Bowen v Dodd [2006] NSWSC 1121 | Case summary

2830/06 - BOWEN v DODD JUDGMENT 1 HIS HONOUR: This is a widower's application under the Family Provision Act 1982 for provision out of the estate of his late wife, Patricia Mary Bowen. Mrs Bowen died on 1 October 2005. Her last will was made and published on 30 July 1987 and probate of that will was granted to the defendants, her children, by this Court on 9 March 2006. 2 The plaintiff is now aged eighty-five years of age. He and the deceased had both been previously married. Both had issue. However, they had lived in a de facto relationship for eight years, 1974 to 1982, and had lived together as a married couple for twenty-three years from 1982. 3 They lived together in a house at 34 Kallaroo Road Umina, a house which was wholly owned by the deceased. The parties had a joint bank account which was mainly built up by savings from their pension and at the date of death it contained about $19,000. This passed to the plaintiff by survivorship and he has about $13,000 of that left, plus a car and his pension. His pension is about $646 a fortnight. 4 When the deceased died she and the plaintiff were in the process of making arrangements for the house at Umina to be sold and for them each to become residents of the Peninsula Village Retirement Centre. They understood that this would involve them each providing an accommodation bond of $119,500. The arrangements between the deceased and the village need not concern us, but the plaintiff entered into a resident agreement on 31 August 2005, which was backdated to his entry into the village on 18 August 2005, under which he covenanted to pay the accommodation bond of $119,500 and if that money was not paid by a certain date to pay 9.43 percent interest on it. The contract between the plaintiff and the village operates so that the accommodation bond will be refunded when the plaintiff leaves the village, either dead or alive, less $3,024 for each year that he was in residence. 5 The plaintiff is not in the best of health. He has had a heart attack and he is not too nimble on his feet, but he is still able to care for himself, though he does not consider he is sufficiently able to prepare his own meals, and the arrangement he has with the village is that he has his meals prepared by the village. He is happy enough to live in the village for so long as he is able to do so. 6 The resident agreement provides that the village will endeavour to find proper accommodation should the plaintiff no longer be able to live in the village, but has no binding obligation to do so. Just what the situation will be if the plaintiff needs to leave the village in the future is unclear. Normally one expects the plaintiff to put on that sort of evidence, but I appreciate it is very difficult to be able to forecast the future of retirement villages, especially as we do not know whether the plaintiff is likely to be happy in this place for three, seven, ten years or what. 7 Under the will the deceased gave the plaintiff the right to reside in her principal place of residence at the date of her death during his lifetime or until he remarried or entered into a permanent de facto relationship or elected not to reside in the residence, with the plaintiff punctually paying all rates, taxes and out goings and keeping the residence in good habitable state of repair and keeping the property insured. 8 Although the will was prepared twenty years ago, even then it was not good practice in the situation, where people live for quite a long while after they retire, to put a will in this form. If the testatrix intended to put a roof over the head of her spouse, then she has failed to take into account a number of essential factors, including the fact that people cease to be able to care for themselves when they get to a certain age, and that to bind them to live in the one property with the expense of keeping a deteriorating property in good repair, and as soon as they leave the property having absolutely nothing, does not usually properly provide for the spouse. There are, of course, situations where that will not be so, but in the average case that is so and solicitors generally stopped making this sort of will ten, twenty years ago. 9 Accordingly, I have no doubt at all in reaching the view under the first limb of Singer v Berghouse (1994) 181 CLR 201, that the plaintiff has been left without proper support by the will. 10 Turning to the second limb, the question is what is the proper provision. 11 I have relayed the circumstances of the plaintiff. The defendants have given evidence. The male defendant works as a picture framer. He only earns $350 per week gross. He owns, with his wife, a property at Kurrajong Heights worth $490,000, subject to a mortgage of $180,000. However, he is fortunate in that his wife, with whom he is apparently on good terms, works as a school teacher earning $1,346 a week. 12 The female defendant is not in as good a position however. She and her husband own their own home unencumbered at Banora Point near Tweed Heads valued at $300,000, they receive a disability pension of $375 per week and they have debts of about $4,500. She is not by any means a rich woman but she is not desperate either. 