Re Williams; Smith v Thwaites
[2017] VSC 365
•23 June 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S CI 2015 03820
IN THE MATTER of Part IV of the Administration and Probate Act 1958
-and-
IN THE MATTER of the will of MARGARET MARY WILLIAMS, deceased
| ELIZABETH RUTH SMITH | Plaintiff |
| v | |
| ALAN KEITH THWAITES (as executor of the estate of Margaret Mary Williams, deceased) | Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 23 May 2016 |
DATE OF JUDGMENT: | 23 June 2017 |
CASE MAY BE CITED AS: | Re Williams; Smith v Thwaites |
MEDIUM NEUTRAL CITATION: | [2017] VSC 365 |
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FAMILY PROVISION — Where testatrix made limited provision for adult stepdaughter — Where moral duty to plaintiff conceded — Where quantum of further provision in dispute — Justice Legislation Amendment (Succession and Surrogacy) Act 2014 — Administration and Probate Act 1958, Part IV — McKenzie v Topp [2004] VSC 90.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S P Newton | McCarthy Partners |
| For the Defendant | Mr S E Marantelli | Meerkin & Apel |
HER HONOUR:
Introduction
Margaret Mary Williams (‘the deceased’) died on 12 March 2015, leaving a will dated 27 May 2011. Her husband, the plaintiff’s father, predeceased her. She was survived by her three children, Mr Alan Keith Thwaites (‘the defendant’), Mrs Janette Gunn and Mr Ian Thwaites and her three stepchildren, one of whom is the plaintiff.
The deceased’s estate is valued at approximately $1.4 million, being the combination of the net sale proceeds for the Mount Waverley property of $1 213 722 and the residue of her estate of approximately $155 000.
Under the deceased’s will dated 27 May 2011, the plaintiff has been left a quarter share of the residue of her estate amounting to approximately $38 756. The balance of the deceased’s estate was left to her three children.
Plaintiff’s application
By originating motion filed 24 July 2015, the plaintiff seeks further provision from the estate of the deceased pursuant to Part IV of the Administration and Probate Act 1958 (‘the Act’), to the extent of a quarter share of the whole estate.
As the deceased died on 12 March 2015, the plaintiff’s claim for further provision is governed by amendments to the Act as contained in the Justice Legislation Amendment (Succession and Surrogacy) Act 2014 (‘the 2014 amendments’), which came into effect on 1 January 2015.[1] Under the Act, an eligible person may make an application for a family provision order.
[1]Justice Legislation Amendment (Succession and Surrogacy) Act 2014, s 2(1); Victorian Government Gazette S400, 29 October 2014, p 2.
The parties agreed that the plaintiff, as a stepchild of the deceased, is an eligible person under s 90(f) of the Act. At trial, the issue of whether a stepchild is an eligible person under the 2014 amendments was not free from doubt, with the issue of eligibility then being considered in a separate proceeding before the Court.[2] Although the facts in Bail concerned the eligibility of a stepchild in the context of a domestic relationship, the possibility existed that the decision could affect the plaintiff’s eligibility in this proceeding.
[2]Bail v Scott-Mackenzie [2016] VSC 563 (20 September 2016) (‘Bail’).
Subsequently, an appeal from the decision of the primary judge in Bail was made. The Court notified the parties that the decision in this proceeding would not be made until the appeal was finalised. The decision of the Court of Appeal did not affect the agreed status of the plaintiff being an eligible person under the 2014 amendments.[3]
[3]Scott-Mackenzie v Bail [2017] VSCA 108 (10 May 2017).
Applicable legislation and principles
Legislation
Pursuant to s 91(1) of the Act, the Court may order that provision be made out of the estate of a deceased person for the proper maintenance and support of an eligible person.
Matters that must be satisfied pursuant to s 91(2) of the Act before an order can be made
The Court must not make a family provision order under s 91(1) of the Act unless satisfied that:
(a) an applicant is an eligible person: s 91(2)(a);
(b) at the time of death, the deceased had a moral duty to provide for the eligible person’s proper maintenance and support: s 91(2)(c); and
(c) the distribution of the deceased’s estate fails to make adequate provision for the proper maintenance and support of the eligible person, whether by the deceased’s will or the operation of the intestacy provisions or both: s 91(2)(d).
