Sellers v Scrivenger
[2010] VSC 320
•26 July 2010
| g | ||
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2008 9072
IN THE MATTER of Part IV Administration and Probate Act 1958
- and -
IN THE MATTER of the Estate of Ronald John Francis Scrivenger deceased
| PATRICIA JOSEPHINE SELLERS | Plaintiff |
| V | |
| ANDREW JOHN SCRIVENGER and VICTORIA MAI SCRIVENGER (who are sued as the Executors of the Will of Ronald John Francis Scrivenger deceased) | Defendants |
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ASSOCIATE JUSTICE: | DALY AsJ |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 25 and 26 May 2010 |
DATE OF JUDGMENT: | 26 July 2010 |
CASE MAY BE CITED AS: | Sellers v Scrivenger & Anor |
MEDIUM NEUTRAL CITATION: | [2010] VSC 320 |
MAINTENANCE – Application by de facto partner of deceased – whether testator had made adequate provision – adequacy of a bare right of residence – relevance of the source of the assets of the estate.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A Bolkas | Mason Sier Turnbull |
| For the first defendant | In Person | |
| For the second defendant | Ms C Sparke | MNG Lawyers |
HER HONOUR:
Background
Ronald John Francis Scrivenger (“Ron”) died on 23 April 2008, aged 76, having been diagnosed with pancreatic cancer in January 2008. He left behind three family members: the plaintiff, Patricia Josephine Sellers (“Pat”), his domestic partner, and the defendants, his two adult children, Andrew John Scrivenger (“Andrew”) and Victoria Mai Scrivenger (“Vicki”).[1]
[1]For ease of reading, and with the consent of the parties, I have referred to the parties and the deceased by the names they commonly use. This reflects the manner in which evidence was given by the parties.
Ron made his last will on 1 February 2008, when he was in hospital receiving treatment and care for what he and his family knew was a terminal illness. The will was drawn up and witnessed by solicitors. In the will, Ron appointed Andrew and Vicki to be the executors of his estate.
In the will, Ron made certain provision for Pat. Clause 5.2 of the will reads as follows:
My partner PATRICIA SELLERS (“PATRICIA”) of 5 Norwich Place, Templestowe, Victoria may personally reside in the Home “as long as she so desires.”
The words in italics above are handwritten, and replace a struck-out typewritten section which states:
a period of six (6) months after the date of my death provided that she pays the rates, taxes and insurance premiums on the property and keeps it in repair to my Executors’ satisfaction.
Clause 5.5 of the will provides that the “Home” is defined as Ron’s principal place of residence at the time of his death, being the property at 5 Norwich Place, Templestowe (“Templestowe residence”).
Clause 5.4 of the will provides that:
When my partner PATRICIA ceases to live permanently in the Home then the Home shall devolve as part of the balance of the estate.
Further, clause 6.1 of the will provides:
I give the amount of one hundred thousand dollars ($100,000) to my partner PATRICIA if she survives me by thirty (30) days after my death.
The will provided that the balance of the estate is to be divided between Andrew and Vicki. Clause 20 of the will provides:
I note that I have not made further provision for my partner PATRICIA after careful consideration and after having been made aware of the provisions of Part IV of the Administration and Probate Act 1958.
Ron’s estate includes the following assets (as at the date of the hearing):
(a)the Templestowe residence, in which Pat continues to reside, with an agreed valuation of $785,000;
(b)cash at bank of $348,652.32;
(c)shares valued at $242,691.05 as at 18 May 2010;
(d)coins valued at $3,000;
(e)a car valued at $1,500 - $3,000;
(f)$160,000 advanced to Andrew ($120,000) and Vicki ($40,000); and
(g)unvalued furniture, appliances and other personal effects located at the Templestowe residence.
Therefore, the total value of the estate (before taking into account the legal costs incurred in the course of this proceeding by the parties) is approximately $1,540,000.
The parties’ contentions
Pat brought this proceeding in December 2008 claiming further provision from Ron’s estate under Part IV of the Administration and Probate Act 1958 (“Act”). In his opening, counsel on behalf of Pat submitted that the will did not make adequate provision for Pat having regard to the nature of the relationship between Pat and Ron, and Pat’s circumstances at the time of Ron’s death. He submitted that adequate provision would be a payment to her from the estate of $620,000, which would enable Pat to purchase a modest two bedroom unit in Templestowe, cover her legal and re‑establishment expenses, purchase a new car and provide a nest egg to provide security against unforeseen contingencies and generate an income stream to supplement her Centrelink benefits.
In summary, Andrew and Vicki submitted that in granting Pat the right to occupy the Templestowe residence for as long as she wished, and providing a legacy of $100,000, Ron had more than adequately discharged any obligation owed by him to Pat at the time of his death.
Evidence
Pat relied upon three affidavits sworn by her, and a further four affidavits sworn by her friends.[2] The friends’ affidavits deposed to them socialising with Ron and Pat as a couple, and Ron’s apparent deteriorating health. None of the friends were cross-examined. Pat was cross-examined at some length by Andrew personally and counsel for Vicki regarding her relationship with Ron and her current and past financial circumstances. Andrew and Vicki relied upon affidavits sworn by them, and were cross-examined by counsel for Pat regarding their personal financial circumstances, their knowledge of their father’s financial and personal circumstances (including their knowledge regarding the relationship between Ron and Pat and their knowledge of Ron’s failing health in the year or so prior to his death).
[2]Elizabeth Wallace-Mitchell, Hugh Wallace-Mitchell, Robert Leonard Thompson, and Beverley Elizabeth Thompson.
While there were some minor inconsistencies between the evidence given by Pat in her affidavits and her oral evidence, none of these inconsistencies detracted in any material sense from her credibility as a witness. Further, the lack of direct knowledge regarding a number of relevant matters on the part of Andrew and Vicki means that I accept Pat’s evidence regarding her relationship with Ron and her personal circumstances.
