Thomas v Pickering; Byrne v Pickering
[2011] NSWSC 572
•08 September 2011
Supreme Court
New South Wales
Medium Neutral Citation: Thomas v Pickering; Byrne & Anor v Pickering [2011] NSWSC 572 Hearing dates: 24 & 25 August 2011 Decision date: 08 September 2011 Jurisdiction: Equity Division Before: Hallen AsJ Decision: The Defendant should make available out of the estate of the deceased, a lump sum of $650,000 to purchase accommodation and pay stamp duty and legal costs on purchase, for the Plaintiff, Wendy Thomas. Provision in the form of a Crisp order in respect of such accommodation should be provided to her. Such provision should be in lieu of the provision made for her in the deceased's Will.
Unless any person wishes to make any application for costs, the usual order for her costs, capped at $50,000, should be made.
Upon her death, the estate's share of the proceeds of sale that are obtained from the sale of the property purchased, should be divided into equal shares, one share for each of Allan Byrne, Carmen Sadler and Carolyn Elms.
The Plaintiff, Leslie Byrne, should receive, in lieu of the provision made for him in the Will of the deceased, a lump sum of $165,000. Unless any person wishes to make any application for costs, the usual order for his costs should be made.
The provision for the Plaintiff, Allan Byrne in the Will of the deceased was not inadequate. His Summons should be dismissed.
The Defendant's costs, calculated on the indemnity basis, should be paid out of the estate.
Direct the parties to prepare short minutes that reflect these reasons for judgment. Stand the proceedings over to enable them to give consideration to the terms of the short minutes and to consider the issue of costs.
Stand the proceedings over to a mutually convenient time for the making of orders.
Catchwords: Two different proceedings, in each of which a claim for a family provision order under Chapter 3 of the Succession Act 2006 ("the Act") is made - An order was made that the proceedings be heard consecutively, with the evidence in one being evidence in the other - first application was made by the de facto wife of the deceased - second application was made by three Plaintiffs, each of whom is a natural child of the deceased - leave granted to discontinue one Plaintiff's proceedings and made no order as to costs as she was adopted by other persons after her birth - the Defendant in each proceedings is a solicitor, the executor named in the Will of the deceased to whom Probate was granted Legislation Cited: Bankruptcy Act 1966 (Cth)
Family Provision Act 1982
Succession Act 2006
Succession Amendment (Family Provision) Act 2008Cases Cited: 7Steel Building Solutions Pty Ltd v Wright [2011] FCA 328
Allen v Manchester [1922] NZLR 218
Barna v Barna [2008] NSWSC 1402
Bladwell v Davis [2004] NSWCA 170
Blore v Lang (1960) 104 CLR 124
Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Burton v Moss [2010] NSWSC 163
Campbell v Chabert-McKay [2010] NSWSC 859
Cetojevic v Cetojevic [2006] NSWSC 431
Clark v Burns [2011] VSC 394
Clifford v Mayr [2010] NSWCA 6
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Court v Hunt (NSWSC, 14 September 1987, unreported)
Crisp v Burns Philp Trustee Company Ltd (NSWSC, 18 December 1979, unreported)
Daemar v Industrial Commission of New South Wales (No 2) (1990) 22 NSWLR 178; (1990) 99 ALR 789
Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127
De Winter v Johnstone (NSWCA, 23 August 1995, unreported)
Diver v Neal [2008] NSWSC 304
Durham v Durham [2010] NSWSC 389
Durham v Durham [2011] NSWCA 62
Foley v Ellis [2008] NSWCA 288
Goodman v Windeyer (1980) 144 CLR 490
Gorton v Parks (1989) 17 NSWLR 1
Gosden v Dixon (1992) 107 ALR 329
Hawkins v Prestage (1989) 1 WAR 37
Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134
John v John; John v John [2010] NSWSC 937
Kalmar v Kalmar; estate of Kalmar [2006] NSWSC 437
Kleinig v Neal (No 2) [1981] 2 NSWLR 532
Luciano v Rosenblum (1985) 2 NSWLR 65
McCann v Ward & Anor [2010] VSC 452
McCosker v McCosker (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
McKenzie v Topp [2004] VSC 90
McMaster, Re; Ex parte McMaster [1991] FCA 598; (1991) 33 FCR 70
Mansfield v Mansfield [2003] WASC 214
Marcuola-Bel Estate, Re; Marcuola-Bel v Thi Ly Tran [2005] NSWSC 1182
Marshall v Carruthers [2002] NSWCA 47
Mayfield v Lloyd-Williams [2004] NSWSC 419
Metherell v Public Trustee in its Capacity as Executor of the Estate of the late Patricia Helen Peek [2010] WASC 205
Milillo v Konnecke [2009] NSWCA 109
Moore-McQuillan v Scott [2006] FCA 63; 149 FCR 486
Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306
O'Loughlin v O'Loughlin [2003] NSWCA 99
Permanent Trustee Company v Fraser (1995) 36 NSWLR 24
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9
Puckridge, Deceased, In the Estate of (1978) 20 SASR 72
Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100
Sellers v Scrivenger [2010] VSC 320
Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201
Sitch (deceased), Re the Will of; Gillies v Executors of the Will of Sitch [2005] VSC 308
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Stoker (Trustee), in the matter of Starr (Bankrupt) v Starr [2011] FCA 746
Taylor v Farrugia [2009] NSWSC 801
Vasconelos v Bonetig [2011] NSWSC 1029
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
Walker v Walker (NSWSC, 17 May 1996, unreported)
Webb v Webb; Estate of W E Webb [1999] NSWSC 343Texts Cited: Mason and Handler's "Succession Law and Practice New South Wales" Category: Principal judgment Parties: Wendy Anne Thomas
(Plaintiff in 2010/279524)
Garry Pickering
(Defendant in 2010/279524)
Allan Charles Byrne
(First Plaintiff in 2011/104609)
Leslie James Byrne
(Second Plaintiff in 2011/104609)
Carmen Anne Sadler
(Third Plaintiff in 2011/104609)
Garry Pickering (as executor of the estate of the late Kevin Byrne)
(Defendant in 2011/104609)Representation: Counsel:
Mr R Wilson (Plaintiff in 2010/279524)
Mr M Lawson (Plaintiffs in 2011/104609)
Mr P Cutler (Defendant in 2010/279524 and 2011/104609)
Solicitors:
Resolve Legal (Plaintiff in 2010/279524)
R & M Legal Solicitors & Attorneys
(Plaintiffs in 2011/104609)
Garry Pickering Solicitor & Conveyancer (Defendants in 2010/279524 and 2011/104609)
File Number(s): 2010/279524; 2011/104609
Judgment
HIS HONOUR: These reasons relate to two different proceedings, in each of which a claim for a family provision order under Chapter 3 of the Succession Act 2006 ("the Act") is made. An order was made that the proceedings be heard consecutively, with the evidence in one being evidence in the other.
The Act applies in respect of the estate of a person who died on, or after, 1 March 2009. The Act replaces the Family Provision Act 1982 ("the former Act"), which was repealed, effective from 1 March 2009. A family provision order is an order made by the court, under Chapter 3, in relation to the estate, or notional estate, of a deceased person, to provide from that estate for the maintenance, education, or advancement in life, of an eligible person.
The deceased, whose estate is the subject of the claims, is Kevin Charles Byrne ("the deceased").
The first application was made in the Summons, filed on 23 August 2010, by Wendy Thomas, the de facto wife of the deceased. The second application was made by in the Summons, filed on 31 March 2011. The three Plaintiffs named in that Summons are Allan Charles Byrne, Leslie James Byrne and Carmen Anne Sadler, each of whom is a natural child of the deceased.
At the hearing, counsel appearing for the Plaintiffs sought leave to discontinue the proceedings brought by Carmen (because she had been adopted by other persons after her birth). As there was no opposition to the application for leave to discontinue, and because it appeared that the other parties had not incurred any costs in respect of her claim, I granted leave to discontinue her proceedings and made no order as to costs. The matters proceeded in respect of each of the other Plaintiffs.
The first Summons was filed within the time prescribed by the Act (within 12 months of the deceased's death). However, the second was not. An order is sought by the Plaintiffs in the second Summons that the time for bringing the application should be extended until the date of filing the Summons under s 58 of the Act.
There is no question, in the present case, of any provision being sought by any of the Plaintiffs out of notional estate of the deceased.
The Defendant, in each of the proceedings, is Garry Clifton Pickering, a solicitor, the executor named in the Will of the deceased to whom Probate was granted.
Without any undue familiarity, or disrespect intended, I shall refer to each of the Plaintiffs named in each Summons, and any other family members, by her, or his, given name, in these reasons.
Background Facts - Formal Matters
The following facts are uncontroversial.
The deceased died on 22 October 2009. He was then aged 76 years, having been born in July 1933.
The deceased had been married to Dawn Patricia Byrne. Prior to their marriage, Carmen was born. She was born in May 1956. The other children were born after the marriage of the deceased and Dawn. Carolyn Elms (nee Byrne) was born in August 1962. Dawn died in 1977.
The deceased and Wendy met in about 1993. They did not commence to live together until July 1995, when the deceased moved into a property at Castle Hill owned by Wendy. They lived in the Castle Hill property until the death of the deceased. Wendy continues to reside there, at least, at the present time.
