Hanlon v Evans English v Evans [2009] NSWSC 137 (3 June 2009)

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Hanlon v Evans English v Evans [2009] NSWSC 137 (3 June 2009)

Last Updated: 4 June 2009

NEW SOUTH WALES SUPREME COURT

CITATION:
Hanlon v Evans English v Evans [2009] NSWSC 137


JURISDICTION:
Equity Division

FILE NUMBER(S):
4360/2006
5745/2007

HEARING DATE(S):
08/12/08, 09/12/08, 05/03/09, 10/03/09

JUDGMENT DATE:
3 June 2009

PARTIES:
Elizabeth Ellen Hanlon v David Lewis Evans & Anor
Robyn Anne English v David Lewis Evans & Anor

JUDGMENT OF:
Macready AsJ

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Mr JS Drummond for plaintiffs
Mr CF Hodgson for defendants

SOLICITORS:
Friedlieb Byrne for plaintiffs
Tress Cox for defendants


CATCHWORDS:
Family Provision. Application for provision by two daughters of deceased. Deceased owned part of country property which was left mainly to a son. Orders for further provision in favour of plaintiffs.

LEGISLATION CITED:



CASES CITED:


TEXTS CITED:


DECISION:




JUDGMENT:

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION



Associate Justice Macready

Wednesday 3 June 2009


4360/06 Elizabeth Ellen Hanlon v David Lewis Evans & David John Evans
5745/07 Robwyn Anne English v David Lewis Evans & David John Evans

JUDGMENT

1 His Honour: This is the hearing of two applications under the Family Provision Act 1982 in respect of the estate of the late Mavis Evans who died on 18 June 2005. Her two daughters, Elizabeth Hanlon (“Elizabeth”) and Robwyn English (“Robwyn”), are the plaintiffs in the proceedings. The deceased was also survived by her son, David Evans (“David”), the second defendant, in the proceedings and her husband, Mr David Lewis Evans (“ Mr Lew Evans”), the first defendant.

The last will of the deceased

2 By her last will and testament dated 14 July 1992 the deceased appointed Lew Evans and her son David as her executors and trustees. Clause 3 of the will provided for the whole of her property “both real and personal” to be held upon trust:

“(a) to pay the income to my husband David Lewis Evans during his lifetime.

(b) on the death of my husband to hold the capital as well as the income upon trust:

(i) as to all family lands owned by me at the date of my death UPON TRUST for my son the said DAVID JOHN EVANS SUBJECT TO the payment by my said son to each of my daughters ELIZABETH ELLEN HANLON and ROBWYN ANNE ROBINSON of the sum of thirty thousand dollars ($30,000). The said amount of thirty thousand dollars ($30,000) payable to each of my said daughters shall be paid by my said son within a period of twelve (12) months from the date of death of the survivor of myself and my husband and further subject to the payment by my said son of my just debts and general testamentary expenses.

(ii) as to the residue of my estate UPON TRUST for my daughters the said ELIZABETH ELLEN HANLON and ROBWYN ANNE ROBINSON who survive me and if both survive as tenants in common in equal shares.”

3 Mr Lew Evans, the deceased’s husband, is still alive and he is entitled to his life interest.

The estate of the deceased

4 The net distributable value of the estate before deduction of any legal costs in relation to the proceedings, is as follows:

Lot 9 “Fishers”	$620,000.00
Less selling expenses (excluding capital gains tax)	$25,160.00
	$594,840.00
Less Probate costs	$4,379.05
	$590,460.95
Less funeral expenses	$7,000.00
	$583,460.95

5 The estimate of costs in the matter are:

Plaintiffs	123,000
Defendants	96,000
Total	219,000

6 If orders are made in favour of the plaintiffs there will be an estate of about $364,460 to be held for Mr Lew Evans or for distribution in accordance with what orders the court may make.

7 There was an issue as to whether there might be capital gains tax payable on the sale of the real estate known as “Fishers” farm. Having regard to the likely fall in the value of the property it seems that this is somewhat remote at present.

Family history

8 Mavis Evans, the deceased died on 18 June 2005. The deceased was at the time of her death married to David Lewis Evans, the first defendant. The deceased and David Lewis Evans married in October 1952. There were three children of that marriage: Robwyn born in June 1953; Elizabeth born in August 1956; and David born in February 1960.

