Hogan v Hogan
[2013] NSWSC 1405
•25 September 2013
Supreme Court
New South Wales
Medium Neutral Citation: Hogan v Hogan [2013] NSWSC 1405 Hearing dates: 29 August 2013 Decision date: 25 September 2013 Jurisdiction: Equity Division Before: Hallen J Decision: Direct the parties to bring in Short Minutes of Order reflecting the matters set out in Paragraph [224] of these reasons.
Catchwords: SUCCESSION - FAMILY PROVISION - The Plaintiff, a son of the deceased, applies for a family provision order under Chapter 3 of the Succession Act 2006 - The Defendant is the husband of the deceased and the father of the Plaintiff - Deceased left Will - No provision for the Plaintiff - Whether adequate and proper provision not made in Will of the deceased for the Plaintiff and if so the nature and quantum of the provision to be made Legislation Cited: Civil Procedure Act 2005
Family Provision Act 1982
Probate and Administration Act 1898
Property (Relationships) Act 1984
Real Property Act 1900
Succession Amendment (Family Provision) Act 2008
Succession Act 2006
Uniform Civil Procedure Rules 2005Cases Cited: Alexander v Jansson [2010] NSWCA 176
Allardice v Allardice, In re Allardice, (1910) 29 NZLR 959
Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656
Bartlett v Coomber [2008] NSWCA 100
Belfield v Belfield [2012] NSWSC 416
Bladwell v Davis [2004] NSWCA 170
Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Bourke, M A (dec'd) and the TFM Act [1968] 2 NSWLR 453
Buckland Deceased, Re [1966] VR 404
Butcher v Craig [2009] WASC 164
Christie v Manera [2006] WASC 287
Clifford v Mayr [2010] NSWCA 6
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Cross v Wasson [2009] NSWSC 378; (2009) 2 ASTLR 201
Crossman v Riedel [2004] ACTSC 127
de Angelis v de Angelis [2003] VSC 432
Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127
Diver v Neal [2009] NSWCA 54
Flathaug v Weaver [2003] NZFLR 730
Foley v Ellis [2008] NSWSC 288
Franks v Franks [2013] NSWCA 60
Gardiner v Gardiner (NSWSC, 28 May 1998, unreported)
Golosky v Golosky [1993] NSWCA 111
Goodman v Windeyer (1980) 144 CLR 490
Gorton v Parks (1989) 17 NSWLR 1
Grey v Harrison [1997] 2 VR 359
Harrisson v Skinner [2013] NSWSC 736
Hawkins v Prestage (1989) 1 WAR 37
Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134
Hyland v Burbidge [2000] NSWSC 12
Kay v Archbold [2008] NSWSC 254
Keep v Bourke [2012] NSWCA 64
Kembrey v Cuskelly [2008] NSWSC 262
Kleinig v Neal (No. 2) [1981] 2 NSWLR 532
Langtry v Campbell (NSWSC, 7 March 1991, unreported).
MacGregor v MacGregor [2003] WASC 169
Magill v Magill [2006] HCA 51; (2006) 226 CLR 551
Marks v Marks [2003] WASCA 297
Marshall v Carruthers [2002] NSWCA 47
Mayfield v Lloyd-Williams [2004] NSWSC 419
McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
Milillo v Konnecke [2009] NSWCA 109
Moore v Moore (NSWCA, 16 May 1984, unreported)
Neale v Neale [2013] NSWSC 983
Oldereid v Chan [2013] NSWSC 434
Palaganio v Mankarios [2011] NSWSC 61
Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24
Peters v Salmon [2013] NSWSC 953
Ploder v Garcea (as executrix of the estate of the late Fiona Rita Garcea) [2013] NSWSC 1360
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9
Puckridge, Deceased, In the Estate of (1978) 20 SASR 72
Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100
Sellers v Scrivenger [2010] VSC 320
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
Sitch, Re the Will of (deceased); Gillies v Executors of the Will of Sitch [2005] VSC 308
Slack v Rogan; Palffy v Rogan [2013] NSWSC 522
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Stiles v Joseph (NSWSC, 16 December 1996, unreported)
Stott v Cook (1960) 33 ALJR 447
Szypica v O'Beirne [2013] NSWSC 297
Taylor v Farrugia [2009] NSWSC 801
Tobin v Ezekiel [2012] NSWCA 285
Verzar v Verzar [2012] NSWSC 1380
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
Walker v Walker (NSWSC, 17 May 1996, unreported)
White and Tulloch v White (1995) 19 Fam LR 696Texts Cited: Government Gazette No. 38 of 20 February 2009
J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 7th ed, 2006)Category: Principal judgment Parties: Anthony Michael Hogan (Plaintiff)
Michael Joseph Hogan (Defendant)Representation: Counsel:
Mr M Condon SC; Mr A P McGrath (Plaintiff)
Mr S Chapple (Defendant)
Solicitors:
Makinson & d'Apice Lawyers (Plaintiff)
Calabrese Lawyers (Defendant)
File Number(s): 2011/185350
Judgment
The Claims
HIS HONOUR: These are proceedings commenced by the Plaintiff, Anthony Michael Hogan, who applies for a family provision order under Chapter 3 of the Succession Act 2006 ("the Act"), as a child of Edith Marie Shepperd Hogan ("the deceased").
The Act applies in respect of the estate of a person who died on, or after, 1 March 2009. The Act replaces the Family Provision Act 1982 ("the former Act"), which was repealed by s 5 of the Succession Amendment (Family Provision) Act 2008, effective from 1 March 2009 (s 2(1) Succession Amendment (Family Provision) Act 2008 and Government Gazette No. 38 of 20 February 2009, page 1036). A family provision order is an order made by the Court in relation to the estate, or notional estate, of a deceased person, to provide, from that estate, for the maintenance, education, or advancement in life, of an eligible person.
The Plaintiff commenced the proceedings by Summons filed on 6 June 2011, that is, within the time prescribed by s 58(2) of the Act (not later than 12 months after the date of the death of the deceased). In an amended Summons, filed on 13 March 2012, the Plaintiff sought, additionally, orders relating to administration of the estate under s 91 of the Act, but the relief sought is no longer necessary because Probate of the deceased's Will has been granted. It was, then, only the Plaintiff's claim for a family provision order, the designation of property as notional estate, and an order for costs that was sought. (At the hearing, however, the parties also agreed that it was unnecessary to consider the notional estate provisions of the Act since there is sufficient in the actual estate to meet the claim for provision by the Plaintiff.)
The Defendant named in the Summons is Michael Joseph Hogan, the executor appointed in the Will to whom Probate was granted, the husband of the deceased, and the father of the Plaintiff. He is also the sole beneficiary of the deceased's estate.
