Sayer v The Public Trustee [2009] NSWSC 89 (31 March 2009)

Last Updated: 1 April 2009

NEW SOUTH WALES SUPREME COURT

CITATION:
Sayer v The Public Trustee [2009] NSWSC 89


JURISDICTION:
Equity Division

FILE NUMBER(S):
6105/07

HEARING DATE(S):
25/02/09, 26/02/09

JUDGMENT DATE:
31 March 2009

PARTIES:
Jennifer Christine Sayer v The Public Trustee of New South Wales (Estate of

JUDGMENT OF:
Macready AsJ

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Mr DK Jordan for plaintiff
Mr Mr Meek for defendant

SOLICITORS:
L. Rundle & Co for plaintiff
Anthony Lentini for defendant



CATCHWORDS:
Family Provision. Application by widow from second marriage. Option to purchase deceased's share in family home given to widow. Held appropriate provision requires that she receive the deceased's half share of the family home.

LEGISLATION CITED:



CASES CITED:


TEXTS CITED:


DECISION:
Paragraph 74



JUDGMENT:

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION



Associate Justice Macready

Tuesday 31 March 2009


6105/2007 Jennifer Christine Sayer v Public Trustee of New South Wales (Estate of William Robert Sayer)

JUDGMENT

1 His Honour: This is an application under the Family Provision Act 1982 in respect of the estate of the late William Robert Sayer who died on 22 July 2007. He was survived by the plaintiff, his second wife, and his three children by his first marriage. The deceased and the plaintiff had no children together but the plaintiff also had children from a previous marriage.

The last will of the deceased

2 The deceased made his last will on 3 December 1987. Under that will he appointed the defendant as executor and he left his half share of the matrimonial home situated in the countryside outside Armidale in northern New South Wales to his three children and gave them the money in his bank accounts.

3 He left the residue of his estate to the plaintiff's two daughters and gave the plaintiff and her two daughters the option to purchase his share of the house at a market value. The option was not exercised within the time limited by the option in the will.

Assets in the estate

4 The deceased had at the date of his death his share of the home and funds in bank accounts of $32,214.30. The present value of the deceased’s share of the property is valued at $550,000 and there are monies held by the Public Trustee of $21,520.60. The defendant's legal costs are estimated at $51,806.64 and those of the plaintiff estimated at $40,000. If the property were the sold the commission would be $12,500.

5 The deceased also had a superannuation pension. On his death the plaintiff became entitled to 5/8ths of his pension. The plaintiff elected to convert that pension to a lump sum and on 7 March 2007 she received $183,883.58.

Family history

6 The deceased was born in November 1928 and the plaintiff was born in March 1936. The deceased married his first wife in 1954 which was the year that the deceased and plaintiff met while studying to be teachers. In 1959 the plaintiff moved to Armidale and lost contact with the deceased.

7 The deceased had three children by his first marriage. They were Jacqueline Sayer (Colless) born in December 1956, William Robert Sayer born in March 1960 and Lyndal Sayer born in March 1970. In 1965 the deceased and his first wife moved to Sydney.

8 The plaintiff married and in 1978 the Gostwyck Heights property was bought by the plaintiff and her first husband. The property had no home on it but the plaintiff and her first husband fenced the property, put in dams and roads, built a horse shed and corral and planted trees.

9 In July 1982 the deceased’s first wife died. By 1983 the plaintiff’s marriage had failed and there was a property settlement under which the plaintiff received the property at Gostwyck Heights. In that year the plaintiff’s sister and brother-in-law met the deceased at a funeral and the deceased and plaintiff commenced corresponding. In December 1983 they met again in Sydney by arrangement.

10 In January 1984 the deceased took his daughter Lyndal to Armidale to stay with the plaintiff in her Turner Street property and they visited horses on the Gostwyck Heights property. Thereafter he and Lyndal commenced to visit on weekends from Sydney. In April 1984 the deceased and the plaintiff married. Lyndal moved in with plaintiff and her two daughters Christine (then 17) and Alison (then 14) at Turner Street, Armidale while the deceased commuted from Sydney.

11 During 1984 the deceased and the plaintiff had plans drawn up for a house at the Gostwyck Heights property. They intended to use the deceased’s superannuation to build the house. In February 1985 the deceased retired and moved to Armidale. There he taught casually for about one term and then taught at Armidale TAFE part time for a few years.

