Scott v Scott
[2021] SASC 96
•10 August 2021
SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
SCOTT & ANOR v SCOTT & ANOR
[2021] SASC 96
Judgment of Judge Dart a Master of the Supreme Court
SUCCESSION - FAMILY PROVISION - CRITERIA FOR DETERMINING APPLICATION - GENERALLY - PRINCIPLES OF EXERCISE OF DISCRETION
Applicants are children of the deceased - suffer from significant disability - no provision in the will of their mother - second applicant passed away after trial - consequences on his claim - first applicant entitled to substantial provision - estate of the second applicant entitled to a debt based provision.
Held:
1. Both applications allowed.
2. First applicant to receive a provision of $300,000.
3. The estate of the second applicant to receive a provision of $15,500.
Inheritance (Family Provision) Act 1972 (SA) s 7, referred to.
In the Estate of Wardle (1979) 22 SASR 139, applied.
Singer v Berghouse (No 2) (1994) 181 CLR 201; Worladge & Anor v Doddridge & Ors (1957) 97 CLR 1; Bowyer v Wood (2007) 99 SASR 190; Coates v National Trustees Executors & Agency Company Limited & Anor (1956) 95 CLR 494; Vigolo v Bostin & Ors (2008) 221 CLR 191; Re Allen (deceased) [1922] NZLR 218; Re Greene’s Estate (1930) 25 Tas LR 15; Bosch v Perpetual Trustee Co Ltd [1938] AC 463; White v Barron & Anor (1979) 144 CLR 431; Andrew v Andrew [2011] NSWSC 115; Pizimolas v Pizimolas [2010] SASCFC 34; In re Shannon (1935) 35 SR (NSW) 516, considered.
SCOTT & ANOR v SCOTT & ANOR
[2021] SASC 96
These reasons deal with two applications for provision out of the estate of Alice Barbara Scott (“the deceased”). It is appropriate to grant the applications. The trial of the action, by way of summary determination, was held on 10 March 2021. It had been listed for hearing in November 2020, but was delayed by the COVID-19 lockdown. Unfortunately, the second applicant passed away on 12 April 2021. The matter came on for further evidence and submissions, on 26 May 2021, dealing with the consequences of the death of the second applicant.
The will and the estate
Each of the applicants is a child of the deceased, as is the respondent, who is joined in two capacities. She is joined as the executor and also as the sole beneficiary of the residuary estate. In the latter capacity she is the second respondent. There is a further son of the deceased who is not an applicant in these proceedings. He supports, at least, the claim of his brother, the second applicant, and is his litigation guardian.
By her last will, made on 9 December 2005, the deceased left all of the residuary estate to the second respondent and appointed her as the sole executor. The gift was subject to her surviving her mother, which she did. There were additional clauses in the will which shared the residuary estate equally between the other three children in the event that the second respondent did not survive her mother.
Probate of the last will was granted in April 2019. As at the date of probate the net value of the estate was $531,413.18. The principal asset in the estate is real property situated at 9 Stanley Street, Woodville. It was the family home. The deceased was not the sole owner of the family home at the date of death. There has been a history of changing ownership.
The deceased and her husband separated many years ago. There was never a formal family law property settlement. What occurred was that the father, in lieu of a family law settlement, transferred his half interest in the property to each of his four children in equal shares. Each child thereby became registered proprietor of a 1/8th share in the property. Over time the two applicants transferred their interest in the property to their mother for consideration. As at the date of death the deceased owned 10/16ths of the property. The second respondent was a proprietor with an interest of 4/16ths and the son not participating in these proceedings, David, has an interest of 2/16ths of the property. As at the date of the grant of probate the value of the deceased’s interest in the property was said to be $512,500.
