Morton v Mangan
[2014] NSWSC 1731
•05 December 2014
Supreme Court
New South Wales
Medium Neutral Citation: Morton v Mangan [2014] NSWSC 1731 Hearing dates: 19 November 2014 Decision date: 05 December 2014 Jurisdiction: Equity Division Before: Hallen J Decision: Subject to an application to make an order for costs in different terms, the court:
(i) Having found that the first Plaintiff is an eligible person and that the provision made for her in the Will of the deceased is not adequate for her proper maintenance or advancement in life, orders that she receive a lump sum of $60,000, to be paid from the fund held by the solicitors on behalf of the Defendants.
(ii) Having found that the second Plaintiff is an eligible person and that the provision made for her in the Will of the deceased is not adequate for her proper maintenance or advancement in life, orders that she receive a lump sum of $90,000, to be paid from the fund held by the solicitors on behalf of the Defendants.
(iii) Orders that no interest be paid on each lump sum if it is paid within 14 days of the making of these orders; otherwise, interest calculated at the rate prescribed by s 84A(3) of the Probate and Administration Act 1898 (NSW), on unpaid legacies, is to be paid from that date until the date of payment.
(iv) Unless any party wishes to make further submissions on costs, the application for which should be made within 7 days, orders that the Plaintiffs' costs, calculated on the ordinary basis, and the Defendants' costs, calculated on the indemnity basis, be paid out of the fund held by the solicitors on behalf of the Defendants.
(v) Grants liberty to any party to apply, in these proceedings, for consequential and ancillary orders for the purpose of, or with respect to, giving effect to, and implementing, the family provision order made in favour of each of the Plaintiffs.
(vi) Orders that the Exhibits be dealt with in accordance with the Uniform Civil Procedure Rules 2005 (NSW) and Practice Note No SC Gen 18.
(vii) Directs that the Court Book be returned.
Catchwords: SUCCESSION - FAMILY PROVISION - Two Plaintiffs, each an adult child of the deceased, apply for a family provision order under Chapter 3 of the Succession Act 2006 (NSW) - The first Defendant's husband, the brother of the deceased's second wife - Their children are sole beneficiaries - Deceased left Will in which no provision made for either Plaintiff - No explanation given in the Will - Lack of contact between each Plaintiff and the deceased for a number of years before his death - Small estate - Estate distributed to second and third Defendant - Defendants all agree that fund held by solicitors will meet any provision made for each Plaintiff - No dispute that property to be designated as notional estate if necessary - Agreement of parties to treat property as actual estate for the purposes of the hearing - Whether adequate and proper provision not made in Will of the deceased for each Plaintiff and, if so, the nature and quantum of the provision to be made Legislation Cited: Civil Procedure Act 2005 (NSW)
Family Provision Act 1982 (NSW)
Matrimonial Causes Act 1959 (NSW)
Practice Note No SC Gen 18
Practice Note SC Eq 7
Probate and Administration Act 1898 (NSW)
Succession Act 2006 (NSW)
Succession Amendment (Family Provision) Act 2008 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)Cases Cited: Akkerman v Ewins [2003] NSWCA 190
Allardice v Allardice; In re Allardice (1910) 29 NZLR 959
Allen (Deceased), In re; Allen v Manchester [1922] NZLR 218
Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656
Aubrey v Kain [2014] NSWSC 15
Barna v Barna [2008] NSWSC 1402
Bartlett v Coomber [2008] NSWCA 100
Baychek v Baychek [2010] NSWSC 987
Boettcher v Driscoll [2014] SASC 86
Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Buckland Deceased, Re [1966] VR 404
Bull, Re; Bentley v Brennan [2006] VSC 113
Butcher v Craig [2009] WASC 164
Chapple v Wilcox [2014] NSWCA 392
Christie v Manera [2006] WASC 287
Collicoat v McMillan [1999] 3 VR 803.
Collins v McGain [2003] NSWCA 190
Coventry (Deceased), Re [1979] 3 All ER 815
Crossman v Riedel [2004] ACTSC 127
de Angelis v de Angelis [2003] VSC 432
Dennis (Deceased), Re [1981] 2 All ER 140
Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127
Diver v Neal [2009] NSWCA 54
Dobb v Hacket (1993) 10 WAR 532
Edgar v Public Trustee for the Northern Territory [2011] NTSC 5
Flathaug v Weaver [2003] NZFLR 730
Foley v Ellis [2008] NSWSC 288
Gardiner v Gardiner (Supreme Court (NSW) Santow J, 28 May 1998, unrep)
Gardiner v Gardiner [2014] NSWSC 435
Golosky v Golosky (New South Wales Court of Appeal, 8 September 1993, unrep)
Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490
Goodsell v Wellington [2011] NSWSC 1232
Gorton v Parks (1989) 17 NSWLR 1
Grey v Harrison [1997] 2 VR 359
Hampson v Hampson [2010] NSWCA 359
Hawkins v Prestage (1989) 1 WAR 37
Heyward v Fisher (New South Wales Court of Appeal, 26 April 1985, unrep)
Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134
Hyland v Burbidge [2000] NSWSC 12
Kay v Archbold [2008] NSWSC 254
Kleinig v Neal (No 2) [1981] 2 NSWLR 532
Litchfield v Smith & Tingate [2010] VSC 466
MacGregor v MacGregor [2003] WASC 169
Marks v Marks [2003] WASCA 297
Marras, In the Estate of the late Anthony [2014] NSWSC 915
Mayfield v Lloyd-Williams [2004] NSWSC 419
McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
McKenzie v Topp [2004] VSC 90
Morris v Smoel [2014] VSC 32
Palaganio v Mankarios [2013] NSWSC 61
Phillips v James [2014] NSWCA 4
Pogorelic v Banovich [2007] WASC 45
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9
Puckridge, Deceased, In the Estate of (1978) 20 SASR 72
R (on the application of M) v Slough Borough Council [2008] UKHL 52; [2008] 1 WLR 1808
Sam Wardy v Gordon Salier; William Wardy v Gordon Salier; Hassiba Wardy v Estate of late Edmond Wadih Wardy, developer and Ch 3 of the Succession Act 2006 [2014] NSWSC 473
Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100
Savic v Kim [2010] NSWSC 1401
Sergi v Sergi [2012] WASC 18
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
Slack v Rogan; Palffy v Rogan [2013] NSWSC 522
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Szypica v O'Beirne [2013] NSWSC 297
Taylor v Farrugia [2009] NSWSC 801
Tobin v Ezekiel [2012] NSWCA 285
Verzar v Verzar [2012] NSWSC 1380
Verzar v Verzar [2014] NSWCA 45
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
Walker v Walker (Supreme Court (NSW), 17 May 1996, Young J, unrep)
West v Mann [2013] NSWSC 1852
Wilcox v Wilcox [2012] NSWSC 1138
Williams v Aucutt [2000] 2 NZLR 479Texts Cited: Rosalind Atherton, 'The Concept of Moral Duty in the Law of Family Provision - a Gloss or Critical Understanding?' (1999) 5 Australian Journal of Legal History 5
L G Handler and R Neal, Mason and Handler's Succession Law and Practice New South Wales (1985, LexisNexis Butterworths)
J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (7th ed, 2006, LexisNexis Butterworths)Category: Principal judgment Parties: Tracy Lyn Morton (first Plaintiff)
Michelle Ann Burrell (second Plaintiff)
Elaine Mary Mangan (first Defendant)
Samantha Jane Mangan (second Defendant)
Robert Alan Mangan (third Defendant)Representation: Counsel:
Mr J Brown (Plaintiffs)
Mr G Rich (Defendants)
Solicitors:
Slater & Gordon Lawyers (Plaintiffs)
Peninsula Law (Defendants)
File Number(s): 2014/40000
JUDGMENT
HIS HONOUR: These reasons relate to a claim in which there are two Plaintiffs, namely, Tracy Lyn Morton and Michelle Anne Burrell, each of whom is a child of Allen Frederick Scott ("the deceased"). Each seeks a family provision order, pursuant to the Succession Act2006 (NSW) ("the Act") and costs out of the estate, or notional estate, of the deceased. A family provision order is an order made by the court in relation to the estate, or notional estate, of a deceased person, to provide from that estate, or notional estate, for the maintenance, education, or advancement in life of an eligible person.
