the Defendant disagreed with the proposal, the partnership agreement was never signed. Nevertheless, from 1985 onwards the deceased, the Defendant and the Plaintiff together carried on the dairy farm business in partnership, the deceased and the Defendant each having a quarter share and the Plaintiff a half share. Partnership accounts and records for that partnership have reflected that arrangement since 1985. For the sake of convenience, I will refer to the partnership between the deceased and the Defendant alone as the “First Partnership”, and the partnership between the deceased, the Defendant and the Plaintiff as the “Second Partnership”.

19    The Plaintiff’s children, Peter, Olivia and Sheridan, were born in 1986, 1987 and 1989. In about 1990 the Plaintiff completed construction of a four bedroom house on the Shiels Block and he and his family commenced to live there. At about the same time, the Plaintiff arranged for an older, timber house to be transported and re-erected on the site. The Plaintiff derives a sporadic and small income from occasionally renting the older house.

20    From about 1993 onwards the deceased did very little work on the farm because of his deteriorating health. The Plaintiff increasingly bore the burden of running the dairy farm, with the help of his wife and with occasional assistance from Nola’s son, Paul.

21    In 1996, the deceased transferred the Bulli Block to Nola for nominal consideration. It is said to be worth about $200,000. The transfer was clearly intended to be for Nola’s advancement in life, as had been the transfer to the Plaintiff of the Shiels Block.

22    On 5 August 1999, the deceased died. By his Will, dated 1 May 1997, he appointed the Defendant as his Executrix and left the whole of his estate to her provided that she survived him for thirty days. The Defendant had made a Will on the same day in favour of the deceased upon the same condition.

23 Upon the death of the deceased, the Second Partnership was dissolved by operation of law, under s.33 of the Partnership Act 1892 (NSW). However, from the deceased’s death until the present, the Defendant and the Plaintiff have continued to run the dairy farm business conducted on the Home Block, the Aikens Block and the Shiels Block, without having taken an accounting of the assets and liabilities of the Second Partnership and their respective interests therein. For reasons which will shortly become clear, the Plaintiff and the Defendant have been unable to agree upon the winding-up of the Second Partnership or on the constitution of a new partnership.

Relationships within the family

24    The relationship between the Plaintiff and the deceased appears to have been close and loving. From an early age the Plaintiff enjoyed working on the farm beside his father and he says that everything that he knows about dairy farming he learned from his father. I accept that the deceased was conscious of the Plaintiff’s disabilities which he had suffered as a result of the accident in which he lost his leg, and that the deceased felt remorse when the Plaintiff suffered other serious accidents for which he received no workers compensation or other insurance benefits. I accept that this close and mutually supportive relationship between the Plaintiff and the deceased continued up until the deceased’s death.

25    Unfortunately, the relationship between the Plaintiff and the Defendant has long been extremely hostile. It may be that their relationship was deeply affected by the Plaintiff’s accident at the age of ten. It is impossible to know, and unnecessary to go into, the deep-rooted causes of the hostility: it is sufficient to say that there have been frequent heated quarrels between the Plaintiff and the Defendant, probably from the time that the Plaintiff was a teenager. The Defendant regards the Plaintiff as greedy and the Plaintiff regards the Defendant as domineering.

26    The relationship between the Plaintiff and the Defendant is such that they have been unable to agree on how the dairy farm business should be run since the deceased’s death. They have continued to run the business in much the same way as it was conducted before the deceased’s death, but they do not speak to each other more than is absolutely necessary. The business is being run on a maintenance basis only. Several mediation attempts have failed to resolve either the dispute which has given rise to these proceedings or how the dairy farm business should be run on a long term basis. Everyone now accepts that the breakdown in the relationship between the Plaintiff and the Defendant is permanent and irremediable and that the best thing for both of them is that they sever their connection completely.

27    Nola has given evidence in these proceedings on the Defendant’s behalf. It is clear from her evidence and the evidence of the Defendant that Nola and the Defendant are close and are allied against the Plaintiff and his wife, Judith. The relationship between the Defendant and Judith has been hostile since the Plaintiff’s marriage.

