Armstrong v Sloan [2002] VSC 229

On 27 September 1997, at the age of 56, John Ronald Anderson died. He was born on 29 November 1940. He had been ill with non-Hodgkinsons lymphoma for approximately three years prior to his death. He was survived by his wife, Heather, from whom he was separated, and by his four children, Daniel, Jane, Kate and Thomas. His wife (who has since remarried and to whom I shall refer as Mrs Armstrong) is the first plaintiff in this proceeding. The children are the other plaintiffs. Mr Anderson was also survived by the third defendant, Vanessa Ann Louise Richardson, who describes herself as his de facto partner. She is the third defendant.

Supreme Court of Victoria|2002-06-14|Before: HARPER J

TESTATOR'S FAMILY MAINTENANCE - Claim by deceased's wife - Husband and wife separated but not divorced at date of death - Settlement pursuant to Family Law Act (Cth) reached during husband's lifetime for wife's maintenance - Whether wife left without adequate provision for her proper maintenance and support - Administration and Probate Act 1958, Part IV - Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 followed - Burke v Public Trustee [1997] SASC 6423 considered.

On 27 September 1997, at the age of 56, John Ronald Anderson died. He was born on 29 November 1940. He had been ill with non-Hodgkinsons lymphoma for approximately three years prior to his death. He was survived by his wife, Heather, from whom he was separated, and by his four children, Daniel, Jane, Kate and Thomas. His wife (who has since remarried and to whom I shall refer as Mrs Armstrong) is the first plaintiff in this proceeding. The children are the other plaintiffs. Mr Anderson was also survived by the third defendant, Vanessa Ann Louise Richardson, who describes herself as his de facto partner. She is the third defendant.

Mr Anderson made his last will on 5 June 1997. He then appointed his business associates and advisers, Russell John Sloan, David Sartori and Anne Kathleen Iris Dawson together with his son, Daniel John Anderson, as executors of his will and trustees of his estate. Probate was granted to Messrs Sloan and Sartori on 28 July 1999. They are the first and second defendants in this proceeding. Leave was reserved to Daniel Anderson and Anne Dawson to come in and prove the will.

The will made no provision for Mrs Armstrong. Instead, Mr Anderson bequeathed to Ms Richardson his home at 36 Gordon Street, Hampton "in recognition of the support she has given me during the time of my illness and treatment following the breakdown of my marriage." His other beneficiaries were his children, who (in effect) received the residue of the estate in equal shares after payment of liabilities. The testator's assets were assessed for probate at $2,807,577, including $750,000 being the assessed value of the property at 36 Gordon Street, Hampton. Liabilities amounted to $1,244,910, leaving a net estate of $1,562,667.

In this proceeding the plaintiffs sought, and Mrs Armstrong continues to seek, further provision under Part IV of the Administration and Probate Act 1958. The claims brought by the children have been compromised. Mrs Armstrong, however, persists with her claim.

On 20 July 1998, Part 7 of the Wills Act 1997 came into force. It effected a number of amendments to Part IV of the Administration and Probate Act 1958. The transitional provisions of s.99AA specify, however, that despite these amendments, Part IV of the Administration and Probate Act, as in force immediately before the commencement of Part 7 of the Wills Act, continues to apply to the estate of a person who has died before that commencement. The result, therefore, is that - because Mr Anderson died before 20 July 1998 - the amendments are not relevant to this proceeding.

Of the provisions to be found in Part IV, s.91 is the fulcrum. In the form applicable to the present proceeding, it applies where a married man dies, and the distribution of his estate effected by his will is such as not to make adequate provision for the proper maintenance and support of his widow. In such circumstances the Court may order that such provision as the Court thinks fit shall be made for her out of the estate.

It is trite law that in applying this provision I must engage in a two-stage process. I must first determine whether Mrs Armstrong has been left without adequate provision for her proper maintenance and support "having regard, amongst other things, to [her] financial position": Singer v Berghouse[1]. Then (but only if the first inquiry results in a positive answer) I must decide what provision ought to be made for her out of her late husband's estate. In the first stage, the question is strictly one of fact, notwithstanding that it involves the exercise of value judgments. The decision made at the second stage, by contrast, does involve the exercise of discretion in the accepted sense: Singer v Berghouse[2]. It follows that I may refuse to make an order even were the first question to be answered in Mrs Armstrong's favour.

My consideration of the arguments put before me in this case must be informed by an understanding of the purpose of legislation such as that embodied in Part IV of the Administration and Probate Act. It is to remedy "breaches of a testator's moral duty to make adequate provision for the proper maintenance of his family": Blore v Lang[3]. With the amendments effected by the Wills Act 1997, the duty is enlarged beyond members of the family; but because the amendments do not apply to this case, they are for present purposes irrelevant.