The deceased left a Will that he made on 21 October 2009, Probate of which was granted, by the Supreme Court of New South Wales, to the Defendant, on 27 May 2010.
So far as is relevant, the deceased's Will provided for the payment of funeral, testamentary expenses, debts, and all death, probate, estate, succession and other duties; for some specific gifts of model trains to identified beneficiaries; a specific bequest of the monies held in the ADF Credit Union was made to Keiren Lee Byrne, the disabled son of Allan; a direction was given for the executor to sell the deceased's property at Ryde and to use the proceeds of sale to purchase Wendy's property at Castle Hill, which property was to be held on trust, for Wendy to reside therein for a period of 3 years, upon condition that she paid all outgoings, maintenance and upkeep expenses; after which 3 year period, the Castle Hill property was to be sold and the proceeds of sale were to be divided between Wendy, Allan, Leslie, Carmen and Carolyn. However, Wendy's share was to be paid "to a discretionary trust to be established ... with Wendy being the beneficiary". On Wendy's death, any part of the amount held in the discretionary trust was to be paid to such of her children who survived, and if more than one, in equal shares. The rest and residue of the deceased's estate was divided into four equal shares, one for each of Allan, Leslie, Carmen and Carolyn for their own use and benefit absolutely.
In the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the deceased's estate, at the date of death, was disclosed as having an estimated, or known, gross value of $933,995. No liabilities were disclosed. The estate was said to consist of the Ryde property ($750,000), money held on deposit in current accounts ($180,595), and shares in public companies ($3,400). (I have omitted a reference to the cents and shall continue to do so.)
The amount held, at the date of the deceased's death in the ADF Credit Union account bequeathed to Keiren was $25,963. It has increased, since then, and there is now $27,867, including interest. The Plaintiffs all agree that this amount should bear no part of the burden of the provision, if any, made for any of the Plaintiffs.
It is clear from the evidence of the executor, that the Inventory of Property was incomplete. The deceased was the owner of a collection of trains and train memorabilia, which had some value.
In an affidavit affirmed by the Defendant on 7 December 2010, he reveals that the Ryde property was sold in about July 2010 for $766,000. The net proceeds of sale were $739,771. Other moneys collected amounted to $200,085. They include an amount received from the sale of part of the collection of trains and the memorabilia, videos and books.
At the date of the hearing, the parties agreed that the net distributable estate (subject to costs of the proceedings that may be ordered) is $993,151. That amount does not include the amount of $38,000, which is presently being held by Mr Liddell, one of the persons the deceased determined should be responsible for selling the collection of trains and the memorabilia, videos and books.
It is anticipated that the balance of the train collection, memorabilia, books and videos, might be sold for between $50,000 and $60,000. It also does not include the shares, which have not been sold.
In calculating the value of the estate, finally available for distribution, the costs of the present proceedings should also be considered, since the Plaintiffs, if successful, normally, will each be entitled to an order that her, or their, costs be paid out of the estate of the deceased, whilst the Defendant, irrespective of the outcome of the proceedings, normally, will be entitled to an order that his costs be paid out of the estate.
Wendy's costs and disbursements of the proceedings, calculated on the ordinary basis, have been estimated to be $102,646 (inclusive of GST and upon the basis of a two day hearing). Her costs and disbursements calculated on the indemnity basis have been estimated to be $118,556.
Shortly after the commencement of the hearing, Mr R Wilson, counsel for Wendy, informed the Court that the only amount sought for costs and disbursements (inclusive of GST) out of the estate was $50,000. I shall, therefore, use that amount as the estimate of Wendy's costs and disbursements.
The other Plaintiffs' costs and disbursements of the proceedings, calculated on the indemnity basis, have been estimated to be $66,958 (inclusive of GST and upon the basis of a two day hearing). The estimate of those costs and disbursements, calculated on the ordinary basis, was $56,500 (none of which costs related to work performed for Carmen, the Plaintiff whose proceedings are discontinued).
The Plaintiffs' solicitor gave evidence that the costs and disbursements would not exceed his estimate. Accordingly, I shall use that estimate as the costs sought to be recovered by them from the estate.
The Defendant's costs and disbursements of the present proceedings, calculated on the indemnity basis (inclusive of GST and upon the basis of a two day hearing), are estimated to be $77,000. The Defendant (who is the solicitor who swore the costs affidavit) gave evidence that the costs and disbursements would not exceed his estimate. Accordingly, I shall use that estimate as the costs sought to be recovered from the estate.
The parties agreed that, for the purposes of the hearing, assuming the estimates of costs prove accurate, and the usual order for costs is made, and if the legacy payable to Keiren is paid, the estimated net distributable value of the estate will be in the order of $819,784 (including $38,000 disclosed as being held by Mr Liddell). There may be another $50,000 to $60,000, being the proceeds of sale of the balance of the train collection, memorabilia, books and videos, if, and when, sold. Since it is not known when, or how much, will be recovered on sale, I shall simply bear the amount in mind, without including it in the funds presently available for distribution. Subject to any order made in favour of one, or both, of Allan and/or Leslie, the balance of those proceeds will pass to the four natural children of the deceased pursuant to the terms of the deceased's Will.
The persons described as eligible persons, within the meaning of the Act, are all of the Plaintiffs, with the exception of Carmen. The evidence reveals that, at birth, she was adopted. Carolyn is an eligible person also. She is aware of the proceedings and a short affidavit sworn by her was read.
There is also some evidence that a person, Irene Littlefield, who lived with the deceased for 14 years before his relationship with Wendy commenced, might also be an eligible person. The prescribed notice had not been served on her because none of the parties knew of her whereabouts.
However, on the second day of the hearing, the Defendant filed a further affidavit in which he disclosed that a copy of the prescribed notice had been sent to Ms Littlefield's grandson, who had been located. The Defendant gave oral evidence, that during the long adjournment on the second day, he had spoken, by telephone, to a person who identified herself as "Irene Littlefield", who stated she had not actually received the notice that had been sent to her grandson, but that she knew the deceased, and, in fact, had attended his funeral. After the Defendant explained what the proceedings were about, she stated that she had no intention of making any claim on the deceased's estate as she was not "a taker". Ms Littlefield also volunteered to the Defendant, that the deceased had told her, many times, that he wanted his children to benefit from the Ryde property.
In the circumstances, I am satisfied that I may disregard the interests of Ms Littlefield, despite the fact that notice of the application and the Court's power to disregard her interests was not served on her in the manner prescribed by the rules of court, upon the basis that the service of such notice is unnecessary in the circumstances of the case.
Additional Background Matters
There is no dispute that Wendy's estate was made the subject of a sequestration order on 27 October 2010. Brian Silvia was appointed the trustee of her bankrupt estate. She filed a Statement of Affairs, dated 14 October 2010, on 25 October 2010. The term of the bankruptcy starts on 27 October 2010. Unless extended because of an objection to her discharge, the bankruptcy will be discharged, automatically, on 28 October 2013.
The Statement of Affairs revealed assets with a value, in total, of $4,446,765 and liabilities of $13,809,557, of which $12,400,000 were secured creditors and the balance ($1,409,557) were unsecured creditors. The estimated deficit was shown as $9,363,792.
One of the secured creditors has issued a Notice for Demand for Possession of the Castle Hill property on, or about, 28 July 2011. It may be that it is prepared to accept $790,000 for the Castle Hill property. No agreement, as yet, has been reached upon any sale to the Defendant on behalf of the estate.
The circumstances surrounding Wendy's bankruptcy relate to the conduct of a business known as Premier Parking (conducted by two different companies in each of which Wendy was a director). She had been a director of each company for many years and it was a business conducted by her second husband and one son of their marriage. She gave evidence that she did not know very much about the business "and did not want to know".
Despite initially stating a belief that the secured creditors would be paid out of the proceeds of sale of the properties over which the securities have been taken, Wendy appears to accept that, now, this is highly unlikely. In fact, there will be a considerable shortfall. There has never been any real prospect that there will be any distribution to unsecured creditors.
It seems clear, however, that whether the Defendant is able to purchase the Castle Hill property will depend upon a number of different considerations, not the least of which are whether an order is made in these proceedings, and whether the provision made for Wendy is sufficient in the estate, with or without any other contribution, to pay the asking purchase price.
The Statutory Scheme - The Act
Introduction
I shall discuss the statutory scheme that is relevant to the facts of the present case. Although I have set out some of what I state hereunder in other cases, in view of the importance of this case to the parties, I shall repeat the principles. It is important that they be able to follow the reasoning and for each to be satisfied that I have considered the evidence and the submissions.
The wording of the Act is similar to the wording of the former Act. However, it is necessary to remember the warning of Kirby P in Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100, at 76,304:
"Purposive construction of the Act
There is always a danger where a reformed Act borrows heavily upon ideas which previously existed in the common law or in an earlier statute, that lawyers will approach the construction of the Act affected by the previous law. Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1985) 2 NSWLR 475, 478. That danger is but an illustration, in the specialised activity of law, of a universal phenomenon of psychology long established in relation to human perception generally. We tend to perceive what we expect. We expect that with which we are familiar.
