Ross v Ross
[2002] VSC 544
•3 December 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT WARRNAMBOOL (Sitting at Melbourne)
COMMON LAW DIVISION
IN THE MATTER OF: an Application pursuant to Part IV of
the Administration and Probate Act 1958
No. 1365 of 2002
| JEAN ANNE ROSS | Plaintiff |
| v | |
| KEITH WILLIAM ROSS (who is sued as Executor of the Will of William Henry Ross late of “Pringa”, 950 Terang-Woolsthorpe Road, Ballangeich, Victoria, Grazier) | Defendant |
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IN THE SUPREME COURT OF VICTORIA
AT HAMILTON (Sitting at Melbourne)
COMMON LAW DIVISION
IN THE MATTER OF: an Application pursuant to Part IV of
the Administration and Probate Act 1958.
- and -
IN THE MATTER OF: The Will and Estate of William Henry Ross deceased
No. 901 of 2001
| JEAN ROSELYN McLEAN | Plaintiff |
| v | |
| KEITH WILLIAM ROSS (who is sued as Executor of the Will of the abovenamed deceased) | Defendant |
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JUDGE: | Ashley J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2 December 2002 | |
DATE OF JUDGMENT: | 3 December 2002 | |
CASE MAY BE CITED AS: | Ross v Ross; McLean v Ross; | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 544 | |
Family provision – elderly widow – failure to make adequate provision for proper maintenance and support - nature of provision – need for security of accommodation – income – nest eggs – receipt of age pension.
Family provision – adult daughter – whether moral duty – amount of provision – balance of considerations in each context.
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APPEARANCES: | Counsel | Solicitors | ||
| For Jean Anne Ross | Mr T. Tobin and Ms R. Orr | Stringer Clarke | ||
| For Jean Roselyn McLean | Ms D. Lyle | Melville, Orton & Lewis | ||
| For Keith William Ross | Mr R. Wells | Desmond Dunne & Dwyer | ||
HIS HONOUR:
The Two Claims
Before me are two claims[1] made under Part IV of the Administration and Probate Act 1958 (the Act), arising in connection with the death of William Henry Ross on 4 February 2002, and the will of the deceased dated 26 June 1995.
[1]Though brought by separate proceedings, the claims were heard together, the evidence in the one proceeding being evidence in the other.
The plaintiffs are Jean Anne Ross, widow of the deceased[2] and Jean Roselyn McLean,[3] a daughter of the deceased.
[2]In proceedings issued at Warrnambool No. 1365 of 2002.
[3]In proceedings issued at Hamilton No. 901 of 2002.
The defendant in each proceeding is Keith William Ross, deceased's son, his executor under the will.
The Deceased and His Family
The deceased, born 1 December 1914, was in his 88th year at the time of his death. He had been a farmer ‑ though the extent of his commitment to farming was in dispute at trial ‑ at Ballangeich in the Western District.
The widow, born 23 August 1915, is now aged 87. She and the deceased married on 30 April 1938. So they were married for nearly 64 years.
The deceased and his wife had three children. The oldest is Jean Roselyn McLean, born 29 October 1938 and so now aged 64. Then there is Nancy, born 17 June 1940 and so aged 62. The youngest is the defendant, born 25 March 1943 and thus aged 59.
Throughout their married life the deceased and his wife lived on "Pringa", a property fronting the Terang/Woolsthorpe Road, Ballangeich. It was originally owned by deceased's father, William James Ross. He died in 1952, and he left it to the present defendant. The deceased and his wife lived on the property with deceased's father until the latter's death in 1952; and they continued to live there thereafter, notwithstanding that the property had been left to their son.
Disposition by Deceased's Father
William James Ross, grandfather of the defendant, died as I have said in 1952. He had been a farmer, and his estate included four properties totalling 1,780 acres in all. By his will he left the properties not to the deceased and his wife, but to his three grandchildren on their attaining age 21. In detail, he left two properties, totalling 820 acres, and including "Pringa", to the defendant, one property of 320 acres to his granddaughter Nancy, and a final property of 640 acres to the defendant and his sister Jean jointly. He left his plant, equipment and livestock to the defendant. Before his death, I should add, he had given a property of 320 acres, "Vaughans" to the deceased.
The Will
By his will dated 26 June 1995 deceased
§ Made small bequests of chattels to the defendant's wife and to the two sons of the defendant and his wife.
§ Left his farming plant, equipment and livestock to the defendant.
§ Bequeathed his remaining personal chattels to the widow.
§ Left a 95 acre property ‑ apparently bare land ‑ to the defendant and his wife.
§ Subject to payment of an annuity of $3,000 per annum to the widow, left his remaining real property to the defendant on trust for his sons as tenants in common on their attaining the age of 21, but with the defendant having special power of appointment.
§ Left the residue of his estate to the defendant's two sons on their attaining the age of 21.
The remaining real property consists of some 531 acres at Ballangeich. It is apparently bare land.
There was some dispute as to the value of the real estate. It was valued in the inventory and in the defendant's second affidavit sworn 15 November 2002 at $486,000. But a valuer engaged by the widow valued it at $568,400. In the event, it was agreed between the parties, for the purposes of these proceedings, that the value of the land is $527,200, being, as I understand it, $444,250 referable to the larger parcel and $82,950 referable to the smaller parcel.
The value of the deceased's personal estate, according to the defendant's second affidavit, is $67,620.40. That amount makes allowance for legal expenses of $6,932.06. Those expenses, I was told from Bar table, relate only to the administration of the estate, and not to the costs of these proceedings. The amount of $67,620.40 also makes allowance for rental received since deceased's death referable to the real estate which forms the major asset of the estate. The defendant gave evidence that the annual rental is presently about $30,000 per year; an amount which, it appears, may be indexed.
