McLean v Rykers: IMO the will and the estate of Nora Backman, deceased
[2019] VSC 762
•26 November 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST
S CI 2017 01745
IN THE MATTER of Part IV of the Administration and Probate Act 1958
and
IN THE MATTER of the will and the estate of NORA BACKMAN, deceased
| LEONIE McLEAN | Plaintiff |
| v | |
| ELIZABETH RENEE RYKERS (who is sued as Executor of the Will of NORA BACKMAN, deceased) | Defendant |
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JUDGE: | Daly AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 12 November 2019 |
DATE OF JUDGMENT: | 26 November 2019 |
CASE MAY BE CITED AS: | McLean v Rykers: IMO the will and the estate of Nora Backman, deceased |
MEDIUM NEUTRAL CITATION: | [2019] VSC 762 |
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TESTATORS FAMILY MAINTENANCE – Application for a family provision order under Part IV of the Administration and Probate Act 1958 (Vic) (‘Act’) by adult daughter – Application made against executrix and beneficiary of the deceased’s estate – Defendant has been served but did not defend the proceeding – Moral duty of a testator to make adequate provision for proper maintenance and support – Collicoat v McMillan [1999] 3 VR 803, referred to – Applicant in poor health, receives a disability pension and has limited financial resources and earning capacity – Factors under s 91A(2) of the Act considered – Defendant liable as personal representative for premature distribution of the estate – Walters v Perton (No 3) [2019] VSC 733, referred to.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R K Davis | marshalls+dent+wilmoth |
| For the Defendant |
HER HONOUR:
Background
Nora Backman (‘deceased’) died on 5 September 2016, at the age of 87. At the time of her death, the deceased was a resident of the ‘TLC Aged Care’ (‘nursing home’) in Hallam.
The deceased was survived by her two children, the plaintiff and the defendant, the latter being the sole executrix and sole beneficiary of the deceased’s estate. The plaintiff brings an application for provision from the deceased’s estate under Part IV of the Administration and Probate Act 1958 (Vic) (‘Act’). The plaintiff also alleges that the defendant has breached her duty as the executrix of the deceased’s estate by distributing the estate prematurely, and as such should be personally liable for any consequent loss suffered by the plaintiff. The plaintiff’s application is unopposed, as the defendant did not appear at trial, or on any prior occasion during the course of the proceeding.
The deceased married Jack Percival Backman in Melbourne in 1952, and they raised two children. The defendant is the deceased’s elder child. She was born in October 1952 and is now 67 years of age. The plaintiff is the deceased’s younger child. She was adopted by the Backmans after she was born in November 1965, and is now 54 years of age.
From an early age the plaintiff had a close and mutually supportive relationship with the deceased and her late father, who died in 2009. From 2009 to around 2014, the plaintiff became the deceased’s primary carer. The plaintiff assisted the deceased, driving her to medical appointments, cooking meals, grocery shopping, and doing general household duties.
In about 2014, after having been estranged from her family for about sixteen years, the defendant resumed a relationship with the deceased. The plaintiff believed that the deceased accepted the defendant back in her life to keep in contact with the defendant’s three daughters and their children. From around 2014, after the defendant accused the plaintiff of failing to take proper care of their mother, the defendant did not permit the plaintiff to see the deceased. It is unclear what steps the plaintiff took to remain in contact with her mother, although there is evidence that the plaintiff visited the nursing home on at least one occasion.
In August 2015, the defendant arranged for the deceased to go into a nursing home. The deceased provided the nursing home with the sum of $350,000.00 for an accommodation bond.
In or around November 2015, the defendant sold the deceased’s residential home at 5 Alexander Avenue, Dandenong (‘Dandenong property’) under a power of attorney dated 14 August 2014 for $526,000.00.
The deceased resided at the nursing home until her death in September 2016. The deceased’s death certificate stated that the deceased’s cause of death was ‘flare of cold agglutinin haemolytic anemia’, and her last illness included dementia.
When the deceased executed a will on 18 November 2009 (‘2009 will’), the deceased left all her estate to the plaintiff and appointed the plaintiff as the executrix of her estate. On that date, the deceased also appointed the plaintiff as her attorney under an enduring power of attorney (financial) and her agent under an enduring power of attorney (medical treatment) under s 5A of the Medical Treatment Act 1988 (Vic).
The plaintiff exhibited to her affidavit an undated letter from the deceased to her then solicitor, Ms Robyn Calder, which the plaintiff believed was sent in around early February 2009, in which the deceased explained the reasons for excluding the defendant from the 2009 will.
