Zitman v Zitman
[2023] WASC 135
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: ZITMAN -v- ZITMAN [2023] WASC 135
CORAM: TOTTLE J
HEARD: 14 MARCH 2023, 12 & 13 APRIL 2023
DELIVERED : 2 MAY 2023
FILE NO/S: CIV 2168 of 2021
BETWEEN: PEGGY ZITMAN
Plaintiff
AND
LOUELLA DENISE ZITMAN as executrix of the estate of WILLEM ZITMAN
First Defendant
LOUELLA DENISE ZITMAN
Second Defendant
Catchwords:
Succession - Wills - Inheritance - Application under s 6(1) of the Family Provision Act 1972 (WA) for further and better provision from the testator's estate - Whether gift under the will makes adequate provision for the proper maintenance, support, education or advancement in life for the plaintiff - Turns on own facts
Legislation:
Family Provision Act 1972 (WA), s 6(1), s 7(1)(c)
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | A Spencer |
| First Defendant | : | S Patrick |
| Second Defendant | : | PG McGowan |
Solicitors:
| Plaintiff | : | Solomon Hollett Lawyers |
| First Defendant | : | Alto Legal Pty Ltd |
| Second Defendant | : | Haynes Leeuwin |
Case(s) referred to in decision(s):
Blendell v Byrne [2019] NSWSC 583
Bondelmonte v Blanckensee [1989] WAR 305;
Bosch v Perpetual Trustee Co [1938] AC 463
Butcher v Craig [2009] WASC 164
Christie v Manera [2006] WASC 287
Coates v National Trustees Executors and Agency Co Ltd [1956] HCA 23; (1956) 95 CLR 494
Crossman v Riedel [2004] ACTSC 127
Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127
Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490
Grant v Roberts [2019] NSWSC 843
Hawkins v Prestage (1989) 1 WAR 37
Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134
Kleinig v Neal (No 2) [1981] 2 NSWLR 532
Kohari v Snow [2013] NSWSC 452
Lathwell v Lathwell [2008] WASCA 256
Lemon v Mead [2017] WASCA 215; (2017) 53 WAR 76
MacGregor v MacGregor [2003] WASC 169
Marks v Marks [2003] WASCA 297
McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9
Salmon v Osmond [2015] NSWCA 42
Taylor v Farrugia [2009] NSWSC 801
Underwood v Gaudron [2014] NSWSC 1055
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
TOTTLE J:
Introduction
In these proceedings the plaintiff, one of the five surviving children of the late Willem Zitman (Bill), seeks an order pursuant to s 6 of the Family Provision Act 1972 (WA) (the Act) that adequate provision be made for her proper maintenance, support, education and advancement in life out of her father's estate (the Estate). Intending no disrespect, I will follow the practice adopted at the trial, and will refer to members of the Zitman family by their first names.
After payment of pecuniary legacies of $100,000 to each of Peggy and her brother Paul, the net value of the residue of the Estate is approximately $340,000. Peggy seeks an order to the effect that the entirety of the residue be converted into cash and paid to her so that she can buy an apartment. Peggy does not seek to disturb the legacy to Paul.
Bill was 82 years of age when he died on 6 November 2020.[1] By his will signed on 5 May 2017 (the Will) he appointed his wife Louella as the executrix and trustee of the Estate, provided she survived him, failing which he appointed his sons Xavier, Roury, and Storm as joint executors and trustees.[2] After payment of the pecuniary legacies to Peggy and Paul and payment of just debts, funeral and testamentary expenses, the Will provided that the residue of the Estate be held on trust for Louella, provided she survived Bill, failing which the residue would be held on trust for Xavier, Roury, and Storm as tenants in common and, if any of them predeceased Bill, his share was to be held on trust for his children.[3] Probate of the Will was granted to Louella on 21 July 2021.[4]
[1] Affidavit of Peggy Zitman affirmed 3 November 2021 [2]; Supplementary affidavit of Peggy Zitman affirmed 28 February 2023, 'Attachment PZ-1', 7.
[2] Supplementary affidavit of Peggy Zitman affirmed 28 February 2023, 'Attachment PZ-2', 10.
[3] Supplementary affidavit of Peggy Zitman affirmed 28 February 2023, 'Attachment PZ-2', 12 - 13.
[4] Supplementary affidavit of Peggy Zitman affirmed 28 February 2023, 'Attachment PZ-2', 8.
In support of her application for probate Louella stated that the net value of the Estate was $640,246. It comprised funds in a deposit account of approximately $84,124, shares in a proprietary company (Toyo Graphics Pty Ltd) valued at $207,320 and the benefit of a life assurance policy of $299,050. The balance comprised miscellaneous vehicles, small boats and two shares of nominal value in another proprietary company, Suburban Press Pty Ltd, which is the trustee of a discretionary trust, the Suburban Press Trust.
There is no dispute that the current value of the residue of the Estate is $339,674. This figure takes into account the payment of the pecuniary legacies of $100,000 each to Peggy and Paul and a reduction in the value of the shares in Toyo Graphic Pty Ltd because of a liability for tax generated on a realisation of the value of the shares.
