Dallow, Re [2006] QDC 3

DISTRICT COURT OF QUEENSLAND CITATION: Re:Dallow [2006] QDC 003 PARTIES: Desleigh Raye Dallow (Applicant) v Estate of Violet Rose Sparke (Deceased) (Respondent) FILE NO/S: 4973/02 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 24 th January 2006 DELIVERED AT: Brisbane HEARING DATE: 18 th January 2006 JUDGE: FORDE DCJ ORDER: 1. The application is dismissed. 2. It is ordered that the costs including reserved costs to be assessed on an indemnity basis of the respondents be paid out of the estate. 3. It is further ordered that the costs of the applicant including reserved costs fixed at $20,813.31 be paid out of the estate. CATCHWORDS: TESTATORS FAMILY MAINTENANCE – claim by married daughter – costs – small estate – Succession Act s41 Ellis v Leeder (1951) 82 CLR 645 Freeman v Jaques [2005] QCA 423 Hughes v National Trustees, Executors and Agency Company of Australasia Ltd. [1978-1979] 143 CLR 134 Jackson v Riley (unreported NSW, 24 February 1989) Re:Coventry [1979] 3 All ER 815 at 820 (CA) Re:Hall (1941) QWN 3 Re:Klease (1972) QWN 44 -- 1 of 17 -- 2 Re:McIntyre (1993) 2 Qd R 383 at 388 Singer v Berghouse [1994] 181 CLR 201 White v Barron (1979-1980) 144 CLR 431 COUNSEL: Mr A C Smith for the applicant Mr J F Curran for the respondent SOLICITORS: G R Brown D J Allard Introduction [1] The applicant is Desleigh Raye Dallow. Her mother died on 31 July 2002 and in her will bequeathed the sum of $10,000.00 to the applicant. The applicant seeks an order for the court to increase the amount to be paid to her pursuant to s41 of the Succession Act 1981. The amount sought is $35,000.00. [2] The estate is not a large one. The amount available for distribution is $123,451.85.1 The amount of costs estimated for the hearing which was originally set for three days were: Respondents’ costs: 21.07.05 to conclusion of day one $10,813.00 21.07.05 to conclusion of day two $14,993.00 21.07.05 to conclusion of day three $19,173.00 Applicant’s costs on an indemnity basis for three days: $50,000.00 ------------- $69,173.00 [3] Under the provisions of the will, various bequests amounted to $15,000.00. This figure included the $10,000.00 to the applicant and the sum of $2,500.00 to both of -- 2 of 17 -- 3 her children, Bronwyn and Belinda. The executor Geoffrey John Sparke, the brother of the applicant, and his two children Leigh-Anne Birmingham and Paul Andrew Sparke were to share the balance of the real and personal property after the bequests and the costs of administering the estate. In effect, if the hearing had lasted three days and the bequests distributed and costs paid there would have been some $39,000.00 for distribution to the executor and his two children. The estate had already paid some $13,164.61 for costs and outlays. Proper approach in small estates [4] The parties had attempted to resolve this matter in mediation as part of the Practice Direction in applications of this nature. They were also given time prior to the case proceeding after reference was made to the authority of Re: McIntyre2. Prior to evidence being called the parties were reminded of the principle referred to in Family Provision in Australia and New Zealand by De Groot and Nickel3 . The learned authors make reference to Goff J. in Re:Coventry4. Goff J. stated “applications in small estates should be discouraged, because the costs tend to become wholly disproportionate to the end in view, although, of course that does not mean that an application cannot be made in a small estate nor that when made it should not be duly considered on its merits.” [5] The learned authors De Groot and Nickel also referred to the decision of Cohen J. in Jackson v Riley5 where his honour referred to the obligation of the legal profession to reduce costs as much as possible when the amount in dispute is small. Counsel in the present case did narrow the issues, and the case was able to be heard in one day. 1 Paragraph 2 of the affidavit of David John Allard filed by leave on 18.01.06. 2 (1993) 2 Qd R 383 at 388. 