The letter stated:
I, Nora Backman concerning Elizabeth Rykers. Gave her my superannuation [$60,000] and our long service money to bring her home from Queensland and brought her home to Dandenong. She lived with me for seven years for nothing. I kept them, I brought them up from year Three at state school throughout high school. When she moved out, she was well enough to be on her own, took one child with her, the other two stayed with me for a few years longer. Elizabeth has had her share of money from the (estate).
Clause 7 of the 2009 will stated as follows:
I WISH to place on record that I have made no provision under this my Will for my daughter ELIZABETH RYKERS as she has shown me no natural love and affection and I have had no contact with her for a period of 10 years at the date of this my Will. In addition I believe I have already provided for my said daughter during my lifetime in that I provided free accommodation for her and her children for 7 years and she was given $60,000.00 from my superannuation on or about 1994 at which date my home would have been worth a similar sum of money.
However, when the deceased executed her last will on 14 August 2014 (‘last will’), which was prepared by Goodman Group Lawyers, the deceased left her entire estate to the defendant, and appointed the defendant as her executrix in place of the plaintiff. On that date, the deceased also executed an enduring power of attorney to appoint the defendant as the deceased’s attorney and revoked all of her previous powers of attorney.
There was no evidence of any certificate of capacity having been obtained prior to the deceased’s execution of the last will, which was made when the deceased was aged 85, and, according to the plaintiff, was already suffering some symptoms of dementia. The last will provided no explanation as to why the deceased had excluded the plaintiff from the last will.
On 11 November 2016, the probate of the last will was granted. On 1 December 2016, upon the request of the defendant or her solicitors, the nursing home repaid the accommodation bond to the deceased’s estate by way of a cheque in the sum of $352,868.12, payable to the estate of the deceased. However, the defendant did not deposit this cheque into any bank account held in the name of the deceased.
In late 2016, the defendant purchased a residential property at Ash Street, Russell Island, Queensland for $180,000.00 (‘Russell Island property’).
This proceeding was commenced on 11 May 2017, that is, just within six months of the date of the grant of probate. Prior to the issue of the proceeding, the plaintiff instructed the St Kilda Legal Service Co‑op to send a letter to Goodman Group Lawyers, notifying them of the plaintiff’s intention to make a claim upon the deceased’s estate, and requesting that they provide the plaintiff with information and documents. Their response was that they no longer acted for the defendant.
The originating motion was served upon the defendant at the Russell Island property on 29 August 2017. Russell Island is situated between mainland Australia and North Stradbroke Island in Moreton Bay, Queensland.
In her first affidavit of service sworn on 15 September 2017, a process server, Ms Victoria Cook, deposed that she gave the defendant a copy of the originating motion, who read it and said (in response to a question of whether she was the defendant): ‘Yes I am, but I don’t want those documents from the solicitors.’
During the course of 2017 and 2018, the plaintiff took no steps to prosecute her claims in this proceeding, but issued a number of subpoenas directed at investigating the financial affairs of the deceased since 2014.
The plaintiff issued a summons for directions and filed her application in support of her application in this proceeding on 26 February 2019. These documents were also personally served upon the defendant by the process server, Ms Cook, at the Russell Island property.
Ms Cook deposed as to the conversation she had with the defendant on 15 March 2019, as follows:
I identified the person served as the Defendant by asking,
‘Are you Elizabeth Renee Rykers, the person named in this document I now show you?’
Reply: ‘Yes, I am, but I don’t want them. They have already had a go at me and they are not getting anything!’
I then placed the documents down in front of her. She responded by saying ‘Hopefully they will blow away in the breeze, because I really don’t want them’.
On 5 May 2019, Ms Cook served a copy of the orders made by Judicial Registrar Englefield on 9 April 2019 giving directions for the conduct of the proceeding upon the defendant at the Russell Island property. In her affidavit sworn on 6 May 2019, Ms Cook deposed as follows:
I identified the person served as the Defendant by asking:
‘Are you Elizabeth Renee Rykers, the person in the documents I now show you?’
Reply, ‘Yes, I am. You can tell them, these documents will end up in the same place as the last ones you gave me, in the rubbish bin. They won’t be getting anything from me but they can keep trying all they want!’
On 18 June 2019, Englefield JR made orders that the Court documents in this proceeding could be served on the defendant by ordinary prepaid post. The defendant has not filed any notice of appearance, and has not participated in the proceeding. She did not attend the trial.
On 18 November 2019, while judgment was reserved, the solicitors for the plaintiff wrote to the Court as follows:
... it has recently come to light that the Defendant has placed her residential property in Russell Island for sale. The Plaintiff is gravely concerned that the Defendant is dissipating her assets (including her residential property) as a means to defeat her prospects of recovery.
