Snodgrass v Snodgrass
[2012] NSWSC 1335
•24 October 2012
Supreme Court
New South Wales
Medium Neutral Citation: Snodgrass v Snodgrass [2012] NSWSC 1335 Hearing dates: 23-24 October 2012 Decision date: 24 October 2012 Jurisdiction: Equity Division Before: Macready AsJ Decision: 1.Summons dismissed.
2.Defendants' costs on an indemnity basis be paid or retained out of the estate of the deceased.
3.I make no order for the costs of the plaintiff, to the intent that she shall bear her own costs.
Catchwords: SUCCESSION - family provision and maintenance - whether adequate and proper provision made for maintenance, education and advancement in life Legislation Cited: Family Provision Act 1982
Succession Act 2006Cases Cited: Andrew v Andrew [2012] NSWCA 308
Banks v Hourigan (NSWSC, Waddell CJ in Eq, 2 March 1989, unreported)
Basto v Basto (NSWSC, Hodgson J, 8 September 1989, unreported)
Cameron v Hills (NSWSC, Needham J, 26 October 1989, unreported)
Court v Hunt (NSWSC, Young J, 14 September 1987, unreported)
Crisp v Burns Philp Trustee Co Ltd (NSWSC, Holland J, 18 December 1979, unreported)
De Winter v Johnstone (NSWCA, 23 August 1995, unreported)
Elliott v Elliott (NSWSC, Powell J, 18 May 1984, unreported)
Elliott v Elliott (NSWCA, 24 April 1986, unreported)
Fancett v Ware (NSWSC, Needham J, 3 June 1986, unreported)
Fung v Ye [2007] NSWCA 115
Golosky & Anor v Golosky [1993] NSWCA 111
Guskett (deceased), Re [1947] VLR 212
Lewis v Lewis [2001] NSWSC 321
Luciano v Rosenblum (1985) 2 NSWLR 65
McGrath v Eves [2005] NSWSC 1006
Massie v Laundy (NSWSC, Young J, 7 February 1986, unreported)
Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24
Phillips v Quinton (NSWSC, Powell J, 31 March 1988, unreported)
Salmon v Blackford [1997] NSWCA 274
White v Barron (1980) 144 CLR 431
Worladge v Doddridge (1957) 97 CLR 1Category: Interlocutory applications Parties: Robyn Snodgrass (Plaintiff)
Phillip Melbra Snodgrass, Lynette Margaret DanbyRepresentation: R. Colquhoun (Plaintiff)
P. Menadue (Defendant)
Fowler Predny (Plaintiff)
Brennan Tipple Partners (Defendant)
File Number(s): 2011/00407960 Publication restriction: none
Judgment
HIS HONOUR: This is an application under the Succession Act 2006 in respect of the estate of the late Betty Margaret Snodgrass who died on 24 August 2010, aged 85 years. She was survived by her four children, all of whom are parties in the proceedings. Her husband predeceased her.
The last will of the deceased
This was made on 13 February 2009 and appointed the three defendants as executors thereof. The will contained a trust in respect of her principal place of residence for the plaintiff Robyn for life and on Robyn's death the house was to pass to residue.
The balance of her estate was held in trust in four equal shares for her children. Those to the defendants were held outright but that share for the plaintiff Robyn was to be held upon trust in these terms:
"5. MY Executors shall convert into cash the balance of my estate, but shall have the power to postpone any sale without liability for any loss as a result of such postponement and shall divide the net proceeds after the payment of all other costs and expenses as follows:
(a) One quarter (1/4) share shall be given to each of RICHARD DAVID SNODGRASS, PHILLIP ALLEN SNODGRASS and LYNETTE MARGARET DANBY.
(b) The remaining One quarter (1/4) share shall be held by my Executors as trustees to create a fund called "the Robyn Fund" and as Trustees of this fund the Trustees shall have the power to postpone any sale, without liability for any loss as a result of such postponement and shall deal with the Fund in accordance with the remainder of this clause:
(i) During the lifetime of Robyn my Trustees of this Fund shall be authorised to invest the Fund as authorised by law and add any income to the Fund from time to time and shall pay all or part of the income or all or part of the capital of the Fund to pay for all costs including rates, taxes, insurance premiums and maintenance on any house held by my Trustees in accordance with Clause 5(b) herein and are also empowered to pay all or part of the income or all or part of the capital of the Fund to Robyn in the amounts and at times as the Trustees of this Fund in their absolute discretion think fit, without any obligations to make payments to Robyn;
(ii) My Trustees shall have regard to the environment and accommodation in which Robyn may reside and if appropriate, decide to acquire a legal, equitable, leasehold, or any other interest for the benefit of Robyn in any suitable housing arrangement on either community or private land whether in single or shared accommodation in the Trustees' absolute discretion;
(iii) My Trustees shall have regard to any entitlements that Robyn may otherwise have to any means tested pension or other entitlements that may be available from time to time;
(iv) My Trustees shall have regard to the maintenance, support, education, advancement or benefit of Robyn and may provide such financial support for items that the Trustees would consider improving the quality of life of Robyn and without limiting the generality of the foregoing, the financial support or items may include expenditure on personal furnishings and fittings, recreation, entertainment, holiday travel and accommodation, as well as personal belongings;
(v) On the death of Robyn any balance in the Fund shall form part of the residue of my estate;
(vi) The Trustees of this fund may appoint a substituted Trustee to act in their place in the event of their retirement or death and in the event that any Trustee should die before appointing any substituted Trustee then the Executor of that Trustee estate shall be appointed a Trustee of this Fund in their stead."
