Wallace v Wallace
[2025] VCC 135
•30 January 2025 (ex tempore)
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
FAMILY PROPERTY LIST
Case No. CI-24-00858
| IN THE MATTER of Part IV of the Administration and Probate Act 1958 (Vic) IN THE MATTER OF the Estate of SHIRLEY JEAN DANKS, deceased | |
| BETWEEN | |
| IAN WALLACE (who brings this proceeding by his administrator, State Trustees Limited) | Plaintiff |
| and | |
| RHETT DANKS WALLACE | Defendant |
(who is sued as the executor of the Will and Estate of SHERRY JEAN DANKS,
deceased)
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JUDGE: | HIS HONOUR JUDGE FRAATZ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 30 January 2025 | |
DATE OF JUDGMENT: | 30 January 2025 (ex tempore) | |
CASE MAY BE CITED AS: | Wallace v Wallace | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 135 | |
REASONS FOR JUDGMENT
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Subject:TESTATOR’S FAMILY MAINTENANCE
Catchwords: Testator’s family maintenance and provision – application by domestic partner – application for judgment in default of appearance
Legislation Cited: Administration and Probate Act 1958 (Vic), s90, s91; County Court Civil Procedure Rules 2018, r45.03
Cases Cited:Gash v Ruzicka [2023] VSCA 189; Borebor v Keane [2013] VSC 35; Re Papaioannou; Papaioannou v Kronemann [2019] VSC 844; Re Donateo [2021] VSC 792; King v White [1992] 2 VR 417; Re Marsella; Marsella v Wareham [2018] VSC 312
Judgment: Further provision order made
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Acutt | State Trustees Limited |
| For the Defendant | No appearance |
HIS HONOUR:
1Sherry Jean Danks, the deceased, died in May 2021 at age 68. She was survived by her partner of 34 years, Ian Wallace (“Ian”), who is the plaintiff in this proceeding by his administrator, State Trustees Limited. By her last will and testament dated 31 January 2020, the deceased appointed her and Ian’s son, Rhett Danks Wallace (“Rhett”), as executor, and left him the entire estate.
2That estate consists of real property at 264 Yallambie Road, Yallambie,[1] valued at approximately $800,000, together with cash in a bank account and a OnePath investment totalling $43,000, according to the inventory of assets and liabilities.[2]
[1] More particularly described in Certificate of Title, Volume 8847, Folio 613
[2] Affidavit of Natalie Fowler affirmed 9 November 2024, Exhibit NF-1 at page 17
3Ian brings a claim by an originating motion filed on 20 February 2024 against the estate, pursuant to Part IV of the Administration and Probate Act 1958 (“Act”) for further provision by way of 50 per cent of the net residuary estate.
4Following service of the originating motion, Rhett did not file an appearance.
5This trial proceeds under Rule 45.03 of the County Court Civil Procedure Rules 2018 by summons filed 11 November 2024, seeking judgment in default of appearance, further provision under the Act and costs.
6I am satisfied he was served with the originating motion and the materials in support of this application.
7The deceased's will does not set out any explanation as to why provision was not made for Ian, and there is no other evidence available to the Court as to this unusual circumstance in the context of a longstanding and loving partnership.
8The evidence in this case comprised an affidavit of the plaintiff's solicitor, Natalie Fowler affirmed 8 November 2024, and its exhibits,[3] and her further affidavit, affirmed 6 December 2024.[4]
[3] Exhibit 1
[4] Exhibit 2
9Further, the affidavit of Sheryl Klein, sworn 5 March 2024, as to service of the relevant documents upon Rhett.
10I was assisted by written submissions filed by Ian, dated December 2024.[5] Ian also relied on brief oral submissions, to which I will return.
[5] Exhibit 3
The relevant principles
11The determination of an application for provision under the Act is a two-stage process. I must be satisfied, firstly, that the threshold requirements for the making of a family provision under s91(2) are met. I accept that Ian, as the domestic partner of the deceased, is an eligible person within the meaning of s90F of the Act.
12Although undefended, the Court must be satisfied, on the basis of credible evidence, that:
(a) at the time of death, the deceased had a moral duty to provide for the eligible person's proper maintenance and support; and
(b) that the distribution of the deceased's estate fails to make adequate provision for the proper maintenance and support of Ian.