In any event, as noted by counsel for Vicki in the course of her submissions, this is not a case where there is a substantial contest on factual matters. Rather, the task of the Court in this proceeding is to determine, having regard to the facts, the competing claims of the parties and the relevant provisions of the Act, whether Ron had made adequate provision for Pat’s maintenance and support in the will, and if not, what would amount to adequate provision and support. The question as to whether Pat was a person to whom Ron owed such an obligation was not in dispute.
Pat’s personal history and circumstances
Pat is 67 years old, having been born in 1943. Unlike many women of her generation, she has been engaged almost continuously in full time paid employment since she completed her secretarial training at the age of seventeen, until February 2007.
In 1963, at the age of 20, she married Peter Sellers, who then worked in his father’s service station, which he later inherited. They lived in Parkdale, in a home they purchased in 1968, and had two children, born in 1970 and 1972. With only short breaks to bear and care for her infant sons, Pat continued to work in a secretarial capacity for various companies. Her wages paid for her sons’ school fees at Carey Baptist Grammar. The Sellers family moved to East Doncaster in 1976.
Unfortunately, Peter’s business was in financial difficulties, and had to be sold in 1987. After his retrenchment in 1992, Peter persuaded Pat to agree to use their home at East Doncaster as security to purchase a motor repair business in Northcote. However, neither the business or their marriage endured. In January 1995, the couple separated. In 1996, the East Doncaster property was sold, and Pat received less than $1,500 from the proceeds of sale after Peter’s business debts were met. She moved to a rented unit in Pascoe Vale with her two sons. She continued working until May 1999 until she resigned as a result of work stress and her anxiety over her younger son, who had been diagnosed with schizophrenia earlier that year. Unusually for her, she was unable to find work until November 2000. During her period of unemployment, she relied upon Centrelink benefits and drew down upon her superannuation funds to support her and her son. It was during this period (in about January 2000) she met Ron Scrivenger, to whom I shall now turn.
Ron’s personal history
Ron was born in 1931. He was a bookmaker by profession, and held licences at three Victorian metropolitan racecourses. In 1962 he married Robin Dabb, a grazier’s daughter, and the mother of Andrew and Vicki. Andrew was born in 1968, and Vicki about a year later. Ron supported the family from his earnings as a bookmaker, and the family lived in a modest home in Essendon. Both Andrew and Vicki attended private schools. Robin was a homemaker, while Ron was described by Andrew as having a “moderately successful” career.
After 1982 the family fortunes improved when Robin’s father died, leaving his grazing property near Maldon and cash and shares to his only daughter. The value of Robin’s father’s estate was $190,494.21 as at 1 December 1982. For some years, Robin and Ron tried to manage the farming business at Maldon from their base in Melbourne. This lifestyle proved to be unsustainable (noting Andrew and Vicki were still in their teens and engaged in full-time education), and the Maldon property was sold in 1987.
In 1992 the family moved to a more substantial residence in Essendon. In 1998 Robin became ill with cancer. By this time Andrew had left home, but Vicki was still living at home. Both children provided practical and emotional support to their parents during the course of Robin’s illness. Robin died in early 1999. Her estate (valued at $577,837.15 in 1999) passed to Ron, as did her interest in their Essendon home, presumably by right of survivorship.
Vicki stayed at home with her father for a further year (perhaps less as she was not living at home when Ron and Pat commenced their relationship) and moved out to live with her now husband, presumably some time in 1999 or 2000.
The relationship between Pat and Ron[3]
[3]While Andrew and Vicki did in their affidavits and cross‑examination seek to raise questions regarding Pat’s account of events regarding her relationship with their father, for the reasons set out in paragraph 13 of these reasons, their lack of independent knowledge of the facts deposed to by Pat means that the matters narrated in this section are, for all practical purposes, uncontested, except where specifically indicated.
Pat and Ron first met in January or February 2000. They went out for dinner together on a number of occasions. By April 2000 the relationship had become an intimate relationship, and the couple slipped into a regular routine. Ron would collect Pat from her home in Pascoe Vale after the races on Saturday, and Pat would stay with Ron at his home at Essendon on Saturday night. They would spend Sundays together going out for movies, lunch, visiting friends, and drives to the country. They kept in contact by phone each day, and dined out together three or four times during the week. They went to Noosa Heads on holiday for five weeks in the winter of 2000. They socialised regularly with Pat’s friends.
Ron met Pat’s children early on in the relationship, but Ron did not hasten to inform Andrew and Vicki about the new developments in his life. Ron introduced Pat to Andrew and Vicki in or about March 2002. The need for an introduction may have been precipitated by an impending family wedding the couple attended, but also quite possibly by the fact that Vicki saw Pat in Ron’s car and made inquiries of her father regarding his passenger.
This routine continued until late 2003. Pat deposed in her affidavit that in about November 2003 Ron invited her to live with him at his Essendon property. Pat agreed, but told Ron that she would prefer to live in the East Doncaster/Templestowe area.[4] Ron agreed to move, and sold his Essendon home in November 2003. After settlement, Pat and Ron moved to rental premises in East Doncaster in March 2004 while searching for a suitable property. Ron purchased the Templestowe residence in September 2004, and the couple moved there in November 2004.
[4]During the course of her oral evidence, Pat suggested they must have discussed living together earlier in 2003, well prior to Ron selling his Essendon home. That may or may not be correct, but little turns on it for the purposes of this proceeding.
After March 2004 Pat and Ron were, although not married, in a “traditional” domestic relationship. Ron paid for most, if not all of the household bills. Even while she worked, Pat carried out most, if not all of the household duties apart from some outdoor chores, which were either carried out by tradespeople paid for by Ron or by Ron himself. There is some dispute between the parties as to who looked after the swimming pool, but little turns on that for the purposes of this proceeding.
