Macgregor vy HUNTER SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, HANDLEY, SHELLER JJA 8 March 1994, 17 March 1994 [1994] NSWCA 189 John Neven MacGregor died on 23 July 1989 leaving a will dated 13 February 1989. In his will the deceased left his estate (comprised of a house at 6 George Street, Brooklyn with an estimated value $180,000 and $10,180.57 in a bank account) to his wife, Olive MacGregor. It also provided that the respondent, Amelda Florence Hunter, who was his de facto wife from 1965 until the date of his death, was to be allowed to remain in the house during her active life. The respondent applied for relief in the form of an order under the Family Provision Act 1982, and it was common ground that under s6(1) she was an eligible person to do so. It was found that the respondent and the deceased had both purchased a property in about 1966 at 4 George Street, Brooklyn; the property at 6 George Street, Brooklyn had been purchased in about 1967 in the deceased's name alone because of a requirement of the mortgagee. The respondent had contributed to the mortgage payments and shared other household expenses and general expenditure with the deceased. At the date of the hearing, the respondent was an aged pensioner nearly eighty years old and the amenities of the Brooklyn area were insufficient for her needs; she was neither capable of maintaining the Brooklyn property herself, nor did she have the means to purchase a smaller home or home unit. Master Gressier held that whether the respondent had a life estate or a lesser interest in the house, the interest was inadequate to provide for the respondent's proper maintenance and advancement in life. The master weighed up what he saw as the competing claims of the respondent and Mrs MacGregor and, taking into account what the respondent would need as she became older among other things, decided that her proper maintenance required that she be given the house at Brooklyn absolutely in lieu of the provision made for her in the deceased's will. Held: It was amply demonstrated that the respondent was left without adequate provision for her proper maintenance and advancement in life, and Master Gressier's orders did not go beyond an appropriate exercise of his discretion, considering the contributions made by the respondent (s9), her age and the duration of her de facto relationship with the deceased. Mahoney JA I agree with Sheller JA that the appeal should be dismissed. Mrs Bridger, for the appellant, in her oral and written submissions, referred to the merits of Mrs Olive MacGregor, the widow of the deceased. She pressed upon the Court the view that the widow's claim to the estate of the deceased should prevail over that of the respondent Mrs Hunter. There is force in the submissions that she made. However, this Court must determine whether it is proper for it to interfere with what is essentially a discretionary judgment of Master Gressier. The Court, in argument, invited Mrs Bridger to indicate the grounds upon which, in her submission, the Court could and should interfere with such a judgment. I do not think that counsel was able to formulate any ground upon which it would be proper for this Court to set aside the Master's order. The Master accepted that the deceased owed a duty to consider the claims of Mrs MacGregor and Mrs Hunter. This is a case in which the position of each of them was such that further provision could properly have been made for her. But, 2 UNREPORTED JUDGMENTS properly understood, the estate was not sufficient to enable proper provision to be made for both of them. It was therefore necessary for the Master to decide what should be done. See generally Tsivinsky v Tsivinsky (Court of Appeal, 5 December 1991, unreported). In argument, counsel, with the Court, considered the various alternative provisions which the Master might have made. It was, I think, not practicable - at least it was open to the Master so to consider - to divide the estate between the two ladies because, inter alia, that would not effectively provide for Mrs Hunter's main need, namely, accommodation. The choice which the Master made from among the possible provisions was one which it was within his discretion to make. I see no reversible error in what he did. The appellant, Mr MacGregor, was the legal personal representative of the deceased. A legal personal representative may ordinarily expect that his costs will be met from the estate. However, ordinarily where a legal personal representative appeals, the costs of an unsuccessful appeal will not be met from the estate: a legal personal representative who, for the benefit of a beneficiary, brings an appeal should ordinarily protect himself against costs by obtaining an indemnity from the beneficiary: see generally Heyward v Fisher (Court of Appeal, 26 April 1985, unreported). There is, in my opinion, nothing in the present case to warrant an order that the appellant have his costs out of the estate. I would dismiss the appeal with costs. Handley JA I agree with Sheller JA. Sheller JA John Neven MacGregor, a retired stereotyper, died on 23 July 1989 in his late 70's. He left a will dated 13 February 1989 probate of which was duly granted on 11 October 1989 to one of his five children, the appellant Glen Douglas MacGregor. The deceased's estate at his death comprised a house at 6 George Street, Brooklyn which had an estimated value of $180,000 and $10,180.57 in a savings bank account. The deceased was survived by his wife, Olive MacGregor, the mother of his five children, and by the respondent, Almeda Florence Hunter, with whom the deceased had been living in a de facto relationship from 1965 until the date of his death. The deceased's will was handwritten on a printed form. Perhaps not unexpectedly it is not drafted with precision. After provision for the payment of debts, funeral and testamentary expenses and duties the will continues "I GIVE DEVISE AND BEQUEATH unto my wife Olive MacGregor of 7 Duquid Way, Kiama Downs. As at this date (13 Feb 89) my estate consists of: "The deceased then referred to the house at 6 George Street, Brooklyn, furniture and contents and a savings bank account. The handwritten part of the will continues: "T further wish the following in relation to the home of 6 George St,Brooklyn a) It not be sold under a minimum period of five (5) years from the date of my death. b) Ms Almeda Florence Hunter be allowed to continue to reside in the