13The questions for the Court to determine in this hearing are whether the will made adequate provision for Ian, and if not, in what amount should further provision be ordered.
14It is uncontroversial that the deceased owed her spouse a moral duty to provide for him. The will made no provision for Ian, so I am satisfied that there is power to make a family provision order.
15The Court must then determine whether to grant a family provision order; and, if so, the amount of any such provision. In doing so, it must take into account the degree to which, at the time of death, the deceased had a moral duty to provide for the eligible person, the degree to which the distribution of the deceased estate fails to make adequate provision for the proper maintenance and support of the eligible person, and the degree to which Ian is not capable, by reasonable means, of providing adequately for his own proper maintenance and support.
16In making a family provision order, the Court must have regard to the deceased's will, any evidence of the deceased's reasons for making the dispositions in her will, and any other evidence of the deceased's intentions in relation to providing for eligible persons.
17Section 91A(2) of the Act lists a number of other criteria to which the Court may have regard.
18In general terms, an order for provision must not provide for an amount greater than is necessary for Ian’s proper maintenance and support.[6]
[6] Section 91(5)(b) of the Act
19The discretion to make a family provision order is to be exercised carefully and conservatively, with reference to the terms of the testator's will and the stated intentions, and according to prevailing community perceptions of the provision that would be made by a wise and just testator. The community usually expects provision from available assets for a partner. I accept State Trustees’ submissions as to the principles to be applied:
[19] In Gash v Ruzicka,[7] the Court of Appeal recently considered Part IV of the Act in the context of a claim by an adult daughter. The Court provided the following useful summary of the principles relevant to making a family provision order (citations omitted):
[7][2023] VSCA 189
In considering what is necessary for proper maintenance and support the Court must assume the position of a ‘wise and just’ testator judged by current community standards. However, the Court should not be drawn into rewriting the testator’s will by reference to general considerations of fairness.’
The parties accepted that the trial judge correctly set out the applicable principles which relevantly included:
In determining whether the deceased has fulfilled his or her moral duty, and the extent of any provision to be ordered, the Court must have regard to the relative concepts of ‘adequate’ and ‘proper’. Adequacy is assessed by reference to the Court’s inherent knowledge and inquiry into current social conditions and standards. In this context, it is necessary that an applicant demonstrate need in order to be successful in his or her claim; mere proof of a moral duty is not in itself adequate. However, an applicant is not required to show that his or her circumstances are destitute and, as such, the need is ‘not restricted to the requirements of basic necessity or sustenance’…..
Overall, the assessment calls for an instinctive synthesis of the relevant considerations and is not an exercise involving precise mathematical calculations.
[20]In Borebor v Keane,[8] Hargrave J described how the Court approaches adequate and proper provision:
[8][2013] VSC 35
Where a will does not make adequate provision for the proper maintenance and support of the particular applicant, and further provision for the applicant will not unduly prejudice other beneficiaries for whom the deceased had a responsibility to make provision, the Court adopts a reasonably generous approach. The cases include some colourful statements of this approach. For example, in Blore v Lang Fullagar and Menzies JJ stated that, in assessing the need of an applicant for further provision, that need may extend beyond ‘the bread and butter of life’ to include ‘a little of the cheese or jam that a wise and just parent would appreciate should be provided if circumstances permit’.
…
[27] Similarly, in Re Papaioannou; Papaioannou v Kronemann,[9] McMillan J said:
The moral duty of a deceased to provide for their spouse’s proper maintenance and support, expressed as a broad general rule, is to provide the security of an appropriate home in which to live, a secure income and a fund to meet unforeseen contingencies, with an entitlement to independence, self-respect and autonomy. As with all general rules, each proceeding ultimately rests upon statutory inquiry of the facts and circumstances, and involves consideration of the applicant’s station in life, age, sex, health and financial resources, the size and nature of the estate, the totality of the relationship between the applicant and the testator, and the relationship between the testator and other persons who have legitimate claims upon his or her bounty.
