New South Wales Supreme Court CITATION : Browne v Browne [2009] NSWSC 1399 HEARING DATE(S) : 23 - 25 November 2009 JUDGMENT DATE : 25 November 2009 JURISDICTION : Equity Division JUDGMENT OF : Rein J EX TEMPORE JUDGMENT DATE : 25 November 2009 There be provided out of the estate of the testator a legacy for the plaintiff in the sum of $475,000, being: (1) $275,000 for the purchase of a home; and DECISION : (2) a $200,000 lump sum. The plaintiff's costs to be paid out of the estate on a party/party basis. The defendant's costs to be paid out of the estate on an indemnity basis. CATCHWORDS : SUCCESSION – family provision and maintenance – failure by testator to make sufficient provision for applicant – where marriage between plaintiff widow and testator was for a short period of time – where agreed that the provision for the plaintiff by the testator is inadequate – consideration of when period of cohabitation prior to marriage commenced – provision for the purchase of a house, contingency fund and a lump sum for plaintiff's future needs LEGISLATION CITED : Family Provisions Act 1982 CATEGORY : Principal judgment Bladwell v Davis [2004] NSWCA 170 CASES CITED : Kay v Archbold [2008] NSWSC 245 Singer v Berghouse (1994) 181 CLR 201 Walker v Walker [2005] NSWSC 1024 PARTIES : Carol Ann Browne (Plaintiff) Michael Browne (Defendant) FILE NUMBER(S) : SC 1958/09 COUNSEL : R Lovas (Plaintiff) K Morrissey (Defendant) SOLICITORS : Pigott Stinson (Plaintiff) Lindsay Brien Solicitor (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Rein J Date of Hearing: 23 – 25 November 2009 Date of Judgment: 25 November 2009 1958/09 Carol Ann Browne v Michael Browne JUDGMENT (EX TEMPORE) 1 REIN J: These proceedings relate to the will of the late Kenneth Browne, who I shall refer to as the testator, who died on 10 February 2008. His will was executed on 25 November 2007 and a codicil was executed on 8 January 2008. The plaintiff (for whom Mr Lovas of counsel appears) is the widow of the testator and she makes a claim pursuant to s 7 of the Family Provisions Act 1982 alleging that the testator's will as amended by the codicil makes inadequate provision for her "education, maintenance and advancement in life". 2 The claim is brought against Mr Michael Browne who is a son of the testator and who is the executor of the testator's will (and for whom Mr Morrissey of counsel appears). Mr Browne is one of the other beneficiaries of the will other than the plaintiff, as is his brother Mr Daniel Kenneth Browne. I shall, with no disrespect intended, refer to both the beneficiaries by their first names, Michael and Daniel. 3 By the will a trust was established which would permit the plaintiff to reside in what has been described as "the flat", and then subsequently a new house, for life subject to her not remarrying or "entering into a marriage-like relationship" and with rates, taxes and insurance not to be paid by her. The will purported to grant to her Lot 216 and there were provisions in relation to that property, however it is agreed by both parties that Lot 216 was not in fact owned by the testator but by a company which was owned by him. Accordingly, although Lot 216, which it is agreed has a value of $40,000, was bequeathed, the bequest was not effective. The will, prior to the amending codicil, also provided to the plaintiff an amount of $400 per week out of a fund to be established. The codicil removed that bequest and removed the provision relating to the move to the house on the hill. 4 The plaintiff and the testator were married on 1 November 2007, that is one week before the will was executed. They first met in December 2004 and had cohabited for a period prior to marriage, although the precise period of that cohabitation is in dispute. A good deal of consensus has been reached by the parties on a number of matters: (1) that the estate has a nett value of approximately $3.1 million; (2) Lot 216 as I have noted was not owned by the testator but it had a value of $40,000; (3) that the relationship between the plaintiff, on the one hand, and Michael, Daniel and Daniel's wife Sally, on the other hand, has broken down to such an extent that for all practical purposes the plaintiff cannot continue for any length of time to reside in the flat which is part of the farm property which was owned by the testator; (4) it is also conceded that the plaintiff is an eligible person within the terms of the Family Provision Act and that, as matters have transpired, the provision made for the plaintiff is inadequate. 5 The dispute in this case revolves around what amount ought be granted out of the estate in the circumstances. Counsel agree that the area of factual dispute is quite limited and I shall identify these areas in a moment, and that the court must make a value judgment as to what is a proper allowance to be made firstly in relation to the freehold legacy which the defendant accepts should be made, and secondly as to any further amount to be awarded. 6 Although I have separated out these two matters and I will give consideration to them separately, I also need to consider the totality of the provision, not simply its component parts, and I propose to do so in due course. 