Strang v Steiner

[2019] NSWCA 143

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Strang v Steiner [2019] NSWCA 143

Hearing dates:

20 and 21 March 2019

Date of orders:

19 June 2019

Decision date:

19 June 2019

Before:

Macfarlan JA at [1];
White JA at [118];
McCallum JA at [190]

Decision:

(1) In respect of John Steiner’s claim for provision under the Succession Act, allow the appeal and vary the orders made below on 26 September 2018 in Case Number 2012/185566 by deleting Orders 3(n) and (p), 6 and 7.

 

(2) In respect of Robyn Webster’s claim under the Succession Act:

 

(a) allow the appeal in part;

 

(b) vary Order 1 made below on 26 September 2018 in Case Number 2012/139833 by adding after the words “(the Award)” the words “and the amount in order 2(a)”; and

 

(c) otherwise dismiss the appeal.

 

(3) Allow the cross-appeal and vary Order 2(c) by replacing the expression “clause 3(b)” with the expression “clause 3(c)” and adding the words “and the legacy payable to Elizabeth Fuggle under clause 3(b) of the Deceased’s will”.

 

(4) Extend the time for the filing of the cross-appeal to the date upon which it was filed.

 

(5) Order that the costs of all parties to the appeals (as distinct from the cross-appeal) be paid out of the estate on an indemnity basis.

 

(6) Order that the cross-respondents pay the cross-appellants’ costs of their amended notice of motion filed in the court below on 28 May 2018 and of the cross-appeal.

(7) Order that the cross-respondents have certificates under the Suitors’ Fund Act 1951 (NSW), if qualified.

Catchwords:

SUCCESSION – family provision orders under Succession Act 2006 (NSW) – whether exercises of discretion miscarried and the amounts of additional provisions ordered should be reduced – whether exercise of discretion miscarried with respect to who should bear the burden of additional provisions

APPEALS – nature of appeal – standard of review applicable to family provision orders under s 59(1)(c) of the Succession Act 2006 (NSW)

Legislation Cited:

Family Provision Act 1982 (NSW)
Succession Act 2006 (NSW), ss 57, 59, 60, 65(1)(c), 66(2), 72(2)
Suitors’ Fund Act 1951 (NSW)
Supreme Court Act 1970 (NSW), s 75A

Cases Cited:

Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308
Chan v Chan [2016] NSWCA 222
Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392
Costa v Public Trustee of NSW [2008] NSWCA 223
DJ Singh v DH Singh [2018] NSWCA 30
Durham v Durham (2011) 80 NSWLR 335; [2011] NSWCA 335
Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124; [2008] HCA 13
Figliuzzi v Yonan [2005] NSWCA 290
Flint v Lovell [1935] 1 KB 354
Golosky v Golosky [1993] NSWCA 111
Goodman v Windeyer (1980) 144 CLR 490; [1980] HCA 31
Hornby v The Nominal Defendant [2007] NSWCA 222
House v The King (1936) 55 CLR 499; [1936] HCA 40
Hughes v National Trustees and Agency Co of Australasia Ltd (1979) 143 CLR 134; [1979] HCA 2
Hunter v Hunter (1987) 8 NSWLR 573
Jodell v Woods [2017] NSWSC 143
Lloyd-Williams v Mayfield (2005) 63 NSWLR 1; [2005] NSWCA 189
Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 92 ALJR 713
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; [1962] HCA 19
R (M) v Slough Borough Council [2008] UKHL 52; [2008] 1 WLR 1808
R v Ford [2009] NSWCCA 306
Sgro v Thompson [2017] NSWCA 326
Singer v Berghouse (Unreported, NSW Court of Appeal, 24 July 1992)
Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40
Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522
State of New South Wales v Naaman (No 2) [2018] NSWCA 328
Stern v Sekers [2010] NSWSC 59
Tchadovitch v Tchadovitch (2010) 79 NSWLR 491; [2010] NSWCA 316
The Queen v Nikodjevic [2004] VSCA 222
Verzar v Verzar [2012] NSWSC 1380
Walker v Walker (Supreme Court (NSW), Young J, 17 May 1996, unrep)
Wardy v Salier [2014] NSWSC 473
Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9
Wilson v Peisley (1975) 7 ALR 571

Category:

Principal judgment

Parties:

Kenneth Ross Strang (First Appellant)
Jason Tang (Second Appellant)
John Steiner (First Respondent)
Robyn Gai Webster (Second Respondent)
Wayne Porter Webster (Third Respondent)
Lesley Margaret Webster (Fourth Respondent)
Kelly Lee Midgley (Fifth Respondent)
Steiner Wilson & Webster Pty Ltd (Sixth Respondent)
Wayne Bruce Webster (Seventh Respondent and Cross Appellant)
Lance Taylor Webster (Eighth Respondent and Cross-Appellant)
Rhodora Steiner Rose (Ninth Respondent and Cross-Appellant)
Madison Webster bht Elizabeth Vincent (Tenth Respondent and Cross-Appellant)
Scott Raymond Webster (Eleventh Respondent and Cross-Appellant)

Representation:

Counsel:
L Ellison SC / B Narula (Appellants)
M Condon SC (First Respondent)
G A Sirtes SC / N C T Bilinsky (Second Respondent)
M K Meek SC (Third, Fourth, Fifth and Sixth Respondents)
R D Wilson SC (Seventh, Eighth, Ninth, Tenth and Eleventh Respondents)

  Solicitors:
Glass Goodwin (Appellants)
Keypoint Law (First Respondent)
GHS Legal (Second Respondent)
Sparke Helmore Lawyers (Third, Fourth, Fifth and Sixth Respondents)
Andrew Ford Lawyers (Seventh, Eighth, Ninth, Tenth and Eleventh Respondents)

File Number(s):

CA 2018/325653

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity Division

Citation:

[2018] NSWSC 495

Date of Decision:

23 April 2018

Before:

Kunc J

File Number(s):

SC 2012/185566; 2012/129833

HEADNOTE

[This headnote is not to be read as part of the judgment]

On 12 October 2011 Ms Dorothy Steiner (“the deceased”) died, aged 88. Probate of her last will, dated 7 June 2011, was granted to the executors of her estate, Mr Ross and Mr Tang (“the appellants”). The deceased’s estate was valued at over $13 million at the time of her death. The deceased left her estate to her three children (John, Lesley and Robyn), their children and her great grandchildren.

By summonses filed in the Equity Division, John and Robyn sought orders under s 59 of the Succession Act 2006 (NSW) for provision out of the deceased’s estate for their maintenance, education and advancement in life in addition to the testamentary gifts that were left to them.

In John’s proceedings, the appellants sought, by cross-claim, to recover $881,000 from John that the deceased had lent to him under a loan agreement. The loan agreement stated that the loan could be repaid by offsetting its amount against John’s entitlement as residuary beneficiary of the deceased’s estate. There was however no residuary estate.

The primary judge found that additional provision should be ordered for both John and Robyn. By a supplementary judgment, the primary judge concluded that the burden of the additional provision to John should be borne, first, by the legacies payable to John’s family and secondly, to the extent of any deficiency, by the various specific gifts made by the will to Lesley and her family. The primary judge concluded that the burden of the additional provision in favour of Robyn should be borne, first, by the legacies in favour of Robyn’s family and secondly, to the extent of any deficiency, by the various specific gifts.

The appellants appeal against the orders for additional provisions made by the primary judge. The appellants’ principal ground of appeal was that the primary judge paid insufficient regard to the deceased’s testamentary intentions and that the additional provisions ordered by the primary judge were manifestly excessive.

By cross-appeal, Robyn’s children (with the exception of one child) and grandchild sought a variation of the primary judge’s orders. They submitted that Lesley’s family should have been ordered to bear the burden of the additional provision in favour of Robyn.

The issues on the appeal and cross-appeal were:

1. Whether the primary judge’s exercise of discretion in relation to Robyn miscarried and, if so, whether the amount of the additional provision made in relation to Robyn should be reduced.

2. Whether the primary judge’s exercise of discretion in relation to John miscarried and, if so, whether the amount of the additional provision made for John should be reduced.

3. Whether the primary judge’s exercise of discretion miscarried with respect to who should bear the burden of Robyn’s additional provision.

The Court allowed the appeal in part and allowed the cross-appeal.

In relation to question (1):

(Per Macfarlan JA, White JA and McCallum JA)

1. The House v The King standard of review applies to a finding under s 59(1)(c) of the Succession Act 2006 (NSW): [75]-[79]; [131]-[132]; [190].

Golosky v Golosky [1993] NSWCA 111; Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124; [2008] HCA 13; R v Ford [2009] NSWCCA 306; Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124; [2008] HCA 13; Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 92 ALJR 713, considered.

Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40; House v The King (1936) 55 CLR 499; [1936] HCA 40, applied.

(Per White JA, McCallum JA agreeing)

2. There is no reason to interfere with the primary judge’s assessment of the provision ordered in Robyn’s favour: [146]-[153]; [191].

(Per Macfarlan JA, dissenting)

3. The primary judge’s reasons did not sufficiently identify the basis for awarding $485,000 of the additional provision he made for Robyn. Further, that part of the award was manifestly excessive and should be reduced to $300,000: [88]-[90].

In relation to question (2)

(Per Macfarlan JA, McCallum JA agreeing)

1. Neither the evidence nor the judgment below identifies a proper basis for the provisions made by his Honour’s orders in circumstances where $800,000 of John’s legacy remains due to him: [101]-[102]; [192]-[193].

(Per White JA)

2. The primary judge erred in failing to give adequate reasons for the provision ordered in John’s favour but the award was not manifestly excessive.

(Per Macfarlan JA, McCallum JA agreeing)

3. The award in favour of John should be reduced by $700,000.

(Per White JA dissenting)

4. The award in favour of John should be reduced by $200,000.

In relation to question (3)

(Per Macfarlan JA, White and McCallum JJA agreeing)

1. The primary judge’s exercise of discretion miscarried to the extent that Robyn’s family members were ordered to bear the burden of the additional provision made in favour of Robyn. Instead, Lesley’s family members should primarily bear the burden of that additional provision: [112]-[113]; [181]; [193].

Judgment

1. MACFARLAN JA: On 12 October 2011 Ms Dorothy Steiner (“the deceased”) died, aged 88. Probate of her last will, dated 7 June 2011, was granted to the appellants. The deceased left a large estate, valued at over $13 million at the time of her death. She left it by detailed testamentary provisions to her three children (John Steiner, Lesley Webster and Robyn Webster), their children and the deceased’s great grandchildren. For convenience, and without intending any disrespect, I shall refer to family members by their first names.

2. By summonses filed in the Equity Division, John and Robyn sought orders under s 59 of the Succession Act 2006 (NSW) for provision out of the deceased’s estate for their maintenance, education and advancement in life, additional to the testamentary gifts to them. In John’s proceedings, the appellants sought, by cross-claim, recovery from him of an amount of $881,000 lent to him by the deceased. This loan was the subject of a document entitled “Acknowledgment of Loan” dated 18 December 2007 which stated that the loan could be repaid by offsetting its amount against John’s entitlement as residuary beneficiary of the deceased’s estate. As it has transpired, there is no residuary estate.

