McFarlane v McFarlane
[2023] VSC 379
•10 July 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST
S ECI 2021 03780
BETWEEN:
| ADAM PAUL MCFARLANE | Plaintiff |
| v | |
| HEATHER JEAN MCFARLANE (who is sued as the Executor of the Estate of BRIAN HUGH MCFARLANE, deceased) | Defendant |
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JUDGE: | Barrett AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 February 2023 – 14 February 2023 |
DATE OF JUDGMENT: | 10 July 2023 |
CASE MAY BE CITED AS: | McFarlane v McFarlane |
MEDIUM NEUTRAL CITATION: | [2023] VSC 379 |
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TESTATOR’S FAMILY MAINTENANCE – Application by adult son for provision to be made out of the deceased’s estate for the plaintiff’s proper maintenance and support pursuant to s 91(1) of the Administration and Probate Act 1958 (Vic) (‘the Act’) – Whether the deceased had a moral duty to provide for the plaintiff’s proper maintenance and support pursuant to s 91(2)(c) of the Act – Whether the deceased’s will failed to make adequate provision for the plaintiff’s proper maintenance and support pursuant to s 91(2)(d) of the Act and if so, the degree to which further provision ought to be made to the plaintiff pursuant to s 91(4) of the Act – Consideration of mandatory and discretionary factors in s 91A of the Act – Regard to principles in Pavlidis v Pavlidis [2023] VSC 92 and Re Papaioannou [2019] VSC 844 – Held, deceased did not fail to make adequate provision for the plaintiff’s proper maintenance and support.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P D Reynolds | Clancy & Triado |
| For the Defendant | Mr N McOmish | GR Legal Lawyers & Business Consultants |
TABLE OF CONTENTS
The evidence....................................................................................................................................... 2
Background......................................................................................................................................... 3
Applicable legal principles.............................................................................................................. 9
Relevant factors................................................................................................................................ 15
The terms of the deceased’s will, any evidence of the deceased’s reasons for making the dispositions, and evidence of the deceased’s intentions............................................. 15
The nature and length of the relationship between the deceased and the eligible person 19
Any obligations or responsibilities of the deceased to the eligible person, any other eligible persons, and the estate’s beneficiaries............................................................................ 19
The size and nature of the estate............................................................................................... 21
The current – taken as at the time of the hearing – and foreseeable future financial resources, including earning capacity and financial needs, of the eligible person, any other eligible persons and any beneficiary............................................................................................ 22
Any physical, mental or intellectual disability of any eligible person or any beneficiary 23
The age of the eligible person.................................................................................................... 23
Any contribution of the eligible person, otherwise than for adequate consideration, to building up the estate or to the welfare of the deceased or the deceased’s family.................. 23
Any previous benefits to the eligible person or any beneficiary......................................... 23
Whether the eligible person was being wholly or partly maintained by the deceased, and if so, the extent and basis of such maintenance............................................................................ 23
The liability of any other person to maintain the eligible person........................................ 23
The character and conduct of the eligible person or any other person............................... 24
The effects that a family provision order would have on the amounts received from the deceased’s estate by other beneficiaries............................................................................................. 24
Any other matter the Court considers relevant...................................................................... 24
Conclusion......................................................................................................................................... 26
HIS HONOUR:
Brian Hugh McFarlane (‘the deceased’) died on 21 September 2020. He was survived by his son Adam (‘the plaintiff’) and his daughter, as well as Heather McFarlane, his second wife (‘the defendant’). The defendant has two children from a previous marriage.
The deceased made his last will on 3 August 2018 (‘the will’). The will relevantly provides:
1. PROVIDED my wife HEATHER JEAN MCFARLANE survives me for the space of one calendar month I GIVE DEVISE AND BEQUEATH to her all my real and personal estate whatsoever nature and wheresoever situate and I APPOINT her sole executrix of this will.
2. IN THE EVENT of my wife dying before me or not so surviving me I DIRECT that the following provisions shall have effect:
(a) In this clause, the words “child”, “children, “son” or “daughter” … shall be taken to include any stepchild or stepchildren of mine.
(b) I APPOINT my sons MARK ANDREW WHITEHEAD and ADAM PAUL MACFARLANE (hereinafter called “my Trustees”) executors and trustees of this my will …
(c) I GIVE DEVISE AND BEQUEATH all my real and personal estate … unto my Trustees UPON TRUST … and … to hold my residuary estate UPON TRUST to divide the same into five (5) equal parts and to dispose of them as follows:
(i) TO PAY OR TRANSFER one (1) of such parts to my son MARK ANDREW WHITEHEAD;
(ii) TO PAY OR TRANSFER one (1) of such parts to my son ADAM PAUL MCFARLANE;
(iii) TO PAY OR TRANSFER one (1) of such parts to my son ADRIAN LEIGH WHITEHEAD;
(iv) TO PAY OR TRANSFER one (1) of such parts to my daughter BROOKE MCFARLANE;
(v) TO PAY OR TRANSFER the remaining one (1) of such parts in equal shares as tenants in common to such of my grandchildren as shall survive me and attain the age of 18 years.
On 15 April 2021, probate of the will was granted to the defendant. The will appointed the defendant as executrix and gave the entire deceased estate to her. The only substantial asset of the estate is a property that was owned by the deceased and the defendant as tenants in common. From the inventory of assets and liabilities prepared by the defendant on 31 March 2021, the deceased’s share of the property is valued at $420,000 in addition to which the deceased estate included $950 in shares. The value of the estate was in dispute as discussed below.
The plaintiff has applied for further provision from the estate.
It was not in dispute that the plaintiff is a child of the deceased and an eligible person in accordance with s 90A of the Administration and Probate Act 1958 (Vic) (‘the Act’).
