KING v FOSTER

TESTATORS' FAMILY MAINTENANCE - Family Provision - relative positions of spouse and ex- nuptial children considered.

TESTATORS' FAMILY MAINTENANCE - Family Provision - contested claim by ex-nuptial child - claim resisted by widow/executrix - child now aged 45 years, born in 1950 prior to marriage to widow in 1958 - claimant found by primary judge (Brownie J) to have had hard life, with few assets and to be an honest witness - widow acquired matrimonial home (value $130,000) and property in holiday home jointly owned with husband - cash deposits with bank reduced by substantial debts

• claimant's assets approximate $34,000 - income derived from selling raffle tickets over long hours - judge finds need, and failure of testator to make adequate provision - awards legacy of $80,000 - Held: (1) (By the Court): Errors of fact finding as to the size of the estate vitiated the exercise of discretion by the primary judge; (2) Notwithstanding the difficulties of doing so, to avoid further costs, the Court of Appeal should re-exercise the discretion; (3) (Sheller JA and Cole JA; Kirby P dissenting): Having regard to the modest size of the assets of the estate and the funds available to earn income for the widow's maintenance, although the claimant established that she had been left without adequate provision, no funds were available in the estate to make provision, and her claim should be dismissed.

TESTATORS' FAMILY MAINTENANCE - provision under Family Provision Act 1982 - comments by Cole JA on the need to provide accurate findings of the value and nature of the estate, the assets of the parties and the relationship between the parties and other persons having claims on the estate. Singer v Berghouse (1994) 181 CLR 201 applied.

TESTATORS' FAMILY MAINTENANCE - widow-ex-nuptial child - relative positions of - obligations of testator to - proper approach to claim for provision.

De Facto Relationship Act 1984 Family Provision Act 1951.

Kirby P The facts are set out in the reasons of Cole JA.

Errors appear to have occurred in the recording of facts found by the primary judge (Brownie J) which undermine his exercise of discretion under the Family Provision Act 1982 (the Act). I would not myself be inclined to put much

store on the misstatement of the available cash. The juxtaposition of $297,000 for $279,911.14 might have been a typographical mistake, Similarly, I would be

prepared to accept that it was open to Brownie J to reach a global view of the respondent's net income and to regard her postponed entitlement to insurance policies (for which she must, in the interim, pay premiums) to be of little account. However, the apparent omission to allow for secured liabilities of $149,530 appears to be an important error which vitiates Brownie J's exercise of discretion. It is quite possible, as the evidence had only just been given and his Honour proceeded to an ex tempore judgment, that he fully appreciated, but did not refer to, the secured liabilities. But because the sum is substantial and arguably affects the availability of assets to provide the legacy of $80,000 ultimately ordered, I agree with Cole JA that that order cannot stand. It must be set aside;

It is difficult and awkward for this Court to proceed to exercise, for itself, the discretion held to have miscarried in the Division. The Court has an up to date affidavit from the appellant, as executrix of the will of her late husband, Mr Norman King. It has received up to date but disputed evidence of the assets and income position of the respondent, Ms Foster, Mr King's natural daughter. There are, as Cole JA points out, certain difficulties in accepting at face value all of the evidence of the respondent at the trial. The basic problem seems to be one of elaboration and detail of that evidence rather than on actual risk of falsehood. Brownie J, who had the advantage of seeing the respondent give evidence and hearing the attack made on her credit, nonetheless accepted her as "a truthful and reliable witness". This Court may not disturb that finding. See Abalos v Australian Postal Commission (1990) 171 CLR 167, 178f;

Having regard to the relatively small size of the estate and the very significant cost that would be incurred in remitting the proceedings to be retried, justice and common sense suggest that this Court should, if at all possible, proceed to exercise for itself the discretion which it holds to have miscarried at first instance. In the recent affidavit of Mrs King, the appellant's costs of the trial were given at $17,000. Costs of both parties would presumably be about twice that. The appellant's costs of the appeal were estimated at $8,500. The costs of a further trial (even allowing for some saving of duplication) would be difficult to justify, at least if they could be safely avoided by disposal of the matter by this Court. I appreciate, and have some sympathy, for Cole JA's reservations. But I consider that a responsible approach to the minimisation of further costs in this dispute warrant the view which Sheller JA and I expressed during argument. Retrial should be avoided. This Court should proceed to make the orders which ought to have been made below, on a correct appreciation of the assets and income position of the appellant and the respondent so far as they can fairly be ascertained at this stage;

It was the obligation of the late Mr King, by his will, to make adequate provision for his widow, the appellant. This obliged him to ensure that she could continue to live in the family home at 6 Myall Street, Murwillumbah, that she should be protected in the provision of that home and that it should not be encumbered or burdened in a way which endangered her safe living accommodation. Furthermore, so far as what was compatible with his obligations to other persons entitled by law to provision, relevantly the respondent, the late Mr King owed a duty to his widow to provide out of his estate, whatever income could be made available for the maintenance of her style of life, such as she had enjoyed with him during his lifetime; and

Looking at the matter objectively within the terms of s7 of the Act the respondent was entitled to claim upon the estate of her late father. Neither in his lifetime, nor by his will, did the late Mr King make adequate provision for the respondent's maintenance and advancement. He did not by his will make provision for the benefit of the two children of his marriage to the appellant, namely Ms Susan King and Mr Gregory King. However, they are young adults with the benefit of a good education, in or shortly expected to enjoy, sound professional or semi-professional positions. It may reasonably be anticipated that each of them will share in the estate of their father by way of such provision, as in due course, the appellant makes for the disposition of her estate during her lifetime and by her will.

