Gapes v Haeberle & Haeberle [2003] VSC 461

Supreme Court of Victoria|2003-10-21|Before: NATHAN J.

PART IV of the ADMINISTRATION AND PROBATE ACT 1958 - Rule 54.02 Supreme Court (General Civil Procedure) Rules 1996 - Sibling needs - Testatrix's disposition of equal distribution upheld.

1 Two matters are before me. The first and most substantial is a claim pursuant to Part 1V of the 1958, wherein Denise Joy Gapes is the plaintiff. These proceedings initiate a claim against the defendants for a share greater than that given to her pursuant to her mother's will. The defendants, Helen Catherine Haeberle and Ronald Lester Haeberle, are husband and wife - Helen being also a daughter of the deceased. They are the executors.

2 The second proceeding was issued by the defendants against Gapes, pursuant to Rule 54 of this court. It is an originating summons seeking the sale of the home of the deceased her only real asset. Further explanation is needed as to the relationship of the parties.

3 Veronica Mary Guy, the deceased born in 1921, she had three children. The eldest, Brian John Guy - Brian, was born in 1943. The second and first-named defendant, Helen, was born in 1946, and the third was the plaintiff, Denise Joy Gapes - Denise, born in 1948. By a series of wills, the history of which is not now relevant, the deceased devised her entire estate and bequeathed all her property to her three children in equal shares.

4 The deceased died on June 5 2001. Her death was a prolonged and ghastly event as she suffered myeloma and a series of illnesses. During the period of her illness there has been a contest between the parties as to the extent of care given to their mother by each of them.

5 The estate has a value of $200,000 and consists almost in its entirety of a pleasant Victorian timber home in Warrnambool, badly disfigured by some modern renovations. There are small amounts of cash. The testator's family maintenance proceedings by Denise were issued as proceeding No.4 of 2002 and predated the issue of the originating summons. However, service of the Part 1V matter was not effected until after service of the originating summons. That is the claim by the executors, Helen and her husband Ronald, to have the subject property sold and the proceeds distributed in accordance with the will.

6 I come now to the terms of the Part 1V application. Section 91 of the Administration and Probate Act was significantly amended by s.55 of the Wills Act 1997. The section has been subject to judicial examination in this State and I shall refer to those authorities in a moment. I return to recite the relevant legislative provisions, and as edited, s.91 referring to the power of the court to make maintenance orders, recites as follows:

"The court may order that provision be made out of the estate of a deceased person for the proper maintenance support of a person for whom and by the deceased had responsibility to make provision."

"The court must make an order under this sub-section unless it is of the opinion that the distribution of the estate of the deceased person was affected by"

8 And a number of considerations are therein recited. Sub-section 4 is the pertinent section, and reads:

"The court in determining whether or not the deceased responsibility to make provision, and Part B, whether or not the distribution of the estate of the deceased person is affected by the deceased's will."

9 There follows provisions which are irrelevant here. And Part C:

"The amount of provision the court may order the person, then the court must have regard to".

10 And a number of criteria are set out in Parts E through to P. The operation of this section was examined by Harper J in the matter of Schmidt v Watkins.[1] I refer to that judgment, particularly paragraphs 8 and 12. I recite His Honour's view as in paragraph 8:

"It seems clear that as a matter of the amendments affected to the Administration & Probate Act by the Wills Act, the two stage process now has a third. One that must be traversed if the deceased died on Or after 20 July 1998. The court must, in those Cases, and as its initial focus of the enquiry, decide whether or not the claimant falls within the class of persons for whom the deceased had responsibility to make adequate provision for his or her proper maintenance and support." "Since the court has no jurisdiction to make an order in favour or a person for whom the deceased did not have this responsibility, the court's initial focus also falls within what is, for these purposes, the definition of a jurisdictional question. It nevertheless seems to me that the touchstone remains, that of the wise and just testator, and the court must respect freedom of testation except in those cases where the freedom has been abused by a failure by the deceased to fulfil his or her responsibility to such claimant".

