Page 1

Page 2

1 of 10 DOCUMENTS: Unreported Judgments Federal Magistrates Court 65 Paragraphs

ELDERS LTD v LLOYD - BC200505285

Federal Magistrates Court Riethmuller FM MLG 219 of 2005 25 May, 22 July 2005 [2005] FMCA 1020
BANKRUPTCY -- Proceedings in connection with sequestration -- petition and sequestration order -- hearing of creditor's petition -- tender of payment by debtor -- whether election to accept tender by agent of creditor company -- no election when agent merely receipted the promissory notes tendered. BANKRUPTCY -- Proceedings in connection with sequestration -- petition and sequestration order -- hearing of creditor's petition -- misnomer -- incorrect spelling of debtor's middle name -- formal defect only. (CTH) Bankruptcy Act 1966 ss 41, 46, 109, 306 Alexander Korda Film Productions Limited v Columbia Pictures Corporation Limited and Anor [1946] Ch 336; Allen v Royal Bank of Canada (1925) 134 LT 194; Australia and New Zealand Banking Group v Coutts [2003] FCA 968; Australia and New Zealand Banking Group v Foyster [2000] FCA 400; Australian Workers' Union v Bowan (1946) 72 CLR 575; Belshaw v Bush (1851) 11 CB 191; Blumberg v Life Interests and Reversionary Securities Corp [1897] 1 Ch 171; Bowen, Re; Ex parte Australian Workers' Union (1945) 13 ABC 275; Bowes v Foster (1858) 2 H & N 779; Brien v Dwyer (1978) 141 CLR 378; Buckley, Re; Ex parte James Hardie & Co Pty Ltd (1976) 27 FLR 496; Commonwealth, The v Verwayen (1990) 170 CLR 394; Corney v Brien (1951) 84 CLR 343; Crowe v Hughes [1997] FCA 864; Debtor, Re a [1937] Ch 181; Edwards, Dunlop and Co v Harvey (1927) LR 37; Ell, Re; Ex parte Austin (1886) 4 NZLR 114; Geary, Re; Ex Parte Feez Ruthning and Co Qld (unrep, Fed Ct, Spender J, 16/8/1984); Gentry, In re [1910] 1 KB 825; International Alpaca Management v Ensor [1999] FCA 72; Kirkwood, Ex parte; re Mason (1879) 11 ChD 724; McIntosh v Shashoua (1931) 46 CLR 494; McSwiney, Re; Ex parte Davies (unrep, Fed Ct, Beaumont J, 24/11/1986); National Australia Bank Limited v KDS Construction Services Pty Ltd (1987) 63 CLR 668; Romer, Hass & Aslam, Re [1893] 2 QB 286; Sargent v ASL Developments Ltd (1974) 131 CLR 623; Scarf v Jardine (1882) LR 7 AC 345; Sweeting v Pearce (1861) 9 CB(NS) 534; Tropical Traders Ltd v Goonan (1964) 111 CLR 41; Ward and Ward, Re; Ex parte RW Brown and Company Pty Ltd (1991) 28 FCR 329; Wren v Mahoney (1972) 126 CLR 212

Riethmuller FM.
[1] The applicant filed a creditors' petition on 24 February 2005 setting out that the respondent debtors owe

Page 3 the applicant creditor $43,623 for a debt for which they held no security. The petition alleges that the parties failed to comply with a bankruptcy notice issued pursuant to s 41 of the Bankruptcy Act founded upon a judgment debt. [2] An affidavit verifying the debt was filed on the same date. [3] The male respondent was served with the bankruptcy notice on 27 August 2004 as is attested to by the service agent in an affidavit filed 24 February 2005. The female respondent was served with the bankruptcy notice on 29 September 2004, such service similarly being attested to by the service agent in an affidavit filed at the commencement of the proceedings. [4] On 19 April 2005 the male respondent entered an appearance on the petition. [5] Affidavits attesting to service of the petition on both of the respondents and an affidavit of search have been filed. [6] On 19 April 2005 Registrar Agnew made orders that the respondent file and serve a notice of opposition and any affidavits in support of such opposition by 3 May 2005, with the applicant to file and serve any affidavits in reply by 10 May 2005. Registrar Agnew adjourned the matter to 23 May 2005 when it came on before me. [7] Affidavits were filed by the male respondent, sworn 3 May and 18 April. There are two affidavits of 3 May, one being described as a supplementary affidavit. [8] In the affidavits the following objections are taken:

1a) 1b) 1c) 1d) 1e) 1f) 1g)

That the first-named respondent does not exist (apparently on the basis that his name is spelt 'Morris' and ought to be spelt 'Maurice'); An allegation that the creditor does not have its registered office at the address given; An allegation that the debt had been paid; That the creditors' petition cannot be taken to have been properly served until it is served on all people named in the petition; The petition is defective as it alleges that it relies upon a debt registered in the Magistrates' court of Melbourne when the judgment was obtained from the County court; That the judgment debt was obtained by fraud; and That there is no final judgment until all appeal avenues have been exhausted and the respondent is pursuing a further appeal.

[9] On the first day that the matter was listed for hearing the respondents did not appear. Their son appeared seeking leave to appear on their behalf. He outlined the nature of the case that they intended to put. On that occasion I indicated to the respondents' son that as he was not a solicitor, and the respondents were absent, I was not prepared to grant him leave to appear and represent them. [10] I adjourned the proceedings until 11 am the next day to allow the respondents an opportunity to attend. The respondents did not attend on the second occasion (the respondents having been called three times on each day). On the second occasion the respondents forwarded to the court a facsimile in the following terms:
I am writing to you in relation to the above matter and in particular to your Orders of today 23 May 2005. My wife Rita Lloyd is not well and is unable to travel to Melbourne tomorrow and to this end I asked my son Stephen to attempt to get a lawyer to represent both me and my wife at the Court at 11.00 am. Stephen has advised me that after a number of phone calls he was advised by solicitors that he had to be joking, that no one would be able to represent anyone at such short notice and that in order to bring themselves up to speed with the case an adjournment would have to be granted. I seek such an adjournment to enable me to instruct a suitable solicitor to represent the both of us. Stephen told me that the computer at the Law Institute was down and they were not able to help with their referral service at this

Page 4
time.

[11] It provides no explanation for the absence of the male respondent, nor any details with respect to the incapacity of the female respondent. The letter seeks an adjournment to instruct a suitable solicitor. The proceedings have been on foot for a considerable period of time. [12] In the absence of any appearance by the respondents and the limited material placed before me through the facsimile letter I am not satisfied that a further adjournment in this matter is appropriate. [13] The female respondent has not filed material, however appears to be the wife of the male respondent. In the circumstances of this case it appears that the applicant's petition, to the extent that it relates to the female respondent, rises or falls on the same basis that it would with respect to the male respondent. Misnomer issue [14] The first issue raised relates to a misspelling of a middle name of one of the respondents. Formal defects do not invalidate proceedings. Section 306 of the Bankruptcy Act provides as follows:

1) 1)

Proceedings under this Act are not invalidated by a formal defect or an irregularity, unless the court before which the objection on that ground is made is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of that court. A defect or irregularity in the appointment of any person exercising, or purporting to exercise, a power or function under this Act or under a personal insolvency agreement entered into under this Act does not invalidate an act done by him or her in good faith.

[15] There is no dispute in this case that it is clear that the debtor is the person named in the proceedings, and the nature of the misnomer (being the third name of the applicant) is in the form of a phonetic spelling which has the same pronunciation as the correct spelling. The affidavits filed by the debtor confirm that he is well aware that he is the person referred to in the proceedings. [16] Such defects are appropriately cured under s 306: see Re McSwiney ex parte Davies (unrep, Fed Ct, Beaumont J, 24 November 1986). A failure to describe the parties by precisely the same name as they have been referred to in other proceedings is a formal defect that would be cured by this section: see Re Bowen ex parte Australian Workers' Union (1945) 13 ABC 275 and Australian Workers' Union v Bowan (1946) 72 CLR 575. A similar misdescription of the debtor in a petition has been held to be a formal defect: in Ex parte Kirkwood; re Mason (1879) 11 ChD 724. Similarly, with a writ it would not invalidate the writ, but only amounts to a formal defect that does not invalidate the proceedings: Alexander Korda Film Productions Ltd v Columbia Pictures Corporation Ltd and Anor [1946] Ch 336. [17] The applicant should have leave to amend. Address of creditor [18] The next issue raised is whether or not the creditor has its 'registered office' at the address given. There is no suggestion that the creditor does not have an office at the address listed. I am not satisfied that this is a defect, and even if it were is has not prejudiced the respondent. There is other evidence in these proceedings that the debtors purported to make payment (as set out below) at another office of the petitioning creditor. [19] This has caused no prejudice to the respondent. Allegations of payment [20] The third defect alleged is that the debt has been paid. In this case it is alleged that the male debtor

Page 5 paid the debt by way of delivery of two promissory notes to the creditor for which he was issued a receipt. The two promissory notes are drawn in favour of the male debtor by the female debtor, both on the same day (6 April 2005), one in the sum of $20,000 and the other in the sum of $23,623. Both are expressed to be payable in the future (by a considerable period). Both are endorsed on the rear by the male debtor with the words "please pay Elders Ltd". [21] The promissory notes were delivered to an office of the petitioning creditor and a pro forma receipt issued describing the promissory notes as 'cheques', and showing a 'credit' in the sum of the total of the promissory notes. The receipt was issued on 6 April 2005. The receipt had a section headed 'Other Details' to which had been added the word 'Merchandise'. The person issuing the receipt signed it in the appropriate section. [22] There is no evidence as to who accepted the promissory notes or issued the receipt. However, on 12 April 2005 a letter was forwarded to the debtors for the applicant's solicitors stating:
We note that this Petition is listed for hearing in the Federal Magistrates' Court on the 19th April, 2005, and we also note that you have contacted our client's branch office and delivered to them documents described as promissory notes in purported settlement of this matter. We note that our client has given a receipt acknowledging receipt of those documents and we understand that our client has returned them to you confirming that that is not an acceptable resolution of this proceeding. It is not acceptable for the following reasons, firstly you would be aware that the original judgment was entered on the 19th May, 2004 and interest accrued until the date of the issue of the Bankruptcy Notice on the 23rd July, 2004 and interest has continued to accrue since that date. By our calculation the further interest outstanding is $3,787.01. We also note that there were costs associated with the County Court proceedings which have not been taxed since we have not been able to get any response from your son who appeared apparently on your behalf at the County Court proceeding. Those costs would be approximately $9,500.00 as we put to you in our letter of the 20th May, 2004 and the final matter outstanding would be the costs of the Application for Leave to Appeal to the Full Court again apparently conducted by your son on your behalf and we believe those costs would be in the order of $6,000.00. In both cases those costs figures would be inclusive of GST. We further note that none of those figures include any of the legal costs associated with the Bankruptcy Petition which would again be in the order of $3,500.00. We also note that there are separate Bankruptcy proceedings against your son Stephen John Lloyd who has not yet been served with a Petition and there are further costs associated with that proceeding of approximately $1,000.00 which would need to be taken into account if there is to be a general resolution of all matters outstanding. Could we respectfully suggest that you urgently obtain some legal advice from an experienced Practitioner in this area so that your interests can be protected.

[23] A question arises as to whether or not the petitioning creditor had accepted the tender of the promissory notes in payment of the debt. [24] There is no doubt that the promissory notes were tendered to the applicant and that an agent of the applicant accepted the documents and issued a receipt for them. [25] It is generally considered that acceptance of a cheque or promissory note is taken as constituting a conditional payment; that is conditional upon the instrument being honoured. The obligation is not discharged, but the right to sue with respect to it is considered to be suspended until payment is received. This has much commercial sense with respect to cheques and other instruments that are payable upon demand. The position was well set out in the High Court in National Australia Bank Ltd v KDS Construction Services Pty Ltd (1987) 63 CLR 668 where the High Court said (at 676):
Generally speaking, when a cheque is given in payment of a debt, it operates as a conditional payment. The payment is subject to a condition that the cheque be paid on presentation. If it is dishonoured the debt revies. Though it is sometimes said that the remedy for the primary debt is suspended, the suspension is no more than a consequence of the conditional nature of the payment: Tilley v Official Receiver in Bankruptcy. The condition is a condition subsequent so that, if the cheque is met, it ranks as an actual payment from the time it was given. Subject to non-fulfilment of the condition subsequent, the payment is complete at the time when the cheque is accepted by the creditor: Thomson v Moyse [1961] AC 967.

Page 6 [26] It appears that a similar position follows with respect to other negotiable instruments: see Allen v Royal Bank of Canada (1925) 134 LT 194 and Belshaw v Bush (1851) 11 CB 191. [27] The onus of establishing that acceptance of a negotiable instrument constituted an accord and satisfaction in place of the original obligation rests upon the debtor: see Re Romer v Hass & Aslam [1893] 2 QB 286 per Bowen LJ at 300 and Kay LJ at 303. On the material presently available I am not satisfied that any apparent acceptance of the negotiable instrument could be considered to absolutely discharge the prior indebtedness by way of an accord and satisfaction. The mere acceptance of the notes and issue of a receipt is not sufficient, on its own, to evidence an agreement that the notes were taken in substitution for the debt. [28] In this case the promissory notes are not yet due for payment as they were not payable on demand. There is no doubt that a negotiable instrument can be drawn such that it is not payable upon demand, but only at a future date (see s 18 of the Bills of Exchange Act). In the past an answer to a question such as this (where the instrument had not been stamped) was that the instrument was invalid under s 45 of the Stamp Act (Vic): see Edwards, Dunlop and Co v Harvey (1927) LR 37 per Dixon AJ. However, such duty requirements are no longer in force. The instrument appears to be valid on its face. [29] If the promissory notes were accepted as payment then they are conditional payment and the primary debt would be suspended until the instruments are met or dishonoured on maturity. The date of maturity of the instruments is many months away. [30] It was clearly open to the creditor to reject the tender at the time. In McIntosh v Shashoua (1931) 46 CLR 494 Gavan Duffy CJ and Dixon J, as he then was, said (at 505):
The fact that after the presentation of the petition the debtor tendered payment of the assigned debt and the tender was refused cannot in this case affect the result. A petitioning creditor is entitled to refuse payment and proceed with the petition (Re Gentry [1910] 1 KB 825). The refusal of the tender in this case is consistent with the conclusion, if it does not strengthen it, that the petitioner truly desired to obtain a sequestration order.

[31] This was the law for some time before McIntosh v Shashoua: See In re Gentry [1910] 1 KB 825; Re Ell; Ex parte Austin (1886) 4 NZLR 114; and Re a Debtor [1937] Ch 181.The principle has been applied in Re Geary; Ex Parte Feez Ruthning and Co Qld (unrep, Fed Ct, Spender J, 16 August 1984); Crowe v Hughes [1997] FCA 864; International Alpaca Management v Ensor [1999] FCA 72; Australia and New Zealand Banking Group v Foyster [2000] FCA 400 and Australia and New Zealand Banking Group v Coutts [2003] FCA 968. [32] It is also clear that where tender is made to an agent, such as a solicitor, it remains open to the creditor to reject the tender within a reasonable time: Re Buckley; Ex parte James Hardie & Co Pty Ltd (1976) 27 FLR 496. [33] The question then becomes one of whether or not the provision of such documents to an agent of the respondent and the obtaining of a receipt is sufficient evidence of acceptance by a person with actual or implied authority to accept the negotiable instruments in payment of the debt. Prima facie an agent does not have authority to accept payment other than in legal tender: Sweeting v Pearce (1861) 9 CB(NS) 534; Blumberg v Life Interests and Reversionary Securities Corp [1897] 1 Ch 171. Even if the contract provides for payment by cheque this does not include a post-dated cheque: Brien v Dwyer (1978) 141 CLR 378. Express authority is required to accept a bill of exchange. [34] In the absence of any evidence with respect to a person who received the documents it is not possible for the court to make any determination as to the actual authority of the person. No lack of authority was alleged in the solicitor's letter. Indeed, the solicitor only takes issue with the tender on the basis that there were other unquantified sums owing. [35] It is appropriate to analyse the facts in order to determine whether the applicant elected to accept the tender of the promissory notes: see, for example, the analysis undertaken in Crowe v Hughes [1997] FCA 864 and Re Buckley; Ex parte James Hardie & Co Pty Ltd (1976) 27 FLR 496 per Riley J at 508.

Page 7 [36] In order to determine whether an election has been made it is necessary to consider:

1) 1)

Whether the facts and circumstances giving rise to the election were known to the person with the right of election; and whether the conduct was unequivocal.

[37] In Sargent v ASL Developments Ltd (1974) 131 CLR 623 Stephen J (with whom McTiernan ACJ agreed) said:

1.

In the present appeals I conclude that, contrary to the appellants' contentions, all that need be established in order for the doctrine of election to apply is knowledge by the vendors of the facts giving rise to inconsistent legal rights; the appellants are to be taken to know of their rights of rescission conferred by cl 16 and, of course, of their right to enforce the contracts according to their terms. If they then knew of the relevant facts giving rise to the rights of rescission, that is, the existence of a planning scheme affecting the lands sold, that is enough to invoke the doctrine. Their own interpretation or understanding of the nature or extent of their contractual rights will be irrelevant, so that it matters not at all whether they were aware of the existence of cl 16 or of its effect as it came to be enunciated in Wolczyk v Barr (1970) 92 WN (NSW) 518; it is enough that they knew of facts which have brought cl 16, as so interpreted, into operation. The words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other; thus for a lessor to continue to receive rent under a lease will be consistent only with his rights as lessor and inconsistent with the exercise of a right to determine the lease (Viscount Dilhorne in the Kammins Ballroom's Case (1971) AC, at p 873 ; Herring CJ in the Coastal Estate's Case (1965) VR, at p 436 ; Kitto J in Tropical Traders Ltd v Goonan (1964) 111 CLR 41, at p 56 ). However, less unequivocal conduct, only providing some evidence of an election, may suffice if coupled with actual knowledge of the right of election (Elder's Trustee Case (1941) 65 CLR, at p 618 ). There need be no expressed intention to elect, nor will an express disclaimer of such an intention be of any avail in preserving one right if in fact there be an exercise of another inconsistent right (Croft v Lumley (1858) 6 HL Cas 672 (10 ER 1459); Matthews v Smallwood [1910] 1 Ch, at p 786 ). For an election there need be no actual, subjective intention to elect (Scarf v Jardine (1882) 7 AC, at p 361 ), an election is the effect which the law attributes to conduct justifiable only if such an election had been made (per Kitto J in Tropical Traders Ltd v Goonan (1964) 111 CLR, at p 55 ); cf. S Kaprow & Co Ltd v Mclelland & Co Ltd., per Wrottesley LJ [1948] 1 KB 618, at pp 629-630..

