Robertson v Pearce [2010] NSWSC 124 | Case summary

16 I turn to consider the situation in life of the plaintiff and others having a claim on the bounty of the deceased. The plaintiff's situation in life 17 The plaintiff is 88 years of age with no dependents and is now in good health. He still drives and has a car. He lives in the deceased's home. He receives a pension which is part age pension and part disability pension of $1,345.17 per fortnight. Currently he has savings of $140,000. Apparently $38,000 of this is of doubtful value. It is in a fund which has been frozen and its value is said to be half its face value. The plaintiff, has already paid his solicitors for their fees in this case. 18 The plaintiff says he is owed what he says is $204,166, which is the amount of the loan to the deceased's grandson, Robert, plus interest. The likelihood of him receiving this, given Roberts financial situation, is remote. 19 The deceased had a good relationship with the defendant. 20 The defendant suggested that there were a number of arguments between the plaintiff and the deceased but the two of them appear to have survived a 50 year marriage. The defendant's recollections were only of some events in her childhood. The plaintiff cared for the deceased for some time with only four hours a week respite care to allow him to do the weekly shopping. The deceased had become incontinent at the end of this period. 21 The deceased also looked after the plaintiff in 1973 for six months when he was in injured. Plainly there was a caring relationship on both sides. The defendant's situation in life 22 The defendant is 60 years old with two children who are not dependent upon her. She has not worked since 1971 and her husband lost his job in 2009. They are presently living off his long service leave while he looks for further work. They have a home purchased in 2004 for $462,000 with a mortgage on it of $150,000. The defendant is in reasonable health. 23 There is nothing to suggest that there was anything other than an ordinary relationship with the deceased until the end when she fell out with the plaintiff. She did not visit the deceased for the last three years when she was in a nursing home except the day before she died. Robert John Pearce's situation in life 24 Robert is 38 years of age, married and has two young children aged eight and four years. He works as a retail manager for K-mart Australia and earns $54,500 per annum. He had a failed business in which he lost $180,000. Even so, he has two properties, an investment property at Glenmore Park valued at $350,000 and he has his residence which is valued at $480,000 on the central coast. This makes a total of $830,000. However, his current liabilities are in the order of $500,000. 25 He also owes the plaintiff the sum I have referred but says the plaintiff has told him that this is his and his sister's inheritance. On this basis, in case the plaintiff does not ask for repayments of the monies, he proposes to give his sister $50,000 once the plaintiff dies. 26 He had a good relationship with the deceased and also with the plaintiff until recently and this is perfectly evident given the fact that the plaintiff provided him with funds. Joanne Stevens' situation in life 27 Joanne is 35 years old, married with three young children aged ten, six and three years. She presently receives a pension of $450 a week. That income is far less than her expenses as her husband is ill. He will be off work for six to twelve months and needs hip surgery. Two of her children have eye problems. They apparently own their home with a mortgage of $230,000 and credit card debts of $4,500. She had a good relationship with the deceased. Discussion 28 It is necessary to see how the plaintiff says he has been left without adequate and proper provision for his maintenance, education and advancement in life. 29 The plaintiff has some funds for contingencies, although they may be depleted by the costs of this case. He has adequate income and his claim is that he should receive the fee simple in the house so that he will have future flexibility to cope with changes in life. He hopes he can live in the house for another 10 years when he would probably need a specialised retirement accommodation. His says his enquiries suggest the present cost of such accommodation in his area is in the order of $300,000. The defendant for her part does not accept this need and gives an undertaking to the Court in these terms: "1. The Defendant agrees not sell or attempt to sell 7 Bungalow Rd Peakhurst ('the property') unless requested by the Plaintiff. 2. Alternative accommodation if and when requested all required by the Plaintiff will be provided by the Defendant after the sale of the property at which time the legal costs of the Plaintiffs proceeding will be paid. 3. In connection to 2 above once the Plaintiff no longer desires to reside at the property and requires accommodation in a retirement village that Defendant will purchase such accommodation of his choosing from the sale proceeds of the property for him to reside in for life. 4. In the alternative if the Plaintiff no longer desires to reside at the property or in a retirement village and wishes to move elsewhere due to his age, health or other needs and requires nursing home accommodation or hospital care cover the Defendant will pay all nursing care or hospital fees in excess of the plaintiff's pension. 