Factors that the Court must have regard to pursuant to s 91A(1) of the Act in making a family provision order
In making a family provision order, the Court must have regard to:
(a) the deceased’s will, if any: s 91A(1)(a);
(b) any evidence of the deceased’s reasons for making the dispositions in the will, if any: s 91A(1)(b); and
(c) any other evidence of the deceased’s intentions in relation to providing for an eligible person: s 91A(1)(c).
Discretionary factors that may be taken into account in making a family provision order under s 91A(2) of the Act
In making a family provision order, s 91A(2) provides that the Court may take into account the following criteria:
(a) the nature of the relationship, including the length of the relationship, if relevant;
(b) any obligations or responsibilities of the deceased to the eligible person, any other eligible person and the beneficiaries;
(c) the size and nature of the estate;
(d) the current and future financial resources, earning capacity and financial needs of the eligible person and any beneficiary;
(e) any physical, mental or intellectual disability of any eligible person or any beneficiary;
(f) the age of the eligible person;
(g) any contributions (not for adequate consideration) of the eligible person to building up the estate or to the welfare of the deceased or the deceased’s family;
(h) any previous benefits to the eligible person or any beneficiary;
(i) whether the eligible person was being wholly or partly maintained by the deceased, and if so, the extent and basis of such maintenance;
(j) the liability of any other person to maintain the eligible person;
(k) the character and conduct of the eligible person or any other person;
(l) the effect that a family provision order would have on the amounts received from the deceased’s estate by other beneficiaries; and
(m)any other matter the Court considers relevant.
Factors that must be taken into account in determining the amount of provision under s 91(4)(a), (b) and (c) of the Act
If an applicant satisfies the criteria in s 91(2) and invokes the discretionary jurisdiction of the Court to make a family provision order, the Court must then take into account the matters set out in s 91(4) to determine the amount of provision to be made, if any. In particular, the Court must:
(a) assess the degree to which the deceased had a moral duty to provide for the applicant: s 91(4)(a);
(b) take into account the degree to which the distribution of the deceased’s estate fails to make adequate provision for the proper maintenance and support of the applicant: s 91(4)(b); and
(c) take into account the degree to which an eligible person referred to in s 90(f) or (g) of the Act, being an adult child or adult stepchild, is not capable by reasonable means of providing adequately for their own proper maintenance and support: s 91(4)(c).
Factors that must be taken into account in determining the amount of provision under s 91(5)(a) of the Act
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.
Moral duty of a deceased in family provision jurisdiction
The concept of moral duty or moral claim is well known in the family provision jurisdiction. In Collicoat v McMillan, Ormiston J described the duty as follows:
… the expression ‘moral claim’ has always been treated as a convenient shorthand expression referring to the right correlative to the duty imposed on testators to make adequate provision for the proper maintenance and support of persons within the class specified. That ‘moral obligation’, as described in Re Allen and many later cases, reflects a duty resting on a testator to make not merely adequate or sufficient financial provision for members of his or her family in the specified class but also the obligation to measure that adequacy or sufficiency by reference to what is right and proper according to accepted community standards.[4]
[4]Collicoat v McMillan [1999] 3 VR 803, 818 [43], referring to Re Allen; Allen v Manchester [1922] NZLR 218. See also Andrew v Andrew (2012) 81 NSWLR 656.
The court places itself in the position of the testator. The applicable test is of a wise and just testator, rather than a fond and foolish one.[5] The wise and just testator is to be judged according to current community standards.[6] However, it is not for the court to rewrite the will by reference to abstract considerations of fairness.[7]
[5]Bosch v Perpetual Trustee Co Ltd [1938] AC 463, 478–9 (Lord Romer).
[6]McKenzie v Topp [2004] VSC 90 (30 March 2004) [58] (Nettle J). See also Poole v Barrow [2014] VSC 576 (24 November 2014).
[7]Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9, 19 (Dixon CJ); Downing v Downing [2003] VSC 28 (24 February 2003) [42] (Osborn J), citing Worladge v Doddridge (1957) 97 CLR 1, 20 (Kitto J).