There was then a gift of residue to each of the three defendants equally, with provision for children substitution.
The gift of the house for life failed because the testatrix sold it before her death so her estate was held in four shares as provided for in clause 5.
Assets in the estate of the deceased
By the time of death the deceased was living in a health care facility for which a bond had been paid. That has been recovered substantially. The executors then purchased, in circumstances to which I will come presently, a house to be occupied by the plaintiff.
The estate now consists of that property at Green Point, purchased for $335,869, and cash of $200,069.
The defendants' costs amount to $58,330 and the plaintiff's, $40,000.
Family history
The late Betty Margaret Snodgrass was born in July 1925. She had four children: Richard, born in April 1949; Lynette, born in February 1952; Phillip, born in March 1958; and Robyn, born in April 1962.
Between 1979 and 1989 the plaintiff worked in her parents' hardware store in Turramurra after leaving school. She had a position as a shop assistant and she also worked later for another shop of her parents.
By about 1980 the plaintiff started suffering from migraine headaches.
In 1987 she did a secretarial course at TAFE but could not pass the typing test due to poor hand/eye coordination. I mention that the plaintiff has very poor eyesight and, so far as the pension authority is concerned, they regard her as legally blind.
In 1989 she had employment with Australia Post and was helped by the Royal Blind Society to get that work. In 1990 she transferred to the Tax Office doing some clerical work and then in 1991 transferred to Centrelink at Ryde doing clerical work. She then went to the Gosford branch in 1994 and that finished because it was determined by the Public Service Tribunal that she was not working at an acceptable level, entirely of course due to her disabilities.
The plaintiff has not worked since then apart from one part-time job as a sales assistant for about 12 months. In December 1994 the plaintiff went on a disability pension. She remains on this and is quite secure in her income.
On 4 April 1995 the parties' father, the deceased's husband, died. By 1997 the plaintiff started to have a gastric ulcer. In 1999 she had surgery to remove her thyroid. In 2001 she fractured her right foot. In November 2008 the plaintiff moved from her rented flat back to her mother's home to keep her mother company and help care for her. Her mother had had a fall by this stage and needed assistance.
In February 2009 the deceased was admitted to Gosford Hospital and then went into a nursing home. As I have mentioned, she made her will on 13 February 2009.
In March 2009, as the house of her mother had been sold, the plaintiff vacated it. That sale was settled on 28 April 2009 and the funds used of course to purchase the accommodation for the mother.
As I have said, the deceased died on 24 August 2010.
It was on 14 September of that year that the plaintiff first consulted a solicitor about making a claim under the Act.
On 24 August 2011 time to make a claim expired. In August of 2011 there was also discussion between the plaintiff and her three siblings about the effect of her mother's will and the effect of the sale. It was explained to the plaintiff that because of the sale of the mother's home, the gift to her of the house failed. Her brothers and sisters indicated to her that they were prepared to themselves, notwithstanding this, buy a house or a unit for her to hold it upon the same terms as were set out in the will. They took her to the unit they had in mind, which is not far from Phillip's house, which meant that he could help her and do things like mow the lawns and other matters like that. She had a look at it, was quite happy with it and said that she would like that.
There was then prepared a deed which in effect gave her the same right she would have had under the provisions in the will. She executed that after having independent advice from another solicitor, not the one she had first seen about making a claim. That deed contained a number of paragraphs. The important one is clause 3, which dealt with the distribution of the estate. That is in these terms:
"3. DISTRIBUTION OF THE ESTATE
3.1 The parties agree that the Estate shall be dealt with in the following manner:
(a) The Executors will purchase a property at xxxx xxxxxxxxx xxxxx, Green Point, 2251 ("the Property");
(b) The Executors will hold that Property and deal with it in accordance with clause 4 of the Will, so that:
(i) Robyn will be entitled to personally reside in the Property as long as she wishes for life, provided that she pays the rates, taxes and insurance premiums on the Property and keeps it in repair to the Executors' satisfaction;
(ii) The Executors and Robyn will also be bound by clauses 4.2, 4.3, 4.4 and 4.5 of the Will, which shall apply mutatis mutandis to the Property, so that if Robyn dies or ceases to live permanently in the Property, or in any residence provided in substitution for the Property, then the Property or the residence provided in substitution shall form part of the residue of the Estate of Betty;
(c) The remainder of the money left in the Estate after the purchase of the Property (and payment of all costs associated with the purchase of that Property and all other expenses and debts of the Estate) will be distributed in quarter shares to each of the Executors and Robyn, except that the Executors will use Robyn's share to set up a fund for Robyn's benefit on the same terms as those contained in clause 5(b) of the Will so that, on the death of Robyn, any balance of the Fund shall form part of the residue of the Estate of Betty."
