Kohari v Snow
[2013] NSWSC 452
•01 May 2013
Supreme Court
New South Wales
Medium Neutral Citation: Kohari v Snow [2013] NSWSC 452 Hearing dates: 18 March 2013 Decision date: 01 May 2013 Jurisdiction: Equity Division Before: Hallen J Decision: (i) Declare that the 3,219 ordinary shares in Westpac Banking Corporation, held in the names of the Plaintiff and the deceased, at the date of the deceased's death, do not form part of the property of her estate and that the Plaintiff is beneficially entitled to all of those shares.
(ii) Having found that the Plaintiff is an eligible person, and that the provision made for him in the Will of the deceased is inadequate for his proper maintenance or advancement in life, order that he receive a lump sum of $55,000 out of the estate of the deceased.
(iii) Order that the burden of the provision made for the Plaintiff should be paid out of the residuary estate.
(iv) Order that no interest is to be paid on the lump sum, if that lump sum is paid within 14 days of the making of these orders; otherwise, interest calculated at the rate prescribed by s 84A(3) 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) Order that the Cross-Claim be dismissed.
(vi) Order that the costs of the parties be determined after further submissions, unless agreement is reached between them.
(vii) Order that the Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005 following the determination of the costs of the proceedings.
(viii) Order that the Court Book be returned.
Catchwords: SUCCESSION - The Plaintiff makes a claim for a family provision order as a child of the deceased - Defendant is a solicitor and the executor appointed in the Will of the deceased, to whom Probate was granted -The principal beneficiaries are the grandchildren of the deceased - Competing claimants as beneficiaries on the bounty of the deceased although not eligible persons under the Act - Whether family provision order should be made for the Plaintiff and if so nature of the order Legislation Cited: Family Provision Act 1982
Probate and Administration Act 1898
Property (Relationships) Act 1984
Succession Act 2006
Succession Amendment (Family Provision) Act 2008
Uniform Civil Procedure Rules 2005Cases Cited: Alexander v Jansson [2010] NSWCA 176
Allardice, In re, Allardice v Allardice (1909) 29 NZLR 959
Andrew v Andrew [2012] NSWCA 308
Bartlett v Coomber [2008] NSWCA 100
Blore v Lang (1960) 104 CLR 124
Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Buckland Deceased, Re [1966] VR 404
Butcher v Craig [2009] WASC 164
Butler v Morris; Butler (bht NSW Trustee & Guardian) v Morris [2012] NSWSC 748
Calverley v Green [1984] HCA 81; (1984)155 CLR 242
Christie v Manera [2006] WASC 287
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Crossman v Riedel [2004] ACTSC 127
Curran v Harvey (Estate of the Late Donald Leslie Julian) [2012] NSWSC 276
Currie v Hamilton (1984) 1 NSWLR 687
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
Evans v Levy [2011] NSWCA 125
Flathaug v Weaver [2003] NZFLR 730
Foley v Ellis [2008] NSWCA 288
Gardiner v Gardiner (NSWSC, 28 May 1998, unreported)
Goodman v Windeyer (1980) 144 CLR 490
Gorton v Parks (1989) 17 NSWLR 1
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
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
McCosker v McCosker (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
MacGregor v MacGregor [2003] WASC 169
Marks v Marks [2003] WASCA 297
Martin v Martin [1959] HCA 62; (1959) 110 CLR 297
Mayfield v Lloyd-Williams [2004] NSWSC 419
Nicholls v Hall [2007] NSWCA 356
Oldereid v Chan [2013] NSWSC 434
Palaganio v Mankarios [2011] NSWSC 61
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
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
Smith v Smith [2011] NSWSC 938
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
Thom v The Public Trustee (NSWSC, 2 April 1992, unreported)
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, Young J, 17 May 1996, unreported)Texts Cited: Wigmore on Evidence, 3rd ed (1940) Vol 2 Category: Principal judgment Parties: Paul Kohari (Plaintiff)
Harry Simon Snow (Defendant)Representation: Counsel:
Mr G McGrath SC (Plaintiff)
Mr J Armfield (Defendant)
Solicitors:
Smith Reid Lawyers (Plaintiff)
Swaab Attorneys (Defendant)
File Number(s): 2011/316796
Judgment
The Claim
HIS HONOUR: These are proceedings commenced by Paul Kohari, who applied for a family provision order under Chapter 3 of the Succession Act 2006 ("the Act") as a child of Susanna Kohari ("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, 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 5 October 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 19 February 2013, the Plaintiff sought, additionally, a declaration that 3,219 ordinary shares in Westpac Banking Corporation, held in the names of the Plaintiff and the deceased, at the date of the deceased's death ("the WBC shares"), do not form part of the property of the estate and that he is beneficially entitled to all of those shares.
The Defendant named in the Summons is Harry Snow, a solicitor and the executor appointed in the Will of the deceased to whom Probate was granted. He has no interest, as a beneficiary, in the estate of the deceased. Commendably, he has stated that he does not propose to charge executor's commission.
The Defendant filed a Cross-Summons seeking a declaration that, as the executor of the deceased's estate, he and the Plaintiff hold the WBC shares as tenants in common in equal shares. He also sought a declaration that 1,610 WBC shares form part of the property of the deceased's estate. It can be seen, from the terms of this declaration, there is no dispute that the Plaintiff is the beneficial owner of 1,610 WBC shares.
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 these proceedings, 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 20 October 2010. She was then aged 86 years, having been born in January 1924.
The deceased married Emil Paul Kohari on a date not disclosed in the evidence. He predeceased the deceased, having died in about March 2010. There were two children of their marriage, one being the Plaintiff, and the other being Susanna Maria Urganics, who was born in October 1945.
The deceased and her family migrated to Australia from Romania in November 1964.
The deceased left a Will that she made on 14 October 1991, Probate of which was granted, by this Court, on 19 July 2011. By that Will, and in the events that happened, the deceased made the following bequests:
(a) all mobile and/or personal goods contained in her home at Helensburgh, to Susanna;
(b) her car to Joseph Kohari, a grandchild (a child of the Plaintiff);
(c) the proceeds of sale of her home, at Helensburgh, equally, to her named grandchildren, namely Joseph, Katherine Urganics, Gabriella Urganics, and Richard Urganics.
Gabriella, Richard and Katherine, are the children of Susanna. Katherine died on 23 January 2011, aged 42 years. Her husband, Nigel Taylor, and her daughter from a prior relationship, Theresa Moulds, survived Katherine. Since she survived the deceased by more than 30 days, her interest in the deceased's Will passes to her estate. Under her Will, 60 per cent passes to Nigel and 40 per cent to Therese. (Susanna applied for Probate of Katherine's Will, which was recently granted.)
Gabriella was born in May 1974 and is currently aged 38 years. She has sworn two affidavits that were read in the proceedings by the Defendant.
Richard was born in October 1986 and is currently aged 26 years. He, also, has sworn two affidavits that were read in the proceedings by the Defendant.
Joseph is a child of the Plaintiff and his first wife, Julie-Ann Darhy. He was born in 9 September 1975 and is currently 37 years of age. He, too, has sworn two affidavits that were read in the proceedings by the Defendant. (The Plaintiff is said to have another son, Robert, but he has played no part in the proceedings.)
In her Will, the deceased declared that any one, or two, of the four grandchildren could purchase the home at Helensburgh for three-quarters of the market value.
There is no residuary clause in the deceased's Will. Accordingly, the parties agree that, in the event that half of the WBC shares are the property of the estate, the Plaintiff and Susanna, as the only children of the deceased, will be entitled to one half each of those shares.
The Plaintiff was not mentioned in the Will of the deceased.