11 His Honour, in paragraph 7, after having had recourse to the parliamentary debates, said this in relation to s.91(4):

"This sub-section provides in effect, that in deciding each stage of what is now the three stage process, the court must have regard to a set of factors common to all three. Section 91(4) provides in other words that in determining the questions:

(A) Whether or not the deceased had the relevant responsibility - this of course being the first stage.

(B) Whether or not the distribution of his or her estate made that provision to which the legislation is directed - the second stage.

The court must have regard to the factors listed in the sub-section beginning in paragraph E - that is the various criteria to which I have already referred."

12 The section received further consideration by Ashley J in the matter of Penn v Richards[2] and I refer to paragraph 33 of His Honour's judgment, as it has some particular relevance to this case, wherein the plaintiff claims she is entitled to a greater share of her mother's bounty than her two siblings, on the ground that she needs to have the security of a home, in effect a nest egg, so that her wellbeing is safeguarded for the remainder of her life.

13 In respect to a similar proposition, His Honour dealt with the point and said:

"The main point of dispute between the parties was whether the plaintiff should have further provision by way of a nest egg. I consider that she should, but of a much lesser sum than her counsel proposed. The overall outcome of the court's intervention is my intention to make adequate provision for the plaintiff's proper maintenance and support. That is not to be viewed in isolation from the competing interests of others with a claim to the deceased's bounty. In that connection, as I have said, I consider that the defendant and her husband have a claim of substance. There is no suggestion that they assisted the deceased in hope of reward, and there is good reason why the court should preserve, as far as it can in all the circumstances, the deceased's intention in respect of that."

And His Honour then went on to deal with peculiar facts of that case.

14 Further consideration was given to this section by Balmford J in the matter of Suffern v Karen Ann Suffern Noble[3], in particular paragraphs 55 and 59. Under the heading "Adequate provision for proper maintenance and support" Her Honour followed the approach of Justice Smith in the matter of Schmidt, and said this:

"The second question then arises whether the distribution of the estate of the deceased affected by his will does not make adequate provision for the proper maintenance and support of the plaintiff. There is much authority as to the duty of the wise and just testator towards his widow",

15 And various cases were referred to by counsel, which Her Honour also referred to. Her Honour, in respect of a widow's claim, said this:

"It seems to me that as a broad general rule and in the absence of special circumstances, the duty of a testator to his widow is to the extent to which his assets permit him to do so, to ensure that she is secure in her home, to ensure that she has an income sufficient to let her to live in the style to which she is accustomed and to provide her with a fund to enable her to meet any unforeseen contingencies."

16 This case may be said to be of some comfort to the plaintiff insofar as it marries together the concept of a nest egg and the security of a house. However, it is sufficiently different in terms of its circumstances to the one before me. And I shall come to those circumstances now.

17 All three children had an indifferent education and have prospered to varying degrees. Denise married in 1971, separated from her husband 11 years later, and was divorced two years after that. She received a property settlement as the result of that divorce, a sum in 1986 of some $45,000, which on current values can be multiplied by a factor of a multiple of at least two or three. Later, she commenced a relationship with a man, Thomas McCarthy, who unfortunately died very shortly after their liaison commenced, but by whom she had a child Anna.

18 McCarthy's estate was left to his children. Anna made a part IV claim which was settled in her favour in the sum of some $70,000. That settlement was approved by this court.

19 After her father's death Denise and Anna purchased a property at Eddington Street, Warrnambool. One half coming from Denise's funds and the other half of the purchase price from the funds held in trust by the Senior Master of this court for Anna. Under the terms of an agreement between the Senior Master and Denise the Eddington Street property must be sold when Anna attains the age of 18 and the proceeds divided equally.

