Coller v Coller & Ors [1999] VSCA 11

5. The estate comprised his home, valued by agreement at $155,000, investments worth about $221,000 and furniture and personal effects worth about $3,000.

8. The testator had fought in the second world war and as a result his health, physical and mental, had been very seriously and permanently affected and he had become dependent on alcohol and prescription drugs.

11. He married in 1949. His wife finally left him in about 1980. He died in 1997, survived by two sons, one of whom was made his executor, and three daughters. By his will he left a legacy of $10,000 to his daughter Maureen Marsden, now Maureen Suminar; legacies of $2,000 to each of his grandchildren that survived him; his home in Essendon to Maureen Marsden; and his residue to his children equally as tenants in common.

14. After a five day hearing the judge reserved his decision and in due course gave careful and elaborate reasons for his conclusion that the distribution of the testator's estate effected by his will did not make adequate provision for the proper maintenance and support of the plaintiff.

17. The judge ordered that provision be made for the plaintiff out of her husband's estate by ordering that the deceased's home in Essendon be devised to her and that that devise operate in lieu of the devise of the home to Maureen Marsden and that a legacy of $35,000 be paid to the plaintiff.

20. Against that order the executor has appealed. There is a cross-appeal by the plaintiff against the order in so far as it awards her costs only on a party/party basis. Below costs as between solicitor and client were sought on behalf of the plaintiff, not on the basis that this was the usual and appropriate order on applications of this kind, but on the basis (which the judge rejected) that the defendant executor had acted unreasonably in resisting the plaintiff's claim.

23. The plaintiff had to obtain injunctions in this proceeding in consequence of the improper making of distributions of the estate by the executor, who already had notice of the plaintiff's claim. As a result of these applications for injunctions the remaining four children were joined as additional defendants, although I do not think they are shown as such in the authenticated order under appeal. At the hearing of the application under Part IV counsel appeared only for the executor, not for any of the other children, although the plaintiff was, of course, represented by counsel.

26. The careful and detailed reasons of the primary judge set out with particularity the facts, and although some of his Honour's findings are challenged, the reasons may in general be accepted as providing a very helpful and detailed summary of the facts and as rendering it unnecessary for us to embark upon the task of providing one.

29. The written outline of submissions of each party in this Court is detailed and helpful, and we have each considered the outlines and found them, I think I may say, of great assistance.

32. The judge's conclusion was that the plaintiff should have been provided by the testator with a sum to give her the equivalent of a lump sum of $120,000 to purchase a home and a further $70,000 to add to the superannuation of about $31,000 which she received, so as to give her a capital sum of about $100,000. To achieve that his Honour considered that a gift of the house in Essendon and a legacy of $35,000 would have been required. His Honour therefore made the order which I have mentioned.

35. The proposal put forward by the plaintiff as one which the testator should have put her in a position to be able to effectuate was that she would live not in the former matrimonial home, but in a house in Alexandra which she would buy, Alexandra being where she had lived for a good many years both before and after the separation from the testator.

38. Argument on the appeal has been considerably shortened because of the detail in the written submissions, and because near the outset of the hearing we discussed with counsel certain particular respects on which it was arguable the judge had erred.

41. Mr Scarfo for the appellant did not press his contention that the judge was manifestly wrong in determining what is often called the "jurisdictional question" in favour of the plaintiff. He did argue that the judge's order for further provision was vitiated by specific errors, and that in any event the result arrived at was an entirely erroneous estimate of what was adequate provision for the proper maintenance and support of the plaintiff in all the circumstances.

