Scarlett v Scarlett
[2012] VSC 515
•1 NOVEMBER 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 06897 of 2010
IN THE MATTER of Part IV of the Administration and Probate Act 1958
and
IN THE MATTER of MARGARET SADIE GILMOUR deceased
| TANIA DELILAH SCARLETT | Plaintiff |
| v | |
| GREGOR KEITH SCARLETT (who is sued as the executor of the Estate of MARGARET SADIE GILMOUR deceased) | Defendant |
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JUDGE: | VICKERY J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 22 OCTOBER 2012 | |
DATE OF JUDGMENT: | 1 NOVEMBER 2012 | |
CASE MAY BE CITED AS: | SCARLETT v SCARLETT | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 515 | |
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Testator’s Family Maintenance – Claim by grandchild of the deceased - Uncle of claimant benefits from investment and work done by claimant’s father on farm of Deceased’s former husband – Claimant’s father not benefit from investment and farm work - Good social relationship between deceased and grandchild – Whether deceased has moral responsibility for proper maintenance and support of grandchild – Administration and Probate Act 1958 (Vic), s 91(1), (2), (3) and (4).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R. Boaden | Wills and Probate Victoria Lawyers |
| For the Defendant | Mr R. Phillips | McCracken & McCracken Lawyers |
HIS HONOUR:
Introduction
The Plaintiff, Tania Delilah Scarlett (“Tania”), as a grandchild of Margaret Gilmour (the “Deceased”) brings this proceeding pursuant to Part IV of the Administration and Probate Act 1958 (the “Act”) seeking an order that adequate provision for her proper maintenance and support be made out of the Deceased’s estate.
The Deceased died on 23 November 2009. She had two sons: Ian Scarlett (“Ian”), whom she outlived, he having died in 1995; and the Defendant, Gregor Scarlett “Gregor”), the younger brother of the deceased Ian Scarlett, who has survived her.
Tania is the daughter of Ian and her mother Faye Olive Scarlett (“Faye”), and a granddaughter of the Deceased. Tania was born on 24 October 1986 and is now 26 years of age. The Defendant, Gregor is Tania’s uncle.
The Deceased made her last Will on 28 July 2005 (the “Will”). Seven grandchildren, including Tania Scarlett survived her. However, by the terms of the Will, provision was made for only five of them. By her Will:
(a)the Deceased appointed her son, Gregor, to be her executor and trustee;
(b)in essence left her residual money to be divided into 5 equal parts or shares to be distributed equally between five of her grandchildren, namely:
(i) Samantha Scarlett;
(ii) Megan Kirk;
(iii) Esther S Smith;
(iv) Earl J Scarlett;
(v) Lucas Scarlett;
(c)the Deceased left her residuary estate, which essentially comprised her home being real property situated at 28 Wimbledon Avenue, Mt Eliza, to Gregor.
Notably two of the Deceased’s grandchildren, Leanne Martin and Tania were excluded from her last Will.
As to the current position of the estate of the Deceased at the time of trial:
(a) The Mt Eliza property was sold for $660,000.
(b)The net proceeds of the sale, being $592,591.40, were transferred to an interest bearing account.
As at 10 June 2010 the closing balance of the Deceased’s bank account was $80,705.28. From the cash at hand, distributions of $10,000 have been paid to each of the five grandchild beneficiaries named in the Will. Other expenses have also been paid, resulting in a residue balance of cash at hand as at 20 July 2012 of $12,048.64. From the net proceeds derived from the sale of the Mt Eliza property, an interim distribution of $134,096.24 has been paid to Gregor. As at 20 July 2012 there was a total remaining residue in the estate of $470,543.80, comprising a residue of cash amounting to $12,048.64 and a residue of the proceeds of the sale of the real property in the sum of $458,495.16.
The Deceased at the time of her death was a widow and living alone. She outlived her former husband, (from whom she was divorced), Ronald Scarlett, who died in 1992.
Ian was twice married. His first marriage to Margaret Scarlett produced a son, Lucas Scarlett. He is a grandchild beneficiary referred to in the Deceased’s Will. Ian’s second marriage was to Faye. Tania is the child of this marriage. Ian Scarlett died on 12 August 1995.
Tania is unmarried and presently lives with her mother at 3 Turnstone Court, Carrum Downs, which she says she will continue to do “until she gets on her feet.” She works as a casual employee in a bar in Frankston 15-20 hours per week and earns $250 each week.
Gregor was born 8 October 1947 and is now 65 years of age. He was divorced from his wife in 1998. There are four children of this marriage, Samantha Scarlett, Megan Kirk, Esther Smith and Earl Scarlett. These are the other grandchild beneficiaries referred to in the Deceased’s Will. He retired in 2008.
Following his divorce and a property settlement Gregor retained his house at 2 Homestead Road, Langwarrin which is encumbered with a mortgage of about $100,000. In the property settlement his former wife received approximately $210,000 cash together with a car and household goods and chattels. She was unwell and died less than two years after the divorce. The major beneficiary of Gregor’s former wife’s estate was her partner. Gregor’s children received approximately $50,000 divided between the four of them.
Following his divorce, Gregor was self-employed doing contract carpet laying. He developed a carpel tunnel syndrome. His doctor advised him to cease laying carpet to avoid the necessity for an operation. As the work was becoming less available to Gregor, the doctor’s advice was timely.
Approximately five years ago for a short time Gregor was engaged to do some home renovations. He then formally retired about four years ago. Just prior to his retirement he decided to build a boat with a friend. The friend ceased to participate in the project, however, Gregor has continued. He says that construction of the boat is a project which has a long way to go.
Gregor supports himself with a part benefit from Centrelink and the income he receives from a tenant that shares his property. Centrelink has assessed his income at $300 per fortnight. He has no superannuation and says that he is reliant on the benefit his mother provided for him in her estate for his future needs.
According to the Inventory of Assets and Liabilities, the Deceased left an estate valued at $694,505.06. Gregor’s Affidavit of Financial Position sworn 26 July 2012 shows that there is a net estate of $626,000.00:
Net sale proceeds of Mt Eliza $592,591.40
Bank account $ 80,705.28$673,296.68
Less costs and like expenses $ 47,296.64
$626,000.00.
The interim distributions are included in the above figures.[1]
[1]See: Re Jones [1978] VR 272.
Gregor in his capacity as executor of the Deceased’s estate has paid the debts and liabilities of the estate. He has sold the Mt Eliza property. He has made interim distributions of:
(a) $134,096 to himself; and
(b) $50,000 to each of his four children and to Lucas Scarlett.
Gregor does not dispute that Tania is in financial need. Her immediate needs are for the provision of $67,000 comprising:
(a) to repay a debt due to her mother ($7,000);
(b)purchase of a vehicle in order to be mobile and gain regular employment (estimated at $10,000);
(c)funds to undertake a TAFE course in fashion studies at RMIT University over two to three years (estimated at $20,000);
(d)funds to establish herself independently in rented accommodation by way of a rental deposit, furniture and the like (estimated at $30,000).
At the date of her death, the assets of the Deceased’s estate consisted of:
(a)her home at 28 Wimbledon Avenue, Mt Eliza, which was later sold for $660,000; and
(b) funds of $94,505.
The current position is that, taking into account the costs of Gregor to date in defending the proceeding, which have been paid by the estate, there is presently approximately $626,000 available for distribution.
The Deceased left a Will dated 28 July 2005. Probate was granted to Gregor on 21 June 2010.
The Will was made using a printed Will form. It makes these dispositions:
(a)Under the heading “Special Bequests”, “1 of 5 shares of Residual Money” is given to each of Gregor Scarlett’s four children and to Lucas Scarlett;
(b)Under the heading “Residual Estate”, the Will provides:- “I hereby leave the whole of my estate, both personal and real, subject to other provisions in this Will and after payments of my debts funeral and administrative expenses associated with this Will, to Gregor Keith Scarlett”.
The Will is to be construed as giving the Mt Eliza home to Gregor; and the net cash in the estate, after payment of debts and expenses, to his children and to Lucas Scarlett.
The trial of the proceeding was conducted on affidavits filed by each party. There was no cross-examination, resulting in the findings in these reasons being made on unchallenged evidence.
History of the Plaintiff
Ian and Faye began living together in the first half of 1985. They married on 25 January 1986. Tania, their daughter, was born on 24 October 1986.
Prior to his marriage to Faye, Ian had previously been married for 18 years. There was one child of this union, Lucas Scarlett, who was born 16 years into Ian’s first marriage. Ian had been divorced for two years prior to meeting Faye.
When Faye was pregnant with Tania there was an unfounded rumour that Ian was not the father of her unborn child. These allegations as to the paternity of Tania were perpetrated by Ian’s former wife and his sister-in-law, the wife of Gregor. Unfortunately, the rumour was believed by Ian, in spite of the attempts of Faye to dissuade him. This led to Ian drinking heavily and to he and Faye separating. On 10 October 1986 consent orders were made in the Frankston Magistrates’ Court for Ian to pay child support to Faye for Tania.
Soon after this Ian went to Queensland and lived with his father Ronald Scarlett (“Ronald”) at his farm at Maroochydore where he helped his father establish a farm, growing mainly macadamia nuts. Over a period of one or possibly nearly two years, Ian helped his father establish the farm. He set up the hydroponics, tended to the growing of the plants, worked and maintained the farm, and sold the farm produce at markets.