1.

[38] Similarly, in Tropical Traders Ltd v Goonan (1964) 111 CLR 41 Kitto J (at [10]) said:
... election is [not] a matter of intention. It is an effect which the law annexes to conduct which would be justifiable only if an election had been made one way or the other: Scarf v Jardine (1882) 7 App Cas 345, at p 361 ; Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305, at p 325.

[39] In The Commonwealth v Verwayen (1990) 170 CLR 394 Brennan J affirmed the statements in Sargent, saying:
Election consists in a choice between rights which the person making the election knows he possesses and which are alternative and inconsistent rights: Evans v Bartlam [1937] 2 All ER 646, at pp 652,653; Tropical Traders Ltd v Goonan (1964) 111 CLR 41 at p 55; Kammins Co v Zenith Investments [1971] AC 850 at p 883. A doctrine closely related to election, and sometimes treated as a species of election, is the doctrine of approbation and reprobation. This doctrine precludes a person who has exercised a right from exercising another right which is alternative to and inconsistent with the right he exercised as, for example, where a person 'having accepted a benefit given him by a judgment, cannot allege the invalidity of the judgment which conferred the benefit': Evans v Bartlam, per Lord Russell of Killowen at p 652. An election is binding on the party who makes it once it is made overtly -- or, at all events, not later than on the communication of the election to the party or parties affected thereby: Newbon v City Mutual Life Assurance Society Ltd. (1935) 52 CLR 723 at p 733; Scarf v Jardine (1882) 7 App Cas 345 at pp 360361. It is binding whether or not others who are affected by the election have acted in reliance on it. In this respect, election is to be distinguished from estoppel: Khoury v Government Insurance Office (N .S W.) (1984) 165 CLR

Page 8
622 at p 633.

[40] The fact that a person may require some reasonable time to decide what election to make was acknowledged by Blackburn LJ in Scarf v Jardine (1882) LR 7 AC 345 at 360 to 361 as follows:
... where there is a right to elect the party is not bound to elect at once; he may wait and think which way he will exercise his election, so long as he can do so without injuring other persons ... ... The principle, I take it running through all the cases as to what is an election is this, that where a party in his own mind has thought that he would choose one of two remedies, even though he has written it down on a memorandum or has indicated it in some other way, that alone will not bind him; but so soon as he has not only determined to follow one of his remedies but has communicated it to the other side in such a way as to lead the opposite party to believe that he has made that choice, he has completed his election and can go no further; and whether he intended it or not, if he has done an unequivocal act mean an act which would be justifiable if he had elected one way and would not be justifiable if he had elected the other way -- -- the fact of his having done that unequivocal act to the knowledge of the persons concerned is an election.

[41] Put simply, does the issuing of the receipt by the applicant's employee or agent show that the applicant elected to accept the negotiable instruments as payment. The receipt demonstrates that the instrument was received by the applicant at its branch office (not the office nominated in the bankruptcy notice). The receipt erroneously describes the instruments as 'cheques'. The document also sets out the 'other details' as being 'Merchandise', presumably indicating that the receipt relates to merchandise. There is no evidence of any conversation at the time of the tender as to the nature of the documents or the issue of a receipt (unlike the evidence in Re Buckley; Ex parte James Hardie & Co Pty Ltd (1976) 27 FLR 496). [42] The exercise of an election is a significant step which must be made with knowledge of the facts giving rise to the election. It would be unrealistic to imply actual or ostensible authority to an agent of a large company, at an office other than the office nominated for payment in the bankruptcy notice, to make such an election in the circumstances of this case. There is no basis for imputing to the relevant agent the knowledge of the facts and circumstances giving rise to the election. Nor could it reasonably be said that an agent, in the circumstances here, would have apparent, implied or ostensible authority to make the election. [43] If the agent were receiving the promissory notes, so as to allow the applicant to consider making an election, then it would be reasonable for a receipt to be issued, acknowledging that the documents were received. It is clear from the misdescription of the instruments as cheques that the receipt can not be considered a specific document. It is a printed form that was not particularly suitable for the transaction. It does not, on its face show an election (or even a representation thereof) to accept the promissory notes as payment. [44] The only other conduct that is referred to in evidence is the letter sent soon after by the applicant rejecting the tender. [45] I am not satisfied that in this case the evidence shows that the applicant made an election to accept the promissory notes as payment of the debt. Thus, this is not a basis for resisting the application. Failure to serve a joint debtor [46] The allegation that there is some defect because the bankruptcy notice is against more than one person and not all persons have been served appears to me to be groundless. [47] It is open to the creditors to proceed against any or all of the joint debtors. It is also open to them to join the debtors in the one proceedings as provided for in s 46 of the Act: 46. Petition against 2 or more joint debtors

Page 9

2) 2)

A creditor's petition may be presented against 2 or more joint debtors, whether partners or not. Where there are 2 or more respondents to a creditor's petition, the Court may make a sequestration order against one or more of them and dismiss the petition in so far as it relates to the other or others.

[48] It is clear that the creditor cannot proceed against a debtor that has not been served. However this does not preclude the creditor from proceeding against the debtors who have been served: see s 46(2) and more generally Re Ward and Ward; Ex Parte RW Brown and Company Pty Ltd (1991) 28 FCR 329. [49] I see no prejudice to the respondent debtors by the fact that the creditor is not proceeding against another of the joint debtors on this occasion. Similarly, the fact that a bankruptcy notice or proceedings include a person who is an undischarged bankrupt, whilst it would be irregular against that person, appears to me to remain regular with respect to the debtors who are not undischarged bankrupts. Incorrect description of judgment [50] The next issue is that the creditor's petition is incorrect as it refers to a judgment 'registered in the Magistrates court in Melbourne', when in fact the only judgment is from the County court of Victoria. [51] A copy of the actual judgement was annexed to the bankruptcy notice; it was therefore without defect. It is that notice that is relied upon by the creditors in this proceeding. [52] The details of the County court proceedings, and an appeal to the court of Appeal of Victoria are set out in the affidavit material filed by the respondent. [53] Clearly, the respondents were well aware of the judgment and would not have been prejudiced by this even in isolation. To the extent that leave to amend the petition may be required to cure this error, I grant leave as I see no prejudice with respect to this issue. Allegation of fraud [54] The next allegation is that the judgment debt was fraudulently obtained. The court has power to go behind a judgement obtained by fraud: see s 56; Corney v Brien (1951) 84 CLR 343 and Wren v Mahoney (1972) 126 CLR 212. [55] The evidence in this regard is set out in the affidavits of the respondent, and appears to be complaints with respect to the proceedings in the state courts, which were dealt with by the court of Appeal of the Supreme Court of Victoria. [56] A copy of the judgment of the court of Appeal in this matter was tendered. The applicant's appeal to the court of Appeal (or application for leave to appeal to the court of Appeal) was dismissed. It is not an appropriate case for me to consider looking behind the judgment where:

2) 2)

the judgment has been obtained through the County court and an application for leave to appeal dismissed by the court of Appeal of Victoria; and none of the matters raised show that the judgment was obtained by fraud or collusion.

[57] The matters sought to be agitated are all matters that have been, or could have been agitated before the Victorian State Courts in this matter. [58] I therefore find that this is not a ground for opposing the creditor's petition. [59] There is no evidence of an application having been made in the County court or court of Appeal to set aside the judgment on the basis of fraud or other defect. This would be the appropriate course in such a case. Allegation judgment is subject to appeal

Page 10 [60] The final matter is an allegation that there is no final judgment until all matters for appeal have been exhausted, and this plainly mis-states the law. A judgment becomes final upon pronouncement (in this case pronouncement and entering in the County court of Victoria). Whilst it is open to a debtor to obtain an extension of time within which to comply with a bankruptcy notice (to allow for an appeal), this is not a basis upon which to oppose a sequestration order: see s 41(6C). [61] Another issue raised was an allegation that the debt will be covered by the value of contract for the supply of seed potatoes that the respondents have with the creditor. The fact that in the future the petitioning creditor may become liable to the respondents under a contract for the supply of produce is not an answer to an allegation that the petitioning creditor has an unmet debt and evidence of an act of bankruptcy. [62] When one considers the totality of the large number of errors of the applicant it leaves one with considerable disquiet with respect to the proceedings. I note that the court of Appeal of Victoria, when considering the appeal from the original judgment said:

1.

The statement of claim does not in fact disclose a cause of action and it is unfortunate that at some time this was not adverted to and corrected. However, I am quite satisfied from the material before this Court that the matter was fully understood at the trial and that there was no doubt that the claim in fact was for money due on a running account in relation to goods sold and delivered together with interest on the outstanding sum pursuant to an agreement. From what we were told by Mr Lloyd this morning, there is no doubt that he understood that at trial and indeed frankly admitted that the family or the defendants owe $25,000 and the real dispute relates to the amount of interest.

[63] However, to the extent that there is a dispute, it is as to the amount of interest, not the primary debt, which remains owing. [64] I am satisfied that the respondents have committed acts of bankruptcy as alleged, that service was effected, and that the debt remains owing. I am not satisfied that there are circumstances that would found the exercise of any discretion not to make a sequestration order. [65] I therefore make orders for the sequestration of the estates of the respondents. Order

1) 1) 1) 1)

That the applicant have leave to amend the name of the first respondent by substituting 'MAURICE' for the name 'MORRIS'. That the estate of JOHN FREDERICK MAURICE LLOYD be sequestrated. That the estate of RITA BEVERLEY LLOYD be sequestrated. That the applicant's costs of and incidental to the application be taxed and paid in accordance with s 109(1)(a) of the Bankruptcy Act.

No appearance for the respondent. Counsel for the applicant: Mr Dunne Solicitors for the applicant: John Dunne & Associates

Page 11

Page 12

2 of 10 DOCUMENTS: Victorian Reports/Judgments/11 VR/LEE v HEARN - 11 VR 270 - 20 May 2005 17 pages

LEE v HEARN - (2005) 11 VR 270

Court of Appeal Callaway, Batt and Buchanan JJA 30 August 200420 May 2005 [2005] VSCA 127
Family and dependants provision -- Application -- Friend of deceased -- Provision of resident caretaker services -- Provision of occasional routine domestic services -- Deceased leaving claimant small legacy from very large estate -- Trial judge dismissing application -- Whether or not deceased had responsibility to make provision for claimant -- Underlying test or standard of moral duty -Wise and just testator -- Application of contemporary Australian standards -- Legislative specification of indicative criteria -- Relationship between deceased and claimant -- Trial judge finding that deceased and claimant were merely good friends -- Whether trial judge erred in assessment and characterisation of impressionistic evidence -- Claimant failing to establish that deceased had assumed an obligation to maintain him -- No presumption of assumption of responsibility -- Administration and Probate Act 1958 (No 6191)s 91. Section 91(1) of the Administration and Probate Act 1958, 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 criteria specified in s 91(4)(e)-(o) including:
"(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; |PO (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; |PO (p) any other matter the Court considers relevant."

For about 12 years from 1989, L (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 winter visits from her home in Melbourne to Queensland and stayed at the apartment. L, who was not related to H by blood or marriage, had become a friend of H in

Page 13 about 1976 having been introduced to her by a mutual friend, U, who died in 1987 leaving the bulk of his large estate (including the Queensland apartment) to H. By her will made in 1988, H gave L 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, L, a diabetic, had chosen to engage in paid employment only intermittently. In or about early 2000, H had written to a friend noting that L had been a very loyal friend and was not strong or well and that she did not feel like evicting him from the Queensland apartment. L appealed against the decision of a judge of the Trial Division dismissing his application under s 91 11 VR 270 at 271 for an order that he was entitled to the Queensland apartment (amended, during the trial, to a claim for an amount of money commensurate with the value of a life interest in that property). Held, dismissing the appeal: (1) The court was bound in answering each of the questions posed in s 91(4) (a)-(d) of the Act to have regard to the matters mentioned in ss 91(4)(e)-(o) and, pursuant to s 91(4)(p), to any other matter considered to be relevant. To reason from the matters mentioned in s 91(4)(e)-(p) to a conclusion that a deceased person had a responsibility to make provision for a claimant, or that the deceased failed to make adequate provision for the claimant, necessitated the application of an underlying test or standard to the matters to be considered. That test remained one of whether and if so what provision a wise and just testator would have thought it her or his moral duty to make in the interests of the claimant. [4], [54], [55], [57]. Grey v Harrison [1997] 2 VR 359; Collicoat v McMillan [1999] 3 VR 803; MacEwan Shaw v Shaw (2003) 11 VR 95; Coombes v Ward [2004] VSCA 51; Blair v Blair (2004) 10 VR 69; Vigolo v Bostin (2005) 213 ALR 692 ; 79 ALJR 731 referred to Obiter dictum in Singer v Berghouse (No 2) (1994) 181 CLR 201 not followed Per Callaway JA (Batt and Buchanan JJA agreeing). Moral responsibility was not a static or idiosyncratic concept. It was one thing to say that the prejudices of a nineteenth century paterfamilias were an unsafe guide or that courts should no longer discriminate against adult sons, rather than dealing with the claims of adult children according to their individual circumstances. It was another thing altogether to say that wisdom, justice or morality formed no part of contemporary Australian standards or failed to supply the norm that the legislature had indicated by the use of the words "responsibility to make provision" in s 91(1) and (4). [8], [55], [57]. (2) In applying s 91(4)(e) of the Act, the trial judge did not err in her assessment or characterisation of the impressionistic evidence given on both sides concerning the nature of the relationship between H and L. Her conclusion that H and L were merely good friends was not a finding of primary fact but an assessment or characterisation. [1], [41], [57]. (3) Nor did the trial judge err in declining to find that H assumed an obligation to L to maintain him. The letter that H had sent to her friend in early 2000 was concerned with action or inaction while H remained alive and was expressed in the language of self-interest. Similarly, in purchasing the Queensland apartment, H had only her own interests in mind and, in referring in her letter to her friend to the possible sale of the apartment, it was clear that L's occupation of it would not have been a bar to H selling it. [1], [43]-[45], [57]. (4) The alleged fact of L's partial maintenance by the provision of rent-free accommodation did not raise a presumption of an assumption by H of responsibility for L because, first, it proceeded on a false premiss in that the trial judge was satisfied that L was not being maintained, wholly or partly, by H, a finding which was open to the judge, and, secondly, whatever the position was in England, the trial judge was entitled to proceed on the basis that no such presumption arose under the Victorian legislative scheme. [1], [46]-[49], [57]. Jelley v Iliffe [1981] Fam 128; In re B (deceased) [2000] Ch 662 distinguished

Page 14 Decision of Warren J (2002) 7 VR 595 affirmed. 11 VR 270 at 272 Appeal This was an appeal from a decision of Warren J ((2002) 7 VR 595) dismissing an application made under s 91 of the Administration and Probate Act 1958 by a friend of the testator for an order that provision be made for him out of the testator's estate. The facts are stated in the judgment of Batt JA. W F Gillies for the appellant. J D Merralls QC and R T A Waddell for the respondent. Cur Adv Vult

Callaway JA.
[1] I agree with Batt JA. In my opinion, the learned trial judge correctly directed herself according to the authorities and the decision she made was well open to her.1 There is one point on which I wish to say something on my own account, mainly because the legislation has changed since Grey v Harrison.2 [2] Section 91 of the Administration and Probate Act 1958, as amended by the Wills Act 1997, now provides:
(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. |PO (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 --

both the will and the operation of the provisions -does not make adequate provision for the proper maintenance and support of the person. (4) The Court in determining --

1a) 1b) 1c)

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

2a) 2b)

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

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

any other matter related to an application for an order under sub-section (1) -must have regard to --

2c) 1d)

the amount of provision (if any) which the Court may order for the person; and

Page 15

1usb> [(e)-(o) -- 11 specified matters]; 1p) any other matter the Court considers relevant. [Emphasis added.]
[3] The relevance and weight of the matters referred to in s 91(4)(e)-(o) will vary according to which of the questions in s 91(4)(a)-(d) the court is determining. I shall concentrate on the threshold question whether the deceased had 11 VR 270 at 273 "responsibility to make provision" for the applicant.3 That question is obviously unaffected by whether the deceased died testate or intestate.4 [4] I begin with a recent and, in my opinion, important observation by Nettle JA in Blair v Blair.5 His Honour said:6
The court is bound in answering each of those questions to have regard to the matters mentioned in s 91(4)(e)-(o) and, pursuant to s 91(4)(p), to any other matter considered to be relevant. Self evidently, such matters are of themselves incapable of providing an answer to either question. To reason from the matters mentioned in s 91(4) (e)-(p) to a conclusion that a testator had a responsibility to make provision for a claimant, or that the testator failed to make adequate provision for the claimant, necessitates the application of a test or standard to the matters to be considered. That test remains one of whether and if so what provision a wise and just testator would have thought it his moral duty to make in the interests of the claimant.7 [Emphasis added.]

A similar point was made in Grey v Harrison when I said, in relation to the previous legislation, that the touchstone of what a wise and just testator would have thought to be his or her moral duty "supplies the norm that the legislature left unexpressed".8 [5] It is important to focus on the words of the legislation.9 The question to be determined, in the words of the statute, is whether or not the deceased had responsibility to make provision for the applicant. That must mean a legal or moral responsibility, in the sense in which "moral" has been explained in the authorities, for what other kind of responsibility is there? Our duty to attend to the language of the statute is one of the reasons we cannot derive assistance from Vigolo v Bostin.10 The Western Australian legislation prescribes the persons entitled to claim, all of whom are partners or former partners or relatives,11 and does not use the word "responsible" or "responsibility" or any equivalent expression.12 [6] More fundamentally, if the deceased had neither a legal nor a moral responsibility to make provision for an applicant, why would Parliament abridge his or her testamentary freedom and why would a court exercise its discretion in favour of the applicant? As I said in Grey v Harrison:13
[I]t is one of the freedoms that shape our society, and an important human right, that a person should be free to dispose of his or her property as he or she thinks fit. Rights and freedoms must of course be exercised and enjoyed conformably with the rights and freedoms of others, but there is no equity, as it were, to interfere with a testator's dispositions unless he or she has abused that right. To do so is to assume a power to take property from the intended object of the testator's bounty and give it to someone else. In conferring a discretion in the wide terms found in s 91, the legislature intended it to be exercised in a principled way. A breach of moral duty is the justification for curial 11 VR 270 at 274 intervention and simultaneously limits its legitimate extent. So much may be derived from the concept of "proper" maintenance and support but also, and more fundamentally, from those considerations.

