Barnett v McLeod - [2023] SASC 128

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction)
BARNETT v MCLEOD & ORS
[2023] SASC 128
Judgment of the Honourable Justice Stanley
7 September 2023
SUCCESSION - FAMILY PROVISION - REQUIREMENT FOR ADEQUATE AND PROPER MAINTENANCE - WHETHER APPLICANT LEFT WITH INSUFFICIENT PROVISION - CLAIMS BY CHILDREN
SUCCESSION - FAMILY PROVISION - REQUIREMENT FOR ADEQUATE AND PROPER MAINTENANCE - DUTY OF TESTATOR - DUTY TO CHILDREN
SUCCESSION - FAMILY PROVISION - CRITERIA FOR DETERMINING APPLICATION - GENERALLY - PRINCIPLES OF EXERCISE OF DISCRETION
SUCCESSION - FAMILY PROVISION - CRITERIA FOR DETERMINING APPLICATION - TREATMENT OF PARTICULAR APPLICANTS - CHILDREN - ADULT CHILDREN GENERALLY
This is an application pursuant to the Inheritance (Family Provision) Act 1972 (SA). The applicant seeks further provision from the estate of the deceased.
The deceased, Denise Elizabeth Richards, was survived by her only child, the applicant, and her grandchildren, the third and fourth respondents. The deceased left a will dated 1 April 2020. Following relatively minor legacies, she provided for the applicant to receive a $30,000 legacy, and for the residue of the estate to be divided equally between the third and fourth respondents.
The estimated net position of the estate, after payment of legal fees and expenses and after payment of legacies exclusive of the applicant’s legacy is $1,217,762.08. The applicant owns no property, has superannuation and no other assets of significance. He earns income of $48,000 per annum (pre-tax), and his wife also earns an income of approximately $40,000 per annum (pre-tax). The applicant and his wife are entirely responsible for providing for the third and fourth respondents. There is no evidence of disentitling conduct.
The respondents accept that the applicant has been left without adequate provision for his proper maintenance, education and advancement in life, but contend that he does not point to dire or urgent financial need.
At issue is the discretionary question to decide what provision ought to be made for the applicant out of the deceased’s estate.
Held:
1. Pursuant to s 7 of the Inheritance (Family Provision) Act 1972 (SA), in lieu of the provision in sub clause 7.1 and schedule 3 of the deceased’s will for the gift and bequest of $30,000 to the applicant, the applicant is to receive the sum of $450,000.
2. Provision of the additional sum of $420,000 is to be made from the residue of the deceased’s estate.
3. The question of costs is reserved.
Inheritance (Family Provision) Act 1972 (SA) s 7, referred to.
Bowyer v Wood (2007) 99 SASR 19; Brennan v Mansfield [2013] SASC 83; Campbell v Hemmings [2015] NSWSC 1592; Chapple v Wilcox [2014] NSWCA 392; Lemon v Mead (2017) 53 WAR 76; Lloyd-Williams v Mayfield (2005) 63 NSWLR 1; McCosker v McCosker (1957) 97 CLR 566; Piper v Fraser & Ors [2020] SASC 239; Singer v Berghouse (1994) 181 CLR 201; Wenham v Wenham & Ors [2023] SASC 89; Worladge & Anor v Doddridge & Ors (1957) 97…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Barnett v McLeod

Details

AGLC: Barnett v McLeod [2023] SASC 128
Case: [2023] SASC 128
Decision Date

CaseChat Overview and Summary

In the case of Barnett v McLeod, the parties were involved in a dispute regarding the distribution of the deceased's estate. The deceased had left a will which specified certain bequests and trusts. The primary issue before the court was whether Benjamin, the deceased's son, had been left without adequate provision for his proper maintenance, education, and advancement in life, and if so, what provision should be made out of the deceased's estate for his benefit.

The court determined that while Benjamin had not been left in financial distress, the deceased had indeed left him without adequate provision. The court recognised that the deceased's moral obligation to Benjamin was not fully met by the bequest of $30,000, particularly considering his family's need for a secure residence. The court observed that proper and adequate provision should allow Benjamin to provide a stable home for his family. The court concluded that the deceased's intention to leave the bulk of her estate to her grandsons, Kaiden and Darcy, should be respected, but it was also necessary to provide Benjamin with a sufficient sum to ensure his family's stability.

The court exercised its discretion under relevant legislation to adjust the testamentary disposition. It was decided that the bequest to Benjamin should be increased from $30,000 to $450,000, leaving the majority of the estate to Kaiden and Darcy. The court held that this adjustment met the requirements of adequate and proper provision, balancing the deceased's testamentary intentions with the moral claims of the parties involved.

