Re Monshing (dec'd); Hobley v Stevenson
[2003] VSC 498
•19 December 2003
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6022 of 2003
IN THE MATTER of an Application pursuant to Part IV of the Administration and Probate Act 1958
and
IN THE MATTER of the Will and Codicil and Estate of HORACE REGINALD MONSHING Deceased
| KATHLEEN ANNE WOODS | Plaintiff |
| v | |
| KATHLEEN MARGARET STEVENSON and HORACE REGINALD PETER MONSHING (who are sued as executors of the Estate of HORACE REGINALD MONSHING deceased) | Defendants |
- and -
No. 6625 of 2002
IN THE MATTER of an Application pursuant to Part IV of the Administration and Probate Act 1958
and
IN THE MATTER of the Will and Codicil and Estate of HORACE REGINALD MONSHING Deceased
| HELEN THERESA HOBLEY | Plaintiff |
| v | |
| KATHLEEN MARGARET STEVENSON and HORACE REGINALD PETER MONSHING (who are sued as executors of the Estate of HORACE REGINALD MONSHING deceased) | Defendants |
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JUDGE: | NATHAN J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 2 December 2003 | |
DATE OF JUDGMENT: | 19 December 2003 | |
CASE MAY BE CITED AS: | IMO Monshing (deceased) | |
MEDIUM NEUTRAL CITATION: | [2003] VSC 498 | |
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ADMINISTRATION AND PROBATE ACT Part IV – Farming properties – Deceased’s separation agreement penalised daughters – Moral duties to working sons and needy daughters.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff Woods | Mr R.B. Phillips | Wards |
| For the Plaintiff Hobley | Mr S. Newton | The Field Group |
| For the Defendants | Mr G. Baker | D.A. McKenzie-McHarg Bailey and Halliday |
HIS HONOUR:
The deceased (“Horrie”) was, as are his four children, the descendant of an indentured Chinese gold digger persecuted at the time of the anti‑Chinese racial riots at Beechworth during the gold rushes of the late 1850s. Now his children are fighting over his estate. The irony is bitter because I find as a fact that all of the parties, Horrie, his former wife Margaret Stevenson (“Margaret”), and his four children, Peter, Andrew, Helen and Kathleen, all to be honest, thoroughly decent and hard working people. They have fallen into family disarray because of the unequal distribution of the estate pursuant to the terms of Horrie’s will of 5 August 1996 and its codicil of 21 May 2000.
This application, under the terms of the Administration and Probate Act Part IV, is brought by the two daughters who seek a greater share of Horrie’s estate which passed substantially to his two sons. The vicissitudes of life have not treated his children equally but Horrie appears to have loved them all in equal measure. He was a relatively hard working and honourable person, even if on occasions irascible and unimaginative. All of his children have worked hard, so far as they have been able, throughout their lives but their contribution to his estate has, per force, been unequal. I give first an overview of the estate and then come, in detail, to the disputed claims.
Horrie died unexpectedly from asthma and/or heart attack on 14 May 2001. He was 65. The total value of his estate was $1.4M in rounded terms. Peter, the eldest son and executor, received 49% of the estate, Andrew 31.5%, Helen 10% and Kathleen, or rather she and her children together, received 8.5%. The estate’s main assets were three farming properties, the largest and most productive which I shall call the Ovens went to Peter. The smaller, but still productive farm, and which I shall call Tarrawingee, went to Andrew. Helen and Kathleen shared a third property, which I shall call Merriang, the smallest and least productive farm subject to a life interest in a house block thereon in favour of their mother, Margaret. There was a couple of smaller town properties, substantial amounts of farming equipment and a valuable herd of beef stock.