REASONS FOR PROVISION OF A LEGACY FOR NATURAL DAUGHTER

It is at this point that I part company with Cole JA and indeed Sheller JA. I take into account the findings of the primary judge concerning credibility. Accepting the credibility of the respondent, I have come to the conclusion, as Brownie J did, that the proper application of the Act requires that some provision should be made for the respondent. As mine is a minority view, I need not elaborate it. I shall state briefly why I have arrived at it:

1. The respondent certainly established, to the satisfaction of Brownie J and to my satisfaction, a need for provision by her father. Indeed, this is not really in contest. During her lifetime she was substantially neglected by her father although it is not now disputed that she was his natural child and entitled to look to him both for financial and other support. She did not receive that support. It is the purpose of the Act, if she can show need, to empower the Court, correcting the will to the minimum extent necessary, to provide for her need which the deceased neglected;

2. The deceased ought to have provided for the respondent, his daughter, in his lifetime. He ought also to have made provision for her maintenance or advancement in life by his will. He failed to do this. The Court cannot retrieve the position of the deceased's lifetime. But it can adjust his will. The respondent has had a very hard life. Her income was extremely meagre for a person of her age. Her assets are, as Cole JA has pointed out, quite paltry. In comparison with the assets of the widow in receiving the entirety of the estate of the deceased, the respondent's entire assets, accepted by Brownie J at the trial, are $19,310. Let there be added to that sum, upon Cole JA's insistence, the realisable value of the insurance policies, however remote their realisation of the substantial cost of premiums, and delay in their availability. Let there also be added the further sum of $5,000 for furniture revealed in the oral evidence to which Cole JA refers. The result is still pathetically small. This is scarcely surprising given the respondent's income earning activity:

A. "T sell tickets for a charity, tickets in a raffle car. "

A. "Seven days a week mostly plus Thursday night. "

A. "All the hours the shopping centres are opened plus I do markets on Sundays which I start at 3.00am.

Q. "So it would be fair to say you are fully employed? "

A. "TI certainly don't earn ages for the hours I put in. "

3. Whilst it is true that the respondent has a long term de-facto married relationship with Mr Graham, her financial needs are not well secured in that relationship. Apparently for religious reasons he will not divorce his wife by whom he has had six children. He is in poor health and unlikely to work again. If he were to die the respondent would be bereft of any support. The respondent does not have the protection of marriage. She seems to have little prospect of such protection. Furthermore, the Court was informed that there is no equivalent to the De Facto Relationships Act 1984 in Queensland, where the couple live. Her financial security in her relationship with Mr Graham is thus, objectively, quite precarious. If the relationship broke down, despite the seventeen years of its subsistence, the respondent would be in an acutely difficult financial position, with tiny assets and low income earning reality and potential;

4. As against this the appellant/widow discloses, in her most recent affidavit, that her assets are:

i) 6 Myall Street, Murwillumbah, estimated value $130,000

ii) Term deposit Westpac Murwillumbah, 7.35 % pa expiring January 1996 $136,000.

iii) Term deposit Westpac Murwillumbah 7.49 p.a expiring 24 October 1995 $115,000.

iv) Deposit in cash management account Westpac $4,055. v) Total real estate $130,000

She lists the total liabilities (including for the costs of this litigation) at $182,903. This leaves her with assets in her family home and the balance of liquid assets of $61,152.

However, her personal circumstances are disclosed as including the property at 6 Myall Street together with the property as Hasting's Point. This property was owned by the widow and the deceased as joint tenants. It is an asset that must be brought into account in considering what the deceased ought to have done to provide justly for the undoubted needs of his natural daughter.

The estate available for provision is small. It is smaller than it would appear Brownie J took it to be. But it is not the law that no provision need be contemplated for any other eligible person until after the spouse of the deceased has been properly provided for. The purpose of the Act is to require the court to consider the "ought question" having regard to all of the demands which might properly be made upon the deceased's assets, taking into account the relative asset and income positions of those making the demands. With respect, the mistake of the majority is to approach the matter on the assumption that, if the income position of the spouse cannot be secured, to a level that is considered adequate, no provision need be made for a natural daughter in need, such as the respondent. I do not believe that this is the correct application of the Act. Cf In re Hodgson [1995] VLR 481 (FCV), 495. To that extent I agree in the approach which Brownie J took. But I consider that the legacy which his Honour provided ought to be scaled down to the rather more modest size of the available estate, made still more modest by the accumulation of the costs of this litigation.

It is worth pointing out that, if some effective procedure had existed for conciliation between these parties, a sum might have been provided to the respondent equivalent to that which has now been accumulated in legal costs. It is the duty of responsible members of the legal professional to point these realities out to those who become embroiled in litigation of this kind. That might,

URJ KING v FOSTER (Sheller Jaintroductory Observations) 5

indeed, have been done in this case. Unfortunately, this is the type of litigation that typically engenders strong feelings, common in intra-family relationships. A legal practitioner who fails to draw to attention the harsh economic realities of Family Provision litigation, fails to perform his or her professional duty. Cf Green v Robinson (1995) 36 NSWLR 96 (CA), 107.

The respondent has certainly demonstrated need. Her asset and income position is much inferior to that of the widow. She has no special skills or training. It is virtually certain to remain so for the rest of her life. The deceased provided effectively for the children of his marriage in his lifetime and, indirectly, by the provisions of his will. He simply made no proper provision at all for his older, natural daughter. True, he acknowledged her verbally and in very minor ways in his lifetime. But he failed to provide for her education (as he did for the education of the children of his marriage). And he failed, by his will, to provide at all for her maintenance and advancement in life although she had a great need for such provision.

The provision that can now be made is not large. But it should take into account the respective economic positions of each of the parties and their respective needs. Spouses are important to the law. But so are children. And our law has travelled beyond the former attitude of prejudice and neglect which once attended the predicament of "illegitimate" children. By according primacy to the spouse, we should not restore the disadvantages of a child born outside marriage. Cf Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24 (CA), 30, 42. The Act does not envisage such an approach. This Court should not countenance it.

2. Set aside the judgment entered in favour of the respondent in the Equity Division of the Supreme Court (Brownie J);

3. In lieu thereof, order that there be provided in favour of Patricia Anne Foster out of the estate of Norman Charles King a sum equivalent to a legacy of $40,000;

4. Order that the plaintiff's costs of the trial be paid out of ie estate and that ie costs of the defendant, Mrs Beryl Doreen King be paid on a solicitor and client basis out of the estate;

and 5. Order that the respondent pay the appellant's costs of the appeal but have, in respect of such costs, a certificate under the Suitors' Fund Act 1951.