In addition to carrying out domestic duties, Pat also took charge of the couple’s social life. Ron had few friends, but readily socialised with Pat’s friends. Pat and Ron entertained their friends and family regularly at the Templestowe residence, where previously they were more likely to meet friends and family members at restaurants. They hosted functions for their children and their families at Easter and Christmas, and to celebrate birthdays. By all accounts, they were a happy and loving couple, and there was every indication that if Ron had not fallen ill, they would continue to enjoy their life together.
In January 2007, Ron’s health started to deteriorate (noting that Pat’s friends reported noticing changes in his appearance and demeanour as early as 2006). He had balance problems, and was sleeping more than usual. He no longer felt able to drive. Pat ceased work in February 2007 (for reasons unrelated to Ron’s health), and took over the responsibility of driving Ron to appointments and social outings, although the evidence of their friends suggests that their social life was curtailed by Ron’s condition throughout the course of 2007.
From the time of Ron’s diagnosis of pancreatic cancer in January 2008 to his death in April 2008, Ron spent only three weeks at home. During that period, Pat assisted Ron with his personal care, including administering medication, showering, and toileting. Andrew and Vicki apparently also visited them regularly during this period, with Vicki visiting on two to three days per week, which enabled Pat to leave the house to go shopping and run errands. Pat visited Ron in hospital every day, and Vicki and Andrew also visited their father in hospital regularly during Ron’s last months.
The financial aspects of Ron and Pat’s relationship
At the time Ron and Pat commenced their relationship Ron was semi-retired, although he maintained his bookmaking operations at Caulfield Racecourse, which he sold in 2007. None of the parties have a clear understanding of Ron’s financial position and transactions prior to his death, but it is apparent from the evidence of his lifestyle, and the size and nature of the assets of the estate, that he was able to draw upon the income and capital of his cash and share portfolio to live comfortably in retirement without government assistance, and was able to assist others (Pat, Andrew and Vicki) financially. I accept that it is likely that a substantial proportion of this portfolio was derived from his inheritance from Robin.
In 2000, Pat was in no such comfortable position. She had little to show for her long years of hard work. She was, at the time she met Ron, unemployed, and relied upon Centrelink benefits and drawings from her superannuation to support herself and her son, who had limited capacity to live independently at that time. She found full-time employment in November 2000, which continued until February 2005, when she dropped back to three days a week. She was retrenched in February 2007, at the age of 64. She then registered with a number of recruitment agencies, but her attempts to find regular work were unsuccessful.
After she ceased employment, Pat redeemed her superannuation benefits, worth $62,000. She invested $50,000 in a “K2 Fund” (noting there is some dispute as to whether Ron contributed to this investment) and kept the rest in her bank account. She considered applying for the pension, but Ron was not prepared to provide a statement of assets to Centrelink, which was necessary to enable Pat’s entitlements to be assessed. Instead, he offered to pay Pat an allowance of $500 per month for her personal expenses. Further, in April 2007, Ron paid out the debt owing on Pat’s credit card, which was $24,718.69.
During the course of their relationship, Ron provided significant financial assistance to Pat. While this is disputed, Pat’s evidence is that Ron bought her a car valued at $16,000 in 2001. He paid for all dinners and outings, and, while there is no direct evidence on the point, presumably their holidays in Noosa and the Cook Islands and weekends away. After they commenced living together in 2004, Ron paid most, if not all household expenses, leaving Pat free to use her income from employment (and later, her allowance and savings) for her vehicle expenses, health insurance and personal items, as well as to provide financial assistance to her son between early 2006 and 2008.
After Ron’s death, Pat cashed in her K2 Fund, but redeemed only $43,000 owing to its deterioration in value. She continued to look for work, and obtained temporary employment between September 2008 and late January 2009. It is unclear as to whether Pat claimed or received a pension between April and September 2008. However, since March 2009 she has been in receipt of Centrelink benefits of $681.00 per fortnight, from which she pays her living expenses, including utility payments (the council rates and insurance premiums for the Templestowe residence have been paid by the estate). She has drawn upon her savings (which have dwindled to $3,500) to supplement her living expenses, and has drawn upon a line of credit to the sum of $39,000 to fund this litigation. She has continued to seek employment through recruitment agencies but has been largely unsuccessful.
Pat originally rejected Andrew and Vicki’s offer to pay her $100,000 legacy under the will, reportedly upon legal advice. However, she has made a subsequent request for distribution of her legacy, but has been unable to reach an agreement with Andrew or Vicki that such a distribution occur. She continues to live in the Templestowe residence.
Andrew and Vicki: personal background and circumstances
Andrew and Vicki are 43 and 41 respectively. By all accounts, their upbringing was happy, and their parents provided them with a good education. While they do not go into any great detail about their educational background, qualifications or professional experience, they are both tertiary educated.[5] They are both married: Andrew to Amanda (who is employed, and owns the property in Essendon in which they both live) and Vicki to William, an actuary. Vicki and her husband own a home together in Glen Iris, and they have a six year old son who attends the junior school at Caulfield Grammar. Vicki hopes to have another child, and Andrew is keen to start a family. Andrew currently works in a call centre in the Australian Taxation Office, while Vicki is occupied with home duties. She expects to rejoin the paid workforce at some stage, but not in the immediate future. She is currently financially dependent upon her husband, but would prefer some degree of financial independence. She hopes that she will be able to provide her son and any other child she bears with a private education. Neither Andrew or Vicki provided evidence of the income earned by them or their spouses, or of the value of the homes they live in. I can infer that while they are not wealthy, they both enjoy a reasonably comfortable middle class lifestyle through their own efforts and those of their respective spouses.