3. After a substantial hearing before Kunc J, his Honour found, by judgment of 23 April 2018, that additional provision should be ordered for both John and Robyn, including, in the case of John, forgiveness of the debt of $881,000 which his Honour found to be otherwise repayable by John ([2018] NSWSC 495).

4. The executors appeal against the orders for additional provision, principally on the grounds that the primary judgment paid insufficient regard to the deceased’s testamentary intentions and that the provision ordered is manifestly excessive.

5. With one exception, the appellants do not challenge any of the primary facts found by his Honour in his 168 page judgment of 23 April 2018 or in his 37 page supplementary judgment of 13 September 2018 ([2018] NSWSC 1411). The exception is that they challenge a finding that Robyn did not have the same opportunity as Lesley to share in the considerable value that the family’s businesses came to have over time. The deceased and members of her family were involved over a long period of time in a number of fashion businesses, principally Abbey Bridal and Maggie Sottero Designs LLC, which operated in part in Utah in the United States of America.

6. By way of cross-appeal, Robyn’s children and grandchild (other than her child Elizabeth) seek a variation of his Honour’s order that their legacies (and that of Elizabeth) bear the initial burden of the order in favour of Robyn for additional provision. They contend that Lesley’s family should have been ordered to bear that burden.

7. For the reasons that appear below, I consider that both the appeals and the cross-appeal should be allowed, with the result that the additional provisions in favour of Robyn and John should be reduced and that Lesley’s family should bear the initial burden of Robyn’s additional provision.

The family members

8. John was born in 1945. He has two children, Anthony (born in 1967) and Donna (born in 1968). Anthony does not have any children but Donna has four.

9. Lesley was born in 1949 and is married to Wayne Webster Jnr. Lesley has one child, Kelly Midgley, from a previous marriage. Kelly has five children. Lesley is also step-mother to Katrina Peterson.

10. Robyn was born in 1951. She has five children. One of them, Wayne Bruce Webster, has a daughter, Madison Webster.

The deceased’s estate

11. The deceased’s estate at the date of her death in October 2011 was valued for probate purposes at $13,287,727.28, together with the value of about $850,000 of the estate’s share of assets held in common with others.

12. The principal assets and their assigned values were:

• bank accounts of approximately $8.4 million;

• shares of approximately $3.8 million;

• loan to John Steiner $881,000;

• East Killara property (one third share) $816,666.66

13. The only liability of the deceased known to the executors was a debt to Lesley’s husband, Wayne Jnr, of about $280,000, in respect of payments made by him at the deceased’s request during her lifetime.

The deceased’s last will

14. The deceased made the following specific gifts to or for the benefit of Lesley, her husband or their daughter. Their values as estimated by the executors at the date of their affidavit of 15 May 2017 (that is, five and a half years after the deceased’s death) were:

1. one third interest in East Killara property: $1.37 million;

2. shares in businesses: $6.48 million;

3. interest in bank accounts: $1.45 million.

4. Total: $9.3 million

15. The will also provided for legacies to be paid as follows:

1. $2 million to each of Robyn and John;

2. $1.55 million in total to Robyn’s five children and her grandchild;

3. $1.55 million in total to Lesley’s daughter and step-daughter, and her daughter’s five children;

4. $700,000 in total to John’s two children and his four grandchildren.

16. The will provided for the residue of the deceased’s estate to be divided between John and Robyn in equal shares as tenants in common.

17. The executors’ affidavit of 15 May 2017 valued the estate assets which were not the subject of specific gifts at $5.85 million, plus the debt of $881,000 claimed by the estate from John. By that date, distributions totalling about $0.8 million and $1.34 million had been made by the executors to John and Robyn respectively. The executors estimated the estate’s then liabilities as $0.34 million for payment of costs and expenses of the administration and court proceedings, and payment of the debt due to Wayne Jr.

John’s circumstances

18. Over his working life John engaged in a number of different occupations. He suffered severe losses in the share-market during the period 2000 to 2003, in 2006 and in 2008 to 2009. He is no longer able to work. He maintained a close relationship with his mother during her lifetime, with regular contact occurring between them. She gave him considerable support by meeting many of his liabilities and living expenses.

19. John suffers from poor health, as does his wife, Lynne, who has not worked for the last 40 years. When John swore his affidavit of 29 November 2016 his son Anthony was living with him and Lynne. Anthony also has severe health problems.

20. In his first judgment, the primary judge summarised John’s financial position as follows (at [346] to [350]):

“Assets and liabilities

346.   The most recent evidence estimates John’s assets as totalling $556,067.83 in value, and his liabilities as totalling $2,375,640.95 in value. In summary, John at this date owned the Strand Property (albeit heavily encumbered); the only vehicle available to him was Lynne’s 1995 Ford Falcon station wagon; he had no savings or superannuation, and no other assets of value.

Income and expenses

347.   John says that his and Lynne’s Centrelink aged pensions continue to be his family’s only source of income. John says that he receives a pension of $877.60 per fortnight, of which $75.00 is withheld to meet part of his electricity costs, and that Lynne receives about $485.30 per fortnight to bring their pensions up to the combined couple rate. Their combined pension is about $1,362.40 per fortnight (or $2,724.80 per month).

348.   John’s evidence is that that income is insufficient to meet his family’s combined expenses. John’s evidence as to his expenditure varies wildly across his affidavits. In his affidavit sworn 7 June 2012, John estimates his monthly expenditure as $9,160.

349.   In his affidavit sworn 29 November 2016, John refers to monthly expenditure of $16,565.26 per month (“except for the credit card interest cost”), and then says that with his “revised credit card payments” his monthly expenses are reduced to $11,615.26. However, he says that those figures do not include the cost of food, living expenses, phones, internet, special diets, clothing, or vitamins for himself and his wife.

350.   In his affidavit sworn 27 April 2017, John provides alternative estimates of monthly living expenses: $3,081 per month – current actual expenses, $21,540 per month, $18,085 per month, and $15,470. He provides various detailed estimates of additional expenses including holidays, medical surgeries, car maintenance and/or upgrades, and ultimately wheelchairs and nursing home accommodation in this affidavit.”

Robyn’s circumstances

21. In about November 1974, Robyn and her later-to-be second husband, Larry Webster, commenced operating a business called “The Sugar House”, marketing wedding and evening fashion. Subsequently, the deceased and Lesley also began to work at The Sugar House, which expanded its operations considerably over time. In the mid-1980s, another bridal fashion business, Abbey Bridal, was commenced with the deceased, Robyn and Lesley (amongst others) holding shares. The business was very successful and a related American company, Maggie Sottero, was established. An indicator of the business’ success is to be seen in the growth in its total annual sales from about $7 million in 2000 to over $68 million by 2011. Robyn and Larry were divorced in 1995.

22. In 2004 Robyn commenced legal action against Maggie Sottero (that is, effectively against the deceased, Lesley and Wayne Jr), which led to her being bought out of the family businesses for $US 5.5 million.

23. The deceased and Robyn had a close and loving relationship with regular telephone and other contact between them. The primary judge found this to be corroborated by the many gifts of substantial sums of money that the deceased made to Robyn. The primary judge concluded (at [460]):

“These gifts, while not nearly as extensive as those made to John and to Wayne and Lesley … support the likelihood that Dorothy remained close with Robyn and cared for her wellbeing and I so find. Insofar as Robyn, even by her own admission, sometimes behaved badly to her mother, I find it did not detract from Dorothy’s affection for Robyn and does not constitute conduct that was so serious as would adversely impact on Robyn’s claim for further provision.”

24. In his first judgment, the primary judge reached the following conclusions concerning Robyn’s personal and financial circumstances (at [467] to [480]):

“Residence / accommodation

467.   After living in a succession of rental properties between 2012 and 2016, Robyn commenced permanently occupying Lot 276 Noosa in about May 2016. She confirmed in oral evidence that this remains her current address. It appears that she lives there alone.

468.   Lot 276 Noosa still has no electricity and no access to town water or sewerage. Robyn says that she currently uses a generator for power, has water “tanked in”, and uses bottled gas and a septic system. She deposes to needing further funds for water and electricity works.

Health

469.   Robyn deposes that in 2004 she was “very run down from stress, overwork, and sheer exhaustion”. She was diagnosed with a blood disorder, MGUS, underwent a bone marrow biopsy and was found to have 15% myeloma cancer cells (myeloma being a blood cancer).

470.   She also says that around this time, she developed a drinking problem “because of all the stress caused by the conflict with Lesley and Wayne with my mother being in the middle of it”. In cross-examination, she described this drinking problem as “severe” at one stage.

471.   Robyn says that since 2004 she has been subject to occasional severe panic attacks and has suffered from three minor mental breakdowns. She has difficulty sleeping.

472.   Robyn’s evidence is that in August 2011, she developed shingles on the left side of her face which resulted in complications including a damaged left optic nerve and left her with a slight, but permanent, nerve neuralgia. She also says that she suffered a severe epileptic seizure during 2011.

473.   As of 2012, Robyn deposes that she feels weak and extremely tired every day; has lower back, shoulder, and rib ache and acute right shoulder pain; is very dehydrated; and suffers from mental confusion. She says that she is often nauseated, has an ulcerated stomach, and requires regular blood and iron transfusions. In later affidavit evidence Robyn described these symptoms as continuing, and adds that she had also developed kidney impairment. Robyn says that she has degenerative disc disease, which causes chronic pain and lethargy. I accept Robyn’s evidence about her health.

Employment

474.   As at the date of hearing, Robyn was continuing to work for her son Wayne Bruce, in his business Luv Bridal, as a purchasing and style consultant. She has a home office at Lot 276 Noosa, and works from there several days a week, as well as travelling for work each week and staying (for those days) at Wayne Bruce’s house in Runaway Bay, where she has a bedroom.

475.   However, in her evidence under cross-examination, Robyn said that she had not made the three-hour drive from Lot 276 Noosa to Runaway Bay (in order to work at the Luv Bridal Harbour Town store) since about November 2016. She said that she is now unable to make that drive, and works from home, doing “marketing, looking over designs, shop layouts, looking over figures, styles, Excel…”. However, she also noted that a new location had opened up in Maroochydore “in the last three weeks” and that this was “much closer” to Lot 276 Noosa, where she is living.

476.   Robyn’s evidence is that she has not worked on the retail floor or “put in a full week’s work” since about November 2016 due to her ill health, but is still involved in opening new retail locations, hiring staff, shop design, and general layout. She says that her wage is guaranteed regardless of the hours she works.

Assets and liabilities

477.   The most recent evidence estimates Robyn’s assets as totalling $1,426,360.09 in value, and her liabilities as totalling $3,371,476.62 in value. In summary, Robyn at this date owned Lot 276 Noosa (valued at about $1.4 million and subject to a mortgage to Westpac in the amount of $880,963.86), and has negligible savings and superannuation. Her main liabilities are the Westpac mortgage on Lot 276 Noosa, credit card debt (in the amount of $67,512.76), and what could be described as the contingent debt to Larry in the amount of $2 million.

