Francis v Martin
[2024] VSC 340
•20 June 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST
S ECI 2021 04842
BETWEEN:
| LOUISE ELLEN FRANCIS | Plaintiff |
| v | |
| PAUL JARVIS MARTIN (who is sued as executor of the Will of JOHN KENDALL FRANCIS & ORS (according to the attached Schedule) | Defendants |
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JUDGE: | Daly AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 May 2024, further written submissions filed on 31 May 2024 and 11 June 2024 |
DATE OF JUDGMENT: | 20 June 2024 |
CASE MAY BE CITED AS: | Francis v Martin |
MEDIUM NEUTRAL CITATION: | [2024] VSC 340 |
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TESTATOR’S FAMILY MAINTENANCE — Plaintiff is the beneficiary of a discretionary trust created by the will of her late father having previously inherited considerable assets from her late mother — Application by plaintiff for a family provision order seeking that her entitlements under the estate vest absolutely in her —Application by the defendants for summary judgment — Whether plaintiff’s claim has any real prospects of success — Plaintiff is the adult daughter of the deceased — Plaintiff failed to frankly and fulsomely disclose her financial position and the available evidence establishes she has substantial assets — Claim has no real prospects of success because she has no real prospects of establishing that the will failed to make adequate provision for her proper maintenance and support — Summary judgment granted — Civil Procedure Act 2010 (Vic) ss 62, 63 and 64 — Administration and Probate Act 1958 (Vic), Part IV.
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APPEARANCES: | Counsel | Solicitors |
| The Plaintiff in person | ||
| For the First and Second Defendants | Mr R Wells of counsel | Hicks Oakley Chessell Williams Pty Ltd |
| For the Third Defendant | Mr T Staindl of counsel | Keogh & Co |
HER HONOUR:
Introduction and background
The plaintiff, Ms Louise Francis, is a single woman of 66 years of age. She is not in the labour force, largely owing to some debilitating health issues. Arguably, she is quite a wealthy woman, having inherited substantial assets from her late mother, Dorothy Francis (‘Dorothy’), who died in 2015. Nevertheless, Ms Francis (‘Louise’)[1] has brought a claim under Part IV of the Administration and Probate Act 1958 (Vic) (‘Act’) against the executors of the estate of her late father, Mr John Kendall Francis (‘executors’).
[1]Given the commonality of surnames of the parties, first names are used in these reasons. No disrespect is intended.
Mr Francis, a retired surgeon (‘deceased’) was also a wealthy man. He died in November 2020, and left an estate valued by the executors as at March 2023 at $7,871,612.63. Probate of the deceased’s last will dated 14 December 2017 (‘will’) was granted on 23 June 2021. The estate includes a property in East Melbourne valued at $4,800,000, with the balance of approximately $3,000,000 held in cash and shares. The estate has estimated liabilities of approximately $500,000, with the primary creditor being the Australian Taxation Office.
The will provided, among other things, that the deceased’s partner, a lady now entering her nineties, holds a life interest in the East Melbourne property, with that interest to fall into residue after her death. The balance of the estate (and the residue, after the life interest is extinguished) is to be divided into two shares. One share of the balance is to be paid to the deceased’s son, Mr Nicholas Francis, (‘Nicholas’) absolutely.[2] The other share is to be held on trust by the executors of the estate, largely, but not entirely, for the benefit of Louise (‘will trust’).[3] The circumstances in which the will (and some prior wills) were made are discussed later in these reasons.
[2]A distribution of $850,000 has already been made to Nicholas.
[3]In addition to Louise, Nicholas and other family members are beneficiaries of the will trust, in order for the will trust to qualify as a discretionary trust for asset protection purposes.
In her originating motion filed on 21 December 2021, Louise claims as follows:
Pursuant to section 91(2)(d) of the Act, the Plaintiff says the distribution of the Deceased’s estate effected by the Will is not such as to make adequate provision for her proper maintenance and support.
The Plaintiff claims a half share of the deceased’s residuary estate (as provided for in Clause 6 of the Deceased’s Will) free from the trust limitation or restriction provided for in Clause 7 of the Will preventing such share vesting absolutely in the Plaintiff, or in the alternative, such amount of provision for her proper maintenance and support as the Court thinks fit having regard to the matters which the Court must take into account pursuant to section 91(4)(a), (b), & (c) and sections 91(5)(a) and section 91A of the Act.
Pursuant to section 97 of the Act, the Plaintiff seeks a family provision order:
(a) which upholds Clause 6 of the deceased’s Will;
(b) which removes Clause 7 from the deceased’s Will; and
(c)which orders that the Defendants pay her costs of and incidental to the Application.
Clauses 6 and 7 of the will deal with the deceased’s residuary estate as follows:
6.I GIVE the whole of the residue of my estate to my Trustees upon trust—
6.1.to sell, call in and convert my estate into money (with power to my Trustees to postpone such sale, calling in and conversion for so long as my Trustees shall think fit);
6.2.to pay from the proceeds of sale and conversion and my ready money my debts, funeral and testamentary expenses and death duties; and
6.3.to hold the residue of such money and all parts of my estate for the time being unsold ("my residuary estate") upon trust —
6.3.1.for such of my daughter LOUISE ELLEN FRANCIS (“Louise”) and Nicholas as survive me and if both survive me in equal shares provided that if Louise or Nicholas predeceases me leaving a child who survives me and attains the age of twenty-five (25) years, such child shall take and if more than one in equal shares the share in my residuary estate his, her or their mother or father would otherwise have taken. If Louise and Nicholas both predecease me and if no child of Louise or Nicholas survives me and attains the age of twenty-five (25) years then,
…
7.Louise’s share of my residuary estate (“Louise's share”) if she shall survive me shall not vest absolutely in her, but shall be held by my Trustees upon the following trusts —
7.1.until the date of death of Louise (“the distribution date”) —
7.1.1. to invest Louise’s share;
7.1.2.to pay the whole or such part of the income from Louise’s share as my Trustees in their discretion shall determine to any one or more Louise, Nicholas, Peter, David, Judith and any child of Louise, Nicholas, Peter, David and Judith in such shares and at such times as my Trustees shall in their absolute discretion determine and any income not so applied shall so far as permitted by law be accumulated and added to the capital of Louise's share;
7.1.3.I EMPOWER my Trustees in their absolute discretion at any time or times and from time to time to pay any sum or sums out of the capital of Louise's share to any one of more of Louise, Nicholas, Peter, David and Judith;
…
Louise does not seek to disturb the life interest in the East Melbourne property. She does not cavil with the share of the estate to be paid to Nicholas. Rather, she seeks that her entitlements from the estate be paid to her absolutely. She considers that the restrictions imposed by the creation of the will trust are unwarranted and unnecessary. She is also concerned that there are other potential beneficiaries of the will trust, such that the will trust is not really ‘her’ trust at all.
As noted above, this proceeding was issued in December 2021, but its progress has been glacial, for reasons which are not entirely clear, and it seems that the delay cannot be sheeted home to Louise alone.[4] On 21 February 2023, Nicholas successfully applied to be joined as a defendant to the proceeding.
[4]Although Louise instructing at least five firms of solicitors cannot have helped.
Nicholas is also the plaintiff in another proceeding in this Court (‘related proceeding’).[5] On 11 April 2022, in his capacity as the executor of Dorothy’s estate, Nicholas issued a proceeding to, in effect, compel Louise to accept the transfer of a property in Victoria Avenue, Albert Park (‘Albert Park property’) and the transfer of a half share of a property in Caroline Street, South Yarra (‘South Yarra property’) devised to her under Dorothy’s will. The related proceeding had been put on hold pending the outcome of this proceeding. However, once seized of both proceedings, I formed the view that the converse should apply, and, following a hearing in March 2024, on 21 March 2024, I made orders by consent directing Louise to take all necessary steps to accept the transfer of those properties. While not all proceeded entirely smoothly, the transfers were effected on 8 May 2024.[6]
[5]S ECI 2022 01311.