12 In October 1985 the deceased and the plaintiff entered into a building contract with Barry Taylor to build the house at Gostwyck Heights for a contract price of $134,893. Later heating and a garage were added which were also paid for from the deceased’s superannuation.

13 In December 1985 during construction the land was transferred from the plaintiff to a joint tenancy between the plaintiff and the deceased at a stated consideration of $34,000. In October 1986 the joint tenancy was converted into tenancy in common.

14 The deceased made his last will on 3 December 1987 shortly after the initial construction of the home.

15 During 1988 the plaintiff was the principal at Drummond Memorial School and in 1989 she was deputy principal at the Armidale City Public School. In January 1992 the plaintiff retired from full time teaching. She invested her superannuation and received $30,000 in long service leave entitlements that was used to refurbish the family room at Gostwyck Heights and purchase furniture for the home.

16 In 1992 and 1993 the plaintiff worked as a Creative Arts Consultant in Tamworth with the Department of Education. During 1994 she worked for the NSW Association for Gifted and Talented Children for six months, and then returned to casual teaching.

17 In 1999 the deceased suffered a stroke and lost his peripheral vision. He was unable to read, drive for six months or play golf. In 2004 the plaintiff finally retired from teaching and in that year the deceased was diagnosed with chronic obstructive airways disease. For the next two years the plaintiff tutored students at home.

18 In 2006 the deceased started to suffer from lower back pain. Pagets disease was diagnosed. On 8 May 2006 the deceased was admitted to hospital and then returned home to a new living area downstairs. On 29 June 2006 a tumour was found on deceased’s spinal chord and he was flown to Sydney for treatment where he was admitted to Prince of Wales Hospital, Randwick. On 8 July 2006 the plaintiff flew to Sydney and on 22 July 2006 the deceased died.

19 On 7 March 2007 the plaintiff received a lump sum of $183,883.58 from commutation of the deceased’s superannuation fund.

20 On 20 December 2007 the summons was filed in the Supreme Court, which was within time.

Eligibility

21 The plaintiff being the widow of the deceased is an eligible person. 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 the Court 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 Limited. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or 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 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 plaintiff’s situation in life

22 The plaintiff is 72 years of age, she is single with no dependants. She no longer works. She has the following assets:

Half share Gostwyck Heights $550,000.00

Moneys, investments and superannuation $347,950.00

Camry motor car $600.00

Total $898,550.00

23 The plaintiff has the following income per month:

Bridges Investments $1,133.00

Aged Pension $552.00

St George Term Deposit $60.00

Total $1,745.00

24 The plaintiff also earns interest on a sum of $180,000 invested with Evan’s Creative Webb Print Pty Limited. That money accrues to the loan. However she has withdrawn $5,000 on two occasions. The interest figures indicate that the plaintiff receives at least $1,300 on that investment per month thus having available an income of in excess of $3,000 per month. The plaintiff’s expenses per month were in the order of $2,314.21 in March 2008.

25 The plaintiff has diabetes that she can control with medication and exercise. She has osteo and rheumatoid arthritis and takes a number of medications consistent with her age. She had a good relationship with the deceased. There were some tensions between her and the deceased’s younger daughter when she was young but they were resolved until the commencement of this litigation.

26 The deceased and the plaintiff had a number of trips overseas during their life but their main interest, apart from their work, was the establishment of extensive gardens at their Gostwyck Heights property. These are well illustrated in a folder of photographs which was tendered by the plaintiff and show a remarkable development from open grazing land to gardens which have been open for exhibition for some years because of their quality and extent. The property is about 10 acres.

27 There has been debate about the extent of the financial contribution to the property which has increased substantially in value since the alterations commenced in 1987. It seems likely that the value of the land which was effectively contributed by the plaintiff was worth in the order of $68,000. At the time the deceased made his will he left a careful letter in which he set out the costs of the house project and gave details of his contribution from his superannuation and other funds. This was no doubt made because he thought it necessary to explain the minimal provision he had made for his wife at that stage which was shortly after he had expended substantial funds early in their marriage.

28 It was natural given his substantial investment in the property for the property to be transferred into their joint names ultimately to be held by them as tenants in common. The letter indicated a total of $232,000 as the amount which he contributed from the sale of his house at Ingleburn and superannuation towards the cost of construction and various improvements. This was supported by individual details of all the amounts paid and tallies with the amounts he said he received namely $61,500 from his Ingleburn house sale and $173,000 from his superannuation.

