Wilden v Meller
[2023] VSC 119
•20 March 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST
S ECI 2021 03488
IN THE MATTER of Part IV of the Administration and Probate Act 1958
- and –
IN THE MATTER of the Will and Estate of ANNETTE LOUISE MELLER (also known as ANNETTE LOUISE WILDEN), deceased
BETWEEN:
| DAVID WILLIAM WILDEN | Plaintiff |
| v | |
| STEPHEN DAVID MELLER (who is sued as the executor of the Will of ANNETTE LOUISE MELLER, deceased) | Defendant |
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JUDGE: | Daly AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 27 February 2023 |
DATE OF JUDGMENT: | 20 March 2023 |
CASE MAY BE CITED AS: | Wilden v Meller |
MEDIUM NEUTRAL CITATION: | [2023] VSC 119 |
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TESTATORS FAMILY MAINTENANCE – Application for further provision under Part IV of the Administration and Probate Act 1958 (Vic) – Where plaintiff and deceased were married for 25 years and the deceased had no children – Life interest in marital home and fund for repairs and maintenance provided for the plaintiff in the will – Whether adequate provision for the proper maintenance and support of the plaintiff – Administration and Probate Act 1958 (Vic) ss 90, 91, 91A – Beneficiaries under the will were adult nephews and charities – Will failed to make adequate provision for proper maintenance and support of widower – Luciano v Rosenblum (1985) 2 NSWLR 65 referred to – Crisp v Burns Philp Trustee Company Ltd (Unreported, Holland J, 18 December 1979) referred to – Principle of freedom of testation and intentions of the deceased – Portable life interest order and absolute interest in residuary estate granted to the plaintiff.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms A S Bartfeld | Rotman & Morris |
| For the Defendant | Mr R Boaden | Lawson Hughes Peter Walsh |
HER HONOUR:
Introduction
These reasons concern an application by the plaintiff, David William Wilden (‘David’), for further provision from the estate of his late wife, Annette Louise Meller (‘Annette’) pursuant to Part IV of the Administration and Probate Act 1958 (Vic) (‘Act’).
Annette died on 4 September 2019, at the age of 75, from complications following surgery for bowel cancer. At the time of her death, she and David had been married for 25 years, and had been living in a property in Ivanhoe East owned by Annette (‘York Avenue property’). During the course of their marriage, David and Annette had shared household expenses and household duties roughly equally. However, by 2016, David was Annette’s full time carer owing to her various health problems.
The York Avenue property was Annette’s family home, which was purchased by her parents in 1955, and which Annette inherited from her late mother in 1981. Annette had faced some mental health challenges in her youth, and at the time of her mother’s death, she was single. It appears that Annette’s late mother considered that Annette needed particular support from her estate, and accordingly, her brother David received little or nothing from their mother’s estate after she passed away.
Neither Annette or her husband David had any children. Her brother David has three sons, who are now adults.
Prior to her death, Annette made a will (which was drawn by solicitors) which was executed on 15 August 2017 (‘will’). The relevant clauses of the will provide as follows:
After payment of my debts and meeting the costs of funeral and testamentary expenses and all duties payable in respect of my estate I DIRECT my Trustee TO HOLD the rest and residue of my real and personal property whatsoever and wheresoever situate (“my residuary estate”) UPON TRUST for distribution as follows:-
a.IF my spouse DAVID WILLIAM WILDEN survives me at my death then I DIRECT my Trustee to retain my right, title and interest in my property situate at 7 York Avenue East Ivanhoe or such other principal place of residence that I may own at my death (“the property”) and all my furniture and household and domestic effects therein to permit my spouse DAVID WILLIAM WILDEN to reside therein for and during his lifetime from the date of my death (“the period”) so long as he in the opinion of my Trustee makes the property his principal place of residence and conditional upon him paying all rates, taxes, and other outgoings of a recurring nature in respect thereof and keeping all improvements insured for their full insurable value against loss or damage and maintaining the property in good and tenantable repair (excluding structural repairs and maintenance) AND I DIRECT that should my said spouse DAVID WILLIAM WILDEN desires to reside in some other principal place of residence then I hereby authorise my Trustee to sell the said property and out of the net proceeds of the sale thereof purchase such other residence as my said spouse shall choose provided always that no more than the net proceeds of such sale shall be required to cover all the costs of sale and purchase and conveyance of the properties such alternative residence to be held upon