[28] Therefore, the duty owed to a spouse or domestic partner is said to extend to provision for security of accommodation, income and a fund to meet contingencies. The deceased’s will plainly fails to make adequate provision for the plaintiff’s maintenance and support. The will makes no provision for the plaintiff at all, let alone for the matters mentioned above and leaves the entire estate to their only child, in circumstances where the plaintiff was in a loving and committed relationship with the deceased for over 30 years.
[29] The extent of the moral duty owed to the plaintiff, and the complete lack of provision made for him in the will militates towards a generous award from the deceased’s estate.”[10]
(Footnotes omitted.)
[9][2019] VSC 844
[10] Exhibit 3 – plaintiff’s written submissions at [19]-[20] and [27]-[29]
20The Court's role on this occasion is to assess what is the least amount that a wise and just testator, wishing to leave all of her residuary estate to her only child, would nonetheless leave, albeit, reluctantly to her partner, having regard to her strong moral obligation to provide for him.[11]
[11] Gorton J in Re Donateo [2021] VSC 792
Summary of the evidence
21Ian was born in March 1947 and is 77 years old. He commenced a relationship with the deceased in or about 1987. Rhett, sole beneficiary under the will, is Ian and the deceased’s son.
22Ian suffers from dementia and various other significant health conditions, including depression and anxiety. Since 2022, he has resided at an aged care facility at Whittlesea Lodge on a permanent basis. His affairs are managed by State Trustees, who were appointed his administrator for financial matters by the Victorian Civil and Administrative Tribunal on 18 May 2023. On 10 October 2023, VCAT made further orders authorising State Trustees to contest the deceased's will on Ian’s behalf.
23In oral submissions, counsel for Ian explained to the Court that the latter application and order authorising it to contest the deceased's will on Ian's behalf was made in the context of wishes expressed by Ian to Ms Fowler for provision to his son to be maintained.
24As Ian is a protected person and a vulnerable person, I accept the authority and the approach taken by State Trustees to make the application for further provision. I acknowledge its position that, ultimately, the order sought in terms of further provision was quite conservative, which reflected Ian’s expressed wishes.
25The amount sought by way of further provision by State Trustees on Ian’s behalf was a fixed amount of $425,000.
26There is no evidence on the face of the will. or otherwise, as to why the deceased omitted Ian, her domestic partner for over 30 years, as a beneficiary in her will. I accept State Trustees’ submission that Ian and the deceased remained in a committed relationship up until the deceased passed away. They lived together, had enmeshed their finances and lives, and raised a child over the course of their relationship.
27I accept the submission that Ian’s omission as a beneficiary is inexplicable and could not be considered the act of a wise and just testator. Further, it does not align with community expectations. I note by way of example pointed out by State Trustees that, were intestacy provisions to apply to this situation, Ian would be entitled to the entire estate.[12]
[12] Section 70K of the Act
28I have the benefit of an assessment of needs report dated 26 April 2024[13] prepared by Grace Drysdale, who has been working professionally within various areas in the community care sector for over ten years. She has a Bachelor of Applied Science, a Bachelor of Education and a diploma, and various other relevant qualifications. I accept her expertise to express the opinions contained in her report, where she uses various assessment tools and provides a careful analysis of Ian’s current circumstances and needs. It confirms and provides evidence of the various medical diagnoses and sets out his accommodation and other needs in the “Recommendations” section in her report.
[13] Affidavit of Natalie Fowler affirmed 9 November 2024, Exhibit NF-1, page 31
29In a table contained across several pages of the report, she sets out:
(a) “Total once-off costs” needed for various items in the sum of $28,205; and
(b) “Total ongoing costs” – excluding once-off payment items – in the sum of $40,924.
30I accept her evidence.
31Ms Fowler has deposed, at paragraph 30 of her second affidavit that, due to his age, Ian does not receive the benefit of NDIS funding.
32There is no evidence of any other competing need, Rhett having chosen not to take any part in this proceeding.
Findings
33Ian bears the onus of proof, on the balance of probabilities, of the justification for the claim.
34Upon consideration of the matters referred to above, I am satisfied Ian is a person for whom the deceased had a responsibility to make adequate provision for his proper maintenance and support. I find the deceased had a strong moral obligation to provide for his maintenance and support as at the date of her death. The evidence establishes an overwhelming need.
35In considering whether further provision should be made, the Court must take into account the factors in s91(4) and s91A(1) of the Act.
