White v Hanover
[2010] VSC 577
•10 December 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6777 of 2009
| RUSSEL JOHN WHITE | Plaintiff |
| v | |
| INGA MAIJA HANOVER (who is sued as the Executrix of the Will of Avril Buckton) | Defendant |
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JUDGE: | Daly, AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16, and 17 September 2010 | |
DATE OF JUDGMENT: | 10 December 2010 | |
CASE MAY BE CITED AS: | White v Hanover | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 577 | |
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CATCHWORDS: Claim under Part IV of the Administration and Probate Act 1958 – de-facto spouse
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms U. Stanisich | Macpherson + Kelley |
| For the Defendant | Mr A Bolkas | Warwick McLachlan |
HER HONOUR:
Background
Avril Buckton died suddenly in a hotel room in Singapore on 1 August 2008. She was 60 years of age. She was on the last leg of her return journey from Canada (where she had been working as an engineering draftsperson) to Melbourne (where she owned a home). During the course of this journey, she holidayed in the United States, the British Isles (her birthplace) and Europe, accompanied by her partner of four years, Russel White, the plaintiff in this proceeding.
Avril’s sudden death was a shock to Russel and her family and friends. Russel made arrangements for Avril’s cremation in Singapore, and the return of her ashes to Australia. Along with Inga Hanover, a friend of Avril’s for some 30 years (and the defendant in this proceeding), he organised and attended memorial services for Avril in Brisbane and Melbourne. He, along with Inga and Avril’s sister, Verna, took on the responsibility of getting Avril’s affairs in order.
Russel located Avril’s will. It was made in 1992, shortly after her divorce from her first and only husband. In the will, she appointed Inga as the executor of her estate. The will made some specific bequests of artworks and jewellery, and bequeathed the rest of her estate to be divided between her three sisters Verna, Elaine and Yvonne. The most substantial asset of the estate was Avril’s home in Glen Iris.
Avril also had accumulated substantial assets in a self-managed superannuation fund which she had established with a former colleague, Robert James. Avril and Robert James had a bitter falling out in the years prior to her death, and after Avril’s death, Inga took steps to remove Robert James as a director of the trustee of the superannuation fund and appoint herself in his stead, thereby in effect assuming the role of trustee.
In the period after Avril’s death, relations between Russel, Verna and Inga were cordial, united by their common shock and grief. However, a dispute soon arose regarding the distribution of the death benefit payable by the superannuation fund (“death benefit”). Russel claimed the death benefit in his capacity as Avril’s sole dependant. He proposed that he be paid the death benefit but return part of it to two of Avril’s three sisters, suggesting that less tax would be payable under such an arrangement than would be payable if the death benefit was paid directly to the estate. He also proposed that Avril’s youngest sister, Yvonne, should forfeit her share of the estate, as she and Avril had been estranged for some 20 years, and that he should receive Yvonne’s share of the estate.[1]
[1]This proposal is contained in a letter from Macpherson + Kelley, Russel’s solicitors, to Avril’s sisters dated 3 September 2008.
The resulting dispute was not resolved and Russel issued this proceeding on 25 May 2009, seeking provision from Avril’s estate under Part IV of the Administration and Probate Act 1958 (“Act”). At the time the proceeding commenced, he was unable to specify the amount of provision he sought from the estate, as the position with respect to the death benefit was unclear. However, some time prior to trial, the trustee determined that 25 per cent of the death benefit should be paid to Russel, with the balance to be paid to the estate for distribution among the beneficiaries in accordance with the terms of Avril’s will.
At the commencement of the trial, counsel for Russel indicated that proper provision for Russel required a payment to him from the estate of the sum of $670,000. This sum, along with the death benefit already paid to him and Russel’s own superannuation, would be sufficient to enable Russel to fund the purchase and furnishing of a two-bedroom unit in Brisbane (including transaction expenses), establish a fund to generate an estimated annual income of approximately $20,000, and to establish a nest egg of $100,000 for “contingencies”.
At the date of the commencement of trial, the net value of the estate, taking into account the estimated legal costs of both parties, was approximately $950,000.
The relationship between Avril and Russell
Avril was born in 1948. She had three sisters, Verna, Elaine and Yvonne, born in 1941, 1943 and 1951 respectively. She emigrated to Australia in or about 1969. She married once, but was divorced by 1990. She had no known children. She owned a home in Glen Iris, but there are references in affidavits to her having worked in Adelaide, Brisbane, Perth and overseas, mainly in the mining industry.
In 2003, Avril was living in a cabin in a caravan park in Port Hedland, Western Australia. She was employed by BHP Billiton. Russel, a qualified fitter and turner, was also employed in Port Hedland, and lived in his own caravan in the same caravan park. There is some uncertainty as to how the relationship developed, but by April/May 2004, Avril and Russel were living together in Avril’s cabin.
