TRIGG ALEXANDER CRAIG as beneficiary of the estate of ELSJA HENRIETTA CHARLOTTE BUTCHER

ELSJA ELIZABETH CRAIG as beneficiary of the estate of ELSJA HENRIETTA CHARLOTTE BUTCHER

MANSON BASIL CRAIG as beneficiary of the estate of ELSJA HENRIETTA CHARLOTTE BUTCHER

Inheritance (Family and Dependants Provision) Act 1972 (WA) - Claim by adult son - Turns on own facts

Christie v Manera [2006] WASC 287

Curran v Duncan [2006] WASC 9

Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490

Hall v Wilson [2005] WASC 207

Kitson v Franks [2001] WASCA 134

Kleinig v Neal (No 2) [1981] 2 NSWLR 532

Martin v Public Trustee [2005] NSWSC 177

Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9

Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201

Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191

Vigolo v Wanda Mary Bostin and Leopoldo Vigolo (as Executors of the Will of Lino Vigolo (Dec)) [2001] WASC 335

Walton v Lehmann [2005] NSWSC 251

1 MASTER SANDERSON: This is the plaintiff's application brought under the Inheritance (Family and Dependants Provision) Act 1972 (WA) (the Act). The plaintiff is the son of the late Elsja Henrietta Charlotte Butcher (the deceased). The deceased died on 15 December 2005 aged 93. Her last will was made on 6 May 2003. The second defendant is the daughter of the deceased. The third, fourth and fifth defendants are all children of the second defendant.

2 By her will the deceased left a net estate of approximately $1,261,818.32. The principal asset of her estate was, and is, a house at Busselton. According to the statement of assets and liabilities sworn 4 October 2006, at the date of the deceased's death this house was valued at $1.2 million. All parties accepted that, for the purposes of this application, the value put on the house in the statement of assets and liabilities was to be taken as the value of the house as at the date of death of the deceased.

3 The statement of assets and liabilities showed that in addition to the house the deceased had moveable property totalling $61,818.32. Again there is no dispute between the parties that this was the value of the moveable estate as at the date of death of the deceased.

4 The deceased's husband had predeceased her. She was survived by the second defendant who was aged 69 at the date of death of the deceased and by the plaintiff who was aged 67 at the date of death of the deceased.

5 By her will the deceased bequeathed all her interest in the house to her three grandchildren. She bequeathed to the second defendant the contents of the house which, based upon the statement of assets and liabilities, had an estimated value of $10,000. She also left to the second defendant a legacy of some $20,000. The balance of the estate was to be paid to the plaintiff.

6 According to the evidence of the second defendant, the disposition to the plaintiff under the will was in the region of $20,000. However, having regard to the value of the moveable property and the legal costs of these proceedings, there will not be any balance remaining to be paid to the plaintiff. This was accepted by the defendants.

7 By written agreement dated 23 January 1999 the deceased made a loan to the plaintiff in the sum of $50,000. Interest was payable on the loan and was paid by the plaintiff to the deceased up until the time of the deceased's death. It was provided in the written agreement that if the deceased predeceased her son the debt was to be forgiven. So, independent of the will and pursuant to the written agreement, the plaintiff received a benefit of $50,000 upon the death of the deceased.

8 It is appropriate to begin by referring to the legal principles upon which a case such as this is to be determined. There was no dispute between the parties as to the applicable principles. What follows is largely taken from the written closing submissions filed on behalf of the plaintiff.

9 The first question to be considered when dealing with an application under the Act is whether the disposition of the estate by the deceased was not such as to make adequate provision for the proper maintenance, support, education or advancement in life of the plaintiff. This question is often referred to as the jurisdictional question. It is to be determined as at the date of death of the deceased. The question is strictly one of fact, notwithstanding that it involves the existence of value judgments: see Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201.

10 If the first question is answered in the affirmative, the court must exercise its discretion to make such decision as it sees fit, taking into account the relevant facts as they exist at the time of making the order. By contrast with the jurisdictional question, the decision made at the second stage does involve an exercise of discretion.

11 The approach to the jurisdictional question requires an assessment of whether the provision, if any, made by the testator was adequate for what, in all the circumstances, was the proper level of maintenance, support, education or advancement in life appropriate to the applicant. In determining this question regard must be had, among 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 on his bounty. The determination of the second stage, should it arise, involves similar considerations to those relevant to the jurisdictional question.

12 The amount to be provided is not to be measured solely by the need for maintenance, support or advancement. It would be so if the court were concerned merely with the adequacy of the provision made in the will. But the court has to consider what is 'proper'. The words 'adequate' and 'proper' are always relative. There are no fixed standards: see Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, 502.