29 There was debate as to whether the deceased in fact paid the plaintiff $34,000 being the stated consideration in the transfer. The plaintiff denied that she was paid this amount and the circumstances indicated that the deceased drew up the transfer himself with the help of some accountants. There was a conversation between the deceased and his son where the deceased is reported to have said he had paid for the share of land but that is quite inconsistent with the substance of the letter to which I have been referring in which the deceased said:

“As you will see the property is now jointly held and shared even though the land value at this time has been valued at approx $70,000 whilst my input has been $142,555 for our home plus additional costs bringing the house and contents value to $202,287 (listed separately). Additional money spent in establishing Gostwyck Heights as an income source and home (as listed) $30,000 all up total $232,000. ”

30 There was a good reason for expressing a consideration in the transfer namely to avoid paying ad valorem duty at sixth scheduled rates or their equivalent. This is the most likely reason why the consideration was inserted and given the fact that the deceased was going to spend a large amount of money on improvements it is inherently unlikely that he would also have paid the plaintiff for acquiring a half interest in her land. The contributions, in a financial sense, was the plaintiff contributing her land at a value of approximately $70,000 and the deceased contributing funds for their joint enterprise in the sum of the $230,000. There was also the plaintiff’s evidence, which I accept, that in 1991 she applied $10,000 from an insurance policy and that in 1992 she applied her long service leave entitlements of $30,000 to refurbish the family room and other improvements to the house. There is still an imbalance in their respective contributions particularly having regard to the time when the contributions were made.

31 The deceased’s son Rob gave evidence that a large concrete water tank was constructed around the same time as the garage and paid for by the deceased. The initial repair of shared road was also said to be funded by the deceased but it is most likely that the plaintiff and the deceased shared the costs of repair with their neighbors. A new room was added to the property and a carport built in 1991.

32 Gardens were planted on the northern and southern sides of the property in 1986 and expanded over the years. Various stairways through the gardens were built from 1988 onwards and there was continued work to create banked rock walkways, drainage walls and rockeries. The eastern slope garden was dug and planted in 1993 and the western side native garden established in 1994. In 1996 agapanthus were planted up the driveway and a garden in the northwest corner and a cottage garden were created.

33 The plaintiff states that work on gardens occurred mostly in school holidays and on weekends often when the deceased was at golf. The plaintiff also states that she paid for the plants to establish the gardens.

34 The plaintiff’s evidence indicates that she paid the rates on Gostwyck Heights, the water rates, the electricity and telephone bills as well as groceries and entertainment expenses. The plaintiff also paid the maintenance bills and paid for pumps, pipes, light fittings, the refrigerator, freezer and washing machine as well as household utensils, linen and the beds.

35 The plaintiff said the deceased paid for his golf club fees, petrol, tobacco and medications from his own money and the rest was from her income. Jacqueline stated the deceased paid his share of bills and the plaintiff paid for the housekeeping but I think it is more likely that the bills were paid primarily from the plaintiff’s income.

36 The plaintiff gave evidence that she handled the day to day running of the household by handling the bills, attending to the washing, cleaning, cooking, shopping and care of the gardens. Similarly she shopped for and paid for most of the deceased's clothes. It is accepted by the defendants that the plaintiff was the homemaker in the relationship.

37 The plaintiff’s affidavit in reply gave the following evidence:

”Bill and I worked as a team. We treated the soil so that I could fork it more easily. We carted mulch not soil. We both collected rocks from the paddocks. Bill rolled the large ones onto a carry all at the back of the tractor. Bill dug out large rocks with crowbars. Bill was very proud of his special rocks and always talked about them when we had open gardens or whenever visitors or family came to stay. Bill brought up rocks for me to build the special stairways between the rockeries. Bill and I worked together and enjoyed these times. Bill did this work mostly between his golfing which was two days a week and at weekends and his TAFE part-time teaching. Bill enjoyed the results as much as I did and brought his golfing friends and their wives as well as TAFE friends up to visit the gardens. On one occasion we even had a golfing wedding group in the gardens for their photo session. Bill loved showing off his special rocks and the gardens as well.”

38 The deceased’s children gave evidence that they observed their father doing physical work in the garden including digging up and carrying rocks that were used to construct the pathways and fences. The evidence indicates that both the plaintiff and the deceased made significant non-financial contributions to the development and maintenance of the extensive gardens at Gostwyck Heights.