The Substance of the Widow's Claim
The widow's case, essentially, is that she was married to the deceased for a very long time, greatly assisted his father and then he in the running of the farm, raised their three children and foster children besides, principally cared for him during a long period of his ill‑health, and at the age of 87 was left with a tiny annuity and only, initially by the defendant's grace, a roof over her head. She compares her situation with the circumstances of the defendant and his two sons. So, she says, the defendant has substantial assets. He will further benefit by her husband's will. More of these matters later. Further, she claims, his sons are to be the principal residuary beneficiaries. They are aged 23 and are already making their way in life. Of their circumstances, also, more later. In no way, Mrs Ross claims, could it be said that her late husband made adequate provision for her proper maintenance and support.
In the period since her husband's death Mrs Ross has moved from "Pringa" to Lyndoch, an entity which provides both hostel‑type and nursing accommodation at premises close to the city of Warrnambool. Initially she was accepted there on a temporary basis. But she is now able to remain at Lyndoch on a permanent basis, and she made it clear in her evidence that she will be delighted to do so. She has her own bedroom and bathroom. There is a communal dining room and an activities room. She has made friends. There are dances and bingo. She has visitors frequently, and quite often goes out with her daughter, Nancy, or with other friends.
At an early stage in her proceeding there was a debate between she and the defendant whether the condition of "Pringa" was, as she and others claimed, such that it did not provide her with suitable accommodation. At that early stage of the proceeding, also, Mrs Ross was proposing the acquisition of a unit in Warrnambool in which to live. The dispute with her son about the condition of "Pringa", and the issue concerning purchase of a unit in Warrnambool were, in the circumstances which I described, and subject to one matter to which I shall later refer, no longer live issues at trial.
Mrs Ross' claim, as presented at trial, was that provision should be made for her by way of a payment out of the estate which would secure her accommodation for life; and by payment as well of a lump sum which, sensibly invested, would provide her ‑ together with her aged pension entitlement – both adequate income and a sufficient nest egg against contingencies.
Evidence Pertaining to the Claim by the Widow
For reasons previously indicated I will refer only to evidence which remained pertinent at trial's end. I will omit reference to issues that were not pursued.
There was a good deal of evidence that Mrs Ross provided first her late father‑in‑law and then her late husband with a great deal of assistance on the farm over a long period, and that she gave her husband special care from the time when he suffered the first of a series of strokes in 1988. The widow's own evidence apart,[4] I refer to the affidavits of Colleen Atkinson sworn 3 September 2002,[5] and Edgar Tanner, sworn 5 September 2002.[6]
[4]Affidavit, undated in the Jurat., but 2 September 2002, paragraphs 11, 13, 14, 17, 23, 24.
[5]Particularly paragraphs 17‑20.
[6]Paragraphs 16‑20.
The defendant by his first affidavit in part agrees that Mrs Ross worked on the farm[7] and that she looked after both his grandfather and father in the years of their ill‑health.[8] But he deposes that he worked on the farm from age 16. He disputes the assertion by Mrs Atkinson that his mother was the "principal driving force behind the farm", and he says that by the 1970s he was doing the bulk of the farm work with more limited assistance from his parents.[9]
[7]Paragraph 3, dot points 5, 7, 8 of his affidavit sworn 11 October 2002.
[8]Paragraph 3, dot points 5, 8 and 12.
[9]Paragraph 3, dot point 3, and paragraphs 14 and 15.
He does not dispute that his mother gave care to his late father from about 1988. But he deposes that he had a significant role in that connection ‑ driving his mother to Warrnambool and Mortlake, collecting meals on wheels, paying bills, posting mail, buying groceries, taking them to see the doctor, and undertaking many domestic chores.[10]
[10]Paragraphs 7‑13.
The evidence concerning the amount of work done by Mrs Ross on the farm, and in caring for her husband during his long period of ill‑health, admits of shades of interpretation. But I am well satisfied that Mrs Ross did bear a substantial and protracted burden in each of those connections. The defendant did not particularly impress me with his impartiality, and in the event of conflict in the evidence of he and his mother I should be much inclined to accept the latter's evidence. In any event, it was for the most part corroborated.
I should mention, briefly, evidence concerning the state of the house on "Pringa". I do so only to disavow its importance; because the conditions in which Mrs Ross was obliged to live during her marriage are not decisive of what is adequate provision for her proper maintenance and support.
There is no doubt that the house on "Pringa" is old. There was some dispute, on the other hand, whether it is run‑down, cold and rodent infested. Mrs Atkinson's affidavit[11] supports the first affidavit of Mrs Ross[12] to the effect that the house is run down and rodent infested. So does Mr Tanner's affidavit.[13] The defendant's opinion, however, is that "the house is in a reasonable and tenantable condition",[14] although in the affidavit where he so deposes he does not comment on paragraphs 25 and 26 of his mother's first affidavit which raise relevant allegations.[15] The evidence, overall, supports the allegations made by the widow.
[11]Paragraph 15.
[12]Paragraphs 10, 25, 27.
[13]Paragraph 22.
[14]Paragraph 3, dot point 4 of his first affidavit.
[15]See his affidavit at paragraph 3, last dot point.
I should say something about the evidence pertaining to Mrs Ross' state of health. I do so because, if it seemed that her demise was imminent, or that it was unlikely to be long delayed, there would be reason to be the more cautious in determining the amount of any provision in her favour.
As I have noted, Mrs Ross is now accommodated at Lyndoch. According to her first affidavit, this arrangement is simply the consequence of "Pringa" being an unsuitable residence. She deposes that she is in good health.[16]
[16]Paragraphs 15, 26 and 31 of her first affidavit.
The defendant in his first affidavit specifically makes no comment concerning those paragraphs of his mother's affidavit. But he makes mention of his mother ceasing to drive a motor vehicle altogether in 1993, of taking his mother and father to see the doctor, buying groceries and visiting the chemist, of doing more and more domestic chores for his parents in recent years, of a need for home help in recent years, and of "the home help lady cook[ing] meals and bath[ing] my mother" in the last twelve months.[17]
[17]Paragraphs 7-12.
No medical practitioner went on affidavit in the proceeding. But Mrs Ross gave viva voce evidence; and Exhibit AEB.4 to the affidavit of Antony Brown, the plaintiff's solicitor, sworn 29 November 2002, contains a professional assessment, made I think by a registered nurse, of Mrs Ross' capacities.