In this case, Mr Anderson's will made no provision for his widow. The question remains whether she was left without adequate provision for her proper maintenance and support having regard, amongst other things, to any contribution which her husband made in his lifetime to her financial position as it was at the time of his death. And even if, contrary to the joint judgment of Mason CJ and Deane and McHugh JJ in Singer v Berghouse, I should not initially have regard to her then financial position, but should decide the first stage of the two stage process in her favour simply because she received nothing under the will, that would not be an end of the matter. It would clearly be open to me, in the exercise of the second stage discretion, to refuse to order further provision on the basis that, independently of receipt by her of any part of her husband's estate, he had before his death discharged any duty he might otherwise have had to provide for her by his will.

This, in effect, is what the defendants ask me to do. Their primary submission is that, by a property settlement reached between husband and wife before Mr Anderson died, Mrs Armstrong received a sum ($1,000,000) by which on any view her husband discharged any moral obligation he might otherwise have had to make her the subject of his testamentary bounty. One million dollars is a very large sum: large enough, one might assume in the absence of evidence to the contrary, to ensure Mrs Armstrong's financial comfort for the balance of her life. This being so (the submission continues) she could only establish that she had been left without adequate provision for her proper maintenance and support by comparing unfavourably her present financial circumstances against those which she enjoyed during Mr Anderson's lifetime. But, by becoming a party to the settlement, Mrs Armstrong put this argument beyond her. She then decided how much she would receive from her husband as they reached the parting of their ways. She herself had stipulated that the settlement should be "in full and final settlement of all property and maintenance claims". She is therefore now bound by the terms of an agreement which, in large part, she put forward and he accepted. Besides, the settlement was incorporated into orders made by consent in proceedings between husband and wife in the Family Court of Australia. Finality of decisions made under the Family Law Act 1975 following the dissolution of a marriage is a matter of policy set out in the Act itself: see s.81. Here, the marriage was not dissolved until Mr Anderson died. Nevertheless, when the parties to a settlement declare, as they did in this case, that they have agreed "as far as practicable finally [to] determine the relationship between them" the law should set its face against any attempt to re-agitate after death that to which the deceased agreed in good faith during his lifetime.

I will return to these submissions in due course. In the meantime, it is appropriate to record that Mrs Armstrong and the deceased married on 4 November 1970. Twenty six years later, in November 1996, Mrs Armstrong moved out of the matrimonial home and into a flat bequeathed to her by her mother. Co-habitation never resumed. During cross-examination Mrs Armstrong nevertheless asserted that neither in mid 1995, when she commenced renovating the flat, nor at any later time, did she form an intention permanently to leave the deceased. She also denied that the renovation of her flat was motivated by a desire for permanent separation.

It is clear, however, that by November 1996 the relationship between Mrs Armstrong and the deceased had deteriorated markedly. In August 1994 he was diagnosed with the illness which subsequently proved fatal. The diagnosis had a marked effect on him. His search for a cure became almost obsessive. At the same time, he became suspicious of his wife, who was establishing new relationships following the resumption in 1992 of her tertiary education: in that year, she commenced studying Fine Arts at the University of Melbourne. According to Mrs Armstrong, her husband began to suspect her of having an affair. He had her followed by a private detective. He locked her out of the bedroom, on occasions locked her out of the house, and refused to communicate with her. She was forced to sleep on the floor of the dressing room. He accused her of causing his illness. She also alleges that, on one occasion, he raped her. The details are not relevant for present purposes, but the incident must have done immense, if not irreparable, damage to the relationship. Her evidence was that, under these provocations, she moved out; but she nevertheless insists that she did so only because she wanted to bring the deceased to his senses. She never really intended to leave her husband. Her decision was a last resort; but it was not intended to be permanent.

I do not accept that Mrs Armstrong regarded her move from the matrimonial home as merely pro tem. By March 1994 she had met Mr Trevor Armstrong who was a fellow student in Fine Arts at Melbourne University. (In paragraph 3 of an affidavit sworn on 11 September 2000, Mr Armstrong states that the first meeting was in March 1993.) They became close friends. It is clear that on the one hand Mr Armstrong was providing love and support for the plaintiff, while on the other, her husband was becoming increasingly remote and mistrustful, rejecting all attempts at communication. By the end of 1995, the two men had on two occasions discussed Mr Armstrong's relationship with the then Mrs Anderson - on each occasion Mr Anderson being told of Mr Armstrong's affection for Mr Anderson's wife. In these circumstances it seems more probable than not that by November 1996 Mrs Armstrong had decided to leave her husband permanently. At the very least, she had by then determined that she would only resume cohabitation in the unlikely event of a fundamental re-alignment of what was by that time a very unsatisfactory relationship.