5. The Defendant authorises the Plaintiff to carry out any essential repairs that may be required to the property including painting and updating the kitchen and to reimburse the Plaintiff for such repairs from the sale of the property once sold. 6. The Plaintiff is entitled to the dining room suite, the Royal Dalton dinner set, the silver canteen service of cutlery and all crystal cut glass presently at the property. 7. In the alternative to (1) to (6) above, if requested by the Plaintiff the Defendant will place the property on the market within 14 days of such request being made and the Defendant will pay the Plaintiff one quarter of the net sale proceeds of the property after payment of the Plaintiffs and Defendants costs of these proceedings. Dated this 25 day off February 2010." 30 Her evidence suggested that retirement accommodation in a nearby suburb would cost in the order of $165,000. 31 These are always difficult cases and the law has dealt with them differently at different times. In the 1970s and 1980s there were a number of decisions of single judges of this Court where they have held that a life interest with particular attributes was appropriate. (See Crisp v Burns Philp Trustee Co Ltd, Holland J 18 December 1979; Banks v Hourigan, Waddell CJ in Eq, 2 March 1989; Cameron v Hills, Needham J, 26 October 1989.) This perhaps is reflected in matters mentioned in the High Court in White v Barron (1979 - 1980) 144 CLR 431 where at p444 Mason J said: "A capital provision should only be awarded to a widow when it appears that this is the fairest means of securing the proper maintenance. However, the provision of a large capital sum for a widow who is not young may, in the event of her early death, result in a substantial benefit to her relatives, contrary to the wishes of the testator, when a benefit of another kind would have afforded an adequate safeguard to her personally, without leaving her in a position in which she could benefit her relatives from the proceedings of the legacy." 32 He appears to be the only member of the Court to have adverted to this aspect. 33 A change in the High Court's attitude to the provision for widows, no doubt in response to changes in community expectations, is illustrated by the fact that in this case it disapproved of observations made in Worladge v Doddridge (1957) 97 CLR 1 that as a general rule in order for provision in favour of a widow should be confined to widowhood. Stephen J, who was one of the majority in White v Barron at pp 438-440, went to some lengths to point out that the jurisdiction was one which should not be unduly confined by Judge-made rules of purportedly general application. 34 In Elliott v Elliott (24 April 1986, unreported ), Glass JA said in reference to the above quoted statement: "The statement there was made in an evidentiary context where the provision was made at the expense of the children of a previous marriage who had some claim on the testamentary bounty of the deceased. The residuary beneficiaries here have none and it seems to me that no fairness is owed to them." 35 McHugh JA agreed with his judgment and the President agreed substantially with the reasons given by Glass JA. He added nothing on this aspect. I do not think that it can be said that they Court of Appeal has adopted the statement of Mason J in White v Barron. All that can be said is that they distinguished the situation before them. 36 By the late 1980s the Judges in this Division were taking a slightly different view. For instance, in Court v Hunt (14 September 1987, unreported) Young J said: "Old age is a growing problem in our community and judges who sit in Family Provision Act applications get experience, as well as their own experience in the community, as to what happens when people reach the age when they can no longer look after themselves and one Judges the evidence in these sorts of proceedings against that background knowledge." 37 His Honour went on to talk about the assumptions one could make about the fact that frequently people, once they pass 55, had to change their accommodation and locate themselves either in retirement villages or nursing homes, which have different requirements for capital contribution. 38 After talking about the evidence necessary, his Honour went on to say: "In many cases these days a life estate will not be sufficient because it does not cover the situation of the plaintiff moving from her own home to retirement village to nursing home to hospital. Sometimes it is possible for a Court to alter a life estate to a more flexible non-capital provision, such as was done by Holland J in Crisp v Burns Philp Trustee Co Ltd, 18 December 1979, unreported, but noted in Mason & Handler Probate Service at page 13206. Other times the proper provision is for a fee simple gift, realising that this property will be sold and will be turned over into the appropriate property to maintain the widow for the rest of her life. Care also has to be given by those administering the plaintiff's property to ensure that there is sufficient income being raised after tax that will provide for maintenance levies and the other payments that have had to be made by the widow." 