New South Wales Supreme Court CITATION : ALQUIST v. ANZ EXECUTORS & TRUSTEE COMPANY LIMITED & ANOR [2004] NSWSC 1116 HEARING DATE(S) : Monday 15 November 2004 JUDGMENT DATE : 23 November 2004 JURISDICTION: Equity JUDGMENT OF : Acting Master Berecry at 1 DECISION : I dismiss proceedings No. 6145 of 2002; In relation to proceedings No. 6146 of 2002, I make the following orders:-; (a) that out of the estate of the late Constance Jean Alquist, the plaintiff, Laurence Victor Alquist, receive the property known as 32 Fitzgerald Avenue, Maroubra; (b) the defendant pay the plaintiff's costs on a party/party basis and the defendants' costs be paid out of the estate on an indemnity basis; 3 I order that the plaintiff receive payment from the estate in the sum of $30,000. CATCHWORDS : Family provision - claim by son - sole beneficiary granddaughter - large estate - spendthrift - nature of relationship with deceased - circumstances prior to will - intention of deceased - claim by daughter in law - dependency - whether rent free accommodation given because of relationship with deceased - absence of additional factors warranting provision. LEGISLATION CITED : Family Provision Act 1982 Re Fulop, deceased (1987) 80 NSWLR 679 CASES CITED : Clinch v. Swift (Young, J. unreported 13 October 1988) Singer v. Berghouse (1994) 181 CLR 201 Bondy v. Vavros (Young, J. unreported 29 August 1988) PARTIES : ALQUIST, Laurence Victor v. ANZ EXECUTORS & TRUSTEE COMPANY LIMITED & ANOR ALQUIST, Donna Louise v. ANZ EXECUTORS & TRUSTEE COMPANY LIMITED & ANOR FILE NUMBER(S) : SC No. 6146/2002; No. 6145/2002 COUNSEL : Plaintiff: Mr. T.J. Morahan Defendant: Mr. J. Armfield SOLICITORS : Plaintiff: M.H. Peoples & Co. Defendant: McCabe Terrill IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ACTING MASTER BERECRY TUESDAY 23 NOVEMBER 2004 No. 6146 of 2002 No. 6145 of 2002 LAURENCE VICTOR ALQUIST v. ANZ EXECUTORS & TRUSTEE COMPANY LIMITED & ANOR DONNA LOUISE ALQUIST v. ANZ EXECUTORS & TRUSTEE COMPANY LIMITED & ANOR JUDGMENT 1 ACTING MASTER: The two applications are brought pursuant to s.7 of the Family Provision Act 1982 by Donna Louise Alquist (Donna), the deceased's daughter in law, and Laurence Victor Alquist (Laurence), the deceased's son. 2 The deceased died on 17 October 2001 and the applications were commenced on 24 December 2002. The applications, therefore, are brought within time. 3 Under the terms of the deceased's will, she left her estate to her granddaughter, Lauren Val Alquist upon trust until she attains the age of 18 years. The estate comprised of a residential property at Maroubra and monies held in various bank accounts or deposited for investment and shares in Boral Limited and Origin Energy Pty. Limited. The balance of the estate consisted of furniture and effects and jewellery. Those items, however, have a minimum value. The current value of the estate is $1,281,023.41. The major assets are realty at Maroubra valued at $725,000 and personalty by way of bank deposits and investments valued at $550,277.24. Background 4 The plaintiffs bring these proceedings on the basis they are both eligible persons pursuant to s.6(1)(b) in the case of Laurence and s.6(1)(d) in the case of Donna. 5 Both plaintiffs are currently 44 years of age. Laurence had lived with the deceased from his birth and Donna commenced living with the deceased upon her marriage to Laurence on 7 April 1984. 6 Their evidence is that upon Donna moving into the property, the deceased vacated the main bedroom and gave that to the plaintiffs. There is one child of their marriage, namely Lauren Val Alquist born on 4 September 1989. 7 There is not a great deal of evidence concerning the history of the relationship between the parties. The only evidence given is that by the two plaintiffs. Not surprisingly, their evidence is similar. 8 Laurence had never paid rent to his mother either before he married or subsequent to marriage. There were times when he was unemployed both before and after marriage when his mother supported him. Laurence has sustained two industrial injuries. His evidence was that up until the time of the second injury, which occurred in 2000, he had been employed since leaving school at the age of 16 for about 70% of time. After he and Donna married, the deceased continued the arrangement she had had with Laurence and neither of the plaintiffs paid rent to the deceased. Their evidence is that from 1984 until her death she paid some of the bills such as Council and water rates and electricity. In relation to household expenditure, however, the plaintiffs' evidence is that they made contributions during that period to those expenses. 