Carey v Robson & Anor; Nicholls v Robson & Anor

Carey v Robson & Anor; Nicholls v Robson & Anor - [2009] NSWSC 1142 - NSWSC 2009 case summary — Zoe

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13 Marion is now forty-nine years old. She spent her childhood on Heather Brae and, like Rosemary and Alan, she had a loving and secure relationship with her parents. She was educated at local State schools, leaving school after Year 12. She then undertook training as a nurse, ultimately attaining a Graduate Diploma in Health Management through the University of New England. She is now employed full time as a Senior Nurse Manager by Hunter New England Health. Her gross salary is $98,000 per annum. 14 Marion married Robert Carey in 1990. There are two children of the marriage, Brighid, born in November 1991, and Joseph, born in September 1993. 15 Robert is a farmer and grazier. He owns a property called Shannon View, of some 960 acres (388.6 ha) and he leases an adjoining property of some 100 acres (40 ha). Shannon View, on which is located the family home, is valued at about $1.425M. 16 The farming business which is conducted on Shannon View and the adjoining leased land is operated by a partnership between Robert and Marion, trading as "R.A. & M.A. Carey". 17 As at 30 June 2008, the assets of the partnership were $73,600 and its liabilities, consisting mostly of loans, were $476,700. Of these liabilities, the largest is an unsecured loan of $256,500 made to the partnership by Robert. The partnership business has been affected by drought over the last three years and has produced nett losses for the year ended 30 June 2006 of $60,000, $85,000 for the year ended 30 June 2007, and $99,000 for the year ended 30 June 2008 (all figures are rounded). 18 Robert's separate nett assets, including the loan to the partnership, are approximately $1,654,000. He does not have superannuation. Marion's separate assets comprise her interest in Lot 105, valued at $220,000, various shares and personal items worth about $24,000, superannuation benefits presently totalling $172,000 and the amount of $250,000 which is to be paid to her under the terms of the testator's will - a total valued at about $666,000. 19 Marion's personal liabilities comprise credit card debts amounting to some $18,500. 20 Robert's income from the partnership as at 30 June 2008, as appears from his Notice of Assessment, was $16,380. However, the partnership accounts show rent for Shannon View payable by the partnership for that year of $67,500. It is not clear whether this amount has been received by Robert, but that is a fair assumption in that he is the owner of the property. Marion's needs