The estate

28    The assets and liabilities of the estate cannot be determined without ascertaining the value of the deceased’s interest in the First Partnership and the Second Partnership. Unfortunately, there had been disputes between the parties for a considerable time even before the deceased’s death as to what were the assets of the First Partnership, what were the assets of the Second Partnership, what were the cattle of the Plaintiff himself, and what were the cattle of the Plaintiff’s wife and children. There was not even agreement, at the commencement of these proceedings, as to the number of cattle presently on the farm. To resolve these disputes when the records of the partnerships were far from adequate, would have been exercise of nightmarish difficulty. Receivers would have had to be appointed to both partnerships and accounts would have had to be taken, at grossly disproportionate cost to the parties having regard to the value of the assets in question. Faced with this reality, the parties were, fortunately, able to agree upon a number of matters on the last day of the trial, and they made concessions and admissions which are recorded in the transcript.

29    It was agreed that:


– the value of the Home Block, excluding certain cattle bails, is $500,000;

– all cattle on the dairy farm (i.e. the Home Block, the Aikens Block and the Shiels Block) are assets of the Second Partnership, except the Jersey cattle which are the property of Judith Latimore or her children;

– the net value of the estate’s one-quarter interest in the Second Partnership’s assets, including cattle and the cattle bails on the Home Block, is $77,000;

– the notional estate includes a half-share in the Aikens Block;

– the Aikens Block is valued at $485,000, so that the notional estate includes a sum of $242,500;

– the notional estate includes a half interest in certain shares issued by Dairy Farmers Co-operative, the present value of which half interest is $55,000.


30    The liabilities of the estate are the Defendant’s legal costs amounting to $104,000. The net value of the estate, including the notional estate, is therefore $770,500.

The Plaintiff’s situation in life

31    The Plaintiff is married with three children. His wife, Judith, assists him with dairy farming. His eldest child, Peter, is seventeen and is an apprentice. Peter lives away from home, but his parents support him with an allowance of $50 per week. The Plaintiff’s two younger children, Olivia (sixteen) and Sheridan (fourteen) live at home and are still at school.

32    Since at least the deceased’s death, both the Plaintiff and the Defendant have been drawing $2,500 per month, after tax, from the dairy farm business. The business pays the Council and water rates on all the properties used in the business, that is, the Home Block, Aikens Block and Shiels Block. The Plaintiff is occasionally able to supplement his income from the dairy farm business by renting out the older house on the Shiels Block on a casual basis. I cannot, however, regard that second house as a reliable and regular source of substantial income for the Plaintiff and his family. The Plaintiff has also been able, occasionally, to derive additional income by tractor driving on other properties.

33    The Plaintiff is now forty-five. Apart from the three major injuries to which I have already referred, that is, the severing of his left leg, the injuries sustained when a tractor rolled on him, and the injury received while unloading grain, he has suffered other injuries while working on the dairy farm. As his medical report reveals, his ribs were fractured when a horse rolled on him; he suffered a dislocated shoulder when a cow crushed him in a yard; his right knee locked while stacking hay and an arthroscopic meniscectomy of his knee had to be performed; he sustained a fractured skull, fractured wrist, fractured collarbone, fractured shoulder blade and lacerations in a motor bike accident; he suffered a fractured collarbone in another motor bike accident, and he suffered neck injuries in a third motor bike accident while herding cattle for milking.

34    The Plaintiff’s medical report, which is dated 5 August 2000, was tendered in evidence without objection. It describes the Plaintiff as having “major disabilities with regard to his left above knee amputation” . The report states that he is starting to develop backache as a result of his altered gait pattern and that he has pain in the hips. He has “major disabilities with regard to his left shoulder” in that he is unable to abduct above 90o due to his various dislocations and fractures. He has “severe restriction” of supination and pronation of the right arm (50% of normal), and he has no abduction in his right thumb.

