New South Wales Supreme Court CITATION : BLANCHARD v CAMERON [2000] NSWSC 192 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 2418/99 HEARING DATE(S) : 02/03/2000 JUDGMENT DATE : 17 March 2000 PARTIES : Elizabeth May Blanchard v Lynne Cameron JUDGMENT OF : Master Macready at 1 COUNSEL : Mr A.J. Philpot for plaintiff Mr M.S. Willmott for defendant SOLICITORS : Michael G. Britten, Merimbula, for plaintiff Coleman & Greig, Parramatta, for defendant CATCHWORDS : Family Provision. Claim by widow. Opposition by daughter of first marriage of the deceased. Consideration of appropriate costs orders. Order that plaintiff receive substantially the whole estate. Singer v Berghouse (1994) 181 CLR 201 CASES CITED : Golosky & Anor v Golosky (unreported 5.10.93) Elliott v Elliott (unreported 29.4.86) Court v Hunt (unreported 14.9.87) DECISION : Paragraph 27 - 1 - IN THE SUPREME COURT OF NEW SOUTH WAELS EQUITY DIVISION MASTER MACREADY FRIDAY 17 MARCH 2000 2418/99 ELIZABETH MAY BLANCHARD v LYNNE CAMERON JUDGMENT 1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late George Albert Blanchard who died on 16 April 1998 aged 73 years. The deceased was survived by the plaintiff, his widow, two children from his first marriage and a number of children from the plaintiff's first marriage. 2 By his last will and testament made 8 April 1998 the deceased appointed his brother-in-law and his wife executors. Both have renounced probate and Letters of Administration for the purpose of making this application have been granted to the plaintiff. Under the will the estate was given to the deceased's trustees upon trust to permit his widow, the plaintiff to reside in his principal place of residence during her lifetime she keeping it in good repair. Apart from a bequest of some items of personal use to his adopted son, Jason Blanchard and a gift of some shares of no value to Paul Andrew Blanchard the residue of the estate was held for his daughter Lynne Cameron and Jason Herbert Blanchard as tenants in common in equal shares. In the absence of any executors the said Lynne Cameron was appointed a defendant in the proceedings. 3 The deceased's estate consisted of his home at 4 Booroo Street, Pambula Beach which is valued at $248,000 together with some tools of little value, personal items and shares in B.D. Instruments Pty Ltd valued at $2.00. The debts at the date of death of the deceased plus funeral expenses amounted to $4,700. Unfortunately there has been this litigation and the plaintiff will incur legal costs of some $16,5000. Those of the defendant are estimated at $9,645. As is evident there are no funds in the estate to meet any of these costs. 4 The deceased and the plaintiff were married on 6 October 1973 in Melbourne. The plaintiff was then 40 years of age and the deceased 48 years of age. From her first marriage the plaintiff had two children, Glen Morgan and Robin Arthur Morgan, twins, both now 45 years of age, Ian Donald Morgan now 43 years of age and Tracy May Dosser now 40 years of age. She also had a further child on 21 December 1970, Jason Herbert Blanchard, who was adopted by the deceased. The deceased himself had two children by first marriage, namely, the defendant, Lynne Cameron, now 51 of age and her brother Paul Andrew Blanchard now 41 years of age. After the deceased and his second wife, the plaintiff, were married they built a home in Altona in Melbourne where they lived until 1991. A number of their children lived with them and these have been given notice of the proceedings in case they may be eligible persons. None of them makes a claim on the estate and, indeed, the plaintiff's sons support the plaintiff's claim. 5 After the marriage the deceased continued with his work as a self-employed electrician. The plaintiff was engaged in full time domestic duties looking after the children until she was engaged in the years between 1979 and 1983 in running a milk-bar. The deceased retired in 1988 when he was 63 years of age and he and the plaintiff moved to Pambula Beach in 1993. They lived in a property which had been purchased many years earlier and on which they had erected a holiday home. At the time of the move they sold their home in Altona at a somewhat reduced price to the deceased's son, Paul Blanchard. The funds were used to renovate the house at the Pambula Beach property which is now held in the estate. $40,000 of the funds were used by them to build a granny flat behind a home of the plaintiff's daughter, Tracy Dosser at Werribee in Victoria. It appeared in the evidence before me that such addition was upon terms that if Tracy Dosser and her husband sold that property the deceased would receive something back from them. There was no agreement as to what amount was to be received and her daughter, Tracy, still owns the property. There are no plans for the sale of the property and it would seem unlikely given that Tracy's children are presently aged 11 and 16. 6 The deceased's will was executed on 28 April 1998 as I have recounted which was the day the deceased went into hospital shortly before his death. The wills were prepared as a matter of urgency and it is apparent from the evidence before me that the deceased indicated that the wanted the property to be left as to one half to the plaintiff, a quarter to Jason and a quarter to Lynne with the plaintiff having the right to reside in the Pambula property for her lifetime. This is not what resulted in the will executed by the deceased. 