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37 Alan is now fifty-one years of age. He was brought up on Heather Brae and lived there until he married in 1999. 38 Alan was educated at Tamworth High School to Higher School Certificate level. Throughout his childhood he assisted the testator in farming chores, according to his age and ability, as did his sisters. However, in his teenage years, the farm work became more physically demanding. By the age of fourteen years, Alan was carrying out work of all descriptions on the property. I accept that the testator called upon Alan more and more for assistance during Alan's later school years and that Alan had to miss school for significant periods of time in order to work on Heather Brae. Alan was not paid for his labour. 39 When he left school, Alan did a year's course in farm technology and wool classing at Tamworth TAFE. 40 The farming business carried on at Heather Brae was conducted by a partnership between the testator and Margaret. On 1 July 1979 Alan became a member of the partnership. Alan worked full time for the partnership on Heather Brae, doing the physical work with the testator and also in contract harvesting as part of the partnership business. Margaret was responsible for bookkeeping and financial records. 41 In 1980 the testator suffered a major heart attack which reduced his capacity for heavy physical work on Heather Brae. Alan took a larger share of that work. 42 In 1990 the partnership gave up contract harvesting and commenced a meat wholesale business. Margaret was now in chronic ill health and from 1991 the partnership employed a bookkeeper. 43 The meat wholesale business of the partnership grew substantially as a result of the long hours and hard work of Alan. By 1992, the testator's health was beginning to fail seriously from several different causes, and in 1996 he had a major by-pass operation. That same year he was struck by lightning and in 1997 he broke his foot. 44 From 1990 Margaret's health also began to fail seriously from a variety of causes. She had major by-pass surgery in 1998. 45 I accept that due to the testator's declining health, from at least 1992 onwards, Alan assumed a larger and larger burden of running the meat wholesale business and running the farming operations on Heather Brae. I accept also that from 1990 onwards Alan bore the major burden of looking after his parents, whose health was seriously deteriorating. While Marion and Rosemary, as loving and supportive daughters, did whatever they could to assist, they had as their first priority their own homes, their growing families and their careers, while Alan was unmarried and lived at Heather Brae, working in the partnership business and looking after his parents. 46 I accept that it was only due to Alan's willingness to work in the partnership business virtually unaided by his parents from 1998 onwards that the partnership business was able to continue and his parents were able to continue living at Heather Brae, as they wished to do. 47 Alan married in March 1999 and moved into Tamworth to live with his wife in rented accommodation. However, his parents' health continued to deteriorate seriously and they were unable to look after themselves. Alan was called upon for assistance with increasing frequency. He often spent the night at Heather Brae. These circumstances, coupled with the necessity of running the partnership business, placed enormous stress on Alan physically and emotionally. 48 I accept that Alan has foregone the education and career prospects which he might well have had otherwise in order to run the partnership business and to look after his parents. I accept that, because of his decision to do so, Alan has been severely restricted in his personal life and in his relationships. He has no children, which he feels deeply: see e.g. T99.20-T101.50. 49 I accept without reservation that, had Alan not continued to work as hard as he did in the partnership business, at the same time caring for his parents on a daily basis, the testator would not have been able to support himself and Margaret financially from about 1996 onwards without selling some, and possibly all, of his real estate assets and he and Margaret would then have had to move to a nursing home, contrary to their strong wishes. 50 This conclusion is supported by the testator's own perceptions. The evidence shows that he fully appreciated that he was leaving the far larger proportion of his estate to Alan and that Rosemary and Marion may well feel aggrieved by the fact that he had not treated all his children equally. However, the testator confirmed in a note intended to be read by his daughters that while he and Margaret acknowledged all that they had done, Alan had, nevertheless, done far more: Alan was "at our beck and call at all times - for no remuneration": see Alan's affidavit dated 11 July 2008, p 153; see also the testator's notes for his solicitor as to the reasons for the unequal division of the estate at p 148. Alan's financial position

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57 The strongest ground for relief urged by Rosemary and Marion, though put somewhat obliquely, is that the provision made for them by the testator is vastly disproportionate to the provision made for Alan. One can understand the sense of grievance which one child may have at being treated by a parent differently from another child. Some may be tempted to think that great disproportionality of testamentary treatment in itself indicates some essential error in the testamentary process which requires amelioration under the Family Provision Act so as to achieve approximate equality between a testator's children. 58 That is not, of course, a position from which one can begin in this, or in any other case under the family provision legislation. It is useful to remind oneself of the parable of the labourers in the vineyard. Those who worked the whole day complained, not because their agreed wage was inadequate, but because those who worked only part of the day received the same wage and were therefore treated more generously. The moral of the parable is: what is fair and adequate to start with does not become unfair and inadequate just because someone else has been treated differently. 59 The first question in the two stage process discussed in Singer v Berghouse (No 2) (1994) 181 CLR 201, and Vigolo v Bostin (2005) 221 CLR 191 is whether the testamentary provision made for the claimant is "inadequate" for his or her "proper maintenance and advancement in life". Of course, the answer to that question is not found by examining the financial circumstances of the claimant and nothing more. It: "… 'calls for an assessment of whether the provision (if any) made was inadequate for 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 .' (Emphasis added.)

