McGrath & Anor v Eves & Anor

Supreme Court of NSW|2005-10-10|Before: Gzell J, Mr J, Mr P

CITATION : McGrath & Anor v Eves & Anor [2005] NSWSC 1006

DECISION : Legacies increased to $490,000 and $545,000.

CATCHWORDS : SUCCESSION - Family Provision and Maintenance - Failure by testator to make sufficient provision for applicants - Able-bodied adult son and daughter - Widow with independent means succeeding to matrimonial home by survivorship - Net estate in excess of $1.6 million before costs at trial - Legacies to children of $50,000 each.

C v C (2005) FAMCA 429 Singer v Berghouse (1994) 181 CLR 201 Vigolo v Bostin (2005) 79 ALJR 731 Luciano v Rosenblum (1985) 2 NSWLR 65 Golosky v Golosky, NSWCA, unreported, 5 October 1993 Marshall v Carruthers [2002] NSWCA 47 CASES CITED : Bladwell v Davis [2004] NSWCA 170 Shearer v The Public Trustee, NSWSC, unreported, 23 March 1998 Gorton v Parks (1989) 17 NSWLR 1 Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419 Re Buckland, deceased [1966] VR 404 Ogden v Green [2003] NSWCA 352 Lloyd-Williams v Mayfield [2005] NSWCA 189

Dennis Kelvin McGrath - 1st Plaintiff Diane Maree Murray - 2nd Plantiff PARTIES : Terry Louis Eves - 1st Defendant June McGrath - 2nd Defendant

Mr G Johnston - 1st Plaintiff Mr J Anderson - 2nd Plaintiff COUNSEL : Mr L Ellison SC - 1st Defendant Mr P Blackburn-Hart SC - 2nd Defendant

Gells Lawyers Jackson Smith Solicitors SOLICITORS : Hayden Fowler Corbett Jessop Solicitors and Attorneys Elliot Tuthill Solicitors

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1748/02 DENNIS KELVIN McGRATH & ANOR v TERRY LOUIS EVES & ANOR JUDGMENT 1 The late Kevin McGrath died on 18 November 2000 leaving assets then valued at $1,827,926.00. By his will he gave Dennis Kelvin McGrath and Diane Maree Murray, the plaintiffs, legacies of $50,000 each. Mr McGrath and Mrs Murray were children of the deceased from his first marriage. They seek further provision from the estate. 2 The first issue is whether the provision made for them by the deceased was inadequate and, if so, the second issue is what provision ought to be made. These questions are to be answered upon consideration of all the circumstances including the provisions of the will, the size and nature of the estate, the relationship between the parties, their receipt of gifts during the deceased's lifetime, their standard of living, their present and reasonably anticipated future needs, and the nature and relative strength of competing claims for testamentary recognition.

The proceedings 3 The deceased appointed Mr McGrath and Terry Louis Eves, the defendant, as his executors. Since making his claim, Mr McGrath has not acted as an executor. He was not on both sides of the record because the proceedings were initiated against Mr Eves alone. 4 In related proceedings, heard at the same time, by which Mrs Murray also sought further provision from the estate her proceedings were initiated against both executors. I made an order that Mr McGrath be removed as a defendant in those proceedings.

The will 5 In addition to the $50,000.00 bequests to Mr McGrath and Mrs Murray, the deceased gave Mr Eves and his sister Robyn Margaret Eves $50,000.00 each. They were the step-children of the second marriage of the deceased. 6 The deceased gave two legacies of $5,000.00 each to St Luke's Anglican Church, Miranda and the Cancer Care - Haematology Unit of St George Hospital, Kogarah and bequeathed the residue of his estate to June Emily Terese McGrath, his second wife. She is the second defendant in the proceedings.

