Blacker v WilliamsWilliams v Williams

4672/01 Debbie Lee Blacker v Deborah Isabel Williams 1847/02 Ashleigh Skye Williams v Deborah Isabel Williams

• Estate of Daryl John Williams JUDGMENT 1 MASTER: This is the hearing of two applications under the Family Provision Act in respect of the estate of the late Daryl John Williams who died on 20 January 2001 aged 45 years. The plaintiffs, his de facto partner, Debbie Blacker and his daughter, Ashleigh Williams, as a result of their relationship, survived him. His former wife and his three children of that marriage also survived him. The deceased's will 2 The deceased made his last will on 19 April 1995 by which he appointed his sister executrix. He left the whole of his estate to his three children of his marriage, namely, Sharelle Jade Williams, Katrina Lee Williams and Nigel Trent Williams. There was no provision made for either of the plaintiffs. The estate of the deceased 3 The deceased had been a baker during his lifetime and he had operated a number of shops which were franchises in the "Baker's Delight" chain of shops. At the date of his death there were five shops that were operated through a company Abernathy Pty Ltd and the Blacker discretionary trust. The present assets in the estate consist of the following:

(a) One share in the capital of Abernathy Pty Ltd, the other share being held by the plaintiff Debbie Blacker, valued at $449,362 (b)` The sum of $937,661.01 held by the executrix following the payment under a Westpac life policy, (c) A leave entitlements of the deceased in the sum of $1225.79, and (d) A Commonwealth life superannuation Mastertrust policy No 75034123 valued at $4,470.73, and (e) Interest in AXA Australia valued at $2,155. 4 The total gross estate is thus $1,394,874.40 5 The only debt in the estate is a tax liability for $1,249.30. Costs have been incurred in these proceedings and the defendant's costs are estimated at $70,000. The costs of the plaintiff, Ashleigh Williams, are estimated at $59,901 and those of the plaintiff, Debbie Blacker, are estimated at $54,138.69. This is a total of $184,039.69. Family history 6 The deceased, Daryl John Williams, was born on 11 May 1955 and his wife, Gail, was born on 5 May 1960. They married on 25 October 1980 and had three children. Sharelle was born on 27 November 1983, Katrina on 20 November 1986 and Nigel on 20 January 1992. They are respectively aged 19, 16 and 11 years. 7 In March 1993 the deceased separated from his wife and in May of that year he commenced a de facto relationship with the plaintiff, Debbie Blacker, who had been born on 26 December 1971 and is now aged 32 years. At the commencement of their relationship the plaintiff Debbie had a half interest in a Baker's Delight franchise at Lara in Victoria which she valued at $30,000 and other assets making a total $55,000. The deceased at that time had very little assets as he had a property settlement with his wife that was put into place in June 1993. Under the property settlement she received most of his assets including their home and a shop that he had been operating. 8 After a short time in Dubbo in 1993 the plaintiff Debbie and the deceased moved to the ACT and operated various shops that had been acquired by Abernathy Pty Ltd. In 1995 the plaintiff Debbie Blacker and the deceased moved to Sydney where they commenced work as consultants for Baker's Delight at that company's head office. Later in that year they entered into various franchise arrangements for shops at Mount Hutton, Newcastle and Tuggerah. 9 In 1995 Gail Williams was divorced from the deceased and she commenced to live with Mr Ian O'Connor, a farmer, in northern Victoria. Her three children moved with her to live with him at that stage. 10 On the first June 1996 Ashleigh, the child of the deceased and Debbie Blacker, was born. In the years before the deceased died Abernathy Pty Ltd acquired a number of other shops. 11 The deceased died on 20 January 2001 and probate was granted on 2 July 2001. Both summonses were filed within time. The plaintiffs' eligibility 12 There is no dispute that the plaintiff, Debbie Blacker, lived in a de facto relationship with the deceased for seven years up until the date of his death. In these circumstances she is an eligible person as is her daughter, Ashleigh. In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 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' etc 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 etc 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."

The situation of the plaintiff, Debbie Williams 13 The plaintiff, Debbie, is years 32 years of age, single and with the responsibility of looking after her seven -year-old daughter Ashleigh. She works in the business that she and the deceased set up between them over their seven years together. That business has involved substantial effort to develop and maintain particularly after the death of the deceased. 14 The financial situation of the plaintiff is that she has the following assets:

