New South Wales Supreme Court CITATION : Davis v Jarrett [2005] NSWSC 90 HEARING DATE(S) : 26 October 2004 JUDGMENT DATE : 22 February 2005 JURISDICTION : Equity Division JUDGMENT OF : Master McLaughlin at 1 DECISION : (1). I order that, in addition to the benefit given to her by the will of the late Winifred Hazel Jarrett ("the Deceased"), the Plaintiff receive a legacy in the sum of $50,000, such legacy not to bear interest if paid on or before 8 March 2005, and if not so paid to bear interest at the rates prescribed for unpaid legacies under the Wills, Probate and Administration Act 1898. (2). I order that the burden of the aforesaid legacy be borne by that part of the estate of the Deceased to which the grandchildren of the Deceased, other than the Defendant, would otherwise be entitled under the terms of the aforesaid will of the Deceased, to the intent that the interest of the Defendant under the terms of the aforesaid will not be affected by order 1 hereof. (3). I order that the costs of the Plaintiff on the party and party basis and costs of the Defendant on the indemnity basis be paid out of the residue of the estate of the Deceased. (4). The exhibits may be returned. CATCHWORDS : Succession. Family Provision. Claim by adult Daughter. Plaintiff is only eligible person. Ademption of gift by will of house property to Plaintiff. Financial and material circumstances of Plaintiff. Physical and medical problems of Plaintiff's husband. Plaintiff is essentially her husband's full-time carer. Whether needs of Plaintiff encompass those of her husband. Whether Plaintiff has been left without adequate provision for her proper maintenance. Competing claims of other beneficiaries. Family Provision Act 1982 LEGISLATION CITED : Wills, Probate and Administration Act 1898. CASES CITED : Singer v Berghouse (1994) 181 CLR 201 Lois Winifred Davis (Plaintiff) PARTIES : David Keith Jarrett (Defendant) FILE NUMBER(S) : SC 1560 of 2003 Mr. R. E. Quickenden (Plaintiff) COUNSEL : Ms. M. T. Bridger (Defendant) Lough Wells Duncan (Plaintiff) SOLICITORS : Robilliard Plowman Herat (Defendant) LOWER COURT JURISDICTION : - 16 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MASTER McLAUGHLIN Tuesday, 22 February 2005 1560/03 LOIS WINIFRED DAVIS –v- DAVID KEITH JARRETT JUDGMENT 1 MASTER: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 24 February 2003 Lois Winifred Davis claims an order for provision for her maintenance and advancement in life out of the estate and/or notional estate of her late mother Winifred Hazel Jarrett (to whom I shall refer as "the Deceased"). 3 The Deceased died, aged 96, on 15 September 2001. She left a will dated 28 November 1985, probate whereof was granted on 21 August 2002 to David Keith Jarrett, one of the executors named in such will (the Plaintiff, being the other executor, having renounced probate). David Keith Jarrett is the Defendant to the present proceedings. 4 By that will and in the events which have happened, the Deceased gave to the Plaintiff one half of the moneys standing in bank accounts (after payment of funeral and testamentary expenses), and gave the other half of those moneys to the Defendant; she gave the residue of her estate to her grandchildren, other than the Defendant. A gift of a specific house property to the Plaintiff adeemed, since the Deceased no longer owned that property at the time of her death. 5 The assets of the estate consisted of a house property situate at and known as 31 Saumarez Street, Vincentia (to which an estimated value of $240,000 was ascribed), and moneys in bank accounts (having a total value of $72,752). The amounts of the funeral and testamentary expenses have not been placed before the Court. However, I consider it appropriate to proceed upon the basis that after payment of those expenses there will still remain of the moneys in bank accounts an amount of no less than $60,000. 6 Under the terms of the will the Plaintiff is entitled to one half of that amount, being at least $30,000, the Defendant being entitled to the other one half thereof. 7 The Deceased was survived by her seven grandchildren. The residue of the estate (represented by the proceeds of sale of the Vincentia property) will be distributed amongst those grandchildren, other than the Defendant. The Vincentia property was sold in September 2003 for $400,000. The net proceeds of sale were in an amount of $383,413. 8 It will be appreciated that in calculating the value of the estate available for distribution, the costs of the present proceedings must be taken into account. It has been estimated that the costs of the Plaintiff will be $40,200 whilst those of the Defendant will be $19,900. The value of the net estate is about $443,413 (being the total of $60,000 and $383,413), with the consequence that the value of the estate available for distribution, after provision is made for costs totalling $60,000, is about $383,000. 9 Of the net distributable estate of $443,413, the sum of $440,000 is invested with the ANZ Bank and the balance is held in the trust account of the estate's solicitors. 10 The Plaintiff is the sole surviving child of the Deceased. The only other child of the Deceased, Keith Murray Jarrett, died on 30 August 1984. The Plaintiff was born on 6 July 1933, and is presently aged 71. She is married to Thomas Edward Davis, who is presently aged 81. The Plaintiff and her husband have three daughters, all adults, being Deborah Davis, Anna Murray and Judith Lois Davis. 11 The Plaintiff's Deceased brother, Keith Jarrett, had four children, being David Keith Jarrett (the Defendant), Lynette Ruth Laycock, Graeme Jarrett and Dorothy Thompson. 