How v How [2015] TASSC 4

1. The application is made pursuant to s 3(1) of the Act which provides:

"If a person dies, whether testate or intestate, and in terms of his will or as a result of his intestacy any person by whom or on whose behalf application for provision out of his estate may be made under this Act is left without adequate provision for his proper maintenance and support thereafter, the Court or a judge may, in its or his discretion, on application made by or on behalf of the last-mentioned person, order that such provision as the Court or judge, having regard to all the circumstances of the case, thinks proper shall be made out of the estate of the deceased person for all or any of the persons by whom or on whose behalf such an application may be made, and may make such other order in the matter, including an order as to costs, as the Court or judge thinks fit."

1. By s 3A, applications may be made by or on behalf of (inter alia) the children of the deceased.
2. In a statement subsequently adopted in Bosch v Perpetual Trustee Co [1938] AC 463 at 479 and by the High Court in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, the basic principle underlying the legislation is expressed by Salmond J in In re Allen (deceased), Allen v Manchester [1922] NZLR 218 at 220-221:

"The provision which the Court may properly make in default of testamentary provision is that which a just and wise father would have thought it his moral duty to make in the interests of his widow and children had he been fully aware of all the relevant circumstances."

1. It is settled law that proper consideration of an application made pursuant to the Act, s 3, or its equivalent in other States, requires a two stage approach. The first stage is a question of fact. The second stage involves the exercise of a discretion: McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566; White v Barron [1980] HCA 14; (1980) 144 CLR 431; Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490. The first stage requires a finding of whether the applicant has been left "without adequate provision for his proper maintenance and support". If this finding is made in the negative, the second step does not fall for consideration. In Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 all the members of the High Court confirmed that the subsection required the court to undertake a two-stage enquiry. With respect to the first question, all the members of the court in Vigolo affirmed the following statement from Singer v Berghouse (above) at 209-210:

"The first question is, was the provision (if any) made for the applicant 'inadequate for [his or her] proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co ([1938] AC at 476). The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst 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 upon his or her bounty."

1. The first question, whether the applicant was left without adequate provision for his proper maintenance and support, is generally to be determined at the date of death of the testator. However, in addition to the circumstances existing at the date of death, I may have regard to the circumstances which could reasonably be foreseen at that time: Coates v National Trustees Executors & Agency Co Ltd [1956] HCA 23; (1956) 95 CLR 494; In re MacKinnon [2002] TASSC 3. If it is found that the applicant was left without adequate and proper provision, the Court may then properly exercise the discretion to make further provision.
2. It is not the function of a court when determining an application under this legislation to re-write the testator's will according to the court's view of how the testamentary power should have been exercised: Leyden v McVeigh [2009] VSC 164 at [30]. In Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9 at 19, Dixon CJ said:

"All authorities agree that it was never meant that the Court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court."

1. Similarly, in Cooper v Dungan (1975) 9 ALR 93, Stephen J said, at 98:

"It is notorious that in this particular jurisdiction courts must be vigilant in guarding against a natural tendency to reform the testator's will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant."

1. I may have regard to the testator's reasons, so far as they are ascertainable, for not making provision or further provision: the Act, s 8A. An application may be refused "if the character or conduct of any person by or on behalf of whom the application is made is such that in the opinion of the court or judge should disentitle him or her to the benefit of any provision": the Act, s 8(1). It is not contended in this case that there are any grounds for refusal of this application under s 8.