In conclusion, the court granted the application and ordered that Benjamin was to receive $450,000 from the residue of the deceased’s estate. The court directed the parties to prepare minutes of order reflecting its reasons and scheduled a hearing to discuss costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

After payment of specific legacies, the deceased’s estate is approximately $1.2 million.[19] In forming a view as to what adequate and proper provision requires in this case I note that the additional legacy of $420,000 represents approximately one third of the residue of the deceased’s estate. That still leaves a third each in trust to Kaiden and Darcy upon attaining their majority. I expect the children’s inheritance will be soundly invested and increase over time. I consider that pays due deference to the deceased’s testamentary intention that the bulk of her estate should be left to her grandsons while meeting her only child’s moral claim. It strikes the right of balance between provision claims and testamentary freedom. In all the circumstances it is just and convenient to adjust the testamentary disposition made by the deceased by effectively varying the monetary bequest made to Benjamin by the deceased from $30,000 to $450,000. This will still leave Kaiden and Darcy the overwhelming majority of the deceased’s estate.[19] Excluding the specific legacy made to the applicant.Conclusion I would grant the application. I order that pursuant to s 7 of the Act, in lieu of the provision in sub clause 7.1 and schedule 3 of the deceased’s will for the gift and bequest of $30,000 to Benjamin, Benjamin is to receive the sum of $450,000. Provision of the additional sum of $420,000 is to be made from the residue of the deceased’s estate. I direct the parties to bring into Court minutes of order that reflect my reasons. I would hear the parties as to costs.

Ratio Decidendi

Legal Principle Established

In this case Benjamin agrees that it is in the interests of the minor respondents to have a secure place to live. However, he submits that there is nothing in the Statement of Agreed Facts that should lead to a finding that Benjamin could secure a mortgage to assist in the purchase of suitable accommodation for himself and his family. The Statement of Agreed Facts discloses that Benjamin and his wife have an annual gross income of $84,000, their income and expenditure is finely balanced, and they have two children who are dependent upon them. In the circumstances, an inference can be drawn that it is unlikely that he would be able to secure finance to assist in the purchase of a home. Consideration The exercise to be undertaken by the Court requires it to carry out what has been described as a two-stage process. The first stage calls for a determination of whether Benjamin has been left without adequate provision for his proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in his favour, requires the Court to decide what provision ought to be made out of the deceased’s estate for Benjamin’s benefit. The first stage has been described as the ‘jurisdictional question’.[15][15] Singer v Berghouse [1994] HCA 40, (1994) 181 CLR 201, 208-209. In this case there is no issue in relation to the first stage, namely, the jurisdictional question. What is at issue is what provision ought to be made out of the deceased’s estate for Benjamin. That involves the exercise of an evaluative as much as a discretionary judgment.[16] [16] Singer v Berghouse [1994] HCA 40, (1994) 181 CLR 201, 210-211. I accept the respondents’ submission that there is no evidence that Benjamin is in financial distress. However, that is not the test. Rather the question is, the Court having found that he has been left without adequate provision, what provision ought to be made out of the deceased’s estate for him. In Lloyd-Williams v Mayfield[17] Bryson JA, with whom Giles JA and Stein AJA agreed, observed that financial need is usually prominent in family provision cases due to the limited scale of resources available. However, financial need should not be considered an underlying legal limit on provision. In Lloyd-Williams v Mayfield the lack of any hardship suffered by the beneficiary of the estate allowed the focus to shift to provision for future needs such as, inter alia, housing, rather than on existing financial needs. In this case I am satisfied that there is an existing need to make provision for adequate housing. [17] [2005] NSWCA 189, (2005) 63 NSWLR 1. In my view proper and adequate provision should be enough for Benjamin to have the reasonable means of providing a secure residence for his wife and their children.[18] In that way not only is the deceased’s moral obligation to him satisfied but so are the interests of both of the children who will not come into their inheritance until they attain the age of eighteen. Kaiden is twelve years of age. Darcy is nine years of age. The provision to Benjamin of a sufficient sum to enable him to purchase a house will provide his children with the stability of a settled home through their teenage years. Absent provision from the deceased’s will of such a legacy, Kaiden and Darcy would be denied that benefit. Their parents plainly lack the financial capacity to do so without additional provision being made in favour of Benjamin from the deceased’s will. [18] Brennan v Mansfield [2013] SASC 83 at [65].