Avril & Russel stayed in Port Hedland until June 2005. They travelled back to Melbourne via Perth, where they stayed with one of Avril’s friends. They returned to Melbourne in July 2005 and took up residence in the Glen Iris property. They both found work. However, work opportunities for Avril in Melbourne were limited, and in January 2006 she travelled to Perth to take up a job offer. Some weeks later, Russel travelled to Perth to live with Avril.
The couple stayed in Perth for over 12 months. Russel was often away from Perth as he was employed at a remote location on a “fly in-fly out” basis. During their stay in Perth, Avril’s sister, Verna, visited them for a couple of weeks.
In March 2007, Avril was offered work in Toronto, Canada. She and Russel travelled to Melbourne and Brisbane before flying to Toronto. Russel tried to obtain work but his Australian trade qualifications were not recognised in Canada. Avril left her employment in Toronto and the couple moved to Calgary (although Avril spent some time in Vancouver on contract work). There was some suggestion in the evidence that Avril’s employment in Canada was terminated on two occasions because of her excessive drinking, but this has not been confirmed.
In any event, by March 2008, Avril and Russel decided to leave Canada and return to Melbourne. They decided to take an extended travelling holiday on the way. They visited Jamaica, New York, Belfast (to stay with Elaine), Wales (to stay with Verna) and various other destinations in Europe and Asia. Avril’s death in Singapore occurred a few days before their planned return to Melbourne.
The evidence
Russel relied upon two affidavits sworn by him on 31 July 2009 and 26 October 2009. He also relied upon affidavits sworn by Susan Wilde sworn 28 October 2009, Kerry Peta Grigoroff sworn 29 October 2009 and Sandra Leanne Mulley, sworn 3 September 2010. Only Russel was required to attend for cross-examination.
The defendant executor, Inga, relied upon her affidavits sworn on 29 September 2009, 30 October 2009, 25 March 2010, 5 September 2010 and 10 September 2010, and affidavits sworn by Verna Arlene Turner on 25 September 2009 by Annette Elaine Burton (“Elaine”) sworn on 28 September 2009, Dennis Brown, sworn on 10 March 2010 and Ernestine Yvonne Hawkins (“Yvonne”), sworn 15 March 2010. Only Inga was required to attend for cross-examination.
A number of objections were taken to the admissibility of various parts of the affidavits sought to be relied upon by both parties. Objections were taken on the grounds that the evidence was, variously, hearsay (particularly in respect of statements attributed to the deceased), unqualified opinion, irrelevant, commentary and speculation. A number of these objections were validly taken and it seemed to me that a number of the affidavits, particularly those relied upon by Inga, were not given rigorous scrutiny with an eye to their admissibility. However, while I struck out those parts of the evidence which were more egregious breaches of the rules of evidence, I was content to let most of the disputed evidence stand as providing either useful context or evidence of the observations of the witnesses regarding the manner in which the plaintiff and the deceased interacted together. Finally, evidence as to the statements of the deceased was generally relied upon as going to the fact of the making of the statements, rather than the truth of their contents. As some of the statements sought to be relied upon were contradictory, that is perhaps the greatest weight which could be placed upon them. In any event, most of the material facts relevant to my determination of the issues in this proceeding were not ultimately particularly contentious.
Russel gave evidence regarding the history of the relationship between him and Avril, their employment during the course of the relationship, and the financial and domestic arrangements between the couple. He gave evidence that he resigned his employment on four occasions to “fall in” with Avril’s arrangements: in Port Hedland, Melbourne, Perth and Calgary. They shared responsibility for payment of household expenses (apart from rental or mortgage payments which were either paid by Avril’s employer or Avril). When he was unemployed or working less hours than Avril, he would do most of the shopping, cooking and cleaning: otherwise they would share the household chores. When they lived in Avril’s home in Melbourne, Russel did some home maintenance, and also painted a shed, maintained the pool and installed an irrigation system. Avril supported Russel during his periods of unemployment, particularly while they were living in Canada, and paid for their travelling expenses in 2008 when their shared “pool” of funds ran out. While they did not have a joint bank account while they were living in Calgary, Avail nominated him as a signatory to her account (into which he paid his wages) and gave him a card and PIN which enabled him to have access to the funds in her account. Russel withdrew funds from this account after Avril’s death to meet his living expenses, to pay for Avril’s cremation and to extinguish the debt on her Canadian credit card. I note that there was no documentary verification of the couple’s financial arrangements while they were living in Canada.
Russel gave both affidavit and oral evidence regarding his financial position. He is currently 55 years of age and has been married and divorced twice. He does not own any real estate. He owns an ageing 4WD vehicle, a caravan and a jet ski purchased for him by Avril. He has accrued superannuation benefits of approximately $80,000. He has also been paid $210,306.76 by the trustee of Avril’s superannuation fund (representing 25 per cent of the total death benefit), some of which has been used to fund this litigation, with the remainder placed on term deposit. He has other savings of $4,000, and a half share in a timeshare scheme he purchased with Avril in 2004 (of unknown but probably modest value). He has no liabilities of any significance.