Ian sold the home that he then owned in Gairloch Drive, Frankston and put a substantial amount of the proceeds of sale into his father’s farm. He also borrowed funds from a bank in order to contribute to the business. Had it not been for Ian’s contributions of capital and work, his father would not have been able to own and operate the farm for as many years as he did.
Unfortunately the farm did not prove to be a success. This led to a falling out between Ian Scarlett and his father. Ian returned to live in Frankston in 1987.
Ian and Faye were divorced on 26 August 1991. At this time, Tania was 5 years old.
Ian’s father Ronald continued living on the farm until he died of liver cancer in 1992.
When Ian’s father died, he left the bulk of his estate to Gregor and nothing to Ian. Gregor had not given his father any assistance on the farm.
Ian’s life did not prosper after his return to Melbourne. He was devastated at being cut out of his father’s will and never got over the disappointment. He became depressed and again commenced drinking to excess. In 1995 he went to live with his mother (the Deceased). He died on 12 August 1995 when he walked into the path of an oncoming car. His daughter, Tania, was aged eight or nine years at the time.
Ian left no assets of any significance, and Tania inherited nothing from him.
At the time of his death, Ian was living with the Deceased and helped her with gardening, shopping and outings. The Deceased expected him to stay living with her and help her in her old age. The Deceased believed she was dependant on Ian.
Following the death of Ian, Tania received $52,000 from the Transport Accident Commission (TAC). This followed representations made by Tania’s mother Faye to the TAC, an investigative interview being conducted and blood tests from Tania being undertaken.
The Deceased also had lodged a claim with the TAC. However, this was not successful. The Deceased told Gregor that Tania had received more than her share and that she did not want Tania or her mother to benefit in any way from her assets.
Ian had never got on with his younger brother Gregor.
This gave rise to Tania being distanced from Gregor’s side of the family. She was never visited or contacted by Gregor or her cousins, although she appears to have telephoned Gregor once in March 2010.
Further, there were no friendly relations between the Gregor’s side of the family and Tania’s mother Faye. They did not speak at Ian’s funeral. Nor was there any contact between them in the years that followed. Faye has had no relationship with the Gregor and has never spoken face to face with him.
Plaintiff’s Relationship with her Grandmother
In early 2005, Tania having gained her driving licence, made contact with the Deceased, who lived at Mt Eliza.
Tania decided to drive down to the Deceased’s house to see her. She had not seen her since Ian’s funeral. She gave her the flowers she had bought for her. The pair sat on the back patio. The Deceased made coffee and they talked together about Ian. There were general family discussions which occupied several hours. The Deceased gave her phone number to Tania and asked her to telephone and suggested that they go out together.
Several weeks later Tania telephoned the Deceased and arranged to take her out in her car. They went to a café in Mt Eliza where they had afternoon tea together. Afterwards they went for a drive and then went back to the Deceased’s home. On parting they kissed goodbye and the Deceased said “be sure to call me”.
During the month which followed, Tania telephoned the Deceased and asked her if she would like to go out for lunch. She agreed, saying “don’t be late ‘cause I’ll be waiting”. They went to the hotel in the main street of Mornington and enjoyed lunch together. Following lunch the Deceased gave Tania some photos, one of Leanne (Tania’s father’s daughter from another relationship, whom she had never met) and one of Ian as a small child.
I am satisfied that a warm relationship developed between Tania and the Deceased following these meetings. This was maintained through intermittent though regular social contacts in the years which followed. The Deceased looked forward to going out with the Plaintiff.
Tania became accustomed to visiting the Deceased at her home in Mt Eliza about five times a year. She would also maintain contact by telephone. They talked about other family members in the course of their conversations. These visits continued over a period of four years and occurred on a regular basis.
At the beginning of 2009 Tania’s car was stolen. I am satisfied that this meant that it was not possible for Tania to visit the Deceased at Mt Eliza as often, although on one occasion she went to see her in a friend’s car. That was in early 2009. On this visit Tania noticed that the Deceased looked very gaunt in the face. She told Tania that she had been waiting for Gregor to bring a heater around as she was “feeling the cold”. Tania stayed a while with her and enjoyed a drink before she had to leave.
Following that event, Tania spoke to the Deceased twice on the telephone and they made arrangements to continue contact in this way. Tania telephoned several times over a number of months but there was no answer. She also telephoned the respite home called the “Blue Dolphin” which was a contact point pre-arranged between Tania and the Deceased, however, Tania was told that the Deceased had not been seen there for some time.
In September 2009 the Deceased became ill. She died on 23 November 2009.
Gregor did not inform Tania that the Deceased had died.
In March 2010 Tania decided to telephone Gregor, who told her that the Deceased had passed away. Tania was upset to be informed of this so late and as a result had not been able to attend the funeral.
The Deceased made an earlier Will dated 27 June 1996 following the death of Ian. In this Will the Deceased expressed the following:
It is my express wish that neither OLIVE FAY SCARLETT nor her children should benefit from the provisions of this my Will.
This was a Will made prior to the development of the relationship between Tania and the Deceased which commenced in early 2005.
The Deceased also made a codicil dated 29 May 2002. By this codicil she purported to exclude her grandchild Leanne Martin from benefitting from her estate upon her death if she could not be found by the appointed executor, Gregor. She expressed this wish in the following terms:
28 Wimbledon Ave
Mt Eliza Vic
29-5-2002To be added as a codicil to my will.
I Margaret Sadie Gilmour being of sound mind, declare that I have not heard of, or from, Leanne Martin, for a number of years.
Last heard of, shifting to New Zealand, and although I have written to the new address given, received no reply. She is mentioned as a beneficiary in my will. I do not want time and money wasted on what could be a fruitless search. So, if her whereabouts are still unknown to my son Gregor, at the time of my death, I wish her to be disregarded as a beneficiary, so that matters will not be held up.
This is my wish, to be carried out by my executors.
Yours truly,
Margaret Gilmour.
In her final Will, the subject of this proceeding, as already mentioned, the Deceased excluded her grandchildren Leanne Martin and Tania entirely, without any reservation as expressed in the earlier codicil.
Legislation and Legal Principles
The Legislation
Section 91 contained in Part IV of the Act (the “Family Provision”) is pivotal. The current version of this provision was introduced by Part 7 of the Wills Act 1997 (Vic). It provides:
91. Power of the Court to make maintenance order
(1)Despite anything in this Act to the contrary, the Court may 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 provision.
(2)The Court must not make an order under subsection (1) in favour of a person unless-
(a) that person has applied for the order; or
(b)another person has applied for the order on behalf of that person.
(3)The Court must not make an order under subsection (1) in favour of a person unless the Court is of the opinion that the distribution of the estate of the deceased person effected by-
(a) his or her will (if any); or
(b) the operation of the provisions of Part I, Division 6; or
(c)both the will and the operation of the provisions-
does not make adequate provision for the proper maintenance and support of the person.
(4) The Court in determining-
(a)whether or not the deceased had responsibility to make provision for a person; and
(b)whether or not the distribution of the estate of the deceased person as effected by-
(i) the deceased's will; or
(ii) the operation of the provisions of Part I, Division 6; or
(iii)both the will and the operation of the provisions- makes adequate provision for the proper maintenance and support of the person; and
(c)the amount of provision (if any) which the Court may order for the person; and
(d)any other matter related to an application for an order under subsection (1)-
must have regard to-
(e)any family or other relationship between the deceased person and the applicant, including the nature of the relationship and, where relevant, the length of the relationship;
(f)any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate;
(g)the size and nature of the estate of the deceased person and any charges and liabilities to which the estate is subject;
(h)the financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and for the foreseeable future;
(i)any physical, mental or intellectual disability of any applicant or any beneficiary of the estate;
(j) the age of the applicant;
(k)any contribution (not for adequate consideration) of the applicant to building up the estate or to the welfare of the deceased or the family of the deceased;
(l)any benefits previously given by the deceased person to any applicant or to any beneficiary;
(m)whether the applicant was being maintained by the deceased person before that person's death either wholly or partly and, where the Court considers it relevant, the extent to which and the basis upon which the deceased had assumed that responsibility;
(n) the liability of any other person to maintain the applicant;
(o) the character and conduct of the applicant or any other person;
(p) any other matter the Court considers relevant.
Very useful analyses of the history of the provision and the development of the surrounding case law as to the scope of the Court’s power to make an order and the principles which govern the exercise of the power are to be found in the judgments of Neave JA in Forsyth v Sinclair (“Forsyth”) [2] and Bell J in Whitehead v State Trustees Ltd (“Whitehead”).[3]
[2]Forsyth v Sinclair [2010] VSCA 247 at [55 – 66].
[3]Whitehead v State Trustees Ltd [2011] VSC 424 [16 – 72].
The starting point is the power of the court to make an order for the proper maintenance and support of a person is specified in s 91(1) of the Act, which provides:
Despite anything in this Act to the contrary, the Court may 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 provision.[4]
[4]Administration and Probate Act1958 (Vic) s 91(3).
Under s 91(3), the Court must not make an order unless it is of the opinion that the distribution of the estate affected by the deceased’s will does not make adequate provision for the proper maintenance and support of the person. In this case, the Deceased made the Will and it is the contention of Tania that it failed to make that provision.