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64 Marion is in secure, well paid employment and she is in good health. She and Robert own their own home. Their income is more than comfortably sufficient for their own personal needs. However, it is their "need" to provide handsomely for their children's future that they put at the forefront of their claim. Their children are not "eligible persons" having a claim on the testator's bounty in their own right. 65 Marion submits that provision out of the testator's estate to meet her desire to provide well for her children's future is, in the context of a large estate, properly described as for her "advancement in life". 66 In Mayfield v Lloyd-Williams [2004] NSWSC 419, at [86], White J noted: "If the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant. (Re Buckland Deceased [1966] VR 404 at 412; Hughes v National Trustees Executors and Agency Co of Australasia Pty Ltd (1979) 143 CLR 134 at 147; Goodman v Windeyer (1980) 144 CLR 490 at 498 , 505). But s 7 does not permit orders to be made to provide for the support of third persons whom the applicant, however reasonably, wishes to support. ( Re Buckland Deceased at 412; Kleinig v Neal [1981] 2 NSWLR 532 at 537.)" 67 On appeal (Lloyd-Williams v Mayfield (2005) 63 NSWLR 1), Bryson JA (with whom the other Judges concurred) said in reference to this observation of White J, at [34]-[36]: "It should be observed that the passages in Re Buckland, deceased [1966] VR 404 and Kleinig v Neal (No 2) [1981] 2 NSWLR 532 to which White J referred are not quite to the same effect as each other. In Re Buckland, deceased (at 412), Adam J said: '… Although one cannot but feel sympathy with the plaintiff in accepting the burden of making financial provision for her mother, I consider that the fact that she is doing so cannot properly enter into my consideration of what was adequate provision for the proper maintenance and support of the plaintiff herself. No authority has been cited to me suggesting this is so, and it would seem that to allow this circumstance to affect the matter would involve the making of provision out of the estate, albeit indirectly, for the maintenance of the testator's former wife under guise of providing maintenance for his child. It is the obligation of the testator towards his child for her maintenance which is in issue in these proceedings, and nothing else. This conclusion does not, of course, mean that the circumstance of the daughter of the testator being burdened with providing for and maintaining her own infant children would be an irrelevant consideration. But the obligation of a parent to provide for his or her own infant children is one thing; the burden voluntarily assumed of an adult child providing for her mother is quite another.'

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The view of Holland J appears to me to be wider than that of Adam J, as Holland J was prepared to regard it as relevant, although not as increasing the amount that would otherwise be ordered, to know the applicant's family financial circumstances including financial dependence of his mother upon him. Neither decision relates to s 7 of the Family Provision Act ." 68 Notwithstanding these observations, Bryson JA did not dissent from the view expressed by White J that "if the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant". I am content to adopt that statement of principle as correct, with a little amplification. 69 As Adams J intimated in Re Buckland, deceased ([1966] VR 404), a parent who is obliged, not only by moral duty and the bonds of parenthood but also by law, to provide for a dependant infant child thereby has financial obligations which directly affect the parent himself or herself. Those financial obligations may therefore be properly taken into account in determining what is adequate for the parent's own proper maintenance or advancement. 70 But the situation is different when the applicant parent ceases to have legal obligations or clear moral obligations to support the child, as when the child has finished school, is adult and able bodied and able to make his or her own way in life. In such a case, the parent's commendable wish to assist the child further in life is not a matter of the parent's own maintenance or advancement in life for the purposes of the Family Provision Act. As White J said: "… s 7 does not permit orders to be made to provide for the support of third persons whom the applicant, however reasonably, wishes to support." 71 There may be cases in which a parent's need to provide for an adult child, although not also amounting to a legal obligation, nevertheless arises from an imperative moral obligation and does directly affect the parent's own need for maintenance. For example, a parent who is the sole carer of a physically or mentally incapacitated adult child may be unable to work so as to provide sufficiently for his or her own necessities of life as well as for those of the child. As Holland J said in Kleinig v Neal (No 2) ([1981] 2 NSWLR 532), that would be a family circumstance which the Court could take into account in assessing a claimant's need for his or her own maintenance. 72 Marion has a shared parental obligation to provide for Brighid's education until she turns eighteen years of age and leaves school. The remaining school fees are estimated at $37,500. Marion has no parental obligation to provide for Brighid's advancement in life as an adult in a way which can be characterised as Marion's own need for her own maintenance and advancement in life for the purposes of a claim under the Family Provision Act. These same considerations apply to Marion's wishes for Joseph. His school fees are estimated to amount to $96,000. 73 Accordingly, the only "needs" or "obligations" or "wishes" of Marion in respect of her children's advancement in life which I should take into account in assessing whether further provision should be made for her out of the estate are school fees amounting to $133,500. If Marion uses what she is already to receive from the estate to pay school fees, she would have some $336,500 left for other purposes, such as home renovations, holidays, and improvements to the family business or contributions to her superannuation fund. All of that amount is available for discretionary expenditure because Marion already has sufficient to provide comfortably for herself. In other words, even if Marion alone bears the school fees, she will have out of the estate some "jam or cheese" left over to spend as she wishes. Should she have more? 74 In answering this question, I take into account the following considerations:

