Valerie Constance Chapman v Dongmei Yang and Mark Seton Chapman and Geoffrey John Chapman, Executors of the Will of the Late Edward Charles Chapman

[2005] ACTCA 37

VALERIE CONSTANCE CHAPMAN v DONGMEI YANG and MARK SETON CHAPMAN and GEOFFREY JOHN CHAPMAN, EXECUTORS OF THE WILL OF THE LATE EDWARD CHARLES CHAPMAN
[2005] ACTCA 37 (28 October 2005)

WILLS – Family Provision Act 1969 – application by separated wife – substantial contributions made by deceased during lifetime – adequate provision

Family Provision Act 1969 (ACT), s7

In re Allen (deceased), Allen v Manchester [1922] NZLR 218
Vigolo v Bostin [2005] 79 ALJR 731

No. ACTCA 43-2005
No. SC 444 of 2003
Judges:            Higgins CJ, Gray and Spender JJ         
Court of Appeal of the Australian Capital Territory
Date:               28 October 2005

IN THE SUPREME COURT OF THE       )
  )          No. ACTCA 43-2005
AUSTRALIAN CAPITAL TERRITORY    )          SC 444 of 2003

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:VALERIE CONSTANCE CHAPMAN

Appellant

AND:DONGMEI YANG

First Respondent

AND:MARK SETON CHAPMAN and GEOFFREY JOHN CHAPMAN, EXECUTORS OF THE WILL OF THE LATE EDWARD CHARLES CHAPMAN

Second Respondent

O R D E R

Judges:  Higgins CJ, Gray and Spender JJ
Date of Order:  12 August 2005
Date of Judgment:  28 October 2005
Place:  Canberra

THE COURT ORDERS THAT:

1. The appeal be dismissed.

IN THE SUPREME COURT OF THE)                 No. ACTCA 43-2005

)          No. SC 444 of 2003    
AUSTRALIAN CAPITAL TERRITORY    )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:VALERIE CONSTANCE CHAPMAN

Appellant

AND:DONGMEI YANG

First Respondent

AND:MARK SETON CHAPMAN and GEOFFREY JOHN CHAPMAN, EXECUTORS OF THE WILL OF THE LATE EDWARD CHARLES CHAPMAN

Second Respondent

Judges:  Higgins CJ, Gray and Spender JJ
Date of Order:  12 August 2005
Date of Judgment:  28 October 2005
Place:  Canberra

REASONS FOR JUDGMENT

THE COURT:

1. On 12 August 2005 the Court dismissed an appeal from the judgment of Connolly J, who had, on 22 November 2004 dismissed an application by Valerie Constance Chapman (the plaintiff) that she was entitled to provision, pursuant to s 7 of the Family Provision Act 1969 (ACT), out of the estate of her husband, Edward Charles Chapman.

1. His Honour, on 9 December 2004, had ordered that the appellant pay her own costs of the hearing, the costs of the executors of the estate be paid out of the estate, and the appellant pay the costs of the first respondent in the proceedings, Dongmei Yang, on an indemnity basis.  The latter costs order was in the context of pre-trial offers that the first respondent had made.

1. The notice of appeal sought:

(a)        the judgment of Connolly J dated 22 November 2004 dismissing the appellant’s application be set aside;

(b)        a declaration be made that the appellant is entitled under the Family Provision Act 1969 to provision out of the estate of the Will of Edward Charles Chapman, deceased (the deceased);

(c)        an order that a legacy of $250,000.00 (or such other sum that seems appropriate to the Court of Appeal) be paid to the appellant out of the estate of the deceased in priority to any other bequest or gift in the Will of the deceased;

(d)        the appellant’s costs of the trial and the appeal be paid out of the estate of the deceased on a trustee basis.

1. After dismissing the appeal and after hearing submissions from the parties on costs, the Court ordered that the appellant pay the costs of the respondent, Dongmei Yang, of and incidental to the appeal on a party-party basis but that from 28 March 2005, those costs be payable on an indemnity basis.  This order was also based on offers that had been made by the respondent prior to the appeal.

1. The Court indicated on 12 August 2005 that it would publish its reasons for dismissing the appeal, from the order of Connolly J dismissing the appellant’s application, at a later date.   These are those reasons.