Joseph, however, refers to a conversation that he had with the deceased, in about 1991 or 1992, in which she referred to her and her husband's Wills. The deceased gave him an envelope marked "Wills" and the name of each grandparent. She said:
"Keep this. This is our Will. We have left everything to the grandchildren. ... We want to give the grandchildren a start in life. Our children have had enough from us. They have their own houses. They are okay. They can look after themselves."
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 $501,036. The estate was said to consist of the real estate at Helensburgh (the deceased's home) ($500,000), money on deposit ($30), and 2 mobility scooters (1,000). (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 below.)
There was no reference to "the mobile and/or other personal goods contained" in the deceased's home at the date of her death in the Inventory of Property. Susanna asserts that they were of little commercial value, although the Plaintiff suggests that they may be worth about $20,000. There is no suggestion, however, that the bequest of these personal items to Susanna should bear part of the burden of the provision that he seeks. Accordingly, the issue of the true value of these is irrelevant since Susanna is not, otherwise, a beneficiary named in the Will of the deceased, and because she has not made a claim for a family provision order.
Susanna states that as the motorised scooters are bequeathed to her, she is content for them to be given to the Plaintiff.
Although there were no liabilities disclosed in the Inventory of Property, in an affidavit, sworn 18 March 2011, and filed with the application for Probate, the Defendant disclosed that the liabilities of the estate, as then known to him, totalled $16,366.
The WBC shares were not referred to in the Inventory of Property as jointly held property, as the Defendant did not know of the deceased's interest, if any, in them, prior to her death. However, on 29 February 2012, the Plaintiff informed him that the WBC shares were held in the name of the deceased and the Plaintiff. It was this information that, ultimately, prompted the Defendant's claim to the estate holding an interest in the shares.
None of the deceased's grandchildren wished to purchase the Helensburgh property, and the Defendant sold it, by auction, in February 2012, for the price of $485,000. The net proceeds of sale, after deducting the costs of sale, were $475,383.
Following the sale of the Helensburgh property, the Defendant paid the deceased's debts ($633), reimbursed Susanna for funeral, and other, expenses that she had paid ($13,554), paid the legal costs of obtaining probate ($3,283), reimbursed monies paid by him to maintain the Helensburgh property prior to settlement ($4,334), paid and distributed part of the Defendant's costs and disbursements in administering the estate and otherwise maintaining the Helensburgh property ($18,770) and part of the costs of defending the proceedings ($51,607) to his solicitors (the firm in which he is a partner).
The parties agreed that, at the date of hearing, the deceased's estate consisted of the balance of the net proceeds of sale of the Helensburgh property ($394,821), and the two motorised scooters ($1,000).
The Defendant asserts that the anticipated future liabilities of the estate (other than the costs of the proceedings) are accountancy fees ($5,000) and tax ($1,000). It follows, if one excludes the value of 1,610 shares and the two motorised scooters, and if one does not take into account costs of the proceedings (to which I shall refer), the net value of the estate is $388,821.
The parties agree that each WBC share has a current value (as at 15 March 2013) of $30.89. Accordingly, the value of 1,610 shares was then $49,733. If those shares form part of the estate, the net value of the estate (excluding costs of the proceedings) is $438,554 (excluding the value of the scooters).
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 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 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 indemnity basis, to be about $91,302 (inclusive of GST and upon the basis of a two day hearing). He estimated those costs and disbursements, calculated on the ordinary basis to be $70,000.
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 $104,000 (inclusive of GST and upon the basis of a two day hearing). Bearing in mind the amount already paid to the Defendant's solicitors, the balance payable for the Defendant's costs and disbursements is $52,393.
That in an estate with a gross value of less than $500,000 and a case that is not complex, the estimated costs of the parties is almost $200,000, seems to demonstrate that the parties and/or their legal advisers have failed to consider, or if considered, have ignored, the principle of proportionality referred to in Practice Note SC Eq. 7. Why the costs of each of the parties are so high has not been explained. It may be explained when costs are determined so I shall say no more about that now.
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.
At the conclusion of the 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 are likely to 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.
The persons who are, or who may be, eligible persons, within the meaning of the Act, are the Plaintiff and Susanna. The Defendant gives evidence that Susanna was informed of the commencement of the Plaintiff's proceedings and of the prescribed period for bringing a claim under the Act, in a letter dated 19 October 2011. She obtained independent advice about her rights to make a claim for provision. In any event, she has sworn two affidavits that were read in the proceedings.
There is no evidence that any of the named grandchildren is an eligible person, although each, of course, is a beneficiary. (The parties accept that the grandchildren are not eligible persons.)
The Act (as will be seen) provides that since the other eligible person, Susanna, has not commenced proceedings, the Court may disregard her interests as a person in respect of whom an application for a family provision order may be made. However, the Court is not permitted to disregard her interest, or that of each of the grandchildren, as a beneficiary named in the Will of the deceased.
Only the Plaintiff was cross-examined at the hearing. With the exception of one affidavit, there were no objections taken to any of the affidavits that were read in the proceedings, with the result that the proceedings were concluded within one day rather than two days. Hopefully, there will be a reduction of costs and disbursements that flow as a result.
The WBC Shares
There is no dispute that the Plaintiff owns at least 1,610 WBC shares with a value at the date of hearing of $49,733. His evidence is that he also owns the additional WBC shares (1,610 shares) because he subscribed to, or acquired, the shares without any financial contribution from the deceased.
The facts giving rise to the acquisition of the WBC shares were set out by the Plaintiff in an affidavit as follows:
"I deposited monies which were mine to this [a savings] account. In about 1992, St. George Building Society Limited became a bank and the members were given the right to subscribe for shares in the capital of the company. I subscribed for a number and although I do not recall how many I believe it was most likely about 1500. I asked for these shares to be placed in the name of my mother and I because at that time although I was living with my current de facto wife, I was conscious of the possibility of distribution of my assets upon my death or in the event that my de facto partnership did not work out. I believed that if I placed these shares in the name of my mother and myself in the event that anything happened to me the shares would be transmitted to my mothers name, and if she passed away they would be transmitted to my name.
In about 2008 St. George Bank Limited merged with Westpac Banking Corporation pursuant to a scheme of arrangement. The shares which I held in St. George Bank Limited subsequently were acquired by Westpac Banking Corporation and I was allotted shared in the capital of Westpac in lieu of my shares in St. George Bank Limited.
Over the years since I first acquired the shares in St. George Bank Limited I was enrolled in the shareholders dividend reinvestment plan when it was offered and at times when that scheme was not in place I banked the dividends to my own account. At no time did I offer the dividends to my mother."
The Plaintiff was cross-examined on what he had written. He confirmed that he did not inform the deceased of any interest that she might have in any of the shares and the Defendant accepted that the deceased did not know about the shares prior to her death.
Nor is there any evidence that the Plaintiff informed anyone else of the fact that the deceased was to be, or was, shown as a joint holder of the WBC shares. Finally, there is no suggestion that the deceased made any financial contribution to the purchase price of those shares. (The Plaintiff also says that he paid $1.50 per share.)
The Plaintiff's evidence in cross-examination was that he did not intend, at any time, to gift to the deceased any of the shares that were held in their joint names.
The prima facie position is that the beneficial ownership of property is commensurate with the legal title: Currie v Hamilton (1984) 1 NSWLR 687, 690. However, that prima facie position is displaced by the presumption of, inter alia, a resulting trust arising from payment of the purchase price of the property (sometimes called "a purchase money resulting trust"), unless that presumption is in turn rebutted by a presumption of advancement, or by evidence: Martin v Martin [1959] HCA 62; (1959) 110 CLR 297; Calverley v Green [1984] HCA 81; (1984) 155 CLR 242.
