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[2003] NSWSC 589
Supreme Court of NSW
2003-07-02
Mr P
Original judgment source is linked above.
CITATION : Harvey v Delaney [2003] NSWSC 589 HEARING DATE(S) : 25/06/2003 JUDGMENT DATE : 2 July 2003 JURISDICTION: Equity Division JUDGMENT OF : Master Macready at 1 DECISION : Paragraph 45
CATCHWORDS : Family Provision. Application by widower. Order for payment of a quarter share of the property to the plaintiff and a Crisp order in respect of the balance of the property. PARTIES : Kenneth Lionel Harvey v Grant Andrew Delaney and Haydn Wallace FILE NUMBER(S) : SC 5977/01 COUNSEL : Mr M.S. Willmott for plaintiff Mr P. Hallen SC for defendant SOLICITORS : Turnbull Hill Lawyers for plaintiff Cantle Carmichael for defendant
5977/01 Kenneth Lionel Harvey v Grant Andrew Delaney and Haydn Wallace JUDGMENT 1 MASTER: This is an application under the Family Provision Act 1982 in respect of the estate of the late Coral Harvey who died on 29 December 2000 aged 73 years. Her husband the plaintiff, who is now 85 years of age survived her. She is also survived by two grandchildren who are the children of her daughter, her daughter having predeceased her. The will of the deceased 2 The deceased made her last will on 18 December 2000 and she appointed the defendants as her executors. After making some bequests of jewellery the deceased left her home at 68 O'Brien Street Bondi Beach in trust to permit her husband to reside therein and thereafter dealt with her residuary estate on and from his death to make certain payments for legacies and for disposition of the residue. The relevant provisions appear in paragraphs 4, 5, 6 and 7 of the will which are in these terms: "4. (a) I GIVE AND DEVISE to my Trustees my real estate at 68 O'Brien Street Bondi Beach and the furniture contained therein UPON TRUST to permit my husband KENNETH HARVEY provided he survives me to reside therein free of charge during his life (so long as he remains my widower) and, subject to clause 4(b) of this my will, on the following conditions that my Trustees, in respect of that residence: (i) pay all rates and taxes and other outgoings; (ii) keep it in a good and habitable state of repair, fair wear and tear and damage by fire, lightning, flood, tempest and other inevitable accident excepted; (iii) keep it insured against fire, storm, tempest and other usual household insurable risks for an appropriate amount. (b) I DIRECT that that residence shall form part of my residuary estate in the events: (i) of the death or remarriage of my husband; (ii) of the failure of my husband in the opinion of my Trustees to continue to reside permanently therein. 5. I GIVE AND BEQUEATH the residue of my estate to my Trustees UPON TRUST to pay thereout all may just debts funeral and testamentary expenses which my be owing by me at the date of my death and to hold the balance then remaining as follows: a. During the life of my husband KENNETH HARVEY and during his occupancy of 68 O'Brien Street Bondi Beach to pay from the income therefrom, and in so far as that income in any calendar year may be insufficient for such purposes from the capital thereof, all rates, taxes, insurance premiums and repairs in respect of my real estate 68 O'Brien Street, Bondi Beach; b. after the death of my husband or upon him ceasing to be reside in the opinion of my Trustees permanently in 68 O'Brien Street Bondi Beach the remainder of my personal estate shall form part of my residuary estate.