[6]The only issue left for determination in the related proceeding is the question of costs.
Following his appointment as executor of Dorothy’s estate, Nicholas commenced negotiations with Louise’s trustee in bankruptcy, Pitcher Partners, regarding what would be required to annul Louise’s bankruptcy. Nicholas gave evidence that Pitcher Partners indicated that a payment of $850,000 would be sufficient to discharge the bankruptcy. He made a payment to Pitcher Partners in that amount in June 2017 from Louise’s share of Dorothy’s estate, but this did not resolve the matter. Nicholas was subsequently informed that the sum of $163,000 was required to annul the bankruptcy. In late 2019, he sold another property in Caroline Street, South Yarra (‘Caroline Street property’) for $6.3 million, with $2.95 million paid to Pitcher Partners from the proceeds of sale in May 2020. Louise’s bankruptcy was annulled on 14 August 2020, and an unknown amount was returned by Pitcher Partners to Louise on a date unknown to the executors or Nicholas.
Returning to this proceeding, on 17 July 2023, the executors filed a summons seeking summary judgment against Ms Francis pursuant to ss 62 and 63 of the Civil Procedure Act 2010 (Vic) (‘CPA’) and r 22.22(b) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’). The application was supported by Nicholas, and was originally listed for 16 October 2023, but adjourned at the request of the executors. On 29 February 2024, I granted a further adjournment at Louise’s request, as she sought more information from the executors regarding the administration of the estate, and, having been self-represented for some time, she sought time to engage further legal representation. However, I also set the proceeding down for trial in July 2024 in the event that the summary judgment application was unsuccessful.
While I will address the parties’ submissions in more detail later in these reasons, the executors seek summary judgment on the basis that Louise has failed to frankly and fulsomely disclose her financial position to the Court, which is a prerequisite to establishing a claim for further provision under Part IV of the Act. Further, what evidence is available establishes that Louise is a woman of considerable means by reason of the distributions to her from Dorothy’s estate to date, her interest in another trust (which is the co-owner of nine income generating apartments in Darling Street, South Yarra (‘Darling Street apartment complex’)) an interest in another trust established by her late father (‘JKF trust’), and her entitlement to a half share of the balance of her mother’s estate, the distribution of which to her has been frustrated by her refusal to co-operate with Nicholas. Finally, this proceeding is an abuse of process, in that it is an attempt to circumvent the otherwise valid creation of a trust for her benefit, and to ventilate her grievances with the executors and Nicholas, with whom she has failed to properly engage.
I largely agree. Accordingly, I will grant summary judgment in favour of the executors, on the basis that Louise’s claims in this proceeding have no real prospects of success. My detailed reasons follow.
Relevant legislative framework and key authorities
The test for granting summary judgment is well settled. Pursuant to s 63(1) of the CPA, a Court may grant summary judgment in any civil proceeding if satisfied that the claim has no real prospects of success. In the decision of the Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[7] Warren CJ and Nettle JA stated as follows:
Upon the present state of authority:
(a)the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a “real” as opposed to a “fanciful” chance of success;
(b)the test is to be applied by reference to its own language and without paraphrase or comparison with the “hopeless” or “bound to fail test” essayed in General Steel;
(c)it should be understood, however, that the test is to some degree a more liberal test than the “hopeless” or “bound to fail” test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d)at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[8]
[7][2013] VSCA 158.
[8]Ibid [35].
Even where a Court finds that s 63 of the CPA is applicable and the proceeding has no real prospects of success, the Court may nevertheless refuse an application for summary judgment pursuant to s 64 of the CPA. Section 64 of the CPA provides that:
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—
(a)it is not in the interests of justice to do so; or
(b)the dispute is of such a nature that only a full hearing on the merits is appropriate.
Caution is required before granting summary judgment in proceedings bringing claims under Part IV of the Act. As stated by Zammit AsJ in IMO the Will and Estate of William James Milburn (deceased):[9]
When considering an application for summary judgment in a Part IV claim, the Court must be particularly cautious, in that Part IV claims tend to be of a type which may fall within s 64 of the CPA, as not being suitable for summary determination. That is because claims under Part IV of the Act involve the Court’s evaluation of the testator’s moral duty and the exercise of a discretion. As Mukhtar AsJ noted in Jackson v Newns, the exercise of such a discretion involves ‘some value judgment’ and means ordinarily family claims are best left to the trial to determine their sustainability. Mukhtar AsJ noted that summary disposal in this type of case is rare because facts in family claims are invariably in dispute to some appreciable degree, and a fair bit is, at large, in the field of discretion.[10]
(citations omitted).
[9][2014] VSC 229.
[10]Ibid [34].
However, there is no reason in principle why summary judgment cannot be granted in proceedings under Part IV of the Act. If the indisputable evidence shows that, for example, by reference to the statutory test and by taking the claimant’s case at its highest and best, the claimant is not an eligible person within the meaning of s 90 of the Act, or it is clear that the distribution of the deceased’s estate did not fail to make adequate provision for their proper maintenance and support, or, in the case of an adult child, that they are capable of providing for their own maintenance and support, then there may be little utility in proceeding to trial, given that the Court’s jurisdiction to make an order for further provision could not be enlivened.
In Rattle; Re O’Neill v Equity Trustees Ltd,[11] Moore J summarily dismissed a claim where the plaintiff, being the sister-in-law of the deceased, had never met the deceased, and no moral obligation to provide for the plaintiff was owed by the deceased. His Honour stated as follows:
I am nonetheless cognisant that the power to summarily dismiss a proceeding must be exercised with caution. Adopting that approach, for the reasons which follow, I have determined that the plaintiff’s application under Pt IV of the Act should be summarily dismissed as it is bound to fail. I have reached that conclusion because, taking the plaintiff’s case it its highest and having regard to the considerations set out in s 91(4) of the Act, there is no real question to be tried that the deceased had a responsibility to make provision for the plaintiff from his estate. I consider that, in the circumstances of this case, the contrary view is unarguable.[12]
[11][2019] VSC 565.
[12]Ibid [58].
In Stojevski v Stojevski,[13] Englefield JR gave summary judgment on the basis that, taking the plaintiff’s case at its highest and best, the plaintiff, a nephew of the deceased, was not dependent on the deceased within the meaning of ss 91(2)(b) and 91(4)(d) of the Act.
[13][2020] VSC 702.
In Jackson v Newns,[14] an application for summary judgment was brought by a defendant executor regarding a claim from a nephew of the deceased for further provision from his uncle’s estate. Mukhtar AsJ granted summary judgment, as his Honour concluded that the plaintiff was never dependent on his uncle, and a moral duty for further provision could not be found to have been owed simply by virtue of the closeness of their relationship. His Honour observed as follows:
What can be said at the outset is that summary disposals in this type of case are rare. That is because facts in family claims are invariably in dispute to some appreciable degree, and a fair bit is at large in a field of discretion. The claims usually involve a close examination of human relationships, interpersonal affairs, family stories, beliefs, perceptions, expectations, people’s station in life and impalpabilities in life. The court’s evaluation of the testator’s moral duty (about which, more later) and the exercise of a discretion that involves some value judgment means that ordinarily family claims are best left to trial to determine their sustainability.