3 para.206 4 [1979] 3 All ER 815 at 820 (CA) 5 unreported NSW, 24 February 1989 -- 3 of 17 -- 4 Cross examination took place of the applicant and the executor only. This cooperation by the parties is a factor to be taken into account on the question of costs. [6] Therefore, the sum to be left to be distributed if costs were to be paid out of the estate will be in the range of $60,000.00. That figure was mentioned to counsel and was not disputed. In other words, absent any interference by the court the executor and his two children will receive some $20,000.00 together with some furniture and jewellery estimated to be valued at $2,070.006 . The executor and his two children as beneficiaries seek to uphold the intention of the deceased as provided for in the will. No reliance was placed upon the part of clause 5 in the will which sought to disinherit the applicant if she challenged the will.7 [7] Relief will be refused in a case involving a small estate if an effective order cannot be made. If there is some estate left after costs and the applicant has a strong case and the beneficiaries were not in a poorer position, an order might be made.8 Two stage approach [8] The relevant provision of the Succession Act provides as follows: “41 Estate of deceased person liable for maintenance (1) If any person (the deceased person) dies whether testate or intestate and in terms of the will or as a result of the intestacy adequate provision is not made from the estate for the proper maintenance and support of the deceased person's spouse, child or dependant, the court may, in its discretion, on application by or on behalf of the said spouse, child or dependant, order that such provision as the court thinks fit shall be made out of the estate of the deceased person for such spouse, child or dependant. (1A) However, the court shall not make an order in respect of a dependant unless it is satisfied, having regard to the extent to which the dependant was being maintained or supported by the deceased person before the deceased person's death, the need of the dependant for the continuance of that maintenance or support 6 Para.2 ibid affidavit of Mr. Allard 7 Ex DRD2 to affidavit of applicant filed 20/12/02. 8 Ellis v Leeder (1951) 82 CLR 645; De Groot and Nickel para 206 p.24 -- 4 of 17 -- 5 and the circumstances of the case, that it is proper that some provision should be made for the dependant.” [9] The High Court has provided some guidance as to the approach to be adopted on this application: “It is clear that, under these provisions, the court is required to carry out a two-stage process. The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased’s estate for the applicant. The first stage has been described as the “jurisdictional question”.9 “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.”10 Applicant’s financial position [10] In her affidavit11 the applicant lists her assets: “Our present financial position is as follows: Income – Barrie and I each receive Centrelink Pensions. I receive a Disability Support Pension of $395.90 per fortnight and Barrie receives a Partner and Carer Allowance of $450.97 per fortnight Assets – Westpac Deeming Account No. 734-050 52-8535 in Barrie’s name with credit balance of $19.90; Commonwealth Bank Streamline Account No. 06 4124 00200889 in Barrie’s name with a credit balance of about $530.00; Queensland Teachers Credit Union Accounts in our joint names – Current Account No. 188768 with credit balance of about $790.00; Term Deposit Account No. 1435692 with credit balance of $20,000.00; Term Deposit Account No. 1465242 with credit balance of $20,000.00; Commonwealth Bank Savings Account No. 76 4124 41928 in my name with credit balance of about $2.00. 9 Singer v Berghouse [1994] 181 CLR 201 at 208-209 10 ibid. p 209-210. That principle has been affirmed in Vigilo v Bostin (2005) 79 ALJR 731 11 filed 31 January 2005 para. 14 -- 5 of 17 -- 6 Liabilities – Commonwealth Mastercard Account in my name with a debit balance of $1,800.00.” [11] The applicant also exhibited a contract for the sale of her former jointly owned home at Brighton. The contract price was $280,000.00. It was not subject to any encumbrance. The purchasers were her daughters Belinda and Bronwyn. The applicant and her husband gifted the house to them in exchange for a tenancy for life on their present abode at Victoria Point which is owned by the children. There was also a payment of $30,000.00 made by the applicant and her husband to pay for improvements on the Brighton property. Their son in law, Brett Peters, was apparently owed $10,000.00 for work done. The nature of the debt will be discussed elsewhere. [12] It should be noted that the contract date for the sale of the