Mrs Ross said in her viva voce evidence that she is in good health. Her presentation in the witness box and during the balance of the hearing did not cause me to doubt her reliability as a witness; rather, the contrary. I can at least be satisfied that she is unaware of the existence of any major medical condition. The professional assessment of her capacities is consistent with Mrs Ross being a fit and alert 87 year‑old. The assessment, in the box headed "Major Medical Diagnoses", specifies a single condition: acopia. That means inability to cope; a not surprising description of the circumstances of an 87 year‑old recently widowed woman living in unsatisfactory accommodation well out of town. All in all, I consider it proper to approach the determination of this proceeding on the footing that Mrs Ross is the fit and alert 87 year‑old that she appears to be.
The Essence of and Evidence Pertaining to the Claim by Mrs McLean
I noted earlier that there are two claims under the Act. The second is made by Jean McLean, the oldest of the three children of deceased and his wife. By paragraph 12 of her first affidavit, sworn 2 October 2002, Mrs McLean deposes that, contrary to the assertion made by clause 11 of the will, her father did not make adequate provision for her in his lifetime.
The burden of Mrs McLean's evidence, in the course of which I will interpolate a few observations of my own, was this:
§ Between 1952 and 1963 her parents had the use of 320 acres of land left her by her paternal grandfather.[18] They neglected the condition of the land and she had to put money into it.
[18]She and the defendant were jointly left 640 acres in all; apparently the land was in two titles.
§ The cost of her secondary schooling was met by her grandfather.
§ For five years after she left school she and her mother in essence undertook the necessary farm work on her parents' property. She did that work unpaid. Her father had no interest in farming. Any work that he did was done under sufferance. His interest was in "ham radio".
§ At age 18 her father provided her with a motor vehicle; but he took it back when she married about three years later, in April 1959.
§ Contrary to the way in which her father treated her when she married, he gave her sister 100 acres of land when she married. Her sister still lives on that land.
§ In about 1968 she sold the land left her by her grandfather. Her father was opposed to her doing so. She did so in order that her family could make a life for themselves. In 1967 she and her husband had sold a small land holding which they owned. The proceeds of the two sales were used for the deposit on a property at Gringegalgona, which is apparently near Coleraine, some distance from Hamilton. She, her husband and their three children moved to that property. She and her husband have lived there ever since. It is 856 acres in size, and grazing land.
§ She saw less of her father after she and her family moved to Gringegalgona. Just when the move occurred was not made quite clear by the evidence. It seems not to have been immediately after the two property sales in 1967 and 1968. But clear it is that there was a period of 30 years, give or take, when there was very limited person to person contact between Mrs McLean and her father.
§ Whilst Gringegalgona is 100 miles distant from "Pringa", and thus made contact with her father more difficult, the substantial reason for their having little contact was a falling out which had its genesis long before. The falling out was not of her making. Her father was cold and unaffectionate. He mistreated her mother, and she, as the eldest child, stood up for her mother. After her marriage, there was a period when she and her family visited her parents regularly. Her father ignored her, just as he ignored her children[19] and just as he refused to have anything to do with a daughter of one of Mrs McLean's daughters who was taken to "Pringa" at the request of the widow about a decade ago. Deceased said many times over the years that his father should not have left property to she and her sister, and that he would leave her nothing, as his property[20] had to be left in the family name.
§ She visited her parents only a very few times a year over a protracted period, and not at all after her husband lost an eye about eight years ago.
§ She and her husband retain a quarter share each in the property at Gringegalgona. They transferred a half share in the property to their son, Jeffrey. They did so because he worked on the farm without wages for a long period after leaving school at 15. He continues to work on the farm, though not full‑time. He is now aged 40, nearly 41, and remains single.
§ The gross value of the interest retained by each of she and her husband in the property is about $120,000. But the property is mortgaged, plus their combined net interest in the property is in all about $170,000.
§ Plant, equipment and stock is owned in the proportions to which I referred a moment ago. The value of the interest of each of Mrs McLean and her husband is $20,000 to $30,000.
§ She has about $10,000 in investments, and she and her husband own a 1987 Magna motor vehicle.
§ She receives a full age pension.
§ She and her husband would like to move closer to (?) Hamilton, retiring to a smaller property likely to cost $250,000.
[19]They were born in 1961, 1963 and 1964, whilst Mrs McLean was still living quite close to her parents' residence.
[20]Inherited, it seems, from his mother.
Thus far, I have essentially referred to Mrs McLean's evidence‑in‑chief. In cross‑examination she accepted that she had a very poor relationship with her father. She conceded that she had virtually made a decision to live her own live independently of her father, but said that she had unsuccessfully attempted to reconcile with him. She agreed that she and her husband had established themselves on their own land, and had not been financially dependent upon her father. She agreed that, in the period when she and her husband travelled to "Pringa" from Gringegalgona it was more to visit her mother. She said that she would not write letters to her father ‑ "Why would I want to write any letters? No way".[21] She gave him no presents because he never gave her anything.
[21]T 35.
The defendant, by his first affidavit, agrees that the deceased made no provision for Mrs McLean in his lifetime.[22] He disputes his sister's allegation that she and her mother entirely ran the farm for a five‑year period. He says that his father ran it and that his mother and sister assisted.
[22]Paragraph 16, dot point 3.
The valuations of land, plant and livestock made by Mrs McLean in her affidavit are informal, and unsupported by formal valuations. But they were not challenged in cross‑examination, and I consider I should accept their reliability generally.
Counsel for Mrs McLean submitted that her client should receive provision by way of a legacy of $125,000. Counsel noted that this would repay the mortgage liability of her client and her husband, enable them to buy a new car, and have a small nest egg.
Counsel for the defendant submitted that Mrs McLean had not established an entitlement to provision. But if there was such an entitlement it should be satisfied by a legacy of $20,000 to $30,000.
I shall have more to say about the competing submissions later on.
The Circumstances of the Defendant and His Two Sons
The circumstances of the defendant and his two sons became clear at trial. Regrettably, the defendant's account of the circumstances of his sons as set out in his first affidavit was defective. In respect of his son Peter it substantially mis‑stated the position. The defendant's evidence at trial was not frank.[23] I do not accept that this was unintended error.
