Robyn Nina Francis Andrews v Beryl Joan White
[2008] NSWDC 196
•12 September 2008
CITATION: Robyn Nina Francis Andrews v Beryl Joan White; John William White; Trevor Valton White [2008] NSWDC 196 HEARING DATE(S): 19, 20, 21, 22 August 2008.
JUDGMENT DATE:
12 September 2008JURISDICTION: Civil JUDGMENT OF: Knox SC DCJ DECISION: 1. I order that allowance be made for the plaintiff from the estate of the testator in lieu of the provision made for her in the sum of $65,000.
2. I direct that the parties bring in a minute of orders before 25 September 2008 as to how and when that payment will be made.
3. In the event that the parties are unable to bring in such a minute then I give each of the parties liberty to apply to have the matter set down for argument as to when the payment should be made and any other orders, including orders as to enforcement, as may be necessary.CATCHWORDS: Daughter's claim on notional estate of Valton Frances White for her maintenance, education and advancement in life. - Family farm cases - Plaintiff accepts the entitlements of the two sons of the testator to the substantial proportion of his estate. - Son’s made contributions over their lives to the properties by way of unpaid or lowly paid labour. - A relevant consideration is the plaintiff’s future retirement and income needs. LEGISLATION CITED: Family Provision Act 1982 CASES CITED: McDougall v Rogers; Estate of James Rogers (2006) NSWSC 484
Kleinig v Neal [No 2] [1981] 2 NSWLR 532
Browne v Dunn (1893) 6 R 67
Bosch v Perpetual Trustee Co Ltd [1938] AC 483
CGU v Ferrcom P/L (1991) 22 NSW LR 389
Jones v Dunkel (1959) 101 CLR 298
Mann v Starkey [2008] NSWSC 263
Diver v Neal [2008] NSWSC 304
re Harrison (deceased), Thompson v Harrison [1962] NZLR 6
Gorton and Ors v Parks (1989) 1 NSWLR 1
White v Barron (1980) 144 CLR 431
Dun v Dun (1957) 99 CLR 325
Goodman v Windeyer (1980) 144 CLR 490
Hawkins and Anor v Prestage and Ors, unreported; SCt of WA; Library No 7469; 20 January 1989
Hunter v Hunter (1987) 8 NSWLR 573
White v Chambers (unreported SC (WA), Franklin J, 1404/1982, 27 February 1985)
Gillis v Laverty unrep. NSW SC
Davey v Fairhead (1996) ACL Rep 395 WA 7
Lloyd v Nelson (1985) 2 NSWLR 291
Gorton v Parks (1989) 17 NSWLR 1
Smilek v Public Trustee [2008] NSWCA 190TEXTS CITED: J K de Groot & B Nickel, Family Provision in Australia 2nd ed Butterworths PARTIES: Robyn Nina Frances Andrews
Beryl Joan White
John William White
Trevor Valton WhiteFILE NUMBER(S): 3786/07 COUNSEL: Plaintiff: Mr P. Singleton
Defendant: Mr J. Millar
- 3 -
JUDGMENT
Summary
This case concerns an application by the eldest daughter of a testator for an increased payment to be made for her from the testator’s estate. The applicant was bequeathed $15,000. The testator’s wife and his three other adult children support the terms of the will. The bulk of the estate was made up of two farming properties on which the two sons of the testator worked through their working lives.
Application
1 By summons dated 22 August 2007 (amended 7 April 2008) the plaintiff claims a lump sum of $300,000 or such other amount as is thought appropriate to be made from the notional estate of the late Valton Frances White (the testator) for her maintenance, education and advancement in life. The summons is brought pursuant to the provisions of the Family Provision Act 1982 (‘the Act’).
2 The plaintiff accepts the limitation of the claim to $250,000 given the jurisdictional limit of the Court. The plaintiff also seeks that the defendants meet her costs and charges as an expense of the estate.
3 The defendants, as executors of the estate, oppose the orders sought and seek that the testator’s will be upheld and the specific bequest to the plaintiff be maintained.
Parties
4 The testator died on 6 March 2006 when he was aged 86 years.
5 The plaintiff, the eldest child and daughter of the testator, is aged 60, (D.O.B. 7 December, 1947). The defendants are the wife of the testator, now aged 84 (D.O.B. 30 August 1924), and the two sons she had with the testator, John, now aged 57 (D.O.B. 9 November 1950) and Trevor, now aged 46 (D.O.B. 27 July 1962).
6 The testator and Mrs White also had another daughter, Cheryl White, now aged 52 (D.O.B. 21 February 1956). Mrs Beryl White lives nearby Cheryl, in Warwick, Queensland. Cheryl, who is another eligible person under the Act, has filed an affidavit in the proceedings supporting the position taken by her mother and two brothers as executors opposing the plaintiff’s claim. Cheryl White has confirmed that she will accept the sum of $15,000 which she, and the plaintiff, were to receive under the terms of the will and that she will be making no other claim on the estate.
7 The remaining eligible person under the Act is Mrs Beryl White, the widow of the testator, who also supports the terms of the will. Mrs Beryl White and Cheryl White were present in court throughout the hearing. It is agreed that I can disregard their potential claims pursuant to section 20 of the Act although defence counsel submits, I think correctly, that that fact does not diminish the strength of the claims that they could have made but enhances the claims above that which could have been enjoyed as applicants – McDougall v Rogers; Estate of James Rogers (2006) NSWSC 484 per Brereton J. at [47]
Assets of the estate
8 The assets of the estate are as follows:
· Allambie Station (18, 116 acres) - estimated value $978, 264
· West Munda property (10,240 acres) - estimated value $491, 520
o Subject to Mrs White’s half share* $245, 760
· Property, stock and machinery $10, 000
· Bank account $2, 476
TOTAL: $1,482,269.83
less half share Mrs Beryl White - $245, 760* = $1,236,509.83
There is no issue as to the values of any of the properties or debts of the estate.
*The parties agree that this half share is worth the amount specified. The plaintiff submits that that amount should be available to be designated as notional estate pursuant to section 24 of the Act as being property held by the sons as subject to a trust. Mrs Beryl White gifted her share to her sons after the death of the testator and before the plaintiff instituted her claim. I see no evidence which would warrant a determination being made that the property was subject to a trust or that it should be designated as notional estate.
Background
9 The testator acquired the land which became the Allambie property near Brewarrina in western New South Wales following his World War II Australian Air Force service. At that stage it was a vacant block of land. The property was built up by the testator and Mrs Beryl White over the years and developed as a sheep farm.
10 The property at West Munda was purchased in 1971 by the testator and his wife in joint names. It is about 9-10 km from the Allambie Station. The testator and his wife lived and worked on the properties throughout their lives until shortly before the testator’s death in 2006.
11 It is clear that the family business was difficult and required hard work by all those involved. The family and those running the business experienced, as with so many properties in the western districts of New South Wales in those years, droughts, flood and the vicissitudes and uncertainties associated with grazing properties. There was no rain on the Allambie property for the 7 years preceding 2007.
12 The farming property did not operate as a profitable business in the years 2002 to 2007. There has been agistment income from the property since 8 March, 2008. That income has been used by the sons to defray the expenses of the properties.
Will
13 The relevant will of the deceased was executed on 12 December 1991. Probate of the will was granted on 19 October 2006. The will provides for the plaintiff and the other daughter, Cheryl, to each receive the sum of $15,000.
14 It is the defendants’ case that, at least by 1991, John White and Trevor White were told that a will had been made leaving the properties to pass on the death of the last of the testator and Mrs Beryl White to Trevor and John. The plaintiff disputes that she was told of that arrangement or that she was aware that the sons were told of that intention.