Also before me are proceedings, commenced by the Defendant, in Hornsby Local Court, in which he sought repayment of the sum of $57,000, which he alleged he lent the Plaintiff on 29 August 2010 ("the debt proceedings"). The Plaintiff admitted receiving that amount but asserted that the payment was a gift, not a loan, to him. I shall refer to these proceedings as "the debt proceedings".
On 30 October 2012, Nicholas J ordered that the debt proceedings be transferred to the Supreme Court and be heard with the family provision proceedings. His Honour also ordered that the costs of, and incidental to, the debt proceedings be costs in the family provision proceedings.
The issue raised in the debt proceedings in the local Court is less important, to the point of extinction, now, because the Defendant submitted in writing "whether ... the money is characterised as a gift or a loan, it is appropriate and expedient for that [amount] simply to be taken into account in any order for provision that might be made for [the Plaintiff]". The parties agreed that the debt proceedings should simply be dismissed pursuant to s 91 of the Civil Procedure Act 2005, upon the basis that the Defendant, in these proceedings, who is the Plaintiff in the debt proceedings, is not entitled to claim any relief in respect of the same cause of action in any subsequent proceedings commenced in that, or any other, Court.
Without any undue familiarity, or disrespect intended, and for convenience, I shall refer, hereafter, only to the Plaintiff and the Defendant by his role in the proceedings for the family provision order, and to other family members, or witnesses, after introduction, by her, or his, given name.
Formal Matters
The following facts are uncontroversial.
The deceased died on 7 June 2010. She was then aged 76 years, having been born in April 1934.
The deceased married the Defendant in August 1965 and remained married to him at the date of her death, almost 45 years later. The Defendant is aged 81 years, having been born in March 1932.
There were three children of the marriage, one being the Plaintiff, and the others being twins, Brendan James Hogan and Paul Martin Hogan, who were born in March 1970.
The deceased left a Will that she made on 15 February 2000, Probate in common form of which was granted, by this Court, on 4 April 2012. As stated, the sole beneficiary of the deceased's estate is the Defendant, as he survived her by 30 days. However, had he not survived the deceased, a property in Greenacre was specifically devised to the Plaintiff, and he and his two siblings were to share, equally, the rest and residue of the deceased's estate.
In the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the property owned solely by the deceased at the date of death, was disclosed as having an estimated, or known, gross value of $1,182,433. The estate was said to consist of the deceased's interest as tenant in common in various parcels of real estate, one situated in Padstow ($225,000), in Fairy Meadow ($190,000), in Woy Woy ($130,000), in Croydon Park ($300,000), in Toukley ($125,000) and in Charmhaven ($140,000), money on deposit ($64,632), personal effects ($3,000) and shares ($4,800). (I have omitted any reference to cents and shall continue to do so. This may appear to result in minor mathematical miscalculations in the figures set out.)
In the Inventory of Property, there was also a reference made to "Property Owned by the Deceased as Joint Tenant with another or others". The deceased and the Defendant owned all of the property referred to. That property consisted of a car ($3,000), moneys in various bank accounts or credit unions ($74,769), money in a cash management account ($90,723) and shares ($3,220). All of the property passed to the Defendant by survivorship.
(The parties agreed, at the hearing, that one half of the current value of the property passing to the Defendant by survivorship is $85,855.)
Although not referred to in the Inventory of Property, there were also proceeds of a death benefit ($129,603), held by State Super Financial Services Australia (which is the Trustee), in the State Super Allocated Pension Fund. The deceased was a pensioner in the Fund. Although the Trustee made the decision, in October 2012, to pay the proceeds of the death benefit to the Defendant, as the spouse of the deceased, and determined to affirm its original decision in December 2012, the Defendant, by letter dated 6 March 2013, was advised "that the Trustee has been notified that the Superannuation Complaints Tribunal (SCT) has received a complaint in relation its (sic) decision in relation to the distribution of the death benefit of the late Edith Marie Shepperd Hogan" and that the "Trustee is unable to distribute any of the death benefit ... until the SCT outcome is known".
(The Plaintiff and Brendan made the original challenge to the trustee's decision, but I was informed from the bar Table, without objection, that it is only the Plaintiff who lodged the complaint with the Superannuation Complaints Tribunal.)
When the decision of the Superannuation Complaints Tribunal will be made is not known, but so far as the parties were aware, it had not been made at the date of hearing. Then, the value of the proceeds of the death benefit was $134,554.
Although there were no liabilities disclosed in the Inventory of Property, in an affidavit, sworn 26 July 2013, the Defendant disclosed that certain liabilities of the estate, that had been paid, totalled $64,219. Of this amount, funeral expenses were $12,969, legal costs of probate and administration were $1,884, there was a repayment of rent monies of $26,702, and an amount of $22,663 was paid on account of the Defendant's costs of these proceedings.
The Defendant asserts that there are additional liabilities (other than the costs of these proceedings), which total $14,000, being unpaid tax liabilities ($10,000) and administration expenses ($4,000).
The parties agreed that the deceased's actual estate, at the date of hearing, had a gross value of $1,340,292 and that it consisted of deceased's interest as tenant in common in real estate at Padstow ($315,000), in Fairy Meadow ($200,000), in Woy Woy ($137,500), in Croydon Park ($300,000), in Toukley ($140,000) and in Charmhaven ($131,250), money on deposit ($103,057), a tax refund ($1,639) shares ($8,843) and the personal effects ($3,000).
It follows, if one deducts the anticipated future liabilities ($14,000), and if one does not take into account the costs of the proceedings (to which I shall refer), the net value of the estate is $1,326,292.
(Although it has not been included as a liability, evidence was tendered that on 16 January 2013, the Office of State Revenue issued a land tax assessment on the various parcels of land, of $19,572 (discounted to $19,278 if not paid by instalments). Other evidence reveals that the discounted amount was paid out of the joint bank account, which remains in the name of the Defendant and the deceased, on or about 26 February 2013.
In calculating the value of the estate, finally available for distribution, the costs of the present proceedings should also be considered, since the Plaintiff, if successful, normally, will be entitled to an order that his costs, calculated on the ordinary basis, be paid out of the estate of the deceased, whilst the Defendant, as executor, irrespective of the outcome of the proceedings, normally, will be entitled to an order that his costs, calculated on the indemnity basis, be paid out of the estate.
The Plaintiff's solicitor estimated the Plaintiff's costs and disbursements of the proceedings, including counsel's fees, calculated on the ordinary basis, to be about $57,500 (inclusive of GST and upon the basis of a one day hearing). (I note that the Plaintiff has paid $4,334 on account of disbursements. The Plaintiff's solicitor estimates that, if the usual costs order is made, about $3,750 of this amount would be recoverable.)
The estimate of the Plaintiff's costs includes certain costs and disbursements incurred in the debt proceedings.