39 More recently the Court of Appeal on a number of occasions has referred to this problem. In Golosky & Anor v Golosky (5 October 1993, unreported), Kirby P summarised the proper provision for widows (and thus the plaintiff in these proceedings) in the following terms: "2. In testing the Master's decision it is appropriate to keep in mind the principles which govern that the approach which he was obliged to take to the widows 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 off testamentary disposition, to limit its disturbance of the two stages will to that which is necessary to achieve the purposes of the Act, and not more. See The Pontifical Society for the Propogation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9, 19; White v Barron and Anor , above, 458; Hunter, above 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 in 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 has been said that in the absence of special circumstances, it will normally be the duty of the 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 (above) 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 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. (e) Considering what is "proper" and by inference what is "improper" is 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 in the claimant; the character and conduct of the complainant; 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 (CA), 252." 40 In talking of the need to provide a house and a sum for contingencies Kirby P is clearly referring to passages in Luciano v Rosenblum (1985) 2 NSWLR 65. In the judgment of Powell J at first instance in Elliot V Elliott (18 May 1984, unreported) his Honour said that such a type a provision only applies where it can be said that there has been a long and happy marriage and a widow has helped build up the estate of the deceased. This seems to have been generally adopted over the years in many subsequent cases. 41 In Permanent Trustee v Fraser (1995) 36 NSWLR 24 at 47 Sheller JA had the following to say: "Once it is accepted that adequate provision for her proper maintenance and advancement in life required secure accommodation for life as well as a capital sum to meet exigencies, this need is not met by giving her only a life interest in the home unit. Commonly people in the community need to move from their own home into a unit in a retirement village and then into nursing accommodation and then into total care accommodation. See Young J in Christie v Christie . Then it can be met if the respondent is given the home unit absolutely. She then has a greater flexibility as well as greater security." 42 In Salmon v Blackford [1997[ NSWCA 274, the Court of Appeal was dealing with a case where the trial judgehad given a fee simple to the deceased widow. Sheller JA said: "The principal point according to Mr Gibb was that his Honour failed to take into account that by reason of the widows advanced years and the probability that her adopted son would be the natural object of her bounty, the effect of the order made was likely to be that the adopted son, whom the deceased had no intention to benefit, would be that the beneficiary of half of the estate. I have great difficulty in seeing how a submission of this sort has any weight in the circumstances of this case. The matter that this Court must consider is whether the order that his Honour made was in such terms that one could only come to the conclusion that in some way his discretion must have miscarried. It is well established that proper provision is not to be measured solely by the need for maintenance. It should, in the case of this respondent and in the circumstances of this case, free her mind from any reasonable fear of any insufficiency as her age increases and her health and strength files. I must say in this regard that her life expectancy, according to the tables, or something over 11 years at the time of the hearing. If one comes to the conclusion that for her proper maintenance and order such as the present is appropriate, it seems to me to matter not at all that she has an adopted son of an earlier marriage and that he may be the ultimate beneficiary of her penalty." 43 No reference was made in either of these cases to the comments of Mason J in White v Barron. In Permanent Trustee there were no competing claims by children of the first marriage. In Salmon v Blackford there were children of the first marriage but they appeared well off and the claim was thus minor. 44 Recently in Hertzberg & Anor v Hertzberg [2003] NSWCA 311 McColl JA referred with approval to Golosky v Golosky and said [34]-[35]: "34…section 9 (2) of the Family Provision Act directs the Court to consider the issues of jurisdiction and the exercise of discretion at the time of the proceedings, not the time of the will, and in this case the deed, were made. In reaching his decision the Acting Master took into account community expectations. He referred to Young J's observations in Blackford v Salmon , unreported, 27 July 1994, in which his honour said: 'It seems to me that for a widow of a 30 year marriage who has lived in the house for some time and who continues to wish to live there, the expectation in the community would be that a wise and just testator would have left her house in fee simple.' 35. His Honour's judgment recognised the community expectation that a testator should make provision for a widow to ensure that she can lead an independent and dignified life. That prospect is diminished when the widow does not have the benefit of the fee simple, but rather, a right of occupation of her home with a provision for expenses associated with that right being left in the hands of the executors." 