Because the whole of the estate of the deceased was distributed, I shall return to whether an order designating property as notional estate of the deceased, should be made, and to the agreement of the parties in relation thereto, later in these reasons.
Without intending to convey undue familiarity, with no disrespect intended, and for convenience and clarity, I shall refer, hereafter, to the parties, and other family members, after introduction, by her, or his, given name.
The application which was commenced by Summons on 7 February 2014, by Michelle and Tracy, was filed within the time prescribed by the Act (within 12 months of the date of the death of the deceased).
The first Defendant named in the Summons is Elaine Mary Mangan, one of the two executors named in the Will of the deceased to whom Probate was granted. (The other executor was Elaine's husband, Alan Kenneth Mangan, but he predeceased the deceased, having died in November 2011.) Elaine was a friend of the deceased even before her marriage to Alan.
Alan's sister, Alma Jean Mangan (to whom the parties referred as "Jean"), was the deceased's second wife.
The other two Defendants are Samantha Jane Mangan and Robert Allan Mangan, the two children of Elaine and Alan. They are the niece and nephew, respectively, of Jean. They were joined as Defendants at the behest of Michelle and Tracy, principally because the estate was distributed to them in circumstances to which I shall return.
Background Facts
The following background facts are uncontroversial.
The deceased died on 3 April 2013. He was then aged 85 years, having been born in October 1928.
The deceased was married, first, to Patricia Frances May Hallett (now King). They were married in November 1957. There were two children of their marriage, being Michelle and Tracy.
The deceased and Patricia separated in about 1961 and, in November 1965, this court pronounced a decree of dissolution of their marriage under the Matrimonial Causes Act 1959 (NSW).
In about 1963, Patricia commenced a relationship with William ("Bill") Ronald King, with whom she lived for about 25 years thereafter. Each of Michelle and Tracy gave evidence that she regarded, and still regards, Bill as her father (even though he was not her biological father).
The deceased married Jean in December 1965.
Following the marriage, the relationship between Alan and Elaine and the deceased and Jean grew closer. After Samantha and Robert were born, there were many holidays spent together and visits to each other's home. After Jean died, the contact between the deceased, Elaine and Alan increased. The deceased identified Elaine as his next of kin, and it was she who was contacted on the occasions that he was admitted to hospital.
The deceased left a duly executed Will that he made on 16 October 2001. This court granted Probate in common form of that Will to Elaine on 23 July 2013.
Relevantly, by the Will, after the revocation of all former wills and other testamentary dispositions, the deceased gave the whole of his estate to "such of my late wife's niece, Samantha ... and nephew, Robert ... who shall survive me and if more than one in equal shares as tenants in common".
Samantha was born in February 1975 and is currently almost 40 years of age. Robert was born in October 1977 and is currently 37 years of age.
The Will made no reference at all to either of Tracy or Michelle. There was no explanation provided in the Will, or otherwise, for the deceased not making any provision for either of them out of his estate.
According to the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the property owned solely by the deceased at the date of his death was disclosed as having an estimated, or known, gross value of $325,726. At the date of death, his estate was said to consist of real estate at Ettalong Beach, New South Wales ($300,000), a refund of fees from a retirement village ($2,146), cash in bank ($23,579) and jewellery, furniture, household effects, and personal effects (of no commercial value). There was no other property in which the deceased had any interest disclosed. There were also no liabilities disclosed. (I have omitted, and shall continue to omit, any reference to cents in the amounts to which I shall refer, which will explain any minor mathematical errors.)
In an affidavit sworn on 11 April 2014, Elaine stated that "[t]he estate was finalised and administered prior to the commencement of the proceedings". The Ettalong Beach property was transferred into the names of Samantha and Robert in August 2013.
There is no dispute that the solicitors acting for Elaine did not give any notice of the intention to distribute the assets in the estate after the expiration of a specified time as prescribed by s 92(1)(b) of the Probate and Administration Act 1898 (NSW). Furthermore, the distribution was made within 6 months of the date of death of the deceased.
The Ettalong property was sold, subsequently, by Samantha and Robert, by contracts for sale exchanged on 31 March 2014, with settlement being effected on 12 May 2014. The gross sale price was $420,000 and the net proceeds of sale ($410,080) were retained in a controlled moneys account by Elaine's solicitors.
On 14 August 2014, the bank accounts held in the name of the deceased were closed and $22,350 was deposited into Elaine's solicitors' controlled moneys account. Various other receipts of income were also paid into that account. Other income was added to the account as, and when, it accrued.
There were some legal costs and disbursements of administration ($5,664) paid out of the funds held by the solicitors. On 27 August 2013, a distribution of $12,915 was made to each of Samantha and Robert.
It appears, from an affidavit sworn on 21 October 2014 by Mr A A Bingham, who is Elaine's solicitor, that, in October 2013, an amount of $7,697 was also paid out of the funds held, to Elaine, to reimburse her for expenses incurred by her in administering the estate. In addition, there were some withdrawals for other minor expenses (which is unnecessary to further identify).
As at 21 October 2014, the amount held by Elaine's solicitors was said to be $407,123. As at the date of hearing, the amount was $408,160.
In calculating the estimated net value of the estate finally available for distribution, the costs of the present proceedings should also be considered, since Michelle and Tracy, as the Plaintiffs, if successful, normally, will be entitled to an order that her costs and disbursements, calculated on the ordinary basis, be paid, whilst Elaine, as the person representing the estate in the proceedings, irrespective of the outcome of the proceedings, normally, will be entitled to an order that her costs, calculated on the indemnity basis, be paid out of the estate of the deceased. (I shall return to the costs referable to each of Samantha and Robert later in these reasons.)
The solicitor for Michelle and Tracy, Mr V A Moulis, in an affidavit sworn on 21 October 2014, estimated their costs and disbursements of the proceedings, including counsel's fees, calculated on the ordinary basis, to be $40,000 (inclusive of GST and upon the basis of a two day hearing). (Calculated on the indemnity basis, those costs and disbursements were estimated to be $55,000.)
At the hearing, the court was informed that, since the hearing would be concluded in one day, the estimated costs and disbursements, calculated on the ordinary basis, would be reduced to $36,500.