The estate 7 The estate comprised cash, shares and notes. The former matrimonial home, valued at $390,000.00, passed to Mrs McGrath by survivorship, as did the joint bank account of $3,189.00. 8 The liabilities of the estate, save as to costs associated with these proceedings, have been discharged except for an income tax liability estimated at just over $5,000.00 and accounting fees estimated at just over $2,000.00. The pecuniary legacies under the will have been paid and, by arrangement, $50,000.00 and $3,000.00 per month to cover expenses has been paid to Mrs McGrath. From October 2002 to August 2005, Mrs McGrath had received $99,000.00 in instalments of $3,000 per month. 9 As at 2 August 2005, the remaining assets of the estate stood at $2,013,864.12. Liabilities of the estate at that date stood at $9,166.00. Capital gains tax on a realisation of the shares and notes was estimated at $311,217.00 and brokers' fees at $21,757.00 giving a net figure before costs of $1,671,724.00. The unpaid portion of Mr Eves' costs was estimated at $62,410.00 and those of Mrs McGrath at $76,067.00, reducing the net assets of the estate at 2 August 2005 to $1,533,247.00.

Relationship to deceased 10 It was not suggested that there was any disentitling conduct on the part of Mr McGrath or Mrs Murray. 11 Mr McGrath enjoyed a close relationship with his father who had been a ground aircraft engineer by occupation, employed by Qantas. 12 Mr McGrath's mother died in 1987 from cancer. This was after Mr McGrath had married and moved out of the family home. But he visited his mother almost every day in the last few years of her life. The deceased married Mrs McGrath in 1990. They moved to Western Australia to live near the deceased's father. He died in 1995. A year later the deceased sold his property in Western Australia and he and Mrs McGrath returned to Sydney and purchased the matrimonial home in Menai. 13 Mr McGrath visited the Menai house at least once a week and mowed the lawns and cut the edges until six months after the death of the deceased. The deceased died of cancer. During the time he was in hospital, Mr McGrath visited his father at least six times a week. 14 When Mr McGrath was 10, the deceased took him every Sunday in summer to a swimming club. This lasted for eight years. When Mr McGrath was in primary and secondary schools the deceased took him to representative athletics meetings. They went fishing together in school holidays and the deceased took him to football games and boxing nights. The deceased helped Mr McGrath repair his cars. After he turned 21, Mr McGrath and the deceased invested together purchasing land. They also established a small business that made fly screens and security doors. 15 Mrs Murray also enjoyed a close relationship with her father. The family spent holidays with the deceased's father in Perth. On other occasions the family went camping. The deceased dropped Mrs Murray off and picked her up from Girl Guides every Friday night and took her to weekly tennis lessons, gymnastics lessons and Sunday school. Her parents attended plays she was in at school and at Sunday school and on weekends the deceased took Mrs Murray and a friend to play in the sand dunes at Kurnell. 16 From the time Mrs Murray was 10 years old, the deceased took the family on numerous overseas trips to Fiji, the United States of America, Hong Kong, Singapore, Japan, Bali and Hawaii. When Mrs Murray was about 13, her parents transported her to play competitive tennis at various locations each Saturday morning and after tennis they would travel down the South Coast to where the family had a caravan permanently situated. 17 The deceased acted as social director at Qantas for some time and took the family to numerous Qantas Club functions such as house parties, picnic days, Christmas parties and organised trips. 18 For the three years before her mother's death, Mrs Murray assisted the deceased by helping with housework, washing, ironing, cleaning and vacuuming. When her mother was hospitalised, she and the deceased visited her each night. 19 Following the death of her mother, Mrs Murray included the deceased in many of her activities taking her father to a Leagues Clubs for dinner and to motor shows and boat shows. 20 Mrs Murray lived at home with the deceased until shortly before his marriage to Mrs McGrath. Her relationship with Mrs McGrath was somewhat strained. 21 When the deceased and Mrs McGrath moved to Perth, Mrs Murray kept in contact with her father by telephone. When they returned to Sydney she saw them every couple of weeks. After her marriage, the deceased and Mrs McGrath visited her every other Saturday. When the deceased was hospitalised she and her husband and son visited the deceased as often as possible and she visited him every second night. 22 Neither Mr McGrath nor Mrs Murray made any financial contributions to the property of the deceased or to his welfare. The services performed by Mr McGrath to the conservation of the matrimonial home at Menai were minor.