Sheller Jaintroductory Observations No proper determination of an applicationunder s7 of the Family Provision Act 1982 (the Act) can be made unless and until the parties place before the Court satisfactory evidence of the fund available for distribution from the deceased's estate after payment of funeral, testamentary and administration expenses, debts and costs. The Court must not make an order under s7 unless and until the plaintiff has satisfied it that the provision (if any) made in favour of the plaintiff by the deceased either during the deceased's lifetime or out of the deceased's estate is, at the time the Court is determining whether or not to make such an order, inadequate for the proper maintenance, education and advancement in life of the plaintiff; s9(2). This requires demonstration by the plaintiff of financial need which in turn requires a full disclosure of assets and liabilities and income and expenditure at that time. Too frequently parties ignore these basic requirements in their anxiety to expose perceived injustices resulting from the behaviour of the deceased or of the plaintiff or of other beneficiaries or other members of the family. A good practice would be for the Court to require the preparation and filing of financial schedules

by the parties isolating any areas of difference. In ie present case the evidence about the amount of the estate available for distribution, the plaintiffs financial position and the widow's financial position at the date of hearing was and remains confused.

As Cole JA has pointed out in his judgment, which I have had the benefit of reading, the judgment at first instance contains factual errors and omissions which suggest that his Honour mistook the facts. Accordingly his determination may be reviewed and this Court may exercise its own discretion in substitution; House v The King (1936) 55 CLR 499 at 505. That apart, I am satisfied that the order made was, in the circumstances, excessive to the point of demonstrating discretionary error. Either way it seems to me that the Court must, if it is possible to do so, decide for itself what should be done. The cost to the parties of referring the proceedings back to the Equity Division would be such as to persuade me from that course. On the material now before the Court I am satisfied the Court can dispose of the proceedings.

The deceased, Norman Charles King, died on 16 January 1993. By his last will dated 21 March 1989 and in the events which have happened, his widow the appellant, Beryl King, was the sole beneficiary and executor to whom probate was granted on 15 April 1993. The deceased married Mrs King on 15 March 1958. Of the marriage there are two children, Susan born on 3 September 1962 and Gregory Charles born on 4 December 1965.

At the time she married the deceased Mrs King was about twenty and had been going out with him since 1955. She was working as a hotel receptionist, work she continued for about three years after the marriage. Her wages were used to save up for a deposit on the couple's first home. The deceased was thirty-two when they married. He was a butcher and a sugar-cane farmer. Between about 1961 and 1971 Mrs King's time was occupied in bringing up the children and looking after her husband. In 1971 they sold their first home and purchased another at 16 Myall Street, Murwillumbah where Mrs King still lives. She says in her affidavit:

"When we moved into our present home in 1971 I intended to help my husband on the farm. The work was hard and involved long hours. It principally consisted of:

(1) driving various casual workers from homes to the farm and return;

While this statement is elliptical, in the context of the affidavit it is plain that Mrs King undertook a share of this work. The farm referred to was a 38 hectare property at Cane Road, Murwillumbah. Additionally Mrs King looked after the children and the home both inside and outside. She did all the outside work. She was not cross examined about her level of contribution to the deceased's business and to the marriage.

URJ KING v FOSTER (Sheller Jaintroductory Observations) 7

In her affidavit of 4 November 1993 Mrs King said she did not work. She suffered from rheumatoid arthritis which had disabled her from doing much work. In her affidavit of 24 August 1994 she referred to problems she had with migraine and high blood pressure. In her evidence on 22 May 1995 she repeated that she was unable to work.

In an affidavit of 18 October 1995, Mrs King listed her current assets as a property at Hastings Point worth about $125,000 and her interest in the deceased's estate namely the matrimonial home at 6 Myall Street, worth approximately $130,000, and an amount in cash of about $61,152. The amount of cash was calculated after allowing for the legacy Brownie J ordered to be paid to the respondent, for repairs and maintenance of Myall Street, for "legal costs from estate for plaintiff's costs of trial below" estimated at $17,000, for the appellant's and the respondent's costs of the appeal estimated at $6,000 and $2,500 respectively and for a debt due to Gregory, which Brownie J said it was proper to assume was payable to him. I will return to explain the debt due to Gregory. His Honour said "Virtually everything [Mrs King] owns seems to have come from the deceased or his estate." However Mrs King's uncontradicted evidence was that the house at Hastings Point was built in 1976 and that this was only possible with money from her mother's estate as a deposit "after which we paid it off in monthly instalments." In her affidavit of 18 October 1995 Mrs King said that her weekly outgoings ($283) exceeded her weekly income ($190 after tax) by about $93. The respondent submitted that the $80,000 award Brownie J made would reduce Mrs King's assets to an amount which would enable her, in accordance with current Social Service legislation, to receive a weekly pension of some $70 when she attained the age of sixty-one.

In summary Mrs King was left approaching the age of sixty, unable to work with an income insufficient to meet her needs, two house properties, including her home, and an amount of cash in the order of $61,000 if Brownie J's order stands. According to her evidence the matrimonial home needs a lot of work doing to it, including painting, new water pipes, renewal of concrete paths and repairs to retaining walls. The bathroom has to be renewed as there is a hole in the bath and taps to the sink are not useable. The stove is about forty years old and needs renewing. Carpets and lounge suite are badly worn. She said that work on the house was about to be done at the time the deceased died. In her affidavit of 22 May 1995 she added that the cement paths and driveway were cracked and needed repairing and that she wanted to put in security doors and windows as she gets frightened living by herself. She believed the cost of what needed doing to the house would be in the order of $20,000 to $24,000.

Neither of the children of the marriage made applications under the Act. In the events which happened they did not benefit under the deceased's will. If Mrs King had predeceased him or not survived for a period of thirty days after his death the two children would have shared his estate equally.

