Talent v Talent
[2020] ACTSC 240
•10 September 2020
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Talent v Talent |
Citation: | [2020] ACTSC 240 |
Hearing Dates: | 13-16 July 2020 |
DecisionDate: | 10 September 2020 |
Before: | McWilliam AsJ |
Decision: | See [30], [93]-[94], [100] |
Catchwords: | SUCCESSION – FAMILY PROVISION – Extension of time – where delay in bringing application for family provision – where no evidence as to a satisfactory explanation for the delay but delay is short – where no prejudice as a result of the delay – where there is an arguable case for provision – extension of time granted. SUCCESSION – FAMILY PROVISION – Where no provision was made for the plaintiff under the will – where plaintiff is the adult son of the testator, is bankrupt, has a form of leukaemia and was living with the testator at the time of her death – where primary beneficiary under the will accepts provision ought be made – consideration of what constitutes proper provision. |
Legislation Cited: | Administration and Probate Act 1929 (ACT) s 43 Family Provision Act 1969 (ACT) ss 7, 8, 9 Wills, Probate and Administration Act 1898 (NSW) s 46 |
Cases Cited: | Brunoro v Brunoro (No 3) [2016] ACTSC 189 Camernik v Reholc [2012] NSWSC 1537 Vigolo v Bostin [2005] HCA 11; 221 CLR 191 |
Parties: | John James Talent (Plaintiff in SC 414 of 2019; Defendant in SC 557 of 2019) Nadia Joan Talent (Second Defendant in SC 414 of 2019; Plaintiff in SC 557 of 2019) |
Representation: | Counsel T Crispin (Plaintiff in SC 414 of 2019; Defendant in SC 557 of 2019) D Moujalli (Second Defendant in SC 414 of 2019; Plaintiff in SC 557 of 2019) |
| Solicitors Ray Swift Moutrage & Associates (Plaintiff in SC 414 of 2019; Defendant in SC 557 of 2019) Gil-Jones Barker Solicitors (Second Defendant in SC 414 of 2019; Plaintiff in SC 557 of 2019) | |
File Numbers: | SC 414 of 2019 & SC 557 of 2019 |
McWilliam AsJ:
Before the Court are two disputes involving a brother and a sister, John James Talent and Nadia Joan Talent, being the only living children of the late Joan Gwen Talent (the Testator), who died on 8 August 2018.
The Claims
The first claim is for family provision, brought by Mr Talent against his sister in her capacity as sole executor of the Testator’s final will, which was executed on 15 March 2018 (the Will).
The second claim is brought by Ms Talent, in her role as sole executor of the Will and trustee of the Testator’s estate (the Estate), seeking possession of the Testator’s former residential home, where the Testator lived with her son up until her death, and where Mr Talent has continued to reside in the period following.
The Parties
For ease of reading and without any intended disrespect, I will refer to each of the parties as John and Nadia, given that witnesses with the same surname have also given evidence in the proceedings, being the father of the parties, John Alfred Talent (Snr) (Mr Talent Snr) and one of John’s adult sons, Mishka Talent.
Since 2000, John has been an undischarged bankrupt. The Official Receiver was originally also a defendant to John’s application for family provision. The Official Receiver was an interested party for the purposes of these proceedings because there were some outstanding matters to be resolved before a discharge of the bankruptcy could be made. That aspect of the proceedings has been cross-vested to the Federal Court of Australia, pursuant to orders made by Crowe AJ on 3 October 2019.
There is no issue arising as to other potentially interested persons who might have sought to bring their own claims or be joined as parties to these proceedings. The Family Provision Act 1969 (ACT) (FP Act) does not require that other eligible persons be notified when proceedings are commenced for family provision, but John has confirmed that his four sons are aware of the proceedings through their contact with him, and one of John’s sons has given evidence. The only other potentially interested party is the Testator’s former husband, Mr Talent (Snr), who also gave evidence in these proceedings and has not made his own claim. Although he was no longer married to the Testator, Mr Talent (Snr) came to a rapprochement with the Testator and they developed a close friendship in the later years of her life.
The Will and the Estate
It is uncontroversial that John has been left nothing under the Will. The terms of the Will made provision for gifts of $10,000 to be given to each of the Testator’s four grandchildren (John’s sons), with the remainder of the Estate left to Nadia.
The Estate largely comprised:
(1) a residential property in the suburb of Ainslie in the Australian Capital Territory (Ainslie property) currently valued at $1.1 million;
(2) savings held in two Commonwealth Bank of Australia accounts (CBA accounts), initially of more than $300,000;
(3) superannuation in the sum of $328,143;
(4) a motor vehicle valued at $2,000; and
(5) the Testator’s personal belongings of an estimated value of $1,000.
There was some evidence and argument during the course of the proceedings about a series of Indian paintings. Mr Talent Snr said that they belonged to him and did not form part of the Estate. Neither John nor Nadia (as executor) sought any declaration that the paintings formed part of the Estate and Mr Talent Snr was not a party to these proceedings. He would have had to be joined before any finding about the ownership of the paintings could be made. It is therefore unnecessary to traverse that matter further.