the same terms and conditions as hereinbefore provided and I FURTHER DIRECT my Trustee to set aside from my estate a sum of fifty-thousand dollars ($50,000-00) and to hold the same and the investments from time to time representing the same (“the Repair Fund”) for the purpose of paying from time to time for any structural maintenance or repairs to the said property or alternative residence PROVIDED that if my said spouse DAVID WILLIAM WILDEN dies during the said period of the occupation of the said property or alternative residence his principal place of residence or breaches any of the aforesaid conditions (whichever first occurs) then I DIRECT my Trustee to hold the said property or alternative residence and all my furniture and household and domestic effects therein together with the balance remaining (if any) of the Repair Fund to my Trustee ON TRUST and divide same into EIGHT (8) equal shares for distribution as follows:-
i.I GIVE SIX (6) equal shares such of my nephews NICHOLAS MELLER, PAUL MELLER and STEPHEN MELLER as survive me and if more than one then to them as tenants in common in equal shares absolutely PROVIDED HOWEVER that if any of my said nephew’s NICHOLAS MELLER, PAUL MELLER and STEPHEN MELLER fail to survive me leaving a child or children who shall be living at my death or be born thereafter and attain or shall have attained the age of TWENTY-ONE (21) YEARS such child or children shall take and if more than one then in equal shares absolutely the share which his or their father would have taken had he or they survived me;
ii.I GIVE ONE (1)equal share the JEWISH NATIONAL FUND of 306 Hawthorn Road South Caulfield for the general purpose of the said JEWISH NATIONAL FUND and I DIRECT that the receipt of the Treasurer or other proper officer for the time being of the JEWISH NATIONAL FUND shall be a full and sufficient discharge to my Trustee for any money paid to it or applied by my Trustee in its favour and my Trustee shall not be bound to see its application thereof;
iii.I GIVE ONE (1)equal share the UNITED ISRAEL APPEAL (UIA) of 306 Hawthorn Road South Caulfield for the general purpose of the said UNITED ISRAEL APPEAL and I DIRECT that the receipt of the Treasurer or other proper officer for the time being of the UNITED ISRAEL APPEAL shall be a full and sufficient discharge to my Trustee for any money paid to it or applied by my Trustee in its favour and my Trustee shall not be bound to see its application thereof;
…
b.I DIRECT my Trustee TO HOLD the balance of my residuary estate not otherwise distributed UPON TRUST and divide same into EIGHT (8) equal shares for distribution as follows:-
i.I GIVE SIX (6) equal shares such of my nephews NICHOLAS MELLER, PAUL MELLER and STEPHEN MELLER as survive me and if more than one then to them as tenants in common in equal shares absolutely PROVIDED HOWEVER that if any of my said nephew’s NICHOLAS MELLER, PAUL MELLER and STEPHEN MELLER fail to survive me leaving a child or children who shall be living at my death or be born thereafter and attain or shall have attained the age of TWENTY-ONE (21) YEARS such child or children shall take and if more than one then in equal shares absolutely the share which his or their father would have taken had he or they survived me;
ii.I GIVE ONE (1) equal share the JEWISH NATIONAL FUND of 306 Hawthorn Road South Caulfield for the general purpose of the said JEWISH NATIONAL FUND and I DIRECT that the receipt of the Treasurer or other proper officer for the time being of the JEWISH NATIONAL FUND shall be a full and sufficient discharge to my Trustee for any money paid to it or applied by my Trustee in its favour and my Trustee shall not be bound to see its application thereof;
iii.I GIVE ONE (1) equal share the UNITED ISRAEL APPEAL (UIA) of 306 Hawthorn Road South Caulfield for the general purpose of the said UNITED ISRAEL APPEAL and I DIRECT that the receipt of the Treasurer or other proper officer for the time being of the UNITED ISRAEL APPEAL shall be a full and sufficient discharge to my Trustee for any money paid to it or applied by my Trustee in its favour and my Trustee shall not be bound to see its application thereof;
The effect of the will is that David has life interest in the York Avenue property, with access to the repair fund of $50,000.00, with the ability to instruct the trustee of Annette’s estate (‘estate’) to sell the York Avenue property and purchase an alternative property with the net proceeds of sale of the York Avenue property. The balance of the assets of the estate are to be divided into four equal shares and be paid to each of Annette’s three nephews, with the last quarter share to be divided between two charities, United Israel Appeal and Jewish National Fund (‘charities’), to which Annette had made modest donations during her lifetime. Upon David’s death, the proceeds of sale of the York Avenue property (or any alternative property purchased by the trustee in accordance with the terms of the will) are to be distributed in accordance with the formula set out above.
