BURNAGE v STRECKFUSS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL HANDLEY, SHELLER JJA and FITZGERALD AJA 14 October 1998, 14 October 1998 [1998] NSWCA 46 Family Provision Act 1982 — application for provision to be made from deceased estate Sheller JA Jillian Violet Burnage appeals from a decision of Master McLaughlin of 15 April 1998 dismissing with costs her application by summons for an order under s7 of the Family Provision Act 1982 that provision be made for her out of the estate of her mother, Marjorie Violet Elaine Burton-Bradley, who died on 8 November 1994. Mrs Burton-Bradley left a will dated 3 May 1992, probate of which was granted to the executors named in it, Roslyn Streckfuss, Phillip Hoyle and Merrick James Spicer who were the defendants to the summons and are the respondents to this appeal. Mrs Burton-Bradley had six children. The five who survived her were Mrs Streckfuss, who was born in 1943, Mrs Pfeiffer, who was born in 1944, the appellant, who was born in 1948, Mrs Roberts, who was born in 1952 and a daughter known as Sally, who is the wife of the executor, Dr Hoyle. A son, Michael, died during his mother's lifetime in 1985. The deceased's estate was valued for probate purposes at $437,625. The main asset was land at Moorland near Taree valued at $420,000. The Master proceeded on the basis that the net value of the estate was $325,788. By her will the deceased gave the appellant a legacy of $1000 expressed to be "for her kindness and support of me'. She gave the same amount for the same express reason to Mrs Pfeiffer. The residue of her estate she gave to her other three surviving children, Mrs Streckfuss, Mrs Roberts and Sally as tenants-in-common in equal shares. In addition to the appellant's application for provision, the Master heard at the same time applications under the Act for provision out of the estate by Mrs Pfeiffer and three grandchildren of the deceased, the children of the deceased son, Michael. The Master dismissed these two other applications and no appeal has been brought against these orders. The Master found that the appellant had assets totalling $55,493. She is aged fifty. She lives in a house property at 118 Ross Street, Belmont with her former husband, John Cantwell. They were divorced in 1993 but resumed cohabitation in 1994 and that cohabitation has continued. The Ross Street property belonged to the appellant's late second husband, William Raymond Burnage, who died on 28 February 1984. Under Mr Burnage's will the house property was left in trust for the appellant until her death or remarriage. From and after her death or remarriage, whichever first happened, the house property went to the children of the appellant and Mr Burnage, Katherine, who according to the Master was aged nineteen and Louise, who was aged seventeen. Katherine and Louise live at the house with the appellant and Mr Cantwell, or, at least, that was the position as the Master found it to be when he gave his reasons for judgment. 2 UNREPORTED JUDGMENTS In the result the appellant has no right to reside in the house. She and Mr Cantwell live there by favour of the two daughters. The Master described the house as commodious and situated in a much sought-after part of Belmont. Apparently, it is worth something in the order of $400,000. Neither the appellant nor Mr Cantwell are presently employed. Each receives $290 a fortnight unemployment benefit. In addition, the appellant received $100 a week, the rent for a downstairs flat in the Belmont property. Mr Cantwell owns a motor vehicle and will receive $10,000 by way of insurance when he reaches the age of sixty-five. There is apparently no evidence of Mr Cantwell's age but it was agreed at the bar table that he was about the same age as the appellant or perhaps a bit older. He is a qualified accountant who worked as such for eighteen years until 1985. He also worked for several months as an accountant in 1992 and again in 1996. In 1985 he acquired a service station business but that was not financially successful and was disposed of in 1990 or 1991. After Mr Burnage's death, the appellant invested by way of a partnership with a Mr Alan Reid in hotels. Between 1991 and 1993 she received from this partnership $115,000 net after tax. The partnership is currently being wound-up. In her affidavit the appellant suggested that she may have contingent liabilities unquantified following the winding-up of the partnership. During her later evidence an amount of $4000 was said to be owing from the partnership assets to a firm of accountants. The appellant's claim as it was put to the Master was principally directed to the need to find further accommodation equivalent to that presently occupied by the appellant and Mr Cantwell. In dealing with this the Master in his reasons for judgment said: "However, the evidence of Jillian and of her daughters clearly revealed that there is no suggestion that either of her daughters would attempt to dispossess their mother of her accommodation with Mr Cantwell in the Ross Street property. Both Katherine and Louise are content that their mother