7 In applications under the Family Provision Act the High Court has in Singer v Berghouse (1994) 181 CLR 201 set out the two stage approach that a Court must take. At page 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 Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors." 8 As directed by the High Court I turn to the position of the plaintiff. She is 66 years of age and has a car, furniture and some personal items. She has no other assets and survives on the pension which is paid into her pension account which has a minimum balance. She appears to be in good health and is clearly able to manage to live in the deceased's house at Pambula Beach. The house is a three bedroom house. 9 The plaintiff and the deceased had happy marriage for some 25 years. The only unhappiness was in relation to the defendant, Lynne Cameron, as apparently the relationship between her and the plaintiff was cool. It is apparent that the defendant still retains a deep enmity towards the plaintiff in this regard. However, the evidence does not disclose the cause of this deep division between the plaintiff and the defendant but it is apparent that it has existed for the whole of the period of the deceased's marriage to the plaintiff. 10 It is necessary to consider the circumstances of others having a claim on the testator's bounty. The first of these is the son, Jason Blanchard. Jason gave evidence in the matter but did not give any evidence of his financial situation. The court can assume therefore that he does not want this to be taken into account when considering the plaintiff's claim. Indeed, Jason made it clear that his parents were a happy and loving couple and he did not believe it was the intention of the deceased to leave the plaintiff out of the will in the way that it has occurred. 11 The other persons having a claim on the bounty of the deceased is Lynne Cameron. She is 51 years of age, married and she and her husband pastor a church in Brisbane. Apparently they receive from the church $150 per week to make mortgage instalments on their house and they also receive $298 per week in unemployment benefits. They have about $7,000 in the bank, a 1988 Fairlane and a house at Bli Bli in Queensland. The house was purchased for $157,000 and is subject to a mortgage of some $90,000. 12 It is clear that the defendant kept contact with the deceased during his life although she says this was restricted to the times that the plaintiff was away in Queensland visiting her son. 13 There was one other beneficiary mentioned in the will, namely, the son Paul Andrew Blanchard, who received some shares worth $2.00. He has filed no evidence and it is apparent that he has benefited from the deceased during his lifetime in the manner I have recounted above. 14 It is necessary to consider how the plaintiff has been left without adequate and proper provision for her maintenance, education and advancement in life. All she receives under the will is a life estate in the property. In the event that the property is sold which, given the costs that have been incurred in this matter, is more than likely, it may be arguable that she has no interest in the funds thereafter. In any event the will makes no provision for the purchase of another house or other accommodation in the event of its sale. However, such a power may be available to the trustee under s 14DA of the Trustee Act. The problem with this approach is that the trustee may not wish to exercise that power or may take the view that it would not be prudent to do so. In any event there has not been a grant of administration other than the limited grant for the purpose of bringing these proceedings. 15 Provision normally made in respect of widows have been set out in many cases and recently the President of the Court of Appeal in Golosky & Anor v Golosky, unreported 5 October 1993, summarised them 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: (a) 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 and Anor , above, 458; Hunter , above, 576; (b) 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 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. (c) Consideration of other cases must be conducted with circumspection because of the inescapable detail 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; (d) 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; (e) 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 and Ors (1988) 13 NSWLR 241 (CA), 252." 16 In talking of the need to provide a house and a sum for contingencies the President is clearly referring to Wellman and passages in Luciano v Rosenblum 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. 17 His Honour, in sub-paragraph (d) above comments upon the unsatisfactory nature of a life interest. This problem has been dealt with by many first instance judges. For instance, in Court v Hunt, Young J (unreported) 14 September 1987, he said: "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." 18 His Honour then went on to talk about the assumptions one could make about the fact that frequently, people, once they pass fifty-five, have to change their accommodation and locate themselves either in retirement villages or nursing homes which have different requirements for capital contribution. 19 After talking about the evidence necessary, his Honour went on to say: "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." 