Mr Moulis also stated that Michelle and Tracy have not paid any amount towards costs and disbursements.
Mr Bingham, in the affidavit to which I have referred, estimated the costs and disbursements, including counsel's fees, calculated on the indemnity basis, of all of the Defendants, to be between $75,000 and $85,000 (inclusive of GST and upon the basis of a two day hearing). At the hearing, the court was informed that, since the hearing would be concluded in one day, the estimated costs and disbursements, calculated on the indemnity basis, would be reduced to $70,000.
I was requested to not make any order for costs until after judgment is delivered. However, the parties agreed that the usual costs order would be appropriate unless further submissions on the issue of costs become necessary following the delivery of reasons for judgment.
If the usual costs orders are made, and if the parties are unable to reach agreement on the quantum of costs to be paid, it will be for an assessor to determine the appropriate quantum of costs for both parties. Hopefully, in view of the size of this estate, this will not be necessary and the parties will be able to reach agreement without the need for additional costs to be incurred.
As Elaine is an executrix and not a beneficiary, she stated that it is her intention to make a claim for commission. In this regard, s 86(1) of the Probate and Administration Act provides that "the Court may allow, out of the assets of any deceased person, to the deceased person's executor, administrator, or trustee for the time being, in passing the accounts relating to the estate of the deceased person, such commission or percentage for the executor's, administrator's or trustee's pains and trouble as is just and reasonable, and subject to such notices (if any) as the Court may direct".
The estimate of the commission to be claimed by Elaine was assessed to be about $9,000. Rates of commission commonly allowed in practice are described in L G Handler and R Neal, Mason and Handler's Succession Law and Practice New South Wales (1985, LexisNexis Butterworths), at [1441.1.1.3], as from 0.25 per cent to 2 per cent on capital realisations and from 2 per cent to 4 per cent on income collections. It was submitted that the estimate, in this case, of Elaine's claim, was based on an applicable rate of 2 per cent.
I shall use $9,000 as the estimated commission as there was no submission that I should not do so. I stress, however, that it is an estimate only, and the court should not be taken to have accepted that it is the appropriate amount of commission that is payable out of the estate to Elaine.
Finally, the evidence reveals that the estimated legal costs of the final administration of the estate would be about $1,000.
It follows, if orders for costs are made and if the costs estimates prove accurate (in total, $106,500), if commission to be paid to Elaine is established and the quantum ($9,000) allowed, and if the estimate of the costs of final administration ($1,000) are also paid out of the gross amount held ($408,160), that the amount available for distribution will be about $291,660.
(Although there was the total amount of $25,837 distributed to Samantha and Robert, I shall treat the amount that each received ($12,918) as an amount paid to them out of the estate and not as notional estate of the deceased. The parties agreed that I should adopt this course.)
At the hearing, the parties also agreed that the only eligible persons are Michelle and Tracy, as the children of the deceased, and their mother, Patricia. Only Michelle and Tracy, however, have commenced proceedings under the Act. Patricia has not commenced any proceedings but an affidavit sworn by her has been read in the proceedings. In the affidavit, she has stated that she is aware of her rights to apply for a family provision order under the Act but has decided not to make any claim. In those circumstances, the court is entitled to, and shall, disregard her interests as a person by, or in respect of whom, an application for a family provision order may be made but who has not made an application.
However, the court may not disregard the interests of any beneficiary of the deceased person's estate. Each of Samantha and Robert has filed, and read, affidavits going to her, and his, competing claim, respectively, on the bounty of the deceased. It is accepted that each, however, is not an eligible person within the meaning of that term in the Act.
Joinder of Samantha and Robert as Defendants
By letter dated 10 March 2014 (Ex. 2), a few days prior to the first return date of the Summons, following the receipt of a copy of a proposed amended Summons, naming Samantha and Robert as the second and third Defendants respectively, Elaine's solicitor, Mr Bingham, wrote to the Plaintiffs' solicitor in the following terms:
"We refer to your email dated 6 March 2014 attaching [an] Amended Summons.
We refer to our telephone discussion with you on Monday 10 March 2014 and confirm that we have spoken to both Samantha Jane Mangan and Robert Alan Mangan the beneficiaries registered on the Title to [the Ettalong Beach property].
The property is on the market for sale and we confirm that both Samantha and Robert are prepared to undertake to pay the proceeds of sale of the property into the Estate Trust Account held by Webster & Co pending the resolution of these current proceedings.
The executor Elaine Mangan is also agreeable to this course of action.
This would alleviate the added expense of joining two additional defendants to the proceedings.
Please give the matter some consideration and advise us whether you still wish to proceed to join Samantha Jane Mangan and Robert Alan Mangan as defendants in the proceedings.
We await your further response."
No response was received to that letter and, on 14 March 2014, without the court being informed of the contents of that letter, the parties sought an order, by consent, that the amended Summons be filed adding Samantha and Robert as Defendants. The order was made without further investigation because it appeared that, if there was property that had been distributed to them, it might be designated as notional estate. As such, as persons to whom the property had been distributed, they appeared to be proper Defendants. Had the court been informed of the undertaking that had been proffered, it is unlikely that an order joining them as Defendants would have been made.
Counsel for Michelle and Tracy, initially, raised an issue concerning whether all of the Defendants' costs should be borne out of the estate of the deceased, since it would have been unnecessary for Samantha and Robert to have been named as party/Defendants had the estate not been distributed to them. However, he accepted that they were likely, in any event, to have been witnesses in the proceedings so that some of the evidence that has been filed would have been filed even if the estate had not been distributed.
After Ex. 2 was tendered, it seems to have been accepted by counsel that, had the Plaintiffs acceded to the undertaking that had been proffered, it would have been unnecessary to join Samantha and Robert as parties. Then, during submissions, counsel for Michelle and Tracy eschewed any suggestion that the costs of all of the Defendants, calculated on the indemnity basis, should not be paid out of the estate. It is for this reason that I have used the estimate of costs and disbursements stated by Mr Bingham.
Necessity of a Notional Estate Order
At the commencement of the hearing, the parties agreed that, if an order for provision were to be made in favour of Tracy and/or Michelle, the funds held by Elaine's solicitors would be the source of the payment to satisfy the family provision order. In those circumstances, an order designating those funds as notional estate of the deceased might be made without opposition.
Alternatively, counsel for the Defendants submitted, and each of Elaine, Samantha and Robert agreed, that the amount held in the account could be treated as actual estate of the deceased from which any order for provision and costs, if appropriate, could be paid.
Counsel for the Plaintiffs accepted, at the hearing, that the course submitted by counsel for the Defendants would be appropriate, avoiding the need for further submissions to be made on the notional estate provisions of the Act and the discretionary grounds therein referred.
In those circumstances, I shall make an order that the amount, in each case, to be paid to each of Tracy and Michelle is to be paid out of that fund and shall grant leave to the parties to approach the court for further orders if the family provision order to be made in favour of each of them is not satisfied.
The Statutory Scheme - The Act
Next, I shall discuss the statutory scheme that is relevant to the facts of the present case. Although I have set out most of what I state hereunder in other cases, in view of the importance of this case to the parties, I shall repeat the principles. It is equally important that they are able to follow the reasoning and for each to be satisfied that I have considered the evidence and the submissions in the application.
