Lloyd-Williams v Mayfield [2005] NSWCA 189 (7 June 2005)

CITATION: LLOYD-WILLIAMS v MAYFIELD [2005] NSWCA 189

FILE NUMBER(S):

40548/2004

HEARING DATE(S): 02//05/2004

JUDGMENT DATE: 07/06/2005

PARTIES:

Suzy Carolyn Lloyd-Williams - Appellant

Barbara Irene Mayfield - Respondent

JUDGMENT OF: Giles JA Bryson JA Stein AJA

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): E/D 3186/01

LOWER COURT JUDICIAL OFFICER: White J

COUNSEL:

J.R. Wilson S.C. with L. Ellison - Appellant

D. Officer QC with N. Murray - Respondent

SOLICITORS:

Brophy Bridge & Mirow - Appellant

Berne Murray & Tout - Respondent

CATCHWORDS:

FAMILY PROVISION – adult daughter – large estate – father died intestate aged 85 – share of estate passed to daughter aged 57 – daughter supported and housed by family rural enterprise principally owned by husband and conducted by family members including son and son-in-law – no pressing need for maintenance - $41,079 under intestacy to daughter, notional estate $5,345,661 on survivorship to widow (W2) who died after 16 months, thence under widow’s will to father’s niece – White J awarded $850,000 referable to advancement – niece appealed and contended for $150,000 – examination of reasoning leading to award and assessing amount – no error, appeal dismissed.

LEGISLATION CITED:

Family Provision Act 1982

Wills, Probate and Administration Act 1898

DECISION:

Appeal dismissed. Costs orders see [44].

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

40548 of 2004

GILES JA

BRYSON JA

STEIN AJA

TUESDAY 7 JUNE 2005

SUZY CAROLYN LLOYD-WILLIAMS v. BARBARA IRENE MAYFIELD

Judgment

1 GILES JA: I agree with Bryson JA.

2 BRYSON JA: The appellant, defendant in the Equity Division, appeals against orders made by White J on 15 June 2004, for reasons published on 31 May 2004, by which the respondent, plaintiff in the Equity Division, is to be paid a legacy in the sum of $850,000 out of the notional estate of the late Mr Leonard John Stewart (“the deceased”). The appellant contends that White J should have ordered that the respondent be paid a legacy of $150,000. Intervention by the Court of Appeal is subject to the restraint on the exercise of appellate power over discretionary decisions referred to in Singer v Berghouse (No. 2) [1994] HCA 40; (1994) 181 CLR 201 at 212.

3 Leonard John Stewart late of Earlwood, New South Wales, died intestate on 31 December 1999 aged 85 years, and the Equity Division granted letters of administration of his estate to his widow Mrs Shirley Stewart on 7 March 2001. Mrs Shirley Stewart died on 7 May 2001, and the appellant is the executrix of her will and sole beneficiary of her estate. The appellant is the daughter of Mrs Muriel Lloyd-Williams, the sister of the deceased; hence the appellant is the deceased’s niece and the respondent’s cousin.

4 The respondent who was born on 10 January 1942 is the elder of the two daughters of the first marriage of Mr Stewart; his younger daughter Mrs Judith Simpson (“Judith”) predeceased him and is survived by Mr Adam Simpson her son. Mr Stewart and the respondent’s mother were divorced on 26 January 1955; he married Mrs Shirley Stewart on 5 October 1968 and there were no children of his second marriage. After her parents’ divorce the respondent lived with her mother in Melbourne while her sister Judith lived with Mr Stewart in Sydney. The respondent spent many school holidays in Sydney with her father and Judith, and for some years maintained contact with her father in her adult life.

5 The respondent married Mr Donald Mayfield on 5 July 1968. Neither the respondent nor Mr Stewart attended the other’s wedding in 1968. The respondent and Mr Stewart met at Judith’s wedding in 1969 but did not meet again for 26 years; there was little contact in those years, and the contact which did occur was mainly by telephone. The respondent has a daughter and two sons born in 1969, 1971 and 1974. Communication between Mr Stewart and the respondent resumed, or became much more intense in 1995, when Mr Stewart and Mrs Shirley Stewart spent Christmas at Tuloona, a property then managed by the respondent’s son-in-law Mr Christopher Dinges and the home of the respondent’s daughter Mrs Imogen Dinges.