The Defendant's solicitor estimated the Defendant's costs and disbursements of the proceedings, including counsel's fees, calculated on the indemnity basis, to be about $59,800 (inclusive of GST and upon the basis of a one day hearing). Bearing in mind the amount already paid to the Defendant's solicitors ($22,663), the balance payable for the Defendant's costs and disbursements is $37,137.
Of course, depending upon the result of the Plaintiff's claim and any order made as to costs, the costs and disbursements, if payable out of the estate, will be able to be formally assessed, unless otherwise agreed by the parties. It follows that the amounts referred to are estimates only.
However, using the estimates that have been provided, the parties agreed that the net value of actual estate, available for distribution, is, at the date of hearing, $1,231,655.
The persons who are, or who may be, eligible persons, within the meaning of the Act, are the parties, Brendan and Paul. The Defendant gives evidence that Paul has been served with the prescribed notice of the Plaintiff's proceedings. In fact, he was present, with the Defendant, during the hearing.
Brendan swore two affidavits that the Plaintiff read in the proceedings. He was cross-examined.
The Act (as will be seen) provides that in determining an application for a family provision order, the Court may disregard the interests of any other person by, or in respect of whom an application for a family provision order may be made (other than a beneficiary of the deceased person's estate), but who has not made an application only if:
(a) notice of the application, and of the Court's power to disregard the interests, is served on the person concerned, in the manner and form prescribed by the regulations or rules of court, or
(b) the Court determines that service of any such notice is unnecessary, unreasonable or impracticable in the circumstances of the case.
Since each of the other eligible persons, namely Brendan and Paul, has not commenced proceedings, despite having notice of the Plaintiff's application, the Court may disregard his interests as a person in respect of whom an application for a family provision order may be made. Neither is a beneficiary, who, in the events that have happened, takes under the deceased's Will. I propose, in the circumstances of this case to disregard the interests of each.
Even though the Defendant has not commenced proceedings for a family provision order, he is the sole beneficiary and the Court is not entitled to disregard his interests as such.
Other Matters
When the deceased signed her Will, she also made a Statutory Declaration, which relevantly provided:
"1. It is my clear intention and will my son Anthony Michael Hogan have the property known as ... Greenacre in the state of New South Wales.
2. I have thought about this for some time and believe that he should have this property in addition to his share of the residue of my estate. I have come to this decision as he is not as financially secure as my other two sons Brendan James Hogan and Paul Martin Hogan who are also beneficiaries under my will dated 15 February 2000.
3. I believe that he needs to have a property that is independent and separate from his brothers who have been adequately and fairly provided for under my will dated 15 February 2000.
4. If my will is ever contested on the grounds that my son Anthony Michael Hogan received a distinct and separate property this being ..., Greenacre in the state of New South Wales in addition to his share of the residue of my real and personal estate. Then it is my intent to have this document read by the Court."
The Greenacre property is, and has at all material times been, owned by the Defendant, part of the interest in which passed to him by inheritance and the balance by purchase. The deceased's reasons for believing that she had the power to leave that property to the Plaintiff in her Will are unexplained.
The Defendant made a Will on 15 February 2000, which was a mirror Will of the deceased's Will.
The Defendant made another Will on 31 August 2007, which relevantly revoked his 2000 Will and went on to provide:
"...
3. IF my son ANTHONY MICHAEL HOGAN survives me for thirty (30) days I GIVE DEVISE AND BEQUEATH either my property located at and known as xx xxxxx, Greenacre or my property located at and known as xx xxxxx, Punchbowl to my said son ANTHONY MICHAEL HOGAN with the choice of which property being his and his alone to him for his life such election to be exercised by him within ninety (90) days of my death provided that he pays the rates and taxes levied on the property and premiums on any insurance policies taken out by my Trustees on the property and keeps it in repair to the satisfaction of my Trustees and I GIVE DEVISE AND BEQUEATH the remainder interest to such of my grandchildren as shall survive me for more than thirty (30) days and if more than one in equal shares as tenants in common absolutely.
4. (a) Subject to the preceding paragraph, at the written request of my said son ANTHONY MICHAEL HOGAN my trustees shall sell the house and purchase another replacement property including resident funded retirement or nursing home accommodation.
(b) Any cash balance arising from the sale and purchase shall form part of the rest and residue of my estate.
5. I GIVE DEVISE AND BEQUEATH the rest and residue of my estate both real and personal whatsoever and wheresoever situate including lapsed devises and bequests to my Trustees UPON TRUST to sell call in and convert the same into money with power to postpone such sale calling in and conversion so long as they in their absolute discretion shall think fit without being liable for loss and to stand possessed of the proceeds of such sale calling in and conversion upon the following trusts:
a. To pay thereout all my just debts funeral and testamentary expenses and Capital Gains Tax and Goods and Services Tax and State Probate Duty and Federal Estate Duty if any assessed upon or by reason of my death.
b. If my said son ANTHONY MICHAEL HOGAN survives me for thirty (30) days to pay the sum of TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000.00) to my said son ANTHONY MICHAEL HOGAN absolutely.
c. To stand possessed of the balance remaining including lapsed shares in equal shares for such of my sons PAUL MARTIN HOGAN and BRENDAN JAMES HOGAN as shall survive for thirty (30) days IE either of my said sons does not survive me for thirty (30) days leaving children surviving me such children shall take by substitution and if more than one in equal shares as tenants in common the share which such deceased son would have taken if he had survived me and had attained to a vested share."
There was a codicil to the Defendant's Will made on 7 May 2008, but its terms are irrelevant.
Thus, under the terms of what is said to be the Defendant's current Will and codicil, the Plaintiff receives some provision, but not the same provision as his brothers.
The Statutory Scheme - Family Provision Proceedings
Introduction
First, I shall discuss the statutory scheme that is relevant to the facts of these proceedings. Although I have set out some of what I state hereunder in other cases, in view of the importance of this case to the parties, I shall repeat the principles. It is important that they are able to follow the reasoning and for each to be satisfied that I have considered the evidence and the submissions.
The wording of the Act is similar to the wording of the former Act. However, it is necessary to remember the warning of Kirby P in Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100, at 76,304:
"Purposive construction of the Act
There is always a danger where a reformed Act borrows heavily upon ideas which previously existed in the common law or in an earlier statute, that lawyers will approach the construction of the Act affected by the previous law. Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1985) 2 NSWLR 475, 478. That danger is but an illustration, in the specialised activity of law, of a universal phenomenon of psychology long established in relation to human perception generally. We tend to perceive what we expect. We expect that with which we are familiar.
