Vidler v Ivimey
[2013] NSWSC 1605
•05 November 2013
Supreme Court
New South Wales
Medium Neutral Citation: Vidler v Ivimey [2013] NSWSC 1605 Hearing dates: 28 October 2013 Decision date: 05 November 2013 Jurisdiction: Equity Division Before: Hallen J Decision: Direct the parties, within 7 days, to bring in agreed Short Minutes of Order reflecting the matters set out in paragraph [218] of these reasons.
Catchwords: SUCCESSION - Plaintiff makes a claim for a family provision order - No dispute as to the Plaintiff's eligibility as a person with whom the deceased was living in a de facto relationship at the date of his death - Defendant one of the children of the deceased by a prior marriage and the executor appointed in the Will of the deceased, to whom Probate was granted - Whether family provision order should be made bearing in mind the provision made in the Will, and if so, the nature and quantum of the further provision to be made Legislation Cited: Family Provision Act 1982
Probate and Administration Act 1898
Property (Relationships) Act 1984
Succession Act 2006
Succession Amendment (Family Provision) Act 2008
Uniform Civil Procedure Rules 2005Cases Cited: Alexander v Jansson [2010] NSWCA 176
Allardice, In re; Allardice v Allardice (1909) 29 NZLR 959
Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656
Bartlett v Coomber [2008] NSWCA 100
Belfield v Belfield [2012] NSWSC 416
Bladwell v Davis 2004] NSWCA 170
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Carega Properties SA (formerly Joram Developments Ltd) v Sharratt [1979] 2 All ER 1084; [1979] 1 WLR 928
Clifford v Mayr [2010] NSWCA 6
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Cross v Wasson [2009] NSWSC 378; (2009) 2 ASTLR 201
de Angelis v de Angelis [2003] VSC 432
Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127
Diver v Neal [2009] NSWCA 54; (2009) 2ASTLR 89
Flathaug v Weaver [2003] NZFLR 730
Foley v Ellis [2008] NSWCA 288
Forsyth v Sinclair [2010] VSCA 147
Franks v Franks [2013] NSWCA 60
Frisoli v Kourea; Frisoli v Kourea [2013] NSWSC 1166
Gardiner v Gardiner (NSWSC, 28 May 1998, unreported)
Goodman v Windeyer (1980) 144 CLR 490
Gorton v Parks (1989) 17 NSWLR 1
Grey v Harrison [1997] 2 VR 359
Harrisson v Skinner [2013] NSWSC 736
Hyland v Burbidge [2000] NSWSC 12
Kay v Archbold [2008] NSWSC 254
Keep v Bourke [2012] NSWCA 64
Kembrey v Cuskelly [2008] NSWSC 262
Luciano v Rosenblum (1985) 2 NSWLR 65
Marcuola-Bel Estate, Re; Marcuola-Bel v Thi Ly Tran [2005] NSWSC 1182
Marinis v Jeweller [2000] NSWCA 282
Marshall v Carruthers [2002] NSWCA 47
Mayfield v Lloyd-Williams [2004] NSWSC 419
McCosker v McCosker (1957) 97 CLR 566
Neale v Neale [2013] NSWSC 983
Oldereid v Chan [2013] NSWSC 434
O'Loughlin v O'Loughlin [2003] NSWCA 99
Palaganio v Mankarios [2011] NSWSC 61
Peters v Salmon [2013] NSWSC 953
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9
Puckridge, Deceased, In the Estate of, (1978) 20 SASR 72
Ross v Collins [1964] 1 All ER 861; [1964] 1 WLR 425
Sellers v Scrivenger [2010] VSC 320
Singer v Berghouse (No 2) (1994) 181 CLR 201
Sitch (deceased), Re the Will of; Gillies v Executors of the Will of Sitch [2005] VSC 308
Slack v Rogan; Palffy v Rogan [2013] NSWSC 522
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Stiles v Joseph (NSWSC, 16 December 1996, unreported)
Stott v Cook (1960) 33 ALJR 447
Szypica v O'Beirne [2013] NSWSC 297
Tchadovitch v Tchadovitch [2010] NSWCA 316
Tobin v Ezekiel [2012] NSWCA 285
Verzar v Verzar [2012] NSWSC 1380
Vigolo v Bostin (2005) 221 CLR 191
Walker v Walker (NSWSC, 17 May 1996, unreported)
White and Tulloch v White (1995) 19 Fam LR 696Texts Cited: J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 7th ed, 2006) Category: Principal judgment Parties: Margaret Eleanor Vidler (Plaintiff)
Roy Charles Ivimey (Defendant)Representation: Counsel:
Mr B Townsend (Plaintiff)
Mr L Ellison SC (Defendant)
Solicitors:
Horowitz & Bilinsky Pty Ltd (Plaintiff)
TressCox Lawyers (Defendant)
File Number(s): 2012/325815
JUDGMENT
The Claim
HIS HONOUR: These are proceedings commenced by Margaret Eleanor Vidler, who applies for a family provision order under Chapter 3 of the Succession Act 2006 ("the Act") upon the basis that she was a person living in a de facto relationship with Brian Harold Ivimey ("the deceased") at the time of his death.
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 Plaintiff commenced the proceedings by Summons filed on 19 October 2012; that is, within the time prescribed by s 58(2) of the Act (not later than 12 months after the date of the death of the deceased).
The Defendant named in the Summons is Roy Charles Ivimey, one of the three children of the deceased. He is the executor appointed in the Will of the deceased, to whom Probate was granted.
Without any undue familiarity, or disrespect intended, and for convenience, I shall refer, hereafter, to the Plaintiff and the Defendant, and any other family members, after introduction, by her, or his, given name, in these reasons rather than to the role each plays in the proceedings.
Although the matter was listed for two days, the parties were able to complete it within one. No time was spent objecting to parts of affidavits. Only Margaret, Roy and Wendy Ivimey, were cross-examined. The cross-examination, in each case, was short, with the result that the broad factual substratum of the case was not substantially in dispute. The legal representatives are to be commended for conducting the case in a way that enabled only the real issues in dispute to be ventilated.
Formal Matters
The following facts are uncontroversial.
The deceased died on 5 April 2012. He was then aged 86 years having been born in January 1926.
The deceased was married, first, to Valda Joyce Ivimey, but she predeceased the deceased, having died in April 1983. She was the mother of Roy, who was born in February 1961, and of the other surviving child of their marriage, namely, Wendy, who was born in July 1957. Their third child, Ian Brian Ivimey, did not survive the deceased, having died in May 2004.
Subsequently, the deceased married to Christine Killinger, but she does not feature in the proceedings, other than as an eligible person. Their marriage ended in the late 1990's, although it is clear that they had separated well before then.
The deceased and Margaret commenced their de facto relationship in about August 1994. It follows that the relationship, which ended on the deceased's death in April 2012, was of almost 18 years duration.
The deceased left a Will that he made on 23 December 2010, Probate in common form of which Will was granted, to Roy, on 12 September 2012, by this Court. (The second executor named in the deceased's Will, a solicitor, John MacLennan, renounced Probate.)
By that Will, the deceased gave to Margaret, who was described as "my partner", "$250,000 and all of the contents and my goods and chattels in my home at ... Mosman in consideration of the care and affection she has given me". He left the residue of his estate, after the payment of all debts, legacies, funeral and testamentary expenses and any death estate or succession duties, as follows:
"(i) as to a one quarter share equally for SANDRA KIM IVIMEY (the widow of my late son Ian Brian Ivimey) and their children, NICOLE MAREE IVIMEY, SCOTT LUKE IVIMEY and TIMOTHY BRIAN IVIMEY who survive me and reach the age of 23 years;
(ii) as to a one quarter share for my partner MARGARET...;
(iii) as to a three sixteenths share for my daughter WENDY...;
(iv) as to a three sixteenths share for my son ROY ...;
(v) as to a one eighth share equally for the children of Roy, SALLYANNE MARY IVIMEY, STEPHEN ROY IVIMEY, SHANE DEAN IVIMEY and SIMON RHYS IVIMEY who survive me and reach the age of 23 years ..."
I shall set out some undisputed facts about the grandchildren of the deceased, and about his daughter-in-law, Sandra, later in these reasons.
In the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the property owned solely by deceased at the date of death, was disclosed as having an estimated, or known, gross value of $1,816,226. No liabilities were disclosed. The estate was said to consist of real property at Mosman ($1,430,000) ("the Mosman property"), household contents, goods and chattels ($40,000), money in bank ($8,151), shares in public companies ($328,074), and a debt due by Roy to the estate ($10,000). (I have omitted any reference to cents and shall continue to do so. This may result in what might appear to be minor mathematical miscalculations.)
