Bartlett v Coomber - [2008] NSWCA 100

NEW SOUTH WALES COURT OF APPEAL

CITATION:
BARTLETT v COOMBER & ANOR [2008] NSWCA 100

FILE NUMBER(S):
40387 of 2007

HEARING DATE(S):
23 April 2008

JUDGMENT DATE:
23 May 2008

PARTIES:
Peter Douglas BARTLETT
Katherine COOMBER
Susan STOTT

JUDGMENT OF:
Mason P Hodgson JA Bryson AJA

LOWER COURT JURISDICTION:
Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):
SC 5562 of 2996

LOWER COURT JUDICIAL OFFICER:
Macready AsJ

LOWER COURT DATE OF DECISION:
23 May 2007

LOWER COURT MEDIUM NEUTRAL CITATION:
NSWSC 513

COUNSEL:
Appellant: J M Ireland QC, R J Foord
Respondent: M A Bradford

SOLICITORS:
Appellant: Bizannes & Associates
Respondent: Gells Lawyers

CATCHWORDS:
SUCCESSION – Family provision and maintenance – jurisdiction – persons in whose favour and order may be made – children – generally – where no other eligible person to claim – Family Provision Act 1982, s7, s9
SUCCESSION – Family provision and maintenance – practice – procedure, orders and other matters – orders – order enforcing compromise agreement
SUCCESSION – Family provision and maintenance – principles upon which relief granted – circumstances to be considered – where agreement to compromise reached – circumstances relevant in approving agreement – Family Provision Act 1982, s7, s9

LEGISLATION CITED:
Civil Procedure Act 2005
Family Provision Act 1982
Trustee Act 1925
Uniform Civil Procedure Rules 2005

CATEGORY:
Principal judgment

CASES CITED:
Baltic Shipping Co v Dillon (1991) 22 NSWLR 1
Coomber v Stott [2007] NSWSC 513
Harris v Caladine (1991) 172 CLR 84
Harvey v Phillips (1956) 95 CLR 235
Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528
Mayfield v Lloyd-Williams [2004] NSWSC 419
McCosker v McCosker (1957) 97 CLR 566
McMahon v McMahon (New South Wales Supreme Court, Young J, 2 August 1985)
Mohamed v Farah [2004] NSWSC 482
Mudford v Mudford [1947] NZLR 837
R Archibald [1950] QWN 3
Re Julso [1975] 2 NZLR 536
Stiles v Joseph, (NSW Supreme Court, Macready M, 16 December 1996)
Vasiljev v Public Trustee [1974] 2 NSWLR 497

TEXTS CITED:
de Groot & Nickel, Family Provision in Australia 3rd ed, Lexis Nexis Butterworths, Chatswood, 2007

DECISION:
Appeal dismissed with costs

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40387/2007
SC 5562/2006
MASON P
HODGSON JA
BRYSON AJA
Friday 23 May 2008

Peter Douglas BARTLETT v Katherine COOMBER & Anor

The deceased was the father of the first respondent. He never married and the first respondent was his only child. The first respondent had no contact with the deceased from her birth in February 1994 to February 2004, although the deceased did provide for the first respondent by way of child support payments. There was one visit between the first respondent and the deceased in July 2004 and the deceased died on 16 May 2005.

The deceased’s will was made on 2 September 2000. The second respondent was appointed as his executrix and his entire estate (valued in excess of $1 million) was left to his mother, Margaret Thomas. The first respondent was expressly excluded from the deceased’s will.

The deceased was the only child of his mother. She died 35 days after him.

Margaret Thomas left a will dated 6 June 2005 appointing the first appellant (a nephew of hers) as her executor. She left one-fifth of her estate to each of the appellant and three other nephews, and divided the remaining one-fifth share in favour of two friends.

The first respondent, by her tutor being her mother Veronica Coomber, sought the advice of solicitors as to any claim the first respondent may have on the deceased’s estate. Correspondence between the first respondent’s solicitors and the solicitors representing the executors of the two estates resulted in a compromise agreement eventually being made settling the matter in favour of the first respondent for 50% of the estate plus costs. This compromise agreement was found to have been made with the actual authority of the deceased’s executrix. Subsequently the executor of Margaret Thomas’ estate sought to withdraw from the agreement.

The first respondent then commenced proceedings seeking a declaration that a binding agreement to compromise a claim under the Family Provision Act 1982 was reached and ought to be specifically performed. There was an alternative claim for provision under s7 of that Act – the first respondent was the only eligible claimant in the deceased’s estate.

At first instance Macready AsJ approved the compromise by court order under s7 of the Family Provision Act 1982 because it was in the first respondent’s best interests, even though it would have the effect of decreasing the amount to be received by the beneficiaries under Margaret Thomas’s will. His Honour did not exercise his power under s76(4) of the Civil Procedure Act 2005 to decline enforcement of the agreement.

The appellant argued on appeal that, firstly, Macready AsJ lacked the power to order the enforcement of the agreement or alternatively, that his Honour approached the exercise of the power in a way that involved relevant matters not being taken into account and irrelevant matters being taken into account. The nub of the complaint was that the primary judge failed to take into account the windfall that the compromise agreement gave to the first respondent, which resulted in injustice to the beneficiaries under Mrs Thomas’s will.

Held

(Per Mason P, Hodgson JA agreeing)

There is power for the court to reject a compromise reached where the sum to be provided is too high or too low. Such a situation may indicate, for example, an abuse of process, a failure to effectuate the specific policies under the Family Provision Act 1982 or otherwise offend public policy. (at [56], [58])

Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528; Mohamed v Farah [2004] NSWSC 482; referred to.

