Laidlaw v Kellie; Laidlaw (bht NSW Trustee and Guardian) v Rusiti
[2011] NSWSC 740
•22 July 2011
Supreme Court
New South Wales
Medium Neutral Citation: Laidlaw & Anor v Kellie; Laidlaw (bht NSW Trustee & Guardian) v Rusiti & Ors [2011] NSWSC 740 Hearing dates: 27 June 2011 Decision date: 22 July 2011 Jurisdiction: Equity Division Before: Hallen AsJ Decision: Leave is granted to the Plaintiff, Eliza Laidlaw, to discontinue her proceedings, with no order as to costs.
Having found that each remaining Plaintiff is an eligible person, and in respect of each grandchild, that there are factors warranting the making of the application, and that the provision made for him in the Will of the deceased is inadequate, order that the Plaintiff, Robert, receive a lump sum of $450,000; the Plaintiff, Stephen, receive a lump sum of $275,000; and the Plaintiff, Andrew, receive a lump sum of $275,000, out of the estate of the deceased.
If the parties are unable to reach agreement on the manner in which each of the lump sums is to be paid and the time by which it is to be paid, further short submissions on the manner, and time, for payment may be made.
Interest is to be paid on any lump sum not so paid, such interest to be calculated during the period and at the rate upon which the parties agree, failing such agreement to be determined after further short submissions.
The Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules.
Direct the parties to bring in short minutes that reflect these reasons and any agreement that they are able to reach regarding the manner, and time, of payment, and the period and rate of interest after which final orders may be made.
The proceedings are adjourned to a date to be fixed.
Catchwords: Two different proceedings, originally four claims for a family provision order under Chapter 3 of the NSW Succession Act 2006 - First application made by a son of deceased, and also by two children of the Plaintiff - Second Plaintiff sought leave to discontinue her proceedings - Leave to discontinue granted - Second application made by another child of the Plaintiff - Defendant in each proceedings is one of three executors named in the will, and a daughter, of the deceased - Proceedings continue with 3 other Plaintiffs Legislation Cited: Family Provision Act 1982
NSW Succession Act 2006
Succession Amendment (Family Provision) Act 2008Cases Cited: Anasson v Phillips (NSWSC, 4 March, 1988, unreported)
Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Brown v Faggoter (NSWCA, 13 November 1998, unreported)
Buckland v Trustees Executors and Agency Co. Limited (1966) 40 ALJR 164
Buckland deceased, Re [1966] VR 404
Caska v Caska [1999] NSWSC 289
Churton v Christian (1988) 13 NSWLR 241
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Court v Hunt (NSWSC, 14 September 1987, unreported)
Crisp v Burns Philp Trustee Company Ltd (NSWSC, 18 December 1979, unreported)
Davis v Public Trustee; Kelleners v PublicTrustee [2007] NSWSC 731
Devereaux-Warnes v Hall [No 3] [2007]
WASCA 235; (2007) 35 WAR 127
Diver v Neal [2008] NSWSC 304
Diver v Neal [2009] NSWCA 54
Evans v Levy [2011] NSWCA 125
Foley v Ellis [2008] NSWCA 288
Ford v Simes [2009] NSWCA 351
Fulop Deceased, Re (1987) 8 NSWLR 679
Goodman v Windeyer (1980) 144 CLR 490
Gorton v Parks (1989) 17 NSWLR 1
Hampson v Hampson [2010] NSWCA 359
Hawkins v Prestage (1989) 1 WAR 37
Hunter v Hunter (1987) 8 NSWLR 573
Kleinig v Neal (No 2) [1981] 2 NSWLR 532
Lathwell (Dec'd) v Lathwell [2008] WASCA 256
Lumb v McMillan [2007] NSWSC 386
McCosker v McCosker (1957) 97 CLR 566
MacEwan Shaw v Shaw (2003) 11 VR 95
McGrath v Eves [2005] NSWSC 1006
McKenzie v Topp [2004] VSC 90
Mayfield v Lloyd-Williams [2004] NSWSC 419
Milillo v Konnecke [2009] NSWCA 109
Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361
Pearson v Jones [2000] NSWSC 799
Penfold v Perpetual Trustee [2002] NSWSC 648
Petrohilos v Hunter (1991) 25 NSWLR 343
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9
Porthouse v Bridge [2007] NSWSC 686
Puckridge, Deceased, In the Estate of (1978) 20 SASR 72
Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100
Simons v Permanent Trustee Co Ltd [2005] NSWSC 223
Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Strano v Jovsevski [2008] NSWSC 380
Taylor v Farrugia [2009] NSWSC 801
Tsivinsky v Tsivinsky (NSWCA, 5 December 1991, unreported)
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
Walker v Walker (NSWSC, 17 May 1996, unreported)Texts Cited: Mason and Handler's Succession Law and Practice New South Wales Category: Principal judgment Parties: Robert Laidlaw (first Plaintiff in proceedings 2010/238260)
Eliza Laidlaw (second Plaintiff)
Andrew Laidlaw (third Plaintiff in proceedings 2010/238260)
Sandra Kellie (Defendant in proceedings 2010/238260)
Stephen Scott Laidlaw (bht NSW Trustee & Guardian) (Plaintiff in proceedings 2010/244377)
Shah William Rusiti (first Defendant in proceedings 2010/244377)
Sandra Helen Kellie (second Defendant in proceedings 2010/244377)
Richard John Neal (third Defendant in proceedings 2010/244377)Representation: Mr C Simpson SC
(Plaintiffs in proceedings 2010/238260)
Mr R Wilson
(Plaintiff in proceedings 2010/244377)
Mr A Hill & Ms M Pringle
(Defendant in both proceedings)
Butlers Will Dispute Lawyers
(Plaintiffs in proceedings 2010/238260)
Gordon A Salier
(Defendant in proceedings 2010/238260)
Lee & Lyons
(Plaintiff in proceedings 2010/244377)
File Number(s): 2010/238260; 2010/244377
Judgment
The Applications
HIS HONOUR: These reasons relate to two different proceedings, in which, originally, four claims for a family provision order under Chapter 3 of the NSW Succession Act 2006 ("the Act") were made. The proceedings were heard together, the evidence in one being evidence in the other.
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 deceased, whose estate is the subject of the claims, is Alan Laidlaw ("the deceased").
The first application was made in one Summons filed by Robert Laidlaw, a child of the deceased, and by his children, Eliza Laidlaw and Andrew Laidlaw, the grandchildren of the deceased. Their Summons was filed on 17 July 2010. The second application was made by Stephen Laidlaw, who is also a child of Robert Laidlaw and a grandchild of the deceased. His Summons was filed on 22 July 2010.
The principal Defendant, in each of the proceedings, is Sandra Helen Kellie, one of three executors named in the will, and a daughter of the deceased, the sister of Robert and the aunt of the other Plaintiffs. The two other executors, Richard John Neal and Shah Rusiti, are partners in a firm of solicitors, Teece Hodgson & Ward. They have not participated, although they have been named as Defendants, in the second proceedings. In this way, commendably, the estate has not incurred the costs of their involvement in the proceedings.
At the commencement of the hearing, Mr C Simpson SC, who appeared for the three Plaintiffs in the first proceedings, informed the Court that the claim of Eliza was not proceeding and that leave was sought to discontinue her proceedings. As the costs of the Defendants, in my view, have not been increased by her claim, and as there was no opposition raised to the discontinuance of that claim, I grant that leave to Eliza to discontinue her proceedings and make no order as to her costs.
Without any undue familiarity, or disrespect intended, I shall refer to each of the Plaintiffs and the participating Defendant by his, or her, given name, in these reasons.
Background Facts
The following facts are uncontroversial.
The deceased died on 24 July 2009. He was then aged nearly 85 years, having been born in October 1924.
The deceased was married to Phyllis Andree Laidlaw in September 1945. She predeceased him, having died in July 1994.
The deceased left a Will that he made on 20 March 2009, Probate of which was granted, on 17 September 2009, by the Supreme Court of New South Wales, to the named executors.
The deceased's Will, relevantly, provided:
(a) a specific devise of property, situated at Chiswick, to the deceased's grandson, Michael James Kai Olsen, if he survived the deceased and attained the age of 30 years;
(b) a specific devise of property, situated at Gloucester, New South Wales, to Sandra, to be held on trust for Michael, if he survived the deceased and attained the age of 21 years;
(c) a bequest of the deceased's furniture, household and personal effects, motor vehicles, and boats (other than as set out below) to Sandra, if she survived the deceased, however if she did not survive the deceased, then the bequest went to Michael if he survived the deceased and attained the age of 21 years;
(d) a bequest of the deceased's Pontiac Firebird and fibreglass Carmen boat to Robert;
(e) a bequest of a maritime barge, including its contents and fittings, to the deceased's son-in-law, Mark Eric Victor Olsen;
(f) a legacy of $350,000 to Robert, payable, as to $200,000, 2 years after the date of death and, as to the balance, 3 years after the date of death;
(g) a legacy of $200,000 to Stephen, payable by annual instalments of $25,000 on the anniversary of the deceased's death;
(h) a legacy of $200,000 to the deceased's grandson, Andrew and a legacy of $200,000 to his granddaughter, Eliza, payable, in each case, as to $100,000, 2 years after the date of death and, as to the balance, 3 years after the date of death;
(i) the rest and residue of the estate, after the payment of debts, funeral and testamentary expenses, to Sandra absolutely;
(j) no interest is to be paid on any of the legacies if it is paid by the due date.
