Burns v Milne

• 1- THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2189/98 - MARJORIE DORIS BURNS v JOHN CHARLES MILNE

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Colin James Burns who died on 1 November 1996 aged 77 years. The deceased was survived by his three children, one of whom is the plaintiff. The deceased's wife predeceased him having died on 6 October 1979. By his last will made on 30 August 1990 the deceased left his children his two properties but in unequal shares. Clauses 3 and 4 of his will were in the following terms: "I give my property at 6 Coomea Street, Bomaderry being Lot 18 in section 9 deposited plan 2886 equally to my three children namely Robert Graham Burns of 142 Hereford Street Forest Lodge, Marjorie Doris Burns of 10 Karowa Street, Bomaderry and Christine Lorraine Milne of 225 Woodhill Mountain Road Berry. I give my property at 8 Lakeview Drive, Lakeview Heights Bermagui being Lot 47 in deposited plan 213407 together with all of the contents of that property equally to my son the said Robert Graham Burns and my daughter the said Christine Lorraine Milne. I have not given my daughter the said Marjorie Doris Burns any interest in this property because of her treatment of me after she left 6 Coomea Street Bomaderry in late 1981 and later her treatment of her siblings Robert and Christine regarding their jointly owned property at 10 Karowa Street Bomaderry." 2 Other than some small gifts he gave the residue of his personalty to his three children equally. 3 The estate consisted of two properties which are referred to in the will and each had a value, according to the parties, of $130,000. There was a car worth $4,000 and cash of some $3,335. 4 In these proceedings the plaintiff and the defendant have incurred costs. On the defendant's part there is some $15,200 - I assume that includes administration costs. The plaintiff's costs amount to $14,733. If the plaintiff obtains an order on her favour, leaving aside differences between the plaintiff and the deceased and the plaintiff and her siblings, this leaves an estate having a value of some $237,000 less selling expenses. 5 It is useful to deal with some of the chronology in the matter. The deceased was born on 20 June 1919. He had three children, Robert born 11 August 1947, the plaintiff born 19 June 1954 and his youngest Christine born on 6 July 1960. Robert left home in 1967 when he came to Sydney to work and follow his occupation. The plaintiff herself left school in 1970 aged 16 and started her work career as a check out operator. By 1973 she had obtained employment at the Shoalhaven paper mill where she still works. The child Christine started work in 1977 and did a hairdressing course. The deceased's wife died on 6 October 1979. Christine married shortly after that and moved out of the deceased's home. In 1981 the deceased met a friend, Ellen, and she moved into the deceased's home. The plaintiff herself moved out at that time and moved to a house at 10 Karowa Street Bomaderry. That house had formerly been owned by the mother of the three children and she left it to her children equally. 6 In 1982 the deceased and his friend Ellen had a car accident. Ellen died and the deceased suffered a broken neck and was hospitalised for a period of some six months. During this period the plaintiff took care of the deceased's property. In 1984 the deceased was diagnosed with bowel cancer. In 1985 he retired. The plaintiff herself suffered medical difficulties in December 1989. She was diagnosed with cancer of the cervix. She had an operation which was a radical hysterectomy. 7 In 1995 the deceased was diagnosed with Redman's Syndrome, a difficult illness to which I will come back. He made his will on 30 August 1996 and died on 1 November. Probate was duly granted and the application was commenced within time. 8 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 the 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 inter relationship which exists between "adequate provision" and "proper provision" et cetera were explained in Bosch v Perpetual Trustee Company 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." 9 As indicated by the High Court I turn to the situation of the plaintiff. The plaintiff is a single woman aged 45 with no dependants. At present she has an income per fortnight of $1,370. She has expenses of $1355 which have increased recently due to the fact that she increased the loan which she had with her credit union. Her asset situation is that she has her one-third share in 10 Karowa Street Bomaderry that is worth, according to the parties, $43,333, she has a car worth $15,000 and cash of some $7,000, a total of $65,333 in assets. She has a loan with the credit union of $33,000 and owes Mastercard $5,000. She has superannuation which amounts to $83,290. That, of course, is not accessible to her at the moment. I have mentioned that she has some medical problems. 10 As a result of the radical hysterectomy which she underwent she suffers from adhesions which limit her ability to lift and to walk. She has a cyst which restricts her movement and gives her some discomfort. There is some evidence from her doctor as to her situation and, after indicating the details of her problems, he did say that it seems likely she has been cured of the disease. There is no cast iron guarantee that she could not suffer a recurrence. This is something which concerns the plaintiff and which she is worried about. 