Webb v Ryan
[2012] VSC 377
•3 September 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. SCI 2010 06966
IN THE MATTER of the Will and Estate of DANIEL JOHN NORTH, deceased
and
IN THE MATTER of Part IV of the Administration and Probate Act 1958
BETWEEN
| GRAEME COOPER WEBB & ORS (ACCORDING TO THE SCHEDULE ATTACHED) | Plaintiffs |
| and | |
| MICHAEL RYAN & ANOR (AS EXECUTORS OF THE ESTATE OF DANIEL JOHN NORTH, DECEASED) | Defendants |
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JUDGE: | WHELAN J | |
WHERE HELD: | Melbourne | |
DATES OF HEARING: | 6, 7, 8, 13, 14 August 2012 | |
DATE OF JUDGMENT: | 3 September 2012 | |
CASE MAY BE CITED AS: | Webb & Ors v Ryan & Anor | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 377 | Amended 20 September 2012 |
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WILLS – Family Provision – Responsibility to non-family business partners and friends, and their children – Requisite responsibility not established – Administration and Probate Act 1958, Part IV.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr S Baker | Thomas Egan |
| For the Defendants | Mr G A Devries | Mahons with Yuncken & Yuncken |
HIS HONOUR:
The plaintiffs are all members of one family. Mr Graeme Webb and Mrs Valda Webb are the parents of Melissa Webb, Jason Webb, Matthew Webb, and Renee Webb. The late Daniel North, and his late wife Kathleen North (nee Ryan), were business partners of Graeme and Valda Webb. They worked together for many years in a business initially established by Mr and Mrs North, and which was eventually conducted by a company named Norwebb Pty Ltd (“Norwebb”). The Norths owned 52% of the shares in Norwebb and the Webbs owned 48%.
Kathleen North died in June 2007, leaving everything to her husband. Daniel North died on 30 January 2010. By his last will made on 20 January 2010, he left his estate to 14 nieces and nephews of himself and his late wife. Before he died he made dispositions which had the effect of paying off all of the external secured debt of Norwebb and he transferred his 52% shareholding to Graeme and Valda Webb for a nominal sum.
The plaintiffs have brought this proceeding against the executors of Daniel North’s estate. They are Michael Ryan, one of the deceased’s nephews on the Ryan side, and Travis North, one of the deceased’s nephews on the North side. The claim is brought under Part IV of the Administration and Probate Act 1958 (Vic) (“the Act”). The plaintiffs say that Daniel North had a responsibility to make provision for their proper maintenance and support and that the court should order that that provision be made.
Thirty-seven affidavits sworn by family and friends of the parties were relied upon at trial. Sixteen of those deponents were required to attend for cross-examination. The trial occupied five sitting days. But for the commendable efforts of both counsel, it would have gone considerably longer.
Daniel North’s estate is not a large one. It is being held in cash. Before account is taken of the costs of this proceeding, it totals approximately $970,000. Needless to say the costs of this proceeding have the potential to reduce it significantly.
The part of the Act under which this claim is brought is still entitled “Family Provision”, but since 1997 claims under Part IV have not been confined to claims by family members. Any person who establishes that he or she is a person to whom the deceased had a responsibility to make provision may, if adequate provision was not made, obtain an order. In considering whether there was a responsibility to make that provision, whether adequate provision was made, and what the adequate provision should be, the court is required to have regard to a list of specified matters.[1]
[1]Section 91(4)(e)-(p) of the Act.
The Webbs and the Norths
Valda Webb and Daniel North began working together at the same company in the 1960s. Later Mr and Mrs Webb and Mr and Mrs North all worked together for a business called VDO Instruments. In about the mid-1980s the Norths left VDO. Eventually they established a small engineering business in West Heidelberg. Mr North continued to have business dealings with Mr Webb. Mr and Mrs Webb left VDO in 1994 and joined the business which had been established by Mr and Mrs North. The Webbs did not make any capital contribution on joining the business but they sacrificed salary and loaned the business a sum of $8,500. At that stage Mr North held 51% of the shares in the company which owned the business. Kathleen North held 25% and Mr and Mrs Webb held 12% each. In April 1998 Norwebb took over the conduct of the business, with the Norths holding 52% of the shares and the Webbs 48%.