9 Robwyn completed of her secondary schooling at Presbyterian Ladies College, Goulburn. In 1969 she completed her School Certificate and in early 1970 she enrolled as a student nurse at Prince Alfred Hospital, Missenden Road, Sydney. In 1972 she married Robert Robinson and in August 1972 her son, Craig, was born. In June 2004 she met Robert English who she married in September 2005 having moved to the United State of America to reside with him in August 2005.

10 In 1974 Elizabeth completed her Higher School Certificate at Temora High School. In 1975 she commenced training as a trainee nurse at Royal Canberra Hospital. She completed that training over a three year period but did not graduate as a nurse at that time. In 1979 she obtained employment with the Public Service Department in Canberra. After the deceased was seriously injured in a motor vehicle accident in July 1979 she returned home to “Fishers” to assist in looking after the deceased. In 1980 she resat her nursing examination and passed. She then returned to Royal Canberra Hospital to work as a full time registered nurse. She worked in various other hospitals thereafter and in October 1982 married William John Hanlon. William had two children from an earlier marriage, Gavin, born August 1971 and Michelle, born January 1973. Elizabeth and William had two children, Carla, born July 1984 and Jenna, born November 1986. All four children are now independent.

11 David completed his secondary schooling in late 1977 at which time he returned and resided on “Fishers” until 1990. In 1979 the deceased, Lew Evans and David formed a partnership known as DL & M Evans & Son. In that year the David purchased Lot 8 (320 acres) for $32,000 from his parents. The DL & M Evans & Son partnership was dissolved on 30 June 1991.

12 In 1996 the deceased and Lew Evans moved from “Fishers” to reside at Parkes Street Temora. David and his family moved from that property to “Fishers.”

13 In 2004 David and Debbie purchased a 640 acre block (Lot 10) adjoining “Fishers.”

14 At as I have mentioned the deceased died on 18 June 2005 and probate was granted on 24 April 2006. The summons in Elizabeth’s matter was filed in time on 18 August 2006. The summons in Robwyn’s matter was filed out of time on 26 November 2007.

Extension of time

15 Robwyn’s application is out of time and it is necessary for the court to consider section 16 of the Family Provision Act, which allows an application to be made notwithstanding it is out of time. There are a number of cases that refer to the principles to be applied in an application for an extension of time. In Re Guskett (deceased) (1947) VLR 211; [1947] VLR 212; [1947] ALR 263 the following was said:

"It is necessary for the applicant to make out a case that will justify the grant of the indulgence sought. He is to show reasons why his failure to apply within the time allowed should be excused. Every case will have to be dealt with on its own facts but it would seem necessary for the applicant to satisfy the court that the circumstances are such as to make it unjust for him to be penalised for being out of time. As moreover he is seeking an indulgence he should apply promptly for an extension of time."

16 His Honour Young J in several cases has dealt with the principles governing application to extend time under this Act. In Massie v Laundy (Supreme Court of New South Wales, Young J, 7 February 1986, unreported) he indicated that when looking at ‘sufficient cause’ under 16(3) of the Act the factors which one looks at include the following:-
a) is the reason for making a late claim sufficient?
b) will the beneficiaries under the will be unacceptably prejudiced if the time were extended?
c) has there been any unconscionable conduct on either side which would enter into the equation?

17 Apparently he also accepts a view that was expressed by his Honour Needham J in Fancett v Ware (Supreme Court of New South Wales, 3 June 1986, unreported) that there is no purpose in extending the time with respect to a claim that must fail. In Phillips v Quinton (Supreme Court of New South Wales, 31 March 1988, unreported) Powell J when considering the matter at the substantive hearing, leant to the view that a plaintiff seeking an extension of time under the Testator’s Family Maintenance and Guardianship of Infants Act 1916 must now demonstrate not merely a reasonable prospect but at least a strong probability of obtaining substantive relief. That view was not accepted by his Honour Hodgson J in Basto v Basto (Supreme Court of New South Wales, 8 September 1989, unreported).

18 In De Winter v Johnstone (Court of Appeal, 23 August 1995, unreported), his Honour Powell J referred to this matter and in particular the fact that nowadays the application for extension of time is invariably dealt with at the time of the application for substantive relief. He said at page 23:

"In such a case, so it seems to me no extension of time ought to be granted unless it be established (inter alia) that the applicant for an extension of time would, in the event of that extension being granted, be entitled to an order for substantive relief."

