Walsh v Walsh
[2013] NSWSC 1065
•12 August 2013
Supreme Court
New South Wales
Medium Neutral Citation: Walsh v Walsh [2013] NSWSC 1065 Hearing dates: 29 and 30 July 2013 Decision date: 12 August 2013 Jurisdiction: Equity Division Before: Hallen J Decision: (i) Having found that the Plaintiff, John William Walsh, is an eligible person, that the proceedings were commenced within time, and that the provision made for him in the Will of the deceased is inadequate for his proper maintenance or advancement in life, he should receive, in lieu of that provision, a lump sum calculated as 37 per cent of the net proceeds of sale of the Darlington home, such amount to be calculated after the payment of such costs of the proceedings as are ordered to be paid out of the estate of the deceased.
(ii) The provision made for the Plaintiff should be borne by the residuary estate.
(iii) No interest is to be paid on the lump sum, if it is paid within 14 days of the completion of the sale of the Darlington home; 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 Defendants' costs calculated on the indemnity basis, shall be paid out of the estate of the deceased.
(v) The Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005.
(vi) Consideration be reserved in respect of making consequential and ancillary orders for the purpose of giving effect to the family provision order.
Catchwords: SUCCESSION - FAMILY PROVISION - The Plaintiff, a son of the deceased, applies for a family provision order under Chapter 3 of the Succession Act 2006 - The Defendants are also children of the deceased and siblings of the Plaintiff - Deceased left Will allowing Plaintiff to reside in only substantial asset for 12 months and then divided estate between her four children - Whether adequate and proper provision not made in Will of the deceased for the Plaintiff and if so the nature and quantum of the provision to be made Legislation Cited: Administration and Probate Act 1958 (Vic)
Civil Procedure Rules 2005
Family Provision Act 1982
Probate and Administration Act 1898
Property (Relationships) Act 1984
Succession Amendment (Family Provision) Act 2008
Succession Act 2006
Uniform Civil Procedure Rules 2005Cases Cited: Alexander v Jansson [2010] NSWCA 176
Allardice v Allardice, In re Allardice, (1910) 29 NZLR 959
Allen (Dec'd), In re; Allen v Manchester [1922] NZLR 218
Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656
Austin a Bankrupt, Re [1982] 2 NZLR 524
Bartlett v Coomber [2008] NSWCA 100
Belfield v Belfield [2012] NSWSC 416
Blore v Lang (1960) 104 CLR 124
Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Buckland Deceased, Re [1966] VR 404
Butcher v Craig [2009] WASC 164
Christie v Manera [2006] WASC 287
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Crossman v Riedel [2004] ACTSC 127
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
Flathaug v Weaver [2003] NZFLR 730
Foley v Ellis [2008] NSWSC 288
Franks v Franks [2013] NSWCA 60
Fung v Ye [2007] NSWCA 115
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
Hawkins v Prestage (1989) 1 WAR 37
Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134
Hyland v Burbidge [2000] NSWSC 12
Kay v Archbold [2008] NSWSC 254
Keep v Bourke [2012] NSWCA 64
Kembrey v Cuskelly [2008] NSWSC 262
Kleinig v Neal (No. 2) [1981] 2 NSWLR 532
Lloyd-Williams v Mayfield [2005] NSWCA 189
MacGregor v MacGregor [2003] WASC 169
Marks v Marks [2003] WASCA 297
Mayfield v Lloyd-Williams [2004] NSWSC 419
McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
McKenzie v Topp [2004] VSC 90
Neale v Neale [2013] NSWSC 983
Oldereid v Chan [2013] NSWSC 434
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
Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100
Schmidt v Watkins [2002] VSC 273
Shearer v The Public Trustee (NSWSC, 23 March, 1998, unreported)
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
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
Taylor v Farrugia [2009] NSWSC 801
Tobin v Ezekiel [2012] NSWCA 285
Verzar v Verzar [2012] NSWSC 1380
Vigolo v Bostin [2005] HCA 11; (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)
Government Gazette No. 38 of 20 February 2009, page 1036Category: Principal judgment Parties: John William Walsh (Plaintiff)
Allan James Walsh (first Defendant)
Joan Catherine Bonning (second Defendant)Representation: Counsel:
Mr G McVay (Plaintiff)
Mr J H Stephenson (Defendants)
Solicitors:
Mills Oakley Lawyers (Plaintiff)
P J Wood & Associates (Defendants)
File Number(s): 2012/193223
Judgment
Introduction
HIS HONOUR: These reasons relate to proceedings, in which John William Walsh makes a claim for a family provision order under Chapter 3 of the Succession Act 2006 ("the Act"), out of the estate of his mother, Florence Mary Walsh ("the deceased"). 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 by s 5 of the Succession Amendment (Family Provision) Act 2008, effective from 1 March 2009 (s 2(1) Succession Amendment (Family Provision) Act 2008 and Government Gazette No. 38 of 20 February 2009, page 1036). A family provision order is an order made by the Court, under Chapter 3 of the Act, 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 Summons was filed on 20 June 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 Defendants named in the Summons are Allan James Walsh and Joan Catherine Bonning, the executors named in the deceased's last Will. Each is also a child of the deceased and a sibling of the Plaintiff. They resist the Plaintiff's application, submitting that the Court should not interfere with the testamentary dispositions made by the deceased and that no additional provision out of the estate should be made for him.