But, the executor puts this application carefully. He accepts all that is contained in the plaintiff’s affidavit. Thus, questions about contested or additional evidence, the dynamics of trial and the deferral of more extensive argument to trial become immaterial. The question becomes the clinical one of asking now: on the plaintiff’s own evidence, is his case bound to fail because there is nothing to show that the plaintiff was a person for whom his uncle had a responsibility to make provision for proper maintenance and support? He says there was no moral duty at all.
In effect then, this court on a summary judgment application is making the same evaluation of the merits as would occur at trial. It does not strike me as a situation where the trial milieu is going to be a different or better forum for an argument of a more extensive kind. One approach is to take a “look and sniff” at the facts and form some instinctive view of whether the matter ought to go to trial. Instinct can succumb to caution because of lawyer’s experience that “concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising case into a successful judgment”.[15]
[14][2011] VSC 32.
[15]Ibid [11]-[13].
Turning now to the relevant provisions of Part IV of the Act, s 90A(1) of the Act provides that an eligible person may apply to the Court for a family provision order. As an adult child of the deceased, Louise is an eligible person.
Section 91 provides for the circumstances in which the Court’s jurisdiction to make a family provision order is enlivened.
(1)Despite anything to the contrary in this Act, on an application under section 90A, the Court may order that provision be made out of the estate of a deceased person for the proper maintenance and support of an eligible person.
(2)The Court must not make a family provision order under subsection (1) unless satisfied—
(a) that the person is an eligible person; and
(b)in the case of a person referred to in paragraphs (h) to (k) of the definition of “eligible person”, that the person was wholly or partly dependent on the deceased for the eligible person’s proper maintenance and support; and
(c)that, at the time of death, the deceased had a moral duty to provide for the eligible person's proper maintenance and support; and
(d)that the distribution of the deceased's estate fails to make adequate provision for the proper maintenance and support of the eligible person, whether by—
(i) the deceased's will (if any); or
(ii) the operation of Part IA; or
(iii) both the will and the operation of Part IA.
(3)For the purposes of subsection (2)(b), the Court must disregard any means-tested government benefits that the eligible person has received or is eligible to receive.
(4)In determining the amount of provision to be made by a family provision order, if any, the Court must take into account—
(a)the degree to which, at the time of death, the deceased had a moral duty to provide for the eligible person; and
(b)the degree to which the distribution of the deceased's estate fails to make adequate provision for the proper maintenance and support of the eligible person; and
(c)in the case of an eligible person referred to in paragraph (f) or (g) of the definition of "eligible person", the degree to which the eligible person is not capable, by reasonable means, of providing adequately for the eligible person's proper maintenance and support; and
(d)in the case of an eligible person referred to in paragraphs (h) to (k) of the definition of "eligible person", the degree to which the eligible person was wholly or partly dependent on the deceased for the eligible person's proper maintenance and support at the time of the deceased's death.
(5) The amount of provision made by a family provision order—
(a)must not provide for an amount greater than is necessary for the eligible person's proper maintenance and support; and
(b)in the case of an eligible person referred to in paragraphs (h) to (k) of the definition of “eligible person”, must be proportionate to the eligible person’s degree of dependency on the deceased for the person's proper maintenance and support at the time of the deceased's death.
Section 91A(2) of the Act provides the following list of discretionary factors the Court may have regard to when making a family provision order once the requirements of s 91(2)(d) of the Act (‘threshold test’) have been met, and the mandatory considerations in s 91(4) have been taken into account:
(a)any family or other relationship between the deceased and the eligible person, including—
(i)the nature of the relationship; and
(ii)if relevant, the length of the relationship;
(b)any obligations or responsibilities of the deceased to—
(i)the eligible person; and
(ii)any other eligible person; and
(iii)the beneficiaries of the estate;
(c)the size and nature of the estate of the deceased and any charges and liabilities to which the estate is subject;
(d)the financial resources, including earning capacity, and the financial needs at the time of the hearing and for the foreseeable future of—
(i)the eligible person; and
(ii)any other eligible person; and
(iii)any beneficiary of the estate;
(e)any physical, mental or intellectual disability of any eligible person or any beneficiary of the estate;
(f) the age of the eligible person;
(g)any contribution (not for adequate consideration) of the eligible person to—
(i) building up the estate; or
(ii) the welfare of the deceased or the deceased's family;
(h)any benefits previously given by the deceased to any eligible person or to any beneficiary;
(i)whether the eligible person was being maintained by the deceased before that deceased's death either wholly or partly and, if the Court considers it relevant, the extent to which and the basis on which the deceased had done so;
(j)the liability of any other person to maintain the eligible person;
(k)the character and conduct of the eligible person or any other person;
(l)the effects a family provision order would have on the amounts received from the deceased's estate by other beneficiaries;
(m)any other matter the Court considers relevant.
The legal principles governing applications for family provision were summarised by McMillan J in Re Christu; Christu v Christu,[16] as follows:
[16][2021] VSC 162.
In accordance with s 90A of the Act, an eligible person may apply to the Court for a family provision order from the estate of a deceased person. Upon application, s 91(2) of the Act provides that the Court must not make such provision unless satisfied:
(a) that the applicant is an eligible person;
…
(c)that, at the time of death, the deceased had a moral duty to provide for the eligible person’s proper maintenance and support; and
(d)that the distribution of the deceased’s estate fails to make adequate provision for the proper maintenance and support of the eligible person.
It is only upon satisfaction of those requirements that the Court’s discretionary jurisdiction to award provision is enlivened.
When determining the amount of any provision, the Court must take into account the degree to which, at the time of death, the deceased had a moral duty to provide for the eligible person, and the degree to which the distribution of the estate fails to make adequate provision for the proper maintenance and support of the eligible person. As the plaintiff is an adult child, the Court must also take into account the degree to which he is not capable, by reasonable means, of providing adequately for his own proper maintenance and support. The financial need of an adult child is also to be considered in the context of whether the estate failed to make adequate provision for the eligible person’s proper maintenance and support.[17]
[17]Ibid [6]-[9].
As for the meaning of moral duty owed to an adult child, McMillan J referred to the oft-cited decision of Hallen J in Walsh v Walsh,[18] where his Honour stated as follows:
[18][2013] NSWSC 1065.
(a)The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.
(b)It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his, or her, children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation.
(c)Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child’s life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise, they would be left destitute.
(d)If the applicant has an obligation to support others, such as a parent’s obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant. But the Act does not permit orders to be made to provide for the support of third persons that the applicant, however reasonably, wishes to support, where there is no obligation of the deceased to support such persons.
(e)There is no need for an applicant adult child to show some special need or some special claim.
(f)The adult child’s lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased.
(g)The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim.
(h)Although some may hold the view that equality between children requires that “adequate provision” not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration, individual conduct, circumstances, financial resources, including earning capacity, and financial needs, in the court’s determination of an applicant’s case.
(i)There is no obligation on a parent to equalise distributions made to his, or her, children so that each child receive benefits on the same scale as the other. There is no standard measure for the extent of the duty owed by a parent to a child.[19]
(citations omitted).
[19]Ibid [121].
A claimant asserting that a testator has failed to make adequate provision for their proper maintenance and support must demonstrate that they are in need, by reference to, among other things, their financial position. In the decision of Re Janson;Gash v Ruzicka,[20] McMillan J stated as follows:
Under ss 91(4)(b) and 91(5) of the Act, the concepts of the plaintiff's “adequate” and “proper” maintenance and support are central to the question of the quantum of any order for family provision. This inquiry necessitates the Court having an understanding of the plaintiff's need through evidence of her financial circumstances. This is reflected in the requirement that an applicant’s “need” be demonstrated before the Court has jurisdiction to make an order for family provision. While “need” is a relative concept and does not solely mean material need, the Court must have adequate evidence of an applicant’s financial circumstances before an order for family provision can be made.