7 I have had regard to the chronology helpfully prepared by Mr Lovas. I will set out the key matters: (1) The plaintiff and testator met in late 2004. The plaintiff's husband had recently died and the testator lived a short distance down the road. The plaintiff and her late husband were renting premises on the property. I shall refer to that property in which the plaintiff resided as "the cottage" as that is the terminology that has been used by the parties. The testator's first wife had died in 2001. (2) The testator's property was a 120 – 125 acre property with very attractive scenery including a creek. The property had a house and garage and an adjoining but, in effect separate, dwelling which has been referred to as "the flat" but which was more like a townhouse with three bedrooms and a study or office, a lounge room, a dining room, a kitchen and a laundry. (3) The plaintiff is now sixty-three years of age and was fifty-seven at the time she first met the testator. (4) The testator was sixty-nine years of age at the time when he met the plaintiff. (5) As at September 2006 it became clear that the testator had a serious illness. He was diagnosed with metastasized melanoma and informed that the illness was terminal. (6) In May or June 2007 the plaintiff and the testator moved into the flat and until that time the flat had been occupied by Daniel and his wife Sally and their three children. Daniel and his family moved into the main residence in which the testator had been living. (7) The testator and the plaintiff commenced a relationship in the first half of 2005 and became engaged in December 2006. Subsequently they agreed that the wedding would take place on 26 January 2008 but the wedding day was brought forward to 18 November 2007 and a holiday planned for that time was turned into a honeymoon. I infer that the reason for this was that the testator knew that he did not have long to live. (8) In September 2007 and October 2007 the testator spent time in hospital. (9) On their return from the honeymoon the testator became increasingly unwell and for a period he was treated at Westmead Hospital. On 7 February 2007 the testator was discharged into palliative care at home and he died at home on 10 February after a brief period in Wollongong hospital. 8 The plaintiff gave evidence and also called evidence from Mrs Ursula Schmidt. Michael gave evidence, and called evidence from his brother Daniel, Daniel's wife Sally and Mr Phillip Carey who was the testator's solicitor in Nowra. 9 I have no reason to doubt the reliability of Michael and Sally and there was no challenge to their credit. Michael seemed in particular to be a forthright honest witness who only said what he knew and was not unwilling to make appropriate admissions when they were sought. There was no challenge to the credit of Mrs Schmidt but she did agree that she was a good friend of the plaintiff. So far as Mr Carey is concerned it was submitted that I ought treat his evidence with some caution. Mr Lovas submitted that Mr Carey's evidence about conversations was incomplete (and his files were of a rather disorganised nature) and that the whole tone of his evidence was supportive of the defendant, which given the vagueness of his recollection and limited file notes made it appear that, in effect, he was partisan. I think there is some force in that submission, and I did not have the same level of confidence in his evidence as I did in Michael's and even Daniel and Sally's evidence. However, in saying that I do not wish to suggest that I found him to have been in any way positively untruthful. 10 I did not have confidence in the plaintiff's credibility for a number of reasons. In her answer to the first question that she was asked: see T15.5 - .15 and also T28.10 - .26, concerning whether she was known as "Carol Rixon Browne" she denied that she had. Secondly, she often avoided giving direct answers to questions and was reluctant to make concessions. Mr Lovas gave one example to the contrary to submit that his client was very frank to the court when she admitted that she owned NRMA shares which she had not previously described. I do not see the admission in the same light because it was made after her attention was drawn to a bank account in which there were a number of references to IAG monies and she was required to explain. I have difficulty in accepting her evidence that she had nothing to do with the description of her pension from Centrelink – a pension that was arranged prior to her relationship with the testator – as being a Newstart Allowance and that she had told Centrelink of the error, particularly given that she was not willing to authorise the defendant's solicitor, as had been sought, access to the Centrelink file. Another example is that she was asked about how much time she spent working on air for a local radio station. She seemed to concede that she worked approximately ten to twelve hours for the radio station, only to later say that she only worked six to seven hours when she was being asked about work additional to the time on air, that is work in preparation for the time on air. 11 There were, however, relatively few instances where, as it has turned out, credit is of any particular importance. I should also note in fairness to the plaintiff that there is no suggestion that by having her pension described as a Newstart Allowance – if that is what occurred – she would have received more by that means than she would have received had it been a widow's pension, which is what she said she applied for and intended to receive. 