1. The context in which the application was made appears from the primary judge’s reasons for judgment:

The plaintiff married the deceased on 2 May 1953.  There are two sons of the marriage, Mark Chapman and Geoffrey Chapman, who are the executors of their father’s estate.  It is common ground that the marriage became difficult in the late 1970’s, and that the deceased had an affair with another woman, and left the matrimonial home in Canberra in about 1979.  Despite living in separate homes and in separate cities since 1994 when the plaintiff moved to Sydney to be near her son and his family, they never divorced, and the plaintiff remained the legal wife of the deceased.  They remained in contact on good terms and the deceased maintained a good relationship with his sons.  During the 1990’s the deceased formed a de facto relationship with Ms Dongmei Yang, and in his will he left the bulk of his estate to her, leaving only one item of furniture to the plaintiff.  …

There is no question that the plaintiff, still being the legal wife of the deceased at the time of his death, is eligible to bring a claim pursuant to the Family Provision Act.

1. It was contended on the appeal by Mr AM Colefax, Senior Counsel for the appellant, that the primary judge misdirected himself as to the proper approach to be taken, asserting that the correct approach was that propounded by Salmon J in In re Allen (deceased), Allen v Manchester [1922] NZLR 218 at 220-221:

The provision which the Court may properly make in default of testamentary provision is that which a just and wise father would have thought it his moral duty to make in the interests of his widow and children had he been fully aware of all of the relevant circumstances.

1. The primary judge in his judgment said: 

The test to be applied in this jurisdiction is that set out in s 8 of the Family Provision Act, which allows such an order to be made if the court is satisfied that “adequate provision for the proper maintenance, education or advancement in life of the applicant” was not made under the will of the deceased.

1. The primary judge was undoubtedly correct, and not guilty of the error which Mr Colefax asserts.  Judicial observations directed to assisting in the resolution of whether adequate provision has been made are not to be taken as formulating the proper test, still less to be taken as the appropriate test in substitution for the test provided by the statute (see generally Vigolo v Bostin [2005] 79 ALJR 731).

1. Although the primary judge delivered his judgment before the High Court’s decision in Vigolo, he noted this possibility for error:

… In Singer v Berghouse (1994) 181 CLR 201 at 209, Mason CJ, Deane and McHugh JJ, after noting that “references to ‘moral duty’ or ‘moral obligation’ might well be understood to amounting to a gloss on the statutory language”, described the first stage of the process as follows –

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 Court said (at 210) that this first question –

is strictly one of fact, notwithstanding that it involves the exercise of value judgments.  The evaluative character of the decision stems from the fact that the court must determine whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement of life.

1. The primary judge observed:

Although it is acknowledged that the marriage broke down in 1979 and the plaintiff and the deceased lived apart since then, this is no bar to bringing a claim.

1. The contention by the beneficiary, Ms Yang, was that although there was minimal provision by Mr Chapman for his wife in the Will, the deceased had over the years arranged his affairs so that the appellant was adequately provided for, and that she should not be seen as a person in need.  In these circumstances, it was submitted, he was free to dispose of his property as he wished.

1. After a detailed consideration of the financial circumstances of the appellant (which had included the receipt of an equal distribution of the surplus of the proceeds of sale of the matrimonial home in 1983, the payment by the deceased in 1993 of $90,000 from his retirement payouts to the appellant, and the ongoing payment to the appellant of her entitlement, as his lawful wife, to 75 per cent of the superannuation pension that was payable to him), the primary judge concluded:

I am not satisfied that the deceased has failed in his will to make adequate provision for the plaintiff.

1. His Honour summarised his reasons for this conclusion as follows:

It seems to me that on all the evidence the plaintiff and the deceased effected a property settlement shortly after their relationship ended which resulted in each receiving half the proceeds of the sale of the then matrimonial home.  Despite living separate lives and having separate financial affairs from 1979, the deceased, upon his retirement in 1993, gifted a substantial proportion of his retirement lump sum benefit to the plaintiff, in the sum of $90,000.  Moreover, despite being separated since 1979, the deceased was aware that, because there had been no divorce and, it might be added, because he made no adjustment to his superannuation fund to direct benefits to a de facto spouse, his lawful wife would, on his death, receive for the balance of her life an ongoing indexed superannuation pension.

