Reynolds v Stanley

[2004] NSWSC 685

CITATION:	Reynolds v Stanley and Anor [2004] NSWSC 685
HEARING DATE(S):	Tuesday 27 July 2004
JUDGMENT DATE:	9 August 2004
JURISDICTION:	Equity
JUDGMENT OF:	Acting Master Berecry at 1
DECISION:	See paragraph 74
CATCHWORDS:	FAMILY PROVISION -- widow -- long and happy marriage -- right to reside -- small pecunary legacy -- inadequate provision -- competing needs -- beneficiary with small income but valuable realty -- widow with no realty but large income -- no equilibrium
LEGISLATION CITED:	Family Provision Act 1982
CASES CITED:	Bladwell v Davies [2004] NSWCA 170 Elliott v Elliott, unreported, Powell J NSWSC, 7 March 1991 Golosky v Golosky, unreported, NSWCA, 5 October 1998 Harvey v Delaney [2003] NSWSC 589 Luciano v Rosenblum (1985) 2 NSWLR 65 Marshall v Carruthers [2002] NSWCA 47 O'Loughlin v Low [2002] NSWSC 222 Singer v Berghouse (1994) 181 CLR 201
PARTIES :	Lorraine Eve Reynolds - plaintiff Judith Mary Stanley - first defendant Christine Harrison - second defendant
FILE NUMBER(S):	SC 3928/03
COUNSEL:	Blackburn - Hart for the plaintiff Ellison for the defendants
SOLICITORS:	Fisher Chapman Solicitors for the plaintiff Mark Stenberg & Associates Solicitors for the defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Acting Master Berecry

Monday 9 August 2004

3928/03 Lorraine Eve Reynolds v Judith Mary Stanley and Anor

JUDGMENT

1 MASTER: On 22 July 2003 the plaintiff filed a summons seeking an order for her maintenance and advancement out of the estate of the late Raymond George Reynolds pursuant to s 7 of the Family Provision Act 1982 (the Act).

2 The deceased died on 8 April 2002. The application was brought within time.

Background

3 The plaintiff and the deceased married on 20 December 1974. It was the second marriage for the deceased and it would appear to be the first marriage of the plaintiff. The deceased was a judge of the Supreme Court of New South Wales and the plaintiff was his associate.

4 Prior to the marriage the deceased lived in what was formerly the family home at Turramurra. The plaintiff resided in a unit owned by her in Elizabeth Bay. Both sold their respective properties prior to the marriage. The deceased used the proceeds of sale from the Turramurra property to purchase a terrace at Paddington. The plaintiff received $20,000.00 from the proceeds of sale of her Elizabeth Bay unit. She placed those funds in a bank account and used them for investment purposes.

5 Throughout the course of the marriage both the plaintiff and the deceased maintained separate bank accounts and at no stage did they hold joint accounts.

6 In 1977 the Paddington property was sold and the deceased purchased 58 John Street, Woollahra. On that site the present dwelling was constructed. They moved into the Woollahra property in 1979. The deceased provided all the funds for the construction of the dwelling on the property.

7 In 1983 the deceased retired as a judge of the Court of Appeal, however, he acted as an arbitrator and also did consultancy work thereafter. It is unclear how long he continued to act as an arbitrator or consultant. During this period the plaintiff provided secretarial services to him without charge to the deceased. She also retired in 1983.

8 During the marriage they made several overseas trips. Most of these trips were for holidays, but on occasions in his capacity as a consultant the deceased made overseas trips in the company of the plaintiff.

9 There were two children of the deceased’s first marriage. Those children are the defendants in these proceedings.

10 The house constructed at Woollahra was a two bedroom home with a galley kitchen and a combine lounge room/dining area and small courtyards. The dimensions of the block of land are 31 feet by 120 feet.

11 The plaintiff still does the gardening although she does get in paid assistance for some of the work. The plaintiff’s evidence is that she is able to maintain the house and to perform household tasks and is active in the garden. Exhibit A, the report of Dr Slezak, mentions that the plaintiff walks up to four kilometres a day. He was not cross examined in relation to this statement, nor was the plaintiff cross examined on it.

12 The deceased paid for the construction of the dwelling and paid subsequent maintenance of the property, together with rates and insurance premiums.

