Wall v Crane
[2009] SASC 382
•16 December 2009
SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction: Civil)
In the Estate of KEITH CHANDLER CRANE
WALL v CRANE & ORS
[2009] SASC 382
Judgment of The Honourable Justice White
16 December 2009
SUCCESSION - FAMILY PROVISION AND MAINTENANCE - FAILURE BY TESTATOR TO MAKE SUFFICIENT PROVISION FOR APPLICANT - DUTY OF TESTATOR
SUCCESSION - FAMILY PROVISION AND MAINTENANCE - FAILURE BY TESTATOR TO MAKE SUFFICIENT PROVISION FOR APPLICANT - WHETHER APPLICANT LEFT WITH INSUFFICIENT PROVISION
Claim by plaintiff under the Inheritance (Family Provision) Act 1972 (SA) ("the Act") - plaintiff and the first and second defendants are the children of the testator - plaintiff estranged from testator - testator made provision for only the first and second defendants.
Separate claim under the Act by the third defendant - third defendant a child of the first defendant - third defendant living in impecunious circumstances - first defendant not providing in a significant way for the upkeep of the third defendant.
Whether inadequate provision made for the plaintiff in all the circumstances of the case - whether third defendant has a moral claim on the testator's estate.
Held: Testator made inadequate provision for plaintiff - provision for the plaintiff to be paid out of the residuary estate - burden to be met from the residuary estate and to be borne by the first and second defendants in equal shares - third defendant has a valid moral claim on the estate - provision to be paid from the first defendant's share of the residue.
Inheritance (Family Provision) Act 1972 (SA) s 7; Family Provision Act 1982 (NSW); Land and Business Agents Act 1973 (SA), referred to.
Singer v Berghouse (1994) 181 CLR 201; Vigolo v Bostin (2005) 221 CLR 191; Bosch v Perpetual Trustee Co Ltd [1938] AC 463; Worladge v Doddridge (1957) 97 CLR 1; Hughes v National Trustees Executors & Agency Company of Australasia Ltd (1979) 143 CLR 134; Kleinig v Neal (No 2) [1981] 2 NSWLR 532; In the Estate of Puckridge (1978) 20 SASR 72, applied.
In re Wright, Willis v Drinkwater [1954] NZLR 630; Re Horton [1976] 1 NZLR 251, distinguished.
In re Izard, Hunt v Castle [1954] NZLR 234; Bowyer v Wood (2007) 99 SASR 190; McCosker v McCosker (1957) 97 CLR 566, considered.
In the Estate of KEITH CHANDLER CRANE
WALL v CRANE & ORS
[2009] SASC 382
Civil
WHITE J: Keith Crane (the testator) died on 22 October 2002. His wife, Dorothea, had predeceased him. The testator and Dorothea had two sons and two daughters: the two defendants David and Kevin; the plaintiff (Jennifer); and Barbara. These proceedings commenced as claims by Jennifer and Barbara for provision from the testator’s estate under the Inheritance (Family Provision) Act 1972 (SA) (the IFP Act). However, Barbara discontinued her claim.
On 24 January 2008, a separate claim under the IFP Act was made by Andrew Shepherdson. Andrew was born in August 1999 and is the son of David.
It is convenient in these reasons to refer to each family member by their first names. I do so without thereby intending any disrespect.
The testator’s will made on 11 July 2000 is relatively short and the substantive parts can be set out in full:
1. I APPOINT my sons [DAVID and KEVIN] as the executors and trustees of this my Will and in such event:
(a) I GIVE all my furniture and house hold effects wherever situate and all my articles of both personal and domestic use, my shack at The Coorong and its contents, my interest in the leasehold land on which the shack is erected, my Bell-boy boat to my son [KEVIN].
(b) I GIVE my motor car and caravan to my son [DAVID].
(c) I GIVE the residue of my estate to my executors UPON TRUST to pay thereout all my funeral and testamentary expenses and all my just debts and subject thereto I GIVE the residue of my estate to my said sons [DAVID and KEVIN] in equal shares.
(d) Should either of my said sons predecease me I GIVE the whole of my estate to the survivor at my death.
…
4. I DECLARE that I have not made any provision in this Will for my daughters [JENNIFER and BARBARA] as I have given them financial assistance and made adequate provision for them during my lifetime.
…
It can be seen that the testator made specific bequests of certain property to each of David and Kevin, and then directed that his residuary estate be divided equally between them. No provision at all was made for Jennifer or Barbara. The testator said that he had not made provision for them because he had given each of them financial assistance and had made adequate provision for them during his lifetime.
Section 7(1) of the IFP Act
Section 7(1) of the IFP Act provides:
(1) Where—
(a) a person has died domiciled in the State or owning real or personal property in the State; and
(b) by reason of his testamentary dispositions or the operation of the laws of intestacy or both, a person entitled to claim the benefit of this Act is left without adequate provision for his proper maintenance, education or advancement in life,
the Court may in its discretion, upon application by or on behalf of a person so entitled, order that such provision as the Court thinks fit be made out of the estate of the deceased person for the maintenance, education or advancement of the person so entitled.
Since probate of the testator’s will was granted to David on 21 December 2005, the assets comprising the residuary estate have been converted to cash. David’s affidavit sworn on 10 September 2009 indicates that the net estate is now some $923,000. However, as will appear later, I consider that this affidavit understates the value of the net estate. In saying that I am not intending to infer that David has attempted to mislead the Court. The understatement results from some confusion and misunderstanding as to how certain sums owed to the estate by Kevin are to be taken into account in the assessment of the value of the net estate. I note in addition that there are some further liabilities for tax and professional fees.
Legal Principles
In relation to the counterpart of s 7(1) in the comparable New South Wales legislation,[1] Mason CJ, Deane and McHugh JJ said in Singer v Berghouse[2] that the Court is to carry out a two-stage process. First it determines whether an applicant has been left without adequate provision for his or her proper maintenance, education or advancement in life. If satisfied of this circumstance, the Court must then decide what provision should be made.[3]
[1] Family Provision Act 1982 (NSW).
[2] (1994) 181 CLR 201.
[3] Ibid at 208-9.
The first stage requires the determination of an issue of fact.[4] The Court is to make an assessment of whether inadequate provision has been made:
…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.[5]
The second stage involves an exercise of discretion,[6] although the factors relevant to the exercise of the discretion are similar to those relevant to the first stage.[7]
[4] Ibid at 210.
[5] Ibid at 209-10.
[6] Ibid at 211.
[7] Ibid at 210.
The adjectives “adequate” and proper” are important in the application of s 7(1). Their meaning and content has been discussed in a number of authorities, including by Debelle J (with whom Nyland and Anderson JJ agreed) in Bowyer v Wood.[8] The words involve notions which are relative. They must be applied in a relative sense to all the circumstances of the case as there are no fixed standards.