There is a particular danger in the case of the Family Provision Act in construing its terms by reference to the law which developed around the Testators' Family Maintenance and Guardianship of Infants Act 1916. That Act was passed in earlier times to govern the entitlements of a testator's family, as narrowly defined. The definition by s 3(1) of that Act confined applications to those made by "the widow, husband or children of such persons". There was no mention in it of former spouses. Doubtless this was because, for the early part of this century, divorce was relatively infrequent and then based upon concepts of matrimonial fault which would make interference in the testamentary disposition of the deceased unlikely. When enacted, the statute was a radical interference in the power of testamentary disposition. That was a significant power over private property, the disturbance of which was regarded as highly exceptional."
Whilst the relevant amendments made by the Act are not as significant to those made by the former Act, it remains necessary to bear his Honour's warning in mind in construing the statutory framework. In doing so, a construction that promotes the purpose, or object, of the Act is to be preferred to a construction that would not promote that purpose or object. In my view, the principles applied by the Courts to the former Act continue to apply, except to the extent that the Act otherwise requires.
As stated, the former Act was repealed by s 5 of the Succession Amendment (Family Provision) Act 2008. A new Chapter 3 was added to the Act, which dealt with the topic of family provision from deceased estates. The long title of the Act describes that new Chapter as one to ensure that adequate provision is made for the members of the family of a deceased person, and certain other persons, from the estate of the deceased person.
Importantly, this should not be taken to mean that the Act confers upon those persons, a statutory entitlement to receive a certain portion of a deceased person's estate. Nor does it impose any limitation on the deceased's power of disposition by his, or her, Will. The Court is given a statutory power that may be exercised only for the purpose for which it was granted. Thus, it is only if the statutory conditions are satisfied, that the Court is empowered, under the Act, to alter the deceased's disposition of his, or her, estate, to produce a result that is consistent with the purpose of the Act. Even then, the Court's power to do so is discretionary.
Eligibility
The key provision is s 59 of the Act. The Court must be satisfied, first, that the applicant is an eligible person within the meaning of s 57(1) (s 59(1)(a)). The Court has no power to make an order in favour of an applicant who is not an eligible person. In New South Wales, it is a multi-category based eligibility system, rather than one with a general category of eligibility (as it is, for example, in Victoria). There are six categories of persons by, or on whose behalf, an application may be made. Relevantly, one category is "a child of the deceased" (s 57(1)(c) of the Act). Clearly, that language is expressive of the person's status, as well as his, or her, relationship to the deceased. There is no age limit placed on a child making an application.
Inadequacy of Provision
It is only if eligibility is established, that the Court must determine whether adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both (s 59(1)(c)). It is this mandatory legislative imperative that drives ultimate result and it is only if the Court is satisfied of the inadequacy of provision, that consideration is given to whether to make a family provision order (s 59(2)). Only then may "the Court ... make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made".
Allsop P in Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656, commented, at [6]:
"... the expression of the task in s 59 is subtly different from the previous legislation. A prohibition against making an order unless satisfied of circumstances of an evaluative character, is different in emphasis from a permission to make an order if satisfied of circumstances of an evaluative character... The exercise of power to make the order is conditioned on the Court being satisfied of certain things in s 59(1). The order that may be made is described in s 59(2). The two elements are described in s 60(1)(b) as "whether to make [an] ... order and the nature of any ... order." Section 60(2) provides a detailed body of considerations for the task in s 59."
Basten JA, at [26], put the differences this way:
"As appears from the language of the relevant provisions set out at [66]-[67] below, the Succession Act differs from the Family Provision Act in three significant respects. First, although both conferred similar powers on the Court, the conditions of their exercise differ. The Family Provision Act required that the Court "shall not make an order ... unless it is satisfied that" the provision made by the testator is "inadequate": s 9(2). The Succession Act provides that the Court "may ... make a family provision order ... if the Court is satisfied that" the testator has not made "adequate provision" for the applicant: s 59(1). The changes in language may have been intended to remove double negatives, but there is a resultant change in emphasis. The apparent effect is to widen the discretion vested in the court. That which could satisfy a court that the provision made is "not adequate", for the purposes of the Succession Act, might not have been sufficient to remove the prohibition under the Family Provision Act, which operated in the absence of affirmative satisfaction that the provision was "inadequate". There may well be no bright line boundary between adequacy and inadequacy."
Barrett JA, at [82] - [86] said:
"The court's task under the new legislation is in substance the same as that under the old. Three differences relevant to the kind of case under discussion may, however, be noted (I leave to one side as irrelevant to such cases the extension of the s 60(2) criteria to the question of "eligible person" status); and two postulated differences may be rejected.
First, the Succession Act provisions direct attention, upon the initial inquiry into adequacy, to provision made by the deceased's will and the intestacy laws. The former legislation referred merely to provision "out of the estate" but it was clear that the operation of the intestacy laws was to be taken into account in deciding what provision was available "out of the estate": see, for example, Smilek v Public Trustee [2008] NSWCA 190.
Second, the Succession Act provisions confine attention, upon that initial inquiry, to provision made by the will and the intestacy laws. There is no reference to provision made during the deceased's lifetime. In this respect, there is a departure from the Family Provision Act approach under which provision made in favour of the eligible person "either during the person's lifetime or out of the person's estate" was to be examined upon the initial inquiry into adequacy.
Attention may, however, still be given to provision made in favour of the applicant during the deceased's lifetime. That is now one of the factors to which regard may be had under s 60(1)(b) when the court is deciding whether to make a family provision order and the nature of the order: see s 60(2)(i). Under the Succession Act, therefore, provision made by the deceased while living thus has a continuing relevance with altered emphasis. Such provision is no longer something to be taken into account in deciding whether adequate provision has been made; but it may be taken into account in deciding whether an order should be made and the nature of the order.
The third difference to be noted is the Succession Act's more comprehensive catalogue of matters that may be taken into account in formulating an order for provision. Section 9(3) of the Family Provision Act empowered the court to "take into consideration" matters there stated 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". Section 60(1)(b) of the Succession Act allows the court to "have regard to" the matters set out in s 60(2) "for the purpose of determining ... whether to make a family provision order and the nature of any such order". The Succession Act lists a greater number of such matters than did the Family Provision Act."
Other than by reference to the provision made in the Will of the deceased, or, if relevant, by the operation of the intestacy rules in relation to the estate of the deceased, or both, s 59(1)(c) of the Act leaves undefined the norm by which the Court must determine whether the provision, if any, is inadequate for the applicant's proper maintenance, education and advancement in life. The question would appear to be answered by an evaluation that takes the Court to the provision actually made in the deceased's Will, or on intestacy, or both, on the one hand, and to the requirement for maintenance, education and advancement in life of the applicant on the other. No criteria are prescribed in the Act as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance, education and advancement in life of the applicant.
In Grey v Harrison [1997] 2 VR 359, at 366-367, Callaway JA observed:
"There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, in much the same way as there is a range of awards for pain and suffering or a range of available sentences. Minds may legitimately differ as to the provision that should be made. Furthermore, it is not at all clear that reasons for an appropriate provision need be fully articulated. To borrow again from the analogy of sentencing, what is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight."
