Spry v McKenzie
[2019] NTSC 25
•17 April 2019
CITATION:Spry v McKenzie & Anor [2019] NTSC 25
PARTIES:SPRY, Anne Margery
v
MCKENZIE, Katrina Jane and BURKE, Jessica Ann (as Executors of the Will of James Taylor Lindsay, deceased)
TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: SUPREME COURT exercising Territory jurisdiction
FILE NO:101 of 2017 (21752453)
DELIVERED: 17 April 2019
HEARING DATES: 10 and 11 October 2018; final submissions filed 22 October 2018
JUDGMENT OF: Barr J
CATCHWORDS:
SUCCESSION – Family provision – application by de facto spouse of testator – 68 year old female plaintiff – asserts adequate provision not available under the will of the deceased for her proper maintenance, education and advancement in life – plaintiff given right to reside in home previously jointly owned with deceased “as long as she wishes” – plaintiff has significant income stream from reversionary pensions and her own superannuation fund pension – home in rural area likely to become unsuitable in future given plaintiff’s age and health – plaintiff seeks provision for the cost of purchase of a suitable replacement home and a contingency fund – plaintiff failed to establish that adequate provision was not available under will of deceased – claim dismissed.
Family Provision Act 1970 (NT) s 7(1)(a), s 8(1)
Coates v National Trustee Executors and Agency Co Ltd (1956) 95 CLR 494; McCosker v McCosker (1957) 97 CLR 566; Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; Cooper v Dungan (1976) 9 ALR 93; White v Barron(1980) 144 CLR 431; Goodman v Windeyer (1980) 144 CLR 490; Singer v Berghouse (1994) 181 CLR 201; Vigolo v Bostin (2005) 221 CLR 191, applied
REPRESENTATION:
Counsel:
Plaintiff: R Williams
Defendants:S Chapple
Solicitors:
Plaintiff:Darwin Family Law
Defendants:Maleys Barristers & Solicitors
Judgment category classification: B
Judgment ID Number: Bar1904
Number of pages: 30
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINSpry v McKenzie & Anor [2019] NTSC 25
No. 101 of 2017 (21752453)
BETWEEN:
ANNE MARGERY SPRY
Plaintiff
AND:
KATRINA JANE MCKENZIE and JESSICA ANN BURKE (as Executors of the Will of James Taylor Lindsay, deceased)
Defendants
CORAM: BARR J
REASONS FOR JUDGMENT
(Delivered 17 April 2019)
Introduction
The plaintiff has commenced proceedings by originating motion seeking an order pursuant to s 8 of the Family Provision Act 1970 for adequate provision for her proper maintenance, education and advancement in life out of the estate of James Taylor Lindsay, deceased.
The deceased was born on 19 November 1955. He died on 15 September 2017 at the age of 61, two months short of turning 62.
The plaintiff was born on 15 September 1949. She was 68 years old at the date of the deceased’s death.
The plaintiff and the deceased met in March 1993 and commenced a de facto relationship in or about July 1993. The plaintiff was then almost 44 years old; the deceased was 37. The plaintiff had been divorced since 1989 and had three children from her marriage, aged in their mid to late teens. The deceased was married but had been separated from his wife for about three years. He had two daughters: Katrina Jane and Jessica Ann, who were then aged 10 and 7 respectively. (They are the defendants in this proceeding).
The plaintiff and the deceased did not have any children together.
When the parties commenced their de facto relationship, the plaintiff was studying part-time to be a teacher and was working as a teacher’s aide at Moulden School. The deceased had been a police officer for more than 10 years and continued to serve as a police officer until he retired in October 2010. In late 1993 or early 1994, the deceased was transferred to the Adelaide River Police Station, and subsequently (in or about 1997) he was transferred to Yuendumu, in Central Australia. Notwithstanding the geographical separation, the plaintiff and the deceased continued their relationship, and the plaintiff used to visit the deceased in the communities where the deceased was posted. In 1998, the plaintiff took three months leave without pay from her teaching position and worked at the community school in Yuendumu.
In 1999 or thereabouts, the deceased returned to Darwin and lived with the Plaintiff at her home in Driver, until February 2002. They then jointly purchased a home on five acres at 71 Fisher Road Virginia. The plaintiff and the deceased purchased as tenants in common in equal shares. The transfer consideration was $215,000, but the couple borrowed $225,000 from the National Australia Bank to complete the purchase. The loan was then repaid over the next 10 to 12 years by fortnightly payments, and by some lump sum reduction payments from time to time.
Although the deceased earned more than the plaintiff throughout their relationship, each of them made substantial financial and non-financial contributions, and undertook various improvements to the Virginia property. The property remained their home to the time of the deceased’s death, and the plaintiff continues to live there. The plaintiff’s income was generally used to purchase food, to pay some of the bills, to make contributions to holidays and contributing (to some extent) to the maintenance and improvement of the Virginia property.