The evidence
At trial, the plaintiff relied upon her affidavit sworn on 26 February 2019. As the defendant did not appear, the plaintiff was not cross examined on her evidence. However, I asked the plaintiff some questions regarding whether she had obtained any compensation for her injuries, which were said to be work related.
In her affidavit, the plaintiff deposed to the factual and family background summarised in paragraphs 1 to 16 above. In relation to the deceased’s relationship with the defendant, the plaintiff deposed as follows:
Elizabeth was, and had been for a period of about 16 years estranged from my mother, and our family as a whole. I believe that Elizabeth had a gambling problem, and often frequented gambling venues, such as Kelly’s Hotel in Cranbourne. I also believe from inspecting the subpoenaed documents of CBA (see paragraph 62 below) that she used my mother’s money to fund her gambling habit...
Elizabeth's gambling problem resulted in her being estranged from our family from around 1998. For instance, Elizabeth did not attend our father’s funeral in 2009 due to her strained relationship with our family.
The plaintiff further deposed as follows:
I was not aware of my mother’s passing until a relative sent me a Christmas card in December 2016 to express their condolences for my loss. I was devastated and deeply saddened that no one had told me that my mother had passed away. I was also extremely disappointed that I did not attend my mother’s funeral and was not afforded an opportunity to give her a proper farewell.
I believe that Elizabeth was attempting to conceal from me my mother's death in order that she could obtain a Grant of Probate in respect of my mother’s last Will, without my knowledge. This is why I did not make the subject application to this Honourable Court until the final day of the 6-month period from the date of Probate being granted...
The plaintiff gave evidence of the matters which caused her to believe that the defendant distributed the estate within the period of six months after the grant of probate, and the (ultimately fruitless) enquiries she and lawyers on her behalf made of Goodman Group Lawyers.
The plaintiff deposed that she has been unemployed for the past eighteen years. Previously, she was employed as a factory worker at a poultry processing plant until she suffered a serious workplace accident which left her incapacitated. She was diagnosed with bilateral tendinitis and has limited mobility. She receives a disability support pension from Centrelink of approximately $800.00 per fortnight due to her inability to work. She has no substantial assets, investments or superannuation.
The plaintiff exhibited reports prepared by medical practitioners, including a recent (February 2019) imaging report. While these reports are somewhat scant and out of date, they are largely consistent with what is described in her affidavit. In any event, while there may be scope for some argument about the nature and severity of her disability, her capacity for work is sufficiently impaired for her to qualify for the disability support pension, and she receives regular treatment by allied health professionals.
The plaintiff also deposed as to her belief that the assets of the estate were used by the defendant to purchase the Russell Island property prior to the grant of probate, and her belief that the value of the estate was substantially greater than the value attributed to the estate in the Inventory of Assets and Liabilities accompanying the application for the grant of probate.
At the trial of the proceeding, the plaintiff gave evidence that she did not receive any workers compensation payments in the first year after she got injured at work. After a year the plaintiff received a lump sum of $5,000.00, but it was not the full amount she said was owed to her.
The plaintiff exhibited a number of documents to her affidavit, including:
(a) the 2009 will;
(b) the last will;
(c) the powers of attorney granted to the plaintiff and the defendant in 2009 and 2014 respectively;
(d) bank statements for bank accounts held by the deceased with the Commonwealth Bank;
(e) an undated letter from the deceased to the solicitor who drafted the 2009 will regarding the exclusion of the defendant from the 2009 will;
(f) the deceased’s death certificate;
(g) correspondence between the plaintiff’s solicitors and Goodman Group Lawyers and the nursing home in 2017;
(h) evidence of the plaintiff’s receipt of Centrelink payments;
(i) the Inventory of Assets and Liabilities filed with this Court with the defendant’s application for the grant of probate;
(j) a title search and transfer of land form with respect to the Dandenong property; and
(k) affidavits of service and subpoenas filed in this proceeding by the solicitors for the plaintiff.
The plaintiff also relied upon a Notice to Admit dated 24 April 2019, which was served upon the defendant by Ms Cook on 5 May 2019. The Notice to Admit referred to the following facts, which are deemed to have been admitted pursuant to r 35.03(2) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic):
1.That the Defendant, Elizabeth Rykers (“Ms Rykers”) is the daughter of the late Nora Backman (“Deceased”) and the sister of the Plaintiff, Leonie McLean (“Ms McLean”).
2.That in or around 1994, the Deceased gifted to Ms Rykers the sum of $60,000.00 from the Deceased’s superannuation.
3.That in the Deceased’s Last Will made 14 August 2014 (“Will”), Ms Rykers was appointed Executrix of the Deceased’s Will and Trustee of her Estate.