[8] [2007] SASC 327 at [39]-[45]; (2007) 99 SASR 190 at 201-4.
The word “proper” connotes an ethical position as to what allowance should be made, but it does not empower the Court to re-write the deceased’s will in accordance with its own ideas of justice and fairness. It is not be regarded as a synonym for the word “equal”. It requires the adequacy of any provision made to be decided by reference to all of the relevant circumstances. The approach was stated in Vigolo v Bostin by Callinan and Heydon JJ:[9]
Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means, and competing claims, of all the potential beneficiaries must be taken into account and weighed with all of the other relevant factors.[10]
[9] [2005] HCA 11; (2005) 221 CLR 191.
[10] Ibid at [122].
The adequacy of any provision made is not to be determined by consideration only of what is sufficient to provide the necessities of existence.
In Bosch v Perpetual Trustee Co Ltd,[11] the Privy Counsel explained the distinction between the words “adequate” and “proper” in these terms:
The use of the word “proper” in this connection is of considerable importance. It connotes something different from the word “adequate”. A small sum may be sufficient for the “adequate” maintenance of a child, for instance, but, having regard to the child’s station in life and the fortune of his father, it may be wholly insufficient for his “proper” maintenance. So, too, a sum might be quite insufficient for the “adequate” maintenance of a child and yet may be sufficient for his maintenance on a scale that is “proper” in all the circumstances. A father with a large family and a small fortune can often only afford to leave each of his children a sum insufficient for [their] “adequate” maintenance. Nevertheless, such sum cannot be described as not providing for his “proper” maintenance, taking into consideration “all the circumstances of the case” as the subsection requires shall be done.[12]
[11] [1938] AC 463.
[12] Ibid at 476.
The proposition was further explained by Kitto J in Worladge v Doddridge[13] when he said:
… proper maintenance is not to be translated as adequate maintenance, and … a judgment as to the maintenance which is “proper” for a particular applicant in the circumstances of his case is necessarily a judgment as to what maintenance the applicant ought to have in those circumstances, and not what he or she needs. [Emphasis in original][14]
[13] (1957) 97 CLR 1.
[14] Ibid at 16-17.
In Vigolo v Bostin[15] the majority in the High Court considered it appropriate, when considering the first stage of the enquiry, to have regard to considerations of moral claim and moral duty, providing of course that a moral claim cannot be founded upon considerations not contemplated by the Act.[16]
[15] [2005] HCA 11; (2005) 221 CLR 191.
[16] Ibid at [11]-[25] (Gleeson CJ); [113]-[121] (Callinan and Heydon JJ).
The adequacy or otherwise of any provision made for an applicant is to be assessed as at the date of the testator’s death,[17] by reference to all the circumstances which existed at the date of death, whether the testator knew of them or not, and by reference to all of the eventualities which may, as at that date, have reasonably been foreseen by the testator if he or she had knowledge of the facts.[18]
[17] Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494 at 508.
[18] Hughes v National Trustees Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134 at 148.
The Court may refuse to make an order in favour of any person on the ground that his or her character or conduct is such as to disentitle him or her to the benefit of the Act: (s 7(3)).
It is also to be remembered that there is no presumption that an able-bodied son or daughter, who is able to maintain himself or herself in the future as in the past, is prevented from succeeding in an application under the Act: McCosker v McCosker.[19]
[19] (1957) 97 CLR 566.
The Parties to the Proceedings
As already noted, the original parties to the action were Jennifer, Barbara, David and Kevin but Barbara discontinued her claim. David appeared in his own right and as executor of the testator’s estate.
On 17 December 2007 Jennifer’s solicitors gave notice of the proceedings to each of the known grandchildren of the testator. Following that notice, a claim was made on behalf of Andrew. Notice was not, however, given to two persons whom David had indicated may possibly be his children. I will refer to these persons later.
Apart from Kevin, who represented himself throughout, all the parties were represented by counsel.
At a pre-trial directions hearing held on 4 September 2009, I asked the parties to confirm that all potential claimants had been identified. In response to my question as to whether there was anyone else who might be a potential claimant Kevin responded:
Yes, actually, someone has come forward; I have got a son who is 23, Aaron … I only found out – he only came forward on Saturday night, last. I am pretty excited myself. … His mother didn’t bring him forward until about last week, Saturday night.
I then directed that Aaron be served with the papers and with notice that the hearing was to commence on Monday, 21 September 2009.
Aaron attended at the pre-trial directions hearing held on 17 September 2009. He had been served with the papers concerning the action on 10 September 2009 and said that he wished to speak to a lawyer about the proceedings. I gave some directions to Aaron as to what he would need to do in order to be able to participate and discussed with counsel the way in which his participation could be accommodated while retaining the scheduled commencement date for the trial of 21 September 2009.
Aaron did not appear at the commencement of the trial on 21 September 2009. Kevin informed the Court that Aaron had told him, in effect, that he did not wish to be involved in the proceedings. The hearing then proceeded with the existing parties, and without Aaron.
The Witnesses
The Court heard oral evidence from Jennifer, her husband Rodney, Ms Shepherdson (the mother of Andrew), David, Kevin, and from a valuer, Mr Christodolou. In addition, a number of documents were tendered.
As the evidence progressed, it became apparent that some level of animus exists between the testator’s children. This was less obvious in the case of Jennifer and David, but very obvious in the case of Kevin.
It also became apparent that the views of each witness were influenced by the extent to which they had been personally involved in the events which they recounted, and that to some extent their views were influenced by what they had heard from others concerning those events.
While allowing for the possibility that their evidence may have been tainted by some degree of animus or personal interest, I consider that the evidence of Jennifer, Rodney and David was generally reliable and, in general, I am prepared to act on it. In those areas in which their evidence was in conflict, I thought that Jennifer and Rodney were more reliable historians than David.
I have reservations about the evidence of Kevin. He made little effort to disguise the resentment which he feels towards his siblings. On several occasions he raised matters which were irrelevant to the issues in the case, but which evidenced his resentment. There are, in addition, features of Kevin’s level of education, intelligence and personality style which indicate that his evidence ought not to be accepted at face value. I infer from other evidence that Kevin’s parents well aware of his make-up, and of his limitations and that they took steps to protect him and to assist him, even during his adult life. Amongst other things, it is apparent that the testator provided much of the regular employment which Kevin has had in his life.
On the whole, I am not prepared to accept Kevin’s evidence in those areas in which it was in conflict with that of his siblings.
I accept that Mr Christodolou has expertise as a valuer and I accept his opinions as to value.
I have not considered it necessary to identify all the conflicts in the evidence nor to make express findings concerning them. Instead, the findings concerning the testator, his children and Andrew contained in the reasons which follow reflect the general view of the witnesses to which I have just referred.
