Schmidt v Watkins
[2002] VSC 273
•24 July 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6442 of 2000
IN THE MATTER OF PART IV OF THE ADMINISTRATION AND PROBATE ACT 1958 AND
IN THE MATTER OF THE WILL AND ESTATE OF MARY HANORA ANNE QUINN, DECEASED
| RICHARD SCHMIDT | Plaintiff |
| v | |
| CATHERINE MARGARET WATKINS AND IAN STEWART WATKINS (WHO ARE SUED AS THE EXECUTORS OF THE WILL OF MARY HANORA ANNE QUINN, DECEASED) | Defendants |
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JUDGE: | HARPER J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 11 AND 12 DECEMBER 2001 | |
DATE OF JUDGMENT: | 24 JULY 2002 | |
CASE MAY BE CITED AS: | SCHMIDT v WATKINS & ANOR | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 273 | |
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Testator's Family Maintenance – Application by alleged de facto partner of deceased – Nature of relationship between plaintiff and deceased – Whether plaintiff a person for whom the deceased had responsibility to make provision – Administration and Probate Act 1958 (as amended by the Wills Act 1997), s.91.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R. Phillips | Slater & Gordon |
| For the Defendants | Mr S. Newton | Ken Smith & Associates |
HIS HONOUR:
This is a claim under the testator's family maintenance provisions of the Administration and Probate Act 1958. It is made by a person (the plaintiff, Mr Richard Schmidt) who is not related to the deceased (Ms Mary Quinn). It is made pursuant to Part IV of the Act, as amended by the Wills Act 1997. The amendments took effect from 20 July 1998. Despite them, however, Part IV as in force immediately before that date continues to apply to the estate of persons who died before their commencement: see s.99AA of the Administration and Probate Act. If such a person left a will without making adequate provision for the proper maintenance and support of his or her spouse or children, the court might in its discretion order that such provision be made out of the deceased's estate. Like protection was given to the spouse or children of a person who died intestate, or partially so.
This, broadly, had been the position in the relevant jurisdictions since the enactment in New Zealand in 1906 of the Testator's Family Maintenance Act of that year. New Zealand was therefore the pioneer; and its example was subsequently followed in all Australian States and Territories. The emphasis until relatively recently was on the dependent members of the deceased's immediate family, although the definition of the latter term differed from time to time and place to place (so as, for example, to include - or, as the case may be, exclude – adopted, ex-nuptial and step children); and with the passing of the years it became clear that, although claimants continued to be restricted to members of the immediate family of the deceased, the court's power extended "far beyond providing for dependents who are destitute, and [allowed] the court to make substantial distributions of assets in order to effectuate the moral duty of a testator to provide for his dependents."[1]
[1]Hardingham, Neave and Ford Wills and Intestacy in Australia and New Zealand (1st ed. 1983) at 452
The Queensland Succession Act 1981 partially broke the mould. It included new provisions that employed the concept of dependency as the sole necessary basis for claims by persons who were under the age of 18 years. It might be argued that the Wills Act 1997 has further developed that concept. At all events, by contrast with the case of persons who died before 20 July 1998, the Victorian amendments give Victorian courts wider powers in respect of the estate of a person who died on or after that date. In such cases, the court may order that provision be made for the proper maintenance and support of any person for whom the deceased had responsibility to make provision; and this is so whether or not the deceased and the claimant were members of the same family. The power cannot be exercised, however, unless the aspiring beneficiary has either directly or through another person applied for the order[2], and unless the court is of the opinion that the distribution of the estate of the deceased person does not make adequate provision for the claimant's proper maintenance and support.[3]
[2]Section 91(2)
[3]Section 91(3)
Mary Quinn died on 5 November 1999. Her last will is dated 16 October that year. The plaintiff claims that he is a person for whom Ms Quinn had responsibility to make, through her will, adequate provision for his proper maintenance and support. This, he alleges, she failed to do. His claim is one of the first of its kind to fall for determination under the amendments to Part IV effected by the Wills Act 1997. It is therefore relevant to examine, if only briefly, the differences and similarities between the legislative regime which existed before (and which thus applied and applies to the estates of persons who died before 20 July 1998), and that which existed after, the amendments came into force.
Under the earlier regime, the purpose of testator’s family maintenance legislation was to remedy "breaches of a testator’s moral duty to make adequate provision for the proper maintenance of his family".[4] The approach of the courts in giving effect to that purpose is exemplified in the following passage from the judgment of Dixon CJ in Pontifical Society for the Propagation of the Faith v Scales[5]:
"It has often been pointed out that very important words in the statute are 'adequate provision for the proper maintenance and support' and that each of these words must be given its value. 'Adequate' and 'proper' in particular must be considered as words which must always be relative. The 'proper' maintenance and support of a son claiming a statutory provision must be relative to his age, sex, condition and mode of life and situation generally. What is 'adequate' must be relative not only to his needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and the other demands upon it, and also what the testator regarded as superior claims or preferable dispositions. The words 'proper maintenance and support', although they must be treated as elastic, cannot be pressed beyond their fair meaning. The court is given not only a discretion as to the nature and amount of the provision it directs but, what is even more important, a discretion as to making a provision at all. All authorities agree that it was never meant that the court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the court."
[4]Blore v Lang (1960) 104 CLR 124 at 135 per Fullagar and Menzies JJ.
[5](1962) 107 CLR 9 at 19
It is clear that, in deciding whether or not to grant an application for relief under the pre-Wills Act 1997 testator's family maintenance legislation, the court is required to carry out a two-stage process.[6] First, it must decide whether the applicant has been left without adequate provision for his or her proper maintenance and support. This first stage has been described as the "jurisdictional question".[7] If, but only if, the deceased has failed in his or her duty to make such provision, does the court have power, in the exercise of its discretion, to make an order granting to the applicant such provision out of the estate as would have been made by a wise and just, rather than a fond and foolish, testator.[8]
[6]Singer v Berghouse (1994) 181 CLR 201 at 208-209 per Mason CJ and Deane and McHugh JJ.