It can be seen from clause 3.1(b)(ii) that a number of clauses from the will were incorporated so that one can see the effect of the deed. The relevant clauses in the will which are in clauses 4.1 to 4.5 are as follows:
"4.1 My daughter ROBYN MELBA SNODGRASS "Robyn" may personally reside in the house as long as she wishes for life, provided that she pays the rates, taxes and insurance premiums on the property and keeps it in repair to my Executors' satisfaction.
4.2 The house may be sold by my Executors if Robyn has ceased to live in the house permanently or has failed to comply with the conditions of right of occupation, or they form the view that a different style of accommodation should be provided.
4.3 In the circumstances set out in 4.2, my Executors in their absolute discretion shall sell the house (or a residence or property substituted under this clause) and buy another residence or an interest in or right to accommodation, whether freehold, leasehold, contractual, licence, right of occupation, right to residential care or otherwise, to be held for the benefit of Robyn on the same provisions as those expressed in this clause.
4.4 In the case of a sale under this clause:
(i) My Executors may only use a maximum of the proceeds of sale of the house to acquire any substituted property (including any acquisition cost); and
(ii) If there is any amount remaining from the proceeds of sale of the house after acquisition of any substituted property, such amount shall form part of the trust created under Clause 5(b) herein.
4.5 When Robyn dies or ceases to live permanently in the house, or in any residence provided in substitution for the house, then the house or the residence provided in substitution shall form part of the residue of my estate."
In October the property was purchased at xxxxxxxxx xxxxx, Green Point. Also in that month the plaintiff sought further legal advice. Finally, on 25 November 2011 she instructed him to commence the proceedings. Effectively, she repudiated the deed but that repudiation was not accepted. She never moved into the property.
On 28 November 2011 the solicitor sent a summons to their Sydney agents to file, but it went astray. Eventually the present summons was filed on 20 December 2011.
Extension of time
The plaintiff's application is out of time by about four months.
Section 58 of the Succession Act 2006 provides for an extension of time in the following terms:
"58 When an application may be made
(cf FPA 16(1)(b) and 17)
(1) An application for a family provision order may be made whether or not administration of the estate of the deceased person has been granted.
Note. Administration may be granted for the purposes of an application for a family provision order (see section 91).
(2) An application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown.
(3) An application is taken to be made on the day it is filed in the Court's registry."
This is similar to the terms of s 16 of the Family Provision Act 1982 except for the words "for the application not having been made within that period". The purpose of the deletion was probably to address the difficulties pointed out by Hodgson J in Lewis v Lewis [2001] NSWSC 321.
The principles developed in the cases under the Family Provision Act therefore give useful guidance.
In Re Guskett (deceased) [1947] VLR 212 the following was said:
"It is necessary for the applicant to make out a case that will justify the grant of the indulgence sought. He is to show reasons why his failure to apply within the time allowed should be excused. Every case will have to be dealt with on its own facts but it would seem necessary for the applicant to satisfy the Court that the circumstances are such as to make it unjust for him to be penalised for being out of time. As moreover he is seeking an indulgence he should apply promptly for an extension of time."
Young J in several cases has dealt with the principles governing application to extend time under this Act. In Massie v Laundy (NSWSC, 7 February 1986, unreported), he indicated that when looking at "sufficient cause" under 16(3) of the Act the factors which one looks at include the following:
(a) Is the reason for making a late claim sufficient?
(b) Would the beneficiaries under the will be unacceptably prejudiced if the time were extended?
(c) Has there been any unconscionable conduct on either side which would enter into the equation?
Apparently he also accepts a view which was expressed by Needham J in Fancett v Ware (NSWSC, 3 June 1986, unreported) that there is no purpose in extending the time with respect to a claim which must fail. In Phillips v Quinton (NSWSC, 31 March 1988, unreported) Powell J, when considering the matter at the substantive hearing, leant to the view that a plaintiff seeking an extension of time under the Testators Family Maintenance and Guardianship of Infants Act 1916 must now demonstrate not merely a reasonable prospect but at least a strong probability of obtaining substantive relief. That view was not accepted by Hodgson J in Basto v Basto (NSWSC, 8 September 1989, unreported).