The compromise agreement suffered from none of those difficulties. (at [59])

The first respondent’s interests in maintenance, education and advancement in life deserved to be the paramount focus of attention in a substantial estate in which she was the only eligible claimant. (at [64])

His Honour did take into account the fact that the award would reduce the size of Mrs Thomas’ will. Such consequence does not amount to substantial injustice such that the court would recoil from giving effect to an agreed compromise. (at [53] and [54])

(Per Bryson AJA)

The circumstances to which the court may have regard to in making an order under s7 of the Family Provision Act 1982 are wide: s9(3). (at [13] and [14])

An agreement to settle a claim is part of those circumstances. (at [14])

The trial judge was well seized of the relevance of the interests of the residuary beneficiaries. His Honour evaluated the matter and acted within the ample bounds of relevant considerations. (at [17], [19])

ORDERS:Appeal dismissed with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40387/2007
SC 5562/2006
MASON P
HODGSON JA
BRYSON AJA
Friday 23 May 2008

Peter Douglas BARTLETT v Katherine COOMBER & Anor

JUDGMENT

MASON P: The first respondent (hereafter referred to as “the plaintiff”) commenced proceedings in the Equity Division, suing by her tutor, Veronica Coomber, who is her mother. The primary relief sought in the summons was a declaration that a binding agreement to compromise a proposed claim under the Family Provision Act1982 (the Act) had been reached and ought to be specifically performed, with an accompanying order to give it effect. There was an alternative claim for provision pursuant to s7 of the Act.
Following a trial restricted to the question whether the executrix (the second respondent in this appeal) was bound to perform the alleged agreement (see CB 4), Macready AsJ made findings in favour of the plaintiff and proceeded to make orders that disposed of the proceedings. His Honour ordered that the plaintiff have a legacy in the sum of $659,467 to be paid to the Public Trustee and held on her behalf during her minority.
This appeal is brought against those orders and the ensuing costs order.
The executrix adopted a submitting stance in the court below and in this Court. The labouring oar was taken up by the appellant who had applied to be joined as a second defendant in the proceedings in the circumstances outlined below.
The plaintiff’s mother and Mr Bruce Geoffrey Thomas (“the deceased”) began a relationship during 1992 which continued until some months before the plaintiff’s birth on 20 February 1994. DNA testing established the deceased’s paternity and he commenced to make child-support payments for his daughter.
The plaintiff lived with her mother and for many years had no contact with the deceased following the break-up of the mother’s relationship with him. This was, of course, in no way the plaintiff’s responsibility, having regard to her young age. Contact was made in February 2004 and there was a visit with the deceased in July of that year. The deceased died on 16 May 2005.
The deceased never married and the plaintiff was his only child. He himself was the only child of Margaret Thomas, a widow who died on 20 June 2005, ie 35 days after her son.
The deceased’s will was made on 4 September 2000. He appointed the second respondent as his executrix and left his entire estate to his mother in the event (that happened) of her surviving him by 30 days. The will contains a clause stating that the deceased had made no arrangements in his will for “the child Catherine (sic) Coomber as I have always disavowed my paternity”. Probate of the will was granted in Victoria and resealed in New South Wales.
The value of the estate for probate purposes was found to be $1,076,000 (J 7). (J1, J2 etc are references to paragraphs of the judgment below: Coomber v Stott [2007] NSWSC 513.) Its realised value as at about a month before the trial was found to be $1,246,158 (J 7).
The deceased’s mother (“Mrs Thomas”) left a will dated 6 June 2005 appointing the appellant as her executor. She left one-fifth of her estate to each of the appellant and three other nephews and divided the remaining one-fifth share in favour two friends. Probate of this will was granted in New South Wales on 13 October 2005.
Mrs Thomas’ estate was swollen by the assets that passed from the deceased’s estate. There were however additional assets in the form of life policies taken out on the life of the deceased.
None of the beneficiaries of Mrs Thomas’ estate is an eligible claimant in the deceased’s estate. Neither was there any suggestion that the plaintiff’s mother was an eligible claimant. Accordingly, the only eligible claimant under the Act was the plaintiff.
In about mid-2005 the plaintiff’s mother instructed her solicitors Peacocke Dickens & Price (“PDP”) to consider a claim under the Act on the plaintiff’s behalf against the deceased’s estate. There followed written and oral communications with Perrots, solicitors who represented the executors of the respective estates, at least in New South Wales.
The correspondence culminated in a letter of 2 June 2006 from Perrots to PDP that “our client has accepted the offer of 50% of the estate plus costs”. The singular “client” recognised that the relevant client was the deceased’s executrix, the second respondent, whose authority to compromise the claim stemmed from s49 of the Trustee Act 1925.
Nevertheless, the letter of 2 June 2006 was sent upon the instructions of both the second respondent, the executrix of the deceased’s will and the appellant, the executor of Mrs Thomas’ will. The appellant presumably had the authority of the beneficiaries under Mrs Thomas’ will to agree to this compromise. There was evidence that the legal personal representatives and their solicitor had relied upon the advice of counsel in the following terms:
It is clear that Ms Katherine Coomber is able to demonstrate both present and future financial need. Further Ms Coomber will be able to demonstrate a probability of an educational need stretching into tertiary education.
It would appear that Katherine Coomber is Bruce’s only direct living relative, it would appear that Katherine Coomber is the only person that would fall within the eligibility requirement of the Family Provisions Act. On the basis of what is contained in my latest instructions it is my opinion that Ms Coomber is likely to receive, as a consequence of any Family Provisions application, a provision of between forty and fifty percent of the estate of Bruce Geoffrey Thomas.
The issue fought at the hearing before Macready AsJ was whether or not a binding agreement had been reached to settle the plaintiff’s claim under the Act. That matter was resolved in the plaintiff’s favour, not just on the basis of Perrot’s having had ostensible authority, but on the basis that the firm had actual instructions from the legal personal representatives of the two estates. It was common ground that the agreement translated into the legacy order referred to above.
A ground of appeal challenging the finding that a concluded settlement agreement was reached was not pressed.
The submission advanced in this Court was that the Judge erred in failing to exercise his power to decline enforcement of the agreement made between the lawyers. The argument in brief was that his Honour lacked the power to make the particular order; alternatively, approached its exercise in a manner that involved relevant matters not being taken into account and irrelevant matters being taken into account.
The settlement may have been reached between lawyers who were acting with the authority of their respective clients and it may have been certain in its terms. But since the agreement was, in effect, that the deceased’s executor would submit to a particular order under the Act in favour of the plaintiff, the Court’s role involved more than placing a rubber stamp on the transaction. It was common ground before Macready AsJ and in this Court that the Judge had to do more than satisfy himself that the order he was asked to make had the consent of the plaintiff and the deceased’s executrix. How much more was the topic of the debate in this Court.