Probate of Annette’s will was granted to Stephen Meller, one of Annette’s nephews, on 15 April 2021. This proceeding was issued on 23 September 2021.
David is 74 years of age and currently receives an age pension of $660.00 a fortnight and a New Zealand pension of $640.00 per month. David has approximately $5,000.00 in savings and a car worth approximately $5,000.00 which was transferred to him from the estate. David does not have any superannuation or any other assets of significant value.
David says that the terms of the will failed to make adequate provision for his proper maintenance and support. He seeks sufficient funds from the estate to enable him to purchase a suitable property in the Ivanhoe area outright (that is, not subject to any remainder interest), and to fund the costs associated with that purchase (including new furnishing and appliances), funds for the purchase of a new car, a fund for travel to Israel and New Zealand, a fund for private health insurance and charitable donations, and a fund to supplement his current income[1]. The total amount sought by David is a little short of $1.5 million. Based upon the current valuation of the York Avenue property of $1,750,000.00, and the current estimate of the liabilities of the estate, any order for provision of the quantum and form sought by David would leave approximately $500,000.00 to be distributed between Annette’s nephews and the charities.
[1]Counsel for David prepared an aide memoire setting out in some detail the approximate costs of these items, which was very helpful.
Shortly prior to the trial, the defendant deposed as to the financial position of the estate as at 14 February 2023, as follows:
(a) the assets of the estate included the following:
(i) $389,879.26 held in the estate’s solicitors trust account[2];
[2]A substantial proportion of the funds held in the estate’s solicitors trust account had their origin in Annette’s superannuation fund. The withdrawal benefit of $345,412.48 (as at 30 June 2019) was paid to the estate. It is not clear whether David made a claim to be paid the superannuation benefit, given that he was arguably a dependant of Annette, or, if he did, why any claim was rejected.
(ii) the York Avenue property, valued at approximately $1,750,000.00; and
(iii) blue chip shares and unpaid share dividends of $133,346.40.
(b) the liabilities of the estate included the following:
(i) paid estate liabilities totalling $36,630.22;
(ii) further estimated liabilities of approximately $170,000.00, largely made up of the legal fees incurred by the parties to this proceeding. There may also be a modest income tax liability. It is common ground between the parties that all of the parties’ legal costs (including legal costs incurred by the charities) should be paid by the estate, and I agree that this is appropriate in all of the circumstances. Depending upon the actual legal costs incurred by the parties, the size of any tax bill, and the sale price of the shares held by the estate, the assets of the estate which are not subject to the life interest in favour of David are valued at approximately $345,000.00.
Background
Annette was born on 26 March 1944 in Kew, Victoria and was the child of Jewish immigrants from Hungary. Annette has one brother, David Meller, and three nephews, David’s children.
Annette was educated at the University of Melbourne and worked as a social worker until she retired in her early sixties.
Annette was not raised in the Jewish faith, and was baptized as a Christian in her early thirties, attending what is now known as Neuma Church in Richmond (‘Church’) regularly, where she met David in the early 1990s.
Annette was diagnosed with bipolar disorder when she was 17 years old, and took medication to manage this condition throughout her life. In 2006, Annette was diagnosed with breast cancer and following treatment went into remission. She retired from the workforce at around this time. By 2016, she was beginning to show signs of cognitive decline, and was diagnosed with bowel cancer in 2018.
David was born in Dunedin, New Zealand and moved to Melbourne in 1988 to continue his studies in Hebrew. Upon arriving in Melbourne, David attended the Church.