The evidence
Peggy relied on eight affidavits affirmed by her in support of her application.[5] Louella relied on two affidavits sworn by her in her capacity as the first defendant and one affidavit sworn by her in her capacity as the second defendant.[6] In addition, Louella relied on an affidavit sworn by her solicitor.[7]
[5] Affidavit of Peggy Zitman affirmed 3 November 2021, Affidavit of Peggy Zitman affirmed 20 December 2022; Supplementary affidavit of Peggy Zitman affirmed 8 February 2023; Supplementary affidavit of Peggy Zitman affirmed 28 February 2023; Supplementary affidavit of Peggy Zitman affirmed 1 March 2023; Supplementary affidavit of Peggy Zitman affirmed 10 March 2023; Supplementary affidavit of Peggy Zitman affirmed 20 March 2023 (Pension); Supplementary affidavit of Peggy Zitman affirmed 20 March 2023 (Trust).
[6] Affidavit of Louella Denise Zitman sworn 2 March 2022; Affidavit of Louella Denise Zitman sworn 23 January 2023; Affidavit of Louella Denise Zitman sworn 13 February 2023.
[7] Affidavit of Nicole Joanne Woods sworn 15 March 2023.
Peggy was cross-examined extensively as to her credit. The cross‑examination was directed to establishing that Peggy had not been truthful in her evidence about her financial position. In her first affidavit Peggy asserted that she had 'very modest assets' and that her weekly income was not sufficient to meet her weekly expenses. In the light of that assertion, to say the least, it was regrettable that it was necessary for Peggy to affirm a further seven affidavits to explain her financial position and to correct errors in earlier affidavits.
I have been left with the very firm impression that Peggy's evidence about her financial position had been tailored to improve her prospects of success in the present claim. Consequently, I am not prepared to rely on Peggy's evidence as to her finances unless it is corroborated by other evidence and I have reservations about her evidence on other matters, in particular aspects of her relationship with Bill. Without being exhaustive the aspects of Peggy's evidence that lead me to take this approach are as follows:
(a)Peggy failed to disclose savings of $7,350.46 in her first affidavit affirmed on 3 November 2021 and although she disclosed the existence of those savings in the affidavit affirmed by her on 20 December 2022, she did so without acknowledging the omission of any reference to these savings in her earlier affidavit and offered no explanation for the omission.
(b)In her affidavit affirmed on 20 December 2022 Peggy did not disclose the existence of a sum equivalent to approximately $18,000 in one of her bank accounts in the United Kingdom even though she had been in the UK and operated the account as recently as 19 October 2022.
(c)In her affidavit affirmed on 20 December 2022 Peggy deposed that she spent approximately $5,000 on a trip to the United Kingdom and the Netherlands in 'July/August 2022'. In cross‑examination Peggy accepted that she was overseas from some time in July and returned on 19 October 2022. She spent $2,000 on airfares and approximately $10,000 from her accounts in the United Kingdom. Peggy's explanation that her evidence that she spent approximately $5,000 was 'a guestimate' and was 'intended for future travel' was unconvincing.[8]
(d)In her affidavit affirmed on 20 December 2022 Peggy deposed that she had 'tax debts of about $17,000 despite making regular payments of $300 per fortnight to the ATO'.[9] Three aspects of Peggy's indebtedness to the ATO may be noted. First, at the date of Bill's death (6 November 2020) Peggy's debt to the ATO was $1,482 and the debt was discharged by 14 December 2020. Secondly, in September 2021 a debit of $3,028 was raised on Peggy's business activity statement but no payment was made until November 2021 and that payment was only $100 even though Peggy had received the pecuniary legacy of $100,000 from Bill's estate on 22 September 2021. Thirdly, Peggy said that she did not pay off her tax debt 'upon advice',[10] and because she 'was asked to keep it as a liability'.[11]
(e)In her affidavit affirmed on 28 February 2023 Peggy referred to her tax debt which then stood at $18,674.29 but still did not disclose the existence of a sum equivalent of approximately $18,000 in her UK bank account either in the text of her affidavit or in the schedule of her estimated assets and liabilities forming part of attachment 'PZ15' to her affidavit. Peggy said that her lawyers were aware of the $18,000 but was unable to provide an explanation of why it was not included in the schedule of assets and liabilities.
(f)Peggy attached bank statements to her 28 February 2023 affidavit which were redacted to conceal the nature of the expenditure for which payments were made from the accounts. The redaction of the bank statements made it impossible to assess the accuracy of the schedule of weekly estimated income and expenditure that formed part of attachment 'PZ15' to her affidavit.