Brighton property was 16 February 2004. The present application was filed in December 2002. As at the date of the death of the testatrix, the applicant jointly owned property with her husband and which was valued at $150,000.00 in 2002. Now, she also has access to cash reserves jointly held with her husband of some $40,000.00 ($72,124.00 in 2002) and receives a pension. She was receiving a part pension in 2002 and her husband was working as a taxi driver. They both now have serious health problems which prevent them from working.12 The applicant was not working as at the date of the death of the testatrix. [13] She is 59 years of age. The executor is 61 years old. The executor supplements his income with part time teaching. For the year ended 30 June 2003 he earned some $9,000.00. 12 affidavits of Dr. Ie, Dr. Angel and Dr. Hackney filed 2 February 2005 -- 6 of 17 -- 7 Financial position of Executor and children [14] The assets, income and expenses as follows Executor: “ House – Estimated Value $202500 Contents/Personal Effects – Estimated Value $ 15000 QSuper Accumulation A/c No 019976 $429775 Coles Myer Shares – (653) $ 7083 CBA Cheque a/c $ 34 CBA Streamline a/c $ 7461 1998 Holden Berlina – Estimated Value $ 7500 Total $669303 INCOME: New Start Allowance $ 183.95 pw Coles Meyers Dividend estimate 2.88 pw Total $ 186.63 pw LIVING EXPENSES Food $ 120.00 pw Phones 31.00 pw Internet 10.00 pw Rates 24.50 pw Gas 7.25 pw Electricity 8.00 pw Fuel 12.50 pw Entertainment 70.00 pw Car – Registration/Insurance 19.50 pw House Insurance 13.00 pw Clothes/Shoes 16.00 pw Health/Medicines/glasses 43.00 pw Club Memberships 1.50 pw Sundries – plants fertilizers tools Building equipment mower etc 10.00 pw TOTAL 386.25 pw” 13 “Leigh Anne Donna Weller as of 17-1-06 Assets ½ House $210,000.00 ½ Car $ 23,000.00 1 Car $ 1,500.00 13 Exhibit 4 -- 7 of 17 -- 8 NAB Shares $ 3,000.00 Jewellery $ 4,000.00 Total Bank A/Cs $ 1,251.60 ½ Household Contents $ 2,500.00 Liabilities ½ Homeloan $ 75,265.62 ½ Homeloan $ 62,182.36 ½ Homeloan $ 24,999,47 Mastercard $ 2,944.62 Net Assets $ 68,356-53 Net Monthly Income $ 2,413.26 Share Dividends $ 10.00 $ 2,423.26 Living Expenses + outgoings $ 2,204.00 Monthly Surplus $ 219.26” 14 Paul Sparke Household expenses (with wife Michelle) Monthly Weekly Mortgage 1200 271 Personal Loan 350 79 Rates 140 32 Power 150 34 Telstra 152 34 Child Care 469 106 Motor Vehicle 332 75 Car Parking 66 15 Registration 50 11 Insurance 93 21 Groceries 930 210 Clothing 150 34 Pharmacy/Medical 70 16 Health Insurance 80 18 Sports Lessons – kids 216 49 Sports/Musical equip 50 11 Memberships 80 18 Gifts 150 34 Work/School lunches 221 50 Entertainment/Misc 531 120 Total Expenses 5481 1238 14 Exhibit 5 -- 8 of 17 -- 9 Income – Michelle Working 2 days per week until 31/12/05 then 3 days per week from 1/1/06 Per Annum $34,400 estimated gross Income – Paul 2003/2004 Tax Return No Centrelink Payments Per Annum $44,871 gross Assets Home Last valuation done June 2004 at $280,000. Mortgage $155,000. Car $10,000. Owing $7,000. Dependents 1 Child 8 years old 1 Child 15 months old Medical Expenses IVF in 2003, 2004 Hospitilisation – 1 week in 2003 due to adverse reaction to IVF Hospitilisation in 2003 for miscarriage End of 2003 three months sick leave due to stress Hospitilisation in 2004 at 12 weeks pregnant Confined to bed rest for rest of pregnancy, took maternity leave early Birth of daughter in 2004 Out of pocket medical expenses have exceeded $8,000 each financial year since 2002/03.”15 [15] It is a fair inference that the executor and his children are of modest means with some savings or shares. The executor has a substantial amount of superannuation. Invested at 5%, it would produce a moderate income. He has worked as a teacher on a relief basis for some years. The applicant and her husband are also of moderate means with more substantial savings. It cannot be said that the applicant is in necessitous circumstances as was found in Freeman v Jaques.16 One has to have regard to the overall position as at the death of the testator. 17 The relationship between the applicant and the deceased 15 Exhibit 6 16 [2005] QCA 423 at para.