13 At the time the deceased died he and the plaintiff had been married for approximately 28 years. In 1999 he had a heavy fall which required hospitalisation. As a result of that fall the deceased required care for the remainder of his life. The plaintiff’s evidence was that she provided that care over the last three years of his life. There is not an issue between the parties concerning the quality of the marriage. The evidence is that it was a happy marriage, in the plaintiff’s words they ‘were completely devoted and very loving to each other.’ The first defendant, Judith Stanley, in her affidavit of 16 October 2003 at paragraph 18 states:

“The deceased was a generous husband, cared for the plaintiff and was a devoted and loyal husband.”

There is evidence that they did things as a couple and were good companions for each other.

14 The plaintiff’s assets are as follows:

Furniture, contents and effects. Estimated value $10,000.00
Motor vehicle. Estimated value $18,000.00
Bank accounts $169,000.00
Macquarie Investment Management Fund $64,021.05
Shares in David Jones Limited $3,720.00
(2000 shares @ $1.86)
Total (approximately) $265,000.00

15 The plaintiff receives income from three sources per annum:

Judges’ widow’s pension $77,688.00
Interest on bank accounts $9,254.00
Department of Veteran Affairs pension $12,870.00
Total $99,812.00

16 It will be seen from the above figures that the plaintiff has income before tax of just under $2,000.00 a week and has expenses of approximately $890.00 a week. She, therefore, has a surplus of income over expenditure. The plaintiff has no debts. It is not suggested that the plaintiff is not able to support herself financially.

The position of the defendants

Judith Stanley

17 Judith Stanley is the elder daughter of the deceased she is aged 63 and is married. There are two children of the marriage both of whom are adults and one of whom still resides at home with his child. Her husband is a hospital scientist. The combined income of the first defendant and her husband is approximately $75,000.00. Their annual expenditure is approximately $31,000.00. They have the following assets:

Judith Stanley
Home at Turramurra. Estimated value $575,000.00

Money in the bank $46,314.28
Shares $50,235.73
Superannuation entitlements $3,796.54
Total $675,346.55

Leonard Stanley
Money in the bank $14,373.97
House at Crescent Head $230,000.00
Furniture and effects $7,000.00
Shares $43,193.39
Motor vehicle $4,000.00
Superannuation entitlements (2 policies) $430,000.00
Total $690,009.36

18 The first defendant and her husband have combined assets of approximately $1,365,000.00. Mr Stanley intends to retire within the next two to three years and at that time his superannuation entitlements will mature.

19 The deceased made gifts to the first defendant during the 1990’s. In total these gifts come to approximately $46,600.00. Of that sum $40,000.00 was used by the first defendant to purchase a property at Crescent Head in 1998, that property is set out in the assets of her husband above. The remaining gifts provided by the deceased were in the nature of birthday presents.

20 The first defendant does not have any current need. Her evidence is that the income earned from the residuary estate is paid to the second defendant, Christine Harrison. The first defendant has elected to give her entitlement to her sister because she is on a disability pension and has a low income. She does not wish to disturb the life estate and does not require the property to be sold until after the plaintiff vacates it. Her evidence is that at some stage in the future she would like to carry out improvements to the family home or to move to alternate accommodation. She gives evidence in relation to matters that need to be attended to, including repainting the property and repairing the veranda. Her evidence is also that she would like to build an extension to provide self-contained accommodation for her son and would like to be in a position to travel within Australia and assist her children.

Christine Harrison

21 Christine Harrison is the younger daughter of the deceased and the second defendant. She is currently aged 59 years, is divorced and the recipient of a disability pension. She attended Sydney University and obtained a degree in pharmacy. She worked as a pharmacist at St Vincent’s Hospital until 1996.

22 However, in 1985 she had a stroke. The stroke left her with partial paralysis and it was two years before she was able to return to work. Unfortunately, in 1987 she suffered an epileptic fit, which was a side effect of the stroke, and had a second bout of endocarditis, the first bout was in 1985 prior to suffering a stroke that year. In 1996 she had a heart attack and underwent emergency surgery for repair of the mitral valve to her heart. In 2002 she suffered a further stroke and underwent open heart surgery. Although since then her health has stabilised she has continued to have health problems, including a tumour in one of her right parathyroid glands, skin cancer requiring surgery on her face, a skin condition around her mouth and a rare eye condition called ligneous conjunctivitis and in March 2003 underwent surgery to her right eye for the removal of a growth which proved to be benign. Annexure CH2 to her affidavit of 16 October 2003 is a report from Dr Graham Campbell setting out a summary of the past history of the second defendant.