The Norths had no children. The Webbs had four children. All the Webb children eventually worked in some capacity for Norwebb, as did Mathew Webb’s partner, Shannon Cooper.
Mr and Mrs Webb and Mr and Mrs North all worked together until Kathleen North died in 2007 after a long illness with cancer. By then Mr North had also been diagnosed with cancer.
The Webbs and the Norths were not just business partners, they were also good friends. Before Kathleen North died, they would socialise together on a regular weekly basis. They shared significant family events together. It was suggested by Mr Webb that they spent almost every Christmas day together for twenty years until Christmas 2006, but in his cross-examination he accepted that the Norths spent Christmas in 2004 and 2005 with members of the Ryan family, as had been sworn to by one of the Ryan family.
Mr and Mrs Webb are still employed in the business. The heavier work in the business has for some time been undertaken by Jason and Matthew Webb, who work in the business full time. All the Webb children are now in their 30s.
Daniel North also died after a long illness. It is not entirely clear from the evidence how long he spent in hospital at various times, but it was many weeks, perhaps twenty weeks or so. The Webbs acknowledge that his own family (the Norths and the Ryans) looked after him during his long illness. Mr Webb told me that his family felt that they were being kept at a distance by members of Mr North’s own family.
The plaintiffs say that their relationship with Mr and Mrs North was for all practical purposes a family relationship. They say that both Daniel North and Kathleen North told the Webb children that they would be beneficiaries under their wills and would be “looked after”. Melissa and Renee Webb say that Mr North showed them a will in which the Webb children were named as beneficiaries. Mr and Mrs Webb, for their part, say that Daniel North’s will failed to make provision to reflect an arrangement which the four of them had made amongst themselves about certain IOOF life insurance policies.
Legal principles
The history of the court’s jurisdiction in relation to what was traditionally called testator’s family maintenance, and the interrelationship between that history and the current provisions, was set out by Warren J (as she then was) in Lee v Hearn.[2]
[2][2002] VSC 208 [36]-[39].
Counsel in this proceeding provided me with a catalogue of decisions made under Part IV.
There are two decisions which are of particular assistance, both in setting out the applicable general principles, and in addressing issues of importance in this proceeding. Those decisions are the judgment of Harper J in Schmidt v Watkins & Anor[3] and the judgment of Kaye J in Unger v Sanchez.[4]
[3][2002] VSC 273 (‘Schmidt’).
[4][2009] VSC 541 (‘Unger’).
It is clear that since the amendments made to the legislation in 1997 an applicant under Part IV of the Act need not be a member of the deceased’s family. But it is significant that in dealing with the relationship between the applicant and the deceased, the Act imposes a requirement that the court have regard to “any family or other relationship” between the deceased person and the applicant.[5] The reference to “other relationship” gains colour from the specific reference to family. Thus, where the applicant is not a family member this factor, the continued use in the legislation of the concept of “proper maintenance and support”,[6] and the historical origins of the legislation, all combine to focus the inquiry on whether the deceased and the applicant had a relationship which, at the least, had a material resemblance or equivalence to the type of family relationship from which notions of moral duty and obligation are commonly derived.[7]
[5]Section 91(4)(e) of the Act.
[6]Section 91(1) of the Act.
[7]Unger [70], [74].
An important feature of Part IV is that it is directed towards provisions for “proper maintenance and support”. The Part is not concerned with an obligation to reward a person or with the distribution of estates according to individual notions of fairness or equity.[8]
[8]Unger [65].
Since the 1997 amendments, the court is required to undertake a three stage process. First, it must decide whether or not the applicant falls within that class of person for whom the deceased had a responsibility to make proper provision for maintenance and support. If so, the court must decide whether the applicant has been left without adequate provision for his or her proper maintenance and support. Finally, the court must determine what provision out of the estate would have been made by a wise and just testator. There is significant overlap in the considerations referable to each stage of the process.[9]
[9]Schmidt [6], [8]; Unger [60].
