Jagoe v Maguire
[2013] NSWSC 1283
•12 September 2013
Supreme Court
New South Wales
Medium Neutral Citation: Jagoe v Maguire [2013] NSWSC 1283 Hearing dates: 26, 27 August 2013 Decision date: 12 September 2013 Jurisdiction: Equity Division Before: Hallen J Decision: (i) Having found that the Plaintiff, John Bernard Jagoe, is an eligible person; that 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, orders that he should receive, by way of provision out of the estate of the deceased, a lump sum equivalent to 33 cent of the estate of the deceased, such lump sum to be calculated after deducting the costs and expenses associated with the sale of "Rosedale" and such costs of the proceedings as are ordered to be paid.
(ii) Orders that the provision made for the Plaintiff should be borne by the beneficiaries of the deceased's estate equally.
(iii) Orders that until the family provision order, and, if ordered to be paid out of the estate, the costs of the Plaintiff, are satisfied, there be a charge in favour of the Plaintiff given by the Defendants, secured on the title to "Rosedale" to secure the family provision order and those costs.
(iv) Orders that no interest is to be paid on the lump sum, if it is paid within 28 days of the completion of the sale of "Rosedale"; 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.
(v) Orders that unless either party wishes to argue the question of costs, the Plaintiff's costs, calculated on the ordinary basis, and the Defendants' costs, calculated on the indemnity basis, shall be paid out of the estate of the deceased.
(vi) Orders that 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 and any costs order that is made.
Catchwords: SUCCESSION - FAMILY PROVISION - The Plaintiff seeks a family provision order out of the estate of the deceased under the Succession Act 2006 as the spouse of the deceased - Long marriage - The Defendants are two of four children of the deceased by her first marriage, and the executors to whom Probate granted - The whole estate left to the four children of the deceased by her first marriage - No dispute as to Plaintiff's eligibility but dispute whether to make a family provision order - If order for provision made, quantum of provision that should be made Legislation Cited: Family Provision Act 1982
Probate and Administration Act 1898
Property (Relationships) Act 1984Succession Act 2006Succession Amendment (Family Provision) Act 2008
Uniform Civil Procedure Rules 2005Cases Cited: Alexander v Jansson [2010] NSWCA 176Allardice, In re; Allardice v Allardice (1909) 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; (2012) 16 BPR 31,177
Bladwell v Davis [2004] NSWCA 170
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Bourke, M A (dec'd) and the TFM Act [1968] 2 NSWLR 453
Clifford v Mayr [2010] NSWCA 6
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Crewe, Re [1956] NZLR 315
Cross v Wasson [2009] NSWSC 378; (2009) 2 ASTLR 201
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; (2009) 2 ASTLR 89
Flathaug v Weaver [2003] NZFLR 730
Foley v Ellis [2008] NSWCA 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] HCA 31; (1980) 144 CLR 490
Gorton v Parks (1989) 17 NSWLR 1
Grey v Harrison [1997] 2 VR 359
Harrisson v Skinner [2013] NSWSC 736
Hyland v Burbidge [2000] NSWSC 12
Kay v Archbold [2008] NSWSC 254
Keep v Bourke [2012] NSWCA 64
Kembrey v Cuskelly [2008] NSWSC 262
King v White [1992] 2 VR 417
Langtry v Campbell (NSWSC, 7 March 1991, unreported)
Magill v Magill [2006] HCA 51; (2006) 226 CLR 551
Marinis v Jeweller [2000] NSWCA 282
Marshall v Carruthers [2002] NSWCA 47
Mayfield v Lloyd-Williams [2004] NSWSC 419
McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566
Milillo v Konnecke [2009] NSWCA 109; (2009) 2 ASTLR 235
Miller v Miller [2006] UKHL 24; [2006] 2 AC 618
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
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
Richard v AXA [2000] VSC 341
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 (deceased), Re the Will of; 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
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: Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 7th ed, 2006), J D Heydon and M J Leeming Category: Principal judgment Parties: John Bernard Jagoe (Plaintiff)
Warwick Jeffery Maguire (first Defendant)
Rory MacGregor Maguire (second Defendant)Representation: Counsel:
Mr Rodney Weaver (Plaintiff)
Mr Sinclair Gray (Defendants)
Solicitors:
Higgins Lawyers (Plaintiff)
A R Walmsley & Co (Defendants)
File Number(s): 2012/67113
Judgment
The Claim
HIS HONOUR: The Plaintiff, John Bernard Jagoe, who is the widower of Barbara Jagoe ("the deceased"), applies for a family provision order under Chapter 3 of the NSW Succession Act 2006 ("the Act"). 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, effective from 1 March 2009. A family provision order is an order made by the court, under Chapter 3, 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 29 February 2012, 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). The Defendants named in the Summons are Warwick Jeffrey Maguire and Rory MacGregor Maguire, the executors appointed in the deceased's Will, to whom Probate was granted. They are two of the four children of the deceased.
