Lord v Lord

[2003] TASSC 99

[2003] TASSC 99

CITATION:              Lord v Lord [2003] TASSC 99

PARTIES:  LORD, Ivy Doreen

v
LORD, Mark David

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  M259/2002
DELIVERED ON:  8 October 2003
DELIVERED AT:  Hobart
HEARING DATE:  29 July 2003
JUDGMENT OF:  Cox CJ

CATCHWORDS:

Succession – Family provision and maintenance – Failure by testator to make sufficient provision for applicant – Duty of testator – Duty to spouse – Small estate – Whether right of residence during widowhood adequate – Whether conversion to fee simple proper provision to be made.

Testator's Family Maintenance Act 1912 (Tas).
Singer v Berghouse (1994) 181 CLR 201, followed.
Aust Dig Succession [307]

REPRESENTATION:

Counsel:
             Applicant:  C M Schokman
             Respondent:  M E Lovett
Solicitors:
             Applicant:  Piggott Wood & Baker
             Respondent:  Hunt & Hunt

Judgment  Number:  [2003] TASSC 99
Number of paragraphs:  13

Serial No 99/2003
File No M259/2002

IVY DOREEN LORD v MARK DAVID LORD

REASONS FOR JUDGMENT  COX CJ

8 October 2003

1. This is an application by a widow pursuant to the Testator's Family Maintenance Act 1912 for provision to be made for her out of the estate of her late husband. By his will dated 30 April 2002, the testator revoked all prior wills and testamentary dispositions and appointed his son, the respondent, trustee of his estate. He gave to the applicant a right to reside in his home while she remained unmarried, but subject to an obligation to keep the same in good repair and insured in the name of the trustee. She was also required to pay all rates and taxes levied on the house. To his said son he gave all his tools and any boat and fishing gear owned by him at his death and to his daughter any motor vehicle of which he was possessed at the time of his death. The balance of the estate was to be held on trust after payment of any expenses, duties and the like for those of his son and daughter who survived him. In the event of either predeceasing him but survived by children of their own, there was a gift over in favour of such child or children of the share of the deceased parent. The testaror died on 5 May 2002, survived by his widow and two children.

1. The estate is a small one.  It consists of a 40 year old weatherboard house at Cremorne in Tasmania valued at $148,000 and a small amount of personal property.  The weatherboards of the house are in fair condition except for the weather side where the paint is peeling and maintenance is required.  The main corrugated galvanised iron tank is leaking and requires replacement at an estimated cost of $800.  Internally, the property presents in a neat and tidy condition, although the decoration is becoming dated.  The valuer opines that:

"Kitchen outfit would appear fairly original with no obvious recent upgrading.  The bathroom was upgraded with a new shower bay and vanity unit approximately ten years ago.  Floors in several areas are uneven and squeaked which may indicate some problems with the subfloor framing.  There is also water damage to the wallpaper in the second bedroom." 

In addition, the household contents were sworn for probate purposes at a value of $1,000, there are a motor vehicle worth $5,000, a boat worth $2,000, tools to the value of $1,000 and a bank account containing $5,786.  Liabilities owed by the estate were a telephone account of $131 and municipal rates of $543.

1. The applicant widow married the testator in 1979.  It was her second marriage and his third.  By her first marriage, she had three children, while the two children named in the will were born of the testator's second marriage in 1959 in the case of the daughter, and in 1966 in the case of the son.  The applicant had married her first husband in 1947 and they separated in 1977 and were divorced.  She had known the testator since she was 14 years old and had expectations of marrying him, but at the end of the Second World War he advised her that he had married another woman.  Shortly before the applicant's marriage to the testator, she had moved from Hobart to Sydney where he lived.  She missed Tasmania and returned, renting a property in the northern suburbs.  In 1979, the testator moved to Tasmania and they married.  The property at Cremorne was purchased for $32,000, all of which was provided by the testator from the sale of property in Sydney.  He also provided most of the furniture and other contents.  The applicant received from her first husband about $15,000 in the financial settlement after her divorce.  She spent about $400 on tools for the testator, purchased linen, crockery and cutlery for their home, made gifts of $100 each to her three children and her husband's two children and used the balance to live on.  She purchased some linoleum and curtains for the house.