In the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the deceased's estate, at the date of death, was disclosed as having an estimated, or known, gross value of $1,816,397. No liabilities were disclosed. The estate was said to consist of:
(a)
Real estate at Chiswick (est):
$1,500,000
(b)
Furniture, contents of Chiswick property (est):
$ 1,000
(c)
Real estate at Gloucester (est):
$ 180,000
(d)
Furniture, contents, plant, bulldozer (est):
$ 3,800
(e)
Motor vehicle (Pontiac) (est):
$ 2,750
(f)
Various vehicles, car parts, scooter (est):
$ 1,050
(g)
Car manuals (est):
$ 1,500
(h)
Air compressor (est):
$ 150
(i)
Fibreglass boat (est):
$ 15,000
(j)
Boat (est):
$ 800
(k)
Seafarer boat, trailer and outboard motor (est):
$ 450
(l)
Maritime Barge (est):
$ 80,000
(m)
Contents of safe custody box (value unknown) including cash of $670:
$ 670
(n)
Reserve Bank of Australia account:
$ 3,011
(o)
Telstra shares (4,382 shares @ $3.47):
$ 15,205
(p)
AMP shares (1,000 shares @ $5.05):
$ 5,050
(q)
Alumina Limited shares (3,527 shares @ $1.69):
$ 5,960
(Cents omitted but included in total)
The parties are agreed that, at the date of hearing, the value of the Chiswick real estate is $2.5 million and the real estate at Gloucester is $200,000.
There is no evidence about the current value of the deceased's furniture, household and personal effects, motor vehicles, and boats. It is not suggested that any of these chattels are, currently, of significant value and I was requested to ignore the value of each for the purposes of determining the gross value of the estate. In substance, the parties conducted the case upon the basis that the gross value of the estate was $2.7 million and that the only assets of the estate were the two parcels of real estate.
The parties also agreed that the amount currently secured by mortgage on the Chiswick property is $182,341 and that other remaining liabilities, payable out of the deceased's estate, total $44,099. Additional legal costs of administration are estimated to be $8,800. The total of these estimated liabilities is $235,240.
At the hearing, the parties were able to agree that the net value of the estate available for distribution was estimated to be about $2,464,760 (subject to the payment of costs of these proceedings).
In calculating the value of the estate, finally available for distribution, the costs of the present proceedings should be considered, since each of the Plaintiffs, if successful, normally, will be entitled to an order that his costs be paid out of the estate of the deceased, whilst the Defendants, irrespective of the outcome of the proceedings, normally, will be entitled to an order that their costs be paid out of the estate.
The costs and disbursements, including counsel's fees, calculated on the indemnity basis (inclusive of GST and upon the basis of a three day hearing), of the Plaintiffs who have commenced their claims together are estimated to be $128,705. Their costs, calculated on the ordinary basis have been estimated to be $103,705.
Stephen's costs and disbursements, including counsel's fees, calculated on the ordinary basis (inclusive of GST and upon the basis of a three day hearing), are estimated to be $57,367.
The Defendants' costs and disbursements of the present proceedings, including counsel's fees, calculated on the indemnity basis (inclusive of GST and upon the basis of a three day hearing), have been estimated to be $105,000.
In view of the completion of the hearing in 2 days, the likely costs of all parties will be reduced. The total value of the reduction is estimated to be about $17,110. It may be more.
The parties accepted, for the purposes of the hearing, and assuming that the estimates of costs prove accurate, and the usual order for costs is made, that the net distributable value of the deceased's estate will be in the order of $2.2 million. They all agree that the estate is reasonably large.
The parties agreed, also, that because of the liabilities left to pay, there will be no available estate to pay the pecuniary legacies and that those legacies abate. Accordingly, despite the terms of the deceased's Will, each of the Plaintiffs, without an order of this court, will receive nothing.
I am requested to allow Sandra a period of time to enable her to consider how any orders made can be satisfied. There is no dispute that I should do so, and accordingly, I shall allow a period of time to the Defendants to determine how the orders that I make will be satisfied.
The persons described as eligible persons, within the meaning of the Act, are each of the Plaintiffs, Sandra, and her son, Michael. It is said that a notice has been served on each of the Plaintiffs, but not on Sandra, or on Michael.
I am not sure that Michael is an eligible person, but he is a person upon whom notice should be served. I gather, because he is a minor, and because his mother is a party to the proceedings, and defending the claims made, on his behalf, that he is aware of the proceedings.
Only the persons identified have continued with the proceedings.
The Statutory Scheme - The Act
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, it is useful to re-state it, principally for the benefit of the litigants in this case.
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 person'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 a deceased person's disposition to produce a result that is consistent with the purpose of the Act. Even then, the court's power to do so is discretionary.
An application for a family provision order may be made in respect of the estate of a deceased person. In s 3 of the Act, "deceased person" is defined as including "any person in respect of whose estate administration has been granted". Section 55 of the Act sets out the circumstances in which "administration is granted in respect of the estate of a deceased person". In this case, administration has been granted.
The key provision is s 59 of the Act. The court must be satisfied, first, that the applicant is an eligible person within the meaning of s 57(1). There are six categories of persons by, or on whose behalf, an application may be made. One category is "a child of the deceased" (s 57(1)(c)) whilst another is, relevantly, "a person who was, at any particular time, wholly or partly dependent on the deceased person, and who is a grandchild of the deceased person" (s 57(1)(e)).
In the case of an applicant who falls within s 57(1)(d), (e) or (f), the court must next consider and be satisfied, having regard to all the circumstances of the case (whether past or present), that there are factors which warrant the making of the application (s 59(1)(b)).
The Act does not specify the "factors which warrant the making of the application". In considering the meaning of what he described as "this poorly conceived and clumsily expressed subsection" in the former Act (which did not form part of the Draft Bill produced by the Law Reform Commission)", McLelland J said, in Re Fulop Deceased (1987) 8 NSWLR 679 at 681 (approved in substance by the Court of Appeal in Churton v Christian (1988) 13 NSWLR 241) and, most recently, in Evans v Levy [2011] NSWCA 125 at [64]), that the factors are those which, when added to facts which render the applicant an eligible person, give him, or her, the status of a person who would be generally regarded as a natural object of testamentary recognition by the deceased.
Kirby P in Tsivinsky v Tsivinsky (NSWCA, 5 December 1991, unreported) in dealing with the section of the former Act, which was in similar terms said:
"Insofar as s 9(1) gives any guidance concerning the factors 'which warrant the making of the application', it is Delphic. The language used is extremely broad in its generality ('all the circumstances', 'whether past or present', 'factors... warrant making the application', 'satisfies'). The only real clue as to what is meant is to be derived from the apparent policy of confining this additional, preliminary procedure to the particular categories of 'eligible person' contained in the definition paras (c) and (d) in s 6(1) of the Act."
In Brown v Faggoter (NSWCA, 13 November 1998, unreported), a decision of the Court of Appeal constituted by Sheller JA, Sheppard AJA and Fitzgerald AJA, there seems to be the suggestion that an application might be warranted if the application has reasonable prospects of success. This seems to be a somewhat different and, perhaps, an easier, test than that which the Court of Appeal approved in Churton v Christian .
In Penfold v Perpetual Trustee [2002] NSWSC 648, Windeyer J did not follow Brown v Faggoter . Bryson AJ also commented in Porthouse v Bridge [2007] NSWSC 686:
"In my opinion it would be an error to treat the strength of a claim for provision under s 7 as determinative, either way, of the question under s 9(1). Factors, however strong, which show that the making of the application is not warranted are not the object of enquiry and appear to be irrelevant. The use of language referring to a plurality of factors ("there are factors") is not in my opinion to be understood literally as meaning that the Court must recognize separately more than one factor; in my opinion the plural is used to indicate the generalised nature of the matter under determination."
More recently, in Diver v Neal [2009] NSWCA 54, Basten JA, with whom Allsop P and Ipp JA agreed, said of s 9(1) of the former Act:
"8 As noted above, compliance with this requirement was not the first issue addressed by the primary judge, although s 9(1) envisages that it is to be determined before the Court decides whether to "proceed with the determination of the application". In practice, the factors relevant to the issue raised as a preliminary matter are, to a significant extent, co-extensive with those which must be addressed in determining whether the testator made adequate provision for the applicant: see Churton v Christian (1988) 13 NSWLR 241 at 242-243 (Hope JA) and 248-249 (Priestley JA). Nevertheless, the express distinction between two classes of eligible person must be recognised. It appears to have been drawn on the basis that persons falling within the first category (comprised of those identified in pars (a) and (b)) are "regarded as natural objects of testamentary recognition", whereas those falling within the second category (identified in pars (c) and (d)) are potentially appropriate objects of testamentary recognition, depending upon their circumstances: see Churton at 252 (Priestley JA) applying the analysis of McLelland J in Re Fulop Deceased (1987) 8 NSWLR 679 at 681."
Even though, respectfully, I regard the views expressed in the authorities referred to by Windeyer J, Bryson J, Basten JA, and Campbell JA, as correct, if necessary, I shall consider both tests.
Then, if those considerations are satisfied, the court must determine whether adequate provision for the proper maintenance, education and 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)). It may take into consideration, then, the matters referred to in s 60(2) of the Act. In this way, the court carries out a two-stage process.