The deceased retired in October 2010, aged 54. The plaintiff continued in her employment as a teacher, although she scaled back to working four days a week. She ceased full time work in 2011, but continued doing relief work until early 2017, ultimately working one or two days a week.
In February 2016. the deceased was diagnosed with metastatic prostate cancer, for which he undertook chemotherapy. In March 2016, he underwent surgery followed by further chemotherapy which commenced in July 2016. From that point, the deceased had difficulty coping with the heat in Darwin and had reduced energy levels. The plaintiff took over much of the outdoor work at the Virginia property, in addition to her usual household chores. Although the deceased was very independent, he needed more care at that time and the plaintiff provided the care needed.
From September or October 2016, to the time of his death in September 2017, the deceased spent increasing periods of time in New South Wales, where his daughters were living, in order to escape the Top End heat between cycles of chemotherapy, and no doubt also to spend time with his daughters and their families.
A close friend of the deceased, Raymond McCasker, provided affidavit evidence as follows:
As the seriousness of Jim’s condition became such that he started chemo, he spoke to me about his grandchildren and how he [wanted] to be more a part of their life. Jim made extra trips to see them in between his chemo. He also repeatedly complained about the chemo and the heat, saying “This heat is killing me” and “I find this heat really hard to handle now that I’m on chemo”.[1]
Because the deceased suffered a loss of energy, the outdoor tasks on the Virginia property became increasingly difficult. The plaintiff by then had assumed responsibility for all of the garden chores: picking up palm fronds, taking garden refuse to the tip, maintaining the irrigation system and mowing lawns. This was in addition to her domestic duties such as cooking, cleaning and clothes washing.
Notwithstanding the support and assistance the plaintiff provided, the deceased was frequently critical of the way she did things, whether in relation to the timing of meals, or her cooking, or her interrupting his ‘peace and quiet’ by engaging him in conversation. By mid-2016, the plaintiff had developed health problems of her own, feeling stressed, depressed and anxious. She began to see a counsellor to assist her to cope with the relationship stress.
In December 2016, the plaintiff and the deceased drove to NSW in a new Ford Ranger vehicle. They travelled via Port Germein, in South Australia, where the deceased owned a small property, and where a caravan was stored. They then drove from Port Germein to New South Wales where they traded in their old caravan for a larger and more comfortable Jayco caravan. They spent Christmas 2016 with the deceased’s daughters and grandchildren in Aberglasslyn, just outside Maitland.
From January 2017 onwards, the deceased alternated between living in the caravan in Aberglasslyn and staying at a caravan park at Port Stephens.
By February 2017, the deceased’s cancer had metastasized to his liver and had reached the terminal stage. He returned to Darwin in mid-February for about four days and in mid-March for about four days, but found the heat increasingly oppressive and difficult to cope with, He was exhausted, and frustrated by his inability to exercise or work in the garden.[2]
The deceased’s treatment was taken over by the Mater Hospital in Newcastle, and that continued until his death in September 2017. The plaintiff visited him on two separate occasions, and otherwise the parties kept in touch by telephone or by text messaging. At one stage, the deceased flew from Newcastle to Cairns to spend a few days with the plaintiff, who was staying with her daughter in Cairns for a short time. The deceased visited Darwin for the last time in late June 2017, for six days.
In early August 2017, the plaintiff travelled to the Newcastle area, where she spent the last four weeks of the deceased’s life with him. For the first week, the parties stayed together at a holiday house in Newcastle and then in the caravan at a caravan park. During this time, the plaintiff and the deceased’s daughters worked together to provide physical and emotional support for the dying man. The deceased had refused the advice of the Mater Hospital palliative care team that he should go into palliative care.
The deceased executed his last will on 13 September 2017.[3]
In the early morning of 14 September 2017, after the deceased’s condition deteriorated significantly, the plaintiff took him to the Emergency Department of the Newcastle Hospital, where he was admitted to the palliative care hospice. He died less than two days later.
The plaintiff experienced difficulties in her relationship with the deceased, starting from the time of his retirement, as he became more intolerant and critical of her, of her family and even of mutual friends. He was a very heavy drinker and would drink every day, generally starting at about 3pm. When affected by alcohol, he would often become “picky and nasty” to the plaintiff and make negative comments to her about her family members and friends. The evidence of Raymond McCasker was that the deceased could be stubborn and difficult, and “very tight with his money”, for example, strongly resisting the practical suggestion that he and the plaintiff put whirlybirds in the roof of their house to eliminate hot air from the ceiling space.
Plaintiff the de facto partner of the deceased
A de facto relationship is a “marriage-like relationship” between parties who are not married.[4] When a court is called upon to determine whether two persons are in a de facto relationship, all of the circumstances of their relationship must be taken into account, including a number of matters specified in the legislation.[5]
Having regard to all of the relevant criteria, including the existence of a sexual relationship between the plaintiff and the deceased from mid-1993 up to approximately May 2016; the financial dependence or interdependence of the plaintiff and the deceased; their acquisition and maintenance of a jointly owned property as their home; their mutual commitment to a shared life; and the perception of those close to them that they were a couple, I am satisfied that the plaintiff and the deceased were in a de facto relationship from mid-1993 to the date of the deceased’s death in September 2017.