[7]See, e.g., Singer v Berghouse (1994) 181 CLR 201 at 208-209; White v Barron (1980) 144 CLR 431 at 456.
[8]Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 478 (PC).
According to strict theory, the two stages of the process were (and are) markedly different. Thus, in their joint judgment in Singer’s case, Mason CJ and Deane and McHugh JJ state that "the correct view is that the [jurisdictional] question is strictly one of fact, notwithstanding that it involves the exercise of value judgments"[9]. At the second stage, by contrast, the decision "does involve the exercise of discretion in the accepted sense"[10]. At the same time, the court must during both stages use the same point of reference: "what a wise and just testator would have thought his or her moral duty".[11] This is the touchstone (and therefore supplies the norm) "that the legislature left unexpressed".[12] In his judgment in Grey v. Harrison, with which Tadgell and Charles JJA agreed, Callaway JA continued:
"It is the way in which the courts, for almost the whole of this century, have construed the legislation. As Ormiston J explained in Collicoat v McMillan[13], it is in large measure epexegetical of the word 'proper' in the phrase 'proper maintenance and support'. It also reflects the view that there is no legislative justification to abridge freedom of testation unless the testator has breached a moral duty, or alternatively that there is no judicial reason to exercise the statutory discretion except for the purpose of remedying such a breach."
[9](1994) 181 CLR 201 at 210
[10]Ibid, at 211
[11]Grey v Harrison [1997] VR 359 at 365, per Callaway JA.
[12]Ibid
[13][1999] 3 VR 803
It seems clear that, as a result of the amendments effected to the Administration and Probate Act 1958 by the Wills Act 1997, the two-stage process now has a third; one that must be traversed if the deceased died on or after 20 July 1998. The court must in those cases, and as its initial focus of inquiry, decide whether or not the claimant falls within that class of person for whom the deceased had responsibility to make adequate provision for his or her proper maintenance and support[14]. Since the court has no jurisdiction to make an order in favour of a person for whom the deceased did not have this responsibility, the court's initial focus also falls within what is for these purposes the definition of a "jurisdictional question". It nevertheless seems to me that the touchstone remains that of the wise and just testator; and the court must respect freedom of testation except in those cases where that freedom has been abused by a failure by the deceased to fulfil his or her responsibility to such a claimant.
[14]Administration and Probate Act 1958, s.91(1)
Clearly enough, the deficiency which the amendments were designed to remove was a lacuna in the extent of the legislation's previous reach. According to modern notions of what is right, some may properly look to others for maintenance and support even though there is no tie of blood or marriage between them. While, therefore, all citizens have a moral duty to make adequate provision out of their estate for such of their surviving spouse or children who would otherwise be left without proper maintenance and support, that moral duty is not necessarily restricted to those family members. Others (including those who were not related) may fall within its reach. Until the passage of the Wills Act 1997, Victorians in such a position could not look for assistance to the legislative provisions dealing with testator's family maintenance. On the other hand, one’s moral duty is by definition a limited duty. Accordingly, the remedy was not a wholesale enlargement of the field of prospective claimants. Nor was it left to the courts in the exercise of an unprincipled discretion to decide whether a particular claimant was or was not a person for whom the deceased had the requisite responsibility. Rather, the remedy was the inclusion into the class of those claimants of persons who, although not numbered among the deceased's immediate family, nevertheless had "a moral claim to the deceased's estate".[15]
[15]Second Reading Speech by the Attorney-General (Hon Jan Wade) on the Wills Bill, Legislative Assembly, 9 October 1997, Hansard at 436; see also the Second Reading Speech on the same Bill by the Minister for Small Business (Hon Louise Asher), Legislative Council, 12 November 1997, Hansard at 449.
In my opinion, the propositions set out in paragraphs [8] and [9] above find support both in the second reading speech of the Ministers who had responsibility for the passage of the Wills Bill 1997 through the Victorian Parliament (the speech read by each Minister was the same as that read by the other) and in the amending legislation itself. Given its influence on my judgment in this case, and given the place occupied by this proceeding in the history of testator's family maintenance litigation, the relevant passage from the Ministers’ Second Reading Speech should I think be quoted in full:
"At present, Part IV of the Administration and Probate Act 1958 enables a testator's family maintenance application to be made to the County Court or Supreme Court by a deceased's widow, widower or children requesting the court to make provision out of the estate of the deceased for the proper maintenance and support of the applicant.
These provisions are quite restricted, excluding the ability of other persons who may have a moral claim on the deceased's estate from making a claim. The need for amendments to the Act to enable a wider category of persons to make testator's family maintenance applications has been recognised for a while. The Labor Government introduced two bills to address this situation but neither bill proceeded as a result of concerns that the amendments proposed would result in unfair outcomes for certain parties.
This bill introduces amendments to the Act to enable a wider group of people to apply to the court for testator's family maintenance. The bill empowers the court to make an order for provision out of the estate of a deceased person for the maintenance and support of a person for whom the deceased had responsibility to make provision. The bill does not include a list of eligible applicants for testator's family maintenance, instead leaving it to the court to determine on a case-by-case basis whether provision should be made for a particular applicant, which is a more equitable method of dealing with testator's family maintenance applications. To ensure that only genuine applications are made, the bill allows the court to order costs against an applicant if the court is satisfied that the application was made frivolously, vexatiously or with no reasonable prospect of success.