The wording of the Act is similar to the wording of the Family Provision Act 1982 (NSW) ("the former Act"). However, it is necessary to remember the warning of Kirby P in Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100, at 76,304:
"Purposive construction of the Act
There is always a danger where a reformed Act borrows heavily upon ideas which previously existed in the common law or in an earlier statute, that lawyers will approach the construction of the Act affected by the previous law: Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1985) 2 NSWLR 475, 478. That danger is but an illustration, in the specialised activity of law, of a universal phenomenon of psychology long established in relation to human perception generally. We tend to perceive what we expect. We expect that with which we are familiar.
There is a particular danger in the case of the Family Provision Act in construing its terms by reference to the law which developed around the Testators' Family Maintenance and Guardianship of Infants Act 1916. That Act was passed in earlier times to govern the entitlements of a testator's family, as narrowly defined. The definition by s 3(1) of that Act confined applications to those made by 'the widow, husband or children of such persons'. There was no mention in it of former spouses. Doubtless this was because, for the early part of this century, divorce was relatively infrequent and then based upon concepts of matrimonial fault which would make interference in the testamentary disposition of the deceased unlikely. When enacted, the statute was a radical interference in the power of testamentary disposition. That was a significant power over private property, the disturbance of which was regarded as highly exceptional."
The former Act was repealed by s 5 of the Succession Amendment (Family Provision) Act 2008 (NSW). A new Chapter 3 was added to the Act, which dealt with the topic of family provision from deceased estates. The long title of the Act describes that new Chapter as one to ensure that adequate provision is made for the members of the family of a deceased person, and certain other persons, from the estate of the deceased person. Importantly, this should not be taken to mean that the Act confers, upon those persons, a statutory entitlement to receive a certain portion of a deceased person's estate. Nor does it impose any limitation on the deceased's power of disposition by his, or her, Will. It is only if the statutory conditions are satisfied that the court is empowered, under the Act, to alter the deceased's disposition of his, or her, estate (or the disposition on intestacy), to produce a result that is consistent with the purpose of the Act. Even then, the court's power to do so is discretionary. Thus, the Act subjects freedom of testamentary disposition to discretionary curial intervention in certain classes of case.
The key provision is s 59 of the Act. The court must be satisfied, first, that the applicant is an eligible person within the meaning of s 57(1) (s 59(1)(a)). In New South Wales, it is a multi-category based eligibility system, rather than one with a general category of eligibility (as it is, for example, in Victoria). There are six categories of persons by, or on whose behalf, an application may be made.
Relevantly, in this case, Michelle and Tracy each relies upon the category of eligibility referred to in s 57(1)(c) of the Act. There is no dispute that each is a child of the deceased.
The language of the relevant sub-section is expressive of the person's status, as well as his, or her, relationship to the deceased. There is no age limit placed on an eligible person making an application.
It is only if eligibility is found, that the court must determine whether adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made, relevantly, by the Will of the deceased (the operation of the intestacy rules being irrelevant in this case) (s 59(1)(c)). It is this mandatory legislative imperative that drives the ultimate result and, it is only if the court is satisfied of the inadequacy of provision, that consideration is given to whether to make a family provision order (s 59(2)). Only then may "the Court ... make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made".
Other than by reference to the provision made by the Will in relation to the estate of the deceased, s 59(1)(c) of the Act leaves undefined the norm by which the court must determine whether the provision, if any, is inadequate for an applicant's proper maintenance, education and advancement in life. The question would appear to be answered by an evaluation that takes the court to the provision actually made by the Will, on the one hand, and to the requirement for maintenance, education or advancement in life of the applicant on the other. No criteria are prescribed in the Act as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance, education and advancement in life of the applicant.
Importantly, in s 59(1)(c) of the Act, there no longer appears to be any sanction to consider the provision made by the deceased during his, or her, lifetime for the applicant (see s 9(2) of the former Act).
In Grey v Harrison [1997] 2 VR 359, at 366-367, Callaway JA observed:
"There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, in much the same way as there is a range of awards for pain and suffering or a range of available sentences. Minds may legitimately differ as to the provision that should be made. Furthermore, it is not at all clear that reasons for an appropriate provision need be fully articulated. To borrow again from the analogy of sentencing, what is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight."
It was said, in the Court of Appeal (by Basten JA), in Foley v Ellis [2008] NSWCA 288, at [3], that the state of satisfaction "depends upon a multi-faceted evaluative judgment". In Kay v Archbold [2008] NSWSC 254, at [126], White J said that the assessment of what provision is proper involved "an intuitive assessment". Stevenson J has described it as "an evaluative determination of a discretionary nature, not susceptible of complete exposition" and one which is "inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific": Szypica v O'Beirne [2013] NSWSC 297, at [40].
Under s 59(1)(c) of the Act, the time at which the court gives its consideration to the question of inadequacy of provision is the time when the court is considering the application.
"Provision" is not defined by the Act, but it was noted in Diver v Neal [2009] NSWCA 54; (2009) 2 ASTLR 89, at [34], that the term "covers the many forms of support and assistance which one individual can give to another. That support and assistance will vary over the course of the person's lifetime".
Neither is the word "maintenance", nor the phrase "advancement in life", defined in the Act.
In J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (7th ed, 2006, LexisNexis Butterworths), at 542, the learned authors comment upon the difference between the concepts of maintenance and advancement:
"The essential difference between 'maintenance' and 'advancement' is that 'maintenance' denotes a periodical payment or a payment which could validly be made periodically, whereas 'advancement' denotes a definite unique outlay for a specific purpose. Recipients of maintenance must, practically speaking, be infants, but adults may be recipients of an advancement.
An advancement can never be made of a sum of money which the person to whom it is made can immediately pocket, but it must be made with a view to the establishment of that person in a business or profession, or otherwise in some definite way for that person's benefit, the whole essence of an advancement being the immediate payment of a tolerably large sum for an immediate benefit to one beneficiary."
In Re Dennis (Deceased) [1981] 2 All ER 140, Browne-Wilkinson J, at 145, wrote:
"The court has, up to now, declined to define the exact meaning of the word 'maintenance' and I am certainly not going to depart from that approach. But in my judgment the word 'maintenance' connotes only payments which, directly or indirectly, enable the applicant in the future to discharge the cost of his daily living at whatever standard of living is appropriate to him. The provision that is to be made is to meet recurring expenses, being expenses of living of an income nature. This does not mean that the provision need be by way of income payments. The provision can be by way of lump sum, for example, to buy a house in which the applicant can be housed, thereby relieving him pro tanto of income expenditure. Nor am I suggesting that there may not be cases in which payment of existing debts may not be as appropriate as a maintenance payment; for example, to pay the debts of an applicant in order to enable him to continue to carry on a profit-making business or profession may well be for his maintenance."
In In the Estate of Puckridge, Deceased (1978) 20 SASR 72, at 77, King CJ said:
"The words 'advancement in life' have a wide meaning and application and there is nothing to confine the operation of the provision to an earlier period of life in the members of the family: Blore v Lang (1960) 104 CLR 124, per Dixon CJ at 128."
In Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, Murphy J wrote, at 505:
"Provision for advancement may, for example, extend to retraining or the gaining of a qualification which could advance and perhaps enable an applicant to maintain himself or herself."
In Kleinig v Neal (No 2) [1981] 2 NSWLR 532, Holland J discussed the financial assistance which an applicant may need for his, or her, maintenance and advancement in life, in the following terms:
"If the court is to make a judgment as to what a wise and just testator ought to have done in all the circumstances of the case, it could not be right to ignore that the particular testator was a wealthy man in considering what he ought to have done for his widow or children in making provision for their maintenance, education or advancement in life. There are different levels of need for such things. In the case of maintenance and advancement in life they can range from bare subsistence up to anything short of sheer luxury. A desire to improve one's standard of living or a desire to fulfil one's ambition for a career or to make the fullest use of one's skills and abilities in a trade or business, if hindered or frustrated by the lack of financial means required for the fulfilment of such desire or ambition, presents a need for such assistance and it would seem to me that it is open to a court to say, in the case of a wealthy spouse or parent who could have but has failed to provide such financial assistance, that . . . [the deceased] has failed to make adequate provision for the proper maintenance and advancement in life of the spouse or children who had such need."
In Mayfield v Lloyd-Williams [2004] NSWSC 419, White J, at [114], noted:
"In the context of the Act the expression 'advancement in life' is not confined to an advancement of an applicant in his or her younger years. It is phrase of wide import. (McCosker v McCosker (1957) 97 CLR 566 at 575) The phrase 'advancement in life' has expanded the concept used in the Victorian legislation which was considered in Re Buckland permitting provision to be made for the 'maintenance and support' of an eligible applicant. However Adam J emphasised that in a large estate a more extravagant allowance for contingencies could be made than would be permissible in a small estate and still fall within the conception of maintenance and support."
In Bartlett v Coomber [2008] NSWCA 100, at [50], Mason P said:
"The concept of advancement in life goes beyond the need for education and maintenance. In a proper case it will extend to a capital payment designed to set a person up in business or upon marriage (McCosker v McCosker (1957) 97 CLR 566 at 575; Stiles v Joseph (NSW Supreme Court, Macready M, 16 December 1996); Mayfield v Lloyd-Williams [2004] NSWSC 419)."
In McCoskerv McCosker [1957] HCA 82; (1957) 97 CLR 566, Dixon CJ and Williams J stated, at 575:
"The presence of the words 'advancement in life' in the... Act in addition to the words 'maintenance and education' is not unimportant... 'Advancement' is a word of wide import."
The word "adequate" connotes something different from the word "proper". "Adequate" is concerned with the quantum, described by Rosalind Atherton in 'The Concept of Moral Duty in the Law of Family Provision - a Gloss or Critical Understanding?' (1999) 5 Australian Journal of Legal History 5, at 10, as "an objective, economic test", whereas "proper" prescribes the standard, of the maintenance, education and advancement in life: Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127, per Buss JA, at [72] and [77], which seems to invite more subjective criteria.
These words were considered by Lord Romer in delivering the advice of the Privy Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at 476:
"The use of the word 'proper' in this connection is of considerable importance. It connotes something different from the word 'adequate'. A small sum may be sufficient for the 'adequate' maintenance of a child, for instance, but, having regard to the child's station in life and the fortune of his father, it may be wholly insufficient for his 'proper' maintenance. So, too, a sum may be quite insufficient for the 'adequate' maintenance of a child and yet may be sufficient for his maintenance on a scale that is 'proper' in all the circumstances."
Their Lordships went on to state (at 478):
"The amount to be provided is not to be measured solely by the need of maintenance. It would be so if the Court were concerned merely with adequacy. But the Court has to consider what is proper maintenance, and therefore the property left by the testator has to be taken into consideration."
Dixon CJ and Williams J, in McCosker v McCosker, at 571-572, after citing Bosch v Perpetual Trustee Co Ltd, went on to say, of the word "proper", that:
"It means 'proper' in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement if life must be considered in the light of the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."
In Goodman v Windeyer, Gibbs J wrote, at 502:
"[T]he words 'adequate' and 'proper' are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards."
In Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, at 228, Callinan and Heydon JJ said:
"[T]he use of the word 'proper' ... implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of a kind which was made here...The use of the word 'proper' means that attention may be given, in deciding whether adequate provision has been made, to such matters as what use to be called the 'station in life' of the parties and the expectations to which that has given rise, in other words, reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future."
Santow J pointed out in Gardiner v Gardiner (Supreme Court (NSW), Santow J, 28 May 1998, unrep), that "adequate" and "proper" are independent concepts. He said, at 12:
"'Adequate' relates to the needs of the applicant. It is determined by reference to events occurring up to the death of the deceased, but also encompassing what the deceased might reasonably have foreseen before death. 'Proper' depends upon all the circumstances of the case. These include the applicant's station in life, the wealth of the deceased, the means and proper claims of all applicants, the relative urgency of the various claims on the deceased's bounty, the applicant's conduct in relation to the deceased, the applicant's contribution to building up the deceased's estate, the existence of dependents upon the applicant, the effects of inflation, the applicant's age and sex, and whether the applicant is able-bodied ..."
In Palaganio v Mankarios [2011] NSWSC 61, at [72], White J observed that the question of what provision for a person's maintenance, education or advancement in life is "proper" and the question of whether the provision made by the deceased was "adequate" for that person's maintenance, education or advancement in life involve value judgments on which minds can legitimately differ, and there are no definite criteria by which the question can be answered.
His Honour added, in Slack v Rogan; Palffy v Rogan [2013] NSWSC 522, at [123]:
"The question of what level of maintenance or advancement in life is 'proper' depends on all of the circumstances of the case 'including the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty' (Singer v Berghouse (1994) 181 CLR 201 at 210)."
Until recently, it was unanimously thought that there are two stages of the determination. The first stage, provided for by s 59(1)(c), has been described as "the jurisdictional question": Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, at 208-209. At this stage, the court will consider whether it can make an order for provision for the maintenance, education or advancement in life of a particular applicant. The court does this by determining whether it is satisfied that adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased, for the applicant. If it is not so satisfied, then the court is precluded from making a family provision order. At this stage, the court has regard to, among other things, the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased and the circumstances and needs of the other beneficiaries or potential beneficiaries: see McCosker v McCosker, at 571-572; Singer v Berghouse, at 209-210; Vigolo v Bostin, at [16], [75], [112]; Tobin v Ezekiel [2012] NSWCA 285, at [70].
Whether an applicant has a 'need' or 'needs' is also a relevant factor at the first stage of the enquiry. It is an elusive concept to define, yet, it is an element in determining whether "adequate" provision has been made for the "proper" maintenance, education and advancement in life of the applicant in all of the circumstances. In Collins v McGain [2003] NSWCA 190, Tobias JA, with whom Beazley and Hodgson JJA agreed, said:
"42. Further, there can be no question that, at least as part of the first stage of the process, the question of whether the eligible person has a relevant need of maintenance etc is a proper enquiry. This is so as the proper level of maintenance etc appropriate for an eligible person in all the circumstances clearly calls for a consideration of his or her needs. However, the question of needs must not be too narrowly focussed. It must, in my view, take into account, depending upon the particular circumstances of the case, present and future needs including the need to guard against unforeseen contingencies.