A body of additional evidence supports this conclusion. Mrs Armstrong herself had been aware since April 1996 that her husband "was spending more time with Vanessa Richardson": affidavit of Heather Armstrong sworn on 8 December 1999, at paragraph 65. According to her son Daniel, by this time the breakdown of his parents' marriage was "obvious": affidavit of Daniel John Anderson sworn 8 December 1999 at paragraph 23. In paragraph 13 of his affidavit of 11 September 2000, Mr Armstrong swears that by mid 1996 it had become apparent to him that Mr Anderson and Ms Richardson "were spending more time together and that John was making Heather's life at the house untenable." So she moved out; and not only that, she consulted a solicitor beforehand. So did her husband. This appears from an affidavit sworn on 9 March 1999 by his solicitor (Mr Geoffrey Dawson). That affidavit was prepared for another proceeding in which Mr Anderson's estate was involved. It was, however, tendered in evidence in the proceeding before me. At paragraph 12 of the affidavit, Mr Dawson said:

"On 24 September 1996 the deceased sought my advice about his wife's request [my emphasis] that he sell the Gordon Street home, of which he was the sole proprietor, and divide the proceeds between himself and his wife. I advised against that course unless it was part of an agreed final settlement of all financial matters between them. The deceased accepted this advice and decided to retain the house until some overall settlement could be reached."

On 11 October 1996 Mrs Armstrong's then solicitor (Ms Denise J King) lodged a caveat over the matrimonial home in Hampton. Two months later, Ms King sent a letter dated 17 December 1996 to the deceased's solicitors. It and the correspondence which followed is important. The letter of 17 December is in the following terms:

"I advise that I have received instructions to act on behalf of Mrs Anderson in connection with a property settlement arising out of your marriage and separation. I am instructed by Mrs Anderson that she is not in possession of information relating to your assets and whilst some searches have been obtained, I seek your co-operation in providing details of your income, expenditure, assets and liabilities and those of companies and trusts in which you have a beneficial interest. Whilst my client would prefer not to enter into litigation with you, but to negotiate a property settlement on an amicable basis, if you are not prepared to co-operate, I have instructions to institute proceedings for a property settlement and to obtain orders for discovery and the provision of the information my client seeks. I respectfully suggest that you refer this letter to your solicitors and request that they communicate with me."

It is plain from the terms of this letter that it was the first that Ms King had written to Mr Anderson, at least about any proposed property settlement. It is also clear that responsibility for broaching the subject was initiated not by Mr Anderson but by his wife. At the very least, by placing the matter in the hands of her solicitor, she took any negotiations to a new level.

The negotiations were successful. On 22 May 1997, Ms King wrote to Mr Dawson to announce that fact:

"I refer to your letter of the 24th ultimo and advise that I am now instructed that Mr and Mrs Anderson have discussed this matter together and it has been agreed that your client pay to Mrs Anderson the sum of $1,000,000 in full and final settlement of all property and maintenance claims and that Mrs Anderson will support the youngest child of the marriage, Thomas William Anderson born the 17th of April 1983, including payment of his school fees. I would be pleased if you would confirm these instructions with your client and advise me in order that a Form 12A application and minutes of consent orders can be prepared."

This letter is evidence, in the clearest terms, that Mr Anderson was prepared to talk to his wife about their future, and that the two had reached an agreement which was intended to be final. It is significant that it is evidence which emanates from Mrs Armstrong's camp. The fact that it is also corroborated by the other side merely adds to its already impressive weight. In paragraph 15 of his affidavit of 9 March 1999, Mr Dawson said:

"By the letter dated 17 December 1996 the solicitor acting for the deceased's wife sought to commence negotiations for a property settlement. Negotiations commenced in the new year and continued until by letter dated 22 May 1997 the solicitor for the deceased's wife sought my confirmation that the parties had agreed that the deceased would pay $1,000,000 to his wife in full and final settlement of all of the wife's claims. After obtaining instructions I provided that confirmation by letter dated 27 May 1997."

In her evidence before me, Mrs Armstrong sought to show that she was a most reluctant participant in negotiations initiated by her husband. As I understand it, the conclusion she would have me draw is that after some bargaining - which she found distasteful - her husband offered her $1,000,000. Out of ignorance of his financial affairs, and unwilling to push him at a time when he was gravely ill, she felt compelled to accept. She now appreciates that she should have pushed a lot harder, and been given a lot more.

This version of events received an early, if not its first, airing in Mrs Armstrong's affidavit of 8 December 1999. She recounts the prelude to settlement in the following words (at paragraphs 73-78 of her affidavit):

"73. Subsequently I had discussions with John about this matter. He told me that he would be giving me no information about his financial situation. He never provided any statement setting out his financial circumstances. All the conversations I had with John confirmed his unwillingness to negotiate. He told me that the negotiation was causing him stress and making his illness worse. I still wanted to make John happy and thought that it would help him by agreeing to the settlement. 74. I was still trying to upset John as little as possible. He told me that he would give me $1,000,000 and that I could take it or leave it. He was insistent. He said that if I did not accept what was offered I would get nothing. He told me that he was sick and that any discussion caused him distress. I was not happy about the situation but after consulting with my solicitor I decided to agree and instructed my solicitor to write to John's solicitor indicating that I would agree to the amount which he had told me he would pay me. 75. I endeavoured to obtain financial information about his financial state but discovered little. I ascertained for the first time that I had never been registered as one of the owners of Gordon Street, but I was aware of little else. 76. I very reluctantly agreed to his offer because of his illness and because it seemed clear at that stage that I would never be supplied with any information regarding his personal worth. 77. Despite cautionary advice from my solicitor, my primary concern at that time was to minimise John's anxiety and not to aggravate his mental condition. I always wanted John to be a friend because we had shared so much of our lives together and I never wanted to upset him. 78. If I had known what I now know in relation to the size of John's estate I would not have agreed to the settlement. I do not believe that the amount that he paid me in any way represented my proper entitlement and I do not believe that I now have sufficient assets to enable me to live an adequate lifestyle, taking into account all of the circumstances."