13 I turn to consider the situation of any various beneficiaries before moving to deal with the nature of the plaintiff's application that he receive the whole of the property at Bondi outright. The plaintiff's situation 14 The plaintiff's financial circumstances were set out in his affidavit. He has a small amount of money of approximately $250 in the bank, a half share of the furniture in the house having a value of $3000 and personal effects of $2000. He receives an age pension of $416.15 per fortnight and this more than covers his expenses. He apparently has a surplus of income over expenses of $122 per fortnight. 15 There is medical evidence which indicates that the plaintiff has been having a difficult time after the death of his wife. In the past he has suffered from cancer and he has, probably as a result of his drinking, an abnormal liver function. In September 2001 he had problems with his heart due to Atrial Fibrillation. This is controlled but he continues to have problems with blood pressure as a result of his hypertension. Dr Christopher concluded that: "Mr Harvey is now 85 and at his age with his problems of atrial fibrillation, enlarged heart and hypertension his prognosis is not good, however he is stable at present. He still manages to live alone and goes to the club often and is learning to live with his loss." 16 The plaintiff gave evidence that he used the payments which he received when he ceased work on the waterfront to pay off debts he and his wife had at the time. It is clear that he has not worked since that time and the pension or sickness payments received from time to time have all been paid to the deceased who managed the couple's finances. Because it is so long ago full details are not available but it is reasonably clear on the evidence that the deceased herself received a reasonable wage from her occupation as a penciller for bookmakers. One of the witnesses spoke of picking up her salary for a month when she was unable to do it herself which turned out to be $2,000. 17 The deceased had to borrow funds to complete the purchase of the property at Bondi and over the years the deceased's wages and the plaintiff's pension would have been used to pay-out that mortgage. The deceased would from time to time give to the plaintiff sufficient money to allow him to have a few drinks and a few small bets. It is apparent from the evidence that the plaintiff liked to gamble and the deceased exercised control in order to ensure his pension was not wasted. There is nothing in the evidence to suggest that there was any unhappiness in the relationship between the plaintiff and the deceased and their marriage continued for 54 years. 18 It was submitted that the money used to acquire the property at Bondi Beach can be traced directly to the gift of the property at Glebe to the deceased. There was evidence given by the plaintiff that when the matter of the gift came up he indicated to Mr Cooper that Mr Cooper should leave the property to his wife. The deceased's statements before she died to her friends would seem to indicate that it was left to her because if it was left to the plaintiff the property might be wasted. There is evidence from two independent witnesses which support statements made by the plaintiff. Having regard to the difference in the evidence in respect of the two witnesses, I am not satisfied that there was an intention by Mr Cooper to give the plaintiff some interest in the property. 19 The fact of the matter is that that there was a bequest to the deceased and one starts with the proposition that the property was hers. There was some contribution to the property by the plaintiff from his pension monies which would have been used in part to repay mortgage. However I would have thought that the contribution by the deceased would be far greater. The situation of Grant Andrew Delaney 20 Mr Delaney was a friend of the deceased and knew her from about 1987. Through their mutual interest in horse racing she would see him once or twice a week at various race meetings. He does not place before the court his financial situation and, accordingly, the court can assume that he does not want the court to take his this into account when considering the matter. The situation of George Harvey 21 Mr Harvey was a nephew of the plaintiff. He has a house valued at $185,000, furniture worth $5,000 and the motor vehicle valued at $1,000. He has been unemployed for two years and previously worked on fishing trawlers and in second-hand building supplies. He receives unemployment benefits of $160 per week which does not cover his outgoings as he apparently has a mortgage the amount of which does not appear in the evidence. 22 No evidence is given of the nature of the relationship which he had with the deceased. The situation of Dorothy Webb 23 Mrs Webb was a friend of the deceased and met her some fourteen years prior to her death. She apparently owns a house with her son which is subject to a mortgage. She lives on a disability pension of $435 per fortnight which is substantially consumed by her liabilities under the mortgage. The situation of Rosita Richards 24 Mrs Richards was a friend of the deceased and received the legacy of $30,000. She has assets said to be valued at $50,000 comprising a car, hairdressing business, jewellery and personal items. She currently owes $29,850 being various liabilities to a bank and on credit cards. Her income is apparently variable and depends upon her business. The situation of Haydn Wallace 25 Mr Wallace was a friend of the deceased and has put no evidence before the court of his financial circumstances or of his relationship with the deceased. Consideration of the plaintiff's application 26 Widow's claims are frequently the subject of applications in this Court. The Court of Appeal in Golosky v Golosky (unreported 5 October 1993) has referred to formulations of the standard to be expected in respect of a widow in terms which refer to the decision of Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65 and Elliott v Elliott, which was approved by the Court of Appeal on 24 April 1986. There, his Honour said: "Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up and maintain his estate, the duty which a deceased owes to his widow can be no less than to the extent to which his assets permit him to achieve that result; first to ensure that his widow be secure in her home for the rest of her life and that if either the need arises or the whim strikes her she have the capacity to change her home; secondly that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry; and, third, that she have available to her a fund to which she might have resort in order to provide herself with such modest luxuries as she might choose and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring".