The real issues are not morality as such, but personal autonomy and individual freedom. 14 [7] In MacEwan Shaw v Shaw15 Dodds-Streeton J had to consider whether the amendments made by the Wills Act 1997 required or justified a different approach from that in Collicoat v McMillan and Grey v Harrison. Her Honour concluded that the amendments did not have that effect. On the contrary, she continued:16

Page 16
The retention of the traditional words "proper maintenance and support", the express reference to the responsibility of the testator in the legislation and the acknowledgment in the second reading speech that the remedial legislation was directed at facilitating applications by those who have "moral claims", reinforce rather than attenuate the application of the traditional concepts of moral duty and the wise and just testator.

Another reinforcing factor is that, in Victoria, any person at all may now apply for provision. It cannot be said, as it can in some other jurisdictions, that the legislature has prescribed or even indicated the kinds of person for whom the deceased is likely to have had responsibility to make provision.17 [8] I referred earlier to moral responsibility in the sense in which "moral" has been explained in the authorities. It is not a static or idiosyncratic concept. In Grey v Harrison after saying that the authorities so strongly favoured the criterion of what a wise and just testator would consider his or her moral duty that we were not free to jettison it, I continued:18
That is not to say that either the denotation of those words or the content of wisdom, justice and moral duty do not change with time or respond to community standards. See, for example, Permanent Trustee Co Ltd v Fraser [(1995) 36 NSWLR 24] at 35-6 per Handley JA. That is a point that is particularly important to remember when reading authorities that reflect outdated stereotypes: cf Singer v Berghouse [(1994) 181 CLR 201] at 220-1 per Toohey J.

It is one thing to say that the prejudices of a nineteenth century paterfamilias are an unsafe guide or that courts should no longer discriminate against adult sons, rather than dealing with the claims of adult children according to their individual circumstances. It is another thing altogether to say that "wisdom", "justice" or "morality" forms no part of contemporary Australian standards or fails to supply the norm that the legislature has indicated by the words "responsibility to make provision". Postscript [9] I wrote [2]-[8] above, including the accompanying footnotes, before the High Court gave judgment in Vigolo v Bostin.19 As I said in [5], the Victorian legislation is now materially different from that in Western Australia, but I am 11 VR 270 at 275 reinforced in my conclusion by the judgments of Gleeson CJ and Callinan and Heydon JJ. Gummow and Hayne JJ took a different view in that case, but their Honours would agree that we should attend to the language that the Victorian Parliament has used.20

Batt JA.
Introduction [10] This is an appeal by the plaintiff below from a judgment21 given in the Trial Division on 31 May 2002 by which his proceeding under Pt IV of the Administration and Probate Act 1958 ("the Act") claiming provision out of the estate of Olga Agnes Hetherington deceased was dismissed and costs as between party and party were awarded against him in favour of the respondent as defendant. [11] The deceased died on 25 June 2000 at the age of 83 years. She left a will dated 1 June 1988 and a codicil dated 23 March 1993. Probate of the will was granted to the respondent as an executor appointed by it, leave being reserved to the other executor appointed to come in at any time and prove. The value of the deceased's estate totalled, as at 1 March 2002, some $2,270,000 less costs then estimated at $35,000. By her will the deceased left pecuniary legacies of $20,000 to each of five persons, including the appellant, with the balance of the estate to form the Urquhart Charitable Fund in memory of William Frederick Urquhart and the income to be distributed annually to certain charitable or public benevolent institutions in Victoria. [12] At trial the appellant alleged that the deceased had a responsibility to make further provision for him in her will by reason of his relationship with her, her assumption of responsibility to support him, his

Page 17 contribution to her welfare, his own financial needs and his poor employment prospects and bad health. He claimed that the deceased was a heavy drinker and was dependent on him physically. In his proceeding the appellant initially sought the unit at Port Merion on the Queensland Gold Coast left by the deceased, together with an appropriate sum to maintain him. The claim was modified during the trial to an amount commensurate with the value of an interest for the appellant's life in the Port Merion unit. [13] The respondent alleged that the relationship between the appellant and the deceased was one of friendship and mutual convenience and that the deceased did not assume or acknowledge a responsibility to support the appellant. His contributions to the deceased's welfare were in exchange for contributions she made for his welfare. The appellant's financial needs and poor prospects were not attributable to any demand or request by the deceased. The respondent contested the allegation that the deceased was a heavy drinker and therefore dependent on the appellant. The respondent argued that the circumstances were not such that the deceased had a responsibility to make further provision for him in her will. 11 VR 270 at 276 [14] The trial judge dismissed the appellant's claim, holding that he was required, but had failed, to make out a moral duty owed by the deceased to him and finding that he had "failed to satisfy each of the relevant criteria" in s 91(4)(e)-(p).22 The appellant now challenges her Honour's decision that he had not demonstrated that the deceased had a responsibility to make further provision in her will for him. [15] The appellant's claim below was supported by two affidavits sworn by him, as well as two affidavits sworn by Marjorie Edmunds, a friend of the deceased at Port Merion, and one sworn by each of the following: Warren Humphries, the body corporate manager of the Port Merion Apartments from 1989 to 1992; John Edmunds, the son of Marjorie Edmunds; Tony Bose, a medical practitioner of whom the appellant was a patient, and a real estate agent and a valuer. The respondent swore two affidavits in opposition and filed affidavits sworn by Betty Laver, a cousin and life-time friend of the deceased who lived in Melbourne; Ranald Hugh McCowan, who acted as solicitor for the deceased at the time of her purchase of her unit at Port Merion; and Craig Hendricks, a first cousin once removed of the deceased. Besides the appellant the other legatees under the deceased's will were Mrs Laver, Mrs Edmunds, Mr Hendricks and his sister. The undisputed facts [16] The following facts are undisputed. The appellant, who was born in Malaysia in 1952, first met the deceased in 1976 through a mutual friend, Walter Urquhart junior. The appellant had become a friend of the latter as a result of befriending his father, Walter Urquhart senior, when the appellant was a student of graphic design in Adelaide in the mid-1970s. In 1983 the appellant moved to live on the Gold Coast and rented a flat at Mermaid Beach. Walter Urquhart junior died at the Gold Coast in 1987. The deceased was the principal beneficiary, to the extent of $1m, under his will. After his death the appellant became a friend of the deceased. Either in accordance with Mr Urquhart's wishes or from her own acknowledgment of friendship with the appellant, the deceased gave him $10,000 from the estate she inherited. In 1989 she purchased the unit at Port Merion and asked the appellant to live in it. Thereafter she lived either in Melbourne or in Port Merion until about 1998. She did not visit Port Merion in 1999. As stated, she died in 2000. The appellant had lived rent-free continuously in the unit from 1989 until the date of judgment. He had had only part-time jobs since 1989. He did not claim that the deceased demanded that he not work. The real estate agent's evidence established the rental value of the unit at $320 per week and a 25-year interest in the unit was valued by the valuer at $292,604. That evidence was not contested by the respondent. There was no evidence of the appellant's life expectancy. Issues and findings at trial [17] I turn to the factual issues in dispute at the trial and her Honour's findings as to them. 11 VR 270 at 277 (a) The nature of the relationship between the appellant and the deceased

Page 18 [18] The appellant claimed that he had a very close relationship with the deceased. This was supported by Humphries, who said that they were like mother and son, and by Mrs Edmunds, who stated that the appellant was "like family" to the deceased. On the other hand, the appellant did not maintain great frequency of contact with the deceased when she was in Melbourne. Further, the respondent stated that the deceased mentioned the appellant to him only once in the entire period during which she was his client, which was from 1987 to her death. He said that he did not know until after her death that the appellant was living in the Port Merion unit. Hendricks stated that the deceased hardly mentioned the appellant. The appellant explained these statements by saying that the deceased did not want her solicitors to know much about her private life and that she was a very private person. [19] The appellant said that the deceased spent six to nine months every year at Port Merion and every Christmas for approximately two weeks. That evidence was supported by Humphries. The respondent, however, led evidence, including dates of travel in and out of Australia shown in the deceased's passport, that demonstrated that the deceased usually spent no more than four to five months in the years between 1989 and 1998 at Port Merion and did not go to Port Merion every Christmas. This was supported by Mrs Laver. Her Honour accepted the last-mentioned evidence and said that the appellant's statements were shown to be quite exaggerated. Between 1990 and 1997 the most time that the deceased spent at the Port Merion property was about four months, the shortest period about six weeks. She did not stay at the Port Merion unit during 1994 nor in the last two and a half years of her life. Her Honour did not accept the appellant's claim that the deceased often spent Christmas with him, finding that she spent some Christmas periods in Melbourne, went on a cruise to New Zealand at Christmas in a particular year and in 1997 stayed with her cousins, the Hendricks, in Sydney. [20] Her Honour expressed her views on the relationship between the appellant and the deceased in her discussion of the first of the considerations enumerated in s 91(4) of the Act, namely, para (e).23 Noting that no family relationship existed between them but that they had been friends for about 25 years, her Honour said that it was difficult to discern the depth of their friendship. The appellant was one of only five beneficiaries under the deceased's will and the deceased had allowed him to live in her property rent-free. On the one hand, it seemed that she had done so out of an acknowledgment of his loyalty and her concern for him. On the other hand the arrangement seemed one of mutual convenience which she saw as suiting her financial and real estate interests. The varied extent to which the relationship was recognised by others (as stated earlier) attested to its ambivalent nature. Her Honour concluded that "the relationship was one of friendship but no more". She did not accept that the appellant was like a son to the deceased. (b) The deceased's drinking habits [21] The appellant said that after the death of Mr Urquhart junior the deceased developed a drinking problem. When she was intoxicated, she would require assistance and care and would often become incontinent. Humphries, Mrs Edmunds and John Edmunds supported the appellant's assertions. The 11 VR 270 at 278 respondent contested these assertions. He stated that when he had attended the deceased at her home in a professional capacity he had never seen her affected by alcohol. [22] Her Honour noted that in the first affidavit sworn by the appellant there was no mention of the deceased's drinking and that the allegation that she was a heavy drinker, or at least a woman who because of her slight build and age was easily affected by even a light or moderate consumption of alcohol, had, despite professed reluctance to speak on the matter, figured large in the appellant's case before her, it being his case that his role of care was made burdensome because her drinking necessitated that he bathe her and assist her to the toilet. [23] Her Honour summarised the relevant evidence as part of her review of the evidence of each party. After summarising the evidence of Mrs Edmunds and her son on the topic her Honour said that she accepted that the deceased sometimes showed the effects of alcohol consumption at social functions over the years, but she did not accept that the evidence was sufficient to make out a claim of persistent heavy drinking and consequential dependence. Nor did the evidence make out the claim that the appellant's role of alleged carer was more onerous as a consequence of her drinking. Under the heading of the deceased's

Page 19 drinking activities her Honour accepted that from time to time the deceased drank alcohol at social functions and also that on some occasions, of which few were identified, she might have become intoxicated quickly and suffered physically as a result, might have required assistance from those with her, in some instances the appellant and in others a member of the Edmunds family. Her Honour could not be satisfied on the evidence that there were other than a few occasions. There were probably not more than 10 episodes. Significantly, the deceased was able to live in Melbourne alone until almost the end of her life without assistance. She did not require a resident carer. On the evidence her Honour rejected any suggestion that she suffered from an alcohol-based problem such that she was dependent on the appellant. (c) Whether the deceased was dependent upon the appellant [24] The appellant stated that the deceased used to insist that he be available to assist her. That evidence was supported by Mrs Edmunds. The appellant claimed that the deceased was dependent upon him, that he helped her, cooking for her, driving her around, assisting with the shopping, bathing her and assisting her to visit the toilet. He said that he was at her "beck and call". This evidence was supported by Humphries. [25] The respondent said that the deceased was very much able to look after herself so far as her normal living requirements were concerned until only shortly before her death. This was supported by Mrs Laver from her observations during a visit in 1995 to the unit for one week and her knowledge of the deceased's life in Melbourne over the entire period. Hendricks stated that the deceased was a strong and independent person right up to the last months of her life. The appellant said that Mrs Laver received a false impression of life in the unit because he had been specifically asked by the deceased to leave her and Mrs Laver to themselves during the latter's visit in 1995. [26] Her Honour's findings on this topic are part of her findings on a group of associated topics, which I defer stating for the time being. 11 VR 270 at 279 (d) Contributions by the appellant to the deceased's welfare; whether he was more than a caretaker; whether she maintained him [27] The appellant said that he helped the deceased purchase and "co-ordinated" the management of her properties in Queensland. However, the respondent stated that his firm managed the Port Merion unit and that managing agents managed the other properties, and in cross-examination the appellant accepted that all he did amounted to redirecting mail and attending body corporate meetings. The appellant stated that he paid expensive accounts for the deceased's telephone calls while at the unit. Mrs Laver contradicted this. In cross-examination the appellant gave inconsistent evidence. He said that the deceased tended to use the public telephone to call him. Edmunds said in cross-examination that the deceased preferred to use public telephones. [28] The deceased described the appellant as a caretaker to McCowan and in cross-examination the appellant agreed that that was not a misleading statement. In 1998 the deceased told Mrs Laver that she was contemplating selling the unit and that the appellant was "only looking after it until I decide what I am going to do with it". She did not tell the appellant that she was thinking of selling the unit. He found out through Mrs Edmunds. In 2000 the deceased, just before she died, told Mrs Edmunds that she did not know what she was going to do with the unit as she did not want the money. She indicated to John Edmunds that the presence of the appellant in the unit did not "free her up" as much as she would like so far as having real estate interests that were ready to be sold at short notice was concerned. [29] The appellant agreed in cross-examination that, essentially, he supported himself. Mrs Laver stated that there was nothing she observed to suggest that he was dependent on the deceased or was being maintained by her. The appellant said that the deceased paid at restaurants most of the time. In crossexamination he said, "Well, she was looking after me too and I was looking after her, it works both ways". [30] With regard to the topics dealt with under this heading (d) and under heading (c), her Honour stated that she was not satisfied that the deceased was dependent on the appellant or, more importantly, that the

Page 20 roles were reversed. At most, the appellant was a caretaker permitted by the deceased to live rent-free in the unit in return for his caretaking duties. The arrangement was one that was convenient and financially advantageous to the deceased. The unit was occupied for security purposes and maintained and, further, recurrent accounts such as electricity and telephone were paid by the appellant. "In my view," her Honour said, "the arrangement between the appellant 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." [31] Besides the foregoing, in the course of her review later of the considerations set out in s 91(4), her Honour said with reference to para (k) (which concerned any contribution, not for adequate consideration, of the applicant to the building up of the estate or to the welfare of the deceased) that the appellant's evidence overstated the amount of time the deceased spent with him and overstated the problematic nature of her drinking habits. Her Honour found that the appellant undertook the functions of a caretaker when she was not resident at the Port Merion unit and that when she was resident he undertook domestic tasks and did some driving. "However, these services were well and truly compensated by the rent-free accommodation [the appellant] enjoyed." In relation to the 11 VR 270 at 280 consideration in para (m) (which concerned whether the applicant was being maintained by the deceased either wholly or partly and the extent to which and basis on which the deceased had assumed that responsibility) her Honour stated that she accepted that the notion of being maintained was not strictly financial but encompassed any condition whereby one person relied on another for the provision of his or her needs. She considered that the notion of being "partly maintained" was a rejection of a requirement of a relationship characterised by significant financial or emotional inequality. Caution, however, needed to be exercised lest any situation of co-operative living be seen as one of partial maintenance. In this case the judge was satisfied that the appellant was not being maintained wholly or partly by the deceased. He lived rent-free in her property in exchange for performing the services of a caretaker. Throughout the period he supported himself and paid his own bills. Nothing the deceased said or did could be taken as an assumption of the responsibility to maintain the appellant. The $10,000 given to him out of the estate of Walter Urquhart junior was a once-only gift signifying gratitude but no continuing commitment to provide for or support him. The question the deceased asked the appellant, "What will happen to you when I'm gone?", whilst signifying her concern for his well-being, indicated that she had no intention of providing for his future. Finally in this area, her Honour said, the appellant's case had 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 dependent upon the deceased was, as Mahoney JA pointed out in Churton v Christian,24 not one where the deceased owed the appellant a debt of moral gratitude, rather it was the reverse. (e) The effect of certain statements made by the deceased [32] The appellant claimed that the deceased made statements to him which led him to believe that she would support him and not leave him without a roof over his head. He said that she told him that he did not have to go out and be "sold for a pup". Mrs Laver said that she had never heard the deceased use the latter expression. With reference to the appellant the deceased in a letter (Ex "ME-1") that was undated but was written in or about January 2000 stated to Mrs Edmunds:
I don't think I've got a hope in hell of making it up to the Coast again and I don't feel like turfing Bobby out. He has been a very loyal and honest friend and I know he is not strong or well, also I feel safer with somebody in the place.