The Testator’s Circumstances
The testator and Dorothea married in 1954. They had five children: Barbara, born in 1955; Jennifer born in 1957; David, born in 1958; Kevin, born in 1961; and a daughter born after David but before Kevin who died 10 days after her birth.
Dorothea died in August 1998 in Queensland. Her will was not proved in evidence before me but I accept Kevin’s evidence that it did not contain any provision in favour of either Jennifer or Barbara, and that it included a provision in terms identical with that contained in cl 4 of the testator’s will.
The parties did not adduce much specific evidence concerning the testator’s personal circumstances. It seems that at various times he was a farmer at Echunga, an electrician, the owner-driver of a truck, the operator of a fitness centre, and a property developer. In his will made in July 2000, the testator described himself as a landlord.
Until the late 1980s, the testator and Dorothea and their family lived at various locations in the Adelaide Hills. In the late 1980s the testator and Dorothea moved to live in Victoria. In the early to mid 1990s they bought a block of land near Hervey Bay in Queensland and lived in the house which they built on it. However, that house was sold after Dorothea’s death and thereafter the testator’s principal place of residence was a shack at Kartoo Road, Meningie in this State.
In about 1976, the testator and Dorothea bought a delicatessen with an attached house at the corner of Gawler and Walker Streets, Mount Barker. The testator then carried out renovations and construction work so as to create a block of four shops on the property. In one of those shops Dorothea commenced the Mount Barker Wool Shop.
The testator and Dorothea continued to own the Mount Barker shop property as joint tenants until Dorothea’s death. The testator still owned the property when he died in October 2002 and it comprised the major asset of his estate. I infer that the rent which the testator received from the shops provided the substantial portion of the income upon which he lived. After the testator’s death the ownership of the shops became an issue to which I will refer shortly.
In the late 1970s or early 1980s, the testator bought the former Nairne Saleyards and sub-divided them so as to provide blocks for three houses and four home units. He built a house for himself and Dorothea on one of the blocks. In September 1985 the testator gave one block to each of David and Kevin who had assisted him in various ways in the re-development of the Saleyards. David had been paid for some of his work in the re-development. There was no specific evidence as to whether Kevin had also been paid for some of his work but I think it unlikely that the testator would have differentiated between his two sons in this respect. The redevelopment of the Saleyards was profitable.
The testator died in the Townsville Hospital after becoming ill while travelling in northern Queensland.
The Testator’s Estate
As already noted, the testator’s will named both David and Kevin as his executors. However, because of a conflict between the interests of the estate, on the one hand, and claims made by Kevin, on the other, this Court ordered that Kevin be passed over as an executor and probate of the testator’s will was granted to David.
At the time of his death, the testator’s estate comprised the following:
| Property | Estimated or Known Value |
| Assets The property with the four shops at Mount Barker Unpaid rent owed to the estate | $410,000.00 |
| Furniture and household effects | 4,500.00 |
| Ford Maverick 4WD | 10,000.00 |
| Caravan and contents | 48,000.00 |
| Aluminium 3.4 metre boat | 300.00 |
| Fibreglass Bellboy boat | 400.00 |
| Money at bank | 7,057.35 |
| Debts due to the deceased: (a) C J Ahlberg (personal loan) (b) Kevin Crane | 25,000.00 |
| Shares | 1,277.65 |
| Total Value of Assets | 671,426.32 |
| Liabilities Principal and interest on the mortgage on the Mount Barker shop property | 210,170.84 |
| Sundry debts, including funeral expenses and outstanding Council rates on the Mount Barker property | 5,206.83 |
| Total Value of Liabilities | $215.377.67 |
| Net Value of Estate | $456,048.65 |
The testator also had a life interest in the property at Kartoo Road, Meningie. On his death, the estate was required to remove the shack on that property.
After the testator’s death, Kevin made three claims concerning assets in the testator’s estate. First, he claimed that on 17 October 2002 (five days before the testator’s death and while he was in Townsville Hospital) the testator had agreed to transfer the whole of the property containing the four shops at Mount Barker to him for a consideration of $100. Secondly, he claimed that the testator had, at the same time, agreed to transfer to him for a consideration of $100 his caravan (the estimated value of which at the time was $40,000). Thirdly, he claimed that a shop and a house property at Nairne transferred to him by the testator on 10 November 1999 for a stated consideration of $150,000 (which consideration remained unpaid) was a gift so that no amount was due by him to the estate.
These claims by Kevin led to proceedings in this Court between David and Kevin. Amongst other things, Kevin lodged a caveat on the title to the Mount Barker shop property and commenced proceedings to enforce that caveat. David defended that claim and counter-claimed for a declaration that Kevin was liable to pay to the estate the sum of $150,000 in respect of the shop and house property at Nairne, and sought damages for the conversion of the testator’s caravan by Kevin, constituted by Kevin’s use and subsequent sale of it.
The litigation was compromised on 22 March 2007 by a Deed of Settlement. The principal elements of the Deed were these:
(a)Kevin withdrew his claim to the property containing the four shops at Mount Barker and agreed that it was to be treated as an asset of the estate;
(b)Kevin agreed to pay “notionally” to the estate the sum of $23,000 on account of his conversion of the testator’s caravan;
(c)Kevin agreed to pay “notionally” to the estate the sum of $150,000 in full discharge of his liability in respect of the shop and house property at Nairne;
(d)Kevin agreed to pay “notionally” to the estate the sum of $300 in respect of one of the testator’s boats which he had converted for his own use;
(e)Kevin agreed to pay “notionally” to the estate certain of the costs incurred by David in the action to have him passed over as an executor and certain of the costs incurred by David in the action which he (Kevin) had commenced to have David’s appointment as executor revoked (the costs to be paid by Kevin were agreed at $42,094.63);
(f)Kevin agreed that David was entitled to have certain of the costs which he had incurred paid by the estate on a solicitor/client basis;
(g)The amounts referred to above which Kevin was to pay notionally to the estate did not have to be paid in advance of the distribution of the estate. Instead, Kevin’s liability to the estate was to be offset against his share of the residue;
In short, by the Deed of Settlement, Kevin withdrew the claims which he had made in respect of the three items of property to which I referred earlier. Kevin consented to Court orders to give effect to some of the elements of the Deed of Settlement which I have just set out.
Since the Deed of Settlement, David has sold all of the estate’s assets and banked the proceeds. He has deposed that the assets of the estate now comprise cash of $956,084.09, less certain liabilities for tax and professional fees, giving a net estate of $923,582.61. However, this amount understates the net amount of the estate as it does not bring into account the sum of $150,000 owed to the estate by Kevin in respect of the property at Nairne, nor the sums owed by Kevin under the Deed of 23 March 2007, namely, the sum of $23,000 in respect of his conversion of the caravan, the sum of $300 in respect of the testator’s boats and the sum of $42,094.63 being his agreed contribution to David’s costs.