The personal and financial circumstances of the applicant

1. The applicant is 60 years old. He was 57 when his father died. He and his wife Susan were married in 1981. The applicant has two daughters, now aged 29 and 27, who are both financially independent. One is married with a young family. The applicant and his wife have made loans to their daughters of about $10,000 each and provide some other modest financial assistance to them from time to time.
2. The applicant left school at age 16. For 3½ years or so he worked with his father as a labourer at a power station, and then in a tyre shop for a year, before working for three years in a sawmill his father purchased. In his early twenties he obtained employment at Telecom, which later became Telstra, as a technician. He held that employment for almost 35 years until he was made redundant in July 2012. He was paid a redundancy and accumulated leave totalling about $132,000. After a period of unemployment of about eight months he was re-engaged by Telstra on a contract basis, and now works three days each week. His contract is of indeterminate length and may end at any time. He did not give any evidence of an intention to retire and is physically able to do the work required of him. His taxable income for the year ended 30 June 2014 was $54,740, from which he paid tax of just over $9,000. His evidence was that he earned just over $700 each week after tax, although in cross examination he conceded it may be more than that. The applicant's wife worked three days a week for an insurance company for 19 years until her position was made redundant on 30 November 2012. According to her husband she had intended to work for another three years or so. She subsequently obtained other permanent part-time employment as a clerical assistant at a bodyworks business and earns about $538 per week before tax. Her taxable income for the year ended 30 June 2014 was $23,803 from which she paid tax of about $1,000. There is no evidence that Susan How has any problem with her health.
3. The applicant and his wife live in a home they jointly purchased in 1981 in Invermay in Launceston. The property has been renovated and extended over the years. The applicant thinks it is worth about $320,000. The government valuation is $360,000. It is subject to a mortgage on which about $35,000 is owed. The applicant has personal superannuation of $655,212. At the date of his father's death the balance of the superannuation fund was considerably less but has since been increased by deposit of about $100,000 of the redundancy payment he received from Telstra, by other contributions and by natural accumulation of the fund. He owns Telstra shares worth about $20,000. Mrs How has personal superannuation of $130,000. At the time of the testator's death she owned some shares worth about $37,000 but they have now been sold. In recent years she received an inheritance from her mother's estate of about $76,000, part of which was used to fund improvements to their home and the loans to their daughters. The applicant and his wife jointly own a car valued at $8,750, a bank savings account with a present balance of about $15,000 and their household contents. They have no other assets or investments of any substance.
4. The applicant is in good physical health, but since his father's death he has developed anxiety for which he is treated by his general practitioner and with counselling. He says he enjoys a "comfortable lifestyle without being lavish or extravagant".
5. Although counsel for the respondent made some criticism of the applicant's evidence, I found his evidence about his personal and financial circumstances to be honest, and for the most part, reliable. His evidence in cross examination about some of the financial matters he was asked about was at times uncertain and imprecise, but I am satisfied he did the best he could. I reject the submission that he was not frank about his financial circumstances. He readily conceded that his wife looks after the family finances and that the affidavits he swore were prepared with her assistance.

1. There is no evidence that the applicant had anything other than a good relationship with his father. Early in his life he helped out on his grandfather's dairy farm, in which is father later had an interest. They worked together after the applicant left school, first at the mine and later at the sawmill. He moved to Launceston when he was 23 to take up his work but, throughout his life, he maintained contact with his father through regular visits and frequent phone conversations. They went out for meals together with family and friends. His father sometimes visited Launceston and stayed with the applicant and his family. He helped with renovation work on the applicant's home. They shared an interest in football. From time to time during his father's life, the applicant helped his father with work at his father's home, especially after it was badly damaged by fire in 1994 and was rebuilt. Between 1994 and 2009 the applicant and his wife, as a gift, contributed financially to payment of the premiums on his father's insurance policies. They paid for the testator to accompany them on a family holiday to Fiji in 1998. There was a brief falling out after the testator told the applicant that he was considering leaving his property to his grandchildren because his son Roger was planning to do the same thing. The applicant's evidence was that this occurred in 2009. However the reference to his brother's intention suggests that, if the conversation was in those terms, it must have been before Roger How's death in 2008. The applicant said "he had a stern conversation" with his father about what he had been told and they did not speak for the following four to six weeks. However, things quickly returned to normal and their relationship continued to be strong. There is no evidence that the subject was raised with him again.
2. The applicant was a comfort to, and supportive of, his father in the last few months of the testator's life as he became increasingly ill, and visited him frequently.