12 There were four matters of factual dispute: (1) The plaintiff claimed that her de facto relationship with the testator had commenced in February 2007 when the testator moved into her cottage. The defendant claimed it had commenced in May/June 2007 when the plaintiff and the testator moved into the flat. (2) The nature of the plaintiff's non-financial contribution to the welfare of the testator. (3) The capacity of the plaintiff to earn income. (4) The plaintiff's actual needs. 13 So far as the capacity of the plaintiff to earn income is concerned the evidence establishes that: (1) she is a qualified nurse who worked as such for 17 years (although she has not worked as a nurse in recent times) and that she has worked as a carer earning approximately $80 a day attending to an elderly lady. That lady, however, was recently admitted to a nursing home and the plaintiff is no longer her carer and the plaintiff has not sought alternative employment of that kind; (2) she had worked in her first husband's trucking business and had office skills and did some clerical work, handling phones and work of that nature: see T18 where this is described in more detail; (3) the plaintiff has also worked on a voluntary basis for the Red Cross approximately four hours a week; (4) the plaintiff has a love and aptitude for radio work and spends at least six hours a week working for the radio station. The defendant submits on the basis of material at T24 to T25 that the period is longer; (5) the plaintiff is a youthful 63, well groomed and articulate, and the defendant submitted she is an attractive woman, gregarious in nature with good people skills, very likely to obtain employment if she wants it and in good health. The plaintiff did admit that she does have good people skills, is a gregarious person and is in good health. 14 I am satisfied that the plaintiff would be able to obtain employment for at least the next five years for a period of time per week if she wanted, but I do take into account Mr Lovas' submission that at 63 she has already passed the normal retirement age for females in this country and I do not think she could be expected to maintain a level of work of even, say, a 25 hours work week until past the age of 68 and I would not expect that she would be able to work past 70. I think it also needs to be taken into account that if she did obtain work it would probably almost certainly be on a part-time basis and at a relatively low rate of income. I see no reason why she would not be able to obtain work as a carer as she has done, particularly since she has nursing experience. I do not agree with Mr Lovas' submission that she is not particularly employable. But as I have said I take into account her age and the fact that as time goes on she will be less able to work and would not be expected to work the sort of hours that she might work at this time if she wanted. 15 I deal now with the question of her needs. This fell into two categories, a property and a capital sum. The plaintiff seeks an amount of $475,000 which is what she submits it would cost to buy a four-bedroom property in an attractive area. The defendant maintains that a two-bedroom apartment, which could be obtained for $175,000 in the Nowra region, is sufficient to meet the plaintiff's needs. Nowra is mentioned because, firstly, that is broadly the area in which the plaintiff currently resides, but secondly because she has at least one adult child who lives in that area. I note that the plaintiff did concede reluctantly that she could make do with a two-bedroom home: see T56.41, but see also T58.10 when she describes the monthly visit of her granddaughter together with her daughter and sometimes her daughter's partner. 16 It is necessary, I think, to consider the provision of a freehold property and the amount of any capital sum together, and I will do so, but focusing on this issue as a starting point I think there is force in Mr Morrissey's submission that a two-bedroom home should be sufficient. However I would be inclined to allow significantly more than the $175,000 that his client puts forward as the appropriate amount. 17 In saying that I take into account a couple of matters. The first is that I can see that there are occasions when a two-bedroom home may not be sufficient for the plaintiff's needs given the visits of her granddaughter, but also because of the circumstance – and this is a factor that I take into account – that the plaintiff, it is agreed, cannot continue to live in the flat or at the farm by reason of the collapse of the relationship between the parties. In those circumstances where the testator had in mind that the plaintiff would continue to reside at the property I think it is appropriate to factor that in and to allow a sum which would be sufficient to enable the plaintiff to buy either a three-bedroom home or a smaller home of a more attractive kind. The defendant's own material makes reference to a number of houses, one of which is described as a private villa with a leafy outlook and which is a two-bedroom home at Brinawarr Street, Bomaderry with an asking price of $235,000. Then there is a property at McLean Street, Nowra for $230,000 which is a three-bedroom home. Again as a preliminary approach to be taken into account, I would regard an amount of $275,000 as a reasonable amount to allow the plaintiff a more fully featured home, whether with an extra bedroom or a more attractive style in the Shoalhaven and Nowra area. 18 I turn now to the issue of the length of time during which the plaintiff and the testator cohabited. As I have said there is no dispute that the plaintiff moved into the flat on the testator's property in May or June 2007. The dispute is whether from February to May that year the testator was cohabiting with the plaintiff at her cottage. 