Accordingly, the net value of the estate, subject to the outstanding liabilities for legal costs and tax is presently $923,583.61 plus $215,394.63, namely, $1,138,978.24. The parties informed me that the outstanding legal costs, including the costs of trial, for all parties presently amount to $223,000. It is not clear whether this amount includes the costs which Kevin agreed in the Deed of Settlement should be paid on account of costs to David from the estate.
Jennifer’s Circumstances
Jennifer is the second child (and second daughter) of the testator and Dorothea. She was born in 1957.
Jennifer left school at aged 16 and obtained a job in a shop at Macclesfield. The testator and Dorothea bought her a car at that time at a cost of $2,000 so that she could get to and from her work. Jennifer repaid all but $800 of that sum, and her parents waived the remaining liability as part of a gift on the occasion of her marriage at the end of May 1976 to her first husband.
At about the time of that marriage, the delicatessen at the corner of Gawler and Walker Streets in Mount Barker became available for sale. Jennifer had worked part-time in the delicatessen since she was aged 14. The testator and Dorothea bought the property on 6 August 1976 and had it transferred to themselves and Jennifer and her first husband as tenants in common. It was the testator and Dorothea who financed the purchase. Their plan was that Jennifer and her husband would live in the house on the property and run the delicatessen, with the testator and Dorothea working in the delicatessen at nights and on weekends. However, Jennifer and her first husband separated after about three or four months of marriage and, by agreement and without any consideration, they transferred their interest to the testator and Dorothea on 22 November 1976. Jennifer continued working in the delicatessen for a wage for a few months but then moved to other work. She continued living in the house behind the delicatessen for nearly a year. The evidence did not disclose whether that was rent free.
I am satisfied that in these circumstances that any benefit which Jennifer received from her parents as a result of the property being purchased in joint names, including those of her husband and herself, was minor and that it can, for present purposes, be ignored. However, Jennifer did receive some benefit by being able, at least while her marriage was on foot, to live in the house rent free.
Jennifer married Rodney in May 1979. At that time she had full-time employment in the Mount Barker Newsagency.
By early 1979, the testator had carried out the re-development of the delicatessen and the house so that the property now comprised four shops. In March 1979 Dorothea commenced operating the “Mount Barker Wool Shop” in one of the shops, selling balls of wool, knitting needles, cotton threads, buttons and the like. However, apparently because of stress, Dorothea was unable to continue operating the business. The testator and Dorothea then offered the business to Jennifer who agreed to take it over. The stock in the premises at the time of the takeover in September 1979 was valued at $10,781. The testator and Dorothea agreed to make a gift of stock to the value of $4,000, with the balance as an interest free loan. In this way Jennifer did receive a benefit, but the arrangement also suited her parents who may otherwise have had to close the business.
Between September 1979 and June 1984 Jennifer worked full-time in the shop. Rodney had his own separate full‑time employment. Jennifer developed the business. She used profits from the shop to purchase additional stock so as to expand the range of products which it sold. The Form 6 statement prepared in July 1983 under s 91 of the Land and Business Agents Act 1973 (SA) (and signed by the testator) indicated that the net profit in each of the 1981, 1982 and 1983 financial years was $7,018, $9,076 and $13,400 respectively. I accept that those figures recorded accurately the net profit of the business. In addition, the Form 6 indicates that no amounts were paid as wages in any of those years. I accept therefore that the net profit represented Jennifer’s earnings from the business. Those earnings were modest and were approximately equivalent to the amounts which Jennifer could have earned had she worked elsewhere as a full-time shop assistant. The Form 6 figures also confirm that Jennifer did increase the stock levels of the business and the shop’s net profitability.
Jennifer and Rodney sold the wool shop business in June 1984. They received $15,000 for the goodwill and 20,840.05 for the stock. The net proceeds at settlement were $34,903.65. From that amount, Jennifer paid $23,015.97 into her parents’ bank account on 18 June 1984, $1,500 to pay outstanding debts incurred in relation to the business, $5,271.01 to discharge a personal car loan, and applied $5,116.67 to savings.
I find that owing to the very short period in 1979 during which Dorothea operated the wool shop business, it had acquired little goodwill when Jennifer took it over. I am satisfied that nearly the whole of the goodwill of $15,000 realised in the sale of the shop can be attributed to Jennifer’s efforts in the business. In saying that I am not overlooking that Jennifer was given the advantage of being able to take over an established business.
I am also satisfied that while operating the wool shop business, Jennifer made payments to her parents totalling $5,781 in payment of that portion of the value of stock which had not been gifted to her in September 1979.
Jennifer paid rent to her parents while occupying the shop in which the wool shop business was conducted. The rent she paid was a little less than a full commercial rent (but I am not able to make any finding to what extent). I accept, however, that Jennifer also acted, in an unpaid capacity, as manager on her father’s behalf of the four shops and that the reduced rent which she paid reflected, at least to some extent, that role.
At about the time that the wool shop business was sold, Jennifer had an argument with her mother. Jennifer made a statement about Kevin to which Dorothea took exception. In rebuking Jennifer, Dorothea told her that she had been given the wool shop business and that Jennifer’s husband (Rodney) had a job only because of the testator. Jennifer was aggrieved by this as she considered that it was her own efforts which had made the wool shop into a profitable business. She did not wish it to be said that she had obtained some advantage because of her parents’ assistance. Accordingly, Jennifer decided to repay to her parents the full amount of the stock of $10,781 (less the repayment of $5,781 which she had already made), and interest on that amount for the five years between 1979 and 1984, together with the net proceeds received from the sale of the goodwill. She made a calculation on this basis of $23,015.97, and then paid this amount into her parents’ account.
After a few months, the testator attempted to return the money to her. However, Jennifer tore up his cheque and returned it to him. Shortly after that, the testator quietly paid the monies into the joint account of Jennifer and Rodney and, after some reflection, Jennifer decided to accept it.
It could be said that the return of the $23,015.97 was a benefit which Jennifer had received from her parents. However, I do not accept that this is the correct characterisation. I consider that the testator appreciated that the proceeds of the sale of the business were mainly attributable to Jennifer’s efforts, and that it was appropriate that she should retain them.
In summary, on my findings, Jennifer received the following benefits from taking over the wool shop business. First, a gift of stock to the value of $4,000; secondly, an interest-free loan of the value of the remaining stock ($6,781) for a period of four years and, as at the time of sale she had repaid only $5,781, a release from the liability to repay the remaining $1,000. In addition, Jennifer received the intangible benefit of being able to run her own business, and the tax-free capital gain from its sale.
Jennifer also retained the annual profits but, as outlined above, I do not consider that they exceeded the wages which she would have earned had she been employed as a full-time shop assistant elsewhere.