Gifts during the lifetime of the deceased. 23 Mr McGrath received gifts from the deceased and from his mother during her lifetime. $3,000.00 in 1976 to purchase a block of land, $3,000.00 as a wedding present in 1978, an interest free loan of $12,000 in 1980 which was forgiven, gifts between 1981 and 1990 estimated at $1,000.00, a concrete mixer and building material estimated at $2,000.00, $14,000.00 for home improvements in 1987, $18,000.00 in 1988 to pay out the mortgage that he and his wife had at that time, $20,000.00 to enable him and his wife to buy a new Toyota Tarago, a computer and printer, a motor for a pool, a reverse cycle air conditioner and a second hand car for one of his sons. 24 Mrs Murray also received gifts. The deceased gave Mrs Murray her mother's wedding, engagement and eternity rings, $3,000.00 in 1988 to purchase a unit, $2,121.21 for a 21st birthday gift in 1989 and $3,000.00 to purchase furniture. In 1990 she received $10,000.00 to pay outstanding debts and to pay for a holiday, $2,000 .00 in 1991 as a wedding gift and a further $2,000.00 towards the cost of the wedding, a video camera valued at approximately $1,000.00 in 1999, and $2,000.00 towards the cost of a new computer in 2000.

Mr McGrath's standard of living 25 Mr McGrath left school in 1972 after completing the Higher Certificate. In 1980 he obtained an Associate Diploma in Business (Valuation) from Sydney Institute of Technology. In 1983 he was registered as a Practising Real Estate Valuer and in 1984 he obtained a Real Estate Practice Certificate, an Auctioneers Practice Certificate and a Stock and Station Agents Certificate from Sydney Institute of Technology. In 1985 he became an Associate of the Australian Institute of Valuers and was also registered as a Real Estate and Business Salesman. In 1989 he became an Associate Representative and Member of the Property Management and Valuers Chapters of the Real Estate Institute of New South Wales. In 1990 he obtained a Small Business Skills Certificate from the Sydney Institute of Technology, became an Associate of the Australian Institute of Valuers and Land Economists, AVLE (Val & Econ) and obtained an Executive Certificate in Managerial Skills from the University of Technology, Sydney. In 1992 he obtained a Graduate Diploma in Land Economy from the University of Western Sydney and in 1994 he became the member of the Financial Institute Commission Valuers Panel Board and a current examiner for the Australian Institute of Valuers & Land Economists. In 1995 he obtained a Master of Commerce (Land Economy) from the University of Western Sydney, became an Associate of the Real Estate Institute of New South Wales - AREI Diploma and a Dual Fellow of the Australian Institute of Valuers and Land Economists as FVLE (Val & Econ). In 1996 he became a member of Sydney Institute of Technology Valuers Study Group. In 1998 he became a member of St George Valuers Study Group and a Fellow of the Australian Property Institute. In 1999 he obtained a Graduate Certificate in Management from the University of Western Sydney. 26 Mr McGrath has kept all his qualifications up to date by attending compulsory continuing education courses. 27 Mr McGrath has been employed by Sydney Water since 1974. Until 2004, he was employed as a property valuer. He was then transferred to a position known as a redeployed surplus staff member. At the time of the trial he was employed as an officer of the Water Restrictions Unit. He has been unsuccessful in his application for positions in the Real Estate Sections of Sydney Water, New South Wales Department of Lands, Transgrid and the Roads & Traffic Authority. He continues to apply for jobs as a property valuer within the public service. 28 It was submitted that Mr McGrath had qualifications that would make him attractive to the private sector. But at the age of 50, having spent his entire working life in the public service, I see no reason to criticise his desire to remain a public servant. He has every prospect of remaining in employment until retirement age. 29 Mr McGrath is a member of the State Superannuation Scheme. At normal retirement age of 60, it is estimated that he will be entitled to a lump sum of $345,130.00 or a pension of $1,380.52 per fortnight. The evidence was silent as to the income tax implications upon receipt of such benefits. 30 For a number of years, Mr McGrath maintained two jobs, some of which were income producing and some of which were not. He does not intend to take up two jobs in the future. It was submitted that no reason was given for this cessation and he had the capacity, as an able-bodied person, to take up a second job. Again, at the age of 50, I see no reason for him to be compelled to take up a second job if he no longer wishes to do so. 31 Mr McGrath married in 1978. He and Susan Lesley McGrath have five children, two of whom are under 18. Their marriage broke down. Mr McGrath left the matrimonial home in October 2001 and in May 2002 the Family Court of Australia made a decree nisi dissolving the marriage. It became absolute in June 2002. 32 After leaving the matrimonial home, Mr McGrath shared a house with a male friend at $100.00 per week. He then moved in with Ms Katherine Spencer and paid her a board of $220.00 per week. In April 2005, he moved to a two bedroom townhouse in Arncliffe that he rents unfurnished for $340.00 per week. 33 Mrs McGrath junior brought proceedings in the Family Court for leave to commence proceedings for property settlement out of time. It was submitted that Mr McGrath might have avoided the expense of those contested proceeding had he commenced the proceedings himself in time. I reject that submission. The matrimonial home is jointly owned. If Mrs McGrath junior had failed in her application for leave, Mr McGrath would have retained his half interest. If he had commenced proceedings in time, he would have forgone the prospect of retaining his half interest in the house. 34 The Honourable Eric Rainsford Baker, a former justice of the Family Court of Australia, gave evidence as to the effect of an order for further provision from the estate upon the proceedings under the Family Law Act 1975 (Cth). 35 Mr McGrath has expended his $50,000.00 legacy in reducing debt and paying for living expenses. Mr Baker's opinion is that the $50,000.00 will not be brought to account in the pool of assets of the parties available for division between them in the proceedings under the Family Law Act, 1975 (Cth). Mr Baker assessed the pool of assets at $489,832.00 and their pool of superannuation entitlements at $188,040.00. Superannuation interests are to be dealt with separately to the property of the partners (C v C (2005) FAMCA 429). Mr Baker assessed Mrs McGrath Junior's contribution to the asset pool at 45% and increased it by 20% having regard to the factors in s 75(2). Mr Baker expressed the view that the Family Court might make a splitting order with respect to the superannuation entitlements under s 90MT(1)(a). He assessed the superannuation funds accrued during the period of cohabitation at 71.77% rounded to $133,000.00 and applied the 65% entitlement of Mrs McGrath junior to arrive at a figure in her favour of $86,450.00. 36 If the Family Court declined to make splitting order, the superannuation entitlements pass with the other pool assets. Based on Mr Baker's figures, Mrs McGrath junior would be entitled to $404,840 with splitting order or $440,616.00 without. 37 If Mr McGrath receives a modest amount of further provision from the estate, Mr Baker has expressed the view that it will have minimal impact upon the ultimate order of the Family Court. But if Mr McGrath received a substantial increase in his legacy, Mrs McGrath junior is likely to share in some of the increase in the pool under the Family Court Act 1975 (Cth), s 75(2) factors. Mr Baker opined that if further provision of, say, $500,000 was made, Mrs McGrath junior might receive $100,000.00 of it by way of adjustment under that provision. 38 Mr McGrath and Mrs McGrath junior have made offer and counteroffer to settle the proceedings in the Family Court. Her offer is for assets and cash worth $606,235.00. His counteroffer is to pay or transfer assets worth $541,235.00. The difference of $65,000.00 represents Mrs McGrath junior's claim to a share of Mr McGrath's superannuation entitlement.