The 1997 amendments are part of a continuum, rather than a complete break with the past.[10] One important feature of the historic context is the importance which must be attached to the freedom of testation. The court will only intervene when that freedom has been abused by a failure by the deceased to fulfil his or her responsibility to an applicant.[11]
[10]Unger [69], citing MacEwan v Shaw [2003] 11 VR 95, McKenzie v Topp [2004] VSC 90, Iwasivka v State Trustees Limited [2005] VSC 323.
[11]Schmidt [8], [12], [14], citing Grey v Harrison [1997] 2 VR 359, 366; Unger [64].
Because of the seriousness of the allegation that a testator has abused his or her freedom of testation, the principles concerning the qualities of the proofs required, as set out in Briginshaw v Briginshaw,[12] need to be borne in mind.[13]
[12](1938) 60 CLR 336.
[13]Schmidt [17]-[21].
An important matter which may arise in these kinds of cases is the difficulty of assessing evidence concerning things allegedly said by a person who is dead. The court can never be certain it knows all the circumstances, and more often than not one may be sure that the court knows few of them. It is impossible to hear what the other party to the conversation, the deceased, says about it. There is a significant risk of reconstruction. There are dangers in relying on evidence of what may have been a casual observation made to a person who at the time had no reason to remember the exact words used. In the light of these concerns, a substantial burden is placed upon an applicant whose case relies upon such evidence. Such evidence must be very carefully examined.[14]
[14]Schmidt [19], [20], citing Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9, Thwaites v Ryan [1984] VR 65.
The kind of non-family relationship which will give rise to a responsibility to provide for a person’s proper maintenance and support will be a rare and exceptional one. A mere business relationship would not be enough. A relationship of friends or neighbours founded on acts of kindness or consideration well beyond the ordinary, even extraordinary generosity over an extraordinarily long period, may not do so. Contributions made to a deceased’s estate may perhaps give rise to a responsibility but generally they would not do so of themselves. A relationship might be special as a result of a wealth of shared experience, but that does not necessarily constitute a relationship by virtue of which there is a responsibility to make provision.[15]
[15]Unger [70]; Schmidt [22], [23], [25], [51].
Unger and Schmidt themselves constitute examples of the kinds of non-family relationships which will, and which will not, give rise to a responsibility in the deceased.
In Schmidt the applicant claimed to have been the deceased’s defacto husband and also claimed to have given financial support to the deceased beyond that to which she was legally entitled as a result of joint business interests which they had. The judge rejected those claims. There were other features of the relationship relied upon which the judge found did exist. The applicant and the deceased had been business partners for many years. They had resided together in the same house for ten years. They had frequently dined out together. The deceased had been the “surrogate grandmother” of the applicant’s granddaughter. The applicant had looked after the deceased in her final illness. All of that was held not to be enough.
In Unger, on the other hand, a neighbour of the deceased essentially took on a role equivalent to that of a most dutiful daughter. The trial judge found there that the applicant had displayed what he described as “quite extraordinary” dedication and self-sacrifice, and had given “invaluable and indispensable” support to the deceased over a considerable period. That was held to be enough, although the provision which the applicant sought was substantially more than what the trial judge was prepared to order.
The Webbs’ case
Counsel for the plaintiffs, who I will refer to together as the Webbs, frankly conceded from the outset of the trial that the claim in this proceeding was novel and unusual.
Certain uncontroversial features of the relationship between the deceased, Mr North, and the Webbs reveal why this claim was so characterised. Those features are:
(1)There was no family relationship between the Webbs and the deceased.
(2)There were never any shared domestic arrangements. None of the Webbs has ever lived under the same roof with the deceased.
(3)Both the deceased and his wife died after long illnesses. The Webbs’ evidence does not reveal that they had any more involvement with Mrs North when she was ill than might be expected of very good long term friends. It is uncontroversial that Mr North’s own family undertook the significant burden of his care through what was his long final illness.
(4)The deceased made dispositions during his lifetime which had the effect of repaying all of the external secured debt of Norwebb, and he then transferred his 52% shareholding to Graeme and Valda Webb for $52.00.