Annette and David met at a Church event in 1992 and married on 8 April 1994. Neither David nor Annette had been married previously or had any children. Both David and Annette regularly participated in Church activities during the course of their marriage. Since David’s arrival in Australia, he has worked in hardware stores, a paint store, Bunnings Warehouse, and a vehicle spare parts manufacturer. He retired from the workforce when he was retrenched in about 2010, and has undertaken volunteer work at Jewish Care ever since.
At the date of their marriage David owned a flat in Abbotsford, which he sold in 1996. The proceeds of sale of this property, along with funds from the sale of shares and a compensation payout he received for a workplace injury were used by the couple for household expenses.
In or around 2016, Annette’s general health and cognitive function declined and David assumed the role of her full-time carer, with little if any assistance from others
The evidence
The parties filed a joint court book which included:
(a) an affidavit of David William Wilden affirmed on 15 March 2022;
(b) affidavits affirmed by the defendant, Stephen David Meller on 29 June 2022 and 14 February 2023;
(c) an affidavit of Jeffrey Neil Feldman affirmed on 21 September 2022; and
(d) an affidavit of Jacqueline Chait affirmed on 21 September 2022.
None of the deponents of the affidavits were required to attend the trial for cross-examination.
In his affidavit, David deposed as to the terms of the will, his and Annette’s personal background, their relationship and marriage, his contributions to the maintenance and upkeep of the York Avenue property, Annette’s medical history, and his current financial circumstances, much of which has been summarised earlier in these reasons.
The two affidavits affirmed by the defendant, Stephen Meller, were confined to information concerning the financial position of the estate.
Jeffrey Neil Feldman, Chief Executive Officer of the United Israel Appeal Refugee Relief Fund Ltd (‘UIA Australia’) deposed that the key objectives of UIA Australia are to raise money and administer funds for:
(a)the relief, welfare, maintenance and education (including transport to Israel) of persons suffering persecution, famine or other forms of physical or economic hardship in countries outside the State of Israel; and
(b)the integration into Israeli society through the provision of care and maintenance, education and vocational training, of persons who have sought refuge in Israel from persecution, famine or other forms of physical or economic hardship and who have settled or intend to settle in the State of Israel.
Mr Feldman deposed that UIA Australia’s records demonstrate that Annette was a supporter of the charity since at least 2009. UIA Australia’s records show that Annette and David made donations between 2009 and 2019 totalling $7,800.00, noting that donations from 2010 onwards were made in David’s name only.
Jacqueline Chait, Legacy Manager at the Jewish National Fund (‘JNF’) deposed that the mission of JNF is the “continued wellbeing of the Jewish people and the land of Israel”.
Ms Chait deposed that Annette and David made regular donations to JNF from 2006 to 2019, totalling $14,676.20. Ms Chait was aware that Annette had included JNF in her will and the gift to JNF was mentioned by Annette to Ms Chait when she visited the York Avenue property.
Save for filing the affidavits referred to above, the charities took no part in the trial of the proceeding.
David’s submissions
David submitted that he contributed to the welfare of Annette and to the care and maintenance of the York Avenue property throughout their 25 year marriage, by:
(a) applying the sale proceeds of his Abbottsford flat to his and Annette’s living expenses;
(b) applying his wages to their shared household and living expenses;
(c) completing maintenance works at the York Avenue property, including painting the house and mowing the lawns;
(d) paying for various repairs at the York Avenue property, including the cost of fixing the roof and the front steps;
(e) applying his workplace compensation payout of $17,000.00 to purchase shares which were then periodically traded in order to contribute towards their household expenses; and
(f) his care for Annette towards the end of her life due to her illness, namely, cooking, cleaning and otherwise caring for Annette.
David submitted that the Court should follow the general rule outlined by Powell J in Luciano v Rosenblum[3] regarding a testator’s duty to provide for their surviving spouse:
to the extent to which his assets permit him to do so, he ensure that she is secure in her home, that she has an income sufficient to permit her to live in the style to which she is accustomed, and that she has available to her a fund to which she might resort in order to meet any unforeseen contingencies.[4]
[3](1985) 2 NSWLR 65.
[4]Ibid.
Referring to Blair v Blair[5], David submitted that:
[The] test remains one of whether and if so what provision a wise and just testator would have thought it his moral duty to make in the interests of the claimant.[6]
[5](2004) 10 VR 69.
