Re an application by Parker[1995] QDC 339

Before ROBIN QC DCJ

IN THE MATTER of the Succession Act 1981

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IN THE MATTER of the Will of DOREEN MAY PARKER late of 46 Bourton Road, Merrimac in the State of Queensland, Widow, deceased

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IN THE MATTER of an application by ROBERT JAMES PARKER under Part IV of the said Act

Supplementary Reasons Published: 18th October 1995

Catchwords:

Testator's family maintenance - payment of applicant's provision and costs delayed until sale of realty at some future time - provision and costs to be secured on realty and bear interest - form of order - solicitor and client costs refused

IN THE MATTER of the Succession Act 1981

-and-

IN THE MATTER of the Will of DOREEN MAY PARKER late of 46 Bourton Road, Merrimac in the State of Queensland, Widow, deceased

-and-

IN THE MATTER of an application by ROBERT JAMES PARKER under Part IV of the said Act

SUPPLEMENTARY REASONS FOR JUDGMENT - ROBIN O.C., D.C.J.

Published the 18th day of October 1995

Written submissions dated 7th and 21st September have been received as to what orders (including costs orders) ought to be made in consequence of the reasons published in this matter on 7th February. As it happens, the only difference between the parties concerns costs, the applicant submitting that he ought to receive costs on a solicitor and client basis, under Rule 368, which is as close as a District Court may come to the complete indemnity Mr. Radcliff says is appropriate, citing de Groot and Nickel, Family Provision in Australia and New Zealand, para. 905 (p. 172) and Re Brasnett (1941) Q.W.N. 32. He also seeks an order that costs bear interest, in circumstances where there may be considerable delay before the provision to be made for the applicant and his costs are paid. In this latter respect I agree; in the former, I do not. Even if there is a “usual” order for costs on a generous basis in “TFM” matters, I consider that in the circumstances of this case, set out in the published reasons, party and party costs are appropriate as to both sides' costs.

I have made changes to what is otherwise an agreed form of order to cover interest on the applicant's costs and the situation that may arise if there is no general interest rate on Queensland judgments, but a rate peculiar to District Courts. I have also made provision to enable resort to the Registrar as a Judge if there are difficulties in settling appropriate forms of documentation to secure the applicant's entitlements. The order will be in terms of the initialled draft.

Before ROBIN QC DCJ

IN THE MATTER of the Succession Act 1981

-and-

IN THE MATTER of the Will of DOREEN MAY PARKER late of 46 Bourton Road, Merrimac in the State of Queensland, Widow, deceased

-and-

IN THE MATTER of an application by ROBERT JAMES PARKER under Part IV of the said Act

Catchwords:

Testator's family maintenance - adult son's application - substantial contribution to building up estate - applicant comfortably off - estate left to another adult son in necessitous circumstances - principal asset of estate 10 acres of land with a single residence, but subdivisional potential - testatrix failed to make provision for applicant as required by Succession Act s. 41(1) provision for applicant deferred until respondent ceases to live in the residence or sells or subdivides the land.

IN THE MATTER of the Succession Act 1981

-and-

IN THE MATTER of the Will of DOREEN MAY PARKER late of 46 Bourton Road, Merrimac in the State of Queensland, Widow, deceased

-and-

IN THE MATTER of an application by ROBERT JAMES PARKER under Part IV of the said Act

REASONS FOR JUDGMENT - ROBIN Q.C., D.C.J.

Delivered the 7th day of February 1995

These proceedings under s. 41 of the Succession Act 1981-1987 pit brother against brother. Warran Jeffery Parker is the executor and sole beneficiary under his late mother's will which incorporates a declaration that he has been favoured over the applicant Robert James Parker and her other children Ray and Valerie on account of provisions made for them by her and her late husband and their more secure financial situations. (In the case of the applicant such provision appears to have been limited to putting up as a security for borrowing by him of a New South Wales freehold property acquired essentially through his efforts.) Mr Moynihan, the solicitor who prepared the will, was obviously apprehensive that application under section 41 might be the result. His evidence shows that the testatrix was insistent, and of sound understanding, when she made the will. She appears to have been influenced by her husband sharing his view that their matrimonial home ought to go to the respondent.