27 In the present case, I am not concerned with a widow's claim but with the claim of a widower. In Marshall v Carruthers the Court of Appeal, (Hodgson JA, Young CJ in Eq and Palmer J, 22 February 2002, unreported) at first glance appears to have qualified Powell Js remarks. Hodgson JA said: "I do not think it is to be assumed that this statement is to apply in all cases. In my opinion, it is not clear that this statement would apply to the applications by widowers is due in part, I think, to economic disadvantages which women still face. One important aspect of this is the economic disadvantage occasioned by the greater responsibility which women often take in looking after children. That factor is of course absent here".
28 Young CJ in Eq said: "It must be remembered that Powell J put his proposition as a 'broad general rule'. However, there is in fact no 'standard former spouse' to which one can just apply that proposition as a rule of thumb. Powell J's broad general rule may not be a good guide as to what the Court will consider as the duty of a testator towards a spouse except in the case of a financially dependent spouse where there is a history of bringing up children with the deceased or in supporting the deceased while he was amassing his fortune. The broad general rule may well be inapplicable in cases of other spouses. Indeed, the cases in the first half of the 20th century show that as far as widowers were concerned, the proposition was quite untrue".
29 The statement that widowers' claims were, at one time, viewed differently results from the context of the social conditions which prevailed in the first half of the last century, namely, that at that time property was, more often than not, held solely by the husband. The principles enunciated in Luciano will, in appropriate cases, apply equally in claims by widowers where the wife has held the whole of or substantially all of the assets - see eg Shaheen v Najjar (26 August 1994, Master Macready, unreported); Lewis-Boardman v Adams & Anor (15 November 2000, Master McLaughlin, unreported).
30 The question of what is the appropriate provision and whether a life estate should be awarded to persons in the situation of either a widow or a longstanding de facto partner has been dealt with in a number of cases. 31 In the 1970s and 1980s there were a number of decisions of single Judges of this Court where it was held that a life interest with particular attributes was appropriate. (See, for instance, Crisp v Burns Philp Trustee Co Ltd , Holland J 18 December 1979; Banks v Hourigan , Waddell CJ in Eq, 2 March 1989; Cameron v Hills , Needham J, 26 October 1989.) This perhaps is reflected in matters mentioned by the High Court in White v Barron (1979-1980) 144 CLR 431 where at p 444 Mason J said:- "A capital provision should only be awarded to a widow when it appears that this is the fairest means of securing her proper maintenance. However, the provision of a large capital sum for a widow who is not young may, in the event of her early death, result in a substantial benefit to her relatives, contrary to the wishes of the testator, when a benefit of another kind would have afforded an adequate safeguard to her personally, without leaving her in a position in which she could benefit her relatives from the proceeds of the legacy.' As has been pointed out in Elliott v Elliott that statement was made in an evidentiary context where the provision was made at the expense of the children of a previous marriage who had some claim on the testamentary bounty of the deceased." 32 A change in the High Court's attitude to the provision for widows, no doubt in response to changes in community expectations, is illustrated by the fact that in this case it disapproved of observations made in Warladge v Doddridge (1957) 97 CLR 1, that as a general rule an order for provision in favour of a widow should be confined to widowhood. Stephen J who was one of the majority in White v Barron at pp 438-440 went to some length to point out that the jurisdiction was one which should not be unduly confined by judge-made rules of purportedly general application. By the late 1980s other Judges in this Division were taking a slightly different view. For instance, in Court v Hunt 14 September 1987, unreported, Young J said:- 'Old age is a growing problem in our community and judges who sit in Family Provision Act applications get experience, as well as their own experience in the community, as to what happens when people reach the age when they can no longer look after themselves and one judges the evidence in these sort of proceedings against that background knowledge.' 