[23]See, for instance, what he said about the McKenzie land at T 45‑46.
In any event, the following is the position:
§ The defendant, who told me that he is in good health, presently owns 960 acres of land in three parcels. He was left the land by his grandfather. It is about equivalent in quality to the land the subject of his father's will. It is worth something over $1 million. He farms the land in partnership with his wife. He has farming plant and equipment of unstated value. His property is under‑stocked. It is presently carrying about 250 cattle; and apparently a few sheep. He owns the stock; or at least an interest therein, for it should be assumed that the stock is partnership property. By his father's will he and his wife are to inherit the smaller of the two properties owned by the deceased. Its value, agreed between the parties, is $82,950. Over the years he has conducted a radio and television repair business. That has been profitable. Presently, he is scaling it down. He has evidently been careful with his money. So, for example, he admitted insisting that his mother pay him petrol money when he drove her to town for groceries and the like.
§ Peter Ross is aged 23 and is single. He completed a degree in computer science in 2001. He lives in Melbourne in rental accommodation. He presently has a job which provides, on a contract basis, remuneration of about $45,000 per year gross. He was given $5,000 by the deceased when he was young.[24] With investment return and accumulation of moneys earned in part‑time jobs during his university years, and unemployment benefits at times, he now has $30,000 invested. He also owns a car, a 1989 Magna sedan, paid for by his father and worth about $4,000.
§ He is the remainderman in a property of something less than 200 acres at Ellerslie. The property is presently the subject of a life interest in favour of a woman in her mid‑80s. His father intends to pass his land on to he and his brother. As matters stand he will acquire part of deceased's residuary estate. He has a HECS liability of about $12,000. He said that he instructed his father that he earned much more than the $30,000 a year to which the latter deposed in his first affidavit.
§ Owen Ross is aged 23 and is single. He lives with his parents and pays for his food, about $200 a month. He left school at age 18. He was out of work for a period, undertook a TAFE course in automotive engineering, could not find a job in that type of work, and took up dairying. He has been in that occupation for three years. He earns $30,000 a year after tax, plus superannuation. He owns a 1988 Holden Calais sedan which presently has a "blown" motor. It appears that, as in the case of his brother, he was also made a gift of money by the deceased when he was young ‑ whether it was $5,000 or $10,000 is uncertain. Whichever be the case, little of it now remains. He said that he presently has about $300 in savings.
[24]His father agreed in cross‑examination that the amount was $10,000.
The Circumstances of Nancy Wilson
The third child of the deceased and the widow is Nancy Wilson. Little evidence of her circumstances was placed before the court. She is married, she lives in the Warrnambool area, she has her mother's car and uses it to ferry her mother about. She was given 100 acres of land by her father when she married. She still lives on that land. It is worked as a dairy farm. She is not a beneficiary under her father's will and she makes no claim under the Act.
Mrs Ross: Her Pension; Accommodation at Lyndoch
Mrs Ross presently receives a full age pension. The basic amount is $429.40 a fortnight. It seems likely that a pharmaceutical benefit of $5.80 a fortnight is added to the basic amount, the total thus being $435.20. The amount of $435.20 is not, exactly, the amount used by counsel for Mrs Ross or for the defendant in their final submissions. But the differences are trifling, and could not affect the burden of the competing contentions.
The pension is means tested. The present regime is as follows: reference is had both to assets and income but not to assets and income in a combined way. Assets are deemed to earn interest at rates specified by the Commonwealth. At present, assets up to $34,400 are deemed to earn interest at 2.5 percent, and assets above that figure are deemed to earn interest at 4 percent. A pensioner such as Mrs Ross can earn up to $3,016 per year in deemed income ‑ that is, $58 a week ‑ before the pension is affected. From that point, deemed income (the words "interest" and "income" can be used synonymously in this context) operates to diminish the pension. There is a certain pension reduction for each dollar per week of deemed income exceeding $58 per week. There is a point in reduction for deemed income at which the pension entitlement disappears. That point is not reached before the means test upon assets alone commences to impact upon the pension. There is a stage at which both the impact of deemed income and the value of assets would each lead to a reduction in pension ‑ though not to an identical reduction. At that point the pension is calculated by reference to the greater of the impacts provided by the application of the deemed income and assets tests. The way in which the scheme operates is illustrated by Exhibit SJG.4 to the affidavit of the financial adviser, Mr Greenham, sworn 29 November 2002.
Out of the pension paid to Mrs Ross, Lyndoch takes a daily residential care fee (the daily fee). Presently it is $25.08 per day; that is, $351.12 per fortnight. $25.08 is the basic fee payable by a pensioner. The amount of the daily fee is income tested. It rises if the resident has deemed income beyond a certain level.
When a person is admitted to Lyndoch, that person's financial situation is assessed to determine whether an accommodation bond is payable. Mrs Ross' position was so assessed. It was determined that no bond was payable. But the parties to the proceeding accepted that if her situation changed Lyndoch has power to and will in fact re‑determine whether a bond is payable; and if it is, then the amount of the bond. The maximum amount payable by way of bond is currently $107,000. Whatever the amount payable, it may be paid by a lump sum or by instalments to which interest is added at a rate determined by the Commonwealth. There is a mechanism by which, on a resident dying or leaving Lyndoch, the amount of the bond ‑ less an amount not exceeding $14,340 ‑ is repayable. The amount of $14,340 represents $239 per month for five years' accommodation. The amount withheld is proportionately less if the period of accommodation is shorter.
In their submissions counsel for Mrs Ross and the defendant produced tables and raised oral arguments as to the impact upon pension entitlement and the daily fee in the event of my ordering that provision of different amounts be made in her favour. I should make two points. First, it was common ground that the impact of the provisions would not be affected by the amount of any accommodation bond that I might order should also be paid. That is, the amount of the bond would not be added to the amount of the provision in means test calculations. Second, the circumstance that a claimant is in receipt of a pension may be taken into account, but with qualifications, in determining questions which must be determined under Part IV of the Act. The qualifications were clearly stated by Hedigan J in King v White[25].