There is little else in the estate. The home is a modest brick veneer residence on 4.3 hectares in Bourton Road, Merrimac. The respondent has lived there since the early 1980's with his parents, until both died. As he put it, he “never left home”. Like all of the children he had a difficult relationship with his father, who seems to have had a problem with alcohol, but he had a very close, affectionate relationship with the testatrix. His own wife moved into the residence in the mid ‘80's, more correctly into the garage which had been converted for his living area. The kitchen of the residence was used in common. Although the testatrix died in 1991, the respondent and his wife are still using the garage, rather than bedrooms of the residence proper. On the property is erected a shed which the testatrix supplied as a workshop in which the respondent could exercise and profit from his skill working with motor vehicles. He has two dogs, two cats, and eight lovebirds, and regards the property as essential to his and their welfare.

The respondent, the youngest child, born in 1952, has suffered from limited scholastic achievements and some significant health problems summarised in Dr Leat's affidavit, which have, he says, worsened and restricted his ability to work since Mrs Parker died. Notwithstanding this, and his extremely limited experience of employment in Queensland since he came here about 1980, the respondent has not been in receipt of government benefits, except for a couple of weeks on the dole at age 17. He has had the advantage of a residence supplied, but otherwise relied upon the support of his wife, who herself has not worked for some years, owing to a back injury, but has been in receipt of workers' compensation. The theory is that following surgery consequent upon the third workers' compensation claim, Mrs Parker will soon be able to return to work. Essentially she and the respondent appear to have nothing, bar some personal and household effects presumably. I have not heard of a motor vehicle, but the respondent refers to himself in evidence as driving along local roads. The rates on the subject property in Bourton Road are $1320 per annum at present, and substantially in arrears, although not to the extent they were at the testatrix's death. I accept the respondent's evidence the arrears would have been paid off if he had not had to fund these proceedings.

Mr Radcliff, for the applicant, who is the oldest child and 14 years older than the respondent, says it would be better if the respondent moved to another residence which he could more easily afford to keep up. He uses only part of the house and the immediate curtilage, and manages to keep mown only an acre or so. Indeed, this mowing is the only current activity of the respondent I have heard of. The proposition that the respondent should be forced to move somewhere else for his own good has no appeal to me; he has an understandable attachment to his home of the last 14 or 15 years. I find no more appeal in the proposition that a sale of the property ought to be forced to produce a fund for the applicant to enjoy pursuant to an order under s. 41.

This has been a keenly contested matter, one of the issues being the value of the Bourton Road property. As at the date of the testatrix's death the Valuer General's valuation of the site (unimproved) was $150,000. The respondent, who appears to have no relevant expertise, has made a concession that by now the value is $200,000. These figures (the former anyway) leave out of account the value of improvements, which are the house, essentially (it cost between $30,000 and $40,000 to build - the applicant was in fact the builder and it has been contentious whether he contributed anything substantial, as he asserts), and the shed. The applicant called Mr Deeley, a registered valuer with some experience in the area as a real estate agent, who said $300,000 was the minimum present “kerbside” value. Mr Skuse (for the respondent) submits this sum is far too high, in the context of a rather sterile debate as to whether the Court is dealing with a “small estate”, which he submitted might have relevant consequences; such as any s. 41 application's being mischievous, at least one (like the present) in which the applicant is far from existing in grinding poverty.

The land is envisaged by the local authority as suitable for closer development. An inhibiting factor is that the bulk of it lies on a flood plain, which will be suitable for limited development only with filling. Mr Deeley says that the slope of properties in the area is such that the “flood plain” portions can be identified without much possibility of debate. Exhibit 14, admitted over Mr Radcliff's strenuous objection to the informality of proof offered, shows roughly where the 1974 “flood line” was located. I do not regard the line as at all precise, or the document as showing with any precision what rezoning or development the local authority may agree to in the end.

The narrow street frontage of the property may make subdivision difficult, but my approach is that if the state of the market warrants it, the property, perhaps in association with adjoining land, will be developed more intensively and will not be left languishing.

The evidence satisfies me that what is at present a single homesite is capable of becoming a site for multiple dwellings, maybe 20 or even 30 or more, if filling is undertaken. Mr Deeley's $300,000 makes no assumptions about this, simply opining that a purchaser would pay $300,000 today.