…
A moral claim alone is not sufficient to warrant an order for further provision. Despite the concessions of the defendant, the onus nonetheless remains on the plaintiff to lead sufficient evidence of her financial situation. To make an order for family provision without appropriate evidence of the plaintiff's need would be “to do no more than act on speculation”. It would also be contrary to the requirements of pt IV of the Act.
(citations omitted and emphasis added).
[20][2020] VSC 449 [37], [44].
The evidence
The executors relied on their joint affidavits sworn on 18 August 2022 and 23 March 2023, and the affidavits of Nicholas sworn on 24 March 2023 and 20 October 2023. Louise relied upon affidavits sworn by her on 21 March 2022 (‘Louise’s first affidavit’), and 24 April 2023 (‘Louise’s second affidavit’), and 28 May 2024 (‘Louise’s third affidavit’).
Louise’s first affidavit sets out various background matters, including her relationship with her parents, the nature of her upbringing, and the various jobs held by her from the time she was a teenager. Following her parent’s separation, Louise primarily resided with her father at his East Melbourne property, whilst her brother primarily resided with his mother. Louise had a very close relationship with her father.
Louise deposed that she suffered debilitating permanent injuries as a consequence of a serious assault in March 1993, leaving her unable to resume her previous employment in journalism and advertising.
In Louise’s first affidavit, she deposed further as follows:
(a) she was declared bankrupt in July 2011 due to alleged outstanding legal fees. The bankruptcy was annulled in August 2021;[21]
[21]This is an error. The bankruptcy was annulled in August 2020. The judgment upon which the initial sequestration order was made was a judgment for a debt of $11,847 owing by Louise to a firm of solicitors. However, given the length of the bankruptcy period, and given that the uncontested evidence of Nicholas was that in about 2017 Pitcher Partners informed him that the sum of $850,000 and then a further $263,000 was required to annul the bankruptcy, I can infer that the amount owed by Louise to her creditors in 2011 was considerably more than the judgment debt which triggered the bankruptcy.
(b) following her assault, she has been primarily reliant on savings and funds that had been distributed to her by the deceased from family trusts;
(c) on 16 November 2015, Dorothy passed away and Louise received half of her residuary estate absolutely;
(d) Louise believes that the deceased was unduly influenced by an unspecified person or persons to place her half share of his estate in a discretionary trust to be managed by the executors. No similar condition was imposed on Nicholas’ entitlement under the will;
(e) the Albert Park property was severely damaged by a storm in January 2020, and requires extensive repairs, which have not been carried out by Nicholas. The South Yarra property similarly requires extensive repairs, and Louise requires her inheritance from the estate to carry these out;
(f) Louise is reliant on her savings for maintenance and support, has minimal income and lives simply. She does not own or drive a car and does not spend money on entertainment or travel; and
(g) she has an autoimmune disorder which manifests itself in various ways.
In the executors’ affidavit sworn on 18 August 2022, the executors deposed, in summary, as follows:
(a) the deceased’s solicitor, Mr David Williams, then a partner at Hicks Oakley Chessell Williams (‘HOCW’), wrote to the deceased on 8 October 2012, saying that on 1 October 2012, the deceased attended HOCW’s offices wishing to review his existing will dated 29 September 2009 (‘2009 will’). The 2009 will provided that the deceased’s residuary estate be distributed equally between his two children absolutely. Following Louise’s bankruptcy, the deceased sought to protect her inheritance under the will from vesting in the trustee in bankruptcy. Mr Williams suggested that Louise’s share of the estate be placed in a trust to be managed by the executors from which she would be eligible for payments of capital and income from time to time;
(b) on 8 October 2012, the deceased executed a new will which placed Louise’s share of his estate in a trust (‘2012 will’);
(c) Mr Williams wrote to the deceased again on 24 November 2017, saying that the deceased had attended HOCW’s offices on 16 November 2017, and met with Mr Williams to provide instructions for a new will. The letter enclosed a copy of a new draft will, which altered a right of occupation provision for his partner, and reminded the deceased of the trust that had been put in place for Louise’s share of the estate. A further letter from Mr Williams dated 12 December 2017 confirmed that he had spoken with the deceased by phone on 7 December 2017 and was instructed to include identical trust provisions for Louise’s entitlement in the new will. On 14 December 2017, the deceased executed the will;
(d) Dorothy died on 16 November 2015, leaving a will dated 29 October 2015. Probate of Dorothy’s will was granted to Nicholas on 8 March 2016. The total estate was valued at approximately $12,687,567.61. Louise’s share of her late mother’s estate was valued at approximately $5.18 million;
(e) as to email correspondence exchanged between Nicholas and the executors concerning the administration of Dorothy’s estate, including negotiations that Nicholas had undertaken with Pitcher Partners to finalise Louise’s bankruptcy; and
(f) Louise has failed to disclose her financial position in her affidavits, nor had she made any request for payment from the estate of the deceased at the time of the executors swearing this affidavit.
The executors’ affidavit sworn on 18 August 2022 exhibited copies of the 2009 will and the 2012 will, the grant of probate of Dorothy’s will and the annexed inventory of assets and liabilities, and copies of email correspondence between Nicholas and the executors regarding the administration of Dorothy’s estate.
The executors swore a further affidavit on 23 March 2023, which deposed as to the financial position of the estate, as described in paragraph 2 of these reasons. An interim distribution of $850,000 was made to Nicholas on 18 November 2022.[22] The future liabilities of the estate include the legal fees and disbursements related to the ongoing administration of the estate and defence of this proceeding, accounting fees, estate taxation, and ongoing expenses related to the East Melbourne property. The executors’ affidavit exhibited a valuation report of the East Melbourne property, a copy of a transactions statement from the sale of a portion of the deceased’s shareholdings, and statement of receipts and payments reflecting the balance of the funds held on trust and in a controlled money account for the estate.
[22]The final distribution of Nicholas Francis’ share of the estate has been held in abeyance pending the finalisation of this proceeding.
In his affidavit sworn on 24 March 2023 Nicholas deposed, in summary, as follows:
(a) as to his and Louise’s entitlements under Dorothy’s will. Louise’s entitlement under the estate was valued at over $5.18 million and included real property, cash and shares;
(b) as to his negotiations with Louise’s trustee in bankruptcy, Pitcher Partners, regarding what would be required to repay her debts and have the bankruptcy annulled (see paragraph 9 of these reasons). A resolution was not reached with Pitcher Partners due to a lack of co-operation from Louise;
(c) in late 2019 he sold the Caroline Street property, which was owned by a trust of which Dorothy was the sole beneficiary, for $6.3 million, with $2.95 million of the proceeds forwarded to Pitcher Partners. Louise’s bankruptcy was subsequently annulled, and Nicholas believes the surplus funds, which would have been substantial, have been transferred to Louise; and
(d) as to the difficulties encountered by him by reason of Louise refusing to execute transfer of land documents for the South Yarra property and Albert Park property and the subsequent commencement of the related proceeding.
Exhibited to Nicholas’ affidavit was a copy of the grant of probate of Dorothy’s estate, the inventory of assets and liabilities of Dorothy’s estate, a copy of the 2023 Land Tax Assessment and rates notice issued on 31 January 2023 for the South Yarra property, and a copy of the certificates of titles for each of the South Yarra property and Albert Park property.