13 It seems to be recognised by all parties that it is appropriate for the plaintiff to continue to live in the retirement village and this will require the house being sold. The house was valued for probate purposes at $350,000, but it would seem a more realistic estimate of what it will fetch is $280-300,000. Mr Raoul Wilson, in his very helpful address for the defendants, put that assuming that property sold for $285,000, with legal costs, estate agent's commission and the cost of these proceedings, plus the unpaid estate debts, this would leave a net estate of approximately $221,000. Of course, if the property sells for $300,000 there will be $236,000 left. 14 The plaintiff says that what the testatrix should have done for him was to provide the $119,500 which, with interest up to December, would total $133,000, plus $35,000 for the exigencies of life, a total of $168,000, which, if I acceded to that, would leave about $26,500 for each of the defendants, if Mr Wilson's figures were correct. 15 Mr Wilson says that the way in which any order for the plaintiff should be structured is in accordance with what is commonly known as a Crisp order, that is that the estate pay the accommodation bond and that there be an order so framed that when the plaintiff is unable to remain in his present accommodation he will move out into another home at the cost of the estate, and thereafter when he finally passes off this mortal coil the balance will revert to the estate. That is often a proper way of doing this sort of exercise with justice to everybody. However, I have to take into account that there does not appear to be particularly good feeling between the plaintiff, on the one hand, and the defendants on the other, and that is natural, seeing that the defendants are children of the deceased's previous marriage. However, unless there is close cooperation it is very difficult for a Crisp arrangement to work because one often finds that the parties come back to court at great expense, or, alternatively, get on each other's nerves. 16 Of course, if the plaintiff is going to receive a lump sum then the downside, so far as the defendants are concerned, is that if, and I hope this is not the situation, he dies in the next year or so there will be something like $113,000 which, unless he alters his will, will flow through to his son and not the children of the testatrix. 17 I acknowledge that this is a problem. The question really is whether it is a bigger problem than any other way of dealing with the situation, bearing in mind that even though the traditional rule as to people providing for their spouses was rationalised by the Court of Appeal in Marshall v Carruthers [2002] NSWCA 47 it is still to a great degree a person's responsibility to provide for the accommodation of their spouse if they cannot do it for themselves, as is the case here. 18 I believe that the only way in which the plaintiff can be assured of having a hassle free existence in the retirement village is to give him an outright sum of $133,000, plus something else. This, as I realise, has the effect that that sum of money will be diverted from the defendants. 19 Mr Harris SC, who appears for the plaintiff, says that that is the way the testatrix would have it because not only did she say during her lifetime that she would like to convey the house to herself and the plaintiff as joint tenants (in which case he would have taken the lot by survivorship) in August 2005 her scheme was to give the plaintiff the $119,500 for his half of the house. 20 However, to that Mr Wilson replies that at that stage, to the testatrix's knowledge, the plaintiff had made a will in favour of the deceased's children. As a result, it would seem, of their attitude to these proceedings, he has now changed his will to leave it to his son. 21 However, there is sufficient there, I think, that the testatrix certainly did consider that it might be appropriate to have the house in the joint names so that the survivor would take everything. 22 It seems to me that the capital gift of $133,000 is appropriate. The question then is about the extra amount to live on. 23 The plaintiff is eighty-five. He has $13,000 in the bank. He has his car and that is all, save that his pension is sufficient to cover his expenses at the retirement village and give himself about $70 per fortnight spare. $70 is not that much in this first decade of the twenty-first century, but at least he is making ends meet with a little over. 24 There was no particularisation of the $35,000, save that it seemed to be an appropriate sort of money. Mr Wilson was talking more in terms of $20,000. I think that the figure given by Mr Wilson is closer to the mark, considering that Mr Bowen is now eighty-five and has $13,000 left and so I think the appropriate figure is $25,000, in addition to the $133,000. 25 So then the court orders that in lieu of the provision made for him under the will of the late Patricia Mary Bowen, the plaintiff receive a legacy of $158,000, not to carry interest if paid before 15 December 2006, otherwise to carry interest in accordance with the rules for legacies. 26 I order that the costs of the plaintiff and the costs of the defendants on the trustee basis be paid out of the estate.

Bowen v Dodd

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Judgment (11 paragraphs)

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Cases Cited (2)