6 The assets which passed on Mr Stewart’s intestacy are modest; they include a house at Earlwood valued for the purpose of grant of administration at $350,000.00 and other property valued at $63,247.40. Mrs Shirley Stewart exercised her right under s.61D of the Wills, Probate and Administration Act 1898 to take the matrimonial home and this exhausted her entitlement on intestacy. The remaining assets in the estate passed equally to the respondent as surviving daughter and to Mr Adam Simpson, the son of the deceased’s daughter Judith; White J valued the respondent’s share at $41,079.50.

7 Immediately before his death the deceased and Mrs Shirley Stewart jointly owned shares, securities and a bank account; the value of these assets for the purpose of the application for probate of Mrs Shirley Stewart’s will was given as $5,345,661.65. All these assets passed by survivorship to Mrs Shirley Stewart, and upon her death all her property passed to the appellant. In the application for probate of Mrs Shirley Stewart’s will the appellant gave the value of the whole of Mrs Shirley Stewart’s estate as $8,257,820.29.

8 No party to the present proceedings maintains that, if provision ought to be made for the respondent, any part of the burden of that provision ought to fall on assets which passed upon the intestacy. The claim is that jointly owned assets which passed to Mrs Shirley Stewart by survivorship should be designated as notional estate, and in the course of the proceedings it became common ground that if White J was satisfied that an order for provision ought to be made, an order could be made designating as notional estate of the deceased a one-half interest in the shares which were jointly owned until his death; his Honour did so. It was agreed that the value of that one-half interest as at 13 May 2004 was $3,546,845.50. There was evidence of occasions on which the deceased spoke in terms which showed that he intended or contemplated that his shares would constitute provision for the respondent or that provision for her would be made out of them; however he is not known to have made any such arrangements, and White J did not treat giving effect to some promise or arrangement made by the deceased as a ground on which provision should be ordered.

9 In 1929 Mr Mayfield’s father acquired a small part of what is now a farm called Oakleigh in Western Victoria, near Cavendish and about 32 kilometres from Hamilton; since then there have been many contiguous acquisitions. Mr Mayfield is a farmer. He inherited Oakleigh from his father and has been living there with the respondent since their marriage. The respondent’s financial interests and affairs are bound up in Oakleigh and in the Oakleigh Partnership. Oakleigh now contains 2767 acres, of which 2161 acres are owned by Mr Mayfield and 606 acres by the respondent and her husband jointly. It should be remembered, as a small but significant part of the facts, that most of the land at Oakleigh on which the respondent’s financial position depends is owned by her husband and not by herself, and it is not accurate to think of her as a co-owner of Oakleigh. Talasea, a property nearby, comprises 373 acres and is owned by the respondent’s daughter Mrs Imogen Dinges and her husband Mr Christopher Dinges. The Oakleigh Partnership (“the Partnership”) operates on both properties. From 15 June 1998 onwards the members of the Partnership have been Oakleigh Pastoral Co. Pty Ltd (“the Company”) as to a 10% share and the trustees of the Mayfield Family Trust (“the Trust”) as to a 90% share. The Mayfield Family Trust is a discretionary trust; the trustees are the respondent, her husband, their son Mr Bradley Mayfield, their daughter Mrs Imogen Dinges and their son-in-law Mr Christopher Dinges; the respondent and her husband are the appointors who have the power to remove trustees and appoint others. The trustees have discretionary power to control distribution of income of the Trust among beneficiaries, and the beneficiaries include the respondent and other family members. The shares in the Company are owned by family members; family members have various classes of shares which carry entitlement to dividends of profits; but only the shares owned by the respondent and her husband are entitled to distributions of capital, including distributions on winding-up.

10 Continuation and success of the Partnership and the other arrangements depend on the continued support and participation of the respondent and her husband, especially on their continuing to make Oakleigh available for the operations of the Partnership. There is no indication that their support and participation will not be forthcoming, and the arrangements of the Partnership embody the business affairs of the respondent, her husband, Mr Bradley Mayfield, Mrs Imogen Dinges and Mr Christopher Dinges, the occupations of the three men and the income and support of the three closely-related families. Oakleigh was valued at the time of trial at $3,043,700.00; there was not a separate valuation of the jointly owned 606 acres.

11 It would not be usual that a married adult daughter (the respondent), who with her husband has the benefit of ownership of a pastoral property worth more than $3,000,000, and shares with him opportunities to control the pastoral enterprise conducted on it and the disposition of income, would obtain a favourable opinion of the Court on the issues under s.7 of the Family Provision Act 1982. However generalisation is of little use in this field and the outcome of each case depends upon the opinion of the Court formed having regard to the circumstances of that case on what provision ought to be made.