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, is inadequate for the applicant's proper maintenance, education and advancement in life. The question would appear to be answered by an evaluation that takes the court to the provision actually made in the deceased's Will, or on intestacy, or both, on the one hand, and to the requirement for maintenance, education and advancement in life of the applicant on the other. No criteria are prescribed in the Act as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance, education and advancement in life of the applicant.
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".
Importantly, there no longer appears to be any sanction to consider, in s 59(1)(c) of the Act, the provision made by the deceased during his, or her, lifetime for the applicant (see, s 9(2) of the former Act).
Under both s 59(1)(c) and s 59(2) 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.
"Provision" is not defined by the Act, but it was noted in Diver v Neal 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 are the words 'maintenance' and 'advancement in life' defined. However, in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon JJ, at [115], 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 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."
In Mayfield v Lloyd-Williams [2004] NSWSC 419, White J 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."
The word 'adequate' connotes something different from the word 'proper'. 'Adequate' is concerned with the quantum, whereas 'proper' prescribes the standard, of the maintenance education and advancement in life: Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127 at [72] and at [77] per Buss JA.
Each of the words were considered by Lord Romer in delivering the advice of the Privy Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at 476:
"The use of the word 'proper' in this connection is of considerable importance. It connotes something different from the word 'adequate'. A small sum may be sufficient for the 'adequate' maintenance of a child, for instance, but, having regard to the child's station in life and the fortune of his father, it may be wholly insufficient for his 'proper' maintenance. So, too, a sum may be quite insufficient for the 'adequate' maintenance of a child and yet may be sufficient for his maintenance on a scale that is 'proper' in all the circumstances."
Dixon CJ and Williams J, in McCosker v McCosker (1957) 97 CLR 566 at 571, after citing Bosch v Perpetual Trustee Co Ltd , went on to say, of the word 'proper', that:
"It means "proper" in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement if life must be considered in the light of the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."
In Goodman v Windeyer (1980) 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 [114], Callinan and Heydon JJ said:
"[T]he use of the word "proper"...implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of a kind which was made here...The use of the word "proper" means that attention may be given, in deciding whether adequate provision has been made, to such matters as what use to be called the "station in life" of the parties and the expectations to which that has given rise, in other words, reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future."
The first stage of the process provided for by s 59(1)(c) has been described as "the jurisdictional question": Singer v Berghouse (No 2) [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 and advancement in life of a particular applicant.
Whether the applicant has a 'need' is a relevant factor at the first stage of the enquiry. It is an element in determining whether 'adequate' provision has been made for the 'proper' maintenance education and advancement in life of the applicant in all of the circumstances: Collins v McGain [2003] NSWCA 190 [42] (Tobias JA, with whom Beazley and Hodgson JJA agreed).
Tobias JA said:
"42. 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 focused. 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 the cause of that context that, in the present case, the "proper maintenance etc" of the appellant required consideration to guard against the contingency to which I have referred."
In Devereaux-Warnes v Hall [No 3] at [81]-[85], 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]."
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), then, the court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the court at the time the order is made.
The second stage of the process arises under s 59(2) and s 60(1)(b). 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.
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 which the court may take into account, together with "any other matter the court considers relevant", for the purposes of determining eligibility, whether to make a family provision order, and, if so, the nature of any such order. There is no hierarchy as between the various factors. The weight to be attached to each of them is likely to differ depending upon the individual circumstances of the particular case. Nor is there a mandatory command to take into account any of the matters enumerated. None of the matters differentiate in their application between classes of eligible person or types of relationship. 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 sub-s (1)(a), many of the matters in sub-s (2) will be largely, if not wholly, irrelevant.
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 named in the deceased's will, 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 matters referred to in s 60(2) may be considered on "the discretionary question", namely whether to make an order and the nature of that 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 be irrelevant 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 the potential beneficiaries must be taken into account and weighed with all of the other relevant factors."
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;
(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 which 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, his 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).
Any family provision order under the Act will take effect, unless the court otherwise orders, as if the provision was made in a codicil to the will of the deceased, or in the case of intestacy, as in a will of the deceased (s 72(1) of the Act).
Section 66 of the Act sets out the consequential and ancillary orders that may be made.
The court, also, may, at the time of distribution of an estate that is insufficient to give effect to a family provision order, make such orders concerning the abatement, or adjustment, of distributions from the estate, as between the person in whose favour the family provision order is made and the other beneficiaries of the estate as it considers to be just and equitable among the persons affected (s 72(2) of the Act).
Applicable Legal Principles
In addition to the above matters, there are some general principles that are relevant to the facts of this case. Whilst most of these principles were given in the context of the previous legislation, they are equally apt in a claim such as this one.
Bryson J noted in Gorton v Parks (1989) 17 NSWLR 1, at 6, in relation to the former Act, 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 role 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. 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 and 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 deceased'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".
The court's discretion is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation ( Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9, per Dixon CJ at 19); McKenzie v Topp [2004] VSC 90 at [63]. Freedom of testamentary disposition remains a prominent feature of the Australian legal system.
Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education and advancement in life, 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: The Pontifical Society for the Propagation of the Faith v Scales at 19; Walker v Walker ( NSWSC, 17 May 1996, unreported); Vigolo v Bostin at [11]; Stern v Sekers; Sekers v Sekers [2010] NSWSC 59.
In relation to a claim by an adult child, the following principles, in my view, are relevant:
(a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.
(b) It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life - such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their 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 a spouse, who has a prime obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute: Taylor v Farrugia .
(d) There is no the need for an adult child to show some special need or some special claim: McCosker v McCosker ; Kleinig v Neal (No 2) [1981] 2 NSWLR 532; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45.
In relation to a claim by a grandchild, the following principles, in my view, are also relevant:
(a) As a general rule, a grandparent does not have a responsibility to make provision for a grandchild; that obligation rests on the parent of the grandchild. Nor is a grandchild normally regarded as a natural object of the deceased's testamentary recognition. Additional factors need to be shown to bring a grandchild into the category of persons for whom the deceased ought to have made provision.
(b) Where a grandchild has lost his, or her, parents at an early age, and when he, or she, has been taken in by the grandparent in circumstances where the grandparent becomes in loco parentis , these factors would, prima facie, give rise to a claim by a grandchild to be provided for out of the estate of the deceased grandparent.
(c) The mere fact of a family relationship between grandparent and grandchild does not, of itself, establish any obligation to provide for the grandchild upon the death of the grandparent.
(d) Generosity by the grandparent to the grandchild, including contribution to the education of the child, does not convert the grandparental relationship into one of obligation to provide for the grandchild upon the death of the grandparent.
(e) If there is dependence, whether whole or partial, by the grandchild on the grandparent, it must be direct and immediate; it is not sufficient that his, or her, dependence is the indirect result of the deceased providing support and maintenance for his, or her, own adult child, and, thereby, incidentally, benefiting the grandchild who is directly dependent on that child.
See, for example, in Davis v Public Trustee; Kelleners v Public Trustee [2007] NSWSC 731 at [41]ff; MacEwan Shaw v Shaw (2003) 11 VR 95.
There is another principle relevant to the size of the estate that should be remembered. In Re Buckland deceased [1966] VR 404, Adam J, at 415, said:
"I consider the proper conclusion to be drawn from the authorities is that the court's jurisdiction, whatever the size of the estate, is limited by the claimant's need for maintenance and support; but that the maintenance and support to which he or she may for this purpose be treated as needing is that appropriate to his or her station or condition in life. ... The greater the estate the more may contingencies, even remote contingencies which may arise in the future, be provided for in the assessment of such maintenance."
An appeal from the judgment of Adam J was dismissed by the High Court in May 1966. The High Court found no significant error of fact or of law in the reasons for judgment of the trial judge, and could not conclude that the amount of the provision ordered in the circumstances of the case, stemmed from some misconception of fact or from some error or misapplication of principle: Buckland v Trustees Executors and Agency Co. Limited (1966) 40 ALJR 164.
In Anasson v Phillips (NSWSC, 4 March, 1988, unreported) Young J (as his Honour then was) said:
"With a very large estate ... there is great temptation on a Court to be overgenerous with other people's money. This is especially so when the Court can see that Plaintiffs have been very hardly done by at the hands of a domineering testatrix. However, the case should not be approached in this way, as the application has to be determined in accordance with the legal principles. These principles include the fact that in Australia there is freedom of a person to leave her property in whatever way she wishes, to love whom she wishes, to hate whom she wishes, and it is only when there has been a failure to comply with a moral duty to those who in the community's eyes she should have made proper provision for, that anyone can legally complain about another person's will. Even then, the Court has no power to rewrite the will, but can only adjust things, in substitution for the testatrix, in such a way as to fulfil her moral duty.
If the estate is a large one, the Court has a slightly different approach. The basic principles are the same, that is, the will can only be affected to the extent that it is necessary to discharge the moral duty by making adequate provision for the Plaintiffs, but where there is a large estate, competition between claimant and claimant, and claimant and beneficiary under the will is much reduced or eliminated. Further, there may be a more liberal assessment of the moral duty owed, to be reflected in what is proper provision for the Plaintiffs. In particular, the lifestyle that has been enjoyed by the Plaintiffs, because they have been associated with a wealthy testatrix, is a relevant factor."
These last two mentioned cases have been referred to and followed many times. They remain relevant. Yet, it must also be remembered, as McLaughlin AsJ stated in Lumb v McMillan [2007] NSWSC 386, at [26]:
"The ample size of the estate does not justify the Court in being profligate in disposing of the assets of the Deceased and in awarding to each Plaintiff which is more than that to which that Plaintiff would be entitled. The Court should do no more than remedy the failure on the part of the Deceased to make adequate provision for the proper maintenance of each Plaintiff."