In determining the three critical questions in applications of this kind, namely whether the Deceased had a responsibility to make provision for a person, whether the Will made adequate provision for the proper maintenance and support of that person and the amount of provision (if any) which should be ordered, s 91(4) requires the Court to take account of the considerations specified in paras (e)‑(p).
The legislation in Victoria evolved from a “category-based system” in favour of the adoption of a discretionary system.[5] As observed by Bell J in Whitehead:
It can be seen, therefore, that the adoption of a discretionary system, and the repeal of the category-based system, of eligibility was a deliberate policy choice by the legislature which followed careful consideration of the options over a number of years and in the context of national process of reform. [6]
[5]Whitehead v State Trustees Ltd [2011] VSC 424 [23].
[6]Whitehead v State Trustees Ltd [2011] VSC 424 [29].
Nevertheless, it is a discretion to be exercised within recognised principles applied on a case by case basis.
The legislation is “remedial in character and ‘must be so construed as to give the most complete remedy which the phraseology will permit’ “.[7] Lowe J said in the case of In re Liston that “the courts, from the inception [have] adopted a liberal view” of the interpretation of the legislation. [8] As Bell J observed in Whitehead:[9]
In Vigolo v Bostin,[10] Gleeson CJ said the courts ‘have interpreted and applied the legislation by giving it a purposive construction’.[11] That approach to the interpretation of the legislation was again emphasised in Barns v Barns.[12] Gummow and Hayne JJ said ‘the court should not be alert in placing a restricted construction upon the terms of such a law’.[13]
[7]Whitehead v State Trustees Ltd (ibid) (Bell J) at [33]; Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494, 513 (Williams J), citing Holmes v Permanent Trustee Company of New South Wales Ltd (1932) 47 CLR 113, 119 (Rich J, Evatt and McTeirnan JJ agreeing). See also Worladge v Dodridge (1957) 97 CLR 1, 9 (Williams and Fullagar JJ).
[8]In re Liston [1957] VR 50, 51. See also Popple v Rowe [1998] 1 VR 651, 659 (Winneke P).
[9]Whitehead v State Trustees Ltd [2011] VSC 424, [33].
[10]Vigolo v Bostin (2004) 221 CLR 191.
[11]Vigolo v Bostin (2004) 221 CLR 191, 197.
[12]Barns v Barns (2003) 214 CLR 169, [34] (Gleeson CJ), [44] (Gummow and Hayne JJ), [124] (Kirby J).
[13]Barns v Barns (2003) 214 CLR 169 [44].
The Legislation Qualifies Testamentary Freedom
The exercise of the discretion provided in the legislation significantly qualifies the freedom of testamentary disposition. This was not always the case. As observed by Bell J in Whitehead,[14] in 1873 the absolute right to testamentary freedom could be stated with fundamental certainty:
[B]y the law of England everyone is left free to choose the person upon whom he will bestow his property after death entirely unfettered in the selection he may think proper to make. He may disinherit, either wholly or partly, his children, and leave his property to strangers to gratify his spite, or to charities to gratify his pride, and we must give effect to his will, however much we may condemn the course he has pursued.[15]
[14]Whitehead v State Trustees Ltd [2011] VSC 424 [36].
[15]Boughton v Knight (1873) LR 3 P&D 64, 66 (Sir J Hannen); see also Banks v Goodfellow (1870) LR 5 QB 549, 563-565 (Cockburn CJ, Blackfellow, Mellor and Hannen JJ).
His Honour in Whitehead proceeded to trace the historical developments in this way:
As social conditions in the United Kingdom and elsewhere improved, the concern with individual rights which came with the industrial revolution begat the struggle for equal rights for women. When women achieved the suffrage, they used it successfully to attack the extreme principle which permitted such appalling social results. Parliaments passed family provision legislation which modified the principle of testamentary freedom, beginning with the Testators’ Family Maintenance Act 1900 (NZ), which established a model which was that country’s great legislative gift to the Commonwealth. The legislation, held Lord Simon in Schaefer v Schuhmann,[16] in a dissenting judgment which was later approved by the High Court,[17] ended ‘an interval of unbridled testamentary licence’[18].[19]
[16]Schaefer v Schuhmann [1972] AC 572.
[17]Barns v Barns (2003) 214 CLR 169, [34] (Gleeson CJ),[103], [114] (Gummow and Hayne JJ), [123]-[124] (Kirby J).
[18]Schaefer v Schuhmann [1972] AC 572, 596.
[19]Whitehead v State Trustees Ltd [2011] VSC 424 [38].
What remains of the principle of testamentary freedom is stated in Pontifical Society for the Propagation of the Faith v Scales,[20] where Dixon CJ said the discretion given to the court was not to “re-write the will of a testator”.[21] This approach was reflected in Vigolo v Bostin,[22] where Gleeson CJ said the legislation “preserved freedom of testamentary disposition, but subjected that freedom to a new qualification”.[23]
[20]Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9.
[21]Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9, 19.
[22]Vigolo v Bostin (2004) 221 CLR 191.
[23]Vigolo v Bostin (2004) 221 CLR 191 [10].
In Victoria the principle was echoed in Grey v Harrison,[24] where Callaway JA said, with Tadgell and Charles JJA agreeing, that:
[W]e must not underestimate the significance, both practical and symbolic, of freedom of testation. It is one of the badges of society that has graduated from primitive conditions and a notable human right. [25]
[24]Grey v Harrison [1997] 2 VR 359.
[25]Grey v Harrison [1997] 2 VR 359, 363.
Although this observation was made in reference to the pre-1997 legislation in Victoria, it was repeated by Callaway JA, with Batt and Buchanan JJA agreeing, in Lee v Hearn[26] in reference to the current legislation, and has been regularly cited since.[27] The result is that, as expressed by Bell J in Whitehead:
[I]t is therefore clear that, when deciding whether to make an order for provision under s 91(1), preserving the deceased’s freedom of testamentary disposition is a significant discretionary consideration.[28];[29]
[26]Lee v Hearn (2005) 11 VR 270 [6].
[27]Schmidt v Watkins [2002] VSC 273, [14] (Harper J); Herszlikowicz v Czarny [2005] VSC 354, [110] (Hargrave J); Cangia v Cangia [2008] VSC 455, [36] (Whelan J); Robertson v Koska [2010] VSC 134, [79] (Vickery J).
[28]Whitehead v State Trustees Ltd [2011] VSC 424 [40].
[29]See also Collicoat v McMillan [1999] 3 VR 803, [45] (Ormiston J); Downing v Downing [2003] VSC 28, [42] (Osborn J); McKenzie v Topp [2004] VSC 90, [52] (Nettle J); Unger v Sanchez [2009] VSC 541, [64] (Kaye J).
This draws attention to the two fundamental interests which are at stake[30] and “which are reconciled in the concept of the moral duty of the deceased to provide”.[31] The weight to be attributed to these interests was described by Cockburn CJ in Banks v Goodfellow[32] in the following terms:
The law of every civilised people concedes to the owner of property the right of determining by his last will, either in whole or in part, to whom the effects which he leaves behind him shall pass. Yet it is clear that, though the law leaves to the owner of property absolute freedom in this ultimate disposal of that of which he is thus enabled to dispose, a moral responsibility of no ordinary importance attaches to the exercise of the right thus given.[33]
[30]See the “two interests” analysis of McLachlin J in Tataryn v Tataryn [1994] 2 SCR 807, 814-815.
[31]Whitehead v State Trustees Ltd [2011] VSC 424 [41].
[32]Banks v Goodfellow (1875) LR 549 (Cockburn CJ, Blackburn, Mellor and Hannen JJ).
[33]Banks v Goodfellow (1875) LR 549, 563.
Concept of “Moral Duty”
Balance between the competing interests is achieved through a consideration of the concept of “moral duty”. An early example is provided by Edwards J in the case of In re Allardice:
I think that the duty of the court in this respect may be thus best expressed: It is the duty of the Court, so far as is possible, to place itself in all respects in the position of the testator, and to consider whether or not, having regard to all existing facts and surrounding circumstances, the testator has been guilty of a manifest breach of that moral duty which a just, but not a loving, husband or father owes towards his wife or towards his children, as the case may be. If the Court finds that the testator has been plainly guilty of a breach of such moral duty, then it is the duty of the Court to make such an order as appears to be sufficient, but no more than sufficient, to repair it. [34]
[34]In re Allardice (1910) 29 NZLR 959, 972-973.
Later, in the case of In re Allen (deceased),[35] Salmond J gave what is now regarded as the classic formulation:[36]
The Act is … designed to enforce the moral obligation of a testator to use his testamentary powers for the purpose of making proper and adequate provision after his death for the support of his wife and children, having regard to his means, to the means and deserts of the several claimants, and to the relative urgency of the various moral claims upon his bounty. The provision which the Court may properly make in default of testamentary provision is that which a just and wise father would have thought it his moral duty to make in the interests of his widow and children had he been fully aware of all the relevant circumstances. If it is manifest that the testator has, whether consciously or inadvertently, failed to perform this duty, it is the right and duty of the Court to perform it for him by making such alterations in his testamentary dispositions as may be inadequate, but no more than adequate, for that purpose …[37]
[35]In re Allen (deceased) [1922] NZLR 218.
[36]Whitehead v State Trustees Ltd [2011] VSC 424 [43].
