Tapp v The Public Trustee
[2009] TASSC 54
•31 July 2009
[2009] TASSC 54
COURT: SUPREME COURT OF TASMANIA
CITATION: Tapp v The Public Trustee [2009] TASSC 54
PARTIES: TAPP, Allan Roy
v
PUBLIC TRUSTEE (THE)
FILE NO/S: M300/2006
DELIVERED ON: 31 July 2009
DELIVERED AT: Hobart
HEARING DATE: 12 February 2009
JUDGMENT OF: Tennent J
CATCHWORDS:
Succession – Family provision and maintenance – Failure by testator to make sufficient provision for applicant – Duty of testator – Duty to spouse – Small estate – Whether right of residence during period as widower adequate – Whether conversion to fee simple interest proper provision to be made.
Testator's Family Maintenance Act1912 (Tas), s3.
Hope v Tasmanian Perpetual Trustees Limited [2006] TASSC 13; Gerlach v Public Trustee 153/1997; Vigolo v Bostin (2005) 213 ALR 692; Re Buckland, deceased [1966] VR 404; White v Barron & Anor (1980) 144 CLR 431; Lord v Lord [2003] TASSC 99, referred to.
Aust Dig Succession [307]
REPRESENTATION:
Counsel:
Applicant: C M Schokman
Respondent: A R McKee
Other parties: D F M Zeeman
Solicitors:
Applicant: Ogilvie Jennings
Respondent: Murdoch Clarke
Other parties: Butler McIntyre
Judgment Number: [2009] TASSC 54
Number of paragraphs: 38
Serial No 54/2009
File No M300/2006
ALLAN ROY TAPP v THE PUBLIC TRUSTEE
REASONS FOR JUDGMENT TENNENT J
31 July 2009
Beverley Dawn Tapp ("the deceased") died at Hobart on 15 April 2006. At the time of her death, she was married to Alan Tapp ("the applicant"). The parties were the registered owners, as tenants in common in equal shares, of a property at 77 Chippendale Street, Claremont ("the Claremont home"). By her will, the deceased gave to the applicant the use and occupation of her interest in that property until his death, remarriage or his entering into a de facto relationship, at which time his right of occupation was to cease and the interest in that property was to fall into and form part of the residue of the deceased's estate. The applicant received no other benefit under the deceased's will, with the residue of her estate to be divided into four equal parts. Three of those parts were to be distributed to the deceased's children, Donna Maree Wheeler, Craig James Thurstans and Laife Arthur Thurstans. The fourth part was to be held for the deceased's grandson, Ben Thurstans.
The applicant says that, in the circumstances, he has been left without adequate provision and support and seeks provision for the same pursuant to the Testator's Family Maintenance Act 1912 ("the Act"), s3. The executor of the deceased estate is the Public Trustee. Save in respect of one discrete issue, at the commencement of the hearing, that office advised the Court that it did not wish to be heard in relation to any order. It did however make further submissions at my request at a later stage of the proceedings. The deceased's three surviving children, whom I will refer to as "the respondents", oppose the making of any provision for the applicant beyond that contained in the deceased's will.
At the commencement of the hearing, the Court was advised that no party wished to interfere with the bequest to Ben Thurstans. What the applicant sought was an order which gave him a fee simple interest in three quarters of the interest of the deceased in the Claremont home, with the remaining one quarter to be held in trust for the child Ben Thurstans, subject to the same right of the applicant to the use and occupation of that one quarter as the deceased had set out in her will.
Family Relationships
The applicant and the deceased commenced their relationship in 1982 and were married at Hobart on 22 November 1985. The applicant was born on 31 October 1940 and was therefore 42 when her relationship with the applicant commenced. She had been previously married. At the time of the marriage, the deceased had 4 surviving children. These were the respondents and Marcus Thurstans. On a date not before the Court, the deceased's son Marcus died leaving a child Ben living at the date of the deceased's death. The applicant was approximately 59 years old when his relationship with the deceased began. He had also been previously married and had three adult daughters from that marriage.