[5]The only evidence of their qualifications and professional experience comes from them deposing to having incurred liabilities under the HECS/HELP scheme, and the references in their mother’s will of 1998 to Andrew being an economist and Vicki being an Adult Migration Education Teacher. Vicki also referred to having been a teacher and an administrative assistant during the course of her oral evidence (T92, 2).
In their teenage years, Andrew and Vicki assisted their parents with the operation of the farm on the Maldon property during their holidays, although only to the extent that might be expected of young people engaged in full time education.
During the course of Robin’s illness, both Andrew and Vicki provided support to their parents, although Vicki provided the greater amount given she was still living at home. After their mother’s death they remained in regular contact with their father. At some stage Andrew apparently ran a business from Ron’s home. They celebrated the usual family events with their father (and with Pat once they became aware of Ron’s relationship with Pat). By all accounts the relationship between Pat and Andrew and Vicky was cordial until late 2008 when Pat signalled her intention to challenge Ron’s will.
During the course of her evidence, Pat remarked that Andrew and Vicki were not as close to their father as might be expected, and did not call or visit as much as children in “normal families” do. As might be expected, this contention was rejected by Andrew and Vicki. In my view, nothing turns on this dispute. All families are different, and I could not be persuaded to make a finding that Andrew and Vicki had anything but a warm and appropriate relationship with their father. By all accounts, Ron was a reserved and private man, and Andrew and Vicki not only did not live nearby but are, and no doubt have been, busy with their careers and establishing their families.
Ron provided Andrew and Vicki with some modest financial assistance over the years. He provided $12,000 to Andrew and his wife when his wife purchased a house, and a slightly larger amount (the exact amount is unclear) to Vicki and her husband. They received no substantial bequests from their mother after she died.
During the course of Ron’s final illness, both Andrew and Vicki regularly visited Ron at hospital and at home. It was apparently at their behest that Ron was persuaded to make a will to make provision for Pat from his estate, which Ron apparently did reluctantly (although there is no evidence that there were any difficulties in their relationship). As previously noted, the relationship between Pat and Andrew and Vicki was cordial until Pat made a claim upon the estate.
The parties’ submissions
It was not in dispute that Pat was a person for whom Ron had an obligation to, in the language of section 91(1) of the Act, to provide “proper maintenance and support”. Counsel submitted on behalf of Pat that the right of residency in the Templestowe residence and a legacy of $100,000 is inadequate provision for her proper maintenance and support, having regard to Pat’s financial needs, the size of the estate, the quality of the relationship between Pat and Ron, and the absence of competing financial claims by Andrew and Vicki. He submitted that adequate provision necessitates the provision of a secure roof over her head and a “nest egg” to generate an income stream to supplement her pension.
Counsel relied upon the following statement of Byrne J in Gigliotti v Gigliotti[6] as authority regarding the extent of a testator’s responsibility to his widow:
The wisdom of generations of judges exercising this jurisdiction has dictated that a widow requires not only a roof over her head, but also what is called a ‘nest egg’ to give her some comfort in facing the unforeseeable vicissitudes which lie ahead.
[6][2007] VSC 279, at paragraph 13
Counsel submitted that the Act makes no distinction between legally married widows and de facto widows and that the principles applicable to claims for provision by persons in both categories are similar.
Counsel submitted that a right of residency in the Templestowe residence does not provide sufficient security for Pat. In particular, the right of residency does not provide Pat with any flexibility in meeting her needs as she gets older. If the Templestowe residence is not a suitable home because of declining health or mobility, she could not require Andrew and Vicki (as executors of the estate) to sell the property and purchase alternative accommodation, or access the equity in the Templestowe residence to pay for hostel or nursing home accommodation in the future.
Counsel also submitted that $100,000 was an inadequate cash legacy having regard to the paucity of Pat’s assets and the likelihood of her being completely reliant upon the pension in the future.
In contrast, the absence of any precise evidence regarding Andrew and Vicki’s financial position, and indeed their concessions in evidence that they were not in financial need, means that neither Andrew or Vicki have a superior or pressing claim to the estate. Counsel drew the Court’s attention to the following statement of Ipp J in Bladwell v Davis[7]:
. . . that where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, will ordinarily result in the needs of the widow being given primacy. That is simply because, in such circumstances, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event, the need of the widow would be greater than that of the others.
[7][2004] NSWCA 170, at paragraph 2
In response, Counsel on behalf of Vicki submitted that the provision made by Ron for Pat in the will was generous having regard to the relatively short duration of their domestic relationship, the generosity of Ron towards Pat during the course of their relationship, and the fact that Pat had been financially independent before their relationship and throughout the course of the majority of the period of their relationship.
Counsel referred to a number of authorities to support the contention that a testator’s obligation to a de facto partner is not equivalent to that of a partner in a marriage relationship, except perhaps in cases where the partners were in an exceptionally long term relationship (a matter of decades rather than years) or where the parties raised children together. The current case does not meet either of these criteria, and the extent of Ron’s obligation to provide for the maintenance and support for Pat needs to be viewed in that context. Further, any obligation owed by Ron to Pat also has to be considered in the context of Ron’s obligation to his adult children, particularly given the evidence that a substantial proportion of Ron’s assets must have been derived from his inheritance from Robin, the children’s mother.
Andrew agreed with the submissions made on behalf of his sister, and, with some emotion, submitted that Pat was completely unjustified in making any claim upon the estate. In fact, he considered that the will went too far in Pat’s favour, and, as Pat has indicated that she no longer wishes to live at the Templestowe residence, she should not continue to reside there and the Templestowe residence ought to revert to the estate.