12 The foregoing three children of the Plaintiff and four children of her deceased brother are the grandchildren of the Deceased. The six grandchildren of the Deceased, exclusive of the Defendant, are entitled to the residue of the estate. That is, under the terms of the will, each of those six grandchildren is entitled to share the amount of $323,313 (being the residue of $383,413, less the costs of both parties of the present proceedings, in amounts totalling $60,100, since those costs, if payable by the estate, will be payable from residue). That is, each of those grandchildren is entitled to receive $53,885. 13 The Plaintiff and her husband, according to the Plaintiff's affidavit evidence, jointly own the following assets; House property situate at and known as 3 Susan Street, Vincentia (to which an estimated value of $325,000 is ascribed) Ford Futura motor vehicle (to which an estimated value of $10,000 is ascribed) 2000 Nissan Patrol (which was a gift from the Plaintiff's brother in law and to which and estimated value of $35,000 is ascribed) 14 In addition, the Plaintiff and her husband (either severally or conjointly) own 15,000 shares in IAG (formerly NRMA), worth about $3 each. Thus that total shareholding has a value of about $4,500. The Plaintiff and her husband have total savings of $10,000 invested in the Illawarra Credit Union (being $5,000 invested in the Plaintiff's name and $5,000 invested in her husband's name). However, at the time when she swore her principal affidavit, that of 19 February 2003, the Plaintiff and her husband had savings totalling $40,000. In the interim, part of that amount, being the sum of $11,000 had been expended on the purchase of what was described as a Niagara chair, which vibrates, together with an associated hand massager. The evidence did not adequately disclose what had happened to the balance of $19,000, although the Plaintiff said that that sum went on living expenses, including physiotherapy. 15 In addition, the Plaintiff and her husband (or the Plaintiff alone) own a boat, which is currently registered, and which they have owned for at least six years, although that asset was not disclosed in the Plaintiff's affidavit evidence, and no estimation of its current value was offered to the Court. 16 The Plaintiff's only income is the age pension in an amount of about $177.50 a week. Her husband receives an age pension in an equivalent amount. 17 The Plaintiff estimates that the fortnightly expenses of herself and her husband total about $1,180 whilst their combined fortnightly income is $710. 18 The house property situate at and known as 119 Coronation Parade, Enfield, which was referred to in the will of the Deceased, had originally been acquired by the Deceased and her husband, Horace Murray Jarrett in, apparently, the early 1930s. They effected the construction of a residence on that property, and then became their family home for some time thereafter. Subsequently, however, they acquired another family residence in Rickard Road, Strathfield, and the Coronation Parade property was sold in about 1959 to their son, the late Keith Jarrett. Several years later, in the early 1960s, when Keith Jarrett's family had outgrown that property, he sold it back to the Deceased's husband, who, together with the Deceased, then returned to reside again in that property. 19 By that time, however, the Plaintiff had left home, in about 1954, when she attained the age of 21. She subsequently married her present husband in 1956, and removed to the Shoalhaven area, where she and her husband continue to reside. 20 From the time when she left home in about 1954 until 1966 the Plaintiff's relationship with her father was strained and almost non-existent. However, she maintained contact with her mother throughout that period. After 1966 the contact between the Plaintiff and her father became more frequent. 21 Occasionally the Plaintiff's parents would come to stay with her. The Plaintiff's father died on 15 July 1980. Following his death, the Plaintiff's contact with her mother increased, and, according to her evidence, she visited the Deceased at least once a fortnight, as well as telephoning her every day at 8:00am. According to the Plaintiff she, and also her daughter Deborah, took frozen meals to the Deceased at the Coronation Parade residence every seven to ten days. 22 In about 1996 the Deceased sold the Coronation Parade residence, and purchased a house property at 31 Saumarez Street, Vincentia, in order to be closer to the Plaintiff. The Deceased was aged 91 at that time and her health was not good. She remained in poor health until her death about five years later. Throughout the period whilst the Deceased lived at Vincentia the Plaintiff visited her daily and attended to her needs. The Plaintiff drove her mother to appointments with doctor and podiatrist, attended to her shopping, helped with her housework and meals. In about 1997 the Deceased fell and broke her hip and was in the Port Kembla Hospital for a period. The Plaintiff and her children visited the Deceased regularly in hospital during that period. 23 Indeed, during the last few years of her life the Deceased required many visits to hospital. The Plaintiff attended to all the Deceased's needs in that regard, summoning ambulances and accompanying the Deceased to hospital. The Deceased was in hospital for the last five weeks of her life, and during that time the Plaintiff visited her daily and spent protracted periods with her at the hospital. 