There were affidavits read, and oral evidence heard, during the trial. I have also received written and oral submissions from counsel. I shall not encumber these reasons with all the evidence or all of the submissions, although I have had regard to all of it.
Throughout these reasons, I shall refer, hereafter, to the parties and other family members, where necessary, by his, or her, first name. This is for convenience and I hope that it will not be thought discourteous.
Background Facts
The following facts are uncontroversial and provide a useful background.
The deceased died on 25 June 2011 aged 93 years. She was born in January 1918.
The deceased was married to James Matthew Walsh, in about 1944. He predeceased the deceased having died in about 1995. There were four children of the marriage, being Joan, who was born in August 1945 and who is currently aged 68 years; Allan, who was born in April 1947 and who is currently aged 66 years; James Matthew Walsh, who was born in June 1950 and is currently aged 63 years; and John, who was born in April 1953.
The deceased left a Will made on 27 March 2004. Probate in common form of that Will was granted to the Defendants on 24 August 2011.
The deceased's Will, relevantly, provided that John be permitted to live in the deceased's principal place of residence, and have use of the furniture and furnishings therein, for a period of twelve months following the deceased's death, he to pay all rates, taxes and other outgoings, as well as insurance premiums during that time, following which the residence and the contents were to be sold and other property of the deceased converted to cash. Then, after the payment of the deceased's debts, funeral, and testamentary expenses, including all probate, death and estate, duties, the net proceeds were to be divided equally amongst such of the deceased's children as survived her. (It follows that each of Joan, Allan, James and John, would receive 25% of the net proceeds.)
In the Inventory of Property placed inside, and attached to, the Probate document, the property owned solely by the deceased was disclosed as consisting of real estate at Darlington ($600,000) and cash in bank accounts ($47,725). (I have omitted, and shall continue to omit any reference to cents.)
The Darlington home, which is situated on 114 square metres of land in the inner West of Sydney, was the deceased's principal place of residence and the most significant asset in her estate. It is a one-bedroom terrace, which, some evidence reveals, requires either total renovation or rebuilding. The deceased appears to have lived there for many years until, in about October or November 2008, she moved into nursing home accommodation.
(There was evidence going to the layout of the accommodation and the inconvenient layout of the second bathroom and shower amenities. It is not necessary to detail this evidence as the Darlington home is to be sold.)
There were liabilities of the estate at the date of death being funeral expenses ($5,648). In addition, the costs and expenses of obtaining Probate, subsequently paid out of the estate, were $9,193. An additional $1,423 is to be paid out of the estate on account of costs to finalise the administration of the estate.
At the hearing, the parties were unable to agree on the current value of the Darlington home. The range of value that was suggested was between $750,000 and $835,000. They agreed, however, it must be sold and that if the sale price was $765,000, the estimated expenses of such sale would be $23,980 (being commission (including GST) ($16,830), marketing expenses ($4,000)), legal costs (including GST) ($2,750) and disbursements ($400), whilst if the sale price was $835,000, the estimated expenses of such sale would be $25,520 (being commission (including GST) ($18,370), marketing expenses ($4,000)), legal costs (including GST) ($2,750) and disbursements ($400) (Ex. 1).
The parties also agreed that there was no notional estate out of which a family provision order could be made. This is despite the fact that it was acknowledged that each of the parties, and James, had received $8,860 out of the estate.
Thus, but for the fact of these proceedings, the net available estate available for distribution, would have been $739,597 or $808,057, depending upon the sale price of the Darlington home. Thus, the entitlement of each of the children would have been $184,899 or $202,014 depending upon the sale price of the Darlington home.