19 His Honour Mr Justice Sheller considered that it was only necessary to show that the application was not bound to fail. His Honour Mr Justice Cole seems to have adopted the parties’ approach of looking at the strength of the plaintiff’s case.

20 The case of De Winter v Johnstone is also useful in that Sheller J commented on the meaning of “unconscionable.” He was dealing with an appeal from Master McLaughlin and at page 11 he referred to the Master's comments to the following effect:-

"Unconscionable conduct in this context, of course, relates to such matters as whether the plaintiff has made an informed decision not to make a claim against the estate, and has then decided after the limitation period has expired, to make such a claim on account of some change in her financial and material circumstances which has occurred after the expiry of the limitation period."

21 With regard to the Master’s comments, His Honour observed:

“With all respect I would not have thought this to have been unconscionable conduct. No doubt it depends on the circumstances. However the concept of unconscionable conduct is here directed towards a deliberate holding off designed to lull the beneficiaries into a false sense of security. There is nothing to suggest anything of that sort in the present case "

22 There are a number of cases where a change of heart has not been held to be a sufficient reason. In Re Lauer (1984) VR 180 it was held that the mere fact that the applicant’s financial position had deteriorated cannot of itself be a ground for granting an extension of time under the Act nor could the mere fact that the value of the estate had been inflated beyond what might have been expected at the date of the testator’s death be such a ground.

23 Re Lauer was followed by Young J in Bearns v Bearns-Hayes (Supreme Court of New South Wales, Young J, 6 May 1997, unreported). In that case for a period of two years until late 1994 the plaintiff had no intention of making a claim as she had assurances from her family that her position with her home was secure and she had sufficient income. In late 1994 arguments broke out in the family as a result of which the plaintiff felt abandoned by her family and that she could not rely on the loose arrangements previously in place. His Honour found that this was not a sufficient reason.

24 It will be recalled that the deceased died on 18 June 2005. In August 2005 Robwyn moved to the United States to live with Robert English in Michigan. When she left Australia she was unaware that she could make a claim under the Family Provision Act 1982. In June 2006 Elizabeth notified Robwyn that she proposed to make a claim under the Family Provision Act and here claim was lodged on 18 August 2006. Robwyn was still living in the United States and did not have access to legal advice in respect to any proposed claim.

25 In early December 2006 Mr P Byrne the solicitor for Elizabeth forwarded by email a Notice of Claim. The covering letter contained the following:

“We enclose herewith Notice of Claim advising you of your entitlement to bring a claim against the estate should you wish to do so. You would need to seek independent appropriate legal advice if you wished to take that course of action.

Any claim should be instituted within 18 months of the date of death.”

26 The notice of claim is dated 30 November 2006. The covering email is undated. Robwyn received the email and notice of claim in December 2006 but was “unsure” if she received it in early December 2006. In cross-examination she conceded that at the time she received the email she knew she could make a claim. However, it was the first time she knew that an 18 month period applied. She also conceded that at the time the period had not then expired. At that time she had been living in Michigan, USA since August 2005. Because of distance, hardship and financial position, Robwyn did not seek legal advice until February 2007. Following advice from Mr R Stone, solicitor of Wagga Wagga, negotiations commenced between Robwyn and LAC Lawyers being the solicitors retained by the Executors. From February to July 2007 negotiations continued until they broke down in July 2007.

27 In May 2007 Robwyn and her husband relocated from Michigan to Jacksonville, Florida as a consequence of the medical conditions suffered by Robert. In September Robert had his first of two back operations that required Robwyn to attend to his needs during his convalescence for approximately 6 weeks. In November 2007, Robwyn instructed Mr P Byrne to lodge a claim. The claim was lodged on 26 November 2007.

28 When one has regard to Robwyn’s lack of knowledge of the time limit for making a claim until shortly before the 18 month time limit expired and the fact that she was living in the United States, I am satisfied that she has adequately explained her reason for the delay. However the question is whether her explanation is sufficient. It was submitted that she made a conscious decision not to bring a claim despite the fact that she was aware of Elizabeth’s claim as well as her right to bring a claim before the expiration of the 18 month limitation period.

29 The relevant part of the transcript of her cross examination is as follows:

Q. You were aware at that time that if your sister could make a claim, you could make a claim?

A. No.

Q. It didn't occur to you that was the case?

A. No.

Q. And you did not make any enquiry about that at that stage?

A. No.

Q. You didn't, for example, even say to your sister, "What about me? Can I make a claim too?"

A. No, I didn't say that to her.

Q. You say that until you received the email and the notice of claim that you had no idea that you could make a claim against your mother's estate?