Specifically, I am satisfied that the plaintiff and the deceased remained de-facto partners to the date of the deceased’s death. In reaching this conclusion, I have accepted and relied on the evidence of the plaintiff in her several affidavits; the deceased’s will, made 13 September 2017, in which he referred to the plaintiff as “my partner Anne Margery Spry”,[6] and on the evidence of Raymond McCasker to the effect that even two weeks before his death, the deceased’s relationship with the plaintiff “seemed as normal”. Mr McCasker deposed:
On my last trip down to see Jim, and indeed at all other times, there was never any indication by Jim, Anne or anyone else that Jim had separated from Ann, or intended to separate from her.[7]
I accept the evidence of Mr McCasker that he and the deceased were close and that the deceased confided in him about things that he may not necessarily have told the plaintiff. If the deceased had separated from or was considering separating from the plaintiff, it is likely that he would have told Mr McCasker. I am satisfied that he gave no such indication.
I place no weight on evidence contained in the affidavits of each of the defendants, suggesting a change in the nature of, or a deterioration in the quality of, the relationship between the plaintiff and their father in the final months of the deceased’s life, and the assertion that the deceased “had other female company”.[8] The factual assertions were not proven, and no inference could properly be drawn to the effect that a lengthy de facto relationship had somehow come to an end.
I note in this context that the defendants accept that the plaintiff is eligible to make an application, notwithstanding the allegations referred to in [27].[9] That is not an unconditional concession, because the entitlement of a former de facto partner of a deceased person to apply is subject to the qualification that the former de facto partner must be maintained by the deceased person immediately prior to his or her death. Nonetheless, the consequence of my findings in [24] and [25] is that the plaintiff, as the de facto partner of the deceased, is entitled to make application for provision out of the estate of the deceased, pursuant to s 7 (1)(a) Family Provision Act 1970.
Principles relating to of the plaintiff’s claim for further provision
The Court’s power to make an order for provision out of the deceased’s estate is subject to s 8 (1) of the Act, which provides:
… if the Court is satisfied that adequate provision is not available, under the terms of the will of a deceased person … from the estate of the deceased person for the proper maintenance, education and advancement in life of the person by whom … the application is made, the Court may, in its discretion and having regard to all the circumstances of the case, order that such provision as the Court thinks fit be made out of the estate of the deceased person.
When determining an application made pursuant to s 8 (1), the Court is required to carry out a two-stage process, as explained by the High Court in Singer v Berghouse:[10]
The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased’s estate for the applicant.
The first stage of the inquiry has been referred to as the “jurisdictional question”. It requires examination of relevant circumstances at the date of the testator’s death; however, if the Court reaches the second stage, it must consider the circumstances as they exist at the time of its decision.[11]
As to the first stage, although the assessment in relation to adequacy should have regard, inter alia, 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,[12] the Act does not specify the criteria to be taken into account by the Court in deciding whether the provision made is inadequate for an applicant’s needs, not does it contain any indication as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance, education or advancement in life of an applicant. Nonetheless, the following observations of Dixon CJ in Pontificial Society for the Propagation of Faith v Scales provide useful guidance:[13]
It has often been pointed out that very important words in the statute are “adequate provision for the proper maintenance and support” and that each of these words must be given its value. “Adequate” and “proper” in particular must be considered as words which must always be relative. The “proper” maintenance and support of a son claiming a statutory provision must be relative to his age, sex, condition and mode of life and situation generally. What is “adequate” must be relative not only to his needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and the other demands upon it, and also what the testator regarded as superior claims or preferable dispositions. The words “proper maintenance and support”, although they must be treated as elastic, cannot be pressed beyond their fair meaning. The Court is given not only a discretion as to the nature and amount of the provision it directs but, what is even more important, a discretion as to making a provision at all. All authorities agree that it was never meant that the Court should rewrite the will of the testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator’s decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court.
In McCosker v McCosker (1957), Dixon CJ and Williams J had observed: [14]
… the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator’s ability to meet such claims having regard to the size of his fortune.
The statement by Dixon CJ in Pontificial Society for the Propagation of Faith v Scales, that it was never meant that the Court should rewrite the will of the testator, was reflected in the caution sounded by Stephen J in Cooper v Dungan that:[15]
… in this particular jurisdiction courts must be vigilant in guarding against a natural tendency to reform the testator’s will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant.