4.That pursuant to an Enduring Power of Attorney (Financial) made 14 August 2014 (“Power of Attorney”), Ms Rykers was appointed as the Deceased’s attorney.
5.That the Deceased resided at the property situate at and known as 5 Alexander Avenue, Dandenong, Victoria (“Property”) up until she was placed in the care of ‘TLC Aged Care’ nursing home.
6.That on or around 3 August 2015, the Deceased was placed in the care of ‘TLC Aged Care’ nursing home (“TLC”).
7.That the Deceased provided TLC with the sum of $350,000.00 on account of an accommodation bond (“Accommodation Bond”).
8.That in or around late 2015, Ms Rykers sold the Property for a price of $526,000.00 pursuant to the Power of Attorney.
9.That Ms Rykers sold the Property without the Deceased’s knowledge, authority and/or consent.
10.That the sale of the Property was settled on or around 21 December 2015.
11.That Ms Rykers financially benefited from the sale of the Property.
12.That whilst the Deceased resided at TLC, Ms Rykers used the Power of Attorney, from time to time, to access and debit monies from the Deceased’s bank accounts for her own financial benefit.
13.That Probate of the Deceased’s Will was granted on 11 November 2016.
14.That on or around 1 December 2016, Ms Rykers (or her lawyers) requested that the Accommodation Bond be remitted by TLC to the Deceased’s Estate.
15.That in December 2016, a cheque in the sum of $352,868.12 payable to the ‘Estate of Nora Backman’ was given to Ms Rykers (or her lawyers) by TLC as refund of the Accommodation Bond.
16.That subsequently, Ms Rykers did not deposit the cheque in the sum of $352,866.12 into a bank account held in the name of the Deceased.
17.That in late 2016, the Defendant purchased a residential property situate at and known as 5 Ash Street, Russell Island, Queensland for the price of $180,000.00 (“Russell Island property”).
18.That Ms Rykers used part of the Estate funds to purchase the Russell Island property.
19.That Ms Rykers benefited, and continues to benefit, from the balance of the Estate funds in the sum of $172,866.12.
20.That Ms Rykers prematurely disposed of and distributed the Deceased’s Estate prior to the expiry of the 6 month limitation following the Grant of Probate.
The plaintiff also called her solicitor, Ms Zoe Fatouros, to give evidence regarding her analysis of the deceased’s three bank accounts between 2014 and 2016, the statements for which had been obtained by the plaintiff’s solicitors by the issue of subpoenas. From 2014 to 2016, there were frequent withdrawals from the deceased’s accounts, particularly in and around Cranbourne, where the defendant then resided. The withdrawals from the deceased’s bank accounts between August 2014 and September 2016 totalled $118,896.00. Arguably, Ms Fatouros’ evidence was inadmissible, but I accepted her commentary regarding the analysis she undertook of the subpoenaed documents as in effect submissions as to the inferences I could draw from the subpoenaed documents, being largely bank statements, which of course are admissible as business records pursuant to s 69 of the Evidence Act 2008 (Vic).
Ms Fatouros noted that there were a number of withdrawals occurring at sports bars and gaming premises (‘TABs’), including Kelly’s Motor Club Hotel, the Lynbrook Hotel, Trios Sports Club and Amstel Golf Club. Withdrawals were also made at other locations in Cranbourne, including supermarkets, pharmacies, and ATM machines.
Ms Fatouros observed that:
(a) the defendant had authority to operate the deceased’s bank accounts since 14 August 2014 under an enduring power of attorney;
(b) on the same day that the defendant became the deceased’s attorney, there was a withdrawal of $15,000.00 from one of the deceased’s Commonwealth Bank accounts;
(c) the deceased held $10,000.00 in a term deposit with Westpac, which matured on 8 June 2015. The principal and interest of $330.00 were paid from the term deposit account to the Westpac account. On the next day, 9 June 2015, a sum of $9,500.00 was withdrawn from the Westpac account;
(d) the deceased closed her bank account with the National Bank of Australia (‘NAB’) in 2013 and the $34,000.00 balance in that account may have gone to unclaimed monies. This sum was eventually deposited into the deceased’s Westpac account by a cheque from a collection agency; and
(e) there was no evidence of any deposits being made into the deceased’s account after the deceased passed away.
On 22 November 2019, while judgment was reserved, the plaintiff filed a further affidavit deposing to investigations undertaken by her solicitors with respect to the defendant’s proposed dealings with the Russell Island property. Her solicitor, Mr Di Blasi, deposed as follows:
I have subsequently made enquiries of the selling agents, ‘L.J. Hooker – Bay Islands’ as to the proposed sale of the Russell Island property and have been informed as follows:
(a) the said property is being sold by private treaty;
(b)there has been a relatively high level of interest for the said property, given its location and the updated presentation of the property;
(c)the Defendant is seeking as close as possible to the sale price for the said property, given that the sale price has been reduced from $310,000.00;
(d)the said property is competitively priced for its location and size;
(e)the settlement period for the sale of the said property will depend upon the parties, although it is common in Queensland for the settlement period to be 30 days and, in some cases, as short as 21 days.