478.   It should be noted that Robyn’s asset/liability position is considerably improved if the loan from Larry (which I accept, on the evidence, will only fall due for repayment if Lot 276 Noosa is sold) is removed from the calculations. In that case, Robyn’s assets remain at $1,426,360.09 in value and her liabilities are reduced to $1,371,476.62, leaving her – at least notionally – in a net positive position.

Income and expenses

479.   …

480.   Robyn deposes that her weekly wage after tax for her work at Luv Bridal is $791.54. She says that her regular weekly expenses amount to $2,504, the most significant expenses being food, mortgage payments to Westpac, credit card repayments, and interest payments on a debt to Wayne Bruce.”

Other beneficiaries’ circumstances

25. There was no evidence of Lesley’s financial or other circumstances, or of those of her husband, children and grandchildren.

26. In his first judgment, the primary judge noted that there was evidence that the combined income of John’s daughter Donna and her husband “sustained their family, without [them] living an ‘affluent lifestyle’” (at [482]). The evidence also showed that they had a surplus of assets over liabilities. There was evidence also of John’s son Anthony’s poor health and limited earning capacity, and of his dependence on John.

27. In his first judgment, the primary judge also referred to evidence concerning the financial circumstances of four of Robyn’s five children. There was evidence of financial need in respect of two of them and of modest circumstances in respect of the others.

The principal judgment at first instance

28. In determining the claims for orders under the Succession Act, the primary judge expressed the following conclusions which it is necessary to set out in full:

“580.   In conducting the statutory inquiry, the Court gives considerable weight to respecting Dorothy’s freedom of testation and what appears to be a carefully thought-out testamentary scheme. That scheme is first that Lesley (and to a lesser extent Kelly) are to receive the bridal business assets (or the fruits of those businesses). The Court accepts that reflects the reality presented by the totality of the evidence that Lesley and Wayne were instrumental in developing and maintaining those wealth-creating assets. The Court finds that Robyn was also instrumental in creating and developing the bridal businesses, particularly in the earlier period (from 1974 to 1997), but that Robyn has had a less significant role in the continuing growth of Maggie Sottero and was in any event bought out of her shares. Secondly, the Will provides for John and Robyn to receive $2 million each and equal shares of the residue. Both subjectively, and objectively in the circumstances of this case, that is generous provision. However, as the Court finds below, it is nevertheless not adequate in the face of the significant needs of each of John and Robyn.

581.   A further significant feature of Dorothy’s testamentary scheme is how she has treated her grandchildren and great-grandchildren. In this regard, Dorothy appears to have made a deliberate allocation of her testamentary bounty between the three family groups of her children. Robyn’s five children and one of her grandchildren (six people) share in a pool of $1,550,000. Lesley’s two children and five grandchildren (seven people) also share in a pool of $1,550,000. However, John’s two children and four grandchildren (six people) share in a pool of only $700,000. In my view it is significant, and beyond coincidence, that the apparent disparity disappears if the repayment of the $881,000 Loan out of a share of the residue is factored in. This brings the amount allocated to John’s family group to $1,581,000, and is a further reason supporting the Court’s conclusion that Dorothy expected the Loan to be repaid out of John’s share of the residue.

582. Turning then to the statutory requirements, both John and Robyn are evidently eligible persons (see s 57(1)(c) of the Act) and there is no question that their applications were made within time (s 58(2)).

583.   As to whether adequate provision has been made for John’s proper maintenance and advancement in life, it is clear that John’s financial and personal circumstances are very poor. The same conclusion applies to those with whom John is cohabiting, and for whom he is responsible, Lynne and Anthony. The evidence shows that Dorothy recognised this during her life. John was being partly maintained by Dorothy before her death, and was, in financial terms, extremely dependent on her – as she recognised by the “dependency payments”. John is aptly described as an adult dependent child who has “fallen on hard times”, for whom the community would expect – especially in the case of a large estate – provision to be made to secure accommodation and offer a buffer against contingencies … Nothing in John’s conduct exposed in these proceedings is, in my view, sufficient to displace that conclusion. As events have transpired, the provision for John in the Will, although significant, is not adequate for his proper maintenance and advancement in life.

584.   While not in such dire straits as John, Robyn, at the age of 66, finds herself heavily indebted, with negligible resources and very poor health. Her apparently large excess of liabilities over assets is significantly reduced when it is accepted that her $2 million liability to her former husband Larry will not be called upon while she resides at Lot 276 Noosa. However, that property is subject to a significant mortgage, which she has limited capacity to repay. Dorothy recognised in life that Robyn needed her (Dorothy’s) financial help and Robyn was in a limited relationship of dependence on her mother (although far less so than John). Notwithstanding some evidence of Robyn’s hostile or discourteous conduct towards other family members, the Court is satisfied that community standards would suggest that the current provision for Robyn in the Will is not adequate provision for her proper maintenance and advancement in life. This is particularly the case given the size of the estate and the fact that for whatever reason, Robyn did not have the same opportunity as Lesley to participate in the wealth of the family businesses to which she undoubtedly contributed.

585. The conclusions I have reached above mean that the essential precondition set out in s 59(1)(c) of the Act is satisfied in both John and Robyn’s cases. Particularly in circumstances where the provision already made for John and Robyn in the Will is significant, it is worth emphasising again that what is “adequate” and “proper” is not decided in a vacuum, but depends (among other things) on the interrelation between the claimants’ needs, their capacity and resources for meeting those needs, and the available resources of the estate. Here, John and Robyn’s needs are dire, their capacity is extremely limited, and there are resources available to provide them with a degree of security and comfort which they currently lack and which the Court considers is necessary for their maintenance and advancement in life.

586.   The Court is satisfied that Dorothy’s testamentary intentions were to treat John and Robyn equally so as to ensure that each be properly provided for, in terms of secure accommodation and possession of resources to guard against contingencies. The current provisions in the Will would not, on the facts as they now stand, achieve those ends (being unencumbered accommodation and some further resources).

587.   Because Robyn’s case is slightly more straightforward, I will immediately deal with the question of the amount of additional provision for her. The Court accepts the submission put for Robyn that $1.2 million (in addition to receipt of the full amount of her $2 million legacy) would be adequate provision. It will enable her to pay off the mortgage over Lot 276 Noosa and her other debts. She has some independent earning capacity and her situation will be considerably improved if she is relieved from paying interest on the Lot 276 Noosa mortgage and on her credit card debt. Even if only as a matter coincidence, the Court also accepts that given the evidence shows Dorothy did try to treat her children equally, that figure is appropriately reflective of benefits given to John, and also to Lesley and Wayne.

588.   The question remains as to how the balance of Robyn’s legacy and the additional provision are to be paid. At this point of the analysis two considerations have informed the Court’s proposed approach. First, proper weight should be given to Dorothy’s intentions as evidenced by the Will. This means that her broad scheme of distribution should be disturbed as little as possible (including by noting what appears to be her allocation of specific sums to each of the family groups for grandchildren and great-grandchildren). Secondly, and noting the authorities set out above (from [521]), in my view community standards would expect the resources of even a large estate to be directed to the children of Dorothy who needed help, rather than to more remote descendants. In the circumstances of this case, I am satisfied that the needs of John and Robyn must displace Dorothy’s laudable intention to benefit her grandchildren and great-grandchildren.

589. The result of those two considerations is that the resolution which is least disruptive to the overall scheme of the Will, but also recognises Dorothy’s specific allocations between family groups, is for the balance of Robyn’s legacy and the additional provision first to fall rateably on the specific gifts to Robyn’s children and grandchildren. To the extent that is inadequate, there should be a charge over half of the one-third interest in the Killara property. This was to go to Robyn and John under earlier wills. If that is still insufficient, then the balance should be paid from the Sottero account (in priority to John’s entitlement to that account as set out at [593] below). Any remaining balance should be charged against the gifts under the Will to Lesley (including the gifts to the LM Webster Irrevocable Trust).

590.   In relation to John, the same considerations which informed the Court’s conclusion that inadequate provision had been made for him lead to the result that additional provision should be made for John to ensure he is debt-free, has a three bedroom apartment to live in (given, as noted in the evidence and submissions, that John and Lynne sleep in separate bedrooms and that Anthony also needs a bedroom), and has an amount for contingencies. Given John’s age and health and doing the best it can, the Court assesses $200,000 as an appropriate figure for contingencies. I do not accept the defendants’ submission that, as a matter of discretion, an order for provision should not be made where it is the creditors who will benefit. Providing funds to reduce or eliminate debt can be a very effective way to maintain and advance a person who might otherwise be close to or in bankruptcy.

591.   Before coming to his other debts, the starting point must be the $881,000 amount for which the Court has found John is liable to the estate. However, the Court is also satisfied that Dorothy never intended John’s liability to “come out of his own pocket”, but rather, intended that it would be met out of John’s share of the residue. Taking that into account, and given the absence of any residue, the Court’s orders will include an order to the effect that John’s obligation to repay the debt is forgiven.

592.   However, determining an actual figure for additional provision for John after the $881,000 Loan is removed from consideration is not straightforward. The evidence at trial was that his liabilities (excluding the Loan) are $2,375,640.95. However, at the conclusion of the trial there was uncertainty about what action BoQ would take in relation to the Strand Property. If John is still resident at that property, then the additional provision should include a sum to repay the Loan to BoQ so that John owns that property unencumbered. If BoQ has repossessed the Strand Property then John’s provision should include a sum for him to acquire a modest three-bedroom unit in Townsville and otherwise discharge his debts and be left with $200,000 for contingencies. If these matters cannot be agreed there may be a need for short further evidence and submissions.

593.   For the same reasons as applied in relation to Robyn, the Court is of the view that the additional provision for John should be drawn first from the specific legacies to John’s children and grandchildren, then the other half of the one-third interest in the Killara Property, then any balance from the Sottero account remaining after any payment to Robyn in accordance with [589] above and, finally, to the extent necessary, be charged against the gifts under the Will to Lesley (including to the LM Webster Irrevocable Trust).

594.   In directing that additional provision first come from the legacies to Dorothy’s grandchildren and great-grandchildren, the Court has not overlooked that it received evidence from some of them about their circumstances. That evidence is summarised above … . However, as I have already said, in this case their interests must yield to those of Robyn and John as Dorothy’s children. None of her grandchildren or their children claims a special relationship with Dorothy or is in need that is more acute than John and, to a slightly lesser extent, Robyn. It is also least disruptive to Dorothy’s testamentary intentions if, in the first instance, the funds she allocated to Robyn’s and John’s families are redirected to Robyn and John themselves.”

The supplementary judgment at first instance

29. After delivery of his principal judgment, the primary judge considered motions, evidence and submissions relating to the following presently relevant topics.