There is a particular danger in the case of the Family Provision Act in construing its terms by reference to the law which developed around the Testators' Family Maintenance and Guardianship of Infants Act 1916 . That Act was passed in earlier times to govern the entitlements of a testator's family, as narrowly defined. The definition by s 3(1) of that Act confined applications to those made by "the widow, husband or children of such persons". There was no mention in it of former spouses. Doubtless this was because, for the early part of this century, divorce was relatively infrequent and then based upon concepts of matrimonial fault which would make interference in the testamentary disposition of the deceased unlikely. When enacted, the statute was a radical interference in the power of testamentary disposition. That was a significant power over private property, the disturbance of which was regarded as highly exceptional."
Whilst the relevant amendments made by the Act are not as significant to those made by the former Act, it remains necessary to bear his Honour's warning in mind in construing the statutory framework. In doing so, a construction that promotes the purpose, or object, of the Act is to be preferred to a construction that would not promote that purpose or object. In my view, the principles applied by the courts to the former Act continue to apply, except to the extent that the Act otherwise requires.
The former Act was repealed by s 5 of the Succession Amendment (Family Provision) Act 2008. A new Chapter 3 was added to the Act, which dealt with the topic of family provision from deceased estates. The long title of the Act describes that new Chapter as one to ensure that adequate provision is made for the members of the family of a deceased person, and certain other persons, from the estate of the deceased person. Importantly, this should not be taken to mean that the Act confers upon those persons, a statutory entitlement to receive a certain portion of a deceased person's estate. Nor does it impose any limitation on the deceased person's power of disposition by his, or her, will. It is only if the statutory conditions are satisfied, that the court is empowered, under the Act, to alter a deceased person's disposition to produce a result that is consistent with the purpose of the Act. Even then, the court's power to do so is discretionary.
The Substantive Provisions of the Act
The Act, relevantly provides, in s 58(2), the period within which the application must be made:
"An application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown."
The statutory time limit is a substantive provision laid down by the Act, itself, and is not merely a procedural time limit. There are no restrictions, or requirements, of any kind, laid down by the Act, other than showing "sufficient cause" for the time limit to be extended. There is no definition of what would constitute "sufficient cause" under the Act. The expression means sufficient explanation, or sufficient justification or excuse, for the application not having been made within the prescribed period: Vasconelos v Bonetig [2011] NSWSC 1029 at [16]. The decision of the court to extend time is a discretionary decision and the discretion given is unfettered. It is an evaluative judgment that is exercised: Peter Robert Durham v Bruce Albert Durham & Ors [2011] NSWCA 62, per Tobias JA (with whom Young JA agreed) at [42] and per Campbell JA at [72].
Importantly, unlike the former Act, there is no power given to the parties to the proceedings to consent to the application being made after the expiration of the prescribed period (see: s 16(3)(a) of the former Act).
The key provision is s 59 of the Act. The court must be satisfied, first, that the applicant is an eligible person within the meaning of s 57(1). There are six categories of persons by, or on whose behalf, an application may be made. One category is a person with whom the deceased was living in a de facto relationship at the time of the deceased's death (s 57(1)(b); another is "a child" of the deceased (s 57(1)(c)).
In the case of an applicant who falls within s 57(1)(d), (e) or (f), the court must next consider and be satisfied, having regard to all the circumstances of the case (whether past or present), that there are factors which warrant the making of the application (s 59(1)(b)). This is irrelevant in the present case.
Then, if those considerations are satisfied, the court must determine whether adequate provision for the proper maintenance, education and advancement in life of the applicant has not been made by the will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both (s 59(1)(c)). It is only if the court is satisfied of the inadequacy of provision, that consideration is given to whether to make a family provision order (s 59(2)). It may take into consideration, then, the matters referred to in s 60(2) of the Act. In this way, the court carries out a two-stage process.
Other than by reference to the provision made in the Will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both, s 59(1)(c) leaves undefined the norm by which the court must determine whether the provision, if any, is inadequate for the applicant's proper maintenance, education and advancement in life. The question would appear to be answered by an evaluation that takes the court to the provision actually made in the deceased's Will, or on intestacy, or both, on the one hand, and to the requirement for maintenance, education and advancement in life of the applicant on the other. No criteria are prescribed in the Act as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance, education and advancement in life of the applicant.
It was said in the Court of Appeal (per Basten JA) in Foley v Ellis [2008] NSWCA 288 at [3], that the state of satisfaction "depends upon a multi-faceted evaluative judgment".
Importantly, there no longer appears to be any sanction to consider, in s 59(1)(c) of the Act, the provision made by the deceased during his, or her, lifetime for the applicant (see, s 9(2) of the former Act).
Under both s 59(1)(c) and s 59(2) of the Act, the time at which the court gives its consideration to the question is the time when the court is considering the application.
"Provision" is not defined by the Act, but it was noted in Diver v Neal [2008] NSWSC 304 at [34], that the term "covers the many forms of support and assistance which one individual can give to another. That support and assistance will vary over the course of the person's lifetime".
Neither are the words 'maintenance' and 'advancement in life' defined in the Act. However, in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon JJ, at [115], said, of the words 'maintenance', 'support' and 'advancement':
"'Maintenance' may imply a continuity of a pre-existing state of affairs, or provision over and above a mere sufficiency of means upon which to live. 'Support' similarly may imply provision beyond bare need. The use of the two terms serves to amplify the powers conferred upon the court. And, furthermore, provision to secure or promote 'advancement' would ordinarily be provision beyond the necessities of life. It is not difficult to conceive of a case in which it appears that sufficient provision for support and maintenance has been made, but that in the circumstances, say, of a promise or an expectation reasonably held, further provision would be proper to enable a potential beneficiary to improve his or her prospects in life, or to undertake further education."
In In the Estate of Puckridge, Deceased (1978) 20 SASR 72, at 77, King CJ said:
"The words 'advancement in life' have a wide meaning and application and there is nothing to confine the operation of the provision to an earlier period of life in the members of the family: Blore v Lang (1960) 104 CLR 124, per Dixon CJ at 128."
In Mayfield v Lloyd-Williams [2004] NSWSC 419, White J noted:
"In the context of the Act the expression "advancement in life" is not confined to an advancement of an applicant in his or her younger years. It is phrase of wide import. ( McCosker v McCosker (1957) 97 CLR 566 at 575) The phrase "advancement in life" has expanded the concept used in the Victorian legislation which was considered in Re Buckland permitting provision to be made for the "maintenance and support" of an eligible applicant. However Adam J emphasised that in a large estate a more extravagant allowance for contingencies could be made than would be permissible in a small estate and still fall within the conception of maintenance and support."
The word 'adequate' connotes something different from the word 'proper'. 'Adequate' is concerned with the quantum, whereas 'proper' prescribes the standard, of the maintenance education and advancement in life: Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127 at [72] and at [77] per Buss JA.
Each of the words were considered by Lord Romer in delivering the advice of the Privy Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at 476:
"The use of the word 'proper' in this connection is of considerable importance. It connotes something different from the word 'adequate'. A small sum may be sufficient for the 'adequate' maintenance of a child, for instance, but, having regard to the child's station in life and the fortune of his father, it may be wholly insufficient for his 'proper' maintenance. So, too, a sum may be quite insufficient for the 'adequate' maintenance of a child and yet may be sufficient for his maintenance on a scale that is 'proper' in all the circumstances."
Dixon CJ and Williams J, in McCosker v McCosker (1957) 97 CLR 566 at 571, after citing Bosch v Perpetual Trustee Co Ltd , went on to say, of the word 'proper', that:
"It means "proper" in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement if life must be considered in the light of the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."
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 Vigolo v Bostin at [114], Callinan and Heydon JJ said:
"[T]he use of the word "proper"...implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of a kind which was made here...The use of the word "proper" means that attention may be given, in deciding whether adequate provision has been made, to such matters as what use to be called the "station in life" of the parties and the expectations to which that has given rise, in other words, reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future."
The first stage of the process provided for by s 59(1)(c) has been described as "the jurisdictional question": Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201 at 208-209. At this stage, the court will consider whether it can make an order for provision for the maintenance, education and advancement in life of a particular applicant.
Whether the applicant has a 'need' is a relevant factor at the first stage of the enquiry. It is an element in determining whether 'adequate' provision has been made for the 'proper' maintenance education and advancement in life of the applicant in all of the circumstances: Collins v McGain [2003] NSWCA 190 [42] (Tobias JA, with whom Beazley and Hodgson JJA agreed).
Tobias JA said:
"42. There can be no question that, at least as part of the first stage of the process, the question of whether the eligible person has a relevant need of maintenance etc is a proper enquiry. This is so as the proper level of maintenance etc appropriate for an eligible person in all the circumstances clearly calls for a consideration of his or her needs. However, the question of needs must not be too narrowly focused. It must, in my view, take into account, depending upon the particular circumstances of the case, present and future needs including the need to guard against unforeseen contingencies.
...
47. As I have observed, the issue of need is not confined to whether or not an eligible person has, at the date of hearing, a then need for financial assistance with respect to his maintenance etc. It is a broader concept. This is so because the question of needs must be addressed in the context of the statutory requirement of what is "proper maintenance etc" of the eligible person. It is the cause of that context that, in the present case, the "proper maintenance etc" of the appellant required consideration to guard against the contingency to which I have referred."
In Devereaux-Warnes v Hall [No 3] at [81]-[85], Buss JA said, in respect of the first stage of the process:
"The term 'need' has been used to refer to the claimant's inability to satisfy his or her financial requirements from his or her own resources. See Singer per Gaudron J at 227.