However, in calculating the current net value of the deceased's estate, finally available for distribution, the costs of the proceedings should be considered, since the Plaintiff, if successful, normally, will be entitled to an order that his costs, calculated on the ordinary basis, be paid out of the estate, whilst the Defendants, as executors, irrespective of the outcome of the proceedings, normally, will be entitled to an order that their costs, calculated on the indemnity basis, be paid out of the estate.
The Plaintiff's solicitor, Mr Stephen Aroney, estimated John's costs and disbursements of the proceedings, including counsel's fees, calculated on the indemnity basis, to be about $59,990 (inclusive of GST and upon the basis of a two day hearing). Another affidavit was filed at the hearing, which revealed that the Plaintiff's costs and disbursements, calculated on the ordinary basis, are estimated to be $56,140. (The reason why there was only a nominal difference between the two estimates was not explained.)
Their solicitor, Mr Peter John Wood, has estimated the Defendants' costs and disbursements of the proceedings, including counsel's fees, calculated on the indemnity basis, to be about $82,586 (inclusive of GST and upon the basis of a two day hearing).
Of course, depending upon the result of John'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.
It follows, also, depending upon the costs orders that are made, from the value of the estate the total amount of say $138,726, may be payable for the parties' costs, leaving a net value of the estate, available for distribution, of about $600,871 or $669,331 depending upon the sale price of the Darlington home.
There is a difficulty in calculating the precise amount that each of the children of the deceased would currently receive out of the estate because of the uncertainty that exists about the extent of the net value of the estate, having regard to the sale price of the Darlington home, because the costs of these proceedings have only been estimated, and no order for costs has yet been made.
The parties, therefore, agreed that in the event that John succeeds, rather than ordering the provision to be made by payment of a lump sum of money, the Court should make an order calculated as an increased percentage of the proceeds of sale of the Darlington home, after the deduction of the costs and disbursements of sale and the payment of legal costs and disbursements of the proceedings ordered to be paid. That seems to be an appropriate course to follow in all the circumstances of the case. (Allan, Joan and James have agreed that they will share, equally, the burden of any increased provision made for John.)
The Defendants did not file any Cross-Claim seeking possession of the Darlington home. However, as John agrees that it is to be sold by them, he has indicated, through his counsel, that he will do all that is required, on his part, to assist the Defendants in the sale and will vacate the Darlington home within 14 days after the exchange of contracts for sale, or such other time as the parties agree in writing, to enable vacant possession to be given to any purchaser. The Defendants are prepared to accept the assurance given on behalf of John.
John accepts that Allan and Joan should receive their costs, calculated on the indemnity basis, no matter what the result of the proceedings. This acceptance does not extend to the amount of costs to be paid out of the estate on account of those costs. The Defendants, however, wish to be heard on how costs should be borne whatever the result of the proceedings.
The only persons described as eligible persons, within the meaning of the Act, are the parties and James, who was a witness whose affidavit was read, in part, by the Defendants (but who was not cross-examined).
The Act (as will be seen) provides that since each of the other eligible persons has not commenced proceedings, the Court may disregard his, or her, interests as a person in respect of whom an application for a family provision order may be made. However, the Court is not permitted to disregard the interests of each of Allan, Joan and James, as a beneficiary named in the Will of the deceased.
The Statutory Scheme - Family Provision Proceedings
First, I shall discuss the statutory scheme that is relevant to the facts of these proceedings. Although I have set out some of what I state hereunder in other cases, in view of the importance of this case to the parties, I shall repeat the principles. It is important that they are able to follow the reasoning and for each to be satisfied that I have considered the evidence and the submissions in their application.
The wording of the Act is similar to the wording of the former Act. However, it is necessary to remember the warning of Kirby P in Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100, at 76,304:
"Purposive construction of the Act
There is always a danger where a reformed Act borrows heavily upon ideas which previously existed in the common law or in an earlier statute, that lawyers will approach the construction of the Act affected by the previous law. Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1985) 2 NSWLR 475, 478. That danger is but an illustration, in the specialised activity of law, of a universal phenomenon of psychology long established in relation to human perception generally. We tend to perceive what we expect. We expect that with which we are familiar.
There is a particular danger in the case of the Family Provision Act in construing its terms by reference to the law which developed around the Testators' Family Maintenance and Guardianship of Infants Act 1916. That Act was passed in earlier times to govern the entitlements of a testator's family, as narrowly defined. The definition by s 3(1) of that Act confined applications to those made by "the widow, husband or children of such persons". There was no mention in it of former spouses. Doubtless this was because, for the early part of this century, divorce was relatively infrequent and then based upon concepts of matrimonial fault which would make interference in the testamentary disposition of the deceased unlikely. When enacted, the statute was a radical interference in the power of testamentary disposition. That was a significant power over private property, the disturbance of which was regarded as highly exceptional."