The legal basis for the claim
The applications are made pursuant to s 7 of the Inheritance (Family Provision) Act 1972 (“the Act”). That section provides as follows:
7—Spouse and persons entitled may obtain order for maintenance etc out of estate of deceased person
(1)Where—
(a) a person has died domiciled in the State or owning real or personal property in the State; and
(b) by reason of his testamentary dispositions or the operation of the laws of intestacy or both, a person entitled to claim the benefit of this Act is left without adequate provision for his proper maintenance, education or advancement in life,
the Court may in its discretion, upon application by or on behalf of a person so entitled, order that such provision as the Court thinks fit be made out of the estate of the deceased person for the maintenance, education or advancement of the person so entitled.
(2)Notice of an application under subsection (1) of this section shall be served by the applicant on the administrator of the estate of the deceased person, and on such other persons as the Court may direct.
(3)The Court may refuse to make an order in favour of any person on the ground that his character or conduct is such as, in the opinion of the Court, to disentitle him to the benefit of this Act, or for any other reason that the Court thinks sufficient.
(4)The Court may, in making any order under this Act, impose such conditions, restrictions and limitations as it thinks fit.
(5)If, in respect of an application under subsection (1) of this section, it appears to the Court that the matter would be more appropriately determined by proceedings outside the State, the Court may (without limiting the powers conferred on it by the preceding provisions of this section) refuse to make an order under this section or adjourn the hearing of the application for such period as the Court thinks fit.
(6)In making the order the Court may, if it thinks fit, order that the provision shall consist of a lump sum or periodic or other payments or a lump sum and periodic or other payments.
There is now more than 100 years of authority in relation to family provision matters. The principles to be applied in determining a claim are well‑established and beyond any reasonable dispute. They may be stated as follows:
1.The statute requires the Court to carry out a two-staged process. The first stage requires a determination of whether the applicant has been left without adequate provision. If that is decided in the affirmative, the Court is then required to determine what would be an appropriate provision.[1]
2.The legislation is remedial in character and is to be construed to give the most complete remedy which the phraseology will permit.[2]
3.The words “adequate” and “proper” are relative. The word “proper” connotes something different from the word “adequate”. It connotes an ethical position as to what allowance should be made. Adequate provision for proper maintenance is not limited to providing what is sufficient for basic subsistence.[3]
4.The time for considering whether the applicant has been left without adequate provision is the date of the death of the testator.[4]
5.Consideration of moral claims and moral duty are useful as a guide to the meaning of the statute and they connect the general value-laden language of the statute to community standards which give it practical meaning.[5]
6.The provision which the Court may properly make is that which a just and wise testator would have thought it his or her moral duty to make had he or she been fully aware of all the relevant circumstances.[6]
[1] Singer v Berghouse (No 2) (1994) 181 CLR 201 at 208.
[2] Worladge & Anor v Doddridge & Ors (1957) 97 CLR 1 at 9.
[3] Bowyer v Wood (2007) 99 SASR 190 at 201.
[4] Coates v National Trustees Executors & Agency Company Limited & Anor (1956) 95 CLR 494.
[5] Vigolo v Bostin & Ors (2008) 221 CLR 191 at 204.
[6] Re Allen (deceased) [1922] NZLR 218 at 220.
At first blush it might be thought that s 7(1) of the Act is setting out an economic test by which it is determined whether an applicant has adequate provision for her proper maintenance, education or advancement in life. Early on there was some support for treating the provision as simply being an economic provision concerned with whether sufficient provision for the reasonable maintenance and support of an applicant had been provided.[7]
[7] Re Greene’s Estate (1930) 25 Tas LR 15.
However, ultimately it is the moral or ethical approach that has been accepted as the correct approach. That approach is made necessary by the use of the word “proper” in s 7(1) of the Act. In Bosch v Perpetual Trustee Co Ltd[8] the Privy Council made clear that an economic approach to the interpretation of the section was not the correct approach. It found that a judgment as to the maintenance which is “proper” for a particular applicant in the circumstances of a case is necessarily a judgment as to what maintenance the applicant ought to have in the circumstances and not what he or she needs.[9]
[8] [1938] AC 463.