The proceedings
Each of the respondents filed an appearance and all were represented by the one counsel. Donna Wheeler and Laife Thurstans both swore affidavits which were read to the Court, and both gave evidence. Craig Thurstans filed no material and did not attend Court. Counsel for the Public Trustee appeared at the commencement of the hearing. Having indicated to the Court the agreement reached by the applicant, Donna Wheeler and Laife Thurstans to the effect that any order made by the Court should preserve the entitlement of the child Ben to a share of the deceased's estate, and having read two affidavits into evidence, counsel for the Public Trustee withdrew in the interests of minimizing costs. Counsel for the respondents confirmed Craig Thurstans agreement to the preservation of the child Ben's interest in the estate.
The law
The Act, s3, provides that where a person is entitled under the section to make a claim for provision out of the estate of a deceased person, and the Court finds that the person making the claim has been left without adequate provision for his or her proper maintenance and support, the Court may, in its discretion, order that such provision as the Court, having regard to all the circumstances of the case thinks proper, shall be made, and may make such other order including as to costs as the Court thinks fit.
In Hope v Tasmanian Perpetual Trustees Limited [2006] TASSC 13, Underwood CJ repeated, commencing at par9, a review of the law relating to applications such as the present which he had undertaken in the matter of Gerlach v Public Trustee 153/1997. His Honour identified that the proper consideration of an application made pursuant to the Act, s3, required a two-stage approach. The first involved the making of a finding as to whether an applicant had been left without adequate provision for his or her proper maintenance and support. If that finding favoured an applicant, then the court needed to proceed to the second stage which was the exercise of a discretion as to whether or not to make the order sought. His Honour identified that, in dealing with the first stage, it was necessary to ascertain the needs of the applicant, the size of the estate, the claims of others, and the moral claim of the applicant.
In Gerlach's case, his Honour canvassed a number of cases in which expressions such as "moral claim" and "moral duty" had been considered. He then went on to refer to a matter of Vigolo v Bostin (2005) 213 ALR 692, a decision of the High Court in which it dealt with legislation similar to that being considered here. His Honour said at par18 in Hope's case:
"Perhaps it might be said that the majority in Vigolo has settled the consternation that apparently arose from the comments in the joint judgment in Singer with respect to the usefulness of references to 'moral claim' and 'moral duty'. Perhaps it might also be said that the controversy was a lot of fuss over very little, for the words of the statute are plain. They do not include the word 'moral'. However, it is a word that helps elucidate the statutory purpose of the legislation and, accordingly, with respect to those who have a different view, it seems to me that no objection can be taken to its use."
As to the needs of the applicant, counsel for the respondents made reference to the words of Adams J in Re Buckland, deceased [1966] VR 404 where, at, 415 his Honour said:
"I consider the proper conclusion to be drawn from the authorities is that the court's jurisdiction, whatever the size of the estate, is limited by the claimant's need for maintenance and support; but that the maintenance and support to which he or she may for this purpose be treated as needing is that appropriate to his or her station or condition in life … The greater the estate the more may contingencies, even remote contingencies which may arise in the future, be provided for in the assessment of such maintenance."
In the same vein, however, the courts have since taken the view that, where a court is dealing with a widow (or widower) who has been left only a life interest in a home subject to conditions, it is not necessarily the case that a maintenance order should be confined to widowhood nor that it should be confined to the provision of income. See White v Barron & Anor (1980) 144 CLR 431 at 444 per Mason J; Lord v Lord [2003] TASSC 99.