Whether a testator fulfilled his or her moral duty to provide an applicant’s proper maintenance and support is a matter of fact and degree, taking into account the mandatory and discretionary factors set out under the Act. The court’s discretion in family provision cases is not restricted nor is it to be exercised according to idiosyncratic notions of what was thought to be fair or to transgress unnecessarily upon a testator’s freedom of testamentary disposition.[8]
[8]Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9, 19 (Dixon CJ); McKenzie v Topp [2004] VSC 90 (30 March 2004) [63] (Nettle J).
The concept of a testator’s moral duty remains for family provision cases notwithstanding that s 91A(1) of the Act mandates that the Court must take into account what a testator provided in the will and whether he or she gave any reasons or made his or her intentions known in relation to the provision made for an eligible person.
It has always been the case that the terms of any testamentary expressions of the deceased in admissible form are taken into account in cases concerning family provision.[9] Prior to the 2014 amendments and in respect of applications for family provision made where a deceased died after 20 July 1998, the Court had a discretion to accept any evidence of the reasons of a deceased for making the disposition in his or her will, if any, and for not making proper provision for an applicant, whether or not the evidence was in writing. By mandating that the Court must take such expressions into account it is not intended that such evidence, by will or in other evidence, suddenly takes on some higher status. The weight to be attached to such statements 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.
Adequate provision for the proper maintenance and support of an applicant
[9]Hughes v National Trustees, Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134, 149–150, 152 (Gibbs J). See also Grey v Harrison [1997] 2 VR 359, 362–3 (Callaway JA, with whom Tadgell and Charles JJA agreed); Whitehead v State Trustees Ltd [2011] VSC 424 (2 September 2011) [40] (Bell J); Webb v Ryan [2012] VSC 377 (3 September 2012) [20]–[21] (Whelan J).
While s 91(1) of the Act does not contain the word ‘adequate’ before the words ‘provision … for the proper maintenance and support of an eligible person’, the word ‘adequate’ is included in ss 91(2)(d) and 91(4)(b) as a factor in determining the quantum of any provision. These words have developed a legal meaning over many years. Where a word used in statute has an established legal meaning, the court assumes that Parliament intended that word to be used with that meaning unless the context indicates otherwise.[10] There is no indication of a contrary intention in respect of s 91(4)(c) of the Act and the words ‘adequate provision‘ and ‘proper maintenance and support’ must be construed in accordance with their legal meaning.
[10]See, eg, Davies v Western Australia (1904) 2 CLR 29, 42–3 (Griffiths CJ); Yorke v Lucas (1985) 158 CLR 661, 668 (Mason ACJ, Wilson, Deane and Dawson JJ); Palgo Holdings Pty Ltd v Gowans (2005) 221 CLR 249.
The distinction between ‘adequate’ and ‘proper’ was described in Bosch v Perpetual Trustee Co Ltd, where the Privy Council stated:
The first thing to be noticed is that the powers given to the Court only arise when any of the persons mentioned is left without adequate provision for his or her proper maintenance … the word “proper”… 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 … when the condition precedent to the exercise of the powers given by the sub-section is shown to be fulfilled, those powers extend to making such provision as the Court thinks fit for “such” maintenance, that is to say, for proper maintenance.[11]
…
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.[12]
[11]Bosch v Perpetual Trustee Co Ltd [1938] AC 463, 476 (Lord Romer).
[12]Ibid 478.
That is, ‘proper maintenance and support’ means provision from the estate not simply to alleviate poverty but also to take into account the vicissitudes of life.[13]
[13]In essence, this concept is founded on the reasoning of Stout CJ in Allardice v Allardice (1909) 29 NZLR 959 and has been applied in family provision cases time and time again.
What constitutes adequate provision for the proper maintenance and support of an applicant involves a consideration of the mandatory and discretionary matters under the Act, having regard to the meaning of these terms as developed in the jurisprudence of the family provision jurisdiction.[14] 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 preferred dispositions. In determining these questions, a balance must be drawn between the established claims of named beneficiaries, the needs of an applicant, the size of the estate and the benefits provided to an 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.[15] The court's role goes no further than making adequate provision for the proper maintenance and support of an applicant.
[14]See, eg, Singer v Berghouse (1994) 181 CLR 201.
[15]See, eg, In re Hodgson (1955) VLR 481; Blair v Blair (2004) 10 VR 69; Delaney v Jones [2008] NSWSC 229 (11 March 2008).