[6]Ibid [41].
David submitted that the absence of any competing needs means that the Court can be more generous when determining what is adequate for his proper maintenance and support.[7] Annette’s adult nephews have not asserted any competing financial need, and Annette did not have any moral obligation to provide for them or the charities in her will.
[7]Jones (a pseudonym) v Smith [2016] VSCA 178 [66].
David submitted that Annette’s primary obligation was to provide for David, her spouse of 25 years. Annette was obliged to ensure that her husband had a secure roof over his head and a nest egg to meet both his immediate needs and to provide for future contingencies.
David submitted that the size of estate is sufficient to provide for his proper maintenance and support in the form of a freehold interest in a suitable property in the Ivanhoe area (with a value of approximately $1 million) and a suitable nest egg to supplement his modest income from the aged pension, and to permit him to travel and to continue to make charitable donations.
David submitted that he should not be forced to rely on the trustee of the estate to make accommodation or other lifestyle decisions.
The defendant’s submissions
The defendant accepts that the will failed to make adequate provision for David’s proper maintenance and support, and, as such, that the only issue in this proceeding is the question of the quantum of provision to be made to David and its form.
The defendant accepted that whilst Annette provided David with a secure home under the terms of the will, she failed to provide additional funds to enable David to continue the lifestyle to which he was accustomed, or to provide a “nest egg” to meet any vicissitudes and uncertainties of life.
The defendant submitted that the apparent rationale underlying the dispositions made by Annette in the will were:
(a) first, to provide David with security of accommodation for the remainder of his life; and
(b) secondly, to enable the York Avenue property to pass to her brother’s children and the charities following David’s death in circumstances where:
(iii) David made no direct contribution to the purchase or acquisition of the property;
(iv) Annette had no children of her own; and
(v) Annette was a single woman who had mental health challenges in her early life, and for those reasons she inherited the York Avenue property from her parents, in circumstances where one might otherwise expect that she and her brother would have benefitted equally from their parents’ estate.
The defendant submitted that it made sense for Annette to leave the property to her nephews where Annette and David had no children, either together or from other relationships, and where leaving the property to David would potentially result in the property passing to strangers to Annette upon David’s death.
The defendant accepted that the appropriate measure of a spouse’s moral obligation to provide for the proper maintenance and support of the surviving spouse is as set out in Luciano v Rosenblum.[8] The defendant also concedes that the will failed to meet that appropriate measure by failing to bolster David’s financial position or to provide a fund to account for future uncertainties.[9]
[8](1985) 2 NSWLR 65.
[9]See Davison v Kempson [2018] VSCA 51; Re Dodson [2019] VSC 833 [19].
However, the defendant rejected the contention that the bulk of the estate should be transferred to David absolutely. The defendant submitted that an appropriate measure for the provision for David’s proper maintenance and support would be achieved by David (without jeopardising his Centrelink entitlements) being provided from the estate:
(a) a portable life interest in the York Avenue property (via a Crisp[10] order);
(b) the sum of $100,000.00 absolutely; and
(c) a life interest in the assets of the residuary estate to generate income to supplement his income from the aged pension, with any travel expenses and charitable donations to be funded from the additional income generated by the residue of the estate.
[10]See Crisp v Burns Philp Trustee Company Ltd, Unreported, Holland J, 18 December 1979.
The defendant agreed that the terms of the life interest conveyed by the will did not provide sufficient flexibility to meet David’s needs over time. In particular, the will does not provide for part of the proceeds of sale of the York Avenue property to be used to fund an accommodation bond for residential aged care if ultimately required. The defendant referred to the decision of McMillan J in Re Schlink; Keane v Corns[11] where the appropriate use of a Crisp order was discussed:
Relief in the form of a Crisp order typically arises in circumstances where the Court orders additional provision to enhance the existing life interest of a beneficiary. The order is a practical way of crafting relief which provides for the proper maintenance and support of an applicant in a flexible manner, while also preserving the estate for the remaining beneficiaries. The usual circumstance in which a Crisp order may be appropriate in family provision claims is where an applicant for further provision is a surviving spouse or partner of a deceased and the deceased failed to provide adequately for them.[12]
[11][2020] VSC 180.