In brief summary, in considering the plaintiff’s application under s 8(1) of the Act, this Court must heed the statutory constraint – the need to be satisfied that adequate provision is not available under the deceased’s will for the proper maintenance, education and advancement in life of the plaintiff – and may not simply rewrite the deceased’s will in accordance with its own ideas of fairness and justice. With that in mind, I proceed with the “multi-faceted evaluative judgment” referred to by the New South Wales Court of Appeal in Foley v Ellis.[16]
The defendant contends that adequacy of provision is this case “must be measured against the benchmarks of the plaintiff’s position in life and that of the deceased, the plaintiff’s ability to support herself, the provision actually made in the will, and the way in which that provision may be compared to the balance of the estate and the provision made for the other beneficiaries”.[17] The plaintiff agrees with that approach.[18]
Financial details of the estate
The parties have agreed the following summary of the estate assets and liabilities at the date of trial:
Asset
Value
½ interest in the Virginia property
$372,500.00
Port Germein property
$89,000.00
Unit at 5/2 Timpson Court, Gray NT
$270,000.00
Cash held in Greater Bank and People’s Choice Credit Union
$84,696.62
2012 Jayco Caravan: $25,000 to $29,000, say:
$27,000.00
2012 Toyota Hilux: $15,000 to $16,775, say:
$15,888.00
2016 Ford Ranger: $37,000 to $45,000, say:
$41,000.00
Total
$900,084.62
Liability
Value
Tax liability for FY2017
$25,416.40
Estimate of Capital Gains tax payable on sale of 5/2 Timpson Court, Gray NT
$40,000
Total
$65,416.40
Estimated value of net estate (not including legal costs)
$834,668.22
Under the terms of the deceased’s will, the plaintiff was given a ‘right to reside’ (my shorthand expression) in the house at the Virginia property. I say more about that in [47] below. The plaintiff also received a cash gift of $20,000, the Port Germein property, the Toyota Hilux and the Jayco caravan.
The deceased had taken out a number of insurance policies. On his death, the proceeds of an AMP life insurance policy, $30,866.90, and an MLC policy, $46,168.00, were paid to the estate. The proceeds of other policies were paid directly to beneficiaries and did not become estate assets. The plaintiff received $13,266.00, being the proceeds of a TAL insurance policy, and $40,202.00, being 30 percent of the proceeds of a Real insurance policy. The deceased’s daughters each received 35 percent of the proceeds of the same Real policy, almost $47,000.00 each.
The insurance proceeds received by the plaintiff thus totalled $53,468. The daughters each received $46,903. The estate received a total of $77,034.90, which formed part of the residue.
In or about May 2017, some four months before he died, the deceased had liquidated his share portfolio and given $250,000 to each of his daughters. The parties agree that these amounts must be taken into account.
Whether as a result of a nomination made by the deceased or because she was the de facto partner of the deceased and thereby entitled under the rules of each of the pension funds, the plaintiff is the reversionary beneficiary of the deceased’s CSS pension fund and his NT Police pension fund. Those pensions are indexed. At the date of trial, the plaintiff was receiving approximately $1,400 per fortnight from CSS and $326.00 per fortnight from NT Police,[19] that is, $1,726.00 per fortnight.
The plaintiff also has the benefit of her MLC Allocated Pension. The balance as at 16 March 2018 was $208,639.84.[20] Unlike the CSS and NT Police pensions, the MLC allocated pension is able to be capitalised, that is, the plaintiff could draw down capital amounts. Alternatively, she could draw a regular pension, so that, for example, if she elected to receive a non-indexed pension of $15,000 per annum, the policy would reduce to zero in 17.13 years.[21]
Since it is agreed (or at least not in issue) that the plaintiff’s life expectancy was 16.1 years at the date of trial, it is reasonable to expect that the suggested regular amount of $15,000 per annum will continue for her life. Therefore, based on my calculations, $576.92 per fortnight (rounded to $577) can be added to the $1,726.00 per fortnight received by the plaintiff from the two reversionary pensions referred to in [42], making a total of $2,303.00 per fortnight or $59,878 per annum.
I note also that there is sufficient capital in the MLC Allocated Pension fund for the plaintiff to increase her pension from $15,000 per annum to $18,000 per annum.[22]
The plaintiff’s case that adequate provision is not available
The plaintiff acknowledges that she has a sufficient income stream from her MLC pension and the two reversionary pensions.[23] Her case at trial was focused on the unsuitability of the Virginia property in her declining years.
As mentioned above, the plaintiff and the deceased held the property as tenants in common in equal shares. The plaintiff thus already owned a one half interest in the property in her own right, and under the terms of the will of the deceased, she was given – in respect of his half interest – the right to live in the house and have the use of the household chattels “as long as she wishes”, conditional upon her payment of the rates, taxes and insurance premiums and maintaining the property in good repair. The combination of the plaintiff’s pre-existing legal and equitable interest and the equitable ‘right to reside’ given under the will guarantees that her future occupation of the property cannot be disturbed, for example, by an order for a statutory trust for sale by co-owners pursuant to s 40 of the Law of Property Act 2000 (NT). However, if the plaintiff ceased to reside in the house, she would be vulnerable to the making of such an order. In this respect, the plaintiff’s right to reside is different to an unrestricted life interest: if the plaintiff had been given a life interest, she would not be obliged to live on the property and could rent it or otherwise use it for her benefit.