11 The important thing to consider is, of course, the relationship between the plaintiff and the deceased. In the evidence there was some consideration of the work that the various children did at home and also the assistance which they gave to their mother. The mother suffered from illnesses and required treatment, including treatment for diabetes. The extent of the care given by the children to the mother in this case is probably not relevant. It is, of course, relevant that all the children, when they were at home, did contribute to household chores. 12 The evidence of the assistance to the deceased himself also occupied quite a deal of the evidence. It is clear that the burden of the assistance in this regard fell upon the plaintiff. The daughter, Christine, had left home and married soon after the mother died. Her father, the deceased, did not tolerate young children well and, accordingly, it was not possible for Christine to do as much for her father. She also lived a distance away in Berry. Similarly Robert, although he did maintain contact, lived in Sydney. He looked after his father when he came to Sydney and would come down to visit him in Bomaderry. 13 It is useful to at least consider some of the areas where the plaintiff has spent her own time looking after the deceased. After the death of her mother she continued in the family home at Coomea Street Bomaderry. She stayed there for some two years until the deceased brought home his new lady friend to whom I have referred. The plaintiff then moved out of the home. Apparently, as noted by the provisions of the deceased's will, there was some altercation or unease between the plaintiff and the deceased at that stage. 14 The accident in which Ellen died left the deceased with serious injuries. He had a broken neck and spent six months in North Shore hospital. During this period the plaintiff looked after Coomea Street, mowing the lawns. She also used to go to Lakeview Heights Bermagui to mow the lawns and look after that property. When he came home she did in fact move in to help him for a month or two. She provided meals, washed, ironed, and did the housework. She, while living there for a month, was in fact working at the same time herself. When the deceased was sick, in 1984 he spent three months in Nowra hospital. Once again the plaintiff looked after the property. The plaintiff used to call in and care for the deceased but she did not move back to look after him. She would see him before and after her shifts and would bring him meals, do his washing and ironing. 15 The deceased retired in 1985 and thereafter the plaintiff continued, apparently, to do washing and ironing for the deceased. In 1995 the deceased was diagnosed with Redman's Syndrome, as it is commonly called. His body became red, his legs swelled and he required fairly careful treatment. This was obviously difficult and the plaintiff did it although, by 1 July, she was not able to completely manage this by herself. She got a helper to come in for three days a week three hours at a time. The plaintiff would meet with the carers to ensure that the house was appropriately kept and she also did his housework. 16 Whatever the nature of the upset that the deceased had with his daughter in 1984 it was no doubt caused by him bringing home a woman and, in any event, that seems to have passed into history. They obviously made up their differences and the plaintiff continued to look after the deceased. This was one of the reasons the deceased expressed in his will for the provision. The other thing that is also clear from the evidence is that the deceased made the differential provision in his will because he believed that his daughter should have been paying rent to her brother and sister for the property which she was occupying. 17 According to the plaintiff they had not asked her to pay rent and the highest the evidence goes for the brother and sister is that they discussed with her the fact that the property was not rented. Clearly it became a difficult subject between them. Importantly, of course, nothing was done to disturb the arrangement, which obviously was a consensual one at the commencement, namely, that the plaintiff would occupy the house that had been left to the three children by the mother. 18 There is, of course, no obligation upon the plaintiff to make any payment for rent. The property was owned jointly and it is clear from the authorities such as Fireguard v Shannahan (1994) 35 NSWLR 306, and then many cases over the previous 150 years that pre-dated that case, that there is no obligation to pay rent to a fellow joint owner. Rent only becomes payable in the event of an ouster and there is absolutely no evidence of any such ouster occurring. 