(a) Her home and 31 Federation Drive, Medowie, New South Wales which was formerly owned by the deceased and her jointly. It was valued at $330,000 as at 12 September 2002 (b) One share in Abernathy Pty Ltd valued at $44,9362, (c) Control of the Blacker Discretionary Trust valued at $1,459, (d) The use of a car that is funded through the company Abernathy Pty Ltd. (e) Cash of about $14,000, and (f) Superannuation; the amount of which was not disclosed in the evidence. 15 The plaintiff had a loan on her house in the sum of $184,837. The loan, together with the company's loans, were refinanced into one borrowing by the company and the amount of that loan referrable to the house is $165,347.08. The company, Abernathy Pty Ltd, and the discretionary trust have all borrowed substantial sums in order to acquire various franchises which are owned by the company and trust. Total borrowings are in the order of $1,130,194. The company is sufficiently profitable to service the loans and it employs in excess of 90 staff. 16 There was some criticism of the plaintiff in respect of the way in which she had disclosed her asset position. Having regard to the closeness of the trial to the last financial year I do not think that this criticism is warranted. Certainly the plaintiff has failed to provide details of her superannuation but, given her age, that is not of great significance. 17 The plaintiff works almost full-time in the company business and receives a wage and also dividends. She has done calculations of her expenses which include all household items the deductions for tax and interest payment on the house mortgage and these show weekly expenses of $2,250. Using the figures for the year ended 30 June 2002 her income for both her wage and her dividends from the company, on a weekly basis, was $3,163. The current year's figures are not substantially different from that amount. It is clear that the plaintiff has sufficient income to maintain herself and her home. 18 It is fairly apparent from a consideration of the history of the matter that the estate was built up by the hard work of the deceased and the plaintiff, Debbie Blacker. She in fact sold her shop in Victoria and no doubt contributed those funds to their joint purposes. 19 The relationship between the plaintiff, Debbie Blacker, and the deceased was apparently a happy one and they were together for some seven and a half years before the deceased's premature death. The situation of the plaintiff, Ashleigh Williams 20 Ashleigh is aged seven years and lives with her mother. She is attending primary school and is an average student. Her mother intends that she should complete her secondary schooling. Ashleigh is in good health and has no assets of any significance. 21 It is necessary to also consider the situation of others having a claim on the bounty of the deceased. In this case they are the children of his first marriage. His former wife makes no claim and has given evidence in support of her children's position in the present proceedings. The situation of Sharelle Williams 22 Sharelle is a full-time student doing a clinical science/Osteopathic double degree course at RMIT University in Melbourne. She has completed her first year receiving some credit grades and is continuing on and anticipates completing it in the minimum period of five years. She no longer lives at home and instead lives as a student in a shared flat near the university. She receives a Government Youth Allowance of about $370 per fortnight and this is sufficient to support her. 23 Apart from some minor items she does not have substantial assets. The most substantial is a 1992 car with a value of about $4,000. Because of her parents' situation to which I will turn shortly she is very dependent upon her own resources and has to do without things such as a computer she really would like for her university course. 24 Is clear that Sharelle had a good relationship with the father during his lifetime. She even lived with him and worked in his business in the year before he died. The situation of Katrina Williams and Nigel Williams 25 Both these children live with her mother at Charlton in north-western Victoria. Their mother, Gail Williams, lives with Mr Ian O'Connor who is a farmer and a rural contractor. He has a number of farm properties that are valued in all at $483,500. However he has liabilities of $224,500. He owns a wide variety of farm plants of some value but he has substantial finance in place in respect of those items. He has some cash reserves of approximately $100,000 and some shares worth some $9,000. Recently he has taken out an overdraft that stands at $65,000. 26 His income, which is used to support Gail Williams and her two children, has been substantially reduced because of the drought in Victoria. 27 Gail Williams owns a second-hand car and has some shares worth approximately $5,000. She and Mr O'Connor now receive Centerlink benefits as a result of the drought in the amount of $685 per fortnight. 28 Katrina is presently in year 11 at high school and will now proceed to year 12. She wishes to undertake some form of tertiary study. Katrina is generally in good health although she is a carrier of the hemochromatosis gene which requires some monitoring. She also suffers from asthma which is appropriately controlled. She has some casual jobs the income from which she uses on her own requirements and she has savings of about $1,000. 29 Nigel is attending school and is in good health although he too is a carrier of hemochromatosis. Unfortunately Nigel has some learning disabilities which requires the help of a child psychologist at the cost of about $15 per week. He needs braces for his teeth which will cost $5,500. Consideration of the claims 30 It is necessary to see how the plaintiffs say they have been left without adequate and proper provision for their maintenance, education and advancement in life. 31 The plaintiff, Debbie Blacker, puts forward a claim to receive from the estate the one share in Abernathy Pty Ltd which is owned by the estate and also a legacy in the order of $215,000. The latter is said to be appropriate so that she can discharge that part of the company's loan which relates to the original mortgage which she had on the home which she owned jointly with the deceased and have a sum of $50,000 in order to protect her from future contingencies. 