In the letter she instructed Mrs Edmunds to show it to the appellant and to wish him happy Christmas. Mrs Edmunds stated that on many occasions over the years she and the deceased had discussed Walter Urquhart and how she had inherited the appellant from him, together with the obligation to look after him. John Edmunds said that she had told him that, although the appellant was a problem, she would never get rid of him and that he would always be there for her. [33] Her Honour expressed the view that the statements of the deceased were of no consequence. They

Page 21 were insufficient to establish any obligation or duty or acknowledgment thereof owed by the deceased to the appellant. Indeed, her Honour accepted that the deceased contemplated selling the unit in 1998. The appellant was no more than a caretaker. When dealing later with the consideration set out in para (f) of s 91(4) (which concerned "any obligations or 11 VR 270 at 281 responsibilities" of the deceased to the applicant amongst others), her Honour said that statements made to the appellant by the deceased to the effect that he should regard25 the Port Merion unit as his home could not be taken as conferring upon him 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 returning from a drive did not even import that meaning, but were pleasantries to which no legal or moral obligation could possibly be attached. (f) Whether the appellant suffered a detriment because of his care for the deceased [34] The appellant said that he was unable to hold down full employment because of his obligation to look after the deceased, although he stated in his affidavit, and confirmed in cross-examination, that she did not demand that he not work. In cross-examination he said with reference to his employment prospects that he was now "considered scrap". [35] As appears under heading (g), which follows, her Honour found that the explanation for these employment-related complaints lay with the appellant himself. (g) The appellant's health [36] The appellant said that he had suffered from diabetes for four years and been unable to work to his full capacity. Dr Bose said that the plaintiff had been treated for diabetes for one year and that it affected him to the extent that it reduced his work capacity and life expectancy. [37] Her Honour stated with reference to para (i) of s 91(4) (which concerned, in part, any physical or mental disability of any applicant) that the medical evidence allowed no finding to be made as to the extent of the impairment. There was no satisfactory evidence establishing that the appellant was incapacitated for work or that he had been so incapacitated or suffering from such ill-health during the lifetime of the deceased that she knew or ought to have known that he was dependent upon her. Her Honour accepted generally that the appellant did not enjoy robust health but found that his inability to hold down full-time employment had been more the result of his failure to keep abreast of developments in his chosen field than a consequence of ill-health. She did accept that at his age of 50 his employment prospects were diminished. In dealing with para (h) of s 91(4) (which concerned the financial resources (including earning capacity) and the financial needs of the applicant) her Honour found that the appellant's financial position was poor. He had some personal debt and no savings and, as mentioned, had not held down full-time employment for many years. Her Honour accepted that it would be extremely difficult for him to obtain well remunerated employment in the future, so that his financial prospects in the foreseeable future were poor. Other matters [38] It is convenient to note findings by her Honour on other paragraphs of s 91(4). She accepted for the purposes of para (g) that the estate was a large one and subject to no liabilities except the costs of the proceeding. Under para (l) (which 11 VR 270 at 282 concerned any benefits previously given by the deceased to any applicant or beneficiary), her Honour said that, whether the deceased gave the appellant $10,000 at the urging of Mr Urquhart junior or at her own volition, she was under no obligation to do so. It was a gift and no more. Within para (n) there was no other person liable to maintain the appellant. His family in Malaysia had apparently disowned him. Under para (o) (which concerned the character and conduct of the applicant) her Honour said that the appellant seemed of good character although prone to exaggeration in his evidence; that it was unfortunate that he had placed himself in the situation where at the age of 50 he possibly faced a precarious future; but that it had been his

Page 22 own poor choices and in particular what could only be described as his servile tendency to rely on the largesse of others that had left him so exposed. Finally, it may be noted that her Honour began her consideration of para (f) above-mentioned with the significant statement that the deceased had no legal, moral or financial obligation to the appellant or any other person. Issues on appeal [39] In opening the appeal Mr Gillies stated that he would deal with five matters. They were: the relationship between the deceased and the appellant; that the deceased assumed obligations to the appellant; that the fact of maintenance raised a presumption of obligation; if the foregoing be correct, the appropriate disposition is a life interest in the Port Merion unit to the appellant; and 2e) whether the concept of breach of moral duty was material. In reply Mr Gillies explained that he had focused his attack upon the considerations in paras (e), (f) and (m) of s 91(4). It is convenient to deal with the five matters in the order in which they were argued for the appellant. The relationship between the deceased and the appellant [40] It was pointed out that her Honour had not accepted that the relationship between the deceased and the appellant was like that between a mother and her son, yet, it was submitted, her Honour had accepted that some witnesses said that the relationship was like that. It was submitted that her Honour's conclusion that the relationship was one of friendship only and not that of mother and son flew in the face of the evidence of Mrs Edmunds and John Edmunds when her Honour had not disbelieved them or impliedly accepted the respondent's evidence. It was an error to find that the relationship was one of friendship only without disbelieving the evidence to the contrary. The right finding was between the two extremes. Finally, the evidence of the respondent and Hendricks was acknowledged along with the evidence that there was little contact between the appellant and the deceased when the latter was in Melbourne, but it was said that the observations of the defence witnesses only went so far. They did not say that the appellant's witnesses were wrong. [41] As was emphasised for the respondent, the evidence given on both sides on this question was evidence of the impressions of the respective witnesses. With regard to the appellant's evidence, her Honour assessed his credibility and was unimpressed by his exaggerations. Since her Honour was concerned with impressions, it may not be right to look for express or implied indications of disbelief of Mrs Edmunds and John Edmunds, but the correct interpretation of her Honour's judgment is -- and this is patent -- that the judge did not accept 11 VR 270 at 283 the view or impression to which they deposed. Her Honour did not commit the error suggested for the appellant. Under s 91(4)(e) her Honour was required to have regard to the nature of the relationship. Her Honour's conclusion as to that is not a finding of primary fact but an assessment or characterisation. The evidence set out earlier tends to support her Honour's conclusion that the deceased and the appellant were merely good friends. At any rate the appellant has not persuaded me that her Honour erred in her assessment or characterisation. Whether the deceased assumed obligations to the appellant [42] Mr Gillies placed particular reliance upon Ex "ME-1", the relevant parts of which have been set out or summarised earlier. The letter is not referred to in her Honour's reasons and it was submitted that her Honour had overlooked it. The statement in it that the deceased did not feel like "turfing" Bobby out showed, it was said, that she did not want to do so, and she did not do so. The letter was, it was submitted for the appellant, consistent with various statements of the deceased sworn to and, together with them, was

2a) 2b) 2c) 2d)

Page 23 consistent with the deceased's accepting an obligation to maintain the appellant. [43] The letter to Mrs Edmunds relied on does not show the assumption by the deceased of an obligation to maintain the appellant, whom, incidentally, she describes as a "friend" rather than in terms of family membership. First, its emphasis is on action or inaction while the author remains alive. Secondly, its language is that of self-interest. She felt safer with somebody in the unit. If she sold she would lose $100,000. It may be that she would have sold if she could have done so at a profit. Thirdly, and consistently with the self-interested nature of the letter, in 1998 the deceased told Mrs Laver that she was thinking of selling the unit, but she did not herself tell the appellant that. That is, the occupation by the appellant and what he did for the deceased would not have been a bar to her selling. Nor indeed, in the mind of the deceased, did the subject require discussion with him. That shows that she did not consider herself under any obligation to him. Leaving the letter aside, it is true that the appellant deposed to statements by the deceased to him that he would always have a roof over his head, but it was open to her Honour, I consider, to treat such statements as inconsequential because they did not amount to an assumption of responsibility to the appellant, lacking a promissory nature and being open to be understood as concerned only with the then present time. [44] So far as the appellant suggested that the purchase of the Port Merion unit was done at the suggestion of Mr Urquhart junior26 or was a continuation of the appellant's relationship with him, Mr Urquhart had not been providing accommodation to the appellant and the evidence of Mr McCowan established that the deceased bought the unit for her own purposes, namely, in order that she could leave Melbourne during the winter and live on the Gold Coast. Again, she had only her interests in mind. [45] Accordingly, her Honour did not err in declining to find that the deceased assumed an obligation to the appellant to maintain him. Whether the (alleged) fact of maintenance raises a presumption of obligation to the appellant [46] It was submitted for the appellant that the fact of maintenance raised a presumption of an assumption by the deceased of responsibility for the appellant: there was an acceptance of responsibility by the provision of rent-free 11 VR 270 at 284 accommodation to the appellant. Basically they shared expenses and looked after each other. The strongest fact was that the appellant was in occupation. Reliance was placed on statements in the decisions of the English Court of Appeal in Jelley v Iliffe27 and in In re B (deceased),28 which, though cited to her Honour, are not mentioned in her judgment. It was said that her Honour had failed to deal with partial maintenance by the deceased which made the appellant dependent. [47] There are two difficulties with this argument. First, it proceeds on a false premiss. Her Honour was satisfied that the appellant was not being maintained, wholly or partly, by the deceased: he lived rent-free in the unit in exchange for performing the services of a caretaker. Albeit that those services were "well and truly compensated" by the rent-free accommodation, the appellant's caretaking was of considerable assistance to the deceased, securing her unit, affording her flexibility and possibly saving her stamp duty, and it was therefore in her interests, as well as his, that he should have the benefit of rent-free accommodation. For the reasons given above in rejecting the appellant's second point, I am not persuaded that the deceased assumed a responsibility for, or to maintain, the appellant, nor am I persuaded by any other arguments for the appellant that her Honour's conclusions on maintenance and dependency were erroneous. [48] It was contended in particular that it was not open to her Honour to arrive at the conclusion that the appellant was not being at least partly maintained by the deceased because his caretaking services were of much less value than the rent-free accommodation. But the Act (unlike the English Act) does not require an exact pecuniary balancing. The correct analysis is that there was an arrangement convenient to both parties that involved substantial reciprocal obligations. [49] Secondly, the English cases are distinguishable and afford no assistance here. It is true that in Jelley v Iliffe Stephenson LJ expressed the view29 that the bare fact of maintenance raised a presumption that

Page 24 responsibility for it had been assumed and that appears to have been accepted in Re B (deceased).30 But those cases turn very largely on a provision which has no counterpart in s 91 of the Act. 31 Since her Honour, correctly in my view, found that the appellant was not being wholly or partly maintained by the deceased at the time of her death and since our Act has no equivalent to the English s 1(3), the English cases were inapplicable and her Honour was free to disregard them. The appropriate disposition [50] This point was advanced on the assumption that all or at least some of the preceding points had succeeded. My estimation has been that, individually and collectively, they fail, so that, on the appellant's case as argued, no disposition in his favour falls to be made. 11 VR 270 at 285 Moral duty [51] Her Honour reviewed the history and interpretation of the Victorian legislation and the interpretation of the current New South Wales legislation on the topic and concluded that the proper approach to the new Victorian legislation remained unchanged from that described by Ormiston J in Collicoat v McMillan32 and that the Parliament did not intend to constrain the freedom of testation unless the deceased breached a moral duty owed to the applicant. As already stated, her Honour held that the appellant had failed to make out a moral duty owed by the deceased to him. [52] It was submitted for the appellant that her Honour was wrong to say that the concept of the "common law" duty to provide still permeated the Act after "codification". Whilst there was much force in what Nettle JA had said in Blair v Blair33 as to having regard pursuant to s 91(4)(p) to any other matter considered relevant, the remainder of the principal paragraph in his Honour's reasons was, as I understood the argument, said not to be an appropriate way of dealing with moral duty. It was submitted in the appellant's written outline of argument that the obiter dictum of three of the five justices of the High Court in Singer v Berghouse (No 2)34 was persuasive and that, given what was said to be the exhaustive list of statutory criteria to which the court must now have regard when determining the threshold question, it was neither necessary nor helpful for a primary judge to refer to the deceased's moral duty in respect of the disposition of his or her estate.35 It was said that the concept of moral duty came into use because there was at the time little guidance for trial judges under the original testator's family maintenance legislation, but that since then there had been a codification of the law in the form of paras (a)-(o) of s 91(4) and one could not now apply that codification by using the "encrusted concept" of moral duty. One could not put a gloss on the criteria. Statements in High Court judgments were cited in support of the proposition that this court must approach the text of the Act as primary. [53] I accept that last proposition as basic. But, as regards the obiter dictum in Singer v Berghouse, Ormiston J in Collicoat v McMillan and then this court in Grey v Harrison36 had declined to follow it. Moreover, in a decision given after the reservation of judgment in this case and on which the parties were offered, but did not wish to exercise, the opportunity of making submissions, Vigolo v Bostin,37 by a majority of three justices38 to two the High Court after detailed analysis disagreed with the abovementioned obiter dictum, Callinan and Heydon JJ stating that the concepts of a moral duty and a moral claim were not alien to, or in any way outside, the language of the relevant section. Vigolo v 11 VR 270 at 286 Bostin, Singer v Berghouse and the two Victorian cases mentioned above were decided on what might be called the traditional form of testator's family maintenance legislation, in which the critical provision posed the question whether "adequate provision [had been made] for the proper maintenance and support"39 of the widow or another specified relative of the deceased. The present appeal turns on legislation which is different and poses as the first of three questions whether the deceased had "responsibility" to make provision (scil, out of her estate) for (the proper maintenance and support of) the appellant.40 The word "responsibility" has strong connotations of moral duty, for, if there were a legal responsibility, resort to the Act would be unnecessary and no other description of responsibility suggests itself. 41 Accordingly, whilst recognising that it is now the current s 91 that must be interpreted, one may properly apply a view

Page 25 consonant with the majority decision in Vigolo v Bostin all the more readily to s 91(4)(a). [54] The submission that in effect the question posed by s 91(4)(a) was to be answered simply by going through paras (e)-(o) overlooks the open-ended nature of para (p). More importantly, that submission faces the incontrovertible point, as it seems to me, made by Nettle JA in Blair v Blair.42 [55] Having made the foregoing, largely introductory, observations, I content myself with saying that on the question of moral duty I concur in the reasons of Callaway JA. Conclusion [56] The written submissions for the appellant advanced other, and particular, arguments not mentioned orally. I have also had regard to them. Even so, I have come to the conclusion that her Honour did not err in declining to determine that the deceased had responsibility to make provision for the appellant. Accordingly, I would dismiss the appeal.

Buchanan JA.
[57] I agree with Batt JA, for the reasons he has stated, that the appeal should be dismissed. I also agree with Callaway JA's observations as to the continued relevance of the concept of a moral duty informing the determination of the question whether a responsibility exists to make provision for a claimant. Appeal dismissed. Solicitors for the appellant: RB Legal. Solicitor for the respondent: Harry M Hearn.

1 Lee v Hearn (2002) 7 VR 595. 2 [1997] 2 VR 359. 3 Section 91(1) and (4)(a). 4 That is not to say that moral duty to make provision, or the provision that a wise and just testator would have made, is irrelevant to the later questions posed by s 91(4). 5 (2004) 10 VR 69. 6 At 84, [41]. 7 A footnote referred to Collicoat v McMillan [1999] 3 VR 803 at 815 per Ormiston JA. 8 At 365. 9 Compare Grey v Harrisonat 366. 10 (2002) 27 WAR 121. 11 Inheritance (Family and Dependants Provision) Act 1972 (WA), s 7.

Page 26
12 See especially s 6. 13 At 366. 14 Also relevant is the rule of construction referred to by Gummow and Hayne JJ in Coleman v Power (2004) 209 ALR 182 at 227, [185] ; 78 ALJR 1166 at 1199 and the cases cited by their Honours at fn 146. 15 (2003) 11 VR 95. 16 At 103, [38]. 17 Compare the Western Australian legislation referred to in [5] above. 18 At 365-6. 19 (2005) 213 ALR 692 ; 79 ALJR 731. 20 See also fn 14 above. 21 (2002) 7 VR 595. 22 Subsections (1), (3) and (4) of s 91 of the Act, other than paras (e)-(o) of subs (4), are set out in [2] of the judgment of Callaway JA. So far as material, the terms of those paragraphs are quoted or summarised later in those reasons. 23 This reads "|PO 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". 24 (1988) 13 NSWLR 241 at 244. 25 The appellant drew attention to the absence of the word "always" from this expression in her Honour's reasons. 26 This would, in any event, have reflected an obligation to him. 27 [1981] Fam 128 at 136B-139D. 28 [2000] Ch 662 at 670. 29 At Fam 137B; All ER 35. 30 At 672D-E and 673E-H. 31 This is s 1(3) of the Inheritance (Provision for Family and Dependants) Act 1975 (UK). It provided, for the purposes of a provision (s 1(1)(e)) that entitled a person who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased to apply for an order for financial provision under the Act, that a person should be treated as maintained by the deceased, either wholly or partly, if the deceased, otherwise than for full valuable consideration, was making a substantial contribution in money or money's worth towards the reasonable needs of that person. It is true that some of the paragraphs of s 91(4) follow in varying degrees of closeness paragraphs in s 3(1) of the English Act and that para (m) of s 91(4) begins with language found in s 1(1)(e) of the English Act and ends with language found in s 3(4) of that Act. But s 1(3) has not been copied. 32 [1999] 3 VR 803 esp at 819, [45]. 33 (2004) 10 VR 69 at 84, [41]. This passage is cited by Callaway JA in [4] above. 34 (1994) 181 CLR 201 at 209. The dictum was that their Honours doubted that the well-known statement of Salmond J in In re Allen; Allen v Manchester (1921) 41 NZLR 218 at 220-1 as to the moral duty of a just and wise father provided useful

Page 27
assistance in elucidating the statutory provisions and said it might well be understood as amounting to a gloss on them. 35 Reference was made to Coombes v Ward [2004] VSCA 51 at [12] per Chernov JA. But what was said there has to be read in the light of his Honour's statements in Blair v Blairat 75, [13], a judgment which was delivered after written submissions had been filed. 36 [1997] 2 VR 359. 37 (2005) 213 ALR 692 ; 79 ALJR 731. 38 At ALR 698, [21]; ALJR 736 per Gleeson CJ, and at ALR 721, [121]; ALJR 752 per Callinan and Heydon JJ. 39 Emphasis added. 40 The interpolations appearing within brackets derive from subs (1) of s 91, to which one is led by para (a) of subs (4). 41 If there were any uncertainty, recourse to the Attorney-General's second reading speech on the Bill that introduced the new provisions would put the matter beyond doubt. The relevant portions of the speech are set out in the judgment of Winneke P in Coombes v Wardat [2]. 42 At 84, [41].