(5)Mr North made four wills during his lifetime which have been located. They were made on 27 November 1999, 13 February 2008, 15 July 2008 and 20 January 2010. None of those wills made provision for the Webbs beyond the dispositions which Mr North eventually undertook in his lifetime in relation to Norwebb.
(6)Apart from their mutual involvement in the business, there is no suggestion of any conduct by any of the Webbs towards Mr North which could be described as involving extraordinary dedication or self-sacrifice.
(7)There was not at any time any financial dependency between any of the Webbs and Mr North, with the exception of the financial interrelationship necessarily inherent in what was, in substance, their business partnership.
By the end of the hearing, it seems to me that the Webbs’ case amounted to this:
(1)All the Webbs, and Mr North and his wife, worked together in the Norwebb business for many years. Norwebb was just like a family business, and that “family” included the Webbs and Mr and Mrs North.
(2)The Webbs and Mr North also socialised a lot over their years in business together, particularly before Mrs North died. Mr and Mrs North saw the Webb children growing up and participated in their lives in a way family members would do. They celebrated important occasions together.
(3)Mr North and his wife, and Graeme and Valda Webb, had an arrangement or understanding about certain life insurance policies with IOOF which Mr North failed to fulfil.
(4)The Webb children were told by Mr North that they would be beneficiaries in his will, and he showed Melissa Webb and Renee Webb a will or draft will which named the Webb children as beneficiaries.
(5)Jason and Matthew Webb in particular have made significant personal sacrifices for the sake of the Norwebb business.
The affidavits relied upon by the Webbs contained a good deal of material directed towards establishing that Mr and Mrs North were estranged from their own families and had little or nothing to do with them. There was also a good deal of material directed towards establishing, or at least suggesting, that Mr North had been pressured to “change” his will by his family so as to remove the Webb children. Mr Graeme Webb in his oral evidence took every opportunity to assert this.
These matters were not pursued in final addresses, and rightly so. What the Webbs deposed to about these matters was contradicted by evidence from the North and Ryan families, which was unchallenged. These suggestions were also inconsistent with the four wills which Mr North undoubtedly did make. Leaving aside provisions concerning Norwebb which Mr North eventually dealt with in his lifetime, all four wills bequeath his estate to his nieces and nephews.
There was also material in the affidavits relied upon by the North and Ryan families directed towards establishing, or suggesting, that the relationship between the Webbs and Mr and Mrs North soured and deteriorated over the years. I do not think that that material represented the position fairly either. I accept that whilst Mr North’s involvement with the Webbs did decline after his wife’s death and during his own long illness, the relationship with the Webbs had been for a long time a very close relationship as business partners and friends.
Problems with the Webb evidence
There were a number of features of the evidence given by the Webbs which caused me concern. I do not suggest that any of them were being consciously dishonest, but in my view the evidence of each of them was rendered less credible by a preparedness to omit from their account of events matters which would not assist their case. I particularly refer to the following:
(1)It was a matter of obvious significance that before his death and before transferring his Norwebb shares to Mr and Mrs Webb for a nominal sum, Mr North had repaid all of Norwebb’s external secured debt. Neither Mr Webb nor Mrs Webb mentioned that in their affidavits. Indeed, in my view their affidavits clearly conveyed the impression that that debt, which was owed to Citibank and was secured by mortgages over the two family homes, remained outstanding. Mrs Webb in her affidavit sworn 8 April 2011 deposed: “I and my husband own our own home at Diamond Creek which is valued at $340,000. Our home is mortgaged to Citibank as security for Norwebb’s business overdraft facility limit of $180,000”. In his affidavit sworn 10 June 2011 Mr Webb deposed to their assets including “the limited equity of approximately $160,000 in our matrimonial home”. In fact, Mr North made payments before he died which reduced the Citibank debt to zero or close to zero.
(2)Both Renee Webb and Melissa Webb deposed in their affidavits to the fact that they had undertaken house cleaning for both Mr and Mrs North. They did not reveal, until cross-examined, that they were paid for doing so. They maintained that their payment, $15 per hour according to Renee and $10-15 per hour according to Melissa, was a reimbursement of expenses.
