Plaintiff v Defendant

2 Huw was raised by his parents, Edwin and Louisa Bruce, at the family home in Chelsea. He lived with his parents until moving into supported accommodation in 1992. He has three siblings: two older half sisters, Mary and Julie (the second and third defendants) and a younger full sister, Evelyn (the first defendant). Louisa died in 2002, and Edwin died in 2004.

3 The Chelsea house was in Louisa's name. In her will, she appointed her daughter, Julie, as executrix. The house at Chelsea (which was the main asset of Louisa's estate) was sold for $315,000. Probate was not granted upon Louisa's will until 28 October 2004, two days after probate of Edwin's will was granted to Evelyn as executrix following Edwin's death in 2004. In his will, Edwin divided his estate (which was effectively his interest in Louisa's estate, being the proceeds of the sale of the Chelsea property) equally between Huw and his siblings.

4 This proceeding was issued by Huw's administrator on his behalf on 26 April 2005, making claim for further provision from Edwin's estate under Part IV of the Administration and Probate Act 1958 ("Act"). During the course of the first directions hearing on 30 October 2007, counsel for Huw indicated that an order should be made that the entire estate should be paid to Huw. At trial, counsel for Huw submitted that he should receive three quarters of the estate.

5 Setting aside the question of whether adequate provision has been made for the proper maintenance of Huw (having regard to the competing claims of his siblings), the manner in which Louisa and Edwin's estates have been managed and distributed further complicates the task of determining Huw's application for further provision from what is a modest estate. The uncontradicted evidence regarding the administration of the estate is as follows:

(a) no action was taken to administer Louisa's estate until after Edwin's death;

(b) Julie organised a local (Coffs Harbour) solicitor to do the legal work for both estates, with Evelyn's agreement. The proceeds of the sale of the Chelsea house were distributed by this solicitor to the four children on around 5 November 2004, with Evelyn also receiving a cheque for $75,505.38 on Huw's behalf. Evelyn did not seek or receive any advice regarding any potential claim by Huw or whether the estate should remain undistributed until the time limit for any claim under Part IV of the Act had expired; and

(c) each of the siblings have used the money distributed to them for their own purposes: Evelyn for repayment of her housing loan and other expenses, and Julie and Mary for living expenses and overseas holidays. The distribution to Huw has been held by Evelyn's solicitor in an interest bearing trust account.

6 Accordingly, if further provision was to be made for Huw, Evelyn, as the executrix of Edwin's estate, would need to recover part or all of the estate which had been distributed to her or her sisters.

7 The parties relied upon affidavit evidence. Evelyn and a social worker, Ms Melanie Atkins, were briefly cross examined. However, there were no significant factual disputes about the needs and circumstances of each of the siblings, or any challenge to the qualifications or conclusions of Ms Atkins. Therefore, the issue facing the Court is how to consider the claim of Huw, who clearly has substantial needs, in the context of the legitimate claims of his siblings, none of whom are wealthy (and one of whom, the executrix, has considerable financial need), in circumstances where there is a modest estate which has been substantially distributed.

8 There is no dispute that the threshold question of whether the deceased had an obligation to provide adequate provision for the proper maintenance and support of Huw. The dispute between the parties is whether the provision made is adequate in all of the circumstances.

9 The administrator tendered evidence regarding Huw's physical health, living circumstances and financial resources. In particular, the administrator commissioned a report from a social worker, Ms Melanie Atkin. Her primary report was prepared in 2006, and updated in August 2010. The report considered the following matters:

(a) Huw's living situation;

(b) Huw's family and relationships;

(c) Huw's social interaction;

(d) his activities of daily living, including personal care, meals and nutrition and domestic skills;

(e) Huw's degree of community integration;

(f) Huw's leisure and recreational opportunities;

(g) Huw's mobility and transport options;

(h) his finances and control; and

(i) Huw's health and safety.