[12]Ibid [79].
The defendant submitted that the moral duty of Annette went no further than the obligation to provide for the proper maintenance and support of the plaintiff in the form and amount outlined in paragraph 40 above, referring to Callaway JA’s observation in Grey v Harrison[13] that:
Secondly, it is one of the freedoms that shape our society, and an important human right, that a person should be free to dispose of his or her property as he or she thinks fit. Rights and freedoms must of course be exercised and enjoyed conformably with the rights and freedoms of others, but there is no equity, as it were, to interfere with a testator's dispositions unless he or she has abused that right. To do so is to assume a power to take property from the intended object of the testator's bounty and give it to someone else. In conferring a discretion in the wide terms found in s. 91, the legislature intended it to be exercised in a principled way. A breach of moral duty is the justification for curial intervention and simultaneously limits its legitimate extent. So much may be derived from the concept of “proper” maintenance and support but also, and more fundamentally, from those considerations.[14]
[13][1997] 2 VR 359.
[14]Ibid, 366.
The defendant observed that David’s concerns about any accommodation or lifestyle decisions remaining with the defendant could be ameliorated by the appointment of an independent trustee to manage the estate.
The requirements of the Act
When considering an application for further provision under Part IV of the Act, the Court must have regard to certain mandatory relevant considerations, and may have regard to a number of discretionary factors.
Section 91(2) of the Act contains the mandatory relevant considerations, and provides as follows:
(2)The Court must not make a family provision order under subsection (1) unless satisfied—
(a)that the person is an eligible person; and
(b) …
(c)that, at the time of death, the deceased had a moral duty to provide for the eligible person’s proper maintenance and support; and
(d)that the distribution of the deceased’s estate fails to make adequate provision for the proper maintenance and support of the eligible person, whether by—
(i) the deceased’s will (if any); or
...
(4)In determining the amount of provision to be made by a family provision order, if any, the Court must take into account—
(a) the degree to which, at the time of death, the deceased had a moral duty to provide for the eligible person; and
(b)the degree to which the distribution of the deceased’s estate fails to make adequate provision for the proper maintenance and support of the eligible person; and
...
(5) The amount of provision made by a family provision order—
(a)must not provide for an amount greater than is necessary for the eligible person’s proper maintenance and support; and
...
Section 91A(1) of the Act provides as follows:
Factors to be considered in making family provision order
(1) In making a family provision order, the Court must have regard to—
(a) the deceased’s will, if any; and
(b)any evidence of the deceased’s reasons for making the dispositions in the deceased’s will (if any); and
(c)any other evidence of the deceased’s intentions in relation to providing for the eligible person.
Section 91A(2) sets out the discretionary factors which may be taken into account in making a family provision order, as follows:
(2)In making a family provision order, the Court may have regard to the following criteria—
(a)any family or other relationship between the deceased and the eligible person, including—
(i)the nature of the relationship; and
(ii)if relevant, the length of the relationship;
(b)any obligations or responsibilities of the deceased to—
(i)the eligible person; and
(ii)any other eligible person; and
(iii)the beneficiaries of the estate;
(c)the size and nature of the estate of the deceased and any charges and liabilities to which the estate is subject;
(d)the financial resources, including earning capacity, and the financial needs at the time of the hearing and for the foreseeable future of—
(i)the eligible person; and
(ii)any other eligible person; and
(iii)any beneficiary of the estate;
(e)any physical, mental or intellectual disability of any eligible person or any beneficiary of the estate;
(f)the age of the eligible person;
(g)any contribution (not for adequate consideration) of the eligible person to—
(i)building up the estate; or
(ii)the welfare of the deceased or the deceased’s family;
(h)any benefits previously given by the deceased to any eligible person or to any beneficiary;
(i)whether the eligible person was being maintained by the deceased before that deceased’s death either wholly or partly and, if the Court considers it relevant, the extent to which and the basis on which the deceased had done so;
(j)the liability of any other person to maintain the eligible person;
(k)the character and conduct of the eligible person or any other person;
(l)the effects a family provision order would have on the amounts received from the deceased’s estate by other beneficiaries;
(m)any other matter the Court considers relevant.