35    The medical report concludes:

“ CLINICAL DIAGNOSES

1. Left traumatic above knee amputation with unsatisfactory prosthesis;

2. Compound fractured right radius and ulna with an infected non-union now healed but with considerable forearm and hand disabilities;

3. Fracture dislocations left shoulder and clavicle resulting in limitation of abduction to 90o;

4. Pelvic fractures which have now healed but because of this and the above knee amputation he needs to expend four times the normal energy used in ordinary walking in order to function and he is developing arthritic changes in his back as a result.

FITNESS FOR WORK

Mr Latimore is obviously fit to continue dairying but I think is due to necessity. He and his wife milk 170 cows twice per day which I think is quite a remarkable feat considering his disabilities. Normally injuries of this severity would preclude anybody from holding down any active employment. I therefore feel that his ability to obtain any employment in the ordinary workforce is minimal and that few employers would engage a worker with these obvious disabilities.

PROGNOSIS

Overall prognosis is extremely poor in that this man is likely to develop arthritic changes in his back and hips and has probably already developed them in his left shoulder. He will need further surgical procedures in the future although none are currently indicated. Quite likely he will require a hip replacement on the right and possibly a knee replacement at a later stage. I doubt that he could continue working in the dairy industry for much more than 10 years before he has major medical problems.”

36    As I have noted, the Plaintiff’s whole working life, from the age of fourteen, has been spent on his parents’ dairy farm. His limited literacy, his age and the restrictions of his experience would make it extremely difficult for him to retrain for some other employment. Indeed, I accept that he loves dairy farming and passionately wants to continue dairy farming on the property where he has spent his whole life. While it is possible, in theory, that he could obtain work as a hired labourer on other people’s properties, I accept the statement in his medical report that his physical disabilities make his prospects of such employment minimal.

37    I accept the unchallenged medical evidence that the Plaintiff’s overall prognosis is “extremely poor” and that he will need further surgical procedures in the future. I accept that, as the medical evidence indicates, it is likely that the Plaintiff will be unable to continue working in the dairy industry much past the age of fifty-two years.

38    The Plaintiff’s financial position is now the subject of agreement between the parties and is as follows. His assets are: the Shiels Block which, with two houses on it, is presently valued at $490,000; farm machinery to the value of $25,000; his half-share of the Second Partnership’s dairy herd and other assets, valued at $154,000; a motor car and motor bike together worth $13,000; savings of $18,000 (being the balance of his share of a lump sum payment made to the Second Partnership upon deregulation of the dairy industry after payment of debts, legal costs and living expenses); and his half interest in the shares in Dairy Farmers Co-operative issued to the Second Partnership, that interest now being valued at $55,000. The Plaintiff’s assets, therefore, are presently accepted as worth $700,000.

39    In addition, I must have regard to the fact that the Plaintiff’s wife, Judith, owns Jersey cattle to an agreed value of $4,000. Although these assets are not the Plaintiff’s, it is reasonable to regard the assets and whatever income may be derived from them as available for the support of the Plaintiff’s family.

40    The Plaintiff’s liabilities are agreed as follows:


– a mortgage on the Shiels Block and outstanding lease payments on the motor bike, totalling $69,000;

– a half-share of the outstanding debt of the Second Partnership, that is, $30,819;

– an estimated $45,000 for the balance of his legal costs in these proceedings.


41    The Plaintiff’s net worth is, therefore, $555,000, in round figures.

42    The Plaintiff’s income from the dairy farming business is $2,500 per month, after tax. The living expenses of the Plaintiff and his family, which are not challenged, are $2,930 per month. The Plaintiff has been eating into his remaining savings from the deregulation compensation payment in order to meet those living expenses.

Whether Plaintiff left without adequate provision

43 As the deceased’s son, the Plaintiff is clearly an “eligible person” for the purposes of s.7(2) of the Family Provision Act . The Court’s first task, therefore, is to determine whether the Plaintiff has been left without proper maintenance and advancement in life. If that determination is made in the Plaintiff’s favour, the second task is to determine what provision, if any, should be made for the Plaintiff out of the deceased’s estate.