13 'Proper' maintenance and support is relative to the applicant's age, sex, condition and mode of life, and situation generally. What is 'adequate' is relative not only to the applicant's needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate. Further, other demands upon the estate are to be considered and also to be considered is what the testator regarded as superior claims or preferable dispositions: see Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9, 19 (Dixon CJ). It is not, of course, the function of the court to rewrite the will.

14 The expressions 'moral claim' and 'moral duty' may be useful as a guide to the meaning of the statute. However, they are not to be construed as references to moral claims or duties founded upon considerations not contemplated by the Act. This was made plain in the High Court decision in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191. In fact, in that decision at least two judges (Gummow and Hayne JJ) were of the view that the convenience offered by reference to a 'moral claim' or 'moral duty' ought be forgone in favour of adherence to the statutory language.

15 In cases under the Act, the infinitely variable facts and circumstances of one case will provide little guidance to the resolution of other cases. The resolution of the respective claims must be determined by the application of the relevant principles to the facts of the particular case.

16 Current community standards are relevant to the assessment of adequacy of provision for an applicant. Current community standards do not call for treating an adult able-bodied male differently from other categories of applicants under the Act. When determining whether an applicant who is a mature child, whether a son or daughter, has been left without adequate maintenance it is not necessary to show some special need or some special claim. A claim by an adult under the Act does not involve the application of new or different criteria. This statement of principle has been applied on a number of cases including Kleinig v Neal (No 2) [1981] 2 NSWLR 532; Hall v Wilson [2005] WASC 207 [52]; and Curran v Duncan [2006] WASC 9 [10].

17 Whilst an able-bodied adult is generally able to look after themselves, as a person approaches or reaches retirement age their needs and therefore the obligation towards them increases. Persons approaching or having reached retirement age who are unable to earn, or who have limited means of earning an income other than by reliance on their accumulated capital, may have an increased call on the estate of the deceased: see Christie v Manera [2006] WASC 287 as an example of this principle in practice.

18 In his submissions, counsel for the plaintiff suggested that in the context of applications made by grandchildren it has been recognised that it may often be the case that grandchildren have a lesser claim on the estate then do the children of the deceased. With respect, this perhaps misstates the position slightly. Counsel, in making that submission, was presumably referring to the second stage of the process. In the first stage the focus is upon whether adequate provision had been made for the proper maintenance of the applicant. The fact that beneficiaries under the will are grandchildren would only be relevant when considering competing demands upon the estate. Moreover, it is difficult to see that the mere fact that the beneficiaries are grandchildren as opposed to children or indeed cousins would have particular relevance.

19 In Kitson v Franks [2001] WASCA 134, Parker J put the position in this way:

The issue of child or grandchild may also be a relevant consideration, if the jurisdictional test has been satisfied, when it comes to the exercise of discretion as to what provision should be made especially when there are competing claims and there is insufficient in the estate to satisfy all of them. As has been observed by King CJ the relative remoteness of the relationship of grandchildren is a factor to be taken into account in determining what would be adequate provision for their advancement in life; In the Estate of Puckridge (1978) 20 SASR 72 at 77. [71]

20 Against these legal principles then, the application by the plaintiff must be determined.

21 As I have said, as at the date of death of the deceased the plaintiff was 67 years of age. He has never married and has no dependants.

22 The plaintiff commenced working in the family business in 1954 when he left school aged 16. He remained with the business until 1967. During that time he learnt butchering and farming skills from his father. The family business comprised a 3,000 acre farm at Busselton and an abattoir and retail butcher shop (the Business). The Business ceased to operate in approximately 1981.

23 The plaintiff lived with his sister and his parents at the family home until he was 23. Then he moved to the family farm in Busselton where he lived and worked. He lived by himself on the farm. The farm was owned 1/3 by the plaintiff's father and 1/3 by his uncle. There seems to be a dispute whether the plaintiff and his sister each owned 1/9 or 1/12 of the Business. However that may be, they agree they owned equal shares. The balance was owned by another uncle.

24 The plaintiff's duties on the farm included animal husbandry; preparing show and sale cattle; and feeding, grooming and training the cattle. During this period he continued to work in the family butcher shop as a butcher. The plaintiff was responsible for the breeding program of the family's Poll Hereford stud cattle. There is no suggestion other than that the plaintiff was a good and competent manager of the farm and the Business and assisted in the prosperity of the Business.