There has been a partial distribution of the Estate, in that the specific gifts have been paid to each of the beneficiaries, and an amount of $50,000 has been paid to cover rates and other outgoings on the Ainslie property. These amounts were paid from the CBA accounts. Further, an amount of approximately $202,200 has been transferred into Nadia’s solicitor’s trust account, also paid from the CBA accounts. Accordingly, as the distribution of the specific gifts under the Will is not affected in any way, it was not necessary to join the grandsons to the proceedings.
The Estate’s ongoing legal costs of the proceedings have also been paid. To date, they total in excess of $306,000.
The current value of the cash funds of the Estate held in trust is $228,200. When that is added to a value of the Ainslie property of $1.1 million, the distributable estate is $1,328,200.
From that there are further potential expenses to be deducted. These include an estimated $33,000 in the costs of sale for the Ainslie property, and the legal costs of the parties, assuming for the moment that each are paid from the Estate. The anticipated additional legal costs for Nadia (being those of the final hearing) are estimated to be $75,000, and the total legal costs for John have been estimated at approximately $100,000.
Assuming (without yet deciding) that all legal costs are paid out of the Estate, the estimated net distributable value of the Estate is likely to be in the order of $1,120,200.
The Court’s power
The primary proceedings concern John’s family provision application, under the FP Act. Section 8 of the FP Act sets out the circumstances in which a court may make an order for provision out of a deceased’s estate, and the relevant factors that a court must consider if such provision is to be made. It is in the following terms:
8Family provision orders
(1)On application by a person entitled, under section 7, to apply for provision out of the estate of a deceased person, the Supreme Court may order that the provision as that court thinks fit be made for the applicant out of the estate.
(2)The Supreme Court shall only make an order under subsection (1) if satisfied, in consideration of the criteria set out in subsection (3), that as at the date of the order, adequate provision for the proper maintenance, education or advancement in life of the applicant is not available—
(a)under the will of the deceased; or
(b)if the deceased died intestate—under the law applicable to that intestacy; or
(c)under that will and that law combined.
(3)The criteria for the Supreme Court’s decision under subsection (2) in relation to the deceased and the applicant are as follows:
(a)the character and conduct of the applicant;
(b)the nature and duration of the relationship between the applicant and the deceased;
(c)any financial and non-financial contributions made directly or indirectly by or on behalf of either or both the applicant and the deceased to the acquisition, conservation or improvement of any of the property or financial resources of either or both persons;
(d)any contributions (including any in the capacity of homemaker or parent) by either the applicant or the deceased to the welfare of the other, or of any child of either person;
(e)the income, property and financial resources of the applicant and the deceased;
(f)the physical and mental capacity of the applicant, and the deceased (during his or her life), for appropriate gainful employment;
(g)the financial needs and obligations of the applicant and the deceased (during the life of the deceased);
(h)the responsibilities of either the applicant or the deceased (during his or her life) to support any other person;
(i)the terms of any order made under the Domestic Relationships Act 1994, section 15 with respect to the property of the applicant or the deceased;
(j)any payments made to either the applicant or the deceased by the other, under an order of the court or otherwise, in respect of the maintenance of the other person or any child of the other person;
(k)any other matter the court considers relevant.
(4)The Supreme Court may regard an application for provision out of the estate of a deceased person by a single person as an application made on behalf of all the persons entitled to make applications for provision out of the estate of the deceased person.
John relies on ss 8(1) and 8(2)(a) of the FP Act on the basis that adequate provision for the proper maintenance, education or advancement in life of the applicant is not available under the Will.
The claim for possession of the Ainslie property does not identify the power of the Court being invoked in either the Originating Application or the Statement of Claim. The Court has power to make an order for possession in favour of an executor of an estate in a number of ways. Under s 43 of the Administration and Probate Act 1929 (ACT), the rights of executors in relation to the real estate of a testator are the same rights as those accorded to executors in New South Wales immediately before 21 October 1929 (being the date that Act commenced). At that stage, the Wills, Probate and Administration Act 1898 (NSW) applied, s 46 of which entitled an executor, to whom probate had been granted, to exercise the power of sale, which presumably included the ancillary power to seek possession for that purpose, or alternatively founded a common law action for ejectment.
A more straightforward source of the power also exists under s 92(1) of the Trustee Act 1925 (ACT). That section provides for orders to be made concerning any property subject to a trust on application by any person with an interest in the property. Although the Originating Application was not expressly an application pursuant to this section, s 91 of the Trustee Act states that if in any proceeding in the Supreme Court, the facts proved would entitle the Court to make an order on an application under the Trustee Act, the Court may make the order without requiring a separate proceeding to be begun, and such order is taken to be made on an application under the Trustee Act.
The Issues for resolution
As a preliminary hurdle, the FPAct provides that family provision proceedings must be commenced within six months of the date of probate being granted. In this case, probate was granted on 7 February 2019, and the present application was made on 21 August 2019, namely two weeks outside of that time limit.