[25] 17 White v Barron (1979-1980) 144 CLR 431 at 441 -- 9 of 17 -- 10 [16] There was a complaint by the applicant that she was forced to leave school early and that her earnings were used to help educate the executor. She also stated in evidence that her mother, the testatrix refused to buy her a bicycle to get to work but that her brother, the executor, had a bicycle. She was required to get married in a second hand dress. The executor gave evidence that his uncle Trevor Sparke contributed one pound each fortnight to his upkeep whilst at college. Other complaints made by the applicant were: a. That her parents contributed $10,000.00 towards improvements to the house owned by the executor at 21 Casius Street, Woodridge. This is not disputed. It was done in 1976. In or about 1978, the testatrix purchased a property at 2 Dawson Street, Woodridge. The testatrix and her husband left this address and moved in with the executor and his then wife Noleen at Casius Street in 1980. From 1980 until her death in 2002, the testatrix lived at Casius Street. Apart from six months when the executor moved elsewhere with his new partner Heather, the testatrix lived with him there. His father lived there until his death in 1984. b. When the executor and his wife separated, Dawson Street was made available to Noleen and their children. They lived there rent free for some 7-8 years. This was, I find of benefit to the executor as it avoided his having to pay maintenance to his family. The executor’s parents held their daughter-in-law in high regard and wanted her and the children to be properly housed. If one allowed $100.00 per week it is a substantial sum over that period of over $36,000.00. However the executor says that Noleen -- 10 of 17 -- 11 was allowed to move in and he agreed to his parents living at Casius Street.18 c. In order to pay out Noleen, the testatrix paid some $23,000.00 to her on behalf of the executor. The latter says it was more like $13,000.00. The fact is that a significant payment was made to Noleen which was of benefit to the executor. [17] The executor contends that during the 22 years that the testatrix resided with him, the visits from the applicant were infrequent. To a large extent that accords with the applicant’s evidence. She said that she visited several times a year since back in Australia and often when the executor was away. She was living at Brighton and her mother at Woodridge. Also, the applicant lived overseas for many years.19 In more recent years and whilst back in Australia, I accept that she would telephone her mother regularly if not daily. In fact, she delivered the eulogy at the funeral. [18] The applicant stated that her mother, the testatrix, promised her that she would get the proceeds of the Dawson Street property. It was sold for a figure of about $46,000.00. 20 The fact is that the will of the testatrix is more definitive of her intentions. There was an attempt to show disentitling conduct of the applicant because of her excessive consumption of alcohol. This was not really established. On a couple of occasions at family gatherings the applicant consumed alcohol to excess. It was suggested that her speech was slurred on the telephone. In any event, it seems that she has not been drinking since 199421 . Her evidence in that respect was not directly contradicted. 18 T66:48-50. 19 1966-1967;1971-1988:T13:40-57. 20 T68:50 21 T21:16 -- 11 of 17 -- 12 [19] The executor asserts that the relationship which the applicant had with the testatrix was not a good one. No reliance is place upon what his mother may have told him to prove the truth of this. It may only be an explanation for why the testatrix made her will in the way she did.22 Overall, I accept the executor’s evidence. He gave his evidence in a frank manner. He was willing to make concessions on occasions which did not necessarily assist his case. Although blunt in his responses, he was direct and not evasive. This in contrast to the applicant. There were certain issues which reflected badly on her credit: a. Whether there was in fact a debt of $10,000.00 owed to her son in law.23 b. The most unconvincing manner in which she gave evidence that she told her mother that her education had been cut short so as to assist the executor in his education.24 c. The assertion that there had been a change in the will of her uncle Trevor Sparke contrary to her interest. It seemed to be an attempt to discredit the testatrix. The wills produced25 do not support her assertion, as the applicant was a beneficiary in each will as was the testatrix. [20] It is open to find, and I do so, that the long periods of separation did not assist to promote the relationship between the applicant and the testatrix. The applicant is an assertive person who on occasions did upset her mother. 