(g)It was not until she affirmed her affidavit of 10 March 2023 that Peggy disclosed the existence of her accounts in the United Kingdom and that one of the accounts was in credit in a sum the equivalent of approximately $18,000. It is difficult to accept the explanation given by Peggy in the 10 March 2023 affidavit that '[w]hile I was thinking about trial, it occurred to me that I still had bank accounts in the UK'.[12] In the affidavit of 10 March 2023 Peggy disclosed that she had a further bank account in Australia which she used 'solely for paying tax to the ATO and has a current balance of $0'.[13] Further, while I do not underestimate the emotional burden that litigation of this nature places on the parties I do not find Peggy's explanation to the effect that she overlooked the existence of her UK bank accounts because she was 'emotionally invested' in the litigation persuasive.[14]
(h)Peggy's expenditure recorded in the 'schedule of weekly estimated income and expenditure' forming part of 'PZ15' is not a reliable reflection of Peggy's actual expenditure. The estimate of weekly expenditure included the precise figures of $323 for income tax and $146.42 for GST. Peggy accepted that no basis for those figures could be found in her activity statements or her income tax assessment for the year ending 30 June 2021, being the last year in respect of which she had filed an income tax return.[15] Peggy said that her lawyers came up with the figures.[16] Further, Peggy's estimate of her expenditure did not reflect significant expenditure by her on discretionary items.
[8] ts 51.
[9] Affidavit of Peggy Zitman affirmed 20 December 2022 [20].
[10] ts 55.
[11] ts 90.
[12] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023 [7].
[13] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023 [12].
[14] ts 89.
[15] ts 72 - 73.
[16] ts 72.
It is a matter of significant concern that Peggy's affidavit evidence suffered from the problems that I have outlined.
Louella was cross-examined briefly but there was no challenge to her evidence and I accept it.
The facts
Save for the facts relevant to Peggy's financial position the facts were largely uncontroversial.
The Zitman family
Bill married Ms Reinera Derksen in 1959. Peggy was born on 6 February 1961 and was 59 years of age when Bill died. She is now 62 years of age. Roy was Bill and Reinera's second son. He predeceased Bill. Paul was born on 7 June 1968.
Bill and Reinera separated in 1971 after which Peggy and her brothers lived with Bill.
In 1974 Louella started living with Bill and they married on 18 January 1980. Louella was born on 22 May 1954 and was 66 years of age when Bill died and she is now 67 years of age.
Bill and Louella had three children, Xavier born on 10 April 1982 and Roury and Storm - twin brothers born on 12 June 1990.[17]
Peggy's relationship with Bill
[17] Affidavit of Louella Denise Zitman sworn 23 January 2023 [8].
When Peggy was about 17 years of age she moved out of the family home to live in a shared accommodation.[18] At that time, Peggy was completing a hairdressing apprenticeship. She found it difficult to afford to live independently and 'moved in and out' of the family home.[19]
[18] Affidavit of Peggy Zitman affirmed 3 November 2021 [10].
[19] Affidavit of Peggy Zitman affirmed 3 November 2021 [11].
Peggy's evidence was that her relationship with Bill was always strained.[20] That characterisation of her relationship with her father was not disputed by Louella and I accept it. Because of my reservations about Peggy's evidence I do not accept her characterisation of Bill's conduct as 'emotionally and psychologically abusive' or her evidence that Bill would 'constantly verbally attack [her]'.[21]
[20] Affidavit of Peggy Zitman affirmed 3 November 2021 [12] - [13].
[21] Affidavit of Peggy Zitman affirmed 3 November 2021 [12] - [13].
Peggy deposed that Bill did not encourage her to go to university and instead encouraged her to pursue a trade so that she could begin earning money.[22] Again I regard that evidence with caution but ultimately it is not a matter of great significance.
[22] Affidavit of Peggy Zitman affirmed 3 November 2021 [12] - [13].
In 1982 Peggy travelled to the United Kingdom and, apart from short breaks when she returned to Perth, for the next 33 years she lived and worked in the United Kingdom returning to Australia in 2015.[23] Peggy's evidence of her employment history in England was exiguous. She said she worked in administration in various merchant banks but she gave no additional details of her employment history that would enable an assessment to be made of her employment prospects or income earning capacity generally.
[23] Affidavit of Peggy Zitman affirmed 3 November 2021 [14].
In the 33 years in which she lived in England Peggy kept in contact with Bill intermittently. Peggy saw Bill when she visited Perth and on occasions when he travelled to Europe either with Louella or on his own. The extent of their contact was as follows:[24]
[24] Affidavit of Louella Denise Zitman sworn 23 January 2023 [11] - [26].
(a)Peggy returned to Perth for approximately two months in 1983 before returning to London in late 1983 or 1984. On that occasion she stayed in the family home.
(b)Bill and Louella met Peggy when they visited Europe in 1986.
(c)Peggy travelled to Perth on holiday in 1989 and visited Bill and Louella.
(d)In 1990 Bill travelled to England on business and during that trip met Peggy.
(e)In late 1992 or early 1993 Peggy visited Perth on holiday and stayed with Bill and Louella in the family home for 'a few months'.
(f)In 1995 Bill's mother died. Peggy did not return to Perth for the funeral.
(g)In May 1995 Bill and Louella met Peggy on holiday in Holland and she stayed with them and their sons in a motorhome for approximately a week. In that week Peggy and Bill argued about Bill's mother's estate. Peggy's account of the argument was that Bill had previously agreed that Peggy would receive a pink vintage ring that had been promised to her from Bill's mother's estate. When the ring was discussed Bill accused Peggy of being 'greedy and rapacious'.[25] Louella's evidence was that as a result of the argument the relationship between Peggy and Bill was 'strained and distant'.[26] Peggy said that she did not speak to her father for about six years after the conversation about the ring. I accept Louella's evidence about the effect the argument had on the relationship between Bill and Peggy and accept Peggy's evidence that she did not speak to Bill for about six years after the argument.