Whilst the relevant amendments made by the Act are not as significant to those made by the former Act, it remains necessary to bear his Honour's warning in mind in construing the statutory framework. In doing so, a construction that promotes the purpose, or object, of the Act is to be preferred to a construction that would not promote that purpose or object. In my view, the principles applied by the Courts to the former Act continue to apply, except to the extent that the Act otherwise requires.
As stated, 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 the applicant is an eligible person within the meaning of s 57(1) (s 59(1)(a)). The Court has no power to make an order in favour of an applicant who is not an eligible person. 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, one category is "a child of the deceased" (s 57(1)(c) of the Act). Clearly, that language is expressive of the person's status, as well as his, or her, relationship to the deceased. There is no age limit placed on a child making an application.
The Court, if satisfied of the applicant's eligibility, must, in this case, then determine whether adequate provision for the proper maintenance, education, or advancement in life, of that applicant has not been made by the Will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both (s 59(1)(c)). It is only if the Court is satisfied of the inadequacy of provision, that consideration is given to whether to make a family provision order (s 59(2)). 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 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. 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) 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, 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."
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, 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 or discriminates, in their application, between classes of eligible person. Similarly, there is no distinction based on gender.
The subsection 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.
It is relevant, in this case, to refer to, and discuss, s 60(2)(h). The terms of this sub-section are important. The "contribution" referred to is "any contribution ... 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".
Accordingly, what must be considered is, not only "any contribution ... made" but also whether "adequate consideration" was not received by the applicant for that contribution.
In regard to the contribution, as stated, it may be "financial or otherwise" and may be "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". Thus, it is necessary to also take into account imponderables, such as companionship provided by the applicant to the deceased.
Relevantly, in speaking of the "consideration not received" the sub-section does not speak in terms of "valuable consideration" or "full valuable consideration": see, for example, s 76(4) of the Act. Important, also, is the omission of the words "in money or moneys worth" after "adequate consideration".
Furthermore, the phrase "was not received" rather than "was not given" is significant.
There is no definition in the Act of the term "adequate consideration". To be "adequate", one would expect that the consideration should be more than nominal, trivial or colourable, and that it would have value in all the circumstances. However, whilst value is fundamental to consideration, that value is not to be confused with adequacy: Re Austin a Bankrupt [1982] 2 NZLR 524, at 527.
In determining whether there has been an adequacy of consideration received, ordinarily the examination would be of what is received by the applicant compared with the contribution the applicant has made. However, both the value of that contribution and of the consideration received may not be easy to assess.
Contributions of the type referred to in the sub-section that are made by an applicant have always been a relevant consideration in the determination of an applicant's claim upon bounty. For example, in Goodman v Windeyer Gibbs J, at 497-498, wrote:
"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."
The sub-section really does no more than give express recognition to the relevance of the contributions and the benefits received: McKenzie v Topp [2004] VSC 90, per Nettle J, at [33]. In stating the above, it should not be thought that the sub-section requires the precise mathematical calculation of the value of contribution made by the applicant and the value of what was received by him or her.
As was stated in relation to the equivalent section of the Victorian Act (Administration and Probate Act 1958, s 91(4)(k)) in Schmidt v Watkins [2002] VSC 273, at [25]:
"Such contribution may perhaps give rise to a duty to make adequate provision for the proper maintenance and support of the benefactor/applicant. But generally it will not do so of itself. Generally, it will be a factor in the creation of such a duty, or will enlarge a duty already in existence; as when a spouse or child of the deceased contributed to the deceased's wealth by working at less than award rates in the family business...."
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-s (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 out 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 will take effect, unless the court otherwise orders, as if the provision was made in a codicil to the will of the deceased, or in the case of intestacy, as in a will of the deceased (s 72(1) of the Act). (As I have written, 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.
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."
John did not provide any reasons, in his affidavits, why he would need a home or villa, rather than an apartment or home unit, or why he had chosen Katoomba or the Central Coast, as the places to which he might move (other than, perhaps, that he was looking after the deceased's cat).
He stated in cross-examination that Katoomba might be too cold for him and that, "realistically", where he lives in the future will depend upon the result of these proceedings, since that will determine what he can afford. He said, in cross-examination that he was "claustrophobic" and that this provided a reason for not living in a home unit, or apartment. (He accepted that there was no medical evidence of any such condition advanced by him.)
He submitted that paying rent (estimated to be $340 per week), when added to his other expenses would result in a total monthly expenditure of about $2,550, with the consequence that what he receives out of the estate will be spent in about 10 years.