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77 Rosemary is in good health, she receives a substantial income and she owns her own home. Her nett assets, including superannuation, are almost $1.5M. Alan N is also in receipt of a substantial income. 78 Like Marion, Rosemary puts her need to provide for her children at the forefront of her claim. By far the greater part of the expenses relate to supporting her children in their sporting careers while at school and as adults. While Rosemary's desire to encourage her children's sporting activities as adults at the highest possible competitive level is commendable, it does not, in my opinion, reflect directly on Rosemary's own need for maintenance and advancement in life for the purposes of a claim under s 7. 79 Timothy is now nineteen years old. He is at university and is enrolled in an Elite Athlete Programme. The cost of advancing Timothy's sporting and academic career, estimated at $289,000, cannot be taken into account in making further provision for Rosemary out of the estate. 80 Elizabeth is now seventeen years of age. She will have finished school in about a year. The vast bulk of the expense of Elizabeth's sporting activities and education, estimated at $329,000, relates to expenses which will be incurred after Elizabeth has left school and has attained the age of eighteen years. Those expenses cannot properly be taken into account for the purpose of increasing Rosemary's provision out of the estate. 81 Alexandria is now thirteen years of age. She will leave school in five years' time. The bulk of the expense of Alexandria's sporting activities and education, estimated at $283,000, relates to expenses which will be incurred after Alexandria has left school and attained the age of eighteen years. They cannot be taken into account in Rosemary's claim. 82 Emily is now twelve years of age so that she has another six years of school. A large part of the expenses of Emily' sporting activities and education, estimated at $301,000, relates to expenses which will be incurred after Emily leaves school and attains the age of eighteen years. Likewise, they cannot be taken into account in Rosemary's claim. 83 Elizabeth, Alexandria and Emily are at State schools. In my opinion, the sum of $470,000 provided for Rosemary out of the estate will be amply sufficient to provide for the children's schooling and maintenance until they are eighteen years of age, with a considerable surplus left for discretionary expenditure by Rosemary on promoting all her children's sporting careers or providing further contributions to her superannuation. It is to be noted that of Rosemary's "needs", $1.2M is allocated towards her children's advancement in life - most of it after they have left school - and she says because she wishes to spend this amount on her children, she needs about $1M from the estate to provide for her retirement. In my opinion, it is not legitimate to advance Rosemary's claim for her own maintenance and advancement by "appropriating" income and resources available to her for that purpose for the discretionary benefit of her adult children, who have no claim on the estate, and then asserting that she has been left with inadequate provision. 84 Bearing in mind the same considerations to which I have referred in paragraph 74 (substituting "Rosemary" for "Marion" as appropriate), I am not satisfied that the testator's provision of $470,000 out of the estate for Rosemary is inadequate for her proper maintenance and advancement in life. Orders

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