(h)In about 2001 Peggy visited Perth to spend time with her mother who was unwell. On that visit Peggy met Bill and Xavier and went to watch Storm and Roury play basketball.
(i)In mid-2006 Peggy and Bill communicated by email and text message and Peggy informed Bill that Reinera had died. Peggy did not return to Perth for Reinera's funeral.
(j)In 2007 Bill contacted Peggy to inform her that Roy had died.
(k)In 2009 Peggy visited Perth over Christmas. She did not stay with Bill and Louella though she spent part of Christmas Day with them.
(l)In 2010 Bill met Peggy at the Bendigo Bank, Forrestfield to receive her share of Roy's estate.
(m)In November or December 2012 Peggy returned to Perth for an extended visit and stayed for six months in a flat described as being owned by Bill and Louella. In fact, the flat was not owned by Bill and Louella but by Suburban Press Pty Ltd in its capacity as the trustee of the Suburban Press Trust.
(n)In November or December 2013 Peggy returned to Perth for another extended visit and stayed with Bill and Louella in their home for approximately six months.
[25] Supplementary affidavit of Peggy Zitman affirmed 28 February 2023 [22].
[26] Affidavit of Louella Denise Zitman sworn 23 January 2023 [19].
Peggy said that after seeing her father a couple of times he would be cruel to her by verbally attacking her and saying nasty things to her. This would lead her to stop seeing him and she would return to England.
In May 2014 Peggy ceased any contact with Bill. Peggy did this without informing Bill of her intentions. Her evidence was to the effect that when she had contact with her father he would communicate with her in a manner she considered amounted to emotional and psychological abuse and that she had reached the point that 'enough was enough'.[27] I accept that the relationship between Peggy and Bill was always strained and that in 2014 Peggy considered that she did not want to maintain a relationship with Bill into the future. As I have already stated I do not accept Peggy's characterisation of Bill's conduct.[28]
[27] Affidavit of Peggy Zitman affirmed 20 December 2022 [5].
[28] Affidavit of Peggy Zitman affirmed 3 November 2021 [12]; Affidavit of Peggy Zitman affirmed 20 December 2022 [4] - [5].
Peggy did not inform Bill or Louella that she had returned to live in Perth. The last occasion on which she saw Bill was in a Perth shopping centre in September 2018. Neither of them approached the other.
Storm telephoned Peggy between seven to 10 days before Bill died. Peggy missed the call but she telephoned Storm back and he told her that Bill was in hospital and was suffering from a lung condition. That was the first time that Peggy had heard that Bill was sick. Storm asked her whether she wanted to see Bill or speak to him on the telephone. Peggy said that she would think about it. Peggy subsequently telephoned Roury to talk about Bill's condition. Roury told Peggy that Bill was unresponsive and asked Peggy to visit Bill before he passed away. Peggy went to the hospital but arrived after Bill had died. She spoke briefly to Louella and left. Peggy attended Bill's funeral.
Peggy's personal circumstances
Peggy is a single person. After her return to Perth in 2015 she obtained employment in administrative capacities with state and local government agencies. Some time after early 2017, Peggy started work as an Uber driver.[29] She continued to work as an Uber driver until 8 March 2023 when she was disqualified from driving. Peggy has been charged with drink driving and, although she is contesting the charge, her ability to work as an Uber driver in the future is thus in doubt.
[29] ts 97.
Peggy does not have permanent residential accommodation. Peggy organises her accommodation through a pet‑sitting agency that enables her to pet-sit for people in their homes while they are away on holidays.[30] When she is not pet‑sitting (approximately six weeks a year) Peggy lives with a friend, rents an Airbnb or a motel room at a cost she estimates to be about $120 per night.[31]
[30] Affidavit of Peggy Zitman affirmed 3 November 2021 [21]; Supplementary affidavit of Peggy Zitman affirmed 28 February 2023, 'Attachment PZ-16'.
[31] Affidavit of Peggy Zitman affirmed 3 November 2021 [22].
Peggy adduced evidence of the cost of purchasing and maintaining an apartment. The effect of that evidence was that a one bedroom apartment in the metropolitan area could be acquired for approximately $350,000.
Peggy's financial position
In the table below I set out Peggy's asset and liability position at the date of Bill's death and at (or as close as the available figures allow) to the date of the trial.