1. The applicant and the testator lived together as man and wife until his death, although it appears that the relationship was not a very warm one.  The testator contributed $40 per week, increasing to $45 at the time of his death, for his share of the food and other day-to-day expenses.  If the applicant asked him to purchase bread or milk from the shop, he would deduct the cost from his weekly allowance to her.  She was expected to contribute half the cost of the telephone and electricity.  He paid rates and insurance on the house.  For the first few years of their marriage, he carried out maintenance on the home, but this eventually ceased.  The testator worked for a short time on moving to Hobart.  According to the applicant's affidavit, she lived on unemployment benefits and her savings until he became eligible for a Veterans' Affairs pension which at the time of his death amounted to $770.65 per fortnight payable to him and $483.22 per fortnight payable to her.  Since his death, the applicant has received a War Widow's Pension of $577.50 per fortnight and a lump sum bereavement payment of $5,716.51.  She is also entitled to full medical and hospital treament through the Department of Veterans' Affairs.  The estate was entitled to a funeral benefit.

1. The applicant said in evidence that the testator was secretive concerning his financial affairs and that although their relationship was one of friendship, she felt that he treated her as a housekeeper.  It has not been suggested that she was anything other than a caring and devoted wife who maintained a good relationship with her two step-children.  Indeed, the respondent swore in an affidavit tendered in evidence that he frequently travelled to Tasmania to visit his father and the applicant, that they always had a good relationship, that he loved her like his mother and that his sister was also very close to the applicant.

1. The testator enjoyed fishing and had a boat which he sold not long before his death for over $20,000 before investing in another, which was valued at $2,000.  He gave his son $20,000 from the proceeds of the sale of the first boat.  In addition, he gave each of his two children $5,000 to recompense them for their expenses of visiting him from their homes in New South Wales during his last illness.  There is virtually no evidence before me as to the circumstances of the testator's two children.  Both live in New South Wales but beyond the fact that the respondent is a computer operations manager by occupation, nothing is known of his income, assets or commitments, while still less has been placed before me as to his sister's situation.  In the absence of evidence of any hardship, I can only proceed on the basis that neither has any special claim upon the estate by virtue of his or her material circumstances.

1. Clearly enough the testator had considerable affection for his two children and wanted to preserve the bulk of his estate for them.  As early as 1982 he had made similar provision for them, leaving his widow only a right of residence in his home at the time of his death.  It is understandable that a testator would be reluctant to place his widow's children by another marriage in a position of advantage superior to his own children by an earlier marriage by leaving her assets greater than her needs and which would be likely to pass to her children on her death.  Nevertheless, his primary obligation was to his widow and the crucial question in this case is whether or not, having regard to the pension rights and rights to medical and hospital treatment accruing to her by virtue of his war service and her own limited capital (I find she has savings of approximately $2,500), adequate provision has been made for her proper maintenance and support by his Will.

1. I think there can be little doubt that the provision only of a right of residence in the house she was obliged to insure, keep adequately maintained and the rates of which she had to meet, was inadequate in all the circumstances.  Though her present fortnightly expenditure is remarkably modest, the applicant has virtually no resources to meet unexpected eventualities.  She is presently 74 years old and may well be forced through age and failing health to give up her right of residence in the beachside property purchased by the testator.  If that were to come to pass, she would have no means of purchasing an alternative residence or of putting up any capital sum necessary to gain entry into a suitable aged care facility. 

1. In Golosky v Golosky (unreported New South Wales Court of Appeal 5 October 1993), Kirby P referred to some of the principles relevant to a widow's application under similar legislation.  At 10, he said:

"It has been said that in the absence of special circumstances, it will normally be the duty of a testator to ensure that a spouse (or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to.  To the extent that the assets available to the deceased will permit such a course, it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies."

At 11, he continued:

"A mere right of residence will usually be an unsatisfactory method of providing for a spouse's accommodation to fulfil the foregoing presupposition.  This is because a spouse may be compelled by sickness, age, urgent supervening necessity or otherwise, with good reason, to leave the residence the spouse provided and will then be left without the kind of protection which is normally expected will be provided by a testator who is both wise and just."