Otherwise, there is no dispute that John is a person eligible for family provision: see s 7(1)(c) of the FP Act. Nadia has also not put in issue that some provision ought to be made for her brother, given his current personal circumstances and the fact that the terms of the Will left him nothing.
The central issue here is what provision is appropriate, having regard to the considerations set out in s 8 of the FP Act above. At the outset, John sought a life estate in the Ainslie property. However, in light of the reduced amount available in the Estate, this claim was abandoned on the second day of the hearing and John now seeks provision by way of financial adjustment out of the Estate.
Further, while John accepts that his claim for a life interest in the Ainslie property cannot be maintained, he also does not seek to deprive Nadia of the entirety of her entitlement under the Will. Because any current cash reserves are likely to be used for the payment of legal costs, the parties agreed that the Ainslie property must be sold if the Court is to preserve some entitlement for Nadia as well as to make any adjustment in John’s favour by way of family provision.
That in turn affects the resolution of Nadia’s application for possession, with the remaining issue being how long John ought to be allowed to remain in the Ainslie property prior to it being sold.
The issues for consideration are therefore as follows:
(1) whether an extension of time in which to bring an application for family provision should be granted;
(2) what constitutes adequate provision for John’s proper maintenance, education or advancement in life; and
(3) how long John is able to remain in possession of the Ainslie property until it is sold.
In respect of the last issue, interlocutory injunctive relief has previously been granted in this Court on 15 November 2019, the effect of which was to prevent the Ainslie property from being sold or otherwise transferred out of the Estate and to permit John to reside in the Ainslie property in the meantime. On 13 December 2019, Murrell CJ made orders extending the interlocutory relief until 4:00pm on the hearing date, which was understood by the parties as being the first day of the substantive hearing. At the commencement of this hearing, the parties again revisited the question of the injunction, and a further interlocutory order was made extending the operation of the orders of Murrell CJ made on 13 December 2019 to 4.00pm on the date that reasons for judgment are delivered.
Should an extension of time be granted?
The power to extend time under s 9(2) of the FP Act is discretionary. The plaintiff bears the onus of showing sufficient cause for an extension of time to be granted: Roberts v Stern [2017] ACTSC 182 at [12]. It is necessary to satisfy the Court that the circumstances are such as to make it unjust for John to be penalised for bringing an application for family provision out of time. Moreover, as John is seeking an indulgence, the application for an extension of time should be made promptly: Re Guskett (1947) VLR 28 at 214 per Herring CJ.
In the present case, the application for an extension of time was made as part of the Originating Application and the parties have agreed to have the matter dealt with as part of the substantive proceedings, apparently with a view to saving costs. Given the application was only two weeks out of time, this was an appropriate course.
While the Court’s discretion is unfettered, it is to be exercised judicially. In deciding whether or not to grant an extension of time, the Court may consider the sufficiency of the explanation for the delay, the strength of the case if an extension of time were granted, and any prejudice to other beneficiaries which might arise from the delay: Smith v Public Trustee of the Australian Capital Territory [2012] ACTSC 4; 6 ACTLR 126 at [16].
There was no evidence explaining the delay. Upon raising this with counsel appearing for John, what seems to have happened is that the legal representatives were either not aware of, or not focused upon, the looming six-month deadline created by the FP Act. As I said at the hearing, it is important that proper attention be paid to statutory limitation periods, particularly by legal representatives engaged by a person before a limitation period expires. Practitioners are expected to be proactive about such matters, and if an extension is required, an application for such an order should be made before the time stipulated in the statute has passed (see s 9(3)(b) of the FP Act), not as an adjunct to any claim after the relevant limitation date has passed. Seeking consent to such an order from an executor before the time limit has expired is plainly preferable, and likely to be less costly, to seeking his or her forgiveness afterwards. The Court’s discretion to extend the period to bring a claim under the FP Act includes taking into consideration the efficient administration of estates following a grant of probate, which very much depends upon any claims to be made on the estate being brought forward in a timely manner. Even a short delay outside what the legislature has determined is an appropriate time limitation can have significant consequences, as there is no power at all to extend the time if an estate has been distributed in the meantime: s 9(4) of the FP Act.
Fortunately for John, although there has been partial distribution, Nadia does not raise particular prejudice over and above the consequent delay in finalising the administration of the Estate. The family provision claim has previously been found to have sufficient merit to grant interlocutory relief and the case has now been fully argued, where it was not contested that some family provision is appropriate. Accordingly, the Court’s discretion should be exercised in John’s favour, to extend the time in which to bring the application, and an order will be made that pursuant to s 9(2) of the FP Act, the time for the plaintiff to apply for provision out of the estate of the Testator be extended to 21 August 2019.
What is the appropriate provision for the plaintiff?
It has been accepted that ‘adequate provision’ has not been made for the proper maintenance, education or advancement in life of John. The Court’s task is thus to make such order as it ‘thinks fit’. However, that broad discretion is exercised by reference to the words of the statute. Accordingly, the Court assesses what is ‘adequate’ and for a claimant’s ‘proper maintenance, education and advancement’ in the particular circumstances of the case. As stated in Vigolo v Bostin [2005] HCA 11; 221 CLR 191per Callinan and Heydon JJ, at [122]:
… Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances ... The age, capacities, means, and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors.