Apart from her affidavit of 8 December 1999, Mrs Armstrong also swore an affidavit dated 8 September 2000. In it she deposes (at paragraphs 21 and 22) as follows:

"21. I never sought a property settlement with John. John initiated and forced the property settlement on the basis I would receive nothing. My solicitor, Denise King, had conducted a number of investigations and lodged a caveat over the house. It appeared that the other assets of John were in companies and trusts. 22. Although I had to care for Tom, who was still a student at Brighton Grammar, and Kate who had three years of university to complete, I commenced full time at Berendale School at Moorabbin to make ends meet. John refused to talk to me about any arrangements he had made for the children. I only agreed to the property settlement because John said to do otherwise would cause him further stress and I did not want to exacerbate his situation. John wouldn't talk to me at the time and I tried to do what would make him happy."

I cannot accept this version of the facts. It is inconsistent with evidence the truth of which is difficult if not impossible to deny. It is, in particular, contradicted by the correspondence. In her affidavit of 8 December 1999, Mrs Armstrong gives that correspondence far less than a balanced coverage. Indeed, some highly relevant portions of it are omitted entirely.

One of those omissions is the letter of 17 December. Despite the protestation in paragraph 72 of Mrs Armstrong's December 1999 affidavit that she "was not at all anxious to pursue" a matrimonial property settlement, the letter did just that. It referred to a separation and sought to commence property settlement discussions. At this time, according to Mrs Armstrong herself (as she recounts the events in her affidavit of 8 December 1999) her husband, far from "getting a jolt" as a result of the separation (paragraph 59) or being convinced thereby that he should "improve his behaviour" (paragraph 61) "became more and more remote" (paragraph 62). He failed to return her telephone calls. Communications were thereafter generally in writing, and between solicitors. Mrs Armstrong says that she wrote letters to the deceased "but he refused to read them" (paragraph 62).

The first letter exhibited by Mrs Armstrong is dated 25 March 1997 and was written by Ms King to Mr Dawson. It is the only piece of correspondence which in any way supports Mrs Armstrong's protestation that she "was not at all anxious to pursue the matter". It begins by recording Mrs Armstrong's belief "that the pending property settlement involving 36 Gordon Street, Hampton is causing [her husband] considerable anxiety and she is most concerned that this should not be the case." It continues:

"I have been instructed by my client to reassure your client that she has no intention of forcing the sale of the property ... at the present time and is quite happy for her husband to continue in the residence for as long as he wishes ... [She] has instructed me to defer any further action to reach a property settlement and has also asked me to convey to your client her willingness to assist him following any hospitalisation he may elect to undergo."

In that letter, Ms King provides further evidence that it was her client, not Mr Anderson, who had until that point provided the impetus for the negotiations. Her reference to her instructions "to defer any further action to reach a property settlement" cannot, in the context of this correspondence, be read in any other way.

Mr Anderson's solicitors replied on 7 April 1997. They acknowledged that the claim for property settlement was causing their client anxiety; but they went on to express the opinion that this would not be alleviated by a deferral of negotiations. In that context, they stated that Mr Anderson was willing to pay his wife $700,000 "all in". This, it was stated, involved Mrs Armstrong "commuting any rights" which she "may otherwise have to claim future maintenance for herself".

This correspondence is exhibited to Mrs Armstrong's affidavit. Her response is not. It was made by Mrs Armstrong's solicitor in a letter dated 11 April 1997. The speed with which it was made is on one view itself evidence that Mrs Armstrong had resolved any qualms she might have had about pushing for a settlement; but she seeks to answer that point by reference to the last paragraph of the letter of 7 April. This paragraph, she claims, put her under great pressure. It said:

"Because there is uncertainty about when further treatment for [Mr Anderson] will commence in hospital and because our client desires the matter resolved before he enters hospital he seeks your client's response by 4pm on Monday 14 April and directs us that his offer should remain open until then."