Estrangement of Applicant and the Deceased
On the topic of the relationship between an applicant and the deceased, Campbell JA (with whom Giles JA and Handley AJA agreed) recently noted, in Hampson v Hampson [2010] NSWCA 359:
"[80] The requirement to have regard to the totality of the relationship can in many cases be satisfied by considering the overall quality of the relationship assessed in an overall and fairly broad-brush way, not minutely. Consideration of the detail of the relationship is ordinarily not called for except where there is an unusual factor that bears on the quality of the relationship, such as hostility, estrangement, conduct on the part of the applicant that is hurtful to the deceased or of which the deceased seriously disapproves, or conduct on the part of the applicant that is significantly beneficial to the deceased and significantly detrimental to the applicant, such as when a daughter gives up her prospects of a career to care for an aging parent. Neither entitlement to an award, nor its quantum, accrues good deed by good deed. Indeed, it is a worrying feature of many Family Provision Act cases that the evidence goes into minutiae that are bitterly fought over, often at a cost that the parties cannot afford, and are ultimately of little or no help to the judge."
Because, in this case, there is a factor raised by the Defendant that bears on the quality of the relationship, being that Robert and the deceased were said to be estranged for some time, it is necessary to set out some other general principles which should be remembered:
(a) The word 'estrangement' does not, in fact, describe only the conduct of either party. It is merely the condition that results from the attitudes, or conduct, of one, or both, of the parties. Whether the claim of the Plaintiff on the deceased is totally extinguished, or merely reduced, and the extent of any reduction, depends on all the circumstances of the case ( Gwenythe Muriel Lathwell, as Executrix of the Estate of Gilbert Thorley Lathwell (Dec) v Lathwell [2008] WASCA 256 at [33]).
(b) The nature of the estrangement and the underlying reason for it is relevant to an application under the Act: Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361 at [88]-[94]; Foley v Ellis .
(c) There is no rule that irrespective of a Plaintiff's need, the size of the estate, and the existence or absence of other claims on the estate, the Plaintiff is not entitled to "ample" provision if he, or she, has been estranged from the deceased. The very general directions in the Act require close attention to the facts of individual cases.
(d) The Court should accept that the deceased, in certain circumstances, is entitled to make no provision for a child, particularly in the case of one "who treats their parents callously, by withholding, without proper justification, their support and love from them in their declining years. Even more so where that callousness is compounded by hostility": Ford v Simes [2009] NSWCA 351 at [71] per Bergin CJ in Eq, with whom Tobias JA and Handley AJA agreed.
(e) As was recognised by the Court of Appeal of New South Wales in Hunter v Hunter (1987) 8 NSWLR 573 at 574 per Kirby P (with whom Hope and Priestley JJA agreed):
"If cases of this kind were determined by the yardstick of prudent and intelligent conduct on the part of family members, the appeal would have to be dismissed. If they were determined by the criterion of the admiration, affection and love of the testator for members of his family, it would also have to be dismissed. Such are not the criteria of the Act. The statute represents a limited disturbance of the right of testamentary disposition. It establishes a privilege for a small class of the immediate family of a testator (the spouse or children) to seek the exercise of a discretionary judgment by the Court for provision to be made out of the estate different from that provided by the testator's will."
In this case, I shall deal with the conduct of Robert and the deceased later in these reasons and the relationship between them that resulted.
Credibility of the Witnesses
I am satisfied that there were not many relevant facts seriously in dispute between the parties.
There was virtually no cross-examination of Andrew or Stephen. With respect, this was a sensible approach, because of the medical condition of each. In any event, there was no suggestion that the contents of the affidavits relied upon, in respect of the case of each, was in any way inaccurate.
The cross-examination of Robert related, firstly, to putting matters raised by the deceased in affidavits that he had filed in proceedings, commenced in 1995, by Robert, under the former Act, seeking a family provision order out of his mother's estate. In those proceedings, the deceased was the Defendant. I shall return to the deceased's affidavits in those proceedings later in these reasons.
The second area of cross-examination related to his financial and material circumstances. In relation to this aspect, the issue focussed on related to his failure to disclose the receipt of agistment income of $1,000 every 6 months in his taxation return and also the use of a business name ("2 Bens") which business name had not been disclosed in his evidence.
His explanation for the non-disclosure of that income in his taxation returns was that he had been advised, since the expenses of his farm exceeded the income, and since no expenses were included in his taxation return, the amount of the income did not need to be disclosed.
Whether or not he was given that advice, and whether, if given, that advice is correct, it does not seem to me that the income is sufficiently large to make an impact on his financial and material circumstances. In relation to the use of the business name that had not been disclosed, it was accepted he had not disclosed the name.
The second area of challenge to what Robert had disclosed related to his statement asserting that he had no superannuation when documents produced suggested that he might have some. This issue evaporated during submissions, as I gave the Defendants' counsel an opportunity to seek an adjournment to enable the issue of subpoenas on the entities identified during cross-examination, but they indicated, upon instructions, that the Defendants did not wish to do so.
In any event, Robert's answers in cross-examination, which I accept, were that he had drawn down on his superannuation since reaching the age of 55 years to enable him to pay his living expenses, and, for this reason, he had no superannuation left at the present time.
Overall, I thought Robert was endeavouring to tell the truth, even though some of his affidavit evidence was, admittedly, inaccurate. He made concessions and accepted, in the main, that what the deceased had written in affidavits filed in the 1995 proceedings to which I shall refer, about historical matters, was more accurate than what was contained in his own more recent affidavit dealing with those matters. To the extent that Robert disagreed with matters that the deceased had included in his affidavit, those matters were of no real significance in this case.
In relation to Sandra, I was satisfied that she, also, was endeavouring to tell the truth. Her evidence about the deceased's desire to leave the Chiswick property to her son, Michael, was not consistent with all but his last Will. In each of his prior 8 wills, to which I shall refer later in these reasons, he did not devise that property to Michael.
Also, I thought her explanation about what she had stated in her affidavit, filed in the 1995 proceedings, about "financial obligations" owed to Stephen and Andrew, was a little unconvincing, as was her lack of explanation about the amounts required to be paid from the property which she had inherited from her mother. In each matter, however, this may have had more to do with the inability to recollect details than anything else.
Other than the legal officer of the NSW Trustee & Guardian, who was cross-examined, briefly, about a relatively minor matter, no other witness whose affidavit was read was cross-examined. There was no suggestion that I should not accept his evidence.
Additional Facts
I next set out the additional facts that I am satisfied are either not in dispute, or that have been established by the evidence. I do so by reference to s 60 of the Act and by a consideration of the factors relevant to all claims at the same time, as this will permit the application of the statutory criteria to be weighed comparatively in relation to the claims. Where necessary, I shall also consider the competing claim of Sandra and Michael as the primary beneficiaries named in the deceased's Will.
(a) any family, or other, relationship between the applicant and the deceased person, including the nature and duration of the relationship
Robert is a son of the deceased.
Robert lived with his parents until he finished high school in about 1966 at their family home in Chiswick. He was married, for the first time, in February 1970.
It seems clear that Robert and the deceased had their disagreements, particularly whilst Stephen and Andrew were younger, and that there was some family friction. However, by the date of the deceased's death, they appear to have accepted each other's perceived flaws or weaknesses. I deal with particular matters of their relationship later.
There were proceedings commenced in 1995, in which Robert sought a family provision order in relation to his mother's estate, and which proceedings resulted, in a consent order made in October 1996, pursuant to which Robert received a lump sum of $150,000 inclusive of costs. (In order to pay this sum, and the estate's legal costs of $35,000, the deceased borrowed $200,000, secured by mortgage over his home at Chiswick.)
In broad summary, counsel for each of the parties accepted, during submissions, that the relationship between the deceased and Robert was not as close as it might have been, but, apart from a period of about 5 years in the mid-1990's when they spoke infrequently, and then principally about Stephen, that Robert was never estranged, completely, from the deceased.
Stephen and Andrew is each a grandchild of the deceased.
Importantly, there is no dispute that each lived with the deceased and his wife for different periods of time - Stephen between May and December 1983, and then again, between March 1993 and January 1994; and Andrew between May and December 1983. Even when they did not live together, the deceased took a keen interest in each of them. However, the deceased was not in loco parentis to either of them.
There is no dispute that the relationship of each with the deceased was a close and loving one, although overall, Stephen seemed to have been involved more in the deceased's life.
Sandra gave evidence, which I accept, that in the last years of the deceased's life, there was less contact between the deceased and Stephen, but she acknowledged that, on one occasion she could remember, he had visited the deceased in the nursing home.
There were proceedings commenced in 1998, in which each of Stephen and Andrew sought a family provision order in relation to his grandmother's estate and which proceedings resulted, in a consent order made in February 2002, pursuant to which received a lump sum of $40,000, inclusive of costs. This fact does not appear to have reflected adversely on the relationship between each of them and the deceased.
(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
Disregarding any obligation, or responsibility, arising as a result of their relationship as parent and child, the deceased did not have any legal, or financial, obligation to Robert imposed upon him by statute or common law. It is likely, however, that Robert had been financially independent for many years prior to the deceased's death.
Leaving aside any obligation, or responsibility, arising as a result of their relationship as grandparent and grandchild (assuming that such an obligation or responsibility exists), the deceased did not have any legal, or financial, obligation to any of his grandchildren imposed upon him by statute or common law.