In some cases, the size of the estate will be a critical factor, such that when all the considerations are accounted for, it will be difficult for the Court to make any adjustment that would be viewed as maintaining the position of a claimant, let alone advancing it.
It must also be remembered that an order for provision is not to be exercised according to “idiosyncratic notions of what is thought to be fair or in such a way as to transgress, unnecessarily upon the [deceased’s] freedom of testation”: McKenzie v Topp [2004] VSC 90 at [63] per Nettle J; and Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 19 per Dixon CJ.
In Slack v Rogan; Palffy v Rogan & Anor [2013] NSWSC 522; 85 NSWLR 253; White J (as his Honour then was) referred at [127] to the fact that although the statute permits interference with the freedom of testamentary disposition, the judgment of a competent testator as to what provision is adequate for a person’s proper maintenance and advancement in life should be respected, it if can be seen that the testator has given due consideration to the claims on his or her estate, in recognition that the testator is better placed to make such a judgment, citing Taylor J in Stott v Cook (1960) 33 ALJR 447 at 453-454. The authority of Revell v Revell [2016] NSWSC 947 per Pembroke J at [8] is to the same effect. Those decisions related to an equivalent provision in NSW legislation, namely s 59 of the Succession Act 2006 (NSW), but the terms of the legislation are similar. In particular, the NSW legislation uses that same language of considering what is ‘adequate provision for the proper maintenance, education or advancement in life’ of a person and the discretion given to the Court is to make such order as the Court ‘thinks fit’.
Particular consideration should be given to what is meant by the word ‘proper’. In Goodman v Windeyer (1980) 144 CLR 490, Gibbs J said at 502:
[T]he words 'adequate' and 'proper' are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards.
In Sgro v Thompson [2017] NSWCA 326, White JA (with whom McColl and Payne JJA agreed) stated 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) [of the Succession Act 2006 (NSW)] 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.
In Ford v Simes [2009] NSWCA 351, Bergin CJ in Eq discussed testamentary freedom in circumstances relevant to the present case, namely where one sibling has been left the entirety of the residue and the other nothing at all, stating at [71]:
... it is very important for the maintenance of the integrity of the process in these types of applications that this court acknowledge once again the entitlement of testators, in certain circumstances, to make no provision for children.
Here, the claim is made by an adult child. While the Court does not accept too readily, or otherwise assume, that all children should be treated equally (see Phillips v James [2014] NSWCA 4; 85 NSWLR 619 per Basten JA at [113]) there has been discussion in the authorities of principles that may be useful where claims by adult children are made. In Camernik v Reholc [2012] NSWSC 1537, Hallen J stated at [159]:
…
(a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.
(b) It is impossible to describe in terms of universal application, the obligation, responsibility, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his, or her, children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801.
(c) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death if he or she is able to do so. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute: Taylor v Farrugia.
(d) If the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant: Re Buckland Deceased [1966] VicRp 58; [1966] VR 404 at 411; Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 148; Goodman v Windeyer at 498, 505. But the Act does not permit orders to be made to provide for the support of third persons to whom the applicant, however reasonably, wishes to support, where there is no obligation to support such persons: Re Buckland Deceased at 411; Kleinig v Neal (No 2) [1981] 2 NSWLR 532 at 537; Mayfield v Lloyd-Williams, at [86].
(e) There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker; Kleinig v Neal (No 2), at 545; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45.
(f) The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 (28 August 2003) at [181], [182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant: Marks v Marks[2003] WASCA 297 at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 at [17].
(g) The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd at 149.
These principles are not to be read as confining the statutory discretion, but they usefully summarise and reflect considerations that courts in a variety of jurisdictions have seen fit to apply.
In determining the appropriate provision for John, the parties formulated their arguments by reference to each of the relevant subsections set out at s 8(3) of the FP Act. The same approach has been taken in the reasoning below.
Character and conduct of the plaintiff and relationship with the Testator – ss 8(3)(a) and 8(3)(b)
The parties submitted that the considerations set out in ss 8(3)(a) and 8(3)(b) of the FP Act overlap substantially and so may be considered together.
John lived with the Testator in her home in Ainslie from at least 2013 to the Testator’s passing in 2018. John’s evidence was that the relationship between him and the Testator was grounded in mutual respect between a devoted mother and a devoted son. While Nadia does not disagree with that proposition, she says that John did cause the Testator distress and, at times, disrespected her wishes.
John described his relationship with the Testator as “loving and caring”, deposing to the fact that he and the Testator shared academic interests, a love of the arts, and both had a “deep interest in food plants”. He and the Testator would go to local events together and kept each other company at home.
The unchallenged evidence of family friends, Ms Jane Salmon and Mr Phillip Cormack, provided some corroboration of the positive nature of John’s relationship with the Testator. Ms Salmon described John and the Testator as being an “unbreakable unit”, and Mr Cormack described the relationship as being “based on mutual respect and a positive regard for each other”.