"2006

Huw Bruce is a 57 year old man who has Cerebral Palsy and BiPolar disorder; he has associated health issues including epilepsy, swallowing difficulties, urinary incontinence and constipation.

Huw lives in a shared house with 5 other people, with disabilities, in Nunawading. The house is owned and managed by the Department of Human Services (DHS). Huw has lived in the house since February 2002 and states he is happy there. He has his own bedroom and the house is modified for people using wheelchairs.

During weekdays Huw attends a local day centre for people with disabilities where he engages in a range of activities. He particularly enjoys writing and going on outings. At home Huw prefers to keep to himself, spending time in his room watching television and listening to music. He enjoys outings and particularly enjoys going to the beach, movies and going out to dinner. At present all outings are with other residents of the house.

Huw has severe physical disabilities; he is unable to stand or walk, his movements are often uncontrolled and jerking, his speech is difficult to understand he has significant swallowing difficulties. Huw is on a range of medications to manage his physical symptoms and Bipolar disorder. Huw does not have an electronic communication device but does have a spellboard to aid understanding of his speech.

Huw currently receives a pension and lives in State Government supported facility. He receives a fortnightly allowance for his needs. His spending was described as frugal.

Huw requires significant mobility support including an electric wheelchair, lifting equipment, and a modified van or taxi for transport.

2010

Huw is now 61 years old and very little has changed for him in the past 4 years; since the first report was prepared in 2006. He is still in urgent need of a new wheelchair and he is still in urgent need of an appropriate communication device. Other equipment that could improve his quality of life and independence is also still required included a chair to assist with shower and toilet, a computer and internet access.

On Wednesdays Huw now has a support worker to assist Huw with outings of choice.

Despite overwhelming difficulties Huw continues to maintain a sense of humour despite the difficulties created by his slow and difficult communication board. He is also a warm and generous participant in conversation."

"RECOMMENDATIONS

2010

Huw is now 61 years old and continues to have basic needs unmet and a life that varies considerably from that which the general community aspires to. Huw does not have:

• the appropriate support to facilitate communication

• the appropriate support for mobility and the 'support' (wheelchair' he has causes discomfort

• the ability to spend time with the woman he states he loves

• the choice of whom he lives with

• access to the range of aids, equipment, technologies, therapies that could minimize the effects of his disability

• spontaneous leisure and recreation

• a holiday

The following recommendations provide for what would improve Huw's quality of life; any additional funds made available (over and above what is recommended) could readily be used to assist Huw live a life closer to that which general community members expect.

To Have The Opportunity To Reach His Full Potential

Rarely does a person with a disability have access to all that can enhance their lives including assistive technology; aids and equipment; developmental education and support. There is always more sophisticated equipment, more advanced technology, higher or different skills and education available than any one of us are aware of it is therefore important to seek out what is possible rather than just what is known at the time.

The combination of Huw's significant impairments, reduced ability to move about and communicate and limited finances have reduced his opportunities to reach his full potential. At fifty plus years old, Hw and his support staff have discovered he has a love of writing; every opportunity should be taken to enable Huw to discover and develop further interests, and live a life that is full, enjoyable and has meaning.

2010

The State of Victoria Disability Act 2006 Principles include that each person with a disability:

5.2(c) 'realise their individual capacity for physical, social, emotional and intellectual development' (Parliament of Victoria, 2007)

Huw has already waited 4 years for essential aids and equipment (at the very least a wheelchair and communication device) with still no timeline for purchase. There does not appear to be any planning for what might be possible to enhance Huw's quality of life and capacities."

• "To Have the Opportunity To Reach His Full Potential.

• To Have A Range Of Meaningful Relationships.

• To Have Access To 'Whatever it Takes" To Reduce The Impact Huw's Disability Has On His Life.

• To Maintain and Where Possible Improve His Standard of Living

• Spontaneous, Safe and Independent Mobility."