(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 this earlier in this judgment.
(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
Robert says that:
(a) In about 2002, there was a property settlement between him and his then wife, Pauline, under which she transferred to him her interest in the farm property at Lansdowne. He said he made no claim against her property at West Ryde.
(b) In January 2003, he purchased a small investment property being a three-bedroom residence at Wallsend for $215,000 with the assistance of a mortgage advance from the Commonwealth Bank for the full amount of the purchase price. The borrowing was for a larger amount. To the best of his recollection, the mortgage was also secured over the Lansdowne property discharging an existing borrowing over it. His de facto partner's children rented the property at market rental.
(c) He continues to reside in rented accommodation at Dora Creek with his partner, Maryann.
(d) The lease on the property he and Maryann live in has expired and they are holding over, as tenants, from week to week. The house is bordered on one side by the Newcastle Expressway which is about 200 metres away and on the other side by a transmission line. The house is only accessible by a rough driveway, which is little more than a used track. The house itself is in need of repairs principally:
(i) to the roof to secure it to prevent repeated access by possums;
(ii) repair of cracking in the walls;
(iii) repainting;
(iv) the carpeting in part of the house is worn and a trip hazard;
(v) the pergola is in a state of disrepair.
He has not sought to move from the house, as he cannot afford better accommodation. He is also behind in his rent which would make it difficult to apply for other accommodation.
(e) He is paying off his property at Lansdowne. He does not reside there as it is too far from Sydney and Newcastle where he might be able to obtain some work.
(f) He has no superannuation.
(g) His assets are as follows:
(i)
Landsdowne property:
$362,500
(ii)
Greater Newcastle bank accounts:
$ 523
(iii)
181 IAG shares:
$ 635
(iv)
1980 Jeep Cherokee (unregistered):
$ 1,500
(v)
1991 Subaru Liberty:
$ 1,200
(vi)
Car trailer and box trailer:
$ 1,500
(vii)
Household contents:
$ 0
Total:
$367,858
(h) The liabilities of Robert and Maryann are as follows:
(i)
Home mortgage:
$228,411
(ii)
Line of Credit against mortgage:
$ 32,051
(iii)
GE personal loan of Robert:
$ 9,902
(iv)
CBA Credit Card:
$ 10,949
(v)
Citibank Credit Card:
$ 10,562
(vi)
Maryann's St George Credit Card:
$ 1,000
(vii)
Outstanding rates:
$ 1,600
Total:
$294,475
(i) The income of Robert and Maryann comprises her wage of $420 net per week and part age pension and Robert's Newstart allowance of $123 a fortnight. The only other resource they have is through an Amway network where they receive a credit in respect of household purchases they make. This usually amounts to $200 or $250 credit per month towards their purchases.
(j) The estimated annual expenses of Robert and Maryann are:
(i)
Mortgage repayments:
$19,911
(ii)
Food:
$ 7,280
(iii)
Household supplies:
$ 2,600
(iv)
Rent:
$14,560
(v)
Gas:
$ 624
(vi)
Electricity:
$ 1,560
(vii)
Telephone:
$ 2,520
(viii)
Motor vehicle registration:
$ 1,248
(ix)
Petrol:
$ 7,800
(x)
Motor vehicle maintenance:
$ 1,300
(xi)
Fares/moorings, etc:
$ 780
(xii)
Clothing and shoes:
$ 520
(xiii)
Medical, dental and optical:
$ 1,040
(xiv)
Entertainment/hobbies:
$ 1,040
(xv)
Chemist/pharmaceutical:
$ 520
(xvi)
Repairs - furniture and appliances:
$ 260
(xvii)
Dry cleaning:
$ 520
(xviii)
Gifts:
$ 520
(xix)
Hairdressing, toiletries:
$ 780
(xx)
Internet:
$ 1,820
(xxi)
Council rates:
$ 1,040
Total:
$68,243
There has been no provision for interest paid on the credit cards.
(k) Robert indicates that of the amounts outlined above, he may not always be able to meet and some expenses are deferred or met by borrowings when he has some available credit on his credit cards. He has not been able to meet the cost of private health insurance or house insurance.
(l) It is Robert's intention to retire to the Lansdowne property.
(m) The home on the Lansdowne property comprises two bedrooms, lounge, dining, bathroom and kitchen. The house is in need of work, which Robert has been unable to afford to undertake. The work includes:
(i) Repairs to roof
(ii) Repairs to building
(iii) Replacement of floor coverings
(iv) Replacement of kitchen cupboards
(v) Re-tiling of bathroom
(vi) Fencing
(vii) Repairs to shed (upgrade to doors and floor)
(n) Robert's fridge, dishwasher and washing machine are all over ten years old. He estimates the cost of replacement would be approximately $3,000 - $4,000 for the three items.
(o) The motor vehicles which Maryann and Robert own are very old. The Subaru is now 20 years old and has done over 465,000 kms. The Jeep Cherokee is unregistered as the ignition does not work properly and he has been unable to have it repaired because of its age. It has also done a considerable number of kilometres.
(p) Robert has enquired about the cost of new or second-hand vehicles. He estimates the cost of a similar new, or near new, vehicle is $25,700 to $28,500.
Mr Simpson SC submitted that Robert should receive a lump sum of $600,000. That will enable him to pay off his debts (about $300,000), purchase a car and the whitegoods (about $30,000) he says he needs and will leave a lump sum of about $270,000 to provide him with income and capital for exigencies of life. The latter sum is required, so it is submitted, because Robert has no realistic prospect of employment in the future (bearing in mind his age and his demonstrated inability to obtain other than telemarketing part-time employment over the last 12 months). Mr Simpson SC pointed out that, coincidentally, the amount of the remaining lump sum was not significantly greater than a weekly amount of $250 for 21.6 years (Robert's life expectancy).
Counsel for the Defendants submitted that the provision for Robert in the deceased's Will ($350,000) was adequate and proper in all the circumstances. This sum would enable him to pay all of the debts, purchase a car and the whitegoods and leave him with about $20,000. Having paid off his debts, his income would be increased since he would not have to make any regular repayments. In addition, if he was not employable, there would be no need to continue to rent accommodation, he could live on the farm that he owns, thereby saving rent.
Stephen works at David Morgan Enterprises at Rydalmere. The work involves packaging, repacking and filing. It is for 8 hours per day, three days a week. He receives a gross weekly wage of $108. He says it is repetitive, boring work. Additionally, he is in receipt of a Centrelink Disability Support Pension and has been for many years, which has been managed by the NSW Trustee & Guardian since 1999. This is supplemented by his earnings, which he manages himself.
The NSW Trustee manages other funds held in Stephen's name. As at 22 February 2011, Stephen's financial circumstances is as follows:
(i)
Credit in Trust account:
$13,304
(ii)
Centrelink fortnightly pension:
$ 637
(iii)
Fortnightly allowance:
$ 285
(iv)
Annual budget provision for discretionary and other expenses:
$ 2,000
(v)
Annual budget provision for electricity and telephone:
$ 1,600
It is thought that the rent Stephen pays to Department of Housing is taken out of his Centrelink payments. The next review by the Department of Housing will result in the rent being doubled in consequence of which Centrelink benefits will reduce to $559.
Several areas have been identified by those consulted, including Stephen, which would enhance his quality of life in the present and the future. The following list is said to be derived from the "needs" identified through the consultation process:
(a) A home unit, which Stephen would own, with an estimated cost of $390,000. He would no longer be required to pay rent. He would have, therefore, approximately $7,500 per year available to cover rates and maintenance costs. The unit should have a space where he could perform work repairing computers and telephones (something at which he is, apparently, very adept).
(b) Furniture for the house ($20,000).
(c) Funds to invest for the future and to generate income ($50,000).
(d) Driving lessons and an assessment from an appropriate Driving Assessment Centre ($450).
(e) A vehicle should he gain his license ($8,000 - $10,000).
(f) A small boat and trailer ($11,500).
(g) Courses to assist with improving literacy, life skills and repairing mechanical items and to update his computer skills ($2,000).
(h) Holiday (second yearly) ($54,000).
It was submitted, by Mr R Wilson of counsel that Stephen should receive a lump sum of $500,000, based upon the costs of the home unit ($390,000) and a capital sum ($110,000). Stephen would not lose his pension if he received that amount and used it as stated.
In the alternative, if he did not receive sufficient to enable him to purchase a home unit, Stephen should receive a capital sum of $300,000.
Counsel for the Defendants submitted that the pecuniary legacy stated, for Stephen, in the deceased's Will ($200,000), was adequate and proper in all the circumstances. This would be more than is required to meet his stated needs, leaving a capital sum that would provide an income. It was submitted that there was no need for accommodation for Stephen to be owned absolutely, as there was no evidence that Stephen was not secure in the accommodation provided by the Department of Housing.
Andrew:
(a) Lives in a two-bedroom unit in Bunbury, Western Australia, which unit he rents.
(b) Has been living in this unit for about 3 years. His mother lives in a suburb adjacent to Bunbury and sees him about twice a week as well as regularly telephoning him. She assists him by looking after some of his money and speaking to people from the Disability Services Commission, Centrelink, Telstra and other people if necessary. (She is contemplating returning to live in New South Wales.)
