Goold v Field

SUCCESSION - FAMILY PROVISION AND MAINTENANCE - JURISDICTION - BASIS AND EXTENT OF JURISDICTION - where application for provision for the applicant out of the estate of her deceased mother - where applicant was the only child of deceased mother - where applicant had been fostered and, despite her best attempts, had been unable to contact her mother - where no provision had been made for applicant in deceased's will - where the evidence disclosed no reason why the deceased made no provision for the applicant - where at the time of the deceased's death the applicant suffered substantial deprivation which could be expected to continue - whether the court has jurisdiction to make provision for the maintenance and support of the applicant out of the estate of the deceased

SUCCESSION - FAMILY PROVISION AND MAINTENANCE - FAILURE BY TESTATOR TO MAKE SUFFICIENT PROVISION FOR APPLICANT - WHETHER APPLICANT LEFT WITH INSUFFICIENT PROVISION - CLAIMS BY CHILDREN - where no provision had been made for applicant in testatrix's will - where assessment of applicant's need for proper maintenance and support, discernible at date of deceased's death, established substantial need including back problems jeopardizing her capacity to work, need for substantial dental work, a substantial sum required to bring her dwelling to average standard, lack of any other source of support, the frugal quality of her existence and a lack of fund or resource to act as a buffer against misfortune - whether applicant left with insufficient provision in testatrix's will

SUCCESSION - FAMILY PROVISION AND MAINTENANCE - PRINCIPLES UPON WHICH RELIEF GRANTED - QUANTUM - GENERAL PRINCIPLES - where applicant submitted the whole of the estate should go to her - where respondent pointed to case law suggesting a range of 40 to 60 percent of the available estate is appropriate where there are no competing claims - where applicant's claim upon the estate was of a compelling nature seen in the context of the vastly disproportionate "competing claims" of the existing beneficiaries - whether the court can "re-write" the will in these cases - whether provision could be made for applicant outside the 40 to 60 percent range

Succession Act 1981 (Qld), s 41(1), s 41(3)

Bondelmonte v Blanckensee [1989] WAR 305

Bosch v Perpetual Trustee Co (Ltd) [1938] AC 463

Burns v Milne [2000] NSWSC 351

Gardner, unreported, Supreme Court of Queensland, White J, OS No 475 of 1991, 29 March 1994

Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134

Perpetual Trustees Queensland Ltd v Mayne [1992] QCA 417, CA No 114 of 1992, 19 November 1992

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

de Groots Wills & Estate Lawyers for the respondent

[1] This is an application for an order under s 41(1) of the Succession Act 1981 (Qld) for provision for the applicant out of the estate of her deceased mother.

[2] The deceased Jean Clarke died on 5 November 2001, aged 59 years. At the time of her death, she was not married. She had married Harry Pickard, a ship's steward, in about 1961. The applicant was their only child, born on 16 January 1962. At her mother's death, the applicant was aged 39, and is now 43.

[3] The applicant's lack of a normal mother-daughter relationship with the deceased is particularly sad. While the applicant was but an infant, the deceased demanded, we do not know why, that her husband leave the marriage and take the applicant with him. That occurred. The deceased divorced Mr Pickard in the late 1970's. The deceased had had no contact with the applicant over the years, and had said that she did not wish to contact her. The deceased went so far as to object to her own mother's making contact with the applicant. After her own mother's death in 1992, the deceased's father, Douglas Clarke, contacted the applicant, and fortunately they have since enjoyed a normal, close family relationship.

[4] The applicant had wanted contact with her mother over the years. She lived in an orphanage and foster homes until she was 15 years of age. While at the orphanage she asked to see her mother, and that request was denied. When aged 15, the applicant saw her grandmother, and said she wanted to talk with her mother. Her grandmother responded that if she - the grandmother - were to give the applicant the contact details for her mother, the mother would cut off association with her own parents. The applicant did her sincere best, to no avail.

[5] By her will, which is dated 24 February 1995, the deceased gave $140,000 and the contents of "my blue steel box which is held in safe custody" to her father, with the residue going to Mr Ian Field. She made no provision for the applicant. (There was a codicil of 2 September 1998 of no present relevance.)

[6] A grant of letters of administration with the will and codicil was on 21 March 2002 made in favour of Mr Field.