The issues to be determined in this proceeding were:
(a) whether the deceased had a moral duty to provide for the plaintiff’s proper maintenance and support as set out in s 91(2)(c) of the Act;
(b) whether the will failed to make adequate provision for the plaintiff’s proper maintenance and support; and
(c) if so, the degree to which further provision ought be made to the plaintiff from the estate for his proper maintenance and support.
The evidence
Evidence was received by tendered affidavits, and the plaintiff and the defendant were cross-examined.
The plaintiff relied on the affidavits of:
(a) Adam McFarlane affirmed on 21 November 2022; and
(b) Heather McFarlane sworn on 5 January 2021.
At the conclusion of the hearing, counsel for each of the parties made brief submissions and then each subsequently provided written submissions, which I have read and considered.
Background
The plaintiff is 52 years old. He and his sister, Brooke, are children of the deceased and his first wife, Lynette.
The plaintiff’s relationship with the deceased over the course of his life was not easy. The plaintiff lived with the deceased, his mother and Brooke until the plaintiff was around 16 years old. The plaintiff gave evidence that the deceased’s relationship with Lynette was volatile, and included times when the deceased was physically violent and abusive towards Lynette. The plaintiff gave evidence that he witnessed this violence, and that until he was aged 14 he would avoid these conflicts by hiding in his room. After that, he intervened physically on several occasions in defence of his mother, which he says adversely affected his relationship with the deceased.
His parents separated when the plaintiff was about 16 years old. After that, his sister continued living with his mother and the plaintiff lived with his father until he finished school when he returned to live with his mother. This was apparently a difficult time for the plaintiff, partly because of the conduct of his father, and partly because his mother subsequently entered into another relationship.
Counsel for the defendant submitted that the allegations raised by the plaintiff required a high standard of proof and that findings should not be made in relation to them, particularly given that the deceased could not answer the allegations and neither the plaintiff’s mother nor sister were called to give evidence. I do not consider that it is necessary to reach a concluded view about whether particular events happened or not. But, having observed the plaintiff giving his evidence, I accept that his experience of growing up was deeply and adversely affected by the conduct of his father towards his mother. The relevance of that to the current application is discussed further below.
The plaintiff gave evidence that, notwithstanding those issues, as he matured, he and his father maintained a relatively ordinary relationship as father and son, although not ‘the closest of relationships’, with regular but not frequent contact. The plaintiff gave evidence that the deceased attended his first wedding in 1999 and that he played golf with the deceased ‘every now and then’, and that he saw the deceased and his twin children ‘probably at least twice a year’ at ‘Easters, Christmas, around Christmas time, … there would have been other times as well, birthdays, things like that.’
In 2011, the deceased was diagnosed with cancer, and in 2014 was given a poor prognosis. After the deceased’s cancer diagnosis, the plaintiff says they spoke more frequently. The deceased became gravely ill in 2020, but this coincided with the outbreak of Covid-19 which prevented the plaintiff from seeing him more than he otherwise might have. The plaintiff described his relationship with his father as resentful, stemming from his earlier conduct.
The plaintiff divorced from his first wife in 2017. He has two children in their late teens. On 23 April 2022 the plaintiff married Amanda who has two children of her own. From the plaintiff’s closing submissions it appears that two of the four children live with them half the time. He paid child maintenance for his children until the end of 2021 and continues to provide some financial support.
He is a Detective Sergeant with Victoria Police, having worked there for around 30 years. He earns approximately $158,000 per annum before tax. He has no savings of any significance and approximately $2,600 owing on his credit card as at the date of trial. He has superannuation entitlements of $965,199.92 taxed and $1,084,012.64 untaxed. He does not have any interest in any real property and does not own a car, shares or other investments or have any benefit under a trust.
The plaintiff and Amanda currently rent a property for $3,607 per month. Amanda does not own any real property or investments apart from superannuation. Accounts in evidence indicate that she has approximately $1,000 in a transaction account but has credit card debts, arising at least in part out of marital separation, of around $25,000. She is employed and earns approximately $119,000 per annum and, as at 13 November 2022, had superannuation of $155,097.70.
The plaintiff and Amanda wish to purchase a property but do not have sufficient funds for a deposit. That is the primary reason the plaintiff has brought this proceeding. The plaintiff has made inquiries which indicate that the plaintiff could borrow $770,000 with a 20% deposit of $237,000, which, it was submitted, would be serviceable.
The defendant is now 71 years of age, having been born on 9 May 1952. She has two adult children from a previous relationship, Mark and Adrian Whitehead.
The defendant commenced her relationship with the deceased in about 1989. The deceased moved into the defendant’s home because at that stage the defendant did not own a home. Shortly prior to their marriage, they bought the property at 118 Seebeck Road, Rowville, Victoria (‘Rowville property’), as tenants in common, which was then a vacant block of land. They married in May 1991 and built a house at the Rowville property. The defendant sold her home and contributed the proceeds to their relationship.
While the defendant contributed this initial capital to the relationship, they both worked hard over the years and built their assets, which were typically jointly held. During their relationship, the defendant did domestic duties including cooking, cleaning, washing and ironing and also did gardening and property maintenance in later years. In addition to these contributions, the deceased also had a stable, successful career as a retail manager, buyer and product developer. In 2010, the defendant left her job to work at the deceased’s business. The defendant notes that the deceased had long periods of unemployment including most of 2001 to 2004.
The defendant had a loving and supportive relationship with the deceased. She says they enjoyed camping, fishing, travelling, playing golf, spending time with friends and socialising together. They also enjoyed hosting family celebrations and spending time with their nine grandchildren.