39 It is necessary to also consider the situation in life of others having a claim on the bounty of the deceased. In this case it is the three children of the deceased.

The situation in life of Jacqueline Colless

40 Jacqueline is 52 years of age, married and lives with her husband at Ingleburn. They have five children three of whom still live at home. She works as a part-time teacher. Her income has dropped to approximately $120 per week. Her husband does computer software support. One of their children is still at school. Two are studying at TAFE and University respectively. They are still dependant on Jacqueline and her husband. She and her husband have the following assets:

Home at Ingleburn (Approx.) $500,000.00

Investment property – next door to home property $220,000.00

Investments $20,000.00

Redeemed monies for son & wife’s IVF (Approx.) $22,000.00

Superannuation – Jacqueline $15,176.00

Superannuation– husband $104,055.00

Shares (Approx) $9,000.00

41 They have a mortgage of $275,000. They also have a joint liability for legal costs with L Rundle & Co. Her husband has a taxable income of about $70,000. Their income is fully expended on a modest life style. Her family duties prevent Jacqueline from working other than part-time.

42 She, like her other siblings had a good relationship with the deceased and the plaintiff. She did not contribute to the estate of the deceased. Naturally if she were to receive something from the estate she would put it towards reducing her liabilities which would help them plan further for the future and their eventual retirement.

The situation in life of Robert Sayer

43 Robert is 48 years old. He has been married twice. He has three children from his first marriage. He married his present wife Marilyn in 1999. She also has three children. None of their six children reside with them. He works as a fire officer and earns approximately $78,000 gross per annum. His wife works five days a week with an income of approximately $30,000.

44 They are indebted in a sum of $62,500 for credit cards and personal loans. After income tax they manage a tight budget with no opportunity to save. His wife had a failed business venture and part of her net earnings is used to pay the creditors from that business. They are currently renting. He has no current assets other than old cars and an old motorcycle.

45 He has superannuation with the State Superannuation Board. The 2007 estimate of his benefit on retirement at age 60 is in the order of $392,000 or a pension of $1,568 per fortnight. This superannuation is not available to him yet. He anticipates working until the age of 60 at least. He believes that if he took a superannuation lump sum to pay out any mortgage then he would be eligible for a Centrelink pension for his retirement years. His wife has limited compulsory superannuation.

46 If he received something from the estate he would pay his debts and place a deposit on a modest home in the area in which he lives.

The situation in life of Lyndal Sayer

47 Lyndal is aged 38. She was previously in a de facto relationship and is now single. She has a daughter aged 7. She currently lives in a two bedroom house with her ex partner as she cannot afford to move out with her daughter. She is employed full time as a graphic designer and has an annual income of $49,000. She also receives child support in the sum of $250 per week.

48 She owns a property at Allingham Street, Armidale valued at approximately $275,000. She has savings of $6,000.

49 She has the following liabilities:

Mortgage to National Australia Bank $225,000.00

Australian Taxation Office $40,000.00

Department of State Revenue $10,000.00

NAB – Visa card $6,000.00

David Jones American Express card $2,000.00

Centrelink $5,000.00

NRMA Insurance $900.00

Total $288,900.00

She also owes rent of $3,000.

50 The Armidale property was renovated to bring it up to more suitable rental standard in October 2008. She receives rental from that property in the order of $290 per week. If she received something from her father’s estate she would like to clear her debts and purchase a small place for her and her daughter to live. She would sell the Armidale property even though there is only approximately $50,000 equity in that property.

51 Although she was criticised in submissions for her financial disorganisation I am satisfied that she has disclosed her financial circumstances and actual living arrangements to the Court.

Discussion

52 It is necessary to see how the plaintiff says she has been left without adequate provision for education and advancement in life. In this respect the plaintiff submits that she wishes to receive the deceased half share in their home and that as a condition of receiving that half share she would make available to the estate the amount of his superannuation, namely $185, 000, which she received after the death of the deceased. That sum could be applied to payment of the parties’ costs and the balance distributed amongst the three children.

53 There is no doubt that at the time deceased made his will, given the then property prices and bearing in mind the substantial excess of his provision, that the arrangements he then made were probably appropriate. However substantial time, 22 years, has now passed and the property has increased in value probably beyond the deceased’s and the plaintiff's expectations. Because of the rise in value the plaintiff was not in a position to be able to exercise the option to purchase the deceased’s share in the property.