Several factors required the Judge to examine the strength of the plaintiff’s claim at least to the degree required by those factors.
First, because there was a party before the court additional to the parties to the agreement, the court’s powers to approve the settlement were at least constrained by the mandate of procedural fairness. The appellant had retained senior and junior counsel to test whether a binding agreement had been made and to oppose the making of orders under the Act even if it had.
Speaking with customary bluntness, Hutley JA once observed that “beneficiaries may be allowed to intervene on special grounds, but their intervention is unwelcome” (Vasiljev v Public Trustee [1974] 2 NSWLR 497 at 503). The present appellant had earlier been joined as a second defendant in the exercise of the court’s exceptional power to allow separate representation in matters.
No one suggests that the joinder was inappropriate in the circumstances. This, however, did not expand the issues for determination in the hearing of the separate question. It did not place the appellant in the shoes of the deceased’s executrix.
Secondly, s76(3) of the Civil Procedure Act 2005 required the court’s approval for any compromise or settlement of proceedings commenced (as these were) on behalf of a person under legal incapacity; and s76(4) armed the court with power to approve or disapprove any settlement agreement already reached. Macready AsJ held (at J65) that, although the wording of the section gives an unfettered discretion, the case law indicated that he should only approve the compromise if it were in the infant plaintiff’s best interests.
This requirement meant that his Honour had to satisfy himself that the compromise was a good one so far as the plaintiff was concerned. Performance of this task required some consideration of the plaintiff’s overall prospects and not just her prospects of obtaining minimal of relief under the Act.
The Judge had little difficulty in deciding that the settlement should be approved under s76. No one suggests any error in this conclusion.
Thirdly, the Judge was presented with an argument that the compromise should be set aside, or at least not be enforced by the making of an order, on the basis that Perrot’s had ignored express instructions to include a term in the settlement that the plaintiff indemnify her grandmother’s estate from any claim under the Act.
The exceptional power to decline enforcement by court order of a compromise agreement made by lawyers acting with ostensible authority was not in dispute. It is unnecessary to explore its outer limits. The overriding principle is that the court is concerned with the interests of justice and cannot allow its processes to become an instrument of injustice or abuse (see generally Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528; Mohamed v Farah [2004] NSWSC 482).
Macready AsJ considered and rejected the argument that this power should be exercised in the present case.
As regards the particular matter of a term to bar a claim on Mrs Thomas’ estate, his Honour had regard to the demonstrable unlikelihood of the plaintiff establishing that she was an eligible claimant in her grandmother’s estate (J33-34). I do not understand it to be suggested that his Honour erred in this regard. He was clearly correct, in my view.
The Judge also found that there was no injustice in making orders in accordance with the agreed compromise. His Honour pointed out (J69) that the appellant’s decision to instruct his solicitors to accept the settlement was based upon advice given to him by the solicitor then representing both estates. The advice was plainly that he should accept. His Honour also concluded that there was no injustice in respect of the impact of the settlement upon the beneficiaries of Mrs Thomas’ estate (J68). It will be appropriate to examine this conclusion and the reasoning upon which it is based in the context of the next matter to which I turn.
Fourthly, and of direct relevance to this appeal, it was argued before the Judge that, since the agreement called to be translated into an order under the Act, it was subject to approval by the court. The argument advanced before Macready AsJ was that the compromise should be set aside and no order made as sought having regard to the “character and quantum of the relief claimed by the plaintiff and the nature of the interests represented by” the appellant (J9, 36).
The Judge proceeded to consider the affidavit evidence filed on both sides in the pending proceedings for relief under the Act. His Honour briefly summarised the plaintiff’s situation, including her educational goals and prospects, her financial needs and the (limited) financial and health capacities of her mother (J37-38, 41-45). He concluded (J45):
Bearing in mind that Katherine may have to leave Balranald to do any tertiary education and using as a rough guide the costs of secondary education, one could allow a further $100,000 for this cost. Allowing for something for contingencies the most favourable outcome on the present evidence for the plaintiff is an award in the area of $200,000 to $250,000.
The Judge then addressed what he saw as the other side of the ledger, in the following terms (J39-40):
39. When considering the claim of the plaintiff it is also necessary to consider others having a claim on the bounty of the deceased. The position of the beneficiaries in the estate of the late Bruce Geoffrey Thomas must be considered by the Court. There are, amongst the six beneficiaries, four nephews of the late Margaret Thomas and two close family friends who were friends of the mother Margaret Thomas for over 30 years. There is no evidence of any relationship between them and the deceased although I would infer that there was some contact between them having regard to the family background. The financial situation of the beneficiaries was put forward by the executor, Mr Peter Douglas Bartlett in his affidavit in these terms:
“Peter Douglas Bartlett
I am aged 67 and have never married. I am unemployed and receive the age pension of 517.90 a fortnight which is my sole source of income. I suffer from an arthritic condition. I own my own house at 14 Riley Street Woolloomooloo which I acquired after a lifetime employment in various industries and administrative positions.
Graham Bartlett
Aged 57 years married with one child an 11 year old daughter. He is unemployed. His wife suffers from chronic heart condition and schizophrenia. They receive a chronic disability pension of $1,150.16 a fortnight and he acts as her carer. He recently acquired the house at Balranald formerly owned by the deceased Margaret Thomas which he purchased from the legacy in her will.
Colin David Bartlett
Aged 63 years. Married with grown children.
He and his wife receive a combined disability pension of $861.20 a fortnight. They reside in a mobile home and pay site fees of $150 a fortnight.
John Ivor Bartlett
Aged 61 years. Unmarried. Casual employment only in the hospitality industry. No regular employment and dependent on casual work. Owns his own house in Brisbane.
Keith and Cynthia Gorringe
Both aged about 59 years. Both on disability pensions through work related injuries to their backs. Reside in Adelaide and own their own home. They have a mortgage of $80,000. Their combined pension is $760 a fortnight.
40. I reserved the question of the admissibility of the evidence given in respect of persons other than the executor, Mr Peter Douglas Bartlett. Given the relationship between Mr Peter Douglas Bartlett and the other persons I admit the evidence to avoid undue expense and delay in respect of what are unlikely to be controversial facts.