In around 2009, the defendant and the deceased bought a home together at 14 Ian Road, Mount Martha, Victoria (‘Mount Martha property’). The defendant contributed the $60,000 deposit, which had been a gift from her mother.
After the deceased was diagnosed with lung cancer in 2011, he had chemotherapy and in 2012 had three quarters of his right lung removed. Thereafter, the deceased had much ongoing treatment and the defendant cared for him. The defendant gave evidence that in the years following his cancer diagnosis the deceased had three major surgeries, including two lots of brain surgery, a heart attack, four rounds of chemotherapy, three cycles of radiotherapy, months of rehabilitation and countless medical appointments and hospitalisations. The defendant says that the deceased suffered from depression during his illness. Further, in 2015, the deceased suffered an acute onset of peripheral nerve disease, resulting in severe weakness and loss of feeling in his arms, hands, legs and feet. He spent three months in rehabilitation, and the defendant became the deceased’s full-time carer.
The defendant gave evidence that the latter months of the deceased’s life were the most difficult. In that period, the defendant showered, dressed and toileted him, as well as bandaged his sores and wounds up to twice a day. He could not support his own weight and the defendant had to do the heavy lifting, including lifting the deceased’s legs into bed and moving him from the bed to his reclining chair during the night, along with his oxygen bottle, to make him more comfortable. These were obviously onerous tasks that took a toll on the defendant, but tasks which she willingly undertook in the context of a loving and supportive relationship.
The defendant has chronic back and neck issues which she says were caused largely as a result of caring for the deceased. She requires physiotherapy, is medicated for back pain and high blood pressure, has cholesterol issues and suffers from psoriasis.
The defendant is retired, and is dependent upon her savings and a Department of Veterans’ Affairs war widow’s pension of approximately $25,000 per year.
The defendant’s assets are:
(a) a half interest in the Rowville property;
(b) the Mount Martha property, which was held jointly by the defendant and the deceased and passed to the defendant by right of survivorship;
(c) cash at bank of $540,000, which was held jointly by the defendant and the deceased and passed to the defendant by right of survivorship;
(d) superannuation of $495,000; and
(e) the deceased’s superannuation value of $227,000.
As noted above, the only asset of substance in the estate is the deceased’s half interest in the Rowville property which was held by the deceased and the defendant as tenants in common. The parties are not in dispute that the liabilities of the estate, excluding the defendant’s costs of defending this proceeding, total $9,771.19. The defendant gave evidence that these costs were in excess of $100,000.
There was a dispute between the parties as to the value of the Rowville property. The defendant placed a value of $420,000 on the deceased’s half interest in the Rowville property. That value was based on a council rates notice for the year ending 2022, which assessed the capital improved value of the property as $835,000.
The plaintiff relied on the rates notice for the 2022–2023 year which showed a capital improved value of $1.01 million and also on a valuation dated 20 October 2022 by Stuart Hooper of Imperial Valuations and Advisory Services, who inspected the property and valued it at $975,000. Mr Hooper was not cross-examined. Ultimately, the difference between the values of the deceased’s half interest in the Rowville property proposed by the plaintiff and the defendant is the difference between approximately $420,000 and $487,500.
The defendant gave evidence that the Rowville property requires extensive repair works. Photos were produced showing a collapsed retaining wall, broken pergola, window frames and general wear and tear. The defendant estimates that the cost to repair the property would be approximately $302,058. That calculation was based upon a building quote in the amount of $232,100, and various other quotes for other actions making up the balance. Approximately $100,000 of that total is made up of complete renovations of the kitchen, bathroom, ensuite and laundry. The plaintiff submitted that the works proposed were more than just maintenance, and went to extensive, and perhaps unnecessary, ‘deluxe renovation.’
The evidence about these matters was not perfect. Experts were not called and it is unclear precisely where to draw the line between repairs and improvements. In my view, it is not necessary to draw a bright line between the two. It is sufficient for present purposes to say that it is apparent on the evidence that there are some obvious repairs to be done to the Rowville property, but that necessary repairs may not extend as far as the defendant submits. Ultimately, the question is not determinative.
There was a dispute between the parties as to the value of the Mount Martha property. The defendant submitted the property was worth $1,500,000 while the plaintiff relied on a curb side valuation which estimated the current market value as at 27 October 2022 to be ‘approximately $1,700,000 – $1,800,000’. The plaintiff attempted to gain access to the Mount Martha property in order to obtain a valuation but the defendant apparently refused access for that purpose. The plaintiff submits that the Court should infer from the defendant’s refusal to give access for the purposes of a valuation, that the process of obtaining a valuation would not have assisted the defendant’s case. I do not consider that such an inference can be drawn as it is unclear what valuation may have been provided had access been granted. No valuers were called to give evidence, in which circumstances it is difficult to form a concluded view as to the value of the property. For present purposes, I will proceed on the basis that the property is valued in the range $1,500,000 to $1,800,000. Obviously, this property does not form part of the estate, but it is relevant to the question whether, and if so what amount, provision should be made.
The defendant estimates that the cost to repair the Mount Martha property would be approximately $560,000. The plaintiff challenged some of this evidence on the basis that there was inadequate evidence of the instructions given to the builder who quoted for repair works. The plaintiff further submits that the plaintiff had sought details of the instructions given to the builder and that the defendant had said she was not aware of any such requests. The plaintiff submits that such evidence should be rejected having regard to evidence that her solicitor instructed her about the matter and in light of her evidence that she provided the builder with copies of the plans. The more general attack on the evidence is that, in reality, the quotation involved a complete renovation of the entire home and not merely necessary repairs. There is some force to the submission that the proposed renovations are extensive. In the circumstances, it is difficult and unnecessary to resolve that issue.