[7] At the time of her death, the deceased lived on a property at 285 Beechmont Road, Lower Beechmont. Her relationship with Mr Field commenced after his purchase, through a company Inda Investments Pty Ltd, in 1988, of the property adjoining the deceased's. After some years of infrequent contact, more regular contact developed in the mid-1990's, centring about the provision of electricity to the deceased's premises. Mr Field also helped the deceased in relation to providing a telephone, and the surveying of the boundaries of her property. She in turn would help with some maintenance of Mr Field's property, through mowing for example. It was a friendly neighbourly relationship.

[8] Once the deceased told Mr Field that she wanted her property to be his. He took that to mean that she would sell it to him. One infers he would have been surprised at the provision made for him in the will.

[9] The principal asset of the estate is the property at Lower Beechmont, purchased in 1973. The sources of the purchase monies for that property were the deceased's parents, which means - other matters apart - there was some justice in her including her father as a beneficiary. Additionally, there was a term deposit and some other monies. The value of the contents of the blue box left to her father - jewellery etc - was $670.

[10] A valuation of the real estate put its worth as at 28 April 2003 at $275,000. That is a comprehensive valuation by certified valuers based on arguably comparable sales in the area. The only other material going to the then value of the land was a "kerbside appraisal" contained in a letter from a real estate agent, based on subdivisional potential, which suggested a value of $500,000 to $700,000. For obvious reasons I would proceed now on the basis of the expert valuation properly presented on oath. But in any event the most recent valuation, which was not challenged, of Mr Cobb, put the value as at death (5 November 2001) at $300,000, and as at the hearing, $640,000. I accept that valuation.

[11] Mr Field's statement of assets and liabilities provides for an approximate nett value of the estate, as at present, of $517,051.67, after taking account of all liabilities, including the costs of the hearing, save for the applicant's costs of $75,000 (an agreed estimate, for present purposes), which would reduce the total to approximately $442,000. As at the date of death, making necessary adjustments, the nett value of the estate was on my calculation approximately $270,000 - as was not disputed.

[12] Under the will, $140,000 of that (plus the contents of the box) was to go to the applicant's grandfather, with the balance to Mr Field. Accordingly, they were to share approximately equally in the estate.

[13] The total of approximately $442,000 representing the present nett value of the estate, assumes a prospective liability in the estate to pay capital gains tax of $75,000. That would arise because the real property will be sold more than two years after the death. On the evidence of the chartered accountant Mr Cranstoun, capital gains tax is in these circumstances levied, at personal tax rates, for a sale which occurs up to three years following the death, with similar but not identical rates applied thereafter. His evidence did not suggest there was, for present purposes, material variation in the rates. He estimated tax of $64,000, based on an increase of $340,000: $640,000, the present value, minus the value as at death, $300,000. The tax rates are applied to one half of the increase, that is, $170,000. The amount of $442,000 should be increased to $453,000, because the lower figure assumed a tax liability of $75,000, whereas it would be ($65,000) $11,000 less.

[15] In the first place, the issue was raised by Mr Conrick who appeared for the applicant, whether Mr Field as personal representative should not bear or arguably bear personal responsibility for the amount of the capital gains tax, in that he should have sold the property within the two year period. Had that occurred, no tax would have been payable. Mr Field gave oral evidence of his approach to the sale of the property. He was represented by solicitors at relevant times. His evidence was that he became aware of the capital gains issue only very recently. I cannot in these proceedings resolve any issue as to Mr Field's personal liability in respect of that burden on the estate, and in the end I was not asked to. Mr Conrick did not pursue this point.

[16] The second issue is whether the Commissioner of Taxation may have a discretion to relieve a personal representative of the liability to pay capital gains tax in these circumstances. Mr Cranstoun considered no such discretion existed. I was not referred to any statutory provision which clearly provides for it. This point, also, was not pursued.

[17] Both Counsel in the end agreed I should proceed on the basis the present value of the estate, nett, is of the order of $453,000.

[18] I found the applicant, who was cross-examined, to be a completely credible witness. I doubted none of the other evidence.

[19] I turn to the so-called jurisdictional question (Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201, 211), while noting the respondent's Counsel's effective concession that the deceased breached her duty to the applicant.

[20] The evidence discloses no reason why the deceased made no provision for the applicant. There is no explanation for her abandoning the applicant as a baby and having no contact with the applicant thereafter. There is no basis from which it could be suggested that there was any conduct on the part of the applicant which should have disentitled her to provision. Similarly, assuming the applicant was at the date of death of the deceased in need of provision for her proper maintenance and support, there is nothing in the material establishing any superior need in either of the beneficiaries for whom provision was made - or, for that matter, any need at all. There is no evidence before the court of their comparative assets and liabilities, from which one infers they seek to establish no particular "need" on their own account.