Alteration in wills
15 The testator and Mrs Beryl White executed mutual wills leaving all their property (including both of the Allambie and West Munda properties together with stock, plant and equipment and cash) to their sons. The original wills provided for a payment of $30,000 to each of their daughters, Robyn White and Cheryl White. The gifts to the sons were to be in recognition of the contributions the sons had each made to the properties, the farming business and to the testator and Mrs Beryl White in the circumstances that each of the son had received little reward for the work which each had done over the years (affidavit of Beryl White 4 December 2007 paragraph 9).
16 The amount of the bequest to Robyn and Cheryl was reduced in 1991 so that each would receive the sum of $15,000. That was said to be in recognition of the fact that the pressures and debts of the farming business at that time were such that payment of any further or greater amounts would affect the financial viability of the business and the farms.
17 At that time, the plaintiff was aged 44. She and her husband were operating a butchery business in Brewarrina.
18 The defendants’ case is that the respective testamentary dispositions by the testator and Mrs Beryl White were also executed to ensure that the farms would be able to be operated as a viable business.
19 On 25 October 2006, six months after the testator’s death and prior to the plaintiff’s claim, Mrs Beryl White signed a contract of sale transferring her interest in the two properties owned by the deceased (in his sole name at Allambie) and in their joint names at West Munda to the two sons, John and Trevor White.
20 Mrs White said that she transferred her interest to Trevor and John White after the death of her husband, the deceased, as she was no longer able to make any contribution – direct or indirect – to the property or the operation of the farming business.
Observations of parties
21 Mrs Beryl White’s affidavit states that by then she was aware of the plaintiff’s proposed claim and that “I was, and am, angered by Robyn’s challenge against her father’s will”.
22 There was considerable tension evident at various stages of the hearing from some of the parties and interested individuals. There has clearly been some family history of ill-feeling over and above that normally generated in disputes of this nature. As an example, the plaintiff has filed a caveat over the properties of the estate which has prevented some use of the properties as security for the raising of loans and credit. That has clearly been the source of some continuing frustration for at least Trevor White, which may arise from the fact that it has prevented him and his brother from utilising the properties as security for further credit.
23 However, as was said in Kleinig v Neal [No 2] [1981] 2 NSWLR 532 at 540E the testator is assumed to be not only wise and just but also not to expect perfect harmony in familial relationships. I have inferred from what I have seen and heard that not only was the matter not capable of settlement at any stage but also that the orders determining the matter will need to be made which require the parties to have as little to do with each other as possible. That would militate against, for example, the provision of an annuity for a period as has been directed in some other cases.
Evidence
Affidavits
24 The plaintiff filed the following affidavits:
1. Affidavit of Robyn Andrews sworn 18 August 2007;
2. Affidavit of Robyn Frances Andrews sworn 11 February 2008;
3. Affidavit of Daryl Roger Andrews sworn 11 February 2008.
4. Affidavit of Athol Clive Hutchinson sworn 28 February 2008.
Robyn Andrews and Daryl Roger Andrews both gave oral evidence.
25 The defendants filed the following affidavits:
1. Affidavits of Trevor White sworn 10 December, 2007 and 11 February 2008;
2. Affidavit of Beryl White sworn 4 December 2007;
3. Affidavit of Patrick Luttrell sworn 26 November 2007;
4. Affidavit of Cheryl Kelly sworn 4 December 2007;
5. Affidavit of Trevor White sworn 7 December 2007;
6. Affidavit of Robert Wright sworn 16 may, 2008.
Trevor White and John White both gave oral evidence.
Absence of evidence
26 Neither side required the other deponents who were not parties to be called for cross-examination. Given this approach by both sides, there were inevitably some matters which remain untested making some findings of fact difficult in relation to both cases. However, against that background, the submission has still been made – particularly by counsel for the estate – that by reason of that failure, aspects of the evidence remain unchallenged and should or should not be accepted.
27 This may be technically correct but had all witnesses been called and fully cross-examined on all issues, the time taken and costs of the proceedings would have been increased substantially. The principles set out in the Uniform Civil Procedure Act concerning the cost of proceedings are particularly relevant in family relationship cases such as this. Courts and practitioners need to make an assessment whether there is a real need to call and cross-examine witnesses on all issues particularly given the size of the estate and the relative importance of the issues said to be outstanding and requiring a rigid application of the rules such as the rule in Browne v Dunn (1893) 6 R 67. Where there has been an agreement not to call witnesses in such circumstances – and absent any specific indication that the absence of a witness or particular evidence will be the subject of such a submission – then it would be unfair to invoke such principles with rigidity. I am left with the situation where I need to make a determination of the particular area in dispute given the overall evidence and my assessment of the particular witnesses called.
Agreements/agreed facts
28 It is agreed that there is no conduct or character disentitling the plaintiff from her claim.
29 It is not suggested that there has been any financial mismanagement on the part of the plaintiff or any of the defendants in the management of any of their affairs.
Plaintiff
30 Mrs Andrews lived at home until the age of 14 and then went to boarding school for about 2 years. Throughout that time she was dependent on her parents. She returned home at about 16 and acted as a governess for her sister, Cheryl, who was about 9 years younger than the plaintiff.
31 Mrs Andrews married her husband, Daryl, in 1966 when she was 19. Initially she and Mr Andrews went to live with Mr Andrews’ parents until they purchased a home in Brewarrina in 1969. She and Mr Andrews still live in that home.
32 Mr and Mrs Andrews have 7 children and a number of grandchildren. One of those children lives with Mr and Mrs Andrews, although he is financially independent.
Business: difficulties and decline
33 Mr Andrews operated a butchery in Brewarrina from the early 1970’s until that business closed in August 2000. He acquired that business from his parents. Ms Andrews also worked in that butchery over the years. She was not paid a wage nor did she build up superannuation entitlements.
34 There were difficulties associated with the operation of that business because of financial, social and related circumstances in Brewarrina. The business was the subject of a number of burglaries, which meant that Mr Andrews was unable to obtain insurance. Ultimately, the plaintiff and her husband were evicted from the business premises when the Commonwealth Bank foreclosed on the business. What superannuation Mr Andrews had was applied to the discharge of the Commonwealth Bank debt. The CBA, after negotiation, accepted the sum of $60,000 in satisfaction of the outstanding debts Mr and Mrs Andrews had of $130,000 to release the mortgage over the home owned by them. That sum included all the savings and superannuation owned by Mr and Mrs Andrews by that time.
Advance of $40,000: Mr Athol Hutchinson
35 An advance of $40,000 was made by a childhood friend of Mr Andrews, Mr Athol Hutchinson, to pay out the Commonwealth Bank mortgage. That amount was unsecured and there have been no repayments made for any of what was said to be a loan. Mr Andrews said that when the sum was advanced, Mr Hutchison said that he didn’t need the money at that time. Mr Andrews said that he told Mr Hutchison that, if the amount was not repaid, ‘the house is yours’.
36 Counsel for the estate disputes that that is a debt which can be taken into account given that:
· it was undocumented;
· it was made over 7 years ago; and
· it has not been the subject of any request for repayment;
· no attempts have been made to make any payments on sum at times when Mr and Mrs Andrews had some capacity to repay at least part of the amount said to be outstanding.
37 Mr Hutchison was not required for cross-examination and his affidavit setting out the details of what was said to be the loan was unchallenged.
Plaintiff’s financial circumstances and needs
38 Mrs Andrews works as a childcare worker with the Brewarrina Child Care Centre and has done so since June 2004. She has no formal qualifications nor training for that position nor that kind of work. Mrs Andrews receives $1033 per fortnight. She gave evidence that she has difficulty doing that work, in particular, lifting and carrying babies. She does not want to pursue that work because of the physical demands, given her age – 60 – as well as the stresses and responsibilities associated with that work.