house (6 George St, Brooklyn) during her active life OR until such time as she requires full time medical attention. c) Notwithstanding (a) above the house may NOT be sold whilst Almeda Florence Hunter remains active and enjoys good health." URJ Macgregor v HUNTER (Sheller JA) 3 The respondent applied for an order under s7 of the Family Provision Act 1982 (the Act). Her application was heard by Master Gressier who gave judgment on 7 December 1990. He ordered that in lieu of the provision made for the respondent in the deceased's will she be given the house at 6 George Street, Brooklyn absolutely. No order was made as to her costs. The costs of the appellant on the trustee basis were to be paid out of the estate. The appellant appeals from the Master's order. At the date of his death the respondent was living with the deceased as his wife on a bona fide domestic basis. It was common ground that she was an eligible person in relation to the deceased; s6 (1) of the Act. By a transmission application dated 27 November 1989 the respondent and Mrs MacGregor sought to have themselves registered as life tenant and person entitled in remainder of 6 George Street, Brooklyn. The Master did not regard the deceased's will as operating to create a life interest in the house in favour of the respondent. However he concluded that whether the respondent had a life estate or a lesser interest in the house, the interest was inadequate to provide for her proper maintenance and advancement in life. In reaching that conclusion he set out evidence which was either uncontested or which he accepted. The respondent was at the date of the hearing an aged pensioner aged nearly eighty years. There was medical evidence that she had since 1987 been treated for a number of medical problems including hypertension, bronchitis and depression. In May 1990 she fell and sustained a fractured upper humerus which led to a month in hospital and then a long period of rehabilitation. Her doctor said that on the latest review of her in 1990 she appeared to be coping reasonably well. She was still smoking quite heavily; her blood pressure was under control and she appeared neatly dressed. She had furniture, personal effects and savings of less than $15,000. Her pension was $157.85 a week and her other income was $12 a week. Her food and other ordinary expenses totalled $70 a week and, in addition, she had a weekly lawn mowing service which cost her $15. In her affidavit the respondent described the loneliness and isolation of her life since the deceased's death. The house "now has many unhappy memories for me and the Brooklyn area unfortunately has few amenities for someone of my age living on their own. There are no shopping facilities in Brooklyn and I have to rely on a bus service in to Hornsby for my shopping. It is my desire to be able to purchase a unit preferably in the Brighton le Sands area where I shall be near my daughter and son in law, and a sister and other relatives living in the area." She explained why she would prefer a unit. She said she was not capable of maintaining the Brooklyn property herself and would not have the means to purchase a smaller home or home unit. Her enquires from an estate agent had led to her being informed that a two bedroom ground floor unit in the Brighton area could be purchased for between $140,000 to $170,000. The Master was satisfied that the long relationship between the respondent and the deceased was close and harmonious. They both retired in 1971. The Master accepted the following statement by the respondent; "Upon retirement the deceased and I spent 24 hours of each day together enjoying our home and each other's company. We both worked very hard to pay off our home and to have some savings put aside for whatever our needs may be. During all our years together I have taken some pride in the fact that I took good care of the deceased and felt that I made his life a comfortable and happy one." 4 UNREPORTED JUDGMENTS The Master was also satisfied that the respondent and deceased purchased a property in about 1966 at 4 George Street, Brooklyn; that the property at 6 George Street, Brooklyn was purchased in about 1967 in the deceased's name alone because of a requirement of the mortgagee (Defence Services Corporation); that the respondent contributed to the mortgage payments and shared other household expenses and general expenditure with the deceased; that the deceased used part of his savings to pay off the final $6,000 of the mortgage debt on the house and then said to her: "Well the house is ours now, and so if anything happens to either of us at least we shall have the comfort of the house as security. " The Master was satisfied they did not marry because, in the deceased's words: "T do not want Olive to lose the TPI pension." Mrs MacGregor was a pensioner about to turn 71 years of age. She lived with one of her sons (then unmarried but soon to be married) in rented accommodation at Caringbah. Her income was $575 a fortnight made up of a war widow's pension ($315 a fortnight), superannuation from her former employer ($140 a fortnight) and a Department of Social Security pension ($ 120 a fortnight). She said she had no other assets. When Mrs MacGregor and the deceased separated in 1965 their then joint and several assets were so few that any proceedings between them for orders in relation to property would have been a waste of time and money. The Master was satisfied that after 1965 the deceased maintained a form of relationship with his spouse and with some of his children though the relationships were far from close relationships. Some months before he died the deceased said to Mrs MacGregor "T want the children to get the house eventually but I'm leaving it to you". The Master accepted Mrs MacGregor's evidence that in late April early May 1989 she visited the deceased with two of her children and that on that occasion the deceased spoke at length about his property. Mrs MacGregor recalled the deceased speaking about his will, a copy of which he handed to her son. During these discussions the respondent was present. At no time did she indicate objection to anything that was said. The deceased said words to the effect "Tm letting Alma stay here while she's alive and can take care of herself but I want you to come up and check on Alma." The Master posed the question would a fair and reasonable person in our community say that, in providing in his last will