The argument which Jennifer had had with her mother led to a prolonged period of estrangement between them. Although Jennifer had periodic contact with her father, she had little contact with her mother thereafter.
In January 1988 Jennifer and Rodney visited the testator and Dorothea at Narrawong in Victoria but that visit did not resolve the estrangement. Nor did a telephone call from Jennifer to Dorothea in August 1989 after her daughter’s birth that month. Dorothea was apparently upset at Jennifer’s choice of name for her daughter. Jennifer did not have any further contact with Dorothea before her death in August 1998, and that also limited her contact with her father.
Events surrounding the movement of the testator’s mother from her own home into a nursing home in about 1990 caused further estrangement between Jennifer and her father. The testator disagreed with the arrangements made by his brother Donald for the sale of his mother’s home and with the arrangements, in which Jennifer participated, for the distribution of her furniture and household effects. He made it plain to Jennifer that in this respect she was proceeding against his wishes, but Jennifer went ahead. On 15 February 1990 Jennifer wrote a letter to the testator in which she explained her position, endeavoured to reconcile things with her father, and asserted her love for him. However, the testator did not respond and, apart from one telephone conversation a year or so later, they had no further contact before his death.
When the testator’s mother was dying, Jennifer asked Rodney to ring the testator to let him know. Rodney did this about 10 days before the testator’s mother died. There was no contact between Jennifer and the testator at that time.
The testator’s mother appointed the testator’s brother Donald and Jennifer as her executors. She left one-quarter of her estate to Donald; one quarter to Donald’s two daughters; and the remaining half to be divided equally between Barbara, Jennifer, David and Kevin. On the basis of the assets disclosed in the the application for the grant of probate, this should have meant that each of the testator’s children received approximately $18,000. However, none of the witnesses referred to the receipt of monies to that extent. It may be that there were other considerations which meant that those monies were not realised and available for distribution. I proceed on the basis that any benefits which the testator’s children received from his mother’s estate can be ignored for present purposes.
As a result of events not explained in the evidence, in 1995 Rodney sought and obtained a restraining order against Kevin. The testator was present at the Courthouse supporting Kevin at the time that the order was made, but although Jennifer saw him, she did not then speak to him.
Jennifer did not attend her mother’s funeral in Queensland in 1998.
In 1980, Jennifer and Rodney bought their first home. It was a “spec” home in Mount Barker. They obtained their own finance and did not receive any assistance from the testator or Dorothea.
In October 1985, Jennifer and Rodney bought another block of land in Mount Barker for $23,750 and had a house built on it at a cost of $68,000. This was financed in part by the sale of their first home, in part by the $23,015.97 returned by the testator from the proceeds of sale from the wool shop business, and in part by a mortgage. I note that for a period of between one and two years, David’s son lived with Jennifer and Rodney in their second Mount Barker home as part of their family.
In June 2003, Jennifer and Rodney sold their Mount Barker home for $290,000 and bought a block of land on the River Murray for $142,000. They had a house built on that block at a cost of approximately $150,000. Jennifer and Rodney now live in that house. Since moving in they have carried out further improvements but have not yet completed all the furnishing, concreting and landscaping.
Mr Christodolou, the valuer, whose evidence I accept, considered that the value of their second home in Mount Barker in October 2002 was approximately $246,500. He also considered the property on the River Murray to have a value at the time of trial of approximately $495,000.
Jennifer and Rodney have three children born in 1985, 1987 and 1989 respectively.
In October 2002 when the testator died, Jennifer and Rodney were living in their second home at Mount Barker. Their eldest son, aged 17, was living at home but had left school and was working as a concretor. The other two children were aged 15 years and 13 years respectively and were still at school. Jennifer worked as a bakery assistant and Rodney worked as an account manager in a transport company. In addition to their house and furniture, they owned a Malibu speed boat for use on the River Murray. They owed $68,000 on their mortgage.
Jennifer has been in the workforce almost continuously since the birth of her youngest child. She worked for 11½ years doing family day care, and then eight years in production line work, initially in an abattoir, and then as a potato grader. Jennifer now works as a carer in a house providing assistance to children considered in need of care by the Minister for Community Welfare. Although contracted to work 19 hours per week, Jennifer usually works about 34 hours each week.
Jennifer and Rodney presently have an outstanding mortgage liability of $161,000 and other outstanding liabilities totalling $3,000.
Jennifer’s gross income in the year ending 30 June 2009 was approximately $28,700. Rodney works as a Sheriff’s officer at the Murray Bridge Court. Their children are now all adult.
The testator’s Aunt Lillian died in 1981. In her will she left a ring to each of her grand-nieces: Barbara, Jennifer, and two of their cousins. One ring was very valuable (worth approximately $2,500) and went by lot to one of the cousins. The other rings were valued at approximately $500 each. The testator gave each of Barbara and Jennifer $2,000 so that they received a gift of comparable value to that of their cousin. In addition, the testator gave each of David and Kevin $2,500 so as to maintain equality within his own family. In this way, Jennifer did receive a benefit from her father but it was of the same order as each of her siblings.
In her first affidavit, Jennifer said that this gift occurred before 1978 but, when the date of Lillian’s death was pointed out to her, corrected that evidence. Kevin was critical of her mistake, suggesting that it undermined her reliability and honesty. I do not take that view. I regard Jennifer’s mistake in this respect as honest and understandable.
David’s Circumstances
David is the third child of the testator and Dorothea. He was born in 1958. David left school part-way through Second Year High School, aged 15 years. He then trained as a boilermaker but did not complete the necessary instruction to obtain a certificate.
David has had a variety of short term employments in many different places in South Australia, Northern Territory, Western Australia and Queensland. However, since the late 1980s or the early 1990s, he has lived in Kin Kin in Queensland and, since late September 2004, has worked in and around the Noosa area as a contract plasterer when that work is available. At the time of the death of the testator, David was unemployed, and had been so for approximately twelve months. He is presently unemployed, apparently as a result of a slow down in the building industry following the economic crisis. He receives unemployment benefits. His earnings in the 2008 financial year were $7,513 and in the 2009 financial year, $16,289.
David married in 1977. He and his wife separated after five or six years but had two children who were both adults at the time of the testator’s death. Although David has had other relationships since the separation, he has not remarried.
David has been told that he fathered another child as a result of an extra-marital relationship during the period of his marriage. He has never met this child and does not know whether he is, or is not, her father. He played no part in her upbringing. Although the child’s date of birth was not disclosed in the evidence it seems that she must have been about 25 years old at the time of the testator’s death.
As a result of a short-term relationship in Mount Barker with Ms Shepherdson, David fathered the second claimant in the action, Andrew, who was born in August 1999.
David also said that he may be the father of a fifth child born in 2007 to another resident of Kin Kin. He does not know the child’s name and says that he has never seen the child.