Now to the details. Horrie married Margaret after meeting her at a boarding house in the city run by Margaret’s mother, where he had been a lodger. They returned to Myrtleford and worked on Horrie’s father’s farm, the Ovens property. The marriage produced the four children in the following order. Firstly, Kathleen Woods, one of the applicants, and she was born on 27 December 1958. She is now 44, has been married three times and has three children, Kate, Rebecca and Claire. She is presently married to Noel Woods and they live at Cabbage Tree in East Gippsland. Kathleen is unwell. After her father’s death she underwent a total hysterectomy but before that her health was, at best, indifferent. Nevertheless, she has been employed by the local shire and at the time of her father’s death was receiving approximately $400 per week. Her husband has an interest in a property at Cabbage Tree which is subject to a partnership dispute. His interest appears to be worth approximately $100,000. On the Cabbage Tree property are 37 heifers which Kathleen inherited from her father. Kathleen, as the eldest daughter, took on the role of family carer when her mother separated from her father in or about 1975. A house was built in a small paddock adjacent to the family home and from this property Kathleen cared for her grandfather and then her father. She was involved in helping running the family farming business until 1995 when she moved from Myrtleford to East Gippsland with her present husband.
The second child to be born was Peter, who is the firstnamed defendant. Although given his father’s name, he is universally known as Peter and was born on 15 January 1960. He has lived all his life in the Myrtleford district, mostly on the Ovens property, although he has worked off-farm most of that time. I was impressed with the directness of his evidence and I accept the fact that he used plant and equipment he owned to improve the value of all three properties. As a just reward for all his efforts he is now a man of some substance. He and his wife have two children.
The third child is Helen Hobley. She was born on 10 February 1962. By her first husband she has four children but none by her second who is now in gaol. His offence involved sexual interference with some of her children of her first marriage. His imprisonment post dates Horrie’s death. However, she and Mr Hobley had an oyster farm at Wonboyne in New South Wales which was afflicted by algae bloom and is now almost valueless. She lived at Myrtleford until October of 1994. She is now in receipt of a disability pension. She suffers from both physical and nervous conditions. She is currently living with her sister.
The fourth child, Andrew, was born on 6 April 1968. He is married and has three children. When his parents separated he went to South Australia and lived with his mother but returned to the Tarrawingee property in 1990. He has worked that property ever since, but he too, has been obliged to work off‑farm to supplement his income.
The will was carefully drawn. It contains some minor legacies to grandchildren and proper disposal of any residue, and it contains very careful division of the deceased’s estate between his children. The distribution under the Will is, very largely, the product of an agreement concluded between Horrie and Margaret shortly after the separation in 1975. It is not a matter of contest that in response to Margaret agreeing to forego any claims for maintenance against Horrie they agreed that he would divide the then three farming properties as follows: Ovens to Peter, Tarrawingee to Andrew, and Merriang between the two daughters Helen and Kathleen. As Margaret said from the witness box, she abided by the terms of the agreement and she now expects her children to do likewise. A major thrust of the plaintiffs’ submissions is to contend that a separation agreement entered into between mother and father 26 years ago cannot dictate the terms by which a wise and just testator later disposes of his property. The agreement could not have foreseen the varying degrees of need and comfort of the children, nor indeed the varying degrees of work and effort they expended in safeguarding the testator’s property and improving its value during his lifetime. I consider this submission compelling. The terms of the agreement illustrate that it was the interest of the mother and father to maintain the family farming properties within the family. But in so doing, they agreed to favour the sons over the daughters, it would seem regardless of the needs and contributions of either. Part of the philosophy underpinning the Separation Agreement was that the sons should inherit the land to keep the family name alive, while the daughters would marry and their husbands care for them. Then at the time of his death the deceased knew that had not happened. The marriage of the daughter had failed and they were both in very straightened financial circumstances. I consider that a wise and just testator must and should have regard to the various claims of his progeny at the time of making the will, rather than seek to enforce a separation agreement made decades before and by which he has prospered in the intervening years. Margaret, by not forcing a settlement at the time of separation and divorce, did maintain the farming properties in the hands of the family. Although Horrie may have contributed to Andrew’s support whilst he lived with her, he does not appear to have contributed to Margaret’s support and to that extent, together with the fact that he was not obliged to provide her with a capital sum, the estate is worth what it is today.[1]
[1]See Collicoat v McMillan [1999] 3 VR 803 at 819, 822-3 for a discussion of the moral claims of a daughter vis a vis sons.