Applicable legal principles
Section 91(1) of the Act provides that the Court may order that provision be made out of the estate of a deceased person for the proper maintenance and support of an eligible person.
Section 91(2) of the Act provides that the Court must not make a family provision order under s 91(1) of the Act unless it is satisfied that:
(a) an applicant is an eligible person;
(b) in the case of certain types of ‘eligible persons’, that the person was wholly or partly dependent on the deceased for proper maintenance and support;
(c) at the time of death, the deceased had a moral duty to provide for the eligible person’s proper maintenance and support; and
(d) the distribution of the deceased’s estate fails to make adequate provision for the proper maintenance and support of the eligible person.
In making a family provision order, s 91A(1) provides that the Court must have regard to:
(a) the deceased’s will, if any;
(b) any evidence of the deceased’s reasons for making the dispositions in the will; and
(c) any other evidence of the deceased’s intentions in relation to providing for an eligible person.
In making a family provision order, s 91A(2) of the Act provides that the Court may take into account:
(a) the nature of the relationship between the deceased and the eligible person, including, if relevant, the length of the relationship;
(b) any obligations or responsibilities of the deceased to the eligible person, any other eligible persons, and the estate’s beneficiaries;
(c) the size and nature of the estate;
(d) the current – taken as at the time of the hearing – and foreseeable future financial resources, including earning capacity and financial needs, of the eligible person, any other eligible persons and any beneficiary;
(e) any physical, mental or intellectual disability of any eligible person or any beneficiary;
(f) the age of the eligible person;
(g) any contribution of the eligible person, otherwise than for adequate consideration, to building up the estate or to the welfare of the deceased or the deceased’s family;
(h) any previous benefits to the eligible person or any beneficiary;
(i) whether the eligible person was being wholly or partly maintained by the deceased, and if so, the extent and basis of such maintenance;
(j) the liability of any other person to maintain the eligible person;
(k) the character and conduct of the eligible person or any other person;
(l) the effect that a family provision order would have on the amounts received from the deceased’s estate by other beneficiaries; and
(m) any other matter the Court considers relevant.
Pursuant to ss 91(4)(a) and (b) of the Act, in determining the quantum of any provision, the Court must take into account the degree to which, at the time of death, the deceased had a moral duty to provide for an applicant, and the degree to which the distribution of the estate fails to make adequate provision for the proper maintenance and support of an applicant. The general principles applicable to an application for a family provision order, including considerations relevant to adult children, were considered recently in Pavlidis v Pavlidis (‘Pavlidis’) as follows:[1]
[1] [2023] VSC 92, [88], [90]–[94] (Forbes J) (citations omitted).
[88] Where an amount is ordered, it must not provide for an amount greater than is necessary for proper maintenance and support, and in the case of an adult child must be proportionate to the degree of dependency on the deceased at the time of her death.
…
[90]The power to make a family provision order displaces the testator’s freedom to dispose of her property as she sees fit. It is based upon the recognition that a testator has a responsibility to make provision for certain persons, and intrudes only when satisfied that the obligation has not been met. Historically this has been described as a “moral duty”, distinguishing it from a legally enforceable obligation. The extent of the obligation is judged by the Court placing itself in the position of a “wise and just testator”, and judged according to current community standards.
[91]When the Court considers whether the estate has made adequate provision, each word in the phrase “proper maintenance and support” is to be given weight and meaning. Proper maintenance and support is a broader concept than the alleviation of poverty. The Court can take into account the vicissitudes of life and needs that arise from an eligible person’s inability to meet unexpected demands on their resources. It is tempered by the capacity of the estate to meet the need for the claimant and others to whom the testator has an obligation.
[92]The exercise does not permit a court to achieve equality or fairness amongst those entitled to share the testator’s bounty. In the context of a claim by an adult son it is said:
“‘Adequate’ and ‘proper’ in particular must be considered as words which must always be relative … . What is ‘adequate’ must be relative not only to his needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and the other demands upon it, and also what the testator regarded as superior claims or preferable dispositions. The words ‘proper maintenance and support’, although they may be elastic, cannot be pressed beyond a fair meaning … it was never meant that the Court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator’s decisions expressed in a will have only prima facie effect, the real dispositive power being vested in the Court.” [Quoting Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9, 19 (Dixon CJ)].
[93]The way these principles operate for an adult child were summarised by Hallen J in Walsh v Walsh [[2013] NSWSC 1065, [121]]. The summary included:
“(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. …
(c) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child’s life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. … But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise, they would be left destitute …
(d) If the applicant has an obligation to support others, [such as a parent's obligation to support a dependent child,] that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant … But the Act does not permit orders to be made to provide for the support of third persons that the applicant, however reasonably, wishes to support, where there is no obligation of the deceased to support such persons …
(e) There is no need for an applicant adult child to show some special need or some special claim …
(f) The adult child’s lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration … Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant … In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased …
(h) Although some may hold the view that equality between children requires that ‘adequate provision’ not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration, individual conduct, circumstances, financial resources, including earning capacity, and financial needs, in the Court’s determination of an applicant’s case.”
[94] The adequacy of provision is assessed at the time of death, in light of matters known or reasonably foreseeable to a testator. Where further provision is to be made, the Court assesses need and the claimant’s circumstances as at the time of trial.
In Re Papaioannou (‘Re Papaioannou’),[2] the Court set out the principles relevant to a spouse’s claim for further provision:
[2] [2019] VSC 844, [16]–[22] (McMillan J) (citations omitted) (‘Re Papaioannou’).