Whatever the pressure thus generated, Mrs Armstrong managed to resist it. Significantly, the offer of $700,000 "all in" made by her husband on 7 April was, by her solicitor's letter of 11 April, rejected ("I refer to your letter to me of the 7th instant and advise that my client is not prepared to accept the offer made therein"). Equally significantly, the rejection was not put on the basis that Mr Anderson was deliberately withholding relevant information. On the contrary, no further information was sought. Instead, a counter-offer was proposed. It was that Mr Anderson transfer to his wife a number of chattels (which she specified) and pay her the sum of $1,000,000 - of which $800,000 was to be by way of property settlement and $200,000 was to cover any claims for future maintenance. The letter added a request that Mr Anderson pay the school fees of Thomas Anderson, the youngest child of the marriage, who was then a pupil at Brighton Grammar School. Finally, Mrs Armstrong's solicitor proposed that "[e]ach party then be entitled to all other property in his or her possession and the settlement be in full and final settlement of all claims that either may have against the other." This, it may be noted at this point, is not the proposal of a spouse who, having sought and been denied further information about her husband's financial position, was pressured into a settlement before that information was received. It is, however, consistent with Mr and Mrs Armstrong's joint purchase, in the first half of 1997, of a former warehouse in Fitzroy which had been converted into an apartment. I am satisfied that by this time Mrs Armstrong was minded to put her first marriage behind her. She and Mr Armstrong were living in the apartment when Mr Anderson died.

Mr Anderson did not initially accept that he should pay his wife $1,000,000. Instead, by letter dated 24 April 1997 he increased his 7 April offer of $700,000 by $150,000 to $850,000. The letter stipulated that, of this enlarged sum, "$700,000 is for property settlement and $150,000 for future maintenance".

The agreement evidenced by the letter of 22 May 1997 from Mrs Armstrong's solicitor was the ultimate result of those negotiations. If one had regard only to Mrs Armstrong's evidence about the difficulties she experienced in communicating with her husband, the fact (established unequivocally by the letter of 22 May) that they not only discussed, but reached, a settlement would come as a surprise. It is to be remembered in this context, moreover, that save in one respect (Thomas' school fees) the settlement reflects the proposal put not by Mr Anderson but by Mrs Armstrong herself - in the letter which, on 11 April, her solicitor wrote on her behalf. Judged against her complaints about the recalcitrance of her husband, this is even more surprising. But the explanation for these inconsistencies is, it seems to me, clear. It is that Mrs Armstrong's evidence about the negotiations with her husband is unreliable. Where it differs from the picture painted by the correspondence, I accept the latter.

In this context, I note that Mrs Armstrong arranged, as early as October 1996 (some seven months before the settlement) for a caveat to be placed on the matrimonial home. Having done that, it was she who on 25 March 1997 sought "to defer any further action to reach a property settlement". Her husband in response urged that negotiations continue. She reacted positively, and he later accepted her demand that he pay her $1,000,000. It is therefore disingenuous for Mrs Armstrong to speak, as she does in her affidavit of 8 December 1999, of her husband's "unwillingness to negotiate" (paragraph 73), of her discovery "for the first time" that she "had never been registered as one of the owners of Gordon Street" (paragraph 75) and of her "reluctance" to agree to "his offer" (paragraph 76).

The affidavit of 8 September 2000 likewise raises as many questions as it answers. If Mr Anderson "initiated ... the property settlement" (paragraph 21) then he either did so orally or, if in writing, by a document which has not been tendered at the trial. Rather, all the evidence before me points to the conclusion that the initiating document was the letter of 17 December 1996. There is nothing in this letter to suggest that Mr Anderson was the one who approached his wife. Nor does the letter suggest that he "forced" anything (again, paragraph 21), although it may be that a categorical refusal to pay anything to his wife led her to take the first step. Even so, in those circumstances it is stretching the language to speak of the testator as the initiating party. At all events, once the letter of 17 December had been sent it was perfectly clear that Mrs Armstrong had taken up whatever challenge had been thrown down. In that letter, she demanded one of two alternatives: negotiation or litigation. It is there made quite plain that the mere maintenance of the status quo was not an option which she was prepared to allow her husband to choose. While the letter of 25 March 1997 was conciliatory, at all other material times Mrs Armstrong pursued her own interests with a single-minded devotion.

The reference in paragraph 22 of the affidavit of 8 September 2000 to the (alleged) fact that "John wouldn't talk to me at the time" is also curious. It was, after all, Ms King's letter of 22 May 1997 which spoke of her client's instructions "that Mr and Mrs Anderson have discussed this matter together".

Having read Mrs Armstrong's affidavits, and having heard her oral evidence, I do not accept that she "only agreed to the property settlement because John said to do otherwise would cause him further stress and I did not want to exacerbate his situation." It is true that she had not been furnished with full information about her husband's financial position. On the other hand, it is also true that, being aware of the paucity of the information known to her, Mrs Armstrong nevertheless agreed to the settlement, and did so on the basis that it would "as far as practicable finally determine the relationship between them and avoid further proceedings."

Mrs Armstrong's conduct is itself conclusive upon these points. In her letter of 22 May 1997, Ms King sought not only confirmation of the agreement but also such information as would enable her to prepare "a Form 12A application and minutes of consent orders". This was a reference to the fact that proceeding No. ML7625 of 1997 had been instituted between the deceased and his wife in the Family Court of Australia. Any settlement of property and maintenance claims would necessarily, therefore, include the appropriate disposition of that proceeding. This Mr Anderson joined in effecting. On 27 May 1997, his solicitors wrote to Ms King:

"We have your letter of 22 May and are instructed that the agreement reported in the first paragraph of your letter has been reached between our respective clients. Please prepare the Form 12A application and minutes of consent orders for our perusal ..."