Assets
Value of Asset as at the Date of the Deceased's Death (6 November 2020)
Value of Asset as at the date of trial
Household furniture and items
$200[32]
$200
Clothing
$300[33]
$300
Superannuation with Rest in Australia
$4,660.50[34] (30 June 2020)
$11,686.47[35] (16 December 2022)
Re Assure pension fund in UK
$108,626[36]
$84,357.87[37] (22 December 2022)
Cash savings:
ANZ ****-**782
ANZ ****-**244
ANZ ****-**689
ANZ ****-**024
Co-operative bank (UK) ******11 00
Co-operative bank (UK) ******22 00
$7,200[38]
$516.57[39]
$246.09[40]
$482.00[41]
$1,822.11 (25 January 2021)[42]
NA
$8,000.00 (14 March 2023)[43]
$104.41 (20 January 2023)[44]
$91.18 (16 January 2023)[45]
$300.00 (3 January 2023)[46]
$21.98 (21 October 2022)[47]
$18,283.04 (27 October 2022)[48]
Total Assets
$124,053.27
$123,344.95
Liabilities
Debt to the ATO
$1,482[49]
$18,674.29 (21 February 2023)[50]
Credit card debt - ANZ ****-****-****-*014
$900[51]
$5,016.38 (7 December 2022)[52]
Afterpay debt
$736.89[53]
$717.22 (20 March 2023)[54]
Total liabilities
$3,118.89
$24,406.39
Net position
$120,934.38
$98,938.56
[32] Affidavit of Peggy Zitman affirmed 3 November 2021, 'Annexure PZ1', 6.
[33] Affidavit of Peggy Zitman affirmed 3 November 2021, 'Annexure PZ1', 6.
[34] Supplementary affidavit of Peggy Zitman affirmed 8 February 2023, 'Attachment PZ‑3', 6.
[35] Affidavit of Peggy Zitman affirmed 20 December 2022 [27], 'Attachment PZ‑7', 15.
[36] Equivalent to approximately £60,014.64; Supplementary affidavit of Peggy Zitman affirmed 8 February 2023, 'Attachment PZ‑2', 5.
[37] Equivalent to approximately £46,139.96; Supplementary affidavit of Peggy Zitman affirmed 8 February 2023, 'Attachment PZ‑2', 5.
[38] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, 'Attachment PZ‑1', 10.
[39] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, ' Attachment PZ‑1', 23.
[40] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, ' Attachment PZ‑1', 34.
[41] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, ' Attachment PZ‑4', 145.
[42] Equivalent to approximately £996.61; Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, 'Attachment PZ‑3', 105.
[43] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, 'Attachment PZ‑1', 44; Supplementary affidavit of Peggy Zitman affirmed 20 March 2023 (Trust) [5] ‑ [9], 'Attachment PZ‑2', 7 ‑ 10.
[44] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, 'Attachment PZ‑1', 62.
[45] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, 'Attachment PZ‑1', 70.
[46] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, 'Attachment PZ‑4', 149.
[47] Equivalent to approximately £12.02; Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, 'Attachment PZ‑3', 131.
[48] Equivalent of £10,000; Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, 'Attachment PZ‑3', 139.
[49] Supplementary affidavit of Peggy Zitman affirmed 8 February 2023, 'Attachment PZ‑1', 4.
[50] Supplementary affidavit of Peggy Zitman affirmed 1 March 2023, 'Attachment PZ‑1', 4 ‑ 8.
[51] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, 'Attachment PZ‑1', 40.
[52] Supplementary affidavit of Peggy Zitman affirmed 10 March 2023, 'Attachment PZ‑1', 73.
[53] Supplementary affidavit of Peggy Zitman affirmed 28 February 2023, 'Attachment PZ‑15', 131.
[54] Supplementary affidavit of Peggy Zitman affirmed 20 March 2023 (Trust), 'Attachment PZ‑1', 6.
Peggy is unable to withdraw the balance of her Re Assure pension fund until she reaches the age of 66 without paying income tax on it, that is, if she draws down on the pension fund before the age of 66 she will pay income tax but she will not do so after attaining that age.
As of 20 March 2023, Peggy has spent $57,368.30 out of the legacy of $100,000 on legal fees with a further $10,000 held on trust to her solicitors.
Peggy's tax assessment for the year ended 30 June 2021 records her annual taxable income at the date of Bill's death was $56,294. This equated to a weekly income after tax of $935. Peggy has provided no reliable evidence of her taxable income at the date of trial. She explained that she is not required to file her tax return for the year ending 30 June 2022 until May 2023 and had not done so. I will proceed on the basis that Peggy's taxable income remains at the figure shown in her tax assessment for the year ended 30 June 2021 and that her current net weekly income is $935.
I have already explained why I do not accept Peggy's evidence of her estimated weekly expenditure. By reference to Peggy's bank statements and her evidence of the type of expenditure she incurred on a regular weekly basis Louella's counsel estimated regular weekly expenditure at approximately $665. I think that estimate is more realistic than that made by Peggy but for the purposes of this application it is unnecessary to attempt to make a firm finding on this issue.
UK State Pension
During opening oral submissions I raised a question as to whether Peggy was entitled to a state pension by reason of her employment history in the United Kingdom. The hearing was adjourned to enable the question to be investigated. Subsequently further affidavit evidence was filed both by Peggy and by Louella's solicitor. The effect of that evidence is that Peggy will be entitled to receive a UK State Pension from 6 January 2028,[55] one month before Peggy turns 67. This pension is not a means tested pension. Based on current information and exchange rates the UK pension that Peggy will be entitled to receive from 6 January 2028 is $283.71 per week.[56]
[55] Supplementary affidavit of Peggy Zitman affirmed 20 March 2023 (Pension) [2].
