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Page 2 1 of 10 DOCUMENTS: CaseBase Cases

Gigliotti v Gigliotti
[2002] VSC 279; BC200203987 Court: VSC Judges: Byrne J Judgment Date: 19/7/2002

Catchwords & Digest

Succession -- Testator's family maintenance -- Widow -- Pre-nuptial agreement Application by deceased's 78 year old widow for further provision from estate. Widow given life estate under will. Residue divided amongst numerous beneficiaries including one quarter to widow. Modest estate mostly made up of family home. Home will have to be sold as result of proceedings. Assertion that widow's support includes reasonable social and domestic requirements as well as material needs not challenged by defendants. Second marriage for widow and deceased was of ten year duration. Grown children from both marriages. Widow has few assets, good health, but little English. No particular needs of competing beneficiaries. Widow wants to live near own children. Widow wants home in fee simple. Pre-nuptial agreement probably ineffective at law because contrary to public policy. Nevertheless effect of agreement and wills of deceased that family receive majority of his estate in fullness of time. Whether provision for widow inadequate. Whether further provision should be made. Degree to which pre-nuptial agreement should be given effect. Held: Widow provided with $150,000 to purchase home near children and $50,000 nest egg to cover vicissitudes of life. House to be held as life interest. Remainder to be distributed among remaining beneficiaries. Cases referring to this case Annotations: All CasesSort by: Judgment Date (Latest First) Annotation Case Name Citations [2010] VSC 320; Considered Sellers v Scrivenger BC201005217 (2008) 2 ASTLR 1; [2009] 1 Cited Hills v Chalk Qd R 409; [2008] QCA 159; BC200804698 [2004] VSC 90; Considered McKenzie v Topp BC200401441

Court VSC QCA VSC

Date 26/7/20 10 20/6/20 08 30/3/20 04

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Page 3 Cited Downing v Downing [2003] VSC 28; BC200300672 VSC 24/2/20 03

Journal articles referring to this case Article Name Family Provision in Australia 4th Edition (book) Legislation considered by this case Legislation Name & Jurisdiction Administration and Probate Act 1958 (Vic)

Citations ISBN: 9780409329933

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Provisions s 91(3), s 91(4)

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2 of 10 DOCUMENTS: Unreported Judgments Vic 15 Paragraphs

Re PtIV of the Administration and Probate Act 1985; GIGLIOTTI v GIGLIOTTI (as the executor of the Will of GIGLIOTTI) BC200203987
SUPREME COURT OF VICTORIA COMMERCIAL AND EQUITY DIVISION BYRNE J 8205 of 2000 16 July 2002, 19 July 2002, 22 July 2002 Gigliotti v Gigliotti [2002] VSC 279
TESTATOR'S family maintenance -- widow's claim -- life interest in substitute home of her choice -"nest egg". Re Will and Estate of Antonio Gigliotti

Byrne J
[1] The plaintiff, Mafalda Gigliotti, married the deceased, Antonio Gigliotti, on 9 May 1990. Each of them had been widowed and had a grown up family of their earlier marriage. At the time of the marriage Mr Gigliotti was nearly 75 years of age and his wife nearly 65 years. Mrs Gigliotti is now aged 78 years. Mr Gigliotti died on 20 April 2000 leaving a will dated 29 January 2000. Mrs Gigliotti seeks further provision pursuant to PtIV of the Administration and Probate Act 1958. [2] The present value of the estate is relatively modest. According to the affidavit of the defendant executor, Giovanni Gigliotti, sworn 12 July 2002, the assets totalling $267,986 comprise the following:

1 2 3

o The family home at 40 Rodney Street, Merlynston valued at $260,000 o Household effects valued at $5,000 o Cash - $2,986

Against this, the executor estimates that the estate has incurred or will incur costs of some $20,000 in defending this proceeding. For present purposes I assume that the plaintiff's costs would be about the same. For practical purposes this means, first, that the estate other than the Merlynston home is not sufficient to pay the costs and expenses of the executor in defending the proceeding. Accordingly, the home will have to be sold. Second, it means that, if the costs of all parties are to be paid out of the estate, the amount available is about $225,000. [3] The will of the deceased is not a document free of difficulty. The case before me was conducted on the basis that its effect was to give to Mrs Gigliotti a life interest in the Merlynston home with her being

Page 6 responsible for rates, taxes, gas and electricity. The estate is to insure and maintain the property. The household furniture and Mr Gigliotti's tools were also to be hers for her life. There is also a legacy of $5,000 to a grandson, Antonio Gigliotti. Upon the cessation of the life tenancy, the household furniture and tools pass to the three sons of the deceased in differing shares and the residue is to be distributed as to one quarter to Mrs Gigliotti or her estate; one quarter to a son, Giovanni Gigliotti; one quarter to another son, Pierino Gigliotti and his two children at 21 years; and the final quarter to two named charities. It is likely that the life interest terminates if Mrs Gigliotti should voluntarily cease living in the Merlynston home. [4] The present claim arises because Mrs Gigliotti wishes to live with her own family in Myrtleford or Wangaratta. She feels unhappy and unwelcome at Merlynston near her late husband's family. [5] In terms of the requirements of s91(3), it was put on behalf of Mrs Gigliotti that her proper maintenance and support requires me to have regard, not only to her material needs, but also to her reasonable social and domestic requirements. It was put that, as an elderly woman speaking little English, she might reasonably need to live her remaining years with her own kin rather than with her late husband's family, especially as there appears to exist some hostility between her and them. This proposition was not seriously challenged on behalf of the defendants so that attention then moved to the amount of provision which should be made for her. [6] S91(4) requires me to have regard to 12 matters in undertaking this task. I have done so and will not burden this judgment by dealing with each of them in turn. The relevant considerations as I see the position are the following: the age of Mrs Gigliotti; the fact that she has been a devoted wife for some 10 years and is now a widow with few assets and has as income only an age pension of $427 per fortnight; she is in good health for a woman of her age; the competing beneficiaries have not demonstrated any particular want of financial resources; their moral claim upon the bounty of the deceased is minimal compared with that of the widow. There was some evidence of lack of affection or want of filial devotion on the part of some of these competing beneficiaries. This was disputed and I make no finding adverse to them in this judgment, rather the contrary: their attitude as it appeared from the presentation of their case before me showed them to be sympathetic to the needs of their stepmother. [7] Two matters, however, of some novelty were raised and these have caused me to reserve this decision. The first was a submission put on behalf of the estate that Mrs Gigliotti had, by her statement that she did not want to live in the Merlynston home and by putting the estate to the expense of defending her claim with the consequence that the home will have to be sold, disclaimed her life interest. Accordingly, it was put, the gifts in remainder had vested in possession. I very much doubt that her conduct amounted to a disclaimer. In any event, I am not at all sure that I understand what is the consequence of such a disclaimer for the purposes of my present task. I therefore put this matter to one side. [8] Of greater difficulty is the fact that on 7 May 1990, two days before their marriage and expressly in contemplation of the marriage, Mr and Mrs Gigliotti executed what is described as an pre-nuptial agreement. The agreement is in the following terms: "PRENUPTIAL AGREEMENT THIS AGREEMENT is made on the 7th day of May 1990. This Agreement is entered into BETWEEN ANTONIO GIGLIOTTI widower of 40 Rodney Avenue, Merlynston in the State of Victoria (hereinafter called 'Tony') and MAFALDA CASAROTTO (known as Lena) widow of Gavan Street, Bright in the State of Victoria (hereinafter called 'Lena'). Tony and Lena have agreed to be married on the 9th day of May 1990. Both of them are entering into the marriage with love for each other and with hope for the future. In the hope of leaving to marital tranquillity in life together and to avoid or reduce any dispute between them in the future about the ownership, use, and with descent of property and to avoid unpleasantness and dispute should, despite their best intentions, the marriage in any circumstances not work out, they wish to set down in writing before their marriage what they are agreeing to as to how their financial relationship with each other following the marriage should be regulated. 1. Tony owns his home at 40 Rodney Avenue, Merlynston. The home is worth approximately $160,000.00.

Page 7 There is no Mortgage on that home. Tony is made to feel anxious by the possibility that upon a re-marriage The Family Law Act 1975 might give Lena some right to that piece of property. Lena does not desire now, or ever, to make any claim to it and desires to set Tony's mind at rest. As to the house Tony and Lena are agreed that Lena will never make any claim against that particular piece of property and Tony will continue to provide it as a home for their married future together. Tony will pay the municipal and Melbourne Metropolitan Board of Works rates and insurance on the property. 2. Apart from the home at Rodney Avenue, Merlynston Tony owns all the house furniture situated in the home and bank accounts totalling $12,000.00. There is no other property owned by Tony. Lena owns a Ford Laser motor vehicle 1986 model valued at approximately $9,000.00 and has bank accounts totalling some $7,500.00. Tony and Lena agree that these separate properties will remain separate throughout the marriage although each will permit the other to use what they have except for the monies in the bank accounts. 3. Tony now promises that during the marriage the house and household furniture will be available for use by Lena. Both Tony and Lena are on pensions and they both intend to support each other from their respective pension receipts. 4. Tony hopes in the future to improve the home at 40 Rodney Avenue, Merlynston and he may in the future sell that home and purchase some other accommodation for himself and Lena. Tony acknowledges that any expenses on such improvements will be entirely his responsibility and if Lena makes any contribution with Tony's agreement to any improvements or the purchase of any new property, then Tony acknowledges that he will have an obligation to repay that amount to Lena and it will be treated between them as a debt. 5. Tony promises that should he die prior to Lena that Lena will have the use and occupation of the said house and household furniture during her widowhood. 6. Tony has spoken to his lawyers about the preparation of this Agreement and he desires that Lena should also have advice before signing it since it is the desire of both of them that this Agreement should be a means of minimising any possible friction between them and not a source of additional friction between them. 7. This Agreement is intended to be binding upon the heirs, executors or trustees of Tony's and Lena's estates. 8. This Agreement shall become effective upon Tony and Lena going through an effective ceremony of marriage, whether on the 9th day of May 1990 as presently planned or some other date. If, unexpectedly the marriage should not occur within one year, this contract shall terminate unless they expressly agree in writing to revive it. " [9] On the same day Mr Gigliotti made a will in contemplation of the imminent marriage in which he left the Merlynston home to his intended wife during widowhood, she to maintain the property and to pay outgoings. There was a gift over to his four children equally. [10] Each of these documents was prepared by Mr Gigliotti's Myrtleford solicitors and Mrs Gigliotti's execution of the agreement appears to have been witnessed by a law clerk in that office. Mrs Gigliotti acknowledged that the signature was hers but said she had no recollection that anyone read or translated or explained the document to her and no recollection of the circumstances of its execution. Having observed her giving this evidence and notwithstanding the lack of evidence to the contrary, I find that she executed the document at the office of the solicitors and that it had been translated to her at the time. [11] The legal effect of the pre-nuptial agreement is problematic. It appears to be an attempt to prevent her making a claim to the Merlynston home pursuant to the Family Law Act. Mr Gigliotti agrees to make the home and any substitute home available for her and that after his death she might continue to enjoy the house and its contents during her widowhood. This was given effect to in the will of this same date. Otherwise, the spouses were to maintain separate property. Such a "maintenance agreement" without court approval or registration is not binding pursuant to the then provisions of PtVIII of the Family Law Act. It is probably ineffective at law as being contrary to public policy.

Page 8 [12] Nevertheless, I do not think I should ignore the fact that, upon their marriage, this couple established what seemed to them was a sensible and serious property regime. Doubtless, Mr Gigliotti was sensitive that he should not, by marrying Mrs Gigliotti, jeopardise the expectation of his children that they would in due course receive the fruits of his lifetime endeavours. This is a matter I will have regard to in determining the amount of provision1. In the circumstances which now exist, I consider that I should, so far as is consistent with the proper provision for Mrs Gigliotti, respect the intention of the married couple in 1990 and his intention in his 1990 will and his 2000 will that his family should in the fullness of time receive his estate. [13] I give effect to this by rejecting the submission put on behalf of the widow that she should have a fee simple title to a house in Myrtleford which will be bought for her out of the estate. I will direct that she have a life interest only in the house with the remainder in effect passing in accordance with the gift over provision in the will. The wisdom of generations of judges exercising this jurisdiction has dictated that a widow requires not only a roof over her head, but also what is called a "nest egg" to give her some comfort in facing the unforeseeable vicissitudes which lie ahead. I will, therefore, make provision that she have such a sum for her own use and for her to pay the outgoings and to maintain the house to be bought for her. Having regard to the evidence of the likely cost of a suitable house and to include provision for the cost of purchase and relocation which she must bear, I will direct that $150,000 be made available for the purchase. I will fix $50,000 as the amount of her nest egg. Order [14] I therefore propose the following orders: 1. Declare that the distribution of the estate of Antonio Gigliotti effected by his will dated 27 January 2000 does not make adequate provision for the proper maintenance and support of the plaintiff, Mafalda Gigliotti, his widow. 2. Order that the provision for the plaintiff be made out of the estate of the deceased by distributing the estate as if the following amendments had been made to the will: (i) by deleting cl5, 6 and cl7 and substituting the following cl5 and cl6: "5. I give and devise and bequeath to my wife, Mafalda Gigliotti (also known as Lena Gigliotti), a life interest in my real property situate at and known as 40 Rodney Avenue, Merlynston in the State of Victoria and my household furniture and tools, she being responsible for payment of rates, gas and electricity charges and any taxes levied on the said property and for its insurance and for its maintenance in the same state of repair as at my death. 6. Should my wife, Mafalda Gigliotti, desire not to continue to live in my said property I direct my executor to sell the property. From the proceeds of sale my executor shall: (a) Set aside $150,000 to purchase a house to be chosen by my wife in Myrtleford or such other place as she chooses. This sum is to cover the cost of the purchase and the legal costs and stamp duty payable in respect of the purchase. This house is to be held by my wife as a life interest upon the terms set forth in cl5 hereof. (b) Pay to my wife absolutely the sum of $50,000 without legacy interest. (ii) By deleting cl11(a) and substituting for the word "quarter" where appearing in subcl(b), subcl(c) and subcl(d) of cl11 the word "third". 3. Order that the costs of the plaintiff of this application be taxed on a solicitor and client basis and when taxed be paid out of the proceeds of sale of the Merlynston property. 4. Order that the executor's costs and expenses of and incident to this application be had and retained out of the estate. 5. Liberty to apply. [15] I will hear counsel further upon the precise terms of the orders to be made to give effect to these

Page 9 conclusions. Counsel for the plaintiff: Mr J J Isles Solicitors for the plaintiff: Rush & Failla Counsel for the defendant: Mr P D Ahearne Solicitors for the defendant: John Di Santo

1 See s91(4)(p).

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3 of 10 DOCUMENTS: Victorian Reports/Judgments/7 VR/LEE v HEARN - 7 VR 595 - 31 May 2002 17 pages

LEE v HEARN - (2002) 7 VR 595


Supreme Court of Victoria -- Commercial and Equity Division Warren J 7, 8, 12 March, 31 May 2002 [2002] VSC 208
Testator's maintenance -- Application -- Friend of testator -- Provision of resident caretaker services -- Provision of occasional routine domestic services -- Applicable principles -- Amendment of legislative scheme -- Extension of eligible applicants beyond deceased's family members -- Legislative specification of eligibility criteria -- Whether amending legislation had codified case law on testator's family maintenance legislation -- Requirement of moral duty -- Plaintiff failing to establish testator's dependency -- Administration and Probate Act 1958 (No 6191)s 91. Section 91(1) of the Administration and Probate Act 1958, which was inserted by s 55 of the Wills Act 1997, authorised the Supreme Court to make provision out of a deceased person's estate for the proper maintenance and support of a person for whom the deceased had responsibility to make provision. Section 91(4) required the court, in determining whether or not the deceased had responsibility to make provision for a person, to have regard to:
"(e) any family or other relationship between the deceased person and the applicant, including the nature of the relationship and, where relevant, the length of the relationship; (f) any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate; (g) the size and nature of the estate of the deceased person and any charges and liabilities to which the estate is subject; (h) the financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and for the foreseeable future; (i) any physical, mental or intellectual disability of any applicant or any beneficiary of the estate; (j) the age of the applicant; (k) any contribution (not for adequate consideration) of the applicant to building up the estate or to the welfare of the deceased or the family of the deceased; (l) any benefits previously given by the deceased person to any applicant or to any beneficiary; (m) whether the applicant was being maintained by the deceased person before that person's death either wholly or partly and, where the court considers it relevant, the extent to which and the basis upon which the deceased had assumed that responsibility; (n) the liability of any other person to maintain the applicant; (o) the character and conduct of the applicant or any other person; (p) any other matter the court considers relevant."