20 The plaintiff, through her counsel, submitted that the estate in the present case is so small that the only appropriate order is one which would give her the whole estate absolutely. Clearly it is a long marriage. The house may be worth $248,000 and it may be possible from the proceeds for the plaintiff to buy a house of somewhat lesser size in Pambula Beach where she desires to live. Even so it is perfectly clear that in accordance with the authorities there ought to be not only a fund for contingencies but also sufficient income to enable her to live in a reasonable degree of comfort and free from any financial worries. On any view of the amount in the estate it could not be sufficient for these purposes. I am mindful in making these comments of the fact that the plaintiff has the right to reside at her daughter's place in Victoria where there is the self contained flat. She still visits and stays there occasionally when she goes to see her daughter. However, she wishes to remain living at Pambula Beach where she has settled. Clearly she is able to do so and will be able to for quite some time given her present apparent fitness and alertness. The right to live with her daughter may initially assist her in the future when she cannot cope on her own but that time has certainly not occurred at this stage. There is the possibility, which the authorities recognise, that she will need more than can be provided by her daughter and she should have the flexibility inherent in a capital provision to acquire other accommodation suitable for her old age. 21 In giving her evidence in witness box the plaintiff said the following in response to questions in cross examination. "Q. Had your husband's will been made up in terms you had expected, you have told the Court you believe you expected, that is you got half of the estate, that would involve you getting half of the Booroo Street, Pambula Street property? A. Yes. Q. And the other half going to Jason and Lynne? A. Yes. Q. Of necessity, of course, that would involve the house being sold, would it not? A. I don't believe so. I believed it to be that I could stay there until my death if I wished and then the place would be sold. Q. Would you be happy with that arrangement? A. I would have been, yes. Q. So if the will is adjusted along those lines, that is, you receive half of the value of the property with the right to live there and then for the house to go to Jason and Lynne, you would be happy with that arrangement, would you? A. I would." 22 In submissions the defendant indicated that this was the extent of the relevant need and was if the plaintiff had expressed the need in her affidavit. It was suggested that I could ignore the submissions made on her behalf by counsel that she receive the whole estate. Although it was not explored in re-examination the plaintiff's attitude seems to have been prompted by what she would have then been happy to receive. She was not specifically asked whether she would be happy with that claim in the event that costs had to be recovered from the sale of the property. 23 In these circumstances I think it is quite proper for counsel for the plaintiff and the court to consider the matter on the basis of other needs the plaintiff may not have considered during the particular cross examination. 24 I am satisfied given the matters to which I have referred that it is appropriate that the plaintiff should receive the whole of the estate of the deceased other than the items the subject of the bequest in clause 3(b)(i) and (ii) of the will. 25 The plaintiff submitted that in regard to costs the appropriate order was that each party should pay their own costs. The plaintiff did not seek an order for costs against the defendant. The defendant for her part sought that her costs on an indemnity basis be paid out of the estate of the deceased. In an ordinary case a defendant, executor, who is to uphold the will should be entitled to costs out of the estate. Normally if the executor makes an application under the act the appointed defendant would be entitled to costs in upholding the will. The present case is, however, one where there is a strong enmity between the plaintiff and the defendant and both have an interest in the outcome of the litigation. Submissions by defendant's counsel made it plain that the defendant would accept an order under which the plaintiff would receive half of the estate, the defendant a quarter, Jason a quarter with the defendant having a right to reside in the estate property during her lifetime. There is absolutely no suggestion in the evidence that this attitude was made known before it was announced by counsel during the hearing. 26 The present litigation has elements of ordinary party party litigation with each party having a stake in the outcome. In such litigation it would seem there should be no reason why costs should not follow the event, that is that the defendant pays the plaintiff's costs. However, that has not been sought by the plaintiff and, accordingly, there would in the ordinary course of such litigation be no order as to costs. However, the usual practise of the court does require that there be someone to defend the proceedings. The defendant was joined as a defendant in the proceedings on 23 August 1999. This joinder was by consent. In my view it should have been perfectly apparent by the time the evidence was complete that the plaintiff was likely to succeed in the present case. Any continuation of the litigation thereafter seems to have been the result of the defendant's stake in the outcome and her personal enmity towards the plaintiff. Accordingly, given that the affidavit evidence was complete in a substantial sense by the end of September 1999 I would think that any costs for the defendant should only run up to a reasonable time to consider the matter thereafter. Accordingly, I order that the defendant's costs on an indemnity basis be paid out of the estate of the deceased up to and including 31 December 1999. 27 The orders that I make are:- 1. In lieu of the provisions for the plaintiff in the will of the deceased that the plaintiff receive the whole of the estate subject to the bequests in clauses 3(b)(i) and (ii) of the will. 2. The defendant's costs on an indemnity basis be paid or retained out of the estate of the deceased up until 31 December 1999. The plaintiff's costs on a party and party basis be paid or retained out of the estate of the deceased. 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