[16] Pursuant to ss 91(4)(a) and (b) of the Act, in determining the quantum of any provision, the Court must take into account the degree to which, at the time of death, the deceased had a moral duty to provide for an applicant, and the degree to which the distribution of the estate fails to make adequate provision for the proper maintenance and support of an applicant.
[17] In relation to all claims, pursuant to s 91(5)(a) of the Act, the amount of provision must not provide for an amount greater than is necessary for an applicant’s proper maintenance and support.
[18] The moral duty of a deceased to provide for their spouse’s proper maintenance and support, expressed as a broad general rule, is to provide the security of an appropriate home in which to live, a secure income and a fund to meet unforeseen contingencies, with an entitlement to independence, self-respect and autonomy. As with all general rules, each proceeding ultimately rests upon statutory inquiry of the facts and circumstances, and involves consideration of the applicant’s station in life, age, sex, health and financial resources, the size and nature of the estate, the totality of the relationship between the applicant and the testator, and the relationship between the testator and other persons who have legitimate claims upon his or her bounty.
[19] The determination of what provision should be made for the plaintiff, in light of all the relevant circumstances, must be answered by reference to a wise and just testator. The Court must place itself in the position of such a testator and consider what he or she ought to have done in the circumstances of the case. The Court must be mindful to interfere with the terms of a will only where a testator has failed in his or her moral duty.
[20] In determining the extent of any provision, the Court must have regard to the relative concepts of ‘adequate’ and ‘proper’, which are assessed by reference to the Court’s inherent knowledge and inquiry into current social conditions and standards. In this context, it is paramount that an applicant demonstrate need in order to be successful in his or her claim; mere proof of a moral claim is not in itself adequate. However, an applicant is not required to show that his or her circumstances are destitute and, as such, the need is ‘not restricted to the requirements of basic necessity or sustenance’. The Court must not allow an amount that is greater than is necessary for an applicant’s proper maintenance and support. The nature and content of what is adequate provision is a flexible concept, adapted to conform to acceptable community standards, and involves a broad evaluative judgment not constrained by preconceptions and predispositions. Other relevant constraints or limiting factors may be that further provision should be made only if, and to the extent that, it is necessary to alter the will to make adequate provision for an applicant’s proper maintenance and support, or that any further provision must be limited by balancing the needs of the applicant against the proper claims that a testator recognised needed to be satisfied out of his or her testamentary bounty.
[21] Where there are competing claims, the Court’s enquiry necessarily involves a balancing exercise between the claims of other beneficiaries, the needs of an applicant and the size of the estate. The appropriateness of proposed solutions, and indeed whether there is in fact an obligation to provide a home for an applicant, depends on all the facts and circumstances of the case, including the moral obligation owed by the testator to an applicant for provision. It is often said that the obligation of a deceased is to ensure a surviving spouse has a roof over his or her head. That roof has been provided either by matrimonial homes being awarded absolutely, sufficient funds to purchase another suitable residence, a life interest in a property, or even a mere right of occupancy.
[22] The assessment as to whether the testator failed to make adequate provision for an applicant’s maintenance and support is determined by reference to matters that were known, ought to have been known, or were reasonably foreseeable to the deceased at the time of his or her death. The assessment as to what provision the court should make is determined at the date of the trial, taking into account the plaintiff’s circumstances at that time. The plaintiff bears the onus of proving the extent of any provision that should be granted.
In this case, the defendant is not making a claim, and I am conscious of what was said in Poole v Barrow,[3] where the Court stated:
It must be remembered in applications such as this claim that ... it is not for ... beneficiaries to establish a moral obligation on the part of the deceased for their provision. The [beneficiary] received provision and has no case to establish. In this case, it is for the plaintiff to establish the deceased’s moral obligations to her and the need for further provision.[4]
[3] [2014] VSC 576 (McMillan J).
[4] Ibid [80] (McMillan J).
I will consider each of the factors identified in the relevant provisions.
Relevant factors
The terms of the deceased’s will, any evidence of the deceased’s reasons for making the dispositions, and evidence of the deceased’s intentions
Pursuant to s 91A(1) of the Act, the Court must have regard to the deceased’s will, any evidence of the deceased’s reasons for making the dispositions in the will, and any other evidence of the deceased’s intentions in relation to providing for the plaintiff. In Re Marsella,[5] the Court noted that:
While s 91A(1) of the Act mandates that the Court must take into account what a testator provided in his or her will and whether he or she gave any reasons or made his or her intentions known in relation to the provision made for an eligible person, it has always been the case that courts have taken into account the terms of any expressions of the deceased in admissible form. An express legislative requirement that the Court take such expressions into account, when determining an application, does not mean that such evidence, whether by will or in another form, suddenly takes on some higher status. The weight to be attached to such statements will depend on the specific circumstances of the particular case.[6]
[5] [2018] VSC 312.
[6] Ibid [77] (citations omitted).
By his will, the deceased left his entire estate to the defendant. The will does provide that if the defendant predeceased the deceased, then his estate would be divided into five equal parts with the plaintiff receiving one of those parts. The defendant submits that the gift over is irrelevant because it was only to take effect in the event the defendant predeceased the deceased and that did not in fact occur. But the defendant also gave evidence that she and the deceased wanted to leave their estates to each other, and then in five equal shares one share to each of their children and the final share to their grandchildren. The defendant’s evidence was as follows:
Mr McOmish: So, at that time when you see [your solicitor], which is around August 2018, did you get a new will as well?