20 I turn now to the defendant Helen. She is married to a retired teacher Ronald. They have two children, their children are adult. They have a home in Torquay which seems to be subject to a mortgage. Her husband takes such part time work as is available to him. Their circumstances are modest. They do not appear to have a nest egg. They live in circumstances which may be described as comfortable. As a matter of fact, I accept the evidence of Helen and also that of her husband Ronald, that they were caring and attentive to their mother during the period of her final illness. Something which Denise was not.

21 The other beneficiary under the will is the son Brian. His circumstances are straitened, if not dire. His marriage of some decades has broken down and as a result of what appears to be a separation agreement he is indebted to his wife in the sum of $100,000 and there are other debts in relation to his home. On any view of his circumstances, he is in a far more perilous position that the plaintiff. He is aged 60, he is approaching retirement, he has no prospects of gaining a loan. Unlike the plaintiff he has no prospects of money in his hand should his house be sold as she has. His circumstances are far less rosy than those of the plaintiff.

22 I return to the facts surrounding this case. On 30 October 2001 Probate of the will of the deceased was granted to the defendants. This will, which replaced one made a day earlier, maintained the tripartite division of the deceased's property but did not contain a trust in favour of the executors enabling them to sell the home of the deceased. That lapse resulted in the Order 54 proceedings to which I have referred, and I interpolate. As the deceased's home was the only asset available for distribution between the three children, it was proper for the executors to initiate proceedings for its sale, otherwise there would simply have been no funds for distribution to anybody. That position remains to this day. As I have indicated, the Part IV proceeding was instituted in April of 2002, followed by the Order 54 proceedings in December of that year, hence the matter arrived before me.

23 I have been indebted to Counsel for their submissions. Turning to them, I can say that Mr Baker for Denise has produced every conceivable argument, and some which are not, in favour of the plaintiff. He has said, and I shall deal with his points seriatim, that the plaintiff has an illness of a psychological nature which will prevent her from working. However she is in receipt of Government funds, as is her daughter. So that her circumstances, although straitened, are certainly not dire and so long as she has either the supporting parents' benefit or a disability benefit, she will be assured of income. She also has the roof over her head at least until Anna attains the age of 18. Should Anna continue with further studies, as one might hope she will, then indeed her accommodation seems to be assured at least in the moderate short term. In any event, should the Eddington Street property be sold, she can look forward to receiving half its value which is estimated at approximately $100,000.

24 Mr Baker has contended that equality of distribution of a deceased's estate may not be an equitable and so much is the law. However. When I look at the competing equities of the plaintiff and the defendants, I find them to be in an approximately equal position so far as the morality of a claim upon their mother's estate.

25 Mr Baker said the deceased would not have known of the accommodation difficulties the plaintiff might sustain in four years time when Anna attains the age of 18. Accordingly had she been so apprised, she would have made a greater distribution in favour of Denise than that to her other children. I cannot accept that argument. I accept the proposition that her mother might not have known the details of the trust arrangement between the Senior Master, but I also accept that she would have been aware of the fact that Denise had received a property settlement as a result of her divorce. She was entitled to assume that there were funds available as a result of that matrimonial event. I consider that the deceased did that which most parents find no difficulty in doing, and that is divide her bounty between her children equally despite what might have been their varying contributions to her maintenance, love and support during the period of her fatal illness.

26 Mr Baker contended that the plaintiff, by virtue of having a dependant child, was in a distinguishable position from that of her siblings. As I have already observed, Anna obtained a share of her deceased father's bounty. Anna has funds in the trust account held by the Senior Master, and also a share of the Eddington Street property. In these circumstances where all four persons involved, the deceased and the three siblings, are all living or lived in very modest financial circumstances indeed, there is no reason in equity or justice, in my view, to disturb the distribution on the basis of Anna's infancy.

27 I come to the defendants' submissions. I am advised that the earlier will, which allowed for a trust for sale but the same distribution, is irrelevant to these proceedings, and I accept that submission. It has been put that when I examine the criteria set out in sub-s.4 the distribution equally between the children does address the twelve factors therein cited.