In addition, in the Inventory of Property, there was property owned by the deceased and Margaret, as joint tenants, being a property at Woy Woy ("the Woy Woy property")($420,000) and money in a joint bank account ($1,761). (The Woy Woy property was purchased in September 1999 for about $251,000. The deceased provided the whole of the purchase price, although title to the Woy Woy property was placed in the deceased's and Margaret's name as joint tenants.)
The Mosman property was sold, with the consent of Margaret, at auction, in August 2013 for $1,790,000. (She vacated the Mosman property in early September 2013.) The Defendant estimated that, after the payment of agent's commission ($32,220), painting expenses ($1,320), legal costs and expenses of sale ($3,800), the adjustment of rates ($1,755) and estimated strata levies ($8,800), the net proceeds of sale will be about $1,742,100.
Some of the deceased's shares were sold and the proceeds of sale ($86,981) paid into the trust account of Roy's solicitors. The remaining shares that are held have a current value of $266,384. The loan owed to the estate by Roy ($10,000) has not yet been repaid.
At the hearing, the parties were able to agree that the estimated current gross value of the estate is $1,824,238, of which $1,547,853 is held in the solicitor's trust account. However, from this estimate is to be deducted the estimated costs of the proceedings (which may be ordered to be paid to which I shall refer), potential capital gains tax, and income tax, liabilities of the deceased at the date of his death, as well as the income tax liability of the estate for the financial years ending 2012, 2013 and until the conclusion of the winding up of the estate (which is expected to be by 30 June 2014).
Roy was unable to estimate the liabilities to which I have referred. All that was said was that there were, or may be, some of these liabilities. The calculations made did not include the deduction of any of these potential liabilities. Roy says that the tax liabilities should be minimal.
Prior to the hearing, the deceased's contents, goods and chattels in the Mosman property were distributed to Margaret. (Whilst the value of those contents, goods and chattels, was said to be $40,000, I doubt that they were worth that much. Their precise value is probably not of any great significance in the circumstances of this case.)
In calculating the value of the estate finally available for distribution, the costs of the present proceedings should also be considered, since Margaret, if successful, normally, will be entitled to an order that her costs be paid out of the estate of the deceased, whilst Roy, as executor, irrespective of the outcome of the proceedings, normally, will be entitled to an order that his costs be paid out of the estate.
Mr C Bilinsky, solicitor, has estimated Margaret's costs and disbursements of the proceedings, including counsel's fees, calculated on the indemnity basis, to be about $52,792 (inclusive of GST and upon the basis of a two day hearing). Her costs and disbursements, calculated on the ordinary basis, were estimated to be $46,000. In view of the fact that the matter was concluded in one day, the estimate was reduced to $38,000.
Margaret has paid $18,997 on account of her costs and disbursements. If a costs order in her favour is made, she will recover some, or all, of this amount. I shall bear this in mind in dealing with her financial resources.
Ms C M McPhillips, solicitor, has estimated Roy's costs and disbursements of the proceedings, including senior counsel's fees, calculated on the indemnity basis (inclusive of GST and upon the basis of a two day hearing), to be $80,405, of which $31,265 has been paid out of the estate, leaving a balance of about $49,140 yet to be paid. Even though the matter was concluded in one day, the estimate was not reduced.
The parties accepted that, at the date of the hearing, I should determine Margaret's application upon the basis that the estimated value of the net distributable estate, after the payment of such costs as ordered to be paid out of the estate (using the costs estimates set out) will be about $1,737,098. This estimate was calculated by deducting from the gross value of the estate ($1,824,238) the total amount of costs that may be ordered to be paid out of the estate ($87,140).
On this basis, Margaret is entitled to a lump sum of $250,000, and an amount, calculated as one-quarter of the residuary estate. In fact, she has received the whole of the lump sum (in July and in October 2013). On the estimates set out above, her entitlement to one quarter of residue equates to about $433,274.
Of course, depending upon the result of Margaret's claim and any order made as to costs, the costs and disbursements, if payable out of the estate, will be able to be formally assessed, unless otherwise agreed by the parties. It follows that the amounts referred to are estimates only.
The persons who are, or who may be, eligible persons, within the meaning of the Act, are Margaret, Roy, Wendy and Christine. Other than Margaret and Roy, each has been served with a notice of claim. None, other than Margaret, has commenced proceedings seeking a family provision order.
However, Wendy, and all of the other beneficiaries named in the deceased's Will, has sworn, or affirmed, at least one affidavit that has been read in the proceedings. (Simon is a minor but has made an affidavit that was read in the proceedings.) Roy accepted the notice of claim that was served on Simon.
The Act (as will be seen) provides that since each of the other eligible persons has not commenced proceedings, I may disregard his, and her, interests as a person in respect of whom an application for a family provision order may be made. The Court is not permitted to disregard their interests, or the interests of the other beneficiaries, as beneficiaries.
Additional Undisputed Facts
The following facts, which, in my view, are not the subject of any dispute, or which have been established, should be noted:
(a) The Mosman property, in which Margaret lived with the deceased was described, in the sale brochure, as a townhouse set high above Sirius Cove, with three double bedrooms. It enjoyed unimpeded harbour views to the eastern suburbs. It had wraparound decks, one with a Jacuzzi, with a lounge and dining room and what was described as a "self contained studio/office". It had a front garden courtyard and a car space.
(b) Margaret described the Woy Woy property as a "holiday home" of fibro construction. She said that she and the deceased "stayed there" from time to time, but for no more than a few days at a time.
She is concerned about the bush fires and its remote location. The closest shop is about 5 kilometres away. She is also concerned that there is, or may be, asbestos in the house or garage. Despite the submission of senior Counsel for Roy, I accept Margaret's evidence that it is not a suitable home in which she should be expected to live.
(c) Each party provided evidence of the costs of alternative accommodation in Newcastle, the city in New South Wales where Margaret now wishes to live. She had lived there for the whole of her life prior to her commencing relationship with the deceased. She says that she has family and friends there. Ultimately, Roy seemed to accept that her choice to move back to Newcastle was a reasonable one.
(d) The range of accommodation costs, for properties, which each identified but which neither had inspected, was extremely wide. However, Margaret submitted that the estimated cost of suitable accommodation, in Newcastle, including associated expenses, would be about $800,000. Roy, by his counsel, accepted that the estimated cost of such accommodation was "within the range". I shall use that amount as the cost of alternative suitable accommodation in which Margaret might live.
(e) At that time she entered into the relationship, Margaret was working as a registered nurse. She gave up her job the following year in order to accompany the deceased on a three months overseas trip. Upon her return, she did some casual work as a nurse through an agency, so as to have more flexibility in spending time with the deceased.
(f) Margaret ceased work in the nursing profession in 1997 so that she could look after the deceased. However, she left work entirely, in 2000, in order to care for the deceased, which, whilst regular, did not involve constant care. From about 2006, however, the deceased required care seven days a week.
(g) In January 1997, the deceased underwent an operation involving coronary artery grafts. He suffered a peri-operative myocardial infarct and required more surgery, following which, after discharge from hospital, required 3 months of care at home. In 1998, he was diagnosed with prostate cancer, which required radiation treatment. In 2004, the deceased required the insertion of a Defibrillator/pacemaker. At about this time, he also contracted septicaemia and pneumonia. In March 2007, the deceased suffered a stroke, which left him with aphasia and a mild right-sided weakness. His health began to degenerate even further, after this time.
(h) Following the stroke, the deceased received speech therapy, to which Margaret drove him. She also spent about one hour a day, assisting with his speech therapy at home. At this time, for a few months, the Department of Veteran Affairs provided a carer for three hours a week and a cleaner for one and a half hours per fortnight. The deceased was unhappy with the carer who then ceased coming.
(i) The medical evidence from Dr William McKay, who was the deceased's treating doctor for the last three years of the deceased's life, stated that the deceased "had multiple, severe and complex medical conditions" and that he "required a high level of care which would ordinarily be provided by way of nursing home placement". Dr McKay confirmed, also, that he had "frequent contact" with Margaret, "as she accompanied him to almost all his appointments" and that but for the fact that she was a registered nurse and prepared to look after the deceased at home, he (Dr McKay) "would have pressed for the deceased to be placed in full-time, high level, nursing home care".
(j) A friend of Margaret, Penelope Jane Johnston, gives evidence of having observed Margaret supervising and administering the deceased's medical treatment at the Mosman property, including giving him injections, monitoring medications, changing wound dressings, bathing and dressing him, as well as preparing meals to meet his dietary requirements. She observed Margaret as having provided "loving and devoted care up to the end of [the deceased's] life".
(k) When the parties moved to the Mosman property, it was Margaret who carried out most of the tasks associated with the move.
The Statutory Scheme - The Act
Next, I shall discuss the statutory scheme that is relevant to the facts of the present case. Although I have set out most 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 equally important that they are able to follow the reasoning and for each to be satisfied that I have considered the evidence and the submissions in the application.