...
47. As I have observed, the issue of need is not confined to whether or not an eligible person has, at the date of hearing, a then need for financial assistance with respect to his maintenance etc. It is a broader concept. This is so because the question of needs must be addressed in the context of the statutory requirement of what is 'proper maintenance etc' of the eligible person. It is because of that context that, in the present case, the 'proper maintenance etc' of the appellant required consideration of a need to guard against the contingency to which I have referred."
In Devereaux-Warnes v Hall (No 3), at [81] - [84], Buss JA said, in respect of the first stage of the process:
"The term 'need' has been used to refer to the claimant's inability to satisfy his or her financial requirements from his or her own resources. See Singer per Gaudron J at 227.
'Need' has also been used in the context of a value judgment or conclusion, namely, that the claimant is 'in need' of maintenance, etc, because inadequate provision has been made for his or her proper maintenance, etc. See Gorton v Parks (1989) 17 NSWLR 1 per Bryson J at 10-11.
The determination of whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, etc, of the claimant will always, as a practical matter, involve an evaluation of the provision, if any, made for the claimant on the one hand, and the claimant's 'needs that cannot be met from his or her own resources on the other. See Hunter per Kirby P at 575.
Although the existence or absence of 'needs' which the claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for his or her proper maintenance, etc. See Singer per Gaudron J at 227. Compare Gorton per Bryson J at 6-11; Collicoat v McMillan [1999] 3 VR 803 per Ormiston J at 816 [38], 820 [47]."
"Need", of course, is a relative concept: de Angelis v de Angelis [2003] VSC 432, per Dodds-Streeton J, at [45]. It is different from "want". The latent difference between the words was stated by Lord Neuberger of Abbotsbury (now President of the Supreme Court of the United Kingdom), in the House of Lords decision, R (on the application of M) v Slough Borough Council [2008] UKHL 52; [2008] 1 WLR 1808, at [54]:
"'Need' is a more flexible word than it might first appear. 'In need of' plainly means more than merely 'want', but it falls far short of 'cannot survive without'."
In Boettcher v Driscoll [2014] SASC 86, David J, at [41], added:
"'Need' is not so synonymous with 'want' such that the two are interchangeable."
As Callinan and Heydon JJ emphasised in Vigolo v Bostin, the question of the adequacy of the provision made by the deceased "is not to be decided in a vacuum" or "by looking simply to the question whether the applicant has enough on which to survive or live comfortably". The inquiry is not confined only to the material circumstances of the applicant. The whole of the context must be examined.
Yet, in referring to the concept of "need", it should also be noted that the statutory formula makes no reference to "need", but rather to "adequate provision for the proper maintenance, education or advancement in life". No doubt, this has prompted White J to write, in Sam Wardy v Gordon Salier; William Wardy v Gordon Salier; Hassiba Wardy v Estate of late Edmond Wadih Wardy, developer and Ch 3 of the Succession Act 2006 [2014] NSWSC 473, at [147], that "the need a claimant must demonstrate is a need for 'proper' maintenance, education and advancement in life", but that does not mean that "adequate provision for proper maintenance and advancement in life implies no more than provision for the necessities of life, irrespective of the size of the estate and the effect, if any, of an order for provision on others". I respectfully agree.
In the event that the court is satisfied that the power to make an order is enlivened (i.e. in this case, it is satisfied that each of Michelle and Tracy is an eligible person, and that adequate provision for her proper maintenance, education or advancement in life has not been made), then, the court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the court at the time the order is made.
The second stage of the process arises under s 59(2) and s 60(1)(b) of the Act. Mason CJ, Deane and McHugh JJ, in Singer v Berghouse, at 211, affirmed that the decision made at the second stage involves an exercise of discretion in the accepted sense. The fact that the court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant's favour.
I have dealt with the question that has been raised in other cases whether the two-stage approach identified in Singer v Berghouse continues to apply to the provisions of the Act in other cases, the most recent of which is Aubrey v Kain [2014] NSWSC 15. I remain of the view that the two-stage approach should continue to apply. I shall not repeat what I said in that case, which is not affected by the recent decision of the Court of Appeal in Phillips v James [2014] NSWCA 4, or its decision of Verzar v Verzar [2014] NSWCA 45.
(Since I delivered my reasons in Aubrey v Kain, Robb J has also considered the topic in Janette Susan Gardiner v Raymond James Gardiner as Administrator of the Estate of the Late Dulcie Eva Gardiner [2014] NSWSC 435. I respectfully adopt his Honour's reasoning, set out at [117] - [120], and [124], as to the persuasiveness of the reasoning of Barrett JA in Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656. I also refer to what Bergin CJ in Eq has written in In the Estate of the late Anthony Marras [2014] NSWSC 915, at [15].)
Ultimately, as Allsop P said in Andrew v Andrew, at [6], "it may be an analytical question of little consequence" since the questions remain the same, namely, whether the court can make an order for provision (whether it is satisfied that adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made) and, if so, whether it should (whether to make an order and, if so, the terms of that order).
Section 60 of the Act, at least in part, is new. It provides:
"(1) The court may have regard to the matters set out in subsection (2) for the purpose of determining:
(a) whether the person in whose favour the order is sought to be made (the 'applicant') is an eligible person, and
(b) whether to make a family provision order and the nature of any such order.
(2) The following matters may be considered by the court:
(a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate,
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate,
(e) if the applicant is cohabiting with another person-the financial circumstances of the other person,
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated,
(g) the age of the applicant when the application is being considered,
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate,
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the court considers it relevant, the extent to which and the basis on which the deceased person did so,
(l) whether any other person is liable to support the applicant,
(m) the character and conduct of the applicant before and after the date of the death of the deceased person,
(n) the conduct of any other person before and after the date of the death of the deceased person,
(o) any relevant Aboriginal or Torres Strait Islander customary law,
(p) any other matter the court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered."
It can be seen that s 60(2) enumerates 15 specific matters, described by Basten JA in Andrew v Andrew, at [37] as "a multifactorial list", and by Lindsay J in Verzar v Verzar [2012] NSWSC 1380, at [123], as "a valuable prompt" to which the court may have regard, together with "any other matter the court considers relevant", for the purposes of determining eligibility, whether to make a family provision order and the nature of any such order.
It was said by White J in Slack v Rogan; Palffy v Rogan, at [121], that s 60 "lists a wide range of matters" that the court "may have regard to", but these do not provide any tangible assistance in answering the question in any particular case whether the provision made in a will was less than adequate for an eligible applicant's "proper" maintenance, education or advancement in life.
In West v Mann [2013] NSWSC 1852, Kunc J, at [12], wrote:
"Section 60(2) provides a helpful checklist but it is no more than that. The Court is not obliged to take those matters into account. The extent to which it does (if at all) will depend upon the facts of each particular case.
Section 60(2)(p) confirms the breadth of matters the Court can take into account. Once enlivened, the Discretion is expressly fettered only by the requirement in s 59(2) that if an order is made, it must be such order 'as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made'".