13 Finally, the report made a number of detailed (and costed) recommendations regarding measures which could be taken to meet these needs, and improve Huw's quality of life. The total cost of implementing each of these recommendations is in the order of $101,470 for "one-off" capital expenditure, and an annual expenditure of $95,983.80.

14 Accordingly, even if the estate had not been distributed in the manner in which it had, and even if the parties had not expended substantial legal costs during the course of this proceeding, the entirety of the estate would not be sufficient to fund the implementation of Ms Atkins' recommendations and, in particular, be sufficient to provide a fund to generate sufficient income to meet annual expenses in the order suggested above.

15 Currently, in addition to the sum of $79,000 held on trust for Huw by the executors' solicitors, the administrator holds a further $20,000 on trust for Huw. On 15 November 2010, I made an interim order that $25,000 be released from the funds held on trust by the executrix's solicitor to finance the purchase of a new wheelchair and an electronic communication device. Accordingly, approximately $74,000 remains held on trust for Huw by the administrator and the executrix. The financial records provided by the administrator show that Huw's income from his pension and interest is substantially exhausted by his day to day expenses.

16 Accordingly, there is no doubt that Huw has substantial needs and that in an ideal world, substantial financial resources could be devoted to meeting those needs and substantially improving the quality of his life, both in terms of material comforts and enhanced opportunities for social interaction. However, this case highlights the fact that the world is far from ideal.

17 For completeness, Dr Peter Lovatt, Huw's general practitioner, deposed as follows:

(a) he has been Huw's GP for over ten years;

(b) Huw suffers from bi-polar disorder, constipation, epilepsy, poor swallowing with multiple episodes of aspiration, and urinary incontinence requiring condom/catheter drainage; and

(d) given his disabilities and health problems, his estimated life expectancy is approximately 10 years rather than the actuarially calculated estimation of 23.47 years for a man of his age.

18 Huw has three siblings: Mary Marsh, Julie Sherman, and Evelyn Matthews.

19 Mary Marsh was born in 1943 and is now 68 years of age. She lives in Coffs Harbour, New South Wales. She lives in a unit, which she owns mortgage free. In 2008 (the date her affidavit was sworn) it was valued at $290,000. She owns a car and has superannuation of $75,000, and savings of $3,400. She is divorced and receives the aged pension. She is in poor health, and has regular ongoing medical expenses. In her affidavit, she states as follows:

"That the sum of $75,000.00 received from this Estate has been applied by me as follows:

I have been on several overseas holidays. I have also had trips to Queensland to visit my daughter. I have also used the monies to supplement my pension and medical expenses, as well as for general home maintenance."

20 Julie Sherman was born in 1941 and is now 70 years of age. She also lives in Coffs Harbour in a unit which was valued at $280,000 in 2008, and is unencumbered. She is a widow and receives the aged pension and a small annuity from AMP. She also has $30,000 in savings, and a share portfolio worth about $6,000, offset by some credit card liabilities. She is also in poor health.

That the sum of $75,000.00 received from this Estate has been applied by me as follows:

I have used the monies for living expenses to supplement the pension. As cash assets are deemed to be earning interest the pension is reduced accordingly until the cash has been expended.

I have also been on an overseas holiday.

22 Evelyn Matthews was born in 1950 and is now 60 or 61 years old. She lives in Howlong in New South Wales. She deposed as to her financial position in 2008, and in November 2010. Together with her husband, she owns a property valued at $180,000 to $190,000, which has a mortgage of $130,000. They also have credit card liabilities of $10,000. They have no shares, and apart from Evelyn's superannuation balance of approximately $31,000, they have no other assets of any value. She is employed as a community care co-ordinator by Mercy Health in Albury, and earns approximately $35,000 per annum. Her husband is in remission from oral cancer, and receives a part disability pension. Evelyn also receives a part disability spouse pension which varies according to her earnings. She used her distribution from the estate to repay her part of her housing loan and for day to day expenses. In her affidavit sworn on 1 August 2008, Evelyn deposed that she and her husband spent a considerable amount of time and money between Louisa's death in 2002 and Edwin's death in 2004 maintaining the Chelsea property because of Edwin's inability to do so. She made at least 70 return trips from Howlong to Melbourne, and paid expenses of approximately $7,000. She estimates her total expenses at $30,000, and claims an entitlement to be reimbursed for this from the estate.