He is currently living with his ailing mother in her home in Brisbane. He makes a contribution to household expenses. He was on unemployment benefits from December 2008 to June 2009. Since June 2009, he has obtained part time and casual work, but has been unable to secure full time employment despite making numerous applications. He attributes this in part to his age, and in part to his recent erratic employment history.
It should be noted that no documentary evidence has been tendered to corroborate his income and asset position but, equally, no evidence was led to suggest that any of the above is incorrect. There is no evidence as to whether he is likely to inherit or share in an inheritance from his mother’s estate upon her death, or what the value of any such interest might be.
Susan Wilde, a friend of Avril’s, deposed that she met Avril in 2002 through work. They became friends in October 2004 when Ms Wilde was posted to Port Hedland. She deposed to discussing with Avril her relationship with Russel and her difficulties with her former business partner, Robert James. Ms Wilde left Port Hedland for Mount Newman in late 2004, and Russel and Avril visited her there in 2005. Ms Wilde returned to Port Hedland in February 2005 after Avril assisted her to find a new job. She moved to the same caravan park as Russel and Avril and was a frequent visitor to their cabin until she left Port Hedland to return to Adelaide in July 2005. Avril and Russel stayed with her in Adelaide en route from Port Hedland to Melbourne. She considered the relationship between Avril and Russel to be strong and happy, that they were like a husband and wife, and that they were making plans for the future together.
Kerry Grigoroff, known as “Peta”, a friend of Avril’s since 2001, deposed that she met Avril through their work in Brisbane. Ms Grigoroff returned to Perth in 2003, and from early 2004 Avril stayed with her regularly (perhaps monthly) for a few days while on breaks from her work in Port Hedland. Ms Grigoroff deposes to Avril telling her about her relationship with Russel and her happiness with him. They stayed with her in Perth for a week or so on their way from Port Hedland to Melbourne.
When Avril relocated to Perth in January 2006, she stayed with Ms Grigoroff until Russel arrived from Melbourne. When Russel and Avril moved to their unit, Ms Grigoroff regularly socialised with the couple until their departure for Canada in 2007. She deposes to Avril informing her of the plans she and Russel were making together, and describes their relationship in warm and positive terms, “as like a husband and wife.”
Sandra Mulley deposes to having known Avril since the late 1980s when they met through work. While they worked in different parts of the country, often in remote areas, they remained in contact by telephone and email, and Avril would visit her from time to time. Since early 2004, Russel, and Avril’s relationship with Russel was a regular subject of their communication and Avril spoke about him and their relationship in positive, if not glowing, terms. She met Russel when he and Avril travelled to Brisbane together prior to their departure for Canada, and she deposed as to the apparently positive nature of their relationship.
In response, in her first affidavit, Inga stated that she had known Avril since 1975, as Avril was the girlfriend and then spouse of Inga’s ex-husband’s best friend, Rodney Buckton. Avril was her daughter’s godmother. She deposed as to the nature of the bequest made in Avril’s will and matters relating to the administration of the estate. She deposed to the fact that she believed that Russel had appropriated the sum of $7,460.99 from Avril’s bank account after Avril’s death between 11 August 2008 and 13 October 2008 for his personal use, following she froze the account. She deposed as to the death benefits payable by Avril’s self-managed superannuation fund of $1,134,121.21 and the decline in the value of the death benefit by reason of the decline in the value of the shares held by the self-managed superannuation fund. She deposed that there was no notice of binding death beneficiary nomination. She became the trustee of the superannuation fund following negotiations with Avril’s former business partner.
In relation to Russel’s claim, Inga deposed that she believed a form of friendship had commenced between Avril and Russel in around May or June 2004. She deposed that she had been informed by Russel and another friend that Avril had been sacked from both of her Canada contracts because of her drinking. She deposed that Avril was, generally speaking, a heavy drinker but she did not recall that affecting her ability to work in the past. She deposes to having dinner with Russel and Avril at the home of mutual friends and expressing concerns to these friends regarding Avril’s drinking habits. She deposed that Avril told her that Russel “stocked the fridge when he was around”, and that he made whiskey for her using a still. She deposed as to her opinion that Avril was fiercely independent and would not want to be dependant upon a man. She considered that Avril enjoyed Russel’s companionship, but that Avril had not told her she was in love with Russel.
In her later affidavit, she gave further evidence regarding her perceptions of Avril. In particular, she formed the following views:
(a) after Avril’s marriage ended she formed a series of very intimate and close friendships which often ended badly;
(b) she was fiercely independent and did not want to enter any further business or domestic partnerships; and
(c) Avril’s sisters were very important to her, despite the geographical distance between them and despite some estrangement between her and Yvonne.
During the course of her oral evidence, Inga gave evidence that she had seen Avril and Russel on a handful of occasions when she was in Melbourne, and that she had limited contact with Avril over the last year and a half of her life. She had formed the view that Avril’s drinking had escalated in recent years.