[21] There is, on the other hand, a great deal of evidence establishing that at the time of the deceased's death (that being the date relevant to this inquiry: Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134, 147), the applicant suffered substantial deprivation which could be expected to continue, and that that remains her plight.

[22] The applicant lived then, and still lives, in a one bedroom former worker's cottage "left over" after the construction of the Somerset Dam. It was a gift from her grandfather Mr Clarke. She owns this unencumbered property. Its value has been "appraised" at $108,000, in "as is" condition. The applicant lives by herself in this humble dwelling. Its inadequacy is illustrated by the photographs. A report from a building and pest inspector shows that to bring that dwelling to an "average standard" would mean spending $66,000 to $91,000, possibly more because of the remoteness of the location. She has an old 1964 model car which is unreliable. She lives a frugal existence, presently dependant on workers' compensation payments. Her work has been largely confined to casual field work for a geological survey company in the mining industry. She has no vocational qualifications. Her annual earnings have not been huge: since the year 1999 respectively, $27,709, $15,341, $22,864, $33,800, $41,640, $4,213, $43,908.85 (relating to an eight month period and including an unusual component). She has an accumulated $18,000 superannuation benefit she cannot access. The applicant has an adult married daughter, but would not expect assistance from her in the event of incapacity, because of her daughter's own family commitments.

[23] Additionally, the applicant's health is in a precarious state. I refer now to her problems with her feet, while noting that because these post-dated the death, they are not relevant in determining whether the testatrix breached her duty. They relate to the amount of any provision to be allowed. In March 2005, the applicant presented at a podiatry clinic complaining of nine months of heel pain, severe over the preceding three months. She was diagnosed as suffering from several adverse conditions related to her feet: severe acute chronic plantar fasciitis, with tears of the plantar fascia, severe plantar calcaneal bursitis, and a possible stress fracture in the foot. She underwent treatment which led to some improvement. Quite recently she has been diagnosed with tarsal tunnel syndrome. The podiatrist's view is that these conditions impact adversely on the applicant's capacity to do field work, and that is certainly confirmed by the applicant's own evidence. There is the possibility of flare-ups if she has to carry out prolonged work on uneven surfaces. She may need an operation. She has not worked since 24 February 2005, when her condition compelled her to stop. On 26 August 2005, the Orthopaedic Assessment Tribunal determined the applicant was totally incapacitated for work because of her feet problems, though this is temporary. (That explains the workers compensation payments referred to in para 22 above.) Dr Craig's report leaves the prospect of improvement quite uncertain.

[24] The applicant also suffers continually from lower back problems. Cervico/thoracic and lower back problems have troubled her since approximately the year 2000, which of course preceded the death of the deceased, so that these problems, and their consequence for her working capacity, are relevant to the issue of breach of duty. The applicant has received chiropractic treatment in recent times, but that has been incomplete, because, for example, she could not afford a recommended MRI. Dr White says her spondylosis of the lumbar spine renders her permanently unfit for work involving significant physical labour, prolonged standing or sitting, lifting or repetitive bending. That describes the work she was used to. She may improve to the point where she could handle "light semi-sedentary employment". She has previously done some waitressing. But that may be difficult to secure now at her age, and in any case would involve substantial work on her feet, which is problematic. Given her age, lack of employment skills, and back disability, her future employment prospects are at the least unpromising.

[25] The applicant also needs substantial dental treatment, but simply cannot afford it. This also is relevant to the issue of breach of duty. The cost is put at $37,470, possibly more because of operative treatment which is un-costed.

[26] As to her future maintenance, an accountant has estimated that to fund an income of $22,000 per annum (in today's terms) for the rest of the applicant's life, a level of income considered "modest but adequate" for a single woman (Social Policy Research Centre's "Updated Budgeted Standard Estimates for Australian Working Families in September 2003"), would require a capital sum of $305,000 (assuming the applicant works to the age of 60), $334,000 (if she works to 55), $357,000 (to 50), $375,000 (to 45), and that if she does not work again, $380,000. On the evidence before the court, the extent to which she will work again is surrounded by considerable doubt. Even if she does, her earnings are likely to be limited.

[27] In these circumstances, such as should have been discerned at the date of death, due consideration of the proper maintenance and support of the applicant, as at that date, plainly necessitated adequate provision for her in the will (cf. Bosch v Perpetual Trustee Co (Ltd) [1938] AC 463, 478-9), and such provision as would lead to the bulk of the estate going to her. Her need for that is plain and should have been recognized by a "wise and just" testatrix and reflected in the will.