Counsel for the plaintiff conceded in his opening that the provision made by the deceased, that the plaintiff be able to live in the parties’ home for the rest of her life, should she choose to do so, appears reasonable. However, on the plaintiff’s case, the provision does not take into account that a 68 year old woman, in declining health, might wish to relocate to a less remote locality, closer to necessary services (such as shops, doctors surgery, post office etc.) and that the maintenance and upkeep on a five acre block would be an increasing burden.
The plaintiff has a number of health problems. She has high cholesterol, for which she has been taking medication since 2001. She has a thyroid problem, for which she takes medication. She tore a tendon in her right shoulder in 2015, and suffers ongoing pain as a result. She tore the meniscus in her right knee in 2015 and underwent an arthroscopy in January 2016. The right knee remains painful and the plaintiff has to take care to protect it from twisting. She complains that she can no longer walk long distances and that she has to walk more slowly. The plaintiff injured her neck about 15 years ago, and as a result has restricted mobility and pain from time to time. The plaintiff has arthritis in her feet and hands, and ‘tennis elbow’ in her right elbow. The consequence of these various ailments is that the plaintiff’s ability to participate in gardening and mowing is limited. She performs household tasks more slowly than previously, and often suffers pain afterwards.[24]
The plaintiff’s age and health will make it increasingly difficult for her to maintain the Virginia property by her own efforts and, in my view, those matters properly raise the need for her to move closer to the facilities and services referred to in [48]. I accept that the Virginia Road property is not a suitable long-term home for the plaintiff, and that at some future time she will probably move to a better located, smaller and more manageable home.
My conclusion in [50] does not mean that adequate provision is not available under the terms of the deceased’s will for the proper maintenance, education and advancement in life of the plaintiff. What is “adequate” must be relative not only to the plaintiff’s needs but to her own capacity and resources for meeting them.
Evidence in relation to a replacement home
In her affidavit sworn 30 October 2017, the plaintiff expressed a wish to move out of the rural area into Darwin, ideally to a house which would not be difficult to maintain. The plaintiff at that stage wanted a home with three bedrooms (so that her grandchildren and children could stay with her), with a studio area where she could pursue her artistic endeavours (which she carries on in a shed at the Virginia property). She wished to be within walking or cycling distance of the beach. She anticipated spending $800,000 on a townhouse or house in the suburbs of Nightcliff or Fannie Bay (or similar). However, those aspirations and estimates may not have been realistic.
In March 2018, the plaintiff’s lawyers asked Martin Gore, a Darwin-based valuer, to report on the likely cost of a “new home within the Darwin area” which met the requirements of three bedrooms, single story (for ease of access), small garden, in a suburb “where there is not known to be a high crime rate, or excessive noise”, with reasonable access, by public transport, to the usual facilities required by a retired person (including shops, banking facilities, a post office and a doctor’s surgery).
Mr Gore reported that the likely cost of an older, more basic dwelling in Palmerston would be in the range $550,000-$575,000; of a near new dwelling in Palmerston, $600,000-$650,000; of a reasonable home in Darwin (not new) $550,000 to 575,000; and of a near new dwelling in Darwin, $600,000-$700,000. Mr Gore’s conclusion was that an allowance of $650,000 would give the option of buying a suitable property in either Palmerston or Darwin.[25]
The defendants also engaged a Darwin-based valuer, Andrew Millar, to provide a report in relation to the purchase of an alternative dwelling in the Darwin/Palmerston area, with the additional requirements that the dwelling would require “minimal repairs, being new or recently renovated” and have “space for a small garden”.[26]
In the opinion of Mr Millar, the cost of a home which would adequately satisfy the criteria outlined in his instructions was $450,000 to $500,000. He took into account the entry-level prices of approximately $400,000 for older dwellings in the established Palmerston suburbs such as Gunn, building up to about $450,000 (“mid $400,000’s”), typically on larger blocks of approximately 600 square metres, in the Palmerston suburb of Durack. In the suburb of Zuccoli, the prices ranged from the “high $400,000’s”, increasing with block size and quality of accommodation to a “ceiling of around the mid $500,000’s”.[27]
There is no evidence that the plaintiff had inspected any of the properties suggested by Martin Gore, or by Andrew Millar. However, in the plaintiff’s cross examination, counsel for the defendants asked her to consider four properties listed with Darwin real estate agents and advertised for sale as at 8 October 2018 on the internet site realestate.com.au. Printouts from the site, with colour photographs and other relevant information, were provided for these properties:[28]
· a three-bedroom unit in Rosewood Crescent, Leanyer, “situated in a peaceful boutique complex”, in respect of which offers were sought over $380,000;
· a three-bedroom house in Buckingham Street, Gunn, built on 331 m² and “situated on a secluded tree-lined street’, with an asking price of $370,000;
· a three-bedroom home in Nankeen Court, Leanyer, built on 1010 m², in respect of which offers were sought over $465,000; and
· a three-bedroom house in McPhee Place, Gunn, in respect of which offers were sought over $375,000.