25 In 1967 the plaintiff ceased work on the farm. He was away for about two years. He returned to the farm in 1969 and stayed until 1991. Accordingly, from the age of 16 - 43, save for a period of about two years, the plaintiff worked in the Business. For all but seven of those years he was the only person who lived and worked on the family farm at Busselton.

26 In 1984 the plaintiff left home permanently and moved to Sydney. He was initially self-employed as a cleaner and subsequently self-employed as an importer and distributor of shoe care products. He was carrying on that latter business at the time of the deceased's death.

27 The plaintiff described his relationship with his mother as a warm and loving one. He said that she was a good mother to him and he loved her very much. Although a good deal of evidence was led on this question it was really not an issue in the proceedings. The plaintiff's evidence was that he flew to Perth an average of twice a year to visit his mother. He says he made these trips for the 10 - 15 years before his mother died. The visits usually lasted 4 - 5 days. In the overall, the evidence made it plain that the plaintiff maintained contact with his mother and he had a warm, close and loving relationship with her. They spoke frequently. There was nothing in the evidence to suggest, nor was it submitted on behalf of the defendants, that there was any conduct on the part of the plaintiff which might disentitle him from making a claim.

28 The Business was operated through a family company, Butcher Brothers Busselton Pty Ltd. The family company was liquidated in 1981. At that time the assets comprised an unknown amount of cash at bank; an office building and retail shops with an approximate value of $100,000; 150 head of cattle with an approximate value of $100,000; Hannadal Farm with an approximate value of $300,000; and Estuary Farm with an approximate value of $75,000. The Estuary Farm was transferred to the plaintiff in 1981 when the company was liquidated. The plaintiff lived at Estuary Farm and worked there fulltime from mid-1981 until February 1984. He then sold the farm. His evidence was that he undertook considerable improvements on the farm. It was eventually sold for $230,000.

29 When the plaintiff moved to Sydney in 1984 he purchased a unit in Surrey Hills. The purchase price was approximately $127,000. As at the date of the death of the deceased the unit was valued at $490,000: see affidavit of Kris Ivan Cviker sworn 19 December 2007.

30 Since 1992 the plaintiff has derived his income from the importation of shoe polish from the United States of America. He is the sole Australian distributor for an American company known as Angelus Shoe Polish. That business has been conducted through a company Shoe Shines Australia Pty Ltd (Shoe Shines). The plaintiff is the sole director and shareholder of that company. There is no formal written agency agreement between Shoe Shines and Angelus Shoe Polish. Thus the agency agreement can be terminated at any time. The principal assets of the Shoe Shines are $20,000 worth of stock and a 1992 Mercedes station wagon. This vehicle is valued for insurance purposes at $17,000 and is shown in the financial statements of the company at $10,796. The business operates from the plaintiff's second bedroom of his flat and his garage.

31 In recent years the plaintiff's taxable income from his business and from receipt of an age pension has been (for the tax year ending 30 June): 2001 - $9,500; 2002 - nil; 2003 - $6,000; 2004 - $23,157; 2005 - $24,342; 2006 - $23,889; and 2007 - $21,065. For present purposes it is the June 2005 figure which is relevant. In that year, the part of the plaintiff's income attributable to the age pension was $9,637.

32 In addition the plaintiff has made superannuation payments from his business to a superannuation fund in the following amounts: 2001 - $5,000; 2002 - $5,000; 2003 - $10,000; 2004 - $21,000; 2005 - $20,000; 2006 - $40,500; 2007 - $40,000. That means, in effect, the plaintiff's total income for the 2005 year was $44,642. (That figure takes into account a small amount for profits retained in the business.)

33 Apart from his business the plaintiff had no other savings. His lifestyle was simple and he lived within his means. Essentially that meant that he was limited in what he could do - for instance, any extended travel or indeed overseas holidays were not within his means.

34 It was submitted on behalf of the plaintiff that as at the date of death of the deceased, both his earnings and assets were 'modest'. It was further submitted that by reason of his resources, age and health, the plaintiff's future earning capacity and his ability to acquire assets were both extremely limited. There was nothing to suggest that he would be able to develop the Shoe Shines business beyond the modest enterprise that it represented. While the business was generating a reasonable income, at least sufficient to allow him to enjoy a reasonable standard of living, it could not provide him with much beyond his living expenses. The fact that he was 67 years of age at the date of death of the deceased meant that as a normal product of aging, his capacity to carry on the business was necessarily limited. Although he enjoyed reasonable health, he did have a number of medical problems, the cost of which would not be entirely covered by medical insurance. To summarise, it was said that the plaintiff required more than he received from the deceased's estate for his proper maintenance and advancement in life.