23 Further, in her most recent affidavit, she deposes as follows:

In net cash position whilst it is odd to say so, it would appear the Plaintiff is better off financially than I am.

24 Counsel for Huw submitted that Edwin's primary moral duty concerned the care of Huw, such that he should receive an amount equivalent to 75 per cent of the net value of the estate (or approximately $225,000). He submitted that while Huw's sisters have health problems, they are age related and nowhere near as severe as Huw's. He also noted that the older sisters owned their own homes and were able to travel and take holidays.

25 Counsel also noted that while the Chelsea house was in Louisa's name, the evidence is that its purchase was primarily funded by Edwin.

26 Counsel for the executrix submitted that while Edwin had a moral obligation to Huw, the provision made for him was adequate in all of the circumstances and the division of the estate in four ways is a sensible one. Evelyn, in particular, has poor health and, in some respects, her circumstances are worse than that of Huw.

27 In his written submissions, counsel for the executrix submitted the following orders ought be made:

(1) any further order or payment of moneys be paid by Mary Marsh and Julie Sherman to Huw Bruce; and

(2) the executrix's costs be paid from the amount held by her on behalf of Huw Bruce, and when taxed or agreed, the balance be paid to Huw Bruce.

28 The solicitor for Mary Marsh and Julie Sherman submitted that there was no basis that any order for further provision or with respect to costs should disproportionately affect his clients.

29 The test in determining whether a testator has made adequate provision for the proper maintenance and support of a claimant, and if not, what provision ought to be made is:

what provision a wise and just testator would have thought is his moral duty to make in the interests of the claimant.[1]

30 Therefore, as at the date of his death, Edwin was required to make some assessment of the respective claims upon his estate, having regard to the size of his estate, and the competing needs of his and Louisa's children and determine the appropriate manner in which his estate was to be distributed

31 This is not a case which requires an exhaustive analysis of the matters under section 91(4) of the Act. In my view, the following matters are relevant to determining whether adequate provision has been made for Huw:

(a) Edwin's will provided for the estate to be shared between the children and a court should not lightly disturb the testamentary intentions of the deceased;

(b) there is no basis for concluding that Julie or Mary should be treated any differently than Evelyn or Huw merely by reason of them not being Edwin's natural children: it is apparent that the four children were raised by Edwin and Louisa as a single family, even though Julie and Mary left home at a young age;

(c) however, despite their advancing age and related health problems, both Julie and Mary are in a substantially better financial position than either Huw or Evelyn;

(d) even if the whole of the estate was paid to Huw, the recommendations made by Ms Atkins could not be implemented;

(e) from a practical point of view, any award of further provision would cause hardship of varying degrees to his sisters; and

(f) as stated by counsel for Evelyn in his written submissions, "costs loom large in this proceeding."

What would amount to reasonable provision for Huw?

32 While the applicable test for determining claims under Part IV of the Act is not one of "reasonableness", it is helpful for the purpose of determining the threshold issue of whether the discretion to order further provision should be exercised. As noted above, Ms Atkins identified a number of deficiencies in Huw's current circumstances and the resources available to meet those. Based upon the recommendations made in the report (and using the headings in the report), it seems that the following matters are of particular priority:

(a) living situation: funds to refurbish and redecorate his bedroom and to purchase new linen;

(b) family and relationships: an electronic device to assist with communication (noting that funding for an electronic communication device was the subject of an interim order) and funding for support and travel to visit with a friend from a previous residence and to go on outings;

(c) social interaction: as above;

(d) activities of daily living: lifting equipment and other aids;

(e) "what people do during the day": computer and internet access;

(f) leisure and recreation: an occasional holiday;

(g) mobility and transport: lifting equipment, shower chair, and a modified van and/or funds for taxi trips (noting that funding for a replacement wheelchair was the subject of the interim order); and

(h) finances and control: the funds available for the purchase of new clothing are limited.