(c) Works at the Activ Industries workshop, which provides employment for people with disabilities, as a general hand. He works there between 8:30 a.m. and 3:30 p.m., five days a week. He is paid for this work and he also receives social security. He receives, on a weekly basis:
(a)
Activ Industries:
$123
(b)
Centrelink Pension (Disability Support Pension):
$427
(c)
Centrelink Mobility Allowance:
$ 41
The pension includes a rental supplement of about $110 per fortnight.
(d) Only owns the furniture in his unit, his clothing and personal effects and the monies in the bank accounts, totalling approximately $200, some superannuation of about $970, and the monies in trust held by his mother and the solicitor for BT Financial Group, with a balance of approximately $18,000.
(e) Sets out his annual expenses, which list was prepared with the assistance of his mother.
(a)
Groceries:
$ 3,900
(b)
Household supplies:
$ 260
(c)
Gas:
$ 2,600
(d)
Electricity:
$ 520
(e)
Telephone:
$ 1,560
(f)
Clothing and shoes:
$ 520
(g)
Medical, dental and optical:
$ 260
(h)
Entertainment/hobbies:
$ 4,580
(i)
Holidays:
$ 520
(j)
Chemist/pharmaceutical:
$ 104
(k)
Cleaning:
$ 46
(l)
Repairs - furnishings and appliances:
$ 260
(m)
Gifts:
$ 104
(n)
Hairdressing/toiletries:
$ 104
(o)
Transport:
$ 624
(p)
Rent:
$ 8,840
Total:
$24,802
It is submitted by Mr Simpson SC, on behalf of Andrew, that:
(a) Andrew needs a unit, which he would own absolutely, that has at least two bedrooms, so that his mother or father would have somewhere to stay when she, or he, visits. It would also mean that, at other times, he would have a room that he could use as a workroom or study, as he does in his current unit. The unit would also need to be located close to town where he goes bowling, to the pictures, and where shops are located. He does not have a car or a driver's licence and he wants to be close enough to town. (At the moment his unit is 6kms from town and he rides his bicycle but cannot when it is wet. He does have access to transport through Community Home Care, but it has to be booked three days in advance and it costs $4.00 between 8:00 a.m. and 4:00 p.m., but after 4:00 p.m., the charge doubles.)
It was submitted that the cost of the unit is about $265,000 to $300,000.
(b) The furniture in his present unit was bought when he moved in with monies his mother provided to him. He would like to have money available to him to be able to replace it when the time come comes. He will have to replace the fridge, washing machine and some of his furniture. The furniture that is most worn is the lounge and his bed, both of which were bought second hand.
(c) He requires a capital sum to provide a supplement to his income.
Mr Simpson SC submitted that Andrew should receive a lump sum of $480,000, being $300,000 for the home unit and a lump sum of about $180,000. In the alternative, if he did not receive sufficient to enable him to purchase a home unit absolutely, Andrew should receive a capital sum of $300,000.
Counsel for the Defendants submitted that the pecuniary legacy for Andrew, stated in the deceased's Will ($200,000), was adequate and proper in all the circumstances. This would be more than is required to meet his stated needs, whilst additionally providing a capital sum that would provide an income. It was submitted that there was no need for accommodation, as there was no evidence that Stephen was not secure in the accommodation in which he lives. Even if he wanted to move (because there were fights in the block in which he presently lived), it was likely that his income, as well as the income from the capital sum, would be sufficient to pay the rent of the alternative accommodation.
I raised with counsel whether, if it were considered appropriate for accommodation to be provided for Stephen and/or Andrew, an order in the nature of a Crisp order would be appropriate, rather than providing a capital sum to enable the purchase of the unit absolutely for him. What is described in the cases as a "Crisp order" is an order of the kind made by Holland J in Crisp v Burns Philp Trustee Company Ltd (NSWSC, 18 December 1979, unreported), except in part, in Mason and Handler's Succession Law and Practice New South Wales at p 13580 at [9433]). Such an order gives an applicant an interest for life in real property, or in an interest in real property, with the right to it (should the need arise) for the purposes of securing, for the applicant's benefit, more appropriate accommodation. That type of order is intended to provide flexibility, by way of a life estate, the terms of which could be changed to cover the situation of the applicant moving from her own home to retirement village to nursing home to hospital. The flexibility provided by such an order underlies the notion that a Crisp order confers a "portable life interest": Court v Hunt ( NSWSC, 14 September 1987, unreported), cited with approval by Ipp JA in Milillo v Konnecke [2009] NSWCA 109 at [47]-[48].
Mr Wilson (on behalf of Stephen), and Mr A Hill (for the Defendants), after obtaining instructions, specifically rejected that a Crisp order as a viable alternative. Mr Simpson SC, on behalf of Andrew, did not reject the possibility of a Crisp order, but submitted, in the event that the provision for accommodation was not considered "proper", that the capital sum of $300,000 was sought.
It is next necessary to consider the position of Michael, the devisee under the deceased's Will, of the real estate at Chiswick and at Gloucester.
Michael was born on 12 December 1994 and is 16 years of age. He presently lives with his parents, mostly in the USA, but returns to Australia sometimes. They would return more often during the lifetime of the deceased. Because Michael was born in Hawaii, he has dual citizenship.
He is said to suffer from ADHD and takes medication for his condition. (No medical evidence about this was introduced.) He is home schooled under the USA Home School System for his High School Diploma for which Sandra pays $100 per week. Sandra pays for special tuition for Michael in lessons of speech, acting, dancing, singing and guitar.
Michael does not work at the moment, but hopes to follow an acting career. He has an acting agent and, in 2009, appeared in the feature film "X-Men Origins: Wolverine". He was paid a small amount for this role.
He is also interested in physics and biochemistry and wishes to obtain a university degree in these subjects.
He does not have any assets and is completely dependant on Sandra and her partner. Sandra expressly stated that she does not put forward her financial circumstances as giving rise to any inability to pay for the educational, and other, needs of Michael, although she did say the future costs of his education would be "expensive".
Relevantly, Sandra has the following assets and liabilities:
Assets
(a)
Bilgola property (est land value only):
$1,300,000
(b)
Money in Westpac account:
$ 20,000
(c)
Money in St George account:
$ 850,000
(d)
Two motor vehicle (owned by partner):
$ 2,300
(e)
Motor vehicle in USA (owned by partner):
$ 2,500
(f)
Superannuation:
$ 77,068
Liabilities
(a)
Lease of apartment in USA (per month):
$ 1,450
(b)
Motor vehicle storage in USA (per month):
$ 100
(c)
Line of credit with IMB:
$ 290
(e) if the applicant is cohabiting with another person - the financial circumstances of the other person
Robert is, and since 2000, has been, cohabiting with his de facto partner, Maryann Woods. She was born in April 1947 and is aged 64 years.
She had a business refilling ink cartridges for printers that she conducted with her former husband from their home in Belmont North. After their separation, her home continued to be occupied by her former husband and the business continued to be conducted from that address until about 2008 when it ceased. She was then unemployed for about 18 months.
In about October 2008, she and her former husband sold the house at Belmont. The house had been used as security for advances to the business and on its sale received something less than $10,000.
She obtained a part-time position in August 2009 working as a sales assistant at a business in Morisset. She initially started work 15 hours per week and this has been increased and is now 32 hours per week. Her current income is $420 net per week and she receives a part age pension, the amount of which varies depending on her salaried income.
She has no savings other than for a credit balance in her bank account that rarely exceeds $2,000 and has no superannuation other than the employer contributions that have been made in her current employment (approximately $1,400). Her only other assets are two unregistered motor vehicles.
Neither Stephen nor Andrew is co-habiting with any one, although Andrew has a girlfriend whom he hopes to marry.
(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
Robert's health is described as "fair". He suffers from periodic neck and back pain since a motor vehicle accident. He experiences a few spasms of back pain. If treatment is required, the most effective treatment is chiropractic, at a cost of about $54 a visit, as he is not covered by private health insurance.
There has been some evidence of the physical, intellectual or mental disability of Stephen. He is described as having "a metabolic based intellectual disability".
In a report dated 12 January 2001, obtained in respect of the proceedings commenced for a family provision order in respect of his grandmother's estate, the following appears:
"Mr Laidlaw suffers from a permanent moderately severe mental disability. I believe this disability occurred after birth from inherited Phenylketonuria. His brother was also similarly affected.
...
Mr Laidlaw has also had considerable emotional difficulties. Stephen has suffered recurrent anxiety, depression, agitation and impulse control difficulties. His depression has required anti-depressive medication & counselling since 1997. Mr Laidlaw has found difficulty coping with his emotional lability especially with personal relationships.
A further recurrent problem over the years has been his mechanical mid thoracic spinal dysfunction. This problem causes Mr Laidlaw recurring mid back pain and has required simple analgesia combined with physiotherapy.
CONCLUSION
Mr Stephen Laidlaw is a thirty-year-old man who suffers from a moderately severe mental disability caused by Phenylketonuria after his birth. This condition is permanent and will require ongoing support, financially, emotionally and medically. He has in the past been able to live with a degree of independence but this may not always be the case in the future. He will never work outside a sheltered workshop situation and is likely to require intermittent medication and support for depression and anxiety. It is also likely that he [will] require recurrent treatment including physiotherapy and medication for his back problem. No surgery is contemplated for this latter condition."
However, "he has a range of skills that are quite extensive". His "disability has affected him in a range of ways including a range of learning, interpersonal and judgment difficulties".