12 In the present case, it is not solely in pursuit of financial advantages for themselves that the respondent and her husband participate in the Partnership and the Trust, and it cannot be expected that it will ever be; as is quite familiar in rural life, they are participating in a continuing enterprise involving the interests of several generations of closely related persons. Disrupting the arrangements would disrupt the pattern of family relationships upon which their lives and happiness are formed, and would also disrupt the interests, expectations and life plans of close relatives with whom they feel a sense of identity.

13 The judgment of White J sets out a number of transactions which well illustrate that business affairs of the Partnership are not conducted only for commercial advantage and cannot be expected to be. The respondent, her husband and the Partnership have minimal cash resources; most of their needs are met by purchases charged to credit cards which are paid by the Partnership, and the accounts of individuals with the Partnership are adjusted, in transactions which the respondent and her husband do not fully understand and carry out in accordance with the advice of their accountant. White J found: “One of the reasons for the establishment of [the Partnership] was to permit the minimisation of tax and the maximisation of allowances between members of the family so that the burden of taxation of the family overall would be minimised.”

14 Relatively large loan account debits, and at other places credits, of the respondent, her husband and other family members, appear in the accounts of the Partnership, the Trust and the Company from time to time, and are dealt with by transactions including gifts and releases upon the advice of the accountant; I describe these debits and credits as Fairy Gold, as they would disappear at a touch and are not truly accessible. There have been quite significant distributions of trust income to the respondent and the amounts vary greatly from year to year. For 2002-2003, which was the last year of income distribution at the time of trial, the trust income recorded as distributed to the respondent was $66,105.00 and the income of the Partnership was $369,251.00. By contrast the Partnership’s income in 2000-2001 was $91,116.00 and the trust income treated as distributed to the respondent was $20,425.00.

15 The respondent has some further assets which are deeply involved in the affairs of the Partnership, the Trust and the Company, including a superannuation entitlement, a loan to the Company, shares in the Company, and a debt from the trustees for a distribution of trust income which was not paid. She has an expectation of further income as a discretionary object of the Trust; she has shares in listed companies valued at $9,620.00, but has no cash or credit with the bank. She has several liabilities, including a credit card debt, a debt for income taxation, a large loan account with the Partnership, and a liability to Mrs Imogen Dinges and Mr Christopher Dinges for $30,000.00 advanced for costs of litigation. It is unlikely that the loans owing by family members within the structure of the Partnership and Trust will be enforced as an attempt at enforcement could only be expected to disrupt the functioning of the Partnership and Trust, and could perhaps lead to the Partnership being wound-up.

16 I also classify the liabilities of the respondent as Fairy Gold; it can be expected that they will be resolved by transactions of the Partnership or related affairs without burdening the respondent personally. The respondent has a large contingent liability on a guarantee of the Partnership’s debt to National Australia Bank; her husband is also a guarantor and the debt is secured over Oakleigh; as there is no reason to fear default it is unlikely that this obligation will bear on her personally. Although Mr Mayfield owns most of Oakleigh in his own right, his position in relation to the obligation to National Australia Bank is generally similar to the respondent’s position. White J gave the following summary after reviewing evidence relating to their assets (Red 34[84]):

84 In summary therefore the plaintiff and her husband have very little set aside in superannuation. Oakleigh is predominantly owned by Mr Mayfield. The income of the farms in the last three years has been sufficient to support three families and partly fund the costs of the litigation, with the balance of those costs being funded by borrowing on overdraft. The plaintiff and her husband owe money to the Oakleigh partnership, but in turn are owed money by the trustees of the discretionary trust and the company. It is unlikely that any of the debts between the individuals, the partnership, the company and the trustees will be called up.

17 In her evidence the respondent indicated a number of uses to which she would put any provision for her out of the notional estate; most of the matters she referred to would primarily benefit the Partnership, with indirect benefits to her. While observing that there would not be any constraint on how the respondent could use the provision ordered, White J said (Red 35 [87]): “...I must assess what is proper provision by reference to her need for proper maintenance and advancement in life, not the needs of the Oakleigh partnership or her husband and children.” Senior Counsel for the respondent put forward a number of matters for which provision could be used. One related to the provision of sufficient sum to discharge the respondent’s debts, including debts of the Oakleigh Partnership of which she was a guarantor, or at least her share of the debts. His Honour gave extended consideration of this claim, but declined to act on it, the principal reason being that the primary function of such a provision would be to advance the interest of the Partnership. His Honour said (Red 38 [94]) to the effect that provision of money to discharge or reduce the Partnership debt would not be a provision which is proper for the respondent’s maintenance or advancement in life; although it could arguably be characterised as one for her advancement in life, its primary function would be to advance the interest of the Partnership.