[9] Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 478.
The moral approach was approved by the High Court in Worladge & Anor v Doddridge & Ors[10] where Kitto J said:
… What is proper is to be tested by reference to the provision which in all the circumstances of a case satisfies, but does not exceed, the requirements of moral justice in regard to those particular purposes. … [11]
[10] (1957) 97 CLR 1.
[11] Worladge & Anor v Doddridge & Ors (1957) 97 CLR 1 at 18.
The purposes, of course, were provision for the proper maintenance, education and advancement in life.
What the Court has to determine is what the moral duty of the testator was at the time of her death. In determining whether or not an applicant has been left without proper provision it is necessary to have regard, to some extent, to what a proper provision would be. As Mason J noted in White v Barron & Anor[12] it is slightly artificial to say that the first test has to be determined before the second test, because the two tasks which face a judge are similar.
[12] (1979) 144 CLR 431 at 443.
In undertaking the assessment task, it is also necessary to have regard to the conflict between the statutory scheme allowing the Court to award further provision by way of an amendment to the will of the deceased and the entitlement of a person to freely make a testamentary distribution as they see fit. There is an obvious and unavoidable tension. In Andrew v Andrew Hallen AsJ said: [13]
In addition to the above matters, there are some general principles that are relevant to the facts of this case. Whilst most of these principles were given in the context of the former Act, they are equally apt in a claim such as this one.
Bryson J noted in Gorton v Parks (1989) 17 NSWLR 1, at 6, in relation to the former Act, that it is not appropriate, to endeavour to achieve a “fair” disposition of the deceased's estate. It is not part of the court's role to achieve some kind of equity between the various claimants. The court's role is not to reward an applicant, or to distribute the deceased's estate according to notions of fairness or equity. Rather, the court's role is of a specific type and goes no further than the making of “adequate” provision in all the circumstances for the “proper” maintenance, education and advancement in life of an applicant.
In Cooper v Dungan (1976) 50 ALJR 539, Stephen J, at 542, reminded the court to be vigilant in guarding “against a natural tendency to reform the testator's will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant”.
The court's discretion is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation (Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9, per Dixon CJ at 19); McKenzie v Topp [2004] VSC 90 at [63]. Freedom of testamentary disposition remains a prominent feature of the Australian legal system.
[13] [2011] NSWSC 115 at [66]-[69].
The task before the Court is limited to the making of an adequate provision for a claimant who satisfies the jurisdiction requirement. No interfering with the terms of the will beyond that is authorised by the Act.
In Pizimolas v Pizimolas[14] the Full Court found that a person under a disability should receive a greater provision than his siblings who had no disability. That approach is relevant to the circumstances in this matter.
[14] [2010] SASCFC 34.
The position of the first applicant
The first applicant was born in 1957. All of the deceased’s children were born in Port Augusta. Whilst the four children were still at school, the family moved to Adelaide and took up residence at the Woodville property.
Each of the two applicants suffers from Friedrich’s Ataxia, which is a degenerative neurological condition. At trial it appeared that the second applicant was more severely affected than the first. That said, the first applicant is now wheelchair-bound and has a degree of difficulty in speaking. She has not been able to work for a considerable period. She is in receipt of a Disability Support Pension and receives a net payment of $707.40 per fortnight after payment of a rental deduction of $280. She is now approved as a participant in the National Disability Insurance Scheme. The scheme assists with the provision of carers each day to help the applicant with general living and other needs. Presently she has an amount of about $30,000 in a bank account. That was as a result of a gift from her father recently. It is clear that the first applicant has significant needs and no capacity to generate income.
It appears that throughout her lifetime the first applicant had a good relationship with her mother. However, it seems that each of the siblings encountered difficulties in their relationship with their mother in her final few years. The second respondent was managing her mother’s affairs and living at the Woodville property. It is not necessary to decide the point, but the allegations by the applicants are that the second respondent restricted their access to their mother. The second respondent also formulated a proposal to sell the family home and move to Tasmania with her mother, to commence a farming enterprise. At the time that proposal was being considered, their mother was 91 years old.