Provision for John’s accommodation

30. The primary judge received updating evidence that John’s “Strand Property” referred to in the principal judgment had been sold at the commencement of 2018 and that John’s son, Anthony, no longer lived with John and Lynne. In these circumstances, his Honour concluded that the appropriate provision to be made in respect of John’s accommodation was $500,000, to enable him to buy a modest two bedroom apartment for him and Lynne to occupy in Townsville.

Where the burden of Robyn’s additional provision should fall

31. In his principal judgment, the primary judge concluded that the burden of the additional provision in favour of Robyn should be borne by her family members. Subsequently, his Honour ordered that, at their request, Robyn’s family members (with the exception of Elizabeth) be joined to the proceedings to contest this finding, and be given leave to adduce further evidence as to their financial circumstances. Notwithstanding that their evidence showed that those family members were, to a greater or lesser extent, in financial need and that Lesley’s family members, who were also joined as parties, did not put on evidence of their financial circumstances, his Honour declined to alter the conclusion that he had earlier reached. In this regard, his Honour said at [108]–[109] that he was unable to accept the submission of senior counsel for Robyn’s family as to the starting point of the analysis:

“… being the identification of those beneficiaries who will be least affected by having their benefits under the Will reduced. This approach risks creating a presumption which ignores the complex, fact based evaluative exercise which the Court must undertake. I have taken into account the circumstances of the various beneficiaries as a highly relevant factor, including that Lesley’s Family have not put their financial circumstances in issue.

However, I do not think that it must follow in every case that the default position becomes that the “well off” beneficiaries virtually automatically bear the burden of any additional provision. There will undoubtedly be many cases where that should be so. However, in the present case, in my respectful view that consideration is considerably tempered by the clear and rational division which the Will demonstrates between the three families. Perhaps making this last point in a slightly different way, to say that Lesley’s Family should bear the additional provision because “they can afford it”, fails to give any, or any proper, weight to Dorothy’s intention to give the substantial benefit of her estate to Lesley, Wayne and Kelly to reflect their very considerable role in generating Dorothy’s wealth.”

The orders at first instance

32. The orders made by the primary judge on 26 September 2018 in John’s proceedings to give effect to his two judgments were, so far as is presently relevant, to the following effect:

1. The Court declared that John was indebted to the deceased in the sum of $881,000 but made an order under the Succession Act for provision to John in the form of forgiveness to John of that debt.

2. As a further addition to the $2 million legacy to John for which the will provided, the Court ordered provision for him by way of payment of a series of debts owed by him to third parties, principally in respect of various court costs. Making estimates of the Australian dollar equivalent of some amounts expressed in $US, the total of the debts was in the order of $2.2 million.

3. The Court ordered further provision for John in the amount $500,000 to enable him to acquire a home unit in Townsville and $200,000 as a contingency fund.

4. The Court ordered that the burden of these additional provisions be borne, first, by the legacies payable to John’s family and, to the extent of any deficiency, by the various specific gifts made by the will to Lesley and her family.

33. The Court’s orders of 26 September 2018 in Robyn’s proceedings were relevantly to the following effect:

1. The Court ordered additional provision under the Succession Act for Robyn in the sum of $1.2 million.

2. The Court ordered that the burden of the additional provision be borne, first, by the legacies in favour of Robyn’s family and, secondly, by the various specific gifts made by the will in favour of Lesley and her family.

The parties’ submissions on appeal

The appellants’ submissions

34. The appellants first contended that the primary judge paid no, or no proper, regard to the testamentary intention of the deceased manifested by her last will, and by a number of previous, similarly detailed, wills. The appellants submitted that the deceased’s wills were “far from simple” and showed “an obvious appreciation of different entitlements by different family members with whom she had different personal and business relationships”. The effect of their submissions was that the deceased’s careful and full statement of her intent as to how her estate should be distributed should not have been disturbed.

35. Secondly, they contended that the primary judge erred in concluding that the deceased would have assumed at the time she made her will (wrongly as it transpired) that she would receive during her lifetime all the substantial instalment payments outstanding under the agreements for the sale of her interests in Maggie Sottero. Under those agreements, the purchasers were relieved of any obligation to pay instalments which fell due for payment after the deceased’s death. The instalments outstanding at her death totalled $2.9 million. The appellants contended, contrary to the primary judge’s inference, that the deceased must have contemplated the possibility that she would die before all the instalments were received and that her estate would to that extent be diminished.

36. Thirdly, the appellants challenged the primary judge’s finding that the deceased intended to treat equally the families of her three children (as distinct from her three children themselves). They submitted that the apparent equality identified by his Honour only came about as a result of his Honour’s inappropriate inclusion in his calculation of the personal benefit to John himself of having his $881,000 debt paid out of residue.

37. Fourthly, the appellants submitted that his Honour should not have made an order having the effect of waiving John’s liability to repay his debt of $881,000 to the estate because the deceased’s clear intent (expressed in the Acknowledgment of Loan) was that the debt should be repaid by offsetting it against John’s entitlement under the will to a share of residue.

38. Fifthly, the appellants submitted that provision should not have been ordered under the Succession Act to enable payment of John’s “extravagant expenses” and his costs, including the solicitor/client component of his costs, incurred in unsuccessful litigation that he brought against the deceased’s estate.

39. Sixthly, the appellants submitted that John should not have been awarded provision to enable him to purchase a home unit in Townsville when his evidence suggested that he may not be there for six months each year because of the effect on his health of the summer heat. They submitted that a fund to cover rental expenses would have been sufficient.

40. Seventhly, they submitted that the primary judge should not have found, and taken into account, that Robyn did not have the same opportunity as Lesley to participate in the growth in the value of the family businesses. They referred in this regard to Robyn having decided to realise her interests in those businesses for substantial sums of money before much of that growth occurred.

41. Eighthly, they submitted that the orders for provision in favour of John and Robyn were so excessive as to indicate that there must have been error in the primary judge’s approach. They thus submitted that they had satisfied the standard of appellate review stated in House v The King (1936) 55 CLR 499; [1936] HCA 40.

42. In support of this submission, the appellants sought to demonstrate the unreasonableness of the orders by asserting that the effect of them, after adding entitlements under the will, was that:

1. John would receive at least $5.3 million but his children would receive nothing;

2. Robyn would receive $3.2 million but her children and grandchildren would receive nothing; and

3. Lesley and her family would have to bear a substantial part of the burden of the provisions in favour of John and Robyn (although her children and grandchildren would nevertheless receive their legacies totalling $1.55 million).

John’s submissions

43. John first submitted that the primary judge had departed from the deceased’s testamentary provisions only to the extent necessary to meet John’s needs and that his Honour did not err in taking this course.

44. Secondly, John submitted that the deceased would have expected that there would be a residue of the estate and that John would be able to set-off his liability to repay $881,000 against his share of it. He referred to the appellants’ concession that, as events had transpired, there would in fact likely be no residue, with the result that what the deceased had contemplated had, through no fault of herself or John, not come to pass. There was therefore, he submitted, a justification for departing from the deceased’s supposed testamentary intention.

45. Thirdly, he submitted that the significance of the principle of testamentary freedom could be, and was in the present case, diminished by events occurring after a deceased’s death. In particular, in the present case, John’s needs had significantly increased after his mother died.

46. Fourthly, John submitted that the primary judge’s description of the position of him and his wife as “very poor” did not do justice to “the full gravity” of their positions.

47. Fifthly, John emphasised that the primary judge found that the deceased would not have wanted John to have been destitute and that the appellants did not challenge that finding.

48. Sixthly, John submitted that the deceased’s generosity during her lifetime should not be treated as a factor that militated against John and Robyn’s claims.

49. Seventhly, John pointed out that he had given evidence of the way in which he had used the inter vivos provisions he received from the deceased and that the appellants did not, by their notice of appeal, seek a finding that John had been profligate.

50. Eighthly, so far as the provision for John’s accommodation was concerned, John contended that at the principal hearing at first instance the appellants had not submitted that he should receive provision only to enable him to rent, rather than purchase, appropriate accommodation. He referred to the primary judge’s recognition of this in his supplementary judgment.

Robyn’s submissions

51. Robyn first sought to counter the appellants’ submission that the primary judge should have had greater regard to the deceased’s intentions as expressed in her will by submitting as follows that if the deceased had known of Robyn and John’s circumstances at the date of the hearing at first instance she would have made additional provision for Robyn and John consistent with that for which the court orders provided:

“[I]t defies all probability for the appellants to argue, that had the Deceased known that Robyn and John would (i) not receive the entire $2m legacy from her Will; that (ii) they would enjoy zero benefit as the residuary beneficiaries of her estate; and that (iii) they would face a wretched existence for themselves in old age (as opposed to a very modest, debt-free retirement), she would have done nothing to increase the provision made for them.”

52. Secondly, Robyn submitted that the primary judge’s award of additional provision to her was well justified by the following circumstances:

“(i)   she has no one in her life, such as a spouse, who can support her;

(ii)   the evidence points to her being financially dependent upon the Deceased at the time of her death;

(iii)   she has [self-]evidently fallen on hard times;

(iv)   she has no savings or superannuation and no provision for retirement; and;

(v)   her debts are such that, if they are not erased and she has no buffer for future contingencies, she will likely be rendered destitute.”

53. Thirdly, Robyn submitted that the “effect of the Primary Judge’s order is to clear Robyn’s pressing debts and give her a buffer against future contingencies, and, by doing so, give her relative comfort and security in her home without the fear of ejection or future bankruptcy, if the $2m loan to Larry Webster has to be repaid”. In this context, Robyn noted that the Court’s jurisdiction is not solely related to the needs of applicants but may extend to ordering provision for “advancement in life”, that is to say, not merely maintaining the living standards and status of an eligible person, but in an appropriate case, improving and enhancing them.

54. Fourthly, Robyn submitted that it is consistent with community expectations for awards to be made in respect of dependent children “who have fallen on hard times and might otherwise be left destitute, … where the available resources of the deceased’s estate are considerable …”.

55. Fifthly, Robyn submitted that although she received value for her interests in the Abbey Bridal and Maggie Sottero businesses, she was “effectively driven out” of them and “was deprived of the same opportunity of drawing a consistently significant salary for well over 15 years (while the same or similar opportunities were afforded to others)”.

The appellants’ submissions in reply

56. In reply, the appellants first submitted that it was likely that the deceased ignored or overlooked the fact that her receipt of substantial instalments of the proceeds of sale of her interests in the family businesses was contingent on her survival. If not, she must, the appellants submitted, have been making the unlikely assumption that she would survive to about age 93 when the instalment payments were scheduled to conclude.

57. Secondly, the appellants denied that the Acknowledgment of Loan evidenced an expectation that John’s $881,000 debt would be able to be paid out of the residuary estate and submitted that, in any event, there was a residuary estate at the date of the deceased’s death, its subsequent depletion being caused by John and Robyn’s largely unsuccessful claims against the estate.

58. Thirdly, the appellants submitted that it was not sufficient to justify the primary judge’s orders in favour of John that the deceased might not have wanted to see him destitute. They submitted that “it is by no means clear the deceased’s generosity was ad infinitum” and “to resurrect entirely John’s financial position (and to provide substantial funds for accommodation and contingencies), led to a disproportionate or impermissible alteration of the deceased’s testamentary intentions”.