Plaintiff’s husband: Mr Andrews
39 Mr Andrews is aged 61. He has an Australia Post mail contract from where he receives a net income of about $550 per week. Mr Millar for the estate submits that the real figure is more like $1109 per week. That amount fluctuates depending on the expenses associated with the contract, especially petrol prices in that remote area of NSW.
40 Mr Andrews has about 2 ½ years to run on that contract. He did not pay any capital to receive that contract nor apparently is it likely that he would receive anything should he transfer it. The contract is in fact operated by him through a company, DRA Mail Services Pty Ltd., of which Mr Andrews is the sole director/shareholder. The company had an account with the Commonwealth Bank of $15,000 at the time Mr Andrews swore his affidavit. Bank statements relating to that account were tendered showing that Australia Post payments were made into that account which seems to have been used as the operating account for the mail run business. The bank statements which were produced do not disclose that it is a significant income-generating business.
41 Mr and Mrs Andrews have a house in Brewarrina worth an estimated $40,000, a Commodore car worth $9,000, a Nissan Patrol vehicle (used for the mail run) worth $14,000, and furniture worth about $5,000 – in other words, a total of $68,000. Mr and Mrs Andrews have purchased, or are purchasing, a block with a condemned or derelict house on it adjacent to their home in Brewarrina for $4,000. Some of that purchase price came from savings and about $2000 came from a loan. That block was purchased to secure their own property and to park their own vehicles. Mr Andrews has erected a long metal fence on the property to ensure its security. He purchased the materials for the fence, and built it, but did not recall the total cost/amount spent other than the cost of the materials was about $2000. Photographs tendered indicate that it is a substantial fence.
42 It was clear when Mr and Mrs Andrew each gave evidence that they were concerned about the level of personal and property violence, which they regard as prevailing in Brewarrina.
43 Both Mr and Mrs Andrews consider that there are difficulties in selling properties in Brewarrina – stating that there are a considerable number of unsold properties in the town that have not been sold for many years. That is clearly not expert valuation evidence but may go some way to explaining why they do not appear to have taken any concrete or definitive steps to move – nor indeed even attempted to sell their home - prior to this time.
Plaintiff’s proposals
44 Mr and Mrs Andrews said that they wish to relocate to the Dubbo/Narromine area to be close to their daughter, Amanda, who lives there, and to be in an area with improved medical facilities. Their other children live in other parts of New South Wales and Queensland. They are looking to purchase a property in the order of about $250,000 in Dubbo or about $150,000 in Narromine. Internet searches setting out the range and nature of possible properties were tendered.
45 My impression from the evidence of both Mr and Mrs Andrews is that, while they have some connection with the Dubbo/Narromine areas in terms of relatives and friends, their main desire is to leave Brewarrina because of the social problems and unrest they have experienced, and are concerned they may experience as they grow older. All except one of their children have left the area. I have no doubt of their desire and intention to leave should that be possible. However, I consider that their investigation and planning for any such move is very much in the initial stages, particularly given the financial limitations they have and the difficulties they consider that they face.
Superannuation
46 Mrs Andrews has some superannuation with HESTA arising out of 4 ½ years working at the child care centre. While that amount was not quantified, both sides were aware that Mrs Andrews was working. The benefit presumably consists of the employer’s compulsory superannuation contributions made on Mrs Andrews’ behalf although that is unclear. Mrs Andrews said she had no other superannuation.
47 Mr Andrews apparently has no superannuation entitlements although he has structured the receipt of payments from his Australia Post contract through a sole director company, which may lend itself to such superannuation arrangements being financially advantageous. However, the net income generated may not be such as to warrant such arrangements being made.
48 There was little documentation produced in relation to that company or its operations or assets. An account containing about $15,000 in the company name was not disclosed in Mr Andrews’ affidavit material nor a cash management account containing a relatively small sum. The relevance of that from a credit point of view in relation to the overall case of the plaintiff was that Mrs Andrews’ case is that her position and future is very much inter-twined with the financial circumstances of her husband.
49 Mr and Mrs Andrews have liabilities of about $56,000, including a sum of $40,000 which I am satisfied was advanced by Mr Athol Hutchinson to Mr and Mrs Andrew to meet their debt to the Commonwealth Bank. No interest was payable on that amount. It has not been repaid.
50 Mr and Mrs Andrews each suffer some medical problems – Mrs Andrews has high blood pressure, diabetes, and cholesterol. It was asserted that Mr Andrews has thyroid problems although no medical evidence was produced of any of these matters. Whatever conditions there are, they do not appear to have impeded either of Mr and Mrs Andrews working in the way they each have to the present time. However, Mrs Andrews’ evidence, which I accept in this regard, was that she was finding the physical work of lifting babies increasingly onerous.
Contributions to deceased and his wife
51 Mrs Andrews said that she visited her parents once a fortnight and those visits were reciprocated from time to time. These appeared to have been the normal social and familial exchanges rather than to have been any substantial contribution.
52 Mr and Mrs Andrews have given evidence that Daryl Andrews did small jobs for the deceased and Mrs Beryl White. They also occasionally carried out familial services for them such as taking either the deceased or Mrs Beryl White to Bourke for medical treatment about twice per year. Mr Andrews also gave evidence that he improved the property of the testator on which his (Mr Andrew’s) stock, both cattle and sheep, was agisted. Those improvements seem to have been largely limited to fencing and some road improvements to the paddock(s) on which his stock was located from time to time.
53 Two of Mr and Mrs Andrew’s children also agisted stock on the testator’s property from time to time and, while no money changed hands, there were counter-balancing contributions made by the children to the properties.
54 The deceased and Mrs Beryl White went to live in Warwick at the end of 2005. The deceased spent most of his time in Warwick in hospital until he died in March 2006. During the four or five months that both parents lived in Warwick, Mrs Andrews visited them twice.
55 Mr Andrews denied that he received any financial assistance from the deceased or Mrs Beryl White. Apparently no such assistance was sought nor received during the period when Mr and Mrs Andrews lost their business and had the subsequent negotiations with the Commonwealth Bank.
Expectation
56 Mrs Andrews said that she always understood that following the death of her parents the estate would be divided equally between the four children without regard to whether the beneficiaries were boys or girls.
57 Mrs Andrews denied what the other three siblings said, namely, that the parents had spoken of or made that arrangement clear over the years. The account of the other three adult children and Mrs Beryl White was also supported by Mr Luttrell. He visited and stayed at the property on many occasions over fifty years. He said that he spoke to the testator specifically on that subject and recalled the discussions in the context of his awareness that the sons were receiving little recompense for their day-to-day work on the properties of their parents. He did not say that those comments took place in the plaintiff’s presence.
58 Mrs Andrews said that she was also unaware of the transfer of Mrs Beryl White’s interest in the farm to John and Trevor.
59 Mrs Andrews said that she told her parents that she was unhappy living in Brewarrina and that she wanted to move from there. Given the numbers of fires and burglaries that she and her husband had in the butchery premises and the consequential inability they had to obtain insurance, the ongoing difficulties that they had had with the Commonwealth Bank and the foreclosure on their property, as well as the time period over which that occurred, I consider it more likely than not that those matters would have been discussed by Mrs Andrews with her parents - including the testator. It appears that they had a good relationship in those years. It could also be anticipated that the social and other conditions of Brewarrina would have been the subject of more than occasional discussion among families from surrounding areas in those years.