I believe that there is a real risk that if not restrained by this Honourable Court, the Defendant will dispose of the proceeds of the sale of the Russell Island property so as to defeat any order/judgment made by this Honourable Court in favour of the Plaintiff.
Mr Di Blasi also relied upon the defendant’s past conduct as conduct which would entitle the plaintiff to an award of costs on an indemnity basis.
Submissions
Counsel for the plaintiff referred to the following statement of principle in Bosch v Perpetual Trustee Co Ltd:[1]
...the Court must place itself in the position of the testator and consider what he ought to have done in all the circumstances of the case, treating the testator for that purpose as a wise and just, rather than a fond and foolish, husband or father.[2]
[1][1938] AC 463.
[2]Ibid, 478.
On the question of the nature and content of a testator’s moral duty, counsel for plaintiff relied upon the decision of Ormiston J in Collicoat v McMillan[3] where his Honour stated:
The correct approach of a court in a testator's family maintenance proceeding is determined by moral duty. The expression “moral duty” remains a simple and convenient way of referring to the obligation, hypothetical as it may be in some cases, resting upon a testator to make a wise and just assessment of the interests of all persons who might fairly ask to be taken into account in determining what adequate provision for proper maintenance and support should have been made for them had the testator been fully aware of all the relevant circumstances.[4]
[3][1999] 3 VR 803.
[4]Ibid, 803.
Counsel for the plaintiff submitted that Collicoat v McMillan[5] is still the leading authority on the content of a testator’s moral duty, notwithstanding the enactment of significant amendments to the Act in 2015 (‘2015 amendments’). I agree that the 2015 amendments have not altered the moral duty of a testator: indeed, there is now an express reference to a testator’s moral duty in the Act.
[5][1999] 3 VR 803.
Counsel for the plaintiff submitted that the defendant had probably withdrawn cash from the deceased’s bank accounts to fund her gambling habit, and the sum of approximately $119,00.00 ought to be notionally included in the deceased’s estate. Counsel for the plaintiff also submitted that the proceeds of $526,000.00 from the sale of the Dandenong property should also be added back into the estate.
Counsel for the plaintiff submitted that the plaintiff is an eligible person within the meaning of s 91 of the Act, and the evidence clearly establishes that she is in some need. By reason of the defendant’s refusal to participate in the proceeding, there is no evidence of any competing need on the part of the defendant, or any explanation of the substantial withdrawals from the deceased’s bank accounts prior to her death.
As to the appropriate provision to be made out of the estate, counsel for plaintiff submitted that the Court should revert to the terms of the 2009 will, under which the plaintiff was entitled to the entirety of the deceased’s estate. Counsel for plaintiff submitted:
The testator, in my view, was just and wise in the allocation in her first will, half and half, she says. Elizabeth's had a half share, the $60,000, equivalent to the value of the house. That’s sufficient. She's talking about half and half. Many of the authorities seem to say and indeed the text book that I referred to, these are all individual cases, but the courts seem to be moving to an equal adjustment between siblings unless there's some particular reason not to, and in this case, one would reason that the defendant was in far better financial circumstances and in far better health than my client.[6]
[6] Transcript, 33.
Counsel for plaintiff submitted that the defendant took advantage of the deceased’s advanced age and the fact that she was suffering from dementia to influence the deceased to alter her will. Counsel submitted that this was a compelling case for the plaintiff to receive the balance of the estate rather than simply additional provision. The defendant had distributed the deceased’s estate prematurely without regard for the plaintiff, while the plaintiff has had a difficult life, has few assets, and has been in poor health for many years.
Relevant legal principles
An application for family provision needs to be made within six months after the date of the grant of probate of the will, although the Court may extend such period if the Court considers it appropriate to do so under s 99 of the Act.
In general, an executor or trustee appointed under a will must not distribute any part of the deceased’s estate until at least six months after the date of the grant of probate of the will has elapsed. Further, once the personal representative has notice of a claim for further provision from the estate, he or she cannot distribute any part of the deceased’s estate without the claimant’s consent. The authorities indicate that an injunction may be granted to restrain the personal representative from distributing assets until the claim is heard and determined, in circumstances where the personal representative has made, or threatens to make, a premature distribution.[7] In Public Trustee v Bebich (as Executor of Estate of Bebich (decd)),[8] the Court granted an injunction to restrain the executors from dealing with the assets of an estate when the executors transferred land to themselves as beneficiaries in the will while an application for further provision was still on foot.