Ultimately an application was made by some family members to SACAT for a guardianship order. Orders were made by SACAT. That application and the order was the cause of friction between the applicants and the second respondent.
The second applicant
For completeness, I will set out the position of the second applicant, as it appeared from the evidence at trial. The second applicant also suffered from Friedrich’s Ataxia. He was severely affected by the condition. He was wheelchair-bound and his ability to move was extremely limited. He required 24-hour care. His intellectual capacity was not affected, but he was not able to speak very well. He lived in a Housing Trust unit in Adelaide. He had lived in that unit for about 40 years. The second applicant also had a NDIS funding arrangement. The plan allowed for 24-hour care, therapy, swimming and assistive equipment.
Recently he had been trialling cannabidiol to control spasms from which he suffers. This treatment costs about $300 a month and was not covered by any other source. It appears that the treatment was working. He did not have private health insurance and there were a number of medical treatments for which NDIS does not make payment. He received a Centrelink benefit of $933.40 per fortnight, from which $212.80 was deducted by way of the rent reduction scheme. It was paid to the Housing Trust. Like the other applicant, he received a gift from his father recently and had about $26,000 in his bank account.
The attitude of the second respondent to the claims
The deceased, Alice Barbara Scott, died on 18 April 2018. As mentioned above, she was the mother of the two applicants and of the second respondent. On 13 June 2019 the Coroner made a finding that the deceased had died of “general inanition and urinary tract infection on the background of end-stage dementia”.
The second respondent opposes the claim of the applicants. She has done so in an extremely vigorous manner and in a way that is sometimes difficult to follow. Prior to the death of Mrs Scott, there had been SACAT proceedings in relation to her care. The second respondent believes fervently that her mother was murdered. She has stated that in Court and in Court documents on a number of occasions. More accurately, she says that her mother was the victim of an involuntary euthanasia. She alleges that SACAT and the Coroner are involved in a conspiracy to conceal the fact of her mother’s murder.
At various times during the course of the proceedings it appeared that the second respondent was accusing the applicants, notwithstanding their significant disabilities, of participating in the murder of their mother. The second respondent was initially legally represented, but thereafter acted for herself. She attempted to introduce into the proceedings an allegation that the forfeiture rule applied. Those pleadings were struck out.
The second respondent believes that the proceedings are an abuse of process and that the legislative scheme which underpins this action is possibly invalid. She also asserts that, because the two applicants were the beneficiaries of the National Disability Insurance Scheme, that they had no need for further provision from their mother’s estate.
In the result, the second respondent did not attend at trial. The matter proceeded on the papers by way of the tendering of various affidavits and counsel for the applicants making submissions. The second respondent filed written trial submissions, to which I have had regard.
One further matter that the second respondent alleges is that the applicants were involved in a conspiracy to contravene Article 11 of the United Nations Universal Declaration of Human Rights. That allows for the presumption of innocence to apply in criminal proceedings.
In her submissions, in paragraph 10, the second respondent submitted:[15]
The contravention of Article 11 is represented by the South Australian legislation of South Australian Civil and Administrative Tribunal Act and the Guardianship Act implemented by the SACAT and the OPA. The SACAT/OPA represent a totalitarian fascist system,
where authority exercises absolute and centralized control over all aspects of life, the individual is subordinated to the state, and opposing political and cultural expression is suppressed.
The SACAT/OPA assumes totalitarian authority over individuals on the undefined condition of “mental incapacity”, the assumption of irreversible brain damage or vice versa FDN 454 6.5(c); the SACAT/OPA, claim a “protective jurisdiction” over a “protected person” to deny the person’s entitlements in society, even the person’s entitlement of life FDN73.
[15] Filed 9 March 2021, FDN87.