59. Fourthly, the appellants submitted that they were unable to raise earlier their argument as to provision for rental payments being sufficient for John because they were not made aware of his receipt of medical advice to avoid staying in Townsville during summer until after the principal judgment had been delivered.

60. Fifthly, they submitted that Robyn’s argument that she lost the opportunity to share in the increased wealth of the family businesses was based on “hindsight reasoning” because it was “by no means a certainty in 1998 and 2004 when Robyn decided to sell her shares” that the businesses would succeed to the extent that they did.

Robyn’s family members’ submissions on their cross-appeal

61. The cross-appellants, members of Robyn’s family, first referred to their evidence of their financial needs and emphasised that Lesley’s family members chose not to disclose their financial circumstances to the Court.

62. Secondly, they submitted that the primary judge acted under s 65(1)(c) of the Succession Act in directing how the burden of the additional provision in favour of Lesley was to be borne, whereas arguably sub-ss 66(2) and 72(2) of the Succession Act provided additional sources of power to do that. They submitted that if the primary judge had recognised that to have been the case he would have had to consider whether his orders as to the burden of the provision were “just and equitable”, which is an expression that appears in both sub-ss 66(2) and 72(2) but not in sub-s 65(1)(c). These statutory provisions are set out at [74] below.

63. Thirdly, they submitted that as the primary judge did not find that the deceased had any greater moral obligation to provide for Lesley and her family than for Robyn’s family, the needs of the respective families should have been given primacy. They submitted that if that had been done, Lesley’s family would have been ordered to bear the burden of the order for additional provision for Robyn.

Lesley’s family’s submissions on the cross-appeal

64. The cross-respondents, Lesley’s family (that is Kelly and her children, and Katrina), first submitted that in exercising the discretion given by sub-s 65(1)(c) the primary judge must have in fact had regard to the justice and equity of his order concerning the burden of the provision when making the order, even though the words “just and equitable” do not appear in that sub-section.

65. Secondly, they submitted that the practical effect of the primary judge’s orders, even if they are not varied on appeal, is that Lesley and her family will need to bear $50,000 of the burden in respect of the provision for Robyn and $3,357,680 in respect of the provision for John.

66. Thirdly, they submitted that it was clear that the primary judge had, appropriately, had regard to the evidence of Robyn’s family’s financial circumstances and the fact that Lesley’s family members did not provide evidence of their financial circumstances. His Honour had thus not overlooked the circumstances on which the cross-appellants now relied.

Relevant statutory provisions and legal principles

Succession Act

67. Sub-sections 59(1) and (2) are in the following terms:

(1)   The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that:

(a)   the person in whose favour the order is to be made is an eligible person, and

(b) in the case of a person who is an eligible person by reason only of paragraph (d), (e) or (f) of the definition of eligible person in section 57—having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the application, and

(c)   at the time when the Court is considering the application, 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 by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.

(2)   The Court may 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.

68. As John and Robyn were children of the deceased, they were “eligible persons” as defined in s 57 of the Act.

69. Sub-section 60(2) of the Act provides that in determining whether to make a family provision order and the nature of any such order, the court may have regard to the factors listed in s 60(2), which are as follows:

(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.

70. The primary judge in the present case (at [500]) helpfully summarised as follows the principles that are applicable to the application of ss 59 and 60. His Honour drew these principles from the decision of Hallen J in Jodell v Woods [2017] NSWSC 143 at the paragraphs indicated:

“(1) The resolution of the mandatory question posed by s 59(1)(c) will always 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: [Jodell] at [72], citing Hunter vHunter (1987) 8 NSWLR 573 at 575 per Kirby P.

(2)   "Need" is a relative concept, which means more than "want", but falls far short of "cannot survive without". It requires consideration not only of a claimant's material circumstances but also of those matters necessary to guard against unforeseen contingencies: at [74]-[76], quoting R (M) v Slough Borough Council [2008] UKHL 52; [2008] 1 WLR 1808 at [54].

(3) The matters in s 60(2) are a "multifactorial list" and a "valuable prompt"; they are not prioritised and their weight will depend upon the facts of the individual case, with none being necessarily of decisive significance: at [79]-[82], quoting Andrew v Andrew [(2012) 81 NSWLR 656] at [37] per Basten JA; Verzar v Verzar [2012] NSWSC 1380 at [123] per Lindsay J; Chapple v Wilcox [[2014] NSWCA 392]at [7] per Basten JA.

(4) A reference to some of the matters in s 60(2) requires a comparison to be made between the respective positions of the applicant and any other eligible person, as well as of any beneficiary: at [84].

(5)   The nature and content of what is adequate provision for the proper maintenance, education and advancement in life of an applicant is not fixed or static, but is a flexible concept, the measure of which "should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards": at [100], citing Pontifical Society for the Propagation of the Faith v Scales [(1962) 107 CLR 9; [1962] HCA 19] at 19; Walker v Walker (Supreme Court (NSW), Young J, 17 May 1996, unrep); Stern v Sekers [2010] NSWSC 59.”

71. In considering the financial resources and needs of the applicant for provision (see factor (d) referred to at [69] above), the following observations of Basten JA (made with the concurrence of Simpson and Payne JJA) in Chan v Chan [2016] NSWCA 222 at [22] should be borne in mind:

“A significant set of factors in many cases is that identified as “the financial resources (including earning capacity) and financial needs, both present and future, of the applicant…”. However, it is important not to elide the distinction between needs and adequate provision; the former is but one indicator of the latter. The adequacy of provision is not to be determined by a calculation of financial needs. The background to any consideration of the appellant’s needs require[s] determination of the size of the estate and the claims of others on the beneficence of the testator” (footnote omitted).

72. So far as the testamentary intentions of the deceased are concerned (see factor (j) referred to at [69] above), the following observations of White J (as his Honour then was) in Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 at [127] are pertinent:

“In my view, respect should be given to a capable testator's judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate. That is not to deny that s 59 of the Succession Act interferes with the freedom of testamentary disposition. Plainly it does, and courts have a duty to interfere with the will if the provision made for an eligible applicant is less than adequate for his or her proper maintenance and advancement in life. But it must be acknowledged that the evidence that can be presented after the testator's death is necessarily inadequate. Typically, as in this case, there can be no or only limited contradiction of the applicant's evidence as to his or her relationship and dealings with the deceased. The deceased will have been in a better position to determine what provision for a claimant's maintenance and advancement in life is proper than will be a court called on to determine that question months or years after the deceased's death when the person best able to give evidence on that question is no longer alive. Accordingly, if the deceased was capable of giving due consideration to that question and did so, considerable weight should be given to the testator's testamentary wishes in recognition of the better position in which the deceased was placed (Stott v Cook (1960) 33 ALJR 447 per Taylor J at 453-454 cited in Nowak v Beska [2013] NSWSC 166 at [136]). This is subject to the qualification that the court's determination under s 59(1)(c) and (2) is to be made having regard to the circumstances at the time the court is considering the application, rather than at the time of the deceased's death or will.”

73. To similar effect were his Honour’s observations (made with the concurrence of McColl and Payne JJA) in Sgro v Thompson [2017] NSWCA 326 at [86]:

“I adhere to the view I expressed in Slack v Rogan; Palffy v Rogan. To recognise that the court is not in as good a position as a capable testator to assess what maintenance or advancement in life is proper for an applicant having regard to all of a family’s circumstances, including the relationships between the applicant and the deceased, and the merits and claims of other family members, is not to put a gloss on the statute. Rather, it is to acknowledge the superior position of the testator. The most important word in s 59(1)(c) is “proper”. Until the court has identified what is proper maintenance, education and advancement in life for an applicant, it cannot assess whether the provision made, if any, is adequate. What is proper requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties’ financial circumstances. Whilst the court will know the latter, it will only have an incomplete picture of the former. Of course, the court’s assessment of what is proper maintenance, education and advancement in life must be made when the court is considering the application. That does not mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate” (see also at [6] per Payne JA).

74. The statutory provisions relevant to the cross-appellants’ submissions referred to at [62] above are:

65 Nature of orders

(1) A family provision order must specify:

(a) the person or persons for whom provision is to be made, and

(b) the amount and nature of the provision, and

(c) the manner in which the provision is to be provided and the part or parts of the estate out of which it is to be provided, and

(d) any conditions, restrictions or limitations imposed by the Court.

…

66 Consequential and ancillary orders

(1) The Court may, in addition to, or as part of, a family provision order, make orders for or with respect to all or any of the following matters for the purpose of giving effect to the family provision order:

…

(d) the powers and duties of a trustee of property of the estate, including any trustee constituted or appointed under this section,

(e) the vesting in any person of property of the estate,

(f) the exercise of a right or power to obtain property for the estate,

(g) the sale of or dealing with property of the estate,

(h) the disposal of the proceeds of any sale or other realising of property of the estate,

(i) the securing, either wholly or partially, of the due performance of an order under this Part,

(j) the management of the property of the estate,

(k) the execution of any necessary conveyance, document or instrument, the production of documents of title or the doing of such other things as the Court thinks necessary in relation to the performance of the family provision order,

(l) any other matter the Court thinks necessary.

(2) The Court may make such additional orders as it considers necessary to adjust the interests of any person affected by a family provision order and to be just and equitable to all persons affected by the order.

…

72 Effect of family provision order

(1) A family provision order takes effect, unless the Court otherwise orders, as if the provision was made:

(a) in a codicil to the will of the deceased person, if the deceased person made a will, or

(b) in a will of the deceased person, if the deceased person died intestate.

(2) Without limiting subsection (1), the Court may at the time of distribution of an estate that is insufficient to give effect to a family provision order make such orders concerning the abatement or adjustment of distributions from the estate as between the person in whose favour the family provision order is made and the other beneficiaries of the estate as it considers to be just and equitable among the persons affected.

Appellate review of Succession Act provision orders

75. Section 59(2) of the Succession Act states that the court “may” make an order for provision out of a deceased’s estate for the maintenance, education or advancement in life of an eligible person. The words “may” and “such order … as the court thinks ought to be made” indicate that the court has a discretion as to whether to make an order and as to the amount of any order. As a result, there is no doubt that the principles applicable to the appellate review of discretionary decisions apply on appeal from a s 59(2) order. Thus, to succeed on appeal, an appellant has to demonstrate “an error of principle, a material error of fact, a failure to take some material consideration into account, or the converse, or [that] the result is so unreasonable or plainly unjust to bespeak error of such a kind” (see DJ Singh v DH Singh [2018] NSWCA 30 at [277] per Gleeson JA summarising the principles stated in House v The King).