“ Past history:
1985 CVA (cerebrovascular accident) due to embolus fro heart valve
1985 Endocarditis – subacute bacterial
1987 Epilepsy due to CVA
1996 CCF, mitral valve surgery
2000 R parathyroid gland removed, benign
17 May 2002 CCF
22 May 2002 Mitral valve replacement
8 June 2002 Warfarin treatment
14 February2003 Excise cyst R eye limbic region”

23 The second defendant’s assets are as follows:

House at Arcadia. Estimated value $1,000,000.00
Furniture and effects $10,000.00
Motor vehicle $2,000.00
Savings $31,567.79
Total $1,043,567.79

24 Her income is approximately $12,500.00 annually, made up of a disability pension of $11,300 from Centrelink, together with income earned from money in her bank account of approximately $1,200.00. During the last three years of the deceased’s life he assisted the second defendant by giving her, as a gift, an amount of $400.00 each month. She has not received that since his death. However, she has received and amount of approximately $10,000.00 by way of interest on the residuary estate since the date of death. As earlier mentioned in this judgment her sister, the first defendant, has during the last two years gifted her entitlement to the income from the capital to the second defendant because of her financial position.

25 The second defendant received a gift from the deceased in 1998 in the sum of $40,000.00. From this sum the second defendant carried out improvements on her property and purchased certain furniture and used the balance to assist her in respect of her day to day living expenses. In 1993 the deceased gave by way of gift to the second defendant the sum of $15,000.00. This gift was given at about the time the second defendant purchased her current property.

26 The second defendant’s expenditure is approximately $20,000.00 per annum. In the two years since the death of the deceased she has received income totalling approximately $34,000.00. However, her expenses have been approximately $40,000.00. Therefore there is a shortfall of approximately $6,000.00.

27 In her affidavit of 16 October 2003 she has set out the following:

“19. I had intended to use the moneys presently held in the residuary estate of the deceased to assist with my day to day living expenses. I had hoped to retain a capital fund from which I could earn income and only use the capital in case of necessity.
20. On the termination of the life estate of the plaintiff I would have anticipated that the estate [sic] real estate at 58 John Street, Woollahra, would be sold. As to when this might occur is an unknown factor. If I did have more money at my disposal I would certainly use some of it to carry repairs to my house at Arcadia. The back steps and the kitchen steps need replacing and require handrails, the house needs repainting inside and out, the cover slips on the external fibro cladding need replacing, the floors need sanding and sealing, the tiles in bathroom need replacing and my present refrigerator is very old. Further the fencing around my property needs upgrading. I would also purchase a new car. Otherwise I would set aside a fund to make my future more secure, and my lifestyle more satisfactory.”

28 It is clear that the second defendant does have needs all of which she cannot meet on her present income. However, her evidence is that those needs will be addressed if and when she receives her share of the proceeds of sale of the Woollahra property. In that context it cannot be said that she has an immediate need.

Current value of the estate’s assets

29 The current value of the residuary estate, which consists of bank accounts and investments as at 28 June 2004, was $145,332.38.

The will

30 The deceased made his will on 17 April 1978. Under the terms of the will the plaintiff received certain chattels in accordance with Clause 3. Clause 4 makes, inter alia, the following provisions:

“ (a) I GIVE the following directions to my Executrices concerning the property that constitutes the matrimonial home of my wife and myself at my death which I refer to as “the home”.
(i) my wife may live in the home as long as she wishes provided she pays the rates and taxes levied on the home, the premiums on any insurance policies taken out by my Executrices on the home and keep it in reasonable repair;
(ii) until my wife has, in the opinion of my Executrices, ceased to live in the home permanently or to comply with the conditions of her right of occupation, it shall not be sold without her consent.
(b) At the written request of my wife my Executrices may agree to sell the home and apply the whole or such part of the moneys as may be required to buy another house, home unit or other residence chosen by my wife to which residence the same provisions as those expressed in the last sub-clause shall apply.”

31 On 21 June 1997 the deceased made a codicil to his will. In the codicil he provided that there be a legacy given to the plaintiff in the sum of $25,000.00. In all other respects he confirmed his will.