Gregory's evidence was that he was single, living with Mrs King and unemployed. From the age of about nine he had actively assisted on the farm. He left school at sixteen and attended Murwillumbah TAFE College where he successfully completed a building pre-apprenticeship course. It was not easy to get a position and for a year he had a small furniture restoration business. Then he attended Hughes Hospitality School and gained a Diploma of Hospitality. He worked for three and a half years gaining bar and cellar experience. He still helped from time to time on the farm. After his grandparents had both died, he spent a great deal of time restoring their home, which he said became part of the

deceased's estate. This took many months of his spare time and substantially increased the value of that house. He also renovated the outside of a house the deceased owned at McCloy's Road, Murwillumbah. He estimated having spent six months working twenty to thirty hours per week.

In 1991 the deceased purchased a lease on the Tweed Tavern at Murwillumbah and asked Gregory to manage it. Gregory attended the TAFE course at Ryde College to gain his Hoteliers' licence. Having taken up the position he worked an average of ten hours a day and stayed in his parents' house requiring bed and periodically breakfast. In managing the business he was responsible for stock control, banking, daily cash books, liquor register, ordering of stock along with hands on work in cellar, bar, kitchen, lounge and sometimes cleaning and many other jobs that needed to be carried out in the running of the hotel. His father told him he was pleased with the work and there were discussions about buying a large business that Gregory could run and the family obtain income from. The deceased did not pay Gregory wages for the work he performed. Gregory produced evidence valuing his unpaid work as worth $92,685 in wages. After the sale of the hotel in April 1993 he did further work for the estate.

Gregory said that he needed to obtain a full time position to enable him to live away from home but did not have the necessary qualifications in four or five star work within the hospitality industry which was required for most full time work. He had an offer of acceptance to study at the Blue Mountains International Hotel Management School but needed finance for the first year as living in is compulsory and tuition fees expensive. In February 1994 he left Australia to travel overseas and did not return until the middle of November 1994. He did not wish to make a claim on the estate as he felt his immediate needs would be met by the payment of the amount which he claimed the estate owed him. He accepted in his oral evidence that he had received about $30,000 from his mother since the deceased's death. As I have said Brownie J thought it proper to assume that $62,000 was payable to Gregory as if by way of debt.

The older child of the marriage, Susan, is married with two small children and lives with her husband in Sydney. She is a qualified secondary school teacher with the degrees of BA and Dip Ed gained largely by her own efforts. She suffers from back problems of a degenerative nature and has very bad eyesight. Mrs King sews for her and the children and needs to visit her periodically to help her out. The daughter and children visit Mrs King on holidays. There is no evidence about her assets or the assets of her husband or what their income and expenditure is.

The respondent is a daughter of the deceased but not hy his marriage to Mrs King. She was born on 27 May 1950. Her mother, who is now Mrs Knight, was formerly married to Alan Smith. There were two children of that marriage, but the relationship between Mrs Knight and Mr Smith broke down and she then became pregnant to the deceased. The respondent is the daughter of that union. In 1963 Mrs Knight - or Mrs Smith as she then was - married Colin McLeod. There were three children of that marriage, but it also ended in divorce before Mrs McLeod, as she then was, remarried.

Despite an attack on her credit, Brownie J accepted the respondent as a truthful and reliable witness His Honour said:

"Her description of her early life and of the consequences of her being born out of wedlock and having been brought up more or less as a member of the family of Mr McLeod and the plaintiff's mother is set out in her affidavit and I see no

URJ KING v FOSTER (Sheller Jaintroductory Observations) 9

profit in repeating that detail now. Its only real relevance, apart from pointing to the [propriety] on the part of the deceased of making provision for the plaintiff, if his estate was large enough to permit that to be done, is - accepting the submission of the plaintiff to this effect - that it has had the effect that the deceased's failure to pay for the plaintiff's maintenance, education and advancement in life early on led to the consequences, first, that she was deprived of opportunities she might otherwise have had, which might very well have left her better able to support herself now, and secondly, that the other members of the deceased's family were thereby advantaged in that his estate was a little larger than would otherwise have been the case..........

She has lived for some 17 years in a de facto relationship with John Graham. He has been separated from his wife for a long time, but for religious reasons there seems to be no prospect of either of those parties seeking a divorce. There are six adult children of that marriage. He is an officer in the Queensland Police Service, but it seems likely that he will retire from that service later this year, for medical reasons. It seems that he will then be entitled to receive a lump sum of about $165,000 by way of superannuation benefits. He will not then be entitled to any pension from the service. I do not think it is really clear quite what he intends to do, in respect of that superannuation entitlement.

His only significant assets appearing to be a car, some furniture and an interest in a holiday place. His liabilities appear to approximate to the value of his assets.

The plaintiff herself owns, by way of significant assets, only a 1986 Celica car, some furniture and a half share in the same holiday place. Again, her assets appear to approximate to the level of her liabilities. She works on a commission basis selling tickets for a charity. That involves her working very long hours and driving quite long distances in her car. Her net taxable income appears to be of the general order of about $6,000 a year. She has tried to find more remunerative work, without success."

As Cole JA has pointed out in his judgment, his Honour's reasons did not mention three policies of insurance worth respectively, when they each matured, one in 2006, $10,000, one in 2010, $12,398 and the third in 2015, $120,000. The present value of these policies according to the respondent's evidence at the hearing was just over $9,000.

Brownie J accepted that the deceased's primary obligation was to make proper provision for the maintenance and advancement in life of Mrs King in priority to any provision which ought to have been made out of his estate in favour of all or any of his children. However he was satisfied that there was sufficient money in the estate to provide adequately for Mrs King's proper maintenance and advancement in life and leave something for the children. I am satisfied that if after making adequate provision for Mrs King's proper maintenance there remains an amount in the estate available for distribution, the respondent has demonstrated a claim which would entitle her to an order under the Act. On the other hand a legacy of $80,000 to the respondent, even if appropriate if the estate were larger, does not, in my opinion leave adequate provision for Mrs King. The question is whether a legacy to the respondent of some lower amount would leave Mrs King adequately provided for.