Verna, Elaine and Yvonne were Avril’s sisters. Verna deposed that Avril’s first mention of Russel was in a letter sent by Avril to her in May 2004. The letter said: “I have met a cute guy with a 4WD who has promised to take me camping.” She stayed with Avril and Russel in Perth between 12 and 23 October 2006. Avril had told her that the unit was in her name and she paid all the bills because when Russel was working, he would only be home for one week in six, so he just bought all the food when he was there. She deposed that Russel had showed her his equipment for distilling alcohol and explained how one could then buy flavours to make it into whiskey or brandy which he then kept in Avril’s drinks trolley.
Verna deposed that between 28 April and 12 May 2008, Avril and Russel stayed with her at her home in Glamorgan, Wales. She deposed that every day from about 4pm they sat in the garden (because they both smoked) drinking whiskey and beer with Russel seeing to the supply of ice cubes and refilling Avril’s glass. She deposed as to the number of occasions Russel went to the village for more whiskey, beer and cigarettes and the number of whiskey bottles and beer cans left behind. She deposes as to her knowledge of the estrangement between Avril and her sister, Yvonne, and stated that Avril was notorious for very brief and infrequent correspondence.
Finally, in paragraph 20 of her affidavit, Verna deposed:
“I was born on 24 April 1943. My sister, Elaine was born on 7 April 1941 and Yvonne was born on 13 November 1951. Avril was the second youngest of the four sisters. I am widowed and reside in my own house at Brigend County Borough, Wales. I receive pensions totalling ₤920 per month and I live within my means. However, one of my children resides at Thredbo, New South Wales, Australia, and I would dearly like to visit him and my only grandchild but my income is adequate only to allow rare visits. In my trips to Australia for Avril’s estate, I was financially assisted by my sisters. My other son was recently made redundant after nine years employed by the one company. He is finding difficulty finding work and I anticipate I will need to assist in the maintenance of his mortgage payments on a principal of ₤28,000.
21. My relationship with Avril was always close and I am grateful for her inclusion of me in her will.”
Elaine deposed to the fact that she had seen Avril in Brisbane and Melbourne in 2003 where she appeared happy and content in her work and social life. She believes Avril met Russel in Perth. She next saw Avril in 2008 when she and Russel stayed with her at her home in Northern Ireland between 16 April to 28 April. She deposed that she had been taken aback at Avril’s appearance, as she had lost a lot of weight, looked older than her years, was listless and lacked interest in her surroundings and that her appetite was poor. She deposed that Avril spoke of 3pm as “opening time” when Russel went to the village to buy supplies of whiskey, beer and cigarettes. She deposed that Avril’s consumption of whiskey was such that her two ice cube trays had to be replaced with bags of ice cubes from the supermarket, and that Russel appeared to make no effort to encourage Avril to cut down her consumption. In paragraph 10 of her affidavit she deposed as follows:
“I live with my spouse in premises we own together and both of us live on pensions generated through our previous employment. We are both retired and in reasonable health. Our combined works (sic) pensions total ₤1600 a month which we live off. I drive a 10-year old car and my husband a seven-year old. Any savings we have have been worked for over the years, which we hope to use to augment our pensions. We have two children, one married with two girls who are both now in second level education. As their parents are not in highly-paid jobs, we help out financially with school fees, uniforms, trips, etc. Our son is unmarried and when in employment bought a small two-bedroom house for himself. He was made redundant a few years ago and apart from intermittent employment, is unable to maintain mortgage payments, utilities, etc. The unemployment benefit he receives just feeds him. We are helping to the tune of ₤500 per month. To be able to pay off both children’s mortgages would help them greatly and indirectly us too.
My relationship with Avril was excellent. We maintained contact although Avril was not a frequent correspondent during her years in Australia and was looking forward to seeing her when she arranged to visit in April 2008.”
Yvonne deposed as to the nature of the relationship between her and Avril. They were very close as children but the closeness between them had dissipated after Avril left home in 1969. There was an occasion when Avril visited England and all four sisters stayed in a holiday cottage in 1988 or 1989. Avril’s marriage to Rodney Buckton had just broken up and Yvonne considered that Avril was self-absorbed. Yvonne decided to continue to communicate with and offer support to Avril for another year and then cease further contact with Avril. At paragraph 9 she deposed as follows:
“I am retired but I do not receive the pension. I do not have a husband or partner. I have income from rental property. I have sold my house and am currently renting with the intention of buying a cheap property. I have the capital from the sale of my house and some additional capital in the building society. In time I will be eligible for a small pension. This and the interest from capital when I sell the rented property will form my income and should provide a modest living. Any additional capital would improve my financial security. I have thought to put any bequest towards the running costs of the house, in particular fuel bills. That way whenever the house was warm when I cooked a meal or turned on a light I would think of Avril.”