The plaintiff’s health

32 There were tendered three bundles of documents consisting of medical reports. Exhibit A, two medical reports from Dr Peter Slezak dated 23 December 2003 and 17 June 2004. Exhibit 1, two reports from Dr Michael McGrath dated 30 March 2004 and 23 July 2004. Exhibit C, three reports from Dr Paul Darveniza dated 30 March 2001, 25 May 2002 and 24 September 2002.

33 In relation to the reports by Dr Darveniza objection was taken by counsel for the plaintiff on the basis that the doctor should have been made available for cross-examination. It was submitted that as the doctor was not made available for cross-examination that I should apply Jones v Dunkell to any evidence that he may have been able to give and that that evidence would not have assisted the defendant.

34 Both Dr Slezak and Dr McGrath were cross-examined on their reports. The main purpose for calling medical evidence was to establish the life expectancy of the plaintiff. Dr Slezak, in his report of 23 December 2003, makes reference to a right renal lesion with the possibility of a tumour developing to that kidney. He also refers to the plaintiff’s hypertension and to an operation carried out sometime previously described as a femoral angioplasty. This is an operation performed for the purposes of opening up arteries. He raises the question concerning a possible history of symptomatic reclusive peripheral vascular disease that the plaintiff may have. He acknowledges that at the time of the report the plaintiff’s medical condition appeared to be stable. Based on the plaintiff’s medical history, with reference to the underlying reclusive vascular disease, he assesses the plaintiff’s life expectancy to be a further three to four years.

35 Dr McGrath, in his report of 30 March 2004, disagrees with Dr Slezak’s assessment of the plaintiff’s life expectancy. At paragraph three of his report he says at follows:

“Patients with peripheral arterial disease, even in the absence of a history of myocardial infarction or ischaemic stroke, have approximately the same relative risk of death from cardiovascular causes as do patients with a history of coronary or cerebrovascular disease. However the literature on this observation would suggest a better prognosis for Mrs Reynolds’ life expectancy that Dr Slezak’s conclusion of a ‘further 3 – 4 Years’.”

In his opinion, Dr McGrath is of a view that the plaintiff’s life expectancy would be ten years.

36 Dr Slezak, in his report of 17 June, states that he would not dispute the assessment given by Dr McGrath in respect to the life expectancy of patients with peripheral artery disease. However, in his view, the other medical conditions that he identified and mentioned in the earlier report are still matters to take into account when determining the possible life expectancy of the plaintiff.

37 The final report of Dr McGrath, dated 23 July 2004, he formed the opinion that as the solid lesion on the plaintiff’s right kidney had not expanded, it is unlikely that this abnormality would have any significant impact on the plaintiff’s life expectancy. In cross-examination Dr Slezak conceded that, having regard to opinion expressed by Dr McGrath in his report of 23 July 2004, his life expectancy estimate should be increased by two years. Therefore, on his estimate, the plaintiff’s current life expectancy is somewhere between five to six years. However, he also conceded that in estimating the plaintiff’s life expectancy he was conservative in that estimate. The inference being that perhaps the five to six years that he says is the current life expectancy of the plaintiff might in fact be something somewhat longer. However, he was not prepared to put another figure on the plaintiff’s life expectancy. Therefore, at best is can be said that there is a possibility that the plaintiff’s life expectancy, on a true analysis by Dr Slezak, is somewhere in excess of six years.

38 Dr McGrath gave evidence in relation to chronic clinical ischaemia. His evidence was that there are four stages of this disease. The first two stages are fairly benign. The third and fourth stages, however, produce fairly significant outcomes. In the third stage he said that five per cent of patients are in constant pain and they have a life expectancy of two to three years. In the fourth stage the condition has become critical and a person who has the disease categorised as stage four requires urgent and sudden intervention otherwise death could follow within a matter of hours. In Dr McGrath’s opinion the plaintiff falls somewhere between the first two categories. There is a strong possibility, he said, of cardio vascular disease where there is hypertension even though there are no symptoms. In the absence of any symptoms in the plaintiff he cannot be sure that there is no disease.

