Lawrence v Lawrence - [2004] WASC 90

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: LAWRENCE -v- LAWRENCE & ORS [2004] WASC 90

CORAM: MASTER SANDERSON

HEARD: 5 & 6 MAY 2004

DELIVERED : 13 MAY 2004

FILE NO/S: CIV 1117 of 2000

MATTER :Inheritance (Family & Dependants Provision) Act 1972

BETWEEN: ELAINE CYNTHIA LAWRENCE
Plaintiff
AND
ELAINE CYNTHIA LAWRENCE
KAREN ELAINE DUCAT as Executrices of the Will of KEITH LIONEL LAWRENCE
First Defendants
KAREN ELAINE DUCAT
Second Defendant
LEWIS WILLIAM LAWRENCE
Third Defendant
ELLEN MAY HATHAWAY
Fourth Defendant
DAPHNE ANNE SARGENT
Fifth Defendant
LIONEL GEORGE LAWRENCE
Sixth Defendant

Catchwords:

Inheritance (Family & Dependants Provisions) Act 1972 - Application by widow - Defendants concede no adequate provision made in Will by deceased for plaintiff - Will varied to make proper provision - Turns on own facts

Legislation:

Inheritance (Family & Dependants Provisions) Act 1972

Result:

Will varied to provide for plaintiff

Category: B

Representation:

Counsel:

Plaintiff:     Ms H E Prince
First Defendants           :     No appearance
Second Defendant         :     Mr J C Curthoys
Third Defendant           :     Mr J C Curthoys
Fourth Defendant          :     Mr J C Curthoys
Fifth Defendant            :     Mr J C Curthoys
Sixth Defendant            :     Mr J C Curthoys

Solicitors:

Plaintiff:     Patrick Gethin & Co
First Defendants           :     No appearance
Second Defendant         :     Paterson & Dowding
Third Defendant           :     Dawson Davies
Fourth Defendant          :     Dawson Davies
Fifth Defendant            :     Dawson Davies
Sixth Defendant            :     Dawson Davies

Case(s) referred to in judgment(s):

Bondelmonte v Blanckensee [1989] WAR 305
Luciano v Rosenblum (1985) 2 NSWLR 65
Warland v Reece [2000] NSWCA 380

Case(s) also cited:

Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Carmichael v Schram & Ors, unreported; SCt of WA; Library No 950717; 21 December 1995
Davey v Fairhead & Ors, unreported; SCt of WA; Library No 960088; 1 March 1996
Dobra & Ors v Brennan & Ors [1999] WASC 98
Fulop v Public Trustee (1987) 8 NSWLR 679
Hawkins v Prestage [1989] 1 WAR 37
Hughes v National Trustees Executors and Agency Co (1979) 143 CLR 134
In re Allen; Allen v Manchester (1921) 41 NZLR 218
McCosker v McCosker (1957) CLR 567
Pontifical Society for the Propogation of the Faith v Scales (1962) 107 CLR 9
Singer v Berghouse (1994) 181 CLR 201
Vigolo v Bostin & Ors [2002] WASCA 327
White v Barron (1979) 144 CLR 431