Dennis Brown swore a short affidavit in which he deposed that he met Avril at a social gathering some 10 to 15 years ago, and they commenced playing social squash together. They kept in regular contact, both in person and by telephone. He recalled Avril telling him she had met Russel and he had moved in with her, but she spoke little of Russel save that she was supporting him when unemployed. She spoke more of her employment and her difficulties with Robert James. In 2006, Dennis drove to Perth with Russel, who told him that he would be seeking “fly in-fly out” work. In 2009, he visited Avril and Russel in Calgary and was surprised how much liquor Avril and Russel consumed. He also did not notice any signs of physical affection between them, and concluded that the relationship was an arrangement of convenience.
The Issues
Counsel for Russel submitted that it is clear that Avril had a responsibility to provide for Russel. She submitted that the relationship between Avril and Russel was serious, and that all indications were that it would continue save for Avril’s premature death. Russel fell in with Avril’s wishes in a manner which imperilled his ability to gain secure employment, which in turn led to his dependency upon Avril. While there was no evidence of a joint bank account, they pooled their funds to meet their living expenses.
Counsel submitted further that the court should give limited weight to the evidence of Inga and Avril’s sisters regarding the nature and strength of Russel’s relationship, given the relatively limited degree of contact they had with Avril in her last few years.
Further, counsel submitted that the size of the estate is sufficiently large as to enable substantial provision be made for Russel (who is in significant financial need) while still providing Avril’s sisters (who have no competing claims) with generous legacies.
Finally, counsel submitted that there was no disentitling conduct upon Russel’s part which would warrant a reduction in the provision which ought to be made for him.
Counsel for Inga conceded that Russel was a person for whom Avril had an obligation to make proper provision for his adequate maintenance and support. However, he submitted that by reason of the payment to Russel of the sum of approximately $210,000, being 25 per cent of the death benefit, any obligation to provide adequate maintenance had been properly discharged. Counsel submitted that this provision is adequate, given the short length and informal nature of the relationship between Avril and Russel, and is reflective of community standards applicable to such a relationship. Further, he submitted that as the plaintiff is a skilled and experienced fitter and turner who is only 55 years of age and in good health, with no other debts or financial responsibilities, Russel is not in need of any further support.
Counsel submitted that the payment of part of the death benefit to the plaintiff properly balances Russel’s claim and the testamentary wishes of the deceased in that it provided Russel with a substantial amount of money with which to part purchase a home or to invest for his future while at the same time respecting Avril’s expressed intention in her will to substantially benefit her three sisters.
Section 91 of the Act provides as follows:
“[1] Despite anything in this Act to the contrary the Court may order that provision be made out of the estate of the deceased person for the proper maintenance and support of a person for whom the deceased had a responsibility to make provision.
[2] The Court must not make an order under subsection (1) in favour of a person unless:
(a) that person has applied for the order; or
(b) another person has applied for the order on behalf of that person.
[3] The Court must not make an order under subsection (1) in favour of a person unless the court is of the opinion that the distribution of the estate of the deceased person effected by:
(a) his or her will, if any; or
(b) the operations and provision of Part I, Division 6; or
(c)that the will and the operation of the provisions
does not make adequate provision for the proper maintenance of the support of the person.
[4]The Court in determining -
(a)whether or not the deceased had responsibility to make provision for a person; and
(b)whether or not the distribution of the estate of the deceased person as affected by:
(i)the deceased’s will;
(ii)the operations of Part I, Division 6; or
(iii)both the will and the operation of the provisions makes adequate provision for the proper maintenance and support of that person; and
(c)the amount of provision, if any, which the court may order for that person; and
(d)any other matter related to an application for an order under subsection (1)
must have regard to -
(e)any family or other relationship between the deceased person and the applicant, including the nature of the relationship and, where relevant, the length of the relationship;
(f)any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate;
(g)the size and nature of the estate of the deceased person and any charges and liabilities to which the estate is subject;
(h)the financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and for the foreseeable future;
(i)any physical, mental or intellectual disability of any applicant or any beneficiary of the estate;
(j)the age of the applicant;
(k)any contribution (not for adequate consideration) of the applicant to building up the estate or to the welfare of the deceased or the family of the deceased;
(l)any benefits previously given by the deceased person to any applicant or any beneficiary;
(m)whether the applicant was being maintained by the deceased person before that person’s death, either wholly or partly and, where the Court considers it relevant, to extent to which and the basis upon which the deceased had assumed that responsibility;
(n)the liability of any other person to maintain the applicant;
(o)the character and conduct of the applicant or any other person;
(p)any other matter the court considers relevant.
There was no substantial dispute between the parties as to what the overarching test is for assessing claims under Part IV of the Act: that is, that the reference to responsibility encompasses not only legal responsibility but also the moral duty of the deceased towards the claimant and any other relevant persons. The test to be applied by the court is an objective test of how a wise and just testator should, in all the circumstances, distribute his or her estate.[2] It is also agreed that the domestic partner of a deceased is in a special position. In Schmidt v Watkins (2002) VSC 273, Harper J said at 22:
“Generally speaking, a domestic relationship where there is mutual commitment to an intimate personal relationship and shared life as a couple, irrespective of the gender of each partner it would be sufficient to bring either one of those partners within the class of persons to whom the other had responsibility.”