The conclusory and presently critical portions of the judgment relevant to the making of orders in accordance with the agreement were (J63-70):
63.         It is to be noted that the plaintiff is the only eligible person in the estate. Although some of the beneficiaries were relatives and others were his mother’s friends, on the evidence there was not a close relationship between them and the deceased. They do suffer some hardship although other than the payment of something to provide for their later years they do not seem to have any particular problems. If the settlement were approved each beneficiary could expect to receive a little less than $100,000.
64.         Having regard to the facts before me it would seem to me that the plaintiff has compromised her claim for an amount which is slightly more than double what he claim is worth. This, of course, impacts on the beneficiaries but given the limited information on the beneficiaries, it is difficult to see that it would cause any particular hardship bearing in mind their relationship with the deceased.
65.         Section 76 of the Civil Procedure Act provides that in respect of proceedings commenced by a person under a legal incapacity, the Court may approve or disapprove any agreement for compromise or settlement of that claim. Although the wording in the section gives an unfettered discretion it would seem that having regard to authority the Court would only approve the compromise if it were in the infant’s best interests. See Permanent Trustee v Mills [2007] NSWSC 336 at [19]-[29]. In the present case, of course, the compromise is very much in favour of the infant and I would not have refused to approve the settlement under section 76.
66.         There is no doubt that the Court in the circumstances of the present case would have jurisdiction to make appropriate orders. The plaintiff was left without any provision and she has an obvious need for help with her education. In an ordinary case the Court would accept a settlement where the parties are sui juris but where, as here, a party is under a disability the matter must come before the Court for its approval. Similarly where the Court is bound to make a judgment about matters such as a release of rights under section 31(5) of the Family Provision Act. See generally on this aspect Mitchell v Osborne Young J 20 May 1997 and the cases His Honour refers to in that decision.
67.         In terms of the authorities, to which I have earlier referred, on the residual discretion of the Court to not approve a settlement when it is asked to make orders, the questions is whether there is any injustice in making orders in accordance with the agreed compromise. In the present case there is no injustice so far as the plaintiff is concerned. She has been able to achieve a generous settlement given the evidence available.
68.         In respect of the defendants it may be said to be an injustice because they will receive less than they would have ordinarily received if the matter had been fully litigated. Although the individual circumstances of the beneficiaries are before the Court they will each receive a substantial amount from the estate and in the context of what little information the Court has about what may be described as their needs or desires, there is nothing to suggest they will suffer some injustice by receiving the sum of $100,000 rather than the sum which they would receive if the matter was fully litigated. If the matter was fully litigated after allowing for the costs of the litigation each beneficiary might expect to receive perhaps another $38,000. It is to be borne in mind that none of the beneficiaries on the evidence before me are eligible persons who could make a claim on the estate of the deceased. It was their good fortune that the deaths occurred in the sequence that they did and that they received substantial bequests.
69.         The decision which the executor made to instruct his solicitors to accept the settlement was based upon advice given to the executor by the solicitor. The advice was plainly that he should accept. It may be that if that advice was wrong then some other remedy would be available.
70.         Although I have concluded on the evidence before me that the settlement was generous to the plaintiff, it would require a more detailed investigation if I had to consider whether or not the solicitor or barrister advising the estate was negligent in giving the advice. However, they are not parties or witnesses in the present proceedings. In the absence of evidence which would allow me to decide whether the advice was negligent, I conclude that there is no injustice which would require me to refuse to make an order in accordance with the settlement. In my view the Court should determine the separate question and make orders in accordance with paragraphs 1 and 2 of the Summons or some other appropriate orders.
These conclusions addressed the case in the manner it was fought below. As indicated, a separate question was litigated, one that did not involve a full-scale hearing of the Family Provision proceedings. The present appellant was represented by experienced senior and junior counsel.
In the context of claims under the Act, one often encounters references to the court’s “jurisdiction” to make a particular order in a particular estate. Thus, to give an example of present relevance, de Groot & Nickel, Family Provision in Australia 3rd ed, Lexis Nexis Butterworths, Chatswood, 2007 at §8.7 states that:
The court’s jurisdiction depends not upon the agreement of the parties but upon the court’s view of the question whether the deceased has made adequate provision for the applicant.
The learned authors cite three authorities which support this proposition and do so in the language of “jurisdiction” (Mudford v Mudford [1947] NZLR 837 at 838; R Archibald [1950] QWN 3; Re Julso [1975] 2 NZLR 536 at 538).
In my opinion, “jurisdiction” and “power” are concepts that should not be blurred or subjected to ecthlipsis in the present context (see, Harris v Caladine (1991) 172 CLR 84 at 136). Macready AsJ had undoubted jurisdiction to entertain the application before him. The critical question in the appeal relates to the scope of his Honour’s power to reject the settlement.
In McMahon v McMahon (New South Wales Supreme Court, Young J, 2 August 1985, Young J said:
An order [under the relevant NSW Family Provision Act] does not follow just because all the parties to the proceedings have agreed between themselves that such an order should be made. Whilst in general if a Court is asked by consent of all parties to make an order it will make an order, as I said in my judgment in Kalyk v Whelan 31 July 1985 where the legislature casts on the Court the duty of seeing that an order is only made in appropriate circumstances the Court is not bound to make any order tendered by all the parties by consent.
Because of this it is necessary for me to look into the facts and circumstances of the plaintiffs and the defendant so far as they are relevant to a possible claim under the Family Provision Act.
As the child of the deceased, the plaintiff was an eligible person by reason of paragraph (b) of the definition of “eligible person” in s6(1) of the Act.
It followed that the Supreme Court’s power to make an order in her favour stemmed from s7 which provides that the Court:
… may order that such provision be made out of the estate … of the deceased person as, in the opinion of the court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person.
No one suggests that the deceased had made adequate provision in favour of the plaintiff during his lifetime or out of his estate. Accordingly, the requirements of s9(2) may be passed over. Section 9(3) sets out the matters that the court may take into consideration in determining what provision (if any) ought to be made in favour of the eligible person. Of present relevance, the factors include:
(c) circumstances existing before and after the death of the deceased person, and
(d) any other matter which [the court] considers relevant in the circumstances.
Senior counsel for the appellant accepted before us that the Judge was entitled to take account of the settlement that he found to have been reached. It was submitted, however, that his Honour was not bound to make an order in accordance with that agreement, especially where the agreement had been subsequently repudiated by the appellant who was a person with an interest in its performance.
Turning to the specifics, Mr Ireland QC challenged the manner in which the Judge exercised his power by the following steps:
(i)His Honour had found that the most favourable outcome on the present evidence for the plaintiff was an award in the area of $200,000 - $250,000 (J45).
(ii)It followed, as his Honour held at J64, that the plaintiff had compromised her claim for an amount which was slightly more than double what is was worth.
(iii) His Honour recorded that (J64):
This, of course, impacts on the beneficiaries but given the limited information on the beneficiaries, it is difficult to see that it would cause any particularly hardship bearing in mind their relationship with the deceased.
(iv)When the Judge addressed the injustice of making orders consonant with the compromise, his reasons at J68 (set out above) are said to have:
(a)overlooked the fact that the “generous settlement” (J67) in the plaintiff’s favour imposed a corresponding detriment upon the beneficiaries of Mrs Thomas’ estate; and
(b)failed to have kept in mind that the power to make any order stemmed from an Act concerned (only) with provision for the maintenance, education and advancement in life of the plaintiff.
The response to this submission from the plaintiff’s counsel, Mr Bradford, was essentially three-fold. It was contended that:
(i)No argument to the effect that the mandate of s7 had been breached had been advanced in the court below;
(ii)The true value of the estate was almost $200,000 higher than found;
(iii)Macready AsJ’s premise about the settlement producing a figure that was double what the plaintiff’s claim was worth was itself challenged.
I do not accept the plaintiff’s first point in light of the Judge’s statement of the issues at J9 and J36.
As to the second point, it was common ground in the appeal that the evidence before the primary judge showed the realised value of the estate to be $1.4million as distinct from the $1.24million referred to at J7. This meant that the plaintiff’s legacy (which was calculated by reference to the anticipated size of the estate at the time of the compromise) represented less rather than more than 50% of the estate.
Belatedly, a Notice of Contention was filed addressing the plaintiff’s third point. The parties supplemented their submissions at the hearing with additional written submissions that were filed with leave after judgment was reserved.
The plaintiff was the only eligible claimant in a substantial estate. Generous provision for her maintenance, education and advancement in life was called for having regard to the size of the estate, the absence of any competing eligible person, indeed the absence of any person apart from herself who had any claim on the deceased’s bounty under the operative terms of his will. The plaintiff’s needs included those which were contingent, including those stemming from her own mother’s somewhat straitened circumstances.
The concept of advancement in life goes beyond the need for education and maintenance. In a proper case it will extend to a capital payment designed to set a person up in business or upon marriage (McCosker v McCosker (1957) 97 CLR 566 at 575; Stiles v Joseph, (NSW Supreme Court, Macready M, 16 December 1996); Mayfield v Lloyd-Williams [2004] NSWSC 419).
The beneficiaries under Mrs Thomas’ will are not the beneficiaries under the deceased’s will, although some of them would have been if Mrs Thomas had not survived her son by more than 30 days. It follows that I do not agree with the approach of the primary judge who treated Mrs Thomas’ nephews and Mr and Mrs Gorringe as if they were beneficiaries under the deceased’s will (J39). His Honour was closer to the mark in his observation (J68) that it was those persons’ “good fortune that the death’s occurred in the sequence that they did and that they received substantial bequests.” While I would not endorse the precise reasoning in that essentially throw-away line, I perceive that the point his Honour was endeavouring to make was the distinction (that I think is a valid one) between the strength of the claims that the appellant and his fellow beneficiaries would have had (were they beneficiaries of the deceased’s will) and the situation in which they are placed by virtue of claiming through the will of the deceased’s sole beneficiary.
This is not to say that the interest of Mrs Thomas’ beneficiaries in the outcome of the litigation involving the deceased’s estate was to be disregarded entirely. I am prepared to assume (albeit with reservations) that their displacement by the making of orders in the plaintiff’s favour was a matter that the court was entitled to consider relevant in the circumstances (s9(3)(d)), albeit not of the same order as the interest of a displaced beneficiary of the instant estate.
