Bingham v Forrest

17 THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Graham Douglas Forest who died on 14 June 1997 aged sixty-two years. The deceased was survived by his widow, the defendant, his daughter by his first marriage who is the plaintiff, and his two former wives. Notice has been given to his former wives who have made no claim in the estate. 2 By his will made 19 May 1980 the deceased left the plaintiff, his daughter, a legacy of $5,000 and he gave the residue to the defendant and appointed her executrix of his estate. The deceased had a property at 7 Glover Street, Mosman which is estimated by the defendant to now have a value of between $600,000 and $650,000. She has apparently had some appraisals made by a valuer to arrive at this value. There were two vans worth in total $15,000, which have been sold. There were some tools worth about $700 and there was also an interest in the estate of the deceased's father, James Murray Forrest. That interest was given to the deceased under the will of his father which was made 2 February 1974. 3 In that will he gave his property to his four children and, following upon that, there was a deed of family arrangement which was entered into some time probably in 1991 under which the four children gave the deceased's widow Charlotte Forrest, a life interest in that property which comprised his estate, or a subsequent property which apparently has been purchased at Werribee in the State of Victoria. The property at Werribee is said to have a value of $110,000, which would put the interest of the deceased in that property at $27,500, subject of course to the life estate. 4 There was also jointly owned property held by the defendant and the deceased, bank accounts of some $9,731.39, steers $5,084, and there was also a Tumut farming property of some 202 acres. There have been a number of estimates of value but the most recent one, according to the one which I shall adopt, is that the property is worth between $800 and $1,000 per acre, putting its value at between $160,000 to $200,000. 5 In this matter costs have necessarily been incurred. The defendant's are estimated at $7,500 and those of the plaintiff $15,000. 6 I will briefly refer to some of the history to set the chronology for the matter. The deceased was born in April 1935 and the defendant, who is now the widow, was born on 30 April 1947. The deceased first married in 1960 and the plaintiff was born on 7 July 1961. The deceased and his wife separated and they were divorced in March 1971. Apparently in 1974 the deceased married Norma Bell, but this marriage only lasted for a few months. 7 In 1975 the deceased purchased the property 7 Glover Street, Mosman. In February 1977 the deceased and the defendant met and they were married on 24 September 1977. They then lived in rented accommodation because Glover Street needed substantial work to it and was not habitable. They continued to work on it and in July 1979 the deceased and the defendant moved in to Mosman and took up residence. Shortly after this, in fact in May the following year, the deceased made his will, the provisions of which I have broadly set out. On 9 May 1987 the plaintiff married. 8 The deceased had been employed by the Department of Public Works as an architect and in 1989 he changed his employment and moved to Peddle Thorp & Walker where he again worked as an architect. 9 The plaintiff's first child, Emily, was born on 11 March 1991. It was in February 1989 THAT the deceased and the defendant purchased the property at Tumut. That purchase price was $155,000 of which $105,000 was borrowed. In April 1991 that mortgage was reduced by $20,000, presumably from a combination of the deceased's and the defendant's savings. The mortgage was finally discharged in August 1992 when the deceased obtained some access to his superannuation fund and paid $85,000 to finally discharge the mortgage. The deceased ceased work in 1992 and in 1995 the defendant retired from work. It had been intended by she and the deceased to move to Tumut and to build a home on the property and retire. Those plans, however, were interrupted as the deceased was diagnosed with prostate cancer in October 1995. 10 The plaintiff's second child, David, was born on 12 June 1997 and two days later the deceased died. 11 In applications under the Family Provision Act the High Court has recently, in Singer v Berghouse (1994) 181 CLR 201, set out the two-stage approach that a court must take. At p 209 it said the following: "The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' et cetera were explained in Bosch v Perpetual Trustee Co Limited. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance, et cetera, appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors." 12 As directed by the High Court, it is necessary to consider the position of the plaintiff. She is a married lady aged thirty-seven and has two children. They are Emily aged eight and David aged two. By training she is a teacher but she has not worked recently, mainly because she has been looking after her young family. Her husband has employment and apparently earns $825 per week nett. 13 She and her husband have a number of assets. They include superannuation of $42,491, a car worth $24,000 and a house at 11 Richards Close, Berowra, worth $320,000. There is also furniture and effects, the property having an insured value of some $65,000, and minor amounts of cash and shares. 14 Naturally they have liabilities. There is a mortgage which is now at $78,000, an overdraft of $18,000, and some $2,000 in credit cards, a total of $98,000. 