The respondent filed further evidence about her current needs. The appellant objected to the admission of substantial parts of this evidence. On the whole I would be inclined to admit it to avoid the cost to the estate of remitting the matter to the Equity Division for re-hearing. However even accepting this evidence in

full it does not affect my conclusion about the outcome of the appeal. The respondent at this time has a net income of $14,096.95 which she earns by working sixty to seventy hours per week. The surplus of her assets over her liabilities amounts to $7,611. Calculations have been made of the discounted current value of her insurance policies. While Mr Graham has received a lump sum of $300,000 on retirement, his health is not good. Considering his age, fifty-five, he may not now be able to obtain further work. From the lump sum that he has received there will be deducted some, as yet unspecified, tax component and his wife may have some substantial claim on the amount. There is apparently in Queensland no legislation equivalent to the New South Wales De Facto Relationships Act 1984.

In a written submission the respondent's position is summarised as follows:

"(a) Ms Foster has less than $10,000 net assets at the present time (excluding the cash value of her life policies which add an additional $17,500).

(b) She works long hours for very modest income and has no special skills or training.

(c) At the present time her only financial security lies in her private superannuation entitlement which on maturity in 20 years time would provide a benefit with a value of less than $54,000 on present day values. Ms Foster's only other source of financial security derives from her relationship with Mr Graham. She is not married to Mr Graham. Although Mr Graham has recently received a substantial superannuation payout he may well have to pay a significant portion of that to his wife and at any rate the principal call on that fund is the support of Mr Graham himself. Mr Graham has poor health and is unlikely to work again.

Ms Foster has need for capital with which she can acquire an interest in a property with Mr Graham. This will improve her amenity of life by reducing her outgoings in terms of payment of rent and provide her with a capital fund to help her in retirement."

If the legacy Brownie J ordered is to be reduced, the respondent draws particular attention to the fact that she was eight at the time the deceased married Mrs King and he made no financial provision for her at that time. It is said that Mrs King indirectly benefited in that regard. Accordingly it is appropriate that the respondent receive a legacy from the deceased's estate.

The further material the respondent filed confirms my opinion that if the estate is sufficient she has demonstrated a need which the deceased did not adequately provide for.

In Re Hodgson (1955) VLR 481 at 494-5 Sholl J said that there was no rule of law that a widow, qua widow, is in a stronger position of the claimant than a child though it may be more likely, as a general rule, that a widow will be able to show a breach of the deceased's duty to her and to present need. But the facts of every case must be looked at and the married daughter may undoubtedly in a proper case be allowed provision from the estate.

Furthermore she is entitled to expect some provision, certainly if the widow is adequately provided for, independent of her husband. In every case it is a matter of weighing estate, claims, and needs. On the other hand the courts are not required to act as insurers of married daughters against all possible vicissitudes such as the loss of a husband by death or divorce or that she or her husband may become an invalid or that her husband may lose all his money. "Super human foresight and hyper anxious speculation can be neither expected nor required; wise and just human judgment in all the circumstances (which the court can never know as well as the testator) is the most than can be set up as a standard."

URJ KING v FOSTER (Sheller Jaintroductory Observations) 1

While there is no presumption in favour of the deceased's widow's entitlement, her claim on the estate is usually regarded as paramount to that of the deceased's children; Easterbrook v Young (1977) 136 CLR 308 at 324. In White v Barron (1980) 144 CLR 431 at 439 Stephen J referred to a number of factors which may place less absolute weight upon a testator's duty to afford maintenance for his widow, qua widow; greater weight instead being accorded to each spouse's contribution, tangible and intangible, to family assets, to the extent that it is reflected in the value of the estate of a deceased spouse. In Goodman v Windeyer (1980) 144 CLR 490 at 497-8 Gibbs J said that one of the circumstances that must be considered in deciding upon the deserts of a claimant to a testator's estate, and in determining whether proper maintenance has been provided, is the manner in which that claimant has conducted himself or herself in relation to the testator. If the claimant has contributed to building up the testator's estate, or has helped him in other ways, that may give the claimant a special claim on the testator's bounty. The very fact that a claimant has been a dutiful and devoted spouse or child is one of the relevant circumstances of the case to be considered together with all the other circumstances in deciding whether proper maintenance has been provided. In considering the widow's position, regard must be had to the fact, as in this case, that she had lived with the deceased for the whole of their married life of nearly 35 years, assisted to build up his estate, managed his household during that time, cared for and brought up his children and generally acted as his partner in the business of life. In Singer v Berghouse (1994) 181 CLR 201 at 228 Gaudron J remarked upon the tendency of the courts to overlook or undervalue women's work, whether in the home or in the paid workforce and the need to acknowledge the significant contribution involved when a wife gives up paid employment to be with and look after her husband.

In this case the unchallenged evidence is that the widow's income was insufficient to meet her recurrent needs. The respondent submitted that the lump sum payment Brownie J ordered in her favour would have the effect of reducing the widow's capital to an extent which would qualify her to receive an equivalent income by way of pension. However this course deprives the widow as she grows older of part of what, relatively, is a small amount of capital to provide her with an income and to meet exigencies or small indulgences consistent with the lifestyle that she led while the deceased was alive and for which he should have provided to the extent that his estate allowed it after his death. According to Brownie J she had a life expectancy of twenty-three years. At common law a loss of earning capacity measured by a weekly income of $283 for a person with a life expectancy of twenty-three years using the 3 percent tables (Todorovic v Waller (1981) 150 CLR 402) would justify a lump sum award, less 15 percent for contingencies, of about $209,470. However in the words of Cleland J in In re Harris (1936) SASR 497 at 501:

"Proper maintenance is (if circumstances permit) something more than a provision to keep the wolf from the door - it should at least be sufficient to keep the wolf from pattering around the house or lurking in some outhouse in the backyard - it should be sufficient to free the mind from any reasonable fear of any insufficiency as age increases and health and strength gradually fail."

In White v Barron at 457 Wilson J, with whose orders the majority of the Court agreed, said:

"The Privy Council in Bosch's Case [1938] AC 463 made it clear that what is 'adequate provision for proper maintenance' was not a question to be determined solely by reference to the material needs of the widow. All the circumstances,

including the size of the testator's estate at the date of death and the style of life to which the widow had been accustomed during his lifetime are relevant to this question. Generally speaking, it may be wrong in principle for a court to assume jurisdiction under this legislation in order to build up out of the estate of the testator the capital assets of an elderly widow. But conversely I do not think a wise and just testator would think it right for his widow to be required to draw on her own capital assets in satisfaction of her need of proper maintenance, especially when he had the means to protect her from the risk of financial anxiety in the future by a provision which enabled her to conserve her own capital."