The nub of the appellant’s complaint is that the primary judge failed to take into account what was said to be “a consideration of the highest importance, namely the windfall that the compromise clearly gave to the [plaintiff] gave rise to consequent injustice to the appellant and the other residuary beneficiaries” (Appellant’s submissions para 22). In my view this submission should be rejected. His Honour’s discussion of the situation of Mrs Thomas’ beneficiaries at J39, J64 and J68 (each set out above) shows that the Judge was fully alert to the fact that any award in the plaintiff’s favour would reduce the size of Mrs Thomas’ estate and thereby operate adversely to the financial interests of the appellant and the other beneficiaries under Mrs Thomas’ will.
The factual conclusion that it was difficult to see that effectuating the compromise “would cause any particular hardship” (J64, my emphasis) to those beneficiaries is, however, one that I would endorse. It shows that effectuating the compromise by making the order sought did not entail any substantial injustice from which a court asked to give effect to an agreed compromise would recoil.
It was further submitted that the fact that the plaintiff “will receive twice as much as she would have received if the matter had proceeded overwhelms the exercise of [the] discretion in favour of the compromise” (ibid, para 23).
I accept that the court’s power to reject a compromise reached in proceedings under the Act is available both where the sum to be provided is too low or too high. Either extreme might indicate, for example, that the proceedings were being conducted through to completion for a purpose foreign to that of the Act and/or that some fundamental mistake vitiated the settlement process.
But it must be borne in mind that litigation under the Act takes place in an adversary context in which the active parties to the particular litigation are usually expected to be the best judges of what is in their own interests. The policy of Australian law encourages the settlement of disputes (see eg Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 at 9 per Gleeson CJ and Uniform Civil Procedure Rules 2005, Part 20). Our legal system would collapse were it not for the fact that most disputes are resolved by agreement.
One of the principles giving effect to this policy is the principle that a valid compromise gives effect to an agreement that effectively supersedes the antecedent rights of the parties. The possibility of greater success and the risk of greater failure is transposed into an arrangement that frees the litigants and witnesses of the risks, costs and toils of further disputation. This principle is not displaced in the context of proceedings under the Act, although for reasons already outlined, the court may decline to give effect to a settlement if doing so failed to effectuate the specific policies of the Act, amounted to an abuse of process or otherwise offended public policy in a demonstrable way.
The compromise agreement in the present case suffered from none of these difficulties. It was reached in circumstances where the deceased’s executrix availed herself of the advice of solicitor and counsel. It was also reached with the concurrence of the appellant, albeit given with a qualification about no claim being made on Mrs Thomas’ estate.
When determining whether or not to translate a binding agreement into an order, a court proceeds in the full knowledge that it lacks full knowledge about the rights and wrongs of the yet to be litigated dispute. Allegations are necessarily undeveloped and untested.
The material before the court referable to the plaintiff’s needs was set out in a letter from PDP dated 10 April 2006. It was sent to Perrot’s by request (see CB 44) in the context of foreshadowing the type of information that the plaintiff would rely upon at a hearing if settlement could not be achieved. It did not represent an exhaustive statement of the plaintiff’s threatened claim for provision under the Act. It foreshadowed a financial report prepared by an actuary if quantification of the claim was necessary.
Experience of forensic contests of this nature shows that closer attention to the full ambit of a plaintiff’s needs is given when the time comes to prepare affidavits and, if necessary, supplement them with oral evidence in chief. I perceive that his Honour was adverting to this phenomenon in his observation that “[a]llowing for something for contingencies the most favourable outcome on the present evidence for the plaintiff is an award in the area of $200,000 to $250,000” (J45, emphasis added).
This said, it was in my view unfortunate that his Honour expressed himself in those terms because they have been the trigger for the appellant’s argument that the reasoning contains an internal inconsistency.
I do not in any event agree with his Honour’s conservative assessment of the plaintiff’s ultimate prospects, even confining oneself to the case foreshadowed in the letter from PDP. Her interests in maintenance, education and advancement in life deserved to be the paramount focus of attention in a substantial estate in which she was the only eligible claimant and in which the only beneficiary was the deceased’s aged mother who, as events turned out, died just over a month after her son. The plaintiff stood at the threshold of a life replete with contingencies. The parties stood at the threshold of litigation replete with contingencies, one of which was that a contested case could fall for determination by any one of a dozen or so judicial officers.
Naturally, there will be situations where a court can be sufficiently satisfied that the proffered compromise agreement lies outside the range of possible outcomes and to such a degree that the proposed order should be regarded as giving effect to some purpose extraneous to those within the Act. But much more is required than that one party to the compromise has repented of it, a fortiori a non-party like the present appellant.
The appeal should be dismissed with costs.
HODGSON JA: I agree that the appeal should be dismissed with costs, and I agree substantially with the reasons of Mason P and Bryson AJA. I would make the following additional observations.
The order made by the primary judge was made pursuant to s 7 of the Family Provision Act 1982 (the Act). It thus had to be justified as being “for such provision … as, in the opinion of the Court, ought, having regard to the circumstances at the time of the order is made, to be made for the maintenance, education or advancement in life of” Ms Coomber.