[37]In re Allen (deceased) [1922] NZLR 218,220-221.
The “moral duty” approach was entrenched by Ormiston J in Collicoat v McMillan where the concept was authoritatively described in the following terms:[38]
In my opinion the expression ‘moral claim’ has always been treated as a convenient shorthand expression referring to the right correlative to the duty imposed on testators to make adequate provision for the proper maintenance and support of persons within the class specified. That ‘moral obligation’, as described in Re Allen and many later cases, reflects a duty resting on a testator to make not merely adequate or sufficient financial provision for members of his or her family in the specified class but also the obligation to measure that adequacy or sufficiency by reference to what is right and proper according to accepted community standards.[39]
[38]As approved by the Victorian Court of Appeal in Blair v Blair (2004) 10 VR 69 (Chernov and Nettle JJA and Hansen AJA); Lee v Hearn (2005) 11 VR 270 (Callaway, Batt and Buchanan JJA); and Forsyth v Sinclair [2010] VSCA 147 (Neave and Redlich JJA and Habersberger AJA).
[39]Collicoat v McMillan [1999] 3 VR 803, 818 [43].
Accordingly, as observed by Bell J in Whitehead,[40] the standard to be implied, which is implicit in the legislation is, in the words of Nettle JA in Blair v Blair:
[W]hether and if so what provision a wise and just testator would have thought it his duty to make in the interests of the claimant. [41]
[40]Whitehead v State Trustees Ltd [2011] VSC 424[47]
[41]Blair v Blair (2004) 10 VR 69, [41].
Under the amended legislation, the scope of that duty determines not just the amount of the provision which must be made but the persons to whom the deceased has the responsibility to make the provision.
As to the class of persons to whom the moral duty may be owed by a testator, the Victorian legislation does not provide for a category-based eligibility system. Indeed, any person “at all”[42] for whom the deceased had a responsibility to make provision may apply for an order under s 91(1).[43] Once found, it is the moral responsibility which determines the class of persons which ought to be provided for.
[42]Lee v Hearn (2005) 11 VR 270 [7] (Callaway JA, Batt and Buchanan JJA agreeing).
[43]See also Coombes v Ward [2004] VSCA 51, [3] (Winneke P).
The person to whom a relevant duty is owed by is not confined to a member of the family of the testator. Thus the existence of ‘any family or other relationship” between the deceased and the person, including its nature and length, is specified to be a mandatory relevant consideration: see s 91(4)(e). I am in agreement with Bell J in Whitehead that describing the statutory scheme as “testator’s family maintenance” is a misnomer and “testator’s responsibility to provide” may now be more accurate. [44]
[44]Whitehead v State Trustees Ltd [2011] VSC 424 [48].
Such an approach is in conformity with the observations of Neave JA in Forsyth where her Honour said in relation to a claim made by the deceased’s lover and companion (Marlene) who enjoyed a “loving and intimate” relationship with the deceased (Malcolm) for some 12 years prior to his death from a heart attack in 2004:
The extension of s 91 to permit people falling outside defined categories to apply for further provision recognised that a testator who is not related by marriage or blood to the applicant may have a moral duty to make adequate provision for that applicant’s proper maintenance and support. His Honour had correctly focussed on the particular characteristics of the relationship between Malcolm and Marlene, rather than attempting to fit it into a preconceived category. Prevailing community standards were relevant in deciding whether a testator had a moral duty to provide for a particular person’s maintenance and support and it was not contrary to these standards to find that Malcolm should have provided for Marlene. [45]
[45]Forsyth v Sinclair [2010] VSCA 247 per Neave JA at [78].
Thus domestic partners being persons in a de facto marriage-like relationship, such as one within s 35(2) of the Relationship Act 2008 (Vic) whether heterosexual or homosexual, may fall within the expression “family or other relationship” in s 91(4)(e), as may other persons, outside a domestic partner relationship, for whom a responsibility arises in the testator to provide proper maintenance and support.[46]
[46]Schmidt v Watkins [2002] VSC 273, [22] (Harper J); In the matter of the will of GG Sitch (deceased) [2005] VSC 308, [71] (Gillard J); Carter v O’Brien [2007] VSC 21, [27] (Mandie J); Anslow v Journeaux [2009] VSC 250, [41] (Beach J); Sinclair v Forsyth [2008] VSC 250, [88] (Neave JA, Redlich JA and Habersberger AJA agreeing).
In Lee v Hearn the Court of Appeal (Victoria) also acknowledged the relevance of changes in community attitudes in determining whether a deceased person had a moral duty to provide for the applicant. [47] This decision was in turn cited with approval by Neave JA in Forsyth.[48]
[47](Lee v Hearn (2005) 11 VR 270 at 274 per Callaway JA; at 286 per Batt JA
[48]Forsyth v Sinclair [2010] VSCA 247 [84
In Unger v Sanchez Kaye J said that it was plain from the language of s 91 of the Act that the plaintiff need not be a member of the deceased’s family, although he observed that it would be a rare or exceptional case in which a testator was held to have a moral duty to provide for the maintenance and support of a neighbour or close friend, even where that person had given invaluable service to the testator. [49]
[49]Unger v Sanchez [2009] VSC 541 at [70]
Position of Grandchildren Claimants
The position of grandchildren has also received attention in the case law.
In Sherlock v Guest (“Sherlock”)[50] Beach J dealt with the relationship in the context of considering an application for an extension of time in which to bring an application. The question whether there was an arguable case that a grandparent had an obligation to make provision for a grandchild arose for consideration. His Honour said in this regard:
There is no moral obligation upon a grandfather to make provision for the maintenance and support of his grandchildren simply by virtue of the existence of such a relationship. Such a moral obligation will rest upon the parents of a grandchild but not the grandparents.
However, such a moral obligation can be created in a particular case by reason, for example, of the care and affection given by a grandchild to his or her grandparent. [51]
[50]Sherlock v Guest [1999] VSC 431..
[51]Sherlock v Guest [1999] VSC 431 [25-26].
Nevertheless, Beach J in Sherlock acknowledged that although no moral obligation automatically arose by virtue of the relationship
if ... a grandchild can satisfy the criteria spelt out in s 91 of the Act, he or she may be entitled to an order, not because he is a grandchild per se, but because he or she satisfies the new criteria. [52]
[52]Sherlock v Guest [1999] VSC 431 [27].
In conclusion in Sherlock, Beach J found that there was no evidence on which to conclude that it was arguable that the applicant grandchildren satisfied the statutory criteria.
In Re Trescowthick Warren J (as her Honour the Chief Justice then was) also considered an application for an extension of time in which to commence a proceeding for provision under the Act. [53] The application was made by grandchildren of the deceased on one side of the family who believed that both during the lifetime of the deceased and in his will the deceased favoured the grandchildren from the other side of the family over them. On this basis the applicant grandchildren sought provision out of the estate of the deceased in their favour. her Honour considered, in essence, that a case founded upon what appeared to be mere unfairness, had no substance under s 91 of the Act. In this regard, her Honour observed:
It is not necessary for me to determine the specific extent of the generosity of the deceased towards his grandchildren. However, the observation can be made on the basis of the affidavits filed on behalf of both the plaintiffs and the defendants that the deceased and his wife during their lifetimes may have favoured the Morison side more so than the Leahy side. There may well have been reasons for this. It has been postulated in the affidavits that the deceased and his wife disliked some of the spouses of their grandchildren and regarded some grandchildren as more of a "favourite" than other grandchildren. All of these matters are irrelevant. It has oft been stated by the courts that the purpose of the discretion vested in the court under s 91 (in its previous form) and I consider it to still be the appropriate principle that the courts' role is not to re-write the will of a deceased to achieve a fairer distribution of the assets of the deceased. Rather, the role of the courts is to ensure that a claim brought under s 91 of the Act meets the criteria laid out therein. It is necessary, therefore, for me to consider each of the potential claims of the plaintiffs. [54]
[53]Re Trescowthick [1999] VSC 409.
[54]Re Trescowthick [1999] VSC 409 [28].
Warren J in Trescowthick considered the merits of the various claims made by the applicants under s 91 of the Act, [55] but concluded that
it was improbable that their claims would succeed and accordingly consider that an extension of time should not be granted. [56]
[55]Re Trescowthick [1999] VSC 409. [1999] VSC 409 [36 – 47].
[56]Re Trescowthick [1999] VSC 409.[48].
In the course of the reasoning in Trescowthick, her Honour observed that the grandparent:
had no direct parental or grandparental duty to provide for any of their grandchildren including each of the plaintiffs. The fact that the deceased and his wife during their lifetime made generous gifts towards some of the grandchildren, including the plaintiffs, and in particular made generous contributions towards the education of some grandchildren cannot, in my view, be construed or characterised as an obligation or responsibility on the part of the deceased to any of the [grandchildren].[57]
Warren J rejected the notion that a pattern of significant generosity by grandparents, including contributions to education, can convert the grandparental relationship into one of obligation to the recipients, as distinct from one of voluntary support, generosity and indulgence. In this regard, her Honour observed:
The fact that the deceased and his wife during their lifetime made generous gifts towards some of the grandchildren, including the plaintiffs, and, in particular, made generous contributions towards the education of some of the grandchildren cannot in my view be construed or characterised as an obligation or responsibility on the part of the deceased to any of the plaintiffs.[58]
[57]Re Trescowthick [1999] VSC 409. [37].