39 He stated that at the time he conducted his examination on the plaintiff there were no active problems with the plaintiff, therefore, on the literature and on his examination he assessed the plaintiff as having a life expectancy of ten years. In cross examination his evidence was that the plaintiff had vascular disease brought about by hypertension and a degree of kidney impairment together with other minor ailments and in all probability she has had vascular disease for some years. However, there is no evidence that it became symptomatic; in his view her current position is asymptomatic. He confirmed his opinion that the life expectancy of a patient with peripheral vascular disease was in the order of ten years and that the plaintiff fell within that category. He conceded that in assessing the life expectancy period of ten years that should be taken not from the date of the trial but from the date of when the symptoms first appeared and in his view that was in 2002. Therefore, the current life expectancy of the plaintiff, according to Dr McGrath, would be eight years.

40 I found both doctors to be creditable witnesses. However, having regard to the breadth of experience of Dr McGrath where there is a difference of opinion, I tend to favour the evidence given by Dr McGrath. In any event it really does not make a great deal of difference as his estimate of the life expectancy of the plaintiff is now eight years and Dr Slezak’s estimate is somewhere in excess of six years, there is really very little difference between the two opinions.

41 Although the plaintiff has a peripheral arterial disease, suffers from hypertension and some other ailments her evidence is that she is able to cope with looking after the Woollahra property. According to the first report of Dr Slezak there is mention of the fact that she walks up to four kilometres a day and this part of Dr Slezak’s report was not subject to cross-examination nor was the plaintiff cross-examined on her physical capacity. Looking at the plaintiff in the witness box, for an eighty year old female, she seemed to be in reasonable health. It would appear that the life expectancy given by Dr McGrath is probably, in all the circumstances, a reasonably accurate forecast.

The eligibility of the plaintiff

42 The plaintiff, as widow of the deceased, is an eligible person pursuant to s 6 (1) of the Act. In applications under the Act the High Court in Singer v Berghouse (1994) 181 CLR 201 set a two stage approach that a court must take. The first stage the Court must determine whether the provision, if any, made for the plaintiff was inadequate for his or her proper maintenance, education and advancement in life. The determination of the first stage of the two stage process calls for the assessment of the whether the provision, if any, made was inadequate or what, in all the circumstances, was the proper level of maintenance appropriate for the plaintiff having regard, amongst other things, to 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.

43 Under the terms of the will the plaintiff, who was married to the deceased for 28 years, received certain chattels, a right to reside in the Woollahra property or an alternate property and a legacy of $25,000.00. It can be seen in respect of the legacy that it amounts to less than $1,000.00 for every year of the marriage. It should also be noted that the codicil was made in 1997, some 23 after the couple had married. The evidence is that this was a happy and loving marriage. Therefore, it becomes difficult to understand why the deceased only made provision for an amount of $25,000.00 by was of a pecuniary legacy. The plaintiff is left is a position where she does not own or have security of accommodation.

44 The evidence was silent either way on whether or not there has been a breakdown of the relationship between the plaintiff and the defendants. However, it is clear from the terms of Clause 4 of the will that the defendants can apply subjective tests to determine whether or not the plaintiff’s occupancy of Woollahra has ended. However, there is evidence that the defendants have in the past, at least, have had some regard for the plaintiff. Examples of that regard are to be found in the gift of $2,500.00 worth of David Jones shares given to the plaintiff for her birthday and secondly the fact that each of the defendants, at separate times, stayed with the plaintiff shortly after the death of the deceased. However, that still does not remove the feeling from that plaintiff that she is in some way beholden to the attitudes of the defendants. She feels she has no security in respect of the Woollahra home and she is not free to do as she pleases with the property.

45 In my view, there has not been adequate provision made for the proper maintenance and advancement in life for the plaintiff. Although the estate is a large estate, unfortunately, there is only one significant asset in the estate and that is the property at Woollahra. The deceased has not, in all the circumstances, made adequate provision for the plaintiff’s accommodation. I have referred to the evidence that the marriage was a loving and caring one.

46 There is also evidence, of course, that the deceased had a loving relationship with his two daughters. Under the terms of the will the two daughters ultimately receive most of his estate. During his lifetime he made gifts to both daughters and they take residue of the estate, which is currently valued at approximately $145,000.00. It must also be borne in mind that both the daughters own their own realty and therefore have security of tenure in respect of their accommodation.

47 Therefore, the question raised in the first stage of the approach taken by the High Court in Singer v Berghouse, supra, must be answered that the deceased failed to make adequate provision for the proper maintenance, education and advancement in life for the plaintiff.

48 Having determined the first stage in favour for the plaintiff it is therefore necessary to determine the second stage. Namely, what is the proper level of maintenance and what is adequate provision, in any event, for the plaintiff?