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For about 12 years from 1989, the plaintiff (born in 1952) lived rent-free in an apartment in Queensland owned by H (1926-2000) acting as caretaker and (until about 1997) assisting H with personal tasks including cooking and acting as her chauffeur when she made intermittent winter visits from her home in Melbourne to Queensland and stayed at the apartment. The plaintiff, who was not related to H by blood or marriage, had become a friend of H in about 1976 having been introduced to her by a mutual friend, U, who died in 1987 leaving the bulk of his estate (including the Queensland apartment) valued at more than $1m to H. By her will made in 1988, H gave the plaintiff and each of five other beneficiaries a legacy of $20,000. The remainder of H's estate, valued at more than $2.2m, was left to a charitable trust in memory of U. After 1989, the plaintiff, a diabetic, had 7 VR 595 at 596 chosen to engage in paid employment only intermittently. The plaintiff applied under s 91 for an order that he was entitled to the Queensland apartment. During the trial, he reduced his claim to one for an amount of money commensurate with the value of a life interest in that property. In a second affidavit filed in support of his claim and in his evidence at the trial, the plaintiff alleged that the nature and extent of the assistance he afforded H on her visits to Queensland was dictated by her alcohol consumption. Held, dismissing the application: (1) On the evidence:

1a) 1b)

there was no support for the plaintiff's claim that the deceased suffered from an alcoholrelated problem such that she was dependent on him. [28]; the deceased's provision of accommodation for the plaintiff did not arise out of any obligation or duty recognised by the deceased, but, instead, was based only on her friendship with the plaintiff and the convenience of having the plaintiff act as caretaker of the apartment. [29], [30].

(2) The scheme embodied in s 91 of the Act, whilst expanding the class of eligible persons, effectively constituted a codification of the pre-existing judicial approach to testator's family maintenance legislation. The proper approach to the new legislative scheme involved an inquiry into what a wise and just testator would have thought was his or her moral duty to make proper provision for the applicant. There was nothing to indicate that the Parliament intended to constrain the testator's freedom unless the testator breached a moral duty owed to the applicant. [59]. Re Fulop (deceased) (1987) 8 NSWLR 679; Churton v Christian (1988) 13 NSWLR 241; Grey v Harrison [1997] 2 VR 359; Collicoat v McMillan [1999] 3 VR 803; Coombes v Ward [2002] VSC 61 referred to (3) Applying the criteria contained in paras (e)-(p) of s 91(4) of the Act, the applicant had failed to establish that the testator owed him a moral duty. [61]-[79]. Application This was the trial of an application made by originating motion under s 91 of the Administration and Probate Act 1958 for an order that provision be made for the plaintiff out of a deceased estate of which the defendant was the sole executor. The facts are stated in the judgment. W F Gillies for the plaintiff. R T A Waddell for the defendant. Cur Adv Vult

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Warren J.
[1] Olga Hetherington ("the deceased") died leaving an estate worth in excess of $2.2m largely to a charitable trust subject to five legacies worth $20,000 each. The plaintiff makes claim on the estate of the deceased under the relatively recent amendments to s 91 of the Administration and Probate Act 1958, previously referred to as the testator's family maintenance provisions or Pt IV provisions. The plaintiff was not related to the deceased by blood or marriage. He lived in a property owned by the deceased in Queensland for a period of about 12 years prior to her death, performing caretaking and other associated functions. The deceased visited the Queensland property intermittently usually during the winter months. The deceased otherwise resided permanently in Melbourne, Victoria, save for the occasional trip overseas. 7 VR 595 at 597 Background facts [2] The plaintiff, Robert Lee, was born in Malaysia in 1952. He is now aged 50. He came to Australia in 1972 to study graphic art in Adelaide and graduated from a graphic design course in 1976. Over the next four or so years Mr Lee had a number of positions in his chosen field. He went to Melbourne and worked for Monahan Dayman Adams (a large advertising company at the time but which no longer exists) and was sponsored by this firm to become a permanent resident of Australia. He then went to Sydney and worked for Avon cosmetics. Around 1978, Mr Lee was appointed art director at Saatchi Australia in Singapore. Unfortunately, he contracted hepatitis at this time and when he returned to Sydney spent around a year receiving sickness benefits. Also at this time, Mr Lee was disowned by his family because it seems of his decision not to return to live in Malaysia. In 1981 he returned to Adelaide and worked for Young & Rubicam, an advertising agency, but for only about nine months. After this period he pursued the objective of running his own business. He went to the Gold Coast in 1983 to take up a partnership with a friend in a small design business. This venture was not successful and in around 1985, Mr Lee entered a partnership in a Gold Coast advertising agency. Once again, the venture was unsuccessful and the partnership was dissolved in 1989. The dissolution marked the end of Mr Lee's professional career as a graphic artist. Since then, he has only worked on a part-time basis in sales positions. [3] In 1974, Mr Lee became acquainted with members of the Urquart family. Whilst still a student in Adelaide he worked with a Miss Urquart at a pizzeria. They became friends and knowing that he was finding it difficult to make ends meet as a student Miss Urquart suggested to him that in exchange for cheap rent he could help her grandfather, Walter Urquart senior, around the house and in the garden. He did just this, moving into a neighbouring property belonging to Walter Urquart senior. The two became friends. In turn, Walter Urquart senior arranged for the introduction of Mr Lee to his son, Walter Urquart junior, some time in 1976, when Mr Lee moved to Melbourne and once again a friendship developed between Mr Lee and a member of the Urquart family. [4] Walter Urquart junior owned a property on the Gold Coast. According to Mr Lee, he and Walter Urquart junior at one point considered going into business together designing and manufacturing swimwear on the Gold Coast. It seems that Walter Urquart junior regarded Mr Lee as his "protg". Miss Hetherington, the deceased, had become acquainted with Mr Lee through Walter Urquart junior some time in 1976. Walter Urquart junior died on 2 August 1987. It was Mr Lee who found him collapsed in his unit on the Gold Coast and drove him to a hospital and later organised a flight to Melbourne where Walter Urquart junior died. [5] Walter Urquart junior (hereafter referred to as "Walter Urquart") was a wealthy man and in his will of 14 May 1987 he left his entire estate of around $1m -- except a legacy of $10,000, to one Roy William Osmac Pugh -- to the woman with whom he had enjoyed a close relationship for a number of years, Olga Agnes Hetherington, the deceased in these proceedings. Mr Lee was not a beneficiary under Walter Urquart's will. Miss Hetherington, who was 61 years old in 1987, upon the Urquart inheritance became a wealthy woman in her own right. Either in accordance with the wishes of Walter Urquart or from her own acknowledgment of the friendship between Mr Lee and Walter Urquart, Miss Hetherington gave Mr Lee

Page 14 $10,000 from the estate she inherited. 7 VR 595 at 598 [6] It is undoubted that Miss Hetherington and Mr Lee were friends. Upon acquiring property on the Gold Coast from the Urquart estate, Miss Hetherington allowed Mr Lee to live in one of those properties at Unit 11, Port Merion ("the Port Merion property") rent-free from 1989 onwards. Mr Lee attended to the day to day running of the property, fulfilling the functions of caretaker. Miss Hetherington spent time with him in the unit when she visited the Gold Coast between 1990 to 1997 during the Melbourne winters. When Miss Hetherington was staying, Mr Lee helped her with the shopping and cooking and drove her wherever she wanted to go in his car. Miss Hetherington travelled widely overseas during this period also until the final two years of her life which were spent in Melbourne. [7] Miss Hetherington died on 25 June 2000 and in her will of 1 June 1988 she left the plaintiff, along with five other beneficiaries, a legacy of $20,000. The rest of her estate, valued at over $2.2m, was left to a charitable trust established in memory of Walter Urquart. The evidence for the plaintiff [8] The plaintiff gave evidence on his own behalf. In addition, he called as witnesses Jon Edmunds and Marjorie Edmunds, friends of the deceased, and Warren Humphries, former site manager of the Port Merion property in Queensland. The plaintiff relied upon three affidavits, the deponents of which were not called. They were Gregory Alan Morris, valuer Lynette Smith, estate agent and Dr Tony Bose, doctor to the plaintiff. [9] The plaintiff's evidence was that he and the deceased had a mutual obligation to care for one another in accordance with the wishes of Walter Urquart. He said that shortly before his death Walter Urquart asked the deceased to "look after Olga". Mr Lee said that the deceased told the plaintiff that Walter Urquart had asked her to look after him because of his close friendship with the Urquart family. The plaintiff said that he took this to mean that Walter Urquart had asked the deceased to support him. [10] Over the years the deceased told the plaintiff that she would look after him. Mr Lee asserted that she said she had "inherited me [Mr Lee] as part of the estate of Walter Urquart Junior". Mr Lee also said that the Port Merion property was referred to as "ours" and the deceased assured him he would always have a roof over his head and that the unit was his home. He said she told him, "Don't worry, you have a place here. You will always have a home to come back to. You don't have to go out and be sold for a pup." [11] The plaintiff said that the deceased spent six to nine months with him every year at the unit and two weeks every Christmas. These statements were challenged in cross-examination and, on the evidence of other witnesses supported by the dates of travel in and out of Australia in the deceased's passport, were shown to be quite exaggerated. Between the years 1990 and 1997 the most time that the deceased spent at the Port Merion property was about four months; the shortest period was about six weeks. She did not stay at the Port Merion unit during 1994, nor at all in the last two and a half years of her life. The plaintiff said the deceased often spent Christmas with him. However, I do not accept that was so. She spent some Christmas periods in Melbourne, went on a cruise to New Zealand in a particular year and, in 1997, stayed with her cousins, the Hendricks, in Sydney. [12] It was the plaintiff's evidence that whenever the deceased stayed with him he was at her beck and call to such an extent that he could not work. However, the 7 VR 595 at 599 plaintiff acknowledged that the deceased at no time asked him not to work and devote his time to her. He cooked for her and took her shopping or wherever she wanted to go. According to the plaintiff, the deceased was in poor health from about 1996 onwards. He claimed that the deceased had a heart condition, suffered from colds and flu and from depression. No medical evidence was led to support the claims of the deceased's ill health. Furthermore, according to the plaintiff the deceased's poor health was exacerbated by consumption of alcohol. [13] The plaintiff swore two affidavits. The first, on 4 January 2001. The second, on 5 February 2002. No

Page 15 mention of the deceased's drinking was made in the plaintiff's first affidavit. When challenged in crossexamination as to the reasons for the omission the plaintiff responded that he was reluctant to speak on such a matter out of respect for the dead. The allegation that the deceased was a heavy drinker, or at the least a woman who because of her slight build and age was easily affected by even a light or moderate consumption of alcohol has, despite professed reluctance to speak on the matter, come to figure large in the plaintiff's case. It was the plaintiff's evidence that his role of carer was made burdensome because of the deceased's drinking which necessitated that he bathe her and assist her to the toilet. [14] In addition to attending to the deceased's personal needs, it was the plaintiff's evidence that he "coordinated" the management of her property interests in Queensland. However, in cross-examination the plaintiff accepted that all he actually did amounted to redirecting mail and attending body corporate meetings. The plaintiff also accepted that the deceased did not tell him of plans she contemplated to sell the Port Marion unit in late 1999-2000. [15] In regard to work prospects, the plaintiff's evidence was that he has no prospects of working full-time in the advertising industry again. He said that he is "in the scrap yard" with an out of date portfolio and no knowledge of computers. He conceded that he has done nothing to upgrade his qualifications. The plaintiff said that he suffers from diabetes and this condition affects his capacity to work. The plaintiff claimed, also, to have had a nervous breakdown but no medical evidence was led on this point. [16] The plaintiff called two members of the Edmunds family as witnesses. Jon Deane Edmunds is the son of Marjorie Edmunds, a close friend of the deceased. Mrs Edmunds lives on the Gold Coast and saw the deceased whenever she was up from Melbourne. Mr Edmunds saw the deceased at least once a year for the last 12 years of her life. Mr Edmunds was with the deceased when she died. His evidence was that the deceased had a drinking problem for about the last 10 years or more before she died. He described an incident at a dinner some 10 years before her death when the deceased fell into a bath and became incontinent. He also said that she was intoxicated at his wedding in 1994. In addition, he gave other examples of a birthday party in 1985 and of a Christmas gathering in Mount Macedon some years ago when the deceased was overcome by alcohol. In cross-examination Mr Edmunds accepted that the deceased may not have been an excessive drinker but that because of her diminutive build she was easily and quickly affected by alcohol. Mr Edmunds said that he observed the health of the deceased declined in the last four to five years of her life. Mr Edmunds referred to the plaintiff, Mr Lee, as the deceased's "carer". He said that the relationship between the plaintiff and the deceased was a "domestic type of relationship" in that they squabbled from time to time. Mr Edmunds said that the deceased had told him she would never get rid of the plaintiff. 7 VR 595 at 600 [17] Marjorie Edmunds, known as Terry Edmunds, was the deceased's friend of over 40 years. She gave evidence along similar lines to her son in relation to the deceased's drinking. She said that the deceased had been a heavy drinker for the last 10 years of her life and gave general evidence of the deceased becoming intoxicated and incontinent at social occasions. [18] I accept that the Edmunds were close friends of the deceased and were to some extent uncomfortable in giving public accounts of her alleged intoxication. I further accept that the deceased sometimes showed the effects of alcohol consumption at social functions over the years. However, I do not accept the evidence was sufficient such as to make out a claim of persistent heavy drinking on the part of the deceased and consequential dependence. Further, the evidence did not make out the claim that the plaintiff's role as alleged "carer" to the deceased was more onerous as a consequence of her drinking. It is unfortunate in the overall circumstances that such evidence was led as it besmirched the reputation of the deceased. [19] Walter Desmond Humphries was called by the plaintiff. He was, together with his wife, the body corporate manager of the Port Merion apartments where the unit of the deceased was located. He gave evidence of his observations of the relationship between the plaintiff and the deceased and the drinking habits of the deceased between 1990 and 1992. He deposed that he regarded the relationship between the plaintiff and the deceased to be comparable to that of mother and son. He said that he observed the plaintiff performing domestic tasks such as washing and cooking. Mr Humphries observed that the plaintiff took the

Page 16 deceased out in his car on a regular basis. He gave evidence that he regarded the deceased as a heavy drinker and saw her on one afternoon at a barbecue "quite affected by alcohol". However, in crossexamination Mr Humphries conceded that his observations were limited to about three or four incidents. [20] The plaintiff claimed that he was entitled to the Port Merion property and an appropriate sum to maintain him. This was reduced during the trial to an amount commensurate with the value of a life interest in the Port Merion property. Initially, there was no evidence led on behalf of the plaintiff as to the value of his claimed interest in the Port Merion property. After some observations by the court an affidavit by one Gregory Alan Morris, a certified practising valuer in Queensland, with 20 years' valuation experience was filed on behalf of the plaintiff when the trial was well advanced. He deposed that the value of a life interest of 25 years in the Port Merion unit would be $292,604. His valuation was based on an estimation of current market rent of $320 per week. The latter figure was deposed to by Lynette Smith, a qualified real estate agent in Queensland with five years' experience. Again, the affidavit of Smith was filed very late. Neither Morris nor Smith were called. The defendant objected to the late filing of the affidavits but was content to address the affidavits in any event. There was no evidence as to the life expectancy of the plaintiff. [21] Finally, the plaintiff relied upon an affidavit sworn by Dr Tony Bose, the treating general practitioner of the plaintiff. Dr Bose deposed that he has treated the plaintiff for a year and that the plaintiff suffers from diabetes which affects his life expectancy and his capacity to work. However, in his affidavit Dr Bose gave no indication as to the extent and manner the plaintiff's illness has affected him. Aside from accepting that the plaintiff suffers from diabetes, I can make no further finding of fact on the basis of Dr Bose's affidavit. The evidence was inconclusive and unsatisfactory. There was no satisfactory evidence before me to 7 VR 595 at 601 establish that the plaintiff is incapacitated for work or that he was so incapacitated or suffered from ill health during the lifetime of the deceased such that she knew or ought to have known that he was dependent upon her. The evidence for the defendant [22] The defendant, Harry Meares Hearn, was the solicitor for the deceased during her lifetime and the executor of her will. He gave evidence on behalf of the estate. [23] Mr Hearn is a solicitor with more than 40 years' experience in probate. He had been the deceased's solicitor since 1987. He drew up her will in 1987 and a codicil to the will in 1993. He saw her on a regular basis including attendances at her home in Melbourne. He estimated that the deceased came to his offices around five to seven times a year. He said that in all the years he acted for the deceased she only mentioned the plaintiff to him on one occasion in relation to the legacy provided for the plaintiff in her will. Mr Hearn said that he observed the deceased to be a fit and active person, who enjoyed walking and was a volunteer for the Anti-Cancer Council for over 15 years. It was his observation that the deceased declined physically in the last 18 months of her life, but deteriorated mentally only in the last four to five months. He deposed that the deceased enjoyed travel and his evidence, supported by the passport of the deceased, refuted the plaintiff's claims of the amount of time the deceased spent with him on the Gold Coast each year. Mr Hearn gave evidence that when he had attended the deceased at her home in a professional capacity he had never seen any indication that she had difficulty looking after herself nor on any occasion did he ever see her intoxicated or affected by alcohol. However, Mr Hearn acknowledged that he knew the deceased only professionally and not socially. [24] Evidence was given on behalf of the defendant also by Ranald Hugh McCowan, a Queensland solicitor who acted on behalf of the deceased in relation to the purchase of the Port Merion unit. Mr McCowan met the deceased in 1988 and he said that the deceased told him that the plaintiff would live-in, be the "caretaker" of the unit and keep it available for her use. In cross-examination Mr McCowan said the deceased discussed with him the tax implications of having a tenant. He said that in Queensland, stamp duty concessions are available for an untenanted place of residence. It was Mr McCowan's evidence that the deceased discussed the plaintiff's living in the unit with him in this context. [25] The defendant also called Betty Jean Laver, cousin and friend of the deceased. The defendant relied