[28] My assessment of the provision which should have been made for the applicant permits provision for Mr Clarke and Mr Field to remain. Mr Clarke has a 'moral claim', though not asserted, in light of the circumstance that he and his deceased wife actually provided the monies which led to the purchase of the Beechmont land, the major asset of the estate. Mr Field has a much lesser "claim", and, again, it is not one he asserts. But the incidence of the payment I will order in favour of the applicant should fall rateably on the whole estate (s 41(3) Succession Act). I am not inclined to interfere with the deceased's disposition so as to change that position.

[29] Assessing the need of the applicant for her proper maintenance and support, discernible as at the date of the death of the deceased, one notes a combination of circumstances establishing substantial need: back problems jeopardizing her capacity to work; the need for dental treatment presently costing almost $40,000 and no doubt a very substantial sum as at the date of death; the need to spend a substantial sum (presently $60,000 to $90,000) to bring her dwelling up to just average standard; the lack of any other source of support, should she for example become unable to work in employment; the meagre or frugal quality of her existence; the lack of what White J in Gardner (unreported, Supreme Court of Queensland, White J, OS No 475 of 1991, 29 March 1994) termed a "fund or resource to act as a buffer against misfortune". In addition, assuming the applicant works until the age of 60, and on the evidence that is highly unlikely, she would now need a capital sum of $305,000 to assure her an annual income of only $22,000. Those are present figures, but comparable figures would obviously have applied as at the date of death.

[30] To restore the applicant's dental condition and the condition of her dwelling would likely, as at the date of death, have cost at least $100,000. Adding in her uncertain working capacity because of the back condition (which was known at the date of death) and the other aspects to which I have just referred, I consider a just and wise testatrix would have left approximately three-quarters of this estate to the applicant, which on its present nett value would amount to approximately $340,000. I take into account also the value of the estate, which was not insubstantial bearing in mind that there is no other claimant with established need or even a marked moral claim upon the deceased - consistently in this proceeding, neither Mr Clarke nor Mr Field has actively sought to sustain the benefits given. That would allow the applicant to attend to the dental work, restore her dwelling to a reasonable state, and go some way to securing a "modest but adequate" income notwithstanding her most uncertain working future.

[31] As to the amount which should be allowed to the applicant, Mr Conrick, appearing for the applicant, submitted that the whole of the estate should go to her. Mr Peterson, for the respondent, submitted any award should not exceed $125,000.

[32] Mr Peterson referred to Gardner (OS No 475 of 1991), a judgment given by White J in this court on 29 March 1994, including Her Honour's observation at p 18 as to awards in the range 40 percent to 60 percent of the available estate where there are no competing claims (Her Honour there awarded 40 percent); Burns v Milne [2000] NSWSC 351 (34 percent of estate awarded); and Bondelmonte v Blanckensee [1989] WAR 305 (45 percent awarded).

[33] Mr Conrick referred to Mahon v Permanent Trustee Company Ltd [2004] NSWSC 434; Chodyko v Southern [2002] NSWSC 204; and Perpetual Trustees Queensland Ltd v Mayne [1992] QCA 417.

[34] The determination of these cases obviously depends on the circumstances of the particular case, and they vary substantially from case to case, although I accept that there are considerable similarities between this case and Gardner. I am conscious of the need not unduly to "re-write" the will in these cases.

[35] What strikes me about the present case is the compelling nature of the applicant's claim upon the estate, seen in the context of the vastly disproportionate "competing claims" of the existing beneficiaries. As I have said, my view is that making adequate provision for her proper maintenance and support, the deceased should have allowed her approximately three-quarters of the estate, worth at death approximately $200,000 and now approximately $340,000. Concluding that that provision would have been adequate and appropriate, it would not be right to shrink from varying the will to that extent because that would involve allowing an amount outside a "range" drawn from other cases.

[36] In relation to Gardner especially, a point of distinction may rest in the identity of the residual beneficiary in Gardner, Amnesty International. A court may be more understanding of a testator's wish to benefit a charity, most of which are continually in need of funding for worthwhile disposition, than as here, where neither of the beneficiaries demonstrated need, and indeed neither actively sought to sustain the benefit provided by the will.

[37] The application should be allowed, and provision made, accordingly, for a sum of $340,000 to be paid to the applicant. At present values, of the balance of $113,000, $34,000 would go to Mr Clarke and $79,000 to Mr Field.

[38] I order that the further hearing of the matter be adjourned to a date to fixed, so that counsel may agree on minutes of orders which will give effect to these reasons. Costs are at this stage reserved.