The evidence
It is not a useful exercise in this case to canvas in detail the evidence which was given at the hearing. Much of it was confusing. In particular, the applicant was cross-examined at length about a number of matters. As is often the case in this type of matter, the applicant was an elderly man at the time he gave his evidence. While there was no direct evidence of his age, he was 59 years old when he and the deceased met in around 1982. I infer therefore that he must have been, at trial, in his mid 80s. He suffered from profound deafness and he was often confused. Notwithstanding the difficulties which these matters created, the applicant appeared to be doing his best to assist the Court.
It is perhaps a more useful approach to look at the submissions both counsel made and relate those submissions to the evidence given which might be relevant.
Counsel for both parties submitted that the parties' relationship continued from 1982 to 1996, with the parties thereafter separated, but living under the one roof. Counsel for the respondents submitted that this was evidence that, for many years prior to her death, the relationship of the deceased with the applicant was not a loving one. He submitted that, in the absence of evidence of a loving and supportive relationship between the parties, the deceased had no moral duty to provide for the applicant other than as she did. The difficulty with these submissions is that they do not necessarily accord with the evidence. It is not disputed that the parties met in 1982, and married in November 1985. At the time they met, the applicant was about 59 years old and the deceased was 42 years old. Shortly after their meeting, the deceased moved into the applicant's home at 32 Pearl Street, Moonah. Both parties were employed. The deceased had a home of her own at Hakea Street, Primrose Sands and a car.
The deceased had worked for many years at the Hydro Electric Commission and retired in about 1991. His evidence was that the parties lived apart for ten months in about 1992. He deposed in his affidavit, that the deceased also left about five years before that affidavit was sworn, which would have made it some time in 2002. He said, however, that she returned to the home about 12 months before she died, that is in about April 2005, although the parties lived separately. On that basis, over the period from 1982 to 2006, a period of 24 years, the parties lived in separate homes for approximately 4 years and apart, but under the one roof, for the last 12 months of the deceased's life.
The applicant's daughter, Marie Brown, also spoke of two separations although her evidence about when these occurred was vague in the extreme. The deceased's daughter, Ms Wheeler, said that she believed there was only one separation and that was in 1996. She said her mother left the home but returned after about four to six months. She said that, after that return, the parties lived apart. While the description by the applicant of his relationship with the deceased over a number of years would suggest it was not the most romantic relationship, I do not accept that the parties necessarily considered themselves separated in 1996. Ms Wheeler told the Court the applicant approached her mother several times to return home during this initial separation and she did. Counsel for the respondents urged me to look at the age of the parties and the era, and find that the deceased had a limited capacity to leave home and that was why she remained for so long as she did. With respect, that is conjecture on his part, unsupported by the evidence.
In the circumstances I prefer the evidence of the applicant as to the separations. I accept that, for the last 4 years of the deceased's life, the parties lived apart, although for the last 12 months of that it was under the same roof after the deceased returned to live at the Claremont home. Counsel for the respondents suggested to the applicant that the deceased left him because of domestic violence and his relationship with another woman. He denied both. It must be inferred that, while the relationship between the applicant and the deceased for the last few years of her life could not be categorised as a close and loving one, it was one which enabled her to live in the same house as the applicant and to accept some help from him as to her care. She had been diagnosed with cancer about 18 months before her death.
As to the Claremont home, it was purchased by the parties as joint tenants in December 1988 for $58,000. There was a mortgage of $37,000. At the time, the applicant was still employed at the Hydro Electric Commission where he had been employed for many years. When the deceased moved in with the applicant in 1982, she rented her home at Primrose Sands to her daughter, Ms Wheeler. The parties remained living in the applicant's property at Pearl Street until late in 1988. At that point, the applicant sold his property at Pearl Street. He sold it for $50,000. He paid out the mortgage on that property and put the balance of the proceeds of sale towards the purchase of the Claremont home.