More directly in relation to the claim, the second respondent said at paragraph 25:
Neither the almost two decades of HES’s and RAS’s obsession of hatred and plotting of terrorist acts against our mother and me, of envy of and greed for some imagined wealth; HES’s calumnies of false witness to all who enjoyed derogatory slander, culminating in the SACAT prosecution of our mother, their glee and thrill of the power of totalitarian system to triumph over me and to destroy our mother to secure her property, nor societies acknowledgement of the entitlements of disabled people for maintenance, education and advancement; nor the banal and facile claims of the carers aka “administrators” and the litigation guardian to be “family”; nor their consumerist capacity, for sympathy, empathy and emotional support, sexual contact and companionship. None of these things have altered the biological progression of a degenerative disease, RAS on anti-depressants, FDN37 Exhibit 1; HES is no doubt medicated.
The position taken by the second respondent has not assisted the Court to resolve the matter. A claim under the Act is usually a relatively straightforward matter. The two-stage test is applied. If jurisdiction is found, then the assessment of an appropriate provision is undertaken. The focus of the second respondent on extraneous matters did not progress the consideration of any issues relevant to resolving the claims of the applicants.
Consideration
I propose to deal with the claim of the second applicant first. His passing shortly after the conclusion of the trial changes the nature of the claim that he had made. The Court is required by the Act to make an assessment of whether, by reason of the testamentary disposition, a claimant is left without adequate provision for his proper maintenance, education or advancement in life. Upon the death of a claimant, those matters no longer require consideration.
In this State, and in other states and countries, similar circumstances have arisen from time to time. A case often referred to is In re Shannon[16] where Long Innes CJ (Eq) allowed a small provision in relation to debt incurred between the death of the testator and the death of the applicant.
[16] (1935) 35 SR (NSW) 516.
One local case is In the Estate of Wardle[17] in which Zelling J had to consider a similar circumstance. His Honour surveyed such authorities as there were and concluded:[18]
In my opinion, however, the solution proposed by Long Innes C.J. in Shannon’s case is correct. The applicant therefore was entitled to have the estate which she represents reimbursed by the amount by which that estate was diminished by the deceased having to maintain or advance herself after the date of the death of her husband and before her own death in so far as that maintenance or advancement ought to have been discharged by the deceased husband if he were alive and so far as it was capable of remedy by an order made under the provisions of this Act during the lifetime of the original applicant.
[footnotes omitted]
[17] (1979) 22 SASR 139.
[18] In the Estate of Wardle (1979) 22 SASR 139 at 144.
The parties, who attended at Court on 26 May 2021, to make further submissions accept that the authority of Wardle should be followed. What amount might be awarded, as Zelling J mentioned in Wardle, is impossible to calculate with mathematical precision. His Honour did the best he could and came up with a figure. In my view, that is all I can do. An affidavit was filed by David Scott,[19] the litigation guardian of the second applicant. He undertook a calculation of what might be regarded as the diminution of the estate of the second applicant from the date of the death of his mother until his own death. The calculation came out at $15,500. It is appropriate to award the second applicant that amount.
[19] Filed 25 May 2021, FDN94.
When one looks at the respective disabilities of the first and second applicants, their financial positions and their medical needs, it would have been appropriate to award each the same provision. Had the two full claims remained I would have awarded each applicant $240,000.
In relation to the first applicant, it is clear that the jurisdictional question is satisfied. On any view, she is a person with significant disabilities, who was left nothing in her mother’s will in circumstances where she has significant need. She has no capacity to generate income and is reliant on support from the social security system. The question becomes, simply, what would be an appropriate provision in the circumstances that now exist. She has become, in effect, the sole applicant. The second respondent has put no evidence before the Court in respect of her financial situation. There is no requirement to have regard to her position.[20] A significant provision is called for. The first applicant should receive a provision of $300,000.
[20] Bowyer v Wood (2007) 99 SASR 190.
I will hear the parties as to the form of the orders and any other incidental matters.
3
13
1