There is no question, in the present case, of any provision being sought out of notional estate of the deceased.
Throughout the balance of these reasons, I shall refer to the parties and other family members, where necessary, after introduction, by his, or her, first name, or if otherwise necessary, as a party. This is for convenience and I hope that it will not be thought discourteous.
Background Facts
I shall begin by setting out some background facts that are uncontroversial.
The deceased died on 2 March 2011. She was then aged 73 years, having been born in December 1937.
The deceased married her first husband, Ronald Jeffrey Maguire, in about 1959. He predeceased her, having died in April 1986. There were four children of their marriage, being Rory, who was born in November 1961, Catherine Mary Maguire who was born in June 1963, Warwick, who was born in June 1966, and Charmaine Ann Maguire, who was born in July 1976.
John was previously married, also, to Margaret Anne Jagoe. That marriage ended with their separation in 1978, and their subsequent divorce in January 1980. There were three children of this marriage, each of whom is an adult, and none of whom is financially dependent upon him. (He also has a daughter by another relationship but he has had no contact with her for some years.)
The deceased and John had known each other for about two years, prior to forming a relationship. They commenced to reside together in about May 1986, when John moved into the property known as "Rosedale", Kurrajong Hills, in New South Wales. They married in September 1987. Therefore, at the date of the deceased's death, they were married for almost 24 years and had been in a relationship for about 25 years.
The deceased left a duly executed Will that she made on 20 May 2005, Probate, in common form, of which was granted by the Supreme Court of New South Wales, on 26 October 2011, to the Defendants. (The Will appears to have been prepared by a solicitor at Windsor.)
The deceased's Will, relevantly, provided for a gift of the whole of the deceased's estate to "such of my children as shall survive me". John was not mentioned in the Will. No explanation was given, in the Will, or otherwise in writing, for the fact that no provision had been made for him.
In the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the deceased's actual estate, at the date of death, was disclosed as having an estimated, or known, gross value of $1,320,864. The estate was said to consist of the property, "Rosedale" ($1,100,000), shares ($23,495), investments ($15,000), moneys on deposit in funds management ($107,341), moneys on deposit ($40,027) and household contents ($25,000). (I have omitted, and shall continue to omit any reference to cents, which explains what may appear to be mathematical errors.)
Also disclosed as actual estate, although there was, until the hearing, a dispute about it, was a Datsun car ($10,000), which although unregistered at the date of death, was last registered, in January 2007 in the names of the deceased and John.
Despite its modest value, the Defendants, until the second day of the hearing, maintained that the car formed part of the estate of the deceased and did not pass to John by survivorship. However, at the commencement of the second day, the Defendants accepted that the Plaintiff should receive the Datsun vehicle. (The Plaintiff estimated its value at between $10,000 and $16,000, although it has not been in his possession for some time, and other evidence is to the effect that it has suffered some damage during storage. On this aspect, I consider that the Defendants' estimate of current value should be accepted because it has been in their possession and because they would be aware of its current condition.)