'Need' has also been used in the context of a value judgment or conclusion, namely, that the claimant is 'in need' of maintenance, etc, because inadequate provision has been made for his or her proper maintenance, etc. See Gorton v Parks (1989) 17 NSWLR 1 per Bryson J at 10-11.
The determination of whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, etc, of the claimant will always, as a practical matter, 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. See Hunter per Kirby P at 575.
Although the existence or absence of 'needs' which the claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for his or her proper maintenance, etc. See Singer per Gaudron J at 227. Compare Gorton per Bryson J at 6-11; Collicoat v McMillan [1999] 3 VR 803 per Ormiston J at 816 [38], 820 [47]."
In the event that the court is satisfied that the power to make an order is enlivened (i.e. it is satisfied that the applicant is an eligible person, and, where necessary, that factors warranting have been satisfied, and that adequate provision for the proper maintenance, education or advancement in life of the person has not been made), then, the court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the court at the time the order is made.
The second stage of the process arises under s 59(2) and s 60(1)(b). Mason CJ, Deane and McHugh JJ, in Singer v Berghouse , at 211, affirmed that the decision made at the second stage involves an exercise of discretion in the accepted sense. The fact that the court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant's favour.
The discretion should be exercised carefully and conservatively according to community perceptions of the provision that would be made by a wise and just testator: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 146. The standards of the wise and just testator of today, not of an era ago, are pertinent to that assessment: Permanent Trustee Company v Fraser (1995) 36 NSWLR 24 at [16].
Section 60 of the Act, at least in part, is new. It provides:
"(1) The court may have regard to the matters set out in subsection (2) for the purpose of determining:
(a) whether the person in whose favour the order is sought to be made (the "applicant") is an eligible person, and
(b) whether to make a family provision order and the nature of any such order.
(2) The following matters may be considered by the court:
(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."
It can be seen that s 60(2) enumerates 15 specific matters which the court may take into account, together with "any other matter the court considers relevant", for the purposes of determining eligibility, whether to make a family provision order, and, if so, the nature of any such order. There is no hierarchy as between the various factors. The weight to be attached to each of them is likely to differ depending upon the individual circumstances of the particular case. Nor is there a mandatory command to take into account any of the matters enumerated. None of the matters differentiate in their application between classes of eligible person or types of relationship. Similarly, there is no distinction based on gender.
Considering each of the relevant matters does not prescribe a particular result, and whilst there is likely to be a substantial overlap in the matters that the court may take into account when determining the answers to what is posed in s 60(1), those matters are not identical. For example, when considering eligibility under ss (1)(a), many of the matters in ss (2) will be largely, if not wholly, irrelevant.
Furthermore, consideration of some of the matters in s 60(2) not only permits, but requires, a comparison to be made between the respective positions of the applicant and of other eligible persons as well as of the beneficiaries, whilst others do not. Importantly, also, many of the matters in ss (2), of themselves, are incapable of providing an answer to the questions posed in s 60(1).
Leaving aside the question of eligibility, the matters referred to in s 60(2) may be considered on "the discretionary question", namely whether to make an order and the nature of that order. Importantly, under s 60(2), attention is drawn to matters that may have existed at the deceased's death, or subsequently.
This does not mean, however, that some of the matters referred to in s 60(2) will be irrelevant to the jurisdictional question to be determined at the first stage. I am comforted in reaching this conclusion by the following comments made in Singer v Berghouse (at 209-210):
"... The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant."
And by the comments of Callinan and Heydon JJ in Vigolo v Bostin , who wrote (at 230-231):
"We do not therefore think that the questions which the court has to answer in assessing a claim under the Act necessarily always divide neatly into two. 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, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means, and competing claims, of all the potential beneficiaries must be taken into account and weighed with all of the other relevant factors."
Section 61 of the Act permits the court to disregard the interests of any other person by, or in respect of whom, an application for a family provision order may be made (other than a beneficiary of the deceased person's estate), but who has not made an application. However, the court may disregard any such interests only if:
(a) notice of the application, and of the court's power to disregard the interests, is served on the person concerned, in the manner and form prescribed by the regulations or rules of court; or
(b) the court determines that service of any such notice is unnecessary, unreasonable or impracticable in the circumstances of the case.
Section 65(1) of the Act requires the family provision order to specify:
(a) the person or persons for whom provision is to be made;
(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.
The order may be made, relevantly, in this case, in relation to the estate of the deceased.
The order for provision out of the estate of a deceased person may require the provision to be made in a variety of ways, including a lump sum, periodic sum, or "in any other manner which the court thinks fit" (s 65(2) of the Act). If the provision is made by payment of an amount of money, the order may specify whether interest is payable on the whole, or any part, of the amount payable for the period, and, if so, the period during which interest is payable and the rate of interest (s 65(3) of the Act).
Any family provision order under the Act will take effect, unless the court otherwise orders, as if the provision was made in a codicil to the will of the deceased, or in the case of intestacy, as in a will of the deceased (s 72(1) of the Act).
Section 66 of the Act sets out the consequential and ancillary orders that may be made.
The Court, also, 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 (s 72(2) of the Act).
Section 99 of the Act provides that the Court may order the costs of proceedings in relation to the estate, or notional estate, of the deceased (including costs in connection with mediation) to be paid out of the estate or notional estate, or both, in such manner as the Court thinks fit.
Applicable Legal Principles - Extension of Time
The decision of the court to extend time is a discretionary decision. Other than "sufficient cause being shown", there are no statutory criteria that must be taken into account. There are no rigid rules in regard to the exercise of the discretion.
The principles governing that exercise of discretion under the Act are clear. Apart from the reason(s) for the lateness of the claim, the factors to which the court must look, include whether beneficiaries under the Will would be unacceptably prejudiced if time were to be extended; whether there has been any unconscionable conduct by either side; and, finally what is the strength of the claim made by the party seeking an extension of time: see, for example, John v John ; John v John [2010] NSWSC 937 at [37]-[51] per Ward J; Campbell v Chabert-McKay [2010] NSWSC 859 at [45]-[47] per White J; Durham v Durham [2010] NSWSC 389 at [15] per Ball J; Taylor v Farrugia [2009] NSWSC 801 at [14] per Brereton J; Burton v Moss [2010] NSWSC 163 at [31] ff, per Macready As J, in which the relevant earlier cases are referred to.
The onus lies on the applicant to establish sufficient cause. It will be for the court to determine the strength of the applicant's claim.
The prejudice to which the section looks is any prejudice occasioned by the delay in lodging the claim rather than any disappointment that might occur consequent upon readjustment of the interests under the will in order to make provision for the applicant: Cetojevic v Cetojevic [2006] NSWSC 431; McCann v Ward & Anor [2010] VSC 452 at [11]. Where there has been a long period since the deceased died, the lapse of time, itself, might create prejudice in any fact-finding exercise: Vasconelos v Bonetig at [21].
In De Winter v Johnstone (NSWCA, 23 August 1995, unreported), Sheller JA held that the concept of "unconscionable conduct" referred to above was "directed towards a deliberate holding off [in bringing proceedings] designed to lull the beneficiaries into a false sense of security". Cole JA, whilst not expressing a concluded view, said that it must be doubted whether a change of mind (because of some change in the financial and material circumstances of the Plaintiff which has occurred after the expiry of the limitation period) constitutes unconscionable conduct.
As to the strength of the claim, in De Winter v Johnstone , Powell JA considered that as an application for extension of time was invariably dealt with at the time of the application for substantive relief, no extension of time ought to be granted unless it was established that the applicant seeking an extension of time would, in the event of the extension being granted, be entitled to an order for substantive relief. By contrast, Sheller JA considered that it was only necessary for the applicant to show that the application was not bound to fail.
Where the delay is not unduly long and the estate remains undistributed, ignorance during the period within which proceedings are to be commenced, of the right to claim, followed by a prompt application to extend the time once the right to claim becomes known, will usually be a sufficient explanation: Clark v Burns [2011] VSC 394 at [6].
Other Applicable Principles
In addition to the above matters, there are some general principles that are relevant to the facts of this case. Whilst most of these principles were given in the context of the previous legislation, they are equally apt in a claim such as this one.
Bryson J noted in Gorton v Parks (1989) 17 NSWLR 1, at 6, in relation to the former Act, that it is not appropriate, to endeavour to achieve a 'fair' disposition of the deceased's estate. It is not part of the court's role to achieve some kind of equity between the various claimants. The court's function is not to reward an applicant, or to distribute the estate according to notions of fairness or equity. Rather, the court's role is of a specific type and goes no further than the making of 'adequate' provision in all the circumstances for the 'proper' maintenance, education and advancement in life of an applicant.
In Cooper v Dungan (1976) 50 ALJR 539, Stephen J, at 542, reminded the court to be vigilant in guarding "against a natural tendency to reform the testator's will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant".
The court's discretion is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation ( Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9, per Dixon CJ at 19); McKenzie v Topp [2004] VSC 90 at [63]. Freedom of testamentary disposition remains a prominent feature of the Australian legal system.
Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education and advancement in life, is not fixed or static. Rather, it 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: The Pontifical Society for the Propagation of the Faith v Scales at 19; Walker v Walker (NSWSC, 17 May 1996, unreported); Vigolo v Bostin at [11]; Stern v Sekers; Sekers v Sekers [2010] NSWSC 59.