Nadia’s evidence and that of Mr Talent Snr provided a different perspective. They gave examples of where they believed John had been cruel to his mother, including in his care of her in her declining years. Mr Talent Snr’s evidence may be generally described as scathing of John’s lifestyle, family relations and his financial choices. Both spoke about all the money John had borrowed from his mother over the years.
John’s treatment of the Testator’s house and garden was evidently a point of tension in the relationship between him and the Testator. Nadia’s evidence was that John turned her mother’s garden into a junkyard and disrespected the Testator’s wishes in so doing. That conclusion is supported by photographs of the Testator’s property and the evidence of another family friend, Ms Jean Andrews. Both Nadia and Ms Andrews described John’s use of the Testator’s house and garden, including the parked vehicles on the garden and the “creeping tide of stuff” that filled the Testator’s house, as causing the Testator significant distress.
Whether family member or family friend, the fact is that each was a spectator on a relationship that had its ups and downs, and their respective views will be coloured by how the Testator presented the relationship at any particular time. For example, Nadia was overseas for much of the time that the plaintiff and the Testator lived together. Her evidence may accurately reflect complaints her mother made to her during regular phone conversations, but such telephone calls may not have included other more joyful or caring moments. Loving family relationships come in a variety of forms, and experience suggests that often the closest relationships are also sources of great tension and stress.
Even accepting the at times fraught nature of John’s relationship with his mother, no disentitling conduct has been raised against John.
Financial and non-financial contributions – s 8(3)(c)
John says that he made contributions to the Ainslie property, including undertaking “considerable yard work” involving the laying of 100 railway sleepers in the Testator’s front garden, and helping the Testator renovate the Ainslie property and move into it.
Nadia says that the Testator made numerous financial contributions to John through the provision of several interest free loans between 1985 and 2000, amounting to approximately $125,706.39. An earlier will prepared by the Testator in 2001 had a schedule attached to it, which set out loans totalling that amount.
There was, however, some difficulty in calculating the exact amount owed by John to the Testator. John’s ‘Statement of Affairs’ records that he owed approximately $80,000 to the Testator. Little weight can be placed on that document, as it was prepared in May 2020 by John as a summary of his financial position back in 2000, entirely without reference to documents and with a view to seeking discharge of the bankruptcy in the extant proceedings in the Federal Court. It was the failure to provide such a document that appears to have been the sole reason for John remaining in bankruptcy for more than two decades.
Another document in evidence, entitled ‘Summary of financial transactions between Joan Gwen Talent and John James Talent’, records that John owed the Testator $160,000. It was prepared by the Testator in May 2001 as a Proof of Debt in the bankruptcy. However, in the ‘Office Use Only’ section of the Proof of Debt form, signed by the trustee in bankruptcy, there is a handwritten note stating that the Proof of Debt form was not processed due to the terms of a deed of settlement/release dated 25 September 2002. That note is consistent with John’s evidence to the effect that the loans made by the Testator were repaid either in full, or with only $5,000 outstanding.
John also says that he paid his disability support pension (pension), which is currently $460 per week, into the bank account of the Testator, which constitutes an annual financial contribution of just under $24,000. It is unclear if the weekly payments of the pension were made as a repayment of the loans, or as board for living with the Testator. Nadia submits (and I accept) that the payments of the pension can be either a repayment of the loans or payment of board, but cannot be characterised as both. Nadia also submits that even if the payment was characterised as board, the amount of $460 per week was substantially less than what would have been the market rental value of the property over that time (relying on the expert evidence of Mr Ridley, a certified property valuer, to support this submission).
Nadia does not seek repayment of the loans as part of gathering in the Estate. Whatever the final status of the loans, the evidence establishes that John received the benefit of having loaned funds for a substantial period of time, interest free. He also benefitted, in terms of his financial resources, from using the Testator’s property between 2013 and August 2018, and having sole occupancy of the Testator’s property since she died, which is effectively a provision of rent-free accommodation by the Testator to John from August 2018 to the present – a period of more than two years. This is a significant non-financial contribution made by the Testator to John, which continued after the Testator’s death.
Accordingly, in determining what is ‘proper’, I have taken into account the considerable long-term benefit derived by John from having the use of the Testator’s property either at a significantly reduced board, or rent free: see Brunoro v Brunoro (No 3) [2016] ACTSC 189 at [243].
Welfare contributions – s 8(3)(d)
I have also had regard to the domestic assistance John provided to the Testator. This included cooking for the Testator, undertaking housework and taking the Testator to appointments and social engagements with her friends. John submits that, although there were times when he was unable to look after the Testator due to his own ill-health, in his view, the Testator stayed at home for as long as she did because of the care he provided to her.
Nadia submits (and this is supported by the evidence of Ms Andrews) that the Testator only required the domestic assistance John claims he provided in her final year of life. Ms Andrews recalled the Testator being able to drive herself to appointments and run errands up to the last year of her life. There was also evidence to the effect that the Testator received domestic assistance from other people, such as Nadia, the Testator’s friends and the housekeeper.