49 Those competing for the assets of this estate, the plaintiff and the two defendants, the plaintiff is the widow of the deceased and the defendants are the daughters of the deceased. The plaintiff had been the deceased’s wife for a period of 28 years. She has assets and she has an income which enables her to not only meet her debts and liabilities but leaves her with excess cash. However, she does not have security of accommodation. The position in relation to her assets is that when the value of the furniture, the motor vehicle and the David Jones Shares are deducted from the total value of those assets of $265,000.00 she has by way of bank accounts or investments an amount of $233,000.00. There is no evidence put on which would indicate whether or not that fund alone would be sufficient to enable her to acquire alternate accommodation. From the evidence she has lived in the Eastern Suburbs for many years. Prior to marrying the deceased in 1974 she owned resided in a unit in Elizabeth Bay. There is no evidence how long she resided in that unit. However, it is clear that she has resided in the Eastern Suburbs for a period greater than 30 years. In all probability should the time arise when she can no longer maintain Woollahra, or desires to move into alternate accommodation, her preference will be to remain in the Eastern Suburbs.

50 Neither side has put on any evidence concerning the cost of alternate accommodation whether that be independent living in a retirement village, hostel accommodation or the acquisition of some other form of accommodation in the wider community. Other than hostel accommodation it is doubtful that, on today’s real estate prices, she would be able to afford from her assets to acquire a property in the Eastern Suburbs. Therefore, she is not able to secure accommodation for herself. In relation to the second and third matters raised by Powell J in Luciano v Rosenblum, (1985) 2 NSWLR 65, she readily concedes that she is able to provide from her own income sources sufficient funds to look after all her other needs and the little luxuries of life.

51 The defendants are competing claimants in respect of the deceased’s estate. The evidence of the first defendant demonstrates that she and her husband are reasonably comfortable and that upon his retirement will come into a superannuation fund of just under half a million dollars. They have no debts and currently enjoy a combined income of $75,000.00. There is no suggestion that either of them is in bad health. The first defendant expresses no immediate needs but merely a desire to do certain things with the moneys she will ultimately receive upon the sale of the Woollahra property. A number of those matters do not translate into needs, such as the provision of accommodation for her son and the desire to travel around Australia. Clearly then, in relation to the first defendant, there are no special circumstances which would mitigate against the plaintiff receiving further provision out of the estate of the deceased and being placed in a position of primacy over the first defendant.

52 The position in relation to the second defendant is a little more complicated. The second defendant has suffered illness for almost 20 years. She has had two heart operations, a stroke and numerous other ailments. She currently is in receipt or income of approximately $12,500.00 per year and that sum has been supplemented by a further $10,000 being the income received from the capital of the residue of the estate. By agreement she has received her sister’s entitlement in respect of that income. It would appear that that is probably going to continue for the foreseeable future. Therefore, prima facie, the second defendant has a competing need.

53 However, the second defendant, unlike the plaintiff, does have security of accommodation. She owns a property at Arcadia where she resides and the current value of that property is given as $1 million. She also has the benefit of the residue of the estate which after costs is likely to be about $100,000.00; her benefit is 50 per cent of that sum. Although there is a shortfall it may well be covered by the second defendant reducing her expenses or, in the alternative, it is always open to her to sell the property and look for an equivalent property at a lower price outside the metropolitan area. If that were achieved she may well still have a rural property where she can run horses but also have a surplus of funds because of the difference in the sale price of Arcadia and the purchase price of any new property.

54 Therefore, it seems to me that whilst her financial position is not good she could not be regarded as being in dire straitened financial circumstances; she has a valuable asset which she could, if necessary, use to alleviate any financial distress. Therefore, the position is that of the three beneficiaries, the two defendants each own their own properties are free from debt and have income, albeit the second defendant has a small income. The plaintiff, however, has an income larger than both defendants but does not have security of accommodation. Both defendants are in a position to marshal their assets to acquire alternate accommodation should the need or the desire arise. The plaintiff does not have that luxury. She has assets valued at approximately $233,000.00 plus an income. There is no guarantee that should she have to, or desire to, move from Woollahra that she would be able to find accommodation which she would regard as suitable to her needs. It therefore, could not be said that the competing factors are more or less otherwise in equilibrium. See Bladwell v Davies [2004] NSWCA 170 per Ipp JA.