9 In 1986, the deceased won a prize which consisted of an overseas trip. She gave that prize to the plaintiffs as well as $1,000 spending money. Laurence's evidence is that when he was 17 his mother purchased a car for him for approximately $5,000 and in 1986/1987 she gave him $2,500 towards the purchase of another motor vehicle. 10 In November 1997, Laurence sustained an industrial injury and was off work for six months thereafter. During this time, his mother supplemented his income as he was receiving workers compensation payments which were at a considerably lower rate than he normally would have been earning. 11 In January 2000, he sustained another work related injury. As a result of the accident, his left ankle was crushed. He has been off work since that time and is only now able to perform light duties. However, to date, he has not undertaken any employment, although his evidence is that in the last two years or so he has applied on about four occasions for employment but has not been successful. Therefore, as a result of the second injury, he has not been able to provide funds to the household other than payments that he has received by way of workers compensation payments. 12 In June 2001, Laurence received the sum of $132,389.04 as a result of the injury sustained in 2000. The net proceeds that he received from this claim was an amount of just under $105,000. 13 Donna has worked continuously since 1984. She has worked at the Coogee Randwick RSL Club since 1988 as a secretary. Currently she is earning $400 per week and is working a three to three and a half day week. 14 The plaintiffs' evidence is that the family was a happy and loving family. There is no evidence to suggest that the relationship between the deceased and Donna was anything but friendly and co-operative. The evidence in relation to Laurence, however, is that from time to time the deceased expressed some concern about his addiction to gambling and alcohol. However, notwithstanding that concern, there is no evidence to suggest that the relationship between mother and son was anything but a loving and caring one. 15 There are a number of matters that are in issue in these proceedings. Firstly, whether Donna has established that there are factors warranting, pursuant to s.9(3) which would enable provision to be made for her out of the estate of the deceased. Secondly, whether or not the plaintiffs were completely candid with Laurence's barrister in the common law proceedings concerning his assets and the advice given by the barrister in relation to the information supplied to him and, thirdly, the reason why the deceased changed her will in 2001. Donna's eligibility 16 Donna bases her claim on the fact that she was a member of the same household as the deceased since 1984 and that during that time she received a financial benefit by not having to pay rent for the accommodation. The evidence also suggests that part of the expenses of the family were met by the deceased and the majority of the day to day living expenses were met by both plaintiffs. Donna's evidence is that she got on extremely well with the deceased and the deceased helped both plaintiffs financially throughout the course of their marriage. There is no evidence by Donna, however, as to matters which are set out in s.9(3) of the Act. 17 The above matters are the only matters that Donna has put on as evidence in identifying matters covered by s.9(3). In the absence of any evidence to the contrary, I will assume for the purpose of this application that the circumstances and the character of Donna both before and after the death of the deceased were favourable. However, there is no evidence of any financial contribution that was made to either the conservation or improvement of the property, the welfare of the deceased, or home maker contributions that Donna had made. Her evidence on these matters is silent. 18 In relation to need, Donna's evidence seems to be based on an assertion that there had been an agreement that the deceased would change her will so that Laurence was the sole beneficiary after the common law proceedings were concluded. The only need that Donna addresses is a need for some provision in her old age. 19 In Re Fulop, deceased (1987) 80 NSWLR 679, McClellan, J. analysed the meaning of s.9(1) of the Act. The legislation draws a distinction between eligible persons pursuant to the definition in s.6(1)(c) and (d) and eligible person pursuant to s.6(1)(a) and (b). The former sub-sections refer to former wife or husband of the deceased or a person who was dependent upon the deceased and a member of the household of which the deceased was a member. 