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'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 the deceased's disposition of his, or her, estate, 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 key provision is s 59 of the Act. The Court must be satisfied, first, that an applicant is an eligible person within the meaning of s 57(1) (s 59(1)(a)). In New South Wales, it is a multi-category based eligibility system, rather than one with a general category of eligibility (as it is, for example, in Victoria). There are six categories of persons by, or on whose behalf, an application may be made.
Relevantly, in this case, Margaret relies upon the category of eligibility referred to in s 57(1)(b) of the Act. There is no dispute that she is a person with whom the deceased was living in a de facto relationship at the time of his death.
It is only if eligibility is found, that the Court must determine whether adequate provision for the proper maintenance, education or 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 this mandatory legislative imperative that drives the ultimate result and 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)). Only then may "the Court ... make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made".
Allsop P in Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656, commented, at [6]:
"... the expression of the task in s 59 is subtly different from the previous legislation. A prohibition against making an order unless satisfied of circumstances of an evaluative character, is different in emphasis from a permission to make an order if satisfied of circumstances of an evaluative character... The exercise of power to make the order is conditioned on the Court being satisfied of certain things in s 59(1). The order that may be made is described in s 59(2). The two elements are described in s 60(1)(b) as "whether to make [an] ... order and the nature of any ... order." Section 60(2) provides a detailed body of considerations for the task in s 59."
Basten JA, at [26], put the differences this way:
"As appears from the language of the relevant provisions set out at [66]-[67] below, the Succession Act differs from the Family Provision Act in three significant respects. First, although both conferred similar powers on the Court, the conditions of their exercise differ. The Family Provision Act required that the Court "shall not make an order ... unless it is satisfied that" the provision made by the testator is "inadequate": s 9(2). The Succession Act provides that the Court "may ... make a family provision order ... if the Court is satisfied that" the testator has not made "adequate provision" for the applicant: s 59(1). The changes in language may have been intended to remove double negatives, but there is a resultant change in emphasis. The apparent effect is to widen the discretion vested in the court. That which could satisfy a court that the provision made is "not adequate", for the purposes of the Succession Act, might not have been sufficient to remove the prohibition under the Family Provision Act, which operated in the absence of affirmative satisfaction that the provision was "inadequate". There may well be no bright line boundary between adequacy and inadequacy."
Barrett JA, at [82] - [86], said:
"The court's task under the new legislation is in substance the same as that under the old. Three differences relevant to the kind of case under discussion may, however, be noted (I leave to one side as irrelevant to such cases the extension of the s 60(2) criteria to the question of "eligible person" status); and two postulated differences may be rejected.
First, the Succession Act provisions direct attention, upon the initial inquiry into adequacy, to provision made by the deceased's will and the intestacy laws. The former legislation referred merely to provision "out of the estate" but it was clear that the operation of the intestacy laws was to be taken into account in deciding what provision was available "out of the estate": see, for example, Smilek v Public Trustee [2008] NSWCA 190.
Second, the Succession Act provisions confine attention, upon that initial inquiry, to provision made by the will and the intestacy laws. There is no reference to provision made during the deceased's lifetime. In this respect, there is a departure from the Family Provision Act approach under which provision made in favour of the eligible person "either during the person's lifetime or out of the person's estate" was to be examined upon the initial inquiry into adequacy.
Attention may, however, still be given to provision made in favour of the applicant during the deceased's lifetime. That is now one of the factors to which regard may be had under s 60(1)(b) when the court is deciding whether to make a family provision order and the nature of the order: see s 60(2)(i). Under the Succession Act, therefore, provision made by the deceased while living thus has a continuing relevance with altered emphasis. Such provision is no longer something to be taken into account in deciding whether adequate provision has been made; but it may be taken into account in deciding whether an order should be made and the nature of the order.
The third difference to be noted is the Succession Act's more comprehensive catalogue of matters that may be taken into account in formulating an order for provision. Section 9(3) of the Family Provision Act empowered the court to "take into consideration" matters there stated in "determining what provision (if any) ought to be made in favour of an eligible person out of the estate or notional estate of a deceased person". Section 60(1)(b) of the Succession Act allows the court to "have regard to" the matters set out in s 60(2) "for the purpose of determining ... whether to make a family provision order and the nature of any such order". The Succession Act lists a greater number of such matters than did the Family Provision Act."
Other than by reference to the provision made in the Will of the deceased, or, if relevant, by the operation of the intestacy rules in relation to the estate of the deceased, or both, s 59(1)(c) of the Act 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.
In Grey v Harrison [1997] 2 VR 359, at 366-367, Callaway JA observed:
"There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, in much the same way as there is a range of awards for pain and suffering or a range of available sentences. Minds may legitimately differ as to the provision that should be made. Furthermore, it is not at all clear that reasons for an appropriate provision need be fully articulated. To borrow again from the analogy of sentencing, what is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight."
It was said in the Court of Appeal (by Basten JA) in Foley v Ellis [2008] NSWCA 288, at [3], that the state of satisfaction "depends upon a multi-faceted evaluative judgment". In Kay v Archbold [2008] NSWSC 254, at [126], White J said that the assessment of what provision is proper involved "an intuitive assessment". Stevenson J recently described it as "an evaluative determination of a discretionary nature, not susceptible of complete exposition" and one which is "inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific": Szypica v O'Beirne [2013] NSWSC 297, at [40].
Under s 59(1)(c) of the Act, the time at which the Court gives its consideration to the question of inadequacy of provision 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 [2009] NSWCA 54; (2009) 2ASTLR 89, 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 is the word "maintenance", nor the phrase "advancement in life", defined in the Act.
The term "maintenance" usually refers to a provision for the supply of the necessaries of life. However, in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon JJ, at 228-229, 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 Alexander v Jansson [2010] NSWCA 176, Brereton J (with whom Basten JA and Handley AJA agreed), at [18], stated:
"'Proper maintenance' is not limited to the bare sustenance of a claimant [cf Gorton v Parkes (sic) [1989] 17 NSWLR 1], but requires consideration of the totality of the claimant's position in life including age, status, relationship with the deceased, financial circumstances, the environs to which he or she is accustomed, and mobility."
In J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 7th ed, 2006), at 542, the learned authors comment upon the difference between the concepts of maintenance and advancement:
"The essential difference between 'maintenance' and 'advancement' is that 'maintenance' denotes a periodical payment or a payment which could validly be made periodically, whereas 'advancement' denotes a definite unique outlay for a specific purpose. Recipients of maintenance must, practically speaking, be infants, but adults may be recipients of an advancement.
An advancement can never be made of a sum of money which the person to whom it is made can immediately pocket, but it must be made with a view to the establishment of that person in a business or profession, or otherwise in some definite way for that person's benefit, the whole essence of an advancement being the immediate payment of a tolerably large sum for an immediate benefit to one beneficiary."
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."
Master Macready (as his Honour then was) in Stiles v Joseph (NSWSC, 16 December 1996, unreported) said, at 14-16:
"Apart from the High Court's statement that the words 'advancement in life' have a wide meaning and application ... there is little (if any) case law on the meaning of 'advancement' in the context of family provision applications. Zelling J in In The Estate of Wardle (1979) 22 SASR 139 at 144, had the same problem. However, commonly in decisions in which the Applicant's 'advancement in life' has been in issue, the Court has looked only at the material or financial situation of the Applicant, and there is nothing to suggest that provision for the Applicant's 'advancement in life' means anything more than material or financial advancement. For example, in Kleinig v Neal (No 2) [1981] 2 NSWLR 532, Holland J, discusses the financial assistance which an applicant may need for his or her maintenance and advancement in life in the following terms:- If the court is to make a judgment as to what a wise and just testator ought to have done in all the circumstances of the case, it could not be right to ignore that the particular testator was a wealthy man in considering what he ought to have done for his widow or children in making provision for their maintenance, education or advancement in life. There are different levels of need for such things. In the case of maintenance and advancement in life they can range from bare subsistence up to anything short of sheer luxury. A desire to improve one's standard of living or a desire to fulfil one's ambition for a career or to make the fullest use of one's skills and abilities in a trade or business, if hindered or frustrated by the lack of financial means required for the fulfilment of such desire or ambition, presents a need for such assistance and it would seem to me that it is open to a court to say, in the case of a wealthy spouse or parent who could have but has failed to provide such financial assistance, that ... [the deceased] has failed to make adequate provision for the proper maintenance and advancement in life of the spouse or children who had such need. (at 541)
In Pilkington v Inland Revenue Commissioners [1964] AC 612, Viscount Radcliffe defined 'advancement', in the context of a trustee's powers, as 'any use of ... money which will improve the material situation of the beneficiary' (at 635), and this definition was cited with approval by Pennycuick J in Re Clore's Settlement Trust; Sainer v Clore [1966] 2 All ER 272 at 274...