Here there is no evidence to rebut the evidence of the Plaintiff that he paid the whole of the purchase price of the WBC shares and that he did not intend to gift any interest in those shares to the deceased, even though she was shown to be a joint owner of the shares that were purchased. There is no relationship between the Plaintiff and the deceased that would make consideration of the presumption of advancement relevant in the present case.
I am satisfied that the Plaintiff did not intend to give any beneficial interest in the shares to the deceased, even though he nominated her as a joint holder, with him, of those shares. Accordingly, I am satisfied that the deceased, and now her estate, should not be regarded as having any beneficial interest in the WBC shares.
Thus, the Plaintiff is entitled to a declaration that the shares do not form part of the property in the estate of the deceased. It follows that the Plaintiff should be declared to be the beneficial owner of the 3,219 WBC shares and that the Cross-Summons should be dismissed.
How, if at all, these conclusions will impact upon the issue of costs will be determined at a later date.
The Statutory Scheme - The Act
Next, I shall discuss the statutory scheme that is relevant to the facts of the present case. 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 to which I have referred. It is important that the parties 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.
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. 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 an applicant is an eligible person within the meaning of s 57(1) (s 59(1)(a)). 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. Each is a category limited to a family member or to a person with a particular status, or relationship, to the deceased.
Relevantly, in this case, the Plaintiff relies upon the category of eligibility referred to in s 57(1)(c) of the Act, namely that he is a child of the deceased.
Inadequacy of Provision
Then, if eligibility is established, 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 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)). In this way, it has been said that the court carries out a two-stage process.
Allsop P in Andrew v Andrew [2012] NSWCA 308, has recently 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 in Andrew v Andrew, 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 said:
"82 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.
83 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.
84 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.
85 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.
86 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 by the operation of the intestacy rules in relation to the estate of the deceased, or both, s 59(1)(c) leaves undefined the norm by which the court must determine whether the provision, if any, made is inadequate for the applicant's proper maintenance, education or 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.
It was said in the Court of Appeal (per 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".
Under s 59(1)(c) of the Act, the time at which the court gives its consideration to the question is the time when the court is considering the application. Under s 59(2), the court has regard to the facts known to the court at the time the order is made.
"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 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 or advancement in life: Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127 at [72] and at [77], per Buss JA.
Each of the words was 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) 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 in 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) 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 used 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 those questions can be answered.
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.
It is an element in determining whether "adequate" provision has been made for the "proper" maintenance, education or advancement in life of the applicant in all of the circumstances to be considered: Collins v McGain [2003] NSWCA 190 (Tobias JA, with whom Beazley and Hodgson JJA agreed). Whether the applicant has a "need" or "needs" is a relevant factor at the first stage of the enquiry.
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 at 231, 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. it is satisfied that the applicant is an eligible person, and, where necessary, that factors warranting have been satisfied, and that adequate provision for the proper maintenance, education or advancement in life of the person has not been made by the will of the deceased and/or by operation of the intestacy rules), 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: s 59(2) and s 60(1)(b).
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.
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 The Queen [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."
I note also that 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."
More recently, Ball J, in Oldereid v Chan [2013] NSWSC 434, after referring to Andrew v Andrew referred to the different approach being adopted by trial Judges. His Honour said:
"52 More recent decisions at first instance have differed on whether the decision in Andrew v Andrew requires the court to apply a two stage process or not. Lindsay J in Verzar v Verzar [2012] NSWSC 1380 thought that a single judge of the court is bound "to regard the two-stage decision-making process identified in Singer v Berghouse ... as superseded by enactment of ss 59-60 of the Succession Act" (at [92]). Hallen J, on the other hand, has continued to apply the two stage test: see Goldsmith v Goldsmith [2012] NSWSC 1486 at [67]; Nowak v Beska [2013] NSWSC 166 at [113]. A third approach, adopted by Macready AsJ in Morgan v Bohm [2013] NSWSC 145 at [110], is to consider the case on both bases. There are, however, difficulties with that approach. If the two approaches involve real differences, then presumably there are cases where they will produce different results. What, then, is to be done applying both approaches? On the other hand, if the two approaches are bound to produce the same result, the dispute about which test should be applied has no significance.
53 In my opinion, there is clearly a tension between the decisions of the Court of Appeal in Keep v Bourke [2012] NSWCA 64 and Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656 which only the Court of Appeal or High Court can resolve. In the meantime, the duty of a trial judge is to follow the later decision: see Ratcliffe v Watters (1969) 89 WN (NSW) Part 1 497 at 505 per Street J. In Andrew v Andrew, both Allsop P and Basten JA regarded the reformulation of the test in s 59 of the Succession Act as changing, perhaps only subtly, the threshold that must be satisfied before an order can be made. Basten JA regarded that change as also changing the way in which the court should approach the question. Allsop P regarded it as an analytical question of little consequence. However it is analysed, though, it is clear from the terms of s 59 that the court must ask itself the question whether it is satisfied that "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". If it is so satisfied, it must consider whether to make an order and, if so, the terms of that order. In undertaking each of those steps, it may have regard to the matters set out in s 60. Whether those steps should be seen as separate stages that must be followed or as convenient steps in undertaking what is required by the legislation does not matter for present purposes."
Ball J did not refer to Szypica v O'Beirne [2013] NSWSC 297, at [31] - [33], in which Stevenson J followed the view that I had expressed.
It seems to me, with great respect to those who disagree, that the amendments introduced by the Act do not require, or justify, a different approach. That approach, adopted in the myriad of cases determined under the Act, including Keep v Bourke [2012] NSWCA 64 (in which Macfarlan JA (except as to amount of provision) and Tobias AJA agreed with Barrett JA), requires a trial Judge to continue to follow the two stage approach in determining cases under the Act, until any uncertainty is resolved. As Ball J repeats, the questions remain essentially the same under the Act, namely whether the Court can make an order for provision (whether it is satisfied that "adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made"), and if so, whether it should do so (whether to make an order and, if so, the nature of that order). As Allsop P said, "it may be an analytical question of little consequence".
Section 60 of the Act, at least in part, is new. It provides:
"(1) The court may have regard to the matters set out in subsection (2) for the purpose of determining:
(a) whether the person in whose favour the order is sought to be made (the "applicant") is an eligible person, and
(b) whether to make a family provision order and the nature of any such order.
(2) The following matters may be considered by the Court:
(a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate,
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate,
(e) if the applicant is cohabiting with another person - the financial circumstances of the other person,
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated,
(g) the age of the applicant when the application is being considered,
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,
(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,
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
(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,
(l) whether any other person is liable to support the applicant,
(m) the character and conduct of the applicant before and after the date of the death of the deceased person,
(n) the conduct of any other person before and after the date of the death of the deceased person,
(o) any relevant Aboriginal or Torres Strait Islander customary law,
(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."
It can be seen that s 60(2) enumerates 15 specific matters, described by Basten JA in Andrew v Andrew at [37] as "a multifactorial list", and by Lindsay J in Verzar v Verzar, at [123], as "a valuable prompt" to which the court may have regard, together with "any other matter the court considers relevant", for the purposes of determining eligibility, whether to make a family provision order and the nature of any such order. The section does not prioritise the catalogue of matters that may be taken into account. No matter is more, or less, important than any other. The weight of such of the matters specified in the section, which may be taken into account, will depend upon the facts of the particular case. There is no mandatory command to take into account any of the matters enumerated. None of the matters listed is, necessarily, of decisive significance and none differentiate, in their application, between classes of eligible person. Similarly, there is no distinction based on gender.