(3)In his affidavit Jason Webb swore: “In my teen years I was apprenticed to the deceased”. In his cross-examination he agreed that in fact he had been apprenticed to his own father, Graeme Webb. When asked for an explanation he described himself as having had “2 masters”. That was no doubt true in practice, but it is, in my view, an unsatisfactory explanation for why he swore that he had been apprenticed to Mr North.
(4)It was very difficult for me to determine in the course of their oral evidence what involvement the Webbs had had with Mr North during his final illness and his long periods of hospitalisation. It seemed to me that all the Webbs were reluctant to be specific and frank about that. It appears that they had visited him, perhaps, two or three times.
(5)All the Webbs in their affidavits referred to discussions with Mr and Mrs North about their wills. All the discussions they deposed to concerned statements said to have been made by the Norths to the effect that they intended to benefit the Webb children. Melissa and Renee Webb also both deposed to occasions upon which they say that Mr North showed them a will naming the Webb children as beneficiaries. None of the Webbs in their affidavits referred to the fact that Jason Webb had witnessed a handwritten will made by Mr North in February 2008 which did not name them as beneficiaries and that Mr North had shown Graeme Webb and Shannon Cooper (Matthew Webb’s partner) the will he made on 15 July 2008 which, apart from dispositions concerning Norwebb which he eventually undertook in his lifetime, made no provision for the Webb family. It was only in the course of the oral evidence that it emerged that all of the Webbs knew about the 15 July 2008 will at the time.
(6)Jason Webb gave oral evidence of a conversation which he had had with Mr North prior to his death in which the deceased had attempted to persuade Jason to purchase his shares in Norwebb from him for $104,000. This conversation was not, in my view, consistent with the way in which the Webbs characterised their relationship with Mr North. Jason Webb had not referred to it in his affidavit.
The Webbs are not sophisticated people. They explained the omissions from their affidavits by reference to their inexperience in proceedings of this kind. I accept that that is part of the explanation. But the matters to which I have referred nevertheless lead me to be cautious when considering their evidence concerning things said and done by Mr and Mrs North, who are no longer here to give their account of the events.
Assessing the Webb claims
The Webbs characterise the relationship between Mr and Mrs North and the Webb children as being almost parental in nature. The evidence does establish that Mr and Mrs North took an interest in the Webb children and had fond regard for them. I am not persuaded that they treated them as if they were their own children.
Apart from small cash gifts, it is not suggested that the Norths ever gave the Webb children any financial support, beyond working with them in the business they owned together with their parents. Kathleen North’s will made on 27 November 1999 does not mention the Webb children. None of Daniel North’s four wills which have been found mentions them. It seems to me to be significant that the uncontradicted and unchallenged evidence is that whilst there were many photographs in the North home of members of the North and Ryan families there were no photographs displayed there of the Webb children.
In the end, there were, in my view, only three matters which might be said to take the relevant relationships out of the ordinary; in other words, beyond that of good friends and business partners. They are the suggested arrangement about the IOOF life policies, what Mr North is said to have said about his intentions (including showing Renee Webb and Melissa Webb a will or draft will), and the personal sacrifices of Jason and Matthew Webb for Norwebb.
The IOOF insurance policies
Evidence in relation to what was said to be an arrangement concerning certain IOOF life insurance policies was given by Mr Graeme Webb. His wife agreed with, and adopted, in her affidavit what Mr Webb had deposed to by reference to the relevant paragraphs of his affidavit without giving any separate account herself.
In his affidavit sworn 8 April 2011 Mr Webb deposed that the arrangement concerning the IOOF insurance was as follows:
When the four of us as part of our business plan commenced investment with IOOF superannuation we were offered either a $150,000 or a $250,000 Insurance cover. We all agreed together to each take up the larger amount and when one of the four passed away the amount was to be divided amongst the surviving partners for the benefit of Norwebb.