In the written submissions, John's counsel also submitted "there should be an order that he receive 50% of the estate after costs and sale expenses".
Allan is married and has two adult children. He is the sole income earner as his wife does not work. (His wife suffers from depression and takes prescription medication.) Allan had a back operation in 2007 to relieve a crushed disc and to relieve sciatica and continues to have difficulty with bending over, lifting objects and straightening up.
Allan currently works as a handyman/carpenter at Cardinal Gilroy Village (where the deceased lived prior to her death).
Allan's current income is approximately $41,080 per annum. His assets consist of superannuation ($185,255), money in bank accounts ($36,125) a house owned with his wife (total value of $400,000). Their house is in need of repair. Allan's car is 20 years old and needs replacing.
Allan has recently retired and proposes to go onto a single pension (about $600 per fortnight). He will also rely on his superannuation to provide income and capital. His wife will not be eligible for an aged pension until about 2015.
Joan is retired and her income of $39,026 per annum is derived from superannuation payments and an aged pension. Her assets consist of superannuation ($235,824), term deposits and bank accounts ($43,675) and a 50% interest in the house in which she lives ($250,000).
Joan has three adult children. She has been separated from her husband, who is a joint owner of the house she lives in, for approximately 20 years. Joan has had little contact with him since they separated. They did not have any property settlement at the time of separation. The house is in need of substantial work. She has paid all the outgoings in relation to the house since she separated from her husband.
Joan's grandson (who does not work) lives with her. He pays no board. Her son previously lived with her and may return to live with her in the future.
James is single and does not have any children. He suffered a motor vehicle accident in 1985 and subsequently received a disability support pension. He has significant health issues relating to the motor vehicle accident, including Colles fractures and lack of strength in his arms, cartilage deterioration in his knees and ossifying bones and scoliosis of the spine.
A few years ago, James sold a rural property he had purchased and moved to Thailand, where he presently lives. He plans to remain in Thailand until he is 65 years of age and then to return to Australia at which time he may buy a house with whatever money he has.
James has a term deposit of $500,000. His only income is the interest he receives from that term deposit ($25,000 per annum). He does not own his own home.
The Defendants submit that adequate provision has been made by the terms of the Will and that John's Summons should be dismissed. In the event that the Court does not accept that submission, it is submitted that John's percentage share should be increased to 30 per cent.
(e) if the applicant is cohabiting with another person - the financial circumstances of the other person
John is not cohabiting with another 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
John gives evidence about his state of health, which he describes as "poor". He has osteoarthritis in both hands and tendonitis in both arms. He experiences pain symptoms in his forearms travelling into the elbows.
Since 2002, he has been diagnosed with Attention Deficit Disorder, general anxiety and agoraphobia secondary to a confluence of difficult personal circumstances including a relationship breakdown, grief/loss issues associated with the deceased's death, and family disputes regarding the sale of the family home. He takes anxiolytic medication and has had psychological counselling.
In cross-examination, he asserted that he suffered claustrophobia, but that condition is not mentioned in any of the reports annexed to his first affidavit.
(g) the age of the applicant when the application is being considered
John is currently aged 60 years having been born in April 1953.
(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
There is no suggestion that John made a contribution to the acquisition of the Darlington home or to other assets of the deceased. However, after returning to live with the deceased, and during the period he has lived in the Darlington home, he did make some contribution to the conservation and improvement of the building up of the estate, in the sense of the maintenance and improvement works that he undertook.
It is also clear that John made a significant contribution to the deceased's welfare during her lifetime, as her principal carer and companion between about 1996 and 2008. When he returned to live with the deceased in about 1996, the deceased was about 80 years of age. He says that he started cooking for her (once or twice a week), he did the grocery shopping, washing, cleaning, maintenance and the gardening. He would rent DVDs for her to watch and buy the newspaper and magazines for her to read.
As she aged, John would do more for her. He would take the deceased to her medical appointments. The deceased did not pay John for what he did.
I note that John received a carer's pension, from about 2002, for looking after the deceased. Although, this is not relevant in determining whether he received adequate consideration, it may otherwise be a relevant matter.
His counsel submits that "[D]uring her most vulnerable years, being the eleven years before going into the nursing home in 2008 [John] provided to the deceased full time care in her own home to allow her to live independently of any other source of care" and that "[B]y caring for the deceased [he] forewent the opportunity to establish himself in full time employment" and "also passed up the very valuable opportunity to live in public housing". (There is no evidence to corroborate the former assertion.)