33 His Honour then went on to talk about the assumptions one could make about the fact that frequently people, once they pass 55, have to change their accommodation and locate themselves either in retirement villages or nursing homes which have different requirements for capital contribution. 34 After talking about the evidence necessary, his Honour went on to say:- 'In many cases these days a life estate will not be sufficient because it does not cover the situation of the plaintiff moving from her own home to retirement village to nursing home to hospital. Sometimes it is possible for a court to alter a life estate to a more flexible non- capital provision, such as was done by Holland J in Crisp v Burns Philp Trustee Co Ltd, 18 December 1979, unreported, but noted in Mason & Handler Probate Service at page 13206. Other times the proper provision is for a fee simple gift, realising that this property will be sold and will be turned over into the appropriate property to maintain the widow for the rest of her life. Care also has to be given by those administering the plaintiff's property to ensure that there is sufficient income being raised after tax that will provide for maintenance levies and the other payments that have to be made by the widow.' 35 More recently the Court of Appeal on a number of occasions has referred to this problem. In Golosky & Anor v Golosky, 5 October 1993, unreported, the Court, at para 16, summarised the proper provision for widows (and thus the plaintiff in these proceedings) in the following terms:- 'In testing the Master's decision it is appropriate to keep in mind the principles which governed the approach which he was obliged to take to the widow's application under the Act. Relevantly, these included:
(a) Proper respect was to be paid for the right of testamentary disposition which is the fundamental premise upon which the provisions of the Act are based. That premise requires the Court, out of respect for the continuing right of testamentary disposition, to limit its disturbance of the testator's will to that which is necessary to achieve the purposes of the Act, and not more. See The Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9, 19; White v Barron & Anor , above, 458; Hunter , above, 576.
(b) The purpose of the jurisdiction is not the correction of the hurt feelings of sense of wrong of the competing claimants upon the estate of the testator. The Court is obliged simply to respond to the application of the eligible person who was a member of the testator's household and to consider whether, as claimed, the provision made by the will is inadequate for that person's proper maintenance and advancement in life. See Heyward v Fisher , Court of Appeal, unreported, 26 April 1985; (1985) NSWJB 81.
(c) Consideration of other cases must be conducted with circumspection because of the inescapable detail of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had been said that in the absence of special circumstances, it will normally be the duty of a testator to ensure that a spouse ( or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to. To the extent that the assets available to the deceased will permit such a course, it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies; see Luciano (above) 69-70.
(d) A mere right of residence will usually be an unsatisfactory method of providing for a spouse's accommodation to fulfil the foregoing normal presupposition. This is because a spouse may be compelled by sickness, age, urgent supervening necessity or otherwise, with good reason, to leave the residence. The spouse provided and will then be left without the kind of protection which is normally expected will be provided by a testator who is both wise and just. See Moore v Moore , Court of Appeal, unreported, 16 May 1984, per Hutley JA.