[58]Re Trescowthick [1999] VSC 409. [37].
A detailed analysis of the position of grandchildren was undertaken by Dodds-Streeton J in MacEwan Shaw v Shaw (“MacEwan Shaw”).[59]
[59]MacEwan Shaw v Shaw [2003] VSC 318.
In the course of reasoning, Dodds-Streeton J referred to Harris v Bennett and O'Brien,[60] where McDonald J noted with apparent approval the above observations of Beach and Warren JJ.[61] His Honour considered that a claim by an illegitimate infant granddaughter should not be struck out as frivolous and vexatious. The granddaughter had certain physical and psychiatric problems. Various factors were noted by his Honour as relevant to her claim. The estate was large, valued at over $12 million.[62] In all the circumstances it was considered that the granddaughter's claim was not so untenable that it could not possibly succeed. McDonald J nevertheless endorsed the view that a grandchild, in the context of a Part IV application, cannot rely solely on the existence of a family relationship to establish a responsibility in the grandparent to provide for maintenance and support out of the estate.[63]
[60]Harris v Bennett and O'Brien [2002] VSC 139. (15 April 2002).
[61]Harris v Bennett and O'Brien [2002] VSC 139 [69-73].
[62]Harris v Bennett and O'Brien [2002] VSC 139 [60].
[63]Harris v Bennett and O'Brien [2002] VSC 139 [74].
Dodds-Streeton J in MacEwan Shaw also referred to a case in Western Australia which is not distant from the present factual situation. In Kitson v Franks,[64] Heenan J of the Supreme Court of Western Australia ordered provision for young adult grandchildren where the deceased grandmother's estate was sufficient and the needs of the grandmother's own children were relatively modest. In that case, the deceased had no surviving spouse and the grandchildren's father (the deceased's son) had predeceased the testator. The Court of Appeal later upheld the beneficiary's appeal in relation to one of the applicants.[65]
[64]Kitson v Franks [2000] WASC 115 (12 May 2000).
[65]Kitson v Franks [2001] WASCA 134 (27 April 2001).
Dodds-Streeton J in MacEwan Shaw also referred to the New Zealand case of Re Horton.[66] As her Honour noted,[67] the case involved a contest between the deceased testator's children by his second marriage and his grandchildren by a son of his first marriage. The son of the first marriage had been largely rejected by the testator following his second marriage. The testator had done little for the son, who had not enjoyed material success in life. The testator's son was in poor financial circumstances. He and his family lived in rented accommodation. He received only a small legacy, with a substitution to his teenage children should he predecease them. The testator's estate was substantial enough to permit provision for both the plaintiff grandchildren and for the second family. On appeal, the Court of Appeal apparently accepted the trial judge's view that "the claim of grandchildren whose parents are alive is ordinarily not a strong one". It considered, however, that the circumstances of the case to be "somewhat special". The grandchildren's father had been neglected by the testator. He had received only a small legacy. His financial position and history made it "more than doubtful" that he would provide substantially for his children's future. Their Honours observed that:
the need (if any) of grandchildren for provision must be measured in the light, inter alia, of the ability of their own parents to provide for them. There is no suggestion that these grandchildren can expect any significant family provision except from their grandfather's estate.[68]
[66]Re Horton [1976] 1 NZLR 251.
[67]MacEwan Shaw v Shaw [2003] VSC 318 [91- 94].
[68]MacEwan Shaw v Shaw [2003] VSC 318 [94].
It should be noted that in MacEwan Shaw Dodds-Streeton J distinguished the case before her Honour with the observation that
[i]n contrast to Re Horton, in the present case, the deceased has been exceptionally generous and supportive to his son, the plaintiff's father.
By way of conclusion in MacEwan Shaw, Dodds-Streeton J summarised the application of the legislation as it may apply to claims by grandchildren in the following terms:
The amended legislation, while expanding the class of eligible applicants, confers only a limited jurisdiction to interfere with freedom of testation. It does not license the court to effect a redistribution of an estate because it would satisfy notions of familial generosity, or because the claimant has few resources and the defendant taking benefits under the will is relatively well off.
Rather, it remains necessary to establish a need for provision and maintenance in the applicant in order to enliven the jurisdiction. If the need is not established, the court has no jurisdiction to make an order, no matter how large the testator's estate. Nevertheless, the size of the estate is not irrelevant to determining need, which is not an absolute concept.
Further, it is necessary to establish a breach of duty or moral obligation on the part of the testator, which constitutes a departure from the standards which a wise and just testator would have applied. There must be an abuse of the freedom of testation.
Prevailing community standards, which may alter according to changing social and economic conditions, are the criteria against which the duty and moral obligation, and any departure from them, must be measured.
According to prevailing community standards and applicable law, as consistently recognised by this Court, the obligation to maintain and provide for infants ordinarily rests upon their parents, rather than on grandparents.
For the defendant, it was submitted that in order to establish a grandparent's moral obligation to provide for children, there must be "truly exceptional" circumstances, where, for example, it is possible to conclude that the grandchild performed special services for the deceased requiring recognition (Collicoat v McMillan) or alternatively, that the deceased assumed a parental role at least for a time or to a material degree, establishing a substantial dependency.
The defendant further submitted that a relative want of resources in the parents does not, without more, create an obligation towards grandchildren, even if the deceased grandparent has habitually made significant gifts to those parents, which assisted them to fulfil the responsibility to provide for their children.
In contrast to the New South Wales legislation, the Victorian provisions impose no precondition of dependency in order to establish a moral duty to provide for a grandchild. The Victorian legislation is more flexible, although the determination of responsibility is governed by reference to specified factors.
While a grandparent's assumption of the parental role of provider is a strong prima facie indicator of a responsibility, it is not conclusive. In every case, it would be necessary to consider the particular circumstances of the relationship and the impact of each of the other factors specified in s 91(4)(e)-(p) of the Act.
Conversely, the absence of a de facto parental role in a grandparent will not necessarily exclude responsibility in the relevant sense. Where a grandparent of ample means has done nothing during life to assist a grandchild who has significant needs, the wise and just testator reflective of prevailing community standards might well recognise, in certain circumstances, a moral duty to provide.
In my opinion, however, where children are in the primary care of their own parents, who are capable of fulfilling their basic needs, prevailing community standards would not, in the absence of some special factor or unusual circumstances, impose on a grandparent a responsibility to provide. [69]
[69]MacEwan Shaw v Shaw [2003] VSC 318 [213 - 223].
Applying the law to the facts before her Honour in MacEwan Shaw, Dodds-Streeton J, in dismissing the application, concluded that:
In the present case, I do not consider that the deceased, judged by reference to the wise and just testator reflective of prevailing community standards, had a responsibility to provide for the maintenance and support of the plaintiffs. There are no circumstances which justify the imposition of a moral duty upon the deceased as a grandparent. In particular, his failure to make testamentary provision for funding the plaintiffs' secondary education at a fee paying private school did not, in my opinion, constitute a breach of moral duty or an abuse of freedom of testation. [70]
[70]MacEwan Shaw v Shaw [2003] VSC 318 [95].
The Defendant in the course of submissions also made reference to the New South Wales authorities of Simonsv Permanent Trustee Co Ltd (Palmer J NSWSC) (“Simons”) [71] and Bowditchv NSW Trustee and Guardian (Hallen AsJ NSWSC) (“Bowditch”).[72] New South Wales authorities are not a close guide in Victoria because under the law there it was and is necessary for a grandchild to come within the definition of an “eligible person”, and to establish dependency.[73] Nevertheless, these authorities do provide a useful body of analysis as to the position of grandparents and their responsibilities to grandchildren which has application to the Victorian legislation.
[71]Simonsv Permanent Trustee Co Ltd [2005] NSWSC 223.
[72]Bowditchv NSW Trustee and Guardian [2012] NSWSC 275.
[73]Bowditchv NSW Trustee and Guardian [2012] NSWSC 275 [46] et seq.
In Simons Palmer J rejected a claim brought by a grandchild of the deceased. A summary of the legal principles relating to the claims made by the grandchildren in that case are set out as follows:
The authorities make it clear that a grandchild is not normally regarded as a natural object of a testator’s testamentary recognition and that additional factors need to be shown to bring a grandchild into the category of persons for whom the testator ought to have made provision. These additional factors usually show that the testator had come to assume, for some significant time in the grandchild’s life, a position more akin to that of a parent than a grandparent, with direct responsibility for the grandchild’s support and welfare, or else that the testator has undertaken a continuing and substantial responsibility to support the plaintiff financially: see eg Tsivinsky v Tsivinsky (NSWCA, Kirby P, 5 December 1991, unreported); Sayer v Sayer [1999] NSWCA 340; MacEwan-Shaw v Shaw [2003] VSC 318; O’Dea v O’Dea [2005] NSWSC 46.
The authorities are equally clear that the grandchild’s dependence, whether whole or partial, on the grandparent must be direct and immediate; it is not sufficient that the grandchild’s dependence is the indirect result of the testator providing support and maintenance for his or her own adult child and thereby incidentally benefiting the testator’s grandchildren who are directly dependent on that child: see eg Petrohilos v Hunter(1991) 25 NSWLR 343 at 346; Re Fulop(1987) 8 NSWLR 679 at 682; Pearson v Jones [2000] NSWSC 799; MacEwan-Shaw v Shaw (supra).