John did not put his case as high as him being the sole carer for the Testator, and there was obviously some domestic assistance provided, but I am not satisfied that it was of such magnitude or for such a lengthy period of time as to have a significant bearing on the overall assessment of the amount of provision to be provided.
Financial resources of the plaintiff – s 8(3)(e)
As stated above, John is an undischarged bankrupt. He has minimal assets, comprising motor vehicles and some “technical equipment”, with an approximate value of between $9,000 and $11,000. His pension, as almost the sole source of income, has already been referred to above. Nadia does not dispute John’s poor financial circumstances but does point out the lack of evidence around why the plaintiff was in his current financial situation.
John submits that the Court should not view his “lack of financial success” as meaning that the Testator did not owe a duty to him, relying generally on Hughes v National Trustees, Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134 (Hughes) and Hunter v Hunter (1987) 8 NSWLR 573.
In Hughes, Gibbs J stated at 148, in respect of an adult son (citations omitted):
Clearly enough he has not been a successful farmer – perhaps he has been lazy and improvident – but an order under testator’s family maintenance legislation is not made as a reward for effort or success. As Philp J said in his dissenting judgment in Re Hatte:
“…I do not think that the Legislature intended that provision under the Act should be given rather to those who are efficient and successful than to those who are not. A just father’s moral duty is to assist the lame ducks amongst his offspring, provided they be not morally or otherwise undeserving.”
That may be so, but a just parent’s moral duty to assist the ‘lame duck’ may have been well and truly discharged during a testator’s lifetime. The legislature has expressly provided in the FP Act that the Court must consider the contributions made while a testator was alive.
This argument emphasises why testators are generally in a superior position vis-a-vis a court to determine what is ‘just’, ‘adequate’ and ‘proper’. Through the allocation of his or her assets upon death, a testator may wish to even up the ledger, as it were, by leaving a greater proportion, or even the entirety, of the estate to a child who has asked for nothing and/or received nothing during the testator’s lifetime.
John’s lack of financial resources is clear. The reasons for that current state of affairs are not, but there is sufficient evidence to establish that there have been poor financial decisions in John’s past and a significant reliance on his mother’s generosity, which has already been referred to above. One of the decisions affecting John’s financial circumstances relates to John’s ongoing bankruptcy status. It appears that the only reason the bankruptcy appears to have extended as long as it has is John’s failure to file a statement of financial affairs for many, many years.
There are also likely to have been a number of contributing factors to the present financial position, such as relationship breakdowns and health issues, although the evidence did not descend in any level of detail to the various reasons leading to John’s present poor financial position. To some extent, the insufficiency in the evidence affects John’s justification for the claim in terms of assisting the Court to make an evaluative assessment of what is ‘proper’.
The view that I have formed in relation to John’s financial resources is that they are poor and they should be given weight, but that the lack of resources is not determinative of a greater adjustment otherwise being made when balanced against some of the other considerations, in particular that of the Testator’s financial contributions to her son over his and her lifetimes.
Capacity for employment – s 8(3)(f)
John is 63 years of age and suffers from a chronic form of leukaemia. He says that he has minimal prospects of obtaining gainful employment. That is accepted.
Nadia does not dispute that John has a limited capacity for gainful employment, nor that his medical condition will impact his ability for employment. However, she submits that John’s medical condition has its ups and downs, and does not always incapacitate him. She points to the medical evidence that the current medication John is taking has been successful in giving John an ability to live a better quality of life, which in turn would influence what he can do.
Given his age, the length of time John has been out of the workforce, his health and of course, the current difficult employment climate, it is fair to say that John is unlikely to have work in the immediate future. He may have an ability to seek out an income sporadically, but it is unlikely to be substantial, or even adequate to sustain basic living expenses. The consideration supports a sizeable adjustment.
Financial needs – s 8(3)(g)
John says that as the Ainslie property will be sold, he will need to find new accommodation. Any new residential property should have enough space to hold his belongings and allow his sons to visit. He also says that he would like a space for gardening. He agrees that it may not be possible for him to stay in the suburb in which he currently lives (due in large part to the dwindling size of the estate).
John also says that if he were able to purchase a property with more than one bedroom, he would have the ability to rent out any additional rooms, which could provide him with income.
John has also made a somewhat speculative claim for provision based in part on the possibility that his current free medical treatment (paid for under a Compassionate Access Scheme) might cease to be free in the future. He accepts that he cannot make a claim for medical costs, but rather asks that the possibility of future medical expenses be generally taken into consideration when exercising the discretion under the FP Act.
Nadia agrees that John will need sufficient provision to purchase a residential property, but she does not agree that it needs to be large enough to rent out additional bedrooms or for his adult sons to visit overnight. It was submitted that at best, the evidence established that John desired a two bedroom unit, not that he needed anything larger than a one bedroom unit, drawing an analogy with a similar factual situation in Smith v Johnson [2015] NSWCA 297 at [85]. I accept that submission.