The defendant: Yes, I did. We both had new wills. Adam was the co-executor of my will along with my son. Both our wills were identical in the shares that we left our four children. I mean, between us we had four children. So, they were actually pretty much – or they were identical. We had the same executors; we had the same split with who we were leaving our estates to. Primarily, we wished to leave each other, initially, our estates, and then if something happened to both of us, obviously, at the same time or within the month, we would actually list it for the split of how we wanted it to be divided between our children.
It is clear from this evidence and from the terms of the will that the defendant and the deceased each intended to leave their estates to each other, or if one predeceased the other, then they intended to leave their estate in five equal shares to each of their children and collectively to their grandchildren.
The plaintiff submits that it is significant that the deceased wanted one fifth of his estate to pass to his son. The plaintiff submits that based on the deceased’s joint assets being divided equally between him and the defendant, a one fifth share would be about $367,000 to $377,000 of his net assets. But the plaintiff’s submission does not pay sufficient regard to the fact that the terms of the will, and the apparent intention of each of the deceased and the defendant, was that upon the death of either of the deceased or the defendant, the other would enjoy all of the assets for their lives and, at its highest, their children and grandchildren were only to receive their shares upon the death of both the deceased and the defendant. In that sense, it is not correct for the plaintiff to say that the deceased intended him to receive an equal fifth share of the deceased’s joint assets at their current value. The defendant is 71 years old and there is no reason to believe she will not live for many more years. It is unclear what her needs will be and what will become of the assets that the deceased and the defendant accumulated during the course of their lives and relationship. There is evidence that the deceased intended that the plaintiff would receive a one-fifth share of what is left of his and the defendant’s assets upon their deaths, but that is not to say the deceased intended the plaintiff to have his share immediately. In the context of the terms of the will, and the deceased’s intention, the plaintiff is seeking to accelerate what he discerns to be his entitlement to a share of the deceased’s accumulated wealth.
In the examination-in-chief, the defendant was taken to a will that she had prepared on 17 June 2021 (’17 June 2021 will’), after the deceased’s death, but prior to the plaintiff issuing this proceeding. In that will, the defendant provided that one fifth of her residuary estate was to pass to the plaintiff. Counsel for the defendant cross-examined the plaintiff about his expectations to a share of the deceased’s assets, and the 17 June 2021 will, as follows:
Mr McOmish: So just one final thing to take you to. Page 461 of the court book. Page 460. This is Mrs McFarlane’s will of 17/06/21?
The plaintiff: Yes.
Mr McOmish: And at page 461, you can see that – I should state that 17/06/21 being nine months after your father died?
The plaintiff: Yes.
Mr McOmish: Mrs McFarlane does a new will, and pursuant to paragraph – on page 461, paragraph 42, you’re to receive one fifth of her estate?
The plaintiff: That’s what it says, yes.
Mr McOmish: No further questions, Your Honour.
In her examination-in-chief, the defendant was taken to the 17 June 2021 will and asked who, in that will, she left her estate to, to which she answered: ‘I left my estate to be shared between our four children and our grandchildren’. Under cross-examination, it became apparent that the defendant had executed a further will after the plaintiff issued this proceeding. The defendant described that will as providing for all the current beneficiaries apart from the plaintiff. The defendant was re-examined on the question of her most recent will, and her evidence was as follows:
Mr McOmish: In respect of the new will that you’ve executed?
The defendant: Yes.
Mr McOmish: And I think it’s fair to surmise that you have cut the plaintiff out of that will. What were the reasons for that change?
The defendant: The reasons for the change was that I wanted to protect the other beneficiaries. The plaintiff has [sic] um, wanting to take basically the whole of, um, the estate that my husband left, a second, um, part of our – our home. And I was very, very concerned that I – I don’t know what’s going to be left in my estate when I – when I pass away. I mean obviously, if [sic] it would be dependent on what happens in this trial. Um, if Adam was to get nothing, well then I would obviously have to look at that and reassess that. Because it was always, I guess, a commitment, from the two of us that we look after our children. But something else that’s also, I guess, I’ve realised in this proceeding, that I – probably my husband and I didn’t really realise before. Because we basically thought that the fair thing to do was to leave our estate equally to all our children. But after these proceedings, I’ve actually found out, and I’ve realised that a lot of what you leave behind should be based on how your beneficiaries, um, or the difference in what those beneficiaries have and what their needs are. And that’s something that I, very seriously, need to consider.
It is apparent from this evidence that the defendant’s current intention is to exclude the plaintiff from her will, but there is a degree of uncertainty as to what will happen in the future.
The plaintiff submits that his position is fortified by the fact that in the defendant’s most recent will, which reflects her current intention, she has excluded the plaintiff as a beneficiary.
It was open to the deceased and the defendant to prepare mutual wills that could have bound each other to provide equal shares to children and grandchildren in accordance with any such intention. It appears they did not do so, which left the survivor, in this case the defendant, at liberty to change her will as she saw fit. The defendant’s evidence in that regard was that she changed her will after the plaintiff instituted this proceeding. In that respect, there is no way of knowing whether the defendant’s will would have continued to provide for a share of her estate to pass to the plaintiff had the plaintiff not issued this proceeding, but it does seem that the plaintiff’s actions have precipitated the defendant’s most recent change of her will to exclude him.
The nature and length of the relationship between the deceased and the eligible person
As noted above, the deceased’s relationship with the plaintiff was not straightforward. On the plaintiff’s evidence, their relationship was significantly affected by events he witnessed between the deceased and the plaintiff’s mother. I do not consider it necessary to form a concluded view as to whether any particular events happened or not, but I accept that the degree to which the plaintiff had ongoing contact with the deceased was informed, and can at least in part be explained by, the residual effects of those early years. I accept that the plaintiff was not in contact with the deceased as much as he might have been over the years, but I do not consider that any lack of contact in the circumstances is a matter that should count against him, and I also accept that in the deceased’s later years, as his health was declining, the plaintiff made a greater effort to stay in contact with the deceased.