Andrew submitted that making any further provision for Pat would contravene community expectations regarding what legacy a de facto partner should receive from an estate in the circumstances of this case. Arguably, the de facto relationship was of only two years’ duration. He queried whether the relationship between Ron and Pat was truly a “love relationship” or merely one for their mutual advantage (that is, Ron acquired a housekeeper and companion, while Pat acquired a roof over her head and a partner who paid the bills). He noted that Ron had already provided Pat with substantial financial assistance during the course of the relationship. Finally, Andrew submitted that it was unreasonable and morally wrong for Pat to obtain funds from the estate to purchase a freehold property (which could then be willed to her children) when the majority of the estate had been derived from his mother, to whom Ron had been married for nearly forty years.
Relevant principles
The test in determining whether a testator has made adequate provision for the proper maintenance and support of a claimant, and if not, what provision ought to be made, is:
What provision a wise and just testator would have thought is his moral duty to make in the interests of the claimant.[8]
[8]Nettle JA in Blair v Blair [2004] 10 VR 69, 84.
Further, the Court is required to have regard to the specific matters set out in paragraphs (e) to (p) of subsection 91(4) of the Act. Those provisions, along with a summary of the submissions made by each party with respect to the application of the provisions to the circumstances of this case, are set out below:
(e)any family or other relationship between the deceased person and the applicant including the nature of the relationship and the relevant length of the relationship
Pat: She and Ron were in an exclusive long relationship for approximately four years prior to commencing to live as though husband and wife in March 2004. The relationship was a traditional relationship in that Ron supported the household financially and Pat did the domestic work, as well as organised the couple’s social life. It was a warm and loving relationship, and Pat was Ron’s primary carer during his illness.
Andrew: The relationship was a “boyfriend-girlfriend” relationship for most of the relevant period. The relationship appeared to be one of mutual advantage rather than an obvious romantic attachment.
Vicki: The exact character of the relationship prior to 2004 is unclear, with no corroborative evidence of regular contact prior to 2004. Ron was unwilling to introduce Pat to his children. Ron was not prepared to commit to marriage, but deferred the question on a number of occasions.
(f)any obligation or responsibilities of the deceased to the applicant, any other applicant, and the beneficiaries under the estate
Pat: She was Ron’s domestic partner and, from February 2007, almost entirely dependent upon Ron. She was his primary carer from when he became ill at the beginning of 2007. Neither Andrew or Vicki were financially dependent upon Ron at the time of his death, and both live independently with their spouses. Neither claims any particular financial need, and neither have been forthcoming about their financial position.
Andrew: Ron had provided substantial financial assistance to Pat during the course of their relationship. Her current debts arise out of her prosecution of this litigation.
Vicki: Pat has received adequate provision under the will, and is in a better financial position than she had been at the start of the relationship. Any generosity shown by Ron to Pat does not of itself create any further obligations to provide support.
(g)the size and the nature of the estate and any charges and liabilities to which the estate is subject
The parties agree that the estate is a medium size estate.
(h)the financial resources (including earning capacity) and the financial needs of the applicant and any beneficiary in the estate at the time of the hearing and the foreseeable future
The parties agree that Pat’s financial position is poor, but both Andrew and Vicki submit that her position has been improved by the financial support provided by Ron to Pat during the course of the relationship and by reason of the terms of the will.
(i)any physical, mental or intellectual disability of any beneficiary of the estate
None of the parties claim any disability.
(j)the age of the applicant
Pat is 67 years of age.
(k)any contribution (not for adequate consideration) of the applicant to the building up of the estate or to the welfare of the deceased or family of the deceased
Pat: While she has not made any direct financial contribution to Ron’s assets, she contributed to his welfare by performing domestic duties, providing care for him when he became ill, and providing him with companionship and a happy and comfortable home life.
Andrew: Pat made no financial contribution to the estate.
Vicki: Pat relies upon her domestic contributions alone. Pat used her income and savings for her own purposes, not to benefit Ron.
(l)any benefits previously given by the deceased person to any applicant or beneficiary of the estate
Pat: Ron provided benefits to each of Pat, Andrew and Vicki.
Andrew: Ron provided Pat with substantial benefits during the course of the relationship, including a contribution of $25,000 to Pat’s K2 investment (this is denied by Pat).
Vicki: Ron allowed Pat to live rent free with him from March 2004, in a house furnished by him. He provided her with an allowance of $500 per month from February 2007 and paid off her credit card debt of $24,718 in April 2007. The financial contributions made by Ron to his adult children were modest.
(m)whether the applicant was being maintained by the deceased person before that person’s death either wholly or partially and where the court considers relevant the extent to which and the basis upon which the deceased had assumed that responsibility
Pat: Ron had purchased and furnished the Templestowe residence where he and Pat had set up home. He paid for all outgoings. Ron purchased the car used by Pat and paid off her credit card, and from 2007 provided her with an allowance.
Andrew: The relationship was mutually beneficial, and Pat was financially independent during most of the period of the relationship. Pat was content to receive an allowance rather than the pension.
Vicki: Pat was being partially maintained by Ron.
(n)the liability of any other person to maintain the applicant
Pat: No other person has a liability to maintain her.
Andrew: There is no reason to believe that Pat will not enter into another relationship with someone who will maintain her.
Vicki: No submissions.
(o)the character and conduct of the applicant on any other person
Pat: She was loving and caring towards Ron and became his primary carer when he fell ill. Ron’s children had a good but not exceptionally close relationship with Ron.
Andrew: Pat’s demands upon the estate have been unreasonable.
Vicki: The fact that Pat had a good relationship with Ron is uncontested, although the duration of it is.
(p)any other matter the court considers relevant
Pat: The Templestowe home is in need of repair and ongoing maintenance, and the will is unclear as to who is responsible for the cost of any repairs or other outgoings in respect of the property.
Andrew: Pat’s claim is a particularly weak claim.
Vicki: The most significant other matter is the original source of Ron’s assets is Andrew’s and Vicki’s late mother.