[56] Supplementary affidavit of Peggy Zitman affirmed 20 March 2023 (Pension), 'Attachment PZ-1', 5.
Peggy's entitlement to the means tested Australian Age Pension ($1,026.50 per fortnight when Peggy reaches the Australian Pension age of 67) will be reduced if Peggy receives the UK State Pension by 50c for each dollar that Peggy's UK Pension exceeds $190.00 in any given fortnight.[57]
[57] Supplementary affidavit of Peggy Zitman affirmed 20 March 2023 (Pension) [11].
Based on a fortnightly Australian Pension of $1,026.50 and a fortnightly UK State Pension of $567.42, Peggy deposed that she expects to receive a combined amount of $1,405.21 each fortnight after she retires (provided Peggy is over the age of 67), calculated as follows: [58]
[58] Supplementary affidavit of Peggy Zitman affirmed 20 March 2023 (Pension) [12].
UK pension above $190 per fortnight $567.42 - $190.00 = $377.42 Reduction to AUS fortnightly pension
(50c for every $1 over)$377.42 x 0.5 = $188.71
$1,026.50 - $188.71 = $837. 79
Estimated expected fortnightly AUS pension $837.79 + $567.42 = $1,405.21
Suburban Press Trust
The Suburban Press Trust is a discretionary trust established by a deed of trust made on 24 August 1982 and varied thereafter on a number of occasions. Peggy is a member of the class of beneficiaries of the trust. The trustee is Suburban Press Pty Ltd. Louella is the sole director and secretary of Suburban Press Pty Ltd. Peggy has not received any distributions from the Suburban Press Trust.
Louella's Position
Louella did not adduce any evidence as to her financial position.
Relevant statutory provision and legal principles
Section 6(1) of the Act provides:
If any person (in this Act called the deceased) dies, then, if the Court is of the opinion that the disposition of the deceased's estate effected by his will, or the law relating to intestacy, or the combination of his will and that law, is not such as to make adequate provision from his estate for the proper maintenance, support, education or advancement of life of any of the persons mentioned in section 7 as being persons by whom or on whose behalf application may be made under this Act, the Court may, at its discretion, on application made by or on behalf of any such person, order that such provision as the Court thinks fit is made out of the estate of the deceased for that purpose.
Section 7(1)(c) of the Act specifies those applicants who are eligible under s 6(1) and includes a child of the deceased living at the date of the death of the deceased. Thus, Peggy is eligible to make a claim under s 6(1) of the Act.
The relevant legal principles were not in dispute.
The two-stage test
The court undertakes a two‑stage process.[59] The questions posed at each stage are not independent of one another and the relevant considerations overlap.
[59] Lemon v Mead [2017] WASCA 215; (2017) 53 WAR 76 [50].
The first stage of the test, often referred to as the 'jurisdictional question', requires the court to determine whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, support, education and advancement in life of the claimant.[60]
[60] Lemon v Mead [51].
The first stage involves a question which is strictly one of fact, notwithstanding that it involves the exercise of value judgments. The evaluative character of the decision arises from the fact that the court must determine whether the claimant has been left without 'adequate' provision for their 'proper' maintenance.[61]
[61] Lemon v Mead [52].
The second stage, which only arises if the jurisdictional question is answered in the claimant's favour, involves the exercise of discretion.
The jurisdictional question must be formulated and determined as at the date of death of the deceased, having regard to all material facts that existed at the date of death (whether the deceased knew of them or not) and all material eventualities that might at that date reasonably have been foreseen by a deceased who knew the facts.[62] In other words the court must look to what is 'necessary or appropriate prospectively' from the date of death, including events which are contingent as well as those which are certain or exceedingly likely to happen. Advantage may be taken of hindsight if the subsequent occurrences are within 'the range of reasonable foresight'.[63]
[62] Lemon v Mead [54].
[63] Lemon v Mead [55] citing Coates v National Trustees Executors and Agency Co Ltd [1956] HCA 23; (1956) 95 CLR 494, 508.
The word 'proper' connotes something different from the word 'adequate'.[64] 'Adequate' is concerned with the quantum, whereas 'proper' prescribes a standard. In Vigolo v Bostin,[65] in the course of explaining the legislative purpose of the Act and equivalent legislation in other jurisdictions, Gleeson CJ explained:[66]
The 'testamentary duty' which justified legislative interference with a free exercise of testamentary capacity, that is, the duty of a man to make provision for his wife and children, was seen as a moral duty. The legislation was not merely, or even primarily, concerned with relieving the State of the financial burden of supporting indigent widows and children. The courts were not empowered merely to make such provision for an applicant as would rescue the applicant from destitution. The legislative power was to make 'proper' provision. Judicial explanation of what was meant by proper provision was based upon the idea of a moral obligation arising from a familial relationship. That is one of the fundamental ideas upon which the structure of our society is based.
[64] Lemon v Mead [60].
[65] Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191.
[66] Vigolo v Bostin [12].