The Inventory of Property also referred as "property owned by deceased as joint tenant with another or others", money in a bank account in the names of the deceased and John ($9,753). However, by the date of hearing, it appears that John had received all of the proceeds of this joint bank account.
The Defendants, at the date of the hearing, estimated the gross value of the deceased's actual estate, available for distribution, at the date of hearing, as $1,390,687. The estate was said to consist of "Rosedale" ($1,200,000), moneys held in the trust account of the Defendants' solicitors ($5,582), investment funds ($113,687), moneys in a bank account ($923), shares ($23,495), an amount invested in Halifax Investment Services ($15,000), household contents ($25,000) and the car ($6,000 - $8,000). However, as the car was to pass to John, the total value was reduced to $1,383,687.
In an affidavit sworn on 31 July 2013, Rory also disclosed that various items of furniture had been distributed to one, or other, of the deceased's children. He described the items distributed to be of "nominal value". There is no issue about the distribution.
Rory also gave evidence that $23,822 had been paid out of the deceased's estate in relation to these proceedings and that "various other estate expenses...including a town planner, a surveyor for the subdivision and Hawkesbury City council rates, amounting to $20,451" had also been paid.
At the commencement of the hearing, there was a real dispute about the current value of "Rosedale". Evidence read by John, revealed that Hawkesbury City Council had approved a Development Application, made by the Defendants, for the subdivision of "Rosedale" into three lots. Lot 1 was to contain the current improvements, being a single level three bedroom dwelling with kitchen, family room, dining room, rumpus room, one bathroom, and walk-in-robe to main bedroom. The estimated area of Lot 1 was 3.52 hectares. Each of Lots 2 and 3, which was estimated to be 4 hectares in area, was disclosed to be vacant land. (The total area of "Rosedale" is shown as 11.52 hectares.)
According to a valuation, obtained by John's solicitors, and served on the Defendants' solicitors, the value of "Rosedale" had been considerably enhanced by the proposed subdivision. That valuation, dated 14 February 2013, by Lloyd's Property Valuations Pty Ltd, estimated the gross sale value of the three Lots, on completion of the subdivision, would be $1,824,000. There were some costs and disbursements identified including legal and selling costs ($88,700), survey and DA costs ($100,000) holding costs ($8,806), and "profit and risk" ($226,343).
There were other costs identified (purchase costs, interest, stamp duty and legal costs), that totalled $161,079, which, it was accepted, should not be deducted from the gross estimate of value. It followed that the net proceeds of sale, if the subdivision proceeded, would be about $1,403,000.
Without subdivision approval, the value of "Rosedale" was estimated to be $1,215,000.
On the second day of the hearing, the Defendants, without objection, tendered an "External Abridged Valuation Report" dated 30 July 2013, which referred to the subdivision approval and stated:
"We have considered the end sale value of these Lots and then deducted the relevant costs which include selling costs, legal costs, profit and risk factor, survey costs, holding costs and all other relevant costs".
On this basis we have determined a residual value of the property of $1,200,000."
As there will be a difficulty in calculating the precise value of the estate because of the uncertainty that exists in relation to the value of "Rosedale", and because the costs of these proceedings have only been estimated, and no order for costs has yet been made, the parties agreed that in the event that John succeeds, rather than ordering the provision to be made by payment of a lump sum, the Court should make an order calculated as a percentage of the estate, after the deduction of the costs and disbursements of sale of "Rosedale" and the payment of legal costs and disbursements of the proceedings ordered to be paid. That seems to be an appropriate course to follow in all the circumstances of the case.
This agreement was reached because it became clear, during the course of the hearing, that there was insufficient in the estate to enable the costs and expenses of proceeding with the subdivision, and that "Rosedale" will be placed on the market for sale immediately, with subdivision approval having been granted.
Counsel also informed the Court that the children of the deceased had agreed that the burden of the provision, if any, made for John, would be borne by them equally. (Of course, whilst that agreement does not bind the Court, it should be borne in mind.)