MASTER SANDERSON: This is an application by the plaintiff brought under the provisions of the Inheritance (Family & Dependants Provisions) Act 1972 ("the Act"). The plaintiff is the widow of Keith Lionel Lawrence ("the deceased") who passed away on 30 September 1997. The first defendants are the executrices of the deceased's Will. Prior to his marriage to the plaintiff, the deceased was married to Eileen Lawrence. Eileen Lawrence died on 23 September 1980. The second to sixth defendants are the children of the deceased and Eileen Lawrence. The deceased and the plaintiff were married on 10 April 1982. There were no children of that union.
The deceased was, at the time of his death, and had been for many years, a farmer in the Northam area. It would seem that the property comprised, rather conveniently, of a number of separate titles which together made up the deceased's farm. By his Will, the deceased left his children the lots comprising the farm. The plaintiff was left no interest in the farming property but she was left "the sole use of the house on the said lands during her lifetime". She was also left all of the cash held in the estate and standing in the name of the deceased and the proceeds of all life insurance policies. The deceased left the livestock to three of the children and all motor vehicles, plant and equipment "and articles of personal use or adornment owned by me at the time of my death" to the second defendant. The residue of the estate was divided between the plaintiff and his children.
The plaintiff says that the deceased in his Will failed to make adequate provision from his estate for her proper maintenance or advancement in life. She brings her claim under s 6(1) of the Act. The defendants concede that the Will does not make proper provision for the plaintiff. The primary question then for determination is what further provision, if any, ought be made out of the estate of the deceased to allow for the plaintiff's proper maintenance or advancement in life. There is one further issue between the parties. It has to do with a lady's fob watch. As I will explain, at one stage this watch was clearly the property of the deceased. The question for determination is whether the deceased gave the plaintiff the watch during his lifetime, or whether he simply loaned the watch to the plaintiff with the effect that it now passes to the second defendant pursuant to cl 2(h) of the deceased's Will. Before dealing with the facts I will briefly mention the applicable legal principle. These were not in dispute between the parties.
The starting point in dealing with any application under the Act is the decision of the Full Court in Bondelmonte v Blanckensee [1989] WAR 305. Malcolm CJ, speaking on behalf of the Full Court, put the position this way (at 307):
"On an application under (s 6(1) of the Act) two issues arise. The first question is whether the disposition of the estate by the deceased was not such as to make adequate provision for the proper maintenance, support, education or advancement in life of the claimant. This is in effect a jurisdictional question, which has to be determined at the date of the death of the deceased … If that question be answered in the affirmative, the court in exercising its discretion to make such provision as it thinks fit, must take into account the relevant facts as they exist at the time of making of the order."
As I have indicated above, the defendants conceded the jurisdiction question and it is therefore a matter of determining what, as at the date of the hearing, would be proper for the maintenance and support of the plaintiff. A convenient statement of principle, when determining this question, is to be found in the decision of Luciano v Rosenblum (1985) 2 NSWLR 65 where Powell J said (at 69 ‑ 70):
"It seems to me that, as a broad 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."
The plaintiff is 78 years of age. Prior to her marriage, the plaintiff was a school teacher. She had worked in that profession for 38 years. At the time of the marriage she was teaching home economics at Girrawheen Senior High School. Prior to her marriage to the deceased the plaintiff had never been married. She has no children. She resigned from her teaching position 10 days before her marriage to the deceased and she has not worked in paid employment since that date.
It is clear that during the 15 years that she was married to the deceased she contributed significantly to the running of the farm. She says that she assisted the deceased by performing duties "that were more suited to a farm labourer than a farmer's wife": par 9 of the plaintiff's affidavit of 18 May 2000. Without detailing the evidence, I accept that she was a significant contributor to the running of the deceased's farm. The plaintiff was, and indeed still is, fit and active and it is clear that although she had no experience of farming life, she took to it with enthusiasm. There can be no doubt that the deceased contributed significantly to the deceased's farming enterprise.
For some 20 years the plaintiff owned her own home in Dianella, just north of Perth. In 1981 she sold that property and purchased a home at 15 Fermoy Avenue, Northam. She continued to own that home until 1985 when she sold it to her sister for an amount of $32,000. She then had some $40,000 in investments and together with the proceeds of the sale of the Fermoy Avenue property, the funds were invested and form part of her current investment portfolio. The plaintiff now has cash on deposit of some $90,000 odd. It may be that these funds are the proceeds of the sale of her Northam property. She owns no other real estate. She does have some household furniture of negligible value. She owns a 1988 Nissan sedan Skyline, upon which she puts a value of $2000. She has the sum of $2000 in a cheque account. At present she is in receipt of an aged pension from Centrelink which amounts to $446.53 per fortnight. She owns a small number of Telstra shares. The income from her investments and the dividends paid by the Telstra shares give her an additional income of something over $3000 per annum.