44. The possible specific errors on which attention was concentrated in argument were as follows:

47. The first related to what the judge said in paragraph 78 of his reasons about the burden of the provision under the heading "The Burden of the Provision":

"I have given consideration to the question whether any of the other legacies in the will or the share of the residue should be required to bear the burden of the pecuniary legacy. There is no evidence before me that would enable a view to be formed about whether the legacies to the grandchildren should bear any of the burden. Further, they have not been separately represented and they include infants among their number. They cannot be shown to have opposed the application. On the other hand, the adult children have been joined and have had the opportunity to present a case that their interests should be given priority over the grandchildren or each other and have chosen not to do so. As to the legacy to Maureen, it should be allowed to stand in view of her special claim on the deceased's bounty. It seems to me that on balance the other legacies should be permitted to operate and the proposed legacy to the plaintiff should be borne by the residue."

51. The question here is whether the judge gave consideration or adequate consideration to the burden of the provision as regards the substituted devise. It was not intended by his Honour that the plaintiff should have the house in Essendon in specie, as it were, as a home. His Honour thought that the wise and just testator would have given her the house by way of purely financial provision to provide the price of a home to be bought elsewhere, together with a cash surplus to be augmented by a legacy. In other words, the proposal was that an additional $155,000 in cash, less the cost of realization of the house, should be provided to the widow. This $155,000 was by far the major part of the provision ordered. If one makes some impressionistic allowance for the cost of realization, one could say that a sum of the order of $150,000 was being provided from the house out of a total of some $185,000. I do not think the judge gave consideration to the question whether the burden of that additional provision, which if nothing else was to be done was to be borne by Maureen alone, should be borne by her. He should have considered whether provision should be made from some other assets or, if it was to be made from the house, Maureen should have been compensated by the testator in some way, so to speak.

54. The second possible specific error relates to what was said in paragraph 77 of the reasons, where his Honour said this:

"It seems to me that, looking at the assets available, a just and wise testator would have dealt with the competing claims by devising the property in Essendon to her and providing her with a sum from the estate to give her the equivalent of a lump sum of $120,000 to purchase a home and a further $70,000 to add to the superannuation and thus give her a capital amount of approximately $100,000. To achieve that a gift of the house at Essendon and a legacy of $35,000 would have been required. This would have left the children with between $25,000 and $30,000 each from the residue, assuming no more than ordinary costs and expenses associated with the administration of the estate."

58. We have heard argument on whether the judge's arithmetic and other calculations which might be made show that, notwithstanding what is said in this paragraph, his Honour did treat the estate available for an order for further provision as an estate depleted by the costs of the proceedings. To me the natural meaning of the concluding words of paragraph 77, "assuming no more than ordinary costs and expenses associated with the administration of the estate", is that his Honour is making an order upon the basis that the estate is not to be taken as depleted by the costs of the proceedings.

61. Initially it was argued by Mr Newton for the first-named respondent that the judge had ignored the costs of the proceedings in looking at the available estate and had done so advisedly on the basis that that was appropriate because of the unreasonableness of the opposition to the plaintiff's claim. I do not regard that as a satisfactory explanation of the judge's view. The judge accepted (when he was asked for solicitor and client costs, and it was put, in effect, that this was a case where it was quite unreasonable for the executor to oppose) that there was nothing out of the ordinary about the case in that regard. Moreover, the children, other than the executor, although joined as parties when the injunction applications were made, did not appear. As I have said, counsel announced an appearance only for the son who was executor. I myself would regard this second error as established, but my view of the outcome of this case would be unaffected if I were wrong on that.

64. In the third place I think his Honour should be said to have erred in allowing $120,000 as the gross cost of buying the home in Alexandra which he thought the plaintiff should have been placed in a position to buy. His Honour said that, in effect, he accepted the submission that she should have been put in a position to buy a house at a cost of 90 to $100,000 and that this "in turn would have required funding to cover stamp duty and other expenses associated with the purchase of the house and thus a figure of about $120,000" was required. That was the argument of counsel, but I think his Honour is shown to have accepted it.

67. Counsel did not dispute the suggestion put from the Bench in this Court that on a purchase at about $95,000 stamp duty and legal costs would have amounted to a sum in the region of $3,000. It seems to me that $120,000 is a significant over-assessment. The amount, it is true, is relatively small, but unhappily all the amounts in this case are relatively small and relatively small errors may therefore achieve greater significance.