David owns the property at Kin Kin in which he lives. He used the proceeds from the sale of the block of land at Nairne given to him by his parents in part-payment of the purchase price of the Kin Kin property. It is a three-bedroom weather board home on two and a half acres. David began renovation of the home shortly after purchasing it, but the renovation is incomplete, partly because of constraints of time, and partly because of lack of funds. The property suffered significant damage in the recent Queensland floods.
In early 2005, the house was valued for mortgage finance purposes at about $250,000 and David owes approximately $60,000 on the mortgage. The value of the house was probably less at the time of the death of the testator. Some of the borrowings secured by the mortgage comprise loans taken out by David to fund the litigation with Kevin to which I referred earlier.
In his work as a plasterer, David receives a flat $400 per week. This can vary as the amount of work he carries out varies. David lives a frugal lifestyle and is content to earn no more each week than he needs to live on. I infer that his circumstances in October 2002 were similar, albeit that at that time he was unemployed.
Apart from the property at Kin Kin and some old vehicles, David has no other significant assets. At one stage the testator and Dorothea lent David $20,000 which he used to buy a second-hand bobcat and a second-hand truck, and to effect repairs and improvements to those vehicles. The bobcat is now broken down and unusable and the truck was sold in 2004 or 2005.
David did not repay his parents the loan of $20,000 but said (and I accept) that he did some unpaid work for them in landscaping and fencing their home near Hervey Bay, and in doing the gyprocking on that house. While I think it unlikely that the value of David’s work amounted to $20,000, I accept that his parents treated that work as a payment in kind, in lieu of him having to repay the sum of $20,000.
David saw relatively little of his parents when he first moved to Queensland. However, after they moved to the property near Hervey Bay, he saw them regularly. He also had regular contact with the testator after Dorothea’s death and had a good relationship with him.
When David learnt that the testator had become critically ill during a road trip to Cooktown with Kevin and had been admitted to hospital, he immediately travelled to Townsville. Both he and Kevin were with the testator when he died.
Kevin’s Circumstances
Kevin is the youngest of the testator’s children, having been born in 1961. He has never married.
Kevin left school part-way through Year 10 when he was 15 years old. He has not obtained any qualifications since leaving school.
Kevin’s employment seems, for the most part, to have been intermittent and short-term. He has worked at the Jacobs Meat Factory at Mount Barker, as a gardener, as a truck driver, as a furniture removalist, as the operator of a lawn mowing round, and he assisted his father in some of his property developments. At one stage Kevin was also employed by his father to drive the truck which the testator owned.
In about 1985 or 1986, the testator and Dorothea gave Kevin one of the blocks of land derived from the re-development of the Nairne Saleyards. For reasons not disclosed in the evidence, this block was not actually transferred into Kevin’s name. However, when it was sold in June 2000, the testator deposited the sale proceeds of $32,706.91 (less $1,000 owed by Kevin to him) into Kevin’s bank account and thereafter he had the use of those monies for his own purposes.
I also note that for a period not disclosed in the evidence, Kevin lived in a building on a block of land at the former Nairne Saleyards. This building had been converted into a domestic dwelling. Although the evidence is unclear, I infer that the building was on the block given to Kevin or, if it was located on some other block, that Kevin was permitted to live in it rent free.
In 1999, the testator transferred to Kevin, for a stated consideration of $150,000, a house and shop at Nairne. Kevin was not required to pay the $150,000. It appears to have been treated between themselves as an interest free loan. Kevin has still not paid the $150,000 to the estate but, as noted earlier, has acknowledged that account is to be taken of that sum in his distribution from the residue of the estate.
At the time of the testator’s death in October 2002, Kevin was receiving rent of approximately $18,000 per annum from the house and shop at Nairne. He had also borrowed $50,000 using the property as security, but the use to which he had put the $50,000 is unclear. In 2004 Kevin sold the Nairne property for a consideration of $250,000 and retained the proceeds for his own use.
After Dorothea’s death in 1998, the testator sold the home near Hervey Bay and moved to live at Meningie. From that time until his death, Kevin lived with him, apart from times when the testator was hospitalised, recuperating from surgery, or travelling independently. I accept that Kevin was often a companion to his father and that he provided emotional and practical assistance to him. I also accept that the testator came to depend, to an extent, on Kevin’s assistance.
Kevin has been unemployed for some 18 months before the commencement of the current trial. On my assessment, Kevin’s limited education, intelligence, and personality style is likely to limit his ability to obtain employment, and to retain such employment as he is able to obtain. I also consider that each of his parents appreciated Kevin’s limitations and that, during their lifetimes, took extra steps to protect and assist him. In part, this explains the greater financial provision made by the testator to Kevin during his lifetime.
Until recently, Kevin owned a home, apparently at Coonalpyn, which he said was valued at approximately $30,000. Kevin owns furniture, a second-hand car and boat, and some other old vehicles the value of which is said not to exceed $5,000. I will proceed on the basis that these estimates of value are accurate. I will also infer that apart from the sale of the Coonalpyn and Nairne properties, Kevin’s circumstances have not changed significantly since October 2002.
Kevin said that at one stage the testator gave him the sum of $4,000 being portion of the sum of $20,000 which the testator had received from the estate of his Aunt Lillian. He thought that a similar gift was given to each of his other siblings. Kevin claimed that he did not accept that gift at the time, and that instead he had told his father to use the money to reduce the mortgage on the Mount Barker shops property. Given my general view about Kevin’s evidence, I have reservations about accepting that evidence. Neither Jennifer nor David described receiving a gift of $4,000 in cash. Kevin pointed to the discharge on 7 November 1979 of the mortgage on the Mount Barker shops property from the sum of $4,000, but that discharge could well have resulted from the testator applying his own monies (perhaps a portion of his Aunt’s legacy) in reduction of the mortgage. If Kevin was offered $4,000 by his father from the legacy from Lillian, which may well have been the case, I am not prepared to accept that it was applied in the way which he alleged.
Andrew’s Circumstances
As already noted, Andrew was born in August 1999 following a short relationship between David and his mother Ms Shepherdson.
Ms Shepherdson has had seven other children (none of them fathered by David). Andrew, now 11 years old, lives with her and his step-siblings at Mount Barker. Ms Shepherdson subsists on a variety of Centrelink benefits. It was not really in dispute at trial that Ms Shepherdson has only limited monies with which to support her family. I am satisfied that she lives from one Centrelink payment to the next. That was also the case in October 2002.
When the testator died, Andrew was three years old and was living in a Housing Trust home at Mount Barker with Ms Shepherdson and four of his step-siblings. Now there are seven children in the home.
The Family Court has made a declaration of David’s fatherhood of Andrew. David has paid Child Support maintenance since early 2002. Initially the Child Support maintenance was $21.60 per month. It is now $28.25 per month. These are the minimum amounts required to be paid under the Child Support Scheme.