55 The additional provision that the plaintiff seeks from the estate of the deceased is that the Woollahra property be transferred to her. The defendants, the daughters of the deceased, wish to uphold the terms of the deceased’s will. They have both indicated that they are content to permit the plaintiff to continue to reside in the Woollahra property and upon termination of the residency for the property to be sold and for there for there to be a distribution to each of them in accordance with the terms of the deceased’s will.

56 In Elliott v Elliott, unreported Supreme Court of New South Wales 18 May 1984 Powell J, his Honour said:

“… where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up, and maintain, his estate, the duty which the deceased owes to the widow can be no less than to the extent to which his assets to which his assets permit him to achieve that result; first, to ensure that his widow be secure in her home for the rest of her life, and that if, either, the need arises, or, the whim strikes her, she have the capacity to change her home; second, that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort, and free from any financial worries; and, third, that she have available to her a fund which she me resort in order to provide herself with such modest luxuries as might as she might choose, and which would provide her with a hedge against any unforeseen contingency or disaster that life may bring.”

57 In Langtry v Campbell, unreported Powell J 7 March 1991, his Honour said:

“Where, after all the appropriate interests have been taken into account, it is possible to do so, a widow in the position of the plaintiff ought to be put in a position where she is mistress of her own life, and in which, for the remainder of her life, she is not beholden to executors, or trustees and still less, to remaindermen.”

58 In Golosky v Golosky, unreported 5 October 1998 New South Wales Court of Appeal, Kirby P summarised proper provision for widows in the following terms:

“In testing the Master’s decision it is appropriate to keep in mind the principles which governed the approach he was obliged to take to the widow’s application under the Act. Relevantly, these included: (a) …; (b) …; (c) consideration of other cases must be conducted with circumspection because of the inescapable detail of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had 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; see Luciano v Rosenblum (1985) 2 NSWLR 65; (d) A mere right of residence will usually be an unsatisfactory method of providing for a spouses accommodation to fulfil the foregoing normal 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. See Moore v Moore , Court of Appeal, unreported, 16 May 1984, per Hutley JA, 2; (e) Considering what is ‘proper’ and by inference what is ‘improper’ as a provision in a will, it is appropriate to take into account all of the circumstances of the case including such matters as the nature and quality of the relationship between the testator and the claimant; the character and conduct of the claimant; the present and reasonably anticipated future needs of the claimant; the size and nature of the estate and of any relevant dispositions which may have reduced the estate available for distribution according to the will; the nature and relative strengths of competing claims of testamentary recognition; and any contributions of the claimant to the property or to the welfare of the deceased. See Re Fulop Deceased (1987) 8 NSWLR 679; Churton v Christian and Ors (1988) 13 NSWLR 241, 252.”

59 In Luciano v Rosenblum, supra, Powell J said:

“It seems to me that, as a broad general rule, and in the absence of special circumstances, the duty of the testator to his widow is, to the extent to which his assets permit him to do so, 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.”

60 In Marshall v Carruthers [2002] NSWCA 47, Hodgson JA and Young CJ in Eq emphasised the need for the broad general rule to be considered in the context of a particular case. Young CJ in Eq said:

“The broad general rule may well be inapplicable in cases of other spouses. Indeed, the cases of the first half of the twentieth century show that as far as widowers were concerned, the proposition was quite untrue.”

61 Finally, in O’Loughlin v Low [2002] NSWSC 222, Young CJ in Eq said as follows:

“When it comes to claims by adult children, it can be said at once that, if there is a competing claim by a widow and all claims cannot be fully accommodated, the widow’s claim should be forwarded 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 the 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 ‘high order’ is bourn out by the judgments of Sheller JA in Sayer v Sayer [1999] NSWCA 340 (Davis JA concurring) and Blackmore v Allen [2000] NSWCA 162 (Priestly JA and Foster AJA concurring).”

62 In a recent decision of the Court of Appeal, Bladwell v Davies [2004] NSWCA 170, Ipp JA said:

“I agree with Bryson JA that for reasons his Honour stated, that ‘it would be an error to accord to widows generally primacy over all other applicants regardless of the circumstances and regardless of the performance of the stages of consideration described in Singer v Berghouse …
“I would add, however, that where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of a testator, is permanently unable to increase her income, and is never likely to be better off financially, while to other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, would ordinarily result in the needs of the widow being given primacy. That is simply because, in such cases, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event, the need of the widow would be greater than that of the others.”