70. In the fourth place there is an even smaller matter. The evidence was, and it is common ground this was the fact, that there were 11 grandchildren not 9, each of whom was to receive a legacy of $2,000. This error is too small to be regarded as material in itself, but it does not stand alone. All the errors are in favour of the plaintiff and I think they should be cumulated.

73. The most significant point by far is, in my view, the failure to consider how the burden of about four fifths of the provision should be borne. In my view this error shows that the discretion has miscarried as a whole. It has not only miscarried as regards directing the incidence of the burden, it has also miscarried as regards the amount of the burden, that is to say the extent of the further provision.

76. It is clear that the daughter Maureen had, as of course the testator recognized by his own will, a strong moral claim. She and her family were in a very poor financial position at the relevant time, and - this I regard as of more importance - she had a very considerable moral claim upon the testator by reason of the care which she had taken of him during the period after he and his wife separated.

79. Since we are called upon to re-exercise the discretion by reason of specific error, it is unnecessary to consider the alternative argument that the further provision ordered was an entirely erroneous estimate of what was adequate provision. I need not summarize the evidence or findings with regard to the position and claim of the daughter Maureen. In my view too much weight was given to the claim of the widow, high though it was, in relation to that of her daughter Maureen.

82. I consider that adequate provision for the proper maintenance and support of the plaintiff would be made by the devise to her of the house at Essendon unaccompanied by a legacy of $35,000 or any other sum. If she receives, according to the agreed valuation of $155,000, a sum in the region of $150,000 after realizing the house, she will be able to buy a house at a gross cost of approximately $100,000 and have an additional $50,000, and that, together with the house and her other assets and income, which I need not summarize, is, in my view, adequate in all the circumstances, including the competing claims of others.

85. I would give Maureen a legacy of $40,000 in lieu of the existing legacy and in lieu of her share of residue. That, I think, is the appropriate adjustment that should have been made by the testator if he had made the provision which I now propose. On this basis the legacies to the grandchildren would stand.

88. I would dismiss the cross-appeal, but I would give the plaintiff her costs on a solicitor/client basis below in the course of remaking the order made below in disposing of the appeal proper.

93. I agree in the disposition proposed by the learned presiding judge of this appeal and cross-appeal. His Honour has mentioned four points at which might be said the learned trial judge fell into specific error. For myself, and with respect, I prefer to rest on one in particular without expressing an opinion on the materiality of the others.

96. That one concerns the burden of the provision to be made for the plaintiff widow, now the first-named respondent. In my view it is apparent that his Honour did not give proper consideration to the burden of that provision as it fell upon Maureen Marsden, having regard in particular to her special position as a claimant on the bounty of the testator.

99. In my view that error tainted the exercise of his Honour's discretion as to the amount to be provided by way of substituted legacies.

102. Subject to the foregoing I agree with the judgment that has just been delivered.

106. I also agree with the orders proposed. In my view, for the reasons given by the learned presiding judge, the learned trial judge misdirected himself in relation to the burden of the provision as proposed by him in as much it effected the entitlements of Maureen Marsden to the estate, bearing in mind her moral claim on it.

111. Subject to anything that counsel may say, we will make orders in accordance with these minutes.

2. Appellant's costs to be paid by first-named respondent.

(i) Set aside paragraph 1(b) thereof, whereby a legacy of $35,000 is to be paid to the plaintiff out of the estate, and in lieu thereof order as follows:

"(b) in place of the devise of the said property to Maureen Marsden and the legacy of $10,000 to her and all her interest in the residue of the estate, a legacy of $40,000 be paid to the said Maureen Marsden out of the estate."

(ii) By substituting in paragraph 2 thereof for the words "on a party/party basis" the words "as between solicitor and client".

125. The order made on the cross-appeal is that it is dismissed with no order as to costs.

128. As regards the appeal proper, there will be a certificate under s.13 of the Appeal Costs Act 1964 to the first-named respondent.