Page 17 upon an affidavit sworn by one Craig Hendricks, a second cousin of the deceased. Mr Hendricks was not required to attend court for cross-examination. Betty Laver said that she and the deceased enjoyed social outings together and that she had stayed with the deceased at the Port Merion unit in 1995. She deposed that the deceased was fit and alert as late as May 2000 and that when she stayed with her in 1995 she was active. Mrs Laver said that the plaintiff was working when she visited in 1995 selling mobile phones and was not at the deceased's beck and call. She said that in 1998 the deceased had wanted to sell the unit but did not do so because she would lose money on it due to the Asian economic crisis. Mrs Laver believed that the plaintiff was only looking after the unit until the deceased decided what she would do with it. Mrs Laver gave evidence that the deceased had on no occasion been embarrassingly drunk when she was with her but that she had seen the deceased affected by alcohol in her home. In cross-examination Mrs Laver said the sorts of things she and the deceased did together, such as attending the theatre and the ballet, did not involve 7 VR 595 at 602 alcohol. In further cross-examination Mrs Laver accepted the suggestion that the deceased did not drink in her company but may have done so in the company of others. [26] In an affidavit filed on behalf of the defendant Craig Hendricks deposed that his mother was the deceased's cousin and that he and his sister were two of the beneficiaries of the legacies under the deceased's will. He deposed that the deceased regularly visited the Hendricks family in Sydney over the last 20 years of her life and that when on the three occasions he saw the deceased from 1995 to 1997 she was "active and lucid". Mr Hendricks deposed that the deceased hardly ever mentioned the plaintiff, although he knew that the plaintiff looked after the Port Merion unit for the deceased. Findings on the evidence [27] There were a number of key aspects of the evidence that were critical to the plaintiff's case. They were the drinking activities of the deceased, the provision of accommodation by the deceased for the plaintiff and the matter of alleged acknowledgments by the deceased during her lifetime of the position of the plaintiff with respect to the Port Merion property. I consider each of these aspects separately. (A) The drinking activities of the deceased [28] I accept that from time to time the deceased would drink alcohol at social functions. I accept, also, that on some occasions she may have become intoxicated quickly and suffered physically as a result. I accept that on those occasions the deceased may have required assistance from others. On those occasions, of which few were identified, the deceased required assistance from those with her -- on some instances it was the plaintiff, on other occasions, it was a member of the Edmunds family. In any event, I cannot be satisfied on the evidence that there were other than a few occasions and in all likelihood no more than 10 episodes. Significantly, the deceased was able to live alone in Melbourne until almost the end of her life without assistance. She did not require a resident carer. On the evidence I reject any suggestion that the deceased suffered from an alcohol based problem such that she was dependent on the plaintiff. (B) The provision of accommodation by the deceased for the plaintiff [29] I am not satisfied that the deceased was dependent on the plaintiff or, more importantly, that the role was reversed. At most, the plaintiff was a caretaker permitted by the deceased to live rent-free at the Port Merion property in return for his caretaking duties. The arrangement was one that was convenient and financially advantageous to the deceased. The apartment was occupied for security purposes and maintained and, further, ongoing accounts such as electricity and telephone were paid by the plaintiff. In my view, the arrangement between the plaintiff and the deceased was based on friendship and convenience and no more. There was no obligation or duty recognised by the deceased. In addition, none was owed. (C) The acknowledgment by the deceased during her lifetime of the plaintiff's position [30] The plaintiff relied upon the fact that the defendant had assured him that he would always be able to

Page 18 live at the Port Merion property and that she was concerned as to what would happen to him after she died. In my view, these statements were of no consequence and were insufficient to establish any 7 VR 595 at 603 obligation or duty or acknowledgment thereof owed by the deceased to the plaintiff. Indeed, I accept that the plaintiff contemplated selling the Port Merion unit in 1998. The plaintiff was no more than a caretaker. [31] I turn then to consider the relevant legislation. The background history to the legislation [32] Victoria was the first Australian jurisdiction to enact testator's family maintenance provisions under the Widows and Young Children Maintenance Act 1906. The legislation was largely based upon New Zealand legislation, the Testator's Family Maintenance Act 1900 (NZ). The first family provision legislation was not enacted in England until 1938.1 [33] Initially, s 91 of the Administration and Probate Act (and its equivalent legislation in other jurisdictions) was a remedial provision for the widow and dependent children of a testator as Williams J observed in Lieberman v Morris:2
[T]he dominant purpose ... is to enable the court to remedy a breach by a testator of his moral duty as a wise and just husband or father to make proper provision, having regard to his property, for the maintenance, education and advancement of his family.

[34] Over the years the family provision legislation in Victoria, in tandem with other jurisdictions, has been expanded to enable a court to order provision from a deceased's estate whether the deceased died testate or intestate,3 to order provision for extramarital children.4 With the effluxion of time and the change in community standards and mores the Parliament has amended the family provisions to encompass spouses (not merely widows). [35] Ultimately, the legislation has been expanded so that potential applicants might include persons having a family or other relationship with the deceased. It is the most recent amendment that enables the plaintiff to bring the present claim. Section 91 of the Administration and Probate Act [36] Section 91 of the Administration and Probate Act in its present form was inserted by s 55 of the Wills Act 1997. It provides:

Power of the Court to make maintenance order (1) Despite anything in this Act to the contrary, the Court may order that provision be made out of the estate of a deceased person for the proper maintenance and support of a person for whom the deceased had responsibility to make provision. (2) The Court must not make an order under sub-section (1) in favour of a person unless --

1a) 1b)

that person has applied for the order; or another person has applied for the order on behalf of that person.

(3) The Court must not make an order under sub-section (1) in favour of a person unless the Court is of the opinion that the distribution of the estate of the deceased person effected by --

2a) 2b) 1c)

his or her will (if any); or the operation of the provisions of Part I, Division 6; or both the will and the operation of the provisions --

Page 19
7 VR 595 at 604 does not make adequate provision for the proper maintenance and support of the person. (4) The Court in determining --

3a) 3b)

whether or not the deceased had responsibility to make provision for a person; and whether or not the distribution of the estate of the deceased person as effected by --

1. 1. 1. 1 2c) 1d) 1e) 1f) 1g) 1h) 1i) 1j) 1k) 1l) 1m) 1n) 1o) 1p)

the deceased's will; or the operation of the provisions of Part I, Division 6; or both the will and the operation of the provisions --

makes adequate provision for the proper maintenance and support of the person; and the amount of provision (if any) which the Court may order for the person; and

any other matter related to an application for an order under sub-section (1) -must have regard to -any family or other relationship between the deceased person and the applicant, including the nature of the relationship and, where relevant, the length of the relationship; any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate; the size and nature of the estate of the deceased person and any charges and liabilities to which the estate is subject; the financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and for the foreseeable future; any physical, mental or intellectual disability of any applicant or any beneficiary of the estate; the age of the applicant; any contribution (not for adequate consideration) of the applicant to building up the estate or to the welfare of the deceased or the family of the deceased; any benefits previously given by the deceased person to any applicant or to any beneficiary; whether the applicant was being maintained by the deceased person before that person's death either wholly or partly and, where the Court considers it relevant, the extent to which and the basis upon which the deceased had assumed that responsibility; the liability of any other person to maintain the applicant; the character and conduct of the applicant or any other person; any other matter the Court considers relevant.

[37] Prior to the amendment to s 91 the testator's family maintenance provision vested in the court a broad discretion. Essentially the approach of the courts had been to adhere to the classic formulation of the court's task upon failure to make provision, as articulated by Salmond J in In re Allen (deceased); Allen v Manchester:5
The provision which the Court may properly make in default of a testamentary disposition is that which a just and wise father would have thought it his moral duty to make in the interests of his widow and children had he been fully aware of all the circumstances.

7 VR 595 at 605 [38] As observed by Ormiston J in Collicoat v McMillan6 this passage is the most frequently cited in the jurisdiction of testator's family maintenance. See eg Coates v National Trustees Executors and Agency Co Ltd7 and Hughes v National Trustees, Executors and Agency Co of Australasia Ltd.8

Page 20 [39] Collicoat and also Grey v Harrison9 were concerned with the claims of adult children and looked at what Ormiston J described as "correlative notions" of moral claim and moral duty. Each case concerned an adult son,10 a class of claimant courts have been traditionally hesitant to provide for,11 who were not successful in life. In Collicoat the son was described as the "lame duck" of the family. In Grey v Harrison the son was an alcoholic without employment and who after the break up of his family had gone through periods of homelessness. In each case the neediness of the applicant corresponded to the moral duty of the testator to provide. [40] Both cases were hesitant as to High Court authority in Singer v Berghouse.12 In that case the majority judgment of Mason CJ, Deane and McHugh JJ questioned in obiter the usefulness of notions of morality and moral duty in this area of the law. But in Grey as Callaway JA observed it is only a breach of moral duty which can justify judicial intervention in testamentary freedom, an important right in a free society. His Honour stated, at 365:
The touchstone of what a wise and just testator would have thought his or her moral duty has been accepted for many years. It supplies the norm that the legislature left unexpressed ... It also reflects the view that there is no legislative justification to abridge freedom of testation unless the testator has breached a moral duty, or alternatively that there is no judicial reason to exercise the statutory discretion except for the purpose of remedying such a breach. [Emphasis in original.]

[41] Upon introduction of the amending Bill to Parliament the Attorney-General in the second reading speech stated:
This bill introduces amendments to the act to enable a wider group of people to apply to the court for testator's family maintenance. The bill empowers the court to make an order for provision out of the estate of a deceased person for the maintenance and support of a person for whom the deceased had responsibility to make provision. The bill does not include a list of eligible applicants for testator's family maintenance, instead leaving it to the court to determine on a case-by-case basis whether provision should be made for a particular applicant, which is a more equitable method of dealing with testator's family maintenance applications. To ensure that only genuine applications are made, the bill allows the court to order costs against an applicant if the court is satisfied that the application was made frivolously, vexatiously or with no reasonable prospect of success. The bill requires the court, in determining whether or not provision should be made for a particular applicant, to have regard to a list of factors, including: any family or other relationship between the deceased person and the applicant, including the nature of the relationship and where relevant, the length of the relationship; any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate; the size and nature of the estate of the deceased person; the 7 VR 595 at 606 financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and in the foreseeable future; and any benefits previously given by the deceased to any applicant or beneficiary.

[42] The post amendment case law has made it clear the common law moral duty or obligation to provide still permeates codification and that the significant changes have been, first, the possibility of application by a wider class of persons and, secondly, the application by the court of criteria in making its determination whether or not a claimant should have been provided for or should have been more generously provided for. [43] Since the amendments were enacted there have been very few cases concerned with the expanded classes of applicants. Leahey v Trescowthick13 and Sherlock v Guest14 were both cases related to claims of grandchildren whereas Marshall v Spillane15 dealt with the claim of an adult brother of the deceased. In all these cases it was held that there is no longer a requirement to meet a prescribed familial relationship rather to satisfy the criteria of s 91. [44] The application of the criteria keep the court's task as a factual rather than philosophical determination of moral duty as cautioned against by Ormiston J:16

Page 21
I consider that the expression "moral duty" remains a simple and convenient way of referring to the obligation, hypothetical as it may be in some cases, resting upon a testator to make a wise and just assessment of the interests of all persons who might fairly ask to be taken into account in determining what adequate provision for proper maintenance and support should have been made for them had the testator been fully aware of all the relevant circumstances. Having regard to what I have said, it is unnecessary to consider further in detail the meaning of the word "moral" or indeed the application of theories of morality to the law which may be fairly left to such writers as H L A Hart, Lon L Fuller, John Rawls [and] John Finnis ... It is sufficient to say that the word "moral" used in connexion with the legislation is apt to describe what is generally considered according to accepted community standards to be the obligation of a testator to do what is right and proper for those members of his family whom one would expect to be entitled to a share in the distribution of his or her estate on death.

[45] In the decision of McDonald J in Coombes v Ward17 the importance of moral obligation or duty was recognised again. His Honour followed the authority of Grey v Harrison and its affirmation of a breach of moral duty underpinning this novel area of law. New South Wales [46] In New South Wales the analogous legislation is the Family Provision Act 1982 (NSW). Under this legislation a person unprovided for or inadequately provided for under a will may claim under s 6 on the basis of being an "eligible person". [47] An eligible person is a spouse, former spouse, domestic partner or child of the deceased and under subs (6)(d) an eligible person may also be a person:

2i) 1ii)

who was, at any particular time, wholly or partly dependent upon the deceased person, and

7 VR 595 at 607

who is a grandchild of the deceased person, or was, at that particular time or at any other time, a member of a household of which the deceased person was a member.

[48] The test for persons who cannot bring themselves within the specified categories of familial relationships or of domestic partner is thus twofold. First, a relationship of dependence and, secondly, membership of the same household for a period of time. [49] One of the initial questions addressed by the New South Wales courts was whether this new category of eligibility was still bound up in the notion of family, albeit an extended one. [50] In Churton v Christian18 Mahoney JA was of the opinion that the objective of the legislation was precisely to allow for claims by persons who did not fall within the idea of the family. On the other hand, Priestley JA felt that the idea of family continued to underpin legislative developments in this jurisdiction. [51] A further question for the courts has been whether or not dependency is essentially a financial consideration. There has been competing authority. [52] In Re Fulop (deceased)19 McLelland J was of the opinion that "dependent upon" denoted the provision of financial or material needs, whereas in Ball v Newey20 Samuels JA held that dependency was not a strictly financial concept. His Honour held that the ordinary usage of the word "means a condition of depending on something or someone for what is needed". [53] Samuels JA emphasised the need for the court to examine a relationship in its entirety in order to determine the question of dependency and in order to "exclude situations which might present the simulacrum but not the substance of dependency". His Honour gave the example of students living in a shared house where there will be some degree of co-operative living, such as the sharing of expenses and domestic tasks. Such an arrangement will not, however, amount to relations of dependency amongst the householders. It is this recognition that dependency is a factual question which is consistent throughout the

Page 22 case law.21 [54] Finally, on the question of dependency, in Mckenzie v Baddeley22 it was held that the phrase "partly dependent" does not mean substantially, rather it suggests more than minimally or significantly. [55] Once an applicant has established that he or she is an "eligible person" under s 6(1)(d) of the Act then under s 9 the court must determine what if any provision should be made out of the deceased estate. In doing so the court may under s 9(3) take into consideration certain factors.

9. Provisions affecting Court's powers under secs 7 and 8 ... (3) In determining what provisions (if any) ought to be made in favour of an eligible person out of the estate or notional estate of a deceased person, the Court may take into consideration:

4a)

any contribution made by the eligible person, whether of a financial nature or not and whether by way of providing services of any kind or in any other manner, being a contribution directly or indirectly to:

1. 2. 2. 2 4b) 3c) 2d)

7 VR 595 at 608

the acquisition, conservation or improvement of property of the deceased person, or the welfare of the deceased person, including a contribution as a homemaker,

the character and conduct of the eligible person before and after the death of the deceased person, circumstances existing before and after the death of the deceased person, and any other matter which it considers relevant in the circumstances.

[56] These factors according to McLelland J in Re Fulop (deceased) "when added to facts which render the applicant an 'eligible person' give him or her the status of a person who would be generally regarded as a natural object of testamentary recognition by the deceased".23 The New South Wales cases are of assistance because they are based on similar concepts to the Victorian legislation. [57] A useful recent discussion of both the concept of dependency and the factors which render an applicant a natural object of testamentary recognition and the interrelatedness of the determination of both questions is that of Mao v Peddley24 in which the applicant claimed on the bases of being the deceased's de facto wife or alternatively having been in a relationship of dependency with him. The applicant had had a brief and perhaps ongoing sexual relationship with the deceased in a casual fashion since late 1989 and had lived for the most part since 1991 in the deceased's property in Sydney. The deceased had lived in Thailand since 1989 and it was reckoned that he and the applicant resided together for no more than 66 days during the eight and a half year period between 1991 and his death in 1999. The applicant's claim as de facto wife was dismissed in the main because she had attained permanent residency by claiming to be someone else's de facto wife during the same period but also because the criteria of a domestic relationship imported into the Family Maintenance Act by s 4 of the Property (Relationships) Act were not present. [58] The master looked at a number of circumstances of the relationship such as at what periods a sexual relationship existed and whether or not it had been an exclusive one, whether the applicant performed domestic tasks for the deceased when he was in Sydney, whether or not they had holidayed and attended social functions together and whether or not they had been acknowledged by family and friends as a couple. These signifiers of intimacy were not present in the relationship and it was found that the applicant was more akin to a caretaker or housekeeper in exchange for free-rent. In also dismissing the applicant's claim on the basis of being in a relationship of dependency his Honour averted to the same considerations which made the relationship more properly described as one of mutual convenience.

