_Laursen & Ors v Laursen_

Judgment (55 paragraphs)

[1]

Bolt Burchell Tranter Solicitors for the applicants

[2]

[1] Before me is an application for judgment seeking to end in a summary way applications made by three children of Hans Jorgen Laursen deceased ("the applicants") for further and better provision from this estate. This application is made by the deceased's widow, who is the executrix and the sole beneficiary under his will. The application is made pursuant to R 658 of Uniform Civil Procedure Rules ("UCPR") or alternatively, by invoking the inherent jurisdiction of the Court.

[3]

[2] The testator died on 18 January 2008 after a long illness. His widow (hereinafter "the executrix") was the sole beneficiary of his estate. She brings this application for judgment contending that the modest size of the estate, her age, and state of health, and the applicants' capacity to provide for themselves should result in judgment be entered in her favour. The estate available to satisfy the applicants' claims is so small that the estate could not stand this litigation. On her view, the available estate consists of:-

[4]

984 Insurance Australia shares - currently valued at $4,000.00

[5]

205 One Steel shares - currently valued at $1,353.00

[6]

Toyota Camry motor vehicle - currently valued at $10,000.00

[7]

[3] Obviously, the value of shares fluctuates but those figures give sufficient guidance for present purposes. Other payments identified in the widow's affidavit include her receipt of superannuation payments and proceeds of a joint bank account.

[8]

[4] The applicants argue that at the date of the testator's death the estate consisted of that property and part of the sum of $514,652.71 being the proceeds of the sale of a property jointly owned by the testator and the executrix and a bank deposit of approximately $18,000. The sale of property was undertaken to enable the parties to move from Townsville to Mackay where a new residence was to be purchased. The testator died between the date of the signing of the contract on 9 January 2008 and the settlement of the sale on 29 January 2008.

[9]

[5] The applicants' contend that by virtue of s 35 of the Property Law Act 1974 ("PLA") the proceeds of the sale of the jointly owned property fell to be construed as having been made as tenants in common. Consequently, the applicants argue that at least part, presumably one half, of the $514,652.71 should be regarded as part of the testator's estate.

[10]

[6] It is clear on the material that the executrix did not so regard the funds. She completed the intended move to Mackay and purchased a residence there for her own occupation. She applied $489,000 of those sums to purchase the residence. This was done openly with the executrix asserting her right to monies by survivorship as early as 10 March 2008.[2] By letter dated 9 April 2008, the applicants sought to prevent the estate property being transferred or dispersed until their claims were resolved.[3] The material before me does not disclose whether the Mackay residence had been purchased by this date though the circumstances suggest there had been some planning for the move prior to the testator's death. At all events no order was sought to reverse the executrix's action in purchasing the residence.

[11]

[7] The first reference to the application of s 35 PLA was made at the hearing. As a consequence the executrix had no opportunity to canvas the circumstances by which the effect of the section might be nullified. The section simply provides a statutory prescription for the holding of the sale proceeds of the Townsville property as tenants in common. That presumption is rebutable having regard to the circumstances and intention of those entitled to the proceeds. Minter v Minter[4]

[12]

[8] It is not necessary to make any formal orders concerning the executrix's use of the funds for the purpose of buying a residence for herself. In the context of assessing whether the applicants have any prospect of success I will proceed on the basis that the testator's estate, as at the date of death, was in the amount contended for by the applicants.

[13]

[9] Insofar as the applicants' claim give rise to the consideration of their needs competing with those of the executrix, it is necessary to examine the history of the relationship between the testator and the executrix. They were married in 1986 and lived together thereafter at various addresses. Initially, they lived together in a house wholly owned by the executrix. The testator had previously owned a house but had sold it prior to the marriage without receiving any substantial benefit from the sale. In 1991, the executrix sold her property and with the proceeds purchased in joint names with the testator a house at Medowie. In 2002, the testator and the executrix moved to Townsville where, again in joint names, they purchased a residence at Ogden Street, which was the property sold at the time of the testator's death.

[14]

[10] The executrix had not worked since 1987 and now, at the age of 61, is afflicted with osteoarthritis and is not able to work. In 1996, the testator was diagnosed with Parkinson's disease which progressed to a more serious condition Progressive Supranuclear Palsy (PSP). In 1999, the testator ceased work. He was then 55 years of age. The couple moved to Townsville for the sake of the testator's health. For the next 12 years, the executrix's life was devoted to the care of the testator. The demands of so doing were proving to be beyond her capacity. The proposed moved to Mackay was to gain the support of her daughter to assist in the task of caring for the testator.