The assessment as to whether the testator failed to make adequate provision is determined by reference to matters that were known, ought to have been known, or were reasonably foreseeable to the deceased at the time of his or her death.[16]
[16]Coates v National Trustees Executors & Agency Co Ltd (1956) 95 CLR 494, 507–8 (Dixon CJ).
In determining the amount of further provision to be made, the court must allow an amount that is not greater than is necessary for an applicant’s proper maintenance and support. The nature and content of what is adequate provision is a flexible concept, adapted to conform to acceptable community standards and involves a broad evaluative judgment not constrained by preconceptions and predispositions.[17]
[17]See, eg, Camernik v Reholc [2012] NSWSC 1537 (13 December 2012) [154] (Hallen J); Slack v Rogan (2013) 85 NSWLR 253, 284 [125]–[126] (White J) (citations omitted), interpreting the similar legislative regime in New South Wales under s 59 of the Succession Act 2006 (NSW).
Other relevant constraints or limiting factors may be that further provision should be made only if, and to the extent that, it is necessary to alter the will to make adequate provision for an applicant’s proper maintenance and support,[18] or that any further provision must be limited by balancing the needs of an applicant against the proper claims that a testator recognised needed to be satisfied out of his or her testamentary bounty.
[18]Grey v Harrison [1997] 2 VR 359, 366 (Callaway JA, with whom Tadgell and Charles JJA agreed).
The assessment as to what provision the Court should make is determined at the date of the trial, taking into account the plaintiff’s circumstances at that time.[19]
[19]See, eg, Blore v Lang (1960) 104 CLR 124, 130 (Dixon CJ); Prosser v Twiss [1970] VR 225, 232 (Lush J); Slack v Rogan (2013) 85 NSWLR 253, 285 [127] (White J).
Factual background
In 1971, when the plaintiff was aged 18 years, the plaintiff’s mother died. At that time or shortly thereafter, the plaintiff moved from home to become a nurse. Following the death of her mother, the plaintiff considered her father to be the ‘number one person in [her] life’. In August 1973, her father married the deceased. When her father re-married, the plaintiff was aged 20 years. The deceased’s children were aged 19, 17 and 12 years respectively.
Prior to her marriage to the plaintiff’s father, the deceased lived with her three children in her Mount Waverley property. The deceased and her first husband had purchased the land in 1951 and built their family home on it in 1957. The deceased’s first husband died as a result of an industrial accident. The death benefit the deceased received as a result of his death was used by the deceased to discharge the mortgage on the Mount Waverley property and it remained unencumbered.
When the plaintiff’s father remarried, he sold his own family home and used the proceeds of sale for the benefit of himself, the deceased and her family. The deceased and the plaintiff’s father lived in the deceased’s Mount Waverley home with her children, two of whom were working and one still at school. The plaintiff’s father supported the school age child. The plaintiff did not ever live at Mount Waverley with them. When they married, the deceased was in paid employment and had some limited funds of her own. She did not remain in paid employment and the plaintiff’s father was the principal ‘bread winner’ for the family. The deceased and the plaintiff were married for 38 years. The plaintiff’s father died in March 2011. On his death, the deceased had $41 460 in her own name.
The Mount Waverley property remained in the deceased’s name and it was recognised by the plaintiff’s father, the deceased and her children that the property was hers from her first marriage.
The plaintiff’s father worked full time in a good job until his retirement in 1985. Upon his retirement, he received a pension and superannuation which he used to support himself and the deceased.
The plaintiff accepted the deceased as her stepmother as she was ‘determined to make sure that whatever made [her father] happy made us happy’. When she was at home with her children, the plaintiff visited the deceased and her father in the normal course on weekends and weekdays. She accepted the deceased as her father’s wife, maintaining a relationship with both her father and the deceased. Their relationship was amicable and the deceased accepted the plaintiff as her stepdaughter and they celebrated some birthdays, Christmases and other family events together. There were periods when the plaintiff and her family lived in Queensland but she maintained contact, sending cards at Christmas and on birthdays, telephoning and visiting on holidays.
She endeavoured to have a close relationship with the deceased but it was not easy as, to some extent, this was thwarted by the deceased’s attitude to her. The plaintiff’s evidence is corroborated by the deceased’s three children. They deposed the deceased did not like the plaintiff, although no real basis for that dislike was set out in their affidavits. Any difficulties in the relationship do not appear to have been caused by any lack of interest or disloyalty on the part of the plaintiff.