1. I also regard the respondent and Jennifer How to be honest witnesses. The respondent, Brian How, is married. He and his wife have two children, a son aged 30 and a daughter aged 29. He has always been employed and is currently employed as a quarry superintendent. He earns an annual gross income of about $90,000. He has superannuation and owns his own home. His wife works as an office assistant for her husband's employer. He and his wife live in the property at 89 Greens Road, Mole Creek which his father gave him in 1982. The property is adjacent to the testator's property. He owes some money to a bank he borrowed to help his daughter purchase a house before her marriage failed. He says that he is generally in good health and accepts he is adequately provided for without provision from his father's estate. During his life, the testator helped Brian How to build the house on the land at Mole Creek which he gave to him. He also helped to do work on a home Brian How owned in Queensland where he lived between 1995 and 1999.
2. I heard evidence about the testator's oldest son, Roger How. Until his death in 2008 Roger How was married and lived on a farm in the Mole Creek area. He engaged in various occupations including as a bushman, driving trucks, building roads, in sawmills and making bricks. He left three surviving children; a son in his mid-40s, a daughter in her early 40s and another son aged almost 40.
3. Jennifer How is aged 65. She has two daughters now aged 45 and 44. There is no evidence of her marital status, but I infer from her evidence that she is single and has not been in a stable relationship, at least for a considerable time. She is in poor health. She has emphysema, arthritic fractures in her spine, high blood pressure and lymphedema. At the date of her father's death she received a Newstart benefit of $557.50 each fortnight. After her 65th birthday she became entitled to an age pension which is about $850 each fortnight. She expects to rely on social security benefits for the remainder of her life. She has no savings or investments and no superannuation. She does not own a house or land. She has an old car and some personal property.
4. Until about 2004 Jennifer How owned a property at Perth in Tasmania. It was subject to a mortgage. She had been employed as an assistant at the Perth Road House, earning about $700 per week. She found herself in financial difficulty because she gambled to excess on poker machines. She fell behind in her mortgage and the property was sold. She became bankrupt. When the Perth Road House business was sold at about that time she assisted the proprietors, with whom she was friends, to renovate a property at Trevallyn intending that it be sold at a profit. For that work she received a small salary. When that venture proved to be unproductive she returned to live in a rental property in Perth and obtained other employment, part-time in the kitchen at the Longford Meatworks, and part-time back at the Perth Road House. In January 2007, when she was considering returning to work full-time in Perth, she agreed to move to Mole Creek to live with her father. He had been diagnosed with cancer. When considering what to do she spoke to her father's doctor. He told her that her father's prognosis was somewhat uncertain but that he may only have months to live. Consequently, for a time, and because she was uncertain about what would occur, she continued to rent her property at Perth. For some of the time she shared the rent with a couple who moved in to that property for a year or so. She eventually gave up that lease as a result of a conversation with her father to which I will refer again in a moment.
5. According to Ms How, she had two particular conversations with her father during his life about his property at Mole Creek. She gave unchallenged evidence that in about 1978, when she was 24 or 25, she asked her father for help to secure a loan to buy a cottage in Mole Creek for $5,000. He advised her against it, telling her that the house needed too much work. He said to her, "besides, you'll have my house one day".
6. There was a further conversation with her father, she thinks in about 2009, when she was deciding what to do about her rented house in Perth for which she was continuing to pay rent. When her father raised this with her she told him that she wanted to keep that property in case anything happened to him and she was left with nowhere to live. He told her, "Don't be silly, you'll have this". Again, her evidence about this was not seriously challenged. I find such a conversation occurred and that the subject of the conversation was the testator's house at Mole Creek.
7. As it turned out the testator lived until late 2011. During that period he remained relatively independent and able to look after himself, until he became more ill in the months before his death. I accept the evidence that, during that period in which Jennifer lived with him, her father was not always easy to live with. He was set in his ways. Stephen How gave evidence that his father seemed depressed, especially after the death of his son Roger. The testator had medication which affected his mood from time to time. The applicant gave evidence of his concern that during this period Jennifer was acting selfishly, and not attending to her father as she should have as his carer. Even if there is something to what he says (and I make no such finding), such an assertion has little impact on the factors relevant to the determination of this application. Constant attention to her father during this period is not to be regarded as some sort of pre-condition to the provision he made for her in his will.
8. For some of the time she was at Mole Creek Jennifer did unpaid work at the Perth Road House, about once a week or so. I accept her evidence that she did so to help the chance of her being re-employed there if the occasion for that ever arose. She also did some volunteer work in a garage business at Mole Creek to help a sick relative. I am not satisfied that this evidence demonstrates some capacity for work which reduces the strength of her claim to provision from her father's will. In my view, neither the testator, nor the hypothetical wise and just testator, would have regarded her as, at the date of his death, then having any significant earning capacity.
9. Jennifer How continues to live in her late father's house at Mole Creek. She is paying the rates and other outgoings and the insurance. At the time she moved in he had just been diagnosed with cancer. She was employed at the Longford Meatworks and the Perth Road House, but gave up that employment so she could be her father's "carer".
10. Beyond what I have already said, I have no evidence of the personal or financial circumstances of any of the grandchildren, including whether any of them have any special need for provision. All of them are mature adults and have been served with notice of the application. None have played any part in the proceedings.