[7]Packo v Packo (1989) 17 NSWLR 316; cf. Maiolo v Caristo [2008] NSWSC 236, where the Court declined to order an injunction because the applicant’s claim was weak.
[8][2014] WASC 340.
In Katakouzinos v Katakouzinos,[9] I summarised the nature and effects of the 2015 amendments upon the principles applicable to applications for provision as follows (omitting footnotes):
[9][2019] VSC 3.
In Brimelow v Alampi, McMillan J noted that the 2015 amendments maintained the traditional jurisdictional requirement which prohibited the Court from making a family provision order unless, at the time of the death of the deceased, the deceased had a moral duty to provide for an eligible person’s proper maintenance and support, and that the Court must be satisfied that the distribution of the deceased’s estate (by way of a will or otherwise) failed to make adequate provision for their proper maintenance and support. Her Honour noted the reference to both ‘adequate provision’ and ‘proper maintenance and support’ in s 91(2) of the Act, concluding that the size of the estate remains a relevant matter for determining what is ‘proper’ maintenance and support.
Her Honour also noted that the terms of s 91A(1) of the Act require the Court to have regard to the will of the deceased, and any evidence of the deceased’s reasons for making the dispositions in the will. However, she considered that the elevation of evidence of a deceased’s intentions to a mandatory relevant consideration, rather than such evidence being simply admissible in any proceeding bringing a claim, as was the case prior to the 2015 amendments, does not give such evidence higher status. Her Honour stated:
The weight to be attached to such statements [of intention] will depend on the circumstances. Reasons can be shown to be incorrect or misconceived, which may enhance or boost the strength or defence of a claim.
Her Honour made the following observations with respect to the principles governing the quantum of any provision which may be made for adult children once the jurisdiction to make a family provision order is enlivened (omitting citations):
In relation to adult children, pursuant to s 91(4)(c) of the Act, the Court must also take into account the degree to which the eligible person is not capable, by reasonable means, of providing adequately for his or her own proper maintenance and support. This is intended to limit claims by adult children who are not suffering financial hardship, however, the financial need of the applicant as well as any other competing claims on the deceased’s bounty still needs to be considered in the context of proper maintenance and support.
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.
What constitutes proper provision for the maintenance and support of an applicant involves a consideration of the station in life of the applicant, the age, sex, health and financial resources of the applicant, the size and nature of the testator's estate and 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.
In determining what is adequate for the proper maintenance and support of an applicant, the Court has regard to the necessities or needs of the applicant and his or her own capacity and resources for meeting them. This also involves a consideration of 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. Thus, in determining this question, a balance must be drawn between the established claims of the named beneficiaries, the needs of the applicant, the size of the estate and the benefits provided to the applicant and others with legitimate claims upon the testator. The Court's function is not to ensure a fair distribution of the testator's estate or to achieve equality amongst various claimants. The Court's role goes no further than making adequate provision for the proper maintenance and support of an applicant.
As can be seen from the above, while the 2015 amendments do limit the class of people who may make a claim for provision or further provision under the Act, and is more prescriptive as to what matters the Court must take into account in a proceeding bringing such a claim, the 2015 amendments did not effect a wholesale change in the law. The established authorities concerning the ‘moral duty’ of a testator, and what amounts to ‘adequate provision for the proper maintenance and support’ of a claimant remain relevant.
For present purposes, the main effect of the 2015 amendments is the introduction of the concept of ‘eligible person’.
‘Eligible person’ is defined under s 90 of the Act to include:
a child of the deceased, including a child adopted by the deceased who, at the time of the deceased’s death was a child with disability;
Counsel for plaintiff referred to the medical evidence which showed that the plaintiff was suffering a disability, thus falling within the above definition of eligible person. Strictly speaking, it was not necessary for the plaintiff to establish any disability, given that she was an adopted child of the deceased,[10] but her disability is relevant to the determination of whether the deceased has fulfilled her moral obligations to the plaintiff.
[10]See paragraph (f) of the definition of ‘Eligible person’ in s 90 of the Act.
However, while an able-bodied adult child is an eligible person within s 90 of the Act, in the case of an able-bodied adult child the Court is required to take into account, in determining the amount of any provision, the degree to which that claimant is not capable, by reasonable means, of supporting themselves. Here, not much turns on this issue: even if the plaintiff could not be characterised as disabled, or at least profoundly disabled, her age and lack of engagement in the paid workforce for nearly two decades means that realistically, she will be unable to improve her financial position by her own efforts in the foreseeable future.