In Certoma, The Law of Succession In New South Wales (2nd Ed) at 208, it is said:
'Although 'maintenance' does not mean mere subsistence, in the context of the New South Wales Act, it probably does not extend to substantial capital investments such as the purchase of a business, an income-producing property or a home for the Applicant because these forms of provision are more likely to be within the power of the Court under 'advancement in life'. Maintenance is rather concerned with the discharge of the recurrent costs of daily living and not generally with substantial capital benefit.'
The Queensland Law Reform Commission, in its Working Paper on Uniform Succession Laws: Family Provision (Working Paper 47, 1995) ... notes ... that:
'Whereas support, maintenance and education are words traditionally associated with the expenditure of income, advancement has been associated with the expenditure of capital, such as setting a person up in business or upon marriage.'"
In Mayfield v Lloyd-Williams [2004] NSWSC 419, White J, at [114] 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."
In Bartlett v Coomber [2008] NSWCA 100, at [50], Mason P said:
"The concept of advancement in life goes beyond the need for education and maintenance. In a proper case it will extend to a capital payment designed to set a person up in business or upon marriage (McCosker v McCosker (1957) 97 CLR 566 at 575; Stiles v Joseph, (NSW Supreme Court, Macready M, 16 December 1996); Mayfield v Lloyd-Williams [2004] NSWSC 419)."
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, per Buss JA, at [72], [77].
These 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] HCA 82; (1957) 97 CLR 566 at 571-572, 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] HCA 31; (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 228, 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."
Santow J pointed out in Gardiner v Gardiner (NSWSC, 28 May 1998, unreported), that "adequate" and "proper" are independent concepts. He said, at 12:
"'Adequate' relates to the needs of the applicant. It is determined by reference to events occurring up to the death of the deceased, but also encompassing what the deceased might reasonably have foreseen before death. 'Proper' depends upon all the circumstances of the case. These include the applicant's station in life, the wealth of the deceased, the means and proper claims of all applicants, the relative urgency of the various claims on the deceased's bounty, the applicant's conduct in relation to the deceased, the applicant's contribution to building up the deceased's estate, the existence of dependents upon the applicant, the effects of inflation, the applicant's age and sex, and whether the applicant is able-bodied ..."
In Palaganio v Mankarios [2011] NSWSC 61, at [72], White J observed that the question of what provision for a person's maintenance, education or advancement in life is "proper" and the question of whether the provision made by the deceased was "adequate" for that person's maintenance, education or advancement in life involve value judgments on which minds can legitimately differ, and there are no definite criteria by which the question can be answered.
His Honour added in Slack v Rogan; Palffy v Rogan [2013] NSWSC 522, at [123]:
"The question of what level of maintenance or advancement in life is "proper" depends on all of the circumstances of the case "including the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty" (Singer v Berghouse (1994) 181 CLR 201 at 210)."
Until recently, it was unanimously thought that there are two stages of the determination. The first stage, provided for by s 59(1)(c), has been described as "the jurisdictional question": Singer v Berghouse [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 or advancement in life of a particular applicant. The Court does this by determining whether it is satisfied that adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased and/or by operation of the intestacy rules, for the applicant. If it is not so satisfied, then the Court is precluded from making a family provision order. At this stage, the Court has regard to, among other things, the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased and the circumstances and needs of the other beneficiaries or potential beneficiaries: see McCosker v McCosker at 571-572; Singer v Berghouse at 209-210; Vigolo v Bostin, at [16], [75], [112]; Tobin v Ezekiel [2012] NSWCA 285, at [70].
Whether an applicant has a 'need' or 'needs' is also a relevant factor at the first stage of the enquiry. It is an elusive concept to define, yet, 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 (Tobias JA, with whom Beazley and Hodgson JJA agreed).
In Collins v McGain, Tobias JA said:
"42. Further, 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 focussed. 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 because of that context that, in the present case, the "proper maintenance etc" of the appellant required consideration of a need to guard against the contingency to which I have referred."
In Devereaux-Warnes v Hall (No 3), at [81] - [84], 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]."
"Need", of course, is a relative concept: de Angelis v de Angelis [2003] VSC 432, per Dodds-Streeton J, at [45].
As Callinan and Heydon JJ emphasised in Vigolo v Bostin, the question of the adequacy of the provision made by the deceased "is not to be decided in a vacuum" or "by looking simply to the question whether the applicant has enough on which to survive or live comfortably". The inquiry is not confined only to the material circumstances of the applicant. The whole of the context must be examined.
In the event that the Court is satisfied that the power to make an order is enlivened (i.e. in this case it is satisfied that the applicant is an eligible person, 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) of the Act. 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.
However, Basten JA, in Andrew v Andrew, said of the two stage process referred to:
"29 The combination of changes requires that the court address the nature of the exercise being undertaken. Three potential consequences may be identified. First, there is a simplification of the structure of the process. There is no longer a two-stage process required. A degree of artificiality has thus been removed. The court should now ask what, taking all relevant factors into account, would have been adequate provision for the applicant. There is no first stage of determining whether the actual provision was "inadequate", followed by a discretionary exercise of determining what would be adequate and what should in fact be done.
...
41 As noted above, the language of the Succession Act is not consistent with the two-stage inquiry which was a common feature of earlier legislation: cf Singer v Berghouse at 208-209. In Keep v Bourke [2012] NSWCA 64 the Court appears to have assumed that the two-stage process continued to operate under the Succession Act: at [24]-[29]. However, the issue not having been directly addressed, there is no constraint on this Court now adopting a different approach. Nor does earlier High Court authority construing an earlier statutory scheme govern the approach to be adopted to materially different legislative provisions."
In Andrew v Andrew, Allsop P, at [6], said:
"Whether the process engaged in by the Court in s 59 can still be described as "two-staged" in the sense discussed in Singer v Berghouse [1994] HCA 40; 181 CLR 201 at 208-211 may be an analytical question of little consequence. The task involves an evaluative assessment and a choice as to consequence therefrom, appeal from which is governed by the principles concerning discretionary judgments: Singer v Berghouse at 211 and DAO v R [2011] NSWCCA 63; 278 ALR 765 at [93]."
Barrett JA disagreed with Basten JA, in Andrew v Andrew, saying:
"65 This is the second occasion on which this Court has been called upon to deal with a claim under s 59 of the Succession Act. In the earlier case, Keep v Bourke [2012] NSWCA 64, the Court proceeded on the basis that approaches taken under s 7 of the now superseded Family Provision Act 1982 remained relevant and applicable. That matter was explored in greater detail in the course of argument in the present case. For reasons I am about to state, I am of the opinion that the earlier approaches should continue to be followed in cases such as the present case and Keep v Bourke, that is, cases in which the applicant is a child of the deceased and no previous order for provision out of the estate has been made in favour of that applicant.
...
79 First, it is necessary, having regard to s 59(1)(c), for the court to be satisfied that, at the time when it is considering the application, "adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person". Whereas the former s 9(2) provided that an order was not to be made unless the court was "satisfied" in the specified way, the present legislation permits the court to make an order if "satisfied" in the specified way and, by necessary implication, precludes the making of an order if the court is not so "satisfied".
80 Second (and if the court is "satisfied" in the specified way), the "family provision order" that the court is empowered to make is, under s 59(2), "such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made"; and the court may, pursuant to s 60(1)(b), have regard to the matters specified in s 60(2) in deciding whether to make an order and the nature of the order.
81 Under s 59 and s 60, therefore, the task of the court, in a case of the kind under discussion, is:
(a) to determine the extent of the provision made for the maintenance, education and advancement in life of the applicant by the deceased's will or the intestacy laws;
(b) to form an opinion of the adequacy of that provision;
(c) if the opinion is one of inadequacy, to make an evaluative judgment as to what provision, if any, ought to be made out of the estate of the deceased person for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the court at the time the order is made; and
(d) in making that evaluative judgment, to take into account, as discretionary factors, the matters in s 60(2).
...
94 As stated in Keep v Bourke (above), the structure and effect of the Succession Act provisions warrant continuing adherence to the two-stage approach indicated by the decisions of the High Court in Singer v Berghouse and Vigolo v Bostin."
In Franks v Franks [2013] NSWCA 60, Young AJA (with whom McColl JA and Sackville AJA agreed), at [17], referred to the primary Judge (Macready AsJ) having "cited the High Court's decision in Singer v Berghouse [supra] and adopted the two stage process required by that decision".
His Honour noted also, at [29], that the appellant (in one of the two appeals) "accepted that it was appropriate for the primary judge to follow the course laid down in Singer v Berghouse and that [the respondent] had surmounted the first hurdle of the two stage process referred to therein. Accordingly, he identified the key question as whether the primary Judge had erred in determining the quantum of the provision made for ... in lieu of that made under the deceased's will".