The significance of Robin’s contribution to Ron’s estate
The issue of the source of Ron’s assets was a substantial focus of the evidence and the parties’ submissions. I agree that while there is no authority directly upon this point, it is a relevant matter in determining whether Ron had acted as a “wise and just testator” in accordance with his moral obligations to Pat.
It is difficult to precisely determine the extent of Robin’s contribution to Ron’s estate. At the time when Robin inherited her father’s estate, Robin had been engaged in home duties for at least fifteen years, over which period Ron had been the sole breadwinner. Robin’s father’s estate comprised of real estate valued at $103,000, along with cash, shares, chattels and livestock of approximately $87,000. By way of comparison, the average house price in Melbourne as at December 1982 was $46,750.[9] Therefore, it is fair to say that Robin’s father’s estate was a substantial estate.
[9]Source: Abelson P and Chung D [2004]: “Housing Prices in Australia”.
The evidence suggests that the Maldon farm (and presumably associated assets) were sold in 1987, and Ron and Robin purchased a more substantial home in Essendon in 1992. I can infer that the two major sources of funds for that purchase were the proceeds of sale of their existing home, along with some funds realised from the sale of the farm. However, the value of Robin’s estate when she died (approximately $577,837, of which $437,236.65 was made up of cash and shares) suggests that a substantial part of her inheritance from her father remained intact as at the date of her death. Therefore, the submission made by counsel for Pat that Ron’s earnings assisted Robin to preserve her assets rather than to use them to support the family has some force. Counsel for Pat also submitted that Ron was given an absolute interest in his entitlement under his wife’s will and the source of Ron’s assets does not impose any limitation upon Ron’s moral responsibility to make adequate provision for Pat’s proper maintenance and support.
The ultimate source of Ron’s assets (or a substantial proportion of them) is a significant matter to both Andrew and Vicki. They received nothing from their mother’s estate, and, consistently with community expectations, made no claim on Robin’s estate on the assumption that it would “flow through” to them on Ron’s death. There is no evidence that Ron built up his assets further after Robin’s death by his own endeavours. Andrew submitted that it would be unfair for the Court to accede to Pat’s claim for an award of an amount sufficient to purchase a freehold property, which could then be willed to her own children.
Did Ron make adequate provision for Pat’s proper maintenance and support?
In my view, while the provision made by Ron for Pat in his will went a substantial way towards providing Pat with proper maintenance and support, it did not quite go far enough.
There is evidence to suggest that Ron had to be persuaded to make any provision for Pat in his will, and at one stage intended to provide Pat with a right of residence in the Templestowe residence for only six months. In any event, he came to the view that he should provide Pat with security of tenure in the Templestowe residence, plus a nest egg to supplement her existing savings.
It is difficult to reach a concluded view as to what motivated Ron to make the will in the manner that he did. The evidence of Andrew and Vicki seems to assume that the purpose of the will was to make more generous provision for Pat than otherwise be the case. However, there is no evidence of Ron having made a previous will. Therefore, it is equally possible that the purpose of making the will was to limit Pat’s entitlements to the estate to benefits which were less favourable than to what she would have been entitled under the intestacy provisions of the Act.
The main difficulty with the terms of Ron’s will is that the right of residence provided for by clause 5 of the will does not provide her with sufficient flexibility to meet her long term needs. Pat is 67 and, one can assume, is unlikely to obtain remunerative employment in the future, except perhaps on a casual and/or part-time basis, and her prospects must be diminishing over time. Actuarial tables produced by her counsel demonstrate that her life expectancy is a further 21 years. While her health appears to be good (there is no evidence to suggest to the contrary) common sense dictates that as she advances in years her health and possibly mobility are likely to decline over time.
In these circumstances, limiting Pat’s housing options to a double-storey four-bedroom home in Templestowe with a swimming pool is unrealistic. While there is no direct evidence as to the actual costs of running the Templestowe residence, I accept Pat’s evidence that she finds the costs of utilities difficult to manage in her current financial circumstances. The furniture and appliances in the Templestowe residence have not been left to Pat under the will. Further, while the estate is currently paying the rates and insurance premiums in respect of the Templestowe residence, the will is silent as to the respective obligations of the estate and Pat with respect to those outgoings. Finally, the right of residence does not enable Pat to deal with the Templestowe residence in such a way as to meet her possible future needs: for example, to enable her to raise funds for hostel or nursing home accommodation.
Andrew and Vicki accept that Ron’s will may not provide for a wholly satisfactory outcome for Pat given her financial position, but query Ron’s obligation to provide such a satisfactory outcome, given the relatively short duration of the domestic relationship, the assistance provided by Ron to Pat during the course of his lifetime, the fact that Pat and Ron were not legally married, and the source of Ron’s assets.
In my view, the critical factor in determining whether Ron had made proper provision for Pat’s maintenance and support is the circumstances in which Pat found herself at the time of Ron’s death (as opposed to her circumstances over the course of the relationship). It is correct that Pat enjoyed some degree of financial independence over the course of the relationship. However, after February 2007, Pat had become almost completely financially dependent upon Ron, and Ron had assumed responsibility to maintain Pat.
To put matters in their proper perspective, by April 2008 the duty owed by Ron to Pat was significantly more onerous than might have been the case four years previously. By 2008, they had been living in a happy domestic relationship for about four years, having been in an exclusive intimate relationship for a further four years prior to that time. They set up home together in March 2004, apparently at Ron’s instigation, and he was happy to move across town in accordance with Pat’s wishes. While Ron paid all the bills, Pat maintained a happy and comfortable home and family and social life. She cared for him when he became ill. When she ceased work, she refrained from applying for the aged pension at Ron’s request. If she had persisted, one can only infer (from both his attitude and the size of the estate) Pat would only be able to receive the aged pension if she ceased to cohabitate with Ron. Given her age, it would have been apparent to Ron at the time of his death that Pat’s prospects of finding future work were poor, and that the only financial resources available to her would be the pension, her modest savings, and any provision made for her by Ron.