19 I myself, although appreciating that the testator has made the differential provision to take account of this fact, would come to a somewhat different view. There is no legal obligation, and in ordinary circumstances where parties start out with a consensual arrangement for one of them to occupy, then I would think there would be no moral occupation to make payment of rent. Ultimately, of course, the plaintiff ended up paying all outgoings when there was dispute with her and her sister and brother. The real issue about whether she was to stay there was never pressed by the brother and sister. In one sense this was probably because of family reasons or, to put it slightly more straight forwardly, it may well have been to the brother and sister's advantage for her to continue to stay there. For their own various reasons they were not able to give the type of assistance that the plaintiff was able to give on a day to day basis. Her having the use of that accommodation enabled her to do most of the major care for the father. There was a benefit to the brother and sister in this continuing. Caring for the deceased was not an easy matter. He was a difficult man to get on with and he believed using his daughters to do the work about the house. 20 I do not for a minute suggest the relationship between the deceased and the plaintiff was not without these arguments. Clearly there were arguments, as the neighbours recount, but the fact of the matter is there was this work done for a long time on a regular basis by the plaintiff for the deceased and I am of the view she was of great assistance to the deceased over many years. 21 It is also necessary to look at the situation of others having a claim on the bounty of the deceased. The first of these to consider is Robert. He is the eldest son of the deceased, single, aged 52 years, and has no dependants. He was formerly a bank officer with the National Australia Bank. Recently he has been retrenched. He received on retrenchment $22,000 in long service leave and some $65,000 in a redundancy package. He has superannuation in excess of $400,000 but it is rolled over and is not accessible without penalty at the moment. His other assets consist in his one-third share in the property at Karowa Street Bomaderry which the parties value at $43,333 for a one-third share. He has a Hilux four wheel drive worth $7,300, National Bank shares worth $5,095, and a stamp collection worth some $2,000. He swore in his affidavit he had liabilities of some $25,000. He boards with an old lady in Sydney, and has done so for many years, and pays $200 a week board. Apparently he is in good health. His current income situation is not before the court and one assumes he is seeking employment. So far as the relationship with the deceased is concerned it is clear he moved to Sydney shortly after he left home when he finished his schooling. There is no doubt he maintained contact with the deceased, looked after him when he was in Sydney and would come down from time to time to visit his father in Bomaderry. 22 I turn to the situation of Christine Milne, the youngest child of the deceased. She is married, aged 40 years. She has two children. They are in years 9 and 11 at school. The husband works and he has a salary of $930 per fortnight. She herself has recently returned to her part time profession as a hairdresser and receives $200 to $250 per week. They are able to comfortably cover their outgoings and live at a property at 225 Woodhill Mountain Road Berry that was estimated, by reference to the Valuer General's valuation, to be worth $250,000 but is probably worth something more. They have a Toyota Land Cruiser worth $30,000, a second car of little value and Christine has her interest in 10 Karowa Street, valued at $43,333. There is superannuation of some $25,000. Their liabilities are somewhat less than $56,000 at this stage. 23 There is no doubt that Christine also had a good relationship with her father. There seems to have been less problems and arguments with her. As I have indicated she was not able to do as much, or give as much assistance to the deceased, because of the reasons I have mentioned. She did, however, from time to time take the deceased to doctors' appointments and help him with matters of that type. 24 I turn to how the plaintiff says she has been left without adequate and proper provision for her maintenance education and advancement in life. 25 It is important the parties realise it is not the task of this Court to make what the parties might consider to be a fair or just provision for a plaintiff. Nor is it appropriate for the court to reward simply a dutiful daughter. The court has no jurisdiction to make an order unless the plaintiff has been left without adequate provision in the way which has been referred to by the High Court in the case which I have earlier quoted. 26 The case was put that the plaintiff had a need for accommodation, that she should receive out of the estate sufficient so she could have a house of her own. This submission runs into two major obstacles. The first is the fact that the authorities do not recognise any such obligation on a testator. In Shearer v The Public Trustee and Hawke Justice Young had the following to say: "The community's attitude is not to be judged by a feeling as to whether it is morally wrong for a person to leave property otherwise than to her spouse or children. One must really look at the obligations to provide for persons who have some dependants. Where the applicant is a spouse it is nowadays usually sought that to leave a spouse with a mere right of residence is insufficient provision. However, that is not the case with children, and as far as I am aware it has never been said by any court that it is an obligation that the community expects that a mother will leave her child in a position where the child has a house of his or her own." 27 In some circumstances, of course, something towards a home may often be appropriate. 