There were no liabilities disclosed in the Inventory of Property. John paid the funeral expenses ($4,076) in March 2011 out of the joint bank account that he held with the deceased. However, the parties agreed that the costs and expenses of sale of "Rosedale" should be estimated to be $50,000.
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 Defendants, irrespective of the outcome of the proceedings, normally, will be entitled to an order that their costs, calculated on the indemnity basis, be paid out of the estate.
The Plaintiff's costs and disbursements of the proceedings, including counsel's fees, calculated on the indemnity basis, have been estimated to be in the order of $84,171 (inclusive of GST and upon the basis of a two day hearing). Those costs and disbursements, calculated on the ordinary basis, are said to be $64,747.
The Plaintiff's solicitor, Mr K W Fegebank, also disclosed in the costs affidavit, that $12,980 has been paid by the Plaintiff on account of disbursements. Should an order be made that the Plaintiff's costs are to be paid out of the estate, that amount, or at least some of it, may be recovered.
The Defendants' costs and disbursements of the present proceedings, including counsel's fees, calculated on the indemnity basis (inclusive of GST and upon the basis of a two day hearing), have been estimated to be $58,400. The Defendants' solicitor, Mr C G Bryett, also disclosed in the costs affidavit (filed on the morning of the second day of the hearing), that $23,124 has been paid, on account of disbursements, out of the estate of the deceased. The balance payable out of the estate if a costs order is made that the Defendants' costs be paid out of the estate, is $35,275.
Of course, depending upon the result of John'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.
(During submissions, I was requested by the parties to reserve, for further argument, the question of the costs of the proceedings. I was informed that there may be matters, not presently disclosed to the Court, that would impact upon both the issue of the burden, and the quantum, of costs. In the circumstances, I propose to determine costs after the parties have had an opportunity to consider these reasons, raise any additional relevant factual matters and make some submissions.)
Although the Defendants had asserted that they would claim executors' commission, or percentage, for their pains and trouble, there was no evidence of what the amount of commission, or the percentage, that could be regarded as just and reasonable, if the Court allowed it. Again, on the second day of the hearing, the Defendants' counsel indicated that no claim for commission, or percentage, would be made.
The parties accepted that for the purposes of the hearing, I should determine John's application upon the basis that the actual net distributable estate, after the payment of such costs as are ordered to be paid out of the estate, will be between $1,233,664 (if the sale price of "Rosedale" was $1,200,000) and $1,433,664, (if the sale price of "Rosedale" was $1,400,000). (In the calculations to reach these estimates, costs were deducted.)
The Defendants did not file any Cross-Claim seeking possession of "Rosedale". There seemed to have been some suggestion, in the evidence by Rory, that Charmaine had been requested to vacate possession of "Rosedale" but that she had not done so and was not prepared to do so.
However, Charmaine appeared again on the second day of the hearing and in answer to questions from the Bench stated that she did not wish to prevent, or hinder, the sale of "Rosedale", but that for financial reasons, she was unable to vacate.
Ultimately, after some further discussion, the parties agreed that, in the event that $5,000 is made available to Charmaine, within 30 days, as an advance on her entitlement under the Will of the deceased, she will vacate possession of "Rosedale" by 31 December 2013. The Defendants appeared prepared to accept the assurance given by Charmaine that she would do so.
The parties, and Charmaine, accepted that the agreement referred to in the last paragraph would not prevent the Defendants from immediately taking steps to have "Rosedale" listed for sale.
The persons described as eligible persons, within the meaning of the Act, are the parties, Catherine and Charmaine. It is also possible that the four minor children of Charmaine are eligible as grandchildren of the deceased who were partly dependent upon the deceased. However, the Defendants deny that each is an eligible person. In any event, there is no specific evidence of the dependency, either whole or partial, by any grandchild upon the deceased. Accordingly, I am unable to conclude that the grandchildren are eligible persons.