1. Having noted that “Each case will depend on its circumstances, and the question that must be asked is whether the deceased has made adequate provision, taking into account all the facts of the case”, his Honour concluded:

In the present case, …the plaintiff and the deceased split their assets fairly upon separation and the deceased made substantial contributions after separation, both by way of the lump sum gift in 1993, and by ensuring that the plaintiff benefits by way of an ongoing pension.  This pension provides the greater proportion of her income.  She has wisely invested her funds, and owns her own property, with a substantial share portfolio.  Her position, it seems to me, can be equated with that of the plaintiff in Singer v Berghouse at 213 where their Honours Mason CJ, Deane and McHugh JJ said that the Master, at first instance, was entitled to reach the conclusion that –

There is nothing to suggest that she is not able to lead a perfectly satisfactory life comfortable in her own home with a secure income backed by a large capital sum.  In many cases the need for maintenance is obvious without any particular expression of the need but in this case no need has been shown for anything now or likely to be required in the future which would not easily [be] covered by the [appellant’s] own resources.

1. There can be no reason to doubt the correctness of the primary judge’s fundamental conclusion that the financial position of the appellant was not such as to make it necessary for the deceased to make further provision for her in his will than he did.

1. That conclusion is consistent with the evidence of the appellant herself.

1. She was asked about the matrimonial house at Campbell:

By no later than 1983, the two of you had agreed and the Campbell house was sold?---That’s right.

The net proceeds were divided equally?---That’s right.

You were the equal owners of the house?---We were.

At that stage your son, Mark, had been gone for a few years?---Since he left school, yes.  At the end of 1978, he moved out.

And also in 1983, Geoffrey stopped living with you and moved to Western Australia?---Before then, that’s correct, he was doing a TAFE course which finished at the end of 1982.

1. The appellant said that from the proceeds of the matrimonial home at Campbell she purchased a small townhouse at Mawson, which she held for six years.  She then sold Mawson and purchased a new unit in Norfolk Gardens.  She sold that unit and purchased at Tuggeranong, which she described as “my last home in Canberra”.  Each of the properties at Mawson, Norfolk Gardens and Tuggeranong was purchased in her own name.

1. When asked why she bought the property at Tuggeranong in her own name she said:

I bought it in my own name because I saw myself as an independent woman earning a salary and I could please myself.

… it was something that I just did without considering my husband, who soon had his own house, we were just operating as two separate people with separate homes, houses.

And you were over those years separating your financial circumstances, weren’t you?---Yes.

1. The appellant bought a unit in Manly in October 1994 for approximately $225,000, and sold in December 2000 for $405,000.  In July 1994 she had decided to move to Sydney, and she never took any steps thereafter to resume cohabitation with the deceased or return to Canberra. 

1. The finding of the primary judge that he was not satisfied that the deceased had failed in his Will to make adequate provision for the appellant is not tainted with error.  That conclusion is determinative of the appeal.

1. It was, nonetheless, contended that his Honour had failed to take into account contingencies, in particular the wish of the appellant to move into a larger retirement apartment with facilities for a carer, should that need arise in the future. 

1. His Honour said:

The evidence in this case establishes that the plaintiff would prefer to move to a more expensive residence, but that of itself falls well short of need.          

1. The reasons for judgment of the primary judge were comprehensive and clear.  His conclusion “I am not satisfied that the plaintiff has established that the Court should intervene to re-write the Will to provide her with additional benefits” is not attended with any error. 

1. It is for the above reasons that the Court dismissed the appellant’s appeal on 12 August 2005.

   I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

   Associate:

   Date:     28 October 2005

Counsel for the Appellant:   Mr A M Colefax SC   

Solicitor for the Appellant:   Dibbs Barker Gosling  

Counsel for the First Respondent:   Mr L Ellison    

Solicitor for the First Respondent:                    Phelps Reid     

Counsel for the Second Respondent:                Mr R Faulks

Solicitor for the Second Respondent:                Snedden Hall and Gallop

Date of hearing:   12 August 2005           

Date of Order:  12 August 2005

Date of judgment:      28 October 2005