Discussion
There is no dispute that David is an eligible person, for whom Annette owed a moral duty to make adequate provision for his proper maintenance and support. There is also no dispute that the will failed to make adequate provision for David’s proper maintenance and support, and there is sufficient capacity in the estate to make further provision for David. I agree. While the will provides David with secure accommodation for life, no fund was made available to supplement his meagre financial resources, in circumstances where Annette had the capacity to do so, and there are no real competing demands upon the estate.
The critical issue in this proceeding is whether the moral duty owed by Annette to David requires the provision to him of an absolutely interest in a property, along with a lump sum payment of cash, or whether making an order in those terms goes beyond what is required to fulfil Annette’s moral duty, and would amount to an undue interference with Annette’s testamentary intentions.
As noted above, s 91A(1) of the Act provides that, in making a family provision order, the Court must have regard to the terms of the will, and any other evidence of the testator’s intentions and reasons for making the dispositions in the will that they did.
I accept the defendant’s characterisation of Annette’s rationale for granting only a life interest in the York Avenue property to David. First, it was clear that she wanted to provide David with secure accommodation, and to enable him to continue to live in the York Avenue property if he wished to do so. However, it is clear that she wanted the York Avenue property to ultimately revert to her family of origin, perhaps at least in part to compensate her brother’s family for her having received the full and unencumbered use of the York Avenue property for nearly 40 years. As for the charitable bequests, it appears from the evidence that she had a personal interest in and connection with the charities.
In those circumstances, and given David’s age and lack of dependents, there are compelling reasons for not departing too radically from what could be described as the fundamental architecture created by the terms of the will. In particular, I am not persuaded that making adequate provision for David requires making sufficient funds available for him to purchase a residential property absolutely. However, I also agree that the terms of the will fail to provide the necessarily flexibility to meet David’s needs over time, and making a Crisp order is appropriate. Further, any concerns David may have about having insufficient independence from the defendant could be at least partially alleviated by the appointment of an independent professional trustee.
In sum, while there is clearly a jurisdictional basis for making an order for further provision for David, in my view, making an order for further provision of the quantum and form sought by David in this proceeding may well infringe the terms of s 91(5) of the Act, by going further than what is necessary to provide for David’s proper maintenance and support. In particular, I am not persuaded that conferring an absolute interest in approximately 75 percent of the value of the estate is necessary or appropriate.
I shall now turn to the discretionary factors relevant to the question of what order should be made by way of further provision. As will be seen, the discretionary factors largely tend towards making a generous award for further provision.
The nature and length of the relationship
David and Annette were married for 25 years.
The obligations of Annette to David and the other beneficiaries of the estate
Annette had an obligation to David as her spouse of 25 years. Annette did not have any obligation to provide for the other beneficiaries of the estate, being her nephews and the charities.
The size and nature of the estate and liabilities of the estate
While the estate is not necessarily a large estate in contemporary terms, it is of a sufficient size to more than adequately meet David’s needs, as well as to give effect to Annette’s testamentary intentions.
The financial resources, earning capacity and financial needs of David
David has limited savings and other financial resources. He is no longer in the workforce, and, given his age, it is unlikely that David will ever return to work.
Any disability and the age of David
David is 74, and in good health. I assume his submissions to the effect that he could be expected to live another fifteen years are based upon the current ABS Life Tables. One might expect his health and mobility to decline over that period.
David’s contributions to building up the estate and the welfare of Annette
While David did not contribute to the purchase of the York Avenue property, he did contribute financially and in kind to the household and upkeep and maintenance of the York Avenue property, which in turn may well have indirectly assisted Annette to build up her superannuation fund and other investments before she retired from the workforce in about 2006. The uncontested evidence is that David was also Annette’s full time carer in the three years prior to her death.
Any benefits previously provided to David or other beneficiaries and whether David was being maintained by Annette
David was partially maintained by Annette, in that she provided him with secure accommodation at the York Avenue property.
The liability of any other person to maintain David
No other person is liable to maintain David.
The character and conduct of David
No issue has been raised about David’s character and conduct, and indeed, the limited evidence suggests that he was a caring and supportive husband to Annette, and that his care for her in her final years was exemplary.