and Mr Cantwell should remain in that property as long as they wish. Each of Katherine and Louise agreed that in the event that she might decide to acquire a residence of her own she could purchase such a residence using her interest in the Ross Street house as collateral for a mortgage." The Master said there was no suggestion that the total amount of income received by Jillian and her husband was insufficient for their needs. In the course of hearing this appeal we were taken to the evidence of the two daughters, Louise and Katherine. Louise said in cross-examination that she had 0 "immediate" plans to sell the property and she realised the consequences of selling it would be that her mother would have nowhere to live. She also was aware that she could borrow money on the security of her property. The evidence of Katherine, again in cross-examination, was that she had no plans "presently" to dispose of the property. The Master said that some reference had been made to the appellant's health problems. There was no evidence that those health problems were chronic or that she was prevented thereby from seeking or gaining employment. The Master considered that it would be an unnecessary pessimistic view to conclude that neither Jillian nor Mr Cantwell should ever again be able to obtain employment. URJ BURNAGE v STRECKFUSS (Sheller JA) 3 The Master referred to the appellant's evidence that in the 1980s she had expended amounts totalling about $30,000 upon her mother and her mother's house and in addition often sent her mother gifts of cash. The Master observed that the figure of $30,000 was in the appellant's oral evidence considerably increased. In 1991 there was a falling-out between the appellant and her mother. The Master said that that was the culmination of a number of relatively trivial matters. They resulted, however, in the appellant writing to her mother a letter dated 28 April 1992. The Master observed that it was not surprising that after that letter was sent by Jillian to her mother there was no further contact between the two of them. Thereafter, right through the time that the deceased was ill and up to the time of her death, there was no reconciliation. The Master also referred to Dr Hoyle's evidence of a conversation that had taken place shortly after the deceased's death in the course of which the appellant demanded that the estate pay to her the amount of $30,000. Having referred to these matters the Master said that he did not consider that the telephone conversation was in any way determinative of the appellant's claim. He did not consider that her claim would be determined upon matters of credit. The Master said: "Her claim will be determined upon matters which are not controversial, relating to her present and likely future financial and material circumstances". However, the Master was not satisfied that the appellant had demonstrated any need which would support an entitlement to receive from the estate of her mother any benefit greater than that given to her by the will of the deceased. The suggestion that she should receive from the estate an amount sufficient to enable her to purchase a house property could not, in the Master's view, possibly be justified. Accordingly, he dismissed the claim. In the notice of appeal there are set out eight separate grounds, some of which were directed to what was said to be the Master's failure to give proper weight to parts of the appellant's evidence. However, in substance the appeal is put on the basis that the Master erred in concluding that the appellant had not shown a need which would have justified or required, in the circumstances of this case, the making of an order by way of provision under the Family Provision Act. Mr O'Loughlin, who appeared for the respondents, drew our attention to what Has been said particularly by the High Court in Singer v Berghouse (1994) 181 CLR 201 at 212 about the limited circumstances in which an appellate court will interfere to set aside an order made under the Family Provision Act. The majority judgment in Singer v Berghouse refers to the comments made by the President Justice Kirby, as he then was, in Golosky v Golosky (unreported) NSW Court of Appeal 5 October 1993 at 13-14. I am very conscious of what was said by the High Court in considering this appeal. However, with respect to the reasons for judgment of the Master it seems to me that insufficient attention was paid to the insecurity of the appellant's position in so far as her residence and in so far as part of her current income was concerned. It is quite correct to say, as the Master did, that the evidence of the appellant's two young daughters suggests or states that at the present time they have no intention of requiring their mother to vacate the house at Belmont. However, the two daughters are in no way bound to that choice. Furthermore, the evidence of young people, showing a proper and commendable love for their mother, has to be looked at having regard to the future and their future and having regard to the effect of making the mother entirely dependent, perhaps