The bill requires the court, in determining whether or not provision should be made for a particular applicant, to have regard to a list of factors, including: 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; any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate; the size and nature of the estate of the deceased person; 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 in the foreseeable future; and any benefits previously given by the deceased to any applicant or any beneficiary."[16]
[16]Hansard (Assembly) at 436; Hansard (Council) at 449-450
The guidance given by the Second Reading Speech is of course limited, especially as the Ministers focus attention on the provisions which result in the court determining on a case-by-case basis whether provision should be made for a particular applicant. Nevertheless, it is instructive that not only do the Ministers speak of "a moral claim", but their "list of factors" is mirrored by s.91(4) of the Administration and Probate Act, as amended by the Wills Act. This sub-section provides, in effect, that in deciding each stage of what is now the three-stage process, the court must have regard to a set of factors common to all three. Section 91(4) provides, in other words, that in determining the questions (a) whether or not the deceased had the relevant responsibility (this, of course, being the first stage); (b) whether or not the distribution of his or her estate made that provision to which the legislation is directed (the second stage); and (c) the amount of provision (if any) which should be ordered (the third stage), the court must have regard to the factors listed in the sub-section, beginning at paragraph (e). The substance of those paragraphs, so far as they relate to the present case, is set out below:
(e)any family or other relationship between the deceased and the applicant, including the nature of the relationship and, where relevant, its length;
(f)any obligations or responsibilities of the deceased to the applicant, any other applicant and the beneficiaries of the estate;
(g)the size and nature of the estate and any charges and liabilities to which it 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 to any applicant or to any beneficiary;
(m)whether the applicant was being maintained by the deceased before her 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.
When the above list is read in the light of the Second Reading Speech, it is in my opinion clear that the amendments effected by the Wills Act were seen by Parliament as part of a continuum rather than as a complete break from the past. By referring to the unamended provisions of Part IV as "quite restrictive" and as "excluding the ability of other persons who may have a moral claim on the deceased’s estate from making a claim", the Ministers indicated that they saw the amendments not as creating a new class of claimant but merely as expanding the boundaries of the old. Both before and after the amendments, the courts were and are required to ask whether, in the particular circumstances of the individual case, the deceased has abused the freedom of testamentary disposition and so has breached his or her moral duty to the claimant. In answering that question, the courts must have regard to the list to be found in s.91(4). That list is entirely consistent with those considerations which, in dealing with applications under the legislation before the 1998 amendments came into operation, the courts customarily took into account.
The principal issue raised by this application is, of course, whether Mr Schmidt is indeed a person for whom the deceased had responsibility to make provision out of her estate. Given that that is so, it is particularly important to recall warnings of the kind which Sir Frank Kitto gave in his introduction to the first edition of Meagher, Gummow and Lehane "Equity Doctrines and Remedies" - namely, that "An understanding of the conceptual foundations of established principles, and that alone, provides a permissible foundation for further advance."[17]
[17]Introduction to the first edition (1975) of Meagher, Gummow & Lehane Equity Doctrines & Remedies at vii.
For that surely is the keystone to the legislative arch which was erected on 20 July 1998. The matters to which, by s.91(4) of the Act, the court must have regard, are redolent of the approach taken by the courts over the decades since the first disappointed relative invoked the legislation when seeking enforcement of the deceased's duty to him or her as a member of the deceased's immediate family. Then and now it was and is to the deceased's duty that the courts were and are bound to direct their attention. Then and now, the courts were and are constrained against making an order unless the distribution of the estate of the deceased person, as effected by (a) his or her will (if any) or (b) the law as to intestacy, or (c) both the will and that law, failed to make adequate provision for the proper maintenance and support of the applicant - he or she being a person within the class of persons which from time to time the law recognised as comprising those for whom the deceased had responsibility to make provision. Then and now, trial judges were and are bound by the principles to which Callaway JA gave expression in the following passage from his Honour’s judgment in Grey v Harrison[18] (delivered, I note in passing, exactly a week after the Second Reading Speech in the Legislative Council by the Minister for Small Business):
[I]t is one of the freedoms that shape our society, and an important human right, that a person should be free to dispose of his or her property as he or she thinks fit. Rights and freedoms must of course be exercised and enjoyed conformably with the rights and freedoms of others, but there is no equity, as it were, to interfere with a testator's dispositions unless he or she has abused that right. To do so is to assume a power to take property from the intended object of the testator's bounty and give it to someone else. In conferring a discretion in the wide terms found in s.91, the legislature intended it to be exercised in a principled way. A breach of moral duty is the justification for curial intervention and simultaneously limits its legitimate extent."
[18][1997] 2 VR 359 at 366
It follows, I think, that testators have "responsibility", within the meaning of that expression in s.91, towards all those to whom they owe a duty of the relevant kind. Those potential claimants who, before the amendments effected by the Wills Act 1997, fell within that class, remain within it. Some outside it then have since been included. I must decide whether the plaintiff is one of them.
The question is strictly one of fact, notwithstanding that it involves the exercise of value judgments. All the more reason for ensuring, in the interests of transparency, that I articulate the values by which my decision-making process has been informed, while carefully refraining from any suggestion that in doing so I am attempting to prescribe anything in the nature of a code. Each case in this field must be judged on its own facts; and it is not within the province of a trial judge to do more than explain the reasoning behind his or her decision.
I begin with the trite statement that this is a civil case. Each element of the plaintiff's claim must therefore be proved on the balance of probabilities. The first such element is whether the plaintiff is a person for whom Mary Quinn had responsibility to make adequate provision in her will for his proper maintenance and support. The plaintiff claims that he is. He will succeed on this issue if I am satisfied on the balance of probabilities that the allegation is true – or, in other words, that it is made out to my "reasonable satisfaction": see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362, per Dixon J. "But" (as his Honour continued):
"reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherit unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters 'reasonable satisfaction' should not be produced by inexact proofs, indefinite testimony or indirect inferences."
Briginshaw v Briginshaw was a matrimonial cause. The petitioner (appellant) alleged that his wife had committed adultery. Dixon J said, at 368-369:
"Upon an issue of adultery in a matrimonial cause the importance and gravity of the question makes it impossible to be reasonably satisfied of the truth of the allegation without the exercise of caution and unless the proofs survive a careful scrutiny and appear precise and not loose and inexact. Further, circumstantial evidence cannot satisfy a sound judgment of a state of facts if it is susceptible of some other not improbable explanation. But if the proofs adduced, when subjected to these tests, satisfy the tribunal of fact that the adultery alleged was committed, it should so find."
