DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an application under s 41 of the Succession Act 1981 for an order that adequate provision be made for the proper maintenance and support of the applicant out of the estate of the applicant’s deceased mother (“the testatrix”).

2. [2]
   The testatrix died on 24 September 1998. She was predeceased by her husband but survived by three sons and a daughter. She left a will dated 18 July 1996 in respect of which probate was granted on 24 November 1998 to her son Darrell Hiscock as executor. By originating summonses filed in the Brisbane Registry of the Supreme Court, the testatrix’s two other sons Terrence and Warren (known as “Bill”) and her daughter Pamela applied for provision from the will. All the applications except for that of Bill resolved prior to trial. His application was remitted to this Court and comprises the matter now before me.

3. [3]
   The applicant is presently 60 years old and has four children. One is presently completing high school and intends to study at the University of Newcastle, requiring him to live away from home with the support of the applicant. The applicant’s second youngest child is said to be a particularly independent and resourceful girl who was able to support herself effectively through university by taking part-time work. The applicant states that he has been unable to give her any real financial support. The applicant’s son Billy is aged 32 and is said to be struggling financially at present and at times is provided with accommodation and minimal intermittent financial support by the applicant.

4. [4]
   Under the terms of the will of the testatrix the applicant is to receive the sum of $25,000-00 (clause 3(b)) and one half of the balance of the proceeds of the sale of the testatrix’s residence at Earle Haven in Nerang, after $5,000-00 has been paid to the respondent, Terrence Robert Hiscock from such sale, (clause 5(b)(ii)). This is likely to yield a further sum of approximately $40,000-00 to the applicant. The respondent is the sole legatee of a home unit at Fairlight in New South Wales (clause 4) and of the residue of the estate of the testatrix (clause 10).

5. [5]
   The value of the estate is a matter of some contention. The applicant contends that the value of the estate, against which the applicant’s claim should be assessed, is approximately $802,000-00. The applicant submits that it is incorrect in principle to deduct from the notional value of the estate the amount of the parties’ costs of the present proceeding. However, as was pointed out by McLaughlin M in Bladwell v Davis; Davis v Bladwell [2003] NSWSC 882 at para 11:

“In calculating the value of the estate available for distribution the costs of the present proceedings must be taken into consideration since, if the plaintiffs are successful in their claim, they will be entitled to an order that their costs be paid out of the estate, whilst the defendant, in any event, is entitled to an order for payment of her costs out of the estate.”

6. [6]
   The solicitor for the respondent has deposed to having obtained information from various sources as to the value of the assets and liabilities of the estate. He has prepared a spreadsheet detailing the assets and liabilities of the estate which reveals that the net value of the estate (as at 29 September 2004) was      $561,626-40. This figure takes into account legal fees arising from these proceedings. I am prepared to accept this figure as representing the value of the estate as at the date of trial. I do not include in this figure a sum of $90,000-00 which, the applicant contends, represents a debt owed to the estate by the executor and residuary beneficiary (that is, the respondent). The evidence of the respondent on this point, which I accept, was that his mother forgave this sum which was said to represent an amount of goodwill flowing from a saddlery business in Tamworth which was transferred by the testatrix to the respondent in 1971.
7. [7]
   A scheme for family provision applications has been established by Part 4 of the Succession Act 1981. the process is governed by s 41 which provides:

Estate of deceased person liable for maintenance

41(1)If any person (the ‘deceased person’) dies whether testate or intestate and in terms of the will or as a result of the intestacy adequate provision is not made from the estate for the proper maintenance and support of the deceased person’s spouse, child or dependant, the court may, in its discretion, on application by or on behalf of the said spouse, child or dependant, order that such provision as the court thinks fit shall be made out of the estate of the deceased person for such spouse, child or dependant.”

8. [8]
   The task of the court, then, is to determine whether adequate provision has been made for the applicant. (Bird v Bird [2002] QSC 202 per White J at para 26). As counsel for the respondent, Mr Morgan, points out in his written submissions, it is necessary at the outset to address the threshold question of what is ‘proper maintenance and support’ in this instance, because the resolution of that question on the facts of a particular case is fundamental both to the Court’s jurisdiction to interfere with the will and the process of assessing the quantum of any claim. In considering analogous New South Wales legislation the High Court in Singer v Berghouse (1994) 181 CLR 201 at 209, 210 per Mason CJ, Deane and McHugh JJ, said:

“The first question is, was provision (if any) made for the applicant ‘inadequate for [his or her] proper maintenance, education and advancement in life?’   The difference between ‘adequate’ and ‘proper’ and the interrelationship which exists between ‘adequate provision’ and ‘proper maintenance’ etc. were explained in Bosch v Perpetual Trustee Co Ltd [1938] AC at p 476. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.”