P G WILLIS BARRISTER-AT-LAW

Page 28

Page 29 3 of 10 DOCUMENTS: CaseBase Cases

Scheps v Cobb
[2005] NSWSC 455; BC200503390 Court: NSWSC Judges: Burchett AJ Judgment Date: 13/5/2005

Catchwords & Digest

Contract -- Agreements -- Carers -- Life estate Application for declaration plaintiff entitled proportion of deceased estate of father. Plaintiff claimed agreement that plaintiff would be given life interest in estate in return for carer services. Plaintiff claimed entitlement to share of estate pusuant to (NSW) Property (Relationships) Act 1984. Plaintiff claimed domestic relationship between father and son. No claim made for family provision. Whether right to life interest established. Held: Application granted. Plaintiff entitled to life estate. Cases referring to this case Annotations: All CasesSort by: Judgment Date (Latest First) Annotation Case Name Citations [2010] NSWSC 1118; Cited Darmanin v Cowan BC201007300 (2009) 3 ASTLR 155; Cited Bovaird v Frost [2009] NSWSC 337; BC200903506 LC v Public Trustee of [2008] QSC 051; Cited Queensland BC200801675 Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations (1996) 20 Fam LR 374; Considered Reid v George BC9601413 [1990] VR 605; (1989) DFC 95-073; (1989) V Considered Skene v Dale ConvR 54-348; BC8900582

Court NSW SC NSW SC QSC

Date 1/10/20 10 30/4/20 09 17/3/20 08

Signal

Court NSWSC VSC

Date 30/4/1996 10/8/1989

Signal

Page 30 Legislation considered by this case Legislation Name & Jurisdiction Conveyancing Act 1919 (NSW) Family Provision Act 1982 (NSW) Law Reform (Miscellaneous Provisions) Act 1944 (NSW) Property (Relationships) Act 1984 (NSW)

Provisions Pt 4 Div 6 s2 Div 2, Pt 3, s 20, s 24, s 25, s 44, s 47, s 5, s 52, s 56

Page 31

Page 32 4 of 10 DOCUMENTS: CaseBase Cases

Moore v Moore
[2005] VSC 95; BC200501891 Court: VSC Judges: Mandie J Judgment Date: 8/4/2005

Catchwords & Digest

Succession -- Family provision -- Widow -- Adequacy of provision Application for provision from deceased estate. Deceased left applicant motor vehicle, personal belongings and one-quarter of real estate and cash or money assets. Residue left to deceased's children in equal shares. Applicant widow sought further provision from deceased's estate. Deceased failed to make adequate provision for proper maintenance and support of applicant as sum manifestly inadequate to provide suitable residence let alone future contingencies. Wise and just testator would have considered prime responsibility and moral duty to make substantially greater provision for widow. Further provision should be made for applicant by way of absolute entitlement to three-quarters of residue estate and life interest in remaining one-quarter. Application granted. Cases referring to this case Annotations: All CasesSort by: Judgment Date (Latest First) Annotation Case Name Citations [2011] VSC 649; Cited Youn v Frank BC201109999 [2007] VSC 36; Cited Draskovic v Bogicevic BC200701042 [2007] VSC 21; Cited Carter v O'Brien BC200700709 Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations (2005) 221 CLR 191; (2005) 213 ALR 692; Applied Vigolo v Bostin (2005) 79 ALJR 731; [2005] HCA 11; BC200500902 Considered/ Blair v Blair (2004) 10 VR 69; Questioned [2004] VSCA 149;

Court VSC VSC VSC

Date 16/12/2 011 1/3/200 7 20/2/20 07

Signal

Court HCA VSCA

Date 9/3/2005 27/8/2004

Signal

Page 33 BC200405494 Legislation considered by this case Legislation Name & Jurisdiction Administration and Probate Act 1958 (Vic)

Provisions s 91

Page 34

Page 35

5 of 10 DOCUMENTS: Unreported Judgments NSW 73 Paragraphs

Re Estate of BELL; GOLLEGE v DONNACHIE - BC200500379

Supreme Court of New South Wales -- Equity Division Macready M 4867 of 2002 16, 17 November 2004, 8 February 2005 Gollege v Donnachie [2005] NSWSC 16
FAMILY PROVISION AND MAINTENANCE -- claim by a de facto partner -- dispute as to whether plaintiff was a de facto partner -- appropriate provision was a life interest with particular attributes to prevent dissipation.

Macready M.
[1] This is the hearing of an application under the Family Provision Act 1982 in respect of the estate of the late Mary Ann Bell who died on 2 April 2001. The plaintiff was at one stage the de facto partner of the deceased. The defendants are two of the children of the deceased by her marriage. Last will of the deceased [2] On 19 April 1984 the deceased made her last will and testament. In that will cl 2 was as follows:
I give my house No 48 Macauley Street Leichhardt and the furniture and furnishings therein unto my trustees upon trust to permit my friend WILLIAM GORDON GOLLEDGE (provided he shall be living with me as at the date of my death upon a bona fide domestic basis) and my son David Anthony Bell (hereinafter called the permitted occupants) and no other person to enjoy the personal use and occupation of the said house furniture and furnishings during their respective lives while they shall respectively remain unmarried and so long as they respectively shall not enter into any de facto relationship in either of which events he or they shall forthwith vacate the house and I DIRECT my trustees to take any necessary steps to ensure that they do so.

[3] Thereafter the will provided in cl 4 for the home to be sold and to be divided equally between the four children of the deceased. [4] On 30 January 1996 the deceased executed a codicil amending cl 2 by deleting the reference to 48 Macauley St, Leichhardt and inserting the premises known as 14 Warman St, Pendle Hill. Apart from this amendment there were no other changes to the will. The assets in the estate [5] The deceased owned the property at 14 Pendle Hill that has a present value of $417,000 and she had

Page 36 cash of about $5,756. The cash has been used to pay some of the administration expenses of $20,801 with the executors paying the balance. They still hold the house which is occupied by the defendant and the executors have met all the rates and taxes on the house since the date of death. [6] The plaintiff's costs up to and including the hearing amount to $26,370 and the defendants' amount to $26,259.50. Family history [7] The plaintiff was born on 7 January 1937 and the deceased was born on 14 January 1928. He first met the deceased in 1964 when she was married to her husband Sidney Bell. There were four children of that marriage. They were the first defendant born in 1945, the second defendant born in 1952, Frederick born in 1955 and David born in 1966. [8] In January 1977 Sydney Bell died and shortly thereafter (according to the plaintiff) he moved in to live with the deceased. The defendants suggest that he moved in about 18 months after Mr Bell's death. The plaintiff sold his home at Leichhardt in 1979 and after paying off the mortgage he received the sum of $20,000. [9] The plaintiff's son moved into the house in 1978 and remained there until 1981 when he moved out. He was then aged 17 and he kept in touch with the plaintiff thereafter. [10] The deceased made her will as I have recounted on 19 April 1984. At that stage David was still at home and he moved out in 1988. [11] In 1988 the plaintiff's father moved into the home where the deceased cared for him. He remained there for two years until he had to move to a nursing home. He died in 1990. [12] In October 1990 after the sale of his father's home the plaintiff received $7,261 and $70,000 by way of distribution from the estate. The plaintiff says that he gave sums of $25,000 and $7,000 to the deceased but that is disputed. [13] The plaintiff had been a clerk in the Department of Public Works and he retired in July 1992. He received redundancy and long service sums of $10,861 and $6,385. He also received a payout of his superannuation in an amount of $119,983. [14] There are allegations that the plaintiff drank very heavily after his retirement and it appears that he received a disability pension in 1993. [15] On 30 January 1996 the deceased made the codicil to her will. In 1997 the plaintiff suffered a turn at home and was taken to hospital. After that occasion the plaintiff says that his drinking habits changed and he ceased drinking a bottle of scotch a day and drank beer instead. The evidence suggests that it might have been two bottles a day rather than one bottle. [16] The deceased died on 2 April 2001 and probate was granted on 27 June 2001. The proceedings were commenced on 30 September 2002 within the time limited under the Act. Eligibility of the plaintiff [17] The plaintiff claims to have been living with the deceased as her de facto partner at the date of death or, alternatively, that he was at some time a member of the household of which the deceased was a member and at some time partly dependant upon the deceased. [18] Under the amendments introduced by the Property (Relationships) Legislation Amendment Act 1999 which took effect on 28 June 1999 there was an extension of the Act which applied to proceedings that commenced after that date. The amended Family Provision Act incorporates the definition of a domestic relationship in the Property (Relationships) Act 1984. [19] That Act applies to domestic relationships which are defined in s 5 as follows --

Page 37
5. Domestic relationships.

3)

For the purposes of this Act, a domestic relationship is:

1. 1. 2 3)

a de facto relationship, or 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.

For the purposes of subsection (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:

2. 2. 3 1)

for fee or reward, or on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation).

A reference in this Act to a child of the parties to a domestic relationship is a reference to any of the following:

3. 3. 1.

a child born as a result of sexual relations between the parties, a child adopted by both parties, where the domestic relationship is a de facto relationship between a man and a woman, a child of the woman:

1. 1. 1. 1. 4 1)

of whom the man is the father, or 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,

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).

Except as provided by section 6, 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.

[20] It can be seen from the terms of s 5 (1) that a domestic relationship can be either a de facto relationship or a close personal relationship. [21] The definition of de facto relationship itself appears in s 4 and is in the following terms -4. De facto relationships.

4) 5 4)

For the purposes of this Act, a de facto relationship is a relationship between two adult persons:

4. 4.

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

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:

5. 5. 2. 2.

the duration of the relationship, the nature and extent of common residence, whether or not a sexual relationship exists, the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties,

Page 38

1. 1. 1. 1. 2. 6 2)

the ownership, use and acquisition of property, the degree of mutual commitment to a shared life, the care and support of children, the performance of household duties, the reputation and public aspects of the relationship.

No finding in respect of any of the matters mentioned in subsection (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. Except as provided by section 6, 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.

2)

[22] Apart from the provisions of subcl (1) this definition merely reflects the existing state of the law as it had been developed under the De Facto Relationships Act 1984 and the Family Provision Act 1982. See Light v Anderson (1992) DFC 95120 applying Simonis v Perpetual Trustee Co Ltd (1987) 21 NSWLR 677. [23] The plaintiff did not claim that he was in a close personal relationship with the deceased at the date of death but for completeness I should mention the matter. Apart from the exclusionary matters in s 5(2) there is no definition of "close personal relationship". Little help is obtained from the reading speeches as to the meaning of "close personal relationship". It is apparent from the terms of the separate definition of de facto relationship that a close personal relationship does not necessarily involve the concept of living together as a couple. Instead s 5(1)(b) refers to persons "who are living together, one or each of whom provides the other with domestic support and personal care". It is notable that both domestic support and personal care must be provided. One of them alone would not be sufficient. The "close personal relationship" has to be between two adult persons who are " living together". Given that they may be members of the same family, such as a grandparent and grandchild and the different definition for a "de facto relationship" concepts relating to a "couple" are not relevant. Instead, the definition calls for two different links. The first is that the parties are "living together". The second is that "one or each of whom provides the other with domestic support and personal care". [24] The second requirement is cumulative. There must be both domestic support and personal care. [25] It is the provision of "personal care" which provides the clue to the meaning of the composite expression "domestic support and personal care". Some of the primary meanings of "personal" include --

3a) 3b)

Of or pertaining to concerning of affecting the individual person or self; individual; private; one's own. Of or pertaining to one's person body or figure; bodily.

[26] The reason why no claim was made by the plaintiff in this regard is that he gave no evidence of having provided personal care to the deceased. [27] There does not seem to be any dispute that the deceased and the plaintiff were living in a de facto relationship while they were living at Macauley St, Leichhardt until the move in 1991. In respect of the period after 1991 I will consider the matter by reference to the headings to which I have referred. The duration of the relationship [28] The relationship overall was a long one having commenced either in 1977 or 1978 and it continued

Page 39 until the death of the deceased in April 2001. The nature and extent of the common residence [29] The plaintiff and the deceased lived together and shared a bedroom for the period they were living together at Leichhardt. It seems clear that after the move from Pendle Hill the plaintiff and the deceased had separate bedrooms. Precisely when this occurred was a matter of some debate in the evidence but the plaintiff himself conceded that this occurred at least as early as 1996 and may have been in 1994 or 1995. In 1996, prior to the plaintiff having his bad turn as a result of his drinking which put him in hospital, the deceased herself had gone to consult a solicitor about what claims the plaintiff might have upon her estate in the event of her death. A long letter of advice was given to the deceased on 31 January 1996 by Mr David Austin, solicitor. In that letter Mr Austin repeated his instructions given by the deceased in these terms:
Mr Golledge has turned into a problem drinker. He was laid off from work two years ago with a payout of some $150, 000.00. He has only $30,000.00 left having put the rest through the poker machines and spent the money at the RSL. He has nerve damage through alcohol abuse resulting in his bleeding from the skin at night. He knows that he is an alcoholic. He is often drunk by 9.00 am. He does not contribute a cent to the house nor has he ever done so. You sleep in separate rooms. There is no physical relationship. You have asked him to leave many times but he refuses to. His son is sympathetic to you but does not know how to control his father's behaviour. You also state that your own health is now suffering and you have decided that you want him out of your life.

[30] Other evidence supported the claims made by the deceased to Mr Austin. For example there was evidence of her having spoken to the son of the plaintiff asking him to do something about his father such as make him have treatment. The plaintiff's son agreed with this evidence and clearly it was an extremely trying time for the deceased from the early nineteen nineties. No doubt the problem seems to have been exacerbated by the plaintiff's retirement in 1992 and the availability to him of large sums of money from his payout. [31] Notwithstanding these difficulties, the fact of the matter is that the parties continued to reside together in the same house, sharing the same household, with the deceased preparing meals for the plaintiff until shortly before her death. Whether or not a sexual relationship existed [32] The plaintiff contended that a sexual relationship continued up until 1998 on the odd occasions when the deceased would visit him early in the morning. There is no other evidence on the matter other than the instructions given to the solicitor which suggested that there was no physical relationship in 1996. It would seem to me that any sexual relationship had ceased by 1998. The degree of financial dependence or interdependence, and any arrangements for financial support, between the parties [33] In the time at Pendle Hill, as I observe below, there was little contribution by the plaintiff to the running of the household and the parties had separate bank accounts. The ownership, use and acquisition of property [34] The Leichhardt and Pendle Hill properties were purchased with funds provided by the deceased. On the sale of the Leichhardt property the deceased received a surplus on the sale and purchase arrangements of about $32,000. There was no contribution to the acquisition of either of these properties by the plaintiff. In respect of the Leichhardt property there were contributions made by the plaintiff when he renovated the kitchen and bought some furniture for the property. Precise details of the amounts spent are not clear but the funds would have come from the proceeds of sale of his own property which realised him about $20,000. The amount actually spent by the plaintiff on the house out of this sum would be somewhat less as

Page 40 he conceded that he spent a lot of that money on drinking and gambling. The degree of mutual commitment to a shared life [35] There was evidence from a number of persons who observed the plaintiff and the deceased as a couple and their visits to the local club. This shows some commitment to a life together as do various cards and expressions of sympathy, which are in evidence. The plaintiff gave evidence that he contributed amounts totalling some $32,000 to the deceased and another $3,000 to her daughter for the purpose of a trip, which they took to Malta. The plaintiff could adduce no proof of this. However, there are reports of conversations during which the deceased acknowledged a sum of this magnitude had been paid for by the plaintiff. Apparently the $3,000 lent to the deceased's daughter was a sum for contingencies on the trip and was returned to the deceased by the deceased's daughter. I accept the plaintiff's evidence on this aspect and such payments do show some sharing of resources. However, there were many other assets, which the plaintiff received particularly from his father's estate and on his retirement, and I have detailed these in the chronology earlier in this judgment. I am satisfied that, apart from the matters I have already identified, this money was retained by the plaintiff and used for his own purposes. These purposes included gambling on the dogs and for many years he owned various racing dogs. He also used a substantial amount on alcohol. There was adduced in evidence receipts from betting in the period of a few years after 1994 which totalled some $27,000 and this indicates the magnitude of his expenditure on these matters. [36] There is evidence in the doctor's reports of the plaintiff's alcohol abuse and it is plain that in the early 1990s his drinking had become impossible for the plaintiff. This situation continued up until possibly either late 1996 or early 1997 when the plaintiff had a serious incident at home and had to be hospitalised. Up until this time he had been drinking one or more bottles of whiskey a day. In considering the son's evidence, which I accept, it is plain that the drinking was reduced after this event by substituting beer for whiskey. [37] There was also evidence from the first defendant who conceded that the plaintiff's drinking was substantially less during these later years. She noticed that her mother was not cooking for the plaintiff any longer and that they were doing their own cooking and they were not yelling or screaming at each other. As the plaintiff was sober, they seemed to have normal conversations but seemed to have separate interests. The care and support of children [38] I have earlier recounted that the earlier part of the relationship was an admitted de facto relationship and that they cared for each other's children. There was also a care, which the deceased extended to the plaintiff's father over some years before he had to go into hospital. The performance of household duties [39] In the early stages the deceased did the cooking for the family and was renowned for her cooking skills. This seems to have tailed off with her and the plaintiff cooking seperately towards the end of the relationship. It is clear that they both performed some household duties. The plaintiff's duties were somewhat restricted by his problems but he did do some gardening. It seems that the only contributions that the plaintiff might have made in the later years to household was to put $50 or $100 on the table if the deceased complained about not getting any money from him to meet household expenses. Apart from these small amounts it was the deceased who met all the expenses. The reputation and public aspects of the relationship [40] As I have mentioned earlier, there are a number of affidavits from friends who observed the plaintiff and the deceased at the club socialising as a couple and this is the main evidence on this aspect. [41] We are dealing here with a situation where there was a clear de facto relationship for many years until the move to Pendle Hill. Thereafter the relationship deteriorated to the extent that in 1996 the deceased sought advice in order to perhaps consider ending the relationship. The fact of the matter is that the deceased did not end the relationship and they continued to live together. The quality of their life together

Page 41 picked up after 1997 but some of the aspects of the relationship were not present. For example they lived in separate areas of the house and they did not have a sexual relationship but that is not unusual. Indeed, the problems the plaintiff had with his legs probably meant that it was necessary for him to sleep in a separate room. [42] In the 1990s the relationship was an unhappy one. The deceased was considering whether or not to end the relationship by having the plaintiff's son admit him to hospital or the deceased herself ending the relationship. Out of concern for the plaintiff, the deceased did not do this because she did not want to see him out in the street. In the circumstances, notwithstanding that they might have been cooking for themselves towards the end of the relationship, I think that the relationship ended at the date of death. Accordingly, I am satisfied that the plaintiff is an eligible person as a de facto partner of the deceased at the date of death. [43] In these circumstances it is not necessary to consider whether the plaintiff is an eligible person as a member of the household. [44] 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 p 209 it said the following -The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 476. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder (1951) 82 CLR 645, where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors.