Page 23 [59] In my view, the new statutory provisions enshrined in s 91 of the Administration and Probate Act whilst expanding the class of eligible persons effectively constituted a codification of the approach taken at common law to testator's family maintenance claims. In my view, the proper approach to the new legislation remains unchanged from that described by Ormiston J in Collicoat, namely, of searching out the touchstone of what a wise and just testator would have thought was the moral duty. Furthermore, there is nothing in the 7 VR 595 at 609 amendments or the extrinsic materials to indicate that the Parliament intended to constrain the freedom of the testator unless the testator breached a moral duty owed to the applicant. [60] I turn then to consider each of the criteria set out in s 91(4) of the Administration and Probate Act and apply these principles to the plaintiff's claim. Application of legislative criteria contained in s 91(4)(e)-(p) to plaintiff's claim (e) Any family or other relationship between the deceased person and the applicant, including the nature of the relationship and where relevant the length of the relationship [61] No family relationship existed between the applicant and the deceased. The two were friends and had been for around 25 years. It is difficult however to discern the depth of their friendship. [62] The applicant was one of only five beneficiaries under the deceased's will. Furthermore, the deceased allowed the applicant to live in her property rent-free. On one hand it seems she did so out of an acknowledgment of his loyalty and her concern for him. On the other hand it seems the arrangement was one of mutual convenience which the deceased saw as suiting her financial and real estate interests. [63] The varied extent to which the relationship was recognised by others attests to its ambivalent nature. For some friends of the deceased the relationship was a close one akin to that of a mother and son, whilst for others the applicant hardly seemed to figure in the deceased's life. [64] I conclude the relationship was one of friendship but no more. I do not accept the applicant was like a son to the deceased. (f) Any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate [65] The deceased had no legal, moral or financial obligation to the applicant nor to any other person. Statements made to the applicant by the deceased to the effect that he should regard the Port Merion unit as his home cannot be taken as conferring upon the applicant a proprietary interest in the unit. Such statements were no more than reassurances to a friend that for the present he need not worry about a roof over his head. Moreover, statements such as "home sweet home" after a drive do not even import this meaning. Such a statement is really just a pleasantry to which no legal or moral obligation could possibly be attached. (g) The size and nature of the estate of the deceased person and any charges and liabilities to which the estate is subject [66] The estate is a large one and not subject to any charges and liabilities except the costs of these proceedings. (h) The financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and the foreseeable future [67] The applicant's financial position is poor. He has some personal debt and no savings. He has not held down full-time employment for many years. At 50 with outdated qualifications I accept that it will be extremely difficult for him to obtain well-renumerated employment in the future. His financial prospects in

Page 24 the foreseeable future are therefore consequently poor. 7 VR 595 at 610 (i) Any physical, mental or intellectual disability of any applicant or any beneficiary of the estate [68] The applicant suffers from diabetes. The medical evidence led on his condition allowed no finding to be made on the extent to which his capacities are impaired. [69] I accept generally that the applicant does not enjoy robust health but find that his inability to hold down full-time employment has been more the result of his failure to keep abreast of developments in his chosen field rather than a consequence of ill-health. (j) The age of the applicant [70] The applicant is now 50. I accept at this age his employment prospects are diminished. (k) Any contribution (not for adequate consideration) of the applicant to the building up of the estate or to the welfare of the deceased or the family of the deceased [71] The applicant's case has been that he cared for the deceased when she stayed with him on the Gold Coast to the extent that he was unable to work full-time. The applicant's evidence overstated the amount of time the deceased spent with him and furthermore overstated the problematic nature of the deceased's drinking habits. I find that the applicant undertook the functions of a caretaker when the deceased was not resident at the Port Merion property and when she was resident he undertook domestic tasks and did some driving for her. However these services were well and truly compensated by the rent-free accommodation he enjoyed. (l) Any benefits previously given by the deceased person to any applicant or to any beneficiary [72] The deceased gave the applicant $10,000 out of the will of Walter Urquart. She may have done so at the urging of Walter Urquart junior or at her own volition, in any event she was under no legal obligation to do so. It was a gift and no more. (m) Whether the applicant was being maintained by the deceased person before that person's death either wholly or partly and, where the court considers it relevant, the extent to which and the basis upon which the deceased had assumed that responsibility [73] I accept that the notion of being maintained like that of dependence is not strictly financial but encompasses any condition whereby one person relies on another for the provision of his or her needs. I consider that the notion of being "partly maintained" is a rejection of a requirement of a relationship that is characterised by significant financial or emotional inequality, typically the financially dependent wife upon a husband or infant children upon parents. However, whilst rejecting these paradigmatic relationships caution needs to be exercised in order that any situation of co-operative living may be seen as one of partial maintenance. As the New South Wales cases make clear each situation needs to be examined carefully on its fact in order to avoid this. Here I am satisfied the applicant was not being maintained wholly or partly by the deceased. The applicant lived rent-free in the deceased's property in exchange for performing the services of a caretaker. Throughout this period the applicant supported himself and paid his own bills. [74] Nothing that the deceased said or did can be taken as an assumption of the responsibility to maintain the applicant. The $10,000 given by the deceased to the 7 VR 595 at 611 applicant out of the estate of Walter Urquart was a one-off gift signifying gratitude but no ongoing commitment to provide for or support. The deceased's question to the applicant "What will happen to you when I'm gone?" whilst signifying her concern for the applicant's well-being indicated that she had no intention of providing for his future and but merely contemplated how he intended to manage.

Page 25 [75] Finally the applicant's case has been based in the main on his claim to have assumed the role of carer for the deceased and not on her supporting him. However, a moral obligation to provide based on an applicant's being maintained by or being dependent upon the deceased as Mahoney JA pointed out in Churton v Christian25 is not one where the deceased owes the applicant a debt of moral gratitude; rather it is the reverse. (n) The liability of any other person to maintain the applicant [76] There is no-one under any liability to maintain the applicant. The applicant's family live in Malaysia and have apparently disowned him. (o) The character and conduct of the applicant or any other person [77] The applicant seemed of good character although prone to exaggeration in his evidence. It is unfortunate that he has placed himself in a situation where at the age of 50 he possibly faces a precarious future. However it must be observed that it has been the applicant's own poor choices and in particular what can only be described as his servile tendency to rely on the largesse of others that has left him so exposed. (p) Any other matter the court considers relevant [78] There are none. Conclusion [79] It follows from my consideration of the criteria set out in s 91(4)(e)-(p) that the plaintiff has failed to make out a moral duty owed by the deceased to him. He has failed to satisfy each of the relevant criteria in the relevant section. Accordingly, the application will be dismissed. Application dismissed. Solicitors for the plaintiff: Plotkins Solicitors. Solicitors for the defendant: Aitken Walker & Strachan.

1 See the Inheritance (Family Provision) Act 1938 (UK); see, also, Dickey, Family Provision After Death, (1992), pp 2ff for a detailed historical survey of the enactment and development of family provision legislation. 2 (1944) 69 CLR 69 at 92. 3 See s 5 of the Administration and Probate (Family Provision) Act 1962. 4 See Status of Children Act 1974. 5 [1922] NZLR 218 at 220-1. 6 [1999] 3 VR 803. 7 (1956) 95 CLR 494 at 519, 527. 8 (1979) 143 CLR 134 at 147. 9 [1997] 2 VR 359.

Page 26

10 And also adult daughters in Collicoat. 11 See eg In re Sinnott (deceased) [1948] VLR 279. 12 (1994) 181 CLR 201 at 209. 13 [1999] VSC 409 (Warren J, 22 October 1999). 14 [1999] VSC 431 (Beach J, 12 November 1999). 15 [2001] VSC 371 (Byrne J, 28 September 2001). 16 [1999] 3 VR 803 at 819. 17 [2002] VSC 61. 18 (1988) 13 NSWLR 241. 19 (1987) 8 NSWLR 679 at 682. 20 (1988) 13 NSWLR 489 at 491. 21 See esp Parkinson v Burns [2000] NSWSC 991 (Macready M, 23 October 2000). 22 Unreported, NSW Court of Appeal, 3 December 1991. 23 At 681. See, also, Priestley JA in Churtonat 252. 24 [2001] NSWSC 254 (McLaughlin M, 9 April 2001). 25 13 NSWLR 241 at 244.

P G WILLIS BARRISTER-AT-LAW

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Page 28

4 of 10 DOCUMENTS: Unreported Judgments NSW 54 Paragraphs

MAIR v HASTINGS; Re Estate of WALLNOFER (dec'd) BC200203090


SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MACREADY M 4175/01 31 May 2002, 31 May 2002 Mair v Hastings [2002] NSWSC 522
Family Provision -- Claim by a de facto partner given a life interest in jointly owned real estate -Long relationship of 31 years and contributions to real estate -- Plaintiff granted real estate in fee simple.

Macready M
[1] This is an application under the Family Provision Act in respect of the estate of the late Romano Giovanni Wallnofer who died on 5 April 2000 aged 63 years. [2] He was survived by the plaintiff, who submits that he lived with the deceased as his de facto partner at the date of death. The deceased had never married and had no children. [3] The deceased made his last will on 17 March 1999 and under the terms of that will he appointed the plaintiff and the defendant executor and gave some specific bequests. The first was to his nephew, Ronald Wallnofer, and his niece, Marina Stadler, in Italy of his interest in his estates in Italy which basically comprised some real estate. He also, in cl3(b), gave a bequest to Ronald Wallnofer of his investment unit at 1/43 Barcom Street, Darlinghurst with an option for the plaintiff to be able to purchase it. [4] In cl3(c) he gave his interest in his real estate known as 180 Paddington Street, Paddington upon trusts basically to provide for the plaintiff to be able to reside in the property. The estate only had a half interest in that property and the other half interest was owned by the plaintiff. The provision was a detailed one and, in particular, included the provision to enable the plaintiff during his lifetime to sell and have the funds reinvested in further real estate. [5] In cl4 he gave the residue of his estate to the plaintiff after payment of all his debts. [6] The present situation in the estate is that there are four main assets. There is the Italian real estate worth $80,802, the unit at Darlinghurst worth $267,500 and the half interest of 180 Paddington Street worth $382,500. The residue of the estate has been got in and amounts to $105,071. [7] Plaintiff's costs have been incurred in the amount of $24,620, defendant's costs $33,040. There are probate costs of $8,550. There also are quite a number of liabilities and taking into account these costs (to which I referred) the total costs and liabilities in the estate amount to $198,142. It is clear, therefore, that there will be a shortfall of residue of at least about $94,000.

Page 29 [8] The practicality is that the Italian estate has in fact been taken by the nephew and the niece in Italy under Italian law and the executor cannot access that to apportion part of the debts to it or in any other way reach it. Accordingly from a practical point of view the shortfall of $94,000 will have to be borne pro rata by the Darlinghurst unit and a half share in Paddington Street. That means that Paddington Street will bear $55,000 and the unit $39,000. [9] I will deal with a little of the history of the relationship of the parties. The deceased was born in 1937 and the plaintiff in 1947, both of them in Italy. The deceased finished his high school in Italy in 1964 and the plaintiff, who studied architecture, finished his tertiary qualifications in 1968. In 1969 the plaintiff and the deceased met in Paris and they commenced to live together. At that stage the plaintiff was studying and the deceased was working as a hairdresser. In May 1971 they migrated to Australia together and they thereafter lived at Rose Bay and Paddington in rented accommodation. The plaintiff apparently is handy and accomplished in that area because apparently even in those days he renovated the Paddington house to obtain a discount in rent. The plaintiff worked as a waiter and a painter and the deceased as a hairdresser. [10] In 1974 the plaintiff obtained a position with Qantas as a flight steward. He had good qualifications because his language skills were much in demand by the airline. They continued to press him to take overseas postings which would improve his position but he declined for reasons which related to looking after the deceased. [11] It was in 1976 that the plaintiff and the deceased bought the house at 180 Paddington Street, Paddington for $43,000. In 1983 the plaintiff bought the unit in Darlinghurst Road. It was also in that year that the deceased was admitted to hospital for quite some period of time because of binge drinking. He had been an alcoholic for many years and needed treatment. [12] In 1985 the deceased was admitted to Langton Clinic for detoxification and in 1986 and 1987 the deceased had hip replacement operations. [13] There is a note made in 1987 by the deceased in which he promised to leave the plaintiff his share of the Paddington house and also his Australian property. [14] In 1989 the deceased bought the unit at Darlinghurst which is now in the estate. The purchase price was $115,000 and the money was raised in part by a mortgage on the parties' jointly owned home at Paddington Street. [15] The plaintiff turned his skills to renovating that unit. Also in that year the plaintiff bought another unit in that building in Womerah Lane, Darlinghurst for $143,000 on mortgage. He retired in 1991 from Qantas and used his redundancy to pay out the mortgage over the Womerah Lane unit. He sold his Darlinghurst Road unit in 1992 and bought another one in Womerah Lane. The deceased himself retired in 1994 on an invalid pension. [16] The plaintiff made a will in July 1998, leaving his half share of the Paddington house to the deceased plus certain other provisions. In 1999 the deceased made his will and I have referred to the details of that. [17] The deceased died on 5 April 2000 while the plaintiff was overseas and the plaintiff came back to find that he had died. Probate was granted in due course and the proceedings were commenced within time. [18] The plaintiff says that he was living in a de facto relationship with the deceased for some 31 years and at the date of his death. He also suggests that he was living in a close personal relationship with the deceased. [19] Prior to the amendments introduced by the Property (Relationships) Legislation Amendment Act 1999 relief was only available under the then Family Provision Act in respect of relationships between a man and a woman. Under the amendments, which took effect on 28 June 1999 there was an extension of the Act, which applied to proceedings which commenced after that date. The amended Act incorporates the definition of a domestic relationship in the Property Relationships Act 1984. [20] That Act applies to domestic relationships which are defined in s5 as follows:"5. Domestic relationships

Page 30 (1) For the purposes of this Act, a domestic relationship is: (a) a de facto relationship, or (b) a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care. (2) For the purposes of subs(1)(b), a close personal relationship is taken not to exist between two persons where one of them provides the other with domestic support and personal care: (a) for fee or reward, or (b) on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation). (3) A reference in this Act to a child of the parties to a domestic relationship is a reference to any of the following:

4 5 6 7 8

(a) a child born as a result of sexual relations between the parties, (b) a child adopted by both parties, (c) where the domestic relationship is a de facto relationship between a man and a woman, a child of the woman: (i) of whom the man is the father, or (ii) of whom the man is presumed, by virtue of the Status of Children Act 1996, to be the father, except where such a presumption is rebutted,

(d) a child for whose long-term welfare both parties have parental responsibility (within the meaning of the Children and Young Persons (Care and Protection) Act 1998). (4) .....Except as provided by s6, a reference in this Act to a party to a domestic relationship includes a reference to a person who, whether before or after the commencement of this subsection, was a party to such a relationship." [21] It can be seen from the terms of s5(1) that a domestic relationship can be either a de facto relationship or a close personal relationship. [22] The definition of de facto relationship itself appears in s4 and is in the following terms:4. De facto relationships (1) For the purposes of this Act, a de facto relationship is a relationship between two adult persons:

9 10

(a) who live together as a couple, and (b) who are not married to one another or related by family.

(2) In determining whether two persons are in a de facto relationship, all the circumstances of the relationship are to be taken into account, including such of the following matters as may be relevant in a particular case:

11 12 13 14 15

(a) the duration of the relationship, (b) the nature and extent of common residence, (c) whether or not a sexual relationship exists, (d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties, (e) the ownership, use and acquisition of property,

Page 31

16 17 18 19

(f) the degree of mutual commitment to a shared life, (g) the care and support of children, (h) the performance of household duties, (i) the reputation and public aspects of the relationship.