Defendants’ evidence
John White
60 Mr John White worked full time for 42 years on the two properties constituting the estate (West Munda and Allambie). He continues to work there. He had lived on West Munda for 27 years with his wife and three children although his wife, June, separated from him in the latter half of 2007. Their three children are now independent.
61 He was withdrawn from boarding school in Orange by his parents when he was about 15 and, using his words, ‘told to return to the farm to assist Dad in the feeding of dying stock’. He then returned to live and work on Allambie where he has remained and worked for the rest of his life. His farming duties commenced with primarily general labouring duties and then working in all areas, increasing to the point where, after his father, the testator, turned 60, was managing all aspects of the farming business from about 1980 onwards.
62 Mr White’s evidence is that for 35 years up to the date of his father’s death he worked on both properties without being paid (other than for small amounts) or receiving a regular wage for working on the farm. He used to work on the farm seven days per week. He acquired his own sheep flock from the early 1970’s which he operated on the family property and on an adjoining tank property block at Winlow which he leased and still leases. He has had that lease since 1976. There was no valuation of that lease nor of the costs or circumstances of its acquistion.
63 Between 1974 and 1986, Mr John White also did part-time contracting work on neighbouring properties. He received income for that work, much of which he gave to his parents. That part-time work continued until early 2000. However, there was little income paid given the reduced financial circumstances of the farming business. Paragraph 10 of Mr White’s affidavit of 10 December 2007 sets out the farming expenses he has met on the properties over the years.
Current financial position
64 Mr John White has 1500 ewes and some lambs worth about $102,000 and some cattle worth about $12,500. He has a truck cruiser worth about $5,000 and a double cab truck worth $5,000. He has a debt to Elders Rural Finance worth $160,000. He and his brother took over the debt of his father on the testator’s death. He and his brother receive agistment income from the farm of about $6,900 per month.
65 He has an ongoing 5 year renewable Rural Lands Protection Board (formerly the Pasture Protection Board) lease on an adjoining 1200 acre property at Milroy.
66 A complicating feature in determining the contributions and entitlements of the parties is in determining what, if any, family law or other claims there are against the two sons. I infer from the evidence that Trevor White has made some financial provision for his first wife. The elder son of the testator, John White, separated from his wife, June in 2007. She will presumably have a claim based on their 27 year marriage which produced three children. The contributions June made to that marriage took place on the farming properties the subject of these proceedings where at least some of the evidence is that there was subsistence living. Both John and Trevor White have each commenced new relationships of some recent standing. John White’s financial position both in terms of needs and potential liabilities is therefore the subject of some uncertainty.
Ongoing support for mother
67 John and Trevor White each pay $30 per week for their mother’s rent. Mrs Beryl White pays the balance of $40 per week from her own pension. My impression from the evidence is that both sons travel to Warwick to see their mother. While she is currently living in independent accommodation, she is aged 84. Some of the likely burden of any actual physical care, at least in the short term, may fall on Cheryl.
Patrick Luttrell
68 An affidavit from Mr Patrick Luttrell, a long and continuing friend of the family, confirmed the involvement of the deceased in the properties and his declining participation in their management after the age of 60. He also confirmed the extent of the contributions made by both John and Trevor White to the improvement of the respective properties.
69 Mr Luttrell said in his affidavit that he was aware that there was an arrangement whereby neither John or Trevor were paid a wage by their parents. He recalled thinking that that was ‘harsh’ but that both the deceased and Mrs Beryl White said that it was intended John and Trevor would inherit the two properties as payment for the support they had given their parents over many years. Further, that ‘the continued operation of the farm would be secured for them via their inheritance’.
Cheryl Kelly (nee White)
70 Mrs Cheryl Kelly, the younger daughter of the testator, said that she was now providing care for her mother in Warwick. She recalled that in the early 1990’s her mother and father making wills the effect of which was for the farm at Brewarrina to pass to her brothers. At that stage she recalled that the day-to-day operation of the farm was being carried out by Trevor and John White.
71 Mrs Cheryl Kelly has said that she accepted unconditionally the specific bequest - and the amount of it - as made in her late father’s will.
Trevor White
72 Trevor White, the second son and youngest child of the testator, lived at the property from his date of birth until 2002. He now divides his time equally between the Allambie property at Brewarrina and Queensland where he lives. The work on the farms now is divided between John White and him. Though the brothers work together, they each have run their own stock on the property for many years.
Contributions
73 Trevor White also worked on sheep stations surrounding the White family properties as a contract musterer and station hand. The money he received from contract work was either retained by him or occasionally used to pay family, domestic, and farming expenses. He also worked as a wool presser and gave some of that additional income to his parents. He was not paid any regular wage by his parents but was allowed to run sheep in paddocks belonging to his parents. Trevor also worked at Allambie in excess of 30 years for no regular wage or income.
74 Trevor White said that he built a hangar on the airstrip on the property using $4700 of his own money. He also purchased a half interest in a plane (a Cessna 150) with his father.
75 In addition he renovated a worker’s cottage on the property and spent $20,000 - $25,000 of monies he had accumulated over the years from contract work. He also made financial contributions for fencing materials and the repainting of buildings and sheep yards using his own funds, and purchased motorbikes for the farms.
76 Trevor White bought a property in Lismore to accommodate his former wife and two children. He ultimately received approximately $84,000 from the sale of that property which he used to pay domestic expenses and some of the farm expenses as well as the cost of the education of his children in Brisbane.
77 During the drought commencing 2002 and for at least two years thereafter, Trevor White said that there was almost no income being generated from the operation of the farm. He therefore sold his sheep for about $15,000 and used that amount to pay domestic expenses for Mrs Beryl White and himself as well as his child support for his children.
78 Trevor White then moved elsewhere to obtain other work. It was agreed that John would remain at the Allambie property with his wife, June. Trevor returns to the property for weeks at a time at least 8 or 9 times a year and whenever his brother John calls on him.
79 Trevor White now has a partner, Vicki Hull, who lives on the Sunshine Coast, in Palmwoods Queensland. That partner, Vicki, and Trevor also made substantial contributions to the testator during the latter stages of his life – bathing him, feeding him, and dispensing his medications. Vicki Hull was, and is, a registered nurse. While his father was sick and in deteriorating health, Trevor White visited his father every 6 or 7 weeks.
80 Trevor White indicated that he wishes to return to live at the farm with his partner, Vicki. He believes that the farm will become viable for both he and his brother once the drought breaks and regular rainfall is received.
Current financial situation
81 Mr Trevor White has sheep worth $30,000, a Commodore worth $5,000 and a motorbike worth $2,000. He has a debt to Elders Rural of $139,000 and to the Commonwealth Bank of $45,000. Those debts included loans he raised to pay off the debts of his father to the Commonwealth Bank and in respect of stock the testator owned at his death.
Financial capacity of farms to bear additional debt
82 Trevor White has approached the National Australia Bank (Affidavit 7 December 2001, para. 28) and has said that neither of those institutions will lend any further money for the farming business. Documentary evidence was also provided to that effect from the Elders Rural Bank (letter 28 August 2007). The effect of that position is that, absent any non-institutional line of credit, it is likely that the farms would have to be sold to meet any financial payment to the Plaintiff.
Beryl White
83 Mrs Beryl White confirmed that Trevor left school when he was 16 years of age and John left school at aged 15 both thereafter working on the properties. She and her husband had decided to execute mutual wills making provision for the farm to become the property of their sons. That was done in recognition of the contributions the boys had each made and given the little reward which had been received by them over the years (affidavit 4 December 2007, paragraph 9).
Deteriorating circumstances
84 Following the making of the earlier wills there was a deterioration in the farming industry and the family business borrowings began to rise. It was those factors which resulted in the reduction of the specific bequest to the sum of $15,000 each to the daughters, Cheryl and Mrs Andrews.