The courts have often pointed to the difficulty of assessing evidence concerning a person who is dead. An example may be found in the judgment of Dixon CJ in Pontifical Society for the Propagation of the Faith v Scales[19]. His Honour referred to the principle that the provision which a 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. The Chief Justice continued:
"The difficulty is that the court itself can never be certain that it knows all the circumstances. More often than not, one may be sure that the court knows few of them. Experience of forensic contests should confirm the truth of the common saying that one story is good until another is told, but a testator is dead and cannot tell his."
[19](1962) 107 CLR 9 at 20
Further reference to relevant authorities may be found in the judgment of Fullagar J in Thwaites v Ryan[20]:
"It is obvious … that a substantial burden is shouldered by a plaintiff who seeks to establish, after the death of the other party, an oral contract which is said to have been made between the plaintiff and the other party in the absence of any other persons, and by which it is said that the now deceased party agreed to leave valuable property by will to the plaintiff or to transfer property to the plaintiff and others. In the first place, it is impossible in such a case to hear what the other party to the alleged conversation has to say either as to its existence or its terms. Secondly, it is possible for the plaintiff … with or without dishonesty to give of events occurring many years ago a reconstruction which accords with later events but which the other party is in no position to deny or correct. It is obvious that, in all such cases, the evidence must be very carefully examined, not only from the point of view of arriving at some conclusion as to its honesty and reliability and probability, but also from the point of view of arriving at its proper construction and significance.
In Plunkett v Bull (1915) 19 CLR 544, the High Court drew attention to the dangers inherent in accepting accounts by witnesses other than the plaintiff of alleged declarations against interest by a now deceased person, and in that case Griffith CJ at 547, said that the trial judge 'ought not to have allowed his mind to be influenced by what was, at best, a casual observation made to a person having no interest in the matter, and having no reason to remember the exact words used'. In Birmingham v Renfrew (1937) 57 CLR 666, a case of alleged agreement to make mutual wills, the court stressed the necessity for clear and convincing evidence not merely to show that an agreement was made and what were its terms, but also to show that (if made) it was made with intent to enter legal relations. Dixon J at 681-682 said: 'Such an agreement can be established only by clear and satisfactory evidence. It is obvious that there was a great need for caution in accepting proofs advanced in support of an agreement affecting and possibly defeating testamentary dispositions of valuable property'."
[20][1984] VR 65 at 78-79
In the present case, Mr Schmidt alleges a breach by the deceased of her duty to him. In Grey v Harrison, the Court of Appeal (Tadgell and Charles JJA concurring with the judgment of Callaway JA) equated such a breach with an abuse by the deceased of her right to freedom of testamentary disposition. This being "one of the freedoms that shape our society, and an important human right" an allegation of its abuse is a serious allegation. I must bear this in mind when considering whether or not I am reasonably satisfied that it has been made out. There is, accordingly (to repeat the words of Dixon J in Birmingham v Renfrew) "a great need for caution in accepting proofs" put forward by Mr Schmidt to establish the existence of the duty he alleges. That duty, he claims, arose because Mary Quinn was his de facto spouse, and because he was very generous towards her. She cannot be heard in reply. She cannot defend her testamentary judgment. The "great need for caution" will therefore extend to the examination of his evidence on these matters, especially to the extent that it is not corroborated.
It is clear that the plaintiff does not have to show that the deceased was bound by a trust of the kinds discussed in, for example, Thwaites v Ryan[21]. The beneficiaries under such trusts do not require further protection from the legislature. Others, who on no view are beneficiaries under a trust, may nevertheless fall squarely within the class of persons for whom a deceased had the relevant responsibility. It is equally clear that a duty to provide in one's will for the proper maintenance and support of a person does not arise unless the relationship between the deceased and the claimant has within it a particular quality. A mere business relationship would not of itself be enough. Nor would one which did not go beyond that of debtor and creditor. Even one founded upon, or which resulted in, acts of kindness or consideration that went well beyond the ordinary, might not do so. Generally speaking, however, a "domestic [relationship] where there is mutual commitment to an intimate personal relationship and shared life as a couple, irrespective of the gender of each partner"[22] would be sufficient to bring either one of those partners within the class of persons to whom the other had responsibility (although, of course, in the particular case that responsibility might not arise or might already have been discharged).
[21][1984] VR 65, esp at 88-95
[22]Statute Law Amendment Relationships Act 2001, s.1(2)
In the context of this case (as will be seen when the facts are examined) it is relevant to observe that friends, neighbours and even mere acquaintances not infrequently provide to another assistance of an extraordinarily generous kind over an extraordinarily long period; but neither they, nor the recipients of their generosity, nor the community, would necessarily or even ordinarily conclude that as a result the recipients had a responsibility to make adequate provision in their wills for the proper maintenance and support of their benefactors.
To state this conclusion is to draw attention to the object of the legislation. It is not to ensure that generosity is adequately rewarded or reciprocated. That, generally speaking at least, is a private matter. It is something for the individual conscience, not for the necessarily blunt instrument of the law. Rather, the object of the legislation is to ensure so far as the law can do it that those who have a duty not so much to reward but rather to provide maintenance and support do so by appropriate testamentary disposition. And the question: "Should I reward my benefactor?" is very different from the question: "Do I have a duty to X to make provision for his or her proper maintenance and support?" Different questions demand different approaches as one seeks to formulate the correct (or, rather, a proper) answer.