The plaintiff assisted the deceased when her father was in hospital before he died. She maintained contact with her after her father’s death and was concerned for her wellbeing. She attempted to maintain a cordial and amicable relationship with the deceased and it was significant to the plaintiff to ensure that her only remaining parent was happy. It was not a relationship, however, that could be characterised as in loco parentis.
The estate of the plaintiff’s father was approximately $189 000 which was left to the deceased, with no provision for his children or stepchildren. In addition, the deceased received a further amount of approximately $30 000 outside of the estate, being half of the funds in four jointly held bank accounts.
Plaintiff’s financial position
The plaintiff lives with her husband in Gympie, Queensland. At the date of the trial, she was aged 63 years and her husband was aged 67 years. She is unemployed, having been made redundant just before the trial from her position as a medical receptionist where she earned between $20 000 to $30 000 per annum. Few job opportunities exist for a person of her age in her regional community. Her accrued superannuation was approximately $117 000. She is not eligible for the pension until she attains the age of 65 years.
The plaintiff’s husband was a self-employed carpenter and has now retired. In recent years, his taxable income has not exceeded $10 000. He receives the pension which is not a sufficient amount to support the plaintiff financially.
The combined assets of the plaintiff and her husband total approximately $500 000. This includes their unencumbered house in Gympie and savings of approximately $67 000. Her inheritance under the deceased’s will is estimated at $38 756, subject to any costs of this proceeding affecting that amount.
Financial position of the deceased’s children
Under the deceased’s will, her three children each receive one third of the proceeds of sale of the Mount Waverley property and one quarter of the residue of the estate. In monetary terms and excluding costs of this proceeding that might be paid out of the estate, each will receive approximately $440 000.
The defendant owns a home with his wife and they both own motor vehicles. He has a pension fund and his wife has a small amount of superannuation. They also have some savings.
Mrs Gunn owns a home and a motor vehicle. She has minimal superannuation and works, receiving a modest income. She also has some debt.
Mr Thwaites owns a home and has two investment properties with his wife, all of which are encumbered by mortgages. He and his wife own motor vehicles. They have some superannuation and both of them work.
Mandatory factors under s 91A(1) of the Act in making a family provision order
The deceased’s last will, made after the death of the plaintiff’s father, devised her Mount Waverley property to her three children and left the residue of the estate to the plaintiff and her three children as tenants in common in equal shares.
The deceased’s penultimate will dated 29 March 2001 left a life interest in the Mount Waverley property to the plaintiff’s father, with the remainder interest in the property to her three children. The residue of her estate was left to the plaintiff’s father and, if he did not survive her, then to the plaintiff and her three children as tenants in common in equal shares.
Apart from the deceased’s ownership of the Mount Waverly property, the plaintiff’s father and the deceased intermingled their assets seemingly without segregation. In a letter of financial advice dated 1 May 2001, the only income listed was that of the plaintiff’s father. The advice listed their combined annual living needs and expenses together. The Mount Waverly property was listed as being the deceased’s property and valued at $230 000. The deceased’s estate objectives were to provide a life interest in the property to the plaintiff’s father and then ‘3 of 6 children’.
Since at least March 2001, the deceased’s testamentary intentions were always that her Mount Waverley property would ultimately pass to her three children.
Discretionary factors under s 91A(2) of the Act in making a family provision order
Many of the discretionary factors that may be taken into account in making a family provision order under s 91A(2)(a)–(m) of the Act have already been set out in these reasons at paragraphs [27] to [42]. These matters need not be repeated in this section. The remaining discretionary factors are now set out.
(a) The nature of the relationship, including the length of the relationship, if relevant
The evidence is set out above.
(b) Any obligations or responsibilities of the deceased to the eligible person, any other eligible person and the beneficiaries
The deceased has three children, all of whom are beneficiaries under her will. She has obligations to them as their mother.
The plaintiff is one of three stepchildren of the deceased and had a relationship with the deceased as her stepchild. It was not a relationship in loco parentis. The deceased’s other two stepchildren did not accept their father’s relationship with the deceased and became estranged from their father.
(c) The size and nature of the estate
The evidence is set out above.