A. I was thousands of miles away, my husband was ill and I wasn't aware and I didn't know and there was no one to ask.

Q. As at early December you were aware not only that your sister proposed to make a claim under the Family Provision Act but that she had done so?

A. Yes.

Q. You were aware that you may have an entitlement to make a claim?

A. I became aware then.

Q. You were aware that any claim could have been instituted within 18 months of your mother's death?

A. At that stage I became [aware] of that as well.

Q. And you knew by that stage that period had not expired?

A. Yes.

Q. You knew that if you did not make a claim your sister's claim might be dealt with in your absence?

A. Yes.

Q. And you considered those matters?

A. Yes.

Q. And you made a decision, didn't you, not to make a claim?

A. It's difficult to say that at that time. I wasn't aware exactly of what my rights were at that time.

Q. All right. Let us take it in stage. You were aware you had an ability to make a claim?

A. I became aware, yes.

Q. Leaving aside what you otherwise thought, you did not make a claim at that stage?

A. No I didn't.

Q. You knew the limitation period was expired?

A. Yes.

Q. And you made a decision to let it expire without making a claim for whatever reason?

A. Yes.

Q. The, looking at your affidavit, the next thing that you say happened was that in June 2007 you had a change of heart and gave further consideration to making a claim?

A. Before that time I spoke to--

Q. Just listen to the question, we are dealing with your affidavit first. According to your affidavit the next thing that happened after December 2006 was that you had a change of heart in June 2007 by reason of the move to Florida and you gave further consideration to lodging a claim?

A. Yes.

Q. You then say the next thing that happened was you gave instructions to Mr Byrne to commence proceedings?

A. Yes I did.

Q. That was in November?

A. Yes.

30 In her answers, Robwyn makes it plain that upon receipt of the notice of claim in December 2006 she did not know “what her rights were.” She did not receive any legal advice until February 2007 and the decision to refrain from lodging a claim prior to 18 December 2006 was plainly an uninformed decision in the sense that she made it without legal advice as to whether she had an appropriate claim. She did not have sufficient time before the 18 days expired to obtain any such advice.

31 However, Robwyn did not sit back and wait for Elizabeth’s claim to be determined and thereby giving the defendants a false sense of security. As soon as she had obtained advice in February 2007 (following the Christmas break) the estate was informed of her potential claim. Negotiations then continued to July 2007 without Elizabeth’s claim having been progressed or determined.

32 In these circumstances I am satisfied that her explanation is sufficient and as there is no prejudice or unconscionable conduct on her part that I will extend time.

Eligibility

33 Elizabeth and Robwyn are eligible persons. In applications under the Family Provision Act the High Court in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following:

“The first question is, was the provision (if any) made for the applicant ``inadequate for [his or her] proper maintenance, education and advancement in life'’? The difference between ``adequate'’ and ``proper'’ and the interrelationship which exists between ``adequate provision'’ and ``proper maintenance'’ etc were explained in Bosch v Perpetual Trustee Co Ltdhttp://www.lexisnexis.com/au/legal/ - 529f8 [1938] AC at 476. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.

The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder [1951] HCA 44; (1951) 82 CLR 645, where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors.”

The situation of Elizabeth Hanlon

34 Elizabeth is 52 years of age. In October 1982 she married William John Hanlon and they have two children, Carla, aged 24 and Jenna, aged 22 who are partially dependent upon them.

35 Elizabeth and William own a property in Deutcher Street, Temora with an agreed value of $375,000.00. They have assets of $22,000 excluding shares with BFB Logistics and Agriculture Pty Ltd. They have liabilities of $368,000.

36 Elizabeth has superannuation benefits of approximately $77,800 and death and income protection expenses of $800 a month. William has superannuation benefits of approximately $28,000.

37 Elizabeth is employed as a primary healthcare nurse with the Riverina Division of General Practice and Primary Health Ltd. Her net fortnightly income is $1,828.091. William is the assistant and equipment manager for BFB Logistics and Agriculture Pty Ltd. His taxable income for the 2008 financial year was $45,470 net $36,861.80. Elizabeth and Williams combined income is net $84,392.14 per annum or $1,630 net per week which almost covers expenses of $1,663 net per week.