[15]

[11] Had the testator survived and moved to Mackay it is safe to assume that in purchasing the house there, the proceeds from the sale of the Townsville property would be used. The purchased property would likely have been either in their joint names or in the name of the executrix only. The executrix was, at the very least, entitled to expect the provision of a residence for herself from their combined assets. By his will, the testator left the whole of his estate to the executrix. Both on moral grounds and on the basis of need the testator was duty bound to make adequate provision for the executrix and this would be the provision of a residence.

[16]

[12] The question then is whether there was any competing duty to any of the applicants having regard to the terms of s 41(1) of the Succession Act 1981. That section relevantly provides:-

[17]

"41(1) If any person (the 'deceased person') dies whether testate or intestate and in terms of the will or as a result of the intestacy adequate provision is not made from the estate for the proper maintenance and support of the deceased person's spouse, child or dependant, the court may, in its discretion, on application by or on behalf of the said spouse, child or dependant, order that such provision as the court thinks fit shall be made out of the estate of the deceased person for such spouse, child or dependant."

[18]

[13] The High Court in Vigolo v Bostin[5] affirmed the approach to this question as identified in Singer v Berghouse.[6] The judgment of the majority (Mason CJ, Deane and McHugh JJ) states:-

[19]

"It is clear that, under these provisions, the court is required to carry out a two stage process. The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant. The first stage has been described as the 'jurisdictional question'.

[20]

[14] In the case of an application by the widow or infant child, the "jurisdictional question" is easy. The court is dealing with one who is prima facie dependant on the testator and prima facie has a claim to be maintained and supported. In Re Sinnott.[7] However, an adult son, such as the case with each of the three applicants is in a different position and generally speaking, needs to show some basis to justify the intervention by the court under the Act.

[21]

[15] In Vigolo Callinan and Heydon JJ suggested the totality of the relationship was to be considered. They said:-

[22]

"We do not therefore think that the questions which the court has to answer in assessing a claim under the Act necessarily always divides neatly into two. Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question of whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacity, means, and competing claims, of all the potential beneficiaries must be taken into account and weighed with all of the other relevant factors." [8]

[23]

[16] How are the claims of each applicant for adequate provision from the testator's estate made out?

[24]

[17] Mr Jonsson of Counsel for the applicants argues that all that the applicants need show is a triable issue and that the Court should not proceed on the basis that all the material evidence has yet been presented. Further, that as the Practice Direction allows an opportunity for dispute resolution which the parties should be allowed to pursue where the claims, as here made, are relatively modest. He referred by way of example to Bladwell v Davis[9] where the Court had to compare the needs of an elderly widow against those of adult children in a distributable estate of $313,000. This amount however did not include the widow's residence. Bryson JA (Ipp JA and Stein AJA agreeing said (at [19]):-

[25]

"19. In the application of the test in s 7, and of the exposition thereof in Singer v Berghouse by Mason CJ, Deane and McHugh JJ at 409-411 it would be an error to accord to widows generally primacy over all other applicants regardless of circumstances and regardless of performance of the stages of consideration described in Singer v Berghouse, in full and with reference to the instant facts. Defeat of the opponents' claims does not necessarily follow from a demonstration, which the claimant can make, that all her needs with respect to income, home renovation, and provision for contingencies cannot be met if any provision is made for the opponents; indeed she could well demonstrate that even if the provisions of the will took effect without any modification, the provision for her is not adequate. That is not a demonstration that no claim by an eligible person can succeed; the claims and circumstances of the opponents also have to be weighed, and they too have their needs and merits."

[26]

[18] Plainly, the first inquiry is whether the applicants (or any of them) have shown that "adequate provision" has not been made. In circumstances where no provision at all was made each applicant at this stage must establish a prima facie case. McHugh J in Re State Public Services Federation; ex parte Attorney-General (WA)[10] said (at p 303):-

[27]

"The raising of a prima facie case means that, in the absence of further evidence, there is evidence upon which the tribunal of fact can, but not must, find for a party raising the prima facie case."

[28]

[19] In determining whether the applicants have made out a prima facie case, account must be taken of the executrix's need for an adequate residence and the value of the estate remain thereafter.

[29]

[20] The applicant Tonny Laursen is now 43 years of age. He is a solicitor and is also qualified as a marine biologist and a dive instructor. He works as a wildlife keeper and part-time solicitor earning approximately $670 net per week. The basis upon which Tonny Laursen claims special consideration are as follows:-

[30]

(i) Inexperience in business and financial vulnerability.