45 This also was a case where there was no competing claim. It seems to me that the comments of Mason J in White v Barron should still be given consideration when one is considering a situation of competing claims. 46 It is, however, worth noting the comments of Young CJ in Eq in Marshall v Carruthers [2002] NSWCA 47. His Honour agreed with the comments of Hodgson JA and added: "[72] Mr Ellison for the respondent strongly submitted that a person who makes a claim as a spouse of a class (a) eligible person is entitled to take comfort from the words of Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65 at 69 that a spouse is more or less entitled to have a home plus income to enable her to live in the style to which she is accustomed provided out of the estate. Indeed this passage is actually a summary of a similar but longer statement made by Powell J in Elliott v Elliott 18 May 1984, unreported, which was approved by the Court of Appeal on 24 April 1996 and which is set out in the learned Master's judgement. [73] It must be remembered that Powell J put his proposition as a 'broader general rule'. However, there is in fact no 'standard former spouse' to which one can just apply to that proposition as a rule of thumb. [74] Powell J's broader general rule may not be a good guide as to what the Court will consider is the duty of a testator towards a spouse except in the case of a financially dependent spouse where there is a history of bringing up children with the deceased or in supporting the deceased while he was amassing his fortune. The broader general rule may well be inapplicable in cases of other spouses. Indeed, the cases in the first half of the 20th century show that as far as widowers were concerned, the proposition was quite untrue." 47 Similarly in a [2004] NSWCA 170 Bryson JA, reviewed the authorities and concluded that the adoption of any such preconceived position or formula was likely to result in error, stating at par [19]: "In the application of the test in section 7, and the exposition thereof in Singer v Berghouse 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 opponent's 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." 48 Ipp JA added at par [2]: "I would add, however, that where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, will ordinarily result in the needs of the widow being given primacy. That is simply because, in such circumstances, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event the need of the widow would be greater than that of the others." 49 In the present case I do not know what the plaintiffs testamentary disposition might be. All I have is indications of his views about benefiting the deceased's grandchildren. He was not cross-examined on the subject. 50 Here we have a marriage of 50 years duration which I accept can be described as a happy and very caring one on both sides. Importantly the plaintiff has contributed to the cost of the house. This is both by way of his contribution initially of £1,000 to the £8,650 purchase price of the house but also by his provision of his salary for the whole of his working life. Even when he was injured for seven months his employer continued to pay him. 51 In contrast, the deceased only work for four years from 11 AM to 2 PM four days a week as a part-time cashier at David Jones. I have no doubt she worked at being a parent for the rest of the time. However, in terms of economic input it is hard to see that if there had in fact been a divorce at the end of this marriage he would have received less than half of this house. He has effectively been deprived of this asset to which he contributed during the long period of this marriage. 52 He needs to do some repairs to the house which, although not substantial, he will at present be repairing the asset for the defendant's children to inherit. 53 There is also the unfortunate breakdown in relations with the defendant. She refused to return the $27,000 when the urgency of its purpose had receded as she had spent it on other matters. This unfortunately causes the possibility of further friction in the ongoing relationship between the defendant and the plaintiff which will necessarily be involved if any Crisp Order is made or the undertaking of the defendant is accepted. 54 I appreciate the situation of the defendant and her children. The defendant is in a difficult situation with her husband being out of work and her children are also in very difficult circumstances. Those needs are immediate. But it has to be appreciated the deceased can only provide for all of her dependents if she leaves an estate of a substantial size. This is not the case. 55 In the circumstances to which I have alluded, because the main obligation of the deceased was towards her partner, and now widower of some 50 years standing, I think the only proper provision is that he should receive the whole of the estate. 56 The plaintiff has offered to pay the defendant's costs. The defendant has quite rightly defended the case as she is entitled to have the Court rule on the matter and decide it. As I have indicated, these are not easy matters which sometimes go one way and sometimes they go another. 57 In the circumstances of this case, I think the appropriate order is that the plaintiff receive the whole of the estate. 58 Accordingly, the orders I make are:

Robertson v Pearce

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