It was said in the Court of Appeal (by Basten JA) in Foley v Ellis [2008] NSWCA 288, at [3], that the state of satisfaction "depends upon a multi-faceted evaluative judgment". In Kay v Archbold [2008] NSWSC 254, at [126], White J said that the assessment of what provision is proper involved "an intuitive assessment". Stevenson J recently described it as "an evaluative determination of a discretionary nature, not susceptible of complete exposition" and one which is "inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific": Szypica v O'Beirne [2013] NSWSC 297, at [40].
Under s 59(1)(c) of the Act, the time at which the Court gives its consideration to the question of inadequacy of provision is the time when the Court is considering the application.
"Provision" is not defined by the Act, but it was noted in Diver v Neal [2009] NSWCA 54, at [34], that the term "covers the many forms of support and assistance which one individual can give to another. That support and assistance will vary over the course of the person's lifetime".
Neither is the word "maintenance", nor the phrase "advancement in life", defined in the Act. However, in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon JJ, at 228-229, said, of the words "maintenance", "support" and "advancement":
"'Maintenance' may imply a continuity of a pre-existing state of affairs, or provision over and above a mere sufficiency of means upon which to live. 'Support' similarly may imply provision beyond bare need. The use of the two terms serves to amplify the powers conferred upon the court. And, furthermore, provision to secure or promote 'advancement' would ordinarily be provision beyond the necessities of life. It is not difficult to conceive of a case in which it appears that sufficient provision for support and maintenance has been made, but that in the circumstances, say, of a promise or an expectation reasonably held, further provision would be proper to enable a potential beneficiary to improve his or her prospects in life, or to undertake further education."
In Alexander v Jansson [2010] NSWCA 176, Brereton J (with whom Basten JA and Handley AJA agreed), at [18], stated:
"'Proper maintenance' is not limited to the bare sustenance of a claimant [cf Gorton v Parkes (sic) [1989] 17 NSWLR 1], but requires consideration of the totality of the claimant's position in life including age, status, relationship with the deceased, financial circumstances, the environs to which he or she is accustomed, and mobility."
In J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 7th ed, 2006), at 542, the learned authors comment upon the difference between the concepts of maintenance and advancement:
"The essential difference between 'maintenance' and 'advancement' is that 'maintenance' denotes a periodical payment or a payment which could validly be made periodically, whereas 'advancement' denotes a definite unique outlay for a specific purpose. Recipients of maintenance must, practically speaking, be infants, but adults may be recipients of an advancement.
An advancement can never be made of a sum of money which the person to whom it is made can immediately pocket, but it must be made with a view to the establishment of that person in a business or profession, or otherwise in some definite way for that person's benefit, the whole essence of an advancement being the immediate payment of a tolerably large sum for an immediate benefit to one beneficiary."
In In the Estate of Puckridge, Deceased (1978) 20 SASR 72, at 77 King CJ said:
"The words 'advancement in life' have a wide meaning and application and there is nothing to confine the operation of the provision to an earlier period of life in the members of the family: Blore v Lang (1960) 104 CLR 124, per Dixon CJ at 128."
Master Macready (as his Honour then was) in Stiles v Joseph (NSWSC, 16 December 1996, unreported) said, at 14-16:
"Apart from the High Court's statement that the words 'advancement in life' have a wide meaning and application ... there is little (if any) case law on the meaning of 'advancement' in the context of family provision applications. Zelling J in In The Estate of Wardle (1979) 22 SASR 139 at 144, had the same problem. However, commonly in decisions in which the Applicant's 'advancement in life' has been in issue, the Court has looked only at the material or financial situation of the Applicant, and there is nothing to suggest that provision for the Applicant's 'advancement in life' means anything more than material or financial advancement. For example, in Kleinig v Neal (No 2) [1981] 2 NSWLR 532, Holland J, discusses the financial assistance which an applicant may need for his or her maintenance and advancement in life in the following terms:- If the court is to make a judgment as to what a wise and just testator ought to have done in all the circumstances of the case, it could not be right to ignore that the particular testator was a wealthy man in considering what he ought to have done for his widow or children in making provision for their maintenance, education or advancement in life. There are different levels of need for such things. In the case of maintenance and advancement in life they can range from bare subsistence up to anything short of sheer luxury. A desire to improve one's standard of living or a desire to fulfil one's ambition for a career or to make the fullest use of one's skills and abilities in a trade or business, if hindered or frustrated by the lack of financial means required for the fulfilment of such desire or ambition, presents a need for such assistance and it would seem to me that it is open to a court to say, in the case of a wealthy spouse or parent who could have but has failed to provide such financial assistance, that ... [the deceased] has failed to make adequate provision for the proper maintenance and advancement in life of the spouse or children who had such need. (at 541)
In Pilkington v Inland Revenue Commissioners [1964] AC 612, Viscount Radcliffe defined 'advancement', in the context of a trustee's powers, as 'any use of ... money which will improve the material situation of the beneficiary' (at 635), and this definition was cited with approval by Pennycuick J in Re Clore's Settlement Trust; Sainer v Clore [1966] 2 All ER 272 at 274...
In Certoma, The Law of Succession In New South Wales (2nd Ed) at 208, it is said:
'Although 'maintenance' does not mean mere subsistence, in the context of the New South Wales Act, it probably does not extend to substantial capital investments such as the purchase of a business, an income-producing property or a home for the Applicant because these forms of provision are more likely to be within the power of the Court under 'advancement in life'. Maintenance is rather concerned with the discharge of the recurrent costs of daily living and not generally with substantial capital benefit.'
The Queensland Law Reform Commission, in its Working Paper on Uniform Succession Laws: Family Provision (Working Paper 47, 1995) ... notes ... that:
'Whereas support, maintenance and education are words traditionally associated with the expenditure of income, advancement has been associated with the expenditure of capital, such as setting a person up in business or upon marriage.'"
In Mayfield v Lloyd-Williams [2004] NSWSC 419, White J, at [114] noted:
"In the context of the Act the expression 'advancement in life' is not confined to an advancement of an applicant in his or her younger years. It is phrase of wide import. (McCosker v McCosker (1957) 97 CLR 566 at 575) The phrase 'advancement in life' has expanded the concept used in the Victorian legislation which was considered in Re Buckland permitting provision to be made for the 'maintenance and support' of an eligible applicant. However Adam J emphasised that in a large estate a more extravagant allowance for contingencies could be made than would be permissible in a small estate and still fall within the conception of maintenance and support."
In Bartlett v Coomber [2008] NSWCA 100, at [50], Mason P said:
"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 word "adequate" connotes something different from the word "proper". "Adequate" is concerned with the quantum, whereas "proper" prescribes the standard, of the maintenance, education and advancement in life: Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127, per Buss JA, at [72], [77].