In accordance with the arrangements thus agreed, the signed minutes were forwarded to Mrs Armstrong's solicitor under cover of a letter from Mr Anderson's solicitor dated 25 July 1997 which read in part:

"Upon the basis that your client undertakes that she will support the youngest child Thomas William Anderson including providing his accommodation and all his school fees and related expenses we return the Form 12A Application for Consent Orders with Minutes of Consent Orders annexed."

The parties having joined in taking the necessary steps, in August 1997 it was ordered by consent that (among other things) the deceased within 30 days pay to his wife the sum of $1,000,000, $200,000 of which "is attributable to the provision of maintenance for" her. In addition, Mrs Armstrong agreed to withdraw her caveat over 36 Gordon Street and, with the testator, asked the Court to note that they intended "that these orders shall as far as practicable finally determine the relationship between them and avoid further proceedings".

As is plain from their wording, the finality of the consent orders is qualified by the expression "as far as practicable". There is nothing in the evidence before me, however, to indicate that, were Mr Anderson still alive, the agreement reflected in the correspondence of 22 May and 25 July, together with the consent orders made by the Family Court, would not continue to bind the parties to it. It would not be open to Mrs Armstrong to set it aside on the ground that when she entered into it she was not fully aware of her (then) husband's financial situation. She knew at the time that he had not told her all there was to be told. This was consistent with the position which he had taken throughout the marriage.[4] She chose to go ahead nevertheless. While his failure to communicate may have been inexcusable (it is a failing in many men, but I am in no position to form any judgment about Mr Anderson's moral culpability - if any - in this respect) there is no suggestion of fraud or undue influence or unconscientious behaviour on his part. Indeed, he may not have known what he was worth. The evidence is that his financial affairs were very complicated - to the extent that the assessment of the value of his estate involved the valuation of 20 or 30 properties and the untangling of his interest in a number of settlements. And, even if she, driven by a desire to minimise the suffering of a very sick man, reluctantly accepted the finally agreed terms, accept them she did. And they were not terms dictated by the testator. They were, very largely, the terms which she herself had proposed. In particular, it was she who suggested that each party retain the property of which each was then possessed.

Nor (on the evidence before me) would anything which has happened to her subsequently form an adequate basis for a claim, under family law principles, that the agreement be redrawn. On the contrary. Her life has worked out very much as she must have hoped. She has married Trevor Armstrong. They have bought a business, The Arts Bookshop at 1067 High Street, Armadale, which reflects their common interests in the fine arts. Her contribution to the purchase price was $270,000. She is the sole registered proprietor of a property at 7 Asling Street, Brighton. It was purchased in December 2000. She paid $745,000 for it, and took out a mortgage upon which some $104,000 is owing. She has some other modest assets. She derives her income from the bookshop and from her work as a teacher of life skills to adults with disabilities. Her combined earnings from both teaching and the bookshop amount to some $550 per week after tax. By contrast, the maximum amount she was given by her late husband for housekeeping was "$400 per week with which I was expected to keep a family of six": affidavit dated 8 December 1999, paragraph 31. In other words, she has now significantly more money to put in her own pocket than she ever did when living with the testator. Her present liabilities appear to be well within her capacity to manage.

In her conduct of this proceeding, Mrs Armstrong avoided any explicit admission that her present position compares very favourably with that which she endured during her first marriage. Her evidence, however, points to exactly that conclusion. In her affidavit of 8 December 1999 she paints herself as the victim of Mr Anderson's parsimony. At its most extreme, this manifested itself in his leaving her without the money for a taxi fare for a journey home from a private hospital after he "effectively forced me to have an abortion": paragraph 24 of the affidavit of 8 December 1999. On a more general level, her husband's family company "regularly" replaced his new Jaguar car with an even newer model, while she was left with "the same old Volkswagen that I had bought when I was 19 years old": paragraph 26 of the affidavit. Since the entire family could fit into neither the Jaguar nor the Volkswagen, when the entire family travelled Mr Anderson generously allowed his wife and children to take the Volkswagen while he was reduced to travelling by himself in the Jaguar.

So it also was with money. The housekeeping provided by Mr Anderson was (according to his wife) hardly sufficient to cover food and everyday household expenses. Accordingly, there was nothing over with which to buy clothes or presents or sporting equipment. These had to come from what (again, according to her) were the very limited resources which Mrs Armstrong had, independently of her husband, at her own command.

These facts are, of course, relevant not only to the appropriateness of the consent orders made in the Family Court, but also to Mrs Armstrong's present claim under Part IV of the Administration and Probate Act. This is not to say that what is a proper provision for a widow will necessarily be determined by the standards set during the marriage. A mean husband cannot by his parsimony circumscribe his duty to act wisely and with justice towards his wife when drawing his will. Rather, meanness in life will, as a general rule, be reflected in a moral duty to be correspondingly generous in death.