35 It is convenient at this point to consider the position of each of the defendants. The second defendant does not challenge the distribution made to her under the will. It might be noted in passing that the deceased effectively, by the distribution in her will, jumped a generation. Neither the plaintiff nor the defendants made anything of this fact and I simply note it in passing.

36 The third defendant filed an affidavit sworn 4 December 2006. As at the date of death of the deceased, he worked part-time as a university lecturer. He had modest personal assets valued at just over $22,000. He earned approximately $55,000 per annum and it would seem that his income comfortably exceeded his outgoings. He did not own any real estate and lived in rented premises in Perth. He had superannuation worth approximately $30,000. There was nothing to suggest that as at the date of the death of the deceased, the third defendant had any particular needs. In fact, the evidence establishes that he has subsequently prospered.

37 The fourth defendant was 39 years of age at the date of death of the deceased. She swore an affidavit dated 22 November 2006 in opposition to the application. The fourth defendant graduated in 1999 from Curtin University with a Bachelor of Commerce majoring in Industrial Relations and Human Resource Management. At the date of the death of the deceased, she had two children aged 2 1/2 years and 6 months. She says that she earned three-fifths of $85,000 per annum on a part-time basis. She said she intended to return to the workforce full-time when her children were older. As at the date of swearing of the affidavit, her husband earned $60,000 per annum. He was employed as an operational manager with Westjet Air Ventures. Although the fourth defendant did not own any property as at the date of swearing her affidavit, she had, together with her husband, owned an apartment in Sydney at the date of the death of the deceased. That apartment was sold and settlement took place on 17 November 2006. The mortgage was paid out leaving the fourth defendant and her husband an amount of $106,000. It is reasonable to assume then that as at the date of the death of the deceased, her assets included an amount of around $100,000 which represented the equity in her then real estate holdings. She had some savings totalling approximately $5,000 and with her husband, owned a motor vehicle on which they had a $15,000 loan. As at the date of the death of the deceased, the fourth defendant and her husband and children were living in the deceased's property in Busselton. There is nothing to suggest that she was paying any rent while she was living in those premises.

38 While certainly not of substantial means, the fourth defendant as at the date of the death of the deceased did not have any particular unmet needs. She had some capital behind her in the form of real estate and both she and her husband were gainfully employed. There is no suggestion that she is anything other than able-bodied.

39 The fifth defendant swore an affidavit dated 30 November 2006 in opposition to the application. As at the date of death of the deceased, he was 36 years of age. After completing his school year 12 in 1986, he attained certificates in commercial cookery and business management. He now works as a landscape gardener. Beyond that, he provides scant information. As at the date of swearing his affidavit, he says that he earned $35,000 per annum and had monthly expenses of $2,800. He said he had a credit card debt of approximately $6,000. He lived in rented premises in Quindalup. He had no assets apart from a car and household effects which he valued at about $12,000.

40 It was submitted on behalf of the plaintiff that the evidence of the third, fourth and fifth defendants was inadequate. It was accepted on behalf of the plaintiff that a beneficiary under a will did not have to prove anything. However, it was said that if a beneficiary fails to lead adequate evidence about their circumstances, there is no evidence that can have the effect of reducing or extinguishing an order for provision established by the applicant. Reference was made to Walton v Lehmann [2005] NSWSC 251 [69] and Martin v Public Trustee [2005] NSWSC 177 [40]. In my view, the evidence led on behalf of these three defendants, while thin, is sufficient. It might have been different had any of these defendants attempted to establish that they had a claim for greater provision from the estate. That was not the basis upon which they put their case. They were content to accept that each of them was of modest means but that they were nonetheless able to provide for themselves. That being so their affidavit evidence was adequate.

41 In this area of the law, there is a difficulty about analysing too closely the facts of particular cases so as to provide a guide to the outcome of the action in hand. Of course the applicable law covers all cases. But the facts vary so significantly from one case to the next that parallels are difficult to draw. Nonetheless, the temptation to look at the Vigolo decision is irresistible (Vigolo v Wanda Mary Bostin and Leopoldo Vigolo (as Executors of the Will of Lino Vigolo (Dec)) [2001] WASC 335). In Vigolo, the plaintiff was an able-bodied adult male who was 40 years of age at the date of testator's death. McLure J (as her Honour then was) at first instance found as a fact that the plaintiff had been fully compensated for having built up the family assets of which he received a substantial share. Further, the plaintiff's claim was not based on financial need. That point was made by counsel for the plaintiff in the course of the trial. At the date of death of the testator, the testator's estate was worth $1,900,000. At the time of the testator's death the plaintiff and his wife had net assets of approximately $1,500,000. The four beneficiaries under the testator's will had net assets of approximately $249,125, $147,409, $159,414.42 (these three cases jointly held with their spouses) and $35,512 respectively. The plaintiff failed in his claim because having regard to all the facts and circumstances including, in particular, the comparative position of the plaintiff with his siblings, it was impossible to conclude that, the testator left the plaintiff without adequate provision for his proper maintenance and advancement. The plaintiff was in a position of comparative advantage to his siblings and substantially so.