20 In Re Fulop (supra), his Honour said that there needs to be additional factors which render an applicant as an eligible person in respect of paragraphs (c) and (d) to give him or her the status of a person who would be generally regarded as a natural object of testamentary recognition by the deceased. Persons not generally regarded as natural objects of testamentary recognition, may, when circumstances of their relationship with the deceased are set out, immediately be seen to be persons who would be regarded by most observers as, in their particular circumstances, natural objects of testamentary recognition. 21 Donna's evidence is not particularly strong on matters which are commonly called factors warranting in s.9(3). 22 There has been some reliance on former wills made by the deceased. The purpose being to show that up until 2001 after the conference with their common law barrister, the deceased had made a number of wills in which she had made Laurence either the sole or the major beneficiary. It can also be gleaned from what the deceased did from 1992, in relation to the first will and 2001, the will leaving her estate to Lauren, that in none of the three wills did she make provision for Donna. It would seem that the deceased did not regard Donna in the light of a person who would be natural objects of her testamentary recognition. 23 In Clinch v. Swift (Young, J., unreported 13 October 1988, 3008/85), his Honour made the following general comments. Firstly, that a daughter in law who lives in her mother in law's home generally speaking lives with her husband and they pay their own way. The mere fact that she lives in her mother in law's home without paying rent does not of itself indicate a dependency. In considering the question of dependency, one must distinguish between a daughter in law who lives with her husband in the mother in law's home and one who lives in her mother in law's home, but not with her husband. A woman living with her husband usually does so because of matrimonial rights between the husband and wife. His Honour then posed a number of questions. Firstly, does the free accommodation flow because she (the daughter in law) is married to the mother in law's son, or because of her relationship with the mother in law? Secondly, what other factors throw light on the wife's position in the home? Thirdly, was there any animosity between the mother and the daughter in law? Fourthly, who supplied food and cooked meals? 24 In the present case, I think it is clear that Donna obtained rent free accommodation, not because of any relationship that she had with the deceased other than as daughter in law, but because she was the deceased's son's wife. There is no evidence to suggest that there is any other basis upon which Donna would have received the privileged position of rent free accommodation for a period of 17 years. There is no suggestion that there was any animosity between the deceased and Donna and there is no evidence about who prepared meals. There is evidence, however, that the household expenses were to a large degree met by both Donna and Laurence. There is nothing in the evidence to suggest that Donna cared for the deceased during periods of illness or incapacity. 25 In my view, the evidence does not raise Donna to the status as expressed by McClellan, J. in Re Fulop (supra) of one who, having regard to all the circumstances, would be regarded as a natural object of testamentary recognition by the deceased. 26 Therefore, I dismiss proceedings No. 6145 of 2002. Laurence Victor Alquist 27 Laurence Victor Alquist (plaintiff) proved to be an unreliable witness. Affidavits filed on his behalf fail to disclose the full extent of his assets. The only disclosure in his affidavit evidence is in relation to shares held in British American Tobacco to the value of approximately $86,000. At the time of swearing his second affidavit, namely 7 July 2003, he had approximately $18,000 left from his compensation payment from 2001. In relation to the $86,000 he received for the shares, his affidavit evidence was that most of the monies received in respect of the sale of the shares went on the day to day living expenses and costs associated with running the compensation claim. 28 However, in cross-examination, he admitted that as at 20 December 2002, he had $80,000 in a bank account with the Commonwealth Bank and that between October 2001 and July 2003 he had disposed of approximately $236,000. These monies were received as a result of the proceeds of sale of the British American Tobacco shares and monies received in respect of his workers compensation claims. 29 He conceded under cross-examination that the bulk of the money was not spent on day to day living expenses or the costs associated with running his compensation claim but was spent on his addiction to gambling and drinking. He admitted that he had an alcohol problem and that currently he drinks every afternoon at the Maroubra RSL Club and generally consumes between six to eight schooners. On the weekends he drinks spirits and wine with his meals. He gave evidence that he was spending approximately $300 to $400 per week playing poker machines. He admitted that he has consumed alcohol at that rate since about the age of 18. However, he denies that he has always been a gambler. 