Lock v Tower Trust Limited & Ors No. Scciv-02-1360

LOCK v TOWER TRUST LIMITED & ORS
[2004] SASC 96
Appeal from a Master

VANSTONE J: This is an appeal from the decision of a Master made in proceedings taken pursuant to the Inheritance (Family Provision) Act 1972 (“the Act”). It comes before me via s 50(2) of the Supreme Court Act 1935 and Supreme Court Rule 106.05(2)(c), the parties having consented to it being dealt with by a single judge.
The testator died on 29 May 2002. He was 87 years of age. He left an estate valued after expenses at just under $200,000, comprising a house property worth about $133,000, cash of about $60,000 and some items of personalty. All the beneficiaries named in the will survived the testator. They were his daughter, whom I shall call “the plaintiff”, his son, whom I shall call “the appellant” and four grandchildren.
Under the terms of the will, which he made on 19 April 1999, the testator left his house property to his grandson Brenton (“the second defendant”), a motor car of very modest value to the plaintiff and the residue to be divided among his two children and the grandchildren other than the second defendant. That meant that the five beneficiaries sharing in the residue could have expected to receive about $10,000 each.
The plaintiff took proceedings pursuant to s 7 of the Act. Prior to the hearing of the matter she accepted an offer filed in court in settlement of her claim. That offer was in the sum of $40,000 together with the motor car.
The appellant counter-claimed against the estate and that claim was heard before the Master on 7 April 2003. The terms of the settlement reached with the plaintiff were made known to the Master. His Honour heard some short evidence from the appellant, but essentially the matter was determined on the affidavits. The grandchildren other than the second defendant did not wish to be heard. The Master decided that an order in favour of the appellant should be made and fixed an amount of $40,000. He made orders designed to preserve for the grandchildren other than the second defendant the amount they were entitled to expect under the will, ensuring that the additional legacies to the plaintiff and appellant were borne first by their foregoing their share of the residue and, beyond that, by the second defendant.
The terms of s 7 of the Act are as follows:
7. (1) Where –
(a)a person has died domiciled in the State or owning real or personal property in the State:
and
(b)by reason of his testamentary dispositions or the operation of the laws of intestacy or both, a person entitled to claim the benefit of this Act is left without adequate provision for his proper maintenance, education or advancement in life,
the Court may in its discretion, upon application by or on behalf of a person so entitled, order that such provision as the Court thinks fit be made out of the estate of the deceased person for the maintenance, education or advancement of the person so entitled.
(2) Notice of an application under subsection (1) of this section shall be served by the applicant on the administrator of the estate of the deceased person, and on such other persons as the Court may direct.
(3) The Court 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 this Act, or for any other reason that the Court thinks sufficient.
(4) The Court may, in making any order under this Act, impose such conditions, restrictions and limitations as it thinks fit.
(5) If, in respect of an application under subsection (1) of this section, it appears to the Court that the matter would be more appropriately determined by proceedings outside the State, the Court may (without limiting the powers conferred on it by the preceding provisions of this section) refuse to make an order under this section or adjourn the hearing of the application for such period as the Court thinks fit.
(6) In making the order the Court may, if it thinks fit, order that the provision shall consist of a lump sum or periodic or other payments or a lump sum and periodic or other payments.
It was not disputed before me that the appellant had been left without adequate provision for his proper maintenance. At the time of the testator’s death the appellant was 58 years of age. He was separated from his wife. After the separation a property settlement was made in the Family Court leaving him with little by way of assets. He had been retrenched in 1997, at which time he had received a redundancy payment and some superannuation but that money was long gone. He lived in rented premises in Mount Gambier and his only income was social security payments. The Master described his relations with the testator as “not the closest of relationships”. It seems that the plaintiff’s relationship with the testator was a much warmer and more attentive one than that of her brother. Nevertheless it is common ground that there was no conduct by the claimant of a disentitling nature.
The appellant’s counsel, Mr Manetta, contended that the learned Master fell into error when he reached the point of considering the extent of the increased provision which the appellant should receive. The Master said:
I consider that [the claimant] should receive increased provision. However, I consider that it should be done in such a way as to preserve the basic wishes of the deceased. He clearly wished to provide benefit for all his grandchildren, and that the greater proportion of his estate should go to his favoured grandson [the second defendant].
Mr Manetta submitted that the use of the word “[h]owever”, which he described as here being employed as a word of limitation, indicated that the Master was prepared to, and thought it proper to allow additional provision for the claimant only to the extent that the testator’s wish to favour the second defendant could be honoured. Mr Manetta suggested that at the point of determining the extent of the extra provision the only relevant factors are the size of the estate and the position of those in need. Once the amounts to be given to those persons are determined, then the testator’s original intention can enter the calculation, so that the question of at whose cost the additional bequest will be can be answered.
In support of his argument, Mr Manetta relied on a passage in the judgment of King CJ in In the Estate of Puckridge, Deceased (1978) 20 SASR 72 at 77. His Honour was there discussing the meaning of the word “proper” as used in s 7 of the Act. He said:
The word “proper” is of considerable importance and means proper in all the circumstances of the case: Bosch v Perpetual Trustee Co Ltd [1938] AC 463; McCosker v McCosker (1957) 97 CLR 566 at 571. The circumstances include the size of the estate, the needs of the applicants, the nearness or remoteness of the applicants’ blood and personal relationship to the deceased, any special claims which the applicants may have on the bounty of the deceased, and competing claims of others.
True it is that King CJ did not specifically include in his list of considerations a reference to the testator’s wishes, but I think it is implicit in his reference to the personal relationships between the testator and the applicants that it was relevant.
That it is relevant is quite clear in the High Court decision of Singer v Berghouse (1994) 181 CLR 201. In discussing a provision in very similar terms, the majority, comprising Mason CJ and Deane and McHugh JJ referred (at 208) to the two-stage process involved. The majority said (at 209-210):
The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant.
A similar approach was taken in the earlier High Court case of Cooper & Anor v Dungan (1976) 9 ALR 93 by Gibbs CJ and Stephen J (in separate judgments) and by Cox J in In re McCaffrey; Hay v Elder’s Trustee & Executor Co Ltd (1982) 29 SASR 582. In the latter case his Honour, in dealing with what he called “the second question”, specifically took into account the testator’s intention, the state of relations between the testator and the applicant and the circumstances of the main beneficiary, as well as those of the applicant.
In the result, I consider that the Master’s approach was consistent with settled authority.
It remains to consider whether, notwithstanding that no error has been made out, the Master’s exercise of discretion should be upset in any event. Mr Manetta suggested that an order of only 20% of this quite small estate was inadequate for a son, one of only two children, in circumstances of need. He put that an appropriate order for provision would have been in the region of $70,000.
It is well established that in applications such as these the testator’s wishes must only be varied to the extent necessary. The Court is not permitted to rewrite the testator’s will in accordance with its own ideas of equity: Hughes v National Trustees, Executors and Agency Co of Australasia Limited (1978-79) 143 CLR 134. In cases where discretionary orders are made pursuant to legislation of this nature and where no error is shown, courts will only disturb an award in a “strong and cogent” case: Sampson v Sampson & Perpetual Executor Trustee and Agency Co (WA) Ltd (1945) 70 CLR 576; Cooper v Dungan (supra).
I have considered all the material placed before the Master. Far from concluding that the order in favour of the plaintiff was outside the range available to him on a proper exercise of his discretion, I consider that it was well within it.
The appeal must be dismissed.

[2004] SASC 96

6 April 2004