(I do not doubt that if an applicant has made sacrifices on the deceased's behalf, that is a circumstance to be considered even if no monetary saving or benefit for the deceased resulted.)
John says that from 1996 until about 2006, he would share the costs of running the household with the deceased (other than paying for the house insurance which the deceased would pay). Between 2006 and 2008, he paid all home expenses, including utilities (other than the insurance premiums).
(The bankbook (Ex. B) of the deceased covering the period between July 2007 and October 2008, before she went into the nursing home reveals that her pension was deposited into her account and that there were regular withdrawals of between $150 and $200 per fortnight. Other bankbooks (also Ex. B), for the period thereafter, reveal the pension being deposited and regular withdrawals, which I understand to be the nursing home fees payable by the deceased.)
When the deceased moved into the nursing home, John would visit her regularly.
John painted the Darlington home inside and out, started a garden on the front balcony and the rear yard, put in sliding doors at the back of the house (at a cost of about $1,372), constructed an attic ($13,178), installed a skylight in the kitchen and in the lounge room ($550). He also did some electrical rewiring in the front and back ($600). He states that, in addition, he spent other moneys on the house totalling $4,130. The majority of the expenses were not incurred at the request of the deceased. (The sliding doors, in fact, were installed, in the room where he conducted his massages. He claimed the expenditure as a tax deduction.)
(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
There is no suggestion that John paid the deceased any rent, or occupation fee, for the period that he lived in the Darlington house, whilst she was alive, or that he has paid any amount to the estate. Of course, for the 12 month period following the deceased's death, he was not required to pay any rent or occupation fee, because he was permitted to live there pursuant to the terms of the deceased's Will. Accordingly, the provision of accommodation between 1996 to date is a significant benefit that John received from the deceased and, to a lesser extent, from the deceased's estate.
John was also able to use the Darlington home as a place from where he was able to conduct his massage business. (I accept that he has not done so for some time.)
The deceased, on occasions, paid for John's private health insurance premiums.
Of course, John also receives one quarter of the net value of the deceased's estate pursuant to the terms of the deceased's Will.
(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 in her last Will to which I have referred. However, John does refer to a belief that he had, following a conversation he says he had with the deceased and another with Joan that he would be able to live in the Darlington home for as long as he wished.
The conversation alleged with the deceased is inconsistent with what the deceased is said to have told James, which was in accordance with the terms of her last Will and about which James was not cross-examined.
On this topic, I do not find John's evidence convincing. Firstly, in relation to the conversation with the deceased, he admitted that he did not have a precise recollection of the words used by the deceased (although that was not stated in his affidavit but only in cross-examination). He also said he was interpreting what she said.
More importantly, John denied understanding the terms of the deceased's last Will, which he accepted he had seen when Joan showed it to him, he thought, in about 2004, which was some time after the conversation he alleged he had with the deceased. The terms of the deceased's last Will, particularly relating to the period of John's living in the Darlington home following the death of the deceased, are simple and clear.
Finally, on this topic, he gave no evidence in either of his affidavits, of any conversation with Joan about the deceased's Will, and did not say that he had any conversation with her about its meaning. In any event, when she was asked about any such conversation as alleged by John, she denied it.
(I should mention that Joan did refer to "the Will Mum made before" but neither party produced it or a copy of it.)
(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
The deceased did not maintain John, before her death, other than during his childhood. She did, however, permit him to live rent, and occupation fee, free in the Darlington home from about 1996.
(l) whether any other person is liable to support the applicant
There is no person with a liability to support the Plaintiff.
(m) the character and conduct of the applicant before and after the date of the death of the deceased person
An evaluation of "character and conduct" may be necessary, not for the sake of criticism, but to enable consideration of what is "adequate" and "proper" in all the circumstances. Importantly, the Act does not limit the consideration of "conduct" to conduct towards the deceased. However, good conduct is not to be rewarded by a generous, but second-hand, legacy at the hands of the court: Blore v Lang, at 134.
I have dealt with the relationship of the Plaintiff and the deceased and his conduct towards the deceased earlier in these reasons.
There is no suggestion that there is any adverse conduct that should be taken into account. (I do not consider that any isolated, or occasional, disputes between the deceased and John had the effect of disrupting the generally close relationship that they had, or that such disputes had the effect of constituting conduct which would disentitle, or reduce, the benefit of any order to which John might otherwise be entitled.)
The very fact that an applicant has been a dutiful and devoted 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: Hughes v National Trustees, Executors and Agency Company of Austrasia Limited, at 497-498.