Louise’s second affidavit responded to the executors’ affidavit sworn on 18 August 2022 and Nicholas’ affidavit sworn on 24 March 2023, in summary, as follows:
(a) her bankruptcy was annulled three months prior to her father’s passing, which contradicts the executors’ assertion that the purpose of the establishment of the will trust was to protect the assets from liquidators;
(b) the executors did not visit the deceased in the three months prior to his death and had they done so, the trust clause could have been removed;
(c) she has been unable to file accurate financial information given that Nicholas has not provided to her full and proper financial information regarding Dorothy’s estate; and
(d) Louise had retained a solicitor with PEXA authorisation in 2021 to facilitate the transfers of the South Yarra property and Albert Park property to her, however no response was received from Nicholas’ solicitor with respect to the transfer of these properties.
Nicholas’ affidavit sworn on 20 October 2023 provided further detail as to the administration of Dorothy’s estate as well as developments following the date of his earlier affidavit. In his 20 October 2023 affidavit, Nicholas deposed as to the following matters:
(a) the deceased was aware of the contents of Dorothy’s will;
(b) combining the values of a half share of the South Yarra property and Albert Park property equates to an entitlement of approximately $4.15 million for Louise. The remaining asset in Dorothy’s estate is a 52 percent interest in a UK based company, Safeside Limited, which holds two bank accounts with Barclays Bank UK, with a combined balance of A$287,000 as at September 2023.[23]
[23]The evidence regarding the entitlements to this fund is a little confusing, but it seems that ultimately these funds will be shared equally between Louise and Nicholas.
(c) as at 17 August 2023, the South Yarra property was appraised as having a market value of approximately $7 million to $7.7 million, and the Albert Park property was appraised as having a market value of $2.1 million to $2.3 million. Accordingly, the value of Louise’s combined entitlements to the South Yarra property and Albert Park property is approximately $5.875 million;
(d) as to the various attempts made by him and Pitcher Partners since 2016 to effect a transfer of ownership of the South Yarra property and Albert Park property to Louise. Several attempts by Pitcher Partners to contact Louise were ignored, and the transfer documents were not executed by Louise;
(e) an unsuccessful mediation was conducted on 21 June 2023;[24]
[24]Nicholas’ affidavit included more information about what took place and what was conveyed at the mediation, but I have not included those details in these reasons by reason of s 131 of the Evidence Act 2008 (Vic).
(f) further details regarding the negotiations with Pitcher Partners to annul Louise’s bankruptcy and the difficulties encountered by Nicholas as a consequence of Louise’s conduct. While he does not know the precise amount refunded by Pitcher Partners to Louise from the sale of the Caroline Street property, he believes that only a small portion of this sum was required to annul Louise’s bankruptcy, given what Pitcher Partners had already been paid;
(g) on 18 August 2023, Nicholas was copied into an email sent by the executors’ solicitors which attached an email from Louise in which she stated she does not have any current assets and only has accessible funds of around $100,000;
(h) in 1965, two discretionary trusts were created for the benefit of Louise and Nicholas, the Louise Francis Trust (‘LF trust’) and Nicholas Francis Trust (‘NF trust’) (together, the ‘Darling Street trusts’). The initial trustees were the deceased and Frank Spry, who is also now deceased. On the passing of both of the initial trustees, the terms of the trust deeds of the Darling Street trusts provided that the trustee shall distribute the income equally between Louise and Nicholas, and on either of their death, the capital of each of the trusts would be held on trust for their issue. The deceased remained a trustee of each of the trusts until 22 October 2015, after which Dorothy, as the appointor, appointed Nicholas in his place;
(i) the Darling Street trusts own nine apartments in the Darling Street apartment complex through an informal partnership arrangement. The capital improved value of each of the units is approximately $550,000, and they are each leased to tenants. Following Louise’s bankruptcy, Nicholas was concerned about making electronic payments to Louise, and from around June 2016 commenced making payments by cheques he hand delivered to the Albert Park property, where Louise resided at the time. In 2020, given the restrictions on community movement associated with the COVID-19 pandemic, he then posted the cheques to Louise by registered mail, none of which were collected, and the letters were returned to him unopened. The last cheque cashed by Louise was cashed on 20 November 2020;
(j) in around 2018, Louise moved to one of the suites at the South Yarra property without consulting with Nicholas, and Louise has refused Nicholas access to the South Yarra property;
(k) by May 2019, the liquid assets of Dorothy’s estate were exhausted, and since then all expenses relating to the South Yarra property and Albert Park property have either been met from the income of the Darling Street trusts or paid by Nicholas personally; and
(l) Nicholas’ affidavit concluded as follows:
It is evident from the contents of this affidavit that:
(a)the Plaintiff continues to refuse to take her significant entitlements from Dorothy's estate;
(b)the Plaintiff also refuses to take the significant income source to which she is entitled from the Trusts;
(c)the Plaintiff has shown, and continues to show, an utter disregard for the continued incurrence of significant, and entirely avoidable, debts; debts which serve only to erode the significant wealth she is entitled to;
(d)accordingly, our late father’s decision to provide for the Plaintiff in the form of a trust was entirely justified.
The exhibits to Nicholas’ affidavit sworn on 20 October 2023 included:
(a) email correspondence sent by him to the deceased in early 2016;
(b) a record of the balance of the funds held in the United Kingdom by Safeside Limited as at 6 September 2023;
(c) copies of title searches and appraisals for the South Yarra property and Albert Park property;
(d) copies of correspondence between him, Pitcher Partners and Louise regarding the annulment of the bankruptcy;
(e) the originating motion commencing the related proceeding;
(f) copies of the deeds of settlement establishing the JKF trust[25] and the Darling Street trusts;
(g) copy of an email from Louise to HOCW dated 15 August 2023 regarding her financial position; and
(h) the rates and valuation notices for one of the Darling Street apartments and the real estate agent’s folio summary for the 2023 financial year showing the income and expenses associated with the Darling Street apartment complex, which shows that the net income generated by the Darling Street apartment complex in the year ending 30 June 2023 was $145,306.69.
[25]The JKF trust was established by the deceased in 1977. Once this trust is wound up, the proceeds will be distributed to Louise and Nicholas equally. It is not clear from the evidence whether they will receive approximately $400,000 each, or $400,000 between them.
Louise’s third affidavit was filed after the conclusion of the hearing of the application, on 28 May 2024.[26] She deposed as to the following matters:
[26]Ms Francis is now represented by a solicitor, and this affidavit was filed by her new solicitor. The submissions filed on her behalf a few days later were drawn by her solicitor and counsel.
(a) the health issues which prevented her from attending the hearing of the summary judgment application in person;[27]
[27]Louise joined the hearing by telephone.
(b) the difficulties she has encountered in engaging legal representation;
(c) the delays encountered in receiving the administration accounts for the estate of the deceased and Dorothy’s estate as well as other documents, including financial statements for the JKF trust;
(d) an assessment of the South Yarra property estimates that repairs and restoration would cost approximately $954,000. Louise awaits a similar assessment in relation to the Albert Park property, which also requires extensive repairs;
(e) she denied that she has received any trust distributions from the LF trust in the last seven to eight years and stated that there are inaccuracies in the financial statements prepared for Dorothy’s estate and for the LF trust. A tax return completed for the LF trust in 2021 also incorrectly records a distribution to her of approximately $19,000;
(f) she confirmed that her bankruptcy was annulled on 14 August 2020;
(g) she believes the establishment of the will trust by cl 7 of the will was due to the treatment the deceased received from the trustee in bankruptcy, and the contents of the executors’ affidavit sworn on 18 August 2022 indicates that Louise was to be the sole beneficiary of the will trust. Correspondence from Mr Williams to the deceased referred to in the executors’ affidavit sworn on 18 August 2022 relating to the insertion of cl 7 was not exhibited to their affidavit;
(h) no letter of wishes or instructions was left by the deceased concerning the administration of the will trust; and
(i) the deceased was not in good health at the time he made the will.