Conclusion
Turning now to the relevant factors under s 91A(2) of the Act, I make the following observations:
(a) the relationship between the plaintiff and the deceased, including the nature and length of the relationship: the plaintiff is the adopted child of the deceased. The uncontested evidence is that, at least until 2014, there was a close, loving and mutually supportive relationship between the plaintiff and the deceased. The plaintiff’s explanation regarding how she came to lose contact with her mother is somewhat patchy, but it appears that the defendant may have precipitated the estrangement between them;
(b) the obligations of the deceased to the plaintiff, any other eligible person or the beneficiaries of the estate: the deceased had obligations to both the plaintiff and the defendant, as her surviving children. Given the assistance the deceased gave the defendant during her lifetime, and the parlous financial position of the plaintiff, one could say that the deceased had greater obligations to the plaintiff;
(c) the size and nature of the estate: the size of the estate is uncertain. It is not entirely clear how the deceased’s nursing home bond was funded, but it is open to me to infer that the bond was funded from resources other than the proceeds of sale of the Dandenong property, given that the deceased moved into the nursing home before the Dandenong property was sold. In her affidavit, the plaintiff deposed that she believed that the deceased’s assets at the time of her death included a rare stamp and coin collection valued at $200,000.00, and a gift of approximately $1 million from her brother in 1999. While the latter gift may explain why the deceased was able to fund a nursing home bond prior to the sale of the Dandenong property, there is no sign of the deceased having hundreds of thousands of dollars spare at the time of her death, at least in her bank accounts. Given that the deceased was in receipt of an aged pension of $873.90 per fortnight at the time of her death some five years ago, it is unlikely that the deceased had much in the way of assets over and above the Dandenong property;
(d) the financial resources, including earning capacity, and the financial needs of the plaintiff and any other eligible person or beneficiary of the estate at the time of the hearing and for the foreseeable future: the evidence shows that the financial resources and earning capacity of the plaintiff are very limited. While I do not consider that it is completely beyond the realms of possibility that the plaintiff could recover some compensation for her work-related injuries, I accept that, given the time that has elapsed, she would face substantial hurdles in recovering substantial compensation.[11] There is no evidence of the financial resources of the defendant, save that she owns the Russell Island property. One can infer from the fact she was financially dependent upon the deceased during the 1990s, and has a gambling problem, that her financial resources are modest, depending of course upon the actual size of the deceased’s estate, given that she was the sole beneficiary of the estate;
[11]In her oral evidence during the course of the trial, the plaintiff explained that her physical injuries and chronic fatigue, along with her parents’ illnesses, limited her ability to provide proper instructions to the solicitors retained by her to pursue her compensation claim, and the solicitors ceased to act for her.
(e) the physical, mental or intellectual disability of the plaintiff or of any other eligible person or beneficiary of the estate: the plaintiff has reasonably severe and chronic orthopaedic problems which limit her capacity for employment. Save for the evidence that the defendant has had a gambling problem in the past, there is no evidence about the defendant’s physical or mental health;
(f) the age of the plaintiff: the plaintiff is 54 years of age. Her disability and the long period of time she has spent outside the workforce means that she is unlikely to return to paid employment;
(g) any contributions by the plaintiff to building up the estate of the deceased and towards the welfare of the deceased: the uncontested evidence is that between 2009 and 2014, the plaintiff took care of her mother, including driving her to and from medical appointments, providing her with meals, taking her grocery shopping, and assisting her with general household duties. The plaintiff deposed that she was excluded from her mother’s life from 2014 because the defendant alleged she failed to take proper care of her, but the defendant did not take the opportunity to participate in the proceeding to give her side of the story;
(h) any benefits previously given by the deceased to the plaintiff or any eligible person or beneficiary: there is no evidence of the deceased having provided the plaintiff with any substantial gifts or material support. The terms of the 2009 will and the letter from the deceased to her solicitor which is in evidence suggests that the deceased provided substantial financial support to the defendant over her lifetime;
(i) whether the plaintiff was being maintained by the deceased prior to her death: the plaintiff was not being maintained by the deceased;
(j) the liability of any other person to maintain the plaintiff: there is no evidence that any other person has a liability to maintain the plaintiff. The plaintiff is dependent upon social security and public housing for her income and accommodation;
(k) the character and the conduct of the plaintiff or any other person: there is no evidence of any disentitling conduct on the part of the plaintiff. While the defendant has not taken the opportunity to defend herself, it seems that the defendant may have been at least partly responsible for the estrangement (if it can be called that) between the plaintiff and the deceased prior to the death of the deceased. Further, it is difficult not to draw the inference from the bank statements in evidence that the defendant treated the deceased’s assets as her own once she held the deceased’s power of attorney. Finally, the premature distribution of the assets of the estate and the evidence of the process server regarding her conversations with the deceased indicates a somewhat contemptuous (in the lay sense rather than the legal sense) attitude towards the law and the legal process on the part of the defendant;
(l) the effect that a family provision order in the plaintiff’s favour would have on the amounts received by other beneficiaries: any order for family provision would directly detract from the benefits enjoyed by the defendant; and
(m)any other relevant matter: all matters relevant to the application have been considered above.