Mr McGrath's Needs 39 Mr McGrath wishes to acquire a unit or townhouse in the Sutherland Shire with at least two bedrooms and parking for at least one vehicle. Valuation evidence was tendered that a two-bedroom strata property in or near the suburbs of Caringbah, Gymea or Woolooware would cost in the range of $450,000.00 to $500,000.00. 40 Mr McGrath had made no inspection of any such premises on the market nor had he sought finance. It was submitted that I should treat with scepticism his wish to acquire accommodation in which he could entertain his two younger sons. I reject the submission. Mr McGrath's current financial position is such that he could not receive finance sufficient to acquire such premises and in those circumstances, his failure to inspect premises on the market is understandable. 41 Mr McGrath has a 1989 Toyota Tarago in need of repairs. It was submitted on his behalf that there was a need for $25,000.00 for a new motor vehicle and $25,000.00 for furniture for the new premises. Mr McGrath owes debts to a credit union, on credit cards, half the arrears of school fees, and a debt to his sister. They total $35,425.00. Moving costs were estimated at $5,000.00 and his costs of the Family Court proceedings at $33,000.00. 42 It was submitted on Mr McGrath's behalf, that a proper increase in the level of provision from the estate was $688,425.00 allowing $500,000.00 for the new premises including costs and stamp duty and $65,000.00 to cover the difference in the offers of settlement of the Family Court proceedings.