Exhibited to Louise’s third affidavit were the following documents:
(a) a medical certificate relating to Louise’s current health issues;
(b) copies of correspondence from Louise requesting administration accounts for Dorothy’s estate and the deceased’s estate and copies of the administration accounts ultimately provided;
(c) copies of correspondence between Louise, the executors and Nicholas regarding the JKF trust, timetabling matters in this proceeding, allegations made by Louise regarding the conduct of the executors, and concerns held by Louise about the deceased’s medical treatment prior to his death;
(d) copies of orders made in this proceeding and in the related proceeding;
(e) a quotation provided for repairs and renovation works to the South Yarra property totalling $954,100;
(f) the financial statements for Dorothy’s estate and the Darling Street trusts for the 2021 financial year and draft financial statements for the JKF trust between 2021 to 2023;
(g) the bankruptcy annulment certificate dated 14 August 2020; and
(h) another copy of the will.
In an affidavit sworn on 21 May 2024, Nicholas’ solicitor, Mr Anthony Muir, deposed that the transfer of the Albert Park property to Louise as the sole registered proprietor, and the transfer of the South Yarra property to Nicholas and Louise in equal shares as tenants in common have been registered, and exhibited the current title searches for these properties, which show that the transfers were effected on 8 May 2024.
The parties’ submissions
In their written submissions, the executors submitted that Louise has not been fulsome or forthright in setting out her financial position, including the significant inheritance she has received from Dorothy’s estate, and as such, her claim has no reasonable prospects of success. The executors relied upon the decision of Hallen J in Walsh v Walsh,[28] which sets out the principles relevant to the moral duty a testator owes to an adult child (extracted at paragraph 24 of these reasons). Beyond making adequate provision for the proper maintenance and support for eligible persons, there is no obligation on a testator to provide fair or equal distributions of their estate amongst claimants.[29]
[28][2013] NSWSC 1065 [121].
[29]Referring to Walsh v Walsh [2013] NSWSC 1065 [121]; Blore v Lang (1960) 104 CLR 124 [135]; Re Marsella; Marsella v Wareham [2018] VSC 312 [82].
Counsel for the executors submitted that the onus is on Louise to disclose her financial position fully and frankly and to demonstrate a level of financial need that would enliven the Court’s jurisdiction to make a family provision order. The executors relied on the decision of McMillan J in Re Janson; Gash v Ruzicka,[30] where her Honour stated as follows:
The importance of an applicant for family provision providing adequate evidence of their financial circumstances is emphasised in Collings v Vakas, where, in dismissing the plaintiff’s claim, Campbell J said:
‘[B]efore a court can be satisfied that a plaintiff has been left without adequate provision, the court needs to be persuaded that it has been presented, at least in broad outline, with the whole picture concerning the plaintiff’s financial situation. In the present case, even though there are two elements of the plaintiff’s financial situation about which I am satisfied (that she owns no real estate, and has family responsibilities), when another crucial element of the plaintiff’s financial situation (namely, her income and expenditure) is not satisfactorily proved, it is not possible to conclude that she has been left without adequate provision.’[31]
A moral claim alone is not sufficient to warrant an order for further provision. Despite the concessions of the defendant, the onus nonetheless remains on the plaintiff to lead sufficient evidence of her financial situation. To make an order for family provision without appropriate evidence of the plaintiff’s need would be ‘to do no more than act on speculation’. It would also be contrary to the requirements of pt IV of the Act.[32]
[30][2020] VSC 449.
[31][2006] NSWSC 393 [67].
[32]Re Janson; Gash v Ruzicka [2020] VSC 449 [43]-[45].
The executors submitted that it is clear that Louise is unhappy that her brother received his half share of their father’s estate absolutely, whilst her share has been placed in trust, and that her claim effectively seeks to wind up or dissolve the will trust. Counsel for the executors submitted that it is clear that the will trust was set up for the primary benefit of Louise, and there is no evidence to suggest that anyone else is likely to receive any distributions from the will trust during her lifetime. Further, given what is known about Louise’s significant financial resources, Louise’s claim has no reasonable prospect of success, and ought be dismissed.
Counsel for Nicholas endorsed the submissions made by the executors, and emphasised that it was incumbent on Louise to set out her financial position in support of her claim for further provision from the estate. Counsel for Nicholas submitted that this proceeding is not the appropriate vehicle for Louise to seek to wind up the will trust, and her conduct has stalled the final distribution of the deceased’s estate.
Louise was granted leave to file written submissions following the conclusion of the hearing on 20 May 2024. In her submissions filed on 31 May 2024,[33] Louise submitted that she and Nicholas have been treated, and were always intended to be treated equally by their parents in financial matters, and this was acknowledged by Dorothy’s will, the Darling Street trusts and JKF trust and, save for cl 7 of the will, the will. The financial information regarding the administration of her parents’ estates has also not been provided in a timely manner.
[33]Which were drawn by her recently engaged solicitor and counsel and fulsomely addressed the issues in the application.
Louise submitted that she is facing substantial financial costs with respect to the repairs and renovations required for the South Yarra property and Albert Park property.
Louise submitted that the will does not make adequate provision for her due to the operation of cl 7 of the will, which diminishes her share of the estate to a mere expectancy. Should the deceased have intended to limit Louise’s interest in his estate, additional wording should have been included in cl 6 to that effect.
Further, Louise submitted that cll 6 and 7 of the will do not sit comfortably together, given that the operation of cl 7 is contrary to the preceding clause, and ought be deemed repugnant. Louise referred to the decision of Kyrou J in Shaune v Bourgouin,[34] where his Honour stated as follows:
Where a testator has made an absolute gift of property followed by words which are consistent with a lesser interest having been given in the property, unless it is intended that the subsequent or superadded words are to cut down the absolute interest given, then the superadded words will be treated as uncertain or repugnant and will not be enforced.[35]
[34][2012] VSC 619.
[35]Ibid [36].
As for the executors’ evidence that cl 7 of the will was inserted to protect her share of the estate from Louise’s trustee in bankruptcy, Louise submitted that there is no evidence regarding the advice the deceased received at the time cl 7 was inserted into the 2012 will or any specific directions or intention as to how the trust would be administered. No such restriction was placed on Louise’s share of the deceased’s estate pursuant to the 2009 will.
Louise submitted that her interest under cl 6 of the will should no longer be encumbered by the trust in cl 7, on the basis that there is no need for cl 7 of the will following the annulment of Louise’s bankruptcy.
Louise submitted further as follows:
In the case of large estates there may be a more liberal assessment of what is required to discharge the moral duty of the deceased to the applicant.[36] This will be taken into account in assessing whether the deceased has made adequate provision for his daughter.
[36]Referring to Re Buckland [1966] VR 404, 415; Limberger v Limberger [2021] NSWSC 474 [475]-[485].
With respect to each of the discretionary factors to be considered when making a family provision order, Louise submitted, in summary, as follows:
(a) she had a close relationship with the deceased, and the deceased was obliged to make provision for her;
(b) her financial resources comprise her interest under Dorothy’s will and the Darling Street trusts and the JKF trust, though she anticipates considerable expenditure will be required to repair and renovate the South Yarra property and Albert Park property. Louise also has ongoing living, medical and other incidental expenses. She does not earn any income from work or superannuation. There is no competing need, or any other eligible person save for Nicholas.
(c) Louise needed and received financial support from her parents during their lifetime and is reliant on support from their respective estates;
(d) no other person has any liability to maintain her;
(e) the order sought would remove the mere expectancy interests of the other beneficiaries of the trust established in cl 7 of the will, but would not affect their other entitlements under the will; and
(f) Dorothy and the deceased wished for their children to receive an equal share of their estates. The insertion of cl 7 in the 2012 will and will was to protect Louise’s interest from the trustee in bankruptcy, but her bankruptcy has now been annulled. The estate is large and making the further provision sought by Louise would not significantly reduce the interest of any other beneficiary.