It is an interesting coincidence that the applicant and his wife own a nearby block in Bourton Road, purchased to hold their residence by them about the same time as Mr and Mrs Parker senior purchased No. 46 (with considerable assistance, including some interim financial assistance, from the applicant). It is smaller than the estate property, but has rather more land above the flood plain. The applicant has sought approval for 51 “units”, which Mr Skuse seized on to submit that with a multiplier of $19,000, the applicant's land was worth $969,000. I accept the applicant's evidence that he will be doing very well if he gets approval for 40 - producing a value of $760,000 says Mr Skuse. Yet he is resistant to applying any similar calculation to the estate property, wishing to present it as no more than a relatively humble residence for his client and his wife (they have no children, and are of ages which make it unlikely rather than likely that their wish for children will be fulfilled), without potential to produce some substantial windfall which would leave Warran Parker with not only an equivalent residence, but a substantial sum of money. This latter alternative, I am convinced, is the true situation.

I am convinced that the future of the land is more intensive development, and that when an attractive enough scheme or sale emerges, the respondent will not resist.

The case is quite unlike that of the typical “small estate” containing only a house on a standard building allotment, whose market value is likely to remain in line with historical relativities, barring something unexpected, such as some new large development nearby. This property, because it is so large, has substantial potential which cannot be ignored. Mr Skuse asks me to be blind to all future prospects and value the property once and for all, shorn of potential it might have, at something like $200,000, little more than enough to get his client moved into a modest residence elsewhere) and declare this is a small estate, and the application vexatious. This I am not prepared to do. While it may be just that the respondent keep “his” residence, it may well not be just (indeed I think it would not be) that the respondent be placed in an equivalent residence with a six figure sum of money in his pocket as well, thanks to his mother's will, to the entire exclusion of the applicant.

Although there was mention during the hearing of unusual properties making up an estate in which s. 41 is involved, such as goldmines which may prove valuable or worthless, in the end, I find that this case does not involve such difficult or fanciful speculation. I have no difficulty in accepting Mr Deeley's figure, which means that $300,000 could be got for the property any time, very likely more. The estate is not a “small” one, and, being as sympathetic to the respondent as one could be, there is no manifest injustice in an outcome that deprives him of part of such a handsome sum, should the applicant establish his case under s. 41. I have from the outset been sympathetic to the respondent's plea that he not be thrown out of his home, and I am effectively invited to protect him against that by Mr Radcliff's submission that the coming into effect of s. 41 orders may be delayed for example, to follow a life interest: De Groot and Nickel, Family Provision in Australia and New Zealand 156, Dickie, Family Provision After Death 158. He suggests a delay of two years. I think justice would be done by waiting until Mr Warran Parker is ready to sell, which may be longer, or may not.

There is no present urgency about the applicant coming into possession of any provision that might be made for him under s. 41. Thus I come to the next difficulty which Mr Skuse says faces the applicant, to the extent of the Court lacking jurisdiction under s. 41. Mr Skuse says the applicant is too rich. He is able to submit, with justification, that Mr Robert Parker already has more than is contained in the whole estate. If the applicant (who is in fact a joint owner, directly or through other entities, with his wife of the relevant assets, all of which are heavily mortgaged to a bank) be treated as able to realize what he has advantageously, this is the case. It does not follow that the application fails.

Considerable reference was made to the High Court of Australia's recent decision in Singer v Berghouse (No. 2) FC 94/035, 14.9.94 in litigation which attracted some interesting comment by P.P. McGuiness (particularly in respect of the costs generated) in the Melbourne Age 21.9.94 (P. 14). A widow's application under New South Wales provisions (which are far from identical with s. 41) failed before a Master in the Supreme Court. The marriage, the second for each spouse, lasted less than a year; both of them had substantial assets and independent means when they contracted it, and by an antenuptial agreement arranged that each spouse had at the marriage should go to his or her own children. Undeterred by the agreement, the widow made application. Her assets (which included a residence, a secure rental income, $320,000 in bank deposits, and a pension after 7 years which would increase after a further three) were roughly equivalent to those of the testator, who left everything to his son, something in excess of $550,000 (although the estate had been greatly reduced by costs). The Master considered she had failed to provide any evidence of what her needs were or what lump sum was necessary to meet them.

In the Court of Appeal and the High Court the Master's decision was upheld by bare majorities. The minority judges would have ordered provision for the widow; Toohey J dissenting, fixed it at $50,000 (plus acquitting her of having to account for $8,400 of estate money which appeared to have gone missing in her hands) to obviate the need for further expenditure on an agreement in the lower Court. The majority of the High Court appear to have expressed no horror at the proposition that the Master might properly have acceded to the application; they treated the matter, as the Court of Appeal had, as one of discretion. The widow-applicant's difficult task, at which she failed, was described as being to show that the Master made “an entirely erroneous estimate of what, in the circumstances, was an adequate provision for (her) proper maintenance, education and advancement in life.” His conclusion was said to be “one which the Master was entitled to reach on the materials before him”. As Sheller JA put it in the Court of appeal, “I am not persuaded that the Master erred in the exercise of his discretion”.