In or about September 1991, the applicant retired from his employment. The applicant deposed in his affidavit that he received approximately $50,000 by way of superannuation benefits on his retirement and that he used $36,000 of that money to pay out the mortgage on the Claremont home. Ms Wheeler, in her affidavit, asserted that the applicant had told her that, when he retired, he had no superannuation, and she disputed that he made that payment. While she was not challenged in cross-examination about that statement, her assertion makes little sense. The applicant had clearly been a long term employee of the Hydro Electric Commission and, in those circumstances, it is likely that he would have been entitled to a form of lump sum payment on retirement. Further, the figure of $36,000 which he deposed was what he had paid to pay out the mortgage on the Claremont home is an amount consistent with a mortgage of $37,000 taken out about 2 years before. There was no other evidence put before the Court to contradict the applicant's version of events, in particular to explain where the mortgage payout might have otherwise come from.
The deceased sold her property at Hakea Street to her daughter, Ms Wheeler, in 1989 for $50,000. There is no suggestion that any of the proceeds of sale went towards the purchase of the Claremont home. Counsel for the respondents submitted that the deceased contributed to the payments off the mortgage on the Claremont home from her income. She may very well have done so. However, the fact of the matter is that the mortgage was paid off only a matter of a couple of years after it was taken out, and the amount paid out of $36,000 suggests that the mortgage had been reduced by a minimal amount between when it was taken out and when it was discharged. It was not disputed that the deceased most likely also made an indirect contribution to the mortgage the applicant had on his home between when she moved in and when the house was sold.
What is inescapable however is that most of the capital cost of the Claremont home came from the applicant. As to improvements to the home, the applicant did not dispute that the deceased and her family landscaped the front area of the home twice. However he also gave evidence of work he had done. It is impossible from the evidence to make any finding that necessarily one made any significantly greater contribution than the other to improvements.
There was evidence the deceased bought a car at some stage which the applicant found in the garage at the Claremont home. There was no suggestion the applicant gained any benefit from that, nor indeed where it actually went. Up until shortly prior to her death, the deceased had funds invested. A few days prior to her death, her son, Laife Thurstans, withdrew $36,500 from those funds, thus removing those funds from the control of the deceased's will. Mr Thurstans told the Court he removed those funds at his mother's request, and that he gave $10,000 to each of his siblings, Donna and Craig, kept $10,000 for himself and used the balance to buy things and pay for things for his nephew Ben.
The deceased made her will late in 2004. At or around the same time, she arranged for the joint tenancy in respect of the Claremont home title to be severed. At some stage, at or around the same time, the deceased's health deteriorated, and she returned to live in the Claremont home. In the usual course of events when a joint tenancy is severed by the filing of a document with the Land Titles Office, a notice is sent by that office to the registered proprietor of the property. The notice sent in this case to the applicant was found after the deceased's death in her belongings. The applicant deposed he was not aware of the severance occurring. He certainly took no step to protect his own position in relation to the Claremont home, which, it might be thought, he would have done had he known of the severance. I am satisfied he was unaware of what the deceased had done about the title to the home.
Probate documents disclosed that the deceased's estate at the date of death consisted of the half interest in the Claremont home valued at $83,000 and $11,997.25, and that the estate had debts totalling $8,195.16. The assets and liabilities of the estate in this matter according to the affidavit of a representative of the Public Trustee consisted of the following just prior to trial:
ASSETS
Half share of house and land at 77 Chippendale Street $95,450.00
Public Trustee Common Fund balance $3,754.41
$99,204.41
LIABILITIES
Dobsons Monumental Works $1,580.50
The Public Trustee's commission was estimated to be $4,500 and there are potentially costs orders from these proceedings to be considered. Even if the applicant is unsuccessful, there may be insufficient liquid assets in the estate to meet these further potential obligations.
Has the applicant been left without adequate provision for his proper maintenance and support?
The estate of the deceased is small. The applicant is a pensioner. He has a car and his interest in the Claremont home. His outgoings are not large. However, they are such he would struggle to pay for rental accommodation or buy another home were the Claremont home to be sold and he were to receive one half of the proceeds. The estate available for consideration will be even smaller because of the agreement of all parties not to interfere with the deceased's bequest to her grandson, the commission due to the Public Trustee, and possibly, the costs of these proceedings.