9. [9]
   The financial position of the applicant is not strong. He currently derives his income from a small business named Namoi Valley Electrics which he operates in Gunnedah in New South Wales. For the last three years (2003, 2002, 2001) the profit from the business has averaged $8,713-00 per annum. This equates to $167-00 per week. In 2003 the applicant drew wages of approximately $250 to $280 per week. The position in respect of the current financial year is not expected to show any improvement. The applicant works in the business only four days per week because there is insufficient work to warrant a five day working week. The number of sales staff has been reduced over the years and there is now one part-time assistant who undertakes book keeping duties and cleaning. The applicant no longer carries out electrical trades work as he cannot afford the insurance. The applicant claims that he is struggling financially at present. The district surrounding Gunnedah is said by the applicant to have not been going well in recent years, partly due to the continuing drought and also to the closure of two coal mines and an abattoir. This, says the applicant, has had an impact on small businesses in Gunnedah. I accept the applicant’s evidence in this regard notwithstanding that to the contrary by the respondent who thought that the town was booming. I prefer the applicant’s evidence on this because he is more likely to know of the condition of the town in which he resides than someone who lives some distance from Gunnedah. He has also identified some specific causes of the economic decline of the district. By contrast, the respondent’s evidence was very general on this point and the respondent seems to have no connection with the Gunnedah district.

10. [10]
    The applicant currently lives in the same building where his shop is located in Gunnedah. By residing in the attached residence the applicant avoids having to pay rent. However, the residence is in such poor condition that it may have to be demolished. The applicant acknowledges that the condition of the building does not assist with the retail aspect of his business but says that he does not have the funds to be able to present it in a better condition. I accept his evidence on this point.

11. [11]
    The applicant owns a rental property at Curlewis in New South Wales, which is not far from Gunnedah. This property was valued at $42,000-00 in March 2000 but, according to the applicant, property values in Curlewis have also been affected by the loss of jobs in the coal mines and the abattoir. He has been unable to find tenants for this property for several years. The last tenants caused extensive major damage to the house which has not yet been properly fixed because of a shortage of funds. In any event, the applicant is reluctant to expend further monies on the property knowing that the prospects of obtaining a tenant are slim.

12. [12]
    In addition to the property at Curlewis, the applicant owns some land at Little Conadilly Street in Gunnedah. This was purchased in 1997 for $39,000-00. The land was valued in 2000 at $30,000-00. At the time of the valuation some rental income was being earned by agisting cattle, however this has not occurred for several years and the applicant has been unable to attain any return from this property. The applicant states that he is aware of many vacant commercial and industrial properties in the business area at present and it is extremely difficult to derive an income from this type of property.

13. [13]
    The two real estate investments owned by the applicant provide a negative income to him because he must pay rates and any associated expenses but derives no return. The prospects of selling any of the applicant’s properties are not bright. With respect to the business, the applicant does not believe he would be able to find a buyer because of the extremely poor condition of the building and also because the return on the investment is so low that there is little, if any, goodwill in the business. The other two properties which are returning a negative cash flow would also, in the applicant’s view, be difficult to sell due to the existing poor economic conditions. If a buyer could be located for these properties the applicant expects that he would obtain an extremely low price for each property, well below the valuations prepared in 2000.

14. [14]
    The applicant describes his quality of life currently as quite poor and states that he is simply carving out a very basic existence from the small amount of income generated by his business in Gunnedah. He sees little prospect of improvement, given the state of the regional economy and believes that he does not have the ability to develop a new career or business opportunity during his working life. He is 60 years old. He has superannuation funds of some $8,000-00.