Louise observed that the Court’s power to finalise proceedings on a summary basis should be exercised with caution, and should not be exercised if there is a real question to be tried. Further, applications for further provision under Part IV of the Act are generally cases which may fall within the exception under s 64 of the CPA, because their disposition involves the exercise of a discretion and some degree of value judgment. Accordingly, the trial scheduled for 8 July 2024 should proceed.[37]
[37]Referring to Jackson v Newns [2011] VSC 32 [11] (Mukhtar AsJ). See also Re Gdanski: McLaren v Gdanski [2022] VSC 565 [61]-[62] (Englefield JR).
In their written submissions in reply, the executors submitted as follows in response to Louise’s third affidavit:
(a) the late filing of the administration accounts for Dorothy’s estate is a matter between Louise and Nicholas, not between Louise and the executors, save to note that Louise’s interest in Dorothy’s estate is a significant financial resource for Louise;
(b) Louise does not deny that she has an interest in Dorothy’s estate or take issue with the estimated value of that interest;
(c) irrespective of any repairs required to either property, no evidence has been adduced by Louise suggesting that the approximate values of the South Yarra property and Albert Park property are not as estimated by Nicholas;
(d) Louise fails to address what payment she received from Pitcher Partners after the sum of $2.95 million was paid to them by Nicholas after the sale of the Caroline Street property;
(e) while the will trust is a discretionary trust, the trustees have not made any payments out of the will trust to any person other than Louise; and
(f) the Court is not obliged to make a family provision order simply to provide equality in entitlements between the deceased’s children.
The executors submitted as follows in response to Louise’s written submissions:
(a) the legal effect of cll 6 and 7 of the will are clear and unambiguous, and in any event, this is not the appropriate vehicle to advance any arguments in relation to the proper construction and effect of the will;
(b) the will trust was not limited to the period of Louise’s bankruptcy;
(c) the sole consideration when exercising the jurisdiction under Part IV is whether or not at the date of the deceased’s death, the provision in the will fails to provide adequately for the proper maintenance and support of Louise to the extent that a moral obligation was owed to her by the deceased. Even if the underlying rationale for including cl 7 of the will no longer subsisted at the date of the deceased’s death, that is not a proper basis for making a family provision order; and
(d) Louise fails to address in quantitative terms her financial needs and the extent to which she is unable to properly provide for herself having regard to all of her current financial resources.
Nicholas’ written submissions in reply adopted the executors’ submissions. In particular, Nicholas submitted that Louise’s third affidavit deposed as to matters irrelevant to the administration of the deceased’s estate, noted that the related proceeding has now been resolved, save for the question of costs, and that there remains a lack of any evidence advanced by Louise as to her financial situation and financial need by reference to her assets, liabilities, income and expenditure.
Discussion
In assessing whether Louise’s claims in this proceeding have any real prospects of success, I will focus on the threshold test: that is, is there a real prospect that the Court’s jurisdiction to make an order for further provision would be enlivened? If there was a real prospect that the Court’s jurisdiction to order further provision would be enlivened, then it would generally not be appropriate to order summary judgment, given the number and scope of the discretionary factors in s 91A(2) of the Act which are required to be evaluated once a claimant has satisfied the threshold test. And, in this case, as suggested by Louise in her submissions, many of the discretionary factors would weigh in the favour of ordering further provision.
However, the primary difficulty for Louise’s claim in this proceeding is that, on the extensive evidence already available (to which I expect little would be added at trial), there is no real prospect of Louise establishing that, in creating the will trust, the deceased failed to make adequate provision for her proper maintenance and support. Accordingly, the Court’s jurisdiction to make an order for further provision is not enlivened, and there is no utility in having a trial in order to canvass matters going to the discretionary factors.
The uncontested evidence establishes that Louise:
(a) is the sole registered proprietor of the Albert Park property (valued at between $2.1 million to $2.3 million as at August 2023) and the owner of a half share in the South Yarra property, valued at between $7.0 million to $7.7 million as at August 2023;
(b) she resides at the South Yarra property, and all of the expenses associated with the South Yarra property and the Albert Park property are being met by the income from the Darling Street trusts and/or Nicholas;
(c) she has not co-operated with Nicholas or the executors to redeem her entitlements from Dorothy’s estate or the Darling Street trusts, and has taken no steps to make arrangements for distributions of either capital or income from the will trust save for demanding that funds be released to pay her legal fees to defend this application;
(d) the current balance of the will trust is approximately $1.25 million,[38] which is likely to be augmented by a further $2.4 million in the not too distant future upon the extinguishment of the life interest in the East Melbourne property;
(e) there is a sound basis to infer that a significant sum of money, probably well in excess of $2 million, was paid to her by Pitcher Partners from the proceeds of sale of the Caroline Street property in around 2020; and
(f) further distributions of approximately $145,000 from Safeside Limited and either $200,000 or $400,000 from the JKF trust may be on their way to her in the not too distant future.
[38]Taking into account the estimated liabilities of the estate.
Further, despite many opportunities to do so, Louise has not adduced any evidence about her assets and liabilities or her income and expenditure, which is what is required by the authorities (see paragraphs 25 and 42 of these reasons).
I accept that Louise has health conditions that prevent her from working, and that she has no income from social security, almost certainly because she would not be eligible, given her means. I accept that she has a need for a steady income to enable her to live in security and comfort. I accept her evidence that the Albert Park property and the South Yarra property require renovations and repairs, and that such renovations and repairs might cost somewhere in the order of the quote in evidence.
However, what I do not accept is that Louise is not capable of meeting those needs from the resources currently available to her, even excluding the funds which must have been paid to her by Pitcher Partners in 2020. She owns a valuable property, being the Albert Park property, outright, and has a half share of an extremely valuable property, being the South Yarra property. Either or both of these properties could be sold to fund the purchase of alternative properties, or to fund improvements at either or both of them, or to create a fund to generate a regular income from investments, or all of the above. Alternatively, there is no reason in principle why funds from the will trust could not be made available for these purposes or any of them. There is, after all, more than enough money in the will trust to do so.
I accept that Louise does not appear to have received income from the assets of Dorothy’s estate, or the Darling Street trusts, at least not in recent years. However, the uncontested evidence is that Louise’s situation in that regard is largely one of her own making. If I am wrong about that, and instead there has been some maladministration or other wrongdoing on Nicholas’ part, then this proceeding is not the vehicle to address these issues. Put simply, Louise’s failure to collect her considerable inheritance from Dorothy’s estate in a timely manner cannot be a basis for finding, as I must in order to conclude that Louise’s claims in this proceeding have any real prospects of success, that the deceased had failed to make adequate provision for her in the will.
The written submissions prepared by Louise’s lawyers referred to the following matters:
(a) the deceased and Dorothy always intended that their children be treated equally;
(b) cl 7 of the will, by imposing limitations upon the gift in cl 6 of the will, is arguably repugnant, and liable to be struck down;
(c) further, given that cl 7 of the will creates a discretionary trust with multiple beneficiaries, cl 7 has ’the potential effect of substantially diminishing her share of the deceased’s estate by reducing such share to a mere expectancy and is illusory’;
(d) it is apparent that the will trust was created to protect Louise’s share of the estate from the trustee in bankruptcy, but since the annulment of the bankruptcy in 2020, the rationale for the will trust has fallen away;
(e) Louise is facing substantial financial costs associated with the renovation and repair of the Albert Park and South Yarra properties;
(f) financial information regarding the administration of Dorothy’s estate, the deceased’s estate, and the various trusts has not been provided to her in a timely fashion;
(g) where there is a large estate, there may be a more liberal assessment of what is required to discharge the moral duty of the deceased;
(h) the discretionary factors in s 91A(2) of the Act all largely weigh in favour of granting the relief sought by Louise; and
(i) summary judgement should not be granted, because the circumstances in which the deceased made the changes to the will in 2012 and 2017 to create the will trust need to be fully investigated.