Considering each of the relevant matters does not prescribe a particular result, and whilst there is likely to be a substantial overlap in the matters that the court may take into account when determining the answers to what is posed in s 60(1), those matters are not identical. For example, when considering eligibility under s 60(1)(a), many of the matters in s 60(2) will be largely, if not wholly, irrelevant.
However, the section suggests that the question of eligibility overlaps with the substantive determination, namely, whether to make a family provision order and, if so, the nature of any such order.
There is no definition in the Act of "financial resources" (which term is only referred to in s 60(2)(d)). However, there is a definition of that term in s 3 of the Property (Relationships) Act 1984, which I consider helpful:
"'financial resources' ... includes:
(a) a prospective claim or entitlement in respect of a scheme, fund or arrangement under which superannuation, retirement or similar benefits are provided,
(b) property which, pursuant to the provisions of a discretionary trust, may become vested in or used or applied in or towards the purposes of the parties ...,
(c) property, the alienation or disposition of which is wholly or partly under the control of the parties to the relationship or either of them and which is lawfully capable of being used or applied by or on behalf of the parties to the relationship or either of them in or towards their or his or her own purposes, and
(d) any other valuable benefit."
Of course, s 60(2)(d) refers also to "earning capacity", which means no more than the capacity to find employment to earn or derive income.
Furthermore, consideration of some of the matters in s 60(2) not only permits, but requires, a comparison to be made between the respective positions of the applicant and of other eligible persons as well as of the beneficiaries, whilst others do not. Importantly, also, many of the matters in sub-s (2), of themselves, are incapable of providing an answer to the questions posed in s 60(1).
Leaving aside the question of eligibility, the Court may have regard to the matters referred to in s 60(2) on "the discretionary question", namely whether to make an order and the nature of any such order. Importantly, under s 60(2), attention is drawn to matters that may have existed at the deceased's death, or subsequently.
This does not mean, however, that some of the matters referred to in s 60(2) will not be relevant to the jurisdictional question to be determined at the first stage. I am comforted in reaching this conclusion by the following comments made in Singer v Berghouse (at 209-210):
"... The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant."
And by the comments of Callinan and Heydon JJ in Vigolo v Bostin (at 230-231):
"We do not therefore think that the questions which the Court has to answer in assessing a claim under the Act necessarily always divide neatly into two. Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means, and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors."
As was also pointed out by Barrett JA, in Andrew v Andrew, at [88] - [89]:
"... leaving aside its relevance to the "eligible person" inquiry, the s 60(2) catalogue is directed to the question of what, if any, order for provision should be made and is not, in terms, applied to the initial question of the adequacy of the provision made by the will or the intestacy laws.
It can be said at once that the s 60(1)(b) directive corresponds with that in the former s 9(3) to the extent that it relates to the decision regarding provision to be made. There is no express legislative intention, under either piece of legislation, that the enumerated factors are to be taken into account in deciding the initial question of adequacy of provision. There is accordingly no reason to think that those factors are to be afforded any special relevance in approaching the adequacy question. But they will, at that point, be given, independently of s 60(1)(b), such weight as they deserve in their own right as indicators of the "adequacy" question. As the primary judge recognised at [57], this is consistent with what was said by the High Court in Singer v Berghouse in relation to the former Act."
Section 61 of the Act permits the court to 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. However, the court may disregard any such interests 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.
Section 65(1) of the Act requires the family provision order to specify:
(a) the person or persons for whom provision is to be made, and
(b) the amount and nature of the provision, and
(c) the manner in which the provision is to be provided and the part or parts of the estate out of which it is to be provided, and
(d) any conditions, restrictions or limitations imposed by the court.
The order for provision out of the estate of a deceased person may require the provision to be made in a variety of ways, including a lump sum, periodic sum, or "in any other manner the Court thinks fit" (s 65(2) of the Act). If the provision is made by payment of an amount of money, the order may specify whether interest is payable on the whole, or any part, of the amount payable for the period, and, if so, the period during which interest is payable and the rate of interest (s 65(3) of the Act).
The order may be made, relevantly, in this case, in relation to the estate of the deceased. As the deceased died leaving a Will, her estate includes all property that would, on a grant of probate of the Will, vest in the executor of the Will (s 63 of the Act).
Section 66 of the Act sets out the consequential and ancillary orders that may be made.
Any family provision order under the Act will take effect in this case, unless the court otherwise orders, as if the provision was made in a codicil to the will of the deceased (s 72(1) of the Act).
Section 99 of the Act provides that the Court may order the costs of proceedings in relation to the estate, or notional estate, of the deceased (including costs in connection with mediation) to be paid out of the estate or notional estate, or both, in such manner as the Court thinks fit.
Practice Note No. SC Eq 7, which applies to claims for a family provision order, provides in Paragraph 24, that "[o]rders may be made capping the costs that may be recovered by a party in circumstances including, but not limited to, cases in which the value of the estate is less than $500,000".
Other Applicable Legal Principles - Substantive Application
Accepting that no two cases will be exactly alike, there are some general principles that may be stated. Whilst most of these principles were given in the context of the previous legislation, they remain apt in a claim such as this one.
Bryson J noted in Gorton v Parks (1989) 17 NSWLR 1, at 6, that it is not appropriate, to endeavour to achieve a 'fair' disposition of the deceased's estate. It is not part of the Court's function to achieve some kind of equity between the various claimants. The Court's role is not to reward an applicant, or to distribute the deceased's estate according to notions of fairness or equity. Nor is the purpose of the jurisdiction conferred by the Act the correction of the hurt feelings, or sense of wrong, felt by an applicant. Rather, the Court's role is of a specific type and goes no further than the making of "adequate" provision in all the circumstances for the "proper" maintenance, education or advancement in life of an applicant.
In Cooper v Dungan (1976) 50 ALJR 539, Stephen J, at 542, reminded the Court to be vigilant in guarding "against a natural tendency to reform the testator's will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant". Freedom of testamentary disposition is not to have "only a prima facie effect, the real dispositive power being vested in the court": Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9, at 19.
In Stott v Cook (1960) 33 ALJR 447, Taylor J, although dissenting in his determination of the case, observed, at 453-4, that the Court did not have a mandate to rework a will according to its own notions of fairness. His Honour added:
"There is, in my opinion, no reason for thinking that justice is better served by the application of abstract principles of fairness than by acceptance of the judgment of a competent testator whose knowledge of the virtues and failings of the members of his family equips him for the responsibility of disposing of his estate in far better measure than can be afforded to a Court by a few pages of affidavits sworn after his death and which only too frequently provide but an incomplete and shallow reflection of family relations and characteristics. All this is, of course, subject to the proviso that an order may be made if it appears that the testator has failed to discharge a duty to make provision for the maintenance, education or advancement of his widow or children. But it must appear, firstly, that such a duty existed and, secondly, that it has not been discharged."
Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education or advancement in life of an applicant, is not fixed or static. Rather, it is a flexible concept, the measure of which should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards: Pontifical Society for the Propagation of the Faith v Scales at 19; Walker v Walker (NSWSC, 17 May 1996, unreported); Vigolo v Bostin at 199 and 204; Stern v Sekers; Sekers v Sekers [2010] NSWSC 59.
In all cases under the Act, what is adequate and proper provision is necessarily fact specific. An inflexible approach cannot be taken in assessing the questions to be answered.
The Act is not a "Destitute Persons Act", and it is not necessary, therefore, that the applicant should be destitute to succeed in obtaining an order: In re Allardice, Allardice v Allardice (1909) 29 NZLR 959 at 966.