The plaintiff agreed that the properties were in the range of suitable properties for her. In re-examination, she said that that the properties were the type of home that she would like to live in. I consider that that was a reasonable concession, based on substantial acceptance of the selling agents’ representations and the photographs provided. As to location, Martin Gore had identified “parts of Gunn” and “parts of Leanyer” as suitable locations for the plaintiff. Mr Gore did not identify the parts which he thought were or were not suitable. As a result, the evidence does not disclose whether the two identified properties in Leanyer and the two identified properties in Gunn were within those parts of the respective suburbs considered suitable by Mr Gore. The plaintiff’s lawyers did not lead further evidence to clarify this issue or to prove that the properties were unsuitably located. It was not submitted that the Court should view the properties.
Counsel for the plaintiff contended in closing submissions that the plaintiff could not reasonably be expected to form any view as to the suitability of the properties from looking at the photographs, or without first inspecting the properties. That may be true but, as I noted in [57], the plaintiff had not herself inspected any of the properties identified as suitable for her by Martin Gore, and put forward as part of her case. In further submissions as to why I should discount the concessions made by his client in cross examination, counsel referred to the plaintiff’s expressed concern that she would need to actually see the properties in order to gain a sense as to whether any of them would afford an appropriate degree of privacy, given that she was moving from a five acre rural property to an urban dwelling. That is a reasonable qualification, although I accept the defendants’ submission that the need to adapt to living on a small lot in the Darwin or Palmerston suburbs would be an inevitable consequence of moving to a more densely populated area. I would add that ensuring privacy may involve no more than building a fence, erecting a screen or planting the usual fast-growing tropical screening plants.
Counsel for the plaintiff also submitted that asking his client to consider the four properties referred to in [57] was effectively asking the plaintiff, as a lay person, “to indirectly second-guess the expert opinions of Mr Gore and Mr Millar, on the issue of the likely costs of suitable alternative accommodation”. I reject that submission. To ask the plaintiff whether the four properties were in the range of properties which the plaintiff considered suitable for her does not amount to seeking an opinion based on specialized knowledge obtained through training, study or experience.[29] Nor could the plaintiff’s response that such properties were “the type of home that I would like to live in” be considered expert evidence.
It has been difficult to decide what weight to give to the evidence of the four properties described in exhibits D3 – D6 (including their indicative sale prices), and the plaintiff’s evidence referred to in [58]. I note that there is no evidence as to the actual sale price of the four properties, if indeed any of the properties were sold. However, I have concluded that the evidence of actual market offerings at the time of trial, just one or two months after Mr Millar expressed the opinion that the plaintiff’s requirements would be adequately satisfied by a property costing $450,000 to $500,000, supports that opinion.
I therefore adopt $475,000 as the cost of an alternative home for the plaintiff should she decide to quit the Virginia property. To that should be added acquisition costs of approximately $20,000 (stamp duty, less seniors rebate; conveyancing fees and incidentals). I round up all those amounts to $500,000.
Based on a sale price of $745,000, which the parties have agreed for the purposes of trial to be the market value of the Virginia property, less the agreed costs of sale $24,300,[30] the plaintiff will receive a net sum of $360,350.
I turn to consider the property at Port Germein, the agreed value of which is $89,000. Doing the best that I can, I adopt the plaintiff’s estimate of $8,000 for the sale costs of the property, allowing the plaintiff $81,000 net.
I have re-read the documents in the Court Book, to identify references to the Port Germein property. It was the deceased’s idea to purchase the property because it was not too far distant from where his daughter Katrina was working in 2012 and 2013.[31] The deceased and the plaintiff went to the property and arranged for a contractor to erect a front fence, install a hot water system and septic system, and add a verandah. A caravan was permanently stored at the property.
The deceased specifically gave the Port Germein property to the plaintiff, by clause 9 of his will.[32] It would appear from the affidavit of Katrina McKenzie that the deceased insisted that the plaintiff should receive that property.[33]
Nowhere in her affidavit material does the plaintiff refer to having any emotional attachment to the Port Germein property, or any desire to live there or even spend time there. I estimate that the income or potential income generated by the property is probably around $50 per week, resulting in an annual amount of $2,600,[34] based on the plaintiff’s evidence that the shed on the property was rented out for that amount at some time in the past.
There is no reason why the Port Germein property could not be sold to pay the difference or part difference between the net amount the plaintiff will receive from the sale of the Virginia property ($360,350) and the purchase of a replacement property ($500,000). Otherwise, the plaintiff is left with an $89,000 asset ($81,000 net) which she does not use and which she has not indicated an intention to use. Further, the sale of the asset would have a negligible effect on her income stream, based on a putative loss of $50 per week only.