I will address each of these submissions in turn, below.
In relation to paragraph 64(a) above, I accept that the evidence supports a conclusion that Louise and Nicholas were generally treated equally by their parents in financial matters. However, I also accept that the executors’ submission to the effect that it is not the role of the Court in this jurisdiction to ensure equality of outcomes is overwhelmingly supported by the authorities.
In relation to paragraph 64(b) above, I agree with the executors’ submissions that, to the extent that Louise takes issue with the construction of the will itself (which, in any event, they say is expressed in clear and unambiguous terms), then this proceeding is not the proper vehicle to resolve any issue about the proper construction of the will.
In relation to paragraph 64(c) above, while I accept that there are other nominated beneficiaries of the will trust (as was necessary to achieve its desired purpose) the evidence shows that no funds from the will trust have ever been distributed to anyone else. I have no reason to disbelieve the following statement of the executors in their affidavit sworn on 18 August 2022:
At no stage following the deceased’s death has [Louise] made any request for payment from the estate of the deceased. We stand willing and ready to consider any such reasonable request and action accordingly. We intend to exercise our discretion as trustees properly and to give effect to the deceased’s clear intention that [Louise] be adequately provided for.
Exhibited to Nicholas’ affidavit sworn on 20 November 2023 was an email exchange between Louise and HOCW in August 2023, whereby Louise requested that the executors provide her with $100,000 for the purpose of defending this application. HOCW responded by requesting details of Louise’s current financial position and details of the assets that had been distributed to her from Dorothy’s estate. Louise responded as follows:
In response to email below, my current income is zero, my current assets are zero, my weekly expenditure $1k-$2k (not inclusive of building and maintenance repairs), and accessible funds of around $100k (of which $50k is allocated to immediate emergency plumbing repairs).
No distribution is likely from my mother’s estate in the foreseeable future as none has been forthcoming over the preceding 7+ year period.
I note that at the hearing on 29 February 2024, Louise confirmed that there was no financial barrier to her retaining solicitors and counsel for the hearing and determination of this application. Further, Louise did not verify or otherwise address her statements in the email above in her affidavit evidence.
In relation to paragraph 64(d) above, I accept that, at the date of the death of the deceased (which is the proper time to assess whether the deceased had discharged his moral duty to Louise), the primary rationale for the establishment of the will trust, being Louise’s status as a bankrupt, had fallen away some months earlier . However, that of itself did not impose a moral duty upon the deceased (or those advising him) to take steps to remove cl 7 of the will. More accurately, the change in Louise’s circumstances did not mean that the provision made for her by the establishment of the will trust did not amount to adequate provision for her proper maintenance and support.
While I accept that Louise’s bankruptcy was the driving force behind the creation of the will trust, and that it is perhaps not desirable to speculate what other motivations and advice the deceased may have had in that regard, there may well have been other reasons why the deceased did not want Louise to have unfettered control of her share of the estate. However, while the deceased’s intentions are important, the primary question in this proceeding is whether he adequately discharged his moral duty to make adequate provision for Louise, having regard of course to the resources available to her to support herself.
In relation to paragraph 64(e) above, see the discussion at paragraph 62 of these reasons about what resources might be available to Louise to renovate and/or repair one or both of the Albert Park and South Yarra properties, noting of course that any repairs and renovations to the South Yarra property would need the agreement and co-operation of Nicholas, given that he is the co-owner of the South Yarra property.
In relation to paragraph 64(f) above, while any lateness in the provision of financial information may have hampered Louise’s ability to prepare for this proceeding and this application (although there does not appear to be any particular dereliction of duty on the part of the executors), this issue is completely irrelevant to the primary issue in this proceeding, being whether the deceased discharged his moral duty to Louise. Again, if Louise has complaints about the conduct of the executors and/or Nicholas, this proceeding is not the proper vehicle to ventilate those complaints.
In relation to paragraph 64(g) above, I accept as a general proposition that there might be a more liberal approach to what amounts to adequate provision for the proper maintenance and support of a claimant when the estate is large, and the potential claimants few. But while the size of the estate may inform what amounts to adequate provision (having regard to, perhaps, the standard of living to which the claimant has become accustomed), it does not fundamentally alter the statutory test and the task before the Court. That said, Louise’s own evidence is that for the past three decades she has been largely dependent upon her parents for accommodation and upon distributions from family trusts for income: the creation of the will trust therefore does not substantially alter her situation, save for the fact that the trustees are no longer her parents, and she has now received valuable properties from Dorothy’s estate.
In relation to paragraph 64(h) above, I agree that, if the threshold test had been met, then the discretionary factors in s 91A(2) of the Act may well be resolved in Louise’s favour. However, there is no real prospect that the threshold test will be satisfied, for the reasons already outlined above.
Finally, in relation to paragraph 64(i) above, I accept that the Court should be cautious in not permitting a proceeding to proceed to trial, especially in this jurisdiction. However, save for one issue which Louise’s lawyers say requires further investigation, Louise has not pointed to any evidence that is missing, or may emerge, which is currently not before the Court.
In their submissions, Louise’s lawyers conceded that most of the facts relied upon by the executors are undisputed. Further, to the extent that there is relevant evidence which is not before the Court, that evidence relates to Louise’s financial position, and in particular what has become of the funds returned to her by Pitcher Partners. I can infer, given that the executors and Nicholas have directly and repeatedly raised the issue of the failure of Louise to frankly and fulsomely explain her financial position, and given that Louise has been given ample opportunity to put forward any evidence upon which she wishes to rely, including after the hearing of the summary judgment application, that the failure of Louise to provide this information is as a result of a deliberate forensic decision on her part not to do so.
As for the matter which Louise says warrants further investigation at trial, I repeat my earlier observations regarding the limited relevance of the motivations of and advice received by the deceased regarding the creation of the will trust in paragraph 72 of these reasons.
In order to regularise her affairs and improve her financial position, what Louise needs to do is to retain qualified accountants, solicitors, and/or financial advisors to meaningfully engage with the executors and Nicholas regarding the appropriate deployment of her assets and other entitlements from the Darling Street trusts, the JKF trust, and the will trust to best meet her needs for secure and appropriate accommodation and a secure and sufficiently generous income stream, including, if considered necessary and/or appropriate, making available funds for the renovations and repair of one or both of the South Yarra property and the Albert Park property, or the purchase of a suitable alternative property. What she does not need is further provision from the deceased’s estate.
Accordingly, summary judgment will be granted, on the basis that there is no real prospect of Louise establishing that the deceased had failed to make adequate provision for her proper maintenance and support. Proceeding to trial in those circumstances would be a waste of the time and resources of the parties, and the time and resources of the Court. For that reason, s 64 of the CPA is also not engaged.
I shall hear further from the parties on the question of costs.
SCHEDULE OF PARTIES
| S ECI 2021 04842 | |
| BETWEEN: | |
| LOUISE ELLEN FRANCIS | Plaintiff |
| - v - | |
| PAUL JARVIS MARTIN (who is sued as executor of the Will of JOHN KENDALL FRANCIS) | First Defendant |
| LACHLAN JAMES VALLANCE (who is sued as executor of the Will of JOHN KENDALL FRANCIS) | Second Defendant |
| NICHOLAS JOHN FRANCIS | Third Defendant |
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