In Luciano v Rosenblum (1985) 2 NSWLR 65 at 69-70 Powell J (as he then was) said:
"It seems to me that, as a broad general rule, and in the absence of special circumstances, the duty of the testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secure in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies."
That Court of Appeal approved the "broad general rule" in O'Loughlin v O'Loughlin [2003] NSWCA 99. It has also been held that the principle is applicable to the position of a person who occupies the position of a de facto wife: Re Marcuola-Bel Estate; Marcuola-Bel v Thi Ly Tran [2005] NSWSC 1182 at [31]. However, the principle is not one of immutable application: Marshall v Carruthers [2002] NSWCA 47; Clifford v Mayr [2010] NSWCA 6 at [142]-[144].
Whilst the distinction between married relationships and de facto relationships has narrowed considerably over time, there remains binding authority which gives greater weight to the claims of parties who have entered "a formal and binding commitment to mutual support": Marshall v Carruthers ; Re the Will of Sitch (deceased); Gillies v Executors of the Will of Sitch [2005] VSC 308; Sellers v Scrivenger [2010] VSC 320 at [68].
In Bladwell v Davis [2004] NSWCA 170, Bryson JA stated:
"[19] In the application of the test in s 7, and of the exposition thereof in Singer v Berghouse by Mason CJ, Deane and McHugh JJ at 409 -411 it would be an error to accord to widows generally primacy over all other applicants regardless of circumstances and regardless of performance of the stages of consideration described in Singer v Berghouse , in full and with reference to the instant facts. Defeat of the opponents' claims does not necessarily follow from a demonstration, which the claimant can make, that all her needs with respect to income, home renovation, and provision for contingencies cannot be met if any provision is made for the opponents; indeed she could well demonstrate that even if the provisions of the will took effect without any modification, the provision for her is not adequate. That is not a demonstration that no claim by an eligible person can succeed; the claims and circumstances of the opponents also have to be weighed, and they too have their needs and merits."
Ipp JA added:
"[2] I would add, however, that where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, will ordinarily result in the needs of the widow being given primacy. That is simply because, in such circumstances, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event, the need of the widow would be greater than that of the others."
The important consideration is whether, in all the circumstances, the community expectation of the deceased would be for greater benefaction to have been made for the proper or adequate provision for the person seeking provision. Gleeson CJ observed in Vigolo , at [11] that the justification for interference with freedom of testation is to be found in the failure of a deceased to meet the obligations, which the community would expect in terms of maintenance, for those persons within the class of eligible persons.
What is described in the cases as a "Crisp order" is an order of the kind made by Holland J in Crisp v Burns Philp Trustee Company Ltd (NSWSC, 18 December 1979, unreported), except in part, in Mason and Handler's " Succession Law and Practice New South Wales " at p. 13580 at [9433]). Such an order gives an applicant an interest for life in real property, or in an interest in real property, with the right to it (should the need arise) for the purposes of securing, for the applicant's benefit, more appropriate accommodation. That type of order is intended to provide flexibility, by way of a life estate, the terms of which could be changed to cover the situation of the applicant moving from her own home to retirement village to nursing home to hospital. The flexibility provided by such an order underlies the notion that a Crisp order confers a "portable life interest": Court v Hunt (NSWSC, 14 September 1987, unreported), cited with approval by Ipp JA in Milillo v Konnecke [2009] NSWCA 109 at [47]-[48].
In relation to a claim by an adult child, the following principles, in my view, are relevant:
(a) The relationship of 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 moral obligation, 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 their 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 .
(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 a spouse, who has a prime 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. 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) There is no the need for an adult child to show some special need or some special claim: McCosker v McCosker ; Kleinig v Neal (No 2) [1981] 2 NSWLR 532; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45.
(e) 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 .
(f) Although some may hold the view that equality between children does not discriminate between children according to gender, character, conduct, or financial and material circumstances, the Act is not consistent with such a view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration individual conduct, circumstances, financial resources, including earning capacity, and financial needs in the Court's determination of the applicant's case.
In Blore v Lang (1960) 104 CLR 124, Fullagar and Menzies JJ said (at 135):
"The ... legislation [is] for remedying, within such limits as a wide discretion would set, breaches of a testator's moral duty to make adequate provision for the proper maintenance of his family - not for the making of...a fair distribution of ... [the] estate. Equality is not something to be achieved by the application of the Act, although in some cases equality may set a limit to the order to be made - for instances, where there is not enough to provide proper maintenance for all entitled to consideration whose need is the same."
In Barna v Barna [2008] NSWSC 1402, Brereton J said:
"[27] The obligation to make provision for persons for whom the community would expect a testator to make provision does not import an obligation to deal with children equally. A testator is entitled to deal differently with his or her children, and the quality of the relationship that the testator has with each of the claimants on the estate is a relevant consideration."
Bankruptcy of Applicant
Section 5 of the Bankruptcy Act 1966 (Cth) defines "property" to mean "real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property".
Section 58 of the Bankruptcy Act relevantly provides that:
"Vesting of property upon bankruptcy--general rule
(1) Subject to this Act, where a debtor becomes a bankrupt:
(a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and
(b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.
...
(6) In this section, after-acquired property , in relation to a bankrupt, means property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt.
..."
Section 116 of the Bankruptcy Act relevantly provides:
"Property divisible among creditors [see Table B]
(1) Subject to this Act:
(a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge; and
(b) the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge; and
...
is property divisible amongst the creditors of the bankrupt. "
Section 149 of the Bankruptcy Act relevantly provides:
"Automatic discharge
(1) Subject to section 149A, a bankrupt is, by force of this subsection, discharged from bankruptcy in accordance with this section.
(2) If:
...
the bankrupt is discharged at the end of the period of 3 years from:
(c) the date on which the bankrupt filed his or her statement of affairs;
..."
Section 152 of the Bankruptcy Act provides:
"A discharged bankrupt must, even though discharged, give such assistance as the trustee reasonably requires in the realization and distribution of such of his or her property as is vested in the trustee."
Section 153 of the Bankruptcy Act relevantly provides:
"Effect of discharge
(1) Subject to this section, where a bankrupt is discharged from a bankruptcy, the discharge operates to release him or her from all debts (including secured debts) provable in the bankruptcy, whether or not, in the case of a secured debt, the secured creditor has surrendered his or her security for the benefit of creditors generally. "
Even though s 153(1) has the effect of releasing the bankrupt from liability for all provable debts, the rights of creditors with provable debts do not totally cease when the bankrupt obtains discharge from bankruptcy. Even then, such creditors retain the right conferred on them by the Bankruptcy Act to receive dividends from any property that has vested in the trustee in bankruptcy and which remains vested in him, her or it, at the time of the bankrupt's discharge from bankruptcy.
McLelland J (as his Honour then was), in Gosden v Dixon (1992) 107 ALR 329 at 331, put the matter this way:
"In general terms, where a person becomes a bankrupt, property that belonged to him at the commencement of the bankruptcy or is acquired by him before his discharge vests in the relevant trustee and constitutes property which is available to be realised and divided among the bankrupt's creditors. That, I think, is the effect of ss 58(1) and 116 of the Bankruptcy Act . A discharge from the bankruptcy releases the bankrupt from his debts and enables him to retain property which he subsequently acquires free of any claim by the trustee. That, I think, is the effect of ss 153 and 116 of the Act. However, a discharge does not cause to be revested in the bankrupt any property which has vested in the trustee prior to the discharge from bankruptcy. In regard to such property the trustee is still bound to collect and realise it, and to distribute the proceeds among the creditors, notwithstanding the discharge. These propositions are clearly established by several decisions including Pegler v Dale (1975) 6 ALR 62; [1975] 1 NSWLR 265; Re Balhorn; Ex parte Balhorn and Official Trustee (1981) 39 ALR 223; Daemer v Industrial Commission (1990) 22 NSWLR 178; 99 ALR 789. In the words of Lockhart J in Re Balhorn at 226:
The trustee of a bankrupt's estate is still bound to collect, realise and distribute such of the bankrupt's property as was vested before discharge in the trustee."
It is also useful to remember the purposes sought to be achieved by the Bankruptcy Act . Hill J in Re McMaster; Ex parte McMaster [1991] FCA 598; (1991) 33 FCR 70 at 72-73, summarised these purposes as follows:
"The modern bankruptcy law serves three purposes. The first is to ensure that the assets of the bankrupt are distributed rateably among creditors. The second, which is interrelated with the first, is to ensure that one creditor does not obtain an undue advantage over other creditors. The third is to bring about the discharge of the debtor from future liability for his existing debts, so that the debtor may start afresh ..."
See, more recently, Moore-McQuillan v Scott [2006] FCA 63 at [14], [2006] FCA 63; 149 FCR 486 at 490 per Mansfield J; 7Steel Building Solutions Pty Ltd v Wright [2011] FCA 328 at [7] per Flick J; Stoker (Trustee), in the matter of Starr (Bankrupt) v Starr [2011] FCA 746 at [15] per Jacobson J.
In this case, Wendy was made bankrupt after the date of the deceased's death, with the result that the whole of her entitlement under the deceased's Will passes, as after-acquired property, to her trustee in bankruptcy. This "vesting" is a transfer, by automatic operation of the Bankruptcy Act , to the trustee in bankruptcy of title to all the "property", as defined, of the bankrupt.