18 White J went on to review evidence relating to consideration which had been given to succession planning, including transferring Oakleigh into a land trust, which would be a discretionary trust similar to the Mayfield Family Trust. The respondent and her husband did not adopt this proposal; it is their intention not to sell the land unless perhaps compelled by economic considerations. White J found (Red 40[98]):

It is not their intention to sell all or any part of the land in order to obtain capital which they can use to fund their retirement. They regard such a sale as being a breach of faith towards their children.

His Honour also found: “There is nothing unreasonable in the plaintiff’s and her husband’s intentions.”

19 In coming to a decision to order a provision of $850,000 for the respondent White J had regard to three elements:

1. A fund on which the respondent could draw to purchase reasonable accommodation in Hamilton, Victoria, for herself and her husband when Mr Mayfield winds down his active labour on the farm.

2. A fund sufficient to provide the respondent with secure income which is not dependent upon distribution from the Trust or the Partnership continuing to meet her expenses.

3. An amount to take into account of other contingencies.

The first two of these elements are challenged on appeal; the third is not. The total of the provision identified by White J was $893,950 but his Honour had regard to the respondent’s entitlement of $41,079.00 under the intestacy, and rounded the figures down to produce $850,000 as provision to be ordered out of the notional estate.

20 The first element was put forward by Senior Counsel for the respondent in these terms:

b. An amount to provide a house in Hamilton for the plaintiff and her husband when her husband retires from active work on the farm.

White J reviewed the facts bearing on this claim and his considerations include the following (Red 39 [95]):

In their present circumstances the plaintiff and her husband see no prospect of their being able to leave the farm. The plaintiff’s opinion was that for them to be able to move away from Oakleigh or entirely to retire from work on it, the property would have to be sold. Neither the plaintiff nor her husband is prepared to do this. It is their intention that the property be left intact so that it can be passed on to the next generation. However, if money were available for the purpose the plaintiff would like to be in a position to be able to move to Hamilton when Mr Mayfield is presently 66. He has suffered from lower back problems for a number of years. In 2003 he suffered a number of broken ribs and other bones in an accident which exacerbated the difficulties of his lower back. Mr Mayfield said that ultimately he would slow down and pass on the farm to his children but that he had not yet been in a position to work out how that should be done. At the moment, as it takes the efforts of each of Mr Mayfield, Christopher and Bradley to work the farm, he does not presently see how he can slow down.

21 It was contended and it appears that White J accepted that the respondent and her husband had secure accommodation on Oakleigh and a reasonably assured income from the Partnership. His Honour made a review of case law relating to proper provision for an adult and able-bodied child, and observed: (Red 44 [110])

However 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.

His Honour then made a review of the actual, likely and possible circumstances of the respondent, including Mr Mayfield’s then age of 66 years, his retirement at some future time, and the continuation of the affairs of the Partnership and Trust when Mr Mayfield is no longer actively working on the farm. His Honour also reviewed evidence relating to the cost of housing in the Hamilton region. His Honour accepted an estimate given in evidence by Mr Horne, a financial adviser residing in Hamilton, for $350,000 as a reasonable allowance for a suitable property.

22 After considering evidence relating to the cost of housing in Hamilton White J found (Red 51[32]):

I am prepared to accept the estimate of $350,000. 00 as being a reasonable allowance for a suitable property for the plaintiff in the Hamilton district, bearing in mind that the property should be large enough so that children or grandchildren and other relatives or friends could stay with the plaintiff and her husband. There is no evidence of the likely movement of property prices in Hamilton over the next few years. I must proceed on the basis that if $350,000.00 is invested it will be reasonably sufficient but not excessive for the purchase of such accommodation in a few years time.

There is no condition requiring the expenditure of this part of the provision on housing, or its investment during an interim. There is no concrete proposal for the purchase of a house, or for the respondent and her husband to leave Oakleigh and move to a house in or near Hamilton at any clearly established time, nor for Mr Mayfield to give up active work.