54 It is submitted by the plaintiff that the matrimonial home in the present case is of particular significance because:

the land on which it rests was provided by the plaintiff;

the home built on it has been the home of the plaintiff for over 20 years;

the gardens, especially, have been built up from paddocks to be show gardens – not only is there a history of toil by both deceased and plaintiff in creating the gardens, but they continue to provide a comfort to the plaintiff in terms of work and relaxation;

the home allows the plaintiff to assist in the care of her grandchildren;

the gardens allow the plaintiff to participate in charity and other events; and

the home is used extensively for other meetings of her social network.

55 The evidence before me demonstrates that these submissions are correct.

56 The plaintiff’s submissions proceed on the basis that there has been no provision made for her in the will. With regard to the factors the Court is to consider pursuant to section 9 of the Family Provision Act it is submitted that the plaintiff made significant contributions, financial and non-financial to the property. Whilst it is acknowledged that the deceased expended significant amount on building the home, the plaintiff brought the land into the marriage and contributed funds for improvements and the plaintiff worked with the deceased to build up the gardens. It also is evident that the plaintiff’s involvement in the deceased’s life improved his emotional status considerably after the death of his first wife. The plaintiff was the homemaker and her efforts enabled him to do those things which in retirement he enjoyed, such as golf. She was the primary breadwinner during most of the marriage. In addition she assisted with the care of the deceased’s youngest child who was still at school at the time of marriage.

57 The plaintiff submits that although the plaintiff and the deceased maintained individual bank accounts, the degree of financial interdependence increased over the 22-year marriage. Although this is a second marriage, it was a lengthy and happy one.

58 It is submitted by the plaintiff that the transfer of the land in the early years of the marriage was done at the deceased’s bidding and was an effort by the deceased to protect his contributions to the home made early in the relationship. In addition, it is submitted that the option to buy the property which is included in the will was conceived when the value of the plaintiffs assets were in proportion to the value of the property and it was the intention of the deceased that the plaintiff stay in the matrimonial home.

59 Further factors the plaintiff submits the Court should consider are that she is retired and now unable to find employment. The deceased’s children are all currently in employment and while they all have liabilities Jacqueline and Lyndal own properties and Robert is estimated to receive a lump sum payment of $450,000 on his retirement which is several years away.

60 Widow's claims are frequently the subject of applications in this Court. The Court of Appeal in Golosky v Golosky (unreported 5 October 1993) has referred to formulations of this standard and referred to the decisions of Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65 and Elliott v Elliott (unreported, 18 May 1984), which was approved by the Court of Appeal on 24 April 1986. His Honour said:

"Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up and maintain his estate, the duty which a deceased owes to his widow can be no less than to the extent to which his assets permit him to achieve that result; first to ensure that his widow be secure in her home for the rest of her life and that if either the need arises or the whim strikes her she have the capacity to change her home; secondly that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry; and, third, that she have available to her a fund to which she might have resort in order to provide herself with such modest luxuries as she might choose and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring".

61 There have been reminders about the limited use of such formulations. In Marshall v Carruthers [2002] NSWCA 47 Young CJ in Eq said:

“73 It must be remembered that Powell J put his proposition as a “broad general rule”. However, there is in fact no “ standard former spouse” to which one can just apply that proposition as a rule of thumb.

74 Powell J’s broad general rule may not be a good guide as to what the Court will consider as 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 broad 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.

75 I also take this opportunity to reject Mr Ellison’s submission that a person who has a claim as a class (a) eligible person ipso facto has a stronger claim than a person who comes under class (b). Indeed, in many cases, such as where there are infant children, this may not be so.”

62 Palmer J concurred in these sentiments.

63 The matter was again dealt with in more detail in Bladwell v Davis & Anor [2004] NSWCA 170. In that case Bryson JA with whom Ipp JA concurred on this aspect said:

“12 There have been many statements in judicial decisions, including decisions in the Court of Appeal, generally to the effect that primacy of some kind is accorded to claims of widows for proper maintenance and advancement in life, including continuance of housing arrangements which they enjoyed during the lifetimes of their late husbands. These statements are not altogether uniform in expression, and should be understood as made in each case in relation to the facts under consideration; and those facts vary widely and in truth are unique to each particular case. “ Widow takes all” is not a rule which has been or could be established by judicial decisions: the Court cannot resign the functions which it has under s 7 of the Family Provision Act 1982 in favour of rules of thumb. A rule which was once followed which practically prevented ordering provision for an adult son who was fit to work has been abandoned.