He also deposed in the same affidavit that at the time when Mr North was arranging to transfer his shares in Norwebb to Mr and Mrs Webb, and at the time when he did so, Mr North told them that “Valda and I were the beneficiaries of his company key man life insurance policy”.
The issue as argued before me concerned the proceeds of Kathleen North’s IOOF insurance. I heard almost no evidence about Mr North’s insurance and no submission was made about it.
Mr Webb did not reveal in his affidavit of 8 April 2011 (or in a second affidavit which he swore on 10 June 2011) that Mr North had in fact used the proceeds of Kathleen North’s IOOF insurance to repay the Norwebb secured debt. In his oral evidence Mr Webb said that approximately $150,000 had been paid by Mr North, in two tranches, so as to reduce the company’s secured debt to zero. Mr Webb said that Mr North had retained $100,000, which should also have been paid into the company according to Mr Webb.
The position as to what had occurred in relation to Kathleen North’s IOOF insurance money was not clarified until Richard Fitzgerald, a chartered accountant who prepares the accounts for Norwebb, was called to give evidence late in the trial. He produced the relevant financial records and explained that there had been a secured debt owed by the company to Citibank. This debt had been divided in Norwebb’s books into two accounts one in the name of Mr and Mrs North and the other in the name of Mr and Mrs Webb. After Mrs North died, Mr Fitzgerald said that Mr North paid out both components of the secured debt, or, more accurately, reduced the amount due to zero or close to zero. Mr Fitzgerald could not be definite on the source of the funds save to say that it was from insurance policies held by Mr and Mrs North. He did reveal that the total amount which Mr North paid into Norwebb was $210,000. He said that the secured debt at that time (both the Webb and the North components) was less than that, approximately $170,000. Mr Fitzgerald explained that these transactions resulted in a debt being owed by Norwebb to Mr North. Mr Fitzgerald said that on Graeme Webb’s instructions that debt was transferred after Mr North’s death to the Webbs. Mr Fitzgerald did not say to which individuals the debt was transferred, but I assume it was to Graeme and Valda Webb who were then the only shareholders and directors.[16]
[16]In the course of the hearing before me counsel on behalf of the defendants, the two executors, disavowed any intention of pursuing that matter.
In the course of his oral evidence Mr Webb gave a fuller explanation of the circumstances in which the IOOF insurance was taken out. He said that the issue arose when the company was arranging an overdraft from Citibank. Citibank was taking security by way of a mortgage over the North family home and a mortgage over the Webb family home. Mr Webb agreed that the IOOF insurance was protection against the possibility that a death of one of the partners might imperil the family homes. Each of them took out a policy naming their spouse as beneficiary. The beneficiary of Kathleen North’s policy was Mr North.
In the will which Mr North made on 15 July 2008 he bequeathed his shares in Norwebb to Graeme Webb and Valda Webb, he forgave any debt owed to him by Norwebb, and he then made the following provision:
I give to Norwebb Pty Ltd so much of the proceeds of any life insurance policy owned by me as is necessary to discharge Norwebb Pty Ltd secured loans. In this clause “secured loans” shall include any loan secured by way of a charge over real estate or personal estate or by any personal guarantee.
In the handwritten will made in February 2008, which is very similar to the 15 July 2008 will, the provision reads:
I give so much of the proceeds of any life insurance policy to Norwebb as is necessary to discharge any secured bank loans.
The provisions which Mr North made in his will of 15 July 2008 and in his February 2008 will are consistent with what he then did during his lifetime. Indeed, he went further in his lifetime, in that he paid more money into the company than was required to repay the secured debt.
On this issue I am not prepared to accept Mr Webb’s uncorroborated evidence. He omitted from his affidavits an obviously important matter and no satisfactory explanation was given for doing so. He did address the matter of Mr North’s payment in oral evidence in chief (not entirely accurately, as subsequently revealed by Mr Fitzgerald), but by then affidavits filed on behalf of the defendants had referred to action having been taken by Mr North to render Norwebb “debt free at considerable personal cost”.
