Rumley v Perpetual Trustees Tasmania Ltd

[1991] TASSC 122

Serial No B8/1991
List "B"

COURT:  SUPREME COURT OF TASMANIA

CITATION:              Rumley v Perpetual Trustees Tasmania Ltd [1991] TASSC 122; B8/1991

PARTIES:  RUMLEY, Barbara June
  v
  PERPETUAL TRUSTEES TASMANIA

FILE NO/S:  M69/1989
DELIVERED ON:  25 March 1991
JUDGMENT OF:  Wright J

Judgment Number:  B8/1991
Number of paragraphs:  17

Serial No B8/1991
List "B"
File No M69/1989

BARBARA JUNE RUMLEY
v THE PERPETUAL TRUSTEES TASMANIA LTD

REASONS FOR JUDGMENT  WRIGHT J

25 March 1991

1. The applicant is the 56 year old daughter of the deceased, Beryl Sophie Jean Hursey. She has no brothers or sisters. It is plain that the deceased behaved in an eccentric manner for a number of years prior to her death but it is not suggested that she lacked testamentary capacity. The applicant has applied for provision out of her mother's estate pursuant to the provisions of the Testators Family Maintenance Act 1912.

1. By her last will and testament dated 25 March 1986 the deceased made a number of specific monetary bequests totalling $2,200.00. She directed her trustees to call in and convert the residue of her estate and to pay the applicant the sum of $15.00 per month out of the income of the resultant fund. Upon the death of the applicant, the balance then in the fund is to be equally divided between all of the deceased's nieces and nephews as shall be then living and who shall survive and attain the age of majority. There are nineteen living nieces and nephews with a contingent interest in the fund. They have all been served but have chosen not to contest the application. The trustees of the estate, Perpetual Trustees Tasmania Ltd, have also chosen not to contest the application – a surprising and unexplained decision on their part.

1. At the time of her death, the deceased possessed several substantial banking accounts and was the owner in fee simple of real estate at 37 Goulburn Street, Hobart. According to an affidavit filed by the authorized officer of Perpetual Trustees Tasmania Ltd on 20 December 1989 the nett value of funds invested on behalf of the estate amounted to $106,813.00 at that time and were returning interest at the rate of 17.1% pa.

1. It is plain from the evidence that the applicant had a very difficult relationship with her mother, but that she remained an attentive and loyal daughter until the deceased's death. There is no apparent reason why the deceased should have excluded her from her bounty or provided her with a meagre, if not contemptuous, life interest in the residue of the estate. It must have been apparent to the deceased at the time she made her will that her estate would have a substantial value and that its income would be far in excess of the $15.00 per month ($180.00 per year) which she bequeathed to her daughter.

1. The applicant's husband has assets amounting to about $160,000.00 but to a large extent these have been the result of a redundancy payment recently received by him upon the termination of his employment with Australian Newsprint Mills Ltd He is currently unemployed.

1. At the time the deceased made her will, however, she was entitled to consider the applicant's husband as being in secure employment and therefore able to provide adequately for his wife.

1. The applicant lives with her husband in modest circumstances in the Derwent Valley. She has care and control of her youngest daughter. She has no separate income of her own, and the family assets are all owned by the husband. She enjoys reasonably good health, but has blood pressure which is controlled by medication.

1. Whilst it cannot be said that she is in dire financial need, all in all I am satisfied that she has been left without adequate provision for her proper maintenance and support. There are no other relatives who have a comparable claim upon the deceased's bounty. Indeed there is nothing to suggest that the nieces and nephews enjoyed any special relationship with the deceased and there is nothing to explain why she should have chosen to pass over her natural daughter and to make provision for her more distant relatives as she did.

1. The guiding principles which are relevant in a situation such as this are to be found in the judgment of Neasey J in Groves v Clark No 42/1971 at p5, where he said:

"The plaintiff is adequately supported by her husband, they are both young and apparently in good health, and the husband has an occupation which produces a reasonable income. She has not during her married life been in debt or financial difficulties. It cannot be said in absolute terms that she is left without adequate provision for her maintenance and support, but what has to be examined is whether she has been so left 'in terms of his will', to quote the statute. Unless the condition is satisfied the Court has no authority to intervene, and the question must be considered as at the date of death of the testator – Coates v National Trustees Executors & Agency Company Ltd & Anor (1956) 95 CLR p 494. As Dixon CJ indicated in Blore v Lang (1960) 104 CLR 124 (at page 126), a married daughter without means of her own and entirely dependant, as her children are, on her husband's earnings, would normally be considered to have a moral claim to provision from her father's estate where that estate is substantial and sufficient to cater for the legitimate claims of more than one claimant."

1. In my opinion, the deceased committed a discernible breach of moral duty towards her daughter in disposing of her estate in the manner described. It is not difficult to conclude that in the absence of any competing claims, a wise and just mother would have bequeathed the whole of the residue of her estate to the applicant absolutely. However, the court's task is not to rewrite the will but to ensure that reasonable provision is made for the applicant whilst in other respects preserving the terms of the will so far as possible.

1. In this case I have been invited to make provision for the applicant by way of a lump sum. The testator has expressed a clear wish that the class of persons to benefit from the distribution of the corpus of the residuary estate shall be ascertainable only upon the death of the applicant and I have no warrant to interfere with this general scheme of distribution to the residuary beneficiaries if a just result can be achieved by other means.

1. It seems, therefore, that I have a choice of substantially increasing the applicant's income from the residuary estate which will have the effect of preserving the corpus at about its present level, or at least substantially diminishing the rate at which it would otherwise accumulate, or I can provide the applicant with a lump sum in lieu of the current small income provision, thus enabling the reduced corpus to accumulate income at presently available commercial rates until the applicant's death.

1. In the first such hypothetical situation the applicant would receive an assured income for the remainder of her life but the value of that income in real terms may well decrease with future inflation and the corpus available to the nieces and nephews would remain relatively static so that if the applicant lives for a long time, the share available to each residuary legatee may be comparatively small.

1. In the event that I should provide the applicant with a lump sum, she would have a freedom of choice as to how that amount may be used by her. She could invest it in some item of capital expenditure for her own or the family benefit, or she could invest it to produce an income, albeit an income which would necessarily be considerably smaller than the income generated by the entire estate at the present time. On this basis the corpus of the residue available to the nieces and nephews would be substantially diminished if the applicant were to die within the next few years. However, if she survives for a lengthy period of time an accumulation of the interest earned upon the balance of the corpus compounding year by year should build into a substantial fund by the time of the applicant's death.

1. Balancing these competing considerations is no easy task, but all in all I think the preferable course is to provide the applicant with a lump sum in lieu of the income provision contained in the will rather than providing her with substantially increased income from the estate.

1. Accordingly, I will order that the trustees of the estate pay to the applicant the sum of $50,000.00 for her own use and benefit absolutely in lieu of the sum of $15.00 per month payable during her lifetime as provided for in the will. This sum will be payable out of the residuary estate.

1. The costs of all parties will be taxed as between solicitor and client and paid out of the estate. A copy of the order will be made upon the Probate.