against the 4 UNREPORTED JUDGMENTS interests in the future of one or both of those daughters, upon their goodwill. It seems to me that in those circumstances the adequate provision of a daughter in the position of the appellant, aged as she is about fifty, with a life expectancy extending perhaps for twenty-five or thirty years, would require that she be not left in such a position. The appellant claims that she should be put in a position where sufficient is available to purchase a house, perhaps in the Belmont area, and to that end evidence was led that such a purchase could be made for an amount of $185,000. However, I do not think that an adequate provision for the proper maintenance or advancement of the appellant requires that an order of such an amount be made. Rather, I think that an adequate provision for proper maintenance requires that there should be a legacy out of the estate in favour of the appellant to meet the contingency that the daughters, or one of them, ultimately, requires that she leave the residence which would have the effect not only of her being put out of a home but also of losing part of her current income. What that amount should be is not easy to determine. However, I have come to the conclusion that the appropriate amount of such a legacy would be in the order of $50,000. Such a provision can be made without interfering with the legitimate claims of the beneficiaries named in the will on the deceased's bounty. It was suggested, on behalf of the estate, that, bearing in mind, according to the affidavit of Mr Spicer of 7 October 1998, that the substantial asset of the estate is real estate which is subject to lease and would, in order to meet a legacy, have to be sold, any order should be by way of a percentage or proportion of the estate rather than by way of a money sum. However, I do not think that this is an appropriate way to approach the matter, at least for the reason that the trustees should be left free to determine how and when the property should be sold without any input into that decision from the appellant. I repeat that I am mindful of what has been said in the High Court about the occasion for intervention in an appellate situation such as this. However, the error it seems to me, which is such as to require intervention in this case, is the Master's failure to give account to the particular insecurity which the appellant bears as a result of the circumstances in which she occupies her home. Accordingly, in my opinion, the following orders should be made. Before pronouncing those I should mention one other matter. We were told that the lease of the real estate does not expire until 18 May 1999 and that therefore any payment of a legacy to the appellant should be postponed until after that date and after some opportunity is given to the estate to sell the property. I accept this submission. In my opinion, the legacy should not be payable until three months after the expiry of the lease, that is to say 18 August 1999. It should, however, carry interest from the date of this order. I propose the following orders: 1. Appeal allowed. 2. Set aside the orders made on the appellant's application by the Master on 15 April 1998. 3. In lieu thereof order that there paid out of the estate to the appellant a legacy of $50,000, payable on 18 August 1999, to carry interest from the date of this order at the legacy rate. 4. The appellant and the respondents to have their costs of the hearing and of this appeal out of the estate, the appellant on a party and party basis and the respondents on an indemnity basis and the respondents to have a certificate under the Suitors Fund Act if so entitled. URJ BURNAGE v STRECKFUSS (Handley JA) 5 Handley JA I agree. I would only add for myself that the appeal books in this case unfortunately include affidavits of the unsuccessful applicants in the proceedings below who have not appealed to this Court. On my reckoning there are at least seven such affidavits and the oral evidence of those applicants, for which there was no conceivable need in this hearing and it is unfortunate that we continue to get appeal books which contain unnecessary material. Subject to those observations I agree with the reasons and orders proposed by Sheller JA. Fitzgerald AJA I also agree. Handley JA The orders of the Court will be as proposed by Sheller JA. 1. Appeal allowed. 2. Set aside the orders made on the appellant's application by the Master on 15 April 1998. 3. In lieu thereof order that there paid out of the estate to the appellant a legacy of $50,000, payable on 18 August 1999, to carry interest from the date of this order at the legacy rate. 4. The appellant and the respondents to have their costs of the hearing and of this appeal out of the estate, the appellant on a party and party basis and the respondents on an indemnity basis and the respondents to have a certificate under the Suitors Fund Act if so entitled. Counsel for the appellant: J R Wilson Solicitors for the appellant: Attwaters Counsel for the respondents: P P O' Loughlin Solicitors for the respondents: Davies Spicer Drake