Mrs Murray's standard of living 43 Mrs Murray is to return to work after maternity leave for her third child with her former employer as a personal assistant working part-time of five hours per week over four days for $35,000.00 per annum. 44 Mrs Murray left school after completing year 10 and attended a business college to learn shorthand, typing and other business skills. She has been in steady employment interrupted by the birth of her three children. 45 Mr Murray is 41 years of age. He is a plumber. He injured his back and has, from time to time, being forced to take time off work due to low back pain. He sold his plumbing business in September 2001 and is presently working as a mechanical plumber primarily involving air conditioning and duct work. Due to a childhood infection he only has 5% vision in his left eye. 46 The medical evidence indicates that he would be assisted by improving his truncal support musculature and that can be taught by a physiotherapist. It was also suggested that he consider vocational redeployment, but his only training is as a plumber. His risk of unemployment is high. At present Mr Murray earns between $850.00 and $1,500.00 net per week. 47 Mrs Murray expended her $50,000.000 by paying down the mortgage on their home by $40,000.00 and attending to some repairs to the house. As at 10 August 2005, the balance of the mortgage stood at $275,591.00. In addition, the Murray's have a credit card debt of $5,560.00. They have minor credit balances in their bank accounts, Mrs Murray has a superannuation fund balance of $58,047.42 and an interest in an employee share programme valued at $4,611.36. Their 1998 Holden Commodore station wagon is worth $8,000.00.

Mrs Murray's needs 48 Mr and Mrs Murray wish to have a fourth child. For this purpose, they wish to add an upstairs extension to their house. A friend, Jeffrey Allan Glen gave a ballpark figure of $225,000.00 to $265,000.00 including GST for the proposed additions. It was a ballpark figure because no plans had been prepared. Mr Glen's evidence was criticised on the basis that he, when practising on his own account, had not built such an extension. But he had worked as a supervisor and foreman managing the development, construction and completion of houses in the Sydney metropolitan area and it seems to me that his estimate is not unreasonable. 49 Mr and Mrs Murray's equity in their home is insufficient to finance any extensions. 50 It was submitted on Mrs Murray's behalf that a proper level of provision from the estate would be the $225,000.00 to $265,000.00 estimate for an extension of the home, $275,591.00 to discharge the mortgage, a fund to cover a shortfall in family income of $300.00 per week for 9 years that Mrs Murray wished to remain at home, which at a discount rate of 3% amounted to $123,720.00 and a fund for contingencies of $250,000.00. It was also submitted that the contingency of Mr Murray becoming unemployable as a plumber should be taken into account. 51 Mrs Murray has returned to work. It was submitted that a fund to cover a 9 year period off work was no longer appropriate. In addition, it eas submitted that the estimate of $300.00 needed to be reduced for Mrs Murray's part time employment and her estimate of child-care costs at $19,360.00 per annum should also be reduced. That need was based upon full-time employment. By working five hours per day, four days a week, it was submitted that the figure should be considerably reduced, if not eliminated.

Competing claims 52 Mrs McGrath was married to the deceased for 11 years. During that time, investments in her name were augmented. During their marriage, Mrs McGrath contributed financially to holiday trips overseas. During his last illness, Mrs McGrath cared for the deceased and caused irreparable damage to her spine when she fell to the floor while trying to move him. 53 Mrs McGrath used some of her funds to manage the household. Many items, including white goods, blinds and furniture were purchased by her for the Menai house. 54 Mrs McGrath's health has deteriorated over the last few years. She suffered from anxiety stress disorder from nursing her dying husband. She suffers chronic arthritis. She has developed severe spinal arthritis in her neck. She has difficulty in swallowing. She suffers from migraine headaches. She suffers itchy skin, stomach and bowel disorders, and her eyesight is deteriorating. She has incurred substantial dental bills in the last financial year. 55 Mrs McGrath wishes to move into a retirement village at a purchase price of $680,000.00. She puts a current value of $480,000.00 on the Menai property. Mr McGrath thinks it is worth more. She has calculated an outgoing of $250,780.10 to sell the Menai property and move into the retirement village. 56 Mrs McGrath is well provided for. In the financial year ended 30 June 2004, her net income after tax was $59,702.67. Her expenses including donations were $48,724.67. When she moves to the retirement village, she will incur fortnightly charges of $375.00 but will no longer be liable to pay rates of $847.60, water rates of $622.50 and gardening expenses of $520.00 per annum. In addition, part of her insurance premium of $650.21 will be reduced. 57 Mrs McGrath values her assets at $1,747,251.77. This includes a share portfolio of $1,144,647.42 and cash of $82,604.35.