The plaintiff's situation in life [45] The plaintiff is 67 years of age; he is single with no dependents. He has no assets other than a few personal effects and he lives on an aged pension in the order of $427.80 per fortnight. [46] I have already dealt with the relationship between the plaintiff and the deceased and have recorded that it was an unhappy one during the last ten years. This was brought about by the plaintiff's alcohol abuse and gambling. [47] Although I have found the plaintiff contributed some $32,000 to the expenses of the deceased and her daughter for their trip overseas, there was no contribution to the assets in the estate by the plaintiff apart from the renovations at Leichhardt. Notwithstanding that in the last ten years the plaintiff received substantial payments, he did not expend these for the benefit of the relationship and only made minimal contributions towards the upkeep of the home. [48] It is also necessary to consider the situation in life of others who might have a claim on the bounty of the deceased. The situation in life of the first defendant Patricia Donnachie [49] Patricia Donnachie is aged 59 years. She is married, although she is estranged from her husband. She

Page 42 has two children who are not dependent upon her. She and her estranged husband own a property at Greystanes which has a value of $460,000. Her husband resides in the property rent free and pays all the outgoings while she rents a unit at Parramatta for $590 per month. Patricia Donnachie has cash and shares of about $10,000; superannuation of $3,000 and a car worth $35,000 on which there is $5,600 owing by way of finance. She is self employed as a sales representative in the upholstery business and her taxable income for the year ended 2002 was some $7,150. [50] Patricia had a good relationship with the deceased and whom she supported as a good daughter. She did not contribute to the assets in the estate. The situation in life of the second defendant Elizabeth Borg [51] Elizabeth Borg was born on 22 March 1952 and she is aged 52 years. She is married and her husband is aged 53 years. Elizabeth Borg placed no evidence before the Court as to her financial situation or her relationship with the deceased. Accordingly, the Court can assume that she does not wish these matters to be taken into account when considering the plaintiff's claim. The situation in life of David Anthony Bell [52] David Bell is the son of the deceased. He was born on 17 March 1966 and he is aged 38. He is married and has three children aged from two to fourteen years of age. He also placed no information before the Court as to his financial situation or his relationship with the deceased. The situation in life of Fred James Bell [53] Fred Bell is the son of the deceased. He was born on 26 December 1950 and he is aged 53. He is married and has two adult children. He also placed no information before the Court as to his financial situation or his relationship with the deceased. Consideration of the plaintiff's claim [54] The plaintiff's claim for provision is expressed in a number of ways. The first submission was that he should receive the outright ownership of the deceased's former home. Second, that he should receive the net distributable estate after the deceased's former house was sold. Third, some other accommodation together with a capital sum to be achieved, for example, by a life estate in the nature of a Crisp order. [55] It is clear in this case that the plaintiff is not able to afford to meet the rates and taxes on the house at Pendle Hill and he has difficulty maintaining the property due to difficulty with his hips. [56] In her initial affidavit filed earlier in the proceedings, the first defendant, Patricia Donnachie, undertook to continue to pay Council and water rates and insurance if the will was upheld and she would not require the property to be sold to pay or reimburse the executors for their legal fees. She and her sister and brothers have paid the rates and taxes since the date of death of the deceased. The two defendants expanded upon this undertaking in evidence given by Patricia Donnachie when the matter was before me for hearing. Apparently, her brothers and sister will help her carry out this undertaking and, in order to meet the legal fees, it is proposed that a mortgage will be taken out on the premises and repaid over a five to ten year period. She also undertook and in fact had put in hand arrangements for the maintenance of the garden and lawns of the premises. [57] The question of what is the appropriate provision and whether a life estate should be awarded to persons in the situation of either a widow or a longstanding de facto partner has been dealt with in a number of cases. [58] In the 1970s and 1980s there are a number of decisions of single Judges of this Court where they have held that a life interest with particular attributes were appropriate. (See, for instance, Crisp v Burns Philp Trustee Co Ltd , Holland J 18 December 1979; Banks v Hourigan , Waddell CJ in Eq, 2 March 1989; Cameron v Hills , Needham J, 26 October 1989.) This perhaps is reflected in matters mentioned by the

Page 43 High Court in White v Barron (1979-1980) 144 CLR 431 where at p 444 Mason J said -A capital provision should only be awarded to a widow when it appears that this is the fairest means of securing her proper maintenance. However, the provision of a large capital sum for a widow who is not young may, in the event of her early death, result in a substantial benefit to her relatives, contrary to the wishes of the testator, when a benefit of another kind would have afforded an adequate safeguard to her personally, without leaving her in a position in which she could [445] benefit her relatives from the proceeds of the legacy.' As has been pointed out in Elliott v Elliott that statement was made in an evidentiary context where the provision was made at the expense of the children of a previous marriage who had some claim on the testamentary bounty of the deceased.

[59] A change in the High Court's attitude to the provision for widows, no doubt in response to changes in community expectations, is illustrated by the fact that in this case it disapproved of observations made in Worladge v Doddridge (1957) 97 CLR 1, that as a general rule an order for provision in favour of a widow should be confined to widowhood. Stephen J who was one of the majority in White v Barron at pp 438-440 went to some length to point out that the jurisdiction was one which should not be unduly confined by judge-made rules of purportedly general application. By the late 1980s other Judges in this Division were taking a slightly different view. For instance, in Court v Hunt 14 September 1987, unreported, Young J said at p 2:
Old age is a growing problem in our community and judges who sit in Family Provision Act applications get experience, as well as their own experience in the community, as to what happens when people reach the age when they can no longer look after themselves and one judges the evidence in these sort of proceedings against that background knowledge.

[60] His Honour then went on to talk about the assumptions one could make about the fact that frequently people, once they pass 55, have to change their accommodation and locate themselves either in retirement villages or nursing homes which have different requirements for capital contribution. [61] After talking about the evidence necessary, his Honour went on to say on p 3:
In many cases these days a life estate will not be sufficient because it does not cover the situation of the plaintiff moving from her own home to retirement village to nursing home to hospital. Sometimes it is possible for a court to alter a life estate to a more flexible non- capital provision, such as was done by Holland J in Crisp v Burns Philp Trustee Co Ltd, 18 December 1979, unreported, but noted in Mason & Handler Probate Service at page 13206. Other times the proper provision is for a fee simple gift, realising that this property will be sold and will be turned over into the appropriate property to maintain the widow for the rest of her life. Care also has to be given by those administering the plaintiff's property to ensure that there is sufficient income being raised after tax that will provide for maintenance levies and the other payments that have to be made by the widow.

[62] More recently the Court of Appeal on a number of occasions has referred to this problem. In Golosky & Anor v Golosky, 5 October 1993, unreported, Kirby P at p 16 summarised the proper provision for widows (and thus the plaintiff in these proceedings) in the following terms -In testing the Master's decision it is appropriate to keep in mind the principles which governed the approach which he was obliged to take to the widow's application under the Act. Relevantly, these included:

4a)

Proper respect was to be paid for the right of testamentary disposition which is the fundamental premise upon which the provisions of the Act are based. That premise requires the Court, out of respect for the continuing right of testamentary disposition, to limit its disturbance of the testator's will to that which is necessary to achieve the purposes of the Act, and not more. See The Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9 , 19; White v Barron & Anor , above, 458; Hunter , above, 576. The purpose of the jurisdiction is not the correction of the hurt feelings of sense of wrong of the competing claimants upon the estate of the testator. The Court is obliged simply to respond to the

4b)

Page 44
application of the eligible person who was a member of the testator's household and to consider whether, as claimed, the provision made by the will is inadequate for that person's proper maintenance and advancement in life. See Heyward v Fisher, Court of Appeal, unreported, 26 April 1985; (1985) NSWJB 81.

3c)

Consideration of other cases must be conducted with circumspection because of the inescapable details of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had been said that in the absence of special circumstances, it will normally be the duty of a testator to ensure that a spouse (or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to. To the extent that the assets available to the deceased will permit such a course, it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies; see Luciano (above) 69-70. A mere right of residence will usually be an unsatisfactory method of providing for a spouse's accommodation to fulfil the foregoing normal presupposition. This is because a spouse may be compelled by sickness, age, urgent supervening necessity or otherwise, with good reason, to leave the residence. The spouse provided and will then be left without the kind of protection which is normally expected will be provided by a testator who is both wise and just. See Moore v Moore, Court of Appeal, unreported, 16 May 1984, per Hutley JA. Considering what is 'proper' and by inference what is 'improper' as a provision in a will, it is appropriate to take into account all of the circumstances of the case including such matters as the nature and quality of the relationship between the testator and the claimant ; the character and conduct of the claimant; the present and reasonably anticipated future needs of the claimant; the size and nature of the estate and of any relevant dispositions which may have reduced the estate available for distribution according to the will; the nature and relative strengths of the competing claims of testamentary recognition; and any contributions of the claimant to the property or to the welfare of the deceased. See Re Fulop (deceased) (1987) 8 NSWLR 679 (SC); Churton v Christian & Ors (1988) 13 NSWLR 241 (CA) , 252.

2d)

1e)

[63] In talking of the need to provide a house and a sum for contingencies the President is clearly referring to passages in Luciano v Rosenblum (1985) 2 NSWLR 65 and other cases. As was pointed out by the Court of Appeal in Elliott v Elliott , unreported, 29 April 1986, such a type of provision only applies where it can be said there has been a long and happy marriage and a widow has helped build up the estate of the deceased. [64] In Permanent Trustee v Fraser (1995) 36 NSWLR 24 at p 47, Sheller JA had the following to say -Once it is accepted that adequate provision for her proper maintenance and advancement in life required secure accommodation for life as well as a capital sum to meet exigencies, this need is not met by giving her only a life estate in the home unit. Commonly people in the community need to move from their own home into a unit in a retirement village and then into nursing accommodation and then into total care accommodation. See Young J in Christie v Christie (3 December 1986, unreported) at 4. The need can be met if the respondent is given the home unit absolutely. She then has a greater flexibility as well as greater security.

[65] In Salmon v Blackford, 18 February 1997, unreported, the Court of Appeal was dealing with a case where the trial Judge had given a fee simple to the deceased widow. Sheller JA said at p 6:
The principal point according to Mr Gibb was that his Honour failed to take into account that by reason of the widow's advanced years and the probability that her adopted son would be the natural object of her bounty, the effect of the order made was likely to be that the adopted son, whom the deceased had no intention to benefit, would be the beneficiary of half the estate. I have great difficulty in seeing how a submission of this sort has any weight in the circumstances of this case. The matter that this Court must consider is whether the order that his Honour made was in such terms that one could only come to the conclusion that in some way his discretion must have miscarried. It is well established that proper provision is not to be measured solely by the need for maintenance. It should, in the case of this respondent and in the circumstances of this case, free her mind from any reasonable fear of any insufficiency as her age increases and her health and strength fails. I may say in this regard that her life expectancy, according to the tables, was something over eleven years at the time of the hearing. If one comes to the conclusion that for her proper maintenance an order such as the present is appropriate, it seems to me to matter not at all that she has an adopted

Page 45
son of an earlier marriage and that he may be the ultimate beneficiary of her bounty.

[66] This seems to indicate a different approach to that referred to by the High Court in White v Barron. [67] In this case the evidence is clear that if the plaintiff received the house absolutely, he would leave it to his son and not to the deceased's children. However, as was pointed out by Sheller J, this is of little weight. The first defendant, Patricia Donnachie, has clearly established some need. She is estranged from her husband and her job does not provide her with much income. The provision made for the plaintiff was restricted to a right to live in the house provided he was not in another de facto relationship. It did not provide for substituted accommodation and this is not proper provision. [68] If there is one factor that stands out in this case it is that the plaintiff cannot be trusted to safely invest any sum of money. His history shows that he would use any funds for gambling or on alcohol which would be detriment of his health. [69] On other occasions I have referred to the comments by Young J in Bondy v Vavros, unreported 29 August 1988 and also the decision of Powell J in Howarth v Reed unreported 15 April 1991. There His Honour refers to the possibility of a provision not being applied by the person for the purposes intended by the court. At p 43 and 44 His Honour went on to say -While, as will be apparent from what I have earlier written, I am deeply concerned at what I regard as the totally unrealistic approach to the management of their affairs adopted by Mr and Mrs Howarth, which approach, if persisted in, will almost inevitably lead to the benefit of any Order which might be made in Mrs Howarth's favour being dissipated in short order, it seems to me that, while that is a matter which may bear on the form of Order to be made, it is not a matter which ought, without more, to be regarded as disqualifying Mrs Howarth from receiving the benefit of any Order to which she might otherwise be entitled. Nor is this a novel view, for a similar approach is reflected in the following passage in the Judgment of Young J in Bondy v Vavros (29 August 1988 (unreported)):

I should interpose at this point that in one sense it does not matter if I form the view that a plaintiff is a spendthrift. If a person is entitled to an order, what they do with the money that they receive is their business and it is none of my affair if I very much fear that the money may be wasted on wine, women and song in a short period of time. I have deliberately used that expression to make it clear that I am not referring at the moment to the facts of this particular case. On the other hand, when one is considering what a wise and just testator would have done, if one can see that a plaintiff is a spendthrift and the testator has arranged his will in such a way as to limit the funds flowing to the plaintiff, then one may very well come to the conclusion that the plaintiff has failed to establish that there has been any breach of moral duty.

The question, then, is what is the form of order which ought now to be made?

[70] In my view it would be quite inappropriate to allow the plaintiff to have the balance of the funds from the estate after payment of legal costs as I am doubtful that he would secure proper accommodation if he was left to him. It seems to me that the offer, which has been made by the defendants, which has the support of the defendants' brothers, is a sensible way to resolve the present difficulties. At this stage it would be appropriate for the executors to borrow funds to pay the legal fees and undertake the repayment of the loan over a period of years. Provision can be made in any order for there to be a right to substitute other accommodation if it transpired that the accommodation was, in fact, unsuitable for the plaintiff and he needed nursing care or similar accommodation. [71] David Bell has not put forward any claim that he should not continue to be entitled to have a right of occupation. Accordingly, no provision in this regard should be made in the orders of the Court. [72] Another matter which needs to be considered is some contingency provision for the plaintiff. In the circumstances of this case it is unlikely that it can be provided if the house is retained or there is a change in the plaintiff's accommodation because the estate does not have sufficient funds to allow this to happen. The priority is to give the plaintiff accommodation. However, in the event that at some stage the plaintiff no

Page 46 longer needs accommodation in the house or in substituted accommodation, I think it is appropriate that a small proportion of the available funds be made available to the plaintiff by way of a capital sum. This amount should be 20 percent of any remaining fund after the sale of the accommodation. [73] I direct the parties to bring in short minutes of order to reflect these orders and I will hear any argument as to costs. Order Orders accordingly Counsel for the plaintiff: Mr M Gorrick Counsel for the defendants: Mr J S Drummond Solicitors for the plaintiff: The Legal Aid Commission of NSW Solicitors for the defendants: Beazley Singleton

Page 47

Page 48 6 of 10 DOCUMENTS: CaseBase Cases

Curtain v Curtain
[2005] NSWSC 35; BC200500374 Court: NSWSC Judges: Palmer J Judgment Date: 31/1/2005

Catchwords & Digest

Succession -- Family provision -- Widows -- Moral obligation Application for family provision by elderly widow of deceased. Claimed inadequate provision. Need for accommodation. Whether applicant entitled to whole of estate. Held: Application granted. Applicant entitled to life interest only. Journal articles referring to this case Article Name Hutley's Australian Wills Precedents 7ed 2009 (book) Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations (2003) 214 CLR 169; (2003) 196 ALR 65; (2003) 77 ALJR 734; Applied Barns v Barns (2003) 24(5) Leg Rep 2; [2003] HCA 9; BC200300694 [2002] NSWCA 47; Cited Marshall v Carruthers BC200200589 Applied Luciano v Rosenblum (1985) 2 NSWLR 65 Legislation considered by this case Legislation Name & Jurisdiction Family Provision Act 1982 (NSW)

Citations ISBN: 9780409323719

Signal

Court

Date

Signal

HCA

7/3/2003

NSWCA NSWSC

22/2/2002 24/7/1985

Provisions s7

Page 49

Page 50

7 of 10 DOCUMENTS: Unreported Judgments NSW 40 Paragraphs

Re Estate of CURTAIN; CURTAIN v CURTAIN - BC200500374

Supreme Court of New South Wales -- Equity Division Palmer J 2975/04 31 January 2005 Curtain v Curtain and Anor -- Estate DDB Curtain [2005] NSWSC 35
FAMILY PROVISION ACT -- Claimant a widow of eighty-six years of age -- insufficient provision for her security of accommodation -- whether claimant should have whole estate absolutely or life interest. (NSW) Family Provision Act 1982 s 7

Palmer J.
[1] The Plaintiff, Mrs Curtain, seeks an order under s 7 of the Family Provision Act 1982 (NSW) for further provision out of the estate of her late husband, David Donald Bruce Curtain, who died on 21 July 2003 leaving a will dated 16 February 1988. On 27 February 2004 the probate of that will was granted to the First Defendant. [2] The First Defendant and the Second Defendant, Mrs Dougall, are the deceased's adopted children. For the sake of convenience and intelligible reference, I will refer to the Plaintiff as May, to the First Defendant as John, and to the Second Defendant as Barbara. I mean no disrespect by those abbreviated references. [3] The deceased's last will provides that, after payment of the deceased's debts and testamentary expenses, his estate is to be divided equally between May, John and Barbara. [4] In the alternative to relief claimed under the Family Provision Act, May seeks by her Summons a declaration that the assets of the deceased's estate are held on trust for her alone. The trust is said to arise from an alleged agreement made between the deceased and May in about September 1981, to the effect that each of them would make a will leaving everything to the other if the other survived. The agreement also was to the effect that if one or other of them benefited from the agreement by taking the estate of the other, the survivor would then, in turn, make a will ensuring that half of the survivor's estate went to the survivor's side of the family, if I can put it that way, and the other half went to the deceased's side of the family. That agreement is evidenced by the making of mutual wills in those terms in September 1981. [5] The deceased, however, made a new will on 16 February 1988, which is the will of which probate has now been granted. May says that she never became aware of the making of that new will. I will return to the question of the alleged agreement for mutual wills and the issues arising therefrom after I have recited the facts relevant to the application by May for further provision for her pursuant to the provisions of the