In saying this, I acknowledge my obligation to have regard to "any contribution (not for adequate consideration) of the applicant to building up the estate or to the welfare of the deceased".[23] Such contribution may perhaps give rise to a duty to make adequate provision for the proper maintenance and support of the benefactor/applicant. But generally it will not do so of itself. Generally, it will be a factor in the creation of such a duty, or will enlarge a duty already in existence; as when a spouse or child of the deceased contributed to the deceased's wealth by working at less than award rates in the family business. And very often, of course, an applicant will rely not on his or her contribution to the estate of the deceased, but on the opposite: that is, the applicant will rely on the fact that he or she was always or has become dependent upon the deceased's continuing provision of maintenance and support. Such dependency may well arise when a testator is in loco parentis to a child who is not a relative, or where a claimant – although unmarried – was in a domestic relationship in which there was a mutual commitment to an intimate personal relationship and a shared life as a couple. One may suppose that it is dependency of the former kind, or a dependency or inter-dependency of the latter, to which the amendments effected by the Wills Act 1997 were primarily directed.
[23]Administration and Probate Act 1958, s.91(4)(k)
It is against these considerations that I propose to examine the evidence called on behalf of the parties to this proceeding: by the plaintiff in support of, and by the defendants in opposition to, the plaintiff's claim that he and Ms Quinn lived as man and wife for 10 years, and that during this period he supported her financially and, in the last months of her life, nursed and nurtured her. It is on these twin pillars that the plaintiff seeks to erect the duty upon which he relies, and the existence of which he (the burden resting on him to prove his case on the balance of probabilities) must establish. In the words of the plaintiff's written outline of his opening address in the trial:
"The plaintiff's claim is primarily based on:
(a)the length and nature of his personal relationship with the deceased;
(b)the substantial financial contribution that the plaintiff made to the deceased through [their] business, which not only assisted the business but also materially assisted the deceased in her personal life, particularly in regard to her house."
Richard Schmidt and Mary Quinn were business partners, although it seems that no partnership agreement was ever drawn, let alone signed or otherwise executed. They had earlier become acquainted through Mr Schmidt's brother Ralph. She had graduated in law in either 1978 or 1983 (the evidence is conflicting on the point, but for present purposes nothing turns on the difference) and, following her admission, conducted a conveyancing practice first in Toorak or Prahran (again, the evidence differs, but the difference is immaterial) and then from her home at 55 Mast Gully Road, Upwey.
Meanwhile, Mr Schmidt practised as an estate agent. He was born on 2 September 1929, and is therefore now almost 73 years of age. When his wife died on 14 August 1987, he and Ms Quinn discussed the possibility of opening a real estate business in the Dandenongs with a local agent named Patrick Mulligan. The discussions bore fruit. In December 1987, Mr Schmidt and Ms Quinn registered the business name "Mary Patrick Real Estate" and commenced operating from rented premises in Tecoma "with Mary doing the conveyancing work".[24] Within a few months, however, Mr Mulligan had departed and the Tecoma premises were required by their owner for renovation. The business moved to 55 Mast Gully Road. It was, according to Mr Schmidt, not only "operated" by the two of them, but Ms Quinn "then became interested in the real estate aspect of the business."[25] Doubtless the incorporation of her first given name into the name of the business was a reflection of this.
[24]Affidavit of Richard Schmidt sworn 31 October 2000, at para.40
[25]Ibid
Mr Schmidt asserts that his relationship with Ms Quinn became "intimate" during the period in which the business operated from Tecoma. After the move to Upwey, he "began to spend more and more nights at Mary's house."[26] He "moved in on a permanent basis in 1989".[27]
[26]Affidavit sworn 31 October 2000, at para.41
[27]Ibid
Mr. Schmidt would have it that a de facto relationship was established at that time, and that it continued until Ms Quinn's death. Taken as a whole, the evidence does not support this assertion. There is no doubt that the plaintiff lived at 55 Mast Gully Road until shortly after Ms Quinn died. She lived there until her death. But they maintained separate bedrooms throughout. He explains this on the basis that their sleeping patterns were "so different" and she "did not want to be perceived as a 'loose' woman".[28] Yet she had no such diffidence while living in two de facto relationships before 1989. It is, moreover, unlikely that she would have attempted to deceive the defendants on this subject since she was, as Mr Schmidt accepts, a close friend of both.[29] Yet if the defendants are to be believed (and I accept their evidence on this point) the deceased consistently held out the plaintiff not "as family" but as no more than her business partner.[30] By contrast, on the uncontested evidence the deceased regarded herself as the foster mother of Mrs Watkins, although there is no evidence of whatever legal foundation there may be for this.