63 It has been urged upon me by counsel for the estate that if there is to be an adjustment made it should be made along the lines of the order and adjustment made by Master Macready in Harvey v Delaney [2003] NSWSC 589. In that case the surviving spouse was a widower, the marriage was a long marriage (some 54 years). The widower was given a right to reside in the former matrimonial home. Master Macready, after considering a number of the authorities and noting that under the intestacy provisions he was entitled a quarter interest in the property made provision for the plaintiff. In relation to the balance of the property he made an order in the nature of a Crisp order. Thus, giving the plaintiff an interest for life in the balance of the property with the flexibility to be able to sell the property, should the need arise, for the purposes of securing more appropriate accommodation.

64 There is a distinction to be drawn between Harvey v Delaney, supra, and the present case in that that was a case involving a widower and the case before me involves a widow. In Marshall v Carruthers, supra, Young CJ in Eq said, inter alia:

“The broad general rule may well be inapplicable in cases of other spouses. Indeed, the cases in the first half of the twentieth century show that so far as widowers were concerned the proposition is quite untrue.”

65 The Court, therefore, has drawn a distinction between widows and widowers. However, it could not be said in the present case that the plaintiff has made the same type of contribution to the assets of the deceased as a wife who married the deceased in her twenties. There were no children of this relationship and the deceased had acquired significant assets prior to the marriage.

66 However, the plaintiff continued to work for the first nine years of the marriage and whilst they held separate bank accounts there is nothing to suggest that they did not apply her income to the joint endeavours of the marriage. It would appear that from her income she was able to invest and save moneys. That becomes apparent from her disclosed assets. However, that does not mean that she did not use her income for the benefit of the marriage. Her moneys were used in the marriage. That would have enabled the deceased to use a proportion of his moneys for other purposes, albeit for purposes from which both received a benefit.

67 Whilst it cannot be said that the plaintiff did things in a manner that were detrimental to her own financial prospects or that she performed a role which enabled the deceased to accumulate significant assets she nevertheless contributed financially to the marriage, as well as emotionally. The evidence is that towards the end of the deceased’s life was that she was his sole carer and that lasted for approximately three years.

68 The Woollahra home was constructed with a view to it being the matrimonial home. The plaintiff had not an unreasonable expectation that that would be her home during the marriage and if her spouse predeceased her it would become her home. However, that expectation has not been met.

69 A second or late marriage often provides different expectations than a first marriage. At the first marriage the parties are usually young, do not have a great income and seek to acquire their own home and to have children. A second marriage, particularly one where the parties are in late middle age, has different expectations. Generally the parties will go into such a marriage with assets and a significant factor of the marriage is the companionship that each brings to the other. The marriage of the deceased and the plaintiff falls into that category. They were both in their late middle age, both were in receipt of an income and both had assets, admittedly the deceased had greater assets and a far greater income that then plaintiff. However, having regard to the evidence it appears that it was a marriage in which companionship was highly valued. The evidence is that it was a loving and caring marriage and that the deceased was a generous provider.

70 In my view this is not a matter where, as Ipp JA said in Bladwell v Davies, supra, the competing factors are more or less in equilibrium. Whilst Christine Harrison has a lower income and finds it difficult to make ends meet the deceased should have ensured that the plaintiff was secure in her accommodation.

71 It is not an unreasonable proposition for the plaintiff to want to remain at 58 John Street, Woollahra; this has been her home for the last 25 years. Presently she is capable of maintaining the property and is having no difficulty in coping with living in the property. There is no reason why she should not remain in the premises.

72 In my view special circumstances do not arise which would upset the general rule that a widow’s claim should have primacy over the claims of any adult children. In my view the plaintiff should succeed on her application.

73 In my opinion adequate provision for the plaintiff requires that the property known as 58 John Street, Woollahra should be transferred to her.

Orders

74 I make the following orders:

1. The plaintiff receive in addition to the provisions to her under the will of the late Raymond George Reynolds the property known as 58 John Street, Woollahra.
2. There be no order in respect of the plaintiff’s costs to the extent that she pay her own costs.
3. The defendants’ costs be paid on an indemnity basis out of the estate of the late Raymond George Reynolds.
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Last Modified: 08/10/2004