On my calculations, therefore, the plaintiff has or will have available an amount of $441,350 or close to that, being one half of the net proceeds of sale of the Virginia property and the full proceeds of sale of Port Germein, leaving a shortfall of $58,650 on the purchase of a replacement property.
In relation to the shortfall identified in the previous paragraph, I take into account that the provision made for the plaintiff under the will of the deceased also included the gifts of $20,000 cash and a 2012 Jayco caravan valued at $22,000. The plaintiff does not advance any reason why she would wish or need to keep the caravan, and I conclude that there is no reason why the caravan could not be sold. Further, as mentioned in [39] and [40] above, the plaintiff received $53,468, the proceeds (or her share of the proceeds) of insurance policies taken out by the deceased and payable on his death. On my calculations, therefore, the cash gift, the proceeds of sale of the caravan and the proceeds of the insurance policies would total more than $90,000, and even allowing for the possibility that the caravan might sell for, say, 20% less than its agreed value, the monetary shortfall referred to in [69] would be more than made up.
The value of the plaintiff’s right to reside at the Virginia property is difficult to assess, because it depends on how long she decides to remain. However, so long as the plaintiff lives at the Virginia property, she has the benefit and use of the estate’s half interest in the property. The difficulties of garden upkeep, including lawn mowing and/or grass slashing, could be overcome by engaging a gardener or contractor from time to time to do the more arduous tasks which the plaintiff finds increasingly difficult to carry out herself. I am satisfied that the plaintiff has the resources to engage someone for that purpose. That said, I appreciate that engaging a gardener or handyman would not resolve the identified problem of the plaintiff’s access to shops, government offices and medical services in the rural area.
Leaving to one side the unresolved problem of valuing the plaintiff’s right to reside at the Virginia property, I note that the plaintiff received approximately $195,000 of the overall provision available on the death of the deceased (‘available’ both under the will and from the TAL and Real insurance policies). The deceased’s daughters received approximately $630,000 each (that takes into account the pre-death gift of the proceeds of the deceased’s share portfolio). However, that apparent imbalance in the daughters’ favour is off-set to some extent by the right of the plaintiff to continue to reside at the Virginia property and the consequent delay in receipt by the daughters (as residuary beneficiaries) of one half of the proceeds of sale of that property.
As mentioned in [51], the assessment of adequacy of provision must take into account not only the plaintiff’s needs but her capacity and resources for meeting them. I have already determined, in [69] and [70] above, that more than adequate provision was made or was available to enable the plaintiff to make good the anticipated shortfall from the sale of the Virginia property in her purchase of a suitable replacement property. The plaintiff has the very significant resource of the income stream provided by the two reversionary pensions payable to her on the death of the deceased, referred to in [42]. Moreover, she has her own MLC pension which can provide top-up income of $15,000-$18,000 per annum for the rest of her life, with the ability to draw down capital amounts should she wish to do so.
The plaintiff’s reversionary pensions have the advantage of being indexed, but they cannot be capitalised, that is, the plaintiff cannot elect to convert them to a lump sum or draw down any lump sums. Nonetheless, I have made some approximate calculations to determine the comparative value of those reversionary pensions vis-à-vis lump sums or gifts received or to be received by the deceased’s daughters. Adopting the amount of $1,726 per fortnight arrived at in [42], I have calculated a gross weekly payment of $863, or about $730 per week after tax. Based on the Cumpston Sargent actuarial tables published online,[35] and assuming a life expectancy of 16 years, I calculate that the present value of $730 per week, paid for 16 years into the future, is $485,596 using the 3% tables (multiplier 665.2), $423,035 using the 5% tables (multiplier 579.5) and $396,390 using the 6% tables (multiplier 543). Therefore, on a crude comparison, it can be seen that the present day value of the plaintiff’s reversionary pensions probably exceeds $400,000. There are some obvious shortcomings in my calculations. For example, I have allowed 16 years as the plaintiff’s life expectancy (her life expectancy at date of trial being 16.1 years), whereas the plaintiff’s life expectancy was closer to 17 years at the date of the deceased’s death. Another shortcoming is that my calculation does not factor in indexation of the pensions. However, both those identified shortcomings have the effect that my calculation favours the plaintiff by decreasing the hypothetical lump sum value of her reversionary pension entitlements.
To the extent that inequality between beneficiaries is relevant to assessing adequacy of provision in this case, the comparison described in [74] tends to indicate that there is no material inequality in terms of the overall provision available to the plaintiff vis-à-vis that available to each of the deceased’s daughters.