1. The testator, after falling ill, tried on a number of occasions to speak to his son, Brian How, about his will. Brian How was uncomfortable with the subject. A conversation occurred on or about 3 September 2011. Brian How remembers the day because he had been with his father to a football game at Railton in which the Mole Creek team was playing. Speaking of his house at Mole Creek, the testator told Brian How that he wanted "Jenny to be able to live there until she couldn't live there anymore". The testator also told Brian How that once Jennifer died or left the house, that his grandchildren should receive some benefit through its sale. In the same conversation the testator said to Brian How words to the effect, "You have a good job and you've done well for yourself, Stephen has also got a good job and he has done well for himself, but I would like Jenny to have the house, she's been good to me by coming to look after me". When considering the testator's reasons for making the will in the terms he did, I do not lose sight of what the testator also said to his daughter Jennifer.

Was the applicant left without adequate provision for his proper maintenance and support?

1. The effect of the testator's will is that no provision is made for the applicant. Although it provides that he receive a quarter share of the residuary estate, there is no estate apart from the house. So, the applicant will receive nothing. Thus, the issue for determination is whether, without provision from the estate, the applicant has been left without adequate provision for his proper maintenance and support. That question "involves a value judgment by the Court": White v Barron [1980] HCA 14; (1980) 144 CLR 431, per Aickin J at 449. The court should "form opinions upon the basis of its own general knowledge and experience of current social conditions and standards": Goodman v Windeyer (above), per Gibbs J at 502. The relevant facts in this case include the size of the estate, the age, financial position, earning capacity and needs of the applicant, and the competing moral claims of the applicant, Jennifer How and the testator's grandchildren.
2. The applicant makes no challenge to the life estate the testator provided for Jennifer How. The applicant accepts, properly in my view, that taking into account her age, health, financial position and station in life, she had a strong claim to the provision her father made for her in his will. At the date of his death her financial position was poor and it remains so. Her gambling was partly responsible for that, but her conduct emphasised her father's duty to provide for her. A wise and just testator could properly conclude that because of her age and state of health she had a very limited capacity to provide for herself. She cared for him in the last years of his life and gave up opportunities for employment to do so. No provision can be made for the applicant during Jennifer How's life unless the house is sold. I regard it as unlikely that a suitable substitute property can be acquired and maintained at such cost as to leave a fund from which provision can be made. Jennifer How is presently paying the rates and outgoings and upkeep on the house. If the house is to be retained, there is no alternative but for her to do so, because there are insufficient estate funds to meet those expenses.
3. Rather, the applicant submits, the testator had a duty to provide for him, rather than the testator's grandchildren, in disposition of the remainder, after the death of the life tenant. He submits that further provision should be made for him from that remainder. If such provision were to be made, then the applicant would receive some benefit from the estate at some future time. I have no evidence of the life expectancy of Jennifer How, nor any medical evidence of how her health may affect her life expectancy. It is conceivable that, if she lives for a long time and exercises her right to sell the house and live in nursing home accommodation, that the value of the remainder interest will be substantially reduced over time. On any view, the estate is a relatively small one. The appellant contends that his claim to that potential fund is stronger than that of the grandchildren, and that he should receive such further provision after his sister's death because "that is when he will need the money".
4. I readily appreciate that the applicant may feel hurt and upset that his father has chosen to provide for his grandchildren instead of him. I have little doubt that he perceives that his father's will somehow reflects his father's feelings towards him. With respect to him, he would be mistaken to so conclude. Both his siblings gave evidence of the regard his father had for all of them. I have little doubt that the applicant was a good son. However those factors, in the circumstances of this case, do not justify an order for further provision. The legislation does not justify orders to remedy perceived unfairness or hurt feelings. There is no evidence, in my view, from which it can be properly concluded that the applicant has been left without adequate provision, either now or, so far as reasonably can be foreseen, in the future. Apart from a small mortgage he has the means to repay, he and his wife own their own modest but comfortable home. He was able-bodied and in full-time employment at the time of his father's death. His wife was also in employment and remains so. Of course, a wise and just testator would allow for the intervention of ill-health or unemployment, but there were, and are still, no strong grounds to foresee that there will be any significant restriction on the applicant's ability to continue to provide for himself during his working life or in his retirement. He and his wife are and seem likely to remain in comfortable financial circumstances. They have combined superannuation approaching $800,000. I would take notice that, by current standards, it is not a huge fund, but no evidence that it is not enough to provide for their retirement, particularly taking into account the applicant's continuing capacity to earn. I have no evidence that justifies a finding that his need for provision will increase in the future, in particular on the termination of Jennifer How's life estate, whenever that may be.
5. The applicant submits that his claim to have not been adequately provided for is strengthened by a moral claim for further provision. There are moral aspects to the concept of what is proper when determining whether, and, if so, how, provision should be made for an applicant: Dodderidge v Badenach [2011] TASSC 34. When considering the issue of moral claim and moral duty I would accept that, as his son, the applicant's connection to the testator is closer than that between the testator and his grandchildren. The testator had no moral duty to provide for them. The applicant's moral claim, he submits, should lead the Court to look at the application through "rose coloured glasses" in his favour. The moral claim is strengthened, he says, from the fact that in 1982 his father gave his brother a property at Mole Creek and, now, has given his sister a life estate in his house, without making any provision for him. Conversely, the respondent contends that I may take into account the assistance the testator provided to the applicant during his life by helping to renovate and improve his home. It is important however to recall that the Act does not create an entitlement to equal treatment or to receive a certain portion of the estate of a deceased. A court should, in general, refrain from weighing up the respective contributions made by a testator for his children, during their lives and in a will, to create equality, although disparity may sometimes be relevant. The applicant must bring his claim within the words of the statute. The expressions "moral claim" and a "moral duty" were considered in detail by Underwood J (as he then was) in Gerlach v Public Trustee 153/1997 (AustLII [1997] TASSC 160) and again in Hope v Tasmanian Perpetual Trustees Limited [2006] TASSC 13. In the latter case his Honour surveyed the judgments of the members of the High Court in Vigolo v Bostin (above). I respectfully agree with his Honour's summary and conclusion. The expressions are not found in the legislation and are not to be used as a substitute for the language of the statute, but they are a guide to the legislative purpose. As was expressed by Gleeson CJ in Vigolo v Bostin (above), at [25]:

"In explaining the purpose of testator's family maintenance legislation, and making the value judgments required by the legislation, courts have found considerations of moral claims and moral duty to be valuable currency. It remains of value, and should not be discarded. Such considerations have a proper place in the exposition of the legislative purpose, and in the understanding and application of the statutory text. They are useful as a guide to the meaning of the statute. They are not meant to be a substitute for the text. They connect the general but value-laden language of the statute to the community standards which give it practical meaning."

1. The expressions were also considered by Callinan and Heydon JJ at [113]:

"We would not be reluctant, at least in some cases, to use the expressions 'moral duty' and 'moral obligation', and to apply the concepts underlying them, which include the idea of 'moral claims'. It seems to us that there are several material indications in the Act that moral considerations may be relevant. But before we refer to those indications we should make it clear that a moral claim cannot be a claim founded upon considerations not contemplated by the Act. Nor can it be a claim based simply upon the fact of a preference shown by a testator in his will for another or others, although there may be cases in which disparities in dispositions may be relevant."

1. In my view, the nature of the "moral claim" relied on by the applicant is not sufficient to bring him within the terms and purpose of the legislation. A wise and just testator was entitled to conclude that the applicant's proper maintenance and support was already adequately provided for. To make provision as the applicant submits would constitute an impermissible restriction on the testator's freedom of testamentary disposition, based on considerations not contemplated by the Act.

1. I am not satisfied that the applicant has been left without adequate provision for his proper maintenance and support. The application is dismissed.