23 The Trial Judge then went on to make provision for the respondent’s maintenance. His Honour adopted a figure, based on estimates given by the respondent and her husband, that their likely expenses after retirement were in the order of $500 per week each; there were no details of the manner of calculation of this amount. White J found (Red 52[135]):

... there is necessarily an element of speculation in this kind of exercise. The sum of $500.00 per week after tax does not strike me as excessive to cover the cost of food, electricity, telephone, gas, council rates, motor vehicle expenses including petrol, health and dental care, restaurants, recreation and any other ordinary living expenses.

White J did not include any amount for provision for Mr Mayfield, but regarded the estimate of $500 per week as reasonable in relation to the respondent’s projected ordinary living expenses. White J went on to consider for how many years the income should be provided, and material before his Honour relating to average life expectancy, the respondent’s health and the difficulties of precise expectation; and calculated that a capital sum of $393,950 would yield $500 per week after tax for a period of 20 years using a 3% discount rate.

24 White J then addressed the provision of a capital sum to provide against vicissitudes of life such as unexpected medical costs, and also to provide some of the conveniences of life such as holidays, travel and a new motor vehicle. His Honour referred to the probability that some income from the Trust would continue to be available to the respondent which could be used against unforeseen adverse contingencies, and assessed $150,000 as a proper sum to allow as this element. This is the third element to which I earlier referred, and it is not challenged on appeal.

25 Since White J gave judgment there have been observations in judgments in Vigolo v. Bostin [2005] HCA 11; (2005) 79 ALJR 731 on the significance for decisions under legislation relating to Family Provision, especially on the concepts and expressions “moral duty,” “moral claims” and like expressions. Submissions and argument in the present appeal do not require me to reconsider the opinions expressed in Permanent Trustee Co. Ltd v. Fraser (1995) 36 NSWLR 24 by Kirby P and Sheller JA which now control the Court’s use of these and like expressions. Observations on moral duty in judgments in Vigolo are not uniform in effect and do not appear to have been parts of the ground for decision in that case. In Vigolo the claimant was a person of substantial means and his claim competed with entitlements of his brothers and sisters who, even with the provision made for them, were not persons of substantial means.

26 Passages in the joint judgment of Callinan and Heydon JJ in Vigolo at paras 114 and 115 to which counsel referred, in which their Honours make observations on the significance of the words “proper” and “maintenance,” to my mind serve to illustrate the amplitude of those concepts, but otherwise do not bear closely on the present appeal. Among other things their Honours said (para 114):

The use of the word "proper" means that attention may be given, in deciding whether adequate provision has been made, to such matters as what used to be called the "station in life" of the parties and the expectations to which that has given rise, in other words reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future.

27 In para 115 their Honours said:

"Maintenance" may imply a continuity of a pre-existing state of affairs, or provision over and above a mere sufficiency of means upon which to live. "Support" similarly may imply provision beyond bare need. The use of the two terms serves to amplify the powers conferred upon the court. And, furthermore, provision to secure or promote "advancement" would ordinarily be provision beyond the necessities of life.

28 Counsel also referred to passages in the judgment of Salmond J in In Re Allen (Deceased), Allen v. Manchester [1922] NZLR 218 at 222. The classic passage, which has been influential in the development of the law, is cast in the terminology of moral claims upon the testator and the testator’s moral duty. The use of the passage has to be accommodated to a point of view which more directly addresses the reality that under s.7 of the Family Provision Act 1982 the decision to be made is a decision about the Court’s own opinions. However there are expressions in Salmond J’s passage which show, as has long been plain, that the jurisdiction is not limited to provision for needs. Among other things Salmond J said (at 222):

[The Court] has the more difficult function of determining the absolute scope and limit of the moral duty of a wealthy husband or father to make testamentary provision for the maintenance of his widow and children. ... [The Court] has to judge between the claim of a dependent to be maintained by the testator and the claim of the testator himself to do as he pleases with his own.

29 In almost all applications under the Family Provision Act 1982 questions of needs are prominent because of the scale of the resources available. The present case is one of the few which are free of that limitation. The focus of attention on needs is not an underlying legal limit on provision which can be ordered, but a subject which usually arises for consideration when the Court addresses the circumstances of each case, as it is required to do. Decisions in the past show that judges formerly took a very limited view of the provision appropriate to be made, for example, for able-bodied adult sons and a limited view of the appropriate provision for married daughters. These decisions belong to past times and do not express the values of the present age. See Hunter v. Hunter (1987) 8 NSWLR 573.