36It must have regard to the deceased's will; it is the first mandatory consideration in s91A. In the absence of any evidence of reasons, or agreement with Ian, to leave the entire estate to his son, it is difficult to conclude a wise and just testator would provide no legacy for her partner, who has very significant financial need, contributed to the estate and cared for her at the end of her life.
Section 91A(2) discretionary considerations
37In terms of the s91A(2) discretionary considerations, I make the following findings.
(a) any family or other relationship between the deceased and the claimant, including the nature and length of the relationship
38The deceased and Ian were in a de facto relationship from 1987 and remained so until the deceased's death, and Ian cared for the deceased during the latter part of her life.
(b) any obligations or responsibilities of the deceased to the claimant, any other eligible person or beneficiary of the estate
39The deceased's primary obligation was to her partner, Ian, arising as part of being a spouse for over 34 years. The deceased also potentially owed a moral obligation to her son, Rhett.
40As noted above, I am informed by Ian’s counsel that he wishes for provision to be retained for his son as part of the outcome of this application.
(c) the size and nature of the estate
41The estate has an approximate value of $840,000, which resolves into a finding that there are sufficient funds available to make an award of further provision for Ian that will materially benefit his circumstances, while also retaining a level of funds for Rhett.
(d) the financial resources, including earning capacity, and the financial needs of the claimant, any other eligible person or beneficiary of the estate at the time of the hearing and for the foreseeable future
42Ian has acute financial need and is incapable of providing for his own maintenance and support. He has no assets and is completely dependent on a government pension to fund all the costs of his daily living as well as his medical accommodation and care costs. He is currently indebted to his nursing home. He is paying a significant daily accommodation fee and does not have the funds for a refundable accommodation deposit.
43He is in arrears with the aged care facility. He requires funds for even the most basic living expenses and I refer again to the report of Ms Drysdale. I accept the submission that, the fact his accommodation costs are currently being met by Centrelink, is no basis to diminish his financial need or discount any provision that may be awarded.[14]
[14] Hedigan J in King v White (1992) 2 VR 417 of 424
44I accept the evidence of Ms Fowler that currently Ian has $1,405 in savings and is in debt in the amount of $8,836 to the nursing home. His total budgeted fortnightly income is $1,106, being the aged pension, while his expenditure is $1,039. This leave a net $20 per week to use for discretionary spending in his current circumstances.[15]
[15]Affidavit of Natalie Fowler, affirmed 8 November 2024, paragraph [18] at page 4
45There is no competing financial need demonstrated.
46I accept the submission that, in the absence of any level of competing need, the Court can readily disturb the provision made to Rhett in the circumstances of this proceeding.
(e) any physical, mental or intellectual disability of any eligible person or beneficiary of the estate
47Ian is an elderly man suffering from dementia, with high-care needs and no capacity to look after himself or make decisions about his affairs. In addition to dementia, he suffers from diabetes, anxiety, depression and cirrhosis of the liver.
(f) the age of the claimant
48Ian is 77 years old.
(g) any contribution of the eligible person to building up the estate or the welfare of the deceased or her family
49Ian contributed to the welfare of the deceased as a loving partner and cared for her in her later years. He was involved in the build-up of the major estate asset, being the estate property in Yallambie. In her second affidavit, Ms Fowler deposed to her instructions as to the history of the relationship. I infer and accept the submission that Ms Fowler formed the view that, notwithstanding his disability, Ian had capacity to provide those instructions and has some understanding as to the nature of this proceeding.
50Ms Fowler deposed as follows:
“…
a)At the commencement of their relationship in around the late 1980’s both he and the deceased owned their own real properties. As their relationship progressed, a joint decision was made that [Ian] would sell his property to live with the deceased at a property registered solely in the deceased's name, being the Yallambie property. Both the deceased and [Ian] pooled their finances together and made repayments to the mortgage of the Yallambie property.
…
c)The title to the property was never changed to reflect [Ian’s] contributions to the household and relationship expenses over a period of 34 years.
d) [Ian’s] redundancy payout (in the late 1980’s / early 1990’s, when [Ian] was working for Colgate) was also paid towards the mortgage over the estate property.
e)[Ian] lived at the estate property, in a loving committed relationship with the deceased until she died. In the later years of her life, when she was very ill, [Ian] provided the deceased with a significant level of care.” [16]
[16] Affidavit of Natalie Fowler affirmed 6 December 2024, paragraph [11] at page 2
I accept that evidence.