Legal principles 58 The Family Provision Act 1982, s 7 provides that if an applicant is an eligible person, the court may order such provision to be made out of the estate of a deceased person as, in the opinion of the court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person. Mr McGrath and Mrs Murray are eligible persons. The term is defined in s 6(1) to include a child of the deceased. 59 Section 7 of the Family Provision Act 1982 is subject to the operation of s 9. Relevantly for present purposes, s 9(2)(a) provides that the court will not make an order in favour of an eligible person unless it is satisfied that the provision (if any) made in favour of the eligible person 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 eligible person. 60 Section 9(3) of the Family Provision Act 1982 provides that in determining what provision (if any) ought to be made in favour of an eligible person, the court may take into consideration any contribution made by the eligible person, whether of a financial nature or not, to the acquisition, conservation or improvement of property of the deceased or the welfare of the deceased, the character and conduct of the eligible person before and after the death of the deceased, circumstances existing before and after the death of the deceased and any other matter that the court considers relevant in the circumstances. 61 In Singer v Berghouse (1994) 181 CLR 201 at 208 the High Court stated that the above provisions required the court to carry out a two stage process. First, the court must determine whether the applicant has been left without adequate provision for proper maintenance, education and advancement in life. Secondly, if that determination is made in favour of the applicant, the court has to decide what provision ought to be made out of the estate. At 209 the High Court said that concepts of moral duty or moral obligation were not of useful assistance in elucidating the statutory provisions and might well amount to a gloss on the statutory language. 62 That approach was questioned by three members of the High Court in Vigolo v Bostin (2005) 79 ALJR 731 at [15], [115] - [117] where their Honours expressed the view that considerations of moral claims and moral duty are useful as a guide to the meaning of the statute. There was no suggestion by the court that the two-stage process enunciated in Singer should be abandoned. 63 In Luciano v Rosenblum (1985) 2 NSWLR 65 at 69-70, Powell J said that as a broad general rule, and in the absence of special circumstances, the duty of a testator to his widow was, to the extent to which his assets permitted him to do so, to ensure that she was secure in her home, to ensure that she had an income sufficient to permit her to live in the style to which she was accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies. 64 That view was reiterated by the Court of Appeal in Golosky v Golosky, NSWCA, unreported, 5 October 1993, it being noted that a mere right of residence would usually be an unsatisfactory method of providing accommodation for a spouse. Kirby P summarised the other principles with respect to a widow's application under the Family Provision Act 1982 in terms of limitation to necessary disturbance of a will, the purpose of correction of inadequate provision, circumspection in the consideration of other cases, and taking into account all of the circumstances of the case. His Honour said: "In testing the Master's decision it is appropriate to keep in mind the principles which governed the approach which he was obliged to take to the widow's application under the Act. Relevantly, these included: (a) Proper respect was to be paid for the right of testamentary disposition which is the fundamental premise upon which the provisions of the Act are based. That premise requires the Court, out of respect for the continuing right of testamentary disposition, to limit its disturbance of the testator's will to that which is necessary to achieve the purposes of the Act, and not more. See The Pontifical Society for the Propagation of the Faith and St Charles Seminary , Perth v Scales (1962) 107 CLR 9, 19; White v Barron and Anor (1980) 144 CLR 431, 458; Hunter v Hunter and Ors (1987) 8 NSWLR 573, 576; (b) The purpose of the jurisdiction is not the correction of the hurt feelings or sense of wrong of the competing claimants upon the estate of the testator. The Court is obliged simply to respond to the application of the eligible person who was a member of the testators household and to consider whether, as claimed, the provision made by the will is inadequate for that person's proper maintenance and advancement in life. See Heyward v Fisher, Court of Appeal, unreported, 26 April 1985; (1985) NSWJB 81. (c) Consideration of other cases must be conducted with circumspection because of the inescapable detail of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had been said that in the absence of special circumstances, it will normally be the duty of a testator to ensure that a spouse (or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to. To