Only the Plaintiff has commenced proceedings under the Act. 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.
In this case, each of the other eligible persons is a beneficiary and has given evidence in the proceedings about his, and her, competing claim, financial and otherwise upon the bounty of the deceased.
Finally, I should mention that John made a Will on 20 May 2005 (the same date as the deceased made her Will and with the same solicitor), in which he appointed his daughter, Peta Marie Kingham, and his son-in-law Ian Kingham, as executors. He provided for the executors to invest the whole of his estate on trust to pay all just debts, funeral and testamentary expenses and then to pay the income therefrom, for the deceased for her life, and upon her death, to be divided equally between his three named children.
There is no evidence that John's Will was revoked at any time before the deceased's death. The terms of this Will, in making provision for the deceased, seems inconsistent with the agreement alleged by the Defendants, that the whole of John's estate was to be left to his children.
Some other background facts
At the commencement of the marriage, the deceased did not own "Rosedale". It was held in a family trust (The Maguire Family Settlement). However, in about 1991, in circumstances that are not disclosed in evidence, it was distributed to the deceased and, from that time, was registered in her sole name absolutely.
At the commencement of the marriage, John owned several parcels of land in Cranebrook, New South Wales. During the marriage, he sold these parcels of land and purchased, in about 1992, two parcels of land situated at Gates Avenue, Katoomba, each of which was, initially, registered in his, and the deceased's, names, as joint tenants, but subsequently, in April 2005, came to be held by them as tenants in common in equal shares.
There is no suggestion that the deceased made any financial contribution to the properties purchased in their joint names. (It appears to be acknowledged that the proceeds of sale of John's land at Cranebrook were used to purchase the Katoomba land.) I shall return to the transfer of the Katoomba properties and the distribution of the proceeds of sale later in these reasons.
To enable the Cranebrook land to be subdivided prior to its sale, the deceased lent John an amount of either $30,000 or $50,000 (depending upon the evidence that I accept). John gave the deceased a mortgage, dated 29 May 1990, securing the amount of $50,000. The mortgage was registered on title to the Cranebrook property.
John acknowledged that he did not repay the amount borrowed to the deceased and she, apparently, did not seek its repayment.
The Statutory Scheme
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 in their application.
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. One category is "(a) a person who was the ... husband of the deceased person at the time of the deceased person's death": s 57(1)(a).
There is no dispute in this case that John is an eligible person.
Inadequacy of Provision
Relevantly, in this case, if eligibility is found, the Court then determines 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 the ultimate result and it is only if the Court is satisfied of the inadequacy of provision made, 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 or 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 or 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."
Basten JA in Foley v Ellis [2008] NSWCA 288, at [3], wrote that the state of satisfaction "depends upon a multi-faceted evaluative judgment". In Kay v Archbold [2008] NSWSC 254, at [126], White J commented that the assessment of what provision is proper involved "an intuitive assessment". Stevenson J, in Szypica v O'Beirne [2013] NSWSC 297, at [40], 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".
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; (2009) 2 ASTLR 82, 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. At this stage, 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 next 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 this 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.
In relation to non-financial contributions, John states:
"...
19. Throughout our marriage, I provided care and assistance to Barbara as she suffered from numerous health issues. Barbara carried spinal injuries from two serious horse falls. Barbara also developed breast cancer, which required her to undergo two mastectomies with associated chemotherapy and radiotherapy treatment. When Barbara was recovering from her injuries from the second horse fall she was fitted with a full upper body brace for approximately three months and I attended her every need on a twenty four hour basis. She had suffered from four fractured discs in her neck and two fractured ribs. Not long after in 2009 Barbara was diagnosed with breast cancer culminating in one breast being removed in that year and the other breast was removed in 2010. I took full responsibility during this difficult period in relation to the many visits required to hospitals and doctors at least once a week with Barbara and nursed her on a twenty four hour basis."
He also states that he carried out maintenance on "Rosedale".