28 The second obstacle is the question of evidence. In this regard I am reminded by what was said by Mr Justice Sheller in Singer v Berghouse on 23 July 1992. There his Honour had the following to say: "I must say that I find it extraordinary that the appellant presented scant or no evidence as to her present income and outgoings or as to her intentions or needs for the future or as to what lump sum provision applying appropriate discount tables would be required to meet these claims or needs, if they existed. In my opinion, in the circumstances of this case, for the court, in the absence of any such evidence, to make an order for the payment to the appellant of a lump sum is to do no more than act on speculation and, contrary to the prohibition contained in section 9(2) of the Act, to alter the deceased's disposition of his property in the absence of proof that he has inadequately provided for the appellant." 29 There was not a shred of evidence in the plaintiff's case touching upon the need which she advanced. One would normally expect evidence of the cost of suitable accommodation and the borrowing power of the applicant in the event funds could be borrowed to complete the purchase. This failure would normally be fatal to the plaintiff's claim. However, there was sufficient other evidence in the case in this aspect of it. The house in which the plaintiff is living in Bomaderry is valued by the parties at $130,000. There is rental valuation evidence of the house and it appears from that evidence that the home was a modest bungalow which rented in 1996 at $140 per week. The testator's home also in Bomaderry is valued by the parties at $130,000. The details of the house do not appear in the evidence but one might infer from the background of the parties it is not a substantial residence. All of this indicates a modest home in Bomaderry would cost in the order of $130,000. There is evidence that the plaintiff has borrowed from her credit union and recently was able to increase her borrowings to $33,000. In answers in cross examination the plaintiff expressed the view that she would be able to borrow the balance to purchase a home after using her interest in Karowa Street and what she would receive from the estate. Thus there does not seem to be a difficulty with her borrowing some further funds, although the precise amount is not clear. 30 The plaintiff receives a benefit under the will. Assuming she is successful the costs have to be provided for and the burden of these, after exhausting revenue would fall in the two properties. This would put the plaintiff's share at about $40,000. She has her share of the present house which, after allowing for selling expenses (and hopefully without any further litigation costs) should be about $40,000. 31 If one looks at the position of the three children clearly Christine is in the most favourable situation. The plaintiff and Robert are both single. Robert has substantial superannuation but at present is not employed. The plaintiff is the reverse. The estate will be likely to have a net value of some $230,000. Bearing in mind the claim of the plaintiff something more should have been provided for her. It flies against the face of reason to suggest, after this litigation, her brother and sister will let her remain in the house which they all jointly own. She clearly will have to obtain further accommodation and some extra provision over and above what has been provided in the will is appropriate. Having regard to the family history a wise and just testator, in making an honest evaluation of his children's needs, will take into account the likelihood of dispute. 32 I have concluded it would not be appropriate to discount such a provision by having regard to the failure of the plaintiff to pay rent. The plaintiff has given plenty in return. The form of the provision is probably best accommodated by providing the plaintiff with a legacy in lieu of her existing entitlement under the will, apart from the furniture she has used for many years. This will allow the executor and the other beneficiaries flexibility in the way the estate assets are managed. Funds could be borrowed and assets retained if that is desired. It might also have the ancillary (but to these proceedings irrelevant) advantage in that it might assist a resolution of the future ownership of the house at 10 Karowa Street. 33 The orders I make are: 1. In lieu of the provision for the plaintiff in paragraphs 3 and 8 of the will of the deceased, the plaintiff receive a legacy of $80,000 out of the estate of the deceased such legacy to carry interest at the rate provided for under the Family Provision Act on and from two months from today. 2. The plaintiff's costs on a party and party basis and the defendant's costs on an indemnity basis to be paid out of the estate of the deceased. oOo

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