As it is, even if no provision were made in favour of the respondent, Mrs King would be left in a position where she would probably have to sell the house at Hastings Point to meet her living expenses. This point is demonstrated by the lump sum award calculated in accordance with the 3 percent tables. Wilson J's dictum, with which I respectfully agree, accords, in my opinion, with prevailing community standards of what is right and appropriate (Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24 at 46).

A widow who has been a devoted wife and contributed to the upbringing of the children of the marriage and the accumulating of the deceased's estate, such as it is, is entitled to more than bare subsistence or in the present case an amount insufficient to meet her daily needs. Adequate provision for proper maintenance takes account of the lifestyle the widow enjoyed while the deceased lived and which she might expect to continue after his death. A pension entitlement is no equivalent. Such an entitlement is a circumstance to be taken into account but in the case of this estate, of modest dimensions, is not something which enables the court to reduce the sum to which, in the events which have happened, the widow is entitled under the deceased's will. In Lieberman v Morris (1944) 69 CLR 69 at 85 Rich J said that the evident purpose of the legislation was to provide proper maintenance of members of the family who would otherwise be left without adequate provision, and might, in many cases, become a charge on the community. In re Whiting (1938) SASR 188 at 192 Napier J, as he then was, said that the moral obligation of a man to provide for his widow, or the children that he has brought into the world, is not discharged by throwing the burden upon the general taxpayer.

In Shah v Perpetual Trustee Company (1981) 7 Fam LR 97 at 100 Rath J said that he did not think that consideration of the pension entitlements of the plaintiff, and there continuance in the future, could assist in the formulation of proper provision for the plaintiff; see also Bondelmonte v Blanckensee (1989) WAR 305 at 312 at 318. In my opinion it would be contrary to principle to reduce the amount left by the deceased to his widow, hardly adequate and certainly not excessive, on the ground that at a future point of time, if Social Security legislation remains unchanged, the order reducing her capital entitlement will be offset, in terms of the income it might be expected to earn, by a pension entitlement.

Different considerations may apply when the effect of making an order is to relieve the State while at the same time providing no benefit to the applicant. In Re Symmons (1948) VLR 283 Gavan Duffy J refused to make an order that part of the deceased's children's share in his estate should be paid to their mother for their maintenance and support because the likely result of making the order would be to bring about a reduction in payments made by the Children's Welfare Department. That being so it did not appear that the order was for the benefit of

URJ KING v FOSTER (Sheller Jaintroductory Observations) 13

the infants. See also In re Beard Deceased (1963) QdR 90 at 98 and the very useful discussion found in Bryson J's judgment in Whitmont v Lloyd (unreported) 31 July 1995.

In Re FJ McNamara, Deceased (1938) 55 WN (NSW) 180 Jordan CJ said in applying s3 of the Testator's Family Maintenance Act 1916 to the case of any particular applicant:

"..1t is necessary first to ascertain what is necessary to constitute adequate provision for the proper maintenance, education and advancement in life of the applicant; and next to consider what resources are available to the applicant from which to make adequate provision for these matters, taking into consideration (i) such capacity if any as he has for providing adequately for his proper maintenance, etc, by his own exertions, (ii) any property which he has apart from anything which he may receive under the actual dispositions of the will of the testator, and (iii) such benefits if any as are conferred upon him by the will. If these resources are found to equal or exceed adequate provision, no case is made for an order in his favour. If they are less than is necessary, then, unless his character or conduct is such as to disentitle him to the benefit of an order (s3(2)), he is entitled to an order for such an allowance out of the estate as will make his resources up to a sufficiency; save to the extent to which it may be necessary to restrict or refuse the order, in order not unduly to deprive other persons of proper provision for their needs."

In my opinion the deceased's estate was not sufficient to make an order without unduly depriving Mrs King of proper provision for her needs. Accordingly the appeal should be allowed, Brownie J's order making provision in favour of the respondent set aside and the application dismissed.

I would not disturb Brownie J's costs orders. S33 of the Act governs the Court's discretion in relation to costs orders on applications under the Act. In particular subs(2) provides that the Court shall not order that the whole or any part of the costs in respect of an application made by a person eligible by reason only of para(c) or para(d) of the definition of "eligible person" in s6(1) be paid out of the estate unless the Court has made an order in favour of that eligible person or there are special circumstances which make it just and equitable for the Court to do so. The respondent was not an eligible person by reason only of either of those paragraphs. It seems to me that subs(2) recognises that in the case of other eligible persons whose applications are unsuccessful, the Court retains a discretion to make an order that the applicant's costs be paid out of the estate without the need for there to be special circumstances. In the present case in quantifying the value of Mrs King's entitlement from the estate I have taken account of the estimated liability in costs to the respondent of the hearing before Brownie J. Accordingly it seems appropriate that this order should not be disturbed. In addition I think the respondent was justified in bringing the application. In my opinion she was defeated by a combination of the widow's superior claim and the relatively small size of the distributable estate. On the other hand so far as the costs of the appeal are concerned, in my opinion the respondent should pay those costs but have a certificate under the Suitors Fund Act 1951. This may have the effect of reducing the overall total liabilities of the estate Mrs King estimated but not in any way significant to the outcome of the appeal. In the circumstances it is unnecessary to make any order in respect of Mrs King's costs of the appeal.

Accordingly I agree with the orders Cole JA proposes.

Cole JA This is an appeal from a decision of Brownie J awarding the respondentthe sum of $80,000 as provision for her pursuant to s7 Family Provision Act from the estate of Norman Charles King, her father. The appellant, Beryl Doreen King, is the deceased's widow.

The judgment of Brownie J discloses as least four significant factual errors or omissions which necessarily render the exercise of judgment in awarding the $80,000 flawed. The errors or omissions to which I refer are:

"The deceased left assets which, according to the affidavit filed in support of the probate application, amounted to some $782,000, less liabilities of about $85,000, including about $72,000 owed to his son Greg and $5,000 owed to the defendant!."