I have no doubt that each of the children contributed as much as they could have done to the farming enterprise whilst they were living at Myrtleford at various times both as children and adults. I am satisfied that Peter and Andrew worked assiduously to maintain and improve Ovens and Tarrawingee respectively, and they also worked at Merriang. However, the latter property, by virtue of the life interest in the house and curtilage in favour of Margaret is now a wasting. It has little appeal to a potential vendor and is deteriorating because it is not being farmed. I am sure the testator did not foresee that by granting a life interest in the house in Merriang to Margaret he thereby diminished the value of the property as a whole. Margaret is advantaged by obtaining the rents therefrom. A benefit no party contends should be disturbed.
My conclusion is that a wise and just testator in 1995 would, could and should have directed his mind to the relative claims upon his bounty by those persons then entitled to such a claim. Both daughters endured debilitating and unsatisfactory first marriages. Both are now impoverished and almost without assets. Both sons have married only once and both have young families. Both have worked inordinately hard and long, but both now have an asset base derived from their father’s estate. They should not be obliged to surrender those bases in favour of their sisters but they should share more equitably some of their other inherited wealth. In some measure he has failed to do so although in some measure he did. I am satisfied I should not disturb the life interest in the Merriang house to Margaret. It is plain that she and Horrie maintained a civil relationship despite their separation and in fact went on holiday together shortly before his death. However, by disposing of his real and personal estate in the portions whereby more than four‑fifths are assigned to the two sons and less than one‑fifth to the two daughters, is an affront to wisdom and justice. However, I do not propose to order that the gifts of the Ovens and Tarrawingee be disturbed. I consider the work and contribution made by the two sons to sustaining and improving those properties should be recognised in accordance with the testator’s wishes. However, that does leave available for redistribution the land in the Myrtleford township, upon which one house is constructed and was, under the terms of the will, devised to Peter. Helen was given an interest in the vacant block adjoining the house block.
The affidavit of Peter Monshing relating to the financial position of the estate sworn on 26 September 2003 refers to the farming equipment and cattle which passed to him then being on the Ovens property at the time of death. Similarly, it relates to plant and equipment on Tarrawingee being bequeathed to Peter or as the will also devised, the plant and livestock then on Merriang going to the daughters. As at the time of swearing the affidavit the cattle assigned to Peter was worth approximately $36,000 and those to Andrew worth $60,000. One hundred and seventeen heifers were on Tarrawingee and 65 on Ovens at the time of death. Kathleen and Helen received 37 heifers each being the stock on Merriang at the time of death.
I note from the affidavit that the estate is in funds in the sum of approximately $60,000 represented largely by moneys in the Commonwealth Bank and a refund of overpayment of the gravestone.
Having concluded that the deceased failed to make adequate provision for his daughters’ maintenance and support, after balancing the factors which a wise and just testator would take in to account, I conclude that the estate should be apportioned in the following percentages. To Peter, 40%, which is a reduction of approximately one-fifth of his present entitlement. The codicil was entered into as an arrangement to defeat any claims for matrimonial property which could have been made by Kathleen’s second husband, Nevan, at the time of their divorce. I am satisfied the codicil was entered into by the deceased at Kathleen’s request for this purpose and that he was mightily offended by being asked to do so. Nevertheless, in deference to his love for his daughter he complied. I should prevent Kathleen’s interests from claiming twice upon the testator’s bounty. To Andrew, 25%, which is also a reduction of about one-fifth of his present entitlement. To Kathleen, 17.5%, which is an increase of 100% in relation to her present entitlement, and similarly, 17.5% to Helen, which is a 75% increase. I include the bequests to Kathleen’s children made pursuant to the codicil.
In this way, the devises to the two sons of Ovens and Tarrawingee can remain intact. That respects the wishes of the testator and reflects their contribution to the estate. Peter made a whole of life commitment to the Ovens property, and Andrew a similar commitment to Tarrawingee following his return from South Australia. The daughters are in need of cash rather than property. This need could probably be met by the sale of the town property in Myrtleford valued at $60,000. Moreover, the estate presently holds significant cash reserves and these too could be applied, at least in part, to acquit the daughters’ share. Moreover, as both Andrew and Peter received the bulk of the cattle herd, the progeny of which may well be on their properties, they could put themselves into a liquid position to meet the obligations of the estate to the daughters.
I shall hear arguments as to costs.
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