Beazley P, in Phillips v James, at [51], described s 60(2) as involving:
"... a statutory iteration of matters that had always been considered relevant in the determination of claims for provision by persons claiming an entitlement under a testator's will. However, as Basten JA observed in Andrew v Andrew, the factors identified in s 60(2) provide a more focussed direction to the Court as to relevant matters to which regard may be had. His Honour was of the view that the statutory list invites consideration of a broader range of factors than was previously the case. Whether or not that is so, the important matter is that the Court is required to have regard to the circumstances, including those specified in s 60(2), that it considers relevant in determining whether to make an order for family provision and the nature of any such order."
In Chapple v Wilcox [2014] NSWCA 392, Basten JA, at [7], wrote:
"Section 60 of the Succession Act spells out the matters which the Court may have regard to in determining whether the claimant 'is an eligible person' and whether to make a family provision order: s 60(1). Most of the factors listed in s 60(2) will be irrelevant in relation to whether the applicant is an eligible person, a matter largely dependent upon the language of s 57. The matters set out must be available considerations in relation to both limbs of s 59(1) dealing with a family provision order, namely par (b) and par (c). Section 60 provides no assistance in relation to the different considerations which may arise in respect of each paragraph of s 59(1). The factors are also relevant to the determination of the 'nature of any such order', which presumably includes the discretionary element to be found in s 59(2): s 60(1)(b)."
The section does not prioritise the catalogue of matters that may be taken into account. No matter is more, or less, important than any other. The weight of such of the matters specified in the section, which may be taken into account, will depend upon the facts of the particular case. There is no mandatory command to take into account any of the matters enumerated. None of the matters listed is, necessarily, of decisive significance and none differentiate, in their application, between classes of eligible person. Similarly, there is no distinction based on gender.
It does not say how the matters listed are to be used to determine the matters identified in s 60(1). Considering each of the relevant matters does not prescribe a particular result, and whilst there is likely to be a substantial overlap in the matters that the court may take into account when determining the answers to what is posed in s 60(1), those matters are not identical.
A reference to some of the matters in s 60(2) not only permits, but requires, a comparison to be made between the respective positions of the applicant and any other eligible person, as well as of any beneficiary, whilst others do not. Importantly, also, many of the matters in sub-section (2), of themselves, are incapable of providing an answer to the questions posed in s 60(1).
Leaving aside the question of eligibility, the matters referred to in s 60(2) may be considered on "the discretionary question", namely whether to make an order and the nature of that order. Importantly, under s 60(2), attention is drawn to matters that may have existed at the deceased's death, or subsequently.
Section 65(1) of the Act requires the family provision order to specify:
(a) the person or persons for whom provision is to be made, and
(b) the amount and nature of the provision, and
They own their own home (valued at about $400,000), which is subject to a mortgage of about $14,000. It is anticipated that they will pay this mortgage off within the next two years (as they are making accelerated payments of $800 per fortnight. Once the debt secured by mortgage is repaid, this fortnightly expenditure will not be required, although the possibility exists that Tracy's husband may retire at that time.
As at April 2014, Tracy had about $4,500 in one bank account, in April 2014, which was reduced to $3,695 as at 19 October 2014. She has about $370 in another account. Her husband about $3,300 in one bank account, in March 2014, which was reduced to $1,554 as at 19 October 2014. They have a few shares ($869).
Tracy has superannuation of about $71,462 and her husband has superannuation of about $80,789.
Their home is comfortably furnished, although Tracy gives evidence of having to replace some items. Although the cost of the items she wished to replace were identified in her affidavit by way of a range of prices, when cross-examined, her evidence was that the cost was far more modest. For example, when cross-examined, she stated that the items and cost thereof included a barbecue ($149), an outdoor setting ($1,200), a computer ($1,200 - $1,300), a refrigerator ($1,300), a washing machine ($1,300) and a television ($800).
She also estimated that a holiday would cost her and her husband about $10,000 per year.
Counsel submitted that Michelle should receive a lump sum of $180,000 and that Tracy should receive a lump sum of $90,000. It can be seen that this would exhaust, almost completely, the whole of the net estate, leaving very little for either Samantha or Robert.
Samantha has property with a value of $50,371, comprising superannuation ($38,579), cash in various bank accounts ($8,792) and a car ($3,000). She has some debts, which total approximately $5,000.
Samantha is presently unemployed, having voluntarily ceased employment in September 2014. She received a long service payment of about $6,550 upon ceasing employment, which she is currently using toward living expenses. She intends to seek new employment in early 2015 and is reasonably confident that she will find it.
Samantha currently resides with Elaine. She does not pay any rent or occupation fee. However, she does contribute to household bills, utilities and the cost of groceries.
Samantha's monthly expenditure is in the order of $3,700.
Robert is employed by an air conditioning business in Melbourne as a mechanical plumber. He earns about $4,980 per month. (While there was some cross-examination on the issue of Robert's income, I am satisfied that it is in the order of the amount to which he has deposed).
Robert's monthly expenses, excluding "contingency expenses", total $5,275. (Some of Robert's monthly expenses relate to a property at Cheltenham in New South Wales, which expenses include mortgage repayments ($1,700), strata insurance ($23) and landlord insurance ($60). Robert gave evidence, during cross-examination, that he is in the process of selling the Cheltenham property and that he has been given an indication of a selling price of between $360,000 and $400,000.)
Roberts has assets with a value of $782,000 ($360,000 of which is referable to the Cheltenham property) and liabilities totalling $561,348 ($210,794 of which is referable to the mortgage on the Cheltenham property).
(Robert gave evidence that, presently, his partner, Theresa, contributes to the payment of some shared expenses from her income and savings. Theresa has an income of approximately $3,648 per month. Theresa is expecting their child in May 2015 and Robert gave evidence that she "in all probability will stop working about one to two months before the birth".)
(e) if the applicant is cohabiting with another person-the financial circumstances of the other person
I have set out the financial circumstances of Tracy's husband, with whom she cohabits.
Michelle does not cohabit with any person.
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated
Tracy has rheumatoid arthritis, particularly in her hands, and takes medication for that condition. In addition, she has previously had surgery on her knees and neck. She continues to take antibiotics to assist in her recovery from her neck surgery.
Michelle has primary biliary cirrhosis caused by CREST Syndrome, which affects her liver. She is on preventative medication on a full-time basis. She also suffers from rheumatoid arthritis and from depression.
Samantha was diagnosed with breast cancer in 2007. She has had surgery, chemotherapy and radiation treatment. She gave evidence, in an affidavit sworn in April 2014, that she "will need ongoing screenings, tests, operations and treatment costs relating to the cancer for the rest of [her] life". Samantha also suffers from anxiety and depression and sees a psychologist in this regard.
Robert suffers from asthma and has a condition known as bicuspid heart valve disease. He says that he may need surgery in future regarding the latter condition.
(g) the age of the applicant when the application is being considered
Michelle was born in November 1958 and is currently 56 years of age. Tracy was born in September 1960 and is currently 54 years of age.
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant
It is not suggested that either of Michelle or Tracy made any contribution, financially or otherwise, to the acquisition, conservation and improvement of the estate of the deceased. There is no evidence that either made any specific contribution to his welfare either.
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate
No provision was made for either Michelle or Tracy by the deceased either during his lifetime or from his estate.
