BERNHARD SCHMIDT (a pseudonym) (who brings this proceeding by his Administrator, State Trustees Limited)	First Plaintiff
JENS SCHMIDT (a pseudonym) (who brings this proceeding by his Administrator, State Trustees Limited)	Second Plaintiff
v
MICHAEL WALTER (who is sued as one of the Executors of the Estate of Klaus Richard Schmidt, deceased)	First Defendant
KLAUS HORST SCHMIDT (a pseudonym) (who is sued as one of the Executors of the Estate of Klaus Richard Schmidt, deceased)	Second Defendant
MARCUS SCHMIDT (a pseudonym)	Third Defendant

AND BETWEEN:

S CI 2016 04980

ANNA WAGNER (a pseudonym)	Plaintiff
v
MICHAEL WALTER (who is sued as one of the Executors of the Estate of Klaus Richard Schmidt, deceased)	First Defendant
KLAUS HORST SCHMIDT (a pseudonym) (who is sued as one of the Executors of the Estate of Klaus Richard Schmidt, deceased)	Second Defendant
MARCUS SCHMIDT (a pseudonym)	Third Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	20, 21, 22 and 25 February 2019, 6 and 13 March 2019
DATE OF JUDGMENT:	21 June 2019 (revised version published 23 September 2019)*
CASE MAY BE CITED AS:	Schmidt (a pseudonym) & Anor v Walter & ors; Wagner (a pseudonym) v Walter & ors
MEDIUM NEUTRAL CITATION:	[2019] VSC 385

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TESTATORS FAMILY MAINTENANCE – Application for a family provision order out of the deceased’s estate under Part IV of the Administration and Probate Act 1958 (Vic) (‘Act’) by State Trustees on behalf of two sons with intellectual disabilities and, separately, by the deceased’s de facto partner – Whether the deceased had met his obligation to make adequate provision for the plaintiffs – Personal estate substantially smaller than shown in the inventory of assets by reason of most assets being speculative shares – Personal estate insufficient to satisfy pecuniary legacies and provide further support for disabled sons – Whether family household is to be sold with part of the proceeds of sale to be used to provide the de facto partner with secure accommodation for life and the remainder be utilised to meet the claims of the deceased’s children – Relevance of the factors under s 91(4) of the Act – Testator’s primary moral obligation to his surviving spouse – Re Marsella; Marsella v Wareham [2018] VSC 312, referred to – Consideration of disabled sons’ entitlement to National Disability Insurance Scheme (NDIS) funding – King v White [992] 2 VR 417, Shah v Perpetual Trustee Company (1981) 7 Fam LR 97, Coller v Coller [1998] VSC 80, referred to – Unclear how much of the diminution of the value of the estate since the deceased’s death can be sheeted home to the executor beneficiary – Principle of freedom of testation…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Schmidt v Walter

Details

AGLC: Schmidt (a pseudonym) v Walter; Wagner (a pseudonym) v Walter [2019] VSC 385
Case: [2019] VSC 385
Decision Date: 21 June 2019 (revised version published 23 September 2019)*

CaseChat Overview and Summary

Schmidt v Walter is a case where two sons with intellectual disabilities and the deceased’s de facto partner applied for family provision orders out of the deceased’s estate under Part IV of the Administration and Probate Act 1958 (Vic). The sons were represented by State Trustees and the de facto partner applied separately. The central dispute was whether the deceased had fulfilled his obligation to make adequate provision for the plaintiffs and, if not, how the family household and estate should be distributed to meet their needs.

The court had to determine several legal issues, including the extent to which the deceased’s obligation to make adequate provision had been met, given the personal estate was substantially smaller than indicated due to speculative shares. Another issue was the allocation of the family household, with part of the proceeds from its sale potentially being used for the de facto partner’s secure accommodation and the remainder for the disabled sons. The court also considered the factors under section 91(4) of the Act, the testator’s moral obligation to his surviving spouse, and the potential entitlement of the disabled sons to National Disability Insurance Scheme (NDIS) funding.

The court, after considering the relevant statutory provisions and case law, concluded that the deceased had not met his obligation to make adequate provision for the plaintiffs. The personal estate was insufficient to satisfy pecuniary legacies and provide further support for the disabled sons. The court found that the family household should be retained, with a proposed framework for the distribution of proceeds in the event of a sale. The testator’s intention to retain the property for the plaintiffs and the executor beneficiary with his children to live in was considered, applying principles from Grey v Harrison. The court ordered that the family household should remain with the plaintiffs, subject to the proposed framework for its distribution if sold.

Orders