44    The deceased’s Will, of course, makes no provision at all for the Plaintiff in the events which have happened. No doubt, the deceased hoped that if his wife survived him she would leave unchanged the Will that she had made on 1 May 1997, that the partnership business would continue to be run by the Plaintiff on all three properties during the Defendant’s life for the benefit of the Defendant and the Plaintiff, and that on the Defendant’s death the Plaintiff would continue to run the dairy farm business on all three properties for the benefit of himself, Nola and their respective families. That hope has not materialised because the irreconcilable differences between the Defendant and Nola on one hand and the Plaintiff on the other have made continued operation of the dairy farm business impossible.

45    As I have said, the Plaintiff strongly desires to continue dairy farming. However, he is not able to do so if all that he has is the Shiels Block. As the experts called by both sides agree, the Shiels Block alone cannot support a viable dairy farm business because of its topography and size.

46    In summary, the Plaintiff’s position is that he cannot count any longer on deriving an income from the dairy farm business conducted on the three properties because his relationship with the Defendant has broken down. He cannot derive a livelihood from dairy farming on the Shiels Block alone; he is unsuited to any work except dairy farming; he cannot realistically look forward to finding work as a labourer on other dairy properties to a degree sufficient to support himself and his family for any length of time in the future; and he faces an enforced early retirement and ill health, due to serious medical problems.

47    Using rounded figures, if the Plaintiff were to sell the Shiels Block, his farm machinery, his share of the Second Partnership’s cattle, Judith’s cattle and his interest in the Dairy Farmers Co-operative shares, the net proceeds would be $728,000 less the expenses of sale. After discharge of his debts of $145,000, he would be left with $583,000, less the expenses of sale. If he were to move to town, he would have to use a substantial part of that sum to purchase a reasonable house for himself and his family. The remainder, if invested, would clearly not provide him and his family with an income sufficient to live on. In addition, there would be no provision for medical and other expenses associated with the Plaintiff’s ill health and probable surgical procedures.

48    The Defendant strongly urges that the Plaintiff has been adequately remunerated for his labours on the farm and that he has been adequately provided for by the deceased during his lifetime. The Defendant submits that the Plaintiff has substantial assets and that he and his wife should be able to find some work which would support them. Accordingly, the Defendant submits that the Plaintiff has been left with proper provision for his maintenance and advancement in life. Having regard to the circumstances which I have recounted, I am unable to accept this submission. I find to the contrary.

Whether provision should be made for the Plaintiff

49    The Plaintiff’s primary contention is that the Defendant should receive a life estate in the Home Block with the remainder therein to him, so that after the Defendant’s death he can continue to use that property together with the Shiels Block for dairy farming. He submits that a life estate would enable the Defendant to continue to live in her home for as long as she wishes and will provide her with a sufficient income from leasing the Home Block and the Aikens Block to another dairy farmer.

50    The Plaintiff recognises, however, that the Court does not favour making provision for an applicant under the Family Provision Act by leaving the widow of the deceased with a life estate in the matrimonial home. The reasons are obvious and they are all applicable in the present case.

51    The Defendant is sixty-seven years of age. She was a loyal wife to the deceased for forty-four years and she has lived on the Home Block for forty-eight years. She is in ill health but she wishes to continue living in her home on the Home Block for as long as possible and either to conduct a dairy farm business herself or to lease the Home Block and the Aikens Block to another dairy farmer so that she may derive an income therefrom.

52    The Defendant’s living expenses, accepted without challenge, are $40,000 per annum, in round figures. The dairy farming experts called by both sides agree that even if the Defendant continues to reside on the Home Block she could expect to lease the Home Block and the Aikens Block to a third party for between $40,000 and $50,000 per annum. Neither block, leased on its own, would provide an income sufficient for the Defendant’s needs.