Further, the fact that the testator occasionally, or even frequently, made gifts to or for the benefit of the grandchild does not in itself make the grandchild wholly or partially dependent on the testator for the purposes of s 6(1)(d). To qualify the grandchild as a dependant, the gifts or benefits provided by the testator must be of such regularity and significance that one can say that the testator had clearly assumed a continuing and substantial responsibility for the grandchild’s support and welfare: see eg Leahey & Trescowthick [1999] VSC 409; MacEwan-Shaw v Shaw (supra); Pearson v Jones (supra). [74]
[74]Simonsv Permanent Trustee Co Ltd [2005] NSWSC 223 [25– 27].
In Bowditch Hallen AsJ said:
In relation to a claim by a grandchild, the following general principles are, in my view, relevant and should be remembered:
(a)as a general rule, a grandparent does not have a responsibility to make provision for a grandchild; that obligation rests on the parent of the grandchild. Nor is a grandchild, normally, regarded as a natural object of the deceased’s testamentary recognition.
(b)Where a grandchild has lost his, or her, parents at an early age, or when he, or she, has been taken in by the grandparent in circumstances where the grandparent becomes in loco parentis, these factors would, prima facie, give rise to a claim by a grandchild to be provided for out of the estate of the deceased grandparent. The fact that the grandchild resided with one, or more, of his, or her, grandparents is a significant factor. Even then, it should be demonstrated that the deceased had come to assume, for some significant time in the grandchild’s life, a position more akin to that of a parent than a grandparent, with direct responsibility for the grandchild’s support and welfare, or else that the deceased has undertaken a continuing and substantial responsibility to support the applicant grandchild financially or emotionally.
(c)The mere fact of a family relationship between grandparent and grandchild does not, of itself, establish any obligation to provide for the grandchild upon the death of the grandparent. A moral obligation may be created in a particular case by reason, for example, of the care and affection provided by a grandchild to his, or her, grandparent.
(d)Generosity by the grandparent to the grandchild, including contribution to the education of the child, does not convert the grandparental relationship into one of obligation to provide for the grandchild upon the death of the grandparent. It has been said that a pattern of significant generosity by a grandparent, including contributions to education, does not convert the grandparental relationship into one of obligation to the recipients, as distinct from one of voluntary support, generosity and indulgence.
(e)The fact that the deceased occasionally, or even frequently, made gifts to, or for, the benefit of the grandchild does not, in itself, make the grandchild wholly, or partially, dependent on the deceased for the purposes of the Act.
(f)It is relevant to consider what inheritance, or financial support, a grandchild might fairly expect from his, or her, parents.
The authorities that provide the basis for the above summary, in relation to grandchildren, include Tsivinsky v Tsivinsky; Sayer v Sayer [1999] NSWCA 340; MacEwan-Shaw v Shaw, O’Dea v O’Dea [2005] NSWSC 46; Simons v Permanent Trustee Co Ltd: Estate D Hakim [2005] NSWSC 223. [75]
[75]Bowditchv NSW Trustee and Guardian [2012] NSWSC 275 [113- 114].
The Plaintiff placed reliance on the Victorian case of Petrucci v Fields (“Petrucci“)where claim by grandchildren where their father had predeceased his mother was allowed. [76] Mandie J, after considering MacEwan Shaw, observed in relation to claims made by grandchildren:
It seems to me that grandchildren can neither be "ruled in" nor "ruled out" until all the facts are examined. It is important to distinguish between the general obligation of parents to provide for and support their children and the potential responsibility, in the statutory sense, of a testator, who is a grandparent, to make provision out of his estate for the proper maintenance and support of grandchildren. The obligation of living parents to provide for their children does not necessarily negate, in an appropriate case, the moral responsibility of a grandparent to make provision for the maintenance and support of those grandchildren out of his estate.[77]
[76]Petrucci v Fields [2004] VSC 425.
[77]Petrucci v Fields [2004] VSC 425 [64].
In Petrucci, Mandie J determined that the door was sufficiently open to find that a grandfather had a responsibility to make provision for grandchildren who were the children of a son who had predeceased him. Although the case had some factual similarities to the present, like all applications made under the Act, it was decided in circumstances hallmarked by some notable differences. This example serves to underscore the task of the Court to assess each claim on its individual merits by application of the common law principles founded in the legislation - drawing upon the factual illustrations provided by preceding cases but not being governed by them.
Pulling these threads together in relation to claims by grandchildren under the Act the following may be said:
(a)There is no moral obligation upon a grandparent to make provision for the maintenance and support of his or her grandchildren simply by virtue of the existence of such a relationship. Such a moral obligation will normally rest upon the parents of a grandchild but not the grandparents;
(b)Additional or special factors need to be shown to bring a grandchild into the category of persons for whom the testator ought to have made provision. The presence and nature of these additional factors will vary from case to case, as will the weight to be assigned to each in the mix of considerations.
(c)The categories of “additional or special factors” are not closed. In every case, it will be necessary to consider the particular circumstances of the relationship and the impact of each of the other factors specified in s 91(4)(e)-(p) of the Act to which are to be applied the standards of a wise and just testator when measured against prevailing community standards.
(d) Examples of relevant additional or special factors include:
(i)where the testator had come to assume, for some significant time in the grandchild’s life, a position more akin to that of a parent (in loco parentis) than a grandparent, with direct responsibility for the grandchild’s support and welfare. However, absence of a de facto parental role will not necessarily exclude responsibility to provide in a will;
(ii)where the testator has undertaken a continuing and substantial responsibility to support the grandchild financially;
(iii)where particular care and material support combined with emotional comfort and affection has been provided by a grandchild to his or her grandparent;
(iv)it is also relevant to consider whether a grandchild has lost the immediate and continuing support of a parent who would normally be expected to have assumed direct responsibility for the grandchild’s advancement and welfare and what inheritance, or financial support, a grandchild might fairly expect from his, or her, parents for future needs.
(d)Generosity shown by the grandparent to a grandchild, including contribution to the education of the child, even if manifested by a pattern of significant generosity, does not convert the grandparental relationship into one of obligation to provide for the grandchild upon the death of the grandparent as distinct from one of voluntary support, generosity and indulgence.
(e)Considerations of fairness, where for example grandchildren from one side of the family are preferred in the will over those from another branch of the family, are irrelevant. The purpose of the discretion vested in the Court is not to re-write the will of a deceased to achieve a fairer distribution of the assets of the deceased.
Test for “Adequate Provision for the Proper Maintenance and Support”
As to what is adequate provision for proper maintenance and support, the court is required to determine whether the will in question made “adequate provision for the proper maintenance and support” (s 91(4)) of a person for whom the deceased “had responsibility” to make that provision (s 91(1)).
The approach of the Court to this consideration was analysed by Bell J in Whitehead in the following terms, which I adopt:
The power make an order for provision is meant to cover a multifarious range of circumstances which cannot be categorised in advance. Determining what is adequate and proper must be approached on a case by case basis. ‘No two cases will be exactly alike’, held Fullagar J in the case of In re Sinnott.[78] It has been held that there ‘are no fixed standards’ and the court must consider the matter ‘upon the basis of its own general knowledge and experience of current social conditions and standards’.[79] The task involves ‘making a value judgment’ or ‘a sound discretionary judgment’ and has been compared to assessing the quantum of damages for pain and suffering or for loss of amenities of life in personal injuries cases.[80]
The courts have frequently emphasised that the provision must be both ‘adequate’ and ‘proper’, that ‘proper’ is ‘something different’[81] to ‘adequate’ and both words ‘must be given their full value’.[82] The question is ‘not merely adequacy or sufficiency but whether the distribution has measured up to the obligations which the statute imposes on a testator’.[83] The ‘station in life’ of the parties and their reasonable expectations must be considered, being those ‘reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future’.[84] What is adequate and proper ‘must always be relative’[85] and will depend on ‘all the circumstances of the case’.[86]In Vigolo v Bostin,[87] Gleeson CJ said:
The legislation was not merely, or even primarily, concerned with relieving the state of the financial burden of supporting indigent widows and children. The courts were not empowered merely to make such provision for an applicant as would rescue the applicant from destitution.[88]
…
In forming a view about that critical matter, the considerations in s 91(4)(e)-(p) must be taken into account. The standard of maintenance and support must reflect prevailing community standards. [89]
[78]In re Sinnott [1948] VLR 279, 281 (Fullagar J).
[79]Goodman v Windeyer (1980) 144 CLR 490, 502 (Gibbs J, Stephen and Mason JJ agreeing), applying In re Hodgson [1955] VLR 481, 491 (Southall J).
[80]Singer v Berghouse [1994] 181 CLR 201, 211 (Mason CJ, Deane and McHugh JJ).
[81]Bosch v Perpetual Trustee Company Ltd [1938] AC 463, 476 (Privy Council).
[82]Blore v Lang (1960) 104 CLR 124, 128 (Dixon CJ).
[83]Collicoat v McMillan [1999] 3 VR 803, [40] (Ormiston J).
[84]Vigolo v Bostin (2005) 221 CLR 191, [114] (Callinan and Heydon JJ).
[85]Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9, 19 (Dixon CJ).