26 For example, I accept that she attempted to intermeddle in the administration of Trevor Sparke’s estate which her mother was administering as executrix. I also accept that she did upset 22 Hughes v National Trustees, Executors and Agency Company of Australasia Ltd. [1978-1979] 143 CLR 134 at 138 23 T27:45 to T28:50 24 T33:57 to T34:44 25 Exhibits 2 and 3 26 T70:20 to T71:40 -- 12 of 17 -- 13 her mother, the testatrix, from time to time27 . It was also probably known to the testatrix that the applicant received a bequest from the estate of her uncle George.28 The periods during which the applicant looked after her mother in 1997-98 and 1999-2000 were some eight weeks on each occasion. Relationship between the testatrix and the executor and his children [21] The executor and his family cared for the executrix during the 22 years or so that she resided with them. In her last years, she required more care and St. Luke’s Nursing Service became involved. The executor gave evidence that any aides or alterations required were attended to.29 There appears to be notes in the St. Luke’s file30 and the Logan Private Hospital File31 which refer to the absence of the executor from the home and the need for alterations. These are referred to in the helpful submissions from counsel for the applicant at para.21.32 Even if the executor was away, his children and co-beneficiaries, Leigh Weller and Paul Sparke were available to assist and did assist. [22] Mrs. Weller (aka Sparke) and Mr. Sparke both filed affidavits. Mrs. Weller deposed that she visited the testatrix on a weekly basis and take her shopping and to church. In later years, Mrs. Weller visited on weekends. She would buy items for the testatrix who would reimburse her. She confirms that her brother, Paul, and Heather helped the testatrix when she broke her arm. The testatrix was 83 years old when she died. 27 para. 7 affidavit of Paul Sparke 28 T43:15-44 29 T82:42. 30 Exhibit A 31 Exhibit 7 32 Exhibit D -- 13 of 17 -- 14 [23] Clause 7 of the will purports to forgive any debt owed by the executor to the testatrix. This, I find, is a reference to the expenditure of some $10,000.00 by the executor’s parents for improvements which subsequently they enjoyed at Casius Street. The nature of the relationship between the testatrix and the executor’s children can be contrasted to that of the applicant’s children. There is no evidence of ongoing contact with the latter. Submissions by applicant 33 [24] It is contended34 that the applicant and her husband have suffered a decline in their savings since 2002. This is a matter which would not have been necessarily foreseeable by the testatrix.35 In relation to the former home at Brighton, the fact is that when the testatrix passed away, the applicant had her own home together with her husband with significant cash reserves of $72,124.00. 36 [25] Comment was made 37 that the financial circumstances of the beneficiaries Mrs. Weller and Mr. Paul Sparke has declined. As their position as at the date of death is more relevant on the first stage, this aspect is not relevant at this point. Their position as at the date of death was not significantly different to the applicant’s except that the latter had more cash reserves. [26] The value which has been attributed to the existing and available furniture and jewellery has not been challenged. Therefore, it is difficult to attribute value to these items which adds in any significant way to the amount to be distributed to the beneficiaries. The executor and his children are to share the residuary estate in any event. The executor was cross examined about the jewellery but was not aware of 33 Exhibit 4 34 Exhibit D Para. 3 35 White v Barron op.cit. p441 36 Para. 5 of affidavit of applicant sworn 20.12.02. -- 14 of 17 -- 15 the details of the jewellery which was held by the testatrix as at the date of death. It is suggested that he was evasive. It is more likely that as a son he did not have the same interest in jewellery as the applicant. The latter was unable to provide evidence as to what jewellery was in possession of the testatrix at her death and what may have been given away as