the extent that the assets available to the deceased will permit such a course, it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies; see Luciano v Rosenblum (1985) 2 NSWLR 65, 69 to 70; (d) A mere right of residence will usually be an unsatisfactory method of providing for a spouse's accommodation to fulfil the foregoing normal presupposition. This is because a spouse may be compelled by sickness, age, urgent supervening necessity or otherwise, with good reason, to leave the residence. The spouse provided and (sic) will then be left without the kind of protection which is normally expected will be provided by a testator who is both wise and just. See Moore v Moore, Court of Appeal, unreported, 16 May 1984, per Hutley JA, 2; (e) Considering what is "proper" and by inference what is "improper" as a provision in a will, it is appropriate to take into account all of the circumstances of the case including such matters as the nature and quality of the relationship between the testator and the claimant; the character and conduct of the claimant; the present and reasonably anticipated future needs of the claimant; the size and nature of the estate and of any relevant dispositions which may have reduced the estate available for distribution according to the will; the nature and relative strengths of the competing claims of testamentary recognition; and any contributions of the claimant to the property or to the welfare of the deceased. See Re Fulop Deceased (1987) 8 NSWLR 679 (SC); Churton v Christian and Ors (1988) 13 NSWLR 241, 252." 65 The proposition that a widow should be provided with a house as a general rule was doubted by the Court of Appeal in Marshall v Carruthers [2002] NSWCA 47. And in Bladwell v Davis [2004] NSWCA 170 at [18], Bryson JA with whom the other members of the Court of Appeal agreed said that there was an inconsistency between an approach, in the context of competing claims, to the claims of widows as paramount and the application to the facts and circumstances of each case of s 7 of the Family Provision Act 1982, the approach established in Singer. 66 In any event, the deceased provided Mrs McGrath with the matrimonial home by way of survivorship. And he left her with considerable independent means. The question is whether the deceased left his son and daughter without adequate provision and, if so, whether further provision should be made for them thereby reducing the residuary estate. 67 When it comes to children, as Young J observed in Shearer v The Public Trustee, NSWSC, unreported, 23 March 1998, it has never been said by any court that the community expects a mother to leave her children in a position to have a house of their own. That observation applies equally to a father. And in Gorton v Parks (1989) 17 NSWLR 1 at 7, Bryson J pointed out that there is no special principle that able-bodied adults earning a living have no claim, his Honour pointing out that such a proposition in relation to resources of any size was quite erroneous. 68 In Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419 at [109]-[110], White J, having referred to this passage, went on to observe that there was no rule to the effect that proper provision for an adult and presently able-bodied child did not extend to providing him or her with a house or money to buy one. His Honour noted that instances in which this had occurred included Re Buckland, deceased [1966] VR 404 and Ogden v Green [2003] NSWCA 352. 69 White J's decision was upheld by the Court of Appeal in Lloyd-Williams v Mayfield [2005] NSWCA 189. In the course of his judgment, Bryson JA at [31] pointed out that there were features to the case that were rarely encountered in claims under the Family Provision Act 1982 and rarely encountered together. First, the value of the shares designated as notional estate was very large in comparison with the estates ordinarily encountered. Secondly, because the appellant was otherwise amply provided for, the further provision ordered by White J could have no adverse effect on her wellbeing. Thirdly, the applicant did not have any needs in terms of lack of present provision for necessities and amenities of life on an ordinary scale of needs as understood in the community generally. 70 It was submitted that Mayfield was distinguishable by the absence of these features in the instant circumstances and because the appellant in Mayfield had filed no financial evidence and put forward no competing financial or other needs for the Court to consider. 71 There are differences of fact between Mayfield and the present case. But they do not affect the central proposition that there is no rule to the effect that proper provision for an adult and presently able-bodied child does not extend to providing him or her with a house or money to buy one. That proposition was not criticised by the Court of Appeal. Indeed, at [32], Bryson JA observed that it was open to White J and altogether appropriate to look well beyond needs when interpreting and applying community standards to decide what provision the court ought to order.