In De Winter v Johnstone, a decision of the Court of Appeal on 23 August 1995, Powell JA referred to this matter and in particular the fact that nowadays the application for extension of time is invariably dealt with at the time of the application for substantive relief. He said at page 23:
"In such a case, so it seems to me no extension of time ought to be granted unless it be established (inter alia) that the applicant for an extension of time would, in the event of that extension being granted, be entitled to an order for substantive relief."
Sheller JA considered that it was only necessary to show that the application was not bound to fail. Cole JA seems to have adopted the parties' approach of looking at the strength of the plaintiff's case.
The case of De Winter v Johnston is also useful in that Sheller JA commented on the meaning of "unconscionable". He was dealing with an appeal from Master McLaughlin and he referred to the Master's comments to the following effect at 11:
"Unconscionable conduct in this context, of course, relates to such matters as whether the plaintiff has made an informed decision not to make a claim against the estate and has then decided, after the limitation period has expired, to make such a claim on account of some change in her financial and material circumstances which has occurred after the expiry of the limitation period."
With regard to the Master's comments, his Honour observed:
"...With all respect I would not have thought this to have been unconscionable conduct. No doubt it depends on the circumstances. However the concept of unconscionable conduct is here directed towards a deliberate holding off designed to lull the beneficiaries into a false sense of security. There is nothing to suggest anything of that sort in the present case."
I turn to the explanation for the delay.
The plaintiff first consulted her solicitor on 14 September 2010. He sought a copy of the will, which was supplied on 27 October that year. She discussed it with him on 3 and 11 November 2010. At the later meeting he informed her that there was a time limit, but the plaintiff says that she cannot now remember specifically what was the advice. It would seem very likely that he would have told her of the limited time - namely, 12 months from the date of death - for making the claim.
There was further correspondence and then she had appointments with her solicitor on 21 February and 30 May 2011. She did not keep those appointments.
There was then the discussions about the deed and it was signed on 29 August 2011 when she received independent advice from another solicitor.
After the deed there was a letter of 16 September 2011 from the defendants' solicitor to the plaintiff setting out some conditions which the defendants wanted. Basically they were to allow them to inspect and see if the premises were unsafe due to the plaintiff's propensity to hoard items. The plaintiff balked at these conditions. She did not move into the premises and saw her solicitor to give instructions on 14 October 2011. She was told that she was out of time. After some correspondence she instructed solicitors on 25 November 2011 to commence proceedings.
As I have mentioned, a few days later a summons was sent but it was lost, and another one was filed on 20 December 2011.
The explanation is not very satisfactory. She knew there was a time limit before it expired. She instead chose to go down the path of the deed and allow the property to be bought for her. She then simply changed her mind when the defendant tried to take appropriate steps to prevent her excessive hoarding in the property for which they thought they might be responsible.
A more important point is prejudice. The plaintiff was carefully consulted on the proposed purchase and deed. The purchase proceeded with all its costs, such as stamp duty and legal fees. This could have been avoided if she had maintained her present position.
Before deciding this matter I will consider her chances of success.
Eligibility
The plaintiff, being a daughter of the deceased, is an eligible person.
In applications under the Family Provision Act, the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two-stage approach that a court must take. These comments were equally applicable to claims under the Succession Act. At page 209 it said the following:
"The first question is, was the provision (if any) made for the applicant 'inadequate for [his or her] proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Ltd. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder, where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."
However, as a result of Andrew v Andrew [2012] NSWCA 308, the situation is somewhat different. In that case, Barrett JA said that the two-stage approach adopted under the Family Provision Act still applied to claims under the Succession Act. Basten JA held that a two-stage approach was not necessary. The President thought it was an analytical question of little consequence. In the circumstances of this uncertainly, I will consider it on both bases.
The plaintiff's situation in life
The plaintiff is 50 years of age, single with no dependants.
She does not work and has no prospect of working in the future. She has a secure pension income of $1,888 per month. This is all consumed by her expenses, which include her rent of $1,105 per month.
Her assets consist of furniture and personal belongings worth $5,000, a DVD and CD collection worth $5,000, shareholdings of $1,350 and some small savings.
Recently she cashed in her superannuation of $8,960. That has been spent and she can recall only part of her expenditure of it. She still owes $3,000 on a credit card.