[31]

(ii) Help to the testator in various ways, particularly emotionally during his mental breakdown and other times.

[32]

(iii) Unable to find proper employment due to inexperience and age, being 43 years old.

[33]

(iv) Need for provision against insecurity from the possibility of illness or unemployment.[11]

[34]

He claims to have based his lifestyle on the expectation that he would receive a share of his late father's estate. The extent of that was stated to be an expectation that the estate would be "split four ways amongst his [3] natural children and his stepdaughter Lisa Funnell".[12]

[35]

[21] The expectation does not appear to be based on any words or conduct on the part of the testator. Tonny Laursen does not suggest that he made any meaningful contribution to the property or wellbeing of the testator. Any such suggestion would have to be evaluated in circumstances where the testator lived in a jointly owned residence and appears to have very little property of his own. A quarter share of the testator's exclusive assets would hardly amount to a serious expectation. None of the matters referred to in the preceding paragraph, indicate to me any obligation on the part of the testator to make provision for this applicant. Given all the circumstances, this applicant fails to make out a prima facie case for further provision.

[36]

[22] The applicant Benny Laursen was born in 1967 and is thus 41 years of age. He carries on business in his own name as a floor-sander with a capacity to earn $1,000 per week. Apart from business equipment he has no assets and had some hope that some benefit from his father's estate would allow him to further his business, or buy a house or help his son in a newly commenced business.

[37]

[23] It is difficult to see how the testator had any obligation to his son in these circumstances much less his grandson who has the support of immediate family. I find that Benny Laursen fails to make out a prima facie case.

[38]

[24] The third applicant, Morten Laursen, is a tradesman electrician who was previously self-employed but now works through a labour hire service since the failure of his business. There is little information about his financial commitments but it is stated that his income range is between $26,000-$42,000 per annum. He supports his children aged 11 and 3, their mother and her other two children. Nothing is said of his wife's property or earning capacity. Like each of his brothers, he makes no claim to having contributed to his father's estate.

[39]

[25] Morten Laursen is a young man, 36 years of age with trade qualifications. He has family commitments but can put his claim no higher than a desire for money so as to be able to pay a deposit on a home. In the circumstances of this case, I find that this applicant's claim also fails to make out a prima facie case.

[40]

[26] There is nothing in the basis of any of the respective claims which raises any suggestion of an obligation owed by the testator to the applicants. None of them made any contribution to the testator's assets whereas the contribution of the executrix appears to have been a major source of his estate. None of them provided any services beyond ordinary familial contact, whereas the executrix was his carer virtually without respite over a 12 year period. Her health was adversely affected and her commitment precluded her pursuit of any employment during this period. Effectively, she has lost the capacity for employment. The obligation on the testator to make provision for her was extremely high. Meeting that obligation, as it existed at the time of his death, was likely to require the disposition of the whole of his estate in the manner in which it occurred. If, after meeting that obligation, some part of the estate was available it would have been of a value that would not justify the making of the claims identified on the material.

[41]

[27] I am satisfied that the testator given his financial circumstances had no obligation of the kind envisaged by the legislation to his adult sons. White J in Higgins v Higgins[13] referred to the intrusive nature of the legislation taking away "the freedom of the deceased person to dispose of his or her estate as he or she desires whether by will or intestacy. The intrusion is justified if the deceased person fails to make "adequate provision" for the proper maintenance and support of the deceased person's child".[14]

[42]

[28] I can find no basis for any assertion that the testator ought to have had within his contemplation the needs of any of the applicants in the circumstances which each of them has identified. The decision on the part of the testator not to make any provision has not resulted in any of the applicants being left without "adequate provision" as that concept is understood for the purposes of s 41 of the Succession Act.

[43]

[29] In those circumstances, judgment should be entered for the executrix. The executrix should have her costs of the proceedings to be assessed on the standard basis.

[44]

2. The applicants pay the respondent's costs of and incidental to the proceedings to be assessed on the standard basis.

[45]

[1] Affidavit Nerida Laursen filed 18 December 2008

[46]

[2] Ex C to affidavit of Nerida Laursen filed 18.12.08

[47]

[4] [2000] NSWSC 100 at [55] - [60]

[48]

[5] [2005] HCA 11; (2005) 221 CLR 191 at para [56]

[49]

[6] [1994] HCA 40; (1994) 181 CLR 201