David made no attempt to have any contact with Andrew until mid 2007, when he sought to reach agreement with Ms Shepherdson on arrangements for him to see Andrew, and for Andrew to stay with him at Kin Kin. A mediation occurred which did not produce any agreement. Other than in minor ways, David has not had contact with Andrew, and has not involved himself in his upbringing, between 2007 and the present time.
Ms Shepherdson informed the testator about Andrew when she was pregnant with him. The testator was also informed in August 1999 of Andrew’s birth. It was the testator who informed David of Andrew’s birth and he visited Andrew on one occasion.
School reports indicate that Andrew has some behavioural problems and needs some extra attention and support at school. Ms Shepherdson cannot afford to pay for extra tuition, health and dental care, or clothes for Andrew.
Summary of Findings
The testator and Dorothea did make significant provision for Kevin during their lifetimes. That provision includes a probable gift of $4,000; a gift of one of the blocks of land derived from the redevelopment of the former Nairne Saleyards; a transfer of the house and shop property at Nairne with Kevin effectively being given a long-term interest free loan of the consideration of $150,000; as well as the provision of paid employment from time to time.
The testator and Dorothea also made gifts to David. This included the gift of the $20,000 used by David to buy the bobcat and truck.
In Jennifer’s case, the testator and Dorothea assisted her to take over the wool shop business, by making a gift of $4,000 of the stock; granting an interest free loan of the balance; waiving the requirement for her to repay the last $1,000 of the stock; and permitting her to keep all of the sale proceeds.
The testator made no provision at all for Andrew.
Consideration of Jennifer’s Claim
In his will, the testator said that he had made no provision for Jennifer and Barbara because he had given them financial assistance, and had made adequate provision for them during his lifetime. On my findings, at least in the case of Jennifer, the financial provision made was no greater than that provided to David, and much less than that provided to Kevin. Further, I consider that the dominant, if not only, reason for the exclusion of at least Jennifer as a beneficiary was the estrangement which commenced in about 1984 and which became entrenched from about February 1990.
The Court is not bound by the statement of reasons contained in the testator’s will. In Hughes v National Trustees Executors & Agency Company of Australasia Ltd,[20] Barwick CJ said:
Such statements do not afford any proof of the objective facts they assert. Nor does their admission into evidence alter in any respect the burden of proof otherwise appropriate to the case.[21]
Later, Barwick CJ said:
When attempting to decide what a particular testator ought as a just and wise father to have done, those reasons which that testator actually entertained for his decision cannot, it seems to me, justly be ignored. Of course if the evidence in the matter does not support such reasons, they cannot be acted upon simply because the deceased asserted or entertained them.[22]
[20] (1979) 143 CLR 134.
[21] Ibid at 138.
[22] Ibid.
In considering Jennifer’s claim, it is necessary to keep firmly in mind that the purpose of s 7 of the IFP Act is not to redress her hurt feelings or sense of grievance at having been excluded from her father’s estate.[23] That is an important consideration because there was an undercurrent in Jennifer’s evidence of a grievance that she and Barbara had not been treated by her father equally with their brothers.
[23] Golosky v Golosky [1993] NSWCA 111.
The existence of a moral duty in the testator towards Jennifer in October 2002 is to be assessed by reference to a number of considerations. First, there is their blood relationship. They did have a loving relationship at least until 1984 and probably continuing to February 1990 when Jennifer acted contrary to her father’s wishes in relation to his mother’s property. Jennifer’s letter in February 1990 concerning their rift concluded with an assertion by her of her continuing love for her father. Next, as at October 2002 Jennifer and Rodney were still establishing themselves at their second Mount Barker home and they still had two children at school. Jennifer did have full-time work but it seems to have been of a relatively unskilled kind. While Jennifer and Rodney were able to provide for themselves and their family, it is to be remembered that the expression “adequate provision” does not refer only to what is sufficient for basic subsistence or for the bare necessities of life.
Jennifer and Rodney had also contributed to the extended Crane family by providing a home to David’s son for between one and two years. In addition, they had made a loan to David at one stage to assist him during a period of financial difficulty.
I accept that while Jennifer and Rodney had by October 2002 obtained a home and furnishings, together with a recreational boat, they had not otherwise accumulated significant assets. Allowance had to be made for the prospect that either could, by reason of illness or accident, have lost their source of income quite suddenly.
On the other hand, there had been a long period of estrangement. This is a very relevant consideration but not one which is fatal to Jennifer’s claim. I adopt the following statement of principle by Holland J in Kleinig v Neal (No 2)[24]:
If it is a case of a parent and child, another circumstance is that the parent was responsible for bringing the child into the world and having done so assumed a duty to be concerned for the child’s welfare. A wise parent will recognise that perfect harmony between parent and child is in the nature of things not to be looked for and that, coming to adulthood, a child will want to make his own life just as the parent had done before him. Differences of outlook between different generations is not exceptional, it is the general rule, so some friction between parent and child or disappointment in a parent’s hopes and expectations concerning his child will be accepted by the wise parent as almost inevitable. If it occurs, the parent who is just as well as wise will not allow such disharmony or disappointment to blind him to the needs of his child for maintenance, education or advancement in life. The duty of a parent towards his child to provide for those needs on his death, if he can, continues in spite of such disharmony or disappointment and the statute obliges the court to consider whether it has been performed. The court must take in the whole scene and make the judgment that it considers that a wise and just parent would have made in the circumstances. Of course, as the statute provides, if the court considers that the character or conduct of the child has been such as to disentitle the child to any or any further benefit from the parent, it may refuse the child’s claim.[25]
[24] [1981] 2 NSWLR 532 at 540.
[25] Ibid at 540.
It is also relevant that Jennifer and Rodney were, by comparison with David and Kevin, living in relatively comfortable circumstances. The provision which the testator and Dorothea had made for Jennifer at a relatively early stage of her working life is also to be kept in mind.
When regard is had to all these factors, and the legal principles referred to earlier, I consider that it is appropriate to conclude that the testator did leave Jennifer without adequate provision for her maintenance and advancement in life. Using the words of King CJ in The Estate of Puckridge,[26] I consider that a reasonable and fair‑minded testator, reflecting dispassionately and free from prejudice arising from the estrangement between himself and Jennifer would have made some provision for her on the basis that it was necessary to do so for her maintenance and advancement in life.
[26] (1978) 20 SASR 72 at 77-8.