At [35], his Honour wrote:
"On an appeal against a decision concerning the application of the second limb of Singer v Berghouse, the Court is dealing with a discretionary judgment (see Singer v Berghouse (at 211) and Durham v Durham [2011] NSWCA 62 at [82]; 80 NSWLR 335 (at 352)). It follows that his Honour's decision is reviewable by this Court only in accordance with the principles established in House v The King [1936] HCA 40; 55 CLR 499."
Although the appeal was allowed, that was because the Court found, at [42], that:
"... in formulating the quantum of the provision he made for Brad, the primary judge did not take into account the disparity in the financial circumstances between Gregory and Brad. Accordingly, the primary Judge's decision as to quantum must be set aside."
Nothing in the Court of Appeal's judgment in Franks v Franks suggests that the approach followed by the trial Judge, in adopting the two-stage process required by Singer v Berghouse, was wrong.
At first instance, there are a number of decisions to which reference should be made. In Verzar v Verzar [2012] NSWSC 1380, Lindsay J said:
"92 I refrain from characterisation of these elements of the case as "stages" because that is terminology associated with the Family Provision Act 1982 (NSW) and Singer v Berghouse (1994) 181 CLR 201 at 208-211. Since Andrew v Andrew [2012] NSWCA 308 (14 June 2012) per Allsop P at [5]-[6] and Basten JA at [27], [29] and [41] a single judge of the Court is bound, in my assessment, to regard the two-stage decision-making process identified in Singer v Berghouse, and confirmed by Vigolo v Bostin (2005) 221 CLR 191, as superseded by enactment of ss 59-60 of the Succession Act.
93 Although the provisions of ss 59(1)(c) and 59(2) might formerly have been treated, respectively, as re-embodiments of the first and second of the two-stages of decision-making identified in Singer v Berghouse, the test to be applied in Family Provision cases must be taken by me to have been modified."
Ball J, in Oldereid v Chan [2013] NSWSC 434, after referring to Andrew v Andrew, noted the different approaches being adopted by trial Judges. His Honour said:
"52 More recent decisions at first instance have differed on whether the decision in Andrew v Andrew requires the court to apply a two stage process or not. Lindsay J in Verzar v Verzar [2012] NSWSC 1380 thought that a single judge of the court is bound "to regard the two-stage decision-making process identified in Singer v Berghouse ... as superseded by enactment of ss 59-60 of the Succession Act" (at [92]). Hallen J, on the other hand, has continued to apply the two stage test: see Goldsmith v Goldsmith [2012] NSWSC 1486 at [67]; Nowak v Beska [2013] NSWSC 166 at [113]. A third approach, adopted by Macready AsJ in Morgan v Bohm [2013] NSWSC 145 at [110], is to consider the case on both bases. There are, however, difficulties with that approach. If the two approaches involve real differences, then presumably there are cases where they will produce different results. What, then, is to be done applying both approaches? On the other hand, if the two approaches are bound to produce the same result, the dispute about which test should be applied has no significance.
53 In my opinion, there is clearly a tension between the decisions of the Court of Appeal in Keep v Bourke [2012] NSWCA 64 and Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656 which only the Court of Appeal or High Court can resolve. In the meantime, the duty of a trial judge is to follow the later decision: see Ratcliffe v Watters (1969) 89 WN (NSW) Part 1 497 at 505 per Street J. In Andrew v Andrew, both Allsop P and Basten JA regarded the reformulation of the test in s 59 of the Succession Act as changing, perhaps only subtly, the threshold that must be satisfied before an order can be made. Basten JA regarded that change as also changing the way in which the court should approach the question. Allsop P regarded it as an analytical question of little consequence. However it is analysed, though, it is clear from the terms of s 59 that the court must ask itself the question whether it is satisfied that "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". If it is so satisfied, it must consider whether to make an order and, if so, the terms of that order. In undertaking each of those steps, it may have regard to the matters set out in s 60. Whether those steps should be seen as separate stages that must be followed or as convenient steps in undertaking what is required by the legislation does not matter for present purposes."
It appears that Ball J was not referred to Franks v Franks.
It seems to me, with great respect to those who disagree, that the amendments introduced by the Act do not require, or justify, a different approach. That approach, adopted in the myriad of cases determined under the Act, including Keep v Bourke [2012] NSWCA 64 (in which Macfarlan JA (except as to amount of provision) and Tobias AJA agreed with Barrett JA), and now Franks v Franks (a unanimous decision of the Court of Appeal), requires a trial Judge to continue to follow the two stage approach in determining cases under the Act, until any uncertainty is resolved. Furthermore, as Ball J repeats, the questions remain the same, namely, whether the Court can make an order for provision (whether it is satisfied that "adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made"), and if so, whether it should (whether to make an order and, if so, the terms of that order). As Allsop P said in Andrew v Andrew, at [6], "it may be an analytical question of little consequence".
More recently, Ball J in Peters v Salmon [2013] NSWSC 953, at [80], has referred to these decisions and to my own decision in Harrisson v Skinner [2013] NSWSC 736, at [62]-[79] where I stated what is said in the last paragraph, and commented:
"There is much to be said for that conclusion. However, whatever the position, as I pointed out in my judgment in Oldereid v Chan [2013] NSWSC 434 at [53] it seems clear from the terms of s 59 that the court must ask itself the question whether it is satisfied that "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". If it is so satisfied, it must consider whether to make an order and, if so, the terms of that order. In undertaking each of those steps, it may have regard to the matters set out in s 60."
In Frisoli v Kourea [2013] NSWSC 1166, Slattery J at [139] said:
"Whether the two-step test operates with the same full vigour in the current legislation as it did in the Family Provision Act 1982 has been recently discussed in the Court of Appeal: Evans v Levy [2011] NSWCA 125. Indeed in Andrew v Andrew [2012] NSWCA 308, especially at [26]-[29], and [41], the Court of Appeal has stated that the new language of the Succession Act is not consistent with the two stage inquiry which was a common feature of the earlier legislation. But such considerations are not determinative in this case, which is a clear one on the question of whether or not adequate provision has been made. It has not, for the reasons explained below. And even though the process may no longer be a two stage one, it still involves a similar range of relevant considerations."
Perhaps, the way to approach the matter is to simply to refer to the Act containing "twin tasks": Goodman v Windeyer, per Gibbs J, at 502, being the jurisdictional question and the discretionary question, with one task overlapping, to some extent, with the other.
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, described by Basten JA in Andrew v Andrew, at [37] as "a multifactorial list", and by Lindsay J in Verzar v Verzar, at [123], as "a valuable prompt" to which the Court may have regard, together with "any other matter the court considers relevant", for the purposes of determining eligibility, whether to make a family provision order and the nature of any such order.
It has recently been said by White J in Slack v Rogan; Palffy v Rogan, at [121], that s 60 "lists a wide range of matters" that the Court "may have regard to", but these do not provide any tangible assistance in answering the question in any particular case whether the provision made in a will was less than adequate for an eligible applicant's "proper" maintenance, education or advancement in life".
The section does not prioritise the catalogue of matters that may be taken into account. No matter is more, or less, important than any other. The weight of such of the matters specified in the section, which may be taken into account, will depend upon the facts of the particular case. There is no mandatory command to take into account any of the matters enumerated. None of the matters listed is, necessarily, of decisive significance and none differentiate, in their application, between classes of eligible person. Similarly, there is no distinction based on gender.
It does not say how the matters listed are to be used to determine the matters identified in s 60(1). 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 s 60(1)(a), many of the matters in s 60(2) will be largely, if not wholly, irrelevant.
There is no definition in the Act of "financial resources" (which term is referred to in s 60(2)(d)). However, there is a definition of that term in s 3 of the Property (Relationships) Act 1984, which I consider helpful:
"'financial resources' ... includes:
(a) a prospective claim or entitlement in respect of a scheme, fund or arrangement under which superannuation, retirement or similar benefits are provided,
(b) property which, pursuant to the provisions of a discretionary trust, may become vested in or used or applied in or towards the purposes of the parties ...,
(c) property, the alienation or disposition of which is wholly or partly under the control of the parties to the relationship or either of them and which is lawfully capable of being used or applied by or on behalf of the parties to the relationship or either of them in or towards their or his or her own purposes, and
(d) any other valuable benefit."
In Neale v Neale [2013] NSWSC 983, in relation to the meaning of that term, I referred to White and Tulloch v White (1995) 19 Fam LR 696 and the statement made in that case that the "term [connotes] some degree of entitlement to, control over, or relative certainty of receipt of property".
Of course, s 60(2)(d) refers also to "earning capacity", which means no more than the capacity to find employment to earn or derive income.