15. [15]
    Despite the respondent’s assertion that the applicant is not a poor man, that assessment is clearly very much dependent upon the future economic recovery in the Gunnedah district. Even if one assumes that some improvement will occur in the future, the present financial circumstances of the applicant must be regarded, in my view, as rather dismal. To suggest, as does the respondent, that the one remaining staff member of Namoi Valley Electrics should be retrenched in order to make available to the applicant funds currently paid in wages, completely overlooks the fact that this employee performs, amongst other duties, the book keeping for the business. The applicant is not able to carry out this function by himself and it is difficult to understand how the business could continue to operate if this suggestion were to be adopted. I accept that the applicant’s quality of life is quite poor and that he is presently carving out a very basic existence. This is, I am satisfied, likely to continue for the foreseeable future.

16. [16]
    The total value of the applicant’s assets (the electrical repair business and adjoining accommodation, together with a parcel of land at Gunnedah and a house at Curlewis) is approximately $150,000-00 with liabilities of some $30,000-00. By contrast, the respondent’s net assets were said (as at March 2000) to total $671,500-00 (excluding the inheritance) together with an annual income of $83,000-00. In July 2002 the respondent deposed that his assets and liabilities remained unchanged. In his testimony at the hearing of this application the respondent thought that his taxable income for 2004 was $70,000-00.

17. [17]
    I turn to consider the relationship between the applicant and the deceased. This was described by the applicant in his evidence as “excellent”. Further details were elicited in the passage following:

“Did you speak to her?--  Yes.

By telephone or face to face or both?--  I visited her in her unit at Nerang on several occasions. I’ve had a good relationship with her all my life. My kids went and visited her when she was in Manly mostly. When she moved into the small place at – on the Gold Coast I didn’t come up very often, but I spoke to her on at least a weekly basis.

Did you exchange letters or cards or gifts?--  My mother wrote to me often.

And did you write to her?--  No. My kids did. My kids sent her cards and all that sort of thing, but I was just direct – she wrote to me often enough. We spoke often enough. I was busy getting about my daily life. I don’t write letters to anybody.”

18. [18]
    In defending the existing will, the respondent claims to be the dutiful son in this case. I accept that the respondent did enjoy a close filial relationship with his mother. He moved locations and furthered his mother’s business interests. He contributed significantly to the value of the assets of his mother by operating a retail business of hers in Tamworth, thus enabling his mother to draw profits from the business which she used to build up a real estate portfolio including the unit at Fairlight. The respondent maintained daily contact with his mother and assisted her as she became elderly.

19. [19]
    In assessing the competing interests in this case, however, it is important to bear in mind that the applicant was faced with a considerable drive of some six to eight hours in order to visit his mother at Nerang. It is hardly surprising that visits were limited to a few in number. I am satisfied on the evidence that the applicant maintained regular and frequent contact with his mother by at least weekly telephone calls and enjoyed an ongoing close relationship with her.

20. [20]
    I accept the submission of counsel for the respondent executor that the jurisdiction conferred on the Court in a case of this nature is one to be exercised sparingly. Bearing this in mind, however, I am left with a strong impression that in all of the circumstances of this case the applicant has been left without adequate provision for his proper maintenance. This determination completes the first stage of the two-stage process identified in Singer. The second stage which now arises requires the Court to decide what provision ought to be made out of the deceased’s estate for the applicant (Singer v Berghouse at 208).

21. [21]
    Similar considerations arise with respect to the second stage of the process as with the first, but, in addition, the Court is called upon to exercise its discretion in making an order that would provide the applicant with what the Court determines to be a level of proper maintenance and support. The relevant time at which this assessment is to be made is the date of the testatrix’s death (in this case,              24 September 1998). See Dunn v Dunn (1959) 100 CLR 361. In making the determination, proper respect is to be paid to the right of the testamentary disposition, which, I accept, is the fundamental premise upon which the relevant provisions of the Succession Act are based. Accordingly, any determination by the Court should limit its disturbance of the will of the testatrix to that which is necessary to achieve the purposes of the Act.

22. [22]
    Bearing these matters in mind, I am of the view that the provision of a proper level of maintenance and support to the applicant requires that he should receive a total benefit of $150,000-00 from the estate of his deceased mother. I therefore order that in lieu of the benefits given to him by the will of the late Louisa Ann Hiscock, the applicant Warren William Hiscock receive a legacy in the sum of $150,000-00.

23. [23]
    I will, if required, hear submissions in due course in relation to costs.