In assessing the amount of the provision, I consider that the testator, acting wisely and justly, may well have concluded that the provision in favour of Jennifer should be less than that for David and Kevin. That is because Jennifer and Rodney were in a superior financial position, compared with David and Kevin. Further, the period of estrangement is not to be ignored. It is a relevant factor. A wise and just testator could also have concluded that additional provision was needed for each of David and Kevin. In David’s case he was living (admittedly by his own choice) a relatively simple and frugal life. He was much more vulnerable to loss of employment. In Kevin’s case, the testator could well have concluded that the limitations on his education, intelligence and personality style would make it difficult for him to provide for himself. For this reason alone, he may have wished to make additional provision for Kevin. In addition, there is the fact that each of David and Kevin had provided support and assistance to their parents during the latter years of their life whereas neither Jennifer nor Barbara had done so.
The determination of the amount of appropriate provision is difficult. I have had regard to the matters just mentioned and to my earlier findings regarding the circumstances of each of Jennifer, David and Kevin. Contrary to Jennifer’s claim, I do not consider that provision should be made for her to have 25 per cent of the residuary estate on the basis that the residuary estate should be divided equally between the four children. An order to that effect would not reflect the considerations personal to David and Kevin which I have just mentioned.
In my opinion, the sum of $160,000 would be an appropriate provision for Jennifer and I will direct that that amount be paid to her from the residuary estate.
I add that David submitted that account should be taken in some way of the fact that he had to put at risk his own monies in pursuing or defending, as the case may be, the litigation with Kevin regarding the disputed assets of the estate. Although he sought financial assistance from Jennifer at one stage in relation to that litigation, she declined to participate. Counsel for David submitted that the fact that he had been prepared to put his assets at risk in pursuing Kevin, whereas Jennifer had not, was in some way relevant to the assessment of the provision which should appropriately be made in her favour. I do not accept that submission. I am unable to see that this is a relevant consideration. Jennifer’s failure to provide financial support to David was not disentitling conduct of the kind to which s 7(3) of the IFP Act refers.
Counsel also submitted that Kevin’s conduct which caused the estate to incur substantial legal costs should be reflected in the Court’s order as to the portion of the estate from which the provision to Jennifer should be paid. I do not accept that submission. Kevin’s conduct does not seem to me to be a relevant consideration to the determination of the portion of the estate which should bear the burden of the payment to Jennifer. Further, it was open to David to have Kevin’s conduct reflected in the terms of the Deed of Settlement into which they entered in March 2007.
Accordingly, I will direct that the provision for Jennifer be paid out of the residuary estate and that the burden of it be met by David and Kevin in equal shares.
Consideration of Andrew’s Claim
Courts will often find in IFP claims that a grandchild of a testator has not been left without adequate provision. That is in part because the parents of the grandchild can be expected to provide the necessary support[27] and in part because of the relative remoteness of the relationship between the grandchild and the deceased.[28]
[27] Cf Re Horton [1976] 1 NZLR 251.
[28] Cf In re Wright, Willis v Drinkwater [1954] NZLR 630.
However, in particular circumstances the blood relationship can give rise to a valid moral claim by a grandchild on the bounty of the deceased. This was the view taken by King CJ in The Estate of Puckridge.[29] That moral claim may be less than that of the deceased’s own children, but it may nevertheless be a valid moral claim.
[29] (1978) 20 SASR 72 at 77-8. See also In re Izard, Hunt v Castle [1954] NZLR 234 at 237.
In the present case, I am satisfied that Andrew did have a valid moral claim on his grandfather’s bounty. That moral claim existed even in the absence of a developed relationship between the two of them. In October 2002, Andrew was three years old. He was living in circumstances which can fairly be described as impecunious with no foreseeable prospect of improvement. He was then one of five children living with Ms Shepherdson (the other children being aged 16, 7, 6, and 5). It was foreseeable that Ms Shepherdson would have still further children (as in fact has occurred as Ms Shepherdson has now had eight children).
As at October 2002, Andrew’s father David had taken no interest in him or in his upbringing. In addition, there was no foreseeable prospect that David would take any such interest. He was paying only the minimum amount of maintenance required under the Child Support Scheme. David’s conduct in relation to his other children, also indicated that it was unlikely that he would contribute in any significant way to Andrew’s upbringing. He had relatively little contact with his first two children during their childhood years and took relatively little interest in their upbringing. I accept Jennifer’s evidence that while David’s son was living in her home as part of her family, David made no contact with him and made no contribution to his upkeep.
I also note that David did not assert, in his evidence in this Court, any intention to provide for Andrew or to involve himself in Andrew’s upbringing.
David’s counsel submitted that the testator did not have any moral duty to Andrew because even though he (the testator), Ms Shepherdson and David knew the identity of Andrew’s father, Ms Shepherdson had led Andrew, and others, to believe that the father of several of her other children was also Andrew’s father. It was submitted that the absence of public acknowledgment that Andrew was the testator’s grandson removed any moral obligation. I do not accept that submission. It fails to take account of the fact that it is common place for persons with the care and custody of a young child not to reveal the true identity of the child’s parents until the child is adjudged sufficiently mature to deal with this unexpected information. In the present case, Ms Shepherdson said (and I accept) that she had planned on telling Andrew of the true identity of his father when he turned 10 years, but did so in 2007 when David made his attempt to have access to Andrew. Further, and in any event, the Family Court declaration in 2002 of David’s paternity was a public declaration of that paternity.
In my opinion, a “just and wise” testator in the position of the deceased would have recognised that some specific provision should be made for Andrew because David could not be relied upon to provide adequately for his proper maintenance, education or advancement in life. This distinguished Andrew’s position from the testator’s other grandchildren.
I note that Kevin, as one of the residuary beneficiaries, accepts that it is appropriate for provision to be made in favour of Andrew. However, I do not attach much weight to that. It appeared to reflect Kevin’s resentment of David and, because any provision made for Andrew should be deducted from David’s share of the residue, the provision would not affect Kevin’s financial interests.
The amount of provision for Andrew which the Court should now order is difficult. Andrew is still young, and is only part-way through his education. His financial circumstances are unlikely to change before he reaches adulthood. The provision to him should reflect the relative remoteness of his relationship with the testator.
Having regard to all the relevant factors, I consider that a pecuniary legacy of $50,000 should be made in favour of Andrew. That amount should be deducted from David’s share of the residue, and should be paid to the Public Trustee to be held on Andrew’s behalf and disbursed, from time to time, to meet Andrew’s needs.
Conclusion
For the reasons given above, I consider that each of Jennifer and Andrew have been left without adequate provision for their maintenance, education or advancement in life. I consider that provision should be made for Jennifer by the payment of pecuniary legacy of $160,000 from the residuary estate with that money to be borne equally by the shares of David and Kevin.
In the case of Andrew, provision should be made by the payment of pecuniary legacy of $50,000, which amount is to be paid to the Public Trustee to be held on Andrew’s behalf. That sum of $50,000 is to be borne by David’s share of the residuary estate.
I direct the parties to bring in Minutes of Order to give effect to these orders. I will hear the parties as to costs.
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