53    The Defendant’s financial situation is as follows. Under the deceased’s Will she is to receive the Home Block, presently valued at $500,000 excluding the partnership assets thereon. She is also entitled to the deceased’s interest in the Aikens Block so that she would ultimately be entitled the whole of that land, presently valued at $485,000. In addition, she would be entitled to the deceased’s interest in the Second Partnership’s assets so that she would ultimately have a half-share of the dairy herd, that share being valued at $154,000. She has savings of $112,000, being her share of the deregulation compensation payment, and she would be entitled to a half interest in the Dairy Farmers Co-operative shares, that interest being valued at $55,000.

54    The Defendant would, of course, have to discharge her one-quarter share of the Second Partnership’s debts, presently totalling $61,638, so that she would have a liability of a little over $15,000. If the Plaintiff were denied any provision from the deceased’s estate, the Defendant’s position would, therefore, not be lavish but it would be quite comfortable having regard to her needs. Her position would be at least as good, if not better, than when the deceased was alive. She would be able to lease the Home Block and the Aikens Block, receiving an income therefrom sufficient for her needs, and she would have the ability to sell those properties whenever she wished in order to use the proceeds to purchase another home or otherwise provide suitable accommodation for herself.

55    I accept fully that the Defendant worked very hard with the deceased to build up the dairy farming business. Her life in the early years of her marriage was, doubtless, frugal and physically exhausting. In 1976 she suffered a severe injury to her elbow while milking. The hard life which she has led has left its mark on her general health.

56    In addition to assisting the deceased in farming operations, the Defendant also assumed responsibility for the bookkeeping and financial affairs of the two partnerships. She retained that responsibility throughout the deceased’s life and she still retains it. Indeed, her control of the financial affairs of the dairy farming business is one of the Plaintiff’s grievances. Nevertheless, I am satisfied that her efforts in this respect have contributed significantly to the success of the dairy farming business.

57    On the other hand, I bear in mind that the Plaintiff, too, has contributed significantly to the value of the assets which now form the bulk of the deceased’s estate. It is true that he was given the Shiels Block at the age of eighteen, but I must bear in mind that he was required to discharge the outstanding mortgage on the property and that the property on its own is not capable of supporting a dairy farm business. It is true that he was paid wages and, in 1985, he was given a half-share in the dairy farm business. But I bear in mind that from 1979 onwards, the deceased’s injuries and ill health increasingly prevented him from bearing half of the work load in running the farm, and I accept that the Plaintiff came to bear more and more of the responsibility for the physical work despite his own disabilities. His willingness to bear virtually the whole of the work load in running the farm from at least the early 1990s onwards permitted his parents to retain the properties which they owned, rather than having to sell them because they could no longer carry on the business, and to enjoy half the income from the business for considerably less than half of the work required to produce that income.

58    The Defendant emphasises, and I accept, that a widow’s claim to maintenance out of her deceased husband’s estate is a strong one. As was said by Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65, at 69:
“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.”
59    It was emphasised, however, in Marshall v Carruthers [2002] NSWCA 47 that the “broad general rule” enunciated by Powell J was not of immutable application but had to be considered in the context of each particular case. “Special circumstances” require the “rule” to be modified or even displaced. Even so, I accept as an accurate statement of the law the following passage from the judgment of Barrett J in Cropley v Cropley [2002] NSWSC 349 at par.56:

“When it comes to claims by adult children, it can be said at once that, if there is a competing claim by the widow and all claims cannot be fully accommodated, the widow's claim should be afforded precedence in the sense that a demonstrated requirement for the allocation of resources in aid of the widow must be satisfied before any similarly demonstrated requirement for the allocation of resources in aid of an adult child. That a widow's claim to maintenance out of the estate of her deceased husband is a claim which is "paramount" and "of a high order" is borne out by the judgments of Sheller JA in Sayer v Sayer [1999] NSWCA 340 (Davies AJA concurring) and Blackmore v Allen [2000] NSWCA 162 (Priestley JA and Foster AJA concurring). In the former case, Sheller JA described the relativities between the claims of the widow and those of an adult grandchild applicant (Francesca) as follows:

‘In my opinion, the question is whether Francesca has satisfied the Court that there is, in the circumstances and in accordance with prevailing community standards ( Permanent Trustee v Fraser (1995) 36 NSWLR 24 at 46), sufficient in the estate to provide for the widow's proper maintenance and advancement in life and yet leave some amount out of which provision can be made for her.’”