15 Given the income available to the plaintiff's family, they are managing in a modest way. It is apparent that they cannot do necessary work about the home because they do not have the appropriate funds. 16 As far as the plaintiff's health is concerned, she has in the past been treated with anti-depressants by her GP and presently she has problems with her back which resulted from an injury at her employment. She has difficulties which mean that it would be not possible for her to obtain physical work but no doubt she could continue to teach or have other secretarial employment, as was referred to in her affidavits. 17 It is necessary to consider the relationship between the plaintiff and the deceased. It is important to realise that the plaintiff's parents divorced in 1971 when the plaintiff was ten years of age. The plaintiff then moved to live with her mother. There was contact between the plaintiff and the deceased after the separation and, although the plaintiff was critical of some of that contact, it is apparent from the evidence of the defendant that even at the time when the defendant met the deceased in 1977 there had seemed to be reasonable contact between the plaintiff and the deceased, the plaintiff visiting, coming for meals and matters of that nature. 18 According to the defendant, it started to decrease after some years and probably initially started by the plaintiff growing up and having more commitments in relation to her work and the finishing of her schooling. The plaintiff has spoken in her affidavit of events which transpired later on in the eighties. At that stage she was about to be married and she approached her father one day to speak to him with a view to introducing her fiance, whom the deceased had not met. The visit by the plaintiff was rebuffed by the deceased and she did not introduce her fiance. 19 She was married in 1987 and sent her father an invitation to the wedding but received no response. Thereafter the plaintiff appears to have, in the absence of further contact from her father, decided not to make further contact because she did not want any further rejection. It appears that there was some approach by the deceased through his sister to see the plaintiff's daughter but the plaintiff apparently indicated that the deceased would have to make the first move. Clearly the relationship between the deceased and the plaintiff is something that has troubled the plaintiff and she sought advice in relation to it. 20 It is important to realise that in this case the defendant does not suggest any disentitling conduct due to the absence of contact between the plaintiff and the deceased and in my view, although perhaps the plaintiff was of an age where she may have been able to persevere with contact, I certainly would not reduce her claim by reason of the fact that there was not the contact. 21 It is important for the plaintiff to realise that the claim is not increased or enhanced because of her father's apparent rejection or indeed because of the difficulties resulting from his marriage to the plaintiff's mother. Obviously chances to help the plaintiff have passed. 22 The way in which the plaintiff says she has been left without adequate and proper provision for her maintenance, education and advancement in life has been set out in her affidavits. As far as education is concerned the plaintiff clearly could return to teaching but wishes to perhaps have part-time employment and would like to get some secretarial skills. She points to a range of courses that are available with costs between $3,000 and $6,000. 23 She also points to a number of matters concerning her house and the repairs and improvements that are needed. Apparently the yard is unfenced and this is becoming necessary because of the ages of her children. The cost of turf and fences to the yard is in the area of $6,000. Because of their limited resources when married a rumpus room was not provided and the plaintiff would like to see this provided and the cost for that is said to be $62,000. It is not something which would be essential but no doubt is something which the plaintiff desires. There is also apparently a problem with drainage with the house and the cost to fix this is somewhere between $10,000 and $11,000 and it is a matter which should be attended to, as is termite protection at a cost of some $5,000. 24 Other areas identified by the plaintiff are the possibility of having an exercise pool to help with her daughter Emily's asthma and her own exercise at $15,000 and private schooling for her children of some $6,000 per annum for each child. The plaintiff herself did not seem to be provided with this by the deceased. 25 I have no doubt that some of these, particularly the urgent repairs, are matters which would in an ordinary case lead one to the view that the plaintiff has been left without adequate and proper provision. It is necessary, however, to consider the position of other people having claims on the bounty of the deceased. In this case there is only one, the defendant. She is fifty-two, single and has no dependants. She has not worked since 1995 and cannot at the moment because of a medical problem. She apparently has secretarial skills and presently exists on a pension paid by the State Government which amounts to $503.85 per fortnight. 