(d) The current and future financial resources, earning capacity and financial needs of the eligible person and any beneficiary
The evidence is set out above.
(e) Any physical, mental or intellectual disability of any eligible person or any beneficiary
Neither the plaintiff, the defendant nor the deceased’s two other children have any physical, mental or intellectual disability.
(f) The age of the eligible person
The evidence is set out above.
(g) Any contributions (not for adequate consideration) of the eligible person to building up the estate or to the welfare of the deceased or the deceased’s family
The plaintiff does not assert any contributions to building up the estate of the deceased or to her welfare. The plaintiff made no contribution to the estate of the deceased, save to the extent that she contributed by way of not receiving any provision from her father on his death.
(h) Any previous benefits to the eligible person or any beneficiary
The evidence is set out above.
(i) Whether the eligible person was being wholly or partly maintained by the deceased, and if so, the extent and basis of such maintenance
The plaintiff was not being wholly or partly maintained by the deceased.
(j) The liability of any other person to maintain the eligible person
The plaintiff’s husband has an obligation to maintain the plaintiff. He is retired and receives a small pension.
(k) The character and conduct of the eligible person or any other person
There is no evidence of any substantial nature that reflects adversely on the plaintiff’s character and conduct. This is supported by her correspondence to Mr Thwaites where she expressed herself in a reasoned and moderate manner.
There is no evidence that reflects adversely on the characters and conduct of the defendant, Mrs Gunn or Mr Thwaites.
All are assumed to be of good character and conduct.
(l) The effect that a family provision order would have on the amounts received from the deceased’s estate by other beneficiaries
Any family provision order made in favour of the plaintiff will have an adverse effect on the amount available for the deceased’s three children.
(m) Any other relevant matter
Relevant matters are set out above.
In addition, after the death of the plaintiff’s father, the deceased gave the plaintiff the sum of $5 000 from the superannuation benefits received by her under his will.
After the deceased’s death, one of her children gave the plaintiff an additional $10 000.
Consideration
As an adult stepchild of the deceased, the applicant is an eligible person under the Act and she is entitled to make an application for a family provision order, satisfying the first limb of the jurisdiction test: s 91(2)(a) of the Act.
The defendant accepts that the plaintiff has a moral duty to the plaintiff but does not accept that the plaintiff satisfies the second and third limbs of the jurisdiction test because:
(a) the deceased satisfied her moral duty to the plaintiff by leaving her a quarter share of her residuary estate: s 91(2)(c) of the Act; and
(b) a quarter share of the deceased’s residuary estate provided the plaintiff with adequate provision for her proper maintenance and support: s 91(2)(d) of the Act.
The defendant’s submission that the plaintiff does not satisfy the second and third limbs of the jurisdiction test was explained by the following scenarios:
(a) if the plaintiff had made a claim for family provision from her father’s estate after he died, her claim would have been likely to have been dismissed because of the strength of the widow’s competing financial claim, as although she had a secure home, her other assets were limited; or
(b) in the event that the plaintiff’s father survived the deceased, his will left a quarter share of his estate to the plaintiff. His estate amounted to around $190 000. This meant the plaintiff would have received approximately $38 000 or much the same as she now receives under the deceased’s will.
Where the plaintiff does not satisfy the second and third limbs of the jurisdiction test under the Act, the Court must not make a family provision order. This means that the mandatory factors that must be taken into account in making a family provision order under s 91A(1)(a) of the Act and in determining the amount of provision under s 91(4)(a), (b) and (c) do not arise for consideration.
In determining the satisfaction of the second and third limbs of the jurisdiction test, the Court does not approach the family provision legislation in an unduly narrow and restrictive manner. It would be difficult for the Court to conclude that the second and third limbs were not satisfied based on the two scenarios put forward by the defendant without having regard to the mandatory and discretionary factors that fall to be considered in determining the jurisdictional questions under the Act. To do so would disregard the substantive basis for the plaintiff’s claim that all the assets of the plaintiff’s father are to be found in the assets of the deceased’s estate. The plaintiff contends that when the plaintiff’s father married the deceased, he sold his former family home and thereafter used those funds, his income and his superannuation to support the deceased and, for a time, one or other of her children. She relies on her father’s financial contribution in supporting the deceased as a factor that should be taken into account in the exercise of the Court’s discretion. She contends that under family law and equitable principles, the plaintiff’s father should be regarded as having contributed to the acquisition, preservation and maintenance of the deceased’s assets owned by her at the date of her death, consistent with principles referred to in Read v Nicholls[20] and McKenzie v Topp.[21]
[20]Read v Nicholls [2004] VSC 66 (16 March 2004).