[28]Affidavit sworn 31 October 2000 at para.41
[29]Affidavit sworn 31 October 2000 at para.67
[30]Affidavit of Catherine Watkins sworn 11 December 2000 at paras.3 and 4; affidavit of Ian Watkins also sworn 11 December 2000 at paras.1 and 2
Mr Schmidt himself throws doubt upon the validity of the two reasons which he puts forward as the basis of the deceased's desire to have her own bedroom. If, as he asserts, their sleeping patterns were "so different", they nevertheless "became known amongst our friends for still being [in] our dressing gowns at 9.00 a.m." (on, one must infer, working days as well as weekends).[31] And her desire to avoid being known as a "loose" woman appears to have been thwarted because "it was quite apparent to the outside world that the deceased and I were living together."[32]
[31]Affidavit sworn 31 October 2000 at para.42
[32]Affidavit of Richard Schmidt sworn 30 March 2001 at para.2(a)
If it was, very few of its members have come forward to say so. Indeed, the outside world is represented only by one friend (Mr Les Fyffe), one hotel manager (Mr Derek Blackley) and one barman (Mr Ian Finnigan). Each swore an affidavit in support of the application. None gave oral evidence. Mr. Fyffe, who described himself as a close friend of the plaintiff and a very close friend of Ms Quinn (he knew her for over 20 years) deposed to his belief "that the only reason that the deceased and the plaintiff did not marry was because the deceased knew that she was ill and that she did not think it was 'fair' to marry the plaintiff under those circumstances."[33] He does not explicitly state the basis for this belief; but it seems that he came to it, in part at least, because the relationship between the plaintiff and the deceased "appeared to me to be a long term, loving relationship" and because on one occasion Ms Quinn told Mr Fyffe that "she had asked the plaintiff to move out" after an argument, but had then realised "that she could not manage living alone and that she wanted the plaintiff to move back in with her".[34]
[33]Affidavit of Les Fyffe sworn 25 July 2001, para.7
[34]Ibid, at paras.6 and 7
Of the other two deponents upon whom the plaintiff relied on this point, Mr Blackley swore that the plaintiff and the deceased came to his hotel, the Taverner's Royal Hotel in Ferntree Gully, at least once a week from 1997. Based upon his observations, it was apparent to him "that the plaintiff and the deceased had a close and loving relationship and that they were very much 'a couple' … very much more than 'only friends'."[35] According to Mr Finnigan, the plaintiff and the deceased visited the hotel "on a weekly basis" and he formed the view that they "had a close and warm relationship and were more than casual acquaintances or merely friends."[36]
[35]Affidavit of Derek Blackley sworn 7 September 2001 at para.5
[36]Affidavit of Ian Finnigan sworn 7 September 2001 at paras.3 and 4
A number of affidavits in opposition were filed by the defendants. In one of these, Ms Gerda Klaver states that she became acquainted with the deceased in 1997, and thereafter they remained very close friends until Ms Quinn died. They confided in each other, particularly about personal relationships. Yet (according to Ms Klaver) the deceased "never mentioned any involvement with the plaintiff" except to say that since he came to live at 55 Mast Gully Road she had put a lock on her bedroom door and "that she needed the plaintiff for the business as he had the real estate licence and she was his sub-agent."[37] The fact that Ms Quinn's door had a lock is corroborated by the plaintiff himself; he said in cross-examination that he repaired it on four or five occasions, because it "never worked".
[37]Affidavit of Gerda Klaver sworn 24 March 2001 at para.3
Another affidavit filed on behalf of the defendants was sworn by Mrs Geraldine Kennedy. She was related by marriage to Ms Quinn. According to her, the two "got on with each other very well."[38] They discussed things "which were happening to [them] in [their] lives" but Ms Quinn never said "that she was having an intimate relationship with the plaintiff."[39] To like effect is an affidavit sworn by Ms Teresa Giancola. She too described herself as a close friend of the deceased, a statement that is corroborated by the fact that she is named in Ms Quinn's will as the executrix of the estate should the defendants pre-decease the testator. That friendship covered "more than 30 years" as a result of which Ms Quinn was invited by Ms Giancola "to attend various family functions" with, on most occasions, a suggestion that the deceased bring the plaintiff with her. On a number of occasions, however, Ms Quinn put the suggestion aside with the statement that Mr Schmidt was not part of her personal life. Nothing was ever said by Ms Quinn "that indicated that she had an intimate relationship with the [plaintiff]."[40]
[38]Affidavit of Geraldine Kennedy sworn 24 March 2001 at para.3
[39]Ibid
[40]Affidavit of Teresa Giancola sworn 25 March 2001 at paras.2 and 3
A former employee of Ms Quinn, Ms Leah Frances, also swore an affidavit in the present proceeding. She knew the deceased as a friend for five years before becoming her conveyancing secretary from February 1994 until Ms Quinn's death. She was a witness to her last will. According to Ms Frances, Ms Quinn and Mr Schmidt together operated the business known as "Mary Patrick Real Estate" until, towards the end of her life, Ms Quinn commenced her own real estate business under the name "Mary Quinn Real Estate".
For a period of four months in 1994, Ms Frances and her daughter lived at 55 Mast Gully Road, Upwey. Ms Frances was then able to observe the conduct of Ms Quinn and Mr Schmidt towards each other "and observe something of their domestic arrangements."[41] The affidavit continued:
"From all appearances the plaintiff and the deceased lived quite separate lives. For example, the plaintiff did his own shopping, cooked his own meals and did his own laundry … Moreover, the deceased said to me on several occasions that her relationship with the plaintiff was a business relationship and nothing more … I myself saw nothing in their conduct or conversation with each other which suggested to me that they had an intimate relationship."[42]
[41]Affidavit of Leah Frances sworn 4 April 2001 at para.6
[42]Ibid, paras.6 and 7
Other evidence supports the thrust of that put forward by Ms Frances. The plaintiff himself acknowledges that he and Ms Quinn "generally spent our own money on [personal] expenses".[43] He says nothing to suggest that Ms Quinn cooked for him. Nor does he suggest that she did his washing. If she did then, in an unusual move for a couple living in a state of mutual dependence (or, in other words, as man and wife) on 1 August 1995 a residential tenancy agreement was entered into between Ms Quinn as landlord and Mr Schmidt as tenant. The demised premises were "the downstairs stone walled rooms and bathroom at 55 Mast Gully Road, Upwey … together with access to the upstairs kitchen and laundry facilities and garage." The term was for three years ending on 30 July 1998. The lease specified that the premises were to be used for residential and office purposes.
[43]Affidavit sworn 31 October 2000 at para.46
In cross-examination, Mr Schmidt asserted that the:
"… tenancy agreement [was] for a very special purpose … to prove to the Real Estate Agents Board that I was in control of the room that I ran the business from … Being a licensed estate agent, I could not be under the obligation of any sub-agent or anybody who could have influence over me … Mary was not an estate agent herself. She was acting as a solicitor and as a sub-agent."
If this explanation were correct, one would expect the agreement to be for a retail or office tenancy only; and even if it included access to a kitchen, one would not expect it to also include access to laundry facilities.
Whatever the state of the relationship in 1995, the plaintiff in February that year applied to Centrelink (being the relevant Commonwealth authority) for a single person's pension. In so doing, he described himself on a number of occasions, and in his own handwriting, as being a widower with no partner. The residential address given by him was not 55 Mast Gully Road, but Flat 4, No. 2 Overend Close, Moorabbin, at which address he had (according to the information given by him to the Centrelink Office in Moorabbin) lived for eight months.