26 Her assets are of course the home which she lives in at 7 Glover Street, Mosman and the likely amount from the sale next spring of the land at Tumut. That would realise after expenses somewhere between $150,000 and $190,000. The defendant has recently, because she has had to sell the other cars and has spent those funds on the house, purchased a VW Golf for $29,000 and to do that she borrowed $30,000 and she will have to repay this once Tumut is sold. This means that the amount available to her would be between $120,000 and $160,000. The defendant spoke of work needing to be done to Glover Street and it would seem the property has not been painted since 1979. 27 There is also of course the interest in the deceased's estate and the defendant has 1,000 shares in Telstra worth $7,600. 28 As far as the relationship with the deceased is concerned, it is clear it was a good one and a happy one. The deceased contracted cancer in October 1995 and the defendant gave up her work so that she could care for him in the difficult time that followed. 29 An important matter in the present case in considering the extent of the various claims is the estate and how it was built up. It will be apparent from the chronology I have referred to earlier that the property at Glover Street was purchased in December 1975. The purchase price was $45,700 and there was a mortgage of $20,000 to the Bank of New South Wales. It could not be occupied as the lean-to section at the rear of the house which had a kitchen, bathroom and laundry had to be demolished. At the time the defendant and the deceased were married the deceased had savings of $18,000 and this was used on the repair and improvements to Glover Street. The work progressed partly by contract but also physical work both by the deceased and the defendant. The parties from July 1997 had apparently combined their earnings and paid all of their outgoings from the combined earnings. 30 Also in 1979 the defendant received a legacy of some $5,000 which also went into the renovations of Glover Street. As I have mentioned, it was in February 1989 that the Tumut property was purchased, with the mortgage to which I have referred. In part that mortgage has been repaid by contributions from the superannuation of the deceased. One can see from the history that the deceased and the defendant virtually contributed their incomes and their endeavours and by the substantial investment of the defendant's superannuation this enabled the two properties, by the time of the death of the deceased, to be free of any encumbrance. 31 There are tables which have been prepared by the defendant in which she sets out for the period from 1982 to 1997, excluding 1989, the various nett incomes of the parties. The deceased's total income over the period was some $306,172 and that of the defendant, after allowing an appropriate amount for 1985 and 1986, was in the order of $195,209. The deceased's amount also included amounts that he was paid out in superannuation. 32 One therefore has the situation where the defendant herself contributed a sum of some $18,000 and a legacy of $5,000, which in those days was quite a considerable amount. She has also with the deceased contributed substantially her salary to their endeavours and therefore it is perfectly clear to me that there has been a substantial contribution to the house and to the land at Tumut by the defendant. 33 When one comes to consider the claim, clearly the plaintiff is an eligible person. She is in modest circumstances and only received under the will the legacy of $5,000. I have no doubt that her needs are real. The only question is whether the estate can accommodate those needs. 34 Though a slightly different question, the question of what provision is normally made in respect of widows has been set out in many cases and recently the President of the Court of Appeal in Goloski & Anor v Goloski, unreported, 5 October 1993, summarised them in the following terms: "In testing the Master's decision it is appropriate to keep in mind the principles which governed the approach which he was obliged to take to the widow's application under the Act. Relevantly, these included: (a) Proper respect was to be paid for the right of testamentary disposition which is the fundamental premise upon which the provisions of the Act are based. That premise requires the Court, out of respect for the continuing right of testamentary disposition, to limit its disturbance of the testator's will to that which is necessary to achieve the purposes of the Act, and not more. See The Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9, 19; White v Barron & Anor , above, 458; Hunter , above, 576; (b) The purpose of the jurisdiction is not the correction of the hurt feelings or sense of wrong of the competing claimants upon the estate of the testator. The Court is obliged simply to respond to the application of the eligible person who was a member of the testator's household and to consider whether, as claimed, the provision made by the will is inadequate for that person's proper maintenance and advancement in life. See Hayward v Fisher , Court of Appeal, unreported, 26 April 1995; (1985) NSWJB 81. (c) Consideration of other cases must be conducted with circumspection because of the inescapable detail of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had been said that in the absence of special circumstances it will normally be the duty of a testator to ensure that a spouse (or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to. To the extent that the assets available to the deceased will permit such a course, it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies; see Luciano (above) 69-70; (d) A mere right