Where the Court is satisfied that provision ought to be made, then it is no answer to a claim for provision under the Act that to make an order would be to defeat the intentions of the deceased identified in the Will. The Act requires, in such circumstances, for the deceased's intention in the Will to be displaced: Kembrey v Cuskelly [2008] NSWSC 262 at [45].
An important consideration is whether, in all the circumstances, the community expectation would be for greater benefaction to have been made for the proper or adequate maintenance or advancement in life of the person seeking provision. Gleeson CJ observed in Vigolo v Bostin, at 199, that the justification for interference with freedom of testation is to be found in the failure of a deceased to meet the obligations, which the community would expect in terms of such maintenance, for those persons within the class of eligible persons.
As Allsop P said in Andrew v Andrew:
"12 Accepted and acceptable social and community values permeate or underpin many, if not most, of the individual factors in s 60(2) and are embedded in the words of s 59, in particular "proper" and "ought". That such values may be contestable from time to time in the assessment of an individual circumstance, or that they may change over time as society changes and grows can be readily accepted. Customary morality develops "silently and unconsciously from one age to another", shaping law: Benjamin N Cardozo, The Nature of the Judicial Process (New Haven: Yale University Press, 1921) at 104-5. The relationship between law and morals or morality depends, of course, on the context of the enquiry: see for example R Pound, The History and System of the Common Law (New York: Collier, 1939) at 16-21. As Gleeson CJ said in Vigolo at 204 [25], the language of the statute is "general but value-laden", operating in connection with "community standards" that will see it given "practical meaning", that is, to the people and community who and which the law serves.
...
16. If I may respectfully paraphrase Sheller JA [in Permanent Trustee Co Limited v Fraser (1995) 36 NSWLR 24 at 46F-47B], the Court in assessing the matter at s 59(1) and the order that should be made under s 59(1) and (2), should be guided and assisted by considering what provision, in accordance with prevailing community standards of what is right and appropriate, ought to be made. This, Sheller JA said ... involved speaking for the feeling and judgment of fair and reasonable members of the community. It is to be emphasised that s 59(1)(c) and s 59(2) refer to the time when the Court is considering [an application for a family provision order] and the facts then known to the Court. The evaluative assessment is to be undertaken assuming full knowledge and appreciation of all the circumstances of the case. This ... makes the notion of compliance by the testator with a moral duty (on what he or she knew) apt to distract from the statutory task of the Court."
Barrett JA said:
"95...It has been recognised by this Court that "community expectations" play a role in the decision whether provision made by a testator is adequate in the relevant sense. Reference may be made to Hertzberg v Hertzberg [2003] NSWCA 311 at [34], McCarthy v McCarthy [2010] NSWCA 103 at [20] and Evans v Levy [2011] NSWCA 125 at [51]. In the McCarthy case, Young JA said (with the concurrence of Tobias and Macfarlan JJA):
"So long as he complies with community expectations and what is sometimes called 'moral duty', the deceased is able to leave his property as he wishes."
96 In Evans v Levy, the same judge said (with the concurrence of Campbell JA and Sackville AJA):
"It was open to the primary judge to form a judgment that the nature of the continuing relationship was not such that it created a moral duty on the deceased to provide for the appellant or that the community would have expected him to do so."
97 Particularly since the decision of the High Court in Vigolo v Bostin (above), however, concepts of "moral duty" must be approached with considerable care: see Lloyd-Williams v Mayfield [2005] NSWCA 189; (2005) 63 NSWLR 1 at [25]. But the clear need for the court, in addressing the first-stage question, to recognise community expectations is undiminished. The task is to make a determination "according to the feeling and judgment of the fair and reasonable man in the community, the spokesman of which is and must be the court itself": Kearns v Ellis (unreported, NSWCA, 5 December 1984, BC8400149 at 8 per Mahoney JA)."
In relation to a claim by an adult child, the following principles are useful to remember:
(a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.
(b) It is impossible to describe in terms of universal application, the obligation, responsibility, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise and educate their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; and, where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his, or her, children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801.
(c) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death if he or she is able to do so. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute: Taylor v Farrugia.
(d) If the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant: Re Buckland Deceased [1966] VR 404 at 411; Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 148; Goodman v Windeyer at 498, 505. But the Act does not permit orders to be made to provide for the support of third persons to whom the applicant, however reasonably, wishes to support, where there is no obligation to support such persons: Re Buckland Deceased at 411; Kleinig v Neal (No 2) at 537; Mayfield v Lloyd-Williams, at [86].
(e) There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker;Kleinig v Neal (No 2) [1981] NSWLR 532 at 545; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45.
(f) The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 at [179], [182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant: Marks v Marks [2003] WASCA 297, at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 at [17].
(g) The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd at 149.
(h) Although some may hold the view that equality between children requires that "adequate provision" not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration, individual conduct, circumstances, financial resources (including earning capacity), and financial needs, in the Court's determination of an applicant's case.
In Blore v Lang (1960) 104 CLR 124, Fullagar and Menzies JJ said, at 135:
"The ... legislation [is] for remedying, within such limits as a wide discretion would set, breaches of a testator's moral duty to make adequate provision for the proper maintenance of his family - not for the making of ... a fair distribution of ... [the] estate ... Equality is not something to be achieved by the application of the Act, although in some cases equality may set a limit to the order to be made - for instance, where there is not enough to provide proper maintenance for all entitled to consideration whose need is the same."
Pension Entitlement
Because the Plaintiff is, and has been, receiving a pension for many years, it is necessary to consider its relevance in a claim for a family provision order.
In Taylor v Farrugia Brereton J said, at [59]:
"The Court's attitude to the eligibility for means tested pension benefits of eligible persons and beneficiaries varies, depending on the circumstances of the case. Ordinarily, a testator makes a will and provides for those who have a claim on the testator without regard to the claimant's eligibility for a pension. However, in a small estate where there are competing claims, a testator, and this Court on an application under the Act, may take into account the eligibility of a claimant for a pension as a means of deciding how such limited benefits as are available from the estate should be shared between claimants, and how those benefits might be structured. But this qualification to the principle that the burden of support should be borne in the first instance by an estate rather than by social security arises mainly, if not exclusively in smaller estates [Parker v Public Trustee (1988) NSWSC, Young J, 31 May 1998; Whitmont v Lloyd (New South Wales Supreme Court, 31 July 1995, Bryson J, unreported); King v Foster (Court of Appeal, 7 December 1995, unreported) King v White [1992] 2 VR 417, 424; Shah v Perpetual Trustee Company [1981] 7 Fam LR 97 100; Gunawardena v Kanagaratnam Sri Kantha [2007] NSWSC 151; Chan v Tsui [2005] NSWSC 82]."
An earlier authority, with which I respectfully also agree, is Thom v The Public Trustee (NSWSC, 2 April 1992, unreported), in which Master McLaughlin (as his Honour then was) said, at 10-11:
"It seems to me that it would be totally unrealistic for the Court to approach the moral obligation of the deceased to make provision for the applicant by disregarding the fact that for a period of 20 years before the deceased's death, the applicant was in receipt of a pension from the State, and the fact that, to the extent of that pension, the deceased was relieved of the necessity to support the applicant from his own funds. That being so, I do not see how, upon the death of the deceased, the moral obligation upon the deceased to make provision for the applicant by will, could be approached without recognising the fact that the applicant would be entitled to continue to receive such a pension."
Thus, the availability of a pension provided to an applicant ought not be regarded as a substitute for the obligation on the deceased to make adequate provision for him or her. Yet, it is not necessary to make an order that would operate primarily in relief of the taxpayer.