[25][1992] 2 VR 417 at 422 and 424.
What I have said about the amount of Mrs Ross' pension, the varying assumptions built into the means test scheme, and the daily fee payable to Lyndoch support the exercise of a degree of caution in building a provision around a pension entitlement; and it was the nature and size of the provision which was the critical debate in the case of Mrs Ross. That is not to say, in this I agree with the submission of counsel for the defendant, that I should assume that the Social Security edifice will fall down. It would at least be surprising if it did so in the case of 87 year‑old widows.
Resolution of the Claims
General Matters
The fate of these claims depends upon the application of well‑settled principles.
Under s.91 of the Act the court is empowered to order that provision be made out of the estate of a deceased person for the proper maintenance and support of a person for whom the deceased had responsibility to make the provision. Provision includes further provision.
The first question to be decided in the case is whether, in the case of either or both of Mrs Ross and Mrs McLean, the late Mr Ross had any such responsibility; and, if he did, whether in either or both cases he failed to make adequate provision for the proper maintenance and support of that person. Section 91(4) specifies eleven matters to which the Court must have regard in determining the answer to each of those questions. By s.91(4)(p) the Court must also have regard to any other matters it considers relevant. It is convenient here to add that regard must also be had to those eleven matters, plus any residual matters picked up by sub‑s. (4)(p), in determining the amount of any provision; but the issue of the amount of provision is, of course, dependent upon there being affirmative answers to the two antecedent questions.
Mrs Ross
I deal first with the claim by Mrs Ross. It was not argued for the defendant that the threshold questions should be answered otherwise than in her favour. Rightly so. In my opinion it is crystal clear that the late Mr Ross had a relevant responsibility, and that he failed to make adequate provision for the proper maintenance and support of his wife. The considerations mentioned in s.91(4)(e), (f), (g), (h), (j), (k), (m) and (o) are of particular relevance. The question which then arises is what provision should be made for Mrs Ross.
Counsel for the defendant noted that the agreed value of the real property is $527,200; and that the present value of the personal estate is $67,620. He submitted that the costs of the parties in these proceedings were likely to consume the personal estate. In my opinion, that is very likely correct. There is a risk, indeed, that some modest amount beyond $67,620 might go in costs; but bear in mind the fact that the estate is in receipt of rental of $30,000 a year.
Counsel submitted, next, that Mrs Ross is an elderly lady. That should be taken into account. Nonetheless, he did not argue that for such a reason no lump sum disposition should be made in her favour.
He argued that, consistent with statements of general approach in modern times, she should be made secure in her home ‑ in this case, in her accommodation at Lyndoch; have income sufficient to live in the style to which she is accustomed; and have a fund to meet unforeseen contingencies. About those submissions there was, I think, no argument; though counsel for Mrs Ross submitted, correctly in my opinion, that proper maintenance and support means something more than the lowest possible amount to enable someone to survive having regard to his or her position in life, does not require that a widow who has been restricted to an unnecessarily frugal way of life be sentenced to such a life in the future, and should be sufficient not only to keep the wolf from the door but to keep the wolf from lurking around the house.[26]
[26]He cited King v White, supra and Re Harris [1936] SASR 497.
Counsel for the defendant submitted that in determining what provision should be made for Mrs Ross the testator's will‑making power should only be interfered with to the minimum extent necessary. A claim such as this is not the occasion for redistributing assets and income as might be done in the Family Court. Provision should not be made simply to facilitate the will‑making power of the claimant. Those propositions, I accept, provide guidance to resolving the critical question.
Against that background of principle, counsel for the defendant submitted that provision should be made out of the estate in respect of any accommodation bond payable to Lyndoch in consequence of this proceeding. He submitted, however, that whatever amount was ultimately refundable ought to be returned to the estate. He suggested several ways in which that might be achieved: By an order that the estate make the contribution and be entitled to the refund; or by an order that the estate advance the contribution by interest‑free loan to Mrs Ross, repayable on her death but only as to the refundable portion.
It is convenient to pause at this point. Counsel for Mrs Ross did not cavil at the proposal generally advanced for the defendant. He was concerned, however, that his client should have certainty of accommodation throughout her life; and that it might not always be at Lyndoch. At present, it seems likely that Mrs Ross will want to stay at Lyndoch throughout her life. But that cannot be certain. I agree with the submission made by counsel that Mrs Ross' accommodation requirements for the rest of her life must be made secure by the estate. I do not understand counsel for the defendant to have contended otherwise.
Counsel for the defendant then moved to the question of a lump sum provision for Mrs Ross. He laid considerable emphasis on the fact that, once her deemed income exceeded $3,016 per annum, it would be bite into her pension and increase the amount of the daily fee. He contended that those impacts would begin to occur when the plaintiff had assets of about $88,000. On the footing that her assets are probably in the area of $20,000[27] he calculated that a lump sum provision of around $65,000 to $70,000 would accumulate, with Mrs Ross' assets, to the critical amount. It was his primary submission that the amount of the provision should be in that range.
[27]Compare paragraph 28 of the widow’s first affidavit and paragraph 5 of Mr Greenham's affidavit.
I should immediately say that I reject that submission. I do not consider that a provision in that range would yield Mrs Ross reasonable security. It would provide her with very modest disposable weekly income, even accepting that she could in fact earn, say, 5 per cent net on money invested; and it would give her quite insufficient surplus capital as against any of the uncertainties that may yet occur in her life. It was calculated, really, to give the estate the biggest possible advantage of the pension presently being paid to Mrs Ross, and by doing so to reduce the impact of a provision in her favour upon the estate by the smallest possible amount.
Counsel next submitted that, if I thought a provision of $65,000 to $70,000 was "somewhat on the light side" I might consider a legacy of $100,000. He pointed out that the consequence of the deemed income methodology was that a legacy of that size would cause reduction in Mrs Ross’ pension and increase in the daily fee. She would need to earn at least 4 per cent net on the provision for there to be a disposable income advantage of much size. Assuming such a rate of return, according to counsel’s oral submission, Mrs Ross would have disposable income of about $140 a week, as against a present $37; and she would have the lump sum as a protection against vicissitudes.