76. A precondition to the making of an order under sub-s 59(2) is satisfaction of s 59(1)(c) which requires that the court conclude that adequate provision for the proper maintenance, education or advancement in life of the claimant has not been made by the will of the deceased (assuming the deceased dies testate). This conclusion constitutes a finding of fact, albeit one that is, in light of the subjective character of the matter to be decided, evaluative. Nevertheless, making the finding involves a binary choice – either adequate provision has been made, or it has not. A finding on the issue does not therefore involve an exercise of discretion, with the result that, prima facie, the correctness standard of review, rather than the House v The King standard, should apply. If the former standard is applicable, the appellate court will intervene if, having given due weight to the decision below, it considers it to be erroneous (see Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9). I have referred to the House v The King standard above.

77. In Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 92 ALJR 713 at [49], Gageler J, after considering relevant authorities, concluded as follows in relation to the circumstances in which one rather than the other standard applies:

“The line [between the different standards of review] is not drawn by reference to whether the primary judge's process of reasoning to reach a conclusion can be characterised as evaluative or is on a topic on which judicial minds might reasonably differ. The line is drawn by reference to whether the legal criterion applied or purportedly applied by the primary judge to reach the conclusion demands a unique outcome, in which case the correctness standard applies, or tolerates a range of outcomes, in which case the House v The King standard applies. The resultant line is not bright; but it is tolerably clear and workable.”

78. The principles stated by Gageler J in SZVFW were recently applied by this Court in State of New South Wales v Naaman (No 2) [2018] NSWCA 328 at [10]-[15].

79. Notwithstanding that the logic of Gageler J’s reasoning in the above paragraph would seem to indicate that the correctness standard of review would apply to a challenge to a s 59(1)(c) finding, authority clearly requires that the House v The King standard be applied. This was established by the High Court’s decision in Singer v Berghouse (1994) 181 CLR 201 (especially at 212); [1994] HCA 40 despite that case dealing with the now-repealed Family Provision Act 1982 (NSW), which was structured somewhat differently to s 59 of the Succession Act. The plurality in that case recognised that a finding that adequate provision had not been made for a claimant was not “strictly speaking” a discretionary judgment (at 211) but nevertheless concluded that the House v The King standard was applicable to appellate review of it. In SZVFW at [45] Gageler J referred to Singer v Berghouse without criticism. Moreover, its decision on this point has been applied to s 59(1) of the Succession Act (Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 at [6], [42] and [99]-[100]). The applicability of the House v The King standard of review in this context has been repeatedly confirmed in this Court (see DJ Singh v DH Singh at [277] and Steinmetz v Shannon [2019] NSWCA 114 at [14]).

Determination of Robyn’s Appeal

80. The primary judge’s disposition of Robyn’s case is to be found in [587] of his judgment (quoted in [28] above). In essence, his Honour concluded that sufficient provision should be made for Robyn to enable her to pay off her mortgage and other debts. His Honour referred to this provision as an amount of $1.2 million (in addition to her $2 million legacy under the will). It is clear that his Honour contemplated that Robyn would in effect receive the full amount of her $2 million legacy in addition to the further provision of $1.2 million that he ordered. That is, he did not contemplate that she would be disadvantaged by her legacy abating by reason of the insufficiency of the estate to meet the full amount of the various legacies listed in the will. This is clear because his Honour’s Order 2 specified not only how the award of $1.2 million was to be borne, but also how “the difference between the sum of $2,000,000.00 and the pro-rata adjusted amount of the Legacy payable upon distribution of the estate of the Deceased” was to be borne. In other words, his Honour effectively made provision, in addition to the amount of $1.2 million, for the amount by which abatement would reduce Robyn’s $2 million legacy.

81. His Honour found that Robyn’s total liabilities, excluding the debt of $2 million owed to her former husband, Larry, were $1.37 million, her mortgage debt of approximately $881,000 being the largest. It seems that his Honour largely, if not wholly, disregarded the $2 million debt because Larry gave evidence that he would not seek to have it repaid unless Robyn sold her existing home at Noosa.

82. Robyn’s liabilities stood at the amount $1.37 million referred to by his Honour after receipt by her prior to the hearing at first instance from the estate of $1.335 million on account of her $2 million legacy. Receipt of the remainder of the legacy ($665,000) would enable her to reduce the debts (assuming that they otherwise remain unaltered) to $715,000. His Honour did not explain why Robyn needed additional provision of $1.2 million (rather than $715,000) to discharge these liabilities. Such provision exceeded the amount required for that discharge by $485,000 (assuming that the debt amount is rounded up to $1.4 million).

83. Although in his conclusion concerning Robyn’s claim at [387], his Honour referred to the $1.2 million additional provision as being required by Robyn to pay her debts, his Honour was aware that that provision would exceed the amount of those debts by $485,000 as his Honour referred to that amount in the course of reciting Robyn’s submissions. As his Honour recorded, Robyn submitted that she should be awarded the additional $485,000 as “a buffer so that she has something to live on and retire upon, including some expenditure on upgrading access to town water, sewerage and the like at Lot 276 Noosa” where she lived (at [555]). In oral submissions, Robyn’s counsel submitted to his Honour:

“The principal submission we made [earlier] on behalf of Robyn is that she needs further provision in as much because without it her security in respect of where she lives is in peril and [if] she loses the Noosa North Shore home, she sells that voluntarily or if she's forced to sell up by reason of her financial circumstances then she has a repayment obligation to her former husband of $2 million pursuant to that promissory note. Now, your Honour has received evidence that Larry Webster has no intention of enforcing that for as long as she can remain there.”

84. Acceptance of these submissions could explain, although not necessarily justify, his Honour’s award of $1.2 million to Robyn. Support for the view that his Honour intended to award Robyn a contingency fund in addition to sufficient funds to enable her to pay her debts, but overlooked mentioning that in the critical paragraph of his judgment ([587] quoted at [28] above), is to be found at three points in his Honour’s judgment: first, in his Honour’s reference to a fund or buffer for contingencies in [586] (see [28] above); secondly, in his reference back to Robyn’s submissions in [587] itself; and thirdly, in his provision of a fund for John in respect of contingencies, when logic would not seem to distinguish his position in principle from that of Robyn.

85. I turn then to the appellants’ challenges to the award of additional provision to Robyn.

86. First, as noted at [40] above, the appellants submitted that the primary judge erred in finding, and taking into account, that Robyn did not have the same opportunity as Lesley to participate in the growth in the value of the family businesses. I do not consider that his Honour was in error in this regard. Certainly, as his Honour recognised, Robyn sold her interests in the businesses for their value at the time of sale but the reality was that the relationships within the family at that time were such that she had to sell, and the businesses increased substantially in value after her sale. In my view, these matters were part of the circumstances of the family, and of Robyn in particular, that the primary judge was entitled to take into account in exercising his discretion.

87. Secondly, as noted at [41] above, the appellants submitted that the order for provision in favour of Robyn was so excessive as to attract the principles in House v The King. As her counsel submitted, and as the primary judge accepted, Robyn’s financial circumstances are and, without some significant additional provision, will continue to be very poor indeed (see [24] above). The estate is a large one and the burden of the additional provision will (in light of what I propose below at [113] in relation to the cross appeal) essentially be borne by Lesley and her family for whom the will provides specific gifts of a value in excess of $9 million, as well as substantial legacies. Moreover, no evidence was adduced of any needs of Lesley and her family. A significant provision for Robyn was well within the range of options open to his Honour in the proper exercise of his discretion. Her, and John’s, position was aptly described by his Honour as follows (at [585]):

148. Robyn deposed that her property at Noosa had no access to town water, nor town supply of electricity. Power was provided by a generator and it depended upon its tanks for water. She had water tanked into the property and used bottled gas. There was no septic system. She said that she would like to have an off-grid solar system for electricity. The property needed a new water tank and repairs were required to the roof and gutters. Noosa was the home to which she planned to retire. She deposed that she would like to retire and could do so if she owned Noosa debt-free and had a lump sum for contingencies and which would generate a small income. She also needed a new car.

149. The primary judge recorded that Robyn bought her Noosa property for $800,000 in about 2001 or 2002 (Judgment [437]). Her ex-husband, Larry, agreed not to enforce a $2 million loan debt payable by Robyn to him until the Noosa property was sold (Judgment [442] and [444]). At some future time Robyn might need to move into different retirement accommodation or an assisted living facility and the Noosa property may need to be sold. It cannot be assumed that the property would sell for more than the $2 million debt that Larry might then be entitled to enforce. The buffer of $485,000 for contingencies or some part of it could well be needed to allow her to move to new accommodation.

150. In my view this evidence amply justified the primary judge’s acceptance of the submissions made for Robyn that a buffer for contingencies of $485,000, in addition to a sum that would enable her to discharge all her debts, does not reveal any error. It is true that in para [587] of the primary judge’s reasons he said that the provision sought by Robyn would “... enable her to pay off the mortgage over lot 276 Noosa and her other debts”, whereas he might have added “and provide a reasonable buffer against contingencies”. But it is clear from the primary judge’s earlier reasons and his acceptance of submissions of counsel for Robyn, that that was what he had in mind.

151. It is not a sufficient justification for interfering with the primary judge’s assessment as to what provision for contingencies was appropriate for Robyn that John received a lesser additional provision for contingencies. John received much greater assistance from the deceased during her life and he received orders for substantially greater provision from the estate. John’s and Robyn’s circumstances are materially different.

152. For these reasons I would correct order 1, which inadequately describes the provision made for Robyn under s 59, to include the difference between the $2 million legacy and her abated legacy, but otherwise dismiss the executors’ appeal from the order for provision made in favour of Robyn.

Appeal from the order for provision in favour of John

154. For the reasons above I agree with Macfarlan JA that the orders for additional provision that the primary judge made in favour of John were not premised upon an assumption that his $2 million legacy would not abate.

155. There is no reason to think that the primary judge overlooked the fact that John’s legacy would abate. The appellants did not submit that the primary judge had overlooked the balance of the legacy payable to John (approximately $800,000).

156. The primary judge recorded (Judgment [525]) that John submitted that:

“A family provision order should be made which discharged his debts, including his debts to the estate; and provided an amount to fund his future accommodation, a sum which supplemented his and his wife Lynne’s social security payments so as to make ends meet, and an amount by way of contingency against future vicissitudes.”

157. In the course of his reasons for finding that less than adequate provision had been made for John’s proper maintenance and advancement in life the primary judge said:

“583    As to whether adequate provision has been made for John's proper maintenance and advancement in life, it is clear that John's financial and personal circumstances are very poor. The same conclusion applies to those with whom John is cohabiting, and for whom he is responsible, Lynne and Anthony. The evidence shows that Dorothy recognised this during her life. John was being partly maintained by Dorothy before her death, and was, in financial terms, extremely dependent on her - as she recognised by the ‘dependency payments’. John is aptly described as an adult dependent child who has ‘fallen on hard times’, for whom the community would expect - especially in the case of a large estate - provision to be made to secure accommodation and offer a buffer against contingencies (see [520] above). Nothing in John's conduct exposed in these proceedings is, in my view, sufficient to displace that conclusion. As events have transpired, the provision for John in the Will, although significant, is not adequate for his proper maintenance and advancement in life.

...