Determination of whether the provision is 'adequate' for the claimant's 'proper' maintenance involves a scrutiny of the requirements of the claimant for maintenance that were reasonably foreseeable by the deceased and an examination of the totality of the relationship between the claimant and the deceased. The totality of the relationship includes the conduct of the claimant towards the deceased and of the deceased towards the claimant.[67]
[67] Lemon v Mead [63].
The propriety of the provision, if any, made for the claimant is to be assessed by reference to all the circumstances including contemporary accepted community standards.[68] The 'proper' maintenance and support of a child claiming a statutory provision must be relative to the child's age, sex, condition and mode of life and situation generally. The term 'proper' supports an assessment that more may be required than that which is sufficient as a matter of bare necessity to avoid penury.[69]
[68] Devereaux-Warnes v Hall[No 3] [2007] WASCA 235; (2007) 35 WAR 127 [77].
[69] Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, 496 ‑ 497 citing Bosch v Perpetual Trustee Co [1938] AC 463, 476.
If it is determined that the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, support, education and advancement in life of the applicant, then the court, in exercising its discretion to make such provision as it thinks fit, must take into account the relevant facts as they exist at the time of making the order.[70] It is necessary to consider a claimant's financial position, and their need for, and moral claim to, provision from the estate, the need and moral claims of other persons who have a legitimate claim upon the testator's bounty, and the size of the estate, as at the date of the testator's death. The court is not empowered to order more than what is 'adequate' provision for the claimant's 'proper' maintenance.
Claims by adult children
[70] Lemon v Mead [56].
In Blendell v Byrne,[71] Hallen J collated the considerations relevant to a claim by adult children and referred to the relevant passages of the authorities from which the considerations were derived as follows:[72]
[71] Blendell v Byrne [2019] NSWSC 583.
[72] Blendell v Byrne [629].
(a)The relationship between parent and child changes when the child attains adulthood. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.
(b)It is impossible to describe, in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, 'ordinarily the community expects parents to raise and educate their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, and where that is feasible; where funds allow, to provide them with a start in life ‑ such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation'.[73]
(c)Generally, also, 'the community does not expect a parent to look after his or her children for the rest of [the child's life] and into retirement, especially when there is someone else, such as a spouse, who has a prime obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect parents to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute'.[74]
(d)There is no need for an applicant adult child to show some special need or some special claim.[75]
(e)The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration.[76] Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life are relevant.[77] In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased.[78]
(f)The applicant has the onus of satisfying the Court, on the balance of probabilities, of the justification for the claim.[79]
(g)There is no predisposition for or against the making of orders for provision for adult children.[80]
The relevance of estrangement
[73] Taylor v Farrugia [2009] NSWSC 801 [57]; McGrath v Eves [2005] NSWSC 1006; Kohari v Snow [2013] NSWSC 452 [121]; Salmon v Osmond [2015] NSWCA 42 [109].
[74] Taylor v Farrugia [58].
[75] McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566; Kleinig v Neal (No 2) [1981] 2 NSWLR 532, 545; Bondelmonte v Blanckensee [1989] WAR 305; Hawkins v Prestage (1989) 1 WAR 37, 45; Taylor v Farrugia [58].
[76] MacGregor v MacGregor [2003] WASC 169 [179] ‑ [182]; Crossman v Riedel [2004] ACTSC 127 [49].
[77] Marks v Marks [2003] WASCA 297 [43].
[78] Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 [17].
[79] Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134, 149.
[80] Grant v Roberts [2019] NSWSC 843 [169].
As was emphasised by Pullin JA (with whom Buss JA and Le Miere AJA agreed) in Lathwell v Lathwell[81] the word 'estrangement' does not describe the conduct of either party:[82]
It is merely the condition which results from the attitudes or conduct of one or other or both of the parties. If the estrangement is entirely caused by the unreasonable conduct or attitudes of the testator and sustained by the unreasonable conduct of the testator, then the estrangement alone could not amount to disentitling conduct on the part of the applicant.
[81] Lathwell v Lathwell [2008] WASCA 256.
[82] Lathwell v Lathwell [33].
In Underwood v Gaudron,[83] Hallen J identified a number of considerations that are relevant when a claimant has been estranged from the testator. His Honour referred to Pullin JA's observation on the nature of estrangement in Lathwell v Lathwell and proceeded to identify the following considerations as relevant:[84]
(a)The nature of the estrangement and the underlying reason for it is relevant to an application under the Act.
(b)There is no rule that, irrespective of a claimant's need, the size of the estate, and the existence or absence of other claims on the estate, the claimant is not entitled to 'ample' provision if he, or she, has been estranged from the deceased. The very general directions in the Act require close attention to the facts of individual cases.
(c)The court should accept that the deceased, in certain circumstances, is entitled to make no provision for a child, particularly in the case of one 'who treats their parents callously, by withholding, without proper justification, their support and love from them in their declining years. Even more so where that callousness is compounded by hostility'.
(d)Even if the applicant bears no responsibility for the estrangement, its occurrence is nevertheless relevant to the exercise of the court's discretion. That the applicant had no relationship with the deceased for some years, and that there did not, therefore, exist between them the love, companionship and support present in normal parent/child relationships, during those years, is a relevant consideration.