Toohey J said:

Mr Robert Parker is in rather a similar case to Bernice Singer. Mr Skuse's submission that the present application fails because he does not show “need” is based on Re Bodman (1972) Qd. R. 281, 284. That decision attracted the criticism of our Full Court in Re Elwell (1977) Qd.R. 141, 145 where the well known comments of Fullager J in Re Sinnott (1948) VLR 279, 281:

were adopted. His Honour at 280 had referred to the requirement, “generally speaking” of some “special claim” to justify success of a claim by an adult son. There is less enthusiasm these days than there was in 1947 for the creation of disadvantaged categories of applicants. I have mentioned this matter by way of introducing Gibbs J's well-known dictum in Hughes v National Trustees, Executors and Agency Co. of Australia Limited (1979) 143 CLR 134, 147 (in which Mason and Aickin JJ agreed):

Elwell makes it clear that establishment of “need” is in no sense a prerequisite to establishing a “moral claim”. To the extent these matters are relevant, they have to be looked at together. “Need” in this context is a relative concept.

I accept the applicant's evidence as to his parents' acquisition of the estate land and the construction of the residence as well as the shed - without his “contributions” none of this should have been achieved. There may not be much unusual about a builder son assisting his parents to get a house constructed by a free gift of his labour and management and a few thousands of dollars of expenditure to boot, on “acreage” with subdivisional potential (similar to his own block) which he seeks out for them and assists them to purchase. But the applicant's contributions have, in truth, been lifelong. He had provided greatly of his labour to enable an earlier residence to be constructed for his parents in New South Wales, sacrificing his own job to do it. He had willingly abandoned his own private interests to fill in when his father's loss of his driving licence made his services necessary for the operation of his father's business. The matters I have established here are not exhaustive. The applicant was always a dutiful son, and his efforts undeniably contributed to the “amassing of the estate” in a way his siblings did not match (perhaps for lack of opportunity, rather than lack of willingness).

If it be necessary to search for some breach of a moral obligation in the testatrix to provide something for the appellant from her estate (which involves a gloss upon the language of s. 41(1)). I am in no doubt that the testatrix was in breach. The words of Toohey J and Kirby P as appearing in Toohey J's judgment in Singer v Berghouse apply mutatis mutandis here, in this respect. There is, of course, a competing moral claim of the respondent, but I find that satisfaction of that does not require that he enjoy the whole fruits of any fund generated from the sale of the estate property over and above what is needed to acquire an adequate residence, which may well be something smaller than the house the applicant built; he and his wife have still not occupied the whole of the house.

I shall digress at this point to say, in relation to a notebook containing a list of expenditure in the construction of that house which the respondent believes to be an exhaustive list, (establishing that the applicant contributed nothing, or at least expended nothing) is nothing of the kind. I find it was an accounting to satisfy the testatrix that a fund of $31,000 or $32,000 she established under the applicant's control to permit construction of the house was properly applied, in other words that the applicant misapplied none of it. Once the whole fund was accounted for, the testatrix having no more to spend, there was no point in the applicant providing any further details of expenditure, although I am satisfied that there were considerable further expenditures. He has indeed, provided some documentation to show this to his late mother, not in the context of a request for payment, but because hers was a convenient place at which the documents might be kept. They have not been found for purposes of the discovery which took place. This is not the applicant's fault.

I would say of the respondent that I was impressed by him as a fair-minded witness. To the extent he has expressed suspicion of the applicant's dealings with his parents, I think he is quite wide of the mark, and simply driven to hostile surmise by the heat of this litigation. He appears to me to have set out seeking to preserve a roof over his head, and forestall a forced sale of the estate property. Once assured by comments of mine he was not at risk of the worst, he has engaged in an attempt, of which I do not approve, to ensure that the applicant gains no benefit from the handsome price which I think all members of the family expect the estate property to bring if it is put on the market.