The present value of the deceased's estate is put at $1,957,703.50: see the affidavit of the second defendant sworn 4 February 2004. There is no dispute between the parties as to the value of the estate. The cash held by the estate is just under $300,000. The estate holds shares valued at something over $125,000. Insofar as there is any dispute between the parties as to the value of the estate, it relates to profits earned by the estate as a result of the farming activities conducted since the date of death of the deceased. In my view, there can be no doubt that these profits would form part of the deceased's estate. Tax has been paid on them on that basis and the profits earned have been earned from working property still held in the estate. When it comes to determining which of the beneficiaries is entitled to which amount under the terms of the Will, all cash presently held by the estate should be viewed as being the property of the estate.
(The Will of the deceased leaves to the plaintiff all cash standing in his name "as at the date of his death". The affidavit of the second defendant referred to above does not give the position as at the date of death of the deceased. Some of the amounts presently held in the various bank accounts may be attributable to interest payments and would not be covered by the bequest to the plaintiff. This is an issue which was not canvassed between the parties and given the conclusion I have reached, it is not necessary to say anything further on the question. However, I would make the point that as the evidence stands at present, it is not entirely clear in precise dollar terms how much the plaintiff would receive from the estate. What I have done is approach the matter on the basis of how much it would be appropriate for her to receive from the estate allowing an adjustment to the Will to be made to reflect that position.)
It was the plaintiff's case that she was no longer able to reside on the farming property. It is 19 kilometres from Northam and somewhat isolated. She wishes to move into Northam and she asks that provision be made from the estate to allow her to purchase a suitable property in the Northam township. The defendants agree that the plaintiff can no longer reside on the farm and they accept that she should have provision made to allow her to move into Northam. The dispute between the parties is as to the nature of the accommodation that the plaintiff requires and its likely cost. That is the first issue between the parties.
The plaintiff says that she needs a new motor vehicle. She says that her present vehicle is unsatisfactory, both because of its age and because it is unairconditioned. Once again, the defendants accept that provision should be made from the estate to allow her to purchase a new motor vehicle. Again, the parties are at odds as to how much should be provided from the estate for the purchase of the vehicle. This is the second issue between the parties.
The plaintiff says that she should be provided with a sum which would adequately allow her to maintain herself. It was submitted on behalf of the plaintiff that it was not appropriate that a widow of a deceased with assets over $1.9 million should be maintained by the State through an aged pension. Therefore the plaintiff seeks a capital sum which she can invest and obtain income. She can then forego the Centrelink benefits and live off her investments. The defendants deny that any such provision ought be made. They say the plaintiff has been living off her present investments and her pension entitlements and no further provision for her need be made. This is the third issue between the parties.
There was no suggestion on the part of the defendants that they had competing claims on the estate which would in some way disentitle the plaintiff from obtaining further provision to meet her legitimate needs. It is unnecessary to detail the present financial position of each of the defendants - although their financial position is set out in detail in the affidavit material. It is sufficient if I say that none has a particular need which is not met out of the provision made in the Will. It was not suggested otherwise by the defendants.
The plaintiff led evidence from Mr John Martin, a licensed valuer. Mr Martin was instructed by the plaintiff's solicitors to investigate what properties were available in Northam which might suit the plaintiff's needs. Appearing as annexure "A" to Mr Martin's affidavit sworn 27 April 2004, is a letter of instruction upon which Mr Martin says he acted. (Oddly the letter is addressed to Mr Alan Bell of Bell MacMillan & Associates, Valuers. Despite this, Mr Martin confirmed that he acted upon the instructions contained in the letter.) In this correspondence the plaintiff's solicitors set out what they say are the needs of the plaintiff. The nine criteria listed are as follows:
"(a)It must be new or recently built, as she requires a home that does not now need repair and is unlikely to need repair for well into the future.
(b)It must have a reasonable sized garden as the Plaintiff is now and always has been a keen gardener.
(c)It must have no steps in any part of it because the Plaintiff recognises that a time may come when she is not able to manage steps safely.