(3) No finding in respect of any of the matters mentioned in subs(2)(a)-(i), or in respect of any combination of them, is to be regarded as necessary for the existence of a de facto relationship, and a court determining whether such a relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case. (4) Except as provided by s6, a reference in this Act to a party to a de facto relationship includes a reference to a person who, whether before or after the commencement of this subsection, was a party to such a relationship." [23] This definition apart from the provisions of subcl(1) merely reflect the existing state of the law as it had been developed under the De Facto Relationships Act. See Light v Anderson (1992) DFC 95120 applying Simonis v Perpetual Trustee Co Ltd (1990) 21 NSWLR 677. [24] In relation to the claim that the deceased was living in a de facto relationship with the plaintiff at the date of his death the following should be noted: 1. It seems quite clear the length of the relationship was some 31 years. 2. The common residence was together, apart from a few short periods and, of course, holidays and trips away. In particular, the residence from 1976 on was in a house that they owned together. 3. There was a sexual relationship between the parties for the whole of the period of the relationship. 4. The parties bought property together and shared it. There were loans, for instance, from the plaintiff to the deceased so there was quite a degree of interdependence in respect of financial support. 5. There is, of course, the common home which they bought and shared together. 6. The mutual commitment appears from a number of things and, in particular, the making of wills in favour of each other and the commitment which the plaintiff demonstrated to the deceased by looking after him through 20 years of trouble with his drinking. That shows a substantial commitment between the parties. 7. There are, of course, no children. 8. So far as household duties are concerned, these were shared between them. 9. So far as the public aspects of the relationship, there is not much evidence of that but obviously from what comments were made in the affidavits it is clear that they went out together and that they had a social life together. [25] Although the existence of the relationship is not conceded, nothing is put to suggest that it did not exist. I am satisfied that it did exist for a period of 31 years and at the date of death and there therefore the plaintiff is an eligible person. [26] In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At p209 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 'inadequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Ltd. 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

Page 32 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." [27] I turn to consider the plaintiff's situation. He is aged 55 with no dependents and is single. He would have a life expectancy of at least some 25 years. [28] So far as his assets are concerned these are, at first blush, substantial. He has the home unit at 2/43 Womerah Lane, Darlinghurst, having an agreed value of $342,500, a home unit at 2/60 Womerah Lane, Darlinghurst, having an agreed value of $355,500. He had superannuation which now, he having achieved 55 years, is available to him totalling $196,863. He has the half interest in the house at Paddington which the parties are agreed has a total value of $765,000, his share being $382,500. He has savings and an amount which will be paid to him out of the estate for loans to the deceased of about $20,000. He has a very old Honda car which is hail damaged and worth only about $500. He puts his house contents at $45,000 and he has some shares in Italy worth about $20,000. [29] His income for the year ended 30 June 2000 was $29,265, (that is his taxable income), but for the following year ended 2001 it was $21,308. This is because of some land tax liabilities which he had to pay in that year. On that, his weekly income is only about $350 per week and his expenses exceed that because they are estimated at $492. [30] Clearly he has a very modest income and this is no doubt due to his choice of the lifestyle which he wishes to lead. His small expenses reflect the lack of dependants upon him. [31] It is necessary to consider the relationship between the plaintiff and the deceased. Clearly it was a good one and extended for a long time, although obviously there were bad times, particularly when the plaintiff had to support the deceased in respect of his alcoholism. He also nursed him in times of illnesses such as when he had his hips replaced. [32] One thing that becomes obvious from his evidence is that over the years with Qantas he declined promotions which would have involved him going overseas to take a better paid position. He did this simply so that he would not be away for as long and would be able to help the deceased with his drinking problems. [33] It is also necessary to see how he has contributed to the assets in the estate. So far as the house in Paddington Street is concerned, this was clearly purchased in a state that needed renovation and the evidence is that it was the plaintiff who did a substantial amount of the renovation work. Obviously things such are re-wiring and plumbing were done by tradesmen but the plaintiff, for instance, would prepare rooms so that those tradesmen could come in and there are a number of other things which he did obviously to bring the place up the value it now has. Unfortunately there are some further things that have to be done to the roof and various flashings and insulation which will incur some expense. [34] Apart from Paddington Street the plaintiff also contributed in a sense to the deceased's unit at Womerah Lane. He allowed Paddington Street to be mortgaged to give security for the deceased to borrow so that he could buy that unit. He renovated that property inside and out, repaired the roof, did plumbing and organised other matters to do with getting the unit up to a position where it could be let. It seems that he is the one who took the management role in respect of those investment properties and, indeed, he has continued to look after them since the date of death.

Page 33 [35] There is also evidence of various loans that have been made by the plaintiff to the deceased from time to time, some of which will be now repaid out of the estate. [36] It is necessary to consider the position of others having a claim on the bounty of the deceased. In this case the relevant people are the nephew and the niece in Italy, together with their children who take a remainder interest following upon the death of the plaintiff in respect of Paddington Street. [37] The first is Ronald Wallnofer. He is married, 43 years of age and has two children aged 16 and 8. He lives in Bolzano in Italy and he works in an earth moving business that he and his sister inherited from their father. His income from that appears to be in the order, when one combines his and his wife's income, of $A33,800 per annum. [38] His assets consist of a half interest in the business and the accounts would suggest that that half interest is worth about $45,000. He lives in a two bedroom apartment worth about $A64,500. He refers to having three vacant blocks of land of negligible value but the evidence before me indicates that he will have at least $A4,500 in respect of the Italian property. He has a Ford Escort, some personal effects and a small amount in the bank. On the face of it he has extensive liabilities because the business only carries on in partnership but the position of the business which I have set out above is its net position. [39] So far as his relationship with the deceased is concerned he was, of course, the nephew and the deceased was his godfather. The deceased would visit Italy every two to three years. In the course of those visits the deceased would meet with both Mr Wallnofer or his sister and stay with one or other of them. There certainly has been no contribution to the estate of the deceased by Mr Wallnofer and it is necessary to note the position of his children who have an interest. [40] His daughter, Valentina, is in second class in primary school and what she will do in the future is unknown. Victoria is in second year of tertiary college where she is studying social welfare. There is a possibility she may have to live away from home and will be supported by her family. [41] The other person is Marina Stadler who is aged 45, married with two children aged 21 and 19. As I have mentioned, she also owns half the business and works in it. Her husband obviously works because that is a substantial income to the family, the family income being in the order of $A47,370 per annum. [42] The assets are virtually similar to her brother's because both of them live in two bedroom apartments in the same building and have the same value. Her husband owns a car and they have about $A23,000 in the bank. She owes some monies to a bank which she has borrowed to meet family expenses. [43] The relationship between her and the deceased is similar to that of her own brother. Her children are two, one whom is undertaking national service and who is then going to attend university. Her daughter is undertaking a diploma course and she will probably do some further studies. They also will probably have to study away from their home town which will involve their parents in costs. [44] It is obvious from the discussion earlier that there is no residue which is sufficient to meet all the debts and the costs of these proceedings. The defendant, in effect, concedes it would not be fair for the plaintiff to have to bear the debt of $55,000 which would be charged upon the estate's share of the property. [45] However, the defendants do suggest that there are a number of reasons why the existing provisions are satisfactory. First, the terms of the will give great flexibility to the plaintiff. Second, the plaintiff is well provided for because he has assets of $1,275,363. [46] True it is that the will does give good flexibility and the provision is certainly a useful one. The difficulties with these provisions are common and I have discussed them in a number of cases. For instance, in Litoukinas v Koderitsch [2001] NSWSC 290 I discuss the various cases between para49 and para59. I will not repeat the matters that I have there set out but the parties are aware of the views which I have there expressed. [47] In this case I think there are a number of factors which point to the provisions not being appropriate. Firstly, the plaintiff is 55 years of age, in reasonable health and he has a life expectancy of at least another 25 years. Secondly, he already owned one half of the property and the restriction on the other half of the

Page 34 property which is owned by the estate really deprives him of flexibility to use his capital which is tied up in his half share. He may not wish to go into other real estate, in which case the provision would mean that he would lose his share. Thirdly, and importantly, he contributed himself to the estate, apart from his half share of the purchase price. It was he who did all the work on the property and renovated. A provision like this deprives him of at least half his effort that he put into renovating the property over the years. [48] Another matter that arises, and the fourth point really, is that the property needs further work done on it. Effectively it is only going to be the plaintiff who can do that and pay those funds and, therefore, he will be, in effect, benefiting the remainder beneficiaries by his work. [49] Subject to the next matter which I will consider, I do not think it is appropriate that he have a life residency; he should have fee simple. The large size of his assets is simply a result of the fact that he has invested in real estate. The income produced by the investment units is quite modest and some of his assets have to be seen in this light. Paddington itself is in a boom area for real estate but it is the place where the plaintiff and the deceased chose to live and the plaintiff should really not be penalised for this choice which they made in 1976. He, no doubt because of his own attachment to the property and the attachment to the deceased, would want to continue to live in that property in the future. [50] The relationship was a long one. It was for 31 years. It had its own commitments between the two parties to the relationship but it must be noted that, in fact, it was only a de facto relationship and in this sense one cannot quite compare it to a situation of a married heterosexual couple who have made the public commitment of marriage (see the comments made by the Court of Appeal in Marshall v Carruthers (2002) NSWCA 47). [51] One of the important matters that I think applies here also is that there was a contribution to the estate property by the plaintiff and contributions to funds of the deceased. [52] All this has to be balanced with the extent of the relationship of the deceased and the other beneficiaries and the extent of the deceased's obligations to them which do not appear great on the evidence before me. The only obligations relate to their ties from the particular relationships and no evidence of extensive contact or obligation has been tendered. [53] I am satisfied that in the circumstances of this case it is appropriate for the plaintiff to have Paddington in fee simple and that the other part of the estate should bear the present shortfall. Order [54] The orders that I make are as follows: 1. That in lieu of the provisions of cl3(c) of the will of the deceased that the plaintiff receive a bequest of the estate's interest in 180 Paddington Street, Paddington absolutely. 2. That to the extent that the residue is insufficient to meet the debts, funeral, testamentary expenses, death, estate duties and costs ordered to be paid out of the estate, that such be borne and charged upon the property referred to in cl3(b) of the will. 3. Order that the plaintiff's costs on a party and party basis and the defendant's on an indemnity basis be paid or retained out of the estate of the deceased. Counsel for the plaintiff: Mr A Enright Solicitors for the plaintiff: Jenny Bull & Company Counsel for the defendant: Mr C Simpson Solicitors for the defendant: John H Hastings

Page 35

Page 36 5 of 10 DOCUMENTS: CaseBase Cases

Shepherd Deceased, Re
[2002] QSC 098; BC200201666 Court: QSC Judges: Holmes J Judgment Date: 16/4/2002

Catchwords & Digest

Succession -- Probate -- Application for probate or letters of administration -- Executor according to tenor of will No executor appointed. Applicant jointly appointed trustee over proceeds of sale of particular property. Left life interest in another property to be maintained out of trust funds. Given powers of appointment in relation to some of testator's personal possessions. No general power to receive and pay what was due to and from estate. Payment of debts and funeral expenses imposed on third party. Whether executor according to tenor of will. Whether applicant should be granted probate or letters of administration. Held: Granted letters of administration with will and codicil annexed. Trusteeship only relevant to portion of estate. No direction to perform any other duties of executor. Applicant would rank at least equally with any other legatee in priority for letters of administration. Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations Williams (decd), In the Estate Cited (1984) 36 SASR 423 of Considered Cowin (decd), Re [1968] QWN 3 Considered Barrow, In re [1939] QWN 41 Cited Thompson, In re (1943) 44 WALR 75 (1914) 31 WN (NSW) Cited Porter, In the Will of 56a (1913) 32 NZLR 1193; Cited Brodrick (decd), In re (1913) 16 GLR 80 (1906) 23 WN (NSW) Cited Fowler, In the Will of 134b Considered Punchard's Goods, Re (1872) 36 JP 296; (1872) 41 LJP & M 25; (1872) 26 LT 526; (1872) 20 WR 446; [1861-73] All ER Rep

Court SASC QSC QSC WASC NSWSC SCNZ NSWSC -

Date 6/7/1984 6/6/1967 7/7/1939 4/3/1933 4/5/1914 12/8/1913 23/7/1906 20/2/1872

Signal

Page 37 Ext 1192 (1861) 31 LJPM & A 199; (1861) 4 LT 477; (1861) 2 Sw & Tr 155; [1861-73] All ER Rep Ext 1629; (1861) 164 ER 952 (1925) 3 WWR 584

Cited

Jones, In the Goods of

5/6/1861

Cited

McMillan, Re

Page 38

Page 39

6 of 10 DOCUMENTS: Unreported Judgments Qld 33 Paragraphs

HUMPHREYS v HUMPHREYS (as executrix of the Will of HUMPHREYS (dec'd)) - BC200201494


SUPREME COURT OF QUEENSLAND TRIAL DIVISION AMBROSE J No 1921 of 2002 25 March 2002, 10 April 2002 Re: Humpheys [2002] QSC 090
TRUSTS AND TRUSTEES -- APPLICATIONS TO COURT -- where trust created under will -where respondent trustee-executrix given personal license to reside in house -- where applicantexecutor given interest in eventual sale of the property under the will -- where applicant seeks variation of trusts created under the will for the sale of the property and the creation of a life interest for the respondent -- whether Court should vary the trusts -- whether Court has power to vary the trusts TRUSTS AND TRUSTEES -- APPOINTMENT OF TRUSTEES WILLS, PROBATE AND LETTERS OF ADMINISTRATION -- ACCELERATION Trusts Act 1973 (Qld), s6(1)(d), s32, s94, s95(1)(b), s98(1)

Ambrose J
[1] This is an application pursuant to s6(1)(d) of the Trusts Act 1973 by one of two executors and beneficiaries under the will of Francis Thomas Humphreys (deceased) ("the testator") who died on 28 October 1990 for orders relating to the sale of realty which the applicant and the respondent hold in trust for persons given interests in that property and/or the proceeds of its eventual sale under the terms of the will. [2] The applicant executor-trustee seeks to sell the property and the respondent executrix-trustee objects to any such sale. [3] The applicant is the only son of the testator by his first marriage and five specific legatees under cl3(a) of the will are all children of the applicant - ie grandchildren of the testator by his first marriage. The respondent is the widow of the testator by his second marriage. [4] Cl3(b), cl3(c) and cl3(d) of the will all give specific legacies to either the respondent or the applicant. [5] This application is brought by the applicant to avoid among other things, problems of and likely delays in the administration of the estate perceived to arise from the terms of cl3(e) of the will which reads as

Page 40 follows"(e) As to my real property and improvements thereon situate 160 Oxlade Drive New Farm aforesaid (or any other real property and improvements thereon owned and occupied by me at my death in lieu thereof) together with the furniture furnishings and household items the whole forming my home for my son NOEL PATRICK HUMPHREYS [ie the applicant] to stand possessed of same UPON TRUST (hereinafter referred to as my "sub-trustee") (i) TO PERMIT the said RUTH MERLE HUMPREYS [ie the respondent] to have the right of personal residence therein during her lifetime or until she notifies my sub-trustee in writing that she no longer wishes to exercise her right of personal residence whichever event occurs first free of rent for her use and benefit absolutely BUT subject to her paying all rates fire insurance premiums land tax repairs and similar outgoings payable from time to time in respect thereto so that these payments will be kept up-to-date and my home maintained in good order and condition and (ii) ON the cessation of the right of personal residence immediately above given to the said RUTH MERLE HUMPHREYS or on my death should she predecease me I DIRECT that the said property or any other real property and improvements thereon owned and occupied by me at my death in lieu thereof together with the furniture furnishings and household items contained therein be sold by my Trustees AND I DIRECT my Trustees to pay the proceeds therefrom as follows:(aa) AS TO the sum of Five thousand dollars ($5,000) each for my grandchildren [ie. those specified in cl3(a)]... who have attained or shall attain twenty-five years of age each sum for their separate and individual use and benefit absolutely and (bb) TO PAY transfer and set over the balance thereof to my said son NOEL PATRICK HUMPHREYS [the applicant] for his sole use and benefit absolutely and I FURTHER DIRECT that my said son NOEL PATRICK HUMPHREYS be given the option to purchase the said property or any other real property and improvements thereon owned and occupied by me at my death in lieu thereof together with the furniture furnishings and household items contained therein at such value as shall be determined as a fair and reasonable market value at the time of my death by a member of the Australian Institute of Valuers and as selected by my Trustee upon such terms and conditions as my Trustees shall in their absolute discretion think fit and (f) AS TO the balance of my residuary estate for RUTH MERLE HUMPHREYS [ie the respondent] for her sole use and benefit absolutely and (g) IN THE EVENT of the said RUTH MERLE HUMPRHEYS predeceasing me or failing to survive me then the balance of my estate to my Trustees upon trust TO PAY transfer and set over the balance of my residuary estate to my said son NOEL PATRICK HUMPHREYS for his sole use and benefit absolutely." [6] All children of the applicant (and grandchildren of the deceased) are sui juris, four of them having attained an age greater than 25 years, the youngest having attained the age of 22 years. [7] A trustee company appointed as one of the executors of the will has renounced. [8] No grant of representation is needed or has been sought. [9] The respondent was born on 15 September 1922. She is therefore about 79 years of age at the present time. [10] Since the death of the testator about 11 years ago, the respondent has continued to live in the former matrimonial home pursuant to what was described upon the application as the "personal licence" given to her under cl3(e)(i) of the will. [11] At the present time the respondent receives a "social security blind aged pension". Her eyesight was significantly affected as the result of a stroke she suffered six years ago which affected both her eyesight and her hand co-ordination. Although her health is poor and she must rely upon a carer to assist her with household chores and a gardener to look after the garden and her son to prepare her meals for her, she says