24 The close relationship between the Plaintiff and the Deceased was reflected in the provision in her will which the Deceased intended for the Plaintiff, by which the Deceased gave to the Plaintiff the chief asset which she owned at the time when the will was made. However, after the Deceased had disposed of that asset she did not make another will, with the consequence that the only benefit which the Plaintiff receives under the will of the Deceased is the sum of about $30,000 (being one half of the moneys in bank accounts after payment of funeral and testamentary expenses). 25 The Plaintiff suffers from a number of medical and health problems. She has had a cyst in her kidney, has suffered from hypertension for about forty years and for diabetes for fifteen years, as well as from macula degeneration for the last five years. It is the Plaintiff's understanding from what she has been told by her doctor that these problems will persist for the rest of her life. 26 The Plaintiff's husband suffers from degeneration of the heart and from arthritis. He is hardly able to walk and can no longer drive. 27 Evidence was given on behalf of the Plaintiff concerning the need for repairs and refurbishment and for alterations to her residence at 3 Susan Street, Vincentia, and concerning the cost of such work (a global quotation of $86,086 being placed in evidence). Many of the proposed alterations were required in consequence of the physical limitations which the Plaintiff's husband experiences in respect to his mobility. 28 The Defendant was born on 16 May 1954 and is presently aged 50. He has been married twice. His four children by his previous marriage reside with their mother. He has three stepchildren, being the children of his present wife, the youngest two of whom (being presently aged 21 and 19) reside with the Defendant and his wife. 29 According to the Defendant, he also had a very close relationship with the Deceased (and also, whilst he was alive, with his grandfather). Whilst the Deceased resided in Sydney the Defendant saw her on an almost daily basis. He said that he was virtually her sole carer from 1986 until she removed to Vincentia in 1996. On the days when he did not visit the Deceased he telephoned her. It was the evidence of the Defendant that he gave considerable assistance to his grandmother, the Deceased, taking groceries to her, attending to matters in the house and performing odd jobs, taking prescriptions for her medication to the pharmacy, taking her to medical appointments and posting her correspondence. 30 It was the evidence of the Defendant that he helped the Deceased relocate to Vincentia, and that he thereafter visited her there about once a month. 31 According to the Defendant, the Deceased from time to time would say to him, "You are as good as a son". The Defendant said that the Deceased also had a close and affectionate relationship with his own children, being her great-grandchildren. 32 The Defendant disputed the nature of the relationship asserted by the Plaintiff to have existed between herself and the Deceased. The Defendant disputed that the Plaintiff gave the assistance to the Deceased which the Plaintiff outlined in her affidavit evidence. According to the Defendant, the relationship between the Plaintiff and the Deceased was distant. He said that before the death of the Deceased's husband the Plaintiff rarely visited her parents, but that after the Deceased's husband died the Plaintiff visited her about once a month. 33 The Defendant is in reasonable health, but he suffers from asthma and from depression, although those conditions do not affect his capacity for employment. 34 After his divorce from his first wife the Plaintiff and the Defendant was left with about $140,000. 35 The Defendant is employed as a sales executive by Bakel-Lesaffre Yeast and his wife is employed by Mamre Christian College. The Defendant was until mid-2004 paying $780 a month in child support for his youngest daughter Alison (who has now reached the age of 18). The Defendant and his present wife support her daughter, who is attending technical college. 36 The Defendant's assets consist of: House property situate at and known as 31 Clyburn Street, Jamisontown (a suburb of Penrith), which he owns conjointly with his wife, having an estimated value of $400,000. Bank savings - $10,000 1987 Cruisecraft boat (having an estimated value of $8,000) 1984 Toyota van (having an estimated value of $2,000) 1994 Toyota motor car (having an estimated value of $3,500) 37 The Defendant's liabilities are a home loan (secured by mortgage), presently in an amount of $120,000, and a personal loan in an amount of $7,862. 38 According to the Defendant, his income is $3,378 net a month, whilst that of his wife is $3,147 a month. The Defendant estimates that their total expenditure (details whereof are set forth in his affidavit evidence) to be in an amount of $4,385 a month. 39 Each of the three children of the Plaintiff, being three of the seven grandchildren of the Deceased, supports the claim of her mother, although each has placed before the Court details of her financial and material circumstances. Each of the other four grandchildren of the Deceased (being the Defendant, his brother Graeme Murray Jarrett and his sisters Lynette Ruth Laycock and Dorothy Mary Thompson) oppose the claim of the Plaintiff, and seek to retain the benefit given to them under the will of the Deceased. Each of those four grandchildren has placed before the Court details of his or her financial and material circumstances. Evidence was placed before the Court by each of those grandchildren concerning that grandchild's observation of the nature of the relationship between the Plaintiff and the Deceased, such evidence suggesting that the relationship was far from the close and harmonious one which emerged from the Plaintiff's own affidavit evidence. 