85 Mrs White said that both daughters (including the plaintiff) were advised that it was the combined and agreed intention of both the deceased and her that the farm would be ultimately the property of John and Trevor White. That is, and was, disputed by the plaintiff.
Affidavit of accountant
86 Mr Robert Wright, the accountant for the deceased, Mrs Beryl White and their business/farming partnership, provided an affidavit explaining how the full interest of the West Munda property had come to be entered in the books of the partnership between the testator and Mrs White. Mrs White’s interest (which she has in any event transferred) was agreed to be half the value of the West Munda property.
Submissions
Plaintiff
87 The plaintiff submits that the provision made for her by the testator is inadequate for her proper advancement and education in life. Further, that her present and prospective needs warrant a payment to her pursuant to the provisions of section 7 of the Family Provisions Act.
88 The dominant contribution made by the sons both to the properties and both the deceased and his wife are acknowledged by the plaintiff. However, the plaintiff submits that the testator should have considered that:
· a person of the plaintiff’s years;
· with the medical conditions she had, and has;
· the reduced financial situation she and her husband found themselves to be in;
· living in Brewarrina where she didn’t want to live any more; and
· where she hadn’t wanted to live for some period; and
· where she had no training, education nor experience on which she could fall back in her retirement or when she found herself in reduced financial circumstances.
that she is entitled to have provision made for her which would cover her costs of re-location and new accommodation.
89 The testator and Mrs Beryl White moved to Warwick in Queensland for the final medical treatment for the testator prior to his death. One of the reasons given for Mrs White to remain in Warwick were the better medical facilities available there compared to Brewarrina. That decision was made when it involved considerable disruption to both the testator and Mrs White and when Brewarrina was only some 40 kilometres away by road. There does not seem to have been any suggestion that the testator and Mrs Beryl White would go to live with the plaintiff and Mr Andrews.
90 Mr Singleton submits on behalf of the plaintiff that it can be inferred that the testator should therefore have known that Brewarrina was, at the very least, not a place in which a person in the position of the plaintiff would be able to be properly accommodated once she had attained 60 and in her retirement years and that the plaintiff’s proposal is reasonable in those circumstances. He relies on the passage in Kleinig v Neal (1981) 2 NSWLR 532 at 541 (per Holland J) to the effect that:
‘There are different levels of need for such things….they can range from bare subsistence up to anything short of sheer luxury. A desire to improve one’s standard of living… if hindered or frustrated by the lack of the financial means presents a need for such assistance …(such that) …it may be open to a court to say a wealthy parent ….has failed to make adequate provision… . …Of course if the parent …was poor or of only modest wealth it may lead the court to find that such a testator ought not to have been expected to have provided for needs above a certain level.’
91 He submits that what is proper depends on all the circumstances and must be considered in the light of all the competing claims on the estate of the testator and their relative urgency, the standard of living the family enjoyed in his lifetime and the testator’s ability to meet such claims having regard to the size of his estate – Bosch v Perpetual Trustee Co Ltd [1938] AC 483. Further, that there is nothing which requires the plaintiff to establish that her needs are ‘special’.
Defendants
92 The defendants submit that the plaintiff has not established that the provision made for her was inadequate nor that her needs are established given that:
· she and her husband have secure employment,
· whereby they earn together about $500 plus income in the range of $550 to $1100 per week. Whatever the amount is, their income exceeds their expenses;
· when they remain living in Brewarrina where they have always lived;
· in a house where they have always lived and which, depending on the view taken of the advance by Mr Hutchinson, is virtually debt free; and
· where they have had the financial resources to purchase the adjoining property to their home, albeit worth only about $4000, and to fence that property.
93 It is also disputed that there was any obligation on the testator, let alone the estate, to provide a sum to meet the kind of property or the choice of property in which the plaintiff wishes to reside. The essence of the defence case is that the plaintiff’s desires do not equate to needs nor should they be so recognised; further, that there was no obligation to fund the plaintiff’s desired move to Dubbo or, indeed, anywhere.
94 Counsel for the estate also submits that there is no evidence that Mr and Mrs Andrews would sell their property at Brewarrina, that they would or will in fact re-locate nor is there any evidence that their respective medical conditions would stop them continuing with their respective employments.
95 Mr Millar relies on the affidavit of Mrs Beryl White in which it is stated that her daughter, the plaintiff, had expressed her contentment about living at Brewarrina. Mrs Beryl White was not required for cross-examination on this or other aspects of her affidavit. Further, that there is little evidence which justifies the Plaintiff’s proposal or preferred move to Dubbo or Narromine is a ‘proper’ need or one which should be compensated, that even if there was such evidence the estate is under no obligation to provide any financial assistance to the plaintiff.
96 The defendants also submit that that the wishes of the testator were clear from his will and from the conversations that he had had with all his children including the plaintiff, that the terms of the will represent a just and equitable recognition of the contributions made by all the children of the testator, and in particular, the two sons, as well as fulfilling the representations made by the deceased and his wife to their sons over a number of years.
97 Further, that the sons will continue to live and work on the property which was the only property and employment they had known, without requiring the break-up of the farms and the viability of the farming business. Mr Millar also relies on Kleinig v Neal op cit. in the circumstances that the sons here were clearly directed, if not required, at an early age, to pursue a farming career, which they did. That was not only very much to the advantage of the testator but also resulted in the expansion of the business and the increase in value of the properties.
Issues
98 Against the background of the evidence given and the findings I have made, I am required under sections 7 and 9(2) of the Act to:
Determine whether as at the present time, the provision made for the Plaintiff by the testator was inadequate for her maintenance, education and advancement in life;
And, if so
To make such provision as I consider ought to be made for the maintenance and advancement in life of the eligible person having regard to the circumstances at the time the order is made.
Subsidiary issues
99 There are some subsidiary issues as to:
(a) whether the testator and Mrs Beryl White provided any financial assistance to Mr and Mrs Andrews/ whether Mr and Mrs Andrews provided any financial assistance to the testator and Mrs Beryl White.
Considerable evidence was given about the contributions made to the properties, particularly Allambie, by Mr and Mrs Andrews and their children. I find that, while there were some benefits provided to the plaintiff and members of her family by allowing them to use the testator’s land for stock agistment purposes, those contributions were offset by counter-balancing contributions to the property by members of the family.
(b) The status of the advance of $40,000 made by Mr Athol Hutchison to Mr and Mrs Andrews.
I find that this payment was made at a time when the plaintiff and Mr Andrews were in considerable financial difficulty following the financial deterioration of their business and the real possibility of foreclosure on their home by the Commonwealth Bank. During that period the plaintiff did not receive any assistance from the testator or his family although that period may have coincided with the onset of the drought, the collapse of the wool market and the downturn in the farming industry generally. While the debt to Mr Hutchison may not be legally enforceable, I have no doubt that it remains outstanding and that both Mr and Mrs Andrews regard it as a debt to be paid as a priority – particularly if they sell their Brewarrina property to move elsewhere.
(c) Credit.
The parties have each raised credit issues. The defendant has attacked the credit of Mr Andrews and inferentially Mrs Andrews. The plaintiff has attacked the credit of Mr John White.
Counsel for the defendants refers to nine matters on which he submits that an adverse credit finding should be made in relation to the plaintiff. The principal matters on which this submission is based is that she did not disclose in her affidavit material that Mr Andrews had an account with the CBA containing about $15,000 as well as a cash management account. There were other matters relating to whether there had been updated information on, for example, whether debts for relatively small amounts said to be outstanding had in fact been repaid.