13 Observations on the claims of widows were made by Powell J in Luciano v. Rosenblum [1985] 2 NSWLR 65 at 69-70 in these terms:

It seems to me that, as a broad general rule, and in the absence of special circumstances, the duty of a testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secure in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies.

These observations were not made in the context of a competing claim or proved need by another eligible person, and were introduced by a guarded reference to a general rule and the absence of special circumstances. However they are frequently, almost universally cited in applications where provisions for widows are under consideration.

14 In Golosky v. Golosky NSWCA 5 October 1993 (unreported) the widow, second wife of the testator, was the applicant and the sons of the first marriage, the will beneficiaries whose interests were affected, were well off and did not assert financial need. The majority (Kirby P, Cripps JA concurring) ordered further provision for the widow, and Kirby P referred to Luciano v. Rosenblum briefly for comparison, but also said:

Matters such as these rule out an inflexible rule that every spouse or every widow is entitled, as of right and in every case, to look to a testator to provide accommodation for life. Such inflexible rules used to exist in this area, as for example the previous rule that an “able bodied son” was disentitled to a claim under the predecessor to the Act for that reason alone. That rule has now been abandoned in this State. See [ Hunter v Hunter and Ors (1987) 8 NSWLR 573 (CA) 575f] , 580f; cf Anderson v Teboneras and Anor [1990] VR 527 . So should inflexible rules about spousal provision.

15 In Hertzberg v. Hertzberg [2003] NSWCA 311 provision ordered by Acting Master Berecry for a widow, second wife of the testator, out of a large estate was confirmed by the Court of Appeal. There was no competing claim or circumstance of need of any will beneficiary. McColl JA said at [35] in the context of the claim of a widow for the matrimonial home (which in this case the claimant owns):

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. In this case the situation was exacerbated where, regrettably, the previously affectionate relationship between the appellants and the respondent had, as Acting Master Berecry found, completely broken down following the execution of the deed. Thus the situation in which the deceased may well have contemplated he had left the respondent appeared to have altered.

The statement in the first sentence of this passage should be understood in its context of a claim in a very large estate where there was no competing claim based on need.

16 In Sayer v. Sayer [1999] NSWCA 340 at [34] Sheller JA (with whom Davies AJA concurred) accorded primacy to the claim of a widow (of a second marriage) over the claim of a granddaughter who was an eligible person “in the circumstances and in accordance with prevailing community standards.” This does not in my opinion express any general principle of paramountcy.

17 In Cropley v Cropley [2002] NSWSC 349 at 56 Barrett J said:

When it comes to claims by adult children, it can be said at once that, if there is a competing claim by the widow and all claims cannot be fully accommodated, the widow’s claim should be afforded precedence in the sense that a demonstrated requirement for the allocation of resources in aid of the widow must be satisfied before any similarly demonstrated requirement for the allocation of resources in aid of an adult child. That a widow’s claim to maintenance out of the estate of her deceased husband is a claim which is “paramount” and “of a high order” is borne out by the judgments of Sheller JA in Sayer v Sayer [1999] NSWCA 340 (Davies AJA concurring) and Blackmore v Allen [2000] NSWCA 162 (Priestley JA and Foster AJA concurring). In the former case, Sheller JA described the relativities between the claims of the widow and those of an adult grandchild applicant (Francesca) as follows:

"In my opinion, the question is whether [the grandchild] has satisfied the Court that there is, in the circumstances and in accordance with prevailing community standards ( Permanent Trustee v Fraser (1995) 36 NSWLR 24 at 46 ), sufficient in the estate to provide for the widow’s proper maintenance and advancement in life and yet leave some amount out of which provision can be made for her.”

This was accepted as an accurate statement of the law by Palmer J in Latimore v Latimore (2003) NSWSC 364 at [59]. At [57] Barrett J proceeded to approach the applications according to the two stage approach described in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201.

18 In my respectful view there is an inconsistency between an approach, in the context of competing claims, to the claims of widows as paramount, and the application to the facts and circumstance of each case of s.7 and the approach established by Singer v Berghouse . Preconceptions and predispositions are likely to be the source of inadequate consideration of the process required by the Family Provision Act 1982 .

19 In the application of the test in s 7, and of the exposition thereof in Singer v. Berghouse by 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 opponents’ 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.”