The deceased has sought by her will and the declaration of severance to provide, for the ultimate benefit of her children and grandchild, a half interest in the Claremont home. There is no suggestion it was not proper for the deceased to provide for those persons from her estate. However, there are two factors which, in my view, should be taken into account in support of the applicant's claim, particularly when considering the claims of others to the deceased's estate and any moral duty the deceased may have owed the applicant.
The first is the applicant's far greater capital contribution to the Claremont home. The second is the substantial cash gifts made by the deceased to her children and grandchild just before her death. The consequence of those gifts was to jeopardise the terms of the will she had made some time before because they removed the capacity of her estate to meet its likely obligations without potentially adversely affecting the capacity to give effect to the life interest in the Claremont home. These factors need to be considered alongside of course the relationship between the applicant and the deceased at the time of her death. The impact of that last-mentioned factor however in my view is outweighed by the earlier two that I identified.
In all the circumstances, I take the view that the applicant has been left without adequate provision for his proper maintenance and support by virtue of the terms of the deceased's will.
Should the Court exercise its discretion in favour of the applicant?
The Court has a discretion, once it concludes that proper provision has not been made, to make an order for that provision. For the same reasons expressed as to why I am satisfied that proper provision had not been made for the applicant from the deceased's estate, I am satisfied that the Court should exercise its discretion to make an order for provision for him from the deceased's estate other than as provided in her will.
The applicant seeks in effect an order which gives him a fee simple interest in three quarters of the deceased's interest in the Claremont home. He accepts that the remaining quarter should be retained for Ben Thurstans and that Ben Thurstans' interest should not be burdened with any part of any costs orders in these proceedings.
The possibility of such an order must be considered in the context of what the deceased's estate consists of. It consists of the interest in the Claremont home and $3,754.41 in cash. That cash amount will be reduced by $1,580.50 for a headstone, leaving $1,173.91 in liquid assets. That will be insufficient to meet the commission due to the Public Trustee estimated to be $4,500, any further costs associated with the final administration of the estate, and any costs orders made in relation to these proceedings. There will be a cash deficiency if the real property is to be the subject of an order of this Court. It would be fair to say that no such deficiency would have existed had the deceased not instructed her children, shortly prior to her death, to withdraw from financial institutions almost the entirety of her invested funds and distribute those funds amongst or for the benefit of themselves and Ben Thurstans.
At the conclusion of the hearing, counsel for the respondents submitted that, as a consequence of the size of the estate, it was not appropriate for any order to be made in favour of the applicant. Further, he submitted that the Court should, if it were minded to make some order, not make the order sought by the applicant because of the deficiency which I have outlined above.
Further submissions were sought from all parties in relation to the impact of the identified deficiency on the discretion of the Court. The Public Trustee made no submission as to the first of the propositions put by counsel for the respondents at the hearing. As to the second, the Public Trustee provided detailed written submissions as to the "usual" position of the Public Trustee in dealing with an estate where there is a cash deficiency and as to its position in this case, were the Court minded to make the order sought by the applicant. Counsel for the applicant made no further submissions beyond those made at the hearing. Counsel for the respondents made further written submissions. However they largely did not address the issues about which further submissions had been sought, but addressed to a greater degree the matter dealt with at the hearing and costs issues.
The Public Trustee's position is that, subject to any order that any other party pay its costs, it should have its costs of these proceedings from the estate and that, whatever orders the Court makes, they should include provision for any cash deficiency to be paid. Its counsel also submitted that, insofar as any deficiency was concerned, the applicant should not be placed in any better position than he would have been had he been a beneficiary with a direct entitlement to the fee simple he sought. There can be no dispute in my view that the Public Trustee should have its costs of these proceedings either from the estate or from the other parties to these proceedings. There can also be no dispute that any orders the Court makes should make provision for any cash deficiency in the estate.