While these matters of non-disclosure relate to Mr Andrews, counsel for the estate submits that the plaintiff knew that her assets and income were an issue in the proceedings and had stated that she and her husband were in reduced financial circumstances. Given the principles outlined in CGU v Ferrcom P/L (1991) 22 NSW LR 389 at 418, he submits that that ‘failure in the plaintiff’s case to advance matters which would have exposed facts unfavourable to a party’ (per Jones v Dunkel (1959) 101 CLR 298 per Windeyer J at 320-321) should be taken into account in the assessment of Mrs Andrews’ evidence generally, and specifically in relation to the assessment of her needs and that of the family.
Credit of Mr John White
100 Mr John White was criticised on the basis that he did not disclose the precise date or time of separation from his wife - being August rather than December, 2007 - in circumstances where the case he put before the Court was that he wanted to remain on the property living with Mrs June White.
101 The plaintiff submits that the failure to disclose or update the accurate position as to the separation should be taken into account in finding that his future needs and the circumstances of his family and dependent wife were not as claimed.
102 I accept Mr White’s evidence that the breakdown was something that took place over a period of some months and that, given his wife’s occasional return to the property when she was removing other items, he was unclear as to precisely when the final separation occurred. Moreover, the fact that his wife had left the farm and the relationship, and that that separation appears to be permanent, is a matter which may be to his detriment.
103 Although it is a matter of speculation, Mr White may now be faced with a family law claim by his former wife based on the circumstances of a 27 year marriage which produced three children. Similarly, the quantification of any such claim in any proceedings which may occur is a matter for speculation but it may have the effect of reducing the size of Mr John White’s ultimate interest in what he receives, where he works and his income.
104 In those circumstances, it does not seem to me that the non-disclosure of the precise date of the separation - if that is what is was - was a matter designed to advance Mr John White’s interests and I do not take it into account against him in any adverse way. He also did not disclose the leasehold interest he held in the adjoining property at Milroy. But, as with Mr Andrews, that non-disclosure seems to have occurred because each of them considered those matters outside the purview of, and being irrelevant to, the litigation rather than arising from any intention to deceive the other side or the Court. In any event the amounts involved are small, both actually and in relative terms, given the size of the estate.
105 I do not propose to take these matters into account as being non-disclosures sufficient to disregard or disbelieve the testimony of any party. Such non-disclosure as has occurred is not of the same level as Mann v Starkey [2008] NSWSC 263 per White J at [24] and [29] and Diver v Neal [2008] NSWSC 304 per McLaughlin ASJ at [16] and [19].
Matters for determination
106 Against the background of the evidence given and the findings I have made, I am required to:
Determine whether as at the present time, the provision made for the Plaintiff by the testator was inadequate for her maintenance and advancement in life.
And, if so
To make such provision as I consider ought to be made for the maintenance and advancement in life of the eligible person having regard to the circumstances at the time the order is made – section 9(2).
Onus
107 The onus is upon the plaintiff to satisfy the Court that the provision which was made was ‘inadequate for (his or her) proper maintenance, education and advancement in life’.
Criteria
108 What is proper maintenance and support must be relative to the applicant’s age, gender, condition, and mode of life and situation generally. The measure to be applied is not what is being given to another (here, in this case particularly the sons) but what the applicant needs in her proper maintenance giving due regard to all the circumstances of the case. It is not necessary, in order to establish a moral claim, for the plaintiff to show necessitous circumstances or a special need: In re Harrison (deceased), Thompson v Harrison [1962] NZLR 6 at 13; Gorton and Ors v Parks (1989) 1 NSWLR 1 at 9.
109 Events which are reasonably foreseeable at death may be taken into account provided hindsight is not substituted for reasonable foresight: White v Barron (1980) 144 CLR 431, at 448-449. In Bosch v Perpetual Trustees Co Ltd [1938] AC 463 at 478-479, Lord Romer stated that, in answering this first question, the court: ' ... must place itself in the position of the testator and consider what he ought to have done in all the circumstances of the case, treating the testator for that purpose as a wise and just, rather than a fond and foolish husband or father.'
110 The general approach is that “need” need not be simply necessary to the circumstances. The size of the estate and the existence of any other moral claims on the testate are highly relevant. Nor is need limited to immediate need, contingencies may be taken into account.
Time of determination
111 The second question of ensuring that proper provision is made is to be decided upon the facts as they are found to exist at the time of the making of the order: Dun v Dun (1957) 99 CLR 325, at 331; Goodman v Windeyer (1980) 144 CLR 490.
112 In Hawkins and Anor v Prestage and Ors, unreported; SCt of WA; Library No 7469; 20 January 1989, Nicholson J said: 'When determining whether a claimant, who is a mature child, has been left without adequate maintenance relevant considerations are what a testator has provided in his lifetime, the claimant's own resources, the manner in which the claimant has conducted him or herself towards the testator or testatrix, whether the claimant has contributed to the building up of the estate or has helped the testator in other ways that may give the claimant a special claim on the bounty of the estate.'
Comparable authorities and principles
113 In Hunter v Hunter (1987) 8 NSWLR 573, an adult son was awarded $60,000 out of a total estate of $850,407. The context was a testator who was a farmer and grazier who formed a partnership with his son. Due to long-standing and violent disputes between father and son the partnership was terminated in 1950 with a younger son replacing the plaintiff. The testator then assisted the plaintiff in the purchase and subsequent enlargement of a property and its later replacement with another property. The plaintiff became eccentric on occasions, drank heavily and exhibited poor management ability of this property. That resulted in severe liquidity problems as well as bitter disputes with the testator and illness. The plaintiff then moved to a suburban house in Canberra where in 1982 after alcohol related problems he became an invalid pensioner and his wife found employment as a tea lady earning $12,000 per year.
114 Kirby P felt that interference of the Court was warranted, confining his attention to the facts which existed at the date of the death of the testator, whether he knew of them or not. and all of the eventualities which might, at that date, reasonably have been foreseen by a testator who knew the facts. The appellant was granted a legacy equivalent to $60,000 That amount had been proposed by the appellant in order to permit him to upgrade his house plus incidental expenses.
115 The facts in Hunter are distinguishable to the case at hand – in particular, that there, no provision whatsoever was made in the will for the plaintiff.
116 Kleinig v Neal and another [No 2] 2 NSWLR 532 concerned a summons under the Testator’s Family Maintenance and Guardianship of Infants Act, 1916, seeking an order making provision out of an estate for the plaintiff, an adult son of the testator father.
117 The plaintiff was an adult able-bodied son capable of and earning his own living. There was a net distributable estate of approximately $350,000. The deceased’s will left each of the plaintiff and his brother a legacy of only $1,000. The will then left the deceased’s property valued at $82,880 and incidental tools, equipment etc., to Jeffrey Noblett, the second defendant– property. The residue of the estate was left in four equal parts to Jeffrey Noblett, the RSPCA, and to the Salvation Army.
118 The deceased had led the plaintiff and his brother to believe that they would succeed to the business. They had worked in the deceased’s motor engineering business from 1962 until 1967. All three worked hard to promote the success of the business. Relations between the plaintiff and his father deteriorated over the years. The plaintiff left his father’s employ in 1967.
119 There also appeared to be some jealousy by the deceased in that the plaintiff had become a better racing driver than the deceased himself. The plaintiff said that from 1967 until his father’s death 9 years later, his father’s attitude towards him was one of indifference despite many attempts on the plaintiff’s part to re-establish a friendly relationship.
Need for future capital: Upgrading of accommodation
120 The plaintiff was married with 4 children. He lived in a 3 bedroom house, and sought capital to upgrade to a 5 bedroom house to accommodate his growing family and to advance himself in a business for which he was trained and qualified. His case was that he was handicapped by the lack of sufficient capital to acquire the premises and the equipment necessary to be able fully to exploit the talents which he had.