38 The BFB Logistics shares in the private company who employs William, have, in retrospect, turned out to be an unfortunate investment. The shares were purchased for $300,000 in 2003 with the purchase price being wholly borrowed. In addition the company has not paid any dividend for the last two years. Further, Elizabeth and William hold 4.93% of the issued shares of the company and they can only sell the shares in accordance with the Shareholders Deed. At the present time there are no likely purchasers for the shares. They are left with a loan and little prospect of being able to sell the shares and repay the loan.

39 Elizabeth had a good relationship with her mother and it will be recalled that she returned to “Fishers” for a year to care for her mother after her car accident. She did not contribute to the assets in the estate.

The situation of Robwyn English

40 Robwyn is 55 years of age. She is married with no dependent children. She lives with her husband, Robert English, in rented premises in Jacksonville, Florida. Robert English is a Vietnam veteran and suffers from disabling injuries as a result of his war service. On 1 December 2006 he qualified for a Department of Veterans Affairs pension of $2,700 per month due to disabilities received during his war service. In addition he received a Social Security Disability benefit of $1,102 per month. He was self-employed as an IT support coordinator.

41 Robwyn has had various employments in the United States of America but has been unemployed since February 2008. Their combined income is $3,800 per month and their expenses exceed their weekly income of $884.

42 Robert English owns the property at Inkster, Michigan, which is now rented. The property, which was thought to be worth $75,000 as at March 2008 but due to the world financial crisis as at November 2008, the value was thought to have been reduced to $15,000 to $25,000. Robert remains liable for the mortgagee of $106,765 as at 17 November 2008. Plainly they are in serious financial difficulties and it is unlikely that either will obtain further employment.

43 Robwyn had a good relationship with her mother notwithstanding the distance separating them over the years. Before going to the United States she had resided for a time in Temora. During 2004 she spent six months living with the deceased so she could help her father who needed care after an operation.

44 It is necessary to consider the situation in life of others having a claim on the bounty of the deceased. In this case it is the other two beneficiaries, Mr Lew Evans and David Evans.

The situation of David Lewis (Lew) Evans

45 The deceased and Mr Lew Evans were married in 1952 and the marriage lasted 52 years. Mr Lew Evans is 89 years of age. Together they worked in partnership on “Fishers” and they brought up their three children.

46 Mr Lew Evans presently resides at Park Street, Temora, which is a property owned by David. He makes no claim in the proceedings.

47 He derives a small income from the estate of $3,000 per annum and he does not wish to receive anything further from the estate. He received a war pension and other income of $364.87 per week and he estimates his weekly expenses to be $283.30. His assets total $9,300 and he has no liabilities. He would like to have various modifications and improvements, which are estimated to cost $18,860, made to the Park Street property and also purchase some white goods, estimated to cost $6,000. His position needs to be protected against adverse changes in his circumstances. For example, no longer having rent-free accommodation because David has to sell Park Street and if he has to move into an aged care facility. He is in good health for his age.

The situation of David John Evans

48 David is 49 years of age, married with three dependent children ranging in ages from 5 to 13. The asset position of David and Debbie appear to be as follows:

1.	Real estate
	i. Parkes Street, Temora	$160,000
	ii. Kurrajong Street, Temora	$110,000	$270,000
2.	Cash
	i. Joint cheque	$187
	ii. Joint account	$150
	iii. Teachers Credit Union	$725
	iv. Colonial First State	$66,523	$67,585
3.	Shares		$25,675
4.	Superannuation
	i. Debbie
	a. State Super (No. 6411217) Death	$480,596
	b. First State Super (No.2461806) Death (Ex K)	$261,456
	ii. David (Ex K)	$14,746	$756,798
Total	$1,120,058
Less Liabilities
5.	Loans
	i. Kurrajong Street	$74,051
	ii. Lease on car	$18,000
	iii. Credit cards	$8,554	$100,605
6.	Flexi rent	$230	$100,835
	Net personal assets		$1,019,223
7.	Interest in DJ and DM Evans Partnership
Assets
	i. Real Estate
	Lot 8	$440,000
	Lot 10	$430,000	$870,000
	ii. Plant and equipment	$224,600
	iii. Sheep	$560
	iv. Produce	$3,600
	v. Shares	$92,197	$1,190,977
Less Liabilities
	i. Rabo Bank	$515,658
	ii. Lease utility	$12,940
	iii. Lease land	$3,000	$531,598
	Net assets of Partnership		$659,379
1.	David and Debbie (leaving aside benefits due to Debbie upon retirement) therefore have total net assets as follows:
	i. Personal		$1,019,223
	ii. Interest in DJ and DM Evans		659,379
Total Net Assets	$1,678,602

49 There was much debate at the hearing on the question of whether the shares owned by David and Debbie were held by them personally or as part of the partnership. Having regard to the evidence and the cross-examination, I am satisfied that the shares and investments which they held personally were in fact included in the partnership returns for the purpose of record keeping. In the circumstances I have adjusted the asset position to reflect this in what I have set out above.