Page 41 she is currently able to walk to the local shops and her general practitioner and five of her medical specialists who treat her for various health ailments are within convenient distance of where she resides. [12] The applicant desires in effect to have trusts resulting from dispositions of the will varied, if that is possible, to achieve a speedy conclusion to the winding up of the testator's estate and to permit an acceleration of the enjoyment of beneficial interests by beneficiaries under the will which is presently postponed to the event of the respondent's death or her surrender of her personal license to occupy the former matrimonial home. [13] He seeks in essence to have orders made effecting a conversion the personal licence of the respondent to occupy the house property at New Farm to a life interest in fee simple with the remainder vesting in the applicant and respondent subject to all the trusts in favour of the specific legatees referred to in cl3(e)(ii) (aa) and cl3(e)(ii)(bb). [14] The applicant and the respondent have in effect received an offer for the purchase of the realty at New Farm for the sum of $770,000, the purchasers agreeing to accept the burden of the personal licence given to the respondent under cl3(e)(i) of the will. [15] Having regard to perceived difficulties that may arise in enforcing her rights under such a licence against any proposed purchasers or their successors in title of the real estate from the applicant and the respondent, the applicant seeks an order having the effect of substituting an interest for life for the respondent in the property in lieu of her current personal licence to occupy it on the terms specified in the will for her life or her relinquishment of that licence prior to her death. [16] The applicant is presently 57 years of age. [17] Apart from the use and/or disposition of the realty (or the proceeds of its sale) between the applicant and the respondent the estate of the deceased has otherwise been administered. [18] The order which the applicant seeks in my view, would clearly place the respondent as beneficiary under the will with a life interest in the residential property in a much more secure and advantageous position than that which she presently occupies as the holder of only a personal licence. With advancing age it may well be the case that the respondent will need to receive care and accommodation in a nursing home for elderly and infirm people or at least in some sort of residential facility designed to give them the care that their advanced age and failing health requires which may not be available in the home she currently occupies. Should she cease to reside in the house which is part of the estate, her personal licence would at least arguably terminate. On the other hand if she had a life interest in the property she could dispose of that interest or at least lease the property for the balance of her life to some person in New Farm at a rental which might help defray the cost of any institutionalised care that she might need. [19] When this matter was raised with counsel for the respondent, he seemed unable to suggest any detriment to which the respondent would be subjected if she received a life interest instead of a personal licence for life or until she left the property. Indeed it was not contested that in fact should the order the applicant seeks be made the respondent would be more secure and in a stronger financial position than she is now. [20] The respondent and the testator had lived in the former matrimonial home for about 5 years prior to his death in October 1990 and she has continued to live in that house since that time for a period of about 11 years. Having regard to the period of time that she has lived in that house and to her age, it is understandable why she would not at this time wish to change her place of residence. On the other hand in my view, the order sought by the applicant would not involve her changing her place of residence unless she decided that that was the best thing for her to do having regard to her age and state of health. If she did so decide then if she had a life estate in the property of course, it would be of value to her because it would permit her to give a lease of the property until the date of her death. [21] It is far from clear to me that the legal consequence of the order sought by the applicant has been clearly understood by the respondent. If it has been clearly explained to her, one can only attribute her resistance to the application to a lack of understanding of the full implications of the order sought or

Page 42 perhaps to some antipathy that has developed between the respondent as his step-mother and the applicant (and his issue as descendents of the testator's former marriage). [22] Subject to the adequacy of the price which the prospective purchaser of the residential property at New Farm is willing to pay for the remainder of that property subject to the life interest of the applicant - which would be of more interest to the applicant and his children than it would be to the respondent, I should think the only matter to be determined is whether I am given power to make such an order under the Trusts Act which in effect would vary the trusts resulting from the dispositions of the will with a view only to improving the position of the respondent as far as her future security in her old age is concerned and to leading to a much earlier winding up of the estate than might otherwise be the case. [23] I will turn then to those sections of the Trusts Act upon which the applicant relies. [24] Under s6(1)(d) of the Trusts Act 1973 it is provided inter alia "6 Exercise of powers (1) Subject to s31(3), the powers by this Act conferred on a trustee may be exercised by, and the powers by this Act capable of being conferred by the court on a trustee may be conferred upon and, where conferred, may be exercised by, the following persons -

20 21 22 23 24

(a) ... (b) ... (c) in respect of any land or other trust property not hereinbefore provided for-by the trustee (if any) of that land or other trust property; (d) in any case, or where the persons by whom, or at whose direction, the powers conferred by this section are exercisable do not agree - by such person or persons and in such manner as the court may order or direct on application thereto of any person who has, directly or indirectly, an interest, whether vested or contingent, in that property."

[25] Under s32 of the Act of course, a trustee may sell a trust property or any part of it. In any event the applicant and the respondent in this case are expressly given power of sale of the house property presently occupied by the respondent. [26] Under s94 of the Trusts Act, where the court is of the opinion that any sale or other disposition or other transaction is expedient in the administration of any property vested in a trustee, or would be in the best interests of the persons, or the majority of such persons beneficially interested under the trust, but it is inexpedient to effect the disposition or transaction without the assistance of the court, the court may by order confer upon the trustee the necessary power to do so subject to such provisions and conditions as the court may think fit. [27] Under s95(1)(b) of the Act it is provided that where real property is held on trusts the court may approve (b) any person (whether ascertained or not) who may become entitled, directly or indirectly, to an interest under the trusts as being at a future date or on the happening of a future event ... any arrangement (by whomsoever proposed and whether or not there is any other person beneficially interested who is capable of assenting thereto) varying or revoking all or any of the trusts, or enlarging the powers of the trustees of managing or administering any of the property subject to the trusts." [28] Under s98(1) and s6(1)(d) of the Act the applicant in this case may seek an order concerning the trust property which he and the respondent together hold because he is a person beneficially interested in the trust property as well of course, as being a duly appointed trustee under the will who does not agree with his co-trustee. [29] In my view, the order which the applicant seeks would be for the benefit of all beneficiaries of the trust

Page 43 property (and/or its proceeds of sale) which the applicant and the respondent together hold as trustees under the will, and in particular would be for the benefit of the respondent. [30] The order sought would also be expedient in the management or administration of the real property vested in the applicant and respondent. If made it would almost certainly result in a speedy termination of the administration of the estate, which has to date has extended over a period of 11 years and which might in the absence of the order sought extend for an unpredictable time perhaps even exceeding a further 11 years. [31] It is not really contended that the court does not have jurisdiction to make the order sought; it is rather contended that the order should not be made because the respondent is content with the way the testator's estate's assets have been administered over the last 11 years and there is no good reason advanced to justify making any order which might hasten the termination of administration of the estate. [32] In my view, the applicant has made out a proper case for the relief which he seeks. Order [33] I order therefore that 1. Each of the applicant and the respondent be empowered jointly and secondly to transfer to the respondent a life interest in the property referred to in cl3(e) of the will situated at 160 Oxlade Drive, New Farm, described as Lot 12 on RP 8785 and Lot 1 on RP 45693. 2. That upon the registration of the respondent as the proprietor of a life estate in fee simple in the said property, the applicant and respondent, as trustees under the will, hold the remainder of that estate in fee simple upon the trusts specified in cl3(e), cl3(ii), cl3(aa) and cl3(bb) of the will. 3. That the applicant as executor and trustee of the will of FRANCIS THOMAS HUMPHREYS deceased with or without the consent of the respondent have power to sell the remainder of the estate in fee simple in the said property referred to in cl3(e) of the will to Joseph Alexander Mackay and Catherine Cynthia Heather Mackay being the parties to a contract a copy of which is Exhibit E to the affidavit of Noel Patrick Humphreys filed herein on 28 February 2002 for the sum of $770,000 subject to the prior production to this court of a valuation by an approved valuer being a member of the Australian Institute of Valuers selected by at least one of the trustees of the will demonstrating that $770,000 is not less than the value of that property at the time of sale. 4. I order that the costs of the applicant and of the respondent of and incidental to this application be assessed upon an indemnity basis and that those costs be a first charge upon the proceeds of any sale of the remainder of the estate in fee simple referred to in para2 of this order. 5. Each of the applicant and the respondent have liberty to apply for further orders or directions upon four (4) days notice in writing given to the other. Counsel for the applicant: A Heyworth-Smith Solicitors for the applicant: Lawson Jones Counsel for the respondent: D J Morgan Solicitors for the respondent: de Groot & Co

Page 44

Page 45 7 of 10 DOCUMENTS: CaseBase Cases

Miller v Miller
[2002] NSWSC 250; BC200201581 Court: NSWSC Judges: Macready M Judgment Date: 22/3/2002

Catchwords & Digest

Succession -- Family provision -- Parental estate -- Contribution by all children Application for redistribution of estate pursuant to (NSW) Family Provision Act 1982. Plaintiff daughter lived with and attended to domestic duties for mother. Will provided for daughter to live in house for three years after testatrix's death. House to be sold and proceeds given half to daughter, and quarter each to sons. Plaintiff received financial assistance from mother during her lifetime. Plaintiff made some material contributions to estate property. Defendant sons contributed materially and by other care to mother's comfort. Second son in situation of relative financial need. Whether plaintiff had demonstrated need for readjustment of estate shares such that she should either receive house, life interest in it or income supplement. Held: Application refused. Insufficient evidence given by plaintiff to prove need to receive house or some specific level of income supplement. Unjust to brothers to tie asset up in life estate. Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations Shearer v Public Trustee; Considered BC9801169 Hawke v Public Trustee (1994) 181 CLR 201; (1994) 123 ALR 481; (1994) 68 ALJR 653; Applied Singer v Berghouse (No 2) (1994) 18 Fam LR 94; [1994] HCA 40; BC9404642 Legislation considered by this case Legislation Name & Jurisdiction Family Provision Act 1982

Court NSWSC

Date 23/3/1998

Signal

HCA

14/9/1994

Provisions -

Page 46

Page 47 8 of 10 DOCUMENTS: CaseBase Cases

Cheney and Secretary, Department of Family and Community Services, Re


(2002) 34 AAR 496; [2002] AATA 163 Court: AATA Judges: Campbell (Member) Judgment Date: 14/3/2002

Catchwords & Digest

Social welfare and services -- Pensions -- Age pension -- Retirement assistance for farmers Application for review of decisions that applicant did not qualify for Retirement Assistance for Farmers Scheme (RAFS) and that applicant not entitled to age pension. Applicant widow of farmer. Half share of farm owned as tenant in common. Equitable life interest held in other half share. Interests transferred to applicant's children. Whether applicant qualified for RAFS. Whether total value of qualifying interests in farm transferred to eligible descendant exceeded $500,000. Whether applicant entitled to age pension. Held: Application allowed. Applicant qualified for RAFS. Total value of qualifying interests in farm transferred to eligible descendant did not exceed $500,000. Applicant's entitlement to age pension to be reassessed by respondent. Legislation considered by this case Legislation Name & Jurisdiction Social Security Act 1991 (Cth) Social Security Amendment (Retirement Assistance for Farmers) Act 1998

Provisions s 1064, s 1185A, s 1185B, s 1185B(2), s 1185B(4), s 1185D, s 1185E, s 17A, s 17A(5), s 17A(6) -

Page 48

Page 49 9 of 10 DOCUMENTS: CaseBase Cases

Nydegger v McKenzie
[2001] NSWCA 393; BC200107052 Court: NSWCA Judges: Sheller, Beazley and Hodgson JJA Judgment Date: 15/11/2001

Catchwords & Digest

Equity -- Equitable interests -- Clean hands -- Provision Appeal from decision of trial judge. Decision that appellant held interest in real property on trust for respondent daughter. Maxim that 'he who seeks equity must do equity'. Rift between mother and respondent daughter. Whether daughter should make some provision in appellant mother's favour as condition of relief. Held, allowing the appeal in part: (i) The trial judge made no error in finding both reliance and detriment such as to give rise to an estoppel precluding the appellant from resiling from her promises that the respondent should have real property upon her death. (ii) However, the trial judge erred in the form of the declaration made in that the declaration did not make the trust in favour of the respondent subject to a life interest in favour of the appellant. (iii) The question of the respondent doing equity in relation to the appellant's life interest was not adequately addressed at the primary hearing. Litigation History Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations [2000] NSWSC 982; Varied McKenzie v Nydegger BC200006397 Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations [1999] 3 VR 712; Cited Flinn v Flinn [1999] VSCA 109; BC9904617 (1992) 175 CLR 621; (1992) 110 ALR 1; (1992) 67 ALJR 95; Cited Louth v Diprose [1993] ANZ ConvR 214; (1993) Aust Contract R 90-021; BC9202680

Court NSWSC

Date 25/10/2000

Signal

Court VSCA

Date 4/8/1999

Signal

HCA

2/12/1992

Page 50 Cited Cited Cited Constanton v Permanent Trustee Australia Ltd Nieborak v Piper Sander v Twigg BC9101904 BC9001658 (1887) 13 VLR 765 NSWSC NSWSC VSC 13/6/1991 11/12/1990 3/10/1887

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10 of 10 DOCUMENTS: Unreported Judgments NSW 62 Paragraphs

NYDEGGER v McKENZIE - BC200107052


SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SHELLER, BEAZLEY AND HODGSON JJA CA 41041/00 25 September 2001, 15 November 2001 Nydegger v McKenzie & Anor [2001] NSWCA 393
EQUITY -- Estoppel -- Maxims -- "He who seeks equity must do equity" -- Daughter benefit of trust of property subject to life interest in mother -- Rift between mother and daughter -- Whether daughter as condition of relief should make some provision in mother's favour.

Sheller JA
[1] I agree with the reasons of Hodgson JA as set out below.

Beazley JA
[2] I also agree with Hodgson JA.

Hodgson JA
[3] On 15th December 2000, Bergin J made orders to the effect that, subject to certain conditions, Olivia Nydegger held her interest in four farm properties near Dubbo and certain associated assets on trust for her daughter Therese McKenzie, and also made certain consequential orders. We are dealing with an appeal from those orders. For convenience, I will generally refer to the parties and their relatives by forenames. BACKGROUND CIRCUMSTANCES [4] Olivia was born in 1918. She married Marcel Nydegger, and there were four children of the marriage: Robert, Leon, Christine, and Therese, the youngest born 25th October 1953. Therese married Colin McKenzie in 1975, and there are three children of that marriage: Grahame and Matthew, both in their twenties, and Max who is about twelve. [5] In 1977, Marcel retired from practice as a dentist, and from about that time Marcel and Olivia established a cattle stud in partnership with Michael and Robin Fraser at the Frasers' property "Toonga" at Tarcutta. [6] In 1986, Therese and Colin were living on a five acre property at Pitt Town. In that year, the property

Page 53 "Warrawong" near Dubbo was purchased by Therese and Colin as joint tenants as to one half share and Olivia as to the other half share, as tenants in common. The price was $226,000.00. About $126,000.00 was provided by Olivia, and the balance by Therese and Colin: this balance was provided through bridging finance until they sold the Pitt Town property. Therese and Colin then moved to "Warrawong", where they ran goats and then sheep in partnership with Olivia. [7] In 1987 to 1988, a family company was dissolved by Marcel, and its assets distributed to the children. Therese and Christine received about $167,000.00 each, and Robert and Leon received about $180,000.00 each. [8] In 1989, Marcel purchased a property "Bela" about five kilometres from "Warrawong" for about $160,000.00. [9] By 1990, the Frasers' marriage had broken up. To continue the "Toonga" cattle stud, Mr Fraser purchased 1600 acres of a property "Coleraine", adjoining "Warrawong", and Olivia purchased about 900 acres of that property for $340,000.00. This 900 acres has been called "Coleraine I". About twelve months later, there was a falling-out between Olivia and Mr Fraser, and the "Toonga" stud was divided. Olivia's thirty-seven stud cows from this stud were then added to the stock of a stud called "Coleraine Murray Grey Stud", which had been commenced separately on "Coleraine I" and operated by Therese and Colin. This stud was built up over the years, and by the time of the hearing was estimated to be worth between about $200,000.00 and $400,000.00. [10] On 13th August 1991, Marcel died, and Olivia became the sole registered proprietor of "Bela". [11] In about 1995, Olivia, Therese and Christine began operating an alpaca stud in partnership on "Coleraine I". This partnership was dissolved in 1998. [12] In early 1997, Olivia was living in a house in Pennant Hills Road, North Parramatta. Leon was living with her, and Christine was living in the house next door. [13] In about May 1997, another 900 acres of "Coleraine" (called "Coleraine II") was purchased in the names of Olivia and Therese as joint tenants. The price of $380,000.00 was borrowed by Olivia and Therese from the bank, and repaid by Olivia when she sold her house at North Parramatta. Having sold that house, in October 1997, Olivia moved to the homestead on "Coleraine II"; and a little later Therese and her family also moved into this homestead. [14] On 26th March 1998, Olivia and Therese visited the accountant Vicki O'Connor at Darcy Kennedy Pty Ltd, and discussed making changes to the "Warrawong" partnership. [15] On 18th May 1998, Olivia was referred by a solicitor Peter Duffy to see another solicitor Kenneth MacDougall in Dubbo for the purpose of providing her with independent advice in relation to the creation of joint tenancies with Therese. In Mr MacDougall's presence, Olivia signed transfers transferring to herself and Therese as joint tenants Olivia's half share in "Warrawong", and the whole of "Bela" and "Coleraine I". [16] There is in evidence a letter in Grahame's handwriting, bearing date 14th September 1998 and addressed to Darcy Kennedy, and bearing Olivia's signature. The letter states as follows: I Olivia Nydegger acknowledge that my partnership between myself, Colin and Therese McKenzie cease to operate in March 1998. I accept no entitlement to the livestock, plant and machinery. [17] 9th October 1999 was Olivia's 81st birthday. The four siblings were present at "Coleraine". There was a heated family discussion in which the other three siblings alleged that Therese had Olivia under her thumb, was ripping the stud off, and taking her mother's assets. [18] In June or July 1999, Olivia told Therese she could only give her half the stud. [19] On 9th August 1999, a mediation was arranged to be held with Ms O'Connor. Therese and Colin refused to attend. [20] Olivia brought some notes to the meeting concerning what she said was the position in relation to each of her children. These notes were as follows:

Page 54 Robert Nydegger. My eldest son has not received any money. Mrs Christine Roffey - my eldest daughter In Parramatta we owned two homes adjoining. Christine rented one of these for fifteen years at $150.00 a week. When I was selling my home Christine didn't want to stay there and we decided to sell both homes in one lot. I purchased another home for her at Londonderry on 5 acres for $380,000.00. This property is in my name and Christine has been paying $150.00 a week rent up til a few months ago. She now has to pay the rates and insurance on this property. She has not received any other money from me. Leon Nydegger - my second son Leon is not married. He has lived at home all his life. Since my husband died 8 years ago Leon was my constant company. I gave him $265,000.00 to buy a property Bilpan (sic). I still hold $5,000.00 of his money, making the full amount $270,000.00. I gave him $10,000.00 before selling out in Parramatta and on the 3 occasions I gave him $10,000.00 over the years. Therese McKenzie - my second daughter Thirteen years ago Therese and Colin wanted to move out of Windsor and go into the country. We found a property at Elong called "Warrawong". They had $100,000.00 and I made up the difference of $120,00.00 plus tax. My late husband brought a property of 1100 acres a couple of years later for $160,000.00 which was near by. He bought a mower bailer and loader also a new hay shed for $110,000.00 for Therese. He also paid $8,000.00 for a new plow (sic) for them which they sold later for $2,000.00. I bought the first part of "Coleraine" 900 acres for my Murray Grey Cattle and the second section a year or so later for a home for myself. The total cost was $705,000.00 plus tax. I spent $4,000.00 for a dam on the first Coleraine and $12,000.00 for a boar (sic). Therese said the money for the boar (sic) came out of funds, but I don't think so. I was going to put another dam on the home block for my garden which would have cost me 5000 to 6000 dollars, but was advised to buy a bulldozer for $30,000. That is over a year ago but I still haven't got the dam. I paid $10,000 for a large rainwater tank to the home. I paid half the price of a new four wheel bike for cattle use. I paid for the steel for a set of cattle yards and Colin did all the work of making them. As for the commercial herd of cattle I put in half the cattle and Colin and Therese put in half. They consider this herd theirs. I have not received any money whatsoever over 13 years for cattle or anything else. Quite a large area is under crops. They did buy me a wheelbarrow for $350 last year and Therese is paying the rates on the property. I paid the rates on Pop's block up til last year and Colin and Therese have had the full use of Pop's block since it was purchased. They usually run 700 wethers up there, but now have 350 ewes lambing up there. Stud Cattle There is now a problem over the stud. Toonga Murray Grey Stud was started in 1977 at Tarcutta NSW. It was run for 13 years by Mr and Mrs M Fraser who owned the property Toonga. My late husband and I purchased the stud cattle. Any of their progeny born on Toonga were to be jointly owned by the four of us. Mr Fraser bought a float and hammer mill and paid all the feed and labour. After a couple of years breeding we showed the cattle with great success winning champion ribbons at Canberra Royal Sydney RAS and were the most successful Murray Grey breeders at Melbourne Royal. We did very well financially with the sale of bulls. Owing to a family break up in the Fraser family, the property had to be sold. My half of the cattle were the foundation of Coleraine stud. Since then I have spent close on $80,000 on stud cattle to improve the herd which is in a good position. Colin and Therese have also work (sic) hard to make a success of it. I also bought a float for $16,000 and a

Page 55 hammermill for $9,000 plus other extras. I am not prepared to slip out of the stud after 21 years for $5,000 a year, which I have refused. Colin and Therese's second proposition was to give them 2/3 of the stud and 1/3 to me which is to revert to them. I still supply all the grazing. I can't see this is fare (sic) to me or the rest of the family. If I don't agree to this they won't do anything more with the cattle and the stud will have to be sold later in the year. I will have to get someone else to look after them in the meantime. If this happens, it will end my interest in the hole (sic) set up. [21] Notes were taken of the meeting, and of a subsequent meeting with Christine: those notes are set out below: NOTES OF THE FAMILY MEETING HELD AT DARCY KENNEDY OFFICES 9TH AUGUST 1999 ATTENDEES: Olivia Nydegger, Leon Nydegger, Robert Nydegger, Christine Roffey Advisors: Lyn Sykes, Vicki O'Connor 1. Lyn requested an outline of the family history, and this was drawn on the whiteboard. A copy is attached at the back of these minutes. 2. Lyn asked each family member to outline why they wanted the meeting and what they hoped to achieve. a) Christine

25 26 27 28 29 30
b) Leon

o To equalise the division of Olivia's assets - when she dies. o Fear of all assets going into Therese's name. o Therese living with Mum/Colin and Max and may be using her influence to change/move assets into their names. o All properties (near Dubbo) have been put into joint tenancy - advised by Lands Department - and this has increased her fear of Therese and Colin taking all assets. o The Alpacas are an issue from Christine's viewpoint. o Lyn asked Christine what she does and she stated that she is in the Gem business/Alpaca business.

31 32 33
c) Robert

o To understand or confirm who is to get what share of assets on Mum's death. o What are her assets? o He stated that he is a Beekeeper on land at Bilpin (bought by his mother recently).

34 35 36 37 38
d) Olivia

o To make sure that Mum gets her share of income currently and then individually to ensure that Mum's estate is divided equally. o Robert stated that Therese and Colin bought their original property with Olivia. Olivia put in $130,000 while Therese put in $100,000. They then took over Dad's property (1100 acres) 8 years ago on his death. o Olivia later bought another 900 acres. o Finally Olivia bought another 900 acres just 18 months ago. o Robert stated that he is a farmer on land at Orange (217 acres).

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39 40 41 42

o To look at a more even distribution to other children. o The stud cattle have been held 21 years and needs to be decided what to do with them. o She doesn't really want to live with Therese and Colin. She would prefer a house on her own. o She would like to have a better return on her assets the she currently receives.

3. Lyn then asked what assets did Olivia have? Assets Christine advised these were: Land (joint tenants with Therese) (valuations from 4/5/98) 611.5 ha Warrawong (1/2 share) 459.7 ha Bella 360.58 ha Colleraine (1st block lots 1, 15 & 16 Colleraine (2nd block) (purchased) Other Assets Farming: Alpaca (10 head) Stud cattle (250 head) (valued by children) Other 52 MacPherson Road (lived in by Christine & her husband) Bank Accounts: as at 30/6/98 National Bank ANZ Bank Champion & Partners Colonial State 615 134506-81 State Bank Term Deposit 060 69015360 State Bank Cheque A/C BHP Shares (39930 @ $15) State Bank All-In-One 060 690911-83 Total Assets: Assets - Other Bilpin Property (in Leon's name)

$155,000 $ 96,000 $350,000 $380,000 $981,000 $100,000 $200,000 $300,000 $360,000 $ 730 $ 15,458 $ 29,000 $ 2,737 $ 36,700 $ 4,940 $598,950 $ 59,698 $ 748,213 $2,389,213 $250,000 $2,639,213

o Olivia stated that if the issues cannot be resolved she would like to sell one property and move closer to other family members. o Peter Duffy (Solicitor) has a copy of Olivia's will. Olivia cannot remember what her will contains. o Olivia presented her notes to the meeting and a copy is on file for future reference. 4. General Comments Many issues were raised and some general comments were made. o Olivia felt her living expenses were approximately $250.00 per week. o The farming land assets were changed into joint tenancy because Olivia wanted to do so at the time. She was advised by Pete Duffy to seek independent legal advice and did so at that time. o Colin and Therese had worked on the farm for the last ten years (approximately) and would be entitled in

Page 57 a court of law to seek payment for same at a Manager's rate of pay. This was discussed to be between $25,000 to $50,000 per annum. o Olivia disclosed that each of the four children had received $200,000 from the estate of her husband eight years ago. Lyn questioned whether in fact, Therese may have put her share into the operation of the farm. If so, she would also be entitled to claim this money from the value of Olivia's assets. o It was resolved that no-one wanted to pursue a legal action. Recommendations o It was resolved that another meeting would be held at 9.00am on 22 September 1999 at the Darcy Kennedy Pty Ltd building. All family members are to receive a copy of these minutes and invited to attend:-

43 44 45 46 47

Olivia Robert & June Christine & Arthur Leon Therese & Colin

o The next meeting is to be limited to discussion of the options for the future of the Cattle stud. The group was asked to make a list of some options regarding the stud. Nine options were suggested and are attached. o After the next meting, a third meeting should be held to discuss the asset dispersal. Olivia would decide which assets she wants to have go to which family members and whether she wants this to happen now or via her estate. 6. Prior to the Next Meeting It was agreed that the family members would take some action prior to the next meeting 1. Solicitor The family would approach Peter Duffy and find out this information:-

48 49 50
2. Bank

a) What are the terms of any Powers of Attorney's held? b) Can Olivia sell any of the properties held in joint tenancy? Can the joint tenancy be undone? If so, at what cost? c) What are the terms of Olivia's current will?

The family would approach the State Bank to provide detail :

51 52

a) Who are the signatories on the bank accounts in Olivia's name? b) What are the balances on these accounts?

Accountant (Vicki O'Connor) Prior to the meeting, Vicki is to provide to all family members Stud records for last five years. This is to show how many cows are registered, what sales and purchases occurred and an update to 30 June 1999. This trading information should include the Alpaca Stud updated until the split. In particular, Vicki is to provide details on how much income Olivia has received from the sale of the stud cattle versus how much the McKenzie's received. 7 Conclusion Lyn asked how each person felt at the end of the meeting.

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53 54 55 56 57 58 59 60 61 62 63 64

a) Christine Christine felt that some of her questions had been answered. b) Leon Leon was satisfied with the day. He wants to see Olivia happy and needs to solve some of these issues. c) Robert Robert felt that a step had been taken in the right direction. d) Olivia Olivia felt that a lot of good had been done. NEXT MEETING: 22ND SEPTEMBER 1999 9.00AM DARCY KENNEDY PTY LTD BUILDING

NOTES AFTER THE MEETING Christine had returned to the office and advised the following:1. The solicitor said the joint tenancies could be "undone" for a fee of $67.00 each. 2. The State Bank advised that the account balances and signatories are:-

65 66 67 68 69 70 71 72

Account name & details Balance Signatories State High Performance $2,736.29 (Olivia only) (615 134506-81) State Bank Term Deposits $13,844.17 (Olivia only) (60 69013560) . State Bank Cheque A/C $3,312.78 (Olivia, Colin & Therese) State Bank All-In-One $17,967.36 (Olivia only) (060 690911-83)

The State Bank also advised that the following other accounts existed:-

73 74 75 76 77

State Bank (12921381) $4,593.08 (Olivia & Therese) State Bank Warrawong $16,547.63 (Colin, (13649900) Therese, Olivia & Grahame) State Bank Term Deposit $9,982.50 (Olivia only) (13877760)

Christine commented that there did not appear to be a "Colleraine" account. OPTIONS FOR STUD 1. Colin & Therese to guarantee $5,000 payable to Olivia and that she transfer ownership of the Stud 2. Transfer 2/3 ownership to Colin & Therese and keep 1/3 herself. That the balance of 1/3 to be transferred on Olivia's death.

Page 59 3. Sell all of the Stud. 4. Transfer Stud to another location. 5. Olivia sell farm (Colleraine block) and move stud and Olivia elsewhere. 6. Olivia to transfer stud to all four children now. 7. Do nothing. 8. Olivia to give Therese 1/2 of the stud now and leave the boys 1/4 each on her death. 9. Colin & Therese to buy the Stud from Olivia. [22] It appears that Robert, Leon and Christine then prepared a handwritten document, the effect of which appears to be that Therese should pay Robert $340,000.00 in order that reasonable equality be achieved among the children. [23] On 10th August 1989, Christine took this document to Therese, and said words to the effect that, if Therese wanted all the properties, she would have to raise $340,000.00 for Robert. Therese would not consider this proposal. [24] A day or so later, Olivia left for Sydney in order to deal with litigation arising out of the sale of the properties at North Parramatta, only taking a small suitcase with her. A few days later, Therese had caveats placed on the properties, and on 2nd September 1999, Olivia signed a document to sever the joint tenancies on the properties. Olivia has not returned to "Coleraine", and these proceedings were commenced, initially so as to maintain the caveats on the title. THE PROCEEDINGS [25] In the proceedings, Therese claimed, on the basis of contract or estoppel, entitlement to Olivia's interests in the four properties and the stud, subject to a life interest in favour of Olivia. Olivia put on a cross-claim for relief, including the setting aside of the transfers of 18th May 1998 and relief in relation to the profits of the partnership and the stud. [26] The basis of Therese's claim was as follows. Therese alleged that in 1986, she and Colin sold the Pitt Town property, put the proceeds of sale into "Warrawong", and moved to "Warrawong", in reliance on a promise and/or representation by Olivia that, if they did so and worked the property, Olivia would transfer her half interest in the property to Therese on her death. Subsequently, in further reliance on that promise and/or representation, Therese and her husband continued to work that property. [27] Next, Therese alleged that in 1991, Olivia made a promise and/or representation to her that, if she and Colin did the work to operate and improve the Coleraine Murray Grey Stud, Olivia would transfer the stud to Therese on her death; and in reliance thereon, Therese and Colin did the work to operate and improve that stud. [28] Next, Therese alleged that in or about 1991, Olivia made a promise and/or representation to Therese that, if she and Colin worked "Bela", Olivia would transfer "Bela" to Therese on her death. In reliance thereon, Therese and Colin did work "Bela". [29] Next, Therese alleged that in 1992, Olivia made a promise and/or representation to Therese that, if she and Colin did the work to operate and improve the stud on "Coleraine I", Olivia would transfer "Coleraine I" on her death; and in reliance thereon, Therese and Colin did work to operate and improve the stud on "Coleraine I". [30] Finally, Therese alleged that in May 1997, Olivia made a promise and/or representation to Therese that, if she and Colin continued to do the work to operate and improve the stud partly on "Coleraine II", Olivia would transfer "Coleraine II" to Therese on her death; and that in reliance thereon, Therese and Colin did do the work to operate and improve the stud partly on "Coleraine II". [31] Olivia denied the promises and/or representations, denied inducement, and denied that what Therese

Page 60 and Colin did gave rise to any estoppel or trust. In particular, Olivia alleged that they worked the properties and the stud for their own benefit, did not account to her for profits, and did not pay her any money arising from them. In her cross-claim, Olivia alleged that she signed the transfers in May 1998 under duress and was not aware of their effect; and also alleged that she did not knowingly sign the renunciation in relation to the partnership, and claimed accounts of the partnership. [32] The primary judge rejected Olivia's claim of duress and lack of understanding, and held that she was bound by the transfers and by the renunciation. She found that promises and/or representations were made as alleged by Therese. She found reliance and action to her detriment by Therese as alleged, so as to make it just that a trust be imposed on Olivia's interests in the four properties and the stud. The primary judge made the following orders: THE COURT DECLARES that:1. Subject to the condition specified in para2 below, the First Defendant holds her interest in the lands known as "Warrawong", Bela", "Coleraine I" and "Coleraine II", these being respectively the lands contained in Folio Identifiers 27/754293, 25/54293, Auto Consol 94228 and 13/754292 on trust for the Plaintiff. 2. The First Defendant is entitled to live with the Plaintiff and her family on Coleraine II and, in the event that the First Defendant avails herself of this entitlement, the Plaintiff shall maintain and support the First Defendant for the remainder of her life. 3. Subject to the condition specified in para4 below, the First Defendant holds her interest in the assets of the "Coleraine Murray Grey Stud" ("the Stud") including but not limited to those cattle which are or may in the future be registered by the Murray Grey Breeding Society with the prefix "NYK" or "NFR", their progency (sic), stored semen and plant and equipment, on trust of the Plaintiff. 4. The First Defendant is entitled to fifty percent (50%) of any profits from the Stud during her lifetime. 5. The joint tenancies on the lands described in O1 above are hereby severed by virtue of that order. THE COURT ORDERS that:6. The Second Defendant shall forthwith register the document entitled "Transfer Unilaterally Severing Joint Tenancy" No 6161303, a copy of which is annexed to these Orders and marked "A". 7.The Second Defendant shall forthwith register the "Transfer Unilaterally Severing Joint Tenancy", a copy of which is annexed to these Orders and marked "B" 8. The First Defendant by herself, her servants and agents, is permanently restrained from mortgaging, charging, encumbering, disposing of or otherwise dealing with her interest in the lands known as "Warrawong", "Bela", "Coleraine I" and "Coleraine II". 9. The First Defendant by herself, her servants and agents, is permanently restrained from: (a) mortgaging, charging, encumbering, disposing of or otherwise dealing with her interest in the assets of the Stud; and (b) doing or permitting or omitting to do any act or acts the effect of which would or might interfere with the operation of the Stud by the Plaintiff. 10. The Plaintiff is hereby entitled to lodge a Caveat on the First Defendant's interest in each of the lands described in O1. 11. The Further Amended Cross-Claim is dismissed. 12. The First Defendant is to pay the Plaintiffs costs in these proceedings, and those of the Second CrossDefendant. 13. Liberty to apply on 48 hours notice.