585   ... Here, John and Robyn's needs are dire, their capacity is extremely limited, and there are resources available to provide them with a degree of security and comfort which they currently lack and which the Court considers is necessary for their maintenance and advancement in life.

586    The Court is satisfied that Dorothy's testamentary intentions were to treat John and Robyn equally so as to ensure that each be properly provided for, in terms of secure accommodation and possession of resources to guard against contingencies. The current provisions in the Will would not, on the facts as they now stand, achieve those ends (being unencumbered accommodation and some further resources).”

158. In paragraph [590] of his Honour’s reasons, the primary judge said:

“590    In relation to John, the same considerations which informed the Court's conclusion that inadequate provision had been made for him lead to the result that additional provision should be made for John to ensure he is debt-free, has a three bedroom apartment to live in (given, as noted in the evidence and submissions, that John and Lynne sleep in separate bedrooms and that Anthony also needs a bedroom), and has an amount for contingencies. Given John's age and health and doing the best it can, the Court assesses $200,000 as an appropriate figure for contingencies. I do not accept the defendants' submission that, as a matter of discretion, an order for provision should not be made where it is the creditors who will benefit. Providing funds to reduce or eliminate debt can be a very effective way to maintain and advance a person who might otherwise be close to or in bankruptcy.” (Emphasis added.)

159. It is clear that the primary judge intended that ensuring that John was debt-free, ensuring that he had a three-bedroom (later adjusted to a two-bedroom) apartment for him and his wife Lynne to live in, and had an amount for contingencies was a matter required to be provided by way of additional provision to that provided for under the will. The proper inference is that the primary judge considered that the balance of the legacy payable to John would be required to provide John and his dependant wife Lynne with the degree of comfort they currently lacked and which the primary judge considered to be necessary for their maintenance and advancement in life (Judgment [585]).

160. I infer that it was for this reason that the primary judge did not address the question as to whether additional provision was required to meet the shortfall between John and his wife’s income and the income that John deposed would be needed if he and his wife were to have a comfortable lifestyle.

161. John deposed:

“Lynne and I cannot afford to meet the actual costs of our living. Our current monthly minimum expenses which we are able to pay are $3,081.00. We do not currently survive on the $3,081.00 per month and it has been extremely difficult. Our limited pension income means we miss out on all social outings, we miss out on all holidays, and we cannot afford to buy new clothes or shoes. We have no savings. We cannot afford to pay basic outgoings like electricity, strata levies and rates, which have been accumulating and now are at risk of urgent recovery action by the Council. We cannot go out for dinner with our family or grandchildren. We have not been able to maintain The Strand unit, replace broken items in the unit, fix the old car which is barely running. I have not been able to afford to buy a mobile phone, or a mobile phone contract. The existence we have had since my mother has died have [sic] been dire. We cannot currently afford to maintain the property in which we live or meet the mortgage payments or outgoings.”

162. It is clear from para [585] of the primary judge’s reasons that he accepted that evidence.

163. John prepared a budget in which he calculated that $15,470 per month would be required for the comfortable lifestyle he described with the ownership of two properties, Townsville and Bondi. John expressed the wish to have a property at Bondi to which he and his wife could move to avoid the North Queensland summer heat. This claim was not accepted by the primary judge. Mr Condon provided a re-working of that budget to exclude the costs assumed in relation to ownership of a second property in Bondi. As so adjusted, John’s budget was $12,970 per month. John and Lynne’s combined pension income was $3,081 per month, a shortfall of approximately $10,000 per month. Mr Condon submitted that the primary judge assumed that the shortfall between the pension and the living costs would be met by the balance of the legacy which was yet to be paid.

164. That is a probable explanation. But the primary judge did not make that finding. He made no finding as to how he assumed the balance of the legacy might be used in assessing what additional provision was required. That is an error that requires appellate reassessment.

165. Mr Condon submitted that the appellants had not included as a ground of appeal nor had they submitted that the primary judge erred by not explaining what assumptions he made about the use to which the balance of John’s legacy could be put in assessing what additional provision was required. This is correct. But Mr Condon also correctly accepted that the grounds of appeal were wide enough to cover the issue that was raised by the Bench and accepted that he was able to meet it.

166. John Steiner provided a number of different budgets prepared on different assumptions. He was cross-examined on them to suggest that some of the claimed amounts were extravagant. In the budget (annexure N) on which Mr Condon ultimately relied the monthly expenditure was assessed as follows (after adjustment for the exclusion of expenses in relation to a Bondi property):

“Monthly living expenses

Home maintenance/repairs               $650.00

Pharmaceutical/medical expenses/Physiotherapy for both   $1,200.00

Rates & levies (Council, water, body corporate etc)      $1,250.00

Phone(s) (Rental, service & calls)            $300.00

Utilities (Electricity, gas, etc)               $400.00

Food  $750.00

Medical/dental  $1,000.00

Clothes, shoes, dry cleaning, etc            $500.00

Household purchases (e.g. Appliances)/supplies      $800.00

Hairdressing/toiletries                  $750.00

Car/transport

Registration/maintenance/repair            $500.00

Fuel  $500.00

Fares  $50.00

Car Parking  $300.00

Insurance & Superannuation

Home & Contents                  $200.00

Car/boat/trailer                  $400.00

Health  $420.00

Leisure/entertainment

Holidays  $1,000.00

Restaurants/theatre etc               $1,000.00

Sports/hobbies/memberships               $200.00

Newspapers/magazines/books/CDs/etc         $300.00

Gifts  $500.00

$12,970”

167. The primary judge made no finding as to whether he accepted these claimed expenses as reasonable estimates of expenses required to provide John and Lynne a comfortable lifestyle. John was not cross-examined on all of the expenses. Indeed, the cross-examination concentrated on other budgets. Given the adverse credit finding the primary judge made in relation to John the figures cannot simply be accepted. No party suggested that the matter should be remitted to enable further findings of fact to be made.

168. The provision Macfarlan JA proposes would provide a fund for contingencies of $300,000 to be met from the balance of the legacy. It would leave John’s claim to provision of an additional capital sum to supplement his income unaddressed.

169. John has a life expectancy of approximately 13-14 years. In addition to a sum for contingencies he should be provided a capital sum which could be used to augment his and his wife’s income for his remaining estimated lifetime.

170. The only source of current income for John and his wife Lynne is their Centrelink aged pension. They have no superannuation. Prior to her death the deceased provided gifts of income to John by quarterly payments of $50,000. He used much of that income to meet interest on debts, but he also used it to pay motor vehicle running expenses, food, and other living expenses such as telephone, and internet charges and medications.

171. Both John and Lynne suffer from health problems. He deposed that they take 50 types of vitamins twice daily. Lynne suffers from schizophrenia and takes nightly medication. John estimated that they spent about $300 each month on prescribed medications and vitamins (using the pensioner discount where they pay a maximum of five dollars per prescription). He estimated that if they ceased to be entitled to the pensioner discount for medications Lynne would spend about $700 per month on prescribed medications plus the cost of vitamins for which there is no pensioner discount. In addition to the matters to which John deposed quoted at [161] above, he deposed that their motor vehicle was very old and had no functioning air-conditioning. They needed a new car.

172. John deposed to the need for dental treatment for both him and Lynne. He deposed that he might require a hip replacement and that Lynne needed knee and hip replacement surgery. He deposed that both he and Lynne needed chiropractic physiotherapy and remedial massage as well as naturopath services. John deposed to costs that he and Lynne would face in the future with additional medical costs and the potential need for funds if one of them were required to move to a nursing home. He also referred to their wish to have holidays.

173. Having regard to the size of the estate and the deceased’s wish for John to live comfortably, provision of a capital sum that can be drawn on to augment John and Lynne’s income so as to provide a reasonably comfortable lifestyle is required. The primary judge recognised this (at Judgment [585]). In my view a sum that can be drawn on to provide a further $36,000 per year (that is approximately double his and his wife’s current income) is not more than adequate provision for that purpose.

174. At a time of very low interest rates there is no reason to apply a three per cent (let alone a five per cent) discount rate to reflect assumptions about future returns on the investment of the capital sum, future rates of inflation to preserve the real value of the income stream and the impact of taxation (Tchadovitch v Tchadovitch (2010) 79 NSWLR 491; [2010] NSWCA 316 at [52]-[60]; Wardy v Salier [2014] NSWSC 473 at [181]-[183]). I see no reason to assume that earnings on the capital sum to provide a supplement to John’s income, after taxation, would do better than match future inflation. A capital sum of between $468,000 and $504,000 would be required to provide such an augmentation of income.

175. The primary judge’s assessment that $200,000 should be provided for contingencies was by way of “additional provision”, that is, in addition to the payment of the unpaid legacy estimated to be of about $800,000 under the will.

176. Having regard to the size of the estate and the absence of any competing financial need, in my view a provision for John for contingencies of only $300,000 is inadequate without an additional capital sum that can be drawn on to augment income. I do not infer that the primary judge overlooked the fact that John was entitled to an additional $800,000 remaining to be paid under the legacy. The effect of the primary judge’s determination was that after discharging John’s debts and providing a sum of $500,000 for his accommodation in a two-bedroom unit in Townsville, he should receive a further $1 million ($800,000 under the will and $200,000 by way of additional provision) to supplement his income, provide a new car and a buffer against contingencies.

177. In addition to the sum that can be drawn on to augment John’s and his wife’s income, a contingency for which provision should be made is that one of John or Lynne might need to move into a nursing home or similar accommodation whilst the other continues to live in the unit to be acquired. A capital sum might be required for that purpose. There should also be a buffer against the contingencies of future substantial medical expenses. Adequate provision for John’s maintenance and advancement in life must be assessed having regard to John’s obligation to support Lynne (Hughes v National Trustees and Agency Co of Australasia Ltd (1979) 143 CLR 134 at 14; [1979] HCA 2; Goodman v Windeyer (1980) 144 CLR 490 at 498, 505; [1980] HCA 31).

178. Taking into account John’s need for a capital sum that can be drawn upon to augment income as described above, John’s need for a new car, and the contingencies for which a buffer is required, including the possibility of moneys being needed if one of John or Lynne has to move from the accommodation to be acquired into a nursing home or similar facility, and future medical expenses, the additional provision ordered by the primary judge is not beyond the proper exercise of his discretion.

179. Although the primary judge did not articulate how he arrived at his assessment, his conclusion that there should be an order for additional provision in the sums indicated was within a legitimate range of a judicial evaluation. To put it another way, I do not consider that provision of $1 million in addition to provision enabling the discharge of John’s debts and providing accommodation was manifestly excessive, having regard to the size of the estate and the absence of competing financial need.

180. However, because the primary judge’s decision can be reviewed on appeal without the need to show that the provision his Honour ordered was manifestly excessive (owing to an error analogous to the first category in House v The King) I would substitute my own judgment. In my view, after an order for provision for accommodation, the balance of the legacy of $800,000 is sufficient for adequate provision for John’s proper maintenance and advancement in life. I would reduce the provision made by the primary judge by deleting the order for additional provision of $200,000 for contingencies (order 3(p)). In my view, having regard to the contingencies addressed above, the balance of the legacy payable under the will is sufficient to provide a buffer for contingencies and a sum that can be drawn on to augment income, provided provision is also made for John and Lynne’s accommodation.