19 Mrs Schmidt offers support for the contention that the testator had moved in to the plaintiff's cottage. It was not disputed by Michael that the testator was visiting the plaintiff at the cottage and staying overnight on occasions. There is evidence from Michael, which I accept, that he often rang his father on his land line and found him at home at the flat and that he saw his father's trousers and underwear on the clothesline at the farm. 20 It is very difficult for outsiders to know how much time out of a week two people are spending together, especially when their homes are as close as that of the plaintiff and testator. I note the persons best able to give evidence on the topic are from the defendant's camp, namely Daniel and Sally, who at all relevant times lived metres from the testator, and they did not give evidence on this point so I am inclined, notwithstanding my doubts as to the plaintiff's veracity, to accept that the testator was spending a good deal of time at the cottage from February to May. 21 I also think there is force in Mr Lovas' submission that it is also relevant to look at the time of the commitment which was made by the testator and that was in December 2006 when he either accepted the plaintiff's proposal of marriage (on the defendant's case) or proposed to the plaintiff (on her case). I do not think it is necessary to determine whether they were in any strict sense cohabiting throughout the whole of that period. I will treat the relationship as having reached a significant level of commitment by December 2006. The plaintiff's evidence that she and the testator had commenced a relationship in 2005 was not challenged. 22 Now I will deal with the nature of the plaintiff's non-financial contribution. There seemed to be little dispute that from June to the date of the marriage the plaintiff took on the role of homemaker, but it is clear that she continued to undertake her voluntary work and her paid work. When the testator became ill it seems to be accepted that the plaintiff did help him, as did Daniel, Sally and to a lesser degree because he was not on the farm, Michael. Each side attempted to minimize the involvement of the other and no doubt this had something to do with the tension created by the testator's ill-health and possibly by the refusal of Daniel and Sally to continue care of the plaintiff's grandchild following their experience with her. 23 The testator did give to Mr Carey, the solicitor, two notes which Mr Carey said were directed to the testator's sons. In one of those notes the testator refers to the plaintiff having looked after him and encouraged his sons to look after her. When the notes were written is unclear but they would suggest that the testator had become aware of the tension which his imminent demise had created. 24 I proceed on the basis that the plaintiff acted in the manner to be expected of a wife both prior to the serious stage of the testator's illness during the period they were cohabiting and after he became very ill, including assisting him at hospital – although the primary care was given by the hospital's doctors, nurses and staff – again in the manner which would be expected of a wife. 25 I come back to the plaintiff's needs. I have referred to the real estate issue. At present the plaintiff is earning no money and gets no income other than her pension. She is in receipt of the widow's pension in the sum of approximately $218.50 per week. She has next to no assets. 26 So far as the other beneficiaries are concerned Daniel does not have much in the way of assets. He has a small share in part of the business conducted by the testator and Michael. He and his wife have three children and he has worked for the business in the past without much recompense. He does not have any significant assets apart from what is to be provided to him under the will. Michael has lent, it is accepted, approximately $335,000 over the years to his father. 27 The testator had a warm relationship with both his sons and with their children, particularly the three children of Daniel and Sally. The estate, having a nett value of approximately $3.1 million, is not insubstantial. The statements of the testator to Mr Carey to which Mr Carey deposes in his affidavit and the change to his will suggests that the testator had second thoughts about his proposed generosity to the plaintiff as evidenced in the first will and that he was determined to countermand his previous instructions. His comments to Mr Carey orally as reported by Mr Carey might suggest a negativity to the plaintiff but his two notes point to an acceptance that she had a claim on his bounty, and although it's not clear when those notes were written I have proceeded on the basis that they were written before the will was prepared in November and provided to Mr Carey about that time. 28 I turn now to the law. Mr Morrissey summarised the law relevant to the case referring me in particular to the High Court decision in Singer v Berghouse (1994) 181 CLR 201 and Bladwell v Davis [2004] NSWCA 170. Mr Lovas accepted the summary of the law provided by Mr Morrissey. It having been conceded that the plaintiff is an eligible person and that the will as amended by the codicil made insufficient provision, the court has to determine what provision should be made out of the estate of $3.1 million for the plaintiff having regard to: (1) the plaintiff's financial position; (2) the size of the estate; (3) the circumstances of the relationship including the length of time of the relationship, particularly the marriage; (4) the relationship of the testator to other persons who have a claim on his bounty; and (5) the need to pay regard to the testator's wishes. 