64 Interestingly Ipp JA adopted this in par [1] of his judgment and also said as follows:

“I agree with Bryson JA, for the reasons his Honour has stated, that '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 [1994] HCA 40; (1994) 181 CLR 201...'

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."

65 Stein AJA agreed with both judges.

66 The defendant’s approach to the plaintiff’s claim was carefully articulated in submissions in these terms:

The Plaintiff is currently in a much stronger financial position than the deceased’s own children.

The estate in the scheme of things is a relative small one.

The Plaintiff is in a position in which realistically the property in which she resides is much bigger than is appropriate for her needs. It is a family home rather than a home for an elderly retired lady.

Whilst no doubt the Plaintiff has an attachment to the home her claim to receive the other half share of the property is unrealistic.

There are debts of the estate which cannot be met unless the property is sold or alternatively unless the Plaintiff attempts to fund the estate to pay such debts and also to make some provision for the deceased’s children.

The Plaintiff’s existing assets enable her to receive sufficient income.

However if the Plaintiff were required to pay the estate debts out of her own resources and also to provide moneys for the deceased’s children that would reduce the capital base on which she currently receives income. Clearly some work needs to be done to the house which would further deplete the Plaintiff’s resources if she were to pay for them.

The Plaintiff if given her wish would end up with a large family home well beyond her strict needs but be left with a much reduced capital base and insufficient income. It would take away the substantial benefit which the deceased intended for his children.

A much more appropriate and sensible outcome which would be adequate for the Plaintiff is for property to be sold and for the Plaintiff to use the proceeds of her half share to purchase alternative accommodation. Alternative accommodation is available: see affidavits of Kevin O’Brien.

On that scenario the Plaintiff would be left with accommodation, a sum at least in the order of $347,000 providing her with income that covers her expenses.

The Plaintiff could receive a legacy from the deceased’s estate in the order of $150,000 or $160,000 which would give her in addition to the half share in the property the sum of approximately $500,000 in funds – which she could use, if she so desired to purchase an even more commodious property or alternatively to provide her with some additional fund for a car and contingencies and still maintain sufficient income for her expenses.

That would still allow the children of the deceased to receive the balance of the net estate (about $100,000 each) being funds which would advance their position in life.

67 If I accede to the plaintiff’s claim her income would be reduced to $1,745 while her current expenses are $2,314 a month. She would of necessity have to use her capital if she was not able to reduce her expenses. She has a life expectancy of about 15 years. The use of her capital to supplement her income would allow her to continue to enjoy her home for some years before she makes the decision to change her residence perhaps to some other form of care accommodation.

68 It is true that the plaintiff could buy another property in town from her share of the property and retain her present investments. The defendants suggest that this scenario would enable her to receive another $150,000 to give her more capital to supplement her income.

69 Such a proposal has within it the assumption that this amount is adequate provision for a widow who had a marriage of 22 years and who had been well provided for in a capital sense during her marriage.

70 The initial contributions were in 1986 and the additional contributions by the plaintiff were in 1991 and 1992 only five to six years later. This is not a substantial time difference and thus by 1992 the contributions were $230,000 by the deceased and $110,000 by the plaintiff. This places the plaintiff’s contributions at one third and the defendant’s at two thirds on a cash contribution basis.

71 The contributions on a physical level were substantial and were done by both the plaintiff and the deceased over the 22 years of the marriage. That work has greatly contributed to the value of the property.

72 Some of the children are not in a strong capital situation but they will receive significant superannuation in due course and they are young enough to earn income into the future. None of children contributed to the estate of the deceased. Under the orders I propose they will each receive a small capital sum.

73 In my view it is appropriate that the plaintiff have the opportunity to enjoy the property over the next few years. To do otherwise would be to deny her proper provision.

74 The orders that I make are as follows:

1. Conditional upon the plaintiff paying to the estate of the deceased the sum of $185,000 within 45 days of today’s date the plaintiff is to receive a bequest of the deceased’s one half interest in the property Gostwyck Heights, Armidale.

2. That in lieu of the bequest in clause 5 of the will of the deceased that the deceased’s children, Jacqueline Sayer (Colless), William Robert Sayer and Lyndal Sayer receive a bequest of so much of the said $185,000 as shall remain after payment of the costs herein.

3. Subject to submissions, the plaintiff’s costs on the ordinary basis and the defendant’s costs on an indemnity basis are to be paid or retained out of the estate of the deceased.

4. Liberty to apply.

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LAST UPDATED:
31 March 2009