Any obligations or responsibilities of the deceased to the eligible person, any other eligible persons, and the estate’s beneficiaries
The plaintiff acknowledges that the deceased had a responsibility to provide for the defendant who was the deceased’s partner for 32 years, his wife for 29 years, and who cared for him over 10 years as he suffered from lung cancer. The defendant submits that they had a loving relationship with an active social life and that they both contributed financially and in non-financial ways in their relationship. The defendant identified a number of sacrifices she made in the context of their relationship including giving up her weekends to assist with the deceased’s career, and devoting herself to the care of the deceased including during periods when he was unable to look after himself. It was noted that these might be considered the natural obligations of a spouse. In a sense that is so, but it does not detract from the amount of time and effort involved, nor does it detract from the psychological and physical burdens of providing such care.
As noted above in Re Papaioannou, the Court described the moral duty of a deceased to a spouse in the following terms:
The moral duty of a deceased to provide for their spouse’s proper maintenance and support, expressed as a broad general rule, is to provide the security of an appropriate home in which to live, a secure income and a fund to meet unforeseen contingencies, with an entitlement to independence, self-respect and autonomy. As with all general rules, each proceeding ultimately rests upon statutory inquiry of the facts and circumstances, and involves consideration of the applicant’s station in life, age, sex, health and financial resources, the size and nature of the estate, the totality of the relationship between the applicant and the testator, and the relationship between the testator and other persons who have legitimate claims upon his or her bounty.[7]
[7]Re Papaioannou (n 2) [18] (McMillan J) (citations omitted).
The plaintiff submits that in addition to the deceased’s obligation to provide for the defendant, the deceased also had a responsibility to provide for him as his biological son. As noted above (at para 41), the Court in Pavlidis quoted Hallen J in Walsh v Walsh[8] who summarised how the principles applicable to an application for a family provision order apply in relation to adult children as follows:
[8][2013] NSWSC 1065, [121].
(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. …
(c) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child’s life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. … But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise, they would be left destitute …
(d) If the applicant has an obligation to support others, such as a parent’s obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant … But the Act does not permit orders to be made to provide for the support of third persons that the applicant, however reasonably, wishes to support, where there is no obligation of the deceased to support such persons …
(e) There is no need for an applicant adult child to show some special need or some special claim …
(f) The adult child’s lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration … Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant … In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased …
(h) Although some may hold the view that equality between children requires that “adequate provision” not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration, individual conduct, circumstances, financial resources, including earning capacity, and financial needs, in the Court’s determination of an applicant’s case.[9]
[9]Ibid.
The size and nature of the estate
In this case, the estate is relatively modest, particularly having regard to the costs associated with a proceeding such as this. The plaintiff says that the estate’s interest in the Rowville property should be put at $487,500, whereas the defendant says the value of the half interest should be put at $420,000. The parties are broadly in agreement that the estate has incurred expenses of approximately $10,000 excluding the costs of defending this proceeding. The difference between these figures is not large.
The current – taken as at the time of the hearing – and foreseeable future financial resources, including earning capacity and financial needs, of the eligible person, any other eligible persons and any beneficiary
The plaintiff is 52 years old, and is employed as a Detective Sergeant with Victoria Police. He does not have any savings or assets to speak of, apart from his superannuation which is currently valued at $965,199.92 taxed, and $1,084,012.64 untaxed. In the year ending 30 June 2022, his salary was $157,838 exclusive of superannuation. It is likely he has a number of working years ahead of him. The plaintiff’s wife is employed and earns approximately $119,000 per annum and, as at 13 November 2022, has superannuation of $155,097.
The defendant is now 71 years old. The defendant is retired, and is dependent upon her savings and a Department of Veterans’ Affairs war widow’s pension of approximately $25,000 per year.
The defendant’s assets are:
(a) a half interest in the Rowville property;
(b) the Mount Martha property, which was held jointly by the defendant and the deceased and passed to the defendant by right of survivorship;
(c) cash at bank of $540,000, which was held jointly by the defendant and the deceased and passed to the defendant by right of survivorship;
(d) superannuation of $495,000; and
(e) the deceased’s superannuation value of $227,000.
Any physical, mental or intellectual disability of any eligible person or any beneficiary
The plaintiff did not say that he had any particular health issues. He is on blood pressure medication that costs around $30 per month, and nicotine replacement currently at approximately $220 per month.
The defendant gave evidence that she has blood pressure issues, high cholesterol, psoriasis, back pain and neck pain. She has been diagnosed with degenerative chronic low back pain and bilateral leg pain.
The age of the eligible person
The plaintiff is 52 years old.
Any contribution of the eligible person, otherwise than for adequate consideration, to building up the estate or to the welfare of the deceased or the deceased’s family
As noted above, the plaintiff did not have as close a relationship with the deceased as he might have. He worked for a short time with the deceased but otherwise had reasonably modest contact with him over the years. As described above, a reason for that may be found in the plaintiff’s reaction to the conduct of the deceased when he was still married to the plaintiff’s mother. This discretionary factor is directed towards contributions that were made, and in that respect it might be said that such contributions were minimal at best, but explicable from the plaintiff’s point of view.
Any previous benefits to the eligible person or any beneficiary
The deceased put $500 towards the plaintiff’s first wedding.
Whether the eligible person was being wholly or partly maintained by the deceased, and if so, the extent and basis of such maintenance
The plaintiff was not being maintained wholly or partly by the deceased.