(e) Considering what is 'proper' and by inference what is 'improper' as a provision in a will, it is appropriate to take into account all of the circumstances of the case including such matters as the nature and quality of the relationship between the testator and the claimant ; the character and conduct of the claimant; the present and reasonably anticipated future needs of the claimant; the size and nature of the estate and of any relevant dispositions which may have reduced the estate available for distribution according to the will; the nature and relative strengths of the competing claims of testamentary recognition; and any contributions of the claimant to the property or to the welfare of the deceased. See Re Fulop (deceased) (1987) 8 NSWLR 679 (SC); Churton v Christian & Ors (1988) 13 NSWLR 241 (CA) 252.' 36 When talking of the need to provide a house and a sum for contingencies the President is clearly referring to passages in Luciano v Rosenblum and other cases. As was pointed out by the Court of Appeal in Elliott v Elliott unreported, 29 April 1986, such a type of provision only applies where it can be said there has been a long and happy marriage and a widow has helped build up the estate of the deceased. 37 In Permanent Trustee v Fraser 36 NSWLR 24 at p 47, Sheller JA had the following to say:- "Once it is accepted that adequate provision for her proper maintenance and advancement in life required secure accommodation for life as well as a capital sum to meet exigencies, this need is not met by giving her only a life interest in the home unit. Commonly people in the community need to move from their own home into a unit in a retirement village and then into nursing accommodation and then into total care accommodation. See Young J in Christie v Christie. The need can be met if the respondent is given the home unit absolutely. She then has a greater flexibility as well as greater security." 38 In Salmon v Blackford , 18 February 1997, unreported, the Court of Appeal was dealing with a case where the trial Judge had given a fee simple to the deceased widow. Sheller JA said:- "The principal point according to Mr Gibb was that his Honour failed to take into account that by reason of the widow's advanced years and the probability that her adopted son would be the natural object of her bounty, the effect of the order made was likely to be that the adopted son, whom the deceased had no intention to benefit, would be the beneficiary of half the estate. I have great difficulty in seeing how a submission of this sort has any weight in the circumstances of this case. The matter that this Court must consider is whether the order that his Honour made was in such terms that one could only come to the conclusion that in some way his discretion must have miscarried. It is well established that proper provision is not to be measured solely by the need for maintenance. It should, in the case of this respondent and in the circumstances of this case, free her mind from any reasonable fear of any insufficiency as her age increases and her health and strength fails. I may say in this regard that her life expectancy, according to the tables, was something over eleven years at the time of the hearing. If one comes to the conclusion that for her proper maintenance an order such as the present is appropriate, it seems to me to matter not at all that she has an adopted son of an earlier marriage and that he may be the ultimate beneficiary of her bounty. " 39 This seems to indicate a different approach to that referred to by the High Court in White v Barron.
40 The approach of the defendant and the approach of the remaining three residuary beneficiaries is set out in a proposal referred to in submissions in these terms:
(a) The plaintiff and the deceased were married for 54 years. (b) The home at 68 O'Brien Street, Bondi, was their home for 25 years and the plaintiff has lived there for 27 years. (c) The circumstances as to how the property was acquired indicate that the plaintiff contributed in part to the payment of the mortgage. (d) There are no competing moral claims. (e) The plaintiff has demonstrated that through the scheme offered by the St George "Seniors Access Home Loan" he can borrow sufficient to enable him to pay for the costs of the proceedings so that the property need not be sold. 43 I do not think that there is any real substance in suggestions made by the plaintiff that there is control over his life by the executors. It seems to me that they have tried to remain as unobtrusive as possible and it is probably to the plaintiff's advantage to have someone else have control over the property. 44 Under the defendants' proposal, if the plaintiff were to receive absolutely now one quarter of the real property, he would have a measure of control over his destiny. He could ensure in a quick and expedient manner that the property is sold. One other difficulty is that the plaintiff does not have a large amount of capital at the present time and this would ensure that he could receive some capital if that became necessary. In these circumstances an appropriate Crisp order in which the balance of the property is available to provide alternative accommodation would be appropriate. 45 I propose to make an order for the plaintiff to have a legacy of one quarter of the property 68 O'Brien Street, Bondi Beach and that he receive an appropriate interest for his life in the balance and thereafter such balance be held for the payment of the two legacies and then be divided between the three remaining residuary beneficiaries. There will need to be undertakings in respect of the maintenance of the property by the residuary beneficiaries and orders will be made for the payment by the three residuary beneficiaries in respect of the defendants' costs and the plaintiff's costs. This will require joinder of the remaining residuary beneficiary. 46 I direct the parties to bring in short minutes to give effect to these reasons for judgment.
Last Modified: 07/10/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Harvey
Delaney
(1994) 181 CLR 201
(1985) 2 NSWLR 65
(1957) 97 CLR 1
(1962) 107 CLR 9
(1987) 8 NSWLR 679
(1988) 13 NSWLR 241