of residence will usually be an unsatisfactory method of providing for a spouse's accommodation to fulfil the foregoing normal presupposition. This is because a spouse may be compelled by sickness, age, urgent supervening necessity or otherwise, with good reason, to leave the residence. The spouse provided and will then be left without the kind of protection which is normally expected will be provided by a testator who is both wise and just. See Moore v Moore , Court of Appeal, unreported, 16 May 1984, per Hutley JA; (e) Considering what is 'proper' and by inference what is 'improper' as a provision in a will, it is appropriate to take into account all of the circumstances of the case including such matters as the nature and quality of the relationship between the testator and the claimant; the character and conduct of the claimant; the present and reasonably anticipated future needs of the claimant; the size and nature of the estate and of any relevant dispositions which may have reduced the estate available for distribution according to the will; the nature and relative strengths of the competing claims of testamentary recognition; and any contributions of the claimant to the property or to the welfare of the deceased. See Re Fulop Deceased (1987) 8 NSWLR 679 (SC); Churton v Christian & Ors (1988) 13 NSWLR 241 (CA) 252." 35 In talking of the need to provide a house and a sum for contingencies the President is clearly referring to Wellman and passages in Luciano v Rosenblum and other cases. As was pointed out by the Court of Appeal in Elliott v Elliott, unreported, 29 April 1986, such a type of provision only applies where it can be said there has been a long and happy marriage and a widow has helped build up the estate of the deceased. 36 If one looks at the situation of the defendant, she presently has the home in Mosman. Although it is in an error in which real estate prices are high, it is in fact the home that she has worked in and lived in with the deceased for over twenty-one years. It has many fond memories for her and she is in an area where she knows her neighbours and surrounds. It is not unreasonable that she should be allowed to consider that as her home. 37 When one looks at her income it is less than $250 per week. The total last year was $13,017.27. Expenses just simply for things like rates and electricity and utilities of that type come to in excess of $7,000. She still has to provide herself with food and all the other necessaries of life. She is finding difficulty in doing so and that is not surprising, given the very modest circumstances provided to her by the pension. It is likely that she will get another $120,000 to $160,000, some of which will go on necessary repairs to Glover Street. There is no reason why she should not be able to do these. 38 As indicated in the judgment of the Court of Appeal it is appropriate that as well as being provided with a house the widow have some fund for contingencies and also a sufficient fund to provide her with income. 39 The defendant's income is not sufficient and there is no reason why one would think that the type of provisions suggested as appropriate for a widow should not apply in this case. Importantly, there have been the contributions to build up the estate of the deceased. In the present case there is no suggestion that the plaintiff has contributed to building up this estate. There was a long and happy marriage and in my view it is not appropriate that any further provision be made in favour of the plaintiff. 40 There is one matter which I raise and I have not referred to and that concerns the interest in the estate of the late James Murray Forrest. The defendant made the claim that she considers that that is something which she would be quite happy for the plaintiff to have. There is an interest in the remainder which no doubt will fall before too much longer. Accordingly, given that the defendant is happy for the plaintiff to have this, it might be appropriate to make an order that she receive a legacy in this regard. 41 Accordingly, I order that the plaintiff receive a further legacy of the deceased's interest in the estate of the late James Murray Forrest as modified by the Deed of Arrangement made between the beneficiaries of that estate and the widow of the late James Murray Forrest, Charlotte Jessie Forrest. 42 I have heard further submissions in respect of costs. The plaintiff suggests that there perhaps should be an order in the plaintiff's favour for costs but in my view that is not appropriate. Clearly just because she is an eligible person she is not entitled to an order for costs. There was also at least on the defendant's side a genuine offer to transfer some property to the plaintiff, which was not accepted. 43 Ultimately the result is that the plaintiff has been unsuccessful. She had had the opportunity to assess the claim. The affidavits, once they were put on, clearly indicated the nature of the estate. It seems to me that it is appropriate that from some time after that the plaintiff ought to pay the defendant's costs. In order to allow a reasonable time for that assessment being made, I will allow some time after the supply of affidavits. I will also note that the plaintiff appears to have an emotional difficulty with her relationship with her father which becomes evident in the affidavits. 44 What I propose to order is that the plaintiff shall pay the defendant's costs from 1 January 1999 to date. 45 The exhibits may be returned.

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