suggested by the executor. The matter was complicated by a break and enter with the testatrix unable to provide police with details of what was missing.38 [27] It is submitted that as the executor has benefited by the matters referred to in paragraph 14(a),(b) and (c) above that a basis has been laid for the court to interfere. Other matters referred to in the submissions39 have been dealt with in discussing other matters. Has the applicant discharged the onus of proof to give the court jurisdiction? [28] The Court of Appeal in Freeman v Jacques40 has summarised the approach in this instance: “In my opinion, the appeal must fail. No doubt the appellants would each have found a legacy “advantageous” but to say that falls far short of casting doubt on the learned primary judge’s conclusion that the appellants had not been left by the deceased without adequate provision for their proper maintenance and support. The evidence adduced on behalf of the appellants fell short of establishing a real need for any further provision to be made. As Dodds-Streeton J. said in MacEwan Shaw v Shaw [2003] VSC 5291 of 2002: “If the need is not established, the court has no jurisdiction to make an order, no matter how large the testator’s estate”. [29] In the present case, the applicant is in a worse position. The estate is a small one. A court is more reluctant to interfere especially when it is obvious that costs will take 37 Exhibit D para. 6 38 T57:1-15. 39 Exhibit D 40 op.cit. para 46 per Keane JA with whom the Chief Justice and McPherson JA agreed -- 15 of 17 -- 16 a significant part of the available funds. As was referred to by the applicant’s counsel41 , the learned authors De Groot and Nickel state42 : “It would seem that in the case of small to modest estates, a married daughter would have to show some special need or claim before she could expect some provision at the hands of the court”. [30] In the present case, I am not satisfied that the applicant has established a need quite apart from a special need. The size of the estate, the nature of the relationship with the applicant as distinct from the executor and his children, are all matters which do not favour the applicant. Her ill health has been considered, but in the circumstances no need or special need has been established. The applicant was on a part pension at the time of death of the testatrix, her husband was working and there were substantial cash reserves. In 1979 she received $10,000.00 for a car from her parents. The executor also got a car. Costs [31] Submissions were made in relation to costs. The applicant has not been successful. Although she did not have a strong case, the submissions by the applicant’s counsel show that it was not a hopeless case. As the matter progressed, the costs involved became a more significant issue. Reference has been made earlier to some of the authorities on costs.43 [32] Where there is some moral obligation to provide for a beneficiary, a sympathetic view has been taken on costs44 . In that case, some of the applicant children of the deceased failed in a claim. His Honour held that applications in small estates should be discouraged but in that case he allowed costs out of the estate with the 41 Exhibit 4 para.25 42 op.cit.p.76 43 paras. 3 to 6 hereof 44 Re:Klease (1972) QWN 44 per Hoare J -- 16 of 17 -- 17 costs of the executor to be on a solicitor and own client basis or indemnity costs as they now are known. [33] Evidence was lead that the costs of the applicant including a three day trial would be $50,000.00. The respondents placed evidence before the court that their costs from 24 December 2002 to the conclusion of the first day would be $20,813.31. I propose to allow a similar amount to the applicant for her costs. In Re:Hall 45, Philp J fixed costs in that case of the respondents. Counsel for the respondents did submit that the applicant should pay costs or no order as to costs. However, I have considered those submissions but also the evidence in the case in arriving at a different conclusion. Orders 1. The application is dismissed. 2. It is ordered that the costs including reserved costs to be assessed on an indemnity basis of the respondents be paid out of the estate. 3. It is further ordered that the costs of the applicant including reserved costs fixed at $20,813.31 be paid out of the estate. 45 (1941) QWN 3 -- 17 of 17 --