In this case, it has been submitted that the availability of the pension, and associated social benefits, is a circumstance to which the Court should have regard particularly in circumstances where the Plaintiff may require care and treatment in the future. As was stated in Evans v Levy, at [55] by Young JA:
"... there are, for most pensioners, side benefits of considerable value in merely having a part pension, such as the right which becomes more and more valuable as one gets older to have medical services provided at considerable concessional rates."
I have followed these decisions in Butler v Morris; Butler (bht NSW Trustee & Guardian) v Morris [2012] NSWSC 748; Curran v Harvey (estate of the late Donald Leslie Julian) [2012] NSWSC 276; and in Smith v Smith [2011] NSWSC 938.
I make it clear that I do not intend what I have described as "legal principles" or "statements in other cases" to be elevated into rules of law. Nor should the discretion given to the court be constrained by statements of principle found in dicta in decisions on similar facts. I identify them merely as providing useful assistance in considering the statutory provisions, the terms of which must remain firmly in mind.
As Lindsay J said in Verzar v Verzar, at [131]:
"Whatever guidance one might draw from analogous cases all analogies, and any guidelines drawn from a pattern of similar cases, must yield to the text of the legislation, the duty of the Court to apply that text to the particular circumstances, and the totality of material circumstances, of each case. Preconceptions and predispositions, comforting though they may be, can be the source of inadequate consideration of the jurisdiction to be exercised: Bladwell v Davis [2004] NSWCA 170 at [12] and [18]-[19]."
Further Additional Facts
I set out the additional facts that I am satisfied are either not in dispute, or that, in my view, have been established by the evidence. Where necessary, I shall express the conclusions to which I have come in respect of that evidence. I do so by reference to s 60(2) of the Act not "to dwell on particular matters as if they were, in themselves, determinant of the broad judgments required to be made under s 59" (Verzar v Verzar, at [124]), but in order to complete the recitation of facts that enable me to determine the questions that must be answered under the Act.
(a) any family, or other, relationship between the applicant and the deceased person, including the nature and duration of the relationship
The Plaintiff lived with his parents from his birth until about 1974. About three months after the marriage to his first wife, he moved into rented accommodation in Bondi until they purchased a property, also in Bondi.
Following the breakdown of his first marriage in or about 1980, the Plaintiff returned to live with his parents, in a property they had purchased in Botany. He lived with them for about 12 months. He paid board of $100 per week.
Thereafter, he did not live with his parents, or following the death of his father, with the deceased.
The Plaintiff seems to have been a generally loving and caring son. The Defendant conceded this during submissions.
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate
There is no definition of the "obligations" or "responsibilities" to which the sub-section in the Act refers. One might conclude, however, that what is to be considered is the nature and extent of any legal, or moral, obligations or responsibilities owed to the applicant by the deceased.
An obligation or responsibility, to make adequate provision for the proper maintenance, education or advancement in life is recognised in the case of a child. In Flathaug v Weaver [2003] NZFLR 730 at 737, the origin of the obligation which underpins the Act's recognition of the duty owed by a parent to a child was put in this way:
"The relationship of parent and child has primacy in our society. The moral obligation which attaches to it is embedded in our value system and underpinned by the law. The Family Protection Act recognises that a parent's obligation to provide for both the emotional and material needs of his or her children is an ongoing one. Though founded on natural or assumed parenthood, it is, however, an obligation which is largely defined by the relationship which exists between parent and child during their joint lives."
To the extent that there is any obligation, or responsibility, arising as a result of their relationship as grandparent and grandchild, the deceased did not have any legal, or financial, obligation to any of her grandchildren imposed upon her by statute or common law. There is no suggestion that she assumed any particular obligation, and responsibility, towards any of them.
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered
I have dealt with the nature and extent of the estate. It is a very small estate before or after one deducts what has already been paid to the Defendant's solicitors.
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate
There was some criticism of the Plaintiff in failing to comply with a notice to produce served upon him, by his solicitors, a short time before the hearing. For example, no bank records were produced; nor were any income tax returns.
The Defendant placed reliance upon the principle that the "non-production of evidence that would naturally have been produced by an honest and, therefore, fearless, claimant permits the inference that its tenor is unfavourable to the party's cause": Wigmore on Evidence at 162-171, paras 285-288; see also Tobin v Ezekiel [2012] NSWCA 285, at [100].
I remember also what was said in Nicholls v Hall [2007] NSWCA 356 (Mason P, Hodgson and McColl JJA) in relation to the evidence of an appellant whose claim to an order for provision had been dismissed:
"[36] ... The appellant's evidence about his financial situation was imprecise and in some respects inaccurate; and even accepting that this was inadvertence rather than any attempt to withhold information from the Court, it was a matter properly for comment and a matter to be taken into account in reaching a conclusion as to the true financial situation of the appellant. Where a person in the position of the appellant has not led satisfactory evidence about his financial situation, the Court cannot resolve any uncertainty left by that situation in favour of the person who has failed to give the satisfactory evidence. That, in our opinion, was the approach correctly taken by the primary judge."
However, no contrary evidence was produced by the Defendant, and put to the Plaintiff, that leads to the conclusion that he (or his de facto partner) has more assets than he disclosed.
The Plaintiff's current financial resources are:
Assets
(a)
Sole registered proprietor of real estate in St Peters
$500,000 - $550,000
(b)
Joint registered proprietor of real estate in Queensland
$110,000 -$115,000
(c)
W WBC Shares
$ $ 99,466
(d)
Mobility scooter
$ $ 2,300
(e)
Car
$ 2,000
(f)
Household contents
$ 1,500
Liabilities
(a)
Nil
The Plaintiff's de facto wife, Julia Santa, is a joint owner of the Queensland property. Apart from household contents of small value, her only other property is money in a bank account ($5,000).
Although the Plaintiff had previously disclosed money in a bank account, he said that he paid the amount that he had to his solicitors on account of costs of these proceedings. From the bar Table, his counsel confirmed that the Plaintiff had paid about $14,500 on account of costs and disbursements. (It is unlikely that he will recover any of this amount, even if he obtains costs in his favour, because of the difference between his costs calculated on the indemnity basis and those costs calculated on the ordinary basis.)
There was no dispute that he has no earning capacity.
The Plaintiff's monthly income consists of a pension ($1,172) and his share of rental income ($340), making a total of $1,512. His de facto partner's income is about the same, with the result that their combined total monthly income is $3,024.
The Plaintiff gives evidence that his total monthly expenditure is $766, whilst that of his de facto partner is $1,266, with the result that their total monthly expenditure is $2,032. It follows, that the monthly surplus of income over expenditure is $992. What he does with the surplus income is not disclosed in the evidence.
The Plaintiff has been on a number of holidays since about 2004, including to Europe (in 2004 and again in 2005), an African cruise (in 2006 and again in 2010), to Vietnam (in about 2007 and again in 2009).
The Plaintiff sets out his needs in his affidavits. He says that he would prefer to live in a house in the future, either the house in St Peters "with suitable changes ... to accommodate my disabilities" or "a more comfortable detached house suitable for a person with my limitations". He says that he requires, at least, two-bedroom accommodation, because he is unable to sleep in the same bedroom as his de facto partner, as he has a machine to assist him to sleep due to his sleep apnoea.
The Plaintiff called evidence from an architect, Paul Sinclaire Dunn, who had been instructed "to prepare a report...advising on the likely cost of bringing the plaintiff's home up to the standard required in light of the plaintiff's and his wife's health conditions". A copy of that report, as well as "an estimate sheet outlining the construction costs per square metre" forms part of his affidavit, which was read in the proceedings. He concluded that "to maintain the existing building the work required to be done and the approximate cost to upgrade the residence would be" $148,350. In the alternative, Mr Architect Dunn stated that "it may be more economic to demolish the existing house and build a new three bedroom house complying with the standards" at a total cost of $239,600.