30 The range of matters which the Court may take under consideration is very wide. The wide terms stated in subs.9(3) of the Act include:

(c) circumstances existing before and after the death of the deceased person, and

(d) any other matter which it considers relevant in the circumstances.

31 The facts in the present proceedings have features which are rarely encountered in contentious claims under the Family Provision Act 1982; particularly rarely are they encountered together. One is that the interests involved and the value of the shares designated as notional estate are very large, in comparison with estates ordinarily dealt with. Another is that the provision ordered for the respondent by White J cannot in reality have any significant adverse affect on the wellbeing of the appellant and cannot impose any hardship upon her, as she is otherwise provided for out of the estate of Mrs Shirley Stewart in an extremely ample way; there was no attempt to show that she could incur any kind of hardship. Another is that the respondent does not have any needs in terms of lack of present provision for necessities and amenities of life, on ordinary scales of needs as understood in the community generally. The concepts of needs and competition for their satisfaction out of the estate are usually prominent in litigation under the Family Provision Act 1982, but they have no place here.

32 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. The concept of advancement in life can take consideration well beyond needs. The purposes White J considered are not concrete projects, but are means of appraising the provision which ought to be made, and of giving dimensions to an exercise which cannot be made highly concrete. Nothing commits the respondent to using the provision in the ways which White J considered.

33 Senior Counsel for the appellant contended that White J was in error in proceeding on the basis, when assessing the provision to be ordered, that it was not unreasonable for the respondent and her husband to wish to preserve Oakleigh and the Partnership for other family members. White J directed himself (Red 35 [86]):

If the applicant has an obligation to support others, such as a parent’s obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant. ( Re Buckland Deceased [1966] VR 404 at 412; Hughes v National Trustees Executors and Agency Co. of Australasia Pty Ltd [1979] HCA 2; (1979) 143 CLR 134 at 147; Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490 at 498, 505). But section 7 does not permit orders to be made to provide for the support of third persons whom the applicant, however reasonably, wishes to support. ( Re Buckland Deceased at 412; Kleinig v Neal [1981] 2 NSWLR 532 at 537.)

34 It should be observed that the passages in Re Buckland Deceased [1966] VR 404 and Kleinig v. Neal (No. 2) [1981] 2 NSWLR 532 to which White J referred are not quite to the same effect as each other. In Re Buckland Deceased at 412, Adam J said:

Although one cannot but feel sympathy with the plaintiff in accepting the burden of making financial provision for her mother, I consider that the fact that she is doing so cannot properly enter into my consideration of what was adequate provision for the proper maintenance and support of the plaintiff herself. No authority has been cited to me suggesting this is so, and it would seem that to allow this circumstance to affect the matter would involve the making of provision out of the estate, or be it indirectly, for the maintenance of the testator’s former wife under guise of providing maintenance for his child. It is the obligation of the testator towards his child for her maintenance which is in issue in these proceedings and nothing else. This conclusion does not, of course, mean that the circumstance of the daughter of the testator being burdened with providing for and maintaining her own infant children would be an irrelevant consideration. But the obligation of a parent to provide for his or her own infant children is one thing; the burden voluntarily assumed of an adult child providing for her mother is quite another.

35 In Kleinig v Neal at 537 Holland J (to whom Re Buckland had been cited) said:

It was submitted for the defendants that the mother's potential

dependency upon the plaintiff was not relevant to a consideration of his claim on his father's estate. The defendants objected to the admissibility of evidence that was tendered on this matter. As it seemed to me that actual and potential burdens on the financial resources of an applicant existing at the date of death, including those for which there was only a moral and not a legal responsibility, could be material circumstances in considering an applicant's claim, I admitted the evidence that was tendered. As the mother herself can have no claim to provision for her

maintenance out of the deceased's estate, any financial dependance of the mother upon an applicant son could not, I think, be used to increase the amount that would otherwise be ordered to be paid to the son if his claim was successful; but I see no reason why the court should not have the benefit of knowing all of the family circumstances in which a claimant finds himself in assessing whether the claimant has a need for provision for his own maintenance, education and advancement in life.

36 The view of Holland J appears to me to be wider than that of Adam J, as Holland J was prepared to regard it as relevant, although not as increasing the amount that would otherwise be ordered, to know the applicant’s family financial circumstances including financial dependence of his mother upon him. Neither decision relates to s.7 of the Family Provision Act 1982.