40 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff. 41 I have had the benefit of receiving a written outline of submissions and a chronology from Counsel for the respective parties. Those documents will be retained in the Court file. 42 The Plaintiff as a daughter of the Deceased is an eligible person in relation to the Deceased, being such within paragraph (b) of the definition of that phrase contained in section 6(1) of the Family Provision Act. As such she has the standing to bring the present proceedings. Indeed, she is the only eligible person in relation to the Deceased. None of the other seven beneficiaries named in the will is an eligible person in relation to the Deceased. However, each of those persons is a chosen object of the testamentary beneficence of the Deceased. 43 It should at the outset be appreciated that it is for the Plaintiff to establish her entitlement to an order for provision out of the estate of the Deceased. She must establish her own case upon its own merits. It is not necessary for the various grandchildren who oppose her claim to establish anything. Although not eligible persons, they are four of the chosen objects of the testamentary beneficence of the Deceased. 44 It should also be appreciated that an order for provision is not made as a reward for good conduct on the part of an applicant; neither is such an order withheld as punishment for perceived bad conduct on the part of the applicant. 45 I have already observed that the gift to the Plaintiff of the house property at Coronation Parade failed because the Deceased during her lifetime disposed of that property. Further, the house property which the Deceased purchased as her residence in substitution for the Coronation Parade property was not the subject of any specific gift and accordingly fell into residue. 46 The Court should not, however, disregard the fact that at the time when she made her will, on 28 November 1985, it was the desire of the Deceased that the Plaintiff should receive a significant benefit from her estate, being the Coronation Parade property, together with the furniture and contents, and that she should also receive one half of the moneys standing in the bank (after payment of funeral and testamentary expenses). 47 The Court must, however, approach the claim of the Plaintiff "having regard to the circumstances at the [present] time" (section 7 of the Family Provision Act). 48 In performing the first stage in the two stage exercise identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208 the Court must first establish whether the Plaintiff has been left without adequate provision for her maintenance. 49 The Plaintiff and her husband reside in an unencumbered jointly owned property having a present value of $400,000. They own two motor vehicles. The house requires significant repairs and maintenance. The Plaintiff and her husband from their joint incomes (consisting only of the age pension) do not have sufficient capital to undertake the necessary work on the house, or to effect the alterations desired by them in order to accommodate the physical limitations upon the mobility of the Plaintiff's husband. 50 The Plaintiff and her husband currently have savings and investments totalling about $14,500. However, when the proceedings were commenced their joint savings totalled $40,000. 51 It is submitted on behalf of the Plaintiff that she is, in effect, the full-time carer of her aged husband, who suffers significant health problems. 52 The Defendant, however, submits that essentially the asserted needs of the Plaintiff are in fact the needs not of the Plaintiff herself but of her husband. The Defendant also points to the fact that the Plaintiff and her husband occupy what appears to be a commodious residence of two storeys, comprising four bedchambers, a lounge room, a dining room, a family room, two and a half bathrooms and a double garage. 53 It is not for the Court to express any criticism of the nature of the residence occupied by the Plaintiff and her husband or their lifestyle or the manner in which they expend their modest income. However, the question which the Court must determine is whether in these circumstances the Plaintiff has been left without adequate provision for her maintenance. For example, the fact that she would like a new kitchen does not necessarily mean that she needs a new kitchen. 54 In considering the needs of the Plaintiff and the question of whether she has been left without adequate provision for her proper maintenance, it is not possible as a practical matter, or, indeed, desirable, for the Court a in case such as this, where the Plaintiff and her husband have lived together throughout a marriage subsisting over almost half a century, where their significant assets are jointly owned and where the Plaintiff's husband is in very poor health and the Plaintiff is essentially his primary carer, to differentiate between the needs of the Plaintiff and those of her husband. 