Her health is not good. In particular, she is nearly blind and is regarded so by the pension authorities. She describes her condition in these terms, which have been confirmed by her doctor:
"I suffer from the following disabilities and/or conditions:
i. Sever visual impairment - after correction, the sight in my right eye is 6/18 and in my left eye is 6/60
ii. I was born with a congenital heart defect (a hole in the heart) and required major surgery as a baby. I have had further heart surgery to repair my aorta in approximately 1998 and my medical practitioner has advised me that I am likely to require further heart surgery in a few years time.
iii. I was born with a congenital defect known as Haemangioma which is a form of cancer which affected my head and neck and in particular it has caused facial disfigurement. I had significant birth marks on my face for which I underwent radiation therapy as a baby and I have had six separate cosmetic surgery operations to repair the damage. At one stage, part of my nose dropped off. I was four years old at the time. Another consequence of the radiation therapy was damage to my teeth and my adult teeth did not grow properly. I believe the radiation therapy led to the thyroid problems.
iv. I was diagnosed with an enlarged Thyroid and I underwent surgery to remove in 1999 to remove my Thyroid.
v. Asthma which I have suffered from childhood
vi. Migraine headaches which I have suffered since approximately 1980
vii. High Blood Pressure which was diagnosed in 1998
viii. I fractured my right foot in 2001 and I am left with residual pain, stiffness and some loss of mobility
ix. Arthritis in my hips and knees which have been of relatively recent onset.
x. Gastric Ulcers which have been present since about 1997 and for which I take daily medication.
xi. I have a significant facial deformity as a consequence of the Haemangioma. My skin has no elasticity and is extremely sensitive to touch. My facial skin is so sensitive that even having a shower causes discomfort.
xii. As a result of my physical ailments, I had a very disrupted childhood and my education and schooling was badly affected - I had few friends. I was often taunted cruelly by other children and I have always been self conscious about my appearance. I became introverted."
She had a good relationship with her mother and cared for her towards the end of her life. She did not contribute to the estate of the deceased.
It is also necessary of course to consider the situation in life of others having a claim on the bounty of the deceased. These are the three defendants.
The situation in life of Phillip Snodgrass
Phillip is 54 years of age, married, with three children who are just about to be married.
Phillip works as a company manager and his wife as a prekindergarten teacher's aide. Their combined salaries are $94,700 per annum, which is all used in their expenses, which include of course substantial mortgage repayments.
Although they own their own house worth $470,000, they have substantial liabilities of $423,000. They also have a car, furniture and superannuation worth $88,000.
Although Phillips' health is good, his wife's is not and she may need surgery for a heart condition shortly. He, like his other siblings, had a good relationship with the deceased. He did not contribute to the estate.
Their house is 26 years old and they need to spend $42,600 on urgent repairs and renovations. Without something from the estate, they will not be able to afford these items.
The situation in life of Richard Snodgrass
Richard is 62 and married. In the past, he worked as a business manager but he has been unemployed since June 2010 and cannot find any further employment.
They are dependent on his wife's income as a teacher of $1,247 per week. They own a home worth $550,000 and an investment unit worth $185,000. They have debts of $316,000 on the homes. Other assets include two cars, modest savings and superannuation of $255,000.
Richard has a number of health issues, including a precancerous condition in his palate, reflux, osteoarthritis, scoliosis and a dental problem. He cannot afford to have his teeth fixed.
His wife has a number of health issues, including a heart valve problem, hypertension, hyperlipidemia, reflux, arthritis and glaucoma. As I have mentioned, he had a good relationship with his mother and did not contribute to the estate.
The situation in life of Lynette Margaret Danby
Lynette is 60 years of age and married. They are both retired and own their own home debt-free.
They live on an allocated pension of $3,362 per month. This just covers their expenses and they live a very modest lifestyle.
Lynette suffers from arthritis but her husband is in good health.
They have some things needed to be done to the home which they cannot afford as they would cost $21,500.
She also had a good relationship with her mother and did not contribute to the estate.
Discussion
It is necessary to see how Robyn says she has been left without adequate and proper provision for her maintenance, education and advancement in life.
She submits to the Court that she should have the unit purchased by the estate and her share of the rest of the estate absolutely.
It is useful to see why the deceased made her will in the terms to which I have referred. Shortly before her death, the deceased told Phillip Snodgrass:
"I don't think that Robyn can handle looking after a home and the ongoing expenses of looking after it. I'm worried about her hoarding and the possibility that it might get out of hand. I want the rest of you to help."
She also said a number of things to Richard:
"I want to set up some sort of trust arrangement for Robyn with the rest of you as trustees because I am worried she will quickly spend any cash money left to her."
"I am worried that when I go Robyn will spend any money I leave her and will clutter up her property with rubbish."
"You and your brother and sister have to look after Robyn as best you can."
It is plain that the plaintiff does have a problem with hoarding. The photographs of her home, although containing some things just moved there from her mother's home, plainly show this aspect of her personality.
Given the closeness of the plaintiff and her mother, it seems likely that the deceased had a good reason for making the comment she did and for making the provisions that she did provide in her will for Robyn.