These words were considered by Lord Romer in delivering the advice of the Privy Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at 476:
"The use of the word 'proper' in this connection is of considerable importance. It connotes something different from the word 'adequate'. A small sum may be sufficient for the 'adequate' maintenance of a child, for instance, but, having regard to the child's station in life and the fortune of his father, it may be wholly insufficient for his 'proper' maintenance. So, too, a sum may be quite insufficient for the 'adequate' maintenance of a child and yet may be sufficient for his maintenance on a scale that is 'proper' in all the circumstances."
Dixon CJ and Williams J, in McCosker v McCosker [1957] HCA 82; 97 CLR 566, at 571-572, after citing Bosch v Perpetual Trustee Co Ltd, went on to say, of the word "proper", that:
"It means 'proper' in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement if life must be considered in the light of the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."
In Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, Gibbs J said, at 502:
"[T]he words 'adequate' and 'proper' are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards."
In Vigolo v Bostin, at 228, Callinan and Heydon JJ said:
"[T]he use of the word 'proper' ... implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of a kind which was made here...The use of the word 'proper' means that attention may be given, in deciding whether adequate provision has been made, to such matters as what use to be called the 'station in life' of the parties and the expectations to which that has given rise, in other words, reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future."
Santow J pointed out in Gardiner v Gardiner (NSWSC, 28 May 1998, unreported), that "adequate" and "proper" are independent concepts. He said, at 12:
"'Adequate' relates to the needs of the applicant. It is determined by reference to events occurring up to the death of the deceased, but also encompassing what the deceased might reasonably have foreseen before death. 'Proper' depends upon all the circumstances of the case. These include the applicant's station in life, the wealth of the deceased, the means and proper claims of all applicants, the relative urgency of the various claims on the deceased's bounty, the applicant's conduct in relation to the deceased, the applicant's contribution to building up the deceased's estate, the existence of dependents upon the applicant, the effects of inflation, the applicant's age and sex, and whether the applicant is able-bodied ..."
In Palaganio v Mankarios [2011] NSWSC 61, at [72], White J observed that the question of what provision for a person's maintenance, education or advancement in life is "proper" and the question of whether the provision made by the deceased was "adequate" for that person's maintenance, education or advancement in life involve value judgments on which minds can legitimately differ, and there are no definite criteria by which the question can be answered.
His Honour added in Slack v Rogan; Palffy v Rogan [2013] NSWSC 522, at [123]:
"The question of what level of maintenance or advancement in life is "proper" depends on all of the circumstances of the case "including the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty" (Singer v Berghouse (1994) 181 CLR 201 at 210)."
Until recently, it was unanimously thought that there are two stages of the determination. The first stage, provided for by s 59(1)(c), has been described as "the jurisdictional question": Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, at 208-209. At this stage, the court will consider whether it can make an order for provision for the maintenance, education or advancement in life of a particular applicant. The Court does this by determining whether it is satisfied that adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased and/or by operation of the intestacy rules, for the applicant. If it is not so satisfied, then the Court is precluded from making a family provision order. The Court has regard to, among other things, the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased and the circumstances and needs of the other beneficiaries or potential beneficiaries: see McCosker v McCosker, at 571-572; Singer v Berghouse, at 209-210; Vigolo v Bostin, at [16], [75], [112]; Tobin v Ezekiel [2012] NSWCA 285, at [70].
Whether an applicant has a 'need' or 'needs' is also a relevant factor at the first stage of the enquiry. It is an elusive concept to define, yet, it is an element in determining whether "adequate" provision has been made for the "proper" maintenance, education and advancement in life of the applicant in all of the circumstances: Collins v McGain [2003] NSWCA 190 (Tobias JA, with whom Beazley and Hodgson JJA agreed).
In Collins v McGain, Tobias JA said:
"42. Further, there can be no question that, at least as part of the first stage of the process, the question of whether the eligible person has a relevant need of maintenance etc is a proper enquiry. This is so as the proper level of maintenance etc appropriate for an eligible person in all the circumstances clearly calls for a consideration of his or her needs. However, the question of needs must not be too narrowly focussed. It must, in my view, take into account, depending upon the particular circumstances of the case, present and future needs including the need to guard against unforeseen contingencies.
...
47. As I have observed, the issue of need is not confined to whether or not an eligible person has, at the date of hearing, a then need for financial assistance with respect to his maintenance etc. It is a broader concept. This is so because the question of needs must be addressed in the context of the statutory requirement of what is "proper maintenance etc" of the eligible person. It is because of that context that, in the present case, the "proper maintenance etc" of the appellant required consideration of a need to guard against the contingency to which I have referred."
In Devereaux-Warnes v Hall (No 3), at [81] - [84], Buss JA said, in respect of the first stage of the process:
"The term 'need' has been used to refer to the claimant's inability to satisfy his or her financial requirements from his or her own resources. See Singer per Gaudron J at 227.
'Need' has also been used in the context of a value judgment or conclusion, namely, that the claimant is 'in need' of maintenance, etc, because inadequate provision has been made for his or her proper maintenance, etc. See Gorton v Parks (1989) 17 NSWLR 1 per Bryson J at 10-11.
The determination of whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, etc, of the claimant will always, as a practical matter, involve an evaluation of the provision, if any, made for the claimant on the one hand, and the claimant's 'needs' that cannot be met from his or her own resources on the other. See Hunter per Kirby P at 575.
Although the existence or absence of 'needs' which the claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for his or her proper maintenance, etc. See Singer per Gaudron J at 227. Compare Gorton per Bryson J at 6-11; Collicoat v McMillan [1999] 3 VR 803 per Ormiston J at 816 [38], 820 [47]."
"Need", of course, is a relative concept: de Angelis v de Angelis [2003] VSC 432, per Dodds-Streeton J, at [45].
As Callinan and Heydon JJ emphasised in Vigolo v Bostin, the question of the adequacy of the provision made by the deceased "is not to be decided in a vacuum" or "by looking simply to the question whether the applicant has enough on which to survive or live comfortably". The inquiry is not confined only to the material circumstances of the applicant. The whole of the context must be examined.
In the event that the Court is satisfied that the power to make an order is enlivened (i.e. in this case it is satisfied that the applicant is an eligible person, and that adequate provision for the proper maintenance, education or advancement in life of the person has not been made), then, the Court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the Court at the time the order is made.
The second stage of the process arises under s 59(2) and s 60(1)(b) of the Act. Mason CJ, Deane and McHugh JJ, in Singer v Berghouse, at 211, affirmed that the decision made at the second stage involves an exercise of discretion in the accepted sense. The fact that the Court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant's favour.