Mr Architect Dunn was not cross-examined. However, senior counsel for the Plaintiff conceded that the Plaintiff's claim was not for a capital sum to enable all of the maintenance and upgrading to be carried out.
The Plaintiff says he requires a new car because of the age and condition of his current car. He estimates the cost of the car to be between $40,000 and $50,000.
The Plaintiff also says that due to his and his de-facto wife's medical condition, they are in need of domestic assistance and personal respite care on a daily basis. He says that the assistance currently received from Human Services Ageing Disability and Home Care (1.5 hours per fortnight at a cost of $10 per hour) is insufficient and that they need one hour of domestic assistance and two hours of personal respite care per day at an estimated cost of $900 per week.
In submissions, senior counsel for the Plaintiff submitted that the Plaintiff should receive a lump sum calculated as one half of the net value of the estate. Of course, it is realised that such a lump sum will not meet all of the needs of the Plaintiff of which evidence has been given.
Each of the beneficiaries sets out his and her financial and material circumstances respectively.
Susanna is 67 years of age and is married. She and her husband are retired. They both receive a pension. They own a property at Glenmore Park, household contents, a car, a camper van, and have moneys in a joint bank account. They have lent money to their daughter, Gabriella, and their son, Richard. Their assets have a total value of about $863,500. They intend to carry out work to the Glenmore Park property.
Gabriella is 38 years of age and is a widow. Her husband committed suicide in September 2010. She has two dependant children, Jayde, aged 19, and Taryn, aged 18. Gabriella had a close relationship with both of her maternal grand parents. She has the following assets:
(a) Real estate at Glenmore Park, which is now unencumbered, with a value of $430,000;
(b) Vacant land at Glenmore Park, ("Ridge") which she purchased in her sole name in 2012 for $265,000. She funded the acquisition of the Ridge exclusively by mortgage with the Bank of Queensland;
(c) Cars ($13,700 and $9,000 respectively);
(d) Another car, registered in her name, but driven by Taryn ($7,300);
(e) A "tinny" and trailer ($2,000);
(f) Superannuation ($5,000);
(g) Bank of Queensland ("BOQ") offset account into which she deposited the monies loaned to her by her mother ($38,000).
The total gross value of Gabriella's assets is $755,000.
She has the following liabilities:
(a) A mortgage in favour of the BOQ secured against the Ridge, with the Glenmore Park property held as collateral security ($266,700);
(b) A personal loan from her mother in early 2010 applied towards legal costs and searches for the prospective purchase of a property at auction, which did not proceed. She applied the remainder for her maintenance throughout 2010. She considers herself liable to repay this sum ($10,000);
(c) A personal loan from her mother used as part of the construction of a dwelling on the Ridge ($45,000);
(d) Another personal loan from her mother to pay for her husband's funeral ($7,300).
The total value of Gabriella's liabilities is $329,000. Accordingly, the net value of Gabriella's assets is $426,000.
Gabriella receives a weekly income of $597, made up of her deceased husband's military super pension/annuity. She has weekly expenses of $1,300 per week. She intends to sell the Glenmore Park property when the dwelling on the Ridge is at lock up stage and she can move in.
Richard is single. He lives with his parents. He previously worked as a packer but injured his back in 2012. He has not been in paid employment since that time. He has a motorbike worth $3,500 and liabilities consisting of loans from his mother totalling $29,000.
Joseph is single. He is employed as an electrical engineer. He works in Western Australia and earns $224,000 per annum. His contract expires in about mid 2014. He has assets consisting of a home unit at Roselands ($300,000) subject to a mortgage of about $240,000. He also has a property at West Wollongong ($473,000) subject to a mortgage of $387,000. He has superannuation ($59,300) and savings of about $68,500. He also owns the contents of the properties (of nominal value).
Therese is 28 years of age and lives with her de facto husband, Frank Seden. They have two children, Isaac, aged 5, and Rhyse, aged 3. She and her family reside in Hume Community Housing, by arrangement with NSW Department of Housing. They have no assets of any commercial significance. They have liabilities of $12,730.
Therese looks after the children full time. Frank is currently unemployed. Their sole income comes from Centrelink. Therese receives $821 per fortnight and Frank receives $444. As a family, they receive an additional $141 per fortnight by way of rent assistance. Their entire income is consumed on outgoings.
Nigel gave no evidence of his financial resources. (He lives in Perth.)
(e) if the applicant is cohabiting with another person - the financial circumstances of the other person
The Plaintiff lives with his de facto wife. They have lived together since about 1988. I have dealt with her financial circumstances earlier.
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated
The Plaintiff says that his state of health is not good. He suffered acute and chronic renal failure. He has been diagnosed with secondary emphysema, sleep apnoea, type II diabetes, anaemia, peripheral vascular disease. paroxysmal atrial tachycardia/ fibrillation, obesity, right heart failure with chronic leg oedema, asthma, hyperuricemia/ gout, and gastro oesophageal reflux disease. He has high cholesterol, high blood sugar levels and high blood pressure. He says that he has permanent restricted mobility. He attends his doctor once every three weeks and spends approximately $50 per week on medication. He does not have any health insurance.
(He gives evidence of the state of heath of his de facto wife saying that her health is poor also.)
There is no evidence of each of the beneficiary's current health, other than of Theresa. She says that she suffers from depression and asthma.
(g) the age of the applicant when the application is being considered
The Plaintiff is currently aged 65 years, having been born in August 1947.
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant
The contribution made by an applicant to the estate of the deceased has long been regarded as a significant factor. In Goodman v Windeyer, Gibbs J said, at 497 - 498:
"One of the circumstances that must be considered in deciding upon the deserts of a claimant to a testator's estate, and in determining whether proper maintenance has been provided, is the manner in which that claimant has conducted himself or herself in relation to the testator. If the claimant has contributed to building up the testator's estate, or has helped him in other ways, that may give the claimant a special claim on the testator's bounty. This was recognized by Dixon C.J. in Coates v National Trustees Executors & Agency Co. Ltd when he said that the natural claims of a son upon his mother's testamentary bounty were "much strengthened by his cooperation and support in the conduct of her business and of her affairs". Perhaps the most recent example in this Court of a case in which a son's claims have been strengthened for this reason is Hughes v National Trustees Executors & Agency Co. (Australasia) Ltd. There is, however, no reason in principle why a son should stand in a special position in this regard, and the authorities here consistently treated the fact that a claimant has rendered services to the testator as relevant in cases of this kind - whether the claimant be a daughter (Blore v Lang), a widow (E. v E, discussed in In re Worms; Worms v Campbell) or a widower (In re McElroy). The claimant's conduct does not cease to be relevant if it has not been of financial benefit to the testator - if, for example, the labour has been in vain. If the claimant has made sacrifices on the testator's behalf, that is a circumstance to be considered even if no monetary saving or benefit for the testator resulted. Indeed, the very fact that a claimant has been a dutiful and devoted spouse or child is one of the relevant circumstances of the case to be considered together with all the other circumstances in deciding whether proper maintenance has been provided."
The Plaintiff does not suggest that he made any direct financial contribution to the acquisition of the Helensburgh property, which his parents purchased, in about 1985, for about $80,000. However, he does say that whilst he was living with his parents in a property they purchased in Bondi Junction, he contributed half of his wage "to our collective living expenses". He also says that he assisted them to move from the Botany property to the Helensburgh property.