A reference to 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 any other eligible person, as well as of any beneficiary, whilst others do not. Importantly, also, many of the matters in sub-section (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 not be relevant to the jurisdictional question to be determined at the first stage. Happily, I am not alone in reaching this conclusion which is supported 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, 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 of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors."
As was also pointed out by Barrett JA, in Andrew v Andrew, at [88] - [89]:
"... leaving aside its relevance to the "eligible person" inquiry, the s 60(2) catalogue is directed to the question of what, if any, order for provision should be made and is not, in terms, applied to the initial question of the adequacy of the provision made by the will or the intestacy laws.
It can be said at once that the s 60(1)(b) directive corresponds with that in the former s 9(3) to the extent that it relates to the decision regarding provision to be made. There is no express legislative intention, under either piece of legislation, that the enumerated factors are to be taken into account in deciding the initial question of adequacy of provision. There is accordingly no reason to think that those factors are to be afforded any special relevance in approaching the adequacy question. But they will, at that point, be given, independently of s 60(1)(b), such weight as they deserve in their own right as indicators of the "adequacy" question. As the primary judge recognised at [57], this is consistent with what was said by the High Court in Singer v Berghouse in relation to the former Act."
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, and
(b) the amount and nature of the provision, and
(c) the manner in which the provision is to be provided and the part or parts of the estate out of which it is to be provided, and
(d) any conditions, restrictions or limitations imposed by the court.
The order for provision may require the provision to be made in a variety of ways, including a lump sum, periodic sum, or "in any other manner 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 takes 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). (Intestacy is irrelevant in these proceedings.)
Section 66 of the Act sets out the consequential and ancillary orders that may be made.
Section 99(1) 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 in such manner as the Court thinks fit.
Section 100 of the Act provides, in subsection (2) that in any proceedings under Chapter 3, evidence of a statement made by a deceased person is, subject to this section, admissible as evidence of any fact stated in it of which direct oral evidence by the deceased person would, if the person were able to give that evidence, be admissible.
Other Applicable Legal Principles - Substantive Application
Accepting that no two cases will be exactly alike, there are some general principles that may be stated. Whilst most of these principles were stated in the context of the former Act, they are equally apt in a claim brought pursuant to the Act.
Bryson J noted in Gorton v Parks (1989) 17 NSWLR 1, at 6, that it is not appropriate to endeavour to achieve "an overall fair" disposition of the deceased's estate. It is not part of the Court's function to achieve some kind of equity between the various claimants. The Court's role is not to reward an applicant, or to distribute the deceased's estate according to notions of fairness or equity. Nor is the purpose of the jurisdiction conferred by the Act to correct the hurt feelings, or sense of wrong, felt by an applicant. 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". Freedom of testamentary disposition is not to have "only a prima facie effect, the real dispositive power being vested in the court": Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9, at 19.
In Stott v Cook (1960) 33 ALJR 447, Taylor J, although dissenting in his determination of the case, observed, at 453-4, that the Court did not have a mandate to rework a Will according to its own notions of fairness. His Honour added:
"There is, in my opinion, no reason for thinking that justice is better served by the application of abstract principles of fairness than by acceptance of the judgment of a competent testator whose knowledge of the virtues and failings of the members of his family equips him for the responsibility of disposing of his estate in far better measure than can be afforded to a Court by a few pages of affidavits sworn after his death and which only too frequently provide but an incomplete and shallow reflection of family relations and characteristics. All this is, of course, subject to the proviso that an order may be made if it appears that the testator has failed to discharge a duty to make provision for the maintenance, education or advancement of his widow or children. But it must appear, firstly, that such a duty existed and, secondly, that it has not been discharged."
Also, in Vigolo v Bostin, Gleeson CJ pointed out that the legislation did not confer new rights of succession and did not create legal rights of inheritance. Rather, his Honour stated, at [10], that it "preserved freedom of testamentary disposition, but subjected that freedom to a new qualification". Thus, testamentary freedom is not absolute.
White J referred to these principles in Slack v Rogan; Palffy v Rogan, at [127]:
"In my view, respect should be given to a capable testator's judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate. That is not to deny that s 59 of the Succession Act interferes with the freedom of testamentary disposition. Plainly it does, and courts have a duty to interfere with the will if the provision made for an eligible applicant is less than adequate for his or her proper maintenance and advancement in life. But it must be acknowledged that the evidence that can be presented after the testator's death is necessarily inadequate. Typically, as in this case, there can be no or only limited contradiction of the applicant's evidence as to his or her relationship and dealings with the deceased. The deceased will have been in a better position to determine what provision for a claimant's maintenance and advancement in life is proper than will be a court called on to determine that question months or years after the deceased's death when the person best able to give evidence on that question is no longer alive. Accordingly, if the deceased was capable of giving due consideration to that question and did so, considerable weight should be given to the testator's testamentary wishes in recognition of the better position in which the deceased was placed (Stott v Cook (1960) 33 ALJR 447 per Taylor J at 453-454 cited in Nowak v Beska [2013] NSWSC 166 at [136]). This is subject to the qualification that the court's determination under s 59(1)(c) and (2) is to be made having regard to the circumstances at the time the court is considering the application, rather than at the time of the deceased's death or will."
Gleeson CJ observed in Vigolo v Bostin, at 199, 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. The process requires the Court to "connect the general but value-laden language of the statute to the community standards".
Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education and advancement in life of an applicant, is not fixed or static. 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: Pontifical Society for the Propagation of the Faith v Scales at 19; Walker v Walker (NSWSC, 17 May 1996, unreported); Stern v Sekers; Sekers v Sekers [2010] NSWSC 59.
As Allsop P said in Andrew v Andrew, at [16]:
"If I may respectfully paraphrase Sheller JA [in Permanent Trustee Co Limited v Fraser (1995) 36 NSWLR 24 at 46F-47B], the Court in assessing the matter at s 59(1) and the order that should be made under s 59(1) and (2), should be guided and assisted by considering what provision, in accordance with prevailing community standards of what is right and appropriate, ought to be made. This, Sheller JA said ... involved speaking for the feeling and judgment of fair and reasonable members of the community. It is to be emphasised that s 59(1)(c) and s 59(2) refer to the time when the Court is considering [an application for a family provision order] and the facts then known to the Court. The evaluative assessment is to be undertaken assuming full knowledge and appreciation of all the circumstances of the case. This ... makes the notion of compliance by the testator with a moral duty (on what he or she knew) apt to distract from the statutory task of the Court."
Roy's wife works but only casually.
Wendy is currently employed as a School Teacher in a country town. Her net annual income is $75,000 and her annual expenditure is $30,139. She has assets of approximately $801,762. She does not have any liabilities. She plans to retire in about 18 months, but may continue teaching thereafter, on a casual basis. She hopes to move from her present home to a coastal city, such as Port Macquarie, when she retires completely. She also is entitled to a three-sixteenths share of the deceased's estate.
Sally-Anne is currently employed as a Solicitor. Her net annual income is $76,780 (of which $22,360 is income she expects to receive by way of rent from an investment property), and her net annual expenditure is $80,029. She has assets of $421,500 and liabilities of $338,500.
Stephen, who is 24 years old, as at April 2013, was employed as a Business Development Consultant. His net annual income then was $75,415 and his annual expenditure was $68,530. He had assets of $66,197 and liabilities of $29,900. He did not own any real property.
Shane, who is 20 years old, as at April 2013, was enrolled at the Australian Defence Force Academy and is studying for a Bachelor of Arts through the University of New South Wales. He is also training to be an Intelligence Officer with the Royal Australian Air Force. His net annual income is $36,400 and his annual expenditure is $29,050. He does not disclose any assets or liabilities.
He says that he would like to purchase a car. He would like to travel to Gallipoli. Otherwise, he would use what he receives from the deceased's estate to meet his financial needs and to supplement his savings, which will be used as a deposit for a residential property of his own.
Nicole, who is 26 years old, is trained as a Medical Laboratory Assistant and is looking for work as a histology technician. She has had some experience working as a medical laboratory assistant, in the United Kingdom, at various hospitals. She returned from Europe a few weeks ago. She is, temporarily, living with her mother. Her current expenditure is not disclosed. She has assets of $321 and liabilities of $7,980.
She will use what she receives from the deceased's estate to pay off her debts and to support herself, whilst she is unemployed. She will also pay ($3,650) for a course which, when completed, would qualify her as a cytology screener. She, too, will save to place a deposit on a home.
Scott, who is 25 years old, was, in March 2013, employed as an Estimator/ Contracts Administrator. His net annual income was approximately $51,959 and his annual expenditure was approximately $46,176. He then had assets of $65,326 and liabilities of $38,170.
He will use what he receives from the deceased's estate to repay his debts, to supplement his income and to assist in the purchase of a home.