However, Basten JA, in Andrew v Andrew, said of the two stage process referred to:
"29 The combination of changes requires that the court address the nature of the exercise being undertaken. Three potential consequences may be identified. First, there is a simplification of the structure of the process. There is no longer a two-stage process required. A degree of artificiality has thus been removed. The court should now ask what, taking all relevant factors into account, would have been adequate provision for the applicant. There is no first stage of determining whether the actual provision was "inadequate", followed by a discretionary exercise of determining what would be adequate and what should in fact be done.
...
41 As noted above, the language of the Succession Act is not consistent with the two-stage inquiry which was a common feature of earlier legislation: cf Singer v Berghouse at 208-209. In Keep v Bourke [2012] NSWCA 64 the Court appears to have assumed that the two-stage process continued to operate under the Succession Act: at [24]-[29]. However, the issue not having been directly addressed, there is no constraint on this Court now adopting a different approach. Nor does earlier High Court authority construing an earlier statutory scheme govern the approach to be adopted to materially different legislative provisions."
In Andrew v Andrew, Allsop P, at [6], said:
"Whether the process engaged in by the Court in s 59 can still be described as "two-staged" in the sense discussed in Singer v Berghouse [1994] HCA 40; 181 CLR 201 at 208-211 may be an analytical question of little consequence. The task involves an evaluative assessment and a choice as to consequence therefrom, appeal from which is governed by the principles concerning discretionary judgments: Singer v Berghouse at 211 and DAO v R [2011] NSWCCA 63; 278 ALR 765 at [93]."
Barrett JA disagreed with Basten JA, in Andrew v Andrew, saying:
"65 This is the second occasion on which this Court has been called upon to deal with a claim under s 59 of the Succession Act. In the earlier case, Keep v Bourke [2012] NSWCA 64, the Court proceeded on the basis that approaches taken under s 7 of the now superseded Family Provision Act 1982 remained relevant and applicable. That matter was explored in greater detail in the course of argument in the present case. For reasons I am about to state, I am of the opinion that the earlier approaches should continue to be followed in cases such as the present case and Keep v Bourke, that is, cases in which the applicant is a child of the deceased and no previous order for provision out of the estate has been made in favour of that applicant.
...
79 First, it is necessary, having regard to s 59(1)(c), for the court to be satisfied that, at the time when it is considering the application, "adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person". Whereas the former s 9(2) provided that an order was not to be made unless the court was "satisfied" in the specified way, the present legislation permits the court to make an order if "satisfied" in the specified way and, by necessary implication, precludes the making of an order if the court is not so "satisfied".
80 Second (and if the court is "satisfied" in the specified way), the "family provision order" that the court is empowered to make is, under s 59(2), "such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made"; and the court may, pursuant to s 60(1)(b), have regard to the matters specified in s 60(2) in deciding whether to make an order and the nature of the order.
81 Under s 59 and s 60, therefore, the task of the court, in a case of the kind under discussion, is:
(a) to determine the extent of the provision made for the maintenance, education and advancement in life of the applicant by the deceased's will or the intestacy laws;
(b) to form an opinion of the adequacy of that provision;
(c) if the opinion is one of inadequacy, to make an evaluative judgment as to what provision, if any, ought to be made out of the estate of the deceased person for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the court at the time the order is made; and
(d) in making that evaluative judgment, to take into account, as discretionary factors, the matters in s 60(2).
...
94 As stated in Keep v Bourke (above), the structure and effect of the Succession Act provisions warrant continuing adherence to the two-stage approach indicated by the decisions of the High Court in Singer v Berghouse and Vigolo v Bostin."
In Franks v Franks [2013] NSWCA 60, Young AJA (with whom McColl JA and Sackville AJA agreed), at [17], referred to the primary Judge (Macready AsJ) having "cited the High Court's decision in Singer v Berghouse [supra] and adopted the two stage process required by that decision".
His Honour noted also, at [29], that the appellant (in one of the two appeals) "accepted that it was appropriate for the primary judge to follow the course laid down in Singer v Berghouse and that [the respondent] had surmounted the first hurdle of the two stage process referred to therein. Accordingly, he identified the key question as whether the primary Judge had erred in determining the quantum of the provision made for ... in lieu of that made under the deceased's will".
At [35], his Honour wrote:
"On an appeal against a decision concerning the application of the second limb of Singer v Berghouse, the Court is dealing with a discretionary judgment (see Singer v Berghouse (at 211) and Durham v Durham [2011] NSWCA 62 at [82]; 80 NSWLR 335 (at 352)). It follows that his Honour's decision is reviewable by this Court only in accordance with the principles established in House v The King [1936] HCA 40; 55 CLR 499."
Although the appeal was allowed, that was because the Court found, at [42], that:
"... in formulating the quantum of the provision he made for Brad, the primary judge did not take into account the disparity in the financial circumstances between Gregory and Brad. Accordingly, the primary Judge's decision as to quantum must be set aside."
Nothing in the Court of Appeal's judgment in Franks v Franks suggests that the approach followed by the trial Judge, in adopting the two-stage process required by Singer v Berghouse, was wrong.
At first instance, there are a number of decisions to which reference should be made. In Verzar v Verzar [2012] NSWSC 1380, Lindsay J said:
"92 I refrain from characterisation of these elements of the case as "stages" because that is terminology associated with the Family Provision Act 1982 (NSW) and Singer v Berghouse (1994) 181 CLR 201 at 208-211. Since Andrew v Andrew [2012] NSWCA 308 (14 June 2012) per Allsop P at [5]-[6] and Basten JA at [27], [29] and [41] a single judge of the Court is bound, in my assessment, to regard the two-stage decision-making process identified in Singer v Berghouse, and confirmed by Vigolo v Bostin (2005) 221 CLR 191, as superseded by enactment of ss 59-60 of the Succession Act.
93 Although the provisions of ss 59(1)(c) and 59(2) might formerly have been treated, respectively, as re-embodiments of the first and second of the two-stages of decision-making identified in Singer v Berghouse, the test to be applied in Family Provision cases must be taken by me to have been modified."
One other matter raised related to the Plaintiff attending at the Defendant's house and without permission taking a copy of various testamentary documents. Although proceedings were commenced against the Plaintiff and Brendan in May 2011, for the return of the documents, the Defendant discontinued those proceedings. (I do not think that anything turns on this other than, perhaps, it gives support to the Plaintiff's concern about the provision that might be left for him in the Defendant's Will.)
Otherwise, there is no evidence of any adverse conduct by the Plaintiff that should be taken into account.
(n) the conduct of any other person before and after the date of the death of the deceased person
I am satisfied that the Defendant was a husband of the deceased, of a 45 year relationship, who did, and has done, all that he could do in relation to the deceased. He is, of course, the chosen object of the deceased's bounty.
(o) any relevant Aboriginal or Torres Strait Islander customary law
This is not relevant in the present case.