29 Young J, as he then was, in Walker v Walker [2005] NSWSC 1024 cited in Kay v Archbold [2008] NSWSC 245 per White J at [122]: "the Act did not intend to affect freedom of testation except in so far as that freedom had to be abridged in order to ensure that people made proper provision for those who were dependent on them financially or morally." 30 Mr Morrissey submitted that particular relevance should be paid to the short period of the marriage, 84 days, the absence of any financial contribution by the plaintiff, the fact that during the relationship the plaintiff received approximately $43,000 goods and services paid by the testator, and for many of the 84 days of the marriage, the testator was in hospital. I take these matters into account. I also take into account: (1) that the plaintiff is not financially well off at all, but I note she was able to cope on her previous widow's pension (or Newstart Allowance) with one day a week of work at $80 a day before she was married to the testator; (2) cohabitation commenced prior to the marriage, although even with that time, the relationship was for a relatively short period; (3) both the plaintiff and testator were mature persons with adult children who had been previously married; (4) when the plaintiff and testator married they both knew that the testator had only a short time to live. The testator in fact died within three months of the marriage and it was not suggested that this was unexpected; (5) I have regard to the fact that the testator did originally make more generous provisions to the plaintiff, and as I have noted did express gratitude for the plaintiff's care of him in the notes to his sons which he gave to Mr Carey. 31 It is not easy to determine with all these factors what is an appropriate provision, but on the basis that the plaintiff is provided with a two to three bedroom home in the Nowra region at no cost to her, therefore on the basis of the allowance of $275,000 to which I have earlier referred, I would in addition regard it as appropriate that she receive a lump sum as a capital sum. Mr Lovas' submission on behalf of the plaintiff was that she should receive an amount of approximately $450,000. Mr Morrissey's submission on behalf of his client was that an amount of $40,000 was appropriate. Mr Morrissey submitted that any amount should take into account the fact that the plaintiff can work and work for some time, does have a pension, and that it would not be appropriate to award her an amount covering all of her needs. 32 I have come to a view as to that amount of money that I think is appropriate. One additional factor which I take into account is that as envisaged under the will, even as amended by the codicil, the testator had in mind that all of the rates, taxes and insurance would be paid by the estate and not by the plaintiff. I think I need to arrive at a sum which takes into account the absence of any fund of the plaintiff for any contingencies that might befall her. Mr Morrissey submitted I also need to take into account the fact that the plaintiff might remarry. I think that is a real possibility although on the plaintiff's evidence she has no other relationship at present, I accept Mr Morrissey's submission that it is a reasonable possibility that the plaintiff will meet another person and establish a new relationship, but I do not place a great deal of emphasis on the possibility that the plaintiff will remarry because it is such an uncertain matter. I also think it needs to be taken into account that any amount which is set aside as a capital sum and which earns interest will also attract some degree of taxation. 33 The amount which I propose to award when taken into account together with the amount for the property would yield a sum of approximately 15% of the total value of the estate. That figure is $200,000. I note that if $200,000 was invested with a return of 5% per annum it would yield before tax an amount of $10,000 per annum. It is clear that the total of $475,000 is well in excess of what the testator decided to leave the plaintiff but it is in light of the circumstances a figure that I have determined as a proper amount to be paid to the plaintiff out of the estate. 34 [Submissions on costs] The plaintiff's costs should be paid for out of the estate on a party/party basis. The defendant's costs are to be paid on an indemnity basis out the estate. 35 I should note that it was agreed that the contents of the flat should be able to be taken by the plaintiff other than some very specifically identified items being the testator's bedroom suite, crystal ware, a silver cutlery set, an antique cabinet and a carved walking stick. ******** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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