The application for a pension was successful. Although it was assessed on 10 March 1995, it nonetheless became effective as of 9 February that year. It was based upon documentation completed at least in part by the plaintiff, and signed by him opposite the note: "There are penalties for deliberately giving false or misleading information." Yet if the plaintiff did tell the truth when he submitted his application for a pension, he did not tell the truth at the trial. For he insisted in his oral evidence that he and Ms Quinn had remained in co-habitation as man and wife throughout the period from 1989 until her death 10 years later.
The conclusion that no de facto relationship existed between Mr Schmidt and Ms Quinn receives support from two relatives of the deceased. The first of these is Anthony Kennedy, who was a first cousin. The second is Mr Kennedy's wife, Geraldine Kennedy. Each on 24 March 2001 swore an affidavit in this proceeding. Each subsequently gave oral evidence. Each swore that they visited the deceased at the Austin Hospital shortly before she died. Each affidavit gives the date as Wednesday 27 October, although Mr Kennedy refers to what is obviously the correct year (1999) and Mrs Kennedy to what is equally obviously that which is incorrect: the year 2000. This difference in the affidavit material was not explored in oral evidence, and I do not suggest that it should have been. I cannot but remark, however, that the error was of a kind which, despite its obviousness, appeared throughout the affidavit material prepared on both sides for this case.[44]
[44]Other examples may be found in the affidavit of Richard Schmidt sworn 31 October 2000 at para.46 of Teresa Giancola sworn 25 March 2001 at para.3; and of Derek Blackley sworn 7 September 2001 at para.5.
According to Mr and Mrs Kennedy, the plaintiff arrived at Ms Quinn's bedside while they were still present. He left at about the same time as they, and in the hospital corridor the three paused to speak. Mr Kennedy gives the following account of what happened next. Mrs Kennedy corroborates that account:
"The plaintiff spoke generally about the history of the deceased's illness. He then said 'I don't want you to think that Mary and I have been living together in an intimate relationship. Certainly not. We were only ever business partners. Now she has her own business – Mary Quinn Real Estate'."[45]
[45]Affidavit of Anthony Kennedy sworn 24 March 2001 at para.8
Despite the plaintiff's denial that he said anything of the sort, I accept the truth of this account. Both Mr and Mrs Kennedy gave oral evidence at the trial. Both were cross-examined. They were not shaken in their evidence, and were in my opinion impressive witnesses. They are, moreover independent: they have no interest in the outcome of this proceeding. It is true that they were vague about the context in which the statement was made, but that is not surprising. Nor is it surprising that they did not question Mr Schmidt about his relationship with Ms Quinn.
Apart from the evidence of Mr Fyffe, perhaps the strongest point in favour of the plaintiff on this issue is to be found in a document prepared by the second defendant (Mr Ian Watkins) when arranging for Ms Quinn's funeral. In that document there is listed a number of "contacts", including (as I understand it) the names of all those who might have been expected to participate in the service itself. John Schmidt and Ralph Schmidt, the plaintiff's brothers, are separately described - under the heading "relationship" - as "friend"; the plaintiff himself, on the other hand, is described as "step family" – as is the plaintiff's daughter Pamela and his granddaughter (Pamela's daughter) Morwen (as the name is spelt in the document). This seems to me to be a clear indication that the defendants characterised the relevant relationship as more than simply one of friendship.
In this context, the plaintiff also relies upon the fact that he was occasionally entrusted with the care of the defendants' children. They, like Morwyn (as the plaintiff spells her name) were regarded by the deceased as her foster grandchildren. It is submitted that the proper inference is, accordingly, that the plaintiff was not only far more than merely a business partner of the deceased, but indeed lived with him as his wife. Reliance is also placed upon the undoubted fact that Ms Quinn was very fond of Morwyn. Again, I am asked to infer that such affection would not have arisen unless the relationship between Mr Schmidt and Ms Quinn was as the plaintiff described it.
I am not prepared to draw either inference, although I do conclude that the plaintiff was more than a mere friend of the deceased. This is hardly surprising. They lived under the same roof for a lengthy period, and were also business associates on friendly terms. I accept, too, that they frequently dined together at the Taverner's Royal Hotel in Ferntree Gully. They also had a mutual interest in Morwyn, to whom the deceased seems to have become a surrogate grandmother.
There is a deal of support for the proposition that the deceased regarded Morwyn as a member of her "family". In providing in her will for a gift of $25,000 to Morwyn, the deceased included a request that "my trustees take a personal interest in Morwyn and … advise Morwyn's mother Pamela Schmidt as to Morwyn's schooling and welfare". Moreover, in a document (Exhibit "RS-6" to the plaintiff's affidavit of 31 October 2000) in which Ms Quinn gave the defendants instructions to be carried out after her death, she said:
"I have a photo album for Morwyn, please take photos each year and add to it but keep it safe until Morwyn is 25 … Remind Morwyn regularly that her Nan loved and loves her!"
Mr Watkins was cross-examined about the document prepared by him for the funeral. As counsel for the plaintiff subsequently submitted, his answers were not altogether satisfactory. He did, however, say that the plaintiff's relationship with Ms Quinn "was somewhere different from just being a friend, because of the relationship between Morwyn and Pam". This is consistent with my own view. The probability is that the deceased regarded Morwyn as a de facto grandchild. And if Morwyn was "family", so in a sense was her grandfather. In my opinion this, more than Ms Quinn's direct relationship with the plaintiff, explains Mr Watkins' document.
In combination, the factors referred to above could not but result in that special relationship which comes with a wealth of shared experience. It is thus almost inevitable that the plaintiff and the deceased became more than mere friends; but that does not make them the equivalent of man and wife – and it does not necessarily evidence a relationship which has given rise to the duty upon which the plaintiff relies. It is a duty, be it remembered, allegedly placed upon Ms Quinn, to make adequate provision in her will for Mr Schmidt's proper maintenance and support.