Wendy's rights in distribution remain vested in her trustee in bankruptcy, notwithstanding her subsequent discharge. Her discharge will not transfer, or revest, the title to any part of the bankrupt estate in her, because that remains vested in her trustee in bankruptcy notwithstanding her discharge: Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306; Daemar v Industrial Commission of New South Wales (No 2 ) (1990) 22 NSWLR 178; (1990) 99 ALR 789, Gosden v Dixon and Metherell v Public Trustee in its Capacity as Executor of the Estate of the late Patricia Helen Peek [2010] WASC 205 at [4].
It has been said by Hamilton J that he "did not think it is any part of the function of the Court in carrying out its functions under the FPA to intervene in a gift made by the will so as to make it proof against the creditors of a bankrupt beneficiary" (see: Webb v Webb; Estate of W E Webb [1999] NSWSC 343). I respectfully agree.
Relevant Facts - Extension of Time
An affidavit, by Allan, and by Leslie, detailing the events referred to below was filed on the afternoon of the first day of the hearing.
Until the reading of these affidavits, there was no evidence, at all, explaining the delay in commencing the proceedings. The only affidavit read had been one by the Plaintiffs' present solicitor, Mr McNamara, setting out when he received instructions and what he did thereafter.
Allan had attended upon a firm of solicitors in Nowra on 20 January 2010. He went there to seek advice, on behalf of all his siblings, and Carmen, on defending the proceedings brought by Wendy, and for advice on the ability of each of the deceased's children to bring his, or her, own claim, for provision out of the deceased's estate. At this meeting, he was informed that the time for bringing proceedings was 12 months from the date of death.
Allan states that he informed the solicitor that he and his siblings "were all struggling financially" and asked whether "there is any chance we can bring our own claim for provision". He says that the solicitor answered:
"If Wendy is the de facto wife there would be no basis for a successful claim by you or your siblings against the estate."
For reasons that are not explained, Allan says that he and his siblings "started to question the advice". He saw his present solicitor for the first time on 29 March 2011 and then spoke by telephone, as did Leslie, with Mr M Lawson of counsel on 31 March 2011. They received advice that each was eligible to make a claim for additional provision out of the estate of the deceased. The Summons was filed on that day.
It was put to Allan, and he agreed, that he had known that proceedings needed to be commenced within 12 months and that what had occurred was that he had simply changed his mind. Initially, he stated that he was seeking to protect his interest under the Will of the deceased, but also stated that had he known he was eligible to make a claim, he would have done so. He said that he was unhappy with the terms of the Will and the advice he had received, initially, had led him, and his siblings, to not commence proceedings within time.
Leslie said that because of his "difficulty understanding technical and legal things", he relied upon Allan. He was aware that Allan sought advice from solicitors about a challenge to the deceased's Will and in defending Wendy's claim.
Leslie does not, however, disclose what he was told by Allan following his meeting with solicitors. He says that he "didn't bring a claim because I didn't know I could bring my own claim and I left Allan to deal with all the solicitors and the legal dealings".
Leslie also gives evidence that he participated in a telephone discussion with Mr Lawson and remembers counsel saying that they still had an opportunity to contest the deceased's Will.
The submissions filed on behalf of the Defendant state that the Defendant does not oppose the extension of time for making the applications by Allan and Leslie.
Counsel for Wendy opposed the extension of time. However, when asked, he could not point to any prejudice to Wendy if time were extended. Nor could any party point to any relevant unconscionable conduct.
The final consideration is one relating to Allan's and Leslie's prospects of success. I shall return to that topic later in the proceedings.
Relevant Facts - Substantive Claim
I next set out the additional facts that I am satisfied are either not in dispute, or that have been established by the evidence. I do so by reference to s 60 of the Act and by a consideration of the factors relevant to all claims at the same time, as this will permit the application of the statutory criteria to be weighed comparatively in relation to the claims.
(a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship
The sub-section speaks of not only a "family relationship", but also in terms of "other relationship". Thus, it does not require a family, or blood, relationship, between the applicant and the deceased. Information as to the nature of the relationship is being sought.
The deceased and Wendy commenced their relationship in February 1994. They lived together, as de facto partners, in the Castle Hill home from about July 1995 up until the deceased's date of death in October 2009, a period of over 14 years. The deceased referred to Wendy as his " partner " in the Will. There would appear to be no dispute that t hey enjoyed a happy and loving relationship. She describes them as having "a very good life together".
In a letter to his children, the deceased wrote:
"To my four very dear children, I would like to take this opportunity to express a few fact wishes and thoughts with you.
Firstly, where would I be without Wendy Anne, despite her own personal, family and business pains and worries, she has been unstinting in looking after me in my time of need. I don't think it was part of the deal that she take on the care of a sick person but she certainly has and I often consider what the situation would be if the positions were reversed."
The letter concluded with the statement that Wendy "has brought my family together for the first time".
There is a card, from Carmen, in which she expresses the observation that Wendy and the deceased "love each other" and that "you have been a godsend to all of us, and in particular, Dad". There is also a card from Carolyn in which she expresses thanks to Wendy "for being such a wonderful woman". Allan accepted, in cross-examination, that the deceased was happy in his relationship with Wendy.
In their financial relationship, the deceased was frugal and Wendy, at least until the demise of the companies, led the lifestyle of a wealthy woman. She says that because of this, there was little pooling of assets. Each expressed the view that "What is mine is mine and what is yours is yours" and that each could do as she, or he, pleased, with her, or his, own assets. (I am satisfied, despite Wendy's denial, that another reason for the lack of pooling their assets was that, until more recent events, she believed that the value of her assets were greater than the deceased's.)
In a sense, the terms of the deceased's Will demonstrate the same view. Whilst the Castle Hill property was to be purchased (so that it became the estate's asset), Wendy was only permitted to reside therein for 3 years, after which she was to receive an interest in a one fifth share of the proceeds of sale as a discretionary object. In part, no doubt, the terms are also explicable because it looked likely that Wendy might be in real danger financially, and be likely to lose all of her assets.
Allan did not seem to have had a particularly close relationship with the deceased until the last 20 years of the deceased's life. They would be in reasonably regular contact either by telephone or by visits.
Leslie had a good relationship with the deceased. However, in 2009, there was a disagreement and Leslie did not speak with the deceased again.
Carolyn had a good relationship with the deceased. She would regularly see him and Wendy.
Carmen did not know her birth parents following her adoption until, in about 1992, she was provided with some information about them. She was 36 years old when she first met the deceased. However, from that time on, they were in regular contact, and even though Carmen lived in the United States of America, I am satisfied that she had a good relationship with the deceased. The deceased, in his Will, described her as his daughter.
(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
Leaving aside any obligation, or responsibility, arising as a result of their relationship as de facto spouses, or as parent and child, the deceased did not have any legal, or financial, obligation to Wendy, or to any of his children, imposed upon him by statute or common law.
However, a statutory obligation, or responsibility, to make adequate provision for the proper maintenance and advancement in life is recognised in the case of each.
(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
I have dealt with this earlier in this judgment. On any view, the deceased's estate is not a large one.
There is no relevant notional estate.
(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
Wendy states that her only source of income, at the present time, is the Widow's Pension, being $959 a fortnight, together with a Reserve Bank payment of $567 a fortnight, being her entitlement, as his surviving widow, to the deceased's superannuation pension. She receives $150 per week from her son, Ross, with whom she lives.
At the present time, Wendy has the following assets:
i. Cash at bank: $2,000 approximately;
ii. Money in superannuation: $8,000 approximately;
iii. Home contents: $10,000 approximately; and
iv. Jewellery: $10,000 approximately.
Since she became bankrupt, her Trustee has charged her rent on the Castle Hill home at a rate of $511 per month. Otherwise her monthly expenses remain at about $2,827. There is, therefore, a modest surplus of monthly income over monthly expenditure.
As to her "needs" Wendy states:
"49. Under Kevin's Will, he directed Mr Pickering as executor to purchase my home at Castle Hill and allow me to live there for 3 years after which time the house would be sold and the proceeds divided into 5 portions. I seek an order in these proceedings that Mr Pickering purchase my Castle Hill home and allow me to live there for my life, or, if I ask him to do so, he be permitted to sell the home and buy an alternate property in which I could reside.
50. I understand that the Bank, as First Registered Mortgagee of my home, will, with the consent of my Trustee in Bankruptcy, sell my home to Mr Pickering for $790,000. ...
...
52. Should the court not be prepared to order that Mr Pickering purchase my home for me to live in for my life, I would seek an order that he be directed to purchase a more modest property in the Castle Hill, Baulkham Hills area on the same terms. I have looked at advertisements posted on the Internet for properties for sale in the Castle Hill, Baulkham Hills area and am aware that 4 bedroom, 2 bathroom homes with a garage can be purchased in the range of $600,000 - $700,000."
At the present time, Allan's financial resources are as follows:
Assets
1.
Residential House (Christiansen Avenue) (joint):
$300,000
2.
Residential House (Roberts Street) (joint):
$200,000
3.
Household furniture (joint):
$ 35,000
4.
Fosters Shares (joint):
$ 641
5.
IAG Shares (joint):
$ 1,076
6.
Telstra Shares (joint):
$ 329
7.
Business (joint):
$ 10,000
8.
MSBS Superannuation:
$110,000
9.
Australian Super:
$ 13,000
Liabilities
1.
Mortgage over Christiansen Avenue (joint):
$114,793
2.