Simon, who is 17 years old, is currently studying for his Higher School Certificate. He is employed on a casual basis at K-Mart and presently earns $45 per week. His weekly expenses are not disclosed. He has assets of $3,200. He does not disclose any liabilities.
He hopes to undertake tertiary education and will use what he receives to pay for that education and also for his living expenses.
Sandra is a daughter-in-law of the deceased and the widow of the deceased's son, Ian. In April 2013, she was unemployed. She described her son, Timothy, with whom she lives, as her "main carer and supporter". Her net fortnightly income is derived from a New Start Allowance in the amount of $496. Her fortnightly expenditure is estimated to be $722. She states that she is "struggling to meet [her] expenses on [her] income". She has assets of approximately $776,210. She does not disclose any liabilities.
She will use what she receives from the deceased's estate to repay her liabilities and any surplus towards purchasing alternative accommodation, as well as for living expenses that are not met out of her income.
Timothy is 23 years old. In March 2013, he stated that he held four part-time jobs, one of which is as a personal trainer. He does not disclose his total income although he sets out various hourly rates from his positions.
He had some assets of minimal value and liabilities totalling $22,750. He assists Sandra in paying household expenses from time to time. He will use what he receives from the deceased's estate to repay his liabilities and any surplus for living expenses that are not met out of his income as well as to provide a fund whilst he develops a business.
(e) if the applicant is cohabiting with another person - the financial circumstances of the other person
This sub-section permits account to be taken of the financial circumstances relating to the cohabitation.
Margaret currently lives on her own in the Woy Woy property. However, as stated above, she will sell this property as soon as she is able to. There is no other person whose financial circumstances are relevant.
(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
Margaret describes her health as "reasonable". However, she suffers from oesophageal reflux, frequent ectopic heartbeats, pericardial effusion, myocardial ischaemia, and degenerative spinal disease. How any of these conditions affects her was not the subject of any evidence.
Wendy's health is poor. She has had her thyroid removed and requires daily replacement medication. She has been diagnosed with severe osteoarthritis in both knees which "impacts greatly on [her] mobility". She states that may need to retire early or work part time if her condition deteriorates, and that she will need knee replacement surgery in the near future. She also suffers from type 2 diabetes and requires medication.
Sally-Anne suffers from back pain as a result of an injury in 2012 in which she sustained a herniated disc. She receives ongoing physiotherapy and medical treatment.
Stephen underwent a knee reconstruction in 2005 but continues to suffer from discomfort. He receives chiropractic treatment at a cost of $1,000 per annum.
Nicole suffers from cluster migraine headaches in which she has severe headaches. When they occur, she is unable to work.
Sandra, who is aged 55 years, injured her knee in a workplace accident in 2009, as a result of which injury she can no longer lift anything weighing over 7kg. She also finds it difficult to climb stairs. (The diagnosis is "left knee arthritis".) This disability has impacted upon her ability to find employment in aged care nursing, which she states is the "only work for which [she] is experienced".
Scott's health is poor. He suffers from Crohn's Disease and a blood disorder called idiopathic thrombocytopenic purpure, known as ITP, which is a condition with an abnormally low platelet count of unknown cause. He makes frequent visits to a gastroenterologist and a haematologist, and also takes medication. He states that both conditions are chronic.
(g) the age of the applicant when the application is being considered
Margaret is currently aged 70 years.
(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 contribution made by an applicant to the estate of the deceased has long been regarded as a significant factor. In Goodman v Windeyer, Gibbs J wrote, at 497 - 498:
"One of the circumstances that must be considered in deciding upon the deserts of a claimant to a testator's estate, and in determining whether proper maintenance has been provided, is the manner in which that claimant has conducted himself or herself in relation to the testator. If the claimant has contributed to building up the testator's estate, or has helped him in other ways, that may give the claimant a special claim on the testator's bounty. This was recognized by Dixon C.J. in Coates v National Trustees Executors & Agency Co. Ltd when he said that the natural claims of a son upon his mother's testamentary bounty were "much strengthened by his cooperation and support in the conduct of her business and of her affairs". Perhaps the most recent example in this Court of a case in which a son's claims have been strengthened for this reason is Hughes v National Trustees Executors & Agency Co. (Australasia) Ltd. There is, however, no reason in principle why a son should stand in a special position in this regard, and the authorities here consistently treated the fact that a claimant has rendered services to the testator as relevant in cases of this kind - whether the claimant be a daughter (Blore v Lang), a widow (E v E, discussed in In re Worms; Worms v Campbell) or a widower (In re McElroy). The claimant's conduct does not cease to be relevant if it has not been of financial benefit to the testator - if, for example, the labour has been in vain. If the claimant has made sacrifices on the testator's behalf, that is a circumstance to be considered even if no monetary saving or benefit for the testator resulted. Indeed, the very fact that a claimant has been a dutiful and devoted spouse or child is one of the relevant circumstances of the case to be considered together with all the other circumstances in deciding whether proper maintenance has been provided."
Margaret did not make any direct contribution, financial or otherwise to the acquisition, conservation and improvement of the estate of the deceased. However, in my view she made a significant indirect financial contribution. But for her care of the deceased, he would have required nursing home accommodation, which, no doubt, would have had to be paid for. Alternatively, he would have required private care, also at some cost.
I have earlier identified the very significant contribution made by Margaret to the welfare of the deceased, a contribution that the deceased, himself, acknowledged in his Will. Although, the deceased attributed the legacy of $250,000 as being "in consideration of the care and affection" she had bestowed upon the deceased, that legacy was only received after his death.
(Margaret received a carer's pension prior to the deceased's death, but the sub-section specifically excludes its receipt.)
Margaret also looked after the domestic affairs of the household for many years. She gives evidence of the deceased continuing to entertain many visitors at the Mosman property.
I have earlier referred to the assistance provided to the deceased by Wendy. Margaret recalls only two occasions that Roy helped in looking after the deceased overnight. Roy did provide some assistance in the maintenance of the Mosman property (the extent of which is disputed). However, he prepared the deceased's taxation returns in the last two years of the deceased's life.
(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
I have earlier referred to the provision made for Margaret from the deceased's estate. The value of that provision is about $684,000. Of course, she also receives the Woy Woy property and the proceeds of the bank account held in joint names at the date of death by survivorship. She receives the pension and pension supplement, to which I have referred, as the person with whom the deceased was living in a de facto relationship at the date of his death.
Senior counsel for Roy submitted that I should remember that Margaret lived with the deceased in the Mosman property rent-free. I have borne it in mind.
The deceased and Margaret took a trip overseas for about three months in about 1995. She had to give up her job as she could not obtain holiday, or long service, leave in order to accompany the deceased.
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person
There is no evidence of the testamentary intentions of the deceased other than the Will to which I have referred. The Will was made about 17 months prior to the deceased's death.
(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
Margaret received a carer's pension (about $176 per fortnight) to which I have referred. Otherwise, the deceased maintained her fully for many years prior to his death. The extent to which, and the basis upon which, he did so, is not the subject of any evidence.
(l) whether any other person is liable to support the applicant
There is no person liable to support Margaret. However, she is entitled to the Department of Veteran Affairs pension and pension supplement for the remainder of her life.
(m) the character and conduct of the applicant before and after the date of the death of the deceased person
I am satisfied that there is nothing in Margaret's conduct not already referred to, before, or after, the death of the deceased that is relevant. However, I note that she did not seek to assert an entitlement to remain in the Mosman property, which had been her home for almost the whole of her relationship with the deceased. Her reason for not doing so appears to have been her feeling that she "could not afford the additional cost of living in the Mosman area".
There is certainly no evidence of any adverse conduct that should be taken into account.
(n) the conduct of any other person before and after the date of the death of the deceased person
In relation to the deceased, I am satisfied that there is nothing in the conduct of his children, his daughter-in-law, and his grandchildren that is relevant. Each of his children had a close relationship with the deceased. Sandra and each of the other grandchildren had a reasonably close relationship with him also.
(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
There are no other matters that I consider relevant.
Determination
Being an "eligible person" is a necessary precondition to the Court being empowered to make an order for the maintenance, education or advancement in life of the eligible person. In this case, there is no dispute that Margaret was living in a de facto relationship with the deceased at the date of his death. Accordingly, she is an eligible person under s 57(1)(b) of the Act.
There is also no dispute that Margaret commenced the proceedings within the time prescribed by the Act.
Having established eligibility and that the proceedings were commenced within time, 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 Margaret, has not been made by the Will of the deceased.