It seems that the figures orally advanced by counsel for the defendant were not in all respects correct. That emerged, I think, from written calculations which he supplied yesterday, calculations assuming that the widow's assets amount to $30,000, that provision was made for a legacy of $100,000 and that a return of 5% net could be achieved on all funds invested. Upon those assumptions Mrs Ross would have disposable income of $120.59 per week.
Accepting the reliability of those figures for the moment, I note that Mrs Ross would then be only about $80 per week better off than is presently the case. For now her pension, expressed weekly, is $217.60, and she pays $175.56 in daily fees, leaving disposable income of about $40 per week ‑ it is a little more, but counsel agreed that I should take the pharmaceutical benefits component out of the picture.
A provision of $100,000, of course, would give Mrs Ross not only increased disposable income, but also capital to guard against contingencies. But the capital available to meet contingencies would still not be very great; and any significant use of it would soon enough return her to a weekly income situation not much better than that which presently exists.
Counsel for the defendant finally submitted that, if I was inclined to make the provision beyond $100,000, it should be by way of ordering that a fund be created within the estate, or alternatively that a discretionary trust be set up; and that Mrs Ross be permitted to make drawings upon the income thereof - but in either case only if she had exhausted her other assets. Central to each of these alternatives was the conception that the fund or trust assets would revert to the estate on the death of Mrs Ross. Counsel submitted that to make a provision absolutely in an amount in excess of $100,000 would run the real risk of providing Mrs Ross with an excessive amount, just transferring assets, potentially, from deceased's estate to Mrs Ross' own estate; and that was certainly not the purpose of the legislation.
Counsel was unable to tell me what impact the creation of such a life interest would have on Mrs Ross' pension, or upon the amount of the daily fee. On one view the fund might be treated as her asset and deemed income brought to account whether or not she in fact received income from the fund, and whatever its rate of return.
Counsel for the defendant finally submitted that the defendant's sons, and the defendant to a lesser extent, were the deceased's chosen beneficiaries. They did not have to justify their entitlement. The gist of his contention was that once proper provision was made for Mrs Ross it was immaterial that the defendant and his sons were left with what might be thought to be unnecessarily generous bequests. That was the testator's intent; and subject to the validity of claims under Part IV of the Act the choice was his. Counsel added that for his part the defendant did not contend that what Mrs Ross should have by way of provision should be cut down because he or his sons were needy beneficiaries with strong moral claims. It was accepted, vis-à-vis the claim by Mrs Ross, that there was no strong competing claim upon the estate.
Counsel for Mrs Ross referred in his submissions to the proper approach to determining what is adequate provision for the proper maintenance and support of a claimant. I have mentioned those submissions already. I will not repeat them.
He next submitted that Mrs Ross met all the criteria specified by s.91(4) of the Act. He addressed the facts in that connection. Concerning s.91(4)(h), he submitted that the particular consideration cannot be viewed in a vacuum. The grandsons had no moral claim on the deceased's bounty; or, if they did, they had no need. At least I could err on the generous side in favour of his client, taking into account her obvious needs and the absence of any hardship thereby being cast on the other beneficiaries.
Concerning provision of an accommodation bond counsel submitted, as I have said, that his client must have complete security. There was no objection to the residual amount reverting to the estate.
Turning to the provision of a capital sum, counsel submitted that a proper amount in all the circumstances was $250,000. He provided calculations which showed, he submitted, that given a provision of $250,000 and investment at 5 per cent net, his client would have disposable income of $166 per week, and the security of the capital sum. As to income, that would reflect a net increase on present disposable income of about $125 per week. Counsel submitted that it was unlikely that his client would embark upon a riotous lifestyle; but she was a person with family and community interests who would not wish to be and should not be a financial burden to others. She should be free to enjoy Christmases and birthdays. She should be able to live in peace and security, and to indulge herself a little. Contingencies must be brought to account. She might want to leave Lyndoch at some time, though that might seem a small prospect.
I have considered the calculations provided by counsel for Mrs Ross. I think that Table 3 is not quite accurate. Building on the first and second Tables I consider that the Third Table may be recast this way, making an assumption that Mrs Ross' own assets amount to $20,000 and that she could invest those assets plus any provision to provide a 5 per cent net yield:
Own
Assets$
Provision
$
Pension
p/f$
Income
Earned
p/f
$Daily fee
$
Disposable
Income
p/f$
20,000 150,000 350.11 326.92 386.40 290.60 20,000 200,000 313.35 423.07 419.72 316.70 20,000 250,000 257.20 519.23 424.90 351.53
Annualising disposable income, the amounts become, on a provision of $150,000, $7566; on a provision of $200,000, $8,234; and on a provision of $250,000, $9,139. None of those amounts are large, even for an elderly person provided with accommodation and keep, and having modest spending horizons.
Comparing disposable weekly income with Mrs Ross' present position, she would be better off respectively as follows:
Provision
$
Disposable
Income p/w$
Present
Disposable
Income
$Increase in
Disposable
Income$
150,000 145.31 40 105.31 200,000 158.35 40 118.35 250,000 175.76 40 135.76
I have borne in mind, when considering the outcomes of my calculations, the written exercise engaged in by defendant's counsel. That exercise assumed Mrs Ross' assets to be $30,000 and the making of provisions of different sizes. On combined assets of $130,000 disposable income was calculated to be a $120.59 per week; and on combined assets of $170,000, $134.05. The difference between the latter calculation and the figure arrived at by me on combined assets of $170,000 ‑ that is, $145.31 ‑ is explicable by there being some variation in the estimates of pension reduction and daily fee increase made by defendant's counsel in his exercise and by plaintiff's counsel in his Tables 1 and 2. In the end, the differences amount to very little ‑ on total assets of $170,000 something less than $600 per year in income.