On the other hand, arrangements made by a husband during his lifetime which on his death leave his widow in comfortable financial circumstances would ordinarily discharge his moral duty to make in his will adequate provision for her proper maintenance and support. That would (again, generally speaking) only not be so if, although comfortable, her circumstances did not allow her as a widow to maintain a standard of living comparable to that which she enjoyed as a wife. In short, if Mrs Armstrong, the recipient of $1,000,000 from her former husband, could be said to have been left without adequate provision for her proper maintenance and support, it could only be by comparison with the standard of living she enjoyed before her separation. Her own evidence, however, demonstrates that her financial independence now, and her present means of satisfying her financial needs, are greater than they were when she and Mr Anderson lived together.

The ambiguities, not to say absurdities, with which Mrs Armstrong's conduct of this litigation is replete is illustrated from the following passage in her cross-examination. She first says that she wanted nothing from Mr Anderson, and then says (in effect) that she caved into his demand that she accept $1,000,000; she only wanted to make him happy:

"Q. Denise King, I take it, told you ... that your husband was not willing to pay you $1,000,000, but increased his offer by $150,000 to $850,000? A. That is correct. Q. That is correct. And you rejected that, didn't you? You still wanted $1,000,000? A. No, I didn't reject it because I wanted a $1,000,000, I rejected it because I didn't want anything. Q. You didn't want anything? A. That is right. Q. I take it by this stage, Mrs Armstrong, you were deeply committed to Trevor? A. Well, Trevor was my friend, he was my support, but I was committed to my husband. Q. I see. You say you wanted nothing from your husband? A. I wanted him to be happy to that point, that is all ... And that is why I accepted the settlement. Q. Well did you tell Denise King at any time before the settlement was accepted not to bother pursuing him for money? A. Yes. Q. You did? A. Yes. Q. When did you tell her that? A. I ... told her that I didn't want a settlement. On a number of occasions. I told her that every time I saw her. I was being pushed from the other side. Q. I take it that you were ... happy with Denise King as your solicitor ... If you had given her instructions to back off, I would assume she would have backed off? A. She did back off, but John was pushing from the other side. Q. What happened was that ultimately, sometime in the course of May 1997, John agreed to pay you $1,000,000? A. That is correct. Q. That is correct. He caved in to your demands for $1,000,000 for the sake of peace of mind and agreed to pay you, that is what happened? A. No, it was the other way around, I caved into to John's demands and accepted the settlement to try and make him happy at least for the last part of his life, it wasn't the other way around."

In this context, I note that in 1998 (that is, after the death of Mr Anderson) Mrs Armstrong suffered an epileptic seizure. It was subsequently discovered that she had a tumour in the left cavernous sinus. After resection, this was treated with radiotherapy. According to her neurologist, Dr Jack Wodak (see the exhibit to his affidavit of 15 November 2001) she "has been left with impaired memory" and "will need to remain under continuing review and to undergo regular magnetic resonance imaging because of the risk of a recurrence of her tumour".

It was submitted that this condition may shorten Mrs Armstrong's working life, and indeed be terminal. It may; but since there is no medical evidence on the point, I am in no position so to find.

Mr Newton, on behalf of Mrs Armstrong, submitted that a settlement reached under the Family Law Act 1975 (Cth) does not necessarily preclude a claim by a former spouse for family provision. This is undoubtedly true. Different considerations come into play. In this context, Mr Newton relied upon comments made by Hedigan J in King v White [1992] VicRp 72; [1992] 2 VR 417 at 423. There His Honour said:

"... [t]he plaintiff, argued that the principles of law to be applied in the exercise of discretion under this jurisdiction, should be 'as modern as' those principles that govern the distribution of assets in family law proceedings. Quite clearly, this argument is insupportable, the Family Law Act itself providing a clear statutory basis for the division of property in circumstances quite unlike the exercise of the powers conferred by s.91 of the Administration and Probate Act 1958."

The question in proceedings such as this is whether the deceased made adequate provision for the proper maintenance and support of the surviving spouse. If not, the fact that a settlement under the Family Law Act had been reached and given effect would not, or at least would not necessarily, preclude a claim by the surviving spouse. But "the terms of the settlement are nevertheless relevant in determining the plaintiff's need and the extent to which it may have been satisfied in the deceased's liftetime": Burke v Public Trustee[5]. This, Mr Newton submitted, is just the kind of case in which the fact of a settlement inter vivos should not stand in the way of his client's success in the present proceeding. The settlement, he submits, does not make adequate provision for Mrs Armstrong's proper maintenance and support. She selflessly sacrificed herself for the children. She was a devoted full time wife, a devoted full time mother, a full time housekeeper and, for some years, a full time Education Department employee as well. She did not, nevertheless, receive from Mr Anderson the lavish gifts which he bestowed upon Vanessa Richardson.