[21]McKenzie v Topp [2004] VSC 90 (30 March 2004).
The facts in Read v Nicholls are substantially different to the facts in this proceeding. The applicant in Read v Nicholls claimed to be the domestic partner of the deceased. She sought provision from his estate and claimed constructive trusts over two properties in the name of the deceased. The applicant died four months after commencing her claims and it was continued by her legal personal representative. Her family provision claim failed for want of evidence. Her constructive trust claims were successful in part with a small percentage of the two properties being held on constructive trust for her on the basis of her indirect contributions, such as support, homemaking and care of the deceased. The decision merely reflects the application of constructive trust principles applied to the facts in that case.
The plaintiff’s situation does bear some similarities to the applicant in McKenzie v Topp but there are also significant differences.[22] The applicant in McKenzie v Topp was a stepchild of the deceased. The stepmother did not have her own children and left the residue of her estate to her nephew. On her marriage to the applicant’s father, the stepmother owned a house in Melbourne with five or six bungalows in the backyard used as boarding houses. When the applicant’s father died, his estate was minimal, being $12 500 and was left to the applicant’s stepmother.
[22]Ibid [56]–[58], [60] (Nettle J).
The applicant lived with the deceased and his father as a family from the age of 10 and lived with them for a further 22 years. He then effectively became a live-in carer for the deceased towards the end of her life and was able to establish significant need for the purposes of his claim for provision, having no house and no superannuation, albeit, as a result of his own default and subsequent bankruptcy. Unlike the plaintiff in this proceeding, the applicant also received considerable benefits from his stepmother and his natural father during his lifetime, including living with them after the breakdown of his marriage and during his bankruptcy. In considering all of those factors, Nettle J concluded that the stepmother owed obligations and responsibilities as if the applicant had been her child and awarded the applicant approximately 40 per cent of the estate.[23]
[23]Ibid [22]–[23], [68].
In this case, the plaintiff’s relationship with the deceased was not as a mother and natural child. There was a relationship and it was characterised as cordial and amicable despite the deceased’s somewhat negative attitude towards her. It was not so negative, however, that the deceased excluded the plaintiff entirely from receiving a benefit under her will.
The cases concerning claims by stepchildren against the estate of a stepparent show that there is no particular formula to be applied where the stepparent inherits the estate of the natural parent. It is simply a factor to take into account in assessing whether the stepparent has a responsibility to provide for their stepchild, along with facts concerning the relationship between an applicant and the deceased and an applicant’s need for provision.[24] In this manner, in determining the jurisdictional issues in a claim for further provision, the Court considers the mandatory and discretionary factors set out in the Act to inform its decision as to whether an eligible person satisfies the jurisdiction test for provision, and if so, whether a family provision order should be made in the circumstances.
[24]See, eg, Peterson v Micevski [2007] VSC 280 (14 August 2007) [135]–[138] (Hansen J); Robertson v Koska [2010] VSC 134 (16 April 2010).
The mandatory consideration under s 91A(1) of the Act of a testator’s testamentary intentions and any reasons or intentions in relation to providing for an eligible person is legislative recognition of the freedom of testation, a view long espoused by the courts in family provision decisions.[25]
[25]Grey v Harrison [1997] 2 VR 359, 366 (Callaway JA).
The deceased’s will and the evidence of her testamentary intentions since March 2001, insofar as the plaintiff is concerned, establish that she wished to make provision for the plaintiff and include her as a residuary beneficiary of her estate together with her three children. The same evidence establishes that her testamentary intentions towards her three children were that she always wanted the Mount Waverley property to pass to them alone. By her will and long held testamentary intentions, the deceased recognised that her natural children were the primary objects of her bounty whilst also acknowledging her relationship with the plaintiff as her stepdaughter.