None of the deceased's children, when giving his and her evidence, sought to diminish the significance of John's contribution to the deceased over the nearly 24 years of married life. In a marriage of that duration, it is reasonable to conclude, that each brought the other comfort and happiness and each devoted some of his, and her, time and energy to caring for the other.
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate
The deceased appears to have made some provision for John during her lifetime. As stated, he lived with her on "Rosedale" throughout their marriage.
John admits that the deceased assisted him in paying off an amount of about $30,000, which was less than the amount secured under a mortgage on the Cranebrook property. He admits that the amount provided by the deceased was a loan that was never repaid. He explained why the mortgage referred to a larger amount than that, in fact, lent to him. I have no reason to disbelieve this evidence.
I have earlier referred to the belated acknowledgement that John should receive the Datsun car and that he received some moneys held in a joint bank account with the deceased.
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person
There is no written evidence of the testamentary intentions of the deceased other than in the Will to which I have referred. No reasons appear to have been provided by her, in writing, explaining why she made no provision at all for John.
John gives evidence of the following conversation with the deceased in about December 2007:
"Barbara: I hate to raise it, but I am worried that if something happened to you, I'd be left with nothing to live on. I've got the house but nothing else.
Me: I suppose I could sell my place in Katoomba and let you invest the money in a secure account. We could use the interest to live off and, if I went first, you would have something to get by on until things were sorted out.
Barbara: That would really ease my mind. Of course, as I've told you before, you know that if I go first, you can stay on here at Rosedale for as long as you want, until you die if that suits you."
He says that the conversation, so far as it relates to him continuing to live at "Rosedale" occurred on several occasions, both before and after the conversation referred to above.
Warwick acknowledges that he knew that the deceased had "always said that [John] could stay on "Rosedale" as long as he wanted to". However, he, and some of the other children of the deceased, point to the fact that John made his Will in which he provided for his own children, as the deceased had done for them, as demonstrating an agreement that each would do this. (I have earlier referred to John's Will, which seems inconsistent with the alleged agreement.)
Whilst the only promise of bounty made to John was as set out above, and even if their relationship proceeded on the basis, clearly understood by John, that the deceased would leave her estate to be divided between her children, that is of little consequence in a claim under the Act, and particularly in a claim by a spouse of such a long marriage. What is always in issue in cases in which a family provision order is sought is the adequacy and propriety of the provision, if any, made in the deceased's Will, or on intestacy, for the applicant.
Furthermore, s 31 of the former Act, and s 95 of the Act, each enables an eligible person in the lifetime of the person who becomes the deceased, to enter into a binding release of his, or her, rights under the former Act or the Act. No release of rights was sought by either the deceased or John, or approved by the Court, and as stated above, John appears to have made some provision for the deceased out of his property, during her lifetime.
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the court considers it relevant, the extent to which and the basis on which the deceased person did so
The deceased and John lived on "Rosedale" at the time of the deceased's death and John has continued to live there since her death until November 2011.
(l) whether any other person is liable to support the applicant
There is no person with a liability to support John.
(m) the character and conduct of the applicant before and after the date of the death of the deceased person
An evaluation of "character and conduct" may be necessary, not for the sake of criticism, but to enable consideration of what is "adequate" and "proper" in all the circumstances. Importantly, the Act does not limit the consideration of "conduct" to conduct towards the deceased.
I have dealt with the relationship of John and the deceased. Even though there was some evidence about ill-feeling, or complaint, made by the deceased about John, I am satisfied that any complaints were not serious and did not cause any fissure in their relationship. In any event, in any marriage, particularly of the duration of this one, there are likely to be isolated periods of disharmony.
Certainly, I do not regard the suggested selfishness, and alleged indifference, that is alleged to have given rise to the ill-feeling, or complaint, as sufficiently serious to disentitle John to an order for provision out of the estate, or even reduce the entitlement to the provision that is found to be adequate and proper. (I note, also, that the complaint about selfishness appears to be contrary to the evidence set out above given by Charmaine.)