Stephen is subject to a financial management order that was made on 22 April 1999. The NSW Trustee & Guardian manages his affairs
Andrew suffers from the same condition and is similarly affected. He has, in the past, also had a "psychotic disorder with auditory hallucinations and delusions". He has been under the care of a psychiatrist, on and off, since 1995. He takes low dose anti-psychotic medication.
The affidavit sworn by Andrew was required to be read to him. He cannot read or spell.
I have earlier referred to Michael's medical condition.
(g) the age of the applicant when the application is being considered
Robert was born in October 1948. He is currently 62 years of age.
Stephen was born in October 1970. He is currently 40 years of age.
Andrew was born in October 1973. He is currently 37 years of age.
(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
None of the Plaintiffs, or Michael, identifies any financial contributions to the acquisition, conservation and improvement of the estate of the deceased.
In relation to the welfare of the deceased, each of the Plaintiffs, Sandra and Michael did contribute something as a child and a grandchild, to the welfare of the deceased. There was no dispute that Sandra's relationship with the deceased was the closest of all. She was a loving daughter to 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
I have dealt with the entitlements of each of the Plaintiffs under the will of the deceased. Of course, in the events that have happened, each will receive nothing out of the deceased's estate.
Robert discloses the following gifts and other benefits from the deceased:
Date of gift/benefit
Amount of gift/
value of benefit
Description
Late 1970's
Not known
Sloop "Cassandra"
April 1975
$15,000
Loan to buy a house
1983
$18,000 or $19,000
Renovations on Crowley Crescent (repaid $7,500)
December 2008
$ 5,800
To repay taxes on sale of Wallsend property
In addition, Robert agrees that, in 1968, he rented a flat in Drummoyne from the deceased and paid $4.20 per week (the same as the rent paid by a protected tenant of the other flat in the same property). After the other tenant left, Robert and his first wife rented the whole property, initially for $12.40 per week, then for $14 per week, and finally, in the last year, for $20 per week. Robert vacated that property in 1978.
The deceased asserted in his affidavit filed in the proceedings commenced by Robert that "[D]uring the whole of the period that Robert tenanted Drummoyne, the market rent was substantially more than the rent that he paid" and that "I paid all the outgoings on this property".
The deceased also asserted, and Robert does not dispute, that, in 1978, Robert's mother loaned Robert $24,000 and that the deceased loaned him $17,000 and subsequently gave him a gift of $4,000 (to repay the costs of some things done by Robert at the Drummoyne property).
The deceased asserted, also, that between 1966 and 1980, he bought and supplied Robert with a number of second hand cars. He would often pay for parts for them.
The deceased and his wife spent a lot of time transporting Stephen and Andrew as well as looking after them particularly during the period when there were disputes between Robert and his then wife.
They gave Andrew a pony; they assisted with education expenses, for example, by purchasing a computer; they gave Stephen driving experience on the deceased's farm and taught Stephen about boating.
On the occasions Stephen and Andrew lived with their grandparents, the deceased and his wife fed, clothed, and looked after them.
In 1991, the deceased and his wife attended at Mildura, where Stephen was then living, to give Stephen a 21 st birthday,
The deceased paid Stephen's mobile telephone bills regularly.
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person
I have dealt with the testamentary intentions disclosed by the deceased's Will.
Between 2000 and 2008, the deceased made eight different duly executed Wills. I refer, in a summary way, to the provision made for each of the Plaintiffs in these Wills:
(i) 25 February 2000 - Robert - $150,000 payable in instalments; each of Stephen and Andrew - $200,000 "to be used to purchase a home for his own use"; to Sandra, Michael, Stephen and Andrew, as joint tenants, the Gloucester property.
(ii) 19 September 2002 - Robert - $300,000; Stephen - $300,000; and Andrew - $300,000.
(iii) 23 December 2002 - Robert - $300,000; Stephen - $300,000; and Andrew - $300,000.
(iv) 26 August 2004 - one half of residue to be divided between Robert, Stephen Andrew and Eliza. (Residue did not consist of the Gloucester property or furniture, household, and personal effects, motor vehicle and boats.)
(v) 2 September 2004 - one half of residue to be divided between Robert, Stephen Andrew and Eliza. (Residue did not consist of the Gloucester property or furniture, household, and personal effects, motor vehicle and boats.)
(vi) 2 July 2007 - Robert - unregistered Pontiac motorcar, fibreglass Carmen boat; one half of residue to be divided between Robert, Stephen Andrew and Eliza. (Residue did not consist of the Gloucester property or furniture, household, and personal effects, motor vehicle and boats.)
(vii) 31 January 2008 - Robert - unregistered Pontiac motorcar, fibreglass Carmen boat and pecuniary legacy of $750,000; Stephen - $250,000; and Andrew - $250,000.
(viii) 3 April 2008 - Robert - unregistered Pontiac motorcar, fibreglass Carmen boat and pecuniary legacy of $400,000; Stephen - $200,000; and Andrew - $200,000.
Importantly, in none of these Wills, did the deceased provide for a devise of the Chiswick property to Sandra or Michael.
(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 deceased maintained any of the Plaintiffs, either wholly, or partly, at the date of his death. I have set out the occasions when the deceased maintained, financially and otherwise, Stephen and Andrew.
(l) whether any other person is liable to support the applicant
Apart from the Commonwealth government's responsibility to continue to provide each of the Plaintiffs with a pension, there is no other person with a liability to support any of the Plaintiffs.
(m) the character and conduct of the applicant before and after the date of the death of the deceased person
The Act does not limit the consideration of "conduct" to conduct towards the deceased.
Robert, during his younger years, maintained a reasonably close relationship with both of his parents. He and the deceased had some common interests in which they participated together (e.g. rebuilding cars).
The relationship between them seemed to change because of disagreements concerning how Stephen and Andrew should be raised. Purchases made for each of them by the deceased and Robert's mother were an acknowledged cause of friction, as was Robert's discipline of the children. It is clear that the deceased and his wife believed that Robert was not carrying out the responsibilities of parenthood appropriately.
Another area of conflict related to Robert's interest in researching the family's history. Despite it being apparent to Robert that the deceased did not want to discuss his parentage, Robert continued to ask questions of him, with the result that it caused friction between them.
There were several disputes between them about Robert's children, and also about Robert's first wife, of which, at least two, in about 1989 and 1990, resulted in the police being called. On another occasion, Robert admitted that, rather childishly, he put matchsticks in their locks when they refused permission to him to stay with them.
Robert accepts that the contact that he had with his mother and the deceased subsequently was limited to being almost wholly about Stephen. It is clear that the relationship, at this time, was not close. However, Robert remained in contact with the deceased, albeit that their conversations were short.
Following Robert's mother's death, the whole of her estate passed to Sandra absolutely. Robert commenced proceedings in 1995, in which he sought a family provision order and which proceedings resulted, in a consent order made in October 1996, pursuant to which Robert received a lump sum of $150,000. The deceased, as executor of his wife's Will, was the Defendant in those proceedings, and it was in those proceedings, that the deceased filed several affidavits (to at least one of which reference has been made).
Robert accepts that following his mother's death, he did not speak to the deceased about matters involving each of them, or his family with the exception of Stephen, for about 5 years. Their conversations about Stephen were, usually, by telephone, and occurred every couple of months. On some occasions, Robert would telephone the deceased to wish him a happy birthday, but these conversations were short and impersonal.
Between 2003 and 2008, Robert and Maryann lived on the Central Coast. This was between 100 and 140 kilometres from the Chiswick home in which the deceased lived. During this time, Robert would visit the deceased three or four times a year. They would speak on the telephone about once a month. On one occasion during this period, Robert assisted the deceased move some scaffolding from Mona Vale to Brookvale.
In 2005, on Maryann's birthday they went to visit the deceased, who surprised Robert by saying that he liked Maryann. In 2008, they all went away for a weekend, with Andrew. They went to Robert's farm at Lansdowne, and also to the deceased's farm.
Robert attempted to contact the deceased by telephone between December 2008 and March 2009, but was unable to reach him.
In March 2009, Robert went to see the deceased at his home. He asked the deceased to lend him $5,800 which the deceased agreed to do.
In April 2009, Robert went to visit the deceased but found he had been moved to a nursing home at Avalon, where he then went to visit him. He gave him a mobile telephone and charger.
He visited him there several times and then again at another nursing home to which the deceased had been moved. At this time, the deceased told Robert that Sandra had taken the mobile telephone and charger.
Andrew lived with his grandparents for about 7 months in 1983. They fed him and got him ready for school each school day. After school he was taken home by bus and either the deceased or his grandmother took him to an after school care centre at Abbotsford. He was then collected from there either by the deceased or his grandmother and brought back to their home. Whilst he was at their home they also bought him clothes and shoes. He was also given some pocket money most weeks. He went to live with his mother and her fianc near Penrith when he was about 10.
He and his mother moved to Mildura when Andrew was about 11.
Whilst he was living in Mildura he attended the Special Development School. His grandparents made the arrangements for and paid for him and his brother to travel to Sydney each school holidays. They flew from Mildura to Melbourne, and then flew from Melbourne to Sydney where they were met by their grandparents.
There were three holidays a year, the longest being at Christmas which was about six weeks. His grandparents fed him and his brother, gave them pocket money and bought them clothes most holidays.
After Andrew moved to Western Australia, his grandparents arranged for him to come to their home in 1991. They arranged for the plane flight and he spent between six and eight weeks with them at their home. He was fed and looked after by them and given some pocket money. They also bought him some clothes.