32 It will be seen that this provision will leave her with a substantial loan still owing by the company. The proceeds of the Westpac life insurance policy which provides the substantial part of the cash in the estate are available because of some advice given to the deceased and Debbie Blacker by the Westpac Bank. Officers of that bank suggested they take out a life policy so that if one of them died the substantial borrowings could be repaid from that life policy. As things have transpired those funds are not available to the company but have gone to the estate. It was submitted that I should have regard to this intention of the deceased when considering whether to make further provision for the plaintiffs. In my view this is not appropriate as the question of the further provision should be looked at in terms which refer to the duty of the Court to provide for people who have been left without adequate and proper provision for their maintenance, education and advancement in life. 33 I turn for the moment to the way Ashleigh presents her claim. Ashleigh seeks a legacy of $303,000 being a discounted figure of what she claims are the expenses for her maintenance from the present time until she turns eighteen years. That evidence is given by her mother, Debbie Blacker, who has estimated the weekly expenses for maintaining Ashleigh at $648 per week. This figure includes, food, clothing, other items and, surprisingly, an amount of $360 per week being half the cost of the house including rates, insurance, repairs and other matters. It is to be borne in mind that the house is the mother's house and that she intends to continue to own it as her home. I would have thought that in these circumstances it is quite inappropriate to suggest there should be some contribution by her daughter to the home and it is really an element of double counting. The discount figure for eleven years on $648 per week is $303,442.95. Cutting out the $360 per week for accommodation one is left with a figure of $134,863.53 as the capitalised sum to represent the remaining weekly payment. 34 When considering this claim for provision by the daughter one has, of course, to take into account the fact that her mother has an obligation to support her and the evidence to which I have referred earlier demonstrates that her mother has income available to her to enable her to support her daughter. Having regard to this it probably would be appropriate for at least $65,000 by way of a capitalised sum to be provided towards the support of the daughter but that it is not her only need. That sum would only take her to her eighteenth birthday and clearly she may have other needs as a young child either for further education after completing her high school or for preparing her for her place in life. Unfortunately she is too young at this stage to have any idea as to what she might ultimately wish to do or in fact be capable of doing. In these circumstances some other small sum should be provided for her. 35 I return to the claim in respect of the plaintiff, Debbie Blacker. She was the deceased's de facto partner at the date of his death and recently the position of a de facto partner was considered by the Court of Appeal. In Marshal v Carruthers [2002] NSWCA 47 Hodgson J had the following to say:- "The Master found that Ms Carruthers had a strong claim, and I agree with that finding. However, the strength of a claim of a surviving partner does, in my opinion, vary with circumstances. Although the Family Provision Act does, in some respects, equate de facto spouses with de jure spouses, this does not, in my opinion, make the existence or otherwise of a marriage irrelevant. In my opinion, a formal and binding commitment to mutual support through good times and bad, other factors being equal, adds strength to a legitimate claim. In my opinion also, the strength of a claim can be affected by the length of a relationship and contributions to the relationship. One factor which may be particularly important in a claim by a woman is that a woman may have, to the detriment of her own financial prospects, taken a major role in raising the children of herself and the deceased. 64 The Master referred to the following statement of principle which appears in Luciano v Rosenblum 2 NSWLR 65 at 69 It seems to me that, as a broad general rule, and in the absence of special circumstances, the duty of a testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secure in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies. I do not think it is to be assumed that this statement is to apply in all cases, particularly where factors such as those I have mentioned are absent. In my opinion, it is not clear that this statement would apply to applications by widowers. The difference in attitude that the Court may take to applications by widowers is due in part, I think, to economic disadvantages which women still face. One important aspect of this is the economic disadvantage occasioned by the greater responsibility which women often take in looking after children. That factor is of course absent here." 36 In this case a provision of the type referred to in Luciano v Rosenblum is inappropriate because I am not dealing with a long relationship. Unfortunately it was only for seven and a half years. There are, however, a number of other factors which have to be taken into account when considering the claim. Of importance is the fact that the plaintiff and the deceased have had a child and they have made a commitment obviously to her future education and upbringing. Another matter which is very important in this case is that the plaintiff and the deceased worked hard together to build up the assets which are now found to be partly owned by the plaintiff and part by the estate. Another important matter is that the plaintiff is young and has her life ahead of her. One is not in the situation of considering someone at the end of their life but someone who has substantial earning capacity available to her in the future. 37 In all of these considerations one must bear in mind the other claims on the bounty of the deceased which are those of the three children of the first marriage. Although there are no particular matters which stand out it is clear that they will need assistance in the future and can benefit by the provision provided for by the deceased. The cash assets left in the estate, assuming that the liabilities and the costs of these proceedings are taken out, amount to $760,223.54. In these circumstances it is fortunate that there is sufficient in the estate to accommodate all relevant claims. 38 Having regard to the foregoing, in my view, it is appropriate and I order that the plaintiff, Debbie Blacker, receive the following:-

(a) A specific bequest of the one share in Abernathy Pty Ltd owned by the deceased. (b) A legacy of $165,000. 39 It is appropriate and I order that the plaintiff, Ashleigh Skye Williams, receive a legacy of $100,000. 40 I will hear submissions on costs. **********

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