[2]Blair v Blair [2004] VSCA 149.
It is agreed that the quality of the relationship, the particular circumstances of the relationship and the length of the relationship are relevant to determining whether the provision made is adequate and the extent of any further provision that should be made.
The following paragraphs summarise the competing submissions made on behalf of Russel and the executor with respect to the factors referred to in subsection 91(4) of the Act.
The nature and length of the relationship (ss 91(4)(e))
Counsel for Russel submitted that the matters that supported a finding that Avril and Russel were in a de facto relationship included, as follows:
(a) their common residence as a couple on a genuine domestic basis from around April 2004 to the date of death;
(b) an exclusive sexual relationship; and
(c) a mutual commitment to a shared life, including the making of future plans, Russel making sacrifices of his own financial security and independence by resigning his employment to follow Avril, periods of dependency by Russel upon Avril, periods of interdependency, and public recognition of the relationship by friends and family.
Counsel submitted that the couple had jointly purchased timeshare accommodation in May 2005 which expired in 2029 and recorded the Glen Iris property as their address. The evidence of Avril’s friends who were in more frequent contact with Avril and Russel over the relevant period than were Inga or her sisters supported the conclusion that the couple had a warm and loving relationship that was only terminated due to the sudden and premature death of Avril.
Counsel for Inga submitted that the relationship of cohabitation was relatively short and that while they lived in Perth, Russel lived two-thirds of that year away from Avril on site. There was no documentary evidence or corroboration for Russel’s claim that he and Avril pooled their earnings and that the evidence tended to indicate that both the parties kept their financial affairs separate. There was no contribution by Russel to the mortgage payments for the Glen Iris home or any evidence of a commitment to marry or benefit each other financially through the making of mutual wills.
Avril’s responsibility to Russel and her sisters and the size of the estate (ss 91 (4)(f) and (g))
Counsel for Russel submitted that Avril owed a primary duty to Russel as her de facto spouse. Counsel for Inga agreed but submitted that this obligation was discharged by the distribution to him of the sum of $210,306.76 from the death benefit. He conceded that Avril had no obligation to provide for her sisters.
Counsel for Russel submitted that approximately at $950,190 (after the legal costs of both parties are deducted) the estate is large enough to make adequate and proper provision for Russel while leaving a generous sum for the sisters to whom Avril owed no obligation.
The financial resources of Russel and Avril’s sisters at the time of the hearing and the foreseeable future (ss91(4)(h))
Counsel for Russel submitted that his financial position is weak. He does not own any real estate and his only assets are a car, a caravan, a jet ski, $4000 in savings, $80,000 in superannuation and approximately $210,000 from the deceased’s death benefits. He is currently working on a casual basis and is seeking full-time work, but his employment prospects are uncertain and he has a legitimate anxiety as to his financial security. In response, counsel for the executor submitted that as a qualified fitter and turner, there is no reason to doubt that Russel will be able to support himself and increase his superannuation nest egg before he retires. Avril’s sisters are in modest but not needy financial circumstances.
Health and age (ss 91(4)(i) and 91(4)(j))
The parties agree that there are no health issues affecting either Russel or any of the other beneficiaries, and that Russel is currently aged 55.
Any contributions by Russel to the estate and welfare of the Avril (ss91(4)(k))
Counsel for Russel submitted that:
(a) Russel’s claim is based largely on dependency but that he also contributed significantly to Avril’s welfare by pooling of his income with that of Avril during the relationship;
(b) Russel contributed significantly to the household by cooking, shopping and cleaning when unemployed and sharing such duties when employed;
(c) Russel attended to home maintenance, maintaining and repairing of the pool, installation of automatic sprinkler system and an alarm system and other tasks to maintain the Glen Iris property; and
(d) Russel contributed to Avril’s welfare by providing emotional support within a close and loving relationship during difficult times such as litigation with a former business partner, being dismissed from employment and when unhappy in her job, and supporting and counselling the plaintiff to reduce her alcohol consumption.
Counsel for Inga acknowledged that contributions were made to Avril’s welfare by Russel but submitted that these were insignificant.
Any benefits previously given by Avril to any applicant or any beneficiary (ss 91(4)(l))
Counsel for Russel submitted that Russel did not receive any previous benefits from the deceased other than as a dependent spouse, apart from occasional gifts. Inga’s counsel noted that Avril appeared to have allowed Russel to live with her without requiring him to directly contribute to the cost of his accommodation and to have paid the cost for their move from Toronto, Calgary and for airfares on their world tour on their way back to Melbourne from Canada.
Whether Russel was being maintained by Avril before that person’s death (ss 91(4)(m))
Counsel for Russel submitted that Russel was dependent upon Avril as at the date of death, that she had assumed that responsibility, and that there was no other person dependent upon Avril during the relationship.