50 For the year ended 30 June 2008 David received after tax $22,684 and Debbie who works as a teacher received $64,632 a total of $87,316 or $1,679 per week. Their expenses are estimated at $1,476 per week.

Relationship between David and his parents

51 When David completed his secondary school education in 1977 he commenced working full time on “Fishers” where he remained until 1993 when he married. Then he and Debbie moved into town. Prior to 30 June 1979, the deceased and her husband had conducted a partnership on the property. In 1979 the deceased had an accident and in that year there was a restructuring of the partnership arrangements. The old partnership was dissolved and David and his parents formed a new partnership DL & M Evans and Son and the assets from the old partnership were transferred to the new partnership.

52 At about this time David purchased from his father Lot 8 “Fishers” for $32,000. Lot 8 continued to operate within the partnership. In 1990, David purchased the property in Parkes Street, Temora. He and Debbie married in 1993 and they lived there until 1996 when a change occurred. David moved to live in the home which is situated on lot 9 at “Fishers” and the deceased and her husband lived in Parkes Street, Temora.

53 It is clear that much of David’s time was spent managing the property and in particular after the deceased’s accident in 1979. He also worked as an off-season shearer during this period and he spent time with his sporting activities.

54 Given the size of the property it would not be unusual for David to obtain income elsewhere as a shearer.

55 On 30 June 1991 the partnership between David and his parents was dissolved. Stock and equipment were transferred to David. There was no consideration paid for the transfer and the assets included some 1,880 sheep which were only shown in the accounts at cost. At around this time there were conversations between David and his parents in these terms:

“Mate, you’ve never taken any money off us or the partnership, you’ve worked the farm since you left school, plus the partnership owes you $40,505. We can’t repay you outright now so we’ll work it out in mum’s will that you’ll get this block.”

56 The Deceased said:

“You’ve worked the farm since you left school and haven’t taken any money, I want you to have the farm, if you would like it, you love the land as much as I do, you do want the farm don’t you?”

57 David responded:

“Yes, of course I do.”

58 It seems that the sum of $40,505 was due because he did not need to draw the wages or share of profit which was credited to him in the partnership accounts. No doubt he lived substantially on his shearing income.

59 Following the dissolution of the partnership, David leased “Fishers” Lot 9 from the deceased for $3,000 per annum. This was probably an unrealistically low figure, no doubt to enable the deceased to claim a pension. Although this was a benefit for David, he provided his parents with a benefit, which was the accommodation at Parkes Street, Temora, which he owned. However, the benefit David obtained certainly was substantial in that he was provided with the “Fishers” property on which he carried on his business and later after 1993 he and his wife both benefited for a somewhat minimal outlay.

60 There is no doubt that during the time that David has occupied the property there has been a substantial investment by him in terms of labour and materials in improving the property. There are many kilometres of fencing, treatment of the land, installation of silos, construction of sheep yards and all the matters necessary to maintain the property for many years. David obviously paid all the rates and taxes on the property from 1991 to the present time. Apart from the property there were also substantial alternations and improvements carried out at the homestead at “Fishers.” These are detailed in David’s evidence. His work extended to his own property. For example, he cleared half of Lot 8.

Consideration

61 It was the plaintiffs’ application that as Mr Lew Evans does not need the provision provided by clause 3 of the will, the Court may determine the claims of the plaintiffs without the need to preserve the whole of the estate to provide for his life interest. The plaintiffs submit that an appropriate order would be that the estate should divided as to 45 per cent to Robwyn, 35 per cent to Elizabeth and 20 per cent to David. The defendants suggest that the provisions for Mr Lew Evans should not be disturbed and any provision for Robwyn and Elizabeth should take effect after his death.