It may well be that Ron did not see his obligations in that way, and that his views about his obligations may have influenced his resistance to the idea of marriage. He was no doubt fully aware of the extent to which his assets were derived from Robin’s own inheritance, and the potential impact marriage to Pat might have upon her claims to his assets in the event of divorce or death.
However, these matters (the failure of Pat and Ron to marry, Ron’s views regarding his obligations to Pat, and the source of Ron’s assets) seem to me to be more relevant to the extent and nature of additional provision for Pat which ought to be made rather than to the objective assessment of whether the provision that has been made is adequate. Accordingly, for the reasons set out above, I find that Ron’s will failed to make adequate provision for Pat’s proper maintenance and support.
For completeness, the following factors specified under section 91(1) of the Act have informed my view that Ron failed to make adequate provision for the proper maintenance and support of Pat:
(a) Pat and Ron were in an intimate and exclusive relationship for eight years, and were domestic partners for four years. All indications were that the relationship would continue to be happy had Ron survived (section 91(1)(e));
(b) Ron had obligations to each of Pat, Andrew and Vicki (section 91(1)(f));
(c) the size of the estate is such that making adequate provision for Pat is feasible without unduly diminishing the entitlements of Andrew and Vicki (section 91(1)(g));
(d) Pat has limited financial resources available to her, and her financial situation is unlikely to improve (section 91(1)(h)); Andrew and Vicki claim no particular financial need;
(e) Pat is aged 67: as such, her prospects of obtaining regular, remunerative employment are limited, and diminishing (section 91(1)(j));
(f) Pat made no financial contribution to the estate, but made a significant contribution to Ron’s welfare as a companion, homemaker and carer (section 91(1)(k));
(g) for at least a year before Ron’s death, Pat was almost completely dependent upon Ron, and prior to that time was at least partially maintained by Ron. Ron had assumed that responsibility by setting up home with Pat in the Templestowe residence, and by providing her with an allowance from February 2007 (section 91(1)(m));
(h) no other person is liable to maintain Pat, and one cannot assume that she will enter into a relationship with someone who will be obliged to or be capable of supporting her financially (section 91(1)(n));
(i) Pat is of good character, and was a loving companion to Ron in his final years (section 91(1)(o)); and
(j) the Templestowe residence is large and in need of repair, and the right of residence conferred upon Pat by the will does not provide her with the flexibility and security she needs, or the resources to maintain the Templestowe residence (section 91(1)(p)).
Therefore, what would amount to proper provision? In my view, the claim made on behalf of Pat equivalent to an award of approximately $675,000 is excessive, amounting to approximately 44 per cent of the estate. While social attitudes regarding the distinction between married relationships and de facto relationships have shifted considerably over time. I cannot ignore the line of authority which gives greater weight to the claims of parties who have entered “a formal and binding commitment to mutual support.”[10]
[10]Marshall v Carruthers: Marshall v Marshall [2002] NSWCA 47; see also Re Sitch [2005] VSC 308.
However, I doubt that the significance of the distinction between parties to marriage relationships and other domestic partners is as great as that contended for by Andrew and Vicki. Each case must turn upon its own facts. I note that the intestacy provisions of the Act make no distinction between the surviving parties of legal marriages or de facto relationships (provided the latter satisfies the relevant test as to who is entitled to be regarded as a domestic partner). Further, while the authorities suggest that successful claimants tend to have been in longstanding de facto relationships, or where the partners had raised children together, this is not universally the case. Indeed, as recently as last month the Court of Appeal upheld a trial judge’s finding that the survivor of a “longstanding, close and exclusive relationship” was entitled to half of the deceased’s estate in circumstances where the parties were in a twelve-year relationship but maintained separate residences and financial arrangements.[11] By comparison, Pat and Ron were together for eight years, cohabited for four years, and by the time of Ron’s death Pat was almost completely maintained by Ron.
[11]Forsyth v Sinclair [2010] VSCA 147.
I also cannot ignore the legitimate claims of Andrew and Vicki to a substantial proportion of their father’s estate. The financial assistance provided to them by Ron as adults has been modest (although not negligible). While they claim no particular financial need, both are at least partially dependent upon their respective spouses (Andrew for a roof over his head, and Vicki for her living expenses). They are at an age and stage where they are likely to be required to devote substantial resources to raising their families and building their assets for their future security and that of their families.
The fact that at least a substantial part of Ron’s assets was derived from Robin’s own inheritance is also a relevant factor in determining what is appropriate provision for Pat. The fact that Robin left an absolute interest in her estate to Ron is neither here nor there. I accept that it is likely to offend community standards for the Court to in effect divert Andrew and Vicki’s mother’s estate away from her children (neither of whom have engaged in any disentitling conduct) to a de facto partner of relatively limited duration who has materially benefited from her relationship with the surviving spouse of the first marriage. This is intended as no criticism of Pat (who is clearly of good character, and who provided a reserved and private widower with love, companionship and support during the last years of his life), but is a legitimate perspective from which to view her claim.
There is surprisingly little authority regarding the issue of the strength of what might be called the “derivative” claims of children of a first marriage to the estate of their parent compared with the claims of the parent’s widow. Perhaps the closest is the judgment of Nettle J (as he then was) in McKenzie v Topp [2004] VSC 90. In this case, an adult stepson made a claim to the estate of his step-mother. The claim was successful on other grounds, but at paragraph 56 he noted the following submission made by counsel for the step-son:
The argument was that where a man who has children from an earlier marriage leaves to his second wife the entirety of his estate, and thereby deprives the children of his first marriage of the provision which they might otherwise have expected, it falls to the second wife as a matter of moral responsibility to make adequate testamentary provision for those children.