(d)It must have a garage for the Plaintiff's security and for the security of her motor car.
(e)It must be a property that is likely to have a good resale value should the time come when she needs to change her accommodation although that is something she would prefer not to do.
(f)There must be reasonable facilities for putting up visitors and for entertaining friends and relations.
(g)The house must be located in an area, which is quiet. The Plaintiff currently lives in a farmhouse in the Shire of Northam and is used to peace and quiet. She does not appreciate traffic noise or noises from hotels, places of entertainment or thoughtless neighbours.
(h)For her own safety she requires it to be located in a respectable area of Northam which is least likely to be troubled by the presence of criminals on the street.
(i)She wishes is to be reasonable close to shopping and facilities in the Town of Northam for obvious reasons."
Mr Martin also says in the body of his affidavit that in a telephone conversation with the plaintiff's solicitor he was instructed to take into account two additional criteria. These were the security of the premises and the cupboard space available in any accommodation.
The defendants accepted that the requirements of the plaintiff embraced all but two of these criteria. It was submitted that the plaintiff was not a keen gardener and that she did not require a reasonable size garden. In support of this position the defendants tendered a number of photographs of the plaintiff's present residence. It is clear from these photographs that the garden is overgrown and looks unkempt. Certain further photographs were tendered on behalf of the plaintiff. While those photographs show the garden in a somewhat better light, there is still nothing to suggest that the plaintiff is as she alleges, a keen gardener. I accept that at her present residence there is a limited water supply. But based upon the photographs, I could not conclude that the plaintiff is a keen gardener. Furthermore, the plaintiff is 78 years of age. As I have indicated, she appears to be in robust good health and hopefully will remain so for years to come. But whether or not a large garden for a person of the plaintiff's age is warranted is, I think, open to question.
The other criteria challenged by the defendants was the need for the accommodation to have facilities allowing her to accommodate visitors. The plaintiff was questioned on this issue in cross‑examination. She indicated that so far as she could recall, the last time she had visitors to stay over was some 18 months ago. She thought that three people had stayed with her but she did not identify who these individuals were. There is no evidence from the plaintiff as to who might stay with her and for how long. While I would accept that the plaintiff requires accommodation which will allow her to provide for visitors, this seems to me to be a matter of peripheral importance. I would not accept that it is essential for the plaintiff's needs that the accommodation she required be large.
Mr Martin's report appears as annexure "B" to his affidavit. Consistent with his instructions, he has examined the market for houses in and around the Northam township. He has also examined the sales evidence in the area with a view to ascertaining what properties presently for sale might actually realise. His conclusions are as follows:
"There are very few older style units that would meet the criteria outlined. The more modern 3 bed units of which there is limited supply have sold for between say $160,000 and $170,000.
Therefore it is concluded that if a prospective purchaser wished to buy a strata title unit meeting the selection criteria outlined that a likely purchase price would lie between $150,000 and $170,000.
The purchase price of a single residential home meeting the selection criteria outlined would be in the range of $170,000 to $200,000."
The defendants relied upon valuation evidence of Michael Frederick Chartres. Mr Chartres is, like Mr Martin, a licensed valuer. Mr Chartres has sworn an affidavit dated 4 February 2004. Appearing as annexure "MFC4" to that affidavit is a copy of Mr Chartres' report. The precise nature of the instructions given to Mr Chartres does not appear from his affidavit or elsewhere in the evidence. However, it is apparent that his instructions were broadly similar to the instructions given to Mr Martin, although the criteria in relation to the garden and the extent of the accommodation were clearly not matters which were emphasised. As with Mr Martin, Mr Chartres examined the market evidence - both the properties that were for sale and the sales that had taken place. He also examined a number of strata titled units which on his instructions, may have been suitable accommodation for the plaintiff. While Mr Chartres does not offer a firm conclusion as to what price suitable accommodation for the plaintiff might be, there is not a significant difference either between his approach or his conclusions when set against Mr Martin's report.
In the end, there is not much difference between the plaintiff's view on this issue and the defendant's position. While it is not for me to determine what accommodation the plaintiff might eventually require, it would seem that a strata titled unit may well meet her demands. In schedule 2 of his report, Mr Chartres refers to three units - Unit 1/11 Weld Street, Unit 4/11 Weld Street and Unit 1/53 Duke Street. All would seem to be satisfactory. (It is to be noted that Unit 1/11 Weld Street lacks carpets, curtains, airconditioning and paving. Some $10,000 would need to be spent on the unit). Each of these units could be acquired for something around $155,000.