Counsel for Inga submitted Avril did not assume the responsibility to maintain Russel, as Russel had sought and obtained employment during their relationship and supported himself during the relationship. No other financial assistance was provided by Avril to Russel, apart from Avril not requiring Russel to directly contribute to the cost of their joint accommodation and by funding part of their travel costs.
The liability of other person to maintain Russel (ss 91(4)(n))
The parties agreed that there is no other person who is liable to maintain Russel.
The character and conduct of the applicant or any other person (ss 91(4)(o))
Counsel for Russel commented upon the fact that the evidence filed on by Avril’s sisters and Inga focussed heavily on the issue of Avril’s consumption of alcohol. Inga and Avril’s sisters appear to attack Russel on the basis that he encouraged Avril’s consumption of alcohol, that it affected the nature of the relationship, and was a matter to be considered relevant in determining whether the court should order provision for Russel from Avril’s estate. Counsel for Inga submitted that Russel seems to have indulged and encouraged the deceased’s heavy drinking, despite him recognising that it was not good for her.
Counsel for Russel submitted that there was no basis for reducing Avril’s responsibility to Russel on account of her drinking habits, but rather that Russel brought happiness to Avril, who had been known to consume alcohol heavily over a long period of time. She submitted that it was not Russel’s responsibility to control and manage Avril’s behaviour. Inga herself had admitted that she was unable to influence Avril’s alcohol consumption. She submitted also that the withdrawals of moneys from Avril’s account after she died should not be held against Russel in determining the extent of responsibility Avril held to properly maintain Russel. She noted that the evidence shows that Russel had access to the accounts with a card and a PIN given to him by Avril.
Counsel for Inga submitted that Avril was very close to two of her three sisters and that while Avril and Yvonne were estranged, Avril had made her will after the commencement of her estrangement from Yvonne but still clearly intended her to benefit from the will.
Any other matter (ss 91(4)(p))
Counsel for Russel submitted that Avril’s will was made more than ten years before Avril met Russel and after she had been recently divorced. She had only been estranged from her sister, Yvonne, for two or three years at that time and that there were no other obvious objects of her bounty at the time she made her will in 1992. However, by the time she died, her situation had changed significantly in that she was in a serious and committed domestic relationship, and Russel was financially dependent upon her.
Has proper provision been made for Russel?
In my view, the will does not make proper provision for the adequate maintenance and support of Russel. I agree with counsel for Russel that the distribution of superannuation death benefits to Russel is a factor to be taken into account only in assessing the quantum of what is proper provision.
Russel and Avril were in a happy and loving relationship for nearly five years. While they did not settle down together in the usual sense, this reflected Avril’s peripatetic lifestyle and working habits rather than any lack of stability in the relationship. Indeed, one constant over this period was Russel’s preparedness to accommodate Avril’s desire to travel and work in different parts of Australia and the world. To do this, he made financial and personal sacrifices. There is no doubt that he benefited both financially and emotionally from this arrangement, but it does not detract from the commitment that he made to their relationship. The question of where the couple should live was largely dictated by Avril’s desires and employment opportunities. No doubt, Avril’s preparedness to subsidise Russel’s accommodation and living and travelling expenses amounted to her recognition of that commitment.
Russel’s resulting employment history over recent years has probably contributed to his difficulties in gaining employment now. He gave evidence that if he had remained in Port Hedland as a site supervisor, he would probably be earning a good income. Further, while he is still of working age, the employment prospects of a man in his mid fifties are no doubt somewhat less than those of a man in his late forties, which is the age he was when he and Avril met in 2003 or 2004.
While Russel’s contributions to Avril’s estate and welfare were, in a material sense, modest, it is apparent that he willingly assumed household duties which contributed to their mutual comfort.
In their affidavit evidence, Inga and Avril’s sisters appeared to seek to downplay the significance of the relationship between Russel and Avril, and to attribute Avril’s apparently excessive consumption of alcohol to Russel in a manner which was not entirely clear. However, the evidence of Russel and Avril’s friends, who clearly had more frequent contact with Avril and Russel during periods of their relationship than either of the executor or Avril’s sisters, were emphatic that the relationship between Avril and Russel was close, warm and loving. Russel gave evidence that neither he or Avril wanted to get married, as for people in their stage of life it was “just a piece of paper”.
In my view, Russel’s inability to assist Avril to control her drinking is of limited relevance to the determination of what provision ought to be made for him from the estate. While it is difficult in legal proceedings such as these (particularly given the absence of evidence from the deceased) to know precisely what the true situation was, it seems to me I can draw the following inferences from the evidence:
(a) Avril regularly, probably daily, consumed hard liquor, and had done so for many years;
(b) Russel also was a regular drinker, and he took no steps to seek to persuade Avril to reduce her alcohol consumption until they lived in Canada;
(c) there is no basis whatsoever to conclude that Avril drank heavily because Russel encouraged her to drink, or because of any difficulties in her relationship with Russel;
(d) in Canada Russel tried to persuade Avril to reduce her alcohol consumption, at least during the working week. These efforts were unsuccessful, and had probably ceased by the time they embarked upon their world trip; and
(g) having regard to the evidence regarding Avril’s personality, in particular her fiercely independent nature, any efforts by Russel (or any other person) to persuade Avril to reduce her alcohol consumption were unlikely to be fruitful unless Avril herself wanted to change her habits.