In sum, the plaintiff is of limited means, is in poor health, and was close to the deceased up until the last two years of the deceased’s life. The uncontested evidence is that the defendant has been well provided for by the deceased over her lifetime, has contributed to discord in the family, has improperly used her mother’s assets for her own benefit, and has arguably abused her position as the deceased’s attorney and as the executor of the estate. While the deceased may not have known about the defendant’s conduct at the time she made the last will, she excluded the plaintiff from the last will knowing of the plaintiff’s situation, and knowing that she had provided the defendant with substantial assistance over her lifetime. Accordingly, the dispositions in the last will did not meet the moral obligation of the deceased to the plaintiff. It is arguable that an even division of the estate would not have fulfilled her moral duty, depending upon the size of the estate. The smaller the size of the estate, the larger the share which should go to the plaintiff.
The uncertainty regarding the size of the estate is the reason that I would make an order that the plaintiff be paid a specific sum from the assets of the estate, rather than a proportion of or the entirety of the estate. While I expect that some further investigations may reveal more about the financial affairs of the deceased and the estate, that may require some time and financial expenditure, which the plaintiff is not well-equipped to invest. While it would no doubt be possible to further investigate what occurred with the proceeds of sale of the Dandenong property, that may end up being an arid enquiry, if the defendant has dissipated or taken steps to conceal the assets of the estate, as she may well have done.
I propose to order that the executor pay the sum of $470,000 to the plaintiff. That sum is the approximate total of the sum of the refunded accommodation bond and the sum taken by the defendant from the accounts of the deceased prior to her death, being two components of the assets of the estate which are capable of being ascertained from the evidence. Further, that sum would be sufficient for the plaintiff to purchase a small apartment, with some left over for a modest nest egg to cater for emergencies. Of course, it may not be possible to recover the full amount from the defendant, but it will be more straightforward to recover part or all of an award of a sum certain than to make an order which requires further investigations to ascertain the actual size of the estate.
While I will seek submissions from counsel as to the precise form of order, on the basis of the evidence before me regarding the conduct of the defendant with respect to the assets of the deceased prior to her death, and her dealings with the estate after her death, I consider that it is appropriate to make orders which facilitate enforcement of the order for provision against the defendant personally. Setting aside any question mark over the size of the estate, it is tolerably clear from the evidence that the assets of the estate were distributed by the defendant within six months of the date of expiry of the grant of probate, that is, by 11 May 2017. The evidence shows that the accommodation bond was paid to the estate on 1 December 2016, but that amount was never held in any bank account of the deceased. Goodman Group Lawyers ceased to act for the defendant shortly after that date.
The consequences of a premature distribution of the assets of an estate was discussed in a decision delivered on the date of the trial of this proceeding. In Walters v Perton (No 3),[12] Derham AsJ stated as follows (omitting footnotes):
[12][2019] VSC 733.
106Under s 99 of the A&P Act an application to the Court for a family provision order must be made within 6 months after the date of the grant of probate of the will, or of letters of administration, as the case may be. The law is clear that the executor should not distribute any part of the deceased estate until at least 6 months has expired since the grant of probate. The consequence in equity of an executor distributing an estate before the 6 month period has expired is twofold:
(a)It does not defeat the power of the Court to make an order that provision be made for the applicant out of the estate which the executor has purported to distribute.
(b)The executor may be personally liable to a successful applicant who suffers loss as a result. In other words, the executor is at risk if she makes the distribution.
107However, the executor is not prevented from doing so. Le Miere J described the position in Bebich as follows:
[T]he executor is under no legal prohibition not to distribute the estate even if the executor has notice of a pending claim under the Family Provision Act. The grant of probate is the executor’s authority to deal with the property of the estate in accordance with the will. The application for provision under the Family Provision Act may be unsuccessful. In that event the executor will not be liable for having distributed the estate in accordance with the will. However, the effect of the authorities to which I have referred is that an executor who distributes with notice of an application under the Family Provision Act may be personally liable to a successful applicant for family provision who suffers loss as a result. It is in that sense that an executor who makes the distribution in these circumstances is ‘at risk’.
This seems to me to be an appropriate occasion to make an order directed at the executrix personally. I shall hear further from counsel regarding the proposed form of orders and the question of costs.
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