Nettle J observed (at paragraph 58):
It appears to me that the proposition should be accepted, up to a point. For just as community attitudes are the touchstone of adequate provision, so too are they the criterion of responsibility to provide. Other things being equal, right thinking members of society are likely to accept that the needs of the widow of a second marriage should rank in priority ahead of the claims of the children of a first marriage; although of course it is always a question of fact. But equally, upon the death of the widow, and as it were in the event of a surplus, most would surely say that the children of the first marriage should rank for their fair share. For once the widow is gone, and therefore no longer in need of provision, her needs no longer warrant that the children rank behind her or thus her chosen successors.
This statement of principle, while made in a different factual context, is relevant to the current case. It is relevant to Ron’s responsibility to make provision for his children given that their mother had made no provision for them in her will. It would also be relevant to Pat’s responsibility to make proper provision for Andrew and Vicki had she been gifted with (or awarded) a substantial proportion of Ron’s estate absolutely.
In the current circumstances, if Pat was to obtain a substantial proportion of Ron’s estate absolutely, Andrew and Vicki would be required to postpone their entitlement to Robin’s assets twice: first to support their father, and then to support Pat. Indeed, the right of residency under the will does in effect amount to a second postponement, given that the Templestowe residence forms a substantial part of the estate. However, while I consider that the right of residency does not adequately meet Pat’s current and future needs, making an order for a substantial capital sum to go to her absolutely leaves Andrew and Vicki dependent upon Pat’s bounty. If Pat were to leave her estate to her descendants (which appears to be within her contemplation)[12] Andrew and Vicki would be in the invidious position of contemplating whether to bring an application under this Act. Such an outcome ought to be avoided if possible.
[12]See Pat’s evidence at T61, 8-10.
Finally, in determining what provisions ought to be made. I am mindful that courts should be reluctant to interfere unduly with a testator’s wishes, as expressed in the will. This approach is particularly important when there was a relatively short period of time between the making of the will and Ron’s death (cf Forsyth v Sinclair, where the deceased had made a will some decades before his death, prior to the commencement of his relationship with the claimant). Therefore, in determining what would amount to adequate provision, a court should adopt a minimalist approach. In this case, the award should be tailored to perfect the terms of Ron’s will rather than radically rewrite the will.
Accordingly, I propose to order that the will be amended so as to revoke the right of residency in favour of Pat with respect to the Templestowe residency, and in its place establish a trust for Pat for life in the sum of $420,000 to enable the estate to purchase for her a modest unit in the Templestowe area, with Pat to have all of the rights and obligations of a life tenant under the Settled Land Act 1958. I would also order that clause 6.1 of the will be amended to substitute the sum of $198,000 for the sum of $100,000.
The sum of $198,000 is calculated as follows:
(a) the original cash legacy of $100,000;
(b) the sum of $23,000 to meet conveyancing expenses for the purchase of an alternative property;
(c) the sum of $25,000 to replace her motor vehicle (while there is no evidence that the car is in poor repair, it can be assumed that it will become increasingly more expensive to maintain, and it is not appropriate for a senior lady approaching her senior years to drive an unreliable vehicle, particularly in an area not well served by public transport); and
(d) the sum of $50,000 to provide a fund to assist with the payment of utilities and outgoings on the substitute property to enable Pat to comply with her obligations as a life tenant.
I have not made any provision for a sum for Pat to purchase furniture, as I would also order that Pat retain the chattels in the Templestowe residence, save for any items which Andrew and Vicki can identify as belonging to them or intended by Ron to be given to them. I will give liberty to apply if necessary to resolve any disputes about chattels.
Further, the order does not take into account the claim made that a sum should be awarded to enable Pat to discharge her loan. The evidence suggests that the loan has been drawn upon for the sole purpose of funding this proceeding, and therefore this liability will be considered when considering the question of costs.
The primary basis of my decision to limit Pat’s entitlements under the will to a life tenancy in a home rather than an award of a capital sum are the matters set out in paragraphs 70 to 76 above, namely, the competing entitlements of Andrew and Vicki and the objective of respecting, as much as is possible and fair, the intentions of the testator. For completeness, I also took into account the following relevant matters specified in section 91(1) of the Act, being:
(a) the relatively short (but not insignificant) length of the domestic relationship (section 91(1)(e));
(b) the lack of financial contribution by Pat to the assets of Ron’s estate (section 91(1)(k));
(c) the generosity of Ron to Pat during his lifetime (compared with the relatively modest gifts made by Ron to his children) (section 91(1)(l));
(d) the absence of any disentitling conduct on the part of Andrew and Vicki (section 91(1)(o)); and
(e) the fact that a substantial proportion of Ron’s estate was derived from his inheritance from Robin (section 91(1)(p)).
I note that counsel for Pat submitted that I should not make an order which imposed an ongoing trustee/beneficiary relationship between Andrew and Vicki and Pat. These submissions were based upon the deterioration of the relationship between Pat and Ron’s children after Ron’s death and what was suggested to be some inappropriate dealings with the assets of the estate by Andrew in particular.
I do not consider that these issues outweigh the considerations referred to above. The dealings referred to have not put assets out of the reach of the estate, and while they may impose an obligation upon Andrew to account to Vicki, they do not affect the ability of the estate to meet Pat’s claims. Furthermore, while it is apparent that Andrew has been affronted by Pat’s claim, I do not detect any particular ill will in Vicki’s attitude to Pat. In any event, during the course of his evidence and submissions, Andrew made it clear that he would accept the findings of the Court,[13] and from my observations of both Andrew and Vicki, I consider that they would both adopt a conscientious and responsible approach to their responsibilities as trustees.
[13]See T62, 22-23, T90, 15-16.
I will hear the parties’ submissions regarding the precise form of order to give effect to these reasons, and on the question of interest and costs.
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