30 When he was working, he would play the poker machines once or twice a week and went to every second race meeting at Randwick. On average, he would spend about $100 on gambling. However, since the second accident his attendance at the RSL Club and the amount of money that he has spent on gambling has increased considerably. 31 The plaintiff and the deceased appear to have had a good relationship. 32 The plaintiff's claim seems to be based on the fact that his mother changed her will in 2001. There is some controversy concerning the facts and events leading up to the change of will and the subsequent failure by the deceased to alter the will to the terms that were exhibited in her 1995 will. 33 The plaintiff's evidence is that, as a result of a conference he and his wife had with a barrister in respect of his common law claims, the advice was given that his mother should alter her will to reflect Lauren as the major beneficiary, otherwise, should a costs order be made in the common law claim against the plaintiff, then the insurer would be able to recover its costs out of the proceeds of the estate once the deceased had died. This evidence is supported by his wife, Donna, the plaintiff in proceedings No. 6145 of 2002. 34 Mr. Jay Anderson was counsel briefed in the plaintiff's common law claim. In cross-examination he gave evidence of the date on which the conference took place. He confirmed the matters set out in his affidavit, namely, that if the only asset the plaintiff had was an entitlement under his mother's estate, then if the mother's will was changed so that that entitlement went to the plaintiff's daughter, then there would be nothing that the insurer could levy execution against in satisfaction of a costs order if the plaintiff were unsuccessful in those proceedings. 35 Mr. Anderson's evidence was that from recollection at the time of giving that advice to the plaintiff, the plaintiff had not disclosed any of his assets other than an entitlement under his mother's will. It was put to Mr. Anderson that had he known that the plaintiff had received $86,000 from the sale of his British American Tobacco shares that his advice may well have been different. Mr. Anderson's response to that question was that that most certainly would have been the case because his estimate was that if the plaintiff were unsuccessful the costs against him would be somewhere between $40,000 and $50,000 and the money the plaintiff received for the shares would have been adequate. There would be no need for his mother to change her will. 36 On the evidence, I am not satisfied that the sole reason for the deceased changing the terms of her will was because of the advice that her son said a barrister had given him in relation to his liability for costs. It should also be noted that the proceedings were undertaken on a "no win, no cost" basis so that at no time during any conversations was the plaintiff concerned about any personal liability for costs to his own solicitors should the matter fail. 37 As with these proceedings, where the plaintiff has not acted in an open and forthright manner, it would appear that he failed to disclose important information to Mr. Anderson at that conference. 38 The deceased changed her will on 4 April 2001. The plaintiff cannot explain why his mother took some 11 months to change her will. That does not seem to me to be an important point. There may have been many reasons why she delayed in having her will redrawn. 39 The plaintiff's evidence was, however, that his mother would change the will once payment of the compensation monies had been made. He received an arbitrator's award in his favour on 19 June 2001. The deceased never changed her will. She died on 16 October 2001, the day that the monies were received by the plaintiff. 40 The plaintiff couldn't explain why his mother did not change the will so that he was the major beneficiary. It was suggested to him that it was because of his alcohol and gambling addiction. Whilst he conceded that he and his mother had argued over that from time to time, he was not aware that that was a major concern to her and that in his opinion the only reason the will wasn't changed was that she didn't get around to it. 41 Regardless of what the reason was for the deceased not changing her will, there is no evidence which suggests that there was a deterioration in the relationship between the plaintiff and the deceased, but it must be noted that within a short space of time the plaintiff wasted in excess of $230,000 mainly on gambling and alcohol. That may have been of some concern to his mother. 