60    In the present case, if the deceased’s Will is not disturbed, the Defendant will be left quite comfortable in life, but the Plaintiff will be left in a situation which will be very hard indeed for him and for his family. The estate is not large enough to permit provision to be made for the Plaintiff which will leave him comfortable while leaving the Defendant comfortable as well.

61    Although the Defendant’s primary submission is that no provision at all should be made for the Plaintiff, she ultimately recognises that the Plaintiff would face severe hardship if no provision at all were made for him. Her secondary submission is, therefore, that he should receive a legacy sufficient to discharge all his present debts. That legacy would be in the order of $145,000, $100,000 of which would go to discharge the Plaintiff’s mortgage and his lease liabilities, and a sum not exceeding $45,000 would go to discharge the Plaintiff’s outstanding legal costs of these proceedings. The Plaintiff would then be left with net assets worth about $700,000. The Defendant would be left with the Home Block and the Aikens Block, from which she can derive rental income of between $40,000 and $50,000 per annum, and she would be able to realise those assets whenever she wishes.

62    The Defendant’s submission recognises, in my view, that in the special circumstances of this case the hardship to the Plaintiff if no provision were to be made for him is of such magnitude as to warrant the Court in reducing somewhat the degree of comfort in which the Defendant is left. A balancing exercise must be carried out: any provision made for the Plaintiff must be no more than the minimum necessary to make adequate provision for his maintenance yet he cannot be given what is necessary for his adequate maintenance if the result is that the Defendant will then be left without adequate maintenance for herself: see e.g. Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24. The legacy suggested by the Defendant will certainly reduce her financial resources, although without immediately reducing her standard of living; it will not leave her without an income sufficient for her needs nor will it dispossess her of her home. On the other hand, while the legacy will not relieve the Plaintiff of all of his difficulties, it will provide him with substantially greater latitude to make provision for himself because it will leave him debt free and with assets which he may realise, perhaps, in order to purchase a viable dairy farm elsewhere.

63    The suggested legacy certainly does not give the Plaintiff what he most wishes, that is, the ability to continue dairy farming on the Home Block, Aikens Block and the Shiels Block, but it must be realised that he could not secure that object even if the Defendant were to be left a life estate in the Home Block, as the Plaintiff seeks. If the Defendant had a life estate in the Home Block, there would be no obligation upon her to lease it to the Plaintiff or otherwise permit him to use it for dairy farming. It is highly improbable that she would choose to do so. The reality is that without the use of the Home Block the Plaintiff cannot have a viable dairy farming business.

Conclusion

64    In the result, therefore, I find that the Plaintiff has been left without proper provision for his maintenance and advancement in life from the estate of the deceased. I propose to order that provision be made for him out of the deceased’s estate and that, in accordance with the Defendant’s submission, he receive a legacy in the sum of $100,000, together with such additional sum, not exceeding $45,000, as is sufficient to discharge his remaining liability for his legal costs and expenses of these proceedings.

65    The Plaintiff sought declarations as to the dissolution of the Second Partnership and what its assets are, and an order for an accounting upon dissolution. Most, if not all, of the issues raised by that claim seem to have been resolved by admissions or concessions made by the parties in the course of their final submissions. However, in case any issues remain, I will stand these proceedings over for a short time to enable the parties to bring in Short Minutes of Order reflecting these reasons, providing for when the Plaintiff’s legacy is to be paid and as to interest thereafter, and providing for any orders which the parties agree should be made in respect of the partnership affairs. I will then hear submissions, if any, as to the appropriate order as to costs.

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Last Modified: 05/02/2003