The respondent would justifiably be smarting under the opprobrium of being publicly designated the “black sheep” of the family - an unfortunate choice of words by the applicant who is certainly a far more energetic, ambitious and risk-taking character. I don't suggest the applicant's evidence is universally preferred by me - one respect in which the respondent seems to me more likely to be correct is the date of erection of the shed, which I think more likely to have been 1986 than any earlier year. This detail does not weaken my belief in the applicant's account at the hearing of his contribution to the building up of the estate, nor the confidence I feel in finding, as I do, that within the meaning of s. 41(1), “adequate provision is not made from the estate for the proper maintenance and support of the deceased person's ... child” (the applicant). Reference to subsection (1A) is instructive, in showing the requirement of need to be established by an applicant who is a “dependant”, rather than a child or spouse. If “need” comes into the matter at all, it is clearly as a relative concept. Thus Kirby P in Hunter v Hunter (1987) 8 NSWLR 573, much relied on by Mr Skuse, refers to “proper needs”. Particularly where an estate is “large” (but in my opinion not exclusively so) “proper needs” may be found to exist which many would regard as extravagances or luxuries. See Re Buckland (No. 2) (1967) V.R. 3.

Mr Skuse referred as well to our Court of Appeal's unreported decision in Perpetual Trustees Queensland Limited v Mayne CCA 92/417 Appeal 114/92, 19.11.92 (designated CA 400 in the Supreme Court Library's volumes). The applicant was a grazier's son, comfortably off, excluded from participation in his father's estate. His position is comparable with the applicant's, who is probably worth $650,000 to $700,000 or so nett, I find, after considering the evidence and the opposed submissions, assuming he can get present day market value for the assets he owns or controls. He has been trying unsuccessfully for years to sell a 27 unit motel at Palm Beach which he constructed with a view to profitable sale but has been stuck with and had to operate unprofitably (at least until recently). He has a block of shops returning a good income which has subsidised the motel. He has recently purchased a 16 perch block adjoining the motel which is worth about what was paid for it. A couple of other properties have had to be sold at the bank's insistence. The bank is owed $1,195,000 and may require further sales. The applicant's wife has a similar net worth to him, perhaps something more. Mr Skuse says it is offensive to have a man whose worth is twice the estate's applying under s. 41. In my view such an application may in some circumstances be entitled to succeed. The present are such circumstances. The applicant is not so wealthy as to be insulated against reverses of fortune. His ability to earn an income depends on his continuing to be able to operate (and/or get work) as a registered builder. Perhaps I should say that I do not accept that the income figures he presented to the Court tell the full story of recent times. I treat the bottom line as an “accountant's figure” which is consistent with the appellant's being able to support a lifestyle rather more comfortable than the bottom line would suggest, if only because some of the legitimate building expenditures incurred would create certain private benefits. (This comment is speculation on my part, and not a finding, the issue not having been explored at the hearing in any way, despite coments by me which might have seemed to be inviting Mr Skuse to do it.) The respondent, effectively, has no income, relying on what his wife earns; he has not found it necessary to obtain any government pension or similar payment. The estate is not capable, in its present form, of providing income support for the respondent; he has not presented a case that he needs income support. The present matter has been argued on the basis of examination of assets, rather than income or income-earning capacities.

In Mayne the trial judge had ordered provision for the applicant of $550,000, which represented about a third of the estate. Apart from $300,000 an aggregate which went in legacies to two sisters, everything else went to the applicant's brother. The Court of Appeal reduced the provision ordered to $300,000. The outcome was justified on the basis of the applicant's contributions towards building up of the estate creating “a moral claim which the testator should have recognised” - (per Pincus J.A.); the President and de Jersey J. upheld the primary judge's finding in terms of the language of s. 41(1).

I make a similar finding. The parties are invited to make submissions seeking variations of the proposed orders which I now set out but withhold formally making. I wish to make it clear that the applicant has, at this stage, no right to force disposal of the testatrix's land. I order that provision be made for the applicant Robert James Parker from the estate of Doreen May Parker by a legacy of $25,000 to accrue interest from time to time from 31 December 1995 until payment at the most recent published rate applicable to judgments generally in Queensland, and to be charged upon the testator's realty at 46 Bourton Road, Merrimac; payment of such legacy to be due on the sale of all or any part of such realty, or its ceasing to be the residence of Warran Jeffery parker, whichever first occurs.

I order that the costs of the parties be taxed (if not agreed) and paid out of the estate, those of the respondent in priority to payment of the legacy, those of the applicant when payment of the legacy become due.

I give the parties liberty to apply.