42 The likelihood is that she changed the terms of her will as a result of a conversation with the plaintiffs. That conversation was based on information supplied by a barrister who in turn was not given the complete picture of the plaintiff's financial position. It would seem that the mother accepted at face value the plaintiff's statement of the barrister's advice and changed her will accordingly. However, it cannot be discounted that by this stage she was becoming concerned about his gambling and alcohol addiction. Nevertheless, these were problems that had manifest themselves in the years leading up to the first injury he sustained in 1997 and yet during that period after the death of the deceased's husband, there were at least two wills in which she made the plaintiff her major beneficiary. 43 It is mere speculation, but if she didn't change the will back to the 1995 will, it may have been in part because of his inability to manage money and the chronic addiction he had to alcohol and gambling. However, there is nothing in the mother's will which suggests that that is the case and there is no other evidence supporting that proposition. 44 The deceased died suddenly. It may well have been that, while she intended to change the will, she never got around to it. 45 Evidence was given by William West concerning a conversation he had on 4 September 2001 with the deceased. His evidence was that the deceased was concerned that the plaintiff may not be able to get a good job, but nevertheless he would have the house which he would inherit and was the sole beneficiary of her estate. That, of course, was not a true statement of fact. It may well have been that that was the express intention of the deceased to change her will. Mr. West was not shaken in cross-examination on that evidence and that evidence in the second paragraph number two in his affidavit of 11 November 2004 conforms with the provisions of s.32(3) of the Family Provisions Act. I accept Mr. West's evidence of the conversation that he had with the deceased. 46 The plaintiff's position then is that as the only child of the deceased he seeks an adjustment pursuant to s.7 of the Family Provisions Act to put him in a position where he would have been had his mother not changed her will in 2001 at his request. However, that is not a basis for making an order under s.7 of the Act. The courts have said on many occasions that it does not have a mandate to re-write the deceased's will. It can only alter the provisions of a will if a plaintiff is able to satisfy the court that two stages that were enunciated in Singer v. Berghouse (1994) 181 CLR 201 at 210- 212 47 The first question is what provision, if any, made for the applicant was inadequate for his or her proper maintenance, education and advancement of life. It is clear that this question must be answered in favour of the plaintiff for the deceased made no provision for the plaintiff at all. However, in determining whether or not an order should be made under s.7 of the Act, the court in answering that question must look to see what provision was made during the deceased's lifetime to the plaintiff. The evidence is that throughout his life, the deceased provided rent free accommodation, provided monies from time to time when he was unemployed, gave him gifts at various times and continued to make payments towards the Council and water rates on the Maroubra property. It is clear during his lifetime he received substantial benefits from his mother. However, as a result of her provision during her lifetime to the plaintiff, the plaintiff continued to live with her and she encouraged, it would seem, an attitude in the plaintiff that he would receive rent free accommodation while ever she was alive and thereafter the property would be transferred to him. Up until 2001 that in fact was the intention of both parties when one considers the earlier wills. It is clear that she has created in him an expectation that the Maroubra property would be his. As matters stand, he has no security of accommodation. 48 In Clinch v. Swift (supra), Young, J. said that a right to reside is inappropriate for a son and that such provision was inadequate. In the current proceedings, the plaintiff does not have a right to reside pursuant to the terms of the will. He has no right in respect of the Maroubra property at all. He is placed in a position far worse than the plaintiff in Clinch v. Swift (supra). 49 The plaintiff has a gambling and alcohol addiction. He is unemployed, his prospects of employment are limited. Those limitations, however, appear to relate only partly to the injuries he sustained in the two incidents. There was not tendered any current medical reports concerning his fitness to work. The plaintiff admitted readily that he doesn't like work and it was always his intention to retire by the time he reached 50. 