[86]McCosker v McCosker (1957) 97 CLR 566, 571, 575 (Dixon CJ and Williams J); see also Vigolo v Bostin (2005) 221 CLR 191, [228] (Callinan and Heydon JJ).
[87]Vigolo v Bostin (2005) 221 CLR 191.
[88]Vigolo v Bostin (2005) 221 CLR 191 [12].
[89]Whitehead v State Trustees Ltd [2011] VSC 424 [53-55].
As Ormiston J in Collicoat v McMillan where the concept was authoritatively described in the following terms:[90]
In my opinion the expression ‘moral claim’ has always been treated as a convenient shorthand expression referring to the right correlative to the duty imposed on testators to make adequate provision for the proper maintenance and support of persons within the class specified. That ‘moral obligation’, as described in Re Allen and many later cases, reflects a duty resting on a testator to make not merely adequate or sufficient financial provision for members of his or her family in the specified class but also the obligation to measure that adequacy or sufficiency by reference to what is right and proper according to accepted community standards.[91]
[90]As approved by the Victorian Court of Appeal in Blair v Blair (2004) 10 VR 69 (Chernov and Nettle JJA and Hansen AJA); Lee v Hearn (2005) 11 VR 270 (Callaway, Batt and Buchanan JJA); and Forsyth v Sinclair [2010] VSCA 147 (Neave and Redlich JJA and Habersberger AJA).
[91]Collicoat v McMillan [1999] 3 VR 803 [43].
Given the moral responsibility of the deceased to make provision is defined in terms of “prevailing community standards of what is right and appropriate”,[92] it is of the very nature of that responsibility that it will “change from time to time”.[93] It is not fixed or static and will “evolve in accordance with the prevailing community views and attitudes”.[94]
[92]White v Barron (1980) 144 CLR 431, 440 (Stephen J); Ormiston J in Collicoat v McMillan [1999] 3 VR 803, [40]; and Bell J in Whitehead v State Trustees Ltd [2011] VSC 424 [58].
[93]Lee v Hearn (2005) 11 VR 270 [8] (Callaway JA, Batt and Buchanan JJA agreeing); Re Bull, deceased [2006] VSC 113, [24] (Byrne J); and Bell J in Whitehead v State Trustees Ltd [2011] VSC 424 [58].
[94]Forsyth v Sinclair (2010) VSCA 147, [83] (Neave JA, Redlich JA and Habersberger AJA agreeing); and Bell J in Whitehead, ibid at [58].
In Victoria, the legislation requires the court to consider three issues: whether the deceased had responsibility to make provision, whether the provision (if any) was adequate for the proper maintenance and support of the person and (if not) what amount of provision (if any) should be ordered.[95] In this State the date for the consideration of the first and second issues is the date of the death of the deceased and the date for the consideration of the third issue is the date of the making of the order (if any).[96]
[95]Forsyth v Sinclair [2010] VSCA 147, [58] (Neave JA, Redlich JA and Habersberger AJA agreeing); MacEwan Shaw v Shaw (2003) 11 VR 95, [42]-[47] (Dodds-Streeton J); Schmidt v Watkins [2002] VSC 273, [8] (Harper J); and Bell J in Whitehead v State Trustees Ltd [2011] VSC 424 [58].
[96]Forsyth v Sinclair [2010] VSCA 147, [58] (Neave JA, Redlich JA and Habersberger AJA agreeing); McKenzie v Topp [2004] VSC 90, [15] (Nettle J); Blair v Blair (2004) 10 VR 69, [11] (Chernov JA, Nettle JA and Hansen AJA agreeing); and Bell J Whitehead v State Trustees Ltd [2011] VSC 424 at [62-63].
Those are the principles applicable to the interpretation and application of the legislation which are to be applied. I turn now to consider the application made by the Plaintiff.
Gregor’s Case
Gregor made the following principal submissions:
(a)Tania gave no evidence of any relationship with the Deceased until early 2005, when she was 19 years of age;
(b)The only evidence of a relationship between Tania and the Deceased was summarised in the following terms:
(i)2005 - one visit where they sat and chatted, exchanged phone numbers, although Gregor says that Tania’s phone number was not in the Deceased’s telephone directory;
(ii) several weeks later Tania took the Deceased out for a drive;
(iii) a month later, Tania and the Deceased went out for lunch;
(iv) 2006 - Tania saw the Deceased over five visits that year;
(v) 2007 - Tania saw the Deceased over five visits that year;
(vi) 2008 - Tania saw the Deceased over five visits that year;
(vii)2009 - Tania saw the Deceased over five visits that year, including a visit in April 2009;
(viii)After the April 2009 visit, there were two telephone conversations between Tania and the Deceased.
(c)One factor which it was submitted that demonstrated the “non-closeness” of the relationship between Tania and the Deceased was the fact that Tania did not know for some five months after the Deceased had died that this had happened.
(d)There is no corroboration of any real, meaningful relationship between the Tania and the Deceased in the Affidavit of Tania’s mother, Faye.
(e)There is evidence of the Deceased’s consistent attitude to Tania and how she viewed her relationship and responsibility to Tania.
(f) Thus it was submitted that:
(i)the relationship between Tania and the Deceased was very minimal;
(ii)there was no financial dependency of Tania by the Deceased, or vice versa; and
(iii) there were no contributions by Tania to the Deceased’s welfare.
(g)Tania’s position may be contrasted with the position of Gregor. He enjoyed a good relationship with his mother, the Deceased, and he has financial need as set out in his Supplementary Affidavit.
(h)Added to these submissions was the observation that Ian was the author of his own misfortune in failing to challenge his father’s will which excluded him from any benefits. It was put that, in effect, that he elected not to pursue such a challenge. The consequence of this submission, if it was to be accepted, would be that Ian’s decision not to pursue a claim against his father, Ronald, should be visited upon his daughter, Tania, as a matter relevant to her present claim.
Consideration of the Section 91(4) Factors
In terms of the factors which under s 91(4) of the Act must be taken into account, the following findings are made in relation to the sub-paragraphs as they are enumerated in the sub-section:
(e) any family or other relationship:
Tania is a granddaughter of the Deceased. That relationship existed from Tania’s birth on 24 October 1986 to the death of the deceased on 23 November 2009, some 23 years.
However, prior to 2005, there was no contact between them and no relationship of any kind was able to be developed. In this context, the provision of clause 5 of the Deceased’s earlier will of 27 June 1996 is explicable. This Will was made some 10 months after Tania’s father Ian had died. Tania at this time was only 10 years of age. She was not included as a beneficiary in the earlier will or its later codicil dated 29 May 2002. Indeed clause 5 of the earlier will provided: “It is my express wish that neither OLIVE FAY SCARLETT nor her children should benefit from the provisions of this my Will”. Tania was a child of Olive Scarlett.
It was in early in 2005, when she was 18 years of age, that Tania struck up a social relationship with the Deceased. I am satisfied that from this time Tania visited the Deceased at Mt Eliza on a frequent basis and they developed and enjoyed a caring and warm relationship together.
Initial contact was made on Tania’s initiative in early 2005, where they sat and chatted and exchanged phone numbers over a period of several hours. The Deceased made coffee and they talked about Tania’s father. She asked Tania about her life and discussion followed about the family. The Deceased asked Tania to telephone her and said that they could go out together. This was followed several weeks later with Tania taking her grandmother for a drive and having afternoon tea together in a café in Mt Eliza, followed by a further drive. They parted happily, kissed each other goodbye and the Deceased extended an invitation to Tania with the words “be sure to call me”. From that point the relationship developed.
The following month Tania telephoned her grandmother and asked her if she would like to go out for lunch with her the next day. She agreed, saying “don’t be late ‘cause I’ll be waiting”. The pair went to the hotel in the main street of Mornington and enjoyed lunch. The Deceased enquired after Tania’s mother. Later, when Tania drove her home, she gave Tania some family photos including one of her father as a small child.
Following these events, Tania was accustomed to visiting her grandmother’s home about five times a year over a period of 4 years and occurred on a regular basis. Tania would also telephone her grandmother to inquire as to her well-being. The grandmother looked forward to going out with Tania. They talked about members of the family. She told Tania that visits by her family were infrequent.
At the beginning of 2009 Tania’s car was stolen. This meant that it was impossible for her to visit her grandmother as often as previously, although on one occasion early in 2009 Tania visited in a friend’s car. Following that visit, Tania spoke to her grandmother twice on the telephone when she promised to continue to ring her. The Deceased told Tania that if she didn’t answer she would probably be at the “Blue Dolphin” respite home, where she went sometimes. She suggested that if Tania telephoned her they could go out to lunch together.
Tania phoned several times over a number of months but there was no answer. She also telephoned the respite home but was told that they had had not seen the Deceased for some time. In March 2010 Tania decided to telephone Gregor, which I infer was to make an inquiry about the Deceased. Tania was told that she had died in November 2009. Tania was upset at the news and the fact that she had not been able to attend the funeral.
(f)any obligations or responsibilities of the deceased to the applicant and the beneficiaries of the estate:
The Deceased had a responsibility both to her surviving son, and to the daughter of the son who predeceased her, namely Tania. That arose from the family relationship between them, the youth and financial position of the granddaughter Tania, and the fact that the surviving son inherited the whole of her husband’s estate thereby preventing Tania’s father from making any testamentary provision for his own daughter.