Responsibilities to support other persons – s 8(3)(h)
John would like to leave some form of legacy to his four adult sons. He agreed that any property purchased with provision out of the Estate would provide such a legacy.
The desire to leave something to one’s own children after a parent passes is an understandable wish, but it does not substantively advance a claim for family provision.
I am not convinced that simply having assets available to leave to one’s children once a claimant dies is the type of consideration the legislature had in mind when requiring the Court, in determining to interfere with the terms of a will, to have regard to any obligation to support other persons.
None of John’s sons are living with him and there was no evidence that they are dependent upon him or have any particular medical needs requiring assistance. John may have a desire to ultimately advance their financial positions, but he does not have a present responsibility to support anyone.
Any order made under the Domestic Relationships Act 1994 – s 8(3)(i)
This consideration does not apply here.
Payments made in respect of the maintenance of other persons or children – s 8(3)(j)
There was evidence before the Court that while the Testator was alive, she also directed that Nadia pay (with the Testator’s funds) John’s unpaid child support obligations, which were approximately $30,000. I accept that evidence.
The payment of what was a long outstanding child support debt on behalf of John might have been characterised as a further contribution under s 8(3)(c) above. I have taken it into account separately here. It is yet another example of the Testator doing whatever she could to assist her adult son with his financial affairs while she was alive.
Other matters the Court considers relevant – s 8(3)(k)
It will be apparent from the foregoing reasons that one of the ‘other matters’ I consider to be relevant in this case is the evidence of the testamentary intentions of the Testator, including evidence of statements made by her (in an earlier will and to her family members). By way of comparison, s 60(2)(j) of the Succession Act 2006 (NSW) expressly provides for the Court to consider such matters in that jurisdiction. While the FP Act here does not expressly include such a mandatory consideration, I consider the words ‘other matters’ to be broad enough to encompass this evidence.
I have already discussed that I consider it relevant to take into account the Testator’s freedom to dispose of her estate as she thought was ‘proper’. There was some hearsay evidence about what lay behind the Testator’s lack of any provision for John in the Will. However, the evidence was conflicting.
Nadia’s evidence (consistent with that of Mr Talent Snr, discussed below) was that the Testator had said she did not want to leave John any money, as this would be like “throwing confetti off a fast-moving train”. John on the other hand argued that while the Testator may not have directly provided for him in the Will, there was an informal agreement within the family that he would be properly taken care of, presumably by Nadia.
The evidence does suggest that the Testator was someone who took account of every dollar given to John over the years, and who was keen to ensure financial equality among siblings, so that amounts lent by family members were repaid. In the Testator’s previous will dated 8 February 2001, she has written (emphasis added):
All income and expenses resulting from my interests in real estate shall go to my husband John Alfred Talent for the period of his lifetime. Upon his death or if he predeceases me, the income and expenses shall be shared equally between my son John James Talent and my daughter Nadia Joan Talent. How this is to be done may be negotiated between them, i.e. the properties do not necessarily have to be sold; Nadia and John may come to some mutually satisfactory agreement concerning their use and management. Any other property shall be shared equally between them in whatever way seems appropriate and is agreed to by them.
At the time of signing this will, my son John James Talent owes some money to me. If he is still in debt to me at the time he inherits his portion of my estate, the amount he then owes shall be deducted from his share of my estate. A list of his debts is appended to this document; I intend to update the list as necessary.
…
If my son John James should predecease me, my estate shall be divided between my daughter Naida and the direct descendants, or their estates, of my son John James, any outstanding debt John still owes me being deducted from their share.
At this stage, the Testator knew that her son was bankrupt. The emphasised passages give some idea of a mother who may have expected to continue providing for her son, and who intended to include further loans. The Testator also wanted the money loaned to be repaid even after John had died.
Now, it must be emphasised that what the Testator thought in 2001 may well have changed by 2018, and there was a significant change in John’s circumstances in the intervening period, but in that regard, there is before the Court, Mr Talent Snr’s evidence, part of which is as follows at [27]-[29]:
On several occasions including the last time Joan and I met, which was just a few weeks before her death, she brought up the subject of her will. Joan was emphatic about how she wanted things to be and why.
She repeatedly and emphatically insisted that, because of John’s irresponsible behaviour with regard to his miscellany of female partners and the vast number of individuals (including herself) from whom he had obtained loans of money without repaying the loans (other than in minor ways, if at all), his brushes with the law, and his eventual and continuing bankruptcy for not paying taxes to the Australian Taxation Office for 10 or 12 years, the fact that he had lived with her and sponged off her for about six years and turned her beloved home into a pigsty that she was adamant that she did not want to leave her beloved home to him or let him have anything to do with it or have any interest in it after her death. Nor did she want to leave any of her hard-earned reserves of cash to him. She was fond of saying to me about John: ‘He’s completely irresponsible when it comes to money. Giving him any is like throwing confetti off the back of a train.’