Page 51 Family Provision Act. [6] Those facts are really not in dispute. They are helpfully summarised in Mr Sharpe's written submissions, from which I will quote freely. [7] May was born on 16 December 1918, so that she is now 86 years old. May is in good health for her age, although she suffers somewhat from osteoporosis and vertigo. However, those conditions are said to be manageable. She has a significant hearing disability, but she was still able to hear and understand questions which were asked of her during cross examination. To my perception, May is mentally alert and active. [8] Prior to their marriage in 1978, May was the sister-in-law of the deceased. May divorced the deceased's brother, and the deceased's first wife, Hazel, subsequently died. The deceased had adopted two children in about 1951. The deceased was their uncle. Those two children are the First and Second Defendants, John and Barbara. [9] Barbara was born on 1 June 1947 so that she is now 57 years of age. John was born on 3 May 1951. He is now 53. May has three grown-up children from her first marriage, Lynette Burns, Margaret McGlede and David Curtain. There were no children of the marriage between the deceased and May. [10] Prior to their marriage, the deceased sold a house which he owned at Castle Hill and bought a property at 40 Lakin St, Bateau Bay. The purchase was completed apparently in February 1978 and he became and remained sole registered proprietor of the property. May owned a house at Thornleigh and in September 1978 she sold that property. She agrees that her share of the proceeds of sale of her home at Thornleigh were not directly applied to the purchase of the Bateau Bay home in which she resided with the deceased. However, she says, and there does not seem to be any dispute about this, that extensive renovations were carried out to the Bateau Bay premises and those renovations were paid for equally by herself, out of the proceeds of the sale of her Thornleigh home, and by the deceased. [11] The evidence establishes that May and the deceased generally shared the expenses of maintaining the home and their general living expenses. They went on trips and holidays, each contributing equally to the expenses. It is not in contest that throughout their marriage May did all of the housework, cooking and cleaning and the deceased looked after the maintenance of the property. Both the deceased and May received pensions and those pensions were placed in a joint account. [12] Again, there is no dispute that May and the deceased had a good marriage. It seems that they were a close and supportive couple and the evidence suggests that, particularly in the last years of the deceased's life when his health began to fail, he was particularly dependent upon May. This was especially so when the deceased developed Alzheimer's disease and dementia. I accept that May undertook the responsibility of looking after the deceased and that this created a considerable stress and strain on her. In the final stage of the deceased's life his condition had deteriorated to the point that he had to be admitted to a nursing home. There he was visited frequently by May. [13] I should say something briefly about the relationship between the deceased and John and Barbara. It seems that the relationship between the deceased and John was a particularly close and supportive one. John has not married and he has no dependants. The evidence is uncontradicted that he was of great help to his father, particularly in his father's declining years. I am confident that there was a warm and supportive relationship. [14] Barbara moved to Queensland some considerable time ago so that it has been difficult for her to maintain close physical contact with her father. I think that it was some 35 years ago that she went to live in Queensland. Nevertheless, I am satisfied that Barbara remained as close to her father as circumstances reasonably permitted. She was able to see him when she visited every couple of years and she says that she spoke to him regularly by telephone. I will return shortly to the other personal and financial circumstances of each of John and Barbara. [15] I turn now to the estate and the circumstances and needs of May. There is no difference between the parties as to the present position of the estate and what is distributable therefrom. The estate presently comprises the following assets: the house at Bateau Bay which is valued at $475,000, a term deposit which

Page 52 is in the sum of $15,800 approximately, a further sum on deposit at the bank of $2,400, another deposit in the Commonwealth Bank of $9,000 and an amount held in a solicitor's trust account in the sum of $4,500, approximately $506,000 in total. If the costs of both sides to the proceedings are to be paid out of the estate, there will then be deducted from that sum a total of about $65,000 so that the total value of the estate which would be available for distribution after payment of legal expenses would be some $440,000. [16] The evidence of May as to her living expenses is uncontested. Her assets are modest. She values her furniture and household effects at $10,000 and she has $38,500 on deposit in various bank accounts in her own name. May's only income is a pension of some $225 per week. Her weekly expenses, likewise, are modest and she agrees that her pension is sufficient to cover them. She has no significant liabilities. As I have said, her health seems to be very good for her age and there is no apparent need for the provision of any substantial sum to cover medical bills. [17] The assets, liability and financial position of John and Barbara are as follows. John is presently employed as a property officer with the Commonwealth Bank. His salary is approximately $77,000 a year. As I have said, John has no dependants. He owns a house which is valued at $380,000 and has a significant interest in superannuation. That, together with other assets, brings the value of his total assets to some $628,000. He has liabilities of $29,000. John admits that he does not have any pressing need for further provision out of the estate of the deceased to provide for his living expenses. Indeed, it may fairly be said that John's position financially is quite comfortable. [18] Barbara is a widow. She has a half-interest in a property at Tugun in Queensland which is said to have a value of $380,000. She has a term deposit in the sum of $50,000, a modest amount of superannuation, and a rather ancient motor vehicle. [19] Barbara is presently employed as a sales assistant and she agrees that her income barely, but adequately, covers her living expenses. However, she does have some prospective medical problem which leads her to believe that she will be able to continue working only for another five years or so. She says that her property needs some maintenance and upgrading and she anticipates further that her problem with arthritis will increase and that she will find difficulty in continuing to work for an extended period. [20] While Barbara's financial position is currently adequate for her needs, it can be seen that her health generally is such that she may well require some assistance financially as she gets older and is less able to provide for her living expenses out of remuneration from employment. [21] It can be seen that the estate really comprises the Bateau Bay residential property. It is conceded that that property will have to be sold in order to meet the expenses of these proceedings should those expenses come out of the estate as normally they would. [22] The real issue is whether and to what extent May requires further provision out of the estate to secure her accommodation. There is no contention between the parties that the applicable principle is expressed in Luciano v Rosenblum [1985] 2 NSWLR 65, at 69. There have been various qualifications to the principle expressed in that passage: see, for example, the discussion in Marshall v Carruthers [2002] NSWCA 47. But in the particular circumstances of this case, I think that the general principle discussed in Luciano v Rosemblum is applicable. [23] That principle may be summarised for present purposes, as follows. In a case such as the present where the deceased and May were married for approximately 25 years, the marriage was a good, close and supportive one, and one in which May contributed very significantly financially to the joint assets, it can be said that the deceased owed a duty to May to ensure that she was secure in her home after his death and that he had a duty to ensure that she had an income sufficient to permit her to live in the style to which she had become accustomed. [24] Also, he had a duty to provide May with a fund to enable her to meet any unforeseen contingencies. I do not think that duty was very much called into play so far as May's income was concerned, because her pension provided her with sufficient to live upon. However, the duty was unquestionably incumbent upon the deceased to provide May with security in her home.

Page 53 [25] Bearing in mind that the terms of the deceased's will left only a third of the deceased's assets to May, it was, of course, necessary that the Bateau Bay home would be sold if the provisions of the will were to be carried out. There is really no dispute -- and I think that Mr Quickenden fairly conceded this in his submissions -- that simply to leave a third of his estate to May did not adequately provide for May's secure accommodation for the rest of her life. As I have said, I think Mr Quickenden has conceded that, in this regard, the deceased failed in his duty. [26] There should be, therefore, some further provision from the estate of the deceased to provide a secure home for May for the rest of her life. This is where the parties part company. The Plaintiff says that, in order to have a secure home for the rest of her life, she should have the whole of the estate. The Defendants say that a sum of $200,000 out of the estate would be sufficient for that purpose. The Plaintiff says that she should have the whole of the estate because that reflects the agreement between the parties which produced the mutual wills in 1981 and, secondly, because that is what she needs in order to attain security in her accommodation. [27] The Defendants say that $200,000 out of the estate would be sufficient to provide for May's accommodation for the rest of her life. There has been no evidence led as to what it would cost to secure the type of accommodation which May would wish and which would be suitable for her purposes. Clearly, May would wish to live in the region of Bateau Bay where one of her daughters resides. She is close to that daughter and, for obvious reasons, she would not wish to move further away. Clearly, also, May does not wish to move into a retirement village at the present time or to go into a nursing home. Her medical condition certainly does not dictate that at the moment and from what I can gather, that would be a most unwelcome and unnecessary move if it were forced upon May by financial circumstances. I do not think that such a move should be forced upon her. [28] In my opinion, May should be provided with secure accommodation to a standard which is at least commensurate with that which she is presently enjoying while residing at Bateau Bay. May has said that she has looked at some properties or investigated the possibility of properties in her region and she would be content with a two-bedroom villa or unit. As I say, there is no evidence as to the current price of such accommodation, but she says that she thinks that between $300,000 and $400,000 would be necessary to purchase such a unit or villa. There has been no evidence, as I have said, led from the Defendants as to the cost of such a property. [29] The essential question is whether May should have the whole of the estate in order to permit her to live in the Bateau Bay property, if she so desires, for as long as she wishes, or else to sell that property and apply the total proceeds to the cost of alternative accommodation. It seems to me, on balance, that the time will come, sooner if not later, that May will wish to sell the Bateau Bay property and move to a property which does not require as much maintenance. In other words, she will need to move to a smaller property such as a villa or home unit, as she contemplates. I do not think that May should be left in a state of anxiety as to whether she would be able to afford such accommodation when the time arises for its acquisition. I think that the deceased owed her a duty to provide securely and comfortably for her accommodation. That essentially means that the value of the Bateau Bay property should be set aside to provide for May's accommodation for the rest of her life. [30] I do not think, however, that the deceased owed a duty to May to do more than provide for her secure accommodation, bearing in mind that her living expenses and other needs are seemingly adequately provided for by her income. When I say that he had a duty to do no more, I mean by leaving the whole of his estate to her absolutely. It seems to me that the deceased should have properly borne in mind, in making his testamentary disposition, his two children, particularly Barbara, whose earning capacity in the future is uncertain by reason of her medical condition. [31] It seems to me that the deceased's duty to May is properly reflected by providing for her a life estate in a sum which presently reflects the net value of the estate or approximately the net value of the estate, so that she may, during her lifetime, apply that sum towards securing her accommodation, with any surplus being left to provide an additional income for her for her life in order to cover contingencies which may arise in the future for medical expenses and the like.

Page 54 [32] I do not think that John and Barbara should be deprived entirely of any interest in the estate. It seems to me that, after providing for a sum to be held on trust for May for her life to provide for her accommodation and some surplus income, the remainder should be then divided between May and the Defendants. That would, in effect, secure the original agreement between the parties which was reflected in their mutual wills made in 1981. It will be recalled that that agreement provided that the survivor of the two was to have the benefit of the estate for his or her life but was to provide in his or her will for half of the estate to go to the deceased's children and the other half to go to the survivor's children. Subject to the question of whether there is a trust which has attached to the assets of the deceased during his lifetime, I would consider that there should be further provision from the deceased's estate by the establishment of a trust in the sum of $400,000 to be applied for the provision to May of such accommodation as she desires during her lifetime, any surplus after the acquisition of such accommodation to be invested to provide an income to May for her life. [33] The sum of $400,000 in effect represents, as I have said, the net value of the estate after provision for legal costs. Aafter May's death the estate should devolve as to one-half to the Defendants and one-half according to the disposition in May's will. [34] The actual terms in which that further provision should be made will require some refinement and elaboration and I will return to it. As I have said, that would be the provision out of the estate which I would think appropriate, subject to the question whether the assets in estate are presently subject to a trust arising by reason of the alleged agreement for mutual wills. [35] I am prepared to accept that the deceased and May entered into an agreement to make wills in the terms which are reflected in the two wills which they executed in September 1981. I am prepared to accept that the terms of the agreement included an implicit term that neither party would vary or revoke the terms of his or her will without the consent of the other. I am prepared to accept an agreement in those terms because, really, no evidence about the agreement has been led other than by May and there has been no evidence led in opposition to the evidence which May adduces. Neither has she been extensively cross examined upon the making of the agreement. The making of such an agreement is inherently probable by reason of the fact that both the deceased and May actually implemented it by executing wills in the terms in which they did in September 1981 [36] However it seems to me that May faces an insuperable legal difficulty in having a trust over the deceased's assets declared as a result of the agreement which the parties reached. That difficulty arises by reason of the decision of the High Court in Barns v Barns (2003) 214 CLR 169. That case held that a deceased's promise to make a particular testamentary disposition is always subject to the potential operation of an order under s 7 of the Family Provision Act, so that a deceased's assets at the time of death always form part of the estate for the purposes of the Family Provision Act. [37] It was pointed out by the Chief Justice at p 183 that no agreement for the disposition of one's estate by will can really give rise to a trust during the lifetime of the promisor such as to remove all assets from the operation of the Family Provision Act. At para 29 the Chief Justice said:
In argument in the present case, an attempt was made to demonstrate that the effect of the deed and the mutual wills was that, upon his death, the deceased was not the beneficial owner of any property; for that reason there was no estate of the deceased within the meaning of the Act; and therefore the Act was incapable of having any effect. That argument, which appeared in some respects to confuse the position of the deceased with that of the second respondent as survivor, fails. The relevant principles are set out in the judgment of Dixon J in Birmingham v Renfrew (1937) 57 CLR 666 at 688-689. He spoke of the doctrines of equity affecting the conscience of the survivor in a case of mutual wills. They give rise to what he called a floating obligation, suspended during the lifetime of the survivor, which descends upon the assets of the survivor at the death of the survivor and then crystallizes into a trust (see also In re Dale, decd [1994] Ch 31 at 37 per Morritt J; and compare Bigg v Queensland Trustees Ltd [1990] 2 Qd R 11). This may have been what the solicitors had in mind when referring to a course of action that would protect the estate of the survivor from a claim under the Act. But we are presently concerned with the estate of the deceased; the first to die.

At para 33, p 184, the Chief Justice said:

Page 55

Because the [Family Provision] Act imposed a restriction on freedom of testamentary disposition, a promise to make a testamentary disposition was subject to the potential operation of that legislative restriction. The effect of the legislation could have been avoided by a disposition inter vivos so that the deceased died with no estate; that is inherent in the scheme of the legislation. But the effect of the legislative restriction on freedom of testamentary disposition cannot be avoided by a promise to make a certain disposition.

[38] Even if the agreement alleged between the parties in the present case had been made in the terms alleged by May, that agreement would not have taken the assets of the deceased out of his beneficial ownership during his own lifetime, at least so far as the operation of the Family Provision Act is concerned, for the reasons given by the Chief Judge at p 183 of the judgment. Upon the death of the deceased the Act immediately applied to the assets which he then had. [39] For those reasons, the existence of an agreement between May and the Plaintiff in the terms alleged does not override and cannot defeat the operation of the provisions of the Family Provision Act. Accordingly, I must look at the question of further provision under s 7, taking into account all of the assets presently listed as the assets in the deceased's estate, that is, primarily the Bateau Bay property which is in his name. For those reasons it seems to me that the disposition of the property of the deceased, in the present case, is to be governed by the Family Provision Act and by those provisions alone. [40] I think that further provision for May out of the estate should be made in accordance with the terms which I have earlier suggested. I will stand the matter over for a short time to enable the parties to bring in Short Minutes of Order reflecting the orders outlined. Order Plaintiff to have life interest in the assets of the estate. Counsel for the plaintiff: B Sharpe Counsel for the defendants: R E Quickenden Solicitors for the plaintiff: Gary Cleary & Associates Solicitors for the defendants: Peter Cornock & Associates

Page 56

Page 57 8 of 10 DOCUMENTS: CaseBase Cases

Stevens v McGrath and Kane

[2004] QSC 138; BC200402547 Court: QSC Judges: Cullinane J Judgment Date: 7/5/2004

Catchwords & Digest

Succession -- Wills and codicils -- Interpretation of will -- Right of residence Claim made for trespass to land by executrix. Whether interest conferred on first defendant by deceased's will grants a life interest or personal right of residence. First defendant left matrimonial residence to live in nursing home. Executrix took possession. Whether executrix liable for trespass claim by first defendant. Held: Declaration that first defendant has personal right to reside in former matrimonial home but has no interest in said land. Partnerships and joint ventures -- Partnerships -- Dissolution -- Death of partner Whether real property held by deceased and first defendant subsisted as partnership property. Whether partnership subsisted between partners. Absence of formal partnership agreement. Whether acquisition of property more consistent with property being jointly owned. Absence of any external sign that partnership brought to end. Held: Real property in question held to be partnership property. Where property is purchased with money belonging to a partnership it is deemed to be partnership property. Cases referring to this case Annotations: All CasesSort by: Judgment Date (Latest First) Annotation Case Name Citations (2009) 3 ASTLR 369; Cited Whitington v Whitington [2009] SASC 142; BC200904219 Journal articles referring to this case Article Name Construction of Wills in Australia 2007 (book) Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations Cited Will of Mayer, Re [1995] 2 Qd R 150

Court SASC

Date 21/5/20 09

Signal

Citations ISBN: 9780409320954

Signal

Court QSC

Date 19/10/1994

Signal

Page 58 Considered Cited Cited Whiteley Muir & Zwanenberg Ltd v Kerr Butler v Madden Davies v Games (1966) 39 ALJR 505 (1941) 41 SR (NSW) 245; (1941) 58 WN (NSW) 187 (1879) 12 Ch D 813 HCA NSWSC EWHCC h 24/3/1966 20/5/1941 15/7/1879

Legislation considered by this case Legislation Name & Jurisdiction Partnership Act 1891 (Qld)

Provisions s 24, s 25(b), s 35(1)(b)

Page 59

Page 60

9 of 10 DOCUMENTS: Unreported Judgments Qld 80 Paragraphs

STEVENS (in her capacity as one of the executors and trustees of the Will of the late McGRATH) v MCGRATH (by her litigation guardian KANE) - BC200402547
Supreme Court of Queensland -- Trial Division Cullinane J S 92 of 2000 22, 23 April, 7 May 2004 Stevens v McGrath and Kane [2004] QSC 138
SUCCESSION -- PARTNERSHIP DISSOLUTION UPON DEATH OF PARTNER -- whether real property held by deceased and first defendant subsisted as partnership property -- whether partnership subsisted between partners -- where absence of formal partnership agreement. SUCCESSION -- INTERPRETATION OF A WILL -- whether interest conferred on first defendant by deceased's will granted a life interest or a mere personal right of residence -- where first defendant left matrimonial residence to live in nursing home -- where executrix took possession -- whether executrix liable for trespass claim by first defendant.