What provision, then, should be made for Mrs Ross? In answering that question s.91(4) of the Act says, as I have earlier noted, that I must take into account the specific matters set out in paragraphs (e) to (o), and any other matters that I consider to be relevant. I do not pause to further the debate whether, as has been said a number of times, the range of matters specified and the opportunity to consider residual matters reproduce, in substance, the common law position; or whether the common law position, as has been said on at least one other occasion, has been subsumed by a code. In the end, the Act dictates what must be considered.
Against that background, the following matters are of particular relevance:
§ The estate is of a value which approaches $595,000. Even if the costs of all parties were to come out of the estate it would have a value exceeding $500,000.
§ Mrs Ross is the deceased's wife of nearly 64 years, the mother and rearer of his children, the homemaker despite being starved of cash by her husband.
§ As his widow, Mrs Ross should be considered to have a particular moral claim upon deceased's bounty. On the other hand, generally speaking, grandchildren are owed no moral obligation by a grandparent to provide for their maintenance and support. In the present case the defendant's two sons are the principal beneficiaries under the will. There is no evidence of any particular connection between either of them and the deceased. Nothing save their surname.
§ Mrs Ross' own resources are pitifully small. She has a roof over her head and food to eat essentially by reason of Commonwealth beneficence. She has no prospect of going out to earn a living. The defendant, on the other hand, is a substantial landholder who has derived income from two sources over quite a long period. The defendant's two sons are not shown to be in need, although Peter Ross is better placed than his brother; and stands to inherit not only part of his grandfather's property but other property besides.
§ Mrs Ross is aged 87. On the one hand she deserves the peace of mind which financial security will give her. On the other, it would be proper to be a little cautious in fixing the amount of a provision. The touchstone is what provision is adequate for her proper maintenance and support; not what amount might be extracted from the deceased's estate so as to provide capital available for her testamentary disposition.
§ Mrs Ross contributed substantially to building up deceased's estate. The land was given him by his mother. Mrs Ross worked hard for a long time on the farm, necessarily contributing to its viability and retention. She was, in return, given little monetary support by her husband. She gave a compelling account of milking a few cows and then rearing calves, at a time when she must have been well into her 70s, in order to meet domestic expenses.
§ Mrs Ross undoubtedly cared for the testator over the long period of his ill‑health from 1988. Whether and to what extent her son assisted her does not alter that fact.
§ The testator, as I have said, appears to have given Mrs Ross little for domestic and personal expenses. By contrast, he gave each of the defendant's two sons either $5,000 or $10,000 when they were still children. I do not doubt that Mrs Ross would have been overjoyed to receive such an amount.
§ The character and conduct of the claimant has been shown to be exemplary. She raised her children and foster children. She had long involvement with the Red Cross and the CWA. There is no aspect of her character or conduct which could have given deceased reason to almost entirely overlook her in his will.
§ The claimant is in receipt of a pension. I will not repeat what I have already said about the qualified significance of receipt of such a benefit.
Looking simply at so much of the factual content of the matters to which I have referred as was known to the deceased immediately before his death, and what was then reasonably foreseeable, I consider that as a wise and just testator he should have at least provided for his wife's reasonable accommodation for life, provided her with certainty of income sufficient to live in reasonable comfort, and a nest egg as against both the needs and uncertainties of life. The nest egg could have been expected to be the substantial though not the only source of required income.
Mrs Ross was not at the time of his death in receipt of a pension. But it was not argued by her counsel that in crafting the provision which should now be made its later receipt should be ignored. I will not ignore it.
Having account of Mrs Ross' age, I consider that adequate provision will be made for her proper maintenance and support, so far as accommodation is concerned, if the estate is ordered to loan her a sum not exceeding $150,000 for the provision of suitable accommodation during her lifetime; no interest being payable on the loan, and so much as is loaned, less any amount retained or lost - for instance, out of an accommodation bond – being repayable to the estate after her death in full satisfaction of the loan made. I fix a maximum amount of $150,000 because it cannot be predicted with certainty whether Mrs Ross will wish or be able to remain at Lyndoch. Circumstances change. The maximum amount fixed should, together with provision by way of a lump sum, sufficiently ensure Mrs Ross' accommodation requirements. By making provision with respect to Mrs Ross’ accommodation by way of loan the testator's wishes will be least affected, whilst his widow will be properly protected.
I mentioned a lump sum provision. I consider it necessary that such a provision be made. I am not persuaded that either of the competing submissions of counsel should be wholly accepted. I consider that Mrs Ross should have the security of an income stream representing a capital provision of $200,000. As I have pointed out, assuming a 5 per cent net yield on such an amount and upon Mrs Ross' own few assets, Mrs Ross would then have disposable income (by my calculations) of a little less than $160 a week. That amount would still reflect, significantly, the receipt of a pension ‑ this going, effectively, in reduction of the obligations of the testator. I do not consider such an income stream to be excessive in all the circumstances. I take into account the risk that for one reason or another there might need to be inroads upon the lump sum.
It is one thing to say that Mrs Ross should have the income stream representing a capital provision of $200,000. It is another thing to conclude that the capital provision should be $200,000. In all the circumstances which I have described I do not consider that it should. Rather, I consider that I should order that Mrs Ross have a legacy out of the estate of $150,000; and that, modifying a submission made by counsel for the defendant, she should continue to receive the annuity of $3,000 a year left her by the will. $3,000 a year might be considered to be a return of 6 per cent gross on a capital sum of $50,000. I see no reason, I add, why the annuity should be paid half‑yearly in arrears. I consider that, as part of ensuring adequate provision for Mrs Ross' proper maintenance and support, the annuity should be paid quarterly in advance. The annuity should remain a charge on the deceased's real property other than the smaller block; or, if it becomes necessary to sell the land, then secured against the estate as thereafter constituted.
Mrs McLean
I turn to consider the claim brought by Mrs McLean. Counsel for the defendant submitted that the claim was one brought by an adult daughter who had fallen out with her father, who had forged her own life, and who had taken no contribution from him nor made any contribution to him. Her contact with her father had been scant indeed for 30 years. Her evidence revealed no pressing need, as might give rise to there being an obligation on the testator despite their personal relationship. She had received an unexpected inheritance from her grandfather. So she had had a start in life. There is no principle that siblings must be treated equally. That was really the gist of her complaint ‑ that she had not been treated equally. In the circumstances Mrs McLean could not satisfy the threshold tests set up by s.91 of the Act. But if I did not accept that submission then any provision should be small ‑ a legacy of, say, $20,000 to $30,000. That would buy her a new car.