Overall, I regard the character and conduct of the plaintiff both before, and after, the death of the deceased to not be in question.
(n) the conduct of any other person before and after the date of the death of the deceased person
I am satisfied that each of the children of the deceased was a loving child who did, and has done, all that he and she could do in relation to the deceased. They have each given evidence of the contribution that each made to the welfare of the deceased and otherwise. It is unnecessary, in the circumstances of this case, to lengthen these reasons by identifying all of the contributions said to have been made.
Each of the deceased's four children is, of course, a chosen object of the deceased's bounty.
There is evidence of relatively recent incompatibility between Rory and John (including at Court when Rory abused John), but that is not relevant to the claim by John for a family provision order. Rory acknowledged the inappropriateness of his conduct and said that he regretted it. Emotions during the case were, understandably, raw and painful. Hopefully, the termination of the proceedings by judgment, will settle the hostility that has rocked the family since the death of the deceased.
(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 is no other matter that I consider relevant. (Neither of the parties relied upon any matter under this ground that was not otherwise considered under the other grounds.)
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 John, is an eligible person within the meaning of s 57(1)(a) of the Act.
There is also no dispute that John 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 John's proper maintenance or advancement in life has not been made by the Will of the deceased.
Having considered the matters I am required to consider, I am satisfied, for the purposes of s 59(1)(c) of the Act, that adequate provision for the proper maintenance or advancement in life has not been made for John. No provision was made for him in the deceased's Will. The estate is sufficiently large to enable provision to have been made for John, even taking into account the legitimate claims upon the bounty of the deceased of each of her children and the obligation and responsibility to provide for each of them.
The marriage of John and the deceased was a long one. Whatever resentment, or complaint, the deceased raised with any of her children about John, it was not significant enough to end their marriage, and the marriage continued as a generally loving and harmonious one. (In the circumstances of this case, bearing in mind the length of the marriage, I think the fact that it was a second marriage for each of John and the deceased, and that they had no children together, is irrelevant.) I also remember his contribution to the welfare of the deceased and to members of her family.
It is also clear that John 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.
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 to which I have referred is of considerable importance.
Age and state of health are factors to which, under the Act, the Court may have regard. At the date of hearing, John 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; (2012) 16 BPR 31,177, per Campbell JA, at [82]. He is almost 72 years of age, and he has not worked for over 15 years. He is in good health, and is active and fit. He may live for many years. It is only proper that, at his age, and stage of life, he should be able to enjoy the remaining years without pressing financial concerns or worries.
In addressing whether adequate provision was made for John, another consideration appears to be the assessment of the relative financial position and competing claim of each of the deceased's children. Warwick and Charmaine are in the worst financial position. Rory and Catherine, whilst not wealthy, are in employment, and each has a spouse, who is also employed. Also, each of Warwick, Rory and Catherine own their own home, albeit subject to mortgage.
I find myself quite unable to accept the submission, made on behalf of the Defendants, that there should be no provision made for John and that his Summons should be dismissed. The submission is wholly unrealistic, and does not focus upon the terms of the Act.
I also reject the Defendants' submission, in the alternative, that a lump sum sufficient to pay off the debt secured by mortgage over the Hazelbrook property, would, in all the circumstances, be adequate and proper provision. It was submitted that John could live in the Hazelbrook property, which would then be unencumbered. This submission, also, is unrealistic. He has provided powerful reasons for not wishing to live there, and in all the circumstances of this case, he should not be required to. Furthermore, it is to be noted, that for the duration of the marriage, John lived, with the deceased, in reasonably large comfortable surroundings on a large tract of land.
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 John's claim, whilst bearing in mind the competing claim of each of the beneficiaries. It is unnecessary to repeat the matters that need to be taken into account.
I reject the written submission made by his counsel that John should receive a lump sum of $750,000, or orally, that he should receive $600,000, principally on the basis that each submission is equally unrealistic and ignores freedom of testation and the competing claims of the deceased's children. I also bear in mind that "Rosedale", the principal asset of the estate came to the deceased out of a Trust, which, it seems, was set up by her first husband, the father of the children.