It is clear that there is limited single residential accommodation which would fit the plaintiff's criteria - even discounting the requirement for a significant garden. But the accommodation available does suggest that it might be acquired for something below the range of $170,000 - $200,000 to which Mr Martin refers in his report.
Taking all of the evidence into account, I am satisfied that an amount of $170,000 would represent a reasonable sum to allow the plaintiff to obtain satisfactory accommodation. Of course, stamp duty would have to be paid on the purchase. There was no evidence as to what the amount of stamp duty might be, but I think it would be appropriate to allow a further $5000. In my view then, the plaintiff is entitled to $175,000 to allow her to obtain adequate accommodation. That deals with the first issue.
Turning then to the motor vehicle. The real difference between the parties related to the size of the vehicle. The plaintiff said that living in the country she required a robust 6‑cylinder motor vehicle. The defendants said, given that she was going to live in the Northam township and that it was difficult to see she would be driving any great distance, a rather more modest 4‑cylinder vehicle would be sufficient. Once again, it is not for me to determine what would be a suitable vehicle for the plaintiff. However, taking into account the evidence of the respective parties, I am satisfied that an amount of $30,000 should enable her to obtain a satisfactory vehicle. She may be able to obtain a nominal amount for her present vehicle but for the purposes of this question, that trade‑in value can be put to one side. I am satisfied that $30,000 is an appropriate figure. That deals with the second issue.
The final and by far the most difficult issue is the amount, if any, that the plaintiff should receive to deal with her day‑to‑day needs. It must be said that the plaintiff's case on this issue was hampered by a lack of evidence. There is nowhere in the plaintiff's evidence any reference to her day‑to‑day living expenses. The best that can be said is that she has been receiving a pension and income from her investments. As her capital has not been reduced - nor for that matter, increased - it can be said that her needs are met by the amount of the pension plus her investment income. In other words, the plaintiff requires something in the region of $25,000 per annum to meet her needs - $22,000 from her pension and $3000 from her investments.
Doubtless evidence could have been led as to what sum, prudently invested, could have led to an annual return in the region of $22,000 to the plaintiff for her remaining years. On one view it might be said that on an annualised return of 5 per cent, the plaintiff would require to hold $440,000 on deposit to yield such a return ($440,000 at a return of 5 per cent per annum yields $22,000.) That, of course, ignores the fact that the plaintiff would retain that sum indefinitely. Furthermore, it would require the sale of some of the real estate holdings in the estate to generate the necessary cash. In any event, it was not the way that the plaintiff's case was put.
In her closing submissions counsel for the plaintiff submitted that the plaintiff was entitled to a sum of between $100,000 and $150,000 to make her independent of the social security system and allow for her future needs. Counsel did not, either in her submissions or by reference to the evidence, indicate how she had arrived at that range. Counsel for the defendants pointed out that there was no evidence on the issue and in the circumstances, submitted that no award ought be made. Counsel maintained that the present system, whereby the plaintiff was maintained by the State through a pension was a satisfactory arrangement which should be allowed to continue.
The question of the relevance of the plaintiff's pension entitlement does raise an important point of principle. On the one hand, it was submitted on behalf of the plaintiff, it is inappropriate for the State to maintain a widow in the plaintiff's circumstance. On the other hand, it was submitted by counsel for the defendants that the plaintiff is entitled to a pension and there is no warrant for ignoring that pension when taking into account what is necessary for the proper maintenance of the plaintiff in the future. Neither counsel was able to refer to any authority which dealt conclusively with this issue. Counsel for the defendant did refer to the decision of the New South Wales Court of Appeal in Warland v Reece [2000] NSWCA 380. However, the facts in that case were so different from the facts in this case that I would see that authority as of little relevance.