Had the estate not been the subject of a cash deficiency, in my view the applicant would have been entitled to the order that he sought. However that deficiency cannot be ignored. Counsel for the applicant was apprised of the written submissions made by the solicitors for the Public Trustee and indicated she did not wish to make any submissions in response. Those written submissions contained possible alternative outcomes to give effect to the Public Trustee's position that the cash deficiency would need to be catered for in any orders. It must be inferred that the applicant is therefore prepared to abide orders of the Court which have the effect of placing an obligation on him to contribute to the cash deficiency.
The question which arises is, to what extent should the applicant be required to contribute to that deficiency if orders as to the fee simple interest in the Claremont home are made as he seeks. The deficiency at the very least will be approximately $3,326, that is the difference between the cash available in the estate after payment for the headstone( $1,173.91) and the commission of the Public Trustee of $4,500. That will be increased by any further costs of finally administering the estate. The submission of the Public Trustee is that the applicant should pay three quarters of that with the balance to be recouped from the ultimate share in the estate of Ben Thurstans, the proportions according with the share in the home to be taken.
While I accept that, if the applicant is to have the fee simple interest he seeks, it must be subject to a requirement that he contribute to any cash deficiency, there are in my view reasons why it should not be to the extent of three quarters of that. The deficiency would not have existed but for the actions of the deceased just prior to her death in substantially depleting her cash investments. Further the respondents and Ben Thurstans have already benefited to a substantial degree in cash terms from the deceased's actions in so depleting her estate.
Conclusion
In all the circumstances I am satisfied that it is appropriate for the Court to exercise its discretion in favour of the applicant such as to make provision for him from the estate of the deceased. The orders that the Court proposes to make will be:
1That, subject to order 2 herein, provision be made out of the estate of the deceased, Beverley Dawn Tapp ("the Testator"), for Allan Roy Tapp ("the Applicant"), by the transfer to him by the Public Trustee of three undivided one quarter shares in all the right, title and interest of the Testator in the property at 77 Chippendale Street, Claremont in Tasmania, more particularly described in Certificate of Title Volume 690974 Folio 4 ("the Chippendale Street property").
2That the operation of order 1 herein be stayed until the Applicant has paid to the Public Trustee one half of any cash deficiency in the estate of the Testator as at the date of such transfer.
3That the Public Trustee hold the remaining one undivided one quarter share in the right, title and interest of the Testator in the Chippendale Street property on trust to allow the applicant to reside in the said property until the occurrence of a terminating event as defined in the last will and testament of the Testator dated 28 May 2004 ("the Terminating Event"), with the applicant to be responsible for the payment of all rates and taxes, for keeping the said property insured against loss and damage from storm and tempest in such amount and with such insurer as may be approved from time to time by the Public Trustee and maintaining the said property in a state similar to that existing at the date of this order.
4That, on the occurrence of the Terminating Event, the Chippendale Street property be sold.
5That, upon the sale of the Chippendale Street property, whether upon the occurrence of the Terminating Event or otherwise, the Public Trustee hold one-eighth of the net proceeds of sale thereof upon trust for Ben Thurstans for his own use and benefit absolutely upon his attaining the age of twenty one (21) years.
6That, in the event that any costs of any party to these proceedings are ordered to be paid from the estate of the Testator, no part of that order is to burden the entitlement of Ben Thurstans to a one eighth share in the Chippendale Street property.
7That a certified copy of these orders be made upon the probate of the Testator's will.
The terms of the above orders may be affected by orders for costs. The orders in themselves are also somewhat complex. Therefore, before making final orders, I will hear counsel as to the issue of costs and as to the final wording of the proposed orders. Those submissions are not to relate to the substance of the orders but to matters of drafting and any consequential issue which may not have been addressed.
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