(h) any benefits previously given by the deceased to the claimant, any other eligible person or any beneficiary
51Not relevant.
(i) whether the claimant was being wholly or partly maintained by the deceased before his death
52The deceased provided financial benefits to Ian to the extent they cohabited at the Yallambie property.
(j) the liability of any other person to maintain the eligible person
53Ian is completely dependent on his Centrelink pension for all his needs. The only other person who might be said potentially to have a duty to look after Ian is Rhett, who currently receives the entirety of the deceased's estate.
(k) the character and conduct of the eligible person or any other person
54This factor supports the application for further provision.
55The evidence establishes, on a prima facie basis, that Rhett was Ian’s attorney under power. Investigations undertaken by State Trustees, since being appointed administrator, reveal very significant (alleged) misuse of Ian’s funds by Rhett during his time as attorney.[17]
[17] Affidavit of Natalie Fowler affirmed 6 December 2024, paragraphs [17]-[24] at page 4
56On the evidence available to me, I accept the submission that a cause of Ian’s impecuniosity and financial need is Rhett’s conduct when under a fiduciary duty to act in his interests. The evidence indicates that misuse of funds might extend to the sum of up to $200,000.
57I accept the submission that this circumstance does weigh in favour of an award of provision to Ian from an estate that presently goes solely to Rhett.
(l) the effects a family provision order would have on the amounts received from the deceased’s estate by other beneficiaries
58The estate is large enough that the award for provision sought by Ian would still preserve a significant inheritance to Rhett, in accordance with the deceased's intention and Ian’s wishes.
(m) any other matter the Court considers relevant
59Not relevant.
60Taking into account all the above factors, it is appropriate for the Court to make an order for further provision to a longstanding spouse who made significant contributions to the estate, who cared for the deceased in the final years of her life and otherwise contributed to the estate in material respects. Ian has no assets and high financial needs due to his various health conditions.
61I find the deceased owed Ian a high moral obligation.
62State Trustees submit, on Ian’s behalf, that the Court ought fix a conservative amount of family provision, no less than 50 per cent of the entire estate, which resolves into a fixed pecuniary sum in the amount of $425,000.
63I find that, having regard to the size of the estate, the length of the relationship and Ian’s high financial needs, the community expectation may well be that the deceased ought to have left her entire estate to him. This is so in circumstances where the financial position of their son Rhett is unknown.
64McMillan J summarised the relevant principles in Re Marsella; Marsella v Wareham:[18]
“As a broad general rule, the duty of a testator is to provide a surviving spouse with the security of an appropriate home in which to live, a secure income and a fund to meet unforeseen contingencies, with an entitlement to independent self-respect and autonomy. … .”
(Footnote omitted.)
[18] [2018] VSC 312 at paragraph [109]
65In all the circumstances, a wise and just testator would view provision in a pecuniary amount of $500,000 as adequate and proper, having regard to the size of the estate, Ian’s age, the evidence as to his ongoing needs and the deceased’s desire to provide for her son.
66This amount provides for an amount that is no greater than is necessary for Ian's proper maintenance support, having regard to his health and need for stable, certain accommodation and treatment, and a minimal fund to meet unforeseen contingencies. The amount of $500,000 is appropriate provision for a partner who is in a state of significant financial need, because it will secure his accommodation and provide for his treatment needs, as set out in the needs report, independently of his government pension.
67It acknowledges his limited financial reserves to meet his own needs, inability to earn an income and need for accommodation in a nursing home, where the evidence establishes he is currently happy. The amount will provide him with some flexibility to deal with future contingencies.
68Ian seeks indemnity costs against Rhett personally. The Court has a broad discretion in family-provision cases in relation to costs and the appropriate orders generally depend on the overall justice of the case.
69The appropriate order, in light of the fact that Rhett is the residuary beneficiary of the estate, is that Rhett, in his capacity as executor, pay Ian’s costs of the proceeding out of the estate, on a standard basis to be determined by the Costs Court in default of agreement.
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