(p) any other matter the court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered
There are two other matters that I think are relevant. I have earlier referred to the Defendant's Will and the Codicil, which is his current Will and Codicil. I think it likely, in all the circumstances, that if the Defendant does not revoke that Will and make greater provision for the Plaintiff, and if the Plaintiff survives the Defendant, that he is likely to seek a family provision order out of the Defendant's estate.
The second matter is that during submissions, Mr Condon SC, for the Plaintiff, submitted that if "substantial provision was made for the Plaintiff out of the deceased's estate, that the Plaintiff would give an undertaking to the Court to not proceed with the complaint to the Superannuation Complaints Tribunal". He did not make a submission as to what would constitute "substantial provision".
Determination
Being an "eligible person" is a necessary precondition to the Court being empowered to make an order for the maintenance, education or advancement in life of the eligible person. In this case, there is no dispute that the Plaintiff, is an eligible person within the meaning of s 57(1)(c) of the Act.
There is also no dispute that the Plaintiff commenced the proceedings within the time prescribed by the Act.
Having established eligibility and that the proceedings were commenced within time, the first question for determination is whether, at the time the Court is considering the application, adequate provision for the Plaintiff's proper maintenance or advancement in life has not been made by the Will of the deceased.
Mr S Chapple, counsel for the Defendant, conceded that the Plaintiff had established "jurisdiction" and that the real issue between the parties was not whether provision ought be made, but the nature and quantum of that provision.
Having considered the matters I am required to consider, I, too, am satisfied, for the purposes of s 59(1)(c) of the Act, that the deceased did not make adequate provision for the proper maintenance or advancement in life of the Plaintiff. No provision was made for him in the deceased's Will. The estate is sufficiently large that provision may be made for him, even taking into account the legitimate claims upon the bounty of the deceased of the Defendant and the obligation and responsibility to provide for him.
It is also clear that the Plaintiff has some "needs". As stated above, "need" in the context of the Act is not determined by reference only to minimum standards of subsistence. Nor is it limited to whether the applicant has, at the date of hearing, an immediate need for financial assistance with respect to his maintenance. It is a broader concept, which requires consideration of matters necessary to guard against unforeseen contingencies.
Age and state of health are factors to which, under the Act, the Court may have regard. At the date of hearing, the Plaintiff is not an "able-bodied adult", in the sense that the expression is usually used in connection with family provision litigation, of someone who is, or will be, well able to earn enough by her, or his, own exertions to provide for her, or his needs: Belfield v Belfield [2012] NSWSC 416, per Campbell JA, at [82].
Furthermore, I cannot decide the question of the adequacy, or inadequacy, of the provision made, if any, in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive, or live comfortably. The word 'proper' in the collocation of words in the section of the Act being considered is of considerable importance.
Turning then to s 59(2), namely the question what provision "ought to be made for the maintenance, education or advancement in life" of the applicant having regard to the facts known to the Court, the real area of concern is how to deal with the Plaintiff's claim, whilst bearing in mind the competing claim of the Defendant.
In my view, there is sufficient in the estate to make provision by way of a lump sum for the Plaintiff without affecting, in any substantial way, the financial circumstances of the Defendant. However, I do not accept that the Plaintiff should receive out of the deceased's estate, $400,000 or more, by way of capital sum absolutely, which he sought in oral submissions, and which lump sum would enable him to pay off his mortgage completely and have an unencumbered fund available to pay for the things that he is presently unable to afford.
In my view, the Plaintiff is not entitled to expect that all his needs should be met, in full, from the estate of the deceased. The order should be no more than is necessary to make adequate provision for the Plaintiff's proper maintenance and advancement in life. Furthermore, I must take into account the right of the deceased to dispose of her property as she did in her Will.
In my view, the Plaintiff should receive a lump sum of $290,000, which will enable him to pay off the mortgage debt in its entirety. In addition, upon him disclaiming any interest in the death benefit proceeds, he should receive an interest free loan of $110,000, from the Defendant, as the executor of the estate. The interest free loan should be repayable on sale of the Plaintiff's property, within 18 months of the Defendant's death, or at such other time as the Plaintiff and the Defendant, or his legal personal representative, agree, whichever is the earlier. The loan should be secured by way of registered first mortgage over the Plaintiff's real estate, since the use of the lump sum to pay of the debt secured by the current mortgage will leave his real estate unencumbered. The precise terms, and the form, of the first mortgage should be agreed between the parties.
In this way, the Plaintiff will have a sufficient amount, albeit by way of a secured borrowing, to pay for those things that he says he is currently unable to afford. Depending on how the amount loaned to him is spent, he may have a small lump sum remaining for exigencies of life. He will also have an increased income of almost $2,000 per month.
Whilst it is true, because of the terms of the interest free loan, that he may have to deal with the Defendant's legal personal representative, after the death of the Defendant, I consider that this will occur in any event, as the Plaintiff, is likely to bring proceedings for a family provision order in respect of the Defendant's estate or notional estate (unless the Defendant alters the terms of his current Will) if he survives the Defendant.
I direct the parties to bring in Short Minutes of Order, reflecting these reasons, including the form of the mortgage to which I have referred. The means by which effect can be given to this decision should also be included. The Short Minutes of Order should include, at least, that:
(i) The Plaintiff, Anthony Michael Hogan, is an eligible person; the proceedings were commenced within time; and that the provision made for him in the Will of the deceased is inadequate for his proper maintenance or advancement in life;
(ii) The Plaintiff should receive a lump sum of $290,000, absolutely, out of the estate of the deceased.
(iii) No interest is to be paid on the lump sum, if it is paid within 35 days of the making of these orders; otherwise, interest calculated at the rate prescribed by s 84A(3) of the Probate and Administration Act 1898, on unpaid legacies, is to be paid from that date until the date of payment of the lump sum.
(iv) Upon the Plaintiff disclaiming any interest in the death benefit, he should receive out of the estate of the deceased, an interest free loan of $110,000, which loan is to be secured by registered first mortgage, the terms and form of which, should be agreed, on the Plaintiff's real estate. The loan should be repayable no earlier than 18 months after the death of the Defendant, or on sale of the Plaintiff's property, or at such other time as the Plaintiff and Defendant or his legal personal representative agree, whichever is the earlier;
(v) Unless either party wishes to argue the question of costs, the Plaintiff's costs, calculated on the ordinary basis, and the Defendant's costs calculated on the indemnity basis, shall be paid out of the estate of the deceased.
(vi) The debt proceedings should be dismissed upon the basis that the Defendant (who is the Plaintiff in those proceedings) is not entitled to claim any relief in respect of the same cause of action in any subsequent proceedings commenced in that, or any other, Court.
(vii) The exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005.
(vii) Consideration be reserved in respect of making consequential and ancillary orders for the purpose of giving effect to the family provision order.
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Decision last updated: 26 September 2013
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