In fact the affidavit in support of the probate application showed assets of $782,823 but, in addition to unsecured liabilities of $85,333, secured liabilities of $149,520. The value of the estate was thus $537,970, not $697,000 according to the affidavit.

2. The trial judge approached the matter on the basis that there was "presently available in cash, or its equivalent, approximately $297,0002 ".

3. Brownie J held in dealing with the defendant's's assets, liabilities and income.

Her net taxable income appears to be of the general order of about $6,000 a year+."

That was the evidence in her affidavit. of 15 June 19935. However, at the hearing on 22 May 1995, the claimant gave evidence that she had received a taxation bill for the year ended June 1994 showing tax payable of $2,200 and provisional tax of $3,400. The parties agreed that showed a taxable income for the year ended 30 June 1994 of approximately $16,000.

4. The trial judge held that the claimant's assets roughly equated her liabilities. His Honour failed to have regard to three insurance policies of the claimant which will yield to her approximately the following sums in the years shown:

In an estate of this size, these errors and omissions are of such significance as to vitiate the determination.

To make the determinations referred to by the High Court in Singer v Berghouse'®, it is necessary for the parties to present to the trial judge, and for the trial judge to make findings regarding at least:

Appeal Book, at 167R. Appeal Book, at 168F. Appeal Book, at 88. Appeal Book, at 171N. Appeal Book, at 12-13. (1994) 181 CLR 201.

(b) the value and nature of the applicant's assets, liabilities and income earning capacity;

(c) the value and nature of the assets, liabilities and income earning capacity of persons having claims upon the testator's bounty;

(d) the relationship between the applicant and the deceased, and

(e) the relationship between the deceased and others having claims upon his bounty.

If these findings are correctly made by the primary judge, and thereupon the primary judge makes an assessment of any order for provision from the estate for the maintenance, education or advancement in life of the applicant, strong reasons would need to be advanced for a Court of Appeal to interfere with the exercise of the primary judge's decision. As Kirby P stated in Golosky v Golosky7, a passage adopted by the High Court in Singer v Berghouse®: "Unless appellate courts show restraint in disturbing the evaluative determinations of primary decision makers they will inevitably invite appeals to a different evaluation which, objectively speaking, may be no better than the first. Second opinions in such cases would be brought at the cost of diminishing the finality of litigation in a troublesome area and, sometimes at least, with a burden of costs upon the estate which should not be encouraged."

However, unless the necessary primary findings of fact are both correctly made and clearly stated, an appellate court may be bound to interfere with the attendant regrettable cost consequences for litigants. It is to be hoped that the need for appellate court intervention will be diminished by primary judges clearly specifying the primary factual materials to which reference has been made.

SHOULD THIS MATTER BE REMITTED TO THE EQUITY DIVISION

As the determination by the trial judge is vitiated by basic factual error regarding the size of the estate and the income and assets of the claimant, and must be set aside, the question arises whether the matter should be remitted to the Equity Division for further hearing or dealt with by this Court. As will appear, the estate now available for distribution, apart from a modest residence in Myall Street, Murwillumbah valued at $130,000 in which the widow resides and which neither party suggests should be included in any order, comprises only net cash of $141,152. The estate is thus modest. The costs of the initial trial were approximately $34,000 and this has been borne by the estate. Provision is made in the net figure. I have referred to for a further sum of $8,500 for costs of the appeal. Thus some $42,500, or 7.75% of the value of the estate as s sworn for probate purposes, has already been expanded on legal costs. To inflict a further hearing upon the parties which may cost another $20,000 or 30,000 is to be avoided if at all possible. These figures highlight the importance of detailed and correct primary findings.

The appeal to this Court is a rehearing®. To facilitate a re-hearing the executrix, as is the practice, has filed an affidavit dated 18 October 1995 updating the present position of the estate. The respondent to the appeal did not seek to file any additional evidence prior to this hearing. If this Court is to rehear the matter it does so under significant disabilities. It has not seen any of the witnesses. How does one assess their credit? Brownie J found the applicant to be truthful person.

7. (Unreported), Court of Appeal 5 October 1993 at 13-14.
8. (1994) 181 CLR 201 at 212.
9. STSA(v).

In evidence- in-chief the claimant said that there had not been any significant change to ha financial circumstances disclosed in her affidavit of 15 June 1993. Yet in cross-examination it

appeared that her taxable income had increased from $6,000 per annum to $16,000. Further, her affidavit stated she had money in the bank of $100. In cross-examination it appears she has three bank accounts: "two of them would have $100; one would have $3,500"!° The affidavit stated there were liabilities on credit cards of $6,600 but in May 1995 that was said to be $11,000, a variation which the claimant accepted was material!!. The increase was for purchase of significant items of furniture but the increased value of furniture to that shown in the statement of assets in the affidavit was not disclosed.

In my view, notwithstanding the costs involved, the matter should have been remitted to the Equity Division for further hearing. However, that is not the view of the majority and accordingly I must reassess the matter upon the evidence before the Court. This led to the respondent to the appeal seeking and being granted leave to file additional evidence which must be accepted on face value as there has been no further hearing or cross-examination on it. For my part, I regard performance of the task of assessing with any confidence the financial position and requirements of the respondent without being able to make an assessment regarding her credit as quite unsatisfactory in light of the many discrepancies in her evidence.

After payment of the debts of the estate there remains the following:

The respondent accepted the widow's occupation of her residence should not be disturbed.

This Property was owned by the widow and the deceased as joint tenants. Its value was wrongly included in the probate affidavit.

2. Interest as beneficiary in the deceased's estate.

The widow is 58 years old, suffers severe arthritis and cannot work.

The widow has no income other than that devised from interest on monies of the estate on deposit.