for Mrs MacGregor to have the whole of his estate subject only to the respondent's having limited rights in the house, the deceased failed to make adequate provision for the plaintiff's proper maintenance and advancement in life. In answering this question the Master looked to the twenty four years during which the deceased and the respondent had lived together as man and wife, to the good quality of their relationship over that time, to the contributions which each of them had made to the other by way of sharing of expenses and the contributions which the respondent had made as home maker, to the present age of the respondent, to her need for some choice as to where she might live for the rest of her life, and to the limited size of the estate. The Master also paid regard to the marriage relationship between the deceased and Mrs MacGregor which had subsisted from 1940 to 1965, from which five children had been born, in respect of which there had not been any final financial adjustment and which still prompted some limited contact between the parties over the years and to the war widow's pension of $315 a fortnight which she URJ Macgregor v HUNTER (Sheller JA) 5 received following the deceased's death in consequence of her status as his widow. The only competing claims on the deceased's bounty were those of the respondent and Mrs MacGregor. In his further amended notice of appeal the appellant relied upon grounds which I can summarise as follows: 1. A failure by the Master to give reasons for his conclusions; 2. A failure by the Master properly to consider or give weight to Mrs MacGregor's position as the natural object of testamentary recognition by the deceased or to her needs; 3. A failure by the Master adequately to take into account the smallness of the estate; 4. Error by the Master in finding that the provisions made for the respondent by the deceased were inadequate for her proper maintenance and advancement in life; 5. Error by the Master in concluding that the proper provision for the respondent was absolute ownership of the property. I can say at the outset that, in my opinion, the Master amply demonstrated his reasons for concluding that the respondent was left without adequate provision for her proper maintenance and advancement in life. There is in my opinion no basis for challenging the conclusion that a right to remain in the house in Brooklyn with the inadequate facilities that the respondent described did not meet her reasonable needs. The respondent needed a home unit in the Brighton le Sands area with adequate shopping and transport facilities and close to her immediate family. The Master found that for twenty four years the respondent had shared her life with the deceased and that their relationship was close and harmonious. I have no doubt that the deceased owed a moral duty to provide for the respondent which was not sufficiently met by leaving her a right of residence in the house to the cost of which she had contributed significantly. The only question in my mind is whether by giving the respondent the house absolutely the Master went beyond what was necessary to make adequate provision for the respondent. If so, the order amounted to an erroneous exercise of his discretion under the Act which would call for this Court's interference; see White v Barron (1980) 144 CLR 431 at 443 and 444. The matters which support the argument that the order was generous to the point of error are that an order enabling the appellant trustee to sell the property and invest the proceeds in a home unit to be held for the benefit of the respondent for life and, in case such accommodation proved in the future to be unsatisfactory, to sell and reinvest in more suitable accommodation or apply the income for the benefit of the respondent for the rest of her life would sufficiently meet her needs. Counsel for the appellant referred to the judgment of Mason J (as he then was) in White v Barron at 444. His Honour said that a capital provision should only be awarded to a widow when it appears that this is the fairest means of securing her proper maintenance and pointed out that 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 to the deceased, when the benefit of another kind would have afforded an adequate safeguard to her personally, without leaving her in a position in which she could benefit her relatives from the proceeds of the legacy. 6 UNREPORTED JUDGMENTS I think the appellant's argument has force. But after careful reflection I do not think the order made by the Master went beyond an appropriate exercise of his discretion. S9 (3) of the Act provides that in determining what provision (if any) ought to be made in favour of an eligible person out of a deceased estate the Court may take into consideration any contribution made by the eligible person, whether of a financial nature or not and whether by way of providing services of any kind or in any other manner being a contribution to the acquisition, conservation or improvement of the deceased's property or to the welfare of the deceased, including a contribution as a home maker. The Master clearly took such matters into consideration. The house at Brooklyn was the product of contributions by the deceased and the respondent. At some point and in a context which is not entirely plain the deceased told the respondent "The house is ours now, and so if anything happens to either of us at least we shall have the comfort of the house as security." A provision limited to a life interest in the house or the proceeds of its sale leaves the respondent without that degree of flexibility and independence in arranging her affairs to which her relationship with the deceased up to the date of his death entitled her if his moral duty to her was to be satisfied. The appellant argued that because of the superannuation benefits to which the deceased was entitled Mrs MacGregor had indirectly contributed to the acquisition of the house. I am not sure how this contribution can be identified but at best it is so indirect as to be of no significance. In my opinion, having due regard to the circumstances at the time, it was open to the Master to provide for the respondent by the order he made. Accordingly in my opinion the appeal should be dismissed with costs. Appeal dismissed with costs. Counsel for the Appellant: MT Bridger Instructed by: Baker Ryrie Rickards Titmarsh Counsel for the Respondent: RGL Davies Instructed by: TD Khouri