It is this matter this was the subject of the real dispute between the parties. Roy submitted that making the provision the deceased had made was adequate and proper in all the circumstances and that, accordingly, Margaret's Summons should be dismissed. He submitted that Margaret, with her entitlement under the deceased's Will, would have sufficient to purchase the alternative accommodation ($800,000) and she would have over $300,000 as a capital fund (made up of the $293,000, the balance of her entitlement (about $33,000) and the superannuation (about $40,000)) available. She was entitled to a pension and supplement pension for her life. (Initially, he had submitted that there was no evidence that the Woy Woy property was unsuitable accommodation for Margaret. However, I have dealt with this earlier.)
In the circumstances of this case, taking into account all the matters, including such matters as the nature and quality of the relationship between the deceased and Margaret; her character and conduct; circumstances relating to what once was called the "station in life" of the parties and the expectations to which that has given rise, or in other words, reciprocal claims and duties based on how the parties lived and might reasonably have expected to live in the future; her present and reasonably anticipated future needs; her own capacity and resources for meeting those needs; the size and nature of the estate and of any relevant dispositions which may have reduced the estate available for distribution according to the Will; the nature and relative strengths of the competing claims of testamentary recognition; and any contributions of Margaret to the property or to the welfare of the deceased, I am satisfied, for the purposes of s 59(1)(c) of the Act, that the deceased did not make adequate provision for the proper maintenance or advancement in life of Margaret.
It is also clear that Margaret has some "needs". As stated above, "need" in the context of the Act is not determined by reference only to minimum standards of subsistence. Nor is it limited to whether the applicant has, at the date of hearing, an immediate need for financial assistance with respect to his maintenance. It is a broader concept, which requires consideration of matters necessary to guard against unforeseen contingencies.
Age and state of health are factors to which, under the Act, the Court may have regard. At the date of hearing, Margaret is not an "able-bodied adult", in the sense that the expression is usually used in connection with family provision litigation, of someone who is, or will be, well able to earn enough by her, or his, own exertions to provide for her, or his needs: Belfield v Belfield [2012] NSWSC 416, per Campbell JA, at [82]. She has no reasonable prospect of improving her income and, in the future, she may face the prospect of increasing costs of living associated with ageing and ill health.
Furthermore, I cannot decide the question of the adequacy, or inadequacy, of the provision made, if any, in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive, or live comfortably. The word 'proper' in the collocation of words in the section of the Act being considered is of considerable importance.
In particular, Margaret currently has a shortfall of income when one considers the outgoings about which she has given evidence. On present estimates, that shortfall appears to be about $30,000 per annum.
However, even though she was not cross-examined on those estimated outgoings, which she stated in her affidavit of October 2012 and which she did not update, I do not think that the quantum of her future living expenses can be precisely quantified. I also do not think that one could conclude that she reasonably requires $12,000 per annum for holidays, or $10,000 per annum, for repairs and maintenance, in all the circumstances of this case. Other than one holiday lasting three months at the commencement of their relationship and doing some travelling within Australia on some occasions, the nature and duration of which is not the subject of evidence, there is no evidence that annual holidays, or spending that amount on annual holidays, was part of the lifestyle that she enjoyed with the deceased.
Since the alternative accommodation that she wishes to purchase has not been purchased, to attribute $10,000 per annum for repairs, renovations and replacements, seems speculative.
This is not to say, however, that some allowance should not be made for expenditure of that type. Margaret, following her moving out of the Mosman property in September 2013, and for her 70th birthday went on a five week cruise (at a cost of $14,000) with school friends.
Similarly, as submitted by senior counsel for Roy, Margaret is likely to move into strata accommodation, it is unlikely that there will be lawn mowing expenses ($360 per annum) or as much spent for home and contents insurance ($1,370 per annum) at least part of which will be absorbed in the strata levies.
In stating these matters, I remember what was said by Davies AJA in the Court of Appeal in O'Loughlin v O'Loughlin, at [23]:
"In the present case, it was clear that the respondent had insufficient income to support herself even at the standard of living which she had adopted by the time of the trial. Her annual outgoings were estimated as at that time at $40,000, whereas her net income was only $26,000. That raised the question whether the respondent should be expected to live off her capital. The trial judge rejected that view. I see no error in his value judgment."
Yet, I do not forget that in Marinis v Jeweller [2000] NSWCA 282, the Court (comprising Mason P, Giles JA and Rolfe AJA), wrote, at [26]:
"...We would reject the appellant's submission that adequate provision by a deceased person requires the deceased to ensure that an eligible person must be provided for to such a level as would ensure that his or her available assets are not reduced in consequence of the death and that the eligible person should not be obliged to re-arrange or re-organise his or her available assets."
Ultimately, where one draws the line depends upon all the circumstances of the case.
I consider, using her present income and what I regard as her reasonable estimated expenses as guides, that Margaret will have an estimated shortfall of income over expenses of no less than $20,000 per annum, or about $400 per week. An amount of nearly $40,000 per annum, by way of income, should be sufficient to enable her to live in a reasonable degree of comfort, and free from any financial worries. I take into consideration that the pension supplement and gold card provides her with hospital, medical and pharmaceutical benefits, transport concessions and a discount on council rates.
The parties were able to agree upon the lump sum required to generate an income of $400 per week, considering Margaret's life expectancy, of about 17 years, depending on the discount factor used, was between about $241,000 and $279,000. (In providing the calculations, which also included, alternatively, the lump sum required to generate $200 per week, and also $600 per week, counsel made clear that they had simply agreed upon mathematical calculations and neither party was submitting that the lump sum should be used for any other purpose.)
However, the calculations provided support my conclusion that, at the time when the Court is considering the application, adequate provision for the proper maintenance or advancement in life of Margaret, has not been made by the Will of the deceased. Using the calculation of $400 per week as a guide, it seems clear that she may not have sufficient capital, after the purchase of the accommodation, to generate such additional income, without expending all of her remaining capital. She should not have to do so in the circumstances of this case.
I am satisfied that additional provision should be made for Margaret out of the estate of the deceased. If the Court came to that conclusion, the parties submitted that the provision should be expressed in terms of a lump sum in lieu of the provision of a one-quarter share of residue. I agree.
I turn then to s 59(2), namely the question what provision "ought to be made for the maintenance, education or advancement in life" of the applicant having regard to the facts known to the Court. The order should be no more than is necessary to make adequate provision for her proper maintenance and advancement in life. Furthermore, I must take into account the right of the deceased to dispose of his property as he did in his Will, as well as the position of the chosen objects of the testamentary bounty of the deceased, namely his children, his daughter-in-law, and his grandchildren.
In my view, Margaret should receive, in lieu of the provision made for her out of the residuary estate, a lump sum of $650,000. Using the estimates previously stated, this would result in an additional provision of about $217,000. She will then have a capital sum of about $910,000 available, plus, in due course, the proceeds of sale of the Woy Woy property (say $400,000), and her superannuation (about $40,000). After the payment of the purchase price of the Newcastle accommodation ($800,000), she will have about $500,000, plus her superannuation, on which to live for the remainder of her life. That sum will be available to provide additional income and, if necessary, capital. She, of course, will continue to receive the pension and pension supplement, which she accepts is not means tested.
(I note that the cash provision made for her by the deceased out of his estate, taking into account the legacy that has already been paid, would be increased to $900,000.)
I am of the view that the provision which I propose to order will not impact, significantly, on the beneficiaries, who should bear the burden of this provision in the proportions to which each will be ultimately entitled taking into account the adjustment that is required to be made to the proportions of residue.
In the circumstances, I direct the parties, within 7 days, to bring in Short Minutes of Order, reflecting these reasons. The Short Minutes of Order should include, at least, that:
(i) Having found that the Plaintiff, Margaret Eleanor Vidler, is an eligible person, and that the provision made for her in the Will of the deceased is inadequate for her proper maintenance or advancement in life, order that she receive, in lieu of the provision made for her out of the residue of the estate, but in addition to the legacy paid to her ($250,000), a lump sum of $650,000 out of the estate of the deceased.
(ii) Order that the burden of the provision made for the Plaintiff should be borne out of the residuary estate and the shares of the beneficiaries should be altered to take into account that the Plaintiff is no longer a residuary beneficiary.
(iii) Order that no interest is to be paid on the lump sum, if it is paid within 14 days of the making of the orders; otherwise, interest calculated at the rate prescribed by s 84A(3) of the Probate and Administration Act 1898, on unpaid legacies, is to be paid from that date until the date of payment of the lump sum.
(iv) Unless either party wishes to argue the question of costs, the Plaintiff's costs, calculated on the ordinary basis, and the balance of the Defendant's costs calculated on the indemnity basis, be paid out of the estate of the deceased.
(v) Order that the Exhibits be dealt with in accordance with the Uniform Civil Procedure Rules 2005 following the determination of the costs of the proceedings.
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Decision last updated: 05 November 2013
Key Legal Topics
Areas of Law
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Succession Law
Legal Concepts
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Family Provision Order
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Provision in Will
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Quantum of Provision
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