It was also necessary that the Court be satisfied, in terms of s 9(2) of the Act, that “the provision (if any) made in favour of the eligible person by the deceased person either during the person’s lifetime or out of the person’s estate … is, at the time the court is determining whether or not to make such an order, inadequate for the proper maintenance, education and advancement in life of the eligible person.” Also relevant was s 9(3), which is in the following terms:
(3)In determining what provision (if any) ought to be made in favour of an eligible person out of the estate or notional estate of a deceased person, the Court may take into consideration:
(a)     any contribution made by the eligible person, whether of a financial nature or not and whether by way of providing services of any kind or in any other manner, being a contribution directly or indirectly to:
(i)the acquisition, conservation or improvement of property of the deceased person, or
(ii)the welfare of the deceased person, including a contribution as a homemaker,
(b)     the character and conduct of the eligible person before and after the death of the deceased person,
(c)      circumstances existing before and after the death of the deceased person, and
(d)     any other matter which it considers relevant in the circumstances.
The parties to proceedings for such an order are generally just the applicant for the order and the legal personal representative of the deceased person: Re Lansear (1940) 57 WN(NSW) 181; Re S J Hall [1959] SR(NSW) 219; Vasiljev v Public Trustee [1974] 2 NSWLR 497. These cases were decided under the legislation that preceded the Act, but are still applicable.
According to these authorities, the duty of the legal personal representative is either to compromise the claim or to contest it and to seek to uphold the provisions of the will (or the distribution on intestacy); and to that end, to put before the court evidence made available by beneficiaries that is relevant to the issues. The beneficiaries may be joined as parties, but generally only if it appears that the legal personal representative is not fulfilling this duty to represent their interests, or there is some other reason justifying this unusual course.
As with other types of proceedings, agreements to compromise are possible, and indeed are to be encouraged. Such an agreement may be made by the parties to the proceedings, and the court will generally give effect to it. However, the court will need to be satisfied that the pre-condition in s 9(2) of the Act is fulfilled, and that the order agreed on is one which ought to be made in terms of s 7 of the Act. Because of the agreement, the court will generally be satisfied of these things without the need for any significant investigation of the evidence.
If an agreement to compromise is made, and then one party to that agreement seeks to withdraw from it prior to the making of any orders, it is in my opinion still generally appropriate for the court to give effect to the agreement and to make the agreed orders without the investigation into the facts which would have occurred if no agreement had been made. Otherwise, the agreement would be set at naught. On the other hand, depending on the reasons advanced by the party seeking to withdraw from the agreement, it may be reasonable for the court to consider the underlying facts to a greater extent than would have been the case if both parties had maintained their support for the agreement, in order to determine whether there would be any injustice in giving effect to the agreement.
In the present case, the primary parties to the litigation have maintained their support for the agreement. Mr Bartlett, the party opposing the agreement, is a person representing a deceased beneficiary. He originally joined in making the agreement, subject to conditions which are not material. He sought to withdraw his agreement, and was made a party to the proceedings. It was appropriate that he be given the opportunity to persuade the court that the legal personal representative was not adequately representing the interests of beneficiaries, and that to make an order in accordance with the agreement would involve injustice; but his participation was a concession for that purpose rather than a matter of entitlement, and the primary judge did correctly consider that he was bound by the agreement to compromise which he had initially supported.
There could be no doubt in this case that the threshold in s 9 of the Act was satisfied, so the only issue could be whether the order to which the legal personal representative agreed was one which ought to be made within s 7. In view of the opposition of Mr Bartlett, it was appropriate to consider the facts to a greater extent than if there was no opposition; but the agreed order was appropriately still considered as one which prima facie ought to be made, and the facts were appropriately investigated only to the extent necessary to determine whether it would involve injustice.
In my opinion, even on the basis of the primary judge’s assessment, on the limited evidence before him, of the likely outcome of a contested case, there is no error in his conclusion that there was no injustice which would justify refusing to give effect to the settlement, or his conclusion that the agreed order was one which ought to be made.
In my opinion also, the primary judge’s assessment of the likely outcome was conservative. The estate was about $1.4 million. By the time of the hearing, the deceased’s mother had died, so Ms Coomber was the only person eligible to claim against the estate under the Act. Although the persons represented by Mr Bartlett could be considered as having legitimate claims against the estate, the strength of these claims was small as compared with the claim of an only child, with no significant assets of her own, and having the support only of her mother, a person with limited resources. The strength of that claim was in no way lessened by the deceased’s untrue denial of paternity, the lack of contact between the deceased and his child (through no fault of the child) and the deceased’s previous lack of support for the child otherwise than by child support payments made after DNA testing. On the limited material before the primary judge, I would not have considered the agreed amount an unreasonably high estimate of the likely result of the case.
BRYSON AJA: The facts and circumstances appear by the judgment of Mason P which I have had the advantage of reading. In my view the path to disposal of this appeal is relatively short.
The agreement between Mrs Stott the executrix of the late Mr B.G. Thomas and the first respondent Katherine Coomber a minor, acting through her mother and solicitors, was an agreement which Mrs Stott was empowered to make under her power of compromise in s 49 of the Trustee Act 1925. Mrs Stott made the agreement on the advice of her solicitors and also of counsel. She was acting within the limits of her power; exercising the power of compromise in good faith for the purpose for which it was conferred and not for any ulterior or improper purpose.
Mr Bartlett approved the agreement, in his letter to Mrs Stott’s solicitors of 2 June 2006; but he imposed this condition on his approval:
There is no claim made on the estate of Margaret Thomas (deceased) and that it is indemnified.
A second condition required that the Public Trustee or another independent body was to control money held in trust; this had to be complied with and it was.
The solicitors who acted for Mrs Stott then also acted for Mr Bartlett as the executor of Margaret Thomas. The solicitors took the view that they did not know how the child could make a claim against the estate of Margaret Thomas, as she was not an eligible person in that estate. They did not incorporate Mr Bartlett's first condition in the agreement which they made. This was not a departure from their instructions and it was not an act in excess of their authority. Mr Bartlett was not a party to the agreement, which Mrs Stott made representing the estate of which she was executrix.
It is an important fact for a Court considering whether to give effect to the agreement that it was made with Mr Bartlett's concurrence, even though his concurrence was given with a qualification seeking protection against a claim where there was no practical prospect of such a claim. Mr Bartlett was not in a position to authorise or to forbid making the agreement. His concurrence was relevant.
The agreement could only be given effect by an order made by the Court, and the Court could only act in exercise of the power in s 7 of the Family Provision Act 1982. If claimants and executors agree to settle a Family Provision claim their agreement cannot have effect unless the Court exercises its power under s 7 and orders provision in accordance with the agreement. Whatever their agreement says, obtaining an order of the Court is impliedly a condition of its effectiveness.
If the Court simply accepted the agreement of the parties and ordered the provision for which the agreement provides without considering exercise of its power under s 7 the Court would act in error; it would in substance fail to exercise its power.