121 Reliance was placed upon the fact that it was the deceased who had led or directed the plaintiff into learning the trade of an automotive engineer and who had encouraged the plaintiff to devote himself to the acquisition of a high level of specialized knowledge and experience in that trade. The plaintiff’s case was that he had worked for his father in his father's business for more than seven years, working hard and for long hours helping his father to build up the father's business. It was argued that those facts placed a moral obligation on the deceased to provide for the plaintiff the financial assistance without which the plaintiff could not advance himself in life to the extent of exploiting to the full his skills in the trade which his father had taught him and which was the only trade he knew.
122 The defendants submitted that the plaintiff was an adult able bodied son who, during the deceased's life, had proved himself able to make a living and maintain and support himself and his family. It was argued that the court had no jurisdiction to make an order in the plaintiff's favour unless the plaintiff established some special need or some special claim upon his father's bounty; further, that no such special need or special claim had been established.
123 Holland J found at 541 that the testator ought to have made substantial provision by his will to assist in the satisfaction of needs of the kind that the plaintiff put forward in support of his claim.
- ‘As a legacy of a paltry $1,000 fails utterly either to meet or assist in meeting the plaintiff's needs, I find that in all the circumstances of the present case the will failed to make adequate provision for the plaintiff's proper maintenance and advancement in life and that, therefore, I have jurisdiction to make an order under the statute’.
124 His Honour (at 541) did not concern himself with whether the plaintiff has made out a need or a claim that could be called “special”:
- ‘I find nothing in the terms of the statute or in the doctrine laid down by Bosch's case [1938] AC 463, to require the court in every case or any case to approach the claim of an adult son for provision out of his parent's estate for his maintenance and advancement in life with the a priori view that he will be unable to succeed unless he comes up with a need or claim that can be considered to be “special”. In my opinion, the plaintiff in the present case has shown a need for which, in all the circumstances of the case, the hypothetical testator in the position of his father ought to have made some provision’.
125 Holland J on a claim by an adult able bodied son under the New South Wales Act it is not essential to the exercise of the court's jurisdiction to find that the claimant had some special need or special claim.
Family farm cases
126 The legislation does not identify the family farm for special treatment and there are no special rules which apply to such cases. However, there are common factors in such cases which are conveniently referred to and summarised in J K de Groot & B Nickel, Family Provision in Australia 2nd ed Butterworths at 45 ff.
127 Those cases make it clear that there are many cases where the strong moral claim of a son - or in this case, sons - who inherit the farm is a major factor in many cases – particularly where as here such siblings have stayed on the farm and have worked for many years on low income.
128 In White v Chambers (unreported SC (WA), Franklin J, 1404/1982, 27 February 1985) a testator left his whole estate to his son. He was survived by the son and three daughters. The net value of the estate was $550,000. The daughters were awarded $100,000 each which meant that the farm in that case would have to be sold.
129 In Gillis v Laverty unrep. NSW SC Waddell CJ in Eq, a testator left his farm to his son and $10,000 to a daughter. The net value of the estate was $368,000 of which the farm made up the greater proportion being $358,000. Provisions were made for the daughter to receive $10,000 at the son’s discretion over a period of 10 years by instalments of $1000.
130 The plaintiff was aged 51 at the time of the testator’s death. She had no skills for any particular employment and was substantially wholly dependent on her husband with a half share in the family home with her husband and a contingent interest in his superannuation. She had also received sums during the testator’s life. She sought a capital sum of $150,000. She was awarded $50,000 in addition to the legacy provided for her under the will.
131 In Davey v Fairhead (1996) ACL Rep 395 WA 7, a testator left his daughter an annuity of $5000 charged on his equity in the partnership together with a life interest in a $183,000 property. The applicant net value of the estate was $1.4 million of which the farm formed $1.38 million. On appeal, the Court found that the plaintiff’s claim to the estate should be satisfied by the provision of a lump sum of $50,000 together with an annuity of $12,000 indexed to the CPI, charged on the estate in addition to her life interest.
132 Lloyd v Nelson (1985) 2 NSWLR 291 involved an estate of about $117,000. The plaintiff was the second son of the deceased. He received $10,755 together with free accommodation in the deceased’s home. He had a limited education and limited skills. There were a number of other beneficiaries, none of whom were found to have any special claim on the deceased.
The plaintiff received the sum of $25,000.
133 Gorton v Parks (1989) 17 NSWLR 1
Bryson J held that the concept of needs could extend, where appropriate, to capital and assets as well as to sustenance. The concept of need must be considered relatively to available resources, and bearing in mind, in respect of adult children, that the need may not be “for the bread and butter of life but for a little of the cheese or jam that a wise and just parent would appreciate would be provided if circumstances permit”.
134 The estate there was worth $740,000. There were five children with whom the testator was ‘mean in his dealings with them; mean in money and mean in spirit’.
135 Mrs Parks, the principal beneficiary in that case, was a person completely dependent on her husband with no capital to protect herself and a person for whom the testator had a moral duty to provide. The other children, who appear to have been estranged from the testator, received legacies or interests in various properties.
136 In Smilek v Public Trustee [2008] NSWCA 190, the Court of Appeal looked at the issue of what was the “proper” provision for the advancement in life of an applicant. It needs to be noted that that case concerned an estate which would otherwise have passed to the Crown bona vacantia and that there were no other claimants. Here, there are other claimants each of whom had more substantial claims than the applicant.
Prevailing community standards
137 In Smilek the Court of Appeal considered that the future retirement needs of the applicants were an important consideration in circumstances where each of them had net assets of $700,000 and a small estate was involved. The Court emphasised that such determinations need to be guided by consideration of the provision which is right and appropriate in accordance with “prevailing community standards”.
138 In the 1960’s the then prevailing social expectations meant that there was nothing out of the ordinary for a woman aged 19 in the position of the plaintiff to leave home to get married without any effective training or work experience which she could fall back on to provide for herself in her later years. Further, in many rural family farming situations, there was an expectation that the sons in the family would be trained to assist in and ultimately take over the running and operation of the farm. That is essentially what occurred here.
139 While I am mindful that the jurisdiction of the court should not be exercised in a way which ignores the clear intentions of the testator – particularly where there was a later alteration of the will to meet subsequent changes in financial and other circumstances - I am also required to exercise my discretion in a way which gives expression to current community values. That includes the need for (primarily female) applicants who have not been given or allowed the opportunity for training or education to be able to provide, where an estate is of sufficient size to make such provision, for some level of income earning potential or financial security in their retirement years. As was said in Gorton v Parks (1989) 17 NSWLR 1 per Bryson J at 7, the courts need to be open to a concept of needs which can, where appropriate, extend to capital and assets as well as to sustenance.
140 Here, in my view those standards should also apply in the circumstances of this case to ensure provision is made for a woman of the plaintiff’s age and medical condition, who is essentially without qualifications or experience, to provide for her future needs, particularly by way of income and accommodation to the extent that is proper given the other matters that I have outlined.
Consideration and findings
141 The plaintiff accepts the entitlements of the two sons of the testator to the substantial proportion of his estate. That is only appropriate given the son’s contributions over their lives to the properties by way of unpaid or lowly paid labour.
142 Although there were limited payments of salaries to the sons, the testator permitted them to agist their various flocks of sheep and stock on that property over the entire period of time that they worked on the farm. They also built up the experience they each did in the grazing industry and farm management throughout their working lives.