Accordingly, it is difficult for me to attribute much, if any, responsibility to Russel for Avril’s drinking habits, and certainly not to the extent which would lead me to reduce any provision for Russel from the estate when the other relevant factors point to a conclusion that further provision should be made.
Further, I agree with counsel for the plaintiff that while Russel was not legally entitled to withdraw funds from Avril’s accounts after her death, this conduct should not disentitle him from further provision. I note that he had access to these funds because Avril had provided him with a card and a PIN and that the evidence is that some of these funds were used to pay for Avril’s cremation and to pay out her credit card debts.
Finally, I do not consider that the proposal that Russel made to Avril’s sisters after her death (that the superannuation death benefit be paid to him but that part be returned to the sisters in order to reduce the tax liability of the estate) should disentitle Russel from further provision. Such a proposal should not have been made, but I note that it was made in a letter from Russel’s solicitors. A lay person is entitled to assume that if his solicitors are prepared to put their names to such a proposal in correspondence using their letterhead, that it was a legally sound proposal to make.
Other matters which weigh in favour of making an order for further provision are as follows:
(a) the size of the estate;
(b) the date upon which the will was made; and
(c) the lack of any competing claims.
In relation to (a) above, the size of the net estate, being approximately $950,000, is large enough to make proper provision for Russel while still enabling substantial legacies to be provided to Avril’s sisters.
In relation to (b) above, it is significant that the will was made more than ten years prior to the commencement of the relationship between Avril and Russel. While there was evidence that Avril had discussed making other wills, these plans were not put into effect, perhaps not surprisingly given her unsettled lifestyle and the demands the litigation with her former business partner made upon her time and energy. For example, Inga gave evidence that Avril had not lodged tax returns since 2001.
Finally, while the court should give effect to the apparent wishes of Avril to benefit her sisters, it is apparent from the evidence that none of Avril’s sisters are in financial need, although any legacy would no doubt improve their lifestyle and financial security as they get older. Indeed, the evidence is that in the case of two of the sisters any legacy would improve their ability to assist their own children. Accordingly, making further provision for Russel would not substantially detract from the beneficiaries’ well being.
What further provision ought to be made?
In my view, the claim by Russel for $670,000 plus costs is excessive, having regard to the length of the relationship, his only partial dependency upon Avril, and the ability of Russel to support himself from employment for at least the next ten years.
Essentially, during the course of the relationship, Avril assumed responsibility for Russel’s accommodation and supplementing his living expenses on an ad hoc basis. In my view, that does not impose an obligation upon Avril’s estate to in effect entirely support Russel for the remainder of his life.
Counsel for Inga submitted in the alternative that any provision for Russel be limited to $100,000, which would mean that after taking into account the death benefit already received, Russel would receive approximately one quarter of the combined estate and death benefit (that is, a provision which would put him on an equal footing with each of Avril’s sisters). However, I reject that submission on the basis that first, it would not make adequate provision for Russel’s needs, and secondly, the task before the court is to determine what is proper provision for the adequate maintenance and support of the claimant. While it may be appropriate to adopt an arbitrary proportionate approach in the case of small estates, or where there are competing claimants with substantially similar needs or circumstances, Russel’s claim does not fall into either of those categories.
Currently, Russel has $210,000 from Avril’s death benefit (assuming that his legal costs will be funded from the estate). I accept that the proposed provision for a modest home (including acquisition and furnishing costs) would amount to $460,000. I also think it reasonable to make an allowance for Russel to purchase a replacement motor vehicle (say $30,000).
Taking into account the death benefit, an appropriate amount of provision would be $280,000. I do not accept that a further capital sum should be awarded for the purposes of generating an income or as a “nest egg” for contingencies. While he has had recent difficulties in gaining employment, Russel has no health issues which would impede him from working for a further ten years. He has no debts, and will have at least $80,000 upon retirement as a nest egg.
Accordingly, I propose to order that there be provision from the estate in the sum of $280,000. Assuming a net estate of approximately $950,000, that leaves a legacy of approximately $223,000 for each of Avril’s sisters.
Other observations
While it is not strictly necessary for me to do so, I would like to make the following observations regarding this matter. It does seem to me somewhat extraordinary that a claim of this nature, where all parties are mature and sensible adults, could not have been resolved at an early stage without dissipating $160,000 of the estate in legal costs, with the consequence that the legacy to each of Avril’s sisters has been diminished by over $50,000. Further, given that the hearing of the trial was concluded in one and a half days, and the affidavit evidence was relatively limited in nature, the actual quantum of the costs seems rather excessive.
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