Counsel for the plaintiff contends that in addition to a lump sum “to move home”, the plaintiff requires an additional amount of $450,000 by way of an allowance in respect of contingencies. The claimed contingencies are “the uncertainties associated with the vicissitudes of life, and the possibility that she might in the future need to move into residential care, and the uncertainties associated with market conditions in respect of the sale of the Virginia and Port Germein properties”. For reasons given in [69] and [70] above, I do not consider that the plaintiff requires any additional amount to move home. As for contingencies for unexpected adverse events, the plaintiff has the ability to draw down some or even all of her MLC pension should the need arise. Even if she were to draw down all of that pension, she would still have the income from the two reversionary pensions, both of which have the benefit of indexation. I agree that it is possible that the plaintiff may in future need to move into residential care, but the market uncertainties at that future time would relate to the sale of the assumed replacement home, and would have nothing to do with uncertainties in the market in respect of the sale of the Virginia and Port Germein properties, which presumably would already have been sold.
I therefore reject the plaintiff’s claim for an additional amount of $450,000, or any amount, as an allowance for contingencies.
Conclusion
The plaintiff has not established that adequate provision for her proper maintenance, education and advancement in life is not available under the terms of the will of the deceased.
It follows that the plaintiff’s claim must be dismissed.
I will hear the parties on the issue of costs and other consequential orders.
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[1]Affidavit Raymond Henry McCasker promised 30 March 2018, paragraph 18.
[2]Affidavit of Ann Margery Spry, promised 30 October 2017, paragraph 95.
[3]Court Book page 36.
[4]See s 19A (3) Interpretation Act 1978, read with s 3 (1) and s 3A (1) De Facto Relationships Act 1991.
[5]See s 3A (2) De Facto Relationships Act 1991.
[6]Deceased’s will, par 8(a), Court Book p 33.
[7]Affidavit Raymond Henry McCasker promised 30 March 2018, paragraph 30.
[8]See, for example, affidavit of Katrina Jane McKenzie promised 24 January 2018, par 17 (Court Book p 44) and par 21 (Court Book p 45). The defendants did not identify the alleged “other female”. The plaintiff responded to these allegations, as best she could, in par 8 of her affidavit promised 1 May 2018 (Court book p 159-160).
[9] Defendants’ Outline of Submissions dated 8 October 2018, par 13.
[10]Singer v Berghouse (1994) 181 CLR 201 at 208-211; Simonetto v Dick [2014] NTCA 4 at [3].
[11] Coates v National Trustee Executors and Agency Co Ltd (1956) 95 CLR 494 at 508.7; White v Barron(1980) 144 CLR 431 at 437.5, 441; Goodman v Windeyer(1980) 144 CLR 490 at 499.1.
[12] Singer v Berghouse (1994) 181 CLR 201 at 209-210.
[13]Pontificial Society for the Propagation of Faith v Scales (1962) 107 CLR 9 at 19, per Dixon CJ. The appeal to the High Court was concerned with an award under Queensland legislation in favour of an adult son of the deceased testator.
[14]McCosker v McCosker (1957) 97 CLR 566 at 571-2.
[15]Cooper v Dungan (1976) 9 ALR 93 at 98.
[16]Foley v Ellis [2008] NSWCA 288 at [3]
[17] Defendants’ Outline of Submissions dated 8 October 2018, par 19.
[18]Plaintiff's Outline of Submissions dated 10 October 2018, par 47.
[19]Prior to trial, the parties had assumed that the pension paid to the plaintiff in respect of the CSS superannuation fund was $1,389 per fortnight, and in respect of the NT Police superannuation fund, $319 per fortnight. In her oral evidence the plaintiff updated those amounts to “approximately $1,400” per fortnight from CSS and $326 per fortnight from NT Police.
[20]Court Book page 118.
[21]As assessed by expert Stephen Bourke, based on a conservative investment strategy. Mr Bourke used a similar conservative investment strategy, with an assumed return of 4.15% per annum, to calculate that an annual payment of $18,000 could be maintained for 16.13 years – see Court Book page 179.
[22] See footnote 21.
[23]See, for example, plaintiff's Outline of Submissions dated 10 October 2018, par 67(a).
[24]See par 125 of plaintiff's affidavit promised 30 October 2017 and par 34 of the plaintiff's affidavit promised 21 March 2018.
[25]Agreed Summary of Expert Valuation Evidence dated 8 October 2018.
[26]It is unclear whether this requirement (“space for a small garden”) was different to that specified by the plaintiff's lawyers to Mr Gore, which seem to specify an established small garden. As far as I can see, however, nothing turns on this.
[27] Agreed Summary of Expert Valuation Evidence dated 8 October 2018.
[28]Exhibits D3 – D6.
[29] See s 79(1) Evidence (National Uniform Legislation) Act 2011.
[30] Calculated as agent’s commission, $18,625; marketing costs, $3,875; and conveyancing fees, $1,800.
[31]Plaintiff’s affidavit promised 30 October 2017, paragraph 66.
[32]See court book page 34
[33]Affidavit Katrina Jane McKenzie promised 24 January 2018, paragraph 13, appeal book 43.
[34]Affidavit of defendants promised 24 January 2018, par 110; plaintiff’s affidavit promised 21 March 2018, par 22.
[35] - “One Dollar Per Week Factors for Fixed Terms”.
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