Given the cross-examination on the expenditure of the money Robyn withdrew from her superannuation, it seems likely that her mother's fears about her spending any cash money left to her were quite justified.
There is also evidence given by Phillip about the way he had to give advice to Robyn about overdue debts for some house accounts and how she was paying things by instalments. Apparently, she had her telephone cut off on various occasions.
Robyn's claim has to be seen in the context of the other claims on the deceased's bounty. Her three siblings are all in difficult situations, with little chance of improving their lot in life. They also have some serious health issues. It should be noted that we are dealing with a claim by a child of the deceased.
In McGrath v Eves [2005] NSWSC 1006, Gzell J referred to the Court's approach to the question of moral duty when considering claims by children to be provided with funds for a house. He said:
"67 When it comes to children, as Young J observed in Shearer v The Public Trustee, NSWSC, unreported, 23 March 1998, it has never been said by any court that the community expects a mother to leave her children in a position to have a house of their own. That observation applies equally to a father. And in Gorton v Parks (1989) 17 NSWLR 1 at 7, Bryson J pointed out that there is no special principle that able-bodied adults earning a living have no claim, his Honour pointing out that such a proposition in relation to resources of any size was quite erroneous.
68 In Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419 at [109]-[110], White J, having referred to this passage, went on to observe that there was no rule to the effect that proper provision for an adult and presently able-bodied child did not extend to providing him or her with a house or money to buy one. His Honour noted that instances in which this had occurred included Re Buckland, deceased [1966] VR 404 and Ogden v Green [2003] NSWCA 352.
69 White J's decision was upheld by the Court of Appeal in Lloyd-Williams v Mayfield [2005] NSWCA 189. In the course of his judgment, Bryson JA at [31] pointed out that there were features to the case that were rarely encountered in claims under the Family Provision Act 1982 and rarely encountered together. First, the value of the shares designated as notional estate was very large in comparison with the estates ordinarily encountered. Secondly, because the appellant was otherwise amply provided for, the further provision ordered by White J could have no adverse effect on her wellbeing. Thirdly, the applicant did not have any needs in terms of lack of present provision for necessities and amenities of life on an ordinary scale of needs as understood in the community generally.
70 It was submitted that Mayfield was distinguishable by the absence of these features in the instant circumstances and because the appellant in Mayfield had filed no financial evidence and put forward no competing financial or other needs for the Court to consider.
71 There are differences of fact between Mayfield and the present case. But they do not affect the central proposition that there is no rule to the effect that proper provision for an adult and presently able-bodied child does not extend to providing him or her with a house or money to buy one. That proposition was not criticised by the Court of Appeal. Indeed, at [32], Bryson JA observed that it was open to White J and altogether appropriate to look well beyond needs when interpreting and applying community standards to decide what provision the court ought to order."
Recently, the Court of Appeal returned to the subject in Fung v Ye [2007] NSWCA 115, where Young CJ (with whom Tobias and Bell JJA agreed) said:
"25 Returning to the present case, I must say that Gzell J's statement at [31] that '...there is no rule to the effect that proper provision for an adult and presently able-bodied child does not extend to providing him or her with a house or money to buy one' may give rise to unreasonable expectations by future claimants. The statement is correct as far as it goes, but the statement would also be correct that in very many cases it will not be appropriate to provide a house, or money to buy one, to an able-bodied adult child. In each case one needs to consider the basic human right of freedom of testation of the deceased, the relationship between the plaintiff and the deceased, the size of the estate and the other claimants. I would venture to say that probably in the majority of cases the evaluation of that equation will not result in an able-bodied child being 'entitled' to a house or money to buy one."
Certainly, because of Robyn's disabilities, she has a substantial claim on the estate. Providing her with access to a house would give her additional income of about $200 per week as she will no longer need to rent premises.
The question of what is an appropriate provision, and whether a life estate should be awarded to persons in the situation of either a widow or a longstanding de facto partner, has been dealt with in a number of cases. Although we are here concerned with a claim by a child, the cases offer some guidance so I will refer to them.
In the 1970s and 1980s there were a number of decisions of single judges of this Court where they have held that a life interest with particular attributes was appropriate. (See, for instance, Crisp v Burns Philp Trustee Co Ltd (NSWSC, Holland J, 18 December 1979, unreported); Banks v Hourigan (NSWSC, Waddell CJ in Eq, 2 March 1989, unreported); Cameron v Hills (NSWSC, Needham J, 26 October 1989, unreported).) This perhaps is reflected in matters mentioned by the High Court in White v Barron (1980) 144 CLR 431 where at p 444 Mason J said:
"A capital provision should only be awarded to a widow when it appears that this is the fairest means of securing her proper maintenance. However, the provision of a large capital sum for a widow who is not young may, in the event of her early death, result in a substantial benefit to her relatives, contrary to the wishes of the testator, when a benefit of another kind would have afforded an adequate safeguard to her personally, without leaving her in a position in which she could benefit her relatives from the proceeds of the legacy."