50 The deceased, of course, was aware that the plaintiff had not worked since 2000. She was also aware that prior to that since leaving school he had worked only 70% of the time and she had in fact supported him during the periods of unemployment. The plaintiff, therefore, is in a position where he has sustained injuries which may prevent him from undertaking many of the positions that he would have been fit for prior to the two accidents. It would appear, however, he is fit for some work. She was aware of his addiction and in fact raised some concern about that, but had still supported her son both financially and non-financially until the end of her life. However, by the terms of her will, no provision is made for him, thereby leaving him without accommodation and without a fund which could generate an income. 51 Shearer v. The Public Trustee (Young, J., unreported 23 March 1998) and Fiorentini v. O'Neill (Cowdry, AJ. unreported 4 December 1998) state that in ordinary circumstances a testatrix is not obliged either legally or morally to provide an unencumbered house for a child. However, each matter must be looked at on its own facts. In this family the deceased did nothing to encourage her son to take on any responsible role as an adult. She was always a fallback position for him. 52 Having regard to the plaintiff's relationship with the deceased and the circumstances which existed during her life and those since her death, provision ought to be made out of the estate for the plaintiff. 53 The beneficiary is the plaintiffs' daughter. She is currently 15 years of age attending high school. Her reports indicate that she is doing reasonably well and she has a desire to go to attend the National Institute of Dramatic Art. Evidence has been put on by the executor which shows that the costs of the beneficiary's high school education and three years at NIDA including the HECS debt is approximately $100,000. 54 The plaintiff clearly has a problem in managing his finances. In Bondy v. Vavros (Young, J., unreported 29 August 1988) his Honour said as follows:- "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 none of my affair. … 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 a moral duty. …" 55 In the present case, the deceased has made no provision for the plaintiff. 56 It is clear that should provision be made to the plaintiff by way of a lump sum payment, then the money will be wasted in a short period of time thus the plaintiff will be left in a position where he has no funds and where he has no security of accommodation. In my view, the proper provision that should be made for the plaintiff out of the estate of the deceased is that the Maroubra property should be transferred to him. There has been no evidence put on concerning the cost of maintenance and upkeep of the property and in the absence of that evidence I assume for the purpose of these proceedings that the property is in reasonable condition and can be maintained by the plaintiff. It seems to me, in any event, that by having the property transferred to him it creates an incentive for him to undertake some form of employment so that the asset that he has can be maintained. 57 Annexure B is a report from Anthony Stavarinos, Valuation Consultancy Service which at paragraph 10 states that the property is in fair condition externally and appears structurally sound for its age, allowing for normal wear and tear. As there is no evidence put on by the plaintiff that the property requires extensive maintenance or renovation, I will assume that it requires no more than the normal maintenance for wear and tear on a property. Therefore, there is no evidence before me that significant money is needed to be outlaid to maintain the property. 58 In relation to proceedings No. 6146 of 2002, I make the following orders:- (a) that out of the estate of the late Constance Jean Alquist, the plaintiff, Laurence Victor Alquist, receive the property known as 32 Fitzgerald Avenue, Maroubra. (b) the defendant pay the plaintiff's costs on a party/party basis and the defendants' costs be paid out of the estate on an indemnity basis. 59 The plaintiff has put on evidence that a sum of $30,000 was given to his mother to be held for his daughter's education. His evidence is that that sum has been included by the trustees in the inventory of property of the deceased. Whilst he does not identify the account, the executors have not taken issue with his evidence on this point. 60 Therefore, in addition to the provision of the Maroubra property, I order that the plaintiff receive payment from the estate in the sum of $30,000. ********** Last Modified: 11/25/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.