Mortgage over Roberts Street (joint):
$190,258
3.
Business Loan:
$ 6,595
4.
Overdraft:
$ 4,800
Fortnightly Income
1.
Allan:
$ 914
2.
Karen:
$ 972
3.
Kieren:
$ 503
Fortnightly Expenditure:
$ 4,103
Allan sets out his "needs" as follows:
"7. Provision to me from my father's estate will enable me to reduce my high mortgage debts. I am unable to earn sufficient income to service the mortgages for both my own home and the small cottage for my disabled son Kieren Byrne."
At the present time, Leslie's financial resources are as follows:
Assets
Value
1.
Car:
$30,800
2.
Bicycle:
$ 500
3.
Household furniture:
$ 400
4.
Electrical items:
$ 1,500
5.
Power tools:
$ 800
Liabilities
1.
Car:
$28,221
2.
Credit Card:
$ 1,092
3.
Personal loan from Jana Mitevski:
$ 3,643
Monthly Income
1.
Veterans Affairs Pension:
$ 2,910
2.
Centrelink Disability Pension plus Rent Assistance:
$ 723
$ 3,615
Monthly expenses:
$ 3,415
It appears that he has a surplus of income of about $200 per month.
Leslie sets out his "needs" as follows:
"I wish to own my own home and have some stability. I have never owned any real estate. I would like to settle in the Murwillumbah area of New South Wales and would require approximately $340,000 to purchase a modest home for myself. The winters in Katoomba are too cold for me. ... I would also like to be in a position to pay off my vehicle. At the present time there is approximately $27,000 required to do this."
Carmen sets out her financial resources as follows:
Assets
1.
House #1:
$127,000 (est)
2.
House #2:
$160,000 (est)
Total
$287,000
Liabilities
1.
House #1:
$110,000
2.
House #2:
$126,000
3.
Credit Card:
$ 14,000
4.
Car:
$ 26,000
5.
Truck:
$ 5,000
Total
$281,000
Monthly Income
1.
William:
$ 2,800
2.
Carmen:
$ 2,600
3.
Rent from House #2:
$ 850
Total
$ 6,250
Monthly Expenses:
$ 5,768
She too, appears to have a surplus of income over expenditure, of about $482 per month.
As to her needs, Carmen states:
"25. It is my hope to honour my father's wishes and pay off my mortgage. This will be the first thing I will do and I know that it will fulfil his desire for me. My home is in great need of repair and I have not been able to afford to carry out this repair.
26. My son, Ken, resides in Australia together with my two (2) grandchildren. I want to be able to spend time with them in Australia as I have not seen them for a long time. My son is struggling and often rings me in the middle of the night in a distressed mood.
27. I do not have the resources to be able to spend the time that I need to with my son and grandchildren nor to be able to assist them in any way."
(e) if the applicant is cohabiting with another person-the financial circumstances of the other person
Wendy's son, Ross, lives with her and, when he is able to, he pays her $150 a week in board.
Ross has given limited evidence about his financial and material circumstances. However, he hopes to be able to borrow $80,000, and with his savings of $40,000, is prepared to put that amount towards the purchase of accommodation for Wendy. He will do this on condition that he obtains an interest as a co-owner of the property purchased, which interest is commensurate with the amount contributed to the purchase price.
Currently, Leslie has a girlfriend with whom he lives. He feels that because of his medical condition, he cannot commit to a long-term relationship and the relationship may be that it will not last. They did, however, travel recently together to the United Kingdom. She paid for his air ticket. He describes them as still "testing the waters". She did not give any evidence in the proceedings.
Allan lives with his wife and two of his children, Kieren, who is 20 years of age and disabled and his daughter, Alana, who is aged 10 years. Keiren is totally blind, has severe dyspraxia and recently suffered a stroke.
I have earlier stated Allan's and his wife's financial circumstances. It is unlikely that Alana's financial circumstances will be relevant to any claims.
(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
Wendy says that she is in good health and is an active and mobile person.
Allan gives no evidence of any physical, intellectual or mental disability. He states that his wife suffers from Graves' disease.
Leslie, whilst serving in the Australian Army was involved in a motor vehicle accident in Malaysia, in which five soldiers were killed and others injured. As a result, he has, since then, suffered Chronic Post Traumatic Stress Disorder with secondary depression and alcohol abuse. Unsurprisingly, his condition has a severe negative effect on all areas of his life, including work, relationships, and social activities. His condition is permanent and even with sustained treatment is unlikely to ever improve significantly. He is unable to work more than 8 hours per week (although he has not done so).
He has received psychiatric treatment on and off, mainly crisis interventions. He was, in December 2009, started on anti-depressant medication and has also received psychological treatment (focusing on anxiety management strategies) during 2009.
Since all parties agree that the provision made for Kieren should not bear the burden of any order made, it is unnecessary to provide more details of his current physical, intellectual and mental disabilities.
Neither Carmen nor Carolyn gives any evidence of any physical, intellectual or mental disability.
(g) the age of the applicant when the application is being considered
Wendy is aged 70 years, having been born in September 1941. Allan is aged 50 years, having been born in April 1961. Leslie is 43 years old, having been born in September 1968.
(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,
The deceased lived in Wendy's home at Castle Hill for the whole of their relationship. He did not pay to her any rent or occupation fee. This allowed one, or more, of the deceased's children to live in his home at Ryde.
Wendy paid all of the household expenses for the Castle Hill property. Initially, the deceased contributed $20 per week, which, over time, increased to $50 per week. By the date of his death, he was contributing $80 per week. They shared the costs of holidays, however, on three occasions, when they went to Melbourne, Wendy paid the hotel bill.
One of the companies of which Wendy was a director, purchased a car that the deceased used as his private car. It also paid all of the associated costs.
There is no dispute that Wendy provided great assistance to the deceased during the last few years of his life. The words of the deceased, written to his children, speak eloquently, of her significant contribution to his welfare.
(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,
The deceased lent one of the companies $60,000 in about 2009. Wendy gave the deceased $50,000 personally, to repay part of the loan.
Leslie received the following gifts or other benefits from the deceased:
Date of gift/benefit
Amount of gift/
value of benefit
Description
Approximately 2008
$3,000 (est)
Toyota Hi-lux
Approximately 2008
$ 800 (est)
Lawnmower
Weekly from around 6 July 2007 until 28 September 2009
$ 50
Approximately June 2007
$3,000 (est)
Health, management of condition
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person
There is much evidence about the deceased's desire to retain the Ryde property for the benefit of his children. However, it is neither unusual nor surprising that when Wendy's financial circumstances deteriorated, he considered what was in his, and her, best interests, namely the purchase of the Castle Hill property from the proceeds of sale of the Ryde property.
As the deceased wrote:
"The best result would be for me to buy this house if necessary as I have lived here for the last 14 years and I am comfortable here...I have all my stuff here... Think of the expenses to me if I have to go to a nursing home with none of my toys..."
(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
Only Leslie seems to have been maintained, in part, by him before the deceased's death.
(l) whether any other person is liable to support the applicant
Wendy has not entered into any other relationship. She maintains herself from the pensions she receives and from the money paid to her by Ross.
Apart from the Commonwealth government's responsibility to continue to provide a pension, and the superannuation trustees to continue to provide a pension to Wendy, there is no other person with a liability to support any of the Plaintiffs.
(m) the character and conduct of the applicant before and after the date of the death of the deceased person
Other than in the preamble to s 60(2), no guidance is given as to how the Court should use any evidence of character or conduct in deciding the issues.
Although there was a significant criticism of Wendy for her conduct relating to the deceased altering his Will, it seems to me that what she proposed was a sensible course in all the circumstances. As the deceased recognised, the purchase of the Castle Hill property would solve a number of different problems and provide a degree of continuity of living arrangements, not only for Wendy, but also for him.
Otherwise, there was no criticism made of Wendy's conduct.
(n) the conduct of any other person before and after the date of the death of the deceased person
The Act does not limit the consideration of "conduct" to conduct towards the deceased.
I am not satisfied that there was any conduct which would impact upon the claim of Wendy upon the bounty of the deceased.
It seems to me that the response of Allan and Leslie, in particular, to the deceased's testamentary intentions, demonstrated a greater concern for his inheritance, than a consideration and appreciation of the problems that were being faced by the deceased and the person with whom he had lived for over a decade, and the person who, apparently through no real fault of her own, was facing the loss of all of her assets, including her home.
Furthermore, all of the deceased's children appear to have been somewhat resentful and antagonistic towards Wendy (and vice versa), following the deceased's death, although this does not seem to have been the case during the deceased's lifetime.
Otherwise, whilst there were some comments made in Wendy's affidavits, which suggest a criticism of the conduct of one, or other, of the deceased's children towards the deceased, I have set out the relationship of each with the deceased.
Despite the above, I am not satisfied that there was any conduct which would impact upon the claims of Allan or Leslie upon the bounty of the deceased. The deceased recognised a moral obligation to each of his natural children and made provision for each of them.
(o) any relevant Aboriginal or Torres Strait Islander customary law
This is not relevant in the present case.
(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
I consider the following matters to be relevant:
(a) Carmen received US$6,000 from the deceased in 1993.
(b) Christine's affidavit contained no information about her financial and material circumstances. It follows that she does not advance her competing claim upon the basis of her financial and material circumstances.