He appears to be the only member of the Court to have adverted to this aspect.
A change in the High Court's attitude to the provision for widows, no doubt in response to changes in community expectations, is illustrated by the fact that in this case it disapproved of observations made in Worladge v Doddridge (1957) 97 CLR 1 that as a general rule an order for provision in favour of a widow should be confined to widowhood. Stephen J, who was one of the majority in White v Baron, at pp 438-440 went to some lengths to point out that the jurisdiction was one which should not be unduly confined by judge-made rules of purportedly general application.
In Elliott v Elliott (NSWCA, 24 April 1986, unreported), Glass JA said in reference to the above quoted statement at 9:
"The statement there made was in an evidentiary context where the provision was made at the expense of the children of a previous marriage who had some claim on the testamentary bounty of the deceased. The residuary beneficiaries here have none and it seems to me that no fairness is owed to them."
McHugh JA agreed with his judgment and the President agreed substantially with the reasons given by Glass JA. He added nothing on this aspect. I do not think that it can be said that the Court of Appeal has adopted the statement of Mason J in White v Barron. All that can be said is that they distinguished the situation before them.
By the late 1980s the judges in this Division were taking a slightly different view. For instance, in Court v Hunt (NSWSC, 14 September 1987, unreported) Young J said at 2:
"Old age is a growing problem in our community and judges who sit in Family Provision Act applications get experience, as well as their own experience in the community, as to what happens when people reach the age when they can no longer look after themselves and one judges the evidence in these sorts of proceedings against that background knowledge."
His Honour then went on to talk about the assumptions one could make about the fact that frequently people, once they pass 55, had to change their accommodation and locate themselves either in retirement villages or nursing homes, which have different requirements for capital contribution.
After talking about the evidence necessary, his Honour went on to say at 3:
"In many cases these days a life estate will not be sufficient because it does not cover the situation of the plaintiff moving from her own home to retirement village to nursing home to hospital. Sometimes it is possible for a Court to alter a life estate to a more flexible noncapital provision, such as was done by Holland J in Crisp v Burns Philp Trustee Co Ltd, 18 December 1979, unreported, but noted in Mason & Handler Probate Service at page 13206. Other times the proper provision is for a fee simple gift, realising that this property will be sold and will be turned over into the appropriate property to maintain the widow for the rest of her life. Care also has to be given by those administering the plaintiff's property to ensure that there is sufficient income being raised after tax that will provide for maintenance levies and the other payments that have had to be made by the widow."
More recently the Court of Appeal on a number of occasions has referred to this problem. In Golosky & Anor v Golosky [1993] NSWCA 111, Kirby P summarised the proper provision for widows in the following terms:
"2. In testing the Master's decision it is appropriate to keep in mind the principles which governed the approach which he was obliged to take to the widow's application under the Act. Relevantly, these included:
(a) Proper respect was to be paid for the right of testamentary disposition which is the fundamental premise upon which the provisions of the Act are based. That premise requires the Court, out of respect for the continuing right of testamentary disposition, to limit its disturbance of the testator's will to that which is necessary to achieve the purposes of the Act, and not more. See The Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9, 19; White v Barron and Anor, above, 458; Hunter, above, 576;
(b) The purpose of the jurisdiction is not the correction of the hurt feelings or sense of wrong of the competing claimants upon the estate of the testator. The Court is obliged simply to respond to the application of the eligible person who was a member of the testator's household and to consider whether, as claimed, the provision made by the will is inadequate for that person's proper maintenance and advancement in life. See Heyward v Fisher, Court of Appeal, unreported, 26 April 1985; (1985) NSWJB 81.
(c) Consideration of other cases must be conducted with circumspection because of the inescapable detail of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had been said that in the absence of special circumstances, it will normally be the duty of a testator to ensure that a spouse (or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to. To the extent that the assets available to the deceased will permit such a course, it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies; see Luciano (above) 69 to 70;
(d) A mere right of residence will usually be an unsatisfactory method of providing for a spouse's accommodation to fulfil the foregoing normal presupposition. This is because a spouse may be compelled by sickness, age, urgent supervening necessity or otherwise, with good reason, to leave the residence. The spouse provided for will then be left without the kind of protection which is normally expected will be provided by a testator who is both wise and just. See Moore v Moore, Court of Appeal, unreported, 16 May 1984, per Hutley JA, 2;
(e) Considering what is 'proper' and by inference what is 'improper' as a provision in a will, it is appropriate to take into account all of the circumstances of the case including such matters as the nature and quality of the relationship between the testator and the claimant; the character and conduct of the claimant; the present and reasonably anticipated future needs of the claimant; the size and nature of the estate and of any relevant dispositions which may have reduced the estate available for distribution according to the will; the nature and relative strengths of the competing claims of testamentary recognition; and any contributions of the claimant to the property or to the welfare of the deceased. See Re Fulop Deceased (1987) 8 NSWLR 679 (SC); Churton v Christian and Ors (1988) 13 NSWLR 241 (CA), 252."