The liability of any other person to maintain the eligible person
The parties each noted that the plaintiff’s wife has an obligation to maintain him and that the plaintiff’s mother may have an obligation to provide for him in her will.
The character and conduct of the eligible person or any other person
The defendant did not in closing submissions submit that the plaintiff’s character should weigh against any order for provision. The defendant did submit that the plaintiff’s current financial position was of his own making, including his settlement of matrimonial proceedings with his ex-wife on unnecessarily unfavourable terms and failing to save for a deposit. The plaintiff submitted that the settlement of the matrimonial issues was reasonable as it involved the plaintiff receiving more than 40 per cent of the matrimonial asset pool in circumstances where his income was $120,000 per annum and his ex-wife’s income was $80,000 per annum. I do not accept that the plaintiff’s conduct in this regard should count against him in the current proceeding.
The plaintiff candidly acknowledged the good character and conduct of the defendant, particularly in the deceased’s last years where she was required to care for him as his health deteriorated.
The effects that a family provision order would have on the amounts received from the deceased’s estate by other beneficiaries
Because the defendant is the only beneficiary under the deceased’s will, any order for provision to be made will come out of her share of the estate. Initially, the plaintiff was seeking in the vicinity of $400,000, which, taking into account expenses, would practically exhaust the whole of the estate. The plaintiff’s position was moderated during the course of the trial and the plaintiff ultimately submitted that an order for payment of $265,000 would be appropriate in the circumstances. Such an order would have a significant effect on the amount received by the defendant as the sole beneficiary of the estate. That is particularly so when one considers the legal costs that have been incurred.
Any other matter the Court considers relevant
I consider it relevant to take into account the practical effect that an order for provision would have upon the plaintiff and defendant.
An order for provision would likely assist the plaintiff to purchase a property in circumstances where he is currently unable to. He has not accumulated any capital of significance other than his superannuation, which in part is due to the breakdown of his first marriage. It is entirely understandable that he wishes to purchase a property with his second wife. He is not a young man, but neither is he an old man, and he has secure employment and some years ahead of him where it would be expected he will be able to continue to earn a decent income, and add to his savings. His children, and those of his partner, are on the cusp of adulthood and it might be expected would require less financial support in coming years than they have in the past. The plaintiff also has approximately $1 million in superannuation which should increase over the next decade or so, and will be available to him when the time comes.
The defendant is 71 years old. She does not work but receives a widow’s pension of $27,000 a year. She has some health issues including a degenerative back condition. There is no particular reason to expect that the defendant will not live for many more years, which will require her to draw on her pension and savings.
The defendant has two properties which she and the deceased owned for many years and to which each of them contributed. Each of those properties are an important part of the defendant’s life. She has lived in the Rowville area her whole life and built the Rowville property with the deceased. It is near her doctor, dentist, physiotherapist and hairdresser. The defendant describes the Mount Martha property as her ‘little sanctuary’ where she also spends significant time. It is close to friends and family, including her son and seven grandchildren. The defendant and the deceased accumulated those two properties during their lives and built their lives around them. I am satisfied that the deceased intended the defendant to continue to hold and enjoy those assets after he died. Each of the Rowville and Mount Martha properties require repairs and maintenance. It is not necessary to form a concluded view as to what repairs or maintenance are necessary and how much they may cost. It suffices to say that there are obviously aspects of each of the properties that require attention and that will no doubt continue into the future. I am satisfied that at present the defendant has sufficient financial resources to effect repairs and maintenance of the properties, however it is also likely that such repairs and maintenance would significantly deplete her financial resources and render her position less secure than it is at present. An order for provision out of the estate would reduce the defendant’s financial position and would necessarily render her financial future less secure. There may come a time when the defendant is unable or unwilling to continue to maintain each of the Rowville and Mount Martha properties, but it is clear that she is not presently at that point, and wishes to continue living the life she led with the deceased.
Conclusion
Taking into consideration all relevant factors and surrounding circumstances, I am not satisfied that the deceased failed to make adequate provision for the plaintiff’s proper maintenance and support.
It is understandable that the plaintiff might feel that his father failed to make adequate provision for him in accordance with his obligation having regard to the plaintiff’s financial position. Such obligations are acknowledged in authorities such as Walsh v Walsh (cited above), where, as noted there, an adult child is not required to establish some special need or claim. However, the question whether provision should be ordered must always be answered having regard to all the circumstances. And in this case they include:
(a) the extent of funds available from the estate, which are reasonably modest; and
(b) the fact that the plaintiff is securely employed, has a wife who is employed, has a number of working years ahead of him in which to accumulate wealth, and has a superannuation policy that is currently worth in excess of $1 million.
Beyond the apparent intention of the deceased that the defendant was to receive his estate, I consider a significant factor to be that, by the terms of his will, the deceased acted consistently with his obligation to ensure that his wife of 32 years might be provided with ‘the security of an appropriate home in which to live, a secure income and a fund to meet unforeseen contingencies, with an entitlement to independence, self-respect and autonomy’.[10] Having regard to the modest size of the estate, any order for provision would in my estimation have a significant impact on the defendant’s life and financial security.
[10]Re Papaioannou (n 2) [18] (citations omitted).
Because I am not persuaded that the jurisdictional question of whether the distribution of the deceased’s estate had failed to make adequate provision for the proper maintenance and support of the plaintiff, the application must be dismissed.
I will hear the parties as to costs.
SCHEDULE OF PARTIES
| S ECI 2021 03780 | |
| BETWEEN: | |
| ADAM PAUL MCFARLANE | Plaintiff |
| - v - | |
| HEATHER JEAN MCFARLANE (who is sued as the Executor of the Estate of BRIAN HUGH MCFARLANE, deceased) | Defendant |
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