An order for provision always adversely affects property rights in estate assets which somebody would otherwise have. Alterations of property rights of this kind are authorised by law only if the Court makes a decision under s 7; not otherwise.
Three different discretionary powers of the Court had relation to the decision of Macready AsJ to give effect to the agreement. One was the power in Civil Procedure Act 2005 s 76(3) and 76(4) relating to approval of an agreement made on behalf of the person under legal incapacity; the minority of Katherine Coomber. The exercise of this discretion was not challenged. The second is the power under s 7 of the Family Provision Act 1982.
The third is the power of the Court to decline to make orders giving effect to a compromise where it is unjust to enforce the compromise or it is in the interests of justice that the matter proceed to trial. This power is associated with and illustrated by Harvey v Phillips (1956) 95 CLR 235 and Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528. Exercise of this power is often associated with the existence or the manner of exercise of the authority of counsel in making a compromise; there is no such question here. The Trial Judge considered this power and did not act on it. Although this power is mentioned in written submissions on behalf of the appellant, oral submissions do not rely on it. I do not think that it is involved in the appeal. The facts of this case could not be seen as presenting an enormity of the kind which leads the Court to act.
If the attacks which were made by counsel for the appellant on the decision of the Trial Judge are to succeed they must succeed as attacks on exercise of the power under s 7.
The appellant’s counsel observed correctly that the agreement of the parties does not compel the Court to make an order under s 7, but the agreement can be taken into account. I regard this as correct because the agreement is within the wide range of circumstances which may be taken into account under s 9(3).
The circumstances to which the Court may have regard are wide and an agreement to settle a claim is part of them. There may be exceptions, but in almost every case an agreement which an executor has made in exercise of the statutory power to make compromises, with an understanding of the assets in the estate and the interests of the persons otherwise entitled to them, and with legal advice will ordinarily have an extremely strong claim for attention among the relevant circumstances. It is not simply pacta sunt servanda, because such agreements are made subject to the necessity of obtaining the Court's approval. Nonetheless the importance of such agreements is high.
A respect in which the Trial Judge’s considerations were attacked on appeal relates to consideration of the effect of making provision for the claimant on the interests of the persons otherwise entitled. The Trial Judge said at [64 Red 26-27]:
Having regard to the facts before me it would seem to me that the plaintiff has compromised her claim for an amount which is slightly more than double what her claim is worth. This, of course, impacts on the beneficiaries but given the limited information on the beneficiaries, it is difficult to see that it would cause any particular hardship bearing in mind their relationship with the deceased.
His Honour also said [68]:
68 In respect of the defendants it may be said to be an injustice because they will receive less than they would have ordinarily received if the matter had been fully litigated. Although the individual circumstances of the beneficiaries are before the Court they will each receive a substantial amount from the estate and in the context of what little information the Court has about what may be described as their needs or desires, there is nothing to suggest they will suffer some injustice by receiving the sum of $100,000 rather than the sum which they would receive if the matter was fully litigated. If the matter was fully litigated after allowing for the costs of the litigation each beneficiary might expect to receive perhaps another $38,000. It is to be borne in mind that none of the beneficiaries on the evidence before me are eligible persons who could make a claim on the estate of the deceased. It was their good fortune that the deaths occurred in the sequence that they did and that they received substantial bequests.
Counsel contended that the Trial Judge had applied the wrong test, that deprivation of a share in the estate is prima facie hardship. Counsel contended to the effect that the Trial Judge was in error in addressing only hardship while not addressing the adverse effect of provision on the proprietary interest of the residuary beneficiaries.
In my opinion the Trial Judge was well seized of both aspects of the relevance of the interests of residuary beneficiaries. This appears from para 68 of the judgment, which context shows was addressed to the residual discretion of the Court to withhold approval of settlement whether when there is injustice in making orders in accordance with a degree in compromise, as well as to decision under s 7.
The reference to the good fortune of residuary beneficiaries was also the subject of adverse observations by counsel. The residuary beneficiaries referred to came to have interest in the assets of the late Mr Thomas by a set of curious chances; they were residuary beneficiaries in the will of the late Mrs Margaret Thomas and she was entitled to benefits conferred by the late Mr Thomas’ will because she survived him for 35 days, not 30 days. The late Mr Thomas’ assets thus passed to her residuary beneficiaries, but not under his dispositions. A further curiosity is that some but not all the residuary beneficiaries would have received benefits under the late Mr Thomas’ will if the late Mrs Thomas had not survived him, or had survived for a shorter period. It is to this that of the Trial Judge referred as "their good fortune". The reference to good fortune is a passing observation and not an indication that the Trial Judge did not attribute significance or appropriate significance to their proprietary interests, which they owned however there arose. The Trial Judge came to a view about, and considered, the extent of the adverse influence of what the Trial Judge saw as high provision for the plaintiff on the interests of residuary beneficiaries - "perhaps another $38,000". He did not neglect or disregard this matter; he evaluated it. In doing so he acted within the ample bounds of relevant considerations.
The same residuary beneficiaries also received significant benefits from the late Mrs Thomas' assets unaugmented by those of the late Mr Thomas.
The proposition that there was or may have been some injustice in that excess provision was made for the claimant is relating to a finding made by the Trial Judge at [64] (which I have set out). There are tentative elements in Honour’s statement of this finding - "it would seem to me" - and application in para 68 - "may expect to receive perhaps another $38,000". I must respectfully say that even so that the Trial Judge infused the subject with apparent precision which it cannot bear. From the point of view of parties agreeing to compromise a Family Provision claim, and in the circumstances of this estate where the dispositions in the will were not expressions of compliance with moral duty and there are altogether ample resources to satisfy any conceivable claim by the plaintiff, and no need to make accommodation for other merit-based claims, the likely outcome of the proceedings could be predicted only within a wide range, nothing like precision is available and the assessment of what her claim is worth, or what would be double that amount is affected by uncertainties of which the Trial Judge appears to have lost sight. To say that the claim had been compromised for slightly more than double than it was worth, where the provision ordered was $659,467.00, seems to imply that the claim was worth about $300,000. To my mind a wider range of possible outcomes should have been contemplated, including outcomes lower than $300,000, and outcomes as high as that agreed to. If there is an error in Macready AsJ's decision the error is, in my opinion, in taking an unduly concrete view of the plaintiff's prospects and applying this to the assessment of the impact on residuary beneficiaries. There were prospects that the adverse impact of a decision after contest on the interests of the residuary beneficiaries might be significantly worse for them than the $38,000 which the Trial Judge assessed; and also that may have been less.
I see this as a matter which I would have stated differently, not as a relevant error. The Trial Judge is highly experienced in Family Provision business and should in my opinion be understood to have seen the difficulties in attributing precision. If what his Honour said is conceived of as an error, it would be an error which worked favourably to the appellant, not against him, in considerations under s 7.
I do not think that the attack made on the Trial Judge’s exercise of powers under s 7 has been successful. I would dismiss the appeal with costs.

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LAST UPDATED:
3 June 2008