37 In effect the appellant’s submission is that the order for provision made did not conform with the direction which his Honour gave to himself. Counsel accepted that an effect of the submission, in relation to the affairs of the respondent and her husband, is that if they did wish to move off Oakleigh they should pay for their new housing out of the capital value of Oakleigh. It was further submitted that at the date of the hearing the respondent and her husband had significant assets, that their income was substantial, although subject to the influences and wide variations usual for farmers and graziers; and that statements of intention as to what might be done in the future were of no assistance in making an assessment as to what is adequate provision.

38 The substance of the contentions is that White J did not appropriately take into account the means of the respondent, including the means of the respondent and her husband to purchase new housing with capital which could be raised out of Oakleigh. In my opinion the reasons given by the respondent for unreadiness to sell Oakleigh and to use the proceeds for her own interests were relevant circumstances to the question before White J under s.7 of the Family Provision Act 1982, and his Honour made no error in having regard to those circumstances and in giving them the weight which he evidently did. It could well be an error to act on such considerations if the effect produced were to impose any hardship upon a person otherwise entitled to notional estate; but the circumstances before White J had no such element.

39 Senior Counsel contended to the effect that the provision ordered was erroneous as it produces indirect benefit for third parties, being the family members whose interests are involved in the Partnership. If a provision is a proper provision to order, the fact that ordering it may produce some indirect benefit for another party should not deter the Court. There is no explicit limit in the terms of the Family Provision Act 1982 which prevents a provision from being made with the indirect effect of benefiting a third party. Limits arise in the application of the concept of adequate provision for proper maintenance and the interdependence of such provision with available resources and competing claims. In the present case there is a continuing and complicated rural enterprise involving the occupations, interests and homes of a number of other persons, all closely related to the respondent, to whose wellbeing she naturally has a commitment which would be disrupted by selling off part of Oakleigh. There is to my mind no difficulty in recognising the view of the respondent and her husband that the sale of Oakleigh would be a breach of faith towards their children, and the array of arrangements and family circumstances in which they have this view, as matters which the Court may consider. In my opinion White J made no error in giving the weight he did to the respondent’s unreadiness to make any realisation out of Oakleigh.

40 In final submissions before White J Senior Counsel for the appellant conceded that the provision for the respondent under the intestacy of $41,079.50 was not adequate. The concession involved conceding that the first stage of the two-stage process for dealing with applications under the Family Provisions Act 1982 was satisfied; the process is referred to in Singer v Berghouse (No. 2) at 209-210 (per Mason CJ, Deane J and McHugh J). In relation to the provision for income for the respondent it was contended that there was no evidence of any incapacity of the Partnership or the Trust to meet any expense which the respondent reasonably wishes to incur, and that there was no basis for a provision of a substantial sum of money to provide her with income. Counsel observed that her expenses have always been satisfied to a generous degree, with money to spend freely on holidays, and that her financial needs are more than adequately met with the income presently available to her.

41 This submission to my mind involved the intrusion of a concept of needs, measured by the respondent’s present circumstances as a limit to appropriate provision. In the context of the available resources there is in my opinion no such limit.

42 White J ordered that the respondent be paid her costs out of the notional estate of the deceased. Although it is the usual and a good practice for the costs of parties to an application under the Family Provision Act 1982 to be estimated and for the Court when disposing of an application to make findings about the likely costs, there are no such findings. In the scale of the size of the notional estate, the costs of the proceedings before White J, although no doubt they were large as the hearing took five days, cannot have had any real significance for his Honour’s considerations. No observation was made during the hearing on appeal about this subject, and in my view none was called for. However the usual practice should continue except in rare cases such as the present.

43 The respondent should obtain an order that her costs of the appeal should be paid by the appellant out of the notional estate of the deceased. The Court’s orders should provide specifically for payment of the appellant’s costs out of notional estate. The costs of this litigation should not be paid out of the assets which passed under the intestacy.

44 In my opinion the Court of Appeal should order:

(1) Appeal dismissed.

(2) Order that the appellant pay the respondent’s costs of the appeal out of the notional estate of the intestate.

(3) Order that the appellant’s costs and expenses of and incidental to the appeal be paid or retained by her out of the notional estate of the intestate.

45 STEIN AJA: I agree with Bryson JA.

**********

LAST UPDATED: 08/06/2005