In McKenzie v Topp, Nettle J regarded the proposition that the stepmother owed a responsibility to provide for her stepson where the stepmother had been left the estate of the applicant’s father as ‘novel’ but was prepared to accept it ‘up to a point’, stating:
Be that as it may, however, it appears to me that the proposition should be accepted, up to a point. For just as community attitudes are the touchstone of adequate provision, so too are they the criterion of responsibility to provide. Other things being equal, right thinking members of society are likely to accept that the needs of the widow of a second marriage should rank in priority ahead of the claims of the children of a first marriage; although of course it is always a question of fact. But equally, upon the death of the widow, and as it were in the event of a surplus, most would surely say that the children of the first marriage should rank for their fair share. For once the widow is gone, and therefore no longer in need of provision, her needs no longer warrant that the children rank behind her or thus her chosen successors.[26]
[26]McKenzie v Topp [2004] VSC 90 (30 March 2004) [58] (citations omitted).
The question to be decided is whether the deceased’s moral duty to the plaintiff was satisfied by leaving her a one quarter share of the residue of her estate, and whether that provision is adequate for the plaintiff’s proper maintenance and support. The plaintiff rejects this proposition and says she should receive a one quarter share of the whole estate. Based on the figures at trial, this would amount to the sum of approximately $340 000.
Any further provision for the plaintiff from the estate of the deceased must be balanced against the claims recognised by the deceased in her will and, amongst other matters, the size of the estate and any competing claimants. It must also not provide for an amount greater than is necessary for her proper maintenance and support.
The provision made by the deceased for the plaintiff in her will reflects the financial circumstances between the deceased and the plaintiff’s father during their long marriage. Save for the ownership of the Mount Waverley property, their assets were intermingled. The deceased supported the plaintiff’s father by providing the family home and some funds of her own. He supported the deceased by providing the funds for their expenses and then by leaving his estate to her. The deceased had an amicable relationship with the plaintiff but it was not a mother-child relationship. Her longstanding testamentary intentions acknowledged her relationship with the plaintiff by leaving her a one quarter share of the residue of her estate. The deceased’s relationship with her own children was her primary relationship and very different to her relationship with the plaintiff.
The estate of the deceased is modest in today’s terms, with the quantum enhanced by the increase in property values in recent years. In 2001, the letter of financial advice valued the Mount Waverley property at $230 000. By 2015, it had sold for $1.25 million. Two of the deceased’s children have competing financial needs. The third child is financially better off than his siblings and the three of them are all financially better off compared to the plaintiff.
The plaintiff and her husband have limited assets and limited savings. Neither of them were working at the date of the trial. The plaintiff did work previously as a receptionist where she earned around $20 000 to $30 000 per annum. Her job prospects in her regional town are limited. She is not eligible for the aged pension until she reaches 65, a period of at least two years away at the time of the trial. Her husband has limited means and receives the aged pension.
The plaintiff has no debt and she owns her family home with her husband. The aged pension, although minimal, will make a difference to her income situation. There was no evidence of her weekly expenses. At her age, she may suffer health issues in the future. Whilst her husband is alive and in good health, he would probably look after her.
She is able to cope with her current living expenses as she will have a quarter share of the residue of the estate amounting to $38 756 and, in the future, will receive the aged pension. However, she has no buffer for any significant future contingencies and is unlikely to be able to provide for any future vicissitudes for her proper maintenance and support from her own resources. Having regard to the plaintiff’s financial position, I am satisfied the plaintiff is not capable by reasonable means of providing adequately for her proper maintenance and support.
On the plaintiff’s limited financial evidence, it is difficult to assess the amount that is adequate to provide for her proper maintenance and support. It is not a one quarter share of the estate. That claim is based on equality between the deceased’s three children and herself, not on her financial need. Provision in that amount is not justified on the evidence, particularly the financial evidence. It would also disregard the long standing testamentary intentions of the deceased as to the disposition of her Mount Waverley property to her children.
In my view, the plaintiff’s provision from the estate should be increased by a pecuniary legacy of $100 000. This amount, together with her one quarter share of the residue of the estate, will provide her with $138 756 and is adequate provision for her proper maintenance and support. The amount of provision for the plaintiff is intended to be her net provision, clear of her costs or the estate’s costs of the proceeding.
Accordingly, I will order that further provision be made out of the estate of the deceased in favour of the plaintiff in the amount of $100 000. That provision is in addition to the plaintiff’s entitlement under the will of the deceased to one quarter of the residue and is exclusive of any costs.
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