In January 1993, his mother and her husband went away for a period of three or four weeks. Stephen's mother spoke to his grandparents and they arranged for him to fly to Sydney where he stayed with them and they looked after him for about three weeks before they arranged or him to be flown back to Perth to be with his mother.
In his affidavit, the deceased described taking a keen interest in Stephen and Andrew and about a very close relationship that existed between them. It is likely that it was Stephen with whom the deceased had his closest grandparent relationship.
(n) the conduct of any other person before, and after, the date of the death of the deceased person
Sandra is a chosen object of the deceased's testamentary beneficence. She had a very close relationship with the deceased. Michael, too, is a chosen object of testamentary beneficence. There is no evidence at all about his relationship with the deceased.
(o) any relevant Aboriginal or Torres Strait Islander customary law
This is not relevant in the present case.
(p) any other matter the court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered
I have referred to the receipt of the legacy of $150,000 to Robert from the estate of his mother. That amount was used towards purchasing the farm, in 1997, at Lansdowne.
I have referred to the receipt of the legacy received by Andrew and Stephen of $40,000 each as a result of the settlement of their proceedings brought in respect of their grandmother's estate.
Also Sandra received a substantial benefit during the lifetime of the deceased. She admits that she received the matrimonial home of the deceased and his wife, at Chiswick, and that the net proceeds of sale that she received were about $1.6 million.
Determination
Eligibility and Factors Warranting the Making of the Application
There is no dispute that Robert is a son of the deceased and an eligible person under s 57(1)(c) of the Act. As such, he does not have to establish factors warranting the making of his application.
In relation to Andrew and Stephen, the Defendant admits that he is an eligible person within s 57(1)(e) of the Act.
I must also consider, in relation to the claim of Andrew and Stephen, whether having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the Plaintiff's application.
Each is a named beneficiary in the Will of the deceased, and during his younger years, each was cared for by the deceased at different times. In addition, in this case, the partial dependence of each on the deceased, was direct and immediate; it was not the indirect result of the deceased providing support and maintenance for Robert, and, thereby, incidentally benefiting the grandchildren who were dependent on him: see e.g. Petrohilos v Hunter (1991) 25 NSWLR 343, at 346; Re Fulop at 682; Pearson v Jones [2000] NSWSC 799; MacEwan Shaw v Shaw and Simons v Permanent Trustee Co Ltd: Estate D. Hakim [2005] NSWSC 223. The gifts and benefits provided by the deceased and his wife were regular and significant leading to the view, at least in the 1980's and the early 1990's that they had clearly assumed a continuing and substantial role in relation to Stephen's and Andrew's support and welfare.
The requirement of s 59(1)(b), namely being satisfied that there are factors warranting the making of the Plaintiff's application, whichever view on the meaning of that phrase is correct, has been met. There was no real dispute about this.
It is clear, now, that unless an order is made in his favour, each Plaintiff will receive no provision out of the deceased's estate, despite the terms of the deceased's Will. In those circumstances, it seems to me that the deceased did not make adequate provision for each Plaintiff's proper maintenance, education, or advancement in life.
However, counsel for the Defendant during submissions, upon instructions stated that the Defendants were prepared to pay the lump sum to each of the Plaintiffs that the deceased had provided in the Will.
The deceased himself, in each case, determined that a lump sum, by way of advancement in life, was appropriate for each Plaintiff. In fact, in all of his Wills, the deceased made provision for each of them. In several Wills, the provision was more substantial than in the Will of which Probate was granted.
However, the deceased's own appreciation of what is to be provided does not conclude the Court's own consideration of whether what is finally provided is adequate and proper. I have remembered the significance of freedom of testation, particularly in this case, where the provision made for each is not insubstantial.
I am not required to consider only the deceased's Will and other testamentary intentions expressed by him in other Wills at the first stage. The totality of the relationship of each Plaintiff and the deceased, the age and capacities of the other beneficiary (Michael), and the claim of each on the bounty of the deceased, are very relevant factors in determining the answer at the first stage. I also bear in mind that the deceased chose to leave the bulk of his estate to Michael.
Importantly, there does not appear to be any specific reason identified for him doing so. Nor is there any evidence of the relationship of the deceased and Michael. However, as I have said, Michael is the deceased's chosen object of his testamentary beneficence. Furthermore, save for the ADHD condition, which Michael is said to have and which is controlled by medication, it is clear that Michael is able bodied and appears to have a bright future. There is no suggestion of any incapacity of the type suffered by Stephen or Andrew.
All of these considerations lead me to find, even taking into account the concession made by counsel for the Defendants, that the making of an order limited to the deceased's own view of his obligation to each of the Plaintiffs, would be insufficient to provide each with adequate provision for his proper maintenance and advancement in life. Accordingly, each Plaintiff succeeds at the jurisdictional stage.
I then turn to the second stage and consider whether an order should be made, and if so, the nature of the order to be made. I am satisfied, in each case, that an order should be made.
In reaching my conclusion as to amount, I have borne in mind the matters referred to in s 60(2) to which I have referred.
There are authorities decided under the former Act that the court does not order provision if it is merely to go the applicant's creditors: Caska v Caska [1999] NSWSC 289; Strano v Jovsevski [2008] NSWSC 380; Diver v Neal [2008] NSWSC 304). However, on appeal, in Diver v Neal 54, Basten JA said that:
"The dicta in Caska should not be treated as establishing any general principle. A financial benefit in circumstances where an applicant's business interests require an injection of capital may be of great assistance in permitting advancement in life. The fact that the benefit goes to paying off creditors, thereby saving the loss of an asset or reducing ongoing liabilities does not diminish the benefit to the applicant."
Allsop P, concurred, saying that:
"One could envisage a particular predicament of an eligible person whereby it would be relevant to consider that any order in his or her favour would diminish the estate to meet the claims of others to no appreciable (financial or social) benefit to him or her in his or her debt-ridden condition. That is not to say, however, that relief from indebtedness may not be of significant benefit to an eligible person. A small bequest to someone with considerable debts may make the difference (as Mr Micawber said) between happiness and misery. (my emphasis)"
Therefore, the fact that some, or all, of the provision made for Robert may go to discharge his debts, does not, necessarily, tend against an order for provision. In this case, the repayment of his debts will provide a significant benefit to him.
I do not, however, consider that in the case of Robert, an additional large capital sum, as sought, should be provided to him out of the deceased's estate. In my view, a lump sum of $450,000 would enable him to pay his debts ($300,000) and leave about $150,000 for exigencies of life. It would also result in additional income for him, which income, when added to the saved repayments that would otherwise have to be made, and the rent saved by returning to the property that he owns, ensures that he will be secure in his accommodation and will have an adequate and proper sum for exigencies of life.
In relation to Stephen and Andrew, I am of the view that each should not receive an amount specifically calculated to enable him to purchase accommodation absolutely, as well as a lump sum for exigencies of life. In my view, a grandparent, even in circumstances such as the present, is not under any obligation to ensure that each of his grandchildren is provided with accommodation that he, or she, owns absolutely. This estate, whilst reasonably large, is not of the size that would enable such provision to be made.
However, I am of the view that each of Stephen and Andrew should receive more than the amount than is conceded should be provided for as in the deceased's last Will. If thought appropriate, he could use it to assist in purchasing some accommodation, or for providing for exigencies of life.
In my view, the amount that Andrew should receive is $275,000. I bear in mind that, unlike Stephen, he pays for rented commercial accommodation, although he does receive rental assistance.
In my view, the amount that Stephen should receive is $275,000 also. Despite Stephen's secure government assisted accommodation, I have taken into account the fact that Stephen, if he does not use the fund to assist in purchasing accommodation, could use the income from the capital to assist in renting, or buying, a space from which he would be able to conduct the business repairing telephones and computers, for which work, apparently, he has some talent.
I also bear in mind that the deceased did not differentiate between his two grandchildren in any of the Wills that he made.
In relation to Stephen, the lump sum will be paid to the NSW Trustee & Guardian. In relation to Andrew, consideration should be given to identifying the person, or persons, with sufficient experience and ability to hold the fund on trust.
In reaching my discretionary decisions, I note that Michael will still be left with no less than about $1.1 million. That is a significant sum for a young man of 16 years, who, presently, appears to have a bright future ahead of him.
Furthermore, in the events that have happened, unless the Defendants decide to honour the deceased's wishes and pay the legacy provided for Eliza, or a part of it, Michael is in substantially no worse financial position than he would have been if the deceased had left him the residue of the estate, rather than the specific devises. (The total of the four pecuniary legacies in the Will to the Plaintiffs and to Eliza is $950,000, whereas the amount provided for the three Plaintiffs is $1,000,000.)
In view of the parties agreement that I should allow a period of time for Sandra to determine how to satisfy the orders that I propose to be made, I direct the parties to bring in short minutes that reflect these reasons and any agreement that they are able to reach regarding the method of payment after which final orders may be made.
I would propose if no agreement is reached, in accordance with s 65(1)(c) of the Act, that the part of the estate out of which each lump sum is to be provided is the Chiswick property. I would consider the need to make orders under s 66(1) of the Act, if no agreement can be reached.
In relation to interest on the lump sum, I would propose that interest would be payable on the whole of the amount payable, in each case. I shall leave the matter of interest and the method of its calculation, initially, to the parties. If no agreement can be reached, I shall deal with this issue after hearing further submissions.
The Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules.
Subject to any argument about costs, I would propose to make the usual order for costs.
The proceedings are adjourned to a date to be fixed.
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Decision last updated: 25 July 2011
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