The effect a family provision order would have on other beneficiaries
Any payment to David absolutely would diminish the funds payable to the current beneficiaries of the estate immediately, and/or the funds payable to them upon the determination of the life interest. If David was awarded provision in the quantum and form sought by him, that would leave no more than $500,000.00 available for immediate distribution between the beneficiaries of the estate. If the formulation proposed by the defendant was to be adopted, the assets of the estate would be reduced by $100,000.00 (from the fund available for immediate distribution), and the beneficiaries’ entitlement to the balance of the residuary estate would continue to be postponed until after David’s death.
Any other matter the Court thinks relevant
The main other relevant matter is that Annette clearly intended that her family of origin and, to a lesser extent, the charities, should benefit from her will. However, it seems to me that keeping faith with the underlying rationale for conferring only a life interest in the York Avenue property to David is of greater relevance when determining the ultimate disposition of the York Avenue property, rather than the disposition of the other assets of the estate. Put another way, while Annette may have understandably felt a moral obligation to pass the York Avenue property back to her family, I cannot see how such a moral obligation could attach to the other assets of her estate, such as her superannuation payout and other savings and investments.
Conclusion
As discussed earlier in these reasons, having regard to the mandatory relevant considerations set out in ss 91 and 91A(1) of the Act tells against making fundamental changes to the architecture of the will, and in particular, awarding an absolute interest in the York Avenue property (or providing David with sufficient funds to purchase an alternative property absolutely). I agree with the defendant that provision of that nature is not necessary to remedy Annette’s failure to fulfil her moral duty to David, and would amount to an excessive interference with Annette’s clear testamentary intentions. I also agree that making a Crisp order with respect to the York Avenue property would provide David with greater flexibility as his needs change over time, and, should David elect to direct that the York Avenue property be sold, the income from any surplus from the proceeds of sale could be used to supplement his income.
The defendant accepts that it is appropriate for David to receive what might be described as a ‘nest egg’. The defendant submitted that an appropriate nest egg would be $100,000.00. This compares with the sum of $304,000.00 sought by David, being the total of the items in the aide memoire prepared by David’s counsel over and above the funds required for the purchase of an alternative property and ancillary expenses such as stamp duty.
As described earlier in these reasons, the current assets of the estate, excluding the York Avenue property, are valued at $523,225.66. There are unpaid liabilities of approximately $180,000.00 (primarily legal fees for this proceeding, plus an amount of $10,000.00 for any tax liability), leaving the sum of $343,225.66. Coincidentally, this sum is almost equivalent to the superannuation benefit paid to the estate after Annette’s death.
In my view, the balance of the non-real estate assets of the estate after payment of the estate’s liabilities should be paid to David. While this sum is yet to be finally determined, it is unlikely to be much more than the sum claimed in the aide memoire, as the liabilities of the estate may well exceed $180,000.00. Further, the costs ascribed to individual items in the aide memoire are modest. For example, I would say that it is reasonable for David to be able to buy a new car, or close to a new car, given his age and stage of life. Further, funding for two overseas trips (one to New Zealand) in the next 15 years or longer is hardly an extravagance. Finally, as noted above, consideration of the discretionary factors referred to in s 91A(1) of the Act weighs in favour of making relatively generous provision for David, particularly given that the interests of the other beneficiaries will be preserved by the retention of the life interest in the York Avenue property, or any substitute property.
The close coincidence between the funds left in the estate and the superannuation balance paid to the estate, while not determinative, is relevant to the determination of what amounts to appropriate provision for David. After all, if the superannuation balance had been paid to David in his capacity as a dependent of Annette, either upon a nomination by Annette, or upon an application by David to the trustee of Annette’s superannuation fund, it seems to be that it would have been difficult for David to contend in this proceeding that Annette failed to make adequate provision for his proper maintenance and support in the will. However, given that none of the beneficiaries of the will have identified any particular current need, and given that they will ultimately take substantial shares in a valuable asset, it could not be said that provision of a sum marginally in excess of $300,000.00 would be excessive, given David’s poor financial position and his contributions to Annette’s wellbeing over the last third of her life.
Draft orders to give effect to these reasons will be circulated to the parties for their consideration and comment. I also request that the parties confer and form a view was to whether it would be appropriate to appoint a further or substitute trustee, and if so, the identity of that trustee.
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