33 Based upon the report and experience (and taking into account the funds already released for purchase of a replacement wheelchair and communication device), I consider that Huw has the following priority needs for capital expenditure:

Repairs and refurbishment of his bedroom (including the purchase of new linen)

34 In addition, Huw has the following needs for recurrent expenditure:

35 Therefore, on the assumption that Huw has a life expectancy of approximately 10 years and no dependants for whom he would need to make provision after his death, a reasonable capital sum for Huw would be in the order of $100,000, which would enable immediate funding of the capital items referred to above, and could be utilised over the rest of his life to fund his recurrent expenses.

36 This sum does not make allowances for the following substantial expenses arising out of the recommendations in the report, as there is no prospect that funds for these matters are capable of being made available from the estate:

(a) allowances for recreation specialists, support workers and occupational therapists;

(b) health and dental care;

(c) regular holidays and weekends away;

(d) purchase of a modified van; or

(e) taxi expenses for daily trips.

37 The evidence from the updated report shows that Huw is less socially isolated than he was in 2006. He now visits a day centre four times a week, and has a support worker for a weekly outing, as well as weekly outings to go bowling. While no doubt his own van would improve his mobility, it is of limited use without support staff to accompany him. However, there is not sufficient funds on the estate to provide full-time or close to full-time support in addition to the purchase and maintenance of a motor vehicle.

38 Finally, there is no evidence that any funds are required for health care or dental treatment. While Huw has substantial health problems, neither he or his support workers refer to these needs being unmet.

Has Edwin made adequate provision for the proper maintenance and support of Huw?

39 The analysis above considers what might have been an appropriate legacy for Huw (taking into account the size of the estate) if the Court had an unfettered discretion to determine what would be an adequate provision from the estate. But it does not.

40 The Court must be careful to ensure that, in exercising powers under Part IV, it does not substitute the opinion of the Judge for the opinion of the testator as to what the best and fairest disposition is. As stated by Teague J in Schroder v Cozens[2] (at p.21):

The court does not have the power to substitute the opinion of the judge for that of the testator as to the best or fairest disposition of the property of the testator. If, and only if, it is decided that no adequate provision has been made, then the amount, if any, of any provision to be made by the court does require the exercise of a judicial discretion. But even then, the court is permitted to interfere only to the extent required to effect such a provision, and no further. The onus is on the applicant to establish that she is entitled to the exercise of the discretion. The threshold is not easily passed. . . . It is need, although not solely material need, with which the court must ultimately be concerned.

41 The High Court also considered these principles in Pontifical Society for the Propagation of the Faith v Scales[3]:

It has often been pointed out that very important words in the statute are 'adequate provision for the proper maintenance and support' and that each of these words must be given its value. 'Adequate' and 'proper' in particular must be considered as words which must always be relative. The 'proper' maintenance and support of a son claiming a statutory provision must be relative to his age, sex, condition and mode of life and situation generally. What is 'adequate' must be relative not only to his needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and the other demands upon it, and also what the testator regarded as superior claims or preferable dispositions. The words 'proper maintenance and support', although they must be treated as elastic, cannot be pressed beyond their fair meaning. The Court is given not only a discretion as to the nature and amount of the provision it directs but, what is even more important, a discretion as to making a provision at all. All authorities agree that it was never meant that the Court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court.

42 The analysis referred to in paragraphs 32 to 35 above (taking into account Huw's funds in trust and the funds already released for the purchase of the wheelchair and communication device) suggests an appropriate legacy for Huw would have been the sum of $105,000 (compared with the sum of $75,000 which was actually provided for under Edwin's will). However, the question remains: did Edwin breach his moral duty to Huw by dividing his estate equally between the four children?