Joan instead told me that she preferred to leave such matters in the hands of someone in whom she had 100% trust, namely our daughter Nadia. Joan told me that Nadia had given her word that, if John had untoward expenses such as health issues that could not be addressed in a public hospital that she would take care of them to the best of her ability, and would set John up with accommodation elsewhere, facilitating the cleaning up and renovation of Joan’s house and the cleaning up and regeneration of her beloved garden that had gone to ruin, before putting it on the market.
As admitted by Mr Talent Snr, he and his son had a poor relationship and Nadia did not place any reliance on the above evidence. In any event, the Testator’s intention was manifest from the lack of provision for him in the Will, made within months of the Testator’s death. John was not left out of the Will by mistake, but the reasons for the Testator’s intention are only one consideration for the Court in determining what ought to happen next.
I have set out the evidence above because, although it was not relied upon by Nadia as any disentitling conduct or as supporting any other adverse finding, it nevertheless speaks to circumstances relevant to what might be provision for John’s ‘proper’ maintenance, and in particular, it reveals the Testator’s view that, although no provision was made for John under the Will, Nadia would make sure John was set up in accommodation elsewhere. That is consistent with Nadia’s present intention and it influences the Court’s consideration of what provision is proper for John’s maintenance and potentially his advancement.
Weighing the considerations
The present case is a salutary warning to parties involved in litigation for family provision. The legal costs of the case, discussed above, are out of all proportion to the size of the Estate and have greatly affected the relief sought over the course of the proceedings. No one appears to have given any consideration to that matter until during the hearing, when affidavits as to costs were raised by the Court and it was belatedly accepted that the Ainslie property must be sold.
This is not a case where John’s needs are so great that, taking account of the other considerations referred to above, it would be appropriate to make provision out of the Estate for him to receive the entirety of the residue. John does not seek that order.
It is, however, a case where substantial provision should be made in light of John’s dire circumstances. Nadia contends that the appropriate provision is an order of 30 per cent of the net distributable value of the Estate, which currently represents approximately $375,000. On the evidence before the Court, that is sufficient to enable John to purchase a one bedroom residential property in a number of suburbs in Canberra.
Counsel for Nadia, experienced in this area of the law, has submitted that such a percentage, taking into account all of the above circumstances, is generous. Indeed, he went so far as to say that in light of the discretionary considerations, a lower percentage may have been warranted and but for his instructions, he would have submitted a lower percentage figure by way of financial adjustment.
In making provision for John that is sufficient for him to establish himself in secure accommodation, John will be assisted with his maintenance in his later years. Such provision may also be seen as an advancement, in that (subject to being discharged from bankruptcy) he will own property through the Testator’s legacy, when he has been unable to even afford to independently rent anywhere for many years. He will also have an asset to leave to his children, or to deal with in later years so as to avoid him becoming destitute. In light of the greatly reduced value of the Estate, an adjustment which provides for John to receive 30 per cent of the net residue of the estate would achieve proper provision and an order will be made to reflect that provision.
How long is John able to remain in possession of the Ainslie property?
It follows from the above reasons and resolution of the claim for family provision in John’s favour, but on the basis that the Ainslie property will be sold in order to make such provision, that there should also be an order that Nadia have possession of the Ainslie property within a reasonable timeframe.
However, John will need to have some money to enable him to live elsewhere until those funds become available. The state of the Ainslie property is such that John will need to vacate it in order to allow work to be undertaken to properly present it for sale. The extent of those works is uncertain on the evidence, and I am mindful that there may be an intervening Christmas period before the house is able to be placed on the market.
Given that there are some cash resources in the Estate, the appropriate course may be for distribution to be made to John in two tranches. The first tranche would comprise an amount payable within 14 days of the making of final orders in these proceedings, being a sum that was sufficient to allow John to vacate and at least rent a property within six weeks of final orders being made. Given the volume of possessions, the length of time John has been residing in the Ainslie property, and his current state of health, he is likely to need at least that period of time to vacate. The balance of the monies payable in accordance with provision of 30 per cent would be able to be determined and paid following the sale of the Ainslie property, once all the expenses of the estate have been taken into account.
I will refrain from expressing a concluded view about the timing of any order for possession, as I consider that the better course, at least in the first instance, is to allow the parties an opportunity to craft the proposed form of any relief in light of these reasons.
Conclusion and Orders
There was also some uncertainty as to the timing of the bankruptcy proceedings in the Federal Court. The Court was informed that the Official Receiver had not opposed an application for the discharge of his bankruptcy upon the filing of certain documents. John’s strong preference was for those proceedings to be brought to a conclusion prior to the Court making final orders in these proceedings. Nadia did not oppose that course.
The parties also wish to be heard on costs before final orders as to costs are made, including whether the costs ought be paid out of the Estate. Given the amounts that have been expended to date, it is highly desirable that the question of costs be determined on the papers, as that is commonly a less costly course. Again however, I will hear the parties as to how to proceed further on the outstanding question of costs.
The parties are to bring in short minutes of order to give effect to these reasons.
| I certify that the preceding one-hundred [100] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam Associate: Date: |
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