(n) the conduct of any other person before and after the date of the death of the deceased person
I am satisfied that each of her children was a loving child to the deceased and that she enjoyed a close and trusting relationship with each of them. There is no conduct that suggests otherwise and John does not assert any such conduct.
Allan lived at home until he was married at 25 years of age. Prior to the deceased moving into the Cardinal Gilroy Village, Allan visited her every week. He also assisted with the maintenance on the Darlington home, including constructing a walk in bathroom. He, too, assisted the deceased with her shopping and his wife assisted with taking the deceased to her doctor's appointments. His family provided care and support to the deceased when she needed it.
Following her move to the nursing home, Allan visited the deceased approximately five or six times a day during the weekdays when he was working there and also frequently on the weekends. Allan and his wife assisted with the deceased's washing. On the occasions when the deceased was in Westmead hospital, Allan and his wife visited the deceased every day. Allan also looked after the deceased's financial affairs prior to her death.
Prior to the deceased's death, Joan visited the deceased every week and regularly telephoned her. Prior to the deceased moving into the nursing home, Joan went shopping with the deceased and, on occasions, the deceased stayed at Joan's house for the weekend. When the deceased moved into the nursing home, Joan visited her each Wednesday and Saturday and assisted the deceased with such tasks as having a shower.
When the deceased was admitted to Westmead hospital for ten days in 2011, Joan accompanied her in the ambulance both to and from the hospital and visited her each day. In the deceased's last four days, Joan slept in a chair in the deceased's room until the deceased passed away. Joan also assisted Allan in looking after the deceased's financial affairs.
James was also on good terms with the deceased. Prior to moving to Thailand in 2010, James rang her at least once a week. James also visited the deceased when she was in the nursing home. James also assisted Allan paint parts of the inside of the deceased's house.
The deceased told James that if ever he wanted to come back to Australia, there was a room for him in her home.
(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 is no other matter that I consider relevant. (None of the parties relied upon any matter under this ground that was not otherwise considered under the other grounds.)
Determination
Claims for a family provision order present particular difficulties where the actual estate is not very large and where there are several competing claims upon the bounty of the deceased. Any provision made by the Court in favour of the applicant must, in this class of case, be made at the expense of the beneficiaries who have had to defend the claims and who are the chosen objects of the deceased's bounty.
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 John, as a child of the deceased, is an eligible person within the meaning of s 57(1)(c) of the Act.
There is also no dispute that John commenced the proceedings within the time prescribed by the Act.
Then, the first question for determination is whether, at the time the Court is considering the application, adequate provision for John's proper maintenance or advancement in life has not been made by the Will of the deceased.
Having considered the matters I am required to consider, I am so satisfied. Other than the provision made for him in the deceased's Will, John has very little by way of assets and if he has not come to the end of his working life, he is certainly approaching it. He may be able to find some work, once this case is over and the concerns which cause anxiety are reduced, but the work that he is capable of doing is quite limited. There was really little, if any, challenge to his evidence of his lack of financial and material resources.
It is also clear that John has "needs". One such "need" is for accommodation. As stated above, "need" in the context of the Act is not determined by reference only to minimum standards of subsistence. Other than the provision made in the deceased's Will, he has virtually no capital sum to provide for the exigencies of life. If he used all that was provided for accommodation, he would only have his superannuation, a small cash sum and a car (the total value of which is unlikely to exceed $50,000).
Age and state of health are other factors to which, under the Act, the Court may have regard. John is 60 and does not appear to be in very good health. At the date of hearing, he appears not to be an "able-bodied adult", in the sense that the expression is usually used in connection with family provision litigation, of someone who is well able to earn enough by his own exertions to provide for his or her needs: Belfield v Belfield [2012] NSWSC 416; (2012) 16 BPR 31,177, per Campbell JA, at [82].
As I have stated, John submits that inadequate provision has been made for him and that the Court should make an order that he receive 50% of the net value of the estate. He submits that the deceased owed him "a quite considerable moral obligation" based upon the fact that "during her most vulnerable years, being the eleven years before going into the nursing home in 2008, he provided to the deceased full time care in her own home to allow her to live independently of any other source of care" and that by caring for her, "he forewent the opportunity to establish himself in full time employment" and "passed up the very valuable opportunity to live in public housing".
Whilst I am satisfied that the contribution by John to the deceased was significant, I do not accept that he gave up either opportunity solely because of the deceased. As acknowledged by his counsel, that he lived with the deceased provided benefits to both of them. I accept also, that it provided a benefit to the other children of the deceased, who were relieved of the obligation to do what John was doing for the deceased.
I accept also, that there was no dispute about the level of care provided by John to the deceased, or criticism of the care that he provided to her. In the circumstances, he did make a greater contribution, in this regard, than did any of the deceased's other children.