143 Mrs White confirmed that her husband slowed down in terms of his working activities from the age of 60 and that he totally stopped working from the age of 70. Since that time, both sons have worked the farm and business, receiving the benefits by way of income from it but also meeting the debts of the farm and the business. Those debts were considerable and it must have been a great relief to the testator and Mrs White to know that the debts would be met by their sons. In part that has been recognised by Mrs White’s actions in transferring her interest to the sons but, in terms of considering the motivations and intentions of a reasonable testator at the time of the hearing, it seems to me that that would have been a proper factor to have been taken into account.
144 I also accept that each of the sons made some contributions to their parents and the farming business from each of their own earnings at various times but that those contributions in direct physical or cash terms would have been fairly minimal. Further, they each made direct contributions to the running of the farm at increasingly significant levels of importance after the testator turned 60 and to the extent of running the farm almost completely once the testator turned 70. Thereafter the testator and his wife were almost totally dependent on them until his death. That period included the events surrounding the re-location of the testator and Mrs Beryl White to Warwick and the testator’s final hospitalisation and other medical treatment. Of significance also is the fact that both sons have contributed over half of Mrs Beryl White’s rental thereafter.
145 Their respective joint and several contributions to the testator and his dependent wife, to the farm and property before and after the testator went into retirement and eventual decline, as well as to Mrs Beryl White since the testator’s death, are also significant. They substantially outweigh any contributions made by the plaintiff which I find to be limited.
146 However, the benefits each of the sons received from their father included the fact that they were able to build up their experience, contacts and knowledge within the grazing industry.
147 That practical experience was supplemented by them being able to run their own stock on the properties over the years from when they were each young men. That was important to each of them, both financially and in terms of their capacity to earn income from this field for the remainder of their respective working lives. The plaintiff did not receive that experience nor training, nor does she have the comparable working capacity.
148 I also note that the estate, although substantial, was subject to the very strong competing claims of the testator’s wife and, possibly, a claim by Mrs Cheryl White – although I do not have details of her financial or other circumstances. The exercise is not one of attempting to produce an overall fair division of the estate nor to have all the children put in the same position as the others.
149 Against that background and the size of the estate, the question is whether the provision made for the plaintiff is inadequate given all the factors I have outlined.
150 Here, apart from the provision of the legacy of $15,000, no provision was made out of the testator’s estate for the plaintiff. In addition, the testator made little or no provision during his lifetime, certainly after the plaintiff’s secondary schooling, to provide her with any training or education or put her in a position where she could earn other than a very low level of income. The plaintiff at the age of 60 effectively has had nothing from the testator on which she could rely in her later years, especially given the financial problems which had befallen her and her husband, and into her retirement.
151 I accept that Mrs Andrews told her parents at the later stages of the testator’s life, and particularly at the time of the break-down in her husband’s butchery business and the subsequent negotiations with the CBA that she that she was unhappy living in Brewarrina and that she wanted to move from there. There were likely to be a number of reasons for that move, including her desire not to be subject to the same experiences she had had in Brewarrina, particularly with the numerous burglaries that there had been to her property. She also had the need to provide for her other living costs.
152 In my view, the testator would have been aware that the plaintiff and her husband had gone through difficult financial times including the loss of their business and the threatened foreclosure on their home. Further, that as a direct result of the way the testator had organised the farming and family affairs over the years, the plaintiff had not been able to build up, nor rely on, any comparable work or income-earning capacity as had her two brothers over the years they had worked the farm. She was then left in the situation as at the date of the testator’s death that she was unable to earn other than a very basic wage doing essentially unskilled work with limited potential when she needed to provide for her retirement.
153 Section 9(2) of the Act also refers to what provision has been made :
‘either during the person’s lifetime or out of the person’s estate’.
154 It seems that very little was given to the plaintiff in financial terms during her lifetime.
155 I find that, given the size of the estate, the provision of such assistance as the plaintiff was left by the bequest of $15,000, that was inadequate for her maintenance, education and advancement in life.
156 I do not think it appropriate, given the size of the estate nor the competing claims, that the proper provision for the plaintiff should include the provision of a home in Dubbo nor even the full cost of a property at Narromine given the quantification of the likely cost of such properties on the relatively scant evidence before me. Nor do I think that Mr and Mrs Andrews’ plans to move are far advanced, or even firm, on the evidence.
157 Rather, I consider the more relevant consideration is the plaintiff’s future retirement and income needs - of which her accommodation is one, albeit a major, component. I propose to order that an amount be provided to the plaintiff which will provide a capital figure, which, when taken with the net equity that Mr and Mrs Andrews have in their home, and given their likely continued income for at least the next two or three years, should go some way to permit them to be re-accommodated in smaller but more suitable accommodation, regardless of where they decide to live, during their retirement. I accept that they are firm in their intention to move but that the location and quality of that lifestyle, and the timing of that decision, will depend, at least in part, on the outcome of these proceedings.
158 Having considered all those factors I consider that the amount which should have been provided for the plaintiff is $65,000, in other words, an additional amount of $50,000 to that provided under the will.
Exercise of discretion: balancing considerations
159 Having determined that that is the correct amount to be awarded, I have then considered the respective positions of the parties to determine if the exercise of my discretion is appropriate in terms of the respective amounts available, and likely to be available, to the parties. In part this requires some speculation as the precise amount available to the estate after the payment of costs associated with this litigation are determined is unclear. Further, the extent of the potential liabilities of Trevor, and particularly John White, are not known – nor are the financial consequences of their present relationships clear: possibly even to each of them.
160 The process of looking at the overall impact of the adjustment proposed is further complicated given the parties’ respective ages, their working lives and the uncertainties in selling rural properties and properties in small country towns in the current environment.
161 The intentions of all the parties are also unclear as to their respective futures, location, accommodation and employment - presumably for the reason that all sides are waiting until the outcome of this litigation.
162 As far as the plaintiff and her husband are concerned, that figure needs to be assessed in terms of their needs to purchase a property in the Narromine area in the approximate price range that has been detailed, whether and if so, when, they are able to sell their property in Brewarrina and they have some of the cash and assets which may be available from the continued operation of the mail run, that they meet the liabilities they have and are unable to refinance or extend their advance from Mr Hutchinson. Adopting the round figures used in the evidence and to the extent that they have been agreed in submissions, the total net position and the proposed award then needs to be considered against the net assets of the estate, the sheep and relatively few other assets of John and Trevor White, the agistment income they have received and are likely to receive from the estate property as well as the payment of the outstanding legacy to Cheryl White.
163 In my view the award then represents an appropriate adjustment to the terms of the will to meet all the factors I have outlined above.
Implementation and timing
164 I have raised with counsel whether the effect of any order may be to force the sale of the farm – particularly in view of the evidence that Elders Rural Bank has refused any further finance on the property. Both sides ask that should I determine that an amount be provided to the plaintiff that I specify the amount and give liberty to the parties to bring in a minute of proposed consent orders in the event that agreement can be reached or, if that is not possible, to have the matter argued further as to methods of implementation.
165 The bulk of the estate is made up of farming properties which carry stock. There may also be immediate difficulties in selling or encumbering one of both of the properties to achieve the judgment amount. Given that the plaintiff and her husband are presently in their own home with their own incomes, that any proposed plans to move are, at best, inchoate, a period of at least six months should be permitted to run before any interest on the judgment amount will fall due.
.
Orders
1. I order that allowance be made for the plaintiff from the estate of the testator in lieu of the provision made for her in the sum of $65,000.
2. I direct that the parties bring in a minute of orders before 25 September 2008 as to how and when that payment will be made.
3. In the event that the parties are unable to bring in such a minute then I give each of the parties liberty to apply to have the matter set down for argument as to when the payment should be made and any other orders, including orders as to enforcement, as may be necessary.
0
12
1