Cullinane J.
[1] These proceedings raise two issues. [2] The first is whether certain real property situated at Kenilworth St, Mackay on which are constructed some flats and which was held by the deceased, Francis Gerald McGrath and the first defendant as joint tenants is the property of a partnership which subsisted between them. [3] The second is whether the interest conferred on the first defendant by the deceased's will of 25 June 1999 in a dwelling situated at Donaldson St, Mackay grants her a life interest therein or merely a personal right of residence in the dwelling. [4] The action has been brought by an executrix of the deceased's will (a daughter of the deceased by an earlier marriage) against the widow and the other executor (a son of the first defendant by a previous marriage). [5] The deceased and the first defendant were married in about 1977. The deceased died on 11 July 1999. [6] Each had been married before and had children of such earlier marriage. [7] The first defendant is, I was told, incapable of giving evidence because of her health.

Page 61 [8] Most of the evidence given at the trial was documentary and there was very little dispute about relevant facts. Rather the issue was the appropriate conclusions to be drawn from the material. Some reconstruction of financial dealings has been attempted by the defendants in the form of Ex 5. Not all of the relevant documentary material, at least so far as bank statements are concerned, is available but some of the primary documentation is. [9] For some years prior to 1986 the parties had lived in a house in Brisbane owned by them as joint tenants. In 1986 they purchased a motel at Buderim as tenants in common. It is common ground that they conducted a business in relation to the motel in partnership until about 1992 and that the motel was a partnership asset. From 1986 to 1989 the motel was conducted by the parties themselves and from 1989 until 1992 the motel was rented to a company controlled by a son of the first defendant. For some five or six months prior to the sale of the motel the parties again personally conducted the motel business. [10] There was no formal partnership agreement. [11] The motel was sold pursuant to a contract of 20 November 1992 and the sale was completed on 18 December 1992. [12] It appears a deposit of some $13,700 was paid. There is a letter from solicitors acting for the parties dated 23 December 1992 which relates that a deposit (less agent's commission) of $13,700 was paid into their account with the Bank of Queensland. Nobody can, it seems, trace where this payment was made to, at least from the bank statements which are available. [13] The balance of the purchase price, some $138,000 was paid into an account held jointly by the parties. It is common ground that this bank account was at the time the moneys were paid, a partnership account. [14] It is desirable if I say something about the various accounts which the parties held jointly over the period which is relevant to this action. [15] During the period that the parties personally conducted the motel business, they operated an account 10-095197. All of the accounts with the Bank of Queensland bore the number 095197 and are distinguished by the preceding two figures. I will refer to each of the accounts by those first two figures. [16] During the period the motel was leased they operated account number 91. There was in fact some degree of overlapping between 11 and 91 and the periods just mentioned but each broadly covers the period to which I have referred. [17] 91 is the account from which the moneys said to be partnership moneys used to purchase the flats were withdrawn. Further moneys were borrowed from the bank. [18] 11 was an account opened by the parties when the flats were purchased and 80 was a loan account opened in 1995 when there was some refinancing of the parties borrowings for the flats. [19] Whilst it is accepted that at the time the motel was sold account number 91 was a partnership account, there is some dispute as to its character thereafter and particularly at the time of the purchase of the flats at Kenilworth St, Mackay. [20] In October 1993 the parties purchased the flats as joint tenants. This property was purchased pursuant to a contract dated 11 October 1993 for the sum of $225,000. [21] The sale was completed on 4 November 1993. [22] At the time of purchasing the flats, another account, as has already been mentioned, was opened in the joint names of the parties. [23] Of the moneys that were used for the purchase of the flats the sum of $100,000 was withdrawn from 91 on 1 November 1993 and deposited to account 11. On 4 October 1993 some $15,000 was withdrawn from 91 and paid by way of deposit and on 1 November 1993 $6,500 was paid to solicitors. This sum represented an amount payable in respect of stamp duty and outlays with a balance of $2,355 being paid from account 91 to those solicitors on 23 November 1993.

Page 62 [24] The balance of the moneys was obtained from the Queensland Bank in the form of a 90 day commercial bill and this sum was credited to account 11on 5 November 1993. [25] A series of 90 day commercial bills were debited and credited to that account between that time and November 1995 when application was made by the parties to the bank for a loan to refinance the bill. The occupations of the parties were described in that application as "retired/property investors". [26] The application was approved and a new account (80) was opened. [27] The evidence shows that rental from the flats was paid into account number 11 and transferred from that account to account 80 from which the payments pursuant to the loan were made. [28] At all times, the parties held separate bank accounts in their individual names. [29] As I have said it was common ground that there had been a partnership agreement between the parties in relation to the motel at Buderim. Initially the parties had conducted the motel business personally and had then derived income from letting the motel by letting it to a company controlled by the first defendant's son before the parties again conducted the business personally prior to its sale. [30] The motel was, it is common ground, a partnership asset. [31] The plaintiff's case is that the flats in Donaldson St, Mackay were purchased from partnership funds (together with other moneys borrowed from the bank) and that the purchase of the flats represented a continuation of the partnership which had subsisted since 1986. [32] There was an admission by the defendants that the parties had acquired the flats with the intention of carrying on the business of renting them. [33] The plaintiffs particularly relied upon s 24 of the Partnership Act 1891 which provides:
Unless the contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of the firm.

[34] For the defendants it was said that s 24 had no application because the parties had informally brought the partnership which had subsisted between them to an end and that moneys which were used to purchase the flats and which came from account 91 were bought by them as co-owners and paid for partly from funds held in that account jointly by them and partly from borrowed funds. [35] In support of this argument the plaintiffs relied upon a number of matters. [36] It was said that given the relationship between the parties the failure to disentangle their affairs and effect a complete distribution of the proceeds of the motel sale should not be regarded as significant. Their retention of a joint account and the proceeds (or a substantial part of the proceeds) of the sale of the motel in such an account is unsurprising. [37] The parties were, it is said, at the time of the sale, of advanced age (the deceased was 82 and the first defendant was 70) and the evidence suggests that the deceased was suffering ill health. It was contended that it is unlikely that the parties would have been undertaking further partnership activities. [38] Between the sale of the motel and the acquisition of the flats account 91 was used to meet some personal debts. Moneys were also being paid out to the parties during this time. It had only been used as a partnership account for a relatively short time. It should not be regarded as being a partnership account at the time that the flats were bought. It was said that the fact that a new account was opened towards the end of the period that the parties owned the motel and at a time when the deceased's health was deteriorating and the first defendant was finding it difficult to cope, and the fact that the account was used frequently to discharge personal debts and that the parties withdrew funds from this account for themselves all suggest that the partnership had been brought to an end informally by the parties. [39] Reliance was also placed by the defendant upon the fact that the partnership had been established to

Page 63 acquire the motel and derive income from it. It should be regarded, so the argument went, as having been dissolved upon the termination of that undertaking, namely the sale of the motel. See s 35(1)(b) of the Partnership Act which provides as follows:

1. 1.
Subject to any agreement between the partners, a partnership is dissolved -...

1. 2. 7

if entered into for a single adventure or undertaking -- by the termination of that adventure or undertaking; --

[40] Alternatively even if the partnership were not to be regarded as dissolved by the sale it is an important matter that the purpose for which the partnership appears to have been formed on the defendant's argument had run its course with such sale. [41] In addition it was said there was a delay of about a year between the sale of the motel and the purchase of the flats during which there was no activity which could be characterised as the carrying on of a partnership business. [42] There were some unequal contributions made by the parties to account 91. The evidence shows that a little over $10,000 was paid by the deceased and $5,000 by the first defendant shortly before the acquisition of the flats which, it is said, is inconsistent with an equal partnership of the kind alleged. [43] The source of the funds did not all come from the sale of the motel but as has been said, a substantial amount was borrowed. (Ultimately the defendants did not pursue an argument that if the amounts paid from 91 were partnership funds the borrowing of further moneys precluded the operation of s 24 or had the result that the flats did not become wholly partnership property). [44] It was said to be significant that the flats were purchased as joint tenants and that the parties were described as "retired-property investors" in the application for finance. [45] The absence of any evidence of any reference by the deceased to the fact that he and the first defendant were in partnership was pointed to. This was the case at least prior to certain assertions made in a will in 1997 by the deceased and in a document described as a notification on 3 June 1998 to which I will refer shortly. [46] Finally it was said that the flats were a somewhat improbable partnership asset and their acquisition is more consistent with the property being jointly owned. [47] The plaintiff on the other hand relied upon the absence of any evidence of notification of dissolution of the partnership and particularly the absence of any evidence of any steps being taken to distribute the moneys to the partners individually notwithstanding that each held their own personal accounts. Such payments as were made to them including the discharge of personal debts from 91 were consistent with drawings by partners. [48] In addition the relatively short time, as the plaintiff saw it, between the sale of the motel and the acquisition of the flats was emphasised as was the payment by the parties into 91 of moneys to acquire the flats. These moneys could, it was argued, if there was no partnership subsisting been paid directly by the parties into the new account opened by them. Their payment into account 91 for the purposes of the acquisition of the flats is said to be important. [49] The plaintiff argues that s 25(b) had no application as there was no evidence that the parties had formed a partnership for a single adventure or undertaking and had, in any case, during the currency of the partnership both conducted the motel business personally and let the motel and derive income from its

Page 64 letting. [50] Nor could it be said to be important that personal debts were met between the time of the sale of the motel and the purchase of the flats from account 91. An examination of drawings, it was said, from that account prior to that time show that it had been the practice from time to time to meet non-business debts from it. [51] The acquisition of the flats as joint tenants also cannot be regarded as having any real significance, according to the plaintiff, there being good reason why this might have been done. Reference was made to Higgins and Fletcher "The Law of Partnership in Australia and New Zealand" 5th Edition at p 138 where the authors suggest why partnership land might be held in such a tenure. [52] This is a case in which the issue has to be resolved by reference to such material as is available and in the absence of any evidence from the parties themselves. [53] There are statements made by the deceased in wills and also in a notification to which I have referred. The circumstances in which this document came to be prepared were not before the court. (It is accepted however that there is no evidence to suggest it was brought to the notice of the first defendant.) It might be accepted that this material shows that the deceased claimed that a partnership subsisted between he and the first defendant in relation to the flats but this cannot be determinative of the matter. As Barwick CJ said in Whiteley Muir v Zwanenberg Ltd v Kerr (1966) 39 ALJR 505 at 506:
-- a partnership is a relationship in point of fact between the partners in which they conduct a business in common with a view to profit and that the question of partnership is not to be decided merely by what the parties call each other or by the way in which they referred to the relationship vis a vis one another.

[54] There were some financial records prepared which on their face might be regarded as showing the trading position of a partnership. However Mr Kane who was called as a witness by the defendants and who is a qualified accountant and also a solicitor pointed out that there were features of these that were not consistent with partnership accounts. One reason for this is that they did not purport to show the position of the partners' accounts. [55] Again there is no evidence as to the circumstances in which these were prepared. [56] Nonetheless I think that a consideration of the evidence as a whole favours the plaintiff's contention. [57] There is, in my view, an absence of any external sign that the partnership had been brought to an end. The fact that the bulk of the proceeds of the sale of the motel remained in what had been on any view a partnership account is significant. I think it is also significant that the parties made payments into that account of amounts for the purposes of acquiring the flats. I also think that the relatively short time between the sale of the motel and the purchase of the flats tends to support the plaintiff in the absence of any steps taken to make a distribution to the parties of amounts obtained upon the sale of the motel. [58] I do not think that there is anything about the nature of the expenditures from 91 during the period between the sale of the motel and the purchase of the flats which supports the conclusion that there had been some distribution of the proceeds of sale in the form of an informal winding up of the partnership. Nor do I think that it is a case in which the evidence supports the conclusion that the partnership was entered into for a single adventure or undertaking. I have already referred to the fact that the parties had both conducted the motel themselves and had derived income by letting it. [59] Taken as a whole I think the evidence supports the proposition that the moneys in account 91 which were applied to the purchase of the flats were partnership funds and that s 24 applies. [60] The acquisition of the flats as joint tenants is not something which stands in the way of the conclusion that the flats were acquired as a partnership asset. Where property is purchased with money belonging to a partnership it is deemed to be partnership property and this presumption is not displaced by the fact that the assets are acquired in the name of the partners as joint tenants. See Davies v Gains 12 Ch D 813 and Butler

Page 65 v Madden 1941 SR (NSW) 245. [61] The plaintiff is in my view entitled to the declaration sought. [62] The second issue relates to the interest which the first defendant took under the will of the deceased. [63] Following the death of the deceased on 11 July 1999 the first defendant lived in the dwelling of which the deceased was the sole proprietor. He had acquired it in October 1996. [64] Clause 3 of this will of 25 June 1999 provides as follows:
I GIVE DEVISE AND BEQUEATH my land and dwelling house situated at 125 Donaldson Street, Mackay aforesaid to my Trustees UPON TRUST to permit my dear wife DULCIE MAVIS McGRATH to reside therein free of rent during her lifetime or for so long as she remains my widow, whichever event shall first occur, subject to her paying the rates and insurance on the said property whilst she resides therein; and after the death or remarriage of my said wife such land and dwelling house shall fall into and form part of the rest and residue of my estate.

[65] The first defendant ceased to reside in the house in June 2001 because her health had deteriorated. She went to live in a nursing home. All of her household furniture and effects were removed. The house remained vacant and unoccupied until the plaintiff as executrix took possession on 1 October 2001. [66] A claim is made for trespass to the land upon the basis that the first defendant was entitled to a life interest in it and the claim is quantified by reference to the rental value of the land during this time. [67] This case gives rise to an issue which has arisen surprisingly often. I have been referred to a number of cases. [68] In Re: Exeter (OS 1090 -- 1987 9 March 1988 unreported) MacPherson J dealt with a case in which the testator had provided for his residence to be held on trust for his widow "to reside therein from and after the date of my death subject at all times to the payment by her of all rates, taxes, insurances and other outgoings." On her death it was to be sold or disposed of and the proceeds divided between his children. [69] MacPherson J said in the course of his judgment:
Because the result depends very much on the words used in the context of the will or other instrument it is not really possible to arrive at binding rules of construction based on decided cases. Nevertheless it is a useful starting point to treat a disposition to 'use and enjoy' or 'use and occupy' as suggesting an intention to confer a life interest.

[70] On the other hand His Honour said a direction to a trustee 'to permit my wife to reside' prima facie meant that the wife had a personal right to reside in the house and not a proprietary interest in the land. That was a case in which because of other provisions in the will the Court concluded that a life interest had been conferred. [71] See also Re: The will of Mayer (1995) 2 Qd R 150 where MacKenzie J adopted what MacPherson J said in Exeter. [72] Confining one's attention to the first part of cl 3 it would seem plainly to be a case which fell into the category of a personal right to reside. Of particular importance in this regard is not only the language conferring a right to reside during the first defendant's lifetime or as long as she remained a widow, but the fact that this was made subject to her paying the rates and insurance on the property but only while she resided therein. [73] Of some interest is the remainder of the clause which provides that after the death or remarriage of the widow, such land and dwelling house should fall into the will and form part of the rest and residue of the estate. In Re: Exeter the relevant clause provided that upon the death of the widow, the land was to be sold or disposed of and the proceeds divided. [74] This was the basis of an argument that such a provision was inconsistent with a mere personal right to

Page 66 reside as the granting of such a right does not confer any interest in the property and would not lead to the postponement of the beneficial interest until after the widow's death. Similar remarks might be made in relation to this clause. [75] In the end His Honour in that case did not dispose of this argument because of another clause in the will which had the effect that the widow was entitled in any case to take a life interest. [76] The reference in cl 3 to the land and dwelling falling into the rest and residue of the estate after the death or remarriage of the first defendant might be said to be inconsistent with a purely personal right to reside. [77] The question is how, if this is so, this inconsistency is to be resolved. [78] I think that the clear words of the first part of cl 3 should prevail and that the latter part of the clause should be disregarded as perhaps reflecting a mistaken understanding of the effect of the trust created. That is, I think that the testator has plainly manifested an intention that the first defendant should have a personal right to reside because of the language used in describing that right and because the right was made conditional upon her meeting the outgoings referred to during the time she was resident there. It is difficult to imagine that a life interest would be made subject to such a condition. Order [79] I make the following orders;

1 1.
A declaration that the land described as Lot 63 and 65 on RP 704691 in the County of Carlisle, Parish of Howard, Title Reference 20684211 has, at all material times, been the property of a partnership subsisting between the late Francis Gerald McGrath and the first defendant. A declaration that the said partnership was dissolved upon the death of the deceased and an order that the affairs of the said partnership be wound up and that all necessary inquiries be made and all necessary accounts be taken for such purpose. Liberty to apply

1. 1. 1 1.

A declaration that cl 3 of the will of the deceased, Francis Gerald McGrath dated 25 June 1999 confers upon the first defendant a personal right to reside in the former matrimonial home situated at 125 Donaldson St, Mackay in the State of Queensland and does not confer any interest in the said land upon the first defendant.

[84] I order that the defendants pay the plaintiff's costs of the action to be assessed. Counsel for the plaintiff: Mr Hack Counsel for the defendants: Mr Morzone Solicitors for the plaintiff: Macrossan & Amiet Solicitors for the defendants: Kimballs Lawyers

Page 67

Page 68 10 of 10 DOCUMENTS: CaseBase Cases

Elsegood v Gotts
[2004] VSC 145; BC200402182 Court: VSC Judges: Balmford J Judgment Date: 29/4/2004

Catchwords & Digest

Real property -- Caveats -- Caveatable interests -- Life estates Application for declarations that plaintiff had interest in land and entitled to register caveat and application for injunction restraining defendant from removing plaintiff from land. Plaintiff claimed defendant owner granted plaintiff life interest in land. Plaintiff alleged agreement whereby life interest exchanged for sale of plaintiff's home to defendant's husband. No evidence of written contract. Whether interest in land established on evidence. Whether sale of home amounted to part-performance of agreement. Held: Applications dismissed. Interest in land not established. Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations [1952] VLR 321; Cited Francis v Francis [1952] ALR 573 (1883) 8 App Cas 467; Cited Maddison v Alderson [1881-5] All ER Rep 742 Legislation considered by this case Legislation Name & Jurisdiction Instruments Act 1958 (Vic) Property Law Act 1958 (Vic) Supreme Court (General Civil Procedure) Rules 1996 (Vic) Transfer of Land Act 1958 (Vic)

Court VSC UKHL

Date 11/11/1951 4/6/1883

Signal

Provisions s 126 s 53 r 20.03 s 118, s 89

---- End of Request ---Download Request: Tagged Documents: 71-80 Time Of Request: Friday, October 26, 2012

12:19:31