In talking of the need to provide a house and a sum for contingencies, Kirby P is clearly referring to passages in Luciano v Rosenblum (1985) 2 NSWLR 65. In the judgment of Powell J at first instance in Elliott v Elliott (NSWSC, 18 May 1984, unreported), his Honour said that such a type of provision only applies where it can be said there has been a long and happy marriage and a widow has helped build up the estate of the deceased. This seems to have been generally adopted over the years in many subsequent cases.
In Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24 at 47, Sheller JA had the following to say:
"Once it is accepted that adequate provision for her proper maintenance and advancement in life required secure accommodation for life as well as a capital sum to meet exigencies, this need is not met by giving her only a life estate in the home unit. Commonly people in the community need to move from their own home into a unit in a retirement village and then into nursing accommodation and then into total care accommodation: see per Young J in Christie v Christie. The need can be met if the respondent is given the home unit absolutely. She then has greater flexibility as well as greater security."
In Salmon v Blackford [1997] NSWCA 274, the Court of Appeal was dealing with the case where the trial judge had given a fee simple to the deceased's widow. Sheller JA said:
"The principal point according to Mr Gibb was that his Honour failed to take into account that by reason of the widow's advanced years and the probability that her adopted son would be the natural object of her bounty, the effect of the order made was likely to be that the adopted son, whom the deceased had no intention to benefit, would be the beneficiary of half the estate. I have great difficulty in seeing how a submission of this sort has any weight in the circumstances of this case.
The matter that this Court must consider is whether the order that his Honour made was in such terms that one could only come to the conclusion that in some way his discretion must have miscarried. It is well established that proper provision is not to be measured solely by the need for maintenance. It should, in the case of this respondent and in the circumstances of this case, free her mind from any reasonable fear of any insufficiency as her age increases and her health and strength fails. I may say in this regard that her life expectancy, according to the tables, was something over eleven years at the time of the hearing. If one comes to the conclusion that for her proper maintenance an order such as the present is appropriate, it seems to me to matter not at all that she has an adopted son of an earlier marriage and that he may be the ultimate beneficiary of her bounty."
No reference was made in either of these cases to the comments of Mason J in White v Barron. In Permanent Trustee v Fraser there were no competing claims by children of the first marriage. In Salmon v Blackford there were children of the first marriage but they appeared well off and their claims were thus minor.
The caveat to be placed on these cases is that they concern the situation of a widow or widower. We are here dealing with a child whose claim is of quite a different order.
In this case, considerations of the plaintiff's ability to handle money and a large asset is very important. Her brothers and sisters are quite sympathetic to her physical disabilities and wish to follow their mother's wishes to look after Robyn. In my view, they are well able to do so and it will be for Robyn's benefit to have them manage the house or any substituted house for Robyn.
The other matter of importance is Robyn's difficulties in managing money. This indicates that the separate sum set aside to provide for rates and taxes should not be available for inappropriate discretionary spending. The powers are sufficiently wide to cover real emergencies if they do arise and the trustees can make provision outward for them.
The form of what was agreed to in the deed is comprehensive and covers the case, if it arises, of Robyn having to move into residential care.
Robyn is of course younger than her siblings and would have a greater life expectancy. This may mean that any remainder interest could pass to the defendants' children. Whilst I acknowledge this problem, I think that the other considerations I have mentioned lead me to the view that a properly managed life interest is preferable to outright ownership by Robyn.
The question of hoarding is more a management issue. If Robyn continues to hoard, appropriate authorities - be it the council, the health department or the owners corporation - have powers to deal with any public safety or health issues caused by excessive hoarding if that in fact does happen.
In my view, the deceased made the appropriate provision for the plaintiff at the time of her will. The defendants have generously renewed that provision to cope with the failure of the original gift. This has all been done by the defendants to their own personal financial detriment.
Having regard to the deed, which still stands and governs the distribution of the estate, the evidence and the other matters I have discussed, I am of the view that the plaintiff has not been left without adequate and proper provision for her maintenance, education and advancement in life.
Accordingly, I dismiss the summons. I order that the defendants' costs on an indemnity basis be paid or retained out of the estate of the deceased. I make no order for the costs of the plaintiff, to the intent that she shall bear her own costs.
The exhibits can be returned subject to the solicitors' undertaking to keep them for any appeal period.
oOo
Decision last updated: 02 November 2012
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