Mrs Webb in her affidavit gave no independent account of the alleged arrangement concerning the insurance policies. Although she has always been the bookkeeper for the business, in her cross-examination she professed ignorance of the level of the Citibank debt at relevant times, before eventually accepting that at the time the shares were transferred to her and her husband the debt was zero. I do not consider that her evidence relevantly bolstered that of her husband.
The provisions of Mr North’s 2008 wills and his conduct in paying $210,000 into the company before the share transfer suggest that he did feel that he was under some form of duty or obligation to do what he did. On the other hand, neither the Webbs nor Kathleen North made any similar or equivalent provisions in their wills. Further, the evidence reveals that Mr North was very concerned about the future of the Norwebb business. His conduct may well be explicable by a desire to ensure that the business was preserved for the Webb family, rather than what might be characterised as performance of an obligation.
I am unpersuaded that Mr North had any obligation to do more than he did do. I did not find Mr Webb and Mrs Webb’s evidence to be reliable on this issue. Evidence which is reliable is what Mr North provided for in his 2008 wills and what he did in his lifetime. But the others who are said to be parties to this arrangement made no equivalent provisions in their wills, and his conduct may have been motivated by concern for the Webbs rather than by an obligation he felt he owed them.
It suffices to say for present purposes that my conclusion is that the Webbs have not established that Mr North failed to fulfil any obligation owed to them in relation to the IOOF insurances.
Statements of intention by the deceased
Evidence was given by the Webbs and by two of their friends that both Mr North and Mrs North had said on different occasions that the Webb children would be beneficiaries under their wills and that they would be “looked after”. Melissa Webb gave evidence that Mr North showed her a will or draft will naming the Webb children as beneficiaries when he was living at a retirement village, and Renee Webb gave evidence that Mr North had shown her such a document at his home before he moved to the retirement village.
All of this evidence was the kind of evidence as to which the court needs to be careful, in accordance with the legal principles to which I have previously referred. I am not suggesting that the Webbs were being consciously untruthful about this matter, but the dangers of reconstruction and misinterpretation are real.
The evidence about when Renee and Melissa Webb were shown the wills or draft wills was not emphatic. Melissa said she saw it in 2007 or early 2008. Renee began suggesting she saw it in May 2009, then agreed it could have been 2007, before settling on March or April 2008. The suggestions of early 2008 seem very odd given the handwritten will witnessed by Jason Webb in February of that year.
The following matters are also important:
(a)Mr North made four wills, which have been found, between 1999 and 2010. None of them names the Webb children as beneficiaries.
(b)Whatever may have been the position beforehand, the Webbs were all aware of the contents of Mr North’s wills made in 2008. They knew then that, apart from provisions about Norwebb which he eventually dealt with in his lifetime, he was leaving everything to his nieces and nephews.
(c)Mr North did, in a sense, “look after” the Webb children. The sense in which he did so is that he made dispositions in his lifetime which rendered Norwebb free of external secured debt and which passed 100% ownership of the shares in Norwebb to their parents. Norwebb is a company which has never made significant profits. It is, in effect, a vehicle for providing employment. It provided employment for Mr and Mrs North and it has provided employment, at varying levels, for all of the Webbs. That situation was potentially threatened by both the existence of the Citibank debt, and the possibility of Mr North’s shares passing to outsiders. Mr North addressed both of those risks before he died, preserving the business for the Webb family, and in particular preserving continuing employment for Mr and Mrs Webb and for Jason and Matthew Webb.
I accept that Mr North said and did things which led the Webbs to believe that the Webb children would be beneficiaries under his will. However, I also find that by the middle of 2008 he had made it clear to them and they all knew that he had not done so. They all knew then that he had made provisions concerning Norwebb but that otherwise he had left everything to members of his own family. What he said and did did not, in my view, create a responsibility to make provision for the maintenance and support of the Webbs, either alone or in combination with other factors.
Jason and Matthew Webb
Jason and Matthew Webb both feel that they have made sacrifices in relation to the Norwebb business for which they have not been adequately compensated by the remuneration which they have earned. Their feelings in that respect might be well founded, it is difficult to say. But even if they are well founded, I cannot see how Mr North could be said to have any kind of responsibility to them beyond what he did in his lifetime to ensure that the business they had made sacrifices for would be protected for the benefit of the Webb family. Jason and Matthew Webb may well have given up opportunities which they could have pursued and which, in retrospect, might have been financially more beneficial to them. That was a choice they had. It is a choice they still have. Their parents now own the business entirely. They paid Mr North only a nominal sum for his 52% shareholding. It is free of secured debt.