28 The first one, any family relationship. Well quite plainly there was a relationship between the plaintiff and the deceased. The obligations, the next criteria, address. Any obligations or responsibilities of the deceased to the applicant. I have dealt with these matters. I cannot accept the contention the deceased had any moral or social responsibilities to the plaintiff any greater than she had to her other two children. If in fact there was a hierarchy of obligation it was to Brian first, to Denise, the plaintiff, second, and to her daughter Helen third, but that hierarchy is of a very plastic nature in this case and not sufficient to disturb the wishes of the plaintiff.

29 Part (e), the size and nature of the estate. I have referred to these matters. Part (h), the financial resources of the parties for the foreseeable future. I have already dealt with these matters. They are all in approximately the same circumstances. Part (i), the physical or intellectual disabilities of the applicant. I have already referred to these matters. Part (j), the age of the applicant. I have already referred to the fact that she is the youngest of the children and therefore the most likely to gain meaningful employment should she be able to do so in the future.

30 Any contribution of the applicant to the building up of the estate. There is no evidence on this matter and it appears that none of them made any contribution. Any benefits given previously, are now relevant in this case. The next part, whether the applicant was being maintained by the deceased. This was not so, there was no question of dependency. Part (n), the liability of any other person to maintain the applicant. I have observed the applicant is already being cared for by the State, that will continue so long as her dependency or inability to earn is maintained. Part (m), the character and conduct of the applicant and any other person. It cannot be said Denise extended herself, to provide her mother with support during the months of her final illness. I am quite satisfied that the support and nurture the mother received during those months came from Helen, Ron and Brian.

31 Therefore, returning to the threefold process which I am directed to observe. It is plain that the plaintiff is a person who has a claim on her mother's bounty. It is plain that the plaintiff, Denise, wishes to displace her two siblings in order to obtain a greater share than them from her mother's estate. He grounds for doing so are, in my view, tenuous to the point of flimsiness. They are barely sustainable as a matter of argument before this court.

32 The second step, looking at the moral obligation. I am satisfied that the testator certainly did look and have regard to those obligations. She decided in her wisdom to maintain equality of distribution between her three children as two wills made in two days attest. I am not satisfied the plaintiff has advanced any cogent arguments as would displace the stated intention of the testator, nor has she established the responsibility due to her was not discharged under the terms of the deceased's will. I am satisfied that in an estate of this kind, which is very small, that the ultimate equal distribution of some $70,000 is sufficient to give them some comfort for the future. But even if the entire $200,000 were to go to the applicant it would not provide the nest egg to which she says she is entitled. She would in effect, as is sought by the orders put in draft form before me, entirely cut out her brother and sister in her own favour, thereby denying them any legitimacy of any claim of their mother's bounty. Therefore there is no need for the third stage. It is quite apparent that the plaintiff has not succeeded. Accordingly she is not entitled to disturb the distribution pronounced in the will. The Part 1V application will be dismissed.

33 I turn to the originating summons. The position before Mr Justice Cummins who heard this motion at first instance, remains. There is no trust for the sale of the property and the proper venue for obtaining orders to sell is this court. I shall pronounce such an order and I shall direct that the net proceeds thereof be divided in accordance with the terms of the will.

34 There remains one minor matter. I had, at an earlier time in these proceedings, cajoled the parties into permitting the plaintiff to retain possession of the motor car. This is a 15 year old Corolla - I suspect of very marginal value. I do not expect the parties to depart from their intention to give the vehicle to the plaintiff. She therefore emerges from these proceedings with a slightly greater share of her mother's estate than that to which she would be entitled under the will, but that is simply because the defendants have ceded their interest in that motor vehicle to her.

35 There remains the issue of costs. The plaintiff having failed entirely in the Part 4 proceedings, I propose to order that the executor's costs be paid out of her share of the estate but I will hear the parties as to that matter. As to the originating motion, that has been successful and I will hear the parties as to those costs, and costs generally.

[1] Unreported, [2002] VSC 273.

Supreme Court (General Civil Procedure) Rules 1996

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