Adequacy of the provisions 72 The estate was not of the size in Mayfield where securities and cash valued at $5,345,661.65 passed to the widow by survivorship. It is, nevertheless, of a significant size. 73 The deceased recognised the needs of his children by extensive gifts to them during his life. That he should limit his bequests to them to $50,000.00 each when disposing of assets valued for probate purposes at over $2,400,000.00, particularly when neither son nor daughter was well off and displayed continuing needs of the kind that he had responded to by gift is, in my view, inappropriate. I find, having regard to all circumstances, that the provision made to Mr McGrath and Mrs Murray by the deceased during his lifetime and out of his estate was inadequate for the proper maintenance, eduction and advancement in life of each of them.

Mr McGrath's claim 74 Mr McGrath originally claimed $100,000.00 to offset the likely entitlement of his former wife to a share of any substantial increase in legacy awarded by this Court. In final address, an amount of $65,000.00 was claimed as the difference in settlement offers in the Family Court proceedings. In addition, Mr McGrath claims $33,000.00 as his costs of those proceedings. 75 I do not think that any of these claims should be taken into account in determining the extent of the inadequacy of the provision by the deceased. In my view, a parent's testamentary bounty should not be expected to cover the consequences of an adult child's divorce. Nor should an attempt be made to quarantine Mr McGrath against the normal application of the Family Law Act 1975 (Cth) in bringing each party's assets into a pool. Nor could such a quarantine be achieved because any increase in provision from the estate of the deceased will automatically increase the size of the pool. 76 Apart from the house, Mr McGrath's claim for motor vehicle, furniture, debts and moving costs total $90,425.00. The claim for the house stands at $500,000.00. 77 I do not think that this estate is so large that Mr McGrath should be provided with the entire cost of a house. He earns a steady income and will be entitled to a considerable amount upon retirement. He is in a position to service a loan if he has a reasonable equity in a home. 78 In my view, an appropriate level of further provision from the estate is $440,000.00 allowing $90,000.00 for his expenses and $350,000.00 towards the purchase of a house. In my view, the further provision should be in the form of an increased legacy of $490,000.00 which Mr McGrath may use as he sees fit. He will not be required to purchase a home if he sees a better use for the funds.

Mrs Murray's claim 79 Allowing a figure of $245,000.00 for the proposed extensions to her home, Mrs Murray's claim totals $894,311.00. 80 Again, I do not regard this estate as sufficiently large to provide Mrs Murray with a debt-free home. Her husband has returned to work and so has she. They are presently in a position to service a mortgage. 81 Nor do I think that it is appropriate to provide Mrs Murray with a fund to enable her to remain at home to tend to a fourth child for nine years if they have that child. While such a claim may be appropriate in a larger estate, the absence of a sufficient legacy to enable the constitution of such a fund does not, in my view, constitute inadequate provision by the deceased for the proper maintenance, education and advancement in life of Mrs Murray. 82 In my view, the appropriate increase in provision from the estate for Mrs Murray is $495,000.00 comprising $245,000.00 for the proposed extensions to the house and a contingency fund of $250,000.00. 83 Again, it is my view that the appropriate form of provision is by way of increase of Mrs Murray's legacy to $545,000.00. As with Mr McGrath, there will be no requirement that the legacy be used in any particular fashion.

Competing interests 84 I have had regard to the provision made by the deceased for Mrs McGrath. Leaving aside the question of costs, the estate stood at $1,671,724.00 on 2 August 2005. The increased legacies will reduce this figure to $736,724.00. It will be further reduced by any orders for costs that the Court may make. Mrs McGrath had already received from the estate as at 2 August 2005, $149,000.00. 85 Bearing in mind Mrs McGrath's independence means, this level of provision from the estate of the deceased in favour of the widow could not be regarded as inadequate.

Orders 86 I will hear the parties on the appropriate terms of orders and on costs. I direct the parties to bring in short minutes of orders reflecting these reasons.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Family Court Act 1975(Cth)

At a glance

Court

Decision date

Before

Source

Judgment (27 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (14)