Mr Phillips on behalf of Ms Richardson pointed to s.81 of the Family Law Act. This provides that, in proceedings under Part VIII ("Property, Spousal Maintenance and Maintenance Agreements") "the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them." But there are exceptions. Where, for example, the proceedings are with respect to maintenance payable during the subsistence of a marriage, the stricture as to finality does not apply. In other words, the section does not apply to orders which, as did those under consideration here, provide for maintenance before divorce. It does not, therefore, assist Ms Richardson.

On the other hand (as I have found) Mrs Armstrong freely entered into an agreement with her then husband. It was an agreement designed and intended, as far as practicable, finally to determine their relationship. This means, it seems to me, that it was intended - as far as practicable - to remove each as a claimant on the other's testamentary bounty. It was a bargain; and the law seeks to avoid the reproach that it is the destroyer of bargains: Hillas and Co Ltd v Arcos Ltd[6]

I acknowledge that the agreement under consideration in Hillas' case was a bargain made in trade and commerce, whereas this was not. True, also, that the law must not give the sanctity of bargains undue weight. To do so might, in cases brought under Part IV of the Administration and Probate Act, accord insufficient protection to the weaker partner in a marriage or de facto relationship, and thereby fail to give that legislation its due recognition. True, finally, that while marriage persists (as it did here until Mr Anderson's death) so at least some of the ties created by the marriage also persist. A degree of financial responsibility, perhaps merely contingent, is one of them.

This is so even after the marriage has been dissolved: Dijkhuijs (Formerly Coney) v Barclay[7]. In that case, Kirby P (at 652) said:

"The 'public policy' in finality of financial dealings by property settlements ordered by the Family Court must likewise now be read in conjunction with the competing public policy expressed by Parliament in the Act. This public policy could not be clearer. It is that, in certain circumstances and subject to certain procedures, former spouses may, notwithstanding such Family Court orders, seek orders for provision under the [Family Provision] Act [1983]."

To this passage, Bryson J in Mulcahy v Weldon[8] added (at paragraph 22) a supplement:

"In the present case there was a clean break in every sense; the order purported to be complete and there actually was no continuing relationship of financial dependency, nothing in the nature of a continuing maintenance obligation or claim, and no circumstances of a continuing relationship which might be thought to bring provision for the plaintiff under consideration because of conduct or events after the property settlement ... According to general community standards a former spouse who has been accorded all rights under a property settlement and does not have any continuing entitlement to maintenance, adjudicated or not, is not generally regarded as a natural object of testimentary recognition. Although such ... recognition does occur, it is, in my understanding, regarded as altogether exceptional and remarkable when it occurs."

Mrs Armstrong was not and is not a former spouse in the sense used by Bryson J: her marriage to Mr Anderson was dissolved by death, not divorce. But it is clear that by August 1997 each regarded the marriage as effectively finished; and each had found a new partner. Mrs Armstrong's position was as close to that of a divorcee as it could be in the absence of a divorce.

Taking all these factors into account, I see no reason why the consent orders, and the settlement which lay behind them, should not continue to bind Mrs Armstrong. The settlement was entered into freely. It took her out of the category of those in financial need, at least as that phrase is commonly understood: on her version of events as told in the witness box, it gave her $1,000,000 more than she wanted. It was on any view intended to give expression to the break in the relationship which, I find, was as devoutly wished by Mrs Armstrong as it was by her late husband. It enabled him to exercise that freedom of testamentary disposition the importance of which was emphasised by the Court of Appeal in Grey v Harrison[9]. It rendered irrelevant comparisons between the worth, as recipients of the deceased's testamentary bounty, of Mrs Armstrong on the one hand and Ms Richardson on the other. Yet now, having won most of that which she sought in her negotiations with him, Mrs Armstrong seeks something more besides. In my opinion, her claim is not justified.

There are, in the end, two alternative bases for this conclusion. In my opinion, Mrs Armstrong was not left by the deceased without adequate provision for her proper maintenance and support. But even if she was, I would exercise my discretion against her claim for further provision: by giving effect to the settlement, Mr Anderson discharged his moral duty to his wife, and thereby removed the "legislative justification to abridge freedom of testation": Grey v Harrison[10]. It follows that the claim must be dismissed.

[1] [1994] HCA 40; (1994) 181 CLR 201 at 210 per Mason CJ and Deane and McHugh JJ

[4] Mrs Armstrong confirms this at para.20 of her affidavit sworn on 8 December 1999: "I would have liked John to be more involved in day to day family life. I would also have preferred to have had more of a say and more of an involvement in matters such as our financial affairs but I accepted that John's character was such as it was."

[5] [1997] SASC 6423, per Debelle J

[6] [1932] UKHL 2; [1932] All ER Rep 494 at 499 per Lord Tomlin

[9] [1997] 2 VR 359 at 363, 365 and 366 per Callaway JA

At a glance

Court

Decision date

Before

Source

Judgment (81 paragraphs)

Parties

Cases Cited (2)