(e)The poor state of the relationship between the applicant and the deceased, illustrated by the absence of contact for many years, if it does not terminate the obligation of the deceased to provide for the applicant, may operate to restrain amplitude in the provision to be made.
(f)Where the applicant has been estranged from the deceased, the application of the Act requires that the estrangement be appraised and its causes considered.
[83] Underwood v Gaudron [2014] NSWSC 1055.
[84] Underwood v Gaudron [231].
Analysis and disposition
The jurisdictional question
The following observations may be made.
First, Bill recognised that Peggy had a moral claim to provision out of the Estate by leaving her $100,000. The question is whether this legacy was adequate provision for her proper maintenance, support, education or advancement in life.
Secondly, at the date of Bill's death, Peggy's assets were modest. She had accumulated little in the way of savings and what she had accumulated in terms of superannuation, though supplemented by her entitlement to the non‑means tested UK state pension, was also limited. Peggy did not have the capital reserves to meet the demands of advancing years. Notwithstanding the reservations I hold about Peggy's evidence of her financial position I accept that her income at the time of Bill's death was modest. There is no evidence to suggest that Peggy had a latent capacity to earn a higher income but chose not to do so. I find that at the date of Bill's death Peggy required financial assistance to improve her prospects in life. She required capital to provide her with some financial protection against the vicissitudes of life as her ability to earn an income declined with age and as the requirement for permanent accommodation became more pressing.
Thirdly, while it is significant that Louella was the chosen object of Bill's testamentary bounty (a matter to which no little weight is to be attached), I infer from the fact that Louella has not adduced any evidence of her financial circumstances that she has adequate resources on which to live and she does not wish to advance a competing claim of financial need.
Fourthly, Peggy has lived independently since the age of 21. She lived her own life distant both geographically and emotionally from Bill. Consistent with Louella's description of their relationship, Peggy neither derived emotional support from Bill nor provided it to him. Apart from those occasions on which she was provided with accommodation by Bill and Louella while holidaying in Perth, she received no assistance of a financial or material nature from Bill. There was no suggestion in the evidence that Bill had encouraged Peggy to think that she would be provided for out of the Estate let alone would be provided with a legacy sufficient to purchase a home. Indeed there is nothing in the evidence to suggest that home ownership was a matter to which Peggy aspired or to which she had turned her mind.
Fifthly, Peggy decided to have no further contact with Bill in 2014. I infer from that decision and, that Peggy returned to live in Western Australia without telling Bill and Louella, that she considered her relationship with Bill had broken down both completely and irretrievably. Family relationships generally, and relationships between parents and children are complex. Simplistic attributions of fault to one party or the other rarely reflect those complexities. The bonds between family members often weaken with age without fault on either side. My reservations about Peggy's evidence generally prevent me from concluding that Bill was solely responsible for the deterioration in their relationship but equally I am unable to conclude that responsibility resides solely with Peggy. It is, however, a measure of the extent of the breakdown in the relationship that Peggy hesitated before deciding to visit Bill in hospital.
Sixthly, Peggy's repudiation of the father‑daughter relationship during Bill's life and the complete breakdown in their relationship significantly reduces but does not extinguish her moral claim on Bill's testamentary bounty.
Seventhly, the Estate is a comparatively small one, the pecuniary legacy of $100,000 represents approximately 18% of the value of the Estate.
Having regard to the observations made in the preceding paragraphs, with some hesitation, I have come to the conclusion that the $100,000 legacy to Peggy did not constitute adequate provision for her proper maintenance, support, education or advancement in life. The jurisdictional question should be answered in Peggy's favour.
The discretionary question
Having found that the pecuniary legacy of $100,000 to Peggy was not adequate provision for her proper maintenance, support, education and advancement in life, I must now exercise the discretion to make such provision as I think fit, taking account the relevant facts as they now exist. In doing so I am guided by the considerations that would inform a just and wise testator,[85] and by the findings I have made about Peggy's financial position, the strength of her moral claim on the Estate, and the value of the Estate.
[85] Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9, 20.
I remind myself that the discretion is not to be exercised for the purpose of making what may appear to the court to be a fair distribution of the deceased's estate.[86]
[86] Lemon v Mead [244].
I also remind myself that freedom of testamentary disposition is a relevant and important consideration.[87]
[87] Devereaux-Warnes v Hall [No 3] [91].
I do not accept that Peggy's moral claim on the Estate was such that adequate provision for her proper maintenance, support, education or advancement in life extends to leaving her the entire residue of the Estate to enable her to purchase an apartment.
In my judgment, in the circumstances that I have described, I consider that adequate provision for Peggy's proper maintenance, support, education or advancement in life requires that the provision made for her out of the Estate be increased to provide her with additional capital with which to cope with the financial challenges that lie ahead. I would do this by increasing the provision to be made to Peggy by $100,000.
I will hear from the parties in relation to the form of the orders required to give effect to the conclusion I have reached and in relation to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
OK
Associate to the Honourable Justice Tottle
2 MAY 2023
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