Page 61 GROUNDS OF APPEAL [33] Numerous grounds are set out in the Amended Notice of Appeal. Some merely challenge the ultimate findings, and need not be considered further (Grounds 3 and 16). Others challenge the primary's judge's rejection of duress and other grounds for setting aside the transfers and the renunciation (Grounds 1, 5, 18, 22 and 23). Others again challenge the finding that there were the promises and/or representations (Ground 2). Others challenge the findings of reliance and action to Therese's detriment (Grounds 4, 6, 7, 8, 9, 10, 11, 12, 13 and 17). Finally, there are others challenging the conditions of the order, especially those concerning Olivia living and being supported on "Coleraine II" (Grounds 14, 15, 20 and 21). [34] Several of the grounds, and a substantial part of the argument, amounted to challenges of findings of fact made by the primary judge. It is not necessary or appropriate to refer to all of them, because in general terms they seek to challenge those findings in ways that are just not open on appeal. However, I will focus on the principal submissions made on this and other matters. DETRIMENT [35] Mr McInnes QC submitted that there was a plain error by the primary judge in finding that Therese had suffered detriment in reliance on Olivia's promises and/or representations, so as to justify the imposition of trusts. In particular, he submitted that Therese and Colin had been unsuccessful in previous business ventures; that they had developed skills in operating the properties, with which they could earn amounts in the order of $50,000.00 per year each; that they enjoyed the work on the properties; and that they had kept all the benefits of the operations of the properties and paid nothing to Olivia. [36] I accept that these were matters relevant to the question which the primary judge had to consider. However, there were matters pointing the other way: undoubtedly, Therese and Colin had lost the opportunity to develop and pursue other modes of life; for them to attempt to capitalise in the job market on the skills they had acquired would be very different from applying these skills in running their own property; the primary judge found, as she was entitled to do, that Therese and Colin had worked very hard and lived very frugally over thirteen years, for very little return apart from the improvement of the property; and the primary judge found, as she was entitled to do, that Olivia had the benefit of participating in the operation of the properties and the continuing success of the stud. [37] In my opinion, subject to what I say about proposed amendments to the grounds of appeal and about the conditions of the orders, no appealable error has been shown in the primary judge's finding of reliance and detriment such as to give rise to an estoppel precluding Olivia from resiling from her promises and/or representations that Therese should have the four properties and the stud upon her death. ADDITIONAL GROUND ON DETRIMENT [38] During the hearing of the appeal, the appellant sought to add a ground of appeal along the following lines: Her Honour failed to consider whether there was action to detriment in reliance on representations or promises made for properties other than "Warrawong", that is Bela, Coleraine I and Coleraine II and the stud, and/or that her Honour erred in finding there was such action to detriment in relation to promises or representations in relation to those properties as would justify the imposition of a trust. [39] The application to amend was opposed by Mr Sexton SC for the respondents. He pointed out that the application, in so far as it applied to "Coleraine II", was hopeless and against a concession made at the hearing; and he referred us to Black Appeal Book p288, where Olivia said unequivocally that "Coleraine II" was to go to Therese, so that she could not leave it to anyone else. In relation to the properties "Bela" and "Coleraine I", Mr Sexton submitted that no suggestion had been made at the trial that Therese and Colin would have acted in substantially the same way even if there had not been promises and/or representations concerning "Bela" and "Coleraine I", but on the contrary, it was suggested that "Warrawong" was not viable on its own, so that they needed "Bela" and "Coleraine II" to have a viable holding. Mr Sexton also pointed to detailed evidence given by Colin in particular as to work done subsequent to and in reliance on the

Page 62 promises and/or representations made in relation to "Bela" and "Coleraine I". [40] In my opinion, having regard to the concession made in relation to "Coleraine II" and the lack of any attempt at the trial to suggest any different position concerning reliance and detriment in relation to "Bela" and "Coleraine I" as distinct from "Warrawong", leave should not be granted to add this ground of appeal. RENUNCIATION OF PARTNERSHIP [41] Mr McInnes submitted that Therese had given evidence that she had been advised by Ms O'Connor that the partnership could cause trouble after Olivia's death, and that she told her mother about this, and then later changed her evidence to say that Olivia had been present when this advice was given. He submitted that Ms O'Connor had no recollection of this, but said there would be no problem caused by the partnership, so that, Mr McInnes submitted, it was unlikely that Therese's evidence was correct. Mr McInnes submitted that the primary judge should have found that Therese procured the signing of the renunciation, that Olivia did not knowingly sign it, or that Olivia did sign it without appreciating its effect. Further, Mr McInnes submitted that the renunciation, on its true construction, did not give up any right to the capital assets of the partnership or any right to an account of partnership profits over the years. [42] In my opinion, apart from the construction question, the submissions amount to no more than an attempt to challenge primary findings of fact, in circumstances where no ground for interference by an appellate court with such findings is shown. On the construction question, it is my opinion that the document plainly indicates in intention to renounce any rights in partnership assets, including both capital assets and rights to an account of profits in previous years. TRANSFER OF REAL ESTATE [43] Mr McInnes submitted that there was evidence of pressure being applied to Olivia to make the transfer of May 1998, which had not been denied. He submitted also that there was a presumption of undue influence in relation to a transfer from a parent to a child: see Louth v Diprose (1992) 175 CLR 621 at 628. [44] In my opinion, the presumption of undue influence as between parent and child only operates in relation to transactions in which the child benefits the parent, not vice versa. In my opinion, there was in substance a plain denial by Therese of pressure, and the primary judge's decision that there was no duress or undue influence amounted to unappealable decisions of fact. CONDITION OF RELIEF [45] Orders made by the primary judge which provided for a trust in favour of Therese of Olivia's interests in the four properties and in the stud were not made subject to a life interest in Olivia, as had been claimed in the Statement of Claim. Although this was not made a ground of appeal, it was conceded by Mr Sexton that those orders should have been made subject to Olivia's life interest. [46] Mr McInnes submitted that it was not appropriate that the only benefit going to Olivia from that life interest should be a right to reside at and be supported at "Coleraine II" (along with one-half of the profits of the stud) when, due to the breakdown of the relationship between Olivia and Therese, Olivia did not wish to return to live there. Furthermore, the associated requirement of support for Olivia was one which was impossible for the Court to supervise. Mr McInnes submitted that it was reasonable for Olivia to want a return from her assets during her lifetime and a fair distribution to her children on her death. There was an obligation on Therese, in seeking equity, to do equity. In the result, Mr McInnes submitted, that relief either should be denied, or should be granted subject to a condition appropriate to do equity to Olivia, such as a payment of a fair rental for Olivia's interests. [47] There was some question whether these submissions fell within the grounds of appeal, but the Court in the course of argument indicated a view that it fell within the grounds 14, 15, 20 and 21. In any event, no prejudice was suggested by Mr Sexton in relation to these submissions. [48] Mr Sexton submitted that the primary judge had appropriately addressed considerations as to what was

Page 63 required for equity to be done to Olivia. He submitted that it was not apparent until the hearing that Olivia claimed to be firm in her resolve not to return to "Coleraine II", and that the primary judge was entitled to conclude that reconciliation was a realistic expectation. The conditions imposed were appropriate. Mr Sexton referred to Flinn v Flinn [1999] 3 VR 712. He submitted also that that case showed that a condition of support and maintenance was one which could appropriately be imposed. Mr Sexton submitted that the Court should not let the tail wag the dog, and refuse relief because of difficulty in relation to the conditions to be imposed. [49] In case the Court took a different view, Mr Sexton indicated that he had instructions to offer, in order to do equity in relation to Olivia's half interests, $25,000.00 per annum by equal monthly instalments. $25,000.00 had previously been discussed in argument before this Court as a figure given by applying an annual rate of five percent to assets of capital value of $500,000.00. [50] In my opinion, there was a plain error in the form of the declarations, in that they did not make the trust in favour of Therese subject to a life interest in favour of Olivia, as had been claimed in the Statement of Claim. I make no criticism of the primary judge for this: there was ample opportunity given to Olivia to make submissions as to the form of orders, and this error was not drawn to the primary judge's attention. [51] In my opinion, the question of Therese doing equity in relation to Olivia's life interest was not adequately addressed at the primary hearing, the focus of that hearing being the principal dispute as to whether the facts were such as to justify the finding of a trust. [52] In my opinion, it should have been part of Therese's case to offer to do equity and prove willingness to do so: see Sander v Twigg (1887) 13 VLR 765 at 785, 795; Malton v Black, Young J, 26/5/86; Constanton v Permanent Trustee Australia Ltd, Young J, 13/6/91, and Nieborak v Piper, Young J, 11/12/90. Therese was plainly seeking that she and Colin be permitted to continue in possession and control of the properties and the stud, even though, on their case, Olivia had a life interest in half-interests in the properties and a life interest in the stud. In those circumstances, doing equity would involve ensuring that Olivia received appropriate benefits in return for her life interests, in circumstances where Therese was to have possession and control of these assets and Olivia could not apply under s66G of the Conveyancing Act to realise her share. No such offer was made in the Statement of Claim, and no evidence of such offer or of willingness to do equity was provided in the affidavits. [53] There were some submissions before the primary judge pertinent to this, giving rise to the conditions actually imposed by the primary judge, but it would seem that in those submissions and in the primary judge's consideration of the problem, Olivia's life interest was lost sight of: there was no consideration of why the conditions imposed were adequate, even though they would not benefit Olivia unless Olivia chose to move back to "Coleraine II", apart from her Honour's view that reconciliation was a possibility. These matters were not adequately dealt with, it seems, in submissions to the primary judge, but, in circumstances where the requirement to do equity should actually have been part of Therese's case, I think the matter can and should be addressed by this Court. [54] Mr Sexton submitted that the condition actually imposed was appropriate, because it was precisely the benefit to Olivia contemplated by the arrangement made between the parties; and it would fail to benefit Olivia only by reason of a breakdown in the relationship caused by Olivia wrongly denying Therese's equity. There is some force in those submissions, but I think courts should generally avoid attributing all blame to one party in relation to the breakdown of personal relationships. [55] In this case, even though the primary judge has found facts in favour of Therese on the balance of probabilities, giving rise to a cut-and-dried view as to what happened, this is necessarily an oversimplification of the whole dynamics of the personal relationships between Therese and Olivia. It is appropriate also to take a wider view of the relationship. Therese has been given land for which Olivia and/or her husband paid $126,000.00 in 1986, $160,000.00 in 1989, $340,000.00 in 1990, and $380,000.00 in 1997. Leaving out of account the effects of inflation and variations in value, this totals about $1 million. One half of this was conveyed to Therese absolutely in May 1997 and May 1998, and the other half is to go to Therese on her death. Also, Olivia has given Therese a right to succeed to a stud worth between 200,000.00 and $400,000.00 on her death. Plainly, and arguably not unreasonably, Olivia formed the view

Page 64 in 1999 that this was unfair to her other children, and sought to bring about a fairer distribution of her whole estate. [56] Even though, on the primary judge's findings which have not been successfully challenged, Olivia could not do this by preventing Therese succeeding to these properties, her objective of somehow promoting fairness between her children was arguably a reasonable one, and one which Therese as a daughter whose mother had given her probably at least $1.2 million worth of property ($500,000.00 outright and at least $700,000.00 subject to a life interest) could arguably, as a matter of daughterly affection, respect and gratitude, have been expected to co-operate. It might reasonably be thought that her initial refusal to mediate and unwillingness even to discuss a proposal whereby she pay $340,000.00 to Robert contributed to the breakdown of her relationship with Olivia. [57] For these reasons, in this case as in many cases the wise and correct course is not to attribute blame to one party, and in my opinion it would be wrong to look at the rift between Therese and Olivia as being entirely Olivia's fault. Accordingly, it would in my opinion be wrong to take the view that if Olivia is not prepared to live on "Coleraine II", she should in effect receive no benefit. In my opinion, the question should be approached on the basis that there has been a breakdown in the relationship between Therese and Olivia, without attempting to attribute fault for this breakdown, and to consider what Therese should be required to do in order to ensure that, in those circumstances, Olivia receives an appropriate benefit from her life interests. [58] I would wish to avoid, so far as possible, an expensive further hearing on what would be an appropriate benefit. It seems that Olivia's life interests in real estate relate to interests of the value of about $500,000.00, and her life interest in the stud relates to property in the region of $200,000.00 to $400,000.00. There are severe potential difficulties in relation to a right to one-half of the profits of the stud, having regard to the different ways in which these profits could be calculated. In my opinion, a fair and practical approach would be to omit the condition about half of the profits of the stud, but to require a payment of five percent per annum calculated on the capital of value of all the property in which Olivia has a life interest as at 1st September 1999, such payments to be made as from 1st September 1999. This I believe is a modest and appropriate rate, whether regarded as interest on the value of the relevant property or rent to be paid for such property. [59] I would order that, pending agreement as to this value or determination of it, $35,000.00 per annum be paid on account (this being five percent of a capital value of $700,000.00). I would propose that the instalments up to 30th August 2001 be set off against Olivia's liability for costs at first instance; but that payments from 1st September 2001 onwards should be made without any set-off or deduction. [60] I would propose that the costs order below stand. As regards the costs of appeal, I note that the question of conditions and doing equity was not properly argued below, nor clearly raised in the grounds of appeal. On balance, I think the appropriate order as to the costs of the appeal is that each party bear its own costs. [61] These orders leave outstanding the determination of the value of the relevant assets as at 1st September 1999 and the quantification of the costs order at first instance. These questions are ones which, in my opinion, could very usefully be mediated between the parties, and one could even hope that agreement as to these matters might provide a basis on which there could be some reconciliation between the opposing factions of the family. I would expect that the orders could be given effect to so as to provide a benefit to Robert in some tax-effective way, if Olivia wished. If there is not agreement on the valuation question, then provided the valuers engaged by the parties are reminded of the Court guidelines for expert evidence, any further court hearing should be quite short. [62] The orders I propose are: 1. Appeal allowed in part. 2. Amend declarations 1 and 3 below by adding the words at the end "subject to a life interest in favour of the first defendant".

Page 65 3. Set aside declarations 2 and 4 below. 4. Order as a condition of O8 and O9 below that the plaintiff pay to the first defendant, in satisfaction of the first defendant's said life interests, 5% per annum of the value of the property referred to in declarations 1 and 3 below as at 1st September 1999, quarterly in advance as from 1st September 1999 until the death of the first defendant. 5. Order that, pending agreement or determination as to the value of the property referred to in the previous order, the plaintiff pay to the first defendant $35,000.00 per annum quarterly in advance on account of the payments referred to in the previous order, provided that the instalments of such payments for the period 1st September 1999 to 30th August 2001 may be retained as a provisional set-off against the first defendant's liability for costs at first instance. 6. Liberty to either party to apply within twelve months in the Equity Division for a determination of the value of the said property. 7. Appeal otherwise dismissed. 8. Each party to bear its own costs of the appeal, and the respondents to have a suitors' fund certificate in respect of their costs if otherwise entitled. Order 1. Appeal allowed in part. 2. Amend declarations 1 and 3 below by adding the words at the end "subject to a life interest in favour of the first defendant". 3. Set aside declarations 2 and 4 below. 4. Order as a condition of O8 and O9 below that the plaintiff pay to the first defendant, in satisfaction of the first defendant's said life interests, 5% per annum of the value of the property referred to in declarations 1 and 3 below as at 1st September 1999, quarterly in advance as from 1st September 1999 until the death of the first defendant. 5. Order that, pending agreement or determination as to the value of the property referred to in the previous order, the plaintiff pay to the first defendant $35,000.00 per annum quarterly in advance on account of the payments referred to in the previous order, provided that the instalments of such payments for the period 1st September 1999 to 30th August 2001 may be retained as a provisional set-off against the first defendant's liability for costs at first instance. 6. Liberty to either party to apply within twelve months in the Equity Division for a determination of the value of the said property. 7. Appeal otherwise dismissed. 8. Each party to bear its own costs of the appeal, and the respondents to have a suitors' fund certificate in respect of their costs if otherwise entitled. Counsel for the appellant: Mr A J McInnes QC with Ms N Butler Solicitors for the appellant: Kenneth Harrison, Bondi Junction Counsel for the respondents: Mr J Sexton SC with Mr W Bradford Solicitors for the respondents: Booth Brown Samuels & Olney

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