42 In the course of her reasons, McLure J found that the plaintiff had worked hard on the family farm full-time for a significant period and had contributed to the building up of the assets. However, her Honour found that on dissolution of the family partnership, the plaintiff was adequately compensated for his efforts. That I think is the case here. It is not entirely clear from counsel for the plaintiff's written and oral submissions whether it was suggested that the efforts the plaintiff put into building up the assets of the family business which were eventually disposed of leaving the deceased with the property, was such as to warrant some provision being made out of the estate. If that submission was made it should be rejected. I find that the plaintiff was adequately compensated for the work that he did in the family business when the assets were divided.

43 One other point can be disposed of quite easily. The will of the deceased did make provision for the plaintiff. There is no question then that the jurisdictional requirement was satisfied by virtue of the fact that no provision was made from the estate.

44 Really, the plaintiff's case was put on the basis the plaintiff had a 'need' for provision from the estate. Dealing with this issue in Vigolo, McLure J said:

The use of the word 'need' is unfortunate because it carries the connotation that the purpose of the section is to provide a minimum financial safety net. That is clearly not so, as an examination of the facts of Bosch pointedly reveals. An illuminating discussion of the varying approaches taken by different courts in different times to what may amount to 'need' is contained in Bryson J's reasons in Gorton v Parks. On any view it is relative and goes beyond the bare necessities of life. Just where it stops in terms of a ceiling is unclear. It is in this context that the authorities relating to provision for adult claimants are to be understood. In this jurisdiction (unlike Victoria) an adult does not have to establish 'special' need: Bondelmonte v Blanckensee per Malcolm CJ at 309 relying on Gibbs J's reasons in Hughes. Further, 'advancement' is a word of wide import and no age limitation is to be implied when considering what is proper provision for a person's advancement in life. [127]

45 As the plaintiff in Vigolo eschewed any suggestion of financial need, the case was in the end decided upon whether there was a moral duty on the part of the testator to provide for the plaintiff. Her Honour decided that, in the circumstances no moral claim arose. In my view that is the position in this case. However the test of 'moral duty' might be framed, in my view there is nothing in the facts of this case that would justify an order being made. The plaintiff ran his own life for many years. While I accept that he had a close and affectionate relationship with his mother, he lived in New South Wales and contact was necessarily limited. The deceased provided the plaintiff with some financial accommodation and by effectively releasing the plaintiff from liability for the loan she made to him she avoided placing the plaintiff under undue financial stress. I can see no basis for any moral claim.

46 Nor am I satisfied that the plaintiff has made out that he required provision in the will of the deceased for his proper maintenance and advancement in life. The plaintiff had been independent of the deceased for many years and had set an independent course. While his business activities were not yielding a substantial income, it was adequate for his means. He owned his own home; he was in reasonable health; he had some superannuation assets behind him; and he intended to work on, not constrained by any requirements that he retire at a certain age. Against that of course must be balanced the factors so heavily relied upon by the plaintiff. He was 67 years of age at the date of the death of the deceased and he was not in perfect health. His business while providing an income did have a somewhat shaky foundation. The income derived from the business was modest and did not allow him to improve his living arrangements or undertake overseas travel. I also accept that he was conscious of providing for his old age and the need to make some form of arrangement for what once used to be called his 'declining years'.

47 I have weighed all these matters in the balance. I have also taken into account the fact that the beneficiaries, while of modest circumstances, had no particular needs. Furthermore, it is difficult to see how in the end there will not be a sale of the property and a distribution to each of the third, fourth and fifth defendants. If that were to occur and the plaintiff were to benefit equally with the other defendants, there would still be substantial benefits to be had by the defendants. This was a matter that was taken into account by McLure J in Vigolo but it did not sway her Honour's decision. Nor has it swayed mine.

48 I am satisfied on balance that the will of the deceased did make adequate provision for the plaintiff. I would dismiss this application. I will hear the parties as to costs.