For my part, I am of the view that where a widow can be adequately provided for from the estate of a deceased husband and where she has an entitlement under the Act, provision should be made for her in such a way as to relieve the burden on the State. That approach regards a pension entitlement as a safety net to be called upon only if circumstances so require. In this case, it is possible to provide adequately for the plaintiff out of the estate without the need for her to rely upon the pension. I acknowledge the conclusion I have reached is a policy decision which, I hope, reflects current community thinking.
Having determined the policy position, there is still a question of what amount the plaintiff should receive. In the end, I have determined that an amount of $125,000 would be appropriate. I acknowledge that my decision on this point is not supported by any evidence led by the parties. Rather, it is an assessment of what I view as reasonable, working with the limited, almost non‑existent, evidence available. If the amount is too little, then that is the fault of the plaintiff or her advisers. They do not lead the appropriate evidence. If the amount is too great, then the defendants suffer. It might well be said that they too could have led evidence on this point. Certainly it is for the plaintiff to make out her case. But the concession was made, and properly made, that the plaintiff was entitled to have provision made for her under the Act. The defendants were at liberty to lead evidence as to what that provision might be and they chose not to do so. While their omission may not be as significant as that of the plaintiff, it was, in my view, an omission nonetheless. That disposes of the third issue.
I am satisfied then that adequate provision from the estate of the deceased would be an amount of $330,000. The parties will need then to calculate precisely what her entitlement would be under the terms of the Will as explained in these reasons. To that entitlement should be added an amount sufficient to bring the payment to be made to the plaintiff up to $330,000. To simplify matters, in framing the order it may be appropriate to simply vary the Will of the deceased to provide to the plaintiff an amount of $330,000. If this is the approach adopted the order will also need to reflect the extinguishment of the life interest and the entitlement to the cash held by the deceased at the date of his death. This may require some negotiation between the parties. In any event, the Will will be varied so as to reflect the plaintiff's entitlement.
That leaves the issue of the ownership of the fob watch. A good deal of the affidavit material is directed at that issue. Much of the cross‑examination of the individuals who gave evidence was also taken up with that issue. I do not intend to canvas the ownership history of the watch. What can be said is that it was definitely the property of Eileen Lawrence, the first wife of the deceased. All parties agreed that on Eileen's death, the watch passed to the deceased. It was his to do with as he wished. The plaintiff says that he gave the watch to her. Thus, she says, it is her property and not part of the estate. Evidence to the contrary is found in the affidavit of the fourth defendant, sworn 4 February 2004. She says at par 6F:
"In regard to Paragraph 31, (of the plaintiff's affidavit dated 15 December 2003), The Plaintiff took part in a conversation between herself, the deceased (my father) and myself, shortly after the Plaintiff and the deceased's wedding concerning the gold fob watch. At this time the deceased made it quite clear to the plaintiff that he had only lent the watch to her, because the plaintiff had said it was her grandmothers. It appears very important to the plaintiff that she claims ownership of the fob watch, which she mistaken to be her grandmother's."
Having heard both the plaintiff and the fourth defendant give their evidence, I am satisfied that the fourth defendant's version of the fact is to be preferred. In other words I am satisfied that the deceased lent the fob watch to the plaintiff, but that it remained his property. Accordingly I am satisfied that it should pass pursuant to the provisions of the deceased's Will and that it is not the property of the plaintiff.
The parties should bring in a minute of orders which reflect these reasons. I will then consider the question of costs.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: LAWRENCE -v- LAWRENCE & ORS [2004] WASC 90 (S)