Cross-appeal

181. I agree with Macfarlan JA that the cross-appeal by Robyn’s children should be allowed for the reasons given by Macfarlan JA. I also agree with Macfarlan JA’s proposed costs orders.

Proposed orders

182. The orders made on John’s claim included the following:

“3. Pursuant to s 59 of the Succession Act 2006, the Court orders by way of further provision for the Plaintiff in addition to the Legacy that the Plaintiff receive the following sums:

a. the sum of $385,000, on account of the Plaintiff’s indebtedness to financial institutions for unpaid credit card debts;

b. the sum of $13,234.19, on account of the Plaintiff’s outstanding accounts for electricity supplied to his property at ‘The Strand’;

c. the sum of $373,520.01, being the Plaintiff’s indebtedness to Gells Lawyers (including the disbursements payable by him and/or that firm to Spry Roughley, the Supreme Court of New South Wales, Miles Condon S.C., Michael Cashion S.C., Paul Blackburn-Hart S.C., David Raphael and Richard Jefferis of Counsel) for and in respect of these proceedings (including Court of Appeal proceedings 2014/295620), after allowance for any sum paid by the Defendants to the Plaintiff or as he directs pursuant to the costs order made by the Court of Appeal in those proceedings;

d. the sum of $259,686.27, being the Plaintiff’s indebtedness to Gells Lawyers (including the disbursements payable by him and/or that firm to the Supreme Court of New South Wales, Paul Blackburn-Hart S.C., David Raphael and Richard Jefferis of Counsel) for and in respect of proceedings number 2014/10747 (being those proceedings determined by Justice Slattery);

e. the sum of $481,502.37 plus any interest payable thereon, being the Plaintiff’s indebtedness to Steiner Wilson and Webster Pty Limited, Wayne Webster, Lesley Webster and Kelly Midgley on account of their costs, as assessed, for and in respect of proceedings number 2014/10747;

f. such costs, if any, the Plaintiff is obliged to pay to Steiner Wilson and Webster Pty Limited, Wayne Webster, Lesley Webster and/or Kelly Midgley referrable to:

i. District Court judgments entered on 17 May 2017 (in proceedings number 2017/147004);

ii. Federal Circuit Court proceedings No SYG2217/2017; and

iii. The costs order made by Kunc J on 3 July 2017;

g. such sums as the Plaintiff is liable to pay to Keypoint Law (including the disbursements payable by him and/or that firm) for these proceedings (including the motion filed on 21 June 2017) and the Federal Circuit Court proceedings No SYG 2217/2017), after allowance for any sum paid by the Defendants to the Plaintiff or as he directs pursuant to the costs order made by the Court in these proceedings;

h. the sum of $45,250.00 or such other sum as is agreed or assessed, being the Plaintiff’s indebtedness to the Defendants pursuant to such costs orders as were made against him in these proceedings, including the orders made by the following judicial officers on the following dates:

i. Justice White on 17 July 2012;

ii. Justice Ball on 3 February 2015; and

iii. Justice Kunc on 24 February 2017;

i. the sum of $9,810.37, on account of the Plaintiff’s indebtedness to McNamara, Solicitor;

j. the following sums (subject to any currency conversion rates at the date of payment), on account of the Plaintiff’s indebtedness to:-

i. Richard Bobb of $48,290.00;

ii. Richard Matheson of US$20,995.61;

iii. Dean Duncan of US$5,111; and

iv. Callister Nebeker & McCullough of US$15,403.29.

k. the sum of $20,000.00 plus any interest thereon, being the Plaintiff’s indebtedness to Larry Webster;

l. the sum of $35,000.00 plus any interest thereon being the Plaintiff’s indebtedness to Lesley Webster;

m. the sum of $25,000.00 plus any interest thereon, being the Plaintiff’s indebtedness to Robyn Webster;

n. subject to order 6, the sum of $500,000, referable to the costs of acquiring a unit in Townsville, plus the costs of buying such unit including conveyancing fees and stamp duty;

o. the balance of the Plaintiff’s pro-rata adjusted legacy pursuant to clause 3(a) of the deceased’s will dated 7 June 2011; and

p. the sum of $200,000;

payable within 28 days of the date of these orders, together with such interest (if any) as the plaintiff may be obliged to pay the relevant creditor.”

183. The “Legacy” was the legacy payable to John under clause 3(a) of the will, viz, the legacy of $2 million subject to abatement. Order 3(o) is an evident mistake. It is self-contradictory. The balance of John’s pro-rata adjusted legacy is not to be received “in addition to the Legacy”. Prima facie order 3(o) would mean that the plaintiff should receive the balance of his legacy twice. This should be corrected. There is no need for order 3(o) because that sum is part of the “Legacy” in the chapeau to order 3.

184. Orders 6 and 7 are unusual. The additional provision ordered pursuant to s 59 of the Succession Act included:

“3(n)   Subject to order 6, the sum of $500,000, referable to the costs of acquiring a unit in Townsville, plus the costs of buying such unit including conveyancing fees and stamp duty”.

185. Orders 6 and 7 were as follows:

“6.    The Court orders that the sum set out in paragraph n of order 3 herein is to be held by the Defendants until the Plaintiff provides to the Defendants evidence to their reasonable satisfaction of the home unit being purchased and the sum required to pay the purchase price and the costs and expenses to be incurred in connection with the purchase (the actual purchase cost), whereupon the Defendants are directed to pay the sum set out in paragraph n or the actual purchase cost, whichever is the lesser, to the Plaintiff or as he directs, provided that the Defendants are satisfied that the sum paid is to be applied to payment of the actual purchase cost.

7.    The Court orders that if the Plaintiff does not notify the Defendants of the purchase of a home unit and complete the purchase within twelve months after the date of the expiration of any stay of these orders then the entitlement of the Plaintiff to the sum set out in paragraph n of order 3 herein will lapse and the provision to be made for the Plaintiff will be reduced by that sum.”

186. Although a court frequently justifies a particular family provision order by reference to what it assesses to be an applicant’s financial needs, it is usually a matter for the applicant how he or she uses a provision ordered (Lloyd-Williams v Mayfield (2005) 63 NSWLR 1; [2005] NSWCA 189 at [17]). John and his dependent wife Lynne have a need for accommodation whether or not a home unit is acquired within 12 months. There is no obvious reason for that order for provision potentially to lapse, nor for the executors to have a continued involvement in the application of the provision ordered. However, John did not file a cross-appeal in relation to orders 6 and 7.

187. In the case of Robyn, I consider that her appeal should be dismissed, save for the correction of order 1.

188. Otherwise I agree with the orders proposed by Macfarlan JA.

189. For these reasons I propose the following orders:

1. The appeal against the orders of the primary judge in favour of the first respondent be allowed in part.

2. Set aside paragraphs (o) and (p) of order 3 made on 26 September 2018.

3. Otherwise appeal dismissed.

4. In respect of Robyn Webster’s claim under the Succession Act:

1. allow the appeal in part;

2. vary Order 1 made below on 26 September 2018 in Case Number 2012/139833 by adding after the words “(the Award)” the words “and the amount in order 2(a)”; and

3. otherwise dismiss the appeal.

5. Allow the cross-appeal and vary Order 2(c) by replacing the expression “clause 3(b)” with the expression “clause 3(c)” and adding the words “and the legacy payable to Elizabeth Fuggle under clause 3(b) of the Deceased’s will”.

6. Extend the time for the filing of the cross-appeal to the date that it was filed.

7. Order that the costs of all parties to the appeals (as distinct from the cross-appeal) be paid out of the estate on an indemnity basis.

8. Order that the cross-respondents pay the cross-appellants’ costs of their amended notice of motion filed in the court below on 28 May 2018 and of the cross-appeal.

190. McCALLUM JA: I have had the benefit of reading the judgments of Macfarlan JA and White JA in draft. As noted in both judgments, it is uncontroversial that the House v The King standard applies to a challenge to the determination of the amount of additional provision to be made. As to what Macfarlan JA has said at [79] in respect of Gageler J’s reasoning in SZVFW at [49], it is not clear to me that Gageler J’s reasoning would hold (other authority aside) that the correctness standard of review would apply to a challenge to such a finding. Justice Gageler’s reasoning at [45] of the judgment suggests, on the contrary, that his Honour reconciled Singer v Berghouse with the analysis explained at [49] on the basis that the legal criterion by which the determination was to be made in that case (whether an applicant had been left with “inadequate” provision for his or her “proper maintenance, education and advancement in life”) was of a kind that, although ultimately requiring a binary choice, would tolerate a range of outcomes on its proper application and so attracted the application of the House v The King standard. However, it is not necessary for present purposes to decide that question.

191. I agree with White JA that no error has been shown in the primary judge’s disposition of Robyn’s claim, for the reasons his Honour has explained. In my respectful opinion, the primary judge’s reasons on this issue are clear. His Honour accepted Robyn’s submission, both as to the contention that the additional provision should include a contingency fund in addition to the funds required to enable her to pay her debts and as to the amount identified, having regard to her likely future needs. I do not read [587] of the judgment as being inconsistent with that. I do not think the third sentence in that paragraph was intended to be a comprehensive statement of all of the reasons for making the order. Reading the judgment fairly as a whole, it is clear that the position his Honour reached, after closely considering the relevant matters, was to accept her claim as framed. While the amount of $485,000 might be viewed as reflecting a careful or favourable provision for the future, I am not persuaded that it was so excessive as to attract the principles in House v The King. I agree with the orders proposed by White JA for the disposition of the appeal concerning Robyn’s claim.

192. As to John’s case, I agree with Macfarlan JA and White JA that the orders for additional provision made in favour of John were premised upon the assumption that his $2 million legacy would abate. I also agree, as both Macfarlan JA and White JA have held, that the judge’s reasoning concerning John’s contingency was, with respect, inadequately exposed. In particular, it is not possible to discern whether, in allowing a contingency of $200,000, his Honour overlooked the legacy. If he did, that would be a separate error. If he did not, in my view the additional provision was manifestly excessive, for the reasons stated by Macfarlan JA.

193. Justice White has considered the nature of an error consisting in failure to provide adequate reasons. In my respectful opinion, the correct approach is as stated by Hodgson JA in Costa at [16]-[18]. If there is material error in the reasoning (including a failure to give reasons), that is an error of a different kind, the determination of which is anterior to and separate from the application of the House v The King standard and the consequence of which is that the order cannot stand. In any event, as already indicated, I agree with Macfarlan JA that, assuming the primary judge did not overlook the legacy, the additional provision was manifestly excessive. I agree with the orders proposed by Macfarlan JA concerning John’s claim, for the reasons his Honour has given. I also agree with his Honour’s reasons and proposed orders concerning the cross-claim.

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Decision last updated: 19 June 2019