62 It seems clear that the position of Mr Lew Evans is somewhat precarious. He depends on the arrangement he has with David to occupy the house at Temora. If there were a substantial change in David’s circumstances such as his inability to retain “Fishers” this could affect Mr Lew Evans. It is true that Mr Lew Evans gave evidence that he was happy to receive the pension but it unlikely that he has given thought to the nature of his dependency on David and what might transpire as a result of this hearing.

63 Mr Lew Evans is 89 years of age with a life expectancy of 4.7 years. Although Mr Lew Evans and his daughter, Elizabeth, have had discussions about her father living with her this is merely another family arrangement. It seems to me that Mr Lew Evans’ interest should be preserved and should not be encroached upon by any provision which might be made for Elizabeth and Robwyn which would result in a danger that he might be have to leave his present accommodation.

64 It can be seen from the terms of the will that the deceased wanted to benefit David subject to making some provision for her two daughters. Elizabeth and Robwyn relied on what I have said in Johnston & Anor v McCallum [2005] NSWSC 17 at [61] in these terms:

“There are some fundamental problems about the deceased’s approach to provision for his children as evidenced by his will. Clearly, the evidence discloses that he had a strong desire for his sons to have his farming property and it was for this reason that his sons received the majority of the assets in the estate. The deceased has taken the view that the same level of provision should not be made for his daughters. Although this view of the moral obligation which a farmer has towards his children has been common in the past, it is not one which should have any influence on a Court when exercising its jurisdiction under the Family Provision Act. The Act requires the Court to consider the individual circumstances of a child and what is the proper provision for that child without differentiating between children because of their sex.”

65 David gave evidence that he wished to retain Lot 9 of “Fishers” and wished to borrow within reason to fund any additional provision for Elizabeth and Robwyn. He gave evidence about the pivotal role of Lot 9 to the future operation of “Fishers.” Surprisingly, since early 2008, David has leased Lots 8 and 10 separately.

66 It is necessary to consider how Elizabeth and Robwyn have been left without adequate and proper provision in order to consider their claims in the circumstances of the estate and the position of their father, Mr Lew Evans.

67 So far as Robwyn is concerned it is plain from her circumstances that she has a substantial need. She and her husband are facing a loss on the sale of the property in Michigan which will involve them repaying an amount upwards of $75,000. It seems that this loss is likely to be realised in the immediate future. They are in rental accommodation and if possible they would like to purchase a property in Florida, which would cost in the order of US$200,000. Notwithstanding their financial predicament there is some prospect of them being able to borrow funds for the purchase.

68 So far as Elizabeth is concerned she and her husband have the problem of the large debt and the prospect of not being able to sell the shares in BFB. Elizabeth claims some provision would relieve her of this substantial liability which obviously would be of benefit to her.

69 A consideration of the various claims indicates that Robwyn has some immediate need for financial relief. Her father, Mr Lew Evans, has a need to be secure and preserved from any disturbance to his present position. Elizabeth can probably struggle on for some years until she receives relief from the extensive liabilities she and her husband acquired. However, having some relief now would assist in these uncertain times.

70 Against all this is the position of David and Debbie who have assets of some $1.7 million plus David’s interest in the property in the estate.

71 One of the matters disclosed in the evidence is that if Mr Lew Evans does have a need in the future for nursing home care this would be achieved with the use of his pension. He would only need low care at the moment but an accommodation bond would be needed for high care. Fortunately, where the minimum assets are less than $35,500 no accommodation bond is payable. Accordingly, it would seem that he would not require an accommodation bond for any such facilities.

72 The estate will be substantially reduced after costs are paid. In my view the provisions in the will of the deceased for her daughters is inadequate and reflects the different values of the property at the time the will was made. The proportions suggested by the plaintiffs in their submissions for a share in what will effectively be the residue of the estate would be an appropriate provision having regard to their different needs and the benefits provided to David. Those proportions were 45% to Robwyn, 35% to Elizabeth and 20% to David.

73 In order to allow David to retain the property and thus secure Mr Lew Evans’ position, I think the plaintiffs’ share of the residue should be paid as to one half now and the balance on the death of Mr Lew Evans. The residue will be determined after the costs of these proceedings are paid. If the property has to be sold there will be David’s share and half the plaintiffs’ share which can be invested to provide a greater income for Mr Lew Evans to help him secure further accommodation if that becomes necessary.

74 I direct the parties to being in short minutes to reflect these orders and any other necessary matters and costs.

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LAST UPDATED:
3 June 2009