He also asserts that when the factory from which the family business was operated, was sold, he permitted his father to retain the proceeds of sale of the plant and equipment (about $90,000).
The Plaintiff says that he assisted his father with building a garage door for, and digging out the basement of, the Helensburgh property. He says that he carried out all of the mechanical and electrical work and installed all the new products that were purchased, including a large and small television, a new stove and washing machine, and two new air-conditioning units. (Susanna asserts that although the Plaintiff might have initially paid for these items, the deceased reimbursed him.)
He says following the Helensburgh property being damaged by bushfires (in 2001 or 2003), he assisted his parents in the cleanup and restoration of the property, including purchasing for them, and installing, a new hot water system. He says that he also liaised with the insurer to claim compensation for the damage caused to the property.
The Plaintiff says that following the hospitalisation of his father in early 2010, he would drive the deceased twice a week to the hospital to visit his father. He says that he would also take her grocery shopping and to any appointments that she had to attend.
The Plaintiff gives evidence also of his contribution to a family business, which he says was conducted by him and his father at a factory he purchased. Upon the sale of the factory, in about 1978, he gave his parents $5,000 "as my parents had assisted me with repayments when I first purchased the ... Factory".
I am satisfied that, for the most part, the Plaintiff did make some contribution towards the welfare of the deceased.
(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 Plaintiff says that the deceased made no provision for him during her lifetime. This is disputed by Susanna who refers to various amounts, which she says the deceased told her she had given the Plaintiff ($2,400 for an eye operation). She refers to Christmas and birthday presents that she and the Plaintiff each received, including on one occasion, a gift of an amount of $1,000. The amounts asserted by her were not very large even if they were made.
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person
While this sub-section permits the Court to accept evidence of the reasons for the provision, or lack of provision, it does not compel the Court to attribute any particular weight to that evidence, or to accept the deceased's statement as establishing the truth of what is asserted.
There was an earlier Will, however, dated 23 February 1989. In that Will, the deceased appointed her husband as sole executor and beneficiary of her whole estate. If he did not survive her, Susanna and the Plaintiff were appointed as executors, Susanna was to receive all mobile personal goods contained in the Helensburgh house, other than those in the basement (and the car) which were to pass to the Plaintiff, and one or either of them could purchase the Helensburgh property from the other for half of its value, and if neither did, then the property was to be sold, with the net proceeds of sale were to be divided between the Plaintiff and Susanna.
I have earlier referred to the conversation between the deceased and Joseph in which she explained the reasons for making her last Will.
(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
There is no evidence that the Plaintiff was being maintained, either wholly or partly, by the deceased for many years before her death.
(l) whether any other person is liable to support the applicant
There is no other person with a liability to support the Plaintiff, other than, perhaps, his de facto wife. However, she, too, receives a pension.
(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 the Plaintiff and the deceased earlier in these reasons.
There is no suggestion of any conduct of the Plaintiff that is relevant.
(n) the conduct of any other person before and after the date of the death of the deceased person
I am satisfied that there is nothing in the conduct of any of the beneficiaries that is relevant. Each is a chosen object of the deceased's testamentary bounty as a beneficiary named in her Will. Each had a reasonably close relationship with the deceased.
It is not necessary to detail the conduct of the Plaintiff and Susanna towards each other.
(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 no other relevant matters.
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, as a child of the deceased, is an eligible person within the meaning of s 57(1)(c) of the Act.
There is also no dispute that the proceedings were commenced within the time prescribed by the Act.
Thus, I must first consider, whether, at the present time, adequate provision for the proper maintenance, education, or advancement in life, of the Plaintiff has not been made by her Will. It is the Plaintiff who bears the onus of persuading the Court that adequate provision has not been made for him.
The consideration of the question whether adequate provision has been made for the proper maintenance, education and advancement in life of the Plaintiff requires me to have regard to, among other things, his financial position, the size and nature of the deceased's estate, the totality of the relationship between the Plaintiff and the deceased and the circumstances and needs of the other beneficiaries or potential beneficiaries: McCosker v McCosker at 571-572; Singer v Berghouse at 209-210; Vigolo v Bostin at [16], [75], [112]. That consideration is necessary because of the inter-relationship between "adequate" and "proper" as discussed earlier.
In this case, the deceased made no provision for the Plaintiff in her Will, and because I have found that the estate has no interest in the WBC shares, he receives nothing on intestacy. It is clear that he has some "needs". Until she made her last Will, the deceased had made significant provision for the Plaintiff.
However, the Plaintiff, with his de facto partner, has security of accommodation and an investment property. Together, they receive an income that exceeds their outgoings. In addition, as a result of my conclusion regarding the WBC shares, he has shares with a value of almost $100,000. Whilst the Plaintiff has "needs", he could satisfy some of those needs by, for example, selling the shares. I am not satisfied that the deceased had an obligation to ensure that the Plaintiff's home was repaired and renovated as has been suggested it ought to be.
Yet, the Plaintiff's medical condition is such that he has virtually no earning capacity. If he carries out some of the repairs and renovations, which are said to be necessary, and if he were to purchase a car, he will have very little, if anything, available as a lump sum for exigencies of life. The jointly owned investment property provides additional income.
Thus, I am satisfied, in all the circumstances, that adequate provision for the proper maintenance or advancement in life of the Plaintiff has not been made by the Will of the deceased or by operation of the intestacy rules (which is irrelevant in light of my finding in respect of the WBC shares).
I must next consider whether any provision ought to be made for the Plaintiff. I reject the Plaintiff's submission that he should receive an amount that would enable him to move to another home or carry out all of the renovations and repairs about which evidence was given. A parent with an estate of this value, does not have an obligation to fund renovations and rebuilding or to protect, completely, her adult child's assets so that he does not have to convert, and spend, some of the proceeds of sale of those assets to meet such needs.
In my view, the deceased should have provided the Plaintiff with a modest lump sum to provide for some of the needs of which he has given evidence. In my view, a lump sum of $55,000, out of the estate of the deceased, would provide adequate provision. He could retain this fund as a cash sum, if he wishes to do so, thereby increasing his available income, or he could use it to purchase a car (with something left over) or carry out the most pressing of the repairs and renovations that are considered necessary on his home to make it more comfortable.
I have, of course, considered the competing needs of each of the grandchildren. In my view, a lump sum of $55,000, divided between the four residuary beneficiaries will not significantly affect each.
I have not made an order regarding the transfer of the motor scooters because such an order is unnecessary since Susanna has said that she is prepared for the Plaintiff to have them.
It follows that the following orders and declaration should be made:
(i) Declare that the 3,219 ordinary shares in Westpac Banking Corporation, held in the names of the Plaintiff and the deceased, at the date of the deceased's death do not form part of the property of the estate and that the Plaintiff is beneficially entitled to all of those shares.
(ii) Having found that the Plaintiff is an eligible person, and that the provision made for him in the Will of the deceased is inadequate for his proper maintenance or advancement in life, order that the Plaintiff receive a lump sum of $55,000 out of the estate of the deceased.
(iii) Order that the burden of the provision made for the Plaintiff should be paid out of the residuary estate.
(iv) Order that no interest is to be paid on the lump sum, if that lump sum is paid within 14 days of the making of these orders; otherwise, interest calculated at the rate prescribed by s 84A(3) 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) Order that the Cross-Claim be dismissed.
(vi) Order that the costs of all parties shall be determined after further submissions, unless agreement is reached between them.
(vii) Order that the Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005 following the determination of the costs of the proceedings.
(viii) Order that the Court Book be returned.
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Decision last updated: 01 May 2013
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