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person
The terms of the deceased's Will provide evidence of his testamentary intentions. Those terms have been considered earlier in these reasons. There is no written explanation for making no provision for either Michelle or Tracy.
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the court considers it relevant, the extent to which and the basis on which the deceased person did so
Neither Michelle nor Tracy was being maintained, either wholly or partly, by the deceased before his death.
(l) whether any other person is liable to support the applicant
There is no person, other than, perhaps, the Commonwealth government, with a liability to support Michelle.
Tracy's husband may have some obligation to support Tracy.
(m) the character and conduct of the applicant before and after the date of the death of the deceased person
An evaluation of "character and conduct" may be necessary, not for the sake of criticism, but to enable consideration of what is "adequate and proper" in all the circumstances. Importantly, the Act does not limit the consideration of "conduct" to conduct towards the deceased.
In Collicoat v McMillan [1999] 3 VR 803, at 817, Ormiston J wrote in relation to the manner in which an applicant's behaviour towards the deceased is to be considered:
"...Ordinarily each of the persons who have a statutory right to make application are entitled to have their position considered by a testator but their behaviour (right or wrong) towards the testator may only provide a basis for measuring appropriately the testator's obligation to make provision for each of those applicants. Their sins are irrelevant except insofar as a testator might properly take exception to their behaviour."
I have referred to the conduct of each of Michelle and Tracy before the death of the deceased. There is no suggestion that there is any conduct after his death which is relevant to the claim of each.
(n) the conduct of any other person before and after the date of the death of the deceased person
There is no suggestion that there is any conduct of each of Samantha and Robert, before or after the death of the deceased, which is relevant to the competing claim of each.
(o) any relevant Aboriginal or Torres Strait Islander customary law
This factor is not applicable.
(p) any other matter the court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered
This factor is not relevant.
Determination
Being an "eligible person" is a necessary precondition to the court being empowered to make an order for the maintenance, education or advancement in life of the eligible person. In this case, there is no dispute that each of Michelle and Tracy, as a child of the deceased, is an eligible person within the meaning of s 57(1)(c) of the Act.
There is also no dispute that each commenced her proceedings within the time prescribed by the Act.
Thus, I must first consider whether, at the present time, adequate provision for the proper maintenance, education, or advancement in life of each of Michelle and Tracy has not been made by the deceased's Will.
The court is required to consider all of the circumstances. Whether inadequate provision was made requires an assessment of the financial position of each of the applicants, the size and nature of the deceased's estate, the relationship between each of the applicants and the deceased, the relationship between the deceased and other persons who have legitimate claims upon the deceased's bounty and the circumstances and needs of those other persons: see Tobin v Ezekiel, at [70]; McCosker v McCosker, at 571-572; Singer v Berghouse, at 210; Vigolo v Bostin, at [16], [75], [112]; and Verzar v Verzar [2014], at [39].
Taking into account all of the matters that I am required to consider at the first stage, including the size and nature of the estate, the relationship between each of Michelle and Tracy and the deceased, and the relationship between the deceased and the other persons who have a legitimate (and, in this sense, competing) claim upon his bounty (Samantha and Robert, as the chosen objects of testamentary bounty), I am satisfied that each of Michelle and Tracy has satisfied the jurisdictional threshold and that adequate provision for her proper maintenance or advancement in life was not made by the Will of the deceased.
It is clear, in my view, that each has some immediate "needs", although those of Michelle are greater than those of Tracy. As stated above, "need" in the context of the Act is not determined by reference only to minimum standards of subsistence. Nor is it limited to whether the applicant has, at the date of hearing, an immediate need for financial assistance with respect to her maintenance. It is a broader concept, which requires consideration of matters necessary to guard against unforeseen contingencies. The term is also used in the in the sense of what was necessary for the applicant's "proper maintenance, education and advancement in life": Akkerman v Ewins [2003] NSWCA 190, per Tobias JA, with whom Beazley and Hodgson JJA agreed.
In coming to the conclusion on jurisdiction, I also have taken into account the legitimate claims upon the bounty of the deceased and that there was no obligation or responsibility for the deceased to provide for each of Samantha and Robert. However, that he chose to provide for them must be remembered for the reasons I have identified regarding the importance of freedom of testation.
I turn now to the second stage, namely the nature of the order that should be made in favour of each of Michelle and Tracy. The more difficult question then arises, namely what provision "ought to be made for the maintenance, education or advancement in life" of each, having regard to the facts known to the court. This involves "an instinctive synthesis that takes into account all the relevant factors and gives them due weight": Grey v Harrison. It is not a scientific, or arithmetic, exercise.
I am of the opinion that each should receive some additional provision, which would provide her with a capital sum for exigencies of life. The claim of Michelle in this regard is accepted as being greater than that of Tracy. Not only is she not working, but she does not have any person with whom she cohabits who could provide support if required.
In my opinion, the lump sum for Michelle should be $90,000 and, in the case of Tracy, should be $60,000. In the case of each, that would provide enough to pay off all liabilities and leave a capital sum as a buffer for exigencies of life. In the case of Michelle, it would, if invested, provide a small additional income to supplement her pension income.
Since the fund from which the amounts are to be paid is available, each lump sum should be paid within 14 days. If so paid, no interest is payable; otherwise, interest at the rate prescribed by s 84A(3) of the Probate and Administration Act, calculated from 14 days from the date of the making of these orders until the date of payment, shall be paid.
Unless any party wishes to make further submissions on costs, the application for which should be made within 7 days, my provisional view is that the Plaintiffs' costs, calculated on the ordinary basis, and the Defendants' costs, calculated on the indemnity basis, should be paid out of the estate of the deceased.
Subject to an application to make an order for costs in different terms, the court:
(i) Having found that the first Plaintiff is an eligible person and that the provision made for her in the Will of the deceased is not adequate for her proper maintenance or advancement in life, orders that she receive a lump sum of $60,000, to be paid from the fund held by the solicitors on behalf of the Defendants.
(ii) Having found that the second Plaintiff is an eligible person and that the provision made for her in the Will of the deceased is not adequate for her proper maintenance or advancement in life, orders that she receive a lump sum of $90,000, to be paid from the fund held by the solicitors on behalf of the Defendants.
(iii) Orders that no interest be paid on each lump sum if it is paid within 14 days of the making of these orders; otherwise, interest calculated at the rate prescribed by s 84A(3) of the Probate and Administration Act 1898 (NSW), on unpaid legacies, is to be paid from that date until the date of payment.
(iv) Unless any party wishes to make further submissions on costs, the application for which should be made within 7 days, orders that the Plaintiffs' costs, calculated on the ordinary basis, and the Defendants' costs, calculated on the indemnity basis, be paid out of the fund held by the solicitors on behalf of the Defendants.
(v) Grants liberty to any party to apply, in these proceedings, for consequential and ancillary orders for the purpose of, or with respect to, giving effect to, and implementing, the family provision order made in favour of each of the Plaintiffs.
(vi) Orders that the Exhibits be dealt with in accordance with the Uniform Civil Procedure Rules 2005 (NSW) and Practice Note No SC Gen 18.
(vii) Directs that the Court Book be returned.
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Decision last updated: 05 December 2014
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