Counsel for Mrs McLean submitted that there was an overwhelming moral duty for deceased to have made provision for her client. This was a daughter brought up in a bygone era, starved of opportunity. A particular responsibility to ensure that such a person is not left without adequate provision may be discerned in such a case. Mrs McLean, counsel submitted, is not a person of great means. She has a share in the family land and farming enterprise, but is in receipt of a full pension ‑ the implication being that the farm is producing little return. Counsel contended that at the age of 64 her client's working life was over; yet her client does not have a secure roof over her head. Counsel contrasted her client's situation with the position of the defendant and his sons. She argued that what the testator had done was to punish Mrs McLean in his lifetime and in his will for her standing up for her mother. She submitted that her client's claim, which she quantified at $125,000, was modest having regard to the size of the estate. She noted the fact that in clause 11 of his will the deceased had said that he had provided for his daughters in their lifetime; but that he had not in fact done so in Mrs McLean's case. She submitted also that her client had made substantial contributions to the building up of the estate. She had worked on the farm, unpaid, for years. Her parents had made use of her land, the gift from her grandfather. Her father had let it run down whilst retaining the profits. Again, other beneficiaries had been made gifts in the lifetime of the testator; but not Mrs McLean. The only gift she had apparently been made, a motor car at age 18, had been taken from her when she married at age 21.
In considering whether Mrs McLean has satisfied the threshold requirements of s.91 of the Act, I have kept two matters carefully in mind: First, the importance of respecting the testator's intentions, however anachronistic they might seem, so long as they are not incompatible with the justifiable claim of an applicant; and second, the need to consider Mrs McLean's claim discretely, uninfluenced one way or the other by what I consider to be the overwhelming strength of her mother's claim upon the estate.
Against that background I have concluded that Mrs McLean has satisfied the threshold requirements. I consider that the deceased did owe her a moral duty to make provision for her proper maintenance and support. I think that the matters of greatest significance are that Mrs McLean assisted to build up the estate both by her own unpaid work over a period of years and by her parents using her land to their economic advantage for more than a decade. Indeed, they not only used the land, they abused it ‑ to her financial disadvantage. The contribution made by Mrs McLean to building up the estate stands in contrast to the want of provision made for her by the testator during her youth. She went to secondary college; but it was her grandfather who paid the bills. She was given a car by her father when she was 18; but he took it away when she was 21.
Weighing in the balance, but of considerably lesser impact, is Mrs McLean's age and attendant consequences. She is 64. Her working life is probably nearly over. Both her parents have lived well into their 80s, so there is a reasonable prospect, I should think, that she has many years of life left yet. In that context her financial circumstances are of some relevance. They are by no means desperate; but they are not particularly robust.
Also weighing in the balance is the size of the estate and the financial needs of Mrs McLean's mother and the other beneficiaries. I do not consider that the claims of those others mean that a wise and just testator should have considered the estate too small to provide for his daughter.
I should mention also the giving of earlier benefits. I have already noted that gifts of $5,000 or $10,000 were made to each of the defendant's two sons when they were young. Looking at clause 11 of the will it might be assumed that there had been some gift or gifts to Mrs McLean in the testator's lifetime. But there were not. What the testator can have been referring to in that clause remains unclear in the case of Mrs McLean.
There are, I think, two particular possibilities in that connection. Clause 11 might reflect the fact that the deceased regarded himself as having a moral obligation to make provision for his daughters; and was satisfied that he had done so in his lifetime; or it might have been no more than a last act designed to ensure that his daughters could get nothing from his estate. If the former be the situation then it might reasonably be said that in Mrs McLean's case, having recognised his moral duty, the testator was mistaken in saying that he had adequately provided for her ‑ whatever be the situation with her sister. The most he did, on the evidence, was to give her a home in her childhood. I doubt that clause 11 could be thought to relate to his meeting that parent's obligation. If the latter be the situation, it reveals an inability on his part to give proper consideration to the competing claims on his bounty.
In concluding that Mrs McLean has satisfied the threshold requirements I have not at all ignored the arguments advanced for the defendant. I should particularly mention a few of them. First, I have kept in mind the fact that there was a long period of estrangement between Mrs McLean and her father, during which period she went out and made her own way in life. I think that the estrangement was not of Mrs McLean's making. But I do not regard that fact as being of crucial importance.
Second, I have kept in mind the circumstance that Mrs McLean is a long‑married woman whose husband is still alive, and that between them they have modest assets from a lifetime's work. The evidence does not suggest, I add, that they cannot continue to live on their farm in the foreseeable future; although circumstances may change as the years pass and they may need to move closer to town.
Third, I have considered the argument that Mrs McLean was given an unexpected start in life by the generosity of her grandfather; this being, sub silentio, to her father's disadvantage. I have not found that argument persuasive of a conclusion that deceased did not owe his daughter the relevant moral duty.
Fourth, I have not ignored the contention that by this claim what Mrs McLean really seeks is equality of treatment between siblings. I accept that there is no principle that a testator must deal equally with his or her children. I do not consider, however, that Mrs McLean's claim should be so understood; or, if it should, that it is not supportable in any event.
What provision, then, should be made? Both counsel argued for a money sum. Such a remedy is appropriate. The figures put by counsel diverged widely. In my opinion the range of figures put by the defendant's counsel is closer to the provision that should have been made by a wise and just testator armed with knowledge of relevant facts and circumstances at the time of his death and having regard to what might then reasonably have been foreseen. Considering Mrs McLean's then present and foreseeable circumstances, taking into account the various matters giving rise to the testator's moral duty to her, and balancing that moral duty against the competing claims on his bounty, all in the context of the size and nature of his estate, I consider that Mrs McLean should have provision out of the estate in an amount of $50,000.
Orders
There will need to be separate orders in the two proceedings. I ask counsel to prepare minutes of orders for my consideration.
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