43 In my view, the answer is no. Edwin was entitled to assume that his son would have secure accommodation and care for his day to day physical needs for the rest of his life. It is unlikely that Huw lived anything but a quiet life with his ageing parents before moving into supported accommodation. All of the siblings are in modest financial circumstances and, in some respects, more subject to the vicissitudes of life than Huw. It is unrealistic to have expected Edwin to have undertaken the detailed needs analysis and costing conducted by Ms Atkins. While the sum of $75,000 fell somewhat short of my assessment of what would be an appropriate sum for Huw to have access to, combined with his trust fund of $20,000, it is sufficient to finance capital spending of $35,000 (this sum includes the wheelchair and electronic communication device as well as the items referred to in paragraph 35 above), leaving a further $60,000 which could be amortised over his life to supplement his income and improve his quality of life. The discrepancy between what I consider would be a reasonable or appropriate sum for Huw to have at his disposal and his legacy under Edwin's will is not sufficiently large to justify exercising my discretion to make an order for further provision, particularly given the size of the estate and the competing claims of his siblings.

44 It is also relevant that Huw is essentially supported by the State, and the likelihood of him ceasing to receive such support is minimal. Of course, there is authority to suggest that a claimant's access to a pension is of limited relevance to the determination of whether a testator had made adequate provision for a beneficiary.

There would, I think, be strong public policy reasons against permitting the moral obligation of testators to make adequate provision for the proper maintenance and support of those with claims on their bounty to be deflected by resort to the expectation of the continued payment from the public purse to survivors of some in satisfaction of the testator's duty. Moreover, there could be no legitimate expectation that the payment of social service or old age entitlement would continue at any particular level on the same conditions, or be appropriately linked to rising costs. Further the provision of such benefits are subject to political vagaries. It is a fact well known in the community that receipt of the old age pension is now assets and means tested. Indeed, in this very case this issue has been partly addressed in relation to the possible provision of an additional source of income for the widow.

46 Further, in Shah v Perpetual Trustee Co[5], Roth J commented:

I think the wise and just testator would make provision for his widow out of his estate without regard to a means tested pension. The position could be different in the case where the competing claims on the testator would cause strains on his capacity to provide. (emphasis added) That is not this case.

47 This is also a case involving competing claims to a relatively modest estate. Each of Huw, Mary, Julie and Evelyn is either wholly or partially on government pensions. Apart from Evelyn, none have any other person to support them, and Evelyn's husband is at least partially incapacitated.

48 The exception suggested by Roth J was noted by Smith J in Coller v Coller[6], where he noted (at [15]) in a case where each of the competing beneficiaries were partially or fully dependent upon government assistance:

In comparing the positions of those beneficiaries with that of the plaintiff, it does not seem artificial to ignore completely their respective pension entitlements.

49 In this case, it is extremely difficult to foresee such a dramatic change in public policy that would result in a person with Huw's disabilities and needs bereft of income or secure accommodation. In particular, that prospect could not reasonably have been contemplated by Edwin at the time of his death.

50 Accordingly, the application for further provision is dismissed. I will make orders permitting the release of funds from the executor's solicitor's trust fund to Huw's administrator. I will hear the parties on the question of costs. However, I would need some persuasion to depart from an order that (a) the costs of the plaintiff and the first defendant be borne by the estate, and that (b) there be no order as to the costs incurred by Julie Sherman and Mary Marsh.

[1] Blair v Blair [2004] VR 69, 84

[2] Shroder v Cozens (Unreported, Supreme Court of Victoria, Teague J, 23 February 1990)

[3] [1962] HCA 19; (1962) 107 CLR 9

[4] [1992] VicRp 72; [1992] 2 VR 417

[5] (1981) 7 FamL R.97

[6] [1998] VSC 80