Regarding the property at Hasting's Point, the widow's evidence was:

"T used the Hasting's Point property for holidays from time to time. It was in need of maintenance and it appeared to me that by renting it out to others as a holiday letting I could raise the money to maintain it. I started to let the property out on 28.1.95. Since then I have received gross rents of $1,536.80. To do that however, I had to construct a storeroom, install a set of new steps and paint the same. That cost me $2,130, so I am behind on the place at the moment."!3

12. Affidavit of Beryl Doreen King sworn 18 October 1995.
13. Appeal book, at 92.

The widow's affidavit of 18 October 1995 states that her sole income is from the estate's term deposits yielding $190 pa week after tax. Thus no income rental is derived from the Hasting's Point property.

Her unchallenged evidence is that her total weekly outgoings amount to $283 per week. She thus has a cash deficiency of $93 per week or $4,836 per annum. That sum must come from the cash residue in the estate of $141,152.

The widow stated in her affidavit that enquiries made of the local Social Security Office indicated that she will be qualified for an aged pension when she attains the age of 61 years on 22 January 1998. The material tendered by consent by counsel for the estate makes clear that, excluding the principal residence of the widow in Myall Street, if the widow in 1998 retains the Hasting's Point property (value $125,000) and, say, $130,000 cash deposits (being $141,152 cash presently in the estate less approximately $11,000 to cover her deficiency in income between now and January 1998), she will not have any entitlement to a pension as her assessable assets will exceed $224,000, totalling as they would $255,000. This led to the submission by the respondent that the $80,000 award made to her by Brownie J should be sustained thus reducing the widow's assets in 1998, apart from her residence, to a value of $175,000 which would then permit the widow to receive a weekly pension of $70.40. The $175,000 capital would then comprise either the Hasting's Point property plus $50,000 cash or, if the Hasting's Point property was sold, $175,000 cash. At 6% $50,000 would yield $3,000 per annum or $60 pa week giving the widow a gross income with the pension of $130.40 per week. If all assets were converted to cash, the $175,000 at 6% would yield $10,500 per annum giving her a total income of $14,160 which would attract approximately $1,750 tax leaving an after tax income of $12,410 or $238 per week. In the former case she would suffer a continuing weekly cash deficiency of $152.60 pa week, or $7,935 pa annum. In the latter case she would suffer a cash deficiency of approximately $45 pa week or $2,340 per annum to be paid from her diminishing capital. In the former case, her cash capital would be expended in about six years.

If the widow continues to receive income from the cash assets of the estate which total approximately $140,000, at 6% she will receive an income of approximately $8,400 pa annum before tax, or $7,800 after tax, being $150 per week. That will leave her with a continuing cash deficiency of $133 per week or $6,916 per annum to be paid from capital. Her income of $190 is presently inflated because additional cash remains on deposit pending payment of estate obligations.

The reality is that the net estate is insufficient to sustain the widow. Even receiving the income from the whole estate, the continuing call on capital with its diminishing effect on income will ultimately require her to realise her own property at Hasting's Point to survive. That property was bought with a deposit from her mother's estate and thereafter jointly paid for the deceased and the widow.

It is against this background that the respondent's claim must be assessed.

The claimant was born on 27 May 1950 and is thus 45 years old. She married in 1968 but was divorced in 1978. For the last eighteen years, since 1977, she has lived in a stable de-facto relationship with John Graham. There are no children of that relationship.

On the material before the Court the claimant has the following assets:

Motor vehicle $10,000 Furniture and household effects $5,000 Money in the bank $3,700 Half interest in time share unit with Mr Graham $11.010 Total: $19,310

In addition she has three insurance policies which, in 1993 had a realisable value of $9,164, thus making total assets of $28,474. The policies will yield her $10,000 in 2006, $12,398 in 2010 and approximately $120,000 in 2015. In addition her oral evidence before Brownie J disclosed that she had bought a further $5,000 of furniture.

Her liabilities were disclosed in her affidavit as being $9,000 but were increased in the oral evidence by a further $4,400 making total liabilities of $13,400.

Her taxable income is approximately $16,000 per annum. The expenses of maintaining and running her motor vehicle are tax deductable expenses.

Her living expenses are not clear. Her affidavit disclosed outgoings of $486 per week but that included some items which may be tax deductable and thus included in the deductions resulting in the taxable income of $16,000 per annum. Her oral evidence was that her outgoings exceeded her income but, as she has been living in this manner with Mr Graham for 17 years that evidence must be doubted, particularly as she has acquired two additional bank accounts between June 1993 and May 1995 with credits of $3,600 and has continued to pay off both a time share unit and a motor vehicle, as well as maintaining superannuation and insurance policies.

There was material placed before the trial judge, and this Court, concerning the financial position of Mr Graham. I regard that material as irrelevant. The Court was informed from the Bar Table that there is no legislation in Queensland, where the claimant and Mr Graham reside, which would permit her to maintain a claim upon him or him upon her, in relation to either property or maintenance.

THE COMPETING POSITIONS OF THE CLAIMANT AND THE WIDOW

The claimant is able to maintain herself on her income. The widow cannot. Having regard to the size of the estate available for distribution, in my opinion no basis has been shown for the making of any provision in the claimant's favour. Within the terms of s7, no question regarding the claimant's education arises. She is adequately able to maintain herself. Undoubtedly she would be advanced by a lump sum for she maybe able to use it with monies of Mr Graham to purchase a residence. Whilst the first stage exercise referred to Singer!4 may yield the result that, no provision having been made during lifetime or by will for the claimant by the deceased, it must be said that inadequate provision was made for her maintenance and advancement, nonetheless having regard to the size and nature of the estate, the applicant's financial position which is self-sustaining, the claims of the widow who cannot work and cannot sustain herself, and the circumstance that the applicant, although a child of the deceased, had a social relationship with him only for a period of some six years, the claims of the widow

upon the deceased's estate are so pressing that it is not, in my opinion, proper to make any order for provision for the maintenance or advancement of the claimant.

4. The respondent is to have her costs of the proceedings before Brownie J out of the estate.

5. The respondent is to pay the appellant's costs of the appeal but is to have. if qualified. a certificate under the Suitor's Fund Act.

The respondent is to have her costs of the proceedings before Brownie

5. The respondent is to pay the appellant's costs of the appeal but is to have, if qualified, a certificate under the Suitors' Fund Act.

Respondent: Murphy and Moloney with Pryor Tzannes and Wallis