55 So long as the Plaintiff and her husband choose to remain in their present residence it is essential that they have a fund which will enable them at the least to maintain that residence in its present condition, even if they do not effect capital improvements (by, for example, installing a new kitchen), and to accommodate the practical problems occasioned by the limitations upon his mobility experienced by the Plaintiff's husband. Further, they do not have any significant fund to which they can resort if confronted by unforseen contingencies. One can envisage the necessity for such a fund resulting from the serious health problems of the Plaintiff's husband. The amount of about $30,000 which the Plaintiff receives under the terms of the will goes some way to constituting such a fund for expenses and for contingencies, but is not in my conclusion adequate for such a purpose. 56 I consider that the absence of a fund sufficient to enable the Plaintiff to perform necessary continuing maintenance to her residence and to effect alterations necessary to accommodate the mobility problems of her husband and to meet unforeseen contingencies has resulted in the Plaintiff being left without adequate provision for her proper maintenance. 57 In calculating the amount of such a fund which I consider the Plaintiff to be entitled to receive out of the estate of the Deceased, it is necessary to consider the competing claims of the seven beneficiaries. As I have already recorded, three of those beneficiaries, being the three children of the Plaintiff, support the claim of the Plaintiff, even though each of those persons is herself in only modest circumstances. Accordingly, the competing claims of those three beneficiaries should not have the effect of reducing, let alone extinguishing any order for provision an entitlement to which the Plaintiff might otherwise have established. 58 The situation regarding the remaining four beneficiaries (being the Defendant, his brother and his two sisters) is somewhat different. Each of those persons opposes the claim of the Plaintiff. As I have already observed, it is not necessary for those persons to prove anything, since they are the chosen objects of the testamentary beneficence of the Deceased. However, in addition, each of those four beneficiaries has placed before the Court details of his or her financial and material circumstances, and has submitted that the interest of that beneficiary should not be affected by any order for provision in favour of the Plaintiff. 59 The circumstances of the Defendant himself are such that I consider that his interest under the will of the Deceased should not in any way be disturbed. The circumstances of his brother and his two sisters are not markedly better. However, they receive a greater benefit under the terms of the will – almost $54,000 each, compared to the Defendant's $30,000. 60 If the provisions of the will were to take effect, then, after allowance be made for the costs of the present proceedings, the Plaintiff would be entitled to receive about $30,000, and the Defendant would receive an equivalent amount, whilst the balance of the estate (being the net amount available for distribution, after allowance being made for the costs of the present proceedings, being in an amount of $323,313, would be divided equally among six of the seven grandchildren of the Deceased, with the consequence that each of those six grandchildren would receive about $53,885. 61 I consider that it is appropriate that, in addition to the benefit given to her under the will of the Deceased, the Plaintiff should receive an additional legacy in the sum of $50,000. That additional sum, together with the amount of about $30,000 which she receives under the will, will give to the Plaintiff a total amount of about $80,000, which I consider appropriate to constitute a fund for the Plaintiff for the purposes which I have already outlined. 62 However, that additional legacy should not in any way affect the benefit given to the Defendant under the terms of the will. I consider it appropriate that the additional benefit for the Plaintiff should be borne by that part of the estate of the Deceased to which the six grandchildren of the Deceased, apart from the Defendant, would otherwise be entitled. In consequence, each of those six grandchildren will receive about $45,500, being about $8,400 less than each such grandchild would have received under the terms of the will. I consider, however, that such a reduction in the benefit to be received by those grandchildren should not have the effect of reducing, let alone extinguishing, the provision for the Plaintiff of the nature to which I consider she has otherwise established an entitlement, being for an additional legacy of $50,000. 63 Accordingly, I make the following orders: (1). I order that, in addition to the benefit given to her by the will of the late Winifred Hazel Jarrett ("the Deceased"), the Plaintiff receive a legacy in the sum of $50,000, such legacy not to bear interest if paid on or before 8 March 2005, and if not so paid to bear interest at the rates prescribed for unpaid legacies under the Wills, Probate and Administration Act 1898. (2). I order that the burden of the aforesaid legacy be borne by that part of the estate of the Deceased to which the grandchildren of the Deceased, other than the Defendant, would otherwise be entitled under the terms of the aforesaid will of the Deceased, to the intent that the interest of the Defendant under the terms of the aforesaid will not be affected by order 1 hereof. (3). I order that the costs of the Plaintiff on the party and party basis and costs of the Defendant on the indemnity basis be paid out of the residue of the estate of the Deceased. (4). The exhibits may be returned. ********* 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. 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