Conclusion
The claims made in this proceeding fall well short of establishing the kind of rare and exceptional relationship which would give rise to a responsibility on Mr North’s part to make provision for the proper maintenance and support of any of the Webbs. Mr and Mrs North on the one hand and the Webbs on the other shared a wealth of common experience working together in the Norwebb business. For most of that time they were as close as business partners and friends might be expected to be, but in my view none of the factors relied upon by the Webbs relevantly advances the position beyond that. They do not create a responsibility in Mr North to make provision for their proper maintenance and support.
Turning to the specific matters to which I am required to have regard, my conclusions are as follows.
Section 91(4)(e)
I have dealt with the nature of the relevant relationships.
Section 91(4)(f)
I have dealt with the obligations and responsibilities of the deceased to the plaintiffs. It was not suggested he had any obligation or responsibility to the beneficiaries.
Section 91(4)(g)
I have referred to the size and nature of the estate. There are no relevant charges or liabilities other than the costs of this proceeding.
Section 91(4)(h) & (i)
None of the Webbs could be described as well off. They all earn modest incomes. Melissa Webb is a single parent substantially reliant on social security. Graeme and Valda Webb own their house and have some modest superannuation. Jason and Matthew Webb also own their houses but they have substantial mortgages. Renee works only part time at Norwebb and her partner who is a carpenter has had interruptions in his work. All the Webb children have dependent children themselves.
Four of the 14 nieces and nephews who are beneficiaries filed affidavits setting out matters relevant to their financial position and to disabilities suffered by their dependents. They were Travis North, Narelle Ryan, Phillip Ryan, and Anthony Ryan. It is clear from that material that each of them would be greatly assisted by any bequest. Otherwise I assume the nieces and nephews are in a reasonable financial position.
Section 91(4)(j)
Mr and Mrs Webb are advanced in years. In 2011, when they swore their affidavits, Melissa was 38, Jason 36, Matthew 34, and Renee 30.
Section 91(4)(k)
Save for involvement in the Norwebb business it is not suggested that any of the plaintiffs contributed to Mr North’s estate. I have dealt with the issue of the contribution made by the plaintiffs to the welfare of the deceased.
Section 91(4)(l)
It was not suggested that any relevant benefits had previously been given by the deceased to any plaintiff or to any beneficiary.
Section 91(4)(m)
None of the plaintiffs ever maintained the deceased, save for their mutual involvement in the Norwebb business. It was suggested that Norwebb continued to pay the deceased’s salary after his interest in the business had waned and he had become ill. I accept that that did occur. The deceased was, until December 2009 which was not long before he died, the 52% shareholder in the company which owned the business and he had paid off the company’s entire secured debt.
Section 91(4)(n)
It is not suggested that there is any other person liable to maintain any of the plaintiffs, although the Webb children expect that their parents will support them, if support is needed, so far as they are able to do so.
Section 91(4)(o)
I have dealt with character and conduct.
Section 91(4)(p)
There are no other relevant matters.
The proceeding will be dismissed. I will hear the parties on the appropriate orders and any matters which arise.
SCHEDULE OF PARTIES
S CI 2010 06966
BETWEEN:
GRAEME COOPER WEBB
Firstnamed Plaintiff
VALDA MAY WEBB
Secondnamed Plaintiff
MELISSA MAE WEBB
Thirdnamed Plaintiff
JASON COOPER WEBB
Fourthnamed Plaintiff
MATHEW ALEXANDER WEBB
Fifthnamed Plaintiff
RENEE ELIZABETH WEBB
Sixthnamed Plaintiff
- and –
MICHAEL RYAN and TRAVIS NORTH
(Who are sued as the Executors of the Estate of DANIEL JOHN NORTH, deceased)
Defendants
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