(g) the size and nature of the estate:
The estate was of ample value to enable some appropriate provision to be made for the granddaughter. The net estate, before Tania’s costs, is $626,000.00.
(h) the financial resources of the parties:
Tania is presently unemployed, except for casual work in a bar in Frankston where she earns $250 per week for 15-20 hours of work per week. She presently lives with her mother in Carrum Downs, as she says: “until she gets on her feet.” She has not yet acquired any skills or assets. Gregor concedes that Tania is in financial need.
Gregor is now 65 years of age and divorced. He now receives the aged pension from a Centrelink benefit and rent from a tenant who shares his property. He has no superannuation. However, he will benefit from the greater part of the Deceased’s estate.
(i) any physical, mental or intellectual disability:
Not applicable to either Tania or Gregor. Gregor has carpal tunnel syndrome however, there is no evidence that this relevantly affects or limits his capacity.
(j) the age of the applicant:
Tania is a young person aged nearly 26.
(k) any contribution to building up the estate:
Tania has not contributed to building up the estate of the Deceased. It is, however, relevant that her father assisted to build up the estate of his father, which was then inherited by Tania’s uncle to the total exclusion of her own father. This will be taken into account in considering other relevant matters under s 91(4)(p) of the Act below.
(l)any benefits previously given by the deceased person to any applicant or to any beneficiary:
Not applicable.
(m)whether the applicant was being maintained by the deceased:
Not applicable.
(n) the liability of any other person to maintain the applicant:
Not applicable, save that Tania as a young adult continues to live with her mother.
(o) the character and conduct of the applicant or any other person:
Although the family was fractured, once Tania reached her adulthood she made contact with the Deceased, and maintained that as best she could in the circumstances. The companionship and comfort provided by Tania to the Deceased during the five years of their relationship evidenced good character. It is not suggested by Gregor that Tania has engaged in conduct that disentitles her to consideration.
(p) any other matter the Court considers relevant:
Tania’s father assisted to build up the estate of his father, Ronald, which was then inherited by Gregor to the total exclusion Tania’s father and her mother. Although it may have been open for Tania’s father, Ian, to have challenged the will of his late father, why he did not do so, and what would have been the outcome if he had, are matters on which the evidence is silent, and no assistance can be gained from speculation about the issue. Further, Ian’s decision not to pursue a claim against his father Ronald, on whatever grounds that decision was made, and indeed whether the failure to take such a step was undertaken deliberately with full knowledge of his rights to make a claim or not, should not be visited upon his daughter, Tania, as a matter relevant to her present claim.
Ian did not make a success of his life in any material sense. At the time of his marriage to Faye, Ian owned a residential property situated at Gairloch Drive, Frankston. After the marriage, the couple lived in this property. However, he drank heavily and they separated in October 1986, two weeks before the birth of Tania. Following this, Ian sold the Gairloch Drive property and moved to Maroochydore, Queensland where he worked with his father Ronald on his father’s farm growing hydroponic foodstuff, mainly macadamia nuts.
Ian applied a substantial amount of the proceeds he received from the sale of his Gairloch Drive property as capital to support his father’s farm business. This was after paying out a mortgage and paying a nominal amount to his wife Faye. Ian supplemented his capital contribution to the farm with a bank loan which he also applied to his father’s business.
Ian also contributed his labour to his father’s business. He established the farm and set up the hydroponics business; he tended to the growing of the plants, an activity which called for significant work and time; he worked and maintained the farm for the benefit of his father and the business; and he sold the produce by trucking it in a van to market where it was sold.
However, the farm business was not successful. This led to a falling out between Ian and his father. In 1987 Ian returned to Victoria. This was some one, or possibly up to two years, after he had first left to work and establish his father’s farm. I accept the uncontested evidence of Faye that if it had not been for the contribution of Ian, both by way of capital and his work on the farm, his father, Ronald Scarlett would not have been able to own and operate that farm for as many years as he did.
Ronald Scarlett continued to live on the farm until he died of liver cancer in or about 1992. Ian survived his father by three years. By his will, Ronald Scarlett left the bulk of his estate to Gregor and made no provision for Ian. Ian was deeply upset by this outcome.
Ian and Faye were divorced in August 1991. In the period leading up the his fatal accident he lived with his mother, the Deceased for the previous three months, and was intending to rent premises. He did not own a house. He became depressed and drank heavily.
Following the death of Ian when he was struck by a motor vehicle on 12 August 1995, Tania, and her brother each received $52,000 from the Transport Accident Commission following an investigation. I infer this money would have become available to Tania some time in 1996 when she was 10 years old. This money was likely to have been applied in whole or in part in supporting and educating Tania to this point in her life. An outstanding debt of $7,000 remains due from Tania to her mother, indicating that the compensation monies have been expended.
There is no evidence as to the assets of the Tania’s mother Faye. I can make no assumption as to whether or not Tania will gain anything of value from her estate in due course.
Conclusion
I am satisfied that the Tania had a strong relationship with the Deceased during the last four to five years of her life until her death in November 2009. However, it was not a dependent relationship. As such, I am of the view that a wise and just testator would not have been bound to make any provision for the immediate needs of a grandchild in Tania’s position.
Nevertheless, Tania, being 23 years of age at the time of the Deceased’s death did not have the resources to establish herself in life, and this remains the case. As such, Tania is in a position of clear need for some financial support, so that she can complete her education and have a fund to build upon and provide her with a measure of long term security to embark upon her adult life.
These needs on their own would not have taken the case out of the usual position of many young adult grandchildren sufficient to give rise to a responsibility in the grandparent to make some provision for the grandchild's future.
There are however in this case additional and special factors of significance which take it out of the ordinary.
I am of the view that a wise and just testator in the position of the grandmother would, looking at the family line constituted by Tania’s father, Ian, and Tania herself, and considering the early loss of her father who I infer at the time of his death was penniless, conclude that she had a responsibility in the particular circumstances to make some provision for the grandchild's future needs.
The responsibility arises after taking into account the following factors:
(a)Without some testamentary assistance, Tania, in this case will more than likely not be able to set herself up in life for herself. She has lost any possibility of financial support from her father;
(b)The fact that Tania’s father Ian, prior to his death, had given significant personal and financial support to his father Ronald Scarlett, the former husband of the Deceased, which included the contribution of his principal capital asset being the proceeds of sale of his former residential property and loan funds from a bank;
(c)The fact that, following the falling out between them, Ian did not inherit anything from his father, leading to the position that there was no possibility of the Tania inheriting anything of value from her father; and
(d)The fact that Ian’s brother, Gregor, had inherited the bulk of his father’s estate ought to have lessened the burden of any moral obligation imposed on a wise and just testator in the position of the Deceased to gift most of her estate to him.
In this context, according to prevailing community standards and as a matter of moral responsibility to her, the grandmother ought to have made some appropriate provision for Tania.
In reaching this conclusion, I have taken into account each of the matters which I have mentioned in these reasons and looked at them as a whole.
As to the quantum of the provision to be ordered, again I have taken into account each of the matters which I have mentioned in these reasons and looked at them as a whole. I have considered the provision for the proper maintenance and support of Tania, according to her present and future needs for capital, after taking into account the competing claims and rights of the existing beneficiaries under the Will, in the way that a wise testator might justly have done.
It was submitted on behalf of Tania that her need for capital totals $67,000 comprised of the following: repayment of a debt of $7,000 due to her mother; the purchase of a car - $10,000; tertiary fashion studies at TAFE for two to three years - $20,000; and costs of independent living, consisting of rental monies, furniture and the like - $30,000. Gregor did not take issue with these sums as constituting Tania’s capital needs.
In undertaking the assessment as to what is adequate provision for the proper maintenance and support of Tania I apply the Court’s own general knowledge and experience of current social conditions and measure the adequacy by reference to what is proper according to accepted community standards.
Taking these considerations into account, it is determined that a payment of $67,000 from the estate of the Deceased would be adequate provision for her proper maintenance and support.
In the exercise of the Court’s discretion I have also taken into account the structure of the Will and the legitimate interests of the other beneficiaries. The legacies of the other grandchildren beneficiaries should be preserved, namely the equal shares of the cash monies on hand at the time of the Deceased’s death bequeathed in favour of Gregor’s children Samantha Scarlett, Megan Kirk, Esther Smith and Earl Scarlett and Ian Scarlett’s son, Lucas Scarlett.
This is to be achieved by directing that the provision to be made in favour of Tania should be paid from the net proceeds of the sale of the Deceased’s Mt Eliza property which otherwise would have comprised the residual estate under her Will available for distribution exclusively to Gregor.
Accordingly, the following orders will be made:
1.There be provision made for the Plaintiff in the sum of $67,000 from the “Residual Estate” of the Deceased so described in the last Will of the Deceased dated 28 July 2005, so that the “Special Bequests” so described in the said Will made in favour of Samantha Scarlett, Megan Kirk, Esther S. Smith, Earl J Scarlett and Lucas Scarlett remain unaffected.
2.The costs of the proceeding be paid from the “Residual Estate” of the Deceased so described in the last Will of the Deceased dated 28 July 2005, so that the “Special Bequests” so described in the said Will made in favour of Samantha Scarlett, Megan Kirk, Esther S. Smith, Earl J Scarlett and Lucas Scarlett remain unaffected.
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