Determination
Bearing in mind the nature of the claims and the size of the deceased's estate, it is necessary to first determine Wendy's claim before I turn to the claim of Leslie and then of Allan. In order of priority, all parties agreed that this was the order of priority of claims upon the bounty of the deceased and the order in which the Court should determine the matters. (This is not to say that, in all cases, one affords general primacy to a de facto widow of the deceased over all other applicants.)
There is no dispute that Wendy is an eligible person within the meaning of that term in s 57(1)(b) and that Allan and Leslie is each an eligible person under s 57(1)(c) of the Act. It is, thus, unnecessary, in each case, to consider whether there are any factors warranting the making of her, or his, application.
As Wendy's proceedings were commenced within the time prescribed by the Act, the first question for determination is whether, 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, or by the operation of the intestacy rules in relation to the estate of the deceased, or both.
I have set out the provision made for Wendy in the deceased's Will. That adequate provision for the proper maintenance or advancement in life was not made by the Will of the deceased, or by the operation of the intestacy rules, in relation to the estate of the deceased, or both, for her is clear. Accordingly, I am satisfied that she has satisfied the jurisdictional threshold. There was really no dispute that this finding should be made.
It is necessary, then, to consider whether to make a family provision order and the nature of any such order.
There was no dispute that an order should be made, or that in lieu of the provision made for Wendy, an amount which would be utilised by the Defendant to purchase accommodation for her ought to be provided, and that she should have a Crisp order in respect of that accommodation.
The real dispute related to what amount should be provided for that purpose, it being submitted, on her behalf, that an amount which would enable the purchase of the Castle Hill property, the home in which she and the deceased lived for over 14 years, and in which she has continued to live, would not only be adequate but proper. The Defendant submitted that the size of the estate and the competing claims would not enable such provision to be made.
In my view, Wendy, who was devoted to the deceased, who contributed to the bringing together of the deceased's children, and who, by providing accommodation to the deceased for the whole of their de facto relationship, is entitled to live in accommodation that provides more than bare subsistence, or accommodation that is simply sufficient to meet a need for a roof over her head. Despite the separation of their assets and finances, they planned to be, and had been, together for many years, which had provided mutual benefits.
In the circumstances of this case, Wendy's claim is such that she has the primary right to be considered. I consider that the standard of accommodation that she enjoyed, during the lifetime of the deceased, is a useful yardstick, as to what would be adequate and proper provision. Such accommodation would, if it were possible to obtain, ensure that the provision was sufficient to enable her to live neither luxuriously, nor miserably, but decently and comfortably according to her station in life.
However, I am unable to say whether this is possible. There is no certainty that the Castle Hill property will be able to be purchased for an amount in the order of $790,000 or such other sum that can be afforded. There is no certainty that Ross, who has stated that he is prepared to contribute $120,000 to the purchase price of accommodation for Wendy, will be able to raise that, or any, amount of money.
Also, there is some question whether the Defendant would be prepared to purchase the Castle Hill property if that means that he will be a co-owner with another person in that property. He appears to be of the view that there will be difficulties that he, as a trustee, would not want to experience, if this course is followed.
I suggested to the parties that they may wish to consider answering these questions, and in that regard, I would be prepared to consider a longer period before I delivered judgment to enable this to occur. However, having raised the matters, I was simply asked to publish my reasons and, thereafter, to allow the parties to consider what course to take.
In my view, in lieu of the provision for accommodation, the Defendant should make available out of the estate of the deceased, a lump sum of $650,000, which sum should be made available to purchase accommodation and to pay stamp duty and legal costs on purchase, for Wendy. An order in the form of a Crisp order in respect of that accommodation should be provided to her. A capital loss of up to, say, 20 per cent should be allowed, if further alternative accommodation in a nursing home, or retirement village, is required.
If it is reasonably possible, the Castle Hill property might be considered for purchase, even if it means that the Defendant will hold the property, with a co-owner, so long as the proposed co-owner does not encumber his, or her, interest in the property in any way. If necessary, I shall reserve further consideration, to either the Defendant, or Wendy, or, if appropriate, to Ross, on this aspect.
Unless any person wishes to make any application for costs, the usual order for Wendy's costs, capped at $50,000, should be made.
Upon Wendy's death, the estate's share of the proceeds of sale that are obtained from the sale of the property purchased by the estate for her, should be divided into equal shares, one share for each of Allan, Carmen and Carolyn.
I have ignored the interests of the children of Wendy (in the estate's share of the proceeds of sale of the accommodation purchased), as Mr Wilson submitted (apparently with their instructions) that her children did not seek to maintain any interest in the deceased's estate if Wendy's accommodation, by way of Crisp order, was secured.
I have given consideration to whether notice should have been given to Wendy's trustee in bankruptcy. There was evidence that he was aware of the proceedings but did not wish to participate. Ultimately, because of the nature of Wendy's entitlement under the Will, I do not think that any further notice to him is necessary, although a copy of this judgment should be provided to him well before the date to which the matter is adjourned.
In relation to the application for the extension of time by Allan and Leslie, the proceedings should have been commenced by 22 October 2010. The Summons, therefore, was filed about five and a half months out of time, in circumstances where Wendy's proceedings were already on foot but had not been determined.
That the advice given by the solicitor was as limited as it is said to have been, is hardly surprising, bearing in mind the instructions that appear to have been given. I do not even know whether the solicitor was provided with a copy of the deceased's Will.
However, even assuming the solicitor gave incompetent advice (and I am far from sure that she did) that, on its own, does not mean an application for extension should be refused, leaving it to each to make a claim against the solicitor: see, for example, Kalmar v Kalmar; estate of Kalmar [2006] NSWSC 437 at [24].
In my view, Allan and Leslie were entitled to rely upon the advice that they were given. When contrary advice was given, namely that the claim of each was arguable, they acted promptly in making a claim.
On balance, I am satisfied that a sufficient explanation has been given for failing to commence proceedings within time. That no prejudice would be suffered by Wendy if the time for the making the application is extended, taken with the lack of opposition to the extension sought, by the Defendant, leads me to conclude that I should extend the time for the making of the application to the date of the filing of the Summons, at least in the case of Leslie.
I have set out the provision made for Leslie in the deceased's Will. That adequate provision for the proper maintenance or advancement in life was not made by the Will of the deceased, or by the operation of the intestacy rules, in relation to the estate of the deceased, or both, for him, in my view, is equally clear. Accordingly, he has satisfied the jurisdictional threshold. There was really no dispute that this finding should be made.
It is necessary, then, to consider whether to make a family provision order and the nature of any such order for Leslie.
In my view, Leslie should receive, in lieu of the provision made for him in the Will of the deceased, a lump sum of $165,000 absolutely. This should enable him to pay off his loan on the car (say $26,000) and with the amount that he is able to borrow (he suggested about $100,000), he should be able to purchase accommodation ($170,000) and have about $60,000 to enable him to carry out some renovations or provide for exigencies of life. Alternatively, he will be able to purchase a more expensive home, if that is what he wishes to do.
Unless any person wishes to make any application for costs, the usual order for Leslie's costs should be made.
Unfortunately, I am unable to find that the provision for Allan in the Will of the deceased was inadequate, particularly, when one considers the very strong competing claim of Wendy, and also the strong competing claim of Leslie. It was accepted that his financial resources are far stronger than either of the other applicants, and whilst he has a significant mortgage, he appears to be able, with some difficulty, to manage. Furthermore, he appears to have the capacity to earn more, or otherwise improve his financial position in the future.
Even if I were in error in concluding that Allan had not satisfied the jurisdictional threshold, I would not, as a matter of discretion, make an order because of the strength of the competing claims. In an estate of this size, all the Court can do is to see that the available means of the deceased are justly divided between the persons having moral claims upon him in due proportion to the relative urgency of those claims: Allen v Manchester [1922] NZLR 218.
In any event, in making provision for each of Wendy and Leslie as I have, there will be nothing, or virtually nothing, left in the estate.
In the circumstances, it is futile to extend the time for making his application.
The Defendant's costs, calculated on the indemnity basis, should be paid out of the estate.
The Defendant should retain any amount not expended in satisfying the orders for provision and costs, in case there are future costs or disbursements of the estate. He should also retain any additional proceeds that he receives from the sale of the train collection, memorabilia, books, and videos, up to a total amount of say $25,000. Any sum, in excess, he may distribute equally between the three natural children of the deceased named in the Will (other than Leslie), if he chooses to.
In coming to the above conclusion, I have, of course, considered the circumstances of Allan, Carmen and Carolyn. Coincidentally, I note that had the whole of the estate (say $820,000) been divided equally into five shares now, each of the children of the deceased would receive $164,000. In other words, Leslie has received his share now, and the others will receive a greater share than that to which each is presently entitled upon the death of Wendy.
I direct the parties to prepare short minutes that reflect these reasons for judgment. I shall stand the proceedings over to enable them to give consideration to the terms and to consider whether the issue of costs can be resolved. I shall stand the proceedings over to a mutually convenient time for the making of orders.
I cannot end without commenting upon how unfortunate it is that so much time and money has been spent litigating these proceedings. The sage advice of the deceased, in a letter written shortly before his death, should have been given more weight by all of the parties:
"The most important thing that I would wish for is that all parties involved in this business treat each other with
(a) Kindness
(b) Compassion
(c) Civility
(d) Fairness
and no recourse to legal people."
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Decision last updated: 08 September 2011
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