Yet, as was pointed out by Windeyer J in Blore v Lang, at 137, regarding the statutory predecessor to the former Act, the jurisdiction of the Court in a claim for a family provision order is "not to reward past services".
To accede to the primary submission made on behalf of John would be to reduce each of the other children's benefaction by about 8 per cent, with the effect that Allan, Joan and James would receive about 17 per cent of the net value of the deceased's estate.
Obviously, there are instances where because of the applicant's disability or other special circumstances, or where the estate is sufficiently large, a home or villa, of the type referred to in John's evidence, should be provided for him or her. However, in this case, that is not the only way in which adequate and proper provision could be made for him. For example, it may be by way of financial assistance towards rental accommodation, or, perhaps, some lesser assistance with the purchase of a unit or apartment.
Furthermore, in this case, it is important to remember the way in which John has lived throughout his adult life. He has not sought to own, and has not owned, a home. He lived in rented accommodation for about 18 years whilst he was in Melbourne, and then, apart from a period of about three months, lived in the home of his parents and then, after the death of his father, the home of the deceased.
I note also, that in April 2005, and then again in February 2008, in an Application Survey Form completed by John, addressed to Housing New South Wales, John stated that he did not require an additional bedroom. I infer that he then considered that one bedroom accommodation was satisfactory to meet his needs. The type of accommodation needed has not altered since then.
In addressing whether adequate provision was made for John, another consideration appears to be the assessment of the relative financial positions and competing claims of the other children of the deceased. In each case, Allan, Joan and James has a home, and in the case of James, a fund to purchase, or assist in the purchase of a home.
When one considers the competing claims of his siblings and the financial and material circumstances of each, the estate is not sufficiently large to enable provision of the lump sum sought by John to enable him to purchase unencumbered accommodation of the type referred to in his evidence. Nor does he have a "need" for such accommodation.
For these reasons, I am satisfied that the Will of the deceased (the rules of intestacy are irrelevant) does not make adequate provision for the proper maintenance or advancement in life of John.
Then, I next consider the nature and amount of any provision, if any, that should be made. I reject the Plaintiff's submission that he should receive 50 per cent of the net estate of the deceased. However, he should receive an additional percentage of the net proceeds of sale that could be used to assist him in the purchase of more modest accommodation.
In determining the nature and quantum of the provision, I take into account, also, that, during the lifetime of the deceased, she indirectly provided financial and other benefits to John. I also bear in mind his significant contribution, over about 12 years, to her welfare and otherwise, and the fact that he has continued to reside in the Darlington home, virtually alone, since October or November 2008. Furthermore, whilst each of his siblings is in a better financial position than John, none is in what one might describe as very comfortable circumstances. In any event, they do not have to justify the provision that the deceased made for each of them.
In my view, John should receive a lump sum calculated as 37 per cent of the net proceeds of sale of the Darlington home, such percentage to be calculated after the payment of such costs of the proceedings as are ordered to be paid. The amount yielded will depend upon the sale price of the Darlington home, but using the estimates referred to earlier, would provide between about $222,000 and about $248,000. What he receives should be sufficient to enable the purchase of suitable accommodation, and, if less than all of it is spent in purchasing that accommodation, will provide a supplementary amount for exigencies of life and perhaps, a small income to supplement what he receives by way of New Start allowance.
Importantly, also, each of the other beneficiaries will have his, and her, share of the net value of the estate, after the payment of costs, reduced by 4 per cent or, using the estimates previously referred to, between $24,000 and $27,000. In my view, the reduction will not impact, in any significant way, upon his, and her, financial resources respectively.
In the circumstances, I order that:
(i) Having found that the Plaintiff, John William Walsh, is an eligible person, that the proceedings were commenced within time, and that the provision made for him in the Will of the deceased is inadequate for his proper maintenance or advancement in life, he should receive, in lieu of that provision, a lump sum calculated as 37 per cent of the net proceeds of sale of the Darlington home, such amount to be calculated after the payment of such costs of the proceedings as are ordered to be paid out of the estate of the deceased.
(ii) The provision made for the Plaintiff should be borne by the residuary estate.
(iii) No interest is to be paid on the lump sum, if it is paid within 14 days of the completion of the sale of the Darlington home; 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 Defendants' costs calculated on the indemnity basis, shall be paid out of the estate of the deceased.
(v) The Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005.
(vi) Consideration be reserved in respect of making consequential and ancillary orders for the purpose of giving effect to the family provision order.
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Decision last updated: 29 August 2013
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