For all the reasons set out above, I find that there was no relationship of man and wife between Mr Schmidt and Ms Quinn. I also find that whatever relationship did exist between them was not such as to create in the deceased the relevant duty.
I have come to this conclusion after accepting that the plaintiff assisted the deceased to fulfil her duties as vice president, and then president, of the Outer Eastern Branch of the Real Estate Institute of Victoria. I also accept that, for about six months before her death, the plaintiff prepared all the deceased's meals, nursed her (including assisting with her toileting), changed her bed and did the washing. He also took her on outings.
I further accept that, between May 1988 and August 1997, the plaintiff directed to Ms Quinn large sums of money from the business they conducted under the name "Mary Patrick Real Estate". But it was, on the plaintiff's own case, their business, not his. Ms Quinn contributed to the generation of its income. As I understand his evidence, the plaintiff accepts that the deceased acted both as solicitor for the business and also in some capacity which was directly related to that of an estate agent. He also accepts that she was entitled to a share of the profits. Each party contributed to those profits, although the relationship between contributions made and profits received is unclear.
In this context, Exhibit "RS-4" to Mr Schmidt's affidavit of 30 March 2001 is relevant. If it is accurate, it shows that in the period beginning 19 May 1988 and ending on 16 September 1996, Mr Schmidt made payments to Ms Quinn personally, or at her direction, in an amount exceeding $245,000. A portion of this sum, according to the plaintiff, subsidised Ms Quinn's business. The inference is that this was her conveyancing practice; but Mr Schmidt fails to explain the financial relationship between that practice and the estate agency. To the contrary, the only "business" to which specific mention is made in Mr Schmidt's evidence covering this period is that operated under the name "Mary Patrick Real Estate".
Exhibit "RS-4" is not a convincing document. In the first place, it purports to show that between 27 October 1994 and 10 February 1995 Mr Schmidt paid Ms Quinn at least $6,791.66. This, however, was at a time when, according to the information given by him to Centrelink, he derived no income from the business. Indeed, in February 1995 he informed Centrelink that he had derived no income from the business over the last year; and he supplied to Centrelink a letter dated 22 February 1995 from his accountant which contained the following paragraph:
"During the previous 12 months, after attaining 65 years of age, [Mr Schmidt] has to the best of my knowledge, allowed the business to wind down to the extent that income derived from this source is below what he would be entitled to earn and still qualify for the age pension."
In his evidence before me, Mr Schmidt maintained that Exhibit "RS-4" "does not include expenses paid between 30 November 1993 and 25 October 1994 as I cannot locate records for this period."[46] The inference is that throughout that period his payments to her continued more or less at their normal levels. He said nothing to verify his accountant's letter, still less his statement to Centrelink on 17 February 1995 that he had "not had any income" from the estate agency "in the last year."
[46]Affidavit of Richard Schmidt sworn 30 March 2001 at para.7
It remains the plaintiff's case that Ms Quinn received very much more of the profits of Mary Patrick Real Estate than, on a strict application of whatever provisions regulated their distribution, she was entitled to receive. This, it is clear, is what the plaintiff would have me infer. He says that he:
"… started to give Mary extra money from my business. I paid expenses such as quarterly mortgage payments … utility bills and Mary's secretary's wages. I also paid all of the household expenses … By approximately 1994, I was dividing the commission I earned three ways. I kept one third of my income for myself, gave one third of my income to Mary and used the balance to pay our business expenses. My income essentially subsidised Mary's business as she used most of her income to pay her secretary."[47]
[47]Affidavit of Richard Schmidt sworn 31 October 2000 at paras.45 and 46
This passage follows the plaintiffs' account (summarised in paragraph [28] above) of the registration of the business name "Mary Patrick Real Estate", and his reference to the operation of "our business" from her home in Upwey. It precedes the statement that:
"As time went on, Mary became more and more interested in the real estate aspect of the business and did less conveyancing work. By 1997, Mary had obtained her real estate licence. Eventually Mary only did conveyancing for my clients who were purchasing or selling a property and friends or relations."[48]
[48]Ibid, at para.47
No explanation is given for the reference, in the preceding paragraphs of the affidavit, to "my business" and "my income" as if they were the exclusive property of the plaintiff. Nevertheless, in cross-examination of Mr Schmidt the following appears:
"Q.So the arrangement you had with Mary Quinn, in relation to Mary Patrick Real Estate, was that you would receive one third of the income?
A. Correct.
Q. She would receive one third of the income?
A. Correct.
Q.And a third of it would go to paying the expenses of the business?
A. As near as possible; correct.
Q.Yes. And I suggest to you that the amounts paid to Mary Quinn and detailed in this exhibit RS-4 … represent nothing more than her entitlement pursuant to that arrangement?
A. Correct."
I accept this evidence. Given its truth, it settles the issue. Even without it, however, I could not accept that Ms Quinn was paid more than she was entitled to be paid. The funds with which she was provided came from a business which she was, with the plaintiff, instrumental in setting up and operating. Its profits were generated, in part, by her. In these circumstances, the plaintiff cannot rely on this point unless he first establishes that the deceased received more than her entitlement. Any evidence to that effect must be examined carefully by the court because the deceased cannot respond to it, and because the applicant is putting forward a serious allegation: that the deceased is in breach of her duty to him. In my opinion, the evidence relied upon by Mr Schmidt falls short of the requisite mark. More to the point, his own evidence is incomplete, conflicting, imprecise and very difficult to follow. It is quite unable to sustain the burden of proof that, if he is to succeed, he must discharge.
For the reasons I have endeavoured to give, the plaintiff has failed to establish either the relationship or the financial contribution on which his case depended. The result is that detailed consideration of the other matters to which s.91(4) of the Administration and Probate Act refers is unnecessary. It also follows that the application must be dismissed.
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