In the absence of any power of sale and reinvestment in other premises, such as would be provided by the Settled Land Act 1884 were this a full life tenancy, and furthermore in the absence of the provision of any fund to meet rates, insurance and repairs on the property, I find that the testator's provision of a mere right of residence during widowhood without even a gift of the household contents owned by him was inadequate for the applicant's proper maintenance and support after his death.

1. The determination of an application such as this involves a two stage process.  As Mason CJ, Deane and McHugh JJ said in Singer v Berghouse (1994) 181 CLR 201 at 208:

"The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life.  The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant."

At 209 – 210, their Honours continued:

"The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'?  The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co (1938) AC at 476.). 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."

1. In this case, although both parties had been previously married and had separate families, the marriage subsisted without apparent disharmony for over 20 years.  The testator contributed the initial cost of the family home and helped to maintain it, but the applicant made some financial contributions (modest, but not insignificant having regard to her means) and made other contributions of a domestic nature to the smooth running of the home and the comfort of her husband.  She maintained a friendly relationship with her step-children which must have been a source of satisfaction to the testator.  The estate is relatively small, the principal asset being the home.  Although the testator was anxious to preserve the bulk of his estate for his own children and their relationship with him was one in which, were his resources adequate, they could ultimately expect a not inconsiderable benefit therein, it has not been shown that either had any financial dependency upon him.  Furthermore, the respondent received a cash payment of $20,000 from his father not long before the latter's death.  On the other hand, the applicant has virtually no resources.  I take into account the fact that she has a War Widow's Pension and free medical and hospital cover; but she clearly needs a roof over her head and the means of maintaining it, or any substituted one, and of meeting outgoings on it.  Reliance only on the pension for those purposes would not be sufficient, in my view, "to free the mind from any reasonable fear of insufficiency as age increases and health and strength gradually fail" (an observation relevant to sufficiency propounded by Cleland J in Re Harris [1936] SASR 497 at 501 and approved by Williams and Fullagar JJ in Worladge & Anor v Doddridge & Ors (1957) 97 CLR 1 at 12).

1. In White v Barron & Anor (1979) 144 CLR 431, Mason J said at 444:

"… I would reject the view expressed by Kitto J in Worladge v Doddridge (supra) that in most cases 'the maintenance order for a widow should be confined to continuance of widowhood'. Community attitudes have so altered that it is now generally accepted that a widow should be maintained for life, rather than during widowhood. Nor do I subscribe to the proposition that an order in favour of a widow should necessarily be confined to an income provision. Circumstances are infinite in their variety and orders must be moulded to the circumstances of the particular case in order to ensure that the provision which is made is adequate for the proper maintenance of the widow, where that is possible. "

I bear in mind the fact that he then continued:

"A capital provision should only be awarded to a widow when it appears that this is the fairest means of securing her proper maintenance. However, the provision of a large capital sum for a widow who is not young, may, in the event of her early death, result in a substantial benefit to her relatives, contrary to the wishes of the testator, when a benefit of another kind would have afforded an adequate safeguard to her personally, without leaving her in a position in which she could benefit her relatives from the proceeds of the legacy."

The difficulty in the present circumstances is that once probate costs have been met and any costs of the present application, there will be so little left that there are unlikely to be sufficient funds from which to meet outgoings on the house and that provision by way of a life interest in the house will still not be adequate.  In the circumstances, I think the fairest way of securing the applicant's proper maintenance is the grant in fee simple of the house and land to her, together with the domestic contents thereof, while preserving the specific legacies of the tools, boat and fishing gear in favour of the testator's son and of the motor vehicle in favour of his daughter, together with the gift of residue in their favour.

1. Accordingly, the application is granted and I order that provision be made out of the testator's estate by the grant to the applicant of an estate in fee simple of the house at Cremorne and the bequest of the household contents thereof belonging to the testator other than some items of sentimental value to his children described in the respondent's affidavit as "Tiger Wall Hanging, Whistling Man, Coffee Table and Happy Man (wood carving)".  I reserve leave to speak to the minutes of the order and direct that a certified copy of the order, when settled, be made upon the probate of the will of the testator.