In Marinis v Jeweller [2000] NSWCA 282, the Court (comprising Mason P, Giles JA and Rolfe AJA), wrote:
"[26] ... We would reject the appellant's submission that adequate provision by a deceased person requires the deceased to ensure that an eligible person must be provided for to such a level as would ensure that his or her available assets are not reduced in consequence of the death and that the eligible person should not be obliged to re-arrange or re-organise his or her available assets."
Nevertheless, the principal concern of the Court, on the facts of this case, is to ensure that John has security of accommodation and enough to furnish any accommodation that he purchases. On his evidence, he does not need more income or a significant additional fund for exigencies of life.
There is no reason why John should retain the Hazelbrook property since, at the date of hearing, this asset provides him with no income. Unless he discharges the debt secured by the mortgage by payments of capital, it is likely to be some years before that property will provide him with any income. If it were sold now, and he discharged the mortgage debt, the net equity, after payment of associated costs and expenses of sale, would be in the order of about $190,000. Those net proceeds could be used to fund part of the purchase price of alternative accommodation in the geographical area in which he wishes to live. Alternatively, and if necessary, the net proceeds could provide him with income and capital to rent accommodation until such time as the order for provision is satisfied.
In my view, John should receive a lump sum calculated as 33 per cent of the estate, such percentage to be calculated after the payment of the costs and expenses associated with the sale of "Rosedale" and such costs of the proceedings as are ordered to be paid. The amount yielded will depend upon the sale price of "Rosedale", but using the estimates referred to earlier, would provide between about $406,000 and about $472,000. When added to the net proceeds of sale of Hazelbrook, he should have sufficient funds to enable the purchase of suitable accommodation (say $520,000) and to furnish it (say $10,000), and, if less than all of it is spent in purchasing that accommodation, an amount will be available for exigencies of life and perhaps, a small income to supplement what he currently receives. In this way, as stated by the Defendants in their written submissions, "[T]he Applicant as the widower in a long marriage [will be] entitled to be housed and protected from the vagaries of life".
The effect of that order will mean that each of the beneficiaries, in accordance with the agreement reached between themselves, will have his, and her, share of the net value of the estate, calculated after the payment of the costs and expenses associated with the sale of "Rosedale" and such costs of the proceedings as are ordered to be paid reduced by 8.25 per cent or, using the estimates previously referred to, between about $100,000 and $120,000.
I note that the Defendants accepted that the amount of $30,000, which John acknowledged was a loan made to him by the deceased, should not have to be repaid to the estate. In coming to my conclusion, I have taken into consideration that the deceased contributed an amount to the building up of John's assets.
In the circumstances, the orders that I make are:
(i) Having found that the Plaintiff, John Bernard Jagoe, is an eligible person; that 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, he should receive, by way of provision out of the estate of the deceased, a lump sum calculated as 33 per cent of the estate of the deceased, such amount to be calculated after the payment of the costs and expenses associated with the sale of "Rosedale" and such costs of the proceedings as are ordered to be paid.
(ii) The provision made for the Plaintiff should be borne by the beneficiaries of the deceased's estate equally.
(iii) Orders that until the family provision order, and, if ordered to be paid out of the estate, the costs of the Plaintiff, are satisfied, there be a charge in favour of the Plaintiff given by the Defendants, secured on the title to "Rosedale" to secure the family provision order and those costs.
(iv) No interest is to be paid on the lump sum, if it is paid within 28 days of the completion of the sale of "Rosedale"; 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.
(v) Unless either party wishes to argue the question of costs, the Plaintiff's costs, calculated on the ordinary basis, and the Defendants' costs, calculated on the indemnity basis, shall be paid out of the estate of the deceased.
(vi) 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 and any costs order that is made.
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Decision last updated: 12 September 2013
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